EXHIBIT 10.13
CREDIT AND GUARANTY AGREEMENT
DATED AS OF JUNE 4, 2004
AMONG
MAAX CORPORATION,
BEAUCELAND CORPORATION,
CERTAIN SUBSIDIARIES OF BEAUCELAND CORPORATION,
AS GUARANTORS,
VARIOUS LENDERS,
GOLDMAN SACHS CREDIT PARTNERS L.P.,
AS JOINT LEAD ARRANGER, JOINT BOOKRUNNER OF THE TRANCHE B TERM LOANS AND
SYNDICATION AGENT,
ROYAL BANK OF CANADA,
AS ADMINISTRATIVE AGENT AND COLLATERAL AGENT,
RBC CAPITAL MARKETS,
AS JOINT LEAD ARRANGER AND SOLE BOOKRUNNER OF
THE TRANCHE A TERM LOANS AND REVOLVING LOANS,
AND
MERRILL LYNCH & CO.,
MERRILL LYNCH, PIERCE, FENNER &
SMITH INCORPORATED,
AS JOINT LEAD ARRANGER, JOINT BOOKRUNNER OF THE TRANCHE B TERM LOANS AND
DOCUMENTATION AGENT
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CAN$130.0 MILLION SENIOR SECURED TRANCHE A TERM LOAN FACILITY
U.S.$115.0 MILLION SENIOR SECURED TRANCHE B TERM LOAN FACILITY
CAN$50.0 MILLION SENIOR SECURED REVOLVING FACILITY
- --------------------------------------------------------------------------------
TABLE OF CONTENTS
PAGE
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SECTION 1. DEFINITIONS AND INTERPRETATION.............................................................. 2
1.1. Definitions................................................................................. 2
1.2. Accounting Terms............................................................................ 45
1.3. Interpretation, etc......................................................................... 45
SECTION 2. LOANS AND LETTERS OF CREDIT................................................................. 46
2.1. Term Loans.................................................................................. 46
2.2. Revolving Loans............................................................................. 47
2.3. Bankers' Acceptances........................................................................ 48
2.4. Swing Line Loans............................................................................ 55
2.5. Issuance of Letters of Credit and Purchase of Participations Therein........................ 60
2.6. Pro Rata Shares; Availability of Funds...................................................... 66
2.7. Use of Proceeds............................................................................. 67
2.8. Evidence of Debt; Register; Lenders' Books and Records; Notes............................... 67
2.9. Interest on Loans........................................................................... 68
2.10. Interest Act Disclosure..................................................................... 71
2.11. Conversion/Continuation..................................................................... 71
2.12. Default Interest............................................................................ 73
2.13. Fees ...................................................................................... 74
2.14. Scheduled Installments...................................................................... 75
2.15. Voluntary Prepayments/Commitment Reductions................................................. 76
2.16. Offers to Prepay and Mandatory Prepayments/Commitment Reductions............................ 78
2.17. Application of Prepayments/Reductions....................................................... 80
2.18. General Provisions Regarding Payments....................................................... 82
2.19. Ratable Sharing............................................................................. 83
2.20. Making or Maintaining Eurodollar Rate Loans................................................. 84
2.21. Increased Costs; Capital Adequacy........................................................... 86
2.22. Taxes; Withholding, etc..................................................................... 87
2.23. Obligation to Mitigate...................................................................... 90
2.24. Defaulting Lenders.......................................................................... 91
2.25. Removal or Replacement of a Lender.......................................................... 91
2.26. Incremental Facilities...................................................................... 92
2.27. Application of Funds........................................................................ 94
SECTION 3. CONDITIONS PRECEDENT........................................................................ 94
3.1. Closing Date................................................................................ 94
3.2. Conditions to Each Credit Extension......................................................... 100
SECTION 4. REPRESENTATIONS AND WARRANTIES.............................................................. 101
4.1. Organization; Requisite Power and Authority; Qualification.................................. 102
4.2. Capital Stock and Ownership................................................................. 102
4.3. Due Authorization........................................................................... 102
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4.4. No Conflict................................................................................. 102
4.5. Governmental Consents....................................................................... 103
4.6. Binding Obligation.......................................................................... 103
4.7. Historical Financial Statements............................................................. 103
4.8. Projections................................................................................. 103
4.9. No Material Adverse Change.................................................................. 103
4.10. No Restricted Junior Payments............................................................... 104
4.11. Adverse Proceedings, etc.................................................................... 104
4.12. Payment of Taxes............................................................................ 104
4.13. Properties.................................................................................. 105
4.14. Environmental Matters....................................................................... 105
4.15. No Defaults................................................................................. 106
4.16. Material Contracts.......................................................................... 106
4.17. Governmental Regulation..................................................................... 106
4.18. Margin Stock................................................................................ 106
4.19. Employee Matters............................................................................ 106
4.20. Employee Benefit Plans...................................................................... 107
4.21. Certain Fees................................................................................ 108
4.22. Solvency.................................................................................... 108
4.23. Related Agreements.......................................................................... 108
4.24. Compliance with Statutes, etc............................................................... 108
4.25. Disclosure.................................................................................. 109
4.26. Intellectual Property....................................................................... 109
4.27. Anti Terrorism Law.......................................................................... 110
4.28. Subordination of Senior Subordinated Notes.................................................. 110
SECTION 5. AFFIRMATIVE COVENANTS....................................................................... 110
5.1. Financial Statements and Other Reports...................................................... 111
5.2. Existence................................................................................... 115
5.3. Payment of Taxes and Claims................................................................. 115
5.4. Maintenance of Properties................................................................... 115
5.5. Insurance................................................................................... 115
5.6. Inspections................................................................................. 116
5.7. Lenders Meetings............................................................................ 116
5.8. Compliance with Laws........................................................................ 116
5.9. Environmental............................................................................... 116
5.10. Subsidiaries................................................................................ 118
5.11. Additional Real Estate Assets............................................................... 119
5.12. Interest Rate Protection.................................................................... 120
5.13. Further Assurances.......................................................................... 120
5.14. Leasehold Properties........................................................................ 120
5.15. Post Closing Obligations.................................................................... 121
SECTION 6. NEGATIVE COVENANTS.......................................................................... 122
6.1. Indebtedness................................................................................ 122
6.2. Liens ...................................................................................... 123
6.3. Equitable Lien.............................................................................. 126
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6.4. No Further Negative Pledges................................................................. 126
6.5. Restricted Junior Payments.................................................................. 126
6.6. Restrictions on Subsidiary Distributions.................................................... 128
6.7. Investments................................................................................. 128
6.8. Financial Covenants......................................................................... 129
6.9. Fundamental Changes; Disposition of Assets; Acquisitions.................................... 131
6.10. Transactions with Shareholders and Affiliates............................................... 133
6.11. Conduct of Business......................................................................... 134
6.12. Permitted Activities of Parent Companies.................................................... 134
6.13. Amendments or Waivers of Certain Related Agreements......................................... 134
6.14. Amendments or Waivers of or with Respect to Subordinated Indebtedness....................... 135
6.15. Fiscal Year................................................................................. 135
6.16. Anti Terrorism Law; Anti Money Laundering................................................... 135
6.17. Embargoed Person............................................................................ 135
6.18. Designated Senior Debt...................................................................... 136
6.19. Intercompany Debt Transactions.............................................................. 136
6.20. Account Maintenance......................................................................... 136
SECTION 7. GUARANTY ................................................................................... 136
7.1. Guaranty of the Obligations................................................................. 136
7.2. Contribution by Guarantors.................................................................. 136
7.3. Payment by Guarantors....................................................................... 137
7.4. Liability of Guarantors Absolute............................................................ 137
7.5. Waivers by Guarantors....................................................................... 139
7.6. Guarantors' Rights of Subrogation, Contribution, etc........................................ 140
7.7. Subordination of Other Obligations.......................................................... 141
7.8. Continuing Guaranty......................................................................... 141
7.9. Authority of Guarantors or Company.......................................................... 141
7.10. Financial Condition of Company.............................................................. 141
7.11. Bankruptcy, etc............................................................................. 142
7.12. Discharge of Guaranty....................................................................... 142
SECTION 8. EVENTS OF DEFAULT........................................................................... 143
8.1. Events of Default........................................................................... 143
SECTION 9. AGENTS ..................................................................................... 146
9.1. Appointment of the Agents................................................................... 146
9.2. Powers and Duties; General Immunity......................................................... 147
9.3. Independent Investigation by Lenders; No Responsibility for Appraisal of Creditworthiness... 149
9.4. Right to Indemnity.......................................................................... 150
9.5. Successor Agent, Swing Line Lender and Issuing Bank......................................... 150
9.6. Collateral Documents and Guaranties......................................................... 151
9.7. Administrative Agent May File Proofs of Claim............................................... 152
SECTION 10. MISCELLANEOUS............................................................................... 153
10.1. Notices..................................................................................... 153
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10.2. Expenses.................................................................................... 153
10.3. Indemnity................................................................................... 154
10.4. Set Off..................................................................................... 155
10.5. Amendments and Waivers...................................................................... 155
10.6. Successors and Assigns; Participations...................................................... 157
10.7. Canadian Dollar Equivalent Calculations..................................................... 160
10.8. Judgment Currency........................................................................... 161
10.9. Independence of Covenants................................................................... 161
10.10. Survival of Representations, Warranties and Agreements...................................... 161
10.11. No Waiver; Remedies Cumulative.............................................................. 162
10.12. Marshalling; Payments Set Aside............................................................. 162
10.13. Severability................................................................................ 162
10.14. Obligations Several; Independent Nature of Lenders' Rights.................................. 162
10.15. Headings.................................................................................... 163
10.16. APPLICABLE LAW.............................................................................. 163
10.17. CONSENT TO JURISDICTION..................................................................... 163
10.18. WAIVER OF JURY TRIAL........................................................................ 163
10.19. Confidentiality............................................................................. 164
10.20. Usury Savings Clause........................................................................ 164
10.21. Posting..................................................................................... 165
10.22. Counterparts................................................................................ 166
10.23. Effectiveness............................................................................... 166
APPENDICES:
A-1 Tranche A Term Loan Commitments
A-2 Tranche B Term Loan Commitments
A-3 Revolving Commitments
B Notice Addresses
C Eligible Assignees
D Existing Letters of Credit
SCHEDULES:
1.1 Investors
3.1(g) Closing Date Mortgaged Properties
4.1 Jurisdictions of Organization
4.2 Capital Stock and Ownership
4.12 Taxes
4.13 Real Estate Assets
4.16 Material Contracts
4.26 Intellectual Property
6.1 Certain Indebtedness
6.2 Certain Liens
6.7 Certain Investments
6.10 Certain Transactions
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EXHIBITS:
A-1 Funding Notice
A-2 Conversion/Continuation Notice
A-3 Issuance Notice
B-1 Tranche A Term Loan Note
B-2 Tranche B Term Loan Note
B-3 Revolving Loan Note
B-4 BA Discount Note
B-5 Swing Line Note
C Compliance Certificate
D-1 Opinion of Kaye Scholer LLP
D-2 Opinion of Fasken Martineau DuMoulin LLP
D-3 Opinion of McInnes Cooper
D-4 Opinion of Pennsylvania counsel
D-5 Opinion of Minnesota counsel
D-6 Opinion of Washington counsel
D-7 Opinion of Indiana counsel
D-8 Opinion of California counsel
D-9 Opinion of Georgia counsel
D-10 Opinion of West Virginia counsel
D-11 Opinion of Arizona counsel
E Assignment Agreement
F Certificate re Non-Bank Status
G-1 Closing Date Certificate
G-2 Solvency Certificate
H Counterpart Agreement
I-1 U.S. Security Agreement
I-2 Canadian Security Agreement
I-3 Quebec Security Documents
J-1 U.S. Mortgage
J-2 Canadian Mortgage
K Landlord Waiver and Consent Agreement
L Joinder Agreement
M-1 Perfection Certificate
M-2 Perfection Certificate Supplement
N Intercompany Note
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CREDIT AND GUARANTY AGREEMENT
This CREDIT AND GUARANTY AGREEMENT, dated as of June 4, 2004, is entered
into by and among MAAX CORPORATION, a Nova Scotia unlimited company ("COMPANY"),
BEAUCELAND CORPORATION, a Nova Scotia unlimited company ("HOLDINGS"), CERTAIN
SUBSIDIARIES OF HOLDINGS, as Guarantors, the Lenders party hereto from time to
time, GOLDMAN SACHS CREDIT PARTNERS L.P. ("GSCP"), as Joint Lead Arranger and as
Syndication Agent (in such capacity, "SYNDICATION AGENT"), ROYAL BANK OF CANADA
("RBC"), as Administrative Agent (together with its permitted successors in such
capacity, "ADMINISTRATIVE AGENT") and as Collateral Agent (together with its
permitted successors in such capacity, "COLLATERAL AGENT"), ROYAL BANK OF
CANADA, ACTING THROUGH ITS BUSINESS GROUP RBC CAPITAL MARKETS ("RBCCM"), as
Joint Lead Arranger, and MERRILL LYNCH & CO., MERRILL LYNCH, PIERCE, FENNER &
SMITH INCORPORATED ("MLPF&S"), as Joint Lead Arranger (in such capacity,
together with RBCCM and GSCP as joint lead arrangers, the "JOINT LEAD
ARRANGERS") and as Documentation Agent (in such capacity, "DOCUMENTATION
AGENT").
RECITALS:
WHEREAS, capitalized terms used in these Recitals shall have the
respective meanings set forth for such terms in Section 1.1 hereof;
WHEREAS, Lenders have agreed to extend to Company certain credit
facilities consisting of Can$130.0 million aggregate principal amount of Tranche
A Term Loans, U.S.$115.0 million aggregate principal amount of Tranche B Term
Loans, and Can$50.0 million aggregate principal amount of Revolving Commitments;
WHEREAS, on the Closing Date, the proceeds of the Term Loans and up to
Can$20.0 million of Revolving Loans and Swing Line Loans shall be used to fund,
in part, the Acquisition (including refinancing or retiring certain existing
debt of the Acquired Business and its Subsidiaries and redeeming any preferred
stock of the Acquired Business) and pay fees, commissions and expenses in
connection with the Transactions;
WHEREAS, on the Closing Date, the Existing Letters of Credit shall remain
outstanding and shall be deemed to have been issued hereunder and governed by
the terms and conditions hereof;
WHEREAS, after the Closing Date, the proceeds of the Revolving Loans shall
be used to provide for the ongoing working capital requirements and for general
corporate purposes of Company, the Guarantor Subsidiaries and their
Subsidiaries;
WHEREAS, Company has agreed to secure all of its Obligations by granting
to Collateral Agent, for the benefit of Secured Parties, a First Priority Lien
on substantially all of its assets, including a pledge of all of the Capital
Stock of each Guarantor Subsidiary held by it, 65% of all the Capital Stock of
each of its Foreign Subsidiaries and all of its intercompany indebtedness; and
WHEREAS, Guarantors have agreed to guarantee the obligations of Company
hereunder and to secure their respective Obligations by granting to Collateral
Agent, for the benefit of Secured Parties, a First Priority Lien on
substantially all of their respective assets, including a pledge of all of the
Capital Stock of each of their respective Subsidiaries that is Company or a
Guarantor, 65% of all the Capital Stock of each of their respective Foreign
Subsidiaries and all of their intercompany indebtedness.
