Exhibit 99.2
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CREDIT AGREEMENT
Dated as of May 15, 2003
among
XXXXXX, INC.,
XXXXX INDUSTRIES, INC., FABTEK CORPORATION, XXXXXXXXX MANUFACTURING
CORPORATION, GEAR PRODUCTS, INC. OMARK PROPERTIES, INC. and
WINDSOR FORESTRY TOOLS LLC,
as US Borrowers,
XXXXXX CANADA LTD.
as Canadian Borrower,
THE OTHER CREDIT PARTIES SIGNATORY HERETO,
as Credit Parties,
THE LENDERS SIGNATORY HERETO
FROM TIME TO TIME,
as Lenders,
GENERAL ELECTRIC CAPITAL CORPORATION,
as Administrative Agent, Collateral Agent and US Lender,
and
GENERAL ELECTRIC CAPITAL CANADA INC.,
as Canadian Administrative Agent and Canadian Lender
GECC CAPITAL MARKETS GROUP, INC.,
as Lead Arranger
XXXXXX COMMERCIAL PAPER INC.,
as Syndication Agent
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TABLE OF CONTENTS
Page
1. AMOUNT AND TERMS OF CREDIT.............................................2
1.1 Credit Facilities.............................................2
1.2 Letters of Credit............................................11
1.3 Prepayments..................................................11
1.4 Use of Proceeds..............................................13
1.5 Interest and Applicable Margins..............................13
1.6 Eligible Accounts............................................18
1.7 Eligible Inventory...........................................21
1.8 Cash Management Systems......................................23
1.9 Fees.........................................................23
1.10 Receipt of Payments..........................................25
1.11 Application and Allocation of Payments.......................26
1.12 Loan Account and Accounting..................................27
1.13 Indemnity....................................................27
1.14 Access.......................................................29
1.15 Taxes........................................................30
1.16 Capital Adequacy; Increased Costs; Illegality................31
1.17 Single Loan..................................................33
2. CONDITIONS PRECEDENT..................................................33
2.1 Conditions to the Initial Loans..............................33
2.2 Further Conditions to Each Loan..............................34
3. REPRESENTATIONS AND WARRANTIES........................................35
3.1 Corporate Existence; Compliance with Law.....................35
3.2 Executive Offices, Collateral Locations, FEIN................36
3.3 Corporate Power, Authorization, Enforceable Obligations......36
3.4 Financial Statements and Projections.........................36
3.5 Material Adverse Effect......................................37
3.6 Ownership of Property; Liens.................................37
3.7 Labor Matters................................................38
3.8 Ventures, Subsidiaries and Affiliates; Outstanding Stock
and Indebtedness.............................................39
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TABLE OF CONTENTS
(continued)
Page
3.9 Government Regulation........................................39
3.10 Margin Regulations...........................................39
3.11 Taxes........................................................39
3.12 ERISA, Canadian Pension and Benefit Plans....................40
3.13 No Litigation................................................41
3.14 Brokers......................................................42
3.15 Intellectual Property........................................42
3.16 Full Disclosure..............................................42
3.17 Environmental Matters........................................42
3.18 Insurance....................................................43
3.19 Deposit and Disbursement Accounts............................43
3.20 Government Contracts.........................................43
3.21 Customer and Trade Relations.................................43
3.22 Agreements and Other Documents...............................43
3.23 Solvency.....................................................44
3.24 Status of Holdings...........................................44
3.25 Subordinated Debt............................................44
3.26 Senior Debt..................................................44
4. FINANCIAL STATEMENTS AND INFORMATION..................................44
4.1 Reports and Notices..........................................44
4.2 Communication with Accountants...............................45
5. AFFIRMATIVE COVENANTS.................................................45
5.1 Maintenance of Existence and Conduct of Business.............45
5.2 Payment of Charges...........................................45
5.3 Books and Records............................................46
5.4 Insurance; Damage to or Destruction of Collateral............46
5.5 Compliance with Laws.........................................48
5.6 Supplemental Disclosure......................................49
5.7 Intellectual Property........................................49
5.8 Environmental Matters........................................49
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TABLE OF CONTENTS
(continued)
Page
5.9 Landlords' Agreements, Mortgagee Agreements, Bailee Letters
and Real Estate Purchases....................................50
5.10 Further Assurances...........................................51
5.11 Canadian Pension and Benefit Plans...........................51
5.12 Minimum Excess Availability..................................52
5.13 New Subsidiaries.............................................52
6. NEGATIVE COVENANTS....................................................53
6.1 Mergers, Subsidiaries, Etc...................................53
6.2 Investments; Loans and Advances..............................56
6.3 Indebtedness.................................................58
6.4 Employee Loans and Affiliate Transactions....................60
6.5 Capital Structure and Business...............................61
6.6 Guaranteed Indebtedness......................................61
6.7 Liens........................................................61
6.8 Sale of Stock and Assets.....................................62
6.9 ERISA........................................................63
6.10 Financial Covenants..........................................63
6.11 Hazardous Materials..........................................63
6.12 Sale-Leasebacks..............................................63
6.13 Cancellation of Indebtedness.................................63
6.14 Restricted Payments..........................................63
6.15 Change of Corporate Name or Location; Change of Fiscal Year..63
6.16 No Impairment of Intercompany Transfers......................64
6.17 No Speculative Transactions..................................64
6.18 Changes Relating to Subordinated Debt; Material Contracts....64
7. TERM..................................................................65
7.1 Termination..................................................65
7.2 Survival of Obligations Upon Termination of Financing
Arrangements.................................................65
8. EVENTS OF DEFAULT; RIGHTS AND REMEDIES................................65
8.1 Events of Default............................................65
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TABLE OF CONTENTS
(continued)
Page
8.2 Remedies.....................................................67
8.3 Waivers by Credit Parties....................................69
9. ASSIGNMENT AND PARTICIPATIONS; APPOINTMENT OF AGENT AND CANADIAN
AGENT.................................................................69
9.1 Assignment and Participations................................69
9.2 Appointment of Agent.........................................72
9.3 Agent's and Canadian Agent's Reliance, Etc...................73
9.4 GE Capital, GE Capital Canada and Affiliates.................74
9.5 Lender Credit Decision.......................................74
9.6 Indemnification..............................................75
9.7 Successor Agent..............................................75
9.8 Setoff and Sharing of Payments...............................76
9.9 Advances; Payments; Non-Funding Lenders; Information;
Actions in Concert...........................................77
9.10 Collateral Matters...........................................81
10. SUCCESSORS AND ASSIGNS................................................82
10.1 Successors and Assigns.......................................82
11. MISCELLANEOUS.........................................................82
11.1 Complete Agreement; Modification of Agreement................82
11.2 Amendments and Waivers.......................................83
11.3 Fees and Expenses............................................85
11.4 No Waiver....................................................86
11.5 Remedies.....................................................87
11.6 Severability.................................................87
11.7 Conflict of Terms............................................87
11.8 Confidentiality..............................................87
11.9 GOVERNING LAW................................................88
11.10 Notices......................................................89
11.11 Section Titles...............................................89
11.12 Counterparts.................................................89
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TABLE OF CONTENTS
(continued)
Page
11.13 WAIVER OF JURY TRIAL.........................................89
11.14 Press Releases and Related Matters...........................89
11.15 Reinstatement................................................90
11.16 Advice of Counsel............................................90
11.17 No Strict Construction.......................................90
11.18 Currency Equivalent Generally................................90
11.19 Judgment Currency............................................90
11.20 Joint and Several Obligations................................91
12. CROSS-GUARANTY........................................................91
12.1 Cross-Guaranty...............................................91
12.2 Waivers by Borrowers.........................................92
12.3 Benefit of Guaranty..........................................92
12.4 Subordination of Subrogation, Etc............................92
12.5 Election of Remedies.........................................93
12.6 Limitation...................................................93
12.7 Contribution with Respect to Guaranty Obligations............94
12.8 Liability Cumulative.........................................94
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INDEX OF APPENDICES
Annex A (Recitals) - Definitions
Annex B (Section 1.2) - Letters of Credit
Annex C (Section 1.8) - Cash Management System
Annex D (Section 2.1(a)) - Closing Checklist
Annex E (Section 4.1(a)) - Financial Statements and Projections --
Reporting
Annex F (Section 4.1(b)) - Collateral Reports
Annex G (Section 6.10) - Financial Covenants
Annex H (Section 9.9(a)) - Lenders' Wire Transfer Information
Annex I (Section 11.10) - Notice Addresses
Annex J (from Annex A -
Commitments definition) Commitments as of Closing Date
Exhibit 1.1(a)(i)(1) - Form of Notice of US Revolving Credit Advance
Exhibit 1.1(a)(i)(2) - Form of US Revolving Note
Exhibit 1.1(a)(ii)(1) - Form of Canadian Revolving Credit Advance
Exhibit 1.1(a)(ii)(2)(x) - Form of Canadian Revolving Note - US Dollars
Exhibit 1.1(a)(ii)(2)(y) - Form of Canadian Revolving Note -
Canadian Dollars
Exhibit 1.1(b)(i) - Form of Canadian Term Note
Exhibit 1.1(b)(ii) - Form of Term Loan A
Exhibit 1.1(b)(iii)-1 - Form of Term B Note
Exhibit 1.1(b)(iii)-2 - Form of Notice of Term Loan B Advance
Exhibit 1.1(c)(ii) - Form of Swing Line Note
Exhibit 1.5(e)(i) - Form of Notice of Conversion/Continuation-LIBOR
Exhibit 1.5(e)(ii) - Form of Notice of Conversion/Continuation-BA
Rate
Exhibit 4.1(b) - Form of Borrowing Base Certificate
Exhibit 5.13 - Form of Credit Agreement Joinder Agreement
Exhibit 9.1(a) - Form of Assignment Agreement
Exhibit B-1 - Application for Standby Letter of Credit
Exhibit B-2 - Application for Documentary Letter of Credit
Schedule 1.1 - Agent's Representatives
Schedule A-1 - Shared Mortgages
Disclosure Schedule 1.4 - Sources and Uses; Funds Flow Memorandum
Disclosure Schedule 3.1 - Type of Entity; State of Organization
Disclosure Schedule 3.2 - Executive Offices, Collateral Locations, FEIN,
Organizational Identification Number
Disclosure Schedule 3.4(A) - Financial Statements
Disclosure Schedule 3.4(B) - Pro Forma
Disclosure Schedule 3.4(C) - Projections
Disclosure Schedule 3.4(D) - Fair Salable Balance Sheet
Disclosure Schedule 3.6 - Real Estate and Leases
Disclosure Schedule 3.7 - Labor Matters
Disclosure Schedule 3.8 - Ventures, Subsidiaries and Affiliates;
Outstanding Stock
Disclosure Schedule 3.11 - Tax Matters
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Disclosure Schedule 3.12 - ERISA Plans; Canadian Pension Plans; Canadian
Benefit Plans
Disclosure Schedule 3.13 - Litigation
Disclosure Schedule 3.15 - Intellectual Property
Disclosure Schedule 3.17 - Hazardous Materials
Disclosure Schedule 3.18 - Insurance
Disclosure Schedule 3.19 - Deposit and Disbursement Accounts
Disclosure Schedule 3.20 - Government Contracts
Disclosure Schedule 3.21 - Customer and Trade Relations
Disclosure Schedule 3.22 - Material Agreements
Disclosure Schedule 5.1 - Trade Names
Disclosure Schedule 6.3 - Indebtedness
Disclosure Schedule 6.4(a) - Transactions with Affiliates
Disclosure Schedule 6.7 - Existing Liens
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EXECUTION COPY
This CREDIT AGREEMENT (this "Agreement"), dated as of May 15, 2003
among XXXXXX, INC., a Delaware corporation ("Xxxxxx, Inc."), XXXXX INDUSTRIES,
INC., a Kansas corporation ("Xxxxx"), FABTEK CORPORATION, a Michigan
corporation ("Fabtek"), XXXXXXXXX MANUFACTURING CORPORATION, a Delaware
corporation ("Xxxxxxxxx Manufacturing"), GEAR PRODUCTS, INC., an Oklahoma
corporation ("Gear"), OMARK PROPERTIES, INC., an Oregon corporation ("Omark"),
WINDSOR FORESTRY TOOLS LLC, a Tennessee limited liability company ("Windsor")
(Xxxxx, Fabtek, Xxxxxxxxx Manufacturing, Gear, Windsor and Xxxxxx, Inc. are
sometimes collectively referred to herein as "US Borrowers" and individually
as "US Borrower");XXXXXX CANADA LTD., a Canadian corporation ("Canadian
Borrower", and Canadian Borrower and US Borrowers are sometimes collectively
referred to herein as "Borrowers" and individually as "Borrower"); the other
Credit Parties signatory hereto; GENERAL ELECTRIC CAPITAL CORPORATION, a
Delaware corporation (in its individual capacity, "GE Capital"), for itself,
as US Lender, Collateral Agent for all "Secured Parties" under and as defined
in the Collateral Agency Agreement, as Agent for US Lenders with respect to
Loans and other credit made available to US Borrowers and as Agent for all
Lenders with respect to all US Collateral that is Non-Shared Collateral, the
other US Lenders party hereto from time to time, GENERAL ELECTRIC CAPITAL
CANADA INC., a Canadian corporation ("GE Capital Canada"), for itself and as
Canadian Agent for Canadian Lenders, and the other Canadian Lenders party
hereto from time to time.
RECITALS
WHEREAS, US Borrowers have requested that US Lenders extend
revolving and term credit facilities to US Borrowers of up to One Hundred
Eighty-One Million US Dollars ($181,000,000) in the aggregate for the purpose
of refinancing certain indebtedness of US Borrowers and to provide (a) working
capital financing for US Borrowers, (b) funds for other general corporate
purposes of US Borrowers and (c) funds for other purposes permitted hereunder;
and for these purposes, US Lenders are willing to make certain loans and other
extensions of credit to US Borrowers of up to such amount upon the terms and
conditions set forth herein; and
WHEREAS, Canadian Borrower has requested that Canadian Lenders
extend revolving and term credit facilities to Canadian Borrower of up to the
US Dollar Amount of Nine Million US Dollars ($9,000,000) in the aggregate to
provide (a) working capital financing for Canadian Borrower, (b) funds for
other general corporate purposes of Canadian Borrower and (c) funds for other
purposes permitted hereunder; and for these purposes, Canadian Lenders are
willing to make certain loans and other extensions of credit to Canadian
Borrower of up to such amount upon the terms and conditions set forth herein;
and
WHEREAS, US Borrowers have agreed to secure all of their obligations
and the obligations of Canadian Borrower under the Loan Documents by granting
to (a) Collateral Agent, for the benefit of the "Secured Parties" under and as
defined in the Collateral Agency Agreement, a security interest in and lien
upon all of the Shared Collateral and (b) Agent, for the benefit of itself,
Canadian Agent and Lenders, a security interest in and lien upon all of the US
Collateral that is Non-Shared Collateral; and
WHEREAS, Canadian Borrower has agreed to secure all of its
obligations under the Loan Documents by granting to Canadian Agent, for the
benefit of itself and Canadian Lenders, a security interest in and lien upon
the Canadian Collateral; and
WHEREAS, Xxxxxx International, Inc., a Delaware corporation
("Holdings") is willing to guarantee all of the obligations of Borrowers to
Agent, Canadian Agent and Lenders under the Loan Documents and to pledge to
the Collateral Agent, for the benefit of the "Secured Parties" under and as
defined in the Collateral Agency Agreement, all of the Stock of Xxxxxx, Inc.
to secure such guaranty and, to the extent and in the manner set forth in the
Collateral Agency Agreement and the Existing Senior Notes; and
WHEREAS, capitalized terms used in this Agreement shall have the
meanings ascribed to them in Annex A and, for purposes of this Agreement and
the other Loan Documents, the rules of construction set forth in Annex A shall
govern. All Annexes, Disclosure Schedules, Exhibits and other attachments
(collectively, "Appendices") hereto, or expressly identified in this
Agreement, are incorporated herein by reference, and taken together with this
Agreement, shall constitute a single agreement. These Recitals shall be
construed as part of the Agreement.
NOW, THEREFORE, in consideration of the premises and the mutual
covenants hereinafter contained, and for other good and valuable
consideration, the parties hereto agree as follows:
1. AMOUNT AND TERMS OF CREDIT
1.1 Credit Facilities.
(a) Revolving Credit Facilities.
(i) US Revolving Credit Facility.
(1) Subject to the terms and conditions hereof, each A
Loan Lender agrees to make available to US Borrowers from time to time until
the Commitment Termination Date its US Pro Rata Share of advances under the US
Revolving Loan Commitment (each, a "US Revolving Credit Advance"). The US Pro
Rata Share of the US Revolving Loan of any A Loan Lender shall not at any time
exceed its separate US Revolving Loan Commitment. The obligations of each A
Loan Lender hereunder shall be several and not joint. Until the Commitment
Termination Date, US Borrowers may borrow, repay and reborrow under this
Section 1.1(a)(i)(1); provided that the amount of any US Revolving Credit
Advance to be made at any time shall not exceed US Borrowing Availability at
such time. US Borrowing Availability may be reduced by Reserves imposed by
Agent in its reasonable credit judgment. Moreover, except as set forth in
Section 1.1(a)(i)(3) below, the sum of the US Revolving Loan and Swing Line
Loan outstanding to US Borrowers shall not exceed at any time US Borrowers' US
Borrowing Base. Each US Revolving Credit Advance shall be made on notice by
Borrower Representative on behalf of the applicable US Borrower to one of the
representatives of Agent identified in Schedule 1.1 at the address specified
therein. Any such notice must be given no later than (1) 1:00 p.m.(New York
time) on the Business Day of the proposed US Revolving Credit Advance, in the
case of a US Index Rate Loan, or (2) 1:00 p.m.(New York time) on the date
which is 3 Business Days prior to the proposed US Revolving Credit Advance, in
the case
2
of a LIBOR Loan. Each such notice (a "Notice of US Revolving Credit Advance")
must be given in writing (by telecopy or overnight courier) substantially in
the form of Exhibit 1.1(a)(i)(1), and shall include the information required
in such Exhibit and such other information as may be reasonably required by
Agent. If any US Borrower desires to have the US Revolving Credit Advances
bear interest by reference to a LIBOR Rate, Borrower Representative must
comply with Section 1.5(e)(i).
(2) Upon request by any A Loan Lender, each US Borrower
shall execute and deliver to such A Loan Lender a note to evidence the US
Revolving Loan Commitment of that A Loan Lender. Each note shall be in the
principal amount of the US Revolving Loan Commitment of the applicable A Loan
Lender, dated the Closing Date and substantially in the form of Exhibit
1.1(a)(i)(2) (each a "US Revolving Note" and, collectively, the "US Revolving
Notes"). Each US Revolving Note (or, if a Revolving Loan Note is not
requested, this Agreement) shall represent the joint and several obligation of
US Borrowers to pay the amount of the applicable A Loan Lender's US Revolving
Loan Commitment or, if less, such A Loan Lender's US Pro Rata Share of the
aggregate unpaid principal amount of all US Revolving Credit Advances to US
Borrowers, together with interest thereon as prescribed in Section 1.5. The
entire unpaid balance of the aggregate US Revolving Loan and all other
non-contingent Obligations shall be immediately due and payable in full in
immediately available funds on the Commitment Termination Date.
(3) Anything in this Agreement to the contrary
notwithstanding, at the request of Borrower Representative, in its discretion
Agent may (but shall have absolutely no obligation to) make US Revolving
Credit Advances to US Borrowers on behalf of A Loan Lenders in amounts that
cause the outstanding balance of the aggregate US Revolving Loan to exceed the
US Borrowing Base (less the Swing Line Loan) (any such excess US Revolving
Credit Advances are herein referred to collectively as "Overadvances");
provided, that (A) no such event or occurrence shall cause or constitute a
waiver of Agent's, Swing Line Lender's or A Loan Lenders' right to refuse to
make any further Overadvances, Swing Line Advances or US Revolving Credit
Advances, or incur any Letter of Credit Obligations, as the case may be, at
any time that an Overadvance exists, and (B) no Overadvance shall result in a
Default or Event of Default based on US Borrowers' failure to comply with
Section 1.3(b)(i) for so long as Agent permits such Overadvance to be
outstanding, but solely with respect to the amount of such Overadvance. In
addition, Overadvances may be made even if the conditions to lending set forth
in Section 2 have not been met. All Overadvances shall constitute US Index
Rate Loans, shall bear interest at the Default Rate and shall be payable by US
Borrowers on demand by Agent (and Agent shall demand such payment upon receipt
by Agent of written instructions from Requisite Revolving Lenders). Except as
otherwise provided in Section 1.11(b), the authority of Agent to make
Overadvances is limited to an aggregate amount not to exceed $5,000,000 at any
time, shall not cause the aggregate US Revolving Loan to exceed the Maximum
Amount, and such authority may be revoked prospectively by a written notice to
Agent signed by Requisite Revolving Lenders.
(ii) Canadian Revolving Credit Facility.
(1) Subject to the terms and conditions hereof, each
Canadian Lender agrees to make available to Canadian Borrower from time to
time until the Commitment
3
Termination Date its Canadian Pro Rata Share of Canadian Dollar advances and
US Dollar advances under the Canadian Revolving Loan Commitment (each, a
"Canadian Revolving Credit Advance"). The Canadian Pro Rata Share of the US
Dollar Amount of the Canadian Revolving Loan of any Canadian Lender shall not
at any time exceed its separate Canadian Revolving Loan Commitment. The
obligations of each Canadian Lender hereunder shall be several and not joint.
The US Dollar Amount of any Canadian Revolving Credit Advance to be made at
any time shall not exceed Canadian Borrowing Availability at such time. Until
the Commitment Termination Date, Canadian Borrower may borrow, repay and
reborrow under this Section 1.1(a)(ii). Canadian Borrowing Availability may be
reduced by Canadian Reserves imposed by Agent in its reasonable credit
judgment. Each Canadian Revolving Credit Advance shall be made on notice by
Borrower Representative on behalf of Canadian Borrower to one of the
representatives of Agent and Canadian Agent identified in Schedule 1.1 at the
applicable addresses specified therein. Any such notice must be given no later
than (1) 1:00 p.m.(New York time) on the Business Day of the proposed Canadian
Revolving Credit Advance, in the case of a Canadian Index Rate Loan or a US
Index Rate Loan, (2) 1:00 p.m.(New York time) on the date which is 3 Business
Days prior to the proposed Canadian Revolving Credit Advance, in the case of a
LIBOR Loan, or (iii) 1:00 p.m.(New York time) on the date which is 2 Business
Days prior to the proposed Canadian Revolving Credit Advance, in the case of a
BA Rate Loan. Each such notice (a "Notice of Canadian Revolving Credit
Advance") must be given in writing (by telecopy or overnight courier)
substantially in the form of Exhibit 1.1(a)(ii)(1), and shall include the
information required in such Exhibit and such other information as may be
reasonably required by Agent or Canadian Agent. If Canadian Borrower desires
to have a Canadian Revolving Credit Advance in US Dollars bear interest by
reference to a LIBOR Rate or a Canadian Revolving Credit Advance denominated
in Canadian Dollars bear interest by reference to the BA Rate, Borrower
Representative must comply with Section 1.5(e)(i) or (ii), as applicable.
(2) Upon request by any Canadian Lender, Canadian Borrower
shall execute and deliver to such Canadian Lender a US Dollar note and a
Canadian Dollar note to evidence the Canadian Revolving Loan Commitment of
that Canadian Lender. Each such note shall be in the principal amount of the
Canadian Revolving Loan Commitment of the applicable Canadian Lender, dated
the Closing Date and substantially in the form of (x) Exhibit 1.1(a)(ii)(2)(x)
in the case of Canadian Revolving Loans denominated in US Dollars and (y)
Exhibit 1.1(a)(ii)(2)(y) in the case of Canadian Revolving Loans denominated
in Canadian Dollars (each a "Canadian Revolving Note" and, collectively, the
"Canadian Revolving Notes"). Each Canadian Revolving Note (or, if a Canadian
Revolving Note is not requested, this Agreement) shall represent the
obligation of Canadian Borrower to pay the amount of the applicable Canadian
Lender's Canadian Revolving Loan Commitment or, if less, such Canadian
Lender's Canadian Pro Rata Share of the aggregate unpaid principal amount of
all Canadian Revolving Credit Advances to Canadian Borrower together with
interest thereon as prescribed in Section 1.5. The entire unpaid balance of
the aggregate Canadian Revolving Loan and all other non-contingent Canadian
Obligations shall be immediately due and payable in full in immediately
available funds on the Commitment Termination Date.
(b) Term Loans .
(i) Canadian Term Loan.
4
(1) Subject to the terms and conditions hereof, each
Canadian Lender agrees to make a term loan denominated in US Dollars
(collectively, the "Canadian Term Loan") on the Closing Date to Canadian
Borrower in the amount of the applicable Canadian Lender's Canadian Term Loan
Commitment. The obligations of each Canadian Lender hereunder shall be several
and not joint. Upon request by any Canadian Lender, Canadian Borrower shall
execute and deliver to such Canadian Lender a promissory note substantially in
the form of Exhibit 1.1(b)(i) (each a "Canadian Term Note" and collectively
the "Canadian Term Notes"). Each such Canadian Term Note (or, if a Canadian
Term Note is not requested, this Agreement) shall represent the obligation of
Canadian Borrower to pay the applicable Canadian Lender's Canadian Term Loan
Commitment, together with interest thereon as prescribed in Section 1.5.
(2) Canadian Borrower shall repay the Canadian Term Loan
in twenty (20) consecutive quarterly installments on the first day of January,
April, July and October of each year, commencing July 1, 2003, as follows:
Payment Dates Installment Amounts
----------------------------------------------------
July 1, 2003, $197,368.42
October 1, 2003,
January 1, 2004
and April 1, 2004
----------------------------------------------------
July 1, 2004, $325,657.89
October 1, 2004,
January 1, 2005,
April 1, 2005,
July 1, 2005,
October 1, 2005,
January 1, 2006,
April 1, 2006,
July 1, 2006,
October 1, 2006,
January 1, 2007,
April 1, 2007,
July 1, 2007,
October 1, 2007,
January 1, 2008
and May 14, 2008
----------------------------------------------------
The final installment due on May 14, 2008 shall be in the
amount of $325,567.89 or, if different, the remaining principal balance of the
Canadian Term Loan.
(3) Notwithstanding Section 1.1(b)(i)(2), the aggregate
outstanding principal balance of the Canadian Term Loan shall be due and
payable in full in
5
immediately available funds on the Commitment Termination Date, if not sooner
paid in full. No payment with respect to the Canadian Term Loan may be
reborrowed.
(4) Each payment of principal with respect to the Canadian
Term Loan shall be paid to Canadian Agent for the ratable benefit of each
Canadian Lender making a Canadian Term Loan, ratably in proportion to each
such Canadian Lender's respective Canadian Term Loan Commitment.
(ii) Term Loan A.
(1) Subject to the terms and conditions hereof, each A
Loan Lender agrees to make a term loan (collectively, the "Term Loan A") on
the Closing Date to US Borrowers in the amount of the applicable A Loan
Lender's Term Loan A Commitment. The obligations of each A Loan Lender
hereunder shall be several and not joint. Upon request by any A Loan Lender,
each US Borrower shall execute and deliver to such A Loan Lender a promissory
note substantially in the form of Exhibit 1.1(b)(ii) (each a "Term A Note" and
collectively the "Term A Notes"). Each Term A Note (or, if a Term A Note is
not requested, this Agreement) shall represent the joint and several
obligation of US Borrowers to pay the applicable A Loan Lender's Term Loan A
Commitment, together with interest thereon as prescribed in Section 1.5.
(2) US Borrowers shall repay the Term Loan A in twenty
(20) consecutive quarterly installments on the first day of January, April,
July and October of each year, commencing July 1, 2003, as follows:
Payment Dates Installment Amounts
----------------------------------------------------
July 1, 2003, $1,052,631.58
October 1, 2003,
January 1, 2004
and April 1, 2004
----------------------------------------------------
July 1, 2004, $1,736,842.11
October 1, 2004,
January 1, 2005,
April 1, 2005,
July 1, 2005,
October 1, 2005,
January 1, 2006,
April 1, 2006,
July 1, 2006,
October 1, 2006,
January 1, 2007,
April 1, 2007,
July 1, 2007,
October 1, 2007,
6
January 1, 2008
and May 14, 2008
----------------------------------------------------
The final installment due on May 14, 2008 shall be in the
amount of $1,736,842.11 or, if different, the remaining principal balance of
the Term Loan A.
(3) Notwithstanding Section 1.1(b)(ii)(2), the aggregate
outstanding principal balance of the Term Loan A shall be due and payable in
full in immediately available funds on the Commitment Termination Date, if not
sooner paid in full. No payment with respect to the Term Loan A may be
reborrowed.
(4) Each payment of principal with respect to the Term
Loan A shall be paid to Agent for the ratable benefit of each A Loan Lender
making a Term Loan A, ratably in proportion to each such A Loan Lender's
respective Term Loan A Commitment.
(iii) Term Loan B.
(1) Subject to the terms and conditions hereof, each B
Loan Lender agrees to make term loans (collectively, the "Term Loan B") from
time to time during the Term Loan B Advance Period to US Borrowers in the
aggregate amount not to exceed the applicable B Loan Lender's Term Loan B
Commitment; provided, however, that a minimum amount of $80,000,000 of the
Term Loan B Commitment shall be funded on the Closing Date; provided further,
however, that each Advance under the Term Loan B Commitment shall be made in a
minimum amount of $1,000,000 and integral multiples of $100,000 in excess
thereof. The obligations of each B Loan Lender hereunder shall be several and
not joint. Upon request by any B Loan Lender, each US Borrower shall deliver
to such B Loan Lender a promissory note substantially in the form of Exhibit
1.1(b)(iii)-1 (each a "Term B Note" and collectively the "Term B Notes"). Each
Term B Note (or, if a Term B Note is not requested, this Agreement) shall
represent the joint and several obligation of US Borrowers to pay the
applicable B Loan Lender's Term Loan B Commitment or, if less, the aggregate
unpaid principal amount of the Term Loan B made to US Borrowers, together with
interest thereon as prescribed in Section 1.5. Each Advance under the Term
Loan B Commitment shall be made on notice by Borrower Representative on behalf
of the applicable US Borrower to one of the representatives of Agent
identified in Schedule 1.1 at the address specified therein. Any such notice
must be given no later than (1) 1:00 p.m.(New York time) on the Business Day
of the proposed Advance, in the case of a US Index Rate Loan, or (2) 1:00
p.m.(New York time) on the date which is 3 Business Days prior to the proposed
Advance, in the case of a LIBOR Loan. Each such notice (a "Notice of Term Loan
B Advance") must be given in writing (by telecopy or overnight courier)
substantially in the form of Exhibit 1.1(b)(iii)-2, and shall include the
information required in such Exhibit and such other information as may be
required by Agent. If any US Borrower desires to have the Advance bear
interest by reference to a LIBOR Rate, Borrower Representative must comply
with Section 1.5(e)(i).
(2) US Borrowers shall repay the Term Loan B in twelve
(12) consecutive quarterly installments on the first day of January, April,
July and October of each year, commencing July 1, 2005, as follows:
7
Payment Dates Installment Amounts
----------------------------------------------------
July 1, 2005, $1,250,000
October 1, 2005,
January 1, 2006
and April 1, 2006
----------------------------------------------------
July 1, 2006, $1,875,000
October 1, 2006,
January 1, 2007,
April 1, 2007,
July 1, 2007,
October 1, 2007,
and January 1, 2008
----------------------------------------------------
May 14, 2008 $66,875,000
----------------------------------------------------
The final installment due on May 14, 2008 shall be in the
amount of $66,875,000 or, if different, the remaining principal balance of the
Term Loan B. Notwithstanding anything contained in this Section 1.1(b)(iii)(2)
to the contrary, quarterly installments in respect of the Term Loan B shall be
reduced on a pro rata basis by the amount, if any, that the aggregate Advances
under the Term Loan B Commitment are less than $80,000,000.
(3) Notwithstanding Section 1.1(b)(iii)(2), the aggregate
outstanding principal balance of the Term Loan B shall be due and payable in
full in immediately available funds on the Commitment Termination Date, if not
sooner paid in full. No payment with respect to the Term Loan B may be
reborrowed. There shall be no increase in the aggregate principal amount of
the Term Loan B outstanding at any time after the termination of the Term Loan
B Advance Period.
(4) Each payment of principal with respect to the Term
Loan B shall be paid to Agent for the ratable benefit of each B Loan Lender
making a Term Loan B, ratably in proportion to each such B Loan Lender's
respective Term Loan B Commitment.
(c) Swing Line Facility.
(i) Agent shall notify the Swing Line Lender upon Agent's
receipt of any Notice of US Revolving Credit Advance. Subject to the terms and
conditions hereof, the Swing Line Lender may, in its discretion, make
available from time to time until the Commitment Termination Date advances
(each, a "Swing Line Advance") in accordance with any such notice. The
provisions of this Section 1.1(c) shall not relieve A Loan Lenders of their
obligations to make US Revolving Credit Advances under Section 1.1(a)(i);
provided that if the Swing Line Lender makes a Swing Line Advance pursuant to
any such notice, such Swing Line
8
Advance shall be in lieu of any US Revolving Credit Advance that otherwise may
be made by A Loan Lenders pursuant to such notice. The aggregate amount of
Swing Line Advances outstanding shall not exceed at any time the lesser of (A)
the Swing Line Commitment and (B) the lesser of the Maximum Amount and (except
for Overadvances) the US Borrowing Base, in each case under clauses (A) and
(B) of this sentence, less the outstanding balance of the US Revolving Loan at
such time ("Swing Line Availability"). Until the Commitment Termination Date,
US Borrowers may from time to time borrow, repay and reborrow under this
Section 1.1(c). Each Swing Line Advance shall be made pursuant to a Notice of
US Revolving Credit Advance delivered to Agent by Borrower Representative on
behalf of the applicable US Borrower in accordance with Section 1.1(a)(i). Any
such notice must be given no later than 1:00 p.m.(New York time) on the
Business Day of the proposed Swing Line Advance. Unless the Swing Line Lender
has received at least one Business Day's prior written notice from Requisite
Revolving Lenders instructing it not to make a Swing Line Advance, the Swing
Line Lender shall, notwithstanding the failure of any condition precedent set
forth in Sections 2.2, be entitled to fund that Swing Line Advance, and to
have each A Loan Lender make US Revolving Credit Advances in accordance with
Section 1.1(c)(iii) or purchase participating interests in accordance with
Section 1.1(c)(iv). Notwithstanding any other provision of this Agreement or
the other Loan Documents, the Swing Line Loan shall constitute a US Index Rate
Loan. US Borrowers shall repay the aggregate outstanding principal amount of
the Swing Line Loan upon demand therefor by Agent.
(ii) Upon request by the Swing Line Lender, US Borrowers shall
execute and deliver to the Swing Line Lender a promissory note to evidence the
Swing Line Commitment. Such note shall be in the principal amount of the Swing
Line Commitment of the Swing Line Lender, dated the Closing Date and
substantially in the form of Exhibit 1.1(c)(ii) (the "Swing Line Note"). The
Swing Line Note (or, if the Swing Line Note is not requested, this Agreement)
shall represent the joint and several obligation of US Borrowers to pay the
amount of the Swing Line Commitment or, if less, the aggregate unpaid
principal amount of all Swing Line Advances made to US Borrowers, together
with interest thereon as prescribed in Section 1.5. The entire unpaid balance
of the Swing Line Loan and all other noncontingent Obligations shall be
immediately due and payable in full in immediately available funds on the
Commitment Termination Date if not sooner paid in full.
(iii) The Swing Line Lender, at any time and from time to time
in its sole and absolute discretion, but not less frequently than weekly,
shall on behalf of US Borrowers (and each US Borrower hereby irrevocably
authorizes the Swing Line Lender to so act on its behalf) request each A Loan
Lender (including the Swing Line Lender) to make a US Revolving Credit Advance
to US Borrowers (which shall be US Index Rate Loan) in an amount equal to that
A Loan Lender's US Pro Rata Share of the principal amount of US Borrowers'
Swing Line Loan (the "Refunded Swing Line Loan") outstanding on the date such
notice is given. Unless any of the events described in Sections 8.1(h) or
8.1(i) has occurred (in which event the procedures of Section 1.1(c)(iv) shall
apply) and regardless of whether the conditions precedent set forth in this
Agreement to the making of a US Revolving Credit Advance are then satisfied,
each A Loan Lender shall disburse directly to Agent, its US Pro Rata Share of
a US Revolving Credit Advance on behalf of the Swing Line Lender prior to 3:00
p.m. (New York time) in immediately available funds on the Business Day next
succeeding the date that notice is
9
given. The proceeds of those US Revolving Credit Advances shall be immediately
paid to the Swing Line Lender and applied to repay the Refunded Swing Line
Loan of US Borrowers.
(iv) If, prior to refunding a Swing Line Loan with a US
Revolving Credit Advance pursuant to Section 1.1(c)(iii), one of the events
described in Sections 8.1(h) or 8.1(i) has occurred, then, subject to the
provisions of Section 1.1(c)(v) below, each A Loan Lender shall, on the date
such US Revolving Credit Advance was to have been made for the benefit of the
US Borrowers, purchase from the Swing Line Lender an undivided participation
interest in the Swing Line Loan to US Borrowers in an amount equal to its US
Pro Rata Share of such Swing Line Loan. Upon request, each A Loan Lender shall
promptly transfer to the Swing Line Lender, in immediately available funds,
the amount of its participation interest.
(v) Each A Loan Lender's obligation to make US Revolving Credit
Advances in accordance with Section 1.1(c)(iii) and to purchase participation
interests in accordance with Section 1.1(c)(iv) shall be absolute and
unconditional and shall not be affected by any circumstance, including (A) any
setoff, counterclaim, recoupment, defense or other right that such A Loan
Lender may have against the Swing Line Lender, any US Borrower or any other
Person for any reason whatsoever; (B) the occurrence or continuance of any
Default or Event of Default; (C) any inability of any US Borrower to satisfy
the conditions precedent to borrowing set forth in this Agreement at any time
or (D) any other circumstance, happening or event whatsoever, whether or not
similar to any of the foregoing. If any A Loan Lender does not make available
to Agent or the Swing Line Lender, as applicable, the amount required pursuant
to Sections 1.1(c)(iii) or 1.1(c)(iv), as the case may be, the Swing Line
Lender shall be entitled to recover such amount on demand from such A Loan
Lender, together with interest thereon for each day from the date of
non-payment until such amount is paid in full at the Federal Funds Rate for
the first 2 Business Days and at the US Index Rate thereafter.
(d) Reliance on Notices; Appointment of Borrower Representative.
Agent and Canadian Agent shall be entitled to rely upon, and shall be fully
protected in relying upon, any Notice of US Revolving Credit Advance, Notice
of Canadian Revolving Credit Advance, Notice of Conversion/Continuation-LIBOR
Rate, Notice of Conversion/Continuation-BA Rate or similar notice believed by
Agent or Canadian Agent, as applicable, to be genuine. Agent and Canadian
Agent may assume that each Person executing and delivering any notice in
accordance herewith was duly authorized, unless the responsible individual
acting thereon for Agent or Canadian Agent, as applicable, has actual
knowledge to the contrary. Each Borrower hereby designates Xxxxxx, Inc. as its
representative and agent on its behalf for the purposes of issuing Notices of
US Revolving Credit Advances, Notices of Canadian Revolving Credit Advances,
Notices of Conversion/Continuation-LIBOR Rate and Notices of
Conversion/Continuation-BA Rate, giving instructions with respect to the
disbursement of the proceeds of the Loans, selecting interest rate options,
requesting Letters of Credit, giving and receiving all other notices and
consents hereunder or under any of the other Loan Documents and taking all
other actions (including in respect of compliance with covenants) on behalf of
any Borrower or Borrowers under the Loan Documents. Borrower Representative
hereby accepts such appointment. Agent, Canadian Agent, and each Lender may
regard any notice or other communication pursuant to any Loan Document from
Borrower Representative as a notice or communication from all Borrowers, and
may give any notice or communication required or permitted to be given to any
Borrower or Borrowers hereunder to Borrower Representative on behalf of such
Borrower or
10
Borrowers. Each Borrower agrees that each notice, election, representation and
warranty, covenant, agreement and undertaking made on its behalf by Borrower
Representative shall be deemed for all purposes to have been made by such
Borrower and shall be binding upon and enforceable against such Borrower to
the same extent as if the same had been made directly by such Borrower.
1.2 Letters of Credit. Subject to and in accordance with the terms
and conditions contained herein and in Annex B, Borrower Representative, on
behalf of the applicable US Borrower, shall have the right to request, and A
Loan Lenders agree to incur, or purchase participations in, Letter of Credit
Obligations in respect of each US Borrower.
1.3 Prepayments.
(a) Voluntary Prepayments; Reductions in Revolving Loan Commitments.
Borrowers may at any time on at least 5 days' prior written notice by Borrower
Representative to Agent and, in the case of prepayment of a Canadian Loan or
reduction of the Canadian Revolving Loan Commitment, Canadian Agent (i)
voluntarily prepay all or part of the Canadian Term Loan, Term Loan A or Term
Loan B and/or (ii) permanently reduce (but not terminate) the US Revolving
Loan Commitment or the Canadian Revolving Loan Commitment; provided that (A)
any such prepayments or reductions shall be in a minimum amount of $1,000,000
and integral multiples of $100,000 in excess of such amount, (B) the US
Revolving Loan Commitment shall not be reduced to an amount less than the
amount of the US Revolving Loan then outstanding, (C) the Canadian Revolving
Loan Commitment shall not be reduced to an amount less than the amount of the
Canadian Revolving Loan then outstanding, (D) after giving effect to such
reductions in the US Revolving Loan Commitment or the Canadian Revolving Loan
Commitment, Borrowers shall comply with Section 1.3(b)(i), and (E) the Term
Loan B may not be prepaid in whole or in part pursuant to this Section 1.3(a)
unless and until $19,000,000 of the total principal amount of the Term Loan A
and Canadian Term Loan has been repaid or prepaid and any such prepayment of
the Term Loan B must be made on a pro rata basis with the Term Loan A and the
Canadian Term Loan (based upon the principal amount outstanding under the Term
Loan A, the Canadian Term Loan and the Term Loan B as of the date of such
prepayment with amounts allocated to the Term Loan A and the Canadian Term
Loan to be applied to the Term Loan A and the Canadian Term Loan in such
manner as Borrowers elect). In addition, Borrowers may at any time on at least
5 days' prior written notice by Borrower Representative to Agent and, with
respect to the Canadian Revolving Loan Commitment, Canadian Agent terminate
the US Revolving Loan Commitment and the Canadian Revolving Loan Commitment;
provided that upon such termination, all Loans and other Obligations shall be
immediately due and payable in full and all Letter of Credit Obligations shall
be cash collateralized or otherwise satisfied in accordance with Annex B
hereto. Any voluntary prepayment of Loans and any reduction or termination of
the US Revolving Loan Commitment and the Canadian Revolving Loan Commitment
must be accompanied by payment of the Fee required by Section 1.9(c), if any,
plus the payment of any LIBOR Rate or BA Rate funding breakage costs in
accordance with Sections 1.13(b) and (c). Upon any such reduction or
termination of the US Revolving Loan Commitment and the Canadian Revolving
Loan Commitment, each applicable Borrower's right to request (I) US Revolving
Credit Advances, (II) Canadian Revolving Credit Advances, (III) that Letter of
Credit Obligations be incurred on its behalf, or (IV) Swing Line Advances,
shall simultaneously be permanently reduced or
11
terminated, as the case may be; provided that a permanent reduction of the US
Revolving Loan Commitment shall not require a corresponding pro rata reduction
in the L/C Sublimit unless the US Revolving Loan Commitment is reduced to an
amount below the L/C Sublimit. Each notice of partial prepayment shall
designate the Loans or other Obligations to which such prepayment is to be
applied; provided that any partial prepayments of any Term Loan made by or on
behalf of any Borrower shall be applied to prepay the scheduled installments
of the applicable Borrowers' Term Loan on a pro rata basis.
(b) Mandatory Prepayments.
(i) If at any time the aggregate outstanding balances of the US
Revolving Loan and the Swing Line Loan exceed the lesser of (A) the Maximum
Amount and (B) the US Borrowing Base, US Borrowers shall immediately repay the
aggregate outstanding US Revolving Credit Advances to the extent required to
eliminate such excess. If any such excess remains after repayment in full of
the aggregate outstanding US Revolving Credit Advances, US Borrowers shall
provide cash collateral for the Letter of Credit Obligations in the manner set
forth in Annex B to the extent required to eliminate such excess.
Notwithstanding the foregoing, any Overadvance made pursuant to Section
1.1(a)(i)(3) shall be repaid by US Borrowers only on demand by Agent (and
Agent shall demand such payment upon receipt by Agent of written instructions
from Requisite Revolving Lenders). If at any time the aggregate US Dollar
Amount of the outstanding balances of the Canadian Revolving Loan exceed the
lesser of (A) the Canadian Maximum Amount and (B) the Canadian Borrowing Base,
Canadian Borrower shall immediately repay the aggregate outstanding Canadian
Revolving Credit Advances to the extent required to eliminate such excess.
(ii) Immediately upon receipt by any Credit Party of proceeds
of any asset disposition or any sale of Stock of any Subsidiary of any Credit
Party or when funds escrowed in connection with the December 2001 sale of the
sporting equipment segment of Xxxxxx, Inc. are released to Xxxxxx, Inc.
(excluding Excluded Proceeds), if the Credit Party is a US Credit Party it
shall forward such proceeds to the US Borrowers and, if the Credit Party is a
Canadian Credit Party, it shall forward such proceeds to the Canadian Borrower
and Borrowers shall prepay the US Loans or Canadian Loans, as applicable, in
an amount equal to all such proceeds, net of (A) commissions and other
reasonable and customary transaction costs, fees and expenses (including
reasonable attorney's fees and investment banking fees) properly attributable
to such transaction and payable by Credit Parties in connection therewith (in
each case, paid to non-Affiliates), (B) transfer taxes, goods and services
taxes and sales taxes, as applicable, (C) amounts payable to holders of senior
Liens (to the extent such Liens constitute Permitted Encumbrances hereunder),
if any, (D) an appropriate reserve for income taxes in accordance with GAAP in
connection therewith and (E) cash amounts required to be maintained as a
reserve or in escrow against any such asset sale or sale of Stock in an amount
not to exceed 20% of the purchase price of such assets or Stock, until such
amounts are received by such Credit Party.
(iii) If Holdings issues Stock (other than Excluded Stock
Issuances), no later than the Business Day following the date of receipt of
the proceeds thereof, Holdings shall contribute such proceeds to Xxxxxx, Inc.
and Xxxxxx, Inc. shall prepay the Loans in an amount equal to all such
proceeds, net of underwriting discounts and commissions and other reasonable
costs (including reasonable
12
attorney's fees and investment banking fees) paid to non-Affiliates in
connection therewith.
(iv) Until the Termination Date, Xxxxxx, Inc. shall prepay the
Obligations on the date that is 10 days after the earlier of (A) the date on
which Holdings' and its Subsidiaries' annual audited Financial Statements for
the immediately preceding Fiscal Year are delivered pursuant to Annex E or (B)
the date on which such annual audited Financial Statements were required to be
delivered pursuant to Annex E, in an amount equal to fifty percent (50%) of
Excess Cash Flow for the immediately preceding Fiscal Year. Each such
prepayment shall be accompanied by a certificate signed by Borrower
Representative's chief financial officer certifying the manner in which Excess
Cash Flow and the resulting prepayment were calculated, which certificate
shall be in form and substance reasonably satisfactory to Agent.
(c) Status of Commitments after Mandatory Prepayments. None of the
US Revolving Loan Commitment, the Swing Line Commitment or the Canadian
Revolving Loan Commitment shall be permanently reduced by the amount of any
prepayments under Section 1.3(b).
(d) Status of Commitments after Prepayments from Insurance and
Condemnation Proceeds. None of the US Revolving Loan Commitment, the Swing
Line Commitment or the Canadian Revolving Loan Commitment shall be permanently
reduced by the amount of any prepayments made from insurance or condemnation
proceeds.
(e) No Implied Consent. Nothing in this Section 1.3 shall be
construed to constitute Agent's, Canadian Agent's or any Lender's consent to
any transaction that is not permitted by other provisions of this Agreement or
the other Loan Documents.
1.4 Use of Proceeds. Borrowers shall utilize the proceeds of the
Loans solely for the Refinancing (and to pay any related transaction
expenses), to the extent permitted in Section 6.3(b) of this Agreement, to
refinance a portion of the Existing Subordinated Notes or the Existing Senior
Notes, to fund Fees and expenses incurred in connection with the Loans and for
the financing of Borrowers' ordinary working capital and general corporate
needs. Disclosure Schedule (1.4) contains a description of Borrowers' sources
and uses of funds as of the Closing Date, including Loans and Letter of Credit
Obligations to be made or incurred on that date, and a funds flow memorandum
detailing how funds from each source are to be transferred to particular uses.
1.5 Interest and Applicable Margins.
(a) US Borrowers shall pay interest to Agent, for the ratable
benefit of US Lenders and Canadian Borrower shall pay interest to Canadian
Agent, for the ratable benefit of Canadian Lenders, in accordance with the
various Loans being made by each Lender, in arrears on each applicable
Interest Payment Date, at the following rates: (i) with respect to the US
Revolving Credit Advances and Canadian Revolving Credit Advances denominated
in US Dollars, the US Index Rate plus the Applicable Revolver US Index Margin
per annum or, at the election of Borrower Representative, the applicable LIBOR
Rate plus the Applicable Revolver
13
LIBOR Margin per annum, based on the aggregate US Revolving Credit Advances
and Canadian Revolving Credit Advances denominated in US Dollars outstanding
from time to time; (ii) with respect to the Swing Line Loan, the US Index Rate
plus the Applicable Revolver US Index Margin per annum, based on the aggregate
Swing Line Loans outstanding from time to time; (iii) with respect to the
Canadian Revolving Credit Advances denominated in Canadian Dollars, the
Canadian Index Rate plus the Applicable Canadian Index Margin per annum or, at
the election of Borrower Representative, the applicable BA Rate plus the
Applicable BA Rate Margin per annum, based on the aggregate Canadian Revolving
Credit Advances denominated in Canadian Dollars outstanding from time to time,
(iv) with respect to the Term Loan A and the Canadian Term Loan, the US Index
Rate plus the Applicable Term Loan A Index Margin per annum or, at the
election of Borrower Representative, the applicable LIBOR Rate plus the
Applicable Term Loan A LIBOR Margin per annum, based on the aggregate Term
Loan A and Canadian Term Loan outstanding from time to time; and (v) with
respect to the Term Loan B, the US Index Rate plus the Applicable Term Loan B
Index Margin per annum or, at the election of Borrower Representative, the
applicable LIBOR Rate plus the Applicable Term Loan B LIBOR Margin per annum,
based on the aggregate Term Loan B outstanding from time to time.
As of the Closing Date, the Applicable Margins are as follows:
Applicable Revolver US Index Margin 1.75%
Applicable Revolver LIBOR Margin 3.75%
Applicable Canadian Index Margin 1.75%
Applicable BA Rate Margin 3.75%
Applicable Term Loan A Index Margin 1.75%
Applicable Term Loan A LIBOR Margin 3.75%
Applicable Term Loan B Index Margin 3.25%
Applicable Term Loan B LIBOR Margin 5.25%
Applicable Unused Line Fee Margin 0.50%
The Applicable Revolver US Index Margin, the Applicable Revolver
LIBOR Margin, the Applicable Canadian Index Margin, the Applicable BA Rate
Margin, the Applicable Term Loan A Index Margin and the applicable Term Loan A
LIBOR Margin (collectively, the "Adjustable Applicable Margins") shall be
adjusted (up or down) prospectively on a quarterly basis as determined by
Holdings' consolidated financial performance for the immediately preceding
four quarters, commencing with the first day of the first calendar month that
occurs more than 5 days after delivery of Holdings' quarterly Financial
Statements to Lenders for the Fiscal Quarter ending December 31, 2003.
Adjustments in the Adjustable Applicable Margins shall be determined by
reference to the following grids:
14
IF LEVERAGE RATIO IS: LEVEL OF
APPLICABLE MARGINS
------------------------------------------ ------------------
less than 3.00 Level I
------------------------------------------ ------------------
less than 5.00, but
greater than or equal to 3.00 Level II
------------------------------------------ ------------------
greater than or equal to 5.00 Level III
------------------------------------------ ------------------
------------------------------------- ---------- ----------- ----------
LEVEL I LEVEL II LEVEL III
------------------------------------- ---------- ----------- ----------
Applicable Revolver US 1.00% 1.50% 1.75%
Index Margin
Applicable Revolver LIBOR Margin 3.00% 3.50% 3.75%
Applicable Canadian Index Margin 1.00% 1.50% 1.75%
Applicable BA Rate Margin 3.00% 3.50% 3.75%
Applicable Term Loan A Index Margin 1.00% 1.50% 1.75%
Applicable Term Loan A LIBOR Margin 3.00% 3.50% 3.75%
All adjustments in the Adjustable Applicable Margins after December
31, 2003 shall be implemented quarterly on a prospective basis, on the first
day of each calendar month commencing at least 5 days after the date of
delivery to Lenders of the quarterly unaudited or annual audited (as
applicable) Financial Statements evidencing the need for an adjustment.
Concurrently with the delivery of those Financial Statements, Borrower
Representative shall deliver to Agent, Canadian Agent and Lenders a
certificate, signed by its chief financial officer, setting forth in
reasonable detail the basis for the continuance of, or any change in, the
Adjustable Applicable Margins. Failure to deliver such Financial Statements
within fifteen (15) days of the date such Financial Statements are required to
be delivered shall, in addition to any other remedy provided for in this
Agreement, result in an increase in the Adjustable Applicable Margins to the
highest level set forth in the foregoing grid, until the first day of the
first calendar month following the delivery of those Financial Statements
demonstrating that such an increase is not required. If a Default or Event of
Default has occurred and is continuing at the time any reduction in the
Adjustable Applicable Margins is to be implemented, that reduction shall be
deferred until the first day of the first calendar month following the date on
which such Default or Event of Default is waived or cured.
(b) If any payment on any Loan becomes due and payable on a day
other than a Business Day, the maturity thereof will be extended to the next
succeeding Business Day (except as set forth in the definition of BA Period or
LIBOR Period) and, with respect to payments of principal, interest thereon
shall be payable at the then applicable rate during such extension.
(c) All computations of Fees calculated on a per annum basis and
interest shall be made by Agent or Canadian Agent, as applicable, on the basis
of a 360-day year, in each case for the actual number of days occurring in the
period for which such interest and Fees are payable. The US Index Rate and
Canadian Index Rate are floating rates determined for each
15
day. Each determination by Agent or Canadian Agent, as applicable, of an
interest rate and Fees hereunder shall be final, binding and conclusive on
Borrowers, absent manifest error.
(d) So long as an Event of Default has occurred and is continuing
under Section 8.1(a), (h) or (i) or so long as any other Event of Default with
respect to Section 5.12 or Annex C, E, F or G has occurred and is continuing
and at the election of Agent (or upon the written request of Requisite
Lenders) confirmed by written notice from Agent to Borrower Representative,
subject to applicable law, the interest rates applicable to the Loans and the
Letter of Credit Fees shall be increased by two percentage points (2%) per
annum above the rates of interest or the rate of such Fees otherwise
applicable hereunder ("Default Rate"), and all outstanding Obligations shall
bear interest at the Default Rate applicable to such Obligations. Interest and
Letter of Credit Fees at the Default Rate shall accrue from the initial date
of such Event of Default until that Event of Default is waived and shall be
payable upon demand.
(e) (i) Borrower Representative shall have the option to (A) request
that any US Revolving Credit Advance or any Canadian Revolving Credit Advance
denominated in US Dollars be made as a LIBOR Loan, (B) convert at any time all
or any part of outstanding Loans (other than the Swing Line Loan) denominated
in US Dollars from US Index Rate Loans to LIBOR Loans, (C) convert any LIBOR
Loan to a US Index Rate Loan, subject to payment of LIBOR breakage costs in
accordance with Section 1.13(b) if such conversion is made prior to the
expiration of the LIBOR Period applicable thereto, or (D) continue all or any
portion of any Loan (other than the Swing Line Loan) denominated in US Dollars
as a LIBOR Loan upon the expiration of the applicable LIBOR Period and the
succeeding LIBOR Period of that continued Loan shall commence on the first day
after the last day of the LIBOR Period of the Loan to be continued; provided,
however, that no Loan or group of Loans shall be made as, converted to, or
continued at the end of the LIBOR Period therefor as a LIBOR Loan if any
Default or Event of Default has occurred and is continuing. Any Loan or group
of Loans having the same proposed LIBOR Period to be made or continued as, or
converted into, a LIBOR Loan must be in a minimum amount of $5,000,000 and
integral multiples of $100,000 in excess of such amount. Any such election
must be made by 1:00 p.m.(New York time) on the 3rd Business Day prior to (1)
the date of any proposed Advance which is to bear interest at the LIBOR Rate,
(2) the end of each LIBOR Period with respect to any LIBOR Loans to be
continued as such, or (3) the date on which Borrower Representative wishes to
convert any US Index Rate Loan to a LIBOR Loan for a LIBOR Period designated
by Borrower Representative in such election. If no election is received with
respect to a LIBOR Loan by 1:00 p.m.(New York time) on the 3rd Business Day
prior to the end of the LIBOR Period with respect thereto (or if a Default or
an Event of Default has occurred and is continuing), that LIBOR Loan shall be
converted to a US Index Rate Loan at the end of its LIBOR Period. Borrower
Representative must make such election by notice to Agent and, in the case of
Canadian Loans denominated in US Dollars, Canadian Agent in writing, by
telecopy or overnight courier. In the case of any conversion or continuation,
such election must be made pursuant to a written notice (a "Notice of
Conversion/Continuation-LIBOR Rate") in the form of Exhibit 1.5(e)(i).
