AMENDED AND RESTATED CREDIT AGREEMENT
dated as of
February 23, 2001
and
amended and restated as of
December 4, 2003
among
THE GREAT ATLANTIC & PACIFIC
TEA COMPANY, INC.,
THE GREAT ATLANTIC & PACIFIC
COMPANY OF CANADA, LIMITED
and
The Other Borrowers Party Hereto,
as Borrowers
and
The Lenders Party Hereto,
and
JPMORGAN CHASE BANK,
as U.S. Administrative Agent and U.S. Collateral Agent
JPMORGAN CHASE BANK, TORONTO BRANCH,
as Canadian Administrative Agent and Canadian Collateral Agent
---------------------------
FLEET CAPITAL CORPORATION
and
GENERAL ELECTRIC CAPITAL CORPORATION,
as Co-Syndication Agents
GMAC COMMERCIAL FINANCE LLC
and
CONGRESS FINANCIAL CORPORATION,
as Co-Documentation Agents
=============================================================================
TABLE OF CONTENTS
ARTICLE I
Definitions
Section 1.01 Defined Terms.........................................6
Section 1.02 Classification of Loans and Borrowings...............41
Section 1.03 Terms Generally......................................41
Section 1.04 Accounting Terms; GAAP..... .........................41
Section 1.05 Currencies; Exchange Rates...........................42
Section 1.06 Borrowing Base Adjustments...........................42
Section 1.07 Amendment and Restatement............................42
ARTICLE II
The Credits
Section 2.01 Commitments..........................................44
Section 2.02 Loans and Borrowings.................................44
Section 2.03 Requests for Borrowings..............................45
Section 2.04 Acceptances..........................................46
Section 2.05 Letters of Credit....................................51
Section 2.06 Funding of Borrowings................................56
Section 2.07 Interest Elections...................................56
Section 2.08 Termination, Reduction or Reallocation
of Commitments....................................58
Section 2.09 Repayment of Loans; Evidence of Debt.................60
Section 2.10 Prepayment of Loans..................................61
Section 2.11 Fees.................................................63
Section 2.12 Interest.............................................64
Section 2.13 Alternate Rate of Interest...........................65
Section 2.14 Increased Costs......................................66
Section 2.15 Break Funding Payments...............................67
Section 2.16 Taxes................................................67
Section 2.17 Payments Generally; Pro Rata Treatment;
Sharing of Setoffs...............................69
Section 2.18 Mitigation Obligations; Replacement of Lenders.......71
Section 2.19 Money of Account, etc................................72
Section 2.20 Currency Fluctuations, etc...........................72
Section 2.21 Consolidation of Credit Facilities...................73
Section 2.22 Sale of Mortgaged Property...........................75
ARTICLE III
Representations and Warranties
Section 3.01 Organization; Powers.................................76
Section 3.02 Authorization; Enforceability........................76
Section 3.03 Governmental Approvals; No Conflicts.................76
Section 3.04 Financial Condition; No Material Adverse Change......76
Section 3.05 Properties...........................................77
Section 3.06 Litigation and Environmental Matters.................77
Section 3.07 Compliance with Laws and Agreements..................77
Section 3.08 Investment and Holding Company Status................77
Section 3.09 Taxes................................................77
Section 3.10 Employee Benefit Plans...............................78
Section 3.11 Disclosure...........................................78
Section 3.12 Subsidiaries.........................................78
Section 3.13 Insurance............................................78
Section 3.14 Labor Matters........................................78
Section 3.15 Security Documents...................................79
ARTICLE IV
Conditions
Section 4.01 Effective Date.......................................80
Section 4.02 Each Credit Event....................................83
ARTICLE V
Affirmative Covenants
Section 5.01 Financial Statements and Other Information...........83
Section 5.02 Notices of Material Events...........................85
Section 5.03 Information Regarding Collateral.....................86
Section 5.04 Existence; Conduct of Business.......................87
Section 5.05 Payment of Obligations...............................87
Section 5.06 Maintenance of Properties............................87
Section 5.07 Insurance............................................87
Section 5.08 Casualty and Condemnation............................88
Section 5.09 Books and Records; Inspection and Audit Rights.......88
Section 5.10 Compliance with Laws.................................89
Section 5.11 Use of Proceeds and Letters of Credit................89
Section 5.12 Additional Subsidiaries..............................89
Section 5.13 Tri-Party Agreements.................................89
Section 5.14 Further Assurances...................................90
Section 5.15 Control Agreements, Irrevocable
Letters of Instruction, Etc.....................90
Section 5.16 Priority of Claims Waivers...........................90
Section 5.17 Benefit Plans Payments...............................90
ARTICLE VI
Negative Covenants
Section 6.01 Indebtedness; Certain Equity Securities..............90
Section 6.02 Liens................................................92
Section 6.03 Fundamental Changes..................................93
Section 6.04 Investments, Loans, Advances, Guarantees
and Acquisitions..................................93
Section 6.05 Asset Sales..........................................94
Section 6.06 Sale and Leaseback Transactions......................95
Section 6.07 Hedging Agreements...................................95
Section 6.08 Restricted Payments; Certain Payments of
Indebtedness......................................95
Section 6.09 Transactions with Affiliates.........................96
Section 6.10 Restrictive Agreements...............................96
Section 6.11 Amendment of Material Documents......................97
Section 6.12 Fixed Charge Coverage Ratio..........................97
Section 6.13 [Reserved]...........................................97
Section 6.14 [Reserved]...........................................97
Section 6.15 Limitation on Change in Fiscal Year..................97
ARTICLE VII
Events of Default
ARTICLE VIII
The Agents
ARTICLE IX
Miscellaneous
Section 9.01 Notices.............................................102
Section 9.02 Waivers; Amendments.................................102
Section 9.03 Expenses; Indemnity; Damage Waiver..................104
Section 9.04 Successors and Assigns..............................105
Section 9.05 Survival............................................108
Section 9.06 Counterparts; Integration; Effectiveness............108
Section 9.07 Severability........................................109
Section 9.08 Right of Setoff.....................................109
Section 9.09 GOVERNING LAW; Jurisdiction; Consent
to Service of Process..............................109
Section 9.10 WAIVER OF JURY TRIAL................................110
Section 9.11 Headings............................................110
Section 9.12 Confidentiality.....................................110
Section 9.13 Interest Rate Limitation............................111
SCHEDULES:
Schedule A -- Priming Jurisdictions
Schedule B -- U.S. Distribution Centers
Schedule 1 -- Mortgaged Properties
Schedule 1(a) -- Existing Letters of Credit
Schedule 2.01 -- Commitments
Schedule 3.06 -- Disclosed Matters
Scheduled 3.10(b) -- Foreign Employee Benefit Plan Underfunding
Schedule 3.12 -- Subsidiaries
Schedule 3.13 -- Insurance
Schedule 3.15(b) -- UCC Filings
Schedule 3.15(c) -- U.S. Intellectual Property Filings
Schedule 3.15(d) -- Canadian Intellectual Property Filings
Schedule 3.15(f) -- Accounts Not Subject to Control Arrangement
Schedule 6.01 -- Existing Indebtedness
Schedule 6.02 -- Existing Liens
Schedule 6.04 -- Existing Investments
Schedule 6.10 -- Existing Restrictions
EXHIBITS:
Exhibit A -- Form of Assignment and Acceptance
Exhibit B -- Form of Borrowing Base Certificate
Exhibit C -- Form of Amended and Restated Canadian Guarantee Agreement
Exhibit D -- Form of Amended and Restated Canadian Pledge Agreement
Exhibit E -- Form of Amended and Restated Canadian Security Agreement
Exhibit F -- Form of Discount Note
Exhibit G -- Form of Amended and Restated Indemnity, Subrogation and
Contribution Agreement
Exhibit H -- Form of Perfection Certificate
Exhibit I -- Form of Amended and Restated U.S. Guarantee Agreement
Exhibit J -- Form of Amended and Restated U.S. Pledge Agreement
Exhibit K -- Form of Amended and Restated U.S. Security Agreement
Exhibit L -- Form of Notice of Drawing
Exhibit M -- [Reserved]
Exhibit N -- Form of Opinion General Counsel of the Company
Exhibit O -- Form of Opinion of Cahill Gordon & Reindel LLP
Exhibit P -- Form of Opinion of Miller Thomson LLP
AMENDED AND RESTATED CREDIT AGREEMENT dated as of December 4,
2003, among THE GREAT ATLANTIC & PACIFIC TEA COMPANY, INC., a
Maryland corporation, THE GREAT ATLANTIC & PACIFIC COMPANY OF
CANADA, LIMITED, a Canadian corporation, the other BORROWERS
party hereto, the LENDERS party hereto, JPMORGAN CHASE BANK,
as U.S. Administrative Agent and U.S. Collateral Agent,
JPMORGAN CHASE BANK, TORONTO BRANCH, as Canadian
Administrative Agent and Canadian Collateral Agent, FLEET
CAPITAL CORPORATION and GENERAL ELECTRIC CAPITAL CORPORATION,
as Co-Syndication Agents and GMAC COMMERCIAL FINANCE LLC and
CONGRESS FINANCIAL CORPORATION, as Co-Documentation Agents.
The parties hereto agree as follows:
ARTICLE I
Definitions
Section 1.01 Defined Terms. As used in this Agreement, the following terms
have the meanings specified below:
-------------
"2004 Notes" means the Company's 7.70% Senior Notes issuance in the
original principal amount of U.S.$200,000,000 due January 15, 2004.
"2007 Notes" means the Company's 7.75% Senior Notes issuance in the
original principal amount of U.S.$300,000,000 due April 15, 2007.
"2011 Notes" means the Company's 9.125% Senior Notes issuance in the
original principal amount of U.S.$275,000,000 due December 15, 2011.
"ABR", when used in reference to any Loan or Borrowing, refers to
whether such Loan, or the Loans comprising such Borrowing, are bearing interest
at a rate determined by reference to the Alternate Base Rate.
"Acceptance" means a Draft drawn by the Canadian Borrower on a Canadian
Lender conforming to the requirements of Section 2.04 and accepted by such
Canadian Lender in accordance with Section 2.04(c). As the context shall
require, "Acceptance" shall also have the meaning ascribed to it in Section
2.04(j).
"Acceptance Equivalent Loan" means an advance made under this Agreement
by a Canadian Lender evidenced by a Discount Note.
"Acceptance Exposure" means, at any time, the aggregate principal
amount of the outstanding Acceptances and Acceptance Equivalent Loans at such
time, expressed in U.S. Dollars. The Acceptance Exposure of any Canadian Lender
at any time shall be its Applicable Percentage of the aggregate Acceptance
Exposure at such time.
"Acceptance Fee" has the meaning assigned to it in Section 2.11(d).
"Acceptance Obligation" means, in respect of each Acceptance, the
obligation of the Canadian Borrower to pay to the Canadian Lender that accepted
such Acceptance the face amount thereof as required by Section 2.04(e).
"Adjusted LIBO Rate" means, for any Interest Period, an interest rate
per annum (rounded upwards, if necessary, to the next 1/16 of 1%) equal to (a)
the LIBO Rate for such Interest Period multiplied by (b) the Statutory Reserve
Rate.
"Administrative Agents" means the U.S. Administrative Agent and the
Canadian Administrative Agent.
---------------------
"Administrative Questionnaire" means an Administrative Questionnaire in
a form supplied by an Administrative Agent.
"Affected Eurodollar Loan" has the meaning assigned to such term in
Section 2.10(e).
"Affiliate" means, with respect to a specified Person, another Person
that directly, or indirectly through one or more intermediaries, Controls or is
Controlled by or is under common Control with the Person specified.
"Agents" means the Administrative Agents and the Collateral Agents.
------
"Alternate Base Rate" means, for any day, a rate per annum equal to the
greatest of (a) the Prime Rate in effect on such day, (b) the Base CD Rate in
effect on such day plus one hundred bps (1.0%) and (c) the Federal Funds
Effective Rate in effect on such day plus fifty bps (0.5%). Any change in the
Alternate Base Rate due to a change in the Prime Rate, the Base CD Rate or the
Federal Funds Effective Rate shall be effective from and including the effective
date of such change in the Prime Rate, the Base CD Rate or the Federal Funds
Effective Rate, respectively.
"Applicable Percentage" means, (i) in the case of a Canadian Lender in
respect of its Canadian Commitment or any extension of credit thereunder, the
percentage of the total Canadian Commitments represented by such Canadian
Lender's Commitment, or (ii) in the case of a U.S. Lender in respect of its U.S.
Commitment or any extension of credit thereunder, the percentage of the total
U.S. Commitments represented by such U.S. Lender's Commitment. If the
Commitments have terminated or expired, the Applicable Percentage shall be
determined based upon the U.S. Commitments or Canadian Commitments, as
applicable, most recently in effect, after giving effect to any assignments and
reallocations pursuant to Section 2.08.
"Applicable Rate" means, for any Interest Payment Date with respect to
any ABR Loan, Eurodollar Loan or Canadian Prime Loan, or any payment date with
respect to the Acceptance Fees payable hereunder, as the case may be, the
applicable rate per annum set forth below under the caption "ABR Spread",
"Eurodollar Spread", "Canadian Prime Spread" or "Acceptance Fee Rate", as the
case may be, based upon the Trailing Borrowing Base Availability for the
immediately preceding ninety (90) day period:
============================== ===================== ===================== ===================== =====================
Eurodollar
Trailing Borrowing Base ABR Spread -------------------- Canadian Prime Acceptance Fee
------------------------ ---------- --------------- --------------
Availability** Spread Spread Rate
------------ ------ ------ ----
- ------------------------------ --------------------- --------------------- --------------------- ---------------------
- ------------------------------ --------------------- --------------------- --------------------- ---------------------
Level 1* zero bps (0.00%) two hundred bps zero bps (0.00%) two hundred bps
-------
U.S.$300,000,000+ (2.00%) (2.00%)
-----------------
- ------------------------------ --------------------- --------------------- --------------------- ---------------------
- ------------------------------ --------------------- --------------------- --------------------- ---------------------
Level 2
U.S.$250,000,000.00- twenty-five bps two hundred twenty twenty-five bps two hundred twenty
--------------------
U.S.$299,999,999.99 (0.25%) five bps (2.25%) (0.25%) five bps (2.25%)
-------------------
- ------------------------------ --------------------- --------------------- --------------------- ---------------------
- ------------------------------ --------------------- --------------------- --------------------- ---------------------
Level 3
U.S.$200,000,000.00- fifty bps (0.50%) two hundred fifty fifty bps (0.50%) two hundred fifty
--------------------
U.S.$249,999,999.99 bps (2.50%) bps (2.50%)
-------------------
- ------------------------------ --------------------- --------------------- --------------------- ---------------------
- ------------------------------ --------------------- --------------------- --------------------- ---------------------
Level 4
U.S.$150,000,000.00- seventy five bps two hundred seventy seventy five bps two hundred seventy
--------------------
U.S.$199,999,999.99 (0.75%) five bps (2.75%) (0.75%) five bps (2.75%)
-------------------
- ------------------------------ --------------------- --------------------- --------------------- ---------------------
- ------------------------------ --------------------- --------------------- --------------------- ---------------------
Level 5
U.S.$100,000,000.00- one hundred bps three hundred bps one hundred bps three hundred bps
--------------------
U.S.$149,999,999.99 (1.00%) (3.00%) (1.00%) (3.00%)
-------------------
- ------------------------------ --------------------- --------------------- --------------------- ---------------------
- ------------------------------ --------------------- --------------------- --------------------- ---------------------
Level 6 three hundred three hundred
-------
U.S.$0-U.S.$99,999.99 one hundred twenty twenty five bps one hundred twenty twenty five bps
---------------------
five bps (1.25%) (3.25%) five bps (1.25%) (3.25%)
- ------------------------------ --------------------- --------------------- --------------------- ---------------------
- ----------------------------------------------------------------------------------------------------------------------
* The spreads/rate set forth in Level 1 shall only be applicable in the event
that the Company maintains the Ratings Requirement. In the event that the
Company does not maintain the Ratings Requirement, and the Company has a
Trailing Borrowing Base Availability of at least U.S.$300,000,000, then the
Applicable Rate shall be determined in accordance with the spreads/rate set
forth in Level 2. If the rating system of Moody's or S&P shall change, or if
either such rating agency shall cease to be in the business of rating
corporate debt obligations, the Company and the Lenders shall negotiate in
good faith to amend this definition to reflect such changed rating system or
the unavailability of ratings from such rating agency and, pending the
effectiveness of any such amendment, the Applicable Rate shall be determined
by reference to the rating most recently in effect prior to such change or
cessation.
** Notwithstanding the foregoing, if a Default has occurred or is continuing,
the spreads/rate rating shall be deemed to be the spreads/rate set forth in
Level 6, and interest shall be payable in accordance with Section 2.12.
======================================================================================================================
"Assessment Rate" means, for any day, the annual assessment rate in
effect on such day that is payable by a BIF member (as defined in 12 C.F.R. Part
327 (or any successor provision)) classified as "well-capitalized" within the
meaning of 12 C.F.R. Part 327 (or any successor provision) and within
supervisory Subgroup "B" (or a comparable successor risk classification) within
the meaning of 12 C.F.R. Part 327 (or any successor provision) to the Federal
Deposit Insurance Corporation for insurance by such Corporation of time deposits
made in dollars at the offices of such member in the United States; provided
that if, as a result of any change in any law, rule or regulation, it is no
longer possible to determine the Assessment Rate as aforesaid, then the
Assessment Rate shall be such annual rate as shall be determined by the U.S.
Administrative Agent to be representative of the cost of such insurance to the
U.S. Lenders.
"Assignment and Acceptance" means an assignment and acceptance entered
into by a Lender and an assignee (with the consent of any party whose consent is
required by Section 9.04), and accepted by the related Administrative Agent, in
the form of Exhibit A or any other form approved by the related Administrative
Agent.
"Availability Period" means, with respect to any Lender or its
Commitment, the period from and including the Effective Date to but excluding
the earlier of the Maturity Date and the date of termination of such Commitment.
"Base CD Rate" means the sum of (a) the Three-Month Secondary CD Rate
multiplied by the Statutory Reserve Rate, plus (b) the Assessment Rate.
"Board" means the Board of Governors of the Federal Reserve System of
the United States of America.
"Borrowers" means the U.S. Borrowers and the Canadian Borrower.
---------
"Borrowing" means a group of Loans of the same Class and Type, made,
converted or continued on the same date and, in the case of Eurodollar Loans, as
to which a single Interest Period is in effect.
"Borrowing Base" means either the Canadian Borrowing Base or the U.S.
Borrowing Base, as the context requires.
"Borrowing Base Availability" means the sum of the U.S. Availability
and the Canadian Availability minus (to the extent included in Canadian
Availability but without duplication) the amount of any excess U.S. Borrowing
Base included in Canadian Availability.
"Borrowing Base Certificate" means a certificate substantially in the
form of Exhibit B hereto (with such changes therein as may be required by the
Administrative Agent to reflect the components of and reserves against the
Borrowing Base as provided for hereunder from time to time), executed and
certified as accurate and complete by a Financial Officer of the Company which
shall include appropriate exhibits, schedules, supporting documentation, and
additional reports (i) as outlined in Schedule 1 to Exhibit B and (ii) as
reasonably requested by the Administrative Agent.
"Borrowing Request" means a request by a Borrower for a Borrowing in
accordance with Section 2.03.
"bps" means basis points.
---
"Business Day" means, as the context shall require, a U.S.
Business Day, a Canadian Business Day, or both.
------------
"Calculation Date" means the last U.S. Business Day of each calendar
week.
"Canadian Administrative Agent" means JPMorgan Chase Bank, Toronto
Branch, a Canadian chartered bank, in its capacity as administrative agent for
the Canadian Lenders hereunder, together with its successors and assigns.
"Canadian Availability" means the amount by which the lesser of the
aggregate outstanding Canadian Commitment or the Canadian Borrowing Base, within
all applicable sublimits, exceeds the sum of the Canadian Exposure plus the
excess, if any, of (A) the U.S. Borrowing Base then in effect minus (B) the
total U.S. Exposure.
"Canadian Borrower" means The Great Atlantic & Pacific Company of
Canada, Limited, a Canadian corporation.
"Canadian Borrowing" means a Borrowing comprised of Canadian Loans.
------------------
"Canadian Borrowing Base" means, on any date (subject to adjustment as
provided in Section 1.06), the aggregate value of the Canadian assets of the
Canadian Borrower and the Canadian Loan Parties, in an amount (calculated based
on the most recent Borrowing Base Certificate delivered to the Canadian
Administrative Agent in accordance with Section 5.01(f), absent any error in
such Borrowing Base Certificate) that is equal to the sum of (in each case
expressed in U.S. Dollars):
(a) the lesser of (x) the product of (A) 85% and (B) the Net Recovery
Rate and (C) the aggregate amount of Eligible Inventory (expressed in U.S.
Dollars) and (y) 65% of Eligible Inventory, plus
(b) the product of (x) 90% (or such other rate as determined from time
to time by the Canadian Administrative Agent in its commercially reasonable
discretion) and (y) all Eligible Credit Card Account Receivables, plus
(c) the product of (x) 85% (or such other rate as determined from time
to time by the Canadian Administrative Agent in its commercially reasonable
discretion) and (y) Eligible Coinstar Receivables, plus
(d) the product of (x) 85% (or such other rate as determined from time
to time by the Canadian Administrative Agent in its commercially reasonable
discretion) and (y) Eligible Third Party Insurance Provider Accounts
Receivables, minus
(e) the sum of (i) the aggregate dollar amount (expressed in U.S.
Dollars) represented by gift certificates then outstanding and entitling the
holder thereof to use all or a portion thereof to pay all or a portion of the
purchase price for any Inventory as of such day, (ii) the Canadian Reserve for
Leasehold Obligations and (iii) the maximum aggregate amount (after giving
effect to any netting agreements) that the Canadian Borrower and the Canadian
Loan Parties would be required to pay under any Hedging Agreements secured by
the Security Agreements, the obligations under which constitute Canadian
Obligations if such Hedging Agreements were terminated, and determined as of the
most recent date for which financial statements have been delivered pursuant to
Section 5.01(a), (b) or (c), as applicable, minus
(f) the sum of (x) the Canadian Vendor Retention of Title Reserve and
(y) the amount of any additional reserve required to be maintained by any Loan
Party pursuant to the terms hereof.
The Canadian Borrowing Base shall be computed for each calendar week,
as required by Section 5.01(f), and established based upon the most recent
Borrowing Base Certificate delivered to each Administrative Agent and shall
remain in effect until the delivery to each Administrative Agent of a subsequent
Borrowing Base Certificate.
"Canadian Business Day" means any day that is not a Saturday, Sunday or
legal holiday in the Province of Ontario, on which banks are open for business
in Toronto; provided that when used in connection with a Eurodollar Loan, the
term "Canadian Business Day" shall also exclude any day on which banks are not
open for dealings in U.S. Dollar deposits in the London Interbank Market.
"Canadian Collateral Agent" means JPMorgan Chase Bank, an authorized
foreign bank named in Schedule III to the Bank Act (Canada), acting through its
Toronto Branch, in its capacity as collateral agent for the Canadian Secured
Parties under the applicable Security Documents, together with its successors
and assigns.
"Canadian Commitment" means, with respect to each Lender, the
commitment, if any, of such Lender to make Canadian Loans, to acquire
participations in any Canadian Letter of Credit and to accept Acceptances
hereunder, expressed as an amount in U.S. Dollars representing the maximum
aggregate amount of such Lender's Canadian Exposure hereunder, as such
commitment may be (a) reduced from time to time pursuant to paragraph (a), (b)
or (c) of Section 2.08 or pursuant to Section 2.21 and (b) reduced or increased
from time to time pursuant to reallocations pursuant to paragraph (d) of Section
2.08 or pursuant to assignments by or to such Lender pursuant to Section 9.04.
The initial amount of each Lender's Canadian Commitment is set forth on Schedule
2.01, or in the Assignment and Acceptance pursuant to which such Lender shall
have assumed its Canadian Commitment, as applicable. The initial aggregate
amount of the Lenders' Canadian Commitments is Seventy Million U.S. Dollars
(U.S.$70,000,000).
"Canadian Distribution Centers" means (i) the warehouse facilities
operated by the Canadian Loan Parties and located in Ontario, Canada and (ii)
any warehouse facility located in Canada and operated by the Canadian Loan
Parties that is designated as a Canadian Distribution Center from time to time
by (a) giving 30 days prior written notice to the Administrative Agents and (b)
effecting the execution, filing and recordation of such financing statements and
taking any and all such further actions as may be reasonably requested by the
Administrative Agents.
"Canadian Dollar Equivalent" means, with respect to an amount of U.S.
Dollars on any date, the amount of Canadian Dollars that may be purchased with
such amount of U.S. Dollars at the Exchange Rate with respect to U.S. Dollars on
such date.
"Canadian Dollars" and the symbol "Cdn.$" mean the lawful currency of
Canada.
---------------- -----
"Canadian Exposure" means, at any time, the aggregate principal amount
of outstanding Acceptance Exposure, Canadian Loans and Canadian L/C Exposure at
such time, in each case expressed in U.S. Dollars. The Canadian Exposure of any
Canadian Lender at any time shall be the sum of its Acceptance Exposure and
Canadian L/C Exposure plus the aggregate principal amount of its outstanding
Canadian Loans at such time, in each case expressed in U.S. Dollars.
"Canadian Guarantee Agreement" means the Amended and Restated Canadian
Guarantee Agreement, among the Canadian Loan Parties and the Canadian Collateral
Agent, substantially in the form of Exhibit C.
"Canadian Issuing Bank" means JPMorgan Chase Bank, Toronto Branch, or
such other financial institution as may be approved by the Administrative Agents
and the Company, in its capacity as the issuer of Canadian Letters of Credit
hereunder, and its successors in such capacity as provided in Section 2.05(i).
The Canadian Issuing Bank may, in its discretion, arrange for one or more
Canadian Letters of Credit to be issued by Affiliates of the Canadian Issuing
Bank, in which case the term "Canadian Issuing Bank" shall include any such
Affiliate with respect to Canadian Letters of Credit issued by such Affiliate.
In the event that there is more than one Canadian Issuing Bank at any time,
references herein and in the other Loan Documents to the Canadian Issuing Bank
shall be deemed to refer to the Canadian Issuing Bank in respect of the
applicable Canadian Letter of Credit or to all Canadian Issuing Banks, as the
context requires.
"Canadian L/C Exposure" means, at any time, the sum of (a) the
aggregate undrawn amount of all outstanding Canadian Letters of Credit at such
time plus (b) the aggregate principal amount of all L/C Disbursements made
pursuant to Canadian Letters of Credit that have not yet been reimbursed by or
on behalf of the Canadian Borrower at such time, in each case expressed in U.S.
Dollars. The Canadian L/C Exposure of any Canadian Lender at any time shall mean
its Applicable Percentage of the aggregate Canadian L/C Exposure at such time.
"Canadian Lender" means any Lender that has a Canadian Commitment or
any Canadian Exposure. The initial Canadian Lenders are listed on Schedule 2.01
under the caption "Canadian Lenders".
"Canadian Letter of Credit" means any Letter of Credit issued by the
Canadian Issuing Bank for the account of the Canadian Borrower. Each Existing
Canadian Letter of Credit shall be deemed to constitute a Canadian Letter of
Credit issued hereunder on the Effective Date for all purposes of the Loan
Documents.
"Canadian Loan" means a Loan made pursuant to paragraph (b) of Section
2.01.
"Canadian Loan Parties" means each Canadian Subsidiary identified as a
"Canadian Loan Party" on Schedule 3.12 and each Canadian Subsidiary made a party
hereto pursuant to Section 5.12.
"Canadian Multi-Employer Plan" means a plan which is a multi-employer
pension plan as defined in the Pension Benefits Act of Ontario.
"Canadian Obligations" has the meaning assigned to such term in the
Canadian Security Agreement.
"Canadian Pledge Agreement" means the Amended and Restated Canadian
Pledge Agreement among the Canadian Loan Parties and the Canadian Collateral
Agent, substantially in the form of Exhibit D.
"Canadian Prime" means, when used in reference to any Loan or
Borrowing, whether such Loan, or the Loans comprising such Borrowing, are
bearing interest at a rate determined by reference to the Canadian Prime Rate.
"Canadian Prime Rate" means, for any day, a rate per annum (rounded
upwards, if necessary, to the next 1/100 of 1%) equal to the higher of (i) the
rate per annum publicly announced from time to time by JPMorgan Chase Bank,
Toronto Branch as its prime rate in effect at its principal office in Toronto
and (ii) the one-month CDOR Rate plus one hundred bps (1.00%) per annum.
"Canadian Priming Jurisdiction" means any jurisdiction listed on
Schedule A hereto, which schedule may be revised by the Administrative Agents to
reflect changes in applicable law. The Administrative Agent shall provide the
Company with ten (10) days' prior written notice of any revisions to the
jurisdictions listed on Schedule A hereto.
"Canadian Reserve for Leasehold Obligations" means, on any date, the
aggregate amount of Leasehold Obligations of the Canadian Loan Parties due and
owing with respect to properties of a vendor, landlord, public warehouse
operator or other third party bailee located in a Canadian Priming Jurisdiction
that has not provided a Priority of Claims Waiver in form and substance
satisfactory to the Administrative Agents; for each such property the amount of
Leasehold Obligations shall be either (x) within ninety (90) days of the
Effective Date, one month's Leasehold Obligations or (y) from and after the
ninetieth day following the Effective Date, either (i) the next two months'
Leasehold Obligations (net of any Letter of Credit amount benefiting such
landlord in respect of such Leasehold Obligations) or (ii) if less than the next
two months' Leasehold Obligations (net of any Letter of Credit amount benefiting
such landlord in respect of such Leasehold Obligations) and at the discretion of
the Administrative Agents, the fair market value of Eligible Inventory located
at such property. For the avoidance of doubt, the amount of Leasehold
Obligations for any property for which a satisfactory Priority of Claims Waiver
is delivered by a vendor, landlord, public warehouse operator or other third
party bailee, shall be zero.
"Canadian Secured Parties" has the meaning assigned to such term in the
Canadian Security Agreement.
"Canadian Security Agreement" means the Amended and Restated Canadian
Security Agreement among the Canadian Loan Parties and the Canadian Collateral
Agent, substantially in the form of Exhibit E.
"Canadian Stores" means all supermarket retail locations of the
Canadian Borrower and other Canadian Loan Parties selling Inventory owned by the
Canadian Loan Parties.
"Canadian Subsidiary" means the Canadian Borrower and each other
Subsidiary that is incorporated or otherwise organized under the laws of Canada
or any political subdivision thereof.
"Canadian Vendor Retention of Title Reserve" means an amount calculated
by the Canadian Collateral Agent to provide for vendor liabilities relating to
Canadian Inventory which may be subject to Section 81.1 of the Bankruptcy and
Insolvency Act (Canada).
"Capital Expenditures" means, for any period, without duplication, (a)
the additions to property, plant and equipment and other capital expenditures of
the Company and its consolidated Subsidiaries that are (or would be) set forth
in a consolidated statement of cash flows of the Company for such period
prepared in accordance with GAAP and (b) Capital Lease Obligations incurred by
the Company and its consolidated Subsidiaries during such period to the extent
it exceeds any reductions in Capital Lease Obligations (other than payments that
are scheduled to be made pursuant to the terms of the Capital Lease
Obligations).
"Capital Lease Obligations" of any Person means the obligations of such
Person to pay rent or other amounts under any lease of (or other arrangement
conveying the right to use) real or personal property, or a combination thereof,
which obligations are required to be classified and accounted for as liabilities
on a balance sheet of such Person under GAAP, and the amount of such obligations
shall be the capitalized amount thereof determined in accordance with GAAP.
"Cash Equivalents" means:
(1) United States dollars and Canadian Dollars;
(2) securities issued or directly and fully guaranteed or insured
by the United States or Canadian government or any agency or
instrumentality of the United States or the Canadian
government (provided that the full faith and credit of the
United States or Canada is pledged in support of those
securities) having maturities of not more than one year from
the date of acquisition;
(3) obligations issued or fully guaranteed by any state of the
United States of America or province of Canada or any
political subdivision of any such state or province or any
instrumentality thereof maturing within one year from the date
of acquisition and having a rating of either "A" or better
from Standard & Poor's, A2 or better from Moody's or "A" or
better from Dominion Bond Rating Service Limited ("DBRS");
(4) certificates of deposit and eurodollar time deposits with
maturities of one year or less from the date of acquisition,
banker's acceptances with maturities not exceeding one year
and overnight bank deposits, in each case, with any Lender or
with any United States or Canadian commercial bank having
capital and surplus in excess of U.S.$300.0 million
equivalent;
(5) repurchase obligations with a term of not more than seven days
for underlying securities of the types described in clauses
(2), (3), and (4) above entered into with any financial
institution meeting the qualifications specified in clause (4)
above;
(6) commercial paper rated at least "P-2" by Moody's, at least
"A-2" by Standard and Poor's or at least "R-1 (low)" from DBRS
and in each case maturing within one year after the date of
acquisition; and
(7) money market funds at least 95% of the assets of which
constitute Cash Equivalents if the kinds described in
clauses (1) through (6) of this definition.
"CDOR Rate" means, on any day, the annual rate of interest which is
the rate determined as being the arithmetic average of the rates applicable to
Canadian Dollar bankers' acceptances for the applicable period displayed and
identified as such on the "Reuters' Screen CDOR Page" at approximately 10:00
a.m. on such day for Schedule I chartered banks, or if such day is not a
Canadian Business Day then on the immediately preceding Canadian Business Day
(as adjusted by a Canadian bank after 10:00 a.m. to reflect any error in a
posted rate of interest or in the posted average annual rate of interest). Each
change in the Canadian Prime Rate shall be effective on the date after such
change is publicly announced.
"Change in Control" means (a) the acquisition of ownership, directly or
indirectly, beneficially or of record, by any Person or group (within the
meaning of the Securities Exchange Act of 1934 and the rules of the Securities
and Exchange Commission thereunder as in effect on the date hereof) other than
Tengelmann Warenhandelsgesellschaft, of Equity Interests representing (i) more
than 35% of either the aggregate ordinary voting power or the aggregate equity
value represented by the issued and outstanding Equity Interests of the Company
and (ii) a greater percentage of the aggregate ordinary voting power represented
by the issued and outstanding Equity Interests of the Company than the
percentage thereof represented by Equity Interests owned by Tengelmann
Warenhandelsgesellschaft; (b) occupation of a majority of the seats (other than
vacant seats) on the board of directors of the Company by Persons who were
neither (i) nominated by the board of directors of the Company nor (ii)
appointed by directors so nominated; (c) the acquisition of direct or indirect
Control of the Company by any Person or group other than Tengelmann
Warenhandelsgesellschaft; or (d) the failure by the Company to beneficially own,
directly or indirectly, 100% of the issued and outstanding Equity Interests of
the Canadian Borrower; provided, however, that clauses (a), (b) and (c) of this
definition shall not apply so long as Tengelmann Warenhandelsgesellschaft owns,
directly or indirectly, beneficially and of record, Equity Interests
representing more than 50.10% of the aggregate ordinary voting power represented
by the issued and outstanding Equity Interests of the Company.
"Change in Law" means (a) the adoption of any law, rule or regulation
after the date of this Agreement, (b) any change in any law, rule or regulation
or in the interpretation or application thereof by any Governmental Authority
after the date of this Agreement or (c) compliance by any Lender or an Issuing
Bank (or, for purposes of Section 2.14(b), by any lending office of such Lender
or by such Lender's or such Issuing Bank's holding company, if any) with any
request, guideline or directive (whether or not having the force of law) of any
Governmental Authority made or issued after the date of this Agreement.
"Class", when used in reference to any Loan or Borrowing, refers to
whether such Loan, or the Loans comprising such Borrowing, are Canadian Loans or
U.S. Loans and, when used in reference to any Commitment, refers to whether such
Commitment is a Canadian Commitment or U.S. Commitment.
"Code" means the Internal Revenue Code of 1986, as amended from time to
time.
"Coinstar Installation Agreements" means that certain Coinstar
Installation Agreement, dated April 29, 2002 (as the same may be amended,
supplemented and otherwise modified from time to time with the prior written
consent of the Administrative Agents), between the Company and Coinstar, Inc.,
together with each other installation agreement between the Company (or any of
its Subsidiaries) and Cointstar, Inc. (or any of Coinstar's Canadian affiliates)
in form and substance satisfactory to the U.S. Administrative Agent.
"Coinstar Receivable" means each "Account" (as defined in the UCC or
the PPSA) together with all income, payments and proceeds thereof due and owing
to the Company (or any of its Subsidiaries) by Coinstar, Inc. (or any of
Coinstar, Inc.'s Canadian affiliates), pursuant to any contract between the
Company (or any of its Subsidiaries) and Coinstar, Inc. (or any of Coinstar,
Inc.'s Canadian affiliates), including but not limited to the Coinstar
Installation Agreements.
"Collateral" means any and all "Collateral", as defined in any
applicable Security Document; and any and all "Mortgaged Property", as defined
in each mortgage.
"Collateral Agents" means the U.S. Collateral Agent and the
Canadian Collateral Agent.
-----------------
"Commitment" means a U.S. Commitment or a Canadian Commitment, or both,
as the context requires.
"Company" means The Great Atlantic & Pacific Tea Company, Inc.,
a Maryland corporation.
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"Consolidated EBITDA" means, for any period, Consolidated Net Income
for such period plus (a) without duplication and to the extent deducted in
determining such Consolidated Net Income, the sum of (i) consolidated interest
expense for such period, (ii) consolidated income tax expense for such period,
(iii) all amounts attributable to depreciation and amortization for such period,
(iv) any extraordinary or nonrecurring non-cash charges for such period, (v)
consolidated rental expense for such period attributable to stores that were
permanently closed during such period plus any rent, common area maintenance,
real estate taxes and other real estate related expenses related to such
closure, and (vi) charges for pension withdrawal liabilities related to the
permanent closing of retail and/or distribution facilities, and minus (b)
without duplication (i) to the extent included in determining such Consolidated
Net Income, any extraordinary or nonrecurring gains for such period, including,
in the case of the closure described in clause (a)(v) of this definition, gains
for such period in accordance with GAAP and (ii) cash payments made during such
period in respect of store closing expenses and of pension liabilities, to the
extent attributable to charges added back pursuant to clauses (a) (v) and (vi)
of this definition.
"Consolidated EBITDAR" means, for any period, Consolidated EBITDA for
such period plus, without duplication and to the extent deducted in the
determination of such Consolidated EBITDA, consolidated rental expense for such
period.
"Consolidated Fixed Charges" means, for any period, the sum of (a)
consolidated interest expense, both expensed and capitalized (including the
interest component in respect of Capital Lease Obligations), of the Company and
its Subsidiaries for such period, plus (b) consolidated rental expense of the
Company and its Subsidiaries for such period, determined in accordance with
GAAP, plus (c) consolidated scheduled principal payments of Indebtedness of the
Company and its Subsidiaries for such period, determined in accordance with
GAAP.
"Consolidated Fixed Charges Ratio" means the ratio of (a) Consolidated
EBITDAR, minus consolidated non-financed capital expenditures for such period
(as determined in accordance with GAAP), minus, without duplication and to the
extent not deducted in the determination of such Consolidated EBITDA, the
consolidated cash amount of any income taxes paid in such period, to (b)
Consolidated Fixed Charges.
"Consolidated Net Income" means, for any period, the net income or loss
of the Company and the Subsidiaries for such period determined on a consolidated
basis in accordance with GAAP; provided that there shall be excluded (a) the
income of any Person (other than the Company) in which any other Person (other
than the Company or any Subsidiary or any director holding qualifying shares in
compliance with applicable law) owns an Equity Interest, except to the extent of
the amount of dividends or other distributions actually paid to the Company or
any of the Subsidiaries during such period, and (b) the income or loss of any
Person accrued prior to the date it becomes a Subsidiary or is merged into or
consolidated with the Company or any Subsidiary or the date that such Person's
assets are acquired by the Company or any Subsidiary.
"Consolidated Net Tangible Assets" of any Person means the total amount
of assets (less applicable reserves and other properly deductible items) which
under generally accepted accounting principles would be included on a
consolidated balance sheet of the Company and its Subsidiaries after deducting
therefrom, without duplication, the sum of (a) all liabilities and liability
items which under generally accepted accounting principles would be included on
such balance sheet, except funded debt, liabilities in respect of Capital Lease
Obligations (other than the current portion thereof), capital stock and surplus,
surplus reserves and provisions for deferred income taxes, and (b) all goodwill,
trade names, trademarks, patents, unamortized debt discount and expense and
other like intangibles, which in each case under generally accepted accounting
principles would be included on such consolidated balance sheet.
