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EXHIBIT 10.21
[EXECUTION FORM]
U.S. $75,000,000
CREDIT AGREEMENT,
dated as of
March 14, 1997
among
PROSOURCE SERVICES CORPORATION
as the Borrower,
VARIOUS FINANCIAL INSTITUTIONS,
as the Lenders,
and
THE BANK OF NOVA SCOTIA,
as the Administrative Agent
for the Lenders
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TABLE OF CONTENTS
Section Page
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ARTICLE I
DEFINITIONS AND ACCOUNTING TERMS
1.1. Defined Terms...........................................................2
1.2. Use of Defined Terms...................................................34
1.3. Cross-References.......................................................34
1.4. Accounting and Financial Determinations................................34
ARTICLE II
COMMITMENTS, BORROWING AND ISSUANCE
PROCEDURES, NOTES AND LETTERS OF CREDIT
2.1. Commitments............................................................35
2.1.1. Commitment of Each Lender............................................35
2.1.2. Letter of Credit Commitment..........................................35
2.1.3. Lenders Not Permitted or Required
to Make Loans..................................................35
2.1.4. Issuer Not Permitted or Required to Issue
Letters of Credit..............................................36
2.2. Reduction of the Commitment Amount.....................................36
2.3. Borrowing Procedures...................................................36
2.4. Continuation and Conversion Elections..................................37
2.5. Funding................................................................37
2.6. Issuance Procedures....................................................37
2.6.1. Other Lenders' Participation.........................................38
2.6.2. Disbursements........................................................38
2.6.3. Reimbursement........................................................39
2.6.4. Deemed Disbursements.................................................39
2.6.5. Nature of Reimbursement Obligations..................................40
2.7. Notes..................................................................41
2.8. Extension of Commitment Termination Date
and Maturity of Loans..............................................41
2.8.1. Request for Extension of Commitment
Termination Date and Maturity of Loans.........................41
2.8.2. Consent to Extension of Commitment
Termination Date and Maturity of Loans.........................41
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ARTICLE III
REPAYMENTS, PREPAYMENTS, INTEREST AND FEES
3.1. Repayments and Prepayments.............................................42
3.2. Interest Provisions....................................................43
3.2.1. Rates................................................................43
3.2.2. Post-Maturity Rates..................................................44
3.2.3. Payment Dates........................................................44
3.3. Fees...................................................................45
3.3.1. Commitment Fee.......................................................45
3.3.2. Administrative Agent Fee.............................................45
3.3.3. Letter of Credit Fee.................................................45
ARTICLE IV
CERTAIN LIBO RATE AND OTHER PROVISIONS
4.1. LIBO Rate Lending Unlawful.............................................45
4.2. Deposits Unavailable...................................................46
4.3. Increased LIBO Rate Loan Costs, etc....................................46
4.4. Funding Losses.........................................................46
4.5. Increased Capital Costs................................................47
4.6. Taxes..................................................................48
4.7. Payments, Computations, etc............................................51
4.8. Sharing of Payments....................................................51
4.9. Setoff.................................................................52
4.10. Mitigation............................................................53
4.11. Replacement Lender....................................................53
ARTICLE V
CONDITIONS TO CREDIT EXTENSIONS
5.1. Initial Credit Extension...............................................54
5.1.1. Resolutions, etc.....................................................54
5.1.2. Delivery of Notes....................................................54
5.1.3. Payment of Outstanding Indebtedness, etc.............................54
5.1.4. Pledge Agreements....................................................55
5.1.5. Security Agreements..................................................56
5.1.6. Trademark Security Agreement.........................................57
5.1.7. Guarantees...........................................................57
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Section Page
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5.1.8. Mortgage.............................................................57
5.1.9. Financial Information, etc...........................................58
5.1.10. Closing Date Certificate............................................58
5.1.11. Compliance Certificate..............................................58
5.1.12. Receivables Transaction Documentation...............................58
5.1.13. Material Adverse Change.............................................59
5.1.14. Insurance...........................................................59
5.1.15. Opinions of Counsel.................................................59
5.1.16. Closing Fees, Expenses, etc.........................................59
5.1.17. Borrowing Base Certificate..........................................59
5.2. All Credit Extensions..................................................59
5.2.1. Compliance with Warranties,
No Default, etc................................................60
5.2.2. Credit Extension Request, etc........................................60
5.2.3. Satisfactory Legal Form..............................................60
ARTICLE VI
REPRESENTATIONS AND WARRANTIES
6.1. Organization, etc......................................................61
6.2. Due Authorization, Non-Contravention, etc..............................61
6.3. Government Approval, Regulation, etc...................................62
6.4. Validity, etc..........................................................62
6.5. Financial Information..................................................62
6.6. No Material Adverse Effect.............................................63
6.7. Litigation, Labor Controversies, etc...................................63
6.8. Compliance with Laws...................................................63
6.9. Subsidiaries...........................................................63
6.10. Ownership of Properties...............................................63
6.11. Taxes.................................................................64
6.12. Pension and Welfare Plans.............................................64
6.13. Environmental Warranties..............................................64
6.14. Regulations G, U and X................................................65
6.15. Accuracy of Information...............................................66
ARTICLE VII
COVENANTS
7.1. Affirmative Covenants..................................................66
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Section Page
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7.1.1. Financial Information, Reports,
Notices, etc...................................................66
7.1.2. Compliance with Laws, etc............................................68
7.1.3. Maintenance of Properties............................................69
7.1.4. Insurance............................................................69
7.1.5. Books and Records....................................................70
7.1.6. Environmental Covenant...............................................70
7.1.7. Future Subsidiaries..................................................71
7.1.8. Additional Collateral................................................71
7.1.9. Use of Proceeds......................................................72
7.2. Negative Covenants.....................................................72
7.2.1. Business Activities..................................................72
7.2.2. Indebtedness.........................................................72
7.2.3. Liens................................................................74
7.2.4. Financial Condition..................................................76
7.2.5. Investments..........................................................79
7.2.6. Restricted Payments, etc.............................................80
7.2.7. Subsidiaries.........................................................83
7.2.8. Certain Contracts....................................................83
7.2.9. Consolidation, Merger, etc...........................................83
7.2.10. Asset Dispositions, etc.............................................84
7.2.11. Modification of Certain Agreements..................................85
7.2.12. Transactions with Affiliates........................................85
7.2.13. Negative Pledges, Restrictive
Agreements, etc................................................85
7.2.14. Sale and Leaseback..................................................86
7.2.15. Limitations on Investments, etc.
in Designated Subsidiaries ....................................87
8.1. Listing of Events of Default...........................................87
8.1.1. Non-Payment of Obligations...........................................87
8.1.2. Breach of Warranty...................................................87
8.1.3. Non-Performance of Certain Covenants and
Obligations......................................................87
8.1.4. Non-Performance of Other Covenants and
Obligations....................................................88
8.1.5. Defaulted Debt.......................................................88
8.1.6. Judgments............................................................88
8.1.7. Pension Plans........................................................88
8.1.8. Control of the Borrower..............................................89
8.1.9. Bankruptcy, Insolvency, etc..........................................89
8.1.10. Impairment of Security, etc.........................................90
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Section Page
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8.2. Action if Bankruptcy...................................................90
8.3. Action if Other Event of Default.......................................90
ARTICLE IX
THE ADMINISTRATIVE AGENT
9.1. Actions................................................................91
9.2. Funding Reliance, etc..................................................91
9.3. Exculpation............................................................92
9.4. Successor..............................................................92
9.5. Loans by Scotiabank....................................................93
9.6. Credit Decisions.......................................................93
9.7. Copies, etc............................................................94
ARTICLE X
MISCELLANEOUS PROVISIONS
10.1. Waivers, Amendments, etc..............................................94
10.2. Notices...............................................................95
10.3. Payment of Costs and Expenses.........................................95
10.4. Indemnification.......................................................96
10.5. Survival..............................................................98
10.6. Severability..........................................................98
10.7. Headings..............................................................98
10.8. Execution in Counterparts, Effectiveness,
etc..............................................................98
10.9. Governing Law; Entire Agreement.......................................99
10.10. Successors and Assigns...............................................99
10.11. Sale and Transfer of Loans and Notes;
Participations in Loans and Notes.....................................99
10.11.1. Assignments........................................................99
10.11.2. Participations....................................................101
10.12. Other Transactions..................................................102
10.13. Execution on Behalf of Corporation..................................102
10.14. Forum Selection and Consent to
Jurisdiction..................................................103
10.15. Waiver of Jury Trial................................................103
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SCHEDULE I - Disclosure Schedule
SCHEDULE II - SLB Properties
EXHIBIT A - Form of Note
EXHIBIT B-1 - Form of Borrowing Base Certificate
EXHIBIT B-2 - Form of Borrowing Request
EXHIBIT C - Form of Issuance Request
EXHIBIT D - Form of Continuation/Conversion Notice
EXHIBIT E - Form of Lender Assignment Agreement
EXHIBIT F-1 - Form of Parent Pledge Agreement
EXHIBIT F-2 - Form of Borrower Pledge Agreement
EXHIBIT F-3 - Form of Subsidiary Pledge Agreement
EXHIBIT G-1 - Form of Parent Security Agreement
EXHIBIT G-2 - Form of Borrower Security Agreement
EXHIBIT G-3 - Form of Subsidiary Security Agreement
EXHIBIT H-1 - Form of Parent Guaranty
EXHIBIT H-2 - Form of Subsidiary Guaranty
EXHIBIT I - Form of Closing Date Certificate
EXHIBIT J - Form of Compliance Certificate
EXHIBIT K - Form of Extension Request
EXHIBIT L - Form of Exemption Certificate
EXHIBIT M-1 - Form of Borrower Mortgage
EXHIBIT M-2 - Form of Subsidiary Mortgage
EXHIBIT N-1 - Form of Opinion of New York Counsel to
Obligors
EXHIBIT N-2 - Form of Opinion of Local Counsel to Obligors
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CREDIT AGREEMENT
THIS CREDIT AGREEMENT, dated as of March 14, 1997, is among PROSOURCE
SERVICES CORPORATION, a Delaware corporation (the "Borrower"), the various
financial institutions as are or may become parties hereto (collectively, the
"Lenders"), and THE BANK OF NOVA SCOTIA ("Scotiabank"), as administrative agent
for the Lenders (in such capacity, the "Administrative Agent").
W I T N E S S E T H:
WHEREAS, the Borrower and its various Subsidiaries (such capitalized
term, and other terms used herein, to have the meanings provided in Section 1.1)
are engaged in the business of distributing, purchasing, warehousing,
transporting and selling food, paper, dairy, produce, uniforms, soft drink
syrups and other products used in casual dining and quick-service restaurants
and providing related logistics services;
WHEREAS, subject to the terms of this Agreement (including Article V),
the Borrower desires to obtain from the Lenders
(a) Commitments (to include availability for Letters of Credit)
pursuant to which Borrowings in a maximum aggregate principal amount
(together with all Letter of Credit Outstandings) not to exceed
$75,000,000 will be made to the Borrower from time to time prior to the
Commitment Termination Date; and
(b) a Letter of Credit sub-limit under the Lender's Commitments
pursuant to which each Issuer will issue Letters of Credit for the
account of the Borrower from time to time prior to the Commitment
Termination Date in a maximum aggregate Stated Amount at any one time
outstanding not to exceed $25,000,000 (provided that the aggregate
outstanding principal amount of Loans and Letter of Credit Outstandings
at any time shall not exceed the then existing Commitment Amount);
with all the proceeds of the Credit Extensions to be used for the
purposes specified in Section 7.1.10; and
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WHEREAS, simultaneously with the occurrence of the Effective Date,
Receivables Co. shall enter into the Receivables Transaction Documents and
receive net proceeds of the sale of receivables thereunder in a maximum
aggregate amount of $150,000,000, such proceeds to be used for purposes
permitted under the Receivables Transaction Documents;
WHEREAS, the Lenders are willing, on the terms and subject to the
conditions hereinafter set forth (including Article V), to extend such
Commitments and make such Loans to the Borrower and issue (or participate in)
Letters of Credit for the account of the Borrower;
NOW, THEREFORE, the parties hereto agree as follows:
ARTICLE I
DEFINITIONS AND ACCOUNTING TERMS
SECTION 1.1. Defined Terms. The following terms (whether or not
underscored) when used in this Agreement, including its preamble and recitals,
shall, except where the context otherwise requires, have the following meanings
(such meanings to be equally applicable to the singular and plural forms
thereof):
"Account" means any account (as that term is defined in Section 9-106 of
the U.C.C.) of the Borrower or any of its wholly-owned U.S. Subsidiaries arising
from the sale or lease of goods or rendering of services.
"Adjusted Commitment Amount" means the difference of (a) the sum of (i)
the aggregate outstanding principal amount of all Loans plus (ii) the aggregate
amount of all Letter of Credit Outstandings minus (b) the excess of (x) the sum
of (i) the aggregate outstanding principal amount of all loans outstanding in
connection with the Canadian Indebtedness plus (ii) the aggregate outstanding
stated amount of all letters of credit in connection with the Canadian
Indebtedness plus (iii) the amount of Indebtedness of ProSource Canada incurred
pursuant to clause (d) of Section 7.2.2 over (y) the Letter of Credit
Outstandings incurred to provide credit support to such Indebtedness of
ProSource Canada.
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"Administrative Agent" is defined in the preamble and includes each
other Person as shall have subsequently been appointed as the successor
Administrative Agent pursuant to Section 9.4.
"Affiliate" of any Person means any other Person which, directly or
indirectly, controls, is controlled by or is under common control with such
Person (excluding any trustee under, or any committee with responsibility for
administering, any Plan). A Person shall be deemed to be "controlled by" another
Person if such other Person possesses, directly or indirectly, power
(a) to vote 10% or more of the securities (on a fully diluted
basis) having ordinary voting power for the election of directors or
managing general partners; or
(b) to direct or cause the direction of the management and
policies of such Person whether by contract or otherwise.
"Agreement" means, on any date, this Credit Agreement as originally in
effect on the Effective Date and as thereafter from time to time amended,
supplemented, amended and restated, or otherwise modified and in effect on such
date.
"Alternate Base Rate" means, on any date, a fluctuating rate
of interest per annum equal to the higher of
(a) the rate of interest most recently announced by the
Administrative Agent at its Domestic Office as its "prime" or
"reference" rate for United States loans made in the United States; and
(b) the Federal Funds Rate most recently determined by the
Administrative Agent plus 0.50%.
The Alternate Base Rate is not necessarily the lowest rate of interest
determined by the Administrative Agent in connection with extensions of credit.
Changes in the rate of interest on that portion of any Loans maintained as Base
Rate Loans will take effect simultaneously with each change in the Alternate
Base Rate. The Administrative Agent will give notice promptly to the Borrower
and the Lenders of changes in the Alternate Base Rate.
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"Applicable Commitment Fee Margin" means at all times during the
applicable periods set forth below with respect to the fee payable to the
Lenders pursuant to Section 3.3.1, the applicable percentage set forth below
under the column entitled "Applicable Commitment Fee Margin":
Total Debt Applicable
to EBITDA Commitment
Ratio Fee Margin
------------------------------------ ---------------------
Less than 2.50:1.00 0.200%
Greater than or equal to
2.50:1.00 and less than
3.00:1.00 0.250%
Greater than or equal to
3.00:1.00 and less than
3.50:1.00 0.300%
Greater than or equal to
3.50:1.00 and less than
4.00:1.00 0.350%
Greater than or equal to
4.00:1.00 and less than
4.25:1.00 0.375%
Greater than or equal to 0.400%
4.25:1.00
Notwithstanding anything to the contrary set forth in this Agreement
(including the then effective Total Debt to EBITDA Ratio), the maximum
Applicable Commitment Fee Margin for the period from the Effective Date through
(and including) the one-year anniversary of the Effective Date shall be 0.300%.
The Applicable Commitment Fee Margin shall be subject to reduction (but not
increase) in the event that the Total Debt to EBITDA Ratio set forth in any
Compliance Certificate delivered by the Borrower to the Administrative Agent
during such period would result in a reduction (but not an increase) in the
Applicable Commitment Fee Margin, in which case the Applicable Commitment Fee
Margin shall be calculated by reference to the Total Debt to EBITDA Ratio set
forth in such Compliance Certificate. Except as
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otherwise set forth in the preceding two sentences, the Total Debt to EBITDA
Ratio used to compute the Applicable Commitment Fee Margin following the
Effective Date shall be the Total Debt to EBITDA Ratio set forth in the
Compliance Certificate most recently delivered by the Borrower to the
Administrative Agent; changes in the Applicable Commitment Fee Margin resulting
from a change in the Total Debt to EBITDA Ratio shall become effective upon
delivery by the Borrower to the Administrative Agent of a new Compliance
Certificate pursuant to clause (c) of Section 7.1.1. If the Borrower shall fail
to deliver a Compliance Certificate within 45 days after the end of any Fiscal
Quarter (or within 90 days, in the case of the last Fiscal Quarter of the Fiscal
Year) as required pursuant to clause (c) of Section 7.1.1, the Applicable
Commitment Fee Margin from and including the 46th (or 91st, as the case may be)
day after the end of such Fiscal Quarter to but not including the date the
Borrower delivers to the Administrative Agent a Compliance Certificate shall
conclusively equal the highest Applicable Commitment Fee Margin set forth above.
"Applicable Margin" means at all times during the applicable
periods set forth below
(a) with respect to the unpaid principal amount of each Loan
maintained as a Base Rate Loan, the applicable percentage set forth
under the column entitled "Applicable Margin for Base Rate Loans"; and
(b) with respect to the unpaid principal amount of each Loan
maintained as a LIBO Rate Loan, the applicable percentage set forth
below under the column entitled "Applicable Margin for LIBO Rate Loans":
Total Debt Applicable Applicable
to EBITDA Margin for Margin for LIBO
Ratio Base Rate Loans Rate Loans
--------------------------- ----------------------- -------------------
Less than 2.50:1.00 0.000% 0.750%
Greater than or equal to
2.50:1.00 and less than
3.00:1.00 0.000% 0.875%
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Greater than or equal to
3.00:1.00 and less than
3.50:1.00 0.125% 1.125%
Greater than or equal to
3.50:1.00 and less than
4.00:1.00 0.500% 1.500%
Greater than or equal to
4.00:1.00 and less than
4.25:1.00 0.750% 1.750%
Greater than or equal to 1.000% 2.000%
4.25:1.00
Notwithstanding anything to the contrary set forth in this Agreement
(including the then effective Total Debt to EBITDA Ratio), the maximum
Applicable Margin for the period from the Effective Date through (and including)
the one-year anniversary of the Effective Date shall be 0.125% for Base Rate
Loans and 1.125% for LIBO Rate Loans. The Applicable Margin shall be subject to
reduction (but not increase) in the event that the Total Debt to EBITDA Ratio
set forth in any Compliance Certificate delivered by the Borrower to the
Administrative Agent during such period would result in a reduction (but not an
increase) in the Applicable Margin, in which case the Applicable Margin shall be
calculated by reference to the Total Debt to EBITDA Ratio set forth in such
Compliance Certificate. Except as otherwise set forth in the preceding two
sentences, the Total Debt to EBITDA Ratio used to compute the Applicable Margin
following the Effective Date shall be the Total Debt to EBITDA Ratio set forth
in the Compliance Certificate most recently delivered by the Borrower to the
Administrative Agent; changes in the Applicable Margin resulting from a change
in the Total Debt to EBITDA Ratio shall become effective upon delivery by the
Borrower to the Administrative Agent of a new Compliance Certificate pursuant to
clause (c) of Section 7.1.1. If the Borrower shall fail to deliver a Compliance
Certificate within 45 days after the end of any Fiscal Quarter (or within 90
days, in the case of the last Fiscal Quarter of the Fiscal Year) as required
pursuant to clause (c) of Section 7.1.1, the Applicable Margin from and
including the 46th (or 91st, as the case may be) day after the end of such
Fiscal Quarter to but not including the date the Borrower delivers to the
Administrative Agent a Compliance Certificate shall conclusively equal the
highest
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Applicable Margin set forth above.
"Asset Impairment Charges" means income statement charges in an
aggregate amount not greater than $15,750,000 (before taking into account any
associated tax benefit, which tax benefit will be determined based on the
Borrower's effective tax rate for the period in which such charges are recorded,
all in accordance with GAAP), recorded by the Borrower in Fiscal Year 1996,
determined in accordance with Statement of Financial Accounting Standards No.
121 and resulting in reduction of the book value of certain fixed assets of the
Borrower.
"Assignee Lender" is defined in Section 10.11.1.
"Authorized Officer" means, relative to the Borrower and any other
Obligor, those of its employees, officers or managing members (in the case of a
limited liability company) whose signatures and incumbency shall have been
certified to the Administrative Agent and the Lenders pursuant to Section 5.1.1.
"Base Rate Loan" means a Loan bearing interest at a fluctuating rate
determined by reference to the Alternate Base Rate.
"Borrower" is defined in the preamble.
"Borrower Mortgage" means each Mortgage executed and delivered by the
Borrower pursuant to Section 5.1.8 or 7.1.8, as the case may be, substantially
in the form of Exhibit M-1 hereto, as amended, supplemented, amended and
restated or otherwise modified from time to time.
"Borrower Pledge Agreement" means the Pledge Agreement executed and
delivered by the Borrower pursuant to Section 5.1.4, substantially in the form
of Exhibit F-2 hereto, as amended, supplemented, amended and restated or
otherwise modified from time to time.
"Borrower Security Agreement" means the Security Agreement executed and
delivered by the Borrower pursuant to Section 5.1.5, substantially in the form
of Exhibit G-2 hereto, as amended, supplemented, amended and restated or
otherwise modified from time to time.
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"Borrowing" means the Loans of the same type and, in the case of LIBO
Rate Loans, having the same Interest Period made by all Lenders on the same
Business Day and pursuant to the same Borrowing Request in accordance with
Section 2.1.
"Borrowing Base" means, as of any date of determination, an amount equal
to the sum of up to fifty percent (50%) of Eligible Inventory of the Borrower
and its U.S. Subsidiaries (other than Receivables Co.) at such time.
"Borrowing Base Certificate" means a certificate substantially in the
form attached hereto as Exhibit B-1 setting forth Eligible Inventory of the
Borrower and its U.S.
Subsidiaries (other than Receivables Co.).
"Borrowing Request" means a Loan request and certificate duly executed
by an Authorized Officer of the Borrower, substantially in the form of Exhibit
B-2 hereto.
"Business Day" means
(a) any day which is neither a Saturday or Sunday nor a legal
holiday on which banks are authorized or required to be closed in New
York, New York; and
(b) relative to the making, continuing, prepaying or repaying of
any LIBO Rate Loans, any day which is a Business Day described in clause
(a) above and which is also a day on which dealings in Dollars are
carried on in the interbank eurodollar market of the Administrative
Agent's LIBOR Office.
"Canadian Back-up Letter of Credit" means any standby letter of credit
issued for the account of the Borrower and for the benefit of the lenders in
connection with the Canadian Indebtedness.
"Canadian Dollars" and "Cdn$" mean the lawful currency of Canada.
"Canadian Indebtedness" means one or more credit facilities provided to
ProSource Canada in an aggregate amount not to exceed Cdn$20,000,000.
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"Capital Expenditures" means, for any period, the aggregate amount of
all expenditures of the Borrower and its Subsidiaries for fixed or capital
assets made during such period which, in accordance with GAAP, would be
classified as capital expenditures.
"Capital Stock" means, with respect to any Person, any and all shares,
interests, participations or other equivalents (however designated, whether
voting or non-voting) of such Person's capital, whether now outstanding or
issued after the Effective Date.
"Capitalized Lease Liabilities" means all monetary obligations of the
Borrower or any of its Subsidiaries under any leasing or similar arrangement
which, in accordance with GAAP, would be classified as capitalized leases.
"Cash Equivalent Investment" means, at any time:
(a) any direct obligation of (or guaranteed by) the United States
Government (or any agency or instrumentality thereof) maturing not more
than one year after such time;
(b) commercial paper, maturing not more than one year from the
date of issue, which is issued by
(i) a corporation (other than an Affiliate of any Obligor)
organized under the laws of any state of the United States or of
the District of Columbia and rated A-1 by S&P or P-1 by Xxxxx'x,
or
(ii) any Lender (or its holding company);
(c) any certificate of deposit or bankers acceptance, maturing
not more than one year after such time, which is issued by either
(i) any bank organized under the laws of the United States
(or any State thereof or the District of Columbia or Canada) and
which has (x) a credit rating of Aa or better from Xxxxx'x or a
comparable rating from S&P and (y) a combined capital and surplus
greater than $100,000,000 (or the Dollar equivalent thereof),
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or
(ii) any Lender; or
(d) any repurchase agreement entered into with any Lender or any
commercial banking institution of the stature referred to in clause
(c)(i) which
(i) is secured by a fully perfected security interest in
any obligation of the type described in clause (a), and
(ii) has a market value at the time such repurchase
agreement is entered into of not less than 100% of the repurchase
obligation of such commercial banking institution thereunder.
"CERCLA" means the Comprehensive Environmental Response, Compensation
and Liability Act of 1980, as amended.
"Change in Control" means
(a) the failure of Onex and Xxxxxx X. Xxxxxxxx, individually or
collectively, at any time directly or indirectly to be the "beneficial
owner" (as defined in Rules 13d-3 and 13d-5 under the Exchange Act) on a
fully diluted basis of shares of the Capital Stock of the Parent having
(x) at least 51% of the voting power of all issued and outstanding
shares of voting Capital Stock of the Parent or (y) the right to
exercise voting power for the election of at least a majority of the
board of directors of the Parent; or
(b) the failure of the Parent at any time to directly own
beneficially and of record on a fully diluted basis 100% of the issued
and outstanding shares of Capital Stock of the Borrower (whether voting
or non-voting), such shares to be held free and clear of all Liens
(other than Liens granted under a Loan Document in favor of the Secured
Parties and Liens permitted to exist under clause (e) or (h) of Section
7.2.3); or
(c) the failure of the Borrower at any time to
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directly or indirectly own beneficially and of record on a fully diluted
basis 100% of the issued and outstanding Shares of Capital Stock of each
of its Subsidiaries (whether voting or non-voting), such shares to be
held free and clear of all Liens (other than Liens granted under a Loan
Document in favor of the Secured Parties and Liens permitted to exist
under clause (e) or (h) of Section 7.2.3).
"Closing Date Certificate" means the Closing Date Certificate executed
and delivered by the Borrower pursuant to Section 5.1.10, substantially in the
form of Exhibit I hereto.
"Code" means the Internal Revenue Code of 1986, and the regulations
thereunder, in each case as amended, reformed or otherwise modified from time to
time.
"Collateral" is used herein as defined in the Security
Agreements and the Pledge Agreements.
"Commitment" means, relative to any Lender, such Lender's obligation to
make Loans pursuant to Section 2.1.1.
"Commitment Amount" means $75,000,000, as such amount may be reduced
from time to time pursuant to Section 2.2.
"Commitment Termination Date" means the earliest of
(a) Xxxxx 0, 0000 (xx the initial Credit Extension has
not occurred on or prior to March 31, 1997);
(b) the five-year anniversary of the date of the
initial Credit Extension, as such date may be extended
pursuant to clause (c) of Section 2.8.2;
(c) the date on which the Commitment Amount is
terminated in full or reduced to zero pursuant to Section
2.2; and
(d) the date on which any Commitment Termination Event
occurs.
Upon the occurrence of any event described in the preceding
clause (c) or (d), the Commitment shall terminate automatically
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and without any further action.
"Commitment Termination Event" means
(a) the occurrence of any Event of Default described
in clauses (a) through (d) of Section 8.1.9; or
(b) the occurrence and continuance of any other Event
of Default and either
(i) the declaration of all or any portion of the
Loans to be due and payable pursuant to Section 8.3, or
(ii) the giving of notice by the Administrative Agent,
acting at the direction of the Required Lenders, to the Borrower
that the Commitments have been terminated.