NOW, THEREFORE, in consideration of the premises and the agreements,
provisions and covenants herein contained, the parties hereto agree as follows:
SECTION 1. DEFINITIONS AND INTERPRETATION
1.1. DEFINITIONS. The following terms used herein, including in the
preamble, recitals, exhibits and schedules hereto, shall have the following
meanings:
"ACQUIRED BUSINESS" means MAAX Inc., a company organized under the laws of
the Province of Quebec.
"ACQUISITION" means the acquisition of the Acquired Business pursuant to
the Merger Agreement.
"ADJUSTED CANADIAN EURODOLLAR RATE" means, for any Interest Rate
Determination Date with respect to an Interest Period for a Canadian Eurodollar
Rate Loan, the rate per annum obtained by dividing (and rounding upward to the
next whole multiple of 1/16 of 1%) (i) (a) the rate per annum (rounded to the
nearest 1/100 of 1%) equal to the rate determined by Administrative Agent to be
the offered rate which appears on the Reuters LIBOR 01 page, or if such page is
not available, the page of the Telerate Screen (currently being page number 3740
or 3750, as applicable) which displays an average British Bankers Association
Interest Settlement Rate for deposits in Canadian Dollars (for delivery on the
first day of such period) with a term equivalent to such period, determined as
of approximately 11:00 a.m. (London, England time) on such Interest Rate
Determination Date, or (b) in the event the rate referenced in the preceding
clause (a) does not appear on such pages or services or if such pages or
services shall cease to be available, the rate per annum (rounded to the nearest
1/100 of 1%) equal to the rate determined by Administrative Agent to be the
offered rate on such other page or other service which displays an average
British Bankers Association Interest Settlement Rate for deposits in Canadian
Dollars (for delivery on the first day of such period) with a term equivalent to
such period, determined as of approximately 11:00 a.m. (London, England time) on
such Interest Rate Determination Date, or (c) in the event the rates referenced
in the preceding clauses (a) and (b) are not available, the rate per annum
(rounded to the nearest 1/100 of 1%) equal to the offered quotation rate to
first class banks in the London interbank market by Administrative Agent for
deposits (for delivery on the first day of the relevant period) in Canadian
Dollars of amounts in same day funds comparable to the principal amount of the
applicable Loan for which the Adjusted Canadian Eurodollar Rate is then being
determined with maturities comparable to such period as of approximately 11:00
a.m. (London, England time) on such Interest Rate Determination Date, by (ii) an
amount equal to (a) one minus (b) the Applicable Reserve Requirement.
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"ADJUSTED EURODOLLAR RATE" means, for any Interest Rate Determination Date
with respect to an Interest Period for a Eurodollar Rate Loan, the rate per
annum obtained by dividing (and rounding upward to the next whole multiple of
1/16 of 1%) (i) (a) the rate per annum (rounded to the nearest 1/100 of 1%)
equal to the rate determined by Administrative Agent to be the offered rate
which appears on the Reuters LIBOR 01 page, or if such page is not available,
the page of the Telerate Screen (currently being page number 3740 or 3750, as
applicable) which displays an average British Bankers Association Interest
Settlement Rate for deposits in U.S. Dollars (for delivery on the first day of
such period) with a term equivalent to such period, determined as of
approximately 11:00 a.m. (London, England time) on such Interest Rate
Determination Date, or (b) in the event the rate referenced in the preceding
clause (a) does not appear on such pages or services or if such pages or
services shall cease to be available, the rate per annum (rounded to the nearest
1/100 of 1%) equal to the rate determined by Administrative Agent to be the
offered rate on such other page or other service which displays an average
British Bankers Association Interest Settlement Rate for deposits in U.S.
Dollars (for delivery on the first day of such period) with a term equivalent to
such period, determined as of approximately 11:00 a.m. (London, England time) on
such Interest Rate Determination Date, or (c) in the event the rates referenced
in the preceding clauses (a) and (b) are not available, the rate per annum
(rounded to the nearest 1/100 of 1%) equal to the offered quotation rate to
first class banks in the London interbank market by Administrative Agent for
deposits (for delivery on the first day of the relevant period) in U.S. Dollars
of amounts in same day funds comparable to the principal amount of the
applicable Loan for which the Adjusted Eurodollar Rate is then being determined
with maturities comparable to such period as of approximately 11:00 a.m.
(London, England time) on such Interest Rate Determination Date, by (ii) an
amount equal to (a) one minus (b) the Applicable Reserve Requirement.
"ADMINISTRATIVE AGENT" as defined in the preamble hereto.
"ADVERSE PROCEEDING" means any action, suit, proceeding (whether
administrative, judicial or otherwise) or arbitration (whether or not
purportedly on behalf of Holdings or any of its Subsidiaries) at law or in
equity, or before or by any Governmental Authority, domestic or foreign
(including any Environmental Claims), whether pending or, to the knowledge of
Holdings or any of its Subsidiaries, threatened against or affecting Holdings or
any of its Subsidiaries or any property of Holdings or any of its Subsidiaries.
"AFFECTED LENDER" as defined in Section 2.20(b).
"AFFECTED LOANS" as defined in Section 2.20(b).
"AFFILIATE" means, as applied to any Person, any other Person directly or
indirectly controlling, controlled by, or under common control with, that
Person. For the purposes of this definition, "control" (including, with
correlative meanings, the terms "controlling", "controlled by" and "under common
control with"), as applied to any Person, means the possession, directly or
indirectly, of the power (i) for purposes of Section 6.10, to vote 10% or more
of the Securities having ordinary voting power for the election of directors of
such Person or (ii) to direct or cause, directly or indirectly, the direction of
the management and policies of that Person, whether through the ownership of
voting securities or by contract or otherwise. For purposes of
3
Section 6.10, the term "Affiliate" shall also include any Person that is a
director of the Person specified.
"AGENT" means each of Syndication Agent, Administrative Agent, Collateral
Agent and Documentation Agent.
"AGENT PARTIES" as defined in Section 10.21.
"AGGREGATE AMOUNTS DUE" as defined in Section 2.19.
"AGGREGATE PAYMENTS" as defined in Section 7.2.
"AGREEMENT" means this Credit and Guaranty Agreement, dated as of June 4,
2004, as it may be amended, supplemented or otherwise modified from time to
time.
"AMALGAMATION AGREEMENT" means that certain Amalgamation Agreement dated
as of March 10, 2004 by and among 9139-4460 Quebec Inc., 9139-7158 Quebec Inc.,
3087053 Nova Scotia Company and the Acquired Business.
"ANTI-TERRORISM LAWS" as defined in Section 4.27.
"APPLICABLE ECF PERCENTAGE" as defined in Section 2.16(e).
"APPLICABLE MARGIN" and "APPLICABLE REVOLVING COMMITMENT FEE PERCENTAGE"
mean (i) with respect to all Loans that are Eurodollar Rate Loans, Canadian
Eurodollar Rate Loans or BA Discount Rate Loans and the Applicable Revolving
Commitment Fee Percentage, (a) from the Closing Date until the date of delivery
of the Compliance Certificate and the financial statements for the second fiscal
quarter commencing after the Closing Date, a percentage, per annum, determined
by reference to the following table as if the Leverage Ratio then in effect were
in excess of 4.50:1.00; and (b) thereafter, a percentage, per annum, determined
by reference to the Leverage Ratio in effect from time to time as set forth
below:
APPLICABLE MARGIN APPLICABLE REVOLVING
LEVERAGE FOR TRANCHE A TERM LOANS APPLICABLE MARGIN COMMITMENT
RATIO AND REVOLVING LOANS FOR TRANCHE B TERM LOANS FEE PERCENTAGE
-------- ------------------------ ------------------------ --------------------
> 4.50:1.00 2.50% 2.75% 0.50%
< or = 4.50:1.00 2.25% 2.75% 0.50%
> 3.50:1.00
< or = 3.50:1.00 2.00% 2.50% 0.40%
>2.50:1.00
< or = 2.50:1.00 1.75% 2.50% 0.35%
and (ii) with respect to Loans that are Base Rate Loans or Prime Rate Loans, an
amount equal to (a) the Applicable Margin for Eurodollar Rate Loans as set forth
in clause (i)(a) or (i)(b) above, as applicable, minus (b) 0.75% per annum. No
change in the Applicable Margin or the Applicable Revolving Commitment Fee
Percentage shall be effective until three Business Days after the date on which
Administrative Agent shall have received the applicable financial
4
statements and a Compliance Certificate pursuant to Section 5.1(d) calculating
the Leverage Ratio. At any time Company has not submitted to Administrative
Agent the financial statements and a Compliance Certificate calculating the
Leverage Ratio as and when required under Section 5.1(d), the Applicable Margin
and the Applicable Revolving Commitment Fee Percentage shall be determined as if
the Leverage Ratio were in excess of 4.50:1.00 until such financial statements
and Compliance Certificate are delivered to Administrative Agent. Within one
Business Day of receipt of the financial statements and Compliance Certificate
calculating the Leverage Ratio under Section 5.1(d), Administrative Agent shall
give each Lender telefacsimile or telephonic notice (confirmed in writing) of
the Applicable Margin and the Applicable Revolving Commitment Fee Percentage in
effect from the day that is three Business Days after such receipt.
"APPLICABLE RESERVE REQUIREMENT" means, at any time, for any Canadian
Eurodollar Rate Loan or Eurodollar Rate Loan, as applicable, the maximum rate,
expressed as a decimal, at which reserves (including, without limitation, any
basic marginal, special, supplemental, emergency or other reserves) are required
to be maintained with respect thereto against "Eurocurrency liabilities" (as
such term is defined in Regulation D) under regulations issued from time to time
by the Board of Governors of the Federal Reserve System or other applicable
banking regulator. A Canadian Eurodollar Rate Loan or Eurodollar Rate Loan shall
be deemed to constitute Eurocurrency liabilities and as such shall be deemed
subject to reserve requirements without benefits of credit for proration,
exceptions or offsets that may be available from time to time to the applicable
Lender. The rate of interest on Canadian Eurodollar Rate Loans and Eurodollar
Rate Loans shall be adjusted automatically on and as of the effective date of
any change in the Applicable Reserve Requirement.
"APPROVED CURRENCY" means each of Canadian Dollars and U.S. Dollars.
"ARIZONA MORTGAGES" as defined in Section 9.2(b).
"ASSET SALE" means a sale, lease or sublease (as lessor or sublessor),
sale and leaseback, assignment, conveyance, transfer or other disposition to, or
any exchange of property with, any Person (other than Company or any Guarantor
Subsidiary), in one transaction or a series of transactions, of all or any part
of Holdings' or any of its Subsidiaries' businesses, assets or properties of any
kind, whether real, personal, or mixed and whether tangible or intangible,
whether now owned or hereafter acquired, including the Capital Stock of any of
Holdings' Subsidiaries (including by issuance of such Capital Stock), other than
(i) inventory sold in the ordinary course of business, (ii) sales of other
assets for aggregate consideration of less than U.S.$1.0 million with respect to
any transaction or series of related transactions and less than U.S.$5.0 million
in the aggregate during any Fiscal Year and (iii) issuances by Canadian Holding
Company to Holdings of Capital Stock of Canadian Holding Company in connection
with the Intercompany Debt Transactions. Any event described in clause (i)(b) of
the definition of Net Insurance/Condemnation Proceeds shall not constitute an
Asset Sale and shall constitute an event the Net Insurance/Condemnation Proceeds
of which are to be applied in accordance with Section 2.16(b).
"ASSIGNMENT AGREEMENT" means an Assignment Agreement substantially in the
form of Exhibit E, with such amendments or modifications as may be approved by
Administrative Agent.
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"AUTHORIZED OFFICER" means, as applied to any Person, any individual
holding the position of chairman of the board (if an officer), chief executive
officer, president, vice president (or the equivalent thereof), chief financial
officer or treasurer.
"BA DISCOUNT NOTE" means a non-interest bearing promissory note of
Company, denominated in Canadian Dollars, issued by Company to a Non-Acceptance
Lender as part of an issuance of Bankers' Acceptances, and substantially in the
form attached as Exhibit B-4 or such other form as may be agreed to by
Administrative Agent, Company and such Non-Acceptance Lender.
"BA DISCOUNT PROCEEDS" means, in respect of any Bankers' Acceptance, the
amount obtained by multiplying (a) the aggregate face amount of such Bankers'
Acceptance by (b) the amount (rounded up or down to the fifth decimal place with
..000005 being rounded up) determined by dividing one by the sum of one plus the
product of (i) the BA Discount Rate, and (ii) a fraction, the numerator of which
is the number of days in the BA Interest Period of such Bankers' Acceptance and
the denominator of which is 365 (or 366, as the case may be).
"BA DISCOUNT RATE" means:
(i) in relation to a Bankers' Acceptance accepted by a Special
Schedule I Lender, the CDOR Rate;
(ii) in relation to a Bankers' Acceptance accepted by a Schedule II
Lender or Schedule III Lender, the lesser of:
(a) the average Discount Rate applicable to such issue as
quoted by the Reference Lenders; and
(b) the CDOR Rate plus 0.10% per annum;
and
(iii) in relation to a BA Equivalent Advance:
(a) made by a Special Schedule I Lender, the CDOR Rate;
(b) made by a Schedule II Lender or Schedule III Lender, the
rate determined in accordance with subparagraph (ii) of this
definition; and
(c) made by any other Lender, the CDOR Rate plus 0.10% per
annum.
"BA DISCOUNT RATE LOAN" means a Loan denominated in Canadian Dollars
bearing interest by way of discount of the face amount thereof at a rate
determined by reference to the BA Discount Rate.
"BA EQUIVALENT ADVANCE" means, in relation to a borrowing of, Conversion
into or Rollover of Bankers' Acceptances, a Loan in Canadian Dollars made by a
Non-Acceptance Lender as part of such borrowing, Conversion or Rollover, as
provided in Section 2.3(i).