"Consolidation Date" has the meaning set forth in Section 2.21(a).
"Contemplated Sale/Leaseback Transaction" means the Company's planned
sale, sale-leaseback or other mortgage or real estate financing to or with a
nonaffiliated third party not a Subsidiary involving selected United States real
property and fixtures thereon owned by the Company.
"Control" means the possession, directly or indirectly, of the power to
direct or cause the direction of the management or policies of a Person, whether
through the ability to exercise voting power, by contract or otherwise.
"Controlling" and "Controlled" have meanings correlative thereto.
"Control Agreement" means each Collection Deposit Letter Agreement,
among the grantor thereunder, the applicable Collateral Agent and the Collection
Deposit Bank named therein, each Cash Concentration Letter Agreement, among the
Company, JPMorgan Chase Bank, as the depositary bank, and the applicable
Collateral Agent and each other control arrangement that provides that the bank
maintaining an account established by a Loan Party agrees to comply only with
the instructions originated by the applicable Collateral Agent without the
further consent of any Loan Party, as further described in the Security
Documents.
"Credit Card Receivables" means each "Account" (as defined in the UCC
the PPSA) together with all income, payments and proceeds thereof, owed by an
issuer of credit cards to a Loan Party resulting from charges by a customer of a
Loan Party on credit cards issued by such issuer in connection with the sale of
goods by a Loan Party, or services performed by a Loan Party, in each case in
the ordinary course of its business.
"Currency and Commodity Hedging Agreement" means any foreign currency
exchange agreement, commodity price protection agreement or other currency
exchange rate or commodity price hedging arrangement.
"DBRS" means Dominion Bond Rating Service and its successors.
"Default" means any event or condition which constitutes an Event of
Default or which upon notice, lapse of time or both would, unless cured or
waived, become an Event of Default.
"Disclosed Matters" means the actions, suits and proceedings and the
environmental matters disclosed in Schedule 3.06.
"Discount Note" means a non-interest bearing, non-negotiable promissory
note of the Canadian Borrower denominated in Canadian Dollars, issued by the
Canadian Borrower to a Canadian Lender, substantially in the form of Exhibit F.
"Discount Rate" with respect to an issue of Acceptances with the same
maturity date, (a) for a Canadian Lender which is a Schedule I Lender, (i) the
average CDOR Rate for the applicable term and (b) for a Canadian Lender which is
not a Schedule I Lender, the rate determined by the Canadian Administrative
Agent based on the arithmetic average (rounded upwards to the nearest multiple
of 0.01%) of the actual discount rates, calculated on the basis of a year of 365
days, for Acceptances for such term accepted by the Schedule II or III Reference
Banks established in accordance with their normal practices at or about 10:00
a.m. (Toronto time) on the date of issuance of such Acceptances, but not to
exceed the actual rate of discount applicable to Acceptances established
pursuant to clause (a) for the same Acceptances issue plus ten bps (0.10%) per
annum.
"Distribution Center Shrink Percentage" shall be applicable to
Inventory located at the Distribution Centers and shall mean, on any date,
average shrink expressed in terms of cost value resulting from the physical
Distribution Center inventories performed over the most recent 12 month period,
expressed as a percentage of the cost value of Inventory.
"Distribution Center Shrink Reserve" shall be equal to the product of
(a) the excess of the Distribution Center Shrink Percentage over 1%, multiplied
by (b) Inventory as of the date of the most recent Borrowing Base Certificate.
"Distribution Centers" means the U.S. Distribution Centers and the
Canadian Distribution Centers.
--------------------
"Draft" means a depository bill issued in accordance with the
Depository Bills and Notes Act (Canada) or a bill of exchange in the form used
from time to time by each Canadian Lender, respectively, in connection with the
creation of bankers' acceptances in accordance with the provisions of Section
2.04 and payable in Canadian Dollars.
"Effective Date" means the date on which the conditions specified in
Section 4.01 are satisfied (or waived in accordance with Section 9.02).
"Eligible Coinstar Receivables" means, at the time of any determination
thereof, each Coinstar Receivable that satisfies the following criteria at the
time of creation and continues to meet the same at the time of such
determination: such Coinstar Receivable (i) has been earned and represents the
bona fide amounts due to the Company (or any of its Subsidiaries) from Coinstar,
Inc. (or any of Coinstar, Inc.'s Canadian affiliates) and in each case
originated in the ordinary course of business of the Company (or any of its
Subsidiaries) and (ii) is not ineligible for inclusion in the calculation of the
Borrowing Base pursuant to any of clauses (a) through (i) below. Without
limiting the foregoing, to qualify as Eligible Coinstar Receivable, an Account
shall indicate no person other than the Company (or one of its Subsidiaries) as
payee or remittance party. In determining the amount to be so included, the face
amount of an Account shall be reduced by, without duplication, to the extent not
reflected in such face amount, (i) the amount of all accrued and actual
discounts, claims, credits or credits pending, promotional program allowances,
price adjustments, finance charges or other allowances (including any amount
that the Company or any of its Subsidiaries, as applicable, may be obligated to
rebate to a customer and (ii) the aggregate amount of all cash received in
respect of such Account but not yet applied by the Company or any of its
Subsidiaries to reduce the amount of such Coinstar Receivable. Unless otherwise
approved from time to time in writing by the Collateral Agents, no Coinstar
Receivables shall be Eligible Coinstar Receivables if, without duplication:
(a) such Coinstar Receivables are not owned by the Company (or any of
its Subsidiaries) and the Company (or any of its Subsidiaries) does not have
good or marketable title to such receivables free and clear of any Lien of any
Person other than the Collateral Agents;
(b) such Coinstar Receivables do not constitute "accounts" (as defined in the
UCC or the PPSA, as applicable) or such receivables have been outstanding for
more than ten (10) Business Days;
(c) either the Company or Coinstar, Inc. is the subject of any bankruptcy or
insolvency proceedings;
(d) such Coinstar Receivables are not valid, legally enforceable obligations of
Coinstar, Inc. (or any of Coinstar, Inc.'s Canadian affiliates);
(e) such Coinstar Receivables are not subject to a properly perfected security
interest in favor of the Collateral Agents, or are not in form and substance
reasonably satisfactory to the Administrative Agents, or are subject to any
Lien (other than the Lien of the Collateral Agents) whatsoever;
(f) such Coinstar Receivables otherwise do not conform to all representations,
warranties, covenants and agreements in the Loan Documents relating to
receivables;
(g) the Company (or any of its Subsidiaries) has not received all consents or
approvals required by the terms of the Coinstar Installation Agreements and
each other agreement, instrument and/or documents executed in connection
therewith (if any) necessary to grant a security interest in or otherwise
assign all of its right, title and interest in and to the receivables;
(h) such Coinstar Receivables do not meet such other usual and customary
eligibility criteria for receivables as the Administrative Agents may
determine from time to time in their commercially reasonable discretion; or
(i) such Coinstar Receivable is evidenced by "chattel paper" or an "instrument"
of any kind unless such "chattel paper" or "instrument" is in the possession
of the applicable Collateral Agent, and to the extent necessary or
appropriate, endorsed to the related Collateral Agent.
"Eligible Credit Card Accounts Receivable" means at the time of any
determination thereof, each Credit Card Receivable that satisfies the following
criteria at the time of creation and continues to meet the same at the time of
such determination: such Credit Card Receivable (i) has been earned and
represents the bona fide amounts due to the Company or other Loan Party from a
credit card payment processor and/or credit card issuer, and in each case
originated in the ordinary course of business of the Company and the related
Loan Party and (ii) is not ineligible for inclusion in the calculation of the
Borrowing Base pursuant to any of clauses (a) through (j) below. Without
limiting the foregoing, to qualify as an Eligible Credit Card Account
Receivable, an Account shall indicate no person other than the Company or the
related Loan Party (other than an Excluded Subsidiary) as payee or remittance
party. In determining the amount to be so included, the face amount of an
Account shall be reduced by, without duplication, to the extent not reflected in
such face amount, (i) the amount of all accrued and actual discounts, claims,
credits or credits pending, promotional program allowances, price adjustments,
finance charges or other allowances (including any amount that the Company or
the related Loan Party, as applicable, may be obligated to rebate to a customer,
a credit card payment processor, or credit card issuer pursuant to the terms of
any agreement or understanding (written or oral)) and (ii) the aggregate amount
of all cash received in respect of such Account but not yet applied by the
Company or the related Loan Party to reduce the amount of such Credit Card
Receivable. Unless otherwise approved from time to time in writing by the
Collateral Agents, no Credit Card Receivables shall be Eligible Credit Card
Accounts Receivable if, without duplication:
(a) such Credit Card Receivables are not owned by a Loan Party and such Loan
Party does not have good or marketable title to such Credit Card Receivables
free and clear of any Lien of any Person other than the Collateral Agents;
(b) such Credit Card Receivables do not constitute "accounts" (as defined in the
UCC or the applicable Canadian equivalent statute, as the case may be) or such
Credit Card Receivables have been outstanding for more than seven (7) business
days;
(c) the issuer or payment processor of the applicable credit card with respect
to such Credit Card Receivables is the subject of any bankruptcy or insolvency
proceedings;
(d) such Credit Card Receivables are not valid, legally enforceable obligations
of the applicable issuer with respect thereto;
(e) such Credit Card Receivables are not subject to a properly perfected
security interest in favor of the Collateral Agents, or are not in form and
substance reasonably satisfactory to the Administrative Agent, or are subject
to any Lien whatsoever other than Permitted Encumbrances contemplated by the
processor agreements and for which appropriate reserves (as determined by the
Administrative Agents) have not been established or maintained by the
Borrowers;
(f) the Credit Card Receivables do not conform to all representations,
warranties or other provisions in the Loan Documents relating to Credit Card
Receivables;
(g) such Credit Card Receivables do not become subject to a legal, valid,
binding and enforceable Tri-Party Agreement within the timeframe set forth in
Section 5.13 hereof;
(h) such Credit Card Receivables are subject to risk of set-off, non-collection
or not being processed due to unpaid and/or accrued credit card processor fee
balances, limited to the lesser of the balance of Credit Card Receivables or
unpaid credit card processor fees;
(i) such Credit Card Receivable is evidenced by "chattel paper" or an
"instrument" of any kind unless such "chattel paper" or "instrument" is in the
possession of the applicable Collateral Agent, and to the extent necessary or
appropriate, endorsed to the related Collateral Agent; or
(j) such Credit Card Receivables do not meet such other usual and customary
eligibility criteria for Credit Card Receivables as the Administrative Agents
may determine from time to time in their commercially reasonable discretion.
"Eligible Inventory" means, at the time of any determination thereof
the Inventory of the Company or a Loan Party at the time of such determination
that is not ineligible for inclusion in the Borrowing Base pursuant to any of
the clauses (a) through (p) below. Without limiting the foregoing, to qualify as
Eligible Inventory no person other than the Company or a Loan Party (other than
an Excluded Subsidiary) shall have any direct or indirect ownership, interest or
title to such Inventory and no person other than the Company or a Loan Party,
shall be indicated on any purchase order or invoice with respect to such
Inventory as having or purporting to have an interest therein. Unless otherwise
from time to time approved in writing by the Administrative Agent, no Inventory
shall be deemed Eligible Inventory if, without duplication:
(a) it is located at a reclamation center of any Distribution Center or is
otherwise held at any Distribution Center for return to vendor;
(b) it is supplies, packaging, selling or display materials;
(c) it is produce, floral, seafood, meat, bakery, dairy, deli, or fuel;
(d) it is not owned solely by the Company or any other Loan Party or is owned by
an Excluded Subsidiary;
(e) it is on consignment to the Company or any other Loan Party;
(f) it is not located at property that is owned or leased by the Company or any
other Loan Party or is in transit from vendors to such a property; provided
that (I) seasonal grocery, perishable and HBA in third party storage
facilities located in jurisdictions other than U.S. Priming Jurisdictions or
Canadian Priming Jurisdictions shall, if not otherwise excluded, be included
as Eligible Inventory, minus any claims or Liens, other than Permitted
Encumbrances, that vendors, landlords, public warehouse operators or any third
party bailee may have against such property, from time to time, and (II)
seasonal grocery, perishable and HBA located in U.S. Priming Jurisdictions or
Canadian Priming Jurisdictions shall not be included in Eligible Inventory
pursuant to this paragraph (g) unless either (A) the applicable vendor,
landlord, public warehouse or any third party bailee has provided to the
related Loan Party a Priority of Claims Waiver in form and substance
satisfactory to the Administrative Agents, or (B) the Borrowers have deposited
into the Cash Concentration Account (as defined in the U.S. Security
Agreement) (together with all amounts then on deposit therein) an amount equal
to the U.S. Reserve for Leasehold Obligations or the Canadian Reserve for
Leasehold Obligations (as applicable) with respect to such property, or (C)
Borrowers' obligations to such vendor, landlord, public warehouse or third
party bailee are supported by a standby letter of credit issued by a Lender
pursuant to this Agreement in an amount at least equal to the applicable
Canadian Reserve for Leasehold Obligations or U.S. Reserve for Leasehold
Obligations;
(g) it is not located in the United States of America or Canada;
(h) it is not subject to a perfected first priority Lien, other than Permitted
Encumbrances, securing the Obligations, regardless of its location;
(i) it is not in good condition, does not meet all standards imposed by any
Governmental Authority having regulatory authority over it, or is not
currently saleable in the normal course of business of the Company and the
Subsidiaries;
(j) it is inventory located at any Distribution Center on such date that
represents over 13 weeks old inventory based on date of receipt determined at
an individual product level;
(k) it is Inventory that is accounted for in both the Company's Distribution
Center and Store Inventory;
(l) it is accounted for in the Canadian Vendor Retention of Title Reserve;
(m) it includes any profits or transfer price additions charged or accrued in
connection with transfers of Inventory between the Company and its
Subsidiaries or Affiliates;
(n) it is accounted for in the Store Shrink Reserve;
(o) it is accounted for in the Distribution Center Shrink Reserve; or
(p) it is accounted for in the Company's reserve which adjusts Inventory valued
under the Company's historical retail method of accounting to actual cost
value.
"Eligible Third Party Insurance Provider Accounts Receivable" means, at
the time of any determination thereof, each third party insurance provider
"Account" (as defined in the UCC or the PPSA, as applicable) together with all
income, payments and proceeds thereof, that satisfies the following criteria at
the time of creation and continues to meet the same at the time of such
determination: such Account (i) has been earned and submitted for reimbursement
to, and represents the bona fide amounts due to the Company or other Loan Party
(other than an Excluded Subsidiary) from, a third party insurance provider, in
each case originated in the ordinary course of business of the Company and its
Subsidiaries and (ii) is not ineligible for inclusion in the calculation of the
Borrowing Base pursuant to any of clauses (a) through (k) below. Without
limiting the foregoing, to qualify as an Eligible Third Party Insurance Provider
Account Receivable, a third party insurance provider account receivable shall
indicate no person other than the Company or the related Loan Party (other than
an Excluded Subsidiary) as payee or remittance party. In determining the amount
to be so included, the face amount of such an account shall be reduced by,
without duplication, to the extent not reflected in such face amount, (i) the
amount of all accrued and actual discounts, claims, credits or credits pending,
promotional program allowances, price adjustments, finance charges or other
allowances (including any amount that the Company or the related Loan Party, as
applicable, may be obligated to rebate to a third party insurance provider
pursuant to the terms of any agreement or understanding (written or oral)) and
(ii) the aggregate amount of all cash received in respect of such Account but
not yet applied by the Company or the related Loan Party to reduce the amount of
such Account. Unless otherwise approved from time to time in writing by the
Collateral Agents, no third party insurance provider accounts receivable shall
be Eligible Third Party Insurance Provider Accounts Receivable if, without
duplication:
(a) an invoice (in form and substance satisfactory to the Administrative Agent)
with respect to such third party insurance provider accounts receivable has
not been sent to the applicable account debtor;
(b) such third party insurance provider accounts receivable are not due and
payable in full, are subject to any bill and hold arrangement, or more than 90
days have elapsed since the date of the sale of goods giving rise to such
third party insurance provider accounts receivable;
(c) the aggregate amount of accounts due from third party insurance providers
exceeds Fifteen Million U.S. Dollars (U.S.$15,000,000) for which more than 60
days but not more than 90 days have elapsed since the date of the sale of
goods or rendering of services giving rise to such third party insurance
provider accounts receivable;
(d) such third party insurance provider accounts receivable did not arise from
the provision of goods authorized by a physician's prescription, and such
goods have been performed or provided;
(e) such third party insurance provider accounts receivable arose from the
provision of durable medical equipment;
(f) such third party insurance provider accounts receivable are subject to any
assignment, claim, lien, or security interest, except in favor of the
Administrative Agent and the Lenders;
(g) such third party insurance provider accounts receivable are not valid and
legally enforceable obligations of the account debtor, are subject to any
claim for credit, defense, offset, chargeback, counterclaim or adjustment by
the account debtor, other than any discount allowed for prompt payment, and
the assignment or pledging thereof violates any agreement to which the account
debtor is subject;
(h) such third party insurance provider accounts receivable did not arise in the
ordinary course of business of the Company and its Subsidiaries, or a notice
of the bankruptcy, insolvency, failure, or suspension or termination of
business of the account debtor has been received by the Company or the related
Loan Party, or the payor thereunder shall have provided written notice to
anyone of a challenge or dispute of its obligations thereunder;
(i) such third party insurance provider accounts receivable do not conform to
all representations, warranties or other provisions of the Loan Documents
relating to such third party insurance provider accounts receivable;
(j) such third party insurance provider accounts receivable do not become
subject to a legal, valid, binding and enforceable Tri-Party Agreement within
the timeframe set forth in Section 5.13 hereof;
(k) such third party insurance provider accounts receivable do not meet other
usual and customary eligibility criteria for third party insurance provider
accounts receivable, including the payors thereunder, as determined by the
Administrative Agents in their commercially reasonable discretion; or
(l) such third party insurance provider account receivable is evidenced by
"chattel paper" or an "instrument" of any kind unless such "chattel paper" or
"instrument" is in the possession of the applicable Collateral Agent, and to
the extent necessary or appropriate, endorsed to the related Collateral Agent.
"Environmental Laws" means all laws, rules, regulations, codes,
ordinances, orders, decrees, judgments, injunctions, or binding agreements
issued, promulgated or entered into by any Governmental Authority, relating in
any way to the pollution or protection of the environment or the preservation or
reclamation of natural resources, including those relating to the management,
release or threatened release of any Hazardous Material, or to employee health
and safety matters.
"Environmental Liability" means any liability, obligation, damage,
loss, claim, action, suit, judgment, order, fine, penalty, fee, expense or cost,
contingent or otherwise (including any liability for costs of environmental
remediation, or natural resource damages, administrative oversight costs, and
indemnities), of the Company or any Subsidiary directly or indirectly resulting
from or based upon (a) compliance or noncompliance with any Environmental Law,
(b) the generation, use, handling, transportation, storage, treatment or
disposal or presence of any Hazardous Materials, (c) exposure to any Hazardous
Materials, (d) the release or threatened release of any Hazardous Materials into
the environment or (e) any contract or agreement pursuant to which liability is
assumed or imposed with respect to any of the foregoing.
"Equity Interests" means shares of capital stock, partnership
interests, membership interests in a limited liability company, beneficial
interests in a trust or other equity ownership interests in a Person.
"ERISA" means the Employee Retirement Income Security Act of 1974, as
amended from time to time.
"ERISA Affiliate" means any trade or business (whether or not
incorporated) that, together with the Company, is treated as a single employer
under Section 414(b) or (c) of the Code or, solely for purposes of Section 302
of ERISA and Section 412 of the Code, is treated as a single employer under
Section 414 of the Code.
"ERISA Event" means (a) any "reportable event", as defined in Section
4043 of ERISA or the regulations issued thereunder with respect to a Plan (other
than an event for which the 30-day notice period is waived); (b) the existence
with respect to any Plan of an "accumulated funding deficiency" (as defined in
Section 412 of the Code or Section 302 of ERISA), whether or not waived; (c) the
filing pursuant to Section 412(d) of the Code or Section 303(d) of ERISA of an
application for a waiver of the minimum funding standard with respect to any
Plan; (d) the incurrence by the Company or any of its ERISA Affiliates of any
liability under Title IV of ERISA with respect to the termination of any Plan;
(e) the receipt by the Company or any ERISA Affiliate from the PBGC or a plan
administrator of any notice relating to an intention to terminate any Plan or
Plans or to appoint a trustee to administer any Plan; (f) the incurrence by the
Company or any of its ERISA Affiliates of any liability with respect to the
withdrawal or partial withdrawal from any Plan or U.S. Multiemployer Plan; or
(g) the receipt by the Company or any ERISA Affiliate of any notice, or the
receipt by any U.S. Multiemployer Plan from the Company or any ERISA Affiliate
of any notice, concerning the imposition of Withdrawal Liability or a
determination that a U.S. Multiemployer Plan is, or is expected to be, insolvent
or in reorganization, within the meaning of Title IV of ERISA.
"Eurodollar" means, when used in reference to any Loan or Borrowing,
whether such Loan, or the Loans comprising such Borrowing, are bearing interest
at a rate determined by reference to the Adjusted LIBO Rate.
"Event of Default" has the meaning assigned to such term in Article
VII.
"Exchange Act Filings" means all filings made by the Company pursuant
to the Securities and Exchange Act of 1934, and the rules promulgated
thereunder, since and including the annual report of the Company on Form 10-K
for the fiscal year ended immediately prior to the date as of which
representation and warranty is made or deemed to be made hereunder.
"Exchange Rate" means, on any day, (a) with respect to Canadian Dollars
in relation to U.S. Dollars, the spot rate at which U.S. Dollars are offered on
such day by JPMorgan Chase Bank in New York City for Canadian Dollars at
approximately 12:00 p.m. (New York City time), and (b) with respect to U.S.
Dollars in relation to Canadian Dollars, the spot rate at which Canadian Dollars
are offered on such day by JPMorgan Chase Bank in New York City for U.S. Dollars
at approximately 12:00 p.m. (New York City time), as quoted generally to
customers of JPMorgan Chase Bank.
"Excluded Subsidiary" has the meaning assigned to such term in Article
VII.
"Excluded Taxes" means, with respect to either Administrative Agent,
any Lender, any Issuing Bank or any other recipient of any payment to be made by
or on account of any obligation of any Borrower hereunder, (a) income or
franchise taxes imposed on (or measured by) its net income by the United States
of America, by Canada, or by the jurisdiction under the laws of which such
recipient is organized or in which its principal office is located or, in the
case of any Lender, in which its applicable lending office is located, (b) any
branch profits taxes imposed by the United States of America or any similar tax
imposed by any other jurisdiction described in clause (a) above, (c) United
States Federal withholding tax imposed with respect to amounts payable to a
Non-U.S. Lender (other than a Non-U.S. Lender that acquires a U.S. commitment or
any U.S. Exposure pursuant to Section 2.21(a) and any Lender that becomes
subject to U.S. withholding tax pursuant to Section 2.21(b)) to the extent that
the obligation to withhold such amounts existed on the date such Non-U.S. Lender
became a party to this Agreement (or became an assignee through any assignment
or a Participant through the purchase of any participation hereunder) or, with
respect to payments to a new lending office, the date such Non-U.S. Lender
designated such new lending office with respect to a Loan, (d) Canadian Federal
withholding tax imposed with respect to amounts payable to a Non-Canadian Lender
(other than a Non-Canadian Lender that becomes subject to Canadian Federal
withholding tax pursuant to the application of Section 2.21(b)) to the extent
that the obligation to withhold such amounts existed on the date such
Non-Canadian Lender became a party to this Agreement (or became an assignee
through any assignment or a Participant through the purchase of any
participation hereunder), or, with respect to payments to a new lending office,
the date such Non- Canadian Lender designated such new lending office with
respect to a Loan and (e) any withholding tax that is attributable to a Lender's
failure to comply with Section 2.16(e) or (h), except that clauses (c) and (d)
above shall not include amounts that arise (1) with respect to an assignment or
the designation of a new lending office made at the request of the Company; or
(2) to the extent the indemnity payment or additional amounts that any assignee
or Lender through a new lending office would be entitled to receive do not
exceed the indemnity payment or additional amounts that such assignee or person
making the designation of such new lending office would have been entitled to
receive in the absence of such assignment or designation.
"Existing Canadian Letters of Credit" means the letters of credit
issued prior to and outstanding as of the Effective Date, which are listed on
Schedule 1(a) under the caption "Existing Canadian Letters of Credit".
"Existing Credit Agreement" means that certain Credit Agreement dated
February 23, 2001 among the Loan Parties, the Agents and the Lenders, as amended
as of such date immediately prior to the date hereof.
"Existing U.S. Letters of Credit" means the letters of credit issued
prior to and outstanding as of the Effective Date, which are listed on Schedule
1(a) under the caption "Existing U.S. Letters of Credit".
"Federal Funds Effective Rate" means, for any day, the weighted average
(rounded upwards, if necessary, to the next 1/100 of 1%) of the rates on
overnight Federal funds transactions with members of the Federal Reserve System
arranged by Federal funds brokers, as published on the next succeeding Business
Day by the Federal Reserve Bank of New York, or, if such rate is not so
published for any day that is a Business Day, the average (rounded upwards, if
necessary, to the next 1/100 of 1%) of the quotations for such day for such
transactions received by the U.S. Administrative Agent from three Federal funds
brokers of recognized standing selected by it.
"Financial Officer" of any corporation means the chief financial
officer, principal accounting officer, treasurer, controller or any vice
president-finance, -financial services or -treasury services of such
corporation.
"Foreign Employee Benefit Plans" means any employee benefit plan (other
than a Canadian Multi-Employer Plan) as defined in Section 3(3) of ERISA which
is maintained or contributed to for the benefit of the employees of any Canadian
Loan Party, but which is not covered by ERISA pursuant to Section 4(b)(4) of
ERISA.
"Foreign Pension Plan" means any Foreign Employee Benefit Plan which,
under local law, is required to be funded through a trust or other funding
vehicle other than a trust or funding vehicle maintained by a Governmental
Authority.
"Foreign Pension Plan Event" means any event with respect to a Foreign
Employee Benefit Plan or Canadian Multi-Employer Plan which (a) only as to
Foreign Employee Benefit Plans, would be a "reportable event" as defined in
Section 4043 of ERISA or the regulations issued thereunder if those provisions
were applicable to the relevant Foreign Employee Benefit Plan or Canadian
Multi-Employer Plan (other than an event for which the 30-day notice period
would be waived); (b) is the termination of the plan in whole or in part at a
time when it is not fully funded on a windup basis; (c) is the receipt of a
proposal to wind up the plan in whole or in part issued by the Superintendent of
Financial Services of Ontario; or (d) is the failure to make required
contributions to a plan when such amounts are due.
"Foreign Subsidiary" means any Subsidiary that is organized under the
laws of a jurisdiction other than the United States of America or any State
thereof or the District of Columbia.
"GAAP" means generally accepted accounting principles in the United
States of America.
"Governmental Authority" means the government of the United States of
America, Canada, any other nation or any political subdivision thereof, whether
state, provincial or local, and any agency, authority, instrumentality,
regulatory body, court, central bank or other entity exercising executive,
legislative, judicial, taxing, regulatory or administrative powers or functions
of or pertaining to government.
"Guarantee" of or by any Person (the "guarantor") means any obligation,
contingent or otherwise, of the guarantor guaranteeing or having the economic
effect of guaranteeing any Indebtedness or other obligation of any other Person
(the "primary obligor") in any manner, whether directly or indirectly, and
including any obligation of the guarantor, direct or indirect, (a) to purchase
or pay (or advance or supply funds for the purchase or payment of) such
Indebtedness or other obligation or to purchase (or to advance or supply funds
for the purchase of) any security for the payment thereof, (b) to purchase or
lease property, securities or services for the purpose of assuring the owner of
such Indebtedness or other obligation of the payment thereof, (c) to maintain
working capital, equity capital or any other financial statement condition or
liquidity of the primary obligor so as to enable the primary obligor to pay such
Indebtedness or other obligation or (d) as an account party in respect of any
letter of credit or letter of guaranty issued to support such Indebtedness or
obligation; provided that the term Guarantee shall not include endorsements for
collection or deposit in the ordinary course of business. The amount of any
Guarantee by a person shall be deemed to be an amount equal to the stated amount
or determinable amount of the primary obligation in respect of which such
Guarantee is made or, if not stated or determinable, the maximum reasonably
anticipated liability in respect thereof (assuming such person is required to
perform thereunder) as determined by such person in good faith.
"Guarantee Agreements" means the U.S. Guarantee Agreement and the
Canadian Guarantee Agreement.
--------------------
"Hazardous Materials" means all explosive, radioactive, hazardous or
toxic substances, wastes or other pollutants, including petroleum or petroleum
distillates, asbestos or asbestos containing materials, polychlorinated
biphenyls, radon gas, infectious or medical wastes, and all other substances or
wastes of any nature regulated pursuant to any Environmental Law.
"HBA" means health and beauty aids.
"Hedging Agreement" means any Currency and Commodity Hedging Agreement
or Interest Rate Hedging Agreement. "Increased Lender" has the meaning
set forth in Section 2.08(d).
"Indebtedness" of any Person means, without duplication, (a) all
obligations of such Person for borrowed money, (b) all obligations of such
Person evidenced by bonds, debentures, notes or similar instruments, (c) all
obligations of such Person upon which interest charges are customarily paid
(excluding current accounts payable in the ordinary course of business), (d) all
obligations of such Person under conditional sale or other title retention
agreements relating to property acquired by such Person, (e) all obligations of
such Person in respect of the deferred purchase price of property or services
(excluding current accounts payable incurred in the ordinary course of
business), (f) all Indebtedness of others secured by (or for which the holder of
such Indebtedness has an existing right, contingent or otherwise, to be secured
by) any Lien on property owned or acquired by such Person, whether or not the
Indebtedness secured thereby has been assumed, (g) all Guarantees by such Person
of Indebtedness of others, (h) all Capital Lease Obligations of such Person, (i)
all obligations, contingent or otherwise, of such Person as an account party in
respect of letters of credit and letters of guaranty and (j) all obligations,
contingent or otherwise, of such Person in respect of bankers' acceptances. The
Indebtedness of any Person shall include the Indebtedness of any other entity
(including any partnership in which such Person is a general partner) to the
extent such Person is liable therefor as a result of such Person's ownership
interest in or other relationship with such entity, except to the extent the
terms of such Indebtedness provide that such Person is not liable therefor.
"Indemnified Taxes" means Taxes other than Excluded Taxes.
-----------------
"Indemnity, Subrogation and Contribution Agreement" means the Amended
and Restated Indemnity, Subrogation and Contribution Agreement among the Loan
Parties party thereto and the Collateral Agents, substantially in the form of
Exhibit G.
"Information Memorandum" means the Confidential Information Memorandum
dated October 2003 relating to the Borrowers and the Transactions.
"Interest Election Request" means a request by a Borrower to convert or
continue a Borrowing in accordance with Section 2.07.
"Interest Payment Date" means (a) with respect to any ABR Loan or
Canadian Prime Loan, the last Business Day of each calendar month and (b) with
respect to any Eurodollar Loan, the last day of the Interest Period applicable
to the Borrowing of which such Loan is a part and, in the case of a Eurodollar
Borrowing with an Interest Period of more than three months' duration, each day
prior to the last day of such Interest Period that occurs at intervals of three
months' duration after the first day of such Interest Period.
"Interest Period" means, with respect to any Eurodollar Borrowing, the
period commencing on the date of such Borrowing and ending on the numerically
corresponding day in the calendar month that is one, two, three, six, nine or
twelve months thereafter, as the applicable Borrower may elect, provided that
(a) if any Interest Period would end on a day other than a Business Day, such
Interest Period shall be extended to the next succeeding Business Day unless
such next succeeding Business Day would fall in the next calendar month, in
which case such Interest Period shall end on the next preceding Business Day and
(b) any Interest Period that commences on the last Business Day of a calendar
month (or on a day for which there is no numerically corresponding day in the
last calendar month of such Interest Period) shall end on the last Business Day
of the last calendar month of such Interest Period. For purposes hereof, the
date of a Borrowing initially shall be the date on which such Borrowing is made
and thereafter shall be the effective date of the most recent conversion or
continuation of such Borrowing.
"Interest Rate Hedging Agreement" means any interest rate protection
agreement or other interest rate hedging arrangement.
"Inventory" means all products available for sale by the Company and
the other Loan Parties in the following categories as defined and classified by
the Company and the other Loan Parties on a basis consistent with the Company's
current and historical accounting practices: HBA, perishable, grocery, pharmacy,
meat, seafood, produce, floral, bakery, deli, dairy, liquor, and fuel, each
valued at cost on a basis consistent with the current and historical accounting
practices (without giving effect to LIFO reserves).
"Issuing Bank" means, as the context may require, the U.S. Issuing Bank
or the Canadian Issuing Bank, and "Issuing Banks" means both of such banks.
"L/C Disbursement" means a payment made by an Issuing Bank pursuant to
a Letter of Credit.
"L/C Exposure" means the U.S. L/C Exposure and the Canadian L/C
Exposure.
"Leasehold Obligations" means, with respect to each Loan Party, all
payments made (expressed in U.S. Dollars), if any, by such Loan Party with
respect to rent (including fixed rent and variable rent), common area
maintenance charges and other monetary obligations under any lease of real
property (including any Distribution Center or Store) where any Inventory is
stored or otherwise located.
"Lenders" means the Persons listed on Schedule 2.01 and any other
Person that shall have become a party hereto pursuant to an Assignment and
Acceptance, other than any Person that ceases to be a Party hereto pursuant to
an Assignment and Acceptance.
"Letter of Credit" means any letter of credit issued pursuant to this
Agreement.
"LIBO Rate" means, for any Interest Period, the rate appearing on Page
3750 of the Telerate Service (or on any successor or substitute page of such
Telerate Service, or any successor to or substitute for such Telerate Service,
providing rate quotations comparable to those currently provided on such page of
such Telerate Service, as determined by the applicable Administrative Agent from
time to time for purposes of providing quotations of interest rates applicable
to dollar deposits in the London interbank market) at approximately 11:00 a.m.,
London time, two Business Days prior to the commencement of such Interest
Period, as the rate for dollar deposits with a maturity comparable to such
Interest Period. In the event that such rate is not available at such time for
any reason, then the "LIBO Rate" for such Interest Period shall be the rate at
which dollar deposits of U.S.$5,000,000 and for a maturity comparable to such
Interest Period are offered by the principal London office of the U.S.
Administrative Agent in immediately available funds in the London interbank
market at approximately 11:00 a.m., London time, two Business Days prior to the
commencement of such Interest Period.
"Lien" means, with respect to any asset, (a) any mortgage, deed of
trust, lien, pledge, hypothecation, encumbrance, charge or security interest in,
on or of such asset, (b) the interest of a vendor or a lessor under any
conditional sale agreement, capital lease or title retention agreement (or any
financing lease having substantially the same economic effect as any of the
foregoing) relating to such asset and (c) in the case of securities, any
purchase option, call or similar right of a third party with respect to such
securities.
"Loan" means any loan made by a Lender to a Borrower pursuant to this
Agreement.
"Loan Documents" means this Agreement, the Guarantee Agreements, the
Indemnity, Subrogation and Contribution Agreement and the Security Documents.
"Loan Parties" means the U.S. Loan Parties and the Canadian Loan
Parties.
------------
"Material Adverse Effect" means a material adverse effect on (a) the
business, assets, operations or condition, financial or otherwise, of the
Company and the Subsidiaries taken as a whole, (b) the ability of any Loan Party
to perform any of its obligations under any Loan Document, (c) the rights of or
benefits available to the Lenders under any Loan Document or (d) the Collateral
as a whole.
"Material Indebtedness" means Indebtedness (other than the Acceptances,
Loans and Letters of Credit), or obligations in respect of one or more Hedging
Agreements, of any one or more of the Company and its Subsidiaries in an
aggregate principal amount exceeding U.S.$10,000,000 (or its equivalent). For
purposes of determining Material Indebtedness, the "principal amount" of the
obligations of the Company or any Subsidiary in respect of any Hedging Agreement
at any time shall be the maximum aggregate amount (giving effect to any netting
agreements) that the Company or such Subsidiary would be required to pay if such
Hedging Agreement were terminated at such time.
"Maturity Date" means the fourth anniversary of the Effective Date;
provided that if the 2007 Notes have not been defeased or refinanced with a
maturity date no earlier than 180 days after the fourth anniversary of the
Effective Date, then the Maturity Date shall be October 15, 2006.
"Maximum Rate" has the meaning set forth in Section 9.13.
"Moody's" means Moody's Investors Service, Inc. and its successors.
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"Mortgage" means a mortgage, deed of trust, assignment of leases and
rents, leasehold mortgage or other security document granting a Lien on any
Mortgaged Property to secure the Obligations on or before the date hereof.
"Mortgaged Property" means each parcel of real property and the
improvements thereto owned by a U.S. Loan Party and identified on Schedule 1.
"Mortgaged Property" shall not be deemed to include any property that has ceased
to be a Mortgaged Property in accordance with the provisions of Section 2.22.
"Net Proceeds" means, with respect to any event (a) the cash proceeds
received in respect of such event including (i) any cash received in respect of
any non-cash proceeds, but only as and when received, (ii) in the case of a
casualty, insurance proceeds, and (iii) in the case of a condemnation or similar
event, condemnation awards and similar payments, net of (b) the sum of (i) all
reasonable fees and out-of-pocket expenses paid by the Company and the
Subsidiaries to third parties (other than Affiliates) in connection with such
event, (ii) in the case of a sale, transfer or other disposition of an asset
(including pursuant to a sale and leaseback transaction or a casualty or a
condemnation or similar proceeding), the amount of all payments required to be
made by the Company and the Subsidiaries as a result of such event to repay
Indebtedness (other than Loans) secured by such asset or otherwise subject to
mandatory prepayment as a result of such event, (iii) the amount of all taxes
paid (or reasonably estimated to be payable) by the Company and the
Subsidiaries, and the amount of any reserves established by the Company and the
Subsidiaries to fund contingent liabilities reasonably estimated to be payable,
in each case during the year that such event occurred or the next succeeding
year and that are directly attributable to such event (as determined reasonably
and in good faith by the chief financial officer of the Company) and (iv) all
amounts deposited in trust or escrow for the benefit of any third party or to
which any third party may be entitled in connection with such event, provided
that any such amounts returned to the Company or any Subsidiary shall constitute
Net Proceeds when received.
"Net Orderly Liquidation Value" or "NOLV" means the estimated net
income, payments and proceeds (net of all expenses) which could reasonably be
realized in connection with an orderly liquidation of all Inventory or all
Scripts, as the case may be, given a reasonable period of time for soliciting
offers (estimated to be approximately 4 to 6 weeks) for the sale of such
Inventory or Scripts on an "as is, where is" basis.
"Net Recovery Rate" means the quotient of (x) the estimated net income,
payments and proceeds from the sale, exchange, collection or other disposition
of each Loan Party's Inventory (as determined on a Net Orderly Liquidation Value
basis), based on an appraisal provided by an appraiser retained or approved by
the Administrative Agents in consultation with the Borrowers and (y) the cost of
the Eligible Inventory as of the effective date of the estimate provided
pursuant to clause (x) of this definition.
"Non-Acceptance Canadian Lender" has the meaning assigned to such term
in Section 2.04(i).
"Non-Canadian Lender" means a Lender or a Participant that is
incorporated under the laws of a jurisdiction other than Canada or any Province
thereof.
"Non-U.S. Lender" means a Lender or a Participant that is organized
under the laws of a jurisdiction other than the United States, any State thereof
or the District of Columbia.
"Notice of Drawing" means a notice requesting the issuance of
Acceptances, pursuant to Section 2.04.
"Obligations" means the U.S. Obligations and the Canadian Obligations.
-----------
"Other Taxes" means any and all present or future recording, stamp,
documentary, excise, transfer, sales, property or similar taxes, charges or
levies arising from any payment made under any Loan Document or from the
execution, delivery or enforcement of, or otherwise with respect to, any Loan
Document.
"PACA Liability Reserve" means an amount calculated on a monthly basis
by the U.S. Collateral Agent to provide for vendor liabilities pursuant to the
Perishable Agricultural Commodities Act of 1930, as amended.
"Participant" has the meaning assigned to such term in Section 9.04(e).
"PBGC" means the Pension Benefit Guaranty Corporation referred to and
defined in ERISA and any successor entity performing similar functions.
"Pension Plan Event" means an ERISA Event or a Foreign Pension Plan
Event.