"Compliance Certificate" means a certificate duly completed and executed
by an Authorized Officer of the Borrower, substantially in the form of Exhibit J
hereto, as amended, supplemented, amended and restated or otherwise modified
from time to time, together with such changes thereto as the Administrative
Agent may from time to time reasonably request for the purpose of monitoring the
Borrower's compliance with the financial covenants contained herein.
"Contingent Liability" means any agreement, undertaking or arrangement
by which any Person guarantees, endorses or otherwise becomes or is contingently
liable upon (by direct or indirect agreement, contingent or otherwise, to
provide funds for payment, to supply funds to, or otherwise to invest in, a
debtor, or otherwise to assure a creditor against loss) the indebtedness,
obligation or any other liability of any other Person (other than by
endorsements of instruments in the course of collection), or guarantees the
payment of dividends or other distributions upon the shares of any other Person
;provided, that the term "Contingent Liability" shall not include guarantees of
payment delivered by the Borrower in respect of loans or advances made to
employees of the Borrower or its Subsidiaries the proceeds of which are used to
purchase Capital Stock of the Parent where (x) the lender has recourse to such
Capital Stock and (y) the amount loaned is not in excess of 67% of the fair
market value of such
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Securities. The amount of any Person's obligation under any Contingent Liability
shall (subject to any limitation set forth therein) be deemed to be the
outstanding principal amount (or maximum principal amount, if larger) of the
debt, obligation or other liability guaranteed thereby.
"Continuation/Conversion Notice" means a notice of continuation or
conversion and certificate duly executed by an Authorized Officer of the
Borrower, substantially in the form of Exhibit D hereto.
"Contractual Obligation", as applied to any Person, means any provision
of any Securities issued by that Person or any indenture, mortgage, deed of
trust, security agreement, pledge agreement, guaranty, contract, undertaking,
agreement or instrument to which that Person is a party or by which it or any of
its properties is bound, or to which it or any of its properties is subject.
"Controlled Group" means all members of a controlled group of
corporations and all members of a controlled group of trades or businesses
(whether or not incorporated) under common control which, together with the
Borrower, are treated as a single employer under Section 414(b) or 414(c) of the
Code or Section 4001 of ERISA.
"Covered Taxes" means any Taxes other than franchise or capital taxes,
branch profits taxes and taxes on or measured by net income or net receipts
imposed with respect to the Administrative Agent or any Lender by reason of a
connection between the Administrative Agent or such Lender and the relevant
taxing jurisdiction (other than a connection arising solely from such Person
having executed, delivered, performed its obligations or received any payment
under, or enforced any right in connection with, this Agreement or any Note).
Covered Taxes shall not include Taxes to which, and to the extent that, the
Administrative Agent or the relevant Lender, as the case may be, is subject
prior to entering into this Agreement, and which would imposed upon the
Administrative Agent or such Lender, as the case may be, as a result of a
connection between such Person and the relevant taxing authority (other than a
connection arising solely from such Person having executed, delivered, performed
its obligations or received any payment under, or enforced any right
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21
in connection with, this Agreement or any Note).
"Credit Extension" means, as the context may require,
(a) the making of a Loan by a Lender; or
(b) the issuance of any Letter of Credit, or the extension of any
Stated Expiry Date of any existing Letter of Credit, by an Issuer.
"Credit Extension Request" means, as the context may require, any
Borrowing Request or Issuance Request.
"Default" means any Event of Default or any condition, occurrence or
event which, after notice or lapse of time or both, would constitute an Event of
Default.
"Defaulted Debt" means (x) any Indebtedness of the type listed under
clauses (a), (b), (c), (e) and (g) of the definition of "Indebtedness" (without
duplication, Contingent Liabilities in respect of such type of Indebtedness) and
(y) any Indebtedness, whether or not for borrowed money,
(i) represented by notes payable, and drafts
accepted, that represent extensions of credit,
(ii) constituting obligations evidenced by bonds,
debentures, notes or similar instruments, or
(iii) upon which interest charges are customarily paid or
that was issued or assumed as partial payment for property (other
than trade credit that is incurred in the ordinary course of
business).
"Designated Subsidiary" means any Person in which the Borrower or any of
its Subsidiaries has an Investment (as permitted by clause (i) of Section 7.2.5)
and which is bound by restrictions of the type described in clause (a) or (c) of
Section 7.2.13.
"Disbursement" is defined in Section 2.6.2.
"Disbursement Date" is defined in Section 2.6.2.
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"Disclosure Schedule" means the Disclosure Schedule attached hereto as
Schedule I, as it may be amended, supplemented, amended and restated or
otherwise modified from time to time by the Borrower with the written consent of
the Required Lenders.
"Dollar" and the sign "$" mean lawful money of the United
States.
"Domestic Office" means, relative to any Lender, the office of such
Lender designated as such Lender's "Domestic Office" below its signature hereto
or in a Lender Assignment Agreement, or such other office of a Lender (or any
successor or assign of such Lender) within the United States as may be
designated from time to time by notice from such Lender, as the case may be, to
each other Person party hereto.
"EBITDA" means, for the Borrower and its Subsidiaries, for
any applicable period, the sum (without duplication) for such
period of
(a) Net Income,
plus
(b) the amount deducted by the Borrower and its
Subsidiaries in determining Net Income representing
amortization,
plus
(c) the amount deducted in determining Net Income of all federal,
state and local income taxes (whether paid in cash or deferred) of the
Borrower and its Subsidiaries,
plus
(d) the amount deducted in determining Net Income representing
Interest Expense of the Borrower and its Subsidiaries,
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plus
(e) the amount deducted in determining Net Income representing
depreciation of assets of the Borrower and its Subsidiaries,
plus
(f) the amount deducted in determining Net Income representing
Termination and Amendment Charges and Asset Impairment Charges,
plus
(g) the amount deducted in determining Net Income of all charges
resulting from the application of Financial Accounting Standards Board
Statement No. 121.
"Effective Date" means the date this Agreement becomes effective pursuant
to Section 10.8.
"Eligible Inventory" means with respect to Inventory of the Borrower and
its U.S. Subsidiaries (other than Receivables Co.), at any time of determination
thereof, any Inventory located in the United States (i) with respect to which
the Administrative Agent has a valid and perfected first priority Lien (subject
to Liens permitted to exist under Section 7.2.3), (ii) that consists of finished
goods (including expressly the "seafood stockpile" as defined in agreements with
Long Xxxx Xxxxxx'x Restaurants, Inc. (or its Subsidiaries) in effect on the
Effective Date) and not supplies, (iii) that meets all standards imposed by any
governmental agency, or department or division thereof, having regulatory
authority over such goods, their use or sale, (iv) that is currently usable or
salable, at prices approximating at least cost, in the normal course of the
Borrower's business and is not slow moving or stale, (v) that is not obsolete or
returned or repossessed or used goods taken in trade and (vi) that is not
determined by the Administrative Agent in its reasonable discretion to be
ineligible based on customary credit and collateral criteria utilized by asset
based lenders. Eligible Inventory shall be valued at the lower of cost
determined on a weighted moving average accounting basis and fair market value,
net of any amount included therein for the value of
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fuel and (without duplication) net of the Borrower's reserves for obsolescence.
No Inventory shall be Eligible Inventory unless (x) it is in the possession or
control of the Borrower or one of its Subsidiaries or (y) if it is located at
premises leased from a third party, either (1) it is subject to a written
consent from such third party in form and substance reasonably satisfactory to
the Administrative Agent that permits the Administrative Agent, on behalf of the
Lenders, to obtain possession of and to dispose of such Inventory, free and
clear of any lien in favor of the lessor and without any obligation to the
lessor other than to pay for the repair of physical damage to the leased
premises caused by the Administrative Agent's or any Lender's obtaining
possession or disposing of such Inventory and other than the payment of rent
during any period of up to 60 days that the Administrative Agent elects that the
Inventory remain on the leased premises after the receipt by the Administrative
Agent of written notice by the lessor directing removal thereof or (2) a reserve
against the Borrowing Base shall have been established in an amount equal to
twice the monthly rental payment with respect to such premises or (z) if it is
located at the premises of a third party bailee and a negotiable instrument has
not been issued with respect thereto, a UCC-1 financing statement covering the
Inventory which names the third party bailee as debtor/bailee, names the
Borrower or the relevant Subsidiary thereof as the secured party/xxxxxx and
names the Administrative Agent as assignee of the secured party/xxxxxx has been
filed in the appropriate filing office.
"Environmental Laws" means all applicable federal, state or local
statutes, laws, ordinances, codes, rules, regulations and guidelines (including
consent decrees and administrative orders) relating to protection of the
environment.
"Equity Interests", with respect to any Person, means any Capital Stock
issued by such Person, regardless of class or designation, or any limited or
general partnership interest in such Person, regardless of designation, and all
warrants, options, purchase rights, conversion or exchange rights, voting
rights, calls or claims of any character with respect thereto.
"ERISA" means the Employee Retirement Income Security Act of 1974, as
amended, and any successor statute thereto of similar import, together with the
regulations thereunder, in each case as
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in effect from time to time. References to sections of ERISA
also refer to any successor sections thereto.
"Event of Default" is defined in Section 8.1.
"Exchange Act" means the Securities Exchange Act of 1934, as
amended.
"Existing Credit Agreement" means the Loan and Security Agreement, dated
as of March 31, 1995, as amended or modified on or prior to the date hereof,
among the Borrower, ProSource Canada and BroMar Services, Inc., certain
financial institutions parties thereto, NationsBank of Georgia, N.A., The First
National Bank of Boston and Fleet Capital Corporation, as co-agents, and
NationsBank of Georgia, N.A., as administrative agent.
"Extension Request" means an Extension Request duly executed by an
Authorized Officer of the Borrower pursuant to Section 2.8, substantially in the
form of Exhibit K hereto.
"Federal Funds Rate" means, for any period, a fluctuating interest rate
per annum equal for each day during such period to
(a) the weighted average of the rates on overnight federal funds
transactions with members of the Federal Reserve System arranged by
federal funds brokers, as published for such day (or, if such day is not
a Business Day, for the next preceding Business Day) by the Federal
Reserve Bank of New York; or
(b) if such rate is not so published for any day which is a
Business Day, the average of the quotations for such day on such
transactions received by Scotiabank from three federal funds brokers of
recognized standing selected by it.
"Fee Letter" means that certain confidential letter, dated as of
December 28, 1996, from Scotiabank to the Borrower, as the same may be amended
or otherwise changed in accordance with the terms thereof.
"Fiscal Month" means the period of four or five consecutive weeks
beginning on the first day of a Fiscal Year of the Borrower and ending on the
last Saturday on or before the following
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January 31 and each period of four or five consecutive weeks beginning on the
Sunday following the end of the preceding Fiscal Month and ending on the last
Saturday on or before the last day of the next calendar month (or of the same
calendar month, if the first day of the Fiscal Month was also the first day of a
calendar month).
"Fiscal Quarter" means the period of three consecutive Fiscal Months
beginning on the first day of a Fiscal Year of the Borrower and each succeeding
consecutive period of three consecutive Fiscal Months.
"Fiscal Year" means each period of 52 or 53 consecutive weeks beginning
on the Sunday following the last Saturday in one calendar year and ending on the
last Saturday in the next calendar year; references to a Fiscal Year with a
number corresponding to any calendar year (e.g., the "1997 Fiscal Year") refer
to the Fiscal Year ending on the last Saturday in such calendar year.
"Fixed Charge Coverage Ratio" means, as of the close of any Fiscal
Quarter, the ratio computed for the period consisting of such Fiscal Quarter and
each of the three immediately prior Fiscal Quarters with respect to the Borrower
and its Subsidiaries on a consolidated basis of:
(a) EBITDA (for all such Fiscal Quarters);
to
(b) the sum (for all such Fiscal Quarters) of
(i) cash Interest Expense;
plus
(ii) all federal and state income taxes actually
paid in cash by the Borrower and its Subsidiaries;
plus
(iii) Capital Expenditures,
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plus
(iv) the aggregate consideration paid by the Borrower or
any of its Subsidiaries (or funds provided by the Borrower or any
of its Subsidiaries to the Parent) for the purchase or other
acquisition of Capital Stock of the Parent (net of any cash
repayments received by the Borrower or any of its Subsidiaries in
respect of loans or advances made to employees the proceeds of
which were used to purchase Capital Stock of the Parent).
"F.R.S. Board" means the Board of Governors of the Federal
Reserve System or any successor thereto.
"GAAP" is defined in Section 1.4.
"Governmental Approval" means any action, authorization, consent,
approval, license, lease, ruling, permit, tariff, rate, certification,
exemption, filing, variance, order, judgment, decree, publication, notices to,
declarations of or with or registration by or with any Regulatory Authority.
"Governmental Rule" means any statute, law, regulation, ordinance, rule,
judgment, order, decree, permit, concession, grant, franchise, license,
agreement, directive, guideline, policy, requirement, or other governmental
authorization including any conditions thereof, restriction or any similar form
of published or otherwise known decision of or determination by, or any
interpretation or administration of any of the foregoing by, any Regulatory
Authority, whether now or hereafter in effect (including any Environmental Law).
"Guaranty" means, as the context may require, the Parent Guaranty and/or
the Subsidiary Guaranty and any other guaranty which guarantees any of the
Obligations and which is being entered into by one or more of the Obligors in
favor of the Administrative Agent.
"Hazardous Material" means
(a) any "hazardous substance", as defined by CERCLA;
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(b) any "hazardous waste", as defined by the Resource
Conservation and Recovery Act, as amended; or
(c) any pollutant or contaminant or hazardous, dangerous or toxic
chemical, material or substance (including any petroleum product) within
the meaning of any other applicable federal, state or local law,
regulation, ordinance or requirement (including consent decrees and
administrative orders) relating to or imposing liability or standards of
conduct concerning any hazardous, toxic or dangerous waste, substance or
material, all as amended.
"Hedging Obligations" means, with respect to any Person, all liabilities
of such Person under currency exchange agreements, interest rate swap
agreements, interest rate cap agreements and interest rate collar agreements,
and all other agreements or arrangements designed to protect such Person against
fluctuations in interest rates or currency exchange rates.
"herein", "hereof", "hereto", "hereunder" and similar terms contained in
this Agreement or any other Loan Document refer to this Agreement or such other
Loan Document, as the case may be, as a whole and not to any particular Section,
paragraph or provision of this Agreement or such other Loan Document.
"Impermissible Qualification" means, relative to the opinion or
certification of any independent public accountant as to any financial statement
of the Borrower, any qualification or exception to such opinion or certification
(a) which is of a "going concern" or similar nature;
(b) which relates to the limited scope of examination
of matters relevant to such financial statement; or
(c) which relates to the treatment or classification of any item
in such financial statement and which, as a condition to its removal,
would require an adjustment to such item the effect of which would be to
cause the Borrower to be in default of any of its obligations under
Section 7.2.4.
"including" and "include" mean including without limiting
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the generality of any description preceding such term, and, for purposes of this
Agreement and each other Loan Document, the parties hereto agree that the rule
of ejusdem generis shall not be applicable to limit a general statement, which
is followed by or referable to an enumeration of specific matters, to matters
similar to the matters specifically mentioned.
"Indebtedness" of any Person means, without duplication:
(a) all obligations of such Person for borrowed money and all
obligations of such Person evidenced by bonds, debentures, notes or
other similar instruments;
(b) all obligations, contingent or otherwise, relative to the
face amount of all letters of credit, whether or not drawn, and banker's
acceptances issued for the account of such Person;
(c) all obligations of such Person as lessee under leases which
have been or should be, in accordance with GAAP, recorded as Capitalized
Lease Liabilities;
(d) all other items which, in accordance with GAAP, would be
included as liabilities on the liability side of the balance sheet of
such Person as of the date at which Indebtedness is to be determined;
(e) net liabilities of such Person under all Hedging
Obligations;
(f) whether or not so included as liabilities in accordance with
GAAP, all obligations of such Person to pay the deferred purchase price
of property or services (excluding trade payables arising in the
ordinary course of business), and indebtedness (excluding prepaid
interest thereon) secured by a Lien on property owned or being purchased
by such Person (including indebtedness arising under conditional sales
or other title retention agreements), whether or not such indebtedness
shall have been assumed by such Person or is limited in recourse;
(g) all Receivables Facility Outstandings; and
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(h) all Contingent Liabilities of such Person in
respect of any of the foregoing.
For all purposes of this Agreement, the Indebtedness of any Person shall include
the Indebtedness of any partnership or joint venture in which such Person is a
general partner except to the extent that such Indebtedness is by its terms
nonrecourse to such Person.
"Indebtedness to be Paid" is defined in Section 5.1.3.
"Indemnified Liabilities" is defined in Section 10.4.
"Indemnified Parties" is defined in Section 10.4.
"Interest Coverage Ratio" means, as of the close of any Fiscal Quarter,
the ratio computed for the period consisting of such Fiscal Quarter and each of
the three immediately prior Fiscal Quarters with respect to the Borrower and its
Subsidiaries on a consolidated basis of:
(a) EBITDA (for all such Fiscal Quarters);
to
(b) the sum (for all such Fiscal Quarters) of cash
Interest Expense.
"Interest Expense" means, for any Fiscal Quarter, the aggregate
consolidated interest expense of the Borrower and its Subsidiaries for such
Fiscal Quarter, as determined in accordance with GAAP, including (without
duplication) (i) the portion of any payments made in respect of Capitalized
Lease Liabilities allocable to interest expense and (ii) interest (or other fees
in the nature of interest or discount accrued for such Fiscal Quarter) in
respect of the Permitted Receivables Transaction.
"Interest Period" means, relative to any LIBO Rate Loan, the period
beginning on (and including) the date on which such LIBO Rate Loan is made or
continued as, or converted into, a LIBO Rate Loan pursuant to Section 2.3 or 2.4
and shall end on (but exclude) the day which numerically corresponds to such
date one, two, three, six, nine or twelve months thereafter (or, if such
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month has no numerically corresponding day, on the last Business Day of such
month), as the Borrower may select in its relevant notice pursuant to Section
2.3 or 2.4; provided, however, that
(a) the Borrower shall not be permitted to select Interest
Periods to be in effect at any one time which have expiration dates
occurring on more than nine different dates;
(b) Interest Periods commencing on the same date for
Loans comprising part of the same Borrowing shall be of the
same duration;
(c) if such Interest Period would otherwise end on a day which is
not a Business Day, such Interest Period shall end on the next following
Business Day (unless such next following Business Day is the first
Business Day of a calendar month, in which case such Interest Period
shall end on the Business Day next preceding such numerically
corresponding day); and
(d) no Interest Period for any Loan may end later than
the Stated Maturity Date.
"Investment" means, relative to any Person,
(a) any loan or advance made by such Person to any other Person
(excluding escrow and other deposits, prepaid expenses, and commission,
travel and similar advances to directors, officers and employees, in
each case made in the ordinary course of business);
(b) any Contingent Liability of such Person; and
(c) any ownership interest held by such Person in any
other Person.
The amount of any Investment shall be the original principal or capital amount
thereof less all returns of principal or equity thereon and shall, if made by
the transfer or exchange of property other than cash, be deemed to have been
made in an original principal or capital amount equal to the fair market value
of such property at the time of such Investment.
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"Inventory" means any "inventory" (as that term is defined
in Section 9-109(4) of the U.C.C.) of the Borrower.
"Issuance Request" means a Letter of Credit request and certificate duly
executed by an Authorized Officer of the Borrower, substantially in the form of
Exhibit C hereto.
"Issuer" means Scotiabank in its capacity as issuer of the Letters of
Credit. At the request of Scotiabank, another Lender or an Affiliate of
Scotiabank may issue one or more Letters of Credit hereunder.
"Law Change" is defined in clause (b) of Section 4.6.
"Lender Assignment Agreement" means a lender assignment agreement,
substantially in the form of Exhibit E hereto.
"Lenders" is defined in the preamble and, in addition, shall include any
commercial bank or other financial institution that becomes a Lender pursuant to
Section 10.11.1.
"Lender's Environmental Liability" means any and all losses,
liabilities, obligations, penalties, claims, demands, defenses, costs,
judgments, damages (including consequential damages), disbursements or expenses
of any kind or nature whatsoever (including reasonable attorneys' fees at trial
and appellate levels and reasonable experts' fees, disbursements and expenses
incurred in investigating, defending against or prosecuting any litigation,
claim or proceeding) which may at any time be imposed upon, incurred by or
asserted or awarded against any Lender or any of such Lender's parent and
subsidiary corporations, and their Affiliates, shareholders, directors,
officers, employees, and agents in connection with or arising from:
(a) any Hazardous Material on, in, under or affecting all or any
portion of any property of the Borrower or any of its Subsidiaries, the
groundwater thereunder, or any surrounding areas thereof to the extent
caused by Releases from the Borrower's or any of the Borrower's
Subsidiaries' or any of their respective predecessors' properties;
(b) any misrepresentation, inaccuracy or breach of any
warranty, contained or referred to in Section 6.13;
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33
(c) any violation or claim of violation by the
Borrower or any of its Subsidiaries of any Environmental
Laws; or
(d) the imposition of any lien for damages caused by or the
recovery of any costs for the cleanup, release or threatened release of
Hazardous Material by the Borrower or any of its Subsidiaries, or in
connection with any property owned or formerly owned by the Borrower or
any of its Subsidiaries.
"Letter of Credit" is defined in Section 2.1.2.
"Letter of Credit Commitment" means, with respect to an Issuer, such
Issuer's obligation to issue Letters of Credit pursuant to Section 2.1.2 and,
with respect to each of the other Lenders, the obligations of each such Lender
to participate in such Letters of Credit pursuant to Section 2.6.1.
"Letter of Credit Commitment Amount" means, on any date, a maximum
amount of $25,000,000, as such amount may be permanently reduced from time to
time pursuant to Section 2.2.
"Letter of Credit Outstandings" means, on any date, an
amount equal to the sum of
(a) the then aggregate amount which is undrawn and
available under all issued and outstanding Letters of
Credit,
plus
(b) the then aggregate amount of all unpaid and
outstanding Reimbursement Obligations.
"LIBO Rate" means, relative to any Interest Period for any LIBO Rate
Loan, the rate of interest equal to the average (rounded upwards, if necessary,
to the nearest 1/100 of 1%) of the rates per annum at which Dollar deposits in
immediately available funds are offered in the London interbank market as at or
about 11:00 a.m. London, England time two Business Days prior to the beginning
of such Interest Period for delivery on the first day of such Interest Period,
and in an amount approximately
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34
equal to the amount of such LIBO Rate Loan and for a period approximately equal
to such Interest Period.
"LIBO Rate Loan" means a Loan bearing interest, at all times during an
Interest Period applicable to such Loan, at a fixed rate of interest determined
by reference to the LIBO Rate (Reserve Adjusted).
"LIBO Rate (Reserve Adjusted)" means, relative to any Loan to be made,
continued or maintained as, or converted into, a LIBO Rate Loan for any Interest
Period, a rate per annum (rounded upwards, if necessary, to the nearest 1/100 of
1%) determined pursuant to the following formula:
LIBO Rate = LIBO Rate
(Reserve Adjusted) -------------------------------
1.00 - LIBOR Reserve Percentage
The LIBO Rate (Reserve Adjusted) for any Interest Period for LIBO Rate
Loans will be determined by the Administrative Agent on the basis of the LIBOR
Reserve Percentage in effect on, and the applicable rates furnished to and
received by the Administrative Agent, two Business Days before the first day of
such Interest Period.
"LIBOR Office" means, relative to any Lender, the office of such Lender
designated as such Lender's "LIBOR Office" below its signature hereto or in a
Lender Assignment Agreement, or such other office of a Lender as designated from
time to time by notice from such Lender to the Borrower and the Administrative
Agent, whether or not outside the United States, which shall be making or
maintaining LIBO Rate Loans of such Lender hereunder.
"LIBOR Reserve Percentage" means, relative to any Interest Period, the
reserve percentage (expressed as a decimal) equal to the maximum aggregate
reserve requirements (including all basic, emergency, supplemental, marginal and
other reserves and taking into account any transitional adjustments or other
scheduled changes in reserve requirements as and when in effect) specified under
regulations issued from time to time by the F.R.S. Board and then applicable to
assets or liabilities consisting of or including "Eurocurrency Liabilities", as
currently defined in Regulation D of the F.R.S. Board, having a term
approximately equal or comparable to such Interest Period.
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"Lien" means any security interest, mortgage, pledge, hypothecation,
assignment, deposit arrangement, encumbrance, lien (statutory or otherwise),
charge against or interest in property, or other priority or preferential
arrangement of any kind or nature whatsoever, to secure payment of a debt or
performance of an obligation.
"Loan" is defined in Section 2.1.1.
"Loan Documents" collectively means this Agreement, the Notes, the
Letters of Credit, each Rate Protection Agreement relating to Hedging
Obligations of the Borrower or any of its Subsidiaries, each Borrowing Request,
each Issuance Request, each Pledge Agreement, each Security Agreement, each
Trademark Security Agreement, each Guaranty, the Fee Letter, the Post-Closing
Events Letter and each other agreement, certificate, document or instrument
delivered in connection with this Agreement and such other agreements, whether
or not specifically mentioned herein or therein, but in any event excluding the
Receivables Transaction Documents.
"Material Adverse Effect" means a material adverse effect on (a) the
financial condition, operations, assets, business, properties or prospects of
(i) the Parent and its Subsidiaries, taken as a whole, (ii) the Borrower or
(iii) the Borrower and its Subsidiaries, taken as a whole, provided, however,
that no event, fact or circumstance occurring on or before or existing on the
date of and described in the Parent's registration statement on Form S-1 of the
SEC, dated November 7, 1996, shall constitute a "Material Adverse Effect" under
this clause (a), (b) the rights and remedies of the Administrative Agent or any
Secured Party under any Loan Document, (c) the enforceability of the Obligations
of any Obligor under any Loan Document or (d) the ability of the Borrower or any
other Obligor to perform its Obligations under any Loan Document to which it is
or becomes a party. The parties hereto understand and agree that the termination
of the Borrower's agreement to provide distribution services to Arby's
restaurants effective April 1, 1997 is not and shall not constitute an event
that has a Material Adverse Effect.
"Material Default" means any Default other than a Non-
Material Default.
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"Monthly Payment Date" means the last day of each calendar month or, if
such day is not a Business Day, the next succeeding Business Day.
"Moody's" means Xxxxx'x Investors Service, Inc.
"Mortgages" means the Borrower Mortgages and the Subsidiary
Mortgages.
"Net Disposition Proceeds" means, with respect to a
Permitted Disposition, the excess of
(a) the gross cash proceeds received by the Borrower or any of
its Subsidiaries from any Permitted Disposition and any cash payments
received in respect of promissory notes or other non-cash consideration
delivered to the Borrower or such Subsidiary in respect of any Permitted
Disposition,
less
(b) the sum of
(i) all reasonable fees and expenses with respect to
legal, investment banking, brokerage and accounting and other
professional fees, sales commissions and disbursements and all
other reasonable fees, expenses and charges, in each case
actually incurred in connection with such Permitted Disposition
which have not been paid to Affiliates of the Borrower,
(ii) all taxes and other governmental costs and expenses
actually paid or estimated by the Borrower (in good faith) to be
payable in connection with such Permitted Disposition,
(iii) payments made by the Borrower or any of its
Subsidiaries to retire Indebtedness (other than the Loans) of the
Borrower or any of its Subsidiaries secured by the assets that
are the subject of such Permitted Disposition, and
(iv) an amount of such proceeds, which, at the
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option of the Borrower and so long as no Default shall have
occurred and be continuing, the Borrower elects to use or causes
the applicable Subsidiary to use to purchase substantially
similar assets useful in the business of the Borrower or such
Subsidiary (with such assets or interests collectively referred
to as "Qualified Assets") within 365 days after the consummation
of such sale, conveyance or disposition, and in the event the
Borrower or such Subsidiary elects to exercise its right to
purchase Qualified Assets with the proceeds of such a Permitted
Disposition pursuant to this clause, the Borrower shall deliver a
certificate of an Authorized Officer to the Administrative Agent
within 30 days following the receipt of such proceeds setting
forth the amount of the such proceeds which the Borrower or such
Subsidiary expects to use to purchase Qualified Assets during
such 365-day period.