(ii) Borrower Representative shall have the option to (A) request
that any Canadian Revolving Credit Advance denominated in Canadian Dollars be
made as a BA Rate Loan, (B) convert at any time all or any part of the
outstanding Canadian Revolving Loan denominated in Canadian Dollars from
Canadian Index Rate Loans to BA Rate Loans, (C)
16
convert any BA Rate Loan to a Canadian Index Rate Loan, subject to payment of
BA Rate breakage costs in accordance with Section 1.13(c) if such conversion
is made prior to the expiration of the BA Rate Period applicable thereto, or
(D) continue all or any portion of any Canadian Revolving Loan denominated in
Canadian Dollars as a BA Rate Loan upon the expiration of the applicable BA
Rate Period and the succeeding BA Rate Period of that continued Loan shall
commence on the first day after the last day of the BA Rate Period of the Loan
to be continued; provided, however, that no Loan shall be made as, converted
to, or continued at the expiration of the BA Rate Period therefor as a BA Rate
Loan if any Default or Event of Default has occurred and is continuing. Any
Loan or group of Loans having the same proposed BA Rate Period to be made or
continued as, or converted into, a BA Rate Loan must be in a minimum amount of
Cdn. $250,000 and integral multiples of Cdn. $100,000 in excess of such
amount. Any such election must be made by 1:00 p.m.(New York time) on the 2nd
Business Day prior to (1) the date of any proposed Advance which is to bear
interest at the BA Rate, (2) the end of each BA Rate Period with respect to
any BA Rate Loans to be continued as such, or (3) the date on which Borrower
Representative wishes to convert any Canadian Index Rate Loan to a BA Rate
Loan for a BA Rate Period designated by Borrower Representative in such
election. If no election is received with respect to a BA Rate Loan by 1:00
p.m.(New York time) on the 2nd Business Day prior to the end of the BA Rate
Period with respect thereto (or if a Default or an Event of Default has
occurred and is continuing), that BA Rate Loan shall be converted to a
Canadian Index Rate Loan at the end of its BA Rate Period. Borrower
Representative must make such election by notice to Canadian Agent in writing,
by telecopy or overnight courier. In the case of any conversion or
continuation, such election must be made pursuant to a written notice (a
"Notice of Conversion/Continuation-BA Rate") in the form of Exhibit
1.5(e)(ii).
(f) Notwithstanding anything to the contrary set forth in this
Section 1.5, if a court of competent jurisdiction determines in a final order
that the rate of interest payable with respect to the US Obligations exceeds
the highest rate of interest permissible under law (the "Maximum Lawful
Rate"), then so long as the Maximum Lawful Rate would be so exceeded, the rate
of interest payable hereunder shall be equal to the Maximum Lawful Rate;
provided, however, that if at any time thereafter the rate of interest payable
hereunder is less than the Maximum Lawful Rate, US Borrowers shall continue to
pay interest hereunder at the Maximum Lawful Rate until such time as the total
interest received by Agent, on behalf of US Lenders, is equal to the total
interest that would have been received had the interest rate payable with
respect to the US Obligations been (but for the operation of this paragraph)
the interest rate payable since the Closing Date as otherwise provided in this
Agreement. Thereafter, interest hereunder shall be paid at the rate(s) of
interest and in the manner provided in Sections 1.5(a) through (e), unless and
until the rate of interest again exceeds the Maximum Lawful Rate, and at that
time this paragraph shall again apply. In no event shall the total interest
received by any US Lender pursuant to the terms hereof exceed the amount that
such Lender could lawfully have received had the interest due hereunder been
calculated for the full term hereof at the Maximum Lawful Rate. If the Maximum
Lawful Rate is calculated pursuant to this paragraph, such interest shall be
calculated at a daily rate equal to the Maximum Lawful Rate divided by the
number of days in the year in which such calculation is made. If,
notwithstanding the provisions of this Section 1.5(f), a court of competent
jurisdiction shall finally determine that a US Lender has received interest
hereunder in excess of the Maximum Lawful Rate, Agent shall, to the extent
permitted by applicable law, promptly apply such excess in the order specified
in Section 1.11 and
17
thereafter shall refund any excess to US Borrowers or as a court of competent
jurisdiction may otherwise order.
(g) If any provision of this Agreement or any of the other Loan
Documents would obligate Canadian Borrower to make any payment of interest
with respect to the Canadian Obligations or other amount payable to any
Canadian Lender in an amount or calculated at a rate which would be prohibited
by law or would result in a receipt by that Canadian Lender of interest with
respect to the Canadian Obligations at a criminal rate (as such terms are
construed under the Criminal Code (Canada)) then, notwithstanding such
provision, such amount or rates shall be deemed to have been adjusted with
retroactive effect to the maximum amount or rate of interest, as the case may
be, as would not be so prohibited by law or so result in a receipt by that
Canadian Lender of interest with respect to the Canadian Obligations at a
criminal rate, such adjustment to be effected, to the extent necessary, as
follows: (1) first, by reducing the amount or rates of interest required to be
paid to the affected Canadian Lender under this Section 1.5; and (2)
thereafter, by reducing any fees, commissions, premiums and other amounts
required to be paid to the affected Canadian Lender which would constitute
interest with respect to the Canadian Obligations for purposes of Section 347
of the Criminal Code (Canada). Notwithstanding the foregoing, and after giving
effect to all adjustments contemplated thereby, if any Canadian Lender shall
have received an amount in excess of the maximum permitted by that section of
the Criminal Code (Canada), then Canadian Borrower shall be entitled, by
notice in writing to the affected Canadian Lender, to obtain reimbursement
from that Canadian Lender in an amount equal to such excess, and pending such
reimbursement, such amount shall be deemed to be an amount payable by that
Canadian Lender to Canadian Borrower. Any amount or rate of interest under the
Canadian Obligations referred to in this Section 1.5(g) shall be determined in
accordance with generally accepted actuarial practices and principles as an
effective annual rate of interest over the term that any Canadian Loan remains
outstanding on the assumption that any charges, fees or expenses that fall
within the meaning of "interest" (as defined in the Criminal Code (Canada))
shall, if they relate to a specific period of time, be pro-rated over that
period of time and otherwise be pro-rated over the period from the Closing
Date to the Termination Date (with reference to the Canadian Obligations) and,
in the event of a dispute, a certificate of a Fellow of the Canadian Institute
of Actuaries appointed by Canadian Agent shall be conclusive for the purposes
of such determination.
(h) Interest Act (Canada). For purposes of disclosure pursuant to
the Interest Act (Canada), the annual rates of interest or fees to which the
rates of interest or fees provided in this Agreement and the other Loan
Documents (and stated herein or therein, as applicable, to be computed on the
basis of a 360 day year or any other period of time less than a calendar year)
are equivalent are the rates so determined multiplied by the actual number of
days in the applicable calendar year and divided by 360 or such other period
of time, respectively.
1.6 Eligible Accounts. All of the Accounts owned by each Borrower
and reflected in the most recent Borrowing Base Certificates delivered by US
Borrowers and Canadian Borrower to Agent shall be "Eligible Accounts" for
purposes of this Agreement, except any Account to which any of the
exclusionary criteria set forth below applies. Agent shall have the right to
establish, modify or eliminate Reserves and Canadian Reserves against Eligible
Accounts from time to time in its reasonable credit judgment and Agent
reserves the right, at any time and from time to time after the Closing Date,
to adjust any of the criteria set
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forth below and to establish new criteria, in its reasonable credit judgment,
subject to the approval of Super-Majority Revolving Lenders in the case of
adjustments, new criteria or the elimination of Reserves or Canadian Reserves
which have the effect of making more credit available. Eligible Accounts shall
not include any Account of any Borrower:
(a) that does not arise from the sale of goods or the performance of
services by such Borrower in the ordinary course of its business;
(b) (i) upon which such Borrower's right to receive payment is not
absolute or is contingent upon the fulfillment of any condition whatsoever or
(ii) as to which such Borrower is not legally able to bring suit or otherwise
enforce its remedies against the Account Debtor through judicial process or
(iii) if the Account represents a progress billing consisting of an invoice
for goods sold or used or services rendered pursuant to a contract under which
the Account Debtor's obligation to pay that invoice is subject to such
Borrower's completion of further performance under such contract or is subject
to the equitable lien of a surety bond issuer;
(c) in the event that any defense, counterclaim, setoff or dispute
is asserted as to such Account;
(d) that is not a true and correct statement of bona fide
indebtedness incurred in the amount of the Account for merchandise sold to or
services rendered and accepted by the applicable Account Debtor;
(e) with respect to which an invoice (substantially in the form of,
and with terms set forth in, the form of invoice used by Borrowers as of the
Closing Date or in such other form and with such other terms as are reasonably
acceptable to Agent) has not been sent to the applicable Account Debtor;
(f) that (i) is not owned by such Borrower or (ii) is subject to any
right, claim, security interest or other interest of any other Person, other
than (A) Liens in favor of Agent, on behalf of itself, Canadian Agent and
Lenders, with respect to any Account of a US Borrower or Liens in favor of
Canadian Agent, on behalf of itself and Canadian Lenders, with respect to any
Account of Canadian Borrower, or (B) with respect to Accounts of the Canadian
Borrower, Prior Claims that are unregistered and secure amounts that are not
yet due and payable;
(g) that arises from a sale to any director, officer, other employee
or Affiliate of any Credit Party, or to any entity that has any common officer
or director with any Credit Party;
(h) that is the obligation of an Account Debtor that is the United
States or Canadian government (including, without limitation, Her Majesty the
Queen in Right of Canada) or a political subdivision thereof, or any state,
province, county or municipality or department, agency or instrumentality
thereof (i) unless and to the extent, with respect to Accounts owed by Account
Debtors that are the United States government or a political subdivision
thereof or a state or county thereof, such Accounts in the aggregate do not
exceed $250,000 or (ii) unless, with respect to any Account, the Account is
assignable by way of security and such Borrower has complied with respect to
such obligation with the Federal Assignment of Claims Act of
19
1940, Financial Administration Act (Canada) or any applicable state, province,
county or municipal law restricting assignment thereof;
(i) that is the obligation of an Account Debtor located in a country
other than the United States of America or Canada (except, with respect to
Accounts of Account Debtors of US Borrowers, any such foreign Accounts to the
extent they do not contribute more than $15,000,000 in the aggregate of
availability under the US Borrowing Base), unless payment thereof is assured
by a letter of credit assigned and delivered to Agent (with respect to
Accounts of US Borrowers) or Canadian Agent (with respect to Accounts of
Canadian Borrower), reasonably satisfactory to Agent as to form, amount and
issuer;
(j) to the extent such Borrower or any Subsidiary thereof is liable
for goods sold or services rendered by the applicable Account Debtor to such
Borrower or any Subsidiary thereof but only to the extent of the potential
offset;
(k) that arises with respect to goods that are delivered on a
xxxx-and-hold, cash-on-delivery basis or placed on consignment, guaranteed
sale or other terms by reason of which the payment by the Account Debtor is or
may be conditional;
(l) that is in default; provided, that, without limiting the
generality of the foregoing, an Account shall be deemed in default upon the
occurrence of any of the events described in clauses (i), (ii) and (iii) of
this subsection; provided further, that if an Account is paid on or before the
applicable dates set forth in clause (i) of this subsection it shall not be
deemed to be in default:
(i) the Account is not paid within the earlier of: 60 days
following its due date or 120 days following its original invoice date,
provided, however, that (A) Accounts generated by Xxxxxxxxx Manufacturing in
the months of September through February shall not be deemed ineligible
because they are not paid within 120 days following their original invoice
date to the extent such Accounts do not contribute more than $3,000,000 in the
aggregate of availability under the US Borrowing Base so long as, with respect
to any such Account, one-third is due in each of the immediately following
April, May and June, (B) Accounts generated by Xxxxx (x) in the months of
September through February shall not be deemed ineligible because they are not
paid within 120 days following their original invoice date to the extent such
Accounts do not contribute more than $3,500,000 (when aggregated with amounts
generated in the months from the immediately preceding March through August as
described in clause (y) below) in the aggregate of availability under the US
Borrowing Base so long as, with respect to any such Account, one-half is due
in each of the immediately following June and July and (y) in the months of
March through August shall not be deemed ineligible because they are not paid
within 120 days following their original invoice date to the extent such
Accounts do not contribute more than $3,500,000 (when aggregated with amounts
generated in the months from the immediately preceding September through
February as described in clause (x) above) in the aggregate of availability
under the US Borrowing Base so long as, with respect to any such Account,
amounts are due in full in the immediately following October, and (C) Accounts
generated by Xxxxxx, Inc.'s Forestry and Industrial Equipment Division shall
not be deemed ineligible because they are not paid within 120 days following
their original invoice date to the extent such Accounts do not contribute more
than $1,000,000 in the aggregate of availability
20
under the US Borrowing Base so long as, with respect to any such Account,
amounts are due within 12 months following the invoice date;
(ii) the Account Debtor obligated upon such Account suspends
business, makes a general assignment for the benefit of creditors or fails to
pay its debts generally as they come due or is otherwise insolvent; or
(iii) a petition or assignment or an application for an order
to stay a proceeding is filed by or against any Account Debtor obligated upon
such Account under any bankruptcy law or any other federal, state or foreign
(including any Canadian federal or provincial) receivership, insolvency relief
or other Insolvency Laws;
(m) that is the obligation of an Account Debtor if 50% or more of
the US Dollar Amount of all Accounts owing by that Account Debtor are
ineligible under the other criteria set forth in this Section 1.6;
(n) (i) with respect to Accounts of US Borrowers, as to which
Agent's Lien thereon, on behalf of itself, Canadian Agent and Lenders or (ii)
with respect to Accounts of Canadian Borrower, as to which Canadian Agent's
Lien thereon, on behalf of itself and Canadian Lenders, is not a first
priority perfected Lien, subject to, in the case of Canadian Borrower, Prior
Claims that are unregistered and secure amounts that are not yet due and
payable;
(o) as to which any of the representations or warranties in the Loan
Documents are untrue;
(p) to the extent such Account is evidenced by a judgment,
Instrument or Chattel Paper;
(q) to the extent that such Account, together with all other
Accounts owing by such Account Debtor and its Affiliates (other than
Electrolux and its Affiliates, including, without limitation, the Husqvarna
division of Electrolux, and Caterpillar Inc. and its Affiliates) as of any
date of determination exceed 10% of all Eligible Accounts or, with respect to
Electrolux and its Affiliates or Caterpillar Inc. and its Affiliates, 15% of
all Eligible Accounts;
(r) that is payable in any currency other than US Dollars or, with
respect to any Account of Canadian Borrower, Canadian Dollars; or
(s) that is otherwise unacceptable to Agent in its reasonable credit
judgment.
1.7 Eligible Inventory. All of the Inventory owned by Borrowers and
reflected in the most recent Borrowing Base Certificates delivered by US
Borrowers and Canadian Borrower to Agent shall be "Eligible Inventory" for
purposes of this Agreement, except any Inventory to which any of the
exclusionary criteria set forth below applies. Agent shall have the right to
establish, modify or eliminate Reserves and Canadian Reserves against Eligible
Inventory from time to time in its reasonable credit judgment and Agent
reserves the right, at any time and from time to time after the Closing Date,
to adjust the criteria set forth below and to establish new criteria, in its
reasonable credit judgment, subject to the approval of Super-Majority
Revolving Lenders in the case of adjustments, new criteria or the elimination
of
21
Reserves or Canadian Reserves which have the effect of making more credit
available. Eligible Inventory shall not include any Inventory of any Borrower
that:
(a) is not owned by such Borrower free and clear of all Liens and
rights of any other Person (including the rights of a purchaser that has made
progress payments and the rights of a surety that has issued a bond to assure
such Borrower's performance with respect to that Inventory and the rights of
suppliers under Section 81.1 of the Bankruptcy and Insolvency Act (Canada)),
except (i) with respect to Inventory of a US Borrower, the Liens in favor of
Agent, on behalf of itself, Canadian Agent and Lenders, (ii) with respect to
Inventory of Canadian Borrower, Liens of Canadian Agent, on behalf of itself
and Canadian Lenders, (iii) Permitted Encumbrances in favor of landlords and
bailees to the extent permitted in Section 5.9 hereof (subject to Reserves and
Canadian Reserves, as applicable, established by Agent in accordance with
Section 5.9 hereof) and (iv) with respect to Inventory of Canadian Borrower,
Prior Claims that are unregistered and secure amounts that are not yet due and
payable other than the claims of suppliers under Section 81.1 of the
Bankruptcy and Insolvency Act (Canada);
(b) (i) is not located on premises owned, leased or rented by such
Borrower and set forth in Disclosure Schedule (3.2), or (ii) is stored at a
leased location, unless Agent has given its prior consent thereto and unless
either (x) a reasonably satisfactory landlord waiver has been delivered to
Agent or, in the case of Inventory of Canadian Borrower, Canadian Agent, or
(y) Reserves or Canadian Reserves reasonably satisfactory to Agent have been
established with respect thereto or (iii) is stored with a bailee or
warehouseman unless a reasonably satisfactory, acknowledged bailee letter has
been received by Agent and Reserves or Canadian Reserves reasonably
satisfactory to Agent have been established with respect thereto, or (iv) is
located at an owned location subject to a mortgage (or equivalent thereof
under applicable law) in favor of a lender other than Agent (with respect to
Inventory of a US Borrower) or Canadian Agent (with respect to Inventory of
Canadian Borrower) unless a reasonably satisfactory mortgagee waiver has been
delivered to Agent or, in the case of property on which Inventory of Canadian
Borrower is located, Canadian Agent, or (v) is located at any site if the
aggregate book value of Inventory at any such location is less than $100,000
or (vii) if owned by Canadian Borrower, is not located in Canada; or (viii) if
owned by a US Borrower, is not located in the United States or the Province of
Ontario;
(c) is placed on consignment or is in transit, except, with respect
to Inventory of a US Borrower, for Inventory in transit between locations
within the United States of US Borrowers as to which Agent's Liens have been
perfected at origin and destination or, with respect to Inventory of Canadian
Borrower, for Inventory in transit between locations within Canada of Canadian
Borrower as to which Canadian Agent's Liens have been perfected at origin and
destination;
(d) is covered by a negotiable document of title, unless (i) with
respect to Inventory of a US Borrower, such document has been delivered to
Agent with all necessary endorsements, free and clear of all Liens except
those in favor of Agent or (ii) with respect to Inventory of Canadian
Borrower, such document has been delivered to Canadian Agent with all
necessary endorsements, free and clear of all Liens except those in favor of
Canadian Agent;
(e) is obsolete, unsalable, shopworn, seconds, damaged or unfit for
sale;
22
(f) consists of display items or packing or shipping materials or
manufacturing supplies;
(g) is not of a type held for sale in the ordinary course of such
Borrower's business;
(h) is not subject to a first priority Lien in favor of (i) Agent,
with respect to Inventory of a US Borrower, or (i) Canadian Agent, with
respect to Inventory of Canadian Borrower, subject to Permitted Encumbrances
or, in the case of Canadian Borrower, Prior Claims that are unregistered and
that secure amounts that are not yet due and payable, other than the claims of
suppliers under Section 81.1 of the Bankruptcy and Insolvency Act (Canada);
(i) breaches any of the representations or warranties pertaining to
Inventory set forth in the Loan Documents;
(j) consists of Hazardous Materials or goods that can be transported
or sold only with permits, licenses, approvals or authorizations that are not
readily available;
(k) is not covered by casualty insurance reasonably acceptable to
Agent (subject to deductibles reasonably acceptable to Agent); or
(l) is otherwise unacceptable to Agent in its reasonable credit
judgment.
1.8 Cash Management Systems. On or prior to the Closing Date,
Borrowers will establish and will maintain until the Termination Date, the
cash management systems described in Annex C (the "Cash Management Systems").
1.9 Fees.
(a) Fee Letter Fees. Xxxxxx, Inc. shall pay to GE Capital,
individually, the Fees specified in those certain fee letters dated as of the
Closing Date among Xxxxxx, Inc. and GE Capital (as amended, restated,
supplemented or otherwise modified from time to time, collectively, the "GE
Capital Fee Letter"), at the times specified for payment therein.
(b) Unused Line Fees.
(i) As additional compensation for the A Loan Lenders, US
Borrowers shall pay to Agent, for the ratable benefit of such Lenders, in
arrears, on the first Business Day of each month prior to the Commitment
Termination Date and on the Commitment Termination Date, a Fee for Borrowers'
non-use of available funds in an amount equal to the Applicable Unused Line
Fee Margin per annum (calculated on the basis of a 360 day year for actual
days elapsed) multiplied by the difference between (x) the Maximum Amount (as
it may be reduced from time to time) and (y) the average for the period of the
daily closing balances of the aggregate US Revolving Loan and the Swing Line
Loan outstanding during the period for which such Fee is due.
(ii) As additional compensation for the Canadian Lenders,
Canadian Borrower shall pay to Canadian Agent, for the ratable benefit of such
Lenders, in arrears, on the
23
first Business Day of each month prior to the Commitment Termination Date and
on the Commitment Termination Date, a Fee for Canadian Borrower's non-use of
available funds in an amount equal to the Applicable Unused Line Fee Margin
per annum (calculated on the basis of a 360 day year for actual days elapsed)
multiplied by the difference between (x) the Canadian Maximum Amount (as it
may be reduced from time to time) and (y) the average for the period of the
daily closing balances of the aggregate Canadian Revolving Loan outstanding
during the period for which such Fee is due.
(iii) As additional compensation for the B Loan Lenders, US
Borrowers shall pay to Agent, for the ratable benefit of such Lenders, in
arrears, on the first Business Day of each month prior to the termination of
the Term Loan B Advance Period and on the Commitment Termination Date if such
date occurs prior to the termination of the Term Loan B Advance Period or,
otherwise, on the date of termination of the Term Loan B Advance Period, a Fee
for Borrowers' non-use of available funds in an amount equal to the Applicable
Unused Line Fee Margin per annum (calculated on the basis of a 360 day year
for actual days elapsed) multiplied by the difference between (x) the Term
Loan B Commitment and (y) the average for the period of the daily closing
balances of the aggregate Term Loan B outstanding during the period for which
such Fee is due.
(c) Prepayment Fees. If US Borrowers pay after acceleration or
prepay all or any portion of the Term Loan A or Term Loan B or prepay the US
Revolving Loan and reduce or terminate the US Revolving Loan Commitment,
whether voluntarily or involuntarily and whether before or after acceleration
of the Obligations or if the Commitments are otherwise terminated (other than
mandatory prepayments (I) under Section 1.3(b)(iv), (II) under Section
1.3(b)(ii) from the proceeds of asset sales after the first anniversary of the
Closing Date in an amount not to exceed, together with any such prepayments by
the Canadian Borrower, $25,000,000 per year, (III) under Section 1.3(b)(ii)
from the proceeds of the sale of all of the Stock or substantially all of the
assets of Gear or Xxxxx and (IV) under Section 1.3(b)(ii) from amounts
received by Xxxxxx, Inc. in connection with the release of funds escrowed in
connection with the December 2001 sale of the sporting equipment segment of
Xxxxxx, Inc.), US Borrowers shall pay to Agent, for the benefit of A Loan
Lenders and B Loan Lenders, as applicable, as liquidated damages and
compensation for the costs of being prepared to make funds available hereunder
an amount equal to the Applicable Percentage (as defined below) multiplied by
the sum of (i) the principal amount of the Term Loan A or Term Loan B paid
after acceleration or prepaid, and (ii) the amount of the reduction of the US
Revolving Loan Commitment. If Canadian Borrower pays after acceleration or
prepays all or any portion of the Canadian Term Loan or prepays the Canadian
Revolving Loan and reduces or terminate the Canadian Revolving Loan
Commitment, whether voluntarily or involuntarily and whether before or after
acceleration of the Obligations or if the Commitments are otherwise terminated
(other than mandatory prepayments (I) under Section 1.3(b)(iv), (II) under
Section 1.3(b)(ii) from the proceeds of asset sales after the first
anniversary of the Closing Date in an amount not to exceed, together with any
such prepayments by the US Borrowers, $25,000,000 per year, (III) under
Section 1.3(b)(ii) from the proceeds of the sale of all of the Stock or
substantially all of the assets of Gear or Xxxxx and (IV) under Section
1.3(b)(ii) from amounts received by Xxxxxx, Inc. in connection with the
release of funds escrowed in connection with the December 2001 sale of the
sporting equipment segment of Xxxxxx, Inc.), Canadian Borrower shall pay to
Canadian Agent, for the benefit of Canadian Lenders as liquidated damages and
compensation for the costs of being prepared to
24
make funds available hereunder an amount equal to the Applicable Percentage
(as defined below) multiplied by the sum of (i) the principal amount of the
Canadian Term Loan paid after acceleration or prepaid, and (ii) the amount of
the reduction of the Canadian Revolving Loan Commitment. As used herein, the
term "Applicable Percentage" shall mean (x) two percent (2.00%), in the case
of a prepayment on or prior to the first anniversary of the Closing Date, and
(y) one percent (1.00%), in the case of a prepayment after the first
anniversary of the Closing Date but on or prior to the second anniversary
thereof. The Credit Parties agree that the Applicable Percentages are a
reasonable calculation of Lenders' lost profits in view of the difficulties
and impracticality of determining actual damages resulting from an early
termination of the Commitments. Notwithstanding the foregoing, no prepayment
fee shall be payable by Borrowers (A) upon a mandatory prepayment made
pursuant to Sections 1.3(b)(i) or 1.16(c); provided that Borrowers do not
permanently reduce or terminate the US Revolving Loan Commitment or Canadian
Revolving Loan Commitment upon any such prepayment, (B) if the Loans are
repaid because of clause (b) of the definition of Commitment Termination Date
or (C) if the Loans are refinanced pursuant to a loan facility arranged by GE
Capital pursuant to which each A Loan Lender is offered its US Pro Rata Share
of any such loan facility to US Borrowers and each Canadian Lender is offered
its Canadian Pro Rata Share of any such loan facility to Canadian Borrower.
(d) US Borrowers shall pay to Agent, for the ratable benefit of A
Loan Lenders, the Letter of Credit Fee as provided in Annex B.
1.10 Receipt of Payments. US Borrowers shall make each payment under
this Agreement not later than 2:00 p.m. (New York time) on the day when due in
immediately available funds in US Dollars to the US Collection Account.
Canadian Borrower shall make each payment under this Agreement not later than
2:00 p.m. (New York time) on the day when due in immediately available funds
in Canadian Dollars (with respect to principal payments on Canadian Revolving
Credit Advances denominated in Canadian Dollars) and, otherwise, in US
Dollars, in each case, to the Canadian Collection Account. For purposes of
computing interest and Fees and determining US Borrowing Availability and
Canadian Borrowing Availability as of any date, all payments shall be deemed
received on the Business Day on which immediately available funds therefor are
received in the applicable Collection Account prior to 2:00 p.m. New York
time. Payments received after 2:00 p.m. (New York time) on any Business Day or
on a day that is not a Business Day shall be deemed to have been received on
the following Business Day. Unless stated otherwise, all calculations,
comparisons, measurements or determinations under this Agreement shall be made
in US Dollars. For purposes of such calculations, comparisons, measurements or
determinations, amounts denominated in other currencies shall be converted in
the Equivalent Amount of US Dollars on the date of calculation, comparison,
measurement or determination. If Agent or Canadian Agent receives any payment
from or on behalf of any Credit Party in a currency other than the currency in
which such Obligation is denominated, Agent or Canadian Agent, as the case may
be, may convert the payment (including the monetary proceeds of realization
upon any Collateral and any funds then held in a cash collateral account) into
the currency of the relevant Obligation at the exchange rate that Agent or
Canadian Agent, as the case may be, would be prepared to sell the currency in
which the relevant Obligation is denominated against the currency received on
the Business Day immediately preceding the date of actual payment. The
Obligations shall be satisfied only to the
25
extent of the amount actually received by Agent or Canadian Agent, as the case
may be, upon such conversion.
1.11 Application and Allocation of Payments.
(a) Notwithstanding anything in this Agreement or any other Loan
Document to contrary, (A) each US Borrower hereby irrevocably waives the right
to direct the application of any and all payments received from or on behalf
of such Borrower, and each US Borrower hereby irrevocably agrees that Agent
shall have the continuing exclusive right to apply any and all such payments
to the Obligations and (B) Canadian Borrower hereby irrevocably waives the
right to direct the application of any and all payments received from or on
behalf of such Borrower, and Canadian Borrower hereby irrevocably agrees that
Canadian Agent shall have the continuing exclusive right to apply any and all
such payments to the Canadian Obligations.
(b) Agent is authorized to, and at its sole election may (so long as
the Requisite Revolving Lenders have not instructed Agent otherwise), charge
to the US Revolving Loan balance on behalf of each US Borrower and cause to be
paid (i) all Fees, expenses, Charges, costs (including insurance premiums in
accordance with Section 5.4(a)) and interest and principal, other than
principal of the US Revolving Loan, owing by US Borrowers to US Lenders under
this Agreement or any of the other Loan Documents and (ii) amounts necessary
to preserve or protect the Collateral, or any portion thereof, or to enhance
the likelihood of, or maximize the amount of, repayment of the Obligations if
and to the extent US Borrowers fail to pay promptly any such amounts as and
when due, even if the amount of such charges would exceed US Borrowing
Availability at such time or would cause the balance of the US Revolving Loan
and the Swing Line Loan to exceed US Borrowers' US Borrowing Base after giving
effect to such charges; provided, however, that, notwithstanding the
foregoing, Agent shall not make advances under clause (ii) of this sentence in
excess of 10% of the US Borrowing Base unless Requisite Lenders consent to
such advances. At Agent's option and to the extent permitted by law, any
charges so made shall constitute part of the US Revolving Loan hereunder.
Canadian Agent is authorized to, and at its sole election may (so long as the
Requisite Revolving Lenders have not instructed Canadian Agent otherwise),
charge to the Canadian Revolving Loan balance on behalf of Canadian Borrower
and cause to be paid (i) all Fees, expenses, Charges, costs (including
insurance premiums in accordance with Section 5.4(a)) and interest and
principal, other than principal of the Canadian Revolving Loan, owing by
Canadian Borrower to Canadian Lenders under this Agreement or any of the other
Loan Documents and (ii) amounts necessary to preserve or protect the
Collateral, or any portion thereof, or to enhance the likelihood of, or
maximize the amount of, repayment of the Canadian Obligations if and to the
extent Canadian Borrower fails to pay promptly any such amounts as and when
due, even if the amount of such charges would exceed Canadian Borrowing
Availability at such time or would cause the balance of the Canadian Revolving
Loan to exceed Canadian Borrower's Canadian Borrowing Base after giving effect
to such charges; provided, however, that, notwithstanding the foregoing,
Canadian Agent shall not make advances under clause (ii) of this sentence in
excess of 10% of the Canadian Borrowing Base unless Requisite Lenders consent
to such advances. At Canadian Agent's option and to the extent permitted by
law, any charges so made shall constitute part of the Canadian Revolving Loan
hereunder.
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1.12 Loan Account and Accounting. Agent shall maintain a loan
account (the "US Loan Account") on its books to record: all US Revolving
Credit Advances, Swing Line Advances, Letters of Credit, the Term Loan A and
the Term Loan B, all payments made by US Borrowers, and all other debits and
credits as provided in this Agreement with respect to the Loans or any other
Obligations (other than Canadian Obligations). Canadian Agent shall maintain a
loan account (the "Canadian Loan Account") on its books to record: all
Canadian Revolving Credit Advances and the Canadian Term Loan, all payments
made by Canadian Borrower, and all other debits and credits as provided in
this Agreement with respect to the Canadian Obligations. All entries in the US
Loan Account and the Canadian Loan Account shall be made in accordance with
Agent's or Canadian Agent's, as the case may be, customary accounting
practices as in effect from time to time. The balance in the US Loan Account,
as recorded on Agent's most recent printout or other written statement, shall,
absent manifest error, be presumptive evidence of the amounts due and owing to
Agent and US Lenders by each US Borrower; provided that any failure to so
record or any error in so recording shall not limit or otherwise affect any US
Borrower's duty to pay the Obligations. The balance in the Canadian Loan
Account, as recorded on Canadian Agent's most recent printout or other written
statement, shall, absent manifest error, be presumptive evidence of the
amounts due and owing to Canadian Agent and Canadian Lenders by Canadian
Borrower; provided that any failure to so record or any error in so recording
shall not limit or otherwise affect Canadian Borrower's duty to pay the
Obligations. Each of the Agent and the Canadian Agent shall render to Borrower
Representative a monthly accounting of transactions with respect to the US
Loans and the Canadian Loans setting forth the balance of the US Loan Account
and the Canadian Loan Account for the immediately preceding month. Unless
Borrower Representative notifies Agent, in the case of the US Loan Account, or
Canadian Agent, in the case of the Canadian Loan Account, in writing of any
objection to any such accounting (specifically describing the basis for such
objection), within 30 days after the date thereof, each and every such
accounting shall (absent manifest error) be deemed final, binding and
conclusive on the applicable Borrowers in all respects as to all matters
reflected therein. Only those items expressly objected to in such notice shall
be deemed to be disputed by the applicable Borrowers. Notwithstanding any
provision herein contained to the contrary, any Lender may elect (which
election may be revoked) to dispense with the issuance of Notes to that Lender
and may rely on the applicable Loan Account as evidence of the amount of the
applicable Obligations from time to time owing to it. Regardless of whether
any Note or Notes are issued, each US Borrower promises to pay the Obligations
as and when due and Canadian Borrower promises to pay the Canadian Obligations
as and when due.
1.13 Indemnity.
(a) Each US Credit Party that is a signatory hereto shall jointly
and severally indemnify and hold harmless each of Agent, Canadian Agent,
Lenders and their respective Affiliates, and each such Person's respective
officers, directors, employees, attorneys, agents and representatives, and
each Canadian Credit Party that is signatory hereto shall jointly and
severally indemnify and hold harmless each of Agent, Canadian Agent, Lenders
and their respective Affiliates, and each such Person's respective officers,
directors, employees, attorneys, agents and representatives (each, an
"Indemnified Person"), from and against any and all suits, actions,
proceedings, claims, damages, losses, liabilities and expenses (including
reasonable attorneys' fees and disbursements and other costs of investigation
or defense, including those
27
incurred upon any appeal) that may be instituted or asserted against or
incurred by any such Indemnified Person as the result of credit having been
extended, suspended or terminated under this Agreement and the other Loan
Documents and the administration of such credit, and in connection with or
arising out of the transactions contemplated hereunder and thereunder and any
actions or failures to act in connection therewith, including any and all
Environmental Liabilities and legal costs and expenses arising out of or
incurred in connection with disputes between or among any parties to any of
the Loan Documents (collectively, "Indemnified Liabilities"); provided, that
no such Credit Party shall be liable for any indemnification to an Indemnified
Person to the extent that any such suit, action, proceeding, claim, damage,
loss, liability or expense results from that Indemnified Person's gross
negligence or willful misconduct; provided further, that the foregoing
indemnification by the Canadian Credit Parties shall not include a Guaranty of
the US Loans or interest or fees thereon and any such Guaranty is hereby
specifically excluded therefrom. NO INDEMNIFIED PERSON SHALL BE RESPONSIBLE OR
LIABLE TO ANY OTHER PARTY TO ANY LOAN DOCUMENT, ANY SUCCESSOR, ASSIGNEE OR
THIRD PARTY BENEFICIARY OF SUCH PERSON OR ANY OTHER PERSON ASSERTING CLAIMS
DERIVATIVELY THROUGH SUCH PARTY, FOR INDIRECT, PUNITIVE, EXEMPLARY OR
CONSEQUENTIAL DAMAGES WHICH MAY BE ALLEGED AS A RESULT OF CREDIT HAVING BEEN
EXTENDED, SUSPENDED OR TERMINATED UNDER ANY LOAN DOCUMENT OR AS A RESULT OF
ANY OTHER TRANSACTION CONTEMPLATED HEREUNDER OR THEREUNDER.
(b) To induce Lenders to provide the LIBOR Rate option on the terms
provided herein, if (i) any LIBOR Loans are repaid in whole or in part prior
to the last day of any applicable LIBOR Period (whether that repayment is made
pursuant to any provision of this Agreement or any other Loan Document or
occurs as a result of acceleration, by operation of law or otherwise); (ii)
any Borrower shall default in payment when due of the principal amount of or
interest on any LIBOR Loan; (iii) any Borrower shall refuse to accept any
borrowing of, or shall request a termination of, any borrowing of, conversion
into or continuation of, LIBOR Loans after Borrower Representative has given
notice requesting the same in accordance herewith; or (iv) any Borrower shall
fail to make any prepayment of a LIBOR Loan after Borrower Representative has
given a notice thereof in accordance herewith, then, (1) with respect to any
US Loan, US Borrowers and (2) with respect to any Canadian Loan, Canadian
Borrower shall indemnify and hold harmless each affected Lender from and
against all losses, costs and expenses resulting from or arising from any of
the foregoing. Such indemnification shall include any loss (including loss of
margin) or expense arising from the reemployment of funds obtained by it or
from fees payable to terminate deposits from which such funds were obtained.
For the purpose of calculating amounts payable to a Lender under this
subsection, each Lender shall be deemed to have actually funded its relevant
LIBOR Loan through the purchase of a deposit bearing interest at the LIBOR
Rate in an amount equal to the amount of that LIBOR Loan and having a maturity
comparable to the relevant LIBOR Period; provided, that each Lender may fund
each of its LIBOR Loans in any manner it sees fit, and the foregoing
assumption shall be utilized only for the calculation of amounts payable under
this subsection. This covenant shall survive the termination of this Agreement
and the payment of the Obligations and all other amounts payable hereunder. As
promptly as practicable under the circumstances, each Lender shall provide
Borrower Representative with its written calculation of all amounts payable
pursuant to this Section 1.13(b), and such calculation shall be binding on the
parties hereto
28
unless Borrower Representative shall object in writing within 10 Business Days
of receipt thereof, specifying the basis for such objection in detail.
(c) To induce Canadian Lenders to provide the BA Rate option on the
terms provided herein, if (i) any BA Rate Loans are repaid in whole or in part
prior to the last day of any applicable BA Rate Period (whether that repayment
is made pursuant to any provision of this Agreement or any other Loan Document
or occurs as a result of acceleration, by operation of law or otherwise); (ii)
Canadian Borrower shall default in payment when due of the principal amount of
or interest on any BA Rate Loan; (iii) Canadian Borrower shall refuse to
accept any borrowing of, or shall request a termination of, any borrowing of,
conversion into or continuation of, BA Rate Loans after Borrower
Representative has given notice requesting the same in accordance herewith; or
(iv) Canadian Borrower shall fail to make any prepayment of a BA Rate Loan
after Borrower Representative has given a notice thereof in accordance
herewith, then, Canadian Borrower shall indemnify and hold harmless each
affected Canadian Lender from and against all losses, costs and expenses
resulting from or arising from any of the foregoing. Such indemnification
shall include any loss (including loss of margin) or expense arising from the
reemployment of funds obtained by it or from fees payable to terminate
deposits from which such funds were obtained. For the purpose of calculating
amounts payable to a Canadian Lender under this subsection, each Canadian
Lender shall be deemed to have actually funded its relevant BA Rate Loan
through the purchase of a deposit bearing interest at the BA Rate in an amount
equal to the amount of that BA Rate Loan and having a maturity comparable to
the relevant BA Rate Period; provided, that each Canadian Lender may fund each
of its BA Rate Loans in any manner it sees fit, and the foregoing assumption
shall be utilized only for the calculation of amounts payable under this
subsection. This covenant shall survive the termination of this Agreement and
the payment of the Obligations and all other amounts payable hereunder. As
promptly as practicable under the circumstances, each Canadian Lender shall
provide Borrower Representative with its written calculation of all amounts
payable pursuant to this Section 1.13(c), and such calculation shall be
binding on the parties hereto unless Borrower Representative shall object in
writing within 10 Business Days of receipt thereof, specifying the basis for
such objection in detail.
1.14 Access. Each Credit Party that is a party hereto shall, during
normal business hours, from time to time upon one Business Day's prior notice
as frequently as Agent or Canadian Agent reasonably determines to be
appropriate: (a) provide Agent, Canadian Agent and any of their respective
officers, employees and agents access to its properties, facilities, advisors
and employees (including officers) of each Credit Party and to the Collateral,
(b) permit Agent, Canadian Agent and any of its officers, employees and
agents, to inspect, audit and make extracts from any Credit Party's books and
records, and (c) permit Agent, Canadian Agent and its officers, employees and
agents, to inspect, review, evaluate and make test verifications and counts of
the Accounts, Inventory and other Collateral of any Credit Party.
Notwithstanding the foregoing or anything else herein or any other Loan
Document to the contrary, if a Default or Event of Default has occurred and is
continuing or if access is necessary to preserve or protect the Collateral as
determined by Agent or Canadian Agent, each such Credit Party shall provide
such access to Agent, Canadian Agent and to each Lender at all times and
without advance notice. Furthermore, so long as any Event of Default has
occurred and is continuing, Borrowers shall use reasonable efforts to provide
Agent, Canadian Agent and each Lender with access to their suppliers and
customers. Each Credit Party shall make available to Agent, Canadian Agent
29
and their counsel, as quickly as is possible under the circumstances,
originals or copies of all books and records that Agent or Canadian Agent may
reasonably request. Each Credit Party shall deliver any document or instrument
necessary for Agent or Canadian Agent, as any one of them may from time to
time reasonably request, to obtain records from any service bureau or other
Person that maintains records for such Credit Party, and shall maintain
duplicate records or supporting documentation on media, including computer
tapes and discs owned by such Credit Party. Agent and Canadian Agent will give
Lenders at least 5 days' prior written notice of regularly scheduled audits.
Representatives of other Lenders may accompany Agent's and Canadian Agent's
representatives on regularly scheduled audits at no charge to Borrowers.
1.15 Taxes.
(a) Any and all payments by each Credit Party hereunder (including
any payments made pursuant to Section 12) or under the Notes or under any
other Loan Document shall be made, in accordance with this Section 1.15, free
and clear of and without deduction for any and all present or future Taxes. If
any Credit Party shall be required by law to deduct any Taxes from or in
respect of any sum payable hereunder (including any sum payable pursuant to
Section 12) or under the Notes, (i) the sum payable shall be increased as much
as shall be necessary so that after making all required withholdings and
deductions (including withholdings and deductions applicable to additional
sums payable under this Section 1.15) Agent, Canadian Agent or Lenders, as
applicable, receive an amount equal to the sum they would have received had no
such withholdings and deductions been made, (ii) such Borrower shall make such
deductions, and (iii) such Borrower shall pay the full amount deducted to the
relevant Governmental Authority in accordance with applicable law. Within 30
days after the date of any such payment of Taxes, Borrower Representative
shall furnish to Agent or, with respect to payments made by Canadian Borrower,
Canadian Agent the original or a certified copy of a receipt evidencing
payment thereof.
(b) In addition, each Credit Party agrees to pay any present or
future stamp, recording or documentary taxes or any other excise or property
taxes, charges or similar levies that arise from any payment made under this
Agreement or under any other Loan Document or from the execution, delivery or
registration of, or otherwise with respect to, this Agreement, the other Loan
Documents and any other agreements and instruments contemplated hereby or
thereby ("Other Taxes"). Each Lender agrees that, as promptly as reasonably
practicable after it becomes aware of any circumstances referred to above
which would result in additional payments under this Section 1.15, it shall
notify Borrowers thereof.
(c) Each US Credit Party that is a signatory hereto shall jointly
and severally indemnify and, within 10 days of demand therefor, pay Agent and
each US Lender for the full amount of Taxes and Other Taxes (including any
Taxes imposed by any jurisdiction on amounts payable under this Section 1.15)
paid by Agent or such US Lender on or with respect to any payment by or on
account of any obligation of the U.S. Credit Parties hereunder, as
appropriate, and any penalties, interest and expenses arising therefrom or
with respect thereto, whether or not such Taxes were correctly or legally
asserted. Each Canadian Credit Party that is a signatory hereto shall jointly
and severally indemnify and, within 10 days of demand therefor, pay Canadian
Agent and each Canadian Lender for the full amount of Taxes and Other Taxes
(including any Taxes imposed by any jurisdiction on amounts payable under this
Section 1.15)
30
paid by Canadian Agent or such Canadian Lender on or with respect to any
payment by or on account of any obligation of the Canadian Parties hereunder,
as appropriate, and any liability, interest and expense arising therefrom or
with respect thereto, whether or not such Taxes were correctly or legally
asserted.
(d) Each US Lender, and the successors and assignees of such US
Lender, organized under the laws of a jurisdiction outside of the United
States ("Foreign US Lender"), and each Canadian Lender, and the successors and
assignees of such Canadian Lender, organized under the laws of a jurisdiction
outside of Canada ("Foreign Canadian Lender") (each Foreign US Lender and each
Foreign Canadian Lender shall hereafter be referred to as, a "Foreign Lender")
to whom payments to be made under this Agreement or under the Notes may be
exempt from, or eligible for a reduced rate of, United States or Canadian
withholding tax (as applicable) under the law of the jurisdiction in which the
relevant Borrower is located or under any tax treaty to which such
jurisdiction is a party shall, at the time or times prescribed by applicable
law, provide to Borrower Representative (with a copy to Agent or Canadian
Agent, as applicable) either (i) in the case of a Foreign US Lender a properly
completed and executed IRS Form W-8ECI or Form W-8BEN or other applicable
form, certificate or document prescribed by the IRS or the United States or
(b) in the case of a Foreign Canadian Lender, any applicable form, certificate
or document, in each case certifying as to such Foreign Lender's entitlement
to such exemption or reduction in rate (a "Certificate of Exemption").
(e) If any of Agent, Canadian Agent or any Lender, as applicable,
determines, in its sole discretion, that it has received a refund of any Taxes
as to which it has been indemnified by the Borrower or with respect to which
the Borrower has paid additional amounts pursuant to this Section 1.15, it
shall pay over such refund to the Borrower (but only to the extent of
indemnity payments made, or additional amounts paid, by the Borrower under
this Section 1.15 with respect to the Taxes giving rise to such refund), net
all out-of-pocket expenses of such Agent, Canadian Agent or Lender and without
interest (other than any interest paid by the relevant Governmental Authority
with respect to such refund).
1.16 Capital Adequacy; Increased Costs; Illegality.
(a) If any Lender shall have determined that any law, treaty,
governmental (or quasi-governmental) rule, regulation, guideline or order
regarding capital adequacy, reserve requirements or similar requirements or
compliance by any Lender with any request or directive regarding capital
adequacy, reserve requirements or similar requirements (whether or not having
the force of law), in each case, adopted after the Closing Date, from any
central bank or other Governmental Authority increases or would have the
effect of increasing the amount of capital, reserves or other funds required
to be maintained by such Lender and thereby reducing the rate of return on
such Lender's capital as a consequence of its obligations hereunder, then US
Borrowers, in the case of a US Lender, and Canadian Borrower, in the case of a
Canadian Lender, shall from time to time upon demand by such Lender (with a
copy of such demand to Agent, in the case of a US Lender, or Canadian Agent,
in the case of a Canadian Lender) pay to Agent, in the case of a US Lender, or
Canadian Agent, in the case of a Canadian Lender, for the account of such
Lender, additional amounts sufficient to compensate such Lender for such rate
of return reduction. A certificate as to the amount of that reduction and
showing the basis of the computation thereof submitted by such Lender to
Borrower Representative and to Agent or
31
Canadian Agent, as applicable, shall, absent manifest error, be final,
conclusive and binding for all purposes.
(b) If, due to either (i) the introduction of or any change in any
law or regulation (or any change in the interpretation thereof) or (ii) the
compliance with any guideline or request from any central bank or other
Governmental Authority (whether or not having the force of law), in each case
adopted after the Closing Date, there shall be any increase in the cost to any
Lender of agreeing to make or making, funding or maintaining any Loan, then US
Borrowers, in the case of a US Lender, and Canadian Borrower, in the case of a
Canadian Lender, shall from time to time, upon demand by such Lender (with a
copy of such demand to Agent, in the case of a US Lender, or Canadian Agent,
in the case of a Canadian Lender), pay to Agent, in the case of a US Lender,
or Canadian Agent, in the case of a Canadian Lender for the account of such
Lender additional amounts sufficient to compensate such Lender for such
increased cost. A certificate as to the amount of such increased cost,
submitted to Borrower Representative and to Agent or Canadian Agent, as
applicable, by such Lender, shall be conclusive and binding on Borrowers for
all purposes, absent manifest error. Each Lender agrees that, as promptly as
practicable after it becomes aware of any circumstances referred to above
which would result in any such increased cost, the affected Lender shall, to
the extent not inconsistent with such Lender's internal policies of general
application, use reasonable commercial efforts to minimize costs and expenses
incurred by it and payable to it by Borrowers pursuant to this Section
1.16(b).
(c) Notwithstanding anything to the contrary contained herein, if
the introduction of or any change in any law or regulation (or any change in
the interpretation thereof) shall make it unlawful, or any central bank or
other Governmental Authority shall assert that it is unlawful, for any Lender
to agree to make or to make or to continue to fund or maintain any LIBOR Loan,
then, unless that Lender is able to make or to continue to fund or to maintain
such LIBOR Loan at another branch or office of that Lender without, in that
Lender's opinion, adversely affecting it or its Loans or the income obtained
therefrom, on notice thereof and demand therefor by such Lender to Borrower
Representative through Agent, in the case of a US Lender, or Canadian Agent,
in the case of a Canadian Lender, (i) the obligation of such Lender to agree
to make or to make or to continue to fund or maintain LIBOR Loans shall
terminate and (ii) each US Borrower, in the case of LIBOR Loans that are US
Loans, and Canadian Borrower, in the case of LIBOR Loans that are Canadian
Loans, shall forthwith prepay in full all outstanding LIBOR Loans owing by
such Borrowers to such Lender, together with interest accrued thereon, unless
Borrower Representative on behalf of such Borrowers, within 5 Business Days
after the delivery of such notice and demand, converts all LIBOR Loans into US
Index Rate Loans.
(d) Within 15 days after receipt by Borrower Representative of
written notice and demand from any Lender (an "Affected Lender") for payment
of additional amounts or increased costs as provided in Sections 1.15(a),
1.15(c), 1.16(a) or 1.16(b), Borrower Representative may, at its option,
notify Agent, in the case of a US Lender, or Canadian Agent, in the case of a
Canadian Lender, and such Affected Lender of its intention to replace the
Affected Lender. So long as no Default or Event of Default has occurred and is
continuing, Borrower Representative, with the consent of Agent, with respect
to a US Lender, or Canadian Agent, with respect to a Canadian Lender, may
obtain, at Borrowers' expense, a replacement
32
Lender ("Replacement Lender") for the Affected Lender, which Replacement
Lender must be reasonably satisfactory to Agent, in the case of a US Lender,
or Canadian Agent, in the case of a Canadian Lender. If Borrowers obtain a
Replacement Lender within 90 days following notice of their intention to do
so, the Affected Lender must sell and assign its Loans and Commitments to such
Replacement Lender for an amount equal to the principal balance of all Loans
held by the Affected Lender and all accrued interest and Fees with respect
thereto through the date of such sale; provided, that Borrowers shall have
reimbursed such Affected Lender for the additional amounts or increased costs
that it is entitled to receive under this Agreement through the date of such
sale and assignment. Notwithstanding the foregoing, Borrowers shall not have
the right to obtain a Replacement Lender if the Affected Lender rescinds its
demand for increased costs or additional amounts within 15 days following its
receipt of Borrowers' notice of intention to replace such Affected Lender.
Furthermore, if Borrowers give a notice of intention to replace and do not so
replace such Affected Lender within 90 days thereafter, Borrowers' rights
under this Section 1.16(d) shall terminate and Borrowers shall promptly pay
all increased costs or additional amounts demanded by such Affected Lender
pursuant to Sections 1.15(a), 1.16(a) and 1.16(b).
1.17 Single Loan. All Loans to US Borrowers and all of the other
Obligations of US Borrowers arising under this Agreement and the other Loan
Documents shall constitute one general obligation of US Borrowers secured,
until the Termination Date, by all of the US Collateral. All Loans to Canadian
Borrower and all of the other Obligations of Canadian Borrower arising under
this Agreement and the other Loan Documents shall constitute one general
obligation of Canadian Borrower secured, until the Termination Date, by all of
the Canadian Collateral of Canadian Borrower.
2. CONDITIONS PRECEDENT
2.1 Conditions to the Initial Loans. No Lender shall be obligated to
make any Loan or incur any Letter of Credit Obligations on the Closing Date,
or to take, fulfill, or perform any other action hereunder, until the
following conditions have been satisfied or provided for in a manner
satisfactory to Agent, or waived in writing by Agent, Canadian Agent and
Lenders:
(a) Credit Agreement; Loan Documents. This Agreement or counterparts
hereof shall have been duly executed by, and delivered to, Borrowers, each
other Credit Party, Agent, Canadian Agent and Lenders; and Agent shall have
received such documents, instruments, agreements and legal opinions as Agent
shall reasonably request in connection with the transactions contemplated by
this Agreement and the other Loan Documents, including all those listed in the
Closing Checklist attached hereto as Annex D, each in form and substance
reasonably satisfactory to Agent.
(b) Repayment of Prior Lender Obligations; Satisfaction of
Outstanding L/Cs. (i) Agent shall have received a fully executed original of a
pay-off letter reasonably satisfactory to Agent confirming that all of the
Prior Lender Obligations (other than letters of credit referred to in clause
(ii) below and contingent indemnification obligations that by their terms
survive termination of the Prior Credit Agreement) will be repaid in full from
the proceeds of the Loans advanced on the Closing Date and all Liens upon any
of the property of Borrowers or any of their Subsidiaries in favor of Prior
Lender shall be terminated by Prior Lender
33
immediately upon such payment; and (ii) all letters of credit issued or
guaranteed by Prior Lender shall have been cash collateralized, supported by a
guaranty of Agent or supported by a Letter of Credit issued pursuant to Annex
B, as mutually agreed upon by Agent, Borrowers and Prior Lender.
(c) Approvals. Agent shall have received (i) satisfactory evidence
that the Credit Parties have obtained all required consents and approvals of
all Persons including all requisite Governmental Authorities, to the
execution, delivery and performance of this Agreement and the other Loan
Documents and the consummation of the Related Transactions or (ii) an
officer's certificate in form and substance reasonably satisfactory to Agent
affirming that no such consents or approvals are required.
(d) Opening Availability. The Eligible Accounts and Eligible
Inventory supporting the initial US Revolving Credit Advance, the initial
Letter of Credit Obligations and the Canadian Revolving Credit Advance
incurred and the amount of the Reserves and Canadian Reserves to be
established on the Closing Date shall be sufficient in value, as determined by
Agent, to provide Borrowers, collectively, with Excess Availability, after
giving effect to the initial US Revolving Credit Advance made to each US
Borrower, the incurrence of any initial Letter of Credit Obligations, the
initial Canadian Revolving Credit Advance made to Canadian Borrower and the
consummation of the Related Transactions of at least $20,000,000.
(e) Payment of Fees. Borrowers shall have paid the Fees required to
be paid on the Closing Date in the respective amounts specified in Section 1.9
(including the Fees specified in the GE Capital Fee Letter), and shall have
reimbursed Agent and Canadian Agent for all fees, costs and expenses of
closing presented as of the Closing Date in accordance with the GE Capital Fee
Letter and this Agreement.
(f) Capital Structure: Other Indebtedness. The capital structure of
each Credit Party and the terms and conditions of all Indebtedness of each
Credit Party shall be acceptable to Agent in its sole discretion.
(g) Due Diligence. Agent shall have completed its business and legal
due diligence, including a roll forward of its previous Collateral audit, with
results reasonably satisfactory to Agent.
2.2 Further Conditions to Each Loan. Except as otherwise expressly
provided herein, no Lender shall be obligated to fund any Advance or incur any
Letter of Credit Obligation, if, as of the date thereof:
(a) any representation or warranty by any Credit Party contained
herein or in any other Loan Document is untrue or incorrect (with respect to
any representation or warranty that is not otherwise qualified as to
materiality, in any material respect) as of such date, except to the extent
that such representation or warranty expressly relates to an earlier date and
except for changes therein expressly permitted or expressly contemplated by
this Agreement;
(b) any event or circumstance having a Material Adverse Effect has
occurred since the date hereof;
34
(c) any Default or Event of Default has occurred and is continuing
or would result after giving effect to any Advance (or the incurrence of any
Letter of Credit Obligation); or
(d) after giving effect to any Advance (or the incurrence of any
Letter of Credit Obligations), (i) the outstanding principal amount of the US
Revolving Loan would exceed the lesser of the US Borrowing Base and the
Maximum Amount, in each case, less the then outstanding principal amount of
the Swing Line Loan, or (ii) the outstanding principal amount of the Canadian
Revolving Loan would exceed the lesser of the Canadian Borrowing Base and the
Canadian Maximum Amount.
The request and acceptance by any Borrower of the proceeds of any Advance or
the incurrence of any Letter of Credit Obligations shall be deemed to
constitute, as of the date thereof, (i) a representation and warranty by
Borrowers that the conditions in this Section 2.2 have been satisfied and (ii)
a reaffirmation by Borrowers of the provisions set forth in Section 12 and of
the granting and continuance of Agent's, Collateral Agent's and Canadian
Agent' Liens pursuant to the Collateral Documents. The extension of credit by
any Lender after the occurrence of any Default or Event of Default shall not
result in a waiver of such Default or Event of Default.
3. REPRESENTATIONS AND WARRANTIES
To induce Lenders to make the Loans and to incur Letter of Credit
Obligations, the Credit Parties executing this Agreement, jointly and
severally, make the following representations and warranties to Agent,
Canadian Agent and each Lender with respect to all Credit Parties, each and
all of which shall survive the execution and delivery of this Agreement.
3.1 Corporate Existence; Compliance with Law. Each Credit Party (a)
is a corporation, limited liability company or limited partnership duly
organized, validly existing and in good standing under the laws of its
respective jurisdiction of incorporation or organization set forth in
Disclosure Schedule (3.1); (b) is duly qualified to conduct business and is in
good standing in each other jurisdiction where its ownership or lease of
property or the conduct of its business requires such qualification, except
where the failure to be so qualified would not result in exposure to losses,
damages or liabilities which could, in the aggregate, reasonably be expected
to result in a Material Adverse Effect; (c) has the requisite power and
authority and the legal right to own and operate in all material respects its
properties, to lease the property it operates under lease and to conduct its
business in all material respects as now, heretofore and proposed to be
conducted and has the requisite power and authority and the legal right to
pledge, mortgage, hypothecate or otherwise encumber the Collateral; (d)
subject to specific representations regarding Environmental Laws, has all
material licenses, permits, consents or approvals from or by, and has made all
material filings with, and has given all material notices to, all Governmental
Authorities having jurisdiction, to the extent required for such ownership,
operation and conduct; (e) is in compliance with its charter, constating
documents and bylaws or partnership or operating agreement, as applicable; and
(f) subject to specific representations set forth herein regarding ERISA,
Environmental Laws, tax and other laws, is in compliance with all applicable
provisions of law, except where the failure to comply, individually or in the
aggregate, could not reasonably be expected to have a Material Adverse Effect.
35
3.2 Executive Offices, Collateral Locations, FEIN. As of the Closing
Date, the current location of each Credit Party's chief executive office,
principal place of business, domicile (within the meaning of the Quebec Civil
Code) and the warehouses and premises at which any Collateral is located are
set forth in Disclosure Schedule (3.2), and, except as set forth on such
schedule, none of such locations has changed within the 12 months preceding
the Closing Date. In addition, Disclosure Schedule (3.2) lists the federal
employer identification number and organizational identification number, if
any, of each Credit Party.
