EXHIBIT 10.1
CREDIT AGREEMENT
dated as of
June 20, 2003
among
PASUG LLC
GUSAP PARTNERS
GERDAU AMERISTEEL SAYREVILLE INC.
GERDAU AMERISTEEL PERTH AMBOY INC.
GERDAU AMERISTEEL US INC.
GERDAU AMERISTEEL LAKE ONTARIO INC.
GERDAU AMERISTEEL DISTRIBUTION US INC.
PORTER BROS. CORPORATION
MFT ACQUISITION, CORP.
as the US Borrowers
and
GERDAU AMERISTEEL CORPORATION
GERDAU AMERISTEEL MRM SPECIAL SECTIONS INC.
GERDAU AMERISTEEL DISTRIBUTION CANADA LTD.
GERDAU AMERISTEEL CAMBRIDGE INC.
as the Canadian Borrowers
and
THE CIT GROUP/BUSINESS CREDIT, INC.,
as the Administrative Agent, the Collateral Agent
and the Co-Lead Arranger
and
CIT BUSINESS CREDIT CANADA INC.,
as the Canadian Administrative Agent, the Canadian Collateral Agent
and the Co-Lead Arranger
and
BANK OF AMERICA, N.A. (ACTING THROUGH ITS CANADIAN BRANCH),
as the Syndication Agent
and
BANC OF AMERICA SECURITIES, LLC
as the Co-Lead Arranger and Co-Book Runner
and
J.P. MORGAN SECURITIES INC.,
as the Co-Documentation Agent and the Co-Book Runner
and
GE CANADA FINANCE INC.,
as the Co-Documentation Agent
and
FINANCIAL INSTITUTIONS,
NOW OR HEREAFTER PARTIES HERETO
as the Lenders
MULTI-CURRENCY REVOLVING CREDIT FACILITY
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CREDIT AGREEMENT
THIS CREDIT AGREEMENT (this "AGREEMENT") is made and entered
into as of the 20th day of June, 2003, among Gerdau Ameristeel Corporation, an
Ontario corporation (the "COMPANY"), Gerdau Ameristeel MRM Special Sections
Inc., a Saskatchewan corporation ("MRM SPECIAL SECTIONS"), Gerdau Ameristeel
Distribution Canada Ltd., an Ontario corporation ("DISTRIBUTION"), Gerdau
Ameristeel Cambridge Inc., a Saskatchewan corporation ("CAMBRIDGE", and
collectively with the Company, MRM Special Sections and Distribution, the
"CANADIAN BORROWERS", and individually, a "CANADIAN BORROWER ), GUSAP Partners,
a Delaware general partnership ("GUSAP"), PASUG LLC, a Delaware limited
liability company ("PASUG"), Gerdau Ameristeel Sayreville Inc., a Delaware
corporation ("SAYREVILLE"), Gerdau Ameristeel Perth Amboy Inc., a New Jersey
corporation ("PERTH AMBOY"), Gerdau Ameristeel U.S. Inc., a Florida corporation
("AMERISTEEL U.S."), Gerdau Ameristeel Lake Ontario Inc., a Delaware corporation
("LAKE ONTARIO"), Gerdau Ameristeel Distribution US Inc., a Delaware corporation
("DISTRIBUTION US"), Porter Bros. Corporation, a North Dakota corporation
("PORTER BROS."), MFT Acquisition, Corp., a Delaware corporation ("MFT", and
collectively with GUSAP, PASUG, Sayreville, Perth Amboy, Ameristeel U.S., Lake
Ontario, Distribution US and Porter Bros., the "U.S. BORROWERS" and
individually, a "U.S. BORROWER"; the US Borrowers and the Canadian Borrower are
together referred to herein as the "BORROWERS" and individually, a "BORROWER"),
The CIT Group/Business Credit, Inc., as the Administrative Agent, the Collateral
Agent and Co-Lead Arranger, CIT Business Credit Canada Inc., as the Canadian
Administrative Agent, the Canadian Collateral Agent and Co-Lead Arranger, Bank
of America, N.A., as Syndication Agent, Banc of America Securities, LLC., as
Co-Lead Arranger and Co-Book Runner, J.P. Morgan Securities Inc., as
Co-Documentation Agent and Co-Book Runner, GE Canada Finance Inc., as
Co-Documentation Agent, the Issuing Banks (as defined below), each additional
Issuing Bank hereunder from time to time, and each of the lenders that is a
signatory hereto or which hereafter becomes a party hereto as provided in
Section 10.7, including the US Swingline Lender and the Canadian Swingline
Lender (as defined below) (individually, a "LENDER" and, collectively, the
"LENDERS").
RECITALS:
WHEREAS, the Borrowers have requested that the Lenders extend
to the Borrowers a revolving credit facility of up to U.S.$350,000,000; and
WHEREAS, the Lenders have agreed to extend such revolving
credit facility to the Borrowers subject to and upon the terms and conditions of
this Agreement.
AGREEMENTS:
In consideration of the mutual covenants and agreements herein
contained, the Borrowers, the Lenders, the Issuing Banks and the Agents hereby
agree as follows:
ARTICLE 1
DEFINITIONS; CONSTRUCTION
SECTION 1.1 DEFINITIONS. As used herein, the following terms shall have the
meanings herein specified (to be equally applicable to both the singular and
plural forms of the terms defined). Reference to any party in a Financing
Document means that party and its successors and permitted assigns.
"144A INDENTURE" means that certain Indenture, to be dated on
or about June 26, 2003, by and among the Company, GUSAP, the Subsidiary
Guarantors (as defined therein) and SouthTrust Bank, as amended, supplemented or
otherwise modified or restated from time to time.
"144A NOTES" means the unsecured senior notes in a principal
amount of U.S.$405,000,000 issued pursuant to the 144A Indenture.
"144A TRANSACTION" means the issuance by the Company and GUSAP
of unsecured senior notes in a principal amount of U.S.$405,000,000 pursuant to
and as more particularly described in the 144A Indenture.
"65% ADVANCE RATE PERIOD" means the period commencing on the
Closing Date and ending on the earlier of (a) the date which is nine (9) months
following the Closing Date and (b) the date on which an inventory appraisal,
obtained in accordance with Section 2.29, is provided to the Administrative
Agent and the Canadian Administrative Agent, which inventory appraisal evidences
that the appraised net recovery value of the Canadian Borrowers' Eligible
Inventory and each US Operating Borrower's Eligible Inventory, determined by
reference to the net recovery percentages determined by such inventory
appraisal, is, in each case, equal to or greater than 65%.
"ABR" shall have the meaning provided in Section 2.6(a).
"ABR LOAN" means a Revolving Credit Loan or US Swingline Loan
bearing interest at the rate provided in Section 2.6(a).
"ACCOUNT" has the meaning given to such term in Section
9-102(a)(2) of the UCC or Section 1 of the PPSA, as applicable.
"ACCOUNT PARTY" shall have the meaning assigned to such term
in Section 2.3(d).
"ACQUISITION" means any transaction, or any series of related
transactions, consummated after the Closing Date, by which any Credit Party,
directly or indirectly, by means of a take-over bid, tender offer, amalgamation,
merger, purchase of assets or otherwise (a) acquires any business or all or
substantially all of the assets of any Person engaged in any business, (b)
acquires control of securities of a Person engaged in a business representing
more than 50% of the ordinary voting power for the election of directors or
other governing position if the business affairs of such Person are managed by a
board of directors or other governing body,
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or (c) acquires control of more than 50% of the ownership interest in any Person
engaged in any business that is not managed by a board of directors or other
governing body.
"ADJUSTED INTEREST EXPENSE" means the total Interest Expense
of the Company and the other Credit Parties on a consolidated basis and for any
period less any non cash Interest Expense.
"ADMINISTRATIVE AGENT" means The CIT Group/Business Credit,
Inc., acting in the capacity and to the extent described in Article 9, and any
successor to The CIT Group/Business Credit, Inc. acting in such capacity.
"ADVANCE NOTICE" means written or telecopy notice (with
telephonic confirmation in the case of telecopy notice), which in each case
shall be irrevocable, from the applicable Borrowers to be received by the
Administrative Agent (or the Canadian Administrative Agent (with a copy to the
Administrative Agent) in the case of any Borrowing, conversion, continuation or
prepayment of Canadian Loans) before 11:00 a.m., Eastern time, by the number of
Business Days in advance of any Borrowing, conversion, continuation or
prepayment of any Loan or Loans pursuant to this Agreement as respectively
indicated below:
(a) LIBOR Loans - 3 Business Days;
(b) ABR Loans - Same Business Day;
(c) Canadian Prime Loans - Same Business Day; and
(d) B/A Loans - 3 Business Days
For the purpose of determining the applicable period of
Advance Notice in the case of the conversion from one Type of Loan into another,
the Loans into which there is to be a conversion shall control. The
Administrative Agent, the Canadian Administrative Agent, each Issuing Bank and
each Lender are entitled to rely upon and act upon telecopy notice made or
purportedly made by the Borrowers, and the Borrowers hereby waive the right to
dispute the authenticity and validity of any such transaction once the
Administrative Agent, the Canadian Administrative Agent or any Lender has
advanced funds or any Issuing Bank has issued Letters of Credit, absent manifest
error.
"AFFILIATE" means (a) any Person controlling, controlled by or
under common control with any other Person, (b) with respect to any Person, any
other Person who is an officer, director, managing member, partner, trustee or
beneficiary of such Person, and (c) any Person who is a spouse, sibling, parent,
grandparent, child or grandchild of a Person described in clauses (a) or (b)
preceding. For purposes of this definition, "CONTROL" (including "controlled by"
and "under common control with") means the possession, directly or indirectly,
of the power to either (a) vote 10% or more of the Voting Stock of such Person
unless another Person has beneficial ownership of more than 50% of such Voting
Stock or (b) direct or cause the direction of the management and policies of
such Person, whether through the ownership of voting securities, by contract or
otherwise.
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"AFTER TAX BASIS" means on a basis such that any payment to be
received or receivable by any Person is supplemented by a further payment or
payments to that Person so that the sum of all such payments, after deducting
all Taxes (taking into account any related credits or deductions) payable by
such Person under any law or Governmental Authority, is equal to the payment due
to such Person, provided, that for these purposes, such Person shall be assumed
to be subject to tax at the highest marginal rate(s) applicable to such Person
with respect to the amounts in question.
"AGENT" means either of the Administrative Agent or the
Canadian Administrative Agent, and "AGENTS" means both such Agents collectively.
"AGENT ADVANCES" shall have the meaning given to such term in
Section 2.28.
"AGGREGATE CANADIAN REVOLVING CREDIT EXPOSURE" means the sum
of all of the Canadian Revolving Lenders' Canadian Revolving Credit Exposures.
"AGGREGATE REVOLVING CREDIT EXPOSURE" means the sum of all of
the Revolving Lenders' Revolving Credit Exposures.
"AGGREGATE US REVOLVING CREDIT EXPOSURE" means the sum of all
of the US Lenders' US Revolving Credit Exposures.
"AGREEMENT" means this Credit Agreement, as further amended,
supplemented or otherwise modified or restated from time to time.
"ALLOCATED US REVOLVING CREDIT EXPOSURE" means, in respect of
a US Borrower, that portion of the Aggregate US Revolving Credit Exposure which,
as a result of the allocation of Borrowings to a US Operating Borrower in
accordance with the terms hereof, is attributable to such US Operating Borrower.
"AMERISTEEL U.S. OPERATING ACCOUNT" means the account
maintained by Ameristeel U.S. at a financial institution acceptable to the
Administrative Agent, acting reasonably.
"APPLICABLE MARGIN" means, on any day and with respect to any
Loan, the applicable per annum percentage set forth at the appropriate
intersection in the table shown below, based on the average daily Excess
Availability for the most recently ended Fiscal Quarter with respect to which
the Borrowers have delivered Borrowing Base Reports in accordance with Section
6.10:
CANADIAN PRIME
LIBOR LOAN/ ABR LOAN RATE LOAN COMMITMENT FEE
BA LOAN APPLICABLE APPLICABLE APPLICABLE
APPLICABLE MARGIN MARGIN MARGIN MARGIN
EXCESS AVAILABILITY PERCENTAGE PERCENTAGE PERCENTAGE PERCENTAGE
- ----------------------------------------- ------------------- ----------------- ----------------- -----------------
Greater than $170,000,000 2.00% Nil 0.25% 0.25%
- ----------------------------------------- ------------------- ----------------- ----------------- -----------------
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Equal to or less than $170,000,000 but
greater than $100,000,000 2.25% Nil 0.50% 0.25%
- ----------------------------------------- ------------------- ----------------- ----------------- -----------------
Equal to or less than $100,000,000 but
greater than $70,000,000 2.50% 0.25% 0.75% 0.50%
- ----------------------------------------- ------------------- ----------------- ----------------- -----------------
Equal to or less than $70,000,000 2.75% 0.50% 1.00% 0.50%
- ----------------------------------------- ------------------- ----------------- ----------------- -----------------
Each change in the Applicable Margin based on a change in the Excess
Availability (or the Borrower's failure to deliver Borrowing Base Reports as
required by Section 6.10) shall be effective as of the first day of the first
month immediately following the month in which the applicable Borrowing Base
Reports have been delivered, but based upon the Borrowing Base Reports as at the
end of the immediately preceding month. Notwithstanding the foregoing, for the
period from the Closing Date through December 31, 2003, the Applicable Margin
for LIBOR Loans and B/A Loans will be 2.25%, the Applicable Margin for ABR Loans
shall be nil, the Applicable Margin for Canadian Prime Rate Loans shall be 0.50%
and the Applicable Margin for commitment fees payable pursuant to Section
2.13(a) and (b) shall be 0.25%. If at any time the Borrower fails to deliver
Borrowing Base Reports as required by Section 6.10 on or before the date
required pursuant to Section 6.10 (without regard to grace periods), the
Applicable Margins will be the highest margins provided for in the above table
from the date such Borrowing Base Reports are due pursuant to Section 6.10
(without regard to grace periods) through the date the Administrative Agent
receives all Borrowing Base Reports which are then due pursuant to Section 6.10.
"APPLICABLE PERCENTAGE" means, (a) with respect to any US
Revolving Lender, such US Revolving Lender's US Revolving Credit Percentage, and
(b) with respect to any Canadian Revolving Lender, such Canadian Revolving
Lender's Canadian Revolving Credit Percentage, as applicable.
"APPLICABLE US OPERATING BORROWER" shall have the meaning
given to such term in Section 2.2(a)(2).
"APPLICATION" means an "Application and Agreement for Letters
of Credit," or similar instruments or agreements, entered into between a
Borrower and an Issuing Bank in connection with any Letter of Credit.
"ASSESSMENT RATE" means, for any day, the annual assessment
rate in effect on such day that is payable by a member of the Bank Insurance
Fund classified as "well-capitalized" 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 Administrative Agent, acting reasonably, to
be representative of the cost of such insurance to the Lenders.
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"ASSIGNMENT AND ACCEPTANCE" shall have the meaning provided in
Section 10.7(b).
"AVAILABILITY RESERVES" means, as of any date of
determination, such amounts as the Administrative Agent or the Canadian
Administrative Agent may from time to time establish and revise in its
reasonable discretion reducing the US Borrowing Base of any US Borrower and/or
the Canadian Borrowing Base which would otherwise be available to the Borrowers
under the lending formulas provided for herein (a) to reflect criteria, events,
conditions, contingencies or risks which, as determined by the Administrative
Agent or the Canadian Administrative Agent in its reasonable discretion, do or
may affect either (i) any component of the US Borrowing Base of any US Borrower
or the Canadian Borrowing Base or their value, (ii) the assets, business,
financial performance, financial condition or prospects of any Borrower, or
(iii) the security interests and other rights of the Administrative Agent and
the Canadian Administrative Agent in the Collateral (including the
enforceability, perfection and priority thereof), or (b) to reflect the
Administrative Agent's or the Canadian Administrative Agent's customary practice
or its reasonable belief that any collateral report or financial information
furnished by or on behalf of any Borrower to any Agent or any Lender is or may
have been incomplete, inaccurate or misleading in any material respect, or (c)
in respect of any state of facts which the Administrative Agent or the Canadian
Administrative Agent determines constitutes a Default or an Event of Default.
Without limiting the foregoing, the Administrative Agent or the Canadian
Administrative Agent, in its reasonable discretion, may establish and/or
increase Availability Reserves in respect of (a) fabrication accounts, (b)
health insurance self-funding obligations, (c) rent at leased locations which
may be subject to statutory or contractual landlord liens, (d) Dilution of
accounts, (e) warehouseman's or bailee's charges, where no Bailee's Letter is in
effect, (f) inventory shrinkage, (g) slow moving or obsolete Inventory, (h)
liabilities of any Credit Party under any Cash Management Agreement, Swap
Agreement or other swap, cap, floor, collar, futures contract or option designed
to hedge against fluctuations in commodity prices, securities prices or other
financial market conditions, (i) statutory claims, deemed trusts or inventory
subject to rights of suppliers under Section 81.1 of Bankruptcy and Insolvency
Act (Canada), (j) employee or employee benefit related liabilities, and (k) any
other claims which may have priority over the claims of the Agents and the
Lenders. Any Availability Reserve resulting from the establishment of a new
reserve category shall not become effective until the third Business Day
following written notice of the establishment of such new reserve category has
been given by the Administrative Agent or the Canadian Administrative Agent to
the applicable Borrowers.
"B/A LOAN" means a C$ Denominated Loan bearing interest based
upon the CDOR Rate.
"BAILEE" means any Person who is in possession of any
inventory of any Credit Party on behalf of such Credit Party.
"BAILEE'S LETTER" means a letter substantially in the form
attached as Exhibit A executed by any Bailee pursuant to which such Bailee
acknowledges the Administrative Agent's Lien or the Canadian Administrative
Agent's Lien, as applicable, with respect thereto.
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"BANKRUPTCY CODE" shall have the meaning provided in Section
8.7.
"BLOCK EVENT" means the occurrence and continuance of a
Default or if Excess Availability shall at any time be less than $70,000,000.
"BLOCKED ACCOUNT" means one or more demand deposit accounts
established by the Canadian Borrowers with the Canadian Lockbox Bank and the US
Borrowers with the US Lockbox Bank which (a) the applicable Borrowers and the US
Lockbox Bank or the Canadian Lockbox Bank, as applicable, jointly designate as a
"Blocked Account," (b) into which all cash receipts of the applicable Borrowers
from whatever source (including, without limitation, all currency, checks and
drafts representing proceeds of the Collateral and further including any of the
foregoing received in the Lockbox) shall be deposited pursuant to Section 4.3
and Section 4.4 hereof and pursuant to the Security Instruments, and (c) which
are subject to the provisions of Section 4.5 and Section 4.6 hereof.
"BOARD" means the Board of Governors of the Federal Reserve
System of the United States.
"BONDING OBLIGATIONS" shall have the meaning given to such
term in Section 7.3(f).
"BORROWER" and "BORROWERS" shall have the meanings set forth
in the initial paragraph hereof.
"BORROWING" means a borrowing pursuant to a Borrowing Request
or a continuation or a conversion pursuant to Section 2.12 consisting, in each
case, of the same Type of Loans having, in the case of LIBOR Loans or B/A Loans,
the same Interest Period (except as otherwise provided in Section 2.15 and
Section 2.16) and made previously or being made concurrently by all of the
Lenders.
"BORROWING BASE REPORT" means the report of each of the US
Operating Borrowers or each of the Canadian Borrowers concerning the amount of
the US Borrowing Base of each such US Operating Borrower or the Canadian
Borrowing Base, as applicable, to be delivered pursuant to Section 6.10(g),
substantially in the form attached as Exhibit B-1 or B-2 (depending on which
Borrowing Base is being computed).
"BORROWING REQUEST" means a request for a Borrowing pursuant
to Section 2.2(a) or (b), substantially in the form attached as Exhibit C-1
through C-5 hereof (depending on the Type of Loan with respect to which such
Borrowing Request is being submitted).
"BUSINESS DAY" means any day excluding Saturday, Sunday and
any other day on which banks are required or authorized to close in New York,
New York or Atlanta, Georgia and, if the applicable Business Day relates to
LIBOR Loans, on which trading is carried on by and between banks in Dollar
deposits in the London interbank market and, if the applicable Business Day
relates to Canadian Revolving Credit Loans, including B/A Loans, or the Dollar
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Equivalent of any amount denominated in C$, shall also exclude any other day on
which banks are required or authorized to close in Toronto, Ontario, Canada.
"C$" means lawful money of Canada.
"C$ DENOMINATED LOAN" means Canadian Revolving Credit Loans
which are denominated in C$.
"CANADIAN ADMINISTRATIVE AGENT" means CIT Business Credit
Canada Inc., acting in the capacity and to the extent described in Article 9 and
any successor to CIT Business Credit Canada Inc. acting in such capacity.
"CANADIAN BLOCKED ACCOUNT" means a Blocked Account established
by the Canadian Borrowers with the Canadian Lockbox Bank.
"CANADIAN BORROWERS" shall have the meaning set forth in the
initial paragraph hereof.
"CANADIAN BORROWING BASE" means, only with respect to the
Canadian Borrowers, the amount equal to the sum of:
(1) the Eligible Account Advance Percentage of the Canadian
Borrowers' Eligible Accounts, plus
(2) the lesser of (i) Eligible Inventory Advance Percentage of
the Canadian Borrowers' Eligible Inventory, (ii) 85% of the appraised net
recovery value of the Canadian Borrowers' Eligible Inventory, determined by
reference to the net recovery percentages determined by the most recent
inventory appraisal, or (iii) the Canadian Inventory Limit, minus
(3) the aggregate of all amounts which would otherwise be
included in the Canadian Borrowing Base, but which GUSAP or the applicable US
Operating Borrower has elected to include in the US Borrowing Base of such US
Operating Borrower pursuant to Section 2.2(a).
The Canadian Borrowing Base in effect under this Agreement at any time shall be
the Canadian Borrowing Base reflected on the most recent Canadian Borrowing Base
Report delivered to the Canadian Administrative Agent and the Administrative
Agent pursuant to Section 6.10(g) hereof, subject to (a) immediate adjustment by
the Canadian Administrative Agent or the Administrative Agent to the extent that
the calculations of the Canadian Borrowing Base reflected on such report are not
in accordance with this Agreement, and (b) immediate adjustment as result of any
changes in eligibility standards required by the Canadian Administrative Agent,
acting reasonably.
"CANADIAN CREDIT PARTY" means the Canadian Borrowers and each
other Credit Party which is formed or organized under the federal laws of Canada
or under the laws of any province or territory in Canada.
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"CANADIAN EXCESS AVAILABILITY" means, as of any date, the
remainder of (a) the remainder of (i) the Canadian Borrowing Base as of such
date, minus, without duplication, (ii) the Availability Reserves with respect to
the Canadian Borrowing Base as of such date, less (b) the aggregate outstanding
balance of the Canadian Lender Indebtedness as of such date and the aggregate
face amount of undrawn Canadian Letters of Credit as of such date. Canadian
Excess Availability shall always be determined on the basis that all debts and
obligations shall be current, and all accounts payable shall be handled in the
normal course of the Borrowers' business consistent with their past practices.
"CANADIAN FEE LETTER" means the letter agreement, dated the
Closing Date, regarding fees payable by the Canadian Borrowers to the Canadian
Administrative Agent.
"CANADIAN GUARANTEE" means that certain Canadian Guarantee
dated as of the date hereof and executed by each Credit Party in favour of the
Canadian Administrative Agent, as amended, modified, renewed, supplemented or
restated from time to time.
"CANADIAN INVENTORY LIMIT" means the amount of the Inventory
Limit which the Canadian Borrowers designate as the "Canadian Inventory Limit"
on the Canadian Borrowing Base Report from which the Canadian Borrowing Base is
being calculated; provided that, in no event shall the sum of the Canadian
Inventory Limit and the US Inventory Limit ever exceed the Inventory Limit.
"CANADIAN LENDER" means a Canadian Revolving Lender or a
Canadian Swingline Lender.
"CANADIAN LENDER INDEBTEDNESS" means any and all amounts owing
or to be owing by any Canadian Credit Party to the Administrative Agent, the
Canadian Administrative Agent, the Issuing Banks or the Lenders with respect to
or in connection with the Canadian Loans, any Canadian Letter of Credit
Liabilities, the Notes, any Swap Agreement between any of the Canadian Borrowers
and any Lender or any of its Secured Affiliates, any Cash Management Agreement
between any of the the Canadian Borrowers and a Canadian Lender or its Cash
Management Affiliate, this Agreement, or any other Financing Document and, as to
Swap Agreements with any Lender or any of its Secured Affiliates or any Cash
Management Agreement with any Lender or any Lender or its Cash Management
Affiliate, any and all amounts owing or to be owing by any Canadian Credit Party
thereunder to any Lender or any of its Secured Affiliates or Cash Management
Affiliate, respectively.
"CANADIAN LETTER OF CREDIT" and "CANADIAN LETTERS OF CREDIT"
shall have the meanings assigned to such terms in Section 2.3(b).
"CANADIAN LETTER OF CREDIT LIABILITIES" means, at any time and
in respect of any Canadian Letter of Credit, the Dollar Equivalent at such time
of the sum of (a) the amount available for drawings under such Canadian Letter
of Credit as of the date of determination plus (b) the aggregate unpaid amount
of all Reimbursement Obligations due and payable as of the date of determination
in respect of previous drawings made under such Canadian Letter of Credit.
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"CANADIAN LOANS" means the Canadian Revolving Credit Loans,
the Canadian Swingline Loans and the Agent Advances made to or in connection
with the Canadian Borrowers.
"CANADIAN LOCKBOX" means any lock box to be established and
operated pursuant to Section 4.4 hereof and the Canadian Lockbox Agreement.
"CANADIAN LOCKBOX AGREEMENT" means an agreement between the
Canadian Borrowers and the Canadian Lockbox Bank governing the Canadian Lockbox.
"CANADIAN LOCKBOX BANK" means the financial institution
designated by the Canadian Borrowers or the Canadian Administrative Agent to act
as the Canadian Lockbox Bank and consented to in writing by the Canadian
Borrowers and the Canadian Administrative Agent (which consents shall not be
unreasonably withheld provided, however that the consent of the Canadian
Borrowers shall not be required if a Default has occurred and is continuing) and
which has entered into the Canadian Lockbox Agreement.
"CANADIAN MAXIMUM AVAILABLE AMOUNT" means, at any date, an
amount equal to the lesser of (a) the aggregate Canadian Revolving Credit
Commitments as of such date, and (b) the remainder of (i) the Canadian Borrowing
Base as of such date, minus (ii) the sum of (A) the Availability Reserves with
respect to the Canadian Borrowing Base as of such date, plus (B) the portion of
the Swap Reserves and the Cash Management Reserves applicable to the Canadian
Borrowers as of the last day of the month for which the Canadian Borrowing Base
is being calculated.
"CANADIAN PRIME RATE" means on any day, the annual rate of
interest (rounded upwards, if necessary, to the nearest 1/16 of 1%) equal to the
greater of: (a) the annual rate of interest announced from time to time by
Canadian Imperial Bank of Commerce as its prime rate in effect at its principal
office in Toronto, Ontario Canada on such day being the reference rate used by
Canadian Imperial Bank of Commerce for determining interest rates on C$
denominated loans to its customers in Canada; and (b) the annual rate of
interest equal to the sum of (i) the one-month CDOR Rate in effect on such day,
and (ii) 1%.
"CANADIAN PRIME LOANS" means C$ Denominated Loans which bear
interest at a rate based upon the Canadian Prime Rate.
"CANADIAN REVOLVING CREDIT COMMITMENT" shall have the meaning
assigned to such term in Section 2.1(d).
"CANADIAN REVOLVING CREDIT EXPOSURE" means, at any time and as
to each Canadian Revolving Lender, the Dollar Equivalent sum of (a) the
aggregate principal amount of the Canadian Revolving Credit Loans made by such
Canadian Revolving Lender outstanding as of such date, plus (b) other than for
purposes of Section 2.1(d) and 2.11(b) hereof, unless the Canadian
Administrative Agent or the Required Lenders otherwise direct, the accrued and
unpaid interest on the Canadian Revolving Credit Loans made by such Canadian
Revolving Lender outstanding as of such date, plus (c) such Canadian Lender's
Canadian Revolving Credit
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Percentage of the aggregate amount of all Canadian Letter of Credit Liabilities
as of such date, plus (d) such Canadian Revolving Lender's Canadian Revolving
Credit Percentage of the Canadian Swingline Exposure as of such date, plus (e)
the Canadian Revolving Credit Percentage of the aggregate principal amount of
the Agent Advances made to the Canadian Borrowers as of such date.
"CANADIAN REVOLVING CREDIT LOAN" shall have the meaning
provided in Section 2.1(a).
"CANADIAN REVOLVING CREDIT NOTES" means the promissory notes
of the Canadian Borrowers described in Section 2.5(b) payable to any Canadian
Revolving Lender and being substantially in the form of Exhibit D-1 and D-2,
evidencing the aggregate joint and several Indebtedness of the Canadian
Borrowers to such Canadian Revolving Lender resulting from Canadian Revolving
Credit Loans made by such Lender.
"CANADIAN REVOLVING CREDIT PERCENTAGE" means as to any
Canadian Revolving Lender, the percentage of the aggregate Canadian Revolving
Credit Commitments constituted by its Canadian Revolving Credit Commitment (or,
if the Canadian Revolving Credit Commitments have terminated or expired, the
percentage which such Canadian Revolving Lender's Canadian Revolving Credit
Exposure at such time constitutes of the Aggregate Canadian Revolving Credit
Exposure at such time).
"CANADIAN REVOLVING LENDER" means a Lender with a Canadian
Revolving Credit Commitment.
"CANADIAN SECURITIES PLEDGE AGREEMENT" means that certain
Canadian Securities Pledge Agreement dated as of the date hereof and executed by
each Credit Party in favour of the Canadian Administrative Agent providing for
and constituting a first-priority Lien in favour of the Canadian Administrative
Agent on the Collateral described therein, as amended, modified, renewed,
supplemented or restated from time to time.
"CANADIAN SECURITY AGREEMENT" means, for all provinces and
territories of Canada other than the Province of Quebec, that certain Canadian
Security Agreement dated as of the date hereof and executed by each Credit Party
in favour of the Canadian Administrative Agent providing for and constituting a
first-priority Lien in favour of the Canadian Administrative Agent on the
Collateral described therein, as amended, modified, renewed, supplemented or
restated from time to time and, for the Province of Quebec, that certain Deed of
Hypothec and Issue of Bonds executed on or about the date hereof by each Credit
Party having assets in such Province in favour of the Canadian Administrative
Agent (acting as fonde de pouvoir as described in Section 9.16) providing for
and constituting a first-priority Lien in favour of the Canadian Administrative
Agent on the Collateral described therein, as amended, modified, renewed,
supplemented or restated from time to time.
"CANADIAN SWINGLINE AVAILABILITY" means, on any date, an
amount equal to the remainder of (a) the Canadian Swingline Commitment minus (b)
the Canadian Swingline Exposure on such date.
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"CANADIAN SWINGLINE COMMITMENT" shall have the meaning
assigned to such term in Section 2.1(f).
"CANADIAN SWINGLINE EXPOSURE" means, at any time, the
aggregate principal amount of all Canadian Swingline Loans made to the Canadian
Borrowers outstanding at such time.
"CANADIAN SWINGLINE LENDER" means CIT Business Credit Canada
Inc., in its capacity as lender of Canadian Swingline Loans hereunder.
"CANADIAN SWINGLINE LOANS" shall have the meaning assigned to
such term in Section 2.1(a).
"CANADIAN SWINGLINE NOTES" means the promissory notes of the
Canadian Borrowers described in Section 2.5(d) payable to the Canadian Swingline
Lender and being substantially in the form of Exhibit E-1 and E-2, evidencing
the aggregate joint and several Indebtedness of the Canadian Borrowers to the
Canadian Swingline Lender resulting from Canadian Swingline Loans made by the
Canadian Swingline Lender.
"CAPITAL EXPENDITURES" means, as to any Person for any period,
all expenditures (whether paid in cash or accrued as a liability, including the
portion of Capital Lease Obligations originally incurred during such period that
are capitalized on the consolidated balance sheet of the Company) by such Person
and its Subsidiaries during such period, that, in conformity with GAAP, are
included in "capital expenditures," "additions to property, plant or equipment"
or comparable items in the consolidated financial statements of such Person, but
excluding expenditures for the restoration, repair or replacement of any fixed
or capital asset that was destroyed or damaged, in whole or in part, in an
amount equal to any insurance proceeds received in connection with such
destruction or damage.
"CAPITAL LEASE OBLIGATIONS" means, as to any Person, the
obligations of such Person to pay rent or other amounts under a lease of (or
other agreement conveying the right to use) real and/or personal property which
obligations are required to be classified and accounted for as a capital lease
for financial reporting obligations in accordance with GAAP on a balance sheet
of such Person and, for purposes of this Agreement, the amount of such
obligations shall be the capitalized amount thereof at the time of
determination.
"CASH MANAGEMENT AFFILIATE" means any Affiliate of any Lender
that has entered into a Cash Management Agreement with a Credit Party with the
obligations of such Credit Party thereunder being secured by one or more
Security Instruments.
"CASH MANAGEMENT AGREEMENT" means any document, instrument,
agreement, arrangement or transaction with respect to cash management services,
and includes any of the foregoing related to deposit accounts, overdraft
protection or automated clearing house transactions.
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"CASH MANAGEMENT RESERVES" means, an amount (reflected in
Dollars) calculated as of the last day of each month and separately for the US
Borrowers and the Canadian Borrowers, equal to such Borrowers' liability under
the Cash Management Agreements to which such Borrowers are a party and any
exposure of the Lenders or Cash Management Affiliates with respect to such Cash
Management Agreements and the services performed thereunder on behalf of such
Borrowers.
"CDOR RATE" means on any date, (a) in the case of a Canadian
Lender which is a bank listed on Schedule I of the Bank Act (Canada), the annual
rate of interest which is the rate based on an average rate applicable to
Canadian banker's acceptances, for a term which corresponds to the term of the
relevant Loan, appearing on the "Reuters Screen CDOR Page" (as defined in the
International Swaps and Derivatives Association, Inc. definitions, as modified
and amended from time to time) at approximately 10:00 a.m. (Toronto, Ontario,
Canada time), on such date, or if such date is not a Business Day, then on the
immediately preceding Business Day, provided that, if such rate does not appear
on the Reuters Screen CDOR Page as contemplated, then the CDOR Rate on any date
shall be calculated as the rate for the term referred to above applicable to
Canadian banker's acceptances quoted by Canadian Imperial Bank of Commerce as of
10:00 a.m. (Toronto, Ontario Canada time) on such date or, if such date is not a
Business Day, then on the immediately preceding Business Day, and (b) in the
case of any other Canadian Lender, the rate described in paragraph (a) above,
plus 0.10%.
"CERTIFICATE OF EFFECTIVENESS" means a Certificate of
Effectiveness in the form of Exhibit F attached hereto to be executed by the
Borrowers and the Administrative Agent upon the satisfaction of each of the
conditions precedent contained in Section 3.1 hereof.
"CHANGE OF CONTROL" means:
(1) (A) any "person" or "group" of related persons (as such
terms are used in Sections 13(d) and 14(d) of the Exchange Act), other than one
or more Permitted Holders, is or becomes the beneficial owner (as defined in
Rules 13d-3 and 13d-5 under the Exchange Act, except that, for the purpose of
this clause, such person or group shall be deemed to have "beneficial ownership"
of all shares that any such person or group has the right to acquire, whether
such right is exercisable immediately or only after the passage of time),
directly or indirectly, of more than 35% of the total voting power of the Voting
Stock of the Company (for the purposes of this clause, such person or group
shall be deemed to beneficially own any Voting Stock of the Company held by a
parent entity, if such person or group "beneficially owns" (as defined above),
directly or indirectly, more than 35% of the voting power of the Voting Stock of
such parent entity) and (B) the Permitted Holders "beneficially own" (as defined
in Rules 13d-3 and 13d-5 of the Exchange Act), directly or indirectly, in the
aggregate a lesser percentage of the total voting power of the Voting Stock of
the Company than such other person or group and do not have the right or ability
by voting power, contract or otherwise to elect or designate for election a
majority of the Board of Directors of the Company (for the purposes of this
clause, such other person or group shall be deemed to beneficially own any
Voting Stock of a specified entity held by a parent entity, if such other person
or group "beneficially owns" directly or indirectly, more than 35% of the voting
power of the Voting Stock of such parent entity and the Permitted Holders
"beneficially own" directly or indirectly, in the aggregate a lesser percentage
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of the voting power of the Voting Stock of such parent entity and do not have
the right or ability by voting power, contract or otherwise to elect or
designate for election a majority of the Board of Directors of such parent
entity); or
(2) during any period of two consecutive years, individuals
who at the beginning of such period constituted the Board of Directors of the
Company (together with any new directors whose election by such Board of
Directors of the Company or whose nomination for election by the shareholders of
the Company was approved by a vote of a majority of the directors of the Company
then still in office who were either directors at the beginning of such period
or whose election or nomination for election was previously so approved) cease
for any reason to constitute a majority of the Board of Directors of the Company
then in office; or
(3) the sale, lease, transfer, conveyance or other
disposition, other than by way of a merger, amalgamation or consolidation
permitted by Section 7.4, in one or a series of related transactions, of all or
substantially all of the assets of the Company and the other Credit Parties
taken as a whole to any "person" (as such term is used in Sections 13(d) and
14(d) of the Exchange Act) other than a Permitted Holder; or
(4) the adoption by the stockholders of the Company of a plan
or proposal for the liquidation or dissolution of the Company;
(5) if any US Borrower or any Canadian Borrower (other than
the Company) ceases to be, directly or indirectly, a wholly owned Subsidiary of
the Company, other than by way of a merger, amalgamation, consolidation, sale or
other disposition permitted by Section 7.4;
(6) if GUSAP ceases to be, directly or indirectly, a wholly
owned Subsidiary of the Company;
(7) if NSULC ceases to be a wholly owned Subsidiary of GUSAP;
or
(8) if PASUG ceases to be a wholly owned Subsidiary of NSULC.
"CHATTEL PAPER" has the meaning given to such term in Section
9-102(a)(11) of the UCC or Section 1 of the PPSA, as applicable.
"CLOSING DATE" means June 27, 2003.
"CODE" means the Internal Revenue Code of 1986, as amended,
and any successor statute.
"CO-DOCUMENTATION AGENT" means J.P. Morgan Securities Inc. and
GE Canada Finance, Inc., acting in the capacity and to the extent described in
Article 9, and any successor to J.P. Morgan Securities Inc. and GE Canada
Finance, Inc., acting in such capacity.
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"COLLATERAL" means the Credit Parties' Properties described in
and subject to the Liens, privileges, priorities and security interests
purported to be created by any Security Instrument.
"COLLATERAL REPORT" has the meaning given to such term in
Section 6.9.
"COMBINED REVOLVING CREDIT COMMITMENT" means, for any
Revolving Lender, the aggregate amount of such Revolving Lender's US and
Canadian Revolving Credit Commitments, and for purposes of this definition, a
Revolving Lender and its Related Affiliate shall be deemed to be one and the
same Revolving Lender.
"COMMITMENT" means any US Revolving Credit Commitment, US
Swingline Commitment, Canadian Revolving Credit Commitment or Canadian Swingline
Commitment and "COMMITMENTS" means all such Commitments collectively.
"COMPANY" shall have the meaning set forth in the initial
paragraph hereof.
"COMMITMENT EXCHANGE" means the mechanism for the allocation
and exchange of interests in the Commitments and collections thereunder
established under Section 2.8.
"COMMITMENT EXCHANGE DATE" means the date, if any, on which
there shall occur a declaration that the Loans then outstanding are due and
payable pursuant to the concluding paragraph of Article 8.
"COMMITMENT EXCHANGE PERCENTAGE" means, as to each Lender, a
fraction, expressed as a decimal, of which (a) the numerator shall be such
Lender's Revolving Credit Exposure, and (b) the denominator shall be the
Aggregate Revolving Credit Exposure, in each case immediately prior to such
Commitment Exchange Date. For purposes of computing each Lender's Commitment
Exchange Percentage, all amounts owing to such Lender that are denominated in a
currency other than Dollars shall be translated into Dollars at the Dollar
Equivalent in effect on the Commitment Exchange Date.
"CONSOLIDATED NET INCOME" means, for any period, the net
income (loss) of the Company and the other consolidated Credit Parties
determined in accordance with GAAP and the net income (loss) associated with the
Company's or any consolidated Credit Party's direct or indirect interest in the
Gallatin Steel Company; provided, however, that there will not be included in
such Consolidated Net Income:
(1) any net income (loss) of any Person if such Person is not the
Company or another Credit Party, except that:
(A) subject to the limitations contained in clause (3)
below, the Company's equity in the net income of any
such Person for such period will be included in such
Consolidated Net Income up to the aggregate amount of
cash actually distributed by such Person during such
period to the Company or another Credit Party as a
dividend or other distribution
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(subject, in the case of a dividend or other
distribution to another Credit Party, to the
limitations contained in clause (2) below); and
(B) the Company's equity in a net loss of any such Person
(other than another Credit Party) for such period
will be included in determining such Consolidated Net
Income to the extent such loss has been funded with
cash from the Company or another Credit Party;
(2) any net income (but not loss) of any Credit Party (other than
the Company) if such Credit Party is subject to restrictions,
directly or indirectly, on the payment of dividends or the
making of distributions by such Credit Party, directly or
indirectly, to the Company, except that the Company's equity
in a net loss of any such Credit Party for such period will be
included in determining such Consolidated Net Income;
(3) any gain (loss) realized upon the sale or other disposition of
any property, plant or equipment of the Company or the other
consolidated Credit Parties (including pursuant to any
sale/leaseback transaction) which is not sold or otherwise
disposed of in the ordinary course of business;
(4) any extraordinary gain or loss;
(5) the cumulative effect of a change in accounting principles;
and
(6) any one-time expenses (including non-cash charges) not to
exceed $8,000,000 relating to the termination of any Swap
Agreement existing on the Closing Date which is terminated
within six months after the Closing Date or relating to the
write-off of deferred financing costs incurred in connection
with the transactions contemplated by this Agreement.
"CREDIT PARTIES" means the Company and each of its
Subsidiaries (other than Ameristeel Bright Bar Inc., Co-Steel Liquidity
Management Hungary Limited Liability Company, Acierco S.A., Goldmarsh
Enterprises and Co-Steel U.K. Limited), collectively, and "CREDIT PARTY" means
any such Person individually.
"CREDIT PERCENTAGE" means, for each Lender, the percentage
obtained by dividing (a) the sum of the Revolving Credit Exposure of such
Lender, by (b) the sum of the Aggregate Revolving Credit Exposure.
"CURRENT INFORMATION" means, as of any day, the financial
statements and other related information for any applicable period most recently
required to be delivered to the Administrative Agent pursuant to Section
6.10(a), Section 6.10(b), and Section 6.10(c).
"DATED ASSETS" has the meaning assigned to such term in
Section 2.25(c) hereof.
"DATED LIABILITIES" has the meaning assigned to such term in
Section 2.25(c) hereof.
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"DEFAULT" means an Event of Default or any condition or event
which, with notice or lapse of time or both, would constitute an Event of
Default.
"DILUTION" means a reduction as determined by the
Administrative Agent or the Canadian Administrative Agent, in its reasonable
discretion, in the value of accounts caused by returns, allowances, discounts,
credits, and/or any other offsets asserted by customers or granted by any
Borrower having the effect of reducing the collections of accounts.
"DISBURSEMENT ACCOUNT" means, in respect of each Borrower, the
account at the Payment Office of the Administrative Agent or the Canadian
Administrative Agent, as applicable, which such Borrower has designated for
purposes of receiving deposits of the proceeds of Loans and other amounts
directed to be deposited therein pursuant to Section 2.4(b) or Section 2.4(c),
as applicable.
"DOCUMENTARY LETTER OF CREDIT" means a Letter of Credit issued
pursuant to this Agreement that supports payment or performance for a single
identified purchase or exchange of products in the ordinary course of business
of the Borrowers.
"DOLLAR" and the sign "$," without the letter "C" before it,
means lawful money of the United States of America.
"DOLLAR DENOMINATED LOANS" means US Revolving Credit Loans,
any Canadian Revolving Credit Loans and any Swingline Loans which are
denominated in Dollars.
"DOLLAR EQUIVALENT" means, on any date of determination, with
respect to any amount expressed in C$, the amount of Dollars that may be
purchased with such amount of C$ at the Spot Exchange Rate on such date.
"EBITDA" means, as to the Company for any period, without
duplication, the amount equal to the following calculated for the Company, its
wholly owned consolidated Subsidiaries and its other Subsidiaries (but the
earnings of such other Subsidiaries shall only be included to the extent of cash
actually received by the Company or one of its wholly owned Subsidiaries) on a
consolidated basis; Consolidated Net Income, plus to the extent deducted from
Consolidated Net Income, Interest Expense, depreciation, amortization,
impairment charges under FAS 142, income and franchise tax expenses and other
non-cash charges which do not and will not result in a cash outlay in such
period or any subsequent period, minus, without duplication, cash expenditures
in such period in respect of any non-cash charges taken in any previous period;
provided that extraordinary gains or losses for any such period, including gains
or losses on the disposition of assets, shall not be included in EBITDA.
"ELIGIBLE ACCOUNT" means, at any time with respect to any
Canadian Borrower or any US Operating Borrower, the invoice amount, net of all
goods and services, harmonized taxes and sales taxes (which shall be the Dollar
Equivalent at such time of any amount denominated in C$) owing on each account
of such Person (net of any credit balance, returns, trade discounts, unapplied
cash, unbilled amounts or retention or finance charges) which meet such
standards of eligibility as the Administrative Agent or the Canadian
Administrative Agent shall establish from
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time to time in its reasonable discretion; provided that, no account shall be
deemed an Eligible Account unless each of the following statements is accurate
and complete (and the Person by including such account in any computation of the
applicable Borrowing Base shall be deemed to represent and warrant to the
Administrative Agent, each Issuing Bank and the Lenders the accuracy and
completeness of such statements):
(1) Such account is a binding and valid obligation of the
obligor thereon and is in full force and effect;
(2) Such account is evidenced by an invoice;
(3) Such account is genuine as appearing on its face or as
represented in the books and records of the Person;
(4) Such account is free from claims regarding rescission,
cancellation or avoidance, whether by operation of law or otherwise;
(5) Payment of such account is less than 90 days past the
original invoice date thereof and less than 60 days past the original due date
thereof;
(6) Such account is net of concessions, offset, deduction,
contras, chargebacks or understandings with the obligor thereon that in any way
could reasonably be expected to adversely affect the payment of, or the amount
of, such account;
(7) The Administrative Agent, or the Canadian Administrative
Agent, as the case may be, on behalf of the applicable Lenders, the Cash
Management Affiliates and the Secured Affiliates, has a first-priority perfected
Lien covering such account and such account is, and at all times will be, free
and clear of all other Liens other than Permitted Liens under Section 7.3(c) or
7.3(d), subject to Availability Reserves in respect of such Permitted Liens;
(8) The obligor on such account is not (a) an Affiliate of any
Credit Party, or (b) an employee of any Credit Party;
(9) Such account arose in the ordinary course of business of
the Person out of the sale of goods or services by such Person;
(10) Such account is not payable by an obligor who is more
than 90 days past the original invoice date thereof or more than 60 days past
the original due date thereof with regard to 50% or more of the total aggregate
accounts owed to the Person by such obligor and all of its Affiliates;
(11) All consents, licenses, approvals or authorizations of,
or registrations or declarations with, any Governmental Authority required to be
obtained, effected or given in connection with the execution, delivery and
performance of such account by each party obligated thereunder, or in connection
with the enforcement and collection thereof by the Administrative Agent or the
Canadian Administrative Agent, have been duly obtained, effected or given and
are in full force and effect;
-18-
(12) The obligor on such account is not an individual, and is
not the subject of any bankruptcy or insolvency proceeding, does not have a
trustee or receiver appointed for all or a substantial part of its property, has
not made an assignment for the benefit of creditors, admitted its inability to
pay its debts as they mature or suspended its business, and the Administrative
Agent and the Canadian Administrative Agent, in their reasonable discretion, are
otherwise satisfied with the credit standing of such obligor;
(13) The obligor of such account is organized and existing
under the laws of the United States of America or a State thereof or the federal
laws of Canada, a province or territory thereof, or if the obligor is not so
organized and existing, such account is covered under letters of credit or
export/import insurance reasonably satisfactory to the Administrative Agent;
(14) The obligor of such account is not a state, commonwealth,
provincial, federal, foreign, territorial, or other court or governmental
department, commission, board, bureau, agency or instrumentality other than the
federal government of the United States of America, the federal government of
Canada or the government of any province or territory of Canada or political
subdivision thereof, and then only to the extent that such Person has complied
in all respects with the relevant provisions of the Federal Assignment of Claims
Act of 1940 (for a US account debtor) or the Financial Administration Act
(Canada) or similar provincial or territorial legislation or municipal ordinance
of similar purpose (for a Canadian account debtor);
(15) In the case of the sale of goods, the subject goods have
been completed, sold and shipped, on a true sale basis on open account, or
subject to contract, and not on consignment, on approval, on a "sale or return"
basis, or on a "bill and hold" or "pre-sale" basis or subject to any other
repurchase or return agreement; no material part of the subject goods has been
returned, rejected, lost or damaged; and such account is not evidenced by
chattel paper or a promissory note or an instrument of any kind;
(16) Each of the representations and warranties set forth
herein and in the Security Instruments with respect to such account is true and
correct on such date;
(17) A check, promissory note, draft, trade acceptance or
other instrument has not been received with respect to such account (or with
respect to any other account due from the same account debtor), presented for
payment and returned uncollected for any reason;
(18) Such account is not in respect of a volume rebate or
tooling account receivable; and
(19) The Administrative Agent or the Canadian Administrative
Agent, as applicable, does not believe, in the exercise of its reasonable
discretion, that the prospect of collection of such account is impaired or that
the account may not be paid because of the account debtor's inability to pay;
provided that, if any Eligible Account, when added to all other accounts that
are obligations of the same obligor and its Affiliates, results in a total sum
that exceeds 10% of the total balance
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then due on all Eligible Accounts owed to the Borrowers (without giving effect
to any reduction in Eligible Accounts pursuant to this proviso), unless the
accounts of such obligors or group of Affiliated obligors are insured pursuant
to credit insurance acceptable to the Administrative Agent or the Canadian
Administrative Agent (as applicable) which has been assigned to the
Administrative Agent or the Canadian Administrative Agent (as applicable), the
amount of such accounts in excess of 10% of such total balance then due shall be
excluded from Eligible Accounts of the Borrowers to whom such accounts are owed;
provided that, if such accounts of such obligor (or group of Affiliated
obligors) are owed to both the US Borrowers and the Canadian Borrowers, such
excess amount shall be excluded from the Eligible Accounts of the Canadian
Borrowers and the US Borrowers in the same proportion as all amounts from such
obligor are owed to the Canadian Borrowers and the US Borrowers. Any standards
of eligibility established by the Administrative Agent or the Canadian
Administrative Agent in addition to those enumerated above shall not become
effective until the third Business Day following written notice of the
establishment of such new standard of eligibility has been given by the
Administrative Agent or the Canadian Administrative Agent to the applicable
Borrowers.
"ELIGIBLE ACCOUNT ADVANCE PERCENTAGE" means 85%.
"ELIGIBLE INSTITUTION" means an association or a corporation
that is (a) organized and doing business under the laws of Canada or any
province thereof, or the United States of America or any State thereof or the
District of Columbia, (b) authorized under such laws to accept deposits and
otherwise carry on the business of banking, (c) has a combined capital and
surplus of at least $250,000,000, (d) is subject to supervision or examination
by federal or state banking authority, and (e) is an entity with a credit rating
of at least "A" by Standard & Poor's Ratings Services, the equivalent thereof by
Moody's Investors Service, Inc. or "AA(low)" by Dominion Bond Rating Service
Limited.
"ELIGIBLE INVENTORY" means, at any time with respect to any
Canadian Borrower or any US Operating Borrower, all inventory of such Person
valued in Dollars on a lower of cost (on a first-in, first out basis and
excluding any component of cost representing intercompany profit in the case of
inventory acquired from an Affiliate) or market basis in accordance with GAAP,
with detailed calculations of lower of cost or market to occur on at least a
monthly basis, which meet such standards of eligibility as the Administrative
Agent or the Canadian Administrative Agent shall establish from time to time in
its reasonable discretion; provided that no inventory shall be deemed Eligible
Inventory unless each of the following statements is accurate and complete (and
the Person by including such inventory in any computation of the applicable
Borrowing Base shall be deemed to represent and warrant to the Administrative
Agent, each Issuing Bank and the Lenders the accuracy and completeness of such
statements):
(1) Such inventory is in good condition, merchantable, meets
all standards imposed by any Governmental Authority having regulatory authority
over it or its use and/or sale and is not obsolete and is either currently
usable or currently salable in the normal course of business of such Person;
(2) Such inventory is either (a) in possession of such Person
and (1) located on Real Property owned or leased by such Person, and (2) within
the United States or Canada
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(provided that if such inventory is located on Real Property leased by such
Person, the landlord of such Real Property shall have executed and delivered to
the Administrative Agent or the Canadian Administrative Agent, as applicable, a
Landlord Waiver Agreement) or (b) in the possession of a Bailee and such Bailee
shall have executed and delivered to the Administrative Agent or the Canadian
Administrative Agent, as applicable, a Bailee Letter or (c) in transit in Canada
(provided that the Canadian jurisdiction in question is a jurisdiction where the
Liens of the Canadian Administrative Agent and the Administrative Agent in such
inventory are validly perfected first-priority Liens) or the United States and
between Credit Parties, and upon arrival at its destination, will comply with
either paragraph (a)(1) or (a)(2) above;
(3) Each of the representations and warranties set forth in
the Security Instruments with respect to such inventory is true and correct on
such date;
(4) The Administrative Agent or the Canadian Administrative
Agent, as the case may be, on behalf of the applicable Lenders, has a
first-priority perfected Lien covering such inventory, and such inventory is,
and at all times will be, free and clear of all Liens other than Permitted Liens
under Section 7.3(c) or 7.3(d), subject to Availability Reserves in respect of
such Permitted Liens;
(5) Such inventory does not include goods that are not owned
by such Person, that are held by such Person pursuant to a consignment agreement
or which have been sold by such Person on a bill and hold basis;
(6) Such inventory is not subject to repossession under the
Bankruptcy and Insolvency Act (Canada) except to the extent the applicable
vendor has entered into an agreement with the Canadian Administrative Agent
waiving its right to repossession, which agreement shall be acceptable to the
Canadian Administrative Agent;
(7) Such inventory does not consist of work-in-process, store
room materials, supplies, parts, samples, prototypes, or packing and shipping
materials, but may consist of billets;
(8) Such inventory does not consist of goods that are
obsolete, slow-moving or returned or repossessed or used goods taken in trade;
(9) Any portion of the value of such inventory which results
from a profit or gain resulting from an inter-company sale or other disposition
of such inventory shall be excluded;
(10) Any "seconds" or scrap inventory shall be valued at scrap
value;
(11) Such inventory is not evidenced by negotiable documents
of title unless delivered to the applicable Agent with endorsements;
(12) Such inventory does not constitute Hazardous Materials;
(13) Such inventory is covered by casualty insurance; and
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(14) The Administrative Agent or the Canadian Administrative
Agent, as applicable, has not determined in its reasonable discretion that it
may not sell or otherwise dispose of such inventory in accordance with the terms
of the applicable Security Instruments without infringing upon the rights of
another Person or violating any contract with any other Person.
Any standards of eligibility established by the Administrative Agent or the
Canadian Administrative Agent in addition to those enumerated above shall not
become effective until the third Business Day following written notice of the
establishment of such new standard of eligibility has been given by the
Administrative Agent or the Canadian Administrative Agent to the applicable
Borrowers.
"ELIGIBLE INVENTORY ADVANCE PERCENTAGE" means 65%.
"ENVIRONMENTAL LAWS" means all federal, provincial, local or
foreign laws, rules, regulations, treaties, codes, ordinances, orders, decrees,
judgements, injunctions, notices or binding agreements issued, promulgated or
entered into by any Governmental Authority, whether or not having the force of
law (but in the case of any such matter not having the force of law, responsible
companies would customarily comply with such matter), relating in any way to the
environment, preservation or reclamation of natural resources, the generation,
use, handling, collection, treatment, storage, transportation, recovery,
recycling, release, threatened release or disposal of any Hazardous Material, or
to health and safety matters.
"EQUITY" means shares of capital stock or a partnership,
profits, capital or member interest, or options, warrants, rights to purchase,
participation rights or any other right to substitute for or otherwise acquire
the capital stock or a partnership, profits, capital or member interest however
designated, and whether voting or non-voting, of any Credit Party and shall
expressly include all "stock appreciation rights", "phantom stock", "profit
participations" and other similar interests.
"EQUITY DISTRIBUTION" shall have the meaning provided in
Section 7.5.
"ERISA" means the Employee Retirement Income Security Act of
1974, as amended, and any successor statute.
"ERISA AFFILIATE" means each trade or business (whether or not
incorporated) which together with any Borrower would be deemed to be a "single
employer" within the meaning of Section 4001(b)(1) of ERISA or Subsections
414(b), (c), (m) or (o) of the Code.
"ERISA TERMINATION EVENT" means (a) a "Reportable Event"
described in Section 4043 of ERISA and the regulations issued thereunder (other
than a "Reportable Event" not subject to the provision for 30-day notice to the
PBGC pursuant to regulations under Section 4043 of ERISA), (b) the withdrawal of
any Credit Party or any ERISA Affiliate from a Plan during a plan year in which
it was a "substantial employer" as defined in Section 4001(a)(2) of ERISA, (c)
the filing of a notice of intent to terminate a Plan or the treatment of a Plan
amendment as a termination under Section 4041(c) of ERISA, (d) the institution
of proceedings
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to terminate a Plan by the PBGC, or (e) any other event or condition which could
reasonably be expected to constitute grounds under Section 4042 of ERISA for the
termination of, or the appointment of a trustee to administer, any Plan.
"EVENT OF DEFAULT" shall have the meaning provided in Article
8.
"EXCESS AVAILABILITY" means, as of any date, the sum of (a)
the Canadian Excess Availability as of such date, and (b) the US Excess
Availability as of such date.
"EXCHANGE ACT" means the United States Securities Exchange Act
of 1934.
"EXCLUDED TAXES" means, with respect to the Administrative
Agent, the Canadian 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, income or franchise taxes imposed on (or measured by)
its net income by the United States of America (in the case of US Lenders) or
Canada (in the case of Canadian Lenders), 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. Notwithstanding the foregoing, "Excluded Taxes" shall not include any
Taxes imposed by means of withholding on or with respect to any payments made by
any Borrower pursuant to the Financing Documents, (i) except to the extent that
withholding taxes would not have been imposed with respect to a US Lender but
for any failure of such US Lender (after timely written notice from the Company
accompanied by a draft form of any such requirement prepared by the Company at
the Company's expense not earlier than 90 days prior to a due date thereof) to
comply with certification, information, documentation, reporting or other
similar requirements concerning the nationality, residence, identity, connection
with the jurisdiction imposing such Taxes or any other matters (including the
delivery by the US Lender of Internal Revenue Service Form WBEN or Form W-8ECI
(or any substitute form)) that is required by law as a condition to exemption or
the relief from, or reduction of, such Tax; provided that notwithstanding the
foregoing, such Taxes shall be Excluded Taxes only if such US Lender is eligible
to comply with such requirements or entitled to deliver such form and such US
Lender has in good faith determined it would suffer no adverse consequences by
providing the applicable certification, information, documentation, reporting or
other similar requirements (including increased expenses); and (ii) except to
the extent that the certification of the Lender under Section 2.21(e) hereunder
is or becomes incorrect other than as a result of a change in Tax law or
administrative practice of a tax authority, or unless an Event of Default shall
have occurred and be continuing (in either of which cases, the fact that the
certification of a Lender became incorrect shall not result in any Taxes
becoming Excluded Taxes).