6
"BA INTEREST PERIOD" means, with respect to each Bankers' Acceptance, the
period selected by Company hereunder and being of 1, 2, 3 or 6 months' duration
(or, subject to the agreement of Administrative Agent, a longer or shorter
period), subject to market availability, as selected by Company in the
applicable Funding Notice or Conversion/Continuation Notice in respect thereof;
provided that:
(i) the last day of each BA Interest Period shall be also the first
day of the next BA Interest Period in the case of a Rollover;
(ii) the last day of each BA Interest Period shall be a Business
Day;
(iii) no BA Interest Period with respect to any portion of any Class
of Term Loans shall extend beyond such Class's Term Loan Maturity Date;
and
(iv) no BA Interest Period with respect to any portion of the
Revolving Loans shall extend beyond the Revolving Commitment Termination
Date.
"BAL PROPERTIES" means the real properties located at 4670 South Service
Road, Beamsville, Ontario; 7800 Vauban, Montreal, Quebec; and 160 St-Joseph,
Lachine, Quebec.
"BANKERS' ACCEPTANCE" means a non-interest bearing draft drawn by Company
in Canadian Dollars, accepted by a Lender and issued for value pursuant to this
Agreement and includes a depository bill under the DBNA and a bill of exchange
under the Bills of Exchange Act (Canada).
"BANKRUPTCY LAWS" means (i) Title 11 of the United States Code entitled
"Bankruptcy," (ii) the Bankruptcy and Insolvency Act (Canada), (iii) the
Companies' Creditors Arrangement Act (Canada) and (iv) any analogous laws
relating to bankruptcy and insolvency, each as now and hereafter in effect, or
any successor statute.
"BASE RATE" means, for any day, a rate per annum equal to the greater of
(i) (x) in the case of Loans made by Lenders out of Canada only, the rate of
interest quoted from time to time by Administrative Agent in Toronto, Ontario as
the reference rate of interest for loans in U.S. Dollars to its Canadian
borrowers and (y) in all other cases, the U.S. Prime Rate, and (ii) the Federal
Funds Effective Rate in effect on such day plus -1/2 of 1%. Any change in the
Base Rate due to a change in the U.S. Prime Rate or the Federal Funds Effective
Rate shall be effective on the effective day of such change in the U.S. Prime
Rate or the Federal Funds Effective Rate, respectively.
"BASE RATE LOAN" means a Loan denominated in U.S. Dollars bearing interest
at a rate determined by reference to the Base Rate.
"BLACK DIAMOND" means Black Diamond Asset Management or any other entity
known without additional inquiry by Administrative Agent or a Lender making an
assignment pursuant to Section 10.6(c) to be an Affiliate of Black Diamond Asset
Management.
7
"BOARD OF DIRECTORS" means, with respect to any Person, (i) in the case of
any corporation, the board of directors of such Person and (ii) in any other
case, the functional equivalent of the foregoing.
"BUSINESS DAY" means any day, other than a Saturday or a Sunday or a
statutory holiday in the relevant jurisdiction or jurisdictions, and (i) where
used in the context of a notice, delivery, payment or other communication
addressed to Administrative Agent, which is also a day on which banks are not
required or authorized to close in New York City, Toronto or Montreal; and (ii)
with respect to all notices, determinations, fundings and payments in connection
with the Adjusted Eurodollar Rate or Adjusted Canadian Eurodollar Rate or any
Eurodollar Rate Loans or Canadian Eurodollar Rate Loans, the term "Business Day"
shall mean any day which is a Business Day described in clause (i) and which is
also a day for trading by and between banks in U.S. Dollar deposits or Canadian
Dollar deposits, as applicable, in the London interbank market.
"CANADIAN BASED U.S. SWING LINE ACCOUNT" as defined in Section 2.4(b).
"CANADIAN BORROWINGS" means Loans denominated in Canadian Dollars.
"CANADIAN DOLLAR EQUIVALENT" means, as to any amount denominated in U.S.
Dollars as of any date of determination, the amount of Canadian Dollars which
would be required to purchase such amount of U.S. Dollars at the Bank of Canada
noon (Toronto time) spot rate on such date or, if such date of determination is
not a Business Day, on the Business Day immediately preceding such date of
determination.
"CANADIAN DOLLARS" and "CAN$" mean the lawful money of Canada.
"CANADIAN EMPLOYEE BENEFIT PLAN" as set forth in the definition of
Employee Benefit Plan.
"CANADIAN EURODOLLAR RATE LOAN" means a Loan denominated in Canadian
Dollars bearing interest at a rate determined by reference to the Adjusted
Canadian Eurodollar Rate.
"CANADIAN HOLDING COMPANY" means MAAX Canada Inc., a Canada corporation
governed by the Canada Business Corporations Act, and its predecessors.
"CANADIAN PENSION PLAN DEFAULT EVENT" means any fact or circumstance which
could result in a Canadian Pension Plan being deregistered, being wound up (in
whole or in part), being subject to an accelerated funding or special payment
obligation, being less than fully funded on a going concern or solvency basis or
being subject to a claim against it by the PBGF.
"CANADIAN PRIME RATE" means, for any day, the greater of:
(i) the rate of interest per annum established from time to time by
Administrative Agent as the reference rate of interest for the
determination of interest rates that Administrative Agent will charge to
commercial customers in Canada for Canadian Dollar demand loans in Canada;
and
8
(ii) the rate of interest per annum equal to the average annual
yield rate for one-month Canadian Dollar bankers' acceptances (expressed
for such purpose as a yearly rate per annum) which rate is shown on the
display referred to as the "CDOR Page" (or any display substituted
therefor) of Reuters Money Rates Service at 10:00 a.m. (Toronto time) on
such day or, if such day is not a Business Day, on the immediately
preceding Business Day, plus 1.0% per annum.
"CANADIAN REVOLVING LOAN" means each Revolving Loan denominated in
Canadian Dollars.
"CANADIAN SECURITY AGREEMENT" means the Canadian Security Agreement to be
executed by Company and each Guarantor with personal property or a chief
executive office located in any Canadian province other than Quebec
substantially in the form of Exhibit I-2, as it may be amended, supplemented or
otherwise modified from time to time.
"CANADIAN SWING LINE ACCOUNT" as defined in Section 2.4(b).
"CANADIAN SWING LINE LOAN" means each Swing Line Loan denominated in
Canadian Dollars.
"CAPITAL LEASE" means, as applied to any Person, any lease of any property
(whether real, personal or mixed) by that Person as lessee that, in conformity
with GAAP, is or should be accounted for as a capital lease on the balance sheet
of that Person.
"CAPITAL STOCK" means any and all shares, interests, participations or
other equivalents (however designated) of capital stock of a corporation, any
and all equivalent ownership interests in a Person (other than a corporation),
including, without limitation, partnership interests, limited liability company
interests, unlimited company interests or other equity interests, and any and
all warrants, rights or options to purchase or other arrangements or rights to
acquire any of the foregoing (but excluding any debt security that is
exchangeable for or convertible into such Capital Stock).
"CASH" means money, currency or a credit balance in any demand or Deposit
Account.
"CASH EQUIVALENTS" means, as at any date of determination, (i) marketable
securities (a) issued or directly and unconditionally guaranteed as to interest
and principal by the United States or Canada and maturing within one year of the
date of acquisition thereof or (b) issued by any agency of the United States or
Canada the obligations of which are backed by the full faith and credit of the
United States or Canada, in each case maturing within one year after the date of
acquisition thereof; (ii) marketable direct obligations issued by any state of
the United States of America or province of Canada or any political subdivision
of any such state or province or any public instrumentality thereof, in each
case maturing within one year after the date of acquisition thereof and having a
rating of at least A-2 from S&P or at least P-2 from Moody's; (iii) commercial
paper maturing no more than one year from the date of acquisition thereof and
having a rating of at least A-2 from S&P, at least P-2 from Moody's or at least
R-2 (high) from Dominion Bond Rating Service Limited; (iv) certificates of
deposit, time deposits or bankers' acceptances maturing within one year after
the date of acquisition thereof and issued or accepted by any Lender or by any
commercial bank organized under the laws of the United States of
9
America or any state thereof or the District of Columbia that is at least
"adequately capitalized" (as defined in the regulations of its primary Federal
banking regulator) and has Tier 1 capital (as defined in such regulations) of
not less than U.S.$100.0 million; (v) financial instruments maturing within one
year after the date of acquisition thereof and issued by any Canadian chartered
bank which has a long-term debt rating of at least A+ by S&P, A2 by Moody's or A
(high) by Dominion Bond Rating Service Limited; (vi) repurchase agreements with
a term of not more than 30 days for underlying securities of the types described
in clause (i) or (ii) entered into with any bank meeting the qualifications
specified in clause (iv) or (v), which repurchase obligations are secured by a
perfected first priority security interest in the underlying securities; (vii)
shares of any money market mutual fund that (a) has substantially all of its
assets invested continuously in the types of investments referred to in clauses
(i) and (v) above, (b) has net assets of not less than U.S.$500.0 million and
(c) has the highest rating obtainable from either S&P or Moody's; and (viii) in
the case of any Foreign Subsidiary, investments made locally of a type
comparable to those described in clauses (i) through (vii) of this definition.
"CDOR RATE" means, on any date which Bankers' Acceptances are to be issued
pursuant hereto, the per annum rate of interest which is the rate determined as
being the arithmetic average of the annual yield rates applicable to Canadian
Dollar bankers' acceptances having identical issue and comparable maturity dates
as the Bankers' Acceptances proposed to be issued by Company displayed and
identified as such on the display referred to as the "CDOR Page" (or any display
substituted therefor) of Reuters Monitor Money Rates Service as at approximately
10:00 a.m. (Toronto time) on such day, or if such day is not a Business Day,
then on the immediately preceding Business Day (as adjusted by Administrative
Agent in good faith after 10:00 a.m. (Toronto time) to reflect any error in a
posted rate or in the posted average annual rate); provided if the Bankers
Acceptances proposed to be issued by Company would have a BA Interest Period of
any duration other than 1, 2, 3 or 6 months or if such a rate does not otherwise
appear on such CDOR Page, then the CDOR Rate, on any day, shall be the Discount
Rate quoted by Administrative Agent determined as of 10:00 a.m. (Toronto time)
on such day which would be applicable in respect of an issue of bankers'
acceptances in a comparable amount and with comparable maturity dates to the
Bankers' Acceptances proposed to be issued by Company on such day, or if such
day is not a Business Day, then on the immediately preceding Business Day.
"CERTIFICATE RE NON-BANK STATUS" means a certificate substantially in the
form of Exhibit F.
"CHANGE IN LAW" means (a) the adoption of any law, rule, regulation,
treaty or order by any Governmental Authority after the Closing Date, (b) any
change in any law, rule or regulation, treaty or order or in the interpretation
or application thereof by any Governmental Authority in each case after the
Closing Date or (c) compliance by any Lender with any written request, guideline
or directive (whether or not having the force of law) of any Governmental
Authority made or issued after the Closing Date.
"CHANGE OF CONTROL" means, at any time, (i) (a) the Permitted Holders
shall cease to beneficially own and control more than 50% on a fully diluted
basis of the economic and voting interests in the Capital Stock of Holdings
beneficially owned and controlled by the Permitted Holders on the Closing Date
after giving effect to the Transactions occurring thereon or (b) Childs shall
cease to beneficially own and control more than 50% on a fully diluted basis of
the
10
economic and voting interests in the Capital Stock of Holdings beneficially
owned and controlled by Childs on the Closing Date after giving effect to the
Transactions occurring thereon; (ii) any Person or "group" (within the meaning
of Rules 13d-3 and 13d-5 under the Exchange Act) other than the Permitted
Holders (a) shall have acquired beneficial ownership of 35% or more on a fully
diluted basis of the voting and/or economic interest in the Capital Stock of
Holdings or (b) shall have obtained the power (whether or not exercised) to
elect a majority of the members of the Board of Directors of Holdings; (iii)
Holdings shall cease to beneficially own and control 100% on a fully diluted
basis of the economic and voting interest in the Capital Stock of Company; (iv)
the majority of the seats (other than vacant seats) on the Board of Directors of
Company or Holdings cease to be occupied by Persons who either (a) were members
of the Board of Directors of Company or Holdings on the Closing Date or (b) were
nominated for election by the Board of Directors of Company or Holdings, a
majority of whom were directors on the Closing Date or whose election or
nomination for election was previously approved by a majority of such directors,
provided, this clause (iv) shall not apply if the Permitted Holders have the
power directly or indirectly to designate a majority of the directors serving on
the Board of Directors of Company or Holdings, as the case may be; or (v) any
"change of control" or similar event under the Senior Subordinated Notes
Indenture shall occur.
"CHILDS" means John W. Childs, J. W. Childs Associates L.P. and their
Controlled Investment Affiliates.
"CIVIL CODE" means the Civil Code of Quebec, as in effect from time to
time.
"CLASS" means (i) with respect to Lenders, each of the following classes
of Lenders: (a) Tranche A Term Loan Lenders, (b) Tranche B Term Loan Lenders,
(c) Revolving Lenders (including Swing Line Lender) and (d) Lenders having New
Term Loan Exposure of each Series, and (ii) with respect to Loans, each of the
following classes of Loans: (a) Tranche A Term Loans, (b) Tranche B Term Loans,
(c) Revolving Loans (including Swing Line Loans) and (d) each Series of New Term
Loans.
"CLEARING HOUSE" shall have the meaning ascribed thereto in the DBNA,
including for certainty The Canadian Depository For Securities Limited or its
nominee, CDS & Co.
"CLOSING DATE" means the date on which the Term Loans are made.
"CLOSING DATE CERTIFICATE" means a Closing Date Certificate substantially
in the form of Exhibit G-1.
"CLOSING DATE MORTGAGED PROPERTY" as defined in Section 3.1(g)(i).
"COLLATERAL" means, collectively, all of the real, personal and mixed
property (including Capital Stock) in which Liens are purported to be granted
pursuant to the Collateral Documents as security for the Obligations.
"COLLATERAL ACCOUNT" as defined in the Canadian Security Agreement.
"COLLATERAL AGENT" as defined in the preamble hereto.
11
"COLLATERAL DOCUMENTS" means the Security Agreements, the Mortgages, the
Landlord Personal Property Collateral Access Agreements, if any, and all other
instruments, documents and agreements delivered by any Credit Party pursuant to
this Agreement or any of the other Credit Documents in order to grant to
Collateral Agent, for the benefit of Lenders, a Lien on any real, personal or
mixed property of that Credit Party as security for the Obligations.
"COMMITMENT" means any Revolving Commitment, Term Loan Commitment or New
Term Loan Commitment.