3.3 Corporate Power, Authorization, Enforceable Obligations. The
execution, delivery and performance by each Credit Party of the Loan Documents
to which it is a party and the creation of all Liens provided for therein: (a)
are within such Person's power; (b) have been duly authorized by all necessary
corporate, limited liability company or limited partnership action; (c) do not
contravene any provision of such Person's charter, constating documents,
bylaws or partnership or operating agreement as applicable; (d) do not violate
any law or regulation, or any order or decree of any court or Governmental
Authority; (e) after giving effect to the repayment of the Prior Lender
Obligations, do not conflict with or result in the breach or termination of,
constitute a default under or accelerate or permit the acceleration of any
performance required by, any indenture, mortgage, deed of trust, lease,
agreement or other instrument to which such Person is a party or by which such
Person or any of its property is bound; (f) do not result in the creation or
imposition of any Lien upon any of the property of such Person other than
those in favor of Agent, Collateral Agent or Canadian Agent, as applicable,
pursuant to the Loan Documents; and (g) do not require the consent or approval
of any Governmental Authority or any other Person, except those which will
have been duly obtained, made or complied with prior to the Closing Date
pursuant to Section 2.1(c). Each of the Loan Documents shall be duly executed
and delivered by each Credit Party that is a party thereto and each such Loan
Document shall constitute a legal, valid and binding obligation of such Credit
Party enforceable against it in accordance with its terms.
3.4 Financial Statements and Projections. Except for the Projections
and the Fair Salable Balance Sheet, all Financial Statements concerning
Holdings and its Subsidiaries that are referred to below have been prepared in
accordance with GAAP consistently applied throughout the periods covered
(except as disclosed therein and except, with respect to unaudited Financial
Statements, for the absence of footnotes and normal year-end audit
adjustments) and present fairly in all material respects the financial
position of the Persons covered thereby as at the dates thereof and the
results of their operations and cash flows for the periods then ended.
(a) Financial Statements. The following Financial Statements
attached hereto as Disclosure Schedule (3.4(a)) have been delivered on the
date hereof:
(i) The audited consolidated balance sheets at December 31,
2001 and 2002 and the related statements of income and cash flows of Holdings
and its Subsidiaries for the Fiscal Years then ended, certified by
Pricewaterhouse Coopers LLP.
(ii) The unaudited balance sheet(s) at February 28, 2003 and
the related statement(s) of income and cash flows of Holdings and its
Subsidiaries for the Fiscal Month then ended.
36
(b) Pro Forma. The Pro Forma delivered on the date hereof and
attached hereto as Disclosure Schedule (3.4(b)) was prepared by Holdings
giving pro forma effect to the Related Transactions, was based on the
unaudited consolidated balance sheets of Holdings and its Subsidiaries dated
February 28, 2003, and was prepared in accordance with GAAP, with only such
adjustments thereto as would be required in accordance with GAAP.
(c) Projections. The Projections delivered on the date hereof and
attached hereto as Disclosure Schedule (3.4(c)) have been prepared by Holdings
in light of the past operations of their businesses, but including future
payments of known contingent liabilities reflected on the Fair Salable Balance
Sheet, and reflect projections for the three year period beginning on January
1, 2003 on a quarter-by-quarter basis for the first year and on a year-by-year
basis thereafter. The Projections are based upon estimates and assumptions
stated therein, all of which Borrowers believe to be reasonable and fair in
light of current conditions and current facts known to Borrowers and, as of
the Closing Date, reflect Borrowers' good faith and reasonable estimates of
the future financial performance of Borrowers and of the other information
projected therein for the period set forth therein.
(d) Fair Salable Balance Sheet. The Fair Salable Balance Sheet
delivered on the date hereof and attached hereto as Disclosure Schedule
(3.4(d)) was prepared by Holdings on the same basis as the Pro Forma, except
that Holdings' and Subsidiaries' assets are set forth therein at their fair
salable values on a going concern basis and the liabilities set forth therein
include all contingent liabilities of Holdings and its Subsidiaries stated at
the reasonably estimated present values thereof.
3.5 Material Adverse Effect. Between December 31, 2002 and the
Closing Date: (a) no Credit Party has incurred any obligations, contingent or
noncontingent liabilities, liabilities for Charges, long-term leases or
unusual forward or long-term commitments that are not reflected in the Pro
Forma and that, alone or in the aggregate, could reasonably be expected to
have a Material Adverse Effect, (b) no contract, lease or other agreement or
instrument has been entered into by any Credit Party or has become binding
upon any Credit Party's assets and no law or regulation applicable to any
Credit Party has been adopted that has had or could reasonably be expected to
have a Material Adverse Effect, and (c) no Credit Party is in default and to
the best of Borrowers' knowledge no third party is in default under any
material contract, lease or other agreement or instrument, that alone or in
the aggregate could reasonably be expected to have a Material Adverse Effect.
Between December 31, 2002 and the Closing Date no event has occurred, that
alone or together with other events, could reasonably be expected to have a
Material Adverse Effect.
3.6 Ownership of Property; Liens. As of the Closing Date, the real
estate ("Real Estate") listed in Disclosure Schedule (3.6) constitutes all of
the real property owned, leased, subleased, or used by any Credit Party.
Except as set forth in the title insurance policies accepted by Agent or
Canadian Agent, as applicable, each Credit Party owns good and marketable fee
simple title to all of its material owned Real Estate (including, without
limitation, the Mortgaged Properties), and valid and marketable leasehold
interests in all of its material leased Real Estate, all as described on
Disclosure Schedule (3.6), and copies of all such leases or a summary of terms
thereof reasonably satisfactory to Agent have been delivered to Agent and,
with respect to Real Estate leased by any Canadian Credit Party, Canadian
Agent. Disclosure
37
Schedule (3.6) further describes any Real Estate with respect to which any
Credit Party is a lessor, sublessor or assignor as of the Closing Date. Except
as set forth in the title insurance policies accepted by Agent or Canadian
Agent, as applicable, with respect to each of the Mortgages and, with respect
to personal property not included in the US Borrowing Base or the Canadian
Borrowing Base, immaterial defects in title, each Credit Party also has good
and marketable title to, or valid leasehold interests in, all of its material
personal property and assets (including, without limitation, all Eligible
Accounts and Eligible Inventory). As of the Closing Date, none of the
properties and assets of any Credit Party are subject to any Liens other than
Permitted Encumbrances, and there are no facts, circumstances or conditions
known to any Credit Party that may result in any Liens (including Liens
arising under Environmental Laws) other than Permitted Encumbrances. Except as
set forth in Disclosure Schedule (3.6) or in the title insurance policies
accepted by Agent or Canadian Agent, as applicable, with respect to each of
the Mortgages, each Credit Party has received all deeds, assignments, waivers,
consents, nondisturbance and attornment or similar agreements, bills of sale
and other documents, and has duly effected all recordings, filings and other
actions necessary to establish, protect and perfect such Credit Party's right,
title and interest in and to all such Real Estate and other properties and
assets. Disclosure Schedule (3.6) also describes any purchase options, rights
of first refusal or other similar contractual rights pertaining to any Real
Estate. As of the Closing Date, no portion of any Credit Party's Real Estate
has suffered any material damage by fire or other casualty loss that has not
heretofore been repaired and restored in all material respects to its original
condition or otherwise remedied. As of the Closing Date, all material permits
required to have been issued or appropriate to enable the Real Estate to be
lawfully occupied and used for all of the purposes for which it is currently
occupied and used have been lawfully issued and are in full force and effect.
3.7 Labor Matters. As of the Closing Date (a) no strikes or other
material labor disputes against any Credit Party are pending or, to any Credit
Party's knowledge, threatened; (b) hours worked by and payment made to
employees of each Credit Party comply in all material respects with the Fair
Labor Standards Act and each other federal, state, provincial, local or
foreign law applicable to such matters; (c) all payments due from any Credit
Party for employee health and welfare insurance have been paid or accrued as a
liability on the books of such Credit Party and each Credit Party has withheld
all employee withholdings and has made all employer contributions to be
withheld and made by it pursuant to applicable law on account of Canadian and,
if applicable, Quebec pension plans, Canadian employment insurance and
employee income taxes; (d) except as set forth in Disclosure Schedule (3.7),
no Credit Party is a party to or bound by any collective bargaining agreement,
management agreement, consulting agreement, employment agreement, bonus,
restricted stock, stock option, or stock appreciation plan or agreement or any
similar plan, agreement or arrangement (and true and complete copies of any
agreements (or, with respect to employment agreements for employees who are
not executive officers, copies of the templates for such employment
agreements) described on Disclosure Schedule (3.7) have been delivered to
Agent); (e) there is no organizing activity involving any Credit Party pending
or, to any Credit Party's knowledge, threatened by any labor union or group of
employees; (f) there are no representation proceedings pending or, to any
Credit Party's knowledge, threatened with the National Labor Relations Board
or any other applicable labor relations board, and no labor organization or
group of employees of any Credit Party has made a pending demand for
recognition; and (g) except as set forth in Disclosure Schedule (3.7), there
are no material complaints or charges against any Credit Party pending or,
38
to the knowledge of any Credit Party, threatened to be filed with any
Governmental Authority or arbitrator based on, arising out of, in connection
with, or otherwise relating to the employment or termination of employment by
any Credit Party of any individual.
3.8 Ventures, Subsidiaries and Affiliates; Outstanding Stock and
Indebtedness. Except as set forth in Disclosure Schedule (3.8), as of the
Closing Date, no Credit Party has any Subsidiaries, is engaged in any joint
venture or partnership with any other Person, or is an Affiliate of any other
Person. All of the issued and outstanding Stock of each Credit Party is owned
by each of the Stockholders and in the amounts set forth in Disclosure
Schedule (3.8). Except as set forth in Disclosure Schedule (3.8), there are no
outstanding rights to purchase, options, warrants or similar rights or
agreements pursuant to which any Credit Party may be required to issue, sell,
repurchase or redeem any of its Stock or other equity securities or any Stock
or other equity securities of its Subsidiaries. All outstanding Indebtedness
and Guaranteed Indebtedness of each Credit Party as of the Closing Date is
permitted by Section 6.3. None of the Credit Parties other than Borrowers has
any assets (except Stock of their Subsidiaries) or, except as set forth on
Disclosure Schedule (6.3), any Indebtedness or Guaranteed Indebtedness (except
the Obligations).
3.9 Government Regulation. No Credit Party is 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. No Credit Party is subject to regulation under
the Public Utility Holding Company Act of 1935, the Federal Power Act, or any
other United States or Canadian federal, provincial or state statute or law
that restricts or limits its ability to incur Indebtedness or to perform its
obligations hereunder. The making of the Loans by Lenders to Borrowers, the
incurrence of the Letter of Credit Obligations on behalf of Borrowers, the
application of the proceeds thereof and repayment thereof and the consummation
of the Related Transactions will not violate any provision of any such statute
or any rule, regulation or order issued by the Securities and Exchange
Commission or any other securities regulation authority or securities
exchange.
3.10 Margin Regulations. No Credit Party is engaged, nor will it
engage, principally or as one of its important activities, in the business of
extending credit for the purpose of "purchasing" or "carrying" any "margin
stock" as such terms are defined in Regulation U of the Federal Reserve Board
as now and from time to time hereafter in effect (such securities being
referred to herein as "Margin Stock"). No Credit Party owns any Margin Stock,
and none of the proceeds of the Loans or other extensions of credit under this
Agreement will be used, directly or indirectly, for the purpose of purchasing
or carrying any Margin Stock, for the purpose of reducing or retiring any
Indebtedness that was originally incurred to purchase or carry any Margin
Stock or for any other purpose that might cause any of the Loans or other
extensions of credit under this Agreement to be considered a "purpose credit"
within the meaning of Regulations T, U or X of the Federal Reserve Board. No
Credit Party will take or permit to be taken any action that might cause any
Loan Document to violate any regulation of the Federal Reserve Board.
3.11 Taxes. All tax returns, reports and statements, including
information returns, required by any Governmental Authority to be filed by any
Credit Party have been filed with the appropriate Governmental Authority and
all Taxes have been paid prior to the date on
39
which any fine, penalty, interest or late charge may be added thereto for
nonpayment thereof (or any such fine, penalty, interest, late charge or loss
has been paid), excluding Taxes or other amounts being contested in accordance
with Section 5.2(b). Proper and accurate amounts have been withheld by each
Credit Party from its respective employees for all periods in full and
complete compliance with all applicable United States and Canadian federal,
state, provincial, local laws and all applicable foreign laws and such
withholdings have been timely paid to the respective Governmental Authorities.
Disclosure Schedule (3.11) sets forth as of the Closing Date (i) those taxable
years (A) for which any Credit Party has received notice, in writing, that
such Credit Party's tax returns were to be audited, and (B) for which tax
returns are, as of the Closing Date, being audited by the IRS, CCRA or any
other applicable Governmental Authority, (ii) any assessments or threatened
assessments in connection with such audit, and (iii) those taxable years the
tax returns for which are otherwise currently outstanding. Except as described
in Disclosure Schedule (3.11), no Credit Party has executed or filed with the
IRS, CCRA or any other domestic or foreign Governmental Authority any
agreement or other document extending, or having the effect of extending, the
period for assessment or collection of any Taxes. Except as set forth on
Disclosure Schedule (3.11), none of the Credit Parties or any of their
respective predecessors are liable for any Taxes: (a) under any agreement
(including any tax sharing agreements) or (b) to each Credit Party's
knowledge, as a transferee. As of the Closing Date, no Credit Party has agreed
or been requested to make any adjustment under IRC Section 481(a) or any
comparable provision of the ITA, by reason of a change in accounting method or
otherwise, which would have a Material Adverse Effect.
3.12 ERISA, Canadian Pension and Benefit Plans.
(a) Except with respect to Multiemployer Plans, each Qualified Plan
has been determined by the IRS to qualify under Section 401 of the IRC, the
trusts created thereunder have been determined to be exempt from tax under the
provisions of Section 501 of the IRC, and nothing has occurred that would
cause the loss of such qualification or tax-exempt status, except for
qualification failures which, in the aggregate, could not reasonably be
expected to result in a Material Adverse Effect. Each Plan is in compliance
with the applicable provisions of ERISA and the IRC, including the timely
filing of all reports required under the IRC or ERISA, including the statement
required by 29 CFR Section 2520.104-23, except for such failures which, in the
aggregate, could not reasonably be likely to result in a Material Adverse
Effect. Neither any Credit Party nor ERISA Affiliate has failed to make any
contribution or pay any amount due as required by either Section 412 of the
IRC or Section 302 of ERISA or the terms of any such Plan, except for
contributions and amounts due which, in the aggregate, do not exceed $500,000.
As of the Closing Date, no Lien has been imposed against any Credit Party or
ERISA Affiliate under Section 412 of the IRC or Section 302 or 4068 of ERISA.
Neither any Credit Party nor ERISA Affiliate has engaged in a "prohibited
transaction," as defined in Section 406 of ERISA and Section 4975 of the IRC,
in connection with any Plan, that would subject any Credit Party to a material
tax on prohibited transactions imposed by Section 502(i) of ERISA or Section
4975 of the IRC, except for prohibited transactions or excise taxes which, in
the aggregate, could not reasonably be likely to result in a Material Adverse
Effect.
(b) Except as set forth in Disclosure Schedule (3.12) or as could
not reasonably be likely to result in a Material Adverse Effect: (i) no Title
IV Plan has any Unfunded Pension Liability; (ii) no ERISA Event or event
described in Section 4062(e) of ERISA with
40
respect to any Title IV Plan has occurred or is reasonably expected to occur;
(iii) there are no pending, or to the knowledge of any Credit Party,
threatened claims (other than claims for benefits in the normal course),
sanctions, actions or lawsuits, asserted or instituted against any Plan or any
Person as fiduciary or sponsor of any Plan; (iv) no Credit Party or ERISA
Affiliate has incurred or reasonably expects to incur any liability as a
result of a complete or partial withdrawal from a Multiemployer Plan; (v)
within the last five years no Title IV Plan of any Credit Party or ERISA
Affiliate has been terminated, whether or not in a "standard termination" as
that term is used in Section 4041(b)(1) of ERISA, nor has any Title IV Plan of
any Credit Party or any ERISA Affiliate (determined at any time within the
last five years) with Unfunded Pension Liabilities been transferred outside of
the "controlled group" (within the meaning of Section 4001(a)(14) of ERISA) of
any Credit Party or ERISA Affiliate (determined at such time); (vi) except in
the case of any ESOP, Stock of all Credit Parties and their ERISA Affiliates
makes up, in the aggregate, no more than 10% of fair market value of the
assets of any Plan measured on the basis of fair market value as of the latest
valuation date of any Plan; and (vii) no liability under any Title IV Plan has
been satisfied with the purchase of a contract from an insurance company that
is not rated AAA by the Standard & Poor's Corporation or an equivalent rating
by another nationally recognized rating agency.
(c) Disclosure Schedule (3.12) lists all Canadian Benefit Plans and
Canadian Pension Plans. All Canadian Benefit Plans (other than, for greater
certainty, universal plans created by and to which any Credit Party is
obligated to contribute by statute) and Canadian Pension Plans adopted by any
Credit Party have been made available to Agent and Canadian Agent. The
Canadian Pension Plans are duly registered under the ITA and all other
applicable laws which require registration and no event has occurred which is
reasonably likely to cause the loss of such registered status. All material
obligations of any Credit Party (including fiduciary, funding, investment and
administration obligations) required to be performed in connection with the
Canadian Pension Plans and the funding agreements therefor have been performed
in a timely fashion. There have been no improper withdrawals or applications
of the assets of the Canadian Pension Plans or the Canadian Benefit Plans.
There are no outstanding disputes concerning the assets of the Canadian
Pension Plans or the Canadian Benefit Plans. Each of the Canadian Pension
Plans is fully funded on a solvency basis (using actuarial methods and
assumptions which are consistent with the valuations last filed with the
applicable Governmental Authorities and which are consistent with generally
accepted actuarial principles). No Canadian Credit Party employs any employees
outside of Canada.
3.13 No Litigation. No action, claim, lawsuit, demand, investigation
or proceeding is now pending or, to the knowledge of any Credit Party,
threatened against any Credit Party, before any Governmental Authority or
before any arbitrator or panel of arbitrators (collectively, "Litigation"),
(a) that challenges any Credit Party's right or power to enter into or perform
any of its obligations under the Loan Documents to which it is a party, or the
validity or enforceability of any Loan Document or any action taken
thereunder, or (b) that has a reasonable risk of being determined adversely to
any Credit Party and that , if so determined, could be reasonably be expected
to have a Material Adverse Effect. Except as set forth on Disclosure Schedule
(3.13), as of the Closing Date there is no Litigation pending or, to any
Credit Party's knowledge, threatened, that could reasonably be likely to
result in damages in excess of $1,000,000 (net of insurance coverages for such
damages) or injunctive relief against, or alleges criminal misconduct of, any
Credit Party.
41
3.14 Brokers. No broker or finder brought about the obtaining,
making or closing of the Loans or the Related Transactions, and no Credit
Party or Affiliate thereof has any obligation to any Person in respect of any
finder's or brokerage fees in connection therewith.
3.15 Intellectual Property. As of the Closing Date, each Credit
Party owns or has rights to use all Intellectual Property necessary to
continue to conduct its business as now or heretofore conducted by it or
proposed to be conducted by it, and each Patent, Trademark, Design, Copyright
and License is listed, together with application or registration numbers, as
applicable, in Disclosure Schedule (3.15). Each Credit Party conducts its
business and affairs without infringement of or interference with any
Intellectual Property of any other Person in any material respect. Except as
set forth in Disclosure Schedule (3.15), no Credit Party is aware of any
material infringement claim by any other Person with respect to any
Intellectual Property.
3.16 Full Disclosure. No information contained in this Agreement,
any of the other Loan Documents, any Projections, Financial Statements or
Collateral Reports or other written reports from time to time delivered
hereunder or any written statement furnished by or on behalf of any Credit
Party to Agent, Canadian Agent, or any Lender pursuant to the terms of this
Agreement contains or will contain any untrue statement of a material fact or
omits or will omit to state a material fact necessary to make the statements
contained herein or therein not misleading in light of the circumstances under
which they were made. The Liens granted to Agent, Collateral Agent and
Canadian Agent pursuant to the Collateral Documents will at all times be fully
perfected first priority Liens in and to the Collateral described therein,
subject, as to priority, only to Permitted Encumbrances.
3.17 Environmental Matters.
(a) Except as set forth in Disclosure Schedule (3.17), as of the
Closing Date: (i) the Real Estate is free of contamination from any Hazardous
Material except for such contamination that would not adversely impact the
value or marketability of such Real Estate and except for such contamination
that would not result in Environmental Liabilities that could reasonably be
expected to exceed $2,500,000; (ii) no Credit Party has caused to occur any
Release of Hazardous Materials on, at, in, under, above, to, from or about any
of its Real Estate for such Release that would not result in Environmental
Liabilities that could reasonably be expected to exceed $2,500,000; (iii) the
Credit Parties are and have been in compliance with all Environmental Laws,
except for such noncompliance that would not result in Environmental
Liabilities which could reasonably be expected to exceed $2,500,000; (iv) the
Credit Parties (A) have obtained, (B) possess as valid, uncontested and in
good standing, and (C) are in compliance with all Environmental Permits
required by Environmental Laws for the operations of their respective
businesses as presently conducted or as proposed to be conducted, except where
the failure to so obtain, possess or comply with such Environmental Permits
would not result in Environmental Liabilities that could reasonably be
expected to exceed $2,500,000; (v) to the knowledge of any Credit Party, no
Credit Party is involved in operations nor are there any facts, circumstances
or conditions, including any Releases of Hazardous Materials, and no Credit
Party has permitted any current or former tenant or occupant of the Real
Estate to engage in any such operations, any of which are likely to result in
any Environmental Liabilities of such Credit Party which could reasonably be
expected to exceed $2,500,000; (vi) there is no Litigation arising under or
related to any Environmental Laws or Environmental Permits or otherwise
relating to
42
the release of or exposure to Hazardous Material that seeks damages,
penalties, fines, costs or expenses in excess of $1,000,000 or injunctive
relief against, or that alleges criminal misconduct by, any Credit Party;
(vii) no written notice has been received by any Credit Party identifying it
as a "potentially responsible party" or requesting information under CERCLA or
analogous state statutes or Canadian federal or provincial statutes; and
(viii) to the Credit Parties' knowledge, the Credit Parties have provided to
Agent and, with respect to Real Estate located in Canada, Canadian Agent
copies of all existing Phase I or Phase II environmental reports or their
equivalent, corrective action work plans or reports, on the most recent
environmental compliance audits, in each case relating to and in the
possession of any Credit Party.
(b) Each Credit Party hereby acknowledges and agrees that neither
Agent nor Canadian Agent (i) is now, or has ever been, in control of any of
the Real Estate or any Credit Party's affairs, and (ii) has the capacity
through the provisions of the Loan Documents or otherwise to influence any
Credit Party's conduct with respect to the ownership, operation or management
of any of its Real Estate or compliance with Environmental Laws or
Environmental Permits.
3.18 Insurance. Disclosure Schedule (3.18) lists all insurance
policies of any nature maintained, as of the Closing Date, for current
occurrences by each Credit Party, as well as a summary of the terms of each
such policy.
3.19 Deposit and Disbursement Accounts. Disclosure Schedule (3.19)
lists all banks and other financial institutions at which any Credit Party
maintains deposit or other accounts as of the Closing Date, including any
Disbursement Accounts, and such Schedule correctly identifies the name,
address and telephone number of each depository, the name in which the account
is held, a description of the purpose of the account, and the complete account
number therefor.
3.20 Government Contracts. Except as set forth in Disclosure
Schedule (3.20), as of the Closing Date, no Credit Party is a party to any
contract or agreement in excess of $100,000 with any Governmental Authority
and no Credit Party's Accounts are subject to the Federal Assignment of Claims
Act (31 U.S.C. Section 3727), the Financial Administration Act (Canada) or any
similar United States or Canadian state, provincial or local law.
3.21 Customer and Trade Relations. As of the Closing Date, except as
disclosed on Disclosure Schedule (3.21), there exists no actual or, to the
actual knowledge of any Credit Party, threatened termination or cancellation
of, or any material adverse modification or change in the business
relationship of any Credit Party with any customer or group of customers whose
purchases during the preceding 12 months caused them to be ranked among the
ten largest customers of such Credit Party or the business relationship of any
Credit Party with any supplier material to its operations.
3.22 Agreements and Other Documents. As of the Closing Date, each
Credit Party has provided to Agent, Canadian Agent or their counsel accurate
and complete copies (or summaries) of all of the following agreements or
documents to which it is subject and each of which is listed in Disclosure
Schedule (3.22): supply agreements and purchase agreements not terminable by
such Credit Party within 60 days following written notice issued by such
Credit
43
Party and involving transactions in excess of $5,000,000 per annum; leases of
Equipment having a remaining term of one year or longer and requiring
aggregate rental and other payments in excess of $1,000,000 per annum;
licenses and permits held by the Credit Parties, the absence of which could be
reasonably likely to have a Material Adverse Effect; instruments and documents
evidencing any Indebtedness or Guaranteed Indebtedness of such Credit Party
and any Lien granted by such Credit Party with respect thereto; and
instruments and agreements evidencing the issuance of any equity securities,
warrants, rights or options to purchase equity securities of such Credit
Party.
3.23 Solvency. Both before and after giving effect to (a) the Loans
and Letter of Credit Obligations to be made or incurred on the Closing Date or
such other date as Loans and Letter of Credit Obligations requested hereunder
are made or incurred, (b) the disbursement of the proceeds of such Loans
pursuant to the instructions of Borrower Representative; (c) the Refinancing
and the consummation of the other Related Transactions; and (d) the payment
and accrual of all transaction costs in connection with the foregoing,
Holdings and its Subsidiaries are and will be Solvent.
3.24 Status of Holdings. Prior to the Closing Date, Holdings will
not have engaged in any business other than holding the Stock of Xxxxxx, Inc.
and the issuance of securities to its shareholders or, except as disclosed on
Disclosure Schedule (6.3) incurred any Indebtedness or any other liabilities
(except in connection with its corporate formation, the Related Transactions
Documents and this Agreement).
3.25 Subordinated Debt. As of the Closing Date, Borrowers have
delivered to Agent a complete and correct copy of the Existing Subordinated
Notes (including all schedules, exhibits, amendments, supplements,
modifications, assignments and all other documents delivered pursuant thereto
or in connection therewith). The subordination provisions of the Existing
Subordinated Notes are enforceable against the holders of the Existing
Subordinated Notes by Agent, Canadian Agent and Lenders. All Obligations,
including the Letter of Credit Obligations, constitute senior Indebtedness
entitled to the benefits of the subordination provisions contained in the
Existing Subordinated Notes. Borrowers acknowledge that Agent, Canadian Agent
and each Lender are entering into this Agreement and are extending the
Commitments in reliance upon the subordination provisions of the Existing
Subordinated Notes and this Section 3.25.
3.26 Senior Debt. Credit Parties hereby represent and warrant to
Agent, Canadian Agent and Lenders, and hereby declare that, the Obligations
constitute "Senior Debt" and "Designated Senior Debt" under the Existing
Subordinated Notes Documents and that this Agreement constitutes the "New
Credit Facilities" under the Existing Subordinated Notes Documents.
4. FINANCIAL STATEMENTS AND INFORMATION
4.1 Reports and Notices.
(a) Each Credit Party executing this Agreement hereby agrees that
from and after the Closing Date and until the Termination Date, it shall
deliver to Agent, Canadian Agent
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or to Agent, Canadian Agent and Lenders, as required, the Financial
Statements, notices, Projections and other information at the times, to the
Persons and in the manner set forth in Annex E.
(b) Each Credit Party executing this Agreement hereby agrees that,
from and after the Closing Date and until the Termination Date, it shall
deliver to Agent and Canadian Agent or to Agent, Canadian Agent and Lenders,
as required, the various Collateral Reports (including Borrowing Base
Certificates in the form of Exhibit 4.1(b)) at the times, to the Persons and
in the manner set forth in Annex F.
4.2 Communication with Accountants. Each Credit Party executing this
Agreement authorizes (a) each of Agent and Canadian Agent and, together with
Agent or Canadian Agent, any Lender and (b) so long as an Event of Default has
occurred and is continuing, each Lender, to communicate directly with such
Credit Party's independent certified or chartered public accountants,
including Pricewaterhouse Coopers LLP, and authorizes and, at Agent's or
Canadian Agent's request, such Credit Party shall instruct those accountants
and advisors to disclose and make available to Agent, Canadian Agent and each
Lender any and all Financial Statements and other supporting financial
documents, schedules and information relating to any Credit Party (including
copies of any issued management letters) with respect to the business,
financial condition and other affairs of any Credit Party; provided, however,
that Agent or Canadian Agent, as applicable, will endeavor to notify Borrowers
of any communication with such accountants at any time that no Default or
Event of Default exists.
5. AFFIRMATIVE COVENANTS
Each Credit Party executing this Credit Agreement jointly and
severally agrees as to all Credit Parties that from and after the date hereof
and until the Termination Date:
5.1 Maintenance of Existence and Conduct of Business. Each Credit
Party shall: do or cause to be done all things necessary to preserve and keep
in full force and effect its corporate existence and its rights and
franchises; continue to conduct its business substantially as now conducted or
as otherwise permitted hereunder; at all times maintain, preserve and protect
all of its assets and properties used or useful in the conduct of its
business, and keep the same in good repair, working order and condition in all
material respects (taking into consideration ordinary wear and tear) and from
time to time make, or cause to be made, all necessary or appropriate repairs,
replacements and improvements thereto consistent with industry practices; and
transact business only in such corporate and trade names as are set forth in
Disclosure Schedule (5.1) or in such other trade names as shall be disclosed
to Agent in writing from time to time.
5.2 Payment of Charges.
(a) Subject to Section 5.2(b), each Credit Party shall pay and
discharge or cause to be paid and discharged promptly all Charges (other than
charges in an aggregate amount not to exceed $500,000 the non-payment of which
could not reasonably be expected to result in a Material Adverse Effect)
payable by it, including (i) Charges imposed upon it, its income and profits,
or any of its property (real, personal or mixed) and all Charges with respect
to tax, social
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security, Canadian employment insurance employee withholdings and employer
premiums, Canadian and Quebec pension plan employee withholdings, employer
contributions and unemployment withholding with respect to its employees, (ii)
lawful claims for labor, materials, supplies and services or otherwise, and
(iii) all storage or rental charges payable to warehousemen or bailees, in
each case, before any thereof shall become past due.
(b) Each Credit Party may in good faith contest, by appropriate
proceedings, the validity or amount of any Charges, Taxes or claims described
in Section 5.2(a); provided, that (i) adequate reserves with respect to such
contest are maintained on the books of such Credit Party, in accordance with
GAAP; (ii) no Lien shall be imposed to secure payment of such Charges (other
than payments to warehousemen and/or bailees) that is superior to any of the
Liens securing the Obligations and such contest is maintained and prosecuted
continuously and with diligence and operates to suspend collection or
enforcement of such Charges; (iii) none of the Collateral becomes subject to
forfeiture or loss as a result of such contest; (iv) such Credit Party shall
promptly pay or discharge such contested Charges, Taxes or claims and all
additional charges, interest, penalties and expenses, if any, and shall
deliver to Agent and Canadian Agent evidence reasonably acceptable to Agent
and Canadian Agent of such compliance, payment or discharge, if such contest
is terminated or discontinued adversely to such Credit Party or the conditions
set forth in this Section 5.2(b) are no longer met; and (v) Agent and Canadian
Agent have not advised Borrowers in writing that Agent and Canadian Agent
reasonably believe that nonpayment or nondischarge thereof could have or
result in a Material Adverse Effect.
5.3 Books and Records. Each Credit Party shall keep adequate books
and records with respect to its business activities in which proper entries,
reflecting all financial transactions, are made in accordance with GAAP and on
a basis consistent with the Financial Statements attached as Disclosure
Schedule (3.4(a)).
5.4 Insurance; Damage to or Destruction of Collateral.
(a) The Credit Parties shall, at their sole cost and expense,
maintain the policies of insurance described on Disclosure Schedule (3.18) as
in effect on the date hereof or otherwise in form and amounts and with
insurers reasonably acceptable to Agent and, with respect to Canadian Credit
Parties, Canadian Agent. Such policies of insurance (or the loss payable and
additional insured endorsements delivered to Agent, with respect to US Credit
Parties, or Canadian Agent, with respect to Canadian Credit Parties) shall
contain provisions pursuant to which the insurer agrees to provide 30 days
prior written notice to Agent and, with respect to the Canadian Credit
Parties, Canadian Agent in the event of any non-renewal, cancellation or
amendment of any such insurance policy. If any Credit Party at any time or
times hereafter shall fail to obtain or maintain any of the policies of
insurance required above, or to pay all premiums relating thereto, Agent, with
respect to any US Credit Parties, or Canadian Agent, with respect to any
Canadian Credit Parties, may at any time or times thereafter obtain and
maintain such policies of insurance and pay such premiums and take any other
action with respect thereto that Agent or Canadian Agent, as applicable, deems
advisable. Neither Agent nor Canadian Agent shall have any obligation to
obtain insurance for any Credit Party or pay any premiums therefor. By doing
so, neither Agent nor Canadian Agent shall be deemed to have waived any
Default or Event of Default arising from any Credit Party's failure to
maintain such insurance or pay any premiums therefor. All sums so disbursed,
including reasonable attorneys'
46
fees, court costs and other charges related thereto, shall be payable on
demand by US Borrowers to Agent, with respect to amounts owed to Agent, or by
Canadian Borrower to Canadian Agent, with respect to amounts owed to Canadian
Agent and shall be additional Obligations hereunder secured by the Collateral.
(b) Agent and, with respect to any Canadian Credit Party, Canadian
Agent reserves the right at any time upon any change in any Credit Party's
risk profile (including any change in the product mix maintained by any Credit
Party or any laws affecting the potential liability of such Credit Party) to
require additional forms and limits of insurance to, in Agent's or Canadian
Agent's opinion, adequately protect Agent's, Canadian Agent's and Lenders'
interests in all or any portion of the Collateral and to ensure that each
Credit Party is protected by insurance in amounts and with coverage customary
for its industry. If reasonably requested by Agent or Canadian Agent, each
Credit Party shall deliver to Agent or Canadian Agent, as applicable, from
time to time a report of a reputable insurance broker, reasonably satisfactory
to Agent or Canadian Agent, as applicable, with respect to its insurance
policies.
(c) Each Credit Party shall deliver to Agent, with respect to US
Credit Parties, or Canadian Agent, with respect to Canadian Credit Parties, in
form and substance reasonably satisfactory to Agent and Canadian Agent,
endorsements to (i) all "All Risk" and business interruption insurance naming
Agent or Canadian Agent, as applicable, as loss payee and, with respect to
Canadian Credit Parties, containing the standard mortgage clause approved by
the Insurance Bureau of Canada, and (ii) all general liability and other
liability policies naming Agent or Canadian Agent, as applicable, as
additional insured. Each US Credit Party irrevocably makes, constitutes and
appoints Agent (and all officers, employees or agents designated by Agent) and
each Canadian Credit Party irrevocably makes, constitutes and appoints
Canadian Agent (and all officers, employees or agents designated by Canadian
Agent), so long as any Default or Event of Default has occurred and is
continuing or the anticipated insurance proceeds exceed $2,000,000, as such
Credit Party's true and lawful agent and attorney-in-fact for the purpose of
making, settling and adjusting claims under such "All Risk" policies of
insurance, endorsing the name of such Credit Party on any check or other item
of payment for the proceeds of such "All Risk" policies of insurance and for
making all determinations and decisions with respect to such "All Risk"
policies of insurance. Neither Agent nor Canadian Agent shall have any duty to
exercise any rights or powers granted to it pursuant to the foregoing
power-of-attorney. Borrower Representative shall promptly notify Agent and
Canadian Agent of any loss, damage, or destruction to the Collateral in the
amount of $2,000,000 or more, whether or not covered by insurance. After
deducting from such proceeds the expenses, if any, incurred by Agent and
Canadian Agent in the collection or handling thereof, Agent and Canadian Agent
may, at their option, apply such proceeds to the reduction of the Obligations
in accordance with Section 1.3(d) or permit or require the applicable Credit
Party to use such money, or any part thereof, to replace, repair, restore or
rebuild the Collateral in a diligent and expeditious manner with materials and
workmanship of substantially the same quality as existed before the loss,
damage or destruction. Notwithstanding the foregoing, so long as no Default or
Event of Default has occurred and is continuing, if the casualty giving rise
to such insurance proceeds could not reasonably be expected to have a Material
Adverse Effect and such insurance proceeds do not exceed $10,000,000 in the
aggregate or, to the extent that the proceeds from a sale of such assets would
have been deemed Excluded Proceeds had such assets been disposed of prior to
the loss, Agent and Canadian Agent shall permit the applicable Credit Party to
replace, restore, repair or
47
rebuild the property; provided that if such Credit Party shall not have
completed or entered into binding agreements to complete such replacement,
restoration, repair or rebuilding within 365 days of such casualty, Agent and
Canadian Agent may apply such insurance proceeds to the Obligations in
accordance with Section 1.3(d). All insurance proceeds that are to be made
available to US Borrowers to replace, repair, restore or rebuild the
Collateral shall be applied by Agent to reduce the outstanding principal
balance of the US Revolving Loan (which application shall not result in a
permanent reduction of the US Revolving Loan Commitment) and upon such
application, Agent shall establish a Reserve against the US Borrowing Base in
an amount equal to the amount of such proceeds so applied. All insurance
proceeds that are to be made available to Canadian Borrower to replace,
repair, restore or rebuild the Canadian Collateral shall be applied by
Canadian Agent to reduce the outstanding principal balance of the Canadian
Revolving Loan (which application shall not result in a permanent reduction of
the Canadian Revolving Loan Commitment) and upon such application, Agent shall
establish a Canadian Reserve against the Canadian Borrowing Base in an amount
equal to the amount of such proceeds so applied. All insurance proceeds made
available to any Credit Party that is not a Borrower to replace, repair,
restore or rebuild Collateral shall be deposited in a cash collateral account.
Thereafter, (A) with respect to insurance proceeds of US Credit Parties, such
funds shall be made available to US Borrowers or other US Credit Parties, as
applicable, to provide funds to replace, repair, restore or rebuild the
Collateral as follows: (i) Borrower Representative shall request a US
Revolving Credit Advance to be made to US Borrowers or a release from the cash
collateral account to be made to US Credit Parties in the amount requested to
be released; (ii) so long as the conditions set forth in Section 2.2 have been
met, A Loan Lenders shall make such US Revolving Credit Advance or, so long as
no Default or Event of Default has occurred and is continuing, Agent shall
release funds from the cash collateral account; and (iii) in the case of
insurance proceeds applied against the US Revolving Loan, the Reserve
established with respect to such insurance proceeds shall be reduced by the
amount of such US Revolving Credit Advance or (B) with respect to insurance
proceeds of Canadian Credit Parties, such funds shall be made available to
Canadian Borrower or other Canadian Credit Parties, as applicable, to provide
funds to replace, repair, restore or rebuild the Canadian Collateral as
follows: (i) Borrower Representative shall request a Canadian Revolving Credit
Advance to be made to Canadian Borrower or a release from the cash collateral
account to be made to Canadian Credit Parties in the amount requested to be
released; (ii) so long as the conditions set forth in Section 2.2 have been
met, Canadian Lenders shall make such Canadian Revolving Credit Advance or, so
long as no Default or Event of Default has occurred and is continuing,
Canadian Agent shall release funds from the cash collateral account; and (iii)
in the case of insurance proceeds applied against the Canadian Revolving Loan,
the Canadian Reserve established with respect to such insurance proceeds shall
be reduced by the amount of such Canadian Revolving Credit Advance. To the
extent not used to replace, repair, restore or rebuild the Collateral, such
insurance proceeds shall be applied in accordance with Section 1.3(d).
5.5 Compliance with Laws. (a) Each Credit Party shall comply with
all United Stated and Canadian federal, state, provincial and local laws,
regulations and decrees and all foreign laws, regulations and decrees, in each
case, applicable to it, including those relating to ERISA, employment and
labor matters and Environmental Laws and Environmental Permits, except to the
extent that the failure to comply, individually or in the aggregate, could not
reasonably be expected to have a Material Adverse Effect.
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(b) For each existing Canadian Pension Plan, each Credit Party shall
ensure that such plan retains its registered status under and is administered
in a timely manner in all material respects in accordance with the applicable
pension plan text, funding agreement, the ITA and all other applicable laws.
For each Canadian Pension Plan hereafter adopted by any Credit Party which is
required to be registered under the ITA or any other applicable laws, such
Credit Party shall use its best efforts to seek and receive confirmation in
writing from the applicable Governmental Authorities to the effect that such
plan is registered under the ITA and such other applicable laws. For each
existing Canadian Pension Plan and Canadian Benefit Plan hereafter adopted,
each Credit Party shall in a timely fashion perform in all material respects
all obligations (including fiduciary, funding, investment and administration
obligations) required to be performed in connection with such plan and the
funding media therefor. Each Credit Party shall deliver to Canadian Agent if
requested by Requisite Lenders, promptly after the filing thereof by any
Credit Party with any applicable Governmental Authority, copies of each annual
and other return, report or valuation with respect to each Canadian Pension
Plan; promptly after receipt thereof, a copy of any direction, order, notice,
ruling or opinion that any Credit Party may receive from any applicable
Governmental Authority with respect to any Canadian Pension Plan; and
notification within 30 days of any increases having a cost to any Credit Party
in excess of $250,000 per annum, in the benefits of any existing Canadian
Pension Plan or Canadian Benefit Plan, or the establishment of any new
Canadian Pension Plan or Canadian Benefit Plan, or the commencement of
contributions to any such plan to which such Credit Party was not previously
contributing.
5.6 Supplemental Disclosure. From time to time as may be reasonably
requested by Agent (which request will not be made prior to the second
anniversary of the Closing Date or more than once during the term of this
Agreement, in each case, absent the occurrence and continuance of a Default or
an Event of Default), the Credit Parties shall supplement each Disclosure
Schedule hereto, or any representation herein or in any other Loan Document,
with respect to any matter hereafter arising that, if existing or occurring at
the date of this Agreement, would have been required to be set forth or
described in such Disclosure Schedule or as an exception to such
representation or that is necessary to correct any information in such
Disclosure Schedule or representation which has been rendered inaccurate
thereby (and, in the case of any supplements to any Disclosure Schedule, such
Disclosure Schedule shall be appropriately marked to show the changes made
therein); provided that (a) no such supplement to any such Disclosure Schedule
or representation shall amend, supplement or otherwise modify any Disclosure
Schedule or representation, or be or be deemed a waiver of any Default or
Event of Default resulting from the matters disclosed therein, except as
consented to by Agent and Requisite Lenders in writing, and (b) no supplement
shall be required or permitted as to representations and warranties that
relate solely to the Closing Date.
5.7 Intellectual Property. Each Credit Party will conduct its
business and affairs without infringement of or interference with any
Intellectual Property of any other Person in any material respect.
5.8 Environmental Matters. Each Credit Party shall and shall cause
each Person within its control to: (a) conduct its operations and keep and
maintain its Real Estate in compliance with all Environmental Laws and
Environmental Permits other than noncompliance that could not reasonably be
expected to have a Material Adverse Effect; (b) implement any and
49
all investigation, remediation, removal and response actions that are
appropriate or necessary to comply with Environmental Laws and Environmental
Permits pertaining to the presence, generation, treatment, storage, use,
disposal, transportation or Release of any Hazardous Material on, at, in,
under, above, to, from or about any of its Real Estate; provided, that no
Credit Party shall be required to undertake such actions to the extent that
its obligations to do so are being contested in good faith and by proper
proceedings and adequate reserves therefor have been established in accordance
with GAAP; (c) notify Agent and, with respect to violations by any Canadian
Credit Party, Canadian Agent, promptly after such Credit Party becomes aware
of any violation of Environmental Laws or Environmental Permits, or any
Release on, at, in, under, above, to, from or about any Real Estate, that is
reasonably likely to result in Environmental Liabilities in excess of
$250,000; and (d) promptly forward to Agent and, with respect to any Canadian
Credit Party, Canadian Agent a copy of any written order, notice, request for
information or any other written communication or report received by such
Credit Party in connection with any violation or Release which is the subject
of subpart 5.8(c) above, in each case whether or not the Environmental
Protection Agency or any Governmental Authority has taken or threatened any
action in connection with any such violation or Release. If Agent at any time
has a reasonable basis to believe that there may be a violation of any
Environmental Laws or Environmental Permits by any Credit Party or any
Environmental Liability arising thereunder, or a Release of Hazardous
Materials on, at, in, under, above, to, from or about any of its Real Estate,
that, in each case, is in breach of Section 3.17 or Section 5.8 and could
reasonably be expected to have a Material Adverse Effect, then (i) the
relevant Credit Party shall, upon Agent's written request, cause the
performance of such environmental audits including reasonable subsurface
sampling of soil and groundwater, and preparation of such environmental
reports, at Borrowers' expense, as Agent may from time to time reasonably
request, which shall be conducted by reputable environmental consulting firms
reasonably acceptable to Agent and shall be in form and substance reasonably
acceptable to Agent and (ii) if, upon Agent's reasonable request, the relevant
Credit Party shall fail to take reasonable steps to commence such audits
within 30 days of such request the relevant Credit Party shall permit Agent or
its representatives to have access to all Real Estate for the purpose of
conducting such environmental audits and testing reasonably appropriate,
including subsurface sampling of soil and groundwater; provided, that (x)
Agent use a reputable environmental consulting firm reasonably acceptable to
the Credit Party, (y) such firm carry appropriate levels of insurance and (z)
such audit not unreasonably interfere with the Credit Party's operations.
Borrowers shall reimburse Agent for the reasonable costs of such audits and
tests and the same will constitute a part of the Obligations secured
hereunder.
5.9 Landlords' Agreements, Mortgagee Agreements, Bailee Letters and
Real Estate Purchases. Each Credit Party shall use commercially reasonable
efforts to obtain a landlord's agreement, mortgagee agreement or bailee
letter, as applicable, from the lessor of each leased property, mortgagee of
owned property or bailee with respect to any warehouse, processor or converter
facility or other location where Collateral is stored or located, which
agreement or letter shall contain a waiver or subordination of all Liens or
claims that the landlord, mortgagee or bailee may assert against the
Collateral at that location, and shall otherwise be reasonably satisfactory in
form and substance to Agent. With respect to such locations or warehouse space
leased or owned as of the Closing Date and thereafter, if Agent or, with
respect to Real Estate of a Canadian Credit Party, Canadian Agent has not
received a landlord or mortgagee agreement or bailee letter as of the Closing
Date (or, if later, as of the date such location is acquired or leased),
50
any Borrower's Eligible Inventory at that location shall, in Agent's
discretion, be excluded from the US Borrowing Base or the Canadian Borrowing
Base, as applicable, or be subject to such Reserves or Canadian Reserves, as
applicable, as may be established by Agent in its reasonable credit judgment.
After the Closing Date, no real property or warehouse space shall be leased by
any Credit Party and no Inventory shall be shipped to a processor or converter
under arrangements established after the Closing Date without the prior
written consent of Agent (which consent, in Agent's discretion, may be
conditioned upon the exclusion from the US Borrowing Base or Canadian
Borrowing Base of Eligible Inventory at that location or the establishment of
Reserves or Canadian Reserves acceptable to Agent) or, unless and until a
reasonably satisfactory landlord agreement or bailee letter, as appropriate,
shall first have been obtained with respect to such location. Each Credit
Party shall timely and fully pay and perform its material obligations under
all leases and other agreements with respect to each leased location or public
warehouse where any Collateral is or may be located. To the extent otherwise
permitted hereunder, if any Credit Party proposes to acquire a fee ownership
interest in Real Estate after the Closing Date, it shall first provide to
Agent or, with respect to Real Estate of a Canadian Credit Party, Canadian
Agent a mortgage, debenture or deed of trust granting Agent or Canadian Agent,
as applicable, a first priority Lien on such Real Estate, together with
environmental audits, mortgage title insurance commitment, real property
survey, local counsel opinion(s), and, if required by Agent or Canadian Agent,
supplemental casualty insurance and flood insurance, and such other documents,
instruments or agreements reasonably requested by Agent, in each case, in form
and substance reasonably satisfactory to Agent or Canadian Agent, as
applicable.
5.10 Further Assurances. Each Credit Party executing this Agreement
agrees that it shall and shall cause each other Credit Party to, at such
Credit Party's expense and upon request of Agent or Canadian Agent, duly
execute and deliver, or cause to be duly executed and delivered, to Agent or
Canadian Agent, as applicable, such further instruments and do and cause to be
done such further acts as may be necessary or proper in the reasonable opinion
of Agent or Canadian Agent to carry out more effectively the provisions and
purposes of this Agreement or any other Loan Document.
5.11 Canadian Pension and Benefit Plans. (a) For each existing
Canadian Pension Plan of any Credit Party, such Credit Party shall ensure that
such plan retains its registered status under and is administered in a timely
manner in all material respects in accordance with the applicable pension plan
text, funding agreement, the ITA and all other applicable laws.
(b) For each Canadian Pension Plan hereafter adopted by any Credit
Party that is required to be registered under the ITA or any other applicable
laws, that Credit Party shall use its best efforts to seek and receive
confirmation in writing from the applicable Governmental Authorities to the
effect that such plan is unconditionally registered under the ITA and such
other applicable laws.
(c) For each existing and hereafter adopted Canadian Pension Plan
and Canadian Benefit Plan of any Credit Party, such Credit Party shall in a
timely fashion perform in all material respects all obligations (including
fiduciary, funding, investment and administration
51
obligations) required to be performed in connection with such plan and the
funding media therefor.
(d) Each Credit Party shall deliver to Agent and Canadian Agent if
requested by Agent or Canadian Agent, promptly after the filing thereof by
such Credit Party with any applicable Governmental Authority, (i) copies of
each annual and other return, report or valuation with respect to each
Canadian Pension Plan of such Credit Party; (ii) promptly after receipt
thereof, a copy of any direction, order, notice, ruling or opinion that such
Credit Party may receive from any applicable Governmental Authority with
respect to any Canadian Pension Plan of such Credit Party; and (iii)
notification within 30 days of any increases having a cost to such Credit
Party in excess of $250,000 per annum, in the benefits of any existing
Canadian Pension Plan or Canadian Benefit Plan, or the establishment of any
new Canadian Pension Plan or Canadian Benefit Plan, or the commencement of
contributions to any such plan to which such Credit Party was not previously
contributing.
5.12 Minimum Excess Availability. Borrowers shall at all times
maintain Excess Availability of at least $5,000,000.
5.13 New Subsidiaries. At the time of the formation of any
Subsidiary of any Credit Party or a Subsidiary of any Credit Party pursuant to
Section 6.1(a), Credit Parties, or any of them, as appropriate, shall (a)
cause each such new United States domestic Subsidiary and each such new
Canadian Subsidiary to join this Agreement by providing to Agent a joinder
agreement in the form of Exhibit 5.13 hereto (a "Credit Agreement Joinder
Agreement"), (b) cause each such new United States domestic Subsidiary to
deliver to Agent a supplement to the US Guaranty, a supplement to the US
Security Agreement, a supplement to the Shared Pledge Agreement, a supplement
to the Collateral Agency Agreement and such other security documents
(including, without limitation, any mortgage, deed to secure debt or deed of
trust where such Subsidiary owns real property) requested by Agent in its
discretion, together with appropriate UCC-1 financing statements, all in form
and substance satisfactory to Agent, (c) cause each such new Canadian
Subsidiary to deliver to Agent a Canadian Guaranty substantially in the form
of the Canadian Guaranty dated as of the Closing Date, a Canadian Security
Agreement substantially in the form of the Canadian Security Agreement dated
as of the Closing Date and such other security documents (including, without
limitation, any mortgage, debenture or deed of trust where such new Subsidiary
owns real property) requested by Agent or Canadian Agent in its discretion,
together with appropriate filings of financing statements under the PPSA or
other applicable personal property or movable property registries, all in form
and substance satisfactory to Agent and Canadian Agent, (d) with respect to
all new Subsidiaries that are owned in whole or in part by a US Credit Party,
provide to Agent a supplement to the Shared Pledge Agreement or such other
Pledge Agreements, in each case, providing for the pledge of the direct and
beneficial interests in such new Subsidiary (or, in the case of the pledge of
a direct Foreign Subsidiary or Canadian Subsidiary, 65% of all of the Stock of
such Subsidiary) as shall be requested by Agent, together with appropriate
certificates and powers or financing statements under the Uniform Commercial
Code or PPSA or other applicable personal property or movable property
registries or other documents necessary for to perfect such pledge, in form
and substance satisfactory to Agent, and (e) provide to Agent all other
documentation, including one or more opinions of counsel satisfactory to
Agent, which in its opinion is appropriate with respect to such formation and
the execution and delivery of the applicable documentation
52
referred to above. Upon execution and delivery of a Credit Agreement Joinder
Agreement by each new United States domestic Subsidiary or Canadian
Subsidiary, such Subsidiary shall become a Credit Party hereunder with the
same force and effect as if originally named as a Credit Party herein. The
execution and delivery of any Credit Agreement Joinder Agreement shall not
require the consent of any Credit Party or Lender hereunder. The rights and
obligations of each Credit Party hereunder shall remain in full force and
effect notwithstanding the addition of any Credit Party hereunder. Any
document, agreement or instrument executed or issued pursuant to this Section
5.13 shall be a "Loan Document" for purposes of this Agreement.
6. NEGATIVE COVENANTS
Each Credit Party executing this Agreement jointly and severally
agrees as to all Credit Parties and their respective Subsidiaries that from
and after the date hereof until the Termination Date:
6.1 Mergers, Subsidiaries, Etc. No Credit Party shall, or shall
permit any Subsidiary to, directly or indirectly, by operation of law or
otherwise,
(a) form or acquire any Subsidiary after the Closing Date; provided,
however, that Credit Parties and their Subsidiaries may form new Subsidiaries
after the Closing Date so long as (i) no Default or Event of Default has
occurred and is continuing, (ii) each Foreign Subsidiary is at least 80% (or,
with respect to an investment pursuant to Section 6.2(h), at least 50%) owned
by a US Credit Party, (iii) each United States domestic Subsidiary is wholly
owned by a US Credit Party, (iv) each Canadian Subsidiary is wholly owned by a
Canadian Credit Party, (v) contemporaneously with the formation of any such
new Subsidiary, Credit Parties and each new Subsidiary, as applicable, comply
with the provisions of Section 5.13; or
(b) merge with, consolidate with, amalgamate with, acquire all or
substantially all of the assets or Stock of, or otherwise combine with or
acquire, any Person, except that (i) any US Credit Party (other than Holdings)
may merge into a US Borrower and any US Credit Party that is not a US Borrower
or Holdings may merge into another US Credit Party that is not a US Borrower
or Holdings, provided that Borrower Representative shall be the survivor of
any such merger to which it is a party and, in the event of a merger between a
US Credit Party that is not a US Borrower and a US Borrower, such US Borrower
shall be the survivor of any such merger, (ii) any Canadian Credit Party may
amalgamate with Canadian Borrower and any Canadian Credit Party that is not
Canadian Borrower may amalgamate with another Canadian Credit Party that is
not Canadian Borrower and (iii) any Foreign Subsidiary may merge into another
Foreign Subsidiary; provided, however, that Representative Borrower shall
provide Agent with 30 days prior written notice of such merger under this
clause (iii) and Credit Parties shall deliver to Agent on the date of
consummation of any such merger any additional pledge agreements or amendments
to the Pledge Agreements as shall be reasonably requested by Agent in
connection with such merger. Notwithstanding the foregoing, any Borrower (or
Holdings, so long as contemporaneously therewith, all assets so acquired are
transferred to one or more Borrowers), may acquire all or substantially all of
the assets of any Person (the "Target") (in each case, a "Permitted
Acquisition") subject to the satisfaction of each of the following conditions:
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(i) Agent shall receive at least 20 Business Days' prior
written notice of such proposed Permitted Acquisition, which notice shall
include a reasonably detailed description of such proposed Permitted
Acquisition;
(ii) such Permitted Acquisition by Holdings or a US Borrower
shall only involve assets located in the United States or such Permitted
Acquisition by Canadian Borrower shall only involve assets located in Canada
and, in each case, such Permitted Acquisition shall comprise a business, or
those assets of a business, of a type reasonably related to the type engaged
in by Borrowers as of the Closing Date, and which business would not subject
Agent, Canadian Agent or any Lender to regulatory or third party approvals in
connection with the exercise of its rights and remedies under this Agreement
or any other Loan Documents other than approvals applicable to the exercise of
such rights and remedies with respect to Borrowers prior to such Permitted
Acquisition;
(iii) such Permitted Acquisition shall be consensual and shall
have been approved by the Target's board of directors;
(iv) no additional Indebtedness, Guaranteed Indebtedness,
contingent obligations or other liabilities shall be incurred, assumed or
otherwise be reflected on a consolidated balance sheet of Credit Parties and
Target after giving effect to such Permitted Acquisition, except (A) Loans
made hereunder and (B) ordinary course trade payables, accrued expenses and
unsecured or secured Indebtedness of the Target to the extent no Default or
Event of Default has occurred and is continuing or would result after giving
effect to such Permitted Acquisition;
(v) except with respect to the Outdoor Products Acquisition,
the sum of all amounts payable in connection with all Permitted Acquisitions
(including all transaction costs and all Indebtedness, liabilities and
contingent obligations incurred or assumed in connection therewith or
otherwise reflected in a consolidated balance sheet of Borrowers and Target)
shall not exceed $5,000,000 in the aggregate during any year plus the amount
of Stock issued by Holdings to any seller in connection with, and as the
purchase price or portion of the purchase price for, any Permitted Acquisition
and $10,000,000 in the aggregate during the term of this Agreement plus the
amount of Stock issued by Holdings to any seller in connection with, and as
the purchase price or portion of the purchase price for, any Permitted
Acquisition, and the portion thereof allocable to goodwill and intangible
assets for each such Permitted Acquisition shall not exceed 20% of the total
purchase price for such acquisition;
(vi) except with respect to the Outdoor Products Acquisition,
the Target shall not have incurred an operating loss for the trailing
twelve-month period preceding the date of the Permitted Acquisition, as
determined based upon the Target's financial statements for its most recently
completed fiscal year and its most recent interim financial period completed
within 60 days prior to the date of consummation of such Permitted
Acquisition;
(vii) the business and assets acquired in such Permitted
Acquisition shall be free and clear of all Liens (other than Permitted
Encumbrances);
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(viii) at or prior to the closing of any Permitted Acquisition,
Agent, in the case of an acquisition by a US Credit Party, or Canadian Agent,
in the case of an acquisition by Canadian Borrower, will be granted a first
priority perfected Lien (subject to Permitted Encumbrances) in all assets
acquired pursuant thereto, and Credit Parties shall have executed such
documents and taken such actions as may be required by Agent and Canadian
Agent in connection therewith;
(ix) Concurrently with delivery of the notice referred to in
clause (i) above, Borrowers shall have delivered to Agent, in form and
substance reasonably satisfactory to Agent:
(1) a pro forma consolidated balance sheet, income
statement and cash flow statement of Holdings and its Subsidiaries (the
"Acquisition Pro Forma"), based on recent financial statements, which shall be
complete and shall fairly present in all material respects the assets,
liabilities, financial condition and results of operations of Holdings and its
Subsidiaries in accordance with GAAP consistently applied, but taking into
account such Permitted Acquisition and the funding of all Loans in connection
therewith, and such Acquisition Pro Forma shall reflect that (x) on a pro
forma basis, Holdings and its Subsidiaries would have had a ratio of Funded
Debt to EBITDA not in excess of 8.0 to 1.0 for the four quarter period
reflected in the Compliance Certificate most recently delivered to Agent
pursuant to Annex E prior to the consummation of such Permitted Acquisition
(after giving effect to such Permitted Acquisition and all Loans funded in
connection therewith as if made on the first day of such period), (y) average
daily Excess Availability for the 90-day period preceding the consummation of
such Permitted Acquisition would have exceeded $13,500,000 (or with respect to
an acquisition for which the purchase price therefor is paid solely in stock
issued by Holdings to any seller or the Outdoor Products Acquisition,
$8,500,000) on a pro forma basis (after giving effect to such Permitted
Acquisition and all Loans funded in connection therewith as if made on the
first day of such period) and the Acquisition Projections (as hereinafter
defined) shall reflect that such Excess Availability of $13,500,000 shall
continue for at least 90 days after the consummation of such Permitted
Acquisition, and (z) on a pro forma basis, no Event of Default has occurred
and is continuing or would result after giving effect to such Permitted
Acquisition and Borrowers would have been in compliance with the financial
covenants set forth in Annex G for the four quarter period reflected in the
Compliance Certificate most recently delivered to Agent pursuant to Annex E
prior to the consummation of such Permitted Acquisition (after giving effect
to such Permitted Acquisition and all Loans funded in connection therewith as
if made on the first day of such period);
(2) updated versions of the most recently delivered
Projections covering the 1-year period commencing on the date of such
Permitted Acquisition and otherwise prepared in accordance with the
Projections (the "Acquisition Projections") and based upon historical
financial data of a recent date reasonably satisfactory to Agent, taking into
account such Permitted Acquisition; and
(3) a certificate of the chief financial officer of
Holdings and each Borrower to the effect that: (w) each Borrower (after taking
into consideration all rights of contribution and indemnity such Borrower has
against Holdings and each other Subsidiary of Holdings) will be Solvent upon
the consummation of the Permitted Acquisition; (x) the
55
Acquisition Pro Forma fairly presents the financial condition of Holdings and
its Subsidiaries (on a consolidated basis) as of the date thereof after giving
effect to the Permitted Acquisition; (y) the Acquisition Projections are
reasonable estimates of the future financial performance of Holdings and its
Subsidiaries subsequent to the date thereof based upon the historical
performance of Holdings and its Subsidiaries and the Target and show that
Holdings and its Subsidiaries shall continue to be in compliance with the
financial covenants set forth in Annex G for the 3-year period thereafter; and
(z) Holdings and Borrowers have completed their due diligence investigation
with respect to the Target and such Permitted Acquisition, which investigation
was conducted in a manner similar to that which would have been conducted by a
prudent purchaser of a comparable business and the results of which
investigation were delivered to Agent, Canadian Agent and Lenders;
(x) on or prior to the date of such Permitted Acquisition,
Agent shall have received, in form and substance reasonably satisfactory to
Agent, copies of the acquisition agreement and related agreements and
instruments, and all opinions, certificates, lien search results and other
documents reasonably requested by Agent including those specified in the last
sentence of Section 5.9; and
(xi) at the time of such Permitted Acquisition and after giving
effect thereto, no Default or Event of Default has occurred and is continuing.