"EXISTING INDEBTEDNESS" means all Funded Indebtedness of the
Credit Parties on the Closing Date, but excluding Loans and Letter of Credit
Liabilities.
"FEDERAL FUNDS EFFECTIVE RATE" means, for any day, the per
annum rate equal to the weighted average of the rates on overnight Federal funds
transactions with members of the Federal Reserve System arranged by Federal
funds brokers, as published for such day (or, if such
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day is not a Business Day, for the next preceding Business Day) by the Federal
Reserve Bank of New York, or, if such rate is not so published for any day which
is a Business Day, the average of the quotations for such day on such
transactions received by the Administrative Agent from three Federal funds
brokers of recognized standing selected by it.
"FINANCE COMPANY ACCOUNT AGREEMENT" shall mean that certain
Blocked Account Agreement, dated on or about the Closing Date, by and among The
Toronto-Dominion Bank, the Administrative Agent, the Canadian Administrative
Agent, GUSAP, NSULC and PASUG, as amended, restated, supplemented or otherwise
modified from time to time.
"FINANCIAL STATEMENTS" means the audited consolidated
financial statements and the unaudited consolidating financial statements of the
Company for the Fiscal Years ended December 31, 2002, and the unaudited
consolidated financial statements and the unaudited consolidating financial
statements of the Company for the months ended January, 2003 through May, 2003.
"FINANCING DOCUMENTS" means this Agreement, the Notes, the
Security Instruments, the Applications, Borrowing Requests, Borrowing Base
Reports, the Canadian Fee Letter, the US Fee Letter, and the other documents,
instruments or agreements described in Section 3.1 and Section 3.2 (other than
the documents, instruments or agreements described in Section 3.1(g), Section
3.1(h)(2), Section 3.1(h)(3), Section 3.1(l) or Section 3.2(m)), together with
any other document, instrument or agreement (other than participation, agency or
similar agreements among the Lenders or between any Lender and any other bank or
creditor with respect to any indebtedness or obligations of the Company or any
Credit Party hereunder or thereunder) now or hereafter entered into by a Credit
Party in connection with the Loans, the Lender Indebtedness or the Collateral,
as such documents, instruments or agreements may be amended, modified or
supplemented from time to time.
"FISCAL QUARTER" means the fiscal quarter of the Company and
each of the Borrowers, ending on the last day of each of March, June, September
and December of each year.
"FISCAL YEAR" means the fiscal year of the Company and each of
the Borrowers, ending on the last day of December of each year.
"FIXED CHARGE COVERAGE RATIO" means, as to the Company and the
other Credit Parties on a consolidated basis, determined for any period, the
ratio of (a) EBITDA for such period minus Capital Expenditures made during such
period (other than Capital Expenditures made during such period which are
financed, within 90 days of such Capital Expenditures, by Equity or by
Indebtedness permitted by any of Sections 7.2(g), (j), (k) or (m)), to (b) the
sum of (1) scheduled principal payments on Funded Indebtedness during such
period, and any prepayment during such period of Indebtedness incurred in such
period or in a prior period to finance Capital Expenditures plus (2) Adjusted
Interest Expense for such period, plus (3) cash taxes paid during such period,
plus (4) Equity Distributions paid by the Company during such period (other than
in respect of payments or distributions made in the ordinary course of business
on account of "stock appreciation rights", "phantom stock", "profit
participations" and other
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similar interests to the extent deducted in computing EBITDA), plus (5) the
amount by which cash pension payments during such period exceeds pension
accruals during such period.
"FUNDED INDEBTEDNESS" means, as to any Person, without
duplication, all Indebtedness for borrowed money, all obligations evidenced by
bonds, debentures, notes, or other similar instruments, all Capital Lease
Obligations, and all guaranties of Funded Indebtedness of other Persons.
"GAAP" means generally accepted accounting principles in the
United States of America as in effect from time to time (consistently applied),
including those set forth in the opinions and pronouncements of the Accounting
Principles Board of the American Institute of Certified Public Accountants and
statements and pronouncements of the Financial Accounting Standards Board or in
such other statements by such other entity as approved by a significant segment
of the accounting profession. All ratios and computations based on GAAP
contained in the Agreement will be computed in conformity with GAAP.
"GOVERNMENTAL AUTHORITY" means any federal, state, provincial,
territorial, county, city, municipal or other political subdivision or
government, department, commission, board, bureau, court, agency or any other
instrumentality of any of them, which exercises jurisdiction over any Credit
Party or any Property (including the use and/or sale thereof) of any Credit
Party.
"GOVERNMENTAL REQUIREMENT" means any law, statute, code,
ordinance, order, rule, regulation, judgment, decree, injunction, franchise,
permit, certificate, license, authorization or other direction or requirement
(including any of the foregoing which relate to Environmental Laws, energy
regulations and occupational, safety and health standards or controls) of any
Governmental Authority, whether or not having the force of law (but in the case
of any such matter not having the force of law, responsible companies would
customarily comply with such matter).
"GUARANTEES" means the Canadian Guarantee and the US Guaranty.
"GUSAP PAYMENT ACCOUNT" means account number 7343494
established by GUSAP with The Toronto-Dominion Bank, Toronto Branch.
"HAZARDOUS MATERIALS" means any substance, product, liquid,
waste, pollutant, chemical, contaminant, insecticide, pesticide, gaseous or
solid matter, organic or inorganic matter, fuel, micro-organism, ray, odor,
radiation, energy, vector, plasma, constituent or material which (a) is or
becomes listed, regulated or addressed under any Environmental Law, or (b) is,
or is deemed to be, alone or in any combination, hazardous, hazardous waste,
toxic, a pollutant, a deleterious substance, a contaminant or a source of
pollution or contamination under any Environmental Law, 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.
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"HIGHEST LAWFUL RATE" means, with respect to each Lender, the
maximum non-usurious interest rate, if any, that at any time or from time to
time may be contracted for, taken, reserved, charged or received on the Notes or
on other Lender Indebtedness, as the case may be, owed to it under the law of
any jurisdiction whose laws may be mandatorily applicable to such Lender.
"HOC" means, collectively, Co-Steel Liquidity Management
Hungary Limited Liability Company, Acierco S.A., and Goldmarsh Enterprises.
"HOSTILE ACQUISITION" means a proposed Acquisition by a Credit
Party in circumstances in which the Person subject to such Acquisition shall not
have evidenced its agreement or agreement in principle to such Acquisition by
means of (i) a definitive agreement of purchase and sale, or (ii) a letter of
intent in respect thereof.
"INDEBTEDNESS" of any Person means, without duplication:
(a) all obligations of such Person for borrowed money and
obligations evidenced by bonds, debentures (including convertible debentures),
notes or other similar instruments;
(b) all obligations of such Person (whether contingent or
otherwise) in respect of bankers' acceptances, letters of credit, surety or
other bonds and similar instruments;
(c) all obligations of such Person to pay the deferred
purchase price of Property or services (other than for borrowed money);
(d) all Capital Lease Obligations in respect of which such
Person is liable, contingently or otherwise, as obligor, guarantor or otherwise,
or in respect of which obligations such Person otherwise assures a creditor
against loss;
(e) all guaranties (direct or indirect), and other contingent
obligations of such Person in respect of, or obligations to purchase or
otherwise acquire or to assure payment of, Indebtedness or other obligations of
other Persons;
(f) Indebtedness of others secured by any Lien upon Property
owned by such Person, whether or not assumed;
(g) all obligations or undertakings of such Person to maintain
or cause to be maintained the financial position or financial covenants of other
Persons;
(h) the net amount of obligations (measured on a
mark-to-market basis) of such Person under agreements of the types described in
the definition of Swap Agreements; and
(i) any "synthetic lease", "tax retained operating lease" or
similar lease financing arrangements under which the tenant is treated as the
owner of property for tax purposes but such lease is treated as an operating
lease in accordance with GAAP.
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"INDEMNIFIED TAXES" means Taxes other than Excluded Taxes.
"INTEREST EXPENSE" means, as to any Person for any period,
without duplication, total interest expenses, whether paid or accrued as
liabilities (including the interest component of Capital Lease Obligations),
with respect to all outstanding Indebtedness, including, without limitation, all
commissions, discounts and other fees and charges owed with respect to any
financing or letters of credit and net costs under any Swap Agreement to the
extent that such costs are included within interest expense in the Company's
financial statements prepared in accordance with GAAP; provided that "Interest
Expense" shall not include any one-time expenses (including non-cash charges)
not to exceed $8,000,000 relating to the termination of any Swap Agreement
existing on the Closing Date which is terminated within six months after the
Closing Date or relating to the write-off of deferred financing costs in
connection with the transactions contemplated by this Agreement.
"INTEREST PERIOD" means, with respect to each Borrowing of
LIBOR Loans or B/A Loans, an interest period complying with Section 2.7.
"INVENTORY" has the meaning given to such term in Section
9-102(a)(48) of the UCC or Section 1 of the PPSA, as applicable.
"INVENTORY LIMIT" means the lesser of (a) sixty percent (60%)
of the Revolving Credit Commitments, and (b) $175,000,000; provided that if
there is a Commitment Increase pursuant to Section 2.1(h), then such
$175,000,000 amount shall be increased by an amount equal to 50% of such
Commitment Increase.
"INVESTMENT" means, with respect to any Person, all
investments by such Person in other Persons (including Affiliates) in the form
of any direct or indirect advance, loan (other than advances or extensions of
credit to customers in the ordinary course of business) or other extensions of
credit (including by way of guarantee or similar arrangement, but excluding any
debt or extension of credit represented by a bank deposit other than a time
deposit) or capital contribution to (by means of any transfer of cash or other
property to others or any payment for property or services for the account or
use of others), or any purchase or acquisition of Equity, bonds, notes,
debentures or other similar instruments issued by, such other Person and all
other items that are or would be classified as investments on a balance sheet
prepared in accordance with GAAP; provided that none of the following will be
deemed to be an Investment:
(1) obligations under Swap Agreements entered into in the
ordinary course of business and in compliance with this Agreement; and
(2) endorsements of negotiable instruments and documents in
the ordinary course of business.
"ISSUING BANK" means (a) for each US Letter of Credit, the
Lender or Lenders designated by the Company and approved in writing by such
Lender and the Administrative Agent (such approval by the Administrative Agent
not to be unreasonably withheld) as the issuing bank for US Letters of Credit
hereunder and (b) for each Canadian Letter of Credit, the
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Lender or Lenders designated by the Company and approved in writing by such
Lender and the Canadian Administrative Agent (such approval by the Canadian
Administrative Agent not to be unreasonably withheld) as the issuing bank for
Canadian Letters of Credit hereunder.
"LANDLORD WAIVER AGREEMENT" means an agreement executed and
delivered by each landlord of Real Property leased by any Borrower pursuant to
which such landlord subordinates or waives all of its Liens to the Liens of the
Administrative Agent or the Canadian Administrative Agent (as applicable) in the
Property of such Borrower located on the leased Real Property.
"L/C COVER", when required by this Agreement for Letter of
Credit Liabilities of an Account Party, shall be effected by paying to the
Administrative Agent in the case of US Letter of Credit Liabilities or the
Canadian Administrative Agent in the case of Canadian Letter of Credit
Liabilities, in immediately available funds, to be held by the Administrative
Agent or the Canadian Administrative Agent, as applicable, in a collateral
account maintained by the Administrative Agent or the Canadian Administrative
Agent, as applicable, and which accounts shall be under the sole dominion and
control of, the Administrative Agent or the Canadian Administrative Agent, as
applicable, and collaterally assigned as security pursuant to the Financing
Documents, an amount equal to 105% of the maximum amount of each applicable
Letter of Credit issued for the account of such account party which is available
for drawing at any time. Such amount shall be retained by the Administrative
Agent or the Canadian Administrative Agent, as applicable, in such collateral
account until such time as the applicable Letter of Credit shall have expired
and the Reimbursement Obligations, if any, with respect thereto shall have been
fully satisfied.
"LENDER" and "LENDERS" shall have the meanings set forth in
the opening paragraph hereof.
"LENDER INDEBTEDNESS" means, without duplication, any and all
amounts owing or to be owing by any Credit Party to the Administrative Agent,
the Canadian Administrative Agent, the Issuing Banks or the Lenders with respect
to or in connection with the Loans, any Letter of Credit Liabilities, the Notes,
any Swap Agreement between a Credit Party and any Lender or one of its Secured
Affiliates, any Cash Management Agreement between a Credit Party and any Lender
or one of its Cash Management Affiliates, this Agreement, or any other Financing
Document and, as to Swap Agreements and Cash Management Agreements, any and all
amounts owing or to be owing by any Credit Party thereunder to any Lender or any
of its Secured Affiliates or any Lender or its Cash Management Affiliates, as
applicable.
"LENDING OFFICE" means for each Lender the office specified
opposite such Lender's name on the signature pages hereof, or in the Assignment
and Acceptance pursuant to which it became a Lender, with respect to each Type
of Loan, or such other office as such Lender may designate in writing from time
to time to the Company and the Administrative Agent with respect to such Type of
Loan; provided that Lending Offices for Canadian Revolving Lenders shall be in
Canada.
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"LETTER OF CREDIT" means any Canadian Letter of Credit or US
Letter of Credit, and "LETTERS OF CREDIT" means Canadian Letters of Credit and
US Letters of Credit, collectively.
"LETTER OF CREDIT LIABILITIES" means the US Letter of Credit
Liabilities and Canadian Letter of Credit Liabilities, collectively.
"LIBOR LOAN" means a US Revolving Credit Loan or a Canadian
Revolving Credit Loan that is a Dollar Denominated Loan bearing interest at the
rate provided in Section 2.6(b).
"LIBOR RATE" means, with respect to any Borrowing of LIBOR
Loans for any Interest Period, the product of (a) (1) the interest rate per
annum shown on page 3750 of the Dow Jones & Company Telerate screen or any
successor page as the composite offered rate for London interbank deposits with
a period comparable to the Interest Period for such LIBOR Loan, as shown under
the heading "USD" at 11:00 A.M. (London time) two Business Days prior to the
first day of such Interest Period or (2) if the rate in clause (1) of this
definition is not shown for any particular day, the average interest rate per
annum (rounded upwards, if necessary, to the next 1/16th of 1%) offered to the
Administrative Agent in the London interbank market for Dollar deposits of
amounts in funds comparable to the principal amount of the LIBOR Loan to which
such LIBOR Rate is to be applicable with maturities comparable to the Interest
Period for which such LIBOR Rate will apply as of approximately 10:00 a.m. (New
York, New York time) two Business Days prior to the commencement of such
Interest Period, times (b) Statutory Reserves, if any.
"LIEN" means any interest in Property securing an obligation
owed to, or a claim by, a Person other than the owner of the Property, whether
such interest is based on contract, constitutional, common, or statutory law,
and including but not limited to the lien or security interest arising from a
mortgage, hypothec, encumbrance, pledge, security agreement, conditional sale or
trust receipt or a lease, consignment or bailment for security purposes. The
term "Lien" shall include reservations, exceptions, encroachments, easements,
rights of way, covenants, conditions, restrictions, liens and other statutory,
constitutional, or common law rights of landlords, leases and other title
exceptions and encumbrances affecting Property. For the purposes of this
Agreement, any Person shall be deemed to be the owner of any Property which it
has acquired or holds subject to a conditional sale agreement, financing lease
or other arrangement pursuant to which title to the Property has been retained
by or vested in some other Person for security purposes.
"LOAN" means a Revolving Credit Loan, a US Swingline Loan, a
Canadian Swingline Loan or an Agent Advance and "LOANS" means the Revolving
Credit Loans, the US Swingline Loans, the Canadian Swingline Loans and the Agent
Advances or one or more of them as provided herein.
"LOCKBOX" means any lockbox to be established and operated
pursuant to Section 4.3 and Section 4.4 hereof and a Lockbox Agreement.
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"LOCKBOX AGREEMENT" means one or more lockbox agreements,
tri-party agreements, or similar documents setting forth certain terms
applicable to the establishment and operation of the applicable Lockbox to be
entered into between the Borrowers (or any of them) and the US Lockbox Bank or
the Canadian Lockbox Bank, in form and substance acceptable to, the
Administrative Agent, the Canadian Administrative Agent, the US Lockbox Bank or
the Canadian Lockbox Bank (acting reasonably).
"MARGIN STOCK" shall have the meaning provided in Regulations
T, U and X.
"MATERIAL ADVERSE CHANGE" means any event, development or
change in circumstance that has had or could reasonably be expected to have a
Material Adverse Effect.
"MATERIAL ADVERSE EFFECT" means any material and adverse
effect on (a) the business, operations, assets, liabilities, condition
(financial or otherwise), prospects, or results of operations of the Credit
Parties taken as a whole, (b) the validity or enforceability of any of the
Financing Documents or the rights and remedies of the Administrative Agent, the
Canadian Administrative Agent or the Lenders thereunder, or (c) the perfection
or priority of any Liens securing the Lender Indebtedness.
"MATURITY DATE" means June 27, 2008, or such other date to
which the Maturity Date has been extended pursuant to Section 2.10(d).
"NOTES" means the Revolving Credit Notes, the US Swingline
Note and the Canadian Swingline Notes.
"NSULC" means 3038482 Nova Scotia Company, a Nova Scotia
unlimited liability company.
"NSULC PAYMENT ACCOUNT" means account number 7343486
established by GUSAP with The Toronto-Dominion Bank, Toronto Branch.
"OTHER TAXES" means any and all present or future stamp or
documentary taxes or any other excise or property taxes, charges or similar
levies arising from any payment made hereunder or from the execution, delivery
or enforcement of, or otherwise with respect to, this Agreement.
"PASUG" means PASUG LLC, a Delaware limited liability company.
"PASUG OPERATING ACCOUNT" means the account maintained by
PASUG at a financial institution acceptable to the Administrative Agent, acting
reasonably.
"PASUG PAYMENT ACCOUNT" means account number 7343478
established by PASUG with The Toronto-Dominion Bank, Toronto Branch.
"PAYMENT OFFICE" means (a) with respect to US Loans, the
Administrative Agent's office located at New York, New York (or such other
office or individual as the Administrative Agent may hereafter designate in
writing to the other parties hereto), and (b) with
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respect to Canadian Loans, the Canadian Administrative Agent's office located at
Toronto, Ontario (or such other office or individual as the Canadian
Administrative Agent may hereafter designate in writing to the other parties
hereto).
"PBGC" means the Pension Benefit Guaranty Corporation, or any
successor thereto.
"PERFECTION CERTIFICATES" means a Certificate from a
Responsible Officer of each Credit Party substantially in the form of Exhibit G
hereto to be delivered to the Administrative Agent on the Closing Date.
"PERFECTION CERTIFICATE UPDATE" means a Certificate from a
Responsible Officer of each Credit Party substantially in the form of Exhibit G
hereto to be delivered monthly pursuant to Section 6.10(d) hereof and setting
forth all changes that would be required to be made to the Perfection
Certificates (as updated pursuant to any prior Perfection Certificates) to cause
the Perfection Certificates to be accurate and complete if reissued as of the
last day of the month immediately preceding the month in which the Perfection
Certificate is required to be delivered pursuant to Section 6.10(d) hereof.
"PERMITTED ACQUISITION" means any Acquisition by a Credit
Party which is (i) of a Person carrying on a business which is the same as or
related, ancillary or complementary to the business carried on by the such
Credit Party, or if an asset Acquisition, is of assets used or useful in a
business which is the same as or related, ancillary or complementary to the
business carried on by such Credit Party; (ii) in respect of which such Credit
Party has provided a certificate of the Chief Financial Officer of such Credit
Party, at least twenty (20) days prior to the closing date for such Acquisition,
containing information satisfactory to the Administrative Agent, acting
reasonably, regarding the cost of such Acquisition, the financial and
acquisition structure of such Acquisition, audited financial statements (or, if
not available, unaudited financial statements, or, if unaudited financial
statements are not available, other financial information satisfactory to the
Administrative Agent, acting reasonably) of the subject of such Acquisition for
the previous two years, and financial projections, on a quarterly basis, for the
next two years (with copies of all of the foregoing financial and other
information to be provided by the applicable Credit Party to each of the
Lenders); (iii) in respect of which the Administrative Agent or the Canadian
Administrative Agent, as applicable, shall have received Lien search reports, in
form and substance satisfactory to the Administrative Agent or the Canadian
Administrative Agent, as applicable, and the Administrative Agent or the
Canadian Administrative Agent, as applicable, will, upon consummation of such
Acquisition, have a first priority, perfected Lien over any accounts and
inventory to be acquired, subject only to Permitted Liens, and if such
Acquisition is an Acquisition of Equity of any Person, such Person shall have
executed and delivered a counterpart to the applicable Security Instruments and
such other agreements, documents and instruments as the Administrative Agent or
the Canadian Administrative Agent may reasonably request, in each case in form
and substance satisfactory to the Administrative Agent and the Lenders; (iv) if
such Acquisition is an Acquisition of Equity of a Person and the accounts or
inventory of such Person are to be included in the Canadian Borrowing Base or
the US Borrowing Base, such Person shall have executed and delivered a joinder
agreement to this Agreement becoming a Canadian Borrower or a US Borrower, as
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applicable, hereunder and such other agreements, documents and instruments as
the Administrative Agent or the Canadian Administrative Agent may reasonably
request, in each case in form and substance satisfactory to the Administrative
Agent and the Lenders; (v) if the cash purchase price of such Acquisition is
paid by one or more of the US Operating Borrowers, the percentage ownership
interest (directly or through a Subsidiary) in any assets acquired by each US
Operating Borrower or the percentage of Equity acquired by each US Operating
Borrower, as applicable, in connection with such Acquisition shall be equal to
the percentage of the aggregate consideration paid by such US Operating Borrower
in connection with such Acquisition; (vi) average Excess Availability,
calculated both for the ninety (90) day period ending on the date of such
Acquisition, and immediately after giving effect to such Acquisition, will be no
less than $50,000,000 (it being understood that the Administrative Agent will
require a Collateral Report in respect of any assets forming a part of such
Acquisition before such Acquisition and in order to confirm Excess Availability,
if a Collateral Report has not been delivered to the Administrative Agent within
90 days prior to the date of such Acquisition, the Administrative Agent will
also require a new Collateral Report in respect of the assets of all of the
Credit Parties; (vii) both before and after giving effect to such Acquisition,
no Default shall then exist; (viii) if such Acquisition is an Acquisition of
Equity of any Person, such Credit Party acquires not less than 80% of the Equity
of such Person; and (ix) not a Hostile Acquisition. In addition to the normal
criteria for accounts or inventory to be an Eligible Account or Eligible
Inventory, respectively, no account or inventory acquired in connection with any
Acquisition shall be an Eligible Account or Eligible Inventory, respectively,
until the Administrative Agent or the Canadian Administrative Agent, as
applicable, shall have received a Collateral Report in respect of such accounts
or inventory, as applicable; however, upon completion of a Permitted
Acquisition, and following receipt by the Administrative Agent or the Canadian
Administrative Agent, as applicable, of the required Collateral Report, any
acquired accounts or inventory which constitute Eligible Accounts or Eligible
Inventory, as applicable, will be included in the Canadian Borrowing Base or the
US Borrowing Base, as applicable.
"PERMITTED CASH APPLICATION" in respect of any U.S. Borrower
means the application of cash by such Borrower or by PASUG on behalf of such
Borrower (which payments will be treated as an advance by PASUG to such
Borrower) to (i) reduce amounts owing by such Borrower to PASUG in respect of
prior advances by PASUG to such Borrower as a result of prior Permitted Cash
Applications, (ii) make payments for the fair value of goods and services
received by or enjoyed by such Borrower in the ordinary course of business,
(iii) pay Indebtedness of such Borrower, including such Borrower's allocated
portion of Swingline Loans, Revolving Credit Loans and Reimbursement
Obligations, (iv) pay to a third party the purchase price of assets to be
acquired by such Borrower, (v) pay to a third party the purchase price of Equity
of an entity which will become a Credit Party and (vi) pay any other amount for
a general corporate purpose of such Borrower provided, however, that an
application of cash contemplated above shall constitute a "Permitted Cash
Application" only to the extent that such application of cash is not in
contravention of any of the other terms of this Agreement. Any Permitted Cash
Application that is applied to or for the benefit of any Credit Party other than
the US Operating Borrower in respect of which the applicable US Swingline Loan
was made shall constitute a US Operating Borrower Advance and shall be subject
to all limitations contained in this Agreement relating thereto.
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"PERMITTED EQUITY ACQUISITION" means an Acquisition by a
Credit Party which (i) of a Person carrying on a business which is the same as
or related, ancillary or complementary to the business carried on by the such
Credit Party; (ii) in respect of which such Credit Party has provided a
certificate of the Chief Financial Officer of such Credit Party, at least twenty
(20) days prior to the closing date for such Acquisition, containing information
satisfactory to the Administrative Agent, acting reasonably, regarding the cost
of such Acquisition, the financial and acquisition structure of such
Acquisition, audited financial statements (or, if not available, unaudited
financial statements, or, if unaudited financial statements are not available,
other financial information satisfactory to the Administrative Agent, acting
reasonably) of the subject of such Acquisition for the previous two years, and
financial projections, on a quarterly basis, for the next two years (with copies
of all of the foregoing financial and other information to be provided by the
applicable Credit Party to each of the Lenders); (iii) in respect of which the
Administrative Agent or the Canadian Administrative Agent, as applicable, shall
have received Lien search reports, in form and substance satisfactory to the
Administrative Agent or the Canadian Administrative Agent, as applicable, and
the Administrative Agent or the Canadian Administrative Agent, as applicable,
will, upon consummation of such Acquisition, have a first priority, perfected
Lien over any accounts and inventory to be acquired, subject only to Permitted
Liens, (iv) the Person being acquired shall have executed and delivered a
counterpart to the applicable Security Instruments and such other agreements,
documents and instruments as the Administrative Agent or the Canadian
Administrative Agent may reasonably request, in each case in form and substance
satisfactory to the Administrative Agent and the Lenders; (v) if the accounts or
inventory of the Person being acquired are to be included in the Canadian
Borrowing Base or the US Borrowing Base, such Person shall have executed and
delivered a joinder agreement to this Agreement becoming a Canadian Borrower or
a US Borrower, as applicable, hereunder and such other agreements, documents and
instruments as the Administrative Agent or the Canadian Administrative Agent may
reasonably request, in each case in form and substance satisfactory to the
Administrative Agent and the Lenders; and (vi) both before and after giving
effect to such Acquisition, no Default shall then exist. In addition to the
normal criteria for accounts or inventory to be an Eligible Account or Eligible
Inventory, respectively, no account or inventory acquired in connection with any
Acquisition shall be an Eligible Account or Eligible Inventory, respectively,
until the Administrative Agent or the Canadian Administrative Agent, as
applicable, shall have received a Collateral Report in respect of such accounts
or inventory, as applicable; however, upon completion of a Permitted Equity
Acquisition, and following receipt by the Administrative Agent or the Canadian
Administrative Agent, as applicable, of the required Collateral Report, any
acquired accounts or inventory which constitute Eligible Accounts or Eligible
Inventory, as applicable, will be included in the Canadian Borrowing Base or the
US Borrowing Base, as applicable.
"PERMITTED HOLDER" means Gerdau S.A. or any of its
wholly-owned subsidiaries.
"PERMITTED LIENS" shall have the meaning assigned in Section
7.3 hereof.
"PERMITTED NEW AFFILIATE SUBORDINATED DEBT" means Indebtedness
incurred by a Credit Party at any time after the Closing Date, provided that (i)
the creditor under such Indebtedness is an Affiliate of such Credit Party which
is not also a Credit Party, (ii) such
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Indebtedness is not assignable by the creditor thereunder, except to another
Affiliate of such Credit Party, (iii) such Indebtedness is unsecured and, in any
bankruptcy, insolvency, liquidation, receivership, winding-up or other similar
proceeding, is subordinated in right of payment to the prior payment of all
Lender Indebtedness, (iv) such Indebtedness accrues interest at a rate
determined in good faith by the Board of Directors to be a market rate of
interest for such Indebtedness at the time of issuance thereof, (v) no amount is
payable on account of such Indebtedness (whether on account of principal,
interest, fees or otherwise) if a Default has occurred and is continuing or if
Excess Availability is less than $50,000,000, either before or immediately after
giving effect to the payment, (vi) such Indebtedness is permitted under the 144A
Indenture as in effect on the date hereof without the need to obtain any waivers
thereunder, and (vii) such Indebtedness is otherwise on terms and conditions
satisfactory to the Administrative Agent, acting reasonably.
"PERMITTED NEW DEBT" means Indebtedness incurred by a Credit
Party at any time after the Closing Date, provided that (i) no material terms
applicable to such Indebtedness (including covenants and events of default) are
materially less favourable (taken as a whole) to the Credit Parties than the
terms that are applicable under the 144A Indenture, (ii) such Indebtedness is
unsecured, matures on a date not earlier than the six (6) months after the
Maturity Date and does not include any amortization payments, (iii) such
Indebtedness accrues interest at a rate determined in good faith by the Board of
Directors to be a market rate of interest for such Indebtedness at the time of
issuance thereof, (iv) such Indebtedness is permitted under the 144A Indenture
as in effect on the date hereof without the need to obtain any waivers
thereunder, and (v) such Indebtedness is otherwise on terms and conditions
satisfactory to the Administrative Agent, acting reasonably.
"PERMITTED REORGANIZATION" means the proposed reorganization
described in Schedule 1.1(A), which reorganization shall be completed no later
than 30 days following the Closing Date.
"PERSON" includes any natural person, corporation, company,
limited liability company, unlimited liability company, trust, joint venture,
association, incorporated organization, partnership, Governmental Authority or
other entity.
"PLAN" means any employee pension benefit plan, as defined in
Section 3(2) of ERISA (including, but not limited to, an employee pension
benefit plan, such as a foreign plan, which is not subject to the provisions of
ERISA), which (a) is currently or hereafter sponsored, maintained or contributed
to by any Credit Party or an ERISA Affiliate, or (b) was at any time during the
six preceding Fiscal Years sponsored, maintained or contributed to by any Credit
Party or an ERISA Affiliate.
"PPSA" means the Personal Property Security Act (Ontario) as
from time to time in effect in the Province of Ontario or where applicable to a
specific Credit Party or Collateral, any other relevant province.
"PRIME RATE" means the rate which JPMorgan Chase Bank
announces from time to time as its prime rate for Dollar-denominated Loans made
in the United States of America,
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effective as of the date announced as the effective date of any change in such
prime rate. Without notice to the Company or any other Person, the Prime Rate
shall change automatically from time to time as and in the amount by which such
prime rate shall fluctuate. The Prime Rate is a reference rate and does not
necessarily represent the lowest or best rate actually charged to any customer.
"PROJECTIONS" means the consolidated and consolidating
projections of the results of operations and financial condition of the Company
and its consolidated Subsidiaries for Fiscal Year ending on December 31, 2003, a
copy of which has been provided to the Administrative Agent and the Lenders and
is attached hereto as Schedule 1.1(B).
"PROPERTY" means any interest in any kind of property or
asset, whether real, personal or mixed, or tangible or intangible.
"REAL PROPERTY" means any right, title or interest in and to
real property, including any fee interest, leasehold interest, easement, or
license and any other right to use or occupy real property, including any right
arising by contract.
"REGISTER" shall have the meaning assigned in Section 10.7(c).
"REGULATION D", "REGULATIONS T, U AND X" means, respectively,
Regulation D under the Securities Act of 1933, as amended or modified from time
to time, and Regulations T, U and X of the Board of Governors of the Federal
Reserve System, as such regulations are from time to time in effect and any
successor regulations thereto.
"REIMBURSEMENT OBLIGATIONS" means, at any date, the obligation
of the Canadian Borrowers then outstanding in respect of Canadian Letters of
Credit and the obligation of the US Borrowers then outstanding in respect of US
Letters of Credit, to reimburse the Administrative Agent or the Canadian
Administrative Agent, as applicable, for the account of the Issuing Bank for the
amount paid by the Issuing Bank in respect of any drawings under such Letters of
Credit.
"RELATED AFFILIATE" means (a) with respect to any US Revolving
Lender, such Lender's Affiliate, if any, which is a Canadian Revolving Lender
hereunder, and (b) with respect to any Canadian Revolving Lender, such Lender's
Affiliate, if any, which is a US Revolving Lender hereunder.
"REQUIRED LENDERS" means: (a) at any time that the Revolving
Credit Commitments remain in effect, the Lenders with aggregate Revolving Credit
Commitments in an aggregate amount in excess of 50% of the sum of all Revolving
Credit Commitments, and (b) after the Revolving Credit Commitments have
terminated, the Lenders having Revolving Credit Exposure in an aggregate amount
in excess of 50% of the Aggregate Revolving Credit Exposure.
"RESPONSIBLE OFFICER" means, with respect to any Person, the
chairman of the board, the president, the chief executive officer or the chief
operating officer, or any equivalent
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officer (regardless of his or her title), and, in respect of financial or
accounting matters, the chief financial officer, the vice president of finance,
the treasurer, the controller, or any equivalent officer (regardless of his or
her title). Unless otherwise specified, all references to a Responsible Officer
herein means a Responsible Officer of the Company, GUSAP or PASUG and, to the
extent that Loans are made directly by the Lender to a US Operating Borrower
pursuant to the terms hereof, a Responsible Officer of such US Operating
Borrower.
"REVOLVING CREDIT COMMITMENTS" means collectively, the US
Revolving Credit Commitments and the Canadian Revolving Credit Commitments.
"REVOLVING CREDIT EXPOSURE" means, at any time for each
Revolving Lender, the sum of such Lender's US Revolving Credit Exposure and
Canadian Revolving Credit Exposure at such time.
"REVOLVING CREDIT LOAN" means, collectively, the US Revolving
Credit Loans and the Canadian Revolving Credit Loans.
"REVOLVING CREDIT NOTES" means, collectively, the US Revolving
Credit Notes and the Canadian Revolving Credit Notes.
"REVOLVING LENDERS" means, collectively, the US Revolving
Lenders and the Canadian Revolving Lenders.
"ROLLING PERIOD" means any period of twelve (12) consecutive
months.
"SECURED AFFILIATE" means any Affiliate of any Lender that has
entered into a Swap Agreement with any Credit Party with the obligations of such
Credit Party thereunder being secured by one or more Security Instruments.
"SECURITIES PLEDGE AGREEMENTS" means the Canadian Securities
Pledge Agreement and the US Securities Pledge Agreement.
"SECURITY AGREEMENTS" means the Canadian Security Agreement
and the US Security Agreement.
"SECURITY INSTRUMENTS" means any and all agreements or
instruments now or hereafter executed and delivered by any Credit Party or any
other Person as security for the payment or performance of the Lender
Indebtedness or the Canadian Lender Indebtedness, as any of the foregoing may be
amended, modified or supplemented and includes, without limitation, the
Guarantees, the Security Agreements and the Securities Pledge Agreements.
"SOLVENT" means with respect to any Person on a particular
date, the condition that, on such date, (a) the fair value of the property of
such Person is greater than the total amount of liabilities, including, without
limitation, contingent liabilities, of such Person, (b) the present fair salable
value of the assets of such Person is not less than the amount that will be
required to pay the probable liabilities of such Person on its debts as they
become absolute and matured, (c) such Person does not intend to, and does not
believe that it will, incur debts or
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liabilities beyond such Person's ability to pay as such debts and liabilities
mature, and (d) such Person is not engaged in business or a transaction, and is
not about to engage in business or a transaction, for which such Person's
property would constitute an unreasonably small amount of capital.
"SPOT EXCHANGE RATE" means, on any day, the spot rate at which
Dollars are offered on such day by Canadian Imperial Bank of Commerce in
Toronto, Ontario, Canada for C$ at the opening of business on such day (Toronto,
Ontario, Canada time).
"STANDBY LETTER OF CREDIT" means a letter of credit that (a)
is used in lieu or in support of performance guarantees or performance, surety
or other similar bonds (but expressly excluding stay and appeal bonds) arising
in the ordinary course of business, (b) is used in lieu or in support of stay or
appeal bonds, (c) supports the payment of insurance premiums for reasonably
necessary casualty insurance carried by any of the Borrowers, or (d) supports
payment or performance for identified purchases or exchanges of products or
services in the ordinary course of business.
"STATUTORY RESERVES" 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 applicable reserve
percentages, including any marginal, special, emergency or supplemental reserves
(expressed as a decimal) established by the Board and any other banking
authority to which the Lenders are subject for Eurocurrency Liabilities (as
defined in Regulation D) or any other category of deposits or liabilities by
reference to which the LIBOR Rate is determined. Such reserve percentages shall
include those imposed pursuant to Regulation D. LIBOR Loans shall be deemed to
constitute Eurocurrency Liabilities 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.
Statutory Reserves shall be adjusted automatically on and as of the effective
date of any change in any reserve percentage.
"SUBSIDIARY" means, with respect to any Person (the "parent")
at any date, any corporation, limited liability company, unlimited liability
company, partnership, limited 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, unlimited liability company, partnership, limited
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 a subsidiary of the Company.
"SWAP AGREEMENT" means any interest rate, currency or
commodity swap, cap, floor, collar, forward agreement, futures contract or other
protection agreement or option with
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respect to any such transaction, designed to hedge against fluctuations in
interest rates, currency exchange rates or commodity prices.
"SWAP RESERVES" means, an amount (reflected in Dollars),
calculated as of the last day of each month and separately for the US Borrowers
and the Canadian Borrowers, equal to such Borrowers' liability under the Swap
Agreements to which such Borrowers are a party and any exposure of the Lenders
or Secured Affiliates with respect to such Swap Agreements.
"SWINGLINE LOANS" means, collectively, the Canadian Swingline
Loans and the US Swingline Loans.
"TAXES" means all taxes, charges, fees, levies, imposts and
other assessments, including all income, sales, use, goods and services, value
added, capital, capital gains, alternative, net worth, transfer, profits,
withholding, payroll, employer health, excise, real property and personal
property taxes, and any other taxes, customs duties, fees, assessments, or
similar charges in the nature of a tax, including Canada Pension Plan and
provincial pension plan contributions, unemployment insurance payments and
workers' compensation premiums, together with any instalments with respect
thereto, and any interest, fines and penalties with respect thereto, imposed by
any Governmental Authority (including federal, state, provincial, municipal and
foreign Governmental Authorities), and whether disputed or not.
"TRANSACTIONS" means the transactions provided for in and
contemplated by this Agreement and the other Financing Documents.
"TYPE" of Loan means an ABR Loan, a LIBOR Loan, a Canadian
Prime Loan, or a B/A Loan and shall also refer to a C$ Denominated Loan or a
Dollar Denominated Loan.
"UCC" means the Uniform Commercial Code as from time to time
in effect in the State of New York or, where applicable to a specific Credit
Party or Collateral, any other relevant state.
"US BASE RATE" means the rate of interest for Dollar
denominated loans publicly announced by JPMorgan Chase Bank, Toronto Branch from
time to time as its US Base Rate in effect at its principal office in Toronto,
Ontario, Canada for commercial loans made in Canada.
"US BLOCKED ACCOUNT" means a Blocked Account established by
the US Borrowers with the US Lockbox Bank.
"US BORROWERS" shall have the meaning set forth in the initial
paragraph hereof.
"US BORROWING BASE" means, only with respect to a US Operating
Borrower, the amount equal to the sum of:
(1) the Eligible Account Advance Percentage of such US
Operating Borrower's Eligible Accounts, plus
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(2) the lesser of (i) the Eligible Inventory Advance
Percentage of such US Operating Borrower's Eligible Inventory, (ii) 85% of the
appraised net recovery value of such US Operating Borrower's Eligible Inventory,
determined by reference to the net recovery percentages determined by the most
recent inventory appraisal, or (iii) the US Inventory Limit, plus
(3) the amount, if any, of the Canadian Excess Availability
which GUSAP or a US Operating Borrower has elected to include in the US
Borrowing Base of a US Operating Borrower pursuant to Section 2.2(a).
The US Borrowing Base in effect under this Agreement at any time for any US
Operating Borrower shall be the US Borrowing Base for such US Operating Borrower
reflected on the most recent US Borrowing Base Report delivered to the
Administrative Agent and the Canadian Administrative Agent pursuant to Section
6.10(g) hereof subject to (a) immediate adjustment by the Administrative Agent
or the Canadian Administrative Agent, to the extent that the calculation of any
components thereof is not in accordance with this Agreement, and (b) immediate
adjustment as result of any changes in eligibility standards required by the
Administrative Agent, acting reasonably.
"US CREDIT PARTY" means the US Borrowers and any other Credit
Party which is organized or formed under the laws of any state of the United
States or any state thereof.
"US EXCESS AVAILABILITY" means, as of any date, the remainder
of (a) the remainder of (i) the aggregate US Borrowing Base as of such date,
minus, without duplication, (ii) the Availability Reserves with respect to the
aggregate US Borrowing Base as of such date, minus (b) the aggregate outstanding
balance of the US Lender Indebtedness as of such date and the aggregate face
amount of undrawn US Letters of Credit as of such date. US Excess Availability
shall always be determined on the basis that all debts and obligations shall be
current, and all accounts payable shall be handled in the normal course of the
Borrowers' business consistent with their past practices.
"US FEE LETTER" means the letter agreement, dated the Closing
Date, regarding fees payable by the US Borrowers to the Administrative Agent.
"US GUARANTY" means that certain US Guaranty dated as of the
date hereof and executed by each Credit Party in favour of the Administrative
Agent, as amended, modified, renewed, supplemented or restated from time to
time.
"US INVENTORY LIMIT" means the amount of the Inventory Limit
which the US Borrowers designate as the "US Inventory Limit" on the US Borrowing
Base Report from which the US Borrowing Base (on an aggregate basis for all US
Operating Borrowers) is being calculated; provided, that, in no event shall the
sum of the Canadian Inventory Limit and the US Inventory Limit ever exceed the
Inventory Limit.
"US LENDER" means a US Revolving Lender or a US Swingline
Lender.
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"US LENDER INDEBTEDNESS" means any and all amounts owing or to
be owing by any US Credit Party to the Administrative Agent, the Canadian
Administrative Agent, the Issuing Banks or the Lenders with respect to or in
connection with the US Loans, any US Letter of Credit Liabilities, the US
Revolving Credit Notes, any Swap Agreement between any of the US Borrowers and
any Lender or any Secured Affiliate thereof, any Cash Management Agreement
between any of the US Borrowers and Lender or its Cash Management Affiliate,
this Agreement, or any other Financing Document and, as to Swap Agreements or
any Cash Management Agreement, any and all amounts owing or to be owing by any
US Credit Party thereunder to any Lender or any of its Secured Affiliates or any
Lender or any of its Cash Management Affiliates, respectively.
"US LETTER OF CREDIT" and "US LETTERS OF CREDIT" shall have
the meanings assigned to such terms in Section 2.3(a).
"US LETTER OF CREDIT LIABILITIES" means, at any time and in
respect of any US Letter of Credit, the sum of (a) the amount available for
drawings under such US Letter of Credit as of the date of determination, plus
(b) the aggregate unpaid amount of all Reimbursement Obligations due and payable
as of the date of determination in respect of previous drawings made under such
US Letter of Credit.
"US LOCKBOX" means any lockbox to be established and operated
pursuant to Section 4.3 hereof and a US Lockbox Agreement.
"US LOCKBOX BANK" means the financial institution designated
by the US Borrowers or the Administrative Agent to act as the US Lockbox Bank
and consented to in writing by the US Borrowers and the Administrative Agent
(which consents shall not be unreasonably withheld provided, however that the
consent of the US Borrowers shall not be required if a Default has occurred and
is continuing) and which has entered into the US Lockbox Agreement.
"US LOCKBOX AGREEMENT" means an agreement between the US
Borrowers and the US Lockbox Bank governing the US Lockbox.
"US LOANS" means the US Revolving Credit Loans, the US
Swingline Loans and the Agent Advances made to or in connection with the US
Borrowers.
"US MAXIMUM AVAILABLE AMOUNT" means, at any date, an amount
equal to the lesser of (a) the aggregate US Revolving Credit Commitments as of
such date, and (b) the remainder of (i) the aggregate US Borrowing Base as of
such date, minus (ii) the sum of (A) the Availability Reserves with respect to
the aggregate US Borrowing Base as of such date, plus (B) the portion of the
Swap Reserves and the Cash Management Reserves applicable to the US Borrowers as
of the last day of the month for which the US Borrowing Base is being
calculated.
"US OPERATING BORROWERS" means, collectively, Ameristeel U.S.,
Perth Amboy, Sayreville, Lake Ontario, Distribution US, Porter Bros. and MFT,
and "US OPERATING BORROWER" means any such US Borrower.
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"US OPERATING BORROWER ADVANCE" means (a) a loan or other
advance made by any US Operating Borrower to any other Credit Party (other than
PASUG, GUSAP or NSULC), and shall expressly include, the application of proceeds
from collections of accounts or advances owing to such U.S. Operating Borrower,
or the retention of such proceeds by such other Credit Party, in the name of or
to or for the account of any Person other than the applicable U.S. Operating
Borrower; or (b) a loan or other advance by PASUG to any other Credit Party
(other than GUSAP or NSULC) that is made out of proceeds from collections of
accounts owing to a US Operating Borrower, or that is made out of the proceeds
of US Loans allocated to any other US Operating Borrower.
"US OPERATING BORROWER NET ADVANCE AMOUNT" means, at any time
and without duplication,
(a) for any Credit Party other than a US Operating Borrower or PASUG, the
amount, if positive, of all US Operating Borrower Advances owing by such Credit
Party at such time;
(b) for PASUG only, the outstanding amount, if positive, of all funds held by
PASUG at such time, including any funds that have been invested by PASUG in its
own name, which constitute proceeds from collections of accounts, or from
advances owing by any Person to any Credit Party other than PASUG (which give
rise to an inter-company payable to such other Credit Party) or the retention of
any proceeds from U.S. Loans, but excluding (i) any amounts that are received by
PASUG and are to be promptly applied towards the payment of principal, interest
or fees in respect of Revolving Credit Loans or the 144A Notes, including
applications in the form of dividends and return capital to NSULC, and (ii) any
amounts on deposit in the PASUG Operating Account; and
(c) for any US Operating Borrower and at any time, the amount, if positive, by
which (i) the amount equal to (x) the aggregate amount of all US Operating
Borrower Advances owing by such US Operating Borrower at such time, plus (y) the
aggregate outstanding amount of all US Loans that have been made in respect to
such US Operating Borrower at such time, minus (z) the amount of US Operating
Borrower Advances made by such Operating Borrower; exceeds (ii) the amount equal
to (x) the US Borrowing Base for such US Operating Borrower then in effect,
minus (y) the aggregate amount of all US Letter of Credit Liabilities relating
to such US Operating Borrower at such time, minus (z) any Availability Reserves,
Swap Reserves, and Cash Management Reserves relating to such US Operating
Borrower. At any time that US Operating Borrower Net Advance Amount for any US
Operating Borrower is less than zero, such amount shall be deemed to be zero.
"US REVOLVING CREDIT COMMITMENT" shall have the meaning
assigned to such term in Section 2.1(c).
"US REVOLVING CREDIT EXPOSURE" means, at any time and as to
each US Revolving Lender, the sum of (a) the aggregate principal amount of US
Revolving Credit Loans made by such US Revolving Lender outstanding as of such
date, plus (b) other than for purposes of Section 2.1(c) and 2.11(a) hereof,
unless the Administrative Agent or the Required Lenders otherwise direct, the
accrued and unpaid interest on US Revolving Credit Loans made by such
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US Revolving Lender outstanding as of such date, plus (c) such US Revolving
Lender's US Revolving Credit Percentage of the aggregate amount of all US Letter
of Credit Liabilities as of such date, plus (d) such US Revolving Lender's US
Revolving Credit Percentage of the US Swingline Exposure as of such date, plus
(e) the US Revolving Credit Percentage of the aggregate principal amount of the
Agent Advances made to the US Borrowers as of such date.
"US REVOLVING CREDIT LOAN" shall have the meaning provided in
Section 2.1(a); the US Revolving Credit Loans shall not include any US Letter of
Credit Liabilities.
"US REVOLVING CREDIT NOTE" means, a promissory note of the US
Borrowers described in Section 2.5(a) payable to any US Revolving Lender and
being substantially in the form of Exhibit H, evidencing the aggregate joint and
several Indebtedness of the US Borrowers to such US Revolving Lender resulting
from US Revolving Credit Loans made by such US Revolving Lender.
"US REVOLVING CREDIT PERCENTAGE" means as to any US Revolving
Lender, the percentage of the aggregate US Revolving Credit Commitments
constituted by its US Revolving Credit Commitment (or, if the US Revolving
Credit Commitments have terminated or expired, the percentage which such US
Revolving Lender's Revolving Credit Exposure at such time constitutes of the
Aggregate US Revolving Credit Exposure at such time).
"US REVOLVING LENDER" means a Lender with a US Revolving
Credit Commitment.
"US SECURITIES PLEDGE AGREEMENT" means that certain US
Securities Pledge Agreement dated as of the date hereof and executed by each
Credit Party in favour of the Administrative Agent providing for and
constituting a first-priority Lien in favour of the Administrative Agent on the
Collateral described therein, as amended, modified, renewed, supplemented or
restated from time to time.
"US SECURITY AGREEMENT" means that certain US Security
Agreement dated as of the date hereof and executed by each Credit Party in
favour of the Administrative Agent providing for and constituting a
first-priority Lien in favour of the Administrative Agent on the Collateral
described therein, as amended, modified, renewed, supplemented or restated from
time to time.
"US SWINGLINE AVAILABILITY" means, on any date, an amount
equal to the remainder of (a) the US Swingline Commitment, minus (b) the US
Swingline Exposure on such date.
"US SWINGLINE COMMITMENT" shall have the meaning assigned to
such term in Section 2.1(e).
"US SWINGLINE EXPOSURE" means, at any time, the aggregate
principal amount of all US Swingline Loans made to PASUG (or to the US Operating
Borrowers if US Swingline
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Loans have been made by the US Swingline Lender directly to one or more US
Operating Borrowers pursuant to the terms hereof) outstanding at such time.
"US SWINGLINE LENDER" means The CIT Group/Business Credit,
Inc., in its capacity as lender of US Swingline Loans hereunder.
"US SWINGLINE LOANS" shall have the meaning assigned to such
term in Section 2.1(a).
"US SWINGLINE NOTE" means a promissory note of PASUG and the
US Borrowers described in Section 2.5(c) payable to the US Swingline Lender and
being substantially in the form of Exhibit I, evidencing the aggregate joint and
several Indebtedness of PASUG and the US Operating Borrowers to the US Swingline
Lender resulting from US Swingline Loans made by the US Swingline Lender.
"VOTING STOCK" of any Person means Equity of such Person which
ordinarily has voting power for the election of directors (or persons performing
similar functions) of such Person, whether at all times or only so long as no
senior class of securities has such voting power by reason of any contingency.
SECTION 1.2 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". The word "or"
is disjunctive; the word "and" is conjunctive. The word "shall" is mandatory;
the word "may" is permissive. The words "to the knowledge of" means, when
modifying a representation, warranty or other statement of any Person, that the
fact or situation described therein is known by the Person (or, in the case or a
Person other than a natural Person, known by any Responsible Officer of that
Person) making the representation, warranty or other statement, or with the
exercise of reasonable due diligence under the circumstances (in accordance with
the standard of what a reasonable Person in similar circumstances would have
done) would have been known by the Person (or, in the case of a Person other
than a natural Person, would have been known by such Responsible Officer of that
Person). 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 statute or any section thereof shall, unless
otherwise expressly stated, be deemed to be a reference to such statute or
section as amended, restated or re-enacted from time to time, (c) any reference
herein to any Person shall be construed to include such Person's successors and
permitted assigns, (d) 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, (e) all references herein to
Articles, Sections, Exhibits and Schedules shall be construed to refer to
Articles and Sections of, and Exhibits and Schedules to, this Agreement, and (f)
the words "asset" and "property" shall be construed to have the same meaning and
effect and to refer to any
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and all tangible and intangible assets and properties, including cash,
securities, accounts and contract rights. All references to time will be to
Eastern time. Any reference to a specific bank account shall include any
replacement, substitution or redesignation of such bank account provided that
(x) the Administrative Agent and the Canadian Administrative Agent are provided
with prior written notice of such replacement, substitution or redesignation,
(y) the Canadian Administrative Agent and the Administrative Agent provide their
written consent to such replacement, substitution or redesignation to the
applicable Credit Party (such consent not to be unreasonably withheld) and (z)
the Canadian Administrative Agent and the Administrative Agent are satisfied,
acting reasonably, that the replacement, substituted or redesignated bank
account is or will be subject to a validly perfected first-priority Lien in
favour of the Canadian Administrative Agent and/or the Administrative Agent.
SECTION 1.3 ACCOUNTING TERMS; GAAP. Except as otherwise expressly provided
herein, all terms of an accounting or financial nature shall be construed in
accordance with GAAP. All calculations for the purposes of determining
compliance with the financial ratios and financial covenants contained herein
shall be made on a basis consistent with GAAP in existence as at the date of
this Agreement and used in the preparation of the financial statements of the
Borrowers referred to in Section 5.6. Any financial ratios required to be
maintained by the Borrowers pursuant to this Agreement shall be calculated by
dividing the appropriate component by the other component, carrying the result
to one place more than the number of places by which such ratio is expressed in
this Agreement and rounding the result up or down to the nearest number (with a
round-up if there is no nearest number) to the number of places by which such
ratio is expressed in this Agreement.
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ARTICLE 2
AMOUNT AND TERMS OF LOANS
SECTION 2.1 LOANS AND COMMITMENTS.
(a) LOANS. Subject to the terms and conditions and relying on the
representations and warranties contained herein, (A) on any Business
Day from and after the Closing Date, but prior to the Maturity Date,
each US Revolving Lender severally, but not jointly, agrees to make
revolving credit loans in Dollars (each a "US REVOLVING CREDIT LOAN")
to GUSAP, or PASUG (or directly to the US Operating Borrowers in
accordance with the terms hereof), (B) on any Business Day from and
after the Closing Date, but prior to the Maturity Date, each Canadian
Revolving Lender severally, but not jointly, agrees to make revolving
credit loans in either Dollars or C$ (each a "CANADIAN REVOLVING CREDIT
LOAN") to the Canadian Borrowers, (C) on any Business Day from and
after the Closing Date, but prior to the Maturity Date, the US
Swingline Lender agrees to make revolving Swingline loans in Dollars
(each a "US SWINGLINE LOAN") to PASUG for and on behalf of the US
Operating Borrowers (or directly to a US Operating Borrower in
accordance with the terms hereof), and (D) on any Business Day from and
after the Closing Date, but prior to the Maturity Date, the Canadian
Swingline Lender agrees to make revolving Swingline loans in Dollars or
C$ (each a "CANADIAN SWINGLINE LOAN") to the Canadian Borrowers.
(b) TYPES OF LOANS. (1) The Dollar Denominated Loans made pursuant hereto
shall, at the option of the US Borrowers or the Canadian Borrowers, as
applicable, be either ABR Loans or LIBOR Loans and may be continued or
converted pursuant to Section 2.12, (2) the C$ Denominated Loans made
pursuant hereto shall, at the option of the Canadian Borrowers, be
either Canadian Prime Loans or B/A Loans and may be continued or
converted pursuant to Section 2.12, (3) the US Swingline Loans made
pursuant hereto shall be ABR Loans, (4) the Dollar Denominated Canadian
Swingline Loans made pursuant hereto shall be ABR Loans, and (5) the C$
Denominated Canadian Swingline Loans made pursuant hereto shall be
Canadian Prime Loans; provided, that, except as otherwise specifically
provided herein, all Loans made pursuant to the same Borrowing shall be
of the same Type.
(c) US REVOLVING CREDIT COMMITMENTS. Each US Revolving Lender's US
Revolving Credit Exposure shall not exceed at any one time the amount
set forth opposite such US Revolving Lender's name on Annex I under the
caption "US Revolving Credit Commitment" (as the same may be increased
pursuant to Section 2.1(h), adjusted pursuant to Section 2.10(a) or
otherwise from time to time modified pursuant to Section 10.7, its "US
REVOLVING CREDIT COMMITMENT," and collectively for all US Revolving
Lenders, the "US REVOLVING CREDIT COMMITMENTS"; the term "US Revolving
Credit Commitments" includes the requirements of the US Revolving
Lenders to purchase participations in the US Swingline Loans pursuant
to Section 2.26 hereof and its obligation to purchase participations in
Agent Advances to the US Borrowers pursuant to Section 2.28(b));
provided, however, that the Aggregate US Revolving Credit Exposure at
any one time outstanding shall not exceed the US Maximum Available
Amount in
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effect at such time, except that Agent Advances may result in the
Aggregate US Revolving Credit Exposure exceeding the amount
contemplated in clause (b) of the definition of "US MAXIMUM AVAILABLE
AMOUNT" so long as the Aggregate US Revolving Credit Exposure shall not
exceed the amount contemplated in clause (a) of the definition of "US
MAXIMUM AVAILABLE AMOUNT". Within the foregoing limits and subject to
Section 2.2(a) and the conditions set forth in Article 3, the US
Borrowers may obtain Borrowings of US Revolving Credit Loans, repay or
prepay such US Revolving Credit Loans, and reborrow such US Revolving
Credit Loans.
(d) CANADIAN REVOLVING CREDIT COMMITMENTS. The Dollar Equivalent of each
Canadian Revolving Lender's Canadian Revolving Credit Exposure shall
not exceed at any one time the amount set forth opposite such Canadian
Revolving Lender's name on Annex I under the caption "Canadian
Revolving Credit Commitment" (as the same may be increased pursuant to
Section 2.1(h), adjusted pursuant to Section 2.10(a) or otherwise from
time to time modified pursuant to Section 10.7, its "CANADIAN REVOLVING
CREDIT COMMITMENT," and collectively for all Canadian Revolving
Lenders, the "CANADIAN REVOLVING CREDIT COMMITMENTS"; the term
"Canadian Revolving Credit Commitments" includes the requirements of
the Canadian Revolving Lenders to purchase participations in the
Canadian Swingline Loans pursuant to Section 2.27 hereof; provided,
however, that the Dollar Equivalent of the Aggregate Canadian Revolving
Credit Exposure at any one time outstanding shall not exceed the
Canadian Maximum Available Amount in effect at such time, except that
Agent Advances may result in the Aggregate Canadian Revolving Credit
Exposure exceeding the amount contemplated in clause (b) of the
definition of "CANADIAN MAXIMUM AVAILABLE AMOUNT" so long as the
Aggregate Canadian Revolving Credit Exposure shall not exceed the
amount contemplated in clause (a) of the definition of "CANADIAN
MAXIMUM AVAILABLE AMOUNT". Within the foregoing limits and subject to
the conditions set forth in Article 3, the Canadian Borrowers may
obtain Borrowings of Canadian Revolving Credit Loans, repay or prepay
such Canadian Revolving Credit Loans, and reborrow such Canadian
Revolving Credit Loans.
(e) US SWINGLINE LOANS. The US Swingline Lender's US Swingline Exposure
shall not exceed at any one time the amount set forth opposite the US
Swingline Lender's name on Annex I under the caption "US Swingline Loan
Commitment" (as the same may be adjusted pursuant to Section 2.10(b))
(the "US SWINGLINE COMMITMENT"); provided, however, the Aggregate US
Revolving Credit Exposure at any one time outstanding shall not exceed
the US Maximum Available Amount in effect at such time. Within the
foregoing limits set forth herein, PASUG may obtain Borrowings of US
Swingline Loans, repay or prepay such US Swingline Loans, and reborrow
such US Swingline Loans.