"Perfection Certificate" means a certificate substantially in the form
of Exhibit H or any other form reasonably approved by the Collateral Agents.
"Permitted Encumbrances" means:
(a) Liens imposed by law for Taxes, assessments and
governmental charges or claims that are not yet delinquent or are being
contested in compliance with Section 5.05;
(b) carriers', landlord's, warehousemen's, mechanics',
materialmen's and repairmen's liens, statutory liens of banks and
rights of set-off and other Liens imposed by law, arising in the
ordinary course of business and securing obligations that are not
overdue by more than 30 days or are being contested in compliance with
Section 5.05;
(c) pledges and deposits made in the ordinary course of
business in compliance with workers' compensation, unemployment
insurance and other social security laws or regulations and deposits
securing liability to insurance carriers under insurance arrangements;
(d) deposits to secure the performance of bids, tenders, trade
contracts, leases, statutory obligations, surety and appeal bonds,
performance bonds and other obligations of a like nature, in each case
in the ordinary course of business;
(e) judgment liens in respect of judgments that do not
constitute an Event of Default under clause (k) of Article VII; and
(f) easements, zoning restrictions, rights-of-way and similar
encumbrances on real property imposed by law or arising in the ordinary
course of business that do not secure any monetary obligations and do
not materially detract from the value of the affected property or
interfere with the ordinary conduct of business of the Company or any
Subsidiary;
provided that the term "Permitted Encumbrances" shall not include any Lien
securing Indebtedness.
"Permitted Investments" means:
(a) direct obligations of, or obligations the principal of and
interest on which are unconditionally guaranteed by, the United States
of America or Canada (or by any agency thereof to the extent such
obligations are backed by the full faith and credit of the United
States of America or Canada), in each case maturing within one year
from the date of acquisition thereof;
(b) investments in commercial paper maturing within 270 days
from the date of acquisition thereof and having, at such date of
acquisition, the highest credit rating obtainable from S&P, Moody's or
from DBRS;
(c) investments in certificates of deposit, banker's
acceptances and time deposits maturing within 180 days from the date of
acquisition thereof issued or guaranteed by or placed with, and money
market deposit accounts issued or offered by, any domestic office of
any commercial bank organized under the laws of the United States of
America or any state thereof or under the Federal laws of Canada which
has a combined capital and surplus and undivided profits of not less
than U.S.$250,000,000 (or its equivalent); and
(d) fully collateralized repurchase agreements with a term of
not more than 30 days for securities described in clause (a) above and
entered into with a financial institution satisfying the criteria
described in clause (c) above; and
(e) Cash Equivalents.
"Person" means any natural person, corporation, limited liability
company, trust, joint venture, association, company, partnership, Governmental
Authority or other entity.
"Plan" means any employee pension benefit plan (other than a U.S.
Multiemployer Plan) subject to the provisions of Title IV of ERISA or Section
412 of the Code or Section 302 of ERISA, and in respect of which the Company or
any ERISA Affiliate is (or, if such plan were terminated, would under Section
4069 of ERISA be deemed to be) an "employer" as defined in Section 3(5) of
ERISA.
"Pledge Agreements" means the Canadian Pledge Agreement and the U.S.
Pledge Agreement.
-----------------
"PPSA" means the Personal Property Security Act (Ontario) or similar
personal property security legislation in the Provinces of Canada other than
Ontario, as the same may be in effect on the date of determination in the
applicable jurisdiction.
"Prepayment Event" means:
(a) any sale, transfer or other disposition (including
pursuant to a sale and leaseback transaction) of any property or asset
of the Company or any Subsidiary, other than (i) dispositions described
in clauses (a) and (b) of Section 6.05 and (ii) other dispositions
resulting in aggregate Net Proceeds not exceeding U.S.$20,000,000
during any fiscal year of the Company; or
(b) any casualty or other insured damage to, or any taking
under power of eminent domain or by condemnation or similar proceeding
of, any property or asset of the Company or any Subsidiary, but (i)
only to the extent that the Net Proceeds therefrom have not been
applied to repair, restore or replace such property or asset within 180
days after such event and (ii) only to the extent the value of such
loss is in excess of U.S.$1,000,000 (or its equivalent); or
(c) the issuance by the Company or any Subsidiary of any
Equity Interests, or the receipt by the Company or any Subsidiary of
any capital contribution, other than any such issuance of Equity
Interests to, or receipt of any such capital contribution from, the
Company or a Subsidiary; or
(d) the incurrence by the Company or any Subsidiary (i) of any
Indebtedness, other than Indebtedness permitted by Section 6.01 (except
as described in clause (ii) of this paragraph) or (ii) any Indebtedness
described in clause (a)(ii)(B) of Section 6.01 in excess of the amount
used to prepay the 2004 Notes, 2007 Notes, 2011 Notes or other of the
Company's debt securities and any reasonable premiums, fees or expenses
incurred in connection with such prepayment.
"Prime Rate" means (a) in respect of ABR Loans provided by U.S.
Lenders, the rate of interest per annum publicly announced from time to time by
JPMorgan Chase Bank as its prime rate in effect at its principal office in New
York City and (b) in respect of ABR Loans provided by Canadian Lenders, the rate
of interest per annum publicly announced from time to time by JPMorgan Chase
Bank, Toronto Branch as its U.S. base rate in effect at its office in Toronto;
each change in the Prime Rate shall be effective on the date such change is
publicly announced as being effective.
"Priority of Claims Waiver" means a waiver of a Person's right, title
and interest in, to or under the Inventory.
"Qualified Preferred Stock" means, with respect to any Person, any
preferred capital stock or preferred equity interest that by its terms (or by
the terms of any security into which it is convertible or for which it is
exchangeable or exercisable) or upon the happening of any event does not (a)
mature or becomes mandatorily redeemable prior to the Maturity Date, pursuant to
a sinking fund obligation or otherwise; (b) become convertible or exchangeable
at the option of the holder thereof for Indebtedness or preferred stock that is
not Qualified Preferred Stock, prior to the Maturity Date; or (c) become
redeemable at the option of the holder thereof, in whole or in part, prior to
the Maturity Date.
"Ratings Requirement" means a corporate rating or senior unsecured debt
rating of at least B+ from S&P and B1 from Moody's.
"Reallocated Commitment" has the meaning set forth in Section 2.08(d).
"Reduced Lender" has the meaning set forth in Section 2.08(d).
"Register" has the meaning set forth in Section 9.04(c).
"Related Parties" means, with respect to any specified Person, such
Person's Affiliates and the respective directors, officers, employees, agents
and advisors of such Person and such Person's Affiliates.
"Reset Date" has the meaning set forth in Section 2.20(a).
"Required Lenders" means, at any time, Lenders having Canadian
Exposure, U.S. Exposure and unused Commitments representing greater than 50%
(except as set forth in Section 9.02(b)(vi)) of the sum of all Canadian
Exposure, U.S. Exposure and unused Commitments at such time. For purposes of
determining the Required Lenders, any amounts denominated in Canadian Dollars
shall be translated into the U.S. Dollar Equivalent at the Exchange Rate in
effect on the Effective Date.
"Restricted Payment" means any dividend or other distribution (whether
in cash, securities or other property) with respect to any Equity Interests in
the Company or any Subsidiary, or any payment (whether in cash, securities or
other property), including any sinking fund or similar deposit, on account of
the purchase, redemption, retirement, acquisition, cancellation or termination
of any Equity Interests in the Company or any option, warrant or other right to
acquire any such Equity Interests in the Company.
"S&P" means Standard & Poor's Ratings Service, a Division of The
McGraw-Hill Companies, and its successors.
"Schedule I Lender" means, any Canadian Lender named on Schedule I to
the Bank Act (Canada).
"Schedule II or III Lender" means any Canadian Lender named on Schedule
II or Schedule III to the Bank Act (Canada).
"Schedule II or III Reference Banks" means JPMorgan Chase Bank, Toronto
Branch, or any bank named on Schedule II or Schedule III to the Bank Act
(Canada) and agreed upon by the Canadian Administrative Agent and the Canadian
Borrower.
"Scripts" means the pharmaceutical customer list owned and controlled
by each Loan Party relating to certain items and services, including, without
limitation, any drug price data, drug eligibility data, clinical drug
information and health information of a pharmaceutical customer that is not
protected under Sections 1171 through 1179 of the Social Security Act or other
applicable law.
"Security Agreements" means the Canadian Security Agreement and the
U.S. Security Agreement.
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"Security Documents" means the Security Agreements, the Pledge
Agreements and the Mortgages.
------------------
"Statutory Reserve Rate" means a fraction (expressed as a decimal), the
numerator of which is the number one and the denominator of which is the number
one minus the aggregate of the maximum reserve percentages (including any
marginal, special, emergency or supplemental reserves) expressed as a decimal
established by the Board to which the U.S. Administrative Agent is subject (a)
with respect to the Base CD Rate, for new negotiable nonpersonal time deposits
in dollars of over U.S.$100,000 with maturities approximately equal to three
months and (b) with respect to the Adjusted LIBO Rate, for eurocurrency funding
(currently referred to as "Eurocurrency Liabilities" in Regulation D of the
Board). Such reserve percentages shall include those imposed pursuant to such
Regulation D of the Board. Eurodollar Loans shall be deemed to constitute
Eurocurrency funding and to be subject to such reserve requirements without
benefit of or credit for proration, exemptions or offsets that may be available
from time to time to any Lender under such Regulation D of the Board or any
comparable regulation. The Statutory Reserve Rate shall be adjusted
automatically on and as of the effective date of any change in any reserve
percentage.
"Stores" means the U.S. Stores and the Canadian Stores.
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"Store Shrink Percentage" shall be applicable to Inventory located at
the Stores and shall mean, on any date, a percentage that is equal to (a) the
amount of inventory shrink expressed in retail dollars resulting from the last
three physical Store inventories, divided by (b) sales for the period relating
to such last three physical Store inventories.
"Store Shrink Reserve" shall be equal to the product of (a) the excess
of the Store Shrink Percentage over 1%, multiplied by (b) sales occurring since
the last Store physical inventory, with such product expressed in terms of cost
value in accordance with the Borrower's historical retail method of accounting.
"subsidiary" means, with respect to any Person (the "parent") at any
date, any corporation, limited liability company, partnership, association or
other entity the accounts of which would be consolidated with those of the
parent in the parent's consolidated financial statements if such financial
statements were prepared in accordance with GAAP as of such date, as well as any
other corporation, limited liability company, partnership, association or other
entity (a) of which securities or other ownership interests representing more
than 50% of the equity or more than 50% of the ordinary voting power or, in the
case of a partnership, more than 50% of the general partnership interests are,
as of such date, owned, controlled or held, or (b) that is, as of such date,
otherwise Controlled, by the parent or one or more subsidiaries of the parent or
by the parent and one or more subsidiaries of the parent.
"Subsidiary" means any subsidiary of the Company, including the
Canadian Borrower.
"Taxes" means any and all present or future taxes, levies, imposts,
duties, deductions, charges or withholdings imposed by any Governmental
Authority.
"Three-Month Secondary CD Rate" means, for any day, the secondary
market rate for three-month certificates of deposit reported as being in effect
on such day (or, if such day is not a Business Day, the next preceding Business
Day) by the Board through the public information telephone line of the Federal
Reserve Bank of New York (which rate will, under the current practices of the
Board, be published in Federal Reserve Statistical Release H.15(519) during the
week following such day) or, if such rate is not so reported on such day or such
next preceding Business Day, the average of the secondary market quotations for
three-month certificates of deposit of major money center banks in New York City
received at approximately 10:00 a.m., New York City time, on such day (or, if
such day is not a Business Day, on the next preceding Business Day) by the U.S.
Administrative Agent from three negotiable certificate of deposit dealers of
recognized standing selected by it.
"Trailing Borrowing Base Availability" means, for any period, an amount
equal to the weekly average of the Borrowing Base Availability for such period.
"Transactions" means the execution, delivery and performance by each
Loan Party of the Loan Documents to which it is to be a party, the borrowing of
Loans, the use of the proceeds thereof, the creation of Acceptances and the
issuance of Letters of Credit hereunder.
"Treasury Securities" means any investment in obligations issued or
guaranteed by the United States government or any agency thereof.
"Treasury Yield" means the yield to maturity at the time of computation
of Treasury Securities with a constant maturity (as compiled by and published in
the most recent Federal Reserve Statistical Release H.15(519) which has become
publicly available at least two Business Days prior to the date fixed for
repurchase (or, if such Statistical Release is no longer published, any publicly
available source of similar data)) most nearly equal to the then remaining
average life of the debt securities being repurchased, provided that if the
average life of such debt securities is not equal to the constant maturity of a
Treasury Security for which a weekly average yield is given, the Treasury Yield
shall be obtained by linear interpolation (calculated to the nearest one-twelfth
of a year) from the weekly average yields of Treasury Securities for which such
yields are given, except that if the average life of the notes is less than one
year, the weekly average yield on actually traded Treasury Securities adjusted
to a constant maturity of one year shall be used.
"Tri-Party Agreements" means each agreement, in form and substance
satisfactory to the Agents, executed among a Loan Party, the Collateral Agent
and a credit card processor or third party healthcare payor acknowledging the
first priority perfected security interest of the Collateral Agents in the
processing agreements for the Credit Card Receivables or the third party
insurance provider accounts receivables, as the case may be.
"Type", when used in reference to any Loan or Borrowing, refers to
whether the rate of interest on such Loan, or on the Loans comprising such
Borrowing, is determined by reference to the Adjusted LIBO Rate, the Alternate
Base Rate or the Canadian Prime Rate.
"Uniform Commercial Code" or "UCC" means the Uniform Commercial Code as
in effect on the date of determination in the applicable jurisdiction.
"U.S. Administrative Agent" means JPMorgan Chase Bank, a New York
banking corporation, in its capacity as administrative agent for the U.S.
Lenders hereunder, together with its successors and assigns.
"U.S. Availability" means the amount by which the lesser of the
aggregate outstanding U.S. Commitment or the U.S. Borrowing Base, within all
applicable sublimits, exceeds the U.S. Exposure.
"U.S. Borrowers" means the Company, Compass Foods, Inc., Borman's,
Inc., Shopwell, Inc., Waldbaum, Inc., Super Fresh Food Markets, Inc. and Super
Market Service Corp.
"U.S. Borrowing" means a Borrowing comprised of U.S. Loans.
"U.S. Borrowing Base" means, on any date (subject to adjustment as
provided in Section 1.06), the aggregate value of the U.S. assets of the U.S.
Loan Parties, in an amount (calculated based on the most recent Borrowing Base
Certificate delivered to the U.S. Administrative Agent in accordance with
Section 5.01(f), absent any error in such Borrowing Base Certificate) that is
equal to:
(a) the lesser of (x) the product of (A) 85% and (B) the Net Recovery
Rate and (C) the aggregate amount of Eligible Inventory (expressed in U.S.
Dollars) and (y) 65% of Eligible Inventory and, plus
(b) the product of (x) 90% (or such other rate as determined from time
to time by the U.S. Administrative Agent in its commercially reasonable
discretion) and (y) all Eligible Credit Card Account Receivables, plus
(c) the product of (x) 85% (or such other rate as determined from time
to time by the U.S. Administrative Agent in its commercially reasonable
discretion) and (y) Eligible Coinstar Receivables, plus
(d) the product of (x) 85% (or such other rate as determined from time
to time by the U.S. Administrative Agent in its commercially reasonable
discretion) and (y) Eligible Third Party Insurance Provider Accounts
Receivables, plus
(e) the product of (x) 25% (or such other rate as determined from time
to time by the U.S. Administrative Agent in its commercially reasonable
discretion) and (y) the Net Orderly Liquidation Value of Scripts (provided that
in no event shall the amount credited pursuant to this clause (e) exceed
U.S.$10,000,000), minus
(f) the sum of (i) the aggregate dollar amount (expressed in U.S.
Dollars) represented by gift certificates then outstanding and entitling the
holder thereof to use all or a portion thereof to pay all or a portion of the
purchase price for any Inventory as of such day, (ii) the U.S. Reserve for
Leasehold Obligations, (iii) the PACA Liability Reserve and (iv) the maximum
aggregate amount (giving effect to any netting agreements) that the Company and
its Subsidiaries would be required to pay under any Hedging Agreements secured
by the Security Documents the obligations under which constitute U.S.
Obligations if such Hedging Agreements were terminated, determined as of the
most recent date for which financial statements have been delivered pursuant to
Section 5.01(a), (b) or (c).
The U.S. Borrowing Base shall be computed for each calendar week as
required by Section 5.01(f), and established based upon the most recent
Borrowing Base Certificate delivered to the Administrative Agents and shall
remain in effect until the delivery to the Administrative Agents of a subsequent
Borrowing Base Certificate.
"U.S. Business Day" means any day that is not a Saturday, Sunday or
other day on which commercial banks in New York City are authorized or required
by law to remain closed; provided that, when used in connection with a
Eurodollar Loan, the term "U.S. Business Day" shall also exclude any day on
which banks are not open for dealings in dollar deposits in the London interbank
market.
"U.S. Collateral Agent" means JPMorgan Chase Bank, a New York banking
corporation, in its capacity as collateral agent for the U.S. Secured Parties
under the applicable Security Documents.
"U.S. Commitment" means, with respect to each Lender, the commitment,
if any, of such Lender to make U.S. Loans and to acquire participations in U.S.
Letters of Credit, expressed as an amount representing the maximum aggregate
amount of such Lender's U.S. Exposure hereunder, as such commitment may be (a)
reduced from time to time pursuant to paragraph (b) or (c) of Section 2.08 and
(b) reduced or increased from time to time pursuant to reallocations pursuant to
paragraph (d) of Section 2.08 or Section 2.21 or pursuant to assignments by or
to such Lender pursuant to Section 9.04. The initial amount of each Lender's
U.S. Commitment is set forth on Schedule 2.01, or in the Assignment and
Acceptance pursuant to which such Lender shall have assumed its U.S. Commitment,
as applicable. The initial aggregate amount of the Lenders' U.S. Commitments is
Three Hundred Thirty Million U.S. Dollars (U.S.$330,000,000).
"U.S. Distribution Centers" means (i) the warehouse facilities operated
by the U.S. Loan Parties on the date hereof as set forth in Schedule B and (ii)
any warehouse facility located in the United States and operated by U.S. Loan
Parties that is designated as a U.S. Distribution Center by (a) giving 30 days
prior written notice to the Administrative Agent and (b) effecting the
execution, filing and recordation of such financing statements and taking any
and all such further actions as may be reasonably requested by the
Administrative Agents.
"U.S. Dollar Equivalent" means, with respect to an amount of Canadian
Dollars on any date, the amount of U.S. Dollars that may be purchased with such
amount of Canadian Dollars at the Exchange Rate with respect to Canadian Dollars
on such date.
"U.S. Dollars" and the symbol "U.S.$" mean the lawful currency of the
United States.
"U.S. Exposure" means, at any time, the aggregate principal amount of
outstanding U.S. Loans and U.S. L/C Exposure at such time. The U.S. Exposure of
any U.S. Lender at any time shall be the sum of its U.S. L/C Exposure plus the
aggregate principal amount of its outstanding U.S. Loans at such time.
"U.S. Guarantee Agreement" means the Amended and Restated U.S.
Guarantee Agreement among the U.S. Loan Parties and the U.S. Collateral Agent,
substantially in the form of Exhibit I.
"U.S. Issuing Bank" means JPMorgan Chase Bank, in its capacity as the
issuer of U.S. Letters of Credit hereunder, and its successors in such capacity
as provided in Section 2.05(i). The U.S. Issuing Bank may, in its discretion,
arrange for one or more U.S. Letters of Credit to be issued by Affiliates of the
U.S. Issuing Bank, in which case the term "U.S. Issuing Bank" shall include any
such Affiliate with respect to U.S. Letters of Credit issued by such Affiliate.
In the event that there is more than one U.S. Issuing Bank at any time,
references herein and in the other Loan Documents to the U.S. Issuing Bank shall
be deemed to refer to the U.S. Issuing Bank in respect of the applicable U.S.
Letter of Credit or to all U.S. Issuing Banks, as the context requires.
"U.S. L/C Exposure" means, at any time, the sum of (a) the aggregate
undrawn amount of all outstanding U.S. Letters of Credit at such time plus (b)
the aggregate principal amount of all L/C Disbursements made pursuant to U.S.
Letters of Credit that have not yet been reimbursed by or on behalf of a U.S.
Borrower at such time. The U.S. L/C Exposure of any U.S. Lender at any time
shall mean its Applicable Percentage of the aggregate U.S. L/C Exposure at such
time.
"U.S. Lender" means any Lender that has a U.S. Commitment or any U.S.
Exposure. The initial U.S. Lenders are listed on Schedule 2.01 under the caption
"U.S. Lenders".
"U.S. Letter of Credit" means any Letter of Credit issued by the U.S.
Issuing Bank for the account of a U.S. Borrower. Each Existing U.S. Letter of
Credit shall be deemed to constitute a U.S. Letter of Credit issued hereunder on
the Effective Date for all purposes of the Loan Documents.
"U.S. Loan" means a Loan made pursuant to paragraph (a) of Section
2.01.
"U.S. Loan Parties" means each of the Company, the other U.S. Borrowers
and each other U.S. Subsidiary identified as a "U.S. Loan Party" on Schedule
3.12 and each U.S. Subsidiary made a party hereto pursuant to Section 5.12.
"U.S. Multiemployer Plan" or "Multiemployer Plan" means a multiemployer
plan as defined in Section 4001(a)(3) of ERISA.
"U.S. Obligations" has the meaning assigned to such term in the U.S.
Security Agreement.
"U.S. Pledge Agreement" means the Amended and Restated U.S. Pledge
Agreement among the U.S. Loan Parties party thereto and the U.S. Collateral
Agent, substantially in the form of Exhibit J.
"U.S. Priming Jurisdiction" means any jurisdiction listed on Schedule A
hereto, which schedule may be revised by the Administrative Agents to reflect
changes in applicable law. The Administrative Agent shall provide the Company
with ten (10) days' prior written notice of any revisions to the jurisdictions
listed on Schedule A hereto.
"U.S. Reserve for Leasehold Obligations" means, on any date, the
aggregate amount of Leasehold Obligations of the U.S. Loan Parties due and owing
with respect to properties of a vendor, landlord, public warehouse operator or
other third party bailee located in a U.S. Priming Jurisdiction that has not
provided a Priority of Claims Waiver in form and substance satisfactory to the
Administrative Agents; for each such property the amount of Leasehold
Obligations shall be either (x) within ninety (90) days of the Effective Date,
one month's Leasehold Obligations or (y) from and after the ninetieth day
following the Effective Date, either (i) the next two months' Leasehold
Obligations (net of any Letter of Credit amount benefiting such landlord in
respect of such Leasehold Obligations) or (ii) if less than the next two months'
Leasehold Obligations (net of any Letter of Credit amount benefiting such
landlord in respect of such Leasehold Obligations) and at the discretion of the
Administrative Agents, the fair market value of Eligible Inventory located at
such property. For the avoidance of doubt, the amount of Leasehold Obligations
for any property for which a satisfactory Priority of Claims Waiver is delivered
by a vendor, landlord, public warehouse operator or other third party bailee,
shall be zero.
"U.S. Security Agreement" means the Amended and Restated U.S. Security
Agreement among the U.S. Loan Parties party thereto and the U.S. Collateral
Agent, substantially in the form of Exhibit K.
"U.S. Stores" means all supermarket retail locations of the Company and
other U.S. Loan Parties selling Inventory owned by the U.S. Loan Parties.
"U.S. Subsidiary" means each Subsidiary which is not a Foreign
Subsidiary; "U.S. Subsidiaries" means all such Subsidiaries.
"Withdrawal Liability" means liability to a U.S. Multiemployer Plan as
a result of a complete or partial withdrawal from such U.S. Multiemployer Plan,
as such terms are defined in Part I of Subtitle E of Title IV of ERISA.
"Working Capital" means the difference between current assets
(including, without limitation, cash, inventory and accounts receivable) and
current liabilities, each as shown on the most recently prepared projected
balance sheet and prepared in accordance with GAAP consistently applied.
Section 1.02 Classification of Loans and Borrowings. For purposes of
this Agreement, Loans may be classified and referred to by
Class (e.g., a "U.S. Loan") or by Type (e.g., a "Eurodollar Loan") or by Class
and Type (e.g., a "U.S. Eurodollar Loan"). Borrowings
also may be classified and referred to by Class (e.g., a "U.S. Borrowing")
or by Type (e.g., a "Eurodollar Borrowing") or by Class
and Type (e.g., a "U.S. Eurodollar Borrowing").
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Section 1.03 Terms Generally. The definitions of terms herein shall apply
equally to the singular and plural forms of the terms defined. Whenever the
context may require, any pronoun shall include the corresponding masculine,
feminine and neuter forms. The words "include", "includes" and "including" shall
be deemed to be followed by the phrase "without limitation". The word "will"
shall be construed to have the same meaning and effect as the word "shall".
Unless the context requires otherwise (a) any definition of or reference to any
agreement, instrument or other document herein shall be construed as referring
to such agreement, instrument or other document as from time to time amended,
supplemented or otherwise modified (subject to any restrictions on such
amendments, supplements or modifications set forth herein), (b) any reference
herein to any Person shall be construed to include such Person's successors and
assigns, (c) the words "herein", "hereof" and "hereunder", and words of similar
import, shall be construed to refer to this Agreement in its entirety and not to
any particular provision hereof, (d) all references herein to Articles,
Sections, Exhibits and Schedules shall be construed to refer to Articles and
Sections of, and Exhibits and Schedules to, this Agreement, (e) the words
"asset" and "property" shall be construed to have the same meaning and effect
and to refer to any and all tangible and intangible assets and properties,
including cash, securities, accounts and contract rights, and (f) unless
otherwise stated herein, all provisions herein within the discretion or to the
satisfaction of a party shall be deemed to include a standard of reasonableness,
good faith and fair dealing.
Section 1.04 Accounting Terms; GAAP. Except as otherwise expressly provided
herein, all terms of an accounting or financial nature shall be construed in
accordance with GAAP, as in effect from time to time; provided that, if the
Company notifies the Administrative Agents that the Company requests an
amendment to any provision hereof to eliminate the effect of any change
occurring after the date hereof in GAAP or in the application thereof on the
operation of such provision (or if the Administrative Agents notify the Company
that the Required Lenders request an amendment to any provision hereof for such
purpose), regardless of whether any such notice is given before or after such
change in GAAP or in the application thereof, then such provision shall be
interpreted on the basis of GAAP as in effect and applied immediately before
such change shall have become effective until such notice shall have been
affirmatively withdrawn by the Company (or, in the case of a request for an
amendment under this Section by the Required Lenders, the Administrative Agents)
or such provision amended in accordance herewith.
Section 1.05 Currencies; Exchange Rates. If, at any time, any amount denominated
in Canadian Dollars is required pursuant to any Loan Document to be expressed in
U.S. Dollars, then such amount shall be expressed at the U.S. Dollar Equivalent
determined by the U.S. Administrative Agent based on the Exchange Rate then in
effect (as provided in Section 2.20(a)), unless the Exchange Rate is required to
be determined as of another date. If, at any time, any amount is required to be
expressed in Canadian Dollars, then such amount shall be expressed at the
Canadian Dollar Equivalent determined as of such date by the U.S. Administrative
Agent based on the Exchange Rate then in effect (as provided in Section
2.20(a)), unless the Exchange Rate is required to be determined as of another
date. Any such determinations by the U.S. Administrative Agent shall be
conclusive absent manifest error.
Section 1.06 Borrowing Base Adjustments. The Administrative Agents or the
Required Lenders may, in their commercially reasonable discretion (x) in
reviewing the collateral components of the Canadian Borrowing Base or the U.S.
Borrowing Base, (y) after completion of any evaluation or any appraisal
contemplated by Section 5.09(a) or Section 5.09(b) or (z) upon the occurrence
and during the continuation of a Default, from time to time (a) decrease the
advance rates for the U.S. Borrowing Base or the Canadian Borrowing Base (or
both), (b) establish and revise reserves reducing the amount of Eligible
Coinstar Receivables, Eligible Credit Card Accounts Receivable, Eligible Third
Party Insurance Provider Accounts Receivable, Eligible Inventory or Scripts and
(c) impose additional eligibility criteria to be applicable to Eligible Coinstar
Receivables, Eligible Credit Card Accounts Receivable, Eligible Third Party
Insurance Provider Accounts Receivable, Eligible Inventory or Scripts; provided
that any such adjustment described in clause (a), (b) or (c) above shall be made
only in the event that the Administrative Agents or the Required Lenders
reasonably determine (based upon an evaluation or appraisal referred to in
Section 5.09(a) or Section 5.09(b) or other objectively determinable facts or
circumstances) that the applicable U.S. Borrowing Base or Canadian Borrowing
Base, or component thereof, or its value as Collateral, is adversely affected by
one or more events, conditions, contingencies or risks that are not already
adequately reflected in the calculation of the U.S. Borrowing Base or Canadian
Borrowing Base (as applicable); provided further that no change will be made to
the borrowing base standards pursuant to this Section 1.06 if such change would
increase the U.S. Borrowing Base or the Canadian Borrowing Base in effect at any
time above the U.S. Borrowing Base or the Canadian Borrowing Base, respectively,
that would be in effect at such time if the U.S. Borrowing Base or the Canadian
Borrowing Base, respectively, were calculated using the standards in effect on
the date hereof or, if such standards have been amended pursuant to Section
9.02(b)(vi), using the standards as in effect on the date of such amendment. The
Administrative Agents will provide written notice to the Company of any
adjustments made pursuant to this Section 1.06 on the date of such adjustments.
Section 1.07 Amendment and Restatement.
(a) This Agreement is an amendment and restatement of the Existing Credit
Agreement. On and after the Effective Date of this Agreement, (i) each
reference in the other Loan Documents to the "Credit Agreement," "thereunder,"
"thereof," "therein" or any other expression of like import referring to the
Existing Credit Agreement shall mean and be a reference to this Agreement, and
(ii) all "Loans" (including each "Interest Period" of each outstanding
"Eurodollar Loan"), "Letters of Credit," interest, fees and other amounts
outstanding or accrued under the Existing Credit Agreement shall be deemed to
be Loans, Letters of Credit, interest, fees and other amounts outstanding or
accrued, respectively, under this Agreement.
(b) The "Collateral Documents" (as amended and restated) under the Existing
Credit Agreement and all of the "Collateral" described therein, other than
collateral comprised of real property and fixtures thereon sold pursuant to a
Contemplated Sale/Leaseback Transaction (which shall be released from any
Liens inuring to the benefit of the Lenders pursuant to Section 2.22), do and
shall continue to secure the payment of all of the Obligations. The amendment
and restatement of this Agreement and the other Loan Documents shall not
constitute a novation or termination of Loan Documents and all Obligations
thereunder are in all respects continuing with only the terms thereof being
modified as provided herein or in any other amended, restated, supplement or
otherwise modified Loan Document.
(c) The execution, delivery and effectiveness of this Agreement shall not
operate as a waiver of any right, power or remedy of the Agent or any Lender
under any of the Loan Documents or constitute a waiver of any provision of any
of the Loan Documents.
ARTICLE II
The Credits
Section 2.01 Commitments. (a) Subject to the terms and conditions set forth
herein, each U.S. Lender agrees to make U.S. Loans to the U.S. Borrowers from
time to time during the Availability Period with respect to such U.S. Lender in
an aggregate principal amount that will not result in (i) such Lender's U.S.
Exposure exceeding such Lender's U.S. Commitment, (ii) the total U.S. Exposure
exceeding the total U.S. Commitments, (iii) the sum of the total U.S. Exposure
and the total Canadian Exposure exceeding U.S.$400,000,000 or (iv) the total
U.S. Exposure exceeding the U.S. Borrowing Base then in effect minus the excess,
if any, of (A) the total Canadian Exposure minus (B) the Canadian Borrowing Base
then in effect.
(b) Subject to the terms and conditions set forth herein, each Canadian Lender
agrees from time to time during the Availability Period with respect to such
Canadian Lender to make Canadian Loans to the Canadian Borrower in an
aggregate principal amount that will not result in (i) such Lender's Canadian
Exposure exceeding such Lender's Canadian Commitment, (ii) the total Canadian
Exposure exceeding the total Canadian Commitments, (iii) the sum of the total
U.S. Exposure and the total Canadian Exposure exceeding U.S.$400,000,000 or
(iv) the total Canadian Exposure exceeding the Canadian Borrowing Base then in
effect plus the excess, if any, of (A) the total U.S. Borrowing Base then in
effect minus (B) the U.S. Exposure.
(c) Within the foregoing limits and subject to the terms and conditions set
forth herein, the Borrowers may borrow, prepay and reborrow Loans from each
Lender during the Availability Period with respect to such Lender.
Section 2.02 Loans and Borrowings. (a) Each Loan shall be made as part of a
Borrowing consisting of Loans of the same Class and Type made by the Lenders
ratably in accordance with their respective Commitments of the applicable Class.
The failure of any Lender to make any Loan required to be made by it shall not
relieve any other Lender of its obligations hereunder; provided that the
Commitments of the Lenders are several and no Lender shall be responsible for
any other Lender's failure to make Loans as required.
(b) Subject to Section 2.12, (i) each U.S. Borrowing shall be denominated in
U.S. Dollars and comprised entirely of ABR Loans or Eurodollar Loans as the
applicable U.S. Borrower may request in accordance herewith; and (ii) each
Canadian Borrowing shall be either (A) denominated in U.S. Dollars and
comprised entirely of ABR Loans or Eurodollar Loans as the Canadian Borrower
may request or (B) denominated in Canadian Dollars and comprised of Canadian
Prime Loans. Each Lender at its option may make any Eurodollar Loan by causing
any domestic or foreign branch or Affiliate of such Lender to make such Loan;
provided that any exercise of such option shall not affect the obligation of
the applicable Borrower to repay such Loan in accordance with the terms of
this Agreement and provided further, that the exercise of such option shall
not result in an increase in additional amounts payable by a Borrower pursuant
to Section 2.16 (other than as the result of the application of Section 2.21).
(c) At the commencement of each Interest Period for any Eurodollar Borrowing,
such Borrowing shall be in an aggregate principal amount that is an integral
multiple of U.S.$1,000,000 and not less than U.S.$3,000,000. At the time that
each Canadian Prime Borrowing is made, such Borrowing shall be an aggregate
principal amount that is an integral multiple of Cdn.$1,000,000 and not less
than Cdn.$3,000,000, and at the time that each ABR Borrowing is made, such
Borrowing shall be in an aggregate principal amount that is an integral
multiple of U.S.$1,000,000 and not less than U.S.$3,000,000; provided that an
ABR Borrowing or Canadian Prime Borrowing may be in an aggregate principal
amount that is equal to the entire unused balance of Commitments of the
applicable Class or that is required to finance the reimbursement of a U.S.
L/C Disbursement or Canadian L/C Disbursement as contemplated by Section
2.05(e). Borrowings of more than one Type and Class may be outstanding at the
same time; provided that there shall not at any time be more than a total of
ten (10) U.S. Eurodollar Borrowings, or more than a total of ten (10) Canadian
Eurodollar Borrowings, outstanding. For purposes of the foregoing, Loans
having different Interest Periods, regardless of whether they commence on the
same date, shall be deemed as made under separate Borrowings.
(d) Notwithstanding any other provision of this Agreement, a Borrower shall not
be entitled to request, or to elect to convert or continue, any Borrowing if
the Interest Period requested with respect thereto would end after the
Maturity Date.
Section 2.03 Requests for Borrowings. To request a Borrowing, a Borrower shall
notify the applicable Administrative Agent of such request by telephone (a) in
the case of a Eurodollar Borrowing, not later than 12:00 noon, New York City
time (or, in the case of a Canadian Borrowing, Toronto time), three Business
Days before the date of the proposed Borrowing, (b) in the case of an ABR
Borrowing, not later than 12:00 noon, New York City time (or, in the case of a
Canadian Borrowing, Toronto time), on the day of the proposed Borrowing or (c)
in the case of a Canadian Prime Borrowing, not later than 10:00 a.m., Toronto
time, on the day of the proposed Canadian Borrowing; provided that any such
notice of an ABR Borrowing or Canadian Prime Borrowing to finance the
reimbursement of an L/C Disbursement as contemplated by Section 2.05(e) may be
given not later than 10:00 a.m., New York City time (or, in the case of a
Canadian Prime Borrowing, Toronto time) on the date of the proposed Borrowing.
Each such telephonic Borrowing Request shall be irrevocable and shall be
confirmed promptly by hand delivery or telecopy to the applicable Administrative
Agent of a written Borrowing Request in a form approved by such Administrative
Agent and signed by the applicable Borrower. Each such telephonic and written
Borrowing Request shall specify the following information in compliance with
Section 2.02:
(i) the Borrower requesting such Borrowing (or on whose behalf the Company
or the Canadian Borrower is requesting such Borrowing);
(ii) whether the requested Borrowing is to be a U.S. Borrowing or Canadian
Borrowing;
(iii) the currency (in the case of a Canadian Borrowing) and aggregate amount
of such Borrowing;
(iv) the date of such Borrowing, which shall be a Business Day;
(v) in the case of a Borrowing denominated in U.S. Dollars, whether such
Borrowing is to be an ABR Borrowing or a Eurodollar Borrowing;
(vi) in the case of a Eurodollar Borrowing, the initial Interest Period to
be applicable thereto, which shall be a period contemplated by the
definition of the term "Interest Period"; and
(vii) the location and number of the applicable Borrower's account to which
funds are to be disbursed, which shall comply with the requirements of
Section 2.06.
If no election as to the Type of Borrowing is specified with respect to a
Borrowing in U.S. Dollars or Canadian Dollars, then the requested Borrowing
shall be an ABR Borrowing or a Canadian Prime Borrowing, respectively. If no
Interest Period is specified with respect to any requested Eurodollar Borrowing,
then the applicable Borrower shall be deemed to have selected an Interest Period
of one month's duration. Promptly following receipt of a Borrowing Request in
accordance with this Section, the applicable Administrative Agent shall advise
each of the applicable Lenders of the details thereof and of the amount of such
Lender's Loan to be made as part of the requested Borrowing.
Section 2.04 Acceptances. (a) Acceptance Commitment. Subject to the terms and
conditions hereof, each Canadian Lender severally agrees that the Canadian
Borrower may issue Acceptances denominated in Canadian Dollars, in minimum
denominations of Cdn.$100,000 or a whole multiple thereof and in minimum
aggregate amounts of Cdn.$5,000,000 or any greater whole multiple of
Cdn.$100,000, each in accordance with the provisions of this Section 2.04 from
time to time until the Maturity Date with respect to such Canadian Lender in an
aggregate face amount that will not result in (i) such Lender's Canadian
Exposure exceeding such Lender's Canadian Commitment, (ii) the total Canadian
Exposure exceeding the total Canadian Commitments, (iii) the sum of the total
U.S. Exposure and the total Canadian Exposure exceeding U.S.$400,000,000 or (iv)
the total Canadian Exposure exceeding the Canadian Borrowing Base then in effect
plus the excess, if any, of (A) the U.S. Borrowing Base then in effect minus (B)
the total U.S. Exposure; provided that at all times the outstanding aggregate
face amount of all Acceptances made by a Canadian Lender shall equal its
Applicable Percentage of the outstanding face amount of all Acceptances made by
all Canadian Lenders. For purposes of this Agreement, the full face value of an
Acceptance, without discount, shall be used when calculations are made to
determine the outstanding amount of a Canadian Lender's Acceptances; provided
that in computing the face amount of Acceptances outstanding, the face amount of
an Acceptance in respect of which the Acceptance Obligation has been prepaid by
the Canadian Borrower and received by the Canadian Lender that created the same
in accordance with the terms of this Agreement shall not be included.
(b) Terms of Acceptance. Each Draft shall be accepted by a Canadian Lender, upon
the written request of the Canadian Borrower given in accordance with
paragraph (c), by the completion and acceptance by such Canadian Lender of a
Draft (i) payable in Canadian Dollars, drawn by the Canadian Borrower on the
Canadian Lender in accordance with this Agreement, to the order of the
Canadian Lender and (ii) maturing prior to the Maturity Date with respect to
such Canadian Lender on a Canadian Business Day not less than 28 days nor more
than 180 days after the date of such Draft (and in integral maturities of one
month, two months, three months or six months, or, from time to time, such
other nonstandard periods as the Canadian Borrower and the affected Canadian
Lender(s) may agree), excluding days of grace, all as specified in the
relevant Notice of Drawing to be delivered under paragraph (c) of this
Section; provided that no Acceptance shall have a tenor in excess of the
period of time which is usual and reasonably necessary to finance transactions
of similar character.