Notwithstanding the foregoing, the Accounts and Inventory of the
Target shall not be included in Eligible Accounts and Eligible Inventory until
Agent has completed its due diligence with respect to such Accounts and
Inventory of the Target to determine whether or to what extent such Accounts
and Inventory of the Target constitute Eligible Accounts or Eligible
Inventory.
6.2 Investments; Loans and Advances. Except as otherwise expressly
permitted by this Section 6, no Credit Party shall, or shall permit any
Subsidiary of a Credit Party to, make or permit to exist any investment in, or
make, accrue or permit to exist loans or advances of money to, any Person,
through the direct or indirect lending of money, holding of securities or
otherwise, except that:
(a) Borrowers and Foreign Subsidiaries may hold investments
comprised of notes payable, or stock or other securities issued by Account
Debtors to any Borrower or Foreign Subsidiary, as applicable, pursuant to
negotiated agreements with respect to settlement of such Account Debtor's
Accounts in the ordinary course of business, so long as the aggregate amount
of such Accounts so settled by Borrowers and Foreign Subsidiaries does not
exceed $1,000,000;
(b) each Credit Party may maintain its existing investments in its
Subsidiaries as of the Closing Date;
(c) Borrowers may make minority investments in an aggregate amount
with respect to all such investments not to exceed $250,000 in a Person that
is a corporation or limited liability company, subject to the following
conditions:
(i) Agent shall have received at least 20 Business Day's prior
written notice of such proposed investment;
56
(ii) such corporation or limited liability company shall be
formed under the laws of the United States or Canada or any state or province
thereof and its assets shall be located in the United States or Canada and
comprising a business, or those assets of a business, of the type engaged in
by Borrowers as of the Closing Date;
(iii) no additional Indebtedness, Guaranteed Indebtedness,
contingent obligations or other liabilities shall be incurred, assumed or
otherwise be reflected on a consolidated balance sheet of Credit Parties after
giving effect to such investment, except Loans made hereunder and no Credit
Party shall have any obligation to make additional investments in such
corporation or limited liability company after its initial investment therein;
(iv) the corporation or limited liability company shall not
have incurred an operating loss for the trailing twelve-month period preceding
the date of the investment, as determined based upon the corporation or
limited liability company's financial statements for its most recently
completed fiscal year and its most recent interim financial period completed
within 60 days prior to the date of consummation of such investment;
(v) at or prior to the closing of any such investment, to the
extent not prohibited by the corporate or limited liability company documents,
Agent, in the case of an investment by a US Credit Party, or Canadian Agent,
in the case of an investment by a Canadian Credit Party, will be granted a
first priority perfected Lien (subject to Permitted Encumbrances) in Credit
Parties' interest in such corporation or limited liability company and Credit
Parties shall have executed such documents and taken such actions as may be
required by Agent and Canadian Agent in connection therewith;
(vi) on or prior to the date of such investment, Agent shall
have received, in form and substance reasonably satisfactory to Agent, copies
of the articles of incorporation or formation, by-laws or operating agreement
and related agreements and instruments, and all opinions, certificates and
other documents reasonably requested by Agent; and
(vii) at the time of such investment and after giving effect
thereto, no Default or Event of Default has occurred and is continuing;
(d) Foreign Subsidiaries (other than Foreign Subsidiaries operating
in Brazil) and, so long as Agent or Canadian Agent has not delivered an
Activation Notice, Borrowers may make investments, subject to Control Letters,
with respect to investments of any US Credit Party, in favor of Agent or, with
respect to any investments of a Canadian Credit Party, in favor of the
Canadian Agent or otherwise subject to a perfected security interest in favor
of Agent or Canadian Agent, as applicable, in (i) marketable direct
obligations issued or unconditionally guaranteed by the United States of
America or Canada or any agency thereof maturing within one year from the date
of acquisition thereof, (ii) commercial paper maturing no more than one year
from the date of creation thereof and currently having the highest rating
obtainable from either Standard & Poor's Ratings Group or Xxxxx'x Investors
Service, Inc., (iii) certificates of deposit maturing no more than one year
from the date of creation thereof issued by commercial banks incorporated
under the laws of the United States of America or Canada, each having combined
capital, surplus and undivided profits of not less than $300,000,000 and
having a
57
senior unsecured rating of "A" or better by a nationally recognized rating
agency (an "A Rated Bank"), (iv) time deposits maturing no more than 30 days
from the date of creation thereof with A Rated Banks, (v) mutual funds that
invest solely in one or more of the investments described in clauses (i)
through (iv) above and (vi) money market funds that invest substantially in
one or more of the investments described in clauses (i) through (iv) above;
(e) in the case of Foreign Subsidiaries operating in Brazil,
Investments made in the ordinary course of business in export notes in Dollars
issued by a Brazilian commercial bank with maturities of one year or less from
the date of acquisition thereof (or, if export notes are not available,
certificates of deposit issued by a Brazilian commercial bank with maturities
of one year or less from the date of acquisition thereof and denominated in
Brazilian reals swapped for Dollars pursuant to a hedge agreement permitted
hereunder);
(f) investments (other than those relating to the incurrence of
Indebtedness) (i) by any US Credit Party in another US Credit Party, (ii) by
any Canadian Credit Party in another Canadian Credit Party, (iii) not
exceeding, together with any Indebtedness under Section 6.3(a)(x), $5,000,000
in the aggregate by Credit Parties in Foreign Subsidiaries, and (iv) by any
Foreign Subsidiary in another Foreign Subsidiary;
(g) investments existing as of the Closing Date in the amount of
$5,300,000 in the aggregate and additional investments in an amount not to
exceed $100,000 in the aggregate made in connection with (i) deferred
compensation trust arrangements existing, and as in effect, on the Closing
Date and (ii) officer's life insurance obtained in the ordinary course of
business;
(h) Within 18 months of the Closing Date, Borrowers may invest up to
$10,000,000 in the aggregate in a foreign company that is engaged in the same
or a substantially similar line of business as the outdoor products operations
of Credit Parties other than Xxxxx and that is at least 50% owned by a US
Credit Party directly, so long as no Default or Event of Default exists at the
time of such investment or would be caused thereby, average daily Excess
Availability for the 90-day period preceding such investment would have
exceeded $8,500,000 on a pro forma basis (after giving effect to such
investment and all Loans funded in connection therewith as if made on the
first day of such period) and US Credit Parties pledge to Agent the lesser of
all of their Stock in such company or 65% of all of the Stock of such company;
and
(i) other investments not exceeding $2,500,000 in the aggregate at
any time outstanding.
6.3 Indebtedness.
(a) No Credit Party shall, or shall permit any Subsidiary of any
Credit Party to, create, incur, assume or permit to exist any Indebtedness,
except (without duplication):
(i) Indebtedness secured by purchase money security interests
and Capital Leases permitted in Section 6.7(c),
(ii) the Loans and the other Obligations,
58
(iii) unfunded pension fund and other employee benefit plan
obligations and liabilities to the extent they are permitted to remain
unfunded under applicable law,
(iv) the Existing Senior Notes and any refinancing thereof
contemplated by clause (b) of the definition of Commitment Termination Date,
(v) other existing Indebtedness described in Disclosure
Schedule (6.3) and refinancings thereof or amendments or modifications thereto
that do not have the effect of increasing the principal amount thereof or
changing the amortization thereof (other than to extend the same) and that are
otherwise on terms and conditions no less favorable to any Credit Party,
Agent, Canadian Agent or any Lender, as determined by Agent or, with respect
to a refinancing of Indebtedness of a Canadian Credit Party, Canadian Agent,
than the terms of the Indebtedness being refinanced, amended or modified,
(vi) Indebtedness specifically permitted under Section 6.1,
(vii) Indebtedness specifically permitted under Section 6.6,
(viii) Indebtedness specifically permitted under Section 6.17,
(ix) Indebtedness consisting of intercompany loans and advances
made by any Credit Party to any other Credit Party; provided, that: (A) each
Credit Party shall have executed and delivered to each other Credit Party, on
the Closing Date, a demand note (collectively, the "Intercompany Notes") to
evidence any such intercompany Indebtedness owing at any time by such Credit
Party to such other Credit Parties which Intercompany Notes shall be in form
and substance reasonably satisfactory to Agent and, with respect to any
Canadian Credit Party, Canadian Agent, and shall be pledged and delivered to
(x) Agent (in the case of any note held by a US Credit Party) pursuant to the
applicable Collateral Documents as additional collateral security for the
Obligations or (y) Canadian Agent (in the case of any note held by a Canadian
Credit Party) pursuant to the applicable Collateral Documents as additional
collateral security for the Canadian Obligations; (B) each Credit Party shall
record all intercompany transactions on its books and records in a manner
reasonably satisfactory to Agent and, with respect to any Canadian Credit
Party, Canadian Agent; (C) the obligations of each Credit Party under any such
Intercompany Notes shall be subordinated to the Obligations of such Credit
Party hereunder in a manner reasonably satisfactory to Agent and, with respect
to any Canadian Credit Party, Canadian Agent; (D) at the time any such
intercompany loan or advance is made by any Credit Party to any other Credit
Party and after giving effect thereto, each such Credit Party shall be
Solvent; (E) no Default or Event of Default would occur and be continuing
after giving effect to any such proposed intercompany loan; and (F) the amount
of any such intercompany Indebtedness owed by US Credit Parties to a Canadian
Credit Party shall not exceed $5,000,000 at any time outstanding,
(x) Indebtedness of Foreign Subsidiaries owed to Credit Parties
in an aggregate amount, together with investments under Section 6.2(f)(iii),
not to exceed $5,000,000 at any time outstanding,
59
(xi) Other Indebtedness of Foreign Subsidiaries in an amount
not to exceed $7,500,000 at any time outstanding, and
(xii) Other unsecured Indebtedness (including, without
limitation, repurchase obligations arising in connection with financing
provided by certain financial institutions to certain dealers with respect to
inventory purchased by such dealers from Credit Parties) in an aggregate
amount not to exceed $20,000,000 at any time outstanding; provided, however,
that any such other unsecured Indebtedness of Foreign Subsidiaries and
Canadian Credit Parties shall not exceed $10,000,000 in the aggregate at any
time outstanding.
(b) No Credit Party shall, directly or indirectly, voluntarily
purchase, redeem, defease or prepay any principal of, premium, if any,
interest or other amount payable in respect of, or permit any Subsidiary to,
directly or indirectly, voluntarily purchase, redeem, defease or prepay any
principal of, premium, if any, interest or other amount payable in respect of,
any Indebtedness, other than:
(i) the Obligations;
(ii) Indebtedness secured by a Permitted Encumbrance if the
asset securing such Indebtedness has been sold or otherwise disposed of in
accordance with Sections 6.8(b) or (c);
(iii) Indebtedness permitted by Section 6.3(a)(iv) upon any
refinancing thereof in accordance with Section 6.3(a)(iv);
(iv) Indebtedness permitted by Section 6.3(a)(v) upon any
refinancing thereof in accordance with Section 6.3(a)(v);
(v) so long as no Default or Event of Default has occurred or
would be caused thereby, after giving effect to such payment Excess
Availability is at least $8,500,000 and the timing of such payment shall be
set at dates that permit the delivery of Financial Statements necessary to
determine current compliance with the Financial Covenants prior to each such
payment, in addition to any refinancing permitted under clause (iii) or (iv)
above, prepayments of the Existing Senior Notes and the Existing Subordinated
Notes (the aggregate cash amount of such prepayments not to exceed the
aggregate amount of Permitted Proceeds),
(vi) other Indebtedness (excluding Subordinated Debt, the
Xxxxxx Convertible Debt and the Existing Senior Notes) in an aggregate amount
not to exceed $1,000,000, and
(vii) as otherwise permitted in Section 6.14.
6.4 Employee Loans and Affiliate Transactions.
(a) No Credit Party shall enter into or be a party to any
transaction with any other Credit Party or any Affiliate thereof except in the
ordinary course of and pursuant to the reasonable requirements of such Credit
Party's business and upon fair and reasonable terms that are no less favorable
to such Credit Party than would be obtained in a comparable arm's length
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transaction with a Person not an Affiliate of such Credit Party. In addition,
if any Credit Party enters into a new type of material transaction with an
Affiliate after the Closing Date, it shall disclose such transaction in
advance to Agent, Canadian Agent and Lenders. All such material transactions
(other than inventory sales in the ordinary course of business) existing as of
the date hereof are described in Disclosure Schedule (6.4(a)).
(b) No Credit Party shall, or shall permit any Subsidiary of a
Credit Party to, enter into any lending or borrowing transaction with any
employees of any Credit Party or any such Subsidiaries, except loans to its
respective employees in the ordinary course of business consistent with past
practices for travel and entertainment expenses, relocation costs and similar
purposes up to a maximum of $500,000 in the aggregate at any one time
outstanding.
6.5 Capital Structure and Business. No Credit Party shall, or shall
permit any Subsidiary of any Credit Party to, (a) make any changes in any of
its business objectives, purposes or operations that could in any way
adversely affect the repayment of the Loans or any of the other Obligations or
could reasonably be expected to have or result in a Material Adverse Effect,
(b) except for mergers or amalgamations among Credit Parties or such
Subsidiaries, as applicable, specifically permitted under Section 6.1, make
any change in its capital structure as described in Disclosure Schedule (3.8),
including the issuance or sale of any shares of Stock (except Excluded Stock
Issuances), warrants or other securities convertible into Stock or any
revision of the terms of its outstanding Stock; provided that Holdings may
issue or sell shares of its Stock for cash so long as (i) the proceeds thereof
are applied in prepayment of the Obligations as required by Section
1.3(b)(iii), and (ii) no Change of Control occurs after giving effect thereto,
or (c) amend its charter, constating documents or bylaws in a manner that
would adversely affect Agent, Canadian Agent or Lenders or such Credit Party's
duty or ability to repay the Obligations. No Credit Party shall, or shall
permit any Subsidiary of any Credit Party to, engage in any business other
than the businesses currently engaged in by it or businesses reasonably
related thereto.
6.6 Guaranteed Indebtedness. No Credit Party shall, or shall permit
any Subsidiary of any Credit Party to, create, incur, assume or permit to
exist any Guaranteed Indebtedness except (a) by endorsement of instruments or
items of payment for deposit to the general account of any Credit Party or
such Subsidiary, (b) for Guaranteed Indebtedness incurred for the benefit of
any other Credit Party if the primary obligation is expressly permitted by
this Agreement other than Indebtedness, if any, of a Target existing at the
time such Target is acquired, and (c) for Guaranteed Indebtedness permitted
under Section 6.3(a)(v) or Section 6.3(a)(xii) with respect to repurchase
obligations arising in connection with financing provided by certain financial
institutions to certain dealers with respect to inventory purchased by such
dealers from Credit Parties.
6.7 Liens. No Credit Party shall, or shall permit any Subsidiary of
any Credit Party to, create, incur, assume or permit to exist any Lien on or
with respect to its Accounts or any of its other properties or assets (whether
now owned or hereafter acquired) except for, without duplication:
(a) Permitted Encumbrances;
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(b) Liens in existence on the date hereof and summarized on
Disclosure Schedule (6.7) securing the Indebtedness described on Disclosure
Schedule (6.3) and permitted refinancings, extensions and renewals thereof,
including extensions or renewals of any such Liens; provided that the
principal amount of the Indebtedness so secured is not increased and the Lien
does not attach to any other property and any refinancing of the Existing
Senior Notes shall not be secured by the Shared Collateral or otherwise;
(c) Liens created after the date hereof by conditional sale or other
title retention agreements (including Capital Leases) or in connection with
purchase money Indebtedness with respect to Equipment and Fixtures acquired by
any Credit Party in the ordinary course of business, involving the incurrence
of an aggregate amount of purchase money Indebtedness and Capital Lease
Obligations of not more than $2,000,000 outstanding at any one time for all
such Liens (provided that such Liens attach only to the assets subject to such
purchase money debt and such Indebtedness is incurred within 30 days following
such purchase and does not exceed 100% of the purchase price of the subject
assets); and
(d) Liens securing Indebtedness permitted under Section 6.3(a)(xi)
to the extent such Liens are solely on property of the issuer of such
Indebtedness.
In addition, no Credit Party shall become a party to any agreement, note,
indenture or instrument, or take any other action, after the date hereof that
would prohibit the creation of a Lien on any of its properties or other assets
in favor of Agent, on behalf of itself and Lenders, as additional collateral
for the Obligations, except operating leases, Capital Leases or Licenses which
prohibit Liens upon the assets that are subject thereto.
6.8 Sale of Stock and Assets. No Credit Party shall, or shall permit
any Subsidiary of any Credit Party to, sell, transfer, convey, assign or
otherwise dispose of any of its properties or other assets, including the
Stock of any of its Subsidiaries (whether in a public or a private offering or
otherwise) or any of its Accounts, other than (a) the sale of Inventory,
license of Intellectual Property or the use of cash or cash equivalents, in
each case, in the ordinary course of business, and (b) the sale, transfer,
conveyance or other disposition by a Credit Party or any Foreign Subsidiary of
Equipment or Fixtures that are obsolete or no longer used or useful in such
Credit Party's or such Foreign Subsidiary's business; (c) the sale of all of
the Stock or substantially all of the assets of Gear or Xxxxx so long as (i)
no Default or Event of Default exists or would be caused thereby and at least
80% of the purchase price therefor is paid in cash at the time of such sale or
by the surrender for cancellation of Existing Senior Notes or existing
Subordinated Notes or (ii) Requisite Lenders otherwise consent to such sale;
(d) other assets having a value not exceeding $500,000 in the aggregate in any
Fiscal Year; and (e) leases and subleases of Real Estate not materially
interfering with the ordinary conduct of business of the applicable Credit
Parties and otherwise consented to by Agent which consent will not be
unreasonably withheld. With respect to any disposition of assets or other
properties permitted pursuant to clauses (b), (c) or (d) above, subject to
Section 1.3(b), Agent agrees on reasonable prior written notice to release its
Lien on such assets or other properties in order to permit the applicable
Credit Party to effect such disposition and shall execute and deliver to
Borrowers, at Borrowers' expense, appropriate UCC-3 termination statements,
PPSA financing change statements and other releases as are reasonably
requested by Borrowers.
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6.9 ERISA. No Credit Party shall, or shall cause or permit any ERISA
Affiliate to, cause or permit to occur an event that could result in the
imposition of a Lien under Section 412 of the IRC or Section 302 or 4068 of
ERISA other than a Lien under Section 412 of the IRC or Section 302 of ERISA
that is permitted under clause (q) of the definition of Permitted Encumbrances
or cause or permit to occur an ERISA Event to the extent such ERISA Event
could reasonably be expected to have a Material Adverse Effect.
6.10 Financial Covenants. Borrowers shall not breach or fail to
comply with any of the Financial Covenants.
6.11 Hazardous Materials. No Credit Party shall, or shall permit any
Subsidiary of any Credit Party to, cause or permit a Release of any Hazardous
Material on, at, in, under, above, to, from or about any of the Real Estate
where such Release would violate in any respect, or form the basis for any
Environmental Liabilities under, any Environmental Laws or Environmental
Permits, other than such violations or Environmental Liabilities that could
not reasonably be expected to have a Material Adverse Effect.
6.12 Sale-Leasebacks. No Credit Party shall, or shall permit any
Subsidiary of any Credit Party to, engage in any sale-leaseback, synthetic
lease or similar transaction involving any of its assets.
6.13 Cancellation of Indebtedness. No Credit Party shall, or shall
permit any Subsidiary of any Credit Party to, cancel any claim or debt owing
to it, except for reasonable consideration negotiated on an arm's length basis
and in the ordinary course of its business consistent with past practices.
6.14 Restricted Payments. No Credit Party shall, or shall permit any
Subsidiary of a Credit Party to, make any Restricted Payment, except (a)
intercompany loans and advances between Credit Parties to the extent permitted
by Section 6.3, (b) dividends and distributions by Subsidiaries of any Credit
Party paid to a Credit Party or a Subsidiary of a Credit Party, (c) employee
loans permitted under Section 6.4(b), (d) payments of principal and interest
of Intercompany Notes issued in accordance with Section 6.3; (e) prepayments
under the Existing Subordinated Notes specifically permitted under Section
6.3(b)(v), (f) scheduled cash payments of interest with respect to
Subordinated Debt, provided, that (i) no Default or Event of Default has
occurred and is continuing or would result after giving effect to any
Restricted Payment pursuant to clause (f) above, and (ii) with respect to any
Subordinated Debt created after the Closing Date, the timing of the Restricted
Payments referred to in clause (f) above shall be set at dates that permit the
delivery of Financial Statements necessary to determine current compliance
with the Financial Covenants prior to each such payment (g) scheduled payments
of interest payable in kind in respect of the Xxxxxx Convertible Debt or
dividends payable in kind in respect of the Xxxxxx Preferred Stock, and (h)
usual and customary underwriter, financial advisory or similar transaction
fees meeting the requirements of Section 6.4(a) payable to LBMB II or its
Affiliates.
6.15 Change of Corporate Name or Location; Change of Fiscal Year. No
Credit Party shall, or shall permit any Subsidiary of any Credit Party to, (a)
change its name, corporate name or trade name as it appears in official
filings in the state, province, county or
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other jurisdiction of its existence, incorporation or other organization (b)
change its chief executive office, registered office pursuant to its
constituent documents, principal place of business, corporate offices or
warehouses or locations at which Collateral is held or stored, or the location
of its records concerning the Collateral, (c) change the type of entity that
it is, (d) change its organization identification number, if any, issued by
its state of incorporation or other organization, or (e) change its state,
province, county or other jurisdiction of existence, incorporation or
organization, in each case without at least 30 days prior written notice to
Agent and Canadian Agent and after Agent's and Canadian Agent's written
acknowledgment that any reasonable action requested by Agent or Canadian Agent
in connection therewith, including to continue the perfection of any Liens in
favor of Agent or Canadian Agent, as applicable, in any Collateral, has been
completed or taken, and provided that any such new location shall be in the
continental United States (with respect to each US Credit Party) or Canada
(with respect to each Canadian Credit Party). Without limiting the foregoing,
no Credit Party shall change its name, identity or corporate structure in any
manner that might make any financing, financing change or continuation
statement or other applicable perfection filing made in connection herewith or
with any other Loan Document seriously misleading within the meaning of
Section 9-402(7) of the Code or materially misleading within the meaning of
any other applicable law except upon prior written notice to Agent, Canadian
Agent and Lenders and after Agent's and Canadian Agent's written
acknowledgment that any reasonable action requested by Agent or Canadian Agent
in connection therewith, including to continue the perfection of any Liens in
favor of Agent or Canadian Agent, as applicable, in any Collateral, has been
completed or taken. No Credit Party shall, or shall permit any Subsidiary of
any Credit Party to, change its Fiscal Year.
6.16 No Impairment of Intercompany Transfers. No Credit Party shall,
or shall permit any Subsidiary of any Credit Party to, directly or indirectly
enter into or become bound by any agreement, instrument, indenture or other
obligation (other than this Agreement and the other Loan Documents) that could
directly or indirectly restrict, prohibit or require the consent of any Person
with respect to the payment of dividends or distributions or the making or
repayment of intercompany loans by a Subsidiary of any Borrower to any
Borrower or between Borrowers.
6.17 No Speculative Transactions. No Credit Party shall, or shall
permit any Subsidiary of any Credit Party to, engage in any transaction
involving commodity options, futures contracts or similar transactions, except
solely to hedge against fluctuations in the prices of commodities owned or
purchased by it and the values of foreign currencies receivable or payable by
it and interest swaps, caps or collars.
6.18 Changes Relating to Subordinated Debt; Material Contracts.
(a) No Credit Party shall, or shall permit any Subsidiary of any
Credit Party to, change or amend the terms of any Subordinated Debt (or any
indenture or agreement in connection therewith) if the effect of such
amendment is to: (i) increase the interest rate on such Subordinated Debt;
(ii) change the dates upon which payments of principal or interest are due on
such Subordinated Debt other than to extend such dates; (iii) change any
default or event of default other than to delete or make less restrictive any
default provision therein, or add any covenant with respect to such
Subordinated Debt; (iv) change the redemption or prepayment provisions of such
Subordinated Debt other than to extend the dates therefor or to reduce the
premiums payable in connection therewith; (v) grant any security or collateral
to secure payment
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of such Subordinated Debt; (vi) change or amend any subordination terms with
respect thereto, including, without limitation, with respect to the Existing
Subordinated Notes Indenture, Article 10 and Section 11.02 thereof; or (vii)
change or amend any other term if such change or amendment would materially
increase the obligations of the Credit Party or any such Subsidiary thereunder
or confer additional material rights on the holder of such Subordinated Debt
in a manner adverse to any Credit Party, Agent or any Lender.
(b) No Credit Party shall change or amend the terms of the Existing
Senior Notes Documents (or any indenture or agreement in connection therewith)
if the effect of such amendment is to: (i) increase the interest rate under
the Existing Senior Notes; (ii) change the dates upon which payments of
principal or interest are due under the Existing Senior Notes other than to
extend such dates; (iii) change any default or event of default other than to
delete or make less restrictive any default provision therein, or add any
covenant with respect to Existing Senior Notes Documents; (iv) change the
redemption or prepayment provisions under the Existing Senior Notes other than
to extend the dates therefor or to reduce the premiums payable in connection
therewith; (v) except pursuant to the terms of the Collateral Agency
Agreement, grant any security or collateral to secure payment of the Existing
Senior Notes; or (vi) change or amend any other term if such change or
amendment would materially increase the obligations of the Credit Party
thereunder or confer additional material rights on the holder of the Existing
Senior Notes in a manner adverse to any Credit Party, Agent, Collateral Agent
or any Lender.
7. TERM
7.1 Termination. The financing arrangements contemplated hereby
shall be in effect until the Commitment Termination Date, and the Loans and
all other Obligations shall be automatically due and payable in full on such
date.
7.2 Survival of Obligations Upon Termination of Financing
Arrangements. Except as otherwise expressly provided for in the Loan
Documents, no termination or cancellation (regardless of cause or procedure)
of any financing arrangement under this Agreement shall in any way affect or
impair the obligations, duties and liabilities of the Credit Parties or the
rights of Agent, the Canadian Agent and Lenders relating to any unpaid portion
of the Loans or any other Obligations, due or not due, liquidated, contingent
or unliquidated, or any transaction or event occurring prior to such
termination, or any transaction or event, the performance of which is required
after the Commitment Termination Date. Except as otherwise expressly provided
herein or in any other Loan Document, all undertakings, agreements, covenants,
warranties and representations of or binding upon the Credit Parties, and all
rights of Agent, Canadian Agent and each Lender, all as contained in the Loan
Documents, shall not terminate or expire, but rather shall survive any such
termination or cancellation and shall continue in full force and effect until
the Termination Date; provided, that the provisions of Section 11, the payment
obligations under Sections 1.15 and 1.16, and the indemnities contained in the
Loan Documents shall survive the Termination Date.
8. EVENTS OF DEFAULT; RIGHTS AND REMEDIES
8.1 Events of Default. The occurrence of any one or more of the
following events (regardless of the reason therefor) shall constitute an
"Event of Default" hereunder:
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(a) Any Borrower (i) fails to make any payment of principal of, or
interest on, or Fees owing in respect of, the Loans or any of the other
Obligations when due and payable, or (ii) fails to pay or reimburse Agent,
Canadian Agent or Lenders for any expense reimbursable hereunder or under any
other Loan Document within 10 days following Agent's or Canadian Agent's
demand for such reimbursement or payment of expenses.
(b) Any Credit Party fails or neglects to perform, keep or observe
any of the provisions of Sections 1.4, 1.8, 5.4(a), 5.5(b), 5.12 or 6, or any
of the provisions set forth in Annexes C or G, respectively.
(c) Any Borrower fails or neglects to perform, keep or observe any
of the provisions of Section 4 or any provisions set forth in Annexes E or F,
respectively, and the same shall remain unremedied for 5 Business Days or
more.
(d) Any Credit Party fails or neglects to perform, keep or observe
any other provision of this Agreement or of any of the other Loan Documents
(other than any provision embodied in or covered by any other clause of this
Section 8.1) and the same shall remain unremedied for 30 days or more from the
date any Credit Party knew or should have known of such failure or neglect.
(e) A default or breach occurs under any other agreement, document
or instrument (including, without limitation, the Existing Senior Notes
Documents and the Existing Subordinated Notes Documents) to which any Credit
Party is a party that is not cured within any applicable grace period
therefor, and such default or breach (A) involves the failure to make any
payment when due in respect of any Indebtedness or Guaranteed Indebtedness
(other than the Obligations) of any Credit Party in excess of $2,500,000 in
the aggregate (including (x) undrawn committed or available amounts and (y)
amounts owing to all creditors under any combined or syndicated credit
arrangements), or (B) causes, or permits any holder of such Indebtedness or
Guaranteed Indebtedness or a trustee to cause, Indebtedness or Guaranteed
Indebtedness or a portion thereof in excess of $2,500,000 in the aggregate to
become due prior to its stated maturity or prior to its regularly scheduled
dates of payment, or cash collateral in respect thereof to be demanded, in
each case, regardless of whether such default is waived, or such right is
exercised, by such holder or trustee.
(f) Any information contained in any Borrowing Base Certificate is
untrue or incorrect in any respect (other than inadvertent, immaterial errors
not exceeding $250,000 in the aggregate in any Borrowing Base Certificate), or
any representation or warranty herein or in any Loan Document or in any
written statement, report, financial statement or certificate (other than a
Borrowing Base Certificate) made or delivered to Agent or any Lender by any
Credit Party is untrue or incorrect in any material respect as of the date
when made or deemed made.
(g) Assets of any Credit Party or any Foreign Subsidiary with a fair
market value of $2,500,000 or more are attached, seized, levied upon or
subjected to a writ or distress warrant, or come within the possession of any
receiver, interim receiver, receiver and manager, trustee, custodian,
liquidator, administrator, sheriff, bailiff or assignee for the benefit of
creditors of any Credit Party or any such Foreign Subsidiary and such
condition continues for 30 days or more.
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(h) An involuntary case or proceeding (including the filing of any
notice of intention thereof) is commenced against any Credit Party or any
Foreign Subsidiary that is an operating company seeking a decree or order in
respect of such Credit Party or such Foreign Subsidiary (i) under any
Insolvency Law, or any other applicable federal, state or foreign bankruptcy
or other similar law or any incorporation law, (ii) appointing a custodian,
receiver, interim receiver, receiver and manager, custodian, liquidator,
assignee, trustee or sequestrator (or similar official) for such Credit Party
or such Foreign Subsidiary or for any substantial part of any such Credit
Party's or such Foreign Subsidiary's assets, or (iii) ordering the winding-up,
dissolution, suspension of general operations or liquidation of the affairs of
such Credit Party or such Foreign Subsidiary, and such case or proceeding
shall remain undismissed or unstayed for 60 days or more or a decree or order
granting the relief sought in such case or proceeding shall be entered by a
court of competent jurisdiction.
(i) Any Credit Party or Foreign Subsidiary that is an operating
company (i) files a petition seeking relief under any Insolvency Law, or any
other applicable federal, state or foreign bankruptcy or other similar law,
(ii) consents to or fails to contest in a timely and appropriate manner the
institution of proceedings referred to in Section 8.1(h) thereunder or the
filing of any such petition or the appointment of or taking possession by a
custodian, receiver, liquidator, assignee, trustee or sequestrator (or similar
official) for such Credit Party or such Foreign Subsidiary or for any
substantial part of any such Credit Party's or such Foreign Subsidiary's
assets, (iii) makes an assignment for the benefit of creditors, (iv) takes any
action in furtherance of any of the foregoing or described under Section
8.1(h); or (v) admits in writing its inability to, or is generally unable to,
pay its debts as such debts become due.
(j) A final judgment or judgments for the payment of money in excess
of $2,500,000 in the aggregate at any time are outstanding against one or more
of the Credit Parties and the same are not, within 30 days after the entry
thereof, discharged or execution thereof stayed or bonded pending appeal, or
such judgments are not discharged prior to the expiration of any such stay.
(k) Any material provision of any Loan Document for any reason
ceases to be valid, binding and enforceable in accordance with its terms (or
any Credit Party or other Person party to a Loan Document shall challenge the
enforceability of any Loan Document or shall assert in writing, or engage in
any action or inaction based on any such assertion, that any provision of any
of the Loan Documents has ceased to be or otherwise is not valid, binding and
enforceable in accordance with its terms), or any Lien created under any Loan
Document ceases to be a valid and perfected first priority Lien (except as
otherwise permitted herein or therein) in any of the Collateral purported to
be covered thereby.
(l) Any Change of Control occurs.
(m) Any Material Adverse Effect occurs.
8.2 Remedies.
(a) To the extent permitted under Section 1.5(d), if any Event of
Default has occurred and is continuing, Agent may (and at the written request
of Requisite Lenders shall) or
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Agent may direct Canadian Agent to (and at the written request of Requisite
Lenders Canadian Agent shall), without notice except as otherwise expressly
provided herein, increase the rates of interest applicable to the Loans and
the Letter of Credit Fees to the Default Rate.
(b) If any Event of Default has occurred and is continuing, Agent
may (and at the written request of the Requisite Lenders shall) or Agent may
direct Canadian Agent to (and at the written request of Requisite Lenders
Canadian Agent shall), without notice: (i) terminate the Commitments to make
additional Advances or incur additional Letter of Credit Obligations (but A
Loan Lenders and Canadian Lenders may cease funding advances under the US
Revolving Loan Commitment and the Canadian Revolving Loan Commitment on any
date that any of the conditions precedent set forth in Section 2.2 are not
satisfied, whether or not Agent terminates any of the Commitments); (ii)
declare all or any portion of the Obligations, including all or any portion of
any Loan to be forthwith due and payable, and require that the Letter of
Credit Obligations be cash collateralized as provided in Annex B, all without
presentment, demand, protest or further notice of any kind, all of which are
expressly waived by Borrowers and each other Credit Party; or (iii) exercise
all rights and remedies under the Loan Documents, applicable laws of the
United States or any state thereof, and applicable laws of Canada or any
province thereof, including, without limitation, all remedies provided under
the Code, the PPSA and any other applicable law of any jurisdiction; provided,
that upon the occurrence of an Event of Default specified in Sections 8.1(h)
or (i), the Commitments to make additional Advances or incur additional Letter
of Credit Obligations shall be immediately terminated and all of the
Obligations, including the Loans, shall become immediately due and payable
without declaration, notice or demand by any Person. Notwithstanding anything
herein or in the Canadian Mortgage to the contrary, for so long as GE Capital
Canada is Canadian Agent or a Lender, Canadian Agent shall not foreclose or
take title to any Real Estate covered by the Canadian Mortgage unless GE
Capital and GE Capital Canada shall have consented to such action.
Notwithstanding the foregoing, if any Event of Default has occurred and is
continuing, and if the Requisite Lenders shall not have otherwise instructed
Agent to deliver Activation Notices under Annex C and to enforce Credit
Parties' covenants under Annex C, at the request of Requisite Revolving
Lenders, Agent shall, or shall cause Canadian Agent to, as applicable, without
notice, deliver Activation Notices under Annex C and enforce Credit Parties'
covenants under Annex C.
(c) Notwithstanding the foregoing, (i) in the event an Event of
Default under Section 8.1(a) (a "Payment Default") occurs and is not waived or
cured within 90 days following the date of the occurrence of such Event of
Default and, with respect to which Requisite Lenders have not otherwise
instructed Agent or Canadian Agent, as applicable, to accelerate the
Obligations and diligently commence realization on the Collateral, at least
two Lenders of any Class (with respect to which such Payment Default has
arisen) holding 50.1% or more of all of the unutilized Commitments and Loans
of such Class may direct Agent or Canadian Agent, as applicable, to accelerate
the Obligations and to diligently commence realization on the Collateral and
upon such direction Agent shall promptly accelerate the Obligations and
diligently commence realization on the Collateral, and (ii) in the event an
Event of Default under Section 8.1(b) occurs as a result of a breach of a
covenant under Section (b) or (c) of Annex G or an Event of Default under
Section 8.1(c) occurs as a result of a breach of a covenant under Section (a),
(b) or (d) of Annex E, such Event of Default is not waived within 120 days
following the occurrence of such Event of Default and Requisite Lenders have
not otherwise instructed Agent
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or Canadian Agent, as applicable, to accelerate the Obligations and diligently
commence realization on the Collateral, at least two Lenders holding 50.1% or
more of the unutilized Commitments and Loans of any Class may direct Agent or
Canadian Agent, as applicable, to accelerate the Obligations and to diligently
commence realization on the Collateral and upon such direction Agent shall
promptly accelerate the Obligations and diligently commence realization on the
Collateral; provided, however, that a vote by GE Capital, GE Capital Canada or
any Affiliate thereof with respect to any matter shall count as one vote for
purposes of determining whether there are at least two votes in the Class
consisting of A Loan Lenders and Canadian Lenders and, if there is only one
Lender in a Class, only the vote of such Lender shall be required or, if there
are only two Lenders in a Class, only the vote of the Lender in such Class
that has the highest percentage of unutilized Commitments and Loans in such
Class shall be required.
8.3 Waivers by Credit Parties. Except as otherwise provided for in
this Agreement, each Credit Party waives, to the fullest extent permitted by
law, (including for purposes of Section 12): (a) presentment, demand and
protest and notice of presentment, dishonor, notice of intent to accelerate,
notice of acceleration, protest, default, nonpayment, maturity, release,
compromise, settlement, extension or renewal of any or all commercial paper,
accounts, contract rights, documents, instruments, chattel paper and
guaranties at any time held by Agent or Canadian Agent on which any Credit
Party may in any way be liable, and hereby ratifies and confirms whatever
Agent or Canadian Agent may do in this regard, (b) all rights to notice and a
hearing prior to Agent's or Canadian Agent's taking possession or control of,
or to Agent's or Canadian Agent's replevy, attachment or levy upon, the
Collateral or any bond or security that might be required by any court prior
to allowing Agent or Canadian Agent to exercise any of its remedies, and (c)
the benefit of all valuation, appraisal, marshaling and exemption laws. Each
Credit Party acknowledges that in the event such Credit Party fails to
perform, observe or discharge any of its obligations or liabilities under this
Agreement or any other Loan Document, any remedy of law may prove to be
inadequate relief to the Agent, the Canadian Agent and the Lenders; therefore,
such Credit Party agrees, except as otherwise provided in this Agreement or by
applicable law, that the Agent, the Canadian Agent and the Lenders shall be
entitled to temporary and permanent injunctive relief in any such case without
the necessity of proving actual damages.
9. ASSIGNMENT AND PARTICIPATIONS; APPOINTMENT OF AGENT AND CANADIAN AGENT
9.1 Assignment and Participations.
(a) Subject to the terms of this Section 9.1, any Lender may make an
assignment to a Qualified Assignee of, or sell participations in, at any time
or times, the Loan Documents, Loans, Letter of Credit Obligations and any
Commitment or any portion thereof or interest therein, including any Lender's
rights, title, interests, remedies, powers or duties thereunder. Any
assignment by a Lender shall: (i) require the consent of Agent (which consent
shall not be unreasonably withheld or delayed with respect to a Qualified
Assignee and which consent shall not be required with respect to any
assignment to an Affiliate of a Lender or another existing Lender) and the
execution of an assignment agreement (an "Assignment Agreement") substantially
in the form attached hereto as Exhibit 9.1(a) and otherwise in form
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and substance reasonably satisfactory to, and acknowledged by, Agent; (ii) be
conditioned on such assignee Lender representing to the assigning Lender and
Agent that it is purchasing the applicable Loans to be assigned to it for its
own account, for investment purposes and not with a view to the distribution
thereof; (iii) after giving effect to any such partial assignment, result in
the assignee Lender having Commitments in an amount at least equal to
$5,000,000 and result in the assigning Lender having retained Commitments in
an amount at least equal to $5,000,000 (unless such sale is of all of such
assigning Lender's Commitments); (iv) include a payment to Agent of an
assignment fee of $3,500; provided, however, that an assignment fee shall not
be required with respect to any assignment by a Lender to an Affiliate of such
Lender; (v) assignments of the US Revolving Loan Commitment and the Term Loan
A Commitment and Term Loan A must be made on a pro rata basis, (vi)
assignments of the Canadian Revolving Loan Commitment and the Canadian Term
Loan must be made on a pro rata basis, and (vii) so long as no Event of
Default has occurred and is continuing, require the consent of Borrower
Representative, which shall not be unreasonably withheld or delayed; provided
that no such consent shall be required for an assignment to a Qualified
Assignee. In the case of an assignment by a Lender under this Section 9.1, the
assignee shall have, to the extent of such assignment, the same rights,
benefits and obligations as all other Lenders hereunder. The assigning Lender
shall be relieved of its obligations hereunder with respect to its Commitments
or assigned portion thereof from and after the date of such assignment. Each
Borrower hereby acknowledges and agrees that any assignment shall give rise to
a direct obligation of US Borrowers to the assignee that becomes a US Lender,
or Canadian Borrower to an assignee that becomes a Canadian Lender, and that
the assignee shall be considered to be a "Lender". In all instances, each
Lender's liability to make Loans hereunder shall be several and not joint and
shall be limited to such US Lender's US Pro Rata Share or such Canadian
Lender's Canadian Pro Rata Share of the applicable Commitment. In the event
Agent, Canadian Agent or any Lender assigns or otherwise transfers all or any
part of the Obligations, Agent, Canadian Agent or any such Lender shall so
notify the applicable Borrowers and such Borrowers shall, upon the request of
Agent, Canadian Agent or such Lender, execute new Notes in exchange for the
Notes, if any, being assigned. Notwithstanding the foregoing provisions of
this Section 9.1(a), any US Lender may at any time pledge the Obligations held
by it and such US Lender's rights under this Agreement and the other Loan
Documents to a Federal Reserve Bank, and any US Lender that is an investment
fund may assign the Obligations held by it and such US Lender's rights under
this Agreement and the other Loan Documents to another investment fund managed
by the same investment advisor; provided, that no such pledge to a Federal
Reserve Bank shall release such US Lender from such US Lender's obligations
hereunder or under any other Loan Document.
(b) (i) Any participation by a Lender of all or any part of its
Commitments shall be made with the understanding that all amounts payable by
Borrowers hereunder shall be determined as if that Lender had not sold such
participation, and that the holder of any such participation shall not be
entitled to require such Lender to take or omit to take any action hereunder
except actions directly affecting (A) any reduction in the principal amount
of, or interest rate or Fees payable with respect to, any Loan in which such
holder participates, (B) any extension of the scheduled amortization of the
principal amount of any Loan in which such holder participates or the final
maturity date thereof, and (C) any release of all or substantially all of the
Collateral (other than in accordance with the terms of this Agreement, the
Collateral Documents or the other Loan Documents). (ii) Solely for purposes of
Sections 1.13, 1.15, 1.16 and 9.8, each Borrower acknowledges and agrees that
a participation shall give rise to a direct
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obligation of Borrowers to the participant and the participant shall be
considered to be a "Lender"; provided, however, that a participant shall not
be entitled to receive any greater payment under Section 1.15 than the
applicable Lender would have been entitled to receive with respect to the
participation sold to such participant. A participant that would be a Foreign
Lender if it were a Lender shall not be entitled to the benefits of Section
1.15 unless Borrower Representative is notified of the participation sold to
such participant and the participant agrees, for the benefit of Borrowers, to
comply with the provisions of Section 1.15(d). Except as set forth in the
first sentence of this clause (ii) no Borrower or Credit Party shall have any
obligation or duty to any participant. None of Agent, Collateral Agent or any
Lender (other than the Lender selling a participation) shall have any duty to
any participant and may continue to deal solely with the Lender selling a
participation as if no such sale had occurred.
(c) Except as expressly provided in this Section 9.1, no Lender
shall, as between Borrowers and that Lender, or Agent or Collateral Agent and
that Lender, be relieved of any of its obligations hereunder as a result of
any sale, assignment, transfer or negotiation of, or granting of participation
in, all or any part of the Loans, the Notes or other Obligations owed to such
Lender.
(d) Each Credit Party executing this Agreement shall assist any
Lender permitted to sell assignments or participations under this Section 9.1
as reasonably required to enable the assigning or selling Lender to effect any
such assignment or participation, including the execution and delivery of any
and all agreements, notes and other documents and instruments as shall be
requested and, if requested by Agent or Collateral Agent, the preparation of
informational materials for, and the participation of management in meetings
with, potential assignees or participants. Each Credit Party executing this
Agreement shall certify the correctness, completeness and accuracy of all
descriptions of the Credit Parties and their respective affairs contained in
any selling materials provided by them and all other information provided by
them and included in such materials, except that any Projections delivered by
Borrowers shall only be certified by Borrowers as having been prepared by
Borrowers in compliance with the representations contained in Section 3.4(c).
(e) Any Lender may furnish any information concerning Credit Parties
in the possession of such Lender from time to time to assignees and
participants (including prospective assignees and participants); provided that
such Lender shall obtain from assignees or participants confidentiality
covenants substantially equivalent to those contained in Section 11.8.
(f) So long as no Event of Default has occurred and is continuing,
no Lender shall assign or sell participations in any portion of its Loans or
Commitments to a potential Lender or participant, if, as of the date of the
proposed assignment or sale, the assignee Lender or participant would be
subject to capital adequacy or similar requirements under Section 1.16(a),
increased costs under Section 1.16(b), an inability to fund LIBOR Loans or BA
Rate Loans under Section 1.16(c), or withholding taxes in accordance with
Section 1.15(a).
(g) Notwithstanding anything to the contrary contained herein, any
US Lender (a "Granting Lender"), may grant to a special purpose funding
vehicle (an "SPC"), identified as such in writing by the Granting Lender to
Agent and US Borrowers, the option to provide to US Borrowers all or any part
of any Loans that such Granting Lender would otherwise be obligated
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to make to US Borrowers pursuant to this Agreement; provided that (i) nothing
herein shall constitute a commitment by any SPC to make any Loan; and (ii) if
an SPC elects not to exercise such option or otherwise fails to provide all or
any part of such Loan, the Granting Lender shall be obligated to make such
Loan pursuant to the terms hereof. The making of a Loan by an SPC hereunder
shall utilize the Commitment of the Granting Lender to the same extent, and as
if such Loan were made by such Granting Lender. No SPC shall be liable for any
indemnity or similar payment obligation under this Agreement (all liability
for which shall remain with the Granting Lender). Any SPC may (i) with notice
to, but without the prior written consent of, US Borrowers and Agent and
without paying any processing fee therefor assign all or a portion of its
interests in any US Loans to the Granting Lender or to any financial
institutions (consented to by US Borrowers and Agent) providing liquidity
and/or credit support to or for the account of such SPC to support the funding
or maintenance of US Loans and (ii) disclose on a confidential basis any
non-public information relating to its US Loans to any rating agency,
commercial paper dealer or provider of any surety, guarantee or credit or
liquidity enhancement to such SPC. This Section 9.1(g) may not be amended
without the prior written consent of each Granting Lender, all or any of whose
Loans are being funded by an SPC at the time of such amendment. For the
avoidance of doubt, the Granting Lender shall for all purposes, including
without limitation, the approval of any amendment or waiver of any provision
of any Loan Document or the obligation to pay any amount otherwise payable by
the Granting Lender under the Loan Documents, continue to be the US Lender of
record hereunder.
9.2 Appointment of Agent. GE Capital is hereby appointed to act on
behalf of all US Lenders and Canadian Agent with respect to the administration
of Loans made to US Borrowers and to act as agent and, with respect to the
Shared Collateral, Collateral Agent on behalf of all Lenders and Canadian
Agent with respect to Collateral of US Credit Parties under this Agreement and
the other Loan Documents. GE Capital Canada is hereby appointed to act as
Canadian Agent on behalf of all Canadian Lenders with respect to the
administration of all Loans made to Canadian Borrower and with respect to all
Collateral of Canadian Credit Parties under this Agreement and the other Loan
Documents. The provisions of this Section 9.2 are solely for the benefit of
Agent, Canadian Agent and Lenders and no Credit Party nor any other Person
shall have any rights as a third party beneficiary of any of the provisions
hereof. In performing its functions and duties under this Agreement and the
other Loan Documents, Agent shall act solely as an agent of Lenders and
Canadian Agent shall act solely as agent of Canadian Lenders and neither Agent
nor Canadian Agent assumes or shall be deemed to have assumed any obligation
toward or relationship of agency or trust with or for any Credit Party or any
other Person. Neither Agent nor Canadian Agent shall have any duties or
responsibilities except for those expressly set forth in this Agreement and
the other Loan Documents. The duties of Agent and Canadian Agent shall be
mechanical and administrative in nature and neither Agent nor Canadian Agent
shall have, or be deemed to have, by reason of this Agreement, any other Loan
Document or otherwise a fiduciary relationship in respect of any Lender.
Except as expressly set forth in this Agreement and the other Loan Documents,
neither Agent nor Canadian Agent shall have any duty to disclose, nor shall it
be liable for failure to disclose, any information relating to any Credit
Party or any of their respective Subsidiaries or any Account Debtor that is
communicated to or obtained by GE Capital, GE Capital Canada or any of their
Affiliates in any capacity. None of Agent, Canadian Agent or any of their
Affiliates nor any of their respective officers, directors, employees, agents
or representatives shall be liable to any Lender for any action taken or
omitted to be taken by it hereunder or under any other Loan Document,
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or in connection herewith or therewith, except for damages caused by its or
their own gross negligence or willful misconduct.
If Agent or Canadian Agent shall request instructions from Requisite
Lenders, Requisite Revolving Lenders, Super-Majority Revolving Lenders, all
affected Lenders or, with respect to the matters set forth in Section 8.2(c),
the Lenders required under Section 8.2(c) with respect to any act or action
(including failure to act) in connection with this Agreement or any other Loan
Document, then Agent or Canadian Agent, as the case may be, shall be entitled
to refrain from such act or taking such action unless and until Agent or
Canadian Agent, as the case may be, shall have received instructions from
Requisite Lenders, Requisite Revolving Lenders, Super-Majority Revolving
Lenders, all affected Lenders or, with respect to the matters set forth in
Section 8.2(c), the Lenders required under Section 8.2(c), as the case may be,
and neither Agent nor Canadian Agent shall incur liability to any Person by
reason of so refraining. Each of Agent and Canadian Agent shall be fully
justified in failing or refusing to take any action hereunder or under any
other Loan Document (a) if such action would, in the opinion of Agent or
Canadian Agent, as the case may be, be contrary to law or the terms of this
Agreement or any other Loan Document, (b) if such action would, in the opinion
of Agent or Canadian Agent, as the case may be, expose Agent or Canadian Agent
to Environmental Liabilities or (c) if Agent or Canadian Agent shall not first
be indemnified to its satisfaction against any and all liability and expense
which may be incurred by it by reason of taking or continuing to take any such
action. Without limiting the foregoing, no Lender shall have any right of
action whatsoever against Agent or Canadian Agent as a result of Agent or
Canadian Agent acting or refraining from acting hereunder or under any other
Loan Document in accordance with the instructions of Requisite Lenders,
Requisite Revolving Lenders, Super-Majority Revolving Lenders, all affected
Lenders or, with respect to the matters set forth in Section 8.2(c), the
Lenders required under Section 8.2(c), as applicable.
Without limiting any of the foregoing provisions in favor of Agent
or Canadian Agent, for the purposes of holding any security granted by any
Credit Party pursuant to the laws of the Province of Quebec, including any
deed of hypothec, debenture, bond or other title of indebtedness and debenture
or bond pledge agreements, Canadian Agent is hereby appointed to act as the
Person holding an irrevocable power of attorney (fonde de pouvoir) pursuant to
article 2692 of the Civil Code of Quebec to act on behalf of each present and
future Lender. By executing an Assignment Agreement, each future Lender shall
be deemed to ratify the power of attorney (fonde de pouvoir) granted herein.
Canadian Agent agrees to act in such capacity. Each party hereto agrees that,
notwithstanding Section 32 of an Act respecting the Special Powers of Legal
Persons (Quebec), Canadian Agent may, as the Person holding the power of
attorney of Lenders, acquire and or be the pledgee of any debentures, bonds or
other titles of indebtedness secured by any hypothec granted by any Credit
Party to the Canadian Agent pursuant to the laws of the Province of Quebec.
9.3 Agent's and Canadian Agent's Reliance, Etc. None of Agent,
Canadian Agent or any of their Affiliates nor any of their respective
directors, officers, agents or employees shall be liable for any action taken
or omitted to be taken by it or them under or in connection with this
Agreement or the other Loan Documents, except for damages caused by its or
their own gross negligence or willful misconduct. Without limiting the
generality of the foregoing, each of Agent and Canadian Agent: (a) may treat
the payee of any Note as the holder
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thereof until Agent or Canadian Agent, as the case may be, receives written
notice of the assignment or transfer thereof signed by such payee and in form
reasonably satisfactory to Agent or Canadian Agent, as applicable; (b) may
consult with legal counsel, independent public accountants and other experts
selected by it and shall not be liable for any action taken or omitted to be
taken by it in good faith in accordance with the advice of such counsel,
accountants or experts; (c) makes no warranty or representation to any Lender
and shall not be responsible to any Lender for any statements, warranties or
representations made in or in connection with this Agreement or the other Loan
Documents; (d) shall not have any duty to ascertain or to inquire as to the
performance or observance of any of the terms, covenants or conditions of this
Agreement or the other Loan Documents on the part of any Credit Party or to
inspect the Collateral (including the books and records) of any Credit Party;
(e) shall not be responsible to any Lender for the due execution, legality,
validity, enforceability, genuineness, sufficiency or value of this Agreement
or the other Loan Documents or any other instrument or document furnished
pursuant hereto or thereto; (f) shall incur no liability under or in respect
of this Agreement or the other Loan Documents by acting upon any notice,
consent, certificate or other instrument or writing (which may be by telecopy,
telegram, cable or telex) believed by it to be genuine and signed or sent by
the proper party or parties; and (g) shall be entitled to delegate any of its
duties hereunder to one or more sub-agents.
9.4 GE Capital, GE Capital Canada and Affiliates. With respect to
its Commitments hereunder, GE Capital shall have the same rights and powers
under this Agreement and the other Loan Documents as any other Lender and may
exercise the same as though it were not Agent; and the term "Lender" or
"Lenders" shall, unless otherwise expressly indicated, include GE Capital in
its individual capacity. With respect to its Commitments hereunder, GE Capital
Canada shall have the same rights and powers under this Agreement and the
other Loan Documents as any other Lender and may exercise the same as though
it were not Canadian Agent; and the term "Lender" or "Lenders" shall, unless
otherwise expressly indicated, include GE Capital Canada in its individual
capacity. GE Capital, GE Capital Canada and their Affiliates may lend money
to, invest in, and generally engage in any kind of business with, any Credit
Party, any of their Affiliates and any Person who may do business with or own
securities of any Credit Party or any such Affiliate, all as if GE Capital
were not Agent and GE Capital Canada were not Canadian Agent and without any
duty to account therefor to Lenders. GE Capital, GE Capital Canada and their
Affiliates may accept fees and other consideration from any Credit Party for
services in connection with this Agreement or otherwise without having to
account for the same to Lenders. Each Lender acknowledges the potential
conflict of interest between GE Capital and GE Capital Canada, as Lenders,
holding disproportionate interests in the Loans and GE Capital as Agent and GE
Capital Canada as Collateral Agent.