"COMMITMENT LETTER" means the Commitment Letter dated as of March 10, 2004
by and among the Sponsors, GSCP, Merrill Lynch Capital Corporation, RBC and
3087052 Nova Scotia Company.
"COMMODITY AGREEMENT" means any swap, cap, forward purchase, futures or
other similar agreement or arrangement relating to commodity prices.
"COMMUNICATIONS" as defined in Section 10.21.
"COMPANY" as defined in the preamble hereto.
"COMPLIANCE CERTIFICATE" means a Compliance Certificate substantially in
the form of Exhibit C.
"CONSOLIDATED ADJUSTED EBITDA" means, for any period, an amount determined
for Holdings and its Subsidiaries on a consolidated basis equal to
(i) Consolidated Net Income for such period plus
(ii) the sum, without duplication, of the amounts for such period
(in each case to the extent reducing such Consolidated Net Income) of
(a) Consolidated Interest Expense;
(b) provisions for taxes based on income;
(c) total depreciation expense;
(d) total amortization expense;
(e) other non-cash items reducing such Consolidated Net Income
(excluding any such non-cash item to the extent that it represents
an accrual or reserve for potential cash items in any future period
or amortization of a prepaid cash item that was paid in a prior
period);
(f) any after-tax losses attributable to Asset Sales or
returned surplus assets of any Pension Plan and any extraordinary
losses;
(g) relocation costs and expenses incurred to move the
headquarters of Holdings and its Subsidiaries from Sainte-Marie,
Canada to Montreal, Canada;
12
(h) costs and expenses incurred on or prior to the Closing
Date during the Fiscal Year ending February 28, 2005 in connection
with the Transactions;
(i) Restructuring Expenses in an aggregate amount not to
exceed U.S.$5.0 million in any four Fiscal Quarter period;
(j) other non-recurring, non-operating losses in an aggregate
amount not to exceed U.S.$5.0 million in any four Fiscal Quarter
period;
(k) development costs that are expensed pursuant to Statement
of Financial Accounting Standards No. 2, "Accounting for Research
and Development Costs," but are capitalizable under accounting
principles generally accepted in Canada;
(l) cash gains realized under Currency Agreements; and
(m) minority interest (if negative) with respect to any
Guarantor Subsidiary; minus
(iii) the sum, without duplication, of the amounts for such period
(in each case to the extent increasing such Consolidated Net Income) of
(a) non-cash items increasing such Consolidated Net Income
(excluding any such non-cash item to the extent it represents the
reversal of an accrual or reserve for potential cash item in any
prior period);
(b) any after-tax gains attributable to Asset Sales or
returned surplus assets of any Pension Plan and any extraordinary
gains;
(c) non-recurring, non-operating gains;
(d) cash losses realized under Currency Agreements; and
(e) minority interest (if positive) with respect to any
Guarantor Subsidiary.
Notwithstanding anything to the contrary, it is agreed that Consolidated
Adjusted EBITDA for the Fiscal Quarters ended August 31, 2003, November 30, 2003
and February 28, 2004 were Can$25,700,000, Can$25,300,000 and Can$20,600,000,
respectively. In the event that Holdings' financial statements are reported in
U.S. Dollars, such Consolidated Adjusted EBITDA amounts shall be converted to
U.S. Dollars at a rate reasonably satisfactory to Company and Administrative
Agent.
"CONSOLIDATED CAPITAL EXPENDITURES" means, for any period, the aggregate
of all expenditures of Holdings and its Subsidiaries during such period
determined on a consolidated basis that, in accordance with GAAP, are or should
be included in "purchase of property and equipment" or similar items reflected
in the consolidated statement of cash flows of Holdings and its Subsidiaries.
13
"CONSOLIDATED CASH INTEREST EXPENSE" means, for any period, Consolidated
Interest Expense for such period, excluding any amount not payable in cash in
such period, but including in any event the implied cost of financing (equal to
the discount factor) under the factoring arrangements permitted pursuant to
Section 6.9(j).
"CONSOLIDATED CURRENT ASSETS" means, as at any date of determination, the
total assets of Holdings and its Subsidiaries on a consolidated basis that may
properly be classified as current assets in conformity with GAAP, excluding Cash
and cash equivalents.
"CONSOLIDATED CURRENT LIABILITIES" means, as at any date of determination,
the total liabilities of Holdings and its Subsidiaries on a consolidated basis
that may properly be classified as current liabilities in conformity with GAAP,
excluding the current portion of any debt.
"CONSOLIDATED EXCESS CASH FLOW" means, for any period, an amount equal to
the excess of
(a) the sum, without duplication, of
(i) Consolidated Net Income for such period;
(ii) all non-cash expenses, losses and charges (including
depreciation and amortization) to the extent deducted in arriving at
such Consolidated Net Income;
(iii) the Consolidated Working Capital Adjustment for such
period;
(iv) cash gains realized under Currency Agreements during such
period; and
(v) the aggregate amount of cash returns during such period on
investments pursuant to Sections 6.7(g), (h), (i) and (k); over
(b) the sum, without duplication, of
(i) all non-cash income, gains and credits included in
arriving at such Consolidated Net Income;
(ii) scheduled repayments of Consolidated Total Debt during
such period, excluding any repayment of Indebtedness to the extent
made with the proceeds of capital contributions, issuances of
Capital Stock, incurrences of Indebtedness or Asset Sales;
(iii) the aggregate amount actually paid by Holdings or any of
its Subsidiaries in cash during such period on account of
Consolidated Capital Expenditures, excluding any such expenditures
to the extent made with the proceeds of capital contributions,
issuances of Capital Stock, incurrences of Indebtedness or Asset
Sales;
14
(iv) Consolidated Cash Interest Expense for such period;
(v) the amount of such Consolidated Net Income for such period
that represents net income (or loss) determined in conformity with
GAAP of any Person related to any Fiscal Quarter prior to the Fiscal
Quarter during which such Person became a Subsidiary of Holdings,
was merged into or consolidated with Holdings or any of its
Subsidiaries or such Person's assets were acquired by Holdings or
any of its Subsidiaries;
(vi) cash losses realized under Currency Agreements during
such period;
(vii) payments made to shareholders of MAAX Inc. on the
Closing Date in connection with the Transactions; and
(viii) the aggregate amount of investments made in cash during
such period pursuant to Sections 6.7(g), (h), (i) and (k) (other
than investments made with proceeds of capital contributions,
issuances of Capital Stock, incurrences of Indebtedness or Asset
Sales).
"CONSOLIDATED FIXED CHARGES" means, for any period, the sum, without
duplication, of the amounts determined for Holdings and its Subsidiaries on a
consolidated basis equal to (i) Consolidated Cash Interest Expense, (ii)
scheduled payments of principal on Consolidated Total Debt, (iii) Consolidated
Capital Expenditures, (iv) provisions for taxes based on income of MAAX Holdings
and its Subsidiaries and payable in cash with respect to such period, and (v)
scheduled rental payments.
"CONSOLIDATED INTEREST EXPENSE" means, for any period, total interest
expense (including that portion attributable to Capital Leases in accordance
with GAAP and capitalized interest) of Holdings and its Subsidiaries on a
consolidated basis with respect to all outstanding Indebtedness of Holdings and
its Subsidiaries, including all commissions, discounts and other fees and
charges owed with respect to letters of credit and net costs under Interest Rate
Agreements, plus the implied cost of financing (equal to the discount factor)
under the factoring arrangements permitted pursuant to Section 6.9(j), but
excluding, however, any amounts referred to in Section 2.13(d) payable on or
before the Closing Date.
"CONSOLIDATED NET INCOME" means, for any period, (i) the net income (or
loss) of Holdings and its Subsidiaries on a consolidated basis for such period
taken as a single accounting period determined in conformity with GAAP, minus,
without duplication, (ii) (a) the net income (but not the net loss) of any
Person that is not a Subsidiary of Holdings or that is accounted for by the
equity method of accounting, except to the extent of the amount of dividends or
other distributions actually paid in Cash to Holdings or any of its Subsidiaries
by such Person during such period, (b) the income of any Subsidiary of Holdings
to the extent that the declaration or payment of dividends or similar
distributions by that Subsidiary of that income is not at the time permitted by
operation of the terms of its charter or any agreement, instrument, judgment,
decree, order, statute, rule or governmental regulation applicable to that
Subsidiary, and
15
(c) Restricted Junior Payments to any Parent Company other than Holdings
pursuant to Section 6.5(d).
"CONSOLIDATED TOTAL DEBT" means, as at any date of determination, the
aggregate amount of all Indebtedness of Holdings and its Subsidiaries that would
be reflected on a consolidated balance sheet as of such date prepared in
accordance with GAAP.
"CONSOLIDATED WORKING CAPITAL" means, as at any date of determination, the
excess of Consolidated Current Assets over Consolidated Current Liabilities.
"CONSOLIDATED WORKING CAPITAL ADJUSTMENT" means, for any period on a
consolidated basis, the amount (which may be a negative number) by which
Consolidated Working Capital as of the beginning of such period exceeds (or is
less than) Consolidated Working Capital as of the end of such period.
"CONTRACTUAL OBLIGATION" means, as applied to any Person, any provision of
any Security issued by that Person or of any indenture, mortgage, deed of trust,
contract, undertaking, agreement or other instrument to which that Person is a
party or by which it or any of its properties is bound or to which it or any of
its properties is subject.
"CONTRIBUTING GUARANTORS" as defined in Section 7.2.
"CONTROLLED INVESTMENT AFFILIATE" means, as to any Person, any other
Person which directly or indirectly is in control of, is controlled by, or is
under common control with, such Person and is organized by such Person (or any
Person controlling such Person) primarily for making equity or debt investments
in MAAX Holdings or other portfolio companies.
"CONVERSION" means the conversion or deemed conversion of a Loan to
another Type of Loan in accordance with Section 2.11 or otherwise as occurs
automatically hereunder, but in any case under the same Class under which the
original Loan was made.
"CONVERSION/CONTINUATION DATE" means the effective date of a continuation
or Conversion, as the case may be, as set forth in the applicable
Conversion/Continuation Notice.
"CONVERSION/CONTINUATION NOTICE" means a Conversion/Continuation Notice
substantially in the form of Exhibit A-2.
"COUNTERPART AGREEMENT" means a Counterpart Agreement substantially in the
form of Exhibit H delivered by a Credit Party pursuant to Section 5.10.
"CREDIT DATE" means the date of a Credit Extension.
"CREDIT DOCUMENT" means any of this Agreement, the Notes, if any, the
Collateral Documents, any documents or certificates executed by Company in favor
of an Issuing Lender relating to Letters of Credit, and all other documents,
instruments or agreements executed and delivered by a Credit Party for the
benefit of any Agent, Issuing Lender or any Lender in connection herewith.
16
"CREDIT EXTENSION" means the making of a Loan or the issuing of a Letter
of Credit.
"CREDIT PARTY" means Company and each Guarantor.
"CURRENCY AGREEMENT" means any foreign exchange contract, currency swap
agreement, futures contract, option contract, forward contract, synthetic cap or
other similar agreement or arrangement relating to currency exchange rates.
"DBNA" means the Depository Bills and Notes Act (Canada).
"DEFAULT" means a condition or event that, after notice or lapse of time
or both, would constitute an Event of Default.
"DEFAULT EXCESS" means, with respect to any Defaulting Lender, the excess,
if any, of such Defaulting Lender's Pro Rata Share of the aggregate outstanding
principal amount of Loans of all Lenders (calculated as if all Defaulting
Lenders (other than such Defaulting Lender) had funded all of their respective
Defaulted Loans) over the aggregate outstanding principal amount of all Loans of
such Defaulting Lender.
"DEFAULT PERIOD" means, with respect to any Defaulting Lender, the period
commencing on the date of the applicable Funding Default and ending on the
earliest of the following dates: (i) the date on which all Commitments are
cancelled or terminated and/or the Obligations are declared or become
immediately due and payable, (ii) the date on which (a) the Default Excess with
respect to such Defaulting Lender shall have been reduced to zero other than by
Company reimbursing Administrative Agent for such Default Excess in accordance
with Section 2.6(b) (whether by the funding by such Defaulting Lender of any
Defaulted Loans of such Defaulting Lender or by the non-pro rata application of
any voluntary or mandatory prepayments of the Loans in accordance with the terms
of Section 2.15 or Section 2.16 or by a combination thereof) and (b) such
Defaulting Lender shall have delivered to Company and Administrative Agent a
written reaffirmation of its intention to honor its obligations hereunder with
respect to its Commitments, and (iii) the date on which Company, Administrative
Agent and Requisite Lenders waive all Funding Defaults of such Defaulting Lender
in writing.
"DEFAULTED LOAN" as defined in Section 2.24.
"DEFAULTING LENDER" as defined in Section 2.24.
"DEPOSIT ACCOUNT" means a demand, time, savings, passbook or like account
with a bank, savings and loan association, credit union or like organization,
other than an account evidenced by a negotiable certificate of deposit.
"DESIGNATED ACCOUNT" means any account that constitutes a "Deposit
Account" under any Security Agreement.
"DISCOUNT RATE" means, with respect to the issuance of a bankers'
acceptance in the Canadian bankers' acceptance market, the rate of interest per
annum, calculated on the basis of a year of 365 days (rounded upwards, if
necessary, to the nearest whole multiple of 1/100th of one percent) which is
equal to the discount exacted by a purchaser taking initial delivery of such
17
bankers' acceptance, calculated as a rate per annum and as if the issuer thereof
received the discount proceeds in respect of such bankers' acceptance on its
date of issuance and had repaid the respective face amount of such bankers'
acceptance on the maturity date thereof.
"DOCUMENTATION AGENT" as defined in the preamble hereto.
"DOMESTIC SUBSIDIARY" means any Subsidiary organized under the laws of the
United States of America, any State thereof, the District of Columbia, Canada or
any province thereof (other than MAAX (2004) LLC).