If and to the extent that the Borrower or such Subsidiary has elected to
reinvest proceeds from Permitted Dispositions as permitted above, then on the
date which is 365 days after the relevant sale, conveyance or disposition, the
Borrower shall deliver a certificate of an Authorized Officer to the
Administrative Agent certifying as to the amount and use of such proceeds of a
Permitted Disposition actually used to purchase Qualified Assets. Any proceeds
of a Permitted Disposition that are the subject of an election made by the
Borrower or a Subsidiary thereof pursuant to clause (iv) above shall be deemed
as Net Disposition Proceeds if and only to the extent that same are not
reinvested in Qualified Assets within the 365-day period referred to in said
clause (iv).
"Net Income" means, for any period, the aggregate of all amounts
(exclusive of all amounts in respect of any non-cash extraordinary gains and
extraordinary losses) which, in accordance with GAAP, would be included as net
income on the consolidated financial statements of the Borrower and its
Subsidiaries (other than a Designated Subsidiary) for such period.
"Net Worth" means, at any time, the sum of all amounts which, in
accordance with GAAP, would be included under
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shareholders' equity on the most recently available consolidated balance sheet
of the Borrower and its Subsidiaries.
"Non-Material Default" means a Default as to which the Administrative
Agent and the Required Lenders have elected not to take any action required to
be taken hereunder as a condition to such Default becoming an Event of Default.
"Note" means a promissory note of the Borrower payable to any Lender, in
the form of Exhibit A hereto (as such promissory note may be amended, endorsed
or otherwise modified from time to time), evidencing the aggregate Indebtedness
of the Borrower to such Lender resulting from outstanding Loans, and also means
all other promissory notes accepted from time to time in substitution therefor
or renewal thereof.
"Obligations" means all monetary obligations of the Borrower and each
other Obligor arising under or in connection with this Agreement, the Notes, the
Letters of Credit and each other Loan Document.
"Obligor" means, as the context may require, the Parent, the Borrower,
each Subsidiary Guarantor and any other Person (other than a Secured Party) to
the extent such Person is obligated under this Agreement or any other Loan
Document.
"Onex" means Onex Corporation, a corporation organized under the laws of
Ontario, Canada.
"Organic Document" means, relative to any Obligor, as applicable, its
certificate of incorporation, by-laws, certificate of partnership, partnership
agreement, certificate of formation, limited liability agreement and all
shareholder agreements, voting trusts and similar arrangements applicable to any
of such Obligor's partnership interests, limited liability company interests or
authorized shares of capital stock.
"Parent" means ProSource, Inc., a Delaware corporation.
"Parent Guaranty" means the Guaranty executed and delivered by the
Parent pursuant to Section 5.1.7, substantially in the form of Exhibit H-1
hereto as amended, supplemented, amended and restated or otherwise modified from
time to time.
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"Parent Pledge Agreement" means the Pledge Agreement executed and
delivered by the Parent pursuant to Section 5.1.4, substantially in the form of
Exhibit F-1 hereto, as amended, supplemented, amended and restated or otherwise
modified from time to time.
"Parent Security Agreement" means the Security Agreement executed and
delivered by the Parent pursuant to Section 5.1.5, substantially in the form of
Exhibit G-1 hereto, as amended, supplemented, amended and restated or otherwise
modified from time to time.
"Participant" is defined in Section 10.11.2.
"PBGC" means the Pension Benefit Guaranty Corporation and any entity
succeeding to any or all of its functions under ERISA.
"Pension Plan" means a "pension plan", as such term is defined in
Section 3(2) of ERISA, which is subject to Title IV of ERISA (other than a
multiemployer plan as defined in Section 4001(a)(3) of ERISA), and to which the
Borrower or any corporation, trade or business that is, along with the Borrower,
a member of a Controlled Group, may have liability, including any liability by
reason of having been a substantial employer within the meaning of Section 4063
of ERISA at any time during the preceding five years, or by reason of being
deemed to be a contributing sponsor under Section 4069 of ERISA.
"Percentage" means, relative to any Lender, the percentage set forth
opposite its signature hereto or set forth in a Lender Assignment Agreement, as
such percentage may be adjusted from time to time pursuant to Lender Assignment
Agreement(s) executed by such Lender and its Assignee Lender(s) and delivered
pursuant to Section 10.11.1.
"Permitted Acquisition" means an acquisition (whether pursuant to an
acquisition of stock, assets or otherwise) in a single or a series of related
transactions by the Borrower or any Subsidiary of a Person or from any Person of
a business or asset for which all of the following is satisfied:
(a) such business or asset is of the type described in the first
recital;
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(b) immediately before and after giving effect to such
acquisition no Default shall have occurred and be continuing or would
result therefrom; and
(c) upon making such acquisition, the provisions of Sections
7.1.7 and 7.1.8 are complied with.
"Permitted Disposition" means a sale, disposition or other conveyance of
assets by the Borrower or any of its Subsidiaries in accordance with the terms
of clause (b) (other than as permitted by clause (a) or (c)) of Section 7.2.11.
"Permitted Receivables Transaction" means any transaction or series of
related transactions providing for the sale or financing of Accounts; provided,
that any such transaction shall be consummated pursuant to the Receivables
Transaction Documents.
"Person" means any natural person, corporation, limited liability
company, partnership, joint venture, joint stock company, firm, association,
trust or unincorporated organization, government, governmental agency, court or
any other legal entity, whether acting in an individual, fiduciary or other
capacity.
"Plan" means any Pension Plan or Welfare Plan.
"Pledge Agreement" means, as the context may require, the Parent Pledge
Agreement, the Borrower Pledge Agreement and/or any Subsidiary Pledge Agreement
and any other pledge agreement which secures any of the Obligations and which is
being entered into by one or more Obligors in favor of the Administrative Agent.
"Post-Closing Events Letter" means the letter agreement dated as of
March 14, 1997, between the Borrower and the Administrative Agent executed and
delivered on the date of the initial Credit Extension.
"Pro Forma Balance Sheet" is defined in clause (b) of Section 5.1.9.
"ProSource Canada" means ProSource Distribution Services Limited, a
Canadian corporation.
"Qualified Assets" is defined in the definition of "Net
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Disposition Proceeds".
"Quarterly Payment Date" means the last day of March, June, September
and December, or, if any such day is not a Business Day, the next succeeding
Business Day.
"Rate Protection Agreement" means, collectively, any interest rate swap,
cap, collar or similar agreement entered into by the Borrower pursuant to the
terms of this Agreement under which the counterparty to such agreement is (or at
the time such Rate Protection Agreement was entered into, was) a Lender or an
Affiliate of a Lender.
"Receivables Co." means collectively ProSource Receivables Corporation
and ProSource Investments, Inc., each a special purpose, bankruptcy-remote
wholly-owned Subsidiary of the Borrower.
"Receivables Facility Outstandings" means, at any date of determination,
with respect to the Permitted Receivables Transaction, the aggregate cash
proceeds received by the Borrower or any of its Subsidiaries from the sale or
financing of Accounts pursuant to the Permitted Receivables Transaction which
are outstanding on the date of determination.
"Receivables Note" means the subordinated promissory note issued by
Receivables Co. pursuant to the Receivables Transaction Documents.
"Receivables Proceeds" means, with respect to the Permitted Receivables
Transaction, the maximum amount of the commitment to purchase Accounts under the
Permitted Receivables Transaction.
"Receivables Transaction Documents" means the U.S. $150,000,000 Secured
Credit Agreement dated as of March 14, 1997 among Receivables Co., the Borrower,
various financial institutions named therein and The Bank of Nova Scotia as
administrative agent thereunder, and all other documentation relating to the
facility provided therein.
"Regulatory Authority" means, to the extent applicable to Parent, the
Borrower or its Subsidiaries, any national, state or local government, any
political subdivision or any governmental,
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quasi-governmental, judicial, public or statutory instrumentality, authority,
body or entity, other regulatory bureau, authority, body or entity, foreign or
domestic, including the Federal Deposit Insurance Corporation, the Comptroller
of the Currency, the F.R.S. Board, any central bank or any comparable authority.
"Reimbursement Obligation" is defined in Section 2.6.3.
"Release" means a "release", as such term is defined in CERCLA.
"Required Lenders" means, at any time, Lenders holding at least 51% of
the then aggregate outstanding principal amount of the Notes then held by the
Lenders, or, if no such principal amount is then outstanding, Lenders having at
least 51% of the Commitments.
"Resource Conservation and Recovery Act" means the Resource Conservation
and Recovery Act, 42 U.S.C. Section 6901, et seq., as amended.
"S&P" means Standard & Poor's Rating Services.
"Scotiabank" is defined in the preamble.
"SEC" means the Securities and Exchange Commission.
"Secured Parties" means, collectively, the Lenders, the Issuers, the
Administrative Agent, each counterparty to a Rate Protection Agreement that is
(or at the time such Rate Protection Agreement was entered into, was) a Lender
or an Affiliate thereof and (in each case), each of their respective successors,
transferees and assigns.
"Securities" means any limited, general or other partnership interest,
or any stock, shares, voting trust certificates, bonds, debentures, notes or
other Equity Interests or evidences of indebtedness, secured or unsecured,
convertible, subordinated or otherwise, or any certificates of interest, shares,
or participations in temporary or interim certificates for the purchase or
acquisition of, or any right to subscribe to, purchase or acquire any of the
foregoing, but shall not include
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any evidence of the Obligations.
"Security Agreement" means, as the context may require, the Parent
Security Agreement, the Borrower Security Agreement and/or a Subsidiary Security
Agreement and any other security agreement which secures any of the Obligations
and which is being entered into by one or more Obligors in favor of the
Administrative
Agent.
"SLB Properties" means those assets of the Borrower or any of its
Subsidiaries listed in Schedule II attached hereto.
"Stated Amount" of each Letter of Credit means the total amount
available to be drawn under such Letter of Credit upon the issuance thereof.
"Stated Expiry Date" is defined in Section 2.6.
"Stated Maturity Date" means March 14, 2002.
"Subsidiary" means, with respect to any Person, any corporation,
partnership or other business entity of which more than 50% of the outstanding
capital stock (or other ownership interest) having ordinary voting power to
elect a majority of the board of directors, managers or other voting members of
the governing body of such entity (irrespective of whether at the time capital
stock (or other ownership interest) of any other class or classes of such entity
shall or might have voting power upon the occurrence of any contingency) is at
the time directly or indirectly owned by such Person, by such Person and one or
more other Subsidiaries of such Person, or by one or more other Subsidiaries of
such Person. Unless the context otherwise specifically requires, the term
"Subsidiary" shall be a reference to a Subsidiary of the Borrower.
"Subsidiary Guarantor" means each U.S. Subsidiary that has executed and
delivered a Subsidiary Guaranty.
"Subsidiary Guaranty" means, as the context may require, the Guaranty
executed and delivered by each Subsidiary Guarantor pursuant to Section 5.1.7 or
any guaranty executed and delivered by a Subsidiary pursuant to clause (a) of
Section 7.1.7, in each case substantially in the form of Exhibit H-2 hereto, as
amended,
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supplemented, amended and restated or otherwise modified from time to time.
"Subsidiary Mortgage" means any mortgage executed and delivered by a
Subsidiary Guarantor pursuant to Section 5.1.8 or 7.1.8 as the case may be, in
each case substantially in the form of Exhibit M-2 hereto, as amended,
supplemented, amended and restated or otherwise modified from time to time.
"Subsidiary Pledge Agreement" means any Pledge Agreement executed and
delivered by a Subsidiary Guarantor pursuant to clause (a) of Section 7.1.7,
substantially in the form of Exhibit F-3 hereto, in each case as amended,
supplemented, amended and restated or otherwise modified from time to time.
"Subsidiary Security Agreement" means the Security Agreement executed
and delivered by a Subsidiary Guarantor pursuant to Section 5.1.5 or any
security agreement executed and delivered by a Subsidiary pursuant to clause (a)
of Section 7.1.7, in each case, substantially in the form of Exhibit G-2 hereto,
as amended, supplemented, amended and restated or otherwise modified from time
to time.
"Taxes" means any present or future income, excise, stamp or franchise
taxes and other taxes, fees, duties, withholdings or other charges of any nature
whatsoever imposed by any taxing jurisdiction, and in each case any interest,
additions to tax, penalties or additional amounts payable with respect thereto.
"Termination and Amendment Charges" means income statement charges in an
aggregate amount not greater than the sum of (a) $17,000,000 (before taking into
account any associated tax benefit, which tax benefit will be determined based
on the Borrower's effective tax rate for the period in which such charges are
recorded, all in accordance with GAAP) recorded by the Borrower in Fiscal Year
1996 or the first Fiscal Quarter of Fiscal Year 1997, in connection with
prepayment charges, the writeoff of deferred financing costs and other
appropriate charges in connection with the termination and/or amendment of
various agreements as to Indebtedness of the Borrower and other matters and (b)
$10,600,000 (before taking into account any associated tax benefit, which tax
benefit will be determined based on the Borrower's effective tax rate for the
period in
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which such charges are recorded, all in accordance with GAAP) recorded by the
Borrower in Fiscal Year 1996 or the first Fiscal Quarter of Fiscal Year 1997, in
connection with the termination of the Borrower's agreement to provide
distribution services to Arby's restaurants.
"Total Debt" means, on any date, without duplication, an amount equal to
the sum of the daily average for the period then ending of (a) the principal
amount of all Indebtedness of the Borrower and its Subsidiaries of the type
referred to in clause (a) of the definition of "Indebtedness" plus (b) the
maximum aggregate amount of Indebtedness of the type referred to in clause (b)
of the definition of "Indebtedness" plus (c) the aggregate amount of
Indebtedness of the type referred to in clause (c) of the definition of
"Indebtedness" (exclusive of intercompany Indebtedness between the Borrower and
any of its Subsidiaries or between any Subsidiaries of the Borrower) plus (d)
any Contingent Liability with respect to any of the foregoing types of
Indebtedness.
"Total Debt to EBITDA Ratio" means, as of the last day of any Fiscal
Quarter, the ratio of
(a) Total Debt; provided, however, that solely for purposes of
the definitions of "Applicable Commitment Fee Margin" and "Applicable
Margin" the daily average amount of Total Debt used in the calculation
of the Total Debt to EBITDA Ratio for the fourth Fiscal Quarter of 1996
shall be deemed to be reduced by the net proceeds received by the
Borrower from the initial public offering of common stock of the
Borrower by the Parent in November, 1996 in an amount approximately
equal to $34,300,000 for the period commencing on September 29, 1996 and
ending on November 14, 1996,
to
(b) EBITDA computed for the period consisting of such Fiscal
Quarter and each of the three immediately preceding Fiscal Quarters.
"Trade Investments" means Investments of the Borrower or any of its
Subsidiaries in Securities of trade debtors or other Persons in consideration of
or as evidence of past-due or
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restructured accounts receivable.
"Trademark Security Agreement" means any trademark security agreement
executed and delivered by the Borrower or a Subsidiary Guarantor, as the case
may be, in each case substantially in the form of Exhibit B to a Security
Agreement, as amended, supplemented, amended and restated or otherwise modified
from time to time.
"type" means, relative to any Loan, the portion thereof, if any, being
maintained as a Base Rate Loan or a LIBO Rate Loan.
"U.C.C." means the Uniform Commercial Code as from time to time in
effect in the State of New York.
"United States" or "U.S." means the United States of America, its fifty
states, Puerto Rico and the District of Columbia.
"U.S. Dollar Equivalent" of any amount of Canadian Dollars on any date
means the equivalent amount in U.S. Dollars, converted at the rate of exchange
quoted by Scotiabank at its New York office to prime banks in New York for the
spot purchase in the New York foreign exchange market of Canadian Dollars at
approximately 11:00 a.m. (New York time) on such date in accordance with its
normal practice.
"U.S. Person" means any Person that is a "United States person" within
the meaning of Section 7701(a)(30) of the Code (or any applicable successor
provision).
"U.S. Subsidiary" means any Subsidiary of the Borrower that is
incorporated or organized under the laws of the United States or a state
thereof.
"Welfare Plan" means a "welfare plan", as such term is defined in
section 3(1) of ERISA.
"wholly-owned" means, with respect to any direct or indirect Subsidiary,
any Subsidiary all of the outstanding common stock (or similar equity interest)
of which (other than any director's qualifying shares or investments by foreign
nationals mandated by applicable laws) is owned directly or indirectly by the
Borrower.
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SECTION 1.2. Use of Defined Terms. Unless otherwise defined or the
context otherwise requires, terms for which meanings are provided in this
Agreement shall have such meanings when used in each other Loan Document, the
Disclosure Schedule, or any Borrowing Request, Issuance Request, Continuation/
Conversion Notice, Compliance Certificate, notice or other communications
delivered from time to time in connection with this Agreement or any other Loan
Document.
SECTION 1.3. Cross-References. Unless otherwise specified, references in
this Agreement and in each other Loan Document to any Article or Section are
references to such Article or Section of this Agreement or such other Loan
Document, as the case may be, and, unless otherwise specified, references in any
Article, Section or definition to any clause are references to such clause of
such Article, Section or definition.
SECTION 1.4. Accounting and Financial Determinations. Unless otherwise
specified, all accounting terms used herein or in any other Loan Document shall
be interpreted, and all accounting determinations and computations hereunder or
thereunder (including under Section 7.2.4) shall be made, in accordance with,
those generally accepted accounting principles ("GAAP") applied in the
preparation of the financial statements referred to in clause (a) of Section
5.1.9. Unless otherwise expressly provided, all financial covenants and defined
financial terms shall be computed on a consolidated basis for the Borrower and
its Subsidiaries, in each case without duplication. If any preparation in the
financial statements referred to in Section 7.1.1 hereafter occasioned by the
promulgation of rules, regulations, pronouncements and opinions by or required
by the Financial Accounting Standards Board or the American Institute of
Certified Public Accountants (or successors thereto or agencies with similar
functions) result in a change in any results, amounts, calculations, ratios,
standards or terms found in this Agreement or any Loan Document from those which
would be derived or be applicable absent such changes, the Borrower may reflect
such changes in the financial statements and certificates required to be
delivered pursuant to Section 7.1.1, but computations made to determine
compliance with financial covenants, including Section 7.2.4, shall be made
without giving effect to any such changes.
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ARTICLE II
COMMITMENTS, BORROWING AND ISSUANCE
PROCEDURES, NOTES AND LETTERS OF CREDIT
SECTION 2.1. Commitments. On the terms and subject to the conditions of
this Agreement (including Sections 2.1.4, 2.1.5 and Article V),
(a) each Lender severally agrees to make Loans pursuant to the
Commitments described in this Section 2.1; and
(b) the Issuer severally agrees that it will issue Letters of
Credit pursuant to Section 2.1.2, and each other Lender that has a
Commitment severally agrees that it will purchase participation
interests in such Letters of Credit pursuant to Section 2.6.1.
SECTION 2.1.1. Commitment of Each Lender. From time to time on any
Business Day occurring prior to the Commitment Termination Date, each Lender
will make loans (relative to such Lender, its "Loans") to the Borrower equal to
such Lender's Percentage of the aggregate amount of each Borrowing requested by
the Borrower to be made on such day. The commitment of each such Lender
described in this Section 2.1.1 is herein referred to as its "Commitment". On
the terms and subject to the conditions hereof, the Borrower may from time to
time borrow, prepay and reborrow Loans.
SECTION 2.1.2. Letter of Credit Commitment. From time to time on any
Business Day occurring prior to the Commitment Termination Date, the Issuer will
(a) issue one or more standby or documentary letters of credit
(relative to such Issuer, its "Letter of Credit") for the account of the
Borrower in the Stated Amount requested by the Borrower on such day; or
(b) extend the Stated Expiry Date of an existing standby Letter
of Credit previously issued hereunder to a date not later than the
earlier of (i) the Commitment Termination Date and (ii) one year from
the date of such
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extension.
SECTION 2.1.3. Lenders Not Permitted or Required to Make Loans. No
Lender shall be permitted or required to make any Loan if, after giving effect
thereto,
(a) the Adjusted Commitment Amount would exceed the lesser of (i)
the then existing Revolving Loan Commitment Amount, (ii) the then
existing Borrowing Base and (iii) on or prior to the satisfaction in
full of the Borrower's obligations under the Post-Closing Events Letter,
$50,000,000; or
(b) such Lender's Percentage of the Adjusted Commitment Amount
would exceed such Lender's Percentage of the lesser of (i) the then
existing Revolving Loan Commitment Amount, (ii) the then existing
Borrowing Base and (iii) on or prior to the satisfaction in full of the
Borrower's obligations under the Post-Closing Events Letter,
$50,000,000.
SECTION 2.1.4. Issuer Not Permitted or Required to Issue Letters of
Credit. No Issuer shall be permitted or required to issue any Letter of Credit
if, after giving effect thereto,
(a) the aggregate amount of all Letter of Credit Outstandings
would exceed the Letter of Credit Commitment Amount; or
(b) the Adjusted Commitment Amount would exceed the lesser of
the then existing (i) Revolving Loan Commitment Amount and (ii)
Borrowing Base.
SECTION 2.2. Reduction of the Commitment Amount. The Borrower may, from
time to time on any Business Day occurring after the Effective Date, voluntarily
reduce the amount of the Commitment Amount or the Letter of Credit Commitment
Amount on the Business Day so specified by the Borrower; provided, however, that
all such reductions shall require at least three Business Days' prior notice to
the Administrative Agent and be permanent, and any partial reduction of any
Commitment Amount shall be in a minimum amount of $2,500,000 and in an integral
multiple of $100,000.
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SECTION 2.3. Borrowing Procedures. By delivering a Borrowing Request to
the Administrative Agent on or before 12:00 noon, New York City time, on a
Business Day, the Borrower may from time to time irrevocably request, in the
case of Base Rate Loans, or on not less than three Business Days' notice in the
case of LIBO Rate Loans, and in either case not more than five Business Days'
notice, that a Borrowing be made in a minimum amount of $1,000,000 and an
integral multiple of $100,000, or in the unused amount of the applicable
Commitment; provided, however, that all Loans made on the Effective Date (if
any) shall be made as Base Rate Loans. On the terms and subject to the
conditions of this Agreement, each Borrowing shall be comprised of the type of
Loans, and shall be made on the Business Day, specified in such Borrowing
Request. On or before 11:00 a.m. (New York City time) on such Business Day each
Lender shall deposit with the Administrative Agent same day funds in an amount
equal to such Lender's Percentage of the requested Borrowing. Such deposit will
be made to an account which the Administrative Agent shall specify from time to
time by notice to the Lenders. To the extent funds are received from the
Lenders, and subject to Section 9.2 to the extent funds are not received from
any Lender, the Administrative Agent shall make such funds available to the
Borrower by wire transfer to the accounts the Borrower shall have specified in
its Borrowing Request. No Lender's obligation to make any Loan shall be affected
by any other Lender's failure to make any Loan.
SECTION 2.4. Continuation and Conversion Elections. By delivering a
Continuation/Conversion Notice to the Administrative Agent on or before 12:00
noon, New York City time, on a Business Day, the Borrower may from time to time
irrevocably elect, on not less than three Business Days' notice nor more than
five Business Days' notice, that all, or any portion in an aggregate minimum
amount of $1,000,000 and an integral multiple of $100,000 of, Loans be, in the
case of Base Rate Loans, converted into LIBO Rate Loans or in the case of LIBO
Rate Loans, be converted into a Base Rate Loan or continued as a LIBO Rate Loan
(in the absence of delivery of a Continuation/ Conversion Notice with respect to
any LIBO Rate Loan at least three Business Days before the last day of the then
current Interest Period with respect thereto, such LIBO Rate Loan shall, on such
last day, automatically convert to a Base Rate Loan); provided, however, that
(i) each such conversion or continuation shall be pro rated among the
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applicable outstanding Loans of all Lenders, and (ii) no portion of the
outstanding principal amount of any Loans may be continued as, or be converted
into, LIBO Rate Loans when any Default has occurred and is continuing.
SECTION 2.5. Funding. Each Lender may, if it so elects, fulfill its
obligation to make, continue or convert LIBO Rate Loans hereunder by causing one
of its foreign branches or Affiliates (or an international banking facility
created by such Lender) to make or maintain such LIBO Rate Loan; provided,
however, that such LIBO Rate Loan shall nonetheless be deemed to have been made
and to be held by such Lender, the Borrower shall not be responsible to
reimburse the Lender for any increased cost, tax or other amount incurred, paid
or payable, or any other loss realized as a result thereof, and the obligation
of the Borrower to repay such LIBO Rate Loan shall nevertheless be to such
Lender for the account of such foreign branch, Affiliate or international
banking facility. In addition, the Borrower hereby consents and agrees that, for
purposes of any determination to be made for purposes of Section 4.1, 4.2, 4.3
or 4.4, it shall be conclusively assumed that each Lender elected to fund all
LIBO Rate Loans by purchasing Dollar deposits in its LIBOR Office's interbank
eurodollar market.
SECTION 2.6. Issuance Procedures. By delivering to the Administrative
Agent an Issuance Request on or before 12:00 noon, New York City time, on a
Business Day, the Borrower may, from time to time irrevocably request, on not
less than three nor more than ten Business Days' notice, in the case of an
issuance of a Letter of Credit for the account of the Borrower, and not less
than three Business Days' prior notice, in the case of a request for the
extension of the Stated Expiry Date of a Letter of Credit, that the Issuer
issue, or extend the Stated Expiry Date of, as the case may be, an irrevocable
Letter of Credit in such form as may be requested by the Borrower and approved
by the Issuer, solely for the purposes described in Section 7.1.10. Each Letter
of Credit shall by its terms be stated to expire on a date (its "Stated Expiry
Date") no later than the earlier to occur of (i) the Commitment Termination Date
or (ii) one year from the date of its issuance. The Issuer will make available
to the beneficiary thereof the original of each Letter of Credit which it issues
hereunder.
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SECTION 2.6.1. Other Lenders' Participation. Upon the issuance of each
Letter of Credit issued by an Issuer pursuant hereto, and without further
action, each Lender (other than the Issuer) that has a Commitment shall be
deemed to have irrevocably purchased, to the extent of its Percentage, a
participation interest in such Letter of Credit (including the Contingent
Liability and any Reimbursement Obligation with respect thereto), and such
Lender shall, to the extent of its Percentage, be responsible for reimbursing
promptly (and in any event within one Business Day) the Issuer for Reimbursement
Obligations which have not been reimbursed by the Borrower in accordance with
Section 2.6.3. In addition, such Lender shall, to the extent of its Percentage,
be entitled to receive a ratable portion of the Letter of Credit fees payable
pursuant to Section 3.3.3 with respect to each Letter of Credit (other than the
issuance fees payable to the Issuer of such Letter of Credit pursuant to the
last sentence of Section 3.3.3) and of interest payable pursuant to Section 3.2
with respect to any Reimbursement Obligation. To the extent that any Lender has
reimbursed any Issuer for a Disbursement as required by this Section, such
Lender shall be entitled to receive its ratable portion of any amounts
subsequently received (from the Borrower or otherwise) in respect of such
Disbursement.