(c) Notice of Drawing and Discount of Acceptances.
(i) With respect to each requested acceptance of Drafts, the Canadian Borrower
shall give the Canadian Administrative Agent a Notice of Drawing,
substantially in the form of Exhibit L (which shall be irrevocable and may be
by telephone confirmed in writing within one Canadian Business Day) to be
received prior to 12:00 noon, Toronto time, at least one Canadian Business Day
prior to the date of the requested acceptance, specifying:
(1) the date on which such Drafts are to be accepted;
(2) the aggregate face amount of such Drafts;
(3) the maturity date of such Acceptances;
(4) whether the Canadian Lenders must purchase or arrange for the purchase of
the Acceptances; and
(5) such additional information as the Canadian Administrative Agent or any
Canadian Lenders may reasonably from time to time request to be included in
such notices.
(ii) Upon receipt of a Notice of Drawing the Canadian Administrative Agent shall
promptly notify each Canadian Lender of the contents thereof and of such
Canadian Lender's ratable share of the Acceptances requested thereunder. The
aggregate face amount of the Drafts to be accepted by a Canadian Lender shall
be determined by the Canadian Administrative Agent by reference to the
respective Canadian Commitments of the Canadian Lenders; provided that, if the
face amount of an Acceptance which would otherwise be accepted by a Canadian
Lender is not Cdn.$100,000, or a whole multiple thereof, the face amount shall
be increased or reduced by the Canadian Administrative Agent, in its sole
discretion, to Cdn.$100,000, or the nearest integral multiple thereof, as
appropriate.
(iii) On each date upon which Acceptances are to be accepted, the Canadian
Administrative Agent shall advise the Canadian Borrower
of the applicable Discount Rate for each of the Lenders. Not later
than 11:00 a.m., Toronto time, on such date each Canadian
Lender shall, subject to the fulfillment of the applicable
conditions precedent specified in Section 4.02 and subject to
each Non-Acceptance Canadian Lender's making Acceptance Equivalent
Loans pursuant to paragraph (i) of this Section, (A) on
the basis of the information supplied by the Canadian Administrative
Agent, as aforesaid, complete a Draft or Drafts of the
Canadian Borrower by filling in the amount, date and maturity
date thereof in accordance with the applicable Notice of
Drawing, (B) duly accept such Draft or Drafts, (C) discount
such Acceptance or Acceptances, (D) give the Canadian
Administrative Agent telegraphic or telex notice of such Canadian
Lender's acceptance of such Draft or Drafts and confirming
the discount rate at which it discounted the Acceptance or
Acceptances and the amount paid to the Canadian Administrative
Agent for the account of the Canadian Borrower and (E) remit to
the Canadian Administrative Agent in Canadian Dollars in
immediately available funds an amount equal to the proceeds of such
discount less the Acceptance Fee. Upon receipt by the
Canadian Administrative Agent of such sums from the Canadian
Lenders, the Canadian Administrative Agent shall make the
aggregate amount thereof available to the Canadian Borrower.
(iv) Each extension of credit hereunder through the acceptance of Drafts shall
be made simultaneously and pro rata by the Canadian Lenders in accordance with
their respective Canadian Commitments.
(d) Sale of Acceptances. The Canadian Borrower shall have the right to sell any
Acceptance; provided that if so specified in the Notice of Drawing the
Canadian Lenders shall purchase or arrange for the purchase of all of the
Acceptances in the market and each Canadian Lender shall provide to the
Canadian Administrative Agent the discount proceeds for the account of the
Canadian Borrower. The Acceptance Fee in respect of such Acceptances may, at
the option of the Canadian Lender, be set off against the discount proceeds
payable by such Canadian Lender hereunder.
(e) Acceptance Obligation. The Canadian Borrower is obligated, and hereby
unconditionally agrees, to pay to each Canadian Lender the face amount of each
Acceptance created by such Lender in accordance with a Notice of Drawing
pursuant to paragraph (c) on the maturity date thereof, or on such earlier
date as may be required pursuant to provisions of this Agreement. With respect
to each Acceptance which is outstanding hereunder, the Canadian Borrower shall
notify the Canadian Administrative Agent prior to 12:00 noon one Canadian
Business Day prior to the maturity date of such Acceptance (which notice shall
be irrevocable) of the Canadian Borrower's intention to issue Acceptances on
such maturity date to provide for the payment of such maturing Acceptance and
shall deliver a Notice of Drawing to the Canadian Administrative Agent or that
the Canadian Borrower intends to repay the maturing Acceptances on the
maturity date. Any repayment of an Acceptance must be made at or before 2:00
p.m. (Toronto time) on the maturity date of such Acceptance. If the Canadian
Borrower fails to provide such notice to the Canadian Administrative Agent or
fails to repay the maturing Acceptances, or if a Default or an Event of
Default has occurred and is continuing on such maturity date, the Canadian
Borrower's obligations in respect of the maturing Acceptances shall be deemed
to have been converted on the maturity date thereof into a Canadian Prime Loan
in an amount equal to the face amount of the maturing Acceptances. The
Canadian Borrower waives presentment for payment and any other defense to
payment of any amounts due to a Canadian Lender in respect of any Acceptances
accepted by such Canadian Lender under this Agreement which might exist solely
by reason of those Acceptances being held, at the maturity thereof, by that
Canadian Lender in its own right and the Canadian Borrower agrees not to claim
any days of grace if that Canadian Lender, as holder, sues the Canadian
Borrower on those Acceptances for payment of the amounts payable by the
Canadian Borrower thereunder.
(f) Supply of Drafts and Power of Attorney. To enable the Canadian Lenders to
accept Drafts in the manner specified in this Section 2.04, the Canadian
Borrower shall supply to each Canadian Lender upon the execution of this
Agreement and thereafter from time to time forthwith upon request by such
Canadian Lender a sufficient number of blank Drafts conforming with the
requirements of this Agreement and duly executed on behalf of the Canadian
Borrower, which such Canadian Lender shall hold in safekeeping and the
Canadian Borrower hereby appoints each Canadian Lender as its attorney to sign
and endorse on its behalf, in handwriting or by facsimile or mechanical
signature as and when deemed necessary by such Canadian Lender, blank forms of
Acceptances. In this respect, it is each Canadian Lender's responsibility to
maintain an adequate supply of blank forms of Acceptances for acceptance under
this Agreement. The Canadian Borrower recognizes and agrees that all
Acceptances signed and/or endorsed on its behalf by a Canadian Lender shall
bind the Borrower as fully and effectually as if signed in the handwriting of
and duly issued by the proper signing officers of the Canadian Borrower. Each
Canadian Lender is hereby authorized to issue such Acceptances endorsed in
blank in such face amounts as may be determined by such Canadian Lender;
provided that the aggregate amount thereof is equal to the aggregate amount of
Acceptances required to be accepted by such Canadian Lender. Drafts drawn by
the Canadian Borrower to be accepted as Acceptances shall be signed by a duly
authorized officer or officers of the Canadian Borrower or by its
attorney-in-fact including any attorney-in-fact appointed pursuant to this
Section 2.04(f). The Canadian Borrower hereby authorizes and requests each
Canadian Lender in accordance with each Notice of Drawing received from the
Canadian Borrower pursuant to paragraph (c) to take the measures with respect
to a Draft or Drafts of the Canadian Borrower then in possession of such
Lender specified in paragraph (c)(iii) of this Section. In case any authorized
signatory of the Canadian Borrower whose signature shall appear on any Draft
shall cease to have such authority before the acceptance of a Draft with
respect to such Draft, the obligations of the Canadian Borrower hereunder and
under such Acceptance shall nevertheless be valid for all purposes as if such
authority had remained in force until such creation. The Canadian
Administrative Agent and each Canadian Lender shall be fully protected in
relying upon any instructions received from the Canadian Borrower (orally or
otherwise) without any duty to make inquiry as to the genuineness of such
instructions. The Canadian Administrative Agent and each Canadian Lender shall
be entitled to rely on instructions received from any person identifying
himself (orally or otherwise) as a duly authorized officer of the Canadian
Borrower and shall not be liable for any errors, omissions, delays or
interruptions in the transmission of such instructions.
(g) Exculpation. No Canadian Lender shall be responsible or liable for its
failure to accept a Draft if the cause of such failure is, in whole or in
part, due to the failure of the Canadian Borrower to provide the Drafts or the
power of attorney described in paragraph (f) above to such Canadian Lender on
a timely basis nor shall any Canadian Lender be liable for any damage, loss or
other claim arising by reason of any loss or improper use of any such Draft
except loss or improper use arising by reason of the negligence or willful
misconduct of such Canadian Lender.
(h) Rights of Canadian Lender as to Acceptances. Neither the Canadian
Administrative Agent nor any Canadian Lender shall have any responsibility as
to the application of the proceeds by the Canadian Borrower of any discount of
any Acceptances. For greater certainty, each Canadian Lender may, at any time,
purchase Acceptances issued by the Canadian Borrower and may at any time and
from time to time hold, sell, rediscount or otherwise dispose of any or all
Acceptances accepted and/or purchased by it.
(i) Acceptance Equivalent Loans. Whenever the Canadian Borrower delivers a
Notice of Drawing to the Canadian Administrative Agent under this Agreement
requesting the Canadian Lenders to accept Drafts, a Canadian Lender which
cannot accept Drafts (a "Non-Acceptance Canadian Lender") shall, in lieu of
accepting Drafts, make an Acceptance Equivalent Loan. On each date on which
Drafts are to be accepted, subject to the same terms and conditions applicable
to the acceptance of Drafts, any Non-Acceptance Canadian Lender that makes an
Acceptance Equivalent Loan, upon delivery by the Canadian Borrower of an
executed Discount Note payable to the order of such Non-Acceptance Canadian
Lender, will remit to the Canadian Administrative Agent in immediately
available funds for the account of the Canadian Borrower the Acceptance
equivalent discount proceeds in respect of the Discount Notes issued by the
Canadian Borrower to the Non-Acceptance Canadian Lender.
(j) Terms Applicable to Discount Notes. The term "Acceptance" when used in this
Agreement shall be construed to include Discount Notes and all terms of this
Agreement applicable to Acceptances shall apply equally to Discount Notes
evidencing Acceptance Equivalent Loans with such changes as may in the context
be necessary (except that no Discount Note may be sold, rediscounted or
otherwise disposed of by the Non-Acceptance Canadian Lender making Acceptance
Equivalent Loans). For greater certainty:
(i) a Discount Note shall mature and be due and payable on the same date as the
maturity date for Acceptances specified in the applicable Notice of Drawing;
(ii) an Acceptance Fee will be payable in respect of a Discount Note and shall
be calculated at the same rate and in the same manner as the Acceptance Fee in
respect of an Acceptance;
(iii) a discount applicable to a Discount Note shall be calculated in the same
manner and at the Discount Rate that would be applicable to Acceptances
accepted by a Schedule II or III Lender pursuant to the applicable Notice of
Drawing;
(iv) an Acceptance Equivalent Loan made by a Non-Acceptance Canadian Lender will
be considered to be part of a Non-Acceptance Canadian Lender's outstanding
Acceptances for all purposes of this Agreement; and
(v) the Canadian Borrower shall deliver Discount Notes to each Non-Acceptance
Canadian Lender and grants to each Non-Acceptance Canadian Lender a power of
attorney in respect of the completion and execution of Discount Notes, each in
accordance with Section 2.04(f).
(k) Prepayment of Acceptances and Discount Notes. No Acceptance or Discount Note
may be repaid or prepaid prior to the maturity date of such Acceptance or
Discount Note, except in accordance with the provisions of Article VII.
(l) Depository Bills and Notes Act. At the option of the Canadian Borrower and
any Canadian Lender, Acceptances and Discount Notes under this Agreement to be
accepted by such Lender may be issued in the form of depository bills and
depository notes, respectively, for deposit with The Canadian Depository for
Securities Limited pursuant to the Depository Bills and Notes Act (Canada).
All depository bills and depository notes so issued shall be governed by the
Depository Bills and Notes Act (Canada) and the provisions of this Section
2.04.
Section 2.05 Letters of Credit. (a) General. Subject to the terms and conditions
set forth herein, at any time and from time to time during the Availability
Period, a Borrower may request the issuance of a Letter of Credit for its own
account, in a form appropriately completed and reasonably acceptable to the U.S.
Administrative Agent (in the case of a U.S. Letter of Credit) or the Canadian
Administrative Agent (in the case of a Canadian Letter of Credit) and the
applicable Issuing Bank. In the event of any inconsistency between the terms and
conditions of this Agreement and the terms and conditions of any form of letter
of credit application or other agreement submitted by a Borrower to, or entered
into by a Borrower with, an Issuing Bank relating to any Letter of Credit, the
terms and conditions of this Agreement shall control. Each U.S. Letter of Credit
shall be denominated in U.S. Dollars, and each Canadian Letter of Credit shall
be denominated in U.S. Dollars or Canadian Dollars.
(b) Notice of Issuance, Amendment, Renewal, Extension; Certain Conditions. To
request the issuance of a Letter of Credit (or the amendment, renewal or
extension of an outstanding Letter of Credit), the applicable Borrower shall
hand deliver or telecopy (or transmit by electronic communication, if
arrangements for doing so have been approved by the applicable Issuing Bank)
to the applicable Issuing Bank and the applicable Administrative Agent
(reasonably in advance of the requested date of issuance, amendment, renewal
or extension) a notice requesting the issuance of a Letter of Credit, or
identifying the Letter of Credit to be amended, renewed or extended, and
specifying the date of issuance, amendment, renewal or extension (which shall
be a U.S. Business Day or, in the case of a Canadian Letter of Credit, a
Canadian Business Day), the date on which such Letter of Credit is to expire
(which shall comply with paragraph (c) of this Section), the amount of such
Letter of Credit, whether such Letter of Credit is to be denominated in U.S.
Dollars or Canadian Dollars (provided that each U.S. Letter of Credit must be
denominated in U.S. Dollars), the name and address of the beneficiary thereof
and such other information as shall be necessary to prepare, amend, renew or
extend such Letter of Credit. If requested by the applicable Issuing Bank, the
applicable Borrower also shall submit a letter of credit application on such
Issuing Bank's standard form in connection with any request for a Letter of
Credit. Following receipt of such notice and prior to the issuance of the
requested Letter of Credit or the applicable amendment, renewal or extension,
the U.S. Administrative Agent shall calculate (if the Letter of Credit is a
Canadian Letter of Credit denominated in Canadian Dollars) its U.S. Dollar
Equivalent and, after consulting with the other Administrative Agent, shall
notify the Borrowers and the Issuing Banks of the results of the tests
described below after giving effect to (i) the issuance, amendment, renewal or
extension of such Letter of Credit, (ii) the issuance or expiration of any
other Letter of Credit that is to be issued or will expire prior to the
requested date of issuance of such Letter of Credit and (iii) the borrowing or
repayment of any Loans that (based upon notices delivered to either
Administrative Agent by any Borrower) are to be borrowed or repaid prior to
the requested date of issuance of such Letter of Credit. A Letter of Credit
shall be issued, amended, renewed or extended only if (and upon issuance,
amendment, renewal or extension of each Letter of Credit, the Borrowers shall
be deemed to represent and warrant that) such issuance, amendment, renewal or
extension (i) in the case of a Canadian Letter of Credit, (1) the total
Canadian L/C Exposure shall not exceed U.S.$70,000,000, (2) the total Canadian
Exposure shall not exceed the total Canadian Commitments and (3) the total
Canadian Exposure shall not exceed the Canadian Borrowing Base then in effect
plus the excess, if any, of (x) the U.S. Borrowing Base then in effect minus
(y) the total U.S. Exposure, (ii) in the case of a U.S. Letter of Credit, (1)
the total U.S. L/C Exposure shall not exceed U.S.$300,000,000, (2) the total
U.S. Exposure shall not exceed the total U.S. Commitments and (3) the total
U.S. Exposure shall not exceed the U.S. Borrowing Base then in effect minus
the excess, if any, of (x) the total Canadian Exposure minus (y) the Canadian
Borrowing Base then in effect and (iii) in the case of each Letter of Credit,
the sum of the total U.S. Exposure and the total Canadian Exposure therefor
shall not exceed U.S.$300,000,000.
(c) Expiration Date; Existing Letters of Credit. Each Letter of Credit shall
expire at or prior to the close of business on the earlier of (i) the date one
year after the date of the issuance of such Letter of Credit (or, in the case
of any renewal or extension thereof, one year after such renewal or extension)
and (ii) the date that is five U.S. Business Days (or, in the case of a
Canadian Letter of Credit, five Canadian Business Days) prior to the Maturity
Date. All Existing Canadian Letters of Credit and Existing U.S. Letters of
Credit shall be deemed a Letter of Credit issued pursuant to the terms and
conditions of this Agreement to the extent that the Issuing Bank therefor has
become a party to this Agreement. Each Issuing Bank and Borrower shall amend,
supplement or otherwise modify each such Letter of Credit to the extent any of
the terms or conditions thereof are inconsistent with the terms and conditions
of this Agreement.
(d) Participations. By the issuance of a Letter of Credit (or an amendment to a
Letter of Credit increasing the amount thereof) and without any further action
on the part of the applicable Issuing Bank or the Lenders, the applicable
Issuing Bank hereby grants to each U.S. Lender (in the case of a U.S. Letter
of Credit) or Canadian Lender (in the case of a Canadian Letter of Credit),
and each such Lender hereby acquires from such Issuing Bank, a participation
in such Letter of Credit equal to such Lender's Applicable Percentage of the
aggregate amount available to be drawn under such Letter of Credit. In
consideration and in furtherance of the foregoing, each such Lender hereby
absolutely and unconditionally agrees to pay to the applicable Administrative
Agent, for the account of such Issuing Bank, such Lender's Applicable
Percentage of each L/C Disbursement made by such Issuing Bank and not
reimbursed by the relevant Borrower on the date due as provided in paragraph
(e) of this Section, or of any reimbursement payment required to be refunded
to such Borrower for any reason, in the same currency in which such L/C
Disbursement is denominated. Each Lender acknowledges and agrees that its
obligation to acquire participations pursuant to this paragraph in respect of
Letters of Credit is absolute and unconditional and shall not be affected by
any circumstance whatsoever, including any amendment, renewal or extension of
any Letter of Credit or the occurrence and continuance of a Default or
reduction or termination of the Commitments, and that each such payment shall
be made without any offset, abatement, withholding or reduction whatsoever.
(e) Reimbursement. If the Issuing Bank in respect of a Letter of Credit shall
make any L/C Disbursement in respect of such Letter of Credit, the relevant
Borrower shall reimburse such L/C Disbursement by paying to the applicable
Administrative Agent an amount equal to such L/C Disbursement, in the same
currency in which such L/C Disbursement is denominated, not later than 12:00
noon, New York City time (or, in the case of a Canadian Letter of Credit,
Toronto time), on the date that such L/C Disbursement is made, if the Borrower
shall have received notice of such L/C Disbursement prior to 10:00 a.m., New
York City time (or, in the case of a Canadian Letter of Credit, Toronto time),
on such date, or, if such notice has not been received by such Borrower prior
to such time on such date, then not later than 12:00 noon, New York City time
(or, in the case of a Canadian Letter of Credit, Toronto time), on (i) the
Business Day that such Borrower receives such notice, if such notice is
received prior to 10:00 a.m., New York City time (or, in the case of a
Canadian Letter of Credit, Toronto time), on the day of receipt, or (ii) the
Business Day immediately following the day that the Borrower receives such
notice, if such notice is not received prior to such time on the day of
receipt; provided that, if such L/C Disbursement is not less than
U.S.$1,000,000, the relevant Borrower may, subject to the conditions to
borrowing set forth herein, request in accordance with Section 2.03 that such
payment be financed with an ABR Borrowing (or, in the case of an L/C
Disbursement denominated in Canadian Dollars, a Borrowing of Canadian Prime
Loans) in an equivalent amount and, to the extent so financed, such Borrower's
obligation to make such payment shall be discharged and replaced by the
resulting ABR Loan or Canadian Prime Loan, as applicable. If a Borrower fails
to make such payment when due, the applicable Administrative Agent shall
notify each applicable Lender of the applicable L/C Disbursement, the payment
then due from such Borrower in respect thereof and such Lender's Applicable
Percentage thereof. Promptly following receipt of such notice, each such
Lender shall pay to such Administrative Agent its Applicable Percentage of the
payment then due from such Borrower, in the same manner as provided in Section
2.06 with respect to Loans made by such Lender (and Section 2.06 shall apply,
mutatis mutandis, to the payment obligations of such Lenders), and such
Administrative Agent shall promptly pay to the applicable Issuing Bank the
amounts so received by it from such Lenders. Promptly following receipt by the
applicable Administrative Agent of any payment from the relevant Borrower
pursuant to this paragraph, such Administrative Agent shall distribute such
payment to the applicable Issuing Bank or, to the extent that Lenders have
made payments pursuant to this paragraph to reimburse the applicable Issuing
Bank, then to such Lenders and such Issuing Bank as their interests may
appear. Any payment made by a Lender pursuant to this paragraph to reimburse
the applicable Issuing Bank for any L/C Disbursement (other than the funding
of ABR Loans or Canadian Prime Loans as contemplated above) shall not
constitute a Loan and shall not relieve the relevant Borrower of its
obligation to reimburse such L/C Disbursement.
(f) Obligations Absolute. Each Borrower's obligation to reimburse L/C
Disbursements as provided in paragraph (e) of this Section shall be absolute,
unconditional and irrevocable, and shall be performed strictly in accordance
with the terms of this Agreement under any and all circumstances whatsoever
and irrespective of (i) any lack of validity or enforceability of any Letter
of Credit or any Loan Document, or any term or provision therein, (ii) any
draft or other document presented under a Letter of Credit proving to be
forged, fraudulent or invalid in any respect or any statement therein being
untrue or inaccurate in any respect, (iii) payment by the applicable Issuing
Bank under a Letter of Credit against presentation of a draft or other
document that does not comply with the terms of such Letter of Credit, or (iv)
any other event or circumstance whatsoever, whether or not similar to any of
the foregoing, that might, but for the provisions of this Section, constitute
a legal or equitable discharge of, or provide a right of setoff against, such
Borrower's obligations hereunder. Neither the Administrative Agents, the
Lenders nor the Issuing Banks, nor any of their Related Parties, shall have
any liability or responsibility by reason of or in connection with the
issuance or transfer of any Letter of Credit or any payment or failure to make
any payment thereunder (irrespective of any of the circumstances referred to
in the preceding sentence), or any error, omission, interruption, loss or
delay in transmission or delivery of any draft, notice or other communication
under or relating to any Letter of Credit (including any document required to
make a drawing thereunder), any error in interpretation of technical terms or
any consequence arising from causes beyond the control of the Issuing Banks;
provided that the foregoing shall not be construed to excuse an Issuing Bank
from liability to a Borrower to the extent of any direct damages (as opposed
to consequential damages, claims in respect of which are hereby waived by each
of the Borrowers to the extent permitted by applicable law) suffered by such
Borrower that are caused by such Issuing Bank's failure to exercise care when
determining whether drafts and other documents presented under a Letter of
Credit comply with the terms thereof. The parties hereto expressly agree that,
in the absence of gross negligence or willful misconduct on the part of an
Issuing Bank (as finally determined by a court of competent jurisdiction),
each of the Issuing Banks shall be deemed to have exercised care in each such
determination. In furtherance of the foregoing and without limiting the
generality thereof, the parties agree that, with respect to documents
presented which appear on their face to be in substantial compliance with the
terms of a Letter of Credit, an Issuing Bank may, in its sole discretion,
either accept and make payment upon such documents without responsibility for
further investigation, regardless of any notice or information to the
contrary, or refuse to accept and make payment upon such documents if such
documents are not in strict compliance with the terms of such Letter of
Credit.
(g) Disbursement Procedures. An Issuing Bank shall, promptly following its
receipt thereof, examine all documents purporting to represent a demand for
payment under a Letter of Credit. Such Issuing Bank shall promptly notify the
applicable Administrative Agent and the relevant Borrower by telephone
(confirmed by telecopy) of such demand for payment and whether such Issuing
Bank has made or will make an L/C Disbursement thereunder; provided that any
failure to give or delay in giving such notice shall not relieve such Borrower
of its obligation to reimburse the applicable Issuing Bank and Lenders with
respect to any such L/C Disbursement.
(h) Interim Interest. If the Issuing Bank in respect of a Letter of Credit shall
make any L/C Disbursement under such Letter of Credit, then, unless the
relevant Borrower shall reimburse such L/C Disbursement in full on the date
such L/C Disbursement is made, the unpaid amount thereof shall bear interest,
for each day from and including the date such L/C Disbursement is made to but
excluding the date that such Borrower reimburses such L/C Disbursement, at the
rate per annum then applicable to ABR Loans or, if such amount is denominated
in Canadian Dollars, a Canadian Prime Loan; provided that, if such Borrower
fails to reimburse such L/C Disbursement when due pursuant to paragraph (e) of
this Section, then Section 2.12(d) shall apply. Interest accrued pursuant to
this paragraph shall be for the account of the applicable Issuing Bank, except
that interest accrued on and after the date of payment by any Lender pursuant
to paragraph (e) of this Section to reimburse the applicable Issuing Bank
shall be for the account of such Lender to the extent of such payment.
(i) Replacement of the Issuing Bank. An Issuing Bank may be replaced at any time
by written agreement among the Company, the Administrative Agents, the
replaced Issuing Bank and the successor Issuing Bank. The Administrative
Agents shall notify the Lenders of any such replacement of an Issuing Bank. At
the time any such replacement shall become effective, the Borrowers shall pay
all unpaid fees accrued for the account of the replaced Issuing Bank pursuant
to Section 2.11(b). From and after the effective date of any such replacement,
(i) such successor Issuing Bank shall have all the rights and obligations of
an Issuing Bank under this Agreement with respect to Letters of Credit to be
issued thereafter and (ii) references herein to the term "Canadian Issuing
Bank" (if the retiring Issuing Bank is a Canadian Issuing Bank) or "U.S.
Issuing Bank" (if the retiring Issuing Bank is a U.S. Issuing Bank) and the
term "Issuing Bank" shall be deemed to refer to such successor or to any
previous Issuing Bank, or to such successor and all previous Issuing Banks, as
the context shall require. After the replacement of an Issuing Bank hereunder,
the replaced Issuing Bank shall remain a party hereto and shall continue to
have all the rights and obligations of an Issuing Bank under this Agreement
with respect to Letters of Credit issued by it prior to such replacement, but
shall not be required to issue additional Letters of Credit.
(j) Cash Collateralization. If any Event of Default shall occur and be
continuing, on the Business Day that the Company receives notice from either
Administrative Agent or the Required Lenders demanding the deposit of cash
collateral pursuant to this paragraph, the U.S. Borrowers shall deposit in an
account with the U.S. Administrative Agent an amount in cash, and the Canadian
Borrower shall deposit in an account or accounts with the Canadian
Administrative Agent an amount or amounts in cash (denominated in U.S. Dollars
or Canadian Dollars or both, to match the currency denominations of the
outstanding Canadian Letters of Credit and Acceptances), in each case for the
benefit of the applicable Lenders, equal to the total U.S. L/C Exposure, the
total Canadian L/C Exposure and Acceptance Exposure, respectively, as of such
date plus any accrued and unpaid interest thereon; provided that the
obligation to deposit such cash collateral shall become effective immediately,
and such deposit shall become immediately due and payable, without demand or
other notice of any kind, upon the occurrence of any Event of Default with
respect to any Borrower described in clause (h) or (i) of Article VII. The
Borrowers also shall deposit cash collateral pursuant to this paragraph as and
to the extent required by Sections 2.10(b), 2.20(d) and 2.21(a)(1). Any such
cash collateral so deposited pursuant to Section 2.10(b) and held by the
Administrative Agents hereunder shall constitute part of the Borrowing Base on
a dollar for dollar basis for purposes of determining compliance with Section
2.10(b). Each such deposit shall be held by the U.S. Administrative Agent or
the Canadian Administrative Agent, as applicable, as collateral for the
payment and performance of the obligations of the relevant Borrowers under
this Agreement. Such Administrative Agent shall have exclusive dominion and
control, including the exclusive right of withdrawal, over such accounts.
Other than any interest earned on the investment of such deposits, which
investments shall be made at the option and sole discretion of the applicable
Administrative Agent and at the Borrowers' risk and expense, such deposits
shall not bear interest. Interest or profits, if any, on such investments
shall accumulate in such accounts. Moneys in such accounts shall be (i)
applied by the applicable Administrative Agent to reimburse the relevant
Issuing Bank for L/C Disbursements for which it has not been reimbursed and
(ii), to the extent not so applied, held for the satisfaction of the
reimbursement obligations of the relevant Borrower for its L/C Exposure at
such time, (iii) held for the satisfaction of outstanding Acceptance
Obligations or (iv), if the maturity of the Loans has been accelerated, be
applied to satisfy other obligations of such Borrower under this Agreement. If
a Borrower is required to provide an amount of cash collateral hereunder as a
result of the occurrence of an Event of Default, such amount (to the extent
not applied as aforesaid) shall be returned to such Borrower within three
Business Days after all Events of Default have been cured or waived. If the
U.S. Borrowers are required to provide cash collateral other than as a result
of an occurrence of an Event of Default hereunder, such amount (to the extent
not applied as aforesaid) shall be promptly returned to the extent that, and
following such time as, after giving effect to such return: (i) the total U.S.
Exposure does not exceed the total U.S. Commitments, (ii) the sum of the total
U.S. Exposure and the total Canadian Exposure does not exceed U.S.$400,000,000
and (iii) the total U.S. Exposure does not exceed the U.S. Borrowing Base then
in effect minus the excess, if any, of (A) the total Canadian Exposure minus
(B) the Canadian Borrowing Base then in effect. If the Canadian Borrower is
required to provide an amount of cash collateral other than as a result of an
occurrence of an Event of Default hereunder, such amount (to the extent not
applied as aforesaid) shall be promptly returned to the extent that, and
following such time as, after giving effect to such return: (i) the total
Canadian Exposure does not exceed the total Canadian Commitments, (ii) the sum
of the total U.S. Exposure and the total Canadian Exposure does not exceed
U.S.$400,000,000 or (iii) the total Canadian Exposure does not exceed the
Canadian Borrowing Base then in effect plus the excess, if any, of (A) the
U.S. Borrowing Base then in effect minus (B) the total U.S. Exposure.
Section 2.06 Funding of Borrowings. (a) Each U.S. Lender shall make each U.S.
Loan to be made by it hereunder on the proposed date thereof by wire transfer of
immediately available funds by 2:00 p.m., New York City time, to the account of
the U.S. Administrative Agent most recently designated by it for such purpose by
notice to the U.S. Lenders. Each Canadian Lender shall make each Canadian Loan
to be made by it hereunder on the proposed date thereof by wire transfer of
immediately available funds by 12:00 noon, Toronto time, to the account of the
Canadian Administrative Agent most recently designated by it for such purpose by
notice to the Canadian Lenders. The applicable Administrative Agent will make
each such Loan available to the relevant Borrower by promptly crediting the
amounts so received, in like funds, to an account of such Borrower maintained
with such Administrative Agent in New York City or Toronto, as applicable, and
designated by such Borrower in the applicable Borrowing Request; provided that
any ABR Loans or Canadian Prime Loans made to finance the reimbursement of an
L/C Disbursement as provided in Section 2.05(e) shall be remitted by the
applicable Administrative Agent to the relevant Issuing Bank.
(b) Unless the applicable Administrative Agent shall have received notice from a
Lender prior to the proposed date of any Loan to be made by such Lender on the
occasion of any Borrowing that such Lender will not make available to such
Administrative Agent such Lender's share of such Borrowing, such
Administrative Agent may assume that such Lender has made such share available
on such date in accordance with paragraph (a) of this Section and may, in
reliance upon such assumption, make available to the relevant Borrower a
corresponding amount. In such event, if a Lender has not in fact made its
share of the applicable Borrowing available to the applicable Administrative
Agent, then such Lender and the relevant Borrower severally agree to pay to
such Administrative Agent forthwith on demand such corresponding amount with
interest thereon, for each day from and including the date such amount is made
available to such Borrower to but excluding the date of payment to such
Administrative Agent, at (i) in the case of any U.S. Lender, the greater of
the Federal Funds Effective Rate and a rate determined by the U.S.
Administrative Agent in accordance with banking industry rules on interbank
compensation or, in the case of amounts payable to the Canadian Administrative
Agent in U.S. Dollars or Canadian Dollars, the rate determined by the Canadian
Administrative Agent (such determination to be conclusive and binding on such
Lender) in accordance with the Canadian Administrative Agent's cost of funding
the amount of such payment or (ii) in the case of such Borrower, the interest
rate applicable to ABR Loans (or, in the case of amounts payable in Canadian
Dollars, the interest rate applicable to Canadian Prime Loans). If such Lender
pays such amount to the applicable Administrative Agent, then such amount
shall constitute such Lender's Loan included in such Borrowing.
Section 2.07 Interest Elections. (a) Each Borrowing initially shall be of the
Type specified in the applicable Borrowing Request and, in the case of a
Eurodollar Borrowing, shall have an initial Interest Period as specified in such
Borrowing Request. Thereafter, except for Canadian Prime Loans, the applicable
Borrower may elect to convert such Borrowing to a different Type or to continue
such Borrowing and, in the case of a Eurodollar Borrowing, may elect Interest
Periods therefor, all as provided in this Section. Such Borrower may elect
different options with respect to different portions of the affected Borrowing,
in which case each such portion shall be allocated ratably among the Lenders
holding the Loans comprising such Borrowing, and the Loans comprising each such
portion shall be considered a separate Borrowing.
(b) To make an election pursuant to this Section, the applicable Borrower
shall notify the applicable Administrative Agent of such election by
telephone by the time that a Borrowing Request would be required under
Section 2.03 if such Borrower were requesting a Borrowing of the Class
and Type resulting from such election to be made on the effective date
of such election. Each such telephonic Interest Election Request shall
be irrevocable and shall be confirmed promptly by hand delivery or
telecopy to the applicable Administrative Agent of a written Interest
Election Request in a form approved by such Administrative Agent and
signed by such Borrower.
(c) Each telephonic and written Interest Election Request shall specify the
following information in compliance with Section 2.02:
(i) the Borrowing to which such Interest Election Request applies and, if
different options are being elected with respect to different portions
thereof, the portions thereof to be allocated to each resulting
Borrowing (in which case the information to be specified pursuant to
clauses (iii) and (iv) below shall be specified for each resulting
Borrowing);
(ii) the effective date of the election made pursuant to such Interest
Election Request, which shall be a Business Day;
(iii) whether the resulting Borrowing is to be an ABR Borrowing or a
Eurodollar Borrowing; and
(iv) if the resulting Borrowing is a Eurodollar Borrowing, the Interest
Period to be applicable thereto after giving effect to such election,
which shall be a period contemplated by the definition of the term
"Interest Period".
If any such Interest Election Request requests a Eurodollar Borrowing but does
not specify an Interest Period, then the applicable Borrower shall be deemed to
have selected an Interest Period of one month's duration.
(d) Promptly following receipt of an Interest Election Request, the applicable
Administrative Agent shall advise each affected Lender of the details thereof
and of such Lender's portion of each resulting Borrowing.
(e) If a Borrower fails to deliver a timely Interest Election Request with
respect to a Eurodollar Borrowing prior to the end of the Interest Period
applicable thereto, then, unless such Borrowing is repaid as provided herein,
at the end of such Interest Period such Borrowing shall be converted to an ABR
Borrowing. Notwithstanding any contrary provision hereof, if an Event of
Default has occurred and is continuing and an Administrative Agent, at the
request of the Required Lenders, so notifies the Company, then, so long as an
Event of Default is continuing (i) no outstanding Borrowing may be converted
to or continued as a Eurodollar Borrowing and (ii) unless repaid, each
Eurodollar Borrowing shall be converted to an ABR Borrowing at the end of the
Interest Period applicable thereto.
(f) This Section shall not be construed to apply to any Borrowing denominated in
Canadian Dollars, which must remain a Canadian Prime Borrowing. This Section
also shall not be construed to permit any conversion of the currency in which
a Borrowing is denominated.
Section 2.08 Termination, Reduction or Reallocation of Commitments. (a) Unless
previously terminated, the Commitment of each Lender shall terminate on the
Maturity Date with respect to such Commitment.
(b) The Company may at any time terminate, or from time to time reduce, the U.S.
Commitments; provided that (i) the Company shall not terminate or reduce the
U.S. Commitments if, after giving effect to any concurrent prepayment of U.S.
Loans in accordance with Section 2.10, the total U.S. Exposure would exceed
the total U.S. Commitments, (ii) the Company shall not terminate or reduce the
U.S. Commitments unless the Canadian Borrower concurrently terminates, or
ratably reduces, as the case may be, the Canadian Commitments in accordance
with paragraph (c) below and (iii) each partial reduction of the U.S.
Commitments shall be in an integral multiple of U.S.$1,000,000 and in a
minimum aggregate principal amount of U.S.$5,000,000.
(c) The Canadian Borrower may at any time terminate, or from time to time
reduce, the Canadian Commitments; provided that (i) the Canadian Borrower
shall not terminate or reduce the Canadian Commitments if, after giving effect
to any concurrent prepayment of the Canadian Loans in accordance with Section
2.10, the total Canadian Exposure would exceed the total Canadian Commitments,
(ii) the Canadian Borrower shall not terminate or reduce the Canadian
Commitments unless the Company concurrently terminates, or ratably reduces, as
the case may be, the U.S. Commitments in accordance with paragraph (b) above
and (iii) each partial reduction of the Canadian Commitments shall be in an
integral multiple of U.S.$1,000,000 and in an aggregate minimum principal
amount of U.S.$5,000,000.
(d) Subject to the satisfaction of the conditions set forth in paragraph (e)
below, the Company, upon at least thirty (30) days prior written notice to the
Administrative Agents, may reallocate all or a portion of a Lender's
Commitment once at any time during each fiscal quarter of the Company in
accordance with the following procedures; provided that no such reallocation
shall be permitted that would have the effect, together with any previous
reallocations hereunder, of increasing or decreasing the total U.S.
Commitments to an amount that is more than U.S.$25,000,000 above or below, as
the case may be, the amount thereof that would have been in effect at the time
if no such reallocations had been made hereunder. In the case of any such
reallocation, the total U.S. Commitments (in the case of a reallocation of a
U.S. Commitment) or the total Canadian Commitments (in the case of a
reallocation of a Canadian Commitment), as the case may be, shall be reduced
by the amount of the reallocated Commitment (the "Reallocated Commitment") and
the total Canadian Commitments (if the Reallocated Commitment was a U.S.
Commitment) or the total U.S. Commitments (if the Reallocated Commitment was a
Canadian Commitment) shall be increased by an amount equal to the Reallocated
Commitment. Any such reallocation shall be subject to execution of
documentation with respect thereto by the Borrowers, the Administrative
Agents, the Lender whose Commitment is reduced pursuant to such reallocation
(the "Reduced Lender") and the Lender that will assume the increased
Commitment resulting from such reallocation, which may be the Reduced Lender
or an affiliate thereof (the "Increased Lender"). The Administrative Agents
shall notify the Lenders of any such reallocation. Any such reallocation shall
not require any consent or approval of any Lender other than the Reduced
Lender and the Increased Lender, but the amounts of the respective Commitments
of such other Lenders shall not be changed by any such reallocation. In the
event of any such reallocation (i) the credit facility comprised of the
Reallocated Commitment, the other Commitments of the same Class and the Loans
and other extensions of credit hereunder in respect of such Commitments is
referred to herein as the "Reduced Facility", and (ii) the credit facility
comprised of the Commitment of the Increased Lender, the other Commitments of
the same Class and the Loans and other extensions of credit hereunder in
respect of such Commitments is referred to herein as the "Increased Facility".
Notwithstanding the foregoing, the aggregate amount of the Canadian
Commitments shall be U.S.$25,000,000 or more at all times.
(e) The consummation of any reallocation pursuant to paragraph (d) above shall
be subject to satisfaction of the following conditions on the date of such
consummation:
(i) the conditions to borrowing set forth in Section 4.02 shall be satisfied at
the time;
(ii) each of the Administrative Agents, each Issuing Bank, the Reduced Lender
and the Increased Lender shall have consented in writing to such reallocation;
(iii) the Borrowers in respect of the Reduced Facility will prepay outstanding
U.S. Loans or Canadian Loans, as applicable, in such amounts as shall be
necessary in order that, after giving effect to the reallocation of
Commitments and to such prepayments, the aggregate outstanding principal
amount of such U.S. Loans or Canadian Loans are held by the Lenders ratably in
accordance with their Commitments in respect of the Reduced Facility;
(iv) the participations in Letters of Credit, and the Canadian L/C Exposure and
the U.S. L/C Exposure represented thereby, shall be adjusted so that, after
giving effect to the reallocation of Commitments, the Canadian L/C Exposure of
each Canadian Lender shall equal its Applicable Percentage of the total
Canadian L/C Exposure at the time and the U.S. L/C Exposure of each U.S.