"ELIGIBLE ASSIGNEES" means (i) with respect to the Tranche A Term Loans
and the Revolving Loans, any entity that, on the date such entity becomes a
party to this Agreement, comes within any category of entities listed on
Appendix C hereof and any other entity interest payments to which, on the date
such entity becomes a party to this Agreement, will not require withholding
under U.S. and Canadian federal tax laws, (ii) with respect to the Tranche B
Term Loans, any Person, (iii) to the extent necessary or advisable in order to
ensure a Successful Syndication, any assignee of any of GSCP, RBC or MLPF&S,
(iv) with respect to the Tranche A Term Loans and the Revolving Loans, any
Person not described in clause (i) or (iii) that agrees that it will not have
the benefit of Section 2.22 for U.S. and Canadian federal withholding taxes,
other than as a result of a Change in Law occurring after the date on which such
Person becomes a Lender, (v) with respect to the Tranche A Term Loans and the
Revolving Loans, any Person not described in clause (i), (iii) or (iv);
provided, however, that a Person described in this clause (v) shall not be
entitled to any gross-up payments in respect of U.S. and Canadian federal
withholding taxes that exceed the greater of (A) the gross-up payments to which
such Person's assignor (the "CURRENT ASSIGNOR") was entitled immediately prior
to the assignment or (B) the gross-up payments to which the current assignor's
assignor would be entitled if the current assignor made an assignment back to
such prior assignor, except to the extent that such entitlement to such greater
gross-up payments resulted from a Change in Law occurring after the date such
Person becomes a Lender, and (vi) during the existence of (x) an Event of
Default pursuant to Section 8.1(a), (f) or (g) or (y) any other Event of Default
that continues for 30 days or more, any Person; provided that notwithstanding
the foregoing, "Eligible Assignee" shall not include (w) Caisse de depot et
deplacement du Quebec, (x) any natural person, (y) Company or any of Company's
Affiliates or Subsidiaries or (z) Black Diamond.
"EMBARGOED PERSON" as defined in Section 6.17.
"EMPLOYEE BENEFIT PLAN" means (i) any "employee benefit plan" as defined
in Section 3(3) of ERISA which is or was sponsored, maintained or contributed to
by, or required to be contributed to by, Holdings, any of its Subsidiaries or
any of their respective ERISA Affiliates (each, a "U.S. EMPLOYEE BENEFIT PLAN")
and (ii) any plan with respect to the employees or former employees of Holdings
or any of its Subsidiaries in Canada or to which Holdings or any of its
Subsidiaries in Canada is a party to or bound by or to which Holdings or any of
its Subsidiaries in Canada has an obligation to contribute relating to
retirement savings, pensions, life or accident insurance, hospitalization,
health, medical or dental treatment or expenses, disability, employment
insurance benefits, vacation pay, severance or termination pay or other benefit
plan (each, a "CANADIAN EMPLOYEE BENEFIT PLAN").
18
"ENVIRONMENTAL CLAIM" means any investigation, notice, notice of
violation, claim, action, suit, proceeding, demand, abatement order or other
order or directive, by any Governmental Authority or any other Person, arising
(i) pursuant to or in connection with any actual or alleged violation of any
Environmental Law; (ii) in connection with any Hazardous Material or any actual
or alleged Hazardous Materials Activity; or (iii) in connection with any actual
or alleged damage, injury, threat or harm to health, safety, natural resources
or the environment.
"ENVIRONMENTAL LAWS" means any and all current or future foreign or
domestic, federal, state or provincial (or any subdivision of either of them),
statutes, by-laws, ordinances, orders, rules, regulations, judgments,
Governmental Authorizations or rule of common law relating to pollution or
protection of the environment, natural resources or public health or welfare,
including those relating to any Hazardous Materials Activity or the generation,
use, storage, treatment, transportation or disposal of Hazardous Materials.
"EQUITY FINANCING" means common equity investments in MAAX Holdings equal
to not less than 25% of the total pro forma consolidated capitalization of MAAX
Holdings which shall consist of (x) cash common equity investments by the
Investors, which investments shall be contributed as cash common equity to
Company (it being understood that the investments by certain of the Investors
may initially be in the form of convertible debt of MAAX Holdings so long as all
of such debt is converted into common equity of MAAX Holdings on the Closing
Date) and (y) options and shares currently held by management in the Acquired
Business which are exchanged for options or shares, as applicable, of MAAX
Holdings.
"ERISA" means the Employee Retirement Income Security Act of 1974, as
amended from time to time, and any successor thereto.
"ERISA AFFILIATE" means, as applied to any Person, (i) any corporation
which is a member of a controlled group of corporations within the meaning of
Section 414(b) of the Internal Revenue Code of which that Person is a member;
(ii) any trade or business (whether or not incorporated) which is a member of a
group of trades or businesses under common control within the meaning of Section
414(c) of the Internal Revenue Code of which that Person is a member; and (iii)
any member of an affiliated service group within the meaning of Section 414(m)
or (o) of the Internal Revenue Code of which that Person, any corporation
described in clause (i) above or any trade or business described in clause (ii)
above is a member. Any former ERISA Affiliate of Holdings or any of its
Subsidiaries shall continue to be considered an ERISA Affiliate of Holdings or
any such Subsidiary within the meaning of this definition with respect to the
period such entity was an ERISA Affiliate of Holdings or such Subsidiary and
with respect to liabilities arising after such period for which Holdings or such
Subsidiary could be liable under the Internal Revenue Code or ERISA.
"ERISA EVENT" means (i) a "reportable event" within the meaning of Section
4043 of ERISA and the regulations issued thereunder with respect to any Pension
Plan (excluding those for which the provision for 30-day notice to the PBGC has
been waived by regulation); (ii) the failure to meet the minimum funding
standard of Section 412 of the Internal Revenue Code with respect to any Pension
Plan (whether or not waived in accordance with Section 412(d) of the Internal
Revenue Code) or the failure to make by its due date a required installment
under
19
Section 412(m) of the Internal Revenue Code with respect to any Pension Plan or
the failure to make any required contribution to a Multiemployer Plan; (iii) the
provision by the administrator of any Pension Plan pursuant to Section
4041(a)(2) of ERISA of a notice of intent to terminate such plan in a distress
termination described in Section 4041(c) of ERISA; (iv) the withdrawal by
Holdings, any of its Subsidiaries or any of their respective ERISA Affiliates
from any Pension Plan with two or more contributing sponsors or the termination
of any such Pension Plan resulting in liability to Holdings, any of its
Subsidiaries or any of their respective Affiliates pursuant to Section 4063 or
4064 of ERISA; (v) the institution by the PBGC of proceedings to terminate any
Pension Plan, or the occurrence of any event or condition which could reasonably
constitute grounds under ERISA for the termination of, or the appointment of a
trustee to administer, any Pension Plan; (vi) the imposition of liability on
Holdings, any of its Subsidiaries or any of their respective ERISA Affiliates
pursuant to Section 4062(e) or 4069 of ERISA or by reason of the application of
Section 4212(c) of ERISA; (vii) the withdrawal of Holdings, any of its
Subsidiaries or any of their respective ERISA Affiliates in a complete or
partial withdrawal (within the meaning of Sections 4203 and 4205 of ERISA) from
any Multiemployer Plan if there is any potential liability thereto, or the
receipt by Holdings, any of its Subsidiaries or any of their respective ERISA
Affiliates of notice from any Multiemployer Plan that it is in reorganization or
insolvency pursuant to Section 4241 or 4245 of ERISA, or that it intends to
terminate or has terminated under Section 4041A or 4042 of ERISA; (viii) the
occurrence of an act or omission which could give rise to the imposition on
Holdings, any of its Subsidiaries or any of their respective ERISA Affiliates of
fines, penalties, taxes or related charges under Chapter 43 of the Internal
Revenue Code or under Section 409, Section 502(c), (i) or (l), or Section 4071
of ERISA in respect of any Employee Benefit Plan; (ix) the assertion of a
material claim (other than routine claims for benefits) against any Employee
Benefit Plan other than a Multiemployer Plan or the assets thereof, or against
Holdings, any of its Subsidiaries or any of their respective ERISA Affiliates in
connection with any Employee Benefit Plan; (x) receipt from the Internal Revenue
Service of notice of the failure of any Pension Plan (or any other Employee
Benefit Plan intended to be qualified under Section 401(a) of the Internal
Revenue Code) to qualify under Section 401(a) of the Internal Revenue Code, or
the failure of any trust forming part of any Pension Plan to qualify for
exemption from taxation under Section 501(a) of the Internal Revenue Code; or
(xi) the imposition of a Lien pursuant to Section 401(a)(29) or 412(n) of the
Internal Revenue Code or pursuant to ERISA with respect to any Pension Plan.
"EURODOLLAR RATE LOAN" means a Loan denominated in U.S. Dollars bearing
interest at a rate determined by reference to the Adjusted Eurodollar Rate.
"EVENT OF DEFAULT" as defined in Section 8.1.
"EXCHANGE ACT" means the Securities Exchange Act of 1934, as amended from
time to time, and any successor statute.
"EXCLUDED TAX" means with respect to Administrative Agent or any Lender
(i) income, branch profits or franchise taxes that, in each case, are imposed on
(or measured by) its net income by any jurisdiction in which such party is
organized or resident or has its principal office or applicable lending office
or with which Administrative Agent or such Lender (as the case may be) has
another connection (other than a connection deemed to arise solely by reason of
such Lender's entering into or being a party to this Agreement, performing its
obligations under this
20
Agreement, receiving a payment under this Agreement, or enforcing its rights or
exercising its remedies under this Agreement) including a withholding made
pursuant to section 105 of the regulations to the Income Tax Act (Canada) or
Section 1015R8 of the regulations to the Taxation Act (Quebec), (ii) any taxes
attributable to any Lender's failure to comply with Section 2.22(d) of this
Agreement, (iii) in the case of any Original Lender, any U.S. or Canadian
federal withholding tax that is imposed in respect of the Tranche A Term Loans
or the Revolving Loans under the law in effect on the Closing Date as a result
of such Lender not being a Person described in clause (i) or (iii) of the
definition of Eligible Assignees and (iv) with respect to any fees for services
rendered under the Tranche A Term Loans or the Revolving Loans, any U.S. federal
withholding tax imposed under the law in effect when Administrative Agent or
such Lender (as the case may be) became a party to this Agreement unless such
Lender became a Lender during the continuance of an Event of Default pursuant to
clause (vi) of the definition of Eligible Assignees.
"EXECUTIVE ORDER" as defined in Section 4.27.
"EXISTING INDEBTEDNESS" means Indebtedness and preferred equity of
Holdings, the Acquired Business and their respective Subsidiaries incurred or
issued prior to the Closing Date and listed on Schedule 6.1.
"EXISTING LETTERS OF CREDIT" means each of the letters of credit
identified on Appendix D hereto.
"FACILITY" means any real property (including all buildings, fixtures or
other improvements located thereon) now, hereafter or heretofore owned, leased,
operated or used by Holdings or any of its Subsidiaries or any of their
respective predecessors.
"FAIR SHARE" as defined in Section 7.2.
"FAIR SHARE CONTRIBUTION AMOUNT" as defined in Section 7.2.
"FEDERAL FUNDS EFFECTIVE RATE" means for any day, the rate per annum
(expressed as a decimal, rounded upwards, if necessary, to the next higher 1/100
of 1%) 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 on such day, as published by the Federal Reserve Bank of New York
on the Business Day next succeeding such day; provided (i) if such day is not a
Business Day, the Federal Funds Rate for such day shall be such rate on such
transactions on the next preceding Business Day as so published on the next
succeeding Business Day, and (ii) if no such rate is so published on such next
succeeding Business Day, the Federal Funds Rate for such day shall be the
average rate charged to Administrative Agent, in its capacity as a Lender, on
such day on such transactions as determined by Administrative Agent.
"FINANCIAL OFFICER CERTIFICATION" means, with respect to the financial
statements for which such certification is required, the certification of the
chief financial officer or a vice president responsible for financial matters of
Holdings that such financial statements fairly present, in all material
respects, the financial condition of Holdings and its Subsidiaries as at the
dates indicated and the results of their operations and their cash flows for the
periods indicated, subject to changes resulting from audit and normal year-end
adjustments.
21
"FINANCIAL PLAN" as defined in Section 5.1(i).
"FIRST PRIORITY" means, with respect to any Lien purported to be created
in any Collateral pursuant to any Collateral Document, that such Lien is the
only Lien to which such Collateral is subject, other than any Permitted Lien.
"FISCAL QUARTER" means a fiscal quarter of any Fiscal Year.
"FISCAL YEAR" means the fiscal year of Holdings and its Subsidiaries
ending on February 28 or 29 of each calendar year, as applicable.
"FIXED CHARGE COVERAGE RATIO" means the ratio as of the last day of any
Fiscal Quarter of (i) Consolidated Adjusted EBITDA for the four-Fiscal Quarter
period then ending, to (ii) Consolidated Fixed Charges for such four-Fiscal
Quarter period.
"FLOOD HAZARD PROPERTY" means any Real Estate Asset in the United States
subject to a mortgage in favor of Collateral Agent, for the benefit of the
Lenders, and located in an area designated by the Federal Emergency Management
Agency as having special flood or mud slide hazards.
"FONDE DE POUVOIR" as defined in Section 9.1(d).
"FOREIGN SUBSIDIARY" means any Subsidiary that is not a Domestic
Subsidiary.
"FORWARD PURCHASE AGREEMENT" means the Forward Purchase Agreement, dated
as of the date hereof, between Holdings and Canadian Holding Company, as
amended, restated, supplemented or otherwise modified from time to time in
accordance with this Agreement.
"FPA GUARANTY" means the Limited Recourse Guaranty, dated as of the date
hereof, by Company or its predecessor in favor of Canadian Holding Company, as
amended, restated, supplemented or otherwise modified from time to time in
accordance with this Agreement.
"FPA SECURITY AGREEMENT" means the Security Agreement and Hypothec, dated
as of the date hereof, between Company or its predecessor and Canadian Holding
Company, as amended, restated, supplemented or otherwise modified from time to
time in accordance with this Agreement.
"FUNDING DEFAULT" as defined in Section 2.24.
"FUNDING GUARANTORS" as defined in Section 7.2.
"FUNDING NOTICE" means a notice substantially in the form of Exhibit A-1.
"GAAP" means, subject to the limitations on the application thereof set
forth in Section 1.2, accounting principles generally accepted in the United
States in effect as of the date of determination thereof.
22
"GOVERNMENTAL AUTHORITY" means any federal, state, provincial, municipal,
local, national or other government, governmental department, commission, board,
bureau, court, agency or instrumentality or political subdivision thereof, any
central bank or other governmental or quasi-governmental authority or any entity
or officer exercising executive, legislative, judicial, regulatory or
administrative functions of or pertaining to any government or any court, in
each case whether associated with the United States, any State thereof, the
District of Columbia, Canada, any province thereof, any subdivision of any of
the foregoing, or any government of any other country or subdivision thereof.
"GOVERNMENTAL AUTHORIZATION" means any permit, license, approval,
authorization, plan, directive, consent order or consent decree of or from any
Governmental Authority.
"GSCP" as defined in the preamble hereto.
"GUARANTEED OBLIGATIONS" as defined in Section 7.1.
"GUARANTOR" means (i) Holdings, (ii) each Domestic Subsidiary of Holdings
(other than Company) on the date hereof after giving effect to the Transactions
and other mergers, asset transfers and amalgamations among Holdings and its
Subsidiaries occurring on the Closing Date and (iii) each Person that becomes a
Guarantor Subsidiary in accordance with Section 5.10, in the case of clause (ii)
or (iii), until such Person is released from its Guaranty in accordance with
Section 7.12.