9.5 Lender Credit Decision. Each Lender acknowledges that it has,
independently and without reliance upon Agent, Canadian Agent or any other
Lender and based on the Financial Statements referred to in Section 3.4(a) and
such other documents and information as it has deemed appropriate, made its
own credit and financial analysis of the Credit Parties and its own decision
to enter into this Agreement. Each Lender also acknowledges that it will,
independently and without reliance upon Agent, Canadian Agent or any other
Lender and based on such documents and information as it shall deem
appropriate at the time, continue to make its own credit decisions in taking
or not taking action under this Agreement. Each Lender acknowledges the
potential conflict of interest of each other Lender as a result of Lenders
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holding disproportionate interests in the Loans, and expressly consents to,
and waives any claim based upon, such conflict of interest.
9.6 Indemnification. Lenders agree to indemnify Agent and Canadian
Agent (to the extent not reimbursed by Credit Parties and without limiting the
obligations of Borrowers hereunder), ratably according to their respective
commitments, from and against any and all liabilities, obligations, losses,
damages, penalties, actions, judgments, suits, costs, expenses or
disbursements of any kind or nature whatsoever that may be imposed on,
incurred by, or asserted against Agent or Canadian Agent in any way relating
to or arising out of this Agreement or any other Loan Document or any action
taken or omitted to be taken by Agent or Canadian Agent in connection
therewith; provided, that no Lender shall be liable for any portion of such
liabilities, obligations, losses, damages, penalties, actions, judgments,
suits, costs, expenses or disbursements resulting from Agent's or Canadian
Agent's gross negligence or willful misconduct. Without limiting the
foregoing, each Lender agrees to reimburse Agent and Canadian Agent promptly
upon demand for its ratable share of any out-of-pocket expenses (including
reasonable counsel fees) incurred by Agent and Canadian Agent in connection
with the preparation, execution, delivery, administration, modification,
amendment or enforcement (whether through negotiations, legal proceedings or
otherwise) of, or legal advice in respect of rights or responsibilities under,
this Agreement and each other Loan Document, to the extent that Agent or
Canadian Agent is not reimbursed for such expenses by Credit Parties.
9.7 Successor Agent.
(a) Agent may resign at any time by giving not less than 30 days'
prior written notice thereof to Lenders and Borrower Representative and, at
any time that GE Capital is no longer a holder of any Loans or Commitments,
Requisite Lenders may remove Agent at any time by giving not less than 30
days' prior written notice thereof to Agent, Lenders and Borrower
Representative. Upon any such resignation or removal, Requisite Lenders shall
have the right to appoint a successor Agent. If no successor Agent shall have
been so appointed by the Requisite Lenders and shall have accepted such
appointment within 30 days after the resigning Agent's giving notice of
resignation or Requisite Lenders' giving notice of removal, then the resigning
or removed Agent may, on behalf of Lenders, appoint a successor Agent, which
shall be a US Lender, if a US Lender is willing to accept such appointment, or
otherwise shall be a commercial bank or financial institution or a subsidiary
of a commercial bank or financial institution if such commercial bank or
financial institution is organized under the laws of the United States of
America or of any State thereof and has a combined capital and surplus of at
least $300,000,000. If no successor Agent has been appointed pursuant to the
foregoing, within 30 days after the date such notice of resignation was given
by the resigning Agent or Requisite Lenders' giving notice of removal, such
resignation shall become effective and the Requisite Lenders shall thereafter
perform all the duties of Agent hereunder until such time, if any, as the
Requisite Lenders appoint a successor Agent as provided above. Any successor
Agent appointed by Requisite Lenders hereunder shall be subject to the
approval of Borrower Representative, such approval not to be unreasonably
withheld or delayed; provided that such approval shall not be required if a
Default or an Event of Default has occurred and is continuing. Upon the
acceptance of any appointment
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as Agent hereunder by a successor Agent, such successor Agent shall succeed to
and become vested with all the rights, powers, privileges and duties of the
resigning or removed Agent. Upon the earlier of the acceptance of any
appointment as Agent hereunder by a successor Agent or the effective date of
the resigning Agent's resignation or the removed Agent's removal, the
resigning or removed Agent shall be discharged from its duties and obligations
under this Agreement and the other Loan Documents, except that any indemnity
rights or other rights in favor of such Agent shall continue. After any
Agent's resignation hereunder, the provisions of this Section 9 shall inure to
its benefit as to any actions taken or omitted to be taken by it while it was
acting as Agent under this Agreement and the other Loan Documents.
(b) Canadian Agent may resign at any time by giving not less than 30
days' prior written notice thereof to Canadian Lenders and Borrower
Representative and, at any time that GE Capital Canada is no longer a holder
of any Loans or Commitments, Requisite Lenders may remove Canadian Agent at
any time by giving not less than 30 days' prior written notice thereof to the
Agent, Canadian Agent, Lenders and Borrower Representative. Upon any such
resignation or removal, Requisite Lenders shall have the right to appoint a
successor Canadian Agent. If no successor Canadian Agent shall have been so
appointed by the Requisite Lenders and shall have accepted such appointment
within 30 days after the resigning Canadian Agent's giving notice of
resignation or Requisite Lenders' giving notice of removal, then the resigning
or removed Canadian Agent may, on behalf of Canadian Lenders, appoint a
successor Canadian Agent, which shall be a Canadian Lender, if a Canadian
Lender is willing to accept such appointment, or otherwise shall be a
commercial bank or financial institution or a subsidiary of a commercial bank
or financial institution if such commercial bank or financial institution is
organized under the laws of the Canada or a province thereof and has a
combined capital and surplus of at least $300,000,000. If no successor
Canadian Agent has been appointed pursuant to the foregoing, within 30 days
after the date such notice of resignation was given by the resigning Canadian
Agent or Requisite Lenders' giving notice of removal, such resignation shall
become effective and the Requisite Lenders shall thereafter perform all the
duties of Canadian Agent hereunder until such time, if any, as the Requisite
Lenders appoint a successor Canadian Agent as provided above. Any successor
Canadian Agent appointed by Requisite Lenders hereunder shall be subject to
the approval of Borrower Representative, such approval not to be unreasonably
withheld or delayed; provided that such approval shall not be required if a
Default or an Event of Default has occurred and is continuing. Upon the
acceptance of any appointment as Canadian Agent hereunder by a successor
Canadian Agent, such successor Canadian Agent shall succeed to and become
vested with all the rights, powers, privileges and duties of the resigning or
removed Canadian Agent. Upon the earlier of the acceptance of any appointment
as Canadian Agent hereunder by a successor Canadian Agent or the effective
date of the resigning Canadian Agent's resignation or the removed Canadian
Agent's removal, the resigning or removed Canadian Agent shall be discharged
from its duties and obligations under this Agreement and the other Loan
Documents, except that any indemnity rights or other rights in favor of such
Canadian Agent shall continue. After any Canadian Agent's resignation
hereunder, the provisions of this Section 9 shall inure to its benefit as to
any actions taken or omitted to be taken by it while it was acting as Canadian
Agent under this Agreement and the other Loan Documents.
9.8 Setoff and Sharing of Payments. In addition to any rights now or
hereafter granted under applicable law and not by way of limitation of any
such rights, upon the occurrence and during the continuance of any Event of
Default and subject to Section 9.9(f), each Lender is hereby authorized at any
time or from time to time, without notice to any Credit
76
Party or to any other Person, any such notice being hereby expressly waived,
to offset and to appropriate and to apply any and all balances held by it at
any of its offices for the account of Borrowers or Guarantors (regardless of
whether such balances are then due to Borrowers or Guarantors) and any other
properties or assets at any time held or owing by that Lender or that holder
to or for the credit or for the account of Borrowers or Guarantors against and
on account of any of the Obligations that are not paid when due. Any Lender
exercising a right of setoff or otherwise receiving any payment on account of
the Obligations shall purchase for cash (and the other Lenders or holders
shall sell) such participations in each such other Lender's or holder's
Obligations as would be necessary to cause such Lender to share the amount so
offset or otherwise received with each other Lender or holder in accordance
with any agreement among the Lenders (other than offset rights exercised by
any Lender with respect to Sections 1.13, 1.15 or 1.16). Each US Lender's
obligation under this Section 9.8 shall be in addition to and not in
limitation of its obligations to purchase a participation in an amount equal
to its US Pro Rata Share of the Swing Line Loans under Section 1.1. Each
Credit Party that is a Borrower or Guarantor agrees, to the fullest extent
permitted by law, that (a) any Lender may exercise its right to offset with
respect to amounts in excess of the Obligations owed to it and may sell
participations in such amounts so offset to other Lenders and holders and (b)
any Lender so purchasing a participation in the Loans made or other
Obligations held by other Lenders or holders may exercise all rights of
offset, bankers' lien, counterclaim or similar rights with respect to such
participation as fully as if such Lender or holder were a direct holder of the
Loans and the other Obligations in the amount of such participation.
Notwithstanding the foregoing, (i) if all or any portion of the offset amount
or payment otherwise received is thereafter recovered from the Lender that has
exercised the right of offset, the purchase of participations by that Lender
shall be rescinded and the purchase price restored without interest and (ii)
any amount received hereunder from a Canadian Credit Party shall only be used
to reduce the Canadian Obligations and not the US Obligations.
9.9 Advances; Payments; Non-Funding Lenders; Information; Actions
in Concert.
(a) Advances; Payments.
(i) A Loan Lenders shall refund or participate in the Swing
Line Loan in accordance with clauses (iii) and (iv) of Section 1.1(c). If the
Swing Line Lender declines to make a Swing Line Loan or if Swing Line
Availability is zero, Agent shall notify A Loan Lenders, promptly after
receipt of a Notice of US Revolving Credit Advance and in any event prior to
2:00 p.m. (New York time) on the date such Notice of US Revolving Advance is
received, by telecopy, telephone or other similar form of transmission. Each A
Loan Lender shall make the amount of such Lender's US Pro Rata Share of such
US Revolving Credit Advance available to Agent in same day funds by wire
transfer to Agent's account as set forth in Annex H not later than 3:00 p.m.
(New York time) on the requested funding date, in the case of a US Index Rate
Loan, and not later than 12:00 noon (New York time) on the requested funding
date, in the case of a LIBOR Loan. After receipt of such wire transfers (or,
in the Agent's sole discretion, before receipt of such wire transfers),
subject to the terms hereof, Agent shall make the requested US Revolving
Credit Advance to the US Borrower designated by Borrower Representative in the
Notice of US Revolving Credit Advance. Canadian Agent shall notify Canadian
Lenders, promptly after receipt of a Notice of Canadian Revolving Credit
Advance and
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in any event prior to 2:00 p.m. (New York time) on the date such Notice of
Canadian Revolving Credit Advance is received, by telecopy, telephone or other
similar form of transmission. Each Canadian Lender shall make the amount of
such Lender's Canadian Pro Rata Share of such Canadian Revolving Credit
Advance available to Canadian Agent in same day funds by wire transfer to
Canadian Agent's account as set forth in Annex H not later than 3:00 p.m. (New
York time) on the requested funding date, in the case of a Canadian Index Rate
Loan or a US Index Rate Loan, and not later than 12:00 noon (New York time) on
the requested funding date, in the case of a LIBOR Loan or a BA Rate Loan.
After receipt of such wire transfers (or, in the Canadian Agent's sole
discretion, before receipt of such wire transfers), subject to the terms
hereof, Canadian Agent shall make the requested Canadian Revolving Credit
Advance to Canadian Borrower. Agent shall notify B Loan Lenders, promptly
after receipt of a Notice of Term Loan B Advance and in any event prior to
2:00 p.m. (New York time) on the date such Notice of Term Loan B Advance is
received by telecopy, telephone or other similar form of transmission. Each B
Loan Lender shall make the amount of such Lender's US Pro Rata Share of such
Advance under the Term Loan B Commitment available to Agent in same day funds
by wire transfer to Agent's account as set forth in Annex H not later than
3:00 p.m. (New York time) on the requested funding date, in the case of a US
Index Rate Loan, and not later than 12:00 noon (New York time) on the
requested funding date, in the case of a LIBOR Loan. After receipt of such
wire transfers (or, in the Agent's sole discretion, before receipt of such
wire transfers), subject to the terms hereof, Agent shall make the requested
Advance under the Term Loan B Commitment to the US Borrower designated by
Borrower Representative in the Notice of Term Loan B Advance. All payments by
each Lender shall be made without setoff, counterclaim or deduction of any
kind.
(ii) On the 2nd Business Day of each calendar week or more
frequently at Agent's or Canadian Agent's election (each, a "Settlement
Date"), Agent shall advise each US Lender and Canadian Agent shall advise each
Canadian Lender by telephone, or telecopy of the amount of such Lender's
Applicable Pro Rata Share of principal, interest and Fees paid for the benefit
of US Lenders, with respect to the US Obligations, or Canadian Lenders, with
respect to the Canadian Obligations. Provided that each Lender has funded all
payments or Advances required to be made by it and has purchased all
participations required to be purchased by it under this Agreement and the
other Loan Documents as of such Settlement Date, Agent shall pay to each US
Lender such Lender's US Pro Rata Share of principal, interest and Fees paid by
US Borrowers since the previous Settlement Date for the benefit of such Lender
on the Loans held by it and Canadian Agent shall pay to each Canadian Lender
such Lender's Canadian Pro Rata Share of principal, interest and Fees paid by
Canadian Borrower since the previous Settlement Date for the benefit of such
Lenders on the Loans held by it. To the extent that any Lender (a "Non-Funding
Lender") has failed to fund all such payments and Advances or failed to fund
the purchase of all such participations, with respect to any Non-Funding
Lender that is a US Lender, Agent shall be entitled to set off the funding
short-fall against that Non-Funding Lender's US Pro Rata Share of all payments
received from US Borrowers and, with respect to any Non-Funding Lender that is
a Canadian Lender, Canadian Agent shall be entitled to set off the funding
short-fall against that Non-Funding Lender's Canadian Pro Rata Share of all
payments received from Canadian Borrower. Such payments shall be made by wire
transfer to such Lender's account (as specified by such Lender in Annex H or
the applicable Assignment Agreement) not later than 2:00 p.m. (New York time)
on the next Business Day following each Settlement Date.
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(b) Availability of Lender's Pro Rata Share. Agent may assume that
each US Lender will make its US Pro Rata Share of each US Loan available to
Agent on each funding date unless Agent has received prior written notice from
such Lender that it does not intend to make its US Pro Rata Share of a US Loan
because all or any of the conditions set forth in Section 2.2 have not been
satisfied. If such US Pro Rata Share is not, in fact, paid to Agent by such US
Lender when due, Agent will be entitled to recover such amount on demand from
such US Lender without setoff, counterclaim or deduction of any kind. If any
US Lender fails to pay the amount of its US Pro Rata Share forthwith upon
Agent's demand, Agent shall promptly notify Borrower Representative and US
Borrowers shall immediately repay such amount to Agent. Canadian Agent may
assume that each Canadian Lender will make its Canadian Pro Rata Share of each
Canadian Loan available to Canadian Agent on each funding date unless Canadian
Agent has received written notice from such Lender that it does not intend to
make its Canadian Pro Rata Share of a Canadian Loan because all or any of the
conditions set forth in Section 2.2 have not been satisfied. If such Canadian
Pro Rata Share is not, in fact, paid to Canadian Agent by such Canadian Lender
when due, Canadian Agent will be entitled to recover such amount on demand
from such Canadian Lender without setoff, counterclaim or deduction of any
kind. If any Canadian Lender fails to pay the amount of its Canadian Pro Rata
Share forthwith upon Canadian Agent's demand, Canadian Agent shall promptly
notify Borrower Representative and Canadian Borrower shall immediately repay
such amount to Canadian Agent. Nothing in this Section 9.9(b) or elsewhere in
this Agreement or the other Loan Documents shall be deemed to require Agent or
Canadian Agent to advance funds on behalf of any Lender or to relieve any
Lender from its obligation to fulfill its Commitments hereunder or to
prejudice any rights that Borrowers may have against any Lender as a result of
any default by such Lender hereunder. Unless Agent has received prior written
notice from a US Lender that it does not intend to make its US Pro Rata Share
of each US Loan available to Agent because all or any of the conditions set
forth in Section 2.2 have not been satisfied, to the extent that Agent
advances funds to any US Borrower on behalf of such US Lender and is not
reimbursed therefor on the same Business Day as such Advance is made, Agent
shall be entitled to retain for its account all interest accrued on such
Advance until reimbursed by such US Lender. Unless Canadian Agent has received
prior written notice from a Canadian Lender that it does not intend to make
its Canadian Pro Rata Share of each Canadian Loan available to Canadian Agent
because all or any of the conditions set forth in Section 2.2 have not been
satisfied, to the extent that Canadian Agent advances funds to Canadian
Borrower on behalf of any Canadian Lender and is not reimbursed therefor on
the same Business Day as such Advance is made, Canadian Agent shall be
entitled to retain for its account all interest accrued on such Advance until
reimbursed by the applicable Canadian Lender.
(c) Return of Payments.
(i) If Agent pays an amount to a US Lender or Canadian Agent
pays an amount to a Canadian Lender under this Agreement in the belief or
expectation that a related payment has been or will be received by Agent from
US Borrowers, in the case of the US Obligations, or Canadian Agent from
Canadian Borrower, in the case of the Canadian Obligations, and such related
payment is not received by Agent or Canadian Agent, as applicable, then Agent
or Canadian Agent, as applicable, will be entitled to recover such amount from
such Lender on demand without setoff, counterclaim or deduction of any kind.
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(ii) If Agent or Canadian Agent determines at any time that any
amount received by Agent or Canadian Agent, as the case may be, under this
Agreement must be returned to any Borrower or paid to any other Person
pursuant to any insolvency law or otherwise, then, notwithstanding any other
term or condition of this Agreement or any other Loan Document, Agent or
Canadian Agent, as applicable, will not be required to distribute any portion
thereof to any Lender. In addition, each Lender will repay to Agent or
Canadian Agent, as applicable, on demand any portion of such amount that Agent
or Canadian Agent, as applicable, has distributed to such Lender, together
with interest at such rate, if any, as Agent or Canadian Agent, as applicable,
is required to pay to any Borrower or such other Person, without setoff,
counterclaim or deduction of any kind.
(d) Non-Funding Lenders. The failure of any Non-Funding Lender to
make any Advance or any payment required by it hereunder or to purchase any
participation in any Swing Line Loan to be made or purchased by it on the date
specified therefor shall not relieve any other Lender (each such other Lender,
an "Other Lender") of its obligations to make such Advance or purchase such
participation on such date, but none of any Other Lender, Agent or Canadian
Agent shall be responsible for the failure of any Non-Funding Lender to make
an Advance, purchase a participation or make any other payment required
hereunder. Notwithstanding anything set forth herein to the contrary, a
Non-Funding Lender shall not have any voting or consent rights under or with
respect to any Loan Document or constitute a "Lender", "A Loan Lender", "B
Loan Lender" or "Canadian Lender" (or be included in the calculation of
"Requisite Lenders", "Requisite Revolving Lenders" or "Super-Majority
Revolving Lenders" hereunder) for any voting or consent rights under or with
respect to any Loan Document. At Borrower Representative's request, Agent or a
Person reasonably acceptable to Agent shall have the right with Agent's
consent and in Agent's sole discretion (but shall have no obligation) to
purchase from any Non-Funding Lender that is a US Lender, and each such
Non-Funding Lender agrees that it shall, at Agent's request, sell and assign
to Agent or such Person, all of the Commitments of that Non-Funding Lender for
an amount equal to the principal balance of all Loans held by such Non-Funding
Lender and all accrued interest and fees with respect thereto through the date
of sale, such purchase and sale to be consummated pursuant to an executed
Assignment Agreement. At Borrower Representative's request, Canadian Agent or
a Person reasonably acceptable to Canadian Agent shall have the right with
Canadian Agent's consent and in Canadian Agent's sole discretion (but shall
have no obligation) to purchase from any Non-Funding Lender that is a Canadian
Lender, and each such Non-Funding Lender agrees that it shall, at Canadian
Agent's request, sell and assign to Canadian Agent or such Person, all of the
Commitments of that Non-Funding Lender for an amount equal to the principal
balance of all Loans held by such Non-Funding Lender and all accrued interest
and fees with respect thereto through the date of sale, such purchase and sale
to be consummated pursuant to an executed Assignment Agreement.
(e) Dissemination of Information. Agent or Canadian Agent shall use
reasonable efforts to provide the applicable Lenders under the Obligations
being administered by such agent with any notice of Default or Event of
Default received by it from, or delivered by it to, any Credit Party, with
notice of any Event of Default of which it has actually become aware and with
notice of any action taken by it following any Event of Default; provided,
that neither Agent nor Canadian Agent shall be liable to any Lender for any
failure to do so, except to the extent that such failure is attributable to
Agent's or Canadian Agent's gross negligence or willful
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misconduct. Lenders acknowledge that Borrowers are required to provide
Financial Statements and Collateral Reports to Lenders in accordance with
Annexes E and F hereto and agree that neither Agent nor Canadian Agent shall
have any duty to provide the same to Lenders.
(f) Actions in Concert. Anything in this Agreement to the contrary
notwithstanding, each Lender hereby agrees with each other Lender that no
Lender shall take any action to protect or enforce its rights arising out of
this Agreement or the Notes (including exercising any rights of setoff)
without first obtaining the prior written consent of Agent, Canadian Agent and
Requisite Lenders, it being the intent of Lenders that any such action to
protect or enforce rights under this Agreement and the Notes shall be taken in
concert and at the direction or with the consent of Agent, Canadian Agent or
Requisite Lenders; provided, however, that (i) each Lender shall be entitled
to file a proof of claim in any proceeding under any Insolvency Law to the
extent such Lender disagrees with Agent's or Canadian Agent's composite proof
of claim filed on behalf of all Lenders, (ii) each Lender shall be entitled to
vote its claim with respect to any plan of reorganization in any proceeding
under any Insolvency Law and (iii) each Lender shall be entitled to pursue its
deficiency claim after liquidation of all or substantially all of the
Collateral and application of the proceeds therefrom. Notwithstanding the
foregoing, this Section 9.9(f) will not limit the ability of Lenders required
under Section 8.2(c) to give any instructions to Agent as described in and
pursuant to the terms of Section 8.2(c).
9.10 Collateral Matters.
(a) Lenders hereby irrevocably authorize Agent, at its option and in
its sole discretion, to release or direct the Canadian Agent to release any
Liens upon any Collateral (i) upon the termination of the Commitments and
payment and satisfaction in full by Borrowers of all Loans and reimbursement
obligations in respect of Letters of Credit, and the termination of all
outstanding Letters of Credit (whether or not any of such obligations are due)
and all other Obligations; (ii) constituting property being sold or disposed
of if Borrowers certify to Agent that the sale or disposition is made in
compliance with Section 6.8 (and Agent may rely conclusively on any such
certificate, without further inquiry); (iii) constituting property in which
Credit Parties owned no interest at the time the Lien was granted or at any
time thereafter; or (iv) constituting property leased to Credit Parties under
a lease which has expired or been terminated in a transaction permitted under
this Agreement. Except as provided above, Agent will not release, or instruct
the Canadian Agent to release, any of its Liens without the prior written
authorization of the Lenders; provided that Agent may (so long as (x) no
Default or Event of Default has occurred and is continuing, or would result
therefrom and (y) Credit Parties have provided evidence to Agent (in form and
substance satisfactory to the Agent) that EBITDA of Holdings and its
Subsidiaries on a consolidated basis for the most recently ended four fiscal
quarters, exclusive of the amount of such EBITDA which is attributable to the
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assets of Credit Parties so released from the Collateral, would not be less
than $75,000,000), in its discretion, release, or instruct the Canadian Agent
to release, its Liens on Collateral valued in the aggregate for all such
releases from and after the Closing Date not in excess of $2,500,000 during
each Fiscal Year without the prior written authorization of any Lenders and
Agent may (so long as (x) no Default or Event of Default has occurred and is
continuing, or would result therefrom and (y) Credit Parties have provided
evidence to Agent (in form and substance satisfactory to the Agent) that
EBITDA of Holdings and its Subsidiaries on a consolidated basis for the most
recently ended four fiscal quarters, exclusive of the amount of such EBITDA
which is attributable to the assets of Credit Parties so released from the
Collateral, would not be less than $75,000,000) release, or instruct the
Canadian Agent to release, its Liens on Collateral valued in the aggregate for
all such releases from and after the Closing Date greater than $2,500,000 but
not in excess of 10% of the aggregate Commitments as of the Closing Date with
the prior written authorization of Requisite Lenders. Upon request by Agent or
Borrowers at any time, Lenders will confirm in writing Agent's or Canadian
Agent's authority to release any Liens upon particular types or items of
Collateral pursuant to this Section 9.10.
(b) Upon receipt by Agent of any authorization required pursuant to
Section 9.10 from Lenders of Agent's or Canadian Agent's authority to release
any Liens upon particular types or items of Collateral, and upon at least five
Business Days' prior written request by Borrowers, Agent shall or shall cause
Canadian Agent to (and is hereby irrevocably authorized by Lenders to) execute
such documents as may be necessary to evidence the release of its Liens upon
such Collateral; provided, however, that (i) neither Agent nor Canadian Agent
shall be required to execute any such document on terms which, in Agent's or
Canadian Agent's opinion, would expose Agent or Canadian Agent to liability or
create any obligation or entail any consequence other than the release of such
Liens without recourse or warranty, and (ii) such release shall not in any
manner discharge, affect or impair the Obligations or any Liens (other than
those expressly being released) upon (or obligations of Credit Parties in
respect of) all interests retained by Credit Parties, including the proceeds
of any sale, all of which shall continue to constitute part of the Collateral.
10. SUCCESSORS AND ASSIGNS
10.1 Successors and Assigns. This Agreement and the other Loan
Documents shall be binding on and shall inure to the benefit of each Credit
Party, Agent, Canadian Agent, Lenders and their respective successors and
assigns (including, in the case of any Credit Party, a debtor-in-possession on
behalf of such Credit Party), except as otherwise provided herein or therein.
No Credit Party may assign, transfer, hypothecate or otherwise convey its
rights, benefits, obligations or duties hereunder or under any of the other
Loan Documents without the prior express written consent of Agent, Canadian
Agent and Lenders. Any such purported assignment, transfer, hypothecation or
other conveyance by any Credit Party without the prior express written consent
of Agent, Canadian Agent and Lenders shall be void. The terms and provisions
of this Agreement are for the purpose of defining the relative rights and
obligations of each Credit Party, Agent, Canadian Agent and Lenders with
respect to the transactions contemplated hereby and no Person shall be a third
party beneficiary of any of the terms and provisions of this Agreement or any
of the other Loan Documents.
11. MISCELLANEOUS
11.1 Complete Agreement; Modification of Agreement. The Loan
Documents constitute the complete agreement between the parties with respect
to the subject matter thereof and may not be modified, altered or amended
except as set forth in Section 11.2. Any letter of interest, commitment letter
or fee letter (other than the GE Capital Fee Letter) or confidentiality
agreement, if any, between any Credit Party and Agent, Canadian Agent or any
Lender or any of their respective Affiliates, predating this Agreement and
relating to a financing of substantially similar form, purpose or effect shall
be superseded by this Agreement.
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11.2 Amendments and Waivers.
(a) Except for actions expressly permitted to be taken by Agent or
Canadian Agent, no amendment, modification, termination or waiver of any
provision of this Agreement or any other Loan Document, or any consent to any
departure by any Credit Party therefrom, shall in any event be effective
unless the same shall be in writing and signed by Borrowers and by Requisite
Lenders, Requisite Revolving Lenders, Super-Majority Revolving Lenders or all
affected Lenders, as applicable, and delivered to Agent and Canadian Agent.
Except as set forth in clauses (b) and (c) below, all such amendments,
modifications, terminations or waivers requiring the consent of any Lenders
shall require the written consent of Requisite Lenders.
(b) No amendment, modification, termination or waiver of or consent
with respect to any provision of this Agreement that makes less restrictive
the nondiscretionary criteria for exclusion from Eligible Accounts and
Eligible Inventory set forth in Sections 1.6 and 1.7, shall be effective
unless the same shall be in writing and signed by Super-Majority Revolving
Lenders and Borrowers and delivered to Agent and Canadian Agent. In addition,
Requisite Lender approval shall be required for any amendment to Section 1.6
or 1.7 to the extent such amendment would effectively make more credit
available to Borrowers or make less restrictive on Borrowers the provisions of
Section 1.6 or 1.7.
(c) No amendment, modification, termination or waiver shall, unless
in writing and signed by each Lender and Borrowers and delivered to Agent and
Canadian Agent: (i) increase the principal amount of any Lender's Commitment;
(ii) reduce the principal of, rate of interest on, composition of interest on
(i.e. cash pay or payment-in-kind) or Fees payable with respect to any Loan or
Letter of Credit Obligations of any affected Lender; (iii) extend any
scheduled payment date (other than payment dates of mandatory prepayments
under Section 1.3(b)(ii)-(iv)) or final maturity date of the principal amount
of any Loan of any Lender; (iv) waive, forgive, defer, extend or postpone any
payment of interest or Fees as to any Lender; (v) release any Credit Party or
Guaranty or, except as otherwise permitted herein or in the other Loan
Documents, release or subordinate the Lien of Agent or Canadian Agent in, any
Collateral with an aggregate value for all such releases and subordinations
from and after the Closing Date exceeding 10% of the aggregate Commitments as
of the Closing Date; (vi) change the percentage of the Commitments or of the
aggregate unpaid principal amount of the Loans that shall be required for
Lenders or any of them to take any action hereunder; (vii) increase any
percentage advance rates set forth in the definition of US Borrowing Base or
Canadian Borrowing Base, (viii) amend Section 8.2(c); (ix) amend or waive
Section 9.10; (x) change any voting rights of the Lenders set forth in the
Collateral Agency Agreement or any application of payments provisions set
forth in the Collateral Agency Agreement; or (xi) amend or waive this Section
11.2 or the definitions of the terms "Class Voting Matter", "Commitment
Termination Date", "Covenant Voting Matter", "Obligations", "Requisite
Lenders", "Requisite Revolving Lenders" or "Super-Majority Revolving Lenders"
insofar as such definitions affect the substance of this Section 11.2.
Furthermore, notwithstanding anything herein to the contrary, no amendment,
modification, termination or waiver affecting the rights or duties of Agent,
Canadian Agent or L/C Issuer under this Agreement or any other Loan Document
shall be effective unless in writing and signed by Agent, Canadian Agent or
L/C Issuer, as the case may be, in addition to Lenders required hereinabove to
take such action. Each amendment, modification, termination or waiver shall be
effective only in the specific instance and for the specific purpose for which
it was given. No
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amendment, modification, termination or waiver shall be required for Agent or
Canadian Agent to take additional Collateral pursuant to any Loan Document. No
amendment, modification, termination or waiver of any provision of any Note
shall be effective without the written concurrence of the holder of that Note.
No notice to or demand on any Credit Party in any case shall entitle such
Credit Party or any other Credit Party to any other or further notice or
demand in similar or other circumstances. Any amendment, modification,
termination, waiver or consent effected in accordance with this Section 11.2
shall be binding upon each holder of the Obligations at the time outstanding
and each future holder of the Obligations.
(d) If, in connection with any proposed amendment, modification,
waiver or termination (a "Proposed Change"):
(i) requiring the consent of all affected Lenders, the consent
of Requisite Lenders is obtained, but the consent of other Lenders whose
consent is required is not obtained (any such Lender whose consent is not
obtained as described in this clause (i) and in clauses (ii), and (iii) below
being referred to as a "Non-Consenting Lender"), or
(ii) requiring the consent of Super-Majority Revolving Lenders,
the consent of Requisite Revolving Lenders is obtained, but the consent of
Super-Majority Revolving Lenders is not obtained,
then, (A) with respect to any Non-Consenting Lender that is a US Lender, so
long as Agent is not a Non-Consenting Lender, at Borrower Representative's
request, Agent or a Qualified Assignee reasonably acceptable to Agent shall
have the right with Agent's consent and in Agent's sole discretion (but shall
have no obligation) to purchase from such Non-Consenting Lenders, and such
Non-Consenting Lenders agree that they shall, upon Agent's request, sell and
assign to Agent or such Qualified Assignee, all of the Commitments of such
Non-Consenting Lenders for an amount equal to the principal balance of all
Loans held by the Non-Consenting Lenders and all accrued interest and Fees
with respect thereto through the date of sale, such purchase and sale to be
consummated pursuant to an executed Assignment Agreement or (B) with respect
to any Non-Consenting Lender that is a Canadian Lender, so long as Canadian
Agent is not a Non-Consenting Lender, at Borrower Representative's request,
Canadian Agent or a Qualified Assignee reasonably acceptable to Agent shall
have the right with Agent's consent and in Agent's sole discretion (but shall
have no obligation) to purchase from such Non-Consenting Lenders, and such
Non-Consenting Lenders agree that they shall, upon Agent's request, sell and
assign to Canadian Agent or such Qualified Assignee, all of the Commitments of
such Non-Consenting Lenders for an amount equal to the principal balance of
all Loans held by the Non-Consenting Lenders and all accrued interest and Fees
with respect thereto through the date of sale, such purchase and sale to be
consummated pursuant to an executed Assignment Agreement.
(e) Upon all Letter of Credit Obligations being cash collateralized,
canceled or backed by standby letters of credit in accordance with Annex B,
the payment in full in cash and performance of all of the other Obligations
(other than indemnification Obligations), termination of the Commitments and a
release of all claims against Agent, Canadian Agent and Lenders, and so long
as no suits, actions, proceedings or claims are pending or threatened against
any Indemnified Person asserting any damages, losses or liabilities that are
Indemnified Liabilities, Agent and Canadian Agent, as applicable, shall
deliver to Borrowers termination
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statements, mortgage releases and other documents necessary or appropriate to
evidence the termination of the Liens securing payment of the Obligations.
(f) If any fee is paid to any Class of Lenders or the interest rate
paid to any Class of Lenders on account of their Loans is increased or any
Class of Lenders receives any other compensation, in each case, in connection
with an amendment to, or waiver of, any provision set forth in this Agreement,
then any such fee or other compensation shall be shared among all Lenders on a
pro rata basis based on the amount of Commitments of all Lenders and the
Applicable Margin paid with respect to all Loans of the other Classes of
Lenders shall be increased by the same amount.
11.3 Fees and Expenses. (I) US Borrowers shall reimburse (i) Agent
for all fees, costs and expenses (including the reasonable fees and expenses
of all of its counsel, advisors, consultants and auditors) and (ii) Agent
(and, with respect to clauses (c), (d) and (e) below, all US Lenders) for all
fees, costs and expenses, including the reasonable fees, costs and expenses of
counsel or other advisors (including environmental and management consultants
and appraisers), and (II) Canadian Borrower shall reimburse (i) Canadian Agent
for all fees, costs and expenses (including the reasonable fees and expenses
of all of its counsel, advisors, consultants and auditors) and (ii) Canadian
Agent (and, with respect to clauses (c) and (d) below, all Canadian Lenders)
for all fees, costs and expenses, including the reasonable fees, costs and
expenses of counsel or other advisors (including environmental and management
consultants and appraisers), incurred in connection with the negotiation and
preparation of the Loan Documents and incurred in connection with:
(a) the forwarding to Borrowers or any other Person on behalf of
Borrowers by Agent or Canadian Agent, as applicable, of the proceeds of any
Loan (including a wire transfer fee of $25 per wire transfer);
(b) any amendment, modification or waiver of, consent with respect
to, or termination of, any of the Loan Documents or Related Transactions
Documents or advice in connection with the syndication and administration of
the Loans made pursuant hereto or its rights hereunder or thereunder;
(c) any litigation, contest, dispute, suit, proceeding or action
(whether instituted by Agent, Canadian Agent, any Lender, any Borrower or any
other Person and whether as a party, witness or otherwise) in any way relating
to the Collateral, any of the Loan Documents or any other agreement to be
executed or delivered in connection herewith or therewith, including any
litigation, contest, dispute, suit, case, proceeding or action, and any appeal
or review thereof, in connection with a case commenced by or against any or
all of the Borrowers or any other Person that may be obligated to Agent or
Canadian Agent by virtue of the Loan Documents; including any such litigation,
contest, dispute, suit, proceeding or action arising in connection with any
work-out or restructuring of the Loans during the pendency of one or more
Events of Default; provided that in the case of reimbursement of counsel for
Lenders other than Agent or Canadian Agent, such reimbursement shall be
limited to one counsel for each Class; provided, further, that no Person shall
be entitled to reimbursement under clauses (c), (d) and (e) in respect of any
litigation, contest, dispute, suit, proceeding or action to the extent any of
the foregoing results from such Person's gross negligence or willful
misconduct;
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(d) any attempt to enforce any remedies of Agent or Canadian Agent
against any or all of the Credit Parties or any other Person that may be
obligated to Agent, Canadian Agent or any Lender by virtue of any of the Loan
Documents, including any such attempt to enforce any such remedies in the
course of any work-out or restructuring of the Loans during the pendency of
one or more Events of Default; provided, that in the case of reimbursement of
counsel for Lenders other than Agent or Canadian Agent, such reimbursement
shall be limited to one counsel for each Class;
(e) any waiver, amendment, forbearance, workout or restructuring of
the Loans during the pendency of one or more Defaults or Events of Default;
provided, that in the case of reimbursement of counsel for Lenders other than
Agent or Canadian Agent, such reimbursement shall be limited to one counsel
for each Class; and
(f) efforts to (i) monitor the Loans or any of the other
Obligations, (ii) evaluate, observe or assess any of the Credit Parties or
their respective affairs, and (iii) verify, protect, evaluate, assess,
appraise, collect, sell, liquidate or otherwise dispose of any of the
Collateral;
including, as to each of clauses (a) through (f) above, all reasonable
attorneys' and other professional and service providers' fees arising from
such services and other advice, assistance or other representation, including
those in connection with any appellate proceedings, and all expenses, costs,
charges and other fees incurred by such counsel and others in connection with
or relating to any of the events or actions described in this Section 11.3,
all of which shall be payable, on demand, by US Borrowers to Agent and
Canadian Borrower to Canadian Agent, as applicable. Without limiting the
generality of the foregoing, such expenses, costs, charges and fees may
include: fees, costs and expenses of accountants, environmental advisors,
appraisers, investment bankers, management, financial, turnaround and other
consultants and paralegals; court costs and expenses; photocopying and
duplication expenses; court reporter fees, costs and expenses; long distance
telephone charges; air express charges; telegram or telecopy charges;
secretarial overtime charges; and expenses for travel, lodging and food paid
or incurred in connection with the performance of such legal or other advisory
services.
11.4 No Waiver. Agent's, Canadian Agent's or any Lender's failure,
at any time or times, to require strict performance by the Credit Parties of
any provision of this Agreement or any other Loan Document shall not waive,
affect or diminish any right of Agent, Canadian Agent or such Lender
thereafter to demand strict compliance and performance herewith or therewith.
Any suspension or waiver of an Event of Default shall not suspend, waive or
affect any other Event of Default whether the same is prior or subsequent
thereto and whether the same or of a different type. Subject to the provisions
of Section 11.2, none of the undertakings, agreements, warranties, covenants
and representations of any Credit Party contained in this Agreement or any of
the other Loan Documents and no Default or Event of Default by any Credit
Party shall be deemed to have been suspended or waived by Agent, Canadian
Agent or any Lender, unless such waiver or suspension is by an instrument in
writing signed by an officer of or other authorized employee of Agent,
Canadian Agent and the applicable required Lenders, and directed to Borrowers
specifying such suspension or waiver.
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11.5 Remedies. Agent's, Canadian Agent's and Lenders' rights and
remedies under this Agreement shall be cumulative and nonexclusive of any
other rights and remedies that Agent, Canadian Agent or any Lender may have
under any other agreement, including the other Loan Documents, by operation of
law or otherwise. Recourse to the Collateral shall not be required.
11.6 Severability. Wherever possible, each provision of this
Agreement and the other Loan Documents shall be interpreted in such a manner
as to be effective and valid under applicable law, but if any provision of
this Agreement or any other Loan Document shall be prohibited by or invalid
under applicable law, such provision shall be ineffective only to the extent
of such prohibition or invalidity without invalidating the remainder of such
provision or the remaining provisions of this Agreement or such other Loan
Document.
11.7 Conflict of Terms. Except as otherwise provided in this
Agreement or any of the other Loan Documents by specific reference to the
applicable provisions of this Agreement, if any provision contained in this
Agreement conflicts with any provision in any of the other Loan Documents, the
provision contained in this Agreement shall govern and control.
11.8 Confidentiality. Agent, Canadian Agent and each Lender agree to
maintain as confidential (using the same degree of care used in maintaining
the confidentiality of its own confidential information) all confidential
information provided to them by the Credit Parties and designated as
confidential for a period of 2 years following the termination of this
Agreement, except that Agent, Canadian Agent and any Lender may disclose such
information (a) to Persons employed or engaged by Agent, Canadian Agent or
such Lender; (b) to any bona fide assignee or participant or potential
assignee or participant that has agreed to comply with the covenant contained
in this Section 11.8 (and any such bona fide assignee or participant or
potential assignee or participant may disclose such information to Persons
employed or engaged by them as described in clause (a) above); (c) as required
or requested by any Governmental Authority or reasonably believed by Agent,
Canadian Agent or such Lender to be compelled by any court decree, subpoena or
legal or administrative order or process; (d) as, on the advice of Agent's,
Canadian Agent's or such Lender's counsel, is required by law; (e) in
connection with the exercise of any right or remedy under the Loan Documents
or in connection with any Litigation to which Agent, Canadian Agent or such
Lender is a party; or (f) that ceases to be confidential through no fault of
Agent, Canadian Agent or such Lender.
Notwithstanding anything to the contrary set forth herein or in any other
written or oral understanding or agreement to which the parties hereto are
parties or by which they are bound, the parties acknowledge and agree that (i)
any obligations of confidentiality contained herein and therein do not apply
and have not applied to the federal tax treatment and federal tax structure of
the Loans (the "Transactions") (and any related transactions or arrangements)
from the commencement of discussions between the parties, and (ii) each party
(and each of its employees, representatives, or other agents) may disclose to
any and all persons, without limitation of any kind, the federal tax treatment
and federal tax structure of the Transaction and all materials of any kind
(including opinions or other tax analyses) that are provided to such party
relating to such tax treatment and tax structure. The preceding sentence is
intended to cause the Transaction to be treated as not having been offered
under conditions of confidentiality for purposes of Section 1.6011-4(b)(3) (or
any successor provision) of the Treasury Regulations
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promulgated under Section 6011 of the Internal Revenue Code of 1986, as
amended, and shall be construed in a manner consistent with such purpose.
Subject to the proviso with respect to disclosure in the first sentence of
this paragraph, each party hereto acknowledges that it has no proprietary or
exclusive rights to the federal tax structure of the transaction contemplated
by this Agreement or any federal tax matter or federal tax idea related to the
Transaction.
11.9 GOVERNING LAW. EXCEPT AS OTHERWISE EXPRESSLY PROVIDED IN ANY OF
THE LOAN DOCUMENTS, IN ALL RESPECTS, INCLUDING ALL MATTERS OF CONSTRUCTION,
VALIDITY AND PERFORMANCE, THE LOAN DOCUMENTS AND THE OBLIGATIONS SHALL BE
GOVERNED BY, AND CONSTRUED AND ENFORCED IN ACCORDANCE WITH, THE INTERNAL LAWS
OF THE STATE OF NEW YORK APPLICABLE TO CONTRACTS MADE AND PERFORMED IN THAT
STATE AND ANY APPLICABLE LAWS OF THE UNITED STATES OF AMERICA. EACH CREDIT
PARTY HEREBY CONSENTS AND AGREES THAT THE STATE OR FEDERAL COURTS LOCATED IN
XXX XXXX XXXXXX, XXXX XX XXX XXXX, XXX XXXX SHALL HAVE EXCLUSIVE JURISDICTION
TO HEAR AND DETERMINE ANY CLAIMS OR DISPUTES BETWEEN THE CREDIT PARTIES,
AGENT, CANADIAN AGENT AND LENDERS PERTAINING TO THIS AGREEMENT OR ANY OF THE
OTHER LOAN DOCUMENTS OR TO ANY MATTER ARISING OUT OF OR RELATING TO THIS
AGREEMENT OR ANY OF THE OTHER LOAN DOCUMENTS; PROVIDED, THAT AGENT, CANADIAN
AGENT, LENDERS AND THE CREDIT PARTIES ACKNOWLEDGE THAT ANY APPEALS FROM THOSE
COURTS MAY HAVE TO BE HEARD BY X XXXXX XXXXXXX XXXXXXX XX XXX XXXX XXXXXX;
PROVIDED FURTHER, THAT NOTHING IN THIS AGREEMENT SHALL BE DEEMED OR OPERATE TO
PRECLUDE AGENT OR CANADIAN AGENT FROM BRINGING SUIT OR TAKING OTHER LEGAL
ACTION IN ANY OTHER JURISDICTION TO REALIZE ON THE COLLATERAL OR ANY OTHER
SECURITY FOR THE OBLIGATIONS, OR TO ENFORCE A JUDGMENT OR OTHER COURT ORDER IN
FAVOR OF AGENT OR CANADIAN AGENT, AND CREDIT PARTIES MAY MAKE ANY
COUNTERCLAIMS RELATING TO THE SAME MATTER, REQUESTS FOR EQUITABLE RELIEF
RELATING TO THE SAME MATTER OR AFFIRMATIVE DEFENSES IN CONNECTION THEREWITH.
EACH CREDIT PARTY EXPRESSLY SUBMITS AND CONSENTS IN ADVANCE TO SUCH
JURISDICTION IN ANY ACTION OR SUIT COMMENCED IN ANY SUCH COURT, AND EACH
CREDIT PARTY HEREBY WAIVES ANY OBJECTION THAT SUCH CREDIT PARTY MAY HAVE BASED
UPON LACK OF PERSONAL JURISDICTION, IMPROPER VENUE OR FORUM NON CONVENIENS AND
HEREBY CONSENTS TO THE GRANTING OF SUCH LEGAL OR EQUITABLE RELIEF AS IS DEEMED
APPROPRIATE BY SUCH COURT. EACH CREDIT PARTY HEREBY WAIVES PERSONAL SERVICE OF
THE SUMMONS, COMPLAINT AND OTHER PROCESS ISSUED IN ANY SUCH ACTION OR SUIT AND
AGREES THAT SERVICE OF SUCH SUMMONS, COMPLAINTS AND OTHER PROCESS MAY BE MADE
BY REGISTERED OR CERTIFIED MAIL ADDRESSED TO SUCH CREDIT PARTY AT THE ADDRESS
SET FORTH IN ANNEX I OF THIS AGREEMENT AND THAT SERVICE SO MADE SHALL BE
DEEMED COMPLETED UPON THE EARLIER OF SUCH CREDIT PARTY'S ACTUAL RECEIPT
THEREOF OR 3 DAYS AFTER DEPOSIT IN THE UNITED STATES MAILS, PROPER POSTAGE
PREPAID.
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11.10 Notices. Except as otherwise provided herein, whenever it is
provided herein that any notice, demand, request, consent, approval,
declaration or other communication shall or may be given to or served upon any
of the parties by any other parties, or whenever any of the parties desires to
give or serve upon any other parties any communication with respect to this
Agreement, each such notice, demand, request, consent, approval, declaration
or other communication shall be in writing and shall be deemed to have been
validly served, given or delivered: (a) upon the earlier of actual receipt and
3 Business Days after deposit in the United States Mail (if such communication
is initiated in the United States) or with Canada Post (if such communication
is initiated in Canada), as applicable, registered or certified mail, return
receipt requested, with proper postage prepaid; (b) upon transmission, when
sent by telecopy or other similar facsimile transmission (with such telecopy
or facsimile promptly confirmed by delivery of a copy by personal delivery or
United States Mail or Canada Post as otherwise provided in this Section
11.10); (c) 1 Business Day after deposit with a reputable overnight courier
with all charges prepaid or (d) when delivered, if hand-delivered by
messenger, all of which shall be addressed to the party to be notified and
sent to the address or facsimile number indicated in Annex I or to such other
address (or facsimile number) as may be substituted by notice given as herein
provided. The giving of any notice required hereunder may be waived in writing
by the party entitled to receive such notice. Failure or delay in delivering
copies of any notice, demand, request, consent, approval, declaration or other
communication to any Person (other than Borrower Representative, Agent or
Canadian Agent) designated in Annex I to receive copies shall in no way
adversely affect the effectiveness of such notice, demand, request, consent,
approval, declaration or other communication.
11.11 Section Titles. The Section titles and Table of Contents
contained in this Agreement are and shall be without substantive meaning or
content of any kind whatsoever and are not a part of the agreement between the
parties hereto.
11.12 Counterparts. This Agreement may be executed in any number of
separate counterparts, each of which shall collectively and separately
constitute one agreement.
11.13 WAIVER OF JURY TRIAL. THE PARTIES HERETO KNOWINGLY WAIVE ALL
RIGHT TO TRIAL BY JURY IN ANY ACTION, SUIT, OR PROCEEDING BROUGHT TO RESOLVE
ANY DISPUTE, WHETHER SOUNDING IN CONTRACT, TORT OR OTHERWISE, AMONG AGENT,
LENDERS AND ANY CREDIT PARTY ARISING OUT OF, CONNECTED WITH, RELATED TO, OR
INCIDENTAL TO THE RELATIONSHIP ESTABLISHED AMONG THEM IN CONNECTION WITH, THIS
AGREEMENT OR ANY OF THE OTHER LOAN DOCUMENTS OR THE TRANSACTIONS RELATED
THERETO.
11.14 Press Releases and Related Matters. Each Credit Party
executing this Agreement agrees that neither it nor its Affiliates will in the
future issue any press releases or other public disclosure using the name of
GE Capital, GE Capital Canada or its affiliates or referring to this
Agreement, the other Loan Documents or the Related Transactions Documents
without at least 2 Business Days' prior notice to GE Capital, GE Capital
Canada and without the prior written consent of GE Capital and GE Capital
Canada unless (and only to the extent that) such Credit Party or Affiliate is
required to do so under law and then, in any event, such Credit Party or
Affiliate will consult with GE Capital and GE Capital Canada before issuing
such press
89
release or other public disclosure. Each Credit Party consents to the
publication by Agent, Canadian Agent or any Lender of a tombstone or similar
advertising material relating to the financing transactions contemplated by
this Agreement. Agent and Canadian Agent reserve the right to provide to
industry trade organizations information necessary and customary for inclusion
in league table measurements.
11.15 Reinstatement. This Agreement shall remain in full force and
effect and continue to be effective should any petition be filed by or against
any Borrower for liquidation or reorganization, should any Borrower become
insolvent or make an assignment for the benefit of any creditor or creditors
or should a receiver, interim receiver, receiver and manager or trustee be
appointed for all or any significant part of any Borrower's assets, and shall
continue to be effective or to be reinstated, as the case may be, if at any
time payment and performance of the Obligations, or any part thereof, is,
pursuant to applicable law, rescinded or reduced in amount, or must otherwise
be restored or returned by any obligee of the Obligations, whether as a
"voidable preference," "fraudulent conveyance," or otherwise, all as though
such payment or performance had not been made. In the event that any payment,
or any part thereof, is rescinded, reduced, restored or returned, the
Obligations shall be reinstated and deemed reduced only by such amount paid
and not so rescinded, reduced, restored or returned.
11.16 Advice of Counsel. Each of the parties represents to each
other party hereto that it has discussed this Agreement and, specifically, the
provisions of Sections 11.9 and 11.13, with its counsel.
11.17 No Strict Construction. The parties hereto have participated
jointly in the negotiation and drafting of this Agreement. In the event an
ambiguity or question of intent or interpretation arises, this Agreement shall
be construed as if drafted jointly by the parties hereto and no presumption or
burden of proof shall arise favoring or disfavoring any party by virtue of the
authorship of any provisions of this Agreement.
11.18 Currency Equivalent Generally. For the purposes of making
valuations or computations under this Agreement (but not for the purposes of
the preparation of any financial statements delivered pursuant hereto), and in
particular, without limitation, for purposes of valuations or computations
under Sections 1.3(b), 1.6, 1.7, 3, 5, 6 and 8 and for purposes of calculating
the Canadian Borrowing Base, unless expressly provided otherwise, where a
reference is made to a dollar amount the amount is to be considered as the
amount in Dollars and, therefor, each other currency shall be converted into
the Equivalent Amount thereof in Dollars.
11.19 Judgment Currency.
(a) If, for the purpose of obtaining or enforcing judgment against
any Credit Party in any court in any jurisdiction, it becomes necessary to
convert into any other currency (such other currency being hereinafter in this
Section 11.19 referred to as the "Judgment Currency") an amount due under any
Loan Document in any currency (the "Obligation Currency") other than the
Judgment Currency, the conversion shall be made at the rate of exchange
prevailing on the Business Day immediately preceding (i) the date of actual
payment of the amount due, in the case of any proceeding in the courts of any
jurisdiction that will give
90
effect to such conversion being made on such date, or (ii) the date on which
the judgment is given, in the case of any proceeding in the courts of any
other jurisdiction (the applicable date as of which such conversion is made
pursuant to this Section 11.19 being hereinafter in this Section 11.19
referred to as the "Judgment Conversion Date").
(b) If, in the case of any proceeding in the court of any
jurisdiction referred to in Section 11.19(a), there is a change in the rate of
exchange prevailing between the Judgment Conversion Date and the date of
actual receipt for value of the amount due, the applicable Credit Party shall
pay such additional amount (if any, but in any event not a lesser amount) as
may be necessary to ensure that the amount actually received in the Judgment
Currency, when converted at the rate of exchange prevailing on the date of
payment, will produce the amount of the Obligation Currency which could have
been purchased with the amount of the Judgment Currency stipulated in the
judgment or judicial order at the rate of exchange prevailing on the Judgment
Conversion Date. Any amount due from a Credit Party under Section 11.19(b)
shall be due as a separate debt and shall not be affected by judgment being
obtained for any other amounts due under or in respect of any of the Loan
Documents.
(c) The term "rate of exchange" in this Section 11.19 means the rate
of exchange at which Agent or Canadian Agent would, on the relevant date at or
about 1:00 p.m.(New York time), be prepared to sell the Obligation Currency
against the Judgment Currency.
11.20 Joint and Several Obligations.
Notwithstanding any other provision contained in this Agreement or
any other Loan Document, if a "secured creditor" (as that term is defined
under the Bankruptcy and Insolvency Act (Canada)) is determined by a court of
competent jurisdiction not to include a Person to whom obligations are owed on
a joint or joint and several basis, then each Canadian Borrower's Obligations
(and the Obligations of their respective Subsidiaries), to the extent such
Obligations are secured, only shall be several obligations and not joint or
joint and several obligations.
12. CROSS-GUARANTY
12.1 Cross-Guaranty.
(a) Each US Borrower hereby agrees that such US Borrower is jointly
and severally liable for, and hereby absolutely and unconditionally guarantees
to Agent and Lenders and their respective successors and assigns, the full and
prompt payment (whether at stated maturity, by acceleration or otherwise) and
performance of, all US Obligations owed or hereafter owing to Agent and US
Lenders by each other US Borrower. Each US Borrower agrees that its guaranty
obligation hereunder is a continuing guaranty of payment and performance and
not of collection, that its obligations under this Section 12 shall not be
discharged until payment and performance, in full, of the Obligations has
occurred, and that its obligations under this Section 12 shall be absolute and
unconditional, irrespective of, and unaffected by,
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(i) the genuineness, validity, regularity, enforceability or
any future amendment of, or change in, this Agreement, any other Loan Document
or any other agreement, document or instrument to which any Borrower is or may
become a party;
(ii) the absence of any action to enforce this Agreement
(including this Section 12) or any other Loan Document or the waiver or
consent by Agent, Canadian Agent and Lenders with respect to any of the
provisions thereof;
(iii) the existence, value or condition of, or failure to
perfect its Lien against, any security for the Obligations or any action, or
the absence of any action, by Agent, Canadian Agent and Lenders in respect
thereof (including the release of any such security);
(iv) the insolvency of any Credit Party; or
(v) any other action or circumstances that might otherwise
constitute a legal or equitable discharge or defense of a surety or guarantor.
Each US Borrower shall be regarded, and shall be in the same position, as
principal debtor with respect to the US Obligations guaranteed hereunder.
(b) Each Borrower expressly represents and acknowledges that it is
part of a common enterprise with the other Borrowers and that any financial
accommodations by Lenders, or any of them, to any other Borrower hereunder and
under the other Loan Documents are and will be of direct and indirect
interest, benefit and advantage to all Borrowers.
12.2 Waivers by Borrowers. Each Borrower expressly waives all rights
it may have now or in the future under any statute, or at common law, or at
law or in equity, or otherwise, to compel Agent, Canadian Agent or Lenders to
marshal assets or to proceed in respect of the Obligations guaranteed
hereunder against any other Credit Party, any other party or against any
security for the payment and performance of the Obligations before proceeding
against, or as a condition to proceeding against, such Borrower. It is agreed
among each Borrower, Agent, Canadian Agent and Lenders that the foregoing
waivers are of the essence of the transaction contemplated by this Agreement
and the other Loan Documents and that, but for the provisions of this Section
12 and such waivers, Agent, Canadian Agent and Lenders would decline to enter
into this Agreement.
12.3 Benefit of Guaranty. Each Borrower agrees that the provisions
of this Section 12 are for the benefit of Agent, Canadian Agent and Lenders
and their respective successors, transferees, endorsees and assigns, and
nothing herein contained shall impair, as between any other Borrower and
Agent, Canadian Agent or Lenders, the obligations of such other Borrower under
the Loan Documents.
12.4 Subordination of Subrogation, Etc. Notwithstanding anything to
the contrary in this Agreement or in any other Loan Document, and except as
set forth in Section 12.7, each Borrower hereby expressly and irrevocably
subordinates to payment of the Obligations any and all rights at law or in
equity to subrogation, reimbursement, exoneration, contribution,
indemnification or set off and any and all defenses available to a surety,
guarantor or accommodation co-obligor until the Obligations are indefeasibly
paid in full in cash. Each
92
Borrower acknowledges and agrees that this subordination is intended to
benefit Agent, Canadian Agent and Lenders and shall not limit or otherwise
affect such Borrower's liability hereunder or the enforceability of this
Section 12, and that Agent, Canadian Agent, Lenders and their respective
successors and assigns are intended third party beneficiaries of the waivers
and agreements set forth in this Section 12.4.