Lender shall equal its Applicable Percentage of the total U.S. L/C Exposure at
the time; and, if there are any unreimbursed L/C Disbursements at the time,
the applicable Borrower or Borrowers shall pay the same in full together with
accrued interest, if any, thereon; and
(v) such reallocation shall not result in the prepayment of any Acceptance
Obligation and, after giving effect to such reallocation and the satisfaction of
the conditions specified above, (A) the total U.S. Exposure shall not exceed the
total U.S. Commitments, (B) the total Canadian Exposure shall not exceed the
total Canadian Commitments, (C) the total Canadian Commitments shall be
U.S.$25,000,000 or more; (D) the sum of the total U.S. Exposure plus the total
Canadian Exposure shall not exceed U.S.$400,000,000, (E) the outstanding
principal amount of all U.S. Loans of each U.S. Lender shall equal its
Applicable Percentage of the outstanding aggregate principal amount of all U.S.
Loans of all U.S. Lenders, (F) the outstanding principal amount of all Canadian
Loans of each Canadian Lender shall equal its Applicable Percentage of the
outstanding aggregate principal amount of all Canadian Loans of all Canadian
Lenders; (G) the outstanding principal amount of all Acceptances of each
Canadian Lender shall equal its Applicable Percentage of the outstanding
aggregate principal amount of all Acceptances of all Canadian Lenders; (H) the
total U.S. Exposure shall not exceed the U.S. Borrowing Base then in effect
minus the excess, if any, of (x) the total Canadian Exposure minus (y) the
Canadian Borrowing Base then in effect and (I) the total Canadian Exposure shall
not exceed the Canadian Borrowing Base then in effect plus the excess, if any,
of (x) the total U.S. Borrowing Base minus (y) the total U.S. Exposure then in
effect.
(f) The Company or the Canadian Borrower, as applicable, shall notify the
applicable Administrative Agent of any election to terminate or reduce the
Commitments under paragraph (b) or (c) of this Section at least three Business
Days prior to the effective date of such termination or reduction, specifying
such election and the effective date thereof. Promptly following receipt of
any notice, such Administrative Agent shall advise the affected Lenders of the
contents thereof. Each notice delivered by the Company or the Canadian
Borrower pursuant to this Section shall be irrevocable; provided that a notice
of termination of the Commitments may state that such notice is conditioned
upon the effectiveness of other credit facilities, in which case such notice
may be revoked by the Company (by notice to the Administrative Agents on or
prior to the specified effective date) if such condition is not satisfied. Any
termination or reduction of the Commitments of either Class shall be
permanent. Each reduction of the Commitments of either Class shall be made
ratably among the applicable Lenders in accordance with their respective
Commitments of such Class.
Section 2.09 Repayment of Loans; Evidence of Debt. (a) Each Borrower hereby
unconditionally promises to pay to the applicable Administrative Agent for the
account of each Lender the then unpaid principal amount of each Loan made to
such Borrower and held by such Lender on the Maturity Date applicable to such
Loan.
(b) Each Lender shall maintain in accordance with its usual practice an account
or accounts evidencing the indebtedness of each Borrower to such Lender
resulting from each Loan made by such Lender, including the amounts of
principal and interest payable and paid to such Lender from time to time under
this Agreement.
(c) Each of the Administrative Agents shall maintain accounts in which it shall
record (i) the amount of each U.S. Loan (in the case of the U.S.
Administrative Agent) and Canadian Loan (in the case of the Canadian
Administrative Agent) made hereunder, the Type thereof and the Interest Period
applicable thereto, (ii) the amount of any principal or interest due and
payable or to become due and payable from each Borrower to each relevant
Lender hereunder and (iii) the amount of any sum received by such
Administrative Agent hereunder for the account of the respective Lenders and
each respective Lender's share thereof.
(d) The entries made in the accounts maintained pursuant to paragraph (b) or (c)
of this Section shall be prima facie evidence of the existence and amounts of
the obligations recorded therein; provided that the failure of any Lender or
either Administrative Agent to maintain such accounts or any error therein
shall not in any manner affect the obligation of any Borrower to repay its
Loans in accordance with the terms of this Agreement.
(e) Any Lender may request that Loans made by it to any Borrower or Borrowers be
evidenced by a promissory note. In such event, each of the applicable
Borrowers shall prepare, execute and deliver to such Lender a promissory note
payable to the order of such Lender (or, if requested by such Lender, to such
Lender and its registered assigns) and in a form approved by the applicable
Administrative Agent. Thereafter, the Loans evidenced by such promissory note
and interest thereon shall at all times (including after assignment pursuant
to Section 9.04) be represented by one or more promissory notes in such form
payable to the order of the payee named therein (or, if such promissory note
is a registered note, to such payee and its registered assigns).
Section 2.10 Prepayment of Loans. (a) Subject to the requirements of this
Section and the payment of any amounts required under Section 2.15 (i) each U.S.
Borrower shall promptly prepay any U.S. Borrowing (or deposit such amounts) as
may be required by this Agreement and the Canadian Borrower will promptly prepay
any Canadian Borrowing (or deposit such amounts) as may be required by this
Agreement), in each case together with any and all amounts required under
Section 2.15 and (ii) each U.S. Borrower shall have the right at any time and
from time to time to prepay, in whole or in part, any U.S. Borrowing, and the
Canadian Borrower shall have the right at any time and from time to time to
prepay, in whole or in part, any Canadian Borrowing. Any optional partial
prepayment of U.S. Borrowings shall be in an integral multiple of U.S.$1,000,000
and in a minimum aggregate principal amount of U.S.$5,000,000. Any optional
partial prepayment of Canadian Borrowings shall be in an integral multiple of
Cdn.$1,000,000 or U.S.$1,000,000 and in a minimum aggregate principal amount of
Cdn.$5,000,000 or U.S.$5,000,000.
(b) In the event and on such occasion that the total U.S. Exposure exceeds (w)
the U.S. Borrowing Base then in effect minus (x) the excess, if any, of (A)
the total Canadian Exposure minus (B) the Canadian Borrowing Base then in
effect, each of the U.S. Borrowers shall promptly prepay its Borrowings (or,
if no such Borrowings are outstanding, deposit cash collateral in an account
with the U.S. Administrative Agent pursuant to Section 2.05(j)) in an
aggregate amount equal to such excess. In the event and on such occasion that
total Canadian Exposure exceeds (y) the Canadian Borrowing Base then in effect
plus (z) the excess, if any, of (A) the U.S. Borrowing Base then in effect
minus (B) the total U.S. Exposure, the Canadian Borrower shall promptly prepay
its Borrowings (or, if no such Borrowings are outstanding, deposit cash
collateral in an account with the applicable Administrative Agent pursuant to
Section 2.05(j)) in an aggregate amount equal to such excess.
(c) At any time that any Loans are outstanding, in the event and on each
occasion that any Net Proceeds are received by or on behalf of any U.S. Loan
Party or any Canadian Loan Party in respect of any Prepayment Event, such U.S.
Loan Party or Canadian Loan Party shall, within five Business Days after such
Net Proceeds are received, prepay U.S. Borrowings or Canadian Borrowings,
respectively, as applicable, in an aggregate amount equal to such Net Proceeds
(or, if less, the aggregate principal amount of outstanding Loans of the
applicable Class).
(d) In addition to the other prepayments required hereunder, the Canadian
Borrowers shall repay Canadian Loans as required by Section 2.20.
(e) Prior to any optional or mandatory prepayment of Borrowings hereunder, the
applicable Borrower or Borrowers shall select the Borrowing or Borrowings to
be prepaid and shall specify such selection in the notice of such prepayment
pursuant to Section 2.10(f). Notwithstanding the foregoing provisions of this
Section 2.10, if at any time any Borrower is required to make a prepayment
under this Section 2.10 and such Borrower would incur breakage costs under
Section 2.15 as a result of Eurodollar Loans being prepaid other than on the
last day of an Interest Period applicable thereto (the "Affected Eurodollar
Loans"), and provided that no Default has occurred and is continuing at the
time, then such Borrower may in its sole discretion initially deposit a
portion (up to 100%) of the amounts that otherwise would have been paid in
respect of the Affected Eurodollar Loans with the applicable Administrative
Agent (which deposit must be equal in amount to the amount of the Affected
Eurodollar Loans not immediately prepaid) to be held as security for such
obligations of the Borrower hereunder pursuant to a cash collateral agreement
to be entered into in form and substance reasonably satisfactory to such
Administrative Agent and shall provide for investments in Permitted
Investments satisfactory to such Administrative Agent and such Borrower, with
such cash collateral to be directly applied upon the first occurrence (or
occurrences) thereafter of the last day of an Interest Period applicable to
the relevant Loans that are Eurodollar Loans (or such earlier date or dates as
shall be requested by such Borrower), to repay an aggregate principal amount
of such Loans equal to the Affected Eurodollar Loans not initially prepaid
pursuant to this sentence. Notwithstanding anything to the contrary contained
in the immediately preceding sentence, all amounts deposited as cash
collateral pursuant to the immediately preceding sentence shall be held for
the sole benefit of the Lenders whose Loans would otherwise have been
immediately prepaid with the amounts deposited and may be applied to the
prepayment of such Loans immediately if an Event of Default has occurred and
is continuing.
(f) The Company or the Canadian Borrower shall notify the applicable
Administrative Agent by telephone (confirmed by telecopy) of any prepayment
hereunder (i) in the case of prepayment of a Eurodollar Borrowing, not later
than 12:00 noon, New York City time, three Business Days before the date of
prepayment, (ii) in the case of prepayment of an ABR Borrowing, not later than
12:00 noon, New York City time, on the date of prepayment or (iii) in the case
of prepayment of a Canadian Prime Borrowing, not later than 11:00 a.m.,
Toronto time, on the date of prepayment. Each such notice shall be irrevocable
and shall specify the prepayment date, the principal amount of each Borrowing
or portion thereof to be prepaid and, in the case of a mandatory prepayment, a
reasonably detailed calculation of the amount of such prepayment; provided
that, if a notice of optional prepayment is given in connection with a
conditional notice of termination of the Commitments as contemplated by
Section 2.08(f), then such notice of prepayment may be revoked if such notice
of termination is revoked in accordance with Section 2.08(f). Promptly
following receipt of any such notice, the applicable Administrative Agent
shall advise the relevant Lenders of the contents thereof. Each partial
prepayment of any Borrowing shall be in an amount that would be permitted in
the case of an advance of a Borrowing of the same Type as provided in Section
2.02, except as necessary to apply fully the required amount of a mandatory
prepayment. Each prepayment of a Borrowing shall be applied ratably to the
Loans included in the prepaid borrowing. Prepayments shall be accompanied by
accrued interest to the extent required by Section 2.12.
(g) In the event that, on any date, the total U.S. Exposure exceeds the total
U.S. Commitments (after giving effect to the reduction in total U.S.
Commitments on such date), each of the U.S. Borrowers shall promptly (but in
no event later than one (1) Business Day following the date of determination),
prepay its Borrowings (or, if no such Borrowings are outstanding, deposit cash
collateral in an account with the U.S. Administrative Agent pursuant to
Section 2.05(j)) in an aggregate amount equal to such excess.
Section 2.11 Fees. (a) The Company agrees to pay to the U.S. Administrative
Agent for the account of each U.S. Lender, and the Canadian Borrower agrees to
pay to the Canadian Administrative Agent for the account of each Canadian
Lender, a commitment fee, which shall accrue at the rate of fifty bps (0.50%)
per annum (or thirty seven and one-half bps (0.375%) for such period that the
Ratings Requirement has been maintained and the Borrowing Base Availability is
greater than or equal to Three Hundred Million U.S. Dollars (U.S.$300,000,000))
on the average daily unused amount of each Commitment of each such Lender during
the period from and including the Effective Date to but excluding the date on
which such Commitment terminates. Accrued commitment fees shall be payable in
arrears on the last day of March, June, September and December of each year and
on the date on which the Commitments terminate, commencing on the first such
date to occur after the date hereof. All commitment fees in respect of U.S.
Commitments shall be payable in U.S. Dollars and shall be computed on the basis
of the actual number of days elapsed (including the first day but excluding the
last day) in a year of 360 days. All commitment fees in respect of Canadian
Commitments shall be computed on the basis of the actual number of days elapsed
(including the first day but excluding the last day) in a year of 365 days or
366 days, as the case may be, and, after being computed in U.S. Dollars, shall
be payable in Canadian Dollars in an amount equal to the Canadian Dollar
Equivalent of the U.S. Dollar amount so computed. For purposes of computing
commitment fees, a Commitment of a Lender shall be deemed to be used to the
extent of the U.S. Exposure or Canadian Exposure (as applicable).
(b) Each of the Borrowers agrees to pay (i) to the U.S. Administrative Agent for
the account of each U.S. Lender, and the Canadian Borrower agrees to pay to
the Canadian Administrative Agent for the account of each Canadian Lender, a
participation fee with respect to its participations in Letters of Credit,
which shall accrue at a rate equal to the Applicable Rate for Eurodollar Loans
on the average daily amount of such Lender's L/C Exposure during the period
from and including the Effective Date to but excluding the later of the
Maturity Date with respect to such Lender and the date on which such Lender
ceases to have any L/C Exposure, and (ii) to the U.S. Administrative Agent for
the account of each U.S. Issuing Bank, and to the Canadian Administrative
Agent for the account of each Canadian Issuing Bank, fronting fees, which
shall accrue at twelve and one-half bps (0.125%) per annum on the average
daily amount of the total U.S. L/C Exposure and total Canadian L/C Exposure
during the period from and including the Effective Date to but excluding the
later of the Maturity Date and the date on which there ceases to be any L/C
Exposure, as well as each Issuing Bank's standard fees with respect to the
issuance, amendment, renewal or extension of any Letter of Credit or
processing of drawings thereunder. Participation fees and fronting fees
accrued through and including the last day of March, June, September and
December of each year shall be payable on the third Business Day following
such last day, commencing on the first such date to occur after the Effective
Date; provided that all such fees shall be payable on the date on which the
Commitments terminate and any such fees accruing after the date on which the
Commitments terminate shall be payable on demand. Any other fees payable to
any Issuing Bank pursuant to this paragraph shall be payable within 10 days
after demand. All participation fees and fronting fees shall be computed on
the basis of a year of 360 days (or, in the case of participation fees and
fronting fees payable to Canadian Lenders, 365 days or 366 days, as the case
may be) and shall be payable for the actual number of days elapsed (including
the first day but excluding the last day).
(c) The Company agrees to pay to the U.S. Administrative Agent, for its own
account, fees payable in the amounts and at the times separately agreed upon
between the Company and the U.S. Administrative Agent. The Canadian Borrower
agrees to pay to the Canadian Administrative Agent, for its own account, fees
payable in the amounts and at the times separately agreed upon between the
Company and the Canadian Administrative Agent.
(d) The Canadian Borrower agrees to pay to each Canadian Lender a fee (the
"Acceptance Fee") in advance, at a rate per annum equal to the Applicable
Rate, on the date of acceptance of each Acceptance. All Acceptance Fees shall
be calculated on the face amount of the Acceptance issued and computed on the
basis of the actual number of days in the term thereof and a year of 365 days.
The Acceptance Fee shall be in addition to any other fees payable to each
Canadian Lender in connection with the issuance or discounting of such
Acceptance. The discount rate for Acceptance Fees shall be calculated under
terms customary to the practice of the Canadian Lenders and shall be based
upon a year of 365 days and the term of such Acceptance.
(e) All fees payable hereunder shall be paid on the dates due, in immediately
available funds, to the applicable Administrative Agent (or to the applicable
Issuing Bank, in the case of fees payable to it) for distribution, in the case
of commitment fees and participation fees, to the Lenders entitled thereto.
Fees paid shall not be refundable under any circumstances.
Section 2.12 Interest. (a) The Loans comprising each ABR Borrowing shall bear
interest at the Alternate Base Rate plus the Applicable Rate.
(b) The Loans comprising each Eurodollar Borrowing shall bear interest at the
Adjusted LIBO Rate for the Interest Period in effect for such Borrowing plus
the Applicable Rate.
(c) The Loans comprising each Canadian Prime Borrowing shall bear interest at
the Canadian Prime Rate plus the Applicable Rate.
(d) Notwithstanding the foregoing, if any principal of or interest on any Loan
or any fee or other amount payable by any Borrower hereunder is not paid when
due, whether at stated maturity, upon acceleration or otherwise, such overdue
amount shall bear interest, after as well as before judgment, at a rate per
annum equal to (i) in the case of overdue principal of any Loan, two hundred
bps (2.0%) plus the rate otherwise applicable to such Loan as provided in the
preceding paragraphs of this Section, (ii) in the case of any other amounts
payable in U.S. Dollars, two hundred bps (2.0%) plus the rate applicable to
ABR Loans as provided in paragraph (a) of this Section and (iii) in the case
of any other amounts payable in Canadian Dollars, two hundred bps (2.0%) plus
the rate applicable to the Canadian Prime Loans as provided in paragraph (c)
of this Section.
(e) Accrued interest on each Loan shall be payable in arrears on each Interest
Payment Date for such Loan and upon termination of the Commitments; provided
that (i) interest accrued pursuant to paragraph (d) of this Section shall be
payable on demand, (ii) in the event of any repayment or prepayment of any
Loan of any Lender (other than a prepayment of an ABR Loan prior to the end of
the Availability Period with respect to such Lender), accrued interest on the
principal amount repaid or prepaid shall be payable on the date of such
repayment or prepayment and (iii) in the event of any conversion of any
Eurodollar Loan prior to the end of the current Interest Period therefor,
accrued interest on such Loan shall be payable on the effective date of such
conversion.
(f) All interest hereunder shall be computed on the basis of a year of 360 days,
except that interest computed by reference to the Canadian Prime Rate shall be
computed on the basis of a year of 365 days (or 366 days in a leap year), and
in each case shall be payable for the actual number of days elapsed (including
the first day but excluding the last day). The applicable Alternate Base Rate,
Adjusted LIBO Rate or Canadian Prime Rate shall be determined by an
Administrative Agent, and such determination shall be conclusive absent
manifest error.
(g) With respect to Canadian Loans and fees relating thereto, unless otherwise
stated herein, wherever reference is made to a rate of interest "per annum" or
a similar expression, such interest shall be calculated on the basis of a
calendar year of 365 days or 366 days, as the case may be, and using the
nominal rate method of calculation, and shall not be calculated using the
effective rate method of calculation or on any other basis that gives effect
to the principle of deemed reinvestment of interest.
(h) For the purposes of the Interest Act (Canada) and disclosure thereunder,
whenever interest to be paid with respect to Canadian Loans or fees relating
thereto is to be calculated on the basis of a year of 360 days or any other
period of time that is less than a calendar year, the yearly rate of interest
to which the rate determined pursuant to such calculation is equivalent is the
rate so determined multiplied by the actual number of days in the calendar
year in which the same is to be ascertained and divided by either 360 or such
other period of time, as the case may be.
Section 2.13 Alternate Rate of Interest. If prior to the commencement
of any Interest Period for a Eurodollar Borrowing:
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(a) the applicable Administrative Agent determines (which determination
shall be conclusive absent manifest error) that adequate and reasonable
means do not exist for ascertaining the Adjusted LIBO Rate for such
Interest Period; or
(b) such Administrative Agent is advised by a majority in interest of the
Lenders of the applicable Class that the Adjusted LIBO Rate for such
Interest Period will not adequately and fairly reflect the cost to such
Lenders of making or maintaining their Loans included in such Borrowing
for such Interest Period;
then such Administrative Agent shall give notice thereof to the Company, the
Canadian Borrower and the Lenders by telephone or telecopy as promptly as
practicable thereafter and, until the Administrative Agents thereafter notify
the Company, the Canadian Borrower and the Lenders that the circumstances giving
rise to such notice no longer exist, (i) any Interest Election Request that
requests the conversion of any Borrowing to, or continuation of any Borrowing
as, a Eurodollar Borrowing of the applicable Class shall be ineffective and (ii)
if any Borrowing Request requests a Eurodollar Borrowing of the applicable
Class, such Borrowing shall be made as an ABR Borrowing.
Section 2.14 Increased Costs. (a) If any Change in Law shall:
---------------
(i) impose, modify or deem applicable any reserve, special deposit or
similar requirement against assets of, deposits with or for the account
of, or credit extended by, any Lender (except any such reserve
requirement reflected in the Adjusted LIBO Rate) or any Issuing Bank;
or
(ii) impose on any Lender or any Issuing Bank or the London interbank market
any other condition affecting this Agreement, any Loans made by such
Lender, the acceptance and purchase or sale of any Acceptance or any
Letter of Credit or participation therein;
and the result of any of the foregoing shall be to increase the cost to such
Lender of making or maintaining any Loan, the acceptance and purchase or sale of
any Acceptance (or of maintaining its obligation to make any such Loan or to
purchase or sell any such Acceptance) or to increase the cost to such Lender or
Issuing Bank of participating in, issuing or maintaining any Letter of Credit or
to reduce the amount of any sum received or receivable by such Lender or Issuing
Bank hereunder (whether of principal, interest or otherwise), then the Company
(if such Lender or Issuing Bank is a U.S. Lender or U.S. issuing Bank) or the
Canadian Borrower (if such Lender or Issuing Bank is a Canadian Lender or
Canadian Issuing Bank) will pay to such Lender or Issuing Bank, as the case may
be, such additional amount or amounts as will compensate such Lender or Issuing
Bank, as the case may be, for such additional costs incurred or reduction
suffered.
(b) If any Lender or any Issuing Bank determines that any Change in Law
regarding capital requirements has or would have the effect of reducing the
rate of return on such Lender's or Issuing Bank's capital or on the capital of
such Lender's or Issuing Bank's holding company, if any, as a consequence of
this Agreement or the Loans made by, or participations in Letters of Credit
held by, such Lender, or the Letters of Credit issued by such Issuing Bank, to
a level below that which such Lender or such Issuing Bank or such Lender's or
Issuing Bank's holding company could have achieved but for such Change in Law
(taking into consideration such Lender's or Issuing Bank's policies and the
policies of such Lender's or Issuing Bank's holding company with respect to
capital adequacy), then from time to time the Company (if such Lender or
Issuing Bank is a U.S. Lender or U.S. Issuing Bank) or the Canadian Borrower
(if such Lender or Issuing Bank is a Canadian Lender or Canadian Issuing Bank)
will pay to such Lender or Issuing Bank, as the case may be, such additional
amount or amounts as will compensate such Lender or Issuing Bank or such
Lender's or the Issuing Bank's holding company for any such reduction
suffered.
(c) A certificate of a Lender or any Issuing Bank setting forth the amount or
amounts necessary to compensate such Lender or Issuing Bank or its holding
company, as the case may be, as specified in paragraph (a) or (b) of this
Section shall be delivered to the Company or the Canadian Borrower (as
applicable) and shall be conclusive absent manifest error. The Company or the
Canadian Borrower (as applicable) shall pay such Lender or Issuing Bank, as
the case may be, the amount shown as due on any such certificate within 10
days after receipt thereof.
(d) Failure or delay on the part of any Lender or the Issuing Bank to demand
compensation pursuant to this Section shall not constitute a waiver of such
Lender's or the Issuing Bank's right to demand such compensation; provided
that neither the Company nor the Canadian Borrower shall be required to
compensate a Lender or Issuing Bank pursuant to this Section for any increased
costs or reductions incurred more than 180 days prior to the date that such
Lender or the Issuing Bank, as the case may be, notifies the Company or the
Canadian Borrower (as applicable) of the Change in Law giving rise to such
increased costs or reductions and of such Lender's or the Issuing Bank's
intention to claim compensation therefor; provided further that, if the Change
in Law giving rise to such increased costs or reductions is retroactive, then
the 180-day period referred to above shall be extended to include the period
of retroactive effect thereof.
Section 2.15 Break Funding Payments. In the event of (a) the payment of any
principal of any Eurodollar Loan other than on the last day of an Interest
Period applicable thereto (including as a result of an Event of Default), (b)
the conversion of any Eurodollar Loan other than on the last day of the Interest
Period applicable thereto, (c) the failure to borrow, convert, continue or
prepay any Loan on the date specified in any notice delivered pursuant hereto
(regardless of whether such notice may be revoked under Section 2.10(f) and is
revoked in accordance therewith), or (d) the assignment of any Eurodollar Loan
other than on the last day of the Interest Period applicable thereto as a result
of a request by a Borrower pursuant to Section 2.18, then, in any such event,
such Borrower shall compensate each Lender for the loss, cost and expense
attributable to such event. In the case of a Eurodollar Loan, such loss, cost or
expense to any Lender shall be deemed to include an amount determined by such
Lender to be the excess, if any, of (i) the amount of interest which would have
accrued on the principal amount of such Loan had such event not occurred, at the
Adjusted LIBO Rate that would have been applicable to such Loan, for the period
from the date of such event to the last day of the then current Interest Period
therefor (or, in the case of a failure to borrow, convert or continue, for the
period that would have been the Interest Period for such Loan), over (ii) the
amount of interest which would accrue on such principal amount for such period
at the interest rate which such Lender would bid were it to bid, at the
commencement of such period, for dollar deposits of a comparable amount and
period from other banks in the eurodollar market. A certificate of any Lender
setting forth any amount or amounts that such Lender is entitled to receive
pursuant to this Section shall be delivered to the relevant Borrower and shall
be conclusive absent manifest error. The relevant Borrower shall pay such Lender
the amount shown as due on any such certificate within 10 days after receipt
thereof.
Section 2.16 Taxes. (a) Any and all payments by or on account of any obligation
of any Borrower hereunder or under any other Loan Document shall be made free
and clear of and without deduction for any Indemnified Taxes or Other Taxes;
provided that if such Borrower shall be required to deduct any Indemnified Taxes
or Other Taxes from such payments, then (i) the sum payable shall be increased
as necessary so that after making all required deductions (including deductions
applicable to additional sums payable under this Section), the applicable
Administrative Agent, Lender or Issuing Bank (as the case may be) receives an
amount equal to the sum it would have received had no such deductions been made,
(ii) such Borrower shall make such deductions and (iii) such Borrower shall pay
the full amount deducted to the relevant Governmental Authority in accordance
with applicable law. If any Indemnified Taxes are required to be deducted in
respect of any payment made to a Lender as a result of the application of
Section 2.21 (including any payment made by a Lender to another Lender in
respect of that Lender's participating interest pursuant to Section 2.21(b)),
the applicable U.S. Borrower (in the case of Indemnified Taxes required to be
deducted by the United States or any political subdivision thereof) or the
Canadian Borrower (in the case of Indemnified Taxes required to be deducted by
Canada or any political subdivision thereof) shall pay an additional amount so
that after making all the required deductions, including deductions applicable
to additional amounts required under this Section 2.16(a), such Lender shall
receive an amount equal to the sum it would have received had no such deductions
been made.
(b) In addition, each of the Borrowers shall pay any Other Taxes to the relevant
Governmental Authority in accordance with applicable law.
(c) Each of the Borrowers shall indemnify each Administrative Agent, each Lender
and each Issuing Bank, within 10 days after written demand therefor, for the
full amount of any Indemnified Taxes or Other Taxes paid by such
Administrative Agent, Lender or Issuing Bank, as the case may be, on or with
respect to any payment by or on account of any obligation of such Borrower
hereunder or under any other Loan Document (including Indemnified Taxes or
Other Taxes imposed or asserted on or attributable to amounts payable under
this Section) and any penalties, interest and reasonable expenses arising
therefrom or with respect thereto, whether or not such Indemnified Taxes or
Other Taxes were correctly or legally imposed or asserted by the relevant
Governmental Authority. A certificate as to the amount of such payment or
liability delivered to a Borrower by a Lender or Issuing Bank, or by the
applicable Administrative Agent on its own behalf or on behalf of a Lender or
Issuing Bank, shall be conclusive absent manifest error.
(d) As soon as practicable after any payment of Indemnified Taxes or Other Taxes
by any Borrower to a Governmental Authority, such Borrower shall deliver to
the applicable Administrative Agent the original or a certified copy of a
receipt issued by such Governmental Authority evidencing such payment, a copy
of the return reporting such payment or other evidence of such payment
reasonably satisfactory to such Administrative Agent.
(e) Any Lender that is entitled to an exemption from or reduction of withholding
tax under the law of the jurisdiction in which the relevant Borrower is
located, or any treaty to which such jurisdiction is a party, with respect to
payments under this Agreement shall deliver to such Borrower (with a copy to
the applicable Administrative Agent), at the time or times prescribed by
applicable law, such properly completed and executed documentation prescribed
by applicable law or reasonably requested by such Borrower as will permit such
payments to be made without withholding or at a reduced rate, provided that
such Lender has received written notice from such Borrower advising it of the
availability of such exemption or reduction and supplying all applicable
documentation.
(f) If an Administrative Agent, Lender or Issuing Bank becomes aware that it is
entitled to claim a refund from a Governmental Authority in respect of
Indemnified Taxes or Other Taxes as to which it has been indemnified by a
Borrower, or with respect to which a Borrower has paid additional amounts
pursuant to this Section 2.16, it shall promptly notify such Borrower of the
availability of such refund claim and shall, within 30 days after receipt of a
request by such Borrower, make a claim to such Governmental Authority for such
refund at such Borrower's expense. If an Administrative Agent, Lender or
Issuing Bank receives a refund (including pursuant to a claim for a refund
made pursuant to the preceding sentence) in respect of Indemnified Taxes or
Other Taxes as to which it has been indemnified by a Borrower in which such
Borrower has paid additional amounts pursuant to this Section 2.16, it shall
within 30 days from the date of such receipt pay over such refund to such
Borrower (but only to the extent of indemnity payments made, or additional
amounts paid, by such Borrower under this Section 2.16 with respect to
Indemnified Taxes or Other Taxes giving rise to such refund), net of all out
of pocket expenses of such Administrative Agent, Lender or Issuing Bank and
without interest (other than interest paid by the relevant Governmental
Authority with respect to such refund); provided, however, that such Borrower,
upon the request of the Administrative Agents, Lender or Issuing Bank, agrees
to repay the amount paid over to such Borrower (plus penalties, interest and
other charges, including the reasonable fees and expenses of the
Administrative Agents and Collateral Agents) to such Administrative Agent,
Lender or Issuing Bank if such Administrative Agent, Lender or Issuing Bank is
required to repay such refund to such Governmental Authority.
(g) Without prejudice to the survival of any other agreement contained herein,
the agreements and obligations contained in this Section 2.16 shall survive
the payment in full of the principal of and interest on all Loans, Acceptance
Obligations and L/C Disbursements made hereunder.
(h) Each Non-U.S. Lender shall deliver to the Company two copies of either U.S.
Internal Revenue Service Form W-8BEN or Form W-8ECI, or any subsequent
versions thereof or successors thereto, properly completed and duly executed
by such Non-U.S. Lender claiming complete exemption from, or reduced rate of,
U.S. Federal withholding tax on payments by the Company under this Agreement.
Such forms shall be delivered by each Non-U.S. Lender on or before the date it
becomes a party to this Agreement and on or before the date, if any, such
Non-U.S. Lender changes its applicable lending office by designating a
different lending office. In addition, each Non-U.S. Lender shall deliver such
forms promptly upon the obsolescence or invalidity of any form previously
delivered by such Non-U.S. Lender. Notwithstanding any other provision of this
Section 2.16(h), a Non-U.S. Lender shall not be required to deliver any form
pursuant to this Section 2.16(h) that such Non-U.S. Lender is not legally able
to deliver.
(i) Nothing contained in this Section 2.16 shall require any Administrative
Agent, Lender or Issuing Bank to make available any of its tax returns (or any
other information that it deems, in its sole discretion, to be confidential or
proprietary).
Section 2.17 Payments Generally; Pro Rata Treatment; Sharing of Setoffs. (a)
Each Borrower shall make each payment required to be made by it hereunder or
under any other Loan Document (whether of principal, interest, fees,
reimbursement of L/C Disbursements, or of amounts payable under Section 2.14,
2.15 or 2.16, or otherwise) prior to the time expressly required hereunder or
under such other Loan Document for such payment (or, if no such time is
expressly required, prior to 12:00 noon, New York City time, in case of payments
to be made to the U.S. Administrative Agent, the U.S. Issuing Bank or any U.S.
Lender, or 12:00 noon, Toronto time, in case of payments to be made to the
Canadian Administrative Agent, the Canadian Issuing Bank or any Canadian
Lender), on the date when due, in immediately available funds, without set-off
or counterclaim. Any amounts received after such time on any date may, in the
discretion of the Administrative Agents, be deemed to have been received on the
next succeeding Business Day for purposes of calculating interest thereon. All
such payments shall be made to the U.S. Administrative Agent (in the case of
payments for the account of the U.S. Administrative Agent, the U.S. Issuing Bank
or any U.S. Lender) at its offices at 270 Park Avenue, New York, New York, or to
the Canadian Administrative Agent (in the case of payments for the account of
the Canadian Administrative Agent, the Canadian Issuing Bank or any Canadian
Lender) at One First Canadian Place, 100 King Street West, Suite 6900, Toronto
M5X 1A4, except payments to be made directly to the Issuing Banks as expressly
provided herein and except that payments pursuant to Sections 2.14, 2.15, 2.16
and 9.03 shall be made directly to the Persons entitled thereto and payments
pursuant to other Loan Documents shall be made to the Persons specified therein.
Each Administrative Agent and Collateral Agent shall distribute any such
payments received by it for the account of any other Person to the appropriate
recipient promptly following receipt thereof. If any payment under any Loan
Document shall be due on a day that is not a Business Day, the date for payment
shall be extended to the next succeeding Business Day, and, in the case of any
payment accruing interest, interest thereon shall be payable for the period of
such extension. All payments under each Loan Document shall be made in U.S.
Dollars; provided that payments of principal of and interest on Canadian Prime
Loans, L/C Disbursements denominated in Canadian Dollars and Acceptance
Obligations, and payments of Acceptance Fees, commitment fees in respect of
Canadian Commitments, fees in respect of Canadian Letters of Credit denominated
in Canadian Dollars and (to the extent invoiced or otherwise claimed in Canadian
Dollars) indemnification and expense reimbursement obligations, shall in each
case be payable in Canadian Dollars.
(b) If at any time insufficient funds are received by and available to the
applicable Administrative Agent to pay fully all amounts of principal,
unreimbursed L/C Disbursements, interest and fees then due hereunder in
respect of Obligations of either Class, then such funds shall be applied (i)
first, towards payment of interest and fees then due hereunder in respect of
Obligations of the applicable Class, ratably among the parties entitled
thereto in accordance with the amounts of interest and fees then due to such
parties, and (ii) second, towards payment of principal and unreimbursed L/C
Disbursements then due hereunder in respect of Obligations of the applicable
Class, ratably among the parties entitled thereto in accordance with the
amounts of principal and unreimbursed L/C Disbursements then due to such
parties in respect of Obligations of the applicable Class.
(c) If any Lender shall, by exercising any right of set-off or counterclaim or
otherwise, obtain payment in respect of any principal of or interest on any of
its Loans or participations in L/C Disbursements or Acceptance Obligations
resulting in such Lender receiving payment of a greater proportion of the
aggregate amount of its Loans and participations in L/C Disbursements and
Acceptance Obligations and accrued interest thereon than the proportion
received by any other Lender, then the Lender receiving such greater
proportion shall purchase (for cash at face value) participations in the Loans
and participations in L/C Disbursements and Acceptance Obligations of other
Lenders to the extent necessary so that the benefit of all such payments shall
be shared by the Lenders ratably in accordance with the aggregate amount of
principal of and accrued interest on their respective Loans and participations
in L/C Disbursements and Acceptance Obligations; provided that (i) if any such
participations are purchased and all or any portion of the payment giving rise
thereto is recovered, such participations shall be rescinded and the purchase
price restored to the extent of such recovery, without interest, and (ii) the
provisions of this paragraph shall not be construed to apply to any payment
made by any Borrower pursuant to and in accordance with the express terms of
this Agreement or any payment obtained by a Lender as consideration for the
assignment of or sale of a participation in any of its Loans or participations
in L/C Disbursements or Acceptance Obligations to any assignee or participant,
other than to a Borrower or any Subsidiary or Affiliate thereof (as to which
the provisions of this paragraph shall apply). Each Borrower consents to the
foregoing and agrees, to the extent it may effectively do so under applicable
law, that any Lender acquiring a participation pursuant to the foregoing
arrangements may exercise against any Borrower rights of set-off and
counterclaim with respect to such participation as fully as if such Lender
were a direct creditor of such Borrower in the amount of such participation.
(d) Unless the relevant Administrative Agent shall have received notice from the
relevant Borrower prior to the date on which any payment by such Borrower is
due to such Administrative Agent for the account of any of the Lenders or
Issuing Banks hereunder that such Borrower will not make such payment, such
Administrative Agent may assume that such Borrower has made such payment on
such date in accordance herewith and may, in reliance upon such assumption,
distribute to the applicable Lenders or the applicable Issuing Bank, as the
case may be, the amount due. In such event, if such Borrower has not in fact
made such payment, then each of such Lenders or such Issuing Bank, as the case
may be, severally agrees to repay to such Administrative Agent forthwith on
demand the amount so distributed to such Lender or Issuing Bank with interest
thereon, for each day from and including the date such amount is distributed
to it to but excluding the date of payment to such Administrative Agent, at
the greater of the Federal Funds Effective Rate (or, in the case of amounts
payable in Canadian Dollars, the Canadian Prime Rate) and a rate determined by
such Administrative Agent in accordance with banking industry rules on
interbank compensation.
(e) If any Lender shall fail to make any payment required to be made by it
pursuant to Sections 2.05(d) or (e), 2.06(b), 2.17(d) or 9.03(c), then the
applicable Administrative Agent may, in its discretion (notwithstanding any
contrary provision hereof), apply any amounts thereafter received by such
Administrative Agent for the account of such Lender to satisfy such Lender's
obligations under such Sections until all such unsatisfied obligations are
fully paid.
Section 2.18 Mitigation Obligations; Replacement of Lenders. (a) If any Lender
requests compensation under Section 2.14, or if a Borrower is required to pay
any additional amount to any Lender or any Governmental Authority for the
account of any Lender pursuant to Section 2.16, then such Lender shall use
reasonable efforts to designate a different lending office for funding or
booking its Loans hereunder or to assign its rights and obligations hereunder to
another of its offices, branches or affiliates, if, in the judgment of such
Lender, such designation or assignment (i) would eliminate or reduce amounts
payable pursuant to Section 2.14 or 2.16, as the case may be, in the future and
(ii) would not subject such Lender to any unreimbursed cost or expense and would
not otherwise be disadvantageous to such Lender. Each of the Borrowers hereby
agrees to pay all reasonable costs and expenses incurred by any Lender in
connection with any such designation or assignment.
(b) If any Lender requests compensation under Section 2.14, or if a Borrower is
required to pay any additional amount to any Lender or any Governmental
Authority for the account of any Lender pursuant to Section 2.16, or if any
Lender defaults in its obligation to fund Loans hereunder, then the Company
may, at its sole expense and effort, upon notice to such Lender and the
Administrative Agents, require such Lender to assign and delegate, without
recourse (in accordance with and subject to the restrictions contained in
Section 9.04), all its interests, rights and obligations under this Agreement
to an assignee that shall assume such obligations (which assignee may be
another Lender, if a Lender accepts such assignment); provided that (i) the
Company shall have received the prior written consent of the Administrative
Agents and the Issuing Banks, which consents shall not unreasonably be
withheld, (ii) such Lender shall have received payment of an amount equal to
the outstanding principal of its Loans and participations in L/C Disbursements
and Acceptance Obligations, accrued interest thereon, accrued fees and all
other amounts payable to it hereunder, from the assignee (to the extent of
such outstanding principal and accrued interest and fees) or the relevant
Borrowers (in the case of all other amounts) and (iii) in the case of any such
assignment resulting from a claim for compensation under Section 2.14 or
payments required to be made pursuant to Section 2.16, such assignment will
result in a material reduction in such compensation or payments. A Lender
shall not be required to make any such assignment and delegation if, prior
thereto, as a result of a waiver by such Lender or otherwise, the
circumstances entitling the Company to require such assignment and delegation
cease to apply.