"GUARANTOR SUBSIDIARY" means each Guarantor other than Holdings.
"GUARANTY" means the guaranty of each Guarantor set forth in Section 7.
"HAZARDOUS MATERIALS" means any pollutant, contaminant, chemical,
material, waste, substance or constituent which is subject to regulation or
exposure to which can give rise to liability under any Environmental Law.
"HAZARDOUS MATERIALS ACTIVITY" means any past or current activity, event
or occurrence involving any Hazardous Materials, including the use, manufacture,
possession, storage, holding, presence, Release, discharge, placement,
generation, transportation, processing, treatment, abatement, removal,
remediation, disposal, disposition or handling of any Hazardous Materials, and
any corrective action or response action with respect to any of the foregoing.
"HEDGE AGREEMENT" means a Commodity Agreement, an Interest Rate Agreement
or a Currency Agreement entered into in order to satisfy the requirements of
this Agreement or otherwise in the ordinary course of Holdings' or any of its
Subsidiaries' businesses for purposes of hedging exposure to fluctuations in
commodity prices, interest rates or currency exchange rates and not for
speculative purposes.
"HIGHEST LAWFUL RATE" means the maximum lawful interest rate, if any, that
at any time or from time to time may be contracted for, charged, or received
under the laws applicable to any Lender which are presently in effect or, to the
extent allowed by law, under such applicable laws which may hereafter be in
effect and which allow a higher maximum nonusurious interest rate than
applicable laws now allow.
23
"HISTORICAL FINANCIAL STATEMENTS" means the audited financial statements
of the Acquired Business, consisting of consolidated balance sheets as of
February 29, 2004 and February 28, 2003 and the consolidated statements of
income, shareholders' equity and cash flows for the three Fiscal Years ended
February 29, 2004, February 28, 2003 and February 28, 2002, reported on by the
independent public accountants of the Acquired Business that they fairly
present, in all material respects, the financial condition of the Acquired
Business and its Subsidiaries as at the dates indicated and the results of their
operations and their cash flows for the periods indicated.
"HOLDINGS" as defined in the preamble hereto.
"INCREASED AMOUNT DATE" as defined in Section 2.26.
"INCREASED-COST LENDERS" as defined in Section 2.25.
"INDEBTEDNESS", as applied to any Person, means, without duplication, (i)
all indebtedness for borrowed money; (ii) that portion of obligations with
respect to Capital Leases that is properly classified as a liability on a
balance sheet in conformity with GAAP; provided that all such obligations which
are limited in recourse to the property subject to such Capital Lease shall be
included in Indebtedness only to the extent of the book value of such property
on a balance sheet in conformity with GAAP; (iii) notes payable and drafts
accepted representing extensions of credit whether or not representing
obligations for borrowed money; (iv) any obligation owed for all or any part of
the deferred purchase price of property or services (excluding trade payables
and accrued liabilities incurred in the ordinary course of business and any such
obligations incurred under ERISA), which purchase price is (a) due more than six
months from the date of incurrence of the obligation in respect thereof or (b)
evidenced by a note or similar written instrument; (v) all indebtedness secured
by any Lien on any property or asset owned by that Person regardless of whether
the indebtedness secured thereby shall have been assumed by that Person or is
nonrecourse to the credit of that Person, but limited to the fair market value
of such property or asset; (vi) the face amount of any letter of credit issued
for the account of that Person or as to which that Person is otherwise liable
for reimbursement of drawings; (vii) the direct or indirect guaranty,
endorsement (otherwise than for collection or deposit in the ordinary course of
business), co-making, discounting with recourse or sale with recourse by such
Person of the obligation of another; (viii) any obligation of such Person the
primary purpose or intent of which is to provide assurance to an obligee that
the obligation of the obligor thereof will be paid or discharged, or any
agreement relating thereto will be complied with, or the holders thereof will be
protected (in whole or in part) against loss in respect thereof; (ix) any
liability of such Person for an obligation of another through any agreement
(contingent or otherwise) (a) to purchase, repurchase or otherwise acquire such
obligation or any security therefor, or to provide funds for the payment or
discharge of such obligation (whether in the form of loans, advances, stock
purchases, capital contributions or otherwise) or (b) to maintain the solvency
or any balance sheet item, level of income or financial condition of another if,
in the case of any agreement described under subclause (a) or (b) of this clause
(ix), the primary purpose or intent thereof is as described in clause (viii)
above; and (x) all obligations of such Person in respect of any exchange traded
or over-the-counter derivative transaction to the extent required to be
reflected on a balance sheet in conformity with GAAP, including, without
limitation, any Interest Rate Agreement and Currency Agreement; provided that in
no event shall
24
(i) obligations under any Interest Rate Agreement, Commodity Agreement or
Currency Agreement be deemed "Indebtedness" for any purpose under Section 6.8
and (ii) obligations under clauses (vii)-(ix) above be deemed "Indebtedness"
unless the underlying obligation related thereto constitutes Indebtedness. In no
event will obligations in respect of Capital Stock constitute Indebtedness
hereunder.
"INDEMNIFIED LIABILITIES" means, collectively, any and all liabilities,
obligations, losses, damages (including natural resource damages), penalties,
claims (including Environmental Claims), costs (including the costs of any
investigation, study, sampling, testing, abatement, cleanup, removal,
remediation or other response action necessary to remove, remediate, clean up or
abate any Hazardous Materials Activity), reasonable out-of-pocket expenses and
disbursements of any kind or nature whatsoever (including the reasonable fees
and disbursements of counsel for Indemnitees in connection with any
investigative, administrative or judicial proceeding commenced or threatened by
any Person, whether or not any such Indemnitee shall be designated as a party or
a potential party thereto, and any fees or expenses incurred by Indemnitees in
enforcing this indemnity), whether direct, indirect or consequential and whether
based on any federal, state or foreign laws, statutes, rules or regulations
(including securities and commercial laws, statutes, rules or regulations and
Environmental Laws), on common law or equitable cause or on contract or
otherwise, that may be imposed on, incurred by, or asserted against any such
Indemnitee, in any manner relating to or arising out of (i) this Agreement or
the other Credit Documents or the transactions contemplated hereby or thereby
(including the Lenders' agreement to make Credit Extensions or the use or
intended use of the proceeds thereof, or any enforcement of any of the Credit
Documents (including any sale of, collection from, or other realization upon any
of the Collateral or the enforcement of the Guaranty)); (ii) the statements
contained in the Commitment Letter; or (iii) any Environmental Claim or any
Hazardous Materials Activity relating to or arising from, directly or
indirectly, any past or present activity, operation, land ownership, or practice
of Holdings or any of its Subsidiaries.
"INDEMNITEE" as defined in Section 10.3.
"INITIAL AGENTS" means RBC, GSCP and MLPF&S, in their respective
capacities as Agents.
"INSTALLMENT" as defined in Section 2.14(a).
"INSTALLMENT DATE" as defined in Section 2.14(a).
"INTELLECTUAL PROPERTY" as defined in Section 4.26(a).
"INTERCOMPANY DEBT TRANSACTIONS" means any one or more transactions or
series of transactions effected at any time or from time to time in connection
with the Intercompany Debt Documents, including those pursuant to which (a)
Capital Stock is issued by Canadian Holding Company to Holdings pursuant to the
Forward Purchase Agreement, (b) Liens (x) are granted by Company in favor of any
Guarantor Subsidiary or by any Guarantor Subsidiary in favor of Company or
another Guarantor Subsidiary, in each case to secure its obligations under one
or more Intercompany Debt Documents; provided, that the assets secured thereby
shall be limited to
25
the right, title and interest of such Person under the applicable Intercompany
Debt Documents, and (y) encumbering the Capital Stock of Company and the rights
of Company and/or one or more Guarantors under the Forward Purchase Agreement
and the Special Intercompany Note, in each case consisting of requirements that
(i) any transferee of the Capital Stock of Company or the Special Intercompany
Note must assume the obligations of Holdings under the Forward Purchase
Agreement and (ii) any transferee of the rights of Holdings under the Forward
Purchase Agreement must assume the obligations of Holdings under the Forward
Purchase Agreement and foreclose on the Special Intercompany Note, (c)
Indebtedness is incurred, serviced and repaid by Company and/or one or more
Guarantors; provided that to the extent such Indebtedness is (i) owing to a
Person other than Company or a Guarantor Subsidiary, such Indebtedness shall be
repaid on the date, and in the form of funds or assets, incurred and (ii)
incurred by Holdings, the proceeds of such Indebtedness shall be used by
Holdings to purchase Capital Stock of Canadian Holding Company pursuant to the
Forward Purchase Agreement, (d) the obligations of Holdings under the Forward
Purchase Agreement are guaranteed by Company; provided that the only recourse
under any such guarantee shall be against the rights of Company in and under the
Special Intercompany Note and (e) dividends or other distributions (whether by
an interest free advance or otherwise) are made by Company or a Guarantor
Subsidiary to Holdings, the proceeds of which are used by Holdings either to (i)
purchase Capital Stock of Canadian Holding Company pursuant to the Forward
Purchase Agreement or (ii) repay Indebtedness (including interest and fees
payable in connection therewith) of Holdings owing to a Person other than
Company or a Guarantor Subsidiary incurred for the purpose of purchasing Capital
Stock of Canadian Holding Company pursuant to the Forward Purchase Agreement.
"INTERCOMPANY DEBT DOCUMENTS" means the Special Intercompany Note, the
Forward Purchase Agreement, the FPA Security Agreement, the FPA Guaranty and the
SI Moveable Hypothec.
"INTERCOMPANY NOTE" means a promissory note substantially in the form of
Exhibit N.
"INTEREST COVERAGE RATIO" means the ratio as of the last day of any Fiscal
Quarter of (i) Consolidated Adjusted EBITDA for the four-Fiscal Quarter period
then ended, to (ii) Consolidated Cash Interest Expense for such four-Fiscal
Quarter period.
"INTEREST PAYMENT DATE" means with respect to (i) any Base Rate Loan or
Prime Rate Loan each March 31, June 30, September 30 and December 31 of each
year, commencing on the first such date to occur after the Closing Date, and the
final maturity date of such Loan; and (ii) any Eurodollar Rate Loan or Canadian
Eurodollar Rate Loan, the last day of each Interest Period applicable to such
Loan; provided, in the case of each Interest Period of longer than three months'
duration, "Interest Payment Date" shall also include each date that is three
months, or an integral multiple thereof, after the commencement of such Interest
Period. If any such date is not a Business Day, then the Interest Payment Date
shall be the next succeeding Business Day.
"INTEREST PERIOD" means, in connection with a Canadian Eurodollar Rate
Loan or a Eurodollar Rate Loan, an interest period of one, two, three or six
months or, in the case of Eurodollar Rate Loans only and only if available to
all applicable Lenders, twelve months, or, in the case of Canadian Eurodollar
Rate Loans only and subject to the agreement of Administrative Agent, a longer
or shorter period, as selected by Company in the applicable Funding Notice or
26
Conversion/Continuation Notice, (i) initially, commencing on the Credit Date or
Conversion/Continuation Date thereof, as the case may be; and (ii) thereafter,
commencing on the day on which the immediately preceding Interest Period
expires; provided, (a) if an Interest Period would otherwise expire on a day
that is not a Business Day, such Interest Period shall expire on the next
succeeding Business Day unless no further Business Day occurs in such month, in
which case such Interest Period shall expire on the immediately preceding
Business Day; (b) any Interest Period that 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
clauses (c) and (d), of this definition, end on the last Business Day of a
calendar month; (c) no Interest Period with respect to any portion of any Class
of Term Loans shall extend beyond such Class's Term Loan Maturity Date; and (d)
no Interest Period with respect to any portion of the Revolving Loans shall
extend beyond the Revolving Commitment Termination Date.
"INTEREST RATE AGREEMENT" means any interest rate swap agreement, interest
rate cap agreement, interest rate collar agreement, interest rate hedging
agreement or other similar agreement or arrangement.
"INTEREST RATE DETERMINATION DATE" means, with respect to any Interest
Period, the date that is two Business Days prior to the first day of such
Interest Period.
"INTERNAL REVENUE CODE" means the U.S. Internal Revenue Code of 1986, as
amended to the date hereof and from time to time hereafter, and any successor
statute.
"INVESTMENT" means (i) any direct or indirect purchase or other
acquisition by Holdings or any of its Subsidiaries of, or of a beneficial
interest in, any of the Securities of any other Person (other than a Guarantor
Subsidiary); (ii) any direct or indirect redemption, retirement, purchase or
other acquisition for value, by Holdings or any of its Subsidiaries from any
Person (other than a Guarantor Subsidiary), of any Capital Stock of such Person;
and (iii) any direct or indirect loan, advance (other than advances to employees
for moving, entertainment and travel expenses, drawing accounts and similar
expenditures in the ordinary course of business) or capital contribution by
Holdings or any of its Subsidiaries to any other Person (other than a Guarantor
Subsidiary), including all indebtedness and accounts receivable from that other
Person that are not current assets or did not arise from sales to that other
Person in the ordinary course of business. The amount of any Investment shall be
the original cost of such Investment net of any returns of capital on such
Investment plus the cost of all additions thereto, without any adjustments for
increases or decreases in value, or write-ups, write-downs or write-offs with
respect to such Investment. Notwithstanding the foregoing, Restricted Junior
Payments of the type described in clause (ii) or (iii) of the definition thereof
will not be deemed to be Investments.
"INVESTORS" means the Sponsors, their Controlled Investment Affiliates and
the Persons listed on Schedule 1.1.
"ISSUANCE NOTICE" means an Issuance Notice substantially in the form of
Exhibit A-3.
27
"ISSUING BANK" means National Bank of Canada, New York Branch, as Issuing
Bank hereunder, together with its permitted successors and assigns in such
capacity.
"ISSUING LENDER" means a Lender issuing a Letter of Credit pursuant to
Section 2.5.
"JOINDER AGREEMENT" means an agreement substantially in the form of
Exhibit L.
"JOINT LEAD ARRANGERS" as defined in the preamble hereto.
"JOINT VENTURE" means a joint venture, partnership or other similar
arrangement between Holdings or any of its Subsidiaries and a Person or Persons
other than Holdings or any of its Subsidiaries, whether in corporate,
partnership or other legal form; provided in no event shall any corporate
Subsidiary of any Person be considered to be a Joint Venture to which such
Person is a party.
"JUDGMENT CURRENCY" as defined in Section 10.8(a).
"JUDGMENT CURRENCY CONVERSION DATE" as defined in Section 10.8(a).