SECTION 2.6.2. Disbursements. The Issuer will notify the Borrower and
the Administrative Agent promptly of the presentment for payment of any Letter
of Credit issued by the Issuer, together with notice of the date (the
"Disbursement Date") such payment shall be made (each such payment, a
"Disbursement"). Subject to the terms and provisions of such Letter of Credit
and this Agreement, the Issuer shall make such payment to the beneficiary (or
its designee) of such Letter of Credit. Prior to 12:00 noon, New York City time,
on the first Business Day following the Disbursement Date, the Borrower will
reimburse the Administrative Agent, for the account of the Issuer, for all
amounts which the Issuer has disbursed under such Letter of Credit, together
with interest thereon at a rate per annum equal to the rate per annum then in
effect for Base Rate Loans (with the then Applicable Margin accruing on such
amount) pursuant to Section 3.2 for the period from the Disbursement Date
through the date of such reimbursement.
SECTION 2.6.3. Reimbursement. The obligation (a
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"Reimbursement Obligation") of the Borrower under Section 2.6.2 to reimburse the
Issuer with respect to each Disbursement (including interest thereon), and, upon
the failure of the Borrower to reimburse the Issuer, each Lender's obligation
under Section 2.6.1 to reimburse the Issuer, shall be absolute and unconditional
under any and all circumstances and irrespective of any setoff, counterclaim or
defense to payment which the Borrower or such Lender, as the case may be, may
have or have had against the Issuer or any such Lender, including any defense
based upon the failure of any Disbursement to conform to the terms of the
applicable Letter of Credit (if, in the Issuer's good faith opinion, such
Disbursement is determined to be appropriate) or any non-application or
misapplication by the beneficiary of the proceeds of such Letter of Credit;
provided, however, that after paying in full its Reimbursement Obligation
hereunder, nothing herein shall adversely affect the right of the Borrower or
such Lender, as the case may be, to commence any proceeding against the Issuer
for any wrongful Disbursement made by the Issuer under a Letter of Credit as a
result of acts or omissions constituting gross negligence or wilful misconduct
on the part of such Issuer.
SECTION 2.6.4. Deemed Disbursements. Upon the occurrence and during the
continuation of any Default of the type described in clauses (a), (b), (c) or
(d) of Section 8.1.9 or, upon written notice from the Administrative Agent given
at the direction of the Required Lenders, upon the occurrence and during the
continuation of any other Event of Default,
(a) an amount equal to that portion of all Letter of Credit
Outstandings attributable to the then aggregate amount which is undrawn
and available under all Letters of Credit issued and outstanding
hereunder shall, without demand upon or notice to the Borrower, be
deemed to have been paid or disbursed by the Issuer under such Letters
of Credit (notwithstanding that such amount may not in fact have been so
paid or disbursed); and
(b) upon notification by the Administrative Agent to the Borrower
of its obligations under this Section, the Borrower shall be immediately
obligated to reimburse the Issuer for the amount deemed to have been so
paid or disbursed by such Issuer.
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Any amounts so payable by the Borrower pursuant to this Section shall be
deposited in immediately available funds with the Administrative Agent or a
Lender and held in an interest bearing account as collateral security for the
Obligations in connection with the Letters of Credit issued by the Issuers. At
such time when the Defaults or Events of Default giving rise to the deemed
disbursements hereunder shall have been cured or waived, the Administrative
Agent shall return to the Borrower all amounts then on deposit with the
Administrative Agent or a Lender pursuant to this Section which have not been
applied to the partial satisfaction of such Obligations.
SECTION 2.6.5. Nature of Reimbursement Obligations. The Borrower and, to
the extent set forth in Section 2.6.1, each Lender shall assume all risks of the
acts, omissions or misuse of any Letter of Credit by the beneficiary thereof.
The Issuer (except to the extent of its own gross negligence or wilful
misconduct) shall not be responsible for:
(a) the form, validity, sufficiency, accuracy, genuineness or
legal effect of any Letter of Credit or any document submitted by any
party in connection with the application for and issuance of a 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 form, validity, sufficiency, accuracy, genuineness or
legal effect of any instrument transferring or assigning or purporting
to transfer or assign a Letter of Credit or the rights or benefits
thereunder or the proceeds thereof in whole or in part, which may prove
to be invalid or ineffective for any reason;
(c) failure of the beneficiary to comply fully with conditions
required in order to demand payment under a Letter of Credit;
(d) errors, omissions, interruptions or delays in transmission
or delivery of any messages, by mail, cable, telegraph, telex or
otherwise; or
(e) any loss or delay in the transmission or otherwise of any
document or draft required in order to make a
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Disbursement under a Letter of Credit.
None of the foregoing shall affect, impair or prevent the vesting of any of the
rights or powers granted to the Issuer or any Lender. In furtherance and
extension and not in limitation or derogation of any of the foregoing, any
action taken or omitted to be taken by an Issuer in good faith (and not
constituting gross negligence or willful misconduct) shall be binding upon the
Borrower and each such Lender, and shall not put such Issuer under any resulting
liability to the Borrower or any such Lender, as the case may be.
SECTION 2.7. Notes. Each Lender's Loans shall be evidenced by a Note
payable to the order of such Lender in a maximum principal amount equal to such
Lender's Percentage of the original Commitment Amount. The Borrower hereby
irrevocably authorizes each Lender to make (or cause to be made) appropriate
notations on the grid attached to such Lender's Note (or on any continuation of
such grid), which notations, if made, shall evidence, inter alia, the date of,
the outstanding principal of, and the interest rate and Interest Period
applicable to the Loans evidenced thereby. Such notations shall be conclusive
and binding on the Borrower absent manifest error; provided, however, that the
failure of any Lender to make any such notations shall not limit or otherwise
affect any Obligations of the Borrower or any other Obligor.
SECTION 2.8. Extension of Commitment Termination Date and Maturity of
Loans. Each of (i) the Commitment Termination Date and (ii) the obligation,
pursuant to Section 3.1, to make a mandatory repayment of the outstanding
principal amount of Loans on the Stated Maturity Date, shall be subject to
extension as set forth in this Section 2.8.
SECTION 2.8.1. Request for Extension of Commitment Termination Date and
Maturity of Loans. Any term or provision of this Agreement to the contrary
notwithstanding, no earlier than 70 days nor later than 45 days prior to the
one-year anniversary of the date of the initial Credit Extension, the Borrower
may, by delivery of a duly completed Extension Request to the Administrative
Agent, irrevocably request that each Lender extend for one additional 365-day
period (such period to commence on the day immediately following the then
existing Commitment
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Termination Date) the Commitment Termination Date relating to such Lender's
Commitment; provided, that the Commitment Termination Date shall not in any
event be extended beyond March 14, 2003 (or if such day is not a Business Day,
the next preceding Business Day). The failure of the Borrower to request such an
extension within the time set forth above shall automatically terminate the
Borrower's rights to request such extension.
SECTION 2.8.2. Consent to Extension of Commitment Termination Date and
Maturity of Loans. (a) The Administrative Agent shall, promptly after receipt of
any Extension Request pursuant to Section 2.8.1, notify each Lender thereof by
providing them a copy of such Extension Request.
(b) Each Lender shall within 20 Business Days of receipt of the notice
described in clause (a), notify the Administrative Agent whether or not it
consents to the request of the Borrower set forth in such Extension Request,
such consent to be in the sole discretion of each Lender. If any Lender does not
notify the Administrative Agent of its decision within such 20 Business Days
period, such Lender shall be deemed not to have consented to the Borrower's
request for an extension of the Commitment Termination Date.
(c) The Commitment Termination Date shall be extended for one additional
period of 365 days from the original Commitment Termination Date if all the
Lenders agree to such extension. The Administrative Agent shall promptly notify
the Borrower whether the Lenders have consented to an extension of the
Commitment Termination Date.
ARTICLE III
REPAYMENTS, PREPAYMENTS, INTEREST AND FEES
SECTION 3.1. Repayments and Prepayments. The Borrower shall repay in
full the unpaid principal amount of each Loan upon the Stated Maturity Date
therefor. Prior thereto, the Borrower
(a) may, from time to time on any Business Day, make a voluntary
prepayment, in whole or in part, of the
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outstanding principal amount of any Loans; provided, however, that
(i) any such prepayment shall be made pro rata among
Loans of the same type and, if applicable, having the same
Interest Period of all Lenders;
(ii) any LIBO Rate Loan that is repaid other than on the
last day of the Interest Period for such Loan shall be subject
to Section 4.4;
(iii) all such voluntary prepayments shall require
written notice to the Administrative Agent on or before 11:00
a.m., New York time, on the date of such prepayment; and
(iv) all such voluntary partial prepayments shall be in
an aggregate minimum amount of $1,000,000 and integral multiples
of $100,000;
(b) shall, on each date when the aggregate amount of Revolving
Loans and Letter of Credit Outstanding exceeds the least of (x) the
Adjusted Commitment Amount, (y) the Borrowing Base and (z) the Revolving
Loan Commitment, make a mandatory prepayment of all the Loans to be
applied as set forth below and, if necessary, give cash collateral to
the Administrative Agent or a Lender on terms reasonably satisfactory to
the Administrative Agent to be held in an interest bearing account to
collateralize Letter of Credit Outstandings, in an aggregate amount
equal to such excess;
(c) shall, no later than three Business Days following the
receipt of any Net Disposition Proceeds, deliver to the Administrative
Agent a calculation of the amount of such Net Disposition Proceeds and,
make a mandatory prepayment of the Loans in an amount equal to 100% of
such Net Disposition Proceeds; and
(d) shall, immediately upon any acceleration of the Stated
Maturity Date of any Obligations pursuant to Section 8.2 or Section 8.3,
repay all the Loans and if necessary, provide cash collateral to the
Administrative Agent to be held by the Administrative Agent in an
interest
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bearing account to collateralize Letter of Credit Outstandings, unless,
pursuant to Section 8.3, only a portion of all Obligations is so
accelerated (in which case the portion so accelerated shall be so
prepaid or cash collateralized).
Each prepayment of any Loans made pursuant to this Section shall be without
premium or penalty, except as may be required by Section 4.4. No prepayment of
principal of any Loans shall cause a reduction in the Commitment Amount. Each
prepayment or repayment of the principal of the Loans shall be applied, to the
extent of such prepayment or repayment, first, to the principal amount thereof
being maintained as Base Rate Loans, and second, to the principal amount thereof
being maintained as LIBO Rate Loans. Mandatory prepayments of LIBO Rate Loans
made pursuant to clause (b) above shall, at the Borrower's option, so long as no
Default has occurred and is continuing, either (i) be applied to LIBO Rate Loans
(subject to the provisions of Section 4.4), or (ii) after application to any
Base Rate Loans, be deposited with the Administrative Agent or a Lender in an
interest bearing account as cash collateral for such LIBO Rate Loans on terms
reasonably satisfactory to the Administrative Agent and shall thereafter be
applied in the order of the Interest Periods next ending most closely to the
date of receipt of the proceeds in respect of which such prepayment is required
to be made and on the last day of each such Interest Period (together with the
payment of all interest that is due on the last day of each such Interest Period
pursuant to clause (c) of Section 3.2.3).
SECTION 3.2. Interest Provisions. Interest on the outstanding principal
amount of Loans shall accrue and be payable in accordance with this Section 3.2.
SECTION 3.2.1. Rates. Pursuant to an appropriately delivered Borrowing
Request or Continuation/Conversion Notice, the Borrower may elect that Loans
comprising a Borrowing accrue interest at a rate per annum:
(a) on that portion maintained from time to time as a Base Rate
Loan, equal to the sum of the Alternate Base Rate from time to time in
effect plus the Applicable Margin; and
(b) on that portion maintained as a LIBO Rate Loan,
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during each Interest Period applicable thereto, equal to the sum of the
LIBO Rate (Reserve Adjusted) for such Interest Period plus the
Applicable Margin.
All LIBO Rate Loans shall bear interest from and including the first day
of the applicable Interest Period to (but not including) the last day of such
Interest Period at the interest rate determined as applicable to such LIBO Rate
Loan.
SECTION 3.2.2. Post-Maturity Rates. Unless otherwise approved by the
Required Lenders, after the date any principal amount of any Loan or
Reimbursement Obligation is due and payable (whether on the Stated Maturity
Date, upon acceleration or otherwise), or after any other Obligation of the
Borrower shall have become due and payable, the Borrower shall pay interest
(after as well as before judgment) on such amounts at a rate per annum equal to
the rate (including any Applicable Margin) applicable to such Loan or
Reimbursement Obligation from time to time in effect plus an additional margin
of 2%, or, in the case of any other Obligation, at a rate per annum equal to the
Alternate Base Rate plus a margin of 2%.
SECTION 3.2.3. Payment Dates. Interest accrued on each Loan shall be
payable, without duplication:
(a) on the Stated Maturity Date therefor;
(b) with respect to Base Rate Loans, on each Monthly Payment
Date occurring after the Effective Date;
(c) with respect to LIBO Rate Loans, on the last Business Day of
each applicable Interest Period (and, if such Interest Period shall
exceed three months, on the third-month anniversary of such Interest
Period); and
(d) on that portion of any Loans the Stated Maturity Date of
which is accelerated pursuant to Section 8.2 or Section 8.3, immediately
upon such acceleration.
Interest accrued on Loans or other monetary Obligations arising under this
Agreement or any other Loan Document after the date such amount is due and
payable (whether on the Stated Maturity Date, upon acceleration or otherwise)
shall be payable upon
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demand.
SECTION 3.3. Fees. The Borrower agrees to pay the fees set forth in this
Section 3.3. All such fees shall be non-refundable.
SECTION 3.3.1. Commitment Fee. The Borrower agrees to pay to the
Administrative Agent for the account of each Lender, for the period (including
any portion thereof when any of its Commitments are suspended by reason of the
Borrower's inability to satisfy any condition of Article V) commencing on the
Effective Date and continuing through the Commitment Termination Date, a
commitment fee at a rate per annum in an amount equal to the Applicable
Commitment Fee Margin, in each case on such Lender's Percentage of the sum of
the average daily unused portion of the Commitment Amount (net of Letter of
Credit Outstandings). All commitment fees payable pursuant to this Section shall
be calculated on a year comprised of 360 days and payable by the Borrower in
arrears on each Quarterly Payment Date, commencing with the first Quarterly
Payment Date following the Effective Date, and on the Commitment Termination
Date. The making of any loan or the issuance of any letter of credit in
connection with the Canadian Unsecured Indebtedness shall constitute usage of
the Commitment for purposes of calculating the commitment fee.
SECTION 3.3.2. Administrative Agent Fee. The Borrower agrees to pay to
the Administrative Agent, for its own account, the fees in the amounts and on
the dates set forth in the Fee Letter.
SECTION 3.3.3. Letter of Credit Fee. The Borrower agrees to pay to the
Administrative Agent, for the pro rata account of the Issuer and each other
Lender, a Letter of Credit fee at a rate per annum in an amount equal to the
then Applicable Margin for Loans maintained as LIBO Rate Loans, in each case on
such Lender's Percentage of the sum of the average daily amount of Letter of
Credit Outstandings, such fee being payable quarterly in arrears on each
Quarterly Payment Date. The Borrower further agrees to pay to the Issuer an
issuance fee in the amount and on the dates set forth in the Fee Letter.
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ARTICLE IV
CERTAIN LIBO RATE AND OTHER PROVISIONS
SECTION 4.1. LIBO Rate Lending Unlawful. If any Lender shall determine
(which determination shall, upon notice thereof to the Borrower and the Lenders,
be conclusive and binding on the Borrower) that the introduction of or any
change in or in the interpretation of any law makes it unlawful, or any
Regulatory Authority asserts that it is unlawful, for such Lender to make,
continue or maintain any Loan as, or to convert any Loan into, a LIBO Rate Loan,
the obligations of such Lender to make, continue, maintain or convert any such
LIBO Rate Loan shall, upon such determination, forthwith be suspended until such
Lender shall notify the Administrative Agent that the circumstances causing such
suspension no longer exist, and all outstanding LIBO Rate Loans shall
automatically convert into Base Rate Loans at the end of the then current
Interest Periods with respect thereto, or sooner if required by such law or
assertion.
SECTION 4.2. Deposits Unavailable. If the Administrative Agent shall
have determined that
(a) with respect to any proposed LIBO Rate Loan, Dollar deposits
in the relevant amount and for the relevant Interest Period are not
available in the relevant market; or
(b) by reason of circumstances affecting the relevant market,
adequate means do not exist for ascertaining the interest rate
applicable hereunder to LIBO Rate Loans,
then, upon notice from the Administrative Agent to the Borrower and the Lenders,
the obligations of all Lenders under Section 2.3 and Section 2.4 to make or
continue any Loans as, or to convert any Loans into, LIBO Rate Loans shall
forthwith be suspended until the Administrative Agent shall notify the Borrower
and the Lenders that the circumstances causing such suspension no longer exist.
SECTION 4.3. Increased LIBO Rate Loan Costs, etc. The Borrower agrees to
reimburse each Lender for any increase in the cost to such Lender of, or any
reduction in the amount of any sum receivable by such Lender in respect of,
making, continuing or
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maintaining (or of its obligation to make, continue or maintain) any Loans as,
or of converting (or of its obligation to convert) any Loans into, LIBO Rate
Loans. Such Lender shall promptly notify the Administrative Agent and the
Borrower in writing of the occurrence of any such event, such notice to state,
in reasonable detail, the reasons therefor and the additional amount required
fully to compensate such Lender for such increased cost or reduced amount. Such
additional amounts shall be payable by the Borrower directly to such Lender
within five days of its receipt of such notice, and such notice shall, in the
absence of manifest error, be conclusive and binding on the Borrower.
SECTION 4.4. Funding Losses. In the event any Lender shall incur any
loss or expense (including any loss or expense incurred by reason of the
liquidation or reemployment of deposits or other funds acquired by such Lender
to make, continue or maintain any portion of the principal amount of any Loan
as, or to convert any portion of the principal amount of any Loan into, a LIBO
Rate Loan) as a result of
(a) any conversion or repayment or prepayment of the principal
amount of any LIBO Rate Loans on a date other than the scheduled last
day of the Interest Period applicable thereto, whether pursuant to
Section 3.1 or otherwise;
(b) any Loans not being made as LIBO Rate Loans in accordance
with the Borrowing Request therefor; or
(c) any Loans not being continued as, or converted into, LIBO
Rate Loans in accordance with the Continuation/ Conversion Notice
therefor,
then, upon the written notice of such Lender to the Borrower (with a copy to the
Administrative Agent), the Borrower shall, within five days of its receipt
thereof, pay directly to such Lender such amount as will (in the reasonable
determination of such Lender) reimburse such Lender for such loss or expense.
Such written notice (which shall include calculations in reasonable detail)
shall, in the absence of manifest error, be conclusive and binding on the
Borrower.
SECTION 4.5. Increased Capital Costs. If any change in, or the
introduction, adoption, effectiveness, interpretation,
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reinterpretation or phase-in of, any law or regulation, directive, guideline,
decision or request (whether or not having the force of law) of any court or
Regulatory Authority, affects the amount of capital required or expected to be
maintained by any Lender or any Person controlling such Lender, and such Lender
determines (in good faith but in its sole and absolute discretion) that the rate
of return on its or such controlling Person's capital as a consequence of the
Commitments or the Loans made, or the Letters of Credit participated in, by such
Lender is reduced to a level below that which such Lender or such controlling
Person could have achieved but for the occurrence of any such circumstance,
then, in any such case upon notice from time to time by such Lender to the
Borrower, the Borrower shall promptly pay directly to such Lender additional
amounts sufficient to compensate such Lender or such controlling Person for such
reduction in rate of return. A statement of such Lender as to any such
additional amount or amounts (including calculations thereof in reasonable
detail) shall, in the absence of manifest error, be conclusive and binding on
the Borrower. In determining such amount, such Lender may use any method of
averaging and attribution that it (in good faith but in its sole and absolute
discretion) shall deem applicable to its customers generally.
SECTION 4.6. Taxes. (a) All payments by the Borrower of principal of,
and interest on, or other amounts in respect of, the Loans and all other amounts
payable hereunder (including fees) and the Notes shall be made free and clear of
and without deduction for any Taxes, except to the extent that any such
withholdings or deductions are required by applicable law, rule or regulations.
In the event that any such withholdings or deductions are required by applicable
law, rule or regulations in respect of any Taxes (including Taxes on account of
any additional amount or amounts described in clause (a)(iii) below), then the
Borrower will
(i) pay directly to the relevant authority the full amount of
Taxes required to be so withheld or deducted;
(ii) promptly forward to the Administrative Agent an official
receipt or duly certified copy of such official receipt or such other
documentation satisfactory to the Administrative Agent evidencing such
payment to such
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authority; and
(iii) subject to paragraph (c) below, if such Taxes are Covered
Taxes, pay to the Administrative Agent for the account of the Lenders
such additional amount or amounts as is necessary to ensure that the net
amount actually received by each Lender will equal the full amount such
Lender would have received had no such withholding or deduction been
required.
In addition, subject to paragraph (c) below, if the Administrative Agent or any
Lender is required by law at any time to pay any Covered Taxes or to make any
payment on account of Covered Taxes on, in relation to or calculated by
reference to any sum received or receivable in connection with the Loans or any
Note or any other amount payable hereunder or under any Note, or any liability
for Covered Taxes in respect of any such sum is imposed, levied or assessed
against any Lender or the Administrative Agent, then the Borrower will indemnify
each such Lender and the Administrative Agent for the full amount of Covered
Taxes (including Covered Taxes attributable to any payment on account of such
indemnification and any interest, penalties and costs with respect to any such
Covered Taxes) actually (or, in the event such Covered Taxes are directly paid
by the Borrower, deemed) paid by such Lender or the Administrative Agent (as the
case may be), whether or not such Covered Taxes were correctly or legally
asserted. Such indemnification shall be made within 30 days of the demand of the
Lender or the Administrative Agent therefor. If the Borrower pays any Covered
Taxes as required by the first sentence of this paragraph, then the Borrower
will promptly forward to the Administrative Agent an official receipt or duly
certified copy of such official receipt or such other documentation satisfactory
to the Administrative Agent evidencing such payment of Covered Taxes to the
relevant taxing authority. In addition, if the Borrower fails to pay any Taxes
when due to the appropriate taxing authority or fails to remit to the
Administrative Agent, for the account of the respective Lenders, the required
receipts or other required documentary evidence of its payment of any Taxes, the
Borrower shall indemnify the Lenders for any incremental Taxes that may become
payable by any Lender as a result of any such failure. For purposes of this
Section 4.6, the transfer by the Administrative Agent or any Lender to or for
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the account of any Lender of any sum received from the Borrower on account of
amounts required to be paid by the Borrower hereunder in respect of Covered
Taxes imposed with respect to the recipient shall be deemed a payment by the
Borrower of such amounts.
(b) Each Lender that is an original signatory hereto and is not a U.S.
Person (and each Person that is not a U.S. Person which becomes a Lender by
assignment, transfer or participation pursuant to Section 10.11 hereof) and the
Administrative Agent (and each Person that is not a U.S. Person that becomes the
Administrative Agent by appointment pursuant to Section 9.4 hereof), agrees
severally (but not jointly) that, on or prior to the date of the initial Credit
Extension (or such assignment, transfer or appointment, as the case may be) it
will in each case deliver to the Borrower and the Administrative Agent either
(A) two duly completed copies of United States Internal Revenue Service Form
1001 or 4224 (or applicable successor form) certifying in each case that such
Person is entitled to receive payments under this Agreement and the Notes
payable to it without deduction or withholding of any United States federal
income taxes or (B) in the case of an assignee Lender that is not a "bank"
within the meaning of Section 881(c)(3)(A) of the Code and that does not comply
with clause (A) of this paragraph (b), a statement to the effect that such
assignee Lender is eligible to claim exemption from United States withholding
tax under Section 871(h) or Section 881(c) of the Code (including, without
limitation, statements that such assignee Lender is not a 10- percent
shareholder (within the meaning of Section 871(h)(3)(B) of the Code) of the
Borrower and is not a controlled foreign corporation related to the Borrower
(within the meaning of Section 864(d)(4) of the Code)) and two duly completed
and signed original copies of Internal Revenue Service Form W-8. Each Lender
shall (if not otherwise required to do so pursuant to clause (B) of this
paragraph (b)) deliver to the Borrower two duly completed and signed original
copies of Internal Revenue Service Form W-8 or W-9 entitling such Lender to
receive a complete exemption from United States back-up withholding tax.
Each Person who delivers to the Borrower and the Administrative Agent a Form
W-8, W-9, 1001 or 4224, or applicable successor form, pursuant to this clause,
further undertakes to deliver to the Borrower and the Administrative Agent two
further copies of
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said Form W-8, W-9, 1001, 4224, or applicable successor form on or before the
date that any such form expires or becomes obsolete unless in any such case any
change in law, rule, regulation, treaty or directive, or in the interpretation
or application thereof (a "Law Change"), has occurred on or prior to the date on
which any such delivery would otherwise be required, which Law Change renders
any such form inapplicable or which would prevent such Person from duly
completing and delivering any such form with respect to it. If a Lender who
previously has delivered any Internal Revenue Service Forms referred to above
determines that it is unable subsequently to submit to the Borrower any such
Forms, or that it is required to withdraw or cancel any such Forms, then such
Lender shall promptly notify the Borrower of that fact.
(c) The Borrower shall not be obligated to make any payment or
indemnification pursuant to paragraph (a) above in respect of any U.S. Federal
withholding tax imposed in respect of a Non-U.S.
Lender to the extent that:
(i) the obligation to withhold U.S. Federal withholding tax with
respect to such Non-U.S. Lender existed on the date such Non-U.S. Lender became
a party to this Agreement; provided, however, that this clause (i) shall not
apply (x) to any such Non-U.S. Lender that becomes a Lender after the date
hereof following a request of the Borrower that the transferee of the Lender's
interest hereunder dispose of such interest or (y) to the extent that the
payment or indemnification to which such Non-U.S. Lender would be entitled
(without regard to this clause (i)) does not exceed the payment or
indemnification that the Person from whom such Non-U.S. Lender acquired its
interest would have been entitled to receive in the absence of such acquisition;
or
(ii) the obligation to make such payment or indemnification would
not have arisen but for a failure by such Non-U.S. Lender to comply with the
provisions of paragraph (b) above.
(d) If the Administrative Agent or any Lender determines in its sole
discretion (exercised in good faith) that it has received a refund in respect of
Taxes for which such Person has received a payment from the Borrower (or which
the Borrower paid directly to the relevant authority) pursuant to clause (a)
above,
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it shall promptly pay such refund to the Borrower; provided, however, that the
Borrower agrees to return such refund to the Administrative Agent or the
applicable Lender, as the case may be, promptly after it receives notice from
the applicable Lender that such Lender is required to return all or any portion
of such refund to the relevant taxing authority. Each Lender may, in its sole
discretion (exercised in good faith), determine the order of utilization of any
payments to any governmental authority in satisfaction of its liability for
Taxes. Nothing in this clause (d) shall be construed to require any Lender to
disclose any of its tax returns or other confidential or proprietary information
to the Borrower or to conduct its business or to arrange or to alter in any
respect its tax or financial affairs so that it is entitled to receive any
refund of any Taxes.
(e) The agreements in this Section shall survive the termination of this
Agreement and the payment of the Notes and all other amounts payable hereunder.
SECTION 4.7. Payments, Computations, etc. Unless otherwise expressly
provided, all payments by the Borrower pursuant to this Agreement, the Notes,
each Letter of Credit or any other Loan Document shall be made by the Borrower
to the Administrative Agent for the pro rata account of the Lenders entitled to
receive such payment. All such payments required to be made to the
Administrative Agent shall be made, without setoff, deduction or counterclaim,
not later than 11:00 a.m., New York City time, on the date due, in same day or
immediately available funds, to such account as the Administrative Agent shall
specify from time to time by written notice to the Borrower. Funds received
after that time shall be deemed to have been received by the Administrative
Agent on the next succeeding Business Day. The Administrative Agent shall
promptly remit in same day funds to each Lender its share, if any, of such
payments received by the Administrative Agent for the account of such Lender.