(f) CANADIAN SWINGLINE LOANS. The Canadian Swingline Lender's Canadian
Swingline Exposure shall not exceed at any one time the amount set
forth opposite the Canadian Swingline Lender's name on Annex I under
the caption "Canadian Swingline Loan Commitment" (as the same may be
adjusted pursuant to Section 2.10(b)) (the "CANADIAN
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SWINGLINE COMMITMENT"); provided, however, the Aggregate Canadian
Revolving Credit Exposure at any one time outstanding shall not exceed
the Canadian Maximum Available Amount in effect at such time. Within
the foregoing limits set forth herein, the Canadian Borrowers may
obtain Borrowings of Canadian Swingline Loans, repay or prepay such
Canadian Swingline Loans, and reborrow such Canadian Swingline Loans.
(g) AMOUNTS OF BORROWINGS, ETC. The aggregate principal amount of each
Borrowing from all Lenders (1) of LIBOR Loans shall be (A) in a minimum
amount of $5,000,000, and (B) in an integral multiple of $1,000,000,
(2) of US Revolving Credit Loans which are ABR Loans shall be in
minimum amount of $1,000,000 and shall be in an integral multiple of
$100,000, (3) of Canadian Revolving Credit Loans which are ABR Loans
shall be not less than $100,000 and shall be in an integral multiple of
$50,000, (4) of Canadian Prime Loans shall be not less than C$100,000
and shall be in an integral multiple of C$50,000, (5) of B/A Loans
shall be (A) in a minimum aggregate amount (for all Lenders) of
C$5,000,000, and (B) in an integral multiple of C$1,000,000, (6) of US
Swingline Loans shall be in any amount, and (7) of Canadian Swingline
Loans shall be in any amount. Borrowings of more than one Type of Loan
may be outstanding at the same time; provided, however, that the
Borrowers shall not be entitled to request any Borrowing that, if made,
would result in an aggregate of more than ten separate Borrowings of
LIBOR Loans (of which no more than seven separate Borrowings of LIBOR
Loans may be made under the Canadian Revolving Commitment or the US
Revolving Commitment) or more than four B/A Loans being outstanding at
any one time. For purposes of the foregoing, Borrowings having
different Interest Periods, regardless of whether they commence on the
same date, shall be considered separate Borrowings.
(h) COMMITMENT INCREASES. Subject to the terms and conditions hereof, at
any time after the Closing Date and up to the Maturity Date, provided
that no Default has occurred and is continuing and Excess Availability
is not less than $40,000,000, the Borrowers may request that the
Lenders increase the Commitments by an aggregate amount of up to
$100,000,000 (each such commitment increase, a "COMMITMENT INCREASE").
Notwithstanding anything in this Agreement, no Commitment Increase
shall require the approval of any Lender other than any Lender
providing all or part of the Commitment Increase, no Lender shall be
required to provide all or part of any Commitment Increase unless it
agrees to do so in its sole discretion, and the aggregate amount of all
Commitment Increases shall not exceed $100,000,000. Any Commitment
Increase shall be offered by the Borrowers to the Lenders pro rata in
accordance with the Commitments of the Lenders on the date that the
Commitment Increase is requested. The Lenders shall have fifteen (15)
Business Days to respond to any request for a Commitment Increase. Any
Lender which fails to respond to a request for a Commitment Increase
within such fifteen-day period will be deemed to have declined the
request for such portion of the requested Commitment Increase. If any
portion of a requested Commitment Increase is not provided by the
Lenders, then the Borrowers may request that one or more Persons
acceptable to the Administrative Agent and the Canadian Administrative
Agent provide such Commitment Increase. In any such case, the Person
providing such portion of the requested Commitment Increase shall
execute and deliver to the Administrative Agent,
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the Canadian Administrative Agent and the Borrowers all such
documentation as may be reasonably required by the Administrative Agent
and the Canadian Administrative Agent to evidence such Commitment
Increase (including the fact that such Person shall have become a
Lender under this Agreement). The Administrative Agent will notify the
Lenders upon the implementation of any Commitment Increase.
SECTION 2.2 BORROWING REQUESTS.
(a) US REVOLVING CREDIT BORROWING REQUESTS.
(1) Whenever a US Borrower desires to make a Borrowing of US
Revolving Credit Loans hereunder, GUSAP or PASUG, as
applicable (or, following the exercise by the Administrative
Agent of its rights under Section 2.2(c), the requesting US
Operating Borrower) shall give Advance Notice to the
Administrative Agent in the form of a Borrowing Request,
specifying, subject to the provisions hereof, (i) the
aggregate principal amount of the US Revolving Credit Loans to
be made pursuant to such Borrowing, (ii) the date of Borrowing
(which shall be a Business Day), (iii) whether the Dollar
Denominated Loans being made pursuant to such Borrowing are to
be ABR Loans or LIBOR Loans, and (iv) in the case of LIBOR
Loans, the Interest Period to be applicable thereto. Subject
to Section 2.2(c), all US Revolving Credit Loans are to be
made to GUSAP or PASUG, as applicable, for application in
accordance with Section 2.4(b).
(2) The US Borrowers acknowledge and agree that availability of US
Revolving Credit Loans hereunder shall be determined by
reference to the individual US Borrowing Base of the US
Operating Borrower to which any requested Borrowing shall be
allocated in accordance with this Section 2.2(a)(2),
notwithstanding that the US Borrower to which such requested
Borrowing is originally advanced is GUSAP or PASUG.
Accordingly, any Borrowing Request issued pursuant to this
Section 2.2(a) shall, in addition to the information required
to be specified above, also (i) specify the US Borrowing Base
of the US Operating Borrower (the "APPLICABLE US OPERATING
BORROWER") to which the requested Borrowing shall be allocated
(and any such allocation by GUSAP or PASUG shall be
irrevocable by GUSAP or PASUG, as applicable), (ii) certify
that, both before and after giving effect to the requested
Borrowing, the Allocated US Revolving Credit Exposure of the
Applicable US Operating Borrower will not exceed the US
Borrowing Base of such Applicable US Operating Borrower minus
Availability Reserves applicable to such Applicable US
Operating Borrower, and (iii) be executed by a Responsible
Officer of GUSAP or PASUG, as applicable. In connection with a
Borrowing Request under this Section 2.2(a), GUSAP or PASUG,
as applicable, shall be entitled, at its election, to include
in the US Borrowing Base for an Applicable US Operating
Borrower all or a portion of the Canadian Excess Availability
at such time, provided that such Borrowing Request (i)
specifies that the Borrowers have elected to include such
Canadian Excess Availability in a US Borrowing Base, (ii)
specifies the US Borrowing Base to which such Canadian Excess
Availability is to be added, and (iii) specifies the
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amount of the Canadian Excess Availability that is to be so
added (and a copy of such Borrowing Request is delivered by
GUSAP or PASUG, as applicable, to the Canadian Administrative
Agent concurrently with its delivery to the Administrative
Agent). Each of the Borrowers acknowledges and agrees that any
allocation of Canadian Excess Availability pursuant to the
preceding sentence shall result in a concurrent reduction of
the Canadian Borrowing Base in an amount equal to such
allocation.
(b) US SWINGLINE BORROWING REQUESTS.
(1) Whenever the US Borrowers desire to make a Borrowing of US
Swingline Loans hereunder, PASUG (or, following the exercise
by the Administrative Agent of its rights under Section
2.2(c), the requesting US Operating Borrower) shall give
Advance Notice to the Administrative Agent in the form of a
Borrowing Request, specifying, subject to the provisions
hereof, (i) the aggregate principal amount of the US Swingline
Loan to be made pursuant to such Borrowing, and (ii) the date
of Borrowing (which shall be a Business Day). The Lenders
acknowledge and agree that subject to Section 2.2(b)(2) and
Section 2.2(c), it is intended that all US Swingline Loans are
to be made to PASUG.
(2) The US Borrowers acknowledge and agree that availability of US
Swingline Loans hereunder shall be determined by reference to
the individual US Borrowing Base of the US Borrower to which
any requested Borrowing of Swingline Loans shall be allocated
in accordance with this Section 2.2(b)(2), notwithstanding
that the US Borrower to which such requested Borrowing is
originally advanced is PASUG. Accordingly, any Borrowing
Request issued pursuant to this Section 2.2(b) shall, in
addition to the information required to be specified above,
also (i) specify the Applicable US Operating Borrower to which
the requested Borrowing shall be allocated (and any such
allocation by PASUG shall be irrevocable by PASUG), (ii)
certify that, both before and after giving effect to the
requested Borrowing, the Allocated US Revolving Credit
Exposure of the Applicable US Operating Borrower will not
exceed the US Borrowing Base of such Applicable US Operating
Borrower minus Availability Reserves applicable to such
Applicable US Operating Borrower, and (iii) be executed by a
Responsible Officer of PASUG. In connection with a Borrowing
Request under this Section 2.2(b), PASUG shall be entitled, at
its election, to include in the US Borrowing Base for an
Applicable US Operating Borrower, all or a portion of the
Canadian Excess Availability at such time, provided that such
Borrowing Request specifies that PASUG has elected to include
such Canadian Excess Availability in a US Borrowing Base,
specifies the US Borrowing Base to which such Canadian Excess
Availability is to be added, and specifies the amount of the
Canadian Excess Availability that is to be so added (and a
copy of such Borrowing Request is delivered by PASUG to the
Canadian Administrative Agent concurrently with its delivery
to the Administrative Agent). Each of the Borrowers
acknowledges and agrees that any allocation of Canadian Excess
Availability pursuant to the
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preceding sentence shall result in a concurrent reduction of
the Canadian Borrowing Base in an amount equal to such
allocation.
(c) MODIFICATIONS TO CREDIT FACILITY. Each US Borrower agrees and
acknowledges that the present structure of the credit facilities
detailed in this Agreement is based in part upon the financial and
other information presently known to the Administrative Agent, the
Canadian Administrative Agent and the Lenders regarding each Borrower,
the corporate structure of the Borrowers, and the present financial
condition of each Borrower. During the continuance of an Event of
Default, or in the event that Excess Availability shall at any time be
less than $75,000,000 the Administrative Agent, at its discretion or at
the direction of the Required Lenders, shall have the right, by notice
to the Borrowers to require that any or all of the following changes be
made to these credit facilities: (1) restrict future loans and advances
between the Borrowers, (2) establish separate lockbox and Blocked
Accounts for each US Borrower, (3) separate future US Swingline Loans
and US Revolving Credit Loans into separate revolving credit loans to
each of the US Operating Borrowers as shall be determined by the
Administrative Agent or the Required Lenders, (4) require that no
further US Revolving Credit Loans be made to GUSAP or PASUG and/or that
no further US Swingline Loans be made to PASUG, but instead be made
directly to the US Operating Borrowers, (5) require that all payments
in respect of any outstanding Loans be made directly to the
Administrative Agent and the Lenders by the US Operating Borrowers and
not by or to any of PASUG, NSLUC or GUSAP, and (6) establish such other
procedures as shall be determined by the Administrative Agent or the
Required Lenders, acting reasonably, to ensure the proper
administration of any further US Revolving Credit Loans and US
Swingline Loans. Upon five (5) Business Days written notice by the US
Operating Borrowers, any such changes shall be reversed if, at the time
of such written notice, (i) Excess Availability is greater than
$75,000,000 on such Business Day, and has been greater than $75,000,000
for a period of at least 90 consecutive days ending on such Business
Day, (ii) the US Borrowers deliver projections satisfactory to the
Administrative Agent, acting reasonably, demonstrating that Excess
Availability shall continue to be at least $75,000,000 for the 3
consecutive month period commencing on such Business Day, and (iii) no
other Default has occurred and is continuing on such Business Day. With
the Administrative Agent's and the Required Lenders' consent, Loans may
be made to one or more Borrowers as proposed by the Borrowers on such
further terms and conditions as the Administrative Agent and the
Required Lenders may require. In addition, at any time, the US
Borrowers and the Administrative Agent may mutually agree to make the
foregoing changes to these credit facilities. Any such agreement will
be evidenced by a written agreement among the US Borrowers and the
Administrative Agent. The Administrative Agent will notify the Lenders
promptly upon entering into any such written agreement.
(d) CANADIAN REVOLVING CREDIT BORROWING REQUESTS. Whenever a Canadian
Borrower desires to make a Borrowing hereunder, it shall give Advance
Notice to the Canadian Administrative Agent (with a simultaneous copy
to the Administrative Agent) in the form of a Borrowing Request,
specifying, subject to the provisions hereof, (1) the aggregate
principal amount of the Loan to be made pursuant to such Borrowing, (2)
whether such
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Loan is a Canadian Revolving Credit Loan or a Canadian Swingline Loan
(3) whether such Loan is to be a Dollar Denominated Loan or a C$
Denominated Loan, (4) the date of Borrowing (which shall be a Business
Day), (5) whether the Dollar Denominated Loans being made pursuant to
such Borrowing are to be ABR Loans or LIBOR Loans, (6) whether the C$
Dollar Denominated Loans being made pursuant thereto are to be Canadian
Prime Loans or B/A Loans, and (7) in the case of LIBOR Loans or B/A
Loans, the Interest Period to be applicable thereto.
(e) NOTICE BY THE ADMINISTRATIVE AGENT. The Administrative Agent or the
Canadian Administrative Agent (as applicable) shall promptly give to
the other, and to each applicable Lender, telecopy or telephonic notice
(and, in the case of telephonic notices, confirmed by telecopy or
otherwise in writing) of the proposed Borrowing (other than Borrowings
of US Swingline Loans or Canadian Swingline Loans, in which case notice
shall only be given the US Swingline Lender or the Canadian Swingline
Lender, as applicable), of such Lender's Applicable Percentage thereof
and of the other matters covered by the Advance Notice. The Borrowers
hereby waive the right to dispute the Administrative Agent's record of
the terms of such telephonic notice, absent manifest error.
SECTION 2.3 LETTERS OF CREDIT.
(a) ISSUANCE OF US LETTERS OF CREDIT. Subject to the terms and conditions
hereof, the US Borrowers shall have the right, in addition to US
Revolving Credit Loans provided for in Section 2.1, to utilize the US
Revolving Credit Commitments from time to time prior to the Maturity
Date by obtaining the issuance of either Documentary Letters of Credit
or Standby Letters of Credit for the account of any US Operating
Borrower by an Issuing Bank if such US Operating Borrower shall so
request in the notice referred to in Section 2.3(d)(1) (each such
letter of credit being referred to as a "US LETTER OF CREDIT", and
collectively referred to as the "US LETTERS OF CREDIT"); provided,
however, that, after giving effect to the issuance of any Letter of
Credit, the Allocated US Revolving Credit Exposure of the applicable US
Operating Borrower to which such Letter of Credit relates shall not
exceed the US Borrowing Base of such US Operating Borrower minus
Availability Reserves applicable to such US Operating Borrower, and
that the Aggregate US Revolving Credit Exposure at any one time
outstanding shall not exceed the US Maximum Available Amount in effect
at such time and the aggregate of all US Letter of Credit Liabilities
and the Dollar Equivalent of all Canadian Letter of Credit Liabilities
at any one time outstanding shall not exceed $100,000,000. US Letters
of Credit shall be denominated in Dollars and may be issued to support
the obligations of the US Operating Borrowers only. Upon the date of
the issuance of a US Letter of Credit, the applicable Issuing Bank
shall be deemed, without further action by any party hereto, to have
sold to each US Revolving Lender, and each US Revolving Lender shall be
deemed, without further action by any party hereto, to have purchased
from such Issuing Bank, a participation, to the extent of such
applicable Lender's US Revolving Credit Percentage, in such US Letter
of Credit and the related US Letter of Credit Liabilities. The parties
hereto acknowledge and agree that it is intended that in respect of US
Letters of Credit,
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the Account Party will be one of the US Operating Borrowers and that
all US Letter of Credit Liabilities under each such US Letter of Credit
shall be allocated to the US Borrowing Base of the US Operating
Borrower who is the Account Party thereof consistent with Section
2.2(a)(2) hereof.
(b) ISSUANCE OF CANADIAN LETTERS OF CREDIT. Subject to the terms and
conditions hereof, the Canadian Borrowers shall have the right, in
addition to Canadian Revolving Credit Loans provided for in Section
2.1, to utilize the Canadian Revolving Credit Commitments from time to
time prior to the Maturity Date by obtaining the issuance of either
Documentary Letters of Credit or Standby Letters of Credit for its
account or the account of any other Canadian Credit Party by an Issuing
Bank if the Canadian Borrowers shall so request in the notice referred
to in Section 2.3(d)(1) (each such letter of credit being referred to
as a "CANADIAN LETTER OF CREDIT", and collectively referred to as the
"CANADIAN LETTERS OF CREDIT"); provided, however, that, the Dollar
Equivalent of the Aggregate Canadian Revolving Credit Exposure at any
one time outstanding shall not exceed the Canadian Maximum Available
Amount in effect at such time and the Dollar Equivalent of the
aggregate of the Dollar Equivalent of all Canadian Letter of Credit
Liabilities and US Letter of Credit Liabilities at any one time
outstanding shall not exceed $100,000,000. Canadian Letters of Credit
shall be denominated in Dollars or C$ as the Canadian Borrowers shall
elect and may be issued to support the obligations of the Canadian
Borrowers only. Upon the date of the issuance of a Canadian Letter of
Credit, the applicable Issuing Bank shall be deemed, without further
action by any party hereto, to have sold to each Canadian Revolving
Lender, and each Canadian Revolving Lender shall be deemed, without
further action by any party hereto, to have purchased from such Issuing
Bank, a participation, to the extent of such applicable Lender's
Canadian Revolving Credit Percentage, in such Canadian Letter of Credit
and the related Canadian Letter of Credit Liabilities.
(c) LIMITATIONS ON LETTERS OF CREDIT; CERTAIN EXISTING LETTERS OF CREDIT.
No Letter of Credit issued or extended pursuant to this Agreement shall
have an expiry date beyond the earlier of one year after the date of
issuance or sixty (60) days prior to the Maturity Date. No Letter of
Credit shall be issued within sixty (60) days of the Maturity Date. The
parties hereto acknowledge and agree that (i) the letters of credit
listed in Schedule 2.3 were issued by Bank of America N.A. at the
request and for the account of certain of the Credit Parties and remain
outstanding on the date hereof, (ii) such letters of credit shall be
deemed to be Letters of Credit issued and outstanding under this
Agreement, and (iii) Bank of America N.A. shall be deemed to be an
Issuing Bank under this Agreement in respect of such Letters of Credit.
(d) ADDITIONAL LETTER OF CREDIT PROVISIONS. The following additional
provisions shall apply to each Letter of Credit:
(1) Any of the US Operating Borrowers or the Canadian
Borrowers which desires an Issuing Bank to issue a Letter of Credit for its
account (an "ACCOUNT PARTY") shall give the Administrative Agent (or the
Canadian Administrative Agent in the event such Letter of Credit is a Canadian
Letter of Credit) and the Issuing Bank at least five (5) Business Days' prior
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notice in the form of a Borrowing Request (effective upon receipt), or in each
case, such shorter period as may be agreed to by the Administrative Agent (or
the Canadian Administrative Agent, as applicable) and such Issuing Bank,
specifying the date such Letter of Credit is to be issued (which shall be a
Business Day) and describing: (A) the face amount of the Letter of Credit and,
in the case of any Canadian Letter of Credit, the currency (Dollars or C$) in
which such Letter of Credit is to be denominated, (B) the expiration date of the
Letter of Credit, (C) the name and address of the beneficiary, (D) information
concerning the transaction proposed to be supported by such Letter of Credit as
the Administrative Agent (or the Canadian Administrative Agent, as applicable)
or such Issuing Bank may reasonably request, (E) such other information and
documents relating to the Letter of Credit as the Administrative Agent (or the
Canadian Administrative Agent, as applicable) or such Issuing Bank may
reasonably request, and (F) a precise description of documents and the verbatim
text of any certificate to be presented by the beneficiary, which, if presented
prior to the expiry date of the Letter of Credit, would require such Issuing
Bank to make payment under the Letter of Credit; provided that such Issuing
Bank, may require changes in such documents and certificates; and provided
further that such Issuing Bank shall not be required to issue any Letter of
Credit that conflicts with the Issuing Bank's policies and procedures relating
to the issuance and content of letters of credit. Each such notice shall be
accompanied by the applicable Issuing Bank's Application and by a certificate
executed by a Responsible Officer setting forth calculations evidencing
availability for such Letter of Credit pursuant to Section 2.3(d)(2) and stating
that all conditions precedent to such issuance have been satisfied. Each Letter
of Credit shall, to the extent not inconsistent with the express terms hereof or
the applicable Application, be subject to the Uniform Customs and Practice for
Documentary Credits (1993 Revision), International Chamber of Commerce
Publication No. 500 (together with any subsequent revisions thereof approved by
a Congress of the International Chamber of Commerce, the "UCP"), and shall, as
to matters not governed by the UCP, be governed by, and construed and
interpreted in accordance with, the laws of the Province of Ontario.
(2) No US Letter of Credit or Canadian Letter of Credit may be
issued if, after giving effect thereto, the Aggregate US Revolving Credit
Exposure or the Aggregate Canadian Revolving Credit Exposure would exceed the US
Maximum Available Amount or the Canadian Maximum Available Amount, respectively,
or if the Borrowing Base of the applicable Borrower is insufficient to cover the
Letter of Credit. On each day during the period commencing with the issuance of
any Letter of Credit and until such Letter of Credit shall have expired or have
been terminated, the US Revolving Credit Commitment or Canadian Revolving Credit
Commitment (as applicable) of each Lender shall be deemed to be utilized for all
purposes hereof in an amount equal to such Lender's Revolving Credit Percentage
of the amount of the Letter of Credit Liabilities related to such Letter of
Credit.
(3) Upon receipt from the beneficiary of any Letter of Credit
of any demand for payment thereunder, the Issuing Bank shall promptly notify the
Account Party for whose account such Letter of Credit was issued and the
Administrative Agent (or the Canadian Administrative Agent if such Letter of
Credit is a Canadian Letter of Credit) of such demand (provided that the failure
of an the Issuing Bank to give such notice shall not affect the Reimbursement
Obligations of the Account Party hereunder) and the Account Party shall
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immediately, and in any event no later than 10:00 a.m. (Eastern time) on the
date of such drawing, reimburse the Administrative Agent (or the Canadian
Administrative Agent, as applicable) for the account of the applicable Issuing
Bank for any amount paid by the Issuing Bank upon any drawing under such Letter
of Credit, without presentment, demand, protest or other formalities of any kind
in an amount, in same day funds, equal to the amount of such drawing. Unless
prior to 10:00 a.m. (Eastern time) on the date of such drawing, the Account
Party shall have either notified the Issuing Bank and the Administrative Agent
(or the Canadian Administrative Agent, as applicable) that the Account Party
intends to reimburse the Administrative Agent (or the Canadian Administrative
Agent, as applicable) for the account of the applicable Issuing Bank for the
amount of such drawing with funds other than the proceeds of Loans or delivered
to the Administrative Agent (or the Canadian Administrative Agent, as
applicable) a Borrowing Request for Loans in an amount equal to such drawing,
the Account Party will be deemed to have given a Borrowing Request to the
Administrative Agent (or the Canadian Administrative Agent, as applicable)
requesting that the Lenders make Revolving Credit Loans on the date on which
such drawing is honored in an amount equal to the amount of such drawing. Any
Loans made pursuant to the preceding sentence shall be (A) US Revolving Credit
Loans which are ABR Loans if the underlying Letter of Credit was a US Letter of
Credit, or Canadian Revolving Credit Loans if the underlying Letter of Credit
was a Canadian Letter of Credit, and (B) Dollar Denominated Loans and ABR Loans
if the underlying Letter of Credit was denominated in Dollars, and (C) C$
Denominated Loans and Canadian Prime Loans if the underlying Letter of Credit
was denominated in C$. The obligation of Lenders to make Revolving Credit Loans
pursuant to this Section 2.3 (but not the participation obligations of the
Lenders pursuant to Section 2.3(d)(4) below) shall be subject to the
satisfaction of the conditions in Article 3 and the existence of availability of
the US Maximum Available Amount or Canadian Maximum Available Amount (as
applicable) pursuant to Section 2.1(c) or Section 2.1(d) hereof (after giving
effect to repayment of the applicable Reimbursement Obligations with the
proceeds of the proposed Revolving Credit Loans). Subject to the preceding
sentence, if so requested by the Administrative Agent (or the Canadian
Administrative Agent, as applicable), each of the US Revolving Lenders or the
Canadian Revolving Lenders (as applicable) shall, on the date of such drawing,
make such Revolving Credit Loans in an amount equal to such Lender's US
Revolving Credit Percentage or Canadian Revolving Credit Percentage (as
applicable) of such drawing or the full amount of the unused US Maximum
Available Amount or Canadian Maximum Available Amount pursuant to Section 2.1(c)
or Section 2.1(d) as applicable, the proceeds of which shall be applied directly
by the Administrative Agent (or the Canadian Administrative Agent, as
applicable) to reimburse the applicable Issuing Bank to the extent of such
proceeds.
(4) If the appropriate Account Party fails to reimburse the
applicable Issuing Bank as provided in Section 2.3(d)(3) above for any reason,
including failure to satisfy the conditions in Article 3 or insufficient
availability under the Maximum Available Amount pursuant to Section 2.1(c) or
Section 2.1(d), such Issuing Bank shall promptly notify the Administrative Agent
(or the Canadian Administrative Agent, as applicable) and the Administrative
Agent (or the Canadian Administrative Agent, as applicable) shall notify each US
Revolving Lender or Canadian Revolving Lender (as applicable) of the
unreimbursed amount of such drawing and of such Lender's respective
participation therein based on such Lender's US or Canadian Revolving Credit
Percentage (as applicable). Each such Lender will pay to the
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Administrative Agent (or the Canadian Administrative Agent, as applicable) for
the account of the applicable Issuing Bank on the date of such notice an amount
equal to such Lender's US or Canadian Revolving Credit Percentage (as
applicable) of such unreimbursed drawing (or, if such notice is made after 1:00
p.m. (Eastern time) on such date, on the next succeeding Business Day). If any
Lender fails to make available to such Issuing Bank the amount of such Lender's
participation in such Letter of Credit as provided in this Section 2.3(d)(4),
such Issuing Bank shall be entitled to recover such amount on demand from such
Lender together with interest at the Federal Funds Effective Rate for one
Business Day and thereafter at the ABR. Nothing in this Section 2.3(d)(4) shall
be deemed to prejudice the right of any Lender to recover from such Issuing Bank
any amounts made available by such Lender to such Issuing Bank pursuant to this
Section 2.3(d)(4) if it is determined by a court of competent jurisdiction that
the payment with respect to a Letter of Credit by such Issuing Bank was wrongful
and such wrongful payment was the result of gross negligence or willful
misconduct on the part of such Issuing Bank. The applicable Issuing Bank shall
pay to the Administrative Agent (or the Canadian Administrative Agent, as
applicable) and the Administrative Agent (or the Canadian Administrative Agent,
as applicable) shall pay to each Lender such Lender's US Revolving Credit
Percentage or Canadian Revolving Credit Percentage (as applicable) of all
amounts received from the Account Party for payment, in whole or in part, of the
Reimbursement Obligation in respect of any Letter of Credit, but only to the
extent such Lender has made payment to such Issuing Bank in respect of such
Letter of Credit pursuant to this Section 2.3(d)(4).
(5) The issuance by the applicable Issuing Bank of each Letter
of Credit shall, in addition to the conditions precedent set forth in Article 3,
be subject to the conditions precedent that such Letter of Credit shall be in
the form and contain such terms as shall be satisfactory to such Issuing Bank
and the Administrative Agent, and that the Account Party shall have executed and
delivered such other instruments and agreements relating to the Letter of Credit
as such Issuing Bank shall have requested and that are not inconsistent with the
terms of this Agreement including the applicable Issuing Bank's Application
therefor. In the event of a conflict between the terms of this Agreement and the
terms of any Application, the terms of this Agreement shall control.
(6) As between any Account Party and any Issuing Bank, the
Account Party assumes all risks of the acts and omissions of or misuse of the
Letters of Credit issued by such Issuing Bank by the respective beneficiaries of
such Letters of Credit. In furtherance and not in limitation of the foregoing,
such Issuing Bank shall not be responsible: (A) for the form, validity,
sufficiency, accuracy, genuineness or legal effect of any document submitted by
any Person in connection with the application for or issuance of such Letters of
Credit, even if it should in fact prove to be in any or all respects invalid,
insufficient, inaccurate, fraudulent or forged; (B) for the validity or
sufficiency of any instrument transferring or assigning or purporting to
transfer or assign any such Letter of Credit or the rights or benefits
thereunder or proceeds thereof, in whole or in part, which may prove to be
invalid or ineffective for any reason; (C) for errors, omissions, interruptions
or delays in transmission or delivery of any messages, by mail, cable,
telegraph, telex or otherwise, whether or not they are in cipher; (D) for errors
in interpretation of technical terms; (E) for any loss or delay in the
transmission or otherwise of any document required in order to make a drawing
under any such Letter of Credit or of the proceeds thereof; (F) for the
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misapplication by the beneficiary of any such Letter of Credit of the proceeds
of any drawing under such Letter of Credit; and (G) for any consequences arising
from causes beyond the control of such Issuing Bank, including, without
limitation, the actions of any Governmental Authority. None of the above shall
affect, impair, or prevent the vesting of any of such Issuing Bank's rights or
powers hereunder. Notwithstanding anything to the contrary contained in this
Section 2.3(d)(6), no Account Party shall assume any risk, and shall have no
obligation to indemnify any Issuing Bank, in respect of any liability incurred
by such Issuing Bank arising primarily out of the gross negligence or willful
misconduct of such Issuing Bank, as finally determined by a court of competent
jurisdiction.
(7) Each Issuing Bank will send to the applicable Account
Party and the Administrative Agent (or the Canadian Administrative Agent, as
applicable) immediately upon issuance of any Letter of Credit, or an amendment
thereto, a true and complete copy of such Letter of Credit, or such amendment
thereto. Upon issuance of any Letter of Credit or an amendment thereto, the
Administrative Agent (or the Canadian Administrative Agent, as applicable) shall
promptly notify each Lender of such Lender's US Revolving Credit Percentage or
Canadian Revolving Credit Percentage (as applicable) of the amount of such
Letter of Credit or amendment thereto. Upon cancellation or termination of any
Letter of Credit, the applicable Issuing Bank shall promptly notify the
Administrative Agent (or the Canadian Administrative Agent, as applicable) and
the applicable Account Party, and the Administrative Agent (or the Canadian
Administrative Agent, as applicable) will then promptly notify each Lender, of
such cancellation or termination.
(8) The obligation of each Account Party to reimburse each
Issuing Bank for Reimbursement Obligations with regard to the Letters of Credit
issued by such Issuing Bank for such Account Party and the obligations of the US
Revolving Lenders and the Canadian Revolving Lenders under Section 2.3(d)(4)
shall be unconditional and irrevocable and shall be paid strictly in accordance
with the terms of this Agreement and under all circumstances, including the
following circumstances:
(A) any lack of validity or enforceability of any Letter of
Credit;
(B) the existence of any claim, set-off, defense or other
right that any of the Borrowers may have at any time against a
beneficiary or any transferee of any Letter of Credit (or any Persons
for whom any such transferee may be acting), any Lender or any other
Person, whether in connection with this Agreement, the transactions
contemplated herein or any unrelated transaction (including any
underlying transaction between the Account Party and the beneficiary
for which the Letter of Credit was procured) other than a defense based
on the gross negligence (as opposed to ordinary negligence) or willful
misconduct of such Issuing Bank, as determined by a court of competent
jurisdiction;
(C) any draft, demand, certificate or any other document
presented under any Letter of Credit is proved to be forged,
fraudulent, invalid or insufficient in any respect or any statement
therein is untrue or inaccurate in any respect;
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(D) any adverse change in the condition (financial or
otherwise) of any Credit Party;
(E) any breach of this Agreement or any other Financing
Document by any of the Borrowers, the Administrative Agent, the
Canadian Administrative Agent or any Lender (other than the applicable
Issuing Bank);
(F) any other circumstance or happening whatsoever; provided
that such other occurrence or happening is not the result of the gross
negligence (as opposed to ordinary negligence) or willful misconduct of
such Issuing Bank, as determined by a court of competent jurisdiction;
or
(G) the fact that a Default shall have occurred and be
continuing.
(e) ALTERNATIVE LETTER OF CREDIT PROVISIONS. As an alternative to the
foregoing provisions of this Section 2.3, and in order to assist the
Borrowers in establishing or opening letters of credit, the Borrowers
have requested the Administrative Agent and the Canadian Administrative
Agent to join as a co-applicant under applications for letters of
credit, and/or to guarantee payment or performance of letters of credit
and any drafts or acceptances thereunder through the issuance of letter
of credit guarantee, thereby lending to the Borrowers the credit of the
Administrative Agent or the Canadian Administrative Agent, as
applicable, and the Administrative Agent and the Canadian
Administrative Agent have agreed to do so on the terms and conditions
set forth below. For these purposes, the issuer of any such letter of
credit need not be a party to this Agreement. Within the applicable
Revolving Credit Commitments, the Administrative Agent or the Canadian
Administrative Agent, as applicable, shall assist the applicable
Borrowers in obtaining letter(s) of credit in this manner, in an
aggregate amount not to exceed the limits set forth herein. It is
understood that the term, form and purpose of each such letter of
credit and all documentation in connection therewith, and any
amendments, modifications or extensions thereof, must be in accordance
with the other provisions of this Section 2.3, mutatis mutandis, and
must be mutually acceptable to the Administrative Agent or the Canadian
Administrative Agent, as applicable, the issuer of the letter of credit
and the applicable Borrowers. In the event of a drawing under any such
letter of credit, the issuer of any such letter of credit would be
entitled to require that the Administrative Agent or the Canadian
Administrative Agent, as applicable, reimburse such issuer for any
amount drawn under such letter of credit, whereupon the Administrative
Agent or the Canadian Administrative Agent, as applicable, would be
entitled to obtain reimbursement from the appropriate Account Party and
the applicable Revolving Credit Lenders, all in accordance with the
provisions of this Section 2.3, it being understood that any such
letter of credit shall be considered in all respects as a "Letter of
Credit" issued under the applicable Commitments hereunder, and the
Administrative Agent or the Canadian Administrative Agent, as
applicable, shall have all rights and remedies as an "Issuing Bank"
under this Agreement. The Borrowers unconditionally, jointly and
severally, agree to indemnify each of the Administrative Agent and the
Canadian Administrative Agent, as applicable, from and against any and
all loss, claim or liability incurred by the Administrative Agent or
the Canadian
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Administrative Agent, as applicable, arising from any transactions or
occurrences relating to letters of credit established or opened in
accordance with these procedures. This indemnity shall survive
termination of this Agreement. In addition to the fees payable under
Section 2.13(c) and (d), the Borrowers agree that any customary bank
fees and charges incurred by the Administrative Agent or the Canadian
Administrative Agent, as applicable, in connection with these
arrangements shall be for the account of the applicable Borrowers and
shall be paid by the applicable Borrowers to the Administrative Agent
or the Canadian Administrative Agent, as applicable, forthwith upon
demand therefor.
SECTION 2.4 DISBURSEMENT OF FUNDS.
(a) AVAILABILITY. No later than 3:00 p.m. on the date of each Borrowing
(other than Borrowings consisting of US Swingline Loans or Canadian
Swingline Loans), each US Revolving Lender (in the case of any
Borrowing of US Revolving Credit Loans) and each Canadian Revolving
Lender (in the case of any Borrowing of Canadian Loans) will make
available to the Administrative Agent (or the Canadian Administrative
Agent, in the case of a Borrowing of Canadian Loans) such Lender's
Applicable Percentage of the principal amount of the Borrowing
requested to be made on such date reduced by the principal amount of
Revolving Credit Loans (if any) of such Lender maturing on such date in
immediately available funds at the Payment Office (unless such
Borrowing is to be made under the Canadian Revolving Credit Facility
and the Canadian Borrowers have requested a Borrowing in C$, in which
case such funds shall be C$).
(b) DISBURSEMENT OF US LOANS.
(i) Until such time as the Administrative Agent requires
any of the changes to the credit facilities
contemplated by Section 2.2(c), the Administrative
Agent will disburse all US Revolving Credit Loans to
GUSAP or PASUG, as applicable, by depositing the
amount of each Borrowing of such US Revolving Credit
Loans to the GUSAP Disbursement Account or the PASUG
Disbursement Account, as applicable. In respect of
all amounts so deposited into the GUSAP Disbursement
Account, GUSAP hereby irrevocably agrees that it
shall transfer all such amounts, in immediately
available funds, to the NSULC Disbursement Account.
In respect of all amounts so deposited to the NSULC
Disbursement Account, GUSAP (as the sole shareholder
of NSULC) hereby irrevocably agrees that it shall
transfer all such amounts to the PASUG Disbursement
Account. In respect of all amounts so deposited to
the PASUG Disbursement Account (whether as a result
of the application of this Section 2.4(b)(i) to
disbursement of US Revolving Credit Loans to GUSAP or
as a result of disbursement of US Revolving Credit
Loans by the Administrative Agent directly to PASUG),
PASUG agrees to make a Permitted Cash Application to
or for the benefit of the Applicable US Operating
Borrower(s) in such amounts (or such portions
thereof) as have been allocated by GUSAP or PASUG, as
applicable, to each such Applicable
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US Operating Borrower in accordance with Section
2.2(a)(2). If the Administrative Agent or the
Required Lenders elect to require any changes as
contemplated by Section 2.2(c), and until such time
as the US Borrowers are entitled to request that
Revolving Loans again be made available to GUSAP or
PASUG, the Administrative Agent will make available
directly to the Applicable US Operating Borrowers at
the Payment Office of the Administrative Agent the
aggregate of the amounts made available by the US
Revolving Lenders pursuant to Section 2.4(a) by
depositing such amounts, in immediately available
funds, to the Disbursement Account of such US
Operating Borrower. To the extent that any Loans
mature or Reimbursement Obligations are due and owing
on the date of a requested Borrowing of Revolving
Credit Loans, the Administrative Agent may, at its
discretion, prior to giving effect to the directions
set out in this Section 2.4(b), apply the proceeds of
the Revolving Credit Loans then being made, to the
extent thereof, to the repayment of such maturing
Loans or Reimbursement Obligations, such Loans or
Reimbursement Obligations and repayments intended to
be a contemporaneous exchange. Notwithstanding the
foregoing, at the option of PASUG or GUSAP, any US
Revolving Credit Loan may be retained by PASUG, or
may be disbursed by PASUG, as applicable, to a Credit
Party other than the Applicable US Operating Borrower
to which such Revolving Credit Loan relates, but only
to the extent that such retention or disbursement is
permitted under Section 7.2(i) hereof.
(ii) Until such time as the Administrative Agent requires
any of the changes to the credit facilities
contemplated by Section 2.2(c), the US Swingline
Lender will make available to PASUG (or, in the case
of a US Swingline Loan made to pay Reimbursement
Obligations of any US Operating Borrowers, by
remittance to the applicable Issuing Bank) the
proceeds of such US Swingline Loan in accordance with
this Section 2.4(b) on or before 3:00 p.m. (Eastern
time) on the date requested for such Borrowing or as
provided in Section 2.2(d). If the Administrative
Agent or the Required Lenders elect to require a
change as contemplated by Section 2.2(c), and until
such time as the US Borrowers are entitled to request
that Revolving Loans again be made available to
GUSAP, the US Swingline Lender will make available
directly to the applicable US Operating Borrower at
the Payment Office of the Administrative Agent the
amount of requested US Swingline Loans by depositing
such amounts, in immediately available funds, to the
Disbursement Account of such US Operating Borrower.
At the option of the US Borrowers, any US Swingline
Loan may be retained by PASUG, or may be disbursed by
PASUG, as applicable, to a Credit Party other than
the US Operating Borrower to which such US Swingline
Loan relates, but only to the extent that such
retention or disbursement would constitute a US
Operating Borrower Advance that is permitted under
Section 7.2(i) hereof.
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(c) DISBURSEMENT OF CANADIAN LOANS. The Canadian Administrative Agent will
make available to the Canadian Borrowers at the Payment Office of the
Canadian Administrative Agent the aggregate of the amounts (if any)
made available by the Canadian Revolving Lenders pursuant to Section
2.4(a) by depositing such amounts, in immediately available funds, to
the Disbursement Account of the relevant Canadian Borrower. To the
extent that any Loans mature or Reimbursement Obligations are due and
owing on the date of a requested Borrowing of Canadian Revolving Credit
Loans, the Canadian Revolving Credit Lenders shall apply the proceeds
of the Canadian Revolving Credit Loans then being made, to the extent
thereof, to the repayment of such maturing Loans or Reimbursement
Obligations, such Loans or Reimbursement Obligations and repayments
intended to be a contemporaneous exchange. In respect of Canadian
Swingline Loans, the Canadian Swingline Lender will make available to
the Canadian Borrowers (or, in the case of a Canadian Swingline Loan
made to pay Reimbursement Obligations of the relevant Canadian
Borrower, by remittance to the applicable Issuing Bank) the proceeds of
such Canadian Swingline Loan in accordance with this Section 2.4(c) on
or before 3:00 p.m. (Eastern time) on the date requested for such
Borrowing.
(d) FUNDS TO THE ADMINISTRATIVE AGENT OR THE CANADIAN ADMINISTRATIVE AGENT.
Unless the Administrative Agent or the Canadian Administrative Agent
shall have been notified by any Lender prior to the date of a Borrowing
(other than a Borrowing consisting of US Swingline Loans or Canadian
Swingline Loans) that such Lender does not intend to make available to
the Administrative Agent or the Canadian Administrative Agent (as
applicable) such Lender's US Revolving Credit Percentage or Canadian
Revolving Credit Percentage (as applicable) of the Borrowing to be made
on such date, the Administrative Agent or the Canadian Administrative
Agent (as applicable) may assume that such Lender has made such amount
available to the Administrative Agent or the Canadian Administrative
Agent (as applicable) on such date, and the Administrative Agent or the
Canadian Administrative Agent (as applicable) may make available to or
for the account of the applicable Borrowers a corresponding amount. If
such corresponding amount is not in fact made available to the
Administrative Agent or the Canadian Administrative Agent (as
applicable) by such Lender on the date of a Borrowing, the
Administrative Agent or the Canadian Administrative Agent (as
applicable) shall be entitled to recover such corresponding amount on
demand from such Lender together with interest at such Agent's cost of
funds (as determined by such Agent). If such Lender does not pay such
corresponding amount forthwith upon the Administrative Agent's or the
Canadian Administrative Agent's (as applicable) demand therefor, the
Administrative Agent or the Canadian Administrative Agent (as
applicable) shall promptly notify the applicable Borrowers and the
applicable Borrowers shall immediately pay such corresponding amount to
the Administrative Agent or the Canadian Administrative Agent (as
applicable) together with interest at the rate specified for the
Borrowing which includes such amount paid. Nothing in this Section 2.4
shall be deemed to relieve any Lender from its obligation to fulfill
its Revolving Credit Commitments hereunder or to prejudice any rights
which the Borrowers may have against any Lender as a result of any
default by such Lender hereunder.
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(e) LENDERS' RESPONSIBILITIES. No Lender shall be responsible for any
default by any other Lender in its obligation to make Loans hereunder,
and each Lender shall be obligated to make only such Loans provided to
be made by it hereunder, regardless of the failure of any other Lender
to fulfill its Commitment hereunder.
SECTION 2.5 NOTES AND MATURITY.
(a) US REVOLVING CREDIT NOTES. The US Borrowers' obligations to pay the
principal of, and interest on, the US Revolving Credit Loans made by
each US Revolving Lender shall, at the written request of any US
Revolving Lender, be further evidenced by the US Borrowers' issuance,
execution and delivery of a US Revolving Credit Note payable to the
order of each such US Revolving Lender in the amount of such US
Revolving Lender's US Revolving Credit Commitment and shall be dated as
of the date of issuance of such US Revolving Credit Note. The principal
amount of each US Revolving Credit Note shall be payable on or before
the Maturity Date.
(b) CANADIAN REVOLVING CREDIT NOTES. The Canadian Borrowers' obligations to
pay the principal of, and interest on, the Canadian Revolving Credit
Loans made by each Canadian Revolving Lender shall, at the written
request of any Canadian Revolving Lender, be further evidenced by the
Canadian Borrowers' issuance, execution and delivery of (i) a Canadian
Revolving Credit Note (C$), and (ii) a Canadian Revolving Credit Note
(US$), each payable to the order of each such Canadian Lender in the
amount of such Canadian Revolving Lender's Canadian Revolving Credit
Commitment and shall be dated as of the date of issuance of such
Canadian Revolving Credit Notes. The principal amount of each Canadian
Revolving Credit Note shall be payable on or before Maturity Date.
(c) US SWINGLINE NOTES. The US Borrowers' obligations to pay the principal
of, and interest on, the US Swingline Loans made by the US Swingline
Lender shall, at the written request of any US Swingline Lender, be
further evidenced by the US Borrowers issuance, execution and delivery
of a US Swingline Note payable to the order of the US Swingline Lender
in the amount of the US Swingline Commitment and shall be dated as of
the date of issuance of such US Swingline Note. All US Swingline Loans
shall mature on the last Business Day of the month in which such US
Swingline Loans are borrowed; provided, however, in the event such US
Swingline Loans are borrowed on the last Business Day of any month,
such US Swingline Loans shall mature on the first Business Day of the
next succeeding month; provided, further, that the principal amount of
the US Swingline Note and all outstanding US Swingline Loans shall be
payable on or before the Maturity Date.
(d) CANADIAN SWINGLINE NOTES. The Canadian Borrowers' obligations to pay
the principal of, and interest on, the Canadian Swingline Loans made by
the Canadian Swingline Lender shall, at the written request of the
Canadian Swingline Lender, be further evidenced by the Canadian
Borrowers' issuance, execution and delivery of (i) a Canadian Swingline
Note (C$), and (ii) a Canadian Swingline Note (US$), each payable to
the order of the Canadian Swingline Lender in the amount of the
Canadian Swingline Commitment and shall be dated as of the date of
issuance of such Canadian Swingline
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Note. All Canadian Swingline Loans shall mature on the last Business
Day of the month in which such Canadian Swingline Loans are borrowed;
provided, however, in the event such Canadian Swingline Loans are
borrowed on the last Business Day of any month, such Canadian Swingline
Loans shall mature on the first Business Day of the next succeeding
month; provided, further, that the principal amount of the Canadian
Swingline Notes and all outstanding Canadian Swingline Loans shall be
payable on or before the Maturity Date.
(e) AGENT ADVANCES. All Agent Advances shall be repayable upon demand by
the Administrative Agent or the Canadian Administrative Agent, as
applicable.
SECTION 2.6 INTEREST. In all cases subject to Section 10.13:
(a) ABR LOANS. Subject to Section 2.6(e), each of the Borrowers agrees to
pay interest in respect of the unpaid principal amount of each ABR Loan
made to such Borrowers from the date thereof until payment in full
thereof at a rate per annum which shall be, for any day, equal to the
sum of the Applicable Margin plus the ABR in effect on such day, but in
no event to exceed the Highest Lawful Rate. The term "ABR" means, for
any day (1) for any US Loan and US Swingline Loan which is an ABR Loan,
the higher of (A) the Prime Rate in effect on such day, and (B)
one-half of one percent (1/2%) plus the Federal Funds Effective Rate
in effect for such day (rounded upwards, if necessary, to the nearest
1/16th of 1%), and (2) for any Canadian Loan and Canadian Swingline
Loan which is an ABR Loan, the highest of (A) the US Base Rate in
effect on such day, or (B) one half of one percent (1/2%) plus the
Federal Funds Effective Rate in effect for such day (rounded upwards in
necessary, to the nearest 1/16th of 1%). For purposes of this
Agreement, any change in the ABR due to a change in the Federal Funds
Effective Rate, the Prime Rate, or the US Base Rate shall be effective
as of the opening of business on the effective date of such change in
the Federal Funds Effective Rate, the Prime Rate, or the US Base Rate,
as the case may be.
(b) LIBOR LOANS. Subject to Section 2.6(e), each of the Borrowers agrees to
pay interest in respect of the unpaid principal amount of each LIBOR
Loan made to such Borrowers from the date thereof until payment in full
thereof at a rate per annum which shall be the sum of the relevant
Applicable Margin plus the LIBOR Rate, but in no event to exceed the
Highest Lawful Rate. No Borrower shall be entitled to borrow any Loans
hereunder as LIBOR Loans, or convert Loans to LIBOR Loans, or continue
any LIBOR Loans, if the Required Lenders or the Administrative Agent
determine, during the continuance of any Event of Default, that LIBOR
Loans are to be unavailable.
(c) CANADIAN PRIME LOANS. Subject to Section 2.6(e), the Canadian Borrowers
agree to pay interest in respect of the unpaid principal amount of each
Canadian Prime Loan from the date thereof until payment in full thereof
at a rate per annum which shall be, for any day, equal to the sum of
the Applicable Margin plus the Canadian Prime Rate in effect on such
day, but in no event to exceed the Highest Lawful Rate.
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(d) B/A LOANS. Subject to Section 2.6(e), the Canadian Borrowers agree to
pay interest in respect of the unpaid principal amount of each B/A Loan
from the date thereof until payment in full thereof at a rate per annum
which shall be, for any day, equal to the sum of the Applicable Margin
plus the CDOR Rate in effect on such day, but in no event to exceed the
Highest Lawful Rate. No Borrower shall be entitled to borrow any Loans
hereunder as B/A Loans, or convert Loans to B/A Loans, or continue any
B/A Loans, if the Required Lenders or the Canadian Administrative Agent
determine, following any Event of Default, that B/A Loans are to be
unavailable.
(e) DEFAULT INTEREST. After the occurrence and during the continuance of
any Default or Event of Default, the US Borrowers shall, on demand from
time to time, pay interest, to the extent permitted by law, on the
outstanding US Lender Indebtedness, and the Canadian Borrowers shall,
on demand from time to time, pay interest, to the extent permitted by
law, on the Canadian Lender Indebtedness (after as well as before
judgment) at a rate per annum equal to (i) in the case of any LIBOR
Loan, the rate that would be applicable under Section 2.6(b) to such
LIBOR Loan, plus 2% per annum, (ii) in the case of any Canadian Prime
Loan, the rate that would be applicable under Section 2.6(c) to such
Canadian Prime Loan, plus 2% per annum, (iii) in the case of any B/A
Loan, the rate that would be applicable under Section 2.6(d) to such
B/A Loan, plus 2% per annum, and (iv) in the case of any other amount,
the rate that would be applicable under Section 2.6(a) to an ABR Loan,
plus 2% per annum, but in no event to exceed the Highest Lawful Rate.
(f) INTEREST PAYMENT DATES. Interest on each ABR Loan, LIBOR Loan and
Canadian Prime Loan shall accrue from and including the date of such
Loan to but excluding the date of payment in full thereof. Interest on
each LIBOR Loan shall be payable in arrears on the first Business Day
of each month, and on the last Business Day of each Interest Period
applicable thereto, and on any prepayment (on the amount prepaid), at
maturity (whether by acceleration or otherwise) and, after maturity, on
demand. Interest on each ABR Loan and Canadian Prime Loan shall be
payable in arrears on the first Business Day of each calendar month,
commencing on the first of such days to occur after such Loan is made,
at maturity (whether by acceleration or otherwise) and, after maturity,
on demand. Interest on each B/A Loan shall be payable in advance on the
first Business Day of each Interest Period applicable thereto (for the
entire Interest Period), at maturity (whether by acceleration or
otherwise) and, after maturity, on demand.
SECTION 2.7 INTEREST PERIODS. In connection with each Borrowing of LIBOR Loans
or B/A Loans, the applicable Borrowers shall elect an Interest Period to be
applicable to such Borrowing, which Interest Period shall begin on and include,
as the case may be, the date selected by such Borrowers pursuant to Section
2.2(a) or (b), the conversion date or the date of expiration of the then current
Interest Period applicable thereto, and end on but exclude the date which is (i)
in the case of LIBOR Loans, either one, two, three or six months thereafter, as
selected by such Borrowers, and (ii) in the case of B/A Loans, either 30 days,
60 days, 90 days or 180 days; provided further:
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(a) BUSINESS DAYS. If any Interest Period would otherwise expire on a day
which is not a Business Day, such Interest Period shall expire on the
next Business Day, provided, further, that if any Interest Period
(other than in respect of a Borrowing of LIBOR Loans the Interest
Period of which is expiring pursuant to Section 2.16(b) hereof) would
otherwise expire on a day which is not a Business Day but is a day of
the month after which no further Business Day occurs in such month,
such Interest Period shall expire on the immediately preceding Business
Day;
(b) MONTH END. Any Interest Period for any LIBOR Loan which begins on the
last Business Day of a calendar month (or on a day for which there is
no numerically corresponding day in the calendar month at the end of
such Interest Period) shall, subject to Section 2.7(c) below, end on
the last Business Day of a calendar month;
(c) PAYMENT LIMITATIONS. No Interest Period shall extend beyond any date
that any principal payment or prepayment is scheduled to be due unless
the aggregate principal amount of Borrowings which are Borrowings of
LIBOR Loans or B/A Loans which have Interest Periods which will expire
on or before such date, less the aggregate amount of any other
principal payments or prepayments due during such Interest Period, is
equal to or in excess of the amount of such principal payment or
prepayment.
SECTION 2.8 COMMITMENT ADJUSTMENT MECHANISM.
(a) On the Commitment Exchange Date, (i) the Commitments shall
automatically and without further act be terminated as provided in the
last paragraph of Article 8, and (ii) the Lenders shall automatically
and without further act (and without regard to the provisions of
Section 10.7) be deemed to have exchanged interests in the Commitments
such that in lieu of the interest of each Lender in each Commitment in
which it shall participate as of such date, such Lender shall hold an
interest in every one of the Commitments, whether or not such Lender
shall previously have participated therein, equal to such Lender's
Commitment Exchange Percentage thereof. Each Lender and each Borrower
hereby consents and agrees to the Commitment Exchange, and each Lender
agrees that the Commitment Exchange shall be binding upon its
successors and assigns and any Person that acquires a participation in
its interests in any Commitment. Each Borrower agrees from time to time
to execute and deliver to the Administrative Agent all such Notes and
other instruments and documents as the Administrative Agent shall
reasonably request to evidence and confirm the respective interests of
the Lenders after giving effect to the Commitment Exchange, and each
Lender agrees to surrender any Notes originally received by it in
connection with its Loans hereunder to the Administrative Agent against
delivery of new Notes evidencing its interests in the Commitments;
provided, however, that the failure of a Borrower to execute or deliver
or of any Lender to accept any such Note, instrument or document shall
not affect the validity or effectiveness of the Commitment Exchange.
(b) As a result of the Commitment Exchange, upon and after the Commitment
Exchange Date, each payment received by the Administrative Agent or the
Canadian Administrative Agent pursuant to any Financing Document, and
each distribution made
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by the Administrative Agent or the Canadian Administrative Agent
pursuant to any Security Instrument, shall be distributed to the
Lenders pro rata in accordance with their respective Commitment
Exchange Percentages. Any direct payment received by a Lender upon or
after the Commitment Exchange Date, including by way of setoff, in
respect of amounts owing to such Lender under this Agreement or the
other Financing Documents shall be paid over to the Administrative
Agent, for distribution to the Lenders in accordance herewith.
If the Commitment Exchange Date shall occur, Lender Indebtedness owed by the
Borrowers which is denominated in any currency other than Dollars shall,
automatically and with no further act required, be converted to obligations
denominated in Dollars. Such conversion shall be effected based upon the Dollar
Equivalent in effect on the Commitment Exchange Date. On and after any such
conversion, all amounts accruing and owed to any Lender under this Agreement and
the other Financing Documents shall accrue and be payable in Dollars at the
rates otherwise applicable hereunder. Notwithstanding the foregoing provisions
of this Section 2.8, any Lender may, by notice to the Borrowers and the
Administrative Agent prior to the Commitment Exchange Date, elect not to have
the provisions of this Section 2.8 apply with respect to amounts owed to such
Lender immediately following the Commitment Exchange Date, and, if such notice
is given, all Lender Indebtedness owed to such Lender immediately following the
Commitment Exchange Date shall remain designated in such other currency.
SECTION 2.9 REPAYMENT OF LOANS.
(a) The US Borrowers hereby unconditionally, jointly and severally promise
to pay to the Administrative Agent for the account of each US Revolving
Lender, (1) the then unpaid principal amount of each US Revolving
Credit Loan of such Lender on the Maturity Date (or such earlier date
on which the Revolving Credit Loans become due and payable pursuant to
Article 8); and (2) the amounts specified in Section 2.11 on the dates
specified in Section 2.11. The US Borrowers hereby unconditionally,
jointly and severally promise to pay to the US Swingline Lender the
then-unpaid principal amount of each US Swingline Loan on the date on
which such US Swingline Loan becomes due and payable as provided in
Section 2.5(c) hereof (or such earlier date on which such US Swingline
Loans become due and payable pursuant to Article 8). The US Borrowers
hereby unconditionally, jointly and severally promise to pay to the
Administrative Agent the then unpaid principal amount of each Agent
Advance on demand (or such earlier date on which such Agent Advances
become due and payable pursuant to Article 8). The US Borrowers hereby
unconditionally, jointly and severally agree to pay interest on the
unpaid principal amount of the Loans , the US Swingline Loans and the
Agent Advances made to the US Borrowers, from time to time outstanding
from the date hereof until payment in full thereof at the rates per
annum, and on the dates, set forth in Section 2.6.
(b) The Canadian Borrowers hereby unconditionally, jointly and severally
promise to pay to the Canadian Administrative Agent for the account of
each Canadian Revolving Lender, (1) the then unpaid principal amount of
each Canadian Revolving Credit Loan of such Lender on the Maturity Date
(or such earlier date on which the Revolving Credit Loans become due
and payable pursuant to Article 8); and (2) the amounts specified in
Section
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2.11 on the dates specified in Section 2.11. The Canadian Borrowers
hereby unconditionally, jointly and severally promise to pay to the
Canadian Swingline Lender the then-unpaid principal amount of each
Canadian Swingline Loan on the date on which such Canadian Swingline
Loan becomes due and payable as provided in Section 2.5(d) hereof (or
such earlier date on which such Canadian Swingline Loan becomes due and
payable pursuant to Article 8). The Canadian Borrowers hereby
unconditionally, jointly and severally promise to pay to the Canadian
Administrative Agent the then unpaid principal amount of each Agent
Advance on demand (or such earlier date on which such Agent Advances
become due and payable pursuant to Article 8). The Canadian Borrowers
hereby unconditionally, jointly and severally agree to pay interest on
the unpaid principal amount of the Loans, the Canadian Swingline Loans
and the Agent Advances made to the Canadian Borrowers from time to
time, outstanding from the date hereof until payment in full thereof at
the rates per annum, and on the dates, set forth in Section 2.6.
(c) Each Lender shall maintain in accordance with its usual practice an
account or accounts evidencing indebtedness of the Borrowers to such
Lender resulting from each Loan of such Lender from time to time,
including, without limitation, the amounts of principal and interest
payable and paid to such Lender from time to time under this Agreement.
(d) The Administrative Agent shall maintain a Register pursuant to Section
10.7(c), and a subaccount therein for each US Revolving Lender, in
which shall be recorded (1) the amount of each US Loan made hereunder,
the Type thereof and each Interest Period, if any, applicable thereto,
(2) the amount of any principal or interest due and payable or to
become due and payable from the US Borrowers to each US Revolving
Lender hereunder, and (3) both the amount of any sum received by the
Administrative Agent hereunder from the US Borrowers and each US
Revolving Lender's Applicable Percentage thereof. The Administrative
Agent shall maintain a separate register with respect to the US
Swingline Loans which Register shall contain the same information as
the Register with respect to the US Loans.
(e) The Canadian Administrative Agent shall maintain a Register pursuant to
Section 10.7(c), and a subaccount therein for each Canadian Revolving
Lender, in which shall be recorded (1) the amount of each Canadian Loan
made hereunder, the Type thereof and each Interest Period, if any,
applicable thereto, (2) the amount of any principal or interest due and
payable or to become due and payable from the Canadian Borrowers to
each Canadian Revolving Lender hereunder, and (3) both the amount of
any sum received by the Canadian Administrative Agent hereunder from
the Borrowers and each Canadian Revolving Lender's Applicable
Percentage thereof. The Canadian Administrative Agent shall maintain a
separate register with respect to the Canadian Swingline Loans which
Register shall contain the same information as the Register with
respect to the Canadian Loans.