"KEYSTONE PROPERTIES" means the real properties located at 505 Keystone
Road, Southampton, PA; 3674 Reese Avenue, Riviera Beach, FL; 955 Mearns Road,
Warminster, PA; and 5576 Ontario Mills Parkway, Unit A and B, Ontario, CA.
"LANDLORD PERSONAL PROPERTY COLLATERAL ACCESS AGREEMENT" means a Landlord
Waiver and Consent Agreement substantially in the form of Exhibit K with such
amendments or modifications as may be approved by Collateral Agent.
"LEASEHOLD PROPERTY" means any leasehold interest of any Credit Party as
lessee under any lease of real property.
"LENDER" means each financial institution listed on the signature pages
hereto as a Lender, and any other Person that becomes a party hereto pursuant to
an Assignment Agreement or a Joinder Agreement; provided that under no
circumstance shall Caisse de depot et deplacement du Quebec be considered a
Lender.
"LENDER COUNTERPARTY" means each counterparty to a Secured Hedge Agreement
that is a Lender or an Affiliate of a Lender at the time such Secured Hedge
Agreement is entered into (or on the Closing Date, with respect to Secured Hedge
Agreements existing on the Closing Date) (including any such Person that
subsequently ceases to be a Lender); provided that such Person executes and
delivers to Administrative Agent a letter agreement in form and substance
acceptable to Administrative Agent pursuant to which such Person (i) appoints
Collateral Agent as its agent under the applicable Credit Documents and (ii)
agrees to be bound by the provisions of Sections 9, 10.17 and 10.19.
"LETTER OF CREDIT" means a commercial or standby letter of credit or
letter of guaranty issued or to be issued by an Issuing Lender pursuant to this
Agreement, including the Existing Letters of Credit.
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"LETTER OF CREDIT SUBLIMIT" means the lesser of (i) Can$5.0 million and
(ii) the aggregate unused amount of the Revolving Commitments then in effect.
"LETTER OF CREDIT USAGE" means, as at any date of determination, without
duplication the sum of (i) the maximum aggregate amount which is available for
drawing under all Letters of Credit then outstanding (including the Canadian
Dollar Equivalent of any amount denominated in U.S. Dollars), and (ii) the
aggregate amount of all drawings under Letters of Credit honored by an Issuing
Lender and not theretofore reimbursed by or on behalf of Company (including the
Canadian Dollar Equivalent of any amount denominated in U.S. Dollars).
"LEVERAGE RATIO" means, as of any day, the ratio of (i) Consolidated Total
Debt as of such day to (ii) Consolidated Adjusted EBITDA for the four-Fiscal
Quarter period ended as of the most recently concluded Fiscal Quarter.
"LIEN" means (i) any lien, mortgage, hypothec, pledge, assignment,
security interest, charge or encumbrance of any kind (including any agreement to
give any of the foregoing, any conditional sale or other title retention
agreement, and any lease in the nature thereof) and any option, trust or other
preferential arrangement having the practical effect of any of the foregoing and
(ii) in the case of Securities, any purchase option, call or similar right of a
third party with respect to such Securities (other than, in the case of
Securities representing an interest in a Joint Venture, such purchase option,
call or similar right of a party to the Joint Venture).
"LOAN" means a Tranche A Term Loan, a Tranche B Term Loan, a Revolving
Loan, a Swing Line Loan or a New Term Loan, and for greater certainty shall
include all Bankers' Acceptances and BA Equivalent Advances.
"MAAX HOLDINGS" means MAAX Holdings, Inc., a Delaware corporation.
"MANAGEMENT AGREEMENT" means the Management Agreement, dated as of the
Closing Date, among Sponsors, MAAX Holdings and Company, as in effect on the
Closing Date.
"MARGIN STOCK" as defined in Regulation U of the Board of Governors of the
Federal Reserve System as in effect from time to time.
"MATERIAL ADVERSE EFFECT" means a material adverse effect on (i) the
business, operations, properties, assets or condition (financial or otherwise)
of Holdings and its Subsidiaries taken as a whole; (ii) the ability of any
Credit Party to fully and timely perform its Obligations;; or (iii) the rights,
remedies and benefits available to, or conferred upon, any Agent and any Lender
or any Secured Party under any Credit Document.
"MATERIAL CONTRACT" means any contract or other arrangement to which
Holdings or any of its Subsidiaries is a party (other than the Credit Documents)
for which breach, nonperformance, cancellation or failure to renew could
reasonably be expected to have a Material Adverse Effect.
"MATERIAL REAL ESTATE ASSET" means (i) any fee-owned Real Estate Asset
acquired after the Closing Date having a fair market value at the acquisition
thereof in excess of (x) in the case of a Real Estate Asset located in the
United States, U.S.$750,000 and (y) in the case of a Real
29
Estate Asset located in Canada, Can$1.0 million or (ii) any fee-owned Real
Estate Asset owned on the Closing Date or acquired after the Closing Date having
a fair market value at any time in excess of (x) in the case of a Real Estate
Asset located in the United States, U.S.$1.5 million and (y) in the case of a
Real Estate Asset located in Canada, Can$2.0 million.
"MERGER AGREEMENT" means that certain Merger Agreement dated as of March
10, 2004 by and among 3087052 Nova Scotia Company, 3087053 Nova Scotia Company,
9139-4460 Quebec Inc., 9139-7158 Quebec Inc. and the Acquired Business.
"MOODY'S" means Moody's Investors Service, Inc.
"MORTGAGE" means a mortgage, deed of trust, debenture or deed of hypothec
or other security document securing an interest in a Real Estate Asset, whether
executed on or before the Closing Date with respect to a Closing Date Mortgaged
Property or thereafter pursuant to Section 5.11, substantially in the form of
Exhibit J-1, J-2 or I-3, as applicable, as it may be amended, supplemented or
otherwise modified from time to time.
"MORTGAGE LIEN" means a valid and, subject to any registering, filing
and/or recording, perfected and enforceable First Priority charge, mortgage,
hypothec or Lien in favor of Collateral Agent for the benefit of the Secured
Parties.
"MULTIEMPLOYER PLAN" means any Employee Benefit Plan which is a
"multiemployer plan" as defined in Section 3(37) of ERISA (each, a "U.S.
MULTIEMPLOYER PLAN") or applicable Canadian pension legislation (each, a
"CANADIAN MULTIEMPLOYER PLAN").
"NAIC" means The National Association of Insurance Commissioners, and any
successor thereto.
"NARRATIVE REPORT" means, with respect to the financial statements for
which such narrative report is required, a narrative report describing the
operations of Holdings and its Subsidiaries, in the form prepared for
presentation to senior management thereof for the applicable Fiscal Quarter or
Fiscal Year and for the period from the beginning of the then current Fiscal
Year to the end of such period to which such financial statements relate.
"NET ASSET SALE PROCEEDS" means, with respect to any Asset Sale, an amount
equal to: (i) Cash payments (including any Cash received by way of deferred
payment pursuant to, or by monetization of, a note receivable or otherwise, but
only as and when so received) received by Holdings or any of its Subsidiaries
from such Asset Sale, minus (ii) any commissions and other bona fide costs, fees
and expenses incurred in connection with such Asset Sale, including (a) transfer
taxes or income or gains taxes payable by the seller as a result of any gain
recognized in connection with such Asset Sale, (b) payment of any obligations
(other than the Loans) that are secured by a Lien on the stock or assets in
question and that are required to be repaid under the terms thereof as a result
of such Asset Sale, (c) a reasonable reserve for any indemnification payments
(fixed or contingent) attributable to the seller's indemnities and
representations and warranties to the purchaser in respect of such Asset Sale
undertaken by Holdings or any of its Subsidiaries in connection with such Asset
Sale and (d) Cash escrows to Holdings or any of its Subsidiaries from the sale
price for such Asset Sale and, without duplication, cash reserves
30
required in accordance with GAAP in connection therewith; provided that any Cash
released from such escrow shall constitute Net Asset Sale Proceeds upon such
release.
"NET INSURANCE/CONDEMNATION PROCEEDS" means an amount equal to: (i) any
Cash payments or proceeds received by Holdings or any of its Subsidiaries (a)
under any casualty insurance policy in respect of a covered loss thereunder
other than, so long as no Default exists, any business interruption insurance
policy or (b) as a result of the taking of any assets of Holdings or any of its
Subsidiaries by any Person pursuant to the power of eminent domain, condemnation
or otherwise, or pursuant to a sale of any such assets to a purchaser with such
power under threat of such a taking, minus (ii) (a) any reasonable costs and
expenses incurred by Holdings or any of its Subsidiaries in connection with the
adjustment or settlement of any claims of Holdings or such Subsidiary in respect
thereof, and (b) any bona fide costs and expenses incurred in connection with
any sale of such assets as referred to in clause (i)(b) of this definition,
including transfer taxes and income taxes payable as a result of any gain
recognized in connection therewith.
"NEW TERM LOAN COMMITMENTS" as defined in Section 2.26.
"NEW TERM LOAN EXPOSURE" means, with respect to any Lender, as of any date
of determination, the outstanding principal amount of the New Term Loans of such
Lender.
"NEW TERM LOAN LENDER" as defined in Section 2.26.
"NEW TERM LOAN MATURITY DATE" means the date that New Term Loans of a
Series shall become due and payable in full hereunder, as specified in the
applicable Joinder Agreement, including by acceleration or otherwise.
"NEW TERM LOANS" as defined in Section 2.26.
"NON-ACCEPTANCE LENDER" means (i) a Lender which does not (or the relevant
branch does not) or ceases to accept Bankers' Acceptances in the ordinary course
of its business or (ii) in respect of Lenders which are not Canadian chartered
banks or Schedule III Lenders, a Lender which, by notice in writing to
Administrative Agent and Company, elects thereafter to make BA Equivalent
Advances in lieu of accepting Bankers' Acceptances.
"NON-CONSENTING LENDER" as defined in Section 2.25.
"NON-GUARANTOR SUBSIDIARY" means each Subsidiary of Holdings other than
Company and the Guarantor Subsidiaries.
"NON-U.S. LENDER" as defined in Section 2.22(d).
"NOTE" means a Tranche A Term Loan Note, a Tranche B Term Loan Note, a
Revolving Loan Note or a Swing Line Note.
"NOTES OFFERING" means the issuance on the Closing Date of U.S.$150.0
million of Senior Subordinated Notes by Company.
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"NOTICE" means a Funding Notice, an Issuance Notice, or a
Conversion/Continuation Notice.
"OBLIGATION CURRENCY" as defined in Section 10.8(a).
"OBLIGATIONS" means all obligations of every nature of each Credit Party
from time to time owed to the Agents (including former Agents), the Lenders or
any of them and Lender Counterparties under any Credit Document or Secured Hedge
Agreement, whether for principal, interest (including interest which, but for
the filing of a petition in bankruptcy with respect to such Credit Party, would
have accrued on any Obligation, whether or not a claim is allowed or allowable
against such Credit Party for such interest in the related bankruptcy
proceeding), reimbursement of amounts drawn under Letters of Credit, payments
for early termination of Secured Hedge Agreements, fees, expenses,
indemnification or otherwise.
"OBLIGEE GUARANTOR" as defined in Section 7.7.
"OFAC" as defined in Section 4.27.
"OFFER TO PREPAY" as defined in Section 2.16(i).
"OFFER TO PREPAY AMOUNT" as defined in Section 2.17(c).
"OFFER TO PREPAY DATE" as defined in Section 2.17(c).
"OFFICER'S CERTIFICATE" means a certificate executed by an Authorized
Officer.
"OFF-TITLE SEARCHES" as defined in Section 5.15(a).
"OLD SYSTEM ISSUER" means a Lender, other than a Non-Acceptance Lender,
which elects not to accept Bankers' Acceptances as depository bills under the
DBNA.
"ORGANIZATIONAL DOCUMENTS" means (i) with respect to any corporation, its
certificate or articles of incorporation, organization or amalgamation, as
amended, and its by-laws, as amended, or, as the case may be, its memorandum and
articles, as amended, (ii) with respect to any limited partnership, its
certificate of limited partnership, as amended, and its partnership agreement,
as amended, (iii) with respect to any general partnership, its partnership
agreement, as amended, (iv) with respect to any limited liability company, its
articles of organization, as amended, and its operating agreement and (v) with
respect to any other Person, comparable instruments and documents, as amended.
In the event any term or condition of this Agreement or any other Credit
Document requires any Organizational Document to be certified by a secretary of
state or similar governmental official, the reference to any such
"Organizational Document" shall only be to a document of a type customarily
certified by such governmental official.
"ORIGINAL LENDER" means a Lender that executes this Agreement on the
Closing Date.
"OTHER LIST" as defined in Section 6.17.
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"OTHER TAXES" means any and all stamp, documentary, excise, property or
similar taxes or levies that arise on account of any payment made or required to
be made under any of the Credit Documents or from the execution, delivery,
registration, recording or enforcement of any Credit Document.
"PARENT COMPANIES" means MAAX Holdings and each of its Subsidiaries (if
any) that directly or indirectly owns Capital Stock of Company.
"PBGC" means the Pension Benefit Guaranty Corporation or any successor
thereto.
"PBGF" means the Pension Benefits Guarantee Fund established pursuant to
the Pension Benefits Act (Ontario) or any similar fund or arrangement.
"PENSION PLAN" means any Employee Benefit Plan, other than a Multiemployer
Plan, which is subject to Section 412 of the Internal Revenue Code or Section
302 of ERISA (each, a "U.S. PENSION PLAN") or which is a registered pension plan
as defined in the Income Tax Act (Canada) (each, a "CANADIAN PENSION PLAN").
"PERFECTION CERTIFICATE" means a certificate in the form of Exhibit M-1 or
any other form approved by Collateral Agent, as the same shall be supplemented
from time to time by a Perfection Certificate Supplement or otherwise.
"PERFECTION CERTIFICATE SUPPLEMENT" means a certificate supplement in the
form of Exhibit M-2 or any other form approved by Collateral Agent.