12.5 Election of Remedies. If Agent, Canadian Agent or any Lender
may, under applicable law, proceed to realize its benefits under any of the
Loan Documents giving Agent, Canadian Agent or such Lender a Lien upon any
Collateral, whether owned by any Borrower or by any other Person, either by
judicial foreclosure or by non-judicial sale or enforcement, Agent, Canadian
Agent or any Lender may, at its sole option, determine which of its remedies
or rights it may pursue without affecting any of its rights and remedies under
this Section 12. If, in the exercise of any of its rights and remedies, Agent,
Canadian Agent or any Lender shall forfeit any of its rights or remedies,
including its right to enter a deficiency judgment against any Borrower or any
other Person, whether because of any applicable laws pertaining to "election
of remedies" or the like, each Borrower hereby consents to such action by
Agent, Canadian Agent or such Lender and waives any claim based upon such
action, even if such action by Agent, Canadian Agent or such Lender shall
result in a full or partial loss of any rights of subrogation that each
Borrower might otherwise have had but for such action by Agent, Canadian Agent
or such Lender. Any election of remedies that results in the denial or
impairment of the right of Agent, Canadian Agent or any Lender to seek a
deficiency judgment against any Borrower shall not impair any other Borrower's
obligation to pay the full amount of the Obligations. In the event Agent,
Canadian Agent or any Lender shall bid at any foreclosure or trustee's sale or
at any private sale permitted by law or the Loan Documents, Agent, Canadian
Agent or such Lender may bid all or less than the amount of the Obligations
and the amount of such bid need not be paid by Agent, Canadian Agent or such
Lender but shall be credited against the Obligations. The amount of the
successful bid at any such sale, whether Agent, Canadian Agent, Lender or any
other party is the successful bidder, shall be conclusively deemed to be the
fair market value of the Collateral and the difference between such bid amount
and the remaining balance of the Obligations shall be conclusively deemed to
be the amount of the Obligations guaranteed under this Section 12,
notwithstanding that any present or future law or court decision or ruling may
have the effect of reducing the amount of any deficiency claim to which Agent,
Canadian Agent or any Lender might otherwise be entitled but for such bidding
at any such sale.
12.6 Limitation. Notwithstanding any provision herein contained to
the contrary, each Borrower's liability under this Section 12 shall be limited
to an amount not to exceed as of any date of determination the greater of:
(a) the amount of all Loans advanced to such Borrower
(b) the net amount of all Loans advanced to another Borrower under
this Agreement and then re-loaned or otherwise transferred to, or for the
benefit of, such Borrower; and
(c) the amount that could be claimed by Agent and Lenders from such
Borrower under this Section 12 without rendering such claim voidable or
avoidable under
93
Section 548 of Chapter 11 of the Bankruptcy Code or under any applicable state
Uniform Fraudulent Transfer Act, Uniform Fraudulent Conveyance Act or similar
foreign or domestic statute or common law after taking into account, among
other things, such Borrower's right of contribution and indemnification from
each other Borrower under Section 12.7.
12.7 Contribution with Respect to Guaranty Obligations.
(a) To the extent that any Borrower shall make a payment under this
Section 12 of all or any of the Obligations (other than Loans made to that
Borrower for which it is primarily liable) (a "Guarantor Payment") that,
taking into account all other Guarantor Payments then previously or
concurrently made by any other Borrower, exceeds the amount that such Borrower
would otherwise have paid if each Borrower had paid the aggregate Obligations
satisfied by such Guarantor Payment in the same proportion that such
Borrower's "Allocable Amount" (as defined below) (as determined immediately
prior to such Guarantor Payment) bore to the aggregate Allocable Amounts of
each of the Borrowers as determined immediately prior to the making of such
Guarantor Payment, then, following indefeasible payment in full in cash of the
Obligations and termination of the Commitments, such Borrower shall be
entitled to receive contribution and indemnification payments from, and be
reimbursed by, each other Borrower for the amount of such excess, pro rata
based upon their respective Allocable Amounts in effect immediately prior to
such Guarantor Payment.
(b) As of any date of determination, the "Allocable Amount" of any
Borrower shall be equal to the maximum amount of the claim that could then be
recovered from such Borrower under this Section 12 without rendering such
claim voidable or avoidable under Section 548 of Chapter 11 of the Bankruptcy
Code or under any applicable state Uniform Fraudulent Transfer Act, Uniform
Fraudulent Conveyance Act or similar statute or common law.
(c) This Section 12.7 is intended only to define the relative rights
of Borrowers and nothing set forth in this Section 12.7 is intended to or
shall impair the obligations of Borrowers, jointly and severally, to pay any
amounts as and when the same shall become due and payable in accordance with
the terms of this Agreement, including Section 12.1. Nothing contained in this
Section 12.7 shall limit the liability of any Borrower to pay the Loans made
directly or indirectly to that Borrower and accrued interest, Fees and
expenses with respect thereto for which such Borrower shall be primarily
liable.
(d) The parties hereto acknowledge that the rights of contribution
and indemnification hereunder shall constitute assets of the Borrower to which
such contribution and indemnification is owing.
(e) The rights of the indemnifying Borrowers against other Credit
Parties under this Section 12.7 shall be exercisable upon the full and
indefeasible payment of the Obligations and the termination of the
Commitments.
12.8 Liability Cumulative. The liability of Borrowers under this
Section 12 is in addition to and shall be cumulative with all liabilities of
each Borrower to Agent, Canadian Agent and Lenders under this Agreement and
the other Loan Documents to which such Borrower is a party or in respect of
any Obligations or obligation of the other Borrower, without any
94
limitation as to amount, unless the instrument or agreement evidencing or
creating such other liability specifically provides to the contrary.
[SIGNATURE PAGES FOLLOW]
95
IN WITNESS WHEREOF, this Agreement has been duly executed as of the
date first written above.
US BORROWERS
XXXXXX, INC., a Delaware corporation
By: /s/ Xxxxxxx X. Xxxxxx
----------------------------------
Name: Xxxxxxx X. Xxxxxx, III
Title: Sr. Vice President
XXXXX INDUSTRIES, INC., a Kansas
corporation
By: /s/ Xxxxxxx X. Xxxxxx, III
----------------------------------
Name: Xxxxxxx X. Xxxxxx, III
Title: Vice President
FABTEK CORPORATION, a Michigan
corporation
By: /s/ Xxxxxxx X. Xxxxxx, III
----------------------------------
Name: Xxxxxxx X. Xxxxxx, III
Title: Vice President
XXXXXXXXX MANUFACTURING CORPORATION,
a Delaware corporation
By: /s/ Xxxxxxx X. Xxxxxx, III
----------------------------------
Name: Xxxxxxx X. Xxxxxx, III
Title: Vice President
S-1
GEAR PRODUCTS, INC., an Oklahoma
corporation
By: /s/ Xxxxxxx X. Xxxxxx, III
----------------------------------
Name: Xxxxxxx X. Xxxxxx, III
Title: Vice President
OMARK PROPERTIES, INC., an Oregon
corporation
By: /s/ Xxxxxxx X. Xxxxxx, III
----------------------------------
Name: Xxxxxxx X. Xxxxxx, III
Title: Vice President
WINDSOR FORESTRY TOOLS LLC, a
Tennessee limited liability company
By: Xxxxxx, Inc., its sole member
By: /s/ Xxxxxxx X. Xxxxxx, III
----------------------------------
Name: Xxxxxxx X. Xxxxxx, III
Title: Sr. Vice President
CANADIAN BORROWER
XXXXXX CANADA LTD., a Canadian
corporation
By: /s/ Xxxxxx X. Xxxxxxx
----------------------------------
Name: Xxxxxx X. Xxxxxxx
Title: Treasurer
S-2
AGENT, CANADIAN AGENT AND LENDERS:
GENERAL ELECTRIC CAPITAL
CORPORATION,
as Agent and US Lender
/s/ Xxxxxxx X. Xxxxx
--------------------------------------
By: /s/ Xxxxxxx X. Xxxxx
----------------------------------
Duly Authorized Signatory
GENERAL ELECTRIC CAPITAL
CANADA INC.,
as Canadian Agent and Canadian Lender
/s/ Xxxxx Xxxxxx
--------------------------------------
By: /s/ Xxxxx Xxxxxx
----------------------------------
Duly Authorized Signatory
S-3
THE CIT GROUP/BUSINESS CREDIT, INC.,
as US Lender
By: /s/ Xxxxx X. Xxxxxxx, Xx.
----------------------------------
Name: Xxxxx X. Xxxxxxx, Xx.
Title: Vice President
S-4
FLEET CAPITAL CORPORATION, as US Lender
By: /s Xxxxx Xxxx
----------------------------------
Name: Xxxxx Xxxx
Title: Vice President
S-5
FOOTHILL CAPITAL CORPORATION, as
US Lender
By: /s/ Xxx Xxxxx
----------------------------------
Name: Xxx Xxxxx
Title: Senior Vice President
S-6
SYNDICATED LOAN FUNDING TRUST,
as US Lender
By: Xxxxxx Commercial Paper Inc.,
Not in its individual capacity but
solely as Asset Manager
By: /s/ G. Xxxxxx Xxxxx
----------------------------------
Name: G. Xxxxxx Xxxxx
Title: Authorized Signatory
S-7
TRANSAMERICA BUSINESS CAPITAL
CORPORATION, as US Lender
By: /s/ Xxxxxxxxxxx X. M
----------------------------------
Name: Xxxxxxxxxxx X.
Title: Vice President - Region
Credit Manager
S-8
The following Persons are signatories to this Agreement in their
capacity as Credit Parties and not as Borrowers.
US CREDIT PARTIES:
XXXXXX INTERNATIONAL, INC., a
Delaware corporation
By: /s/ Xxxxxxx X. Xxxxxx, III
----------------------------------
Name: Xxxxxxx X. Xxxxxx, III
Title: Sr. Vice President
BI, L.L.C., a Delaware limited
liability company
By: Xxxxxx, Inc., its managing member
By: /s/ Xxxxxxx X. Xxxxxx, III
----------------------------------
Name: Xxxxxxx X. Xxxxxx, III
Title: Vice President
4520 CORP., INC., a Delaware
corporation
By: /s/ Xxxxxxx X. Xxxxxx, III
----------------------------------
Name: Xxxxxxx X. Xxxxxx, III
Title: Vice President
CANADIAN CREDIT PARTIES:
XXXXXX HOLDINGS LTD., a Canadian
corporation
By: /s/ Xxxxxx X. Xxxxxxx
----------------------------------
Name: Xxxxxx X. Xxxxxxx
Title: Treasurer
S-9
OREGON DISTRIBUTION LTD., an Ontario
corporation
By: /s/ Xxxxxx X. Xxxxxxx
----------------------------------
Name: Xxxxxx X. Xxxxxxx
Title: Treasurer
S-10
ANNEX A (RECITALS)
TO
CREDIT AGREEMENT
DEFINITIONS
Capitalized terms used in the Loan Documents shall have (unless
otherwise provided elsewhere in the Loan Documents) the following respective
meanings, and all references to Sections, Exhibits, Schedules or Annexes in
the following definitions shall refer to Sections, Exhibits, Schedules or
Annexes of or to the Agreement:
"A Loan Lenders" means those Lenders having US Revolving Loan
Commitments and Term Loan A Commitments.
"Account Debtor" means any Person who may become obligated to any
Credit Party under, with respect to, or on account of, an Account, Chattel
Paper or General Intangibles (including a payment intangible).
"Accounting Changes" has the meaning ascribed thereto in Annex G.
"Accounts" means all "accounts," as such term is defined in the Code
or the PPSA or "claims," as such term is defined under the Civil Code of
Quebec, now owned or hereafter acquired by any Credit Party, including (a) all
accounts receivable, other receivables, book debts and other forms of
obligations (other than forms of obligations evidenced by Chattel Paper, or
Instruments), (including any such obligations that may be characterized as an
account or contract right under the Code), (b) all of each Credit Party's
rights in, to and under all purchase orders or receipts for goods or services,
(c) all of each Credit Party's rights to any goods represented by any of the
foregoing (including unpaid sellers' rights of rescission, replevin,
reclamation and stoppage in transit and rights to returned, reclaimed or
repossessed goods), (d) all rights to payment due to any Credit Party for
property sold, leased, licensed, assigned or otherwise disposed of, for a
policy of insurance issued or to be issued, for a secondary obligation
incurred or to be incurred, for energy provided or to be provided, for the use
or hire of a vessel under a charter or other contract, arising out of the use
of a credit card or charge card, or for services rendered or to be rendered by
such Credit Party or in connection with any other transaction (whether or not
yet earned by performance on the part of such Credit Party), (e) all health
care insurance receivables and (f) all collateral security of any kind, given
by any Account Debtor or any other Person with respect to any of the
foregoing.
"Activation Event" and "Activation Notice" have the meanings
ascribed thereto in Annex C.
"Advance" means the amount of the Loans advanced under Section 1.1
of the Agreement on the occasion of any borrowing thereunder.
"Adjustable Applicable Margins" has the meaning ascribed to it in
Section 1.5 of the Agreement.
A-1
"Affiliate" means, with respect to any Person, (a) each Person that,
directly or indirectly, owns or controls, whether beneficially, or as a
trustee, guardian or other fiduciary, 10% or more of the Stock having ordinary
voting power in the election of directors of such Person, (b) each Person that
controls, is controlled by or is under common control with such Person, (c)
each of such Person's officers, directors, joint venturers and partners and
(d) in the case of Borrowers, the immediate family members, spouses and lineal
descendants of individuals who are Affiliates of any Borrower. For the
purposes of this definition, "control" of a Person shall mean the possession,
directly or indirectly, of the power to direct or cause the direction of its
management or policies, whether through the ownership of voting securities, by
contract or otherwise; provided, however, that the term "Affiliate" shall
specifically exclude Agent and each Lender.
"Agent" means GE Capital, as agent hereunder and under the other
Loan Documents and as Collateral Agent, and its successor appointed pursuant
to Section 9.7.
"Agreement" means the Credit Agreement by and among Borrowers, the
other Credit Parties party thereto, GE Capital, as Agent, Collateral Agent and
US Lender, GE Capital Canada, as Canadian Agent and Canadian Lender and the
other Lenders from time to time party thereto, as the same may be amended,
supplemented, restated or otherwise modified from time to time.
"Appendices" has the meaning ascribed to it in the recitals to the
Agreement.
"Applicable BA Rate Margin" means the per annum interest rate from
time to time in effect and payable in addition to the BA Rate applicable to
the Canadian Revolving Credit Advances denominated in Canadian Dollars, as
determined by reference to Section 1.5(a).
"Applicable Canadian Index Margin" means the per annum interest rate
from time to time in effect and payable in addition to the Canadian Index Rate
applicable to the Canadian Revolving Credit Advances denominated in Canadian
Dollars, as determined by reference to Section 1.5(a).
"Applicable Margins" means collectively the Applicable Unused Line
Fee Margin, the Applicable Revolver US Index Margin, the Applicable Term Loan
A Index Margin, the Applicable Term Loan B Index Margin, the Applicable
Revolver LIBOR Margin, the Applicable Term Loan A LIBOR Margin, the Applicable
Term Loan B LIBOR Margin, the Applicable Canadian Index Margin and the
Applicable BA Rate Index Margin.
"Applicable Pro Rata Share" means (a) with respect to matters
relating to US Lenders, US Pro Rata Share and (b) with respect to matters
relating to Canadian Lenders, Canadian Pro Rata Share.
"Applicable Revolver LIBOR Margin" means the per annum interest rate
from time to time in effect and payable in addition to the LIBOR Rate
applicable to the US Revolving Loan and the Canadian Revolving Credit Advances
denominated in US Dollars, as determined by reference to Section 1.5(a).
A-2
"Applicable Revolver US Index Margin" means the per annum interest
rate from time to time in effect and payable in addition to the US Index Rate
applicable to the US Revolving Loan and the Canadian Revolving Credit Advances
denominated in US Dollars, as determined by reference to Section 1.5(a).
"Applicable Term Loan A Index Margin" means the per annum interest
rate from time to time in effect and payable in addition to the US Index Rate
applicable to the Term Loan A and the Canadian Term Loan, as determined by
reference to Section 1.5(a).
"Applicable Term Loan A LIBOR Margin" means the per annum interest
rate from time to time in effect and payable in addition to the LIBOR Rate
applicable to the Term Loan A and the Canadian Term Loan, as determined by
reference to Section 1.5(a).
"Applicable Term Loan B Index Margin" means the per annum interest
rate from time to time in effect and payable in addition to the US Index Rate
applicable to the Term Loan B, as determined by reference to Section 1.5(a).
"Applicable Term Loan B LIBOR Margin" means the per annum interest
rate from time to time in effect and payable in addition to the LIBOR Rate
applicable to the Term Loan B, as determined by reference to Section 1.5(a).
"Applicable Unused Line Fee Margin" means the per annum fee, from
time to time in effect, payable in respect of Borrowers' non-use of committed
funds pursuant to Section 1.9(b), which fee is determined by reference to
Section 1.5(a).
"Appraised Value of Canadian Inventory" means the net orderly
liquidation value of Canadian Borrower's Inventory determined by an appraiser
as set forth in the most recent appraisal of Canadian Borrower's Inventory
that is in scope, form and substance, all acceptable to Canadian Agent.
"Appraised Value of US Inventory" means the net orderly liquidation
value of US Borrowers' Inventory determined by an appraiser as set forth in
the most recent appraisal of US Borrowers' Inventory that is in scope, form
and substance, acceptable to Agent.
"Assignment Agreement" has the meaning ascribed to it in Section
9.1(a).
"BA Rate Period" means with respect to any BA Rate Loan bearing
interest at a rate based on the BA Rate, a period of 30, 60 or 90 days
commencing on a Business Day selected by Borrower Representative in its
irrevocable Notice of Canadian Revolving Credit Advance or Notice of
Conversion/Continuation-BA Rate with respect to such BA Rate Loan delivered to
Canadian Agent in accordance with Section 1.5(e), provided that the foregoing
provision relating to BA Rate periods is subject to the following:
(a) any BA Rate Period that would otherwise extend beyond the
relevant Commitment Termination Date shall end on the Business Day immediately
preceding such Commitment Termination Date;
A-3
(b) Borrower Representative shall select BA Periods so as not to
require a payment or prepayment of any BA Rate Loan during a BA Period for
such Loan; and
(c) Borrower Representative shall select BA Periods so that there
shall be no more than 5 separate BA Rate Loans in existence at any one time.
"BA Rate" means, in respect of any BA Period applicable to a BA Rate
Loan, the rate per annum determined by Canadian Agent by reference to the
average rate quoted on the Reuters Monitor Screen (Page CDOR, or such other
Page as may replace such Page on such Screen for the purpose of displaying
Canadian interbank bid rates for Canadian Dollar bankers' acceptances)
applicable to Canadian Dollar bankers' acceptances with a term comparable to
such BA Period as of 10:00 a.m. (New York time) one Business Day before the
first day of such BA Period. If for any reason the Reuters Monitor Screen
rates are unavailable, BA Rate means the rate of interest determined by
Canadian Agent that is equal to the arithmetic mean (rounded upwards to the
nearest basis point) of the rates quoted by The Bank of Nova Scotia, Royal
Bank of Canada and Canadian Imperial Bank of Commerce in respect of Canadian
Dollar bankers' acceptances with a term comparable to such BA Period. No
adjustment shall be made to account for the difference between the number of
days in a year on which the rates referred to in this definition are based and
the number of days in a year on the basis of which interest is calculated in
the Agreement.
"BA Rate Loan" means a Canadian Revolving Loan denominated in
Canadian Dollars that bears interest at a rate based on the BA Rate.
"Bankruptcy Code" means the provisions of Title 11 of the United
States Code, 11 U.S.C. ss.ss.101 et seq., the Bankruptcy and Insolvency Act
(Canada) and the Companies' Creditors Arrangement Act (Canada), each as now
and hereafter in effect, any successors to such statutes and any other
applicable insolvency or other similar law of any jurisdiction including,
without limitation, any law of any jurisdiction permitting a debtor to obtain
a stay or a compromise of the claims of its creditors against it.
"B Loan Lenders" means those Lenders having Term Loan B Commitments.
"Blocked Accounts" has the meaning ascribed to it in Annex C.
"Xxxxxx, Inc." has the meaning ascribed to it in the preamble of the
Agreement.
"Borrower" and "Borrowers" have the respective meanings ascribed to
them in the preamble of this Agreement.
"Borrower Representative" means Xxxxxx, Inc. in its capacity as
Borrower Representative pursuant to the provisions of Section 1.1(e).
"Borrowing Base Certificate" means a certificate to be executed and
delivered from time to time by US Borrowers or Canadian Borrower, as the case
may be, in the form attached to the Agreement as Exhibit 4.1(b).
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"Business Day" means any day that is not a Saturday, a Sunday or a
day on which banks are required or permitted to be closed in New York or, with
respect to Canadian Loans, the Province of Ontario and in reference to LIBOR
Loans shall mean any such day that is also a LIBOR Business Day.
"Canadian Agent" means GE Capital Canada in its capacity as Canadian
Agent for Canadian Lenders or its successor appointed pursuant to Section 9.7.
"Canadian Benefit Plans" means all material employee benefit plans
of any nature or kind whatsoever that are not Canadian Pension Plans and are
maintained or contributed to by any Credit Party having employees in Canada.
"Canadian Borrowing Availability" means as of any date of
determination, the lesser of (a) the Canadian Maximum Amount and (b) the
Canadian Borrowing Base, in each case, less the aggregate Canadian Revolving
Loan then outstanding.
"Canadian Borrowing Base" means, as of any date of determination by
Agent from time to time, an amount equal to the sum at such time of:
(a) up to 85% of the book value of Canadian Borrower's Eligible
Accounts; plus
(b) the lesser of:
(i) (A) the lesser of (x) up to 65% of the book value of
Canadian Borrower's Eligible Inventory consisting of finished goods or raw
materials valued at the lower of cost (determined on a first-in, first-out
basis) or market and (y) 85% of the Appraised Value of Canadian Inventory
(excluding any work-in-process), plus
(B) the lesser of (I) up to 50% (or, if lower, the ratio
of (x) the Appraised Value of Canadian Inventory with respect to finished
goods to (y) the cost of such Inventory) of the book value of Canadian
Borrower's Eligible Inventory consisting of work-in-process valued at the
lower of cost (determined on a first-in, first-out basis) or market, and (II)
$1,500,000, and
(ii) $1,800,000; minus
(c) any Canadian Reserves established by Agent at such time.
"Canadian Commitments" means, collectively, the Canadian Revolving
Loan Commitment and the Canadian Term Loan Commitment or portion thereof.
"Canadian Credit Parties" means, collectively, Canadian Borrower and
each other Subsidiary of Xxxxxx, Inc. that is organized under the laws of
Canada or any province thereof that executes and delivers a Canadian Guaranty;
and "Canadian Credit Party" means any one of the foregoing Credit Parties.
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"Canadian Collateral" means all Collateral in respect of which a
security interest is granted in favor of Canadian Agent by a Canadian Credit
Party.
"Canadian Collection Account" means that certain Canadian Dollar
account of Canadian Agent, account number 0000000 or US Dollar account of
Canadian Agent, account number 0000000, with the account name GECCI_COMM_FIN
at Royal Bank of Canada in Xxxxxxx, Xxxxxxx, transit number 00000, or such
other account as may be specified in writing by Agent as the "Canadian
Collection Account".
"Canadian Dollars" means the lawful currency of Canada.
"Canadian Index Rate" means, for any day, a floating rate equal to
the higher of (i) the annual rate of interest determined by Canadian Agent
which is equal to the highest annual rate of interest announced from time to
time by any of The Bank of Nova Scotia, Royal Bank of Canada and Canadian
Imperial Bank of Commerce, as being its reference rate in effect on such date
(or if such date is not a Business Day, on the Business Day immediately
preceding such date) for determining interest rates on Canadian Dollar
denominated commercial loans made by it in Canada (that is, its prime rate),
in each case, regardless of whether any of such banks actually charges such
rate of interest in connection with extensions of credit in Canadian Dollars
to debtors; and (2) the BA Rate in respect of a BA Period of 30 days
commencing on such date plus 1.75% per annum. Each change in any interest rate
provided for in the Agreement based upon the Canadian Index Rate shall take
effect at the time of such change in the Canadian Index Rate. No adjustment
shall be made to account for the difference between the number of days in a
year on which the rates referred to in this definition are based and the
number of days in a year on the basis of which interest is calculated in the
Agreement.
"Canadian Index Rate Loan" means a Canadian Revolving Loan
denominated in Canadian Dollars or portion thereof bearing interest by
reference to the Canadian Index Rate.
"Canadian Guaranty" means, collectively, each Guaranty from a
Canadian Credit Party signatory thereto in favor of Canadian Agent, on behalf
of itself and Canadian Lenders, as amended, restated, supplemented or
otherwise modified from time to time.
"Canadian Lenders" means those Lenders having a Canadian Revolving
Loan Commitment and a Canadian Term Loan Commitment.
"Canadian Loans" means, collectively, the Canadian Revolving Loan
and the Canadian Term Loan; and "Canadian Loan" means any of the foregoing
Canadian Loans or portion thereof.
"Canadian Maximum Amount" means, as of any date of determination, an
amount equal to the Canadian Revolving Loan Commitment of all Canadian Lenders
as of that date.
"Canadian Mortgage" means the Mortgage on Real Estate located at 000
Xxxxxxxxx Xxxx Xxxxx, Xxxxxx, Xxxxxxx, Xxxxxx.
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"Canadian Obligations" means the Obligations with respect to the
Canadian Loans.
"Canadian Pension Plans" means each plan which is considered to be a
pension plan for the purposes of any applicable pension benefits standards
statute and/or regulation in Canada established, maintained or contributed to
by any Credit Party for its employees or former employees and does not include
the Canadian Pension Plan or Quebec Pension Plan that is maintained by the
Government of Canada or the Province of Quebec, respectively.
"Canadian Pro Rata Share" means with respect to all matters relating
to any Canadian Lender, (a) prior to the Commitment Termination Date, the
percentage obtained by dividing (i) the aggregate Canadian Commitments of that
Canadian Lender by (ii) the aggregate Canadian Commitments of all Canadian
Lenders, and (b) on and after the Commitment Termination Date, the percentage
obtained by dividing (i) the aggregate outstanding principal balance of the
Canadian Loans held by that Canadian Lender, by (ii) the outstanding principal
balance of the Canadian Loans held by all Canadian Lenders.
"Canadian Reserves" means (a) reserves established by Agent from
time to time against Canadian Borrower's Eligible Inventory pursuant to
Section 5.9, (b) reserves established pursuant to Section 5.4(c), (c) reserves
established pursuant to Section 5.12 and (d) such other reserves against
Eligible Accounts, Eligible Inventory or Borrowing Availability of Canadian
Borrower that Agent may, in its reasonable credit judgment, establish from
time to time. Without limiting the generality of the foregoing, Canadian
Reserves established to ensure the payment of accrued Interest Expenses or
Indebtedness shall be deemed to be a reasonable exercise of Agent's credit
judgment.
"Canadian Revolving Credit Advance" has the meaning ascribed to it
in Section 1.1(a)(ii).
"Canadian Revolving Loan" means, at any time, the aggregate amount
of Canadian Revolving Credit Advances outstanding to Canadian Borrower.
"Canadian Revolving Loan Commitment" means (a) as to any Lender, the
aggregate commitment of such Lender to make Canadian Revolving Credit Advances
as set forth on Annex J to the Agreement or in the most recent Assignment
Agreement executed by such Lender and (b) as to all Lenders, the aggregate
commitment of all Lenders to make Canadian Revolving Credit Advances, which
aggregate commitment shall be Three Million Dollars ($3,000,000) on the
Closing Date, as such amount may be adjusted, if at all, from time to time in
accordance with the Agreement.
"Canadian Revolving Note" and "Canadian Revolving Notes" has the
meaning ascribed to it in Section 1.1(ii)(2).
"Canadian Security Agreements" means, collectively, each Security
Agreement entered into by and among Canadian Agent, on behalf of itself and
Canadian Lenders, and a Canadian Credit Party that is a signatory thereto, as
amended, restated, supplemented or otherwise modified from time to time.
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"Canadian Term Note" and "Canadian Term Notes" have the respective
meanings ascribed to such terms in Section 1.1(b)(i)
"Canadian Term Loan" has the meaning assigned to it in Section
1.1(b)(i).
"Canadian Term Loan Commitment" means (a) as to any Lender with a
Canadian Term Loan Commitment, the commitment of such Lender to make its
Canadian Pro Rata Share of the Canadian Term Loan as set forth on Annex J to
the Agreement or in the most recent Assignment Agreement executed by such
Lender, and (b) as to all Lenders with a Canadian Term Loan Commitment, the
aggregate commitment of all Lenders to make the Canadian Term Loan, which
aggregate commitment shall be Six Million Dollars ($6,000,000) on the Closing
Date. After advancing the Canadian Term Loan, each reference to a Lender's
Canadian Term Loan Commitment shall refer to that Lender's Canadian Pro Rata
Share of the outstanding Canadian Term Loan.
"Capital Expenditures" means, with respect to any Person, all
expenditures (by the expenditure of cash or the incurrence of Indebtedness) by
such Person during any measuring period for any fixed assets or improvements
or for replacements, substitutions or additions thereto that have a useful
life of more than one year and that are required to be capitalized under GAAP.
"Capital Lease" means, with respect to any Person, any lease of any
property (whether real, personal or mixed) by such Person as lessee that, in
accordance with GAAP, would be required to be classified and accounted for as
a capital lease on a balance sheet of such Person.
"Capital Lease Obligation" means, with respect to any Capital Lease
of any Person, the amount of the obligation of the lessee thereunder that, in
accordance with GAAP, would appear on a balance sheet of such lessee in
respect of such Capital Lease.
"Cash Collateral Account" has the meaning ascribed to it in Annex B.
"Cash Equivalents" has the meaning ascribed to it in Annex B.
"Cash Management Systems" has the meaning ascribed to it in Section
1.8.
"CCRA" means the Canada Customs and Revenue Agency.
"Change of Control" means any of the following: (a) any person or
group of persons (within the meaning of the Securities Exchange Act of 1934),
other than LBMB II and its Affiliates, shall have acquired beneficial
ownership (within the meaning of Rule 13d-3 promulgated by the Securities and
Exchange Commission under the Securities Exchange Act of 1934,) of 20% or more
of the issued and outstanding shares of capital Stock of Holdings having the
right to vote for the election of directors of Holdings under ordinary
circumstances unless LBMB II owns at least a majority of the voting Stock of
Holdings at such time; (b) during any period of twelve consecutive calendar
months, individuals who at the beginning of such period constituted the board
of directors of Holdings (together with any new directors whose election by
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the board of directors of Holdings or whose nomination for election by the
Stockholders of Holdings was approved by a vote of at least two-thirds of the
directors then still in office who either were directors at the beginning of
such period or whose election or nomination for election was previously so
approved) cease for any reason other than death or disability to constitute a
majority of the directors then in office unless LBMB II owns at least a
majority of the voting Stock of Holdings at such time; (c) Holdings ceases to
own and control all of the economic and voting rights associated with all of
the outstanding capital Stock of Xxxxxx, Inc., (d) except for minority
interests in certain Foreign Subsidiaries as of the Closing Date and except as
specifically permitted under Section 6.8(a)(ii) and Section 6.8(c), Xxxxxx,
Inc. ceases to own and control all of the economic and voting rights
associated with all of the outstanding capital Stock of any of its
Subsidiaries, (e) any "change of control" as defined in the Existing Senior
Notes Documents if such documents are amended to include such a definition, or
(f) and "change of control" as defined in the Existing Subordinated Notes
Documents.
"Charges" means all federal, state, provincial, county, city,
municipal, local, foreign or other governmental taxes (including taxes owed to
the PBGC at the time due and payable), levies, assessments, charges, liens,
claims or encumbrances owed by any Credit Party and upon or relating to (a)
the Collateral, (b) the Obligations, (c) the employees, payroll, income,
capital or gross receipts of any Credit Party, (d) any Credit Party's
ownership or use of any properties or other assets, or (e) any other aspect of
any Credit Party's business.
"Chattel Paper" means any "chattel paper," as such term is defined
in the Code, including electronic chattel paper, now owned or hereafter
acquired by any Credit Party.
"Class" means a group of Lenders consisting of the following: (i) A
Loan Lenders and Canadian Lenders, or (ii) B Loan Lenders.
"Class Voting Matter" means any one of the following:
(a) any amendment to (or waiver of) Section 1.1(b)(iii), 1.1(b)(iv),
1.3, 1.4, 1.5 (as such Section relates to interest on the Term Loan B),
1.9(b)(iii), 1.9(b)(iv), 1.9(c)(i)(as such Section relates to fees on the Term
Loan B), 1.9(c)(ii), 1.11, 1.12, 1.13, 1.14, 9.1 (as such Section relates to
the Term Loan B Commitment or the Term Loan B), 9.6, 9.8, 9.9(a) through
(e)(as such Sections relate to the Term Loan B or the B Loan Lenders), 9.9(f)
or 11.3, in each case, to the extent such amendment (or waiver) adversely
affects the rights of the Lenders in the Class described in clause (ii) or
(iii) of the definition of Class and any amendment to any defined terms set
forth in any such Sections, in each case, to the extent the amendment to any
such defined term would effectively make more credit available to Borrowers,
make less restrictive on Borrowers the Sections referred to in this clause (a)
or directly affect the Term Loan B;
(b) any increase in the Applicable Margins applicable to a Class to
the extent such increase, together with any other increase in the Applicable
Margins applicable to such Class after the Closing Date (without giving effect
to the Default Rate), exceeds 2%;
A-9
(c) any amendment to (or waiver of) Section 1.6 or 1.7 to the extent
such amendment (or waiver) would effectively make more credit available to
Borrowers or make less restrictive on Borrowers such Sections;
(d) any amendment to (or waiver of) Section 2.2 that would have the
effect of requiring a Lender to extend credit hereunder pursuant to conditions
that are less restrictive on Borrowers than the conditions set forth in
Section 2.2 as of the Closing Date; provided, however, that such consent right
of Lenders shall not prevent any Lender, in its discretion, from extending
credit to Borrowers hereunder when the conditions precedent set forth in
Section 2.2, or any of them, have not been satisfied;
(e) any amendment to Section 8.1 or any amendment (or any waiver) to
Section 8.2 or Section 8.3; provided, however, that "Class Voting Matter"
shall not include the waiver of any Event of Default unless such waiver is a
"Class Voting Matter" pursuant to a clause other than this clause (e) of the
definition of "Class Voting Matter";
(f) any consent of Requisite Lenders to be provided pursuant to
Section 9.10;
(g) any amendment to the definition of Canadian Borrowing Base or US
Borrowing Base, in each case, to the extent such amendment would effectively
make more credit available to Borrowers;
(h) any amendment to (or waiver of) Annex E that would result in
such Annex being less restrictive on Credit Parties; or
(i) any amendment to (or waiver of) Section 6.8 to the extent such
amendment (or waiver) permits Credit Parties and their Subsidiaries to sell
any assets in a single transaction or series of related transactions having a
value in excess of $24,000,000 if EBITDA of Holdings and its Subsidiaries on a
consolidated basis for the most recently ended four fiscal quarters, exclusive
of the amount of such EBITDA which is attributable to the assets to be sold,
would be less than $75,000,000, as determined by Agent upon review of such
calculation prepared by Credit Parties.
"Closing Date" means May 15, 2003.
"Closing Checklist" means the schedule, including all appendices,
exhibits or schedules thereto, listing certain documents and information to be
delivered in connection with the Agreement, the other Loan Documents and the
transactions contemplated thereunder, substantially in the form attached
hereto as Annex D.
"Code" means the Uniform Commercial Code as the same may, from time
to time, be enacted and in effect in the State of New York; provided, that to
the extent that the Code is used to define any term herein or in any Loan
Document and such term is defined differently in different Articles or
Divisions of the Code, the definition of such term contained in Article or
Division 9 shall govern; provided further, that in the event that, by reason
of mandatory provisions of law, any or all of the attachment, perfection,
publication or priority of, or remedies with respect to, Agent's, Canadian
Agent's or any Lender's Lien on any Collateral is governed
A-10
by the Uniform Commercial Code or foreign personal property security laws as
enacted and in effect in a jurisdiction other than the State of New York, the
term "Code" shall mean the Uniform Commercial Code or such foreign personal
property security laws as enacted and in effect in such other jurisdiction
solely for purposes of the provisions thereof relating to such attachment,
perfection, priority or remedies and for purposes of definitions related to
such provisions; provided further, that if such foreign personal property
security laws do not contain a definition that is used in another Loan
Document, the definition that is used in such other Loan Document shall have
the meaning given to it in the Code as though the references to the words " or
such foreign personal property security laws" in the second proviso of this
definition do not exist.
"Collateral" means the property covered by the Canadian Security
Agreements, the US Security Agreement, the Pledge Agreements, the Mortgages
and the other Collateral Documents and any other property, real or personal,
tangible or intangible, now existing or hereafter acquired, that may at any
time be or become subject to a security interest or Lien in favor of Agent, on
behalf of itself and Lenders, to secure the Obligations.
"Collateral Agent" means GE Capital in its capacity as Collateral
Agent pursuant to the Collateral Agency Agreement, the Shared Mortgages and
the Shared Pledge Agreement or its successor appointed pursuant to Section
9.7.
"Collateral Agency Agreement" means that certain Collateral Agency
Agreement dated as of the Closing Date among the Credit Parties and the
Collateral Agent.
"Collateral Documents" means the Canadian Security Agreements, the
US Security Agreement, the Pledge Agreements, the Guaranties, the Mortgages,
the Patent Security Agreements, the Trademark Security Agreements, the
Copyright Security Agreements and all similar agreements entered into
guaranteeing payment of, or granting a Lien upon property as security for
payment of, the Obligations or the Canadian Obligations, as applicable.
"Collateral Reports" means the reports with respect to the
Collateral referred to in Annex F.
"Collection Accounts" means, collectively, the Canadian Collection
Account and the US Collection Account; and "Collection Account" means either
of the foregoing Collection Accounts.
"Commitment Termination Date" means the earliest of (a) May 14,
2008, (b) if the Existing Senior Notes are not refinanced on terms reasonably
acceptable to Agent on or before April 1, 2005, April 1, 2005, (c) the date of
termination of Lenders' obligations to make Advances and to incur Letter of
Credit Obligations or permit existing Loans to remain outstanding pursuant to
Section 8.2(b), and (d) the date of indefeasible prepayment in full by
Borrowers of the Loans and the cancellation and return (or stand-by guarantee)
of all Letters of Credit or the cash collateralization of all Letter of Credit
Obligations pursuant to Annex B, and the permanent reduction of all
Commitments to zero dollars ($0).
A-11
"Commitments" means (a) as to any US Lender, the aggregate of such
Lender's US Revolving Loan Commitment (including without duplication the Swing
Line Lender's Swing Line Commitment as a subset of its US Revolving Loan
Commitment), Term Loan A Commitment and Term Loan B Commitment as set forth on
Annex J to the Agreement or in the most recent Assignment Agreement executed
by such Lender, (b) as to any Canadian Lender, the aggregate of such Lender's
Canadian Revolving Loan Commitment and Canadian Term Loan Commitment as set
forth on Annex J to the Agreement or in the most recent Assignment Agreement
executed by such Lender and (c) as to all Lenders, the aggregate of all
Lenders' US Revolving Loan Commitments (including without duplication the
Swing Line Lender's Swing Line Commitment as a subset of its US Revolving Loan
Commitment), Canadian Revolving Loan Commitment, Canadian Term Loan
Commitment, Term Loan A Commitment and Term Loan B Commitment, which aggregate
commitment shall be One Hundred and Ninety Million Dollars ($190,000,000) on
the Closing Date, as to each of clauses (a), (b) and (c), as such Commitments
may be reduced, amortized or adjusted from time to time in accordance with the
Agreement.
"Compliance Certificate" has the meaning ascribed to it in Annex E.
"Concentration Accounts" has the meaning ascribed to it in Annex C.
"Contracts" means all "contracts," as such term is defined in the
Code, now owned or hereafter acquired by any Credit Party, in any event,
including all contracts, undertakings, or agreements (other than (i) that
certain Marketing, Cooperation and Trademark Licensing Agreement dated as of
March 11, 2003 between Xxxxxx, Inc. and Caterpillar Inc., (ii) that certain
Supply Agreement dated as of March 11, 2003 between Xxxxxx, Inc. and
Caterpillar Inc. and (iii) rights evidenced by Chattel Paper, Documents or
Instruments) in or under which any Credit Party may now or hereafter have any
right, title or interest, including any agreement relating to the terms of
payment or the terms of performance of any Account.
"Control Letter" means a letter agreement between Agent or Canadian
Agent, as the case may be, and (i) the issuer of uncertificated securities
with respect to uncertificated securities in the name of any Credit Party,
(ii) a securities intermediary with respect to securities, whether
certificated or uncertificated, securities entitlements and other financial
assets held in a securities account in the name of any Credit Party, (iii) a
futures commission merchant or clearing house, as applicable, with respect to
commodity accounts and commodity contracts held by any Credit Party, whereby,
among other things, the issuer, securities intermediary or futures commission
merchant disclaims any security interest in the applicable financial assets,
acknowledges the Lien of Agent, on behalf of itself and Lenders, on such
financial assets, and agrees to follow the instructions or entitlement orders
of Agent or Canadian Agent, as the case may be, without further consent by the
affected Credit Party.
"Copyright License" means any and all rights now owned or hereafter
acquired by any Credit Party under any written agreement granting any right to
use any Copyright or Copyright registration.
A-12
"Copyright Security Agreements" means the Copyright Security
Agreements made in favor of Agent, on behalf of itself and Lenders, or
Canadian Agent, on behalf of itself and Canadian Lenders, by each applicable
Credit Party.
"Copyrights" means all of the following now owned or hereafter
adopted or acquired by any Credit Party: (a) all copyrights and General
Intangibles of like nature (whether registered or unregistered), all
registrations and recordings thereof, and all applications in connection
therewith, including all registrations, recordings and applications in the
United States Copyright Office or in any similar office or agency of the
United States, any state or territory thereof, or the Canadian Copyright
Office, or any other country or any political subdivision thereof, and (b) all
reissues, extensions or renewals thereof.
"Covenant Voting Matter" means any one of the following:
(a) except as set forth in clause (i) of the definition of Class
Voting Matter, any amendment to (or waiver of) Section 6.3, 6.5, 6.6, 6.7, 6.8
or 6.14 to the extent such amendment (or waiver) results in the covenants set
forth in such Section being less restrictive on the Credit Parties and their
Subsidiaries;
(b) any amendment to the definition of EBITDA, Fixed Charges or
Fixed Charge Coverage Ratio;
(c) any amendment to (or waiver of) Section (b) of Annex G that
would result in (or, in the case of a waiver, effectively result in) the
minimum Fixed Charge Coverage Ratio covenant being (i) 0.80 to 1.00 or less
for the four Fiscal Quarter period ending June 30, 2003, September 30, 2003,
December 31, 2003 or Xxxxx 00, 0000, (xx) 0.83 to 1.00 or less for the four
Fiscal Quarter period ending June 30, 2004, (iii) 0.85 to 1.00 or less for the
four Fiscal Quarter period ending September 30, 2004 or (iv) 0.90 to 1.00 for
the four Fiscal Quarter period ending as of the last day of any Fiscal Quarter
thereafter; or
(d) any amendment to (or waiver of) Section (c) of Annex G that
would result in (or, in the case of a waiver, effectively result in) the
minimum EBITDA covenant being less than (i) $65,000,000 with respect to any
four Fiscal Quarter period ending on or before September 30, 2005, (ii)
$70,000,000 with respect to any four Fiscal Quarter period ending from
December 31, 2005 through September 30, 2006 or (iii) $75,000,000 with respect
to any four Fiscal Quarter period ending thereafter.
"Credit Agreement Joinder Agreement" has the meaning ascribed to it
in Section 5.13 of the Agreement.
"Credit Parties" means, collectively, the US Credit Parties and the
Canadian Credit Parties; "Credit Party" means any one of the foregoing Credit
Parties.
"Default" means any event that, with the passage of time or notice
or both, would, unless cured or waived, become an Event of Default.
"Default Rate" has the meaning ascribed to it in Section 1.5(d).
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"Deposit Accounts" means all "deposit accounts" as such term is
defined in the Code, now or hereafter held in the name of any Credit Party.
"Design" means the following now owned or hereafter acquired by any
Credit Party: (a) all industrial designs, design patents, other designs and
intangibles of like nature (whether registered or unregistered) now owned or
existing or hereafter adopted or acquired, all registrations and recordings
thereof and all applications in connection therewith, including all
registrations, recordings and applications in the Canadian Industrial Designs
Office or any similar office in any country and all records thereof and (b)
all reissues, extensions or renewals thereof.
"Design License" means rights under any written agreement now owned
or hereafter acquired by any Credit Party granting any right to use any
Design.
"Disbursement Accounts" has the meaning ascribed to it in Annex C.
"Disclosure Schedules" means the Schedules prepared by Borrowers and
denominated as Disclosure Schedules (1.4) through (6.7) in the Index to the
Agreement.
"Xxxxx" has the meaning ascribed to it in the preamble of the
Agreement.
"Documents" means all "documents," as such term is defined in the
Code, now owned or hereafter acquired by any Credit Party, wherever located.
"EBITDA" means, with respect to any Person for any fiscal period,
without duplication, an amount equal to (a) consolidated net income of such
Person for such period determined in accordance with GAAP, minus (b) the sum
of (i) income tax credits, (ii) interest income, (iii) gain from extraordinary
items for such period, (iv) any aggregate net gain (but not any aggregate net
loss) during such period arising from the sale, exchange or other disposition
of capital assets by such Person (including any fixed assets, whether tangible
or intangible, all inventory sold in conjunction with the disposition of fixed
assets and all securities), and (v) any other non-cash gains that have been
added in determining consolidated net income, in each case to the extent
included in the calculation of consolidated net income of such Person for such
period in accordance with GAAP, but without duplication, plus (c) the sum of
(i) any provision for income taxes, (ii) Interest Expense plus fees associated
with this transaction that are not capitalized, (iii) loss from extraordinary
items for such period, (iv) the amount of non-cash charges (including
depreciation and amortization of tangible and intangible assets) for such
period, (v) amortized debt discount for such period, (vi) the amount of any
deduction to consolidated net income as the result of any grant to, or
exercise by, any members of the management of such Person of any Stock, (vii)
cash expenses incurred during any four quarter period in connection with
discontinued operations up to $3,000,000 in the aggregate, (viii) expenses
incurred during the quarter ended September 30, 2002 in connection with Credit
Parties' corporate relocation in an aggregate amount not to exceed $300,000,
(ix) expenses incurred during the quarters ended December 31, 2002 and March
31, 2003 in connection with the restructuring of Windsor Forestry Tools LLC in
an aggregate amount not to exceed $1,700,000, (x) any aggregate net loss (but
not any aggregate net gain) during any four quarter
A-14
period not to exceed $1,000,000 (plus, with respect to the quarter ended
September 30, 2002, $800,000 incurred in connection with the sale of Xxxxxx,
Inc.'s corporate headquarters) in the aggregate arising from the sale,
exchange or other disposition of capital assets by such Person (including any
fixed assets, whether tangible or intangible, all inventory sold in
conjunction with the disposition of fixed assets and all securities) and (xi)
expenses incurred in connection with the consolidation of the Credit Parties'
warehouses in the United States, the consolidation of the Credit Parties' and
their Subsidiaries' warehouses in Europe, the reduction in workforce following
implementation of enterprise resource planning software and the curtailment of
Credit Parties' logistics arrangements in an aggregate amount not to exceed
$2,000,000 during the term of this Agreement, in each case to the extent
included in the calculation of consolidated net income of such Person for such
period in accordance with GAAP, but without duplication. For purposes of this
definition, the following items shall be excluded in determining consolidated
net income of a Person: (1) the income (or deficit) of any other Person
accrued prior to the date it became a Subsidiary of, or was merged or
consolidated into or amalgamated with , such Person or any of such Person's
Subsidiaries; (2) the income (or deficit) of any other Person (other than a
Subsidiary) in which such Person has an ownership interest, except to the
extent any such income has actually been received by such Person in the form
of cash dividends or distributions; (3) the undistributed earnings of any
Subsidiary of such Person to the extent that the declaration or payment of
dividends or similar distributions by such Subsidiary is not at the time
permitted by the terms of any contractual obligation or requirement of law
applicable to such Subsidiary; (4) any restoration to income of any
contingency reserve, except to the extent that provision for such reserve was
made out of income accrued during such period; (5) any write-up of any asset;
(6) any net gain from the collection of the proceeds of life insurance
policies; (7) any net gain arising from the acquisition of any securities, or
the extinguishment, under GAAP, of any Indebtedness, of such Person, (8) in
the case of a successor to such Person by consolidation or merger or as a
transferee of its assets, any earnings of such successor prior to such
consolidation, merger or transfer of assets, and (9) any deferred credit
representing the excess of equity in any Subsidiary of such Person at the date
of acquisition of such Subsidiary over the cost to such Person of the
investment in such Subsidiary.
"Eligible Accounts" has the meaning ascribed to it in Section 1.6.
"Eligible Inventory" has the meaning ascribed to it in Section 1.7.
"Environmental Laws" means all applicable federal, state,
provincial, local and foreign laws, statutes, ordinances, codes, rules,
standards, orders-in-council, regulations and any applicable judicial or
administrative interpretation thereof, including any applicable judicial or
administrative order, consent decree, order or judgment, imposing liability or
standards of conduct for or relating to the regulation and protection of human
health, safety, the environment and natural resources (including ambient air,
surface water, groundwater, wetlands, land surface or subsurface strata,
wildlife, aquatic species and vegetation). Environmental Laws include the
Comprehensive Environmental Response, Compensation, and Liability Act of 1980
(42 U.S.C. xx.xx. 9601 et seq.) ("CERCLA"); the Hazardous Materials
Transportation Authorization Act of 1994 (49 U.S.C. xx.xx. 5101 et seq.); the
Federal Insecticide, Fungicide, and Rodenticide Act (7 U.S.C. xx.xx. 136 et
seq.); the Solid Waste Disposal Act (42 U.S.C. xx.xx. 6901 et seq.); the Toxic
Substance Control Act (15 U.S.C. xx.xx. 2601 et seq.); the Clean Air Act (42
U.S.C. xx.xx. 7401 et
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seq.); the Federal Water Pollution Control Act (33 U.S.C. xx.xx. 1251 et
seq.); the Occupational Safety and Health Act (29 U.S.C. xx.xx. 651 et seq.);
and the Safe Drinking Water Act (42 U.S.C. xx.xx. 300(f) et seq.), and any and
all regulations promulgated thereunder, and all analogous state, local,
provincial and foreign counterparts or equivalents and any transfer of
ownership notification or approval statutes relating to the protection of
human health, safety, or the environment.
"Environmental Liabilities" means, with respect to any Person, all
liabilities, obligations, responsibilities, response, remedial and removal
costs, investigation and feasibility study costs, capital costs, operation and
maintenance costs, losses, damages, punitive damages, property damages,
natural resource damages, consequential damages, treble damages, costs and
expenses (including all reasonable fees, disbursements and expenses of
counsel, experts and consultants), fines, penalties, sanctions and interest
incurred as a result of or related to any claim, suit, action, investigation,
proceeding or demand by any Person, whether based in contract, tort, implied
or express warranty, strict liability, criminal or civil statute or common
law, arising under or related to any Environmental Laws, Environmental
Permits, or as a result of any Release or threatened Release or presence of a
Hazardous Material whether on, at, in, under, from or about or in the vicinity
of any real or personal property.
"Environmental Permits" means all permits, licenses, authorizations,
certificates, approvals or registrations required by any Governmental
Authority under any Environmental Laws.
"Equipment" means all "equipment," as such term is defined in the
Code or the PPSA, as applicable, now owned or hereafter acquired by any Credit
Party, wherever located and, in any event, including all such Credit Party's
machinery and equipment, including processing equipment, conveyors, machine
tools, data processing and computer equipment, including embedded software and
peripheral equipment and all engineering, processing and manufacturing
equipment, office machinery, furniture, materials handling equipment, tools,
attachments, accessories, automotive equipment, trailers, trucks, forklifts,
molds, dies, stamps, motor vehicles, rolling stock and other equipment of
every kind and nature, trade fixtures and fixtures not forming a part of real
property, together with all additions and accessions thereto, replacements
therefor, all parts therefor, all substitutes for any of the foregoing, fuel
therefor, and all manuals, drawings, instructions, warranties and rights with
respect thereto, and all products and proceeds thereof and condemnation awards
and insurance proceeds with respect thereto.
"Equivalent Amount" means, on any date of determination, with
respect to obligations or valuations denominated in one currency (the "first
currency"), the amount of another currency (the "second currency") that would
result from the conversion of the relevant amount of the first currency into
the second currency at the 12:00 noon rate quoted on the Reuters Monitor
Screen (Page BOFC or such other Page as may replace such Page for the purpose
of displaying such exchange rates) on such date or, if such date is not a
Business Day, on the Business Day immediately preceding such date of
determination, or at such other rate as may have been agreed in writing
between Canadian Borrower and Canadian Agent.
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"ERISA" means the Employee Retirement Income Security Act of 1974,
as amended from time to time, and any regulations promulgated thereunder.
"ERISA Affiliate" means, with respect to any Credit Party, any trade
or business (whether or not incorporated) that, together with such Credit
Party, are treated as a single employer within the meaning of Sections 414(b),
(c), (m) or (o) of the IRC. "ERISA Event" means, with respect to any Credit
Party or any ERISA Affiliate, (a) any event described in Section 4043(c) of
ERISA with respect to a Title IV Plan (other than an event for which the 30
day notice period is waived); (b) the withdrawal of any Credit Party or ERISA
Affiliate from a Title IV Plan subject to Section 4063 of ERISA during a plan
year in which it was a substantial employer, as defined in Section 4001(a)(2)
of ERISA; (c) the complete or partial withdrawal of any Credit Party or any
ERISA Affiliate from any Multiemployer Plan; (d) the filing of a notice of
intent to terminate a Title IV Plan or the treatment of a plan amendment as a
termination under Section 4041 of ERISA; (e) the institution of proceedings to
terminate a Title IV Plan or Multiemployer Plan by the PBGC; (f) the failure
by any Credit Party or ERISA Affiliate to make when due required contributions
to a Multiemployer Plan or Title IV Plan unless such failure is cured within
30 days; (g) the termination of a Multiemployer Plan under Section 4041A of
ERISA or the reorganization or insolvency of a Multiemployer Plan under
Section 4241 or 4245 of ERISA; or (h) the loss of a Qualified Plan's
qualification or tax exempt status; or (i) the termination of a Plan described
in Section 4064 of ERISA.
"Escrow Agreement" means that certain Escrow Agreement dated as of
December 7, 2001 among Holdings, Xxxxxx, Inc., Alliant Techsystems Inc. and XX
Xxxxxx Chase Bank.
"ESOP" means a Plan that is intended to satisfy the requirements of
Section 4975(e)(7) of the IRC.
"Event of Default" has the meaning ascribed to it in Section 8.1.
"Excess Availability" means, as of any date of determination, the
sum of (a) the Canadian Borrowing Base, less the aggregate Canadian Revolving
Loan then outstanding and (b) the US Borrowing Base, less the sum of the
aggregate US Revolving Loan and Swing Line Loan then outstanding (on a pro
forma basis with trade payables being paid currently, expenses and liabilities
being paid in the ordinary course of business and without acceleration of
sales and without deterioration in working capital).
"Excess Cash Flow" means, without duplication, with respect to any
Fiscal Year of Holdings and its Subsidiaries, consolidated net income plus (a)
depreciation, amortization and Interest Expense to the extent deducted in
determining consolidated net income, minus (b) Capital Expenditures during
such Fiscal Year (excluding the financed portion thereof and excluding any
Capital Expenditures in such Fiscal Year to the extent in excess of the amount
permitted to be made in such Fiscal Year pursuant to clause (a) of Annex G),
minus (c) Interest Expense paid or accrued (excluding any original issue
discount, interest paid in kind or amortized debt discount, to the extent
included in determining Interest Expense) and scheduled principal payments
paid or payable in respect of Funded Debt, plus or minus (as the case may
A-17
be), (d) extraordinary gains or losses which are cash items not included in
the calculation of net income, minus (e) mandatory prepayments paid in cash
pursuant to Section 1.3 other than mandatory prepayments made pursuant to
Sections 1.3(b)(i), 1.3(b)(ii), 1.3(b)(iv) or 1.3(d), plus (f) taxes deducted
in determining consolidated net income to the extent not paid for in cash.
Notwithstanding the foregoing, the amount that would otherwise be included in
Fiscal Year 2003 Excess Cash Flow that was created prior to the Closing Date
shall be excluded from the calculation Excess Cash flow for such Fiscal Year.
"Excluded Proceeds" means:
(a) the proceeds of asset dispositions under Section 6.8(a),
(b) the proceeds of asset dispositions under Section 6.8(c) so long
as (i) no Default or Event of Default has occurred and is continuing, (ii)
EBITDA for Holdings and its Subsidiaries, on a consolidated basis for the
immediately preceding 4 Fiscal Quarters after giving pro forma effect to the
applicable asset disposition, was equal to or greater than $75,000,000 and
(iii) the proceeds of such asset dispositions are used by Credit Parties for
general corporate purposes not prohibited under the Agreement or, to the
extent permitted under Section 6.3(b) of the Agreement, to repurchase a
portion of the Existing Subordinated Notes or the Existing Senior Notes within
90 days of Credit Parties' receipt of such proceeds,
(c) the funds, if any, received by Xxxxxx, Inc. in connection with
the release of the funds escrowed in connection with the December 2001 sale of
the sporting equipment segment of Xxxxxx, Inc. so long as (i) no Default or
Event of Default has occurred and is continuing, (ii) EBITDA for Holdings and
its Subsidiaries, on a consolidated basis for the immediately preceding 4
Fiscal Quarters after giving pro forma effect to the receipt of such escrowed
funds, was equal to or greater than $75,000,000 and (iii) such funds are used
by Xxxxxx, Inc. for general corporate purposes not prohibited under the
Agreement or, to the extent permitted under Section 6.3(b) of the Agreement,
to repurchase a portion of the Existing Subordinated Notes or the Existing
Senior Notes within 90 days of Xxxxxx, Inc.'s receipt of such funds, and
(d) the proceeds of asset dispositions under Sections 6.8(b) and (d)
in an aggregate amount not to exceed $500,000 per year so long as no Default
or Event of Default has occurred and is continuing.
"Excluded Stock Issuances" means (a) issuances of Stock by Holdings
in connection with the exercise of options by any current or former employee
or director, (b) the exercise of the Xxxxxx Warrants, (c) the conversion or
exchange of the Xxxxxx Convertible Debt into the Xxxxxx Preferred Stock and
the conversion of the Xxxxxx Preferred Stock, (d) the issuance of additional
securities in connection with the payable in kind interest payments required
by the Xxxxxx Convertible Debt or dividend payments required by the Xxxxxx
Preferred Stock, (e) issuances of Stock by Holdings to sellers in connection
with, and as the purchase price for, Permitted Acquisitions and (f) other
issuances of Stock by Holdings so long as the proceeds thereof are used to
repurchase Indebtedness under Section 6.3(b)(v) within 90 days of receipt
thereof.
A-18
"Existing Senior Noteholders" means the holders from time to time of
the Existing Senior Notes.
"Existing Senior Notes" means those certain 7% Senior Notes due June
15, 2005 issued by Xxxxxx, Inc. in an aggregate original principal amount of
$150,000,000.