(f) The entries made in the Registers and the accounts of the
Administrative Agent and the Canadian Administrative Agent and each
Lender maintained pursuant to Section 2.9 (c), Section 2.9(d) or
Section 2.9(e) shall, absent manifest error, be conclusive evidence of
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the existence and amounts of the obligations of the Borrowers therein
recorded; provided, however, that the failure of any Lender or Agent to
maintain a Register or any such account, or any error therein, shall
not in any manner affect the obligations of each Borrower to repay
(with applicable interest) the Loans made to such Borrower by such
Lender in accordance with the terms of this Agreement.
(g) The Administrative Agent shall render to the US Borrowers each month a
statement of the US Borrowers' account setting forth the following
information for the period from the date of the most recent preceding
statement: the aggregate principal amount of new US Revolving Credit
Loans and US Swingline Loans (if any) made to the US Borrowers, the
aggregate amount of new Reimbursement Obligations which have not been
reimbursed, the aggregate face amount of new US Letters of Credit
issued for the account of the US Borrowers, the amount of remittances
and payments actually collected and applied by the Administrative Agent
to reduce the outstanding principal balance of the US Swingline Loans
and US Revolving Credit Loans, to reimburse Reimbursement Obligations
and establish L/C Cover during such period and the outstanding
principal balances of the US Swingline Loans and US Revolving Credit
Loans, and the aggregate US Letter of Credit Liabilities outstanding at
the end of such period. Such statement shall be deemed to be correct
and accepted by and be binding upon the US Borrowers unless the
Administrative Agent receives a written statement of the US Borrowers'
exceptions to such account statement within twenty (20) days after such
statement was rendered to the US Borrowers, and then only those items
disclosed on such statement will be considered to be disputed by the US
Borrowers.
(h) The Canadian Administrative Agent shall render to the Canadian
Borrowers each month a statement of the Canadian Borrowers' account
setting forth the following information for the period from the date of
the most recent preceding statement: the aggregate principal amount of
new Canadian Revolving Credit Loans and Canadian Swingline Loans made
to the Canadian Borrowers, the aggregate amount of new Reimbursement
Obligations which have not been reimbursed, the aggregate face amount
of new Canadian Letters of Credit issued for the account of the
Canadian Borrowers, the amount of remittances and payments actually
collected and applied by the Canadian Administrative Agent to reduce
the outstanding principal balance of the Canadian Revolving Credit
Loans and Canadian Swingline Loans, to reimburse Reimbursement
Obligations during such period and establish L/C Cover and the
outstanding principal balances of the Canadian Revolving Credit Loans,
and Canadian Swingline Loans, and the aggregate Canadian Letter of
Credit Liabilities outstanding at the end of such period. Such
statement shall be deemed to be correct and accepted by and be binding
upon the Canadian Borrowers unless the Canadian Administrative Agent
receives a written statement of the Canadian Borrowers' exceptions to
such account statement within twenty (20) days after such statement was
rendered to the Canadian Borrowers, and then only those items disclosed
on such statement will be considered disputed by the Canadian
Borrowers.
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SECTION 2.10 VOLUNTARY ADJUSTMENT, TERMINATION OR REDUCTION OF REVOLVING CREDIT
COMMITMENTS; EXTENSIONS.
(a) So long as a Default has not occurred and is not continuing and subject
to this Section 2.10(a), GUSAP and the Company may, upon at least five
Business Days' notice to the Administrative Agent and the Canadian
Administrative Agent, elect to have the US Revolving Credit Commitment
and the Canadian Revolving Credit Commitment adjusted such that the
Revolving Credit Commitment designated by them to be increased shall be
increased by, subject to this Section 2.10(a), the amount designated by
them and the other Revolving Credit Commitment shall be simultaneously
decreased by the same amount. The Administrative Agent and the Lenders
shall not be required to give effect to any adjustment under this
Section 2.10(a) which (i) is requested prior to 90 days following the
Closing Date, (ii) is in an amount less than $10,000,000, (iii) is
requested within 90 days of any prior adjustment under this Section
2.10(a), or (iv) would result, after giving effect to such adjustment,
in the Aggregate US Revolving Credit Exposure or the Aggregate Canadian
Revolving Credit Exposure exceeding, respectively, the US Maximum
Available Amount or the Canadian Maximum Available Amount. Any
adjustment of the Revolving Credit Commitments under this Section
2.10(a) shall be applied proportionately to the Combined Revolving
Credit Commitments for each Lender, and the Combined Revolving Credit
Commitments of each Lender (or each Lender and its Related Affiliate,
if any) shall not be increased or reduced as a result of such
adjustment.
(b) So long as a Default has not occurred and is not continuing and subject
to this Section 2.10(b), the Borrowers may, upon at least five Business
Days' notice to the Administrative Agent, the Canadian Administrative
Agent, the US Swingline Lender and the Canadian Swingline Lender, elect
to have the US Swingline Commitment and the Canadian Swingline
Commitment adjusted such that the Swingline Commitment designated by
the Borrowers to be increased shall be increased by, subject to this
Section 2.10(b), the amount designated by the Borrowers and the other
Swingline Commitment shall be simultaneously decreased by the same
amount. The Administrative Agent and the Swingline Lenders shall not be
required to give effect to any adjustment under this Section 2.10(b)
which (i) is requested prior to 90 days following the Closing Date,
(ii) is in an amount less than $10,000,000, (iii) is requested within
90 days of any prior adjustment under this Section 2.10(b), or (iv)
would result, after giving effect to such adjustment, in the US
Swingline Exposure or the Canadian Swingline Exposure exceeding,
respectively, the US Swingline Availability or the Canadian Swingline
Availability. Any adjustment of the Swingline Commitments under this
Section 2.10(b) shall be applied proportionately to the Combined
Revolving Credit Commitments for each Lender.
(c) Each of the Borrowers may, upon at least five Business Days' notice to
the Administrative Agent and the Canadian Administrative Agent,
terminate the Commitments entirely at any time. Neither the US
Revolving Credit Commitments, the Canadian Revolving Credit
Commitments, the US Swingline Commitment nor the
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Canadian Swingline Commitment may be partially terminated by the US
Borrowers or the Canadian Borrowers and each of the US Swingline
Commitment and the Canadian Swingline Commitment may only be entirely
terminated by the US Borrowers and the Canadian Borrowers in connection
with the entire termination of the Commitments. If the Commitments are
terminated in their entirety, in addition to any termination fee
described in Section 2.13(e) hereof, all accrued commitment fees with
respect thereto shall be payable on the effective date of such
termination. Upon termination of the US Revolving Credit Commitments
and the Canadian Revolving Credit Commitments in full, the commitments
of the US Swingline Lender to make US Swingline Loans and the
commitments of the Canadian Swingline Lender to make Canadian Swingline
Loans shall terminate as well.
(d) Subject to the other terms and conditions of this Agreement and unless
the Commitments have been earlier terminated, the Commitments shall be
available hereunder from the Closing Date until the Maturity Date (the
"COMMITMENT PERIOD"). The Maturity Date may be extended for successive
one year periods upon request by the Borrowers providing written notice
to the Company and the Administrative Agent requesting that the
Commitments hereunder are to be extended as at the then applicable
Maturity Date. Any such request shall be provided by the applicable
party no later than 90 days prior to the then applicable Maturity Date.
Each Lender may agree to extend its Commitments for the period
specified within 30 days of receiving a copy of such notice. The
Maturity Date shall not be extended unless each Lender approves such
extension request within the specified 30 days. Any Lender which fails
to extend its Commitments within the specified 30 days shall be deemed
to have refused to extend such Commitments.
SECTION 2.11 MANDATORY PREPAYMENTS; VOLUNTARY PREPAYMENTS; ORDER OF APPLICATION.
(a) MANDATORY PREPAYMENTS OF US REVOLVING CREDIT LOANS. If at any time (i)
the Aggregate US Revolving Credit Exposure is in excess of the US
Maximum Available Amount or (ii) the Allocated US Credit Exposure in
respect of a US Borrower is in excess of such US Borrower's US
Borrowing Base, the US Borrowers shall immediately jointly and
severally pay to the Administrative Agent, for the account of the US
Revolving Lenders, the amount of such excess to be applied (1) as a
prepayment of the US Revolving Credit Loans and Reimbursement
Obligations with respect to US Letters of Credit, in each case relating
to the US Borrower having Allocated US Credit Exposure in excess of its
US Borrowing Base, and (2) after payment in full of the US Revolving
Credit Loans and Reimbursement Obligations, as L/C Cover for the US
Letter of Credit Liabilities in an amount of such remaining excess. The
foregoing prepayment requirement is subject to the Administrative
Agent's authority, in its sole discretion, to make Agent Advances
pursuant to Section 2.28(a).
(b) MANDATORY PREPAYMENT OF CANADIAN REVOLVING CREDIT LOANS. If at any time
the Dollar Equivalent of the Aggregate Canadian Revolving Credit
Exposure is in excess of the Canadian Maximum Available Amount, the
Canadian Borrower shall immediately pay to the Canadian Administrative
Agent, for the account of the Canadian Revolving Lenders, the amount of
such excess to be applied (1) as a prepayment of the Canadian
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Revolving Credit Loans and Reimbursement Obligations with respect to
Canadian Letters of Credit, and (2) after payment in full of the
Canadian Revolving Credit Loans and Reimbursement Obligations, as L/C
Cover for the Canadian Letter of Credit Liabilities in an amount of
such remaining excess. The foregoing prepayment requirement is subject
to the Canadian Administrative Agent's authority, in its sole
discretion, to make Agent Advances pursuant to Section 2.28(a).
(c) APPLICATION OF PROCEEDS FROM US BLOCKED ACCOUNT. Upon and during the
continuance of a Block Event, on or before 11:00 a.m. (Eastern time) on
each Business Day, the Administrative Agent shall disburse (or cause
the US Lockbox Bank to disburse) to the appropriate Agent or Lenders
for application in accordance with Section 2.11(f) and Section 2.11(h),
all amounts then on deposit in the US Blocked Account which the
Administrative Agent shall have determined constitute "collected funds"
in accordance with the policies of the Administrative Agent then in
effect.
(d) APPLICATION OF PROCEEDS FROM CANADIAN BLOCKED ACCOUNT. Upon and during
the continuance of a Block Event, on or before 11:00 a.m. (Eastern
time) on each Business Day, the Canadian Administrative Agent shall
disburse (or cause the Canadian Lockbox Bank to disburse) to the
appropriate Agent or Lenders for application in accordance with Section
2.11(g) and Section 2.11(i) hereof all amounts then on deposit in the
Canadian Blocked Account which the Canadian Administrative Agent shall
have determined constitute "collected funds" in accordance with the
policies of the Canadian Administrative Agent then in effect.
(e) VOLUNTARY PREPAYMENTS. Each of the Borrowers may, at their option, at
any time and from time to time, prepay the Loans and the Reimbursement
Obligations, in whole or in part, without premium or penalty except for
breakage costs with respect to LIBOR Loans as provided in Section 2.19
and any fees set forth in Section 2.13(e), in the event of a prepayment
in full of the Revolving Credit Loans and termination of the Revolving
Credit Commitments, upon giving, in the case of any LIBOR Loan or B/A
Loan, five Business Days' irrevocable prior written notice to the
Administrative Agent, and, in the case of any ABR Loan or Canadian
Prime Loan, prior written notice on the same Business Day to the
Administrative Agent (in the case of prepayment of US Loans) or the
Canadian Administrative Agent (in the case of a prepayment of Canadian
Loans). Such notice shall specify, in the case of any prepayment of
Loans, the date and amount of prepayment and whether the prepayment is
(i) of US Revolving Credit Loans, Canadian Revolving Credit Loans, US
Swingline Loans or Canadian Swingline Loans, or a combination thereof
and, and (ii) of LIBOR Loans, ABR Loans, B/A Loans or Canadian Prime
Loans, or a combination thereof, and, in each case if a combination
thereof, the principal amount allocable to each; and (iii) in the case
of any prepayment of Reimbursement Obligations, the date and amount of
prepayment, the identity of the applicable Letter of Credit or Letters
of Credit and the amount allocable to each of such Reimbursement
Obligations. In addition, the US Borrowers shall, in the case of US
Loans or Reimbursement Obligations related to US Letters of Credit,
specify the Applicable US Operating Borrower to which such prepayment
should be allocated. If
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any such notice is given, the amount specified in such notice shall be
due and payable on the date specified therein, together with (if a
LIBOR Loan is prepaid other than at the end of the Interest Period
applicable thereto) any amounts payable pursuant to Section 2.19. Each
prepayment of US Revolving Credit Loans which are ABR Loans may be in
any amount; each prepayment of Canadian Revolving Credit Loans which
are ABR Loans shall be in a minimum principal amount of $2,000,000 and
shall be in an integral multiple of $100,000, each prepayment of
Canadian Prime Loans shall be in the minimum principal amount of
C$2,000,000 and in integral multiple of $100,000; each prepayment of
LIBOR Loans shall be in the minimum principal amount of $5,000,000 and
in integral multiples of $100,000; each prepayment of B/A Loans shall
be in the minimum principal amount of C$5,000,000 and in an integral
multiple of C$100,000 or, in any case, the aggregate principal balance
outstanding on such Loans.
(f) ORDER OF PAYMENTS PRIOR TO DEFAULT (US BORROWERS). Unless an Event of
Default has occurred and is continuing, any payment by any of the US
Borrowers (including, without limitation, any application of the
proceeds of Collateral of the US Borrowers) in respect of the Lender
Indebtedness, including, without limitation, amounts applied pursuant
to Section 2.11(c), shall be applied to the Lender Indebtedness in the
following order (i) first, to the payment in full of all costs,
expenses and other charges (but not fees) of the Administrative Agent
then due and payable by the Borrowers under the Financing Documents and
all indemnities payable by the Borrowers under the Financing Documents
then due to the Administrative Agent, (ii) second, to the payment in
full of all costs, expenses and other charges (but not fees) of the US
Revolving Lenders payable by the Borrowers under the Financing
Documents and all indemnities payable by the Borrowers under the
Financing Documents then due to any US Revolving Lender, (iii) third,
to the payment in full of all fees payable by the Borrowers to the
Administrative Agent in its capacity as such, (iv) fourth, to the
payment in full of all interest then due and payable in respect of the
US Swingline Loans and Agent Advances made to the US Borrowers, (v)
fifth, to the payment in full of all interest then due and payable in
respect of the US Revolving Credit Loans, (vi) sixth, to the payment in
full of all fees then due and payable to the US Revolving Lenders
pursuant to Section 2.13(a) hereof, (vii) seventh, to the payment in
full of all principal then due and payable under Section 2.11(a) above
(for application first to the Agent Advances made to the US Borrowers
to the extent necessary to pay such Agent Advances in full, then to US
Swingline Loans to the extent necessary to pay the US Swingline Loans
in full, and then to the US Revolving Credit Loans), (viii) eighth, to
the payment of principal of the Agent Advances made to the US Borrowers
to the extent necessary to pay such Agent Advances in full, then to the
payment of principal of the US Swingline Loans, (ix) ninth, to the
payment of principal of the US Revolving Credit Loans, (x) tenth, to
any other Lender Indebtedness to the extent then due and payable, and
(xi) eleventh, after giving effect to the payment in full of all
amounts due and payable pursuant to clauses (i) through (x) preceding,
to PASUG by depositing the net amount thereof in the PASUG Disbursement
Account for PASUG. In applying any amounts under this Section 2.11(f):
(x) amounts on deposit in the US Blocked Account which represent
amounts that have been deposited to the US Blocked Account as amounts
payable to a particular US Borrower; and (y)
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proceeds of Collateral of such US Borrower shall, in each case, only be
applied against such of the relevant Lender Indebtedness as has been
allocated to such US Borrower.
(g) ORDER OF PAYMENTS PRIOR TO DEFAULT (CANADIAN BORROWERS). Unless an
Event of Default has occurred and is continuing, any payment by the
Canadian Borrowers (including, without limitation, any application of
the proceeds of Collateral of the Canadian Borrowers) in respect of the
Canadian Lender Indebtedness, including, without limitation, amounts
applied pursuant to Section 2.11(d), shall be applied to the Canadian
Lender Indebtedness in the following order (i) first, to the payment in
full of all costs, expenses and other charges (but not fees) of the
Canadian Administrative Agent then due and payable by the Canadian
Borrowers under the Financing Documents and all indemnities payable by
the Borrowers under the Financing Agreements then due to the Canadian
Administrative Agent, (ii) second, to the payment in full of all costs,
expenses and other charges (but not fees) of the Canadian Revolving
Lenders payable by the Canadian Borrowers under the Financing
Agreements and all indemnities payable by the Canadian Borrowers under
the Financing Agreements then due to any Lender, (iii) third, to the
payment in full of all fees payable by the Canadian Borrowers to the
Canadian Administrative Agent in its capacity as such, (iv) fourth, to
the payment in full of all interest then due and payable in respect of
the Agent Advances made to the Canadian Borrowers and the Canadian
Swingline Loans, (v) fifth, to the payment in full of all interest then
due and payable in respect of the Canadian Revolving Credit Loans, (vi)
sixth, to the payment in full of all fees then due and payable to the
Canadian Revolving Lenders pursuant to Section 2.13(b) hereof, (vii)
seventh, to the payment in full of all principal then due and payable
under Section 2.11(b) above (for application first to the Agent
Advances made to the Canadian Borrowers to the extent necessary to pay
the Agent Advances in full, then to the Canadian Swingline Loans to the
extent necessary to pay the Canadian Swingline Loans in full, and then
to the Canadian Revolving Credit Loans), (viii) eighth, to the payment
of principal of the Agent Advances made to the Canadian Borrowers to
the extent necessary to pay such Agent Advances in full, and of the
Canadian Swingline Loans, (ix) ninth, to the payment of principal of
the Canadian Revolving Credit Loans, (x) tenth, to any other Canadian
Lender Indebtedness to the extent then due and payable, and (ix)
eleventh, after giving effect to the payment in full of all amounts due
and payable pursuant to clauses (i) through (viii) preceding, to the
Canadian Borrowers by depositing the net amount thereof in the
Disbursement Account for the Canadian Borrowers.
(h) ORDER OF PAYMENTS DURING DEFAULT (US BORROWERS). During the existence
of any Event of Default, any payments in respect of the Lender
Indebtedness by or for the account of any of the US Borrowers or in
respect of any of the proceeds of Collateral of the US Borrowers,
including amounts applied pursuant to Section 2.11(c), shall be applied
to the Lender Indebtedness (1) first, to the payment in full of all
costs, expenses and other charges (but not fees) of the Administrative
Agent or the Canadian Administrative Agent incurred in connection with
the collection and enforcement of the Lender Indebtedness and for the
protection, preservation or sale, disposition or other realization upon
the Collateral, including all expenses, liabilities and advances
incurred
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or made by or on behalf of the Administrative Agent or the Canadian
Administrative Agent in their capacity as such, including attorneys'
fees and legal expenses, (2) second, to the remaining US Lender
Indebtedness (including to establish L/C Cover for all outstanding US
Letters of Credit) on a prorata basis in such order as the
Administrative Agent shall determine in its sole discretion in order to
minimize tax or other costs to the Lenders, but expressly excluding any
amounts to be paid pursuant to clause (4) of this Section 2.11(h), (3)
third, to the remaining Canadian Lender Indebtedness (including to
establish L/C Cover for all outstanding Canadian Letters of Credit) on
a prorata basis in such order as the Canadian Administrative Agent
shall determine in its sole discretion in order to minimize tax or
other costs to the Lenders, but expressly excluding any amounts to be
paid pursuant to clause (4) of this Section 2.11(h), and (4) fourth, to
any Lender Indebtedness consisting of amounts owed by any Credit Party
in respect of any Swap Agreement or Cash Management Agreement that are
in excess of the Swap Reserves and Cash Management Reserves,
respectively, set forth in the most recent US Borrowing Base Report (or
Availability Reserves established with respect to such liabilities);
provided that if the aggregate amount of Lender Indebtedness consisting
of amounts owed by the Credit Parties in respect of Swap Agreements
exceeds $25,000,000, and if the payments in respect of the Lender
Indebtedness or in respect of the proceeds of Collateral are, in the
aggregate, insufficient to pay the amounts which would otherwise be
paid on account of Swap Agreements pursuant to this Section 2.11(h)(4),
then, as among the Lenders and Secured Affiliates which are
counterparties under the Swap Agreements, the amounts available to be
paid pursuant to this Section 2.11(h)(4) shall be paid according to the
order of origination of the relevant Swap Agreements (i.e., the
obligations under the first Swap Agreement would be satisfied first,
and so on). In applying any amounts under this Section 2.11(h): (x)
amounts on deposit in the US Blocked Account which represent amounts
that have been deposited to the US Blocked Account as amounts payable
to a US Borrower; and (y) proceeds of Collateral of a US Borrower
shall, in each case, be applied, firstly, against such of the relevant
Lender Indebtedness as has been allocated to such US Borrower, and
secondly, against such of the relevant Lender Indebtedness as has been
guaranteed by such US Borrower.
(i) ORDER OF PAYMENT DURING DEFAULT (CANADIAN BORROWERS). During the
existence of any Event of Default, any payments in respect of the
Lender Indebtedness by or for the account of the Canadian Borrowers or
in respect of any of the proceeds of Collateral of the Canadian
Borrowers, including amounts applied pursuant to Section 2.11(d), shall
be applied to the Lender Indebtedness (1) first, to the payment in full
of all costs, expenses and other charges (but not fees) of the
Administrative Agent or the Canadian Administrative Agent incurred in
connection with the collection and enforcement of the Lender
Indebtedness and for the protection, preservation or sale, disposition
or other realization upon the Collateral provided by the Canadian
Borrowers, including all expenses, liabilities and advances incurred or
made by or on behalf of the Administrative Agent or the Canadian
Administrative Agent in its capacity as such, including attorneys' fees
and legal expenses, and (2) second, to the remaining Canadian Lender
Indebtedness (including to establish L/C Cover for all outstanding
Canadian Letters of Credit) on a prorata basis in such order as the
Canadian Administrative Agent shall determine in its
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sole discretion in order to minimize tax or other costs to the Lenders
(but expressly excluding any amounts to be paid pursuant to clause (4)
of this Section 2.11(i)), (3) third, to the remaining US Lender
Indebtedness (including to establish L/C Cover for all outstanding US
Letters of Credit) on a prorata basis in such order as the
Administrative Agent shall determine in its sole discretion in order to
minimize tax or other costs to the Lenders, but expressly excluding any
amounts to be paid pursuant to clause (4) of this Section 2.11(i), and
(4) fourth, to any Lender Indebtedness consisting of amounts owed by
any Canadian Credit Party in respect of any Swap Agreement or Cash
Management Agreement that are in excess of the Swap Reserves and Cash
Management Reserves, respectively, set forth in the most recent
Canadian Borrowing Base Report (or Availability Reserves established
with respect to such liabilities); provided that if the aggregate
amount of Lender Indebtedness consisting of amounts owed by the Credit
Parties in respect of Swap Agreements exceeds $25,000,000, and if the
payments in respect of the Lender Indebtedness or in respect of the
proceeds of Collateral are, in the aggregate, insufficient to pay the
amounts which would otherwise be paid on account of Swap Agreements
pursuant to this Section 2.11(i)(4), then, as among the Lenders and
Secured Affiliates which are counterparties under the Swap Agreements,
the amounts available to be paid pursuant to this Section 2.11(i)(4)
shall be paid according to the order of origination of the relevant
Swap Agreements (i.e., the obligations under the first Swap Agreement
would be satisfied first, and so on). In applying any amounts under
this Section 2.11(i): (x) amounts on deposit in the Canadian Blocked
Account which represent amounts that have been deposited to the
Canadian Blocked Account as amounts payable to the Canadian Borrowers;
and (y) proceeds of Collateral of the Canadian Borrowers shall, in each
case, be applied, firstly, against such of the relevant Canadian Lender
Indebtedness, and secondly, against such of the relevant Lender
Indebtedness as has been guaranteed by the Canadian Borrowers.
SECTION 2.12 CONTINUATION AND CONVERSION OPTIONS.
(a) CONTINUATION. The Borrowers may elect to continue all or any part of
any Borrowing of LIBOR Loans or B/A Loans beyond the expiration of the
then current Interest Period relating thereto by giving Advance Notice
(which shall be irrevocable to the Administrative Agent or the Canadian
Administrative Agent) (with a simultaneous copy to the Administrative
Agent) (as applicable) of such election, specifying the LIBOR Loans or
B/A Loans or portion thereof to be continued and the Interest Period
therefor. In the absence of such a timely and proper election with
regard to LIBOR Loans, the Borrowers shall be deemed to have elected to
convert such LIBOR Loans to ABR Loans pursuant to Section 2.12(d). In
the absence of such a timely and proper election with regard to B/A
Loans, the Borrowers shall be deemed to have elected to convert such
B/A Loans to Canadian Prime Loans pursuant to Section 2.12(f).
(b) AMOUNT OF CONTINUATIONS. All or part of any LIBOR Loans may be
continued as provided herein, provided that any continuation of such
Loans shall not be (as to each Borrowing of such Loans as continued for
an applicable Interest Period) less than $5,000,000 for each Lender and
shall be in an integral multiple of $1,000,000. All or part
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of any B/A Loans may be continued as provided herein, provided that any
continuation of such Loans shall not be (as to each Borrowing of such
Loans as continued for an applicable Interest Period) less than
C$5,000,000 for each Lender and shall be in an integral multiple of
C$1,000,000.
(c) CONTINUATION OR CONVERSION UPON DEFAULT. If no Default shall have
occurred and be continuing, each LIBOR Loan or B/A Loan may be
continued or converted as provided in this Section 2.12.
(d) CONVERSION TO ABR OR CANADIAN PRIME RATE. The Borrowers may elect to
convert any LIBOR Loan on the last day of the then current Interest
Period relating thereto to an ABR Loan by giving Advance Notice to the
Administrative Agent of such election. The Canadian Borrowers may elect
to convert any B/A Loan on the last day of the then current Interest
Period relating thereto to a Canadian Prime Loan by giving Advance
Notice to the Canadian Administrative Agent of such election.
(e) CONVERSION TO LIBOR RATE. If no Default shall have occurred and be
continuing, the Borrowers may elect to convert any ABR Loan at any time
or from time to time to a LIBOR Loan by giving Advance Notice (which
shall be irrevocable) to the Administrative Agent of such election,
specifying each Interest Period therefor.
(f) CONVERSION TO B/A LOAN. If no Default shall have occurred and be
continuing, the Borrowers may elect to convert any Canadian Prime Loan
at any time or from time to time to a B/A Loan by giving Advance Notice
to the Canadian Administrative Agent of such election, specifying each
Interest Period therefor.
SECTION 2.13 FEES.
(a) US REVOLVING CREDIT COMMITMENTS. The US Borrowers shall jointly and
severally pay to the Administrative Agent for the account of and
distribution to each US Revolving Lender in accordance with its US
Revolving Credit Percentage a commitment fee, for the period commencing
on the Closing Date to and including the Maturity Date (or such earlier
date as the US Revolving Credit Commitments shall have been terminated
entirely), computed at a rate per annum equal to the Applicable Margin,
on the average daily excess amount of the US Revolving Credit
Commitments over the US Revolving Credit Exposure. The commitment fees
on the US Revolving Credit Commitments earned from and after the
Closing Date shall be payable in arrears on the first Business Day of
each month, commencing on June 30, 2003.
(b) CANADIAN REVOLVING CREDIT COMMITMENTS. The Canadian Borrowers shall pay
to the Canadian Administrative Agent for the account of and
distribution to each Canadian Revolving Lender in accordance with its
Canadian Revolving Credit Percentage a commitment fee, for the period
commencing on the Closing Date to and including the Maturity Date (or
such earlier date as the Canadian Revolving Credit Commitments shall
have been terminated entirely), computed at a rate per annum equal to
the Applicable Margin, on the average daily excess amount of the
Canadian Revolving Credit
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Commitments over the Canadian Revolving Credit Exposure. The commitment
fees on the Canadian Revolving Credit Commitments earned from and after
the Closing Date shall be payable in arrears on the first Business Day
of each month, commencing on June 30, 2003.
(c) US LETTERS OF CREDIT.
(1) The US Borrowers shall jointly and severally pay to the
applicable Issuing Bank, with respect to any issuance,
amendment, transfer, or cancellation prior to expiration of
any US Letter of Credit and for each drawing made thereunder,
documentary and processing charges in accordance with such
Issuing Bank's standard schedule for such charges in effect at
the time of, and payable at the time of, such issuance,
amendment, transfer, cancellation or drawing, as the case may
be, as well as a fronting fee in an amount to be agreed from
time to time between the US Borrowers and the applicable
Issuing Bank. All fees payable pursuant to this Section
2.13(c)(1) shall be retained by the applicable Issuing Bank.
(2) The US Borrowers will jointly and severally pay to the
Administrative Agent for the account of and pro rata
distribution to each US Revolving Lender a fee on the daily
average amount available for drawings under each US Letter of
Credit, in each case for the period from and including the
date of issuance of such US Letter of Credit to and excluding
the date of expiration or termination thereof computed at a
per annum rate for each day equal to 2.25%. Such fees shall be
payable in arrears on the first Business Day of each month.
(d) CANADIAN LETTERS OF CREDIT.
(1) The Canadian Borrowers shall jointly and severally pay to the
applicable Issuing Bank, with respect to any issuance,
amendment, transfer, or cancellation prior to expiration of
any Canadian Letter of Credit and for each drawing made
thereunder, documentary and processing charges in accordance
with such Issuing Bank's standard schedule for such charges in
effect at the time of, and payable at the time of, such
issuance, amendment, transfer, cancellation or drawing, as the
case may be, as well as a fronting fee in an amount to be
agreed from time to time between the US Borrowers and the
applicable Issuing Bank. All fees payable pursuant to this
Section 2.13(d)(1) shall be retained by the applicable Issuing
Bank.
(2) The Canadian Borrowers will jointly and severally pay to the
Canadian Administrative Agent for the account of and pro rata
distribution to each Canadian Revolving Lender a fee on the
daily average amount available for drawings under each
Canadian Letter of Credit, in each case for the period from
and including the date of issuance of such Canadian Letter of
Credit to and excluding the date of expiration or termination
thereof computed at a per annum rate for each day equal to
2.25%. Such fees shall be payable in arrears on the first
Business Day of each month.
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(e) TERMINATION FEE. If all Revolving Credit Commitments are terminated on
or before the date which is one year after the Closing Date (including
a termination pursuant to Article 8 hereof), the Borrowers shall pay to
the Administrative Agent for distribution to the Lenders in accordance
with their respective Applicable Percentages, a termination fee in an
amount equal to the product of (i) the Revolving Credit Commitments,
and (ii) 1%. The termination fees provided for herein shall be due and
payable on the effective date of such termination.
(f) AUDIT AND DUE DILIGENCE FEES. On the Closing Date, the Borrowers shall
pay to the Administrative Agent (i) all reasonable fees and expenses
incurred by the Administrative Agent, the Canadian Administrative Agent
or the Lenders in connection with any audits conducted by Deloitte &
Touche prior to the Closing Date, (ii) all reasonable fees and/or
verification costs incurred by the Administrative Agent or the Canadian
Administrative Agent in connection with audits conducted against the
Borrowers' property and assets prior to the Closing Date (up to a
maximum of $750 per person, per day), (iii) all reasonable inventory
appraisal costs and expenses incurred prior to the Closing Date, and
(iv) any other reasonable out-of-pocket expenses related to any of the
foregoing.
(g) FEE LETTERS. The US Borrowers shall jointly and severally pay to the
Administrative Agent such fees as are set forth in the US Fee Letter,
on the dates and in the manner specified therein, and the Canadian
Borrowers shall jointly and severally pay to the Canadian
Administrative Agent such fees as are set forth in the Canadian Fee
Letter, on the dates and in the manner set forth therein.
SECTION 2.14 PAYMENTS, ETC.
(a) WITHOUT SETOFF, ETC. Except as otherwise specifically provided herein,
all payments under this Agreement shall be made to the Administrative
Agent (if such payment is made on or in respect of US Loans or US
Commitments) or to the Canadian Administrative Agent (if such payment
is made on or in respect of Canadian Loans or Canadian Commitments) for
the account of the appropriate Lenders without defense, set-off or
counterclaim not later than 1:00 p.m. Eastern time on the date when due
and shall be made in Dollars (unless such payment is a payment of
principal or interest on C$ Denominated Loans or Reimbursement
Obligations with respect to Canadian Letters of Credit denominated in
C$, in which case such payments shall be in C$) in immediately
available funds at the Payment Office of the appropriate Agent. Except
with respect to Swingline Loans, the Administrative Agent or the
Canadian Administrative Agent will promptly thereafter distribute funds
in the form received relating to the payment of principal or interest
or commitment fees ratably to the appropriate Lenders for the account
of their respective Lending Offices, and funds in the form received
relating to the payment of any other amount payable to any Lender to
such Lender for the account of its applicable Lending Office.
(b) NON-BUSINESS DAYS. Whenever any payment to be made hereunder or under
any Note shall be stated to be due on a day which is not a Business
Day, the due date thereof shall be extended to the next succeeding
Business Day (except as otherwise provided in
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Section 2.7 hereof) and, with respect to payments of principal,
interest thereon shall be payable at the applicable rate during such
extension.
(c) COMPUTATIONS. All computations of interest (other than interest on
LIBOR Loans) and fees shall be made on the basis of a year of 365 days
for the actual number of days (including the first day but excluding
the last day) occurring in the period for which such interest or fees
are payable. All computations of interest on LIBOR Loans shall be made
on the basis of a year of 360 days for the actual number of days
(including the first day but excluding the last day) occurring in the
period for which such interest are payable. Each determination by the
Administrative Agent or the Canadian Administrative Agent of an
interest rate or fee hereunder shall, except for manifest error, be
final, conclusive and binding for all purposes. If the Administrative
Agent or the Canadian Administrative Agent and the Borrowers determine
that manifest error exists, said parties shall correct such error by
way of an adjustment to the next payment due hereunder. For the
purposes of the Interest Act (Canada) and disclosure thereunder,
whenever any interest or any fee to be paid hereunder or in connection
herewith is to be calculated on the basis of any period of time that is
less than a calendar year, the yearly rate of interest to which the
rate used in such calculation is equivalent is the rate so used
multiplied by the actual number of days in the calendar year in which
the same is to be ascertained and divided by 360. The rates of interest
under this Agreement are nominal rates, and not effective rates or
yields. The principle of deemed reinvestment of interest does not apply
to any interest calculation under this Agreement.
SECTION 2.15 INTEREST RATE NOT ASCERTAINABLE, ETC. In the event that the
Administrative Agent or the Canadian Administrative Agent shall have determined
(which determination shall be reasonably exercised and shall, absent manifest
error, be final, conclusive and binding upon all parties) that on any date for
determining the LIBOR Rate for any Interest Period, by reason of any changes
affecting the London interbank LIBOR market, or any Lender's position in such
market, adequate and fair means do not exist for ascertaining the applicable
interest rate on the basis provided for in the definition of LIBOR Rate, then,
and in any such event, the Administrative Agent or the Canadian Administrative
Agent (as applicable) shall forthwith give notice (by telephone confirmed in
writing) to the Borrowers and to the Lenders of such determination. Until the
Administrative Agent or the Canadian Administrative Agent (as applicable)
notifies the Borrowers that the circumstances giving rise to the suspension
described herein no longer exist, the obligations of the Lenders to make LIBOR
Loans shall be immediately suspended, any Borrowing of LIBOR Loans that is
requested (by continuation, conversion or otherwise) shall instead be made as a
Borrowing of ABR Loans, and any outstanding LIBOR Loan shall be converted, on
the last day of the then current Interest Period applicable thereto, to a ABR
Loan.
SECTION 2.16 ILLEGALITY.
(a) DETERMINATIONS OF ILLEGALITY OF LIBOR LOAN. In the event that any
Lender shall have determined (which determination shall be reasonably
exercised and shall, absent manifest error, be final, conclusive and
binding upon all parties) at any time that the making or continuance of
any LIBOR Loan has become unlawful as a result of compliance by such
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Lender in good faith with any applicable law, governmental rule,
regulation, guideline or order (whether or not having the force of law
and whether or not failure to comply therewith would be unlawful),
then, in any such event, the Lender shall give prompt notice (by
telephone confirmed in writing) to the Borrowers, the Administrative
Agent and the Canadian Administrative Agent of such determination
(which notice the Administrative Agent shall promptly transmit to the
other Lenders).
(b) LIBOR LOANS SUSPENDED. Upon the giving of the notice to the Borrowers
referred to in Section 2.16(a) above, (1) the Borrowers' right to
request (by continuation, conversion or otherwise) and such Lender's
obligation to make LIBOR Loans shall be immediately suspended, and
thereafter, any requested Borrowing of LIBOR Loans shall, as to such
Lender only, be deemed to be a request for a ABR Loan, and (2) if the
affected LIBOR Loan or Loans are then outstanding, the Borrowers shall
immediately, or if permitted by applicable law, no later than the date
permitted thereby, upon at least one Business Day's written notice to
the Administrative Agent and the affected Lender, convert each such
LIBOR Loan into a ABR Loan, provided that if more than one Lender is
affected at any time, then all affected Lenders must be treated the
same pursuant to this subsection.
(c) DETERMINATIONS OF ILLEGALITY OF DOLLAR DENOMINATED LOANS. In the event
that any Canadian Revolving Lender shall have determined (which
determination shall be reasonably exercised and shall, absent manifest
error, be final, conclusive and binding upon all parties) at any time
that the making or continuance of any Dollar Denominated Loan has
become unlawful as a result of compliance by such Canadian Revolving
Lender in good faith with any applicable law, governmental rule,
regulation, guideline or order (whether or not having the force of law
and whether or not failure to comply therewith would be unlawful),
then, in any such event, the Canadian Revolving Lender shall give
prompt notice (by telephone confirmed in writing) to the Canadian
Borrowers and to the Canadian Administrative Agent of such
determination (which notice the Canadian Administrative Agent shall
promptly transmit to the other Canadian Revolving Lenders).
(d) DOLLAR DENOMINATED LOAN SUSPENDED. Upon the giving of the notice to the
Canadian Borrowers referred to in Section 2.16(c) above, (1) the
Canadian Borrowers' right to request (by continuation, conversion or
otherwise) and such Canadian Revolving Lender's obligation to make
Dollar Denominated Loans shall be immediately suspended, and
thereafter, any requested Borrowing of Dollar Denominated Loans shall,
as to such Canadian Revolving Lender only, be deemed to be a request
for a Canadian Revolving Credit Loan denominated in C$, and (2) if the
affected Dollar Denominated Loan or Loans are then outstanding, the
Canadian Borrowers shall immediately, or if permitted by applicable
law, no later than the date permitted thereby, upon at least one
Business Day's written notice to the Canadian Administrative Agent and
the affected Canadian Revolving Lender, convert each such Dollar
Denominated Loan which is a LIBOR Loan into a B/A Loan and convert each
such Dollar Denominated Loan which is a ABR Loan into a Canadian Prime
Loan, provided that if more than one Lender is affected at any time,
then all affected Lenders must be treated the same pursuant to this
subsection.
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SECTION 2.17 INCREASED COSTS.
(a) LIBOR REGULATIONS, ETC. If, by reason of (x) the introduction of or any
change (including any change by way of imposition or increase of
reserve requirements) in or in the interpretation of any law or
regulation, or (y) the compliance with any guideline or request issued
by any central bank or other governmental authority or
quasi-governmental authority exercising control over banks or financial
institutions generally (whether or not having the force of law):
(1) any Lender (or its applicable Lending Office) shall be subject
to any Tax or other charge with respect to its LIBOR Loans or
its obligation to make LIBOR Loans, or shall change the basis
of taxation of payments to any Lender of the principal of or
interest on its LIBOR Loans or its obligation to make LIBOR
Loans (except for changes in the rate of tax on the overall
net income or gross receipts of such Lender or its applicable
Lending Office imposed by the jurisdiction in which such
Lender's principal executive office or applicable Lending
Office is located); or
(2) any reserve (including any imposed by the Board), special
deposit or similar requirement against assets of, deposits
with or for the account of, or credit extended by, any Lender
or its applicable Lending Office shall be imposed or deemed
applicable or any other condition affecting its LIBOR Loans or
its obligations to make LIBOR Loans shall be imposed on any
Lender or its applicable Lending Office or the interbank LIBOR
market or the secondary certificate of deposit market;
and as a result thereof there shall be any increase in the cost to such Lender
of agreeing to make or making, funding or maintaining LIBOR Loans or there shall
be a reduction in the amount received or receivable by such Lender or its
applicable Lending Office, then the applicable Borrowers shall from time to
time, upon written notice from and demand by such Lender (with a copy of such
notice and demand to the Administrative Agent and the Canadian Administrative
Agent), pay to such Lender on demand additional amounts determined by such
Lender to be sufficient to indemnify such Lender against such increased cost. A
certificate as to the amount of such increased cost and the calculation thereof,
submitted to the Borrowers and the Administrative Agent by such Lender, shall,
except for manifest error, be final, conclusive and binding for all purposes.
(b) COSTS. If any Lender shall advise the Administrative Agent or the
Canadian Administrative Agent that at any time, because of the
circumstances described in clauses (x) or (y) in Section 2.17(a) or any
other circumstances affecting such Lender or the London interbank
market or such Lender's position in such market, the LIBOR Rate, as
determined in good faith by the Administrative Agent or the Canadian
Administrative Agent, will not adequately and fairly reflect the cost
to such Lender of funding its LIBOR Loans, then, and in any such event:
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(1) the Administrative Agent or the Canadian Administrative Agent
shall forthwith give notice (by telephone confirmed in
writing) to the Borrowers and to the Lenders of such advice;
and
(2) the Borrowers' right to request a Borrowing of LIBOR Loans
from such Lender and such Lender's obligation to make LIBOR
Loans shall be immediately suspended, any such Borrowing of
LIBOR Loans that is requested (by continuation, conversion or
otherwise) shall, as to such Lender only, be deemed to be a
request for a ABR Loan, and any such outstanding LIBOR Loan
from such Lender shall be converted, on the last day of the
then current Interest Period applicable thereto, to a ABR
Loan.
(c) CAPITAL ADEQUACY. If (1) the introduction of or any change after the
date hereof (including any change by way of imposition or increase of
reserve requirements) in or in the interpretation of any law or
regulation, or (2) the compliance with any guideline or request issued
by any central bank or other Governmental Authority or other authority
exercising control over banks or financial institutions generally
(whether or not having the force of law), affects or would affect the
amount of capital required to be maintained by any Lender or any
corporation controlling such Lender, and the amount of such capital is
increased by or based upon the existence of such Lender's Loans or such
Lender's Commitment hereunder and other commitments to lend or of the
Letters of Credit (or similar contingent obligations), then, upon
written request therefor by such Lender (with a copy of such request to
the Administrative Agent), the applicable Borrowers shall pay to such
Lender, from time to time as specified by such Lender, additional
amounts sufficient to compensate such Lender for the increased cost of
such additional capital in light of such circumstances, to the extent
that such Lender reasonably determines such increase in capital to be
allocable to the existence of such Lender's Loans or such Lender's
commitment to lend hereunder or to the issuance or maintenance of the
Letters of Credit. A certificate as to such amounts and the calculation
thereof, submitted to the Borrowers and the Administrative Agent by
such Lender, shall be conclusive and binding for all purposes, absent
manifest error.
(d) ISSUING BANK. The rights and benefits of the Lenders under this Section
2.17 shall also apply to any Issuing Bank in its capacity as such.
SECTION 2.18 CHANGE OF LENDING OFFICE. Each Lender agrees that it will use
reasonable efforts to designate an alternate Lending Office with respect to any
of its LIBOR Loans affected by the matters or circumstances described in Section
2.15, Section 2.16 or Section 2.17 to reduce the liability of the Borrowers or
avoid the results provided thereunder, so long as such designation is not
disadvantageous to such Lender as determined by such Lender in its sole
discretion.
SECTION 2.19 FUNDING LOSSES. Each of the Borrowers shall compensate each Lender,
upon its written request (which request shall set forth the basis for requesting
such amounts and shall, absent manifest error, be final, conclusive and binding
upon all of the parties hereto), for all losses, expenses and liabilities
(including any interest paid by such Lender to lenders of funds borrowed by it
to make or carry its LIBOR Loans to such Borrowers) ("losses"), which the
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Lender may sustain: (a) if for any reason (other than a default by such Lender)
a Borrowing of LIBOR Loans does not occur on the date specified therefor in a
Borrowing Request (whether or not withdrawn), including a failure by the
applicable Borrowers to fulfill on the date of any Borrowing of LIBOR Loans the
conditions set forth in Article 3, or to convert, continue any LIBOR Loan
hereunder after irrevocable notice of such conversion or continuation has been
given pursuant to Section 2.12; (b) if any payment, prepayment or conversion of
any of its LIBOR Loans required or permitted by any other provision of this
Agreement or otherwise, or any assignment of a LIBOR Loan pursuant to Section
2.23, in each case is made or deemed made on a date which is not the last day of
the Interest Period applicable thereto; or (c) if, for any reason, any of the
Borrowers defaults in its obligation to repay its LIBOR Loans or B/A Loans as
and when due and payable (at the due date thereof, whether at scheduled
maturity, by acceleration, irrevocable notice of prepayment or otherwise).
SECTION 2.20 SHARING OF PAYMENTS, ETC.
(a) If any US Revolving Lender shall obtain any payment or reduction
(including any amounts received as adequate protection of a deposit
treated as cash collateral under the Bankruptcy Code) of any
obligations of the US Borrowers hereunder (whether voluntary,
involuntary, through the exercise of any right of set-off, or
otherwise) in excess of its ratable share of payments or reductions on
account of such obligations obtained by all the US Revolving Lenders,
such US Revolving Lender shall forthwith notify each of the other US
Revolving Lenders and the Administrative Agent of such receipt, and
purchase from the other US Revolving Lenders such participations in the
affected obligations as shall be necessary to cause such purchasing US
Revolving Lender to share the excess payment or reduction, net of costs
incurred in connection therewith, ratably with each of them; provided
that, if all or any portion of such excess payment or reduction is
thereafter recovered from such purchasing US Revolving Lender or
additional costs are incurred, the purchase shall be rescinded and the
purchase price restored to the extent of such recovery or such
additional costs, but without interest. The US Borrowers agree that any
US Revolving Lender so purchasing a participation from another US
Revolving Lender pursuant to this Section 2.20 may, to the fullest
extent permitted by law, exercise all its rights of payment (including
the right of set-off) with respect to such participation as fully as if
such US Revolving Lender were the direct creditor of the US Borrowers
in the amount of such participation.
(b) If any Canadian Revolving Lender shall obtain any payment or reduction
of any obligation of the Canadian Borrowers hereunder (whether
voluntary, involuntary, through the exercise of any right of set-off,
or otherwise) in excess of its ratable share of payments or reductions
on account of such obligations obtained by all the Canadian Revolving
Lenders, such Canadian Revolving Lender shall forthwith notify each of
the other Canadian Revolving Lenders and the Canadian Administrative
Agent of such receipt, and purchase from the other Canadian Revolving
Lenders such participations in the affected obligations as shall be
necessary to cause such purchasing Canadian Revolving Lender to share
the excess payment or reduction, net of costs incurred in connection
therewith, ratably with each of them; provided that, if all or any
portion of
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such excess payment or reduction is thereafter recovered from such
purchasing Canadian Revolving Lender or additional costs are incurred,
the purchase shall be rescinded and the purchase price restored to the
extent of such recovery or such additional costs, but without interest.
The Canadian Borrowers agree that any Canadian Revolving Lender so
purchasing a participation from another Canadian Revolving Lender
pursuant to this Section 2.20 may, to the fullest extent permitted by
law, exercise all its rights of payment (including the right of
set-off) with respect to such participation as fully as if such
Canadian Revolving Lender were the direct creditor of the Canadian
Borrowers in the amount of such participation.
SECTION 2.21 TAXES.
(a) PAYMENTS FREE AND CLEAR. Any and all payments by or on account of any
obligation of any of the Borrowers hereunder shall be made free and
clear of and without deduction or withholding for any Indemnified Taxes
or Other Taxes; provided, that, if any of the Borrowers shall be
required to deduct or withhold any Indemnified Taxes or Other Taxes
from such payments, then (1) the amounts payable by the Borrowers shall
be increased so that, after making all required deductions and
withholdings (including deductions and withholdings applicable to
additional sums payable under this Section 2.21), the Administrative
Agent, the Canadian Administrative Agent, the Lenders or the Issuing
Banks (as the case may be) (each, in this Section 2.21, an
"INDEMNITEE") receives an amount equal to the sum they would have
received had no such deduction or withholding been made, (2) the
applicable Borrowers shall make such deductions or withholdings, and
such Borrowers shall pay the full amount deducted or withheld to the
relevant Governmental Authority in accordance with applicable law.
(b) OTHER TAXES. In addition, the applicable Borrowers shall pay any Other
Taxes to the relevant Governmental Authority in accordance with
applicable law.
(c) INDEMNIFICATION. Each of the Borrowers shall indemnify each Indemnitee
on an After Tax Basis, upon written demand therefor, for the full
amount of any Indemnified Taxes or Other Taxes paid by such Indemnitee
on or with respect to any payment by or on account of any obligation of
such Borrowers hereunder (including Indemnified Taxes or Other Taxes
imposed or asserted on or attributable to amounts payable under this
Section 2.21) and any penalties, interest or additions thereto and all
reasonable costs and 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 the applicable Borrowers by any Indemnitee, on its own
behalf or on behalf of any Lender or an Issuing Bank, shall be
conclusive absent manifest error.
(d) RECEIPTS. As soon as practicable after any payment of Indemnified Taxes
or Other Taxes by any of the Borrowers to a Governmental Authority,
such Borrowers shall deliver to the Administrative Agent or the
Canadian Administrative Agent, as applicable, the original or a
certified copy of a receipt issued by such Governmental Authority
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evidencing such payment, a copy of the return reporting such payment or
other evidence of such payment reasonably satisfactory to the
Administrative Agent.
(e) TAX CERTIFICATIONS. Each Lender shall provide to the Borrowers, on the
Closing Date, all such certifications and other confirmations as may be
reasonably required by the Borrowers to evidence or confirm that (i) in
the case of a Canadian Lender, such Canadian Lender is either a
resident of Canada within the meaning of the Income Tax Act (Canada) or
an authorized foreign bank which is deemed to be a resident of Canada
for purposes of Part XIII of the Income Tax Act (Canada) in respect of
amounts payable to it hereunder, or (ii) in the case of a US Lender,
such U.S. Lender is either a resident of Canada within the meaning of
the Income Tax Act (Canada) or an authorized foreign bank which is
deemed to be a resident of Canada for purposes of Part XIII of the
Income Tax Act (Canada) ) in respect of amounts payable to it
hereunder, and either (x) such US Lender is a "United States person",
within the meaning of Section 7701 of the Code, (y) if any such US
Lender is not a non-US bank, such US Lender has taken all steps within
its control to ensure that it is eligible for the portfolio interest
exemption under Section 871(h) or Section 881(c) of the Code, or (z)
amounts payable hereunder to such US Lender are effectively connected
to a trade or business of such US Lender in the United States in the
case of a US Lender.
(f) SURVIVAL. Without prejudice to the survival of any other agreement
contained herein, the agreements and obligations contained in this
Section 2.21 shall survive the payment in full of principal and
interest hereunder.
SECTION 2.22 PRO RATA TREATMENT. Subject to Section 2.4(d), each Borrowing of US
Revolving Credit Loans shall be made, and each payment on account of any
commitment fee in respect of the US Revolving Credit Commitments hereunder shall
be allocated by the Administrative Agent, and any reduction of the US Revolving
Credit Commitments of the US Revolving Lenders shall be allocated by the
Administrative Agent, pro rata according to the relevant US Revolving Credit
Percentages of the US Revolving Lenders. Subject to Section 2.4(d) and Section
2.8, each payment (including each prepayment) on account of principal of and
interest on any US Revolving Credit Loans shall be allocated by the
Administrative Agent pro rata according to the respective outstanding principal
amounts of such US Revolving Credit Loans then held by the US Revolving Lenders.
Subject to Section 2.4(d), each Borrowing of Canadian Revolving Credit Loans
shall be made, and each payment on account of any commitment fee in respect of
the Canadian Revolving Credit Commitments hereunder shall be allocated by the
Canadian Administrative Agent, and any reduction of the Canadian Revolving
Credit Commitments of the Canadian Revolving Lenders shall be allocated by the
Canadian Administrative Agent, pro rata according to the relevant Canadian
Revolving Credit Percentages of the Canadian Revolving Lenders. Subject to
Section 2.4(d) and Section 2.8, each payment (including each prepayment) on
account of principal of and interest on any Canadian Revolving Credit Loans
shall be allocated by the Canadian Administrative Agent pro rata according to
the respective outstanding principal amounts of such Canadian Revolving Credit
Loans then held by the Canadian Revolving Lenders.
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SECTION 2.23 REPLACEMENT OF LENDERS. If (i) any Lender does not make a LIBOR
Loan pursuant to Section 2.16 or fails to designate an alternate Lending Office
pursuant to Section 2.18 or (ii) if any Lender holding less than 25% of the
aggregate Commitments at the relevant time seeks indemnification for increased
costs pursuant to Section 2.17 or is owed additional amounts pursuant to Section
2.21, then the Borrowers shall have the right, if no Default then exists, to
replace such Lender with another bank or financial institution with the consent
of the Administrative Agent and the Canadian Administrative Agent, which consent
shall not be unreasonably withheld, provided that (a) the obligations of the
Borrowers owing hereunder or under any other Financing Document to the Lender
being replaced (including such increased costs) that are not being assigned to
the replacement lender shall be paid in full to the Lender being replaced
concurrently with such replacement lender, (b) the replacement lender shall
execute an Assignment and Acceptance pursuant to which it shall become a party
hereto as provided in Section 10.7, (c) upon compliance with the provisions for
assignment provided in Section 10.7 and the payment of amounts referred to in
clause (a), the replacement lender shall constitute a "Lender" hereunder and the
Lender being so replaced shall no longer constitute a "Lender" hereunder, and
(d) any such replacement shall be effected within 90 days after the Borrowers
became aware of circumstances giving rise to such right of replacement.
SECTION 2.24 ADVANCES OF REVOLVING CREDIT LOANS TO SATISFY LENDER INDEBTEDNESS.
Each of the Borrowers and each Lender hereby agrees with the Administrative
Agent, the Canadian Administrative Agent and each other Lender that, on each
date on which any payment of interest, fees, principal or other amounts are due
and owing hereunder or under any of the other Financing Documents, the
Administrative Agent or the Canadian Administrative Agent may, in its sole
discretion, but without any obligation to do so and subject to all other terms
of this Agreement (other than any request for delivery of a Borrowing Request
hereunder), cause a Borrowing of (a) US Swingline Loans to the extent of the
remaining US Swingline Availability, and thereafter such Borrowings shall be US
Revolving Credit Loans which shall be ABR Loans, or (b) Dollar Denominated
Canadian Swingline Loans to the extent of the remaining Canadian Swingline
Availability, and thereafter such Borrowings shall be Dollar Denominated
Canadian Revolving Credit Loans which shall be ABR Loans, each to be made on
such date in an amount sufficient to satisfy in full all such payments of
interest, fees or other amounts which are then due hereunder (including
principal, interest, and other amounts owing in respect of Agent Advances), and
the Administrative Agent or the Canadian Administrative Agent may disburse the
proceeds of such Borrowing to each other Agent and Lender to satisfy all such
obligations and liabilities which are then due. The Administrative Agent or the
Canadian Administrative Agent, as applicable, shall notify the Borrowers
promptly after any Borrowing is made in accordance with this Section 2.24;
provided that any failure by the Administrative Agent or the Canadian
Administrative Agent to provide any such notice shall not relieve the applicable
Borrowers from their obligation to repay any such Borrowing in accordance with
this Agreement.
SECTION 2.25 JOINT AND SEVERAL LIABILITY OF US BORROWERS; RIGHTS OF CONTRIBUTION
AMONG US BORROWERS.
(a) Each US Borrower states and acknowledges that: (1) pursuant to this
Agreement, the US Borrowers desire to utilize their borrowing potential
on a consolidated basis to the same
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extent possible as if they were merged into a single corporate entity;
(2) each US Borrower has determined that it will benefit specifically
and materially from the advances of credit contemplated by this
Agreement; (3) it is both a condition precedent to the obligations of
the Administrative Agent, the Canadian Administrative Agent, the
Lenders and the Issuing Banks hereunder and a desire of each US
Borrower that each US Borrower execute and deliver this Agreement; and
(4) each US Borrower has requested and bargained for the structure and
terms of and security for the advances contemplated by this Agreement.
(b) Each US Borrower hereby irrevocably and unconditionally: (i) agrees
that it is jointly and severally liable to the Administrative Agent and
the Lenders for the full and prompt payment and performance of the
obligations of each US Borrower under this Agreement and each other
Financing Document that may specify that a particular US Borrower is
responsible for a given payment or performance; (ii) agrees to fully
and promptly perform all of its obligations hereunder with respect to
each advance of credit hereunder as if such advance had been made
directly to it; and (iii) agrees as a primary obligation to indemnify
the Administrative Agent, the Canadian Administrative Agent, each
Lender and each Issuing Bank, on demand, for and against any loss
incurred by the Administrative Agent, the Canadian Administrative, any
Issuing Bank or any Lender as a result of any of the obligations of any
Borrower (the "SUBJECT BORROWER") being or becoming void, voidable,
unenforceable or ineffective for any reason whatsoever, whether or not
known to the subject US Borrower or any Person, the amount of such loss
being the amount which the Administrative Agent, the Canadian
Administrative Agent, any Issuing Bank or the Lenders (or any of them)
would otherwise have been entitled to recover from the subject
Borrower.
(c) It is the intent of each US Borrower that the indebtedness, obligations
and liabilities hereunder of no one of them be subject to challenge on
any basis related to any federal or state law dealing with fraudulent
conveyances or any other law related to transfers for less than fair or
reasonably equivalent value. Accordingly, as of the date hereof, the
liability of each US Borrower under this Section 2.25, together with
all of its other liabilities to all persons as of the date hereof and
as of any other date on which a transfer is deemed to occur by virtue
of this Agreement, calculated in amount sufficient to pay its probable
net liabilities on its existing indebtedness as the same become
absolute and matured ("DATED LIABILITIES") is and is to be, less than
the amount of the aggregate of a fair valuation of its property as of
such corresponding date ("DATED ASSETS"). To this end, each US Borrower
under this Section 2.25 (i) grants to and recognizes in each other US
Borrower ratably, rights of subrogation and contribution in the amount,
if any, by which the Dated Assets of such US Borrower, but for the
aggregate rights of subrogation and contribution in its favor
recognized herein, would exceed the Dated Liabilities of such US
Borrower or, as the case may be, and (ii) acknowledges receipt of and
recognizes its right to subrogation and contribution ratably from the
other US Borrowers in the amount, if any, by which the Dated
Liabilities of such US Borrower, but for the aggregate of subrogation
and contribution in its favor recognized herein, would exceed the Dated
Assets of such US Borrower under this Section 2.25. In recognizing the
value
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of the Dated Assets and the Dated Liabilities, it is understood that
each US Borrower will recognize, to at least the same extent of their
aggregate recognition of liabilities hereunder, their rights to
subrogation and contribution hereunder. It is a material objective of
this Section 2.25 that each US Borrower recognizes rights to
subrogation and contribution rather than be deemed to be insolvent (or
in contemplation thereof) by reason of an arbitrary interpretation of
its joint and several obligations hereunder. Notwithstanding anything
in this Section 2.25 to the contrary, the obligations of GUSAP and each
of the US Operating Borrowers for any Loans made directly to such
Borrowers shall not be affected by this Section 2.25.