All interest (including interest on LIBO Rate Loans) and fees shall be computed
on the basis of the actual number of days (including the first day but excluding
the last day) occurring during the period for which such interest or fee is
payable over a year comprised of 360 days (or, in the case of interest on a Base
Rate Loan (calculated at other than the Federal Funds Rate), 365 days or, if
appropriate, 366 days). Whenever any payment to be made shall otherwise be due
on a day which is not a Business Day, such
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payment shall (except as otherwise required by clause (c) of the definition of
the term "Interest Period") be made on the next succeeding Business Day and such
extension of time shall be included in computing interest and fees, if any, in
connection with such payment.
SECTION 4.8. Sharing of Payments. If any Lender shall obtain any payment
or other recovery (whether voluntary, involuntary, by application of setoff or
otherwise) on account of any Loan or Reimbursement Obligation (other than
pursuant to the terms of Section 4.3, 4.4, 4.5 or 4.6) in excess of its pro rata
share of payments then or therewith obtained by all Lenders, such Lender shall
purchase from the other Lenders such participations in Credit Extensions made by
them as shall be necessary to cause such purchasing Lender to share the excess
payment or other recovery ratably with each of them; provided, however, that if
all or any portion of the excess payment or other recovery is thereafter
recovered from such purchasing Lender, the purchase shall be rescinded and each
Lender which has sold a participation to the purchasing Lender shall repay to
the purchasing Lender the purchase price to the ratable extent of such recovery
together with an amount equal to such selling Lender's ratable share (according
to the proportion of
(a) the amount of such selling Lender's required repayment to
the purchasing Lender
to
(b) the total amount so recovered from the purchasing Lender)
of any interest or other amount paid or payable by the purchasing Lender in
respect of the total amount so recovered. The Borrower agrees that any Lender so
purchasing a participation from another Lender pursuant to this Section may, to
the fullest extent permitted by law, exercise all its rights of payment
(including pursuant to Section 4.9) with respect to such participation as fully
as if such Lender were the direct creditor of the Borrower in the amount of such
participation. If under any applicable bankruptcy, insolvency or other similar
law, any Lender receives a secured claim in lieu of a setoff to which this
Section applies, such Lender shall, to the extent practicable, exercise
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its rights in respect of such secured claim in a manner consistent with the
rights of the Lenders entitled under this Section to share in the benefits of
any recovery on such secured claim.
SECTION 4.9. Setoff. Each Lender shall, upon the occurrence and during
the continuance of any Default or Event of Default described in clauses (a)
through (d) of Section 8.1.9 or, with the consent of the Required Lenders, upon
the occurrence and during the continuance of any other Event of Default, have
the right to appropriate and apply to the payment of the Obligations owing to it
(whether or not then due), and (as security for such Obligations) the Borrower
hereby grants to each Lender a continuing security interest in, any and all
balances, credits, deposits, accounts or moneys of the Borrower then or
thereafter maintained with such Lender; provided, however, that any such
appropriation and application shall be subject to the provisions of Section 4.8.
Each Lender agrees promptly to notify the Borrower and the Administrative Agent
after any such setoff and application made by such Lender; provided, however,
that the failure to give such notice shall not affect the validity of such
setoff and application. The rights of each Lender under this Section are in
addition to other rights and remedies (including other rights of setoff under
applicable law or otherwise) which such Lender may have.
SECTION 4.10. Mitigation. Each Lender agrees that if it makes any demand
for payment under Sections 4.3, 4.4, 4.5, or 4.6, or if any adoption or change
of the type described in Section 4.1 shall occur with respect to it, it will use
reasonable efforts (consistent with its internal policy and legal and regulatory
restrictions and so long as such efforts would not be disadvantageous to it, as
determined in its sole discretion (exercised in good faith)) to designate a
different lending office if the making of such a designation would reduce or
obviate the need for the Borrower to make payments under Sections 4.3, 4.4, 4.5,
or 4.6, or would eliminate or reduce the effect of any adoption or change
described in Section 4.1.
SECTION 4.11. Replacement Lender. In the event that the Borrower becomes
obligated to pay any additional amounts to any Lender pursuant to Section 4.3 or
4.5 (which amounts are generally not due or payable to all Lenders generally
under such
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Sections) or such Lender is not able to make LIBO Rate Loans pursuant to Section
4.1, as a result of any event or condition described in any of such Sections,
then, unless such Lender has removed or cured the conditions creating the cause
of such obligation to pay such additional amounts, the Borrower may designate a
substitute lender (and such Lender agrees to be replaced by such substitute
Lender upon and in accordance with the terms set forth in this Section)
reasonably acceptable to the Administrative Agent (such lender herein called a
"Replacement Lender") to have assigned to it pursuant to Section 10.11.1, and to
purchase, such Lender's rights and obligations with respect to its entire Loans
and Commitment hereunder, without recourse to or warranty by, or expense to,
such Lender for a purchase price equal to the outstanding principal amount
payable to such Lender with respect to its Loans and Commitment hereunder, plus
any accrued and unpaid interest and accrued and unpaid fees owing to such Lender
in respect of such Lender's Loans and Commitment. Upon such assignment and
purchase by the Replacement Lender and payment of all other amounts owing to the
Lender being replaced hereunder, and the payment to the Administrative Agent of
the processing fee due to it under Section 10.11.1, such Lender shall no longer
be a party hereto or have any rights or obligations hereunder, and the
Replacement Lender shall succeed to the rights and obligations of such Lender
with respect to its Loans and Commitment hereunder; provided, that the rights of
such replaced Lender pursuant to Sections 4.3, 4.4, 4.5, 4.6, 10.3 and 10.4, and
the rights and obligations of such Lender pursuant to Article IX and Sections
10.3 and 10.4, shall survive any assignment described in this Section.
ARTICLE V
CONDITIONS TO CREDIT EXTENSIONS
SECTION 5.1. Initial Credit Extension. The obligations of the Lenders
and, if applicable, the Issuer to fund or make, as the case may be, the initial
Credit Extension shall be subject to the prior or concurrent satisfaction of
each of the conditions precedent set forth in this Section 5.1.
SECTION 5.1.1. Resolutions, etc. The Administrative Agent shall have
received from the Borrower and each other Obligor, as
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applicable, (i) a copy of a good standing certificate, dated a date reasonably
close to the Effective Date, for each such Person and (ii) a certificate, dated
the date of the initial Credit Extension and with counterparts for each Lender,
duly executed and delivered by such Person's Secretary or Assistant Secretary,
as to
(a) resolutions of each such Person's Board of Directors then in
full force and effect authorizing, to the extent relevant, the
execution, delivery and performance of this Agreement, the Notes, each
other Loan Document to be executed by such Person and the transactions
contemplated hereby and thereby;
(b) the incumbency and signatures of those of its officers
authorized to act with respect to this Agreement, the Notes and each
other Loan Document to be executed by such Person; and
(c) the full force and validity of each Organic Document of such
Person and copies thereof,
upon which certificates each Lender may conclusively rely until it shall have
received a further certificate of the Secretary, Assistant Secretary of any such
Person canceling or amending the prior certificate of such Person.
SECTION 5.1.2. Delivery of Notes. The Administrative Agent shall have
received, each Lender's Notes duly executed and delivered by an Authorized
Officer of the Borrower.
SECTION 5.1.3. Payment of Outstanding Indebtedness, etc. All
Indebtedness identified in Item 7.2.2(b) ("Indebtedness to be Paid") of the
Disclosure Schedule, together with all interest, all prepayment premiums and
other amounts due and payable with respect thereto, shall have been (or,
contemporaneously with the initial Credit Extension hereunder, will be) paid in
full from the proceeds of the Permitted Receivables Transaction and/or Loans and
the commitments in respect of such Indebtedness (including under the Existing
Credit Agreement) shall have been terminated, and all Liens securing payment of
any such Indebtedness (including under the Existing Credit Agreement) shall have
been released and the Administrative Agent shall have
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received all Uniform Commercial Code Form UCC-3 termination statements or other
instruments as may be suitable or appropriate in connection therewith. The
Administrative Agent shall have received executed copies of "pay-off" letters
with respect thereto (including as to the payment in full of all Indebtedness
under the Existing Credit Agreement) in form and substance satisfactory to the
Administrative Agent.
SECTION 5.1.4. Pledge Agreements. The Administrative Agent shall have
received executed counterparts of each of the Parent Pledge Agreement, the
Borrower Pledge Agreement and each Subsidiary Pledge Agreement, each dated as of
the date hereof, duly executed and delivered by an Authorized Officer of the
Parent, the Borrower and each Subsidiary Guarantor, as the case may be, together
with
(a) certificates evidencing all of the issued and outstanding
shares of Capital Stock pledged by any Obligor under any Pledge
Agreement, which certificates shall be accompanied by undated stock
powers duly executed in blank, or, if any securities pledged pursuant to
any Pledge Agreement are uncertificated securities, confirmation and
evidence satisfactory to the Administrative Agent that the security
interest in such uncertificated securities has been transferred to and
perfected by the Administrative Agent for the benefit of the Secured
Parties in accordance with Section 8-313 and Section 8-321 of the
U.C.C., and all laws otherwise applicable to the perfection of the
pledge of such shares; and
(b) all Pledged Notes (as defined in each Pledge Agreement), if
any, evidencing Indebtedness payable to the Borrower, duly endorsed to
the order of the Administrative Agent, together with Uniform Commercial
Code Financing Statements (or similar instruments) in respect of such
Pledged Notes executed by each payee of a Pledged Note to be filed in
such jurisdictions as the Administrative Agent may reasonably request.
The Administrative Agent and its counsel shall be satisfied that (a) the Lien
granted to the Administrative Agent, for the benefit of the Secured Parties, in
the collateral described above is a first priority perfected (or local
equivalent thereof) security
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interest; and (b) no Lien exists on any of the collateral described above other
than the Lien created in favor of the Administrative Agent, for the benefit of
the Secured Parties, pursuant to each Pledge Agreement and Liens permitted to
exist under clause (e) of Section 7.2.3.
SECTION 5.1.5. Security Agreements. The Administrative Agent shall have
received executed counterparts of each of the Parent Security Agreement, the
Borrower Security Agreement and the Subsidiary Security Agreement, each dated as
of the date hereof, duly executed by the Obligor party thereto, together with
(a) executed copies of Uniform Commercial Code financing
statements (Form UCC-1), naming the applicable Obligor as a debtor and
the Administrative Agent as the secured party, or other similar
instruments or documents, to be filed under the Uniform Commercial Code
of all jurisdictions as may be necessary or, in the reasonable opinion
of the Administrative Agent, desirable to perfect the security interests
of the Administrative Agent pursuant to such Security Agreement;
(b) executed copies of proper Uniform Commercial Code Form UCC-3
termination statements, if any, necessary to release all Liens (other
than Liens permitted to exist under Section 7.2.3)
(i) in any collateral described in such Security
Agreement previously granted by any Person, and
(ii) securing any of the Indebtedness to be Paid,
together with such other Uniform Commercial Code Form UCC-3 termination
statements as the Administrative Agent may request from such Obligors;
and
(c) certified copies of Uniform Commercial Code Requests for
Information or Copies (Form UCC-11), or a similar search report
certified by a party acceptable to the Administrative Agent, dated a
date reasonably near to the date of the initial Credit Extension,
listing all effective financing statements which name the applicable
Obligor (or any predecessor thereto), as the case may be (under its
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present name and any other names used within the previous six months),
as the debtor and which are filed in the jurisdictions in which filings
were made pursuant to clause (a) above, together with copies of such
financing statements (none of which (other than those described in
clause (a), if such Form UCC-11 or search report, as the case may be, is
current enough to list such financing statements described in clause
(a)) shall cover any collateral described in such Security Agreement.
SECTION 5.1.6. Trademark Security Agreement. The Administrative Agent
shall have received a Trademark Security Agreement dated as of the date of the
initial Credit Extension, duly executed and delivered by the applicable Obligor.
SECTION 5.1.7. Guarantees. The Administrative Agent shall have received
executed counterparts of each of the Parent Guaranty and each Subsidiary
Guaranty, each dated the date of the initial Credit Extension, duly executed and
delivered by an Authorized Officer of the Parent or each Subsidiary Guarantor,
as the case may be.
SECTION 5.1.8. Mortgage. The Administrative Agent shall have received
counterparts of each Mortgage, dated as of the date hereof, duly executed by the
Obligor party thereto
(a) evidence of the completion (or satisfactory arrangements for
the completion) of all recordings and filings of each Mortgage as may be
necessary or, in the reasonable opinion of the Administrative Agent,
desirable effectively to create a valid, perfected first priority Lien
against the properties purported to be covered thereby;
(b) mortgagee's title insurance policies in favor of the
Administrative Agent and the Lenders in amounts and in form and
substance and issued by insurers, reasonably satisfactory to the
Administrative Agent, with respect to the property purported to be
covered by each Mortgage, insuring that title to such property is
marketable and that the interests created by each Mortgage constitute
valid first Liens thereon free and clear of all defects and encumbrances
other than as approved by the Administrative Agent, and such policies
shall also include a survey
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reading, and, if required by the mortgagee and if available, revolving
credit endorsement, comprehensive endorsement, variable rate
endorsement, access and utilities endorsements, mechanic's lien
endorsement and such other endorsements as the Administrative Agent
shall reasonably request and shall be accompanied by evidence of the
payment in full of all premiums thereon; and
(c) such other approvals, opinions, or documents as the
Administrative Agent may reasonably request including, without
limitation, consents and estoppel agreements from landlords, a survey of
each property purported to be covered by a Mortgage in form and
substance satisfactory to the Administrative Agent and the title
insurer, and, if required by Regulatory Authority, a real estate
appraisal for each such property prepared in accordance with the
requirements of the Financial Institutions Reform Recovery and
Enforcement Act of 1989 and the regulations promulgated thereunder, and
otherwise in form and substance satisfactory to the Administrative
Agent.
SECTION 5.1.9. Financial Information, etc. The Administrative Agent
shall have received
(a) the audited consolidated financial statements of the Parent
and the Borrower and its Subsidiaries for the three fiscal year period
ended December 30, 1995; and
(b) a pro forma consolidated balance sheet of the Borrower and
its Subsidiaries, as of February 22, 1997, but giving effect to the
consummation of all the transactions contemplated by this Agreement and
reflecting the proposed capital structure of the Borrower (the "Pro
Forma Balance Sheet"), certified by the chief financial or accounting
Authorized Officer of the Borrower, which shall be reasonably
satisfactory to the Administrative Agent.
SECTION 5.1.10. Closing Date Certificate. The Administrative Agent shall
have received the Closing Date Certificate, dated the date of the initial Credit
Extension, duly executed and delivered by an Authorized Officer of the Borrower,
in which certificate the Borrower shall agree and acknowledge that the
statements made therein shall be deemed to be
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representations and warranties of the Borrower made as of such date that are
true and correct in all material respects and, at the time each such certificate
is delivered, such statements shall in fact be true and correct. All documents
and agreements required to be appended to the Closing Date Certificate shall be
in form and substance satisfactory to the Administrative Agent.
SECTION 5.1.11. Compliance Certificate. The Administrative Agent shall
have received an initial Compliance Certificate on a pro forma basis as if the
Effective Date had occurred as of December 28, 1996 and as to such items therein
as the Administrative Agent reasonably requests, dated the date of the initial
Credit Extension, duly executed (and with all schedules thereto duly completed)
and delivered by the chief executive, financial or accounting Authorized Officer
of the Borrower.
SECTION 5.1.12. Receivables Transaction Documentation. The
Administrative Agent shall have received (with copies for each Lender) a fully
executed copy of each Receivables Transaction Document certified as true,
correct and complete, and all other certificates, documents, agreements,
consents and opinions furnished pursuant or in connection therewith. The closing
and the initial purchase of receivables shall have occurred (or,
contemporaneously with the initial Credit Extension hereunder, will occur)
thereunder.
SECTION 5.1.13. Material Adverse Change. The Lenders shall be satisfied
that no event that has a Material Adverse Effect has occurred since June 29,
1996.
SECTION 5.1.14. Insurance. The Administrative Agent shall have received
certified copies of the insurance policies (or binders in respect thereof), from
one or more insurance companies reasonably satisfactory to the Administrative
Agent, evidencing coverage required to be maintained pursuant hereto and each
Loan Document.
SECTION 5.1.15. Opinions of Counsel. The Administrative Agent shall have
received opinions, dated the date of the initial Credit Extension and addressed
to the Administrative Agent and all Lenders, from
(a) Xxxx, Scholer, Fierman, Xxxx & Handler, LLP,
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special New York counsel to the Borrower and each other Obligor,
substantially in the form of Exhibit N-1 hereto; and
(b) Holland & Knight, Xxxxxxx Xxxxxx & Xxxxx, Xxxxxxxxx Xxxxxxx
Xxxxxxx Weary & Lombardi, Sonnenschein, Nath & Xxxxxxxxx, Xxxxxx &
Williams, Miller, Xxxxxxxx, Paddock & Stone, Squire, Xxxxxxx & Xxxxxxx,
Xxxxxxxx & Xxxxxxxx, Xxxxxx X. Colluci, Esq., local counsel to the
Obligors, substantially in the form of Exhibit N-2 hereto.
SECTION 5.1.16. Closing Fees, Expenses, etc. The Administrative Agent
shall have received for its own account, or for the account of each Lender, as
the case may be, all fees, costs and expenses due and payable pursuant to
Sections 3.3 and 10.3, if then invoiced.
SECTION 5.1.17. Borrowing Base Certificate. The Administrative Agent
shall have received, with counterparts for each Lender, an initial Borrowing
Base Certificate from the Borrower, dated the date of the initial Credit
Extension and calculated as of a recent date satisfactory to the Administrative
Agent, duly executed (and with all schedules thereto completed) and delivered by
an Authorized Officer of the Borrower.
SECTION 5.2. All Credit Extensions. The obligation of each Lender and
each Issuer to make any Credit Extension (including the initial Credit
Extension) shall be subject to Sections 2.1.4 and 2.1.5 and the satisfaction of
each of the conditions precedent set forth in this Section 5.2.
SECTION 5.2.1. Compliance with Warranties, No Default, etc. Both before
and after giving effect to any Credit Extension (but, if any Default of the
nature referred to in Section 8.1.5 shall have occurred with respect to any
other Indebtedness, without giving effect to the application, directly or
indirectly, of the proceeds of such Credit Extension) the following statements
shall be true and correct:
(a) the representations and warranties set forth in Article VI
(excluding, however, those contained in Section 6.7) and in each other
Loan Document shall, in each case, be true and correct in all material
respects with the
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same effect as if then made (unless stated to relate solely to an
earlier date, in which case such representations and warranties shall be
true and correct in all material respects as of such earlier date);
(b) except as disclosed by the Borrower to the Administrative
Agent and the Lenders pursuant to Section 6.7,
(i) no labor controversy, litigation, arbitration or
governmental investigation or proceeding shall be pending or, to
the knowledge of the Borrower, threatened against Parent, the
Borrower or any of its Subsidiaries which could reasonably be
expected to have a Material Adverse Effect; and
(ii) no development shall have occurred in any labor
controversy, litigation, arbitration or governmental
investigation or proceeding disclosed pursuant to Section 6.7
which could reasonably be expected to have a Material Adverse
Effect; and
(c) no Default shall have then occurred and be continuing.
SECTION 5.2.2. Credit Extension Request, etc. The Administrative Agent
shall have received a Borrowing Request if Loans are being requested, or an
Issuance Request if a Letter of Credit is being requested or extended. Each of
the delivery of a Borrowing Request or Issuance Request and the acceptance by
the Borrower of the proceeds of such Credit Extension shall constitute a
representation and warranty by the Borrower that on the date of such Credit
Extension (both immediately before and after giving effect to such Credit
Extension and the application of the proceeds thereof) the statements made in
Section 5.2.1 are true and correct in all material respects.
SECTION 5.2.3. Satisfactory Legal Form. All documents executed or
submitted pursuant hereto by or on behalf of the Borrower or any of its
Subsidiaries or any other Obligors shall be reasonably satisfactory in form and
substance to the Administrative Agent; the Administrative Agent shall have
received all information, approvals, opinions, documents or
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instruments as the Administrative Agent may reasonably request.
ARTICLE VI
REPRESENTATIONS AND WARRANTIES
In order to induce the Lenders, each Issuer and the Administrative Agent
to enter into this Agreement and to make Credit Extensions hereunder, the
Borrower represents and warrants to the Administrative Agent, each Issuer and
each Lender as set forth in this Article VI.
SECTION 6.1. Organization, etc. The Borrower and each of its
Subsidiaries is validly organized and existing and in good standing under the
laws of the state or jurisdiction of its organization, is duly qualified to do
business and is in good standing in each jurisdiction where the nature of its
business requires such qualification, and has full power and authority and holds
all requisite governmental licenses, permits and other approvals to enter into
and perform its Obligations under this Agreement, the Notes and each other Loan
Document to which it is a party and to own and hold under lease its property and
to conduct its business substantially as currently conducted by it, except in
each case to the extent the same could not reasonably be expected to have a
Material Adverse Effect.
SECTION 6.2. Due Authorization, Non-Contravention, etc. The execution,
delivery and performance by the Borrower of this Agreement, the Notes and each
other Loan Document executed or to be executed by it and the execution, delivery
and performance by each other Obligor of each Loan Document executed or to be
executed by it are in each case within each such Person's corporate, partnership
or other applicable powers, have been duly authorized by all necessary
corporate, partnership or other applicable action, and do not
(a) contravene any such Person's Organic Documents;
(b) contravene any Contractual Obligation binding on any such
Person;
(c) contravene any Governmental Approval or
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Governmental Rule binding on any such Person; or
(d) result in, or require the creation or imposition of, any Lien
on any of such Person's properties (except as expressly permitted by
this Agreement).
SECTION 6.3. Government Approval, Regulation, etc. Except as disclosed
in Item 6.3 ("Approvals") of the Disclosure Schedule and except for filings
contemplated under the Loan Documents, no authorization or approval or other
action by, and no notice to or filing with, any Regulatory Authority or other
Person (other than those that have been, or on the Effective Date will be, duly
obtained or made and which are, or on the Effective Date will be, in full force
and effect) is required for the due execution, delivery or performance by the
Borrower of this Agreement or the Notes or by the Borrower or any other Obligor
of any other Loan Document to which it is a party. Neither the Borrower nor any
of its Subsidiaries is an "investment company" within the meaning of the
Investment Company Act of 1940, as amended, or a "holding company", or a
"subsidiary company" of a "holding company", or an "affiliate" of a "holding
company" or of a "subsidiary company" of a "holding company", within the meaning
of the Public Utility Holding Company Act of 1935, as amended.
SECTION 6.4. Validity, etc. This Agreement constitutes, and the Notes
and each other Loan Document executed by the Borrower will, on the due execution
and delivery thereof, constitute, the legal, valid and binding obligations of
the Borrower, enforceable against the Borrower in accordance with their
respective terms; and each other Loan Document executed pursuant hereto by each
other Obligor will, on the due execution and delivery thereof by such Obligor,
constitute the legal, valid and binding obligation of such Obligor enforceable
against such Obligor in accordance with its terms except to the extent that the
enforceability thereof may be limited by applicable bankruptcy, insolvency,
reorganization, moratorium or other similar laws generally affecting creditors'
rights and by equitable principles (regardless of whether enforcement is sought
in equity or at law).
SECTION 6.5. Financial Information. The financial statements of the
Borrower and its Subsidiaries furnished to the Administrative Agent and each
Lender pursuant to Section 5.1.9
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have been prepared in accordance with GAAP consistently applied, and present
fairly the consolidated financial condition of the corporations covered thereby
as at the dates thereof and the results of their operations for the periods then
ended. All balance sheets, all statements of operations, shareholders' equity
and cash flow and all other financial information of each of the Borrower and
its Subsidiaries furnished pursuant to Section 7.1.1 have been and will for
periods following the Effective Date be prepared in accordance with GAAP
consistently applied, and do or will present fairly the consolidated financial
condition of the corporations covered thereby as at the dates thereof and the
results of their operations for the periods then ended, except that quarterly
financial statements need not include footnote disclosure and may be subject to
ordinary year-end adjustment.
SECTION 6.6. No Material Adverse Effect. Since the date of the financial
statements described in Section 6.5, no event has occurred that has had a
Material Adverse Effect.
SECTION 6.7. Litigation, Labor Controversies, etc. Except as disclosed
in Item 6.7 ("Litigation") of the Disclosure Schedule, there is no pending or,
to the knowledge of the Borrower, threatened litigation, action, proceeding, or
labor controversy affecting the Borrower or any of its Subsidiaries, or any of
their respective properties, businesses, assets or revenues, which could
reasonably be expected (a) to have a Material Adverse Effect or (b) to adversely
affect the legality, validity or enforceability of this Agreement, the Notes or
any other Loan Document or Receivables Transaction Document.
SECTION 6.8. Compliance with Laws. The Borrower and its Subsidiaries
have complied in all material respects with all applicable Governmental
Approvals and Governmental Rules of any Regulatory Authority having jurisdiction
over the conduct of its businesses or the ownership or leasing of its properties
except in each case to the extent the same could not reasonably be expected to
have a Material Adverse Effect.
SECTION 6.9. Subsidiaries. The Borrower has no Subsidiaries, except
those Subsidiaries
(a) which are identified in Item 6.9 ("Existing
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Subsidiaries") of the Disclosure Schedule; or
(b) which are permitted to have been organized or acquired in
accordance with Section 7.2.5 or 7.2.10.
SECTION 6.10. Ownership of Properties. The Borrower and each of its
Subsidiaries owns (a) in the case of owned real property, good and marketable
fee title to, and (b) in the case of owned personal property, good and valid
title to, or, in the case of leased real or personal property, valid and
enforceable leasehold interests (as the case may be) in, all of its properties
and assets, real and personal, tangible and intangible, of any nature whatsoever
(including patents, trademarks, trade names, service marks and copyrights), free
and clear of all Liens, charges or claims (including infringement claims with
respect to patents, trademarks, copyrights and the like), except for Liens
permitted pursuant to Section 7.2.3.
SECTION 6.11. Taxes. The Borrower and each of its Subsidiaries has filed
all federal income tax returns and all other material tax returns and reports
required by law to have been filed by it and has paid all taxes and governmental
charges thereby shown to be due and owing, except any such taxes or charges
which are being diligently contested in good faith by appropriate proceedings
and for which adequate reserves in accordance with GAAP shall have been set
aside on its books.
SECTION 6.12. Pension and Welfare Plans. Except as disclosed in Item
6.12 ("Employee Benefit Plans") of the Disclosure Schedule, during the
twelve-consecutive-month period prior to the date of the execution and delivery
of this Agreement and prior to the date of any Credit Extension hereunder, no
steps have been taken to terminate any Pension Plan (other than a standard
termination under Section 4041(b) of ERISA), and no contribution failure has
occurred with respect to any Pension Plan sufficient to give rise to a Lien
under section 302(f) of ERISA. No condition exists or event or transaction has
occurred with respect to any Pension Plan which might result in the incurrence
by the Borrower or any member of the Controlled Group of any material liability,
fine or penalty. Except as disclosed in Item 6.12 of the Disclosure Schedule,
neither the Borrower nor any member of the Controlled Group has any contingent
liability with respect to any post retirement benefit under a Welfare Plan,
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other than liability for continuation coverage described in Part 6 of Title I of
ERISA.