Section 2.19 Money of Account, etc. This is an international loan transaction in
which the specification of U.S. Dollars or Canadian Dollars is of the essence,
and U.S. Dollars or Canadian Dollars, as specified herein, shall be the currency
of account and of payment in all events. The payment obligations of the
Borrowers and the other Loan Parties shall not be discharged by an amount paid
in another currency, whether pursuant to a judgment or otherwise, to the extent
that the amount so paid on prompt conversion to U.S. Dollars or, as the case may
be, Canadian Dollars under normal banking procedures shall not yield the amount
of U.S. Dollars or Canadian Dollars, as the case may be, due hereunder. In the
event that any payment made in a currency other than U.S. Dollars or Canadian
Dollars, as the case may be, whether pursuant to a judgment or otherwise, upon
conversion shall not yield such amount of U.S. Dollars or Canadian Dollars, the
applicable Lenders shall be entitled to demand immediate payment of, and shall
have a separate cause of action for, the U.S. Dollar or Canadian Dollar
deficiency.
Section 2.20 Currency Fluctuations, etc. (a) Not later than 1:00 p.m., New York
City time, on each Calculation Date, the U.S. Administrative Agent shall
determine the Exchange Rate as of such Calculation Date. Except as otherwise
provided in Section 2.08 and Section 2.21, the Exchange Rate so determined shall
become effective on the first U.S. Business Day immediately following the
relevant Calculation Date (a "Reset Date") and shall remain effective until the
next succeeding Reset Date.
(b) Not later than 5:00 p.m., New York City time, on each Reset Date, the U.S.
Administrative Agent shall consult with the Canadian Administrative Agent and
the Administrative Agents shall determine the total Canadian Exposure (both in
U.S. Dollars and in Canadian Dollars) and the total U.S. Exposure.
(c) If, on any Reset Date, the total Canadian Exposure exceeds the total
Canadian Commitments, then (i) the Canadian Administrative Agent shall give
notice thereof to the Canadian Borrower and the Canadian Lenders and (ii)
within two Canadian Business Days thereafter, the Canadian Borrower shall
repay or prepay Canadian Loans in accordance with this Agreement in an
aggregate principal amount such that, after giving effect thereto, the total
Canadian Exposure (expressed in Canadian Dollars) shall not exceed the total
Canadian Commitments.
(d) To the extent the repayments and prepayments referenced in paragraph (c) do
not result in a total Canadian Exposure (expressed in Canadian Dollars) that
is less than or equal to the total Canadian Commitments, then the Borrowers
shall provide cash collateral in accordance with Section 2.05(j) to the extent
required to obtain such result.
Section 2.21 Consolidation of Credit Facilities. (a) Notwithstanding
noncompliance with the conditions precedent set forth in Article IV, if (i) an
Event of Default pursuant to clause (h), (i) or (j) of Article VII shall have
occurred, (ii) the Commitments shall have been terminated and/or the Loans shall
have been declared immediately due and payable pursuant to Article VII, or (iii)
the Consolidated Net Tangible Assets of the Canadian Borrower shall be less than
Cdn.$4,000,000 and, in the case of this clause (iii), a majority in interest of
the Canadian Lenders (determined based upon their respective Canadian
Commitments) shall have given notice thereof to the Administrative Agents
requesting that this Section 2.21 apply, then, at 10:00 A.M., New York City
time, on the second U.S. Business Day (the "Consolidation Date") immediately
succeeding the first to occur of (A) the date on which such Event of Default
occurs (in the case of clause (i) above), (B) the date on which such termination
and/or declaration occurs (in the case of clause (ii) above), or (C) the date on
which such notice is received by the Administrative Agents (in the case of
clause (iii) above), subject to Section 2.21(b), the following shall occur:
(1) the Company, in its capacity as a Guarantor, shall repay all
outstanding Canadian Loans and all unreimbursed L/C
Disbursements under Canadian Letters of Credit, provide
the cash collateral contemplated in Section 2.05(j) in
respect of the face amount of all outstanding Acceptances
and pay all accrued fees payable by the Canadian Borrower
and shall cause the U.S. Borrowers to repay all outstanding
U.S. Loans and all unreimbursed L/C Disbursements under
U.S. Letters of Credit and pay all accrued fees payable by the U.S. Borrowers
hereunder (without prejudice to the
rights of the U.S. Borrowers to finance such repayments by borrowing U.S.
Loans in accordance with this Agreement
after giving effect to the adjustment of Commitments as provided below, if
the U.S. Commitments remain in effect and
the conditions to such Borrowing are satisfied);
(2) if, as of the Consolidation Date, the U.S. Commitments remain
in effect, then:
(A) the total U.S. Commitments shall increase by the U.S. Dollar
Equivalent of the total Canadian Commitments, but without
increasing the U.S. Commitment of any U.S. Lender; and
(B) each Canadian Lender (or an affiliate thereof designated by
such Canadian Lender) shall become a U.S. Lender with a U.S.
Commitment equal to the amount of its former Canadian
Commitment, and its Canadian Commitment shall terminate, if
not previously terminated; and
(3) the Company shall become the account party in respect of all
Canadian Letters of Credit (with the result that each Canadian
Letter of Credit shall become a U.S. Letter of Credit) and the
Lenders' participations in Letters of Credit shall be adjusted
so that, as of the Consolidation Date, the U.S. L/C Exposure
of each Lender shall equal its Applicable Percentage of the
aggregate U.S. L/C Exposure at the time (determined as though
Commitments had been consolidated as U.S. Commitments as
provided in clause (2) above, even if such Commitments have
been terminated).
The foregoing actions shall result in, and the parties hereto
shall take such actions as shall be necessary to result in, all Canadian Lenders
becoming U.S. Lenders, all Canadian Letters of Credit becoming U.S. Letters of
Credit, all Canadian Loans being repaid, cash collateral being provided for the
satisfaction of all obligations in respect of outstanding Acceptances and any
and all U.S. Loans and U.S. L/C Exposure being held by the Lenders ratably in
accordance with their U.S. Commitments (or, if the Commitments have terminated,
in accordance with their ratable interests as though the Commitments had not
terminated and had been converted to U.S. Commitments as provided above). After
giving effect to the foregoing, in the event that any L/C Disbursement is made
in Canadian Dollars, any payment required to be made by the Borrowers or the
Lenders hereunder in respect of such L/C Disbursement shall be payable in U.S.
Dollars in an amount equal to the U.S. Dollar Equivalent (based on the Exchange
Rate determined by the U.S. Administrative Agent on the U.S. Business Day
immediately preceding such payment date) of the amount otherwise payable in
Canadian Dollars. For purposes of this Section 2.21(a) (other than in the
immediately preceding sentence), the U.S. Dollar Equivalent shall be determined
based upon the Exchange Rate in effect on the Effective Date.
(b) If any event described in clause (i), (ii) or (iii) of
paragraph (a) above occurs and either the Required Lenders (in
the case of an occurrence of an event described in clause (i)
or (ii) of paragraph (a) above) elect to apply the provisions
of this paragraph (b) in lieu of the provisions of paragraph
(a) above, or (in the case of any event described in paragraph
(a) above) for any reason the actions specified in paragraph
(a) above cannot be taken or accomplished, then the following
provisions shall apply:
(1) all Commitments shall terminate;
(2) each U.S. Lender shall purchase a participation in each Canadian Loan,
outstanding Acceptance and unreimbursed L/C Disbursement of each Canadian
Lender, and each Canadian Lender shall purchase a participation in each U.S.
Loan and unreimbursed L/C Disbursement of each U.S. Lender, and each Lender
having issued such an Acceptance or holding such a Loan or unreimbursed L/C
Disbursement agrees to sell such participations therein, in each case in such
amount as shall be necessary so that the U.S. Loans and participations therein,
the Canadian Loans and participations therein, the Acceptances and
participations therein and the L/C Disbursements and participations therein, are
held ratably by the Lenders (it being understood that the ratable interests of
the Lenders shall be determined by the Administrative Agents on the basis of the
U.S. Dollar Equivalent of their respective Commitments at the time of
termination thereof); and
(3) the Lenders' participations in Letters of Credit shall be
adjusted so that the U.S. L/C Exposure and the Canadian L/C
Exposure of each Lender shall be ratable (determined as
provided in clause (2) above).
The foregoing actions shall result in, and the Lenders shall
take such actions as shall be necessary to result in, any and all U.S. Loans,
Canadian Loans, Acceptances, U.S. L/C Exposure and Canadian L/C Exposure being
held, directly or indirectly (through participations) by the Lenders ratably on
the basis of their respective Commitments at the time of termination thereof.
For purposes of this Section 2.21(b), (i) the purchase and sale of
participations shall be at a price calculated on the basis of the principal
amount thereof but without interest (it being understood that any recovery of
interest accrued thereon prior to the date of sale of such participations shall
be for the account of the Lender selling such participation) and (ii) the
purchase and sale of participations pursuant to clause (2) above shall be made
in the same currency in which the applicable Loan, L/C Disbursement or
Acceptance is denominated; provided that if a U.S. Lender is unable for any
reason (including lack of participation by such U.S. Lender in foreign exchange
markets) to obtain or apply Canadian Dollars to purchase participations in
Loans, L/C Disbursements or Acceptances that are denominated in Canadian
Dollars, as required by clause (2) above, such U.S. Lender shall be permitted to
make such purchase payments in U.S. Dollars in an amount equal to the U.S.
Dollar Equivalent of the amount otherwise payable in Canadian Dollars hereunder.
The provisions of this Section 2.21(b) are solely for the benefit of the
Lenders, shall not be enforceable by any Borrower and, notwithstanding any
contrary provisions herein, may be amended, modified or waived by agreement
among the Lenders without any consent or approval of any Borrower.
Section 2.22 Sale of Mortgaged Property. The Company shall give the
Administrative Agents notice of any Contemplated Sale/Leaseback Transaction.
Concurrent with the consummation of any Contemplated Sale/Leaseback Transaction
and delivery by the Company to the Administrative Agents of related
documentation, the U.S. Administrative Agent shall take all necessary and
appropriate actions, or cause such actions to be taken, to release the security
interests in and Liens granted pursuant to the Mortgages to the U.S. Collateral
Agent for the benefit of the Lenders and other secured parties thereunder upon
the Mortgaged Property or Mortgaged Properties being sold pursuant to such
Contemplated Sale/Leaseback Transaction. The U.S. Administrative Agent shall
have sole authority on behalf of the Lenders to take any and all actions related
to the releasing of such Mortgage Liens on the Mortgaged Properties in favor of
the U.S. Collateral Agent for the benefit of the Lenders and such other secured
parties. Without limiting the generality of the foregoing, (i) upon
effectiveness of this Agreement, the U.S. Administrative Agent shall prepare
such lien release documentation as the Borrowers shall reasonably request, to be
placed in escrow pending consummation of the Contemplated Sale/Leaseback
Transaction, and (ii) the U.S. Administrative Agent shall from time to time
perform such other acts as the Borrowers may reasonably request to facilitate
the release of Mortgage Liens on Mortgaged Properties in connection with a
Contemplated Sale/Leaseback Transaction and/or sale of any such Mortgaged
Property in a timely fashion prior to or contemporaneously with the consummation
of such transaction.
ARTICLE III
Representations and Warranties
Each of the Borrowers represents and warrants to the Lenders
that:
Section 3.01 Organization; Powers. Each of the Company and the Subsidiaries is
duly organized, validly existing and in good standing under the laws of the
jurisdiction of its organization, has all requisite power and authority to carry
on its business as now conducted and, except where the failure to do so,
individually or in the aggregate, could not reasonably be expected to result in
a Material Adverse Effect, is qualified to do business in, and is in good
standing in, every jurisdiction where such qualification is required.
Section 3.02 Authorization; Enforceability. The Transactions to be entered into
by each Loan Party are within such Loan Party's corporate powers and have been
duly authorized by all necessary corporate and, if required, equityholder
action. This Agreement has been duly executed and delivered by each of the
Borrowers and constitutes, and each other Loan Document to which any Loan Party
is to be a party, when executed and delivered by such Loan Party, will
constitute, a legal, valid and binding obligation of each such Borrower or Loan
Party (as the case may be), enforceable in accordance with its terms, subject to
applicable bankruptcy, insolvency, reorganization, moratorium or other laws
affecting creditors' rights generally and subject to general principles of
equity, regardless of whether considered in a proceeding in equity or at law.
Section 3.03 Governmental Approvals; No Conflicts. The Transactions (a) do not
require any consent or approval of, registration or filing with, or any other
action by, any Governmental Authority, except such as have been obtained or made
and are in full force and effect and have been disclosed to the Lenders to their
reasonable satisfaction, and except filings necessary to perfect Liens created
under the Loan Documents, (b) will not violate any applicable law or regulation
or the charter, by-laws or other organizational documents of the Company or any
of the Subsidiaries or any order of any Governmental Authority, (c) will not
violate or result in a default under any indenture, agreement or other
instrument binding upon the Company or any of the Subsidiaries or its assets, or
give rise to a right thereunder to require any payment to be made by the Company
or any of the Subsidiaries, and (d) will not result in the creation or
imposition of any Lien on any asset of the Company or any of the Subsidiaries,
except Liens created under the Loan Documents.
Section 3.04 Financial Condition; No Material Adverse Change. (a) The Company
has heretofore furnished to the Lenders its consolidated balance sheet and
statements of consolidated operations and retained earnings, consolidated
shareholders' equity and consolidated cash flows (i) as of and for the fiscal
year ended February 22, 2003, reported on by Pricewaterhouse Coopers LLP,
independent public accountants, and (ii) as of and for the fiscal quarter and
the portion of the fiscal year ended September 6, 2003, certified by its chief
financial officer. Such financial statements present fairly, in all material
respects, the financial position and results of operations and cash flows of the
Company and the Subsidiaries as of such dates and for such periods in accordance
with GAAP, subject to year-end audit adjustments and the absence of footnotes in
the case of the statements referred to in clause (ii) above.
(b) Since February 22, 2003, there has been no material adverse change in (a)
the business, assets, operations or condition, financial or otherwise, of the
Company and the Subsidiaries, taken as a whole, except as disclosed in the
Exchange Act Filings, in the Information Memorandum or in any Schedules or
Exhibits to this Agreement as of the Effective Date, (b) after the Effective
Date, the ability of any Loan Party to perform any of its obligations under
any Loan Document, (c) after the Effective Date, the rights of or benefits
available to the Lenders under any Loan Document or (d) the Collateral as a
whole.
Section 3.05 Properties. (a) Each of the Company and the Subsidiaries has good
title to, or valid leasehold interests in, all its real and personal property
material to its business, except for Liens permitted by Section 6.02.
(b) Each of the Company and the Subsidiaries owns, or is licensed to use, all
trademarks, tradenames, copyrights, patents and other intellectual property
material to its business, and the use thereof by the Company and the
Subsidiaries does not infringe upon the rights of any other Person, except for
any such infringements that, individually or in the aggregate, could not
reasonably be expected to result in a Material Adverse Effect.
Section 3.06 Litigation and Environmental Matters. (a) There are no actions,
suits or proceedings by or before any arbitrator or Governmental Authority
pending against or, to the knowledge of any of the Borrowers, threatened against
or affecting the Company or any of the Subsidiaries (i) as to which there is a
reasonable possibility of an adverse determination and that, if adversely
determined, would reasonably be expected, individually or in the aggregate, to
result in a Material Adverse Effect (other than the Disclosed Matters) or (ii)
that involve any of the Loan Documents or the Transactions.
(b) Except for the Disclosed Matters and except with respect to any other
matters that, individually or in the aggregate, would not reasonably be
expected to result in a Material Adverse Effect, neither the Company nor any
of the Subsidiaries (i) has failed to comply with any Environmental Law or to
obtain, maintain or comply with any permit, license or other approval required
under any Environmental Law, (ii) has become subject to any Environmental
Liability, (iii) has received notice of any claim with respect to any
Environmental Liability or (iv) knows of any basis for any Environmental
Liability.
(c) Since the date of this Agreement, there has been no change in the status of
the Disclosed Matters that, individually or in the aggregate, has resulted in,
or materially increased the likelihood of, a Material Adverse Effect.
Section 3.07 Compliance with Laws and Agreements. Each of the Company and the
Subsidiaries is in compliance with all laws, regulations and orders of any
Governmental Authority applicable to it or its property and all indentures,
agreements and other instruments binding upon it or its property, except where
the failure to do so, individually or in the aggregate, could not reasonably be
expected to result in a Material Adverse Effect. No Default has occurred and is
continuing.
Section 3.08 Investment and Holding Company Status. Neither the Company nor any
of the Subsidiaries is an "investment company" as defined in, or subject to
regulation under, the Investment Company Act of 1940 or (b) a "holding company"
as defined in, or subject to regulation under, the Public Utility Holding
Company Act of 1935.
Section 3.09 Taxes. Each of the Company and the Subsidiaries has timely filed or
caused to be filed all Tax returns and reports required to have been filed and
has paid or caused to be paid all Taxes required to have been paid by it, except
(a) any Taxes that are being contested in good faith by appropriate proceedings
and for which the Company or such Subsidiary, as applicable, has set aside on
its books adequate reserves or (b) to the extent that the failure to do so could
not reasonably be expected to result in a Material Adverse Effect.
Section 3.10 Employee Benefit Plans. (a) No Pension Plan Event has occurred or
is reasonably expected to occur that, when taken together with all other such
Pension Plan Events for which liability is reasonably expected to occur, could
reasonably be expected to result in a Material Adverse Effect.
(b) Each Foreign Employee Benefit Plan is in compliance in all material respects
with all requirements of the governing documents for such plan and all
applicable laws (including funding and fiduciary obligations). With respect to
any Foreign Employee Benefit Plan (other than a Foreign Pension Plan),
reasonable reserves have been established in accordance with prudent business
practice or where required by ordinary accounting practices in the
jurisdiction in which such plan is maintained. The aggregate unfunded
liabilities, after giving effect to any reserves for such liabilities, are not
reasonably expected to result in a Material Adverse Effect.
Section 3.11 Disclosure. To the best knowledge of the Borrowers, the Borrowers
have disclosed to the Lenders all agreements, instruments and corporate or other
restrictions to which the Company or any of the Subsidiaries is subject, and all
other matters known to any of them, that, individually or in the aggregate,
could reasonably be expected to result in a Material Adverse Effect. Neither the
Information Memorandum nor any of the other reports, financial statements,
certificates or other information furnished by or on behalf of any Loan Party to
either Administrative Agent or any Lender in connection with the negotiation of
this Agreement or any other Loan Document or delivered hereunder or thereunder
(as modified or supplemented by other information so furnished) contains, as of
the date hereof (or in the case of items furnished after the date hereof, when
furnished), any material misstatement of fact or omits, as of the date hereof
(or in the case of items furnished after the date hereof, when furnished), to
state any material fact necessary to make the statements therein, in the light
of the circumstances under which they were made, not misleading; provided that,
with respect to projected financial information, the Borrowers represent only
that such information was prepared in good faith based upon assumptions believed
to be reasonable at the time so furnished.
Section 3.12 Subsidiaries. Schedule 3.12 sets forth the name of, and the
ownership interest of the Company in, each Subsidiary of the Company and
identifies each Subsidiary that is a Canadian Loan Party or a U.S. Loan Party,
in each case as of the Effective Date. The Canadian Borrower is an indirect
wholly owned subsidiary of the Company.
Section 3.13 Insurance. Schedule 3.13 sets forth a description of all insurance
maintained by or on behalf of the Company and the Subsidiaries as of the
Effective Date. As of the Effective Date, all premiums in respect of such
insurance have been paid. The insurance maintained by or on behalf of the
Company and the Subsidiaries is in full force and effect and complies with the
requirements set forth in Section 5.07.
Section 3.14 Labor Matters. As of the Effective Date, there are no strikes,
lockouts or slowdowns against the Company or any Subsidiary pending or, to the
knowledge of any Borrower, threatened. The Company and the Subsidiaries have not
been in violation of, in any material respect, the Fair Labor Standards Act or
any other applicable Federal, state, local or foreign law dealing with hours
worked by or payments made to employees or any similar matters. All payments due
from the Company or any Subsidiary, or for which any claim may be made against
the Company or any Subsidiary, on account of wages and employee health and
welfare insurance and other benefits, have been paid or accrued as a liability
on the books of the Company or such Subsidiary. The consummation of the
Transactions will not give rise to any right of termination or right of
renegotiation on the part of any union under any collective bargaining agreement
to which the Company or any Subsidiary is bound.
Section 3.15 Security Documents. (a) Each Pledge Agreement creates in favor of
the applicable Collateral Agent, for the benefit of the Secured Parties referred
to therein, a legal, valid, continuing and enforceable security interest in the
Collateral (as defined in such Pledge Agreement), the enforceability of which is
subject to applicable bankruptcy, insolvency, reorganization, moratorium or
other laws affecting creditors' rights generally and subject to general
principles of equity, regardless of whether considered in a proceeding in equity
or at law, and the Pledged Stock (as defined in such Pledge Agreement) has been
delivered to such Collateral Agent (together with stock powers or other
appropriate instruments of transfer executed in blank form). The Collateral
Agent has a fully perfected first priority Lien on, and security interest in, to
and under all right, title and interest of each pledgor thereunder in such
Collateral, and such security interest is in each case prior and superior in
right and interest to any other Person.
(b) Each of the Security Agreements creates in favor of the applicable
Collateral Agent, for the benefit of the Secured Parties referred to therein,
a legal, valid, continuing and enforceable security interest in the Collateral
(as defined in such Security Agreement), the enforceability of which is
subject to applicable bankruptcy, insolvency, reorganization, moratorium or
other laws affecting creditors' rights generally and subject to general
principles of equity, regardless of whether considered in a proceeding in
equity or at law. The financing statements, releases and other filings set
forth on Schedule 3.15(b) are in appropriate form and have been or will be
filed in the offices specified on Schedule 6 to the Perfection Certificate.
Upon such filings such Collateral Agent will have a perfected Lien on, and
security interest in, to and under all right, title and interest of the
grantors thereunder in all Collateral that may be perfected by filing,
recording or registering a financing statement or analogous document
(including without limitation the proceeds of such Collateral subject to the
limitations relating to such proceeds in the UCC and the PPSA), under the UCC
or the PPSA (in each case in effect on the date this representation is made)
in each case prior and superior in right to any other Person other than with
respect to Liens expressly permitted by Section 6.02 hereof.
(c) When the U.S. Security Agreement is filed in the United States Patent and
Trademark Office and the United States Copyright Office and when financing
statements, releases and other filings set forth on Schedule 3.15(c) in
appropriate form are filed in the offices specified on Schedule 6 to the
Perfection Certificate, the U.S. Security Agreement shall constitute a fully
perfected Lien on, and security interest in, all right, title and interest of
the applicable U.S. Loan Parties in the Intellectual Property (as defined in
the U.S. Security Agreement) in which a security interest may be perfected by
filing, recording or registering a security agreement, financing statement or
analogous document in the United States Patent and Trademark Office or the
United States Copyright Office, as applicable, in each case prior and superior
in right to any other Person other than with respect to Liens expressly
permitted by Section 6.02 hereof (it being understood that subsequent
recordings in the United States Patent and Trademark Office and the United
States Copyright Office may be necessary to perfect a Lien on registered
trademarks, trademark applications and copyrights acquired by the Loan Parties
after the date hereof).
(d) When the Canadian Security Agreement or notice thereof is filed in the
Canadian Patent and Canadian Trade Marks Office, and when the financing
statements set forth on Schedule 3.15(d) in appropriate form are filed in the
offices specified in Schedule 6 to the Perfection Certificate, the Canadian
Security Agreement shall constitute a fully perfected Lien on, and security
interest in, all right, title and interest of the applicable Canadian Loan
Parties in the Intellectual Property (as defined in the Canadian Security
Agreement) in which a security interest may be perfected by filing, recording
or registering a security agreement, financing statement or analogous document
pursuant to the Ontario Personal Property Security Act in each case prior and
superior in right to any other Person other than with respect to Liens
expressly permitted by Section 6.02 hereof (it being understood that
subsequent recordings in the Canadian Patent Office and the Canadian Trade
Marks Office may be necessary to record notice of a security interest on
Intellectual Property (as defined in the Canadian Security Agreement) acquired
by the Loan Parties after the date hereof).
(e) [Reserved].
(f) With respect to each "deposit account" and "securities account" (each as
defined the UCC) maintained by a Loan Party and for which a control
arrangement has been obtained in favor of the applicable Collateral Agent in
connection with the Existing Credit Agreement, each such "deposit account" and
"securities account" (each as defined the UCC) has been pledged to the
applicable Collateral Agent pursuant to the U.S. Security Agreement.
ARTICLE IV
Conditions
Section 4.01 Effective Date. The obligations of the Lenders to make Loans, of
the Canadian Lenders to accept Acceptances and of the Issuing Banks to issue
Letters of Credit hereunder shall not become effective until the date on which
each of the following conditions is satisfied (or waived in accordance with
Section 9.02):
(a) The Administrative Agents shall have received from each party hereto either
(i) a counterpart of this Agreement signed on behalf of such party or (ii)
written evidence satisfactory to the Administrative Agents (which may include
telecopy transmission of a signed signature page of this Agreement) that such
party has signed a counterpart of this Agreement.
(b) The Administrative Agents shall have received a favorable written opinion
(addressed to the Agents, the Issuing Banks and the Lenders and dated the
Effective Date) of each of (i) William P. Costantini, Esq., Senior Vice
President and General Counsel of the Company, (ii) Cahill Gordon & Reindel
LLP, U.S. counsel for the Loan Parties and (iii) Miller Thomson LLP, Canadian
counsel for the Loan Parties, substantially in the form of Exhibits N, O and
P, respectively, and, in the case of each such opinion required by this
paragraph, covering such other matters relating to the Loan Parties, the Loan
Documents or the Transactions as the Required Lenders shall reasonably
request. Each of the Borrowers hereby requests such counsel to deliver such
opinions.
(c) The Administrative Agents shall have received a true and complete copy of
each Borrower's organizational documents, an incumbency certificate for each
person authorized to execute Loan Documents on behalf of a Borrower,
resolutions authorizing the due execution, delivery and performance of the
Loan Documents and the Transactions and a good standing certificate from each
jurisdiction where a Borrower is organized and each jurisdiction necessary for
it to carry on its business and such other documents and certificates as the
Administrative Agents or their counsel may reasonably request relating to the
organization, existence and good standing of each Borrower, the authorization
of the Transactions and any other legal matters relating to the Borrower, the
Loan Documents or the Transactions, all in form and substance satisfactory to
each of the Administrative Agents and its counsel.
(d) The Administrative Agents shall have received a certificate, dated the
Effective Date and signed by the president, a vice president or a Financial
Officer of the Company, confirming compliance with the conditions set forth in
paragraphs (a) and (b) of Section 4.02.
(e) The Administrative Agents shall have received all fees and other amounts due
and payable on or prior to the Effective Date, including, to the extent
invoiced, reimbursement or payment of all out-of-pocket expenses (including
reasonable fees, charges and disbursements of counsel) required to be
reimbursed or paid by any Loan Party hereunder or under any other Loan
Document.
(f) The Collateral Agents shall have received counterparts of the Pledge
Agreements signed on behalf of the Loan Parties party thereto, and the
Collateral Agents shall have received certificates or other instruments
representing all the outstanding Equity Interests of each Subsidiary owned by
any Loan Party (except that stock certificates representing shares of common
stock of a Foreign Subsidiary pledged by a U.S. Loan Party under the U.S.
Pledge Agreement may be limited to 65% of the outstanding shares of common
stock of such Foreign Subsidiary and each pledge shall be otherwise limited as
specifically set forth in the applicable Pledge Agreement), together with
stock powers or other instruments of transfer with respect thereto endorsed in
blank form.
(g) The Collateral Agents shall have received counterparts of the Security
Agreements signed on behalf of the Loan Parties party thereto, together with
the following:
(i) all documents and instruments, including Uniform Commercial Code financing
statements and Personal Property Security Act financing statements, required
by law or reasonably requested by the Collateral Agents to be filed,
registered or recorded to create or perfect the Liens intended to be created
under the Security Agreements; and
(ii) a completed Perfection Certificate from each of the Company and the
Canadian Borrower dated the Effective Date and signed by an executive officer
or Financial Officer of the Company and the Canadian Borrower, respectively,
together with all relevant attachments contemplated thereby, including the
then completed results of a search of the Uniform Commercial Code (or
equivalent) filings made with respect to the applicable Loan Parties in the
jurisdictions contemplated by the applicable Perfection Certificate and copies
of the financing statements (or similar documents) disclosed by such search
and evidence reasonably satisfactory to the Collateral Agents that the Liens
indicated by such financing statements (or similar documents) are permitted by
Section 6.02 or have been released.
(h) The Collateral Agents shall have received counterparts of the Guarantee
Agreements signed on behalf of the Loan Parties party thereto.
(i) The Administrative Agents shall have received counterparts of the Indemnity,
Subrogation and Contribution Agreement signed on behalf of the Loan Parties
party thereto.
(j) The Administrative Agents shall have received evidence satisfactory to them
that the insurance required by Section 5.07 and the Security Documents is in
effect.
(k) [Reserved].
(l) The Administrative Agents shall have received a completed Borrowing Base
Certificate dated the Effective Date and signed by a Financial Officer of each
of the Company and the Canadian Borrower, calculating the U.S. Borrowing Base
and the Canadian Borrowing Base as of the end of the most recent week ended
within fifteen (15) Business Days prior to the Effective Date.
(m) [Reserved].
(n) The Agents, the Issuing Banks and the Lenders shall have received, for the
remainder of the 2003 fiscal year and for the 2004 through 2006 fiscal years,
the items required by clause (g) of Section 5.01.
(o) The Administrative Agents shall have received the results of satisfactory
lien searches (including, without limitation, the results of satisfactory tax
lien and judgment lien searches) showing the absence of any Liens (except for
the Liens of the Collateral Agents) on any of any of the Collateral other than
Liens expressly permitted by Section 6.02 hereof.
(p) After giving effect to the calculation of the Borrowing Base, the Borrowing
Base Availability shall not be less than One Hundred Seventy-Five Million U.S.
Dollars (U.S.$175,000,000).
(q) The Agents shall have performed inspections, audits and field searches
(which may include conversations with responsible officers and employees) to
their satisfaction of each Loan Parties' assets (including, without
limitation, accounts receivable and inventory), liabilities, books and
records, management information systems, cash management, vendor agreements
and other agreements related to the Transactions contemplated hereby.
(r) The Company shall have distributed for execution Tri-Party Agreements to all
of its third party credit card and health care accounts receivable obligors
which are not natural persons or Governmental Authorities. The Agents shall
have received executed counterparts of such Tri-Party Agreements as have been
signed on behalf of each party thereto on or before the Effective Date.
(s) The Agents shall have received an appraisal, in form and substance
satisfactory to the Agents, performed by an appraiser acceptable to the Agents
of the Inventory and the Scripts to be pledged or granted as Collateral.
The Administrative Agents shall notify the Company, the Canadian Borrower and
the Lenders of the Effective Date, and such notice shall be conclusive and
binding. Notwithstanding the foregoing, the obligations of the Lenders to make
Loans, of the Canadian Lenders to accept Acceptances and of the Issuing Banks to
issue Letters of Credit hereunder shall not become effective unless each of the
foregoing conditions is satisfied (or waived pursuant to Section 9.02) at or
prior to 3:00 p.m., New York City time, on January 15, 2004 (and, in the event
such conditions are not so satisfied or waived, the Commitments shall terminate
at such time).
Section 4.02 Each Credit Event. The obligation of each Lender to make a Loan or
to accept an Acceptance on the occasion of any Borrowing, of any reallocation
pursuant to Section 2.08(d) and of each Issuing Bank to issue, amend, renew or
extend any Letter of Credit, is subject to receipt of the request therefor in
accordance herewith and to the satisfaction of the following conditions:
(a) The representations and warranties of each Loan Party set forth in the Loan
Documents shall be true and correct on and as of the date of such Borrowing or
Acceptance or Reallocated Commitment or the date of issuance, amendment,
renewal or extension of such Letter of Credit, as applicable.
(b) At the time of and immediately after giving effect to such Borrowing or
Acceptance or Reallocated Commitment or the issuance, amendment, renewal or
extension of such Letter of Credit, as applicable, no Default shall have
occurred and be continuing.
Each of the Borrowers, in connection with each Borrowing, each Acceptance, each
Reallocated Commitment and each issuance, amendment, renewal or extension of a
Letter of Credit shall be deemed to have represented and warranted on the date
thereof as to the matters specified in paragraphs (a) and (b) of this Section.
ARTICLE V
Affirmative Covenants
Until the Commitments have expired or been terminated and the
principal of and interest on each Loan and Acceptance Obligation and all fees
payable hereunder shall have been paid in full, there are no Acceptances
outstanding and all Letters of Credit shall have expired or terminated and all
L/C Disbursements shall have been reimbursed, each of the Borrowers covenants
and agrees with the Lenders that:
Section 5.01 Financial Statements and Other Information. The Company will
furnish to the Administrative Agents and each Lender each of the following
together with all supporting documentation as the Administrative Agents may
reasonably require:
(a) within 90 days after the end of each fiscal year of the Company, and within
90 days after the end of each fiscal year of the Canadian Borrower, its
audited consolidated balance sheet and related statements of operations,
stockholders' equity and cash flows as of the end of and for such year,
together with the related accountant's management letter (subject to, if such
letter is by its terms confidential, the Administrative Agent's providing the
Company's independent accountants with any such documentation as they may be
entitled to require to waive such confidentiality, it being understood that
the Company shall not be required to violate any undertakings of
confidentiality), setting forth in each case in comparative form the figures
for the previous fiscal year, all reported on by Pricewaterhouse Coopers LLP
or other independent public accountants of recognized national standing
(without a "going concern" or like qualification or exception and without any
qualification or exception as to the scope of such audit) to the effect that
such consolidated financial statements present fairly in all material respects
the financial condition and results of operations of the Company and its
consolidated subsidiaries, or the Canadian Borrower and its consolidated
subsidiaries, as the case may be, in each case on a consolidated basis in
accordance with GAAP (or, in the case of the Canadian Borrower, generally
accepted accounting principles in Canada) consistently applied;
(b) within 45 days after the end of each of the first three fiscal quarters of
each fiscal year of the Company, the Company's consolidated balance sheet and
related statements of operations, stockholders' equity and cash flows as of
the end of and for such fiscal quarter and the then elapsed portion of the
fiscal year, setting forth in each case in comparative form the figures for
the corresponding period or periods of (or, in the case of the balance sheet,
as of the end of) the previous fiscal year, all certified by one of its
Financial Officers as presenting fairly in all material respects the financial
condition and results of operations of the Company and its consolidated
Subsidiaries on a consolidated basis in accordance with GAAP consistently
applied, subject to normal year-end audit adjustments and the absence of
footnotes;
(c) within 30 days after the end of each of the first two (or three, in the
event of a fiscal quarter having four fiscal four week periods) fiscal
four-week periods of each fiscal quarter of the Company, its consolidated
balance sheet and related statements of operations, stockholders' equity and
cash flows as of the end of and for such fiscal four-week periods and the then
elapsed portion of the fiscal year, all certified by one of its Financial
Officers as presenting in all material respects the financial condition and
results of operations of the Company and its consolidated Subsidiaries on a
consolidated basis in accordance with GAAP consistently applied, subject to
normal year-end audit adjustments and the absence of footnotes;
(d) concurrently with any delivery of financial statements under clause (a) or
(b) above, a certificate of a Financial Officer (i) certifying as to whether a
Default has occurred and, if a Default has occurred, specifying the details
thereof and any action taken or proposed to be taken with respect thereto,
(ii) setting forth reasonably detailed calculations demonstrating compliance
with Section 6.12, if applicable and (iii) stating whether any change in GAAP
or in the application thereof has occurred since the date of the Company's
audited financial statements referred to in Section 3.04 and, if any such
change has occurred, specifying the effect of such change on the financial
statements accompanying such certificate;
(e) concurrently with any delivery of financial statements under clause (a)
above, a certificate of the accounting firm that reported on such financial
statements stating whether they obtained knowledge during the course of their
examination of such financial statements of any Default (which certificate may
be limited to the extent required by accounting rules or guidelines);
(f) within eight Business Days after the end of each calendar week, a completed
Borrowing Base Certificate calculating and certifying each of the U.S.
Borrowing Base and the Canadian Borrowing Base as of the last day of such
calendar week, signed on behalf of each of the Company and the Canadian
Borrower by one of its Financial Officers;
(g) at least 30 days prior to the commencement of each fiscal year of the
Company (and, with respect to the last quarter of the fiscal year ending on or
about February 28, 2004, on or before the Effective Date), (i) a reasonably
detailed consolidated budget for such fiscal year (including a projected
consolidated balance sheet and related statements of projected operations and
cash flow as of the end of and for each fiscal quarter during such fiscal year
and setting forth the assumptions used for purposes of preparing such budget)
and, promptly when available and from time to time, any significant revisions
of such budget (including, without limitation, any amounts to be paid to any
pension plan (including any Plan, Foreign Employee Benefit Plan, or, the best
of the Company's knowledge, a Canadian Multi-Employer Plan, or a U.S.
Multi-Employer Plan) or to any third party on account of any such pension
plan) and (ii) a reasonably detailed budget of the Borrowing Base Availability
(after giving effect to all draws, advances and/or borrowings and repayments
thereof in such month) for such fiscal year, by month, and promptly when
available any significant revisions of such budget;
(h) within ten (10) Business days after any sale, transfer or other disposition
of assets permitted by clause (c) of Section 6.05, a complete description of
such sale, transfer or other disposition, together with any significant
revisions to the budget previously delivered pursuant to clause (g) of this
Section for sales, transfers or other dispositions resulting in Net Proceeds
greater than U.S.$5,000,000;
(i) promptly after the same become publicly available, copies of all periodic
and other reports, proxy statements and other materials filed by the Company
or any Subsidiary with the Securities and Exchange Commission, or any
Governmental Authority succeeding to any or all of the functions of said
Commission, or with any national securities exchange, or distributed by the
Company to its stockholders generally, as the case may be; and
(j) promptly following any request therefor, such other information regarding
the operations, business affairs and financial condition of the Company or any
Subsidiary, or compliance with the terms of any Loan Document, as either
Administrative Agent or any Lender may reasonably request.
Section 5.02 Notices of Material Events. The Company will furnish to the
Administrative Agents and each Lender prompt written notice of the following:
(a) the occurrence of any Default;
(b) the filing or commencement of any action, suit or proceeding by or before
any arbitrator or Governmental Authority against or affecting the Company or
any Affiliate thereof that, if adversely determined, could reasonably be
expected to result in a Material Adverse Effect;
(c) the occurrence of any Pension Plan Event that, alone or together with any
other related Pension Plan Events that have occurred, could reasonably be
expected to result in liability of the Company and its Subsidiaries in an
aggregate amount exceeding U.S.$5,000,000;
(d) a copy of each notice from each funding agent of each of the Foreign
Employee Benefit Plans required to be delivered by such funding agent under
Section 56.1 of the Pension Benefits Act of Ontario promptly after such notice
is received by the Canadian Borrower or other Loan Party; and
(e) any other development (other than those specified above as to which the
Lenders have received due notice) that results in, or could reasonably be
expected to result in, a Material Adverse Effect.
Each notice delivered under this Section shall be accompanied by a statement of
a Financial Officer or other executive officer of the Company setting forth the
details of the event or development requiring such notice and any action taken
or proposed to be taken with respect thereto.
Section 5.03 Information Regarding Collateral. (a) The Company will furnish to
the Administrative Agents prompt written notice of any change (i) in any Loan
Party's corporate name or in any trade name used to identify it in the conduct
of its business or in the ownership of its properties, (ii) in the location of
any Loan Party's chief executive office, its principal place of business, its
"location" (as determined under Section 9-307 of Revised Article 9 of the UCC),
any office in which it maintains books or records relating to Collateral owned
by it or any office or facility at which Collateral owned by it is located
(including the establishment of any such new office or facility), (iii) in any
Loan Party's identity or corporate structure or (iv) in any U.S. Loan Party's
Federal Taxpayer Identification Number. The Company agrees not to effect or
permit any change referred to in the preceding sentence unless all filings have
been made under the Uniform Commercial Code or otherwise that are required in
order for the Collateral Agents to continue at all times following such change
to have a valid, legal and perfected security interest in all of the Collateral
to the extent it is intended to be so perfected on the date hereof. The Company
also agrees promptly to notify the Administrative Agents if any material portion
of the Collateral is damaged or destroyed.