SECTION 2.26 PARTICIPATIONS IN US SWINGLINE LOANS. The US Swingline Lender may
by written notice given to the Administrative Agent (such notice to be given not
less frequently than weekly if US Swingline Loans are outstanding) not later
than 10:00 a.m. (Eastern time), on any Business Day require the US Revolving
Lenders to acquire participations within one (1) Business Day in all or a
portion of the US Swingline Loans outstanding. Such notice to the Administrative
Agent shall specify the aggregate amount of US Swingline Loans in which the US
Revolving Lenders will participate. Promptly upon receipt of such notice, the
Administrative Agent will give notice thereof to each US Revolving Lender,
specifying in such notice such US Revolving Lender's Revolving Credit Percentage
of such US Swingline Loans. Each US Revolving Lender hereby absolutely and
unconditionally agrees, upon receipt of notice as provided above in this
paragraph, to pay to the Administrative Agent, for account of the US Swingline
Lender, such US Revolving Lender's US Revolving Credit Percentage of such US
Swingline Loans. Each US Revolving Lender acknowledges and agrees that its
obligation to acquire participations in US Swingline Loans pursuant to this
paragraph is absolute and unconditional and shall not be affected by any
circumstance whatsoever, including the occurrence and continuance of a Default
or Event of Default or reduction or termination of the Aggregate US Revolving
Credit Commitments, and that each such payment shall be made without any offset,
abatement, withholding or reduction whatsoever. Each US Revolving Lender shall
comply with its obligation under this Section 2.26 by wire transfer of
immediately available funds, in the same manner as provided in Section 2.4(a)
with respect to Loans made by such US Revolving Lender (and Section 2.4(a) shall
apply, mutatis mutandis, to the payment obligations of the US Revolving
Lenders), and the Administrative Agent shall promptly pay to the US Swingline
Lender the amounts so received by it from the US Revolving Lenders. The
Administrative Agent shall notify the US Borrowers of any participations in any
US Swingline Loan acquired pursuant to this Section 2.26, and thereafter
payments in respect of such US Swingline Loan shall be made to the
Administrative Agent and not to the US Swingline Lender. Any amounts received by
the US Swingline Lender from the US Borrower (or other party on behalf of the US
Borrower) in respect of a US Swingline Loan after receipt by the US Swingline
Lender of the proceeds of a sale of participations therein shall be promptly
remitted to the Administrative Agent; any such amounts received by the
Administrative Agent shall be promptly remitted by the Administrative Agent to
the US Revolving Lenders that shall have made their payments pursuant to this
paragraph and to the US Swingline Lender, as their interests may appear. The
purchase of participations in a US Swingline Loan pursuant to this Section 2.26
shall not relieve the US Borrowers of any default in the payment thereof.
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SECTION 2.27 PARTICIPATIONS IN CANADIAN SWINGLINE LOANS. The Canadian Swingline
Lender may by written notice given to the Canadian Administrative Agent (such
notice to be given not less frequently than weekly if Canadian Swingline Loans
are outstanding) not later than 10:00 a.m. (Eastern time), on any Business Day
require the Canadian Revolving Lenders to acquire participations within one (1)
Business Day in all or a portion of the Canadian Swingline Loans outstanding.
Such notice to the Canadian Administrative Agent shall specify the aggregate
amount of Canadian Swingline Loans in which the Canadian Revolving Lenders will
participate. Promptly upon receipt of such notice, the Canadian Administrative
Agent will give notice thereof to each Canadian Revolving Lender, specifying in
such notice such Canadian Revolving Lender's Revolving Credit Percentage of such
Canadian Swingline Loans. Each Canadian Revolving Lender hereby absolutely and
unconditionally agrees, upon receipt of notice as provided above in this
paragraph, to pay to the Canadian Administrative Agent, for account of the
Canadian Swingline Lender, such Canadian Revolving Lender's Canadian Revolving
Credit Percentage of such Canadian Swingline Loans. Each Canadian Revolving
Lender acknowledges and agrees that its obligation to acquire participations in
Canadian Swingline Loans pursuant to this paragraph is absolute and
unconditional and shall not be affected by any circumstance whatsoever,
including the occurrence and continuance of a Default or Event of Default or
reduction or termination of the Aggregate Canadian Revolving Credit Commitments,
and that each such payment shall be made without any offset, abatement,
withholding or reduction whatsoever. Each Canadian Revolving Lender shall comply
with its obligation under this Section 2.27 by wire transfer of immediately
available funds, in the same manner as provided in Section 2.4(a) with respect
to Loans made by such Canadian Revolving Lender (and Section 2.4(a) shall apply,
mutatis mutandis, to the payment obligations of the Canadian Revolving Lenders),
and the Canadian Administrative Agent shall promptly pay to the Canadian
Swingline Lender the amounts so received by it from the Canadian Revolving
Lenders. The Canadian Administrative Agent shall notify the Canadian Borrowers
of any participations in any Canadian Swingline Loan acquired pursuant to this
Section 2.27, and thereafter payments in respect of such Canadian Swingline Loan
shall be made to the Canadian Administrative Agent and not to the Canadian
Swingline Lender. Any amounts received by the Canadian Swingline Lender from the
Canadian Borrowers (or other party on behalf of the Canadian Borrowers) in
respect of a Canadian Swingline Loan after receipt by the Canadian Swingline
Lender of the proceeds of a sale of participations therein shall be promptly
remitted to the Canadian Administrative Agent; any such amounts received by the
Canadian Administrative Agent shall be promptly remitted by the Canadian
Administrative Agent to the Canadian Revolving Lenders that shall have made
their payments pursuant to this paragraph and to the Canadian Swingline Lender,
as their interests may appear. The purchase of participations in a Canadian
Swingline Loan pursuant to this Section 2.27 shall not relieve the Canadian
Borrowers of any default in the payment thereof.
SECTION 2.28 ADMINISTRATIVE AGENT ADVANCES; PARTICIPATIONS.
(a) Subject to the limitations set forth below, the Administrative
Agent and the Canadian Administrative Agent are authorized by the Borrowers and
the Revolving Lenders, from time to time in the sole discretion of the
Administrative Agent or the Canadian Administrative Agent, as applicable (A)
during the continuance of a Default, or (B) at any time that any of the other
conditions precedent set forth in Article 3 have not been satisfied, to make
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ABR Loans to the US Borrowers or Canadian Prime Loans to the Canadian Borrowers
on behalf of the applicable Revolving Lenders in an aggregate amount outstanding
at any time not to exceed 10% of the US Borrowing Base or the Canadian US
Borrowing Base, as applicable, which the Administrative Agent or the Canadian
Administrative Agent, as applicable, in its reasonable judgment, deems necessary
or desirable (1) to preserve or protect the Collateral, or any portion thereof,
(2) to enhance the likelihood of, or maximize the amount of, repayment of the
Loans and other Lender Indebtedness, or (3) to pay any other amount chargeable
to the Borrowers pursuant to the terms of this Agreement, including costs, fees
and expenses as described in Section 10.4 (any of such advances are herein
referred to as "AGENT ADVANCES"); provided, that (y) notwithstanding any other
provision of this Agreement, the Required Lenders may at any time revoke this
authorization to make Agent Advances, and (b) no Agent Advance shall remain
outstanding for more than 60 days from the date of advance, and all Agent
Advances must have been repaid for at least 10 days before another Agent Advance
may be made. Any such revocation must be in writing and shall become effective
prospectively upon receipt thereof by the Administrative Agent's or the Canadian
Administrative Agent, as applicable. Any Agent Advances shall be secured by the
Liens in and to the Collateral granted to the Administrative Agent or the
Canadian Administrative Agent, as applicable, and shall constitute Lender
Indebtedness hereunder.
(b) The Administrative Agent may by written notice given to the US
Revolving Lenders not later than 2:00 p.m. (Eastern time) on any Business Day
require the US Revolving Lenders to acquire participations within one (1)
Business Day in all or a portion of the Agent Advances to the US Borrowers then
outstanding. Such notice shall specify the aggregate amount of Agent Advances in
which the US Revolving Lenders will participate and each US Revolving Lender's
Revolving Credit Percentage of such Agent Advances. Each US Revolving Lender
hereby absolutely and unconditionally agrees, upon receipt of notice as provided
above in this Section 2.28(b), to pay to the Administrative Agent such US
Revolving Lender's US Revolving Credit Percentage of such Agent Advances. Each
US Revolving Lender acknowledges and agrees that its obligation to acquire
participations in Agent Advances pursuant to this Section 2.28(b) is absolute
and unconditional and shall not be affected by any circumstance whatsoever,
including the occurrence and continuance of a Default or Event of Default or
reduction or termination of the Aggregate US Revolving Credit Commitments, and
that each such payment shall be made without any offset, abatement, withholding
or reduction whatsoever. Each US Revolving Lender shall comply with its
obligation under this Section 2.28(b) by wire transfer of immediately available
funds, in the same manner as provided in Section 2.4(a) with respect to Loans
made by such US Revolving Lender (and Section 2.4(a) shall apply, mutatis
mutandis, to the payment obligations of the US Revolving Lenders). Any amounts
received by the Administrative Agent from any US Borrower (or other party on
behalf of any US Borrower) in respect of Agent Advances after receipt by the
Administrative Agent of the proceeds of a sale of participations therein shall
be promptly remitted to the US Revolving Lenders that shall have made their
payments pursuant to this Section 2.28(b), as their interests may appear. The
purchase of participations in an Agent Advance this Section 2.28(b) shall not
relieve the US Borrowers of any default in the payment thereof.
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(c) The Canadian Administrative Agent may by written notice given to the
Canadian Revolving Lenders not later than 2:00 p.m. (Eastern time) on any
Business Day require the Canadian Revolving Lenders to acquire participations
within one (1) Business Day in all or a portion of the Agent Advances to the
Canadian Borrowers then outstanding. Such notice shall specify the aggregate
amount of Agent Advances in which the Canadian Revolving Lenders will
participate and each Canadian Revolving Lender's Revolving Credit Percentage of
such Agent Advances. Each Canadian Revolving Lender hereby absolutely and
unconditionally agrees, upon receipt of notice as provided above in this Section
2.28(c), to pay to the Administrative Agent such Canadian Revolving Lender's
Canadian Revolving Credit Percentage of such Agent Advances. Each Canadian
Revolving Lender acknowledges and agrees that its obligation to acquire
participations in Agent Advances pursuant to this Section 2.28(c) is absolute
and unconditional and shall not be affected by any circumstance whatsoever,
including the occurrence and continuance of a Default or Event of Default or
reduction or termination of the Aggregate Canadian Revolving Credit Commitments,
and that each such payment shall be made without any offset, abatement,
withholding or reduction whatsoever. Each Canadian Revolving Lender shall comply
with its obligation under this Section 2.28(c) by wire transfer of immediately
available funds, in the same manner as provided in Section 2.4(a) with respect
to Loans made by such Canadian Revolving Lender (and Section 2.4(a) shall apply,
mutatis mutandis, to the payment obligations of the Canadian Revolving Lenders).
Any amounts received by the Canadian Administrative Agent from any Canadian
Borrower (or other party on behalf of the Canadian Borrower) in respect of Agent
Advances after receipt by the Canadian Administrative Agent of the proceeds of a
sale of participations therein shall be promptly remitted to the Canadian
Revolving Lenders that shall have made their payments pursuant to this Section
2.28(c), as their interests may appear. The purchase of participations in an
Agent Advance this Section 2.28(c) shall not relieve the Canadian Borrowers of
any default in the payment thereof.
SECTION 2.29 NEW APPRAISALS. The Borrowers may request, not more frequently than
twice in any Fiscal Year, that the Administrative Agent obtain a new appraisal
of the inventory of the Borrowers to determine whether it is appropriate to
adjust the appraised net recovery values used to calculate the Canadian
Borrowing Base and the US Borrowing Base. Any such appraisals shall be at the
sole cost and expense of the Borrowers. The appraiser which will perform any
such appraisal will be selected by the Administrative Agent from a list of three
appraisal firms (each of which shall have recognized expertise in the
asset-based lending appraisal business, and will not have provided services to
the Borrowers at any time during the previous two years) to be provided by the
Borrowers to the Administrative Agent, provided that if none of the appraisal
firms provided by the Borrowers are acceptable to the Administrative Agent, the
appraiser shall be the same appraiser that conducted the appraisal of inventory
most recently delivered to the Administrative Agent. After receiving a written
report confirming the results of any such appraisal, the Administrative Agent
shall make, within three weeks of receipt of such written report, any adjustment
which the Administrative Agent, in its reasonable discretion, considers
appropriate as a result of such appraisal.
SECTION 2.30 65% ADVANCE RATE PERIOD. Notwithstanding any other provision of
this Agreement, at all times during the 65% Advance Rate Period:
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(a) all references to "$50,000,000" in the definitions of "PERMITTED
ACQUISITION" and "PERMITTED NEW AFFILIATE SUBORDINATED DEBT" and in
Sections 6.9, 7.5, 7.6(i) and 7.6(l) shall be deemed to be references
to "$70,000,000";
(b) all references to "$70,000,000" in the definition of "BLOCK EVENT" and
in Sections 4.5(b) and 4.6(b) shall be deemed to be references to
"$80,000,000";
(c) all references to "$70,000,000" in Section 6.10(g) shall be deemed to
be references to "$90,000,000";
(d) all references to "$40,000,000" in Sections 2.1(h) and 6.12 shall be
deemed to be references to "$60,000,000";
(e) all references to "$100,000,000" in Section 7.20(b) shall be deemed to
be references to "$120,000,000" and all references to "$70,000,000" in
Section 7.20(b) shall be deemed to be references to "$90,000,000";
(f) item (2) of the definition of "CANADIAN BORROWING BASE" shall be deemed
to read "the lesser of (i) 65% of the Canadian Borrowers' Eligible
Inventory (up to a maximum amount of 100% of the appraised net recovery
value of such Eligible Inventory), or (ii) the Canadian Inventory
Limit, minus"; and
(g) item (2) of the definition of "US BORROWING BASE" shall be deemed to
read "the lesser of (i) 65% of such US Operating Borrower's Eligible
Inventory (up to a maximum amount of 100% of the appraised net recovery
value of such Eligible Inventory), or (ii) the US Inventory Limit,
plus".
In addition, and notwithstanding any other provision of this Agreement, for the
period commencing on the Closing Date and ending on the date which is nine (9)
months following the Closing Date, the Applicable Margin for LIBOR Loans and for
B/A Loans shall be 2.75%, the Applicable Margin for ABR Loans shall be 0.50%,
the Applicable Margin for Canadian Prime Rate Loans shall be 1.00% and the
Applicable Margin for commitment fees payable pursuant to Section 2.13(a) and
(b) shall be 0.50%.
SECTION 2.31 FINANCING STRUCTURE AVAILABILITY. Notwithstanding any other
provision of this Agreement, but subject to the proviso after Section 2.31(k)
below:
(a) neither GUSAP nor PASUG shall have any right to issue any Borrowing
Requests in respect of US Revolving Credit Loans or US Swingline Loans,
and all Borrowing Requests in respect of US Revolving Credit Loans or
US Swingline Loans shall be made solely by one or more US Operating
Borrowers (but otherwise in compliance with Section 2.2(a) and Section
2.2(b) regarding the requirements related to the issuance of Borrowing
Requests and the limitations thereon);
(b) each Borrowing of US Revolving Credit Loans shall be made available
directly to the US Operating Borrower to which such US Revolving Credit
Loans relate and shall be
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disbursed directly to such US Operating Borrower by depositing the
amount of each Borrowing directly to the Disbursement Account of such
US Operating Borrower;
(c) all Borrowings of US Swingline Loans shall be made available either
directly to the US Operating Borrower to which such US Swingline Loans
relate and shall be disbursed directly to the applicable US Operating
Borrower by depositing the amount of each Borrowing directly to the
Disbursement Account of the applicable US Operating Borrower, or shall
be disbursed to the Ameristeel US Operating Account;
(d) each reference to "PASUG" in the definition of "Permitted Cash
Application" shall be deemed to be a reference to Ameristeel US;
(e) all references in this Agreement to "PASUG Operating Account" and
"PASUG Payment Account" shall be deemed to be references to the
Ameristeel U.S. Operating Account and the Ameristeel U.S. Payment
Account, respectively; and in respect of all US Swingline Loans
deposited into the Ameristeel US Operating Account relating to any US
Operating Borrower other than Ameristeel US, Ameristeel US agrees to
make a Permitted Cash Application to or for the benefit of such
Applicable US Operating Borrower;
(f) all payments to be made by any US Borrower under this Agreement or any
other Financing Document (whether in the nature of interest, principal,
fees or otherwise) to the Administrative Agent, the Canadian
Administrative Agent or the Lenders shall be made by the applicable US
Operating Borrower directly to the Administrative Agent, or shall be
made by Ameristeel US out of amounts on deposit in the Ameristeel US
Operating Account if permitted under Section 7.2(i), with the amounts
on deposit therein being applied in accordance with Section 2.11(f) or
Section 2.11(h), as applicable, at the end of each Business Day;
(g) the definition of "US OPERATING BORROWER ADVANCE" is deemed amended to
delete clause (b) therefrom;
(h) the definition of "US OPERATING BORROWER ADVANCE NET AMOUNT" is deemed
amended (i) by removing the reference to PASUG in paragraph (a)
thereof, (ii) by removing clause (b) thereof, and (iii) by adding to
the end of paragraph (c) thereof a new sentence, to read as follows:
"For Ameristeel US only, the amounts on deposit in the
Ameristeel US Operating Account shall be excluded from the
determination of the US Operating Borrower Advance Net Amount
for such US Operating Borrower."
(i) all amounts collected in the US Lockboxes and transferred to the US
Blocked Account shall in turn be transferred to the Ameristeel US
Operating Account. In addition, the proceeds of US Swingline Loans made
in respect of any US Operating Borrower other than Ameristeel US may be
deposited into the Ameristeel US Operating Account, so long as
Ameristeel makes a Permitted Cash Application out of such proceeds.
However, if the amounts on deposit in the Ameristeel US Operating
Account, other than (A) amounts
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arising out of the collection of accounts owing to Ameristeel US, and
(B) amounts arising out of the proceeds of any US Loans made to
Ameristeel US based upon the Borrowing Base of Ameristeel US, at any
time exceed $3,000,000, Ameristeel shall promptly either transfer such
excess amounts to US Operating Borrower(s) to which such excess amounts
relate, or prepay US Swingline Loans or US Revolving Credit Loans owing
by US Operating Borrower(s) to which such excess amounts relate;
(j) the Administrative Agent or the Required Lenders may establish such
other procedures as shall determine, acting reasonably, to ensure the
proper administration of US Revolving Credit Loans and US Swingline
Loans; and
(k) the certifications and other confirmations contemplated by Section
2.21(e)(ii) shall not be required from any US Lender,
provided, however, that upon five (5) Business Days written notice by the US
Borrowers to the Administrative Agent and the Canadian Administrative Agent and
if at that time: (i) Excess Availability is greater than $110,000,000 on such
Business Day, and has been greater than $110,000,000 for a period of at least 90
consecutive days ending on such Business Day; (ii) the US Borrowers deliver
projections satisfactory to the Administrative Agent and the Canadian
Administrative Agent, acting reasonably, demonstrating that Excess Availability
shall continue to be at least $110,000,000 for the 3 consecutive month period
commencing on such Business Day; (iii) the 65% Advance Rate Period has expired
on or prior to such Business Day; and (iv) no Default has occurred and is
continuing on such Business Day, then this Section 2.31 shall immediately cease
to be of any force or effect. Any calculation of Excess Availability for
purposes of this Section 2.31 shall be made without reference to Section 2.30.
If this Section 2.31 shall cease to be of any force or effect in accordance with
the foregoing provisions, and if at such time any US Lender would be unable to
provide the certification contemplated by Section 2.21(e)(ii), then such US
Lender will forthwith assign its US Lender Indebtedness and its US Revolving
Credit Commitments to a Person (which may be an Affiliate of such US Lender)
which is able, at such time, to provide the certification contemplated by
Section 2.21(e)(ii). The requirements of paragraphs (1) through (5) in the
proviso in Section 10.7(b) shall not apply to any such assignment.
Notwithstanding the provisions contained in this Section 2.31, the Borrowers
hereby agree that they shall, and shall cause the other Credit Parties to,
comply with all provisions contained in this Agreement relating to GUSAP, NSULC
and PASUG.
ARTICLE 3
CONDITIONS TO BORROWINGS
SECTION 3.1 CLOSING. The obligation of each Lender to make Loans and each
Issuing Bank to issue Letters of Credit hereunder is subject to (x) receipt by
the Administrative Agent or the Canadian Administrative Agent, as applicable, of
the following items which are to be delivered, in form and substance
satisfactory to each Lender, with a copy (except for the Notes) for each Lender,
and (y) the satisfaction of the following conditions prior to or simultaneously
with the making of the initial Loan and the issuance of such initial Letter of
Credit hereunder as evidenced by the execution and delivery of the Certificate
of Effectiveness:
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(a) CREDIT AGREEMENT. Either (i) a counterpart of this Agreement signed on
behalf of each party hereto, or (ii) written evidence satisfactory to
the Administrative Agent and the Canadian Administrative Agent (which
may include facsimile transmission of a signed signature page of this
Agreement) that each such party has signed a counterpart of this
Agreement.
(b) US REVOLVING CREDIT NOTES. A duly completed and executed US Revolving
Credit Note for each US Revolving Lender requesting same, dated as of
the Closing Date, and payable to the order of such US Revolving Lender.
(c) CANADIAN REVOLVING CREDIT NOTES. A duly completed and executed Canadian
Revolving Credit Note (C$) and a duly completed and executed Canadian
Revolving Credit Note (US$) for each Canadian Revolving Lender
requesting same, dated as of the Closing Date, and payable to the order
of such Canadian Revolving Lender.
(d) US SWINGLINE NOTE. A duly completed and executed US Swingline Note
dated as of the Closing Date and payable to the order of the US
Swingline Lender.
(e) CANADIAN SWINGLINE NOTE. A duly completed and executed Canadian
Swingline Note (C$) and a duly completed and executed Canadian
Swingline Note (US$) dated as of the Closing Date and payable to the
order of the Canadian Swingline Lender.
(f) RESOLUTIONS AND INCUMBENCY CERTIFICATES.
(1) certified copies of the resolutions of the Board of Directors
of each Credit Party dated as of the Closing Date and
approving, as appropriate, the Loans, the Notes, this
Agreement and the other Financing Documents, and all other
documents, if any, to which each Credit Party is a party and
evidencing corporate authorization with respect to such
documents;
(2) a certificate of the Secretary or an Assistant Secretary of
each Credit Party dated as of the Closing Date and certifying
(A) the name, title and true signature of each officer of such
Person authorized to execute the Notes, this Agreement,
Applications and the other Financing Documents to which it is
a party, (B) the name, title and true signature of each
officer of such Person authorized to provide the
certifications required pursuant to this Agreement including,
but not limited to, certifications required pursuant to
Section 6.10, Borrowing Requests, and Borrowing Base Reports,
and (C) that attached thereto is a true and complete copy of
the certificate of incorporation, certificate of organization,
certificate of formation or certificate of limited
partnership, as applicable, certified by the appropriate
Governmental Authority of the jurisdiction of incorporation or
organization of each Credit Party and the bylaws, limited
partnership agreement, operating agreement or limited
liability company agreement, as applicable, of each Credit
Party, each as amended to date, recent good standing
certificates and/or certificates of existence for each Credit
Party and certificates of foreign
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qualification for each Credit Party in such jurisdictions as
the Administrative Agent shall require; and
(3) certain letter agreements certifying to the names and
signatures of officers of the Borrowers authorized to issue
Borrowing Requests, issue Borrowing Base Reports, initiate
wire transfers and take other actions with respect to the
credit facilities contemplated hereby.
(g) OPINIONS OF COUNSEL.
(1) An opinion of Torys LLP, US counsel to the US Credit Parties
dated as of the Closing Date addressed to the Administrative
Agent, the Canadian Administrative Agent, the Issuing Banks
and the Lenders and covering such matters as the
Administrative Agent, the Issuing Banks or the Lenders may
reasonably request;
(2) An opinion of Torys LLP, Canadian counsel to the Credit
Parties dated as of the Closing Date addressed to the
Administrative Agent, the Canadian Administrative Agent, the
Issuing Banks and the Lenders and covering such matters as the
Administrative Agent, the Canadian Administrative Agent, the
Issuing Banks or the Lenders may reasonably request; and
(3) Opinions of counsel to the Canadian Credit Parties and the US
Credit Parties, respectively, in each jurisdiction in which
inventory comprising part of the Collateral is located, dated
as of the Closing Date, addressed to the Administrative Agent,
the Canadian Administrative Agent, the Issuing Banks and the
Lenders and covering such matters as the Administrative Agent,
the Canadian Administrative Agent, the Issuing Banks or the
Lenders may reasonably request.
(h) SECURITY INSTRUMENTS.
(1) duly executed copies of the Security Agreements, the
Guarantees, the Securities Pledge Agreements and such other
Security Instruments as may be necessary to create, preserve,
perfect and protect the Liens of the Administrative Agent and
the Canadian Administrative Agent in the Collateral in all
jurisdictions designated by the Administrative Agent or the
Canadian Administrative Agent, as applicable;
(2) the original stock certificates listed in Schedule 3.1(h) and
duly executed corresponding stock powers to perfect the
Administrative Agent's and the Canadian Administrative Agent's
Liens in the equity securities represented by such stock
certificates; and
(3) all Property in which the Administrative Agent or the Canadian
Administrative Agent shall, at such time, be entitled to have
a Lien pursuant to this Agreement or any other Financing
Document (including, without limitation, all promissory notes
which evidence any intercompany advances permitted to be made
by the Credit Parties hereunder) shall have been physically
delivered to the possession of
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the Administrative Agent or the Canadian Administrative Agent
to the extent that such possession is necessary or desirable
for the purpose of perfecting, or ensuring priority of, the
Administrative Agent's or the Canadian Administrative Agent's
Liens in such Collateral.
(i) REGULATORY APPROVAL; CONSENTS; WAIVERS. The Administrative Agent and
the Canadian Administrative Agent shall be satisfied that all material
authorizations required in connection with the Transactions
contemplated hereby have been obtained and are in full force and effect
(including all approvals listed in Schedule 3.1(i)), and that all
consents and waivers required to consummate the Transactions have been
obtained, to the extent that consummation of the Transactions would
otherwise be restricted or prohibited under the terms of any material
contract to which any Credit Party is a party, or by which it is bound,
in each case without the imposition of any burdensome provisions.
(j) INDEBTEDNESS. The transactions contemplated in this Agreement and the
other Financing Documents shall not have caused any event or condition
to occur which has resulted, or which will result, in any material
Indebtedness becoming due prior to its scheduled maturity or that
permits (with or without the giving of notice, the lapse of time, or
both) 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, or which will
result in the creation of any Liens under any Indebtedness.
(k) CONSUMMATION OF THE 144A TRANSACTIONS. The Administrative Agent, the
Canadian Administrative Agent and the Lenders shall be satisfied that
the structure, terms and conditions of the 144A Indenture conform to
the structure, terms and conditions of the 144A Transaction as set out
in the offering memorandum related thereto (including as to pricing,
term, no Liens and Permitted Indebtedness) and the 144A Transaction
shall be completed simultaneously with the completion of the
transactions contemplated by this Agreement, and the Chief Financial
Officer of the Company shall have provided a certificate to the
Administrative Agent and the Canadian Administrative Agent confirming
completion of such transaction (including the advance of funds
thereunder).
(l) INSURANCE. The Administrative Agent and the Canadian Administrative
Agent shall have received a certificate of insurance coverage, dated
not more than 30 days prior to the Closing Date, evidencing that the
Credit Parties are carrying insurance in accordance with Section 6.5
hereof, along with the loss payable endorsements contemplated by
Section 6.5.
(m) FINANCIAL STATEMENTS AND PROJECTIONS. The Financial Statements and the
other financial information and Projections of the Borrowers shall not
be changed as of the Closing Date in such a way as to cause or result
in a Material Adverse Effect.
(n) BORROWING BASE REPORT. A Borrowing Base Report prepared as of the
Closing Date and setting forth the US Borrowing Base for each US
Borrower and the Canadian Borrowing Base to be in effect under this
Agreement on the Closing Date and, after giving effect to
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the consummation of the transactions contemplated herein, and the
initial Loans hereunder, the Excess Availability shall not be less than
$87,500,000. For these purposes, all Existing Indebtedness not
permitted to remain outstanding under Section 7.2 must be repaid, all
debts and obligations shall be current, and all accounts payable shall
be handled in the normal course of the Borrowers' business consistent
with their past practices.
(o) CERTIFICATES OF CHIEF FINANCIAL OFFICER; PERFECTION CERTIFICATE. (i) A
certificate of the Chief Financial Officer of the Company dated as of
the Closing Date and certifying, before and after the making of the
initial Loans and the issuance of the initial Letters of Credit, that
(1) each Borrower and each Credit Party is Solvent, (2) no Default
then, or thereafter would, exist, (3) each of the conditions to Closing
have been satisfied, and (4) each representation and warranty of the
Borrowers contained herein and in the other Financing Documents is true
and correct in all material respects, (ii) a certificate of the Chief
Financial Officer of the Company certifying that the Company and each
of its Subsidiaries are in compliance with the minimum funding
requirements with respect to each Plan maintained by the Company and/or
its Subsidiaries, or to which the Company or any of its Subsidiaries is
a member, and that the Company and its Subsidiaries are in compliance
in all respect with Section 7.9 of this Agreement, and (iii) a
Perfection Certificate for each of the Credit Parties dated as of the
Closing Date.
(p) CORPORATE STRUCTURE. Each Lender shall be satisfied in its sole
judgment with the corporate, capital, legal and management structure
and Tax liabilities of each Borrower and the flow of funds among the
Borrowers and the other Credit Parties.
(q) NO MATERIAL ADVERSE EFFECT. The Administrative Agent, the Canadian
Administrative Agent and the Lenders shall be satisfied that since
December 31, 2002, there has been no event, condition or occurrence
that is not disclosed to the Lenders in this Agreement and that has had
or could reasonably be expected to have a Material Adverse Effect.
(r) DUE DILIGENCE. The Administrative Agent and the Canadian Administrative
Agent and the Lenders shall be satisfied with the results of their
legal, financial and business due diligence including, without
limitation (i) examinations of the books and records of the Borrowers,
(ii) a review of the Collateral, and (iii) a review of the Borrowers'
inventory control systems.
(s) FEES AND EXPENSES. Payment and/or reimbursement of (1) the
Administrative Agent's, the Canadian Administrative Agent's, and each
of the Arrangers' respective counsel's reasonable fees and expenses
(limited to one U.S. outside counsel and one Canadian outside counsel)
incurred through the Closing Date, to the extent invoiced, and (2) any
fees or expenses required to be paid pursuant to the Canadian Fee
Letter and the US Fee Letter or this Agreement.
(t) DOCUMENTATION. (i) Each Financing Document and all other documents
required hereunder and (ii) all other documents, instruments and
agreements as may be required by the Administrative Agent or the
Canadian Administrative Agent, acting reasonably,
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shall have been duly authorized, executed and delivered by each of the
parties thereto, all in form and substance satisfactory to the
Administrative Agent, acting reasonably, and all of the Security
Instruments shall have been registered in all offices in which, in the
opinion of the Administrative Agent or its counsel, registration is
necessary or of advantage to preserve the priority of the Liens
intended to be created thereby, and duplicate copies of such Security
Instruments bearing or accompanied by appropriate endorsements or
certificates of registration shall have been delivered to the
Administrative Agent. The Administrative Agent shall have received and
be satisfied with the results of all personal property, pending
litigation, judgment, bankruptcy, bulk sale, tax, execution and other
searches with respect to the Credit Parties in all jurisdictions
selected by the Administrative Agent and its counsel.
(u) REPAYMENT OF INDEBTEDNESS. All Existing Indebtedness of the Credit
Parties other than the Indebtedness listed in Schedule 5.26 shall have
been paid in full and all Liens securing payment of such Indebtedness
shall have been cancelled or released or provision therefor
satisfactory to the Administrative Agent and the Canadian
Administrative Agent shall have been made.
(v) BLOCKED ACCOUNTS; CONTROL AGREEMENTS. Blocked Accounts and other
appropriate account arrangements shall have been established for each
of GUSAP, NSULC and PASUG and in respect of each bank account
maintained by a Credit Party in the United States or Canada, the
Administrative Agent or the Canadian Administrative Agent, as
applicable, the applicable Credit Party and the applicable depository
bank shall have entered into a control agreement (sufficient to perfect
the Liens of the Administrative Agent in such bank account, and
otherwise in the standard form of such depository bank or in such other
form as the Administrative Agent or the Canadian Administrative Agent,
as applicable, acting reasonably, may agree) in respect of such bank
account.
(w) CASH MANAGEMENT ARRANGEMENTS. The Administrative Agent and the Canadian
Administrative Agent shall be satisfied in their sole discretion with
all material aspects of the Borrowers' actual and agreed upon cash
management arrangements.
(x) PERMITTED REORGANIZATION. The Lenders shall be satisfied in their sole
discretion with the Permitted Reorganization.
(y) SCHEDULES. The Lenders shall be satisfied in their sole discretion with
all Schedules attached (or to be attached) to this Agreement, it being
recognized that, as at the date of execution of this Agreement, the
Lenders have not had an adequate opportunity to review Schedules.
Upon satisfaction of each of the conditions set forth in Section 3.1, the
Borrowers, the Administrative Agent and the Canadian Administrative Agent shall
execute the Certificate of Effectiveness.
SECTION 3.2 CONDITIONS PRECEDENT TO ALL LOANS AND LETTERS OF CREDIT. The
obligation of each Lender to make each Loan hereunder (including the initial
Loan) and the obligation of each
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Issuing Bank to issue each Letter of Credit (including the initial Letter of
Credit) is subject to fulfillment of the following conditions immediately prior
to or contemporaneously with each such Loan or issuance (provided, however, that
the following conditions are not conditions to each Revolving Lender
participating in or reimbursing either of the Agents for such Revolving Lenders
US Revolving Credit Percentage or Canadian Revolving Credit Percentage, as
applicable, of any Agent Advance made in accordance with Section 2.28 hereof):
(a) REPRESENTATIONS AND WARRANTIES. All representations and warranties
contained herein and in the other Financing Documents executed and
delivered on or after the Closing Date shall be true and correct in all
respects with the same effect as though such representations and
warranties had been made on and as of the date of such Loan (unless
such representation and warranty is expressly limited to an earlier
date).
(b) NO DEFAULT. There shall not exist a Default or Event of Default
hereunder.
(c) MAXIMUM AVAILABLE AMOUNT. The Aggregate US Revolving Credit Exposure
and the Aggregate Canadian Revolving Credit Exposure, after giving
effect to such proposed Loan or Letter of Credit, shall not exceed the
US Maximum Available Amount and Canadian Maximum Available Amount,
respectively, then in effect.
(d) BORROWING REQUESTS. The applicable Borrowers shall have provided
Advance Notice of the requested Borrowing by completion, execution and
delivery of a Borrowing Request.
ARTICLE 4
SECURITY
SECTION 4.1 SECURITY GRANTED BY US CREDIT PARTIES. The Lender Indebtedness shall
be secured by perfected, first priority Liens in and encumbering the following
property and assets of each US Credit Party, in each case whether now owned or
hereafter acquired and wherever located: (a) all accounts (including, without
limitation, inter-company loans), (b) all inventory (including "rolls
inventory") and other goods held for sale or lease, (c) all chattel paper,
documents of title (but excluding documents of title in respect of assets which
do not constitute inventory) and instruments, (d) all general intangibles
(including, without limitation, intellectual property rights), (e) all bank
accounts (including, without limitation, collateral proceeds accounts and
investment accounts), (f) all books and records, and (g) all capital stock in
its Subsidiaries. In furtherance of the foregoing, the US Borrowers shall
execute and deliver, and shall cause each of the other US Credit Parties to
execute and deliver, the US Guaranty, the US Security Agreement and the US
Securities Pledge Agreement and shall hereafter execute and deliver (and cause
each other US Credit Party and any other appropriate Person to execute and
deliver) to the Administrative Agent, promptly upon request by the
Administrative Agent, such Security Instruments and other documents,
instruments, agreements and certificates, as the Administrative Agent, acting
reasonably, shall determine to be necessary or appropriate to create, evidence,
perfect, ensure the priority of and protect the Liens contemplated by this
Section 4.1.
SECTION 4.2 SECURITY GRANTED BY CANADIAN CREDIT PARTIES. The Lender Indebtedness
shall be secured by perfected, first priority Liens in and encumbering the
following property and
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assets of each Canadian Credit Party, in each case whether now owned or
hereafter acquired and wherever located: (a) all accounts receivable (including,
without limitation, inter-company loans), (b) all inventory (including "rolls
inventory") and other goods, (c) all chattel paper, documents of title (but
excluding documents of title in respect of assets which do not constitute
inventory) and instruments, (d) all intangibles (including, without limitation,
intellectual property rights), (e) all bank accounts (including, without
limitation, collateral proceeds accounts and investment accounts), (f) all books
and records, and (g) all capital stock in its Subsidiaries. In furtherance of
the foregoing, the Canadian Borrowers shall execute and deliver (and shall cause
each of the other Canadian Credit Parties to execute and deliver) the Canadian
Guarantee, the Canadian Security Agreement and the Canadian Securities Pledge
Agreement and shall hereafter execute and deliver (cause each other Canadian
Credit Party and any other appropriate Person to execute and deliver) to the
Canadian Administrative Agent, promptly upon request by the Canadian
Administrative Agent, such Security Instruments and other documents,
instruments, agreements and certificates, as the Canadian Administrative Agent,
acting reasonably, shall determine to be necessary or appropriate to create,
evidence, perfect, ensure the priority of and protect the Liens contemplated by
this Section 4.2.
SECTION 4.3 ESTABLISHMENT OF US LOCKBOX. On or prior to the date hereof, the US
Borrowers shall establish a US Lockbox to be operated by the US Lockbox Bank and
within 90 days after the Closing Date the US Borrowers shall have entered into a
Lockbox Agreement with the Administrative Agent and the US Lockbox Bank. At all
times from and after the date hereof, each US Credit Party shall direct all
account debtors with respect to such US Credit Party's accounts and all other
Persons obligated to make payments of any type to any US Credit Party to direct
such payments to the US Lockbox. All invoices issued by any US Credit Party
after the date hereof shall contain a notation requiring the accounts evidenced
by such invoice to be paid to the US Lockbox. Subject to Section 4.5, the US
Lockbox Bank, for the benefit of the US Borrowers, shall have sole and exclusive
access to the US Lockbox. All monies, checks and other drafts received in the US
Lockbox shall be endorsed in accordance with the Lockbox Agreement and deposited
by the US Lockbox Bank each Business Day in the US Blocked Account.
SECTION 4.4 ESTABLISHMENT OF CANADIAN LOCKBOX. Within 90 days after the Closing
Date, the Canadian Borrowers shall enter into a Lockbox Agreement with the
Canadian Administrative Agent and the Canadian Lockbox Bank pursuant to which
each Canadian Credit Party shall establish a Canadian Lockbox to be operated by
the Canadian Lockbox Bank. At all times from and after the effective date of the
Canadian Lockbox Agreement (which effective date shall not be later than 90 days
after the Closing Date) (the "CANADIAN LOCKBOX EFFECTIVE DATE"), each Canadian
Credit Party shall direct all account debtors with respect to such Canadian
Credit Party's accounts and all other Persons obligated to make payments of any
type to any Canadian Credit Party to direct such payments to the Canadian
Lockbox. All invoices issued by any Canadian Credit Party after the Canadian
Lockbox Effective Date shall contain a notation requiring the accounts evidenced
by such invoice to be paid to the Canadian Lockbox. Subject to Section 4.6, the
Canadian Lockbox Bank, for the benefit of the US Borrowers, shall have sole and
exclusive access to the Canadian Lockbox. All monies, checks and other drafts
received in
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the Canadian Lockbox shall be endorsed in accordance with the Lockbox Agreement
and deposited by Canadian Lockbox Bank each Business Day in the Canadian Blocked
Account.
SECTION 4.5 ESTABLISHMENT OF US BLOCKED ACCOUNT; DOMINION AND CONTROL; OPERATION
OF US BLOCKED ACCOUNT AND PASUG OPERATING ACCOUNT.
(a) So long as this Agreement is in effect, the US Borrowers acknowledge
and agree that all funds received by any US Credit Party from any
source, have been and shall continue to be deposited in the US Blocked
Account not later than one Business Day following the date of receipt.
Such deposit shall be made in the exact form received subject only to
any necessary endorsements. The US Borrowers hereby acknowledge and
agree (i) that each US Credit Party has granted a Lien on and pledged
to Administrative Agent as additional collateral security for the US
Lender Indebtedness, the US Blocked Account and all funds on deposit
therein and "control" has been established with respect to such US
Blocked Account as defined in Section 9-104 of the UCC, and (ii) no US
Credit Party may unilaterally terminate the US Blocked Account.
(b) Except as otherwise provided in this Agreement, the US Borrowers shall
have exclusive power and authority to withdraw funds from time to time
on deposit in the US Blocked Account and to otherwise exercise dominion
and control over the US Blocked Account and the funds on deposit
therein. Upon the occurrence of a Block Event, then immediately upon
written notice from the Administrative Agent (i) all power and
authority of withdrawal of funds from the US Blocked Account of the US
Borrowers or any other Credit Party shall cease and (ii) the US Blocked
Account and all funds on deposit therein shall be subject to the
absolute dominion and control of the Administrative Agent. Upon five
(5) Business Days written notice by the US Operating Borrowers,
dominion and control of the US Blocked Account and the power of
withdrawal of funds on deposit therein shall revert to the US Borrowers
if, at the time of such written notice, (i) Excess Availability is
greater than $70,000,000 on such Business Day, and has been greater
than $70,000,000 for a period of at least 90 consecutive days ending on
such Business Day, (ii) the US Borrowers deliver projections
satisfactory to the Administrative Agent, acting reasonably,
demonstrating that Excess Availability shall continue to be at least
$70,000,000 for the 3 consecutive month period commencing on such
Business Day, and (iii) no other Default has occurred and is continuing
on such Business Day.
(c) Each of the US Borrowers and the Administrative Agent agree that the US
Blocked Account is a "deposit account" within the meaning of
9-102(a)(29) of the UCC and that for purposes of Section 9-304 of this
UCC, the State of New York shall be the jurisdiction of the
Administrative Agent. The parties hereby further agree that,
notwithstanding anything to the contrary contained herein, each US
Blocked Account shall be subject to "control" sufficient to enable the
Administrative Agent to have a perfected, first priority Lien in such
US Blocked Account, as and to the extent required by the UCC.
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(d) At all times the US Borrowers shall ensure that the US Blocked Account
and the PASUG Operating Account are operated in such a manner as to
permit the Administrative Agent or any other Person from time to time
to identify which deposits thereto and amounts on deposit therein are
attributable to the applicable US Operating Borrower for its account
and shall provide evidence of such attribution to the Administrative
Agent promptly upon request.
SECTION 4.6 ESTABLISHMENT OF CANADIAN BLOCKED ACCOUNT; DOMINION AND CONTROL.
(a) So long as this Agreement is in effect, the Canadian Borrower
acknowledges and agrees that all funds received by any Canadian Credit
Party from any source (including without limitation items of payment
and other amounts deposited in the Canadian Lockbox) have been and
shall continue to be deposited in the Canadian Blocked Account not
later than one Business Day following the date of receipt. The Canadian
Borrower hereby acknowledges and agrees that (i) each Canadian Credit
Party has granted a Lien on and pledged to Canadian Administrative
Agent as additional collateral security for the Canadian Lender
Indebtedness, in the Canadian Blocked Account and all funds on deposit
therein, and (ii) no Canadian Credit Party may unilaterally terminate
the Canadian Blocked Account.
(b) Except as otherwise provided in this Agreement, the Canadian Borrowers
shall have exclusive power and authority to withdraw funds from time to
time on deposit in the Canadian Blocked Account and to otherwise
exercise dominion and control over the Canadian Blocked Account and the
funds on deposit therein. Upon the occurrence of a Block Event, then
(i) all power and authority of withdrawal of funds from the Canadian
Blocked Account of the Canadian Borrowers or any other Credit Party
shall cease and (ii) the Canadian Blocked Account and all funds on
deposit therein shall be subject to the absolute dominion and control
of the Canadian Administrative Agent. Upon five (5) Business Days
written notice by the Canadian Borrowers, dominion and control of the
Canadian Blocked Account and the power of withdrawal of funds on
deposit therein shall revert to the Canadian Borrowers if, at the time
of such written notice, (i) Excess Availability is greater than
$70,000,000 on such Business Day, and has been greater than $70,000,000
for a period of at least 90 consecutive days ending on such Business
Day, (ii) the Canadian Borrowers deliver projections satisfactory to
the Canadian Administrative Agent, acting reasonably, demonstrating
that Excess Availability shall continue to be at least $70,000,000 for
the 3 consecutive month period commencing on such Business Day, and
(iii) no other Default has occurred and is continuing on such Business
Day.
ARTICLE 5
REPRESENTATIONS AND WARRANTIES
In order to induce the Agents and the Lenders to enter into
this Agreement, each Borrower hereby represents and warrants to each Agent and
each Lender that each statement set forth in this Article 5 is true and correct
on the date hereof (other than representations and warranties that, by their
terms, refer to a specific date, in which case as of such specific date) and
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will be true and correct on the date each Borrowing and each Letter of Credit is
requested hereunder and on the date each Borrowing is disbursed and each Letter
of Credit is issued hereunder. Except to the extent expressly provided otherwise
herein, to the extent such representations and warranties are made prior to the
consummation of the 144A Transaction, such representations and warranties shall
be deemed to be made as if the 144A Transaction had occurred immediately prior
to giving effect thereto. Each such representation and warranty shall survive
the execution and delivery of this Agreement and any Borrowing or issuance of
any Letter of Credit hereunder and shall not be qualified or limited by any
investigation undertaken by any Agent or any Lender or any actual or
constructive knowledge any Agent or any Lender may have or be charged with
indicating that any such representation or warranty is inaccurate or incomplete
in any respect.
SECTION 5.1 CORPORATE EXISTENCE. Each Credit Party is duly organized, validly
existing and in good standing under the laws of the jurisdictions in which it is
organized and is duly licensed or qualified to transact business and in good
standing in all jurisdictions wherein the Property owned or the business
transacted by it makes such qualification necessary, except where the failure to
be so licensed or qualified could not reasonably be expected to have a Material
Adverse Effect.
SECTION 5.2 CORPORATE POWER AND AUTHORIZATION. Each Borrower is authorized and
empowered to create and issue the Notes; each Credit Party is duly authorized
and empowered to execute, deliver and perform the Financing Documents, including
this Agreement, to which it is a party; and all corporate, partnership or other
action on any Credit Party's part requisite for the due creation and issuance of
the Notes and for the due execution, delivery and performance of the Financing
Documents, including this Agreement, to which the Credit Parties (or any of
them) are parties has been duly and effectively taken.
SECTION 5.3 BINDING OBLIGATIONS. This Agreement does, and the Notes and other
Financing Documents to which any Credit Party is a party will, when issued and
delivered under this Agreement, constitute legal, valid and binding obligations
of each Credit Party that is a party thereto, and will be enforceable against
such Credit Party in accordance with their respective terms (except that
enforcement may be subject to any applicable bankruptcy, insolvency,
reorganization, moratorium or similar laws generally affecting the enforcement
of creditors' rights and subject to the availability of equitable remedies).
SECTION 5.4 NO LEGAL BAR OR RESULTANT LIEN. The execution, delivery and
performance of the Notes and the other Financing Documents, including this
Agreement, to which the Credit Parties (or any of them) are parties do not
violate or create a default under any provisions of the articles or certificate
of incorporation, bylaws, partnership agreement or other organizational
documents of any Credit Party, or any material contract, agreement, instrument
or Governmental Requirement to which any Credit Party is subject, or result in
the creation or imposition of any Lien upon any Properties of any Credit Party.
SECTION 5.5 NO CONSENT. Each Credit Party's execution, delivery and performance
of the Notes and the other Financing Documents, including this Agreement, to
which such Credit Party (or any of them) is a party, and the consummation of the
Transactions contemplated herein do
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not require notice to or filing or registration with, or the authorization,
consent or approval of or other action by any other Person, including, but not
limited to, any Governmental Authority.
SECTION 5.6 FINANCIAL INFORMATION.
(a) FINANCIAL STATEMENTS. The Financial Statements and the Current
Information were prepared in accordance with GAAP (subject, in the case
of unaudited statements, to normal year-end adjustments and the absence
of footnotes) and fairly present in all material respects the
consolidated and consolidating financial condition and results of
operations of the Company and its Subsidiaries as of the dates and for
the periods reflected therein.
(b) PROJECTIONS. The Projections set forth the Company's good faith
estimate as of the date hereof of the Company's and its Subsidiaries'
consolidated and consolidating financial condition and results of
operations as of the dates and for the periods covered thereby. The
Projections were prepared in good faith on the basis of the assumptions
stated therein, which assumptions were believed by management of the
Company to be reasonable at the time made and which the Company
continues to believe are reasonable on the date hereof.
(c) NO MATERIAL ADVERSE EFFECT. Since December 31, 2002, there has been no
event, condition or occurrence that has had or could reasonably be
expected to have a Material Adverse Effect.
SECTION 5.7 LITIGATION. Except as set forth in Schedule 5.7, there is no action,
suit, claim, grievance or proceeding, or any governmental investigation or any
arbitration proceeding, in each case pending (including any unsatisfied
settlement, judgment decree or order) or, to the knowledge of any Borrower,
threatened against any Credit Party or any Property of any Credit Party before
any court or arbitrator or any Governmental Authority, or pursuant to any
collective bargaining agreement, which (a) challenges the validity of this
Agreement, any Note, any Application, any Security Instrument or any of the
other Financing Documents or (b) could reasonably be expected to have a Material
Adverse Effect.
SECTION 5.8 USE OF PROCEEDS; DISTRIBUTION OF PROCEEDS. The Canadian Borrowers
will use the proceeds of the Canadian Loans only to refinance certain existing
indebtedness of the Canadian Borrowers, to support working capital requirements
of the Canadian Borrowers and for other general corporate purposes. Subject to
Section 2.2(c) and 2.4(b), GUSAP will use all proceeds of all US Revolving Loans
to acquire Equity of NSULC or to make a capital contribution to NSULC (each, a
"NSULC EQUITY INJECTION"), following which (i) the proceeds of any NSULC Equity
Injection shall be used by NSULC solely to acquire Equity of PASUG or to make a
capital contribution to PASUG (each, a "PASUG EQUITY INJECTION") and (ii) the
proceeds of any PASUG Equity Injection shall be used by PASUG solely to fund
inter-company advances to the US Operating Borrowers, which inter-company
advances shall be evidenced by promissory notes which have been pledged and
delivered to the Administrative Agent pursuant to the Security Documents, and
allocated amongst the US Operating Borrowers, as applicable, in the same amounts
as were allocated by GUSAP on the applicable Borrowing Request prepared in
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accordance with Section 2.2(a). Each US Operating Borrower shall use the
proceeds of such inter-company advances to support its own working capital
requirements, for US Operating Borrower Advances to the extent permitted
hereunder, and for other general corporate purposes of such US Operating
Borrower. Subject to Section 2.2(c), PASUG will use all proceeds of all US
Swingline Loans solely for Permitted Cash Applications to or for the benefit of
the Applicable US Operating Borrowers, who in turn will use such proceeds solely
for the purposes set out in the preceding sentence of this Section 5.8. In the
event that Loans are made directly by the Lenders to any US Operating Borrower
hereunder, such US Operating Borrower shall use the proceeds thereof solely to
support its own working capital requirements, for US Operating Borrower Advances
to the extent permitted hereunder, and for other general corporate purposes of
such US Operating Borrower. The Letters of Credit will be used only for the
purposes provided in Section 2.3.
SECTION 5.9 US EMPLOYEE BENEFITS.
(a) Each US Credit Party and each ERISA Affiliate have complied in all
material respects with all applicable laws regarding each Plan. Each
Plan is, and has been, maintained and administered in substantial
compliance with its terms, applicable collective bargaining agreements,
and all applicable laws. No act, omission or transaction has occurred
which could result in an imposition on any US Credit Party or any ERISA
Affiliate (whether directly or indirectly) of (A) either a civil
penalty assessed pursuant to Subsections (c), (i) or (l) of Section 502
of ERISA or a tax imposed pursuant to Chapter 43 of Subtitle D of the
Code or (B) breach of fiduciary duty liability damages under Section
409 of ERISA which, in any case, could reasonably be expected to have a
Material Adverse Effect.
(b) There exists no outstanding material liability of any US Credit Party
or any ERISA Affiliate with respect to any Plan that has been
terminated. No material liability to the PBGC (other than for the
payment of current premiums which are not past due) by any US Credit
Party or any ERISA Affiliate has been or is expected by any US Credit
Party or any ERISA Affiliate to be incurred with respect to any Plan.
No ERISA Termination Event with respect to any Plan has occurred or
could reasonably be expected to occur.
(c) Except as set forth on Schedule 5.9, full payment when due has been
made of all amounts which any US Credit Party or any ERISA Affiliate is
required under the terms of each Plan or applicable law to have paid as
contributions to such Plan (excluding any non-payment involving an
amount that is not material), and no accumulated funding deficiency (as
defined in Section 302 of ERISA and Section 412 of the Code), whether
or not waived, exists with respect to any Plan.
(d) No Lien as described in Section 412(n) of the Code exists with respect
to any Plan and there has been no failure to make a required
contribution to any Plan which would result in the imposition of a Lien
as described in Section 412(n) of the Code to exist.
(e) On the Closing Date, neither any US Credit Party nor any ERISA
Affiliate sponsors, maintains or contributes to any "multiemployer
plan" (as defined in Section 3(37)
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or 4001(a)(3) of ERISA) nor has incurred or expects to incur any
material liability under Sections 4201 or 4243 of ERISA with respect to
any multiemployer plan.
(f) Neither any US Credit Party nor any ERISA Affiliate is required to
provide security to a Plan pursuant to Section 401(a)(29) of the Code.
SECTION 5.10 CANADIAN EMPLOYEE BENEFITS.
(a) Except as could not reasonably be expected to have a Material Adverse
Effect, each Canadian Credit Party has complied in all material
respects with all applicable laws regarding each Plan (including, where
applicable, the Income Tax Act (Canada)); and each Plan is, and has
been, maintained and administered in substantial compliance with its
terms, applicable collective bargaining agreements, and all applicable
laws (including, where applicable, the Income Tax Act (Canada)).
(b) There exists no material outstanding liability of any Canadian Credit
Party with respect to any Plan that has been terminated.
(c) Full payment when due has been made of all amounts which any Canadian
Credit Party is required under the terms of each Plan or applicable law
to have paid as contributions to such Plan (excluding any nonpayment
involving an amount that is not material), and except with respect to
the Plans set out on Schedule 5.10, no funding deficiency, whether or
not waived, resulting from the action or inaction of any Canadian
Credit Party exists with respect to any Plan which is a registered
pension plan.
(d) Each Plan relating to a Canadian Credit Party is funded, on a going
concern basis, in accordance with its terms, all regulatory and
administrative requirements and applicable law, except to the extent
any failure to do so could not reasonably be expected to have a
Material Adverse Effect. Any assessments owed to the Pension Benefits
Guarantee Fund established under the Pension Benefits Act (Ontario), or
other assessments or payments required under similar legislation in any
other jurisdiction, have been paid when due.
SECTION 5.11 TAXES; GOVERNMENTAL CHARGES. Each Credit Party has filed all tax
returns and reports required by law to be filed and has paid all taxes,
assessments, fees and other governmental charges levied upon any of them or upon
any of their respective Properties or income which are due and payable,
including interest and penalties, except to the extent being diligently
contested in good faith by appropriate proceedings and with respect to which
such Credit Party has provided adequate reserves for the payment thereof if
required in accordance with GAAP.
SECTION 5.12 TITLES, ETC. The Properties of each Credit Party are free and clear
of all Liens except Permitted Liens.
SECTION 5.13 DEFAULTS. On the Closing Date, no Credit Party is in default nor
has any event or circumstance occurred which, but for the passage of time or the
giving of notice, or both, would constitute a default under any material loan or
credit agreement, indenture, mortgage, deed of
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trust, security agreement or other instrument or agreement evidencing or
pertaining to any Indebtedness of any Credit Party, or under any material
agreement or instrument to which any Credit Party is a party or by which any
Credit Party is bound. No Default hereunder has occurred and is continuing.
SECTION 5.14 CASUALTIES; TAKING OF PROPERTIES. Neither the business nor the
Properties of any Credit Party has been affected in a manner that has or could
reasonably be expected to have a Material Adverse Effect as a result of any
fire, explosion, earthquake, flood, drought, windstorm, accident, strike or
other labor disturbance, embargo, requisition or taking of Property or
cancellation of contracts, permits or concessions by any domestic or foreign
government or any agency thereof, riot, activities of armed forces or acts of
God or of any public enemy.
SECTION 5.15 COMPLIANCE WITH THE LAW. Except as set forth in Schedule 5.15, no
Credit Party:
(a) is in violation of any Governmental Requirement; or
(b) has failed to obtain any license, permit, right-of-way, franchise or
other right or governmental authorization necessary to the ownership of
any of their respective Properties or the conduct of their respective
business;
which violation or failure could, individually or in the aggregate, reasonably
be expected to have (in the event that such a violation or failure were asserted
by any Person through appropriate action) a Material Adverse Effect.
SECTION 5.16 NO MATERIAL MISSTATEMENTS. This Agreement (including the Schedules
hereto) does not contain any material misstatement of fact or omit to state a
material fact necessary to make the statements contained herein not misleading;
provided, that, except as provided in Section 5.6(b), no representation or
warranty is made with respect to the Projections.
SECTION 5.17 INVESTMENT COMPANY ACT. No Credit Party is an "investment company"
or a company "controlled" by an "investment company," as those terms are defined
in the Investment Company Act of 1940, and no Credit Party is registered or
required to be registered under the Investment Company Act of 1940. The
execution and delivery by the Credit Parties of this Agreement and the other
Financing Documents to which they respectively are parties and their respective
performance of the obligations provided for therein, will not result in a
violation of the Investment Company Act of 1940.
SECTION 5.18 MARGIN STOCK; PUBLIC UTILITY HOLDING COMPANY ACT. No Credit Party
is engaged principally, or as one of its important activities, in the business
of extending credit for the purpose, whether immediate, incidental or ultimate,
of purchasing or carrying Margin Stock (within the meaning of Regulation T, U or
X) and no part of the proceeds of any Loan hereunder will be used to purchase or
carry any Margin Stock in violation of Regulation T, U or X. No Credit Party is
a "holding company," or a "subsidiary company" of a "holding company," or an
"affiliate" of a "holding company" or of a "subsidiary company" of a "holding
company," or a "public utility" within the meaning of the Public Utility Holding
Company Act of 1935, as amended.
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SECTION 5.19 CAPITAL STRUCTURE. Schedule 5.19 hereto accurately reflects, as of
the date hereof, (a) the jurisdiction of incorporation or organization of each
Credit Party, (b) each jurisdiction in which each Credit Party is qualified to
transact business as a foreign corporation, foreign partnership or foreign
limited liability company, (c) the authorized, issued and outstanding Equity of
each Credit Party, including the names of (and number of shares or other Equity
interest held by) the record and beneficial owners of such securities (other
than with respect to the Company). As of the date hereof, except as set forth in
Schedule 5.19 hereto, there are no outstanding shareholder agreements, voting
agreements or other agreements of any nature which in any way restrict or effect
the transfer, pledge or voting of any of the Equity securities of any Credit
Party or subject any of such securities to any put, call, redemption obligation
or similar right or obligation of any nature.