SECTION 6.13. Environmental Warranties. Except as set forth in Item 6.13
("Environmental Matters") of the Disclosure Schedule:
(a) all facilities and property (including underlying
groundwater) owned or leased by the Borrower or any of its Subsidiaries
have been since 1992, and continue to be, owned or leased by the
Borrower and its Subsidiaries in material compliance with all
Environmental Laws;
(b) there are no pending or threatened, except for matters not
likely to result in liability to a Borrower or Subsidiary greater than
$5,000:
(i) written claims, complaints, notices or requests for
information received by the Borrower or any of its Subsidiaries
from any Regulatory Authority with respect to any alleged
violation of any Environmental Law, or
(ii) written complaints, notices or inquiries to the
Borrower or any of its Subsidiaries from any Regulatory Authority
regarding potential liability under any Environmental Law;
(c) there have been no Releases of Hazardous Materials at, on or
under any property now or previously owned or leased by the Borrower or
any of its Subsidiaries that, singly or in the aggregate, have, or could
reasonably be expected to have, a Material Adverse Effect;
(d) the Borrower and its Subsidiaries have been issued and are in
material compliance with all material permits, certificates, approvals,
licenses and other authorizations relating to environmental matters and
necessary or desirable for their businesses or operations;
(e) no property now or previously owned or leased by the
Borrower or any of its Subsidiaries is listed or proposed for listing on
the National Priorities List
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pursuant to CERCLA, or on any similar state list of sites requiring
investigation or clean-up;
(f) there are no underground storage tanks, active or abandoned,
including petroleum storage tanks, on or under any property now or
previously owned or leased by the Borrower or any of its Subsidiaries
that, singly or in the aggregate, have, or could reasonably be expected
to have, a Material Adverse Effect;
(g) neither the Borrower nor any Subsidiary of the Borrower has
directly transported or directly arranged for the transportation of any
Hazardous Material to any location which is listed or proposed for
listing on the National Priorities List pursuant to CERCLA, or on any
similar state list or which to the knowledge is the subject of federal,
state or local enforcement actions or other investigations which could
reasonably be expected to lead to material claims against the Borrower
or such Subsidiary thereof for any remedial work, damage to natural
resources or personal injury, including claims under CERCLA; and
(h) there are no polychlorinated biphenyls or friable asbestos
present at any property now or previously owned or leased by the
Borrower or any Subsidiary of the Borrower that, singly or in the
aggregate, have, or could reasonably be expected to have, a Material
Adverse Effect.
SECTION 6.14. Regulations G, U and X. Neither the Borrower nor any of
its Subsidiaries is engaged in the business of extending credit for the purpose
of purchasing or carrying margin stock, and no proceeds of any Credit Extensions
will be used to purchase or carry margin stock or otherwise for a purpose which
violates, or would be inconsistent with, F.R.S. Board Regulation G, U or X.
Terms for which meanings are provided in F.R.S. Board Regulation G, U or X or
any regulations substituted therefor, as from time to time in effect, are used
in this Section with such meanings.
SECTION 6.15. Accuracy of Information. All factual information
heretofore or contemporaneously furnished by or on behalf of the Borrower in
writing to the Administrative Agent, any Issuer or any Lender for purposes of or
in connection with
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this Agreement or any transaction contemplated hereby, taken as a whole is, and
all other such factual information hereafter furnished by or on behalf of the
Borrower to the Administrative Agent, any Issuer or any Lender will taken as a
whole be true and accurate in every material respect on the date as of which
such information is dated or certified and as of the date of execution and
delivery of this Agreement by the Administrative Agent, such Issuer and such
Lender, and such information is not, or shall not be, as the case may be,
incomplete by omitting to state any material fact necessary to make such
information not misleading.
ARTICLE VII
COVENANTS
SECTION 7.1. Affirmative Covenants. The Borrower agrees with the
Administrative Agent, each Issuer and each Lender that, until all Commitments
have terminated and all Obligations (other than indemnity, reimbursement and
similar obligations in respect of which no claim has been made and no amount
remains outstanding) have been paid in full, the Borrower will perform or cause
to be performed the obligations set forth in this Section 7.1.
SECTION 7.1.1. Financial Information, Reports, Notices, etc. The
Borrower will furnish, or will cause to be furnished, to each Lender, each
Issuer and the Administrative Agent copies of the following financial
statements, reports, notices and information:
(a) as soon as available and in any event within 45 days after
the end of each of the first three Fiscal Quarters of each Fiscal Year
of the Parent and the Borrower, a consolidated balance sheet of the
Parent and the Borrower and its Subsidiaries, in each case as of the end
of such Fiscal Quarter and consolidated statements of earnings and cash
flow of the Parent and the Borrower and its Subsidiaries, in each case
for such Fiscal Quarter and for the period commencing at the end of the
previous Fiscal Year and ending with the end of such Fiscal Quarter,
certified as complete and correct by a financial Authorized Officer of
the Parent and the Borrower, respectively;
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(b) as soon as available and in any event within 90 days after
the end of each Fiscal Year of the Parent and the Borrower, a copy of
the annual audited financial statements for such Fiscal Year for the
Parent and the Borrower and its consolidated Subsidiaries, including
therein a consolidated balance sheet of the Parent and the Borrower and
its Subsidiaries as of the end of such Fiscal Year and consolidated
statements of earnings and cash flow of the Parent and the Borrower and
its Subsidiaries for such Fiscal Year, in each case as audited (without
any Impermissible Qualification) by independent public accountants of
national standing acceptable to the Administrative Agent;
(c) as soon as available and in any event within 45 days after
the end of each of the first three Fiscal Quarters of each Fiscal Year
of the Borrower and within 90 days after the end of the Fiscal Year of
the Borrower, a Compliance Certificate, executed by the chief executive,
financial or accounting Authorized Officer of the Borrower, showing (in
reasonable detail and with appropriate calculations and computations in
all respects reasonably satisfactory to the Administrative Agent)
compliance with the financial covenants set forth in Article VII;
(d) as soon as available and in any event within 60 days after
the first day of each Fiscal Year, copies of the Borrower's monthly
operating budget for such Fiscal Year (in reasonable detail and with
appropriate calculations and computations in all respects reasonably
satisfactory to the Administrative Agent);
(e) as soon as possible and in any event within five days after
the occurrence of each Default, a statement of an Authorized Officer of
the Borrower setting forth details of such Default and the action which
the Borrower has taken and proposes to take with respect thereto;
(f) as soon as possible and in any event within five days after
becoming aware of (x) the occurrence of any adverse development with
respect to any litigation, action, proceeding or labor controversy
described in Section 6.7, or (y) the commencement of any litigation,
action, proceeding
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or labor controversy described in Section 6.7, notice thereof and copies
of all documentation relating thereto;
(g) promptly after the sending or filing thereof, copies of all
reports which the Borrower sends to its securityholders generally, and
all reports and registration statements which the Borrower or any of its
Subsidiaries files with the SEC or any national securities exchange;
(h) immediately upon becoming aware of (i) the institution of
any steps by the Borrower or any other Person to terminate any Pension
Plan (other than in a standard termination under Section 4041(b) of
ERISA), (ii) the failure to make a required contribution to any Pension
Plan if such failure is sufficient to give rise to a Lien under Section
302(f) of ERISA, (iii) the taking of any action with respect to a
Pension Plan which could result in the requirement that the Borrower
furnish a bond or other security to the PBGC or such Pension Plan, or
(iv) the occurrence of any event with respect to any Pension Plan which
could result in the incurrence by the Borrower of any material
liability, fine or penalty, notice thereof and copies of all
documentation relating thereto;
(i) promptly upon receipt thereof, copies of all management
letters submitted to the Borrower by the independent public accountants
referred to in clause (b) in connection with each audit made by such
accountants of the books of the Borrower or any Subsidiary;
(j) as soon as practicable, and in any event within ten (10)
Business Days after the close of each month (and more often if
reasonably requested in writing by the Administrative Agent), the
Borrower shall provide the Administrative Agent and the Lenders with a
Borrowing Base Certificate, together with such supporting documents as
the Administrative Agent may reasonably request all certified as being
true and correct in all material aspects by such Borrower; and
(k) such other information respecting the condition or
operations, financial or otherwise, of the Borrower or any of its
Subsidiaries as any Lender or any Issuer through the
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Administrative Agent may from time to time reasonably request (including
information and reports from the chief accounting, financial or
executive Authorized Officer of the Borrower, in such detail as the
Administrative Agent or any Lender or Issuer through the Administrative
Agent may reasonably request, with respect to the terms of and
information provided pursuant to the Compliance Certificate).
SECTION 7.1.2. Compliance with Laws, etc. The Borrower will, and will
cause each of its Subsidiaries to, comply in all respects with all applicable
Governmental Rules and Governmental Approvals of all Regulatory Authorities
except to the extent noncompliance therewith could not reasonably be expected to
have a Material Adverse Effect, such compliance to include:
(a) the maintenance and preservation of the Borrower's and its
Subsidiaries' corporate existence; and
(b) the payment, before the same become delinquent, of all
taxes, assessments and governmental charges imposed upon it or upon its
property except to the extent being diligently contested in good faith
by appropriate proceedings and for which adequate reserves, if any, in
accordance with GAAP shall have been set aside on its books.
SECTION 7.1.3. Maintenance of Properties. The Borrower will, and will
cause each of its Subsidiaries to, maintain, preserve, protect and keep its
properties in good repair, working order and condition (ordinary wear and tear
excepted), and make necessary and proper alterations, additions, repairs,
renewals and replacements, so that its business carried on in connection
therewith may be properly conducted at all times unless the Borrower determines
in good faith that the continued maintenance, repairs, etc. of any of its
properties is no longer economically desirable.
SECTION 7.1.4. Insurance. The Borrower shall maintain, and shall cause
each of its Subsidiaries to maintain:
(a) physical damage insurance on all real and personal property
on an all-risk basis (including, loss in transit, flood and earthquake
insurance) and public liability
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insurance against claims for personal injury, death or property damage
suffered by others upon, in or about any premises occupied by it or
occurring as a result of its ownership, maintenance or operation of any
automobiles, trucks or other vehicles or other facilities (including any
machinery used therein or thereupon) or as the result of the use of
products manufactured, constructed or sold by it or services rendered by
it in an amount as is usually carried by Persons of comparable size
engaged in the same or a similar business and similarly situated;
(b) such other types of insurance with respect to its business as
is usually carried by Persons of comparable size engaged in the same or
a similar business and similarly situated; and
(c) all worker's compensation or similar insurance as may be
required under the laws of any state or jurisdiction in which it may be
engaged in business.
All insurance shall be provided by insurers having an A.M. Best policyholders
rating of not less than A- (except with respect to insurers providing insurance
of the type described in clause (c), in which case such insurers shall have an
A.M. Best policyholders rating of not less than B+) or (iii) by such other
insurers as the Administrative Agent may approve in writing; provided, that if
the rating of any of such insurers is downgraded, the Borrower and each of its
Subsidiaries, as the case may be, shall only be required to obtain replacement
insurance with an insurer satisfying the requirements of this clause at the
stated expiration of the insurance policy maintained with the insurer whose
rating was so downgraded.
SECTION 7.1.5. Books and Records. The Borrower will, and will cause each
of its Subsidiaries to, keep books and records which accurately reflect all of
its business affairs and transactions and upon reasonable prior written notice
permit the Administrative Agent and each Lender or any of their respective
representatives, at reasonable times and intervals, to visit all of its offices,
to discuss its financial matters with its officers and, subject to reasonable
prior written notice having been given to the Borrower, its independent public
accountant (and the Borrower hereby authorizes such independent public
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accountant to discuss the Borrower's financial matters with each Lender or its
representatives whether or not any representative of the Borrower is present)
and to examine (and, at the expense of the Borrower, photocopy extracts from)
any of its books or other corporate records; provided, however, that the Lenders
shall to the extent reasonably practicable coordinate such examinations, visits,
discussions, etc. through the Administrative Agent so that all Lenders conduct
the same substantially simultaneously. The Borrower shall pay any fees of such
independent public accountant incurred in connection with the Administrative
Agent's or any Lender's exercise of its rights pursuant to this Section.
SECTION 7.1.6. Environmental Covenant. The Borrower will, and will cause
each of its Subsidiaries to,
(a) use and operate all of its facilities and properties in
material compliance with all Environmental Laws, keep all necessary and
material permits, approvals, certificates, licenses and other
authorizations relating to environmental matters in effect and remain in
material compliance therewith, and handle all Hazardous Materials in
material compliance with all applicable Environmental Laws;
(b) promptly notify the Administrative Agent and provide copies
upon receipt of all material written claims, complaints, notices or
inquiries of any Regulatory Authority relating to the condition of its
facilities and properties in respect of, or as to compliance with,
Environmental Laws, and shall keep its property free of any Lien imposed
by any Environmental Law; and
(c) provide such information and certifications which the
Administrative Agent may reasonably request from time to time to
evidence compliance with this Section 7.1.6.
SECTION 7.1.7. Future Subsidiaries. Upon any Person becoming, after the
Effective Date, a Subsidiary of the Borrower, or upon the Borrower directly or
indirectly acquiring additional Capital Stock of any existing Subsidiary, the
Borrower shall notify the Administrative Agent of such acquisition, and, unless
otherwise agreed to among the Borrower, the Administrative Agent and the
Required Lenders,
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(a) such Person shall execute and deliver to the Administrative
Agent (i) a Subsidiary Guaranty, (ii) the Subsidiary Security Agreement,
(iii) if requested by the Administrative Agent, Subsidiary Mortgages and
(iv) if such Person has a Subsidiary, a Subsidiary Pledge Agreement, in
each case in a manner reasonably satisfactory to the Administrative
Agent; and
(b) the Borrower or such Person, as the case may be, shall,
pursuant to a Pledge Agreement, pledge to the Administrative Agent for
its benefit and that of the Secured Parties (i) all of the outstanding
shares of Capital Stock of such Person, along with undated stock powers
for such certificates, executed in blank (or, if any such shares of
Capital Stock are uncertificated, confirmation and evidence satisfactory
to the Administrative Agent that the security interest in such
uncertificated securities has been transferred to and perfected by the
Administrative Agent, for the benefit of the Secured Parties, in
accordance with Section 8-313 and Section 8-321 of the U.C.C. or any
other similar or local or foreign law which may be applicable), and (ii)
all intercompany notes evidencing Indebtedness in favor of the Borrower
or such Person (which shall, unless the Administrative Agent shall
otherwise agree, be in form satisfactory to the Administrative Agent);
together, in each case, with such opinions of legal counsel for the Borrower
(which shall be from counsel reasonably satisfactory to the Administrative
Agent) relating thereto, which legal opinions shall be in form and substance
reasonably satisfactory to the Administrative Agent.
SECTION 7.1.8. Additional Collateral. The Borrower shall, and shall
cause each of its Subsidiaries to, cause the Administrative Agent to have at all
times a first priority perfected security interest (subject only to Liens and
encumbrances permitted under Section 7.2.3) in all of the property (real and
personal) owned from time to time by the Borrower or a Subsidiary to the extent
the same constitutes or would constitute "Collateral" under the Borrower
Security Agreement, each Subsidiary Security Agreement, a Pledge Agreement or a
Mortgage. Without limiting the generality of the foregoing, the Borrower shall,
and shall cause each of its Subsidiaries to,
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execute, deliver and/or file (as applicable) or cause to be executed, delivered
and/or filed (as applicable), the pledge agreement(s), mortgages, the security
agreement(s), Uniform Commercial Code (Form UCC-1) financing statements, Uniform
Commercial Code (Form UCC-3) termination statements, and other documentation
necessary to grant and perfect such security interest, in each case in form and
substance reasonably satisfactory to the Administrative Agent together, in each
case, with such opinions of legal counsel for the Borrower (which shall be from
counsel reasonably satisfactory to the Administrative Agent) relating thereto,
which legal opinions shall be in form and substance reasonably satisfactory to
the Administrative Agent.
SECTION 7.1.9. Use of Proceeds. The Borrower shall apply the proceeds of
the Credit Extensions solely
(a) for working capital and general corporate purposes of the
Borrower and the Subsidiary Guarantors, including Permitted Acquisitions
by such Persons;
(b) to pay the transaction costs and expenses incurred in
connection with the initial Credit Extension;
(c) to repay the Indebtedness to be Paid; and
(d) in the case of Letters of Credit, for issuing standby
Letters of Credit for the account of the Borrower.
SECTION 7.2. Negative Covenants. The Borrower agrees with the
Administrative Agent, each Issuer and each Lender that, until all Commitments
have terminated and all Obligations (other than indemnity, reimbursement and
similar obligations in respect of which no claim has been made and no amount
remains outstanding) have been paid in full, the Borrower will, and will cause
its Subsidiaries to, perform the obligations set forth in this Section 7.2.
SECTION 7.2.1. Business Activities. The Borrower will not, and will not
permit any of its Subsidiaries to, engage in any business activity, except those
described in the first recital and such activities as are reasonably incidental
or substantially similar thereto.
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SECTION 7.2.2. Indebtedness. The Borrower will not, and will not permit
any of its Subsidiaries to, create, incur, assume or suffer to exist or
otherwise become or be liable in respect of any Indebtedness, other than,
without duplication, the following:
(a) Indebtedness in respect of the Credit Extensions and other
Obligations (including Hedging Obligations in respect of such Credit
Extensions);
(b) until the date of the initial Credit Extension, the
Indebtedness to be Paid;
(c) Indebtedness existing as of the Effective Date which is
identified in Item 7.2.2(c) ("Ongoing Indebtedness") of the Disclosure
Schedule;
(d) Indebtedness of the Borrower or any of its Subsidiaries
incurred after the Effective Date in connection with the acquisition or
improvement of distribution, warehouse or transportation facilities in
an aggregate amount not to exceed the sum of (i) $20,000,000 outstanding
for the period from the Effective Date to the next succeeding
anniversary of the Effective Date, and (ii) thereafter an additional
Indebtedness of $10,000,000 outstanding increasing for each subsequent
12 month period following an anniversary date of the Effective Date;
provided, however, that the maximum aggregate amount of all Indebtedness
permitted under this clause (d) (i) shall not at any time exceed
$50,000,000 outstanding and (ii) of ProSource Canada and its
Subsidiaries together with all Indebtedness of ProSource Canada and its
Subsidiaries constituting Canadian Indebtedness shall not exceed
Cdn$20,000,000 at any time outstanding;
(e) principal amounts constituting Canadian Indebtedness which
together with Indebtedness of ProSource Canada and its Subsidiaries
permitted under clause (d) above does not exceed Cdn$20,000,000 at any
time outstanding;
(f) unsecured Indebtedness of the type set forth in clauses (d)
and (f) of the definitions of "Indebtedness" incurred in the ordinary
course of business of the Borrower and its Subsidiaries;
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(g) Indebtedness of the Borrower or any of its Subsidiaries in
respect of Capitalized Lease Liabilities to the extent permitted by
Section 7.2.7;
(h) intercompany Indebtedness of the Borrower that is
subordinated to the Obligations on terms satisfactory to the
Administrative Agent or of any Subsidiary Guarantor owing to the
Borrower or any other Subsidiary Guarantor, which Indebtedness
(i) shall be evidenced by one or more promissory notes
(such promissory note(s) (in the case of other than the
Receivables Note) to be, unless otherwise agreed to by the
Administrative Agent, in substantially the form of Exhibit A to
the Borrower Pledge Agreement) duly executed and delivered in
pledge pursuant to the Borrower Pledge Agreement to the
Administrative Agent; and
(ii) shall (in the case of Indebtedness other than that
evidenced by the Receivables Note) not be forgiven or otherwise
discharged for any consideration other than payment in full or in
part (provided that only the amount repaid in part shall be
discharged) in cash (unless otherwise agreed to by the
Administrative Agent);
(i) Indebtedness incurred in connection with the Permitted
Receivables Transaction in an aggregate principal amount at any time not
to exceed $150,000,000;
(j) Indebtedness incurred in connection with a Sale Leaseback
Transaction permitted under Section 7.2.14;
(k) Indebtedness of the Borrower incurred in connection with
guarantees of payment described in the proviso to the penultimate
sentence of the definition of "Contingent Liability" in an amount not to
exceed $3,200,000 at any time outstanding; and
(l) Intercompany Indebtedness of (i) the Borrower owed to
Receivables Co., (ii) Receivables Co. owed to the Borrower or to another
wholly-owned special purpose
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Subsidiary of the Borrower or (iii) such Subsidiary owed to Receivables
Co., in each case, incurred in connection with the Permitted Receivables
Transaction;
provided, however, that no new Indebtedness otherwise permitted by clause (d),
(g), (h), (j) and (k) shall be permitted to be incurred if a Default has
occurred and is continuing or would result therefrom.
SECTION 7.2.3. Liens. The Borrower will not, and will not permit any of
its Subsidiaries to, create, incur, assume or suffer to exist any Lien upon any
of its property, revenues or assets, whether now owned or hereafter acquired,
except:
(a) Liens securing payment of the Obligations, granted pursuant
to any Loan Document;
(b) until the date of the initial Credit Extension, Liens
securing payment of Indebtedness of the type permitted and described in
clause (b) of Section 7.2.2;
(c) Liens granted prior to the Effective Date to secure payment
of Indebtedness of the type permitted and described in clause (c) of
Section 7.2.2;
(d) Liens granted to secure payment of Indebtedness of the type
permitted and described in clause (d) of Section 7.2.2 and covering only
those assets acquired with the proceeds of such Indebtedness;
(e) Liens for taxes, assessments or other governmental charges
or levies not at the time delinquent or thereafter payable without
penalty or being diligently contested in good faith by appropriate
proceedings and for which adequate reserves, if any, in accordance with
GAAP shall have been set aside on its books;
(f) Liens of carriers, warehousemen, mechanics, materialmen,
suppliers, vendors and landlords incurred in the ordinary course of
business for sums not overdue or being diligently contested in good
faith by appropriate proceedings and for which adequate reserves, if
any, in accordance with GAAP shall have been set aside on its books;
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(g) Liens incurred or deposits made in the ordinary course of
business in connection with workmen's compensation, unemployment
insurance or other forms of governmental insurance or benefits, or to
secure performance of tenders, statutory and regulatory obligations,
bids, leases and contracts or other similar obligations (other than for
borrowed money) entered into in the ordinary course of business or to
secure obligations on surety or appeal bonds;
(h) judgment Liens to the extent not resulting in an Event of
Default;
(i) easements, rights-of-way, municipal and zoning ordinances or
similar restrictions, minor defects or irregularities in title and other
similar charges or encumbrances not interfering in any material respect
with the ordinary conduct of the business of the Borrower or its
Subsidiaries or the value or utility of the property to which such Lien
is attached;
(j) Liens on Accounts of Receivables Co. created in connection
with the Permitted Receivables Transaction;
(k) Liens arising from precautionary U.C.C. financing statement
filings regarding operating leases, consignments and similar
arrangements entered into in the ordinary course of business;
(l) statutory and common law landlord's liens under Leases; and
(m) with respect to any real property that is subject to a
Mortgage, such exceptions to title as are set forth in the title
insurance policy delivered with respect thereto and are acceptable to
the Administrative Agent.
SECTION 7.2.4. Financial Condition.
(a) Net Worth. The Borrower will not permit Net Worth at any
time during any Fiscal Quarter of the Borrower, commencing with the
second Fiscal Quarter of Fiscal Year 1997, to be less than an amount
equal to the sum of (i)
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$70,000,000, plus (ii) an amount equal to 50% of the sum of the Net
Income for each Fiscal Quarter, commencing with the second Fiscal
Quarter of Fiscal Year 1997 and ending with the last full Fiscal Quarter
ending on or prior to any date of measurement, in which Net Income
exceeded $0 plus (iii) an amount equal to 50% of the aggregate value of
capital contributions made to the equity of the Borrower since the
Effective Date (excluding capital contributions made expressly and
solely for the purpose of curing an Event of Default);
(b) Total Debt to EBITDA Ratio. The Borrower will not permit the
Total Debt to EBITDA Ratio as of the end of any Fiscal Quarter occurring
during any period set forth below to be greater than the ratio set forth
opposite such period:
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Total Debt to EBITDA
Period Ratio
-------------------------------------- ----------------------------------
Effective Date through
Third Fiscal Quarter of
1997 4.75:1
Fourth Fiscal Quarter
of 1997 through First
Fiscal Quarter of 1998 4.50:1
Second Fiscal Quarter
of 1998 4.25:1
Third Fiscal Quarter of
1998 through Fourth
Fiscal Quarter of 1998 4.00:1
First Fiscal Quarter of
1999 through Second
Fiscal Quarter of 1999 3.50:1
Third Fiscal Quarter of
1999 through First
Fiscal Quarter of 2000 2.75:1
Second Fiscal Quarter
of 2000 through Stated
Maturity Date 2.00:1
(c) Fixed Charge Coverage Ratio. The Borrower will not permit
the Fixed Charge Coverage Ratio as of the end of any Fiscal Quarter
occurring during any period set forth below (beginning with the First
Fiscal Quarter of 1997) to be less than the ratio set forth opposite
such period:
Fixed Charge Coverage
Period Ratio
-------------------------------------- ---------------------------------------
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First Fiscal Quarter of
1997 through Third
Fiscal Quarter of 1997 .80:1
Fourth Fiscal Quarter
of 1997 through Second
Fiscal Quarter of 1998 .90:1
Third Fiscal Quarter of
1998 through Fourth
Fiscal Quarter of 1998 .95:1
First Fiscal Quarter of
1999 through Fourth
Fiscal Quarter of 1999 1.10:1
First Fiscal Quarter of
2000 through Fourth
Fiscal Quarter of 2000 1.25:1
First Fiscal Quarter of
2001 through Stated
Maturity Date 1.35:1
(d) Interest Coverage Ratio. The Borrower will not permit the
Interest Coverage Ratio as of the end of any Fiscal Quarter occurring
during any period set forth below (beginning with the First Fiscal
Quarter of 1997) to be less than the ratio set forth opposite such
period:
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Period Interest Coverage Ratio
--------------------------------------- ---------------------------------------
First Fiscal Quarter of
1997 2.25:1
Second Fiscal Quarter of
1997 2.50:1
Third Fiscal Quarter of
1997 2.75:1
Fourth Fiscal Quarter of
1997 3.00:1
First Fiscal Quarter of
1998 through Fourth
Fiscal Quarter of 1998 3.25:1
First Fiscal Quarter of
1999 through Stated
Maturity Date 4.00:1
SECTION 7.2.5. Investments. The Borrower will not, and will not permit
any of its Subsidiaries to, make, incur, assume or suffer to exist any
Investment in any other Person, except:
(a) Investments (including any Trade Investments) existing on
the Effective Date and identified in Item 7.2.5(a) ("Ongoing
Investments") of the Disclosure Schedule (provided that any payments
received in respect of any such existing Trade Investments shall be
applied to permanently reduce the amount of such Trade Investments);
(b) Cash Equivalent Investments;
(c) without duplication, Investments permitted as Indebtedness
pursuant to Section 7.2.2;
(d) Investments by the Borrower in ProSource Canada by way of
contributions to capital not at any time to exceed
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$5,000,000;
(e) Investments in Subsidiaries (i) acquired or formed in
connection with a Permitted Acquisition, (ii) and (without duplication)
in Subsidiaries existing on the Effective Date and (iii) subject to
Section 7.2.15, which are Designated Subsidiaries;
(f) loans and advances to employees the proceeds of which are
immediately used to purchase equity Securities of the Parent and which
proceeds are immediately thereafter contributed by the Parent to the
Borrower as a capital contribution;
(g) Investments constituting Permitted Acquisitions (i) in an
aggregate amount having a value not to exceed $25,000,000 over the term
of this Agreement, (ii) in a single or a related series of transactions
having a value in excess of $25,000,000 individually but less than
$100,000,000, individually or in the aggregate, so long as the Borrower
shall have delivered to the Administrative Agent a Compliance
Certificate for the period of four full Fiscal Quarters immediately
preceding each such acquisition (prepared in good faith and in a manner
and using such methodology which if consistent with the most recent
financial statements delivered pursuant to Section 7.1.1) giving pro
forma effect to the consummation of such acquisition and evidencing
compliance with the covenants set forth in Section 7.2.4, and (iii) in a
single or a related series of transactions having a value in excess of
$100,000,000 with the prior written consent of the Required Lenders
(which consent may be withheld by the Required Lenders in their sole
discretion and for any reason);
(h) Trade Investments made after the Effective Date in an
aggregate outstanding amount not to exceed (i) $1,000,000 for the period
from the Effective Date to the first anniversary of the Effective Date
and (ii) an incremental $1,000,000 for each subsequent 12 month period;
provided, however, that the maximum aggregate amount outstanding of all
Trade Investments permitted under this clause (h) shall not at any time
exceed $3,000,000 and;
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(i) other Investments in an aggregate amount at any one time not
to exceed $500,000;
provided, however, that
(k) any Investment which when made complies with the requirements
of clause (a), (b) or (c) of the definition of the term "Cash Equivalent
Investment" may continue to be held notwithstanding that such Investment
if made thereafter would not comply with such requirements; and
(l) no new Investment otherwise permitted by clause (d), (e),
(f), (g), or (i) shall be permitted to be made if any Default has
occurred and is continuing or would result therefrom.