"Existing Senior Notes Documents" means the Existing Senior Notes,
that certain Indenture dated as of June 18, 1998 among Xxxxxx, Inc., as
issuer, Holdings, as guarantor, and LaSalle National Bank, as trustee, and all
other documents executed in connection therewith.
"Existing Subordinated Notes" means those certain 13% Senior
Subordinated Notes due 2009 issued by Xxxxxx, Inc. in an aggregate original
principal amount of $325,000,000.
"Existing Subordinated Notes Documents" means the Existing
Subordinated Notes, the Existing Subordinated Notes Indenture, and all other
documents executed in connection therewith.
"Existing Subordinated Notes Indenture" means that certain Indenture
dated as of August 19, 1999 among Xxxxxx, Inc., as issuer, Holdings, certain
subsidiaries of Xxxxxx, Inc. and United States Trust Company of New York, as
trustee.
"Fabtek" has the meaning ascribed to it in the preamble of the
Agreement.
"Fair Labor Standards Act" means the Fair Labor Standards Act, 29
U.S.C. ss.201 et seq.
"Fair Salable Balance Sheet" means a balance sheet of Borrowers
prepared in accordance with Section 3.4(d).
"Federal Funds Rate" means, for any day, a floating rate equal to
the weighted average of the rates on overnight Federal funds transactions
among members of the Federal Reserve System, as determined by Agent in its
sole discretion, which determination shall be final, binding and conclusive
(absent manifest error).
"Federal Reserve Board" means the Board of Governors of the Federal
Reserve System.
"Fees" means any and all fees payable to Agent, Canadian Agent or
any Lender pursuant to the Agreement or any of the other Loan Documents.
"Financial Covenants" means the financial covenants set forth in
Annex G.
"Financial Statements" means the consolidated and, as applicable,
separate income statements, statements of cash flows and balance sheets of
Holdings and its Subsidiaries delivered in accordance with Section 3.4 and
Annex E.
A-19
"Fiscal Month" means any of the monthly accounting periods of Credit
Parties.
"Fiscal Quarter" means any of the quarterly accounting periods of
Credit Parties, ending on March 31, June 30, September 30 and December 31 of
each year.
"Fiscal Year" means any of the annual accounting periods of Credit
Parties ending on December 31 of each year.
"Fixed Charges" means, with respect to any Person for any fiscal
period, (a) the aggregate of all Interest Expense paid during such period
(excluding all non-cash Interest Expense), plus (b) scheduled payments of
principal with respect to Indebtedness during such period, plus (c) Capital
Expenditures during such period, plus (d) the greater of (i) cash payments of
income taxes and capital taxes (net of tax refunds received during such
period) and (ii) zero.
"Fixed Charge Coverage Ratio" means, with respect to any Person for
any fiscal period, the ratio of EBITDA to Fixed Charges.
"Fixtures" means all "fixtures" as such term is defined in the Code
and all fixtures, facilities and equipment howsoever affixed or attached to
real property, now owned or hereafter acquired by any Credit Party.
"Foreign Lender" has the meaning ascribed to it in Section 1.15 of
the Agreement.
"Foreign Subsidiary" means any Subsidiary of a Credit Party that is
not formed under the laws of the United States or Canada or any state or
province thereof.
"Xxxxxxxxx Manufacturing" has the meaning ascribed to it in the
preamble of the Agreement.
"Funded Debt" means, with respect to any Person, without
duplication, all Indebtedness for borrowed money evidenced by notes, bonds,
debentures, or similar evidences of Indebtedness that by its terms matures
more than one year from, or is directly or indirectly renewable or extendible
at such Person's option under a revolving credit or similar agreement
obligating the lender or lenders to extend credit over a period of more than
one year from the date of creation thereof (but only to the extent borrowed
thereunder), and specifically including Capital Lease Obligations, current
maturities of long-term debt, revolving credit and short-term debt extendible
beyond one year at the option of the debtor, and also including, in the case
of Credit Parties, the Obligations and, without duplication, Guaranteed
Indebtedness consisting of guaranties of Funded Debt of other Persons.
"GAAP" means generally accepted accounting principles in the United
States of America consistently applied, as such term is further defined in
Annex G to the Agreement.
"Gear" has the meaning ascribed to it in the preamble of the
Agreement.
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"GE Capital" means General Electric Capital Corporation, a Delaware
corporation.
"GE Capital Canada" means General Electric Capital Canada Inc., a
Canada corporation.
"GE Capital Fee Letter" has the meaning ascribed to it in Section
1.9(a) of the Agreement.
"General Intangibles" means all "general intangibles," as such term
is defined in the Code, now owned or hereafter acquired by any Credit Party,
including all right, title and interest that such Credit Party may now or
hereafter have in or under any Contract, all payment intangibles, customer
lists, Licenses, Copyrights, Trademarks, Patents, and all applications
therefor and reissues, extensions or renewals thereof, rights in Intellectual
Property, interests in partnerships, joint ventures and other business
associations, licenses, permits, copyrights, trade secrets, proprietary or
confidential information, inventions (whether or not patented or patentable),
technical information, procedures, designs, knowledge, know-how, software,
data bases, data, skill, expertise, experience, processes, models, drawings,
materials and records, goodwill (including the goodwill associated with any
Trademark or Trademark License), all rights and claims in or under insurance
policies (including insurance for fire, damage, loss and casualty, whether
covering personal property, real property, tangible rights or intangible
rights, all liability, life, key man and business interruption insurance, and
all unearned premiums), uncertificated securities, choses in action, deposit,
checking and other bank accounts, rights to receive tax refunds and other
payments, rights to receive dividends, distributions, cash, Instruments and
other property in respect of or in exchange for pledged Stock and Investment
Property, rights of indemnification, all books and records, correspondence,
credit files, invoices and other papers, including without limitation all
tapes, cards, computer runs and other papers and documents in the possession
or under the control of such Credit Party or any computer bureau or service
company from time to time acting for such Credit Party.
"Goods" means all "goods" as defined in the Code or the PPSA, as
applicable, now owned or hereafter acquired by any Credit Party, wherever
located, including embedded software to the extent included in "goods" as
defined in the Code, manufactured homes, standing timber that is cut and
removed for sale and unborn young of animals.
"Governmental Authority" means any nation or government, any state
or other political subdivision thereof, and any agency, department or other
entity exercising executive, legislative, judicial, regulatory or
administrative functions of or pertaining to government.
"Guaranteed Indebtedness" means as to any Person, any obligation of
such Person guaranteeing, providing comfort or otherwise supporting any
Indebtedness, lease, dividend, or other obligation ("primary obligation") of
any other Person (the "primary obligor") in any manner, including any
obligation or arrangement of such Person to (a) purchase or repurchase any
such primary obligation, (b) advance or supply funds (i) for the purchase or
payment of any such primary obligation or (ii) to maintain working capital or
equity capital of the primary obligor or otherwise to maintain the net worth
or solvency or any balance sheet condition of the
A-21
primary obligor, (c) purchase property, securities or services primarily for
the purpose of assuring the owner of any such primary obligation of the
ability of the primary obligor to make payment of such primary obligation, (d)
protect the beneficiary of such arrangement from loss (other than product
warranties given in the ordinary course of business) or (e) indemnify the
owner of such primary obligation against loss in respect thereof except for
such indemnifications created in the ordinary course of business pursuant to
transactions that are not otherwise prohibited hereunder or under the other
Loan Documents. The amount of any Guaranteed Indebtedness at any time shall be
deemed to be an amount equal to the lesser at such time of (x) the stated or
determinable amount of the primary obligation in respect of which such
Guaranteed Indebtedness is incurred and (y) the maximum amount for which such
Person may be liable pursuant to the terms of the instrument embodying such
Guaranteed Indebtedness, or, if not stated or determinable, the maximum
reasonably anticipated liability (assuming full performance) in respect
thereof.
"Guaranties" means, collectively, the Canadian Guaranty and the US
Guaranty and any other guaranty executed by any Guarantor in favor of Agent or
Canadian Agent in respect of the Obligations or the Canadian Obligations, as
applicable.
"Guarantors" means Holdings, each domestic Subsidiary of each US
Borrower, each Subsidiary of Xxxxxx, Inc. (other than Canadian Borrower) that
is organized under the laws of Canada or a province thereof, and each other
Person, if any, that executes a guaranty or other similar agreement in favor
of Agent, for itself and the ratable benefit of Lenders, or Canadian Agent,
for the benefit of itself and Canadian Lenders in connection with the
transactions contemplated by the Agreement and the other Loan Documents.
"Hazardous Material" means any substance, material or waste
regulated by, or forming the basis of liability under, any Environmental Laws,
including any material or substance that is (a) defined as a "solid waste,"
"hazardous waste," "hazardous material," "hazardous substance," "dangerous
goods," "extremely hazardous waste," "restricted hazardous waste,"
"pollutant," "contaminant," "hazardous constituent," "special waste," "toxic
substance" or other similar term or phrase under any Environmental Laws, or
(b) petroleum or any fraction or by-product thereof, asbestos, polychlorinated
biphenyls (PCB's), or any radioactive substance.
"Holdings" has the meaning ascribed thereto in the recitals to the
Agreement.
"Indebtedness" means, with respect to any Person, without
duplication, (a) all indebtedness of such Person for borrowed money or for the
deferred purchase price of property payment for which is deferred 6 months or
more, but excluding obligations to trade creditors incurred in the ordinary
course of business, (b) all reimbursement and other obligations with respect
to letters of credit, bankers' acceptances and surety bonds, whether or not
matured, (c) all obligations evidenced by notes, bonds, debentures or similar
instruments, (d) all indebtedness created or arising under any conditional
sale or other title retention agreement with respect to property acquired by
such Person (even though the rights and remedies of the seller or lender under
such agreement in the event of default are limited to repossession or sale of
such property), (e) all Capital Lease Obligations and the present value
(discounted at the US Index Rate as in effect on the Closing Date) of future
rental payments under all synthetic leases, (f) all obligations
A-22
of such Person under commodity purchase or option agreements or other
commodity price hedging arrangements, in each case whether contingent or
matured, (g) all obligations of such Person under any foreign exchange
contract, currency swap agreement, interest rate swap, cap or collar agreement
or other similar agreement or arrangement designed to alter the risks of that
Person arising from fluctuations in currency values or interest rates, in each
case whether contingent or matured, (h) all Indebtedness referred to above
secured by (or for which the holder of such Indebtedness has an existing
right, contingent or otherwise, to be secured by) any Lien upon or in property
or other assets (including accounts and contract rights) owned by such Person,
even though such Person has not assumed or become liable for the payment of
such Indebtedness, and (i) the Obligations.
"Indemnified Liabilities" has the meaning ascribed to it in Section
1.13.
"Indemnified Person" has the meaning ascribed to it in Section 1.13.
"Insolvency Laws" means any of the Bankruptcy Code, the Bankruptcy
and Insolvency Act (Canada), and the Companies Creditors' Arrangement Act
(Canada), each as now and hereafter in effect, any successors to such statutes
and any other applicable insolvency or other similar law of any jurisdiction
including, without limitation, any law of any jurisdiction permitting a debtor
to obtain a stay or a compromise of the claims of its creditors against it.
"Instruments" means all "instruments," as such term is defined in
the Code or the PPSA, as applicable, now owned or hereafter acquired by any
Credit Party, wherever located, and, in any event, including all certificated
securities, all certificates of deposit, and all promissory notes and other
evidences of indebtedness, other than instruments that constitute, or are a
part of a group of writings that constitute, Chattel Paper.
"Intellectual Property" means any and all Licenses, Patents,
Designs, Copyrights, Trademarks, the goodwill associated with such Trademarks,
trade secrets and customer lists.
"Intercompany Notes" has the meaning ascribed to it in Section 6.3.
"Interest Expense" means, with respect to any Person for any fiscal
period, interest expense (whether cash or non-cash) of such Person determined
in accordance with GAAP for the relevant period ended on such date, including,
interest expense with respect to any Funded Debt of such Person and interest
expense for the relevant period that has been capitalized on the balance sheet
of such Person.
"Interest Payment Date" means (a) as to any Canadian Index Rate Loan
or any US Index Rate Loan, the first Business Day of each month to occur while
such Loan is outstanding, (b) as to any LIBOR Loan, the last day of the
applicable LIBOR Period, and (c) as to any BA Rate Loan, the last day of the
applicable BA Rate Period; provided that, in addition to the foregoing, each
of (x) the date upon which all of the Commitments have been terminated and the
Loans have been paid in full and (y) the Commitment Termination Date shall be
deemed to be an "Interest Payment Date" with respect to any interest that has
then accrued under the Agreement.
A-23
"Inventory" means all "inventory," as such term is defined in the
Code or the PPSA, as applicable, now owned or hereafter acquired by any Credit
Party, wherever located, and in any event including inventory, merchandise,
goods and other personal property that are held by or on behalf of any Credit
Party for sale or lease or are furnished or are to be furnished under a
contract of service, or that constitute raw materials, work in process,
finished goods, returned goods, or materials or supplies of any kind, nature
or description used or consumed or to be used or consumed in such Credit
Party's business or in the processing, production, packaging, promotion,
delivery or shipping of the same, including all supplies and embedded
software.
"Investment Property" means all "investment property" as such term
is defined in the Code now owned or hereafter acquired by any Credit Party,
wherever located, including (i) all securities, whether certificated or
uncertificated, including stocks, bonds, interests in limited liability
companies, partnership interests, treasuries, certificates of deposit, and
mutual fund shares; (ii) all securities entitlements of any Credit Party,
including the rights of any Credit Party to any securities account and the
financial assets held by a securities intermediary in such securities account
and any free credit balance or other money owing by any securities
intermediary with respect to that account; (iii) all securities accounts of
any Credit Party; (iv) all commodity contracts of any Credit Party; and (v)
all commodity accounts held by any Credit Party.
"IRC" means the Internal Revenue Code of 1986, as amended, and all
regulations promulgated thereunder.
"IRS" means the Internal Revenue Service.
"ITA" means the Income Tax Act (Canada) as the same may from time to
time be in effect.
"LBMB II" means Xxxxxx Brothers Merchant Banking Partners II L.P., a
Delaware limited partnership.
"L/C Issuer" has the meaning ascribed to it in Annex B.
"L/C Sublimit" has the meaning ascribed to it in Annex B.
"Xxxxxx Convertible Debt" means that certain Convertible Preferred
Equivalent Security Due 2013 issued by Holdings to XX Xxxxxx Investment SPV
LLC on March 2, 2001 in the original principal amount of $20,000,000.
"Xxxxxx Preferred Stock" means that certain Convertible Preferred
Stock that may be issued in exchange for the Xxxxxx Convertible Debt.
"Xxxxxx Warrants" means those certain warrants issued by Holdings to
LBMB II pursuant to that certain Certificate of Warrants dated March 2, 2001.
A-24
"Lenders" means GE Capital, GE Capital Canada, the other Lenders
named on the signature pages of the Agreement, and, if any such Lender shall
decide to assign all or any portion of the Obligations, such term shall
include any assignee of such Lender.
"Letter of Credit Fee" has the meaning ascribed to it in Annex B.
"Letter of Credit Obligations" means all outstanding obligations
incurred by Agent and A Loan Lenders at the request of Borrower
Representative, whether direct or indirect, contingent or otherwise, due or
not due, in connection with the issuance of Letters of Credit by Agent or
another L/C Issuer or the purchase of a participation as set forth in Annex B
with respect to any Letter of Credit. The amount of such Letter of Credit
Obligations shall equal the maximum amount that may be payable at such time or
at any time thereafter by Agent or A Loan Lenders thereupon or pursuant
thereto.
"Letters of Credit" means documentary or standby letters of credit
issued for the account of any Borrower by any L/C Issuer, and bankers'
acceptances issued by any Borrower, for which Agent and Lenders have incurred
Letter of Credit Obligations.
"Letter-of-Credit Rights" means "letter-of-credit rights" as such
term is defined in the Code, now owned or hereafter acquired by any Credit
Party, including rights to payment or performance under a letter of credit,
whether or not such Credit Party, as beneficiary, has demanded or is entitled
to demand payment or performance.
"Leverage Ratio" means, with respect to Holdings, on a consolidated
basis, the ratio of (a) Funded Debt as of any date of determination to (b) the
sum of EBITDA for the twelve months ending on that date of determination.
"LIBOR Business Day" means a Business Day on which banks in the City
of London are generally open for interbank or foreign exchange transactions.
"LIBOR Loan" means a Loan or any portion thereof bearing interest by
reference to the LIBOR Rate.
"LIBOR Period" means, with respect to any LIBOR Loan, each period
commencing on a LIBOR Business Day selected by Borrower Representative
pursuant to the Agreement and ending one, two or three months thereafter, as
selected by Borrower Representative's irrevocable notice to Agent or Canadian
Agent, as applicable, as set forth in Section 1.5(e); provided, that the
foregoing provision relating to LIBOR Periods is subject to the following:
(a) if any LIBOR Period would otherwise end on a day that is not a
LIBOR Business Day, such LIBOR Period shall be extended to the next
succeeding LIBOR Business Day unless the result of such extension would
be to carry such LIBOR Period into another calendar month in which event
such LIBOR Period shall end on the immediately preceding LIBOR Business
Day;
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(b) any LIBOR Period that would otherwise extend beyond the
Commitment Termination Date shall end 2 LIBOR Business Days prior to such
date;
(c) any LIBOR Period that begins on the last LIBOR Business Day of a
calendar month (or on a day for which there is no numerically
corresponding day in the calendar month at the end of such LIBOR Period)
shall end on the last LIBOR Business Day of a calendar month;
(d) Borrower Representative shall select LIBOR Periods so as not to
require a payment or prepayment of any LIBOR Loan during a LIBOR Period
for such Loan; and
(e) Borrower Representative shall select LIBOR Periods so that there
shall be no more than 5 separate LIBOR Loans in existence at any one
time.
"LIBOR Rate" means for each LIBOR Period, a rate of interest
determined by Agent equal to:
(a) the offered rate for deposits in US Dollars for the
applicable LIBOR Period that appears on Telerate Page 3750 as of 11:00 a.m.
(London time), on the second full LIBOR Business Day next preceding the first
day of such LIBOR Period (unless such date is not a Business Day, in which
event the next succeeding Business Day will be used); divided by
(b) a number equal to 1.0 minus the aggregate (but without
duplication) of the rates (expressed as a decimal fraction) of reserve
requirements in effect on the day that is 2 LIBOR Business Days prior to the
beginning of such LIBOR Period (including basic, supplemental, marginal and
emergency reserves under any regulations of the Federal Reserve Board or other
Governmental Authority having jurisdiction with respect thereto, as now and
from time to time in effect) for Eurocurrency funding (currently referred to
as "Eurocurrency Liabilities" in Regulation D of the Federal Reserve Board
that are required to be maintained by a member bank of the Federal Reserve
System.
If such interest rates shall cease to be available from Telerate
News Service, the LIBOR Rate shall be determined from such financial reporting
service or other information as shall be mutually acceptable to Agent, in the
case of US Loans, Canadian Agent, in the case of Canadian Loans, and Borrower
Representative.
"License" means any Copyright License, Patent License, Design
License, Trademark License or other license of rights or interests now held or
hereafter acquired by any Credit Party.
"Lien" means any mortgage or deed of trust, pledge, hypothecation,
assignment, deposit arrangement, lien, charge, claim, security interest,
easement or encumbrance, or preference, priority or other security agreement
or preferential arrangement of any kind or nature whatsoever (including any
lease or title retention agreement, any financing lease having substantially
the same economic effect as any of the foregoing, and the filing of, or
agreement to give, any financing statement perfecting a security interest
under the Code, the PPSA or comparable law of any jurisdiction).
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"Litigation" has the meaning ascribed to it in Section 3.13.
"Loan Account" has the meaning ascribed to it in Section 1.12.
"Loan Documents" means the Agreement, any Notes, the Collateral
Agency Agreement, the Collateral Documents, the Master Standby Agreement, the
Master Documentary Agreement, and all other agreements, instruments, documents
and certificates identified in the Closing Checklist executed and delivered
to, or in favor of, Agent, Canadian Agent or any Lenders and including all
other pledges, powers of attorney, consents, assignments, contracts, notices,
and all other written matter whether heretofore, now or hereafter executed by
or on behalf of any Credit Party, or any employee of any Credit Party, and
delivered to Agent, Canadian Agent or any Lender in connection with the
Agreement or the transactions contemplated thereby. Any reference in the
Agreement or any other Loan Document to a Loan Document shall include all
appendices, exhibits or schedules thereto, and all amendments, restatements,
supplements or other modifications thereto, and shall refer to the Agreement
or such Loan Document as the same may be in effect at any and all times such
reference becomes operative.
"Loans" means the US Revolving Loan, the Swing Line Loan, the
Canadian Revolving Loan, the Canadian Term Loan, the Term Loan A and the Term
Loan B; and "Loan" means any one of the foregoing Loans.
"Lock Boxes" has the meaning ascribed to it in Annex C.
"Margin Stock" has the meaning ascribed to in Section 3.10.
"Master Documentary Agreement" means the Master Agreement for
Documentary Letters of Credit dated as of the Closing Date among US Borrowers,
as Applicant(s), and GE Capital.
"Master Standby Agreement" means the Master Agreement for Standby
Letters of Credit dated as of the Closing Date among US Borrowers, as
Applicant(s), and GE Capital, as issuer.
"Material Adverse Effect" means a material adverse effect on (a) the
business, assets, operations, prospects or financial or other condition of the
Credit Parties considered as a whole, (b) any Borrower's ability to pay any of
the Loans or any of the other Obligations in accordance with the terms of the
Agreement, (c) the Collateral or Agent's Liens, on behalf of itself and
Lenders, or the Canadian Agent's Liens, on behalf of itself and the Canadian
Lenders on the Collateral or the priority of such Liens, or (d) Agent's,
Canadian Agent's or any Lender's rights and remedies under the Agreement and
the other Loan Documents.
"Maximum Amount" means, as of any date of determination, an amount
equal to the US Revolving Loan Commitment of all US Lenders as of that date.
"Mortgaged Properties" has the meaning assigned to it in Annex D.
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"Mortgages" means each of the mortgages, debentures, deeds of trust,
leasehold mortgages, leasehold deeds of trust, collateral assignments of
leases or other real estate security documents delivered by any Credit Party
to Agent, on behalf of itself and Lenders, or Canadian Agent, on behalf of
itself and Canadian Lenders with respect to the Mortgaged Properties, all in
form and substance reasonably satisfactory to Agent.
"Multiemployer Plan" means a "multiemployer plan" as defined in
Section 4001(a)(3) of ERISA, and to which any Credit Party or ERISA Affiliate
is making, is obligated to make or has made or been obligated to make,
contributions on behalf of participants who are or were employed by any of
them.
"Non-Funding Lender" has the meaning ascribed to it in Section
9.9(a)(ii).
"Non-Shared Collateral" means all Collateral that is not Shared
Collateral.
"Notes" means, collectively, the US Revolving Notes, the Swing Line
Notes, the Canadian Revolving Notes, the Canadian Term Notes, the Term A
Notes, the Term B Notes and the Term C Notes; and "Note" means any one of the
foregoing Notes.
"Notice of Canadian Revolving Credit Advance" has the meaning
ascribed to it in Section 1.1(a)(ii) of the Agreement.
"Notice of Conversion/Continuation-BA Rate" has the meaning ascribed
to it in Section 1.5(e).
"Notice of Conversion/Continuation-LIBOR Rate" has the meaning
ascribed to it in Section 1.5(e).
"Notice of Term Loan B Advance" has the meaning ascribed to it in
Section 1.1(b)(iii).
"Notice of US Revolving Credit Advance" has the meaning ascribed to
it in Section 1.1(a)(i).
"Obligations" means all loans, advances, debts, liabilities and
obligations for the performance of covenants, tasks or duties or for payment
of monetary amounts (whether or not such performance is then required or
contingent, or such amounts are liquidated or determinable) owing by any
Credit Party to Agent, Canadian Agent or any Lender, and all covenants and
duties regarding such amounts, of any kind or nature, present or future,
whether or not evidenced by any note, agreement or other instrument, arising
under the Agreement or any of the other Loan Documents. This term includes all
principal, interest (including all interest, fees and expenses that accrue
after the commencement of any case or proceeding by or against any Credit
Party in bankruptcy or any similar proceeding, whether or not allowed in such
case or proceeding), Fees, Charges, expenses, attorneys' fees and any other
sum chargeable to any Credit Party under the Agreement or any of the other
Loan Documents.
"Omark" has the meaning ascribed to it in the preamble of the
Agreement.
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"Outdoor Products Acquisition" means an acquisition within 18 months
of the Closing Date by any US Borrower (or Holdings, so long as
contemporaneously therewith, all assets so acquired are transferred to one or
more US Borrowers) of an outdoor products company or division thereof engaged
in the same or a substantially similar line of business as the outdoor
products operations of Credit Parties other than Xxxxx.
"Overadvance" has the meaning ascribed to it in Section
1.1(a)(i)(3).
"Patent License" means rights under any written agreement now owned
or hereafter acquired by any Credit Party granting any right with respect to
any invention on which a Patent is in existence.
"Patent Security Agreements" means the Patent Security Agreements
made in favor of Agent, on behalf of itself and Lenders, or Canadian Agent, on
behalf of itself and Canadian Lenders, by each applicable Credit Party.
"Patents" means all of the following in which any Credit Party now
holds or hereafter acquires any interest: (a) all letters patent of the United
States or of any other country, all registrations and recordings thereof, and
all applications for letters patent of the United States or of any other
country, including registrations, recordings and applications in the United
States Patent and Trademark Office or in any similar office or agency of the
United States, any State, or the Canadian Patent Office or any other country,
and (b) all reissues, continuations, continuations-in-part or extensions
thereof.
"PBGC" means the Pension Benefit Guaranty Corporation.
"Pension Plan" means a Plan described in Section 3(2) of ERISA.
"Permitted Encumbrances" means the following encumbrances: (a) Liens
for taxes or assessments or other governmental Charges not yet due and payable
or which are being contested in accordance with Section 5.2(b); (b) pledges or
deposits of money securing statutory obligations under workmen's compensation,
unemployment insurance, social security or public liability laws or similar
legislation (excluding Liens under ERISA); (c) pledges or deposits of money
securing bids, tenders, contracts (other than contracts for the payment of
money) or leases to which any Credit Party is a party as lessee made in the
ordinary course of business; (d) inchoate and unperfected workers', mechanics'
or similar liens arising in the ordinary course of business, so long as such
Liens attach only to Equipment, Fixtures and/or Real Estate; (e) carriers',
warehousemen's, suppliers' or other similar possessory liens arising in the
ordinary course of business and securing liabilities in an outstanding
aggregate amount not in excess of $100,000 at any time; (f) deposits securing,
or in lieu of, surety, appeal or customs bonds in proceedings to which any
Credit Party is a party; (g) any attachment or judgment lien not constituting
an Event of Default under Section 8.1(j); (h) zoning restrictions, easements,
licenses, or other restrictions on the use of any Real Estate or other minor
irregularities in title (including leasehold title) thereto, so long as the
same do not materially impair the use, value, or marketability of such Real
Estate; (i) presently existing or hereafter created Liens in favor of Agent,
on behalf of itself and Lenders, Collateral Agent, on behalf of the "Secured
Parties" under
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and as defined in the Collateral Agency Agreement and Canadian Agent, on
behalf of itself and the Canadian Lenders; (j) Liens expressly permitted under
clauses (b), (c) and (d) of Section 6.7 of the Agreement; (k) to the extent
not included in clauses (a), (d) and (e), Prior Claims that are unregistered
and secure amounts not yet due and payable; (l) Liens or other encumbrances
for which exceptions are included in the title insurance policies accepted by
Agent or Canadian Agent, as applicable, involving the Mortgages; (m) any
interest or title of a lessor under any lease entered into by any Credit Party
or Subsidiary of a Credit Party in the ordinary course of business and
covering only the assets so leased; (n) Liens arising from precautionary
Uniform Commercial Code financing statement filings with respect to operating
leases or consignment arrangements entered into by any Credit Party or any
Subsidiary of any Credit Party in the ordinary course of business and only
covering the assets so leased or consigned; (o) subject to the requirements of
Annex C, Liens in favor of any banking institution arising by operation of law
encumbering deposits (including the right of set-off) held by such banking
institutions incurred in the ordinary course of business and which are within
the general parameters customary in the banking industry; (p) leases and
subleases of Real Estate not materially interfering with the ordinary conduct
of business of the applicable Credit Parties and otherwise consented to by
Agent which consent will not be unreasonably withheld; and (q) Liens under
Section 412 of the IRC or Section 302 of ERISA so long as such Liens secure
liabilities not in excess of $250,000 and so long as the PBGC has not taken
any affirmative action to perfect such Liens.
"Permitted Proceeds" means the sum of (a) the proceeds of asset
dispositions under Section 6.8(c), (b) funds, if any, received by Xxxxxx, Inc.
in connection with the release of the funds escrowed in connection with the
December 2001 sale of the sporting equipment segment of Xxxxxx, Inc., (c) 50%
of Excess Cash Flow so long as such Excess Cash Flow is used to repurchase
Indebtedness under Section 6.3(b)(v) during the year such Excess Cash Flow is
created or the immediately succeeding year, (d) proceeds from Excluded Stock
Issuances described in clause (e) of the definition thereof, (f) the Loans
advanced on the Closing Date plus the portion of the Term Loan B advanced
after the Closing Date, in each case, that are not used by Borrowers for
another purpose so long as such Loans are used to repurchase Indebtedness
under Section 6.3(b)(v) within 90 days of receipt by the applicable Borrowers
of the proceeds of such Loans plus (g) $15,000,000.
"Person" means any individual, sole proprietorship, partnership,
joint venture, trust, unincorporated organization, association, corporation,
limited liability company, institution, public benefit corporation, other
entity or government (whether federal, state, county, city, municipal, local,
foreign, or otherwise, including any instrumentality, division, agency, body
or department thereof).
"Plan" means, at any time, an "employee benefit plan", as defined in
Section 3(3) of ERISA, other than a Multiemployer Plan, that any Credit Party
or ERISA Affiliate maintains, contributes to or has an obligation to
contribute to or has maintained, contributed to or had an obligation to
contribute to at any time within the past 7 years on behalf of participants
who are or were employed by any Credit Party or ERISA Affiliate.
A-30
"Pledge Agreements" means, collectively, the Shared Pledge
Agreement, the Shared Foreign Pledge Agreement and any other pledge agreements
entered into after the Closing Date by any Credit Party (as required by the
Agreement or any other Loan Document).
"PPSA" means the Personal Property Security Act (Ontario) and the
regulations thereunder, as from time to time in effect, provided, however, if
attachment, perfection or priority of Canadian Agent's security interests in
any Canadian Collateral are governed by the personal property security laws of
any jurisdiction other than Ontario, PPSA shall mean those personal property
security laws in such other jurisdiction for the purposes of the provisions
hereof relating to such attachment, perfection or priority and for the
definitions related to such provisions.
"Prior Claims" means all Liens created by applicable law (in
contrast with Liens voluntarily granted) which rank or are capable of ranking
prior or pari passu with the Canadian Agent's security interests (or the
applicable equivalent of such Liens) against all or part of the Canadian
Collateral, including for amounts owing for vacation pay, employee deductions
and contributions, goods and services taxes, sales taxes, harmonized sales
taxes, realty taxes, business taxes, workers' compensation, Quebec corporate
taxes, pension plan or fund obligations and overdue rents.
"Prior Credit Agreement" means that certain Credit Agreement dated
as of August 19, 1999 among Xxxxxx, Inc., as Borrower, the Prior Lender and
the other parties thereto, as heretofore amended.
"Prior Lender" means Bank of America, N.A., as administrative agent
for a group of lenders under the Prior Credit Agreement.
"Prior Lender Obligations" means the "Obligations" under and as
defined in the Prior Credit Agreement.
"Pro Forma" means the unaudited consolidated balance sheet of
Holdings and its Subsidiaries as of February 28, 2003 after giving pro forma
effect to the Related Transactions.
"Proceeds" means "proceeds," as such term is defined in the Code or
the PPSA, as applicable, including (a) any and all proceeds of any insurance,
indemnity, warranty or guaranty payable to any Credit Party from time to time
with respect to any of the Collateral, (b) any and all payments (in any form
whatsoever) made or due and payable to any Credit Party from time to time in
connection with any requisition, confiscation, condemnation, seizure or
forfeiture of all or any part of the Collateral by any Governmental Authority
(or any Person acting under color of governmental authority), (c) any claim of
any Credit Party against third parties (i) for past, present or future
infringement of any Patent or Patent License, or (ii) for past, present or
future infringement or dilution of any Copyright, Copyright License, Designs,
Design Licenses, Trademark or Trademark License, or for injury to the goodwill
associated with any Trademark or Trademark License, (d) any recoveries by any
Credit Party against third parties with respect to any litigation or dispute
concerning any of the Collateral including claims arising out of the loss or
nonconformity of, interference with the use of, defects in, or infringement of
A-31
rights in, or damage to, Collateral, (e) all amounts collected on, or
distributed on account of, other Collateral, including dividends, interest,
distributions and Instruments with respect to Investment Property and pledged
Stock, and (f) any and all other amounts, rights to payment or other property
acquired upon the sale, lease, license, exchange or other disposition of
Collateral and all rights arising out of Collateral.
"Projections" means Holdings' forecasted consolidated: (a) balance
sheets; (b) profit and loss statements; (c) cash flow statements; and (d)
capitalization statements, all prepared on a Subsidiary by Subsidiary or
division-by-division basis, if applicable, and otherwise consistent with the
historical Financial Statements of Holdings, together with appropriate
supporting details and a statement of underlying assumptions.
"Qualified Plan" means a Pension Plan that is intended to be
tax-qualified under Section 401(a) of the IRC.
"Qualified Assignee" means (a) with respect to any US Lender, (i)
any US Lender, any Affiliate of any US Lender and, with respect to any US
Lender that is an investment fund that invests in commercial loans, any other
investment fund that invests in commercial loans and that is managed or
advised by the same investment advisor as such US Lender or by an Affiliate of
such investment advisor, (ii) any commercial bank, savings and loan
association or savings bank or any other entity which is an "accredited
investor" (as defined in Regulation D under the Securities Act of 1933) which
extends credit or buys loans as one of its businesses, including insurance
companies, mutual funds, lease financing companies and commercial finance
companies, in each case, which has a rating of BBB or higher from S&P and a
rating of Baa2 or higher from Xxxxx'x at the date that it becomes a US Lender
and which, through its applicable lending office, is capable of lending to US
Borrowers without the imposition of any withholding or similar taxes and (iii)
any other Person approved by Agent (which approval shall not be unreasonably
withheld) and, so long as no Default or Event of Default has occurred and is
continuing, approved by Borrower Representative (which approval shall not be
unreasonably withheld); and (b) with respect to any Canadian Lender (i) any
Canadian Lender, any Affiliate of any Canadian Lender and, with respect to any
Canadian Lender that is an investment fund that invests in commercial loans,
any other investment fund that invests in commercial loans and that is managed
or advised by the same investment advisor as such Canadian Lender or by an
Affiliate of such investment advisor, and (ii) any commercial bank or other
entity existing under the laws of Canada or a province thereof that engages in
the lending of money in Canada, provided that so long as no Event of Default
has occurred and is continuing, each Person described under clause (b)(i) or
(b)(ii) shall not be a non-resident of Canada or shall be deemed to be a
resident in Canada (which may be under Section 212 (13.3) of the ITA), in each
case, for the purpose of the ITA in respect of amounts paid or credited under
this Agreement or such Person shall not be entitled to receive Canadian
withholding tax gross-up payments under Section 1.15 in respect of interest,
fees or other consideration paid in respect of the credit made available under
the Canadian Revolving Loan Commitment or the Canadian Term Loan Commitment to
Canadian Borrower; provided, that no Person determined by Agent to be acting
in the capacity of a vulture fund or distressed debt purchaser shall be a
Qualified Assignee before an Event of Default has occurred and is continuing,
and no Person or Affiliate of such Person
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(other than a Person that is already a Lender) holding Subordinated Debt or
Stock issued by any Credit Party shall be a Qualified Assignee.
"Real Estate" has the meaning ascribed to it in Section 3.6.
"Refinancing" means the repayment in full by Borrowers of the Prior
Lender Obligations on the Closing Date.
"Refunded Swing Line Loan" has the meaning ascribed to it in Section
1.1(c)(iii).
"Related Transactions" means the initial borrowing under the US
Revolving Loan, the Canadian Revolving Loan, the Canadian Term Loan, the Term
Loan A and the Term Loan B on the Closing Date, the Refinancing, the
repurchase of the Existing Senior Notes or the Existing Subordinated Notes
from the initial proceeds of the Loans, the payment of all fees, costs and
expenses associated with all of the foregoing and the execution and delivery
of all of the Related Transactions Documents.
"Related Transactions Documents" means the Loan Documents and all
other agreements or instruments executed in connection with the Related
Transactions.
"Release" means any release, threatened release, spill, emission,
leaking, pumping, pouring, emitting, emptying, escape, injection, deposit,
disposal, discharge, dispersal, dumping, leaching or migration of Hazardous
Material in the indoor or outdoor environment, including the movement of
Hazardous Material through or in the air, soil, surface water, ground water or
property. "Requisite Lenders" means:
(a) so long as EBITDA of Holdings on a consolidated basis with its
Subsidiaries is equal to or greater than (i) $65,000,000 for the most recently
completed 4 fiscal quarter period ending on or before September 30, 2005, (ii)
$70,000,000 for any four Fiscal Quarter period ending from December 31, 2005
through September 30, 2006 or (iii) $75,000,000 for any four Fiscal Quarter
period ending thereafter, in each case, for which financial statements have
been delivered to Lenders pursuant to the Credit Agreement:
(i) with respect to any Class Voting Matter, Lenders holding
50.1% or more of the unutilized Commitments (unless such Commitments have
been terminated), participations in Swing Line Loans, the US Revolving
Loans, the Canadian Revolving Loans, the Canadian Term Loan, the Term
Loan A and the Term Loan B; provided, however, that, for purposes of this
clause (i), "Requisite Lenders" must include at least two Lenders from
each Class and 50.1% of the unutilized Commitments (unless such
Commitments have been terminated) and Loans of each Class; provided
further, however, that, notwithstanding the foregoing, a vote by GE
Capital, GE Capital Canada or any Affiliate thereof with respect to any
matter shall count as one vote for purposes of determining whether there
are at least two votes in the Class consisting of A Loan Lenders and
Canadian Lenders and if there is only one Lender in a Class, "Requisite
Lenders" must include such Lender or, if there are only two Lenders in a
Class, "Requisite Lenders" must include only the Lender in such Class
that has the highest percentage of unutilized Commitments (unless such
Commitments have been terminated) and Loans in such Class;
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(ii) with respect to any Covenant Voting Matter, (A) first,
Lenders holding 50.1% or more of the unutilized US Revolving Loan
Commitments (unless such Commitments have been terminated), the
unutilized Canadian Revolving Loan Commitments (unless such Commitments
have been terminated), participations in Swing Line Loans, the US
Revolving Loans, the Canadian Revolving Loans, the Term Loan A and the
Canadian Term Loan and (B) then, if clause (A) above is satisfied,
Lenders holding 66 2/3% or more of the unutilized Commitments,
participations in Swing Line Loans, the US Revolving Loans, the Canadian
Revolving Loans, the Canadian Term Loan, the Term Loan A and the Term
Loan B; provided, however, that the waiver of a covenant described in any
Covenant Voting Matter that would effectively cause any Class to continue
making extensions of credit under this Credit Agreement shall also
require the consent of at least two Lenders from such Class and 50.1% of
the unutilized Commitments (unless such Commitments have been terminated)
and Loans of such Class; provided further, however, that, notwithstanding
the foregoing, a vote by GE Capital, GE Capital Canada or any Affiliate
thereof with respect to any matter shall count as one vote for purposes
of determining whether there are at least two votes in the Class
consisting of A Loan Lenders and Canadian Lenders and if there is only
one Lender in a Class, "Requisite Lenders" must include such Lender or,
if there are only two Lenders in a Class, "Requisite Lenders" must
include only the Lender in such Class that has the highest percentage of
unutilized Commitments (unless such Commitments have been terminated) and
Loans in such Class; or
(iii) with respect to any other matter, Lenders holding 50.1%
or more of the unutilized US Revolving Loan Commitments (unless such
Commitments have been terminated), the unutilized Canadian Revolving Loan
Commitments (unless such Commitments have been terminated),
participations in Swing Line Loans, the US Revolving Loans, the Canadian
Revolving Loans, the Term Loan A and the Canadian Term Loan; or
(b) if EBITDA of Holdings on a consolidated basis with its
Subsidiaries is less than (i) $65,000,000 for the most recently completed 4
fiscal quarter period ending on or before September 30, 2005, (ii) $70,000,000
for any four Fiscal Quarter period ending from December 31, 2005 through
September 30, 2006 or (iii) $75,000,000 for any four Fiscal Quarter period
ending thereafter, in each case, for which financial statements have been
delivered to Lenders pursuant to the Credit Agreement, Lenders holding 50.1%
or more of the unutilized Commitments (unless such Commitments have been
terminated), participations in Swing Line Loans, the US Revolving Loans, the
Canadian Revolving Loans, the Canadian Term Loan, the Term Loan A and the Term
Loan B; provided, however, that "Requisite Lenders" must include at least two
Lenders from each Class and 50.1% of the unutilized Commitments (unless such
Commitments have been terminated) and Loans of each Class; provided further,
however, that, notwithstanding the foregoing, a vote by GE Capital, GE Capital
Canada or any Affiliate thereof with respect to any matter shall count as one
vote for purposes of determining whether there are
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at least two votes in the Class consisting of A Loan Lenders and Canadian
Lenders and if there is only one Lender in a Class, "Requisite Lenders" must
include such Lender or, if there are only two Lenders in a Class, "Requisite
Lenders" must include only the Lender in such Class that has the highest
percentage of unutilized Commitments (unless such Commitments have been
terminated) and Loans in such Class.
"Requisite Revolving Lenders" means Lenders having (a) 50.1% or more
of the US Revolving Loan Commitments and Canadian Revolving Loan Commitments,
or (b) if the US Revolving Loan Commitments and Canadian Revolving Loan
Commitments have been terminated, 50.1% or more of the aggregate outstanding
amount of the US Revolving Loan, participation interests in Swing Line Loans
and the Canadian Revolving Loan.
"Reserves" means (a) reserves established by Agent from time to time
against US Borrowers' Eligible Inventory pursuant to Section 5.9, (b) reserves
established pursuant to Section 5.4(c), (c) reserves established pursuant to
Section 5.12 and (d) such other reserves against Eligible Accounts, Eligible
Inventory or US Borrowing Availability of any US Borrower that Agent may, in
its reasonable credit judgment (or Agent shall at the direction of the
Super-Majority Revolving Lenders in their reasonable credit judgment),
establish from time to time. Without limiting the generality of the foregoing,
Reserves established to ensure the payment of accrued Interest Expenses or
Indebtedness shall be deemed to be a reasonable exercise of Agent's credit
judgment.
"Restricted Payment" means, with respect to any Credit Party (a) the
declaration or payment of any dividend or the incurrence of any liability to
make any other payment or distribution of cash or other property or assets in
respect of Stock; (b) any payment on account of the purchase, redemption,
defeasance, sinking fund or other retirement of such Credit Party's Stock or
any other payment or distribution made in respect thereof, either directly or
indirectly; (c) any payment or prepayment of principal of, premium, if any, or
interest, fees or other charges on or with respect to, and any redemption,
purchase, retirement, defeasance, sinking fund or similar payment and any
claim for rescission with respect to, any Subordinated Debt; (d) any payment
made to redeem, purchase, repurchase or retire, or to obtain the surrender of,
any outstanding warrants, options or other rights to acquire Stock of such
Credit Party now or hereafter outstanding; (e) any payment of a claim for the
rescission of the purchase or sale of, or for material damages arising from
the purchase or sale of, any shares of such Credit Party's Stock or of a claim
for reimbursement, indemnification or contribution arising out of or related
to any such claim for damages or rescission; (f) any payment, loan,
contribution, or other transfer of funds or other property to any Stockholder
of such Credit Party other than payment of compensation in the ordinary course
of business to Stockholders who are employees of such Person; and (g) any
payment of management fees (or other fees of a similar nature) by such Credit
Party to any Stockholder of such Credit Party or its Affiliates.
"Retiree Welfare Plan" means, at any time, a Welfare Plan that
provides for continuing coverage or benefits for any participant or any
beneficiary of a participant after such participant's termination of
employment, other than continuation coverage provided pursuant to Section
4980B of the IRC and at the sole expense of the participant or the beneficiary
of the participant.
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"Shared Collateral" means the Collateral pledged to the Collateral
Agent pursuant to the Shared Pledge Agreement, the Shared Foreign Pledge
Agreements and the Shared Mortgages.
"Shared Foreign Pledge Agreements" means, collectively, (i) that
certain Commercial Pledge Agreement over Shares of even date herewith executed
by Xxxxxx, Inc. in favor of the Collateral Agent, on behalf of the "Secured
Parties" under and as defined in the Collateral Agency Agreement pledging 65%
of all of the Stock of Xxxxxx Europe, S.A., a company formed under the laws of
Belgium, (ii) that certain Quota Pledge Agreement of even date herewith
executed by Xxxxxx, Inc. in favor of the Collateral Agent, on behalf of the
"Secured Parties" under and as defined in the Collateral Agency Agreement
pledging 65% of all of the Stock of Xxxxxx Industrial, Ltda., a company formed
under the laws of Brazil, (iii) that certain Share Pledge Agreement of even
date herewith executed by Xxxxxx, Inc. in favor of the Collateral Agent, on
behalf of the "Secured Parties" under and as defined in the Collateral Agency
Agreement pledging 65% of all of the Stock of Svenska Xxxxxx Aktiebolag, a
company formed under the laws of Sweden, and (iv) that certain Agreement on
the Pledge of Shares of even date herewith executed by Xxxxxx, Inc. in favor
of the Collateral Agent, on behalf of the "Secured Parties" under and as
defined in the Collateral Agency Agreement pledging 65% of all of the Stock of
Xxxxxx GmbH, a company formed under the laws of Germany.
"Shared Pledge Agreement" means the Shared Pledge Agreement of even
date herewith executed by the US Credit Parties in favor of Collateral Agent,
on behalf of the "Secured Parties" under and as defined in the Collateral
Agency Agreement pledging all Stock of their domestic Subsidiaries and 65% of
the stock of their direct Foreign Subsidiaries and Canadian Subsidiaries, if
any, and all indebtedness for money borrowed of a Subsidiary of Holdings, as
amended, restated, supplemented or otherwise modified from time to time.
"Shared Mortgages" means the Mortgages with respect to the Real
Estate described on Schedule (A-1).
"Software" means all "software" as such term is defined in the Code,
now owned or hereafter acquired by any Credit Party, other than software
embedded in any category of Goods, including all computer programs and all
supporting information provided in connection with a transaction related to
any program.
"Solvent" means, (a) with respect to any Person organized under the
laws of the United States or any state thereof, on a particular date, that on
such date (i) the fair value of the property of such Person is greater than
the total amount of liabilities, including contingent liabilities, of such
Person; (ii) the present fair salable value of the assets of such Person is
not less than the amount that will be required to pay the probable liability
of such Person on its debts as they become absolute and matured; (iii) such
Person does not intend to, and does not believe that it will, incur debts or
liabilities beyond such Person's ability to pay as such debts and liabilities
mature; and (iv) such Person is not engaged in a business or transaction, and
is not about to engage in a business or transaction, for which such Person's
property would constitute an unreasonably small capital, and (b) with respect
to any Person on a particular date that is subject to the Insolvency Laws of
Canada, that on such date (i) the property of such Person is
A-36
sufficient, if disposed of at a fairly conducted sale under legal process, to
enable payment of all its obligations, due and accruing due, (ii) the property
of such Person is, at a fair valuation, greater than the total amount of
liabilities, including contingent liabilities, of such Person, (iii) such
Person has not ceased paying its current obligations in the ordinary course of
business as they generally become due, and (iv) such Person is not for any
reason unable to meet its obligations as they generally become due. The amount
of contingent liabilities (such as litigation, guaranties and pension plan
liabilities) at any time shall be computed as the amount that, in light of all
the facts and circumstances existing at the time, represents the amount that
can be reasonably be expected to become an actual or matured liability.
"Stock" means all shares, options, warrants, general or limited
partnership interests, membership interests or other equivalents (regardless
of how designated) of or in a corporation, partnership, limited liability
company or equivalent entity whether voting or nonvoting, including common
stock, preferred stock or any other "equity security" (as such term is defined
in Rule 3a11-1 of the General Rules and Regulations promulgated by the
Securities and Exchange Commission under the Securities Exchange Act of 1934).
"Stockholder" means, with respect to any Person, each holder of
Stock of such Person.
"Subordinated Debt" means the Indebtedness evidenced by the Existing
Subordinated Notes, the Xxxxxx Convertible Debt any other Indebtedness of any
Credit Party subordinated to the Obligations in a manner and form satisfactory
to Agent and Lenders in their sole discretion, as to right and time of payment
and as to any other rights and remedies thereunder.
"Subsidiary" means, with respect to any Person, (a) any corporation
of which an aggregate of more than 50% of the outstanding Stock having
ordinary voting power to elect a majority of the board of directors of such
corporation (irrespective of whether, at the time, Stock of any other class or
classes of such corporation shall have or might have voting power by reason of
the happening of any contingency) is at the time, directly or indirectly,
owned legally or beneficially by such Person or one or more Subsidiaries of
such Person, or with respect to which any such Person has the right to vote or
designate the vote of 50% or more of such Stock whether by proxy, agreement,
operation of law or otherwise, and (b) any partnership or limited liability
company in which such Person and/or one or more Subsidiaries of such Person
shall have an interest (whether in the form of voting or participation in
profits or capital contribution) of more than 50% or of which any such Person
is a general partner or may exercise the powers of a general partner. Unless
the context otherwise requires, each reference to a Subsidiary shall be a
reference to a Subsidiary of a Borrower.
"Super-Majority Revolving Lenders" means Lenders having (a) more
than 66 2/3% of the US Revolving Loan Commitments and Canadian Revolving Loan
Commitments, or (b) if the US Revolving Loan Commitments and Canadian
Revolving Loan Commitments have been terminated, more than 66 2/3% of the
aggregate outstanding amount of the US Revolving Loan, participation interests
in Swing Line Loans and the Canadian Revolving Loan.
A-37
"Supporting Obligations" means all "supporting obligations" as such
term is defined in the Code, including letters of credit and guaranties issued
in support of Accounts, Chattel Paper, Documents, General Intangibles,
Instruments, or Investment Property.
"Swing Line Advance" has the meaning ascribed to it in Section
1.1(c)(i).
"Swing Line Availability" has the meaning ascribed to it in Section
1.1(c)(i).
"Swing Line Commitment" means, as to the Swing Line Lender, the
commitment of the Swing Line Lender to make Swing Line Advances as set forth
on Annex J to the Agreement, which commitment constitutes a subfacility of the
US Revolving Loan Commitment of the Swing Line Lender.
"Swing Line Lender" means GE Capital.
"Swing Line Loan" means, as the context may require, at any time,
the aggregate amount of Swing Line Advances outstanding to US Borrowers.
"Swing Line Note" has the meaning ascribed to it in Section
1.1(c)(ii).
"Taxes" means present and future taxes (including, but not limited
to, income, corporate, capital, excise, property, ad valorem, sales, use,
payroll, value added and franchise taxes, deductions, withholdings and custom
duties), charges, fees, imposts, levies, deductions or withholdings and all
liabilities with respect thereto, imposed by any Governmental Authority
excluding, in the case of Section 1.15 only, (a) taxes imposed on or measured
by the net income or capital of Agent, Canadian Agent or a Lender by the
jurisdictions under the laws of which Agent, Canadian Agent and Lenders are
organized or conduct business or any political subdivision thereof, (b) any
branch profits taxes imposed by the United States of America or any similar
tax imposed by any other jurisdiction in which a Lender is located and (c) in
the case of a Foreign Lender (other than an assignee pursuant to a request by
Borrowers under Section 1.16(d)), any withholding tax that is imposed on
amounts payable to such Foreign Lender at the time such Foreign Lender becomes
a party to this Agreement (or designates a new lending office, unless such
designation is at the request of Borrowers) or is attributable to such Foreign
Lender's failure to comply with Section 1.15(d), except to the extent that
such Foreign Lender (or its assignor, if any) was entitled, at the time of
designation of a new lending office (or assignment), to receive additional
amounts from Borrowers with respect to such withholding tax pursuant to
Section 1.15(a).
"Term A Note" has the meaning assigned to it in Section 1.1(b)(ii).
"Term B Note" has the meaning assigned to it in Section 1.1(b)(iii).
"Term Loans" means, collectively, the Canadian Term Loan, the Term
Loan A and the Term Loan B; and "Term Loan" means any one of the foregoing
Term Loans.
"Termination Date" means the date on which (a) the Loans have been
indefeasibly repaid in full, (b) except as set forth in clause (c) below, all
other Obligations under
A-38
the Agreement and the other Loan Documents have been completely discharged
(other than contingent indemnification obligations so long as no suits,
actions, proceedings or claims are pending or threatened against any
Indemnified Person asserting any damages, losses and liabilities that are
Indemnified Liabilities), (c) all Letter of Credit Obligations have been cash
collateralized, canceled or backed by standby letters of credit in accordance
with Annex B, and (d) none of Borrowers shall have any further right to borrow
any monies under the Agreement.
"Term Loan A" has the meaning assigned to it in Section 1.1(b)(ii).
"Term Loan A Commitment" means (a) as to any Lender with a Term Loan
A Commitment, the commitment of such Lender to make its US Pro Rata Share of
the Term Loan A as set forth on Annex J to the Agreement or in the most recent
Assignment Agreement executed by such Lender, and (b) as to all Lenders with a
Term Loan A Commitment, the aggregate commitment of all Lenders to make the
Term Loan A, which aggregate commitment shall be Thirty-Two Million Dollars
($32,000,000) on the Closing Date. After advancing the Term Loan A, each
reference to a Lender's Term Loan A Commitment shall refer to that Lender's US
Pro Rata Share of the outstanding Term Loan A.
"Term Loan B" has the meaning assigned to it in Section 1.1(b)(iii).
"Term Loan B Advance Period" means (a) with respect to $40,000,000
of the Term Loan B Commitment, the Closing Date and (b) with respect to the
remaining Term Loan B Commitment, the period commencing on the Closing Date
and ending on the earlier of (i) the Commitment Termination Date and (ii) the
date that is six (6) months following the Closing Date (the "First Term Loan B
Advance Period Termination Date"); provided, however, that, upon written
request by Borrower Representative to Lenders on or before the First Term Loan
B Advance Period Termination Date, the First Term Loan B Advance Period
Termination Date automatically shall be extended by six months to the date one
year following the Closing Date without further action by Lenders so long as
no Default or Event of Default has occurred and is continuing on the First
Term Loan B Advance Period Termination Date.
"Term Loan B Commitment" means (a) as to any Lender with a Term Loan
B Commitment, the commitment of such Lender to make its US Pro Rata Share of
the Term Loan B as set forth on Annex J to the Agreement or in the most recent
Assignment Agreement executed by such Lender, and (b) as to all Lenders with a
Term Loan B Commitment, the aggregate commitment of all Lenders to make the
Term Loan B, which aggregate commitment shall be Eighty-Five Million Dollars
($85,000,000) on the Closing Date. After the termination of the Term Loan B
Advance Period, each reference to a Lender's Term Loan B Commitment shall
refer to that Lender's US Pro Rata Share of the outstanding Term Loan B.
"Title IV Plan" means a Pension Plan (other than a Multiemployer
Plan), that is covered by Title IV of ERISA, and that any Credit Party or
ERISA Affiliate maintains, contributes to or has an obligation to contribute
to on behalf of participants who are or were employed by any of them.
A-39
"Trademark Security Agreements" means the Trademark Security
Agreements made in favor of Agent, on behalf of itself, Canadian Agent and
Lenders, or Canadian Agent, on behalf of itself and Canadian Lenders, by each
applicable Credit Party.
"Trademark License" means rights under any written agreement now
owned or hereafter acquired by any Credit Party granting any right to use any
Trademark.
"Trademarks" means all of the following now owned or hereafter
existing or adopted or acquired by any Credit Party: (a) all trademarks, trade
names, corporate names, business names, trade styles, service marks, logos,
other source or business identifiers, prints and labels on which any of the
foregoing have appeared or appear, designs and general intangibles of like
nature (whether registered or unregistered), all registrations and recordings
thereof, and all applications in connection therewith, including
registrations, recordings and applications in the United States Patent and
Trademark Office or in any similar office or agency of the United States, any
state or territory thereof, or any other country or any political subdivision
thereof; (b) all reissues, extensions or renewals thereof; and (c) all
goodwill associated with or symbolized by any of the foregoing.
"Unfunded Pension Liability" means, at any time, the aggregate
amount, if any, of the sum of (a) the amount by which the present value of all
accrued benefits under each Title IV Plan exceeds the fair market value of all
assets of such Title IV Plan allocable to such benefits in accordance with
Title IV of ERISA, all determined as of the most recent valuation date for
each such Title IV Plan using the actuarial assumptions for funding purposes
in effect under such Title IV Plan, and (b) for a period of 5 years following
a transaction which might reasonably be expected to be covered by Section 4069
of ERISA, the liabilities (whether or not accrued) that could be avoided by
any Credit Party or any ERISA Affiliate as a result of such transaction.
"US Borrower" and "US Borrowers" have the respective meanings
ascribed to such terms in the preamble to the Agreement.
"US Borrowing Availability" means as of any date of determination,
the lesser of (a) the Maximum Amount and (b) the US Borrowing Base, in each
case, less the sum of the aggregate US Revolving Loan and Swing Line Loan then
outstanding; provided that an Overadvance in accordance with Section
1.1(a)(iii) may cause the US Revolving Loan and the Swing Line Loan to exceed
the US Borrowing Base by the amount of such permitted Overadvance.
"US Borrowing Base" means, as of any date of determination by Agent
from time to time, an amount equal to the sum at such time of:
(a) up to 85% of the book value of US Borrowers' Eligible Accounts;
plus
(b) the lesser of:
(i) (A) the lesser of (x) up to 65% of the book value of US
Borrowers' Eligible Inventory consisting of finished goods or raw
materials valued at the lower of
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cost (determined on a first-in, first-out basis) or market, and (y) 85%
of the Appraised Value of US Inventory (excluding any work-in-process),
plus
(B) the lesser of (I) up to 50% (or, if lower, the ratio
of (x) the Appraised Value of US Inventory with respect to finished goods
to (y) the cost of such Inventory) of the book value of US Borrowers'
Eligible Inventory consisting of work-in-process valued at the lower of
cost (determined on a first-in, first-out basis) or market, and (II)
$6,000,000, and
(ii) $38,200,000; minus
(c) any Reserves established by Agent at such time.