SECTION 5.20 INSURANCE. All policies of fire, liability, workmen's compensation,
casualty, flood, business interruption and other forms of insurance owned or
held by each Credit Party are sufficient for compliance with all requirements of
law and of all material agreements to which each Credit Party is a party; are
valid, outstanding and enforceable policies; provide adequate insurance coverage
which is, to the knowledge of the Borrowers, in at least such amounts and
against at least such risks (but including in any event public liability) as are
usually insured against in the same general area by companies engaged in the
same or a similar business for the assets and operations of the Credit Parties;
and will not in any way be affected by, or terminate or lapse by reason of, the
transactions contemplated by this Agreement. All such policies are in full force
and effect, all premiums with respect thereto have been paid in accordance with
their respective terms, and if a notice of cancellation or termination has been
received with respect to any such policy, the applicable Credit Parties are
using reasonable best efforts to replace the relevant insurance and have no
reason to believe that such insurance will not be replaced. Except as provided
on Schedule 5.20 hereto, no Credit Party maintains any formalized self-insurance
program with respect to its material assets or operations or risks with respect
thereto. The certificate of insurance delivered to the Lenders pursuant to
Section 3.1(l) contains an accurate and complete description of all material
policies of insurance owned or held by each Credit Party on the Closing Date.
SECTION 5.21 ENVIRONMENTAL MATTERS.
(a) ENVIRONMENTAL LAWS, ETC. Except as disclosed in Schedule 5.21 hereto,
neither any Property of any Credit Party nor the operations conducted
thereon violate any applicable order of any court or Governmental
Authority or Environmental Laws, which violation could reasonably be
expected to have a Material Adverse Effect or which could reasonably be
expected to result in remedial obligations having a Material Adverse
Effect assuming disclosure to the applicable Governmental Authority of
all relevant facts, conditions and circumstances, if any, pertaining to
the relevant Property.
(b) NO LITIGATION. Except as disclosed in Schedule 5.21 hereto, no Property
of any Credit Party nor the operations currently conducted thereon are
subject to any existing, pending or, to the knowledge of the Company
and each Borrower, threatened action, suit, investigation, inquiry or
proceeding by or before any court or Governmental Authority or
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to any remedial obligations under Environmental Laws, which action,
suit, investigation, inquiry or proceeding could reasonably be expected
to have a Material Adverse Effect.
(c) NOTICES, PERMITS, ETC. Except as disclosed in Schedule 5.21 hereto, all
notices, permits, licenses or similar authorizations, if any, required
to be obtained or filed by any Credit Party in connection with the
operation or use of any and all Property of the Credit Parties,
including but not limited to past or present treatment, storage,
disposal or release of a hazardous substance or solid waste into the
environment, have been duly obtained or filed except for those notices,
permits, licenses or authorizations the failure of which to obtain
could not reasonably be expected to have a Material Adverse Effect
assuming disclosure to the applicable Governmental Authority of all
relevant facts, conditions and circumstances, if any, pertaining to
such operations or use.
(d) HAZARDOUS SUBSTANCES CARRIERS. Except as disclosed in Schedule 5.21
hereto, to the knowledge of the Borrowers, all hazardous substances or
solid waste generated at any and all Property of any Credit Party have
in the past been transported, treated and disposed of only by carriers
maintaining valid permits under applicable Environmental Laws, and only
at treatment, storage and disposal facilities maintaining valid permits
under applicable Environmental Laws, which carriers and facilities have
been and are operating in material compliance with such permits.
(e) HAZARDOUS SUBSTANCES DISPOSAL. Except as disclosed in Schedule 5.21
hereto, each Credit Party has taken all reasonable steps necessary to
determine and has determined that no hazardous substances or solid
waste has been disposed of or otherwise released and there has been no
threatened release of any hazardous substances on or to any Property of
any Credit Party except in material compliance with Environmental Laws
or where such disposal, release or threatened release could not
reasonably be expected to have a Material Adverse Effect.
(f) NO CONTINGENT LIABILITY. Except as disclosed in Schedule 5.21, the
Credit Parties have no contingent liability in connection with any
release or threatened release of any hazardous substance or solid waste
into the environment, other than such contingent liabilities at any one
time and from time to time which could not reasonably be expected to
exceed $5,000,000 in excess of the insurance coverage maintained by the
Credit Parties in respect of such risks.
SECTION 5.22 SOLVENCY. Each Credit Party is Solvent, both before and after
giving affect to the transactions contemplated by this Agreement and the
incurrence of all Lender Indebtedness to be incurred in connection therewith.
SECTION 5.23 EMPLOYEE MATTERS. There are no strikes, slowdowns, work stoppages,
union organizing campaigns or representation petitions, unfair labor practices
or labor disputes pending or, to the best knowledge of the Borrowers, threatened
against any Credit Party, or their respective employees, which could reasonably
be expected to have, either individually or in the aggregate, a Material Adverse
Effect.
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SECTION 5.24 REAL PROPERTY. Schedule 5.24 hereto accurately reflects, as of the
date hereof, all Real Property in which any Credit Party holds any right, title
or interest, including any leasehold interest. Schedule 5.24 further accurately
reflects, in respect of each parcel of Real Property described thereon, the name
of the Credit Party which is the owner and holder of record title or leasehold
interest thereto, the nature of the interest of the Credit Parties therein (fee,
leasehold or other), and, in the case of any leasehold interest of Real Property
where any Collateral is or may be located, the monthly rent and the name of the
landlord under such lease.
SECTION 5.25 PERFECTION CERTIFICATE; SCHEDULES TO OTHER FINANCING DOCUMENTS. All
information in each Perfection Certificate and all information set forth in all
disclosure schedules to each of the other Financing Documents is true, correct
and complete.
SECTION 5.26 EXISTING INDEBTEDNESS. Schedule 5.26 hereto contains an accurate
and complete list of all Existing Indebtedness of the Credit Parties on the
Closing Date after giving effect to the repayment of any such Indebtedness to be
repaid on the Closing Date, and including, with respect to each such item of
Existing Indebtedness which will remain outstanding after the Closing Date: (a)
the current lender or holder of such Indebtedness, (b) the principal amount of
such Indebtedness on the Closing Date, (c) identifying the material loan
agreements, promissory notes and other documents evidencing, governing or
otherwise pertaining to such Indebtedness, and (d) a summary description of all
property which stands as security for such Indebtedness.
SECTION 5.27 144A TRANSACTION DOCUMENTS. The Borrowers have provided to the
Administrative Agent a true and correct copy of the 144A Indenture, the offering
memorandum related to the 144A Transaction and all other material documents,
instruments and agreements entered into by any Credit Party related to the 144A
Transaction, including all amendments and modifications thereto (whether
characterized as an amendment, modification, waiver, consent or similar
document) (collectively, the "144A DOCUMENTS"). No material rights or
obligations of any Credit Party which is a party to any of the 144A Documents
have been waived and no Credit Party which is a party to any of the 144A
Documents is in default of its obligations thereunder. Each of the 144A
Documents is a valid, binding and enforceable obligation of each party thereto
in accordance with its terms and is in full force and effect, except as
enforceability may be limited by applicable bankruptcy, insolvency,
reorganization, moratorium or similar laws generally affecting the enforcement
of creditors' rights and subject to the availability of equitable remedies. Each
representation and warranty made by Credit Party which is a party to 144A
Documents is true and correct in all material respects on the date hereof and
will be true and correct in all material respects on the Closing Date. None of
the 144A Documents has been amended, restated, supplemented or otherwise
modified since the Closing Date, without the prior written consent of all
Lenders other than as permitted by Section 7.22.
SECTION 5.28 MATERIAL CONTRACTS. No Credit Party is in default under or in
breach of any term or condition of any material contract, nor is any Credit
Party aware of any default under or breach of any term or condition of any
material contract by any other party thereto, in either case where the default
could reasonably be expected to have a Material Adverse Effect.
SECTION 5.29 [INTENTIONALLY DELETED.]
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SECTION 5.30 ACCOUNTS. Other than the accounts specifically permitted by Section
7.18 hereof, none of the Borrowers maintains any account with any bank or other
depository institution into which any cash or cash equivalents are deposited or
cash or cash equivalents or maintained.
SECTION 5.31 TAX SHELTER REGISTRATION. The Borrowers do not believe any of the
transactions contemplated by the Financing Documents constitute a transaction
subject to United States Treasury Regulation Sections 1.6011-4, 301.6111-1T,
301.6111-2, or 301.6112-1. In the event any Borrower becomes aware of any
fact(s) that would result in such Borrower taking a position inconsistent with
such belief, it will promptly notify the Administrative Agent thereof. If any
Borrower so notifies the Administrative Agent, the Borrowers acknowledge that
one or more of the Lenders may be required to treat its Loans as part of a
transaction that is subject to United States Treasury Regulation Section
301.6112-1.
SECTION 5.32 Representations With Respect to Certain Credit Parties.
(a) GUSAP's sole business is as set forth in Section 6.11(a). GUSAP does
not own, lease, license or otherwise have the right to use any other
Property, other than as expressly permitted under Section 6.11(a).
GUSAP has no liabilities or obligations to any Person other than as
expressly permitted under Section 6.11(a). GUSAP has no employees.
Immediately after the funding of the initial Loans hereunder, GUSAP has
equity of at least $40 million. GUSAP has sufficient cash available to
it to pay its expenses and obligations as they come due.
(b) NSULC's sole business is as set forth in Section 6.11(b). NSULC does
not own, lease, license or otherwise have the right to use any other
Property, other than as expressly permitted under Section 6.11(b).
NSULC has no liabilities or obligations to any Person other than as
expressly permitted under Section 6.11(b). NSULC has no employees.
Immediately after the funding of the initial Loans hereunder, NSULC has
equity of at least $400 million. NSULC has sufficient cash available to
it to pay its expenses and obligations as they come due.
(c) PASUG's sole business is as set forth in Section 6.11(c). PASUG does
not own, lease, license or otherwise have the right to use any other
Property, other than as expressly permitted under Section 6.11(c).
PASUG has no liabilities or obligations to any Person other than as
expressly permitted under Section 6.11(c). PASUG has no employees.
Immediately after the funding of the initial Loans hereunder, PASUG has
equity of at least $400 million. PASUG has sufficient cash available to
it to pay its expenses and obligations as they come due.
ARTICLE 6
AFFIRMATIVE COVENANTS
So long as any Lender has any Commitment hereunder or any Loan
remains unpaid or any Revolving Credit Exposure remains outstanding, each
Borrower will at all times comply with the following covenants.
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SECTION 6.1 MAINTENANCE AND COMPLIANCE, ETC. Each Borrower will and will cause
each other Credit Party to (a) observe and comply in all material respects with
all Governmental Requirements and with all of its material contractual
obligations, except where the failure to do so could not reasonably be expected
to have a Material Adverse Effect, (b) except as permitted by Section 7.4,
preserve and maintain its corporate existence, and (c) obtain, preserve, renew
and keep in full force and effect any and all rights, licenses, permits,
privileges and franchises material to the conduct of its business, except where
the failure to do so could not reasonably be expected to have a Material Adverse
Effect.
SECTION 6.2 PAYMENT OF TAXES AND CLAIMS, ETC. Each Borrower will pay, and cause
each other Credit Party to pay, (a) all material taxes, assessments and
governmental charges imposed upon it or upon its Property, and (b) all material
claims (including, but not limited to, claims for labor, materials, supplies or
services) which could reasonably be expected, if unpaid, to become a Lien upon
its Property, unless, in each case, such Lien is a Permitted Lien or the
validity or amount thereof is being contested in good faith by appropriate
action or proceedings and if the Borrowers have made adequate reserves for the
payment thereof if required in accordance with GAAP.
SECTION 6.3 FURTHER ASSURANCES. Each Borrower will and will cause each other
Credit Party to promptly cure upon the reasonable request by the Administrative
Agent any defects in the creation and issuance of the Notes, or in the execution
and delivery of the Financing Documents. Each Borrower at its expense will, as
promptly as practical, execute and deliver to the Administrative Agent or the
applicable Issuing Bank upon the reasonable request all such other and further
documents, agreements and instruments (or cause any of the other Credit Parties
to take such action) in order to carry out to the Administrative Agent's
reasonable satisfaction the transactions contemplated by the Financing
Documents, including this Agreement, or to further evidence and more fully
describe the Collateral, or to correct any omissions in the Financing Documents,
or more fully to state the security obligations set out herein or in any of the
Financing Documents, or to perfect, protect or preserve any Liens created
pursuant to any of the Financing Documents, or to make any recordings, to file
any notices, or obtain any consents, all as may be necessary or appropriate in
connection therewith.
SECTION 6.4 [INTENTIONALLY DELETED.]
SECTION 6.5 INSURANCE. Except as provided in Schedule 6.5, each Borrower will
and will cause each of the other Credit Parties to maintain or cause to be
maintained, with insurers believed by the Borrowers in good faith to be
financially sound and reputable insurers having a rating of at least A or better
by Best Rating Guide, insurance with respect to their respective Properties and
business against such liabilities, casualties, risks and contingencies and in
such types (including business interruption insurance, marine insurance, and
flood insurance) and amounts as the Administrative Agent may reasonably require
or as may be required in accordance with any Governmental Requirement. Each
Borrower will obtain endorsements to the policies naming the Administrative
Agent or the Canadian Administrative Agent, as applicable, as a loss payee as
their interests may appear, and containing provisions that such policies will
not be canceled without 30 days prior written notice having been given by the
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insurance company to the Administrative Agent or the Canadian Administrative
Agent, as applicable.
SECTION 6.6 ACCOUNTS AND RECORDS. Each Borrower will keep and will cause each of
the other Credit Parties to keep proper books of record and account in
accordance with GAAP.
SECTION 6.7 RIGHT OF INSPECTION. In addition to any other inspection or audit
rights of the Administrative Agent, the Canadian Administrative Agent or any
Lender hereunder, each Borrower will permit and will cause each of the other
Credit Parties to permit any officer, employee or agent of the Administrative
Agent, the Canadian Administrative Agent or any Lender to visit and inspect any
of the Properties of the Credit Parties, examine any Credit Party's books of
record and accounts, take copies and extracts therefrom, and discuss the
affairs, finances and accounts of the Credit Parties with any Credit Party's
executive officers, accountants and auditors, as often and all at such
reasonable times during normal business hours and upon reasonable advance notice
by the Administrative Agent or the Canadian Administrative Agent, all as may be
reasonably requested by the Administrative Agent or the Required Lenders;
provided, that (a) such inspection rights shall not be limited or conditioned by
reasonable prior notice or reasonable times during the existence of a Default or
Event of Default, (b) until June 30, 2004, the frequency of any such visitations
or inspections by the Administrative Agent or the Canadian Administrative Agent
shall be unlimited, and (c) after June 30, 2004, the Administrative Agent and
the Canadian Administrative Agent shall be limited to 2 such visitations and
inspections in each Fiscal Year unless a Default or an Event of Default shall
have occurred and be continuing. Without limiting the foregoing, the Borrowers
agree to hold a meeting with all Lenders at least once a year to discuss the
business and affairs of the Borrowers.
SECTION 6.8 [INTENTIONALLY DELETED.]
SECTION 6.9 COLLATERAL REPORTS. During each Fiscal Year, as of a date or dates
to be designated by the Administrative Agent, the Borrowers will, at the cost of
the Borrowers, provide such assistance as the Administrative Agent and the
Canadian Administrative Agent may reasonably request in connection with the
preparation by the Administrative Agent and the Canadian Administrative Agent of
up to two (2) reports (each, a "COLLATERAL REPORT") of a collateral field
examiner (the cost of which shall be for the account of the Borrowers) selected
by the Administrative Agent in writing (which may be the Administrative Agent or
an affiliate thereof) with respect to the Eligible Accounts and Eligible
Inventory components for each of the Borrowers included in the US Borrowing Base
and the Canadian Borrowing Base and such other matters regarding the Credit
Parties or the Collateral as the Administrative Agent or the Canadian
Administrative Agent shall reasonably require; provided, that (a) for so long as
Excess Availability is below $50,000,000, the Administrative Agent shall be
entitled to receive at the cost of the Borrowers any number of Collateral
Reports as the Administrative Agent determines in its discretion, (b) the
Administrative Agent shall also be entitled, in its discretion, to receive, at
no cost to the Borrowers, Collateral Reports in addition to those set out above,
(c) any Collateral Report provided in connection with a Permitted Acquisition
shall be in addition to the Collateral Reports required to be provided pursuant
to this Section 6.9, and (d) in the first Fiscal Year following the Closing
Date, the first Collateral Report shall be done not later than 90 days
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following the Closing Date, and the Administrative Agent may, but need not,
require up to two (2) further Collateral Reports.
SECTION 6.10 REPORTING COVENANTS. The Company and the Borrowers will furnish the
following to each of the Lenders:
(a) ANNUAL FINANCIAL STATEMENTS. As soon as available and in any event
within 120 days after the end of each Fiscal Year, consolidating and
consolidated balance sheets of the Company and its Subsidiaries as at
the end of such year and the related consolidating and consolidated
statements of income, retained earnings and cash flows of the Company
and its Subsidiaries for such Fiscal Year, setting forth in each case
in comparative form the figures for the previous Fiscal Year, all in
reasonable detail and accompanied by the unqualified report thereon of
independent public accountants of recognized national standing, which
report shall state that such consolidated financial statements present
fairly in all material respects the consolidated financial condition as
at the end of such Fiscal Year, and the consolidated results of
operations and cash flows for such Fiscal Year, of the Company and its
Subsidiaries in accordance with GAAP, applied on a consistent basis;
provided that (i) the consolidating balance sheets and consolidating
statements of income, retained earnings and cash flow of the Company
and its Subsidiaries are not required to be audited, (ii) the
consolidating balance sheets and consolidating statements of income,
retained earnings and cash flow shall be prepared for each Borrower and
for NSULC (individually), for those Credit Parties other than the
Borrowers and NSULC (as a group), and for those Subsidiaries which are
not Credit Parties (as a group), and (iii) the comparative figures for
the financial statements for the Fiscal Year ending December 31, 2003
may include figures determined in accordance with Canadian generally
accepted accounting principles.
(b) MONTHLY FINANCIAL STATEMENTS. As soon as available and in any event
within 30 days after the end of each calendar month of the Company,
unaudited consolidating and consolidated balance sheets of the Company
and its Subsidiaries as at the end of such month and the related
unaudited consolidating and consolidated statements of income, retained
earnings and cash flows of the Company and its Subsidiaries for such
calendar month and for the portion of the Company's Fiscal Year ended
at the end of such month, setting forth in each case in comparative
form the figures for the corresponding month and the corresponding
portion of the Company's previous Fiscal Year, all in reasonable detail
and certified by a Responsible Officer that such financial statements
present fairly in all material respects the consolidated financial
condition as at the end of such calendar month, and the consolidating
and consolidated results of operations and cash flows for such calendar
month and such portion of the Company's Fiscal Year, of the Company and
its Subsidiaries in accordance with GAAP (subject to normal, year-end
adjustments and the absence of footnotes); provided that (i) the
consolidating balance sheets and consolidating statements of income,
retained earnings and cash flow shall be prepared for each Borrower and
for NSULC (individually), for those Credit Parties other than the
Borrowers and NSULC (as a group), and for those Subsidiaries which are
not Credit Parties (as a group), and (ii) the comparative figures for
the financial statements for each
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Fiscal Quarter ending on or before December 31, 2003 may include
figures determined in accordance with Canadian generally accepted
accounting principles.
(c) MANAGEMENT DISCUSSION AND ANALYSIS Together with the financial
statements required pursuant to Section 6.10(a), a management
discussion and analysis of the financial performance of the Company and
its Subsidiaries for the periods covered thereby, in reasonable detail.
In addition, the Company shall provide to the Administrative Agent, for
distribution to the Lenders, a management discussion and analysis of
the financial performance of the Company and its Subsidiaries on a
quarterly basis, at the same time as such management discussion and
analysis is disclosed publicly to the shareholders of the Company.
(d) NO DEFAULT/COMPLIANCE CERTIFICATE. Together with the financial
statements required pursuant to Section 6.10(a) and Section 6.10(b)
above, a certificate of the Company, which shall be substantially in
the form of Exhibit J hereto and signed by a Responsible Officer: (1)
stating that a review of such financial statements during the period
covered thereby and of the activities of the Company and its
Subsidiaries has been made under such Responsible Officer's supervision
with a view to determining whether the Company and its Subsidiaries
have fulfilled in all material respects all of their obligations under
this Agreement, the other Financing Documents, and the Notes; (2)
stating that no Default exists and that the Company and its
Subsidiaries have fulfilled in all respects their obligations under
such instruments, or if there shall be a Default or Event of Default,
specifying the nature and status thereof and the Company's proposed
response thereto; (3) demonstrating in reasonable detail compliance
(including, but not limited to, showing all material calculations) as
at the end of such Fiscal Year or such month with Section 6.12, Section
7.2(g) and 7.3(f); (4) containing or accompanied by such financial or
other details, information and material as the Administrative Agent may
reasonably request to evidence such compliance; (5) certifying that the
Company and its Subsidiaries have complied with the minimum funding
requirements with respect to each Plan maintained by the Company and/or
its Subsidiaries, or to which the Company or any of its Subsidiaries is
a member, and that the Company and its Subsidiaries have complied in
all respects with Section 7.9 of this Agreement; and (6) stating that
no event has occurred or condition exists that has had or reasonably
could be expected to have a Material Adverse Effect. At the same time,
the Company shall deliver (I) a Perfection Certificate Update prepared
as of the close of business on the last Business Day of the preceding
calendar month, (II) an accounts receivable aging, payables aging and
inventory aging prepared as of the close of business on the last
Business Day of the preceding calendar month, a monthly accounts
receivable aging and reconciliation, an accounts payable
reconciliation, and sales reports and inventory designations, in each
case satisfactory to the Administrative Agent, and such other
information related thereto requested by the Administrative Agent,
(III) a certificate of the Company signed by a Responsible Officer
stating that the Credit Parties have been in compliance with Section
7.2(h) and Section 7.2(i) at all times during the preceding calendar
month and setting out the US Operating Borrower Net Advance Amount for
each Credit Party and the aggregate US Operating Borrower Net Advance
Amount for all Credit Parties, in each case as of the last day of
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the preceding calendar month, and (IV) a summary of all Swap Agreements
to which any Borrower is subject as of the last Business Day of the
preceding calendar month, in form, substance and detail acceptable to
the Administrative Agent.
(e) TITLE INFORMATION. Promptly after a request by the Administrative
Agent, additional title information in form and substance acceptable to
the Required Lenders as is reasonably requested and reasonably
necessary covering the Collateral so that the Lenders shall have
received, together with the title information previously received by
the Lenders, satisfactory title information covering all of the
Collateral.
(f) EVENTS OR CIRCUMSTANCES WITH RESPECT TO COLLATERAL. Promptly after the
occurrence of any event or circumstance concerning or changing any of
the Collateral that could reasonably be expected to have a Material
Adverse Effect, notice of such event or circumstance in reasonable
detail.
(g) BORROWING BASE REPORTS. As soon as available, and in any event on or
before the 20th day of each calendar month (or the next succeeding
Business Day if such day is not a Business Day): (1) a Canadian
Borrowing Base Report and a US Borrowing Base Report, reflecting the US
Borrowing Base for each US Operating Borrower, and US Maximum Available
Amount (on a combined basis for all US Borrowers, and individually for
each US Borrower) and the Canadian Borrowing Base and Canadian Maximum
Available Amount as of the close of business on the last Business Day
of the preceding calendar month; provided, however, at any time that
Excess Availability shall be below $70,000,000, the Administrative
Agent, in its discretion, may require the delivery of US Borrowing Base
Reports, the Canadian Borrowing Base Reports and other reports more
frequently than monthly (including daily), in which event the US
Borrowing Base and Canadian Borrowing Base (as applicable) would be
adjusted immediately upon delivery (subject to the right of the
Administrative Agent and the Canadian Administrative Agent to review
such reports and confirm that they have been prepared in accordance
with the terms of this Agreement) of such reports based on the
information reflected in such reports; and (2) a certificate of the
Company signed by a Responsible Officer setting out the aggregate mark
to market exposure, as at the end of the preceding month, under all
Swap Agreements entered into by the Credit Parties.
(h) NOTICE OF CERTAIN EVENTS. Promptly after any Borrower learns of the
receipt or occurrence of any of the following, a certificate of the
Borrowers, signed by a Responsible Officer specifying (1) any official
written notice of any material violation, possible violation,
non-compliance or possible non-compliance, or claim made by any
Governmental Authority pertaining to all or any part of the Properties
of any Credit Party; (2) any event which constitutes a Default or Event
of Default, together with a statement specifying the nature thereof and
the steps being taken to cure such Default or Event of Default; (3) the
creation, dissolution, merger or acquisition of any Credit Party; (4)
any event or condition not previously disclosed to the Administrative
Agent, which violates any Environmental Law and which could reasonably
be expected to have a Material Adverse Effect; (5) any release or
threatened release of any hazardous substance or solid waste into the
environment where any contingent liabilities associated with such
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release or threatened could reasonably be expected to exceed
$1,000,000; (6) any material amendment to, termination of, or material
default under any material contract or any execution of, or material
amendment to, termination of, or material default under, any material
collective bargaining agreement; (7) any change which would result in
any of Schedules 5.9, 5.10, 5.15, 5.19, 5.20, 5.21 and 5.24 no longer
being correct in any material respect, or (8) any event or condition
which may reasonably be expected to have a Material Adverse Effect.
(i) SHAREHOLDER COMMUNICATIONS, FILINGS. Promptly upon the mailing, filing,
or making thereof, copies of all registration statements, periodic
reports and other documents (excluding the related exhibits except to
the extent expressly requested by the Administrative Agent) required to
be filed by any Credit Party with the Securities and Exchange
Commission (or any successor thereto) or any securities exchange or
Canadian provincial securities commission.
(j) LITIGATION. Promptly after the occurrence thereof, notice of the
institution of or any material adverse development in any material
action, suit, claim or proceeding or any governmental investigation or
any arbitration, before any arbitrator or any Governmental Authority,
in which the amount involved is $3,000,000 or more, or which, if
adversely determined, could reasonably be expected to have a Material
Adverse Effect.
(k) ERISA. Promptly after (1) any Credit Party obtaining knowledge of the
occurrence thereof, notice that an ERISA Termination Event has
occurred, a "prohibited transaction," as such term is defined in
Section 406 of ERISA or Section 4975 of the Code (for which there is no
exemption) with respect to any Plan has occurred that could reasonably
be expected to have a Material Adverse Effect, or the assertion of a
material claim (other than a routine claim for benefits) against a Plan
or against any Credit Party or any ERISA Affiliate with respect to a
Plan has occurred, which such notice shall specify the nature thereof,
the Borrowers' proposed response thereto (and, if applicable, the
proposed response thereto of any Subsidiary of the Borrowers and of any
ERISA Affiliate) and, where known, any action taken or proposed by the
Internal Revenue Service, the Department of Labor or the PBGC with
respect thereto, (2) any Credit Party's obtaining knowledge thereof,
copies of any notice of the PBGC's intention to terminate or to have a
trustee appointed to administer any Plan, (3) any Credit Party's
obtaining knowledge thereof, notice of the imposition of a lien
pursuant to Section 401(a)(29) or 412(n) of the Code or pursuant to
ERISA with respect to any Plan, and (4) the filing thereof with any
Governmental Authority copies of each annual and other report
(including applicable schedules) with respect to each Plan or any trust
created thereunder (if requested by the Administrative Agent).
(l) ANNUAL BUDGET. As soon as available and in any event not later than 30
days after the end of each Fiscal Year, a budget of the Credit Parties
on a consolidating and consolidated basis for the next Fiscal Year
(prepared on a monthly basis), together with written confirmation, not
later than 45 days after the end of each Fiscal Year, that such budget
has been reviewed and approved by the Board of Directors of the
Company. If any changes to such budget were made as part of the Board
of Director approval process,
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a summary of such changes shall be provided to the Administrative Agent
with the approval confirmation. Each such budget shall set forth in
reasonable detail, the projected revenues and expenses of the Company
for such next Fiscal Years, as well as projected Availability and
Borrowing Base information, as well as projected balance sheets and
cash flow statements. In addition, as soon as available and in any
event not later than 30 days after the end of each Fiscal Year, the
Company shall provide to the Administrative Agent a set of consolidated
projections for the next five years.
(m) INVENTORY APPRAISALS. If a Block Event exists, the Administrative Agent
may require, at the cost of the Borrowers, and as frequently as the
Administrative Agent determines, appraisals of the Borrowers' inventory
in scope and detail and prepared by an independent appraisal firm
selected by the Administrative Agent. The Administrative Agent may also
require, at its own cost, and as frequently as the Administrative Agent
determines, additional appraisals of the Borrowers' inventory in scope
and detail and prepared by an independent appraisal firm selected by
the Administrative Agent. The Borrowers and other Credit Parties will
cooperate with the Administrative Agent and the appraiser in the
conduct of any such appraisal.
(n) OTHER INFORMATION. With reasonable promptness, such other information
about the business and affairs and financial condition of any Credit
Party as the Administrative Agent may reasonably request from time to
time, including, without limitation, monthly accounts receivable aging
and reconciliation, accounts payable aging and reconciliation, sales
reports and inventory designations.
SECTION 6.11 FINANCING ENTITIES.
(a) GUSAP's business shall be restricted solely to operating a group
financing business to provide financing to the Company, the other
Credit Parties and certain of their Affiliates, to borrowing under the
144A Transaction and under this Agreement, to making Investments
(otherwise permitted herein), and to making Investments in NSULC,
together with such ancillary activities which are necessary or
desirable to operate such business. GUSAP shall not own, lease, license
or otherwise have the right to use any Property, other than (1)
Investments in NSULC, (2) the GUSAP Payment Account, the other deposit
accounts listed as being owned by GUSAP on Schedule 7.18, and such
other deposit accounts as the Agents shall have consented to in
writing, (3) Investments permitted by clauses (b), (c), (d), (e) (f)
and (h) of Section 7.6 having an aggregate value at any one time
together with Investments by PASUG pursuant to 6.11(c)(1)(ii) not in
excess of $10,000,000, (4) funds held by GUSAP and raised by equity,
from the Lenders or from the holders of the 144A Notes, in each case
promptly invested in NSULC, and (5) other funds to the extent necessary
to pay expenses that relate solely to the 144A Notes or this Agreement
or to maintaining the existence of the Company (including its
reasonable share of legal, accounting and administrative expenses
relating thereto). GUSAP shall not incur or suffer to exist any
liabilities or obligations to any Person, other than to the Lenders in
respect of the Loans, to the holders of the 144A Notes in respect of
amounts owing thereunder, Indebtedness owing to other Credit Parties as
set forth on Schedule 5.26 hereof, liabilities for Taxes, and
liabilities for its share of fees and
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expenses that directly relate to its Investment in NSULC and its
borrowing under the 144A Notes and hereunder (including its reasonable
share of legal, accounting and administrative expenses relating
thereto). GUSAP shall have no employees. GUSAP shall remain Solvent at
all times during the term of this Agreement, and shall maintain
sufficient cash to pay its expenses and obligations as they come due.
GUSAP shall not incur or permit to exist any Liens on any of its
Properties, other than Liens permitted under Section 7.3(a), (b), (c)
or (l). Upon receipt by GUSAP of any Equity Distribution from NSULC in
the GUSAP Payment Account, GUSAP agrees that it shall repay amounts
owing in respect of US Revolving Credit Loans to the Administrative
Agent and the Lenders by transferring the amount of such Equity
Distributions so received in the GUSAP Payment Account to the
Administrative Agent. GUSAP hereby agrees that it shall use its
reasonable best efforts to ensure that all payments made by GUSAP in
respect of the Revolving Credit Loans shall be made with funds that
originated as Equity Distributions by PASUG to NSULC as contemplated in
clause (d) below.
(b) NSULC's business shall be restricted solely to being a holding company,
raising equity capital from GUSAP, making Investments (otherwise
permitted herein) in PASUG, and making Investments in the equity of
Gerdau USA Inc. (or any successor thereof) existing on the date hereof
and disclosed on Schedule 5.19 or after giving effect to any step of
the Permitted Reorganization, together with such ancillary activities
which are necessary or desirable to operate such business. NSULC shall
not own, lease, license or otherwise have the right to use any
Property, other than (1) Investments in PASUG, (2) Investments in
Gerdau USA Inc. existing on the date hereof or acquired and held after
giving effect to any step of the Permitted Reorganization, (2) the
NSULC Payment Account, the other deposit accounts listed as being owned
by NSULC on Schedule 7.18, and such other deposit accounts as the
Agents shall have consented to in writing, (4) funds held by NSULC and
promptly invested in PASUG, and (5) other funds in an amount not to
exceed $250,000 at any time to the extent necessary to pay expenses
that relate solely to its business activity or maintaining its
existence (including its reasonable share of legal, accounting and
administrative expenses relating thereto), which shall not exceed
$250,000 in any Fiscal Year. NSULC shall have no liabilities or
obligations to any Person, other than guarantee liabilities in respect
of the Loans and amounts owing under the 144A Notes, liabilities owing
to other Credit Parties for its share of fees and expenses that
directly relate to its Investment in PASUG (including its reasonable
share of legal, accounting and administrative expenses relating
thereto) and liabilities for Taxes. NSULC shall have no employees.
NSULC shall remain Solvent at all times during the term of this
Agreement, and shall maintain sufficient cash to pay its expenses and
obligations as they come due. NSULC shall not incur or permit to exist
any Liens on any of its Properties, other than Liens permitted under
Section 7.3(a), (b), (c) or (l).
(c) PASUG's business shall be restricted solely to operating a group
financing business to provide financing to the Company and the other
Credit Parties and to act as a payment and collection agent for the
Company and the Credit Parties. PASUG shall not own, lease, license or
otherwise have the right to use any Property, other than (1) (i)
Investments constituting loans and advances by PASUG to the Company and
other
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Credit Parties (including loans and advances arising out of payments to
third parties in accordance with the terms hereof, for which the
Company or the other applicable Credit Party will be liable to
reimburse PASUG as repayment of such loans and advances), to the extent
permitted hereunder, and (ii) Investments permitted by clauses (b),(c),
(d), (e), (f), and (h) of Section 7.6 having an aggregate value at any
one time not in excess of $10,000,000 together with Investments by
GUSAP pursuant to Section 6.11(a)(3), (2) the PASUG Operating Account,
provided that at no time shall the account balance thereof, together
with amounts contained in any other account maintained by PASUG, exceed
an amount equal to the sum of $3,000,000 plus the amount of its
outstanding and unpaid cheques; (3) the US Lockbox and the US Blocked
Account, provided that all collections received in the US Lockbox and
transferred to the US Blocked Account are transferred to the PASUG
Operating Account (or, to the extent required herein, directly to the
Administrative Agent and the Lenders) not later than one Business Day
after receipt thereof, and (4) the PASUG Payment Account, the other
deposit accounts listed as being owned by PASUG on Schedule 7.18, and
such other accounts as the Agents shall have consented to in writing.
PASUG shall have no liabilities or obligations to any Person other than
in respect of US Operating Borrower Advances permitted hereunder,
guarantee liabilities in respect of the Loans and amounts owing under
the 144A Notes, and liabilities to other Credit Parties for its share
of fees and expenses that directly relate to its financing business or
maintaining its existence (including its reasonable share of legal,
accounting and administrative expenses relating thereto), which shall
not exceed $500,000 during any Fiscal Year. PASUG shall have no
employees. PASUG shall remain Solvent at all times during the term of
this Agreement, and shall maintain sufficient cash to pay its expenses
and obligations as they come due. PASUG shall not incur or permit to
exist any Liens on any of its Properties, other than Liens permitted
under Section 7.3(a), (b), (c) or (l).
(d) If PASUG desires to make any Equity Distribution to NSULC, PASUG may
elect to deposit the amount of such Equity Distribution into the PASUG
Payment Account, and such Equity Distribution shall automatically be
transferred to NSULC as an Equity Distribution to the NSULC Payment
Account. Upon receipt of such Equity Distribution, NSULC hereby agrees
that it shall immediately make an Equity Distribution to GUSAP in an
amount equal to the amount of the Equity Distribution received by it
from PASUG by transferring such amount so received to the GUSAP Payment
Account.
SECTION 6.12 FIXED CHARGE COVERAGE RATIO; MINIMUM AVAILABILITY. If, as of the
last day of any Rolling Period, the Company fails to maintain a Fixed Charge
Coverage Ratio for such Rolling Period of at least 1.10 to 1.00, the Borrowers
will maintain Excess Availability of at least $40,000,000 at all times. If the
Borrowers fail to deliver financial statements on the due date therefor (without
giving effect to any cure periods), such that the Fixed Charge Coverage Ratio
required by this Section 6.12 cannot be calculated, the Fixed Charge Coverage
Ratio shall be deemed to be less than 1.10 to 1.00 until such time as the
required financial statements are actually delivered.
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ARTICLE 7
NEGATIVE COVENANTS
So long as any Lender has any Commitment hereunder or any Loan
remains unpaid or any Revolving Credit Exposure remains outstanding, neither the
Company nor any other Credit Party will:
SECTION 7.1 [INTENTIONALLY DELETED.]
SECTION 7.2 INDEBTEDNESS. Create, incur, assume or suffer to exist, any
Indebtedness, other than:
(a) the Lender Indebtedness;
(b) Indebtedness which does not exceed the principal amount of $405,000,000
and which has been incurred as a result of the issuance of the senior
unsecured notes by the Company and GUSAP and the guaranty thereof by
other Subsidiaries in connection with the 144A Transaction;
(c) Indebtedness outstanding on the date hereof which is set forth in line
items 1, 2, 3 or 5 on Schedule 7.2 and any refinancing, refunding,
renewal or extension thereof, provided that such refinancing,
refunding, renewal or extension is not for a term shorter than the term
of the original Indebtedness and the principal amount thereof is not
greater than the principal amount of the original Indebtedness, and the
terms and conditions of any such refinancing, refunding, renewal or
extension (taken as a whole) are prevailing market terms and are not
materially less favourable to the Credit Parties than the terms which
are applicable to such Indebtedness and Indebtedness outstanding on the
date hereof which is set forth in line item 8 on Schedule 7.2;
(d) trade or accounts payable (for the deferred purchase price of Property
or services) from time to time incurred in the ordinary course of
business;
(e) obligations for current taxes, assessments and other governmental
charges and taxes, assessments or other governmental charges which are
not yet due or are being contested in good faith by appropriate action
or proceeding promptly initiated and diligently conducted, if reserves
required pursuant to Section 6.2 hereof have been established with
respect thereto;
(f) Indebtedness owing pursuant to Swap Agreements entered into in the
ordinary course of business for the purpose of hedging against risks
actually incurred by the Borrowers with respect to interest rates, $/C$
exchange rates and commodity prices in an aggregate amount (calculated
on the mark to market exposure under such Swap Agreements) not in
excess of $25,000,000 at any time;
(g) Indebtedness in respect of Capital Lease Obligations and purchase money
Indebtedness in an aggregate amount not in excess of $10,000,000
outstanding at any time;
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(h) Advances made by PASUG to a US Operating Borrower, other than advances
constituting US Operating Borrower Advances;
(i) US Operating Borrower Advances, provided that (x) the aggregate US
Operating Borrower Net Advance Amount, determined for all Credit
Parties, shall at no time exceed $25,000,000, and (y) at all times
during which any such US Operating Borrower Advance is outstanding,
both the maker and the recipient of such US Operating Borrower Advance
are Solvent;
(j) Permitted New Debt;
(k) Permitted New Affiliate Subordinated Debt;
(l) (i) Indebtedness provided by a Person which is not an Affiliate of a
Credit Party to finance a Permitted Acquisition, (ii) Indebtedness of a
Person or any of its Subsidiaries existing at the time such Person is
acquired pursuant to a Permitted Acquisition, and (iii) Indebtedness
assumed in connection with an acquisition of assets from a Person in a
Permitted Acquisition, which in each case may be secured by Liens on
assets not included in the Collateral, provided that the aggregate of
all Indebtedness contemplated by paragraphs (i), (ii) and (iii) shall
not exceed $50,000,000 outstanding at any time; and any refinancing,
refunding, renewal or extension of any such Indebtedness, provided that
the terms and conditions of any such refinancing, refunding, renewal or
extension Indebtedness (taken as a whole) are prevailing market terms
and the terms and conditions of any such Indebtedness (taken as a
whole) are not materially less favourable to the Credit Parties than
the terms which are applicable to such Indebtedness;
(m) Indebtedness provided by a Person which is not an Affiliate of a Credit
Party which may be secured by Liens on assets not included in the
Collateral, in an aggregate amount not in excess of $25,000,000
outstanding at any time, and any refinancing, refunding, renewal or
extension of any such Indebtedness, provided that the terms and
conditions of any such refinancing, refunding, renewal or extension
Indebtedness (taken as a whole) are prevailing market terms and the
terms and conditions of any such refinancing, refunding, renewal or
extension Indebtedness (taken as a whole) are not materially less
favourable to the Credit Parties than the terms which are applicable to
such Indebtedness;
(n) advances made by any Canadian Credit Party to any other Credit Party;
(o) Indebtedness arising as a result of loans from a Borrower to HOC, or
from HOC to the Company, provided that no such loans shall be made
without the prior written consent of the Required Lenders (such consent
not to be unreasonably withheld);
(p) Bonding Obligations to the extent permitted by Section 7.3(f) below;
and
(q) guarantees by a Credit Party(s) (other than NSULC or any US Borrower)
of Indebtedness of a Credit Party(s) otherwise permitted hereby.
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SECTION 7.3 LIENS. Create, incur, assume or suffer to exist, any Lien on any of
its Property now owned or hereafter acquired to secure any Indebtedness of any
Credit Party or any other Person, other than (collectively, the "PERMITTED
LIENS"):
(a) Liens existing on the date hereof and set forth on Schedule 7.3 and
Liens securing any Indebtedness incurred to refinance, refund, renew or
extend the Indebtedness secured by Liens set forth on such Schedule 7.3
provided that the collateral subject to such Liens is not expanded;
(b) Liens securing the Lender Indebtedness;
(c) Liens for taxes, assessments or other governmental charges or levies
not yet due or which are being contested in good faith by appropriate
action or proceedings and with respect to which reserves required by
Section 6.2 hereof are maintained;
(d) statutory and contractual Liens of landlords and Liens of carriers,
warehousemen, mechanics, materialmen, repairmen, workmen, and other
Liens imposed by law created in the ordinary course of business for
amounts which are not past due for more than 60 days or which are being
contested in good faith by appropriate action or proceedings and with
respect to which reserves required by Section 6.2 are maintained;
(e) Liens incurred in connection with or deposits or pledges made in the
ordinary course of business in connection with workers' compensation,
unemployment insurance and other types of social security, old age or
other similar obligations;
(f) Liens incurred in connection with or deposits or pledges made in the
ordinary course of business to secure the performance of tenders,
statutory obligations, surety and appeal bonds, bids, government
contracts, performance and return-of-money bonds and other similar
obligations (exclusive of obligations for the payment of borrowed
money) (collectively, the "BONDING OBLIGATIONS") but not exceeding an
aggregate amount outstanding at any time of $75,000,000;
(g) minor irregularities in title, easements, rights-of-way, restrictions,
servitudes, permits, reservations, exceptions, conditions, covenants
and other similar charges or encumbrances not materially interfering
with the occupation, use and enjoyment by any Borrower of any of their
respective Real Property in the normal course of business or materially
impairing the value thereof;
(h) any obligations or duties affecting any of the Real Property of any
Credit Party to any municipality or public authority with respect to
any franchise, grant, license or permit which do not materially impair
the use of such Real Property for the purposes for which it is held;
(i) Liens securing Indebtedness permitted by Section 7.2(g) provided that
(1) such Liens do cover only the Property (which, for purposes of this
Section 7.3(i), shall not include inventory) being leased or acquired,
(2) the creation of such Lien or the incurrence of the
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Indebtedness secured by such Lien does not violate this Agreement or
any of the other Financing Documents and (3) in the case of any such
Lien securing purchase money Indebtedness, the principal amount of the
purchase money Indebtedness being secured does not exceed 80% of the
total purchase price of the Property being leased or acquired;
(j) exceptions, qualifications and reservations in respect of title to Real
Property under applicable federal, state, provincial, territorial,
municipal and local statutes, regulations, laws, by-laws and ordinances
but only to the extent of the general application of such matters and
not arising as a result of the failure of Borrowers to comply with such
matters;
(k) Liens on assets not forming part of the Collateral, securing
Indebtedness permitted by Section 7.2(l) or Section 7.2(m);
(l) Liens incurred in connection with pledges of cash collateral in an
aggregate amount not exceeding $8,000,000 to secure the obligations of
the Credit Parties under Swap Agreements existing on the Closing Date;
and
(m) deposits or pledges made to secure operating leases of real property or
newly acquired equipment entered into on a commercially reasonable
basis and on commercially reasonable terms and conditions;
provided, however, that the foregoing list of Permitted Liens is not intended
to, and shall not be construed as, subordinating or postponing, or as an
agreement to subordinate or postpone, any Lien created by any of the Financing
Documents to any such Permitted Lien.
SECTION 7.4 MERGERS, SALES, ETC. Merge into or with or consolidate or amalgamate
with, or permit any other Credit Party to merge into or with or consolidate or
amalgamate with, any other Person, or sell, lease or otherwise dispose of, or
permit any other Credit Party to sell, lease or otherwise dispose of (whether in
one transaction or in a series of transactions) all or any part of its Property
to any other Person. Notwithstanding the foregoing limitation (a) the Credit
Parties may sell inventory in the ordinary course of business, (b) any Credit
Party may sell, redeem or trade cash equivalent investments permitted under
Section 7.6, (c) any US Credit Party shall be permitted to consolidate,
amalgamate or merge into or with any US Operating Borrower, and any Canadian
Credit Party may consolidate, amalgamate or merge into or with any other
Canadian Credit Party, (d) any US Operating Borrower shall be permitted to sell,
assign or convey all or any part of its Property to any other US Operating
Borrower, but only so long as any such sale, assignment or conveyance is made
for reasonably equivalent value, provided that this clause (d) shall not be
interpreted to permit any US Operating Borrower Advance, other than as permitted
under Section 7.2(i), (e) and any Canadian Borrower shall be permitted to sell,
assign or convey all or any part of its Property to any other Canadian Borrower,
but only so long as any such sale, assignment or conveyance is made for
reasonably equivalent value, provided that this clause (e) shall not be
interpreted to permit any advance of Loan proceeds by any Canadian Borrower to
any other Credit Party, other than as permitted under Section 7.2(i), (f) the
Credit Parties may sell assets which are obsolete, worn out or not necessary to
the operations and business of the Credit Parties so long as the aggregate sale
price for all assets sold in any Fiscal Year does not
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exceed $10,000,000, (g) the Credit Parties may carry out the mergers,
consolidations, amalgamations and other transactions in the manner described in
the Permitted Reorganization; and (h) any Credit Party may sell or otherwise
dispose of any of its Property (other than, for greater certainty, any interest
that any Credit Party may have in any of NSLUC, GUSAP or PASUG) provided that:
(w) no Default has occurred and is continuing or would result therefrom; (x) the
applicable Credit Party has provided at least 10 days' notice to the
Administrative Agent and the Canadian Administrative Agent of the proposed sale
or other disposition together with the material terms and conditions thereof,
Borrowing Base Reports reflecting the proposed sale or other disposition on a
pro forma basis and such other information as the Administrative Agent or the
Canadian Administrative Agent, acting reasonably, may request; (y) if any of the
Property which is sold or otherwise disposed of consists of any accounts or
inventory, then an amount equal to the book value of such accounts or inventory
shall be paid to the Administrative Agent or the Canadian Administrative Agent
for application against the outstanding principal amount of the US Revolving
Loans (if such accounts and inventory were sold or otherwise disposed of by a US
Credit Party) or the Canadian Revolving Loans (if such accounts or inventory
were sold or otherwise disposed of by a Canadian Credit Party), in each case on
a pro rata basis and in accordance with Section 2.11; and (z) any such sale or
other disposition shall require the prior written consent of the Required
Lenders if the net book value of the Property subject to such sale or other
disposition, when aggregated with the book value of any other Property sold or
otherwise disposed of by the Credit Parties pursuant to this Section 7.4(h) in
the same Fiscal Year, would exceed $25,000,000.
SECTION 7.5 EQUITY DISTRIBUTIONS. Declare or pay any dividend, make any payment
to purchase, redeem, retire or otherwise acquire any of its Equity now or
hereafter outstanding, return any capital to its stockholders, partners or
members, or make any distribution of its assets, Equity, obligations or
securities to its stockholders, partners or members (an "EQUITY DISTRIBUTION"),
except that (a) the Company may declare and pay dividends with respect to its
Equity payable solely in additional Equity, (b) PASUG may pay dividends or other
payments in respect of its Equity solely to NSULC, or redeem or repurchase its
own Equity owned by NSULC, and NSULC may pay dividends or other payments in
respect of its Equity solely to GUSAP, or redeem or repurchase its own Equity
owned by GUSAP, in each case solely in connection with a repayment of US Loans,
and (c) any Credit Party other than the Company may make Equity Distributions to
any other Credit Party so long as, both before and immediately after giving
effect to the Equity Distribution, no Default has occurred and is continuing and
the Credit Party making the Equity Distribution is Solvent. Notwithstanding the
foregoing limitations, this section 7.5 shall not restrict payments or
distributions made in the ordinary course of business on account of "stock
appreciation rights", "phantom stock", "profit participations" and other similar
interests. Notwithstanding the foregoing limitations, the Company may make an
Equity Distribution if, both before and immediately after the Equity
Distribution, (i) no Default has occurred and is continuing and Excess
Availability is not less than $50,000,000, and (ii) the aggregate amount of all
such Equity Distributions made by the Company in any Fiscal Year shall not
exceed an amount equal to 50% of Consolidated Net Income of the Company and the
other Credit Parties as determined in accordance with GAAP for the immediately
preceding Fiscal Year.
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SECTION 7.6 INVESTMENTS, LOANS, ETC. Make, permit or hold any Investments in any
Person, or permit any other Credit Party to make, permit or hold any Investments
in any Person, other than:
(a) Investments listed on Schedule 7.6;
(b) Investments in 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;
(c) Investments in certificates with deposit of maturities less than one
year, issued by commercial banks in the United States or Canada having
capital and surplus in excess of $500,000,000 and having short-term
credit ratings of at least A1 and P1 by Standard & Poor's Ratings Group
and Moody's Investors Service, Inc., respectively;
(d) Investments in commercial paper with maturities of not more than 180
days rated the highest credit rating obtainable from Standard & Poor's
Ratings Group and Moody's Investors Service, Inc.;
(e) Investments in securities that are obligations of the United States or
Canadian government purchased by any Credit Party under fully
collateralized repurchase agreements pursuant to which arrangements are
made with selling financial institutions (being a financial institution
having unimpaired capital and surplus of not less than $500,000,000 and
with short-term credit ratings of at least A1 and P1 by Standard &
Poor's Ratings Group and Moody's Investors Service, Inc., respectively)
for such financial institutions to repurchase such securities within 30
days from the date of purchase by any Credit Party;
(f) Investments in money market mutual funds having assets in excess of
$2,000,000,000;
(g) Investments by any US Credit Party to or in any other US Credit Party
(subject, however, to the limitations set out in Section 7.2(i) in
respect of any such loans) and Investments by any Canadian Credit Party
to or in any other Credit Party;
(h) (1) Investments in direct obligations of, or obligations the principal
of and interest on which are unconditionally guaranteed by, the
Government of Canada or of any Canadian province (or by any agency
thereof to the extent such obligations are backed by the full faith and
credit of the Government of Canada or of such Canadian province), in
each case maturing within one year from the date of acquisition
thereof; (2) Investments in commercial paper maturing within 180 days
from the date of acquisition thereof and having, at such date of
acquisition, the highest credit rating obtainable from CBRS Inc.,
Dominion Bond Rating Service, Moody's Investor Service, Inc. or
Standard and Poor's Corporation; (3) Investments in certificates of
deposit, banker's acceptances and time deposits maturing within 180
days from the date of acquisition thereof issued or
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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 Canada or of any Canadian province which has a
combined capital surplus and undivided profits of not less than
C$250,000,000; and (4) Investments in fully collateralized repurchase
agreements with a term of not more than 30 days for securities
described in clause (1) above and entered into with a financial
institution satisfying the criteria described in clause (3) above;
(i) Investments by a Credit Party in order to fund a Permitted Acquisition,
provided that no such Investment shall be made unless, both before and
immediately after giving effect to any such Investment, no Default
shall have occurred and be continuing and Excess Availability is not
less than $50,000,000;
(j) Investments comprising loans made by a Credit Party to any employee,
officer or director of such Credit Party, provided that the aggregate
outstanding principal balance of all such loans made by all of the
Credit Parties shall not at any time exceed $1,000,000;
(k) Investments constituting an Acquisition paid for solely with common
Equity or the proceeds of common Equity of the Company issued after the
Closing Date for the purpose of funding such Acquisition, provided that
such Acquisition is a Permitted Equity Acquisition;
(l) other Investments not to exceed an aggregate of $30,000,000 plus 50% of
cumulative Consolidated Net Income after the Closing Date, provided
that no such Investment shall be made unless, both before and
immediately after giving effect to any such Investment, no Default
shall have occurred and be continuing and Excess Availability is not
less than $50,000,000, it being acknowledged and agreed that GUSAP
shall be entitled to be the holder of Investments made pursuant to this
Section 7.6(l) in an amount not to exceed $10,000,000 at any time; and
(m) Investments in the nature of guarantees permitted by Section 7.2(b) or
Section 7.2(q).
Notwithstanding the foregoing, Investments of the type described in
clauses (b), (c), (d), (e), (f) and (h) shall not be permitted to be made or
maintained (1) by any Canadian Borrower at any time that the outstanding
principal balance of all Canadian Loans is $10,000,000 or greater (based on the
Dollar Equivalent of any C$ Denominated Loans on the date of determination), or
(2) by any US Borrower at any time that the aggregate outstanding principal
balance of all US Loans is $10,000,000 or greater, (3) by any Borrower at any
time that the aggregate outstanding principal balance of all Loans is
$15,000,000 or greater or (4) unless a validly perfected first-priority Lien in
such Investments has been granted by the applicable Borrower in favour of the
Administrative Agent or the Canadian Administrative Agent, as applicable.
SECTION 7.7 SALES AND LEASEBACKS. Enter into, any arrangement, directly or
indirectly, with any Person whereby any Credit Party shall sell or transfer any
Property, whether now owned or hereafter acquired, and whereby any Credit Party
shall then or thereafter rent or lease as lessee
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such Property or any part thereof or other Property which a Credit Party intends
to use for substantially the same purpose or purposes as the Property sold or
transferred.
SECTION 7.8 NATURE OF BUSINESS. Engage in, or permit any other Credit Party to
engage in, any business other than the businesses in which they are engaged as
of the Closing Date or that are related, complementary or ancillary thereto.
SECTION 7.9 ERISA/PENSION COMPLIANCE.
(a) Engage in, or permit any ERISA Affiliate to engage in, any transaction
in connection with which any US Credit Party or any ERISA Affiliate
could be subjected to either a civil penalty assessed pursuant to
Sections 502(c), (i) or (l) of ERISA or a tax imposed by Chapter 43 of
Subtitle D of the Code which could reasonably be expected to have a
Material Adverse Effect;
(b) Terminate, or permit any other US Credit Party or any ERISA Affiliate
to terminate, any Plan in a manner, or take any other action with
respect to any Plan, which would reasonably be expected to result in
any material liability of any US Credit Party or any ERISA Affiliate to
the PBGC or any other Governmental Authority;
(c) Fail to make, or permit any other US Credit Party or any ERISA
Affiliate to fail to make, full payment when due of all amounts which,
under the provisions of any Plan, agreement relating thereto or
applicable law, any US Credit Party or any ERISA Affiliate is required
to pay as contributions thereto (excluding non-payment or late payment
of an amount that is not material);
(d) Fail to make a required contribution to any Plan which may result in
the imposition of a Lien as described in Section 412(n) of the Code;
(e) Fail to pay, or cause to be paid, to the PBGC in a timely manner, and
without incurring any late payment or underpayment charge or penalty,
all premiums required pursuant to Sections 4006 and 4007 of ERISA,
except where such failure could not reasonably be expected to have
Material Adverse Effect;
(f) Amend, or permit any other US Credit Party or any ERISA Affiliate to
amend, a Plan resulting in an increase in current liability such that
any US Credit Party or any ERISA Affiliate is required to provide
security to such Plan under Section 401(a)(29) of the Code; or
(g) Incur, or permit any other US Credit Party or any ERISA Affiliate to
incur, a material liability to or on account of a Plan under Sections
515, 4062, 4063, 4064, 4201 or 4204 of ERISA.
(h) As regards to any Canadian Party:
(1) Terminate, or permit the termination of, any Plan in a manner,
or take any other action with respect to any Plan, which could
reasonably be expected to result in
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any material liability of such Canadian Credit Party to any
Governmental Authority;
(2) Fail to make, or permit any other Canadian Credit Party to
fail to make, full payment when due of all amounts which,
under the provisions of any Plan, agreement relating thereto
or applicable law, such Canadian Credit Party is required to
pay as contributions thereto, except where the failure to make
such payments could not reasonably be expected to have
Material Adverse Effect;
(3) contribute to or assume an obligation to contribute to, or
permit any Subsidiary to contribute to or assume an obligation
to contribute to, any "multi-employer pension plan" as such
term is defined in the Pension Benefits Act (Ontario).
SECTION 7.10 SALE OR DISCOUNT OF RECEIVABLES. Sell, or allow any other Credit
Party to sell, with or without recourse, for discount or otherwise, any
accounts, other than in connection with a sale or other disposition permitted by
Section 7.4.
SECTION 7.11 NEGATIVE PLEDGE AGREEMENTS. Create, incur, assume or suffer to
exist, any contract, agreement or understanding which in any way prohibits or
restricts the granting, conveying, creation or imposition of any Lien on any
Property of any Credit Party, or which requires the consent of or notice to
other Persons in connection therewith, other than (a) this Agreement and the
other Financing Documents, (b) any agreements governing any purchase money Liens
or Capital Lease Obligations otherwise permitted hereby provided that any such
prohibition or limitation is only effective against the Property financed
thereby, and (c) the 144A Indenture and any agreements governing any
Indebtedness incurred pursuant to any of Sections 7.2(c),(l) or (m).
SECTION 7.12 TRANSACTIONS WITH AFFILIATES. 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) on terms and conditions not less favourable to it than
could be obtained on an arm's-length basis from unrelated third parties, and (b)
to the extent not prohibited herein. Neither the Company nor the Borrowers will
enter into any transaction or series of transactions, or permit any Credit Party
to enter into any transaction or series of transactions, with their respective
Affiliates which involve an outflow of money or other Property from a Credit
Party to an Affiliate who is not a Credit Party, including repayment of
Indebtedness of an Affiliate who is not a Credit Party, or payment of management
fees, affiliation fees, administration fees, compensation, salaries, asset
purchase payments or any other type of fees or payments similar in nature, other
than on terms and conditions substantially as favourable to the Credit Parties
as would be obtainable by the Credit Parties in a reasonably comparable
arm's-length transaction with a Person not an Affiliate, provided, however,
that, in any event, the aggregate amount of all management fees, affiliation
fees, administration fees and other similar fees (i) paid by the Credit Parties
in any Fiscal Year to an Affiliate who is not a Credit Party shall not exceed
$1,000,000, and (ii) paid by the US Credit Parties in any Fiscal Year to the
Canadian Credit Parties shall not exceed $5,000,000 (excluding reasonable
allocations of overhead costs and other shared expenses among Credit Parties).