SECTION 7.2.6. Restricted Payments, etc. On and at all times after the
Effective Date:
(a) The Borrower will not declare, pay or make any dividend or
distribution (in cash, property or obligations) on any shares of any
class of Capital Stock (now or hereafter outstanding) of the Borrower or
on any other Equity Interests (now or hereafter outstanding) of the
Borrower (other than dividends or distributions payable in its common
stock or warrants to purchase its common stock or splitups or
reclassifications of its stock into additional or other shares of its
common stock) or apply, or permit any of its Subsidiaries to apply, any
of its funds, property or assets to the purchase, redemption, sinking
fund or other retirement of, or agree or permit any of its Subsidiaries
to purchase or redeem, any shares of any class of Capital Stock (now or
hereafter outstanding) of the Borrower, or other Equity Interests (now
or hereafter outstanding) of the Borrower except:
(i) the Borrower may make distributions to the Parent to
enable the Parent to redeem or otherwise acquire for value shares
of its Capital Stock of the Parent owned by employees, officers,
directors and any and all non-Affiliates, provided that (A) no
Default or Event of Default shall have occurred and be continuing
or a Default or Event of Default shall occur as a
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result of such acquisition or redemption; (B) the aggregate value
of such distributions shall not exceed (x) $5,000,000 (net of any
cash repayments made to the Borrower or any of its Subsidiaries
in respect of loans or advances that were made to employees the
proceeds of which were used to purchase equity Securities of the
Parent) for the period ending on the first anniversary of the
Effective Date and (y) $10,000,000 (net of any cash repayments
made to the Borrower or any of its Subsidiaries in respect of
loans or advances that were made to employees the proceeds of
which were used to purchase equity Securities of the Parent) over
the term of this Agreement; (C) the Borrower shall have delivered
the certificate required by clause (b) below; and (D) the
Borrower shall have delivered a certificate in form and substance
satisfactory to the Administrative Agent demonstrating (x) that
the Total Debt to EBITDA Ratio shall not exceed 3.00 to 1.00 and
(y) compliance with the Fixed Charge Coverage Ratio, in each
case, computed on a pro forma basis after giving effect to such
distribution; and
(ii) the Borrower may make distributions to the Parent to
enable it to redeem shares of its capital stock from members of
the Borrower's management whose employment with the Borrower has
terminated, provided that (A) the aggregate amount of such
distributions made during any Fiscal Year minus the amount of
additional cash equity contributions received by the Borrower
during such Fiscal Year that represents proceeds from the
issuance of capital stock in the Parent to a new member of the
Borrowers' management shall not exceed $500,000 (net of any cash
repayments made to the Borrower or any of its Subsidiaries in
respect of loans or advances that were made to employees the
proceeds of which were used to purchase equity Securities of the
Parent); or (B) no Material Default or Event of Default shall
have occurred and be continuing on the date of such payment or
shall occur as a result of such payment; or (C) average daily
availability under the Revolving Loan Commitment Amount shall not
have been less than $25,000,000 during the 45-day period ending
on the date of such payment and
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after giving effect to such payment, availability under the
Revolving Loan Commitment Amount shall not be less than
$25,000,000; and (D) the Borrower shall have delivered the
certificate required by clause (b) below.
(b) The Borrower may make distributions to the Parent in any
Fiscal Year in an amount not greater than the lesser of (i) the
consolidated (or, as applicable, combined) tax liability of the Parent
for a prior tax year that is attributable to the consolidated (or, as
applicable, combined) taxable income of the Borrower, and (ii) the total
consolidated (or, as applicable, combined) tax liability of the Parent
for such prior tax year.
(c) Not less than five Business Days prior to making any
distribution permitted pursuant to clause (a) above, and as a condition
precedent to making such payment, the Borrower shall deliver to the
Administrative Agent a certificate of the Authorized Officer of the
Borrower stating:
(i) that the Borrower is in compliance with all of the
terms and conditions of this Agreement and the other Loan
Documents to which it is a party;
(ii) that no Material Default or Event of Default is in
existence as of the date of the certificate or will be in
existence as of the date of such payment, both with and without
giving effect to the making of such payment; and
(iii) the amount of such payment; and
(d) the Borrower will not, and will not permit any Subsidiary to,
make any deposit for any of the foregoing purposes other than for
purposes of payments permitted under clause (a), (b) or (c).
SECTION 7.2.7. Subsidiaries. The Borrower will not permit any Subsidiary
to issue any Capital Stock (whether for value or otherwise) to any Person other
than the Borrower or another wholly-owned Subsidiary unless the percentage
ownership interest (direct or indirect) of the Borrower in such Subsidiary
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immediately after such issuance is increased or unchanged as a result thereof.
SECTION 7.2.8. Certain Contracts. The Borrower will not, and will not
permit any of its Subsidiaries to, enter into or be a party to any arrangement
for the purchase of materials, supplies, other property or services if such
arrangement by its express terms requires that payment be made by the Borrower
or such Subsidiary regardless of whether such materials, supplies, other
property or services are delivered or furnished to it other than where the
Borrower or such Subsidiary determines not to accept such property or services.
SECTION 7.2.9. Consolidation, Merger, etc. The Borrower will not, and
will not permit any of its Subsidiaries to, liquidate or dissolve, consolidate
with, or merge into or with, any other corporation, or purchase or otherwise
acquire all or substantially all of the assets of any Person (or of any division
thereof) except
(a) any Subsidiary (other than a Designated Subsidiary) may
liquidate or dissolve voluntarily into, and may merge with and into, the
Borrower or any other Subsidiary (other than a Designated Subsidiary),
and the assets or stock of any Subsidiary may be purchased or otherwise
acquired by the Borrower or any other Subsidiary (other than a
Designated Subsidiary); provided, however, that, subject to the
preceding provisions of this clause, in no event shall any Subsidiary
Guarantor merge with and into
(i) any Subsidiary other than another Subsidiary Guarantor
unless (A) the Required Lenders shall have given their prior
written consent thereto, or (B) after giving effect thereto, the
Administrative Agent shall have a perfected pledge of, and
security interest in and to, all of the issued and outstanding
shares of capital stock of the surviving Person in form and
substance satisfactory to the Administrative Agent and its
counsel, pursuant to such documentation and opinions as shall be
necessary and appropriate in the reasonable opinion of the
Administrative Agent and its counsel to create, perfect or
maintain the collateral position of the Administrative Agent and
the Lenders
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therein as contemplated by this Agreement; or
(ii) any other Subsidiary Guarantor if, after giving
effect to such merger, the Administrative Agent has less than
that percentage of the issued and outstanding Capital Stock of
the surviving Person pledged to it than it had pledged to it
immediately prior to such merger;
provided, that, notwithstanding the foregoing, in no event shall a Subsidiary
Guarantor merge with a Designated Subsidiary; and
(b) so long as no Default has occurred and is continuing or would
occur after giving effect thereto, the Borrower or any of its
Subsidiaries may (to the extent permitted by clause (f) of Section
7.2.5) purchase all or substantially all of the assets or stock of any
Person (or any division thereof), or acquire such Person by merger.
SECTION 7.2.10. Asset Dispositions, etc. The Borrower will not, and will
not permit any of its Subsidiaries to, sell, transfer, lease, contribute or
otherwise convey (including by way of merger), or grant options, warrants or
other rights with respect to, any of the Borrower's or such Subsidiaries' assets
(including accounts receivable or capital stock of Subsidiaries) to any Person,
unless
(a) such sale, transfer, lease, contribution or conveyance of
such assets is (i) in the ordinary course of its business (and does not
constitute a sale, transfer, lease, contribution or other conveyance of
all or a substantial part of the Borrower's or such Subsidiary's assets)
or is of obsolete or worn out property, (ii) permitted by Section 7.2.9,
(iii) between Subsidiary Guarantors (other than any Designated
Subsidiary) or from a Subsidiary Guarantor to the Borrower or from the
Borrower to a Subsidiary Guarantor (other than a Designated Subsidiary)
or (iv) of other assets of the Borrower or a Subsidiary having a value
(determined based on the higher of book and fair market value) not to
exceed $3,000,000 in any Fiscal Year;
(b) such sale, transfer, lease, contribution or
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conveyance of such assets (including the SLB Properties), has a value
(calculated at the higher of book value or fair market value) of less
than $15,000,000 in any Fiscal Year and the net proceeds of which the
Borrower or a Subsidiary thereof has elected to invest or cause to be
invested in Qualified Assets as provided for in the definition of "Net
Disposition Proceeds"; provided, however, that in each Fiscal Year in
which the value of such assets so sold, transferred, leased, contributed
or conveyed is less than $15,000,000 then the difference between such
value and $15,000,000 may be carried over to any succeeding Fiscal Year
so long as the aggregate value of assets so sold, transferred, leased,
contributed or conveyed in any Fiscal Year shall not exceed $25,000,000
in any Fiscal Year;
(c) such sale, transfer, lease, contribution or conveyance is of
Accounts pursuant to the Permitted Receivables Transaction; or
(d) such sale, transfer, lease, contribution or conveyance is
permitted by Section 7.2.5 or Section 7.2.12.
SECTION 7.2.11. Modification of Certain Agreements. The Borrower will
not, and will not permit any of its Subsidiaries to, consent to any amendment,
supplement, amendment and restatement, waiver or other modification of any of,
or enter into any forbearance from exercising any rights with respect to, the
terms or provisions contained in, or applicable to, any Receivables Transaction
Document, if the effect of such amendment, supplement or modification could
reasonably be expected, individually or in the aggregate, to have a Material
Adverse Effect.
SECTION 7.2.12. Transactions with Affiliates. The Borrower will not, and
will not permit any of its Subsidiaries to, enter into, or cause, suffer or
permit to exist any arrangement or contract with any of its other Affiliates
unless such arrangement or contract is on fair and reasonable terms and is an
arrangement or contract of the kind which would be entered into by a prudent
Person in the position of the Borrower or such Subsidiary with a Person which is
not one of its Affiliates.
SECTION 7.2.13. Negative Pledges, Restrictive Agreements,
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etc. The Borrower will not, and will not permit any of its Subsidiaries to,
enter into any agreement (excluding (i) this Agreement or any other Loan
Document, (ii) any Receivables Transaction Document, (iii) in the case of clause
(a) below, customary provisions restricting sublease or assignment of any lease,
license, franchise or other agreement entered into in the ordinary course of
business, (iv) in the case of clause (a) or (c) below, restrictions imposed by
any agreement to sell or otherwise dispose of any assets to any Person pending
the closing of such sale, (v) in the case of clauses (a) and (c) below,
restrictions imposed by a joint venture, shareholders or similar agreement
entered into by a Designated Subsidiary with respect to Investments permitted by
clause (i) of Section 7.2.5, and (vi) any agreement governing any Indebtedness
permitted by clause (b) of Section 7.2.2 as in effect on the Effective Date, by
clause (d) of Section 7.2.2 as to the assets financed with the proceeds of such
Indebtedness or by clause (e) of Section 7.2.2) prohibiting
(a) the creation or assumption of any Lien upon its properties,
revenues or assets, whether now owned or hereafter acquired;
(b) the ability of the Borrower or any other Obligor to amend or
otherwise modify this Agreement or any other Loan Document; or
(c) the ability of any Subsidiary to make any payments, directly
or indirectly, to the Borrower by way of dividends, advances, repayments
of loans or advances, reimbursements of management and other
intercompany charges, expenses and accruals or other returns on
investments, or any other agreement or arrangement which restricts the
ability of any such Subsidiary to make any payment, directly or
indirectly, to the Borrower.
SECTION 7.2.14. Sale and Leaseback. The Borrower will not, and will not
permit any of its Subsidiaries to, enter into any agreement or arrangement with
any other Person providing for the leasing by the Borrower or any of its
Subsidiaries of real or personal property which has been or is to be sold or
transferred by the Borrower or any of its Subsidiaries to such other Person or
to any other Person to whom funds have been or are to be
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advanced by such Person on the security of such property or rental obligations
of the Borrower or any of its Subsidiaries (a "Sale Leaseback Transaction");
provided, that the Borrower and its Subsidiaries may
(a) enter into a Sale Leaseback Transaction with respect to any
of the SLB Properties; and
(b) enter into a Sale Leaseback Transaction with respect to any
Investments or constituting Permitted Acquisitions,
provided, however, that (i) any such permitted Sale Leaseback Transaction in
excess of $500,000 is consummated for fair value as determined in good faith by
the Board of Directors of the Borrower and (ii) no new such Sale Leaseback
Transaction otherwise permitted by clause (a) or (b) shall be permitted if a
Default has occurred and is continuing or would result therefrom.
SECTION 7.2.15. Limitations on Investments, etc. in Designated
Subsidiaries. Notwithstanding any other provision or term to the contrary
contained in this Credit Agreement or any other Loan Document, in no event will
the sum of aggregate amount of loans or advances owing to the Borrower and its
Subsidiaries (other than Designated Subsidiaries) from Designated Subsidiaries,
Investments made by the Borrower and its Subsidiaries (other than Designated
Subsidiaries) in Designated Subsidiaries and the fair market value of assets
contributed by the Borrower and its Subsidiaries (other than Designated
Subsidiaries) to Designated Subsidiaries exceed $5,000,000 at any time
outstanding.
ARTICLE VIII
EVENTS OF DEFAULT
SECTION 8.1. Listing of Events of Default. Each of the following events
or occurrences described in this Section 8.1
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shall constitute an "Event of Default".
SECTION 8.1.1. Non-Payment of Obligations. The Borrower shall default in
the payment or prepayment when due of
(a) any Reimbursement Obligation or any deposit of cash for
collateral purposes pursuant to Section 2.6.2 or Section 2.6.4, as the
case may be;
(b) any principal of or interest on any Loan; or
(c) any fee described in Article III or of any other Obligation
and such default shall continue unremedied for a period of five days.
SECTION 8.1.2. Breach of Warranty. Any representation or warranty of the
Borrower or any other Obligor made or deemed to be made hereunder or in any
other Loan Document executed by it or any other writing or certificate furnished
by or on behalf of the Borrower or any other Obligor to the Administrative
Agent, any Issuer or any Lender for the purposes of or in connection with this
Agreement or any such other Loan Document (including any certificates delivered
pursuant to Article V), is or shall be incorrect when made or deemed to have
been made in any material respect.
SECTION 8.1.3. Non-Performance of Certain Covenants and Obligations. The
Borrower shall default in the due performance and observance of any of its
obligations under Section 7.1.9 or Section 7.2.
SECTION 8.1.4. Non-Performance of Other Covenants and Obligations. The
Borrower or any other Obligor shall default in the due performance and
observance of any other agreement contained herein or in any other Loan Document
executed by it, and such default shall continue unremedied for a period of 30
days after notice thereof shall have been given to the Borrower by the
Administrative Agent or any Lender.
SECTION 8.1.5. Defaulted Debt. A default shall occur in the payment when
due (subject to any applicable grace or cure period), whether by acceleration or
otherwise, of any Defaulted Debt (other than Defaulted Debt described in Section
8.1.1) of
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the Borrower or any of its Subsidiaries having a principal amount, individually
or in the aggregate, in excess of $1,500,000, or a default shall occur in the
performance or observance of any obligation or condition with respect to such
Defaulted Debt (subject to any applicable grace or cure period) other than any
Hedging Obligation if the effect of such default is to accelerate the maturity
of any such Defaulted Debt or such default shall permit the holder or holders of
such Defaulted Debt, or any trustee or agent for such holders, to cause or
declare such Defaulted Debt to become due and payable or to require such
Defaulted Debt to be prepaid, redeemed, purchased or defeased, or to cause an
offer to purchase or defease such Defaulted Debt to be required to be made,
prior to its expressed maturity.
SECTION 8.1.6. Judgments. Any judgment or order for the payment of money
in excess of $1,500,000 (exclusive of any amounts to the extent covered by
insurance (less any applicable deductible) or indemnification and as to which
the insurer or the indemnifying party, as the case may be, has not denied
coverage in writing) shall be rendered against the Borrower or any Obligor and
either
(a) enforcement proceedings shall have been commenced by any
creditor upon such judgment or order; or
(b) there shall be any period of 20 consecutive days during
which a stay of enforcement of such judgment or order, by reason of a
pending appeal or otherwise, shall not be in effect.
SECTION 8.1.7. Pension Plans. Any of the following events shall occur
with respect to any Pension Plan
(a) the institution of any steps by the Borrower, any member of
its Controlled Group or any other Person to terminate a Pension Plan if,
as a result of such termination, the Borrower or any such member would
reasonably expect to be required to make a contribution to such Pension
Plan, or would reasonably expect to incur a liability or obligation to
such Pension Plan, in excess of $1,000,000; or
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(b) a contribution failure occurs with respect to any Pension
Plan sufficient to give rise to a Lien under section 302(f) of ERISA.
SECTION 8.1.8. Control of the Borrower. Any Change in Control shall
occur.
SECTION 8.1.9. Bankruptcy, Insolvency, etc. The Parent, the Borrower,
any of its Subsidiaries or any other Obligor shall
(a) become insolvent or generally fail to pay, or admit in
writing its inability or unwillingness generally to pay, debts as they
become due;
(b) apply for, consent to, or acquiesce in, the appointment of a
trustee, receiver, sequestrator or other custodian for the Parent, the
Borrower or any of its Subsidiaries or any other Obligor or any property
of any thereof, or make a general assignment for the benefit of
creditors;
(c) in the absence of such application, consent or acquiescence,
permit or suffer to exist the appointment of a trustee, receiver,
sequestrator or other custodian for the Parent, the Borrower or any of
its Subsidiaries or any other Obligor or for a substantial part of the
property of any thereof, and such trustee, receiver, sequestrator or
other custodian shall not be discharged within 60 days, provided that
the Parent, the Borrower, each Subsidiary and each other Obligor hereby
expressly authorizes the Administrative Agent and each Lender to appear
in any court conducting any relevant proceeding during such 60-day
period to preserve and defend their rights under the Loan Documents;
(d) permit or suffer to exist the commencement of any bankruptcy,
reorganization, debt arrangement or other case or proceeding under any
bankruptcy or insolvency law, or any dissolution, winding up or
liquidation proceeding, in respect of the Parent, the Borrower or any of
its Subsidiaries or any other Obligor, and, if any such case or
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proceeding is not commenced by the Parent, the Borrower or such
Subsidiary or such other Obligor, such case or proceeding shall be
consented to or acquiesced in by the Parent, the Borrower or such
Subsidiary or such other Obligor or shall result in the entry of an
order for relief or shall remain for 60 days undismissed, provided that
the Parent, the Borrower, each Subsidiary and each other Obligor hereby
expressly authorizes the Administrative Agent and each Lender to appear
in any court conducting any relevant proceeding during such 60-day
period to preserve and defend their rights under the Loan Documents; or
(e) take any corporate action authorizing, or in furtherance of,
any of the foregoing.
SECTION 8.1.10. Impairment of Security, etc. Any Loan Document, or any
Lien granted thereunder, shall (except in accordance with its terms), in whole
or in part, terminate, cease to be effective or cease to be the legally valid,
binding and enforceable obligation of any Obligor party thereto with respect to
any portion of the Collateral having a value in excess of $1,500,000; the
Borrower, any other Obligor or any other party shall, directly or indirectly,
contest in any manner such effectiveness, validity, binding nature or
enforceability; or any Lien securing any Obligation shall, with respect to any
portion of the Collateral having a value in excess of $1,500,000, cease to be a
perfected first priority Lien (subject to Liens permitted to exist under Section
7.2.3).
SECTION 8.2. Action if Bankruptcy. If any Event of Default described in
clauses (a) through (d) of Section 8.1.9 shall occur, the Commitments (if not
theretofore terminated) shall automatically terminate and the outstanding
principal amount of all outstanding Loans and all other Obligations (including
Reimbursement Obligations) shall automatically be and become immediately due and
payable, without notice or demand and the Borrower shall automatically and
immediately be obligated to deposit with the Administrative Agent cash
collateral to be held in an interest-bearing account in an amount equal to all
Letter of Credit Outstandings.
SECTION 8.3. Action if Other Event of Default. If any Event of Default
(other than any Event of Default described in
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clauses (a) through (d) of Section 8.1.9) shall occur for any reason, whether
voluntary or involuntary, and be continuing, the Administrative Agent, upon the
direction of the Required Lenders, shall by notice to the Borrower declare all
or any portion of the outstanding principal amount of the Loans and other
Obligations (including Reimbursement Obligations) to be due and payable and/or
the Commitments (if not theretofore terminated) to be terminated, whereupon the
full unpaid amount of such Loans and other Obligations which shall be so
declared due and payable shall be and become immediately due and payable,
without further notice, demand or presentment, and/or, as the case may be, the
Commitments shall terminate and the Borrower shall automatically and immediately
be obligated to deposit with the Administrative Agent cash collateral to be held
in an interest-bearing account in an amount equal to all Letter of Credit
Outstandings.
ARTICLE IX
THE ADMINISTRATIVE AGENT
SECTION 9.1. Actions. Each Lender hereby appoints Scotiabank as its
Administrative Agent under and for purposes of this Agreement, the Notes and
each other Loan Document. Each Lender authorizes the Administrative Agent to act
on behalf of such Lender under this Agreement, the Notes and each other Loan
Document and, in the absence of other written instructions from the Required
Lenders received from time to time by the Administrative Agent (with respect to
which the Administrative Agent agrees that it will comply, except as otherwise
provided in this Section or as otherwise advised by counsel), to exercise such
powers hereunder and thereunder as are specifically delegated to or required of
the Administrative Agent by the terms hereof and thereof, together with such
powers as may be reasonably incidental thereto. Each Lender hereby indemnifies
(which indemnity shall survive any termination of this Agreement) the
Administrative Agent, pro rata according to such Lender's Percentage, from and
against any and all liabilities, obligations, losses, damages, claims, costs or
expenses of any kind or nature whatsoever which may at any time be imposed on,
incurred by, or asserted against, the Administrative Agent in any way relating
to or arising out of this Agreement, the Notes and any other Loan Document,
including reasonable attorneys' fees,
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and as to which the Administrative Agent is not reimbursed by the Borrower;
provided, however, that no Lender shall be liable for the payment of any portion
of such liabilities, obligations, losses, damages, claims, costs or expenses
which are determined by a court of competent jurisdiction in a final proceeding
to have resulted solely from the Administrative Agent's gross negligence or
wilful misconduct. The Administrative Agent shall be required to take any action
hereunder, under the Notes or under any other Loan Document, or to prosecute or
defend any suit in respect of this Agreement, the Notes or any other Loan
Document, unless it is indemnified hereunder to its satisfaction. If any
indemnity in favor of the Administrative Agent shall be or become, in the
Administrative Agent's determination, inadequate, the Administrative Agent may
call for additional indemnification from the Lenders and cease to do the acts
indemnified against hereunder until such additional indemnity is given.
SECTION 9.2. Funding Reliance, etc. Unless the Administrative Agent
shall have been notified by telephone, confirmed in writing, by any Lender by
5:00 p.m., New York City time, on the Business Day prior to a Borrowing that
such Lender will not make available the amount which would constitute its
Percentage of such Borrowing on the date specified therefor, the Administrative
Agent may assume that such Lender has made such amount available to the
Administrative Agent and, in reliance upon such assumption, make available to
the Borrower a corresponding amount. If and to the extent that such Lender shall
not have made such amount available to the Administrative Agent, such Lender and
the Borrower severally agree to repay the Administrative Agent forthwith on
demand such corresponding amount together with interest thereon, for each day
from the date the Administrative Agent made such amount available to the
Borrower to the date such amount is repaid to the Administrative Agent, at the
interest rate applicable at the time to Loans comprising such Borrowing (in the
case of the Borrower) and (in the case of a Lender), at the Federal Funds Rate
(for the first two Business Days after which such amount has not been repaid,
and thereafter at the interest rate applicable to Loans comprising such
Borrowing.
SECTION 9.3. Exculpation. Neither the Administrative Agent nor any of
their respective directors, officers, employees or agents shall be liable to any
Lender for any action taken or
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omitted to be taken by it under this Agreement or any other Loan Document, or in
connection herewith or therewith, except for its own wilful misconduct or gross
negligence, nor responsible for any recitals or warranties herein or therein,
nor for the effectiveness, enforceability, validity or due execution of this
Agreement or any other Loan Document, nor for the creation, perfection or
priority of any Liens purported to be created by any of the Loan Documents, or
the validity, genuineness, enforceability, existence, value or sufficiency of
any collateral security, nor to make any inquiry respecting the performance by
any Obligor of its obligations hereunder or under any other Loan Document. Any
such inquiry which may be made by the Administrative Agent shall not obligate it
to make any further inquiry or to take any action. The Administrative Agent
shall be entitled to rely upon advice of counsel concerning legal matters and
upon any notice, consent, certificate, statement or writing which the
Administrative Agent believes to be genuine and to have been presented by a
proper Person.
SECTION 9.4. Successor. The Administrative Agent may resign as such at
any time upon at least 30 days' prior notice to the Borrower and all Lenders. If
the Administrative Agent at any time shall resign, the Required Lenders may with
the consent of the Borrower (such consent not to be unreasonably withheld or
delayed) appoint another Lender as a successor Administrative Agent which shall
thereupon become the Administrative Agent hereunder. If no successor
Administrative Agent shall have been so appointed by the Required Lenders with
the consent of the Borrower (such consent not to be unreasonably withheld or
delayed), and shall have accepted such appointment, within 30 days after the
retiring Administrative Agent's giving notice of resignation, then the retiring
Administrative Agent may appoint a successor Administrative Agent, which shall
be one of the Lenders or a commercial banking institution organized under the
laws of the U.S. (or any State thereof) or a U.S. branch or agency of a
commercial banking institution, and having a combined capital and surplus of at
least $500,000,000. Upon the acceptance of any appointment as Administrative
Agent hereunder by a successor Administrative Agent, such successor
Administrative Agent shall be entitled to receive from the retiring
Administrative Agent such documents of transfer and assignment as such successor
Administrative Agent may reasonably request, and shall thereupon succeed to and
become vested with
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all rights, powers, privileges and duties of the retiring Administrative Agent,
and the retiring Administrative Agent shall be discharged from its duties and
obligations under this Agreement. After any retiring Administrative Agent's
resignation hereunder as the Administrative Agent, the provisions of
(a) this Article IX shall inure to its benefit as to any actions
taken or omitted to be taken by it while it was the Administrative Agent
under this Agreement; and
(b) Section 10.3 and Section 10.4 shall continue to inure to its
benefit.
SECTION 9.5. Loans by Scotiabank. Scotiabank shall have the same rights
and powers with respect to (x) the Credit Extensions made by it or any of its
Affiliates, and (y) the Notes held by it or any of its Affiliates as any other
Lender and may exercise the same as if it were not the Administrative Agent.
Scotiabank and its Affiliates may accept deposits from, lend money to, and
generally engage in any kind of business with the Borrower or any Subsidiary or
Affiliate of the Borrower as if Scotiabank were not the Administrative Agent
hereunder.