(b) Each year, at the time required for delivery of annual financial statements
with respect to the preceding fiscal year pursuant to clause (a) of Section
5.01, the Company shall deliver to the Administrative Agents a certificate of
a Financial Officer and the chief legal officer of the Company (i) setting
forth the information required pursuant to Section 2 of the Perfection
Certificate or confirming that there has been no change in such information
since the date of the Perfection Certificate delivered on the Effective Date
or the date of the most recent certificate delivered pursuant to this Section
and (ii) certifying that all Uniform Commercial Code financing statements
(including fixture filings, as applicable) or other appropriate filings,
recordings or registrations, including all refilings, rerecordings and
reregistrations, containing a description of the Collateral have been filed of
record in each governmental, municipal or other appropriate office in each
jurisdiction identified pursuant to clause (i) above to the extent necessary
to protect and perfect the security interests under the Security Agreements
for a period of not less than eighteen (18) months after the date of such
certificate (except as noted therein with respect to any continuation
statements to be filed within such period).
Section 5.04 Existence; Conduct of Business. The Company will, and will cause
each of the Subsidiaries to, do or cause to be done all things necessary to
preserve, renew and keep in full force and effect its legal existence and the
rights, licenses, permits, privileges, franchises, patents, copyrights,
trademarks and trade names material to the conduct of its business; provided
that the foregoing shall not prohibit any merger, consolidation, liquidation or
dissolution permitted under Section 6.03.
Section 5.05 Payment of Obligations. The Company will, and will cause each of
its Subsidiaries to, pay its Indebtedness and other obligations, including Tax
liabilities, before the same shall become delinquent or in default, except where
(a) the validity or amount thereof is being contested in good faith by
appropriate proceedings, (b) the Company or such Subsidiary has set aside on its
books adequate reserves with respect thereto in accordance with GAAP, (c) such
contest effectively suspends collection of the contested obligation and the
enforcement of any Lien securing such obligation and (d) the failure to make
payment pending such contest could not reasonably be expected to result in a
Material Adverse Effect.
Section 5.06 Maintenance of Properties. The Company will, and will cause each of
the Subsidiaries to, keep and maintain all property material to the conduct of
its business in good working order and condition, ordinary wear and tear
excepted.
Section 5.07 Insurance. (a) The Company will, and will cause each of its
Subsidiaries to, (i) maintain insurance with financially sound and reputable
insurers reasonably acceptable to the Administrative Agents on such of its
property and in at least such amounts and against at least such risks as is
customary with companies in the same or similar businesses operating in the same
or similar locations, including public liability insurance against claims for
personal injury or death occurring upon, in or about or in connection with the
use of any properties owned, occupied or controlled by it including the
insurance required pursuant to the Security Documents; (ii) maintain such other
insurance as may be required by law; and (iii) upon request by an Administrative
Agent, which request need not be made in writing, furnish the Administrative
Agents with certificates evidencing the insurance required by this paragraph. In
the event of the Company's or Loan Parties' failure to obtain or maintain the
insurance required by this paragraph, the Administrative Agents shall have the
right to obtain the required coverage and bill the Company for the premium
payments therefor. To the extent consistent with prudent business practice, the
Company may maintain a program of self-insurance in place of any of the
insurance required by this paragraph.
(b) Fire and extended coverage policies with respect to any Collateral shall not
include (i) a provision to the effect that any of the Borrowers, the
Administrative Agents, the Collateral Agents, or any other party shall be a
coinsurer and (ii) shall be endorsed, which endorsement shall be satisfactory
in form and substance to the Collateral Agents, to name the Collateral Agents,
for the benefit of the Lenders, as additional insured or loss payee, as
appropriate, and shall include such other provisions as the Collateral Agents
may reasonably require from time to time to protect the interests of the
Lenders, provided that the requested provisions are available at reasonable
cost. Each such policy referred to in this paragraph also shall provide that
it shall not be cancelled, modified or not renewed (i) by reason of nonpayment
of premium except upon not less than 30 days' prior written notice thereof by
the insurer to the Collateral Agents (giving the Collateral Agents the right
to cure defaults in the payment of premiums) or (ii) for any other reason
except upon not less than 30 days' prior written notice thereof by the insurer
to the Collateral Agents. The Borrowers shall deliver to the Collateral
Agents, prior to the cancellation of any such policy of insurance, a
Certificate of Insurance for the replacement policy.
(c) The Company and the Loan Parties acknowledge and agree that all income,
payments and proceeds of a physical damage property insurance claim payable to
them and relating to the Inventory will be received by the Company and the
Loan Parties as agent hereunder for the benefit of the Lenders and deposited
in an account subject to a control arrangement in favor of the applicable
Collateral Agent. The Company and the Loan Parties disclaim any right, title
or interest in or to such income, payments or proceeds and hereby confirm that
the Company and the Loan Parties have granted a first priority security
interest to the Collateral Agents (for the benefit of the Lenders) in all such
income, payments and proceeds. The Company and the Loan Parties acknowledge
and agree that all income, payments and proceeds of a physical damage property
insurance claim payable to them and relating to the Mortgaged Property (after
payment of any amounts due to a Lessor under a Lease) will be deposited in an
account subject to a control arrangement in favor of the applicable Collateral
Agent.
(d) The Company shall continue to maintain, for itself and its subsidiaries, a
Directors and Officers insurance policy, and a "Blanket Crime" policy
including employee dishonesty, forgery or alteration, theft, disappearance and
destruction, robbery and safe burglary, property, and computer fraud coverage
with responsible companies in such amounts as are customarily carried by
business entities engaged in similar businesses similarly situated, and will
upon request by an Administrative Agent, which request need not be made in
writing, furnish the Administrative Agents certificates evidencing renewal of
each such policy.
Section 5.08 Casualty and Condemnation. The Borrowers (a) will furnish to the
Administrative Agents and the Lenders prompt written notice of any casualty or
other insured damage to any material portion of any Collateral or the
commencement of any action or proceeding for the taking of any Collateral or any
part thereof or interest therein under power of eminent domain or by
condemnation or similar proceeding and (b) will ensure that the Net Proceeds of
any such event (whether in the form of insurance proceeds, condemnation awards
or otherwise) are collected and applied in accordance with the applicable
provisions of the Security Documents.
Section 5.09 Books and Records; Inspection and Audit Rights. (a) The Company
will, and will cause each of its Subsidiaries to, keep proper financial records
in accordance with GAAP. The Company will, and will cause each of the
Subsidiaries to, permit any representatives designated by either Administrative
Agent in consultation with the Borrowers, upon reasonable prior notice, no less
frequently than semi-annually in any period of twelve (12) consecutive months
commencing on or after the Effective Date, to visit and inspect its properties,
to examine and make extracts from such records, and to discuss its affairs,
finances and condition with its officers and independent accountants, all at
reasonable times.
(b) The Company will, and will cause each of the Subsidiaries to, permit any
representatives designated by either Administrative Agent (including any
consultants, accountants, lawyers and appraisers retained by such
Administrative Agent) in consultation with the Borrowers to conduct
evaluations and appraisals of the computation of the U.S. Borrowing Base or
the Canadian Borrowing Base (or both) and the assets included therein,
including supporting systems, processes and controls, all at reasonable times
but no less frequently than semi-annually in any period of twelve (12)
consecutive months commencing on or after the Effective Date. The Company
shall pay the reasonable fees and expenses of any representatives retained by
an Administrative Agent, or employees of such Administrative Agent, to conduct
any such evaluation or appraisal, including reasonable and customary
internally allocated fees and expenses of such employees.
Section 5.10 Compliance with Laws. The Company will, and will cause each of the
Subsidiaries to, comply with all laws, rules, regulations and orders of any
Governmental Authority applicable to it or its property, except where the
failure to do so, individually or in the aggregate, could not reasonably be
expected to result in a Material Adverse Effect.
Section 5.11 Use of Proceeds and Letters of Credit. The proceeds of the Loans
and Acceptances will be used for general corporate purposes, including Working
Capital and acquisitions and Capital Expenditures. No part of the proceeds of
any Loan or Acceptance will be used, directly or indirectly, for any purpose
that entails a violation of any of the Regulations of the Board, including
Regulations T, U and X. Letters of Credit will be issued only for general
corporate purposes.
Section 5.12 Additional Subsidiaries. If any additional Subsidiary is formed or
acquired after the Effective Date, the Company will notify the Administrative
Agents, the Collateral Agents and the Lenders thereof and (a) if such Subsidiary
is a wholly-owned U.S. Subsidiary, the Company will cause such Subsidiary (i) to
become a party to (A) the U.S. Guarantee Agreement, (B) the Indemnity,
Subrogation and Contribution Agreement, (C) the U.S. Security Agreement and (D)
the U.S. Pledge Agreement, in each case in the manner provided therein and
within ten (10) U.S. Business Days after such Subsidiary is formed or acquired
and (ii) promptly to take such actions to perfect the Liens on such Subsidiary's
assets granted under the Security Documents as the U.S. Administrative Agent or
the Required Lenders shall reasonably request, (b) if such Subsidiary is a
wholly-owned Canadian Subsidiary, the Company will cause such Subsidiary (i) to
become a party to (A) the Canadian Guarantee Agreement, (B) the Indemnity,
Subrogation and Contribution Agreement, (C) the Canadian Security Agreement and
(D) the Canadian Pledge Agreement, in each case in the manner provided therein
and within ten (10) Canadian Business Days after such Subsidiary is formed or
acquired and (ii) promptly to take such actions to perfect Liens on such
Subsidiary's assets granted under the Security Documents as the Administrative
Agents or the Required Lenders shall reasonably request and (c) if any Equity
Interests of such Subsidiary are owned by or on behalf of any Loan Party, the
Company will cause such Equity Interests to be pledged pursuant to the
applicable Pledge Agreement within ten (10) Business Days after such Subsidiary
is formed or acquired (except that, if such Subsidiary is a Foreign Subsidiary,
shares of voting stock of such Subsidiary to be pledged pursuant to the U.S.
Pledge Agreement may be limited to 65% of the outstanding shares of voting stock
of such Subsidiary).
Section 5.13 Tri-Party Agreements. Within ninety (90) days after the Effective
Date, the Company shall have received the remainder of the Tri-Party Agreements,
duly authorized, executed and delivered by the parties thereto.
Section 5.14 Further Assurances. The Borrowers will, and will cause each other
Loan Party to, execute any and all further documents, financing statements,
agreements and instruments, and take all such further actions (including the
filing and recording of financing statements, termination statements, fixture
filings and other documents), which may be required under any applicable law, or
which either Administrative Agent or the Required Lenders may reasonably
request, to effectuate the transactions contemplated by the Loan Documents or to
grant, preserve, protect or perfect the Liens created or intended to be created
by the Security Documents or the validity or priority of any such Lien, all at
the expense of the Loan Parties. The Borrowers also agree to provide to the
Administrative Agents, from time to time upon request, evidence reasonably
satisfactory to the Administrative Agents as to the perfection and priority of
the Liens created or intended to be created by the Security Documents.
Section 5.15 Control Agreements, Irrevocable Letters of Instruction, Etc. Within
such time periods as the Administrative Agents shall reasonably determine, the
Borrowers shall deliver such control agreements, irrevocable letters of
instruction and other agreements, each in form and substance satisfactory to the
Administrative Agents, as the Administrative Agents deem necessary or
appropriate to grant a first priority perfected security interest in and to each
deposit account and securities account established by a Loan Party on or after
the Effective Date.
Section 5.16 Priority of Claims Waivers. Unless reserved for in accordance with
the provisions hereof, the Borrowers from time to time shall promptly deliver,
or cause to be promptly delivered, a Priority of Claims Waiver from each vendor,
landlord, public warehouse operator or other third party bailee that has not
provided a Priority of Claims Waiver in form and substance satisfactory to the
Administrative Agents for each third party storage facility located in any U.S.
Priming Jurisdiction or Canadian Priming Jurisdiction.
Section 5.17 Benefit Plans Payments. The Loan Parties, Subsidiaries and all
ERISA Affiliates shall make all required contributions under any Foreign
Employee Benefit Plan, Plans, Canadian Multi-Employer Plans or U.S.
Multi-Employer Plans which, if not made, could result in a Material Adverse
Effect unless such payment is being contested pursuant to Section 5.05.
ARTICLE VI
Negative Covenants
Until the Commitments have expired or terminated and the
principal of and interest on each Loan and Acceptance Obligation and all fees
payable hereunder have been paid in full, there are no Acceptances outstanding
and all Letters of Credit have expired or terminated and all L/C Disbursements
shall have been reimbursed, each of the Borrowers covenants and agrees with the
Lenders that:
Section 6.01 Indebtedness; Certain Equity Securities.
(a) The Company will not, and will not permit any Subsidiary to, create,
incur, assume or permit to exist any Indebtedness, except:
(i) Indebtedness created under the Loan Documents;
(ii) Indebtedness existing on the date hereof and set forth in Schedule 6.01 and
extensions, renewals and replacements of any such Indebtedness that do not
increase the outstanding principal amount thereof (except (A) to the extent of
any reasonable premiums, fees and expenses incurred in connection with any
such extensions, renewals and replacements and (B) in the case of senior
unsecured notes issued by the Company to refinance the Indebtedness described
in Section 6.08(c) or Section 6.08(d)) or result in an earlier maturity date
or decreased weighted average life thereof;
(iii) Indebtedness of the Company to any Subsidiary and of any Subsidiary to the
Company or any other Subsidiary; provided that Indebtedness of any Subsidiary
that is not a Loan Party owing to any Loan Party shall be subject to Section
6.04;
(iv) Guarantees by the Company of Indebtedness of any Subsidiary and by any
Subsidiary of Indebtedness of the Company or any other Subsidiary; provided
that (A) Guarantees by any Loan Party of Indebtedness of any Subsidiary that
is not a Loan Party shall be subject to Section 6.04 and (B) a Canadian Loan
Party shall not Guarantee Indebtedness of a U.S. Loan Party;
(v) Indebtedness of the Company or any Subsidiary incurred to finance the
acquisition, construction or improvement of any fixed or capital assets,
including Capital Lease Obligations and any Indebtedness assumed in connection
with the acquisition of any such assets or secured by a Lien on any such
assets prior to the acquisition thereof, and extensions, renewals and
replacements of any such Indebtedness that do not increase the outstanding
principal amount thereof (except to the extent of any reasonable premiums,
fees and expenses incurred in connection with any such extensions, renewals
and replacements) or result in an earlier maturity date or decreased weighted
average life thereof; provided that (A) such Indebtedness is incurred prior to
or within 180 days after such acquisition or the completion of such
construction or improvement and (B) the aggregate principal amount of
Indebtedness permitted by this clause (v) and clause (vi) below, plus the
aggregate book value of all assets sold after the Effective Date pursuant to
sale and leaseback transactions permitted by clause (c) of Section 6.06 (which
shall not include any Contemplated Sale/Leaseback Transaction), shall not
exceed, at any time outstanding, 10% of the Company's Consolidated Net
Tangible Assets;
(vi) Indebtedness of the Company or any Subsidiary for borrowed money secured by
any real properties (other than Mortgaged Properties) and improvements thereto
(but not inventory or other personal property located therein) owned by the
Company or any Subsidiary, and extensions, renewals and replacements of any
such Indebtedness that do not increase the outstanding principal amount
thereof (except to the extent of any reasonable premiums, fees and expenses
incurred in connection with any such extensions, renewals and replacements) or
result in an earlier maturity date or decreased weighted average life thereof;
provided that the aggregate principal amount of Indebtedness permitted by this
clause (vi) shall be subject to the limitation set forth in the proviso to
clause (v) above;
(vii) Indebtedness of the Company or any Subsidiary relating to purchase money
security interests (as defined in the New York Uniform Commercial Code, as
amended) in the United States or such similar provision of Ontario law or any
other applicable Province of Canada in an aggregate amount not exceeding
U.S.$40,000,000 (or its equivalent) at any time outstanding; provided that,
after giving effect to any such proposed transaction, (A) no Default shall
have occurred and be continuing, (B) the total U.S. Exposure does not exceed
the total U.S. Commitments, (C) the total Canadian Exposure does not exceed
the total Canadian Commitments and (D) the sum of the U.S. Borrowing Base and
the Canadian Borrowing Base is greater than the sum of the total U.S.
Commitments and the total Canadian Commitments;
(viii) Guarantees by the Company or any of its Subsidiaries of Indebtedness of
third parties given in connection with the acquisition or improvement of real
property for use in the business of the Company and its Subsidiaries not
exceeding U.S.$10,000,000 (or its equivalent) at any one time outstanding;
(ix) software licenses required to be reflected as indebtedness on the Company's
consolidated balance sheet in an aggregate amount not exceeding
U.S.$10,000,000 (or its equivalent); and
(x) other unsecured Indebtedness in an aggregate principal amount not exceeding
U.S.$40,000,000 (or its equivalent) at any time outstanding.
(b) The Company will not, nor will the Company permit any Subsidiary to, issue
any preferred stock or other preferred Equity Interests, other than Qualified
Preferred Stock.
Section 6.02 Liens. The Company will not, and will not permit any Subsidiary to,
create, incur, assume or permit to exist any Lien on any property or asset now
owned or hereafter acquired by it, or assign or sell any income or revenues
(including accounts receivable) or rights in respect of any thereof, except:
(a) Liens created under the Loan Documents and the Control Agreements;
(b) Permitted Encumbrances;
(c) any Lien on any property or asset of the Company or any Subsidiary existing
on February 23, 2001 and set forth in Schedule 6.02; provided that (i) such
Lien shall not apply to any other property or asset of the Company or any
Subsidiary and (ii) such Lien shall secure only those obligations which it
secures on the date hereof and extensions, renewals and replacements thereof
that do not increase the outstanding principal amount thereof, the obligations
thereunder or the property or assets securing such obligations;
(d) any Lien existing on any property or asset prior to the acquisition thereof
by the Company or any Subsidiary; provided that (i) such Lien is not created
in contemplation of or in connection with such acquisition, (ii) such Lien
shall not apply to any other property or assets of the Company or any
Subsidiary and (iii) such Lien shall secure only those obligations which it
secures on the date of such acquisition and extensions, renewals and
replacements thereof that do not increase the outstanding principal amount
thereof (except to the extent of any reasonable premiums, fees and expenses
incurred in connection with any such extensions, renewals and replacements);
(e) Liens on fixed or capital assets acquired, constructed or improved by the
Company or any Subsidiary; provided that (i) such security interests secure
Indebtedness permitted by clause (v) of Section 6.01(a) or a completed
Contemplated Sale/Leaseback Transaction, (ii) such security interests and the
Indebtedness secured thereby are incurred prior to or within 180 days after
such acquisition or the completion of such construction or improvement, (iii)
the Indebtedness secured thereby does not exceed the cost of acquiring,
constructing or improving such fixed or capital assets and (iv) such security
interests shall not apply to any other property or assets of the Company or
any Subsidiary;
(f) Liens on real properties (other than the Mortgaged Properties) and
improvements thereto (but not inventory or other personal property located
therein) owned by the Company or any Subsidiary; provided that such Liens
secure Indebtedness permitted by clause (vi) of Section 6.01(a); and
(g) Liens of sellers of goods to any Loan Party arising under the provisions of
applicable law similar to Article 2 of the UCC in the ordinary course of
business, covering only goods (other than Inventory and Equipment (as defined
in the applicable Security Agreement) included in the U.S. Borrowing Base or
Canadian Borrowing Base).
Section 6.03 Fundamental Changes. (a) The Company will not, nor will it permit
any Subsidiary to, merge into or consolidate or amalgamate with any other
Person, or permit any other Person to merge into or consolidate with it, or
liquidate or dissolve, except that, if at the time thereof and immediately after
giving effect thereto no Default shall have occurred and be continuing (i) any
Subsidiary may merge into or amalgamate with the Company in a transaction in
which the Company is the surviving corporation, (ii) any Subsidiary may merge
into any Subsidiary in a transaction in which the surviving or amalgamated
entity is a Subsidiary and (if any party to such merger is a Loan Party) is a
Loan Party and (iii) any Subsidiary (other than a Borrower) may liquidate or
dissolve if the Company determines in good faith that such liquidation or
dissolution is in the best interests of the Company and the Subsidiaries, taken
as a whole, and is not materially disadvantageous to the Lenders; provided that
any such merger involving a Person that is not a wholly owned Subsidiary
immediately prior to such merger shall not be permitted unless also permitted by
Section 6.04.
(b) The Company will not, and will not permit any of its Subsidiaries to, engage
to any material extent in any business other than businesses of the type
conducted by the Company and its Subsidiaries on the date of execution of this
Agreement and businesses reasonably related thereto.
Section 6.04 Investments, Loans, Advances, Guarantees and Acquisitions. The
Company will not, and will not permit any of its Subsidiaries to, purchase, hold
or acquire (including pursuant to any merger with any Person that was not a
wholly owned Subsidiary prior to such merger) any Equity Interests in or
evidence of indebtedness or other securities (including any option, warrant or
other right to acquire any of the foregoing) of, make or permit to exist any
loans or advances to, Guarantee any obligations of, or make or permit to exist
any investment or any other interest in, any other Person, or purchase or
otherwise acquire (in one transaction or a series of transactions) any assets of
any other Person constituting a business unit, except:
(a) Permitted Investments;
(b) investments existing on the date hereof and set forth on Schedule 6.04 and
any other investments from time to time not to exceed at any time outstanding
an aggregate principal amount in excess of the Net Proceeds received from the
disposition of investments permitted by this Section 6.04(b);
(c) investments by the Company and its Subsidiaries in Equity Interests in their
respective Subsidiaries; provided that (i) any such Equity Interests held by a
Loan Party shall be pledged pursuant to the applicable Pledge Agreement
(subject to the limitations applicable to common stock of a Foreign Subsidiary
referred to in Section 5.12), (ii) the aggregate amount of investments by Loan
Parties in, and loans and advances by Loan Parties to, and Guarantees by Loan
Parties of Indebtedness of, Subsidiaries that are not Loan Parties (including
all such investments, loans, advances and Guarantees existing on the Effective
Date) shall not exceed U.S.$20,000,000 (or its equivalent) at any time
outstanding and (iii) neither the Company nor any of the Subsidiaries will
create or acquire any Subsidiary after the Effective Date that is not a Loan
Party;
(d) loans or advances made by the Company to any Subsidiary and made by any
Subsidiary to the Company or any other Subsidiary; provided that the amount of
such loans and advances made by Loan Parties to Subsidiaries that are not Loan
Parties shall be subject to the limitation set forth in clause (c) above;
(e) Guarantees constituting Indebtedness permitted by Section 6.01; provided
that the aggregate principal amount of Indebtedness of Subsidiaries that are
not Loan Parties that is Guaranteed by any Loan Party shall be subject to the
limitation set forth in clause (c) above;
(f) investments received in connection with the bankruptcy or reorganization of,
or settlement of delinquent accounts and disputes with, customers and
suppliers, in each case in the ordinary course of business; and
(g) non-cash consideration received in connection with the sale, transfer, lease
or disposition of any asset in compliance with Sections 6.05 and 6.06.
Section 6.05 Asset Sales. The Company will not, and will not permit any of its
Subsidiaries to, sell, transfer, lease or otherwise dispose of any asset,
including any Equity Interest owned by it, nor will the Company permit any of
its Subsidiaries to issue any additional Equity Interest in such Subsidiary,
except:
(a) sales, transfers, leases or other dispositions of inventory, used or surplus
equipment or equipment to Canadian franchisees and Permitted Investments, in
each case in the ordinary course of business and consistent with past
practice;
(b) sales, transfers and dispositions to the Company or a Subsidiary; provided
that any such sales, transfers or dispositions involving a Subsidiary that is
not a Loan Party shall be made in compliance with Section 6.09;
(c) sales, transfers and other dispositions of assets (other than Equity
Interests in a Subsidiary) that are not permitted by any other clause of this
Section; provided that the aggregate book value of all assets sold,
transferred or otherwise disposed of in reliance upon this clause (c) (which,
for the avoidance of doubt, does not include any Contemplated Sale/Leaseback
Transaction) during any fiscal year of the Company shall not exceed an amount
equal to the lesser of (x) ten percent (10%) of the Company's Consolidated Net
Tangible Assets as of the commencement of such fiscal year and (y) One Hundred
Million U.S. Dollars (U.S.$ 100,000,000);
(d) sales of assets pursuant to sale and leaseback transactions permitted by
Section 6.06; and
(e) any sale of the Eight O'Clock Coffee division assets described in the Asset
Purchase Agreement, dated as of October 19, 2003, naming EOC Acquisition Co.,
as purchaser, and the Company as Seller;
provided that all sales, transfers, leases and other dispositions permitted
hereby (other than those permitted by clauses (a) and (b) above) shall be made
for fair value and at least 80% cash consideration.
Section 6.06 Sale and Leaseback Transactions. The Company will not, and will not
permit any of its Subsidiaries to, enter into any arrangement, directly or
indirectly, whereby it shall sell or transfer any property, real or personal,
used or useful in its business, whether now owned or hereinafter acquired, and
thereafter rent or lease such property or other property that it intends to use
for substantially the same purpose or purposes as the property sold or
transferred, except (a) the Contemplated Sale/Leaseback Transaction, (b) any
such sale of any fixed or capital assets that is made for consideration having a
cash component in an amount not less than the cost of such fixed or capital
asset and is consummated within 180 days after the Company or such Subsidiary
acquires or completes the construction of such fixed or capital asset and (c)
any other such sale of fixed or capital assets, provided that the aggregate book
value of all assets sold after the Effective Date pursuant to this clause (c)
shall be subject to the limitation set forth in the proviso to clause (v) of
Section 6.01(a).
Section 6.07 Hedging Agreements. The Company will not, and will not permit any
of its Subsidiaries to, enter into any Hedging Agreement, other than Hedging
Agreements entered into in the ordinary course of business and consistent with
past practices of the Company to hedge or mitigate interest rate, currency
(which, for the avoidance of doubt, may fix either the U.S.$ or Cdn.$ exchange
rate) or energy exposure to which the Company or any Subsidiary is exposed in
the conduct of its business.
Section 6.08 Restricted Payments; Certain Payments of Indebtedness. (a) The
Company will not, nor will it permit any Subsidiary to, declare or make, or
agree to pay or make, directly or indirectly, any Restricted Payment, or incur
any obligation (contingent or otherwise) to do so, except (i) the Company may
declare and pay dividends with respect to its capital stock payable solely in
additional shares of its common stock and (ii) Subsidiaries may declare and pay
dividends ratably with respect to their capital stock.
(b) The Company will not, nor will it permit any Subsidiary to, make or agree to
pay or make, directly or indirectly, any payment or other distribution
(whether in cash, securities or other property), other than regularly
scheduled payments as and when due, in respect of principal of, or any payment
or other distribution (whether in cash, securities or other property),
including any sinking fund or similar deposit, on account of the purchase,
redemption, retirement, acquisition, cancellation or termination of, (i) any
debt securities issued pursuant to the Indenture, dated as of January 1, 1991,
between the Company and JPMorgan Chase Bank, as indenture trustee or (ii) any
other Indebtedness of the Company or any Subsidiary that is scheduled to
mature after the Maturity Date.
(c) Notwithstanding Section 6.08(b), so long as no Default has occurred and is
continuing or would result therefrom, the Borrowers may (i) retire the 2004
Notes at any time, (ii) (x) refinance, on terms and conditions satisfactory to
the Administrative Agents, with senior or subordinated unsecured indebtedness,
any of the 2007 Notes prior to the final maturity thereof, and (y) after no
less than ninety five percent (95%) of the 2007 Notes have been either (1)
refinanced on terms and conditions satisfactory to the Administrative Agents
with senior or subordinated unsecured indebtedness, or (2) prepaid, redeemed,
purchased, defeased or retired in accordance with paragraph (d) below,
refinance, on terms and conditions satisfactory to the Administrative Agents,
with senior or subordinated unsecured indebtedness, any of the 2011 Notes.
Although not exclusive, the Administrative Agents agree that terms and
conditions substantially similar to the 2011 Notes, at a then market rate of
interest, would be satisfactory to the Administrative Agents for the purposes
of transactions contemplated by this Section 6.08(c).
(d) Notwithstanding Section 6.08(b), the Borrowers may prepay, redeem, purchase,
defease or retire any of the 2007 Notes and up to U.S.$25,000,000 of other of
the Company's debt securities as long as (i) no Default has occurred or would
result therefrom, (ii) during the ninety (90) day period prior to (on a pro
forma basis) and the ninety (90) day period following (on a projected basis)
the date of such prepayment, redemption, purchase or retirement, both before
and after giving effect to such prepayment, redemption, purchase or
retirement, there shall be an actual or expected average Borrowing Base
Availability plus invested cash held by the Administrative Agents, which is
pledged as collateral and subject to a control agreement satisfactory to the
Administrative Agent, of at least U.S.$150,000,000, of which no more than
U.S.$50,000,000 may be invested cash held by the Administrative Agent, and
(iii) the aggregate amount of prepayments, redemptions, purchases or
retirements pursuant to this clause (d) of Indebtedness shall not exceed
U.S.$75,000,000 in any fiscal year and shall not exceed U.S.$255,000,000
during the Availability Period.
Section 6.09 Transactions with Affiliates. The Company will not, nor will it
permit any Subsidiary to, sell, lease or otherwise transfer any property or
assets to, or purchase, lease or otherwise acquire any property or assets from,
or otherwise engage in any other transactions with, any of its Affiliates,
except (a) transactions in the ordinary course of business at prices and on
terms and conditions not less favorable to the Company or such Subsidiary than
could be obtained on an arm's-length basis from unrelated third parties, or (b)
transactions between or among the Loan Parties not involving any other
Affiliate.
Section 6.10 Restrictive Agreements. The Company will not, nor will it permit
any Subsidiary to, directly or indirectly, enter into, incur or permit to exist
any agreement or other arrangement that prohibits, restricts or imposes any
condition upon (a) the ability of the Company or any Subsidiary to create, incur
or permit to exist any Lien securing Obligations or any refinancing thereof upon
any property or assets actually owned by it, or (b) the ability of any
Subsidiary to pay dividends or other distributions with respect to any shares of
its capital stock or to make or repay loans or advances to the Company or any
other Subsidiary or to Guarantee Indebtedness of the Company or any other
Subsidiary; provided that (i) the foregoing shall not apply to restrictions and
conditions imposed by law or by any Loan Document, (ii) the foregoing shall not
apply to customary provisions included in licenses, contracts, leases,
agreements and other instruments restricting assignment and/or encumbrance,
(iii) the foregoing shall not apply to customary restrictions and conditions
contained in agreements relating to the sale of a Subsidiary pending such sale,
provided such restrictions and conditions apply only to the Subsidiary that is
to be sold and such sale is permitted hereunder, (iv) clause (a) of the
foregoing shall not apply to restrictions or conditions imposed by any agreement
relating to secured Indebtedness permitted by this Agreement if such
restrictions or conditions apply only to the property or assets securing such
Indebtedness and (v) clause (a) of the foregoing shall not apply to customary
provisions in leases restricting the assignment thereof.
Section 6.11 Amendment of Material Documents. The Company will not, nor will it
permit any Subsidiary to, amend, modify or waive any of (a) the provisions of
its certificate of incorporation, by-laws or other organizational documents or
(b) its rights under other material documents, in the case of all of the
foregoing, in a manner materially adverse to the Lenders.
Section 6.12 Fixed Charge Coverage Ratio. Upon the reduction of Borrowing Base
Availability below Fifty Million U.S. Dollars (U.S.$50,000,000), the Company
will not permit the Consolidated Fixed Charges Ratio to be less than the ratio
of 1.00 to 1.00 from the date that Borrowing Base Availability is less than
Fifty Million U.S. Dollars (U.S.$50,000,000). From and after the ninetieth
consecutive day that Borrowing Base Availability has been at least equal to
Seventy-Five Million U.S. Dollars (U.S.$75,000,000), the Company will not be
obligated to maintain a 1.00 to 1.00 Consolidated Fixed Charges Ratio unless and
until the date that Borrowing Base Availability again falls below Fifty Million
U.S. Dollars (U.S.$50,000,000).
Section 6.13 [Reserved].
Section 6.14 [Reserved].
Section 6.15 Limitation on Change in Fiscal Year. The Company will not permit
its fiscal year to end on a date other than the last Saturday in the month of
February in each calendar year.
ARTICLE VII
Events of Default
If any of the following events ("Events of Default") shall
occur:
(a) any Borrower shall fail to pay any principal of any Loan or Acceptance
Obligation or any reimbursement obligation in respect of any L/C Disbursement
when and as the same shall become due and payable, whether at the due date
thereof or at a date fixed for prepayment thereof (including, as required
under Section 2.10(b)) or otherwise;
(b) any Borrower shall fail to pay any interest on any Loan or Acceptance
Obligation or any fee or any other amount (other than an amount referred to in
clause (a) of this Article) payable under this Agreement or any other Loan
Document, when and as the same shall become due and payable, and such failure
shall continue unremedied for a period of three Business Days;
(c) any representation or warranty made or deemed made by or on behalf of any
Borrower or any other Loan Party in or in connection with any Loan Document or
any amendment or modification thereof or waiver thereunder, or in any report,
certificate, financial statement or other document furnished pursuant to or in
connection with any Loan Document or any amendment or modification thereof or
waiver thereunder, shall prove to have been incorrect in any material respect
when made or deemed made;
(d) any Borrower shall fail to observe or perform any covenant, condition or
agreement contained in Sections 5.02, 5.04 (with respect to the existence of
any Borrower) or 5.11 or in Article VI;
(e) any Loan Party shall fail to observe or perform any covenant, condition or
agreement contained in any Loan Document (other than those specified in clause
(a), (b) or (d) of this Article), and such failure shall continue unremedied
for a period of 30 days after written notice thereof from either
Administrative Agent to the Company (which notice may be given at the request
of any Lender);
(f) the Company or any Subsidiary shall fail to make any payment (whether of
principal or interest and regardless of amount) in respect of any Material
Indebtedness, when and as the same shall become due and payable;
(g) any event or condition occurs that results in any Material Indebtedness
becoming due prior to its scheduled maturity or that enables or permits (after
the giving of notice and/or the lapse of any applicable grace period) the
holder or holders of any Material Indebtedness or any trustee or agent on its
or their behalf to cause any Material Indebtedness to become due, or to
require the prepayment, repurchase, redemption or defeasance thereof, prior to
its scheduled maturity; provided that this clause (g) shall not apply to
secured Indebtedness that becomes due as a result of the voluntary sale or
transfer of the property or assets securing such Indebtedness;
(h) an involuntary proceeding shall be commenced or an involuntary petition
shall be filed seeking (i) liquidation, reorganization or other relief in
respect of the Company or any Subsidiary or its debts, or of a substantial
part of its assets, under any Federal, state or foreign bankruptcy,
insolvency, receivership or similar law now or hereafter in effect or (ii) the
appointment of a receiver, trustee, custodian, sequestrator, conservator or
similar official for the Company or any Subsidiary or for a substantial part
of its assets, and, in any such case, such proceeding or petition shall
continue undismissed for 60 days or an order or decree approving or ordering
any of the foregoing shall be entered;
(i) the Company or any Subsidiary shall (i) voluntarily commence any proceeding
or file any petition seeking liquidation, reorganization or other relief under
any Federal, state or foreign bankruptcy, insolvency, receivership or similar
law now or hereafter in effect, (ii) consent to the institution of, or fail to
contest in a timely and appropriate manner, any proceeding or petition
described in clause (h) of this Article, (iii) apply for or consent to the
appointment of a receiver, trustee, custodian, sequestrator, conservator or
similar official for the Company or any Subsidiary or for a substantial part
of its assets, (iv) file an answer admitting the material allegations of a
petition filed against it in any such proceeding, (v) make a general
assignment for the benefit of creditors or (vi) take any action for the
purpose of effecting any of the foregoing;
(j) the Company or any Subsidiary shall become unable, admit in writing its
inability or fail generally to pay its debts as they become due;
(k) one or more judgments for the payment of money in an aggregate amount in
excess of U.S.$35,000,000 (or its equivalent) shall be rendered against the
Company, any Subsidiary or any combination thereof and the same shall remain
undischarged for a period of 30 consecutive days during which execution shall
not be effectively stayed, or any action shall be legally taken by a judgment
creditor to attach or levy upon any assets of the Company or any Subsidiary to
enforce any such judgment;
(l) a Pension Plan Event shall have occurred that, when taken together with all
other Pension Plan Events that have occurred, could reasonably be expected to
result in a Material Adverse Effect;
(m) any Lien purported to be created under any Security Document shall cease to
be, or shall be asserted by any Loan Party not to be, a valid and perfected
Lien on any material portion of the Collateral, with the priority required by
the applicable Security Document, except (i) as a result of the sale or other
disposition of the applicable Collateral in a transaction permitted under the
Loan Documents, (ii) as a result of a Collateral Agent's failure (x) to
maintain possession of any stock certificates, promissory notes or other
instruments delivered to it under a Pledge Agreement or (y) to file any
document delivered by the Loan Parties to it for filing or (iii) as a result
of a Collateral Agent's failure to take any action that the Company reasonably
requests, in writing, such Collateral Agent to take;
(n) a Change in Control shall occur; or
(o) any Loan Document shall not be in full force and effect;
then, and in every such event (other than an event with respect to a Borrower
described in clause (h) or (i) of this Article), and at any time thereafter
during the continuance of such event, the U.S. Administrative Agent may, and at
the request of the Required Lenders shall, by notice to the Company, take either
or both of the following actions, at the same or different times: (i) terminate
the Commitments, and thereupon the Commitments shall terminate immediately, and
(ii) declare the Loans and Acceptance Obligations then outstanding to be due and
payable in whole (or in part, in which case any principal not so declared to be
due and payable may thereafter be declared to be due and payable), and thereupon
the principal of the Loans and Acceptance Obligations so declared to be due and
payable, together with accrued interest thereon and all fees and other
obligations of the Borrowers accrued hereunder, shall become due and payable
immediately, without presentment, demand, protest or other notice of any kind,
all of which are hereby waived by each of the Borrowers; and in case of any
event with respect to any Borrower described in clause (h) or (i) of this
Article, the Commitments shall automatically terminate and the principal of the
Loans and Acceptance Obligations then outstanding, together with accrued
interest thereon and all fees and other obligations of the Borrowers accrued
hereunder, shall automatically become due and payable, without presentment,
demand, protest or other notice of any kind, all of which are hereby waived by
each of the Borrowers.
Solely for purposes of determining whether a Default has
occurred under clause (h), (i) or (j) of this Article VII, any reference in any
such clause to any "Subsidiary" shall be deemed not to include any Subsidiary
(after any such event referred to in such clauses, each such Subsidiary shall be
deemed an "Excluded Subsidiary") affected by any event or circumstance referred
to in any such clause that meets all the following conditions: (a) the Company's
direct and indirect investments in and advances to the Subsidiary is less than
1% of the total assets of the Company consolidated as of the end of the most
recently completed fiscal year; (b) the Company's direct and indirect
proportionate share of the total assets (after intercompany eliminations) of the
Subsidiary is less than 1% of the total assets of the Company consolidated as of
the end of the most recently completed fiscal year; and (c) the Company's direct
and indirect equity in the income from continuing operations before income
taxes, extraordinary items and cumulative effect of a change in accounting
principle of the Subsidiary is less than 1% of such income of the Company
consolidated for the most recently completed fiscal year; provided that (i) if
it is necessary to exclude more than one Subsidiary from clause (h) or (j) of
Article VII pursuant to this paragraph in order to avoid a Default thereunder,
all excluded Subsidiaries shall be considered to be a single consolidated
Subsidiary for purposes of determining whether the conditions specified in
clauses (a), (b) and (c) above are satisfied and (ii) a Subsidiary shall not be
excluded from clauses (h) and (j) of Article VII if such Subsidiary holds rights
under any long-term contracts for the purchase of inventory accounting for more
than 5% of the total inventory purchased by the Company and its Subsidiaries
during the most recent Calculation Period.
ARTICLE VIII
The Agents
Each of the Lenders and the Issuing Banks hereby irrevocably
appoints each of the Agents as its agent and authorizes the Agents to take such
actions on its behalf and to exercise such powers as are delegated to each such
Agent, respectively, by the terms of the Loan Documents, together with such
actions and powers as are reasonably incidental thereto.
Each bank serving as an Agent hereunder shall have the same
rights and powers in its capacity as a Lender as any other Lender and may
exercise the same as though it were not an Agent, and such bank and its
Affiliates may accept deposits from, lend money to and generally engage in any
kind of business with the Company or any Subsidiary or other Affiliate thereof
as if it were not an Agent hereunder.