The foregoing restrictions shall not apply to: (i) the payment of reasonable and
customary fees to directors of a
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Credit Party who are not employees of such Credit Party, (ii) any other
transaction with any employee, officer or director of a Credit Party pursuant to
employee profit sharing and/or benefit plans and compensation and
non-competition arrangements in amounts customary for corporations similarly
situated to such Credit Party and entered into in the ordinary course of
business and approved, in respect of officers and directors, by the board of
directors of such Credit Party, or (iii) any reimbursement of reasonable
out-of-pocket costs incurred by an Affiliate of a Credit Party on behalf of or
for the account of such Credit Party.
SECTION 7.13 UNCONDITIONAL PURCHASE OBLIGATIONS. Except for take-or-pay
contracts for the purchase of electricity entered into the ordinary course of
business, enter into or be a party to, or permit any other Credit Party to enter
into or be a party to, any material contract for the purchase of materials,
supplies or other property or services, if such contract requires that payment
be made by it regardless of whether or not delivery is ever made of such
materials, supplies or other property or services.
SECTION 7.14 EQUITY. After the Closing Date, authorize or issue, or permit any
other Credit Party to authorize or issue Equity to any Person other than (i)
issuances of Equity of the Company if no Change of Control results therefrom,
and (ii) issuance of Equity by any other Credit Party to any of the Borrowers or
other Credit Parties.
SECTION 7.15 CAPITAL EXPENDITURES. Make, or permit any other Credit Party to
make, Capital Expenditures in any Fiscal Year in excess of the limits set forth
below for such Fiscal Year (which limits apply in the aggregate for all Credit
Parties); provided that no Capital Expenditures shall be made (and no Borrower
or other Credit Party shall enter into any commitment to make any Capital
Expenditure) if, before or after giving effect to the making of such Capital
Expenditure (or entering into such Commitment), a Default exists or would result
therefrom.
FISCAL YEAR AMOUNT
- ----------- -----------
Fiscal Year ending December 31, 2003 $ 75,000,000
Fiscal Year ending December 31, 2004 $ 90,000,000
Fiscal Year ending December 31, 2005 $110,000,000
Fiscal Year ending December 31, 2006 $110,000,000
Fiscal Year ending December 31, 2007 $110,000,000
Fiscal Year ending December 31, 2008 $110,000,000
Up to $20,000,000 of the amount listed above for any Fiscal Year which is not
expended in such Fiscal Year may be carried forward and expended during the next
Fiscal Year (but not during any other Fiscal Year).
SECTION 7.16 [INTENTIONALLY DELETED.]
SECTION 7.17 ACQUISITIONS; CREATION OF SUBSIDIARIES. (1) Make any Acquisition,
other than a Permitted Acquisition or (2) create any Subsidiary unless (i) such
Subsidiary is a wholly owned
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Subsidiary of a Credit Party and the shares in the capital of such Subsidiary
have been pledged to the Administrative Agent or the Canadian Administrative
Agent, as applicable, pursuant to the applicable Security Instruments; and (ii)
such Subsidiary shall have executed and delivered a counterpart to the
applicable Security Instruments and such other agreements, documents and
instruments as the Administrative Agent or the Canadian Administrative Agent may
reasonably request, in each case in form and substance satisfactory to the
Administrative Agent and the Lenders. Notwithstanding that an acquisition is a
Permitted Acquisition, the Borrowers shall not be permitted to include in the US
Borrowing Base or the Canadian Borrowing Base any components which would, but
for this Section 7.17, be included therein until the conditions set out in the
last sentence of the definition of "Permitted Acquisition" has been satisfied.
SECTION 7.18 ACCOUNTS. Neither the Borrowers nor any other Credit Parties will
maintain accounts with any bank or other depository institution or otherwise
maintain cash or cash equivalents other than (a) as permitted by Section 7.6
hereof (which shall be subject to Liens therein in favour of the Administrative
Agent and the Canadian Administrative Agent), (b) the Disbursement Accounts and
Blocked Accounts maintained with the Canadian Lockbox Bank and the US Lockbox
Bank, (c) those accounts identified in Schedule 7.18 hereto on the Closing Date,
(d) those accounts maintained with an Eligible Institution but only so long as a
first-priority Lien therein has been perfected in favour of the Administrative
Agent or the Canadian Administrative Agent, as applicable, (e) the PASUG Payment
Account, the NSULC Payment Account and the GUSAP Payment Account, and (f)
payroll accounts maintained in the ordinary course of business. In no event will
the Borrowers maintain in any payroll account permitted pursuant to this Section
7.18 funds in an amount in excess of the aggregate payroll for one pay period
for the employees of such Borrowers paid from such accounts.
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SECTION 7.19 OTHER RESTRICTIVE AGREEMENTS. 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 any Credit Party
(other than the Company) to pay dividends or other distributions with respect to
any Equity or with respect to, or measured by, its profits or to make or repay
loans or advances to any other Credit Party or to provide a guarantee of any
Indebtedness of the Borrowers or any other Credit Party, (b) the ability of the
Borrowers to make any loan or advance to any other Borrower, or (c) the ability
of a Credit Party to sell, lease or transfer any of its property to another
Credit Party or any of the wholly-owned Subsidiaries ; provided that (i) the
foregoing shall not apply to restrictions and conditions imposed by applicable
law, by this Agreement or by the 144A Indenture, (ii) the foregoing shall not
apply to restrictions and conditions imposed by any agreements governing any
Indebtedness incurred pursuant to any of Sections 7.2(c),(l) or (m), (iii) the
foregoing shall not apply to customary restrictions and conditions contained in
agreements relating to the sale of a Credit Party pending such sale, provided
such restrictions and condition apply only to the Credit Party that is to be
sold and such sale is permitted hereunder, (iv) the foregoing clause (c) shall
not apply to any agreement setting forth customary restrictions on the
subletting, assignment, or transfer of any Property that is a lease, license,
conveyance or contract of similar Property, and (v) the foregoing clause (c)
shall not apply to any agreement, instrument or other document evidencing a
Permitted Lien from restricting on customary terms the transfer of any Property
subject to such Permitted Lien.
SECTION 7.20 MODIFICATIONS TO INDEBTEDNESS AGREEMENTS.
(a) Amend, modify, or waive any covenant contained in any instrument,
document or agreement governing the Indebtedness of the Credit Parties
set forth on Schedule 7.2 hereto if the effect of such amendment,
modification, or waiver would be to make the terms of such Indebtedness
(taken as a whole) materially more onerous to any Credit Party;
(b) Make any prepayment of, or optionally redeem, or make any payment in
defeasance of, or repurchase, any part of the Indebtedness of the
Credit Parties under the 144A Notes unless, at all times during the 30
days immediately before, and immediately after, giving effect to such
prepayment, optional redemption, payment in defeasance or repurchase
(i) Excess Availability is greater than $100,000,000, or (ii) Excess
Availability is greater than $70,000,000, (in which case the aggregate
amount of all such payments shall not exceed $20,000,000).
SECTION 7.21 FISCAL YEAR. Change its Fiscal Year without the prior written
consent of the Administrative Agent.
SECTION 7.22 MODIFICATION OF 144A DOCUMENTS. Amend, modify or waive any
provision of any of the 144A Documents if the effect of such amendment,
modification or waiver would be to advance the scheduled payment dates for the
144A Notes, to increase the rate of interest payable under the 144A Notes, or to
effect any other change which could reasonably be expected to be materially
adverse to the interests of the Lenders (including granting a Lien over any
Property of any Credit Party to secure the 144A Notes).
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ARTICLE 8
EVENTS OF DEFAULT
Upon the occurrence and during the continuance of any of the
following specified events (each an "EVENT OF DEFAULT"):
SECTION 8.1 PAYMENTS. Any of the Borrowers shall fail to pay when due
(including, but not limited to, any mandatory prepayment required pursuant to
Section 2.11) any principal or any interest of any Loan or any Note, or any
Reimbursement Obligation or any fee or any other amount payable hereunder or
under the Fee Letter or any other Financing Document;
SECTION 8.2 OTHER COVENANTS. Any Borrower shall fail to observe or perform any
covenant or agreement contained in Sections 6.1(b), 6.5, 6.7, 6.10(g)(1),
6.10(h)(2), 6.11, 6.12 or Article 7;
SECTION 8.3 OTHER FINANCING DOCUMENT OBLIGATIONS. Any Borrower shall fail to
observe or perform any covenant, condition or agreement contained in this
Agreement (other than those specified in Section 8.1 or Section 8.2) or any
Credit Party shall fail to observe or perform any covenant, condition or
agreement contained any Financing Document other than this Agreement and such
failure continues unremedied, in the case of Section 6.10(d)(II), for a period
of five (5) days after the earlier of (i) written notice thereof from the
Administrative Agent to the Company, and (ii) the date on which a Credit Party
becomes aware of such failure, and in all other cases, for a period of ten (10)
days after the earlier of (y) written notice thereof from the Administrative
Agent to the Company, and (z) the date on which a Credit Party becomes aware of
such failure;
SECTION 8.4 REPRESENTATIONS. Any representation, warranty or statement made or
deemed to be made by any Borrower or any other Credit Party or any of any
Borrower's or any other Credit Party's officers herein or in any other Financing
Document, or in any certificate, request or other document furnished pursuant to
or under this Agreement or any other Financing Document, shall have been
incorrect in any respect as of the date when made or deemed to be made;
SECTION 8.5 NON-PAYMENTS OF OTHER INDEBTEDNESS. Any Credit Party shall fail to
make any payment or payments of principal of or interest on any Indebtedness of
such Credit Party which Indebtedness is in an aggregate amount of $10,000,000 or
greater after giving effect to any applicable grace period;
SECTION 8.6 DEFAULTS UNDER OTHER AGREEMENTS. Any Credit Party shall fail to
observe or perform any covenant or agreement contained in any agreement(s) or
instrument(s) relating to Indebtedness of any Credit Party of $10,000,000 or
more in the aggregate within any applicable grace period, or any other event
shall occur, if the effect of such failure or other event is to accelerate, or
to permit the holder of such Indebtedness or any other Person to accelerate, the
maturity of $10,000,000 or more in the aggregate of such Indebtedness; or
$10,000,000 or more in the aggregate of any such Indebtedness shall be, or if as
a result of such failure or other event may be, required to be prepaid (other
than prepayments resulting from excess cash flow) in whole or in part prior to
its stated maturity;
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SECTION 8.7 BANKRUPTCY UNDER US LAW. Any Credit Party shall commence a voluntary
case concerning itself under Title 11 of the United States Code entitled
"Bankruptcy" as now or hereafter in effect, or any successor thereto (the
"BANKRUPTCY CODE"); or an involuntary case is commenced against any Credit Party
and the petition is not controverted within ten days, or is not stayed or
dismissed within 60 days, after commencement of the case; or a custodian (as
defined in the Bankruptcy Code) is appointed for, or takes charge of, all or any
substantial part of the property of any Credit Party; or any Credit Party
commences any other proceeding under any reorganization, arrangement, adjustment
of debt, relief of debtors, dissolution, insolvency or liquidation or similar
law of any jurisdiction whether now or hereafter in effect relating to any
Credit Party or there is commenced against any Credit Party any such proceeding
which remains unstayed or undismissed for a period of 60 days; or any Credit
Party is adjudicated insolvent or bankrupt; or any order of relief or other
order approving any such case or proceeding is entered; or any Credit Party
suffers any appointment of any custodian or the like for it or any substantial
part of its Property to continue undischarged or unstayed for a period of 60
days; or any Credit Party makes a general assignment for the benefit of
creditors; or any Credit Party shall fail to pay, or shall state in writing that
it is unable to pay, or shall be unable to pay, its debts generally as they
become due; or any Credit Party shall by any act or failure to act indicate its
consent to, approval of or acquiescence in any of the foregoing; or any
corporate action is taken by any Credit Party for the purpose of effecting any
of the foregoing;
SECTION 8.8 BANKRUPTCY UNDER CANADIAN LAW.
(a) Any Canadian Credit Party (1) becomes insolvent, or generally does not
or becomes unable to pay its debts or meet its liabilities as the same
become due, or admits in writing its inability to pay its debts
generally, or declares any general moratorium on its indebtedness, or
proposes a compromise or arrangement between it and any class of its
creditors; (2) commits an act of bankruptcy under the Bankruptcy and
Insolvency Act (Canada), or makes an assignment of its property for the
general benefit of its creditors under such Act, or makes a proposal
(or files a notice of its intention to do so) under such Act; (3)
institutes any proceeding seeking to adjudicate it an insolvent, or
seeking liquidation, dissolution, winding-up, reorganization,
compromise, arrangement, adjustment, protection, moratorium, relief,
stay of proceedings of creditors generally (or any class of creditors),
or composition of it or its debts or any other relief, under any
federal, provincial or foreign Law now or hereafter in effect relating
to bankruptcy, winding-up, insolvency, reorganization, receivership,
plans of arrangement or relief or protection of debtors (including the
Bankruptcy and Insolvency Act (Canada), the Companies' Creditors
Arrangement Act (Canada) and any applicable corporations legislation)
or at common law or in equity, or files an answer admitting the
material allegations of a petition filed against it in any such
proceeding; (4) applies for the appointment of, or the taking of
possession by, a receiver, interim receiver, receiver/manager,
sequestrator, conservator, custodian, administrator, trustee,
liquidator or other similar official for it or any substantial part of
its property; or (5) takes any action, corporate or otherwise, to
approve, effect, consent to or authorize any of the actions described
in this Section 8.8, or otherwise acts in furtherance thereof or fails
to act in a timely and appropriate manner in defense thereof; or
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(b) Any petition is filed, application made or other proceeding instituted
against or in respect of any Canadian Credit Party: (1) seeking to
adjudicate it an insolvent; (2) seeking a receiving order against it
under the Bankruptcy and Insolvency Act (Canada); (3) seeking
liquidation, dissolution, winding-up, reorganization, compromise,
arrangement, adjustment, protection, moratorium, relief, stay of
proceedings of creditors generally (or any class of creditors), or
composition of it or its debts or any other relief under any federal,
provincial or foreign Law now or hereafter in effect relating to
bankruptcy, winding-up, insolvency, reorganization, receivership, plans
of arrangement or relief or protection of debtors (including the
Bankruptcy and Insolvency Act (Canada), the Companies' Creditors
Arrangement Act (Canada) and any applicable corporations legislation)
or at common law or in equity; or (4) seeking the entry of an order for
relief or the appointment of, or the taking of possession by, a
receiver, interim receiver, receiver/manager, sequestrator,
conservator, custodian, administrator, trustee, liquidator or other
similar official for it or any substantial part of its property; and in
any case describe in clause (b)(1) through (4) such petition,
application or proceeding continues undismissed, or unstayed and in
effect, for a period of 60 days after the institution thereof, provided
that if an order, decree or judgment is granted or entered (whether or
not entered or subject to appeal) against any Canadian Credit Party
thereunder in the interim, such 60-day period will cease to apply, and
provided further that if any Canadian Credit Party files an answer
admitting the material allegations of a petition filed against it in
any such proceeding, such 60-day period will cease to apply;
SECTION 8.9 MONEY JUDGMENT. Judgments or orders for the payment of money
involving in the aggregate at any time a liability (net of any insurance
proceeds or indemnity payments actually received in respect thereof prior to or
within 30 days from the entry thereof of more than $3,000,000 (or the Dollar
Equivalent thereof), or that could reasonably be expected to have a Material
Adverse Effect shall be rendered against any Credit Party and such judgment or
order shall continue unsatisfied in accordance with the terms of such judgment
or order and in effect for a period of 30 days during which execution shall not
be effectively discharged, stayed or deferred (whether by action of a court, by
agreement or otherwise);
SECTION 8.10 FINANCING DOCUMENTS. Any provision of any of the Financing
Documents after delivery thereof shall for any reason cease to be in full force
and effect and valid, binding and enforceable (except as enforceability may be
limited as stated in Section 5.3) in accordance with its terms, or, in the case
of any of the Security Instruments, cease to create a valid and perfected Lien
of the priority contemplated thereby on any of the collateral purported to be
covered thereby, or any Credit Party shall so state in writing;
SECTION 8.11 NON-MONETARY JUDGMENT. One or more final judgments, not involving
the payment of money has been rendered against any Credit Party, the result of
which could reasonably be expected to result in a Material Adverse Effect;
SECTION 8.12 ASSET SEIZURES. Any property of any Credit Party having a fair
market value in excess of $3,000,000 (or its then equivalent in any other
currency) in the aggregate is seized (including by way of execution, attachment,
garnishment, levy or distraint), or any Lien thereon securing Indebtedness in
excess of $3,000,000 (or its then equivalent in any other currency) is
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enforced, or such property has become subject to any charging order or equitable
execution of a Governmental Authority, or any writ of execution or distress
warrant exists in respect of any Credit Party or the property of any of them, or
any sheriff or other Person becomes lawfully entitled by operation of law or
otherwise to seize or distrain upon such property and in any case such seizure,
enforcement, execution, attachment, garnishment, distraint, charging order or
equitable execution, or other seizure or right, continues in effect and is not
released or discharged for more than 30 days or such longer period during which
entitlement to the use of such property continues with any Credit Party, and the
Credit Party is contesting the same in good faith and by appropriate
proceedings, provided that if the property is removed from the use of the Credit
Party or is sold in the interim, such grace period will cease to apply;
SECTION 8.13 CHANGE OF CONTROL. The occurrence of a Change of Control; or
SECTION 8.14 MATERIAL ADVERSE CHANGE. The occurrence of a Material Adverse
Change; provided that changes in general economic conditions or general industry
conditions shall not constitute a Material Adverse Change for the purposes of
this Section 8.14,
then, and in any such event, and at any time thereafter, if any Event of Default
shall then be continuing, the Administrative Agent or the Canadian
Administrative Agent, upon the written request of the Required Lenders, shall,
by written notice to the Borrowers, take any or all of the following actions,
without prejudice to the rights of the Administrative Agent, the Canadian
Administrative Agent, any Lender or the holder of any Note, to enforce its
claims against any Credit Party: (i) declare the Revolving Credit Commitments,
the US Swingline Commitments, the Canadian Swingline Commitments and other
lending obligations, if any, terminated, whereupon the Revolving Credit
Commitments and other lending obligations, if any, of each Lender hereunder
shall terminate immediately; or (ii) declare the entire principal amount of and
all accrued interest on all Lender Indebtedness then outstanding to be,
whereupon the same shall become, forthwith due and payable without presentment,
demand, protest, notice of protest or dishonor, notice of acceleration, notice
of intent to accelerate or other notice of any kind, all of which are hereby
expressly waived by each Credit Party, and thereupon take such action as it may
deem desirable under and pursuant to the Financing Documents; provided, that, if
an Event of Default specified in Section 8.7 or Section 8.8 shall occur, the
result which would occur upon the giving of written notice by the Administrative
Agent or the Canadian Administrative Agent to the Borrowers, as specified in
clauses (i) and (ii) above, shall occur automatically without the giving of any
such notice; or (iii) if any US Letter of Credit shall then be outstanding,
demand L/C Cover which the US Borrowers shall immediately pay to the
Administrative Agent for deposit in a cash collateral account maintained by the
Administrative Agent; or (iv) if any Canadian Letter of Credit shall then be
outstanding, demand L/C Cover which the Canadian Borrower shall immediately
jointly and severally pay to the Canadian Administrative Agent for deposit in a
cash collateral account maintained by the Canadian Administrative Agent. Without
limiting the foregoing, if any Event of Default shall then be continuing, the
Administrative Agent or the Canadian Administrative Agent may, and at the
request of the Required Lenders, shall (i) reduce the Commitments, (ii) restrict
the amount of further Loans or refuse to make any further Loans, or add new
limitations on the Borrowing Base, (iii) limit Letter of Credit availability,
(iv) apply the default interest rate contemplated by Section 2.6(e), (v)
exercise dominion and control
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over Blocked Accounts, (vi) require the establishment of new Lockboxes, one for
each US Operating Borrower, (vii) require cash collateral for Letters of Credit,
(viii) exercise any other remedies available in the other Financing Documents,
including foreclosure upon and sale of Collateral, and (ix) exercise any other
remedies as may be available at law or in equity. Following any Event of
Default, the Agents shall have the right, at their sole discretion, to make
Agent Advances as provided in Section 2.28(a).
ARTICLE 9
AGENTS
SECTION 9.1 APPOINTMENT OF AGENTS. Each Lender (and each Secured Affiliate and
Cash Management Affiliate, by and through its affiliated Lender) and each
Issuing Bank hereby designates The CIT Group/Business Credit, Inc. as
Administrative Agent, and CIT Business Credit Canada Inc., as Canadian
Administrative Agent, as herein specified and as specified in the other
Financing Documents. Each Lender (and each Secured Affiliate and Cash Management
Affiliate by and through its affiliated Lender) and each Issuing Bank hereby
irrevocably authorizes each of the Administrative Agent and the Canadian
Administrative Agent to take such action on its behalf under the provisions of
this Agreement, the Notes, and the other Financing Documents and to exercise
such powers and to perform such duties hereunder and thereunder as are
specifically delegated to or required of the Administrative Agent and the
Canadian Administrative Agent by the terms hereof and thereof and such other
powers as are reasonably incidental thereto. The CIT Group/Business Credit, Inc.
agrees to act as Administrative Agent hereunder, and CIT Business Credit Canada
Inc. agrees to act as Canadian Administrative Agent, in each case on the express
terms and conditions contained in this Article 9. Each of the Agents may perform
any of its duties hereunder by or through its agents, employees or
attorneys-in-fact, and shall be entitled to advice of counsel concerning all
matters pertaining to such duties. The provisions of this Article 9 are solely
for the benefit of the Agents, and the Lenders, the Lender's Affiliates, the
Borrowers and the other Credit Parties shall have no rights as third party
beneficiaries of any of the provisions contained herein. Except as expressly
otherwise provided in this Agreement and the other Financing Documents, the
Administrative Agents shall have and may use their sole discretion with respect
to exercising or refraining from exercising any discretionary rights or taking
or refraining from taking any actions which either of the Agents is entitled to
take or assert under this Agreement and the other Financing Documents, including
(a) the determination of the applicability of ineligibility criteria with
respect to calculation of any portion of the US Borrowing Base or the Canadian
Borrowing Base, (b) the making of Agent Advances pursuant to Section 2.28, and
(c) the exercise of remedies hereunder and under the other Financing Documents.
Any action so taken or not taken shall be deemed to be consented to by the
Lenders.
SECTION 9.2 LIMITATION OF DUTIES OF AGENTS. Notwithstanding anything to the
contrary contained in this Agreement or any of the other Financing Documents,
neither of the Agents shall have any duties or responsibilities except those
expressly set forth in this Agreement and as specified in the other Financing
Documents. Neither of the Agents nor any of their respective officers,
directors, employees or agents shall be liable for any action taken or omitted
by it as such hereunder or in connection herewith, unless caused by its or their
gross negligence or
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willful misconduct. The duties of each of the Agents shall be mechanical and
administrative in nature; no Agent shall have by reason of this Agreement a
fiduciary relationship in respect of any Lender; and nothing in this Agreement,
expressed or implied, is intended to or shall be so construed as to impose upon
any Agent any obligations in respect of this Agreement except as expressly set
forth herein.
SECTION 9.3 LACK OF RELIANCE ON THE AGENTS.
(a) INDEPENDENT INVESTIGATION. Independently and without reliance upon
either of the Agents, each Lender hereby acknowledges that, by becoming
a party to this Agreement as a Lender hereunder, to the extent it deems
appropriate, it has made and shall continue to make its own independent
investigation of the financial condition and affairs of the Credit
Parties in connection with the taking or not taking of any action in
connection herewith, and its own appraisal of the creditworthiness of
the Credit Parties, and, except as expressly provided in this
Agreement, and the other Financing Documents, neither of the Agents
shall have any responsibility, either initially or on a continuing
basis, to provide any Lender with any credit or other information with
respect thereto, whether coming into its possession before the
consummation of the transactions contemplated herein or at any time or
times thereafter.
(b) AGENTS NOT RESPONSIBLE. Neither of the Agents shall be responsible to
any Lender or any Issuing Bank for any recitals, statements,
information, representations or warranties herein or in any document,
certificate or other writing delivered in connection herewith or for
the execution, effectiveness, genuineness, validity, enforceability,
collectability, priority or sufficiency of this Agreement, the Notes,
the Letters of Credit or the other Financing Documents or the financial
condition of any Credit Party or be required to make any inquiry
concerning either the performance or observance of any of the terms,
provisions or conditions of this Agreement, the Notes or the other
Financing Documents, or the financial condition of any Credit Party, or
the existence or possible existence of any Default or Event of Default.
SECTION 9.4 CERTAIN RIGHTS OF THE AGENTS. If either of the Agents shall request
instructions from the Required Lenders with respect to any act or action
(including the failure to act) in connection with this Agreement, the Notes and
the other Financing Documents, then it shall be entitled to refrain from such
act or taking such action unless and until it shall have received instructions
from the Required Lenders; and neither of the Agents shall incur such liability
to any Person by reason of so refraining. Without limiting the foregoing, no
Lender shall have any right of action whatsoever against either of the Agents as
a result of the Administrative Agent or the Canadian Administrative Agent, as
applicable, acting or refraining from acting under this Agreement, the Notes and
the other Financing Documents in accordance with the instructions of the
Required Lenders, or to the extent required by Section 10.2, all of the Lenders.
SECTION 9.5 RELIANCE BY AGENTS. Each of the Agents shall be entitled to rely,
and shall be fully protected in relying, upon any note, writing, resolution,
notice, statement, certificate, telex, teletype or telecopier message,
cablegram, radiogram, order or other documentary teletransmission or telephone
message believed by it to be genuine and correct and to have been
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signed, sent or made by the proper Person. Each of the Agents may consult with
legal counsel (including counsel for any Credit Party), independent public
accountants and other experts selected by it and shall not be liable for any
action taken or omitted to be taken by it in good faith in accordance with the
advice of such counsel, accountants or experts. Each of the Agents shall in all
cases be fully protected in acting, or in refraining from acting, under this
Agreement or any of the other Financing Documents in accordance with a request
or consent of the Required Lenders (or all or any portion of the Lenders, as
required under Section 10.2) and such request and any action taken or any
failure to act pursuant thereto shall be binding upon all of the Lenders.
SECTION 9.6 NOTICE OF DEFAULT. Neither of the Agents shall be deemed to have
knowledge or notice of the occurrence of any Default, unless the Agents shall
have received written notice from a Lender or a Borrower referring to this
Agreement, describing such Default and stating that such notice is a "notice of
Default". The Agents will notify the Lenders of their receipt of any such
notice, and the Agents shall take such action with respect to such Default as
may be requested by the Required Lenders in accordance with Article 8 hereof;
provided, however, that unless and until the Agents have received any such
request, the Agents, or either of them, may (but shall not be obligated to) take
such action, or refrain from taking such action, with respect to such Default as
the Agents, or either of them, shall deem advisable.
SECTION 9.7 INDEMNIFICATION OF AGENTS. To the extent either of the Agents is not
reimbursed and indemnified by the Borrowers, each Lender will reimburse and
indemnify each of the Agents in accordance with its Credit Percentage for and
against any and all liabilities, obligations, losses, damages, penalties,
actions, judgments, suits, costs, expenses (including reasonable counsel fees
and disbursements) or disbursements of any kind or nature whatsoever which may
be imposed on, incurred by or asserted against such Agent, or either of them, in
performing its duties hereunder, in any way relating to or arising out of this
Agreement; provided that no Lender shall be liable to the Agents for any portion
of such liabilities, obligations, losses, damages, penalties, actions,
judgments, suits, costs, expenses or disbursements resulting from, as to such
Agents, such Agents' gross negligence or willful misconduct. The undertakings in
this Section 9.7 shall survive the payment of all Lender Indebtedness hereunder
and the resignation or replacement of either or both of the Agents.
SECTION 9.8 AGENTS IN THEIR INDIVIDUAL CAPACITY. With respect to its obligations
under this Agreement, the Loans made by it and the Notes issued to it, each of
the Agents and its Affiliates shall have the same rights and powers hereunder as
any other Lender or Lender Affiliate or holder of a Note and may exercise the
same as though it were not performing the duties, if any, specified herein; and
the terms "Required Lenders," "holders of Notes" or any similar terms shall,
unless the context clearly otherwise indicates, include each of the Agents in
its individual capacity. Each of the Agents may accept deposits from, lend money
to, and generally engage in any kind of banking, trust, financial advisory or
other business with any Credit Party or any Affiliate of any Credit Party as if
it were not performing the duties, if any, specified herein, and may accept fees
and other consideration from any Credit Party for services in connection with
this Agreement and otherwise without having to account for the same to the
Lenders.
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SECTION 9.9 MAY TREAT LENDER AS OWNER. Each Borrower, each Agent and each
Issuing Bank may deem and treat each Lender as the owner of such Lender's
Commitments, Loans, Notes and other interests hereunder for all purposes hereof
unless and until a written notice of the assignment or transfer thereof shall
have been filed with the Administrative Agent and the Canadian Administrative
Agent. Any request, authority or consent of any Person who at the time of making
such request or giving such authority or consent is the owner of a Note shall be
conclusive and binding on any subsequent owner, transferee or assignee of such
Note or any promissory note or notes issued in exchange therefor.
SECTION 9.10 PAYMENTS BY AGENTS TO LENDERS. All payments to be made by either of
the Agents to the Lenders shall be made by bank wire transfer or internal
transfer of immediately available funds to each Lender pursuant to wire transfer
instructions delivered in writing to the Administrative Agent or the Canadian
Administrative Agent, as applicable, on or prior to the Closing Date (or if such
Lender has become a Lender hereunder pursuant to Section 10.7(b), in the
applicable Assignment and Acceptance), or pursuant to such other wire transfer
instructions as each party may designate for itself by written notice to the
Administrative Agent or the Canadian Administrative Agent, as applicable.
Concurrently with each such payment, the Administrative Agent or the Canadian
Administrative Agent, as applicable, shall identify whether such payment (or any
portion thereof) represents principal, premium or interest on the Loans or
otherwise. Unless the Agents receive notice from the Company prior to the date
on which any payment is due to the Lenders that the Borrowers will not make such
payment in full as and when required, the Agents may assume that the Borrowers
have made such payment in full to the Agent or the Canadian Administrative
Agent, as applicable, on such date in immediately available funds and the Agents
may (but shall not be so required), in reliance upon such assumption, distribute
to each Lender on such due date an amount equal to the amount then due such
Lender. If and to the extent the Borrowers have not made such payment in full to
the Agents, each Lender shall repay to the Agents on demand such amount
distributed to such Lender, together with interest thereon at the Federal Funds
Rate for each day from the date such amount is distributed to such Lender until
the date repaid.
SECTION 9.11 RESTRICTIONS ON ACTIONS BY LENDERS; SHARING OF PAYMENTS.
(a) Each of the Lenders agrees that it shall not, unless it is specifically
requested to do so, set off against the Lender Indebtedness, any
amounts owing by such Lender to any Borrower or any other Credit Party,
or any accounts of any Borrower or any other Credit Party, in any such
case whether now or hereafter maintained with such Lender. Each of the
Lenders further agrees that it shall not, unless specifically requested
to do so by the Agents, take or cause to be taken any action to enforce
its rights under this Agreement or against the Borrowers and the other
Credit Parties, including the commencement of any legal or equitable
proceedings, to foreclose any Lien on, or otherwise enforce any
security interest in, any of the Collateral.
(b) If at any time or times any Lender shall receive (i) by payment,
foreclosure, setoff or otherwise, any proceeds of Collateral or any
payments with respect to the Lender Indebtedness owing to such Lender
arising under, or relating to, this Agreement or the
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other Financing Documents, except for any such proceeds or payments
received by such Lender from the Agents pursuant to the terms of this
Agreement, or (ii) payments from the Agents in excess of such Lender's
ratable portion of all such distributions by the Agents, such Lender
shall promptly (1) turn the same over to the Agents, in kind, and with
such endorsements as may be required to negotiate the same to the
Agents, or in same day funds, as applicable, for the account of all of
the Lenders and for application to the Lender Indebtedness in
accordance with the applicable provisions of this Agreement, or (2)
purchase, without recourse or warranty, an undivided interest and
participation in the Lender Indebtedness owed to the other Lenders so
that such excess payment received shall be applied ratably as among the
Lenders in accordance with their Applicable Percentages; provided,
however, that if all or part of such excess payment received by the
purchasing party is thereafter recovered from it, those purchases of
participations shall be rescinded in whole or in part, as applicable,
and the applicable portion of the purchase price paid therefor shall be
returned to such purchasing party, but without interest except to the
extent that such purchasing party is required to pay interest in
connection with the recovery of the excess payment.
SECTION 9.12 SUCCESSOR AGENT.
(a) RESIGNATION. Either of the Agents may resign at any time by giving
written notice thereof to the Lenders, the Issuing Banks and the
Borrowers. Upon any such resignation, the Required Lenders shall have
the right, upon five days' notice to the Borrowers, to appoint a
successor Administrative Agent or Canadian Administrative Agent, as
applicable (to act in the same capacity as the resigning Agent),
subject to the prior written approval of the Borrowers, such approval
not to be unreasonably withheld and not to be required during the
existence of a Default or Event of Default. If no successor
Administrative Agent or Canadian Administrative Agent, as applicable,
shall have been so appointed by the Required Lenders, and shall have
accepted such appointment, within 30 days after the retiring Agent's
giving of notice of resignation then, upon five days' notice to the
Borrowers, the retiring Agent may, on behalf of the Lenders, appoint a
successor Administrative Agent or Canadian Administrative Agent, as
applicable, (subject to approval of the Borrowers, such approval not to
be unreasonably withheld and not to be required during the existence of
a Default or Event of Default), which, if the resigning Agent was the
Canadian Administrative Agent, shall be an entity that is not a
non-resident of Canada for purposes of the Income Tax Act (Canada) and
if the resigning Agent was the Administrative Agent, shall be a bank or
finance company which maintains an office in the United States, or a
commercial bank organized under the laws of the United States of
America or of any State thereof, or any Affiliate of such bank or
finance company, having a combined capital and surplus of at least
$250,000,000.
(b) RIGHTS, POWERS, ETC. Upon the acceptance of any appointment as an Agent
hereunder by a successor Agent, such successor Agent shall thereupon
succeed to and become vested with all the rights, powers, privileges
and duties of the retiring Agent, and the retiring Agent shall be
discharged from its duties and obligations under this Agreement. After
any retiring Agent's resignation or removal hereunder as Agent, the
provisions of this
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Article 9 shall inure to its benefit as to any actions taken or omitted
to be taken by it while it was the Agent under this Agreement.
SECTION 9.13 CO-DOCUMENTATION AGENTS. Notwithstanding anything contained in this
Article 9 or any other Financing Document to the contrary, the Co-Documentation
Agents shall have no right, power, obligation, liability, responsibility or duty
under this Agreement or any other Financing Document other than those applicable
to all Lenders as such.
SECTION 9.14 SYNDICATION AGENT. Notwithstanding anything contained in this
Article 9 or any other Financing Document to the contrary, the Syndication Agent
shall have no right, power, obligation, liability, responsibility or duty under
this Agreement or any other Financing Document other than those applicable to
all Lenders as such.
SECTION 9.15 FIELD AUDIT AND EXAMINATION REPORTS. By signing this Agreement,
each Lender:
(a) is deemed to have requested that the Administrative Agents furnish such
Lender, promptly after it become available, a copy of each field audit
or examination report (each a "Report" and collectively, "Reports")
prepared by or on behalf of the Agent;
(b) expressly agrees and acknowledges that neither of the Administrative
Agents nor any Lender (i) makes any representation or warranty as to
the accuracy of any Report, or (ii) shall be liable for any information
contained in any Report;
(c) expressly agrees and acknowledges that the Reports are not
comprehensive audits or examinations, that each of the Administrative
Agents, any Lender or any other party performing any audit or
examination will inspect only specific information regarding the Credit
Parties and will rely significantly upon the Credit Parties' books and
records, as well as on representations of the Credit Parties'
personnel;
(d) agrees to keep all Reports confidential and strictly for its internal
use, and not to distribute except to its Participants or otherwise as
permitted under Section 10.12, or use any Report in any other manner;
and
(e) without limiting the generality of any other indemnification provision
contained in this Agreement, agrees: (i) to hold each of the
Administrative Agents, any such Lender or such other party preparing a
Report harmless from any action the indemnifying Lender may take or
conclusion the indemnifying Lender may reach or draw from any Report in
connection with any Loans or other credit accommodations that the
indemnifying Lender has made or may make to the Borrowers and the other
Credit Parties, or the indemnifying Lender's participation in, or the
indemnifying Lender's purchase of, a Loan or Loans of the Borrower; and
(ii) to pay and protect, and indemnify, defend and hold the
Administrative Agents, any such other Lender and any such other party
preparing a Report harmless from and against, the claims, actions,
proceedings, damages, costs, expenses and other amounts (including
reasonable legal fees and disbursements) incurred by the Administrative
Agents, any such other Lender or any such other party preparing a
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Report as the direct or indirect result of any third parties who might
obtain all or part of any Report through the indemnifying Lender.
SECTION 9.16 QUEBEC SECURITY. For greater certainty, and without limiting the
powers of the Agents or any other Person acting as an agent or mandatary for
such agents under any of the Financing Documents, each Credit Party hereby
acknowledges, on its own behalf and on the behalf of each of its subsidiaries,
that, for purposes of holding any hypothec granted by any Credit Party on
property pursuant to the laws of the Province of Quebec to secure obligations of
such Credit Party under any bond issued by such Credit Party, CIT Business
Credit Canada Inc. shall be the holder of an irrevocable power of attorney
(fonde de pouvoir within the meaning of Article 2692 of the Civil Code of
Quebec) for all present and future Lenders, Issuing Banks, Secured Affiliates,
Cash Management Affiliates and the Agents referred to in this Agreement, and in
particular for all present and future holders of any such bond. The Lenders and
the Issuing Banks hereby: (i) irrevocably constitute, to the extent necessary,
CIT Business Credit Canada Inc. as the holder of an irrevocable power of
attorney (fonde de pouvoir within the meaning of Article 2692 of the Civil Code
of Quebec) in order to hold hypothecs and security granted by any Credit Party
on property pursuant to the laws of the Province of Quebec to secure obligations
of such Credit Party under any bond issued by such Credit Party; and (ii)
appoint and agree that the Canadian Administrative Agent may act as the
bondholder and mandatary with respect to any bond that may be issued by a Credit
Party and pledged in its or their favour from time to time. Each assignee of a
Lender or Issuing Bank and each Cash Management Affiliate and Secured Affiliate
(by and through its affiliated Lender) shall be deemed to have confirmed and
ratified the constitution of CIT Business Credit Canada Inc. as the holder of
such irrevocable power of attorney (fonde de pouvoir) and shall be deemed to
have confirmed and ratified the constitution of the Canadian Administrative
Agent as bondholder and mandatary with respect to any bond that may be issued by
a Credit Party and pledged from time to time in its or their favour by the
execution, as applicable, of an Assignment and Acceptance, Cash Management
Agreement or Swap Agreement. Notwithstanding the provisions of Section 32 of the
An Act Respecting the Special Powers of Legal Persons (Quebec), CIT Business
Credit Canada Inc. may acquire and be the holder of any bond issued by a Credit
Party (i.e. the fonde de pouvoir may acquire and hold the first bond issued
under any deed of hypothec by such Credit Party). Each Credit Party, on its own
behalf and on behalf of each of its subsidiaries, hereby acknowledges and agrees
that such bond constitutes a title of indebtedness, as such term is used in
Article 2692 of the Civil Code of Quebec. CIT Business Credit Canada Inc. herein
appointed and acting as fonde de pouvoir shall have the same rights, powers and
immunities as the Agents as stipulated herein, including under this Section 9,
which shall apply mutatis mutandis. Without limitation, the provisions of
Section 9.12 shall apply, mutatis mutandis, to the resignation and appointment
of a successor of CIT Business Credit Canada Inc., acting as fonde de pouvoir.
SECTION 9.17 AGENCY FOR PERFECTION. Each Lender hereby appoints each other
Lender as agent for the purpose of perfecting the Lenders' security interest in
assets which, in accordance with Article 9 of the UCC can be perfected only by
possession. Should any Lender (other than the Administrative Agent) obtain
possession of any such Collateral, such Lender shall notify the Administrative
Agent thereof, and, promptly upon the Administrative Agent's request therefor
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shall deliver such Collateral to the Administrative Agent or in accordance with
the Administrative Agent's instructions.
ARTICLE 10
MISCELLANEOUS
SECTION 10.1 NOTICES. All notices, requests and other communications to any
party hereunder shall be in writing (including, telecopy or similar
teletransmission or writing) and shall be given to such party at its address or
telecopy number set forth on the signature pages hereof or such other address or
telecopy number as such party may hereafter specify by notice to the Canadian
Administrative Agent, the Administrative Agent and the Company. Each such
notice, request or other communication shall be effective (a) if given by mail,
72 hours after such communication is deposited in the mails with first class
postage prepaid, addressed as aforesaid, or (b) if given by any other means
(including by air courier), when delivered at the address specified on the
signature pages hereto; provided that notices to the Administrative Agent, the
Canadian Administrative Agent, any Lender or any Credit Party shall not be
effective until actually and physically received. Any notice to be given to any
Borrower or to all Borrowers pursuant to this Agreement or any of the other
Financing Documents may be given to the Company or to any other Borrower, and if
given to the Company or to any Borrower in the manner set forth in this Section
10.1, such notice shall be deemed to be effective notice to all Borrowers for
purposes of this Agreement.
SECTION 10.2 AMENDMENTS AND WAIVERS. Neither this Agreement nor any other
Financing Document, nor any terms hereof or thereof, may be amended,
supplemented or modified except in accordance with the provisions of this
Section 10.2. The Required Lenders may, or, with the written consent of the
Required Lenders, the Administrative Agent and the Canadian Administrative Agent
may, from time to time, (x) enter into with the Borrowers, written amendments,
supplements or modifications hereto and to the other Financing Documents for the
purpose of adding any provisions to this Agreement or to the other Financing
Documents or changing in any manner the rights or obligations of the Lenders or
the Borrowers hereunder or thereunder, or (y) waive at the Borrowers' request,
on such terms and conditions as the Required Lenders or the Administrative Agent
and the Canadian Administrative Agent, as the case may be, may specify in such
instrument, any of the requirements of this Agreement or the other Financing
Documents or any Default and its consequences; provided, however, that no such
waiver and no such amendment, supplement or modification shall:
(a) reduce the amount or extend the scheduled date of maturity of any Loan
or any Reimbursement Obligation or of any scheduled installment thereof
or reduce the stated rate of any interest or fee payable hereunder or
extend the date of any payment thereof or modify any provision that
provides for the ratable sharing by the Lenders (or any sub-set of the
Lenders) of any payment or prepayment of Lender Indebtedness to provide
for a non-ratable sharing thereof or increase the amount or extend the
expiration date of any Lender's Revolving Credit Commitment or amend,
modify or waive any provision of Section 2.11(f), (g), (h) or (i) or
Section 2.20, in each case without the prior written consent of each
Lender directly affected thereby;
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(b) change the currency in which any Loan or Reimbursement Obligation is
payable or amend, modify or waive any provision of this Section 10.2 or
reduce the percentage specified in the definition of Required Lenders
without the written consent of all of the Lenders.
(c) release any Guarantee or part of the Collateral having a value
(determined at the lesser of market or book value) in excess of
$5,000,000 without the written consent of all of the Lenders, except as
expressly permitted hereby, provided that the Administrative Agent or
the Canadian Administrative Agent, as applicable, may release (without
consent from the Lenders) any Collateral, and may release a Credit
Party from the Guarantees, if such Collateral or Credit Party, as
applicable, is sold, transferred or otherwise disposed of as permitted
by Section 7.4;
(d) amend, modify or waive any provision of Article 9 without the written
consent of the Agent directly affected thereby;
(e) amend, modify or waive (1) any Letter of Credit Liability without the
written consent of the applicable Issuing Bank or (2) any Letter of
Credit without the consent of each Lender if such Letter of Credit,
after giving effect to such amendment, modification or waiver, would no
longer satisfy the requirements hereof if such Letter of Credit was
being issued ab initio at such time, provided that in all cases other
than clauses (1) or (2), only the consent of the applicable Issuing
Bank shall be required to amend, modify or waive any Letter of Credit;
(f) amend the definitions of Canadian Borrowing Base, US Borrowing Base,
Eligible Account Advance Percentage, Eligible Inventory Advance
Percentage (other than to the extent already permitted to be reduced at
the discretion of the Administrative Agent), Eligible Accounts or
Eligible Inventory or any of the defined terms used in such
definitions, without the written consent of the Administrative Agent
and all of the Lenders;
(g) amend the definition of Block Event or any term or condition of this
Agreement where such definition is referred to, without the written
consent of all of the Lenders; or
(h) amend Section 2.26 or Section 2.27 without the consent of the US
Swingline Lender and the Canadian Swingline Lender, respectively.
In addition, neither the Administrative Agent nor the Canadian
Administrative Agent shall realize on any pledge of shares or stock forming part
of the Collateral if such realization would result in the Lenders having
beneficial ownership, control or title of any such pledged shares or stock,
without the prior written consent of each Lender.
No consent of the Lenders shall be required in connection with
any waiver or amendment of any of the Canadian Fee Letter, the US Fee Letter or
any Swap Agreement. The Agents may, in their sole discretion in accordance with
Section 2.28 and the other terms of this Agreement, make Agent Advances without
the consent of any Revolving Lender. Any waiver
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and any amendment, supplement or modification pursuant to this Section 10.2
shall apply to each of the Lenders and shall be binding upon each Borrower, the
Lenders, the Administrative Agent and all future holders of the Loans. In the
case of any waiver, the Borrowers, the other Credit Parties, the Lenders and the
Administrative Agent shall be restored to their former position and rights
hereunder and under the other Financing Documents, and any Default waived shall
be deemed to be cured and not continuing; but no such waiver shall extend to any
subsequent or other Default, or impair any right consequent thereon.
SECTION 10.3 NO WAIVER; REMEDIES CUMULATIVE. No failure or delay on the part of
any Borrower, any Agent, any Issuing Bank or any Lender or any holder of any
Note in exercising any right or remedy under this Agreement or any other
Financing Document and no course of dealing between any Borrower and any Agent,
any Issuing Bank or any Lender or any holder of any Note shall operate as a
waiver thereof, nor shall any single or partial exercise of any right or remedy
under the Notes, this Agreement or any other Financing Document preclude any
other or further exercise thereof or the exercise of any other right or remedy
under the Notes, this Agreement or any other Financing Document. The rights and
remedies herein expressly provided are cumulative and not exclusive of any
rights or remedies which any Borrower, any Agent, any Issuing Bank or any Lender
would otherwise have. No notice to or demand on any Borrower not required under
the Notes, this Agreement or any other Financing Document in any case shall
entitle any Borrower to any other or further notice or demand in similar or
other circumstances or constitute a waiver of the rights of any Agent, any
Issuing Bank or the Lenders to any other or further action in any circumstances
without notice or demand.
SECTION 10.4 PAYMENT OF EXPENSES, INDEMNITIES, ETC. Each Borrower agrees to (and
shall be jointly and severally liable for):
(a) EXPENSES. Whether or not the transactions hereby contemplated are
consummated, pay all out-of-pocket costs and expenses of the
Administrative Agent, the Canadian Administrative Agent and each
Issuing Bank in the administration (both before and after the execution
hereof and including advice of Canadian and U.S. counsel for all Agents
as to the rights and duties of such Agents with respect thereto) of,
and in connection with the preparation, execution and delivery of,
recording or filing of, preservation of rights under, enforcement of,
interpretation of, and, during the continuance of a Default,
refinancing, renegotiation or restructuring of, this Agreement, the
Notes, and the other Financing Documents and any amendment, waiver or
consent relating thereto (including, but not limited to, the fees and
disbursements, for such purposes, of counsel for each Agent and, after
Default, for any of the Lenders) and promptly reimburse each Agent for
all amounts expended, advanced, or incurred by such Agent to satisfy
any obligation of any Borrower under this Agreement or any other
Financing Document; provided that, before the occurrence of a Default,
all reimburseable out-of-pocket costs and expenses in connection with
the preparation, execution and delivery of, and recording or filing of
this Agreement, the Notes, and the other Financing Documents, or in
connection with any amendment, waiver or consent relating thereto,
shall be reasonable and, in the case of out-of-pocket legal fees and
expenses, shall be limited to one Canadian law firm and one U.S. law
firm acting on behalf of all Agents. Without limiting the foregoing,
the
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Borrowers shall pay to the Administrative Agent (i) all fees and
expenses incurred by the Administrative Agent or the Canadian
Administrative Agent in connection with any collateral audits permitted
hereunder, (ii) all fees and/or verification costs incurred by the
Administrative Agent or the Canadian Administrative Agent in connection
with audits conducted against the Borrowers' property and assets, up to
a maximum of $750 per person, per day, (iii) all inventory appraisal
costs and expenses permitted to be incurred hereunder, and (iv) any
other out-of-pocket expenses related to any of the foregoing.
(b) INDEMNIFICATION. INDEMNIFY EACH AGENT, EACH ISSUING BANK AND EACH
LENDER, EACH OF THEIR RESPECTIVE OFFICERS, DIRECTORS, EMPLOYEES,
REPRESENTATIVES, AGENTS AND AFFILIATES FROM, HOLD EACH OF THEM HARMLESS
AGAINST, AND PROMPTLY UPON DEMAND PAY OR REIMBURSE EACH OF THEM FOR,
ANY AND ALL ACTIONS, SUITS, PROCEEDINGS (INCLUDING ANY INVESTIGATIONS,
LITIGATION OR INQUIRIES), CLAIMS, COSTS, LOSSES, LIABILITIES, DAMAGES
OR EXPENSES OF ANY KIND OR NATURE WHATSOEVER WHICH MAY BE INCURRED BY
OR ASSERTED AGAINST OR INVOLVE ANY OF THEM (WHETHER OR NOT ANY OF THEM
IS DESIGNATED A PARTY THERETO) AS A RESULT OF, ARISING OUT OF OR IN ANY
WAY RELATED TO (1) ANY ACTUAL OR PROPOSED USE BY ANY BORROWER OF THE
PROCEEDS OF ANY OF THE LOANS; OR (2) ANY OTHER ASPECT OF THIS
AGREEMENT, THE NOTES, AND THE FINANCING DOCUMENTS, INCLUDING BUT NOT
LIMITED TO THE REASONABLE FEES AND DISBURSEMENTS OF COUNSEL (INCLUDING
ALLOCATED COSTS OF INTERNAL COUNSEL) AND ALL OTHER EXPENSES INCURRED IN
CONNECTION WITH INVESTIGATING, DEFENDING OR PREPARING TO DEFEND ANY
SUCH ACTION, SUIT, PROCEEDING (INCLUDING ANY INVESTIGATIONS, LITIGATION
OR INQUIRIES) OR CLAIM, AND INCLUDING ALL ACTIONS, SUITS, PROCEEDINGS
(INCLUDING ANY INVESTIGATIONS, LITIGATION OR INQUIRIES), CLAIMS, COSTS,
LOSSES, LIABILITIES, DAMAGES OR EXPENSES ARISING BY REASON OF ORDINARY
NEGLIGENCE OF EACH AGENT, EACH ISSUING BANK AND EACH LENDER, EACH OF
THEIR RESPECTIVE OFFICERS, DIRECTORS, EMPLOYEES, REPRESENTATIVES,
AGENTS AND AFFILIATES; PROVIDED, HOWEVER, THE PROVISIONS OF THIS
SECTION 10.4(b) SHALL NOT APPLY TO ANY ACTION, SUITS, PROCEEDINGS,
CLAIMS, COSTS, LOSSES, LIABILITIES, DAMAGES, OR EXPENSES TO THE EXTENT,
BUT ONLY TO THE EXTENT, DETERMINED BY A FINAL AND NON-APPEALABLE
JUDGMENT OF A COURT OF COMPETENT JURISDICTION TO HAVE BEEN CAUSED BY
THE GROSS NEGLIGENCE OR WILLFUL MISCONDUCT OF THE PARTY SEEKING
INDEMNIFICATION;
(c) ENVIRONMENTAL INDEMNIFICATION. INDEMNIFY AND HOLD HARMLESS FROM TIME TO
TIME EACH AGENT, THE ISSUING BANKS AND THE LENDERS, EACH PERSON
CLAIMING BY, THROUGH, UNDER OR ON ACCOUNT OF ANY OF THE FOREGOING AND
THE RESPECTIVE DIRECTORS, OFFICERS, COUNSEL, EMPLOYEES, AGENTS,
AFFILIATES, SUCCESSORS
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AND ASSIGNS OF EACH OF THE FOREGOING FROM AND AGAINST ANY AND ALL
LOSSES, CLAIMS, COST RECOVERY ACTIONS, ADMINISTRATIVE ORDERS OR
PROCEEDINGS, DAMAGES AND LIABILITIES (WHICH RELATE TO OR ARISE AS A
RESULT OF THE LOANS, THE LETTERS OF CREDIT OR ANY FINANCING DOCUMENT)
TO WHICH ANY SUCH PERSON MAY BECOME SUBJECT AND INCLUDING ANY AND ALL
LOSSES, CLAIMS, COST RECOVERY ACTIONS, ADMINISTRATIVE ORDERS OR
PROCEEDINGS, DAMAGES AND LIABILITIES (WHICH RELATE TO OR ARISE AS A
RESULT OF THE LOANS, THE LETTERS OF CREDIT OR ANY FINANCING DOCUMENT)
ARISING BY REASON OF THE ORDINARY NEGLIGENCE OF EACH AGENT, THE ISSUING
BANKS AND THE LENDERS, EACH PERSON CLAIMING BY, THROUGH, UNDER OR ON
ACCOUNT OF ANY OF THE FOREGOING AND THE RESPECTIVE DIRECTORS, OFFICERS,
COUNSEL, EMPLOYEES, AGENTS, AFFILIATES, SUCCESSORS AND ASSIGNS OF EACH
OF THE FOREGOING UNDER ANY ENVIRONMENTAL LAW APPLICABLE TO ANY BORROWER
OR ANY OF THEIR RESPECTIVE PROPERTIES, INCLUDING WITHOUT LIMITATION,
THE TREATMENT OR DISPOSAL OF HAZARDOUS SUBSTANCES ON ANY OF THEIR
RESPECTIVE PROPERTIES, AS A RESULT OF THE BREACH OR NON-COMPLIANCE BY
ANY CREDIT PARTY WITH ANY ENVIRONMENTAL LAW APPLICABLE TO ANY CREDIT
PARTY, DUE TO PAST OWNERSHIP BY ANY CREDIT PARTY OF ANY OF THEIR
RESPECTIVE PROPERTIES OR PAST ACTIVITY ON ANY OF THEIR RESPECTIVE
PROPERTIES WHICH, THOUGH LAWFUL AND FULLY PERMISSIBLE AT THE TIME,
COULD RESULT IN PRESENT LIABILITY, THE PRESENCE, USE, RELEASE, STORAGE,
TREATMENT OR DISPOSAL OF HAZARDOUS SUBSTANCES ON OR AT ANY OF THE
PROPERTIES OWNED OR OPERATED BY ANY CREDIT PARTY, OR ANY OTHER
ENVIRONMENTAL, HEALTH OR SAFETY CONDITION IN CONNECTION WITH THIS
AGREEMENT, THE NOTES OR ANY OTHER FINANCING DOCUMENT; PROVIDED,
HOWEVER, NO INDEMNITY SHALL BE AFFORDED UNDER THIS SECTION 10.4(C) IN
RESPECT OF ANY PROPERTY FOR ANY OCCURRENCE ARISING PRIMARILY FROM THE
ACTS OR OMISSIONS OF AN AGENT OR ANY LENDER DURING THE PERIOD AFTER
WHICH SUCH PERSON, ITS SUCCESSORS OR ASSIGNS SHALL HAVE OBTAINED ACTUAL
PHYSICAL POSSESSION OF SUCH PROPERTY (WHETHER BY FORECLOSURE OR DEED IN
LIEU OF FORECLOSURE, AS MORTGAGEE-IN-POSSESSION OR OTHERWISE); AND
(d) ENVIRONMENTAL WAIVER. WITHOUT LIMITING THE FOREGOING PROVISIONS, EACH
BORROWER HEREBY DOES WAIVE, RELEASE AND COVENANT NOT TO BRING AGAINST
ANY OF THE PERSONS INDEMNIFIED IN THIS SECTION 10.4 ANY DEMAND, CLAIM,
COST RECOVERY ACTION OR LAWSUIT THEY MAY NOW OR HEREAFTER HAVE OR
ACCRUE (WHICH RELATE TO OR ARISE AS A RESULT OF THE LOANS, THE LETTERS
OF CREDIT OR ANY FINANCING DOCUMENT) ARISING FROM ANY ENVIRONMENTAL LAW
NOW OR HEREAFTER ENACTED (INCLUDING
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THOSE APPLICABLE TO ANY BORROWER) UNLESS THE ACTS OR OMISSIONS OF ANY
SUCH PERSON OR THEIR RESPECTIVE SUCCESSORS AND ASSIGNS ARE THE PRIMARY
CAUSE OF THE CIRCUMSTANCES GIVING RISE TO SUCH DEMAND, COST RECOVERY
ACTION OR LAWSUIT, THE PRESENCE, USE, RELEASE, STORAGE, TREATMENT OR
DISPOSAL OF HAZARDOUS SUBSTANCES ON OR AT ANY OF THE PROPERTIES OWNED
OR OPERATED BY ANY CREDIT PARTY, OR THE BREACH OR NON-COMPLIANCE BY ANY
CREDIT PARTY WITH ANY ENVIRONMENTAL LAW OR ENVIRONMENTAL COVENANT
APPLICABLE TO ANY BORROWER, UNLESS THE ACTS OR OMISSIONS OF SUCH
PERSON, ITS SUCCESSORS AND ASSIGNS ARE THE PRIMARY CAUSE OF THE
CIRCUMSTANCES GIVING RISE TO SUCH DEMAND, CLAIM, COST RECOVERY ACTION
OR LAWSUIT.
Each Borrower's obligations under this Section 10.4 shall survive any
termination of this Agreement and the payment of the Notes.
SECTION 10.5 RIGHT OF SETOFF. Subject to the rights of the Agents and the
Lenders contained in Section 9.11 hereof, in addition to and not in limitation
of all rights of offset that any Lender or any Issuing Bank may have under
applicable law, each Lender shall, upon the occurrence of any Event of Default
and at any time during the continuance thereof and whether or not such Lender
has made any demand or any of the Borrowers' obligations are matured, have the
right at any time and from time to time, without notice to any Credit Party (any
such notice being expressly waived by each Borrower) to set-off and apply any
and all deposits (general or special, time or demand, provisional or final) at
any time held and other indebtedness at any time owing by any Lender to or for
the credit or the account of the applicable Borrower against any and all of the
Lender Indebtedness owing to such Lender by such Borrower then outstanding,
subject to the provisions of Section 2.11(f), (g), (h) and (i).
SECTION 10.6 BENEFIT OF AGREEMENT. The Notes, this Agreement and the other
Financing Documents shall be binding upon and inure to the benefit of and be
enforceable by the respective successors and permitted assigns of the parties
hereto, provided that no Borrower may assign or transfer any of its interest
hereunder or thereunder without the prior written consent of each Lender.
SECTION 10.7 SUCCESSORS AND ASSIGNS; PARTICIPATIONS AND ASSIGNMENTS.
(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 any 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 Lender (and any attempted
assignment or transfer by any Borrower without such consent shall be
null and void). Except as otherwise expressly provided herein, nothing
in this Agreement shall be construed to confer upon any Person (other
than the parties hereto, their respective successors and assigns
permitted hereby any legal or equitable right, remedy or claim under or
by reason of this Agreement.