"US Collateral" means all Collateral in respect of which a security
interest is granted in favor of Agent by a US Credit Party.
"US Collection Account" means that certain account of Agent, account
number 000-000-00 in the name of Agent at Bankers Trust Company in New York,
New York ABA No. 021 001 033, or such other account as may be specified in
writing by Agent as the "US Collection Account."
"US Commitments" means, collectively, the US Revolving Loan
Commitment, the Swing Line Commitment, the Term Loan A Commitment and the Term
Loan B Commitment; and "US Commitment" means any one of the foregoing US
Commitments or portion thereof.
"US Credit Parties" means, collectively, Holdings, each US Borrower
and each domestic Subsidiary of a US Borrower that executes and delivers a US
Guaranty; and "US Credit Party" means any one of the foregoing US Credit
Parties.
"US Dollar Amount" means, for any amount as of any date of
determination, the aggregate of:
(a) the portion, if any, of the amount denominated in US Dollars;
and
(b) the Equivalent Amount in US Dollars (determined on such date
unless otherwise specified herein) of the portion, if any, of the amount
denominated in Canadian Dollars.
"US Dollars" or "$" means the lawful currency of the United States.
"US Index Rate" means, for any day, a floating rate equal to the
higher of (i) the rate publicly quoted from time to time by The Wall Street
Journal as the "base rate on corporate loans posted by at least 75% of the
nation's 30 largest banks" (or, if The Wall Street Journal ceases quoting a
base rate of the type described, the highest per annum rate of interest
published by the Federal Reserve Board in Federal Reserve statistical release
H.15 (519) entitled "Selected Interest Rates" as the Bank prime loan rate or
its equivalent), and (ii) the Federal Funds Rate plus
A-41
50 basis points per annum. Each change in any interest rate provided for in
the Agreement based upon the US Index Rate shall take effect at the time of
such change in the US Index Rate.
"US Index Rate Loan" means a Loan denominated in US Dollars or
portion thereof bearing interest by reference to the US Index Rate.
"US Guaranty" means that certain Guaranty of even date herewith from
each US Credit Party signatory thereto in favor of Agent, on behalf of itself
and Lenders, as amended, restated, supplemented or otherwise modified from
time to time.
"US Lenders" means A Loan Lenders and B Loan Lenders, and "US
Lender" means any one of the foregoing US Lenders.
"US Loans" means, collectively, the US Revolving Loan, the US Swing
Line Loan, the Term Loan A and the Term Loan B; and "US Loan" means any one of
the foregoing US Loans or portion thereof.
"US Obligations" means all Obligations other than the Canadian
obligations.
"US Pro Rata Share" means with respect to all matters relating to
any US Lender, (a) with respect to the US Revolving Loan and the Term Loan A,
the percentage obtained by dividing (i) the US Revolving Loan Commitment and
Term Loan A Commitment of that US Lender by (ii) the aggregate US Revolving
Loan Commitments and Term Loan A Commitments of all US Lenders, as any such
percentages may be adjusted by assignments permitted pursuant to Section 9.1,
(b) with respect to the Term Loan B, the percentage obtained by dividing (i)
the Term Loan B Commitment of that US Lender by (ii) the aggregate Term Loan B
Commitments of all US Lenders, as any such percentages may be adjusted by
assignments permitted pursuant to Section 9.1, (c)with respect to all US Loans
prior to the Commitment Termination Date, the percentage obtained by dividing
(i) the aggregate US Commitments of that US Lender by (ii) the aggregate US
Commitments of all US Lenders, and (d) with respect to all US Loans on and
after the Commitment Termination Date, the percentage obtained by dividing (i)
the aggregate outstanding principal balance of the US Loans held by that US
Lender, by (ii) the outstanding principal balance of the US Loans held by all
US Lenders.
"US Revolving Credit Advance" has the meaning ascribed to it in
Section 1.1(a)(i).
"US Revolving Loan" means, at any time, the sum of (i) the aggregate
amount of US Revolving Credit Advances outstanding to US Borrowers plus (ii)
the aggregate Letter of Credit Obligations incurred on behalf of US Borrowers.
Unless the context otherwise requires, references to the outstanding principal
balance of the US Revolving Loan shall include the outstanding balance of
Letter of Credit Obligations.
"US Revolving Loan Commitment" means (a) as to any Lender, the
aggregate commitment of such Lender to make US Revolving Credit Advances or
incur Letter of Credit Obligations as set forth on Annex J to the Agreement or
in the most recent Assignment Agreement executed by such Lender and (b) as to
all Lenders, the aggregate commitment of all
A-42
Lenders to make Revolving Credit Advances or incur Letter of Credit
Obligations, which aggregate commitment shall be Sixty-Four Million Dollars
($64,000,000) on the Closing Date, as such amount may be adjusted, if at all,
from time to time in accordance with the Agreement.
"US Revolving Note" and "US Revolving Loan Note" have the respective
meanings ascribed to them in Section 1.1(a)(ii).
"US Security Agreement" means the Security Agreement of even date
herewith entered into by and among Agent, on behalf of itself, Canadian Agent
and Lenders, and each US Credit Party that is a signatory thereto, as amended,
restated, supplemented or otherwise modified from time to time.
"Welfare Plan" means a Plan described in Section 3(i) of ERISA.
"Windsor" has the meaning ascribed to it in the preamble of the
Agreement.
Rules of construction with respect to accounting terms used in the
Agreement or the other Loan Documents shall be as set forth in Annex G. All
other undefined terms contained in any of the Loan Documents shall, unless the
context indicates otherwise, have the meanings provided for by the Code to the
extent the same are used or defined therein; in the event that any term is
defined differently in different Articles or Divisions of the Code, the
definition contained in Article or Division 9 shall control. Unless otherwise
specified, references in the Agreement or any of the Appendices to a Section,
subsection or clause refer to such Section, subsection or clause as contained
in the Agreement. The words "herein," "hereof" and "hereunder" and other words
of similar import refer to the Agreement as a whole, including all Annexes,
Exhibits and Schedules, as the same may from time to time be amended,
restated, modified or supplemented, and not to any particular section,
subsection or clause contained in the Agreement or any such Annex, Exhibit or
Schedule. An Event of Default shall "exist", "continue" or be "continuing"
until such Event of Default is waived in writing in accordance with Section
11.2 of the Agreement.
Wherever from the context it appears appropriate, each term stated
in either the singular or plural shall include the singular and the plural,
and pronouns stated in the masculine, feminine or neuter gender shall include
the masculine, feminine and neuter genders. The words "including", "includes"
and "include" shall be deemed to be followed by the words "without
limitation"; the word "or" is not exclusive; references to Persons include
their respective successors and assigns (to the extent and only to the extent
permitted by the Loan Documents) or, in the case of governmental Persons,
Persons succeeding to the relevant functions of such Persons; and all
references to statutes and related regulations shall include any amendments of
the same and any successor statutes and regulations. Whenever any provision in
any Loan Document refers to the knowledge (or an analogous phrase) of any
Credit Party, such words are intended to signify that such Credit Party has
actual knowledge or awareness of a particular fact or circumstance or that
such Credit Party, if it had exercised reasonable diligence, would have known
or been aware of such fact or circumstance.
A-43
ANNEX B (SECTION 1.2)
TO
CREDIT AGREEMENT
LETTERS OF CREDIT
(a) Issuance. Subject to the terms and conditions of the Agreement,
Agent and A Loan Lenders agree to incur, from time to time prior to the
Commitment Termination Date, upon the request of Borrower Representative on
behalf of US Borrowers and for US Borrowers' account, Letter of Credit
Obligations by causing Letters of Credit to be issued by GE Capital or a
Subsidiary thereof or a bank or other legally authorized Person selected by or
acceptable to Agent in its sole discretion (each, an "L/C Issuer") for US
Borrowers' account and guaranteed by Agent; provided, that if the L/C Issuer
is an A Loan Lender, then such Letters of Credit shall not be guaranteed by
Agent but rather each A Loan Lender shall, subject to the terms and conditions
hereinafter set forth, purchase (or be deemed to have purchased) risk
participations in all such Letters of Credit issued with the written consent
of Agent, as more fully described in paragraph (b)(ii) below. The aggregate
amount of all such Letter of Credit Obligations shall not at any time exceed
the least of (i) Fifty Million Dollars ($50,000,000) (the "L/C Sublimit") and
(ii) the Maximum Amount less the aggregate outstanding principal balance of
the US Revolving Credit Advances and the Swing Line Loan, and (iii) the US
Borrowing Base less the aggregate outstanding principal balance of the US
Revolving Credit Advances and the Swing Line Loan. No such Letter of Credit
shall have an expiry date that is more than one year following the date of
issuance thereof, but may contain provisions for automatic renewal thereof,
unless otherwise determined by the Agent, in its sole discretion, and neither
Agent nor A Loan Lenders shall be under any obligation to incur Letter of
Credit Obligations in respect of, or purchase risk participations in, any
Letter of Credit having an expiry date that is later than (A) if the Existing
Senior Notes have not been refinanced on terms reasonably acceptable to Agent,
the date set forth in clause (b) of the definition of Commitment Termination
Date or (B) otherwise, the date set forth in clause (a) of the definition of
Commitment Termination Date.
(b) (i) Advances Automatic; Participations. In the event that Agent
or any A Loan Lender shall make any payment on or pursuant to any Letter of
Credit Obligation, such payment shall then be deemed automatically to
constitute a US Revolving Credit Advance under Section 1.1(a)(i) of the
Agreement regardless of whether a Default or Event of Default has occurred and
is continuing and notwithstanding any US Borrower's failure to satisfy the
conditions precedent set forth in Section 2, and each A Loan Lender shall be
obligated to pay its US Pro Rata Share thereof in accordance with the
Agreement. The failure of any A Loan Lender to make available to Agent for
Agent's own account its US Pro Rata Share of any such US Revolving Credit
Advance or payment by Agent under or in respect of a Letter of Credit shall
not relieve any other A Loan Lender of its obligation hereunder to make
available to Agent its US Pro Rata Share thereof, but no A Loan Lender shall
be responsible for the failure of any other A Loan Lender to make available
such other A Loan Lender's US Pro Rata Share of any such payment.
(ii) If it shall be illegal or unlawful for US Borrowers to
incur US Revolving Credit Advances as contemplated by paragraph (b)(i) above
because of an Event of
B-1
Default described in Sections 8.1(h) or (i) or otherwise or if it shall be
illegal or unlawful for any A Loan Lender to be deemed to have assumed a
ratable share of the reimbursement obligations owed to an L/C Issuer, or if
the L/C Issuer is an A Loan Lender, then (A) immediately and without further
action whatsoever, each A Loan Lender shall be deemed to have irrevocably and
unconditionally purchased from Agent (or such L/C Issuer, as the case may be)
an undivided interest and participation equal to such A Loan Lender's US Pro
Rata Share (based on the US Revolving Loan Commitments) of the Letter of
Credit Obligations in respect of all Letters of Credit then outstanding and
(B) thereafter, immediately upon issuance of any Letter of Credit, each A Loan
Lender shall be deemed to have irrevocably and unconditionally purchased from
Agent (or such L/C Issuer, as the case may be) an undivided interest and
participation in such A Loan Lender's US Pro Rata Share (based on the US
Revolving Loan Commitments) of the Letter of Credit Obligations with respect
to such Letter of Credit on the date of such issuance. Each A Loan Lender
shall fund its participation in all payments or disbursements made under the
Letters of Credit in the same manner as provided in the Agreement with respect
to US Revolving Credit Advances.
(c) Cash Collateral.
(i) If US Borrowers are required to provide cash collateral for
any Letter of Credit Obligations pursuant to the Agreement prior to the
Commitment Termination Date, US Borrowers will pay to Agent for the ratable
benefit of itself and A Loan Lenders cash or cash equivalents acceptable to
Agent ("Cash Equivalents") in an amount equal to 105% of the maximum amount
then available to be drawn under each Letter of Credit outstanding. Such funds
or Cash Equivalents shall be held by Agent in a cash collateral account (the
"Cash Collateral Account") maintained at a bank or financial institution
acceptable to Agent. The Cash Collateral Account shall be in the name of US
Borrowers and shall be pledged to, and subject to the control of, Agent, for
the benefit of Agent, Canadian Agent and Lenders, in a manner satisfactory to
Agent. Each US Borrower hereby pledges and grants to Agent, on behalf of
itself, Canadian Agent and Lenders, a security interest in all such funds and
Cash Equivalents held in the Cash Collateral Account from time to time and all
proceeds thereof, as security for the payment of all amounts due in respect of
the Letter of Credit Obligations and other Obligations, whether or not then
due. The Agreement, including this Annex B, shall constitute a security
agreement under applicable law.
(ii) If any Letter of Credit Obligations, whether or not then
due and payable, shall for any reason be outstanding on the Commitment
Termination Date, US Borrowers shall either (A) provide cash collateral
therefor in the manner described above, or (B) cause all such Letters of
Credit and guaranties thereof, if any, to be canceled and returned, or (C)
deliver a stand-by letter (or letters) of credit in guaranty of such Letter of
Credit Obligations, which stand-by letter (or letters) of credit shall be of
like tenor and duration (plus 30 additional days) as, and in an amount equal
to 105% of the aggregate maximum amount then available to be drawn under the
Letters of Credit to which such outstanding Letter of Credit Obligations
relate and shall be issued by a Person, and shall be subject to such terms and
conditions, as are be satisfactory to Agent in its sole discretion.
B-2
(iii) From time to time after funds are deposited in the Cash
Collateral Account by any US Borrower, whether before or after the Commitment
Termination Date, Agent may apply such funds or Cash Equivalents then held in
the Cash Collateral Account to the payment of any amounts, and in such order
as Agent may elect, as shall be or shall become due and payable by US
Borrowers to Agent and Lenders with respect to such Letter of Credit
Obligations and, upon the satisfaction in full of all Letter of Credit
Obligations, to any other Obligations of any Borrower then due and payable.
(iv) No US Borrower nor any Person claiming on behalf of or
through any US Borrower shall have any right to withdraw any of the funds or
Cash Equivalents held in the Cash Collateral Account, except that upon the
termination of all Letter of Credit Obligations and the payment of all amounts
payable by Borrowers to Agent, Canadian Agent and Lenders in respect thereof,
any funds remaining in the Cash Collateral Account shall be applied to other
Obligations then due and owing and upon payment in full of such Obligations,
any remaining amount shall be paid to US Borrowers or as otherwise required by
law. Interest earned on deposits in the Cash Collateral Account shall be for
the account of Agent.
(d) Fees and Expenses. US Borrowers agree to pay to Agent for the
benefit of A Loan Lenders, as compensation to such Lenders for Letter of
Credit Obligations incurred hereunder, (i) all costs and expenses incurred by
Agent or any A Loan Lender on account of such Letter of Credit Obligations,
and (ii) for each month during which any Letter of Credit Obligation shall
remain outstanding, a fee (the "Letter of Credit Fee") in an amount equal to
(i) with respect to documentary Letters of Credit two and one-half of one
percent (2.50%) per annum and (ii) with respect to standby Letters of Credit,
the Applicable Revolver LIBOR Margin from time to time in effect multiplied by
the maximum amount available from time to time to be drawn under the
applicable Letter of Credit. Such fee shall be paid to Agent for the benefit
of the A Loan Lenders in arrears, on the first day of each month and on the
Commitment Termination Date. In addition, US Borrowers shall pay to any L/C
Issuer, on demand, such fees (including all per annum fees), charges and
expenses of such L/C Issuer in respect of the issuance, negotiation,
acceptance, amendment, transfer and payment of such Letter of Credit or
otherwise payable pursuant to the application and related documentation under
which such Letter of Credit is issued.
(e) Request for Incurrence of Letter of Credit Obligations. Borrower
Representative shall give Agent at least 2 Business Days' prior written notice
requesting the incurrence of any Letter of Credit Obligation. The notice shall
be accompanied by the form of the Letter of Credit (which shall be acceptable
to the L/C Issuer) and a completed Application for Standby Letter of Credit or
Application for Documentary Letter of Credit (as applicable) in the form of
Exhibit B-1 or B-2 attached hereto. Notwithstanding anything contained herein
to the contrary, Letter of Credit applications by Borrower Representative and
approvals by Agent and the L/C Issuer may be made and transmitted pursuant to
electronic codes and security measures mutually agreed upon and established by
and among Borrower Representative, Agent and the L/C Issuer.
(f) Obligation Absolute. The joint and several obligation of US
Borrowers to reimburse Agent and A Loan Lenders for payments made with respect
to any Letter of Credit
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Obligation shall be absolute, unconditional and irrevocable, without necessity
of presentment, demand, protest or other formalities, and the obligations of
each A Loan Lender to make payments to Agent with respect to Letters of Credit
shall be unconditional and irrevocable. Such obligations of US Borrowers and A
Loan Lenders shall be paid strictly in accordance with the terms hereof under
all circumstances including the following:
(i) any lack of validity or enforceability of any Letter of
Credit or the Agreement or the other Loan Documents or any other
agreement;
(ii) the existence of any claim, setoff, defense or other right
that any Borrower or any of their respective Affiliates or any
Lender may at any time have against a beneficiary or any transferee
of any Letter of Credit (or any Persons or entities for whom any
such transferee may be acting), Agent, Canadian Agent, any Lender,
or any other Person, whether in connection with the Agreement, the
Letter of Credit, the transactions contemplated herein or therein or
any unrelated transaction (including any underlying transaction
between any Borrower or any of their respective Affiliates and the
beneficiary for which the Letter of Credit was procured);
(iii) any draft, demand, certificate or any other document
presented under any Letter of Credit proving to be forged,
fraudulent, invalid or insufficient in any respect or any statement
therein being untrue or inaccurate in any respect;
(iv) payment by Agent (except as otherwise expressly provided
in paragraph (g)(ii)(C) below) or any L/C Issuer under any Letter of
Credit or guaranty thereof against presentation of a demand, draft
or certificate or other document that does not comply with the terms
of such Letter of Credit or such guaranty;
(v) any other circumstance or event whatsoever, that is similar
to any of the foregoing; or
(vi) the fact that a Default or an Event of Default has
occurred and is continuing.
(g) Indemnification; Nature of Lenders' Duties.
(i) In addition to amounts payable as elsewhere provided in the
Agreement, US Borrowers jointly and severally hereby agree to pay and to
protect, indemnify, and save harmless Agent, Canadian Agent and each Lender
from and against any and all claims, demands, liabilities, damages, losses,
costs, charges and expenses (including reasonable attorneys' fees and
allocated costs of internal counsel) that Agent, Canadian Agent or any Lender
may incur or be subject to as a consequence, direct or indirect, of (A) the
issuance of any Letter of Credit or guaranty thereof, or (B) the failure of
Agent, Canadian Agent or any Lender seeking indemnification or of any L/C
Issuer to honor a demand for payment under any Letter of Credit or guaranty
thereof as a result of any act or omission, whether rightful or wrongful, of
any present or future de jure or de facto government or Governmental
Authority, in each case other
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than to the extent solely as a result of the gross negligence or willful
misconduct of Agent, Canadian Agent or such Lender (as finally determined by a
court of competent jurisdiction).
(ii) As between Agent, Canadian Agent and any Lender and US
Borrowers, US Borrowers assume all risks of the acts and omissions of, or
misuse of any Letter of Credit by beneficiaries, of any Letter of Credit. In
furtherance and not in limitation of the foregoing, to the fullest extent
permitted by law, none of Agent, Canadian Agent or any Lender shall be
responsible for: (A) the form, validity, sufficiency, accuracy, genuineness or
legal effect of any document issued by any party in connection with the
application for and issuance of any Letter of Credit, even if it should in
fact prove to be in any or all respects invalid, insufficient, inaccurate,
fraudulent or forged; (B) the validity or sufficiency of any instrument
transferring or assigning or purporting to transfer or assign any Letter of
Credit or the rights or benefits thereunder or proceeds thereof, in whole or
in part, that may prove to be invalid or ineffective for any reason; (C)
failure of the beneficiary of any Letter of Credit to comply fully with
conditions required in order to demand payment under such Letter of Credit;
provided, that in the case of any payment by Agent under any Letter of Credit
or guaranty thereof, Agent shall be liable to the extent such payment was made
solely as a result of its gross negligence or willful misconduct (as finally
determined by a court of competent jurisdiction) in determining that the
demand for payment under such Letter of Credit or guaranty thereof complies on
its face with any applicable requirements for a demand for payment under such
Letter of Credit or guaranty thereof; (D) errors, omissions, interruptions or
delays in transmission or delivery of any messages, by mail, cable, telegraph,
telex or otherwise, whether or not they may be in cipher; (E) errors in
interpretation of technical terms; (F) any loss or delay in the transmission
or otherwise of any document required in order to make a payment under any
Letter of Credit or guaranty thereof or of the proceeds thereof; (G) the
credit of the proceeds of any drawing under any Letter of Credit or guaranty
thereof; and (H) any consequences arising from causes beyond the control of
Agent, Canadian Agent or any Lender. None of the above shall affect, impair,
or prevent the vesting of any of Agent's, Canadian Agent's or any Lender's
rights or powers hereunder or under the Agreement.
(iii) Nothing contained herein shall be deemed to limit or to
expand any waivers, covenants or indemnities made by US Borrowers in favor of
any L/C Issuer in any letter of credit application, reimbursement agreement or
similar document, instrument or agreement between or among US Borrowers and
such L/C Issuer, including a Master Documentary Agreement and a Master Standby
Agreement entered into with Agent.
B-5
ANNEX C (SECTION 1.8)
TO
CREDIT AGREEMENT
CASH MANAGEMENT SYSTEM
Each Credit Party shall establish and maintain the Cash Management
Systems described below:
(a) On or before the Closing Date and until the Termination Date,
each Credit Party shall (i) establish lock boxes ("Lock Boxes") or at Agent's
discretion, blocked accounts ("Blocked Accounts") at one or more of the banks
set forth in Disclosure Schedule (3.19), and shall request in writing and
otherwise take such reasonable steps to ensure that all Account Debtors
forward payment directly to such Lock Boxes, and (ii) deposit and cause its
Subsidiaries to deposit or cause to be deposited promptly, and in any event no
later than the first Business Day after the date of receipt thereof, all cash,
checks, drafts or other similar items of payment relating to or constituting
payments made in respect of any and all Collateral (whether or not otherwise
delivered to a Lock Box) and all funds released to Xxxxxx, Inc. pursuant to
the Escrow Agreement (unless, if Borrowers have satisfied the conditions set
forth in Section 6.3(b)(v), such funds are wired or otherwise transferred
directly to prepay Existing Senior Notes or Existing Subordinated Notes) into
one or more Blocked Accounts in such Credit Party's name and at a bank
identified in Disclosure Schedule (3.19) (each, a "Relationship Bank"). On or
before the Closing Date, each Credit Party shall have established a
concentration account in its name (each a "Concentration Account" and
collectively, the "Concentration Accounts") at the bank or banks that shall be
designated as the Concentration Account bank for each such Credit Party in
Disclosure Schedule (3.19) (each a "Concentration Account Bank" and
collectively, the "Concentration Account Banks"), which banks shall be
reasonably satisfactory to Agent.
(b) Each Borrower may maintain, in its name, an account (each a
"Disbursement Account" and collectively, the "Disbursement Accounts") at a
bank reasonably acceptable to Agent into which Agent or Canadian Agent, as
applicable, shall, from time to time, deposit proceeds of Loans made to such
Borrower pursuant to Section 1.1 for use by such Borrower solely in accordance
with the provisions of Section 1.4.
(c) On or before the Closing Date (or such later date as Agent shall
consent to in writing), each Concentration Account Bank, each bank where a
Disbursement Account is maintained and all other Relationship Banks, shall
have entered into tri-party blocked account agreements with Agent, for the
benefit of itself, Canadian Agent and Lenders, with respect to all such
accounts of a US Credit Party, or Canadian Agent, for the benefit of itself
and Canadian Lenders, with respect to all such accounts of a Canadian Credit
Party, and the applicable Credit Party, in form and substance reasonably
acceptable to Agent or Canadian Agent, as applicable, which shall become
operative on or prior to the Closing Date. Each such blocked account agreement
shall provide, among other things, that (i) all items of payment deposited in
such account and proceeds thereof deposited in the applicable Concentration
Account are held by such bank as agent or bailee-in-possession for Agent, with
respect to all accounts of US Credit Parties, or Canadian Agent, with respect
to all accounts of Canadian Credit Parties, (ii) the bank
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executing such agreement has no rights of setoff or recoupment or any other
claim against such account, as the case may be, other than for payment of its
service fees and other charges directly related to the administration of such
account and for returned checks or other items of payment, and (iii) from and
after the Closing Date (A) with respect to banks at which a Blocked Account is
maintained, such bank agrees, from and after the receipt of a notice (an
"Activation Notice") from Agent or Canadian Agent, as applicable, (which
Activation Notice may be given by Agent or Canadian Agent, as applicable, at
any time at which (1) a Default or Event of Default has occurred and is
continuing, or (2) Excess Availability is less than $8,500,000 (any of the
foregoing being referred to herein as an "Activation Event")), to forward
immediately all amounts in each Blocked Account to such Credit Party's
Concentration Account Bank and to commence the process of daily sweeps from
such Blocked Account into the applicable Concentration Account and (B) with
respect to each Concentration Account Bank, such bank agrees from and after
the receipt of an Activation Notice from Agent or Canadian Agent, as
applicable, upon the occurrence of an Activation Event, to immediately forward
all amounts received in the applicable Concentration Account to the US
Collection Account, in the case of any account of a US Credit Party, or the
Canadian Collection Account, in the case of any account of a Canadian Credit
Party, through daily sweeps from such Concentration Account into the
Collection Account. From and after the date Agent or Canadian Agent has
delivered an Activation Notice to any bank with respect to any Blocked
Account(s), no Credit Party shall accumulate or maintain cash in Disbursement
Accounts or payroll accounts as of any date of determination in excess of
checks outstanding against such accounts as of that date and amounts necessary
to meet minimum balance requirements.
(d) So long as no Default or Event of Default has occurred and is
continuing, Credit Parties may amend Disclosure Schedule (3.19) to add or
replace a Relationship Bank, Lock Box or Blocked Account or to replace any
Concentration Account or any Disbursement Account; provided, that (i) Agent
and, with respect to any Canadian Credit Party, Canadian Agent shall have
consented in writing in advance to the opening of such account or Lock Box
with the relevant bank and (ii) prior to the time of the opening of such
account or Lock Box, the applicable Credit Party and such bank shall have
executed and delivered to Agent, with respect to any account of a US Credit
Party, or Canadian Agent, with respect to any account of a Canadian Credit
Party, a tri-party blocked account agreement, in form and substance reasonably
satisfactory to Agent or Canadian Agent, as applicable. Credit Parties shall
close any of their accounts (and establish replacement accounts in accordance
with the foregoing sentence) promptly and in any event within 30 days
following notice from Agent or Canadian Agent that the creditworthiness of any
bank holding an account is no longer acceptable in Agent's or Canadian Agent's
reasonable judgment, or as promptly as practicable and in any event within 60
days following notice from Agent or Canadian Agent that the operating
performance, funds transfer or availability procedures or performance with
respect to accounts or Lock Boxes of the bank holding such accounts or Agent's
or Canadian Agent's liability under any tri-party blocked account agreement
with such bank is no longer acceptable in Agent's or Canadian Agent's
reasonable judgment.
(e) The Lock Boxes, Blocked Accounts, Disbursement Accounts and the
Concentration Accounts shall be cash collateral accounts, with all cash,
checks and other similar items of payment in such accounts securing payment of
(i) with respect to the Lock Boxes,
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Blocked Accounts, Disbursement Accounts and the Concentration Accounts of the
US Credit Parties, the Loans and all other Obligations and (ii) with respect
to the Lock Boxes, Blocked Accounts, Disbursement Accounts and the
Concentration Accounts of the Canadian Credit Parties, the Canadian Loans and
all other Canadian Obligations, and in which each Credit Party shall have
granted a Lien to Agent, on behalf of itself, Canadian Agent and Lenders, with
respect to any such account of the US Credit Parties, pursuant to the US
Security Agreement or to Canadian Agent, on behalf of itself and Canadian
Lenders, with respect to any such account of the Canadian Credit Parties,
pursuant to the Canadian Security Agreement.
(f) All amounts deposited in the Collection Account shall be deemed
received by Agent or Canadian Agent, as applicable, in accordance with Section
1.10 and shall be applied (and allocated) by Agent or Canadian Agent, as
applicable, in accordance with any agreement among the Lenders. In no event
shall any amount be so applied unless and until such amount shall have been
credited in immediately available funds to the Collection Account.
(g) Each Credit Party shall and shall cause its Affiliates,
officers, employees, agents, directors or other Persons acting for or in
concert with such Credit Party (each a "Related Person") to (i) hold in trust
for (x) with respect to all US Credit Parties, Agent, for the benefit of
itself, Canadian Agent and Lenders, and (y) with respect to all Canadian
Credit Parties, Canadian Agent, for the benefit of itself and Canadian
Lenders, all checks, cash and other items of payment received by such Credit
Party or any such Related Person, and (ii) within 1 Business Day after receipt
by such Credit Party or any such Related Person of any checks, cash or other
items of payment, deposit the same into a Blocked Account of such Credit
Party. Each Borrower and each Related Person thereof acknowledges and agrees
that all cash, checks or other items of payment constituting proceeds of
Collateral are part of the Collateral. All proceeds of the sale or other
disposition of any Collateral shall be deposited directly into the applicable
Blocked Accounts unless wire transferred directly to Agent and applied towards
prepayment of Loans pursuant to Section 1.3(c) of the Agreement.
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ANNEX D (SECTION 2.1(A))
TO
CREDIT AGREEMENT
CLOSING CHECKLIST
In addition to, and not in limitation of, the conditions described in Section
2.1 of the Agreement, pursuant to Section 2.1(a), the following items must be
received by Agent in form and substance satisfactory to Agent on or prior to
the Closing Date (each capitalized term used but not otherwise defined herein
shall have the meaning ascribed thereto in Annex A to the Agreement):
[see attached]
D-1
ANNEX E (SECTION 4.1(A))
TO
CREDIT AGREEMENT
FINANCIAL STATEMENTS AND PROJECTIONS -- REPORTING
Borrowers shall deliver or cause to be delivered to Agent and
Canadian Agent or to Agent, Canadian Agent and Lenders, as indicated, the
following:
(a) Monthly Financials. To Agent, Canadian Agent and Lenders, within
30 days after the end of each Fiscal Month, financial information regarding
Holdings and its Subsidiaries, certified by the Chief Financial Officer of
Holdings, consisting of consolidated and, if requested by Agent, separate (i)
unaudited balance sheets as of the close of such Fiscal Month and the related
statements of income and cash flows for that portion of the Fiscal Year ending
as of the close of such Fiscal Month; (ii) unaudited statements of income and
cash flows for such Fiscal Month, setting forth in comparative form the
figures for the corresponding period in the prior year and the figures
contained in the Projections for such Fiscal Year, all prepared in accordance
with GAAP (subject to normal year-end adjustments); and (iii) a summary of the
outstanding balance of all Intercompany Notes as of the last day of that
Fiscal Month. Such financial information shall be accompanied by the
certification of the Chief Financial Officer of Holdings that (i) such
financial information presents fairly in accordance with GAAP (subject to
normal year-end adjustments) the financial position and results of operations
of Holdings and its Subsidiaries, on a consolidated and, if requested by
Agent, separate basis, in each case as at the end of such Fiscal Month and for
that portion of the Fiscal Year then ended and (ii) any other information
presented is true, correct and complete in all material respects and that
there was no Default or Event of Default in existence as of such time or, if a
Default or Event of Default has occurred and is continuing, describing the
nature thereof and all efforts undertaken to cure such Default or Event of
Default. In addition, such financial information shall be accompanied by the
information and reports required by clauses (d) and (e) of Annex F.
(b) Quarterly Financials. To Agent, Canadian Agent and Lenders,
within 45 days after the end of each Fiscal Quarter, consolidated and separate
financial information regarding Holdings and its Subsidiaries, certified by
the Chief Financial Officer of Holdings, including (i) unaudited balance
sheets as of the close of such Fiscal Quarter and the related statements of
income and cash flow for that portion of the Fiscal Year ending as of the
close of such Fiscal Quarter and (ii) unaudited statements of income and cash
flows for such Fiscal Quarter, in each case setting forth in comparative form
the figures for the corresponding period in the prior year and the figures
contained in the Projections for such Fiscal Year, all prepared in accordance
with GAAP (subject to normal year-end adjustments). Such financial information
shall be accompanied by (A) a statement in reasonable detail (each, a
"Compliance Certificate") showing the calculations used in determining
compliance with each of the Financial Covenants that is tested on a quarterly
basis and (B) the certification of the Chief Financial Officer of Holdings
that (i) such financial information presents fairly in accordance with GAAP
(subject to normal year-end adjustments) the financial position, results of
operations and statements of cash flows of Holdings and its Subsidiaries, on
both a consolidated and separate basis, as at the end of such Fiscal Quarter
and for that portion of the Fiscal Year then ended, and (ii) any other
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information presented is true, correct and complete in all material respects
and that there was no Default or Event of Default in existence as of such time
or, if a Default or Event of Default has occurred and is continuing,
describing the nature thereof and all efforts undertaken to cure such Default
or Event of Default.
(c) Operating Plan. To Agent, Canadian Agent and Lenders, as soon as
available, but not later than 30 days after the end of each Fiscal Year, an
annual operating plan for Holdings and its Subsidiaries, on a consolidated
basis, approved by the Board of Directors of Holdings, for the following
Fiscal Year, which (i) includes a statement of all of the material assumptions
on which such plan is based, (ii) includes monthly balance sheets, income
statements and statements of cash flows for the following year and (iii)
integrates sales, gross profits, operating expenses, operating profit, cash
flow projections and US Borrowing Availability and Canadian Borrowing
Availability projections, all prepared on the same basis and in similar detail
as that on which operating results are reported (and in the case of cash flow
projections, representing management's good faith estimates of future
financial performance based on historical performance), and including plans
for personnel, Capital Expenditures and facilities.
(d) Annual Audited Financials. To Agent, Canadian Agent and Lenders,
within 90 days after the end of each Fiscal Year, audited Financial Statements
for Holdings and its Subsidiaries on a consolidated and (unaudited) separate
basis, consisting of balance sheets and statements of income and retained
earnings and cash flows, setting forth in comparative form in each case the
figures for the previous Fiscal Year, which Financial Statements shall be
prepared in accordance with GAAP and certified without qualification, by an
independent certified public accounting firm of national standing or otherwise
acceptable to Agent. Such Financial Statements shall be accompanied by (i) a
statement prepared in reasonable detail showing the calculations used in
determining compliance with each of the Financial Covenants, (ii) a report
from such accounting firm to the effect that, in connection with their audit
examination, nothing has come to their attention to cause them to believe that
a Default or Event of Default has occurred (or specifying those Defaults and
Events of Default that they became aware of), it being understood that such
audit examination extended only to accounting matters and that no special
investigation was made with respect to the existence of Defaults or Events of
Default, (iii) a letter addressed to Agent, on behalf of itself, Canadian
Agent and Lenders, in form and substance reasonably satisfactory to Agent and
subject to standard qualifications required by nationally recognized
accounting firms, signed by such accounting firm acknowledging that Agent,
Canadian Agent and Lenders are entitled to rely upon such accounting firm's
certification of such audited Financial Statements, (iv) the annual letters to
such accountants in connection with their audit examination detailing
contingent liabilities and material litigation matters, and (v) the
certification of the Chief Executive Officer or Chief Financial Officer of
Holdings and its Subsidiaries that all such Financial Statements present
fairly in accordance with GAAP the financial position, results of operations
and statements of cash flows of Holdings and its Subsidiaries on a
consolidated and separate basis, as at the end of such Fiscal Year and for the
period then ended, and that there was no Default or Event of Default in
existence as of such time or, if a Default or Event of Default has occurred
and is continuing, describing the nature thereof and all efforts undertaken to
cure such Default or Event of Default.
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(e) Management Letters. To Agent, Canadian Agent and Lenders, within
a reasonable period of time (in no event in excess of 30 days) after delivery
thereof to any Credit Party or the audit committee of Holdings for review,
copies of all management letters, exception reports or similar letters or
reports received by such audit committee or Credit Party from its independent
certified public accountants.
(f) Default Notices. To Agent, Canadian Agent and Lenders, as soon
as practicable, and in any event within 5 Business Days after an executive
officer of any Borrower has actual knowledge of the existence of any Default
or Event of Default, telephonic or telecopied notice specifying the nature of
such Default or Event of Default or other event, including the anticipated
effect thereof, which notice, if given telephonically, shall be promptly
confirmed in writing on the next Business Day.
(g) SEC Filings and Press Releases. To Agent, Canadian Agent and
Lenders, promptly upon their becoming available, copies of: (i) all Financial
Statements, reports, notices and proxy statements made publicly available by
any Credit Party to its security holders; (ii) all regular and periodic
reports and all registration statements and prospectuses, if any, filed by any
Credit Party with any securities exchange or with the Securities and Exchange
Commission or any governmental or private regulatory authority; and (iii) all
press releases and other statements made available by any Credit Party to the
public concerning material changes or developments in the business of any such
Person.
(h) Subordinated Debt and Equity Notices. To Agent, as soon as
practicable, copies of all material written notices given or received by any
Credit Party with respect to any Subordinated Debt, the Existing Senior Notes
or Stock of such Person, and, within 2 Business Days after any Credit Party
obtains knowledge of any matured or unmatured event of default with respect to
any Subordinated Debt or the Existing Senior Notes, notice of such event of
default.
(i) Supplemental Schedules. To Agent, supplemental disclosures, if
any, required by Section 5.6.
(j) Litigation. To Agent in writing, promptly upon learning thereof,
notice of any Litigation commenced or threatened against any Credit Party that
(i) could reasonably be likely to result in damages in excess of $1,000,000
(net of insurance coverages for such damages), (ii) seeks injunctive relief,
(iii) is asserted or instituted against any Plan, its fiduciaries or its
assets or against any Credit Party or ERISA Affiliate in connection with any
Plan, (iv) alleges criminal misconduct by any Credit Party, (v) alleges the
violation of any law regarding, or seeks remedies in connection with, any
Environmental Liabilities to the extent such Litigation is commenced by a
Governmental Authority or otherwise to the extent such Litigation seeks
damages in excess of $250,000 (with respect to Environmental Liabilities
covered by indemnities provided in connection with the sale of Xxxxxx, Inc.'s
sporting equipment segment, net of such indemnities), or (vi) involves any
product recall.
(k) Insurance Notices. To Agent, disclosure of losses or casualties
required by Section 5.4.
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(l) Lease Default Notices. To Agent, within 2 Business Days after
receipt thereof, copies of (i) any and all default notices received under or
with respect to any leased location or public warehouse where Collateral is
located, and (ii) such other notices or documents as Agent may reasonably
request.
(m) Lease Amendments. To Agent, within 2 Business Days after receipt
thereof, copies of all material amendments to real estate leases with respect
to real property located in Clackamas, Oregon and Kansas City, Missouri.
(n) Alliant Techsystems Indemnification. To Agent, within 2 Business
Days after receipt of any claim, Xxxxxx, Inc. shall provide to Agent a report
of any claims (and any payments made by Xxxxxx, Inc. in connection therewith)
of Alliant Techsystems Inc. pursuant to the purchase documents executed in
connection with the December 2001 sale of the sporting equipment segment of
Xxxxxx, Inc. In addition, Xxxxxx, Inc. shall notify Agent when any funds are
released from the escrow account created in connection with such sale.
(o) Other Documents. To Agent, Canadian Agent and Lenders, such
other financial and other information respecting any Credit Party's business
or financial condition as Agent, Canadian Agent or any Lender shall from time
to time reasonably request.
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ANNEX F (SECTION 4.1(B))
TO
CREDIT AGREEMENT
COLLATERAL REPORTS
Borrowers shall deliver or cause to be delivered the following:
(a) To Agent, upon its request, and in any event no less frequently
than 1:00 p.m.(New York time) on the date (a "Delivery Date") 3 days (or if
such date is not a Business Day, on the next Business Day) following (i) the
15th day of each month or if the 15th day of such month is not a Business Day,
the immediately preceding Business Day (the "First Calculation Date") and (ii)
the last day of each month (the "Second Calculation Date"), commencing on
Monday, May 19, 2003 (together with a copy of all or any part of the following
reports requested by any Lender in writing after the Closing Date), each of
the following reports, each of which shall be prepared by the applicable
Borrowers (A) as of the First Calculation Date for the period from the first
day of such month to and including such First Calculation Date and (B) as of
the Second Calculation Date for the period from and including the day
immediately following the First Calculation Date to and including the Second
Calculation Date: a Borrowing Base Certificate with respect to US Borrowers on
a consolidated and consolidating basis and a Borrowing Base Certificate with
respect to Canadian Borrower on a consolidated and consolidating basis, in
each case accompanied by such supporting detail and documentation as shall be
requested by Agent in its reasonable discretion. In addition, Representative
Borrower shall deliver to each Lender, via electronic mail to the applicable
electronic mail addresses provided to Borrower Representative from time to
time by Lenders , a copy of each Borrowing Base Certificate delivered to Agent
on the date such Borrowing Base Certificate is delivered to Agent;
(b) To Agent, on a monthly basis on or before the date 20 days
following the last day of each Fiscal Month, or more frequently as requested
by Agent, each of the following reports, each of which shall be prepared by
the applicable Borrowers as of the last day of such Fiscal Month:
(i) with respect to (A) US Borrowers on a consolidated and
consolidating basis and (B) Canadian Borrower, a summary of
Inventory by location and type with a supporting perpetual Inventory
report, in each case accompanied by such supporting detail and
documentation as shall be requested by Agent in its reasonable
discretion; and
(ii) with respect to (A) US Borrowers on a consolidated and
consolidating basis and (B) Canadian Borrower, a monthly trial
balance showing Accounts outstanding aged from invoice date as
follows: 1 to 30 days, 31 to 60 days, 61 to 90 days and 91 days or
more, accompanied by such supporting detail and documentation as
shall be requested by Agent in its reasonable discretion.
F-1
(c) To Agent, on the date 3 days (or if such date is not a Business
Day, on the next Business Day) following (i) the First Calculation Date and
(ii) the Second Calculation Date, or at such more frequent intervals as Agent
may request from time to time (together with a copy of all or any part of such
delivery requested by any Lender in writing after the Closing Date),
collateral reports with respect to US Borrowers and Canadian Borrower,
including all additions and reductions (cash and non-cash) with respect to
Accounts of US Borrowers and Canadian Borrower, in each case accompanied by
such supporting detail and documentation as shall be requested by Agent in its
reasonable discretion each of which shall be prepared by US Borrowers or
Canadian Borrower, as applicable, (A) as of the First Calculation Date for the
period from the first day of such month to and including such First
Calculation Date and (B) as of the Second Calculation Date for the period from
and including the day immediately following the First Calculation Date to and
including the Second Calculation Date.
(d) To Agent, at the time of delivery of each of the monthly
Financial Statements delivered pursuant to Annex E:
(i) a reconciliation of the Accounts trial balance of US
Borrowers and Canadian Borrower to such Borrowers' most recent
Borrowing Base Certificate, general ledger and monthly Financial
Statements delivered pursuant to Annex E, in each case accompanied
by such supporting detail and documentation as shall be requested by
Agent in its reasonable discretion;
(ii) a reconciliation of the perpetual inventory by location of
US Borrowers and Canadian Borrower to such Borrowers' most recent
Borrowing Base Certificate, general ledger and monthly Financial
Statements delivered pursuant to Annex E, in each case accompanied
by such supporting detail and documentation as shall be requested by
Agent in its reasonable discretion;
(iii) an aging of accounts payable and a reconciliation of that
accounts payable aging to US Borrowers' and Canadian Borrower's
general ledger and monthly Financial Statements delivered pursuant
to Annex E, in each case accompanied by such supporting detail and
documentation as shall be requested by Agent in its reasonable
discretion; and
(iv) a reconciliation of the outstanding Loans as set forth in
the monthly Loan Account statement provided by Agent to US
Borrowers' and Canadian Borrower's general ledger and monthly
Financial Statements delivered pursuant to Annex E, in each case
accompanied by such supporting detail and documentation as shall be
requested by Agent in its reasonable discretion.
(e) To Agent, at the time of delivery of each of the quarterly
Financial Statements delivered pursuant to Annex E, (i) a listing of
government contracts of each Borrower subject to the Federal Assignment of
Claims Act of 1940 or the Financial Administration Act (Canada); and (ii) a
list of any applications for the registration of any Intellectual Property
filed by any Credit Party with the United States Patent and Trademark Office,
the United States Copyright Office, the Canadian Industrial Design Office, the
Canadian Patent Office, the
F-2
Canadian Intellectual Property Office, the Canadian Copyright Office or any
similar office or agency in the prior Fiscal Quarter;
(f) Each Borrower, at its own expense, shall deliver to
Agent the results of each physical verification, if any, that such Borrower or
any of its Subsidiaries may in their discretion have made, or caused any other
Person to have made on their behalf, of all or any portion of their Inventory
(and, if a Default or an Event of Default has occurred and is continuing, each
Borrower shall, upon the request of Agent, conduct, and deliver the results
of, such physical verifications as Agent may require);
(g) Each Borrower, at its own expense, shall deliver to Agent such
appraisals of its assets on an annual basis or more frequently as Agent may
request at any time after the occurrence and during the continuance of a
Default or an Event of Default or less frequently in Agent's discretion so
long as no Default or Event of Default has occurred and is continuing, such
appraisals to be conducted by an appraiser, and in form and substance
reasonably satisfactory to Agent; and
(h) Such other reports, statements and reconciliations with respect
to the US Borrowing Base, the Canadian Borrowing Base, Collateral or
Obligations of any or all Credit Parties as Agent shall from time to time
request in its reasonable discretion.
F-3
ANNEX G (SECTION 6.10)
TO
CREDIT AGREEMENT
FINANCIAL COVENANTS
Borrowers shall not breach or fail to comply with any of the
following financial covenants, each of which shall be calculated in accordance
with GAAP consistently applied:
(a) Maximum Capital Expenditures. Holdings and its Subsidiaries on a
consolidated basis shall not make Capital Expenditures during any Fiscal Year
that exceed in the aggregate $20,000,000; provided, however, that the amount
of permitted Capital Expenditures referenced above will be increased in any
period by the positive amount equal to the lesser of (i) 50% of the amount of
permitted Capital Expenditures for the immediately prior period, and (ii) the
amount (if any), equal to the difference obtained by taking the Capital
Expenditures limit specified above for the immediately prior period minus the
actual amount of any Capital Expenditures expended during such prior period
(the "Carry Over Amount"), and for purposes of measuring compliance herewith,
the Carry Over Amount shall be deemed to be the last amount spent on Capital
Expenditures in that succeeding year.
(b) Minimum Fixed Charge Coverage Ratio. (i) so long as Excess
Availability is equal to or greater than $10,000,000 at all times, Holdings
and its Subsidiaries shall have on a consolidated basis at the end of each
Fiscal Quarter a Fixed Charge Coverage Ratio for the 4 Fiscal Quarter period
then ended of not less than 0.85 to 1.00 or (ii) otherwise if Excess
Availability falls below $10,000,000 at any time, Holdings and its
Subsidiaries shall have on a consolidated basis at the end of each Fiscal
Quarter set forth below (commencing with the immediately preceding Fiscal
Quarter end for which financial statements have been delivered to Lenders or
were required to be delivered to Lenders) a Fixed Charge Coverage Ratio for
the 4 Fiscal Quarter period then ended of not less than the following:
0.85 to 1.00 for the Fiscal Quarters ending June 30, 2003 through
March 31, 2004
0.87 to 1.00 for the Fiscal Quarters ending June 30, 2004 through
December 31, 2004
0.88 to 1.00 for the Fiscal Quarters ending March 31, 2005 through
December 31, 2005
0.90 to 1.00 for the Fiscal Quarters ending March 31, 2006 through
December 31, 2006
0.95 to 1.00 for the Fiscal Quarters ending March 31, 2007 and thereafter
Notwithstanding clauses (i) and (ii) above, if at any time Excess Availability
falls below $10,000,000, so long as Excess Availability has been restored to
at least $10,000,000 for a period
G-1
of at least 60 days and remains so restored as of the date of calculation, the
covenant levels in clause (i) above shall apply.
(c) Minimum EBITDA. Holdings and its Subsidiaries on a consolidated
basis shall have, at the end of each Fiscal Quarter set forth below, EBITDA
for the 4 Fiscal Quarter period then ended of not less than the following:
Period Ending EDITDA
June 30, 2003 through $75,000,000
September 30, 2005
December 31, 2005 through $80,000,000
September 30, 2006
December 31, 2006 and $85,000,000
thereafter
Unless otherwise specifically provided herein, any accounting term
used in the Agreement shall have the meaning customarily given such term in
accordance with GAAP, and all financial computations hereunder shall be
computed in accordance with GAAP consistently applied. That certain items or
computations are explicitly modified by the phrase "in accordance with GAAP"
shall in no way be construed to limit the foregoing. If any "Accounting
Changes" (as defined below) occur and such changes result in a change in the
calculation of the financial covenants, standards or terms used in the
Agreement or any other Loan Document, then Borrowers, Agent and Lenders agree
to enter into negotiations in order to amend such provisions of the Agreement
so as to equitably reflect such Accounting Changes with the desired result
that the criteria for evaluating Holdings' and its Subsidiaries' financial
condition shall be the same after such Accounting Changes as if such
Accounting Changes had not been made; provided, however, that the agreement of
Requisite Lenders to any required amendments of such provisions shall be
sufficient to bind all Lenders. Any amendments to the Financial Covenants or
the definitions used therein pursuant to the foregoing (including the proviso)
or otherwise shall not be deemed to result in a reduction in the rate of
interest for purposes of Section 11.2(c)(ii) of the Credit Agreement.
"Accounting Changes" means (i) changes in accounting principles required by
the promulgation of any rule, regulation, pronouncement or opinion by the
Financial Accounting Standards Board of the American Institute of Certified
Public Accountants (or successor thereto or any agency with similar
functions), (ii) changes in accounting principles concurred in by any Credit
Party's certified public accountants; (iii) purchase accounting adjustments
under A.P.B. 16 or 17 and EITF 88-16, and the application of the accounting
principles set forth in FASB 109, including the establishment of reserves
pursuant thereto and any subsequent reversal (in whole or in part) of such
reserves; and (iv) the reversal of any reserves established as a result of
purchase accounting adjustments. If Agent, Borrowers and Requisite Lenders
agree upon the required amendments, then after appropriate amendments have
been executed and the underlying Accounting Change with respect thereto has
been implemented, any reference to GAAP contained in the Agreement or in any
other Loan Document shall, only to the extent of such Accounting Change, refer
to GAAP, consistently
G-2
applied after giving effect to the implementation of such Accounting Change.
If Agent, Borrowers and Requisite Lenders cannot agree upon the required
amendments within 30 days following the date of implementation of any
Accounting Change, then all Financial Statements delivered and all
calculations of financial covenants and other standards and terms in
accordance with the Agreement and the other Loan Documents shall be prepared,
delivered and made without regard to the underlying Accounting Change. For
purposes of Section 8.1, a breach of a Financial Covenant contained in this
Annex G (other than clause (a) of this Annex G) shall be deemed to have
occurred as of any date of reasonable determination by Agent or as of the last
day of any specified measurement period, regardless of when the Financial
Statements reflecting such breach are delivered to Agent.
G-3
ANNEX H (SECTION 9.9(A))
TO
CREDIT AGREEMENT
WIRE TRANSFER INFORMATION
GENERAL ELECTRIC CAPITAL CORPORATION:
Name: General Electric Capital Corporation
Bank: DeutscheBank Trust Company Americas
New York, New York
ABA #: 000000000
Account #: 00000000
Account Name: GECC/CAF Depository
Reference: Xxxxxx, Inc. - CFN 5132
GENERAL ELECTRIC CAPITAL CANADA INC.
With respect to amounts denominated in Canadian Dollars:
Name: General Electric Capital Canada Inc.
Bank: Royal Bank of Canada
000 Xxx Xxxxxx, Xxxxx Xxxxx
Xxxxxxx, Xxxxxxx X0X 0X0
Bank #: 003
Transit #: 00002
Account #: 0000000
Account Name: GECCI-COMMERCIAL FINANCE
Reference: Xxxxxx, Inc. - CFN 5133
With respect to amounts denominated in US Dollars:
Name: General Electric Capital Canada Inc.
Bank: Royal Bank of Canada
000 Xxx Xxxxxx, Xxxxx Xxxxx
Xxxxxxx, Xxxxxxx X0X 0X0
Bank #: 003
Transit #: 00002
Account #: 0000000
Account Name: GECCI-COMMERCIAL FINANCE
Reference: Xxxxxx, Inc. - CFN 5133
H-1
THE CIT GROUP/BUSINESS CREDIT, INC.:
Name: The CIT Group/Business Credit, Inc.
Bank: XX Xxxxxx Chase Bank NY
ABA #: 000000000
Account #: 144026613
Account Name: The CIT Group/Business Credit
Reference:
FLEET CAPITAL CORPORATION:
Name: Fleet Capital Corporation
Bank: Fleet National Bank
Xxx Xxxxxxxxxxxx Xxxxx
Xxxxxxxx Xxxxxxxxxxx
ABA #: 000000000
Account #: 0000000000
Account Name: Fleet Capital Corporation
Reference: Xxxxxx
FOOTHILL CAPITAL CORPORATION:
Name: Foothill Capital Corporation
Bank: XX Xxxxxx Chase
New York, New York
ABA #: 000000000
Account #: 323-266193
Account Name: Foothill Capital Corporation
Reference: Xxxxxx, Inc.
SYNDICATED LOAN FUNDING TRUST:
Name: Syndicated Loan Funding Trust
Bank: Bankers NYC
ABA #: 000000000
Account #: 00000000
Account Name: Xxxxxx CLO Collateral
Reference: Xxxxxx
H-2
TRANSAMERICA BUSINESS CAPITAL CORPORATION:
Name: Transamerica Business Capital Corporation
Bank: Bank One, N.A.
Chicago, Illinois
ABA #: 000000000
Account #: 0000000
Account Name: Xxxxxx
Reference: 018-Branch 3218/3217
H-3
ATL/946289.7
ANNEX I (SECTION 11.10)
TO
CREDIT AGREEMENT
NOTICE ADDRESSES
(A) If to Agent or GE Capital or Canadian Agent or GE Capital Canada, at
General Electric Capital Corporation
(or, as applicable, c/o General Electrical Capital Corporation)
0000 Xxxxxxxxx Xxxx, Xxxxx 000
Xxxxxxx, Xxxxxxx 00000
Attention: Xxxxxx, Inc. Account Manager
Telecopier No.: (000) 000-0000
Telephone No.: (000) 000-0000
and
General Electric Capital Corporation
000 Xxxx Xxxxx Xxxx
Xxxxxxxx, Xxxxxxxxxxx 00000-0000
Attention: Corporate Counsel - Commercial Finance
Telecopier No.: (000) 000-0000
Telephone No.: (000) 000-0000
and
Paul, Hastings, Xxxxxxxx & Xxxxxx LLP
000 Xxxxxxxxx Xxxxxx, X.X.
Xxxxx 0000
Xxxxxxx, Xxxxxxx 00000
Attention: Xxxxx X. Xxxxxx, III, Esq.
Telecopier No.: (000) 000-0000
Telephone No.: (000) 000-0000
(B) If to any Borrower, to Borrower Representative, at
Xxxxxx, Inc.
0000 X.X. Xxxxxxxxxxxxx Xxx
Xxxxxxxx, Xxxxxx 00000
Attention: Xxxxxx X. Xxxxxxx and Xxxxxxx X. Xxxxxx, III
Telecopier No.: (000) 000-0000
Telephone No.: (000) 000-0000
with copies to:
Cravath, Swaine & Xxxxx
Worldwide Plaza
000 Xxxxxx Xxxxxx
Xxx Xxxx, Xxx Xxxx 00000
Attention: Xxxxxx Cami, Esq.
Telecopier No.: (000) 000-0000
Telephone No.: (000) 000-0000
(C) If to The CIT Group/Business Credit, Inc., at
0000 Xxxxxxx Xxxxxxx, Xxxxx 000
Xxxxxxx, Xxxxxxx 00000
Attention: Xxxxxx Xxxxxxxx
Telecopier No.: (000) 000-0000
Telephone No.: (000) 000-0000
If to Fleet Capital Corporation, at
000 Xxxxxxxx Xxxxxxx XX, Xxxxx 000
Xxxxxxx, Xxxxxxx 00000
Attention: Loan Administration Manager
Telecopier No.: (000) 000-0000
Telephone No.: (000) 000-0000
If to Foothill Capital Corporation, at
0000 Xxxxxxxx Xxxxxx, Xxxxx 0000X
Xxxxx Xxxxxx, Xxxxxxxxxx 00000
Attention: Xxx Xxxxxxx
Telecopier No.: (000) 000-0000
Telephone No.: (000) 000-0000
If to Syndicated Loan Funding Trust, at
Syndicated Loan Funding Trust
C/O Lehman Commercial Paper Inc
000 0xx Xxxxxx, 00xx Xxxxx
Xxx Xxxx, XX 00000
Attn: G. Xxxxxx Xxxxx
Telecopier No.: (000) 000-0000
Telephone No.: (000) 000-0000
If to Transamerica Business Capital Corporation, at
000 Xxxxxxxx Xxxxx Xxxxxx, Xxxxx X000
Xxx, Xxx Xxxx 00000
Attention: Xxxx Xxxxx
Telecopier No.: (000) 000-0000
Telephone No.: (000) 000-0000
ANNEX J (FROM ANNEX A - COMMITMENTS DEFINITION)
TO
CREDIT AGREEMENT
Canadian Canadian US Revolving
Revolving Loan Term Loan Loan Term Loan A Term Loan B Total
Lender: Commitment: Commitment: Commitment: Commitment: Commitment: Commitments:
------- -------------- ----------- ------------ ----------- ----------- ------------
General Electric $-0- $-0- $3,999,999 $2,000,001 $70,000,000 $76,000,000
Capital Corporation
(including Swing
Line Commitment
$7,500,000)
General Electric $3,000,000 $6,000,000 $-0- $-0- $-0- $9,000,000
Capital Canada Inc.
The CIT Group/Business $-0- $-0- $16,666,667 $8,333,333 $-0- $25,000,000
Credit, Inc.
Fleet Capital $-0- $-0- $16,666,667 $8,333,333 $-0- $25,000,000
Corporation
Foothill Capital $-0- $-0- $16,666,667 $8,333,333 $-0- $25,000,000
Corporation
Syndicated Loan Funding $-0- $-0- $-0- $-0- $15,000,000 $15,000,000
Trust
Transamerica Business $-0- $-0- $10,000,000 $5,000,000 $-0- $15,000,000
Capital Corporation
Total: $3,000,000 $6,000,000 $64,000,000 $32,000,000 $85,000,000 $190,000,000