No Agent shall have any duties or obligations except those
expressly set forth in the Loan Documents. Without limiting the generality of
the foregoing, (a) an Agent shall not be subject to any fiduciary or other
implied duties, regardless of whether a Default has occurred and is continuing,
(b) an Agent shall not have any duty to take any discretionary action or
exercise any discretionary powers, except discretionary rights and powers
expressly contemplated by the Loan Documents that such Agent is required to
exercise in writing by the Required Lenders (or such other number or percentage
of the Lenders as shall be necessary under the circumstances as provided in
Section 9.02), and (c) except as expressly set forth in the Loan Documents, an
Agent shall not have any duty to disclose, and shall not be liable for the
failure to disclose, any information relating to the Company or any Subsidiary
that is communicated to or obtained by the bank serving as an Agent or any of
its Affiliates in any capacity. An Agent shall not be liable for any action
taken or not taken by it with the consent or at the request of the Required
Lenders (or such other number or percentage of the Lenders as shall be necessary
under the circumstances as provided in Section 9.02) or in the absence of its
own gross negligence or willful misconduct. An Agent shall be deemed not to have
knowledge of any Default unless and until written notice thereof is given to
such Agent by a Borrower or a Lender, and an Agent shall not be responsible for
or have any duty to ascertain or inquire into (i) any statement, warranty or
representation made in or in connection with any Loan Document, (ii) the
contents of any certificate, report or other document delivered thereunder or in
connection therewith, (iii) the performance or observance of any of the
covenants, agreements or other terms or conditions set forth in any Loan
Document, (iv) the validity, enforceability, effectiveness or genuineness of any
Loan Document or any other agreement, instrument or document, or (v) the
satisfaction of any condition set forth in Article IV or elsewhere in any Loan
Document, other than to confirm receipt of items expressly required to be
delivered to such Agent.
Each Agent shall be entitled to rely upon, and shall not incur
any liability for relying upon, any notice, request, certificate, consent,
statement, instrument, document or other writing believed by it to be genuine
and to have been signed or sent by the proper Person. Each Agent also may rely
upon any statement made to it orally or by telephone and believed by it to be
made by the proper Person, and shall not incur any liability for relying
thereon. Each Agent may consult with legal counsel (who may be counsel for the
Borrowers), independent accountants and other experts selected by it, and shall
not be liable for any action taken or not taken by it in accordance with the
advice of any such counsel, accountants or experts.
Each Agent may perform any and all its duties and exercise its
rights and powers by or through any one or more sub-agents appointed by it. Each
Agent and any such subagent may perform any and all its duties and exercise its
rights and powers through their respective Related Parties. The exculpatory
provisions of the preceding paragraphs shall apply to any such sub-agent and to
the Related Parties of (i) each Agent and (ii) any such sub-agent, and shall
apply to their respective activities in connection with the syndication of the
credit facilities provided for herein as well as activities as Agent.
Subject to the appointment and acceptance of a successor Agent
as provided in this paragraph, an Agent may resign at any time by notifying the
Lenders, the other Agents, the Issuing Banks and the Company. Upon any such
resignation, the Required Lenders shall have the right, in consultation with the
Company, to appoint a successor. If no successor shall have been so appointed by
the Required Lenders and shall have accepted such appointment within 30 days
after the retiring Agent gives notice of its resignation, then such retiring
Agent may, on behalf of the Lenders and the Issuing Banks, appoint a successor
Agent which shall be a bank with an office in New York, New York, or Toronto,
Ontario, as applicable, or an Affiliate of any such bank. Upon the acceptance of
its appointment as Agent hereunder by a successor, such successor shall succeed
to and become vested with all the rights, powers, privileges and duties of the
retiring Agent, and such retiring Agent shall be discharged from its duties and
obligations hereunder. The fees payable by the Company to a successor Agent
shall be the same as those payable to its predecessor unless otherwise agreed
between the Company and such successor. After an Agent's resignation hereunder,
the provisions of this Article and Section 9.03 shall continue in effect for the
benefit of such retiring Agent, its sub-agents and their respective Related
Parties in respect of any actions taken or omitted to be taken by any of them
while it was acting as Agent.
Each Lender acknowledges that it has, independently and
without reliance upon the Agents or any other Lender and based on such documents
and information as it has deemed appropriate, made its own credit analysis and
decision to enter into this Agreement. Each Lender also acknowledges that it
will, independently and without reliance upon the Agents or any other Lender and
based on such documents and information as it shall from time to time deem
appropriate, continue to make its own decisions in taking or not taking action
under or based upon this Agreement, any other Loan Document or related agreement
or any document furnished hereunder or thereunder.
None of the rights or obligations of any Agent under any Loan
Document may be amended, supplemented or otherwise modified without the prior
written consent of such Agent and the Required Lenders.
ARTICLE IX
Miscellaneous
Section 9.01 Notices. Except in the case of notices and other communications
expressly permitted to be given by telephone, all notices and other
communications provided for herein shall be in writing and shall be delivered by
hand or overnight courier service, mailed by certified or registered mail or
sent by telecopy, as follows:
(a) if to any Borrower, to it in care of the Company at Two Paragon Drive,
Montvale, New Jersey 07645, Attention of the Treasurer (Telecopy No. (201)
571-8036);
(b) if to the U.S. Administrative Agent, to JPMorgan Chase Bank, Business Credit
Corp., 1166 Avenue of the Americas - 16th Floor, New York, New York 10036,
Attention of Maryann Lewis (Telecopy No. (212) 899-2929), with a copy to
JPMorgan Chase Bank, Business Credit Corp., 395 N. Service Road - 3rd Floor,
Melville, New York 11747, Attention of Patricia H. Garard (Telecopy No. (631)
755-8454);
(c) if to the Canadian Administrative Agent, to it at 200 Bay Street, Royal
Plaza South Tower, Suite 1800, Toronto, Ontario M5J2J2, Canada, Attention:
Funding Officer (Telecopy No. (416) 981-9128);
(d) if to the U.S. Issuing Bank, to it at Letters of Credit Department, JPMorgan
Chase Bank, Attention of Christine Siebel (Telecopy No. (718) 242- 6540);
(e) if to the Canadian Issuing Bank, to it at Royal Bank Plaza, 18th Floor,
Toronto, Ontario MFJ2J2, Canada, Attention of Christine Chan (Telecopy No.
(416) 381-9138); and
(f) if to a Lender, to it at its address (or telecopy number) set forth in its
Administrative Questionnaire.
Any party hereto may change its address or telecopy number for notices and other
communications hereunder by notice to the other parties hereto. All notices and
other communications given to any party hereto in accordance with the provisions
of this Agreement shall be deemed to have been given on the date of receipt.
Section 9.02 Waivers; Amendments. (a) No failure or delay by an Administrative
Agent, a Collateral Agent, an Issuing Bank or any Lender in exercising any right
or power hereunder or under any other Loan Document shall operate as a waiver
thereof, nor shall any single or partial exercise of any such right or power, or
any abandonment or discontinuance of steps to enforce such a right or power,
preclude any other or further exercise thereof or the exercise of any other
right or power. The rights and remedies of the Administrative Agents, the
Collateral Agents, the Issuing Banks and the Lenders hereunder and under the
other Loan Documents are cumulative and are not exclusive of any rights or
remedies that they would otherwise have. No waiver of any provision of any Loan
Document or consent to any departure by any Loan Party therefrom shall in any
event be effective unless the same shall be permitted by paragraph (b) of this
Section, and then such waiver or consent shall be effective only in the specific
instance and for the purpose for which given. Without limiting the generality of
the foregoing, the making of a Loan or issuance of an Acceptance or a Letter of
Credit shall not be construed as a waiver of any Default, regardless of whether
an Administrative Agent, a Collateral Agent, any Lender or an Issuing Bank may
have had notice or knowledge of such Default at the time.
(b) Neither this Agreement nor any other Loan Document nor any provision hereof
or thereof may be waived, amended or modified except, in the case of this
Agreement, pursuant to an agreement or agreements in writing entered into by
the Borrowers and the Required Lenders or, in the case of any other Loan
Document, pursuant to an agreement or agreements in writing entered into by
the Agent that is a party thereto and the Loan Party or Loan Parties that are
parties thereto, in each case with the consent of the Required Lenders;
provided that no such agreement shall (i) increase the Commitment of any
Lender without the written consent of such Lender, (ii) reduce the principal
amount of any Loan, Acceptance Obligation or unreimbursed L/C Disbursement or
reduce the rate of interest thereon, or reduce any fees payable hereunder,
without the written consent of each Lender affected thereby, (iii) postpone
the scheduled date of payment of the principal amount of any Loan under
Section 2.09, or date for the payment of any Acceptance Obligation, or the
required date of reimbursement of any L/C Disbursement, or any date for the
payment of any interest or fees payable hereunder, or reduce the amount of,
waive or excuse any such payment, or postpone the scheduled date of expiration
of any Commitment, without the written consent of each Lender affected
thereby, (iv) change Section 2.17(b) or (c) in a manner that would alter the
pro rata sharing of payments required thereby, without the written consent of
each Lender, (v) change any of the provisions of this Section or the
percentage set forth in the definition of "Required Lenders" or any other
provision of any Loan Document specifying the number or percentage of Lenders
(or Lenders of any Class) required to waive, amend or modify any rights
thereunder or make any determination or grant any consent thereunder, without
the written consent of each Lender (or each Lender of such Class, as the case
may be), (vi) directly or indirectly change any of the provisions of the
definitions of "Canadian Borrowing Base", "U.S. Borrowing Base", "Eligible
Inventory", "Eligible Coinstar Receivables", "Eligible Credit Card Accounts
Receivable", "Eligible Third Party Insurance Provider Accounts Receivable"
"Canadian Commitment", "Scripts" or "U.S. Commitment", in each case in a
manner adverse to the interests of the Lenders or in a manner that would make
more credit available to the Borrowers, without the written consent of the
Required Lenders (calculated for this purpose as though the percentage
specified in the definition of "Required Lenders" were 66-2/3% instead of
50%), (vii) increase the total U.S. Commitments or the total Canadian
Commitments (other than pursuant to a reallocation or consolidation of
Commitments in accordance with Section 2.08 or 2.21), without the written
consent of the Required Lenders (calculated for this purpose as though the
percentage specified in the definition of "Required Lenders" were 66-2/3%
instead of 50%), (viii) release any Loan Party from its Guarantee under the
applicable Guarantee Agreement (except as expressly provided in such Guarantee
Agreement), or limit its liability in respect of such Guarantee, without the
written consent of each Lender, (ix) release all or any substantial part of
the Collateral from the Liens of the Security Documents (except with respect
to sales or transfers of, and other transactions relating to, Collateral
permitted pursuant to the Loan Documents), without the written consent of each
Lender or (x) effect any waiver, amendment or modification that by its terms
affects the U.S. Lenders only without the prior written consent of a majority
in interest of the U.S. Lenders, or affects the Canadian Lenders only without
the prior written consent of a majority in interest of the Canadian Lenders or
affects the rights and interests of U.S. Lenders differently than those of
Canadian Lenders, or affects the rights and interests of Canadian Lenders
differently than those of U.S. Lenders, without in any such case the prior
written consent of a majority in interest of the U.S. Lenders and the Canadian
Lenders, as separate classes; provided further that no such agreement shall
amend, modify or otherwise affect the rights or duties of any Administrative
Agent or Issuing Bank or Collateral Agent without the prior written consent of
such Administrative Agent or Issuing Bank or Collateral Agent, as the case may
be. Notwithstanding the foregoing, any provision of this Agreement may be
amended by an agreement in writing entered into between the Borrowers, the
Required Lenders and the Administrative Agents (and, if their rights or
obligations are affected thereby, the Issuing Banks) if (i) by the terms of
such agreement the Commitment, L/C Exposure, and Acceptance Obligations of
each Lender not consenting to the amendment provided for therein shall, for
such Lender, terminate upon the effectiveness of such amendment and (ii) at
the time such amendment becomes effective, each Lender not consenting thereto
receives payment in full of the principal of and interest accrued on each Loan
and Acceptance Obligation owed to it and all other amounts owing to it or
accrued for its account under this Agreement.
Section 9.03 Expenses; Indemnity; Damage Waiver. (a) The U.S. Borrowers agree,
jointly and severally, and the Canadian Borrower agrees, to pay (i) on or before
the Effective Date, to the greatest extent possible, and after the Effective
Date, as necessary, all fees and reasonable out-of-pocket expenses (including,
without limitation, the fees and expenses incurred in connection with any field
examination and any appraisal of any of the Collateral) incurred by the
Administrative Agents, the Collateral Agents and their respective Affiliates,
including the reasonable fees, charges and disbursements of counsel for the
Administrative Agents and the Collateral Agents, in connection with the
syndication of the credit facilities provided for herein, the preparation,
execution, delivery and administration of the Loan Documents or any amendments,
supplements, modifications or waivers of the provisions thereof (whether or not
the transactions contemplated hereby or thereby shall be consummated), (ii) all
reasonable out-of-pocket expenses (including the reasonable and documented fees,
charges and disbursements of any counsel for the Administrative Agents, the
Collateral Agents, the Issuing Banks and/or any Lender) incurred by the Issuing
Banks in connection with the issuance, amendment, renewal or extension of any
Letter of Credit or any demand for payment thereunder and (iii) all
out-of-pocket expenses incurred by the Administrative Agents, the Collateral
Agents, the Issuing Banks or any Lender, including the reasonable fees, charges
and disbursements of any counsel for the Administrative Agents, the Collateral
Agents, the Issuing Banks or any Lender, in connection with the enforcement or
protection of their rights in connection with the Loan Documents, including
their rights under this Section, or in connection with the Loans made,
Acceptances created or Letters of Credit issued hereunder, including all such
out-of-pocket expenses (including the reasonable fees, charges and disbursements
of any counsel for the Administrative Agents, the Collateral Agents, the Issuing
Banks or any Lender) incurred during any workout, restructuring or negotiations
in respect of such Loans, Acceptances or Letters of Credit.
(b) The U.S. Borrowers agree, jointly and severally, and the Canadian Borrower
agrees, to indemnify the Administrative Agents, the Collateral Agents, the
Issuing Banks and each Lender, and each Related Party of any of the foregoing
Persons (each such Person being called an "Indemnitee") against, and hold each
Indemnitee harmless (on an after tax basis) from, any and all losses, claims,
damages, liabilities, costs and related expenses, including the reasonable
fees, charges and disbursements of any counsel for any Indemnitee, incurred by
or asserted against any Indemnitee arising out of, in connection with, or as a
result of (i) the execution or delivery of any Loan Document or any other
agreement or instrument contemplated hereby or thereby, the performance by the
parties to the Loan Documents of their respective obligations thereunder or
the consummation of the Transactions or any other transactions contemplated
hereby or thereby, (ii) any Loan, Acceptance or Letter of Credit or the use of
the proceeds therefrom (including any refusal by an Issuing Bank to honor a
demand for payment under a Letter of Credit if the documents presented in
connection with such demand do not strictly comply with the terms of such
Letter of Credit), (iii) any actual or alleged presence or release of
Hazardous Materials on or from any Mortgaged Property or any other property
currently or formerly owned or operated by the Company or any of its
subsidiaries, or any Environmental Liability related in any way to the Company
or any of its subsidiaries, or (iv) any actual or prospective claim,
litigation, investigation or proceeding relating to any of the foregoing,
whether based on contract, tort or any other theory and regardless of whether
any Indemnitee is a party thereto; provided that such indemnity shall not, as
to any Indemnitee, be available to the extent that such losses, claims,
damages, liabilities, costs or related expenses are determined by a court of
competent jurisdiction by final judgment to have resulted from the gross
negligence or willful misconduct of such Indemnitee.
(c) To the extent that the Borrowers fail to pay any amount required to be paid
by them to an Administrative Agent, a Collateral Agent or an Issuing Bank
under paragraph (a) or (b) of this Section, each Lender severally agrees to
pay to such Administrative Agent, such Collateral Agent or such Issuing Bank,
as the case may be, such Lender's pro rata share (determined as of the time
that the applicable unreimbursed expense or indemnity payment is sought) of
such unpaid amount; provided that the unreimbursed expense or indemnified
loss, claim, damage, liability or related expense, as the case may be, was
incurred by or asserted against such Administrative Agent, such Collateral
Agent or such Issuing Bank in its capacity as such. For purposes hereof, a
Lender's "pro rata share" shall be determined based upon its share of the sum
of the aggregate amount of the total Commitments at the time.
(d) To the extent permitted by applicable law, none of the Borrowers shall
assert, and each of the Borrowers hereby waives, any claim against any
Indemnitee, on any theory of liability, for special, indirect, consequential
or punitive damages (as opposed to direct or actual damages) arising out of,
in connection with, or as a result of, this Agreement or any agreement or
instrument contemplated hereby, the Transactions, any Loan, Acceptance or
Letter of Credit or the use of the proceeds thereof.
(e) All amounts due under this Section shall be payable promptly after written
demand therefor.
Section 9.04 Successors and Assigns. (a) The provisions of this Agreement shall
be binding upon and inure to the benefit of the parties hereto and their
respective successors and assigns permitted hereby (including any Affiliate of
an Issuing Bank that issues any Letter of Credit), except that no Borrower may
assign or otherwise transfer any of its rights or obligations hereunder without
the prior written consent of each of the Lenders (and any attempted assignment
or transfer by a Borrower without such consent shall be null and void). Nothing
in this Agreement, expressed or implied, shall be construed to confer upon any
Person (other than the parties hereto, their respective successors and assigns
permitted hereby (including any Affiliate of an Issuing Bank that issues any
Letter of Credit) and, to the extent expressly contemplated hereby, the Related
Parties of each of the Administrative Agents, the Collateral Agents, the Issuing
Banks and the Lenders) any legal or equitable right, remedy or claim under or by
reason of this Agreement. The Administrative Agent also shall indicate in the
Register the Maturity Date applicable to each Lender and its Commitments and
Loans.
(b) Each Lender may assign to one or more assignees all or a portion of its
rights and obligations under this Agreement (including all or a portion of its
Commitment, the Loans and Acceptance Obligations at the time owing to it and
its participation in Letters of Credit); provided that (i) except in the case
of an assignment to a Lender or an Affiliate of a Lender, each of the Company,
the Administrative Agents and the Issuing Banks must give their prior written
consent to such assignment (which consents shall not be unreasonably
withheld), (ii) except in the case of an assignment of the entire remaining
amount of the assigning Lender's Commitment, the amount of the Commitment of
the assigning Lender to be assigned to an assignee other than a Lender or an
Affiliate of a Lender pursuant to each such assignment (determined as of the
date the Assignment and Acceptance with respect to such assignment is
delivered to the applicable Administrative Agent) shall not be less than
U.S.$5,000,000 unless each of the Company and the applicable Administrative
Agent otherwise consent to a lesser amount, (iii) each partial assignment
shall be made as an assignment of a proportionate part of all the assigning
Lender's rights and obligations under this Agreement, except that this clause
(iii) shall not be construed to prohibit the assignment of a proportionate
part of all the assigning Lender's rights and obligations in respect of one
Class of Commitments or Loans, (iv) the parties to each such assignment shall
execute and deliver to the applicable Administrative Agent an Assignment and
Acceptance, together with a processing and recordation fee of U.S.$3,500, in
the case of fees payable to the U.S. Administrative Agent, or Cdn.$4,500, in
the case of fees payable to the Canadian Administrative Agent (except such fee
shall not be payable in the case of an assignment by any Lender to any of its
affiliates or an assignment pursuant to Sections 2.08 or 2.18) and (v) the
assignee, if it shall not be a Lender, shall deliver to the applicable
Administrative Agent an Administrative Questionnaire; and provided further
that any consent of the Company otherwise required under this paragraph shall
not be required if a Default has occurred and is continuing. Subject to
acceptance and recordation in the Register pursuant to paragraph (d) of this
Section, from and after the effective date specified in each Assignment and
Acceptance, which effective date shall be at least five U.S. Business Days
(or, if the assignee is a Canadian Lender, five Canadian Business Days) after
the execution and recordation thereof, the assignee thereunder shall be a
party hereto and, to the extent of the interest assigned by such Assignment
and Acceptance, have the rights and obligations of a Lender under this
Agreement, and the assigning Lender thereunder shall, to the extent of the
interest assigned by such Assignment and Acceptance, be released from its
obligations under this Agreement (and, in the case of an Assignment and
Acceptance covering all the assigning Lender's rights and obligations under
this Agreement such Lender shall cease to be a party hereto but shall continue
to be entitled to the benefits of Sections 2.14, 2.15, 2.16 and 9.03). Any
assignment or transfer by a Lender of rights or obligations under this
Agreement that does not comply with this paragraph shall be treated for
purposes of this Agreement as a sale by such Lender of a participation in such
rights and obligations in accordance with paragraph (e) of this Section.
(c) The Canadian Administrative Agent shall furnish to the U.S. Administrative
Agent a copy of each Assignment and Acceptance with respect to a Canadian
Commitment. The U.S. Administrative Agent, acting for this purpose as an agent
of the Borrowers, shall maintain at one of its offices in The City of New York
a copy of each Assignment and Acceptance delivered to it and a register for
the recordation of the names and addresses of the Lenders, and the Commitment
of, and principal amount of the Loans and Acceptance Obligations and L/C
Disbursements owing to, each Lender pursuant to the terms hereof from time to
time (the "Register"). The entries in the Register shall be conclusive, and
the Borrowers, the Administrative Agents, the Issuing Banks and the Lenders
may treat each Person whose name is recorded in the Register pursuant to the
terms hereof as a Lender hereunder for all purposes of this Agreement,
notwithstanding notice to the contrary. The Register shall be available for
inspection by the Borrowers, the Issuing Banks and any Lender, at any
reasonable time and from time to time upon reasonable prior notice.
(d) Upon its receipt of a duly completed Assignment and Acceptance executed by
an assigning Lender and an assignee, the assignee's completed Administrative
Questionnaire (unless the assignee shall already be a Lender hereunder), the
processing and recordation fee referred to in paragraph (b) of this Section
and any written consent to such assignment required by paragraph (b) of this
Section, the applicable Administrative Agent shall accept such Assignment and
Acceptance and record the information contained therein in the Register. No
assignment shall be effective for purposes of this Agreement unless it has
been recorded in the Register as provided in this paragraph.
(e) Any Lender may, without the consent of the Borrowers, the Administrative
Agents, the Collateral Agents or the Issuing Banks, sell participations to one
or more banks or other entities (a "Participant") in all or a portion of such
Lender's rights and obligations under this Agreement (including all or a
portion of its Commitment and the Loans owing to it); provided that (i) such
Lender's obligations under this Agreement shall remain unchanged, (ii) such
Lender shall remain solely responsible to the other parties hereto for the
performance of such obligations and (iii) the Borrowers, the Administrative
Agents, the Collateral Agents, the Issuing Banks and the other Lenders shall
continue to deal solely and directly with such Lender in connection with such
Lender's rights and obligations under this Agreement. Any agreement or
instrument pursuant to which a Lender sells such a participation shall provide
that such Lender shall retain the sole right to enforce the Loan Documents and
to approve any amendment, supplement, modification or waiver of any provision
of the Loan Documents; provided that such agreement or instrument may provide
that such Lender will not, without the consent of the Participant, agree to
any amendment, supplement, modification or waiver described in the first
proviso to Section 9.02(b) that affects such Participant. Subject to paragraph
(f) of this Section, each Borrower agrees that each Participant shall be
entitled to the benefits of Sections 2.14, 2.15 and 2.16 to the same extent as
if it were a Lender and had acquired its interest by assignment pursuant to
paragraph (b) of this Section. To the extent permitted by law, each
Participant also shall be entitled to the benefits of Section 9.08 as though
it were a Lender, provided such Participant agrees to be subject to Section
2.17(c) as though it were a Lender.
(f) A Participant shall not be entitled to receive any greater payment under
Section 2.14 or 2.16 than the applicable Lender would have been entitled to
receive with respect to the participation sold to such Participant, unless the
sale of the participation to such Participant is made with a Borrower's prior
written consent. A Participant that would be a Non-U.S. Lender or a
Non-Canadian Lender if it were a Lender shall not be entitled to the benefits
of Section 2.16 unless the Company is notified of the participation sold to
such Participant and such Participant agrees, for the benefit of the
Borrowers, to comply with Section 2.16(e) as though it were a Lender.
(g) Any Lender may at any time grant, pledge, hypothecate or assign a security
interest in all or any portion of its rights under this Agreement to secure
obligations of such Lender, including any grant, pledge, hypothecation or
assignment to secure obligations to a Federal Reserve Bank, and none of the
restrictions or conditions set forth in this Section 9.04 related to any such
grant, pledge, hypothecation or assignment shall apply to any such grant,
pledge, hypothecation or assignment of a security interest; provided that no
such grant, pledge, hypothecation or assignment of a security interest shall
release a Lender from any of its obligations hereunder or substitute any such
grantee, pledge, hypothecatee or assignee for such Lender as a party hereto.
Section 9.05 Survival. All covenants, agreements, representations and warranties
made by the Loan Parties in the Loan Documents and in the certificates or other
instruments delivered in connection with or pursuant to this Agreement or any
other Loan Document shall be considered to have been relied upon by the other
parties hereto and shall survive the execution and delivery of the Loan
Documents and the making of any Loans, the acceptance of any Acceptances and
issuance of any Letters of Credit, regardless of any investigation made by any
such other party or on its behalf and notwithstanding that an Administrative
Agent, a Collateral Agent, an Issuing Bank or any Lender may have had notice or
knowledge of any Default or incorrect representation or warranty at the time any
credit is extended hereunder, and shall continue in full force and effect as
long as the principal of or any accrued interest on any Loan or any fee or any
other amount payable under this Agreement is outstanding and unpaid or any
Letter of Credit or Acceptance Obligations is outstanding and so long as the
Commitments have not expired or terminated. The provisions of Sections 2.14,
2.15, 2.16 and 9.03 and Article VIII shall survive and remain in full force and
effect regardless of the consummation of the transactions contemplated hereby,
the repayment of the Loans and Acceptance Obligations, the expiration or
termination of the Letters of Credit and the Commitments or the termination of
this Agreement or any provision hereof.
Section 9.06 Counterparts; Integration; Effectiveness. This Agreement may be
executed in counterparts (and by different parties hereto on different
counterparts), each of which shall constitute an original, but all of which when
taken together shall constitute a single contract. This Agreement, the other
Loan Documents and any separate letter agreements with respect to fees payable
to the Administrative Agents constitute the entire contract among the parties
relating to the subject matter hereof and supersede any and all previous
agreements and understandings, oral or written, relating to the subject matter
hereof. Except as provided in Section 4.01, this Agreement shall become
effective when it shall have been executed by each of the Administrative Agents
and when the U.S. Administrative Agent shall have received counterparts hereof
which, when taken together, bear the signatures of each of the other parties
hereto, and thereafter shall be binding upon and inure to the benefit of the
parties hereto and their respective successors and assigns. Delivery of an
executed counterpart of a signature page of this Agreement by telecopy shall be
effective as delivery of a manually executed counterpart of this Agreement.
Section 9.07 Severability. Any provision of this Agreement held to be invalid,
illegal or unenforceable in any jurisdiction shall, as to such jurisdiction, be
ineffective to the extent of such invalidity, illegality or unenforceability
without affecting the validity, legality and enforceability of the remaining
provisions hereof; and the invalidity of a particular provision in a particular
jurisdiction shall not invalidate such provision in any other jurisdiction.
Section 9.08 Right of Setoff. If one or more Events of Default shall have
occurred and be continuing, each Lender shall have the right, in addition to and
not in limitation of any right which any such Lender may have under applicable
law or otherwise, to set off and apply any and all deposits (general or special,
time or demand, provisional or final) at any time held and other obligations at
any time owing by such Lender or its Affiliates to or for the credit or the
account of any of the Borrowers against any of and all the obligations of any of
the Borrowers now or hereafter existing under this Agreement and the other Loan
Documents held by such Lender, irrespective of whether or not such Lender shall
have made any demand under this Agreement or such other Loan Document and
although such obligations may be unmatured. The rights of each Lender under this
Section 9.08 are in addition to other rights and remedies (including other
rights of setoff) which such Lender may have.
Section 9.09 GOVERNING LAW; Jurisdiction; Consent to Service of Process. (a)
THIS AGREEMENT SHALL BE CONSTRUED IN ACCORDANCE WITH AND GOVERNED BY THE LAW OF
THE STATE OF NEW YORK (EXCEPT FOR THE CONFLICT OF LAWS RULES THEREOF, BUT
INCLUDING GENERAL OBLIGATIONS LAW SECTIONS 5-1401 AND 5-1402).
(b) Each of the Borrowers hereby irrevocably and unconditionally submits, for
itself and its property, to the nonexclusive jurisdiction of the Supreme Court
of the State of New York sitting in New York County and of the United States
District Court of the Southern District of New York, and any appellate court
from any thereof, in any action or proceeding arising out of or relating to
any Loan Document, or for recognition or enforcement of any judgment, and each
of the parties hereto hereby irrevocably and unconditionally agrees that all
claims in respect of any such action or proceeding may be heard and determined
in such New York State or, to the extent permitted by law, in such Federal
court. Each of the parties hereto agrees that a final judgment in any such
action or proceeding shall be conclusive and may be enforced in other
jurisdictions by suit on the judgment or in any other manner provided by law.
Nothing in this Agreement or any other Loan Document shall affect any right
that an Administrative Agent, a Collateral Agent, an Issuing Bank or any
Lender may otherwise have to bring any action or proceeding relating to this
Agreement or any other Loan Document against any of the Borrowers or their
respective properties in the courts of any jurisdiction.
(c) Each of the Borrowers hereby irrevocably and unconditionally waives, to the
fullest extent it may legally and effectively do so, any objection which it
may now or hereafter have to the laying of venue of any suit, action or
proceeding arising out of or relating to this Agreement or any other Loan
Document in any court referred to in paragraph (b) of this Section. Each of
the parties hereto hereby irrevocably waives, to the fullest extent permitted
by law, the defense of an inconvenient forum to the maintenance of such action
or proceeding in any such court.
(d) Each party to this Agreement irrevocably consents to service of process in
the manner provided for notices in Section 9.01. Nothing in this Agreement or
any other Loan Document will affect the right of any party to this Agreement
to serve process in any other manner permitted by law.
Section 9.10 WAIVER OF JURY TRIAL. EACH PARTY HERETO HEREBY WAIVES, TO THE
FULLEST EXTENT PERMITTED BY APPLICABLE LAW, ANY RIGHT IT MAY HAVE TO A TRIAL BY
JURY IN ANY LEGAL PROCEEDING DIRECTLY OR INDIRECTLY ARISING OUT OF OR RELATING
TO THIS AGREEMENT, ANY OTHER LOAN DOCUMENT OR THE TRANSACTIONS CONTEMPLATED
HEREBY (WHETHER BASED ON CONTRACT, TORT OR ANY OTHER THEORY). EACH PARTY HERETO
(A) CERTIFIES THAT NO REPRESENTATIVE, AGENT OR ATTORNEY OF ANY OTHER PARTY HAS
REPRESENTED, EXPRESSLY OR OTHERWISE, THAT SUCH OTHER PARTY WOULD NOT, IN THE
EVENT OF LITIGATION, SEEK TO ENFORCE THE FOREGOING WAIVER AND (B) ACKNOWLEDGES
THAT IT AND THE OTHER PARTIES HERETO HAVE BEEN INDUCED TO ENTER INTO THIS
AGREEMENT BY, AMONG OTHER THINGS, THE MUTUAL WAIVERS AND CERTIFICATIONS IN THIS
SECTION.
Section 9.11 Headings. Article and Section headings and the Table of Contents
used herein are for convenience of reference only, are not part of this
Agreement and shall not affect the construction of, or be taken into
consideration in interpreting, this Agreement.
Section 9.12 Confidentiality. Each of the Administrative Agents, the Collateral
Agents, the Issuing Banks and the Lenders agrees to maintain the confidentiality
of the Information (as defined below) except that Information may be disclosed
(a) to its and its Affiliates' directors, officers, employees and agents,
including accountants, legal counsel and other advisors (it being understood
that the Persons to whom such disclosure is made will be informed of the
confidential nature of such Information and instructed to keep such Information
confidential), (b) to the extent requested by any regulatory authority, (c) to
the extent required by applicable laws or regulations or by any subpoena or
similar legal process, (d) to any other party to this Agreement, (e) in
connection with the exercise of any remedies hereunder or any suit, action or
proceeding relating to this Agreement or any other Loan Document or the
enforcement of rights hereunder or thereunder, (f) subject to an agreement
containing provisions substantially the same as those of this Section, to any
assignee of or Participant in, or any prospective assignee of or Participant in,
any of its rights or obligations under this Agreement, (g) with the consent of
the Company or the Canadian Borrower or (h) to the extent such Information (i)
becomes publicly available other than as a result of a breach of this Section or
(ii) becomes available to an Administrative Agent, a Collateral Agent, an
Issuing Bank or any Lender on a nonconfidential basis from a source other than
the Borrowers. For the purposes of this Section, "Information" means all
information received from any of the Borrowers relating to the Borrowers or
their business, other than any such information that is available to an
Administrative Agent, a Collateral Agent, an Issuing Bank or any Lender on a
nonconfidential basis prior to disclosure by any of the Borrowers; provided
that, in the case of information received from a Borrower after the date hereof,
such information is clearly identified at the time of delivery as confidential.
Any Person required to maintain the confidentiality of Information as provided
in this Section shall be considered to have complied with its obligation to do
so if such Person has exercised the same degree of care to maintain the
confidentiality of such Information as such Person would accord to its own
confidential information.
Notwithstanding anything herein to the contrary, to the extent not
inconsistent with applicable securities laws, a Lender or potential Lender (and
each employee, representative, or other agent of such person or entity) may
disclose to any and all persons, without limitation, the tax treatment and tax
structure of the transaction (as defined in United States Treasury Regulation
Section 1.6011-4) contemplated herein and all related materials of any kind,
including opinions or other tax analyses, that are provided to such person or
entity. However, such person or entity may not disclose any other information
relating to this transaction (as defined in United States Treasury Regulation
Section 1.6011-4) unless such information is related to such tax treatment and
tax structure.
Section 9.13 Interest Rate Limitation. Notwithstanding anything herein to the
contrary, if at any time the interest rate applicable to any Loan, together with
all fees, charges and other amounts which are treated as interest on such Loan
under applicable law (collectively, the "Charges"), shall exceed the maximum
lawful rate (the "Maximum Rate") which may be contracted for, charged, taken,
received or reserved by the Lender holding such Loan in accordance with
applicable law, the rate of interest payable in respect of such Loan hereunder,
together with all Charges payable in respect thereof, shall be limited to the
Maximum Rate and, to the extent lawful, the interest and Charges that would have
been payable in respect of such Loan but were not payable as a result of the
operation of this Section shall be cumulated and the interest and Charges
payable to such Lender in respect of other Loans or periods shall be increased
(but not above the Maximum Rate therefor) until such cumulated amount, together
with interest thereon at the Federal Funds Effective Rate (or, in the case of
amounts denominated in Canadian Dollars, the rate from time to time determined
by the Canadian Administrative Agent to represent its cost of overnight Canadian
Dollars) to the date of repayment, shall have been received by such Lender.
[Amended and Restated Credit Agreement]
IN WITNESS WHEREOF, the parties hereto have caused this
Agreement to be duly executed by their respective authorized officers as of the
day and year first above written.
THE GREAT ATLANTIC & PACIFIC TEA COMPANY, INC.
/s/ Mitchell P. Goldstein
------------------------------------------------
Mitchell P. Goldstein
Senior Vice President, Chief Financial Officer
THE GREAT ATLANTIC & PACIFIC COMPANY OF CANADA, LIMITED
/s/ Mitchell P. Goldstein
-------------------------------------------------
Mitchell P. Goldstein
Treasurer
JPMORGAN CHASE BANK, as U.S. Administrative Agent
/s/ Robert J. Morrow
------------------------------------------------
Robert J. Morrow
Vice President
JPMORGAN CHASE BANK, TORONTO BRANCH,
as Canadian Administrative Agent
/s/ Drew McDonald
------------------------------------------------
Drew McDonald
Vice President
JPMORGAN BUSINESS CREDIT CORP., as Arranger
/s/ Robert J. Morrow
------------------------------------------------
Robert J. Morrow
Director
COMPASS FOODS, INC.
/s/ Mitchell P. Goldstein
------------------------------------------------
Mitchell P. Goldstein
Vice President
BORMAN'S, INC.
/s/ Mitchell P. Goldstein
------------------------------------------------
Mitchell P. Goldstein
Vice President
SHOPWELL, INC.
/s/ Mitchell P. Goldstein
------------------------------------------------
Mitchell P. Goldstein
Vice President
WALDBAUM, INC.
/s/ Mitchell P. Goldstein
------------------------------------------------
Mitchell P. Goldstein
Vice President
SUPER FRESH FOOD MARKETS, INC.
/s/ Mitchell P. Goldstein
------------------------------------------------
Mitchell P. Goldstein
Vice President
SUPER MARKET SERVICE CORP.
/s/ Mitchell P. Goldstein
------------------------------------------------
Mitchell P. Goldstein
Vice President
SUPER FRESH/SAV-A-CENTER, INC.
/s/ Mitchell P. Goldstein
----------------------------------------------
Mitchell P. Goldstein
Vice President
FOOD BASICS, INC.
/s/ Mitchell P. Goldstein
---------------------------------------------
Mitchell P. Goldstein
Vice President
JPMORGAN CHASE BANK, as a Lender party hereto
/s/ Robert J. Morrow
------------------------------------------------
Robert J. Morrow
Vice President
JPMORGAN CHASE BANK, TORONTO BRANCH,
as a Lender party hereto
/s/ Drew McDonald
----------------------------------------------
Drew McDonald
Vice President
AMSOUTH BANK, as a Lender party hereto
/s/ Frank Marsicano
------------------------------------------------
Frank Marsicano
Attorney in Fact
THE CIT GROUP/BUSINESS CREDIT, INC.,
as a Lender party hereto
/s/ Gary Prager
-----------------------------------------------
Gary Prager
Executive Vice President
CONGRESS FINANCIAL CORPORATION,
as a Lender party hereto
/s/ Robert H. Milhorat
-----------------------------------------------
Robert H. Milhorat
Vice President
FLEET CAPITAL CORPORATION, as a Lender party hereto
/s/ Michael Kerneklian
-------------------------------------------------
Michael Kerneklian
Vice President
GENERAL ELECTRIC CAPITAL CORPORATION,
as a Lender party hereto
/s/ Stephen M. Metivier
-----------------------------------------------
Stephen M. Metivier
Duly Authorized Signatory
GENERAL ELECTRIC CAPITAL CANADA INC.
/s/ Stephen B. Smith
------------------------------------------------
Stephen B. Smith
Duly Authorized Signatory
GMAC COMMERCIAL FINANCE LLC, as a Lender party hereto
/s/ W. Wakefield Smith
-------------------------------------------------
W. Wakefield Smith
Director
GMAC COMMERCIAL FINANCE CORPORATION - CANADA
/s/ W. Wakefield Smith
-----------------------------------------------
W. Wakefield Smith
Director
HSBC BUSINESS CREDIT (USA) INC.,
as a Lender party hereto
/s/ Jimmy Schwartz
----------------------------------------------
Jimmy Schwartz
Vice President
HSBC BANK USA, TORONTO BRANCH
/s/ Peter Leenaars
-----------------------------------------------
Peter Leenaars
Senior Manager
LASALLE BUSINESS CREDIT, a division of
ABN AMRO Bank N.V., Canada Branch
/s/ Aaron Turner
------------------------------------------------
Aaron Turner
First Vice President
/s/ Keith Hughes
----------------------------------------------
Keith Hughes
Senior Vice President
RZB FINANCE LLC, as a Lender party hereto
/s/ Frank J. Yautz
------------------------------------------------
Frank J. Yautz
First Vice President
/s/ Eric Salat
-----------------------------------------------
Eric Salat
Group Vice President
SIEMENS FINANCIAL SERVICES, INC., as a Lender
party hereto
/s/ Frank Amodio
---------------------------------------------
Frank Amodio
Vice President - Credit
UBS AG, STAMFORD BRANCH, as a Lender party hereto
/s/ Wilfred V. Saint
------------------------------------------------
Wilfred V. Saint
Associate Director
Banking Products Services, US
/s/ Thomas R. Salzano
-----------------------------------------------
Thomas R. Salzano
Director
Banking Products Services, US
THE BANK OF NEW YORK, as a Lender party hereto
/s/ Lucille C. Madden
----------------------------------------------
Lucille C. Madden
Vice President
WELLS FARGO FOOTHILL, as a Lender party hereto
/s/ Eunnie Kim
------------------------------------------------
Eunnie Kim
Assistant Vice President
WHITEHALL BUSINESS CREDIT CORP.,
as a Lender party hereto
/s/ Alan F. McKay
------------------------------------------------
Alan F. McKay
Vice President