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(b) Any 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 Commitments and the Loans at the time owing to it) by executing,
and causing the assignee thereof to execute, an assignment and
acceptance in the form attached hereto as Exhibit K ("ASSIGNMENT AND
ACCEPTANCE"); provided, that, (1) except in the case of an assignment
to a Lender or an Affiliate of a Lender (other than an assignment by a
Canadian Revolving Lender to a Lender or an Affiliate which is not a
resident of Canada for purposes of the Income Tax Act (Canada)), each
of the Borrowers and the Administrative Agent (and, in the case of an
assignment of all or a portion of a Revolving Credit Commitment or any
Lender's obligations in respect of its Revolving Credit Exposure, any
Issuing Bank which has outstanding a Letter of Credit) must give their
prior written consent to such assignment (which consent shall not be
unreasonably withheld), (2) except in the case of an assignment of the
entire remaining amount of an assigning Revolving Lender's and its
Related Affiliate's Revolving Credit Commitments, the aggregate amount
of the Revolving Credit Commitments assigned to an assignee and its
Related Affiliates, and the aggregate amount of the Revolving Credit
Commitments retained by the assignor and its Related Affiliates after
giving effect to such assignment, shall be not less than $7,500,000
(provided that if the Revolving Credit Commitments have expired or
terminated, such limits shall apply to the amount of Revolving Credit
Exposure assigned and retained), (3) no US Revolving Lender shall
assign all or any part of its US Revolving Credit Commitment or US
Revolving Credit Loans unless such Lender (and its Related Affiliate if
applicable) assigns the same percentage of its Canadian Revolving
Credit Commitment and Canadian Revolving Credit Loans to the same
assignee (or Related Affiliate of the same assignee), (4) no Canadian
Revolving Lender shall assign all or any part of its Canadian Revolving
Credit Commitment or Canadian Revolving Credit Loans unless such Lender
(and its Related Affiliate if applicable) assigns the same percentage
of its US Revolving Credit Commitment and US Revolving Credit Loans to
the same assignee (or Related Affiliate of the same assignee), (5) the
parties to each assignment shall execute and deliver to the
Administrative Agent an Assignment and Acceptance, together with a
processing and recordation fee of $3,500, and (6) the assignee, if it
shall not already be a Lender, shall deliver to the Administrative
Agent an Administrative Questionnaire; and provided further that any
consent of the Borrowers otherwise required under this paragraph shall
not be required if a Default has occurred and is continuing. Subject to
acceptance and recording thereof pursuant to Section 10.7(d), from and
after the effective date specified in each Assignment and Acceptance
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 of 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 Section
2.17, Section 2.19, Section 2.21 and Section 10.4, and shall continue
to be bound by all provisions contained herein providing for
indemnification or reimbursement of the Administrative Agent or the
Canadian Administrative Agent or such Lender, to the extent
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the event or condition giving rise to such indemnification or
reimbursement arose or existed while the assigning Lender was a
Lender). 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 this Section 10.7(b). Notwithstanding the foregoing,
the US Swingline Lender shall not be permitted to make a partial
assignment of the US Swingline Commitment and the Canadian Swingline
Lender shall not be permitted to make a partial assignment of the
Canadian Swingline Commitment. Notwithstanding anything contained in
this Agreement to the contrary, (i) no assignee of a Canadian Revolving
Lender shall be permitted to seek any indemnification for, or the
payment of, any Indemnified Taxes or Other Taxes described in Section
2.21 hereof or any penalties, interest and reasonable expenses arising
therefrom or with respect thereto from the Canadian Borrowers, unless
amounts payable to the Lender from which the assignee received its
assignment (the "assignor") would have also been subject to, or such
assignor would have also been required to pay, such Indemnified Taxes
or Other Taxes and (ii) no assignee of a US Revolving Lender shall be
permitted to seek any indemnification for, or the payment of, any
Indemnified Taxes or Other Taxes described in Section 2.21 hereof or
any penalties, interest and reasonable expenses arising therefrom or
with respect thereto from the US Borrowers, unless amounts payable to
the assignor would have also been subject to, or such assignor would
have also been required to pay, such Indemnified Taxes or Other Taxes;
provided, however, that the limitations contained in this sentence
shall not apply to any assignees who are assigned their interests
hereunder after a Default or Event of Default.
(c) The Administrative Agent, acting for this purpose as an agent of the
Borrowers, shall maintain at one of its offices in Atlanta, Georgia 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 Reimbursement
Obligations 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 Agent, 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 each Borrower, any
Issuing Bank 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
Section 10.7(b) and any written consent to such assignment required by
Section 10.7(b), the 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.
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(e) Any Lender may, without the consent of any Borrower, the Administrative
Agent or any Issuing Bank, 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 and Reimbursement Obligations owing to
it); provided that (1) such Lender's obligations under this Agreement
shall remain unchanged, (2) such Lender shall remain solely responsible
to the other parties hereto for the performance of such obligations,
(3) each Borrower, the Administrative Agent, the Canadian
Administrative Agent, 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 and (4)
any Canadian Revolving Lender that intends to sell a participation to a
Person which is not a resident of Canada for purposes of the Income Tax
Act (Canada) shall give prior written notice thereof to the Canadian
Borrowers. 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 this Agreement and to approve any amendment,
modification or waiver of any provision of this Agreement; provided
that such agreement or instrument may provide that such Lender will
not, without the consent of the Participant, agree to any amendment,
modification or waiver described in Section 10.2(a) or Section 10.2(b)
that affects such Participant, and no US Revolving Lender shall sell
any participation in its US Revolving Credit Commitments or US
Revolving Credit Loans unless such Lender (or its Related Affiliate)
sells a participation interest of an equal percentage of its Canadian
Revolving Credit Commitment and Canadian Revolving Credit Loans to the
same Participant or a Related Affiliate of such Participant, and no
Canadian Revolving Lender shall sell any participation in its Canadian
Revolving Credit Commitments or Canadian Revolving Credit Loans unless
such Lender (or its Related Affiliate) sells an equal percentage of its
US Revolving Credit Commitment and US Revolving Credit Loans to the
same Participant or a Related Affiliate of such Participant. Subject to
this Section 10.7(e), each Borrower agrees that each Participant shall
be entitled to the benefits of Section 2.17, Section 2.19 and Section
2.21 to the same extent as the Lender from which it acquired the
participation. To the extent permitted by law, each Participant also
shall be entitled to the benefits of Section 10.5 as though it were a
Lender, provided such Participant agrees to be subject to Section 2.20
as though it were a Lender.
(f) A Participant shall not be entitled to receive any greater payment
under Section 2.19 or Section 2.21 than the applicable Lender would
have been entitled to receive with respect to the participation sold to
such Participant.
(g) Any Lender may at any time pledge or assign a security interest in all
or any portion of its rights under this Agreement to secure obligations
of such Lender, including any pledge or assignment to secure
obligations to a Federal Reserve Bank, and this Section 10.7 shall not
apply to any such pledge or assignment of a security interest; provided
that no such pledge or assignment of a security interest shall release
a Lender from any of its obligations hereunder or substitute any such
pledgee or assignee for such Lender as a party hereto.
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(h) Subject to Section 10.12, each Borrower authorizes each Lender to
disclose to any Participant or assignee (each, a "TRANSFEREE") and any
prospective Transferee any and all information in such Lender's
possession concerning the Borrowers and their Affiliates which has been
delivered to such Lender by or on behalf of any Borrower pursuant to
this Agreement or which has been delivered to such Lender by or on
behalf of any Borrower in connection with such Lender's credit
evaluation of the Borrowers and their Affiliates prior to becoming a
party to this Agreement. No assignment or participation made or
purported to be made to any Transferee shall be effective without the
prior written consent of the Borrowers if it would require it to make
any filing with any Governmental Authority or qualify any Loan or Note
under the laws of any jurisdiction, and the Company shall be entitled
to request and receive such information and assurances as it may
reasonably request from any Lender or any Transferee to determine
whether any such filing or qualification is required or whether any
assignment or participation is otherwise in accordance with applicable
law.
SECTION 10.8 GOVERNING LAW; SUBMISSION TO JURISDICTION; ETC.
(a) GOVERNING LAW; SUBMISSION TO JURISDICTION; ETC. This Agreement shall be
construed in accordance with and governed by the laws of the Province
of Ontario. Each Borrower hereby irrevocably and unconditionally
submits, for itself and its property, to the non-exclusive jurisdiction
of the courts of the Province of Ontario, and any appellate court
thereof, in any action or proceeding arising out of or relating to this
Agreement, or any other Financing 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 Ontario.
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 applicable law. Nothing in this Agreement shall affect any right
that the Administrative Agent, the Canadian Administrative Agent, any
Issuing Bank, or any Lender may otherwise have to bring any action or
proceeding relating to this Agreement or any other Financing Document
against a Borrower or any other Credit Party or its properties in the
courts of any other jurisdiction. Each Borrower 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 in any court referred to in this Section
10.8(a). Each of the parties hereto hereby irrevocably waives, to the
fullest extent permitted by applicable law, any forum non conveniens
defence to the maintenance of such action or proceeding in any such
court. Each party to this Agreement irrevocably consents to service of
process in the manner provided for notices in Section 10.1. Nothing in
this Agreement will affect the right of any party to this Agreement to
serve process in any other manner permitted by applicable law.
(b) WAIVER OF JURY TRIAL. TO THE MAXIMUM EXTENT ALLOWED BY APPLICABLE LAW,
EACH OF THE BORROWERS, THE AGENTS, THE ISSUING BANKS AND THE LENDERS
(i) IRREVOCABLY AND UNCONDITIONALLY
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WAIVE TRIAL BY JURY IN ANY LEGAL ACTION OR PROCEEDING RELATING TO ANY
FINANCING DOCUMENT AND FOR ANY COUNTERCLAIM THEREIN; (ii) IRREVOCABLY
WAIVE ANY RIGHT IT MAY HAVE TO CLAIM OR RECOVER IN ANY SUCH LITIGATION
ANY SPECIAL, EXEMPLARY, PUNITIVE OR CONSEQUENTIAL DAMAGES, OR DAMAGES
OTHER THAN, OR IN ADDITION TO, ACTUAL DAMAGES; (iii) CERTIFY THAT NO
PARTY HERETO NOR ANY REPRESENTATIVE OR COUNSEL FOR ANY PARTY HERETO HAS
REPRESENTED, EXPRESSLY OR OTHERWISE, OR IMPLIED THAT SUCH PARTY WOULD
NOT, IN THE EVENT OF LITIGATION, SEEK TO ENFORCE THE FOREGOING WAIVERS;
AND (iv) ACKNOWLEDGE THAT IT HAS BEEN INDUCED TO ENTER INTO THIS
AGREEMENT, THE OTHER FINANCING DOCUMENTS AND THE TRANSACTIONS
CONTEMPLATED HEREBY AND THEREBY BASED UPON, AMONG OTHER THINGS, THE
MUTUAL WAIVERS AND CERTIFICATIONS CONTAINED IN THIS SECTION 10.8.
(c) WAIVER OF CONSEQUENTIAL DAMAGES. To the maximum extent allowed by
applicable law, each Borrower, each Agent, the Issuing Banks and the
Lenders (1) irrevocably waive any right each may have to claim or
recover in any such litigation any special, exemplary, punitive or
consequential damages, or damages other than, or in addition to, actual
damages; (2) certifies that no party hereto nor any representative or
counsel for any party hereto has represented, expressly or otherwise,
or implied that such party would not, in the event of litigation, seek
to enforce the foregoing waiver; and (3) acknowledges that it has been
induced to enter into this Agreement, the other Financing Documents and
the transactions contemplated hereby and thereby based upon, among
other things, the mutual waivers and certifications contained in this
Section 10.8.
(d) JUDGMENT CURRENCY.
(i) If, for the purpose of obtaining or enforcing any judgment
against any Borrowers or any Credit Party in any court in any
jurisdiction, it becomes necessary to convert into any other
currency (such other currency being hereinafter in this
Section 10.8(d) referred to as the "JUDGMENT CURRENCY") an
amount due under any Financing Document in any currency (the
"OBLIGATION CURRENCY") other than the Judgment Currency, the
conversion shall be made at the rate of exchange prevailing on
the Business Day immediately preceding (i) the date of actual
payment of the amount due, in the case of any proceeding in
the courts of any jurisdiction that will give effect to such
conversion being made on such date, or (ii) the date on which
the judgment is given, in the case of any proceeding in the
courts of any other jurisdiction (the applicable date as of
which such conversion is made pursuant to this Section 10.8(d)
being hereinafter in this Section 10.8(d) referred to as the
"JUDGMENT CONVERSION DATE ").
(ii) If, in the case of any proceeding in the court of any
jurisdiction referred to in Section 10.8(d)(i), there is a
change in the rate of exchange prevailing between the Judgment
Conversion Date and the date of actual receipt for value of
the amount due, the applicable Borrower or Credit Party shall
pay such additional
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amount (if any, but in any event not lesser amount) as may be
necessary to ensure that the amount actually received in the
Judgment Currency, when converted at the rate of exchange
prevailing on the date of payment, will produce the amount of
the Obligation Currency which could have been purchased with
the amount of the Judgment Currency stipulated in the judgment
or judicial order at the rate of exchange prevailing on the
Judgment Conversion Date. Any amount due from a Borrower or
Credit Party under Section 10.8(d)(ii) shall be due as a
separate debt and shall not be affected by judgment being
obtained for any other amounts due under or in respect of any
of the Loan Documents.
(iii) The term "RATE OF EXCHANGE" in this Section 10.8(d) means the
rate of exchange at which the Administrative Agent would, on
the relevant date at or about 12:00 noon (Eastern time), be
prepared to sell the Obligation Currency against the Judgment
Currency.
SECTION 10.9 INDEPENDENT NATURE OF LENDERS' RIGHTS. The amounts payable at any
time hereunder to each Lender shall be a separate and independent debt, and each
Lender shall be entitled to protect and enforce its rights arising out of this
Agreement, and it shall not be necessary for any other Lender to be joined as an
additional party in any proceeding for such purpose.
SECTION 10.10 INVALIDITY. In the event that any one or more of the provisions
contained in the Notes, this Agreement or in any other Financing Document shall,
for any reason, be held invalid, illegal or unenforceable in any respect, (a)
each Borrower agrees that such invalidity, illegality or unenforceability shall
not affect any other provision of the Notes, this Agreement or any other
Financing Document and (b) each Borrower and the Administrative Agent (acting on
behalf and at the direction of the Lenders) and the Canadian Administrative
Agent (acting on behalf and at the direction of the Canadian Revolving Lenders)
will negotiate in good faith to amend such provision so as to be legal, valid,
and enforceable.
SECTION 10.11 RENEWAL, EXTENSION OR REARRANGEMENT. All provisions of this
Agreement and of any other Financing Documents relating to the Notes or other
Lender Indebtedness shall apply with equal force and effect to each and all
promissory notes hereafter executed which in whole or in part represent a
renewal, extension for any period, increase or rearrangement of any part of the
Lender Indebtedness originally represented by the Notes, or of any part of such
other Lender Indebtedness.
SECTION 10.12 CONFIDENTIALITY. The Administrative Agent, the Canadian
Administrative Agent, the Issuing Banks and the Lenders agree 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
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proceeding relating to this Agreement or the enforcement of rights hereunder,
(f) to any assignee of or Participant in, or any prospective assignee of or
Participant in, any of its rights or obligations under this Agreement (provided
that prior to such disclosure, such Person has agreed in favour of the Borrowers
to be bound by this Section 10.12), (g) with the written consent of the
Borrowers or (h) to the extent such Information (1) becomes publicly available
other than as a result of a breach of this Section 10.12 or (2) becomes
available to the Administrative Agent, the Canadian Administrative Agent, any
Issuing Bank or any Lender on a non-confidential basis from a source other than
a Borrower. For the purposes of this Section 10.12, "INFORMATION" means all
information marked "Confidential" that is received from any Borrower relating to
a Borrower or its business, other than any such information that is available to
the Administrative Agent, the Canadian Administrative Agent, any Issuing Bank or
any Lender on a non-confidential basis prior to disclosure by a Borrower. Any
Person required to maintain the confidentiality of Information as provided in
this Section 10.12 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. Each Borrower acknowledges that the Administrative
Agent or the Canadian Administrative Agent may be providing debt financing,
equity capital or other services (including financial advisory services) to
other companies in respect of which a Credit Party may have conflicting
interests regarding the transactions contemplated by this Agreement or the other
Financing Documents. Each Borrower also acknowledges that the Administrative
Agent and the Canadian Administrative Agent has no obligation to use in
connection with the transactions contemplated by this Agreement or the other
Financing Documents, or to furnish to any Credit Party, confidential information
obtained from other companies. Notwithstanding the foregoing, the Administrative
Agent, the Canadian Administrative Agent, the Issuing Banks and the Lenders (and
each employee, representative, or other agent of thereof) may disclose to any
and all persons, without limitation of any kind, the tax treatment and tax
structure of the transactions contemplated by the Financing Documents and all
materials of any kind (including opinions or other tax analyses) that are
provided to the Administrative Agent, the Canadian Administrative Agent, the
Issuing Banks and the Lenders relating to such tax treatment and tax structure.
SECTION 10.13 INTEREST. It is the intention of the parties hereto to conform
strictly to usury laws applicable to each Agent, the Issuing Banks and the
Lenders (collectively, the "FINANCING PARTIES") and the Transactions.
Accordingly, if the Transactions would be usurious as to any Financing Party
under laws applicable to it, then, notwithstanding anything to the contrary in
the Notes, this Agreement or in any other Financing Document or agreement
entered into in connection with the Transactions or as security for the Notes,
it is agreed as follows: (a) the aggregate of all consideration which
constitutes interest under law applicable to any Financing Party that is
contracted for, taken, reserved, charged or received by such Financing Party
under the Notes, this Agreement or under any of such other Financing Documents
or agreements or otherwise in connection with the Transactions shall under no
circumstances exceed the maximum amount allowed by such applicable law, (b) in
the event that the maturity of the Notes is accelerated for any reason, or in
the event of any required or permitted prepayment, then such consideration that
constitutes interest under law applicable to any Financing Party may never
include more than the maximum amount allowed by such applicable law, and (c)
excess interest, if any, provided for in this Agreement or otherwise in
connection with the Transactions shall be
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canceled automatically by such Financing Party and, if theretofore paid, shall
be credited by such Financing Party on the principal amount of the Borrowers'
Indebtedness to such Financing Party (or, to the extent that the principal
amount of the Borrowers' Indebtedness to such Financing Party shall have been or
would thereby be paid in full, refunded by such Financing Party to the
Borrowers). The right to accelerate the maturity of the Notes does not include
the right to accelerate any interest which has not otherwise accrued on the date
of such acceleration, and the Financing Parties do not intend to collect any
unearned interest in the event of acceleration. All sums paid or agreed to be
paid to the Financing Parties for the use, forbearance or detention of sums
included in the Lender Indebtedness shall, to the extent permitted by law
applicable to such Financing Party, be amortized, prorated, allocated and spread
throughout the full term of the Notes until payment in full so that the rate or
amount of interest on account of the Lender Indebtedness does not exceed the
applicable usury ceiling, if any. As used in this Section 10.13, the terms
"APPLICABLE LAW" or "LAWS APPLICABLE TO ANY FINANCING PARTY" means the law of
any jurisdiction whose laws may be mandatorily applicable notwithstanding other
provisions of this Agreement, or law of the United States of America or Canada
applicable to any Financing Party and the Transactions which would permit such
Financing Party to contract for, charge, take, reserve or receive a greater
amount of interest than under such jurisdiction's law.
SECTION 10.14 ENTIRE AGREEMENT. The Notes, this Agreement and the other
Financing Documents embody the entire agreement and understanding between the
Administrative Agent, the Canadian Administrative Agent, the Issuing Banks or
the Lenders and the other respective parties hereto and thereto and supersede
all prior agreements and understandings between such parties relating to the
subject matter hereof and thereof and may not be contradicted by evidence of
prior, contemporaneous agreements of the parties. There are no unwritten oral
agreements between the parties.
SECTION 10.15 ATTACHMENTS. The exhibits, schedules and annexes attached to this
Agreement are incorporated herein and shall be considered a part of this
Agreement for the purposes stated herein, except that in the event of any
conflict between any of the provisions of such exhibits and the provisions of
this Agreement, the provisions of this Agreement shall prevail.
SECTION 10.16 COUNTERPARTS. This Agreement may be executed in any number of
counterparts and by the different parties hereto on separate counterparts, each
of which when so executed and delivered shall be an original but all of which
shall together constitute one and the same instrument.
SECTION 10.17 SURVIVAL OF INDEMNITIES. The Borrowers' obligations under Section
2.17, Section 2.19, Section 2.21 and Section 10.4, and the Lenders' obligations
under Section 9.7, shall survive the payment in full of the Loans and the Letter
of Credit Liabilities and the termination of this Agreement.
SECTION 10.18 HEADINGS DESCRIPTIVE. The headings of the several sections and
subsections of this Agreement, and the table of contents, are inserted for
convenience only and shall not in any way affect the meaning or construction of
any provision of this Agreement.
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SECTION 10.19 EXCULPATION PROVISIONS. Each of the parties hereto specifically
agrees that it has a duty to read this Agreement and the other Financing
Documents and agrees that it is charged with notice and knowledge of the terms
of this Agreement and the other Financing Documents; that it has in fact read
this Agreement and is fully informed and has full notice and knowledge of the
terms, conditions and effects of this Agreement; that it has been represented by
legal counsel of its choice throughout the negotiations preceding its execution
of this Agreement and the other Financing Documents; and has received the advice
of its attorneys in entering into this Agreement and the other Financing
Documents; and that it recognizes that certain of the terms of this Agreement
and the other Financing Documents result in one party assuming the liability
inherent in some aspects of the transaction and relieving the other party of its
responsibility for such liability. Each party hereto agrees and covenants that
it will not contest the validity or enforceability of any exculpatory provision
of this Agreement and the other Financing Documents on the basis that the party
had no notice or knowledge of such provision or that the provision is not
"conspicuous."
SECTION 10.20 SECURED AFFILIATE; CASH MANAGEMENT AFFILIATE. For purposes of this
Agreement and all other Financing Documents (other than applicable Swap
Agreements and Cash Management Agreements), if a Secured Affiliate or Cash
Management Affiliate of a Lender has entered into one or more Swap Agreements or
Cash Management Agreements with any Credit Party, then to the extent that such
Secured Affiliate or Cash Management Affiliate has rights against or is owed
obligations by (or if the affiliated Lender, rather than the Secured Affiliate
or Cash Management Affiliate, were the counter-party to the applicable Swap
Agreement or the other party to the applicable Cash Management Agreement, such
rights or obligations that such Lender has) the Borrowers hereunder or under any
other Financing Document (other than applicable Swap Agreements and Cash
Management Agreements), such affiliated Lender shall be the agent and
attorney-in-fact for such Secured Affiliate or Cash Management Affiliate with
regard to any such rights and obligations, or deemed rights and obligations, as
if such Lender were the counter-party to the applicable Swap Agreement or the
other party to the applicable Cash Management Agreement including, but not
limited to, the following: (a) all distributions or payments in respect of
Collateral owing to such Secured Affiliate or Cash Management Affiliate shall be
distributed or paid to such Lender, (b) all representations, statements or
disclaimers made herein or in any Financing Document by or to such Lender shall
be deemed to have been made by or to such Secured Affiliate or Cash Management
Affiliate, (c) all obligations incurred by such Lender that would have been
incurred by the Secured Affiliate or Cash Management Affiliate if it were a
party hereto (including, but not limited to, obligations under Section 9.6)
shall be the obligations of such Lender, and such Lender, as the agent and
attorney-in-fact of its Secured Affiliate or Cash Management Affiliate, will
make any and all payments owing to the Administrative Agent with respect to such
obligations or deemed obligations of its Secured Affiliate or Cash Management
Affiliate. Each such Lender represents, warrants and covenants to and with the
Administrative Agent and the Canadian Administrative Agent that such Lender has,
or at all applicable times will have, full power and authority to act as Agent
and attorney-in-fact for its Secured Affiliates or Cash Management Affiliates.
Under no circumstance shall any Secured Affiliate or Cash Management Affiliate
have any voting rights hereunder and the voting rights of any affiliated Lender
shall not be increased by virtue of the obligations owing to any such Secured
Affiliate or Cash Management Affiliate.
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IN WITNESS WHEREOF, the parties hereto have caused this
instrument to be duly executed as of the date first above written.
[REMAINDER OF PAGE INTENTIONALLY LEFT BLANK.]
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SIGNATURE PAGE
TO
CREDIT AGREEMENT
DATED JUNE 20, 2003
BY AND AMONG
GERDAU AMERISTEEL CORPORATION AND CERTAIN OF ITS SUBSIDIARIES, AS BORROWERS,
THE CIT GROUP/BUSINESS CREDIT, INC., AS THE ADMINISTRATIVE AGENT,
CIT BUSINESS CREDIT CANADA INC., AS THE CANADIAN ADMINISTRATIVE AGENT,
BANK OF AMERICA, N.A, AS THE SYNDICATION AGENT,
BANC OF AMERICA SECURITIES, LLC., AS CO-LEAD ARRANGER AND CO-BOOK RUNNER,
J.P. MORGAN SECURITIES INC., AS THE CO-DOCUMENTATION AGENT AND CO-BOOK RUNNER,
GE CANADA FINANCE INC., AS THE CO-DOCUMENTATION AGENT
AND FINANCIAL INSTITUTIONS PARTIES THERETO, AS THE LENDERS
US BORROWERS: GERDAU AMERISTEEL PERTH AMBOY,
INC.
By: /s/ Glen Beeby
---------------------------------------
Name: Glen Beeby
-------------------------------------
Title: VP, Secretary, Treasurer & CFO
------------------------------------
GERDAU AMERISTEEL SAYREVILLE INC.
By: /s/ Glen Beeby
---------------------------------------
Name: Glen Beeby
-------------------------------------
Title: VP, Secretary, Treasurer & CFO
------------------------------------
GERDAU AMERISTEEL LAKE ONTARIO INC.
By: /s/ Glen Beeby
---------------------------------------
Name: Glen Beeby
-------------------------------------
Title: VP, Secretary, Treasurer & CFO
------------------------------------
MFT ACQUISITION CORP.
By: /s/ Glen Beeby
---------------------------------------
Name: Glen Beeby
-------------------------------------
Title: Assistant Secretary
------------------------------------
PORTER BROS. CORPORATION
By: /s/ Glen Beeby
---------------------------------------
Name: Glen Beeby
-------------------------------------
Title: Secretary & Treasurer
------------------------------------
GERDAU AMERISTEEL US INC.
By: /s/ Glen Beeby
---------------------------------------
Name: Glen Beeby
-------------------------------------
Title: Assistant Secretary
------------------------------------
SIGNATURE PAGE
TO
CREDIT AGREEMENT
DATED JUNE 20, 2003
BY AND AMONG
GERDAU AMERISTEEL CORPORATION AND CERTAIN OF ITS SUBSIDIARIES, AS BORROWERS,
THE CIT GROUP/BUSINESS CREDIT, INC., AS THE ADMINISTRATIVE AGENT,
CIT BUSINESS CREDIT CANADA INC., AS THE CANADIAN ADMINISTRATIVE AGENT,
BANK OF AMERICA, N.A, AS THE SYNDICATION AGENT,
BANC OF AMERICA SECURITIES, LLC., AS CO-LEAD ARRANGER AND CO-BOOK RUNNER,
J.P. MORGAN SECURITIES INC., AS THE CO-DOCUMENTATION AGENT AND CO-BOOK RUNNER,
GE CANADA FINANCE INC., AS THE CO-DOCUMENTATION AGENT
AND FINANCIAL INSTITUTIONS PARTIES THERETO, AS THE LENDERS
GUSAP PARTNERS, BY ITS PARTNERS GERDAU
AMERISTEEL CAMBRIDGE INC.
By: /s/ Glen Beeby
---------------------------------------
Name: Glen Beeby
-------------------------------------
Title: President
------------------------------------
and
GERDAU AMERISTEEL MRM SPECIAL SECTIONS INC.
By: /s/ Glen Beeby
---------------------------------------
Name: Glen Beeby
-------------------------------------
Title: Secretary & Treasurer
------------------------------------
GERDAU AMERISTEEL DISTRIBUTION US INC.
By: /s/ Glen Beeby
---------------------------------------
Name: Glen Beeby
-------------------------------------
Title: Treasurer
------------------------------------
PASUG LLC
By: /s/ Glen Beeby
---------------------------------------
Name: Glen Beeby
-------------------------------------
Title: Assistant Secretary
------------------------------------
SIGNATURE PAGE
TO
CREDIT AGREEMENT
DATED JUNE 20, 2003
BY AND AMONG
GERDAU AMERISTEEL CORPORATION AND CERTAIN OF ITS SUBSIDIARIES, AS BORROWERS,
THE CIT GROUP/BUSINESS CREDIT, INC., AS THE ADMINISTRATIVE AGENT,
CIT BUSINESS CREDIT CANADA INC., AS THE CANADIAN ADMINISTRATIVE AGENT,
BANK OF AMERICA, N.A, AS THE SYNDICATION AGENT,
BANC OF AMERICA SECURITIES, LLC., AS CO-LEAD ARRANGER AND CO-BOOK RUNNER,
J.P. MORGAN SECURITIES INC., AS THE CO-DOCUMENTATION AGENT AND CO-BOOK RUNNER,
GE CANADA FINANCE INC., AS THE CO-DOCUMENTATION AGENT
AND FINANCIAL INSTITUTIONS PARTIES THERETO, AS THE LENDERS
CANADIAN BORROWERS: GERDAU AMERISTEEL CORPORATION
By: /s/ Glen Beeby
---------------------------------------
Name: Glen Beeby
-------------------------------------
Title: VP Cambridge Mill, VP Administration
Canada & Assistant Secretary
------------------------------------
GERDAU AMERISTEEL CAMBRIDGE INC.
By: /s/ Glen Beeby
---------------------------------------
Name: Glen Beeby
-------------------------------------
Title: Secretary & Treasurer
------------------------------------
GERDAU AMERISTEEL DISTRIBUTION CANADA LTD.
By: /s/ Glen Beeby
---------------------------------------
Name: Glen Beeby
-------------------------------------
Title: Treasurer
------------------------------------
GERDAU AMERISTEEL MRM SPECIAL SECTIONS INC.
By: /s/ Glen Beeby
---------------------------------------
Name: Glen Beeby
-------------------------------------
Title: Secretary & Treasurer
------------------------------------
Address for notice for all Borrowers:
5100 WEST LEMON STREET, SUITE 312
TAMPA, FLORIDA 33609
Attn: Tom Landa
-------------------------------------
Fax: 813-207-2300
--------------------------------------
Phone: 813-207-2328
------------------------------------
SIGNATURE PAGE
TO
CREDIT AGREEMENT
DATED JUNE 20, 2003
BY AND AMONG
GERDAU AMERISTEEL CORPORATION AND CERTAIN OF ITS SUBSIDIARIES, AS BORROWERS,
THE CIT GROUP/BUSINESS CREDIT, INC., AS THE ADMINISTRATIVE AGENT,
CIT BUSINESS CREDIT CANADA INC., AS THE CANADIAN ADMINISTRATIVE AGENT,
BANK OF AMERICA, N.A, AS THE SYNDICATION AGENT,
BANC OF AMERICA SECURITIES, LLC., AS CO-LEAD ARRANGER AND CO-BOOK RUNNER,
J.P. MORGAN SECURITIES INC., AS THE CO-DOCUMENTATION AGENT AND CO-BOOK RUNNER,
GE CANADA FINANCE INC., AS THE CO-DOCUMENTATION AGENT
AND FINANCIAL INSTITUTIONS PARTIES THERETO, AS THE LENDERS
LENDERS: THE CIT GROUP/BUSINESS CREDIT, INC.,
as the Administrative Agent, the Collateral
Agent and the Co-Lead Arranger and a US
Revolving Lender
By: /s/ Neal Mulford
------------------------------------
Name: Neal Mulford
------------------------------------
Title: Vice President
------------------------------------
Address: 90 Ashwood Parkway, Atlanta, GA
Attention: Neal Mulford
Telephone: (770) 522-7672
Telecopy: (770) 522-7673
SIGNATURE PAGE
TO
CREDIT AGREEMENT
DATED JUNE 20, 2003
BY AND AMONG
GERDAU AMERISTEEL CORPORATION AND CERTAIN OF ITS SUBSIDIARIES, AS BORROWERS,
THE CIT GROUP/BUSINESS CREDIT, INC., AS THE ADMINISTRATIVE AGENT,
CIT BUSINESS CREDIT CANADA INC., AS THE CANADIAN ADMINISTRATIVE AGENT,
BANK OF AMERICA, N.A, AS THE SYNDICATION AGENT,
BANC OF AMERICA SECURITIES, LLC., AS CO-LEAD ARRANGER AND CO-BOOK RUNNER,
J.P. MORGAN SECURITIES INC., AS THE CO-DOCUMENTATION AGENT AND CO-BOOK RUNNER,
GE CANADA FINANCE INC., AS THE CO-DOCUMENTATION AGENT
AND FINANCIAL INSTITUTIONS PARTIES THERETO, AS THE LENDERS
CIT BUSINESS CREDIT CANADA INC., as the
Canadian Administrative Agent, the Canadian
Collateral Agent, the Co-Lead Arranger and
a Canadian Revolving Lender
By: /s/ Dennis McCluskey
------------------------------------
Name: Dennis McCluskey
------------------------------------
Title: President & CEO
------------------------------------
Address: 207 Queens Quay West, Toronto, Ontario
Attention: Dennis McCluskey
Telephone: (416) 507-2400
Telecopy: (416) 507-5120
SIGNATURE PAGE
TO
CREDIT AGREEMENT
DATED JUNE 20, 2003
BY AND AMONG
GERDAU AMERISTEEL CORPORATION AND CERTAIN OF ITS SUBSIDIARIES, AS BORROWERS,
THE CIT GROUP/BUSINESS CREDIT, INC., AS THE ADMINISTRATIVE AGENT,
CIT BUSINESS CREDIT CANADA INC., AS THE CANADIAN ADMINISTRATIVE AGENT,
BANK OF AMERICA, N.A, AS THE SYNDICATION AGENT,
BANC OF AMERICA SECURITIES, LLC., AS CO-LEAD ARRANGER AND CO-BOOK RUNNER,
J.P. MORGAN SECURITIES INC., AS THE CO-DOCUMENTATION AGENT AND CO-BOOK RUNNER,
GE CANADA FINANCE INC., AS THE CO-DOCUMENTATION AGENT
AND FINANCIAL INSTITUTIONS PARTIES THERETO, AS THE LENDERS
BANK OF AMERICA, N.A., as the Syndication
Agent and as a US Revolving Lender
By: /s/ Bob Walker
------------------------------------
Name: Bob Walker
------------------------------------
Title: SVP
------------------------------------
Address: 600 Peachtree Street, Atlanta, GA
Attention:
Telephone: 404-607-5387
Telecopy:
SIGNATURE PAGE
TO
CREDIT AGREEMENT
DATED JUNE 20, 2003
BY AND AMONG
GERDAU AMERISTEEL CORPORATION AND CERTAIN OF ITS SUBSIDIARIES, AS BORROWERS,
THE CIT GROUP/BUSINESS CREDIT, INC., AS THE ADMINISTRATIVE AGENT,
CIT BUSINESS CREDIT CANADA INC., AS THE CANADIAN ADMINISTRATIVE AGENT,
BANK OF AMERICA, N.A, AS THE SYNDICATION AGENT,
BANC OF AMERICA SECURITIES, LLC., AS CO-LEAD ARRANGER AND CO-BOOK RUNNER,
J.P. MORGAN SECURITIES INC., AS THE CO-DOCUMENTATION AGENT AND CO-BOOK RUNNER,
GE CANADA FINANCE INC., AS THE CO-DOCUMENTATION AGENT
AND FINANCIAL INSTITUTIONS PARTIES THERETO, AS THE LENDERS
BANK OF AMERICA, N.A. (ACTING THROUGH ITS
CANADIAN BRANCH), as a Canadian Revolving
Lender
By: /s/ Jeffrey D. Burton
-------------------------------------------
Name: Jeffrey D. Burton
-------------------------------------------
Title: Vice President
-------------------------------------------
Address: 200 Front Street West, Toronto, Ontario
Attention: Teresa Tsui
Telephone: (416) 349-5390
Telecopy: (416) 349-4282
SIGNATURE PAGE
TO
CREDIT AGREEMENT
DATED JUNE 20, 2003
BY AND AMONG
GERDAU AMERISTEEL CORPORATION AND CERTAIN OF ITS SUBSIDIARIES, AS BORROWERS,
THE CIT GROUP/BUSINESS CREDIT, INC., AS THE ADMINISTRATIVE AGENT,
CIT BUSINESS CREDIT CANADA INC., AS THE CANADIAN ADMINISTRATIVE AGENT,
BANK OF AMERICA, N.A, AS THE SYNDICATION AGENT,
BANC OF AMERICA SECURITIES, LLC., AS CO-LEAD ARRANGER AND CO-BOOK RUNNER,
J.P. MORGAN SECURITIES INC., AS THE CO-DOCUMENTATION AGENT AND CO-BOOK RUNNER,
GE CANADA FINANCE INC., AS THE CO-DOCUMENTATION AGENT
AND FINANCIAL INSTITUTIONS PARTIES THERETO, AS THE LENDERS
JPMORGAN CHASE BANK (TORONTO BRANCH),
as a Canadian Revolving Lender
By: /s/ James H. Ramage
------------------------------------
Name: James H. Ramage
------------------------------------
Title: Managing Director
------------------------------------
Address: 4th Floor, 270 Park Avenue,
New York, NY
Attention: James H. Ramage
Telephone: (212) 270-1373
Telecopy: (212) 270-4724
SIGNATURE PAGE
TO
CREDIT AGREEMENT
DATED JUNE 20, 2003
BY AND AMONG
GERDAU AMERISTEEL CORPORATION AND CERTAIN OF ITS SUBSIDIARIES, AS BORROWERS,
THE CIT GROUP/BUSINESS CREDIT, INC., AS THE ADMINISTRATIVE AGENT,
CIT BUSINESS CREDIT CANADA INC., AS THE CANADIAN ADMINISTRATIVE AGENT,
BANK OF AMERICA, N.A, AS THE SYNDICATION AGENT,
BANC OF AMERICA SECURITIES, LLC., AS CO-LEAD ARRANGER AND CO-BOOK RUNNER,
J.P. MORGAN SECURITIES INC., AS THE CO-DOCUMENTATION AGENT AND CO-BOOK RUNNER,
GE CANADA FINANCE INC., AS THE CO-DOCUMENTATION AGENT
AND FINANCIAL INSTITUTIONS PARTIES THERETO, AS THE LENDERS
JPMORGAN CHASE BANK, as a US Revolving
Lender
By: /s/ James H. Ramage
------------------------------------
Name: James H. Ramage
------------------------------------
Title: Managing Director
------------------------------------
Address: 4th Floor, 270 Park Avenue,
New York, NY
Attention: James H. Ramage
Telephone: (212) 270-1373
Telecopy: (212) 270-4724
SIGNATURE PAGE
TO
CREDIT AGREEMENT
DATED JUNE 20, 2003
BY AND AMONG
GERDAU AMERISTEEL CORPORATION AND CERTAIN OF ITS SUBSIDIARIES, AS BORROWERS,
THE CIT GROUP/BUSINESS CREDIT, INC., AS THE ADMINISTRATIVE AGENT,
CIT BUSINESS CREDIT CANADA INC., AS THE CANADIAN ADMINISTRATIVE AGENT,
BANK OF AMERICA, N.A, AS THE SYNDICATION AGENT,
BANC OF AMERICA SECURITIES, LLC., AS CO-LEAD ARRANGER AND CO-BOOK RUNNER,
J.P. MORGAN SECURITIES INC., AS THE CO-DOCUMENTATION AGENT AND CO-BOOK RUNNER,
GE CANADA FINANCE INC., AS THE CO-DOCUMENTATION AGENT
AND FINANCIAL INSTITUTIONS PARTIES THERETO, AS THE LENDERS
GE CANADA FINANCE INC., as the Co-
Documentation Agent, a US Revolving Lender
and a Canadian Revolving Lender
By: /s/ Ellis Gaston
-------------------------------------------------
Name: Ellis Gaston
-----------------------------------------------
Title: VP Risk
----------------------------------------------
Address: 500 West Monroe St., 12th Floor, Chicago, IL
Attention: Catsha Reed
Telephone: (312) 441-6957
Telecopy: (312) 463-3844
SIGNATURE PAGE
TO
CREDIT AGREEMENT
DATED JUNE 20, 2003
BY AND AMONG
GERDAU AMERISTEEL CORPORATION AND CERTAIN OF ITS SUBSIDIARIES, AS BORROWERS,
THE CIT GROUP/BUSINESS CREDIT, INC., AS THE ADMINISTRATIVE AGENT,
CIT BUSINESS CREDIT CANADA INC., AS THE CANADIAN ADMINISTRATIVE AGENT,
BANK OF AMERICA, N.A, AS THE SYNDICATION AGENT,
BANC OF AMERICA SECURITIES, LLC., AS CO-LEAD ARRANGER AND CO-BOOK RUNNER,
J.P. MORGAN SECURITIES INC., AS THE CO-DOCUMENTATION AGENT AND CO-BOOK RUNNER,
GE CANADA FINANCE INC., AS THE CO-DOCUMENTATION AGENT
AND FINANCIAL INSTITUTIONS PARTIES THERETO, AS THE LENDERS
LASALLE BUSINESS CREDIT LLC, as a US
Revolving Lender
By: /s/ Bruce Denby
----------------------------------------------------
Name: Bruce Denby
--------------------------------------------------
Title: Group Senior Vice President
-------------------------------------------------
Address: 135 S. LaSalle St., Suite 425, Chicago IL 60603
Attention: Raphael Shin
Telephone: 312-904-8778
Telecopy: 312-904-6450
SIGNATURE PAGE
TO
CREDIT AGREEMENT
DATED JUNE 20, 2003
BY AND AMONG
GERDAU AMERISTEEL CORPORATION AND CERTAIN OF ITS SUBSIDIARIES, AS BORROWERS,
THE CIT GROUP/BUSINESS CREDIT, INC., AS THE ADMINISTRATIVE AGENT,
CIT BUSINESS CREDIT CANADA INC., AS THE CANADIAN ADMINISTRATIVE AGENT,
BANK OF AMERICA, N.A, AS THE SYNDICATION AGENT,
BANC OF AMERICA SECURITIES, LLC., AS CO-LEAD ARRANGER AND CO-BOOK RUNNER,
J.P. MORGAN SECURITIES INC., AS THE CO-DOCUMENTATION AGENT AND CO-BOOK RUNNER,
GE CANADA FINANCE INC., AS THE CO-DOCUMENTATION AGENT
AND FINANCIAL INSTITUTIONS PARTIES THERETO, AS THE LENDERS
ABN AMRO BANK N.V., CANADA BRANCH,
as a Canadian Revolving Lender
By: /s/ Darcy Mack /s/ Keith Hughes
-----------------------------------------------
Name: Darcy Mack Keith Hughes
-----------------------------------------------
Title: VP Asset Based Lending Senior Vice President
-----------------------------------------------
Address: Suite 1500, Maritime Life Tower
79 Wellington Street West
P.O. Box 114, Toronto Dominion Centre
Toronto, Ontario M5K 1G8
Attention: Darcy Mack
Telephone: (416) 367-7967
Telecopy: (416) 367-7943
SIGNATURE PAGE
TO
CREDIT AGREEMENT
DATED JUNE 20, 2003
BY AND AMONG
GERDAU AMERISTEEL CORPORATION AND CERTAIN OF ITS SUBSIDIARIES, AS BORROWERS,
THE CIT GROUP/BUSINESS CREDIT, INC., AS THE ADMINISTRATIVE AGENT,
CIT BUSINESS CREDIT CANADA INC., AS THE CANADIAN ADMINISTRATIVE AGENT,
BANK OF AMERICA, N.A, AS THE SYNDICATION AGENT,
BANC OF AMERICA SECURITIES, LLC., AS CO-LEAD ARRANGER AND CO-BOOK RUNNER,
J.P. MORGAN SECURITIES INC., AS THE CO-DOCUMENTATION AGENT AND CO-BOOK RUNNER,
GE CANADA FINANCE INC., AS THE CO-DOCUMENTATION AGENT
AND FINANCIAL INSTITUTIONS PARTIES THERETO, AS THE LENDERS
THE TORONTO-DOMINION BANK, as a
Canadian Revolving Lender
By: /s/ Gary Nevison /s/ Craig Scott
-------------------- -----------------
Name: Gary Nevison Craig Scott
------------------ -----------------
Title: Vice President Managing Director
----------------- -----------------
Address: 66 Wellington St. W., 8th Floor
Toronto, Ontario M5K 1A2
Attention: Gary Nevison
Telephone: (416) 308-0015
Telecopy: (416) 944-5630
TORONTO DOMINION (TEXAS), INC., as a
US Revolving Lender
By: /s/ Debbie A. Greene
---------------------------------------
Name: Debbie A. Greene
-------------------------------------
Title: Vice President
------------------------------------
Address: 909 Fannin, 17th Flr.,
Houston, TX 77010
Attention: Debbie A. Greene
Telephone: 713-653-8245
Telecopy: 713-951-9921
ANNEX I
US REVOLVING CREDIT CANADIAN REVOLVING TOTAL REVOLVING CREDIT
LENDER COMMITMENTS CREDIT COMMITMENTS COMMITMENTS
- --------------------------------- ---------------------- ---------------------- ----------------------------------
Bank of America, N.A.* $61,071,428.57 Nil $61,071,428.57
- --------------------------------- ---------------------- ---------------------- ----------------------------------
Bank of America, N.A. (acting Nil $33,928,571.43 $33,928,571.43
through its Canadian Branch)*
- --------------------------------- ---------------------- ---------------------- ----------------------------------
CIT Business Credit Canada Nil $26,785,714.29 $26,785,714.29
Inc.**
- --------------------------------- ---------------------- ---------------------- ----------------------------------
The CIT Group/Business Credit, $48,214.285.71 Nil $48,214,285.71
Inc.**
- --------------------------------- ---------------------- ---------------------- ----------------------------------
JPMorgan Chase Bank*** $38,571,428.57 Nil $38,571,428.57
- --------------------------------- ---------------------- ---------------------- ----------------------------------
JPMorgan Chase Bank (Toronto Nil $21,428,571.43 $21,428,571.43
Branch)***
- --------------------------------- ---------------------- ---------------------- ----------------------------------
GE Canada Finance Inc. $38,571,428.57 $21,428,571.43 $60,000,000.00
- --------------------------------- ---------------------- ---------------------- ----------------------------------
Lasalle Business Credit LLC**** $22,500,000.00 Nil $22,500,000.00
- --------------------------------- ---------------------- ---------------------- ----------------------------------
ABN AMRO Bank N.V., Canada Nil $12,500,000.00 $12,500,000.00
Branch****
- --------------------------------- ---------------------- ---------------------- ----------------------------------
The Toronto-Dominion Bank***** Nil $8,928,571.43 $8,928,571.43
- --------------------------------- ---------------------- ---------------------- ----------------------------------
Toronto Dominion (Texas), $16,071,428.57 Nil $16,071,428.57
Inc.*****
- --------------------------------- ---------------------- ---------------------- ----------------------------------
Total $225,000,000.00 $125,000,000.00 $350,000,000.00
- --------------------------------- ---------------------- ---------------------- ----------------------------------
US SWINGLINE LENDER US SWINGLINE COMMITMENT
--------------------------------------------------------- -------------------------------------------------------
The CIT Group/Business Credit, Inc. $25,000,000
--------------------------------------------------------- -------------------------------------------------------
CANADIAN SWINGLINE LENDER CANADIAN SWINGLINE COMMITMENT
--------------------------------------------------------- -------------------------------------------------------
CIT Business Credit Canada Inc. $15,000,000
--------------------------------------------------------- -------------------------------------------------------
* Related Affiliates
** Related Affiliates
*** Related Affiliates
**** Related Affiliates
***** Related Affiliates
SCHEDULES
- ---------
Schedule 1.1(A) Permitted Reorganizations
Schedule 1.1(B) Projections
Schedule 3.1(h) List of Stock Certificates
Schedule 3.1(i) List of Regulatory Approvals, Consents and Waivers
Schedule 5.10 Canadian Employee Benefits Disclosures
Schedule 5.15 Compliance with Laws
Schedule 5.19 Capital Structure
Schedule 5.20 Insurance
Schedule 5.21 Environmental Matters
Schedule 5.24 Real Property Locations
Schedule 5.26 Indebtedness
Schedule 5.28 Material Contracts
Schedule 7.2 Permitted Indebtedness
Schedule 7.3 Permitted Liens
Schedule 7.6 Permitted Investments
Schedule 7.18 Bank Accounts
EXHIBITS
- --------
Exhibit A Form of Bailee's Letter
Exhibit B-1 Form of US Borrowing Base Report
Exhibit B-2 Form of Canadian Borrowing Base Report
Exhibit C-1 Form of Borrowing Request (US Revolving Credit Loan)
Exhibit C-2 Form of Borrowing Request (Canadian Revolving Credit Loans)
Exhibit C-3 Form of Request for US Letters of Credit
Exhibit C-4 Form of Request for Canadian Letters of Credit
Exhibit C-5 Form of Borrowing Request (US Swingline Loans)
Exhibit D-1 Form of Canadian Revolving Credit Note (C$)
Exhibit D-2 Form of Canadian Revolving Credit Note (US$)
Exhibit E-1 Form of Canadian Swingline Note (C$)
Exhibit E-2 Form of Canadian Swingline Note (US$)
Exhibit F Form of Certificate of Effectiveness
Exhibit G Form of Perfection Certificate and Perfection Certificate Update
Exhibit H Form of US Revolving Credit Note
Exhibit I Form of US Swingline Note
Exhibit J Form of No Default/Compliance Certificate
Exhibit K Form of Assignment and Acceptance
TABLE OF CONTENTS
PAGE
----
ARTICLE 1
DEFINITIONS; CONSTRUCTION
Section 1.1 Definitions....................................................................................2
Section 1.2 Terms Generally...............................................................................43
Section 1.3 Accounting Terms; GAAP........................................................................44
ARTICLE 2
AMOUNT AND TERMS OF LOANS
Section 2.1 Loans and Commitments.........................................................................45
Section 2.2 Borrowing Requests............................................................................48
Section 2.3 Letters of Credit.............................................................................51
Section 2.4 Disbursement of Funds.........................................................................58
Section 2.5 Notes and Maturity............................................................................61
Section 2.6 Interest .....................................................................................62
Section 2.7 Interest Periods..............................................................................63
Section 2.8 Commitment Adjustment Mechanism...............................................................64
Section 2.9 Repayment of Loans............................................................................65
Section 2.10 Voluntary Adjustment, Termination or Reduction of Revolving Credit Commitments; Extensions....68
Section 2.11 Mandatory Prepayments; Voluntary Prepayments; Order of Application............................69
Section 2.12 Continuation and Conversion Options...........................................................74
Section 2.13 Fees..........................................................................................75
Section 2.14 Payments, etc.................................................................................77
Section 2.15 Interest Rate Not Ascertainable, etc..........................................................78
Section 2.16 Illegality....................................................................................78
Section 2.17 Increased Costs...............................................................................80
Section 2.18 Change of Lending Office......................................................................81
Section 2.19 Funding Losses................................................................................81
Section 2.20 Sharing of Payments, etc......................................................................82
Section 2.21 Taxes.........................................................................................83
Section 2.22 Pro Rata Treatment............................................................................84
Section 2.23 Replacement of Lenders........................................................................85
Section 2.24 Advances of Revolving Credit Loans to Satisfy Lender Indebtedness.............................85
Section 2.25 Joint and Several Liability of US Borrowers; Rights of Contribution among US Borrowers........85
Section 2.26 Participations in US Swingline Loans..........................................................87
Section 2.27 Participations in Canadian Swingline Loans....................................................88
Section 2.28 Administrative Agent Advances; Participations.................................................88
Section 2.29 New Appraisals................................................................................90
-i-
TABLE OF CONTENTS
(CONTINUED)
PAGE
----
Section 2.30 65% Advance Rate Period.......................................................................90
Section 2.31 Financing Structure Availability..............................................................91
ARTICLE 3
CONDITIONS TO BORROWINGS
Section 3.1 Closing.......................................................................................93
Section 3.2 Conditions Precedent to All Loans and Letters of Credit.......................................98
ARTICLE 4
SECURITY
Section 4.1 Security Granted by US Credit Parties.........................................................99
Section 4.2 Security Granted by Canadian Credit Parties...................................................99
Section 4.3 Establishment of US Lockbox..................................................................100
Section 4.4 Establishment of Canadian Lockbox............................................................100
Section 4.5 Establishment of US Blocked Account; Dominion and Control; Operation of
US Blocked Account and PASUG Operating Account......................................101
Section 4.6 Establishment of Canadian Blocked Account; Dominion and Control..............................102
ARTICLE 5
REPRESENTATIONS AND WARRANTIES
Section 5.1 Corporate Existence..........................................................................103
Section 5.2 Corporate Power and Authorization............................................................103
Section 5.3 Binding Obligations..........................................................................103
Section 5.4 No Legal Bar or Resultant Lien...............................................................103
Section 5.5 No Consent...................................................................................103
Section 5.6 Financial Information........................................................................104
Section 5.7 Litigation...................................................................................104
Section 5.8 Use of Proceeds; Distribution of Proceeds....................................................104
Section 5.9 US Employee Benefits.........................................................................105
Section 5.10 Canadian Employee Benefits...................................................................106
Section 5.11 Taxes; Governmental Charges..................................................................106
Section 5.12 Titles, etc..................................................................................106
Section 5.13 Defaults.....................................................................................106
Section 5.14 Casualties; Taking of Properties.............................................................107
Section 5.15 Compliance with the Law......................................................................107
Section 5.16 No Material Misstatements....................................................................107
Section 5.17 Investment Company Act.......................................................................107
Section 5.18 Margin Stock; Public Utility Holding Company Act.............................................107
Section 5.19 Capital Structure............................................................................108
Section 5.20 Insurance....................................................................................108
-ii-
TABLE OF CONTENTS
(CONTINUED)
PAGE
----
Section 5.21 Environmental Matters........................................................................108
Section 5.22 Solvency.....................................................................................109
Section 5.23 Employee Matters.............................................................................109
Section 5.24 Real Property................................................................................110
Section 5.25 Perfection Certificate; Schedules to other Financing Documents...............................110
Section 5.26 Existing Indebtedness........................................................................110
Section 5.27 144A Transaction Documents...................................................................110
Section 5.28 Material Contracts...........................................................................110
Section 5.29 [Intentionally Deleted.].....................................................................110
Section 5.30 Accounts.....................................................................................111
Section 5.31 Tax Shelter Registration.....................................................................111
Section 5.32 Representations With Respect to Certain Credit Parties.......................................111
ARTICLE 6
AFFIRMATIVE COVENANTS
Section 6.1 Maintenance and Compliance, etc..............................................................112
Section 6.2 Payment of Taxes and Claims, etc.............................................................112
Section 6.3 Further Assurances...........................................................................112
Section 6.4 [Intentionally Deleted.].....................................................................112
Section 6.5 Insurance....................................................................................112
Section 6.6 Accounts and Records.........................................................................113
Section 6.7 Right of Inspection..........................................................................113
Section 6.8 [Intentionally Deleted.].....................................................................113
Section 6.9 Collateral Reports...........................................................................113
Section 6.10 Reporting Covenants..........................................................................114
Section 6.11 Financing Entities...........................................................................118
Section 6.12 Fixed Charge Coverage Ratio; Minimum Availability............................................120
ARTICLE 7
NEGATIVE COVENANTS
Section 7.1 [Intentionally Deleted.].....................................................................121
Section 7.2 Indebtedness.................................................................................121
Section 7.3 Liens........................................................................................123
Section 7.4 Mergers, Sales, Etc..........................................................................124
Section 7.5 Equity Distributions.........................................................................125
Section 7.6 Investments, Loans, etc......................................................................126
Section 7.7 Sales and Leasebacks.........................................................................127
Section 7.8 Nature of Business...........................................................................128
Section 7.9 ERISA/Pension Compliance.....................................................................128
-iii-
TABLE OF CONTENTS
(CONTINUED)
PAGE
----
Section 7.10 Sale or Discount of Receivables..............................................................129
Section 7.11 Negative Pledge Agreements...................................................................129
Section 7.12 Transactions with Affiliates.................................................................129
Section 7.13 Unconditional Purchase Obligations...........................................................130
Section 7.14 Equity.......................................................................................130
Section 7.15 Capital Expenditures.........................................................................130
Section 7.16 [Intentionally Deleted.].....................................................................130
Section 7.17 Acquisitions; Creation of Subsidiaries.......................................................130
Section 7.18 Accounts.....................................................................................131
Section 7.19 Other Restrictive Agreements.................................................................132
Section 7.20 Modifications to Indebtedness Agreements.....................................................132
Section 7.21 Fiscal Year..................................................................................132
Section 7.22 Modification of 144A Documents...............................................................132
ARTICLE 8
EVENTS OF DEFAULT
Section 8.1 Payments.....................................................................................133
Section 8.2 Other Covenants..............................................................................133
Section 8.3 Other Financing Document Obligations.........................................................133
Section 8.4 Representations..............................................................................133
Section 8.5 Non-Payments of Other Indebtedness...........................................................133
Section 8.6 Defaults Under Other Agreements..............................................................133
Section 8.7 Bankruptcy Under US Law......................................................................134
Section 8.8 Bankruptcy Under Canadian Law................................................................134
Section 8.9 Money Judgment...............................................................................135
Section 8.10 Financing Documents..........................................................................135
Section 8.11 Non-Monetary Judgment........................................................................135
Section 8.12 Asset Seizures...............................................................................135
Section 8.13 Change of Control............................................................................136
Section 8.14 Material Adverse Change......................................................................136
ARTICLE 9
AGENTS
Section 9.1 Appointment of Agents........................................................................137
Section 9.2 Limitation of Duties of Agents...............................................................137
Section 9.3 Lack of Reliance on the Agents...............................................................138
Section 9.4 Certain Rights of the Agents.................................................................138
Section 9.5 Reliance by Agents...........................................................................138
Section 9.6 Notice of Default............................................................................139
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TABLE OF CONTENTS
(CONTINUED)
PAGE
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Section 9.7 Indemnification of Agents....................................................................139
Section 9.8 Agents in their Individual Capacity..........................................................139
Section 9.9 May Treat Lender as Owner....................................................................140
Section 9.10 Payments by Agents to Lenders................................................................140
Section 9.11 Restrictions on Actions by Lenders; Sharing of Payments......................................140
Section 9.12 Successor Agent..............................................................................141
Section 9.13 Co-Documentation Agents......................................................................142
Section 9.14 Syndication Agent............................................................................142
Section 9.15 Field Audit and Examination Reports..........................................................142
Section 9.16 Quebec Security..............................................................................143
Section 9.17 Agency for Perfection........................................................................143
ARTICLE 10
MISCELLANEOUS
Section 10.1 Notices......................................................................................144
Section 10.2 Amendments and Waivers.......................................................................144
Section 10.3 No Waiver; Remedies Cumulative...............................................................146
Section 10.4 Payment of Expenses, Indemnities, etc........................................................146
Section 10.5 Right of Setoff..............................................................................149
Section 10.6 Benefit of Agreement.........................................................................149
Section 10.7 Successors and Assigns; Participations and Assignments.......................................149
Section 10.8 Governing Law; Submission to Jurisdiction; etc...............................................153
Section 10.9 Independent Nature of Lenders' Rights........................................................155
Section 10.10 Invalidity...................................................................................155
Section 10.11 Renewal, Extension or Rearrangement..........................................................155
Section 10.12 Confidentiality..............................................................................155
Section 10.13 Interest ....................................................................................156
Section 10.14 Entire Agreement.............................................................................157
Section 10.15 Attachments..................................................................................157
Section 10.16 Counterparts.................................................................................157
Section 10.17 Survival of Indemnities......................................................................157
Section 10.18 Headings Descriptive.........................................................................157
Section 10.19 Exculpation Provisions.......................................................................158
Section 10.20 Secured Affiliate; Cash Management Affiliate.................................................158
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