SECTION 9.6. Credit Decisions. Each Lender acknowledges that it has,
independently of the Administrative Agent and each other Lender, and based on
such Lender's review of the financial information of the Borrower, this
Agreement, the other Loan Documents (the terms and provisions of which being
satisfactory to such Lender) and such other documents, information and
investigations as such Lender has deemed appropriate, made its own credit
decision to extend its Commitments. Each Lender also acknowledges that it will,
independently of the Administrative Agent and each other Lender, and based on
such other documents, information and investigations as it shall deem
appropriate at any time, continue to make its own credit decisions as to
exercising or not exercising from time to time any rights and privileges
available to it under this Agreement or any other Loan Document.
SECTION 9.7. Copies, etc. The Administrative Agent shall give prompt
notice to each Lender of each notice or request required or permitted to be
given to the Administrative Agent by the Borrower pursuant to the terms of this
Agreement (unless
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concurrently delivered to the Lenders by the Borrower). The Administrative Agent
will distribute to each Lender each document or instrument received for its
account and copies of all other communications received by the Administrative
Agent from the Borrower for distribution to the Lenders by the Administrative
Agent in accordance with the terms of this Agreement or any other Loan Document.
ARTICLE X
MISCELLANEOUS PROVISIONS
SECTION 10.1. Waivers, Amendments, etc. The provisions of this Agreement
and of each other Loan Document may from time to time be amended, modified or
waived, if such amendment, modification or waiver is in writing and consented to
by the Borrower and the Required Lenders; provided, however, that no such
amendment, modification or waiver shall:
(a) modify any requirement hereunder that any particular action
be taken by all the Lenders or by the Required Lenders, extend any
Commitment Termination Date or modify this Section 10.1 without the
consent of all Lenders;
(b) increase the aggregate amount of any Lender's Percentage of
any Commitment Amount, increase the aggregate amount of any Loans
required to be made by a Lender pursuant to its Commitments or reduce or
delay the payment of any fees described in Article III payable to any
Lender without the consent of such Lender;
(c) extend the Stated Maturity Date, or reduce the principal
amount of or rate of interest on any Lender's Loan, or postpone the date
of payment of interest on any Lender's Loan, without the consent of such
Lender (it being understood and agreed, however, that any vote to
rescind any acceleration made pursuant to Section 8.2 and Section 8.3 of
amounts owing with respect to the Loans and other Obligations shall only
require the vote of the Required Lenders);
(d) change the definition of "Required Lenders" or any
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requirement hereunder that any particular action be taken by
all Lenders without the consent of all Lenders;
(e) modify Section 2.6 or increase the Stated Amount of any
Letter of Credit unless consented to by the Issuer of such Letter of
Credit;
(f) except as permitted by a Loan Document, release (i) any
Guarantor from its obligations under a Guaranty, or (ii) any of the
Pledged Shares (as such term is defined in any Pledge Agreement) or all
or substantially all of the collateral securing the Obligations, in
either case without the consent of all Lenders as expressly provided
herein or therein; or
(g) affect adversely the interests, rights or obligations of the
Administrative Agent qua the Administrative Agent, or any Issuer qua
Issuer, unless consented to by the Administrative Agent or such Issuer,
as the case may be.
No failure or delay on the part of the Administrative Agent, any Issuer or any
Lender in exercising any power or right under this Agreement or any other Loan
Document shall operate as a waiver thereof, nor shall any single or partial
exercise of any such power or right preclude any other or further exercise
thereof or the exercise of any other power or right. No notice to or demand on
the Borrower in any case shall entitle it to any notice or demand in similar or
other circumstances. No waiver or approval by the Administrative Agent, any
Issuer or any Lender under this Agreement or any other Loan Document shall,
except as may be otherwise stated in such waiver or approval, be applicable to
subsequent transactions. No waiver or approval hereunder shall require any
similar or dissimilar waiver or approval thereafter to be granted hereunder.
SECTION 10.2. Notices. All notices and other communications provided to
any party hereto under this Agreement or any other Loan Document shall be in
writing or by facsimile and addressed, delivered or transmitted to such party at
its address or facsimile number set forth below its signature hereto or set
forth in the Lender Assignment Agreement or at such other address or facsimile
number as may be designated by such party in
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a notice to the other parties. Any notice, if mailed and properly addressed with
postage prepaid or if properly addressed and sent by pre-paid courier service,
shall be deemed given when received; any notice, if transmitted by facsimile,
shall be deemed given when the confirmation of transmission thereof is received
by the transmitter.
SECTION 10.3. Payment of Costs and Expenses. The Borrower agrees to pay
on demand all reasonable expenses of the Administrative Agent (including the
reasonable fees and out-of-pocket expenses of counsel to the Administrative
Agent and of local counsel, if any, who may be retained by counsel to the
Administrative Agent) in connection with
(a) the negotiation, preparation, execution and delivery of this
Agreement and of each other Loan Document, including schedules and
exhibits, and any amendments, waivers, consents, supplements or other
modifications to this Agreement or any other Loan Document as may from
time to time hereafter be required, whether or not the transactions
contemplated hereby are consummated; and
(b) the filing, recording, refiling or rerecording of any Loan
Document and/or any Uniform Commercial Code financing statements
relating thereto and all amendments, supplements, amendments and
restatements and other modifications to any thereof and any and all
other documents or instruments of further assurance required to be filed
or recorded or refiled or rerecorded by the terms hereof or the terms of
any Loan Document; and
(c) the preparation and review of the form of any document or
instrument relevant to this Agreement or any other Loan Document.
The Borrower further agrees to pay, and to save the Administrative Agent, each
Issuer and the Lenders harmless from all liability for, any stamp or other taxes
(other than Taxes payable in accordance with Section 4.6) which may be payable
in connection with the execution or delivery of this Agreement, the Credit
Extensions hereunder, or the issuance of the Notes, Letters of Credit or any
other Loan Documents. The Borrower also agrees to reimburse the Administrative
Agent, each Issuer and
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each Lender upon demand for all reasonable out-of-pocket expenses (including
reasonable attorneys' fees and legal expenses of counsel to the Administrative
Agent, each Issuer and the Lenders) incurred by the Administrative Agent, each
Issuer or such Lenders in connection with (x) the negotiation of any
restructuring or "work-out" with the Borrower, whether or not consummated, of
any Obligations and (y) the enforcement of any Obligations.
SECTION 10.4. Indemnification. In consideration of the execution and
delivery of this Agreement by each Lender and the extension of the Commitments,
the Borrower hereby indemnifies, exonerates and holds the Administrative Agent,
each Issuer and each Lender and each of their respective officers, directors,
employees and agents (collectively, the "Indemnified Parties") free and harmless
from and against any and all actions, causes of action, suits, losses, costs,
liabilities and damages, and expenses incurred in connection therewith
(irrespective of whether any such Indemnified Party is a party to the action for
which indemnification hereunder is sought), including reasonable attorneys' fees
and disbursements (collectively, the "Indemnified Liabilities"), incurred by the
Indemnified Parties or any of them as a result of, or arising out of, or
relating to
(a) any transaction financed or to be financed in whole or in
part, directly or indirectly, with the proceeds of any Credit Extension,
including all Indemnified Liabilities arising in connection with the
transactions contemplated hereby;
(b) the entering into and performance of this Agreement and any
other Loan Document by any of the Indemnified Parties (including any
action brought by or on behalf of the Borrower as the result of any
determination by the Required Lenders pursuant to Article V not to fund
any Credit Extension);
(c) any investigation, litigation or proceeding related to any
acquisition or proposed acquisition by the Borrower or any of its
Subsidiaries of all or any portion of the stock or assets of any Person,
whether or not the Administrative Agent, any Issuer or any Lender is
party thereto;
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(d) any investigation, litigation or proceeding related to any
environmental cleanup, audit, compliance or other matter relating to the
Borrower, its Subsidiaries and their real properties and the protection
of the environment or the Release by the Borrower or any of its
Subsidiaries of any Hazardous Material;
(e) the presence on or under, or the escape, seepage, leakage,
spillage, discharge, emission, discharging or releases from, any real
property owned or operated by the Borrower or any Subsidiary thereof of
any Hazardous Material (including any losses, liabilities, damages,
injuries, costs, expenses or claims asserted or arising under any
Environmental Law), regardless of whether caused by, or within the
control of, the Borrower or such Subsidiary; or
(f) the Administrative Agent's and each Lender's Environmental
Liability except that the Borrower shall have no obligation to indemnify
any Indemnified Party with respect to conditions at real properties
owned or leased by Borrower or a Subsidiary thereof which are created
after the Administrative Agent or any Lender has taken ownership,
possession or control of such properties, unless created by the Borrower
or such Subsidiary (the indemnification herein shall survive repayment
of the Notes and any transfer of the property of the Borrower or any of
its Subsidiaries by foreclosure or by a deed in lieu of foreclosure for
the Administrative Agent's or any Lender's Environmental Liability,
regardless of whether caused by, or within the control of, the Borrower
or such Subsidiary);
except for any such Indemnified Liabilities arising for the account of a
particular Indemnified Party by reason of the relevant Indemnified Party's gross
negligence or wilful misconduct. The Borrower and its successors and assigns
hereby waive, release and agree not to make any claim or bring any cost recovery
action related to the real properties owned or leased by, or the operations of,
Borrower and its Subsidiaries and their successors and assigns, against, the
Administrative Agent, any Issuer or any Lender under CERCLA or any state
equivalent, or any similar law now existing or hereafter enacted; provided, that
this release shall not apply to claims related to conditions created after the
Administrative Agent or any Lender has taken
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ownership, possession or control of real properties owned or leased by the
Borrower or a Subsidiary thereof unless such condition was created by the
Borrower or such Subsidiary. It is expressly understood and agreed that to the
extent that any of such Persons is strictly liable under any Environmental Laws,
the Borrower's obligation to such Person under this indemnity shall likewise be
without regard to fault on the part of the Borrower with respect to the
violation or condition which results in liability of such Person. If and to the
extent that the foregoing undertaking may be unenforceable for any reason, the
Borrower hereby agrees to make the maximum contribution to the payment and
satisfaction of each of the Indemnified Liabilities which is permissible under
applicable law.
SECTION 10.5. Survival. The obligations of the Borrower under Sections
4.3, 4.4, 4.5, 4.6, 10.3 and 10.4, and the obligations of the Lenders under
Section 9.1, shall in each case survive any assignment from one Lender to
another (in the case of Sections 10.3 and 10.4) and any termination of this
Agreement, the payment in full of all the Obligations and the termination of all
the Commitments. The representations and warranties made by the Borrower and
each other Obligor in this Agreement and in each other Loan Document shall
survive the execution and delivery of this Agreement and each such other Loan
Document.
SECTION 10.6. Severability. Any provision of this Agreement or any other
Loan Document which is prohibited or unenforceable in any jurisdiction shall, as
to such provision and such jurisdiction, be ineffective to the extent of such
prohibition or unenforceability without invalidating the remaining provisions of
this Agreement or such Loan Document or affecting the validity or enforceability
of such provision in any other jurisdiction.
SECTION 10.7. Headings. The various headings of this Agreement and of
each other Loan Document are inserted for convenience only and shall not affect
the meaning or interpretation of this Agreement or such other Loan Document or
any provisions hereof or thereof.
SECTION 10.8. Execution in Counterparts, Effectiveness, etc. This
Agreement may be executed by the parties hereto in several counterparts, each of
which shall be an original and all
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of which shall constitute together but one and the same agreement. This
Agreement shall become effective when counterparts hereof executed on behalf of
the Borrower, the Administrative Agent and each Lender (or notice thereof
satisfactory to the Administrative Agent) shall have been received by the
Administrative Agent and notice thereof shall have been given by the
Administrative Agent to the Borrower and each Lender.
SECTION 10.9. Governing Law; Entire Agreement. THIS AGREEMENT, THE NOTES
AND EACH OTHER LOAN DOCUMENT SHALL EACH BE DEEMED TO BE A CONTRACT MADE UNDER
AND GOVERNED BY THE INTERNAL LAWS OF THE STATE OF NEW YORK (INCLUDING FOR SUCH
PURPOSE SECTIONS 5-1401 AND 5-1402 OF THE GENERAL OBLIGATIONS LAW OF THE STATE
OF NEW YORK), EXCEPT TO THE EXTENT THAT THE VALIDITY OR PERFECTION OF A SECURITY
INTEREST HEREUNDER, OR REMEDIES HEREUNDER, IN RESPECT OF ANY PARTICULAR
COLLATERAL ARE GOVERNED BY THE LAWS OF A JURISDICTION OTHER THAN THE STATE OF
NEW YORK. This Agreement, the Notes, the other Loan Documents and the Fee Letter
constitute the entire understanding among the parties hereto with respect to the
subject matter hereof and thereof and supersede any prior agreements, written or
oral, with respect thereto.
SECTION 10.10. Successors and Assigns. This Agreement shall be binding
upon and shall inure to the benefit of the parties hereto and their respective
successors and assigns; provided, however, that:
(a) the Borrower may not assign or transfer its rights or
obligations hereunder without the prior written consent of the
Administrative Agent and all Lenders; and
(b) the rights of sale, assignment and transfer of the Lenders
are subject to Section 10.11.
SECTION 10.11. Sale and Transfer of Loans and Notes; Participations in
Loans and Notes. Each Lender may assign, or sell participations in, its Loans,
Letters of Credit and Commitments to one or more other Persons in accordance
with this Section 10.11.
SECTION 10.11.1. Assignments. Upon prior notice to the
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Borrower and the Administrative Agent, any Lender,
(a) with the consent of the Borrower and the Administrative Agent
(which consents shall not be unreasonably delayed or withheld) may at
any time assign and delegate to one or more commercial banks or other
financial institutions, and
(b) with notice to the Borrower and the Administrative Agent, but
without the consent of the Borrower or the Administrative Agent, may
assign and delegate to any of its Affiliates or to any other Lender
(each Person described in either of the foregoing clauses as being the Person to
whom such assignment and delegation is to be made, being hereinafter referred to
as an "Assignee Lender"), all or any fraction of such Lender's total Loans,
Letter of Credit Outstandings and Commitments in a minimum aggregate amount of
$5,000,000 (or, if less, the entire remaining amount of such Lender's Loans,
Letter of Credit Outstandings and Commitment); provided, however, that the
assigning Lender must assign a pro-rata portion of each of its Commitment, Loans
and interest in Letters of Credit Outstandings. The Borrower and each other
Obligor and the Administrative Agent shall be entitled to continue to deal
solely and directly with such Lender in connection with the interests so
assigned and delegated to an Assignee Lender until
(c) notice of such assignment and delegation, together with (i)
payment instructions, (ii) the Internal Revenue Service Forms or other
statements contemplated or required to be delivered pursuant to Section
4.6, if applicable, and (iii) addresses and related information with
respect to such Assignee Lender, shall have been delivered to the
Borrower and the Administrative Agent by such Lender and such Assignee
Lender;
(d) such Assignee Lender shall have executed and delivered to the
Borrower and the Administrative Agent a Lender Assignment Agreement,
accepted by the Administrative Agent; and
(e) the processing fees described below shall have
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been paid.
From and after the date that the Administrative Agent accepts such Lender
Assignment Agreement, (x) the Assignee Lender thereunder shall be deemed
automatically to have become a party hereto and to the extent that rights and
obligations hereunder have been assigned and delegated to such Assignee Lender
in connection with such Lender Assignment Agreement, shall have the rights and
obligations of a Lender hereunder and under the other Loan Documents, and (y)
the assignor Lender, to the extent that rights and obligations hereunder have
been assigned and delegated by it in connection with such Lender Assignment
Agreement, shall be released from its obligations hereunder and under the other
Loan Documents. Within five Business Days after its receipt of notice that the
Administrative Agent has received and accepted an executed Lender Assignment
Agreement, but subject to clause (d) above, the Borrower shall execute and
deliver to the Administrative Agent (for delivery to the relevant Assignee
Lender) a new Note evidencing such Assignee Lender's assigned Loans and
Commitments and, if the assignor Lender has retained Loans and Commitments
hereunder, a replacement Note in the principal amount of the Loans and
Commitments retained by the assignor Lender hereunder (such Note to be in
exchange for, but not in payment of, the Note then held by such assignor
Lender). Each such Note shall be dated the date of the predecessor Note. Accrued
interest on that part of each predecessor Note evidenced by a new Note, and
accrued fees, shall be paid as provided in the Lender Assignment Agreement.
Accrued interest on that part of each predecessor Note evidenced by a
replacement Note shall be paid to the assignor Lender. Accrued interest and
accrued fees shall be paid at the same time or times provided in the predecessor
Note and in this Agreement. Such assignor Lender or such Assignee Lender must
also pay a processing fee in the amount of $3,500 to the Administrative Agent
upon delivery of any Lender Assignment Agreement. Any attempted assignment and
delegation not made in accordance with this Section 10.11.1 shall be null and
void. Notwithstanding anything to the contrary set forth above, any Lender may
(without requesting the consent of the Borrower or the Administrative Agent)
pledge its Loans to a Federal Reserve Bank in support of borrowings made by such
Lender from such Federal Reserve Bank.
SECTION 10.11.2. Participations. Any Lender may at any
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time sell to one or more commercial banks or other Persons (each of such
commercial banks and other Persons being herein called a "Participant")
participating interests in any of the Loans, Commitments, or other interests of
such Lender hereunder; provided, however, that
(a) no participation contemplated in this Section 10.11 shall
relieve such Lender from its Commitments or its other obligations
hereunder or under any other Loan Document;
(b) such Lender shall remain solely responsible for the
performance of its Commitments and such other obligations;
(c) the Borrower and each other Obligor and the Administrative
Agent shall continue to deal solely and directly with such Lender in
connection with such Lender's rights and obligations under this
Agreement and each of the other Loan Documents;
(d) no Participant, unless such Participant is an Affiliate of
such Lender or is itself a Lender, shall be entitled to require such
Lender to take or refrain from taking any action hereunder or under any
other Loan Document, except that such Lender may agree with any
Participant that such Lender will not, without such Participant's
consent, take any actions of the type described in clause (a), (b), (f)
or, to the extent requiring the consent of each Lender, clause (c) of
Section 10.1; and
(e) the Borrower shall not be required to pay any amount under
any provision of this Agreement that is greater than the amount which it
would have been required to pay had no participating interest been sold.
The Borrower acknowledges and agrees that each Participant, for purposes of
Sections 4.3, 4.4, 4.5, 4.6, 4.8 and 4.9 shall be considered a Lender and that
information delivered to a Lender pursuant to the terms of this Agreement may be
furnished to a Participant. Each Lender shall give notice to the Borrower of the
name of any Person to which such Lender has sold a
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participating interest under the provisions hereof. Each Participant shall only
be indemnified for increased costs pursuant to Section 4.3, 4.5 or 4.6 if and to
the extent that the Lender which sold such participating interest to such
Participant concurrently is entitled to make, and does make, a claim on the
Borrower for such increased costs. Any Lender that sells a participating
interest in any Loan, Commitment or other interest to a Participant under this
Section 10.11.2 shall indemnify and hold harmless the Borrower and the
Administrative Agent from and against any taxes, penalties, interest or other
costs or losses (including, without limitation, reasonable attorneys' fees and
expenses) incurred or payable by the Borrower or the Administrative Agent as a
result of the failure of the Borrower or the Administrative Agent to comply with
its obligations to deduct or withhold any Taxes from any payments made pursuant
to this Agreement to such Lender or the Administrative Agent, as the case may
be, which Taxes would not have been incurred or payable if such Participant had
been a Non-U.S. Lender that was entitled to deliver to the Borrower, the
Administrative Agent or such Lender, and did in fact so deliver, a duly
completed and valid Form 1001 or 4224 (or applicable successor form) entitling
such Participant to receive payments under this Agreement without deduction or
withholding of any United States federal taxes. Any attempted sale of a
participation interest not made in accordance with this Section 10.11.2 shall be
null and void.
SECTION 10.12. Other Transactions. Nothing contained herein shall
preclude the Administrative Agent, any Issuer or any other Lender from engaging
in any transaction, in addition to those contemplated by this Agreement or any
other Loan Document, with the Borrower or any of its Affiliates in which the
Borrower or such Affiliate is not restricted hereby from engaging with any other
Person.
SECTION 10.13. Execution on Behalf of Corporation. Any signature by any
Authorized Officer on this Agreement, any Loan Document and any other instrument
and certificate executed or to be executed pursuant to or in connection with
this Agreement or such other Loan Documents is provided only in such Authorized
Officer's capacity as a corporate officer, and not in any way in such Authorized
Officer's personal capacity.
SECTION 10.14. Forum Selection and Consent to Jurisdiction.
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ANY LITIGATION BASED HEREON, OR ARISING OUT OF, UNDER, OR IN CONNECTION WITH,
THIS AGREEMENT OR ANY OTHER LOAN DOCUMENT, OR ANY COURSE OF CONDUCT, COURSE OF
DEALING, STATEMENTS (WHETHER ORAL OR WRITTEN) OR ACTIONS OF THE ADMINISTRATIVE
AGENT, THE LENDERS, ANY ISSUER OR THE BORROWER IN CONNECTION HEREWITH OR
THEREWITH SHALL BE BROUGHT AND MAINTAINED EXCLUSIVELY IN THE COURTS OF THE STATE
OF NEW YORK OR IN THE UNITED STATES DISTRICT COURT FOR THE SOUTHERN DISTRICT OF
NEW YORK; PROVIDED, HOWEVER, THAT ANY SUIT SEEKING ENFORCEMENT AGAINST ANY
COLLATERAL OR OTHER PROPERTY MAY BE BROUGHT, AT THE ADMINISTRATIVE AGENT'S
OPTION, IN THE COURTS OF ANY JURISDICTION WHERE SUCH COLLATERAL OR OTHER
PROPERTY MAY BE FOUND. THE BORROWER HEREBY EXPRESSLY AND IRREVOCABLY SUBMITS TO
THE JURISDICTION OF THE COURTS OF THE STATE OF NEW YORK AND OF THE UNITED STATES
DISTRICT COURT FOR THE SOUTHERN DISTRICT OF NEW YORK FOR THE PURPOSE OF ANY SUCH
LITIGATION AS SET FORTH ABOVE AND IRREVOCABLY AGREES TO BE BOUND BY ANY JUDGMENT
RENDERED THEREBY IN CONNECTION WITH SUCH LITIGATION. SERVICE OF COPIES OF THE
SUMMONS AND COMPLAINT AND ANY OTHER PROCESS UPON THE BORROWER MAY BE MADE BY
MAILING OR DELIVERING A COPY OF SUCH PROCESS TO THE BORROWER IN CARE OF THE
PROCESS AGENT AT THE PROCESS AGENT'S ABOVE ADDRESS, AND THE BORROWER HEREBY
IRREVOCABLY AUTHORIZES AND DIRECTS THE PROCESS AGENT TO ACCEPT SUCH SERVICE ON
ITS BEHALF. AS AN ALTERNATIVE METHOD OF SERVICE, THE BORROWER FURTHER
IRREVOCABLY CONSENTS TO THE SERVICE OF PROCESS BY REGISTERED MAIL, POSTAGE
PREPAID, OR BY PERSONAL SERVICE WITHIN OR WITHOUT THE STATE OF NEW YORK AT THE
ADDRESS FOR NOTICES SPECIFIED IN SECTION 10.2. THE BORROWER HEREBY EXPRESSLY AND
IRREVOCABLY WAIVES, TO THE FULLEST EXTENT PERMITTED BY LAW, ANY OBJECTION WHICH
IT MAY HAVE OR HEREAFTER MAY HAVE TO THE LAYING OF VENUE OF ANY SUCH LITIGATION
BROUGHT IN ANY SUCH COURT REFERRED TO ABOVE AND ANY CLAIM THAT ANY SUCH
LITIGATION HAS BEEN BROUGHT IN AN INCONVENIENT FORUM. TO THE EXTENT THAT THE
BORROWER HAS OR HEREAFTER MAY ACQUIRE ANY IMMUNITY FROM JURISDICTION OF ANY
COURT OR FROM ANY LEGAL PROCESS (WHETHER THROUGH SERVICE OR NOTICE, ATTACHMENT
PRIOR TO JUDGMENT, ATTACHMENT IN AID OF EXECUTION OR OTHERWISE) WITH RESPECT TO
ITSELF OR ITS PROPERTY, THE BORROWER HEREBY IRREVOCABLY WAIVES TO THE FULLEST
EXTENT PERMITTED BY LAW SUCH IMMUNITY IN RESPECT OF ITS OBLIGATIONS UNDER THIS
AGREEMENT AND THE OTHER LOAN DOCUMENTS.
SECTION 10.15. Waiver of Jury Trial. THE ADMINISTRATIVE AGENT, THE
LENDERS, EACH ISSUER AND THE BORROWER HEREBY
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130
KNOWINGLY, VOLUNTARILY AND INTENTIONALLY WAIVE TO THE FULLEST EXTENT PERMITTED
BY LAW ANY RIGHTS THEY MAY HAVE TO A TRIAL BY JURY IN RESPECT OF ANY LITIGATION
BASED HEREON, OR ARISING OUT OF, UNDER, OR IN CONNECTION WITH, THIS AGREEMENT OR
ANY OTHER LOAN DOCUMENT, OR ANY COURSE OF CONDUCT, COURSE OF DEALING, STATEMENTS
(WHETHER ORAL OR WRITTEN) OR ACTIONS OF THE ADMINISTRATIVE AGENT, THE LENDERS,
EACH ISSUER OR THE BORROWER IN CONNECTION HEREWITH OR THEREWITH. THE BORROWER
ACKNOWLEDGES AND AGREES THAT IT HAS RECEIVED FULL AND SUFFICIENT CONSIDERATION
FOR THIS PROVISION (AND EACH OTHER PROVISION OF EACH OTHER LOAN DOCUMENT TO
WHICH IT IS A PARTY) AND THAT THIS PROVISION IS A MATERIAL INDUCEMENT FOR THE
ADMINISTRATIVE AGENT, THE LENDERS AND EACH ISSUER ENTERING INTO THIS AGREEMENT
AND EACH SUCH OTHER LOAN DOCUMENT.
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131
IN WITNESS WHEREOF, the parties hereto have caused this Agreement to be
executed by their respective officers thereunto duly authorized as of the day
and year first above written.
PROSOURCE SERVICES CORPORATION
By:/s/ Xxxx X. Xxxxxx xx Xxxxxxx
--------------------------------
Title: Treasurer
Address: 0000 Xxx Xxxx Xxxxxx
Xxxxx Xxxxxx, XX 00000
Facsimile No.: (000) 000-0000
Attention: Xxxx X. Xxxxxx xx Xxxxxxx
THE BANK OF NOVA SCOTIA,
as the Administrative Agent
By:/s/ Xxxxx X. Xxxxxxx
--------------------------------
Title: Relationship Manager
Address: Xxxxx 0000
000 Xxxxxxxxx Xxxxxx, X.X.
Xxxxxxx, Xxxxxxx 00000
Facsimile No.: (000) 000-0000
Attention: Xxxxx Xxxxxxx
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132
Lenders:
--------
Commitment:
100%
THE BANK OF NOVA SCOTIA, as a
Lender
By:/s/ Xxxxx X. Xxxxxxx
--------------------------------
Name: Xxxxx X. Xxxxxxx
Title: Relationship Manager
Domestic Office:
----------------
Suite 2700
000 Xxxxxxxxx Xxxxxx, X.X.
Xxxxxxx, Xxxxxxx 00000
Facsimile No.: (000) 000-0000
Attention: Xxxxx Xxxxxxx
LIBOR Office:
-------------
Suite 2700
000 Xxxxxxxxx Xxxxxx, X.X.
Xxxxxxx, Xxxxxxx 00000
Facsimile No.: (000) 000-0000
Attention: Xxxxx Xxxxxxx
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