"PERMITTED ACQUISITION" means any acquisition by Company or any of its
wholly-owned Guarantor Subsidiaries, whether by purchase, merger or otherwise,
of all or substantially all of the assets of, more than 50% of the Capital Stock
of, or a business line or unit or a division of, any Person; provided,
(i) immediately prior to, and after giving effect thereto, no
Default or Event of Default shall have occurred and be continuing or would
result therefrom;
(ii) all transactions in connection therewith shall be consummated,
in all material respects, in accordance with all applicable laws and in
conformity with all applicable Governmental Authorizations;
(iii) in the case of the acquisition of Capital Stock, all such
Capital Stock shall be owned by Company or a Guarantor Subsidiary, and
Company shall have taken, or caused to be taken, as of the date such
Person becomes a Subsidiary of Company, each of the actions set forth in
Sections 5.10 and/or 5.11, as applicable;
(iv) Company and its Subsidiaries shall be in compliance with the
financial covenants set forth in Section 6.8 on a pro forma basis after
giving effect to such acquisition in accordance with Section 6.8(e);
(v) Company shall have delivered to Administrative Agent, at least
five Business Days prior to such proposed acquisition, a Compliance
Certificate evidencing
33
compliance with Section 6.8 as required under clause (iv) above, together
with all relevant financial information with respect to such acquired
assets, including the aggregate consideration for such acquisition and any
other information required to demonstrate compliance with Section 6.8;
(vi) any Person or assets or division as acquired in accordance
herewith shall be in a business or lines of business in which Company
and/or its Subsidiaries are permitted to be engaged under Section 6.11;
and
(vii) with respect to any transaction involving aggregate
consideration of more than U.S.$20.0 million, unless Administrative Agent
shall otherwise agree, Company shall have provided Administrative Agent
and the Lenders with (A) historical financial statements for the last
three fiscal years (or, if less, the number of years since formation) of
the Person (and if the Permitted Acquisition is for less than
substantially all of the Capital Stock of such Person, pro forma
historical financial statements of Holdings that account for such
Permitted Acquisition) or business to be acquired (audited if available
and, in the case of a transaction involving aggregate consideration of
more than U.S.$40.0 million, if available without undue cost or delay) and
unaudited financial statements thereof for the most recent interim period
which are available, (B) reasonably detailed projections for the
succeeding five years pertaining to the person or business to be acquired
and updated projections for Company after giving effect to such
transaction, (C) a reasonably detailed description of all material
documentation relating thereto and copies of all material documentation
pertaining to such transaction, and (D) all such other information and
data relating to such transaction or the Person or business to be acquired
as may be reasonably requested by Administrative Agent or the Requisite
Lenders.
"PERMITTED COLLATERAL LIENS" means, subject to the following paragraph,
(x) in the case of a Real Estate Asset subject to a Mortgage, Permitted Liens
allowed by clauses (b), (c), (d), (e), (f), (j), (l) and (r) of Section 6.2 and
(y) in all other cases, any Permitted Lien other than those allowed by clause
(a) of Section 6.2.
Notwithstanding the foregoing, with respect to any Real Estate Asset
subject to a Mortgage, at the time of delivery of such Mortgage Permitted
Collateral Liens shall mean only those Liens set forth in (x) Schedule B to the
applicable Mortgage and (y) Sections 6.02(b) and (r) to the extent such Liens
are obligations of Company or any Subsidiary prior to the delivery of such
Mortgage. In addition, no consensual Liens other than those granted pursuant to
the Collateral Documents shall extend, directly or indirectly, to any Securities
Collateral or Hypothecated Securities (each as defined in the Security
Agreements).
"PERMITTED HOLDER DEBT" means indebtedness owed to any Permitted Holder
that (i) has an aggregate principal amount of no more than Can$100.0 million,
(ii) has a final maturity of at least ten years, (iii) does not provide for the
cash payment of any principal, interest or other amounts until at least ten
years after its issuance and (iv) the net cash proceeds of which are ultimately
contributed as common equity to Company.
"PERMITTED HOLDERS" means John W. Childs, Sponsors and their Controlled
Investment Affiliates.
34
"PERMITTED INDEBTEDNESS" means Indebtedness permitted pursuant to Section
6.1.
"PERMITTED LIENS" means the Liens permitted pursuant to Section 6.2.
"PERMITTED REFINANCING INDEBTEDNESS" means any Indebtedness issued in
exchange for, or the net proceeds of which are used to refund, refinance,
replace, defease or discharge, other Indebtedness; provided that:
(1) the principal amount (or accreted value, if applicable) of such
Permitted Refinancing Indebtedness does not exceed the principal amount
(or accreted value, if applicable) of the Indebtedness extended,
refinanced, renewed, replaced, defeased or refunded (plus all accrued
interest on the Indebtedness and the amount of all expenses and premiums
incurred in connection therewith);
(2) such Permitted Refinancing Indebtedness has a final maturity
date not earlier than the final maturity date of, and has a weighted
average life to maturity equal to or greater than the weighted average
life to maturity of, the Indebtedness being extended, refinanced, renewed,
replaced, defeased or refunded;
(3) if the Indebtedness being extended, refinanced, renewed,
replaced, defeased or refunded is subordinated in right of payment to the
Obligations, such Permitted Refinancing Indebtedness is subordinated in
right of payment to, the Obligations on terms, taken as a whole, at least
as favorable to the Lenders as those contained in the documentation
governing the Indebtedness being extended, refinanced, renewed, replaced,
defeased or refunded; and
(4) such Indebtedness is incurred either by Company or by the
Subsidiary who is the obligor on the Indebtedness being extended,
refinanced, renewed, replaced, defeased or refunded.
"PERSON" means and includes natural persons, corporations, limited
partnerships, general partnerships, limited liability companies, unlimited
companies, limited liability partnerships, joint stock companies, Joint
Ventures, associations, companies, trusts, banks, trust companies, land trusts,
business trusts or other organizations, whether or not legal entities, and
Governmental Authorities.
"PLATFORM" as defined in Section 10.21.
"PLEDGOR" shall mean and include each "Pledgor" and "Grantor" as defined
in the Security Agreements.
"PPSA" means the Personal Property Security Act (or any similar or
equivalent legislation, including the applicable provisions of the Civil Code)
as in effect in any applicable Canadian jurisdiction.
"PREFERRED STOCK" means, with respect to any Person, any and all preferred
or preference Capital Stock (however designated) of such Person.
35
"PRIME RATE LOAN" means a Loan denominated in Canadian Dollars bearing
interest at a rate determined by reference to the Canadian Prime Rate.
"PRINCIPAL OFFICE" means, for each of Administrative Agent, Swing Line
Lender and Issuing Bank, such Person's "Principal Office" as set forth on
Appendix B, or such other office as such Person may from time to time designate
in writing to Company, Administrative Agent and each Lender.
"PRO FORMA FINANCIAL STATEMENTS" as defined in Section 4.7(b).
"PROJECTIONS" as defined in Section 4.8.
"PRO RATA SHARE" means (i) with respect to all payments, computations and
other matters relating to the Tranche A Term Loan of any Lender, the percentage
obtained by dividing (a) the Tranche A Term Loan Exposure of that Lender by (b)
the aggregate Tranche A Term Loan Exposure of all Lenders; (ii) with respect to
all payments, computations and other matters relating to the Tranche B Term Loan
of any Lender, the percentage obtained by dividing (a) the Tranche B Term Loan
Exposure of that Lender by (b) the aggregate Tranche B Term Loan Exposure of all
Lenders; (iii) with respect to all payments, computations and other matters
relating to the Revolving Commitment or Revolving Loans of any Lender or any
Letters of Credit issued or participations purchased therein by any Lender or
any participations in any Swing Line Loans purchased by any Lender, the
percentage obtained by dividing (a) the Revolving Exposure of that Lender by (b)
the aggregate Revolving Exposure of all Lenders; and (iv) with respect to all
payments, computations, and other matters relating to New Term Loan Commitments
or New Term Loans of a particular Series, the percentage obtained by dividing
(a) the New Term Loan Exposure of that Lender with respect to that Series by (b)
the aggregate New Term Loan Exposure of all Lenders with respect to that Series.
For all other purposes with respect to each Lender, "Pro Rata Share" means the
percentage obtained by dividing (A) an amount equal to the sum of the Tranche A
Term Loan Exposure, the Tranche B Term Loan Exposure, the Revolving Exposure and
the New Term Loan Exposure of that Lender, by (B) an amount equal to the sum of
the aggregate Tranche A Term Loan Exposure, the aggregate Tranche B Term Loan
Exposure, the aggregate Revolving Exposure and the aggregate New Term Loan
Exposure of all Lenders.
"PURCHASE AGREEMENT" means the Purchase Agreement related to the Notes
Offering dated as of May 27, 2004 among Company, the Guarantors, Goldman, Sachs
& Co., Merrill Lynch & Co., Merrill Lynch, Pierce, Fenner & Smith Incorporated
and RBC Capital Markets Corporation.
"PZR" as defined in Section 3.1(g)(ii).
"QUALIFIED CAPITAL STOCK" means any Capital Stock other than Capital Stock
which, by its terms (or by the terms of any security into which it is
convertible or for which it is exchangeable), or upon the happening of any
event, (a) matures (excluding any maturity as the result of an optional
redemption by the issuer thereof) or is mandatorily redeemable, pursuant to a
sinking fund obligation or otherwise, or is redeemable at the option of the
holder thereof, in whole or in part, on or prior to 91 days following the latest
Term Loan Maturity Date in effect at
36
the time of issuance of such Capital Stock, (b) is convertible into or
exchangeable (unless at the sole option of the issuer thereof) for (i) debt
securities or (ii) any Capital Stock referred to in (a) above, in each case at
any time on or prior to 91 days following the latest Term Loan Maturity Date in
effect at the time of issuance of such Capital Stock, or (c) contains any
repurchase obligation which may require repurchase of the Capital Stock prior to
payment in full of all Obligations; provided that any Capital Stock that would
constitute Qualified Capital Stock but for provisions thereof giving holders
thereof (or the holders of any security into or for which such Capital Stock is
convertible, exchangeable or exercisable) the right to require the issuer
thereof to redeem or offer to purchase such Capital Stock upon the occurrence of
a change in control or an asset sale occurring prior to 91 days following the
latest Term Loan Maturity Date shall constitute Qualified Capital Stock if such
Capital Stock provides that the issuer thereof will not redeem or offer to
purchase any such Capital Stock pursuant to such provisions prior to the
repayment in full of the Obligations.
"QUEBEC SECURITY DOCUMENTS" means, collectively, (i) the Deeds of Hypothec
to be granted by Company and each Guarantor with assets or a chief executive
office located in Quebec, (ii) the Debenture(s) to be issued by each such entity
and (iii) the Pledge of Debenture Agreement(s) to be granted by each such
entity, each substantially in the form attached as part of Exhibit I-3, as each
may be amended, supplemented or otherwise modified from time to time.
"RBC" as defined in the preamble hereto.
"RBCCM" as defined in the preamble hereto.
"REAL ESTATE ASSET" means, at any time of determination, any interest
(fee, leasehold or otherwise) then owned by any Credit Party in any real
property.
"REFERENCE LENDERS" means up to two Schedule III Lenders which are
designated as such by Administrative Agent and Company from time to time (it
being agreed that Administrative Agent and Company may at any time terminate the
designation of a Lender as a Reference Lender and designate another Schedule III
Lender as a Reference Lender in its place by delivery to the Lenders of a
written notification to such effect executed by Administrative Agent), provided
that if a Person ceases to be a Lender hereunder, then such Person shall
thereupon cease to be a Reference Lender without further action.
"REFINANCING" means the repayment in full of all Indebtedness of the
Acquired Business or any of its Subsidiaries existing prior to the Closing Date
other than Existing Indebtedness and Indebtedness permitted pursuant to Section
6.1(b).
"REFUNDED SWING LINE LOANS" as defined in Section 2.4(d).
"REGISTER" as defined in Section 2.8(b).
"REGULATION D" means Regulation D of the Board of Governors of the Federal
Reserve System, as in effect from time to time.
"REIMBURSEMENT DATE" as defined in Section 2.5(h).
37
"RELATED AGREEMENTS" means, collectively, the Merger Agreement, the
Amalgamation Agreement, the Intercompany Debt Documents, the Senior Subordinated
Notes Indenture and the Purchase Agreement.
"RELATED FUND" means, with respect to any Lender that is an investment
fund, any other investment fund that in the ordinary course of business
regularly invests in commercial loans and that is managed or advised by the same
investment advisor as such Lender or by an Affiliate of such investment advisor.
"RELEASE" means any release, spill, emission, leaking, pumping, pouring,
injection, escaping, deposit, disposal, discharge, dispersal, dumping, leaching
or migration of any Hazardous Material into the indoor or outdoor environment
(including the abandonment or disposal of any barrels, containers or other
closed receptacles containing any Hazardous Material), including the movement of
any Hazardous Material through the air, soil, surface water or groundwater.
"RELEVANT CURRENCY EQUIVALENT" means the U.S. Dollar Equivalent or the
Canadian Dollar Equivalent, as applicable.
"REPLACEMENT LENDER" as defined in Section 2.25.
"REQUISITE CLASS LENDERS" means, at any time of determination, (i) for the
Tranche A Term Loan Lenders, Lenders holding more than 50% of the aggregate
Tranche A Term Loan Exposure of all Lenders; (ii) for the Tranche B Term Loan
Lenders, Lenders holding more than 50% of the aggregate Tranche B Term Loan
Exposure of all Lenders; (iii) for the Revolving Lenders, 50% of the aggregate
Revolving Exposure of all Revolving Lenders; and (iv) for each Class of Lenders
having New Term Loan Exposure, Lenders holding more than 50% of the aggregate
New Term Loan Exposure of that Class.
"REQUISITE LENDERS" means one or more Lenders holding more than 50% of the
sum of (i) the aggregate Tranche A Term Loan Exposure of all Lenders, (ii) the
aggregate Tranche B Term Loan Exposure of all Lenders, (iii) the aggregate
Revolving Exposure of all Lenders and (iv) the aggregate New Term Loan Exposure
of all Lenders.
"RESPONSE" means (a) "response" as such term is defined in CERCLA, 42
U.S.C. Section 9601(24), and (b) all other actions required by any Governmental
Authority or voluntarily undertaken to (i) clean up, remove, treat, abate or in
any other way address any Hazardous Material in the environment; (ii) prevent
the Release or threat of Release, or minimize the further Release, of any
Hazardous Material; or (iii) perform studies and investigations in connection
with, or as a precondition to, clause (i) or (ii) above.
"RESTRICTED JUNIOR PAYMENT" means (i) any dividend or other distribution,
direct or indirect, on account of any shares of any Capital Stock of Holdings or
Company now or hereafter outstanding, except a dividend payable solely in shares
of Qualified Capital Stock to the holders of that class; (ii) any redemption,
retirement, sinking fund or similar payment, purchase or other acquisition for
value, direct or indirect, of any shares of any Capital Stock of any Parent
Company or Company now or hereafter outstanding; (iii) any payment made to
retire, or to obtain the surrender of, any outstanding warrants, options or
other rights to acquire shares of any
38
Capital Stock of any Parent Company or Company now or hereafter outstanding;
(iv) the payment of management fees other than pursuant to the Management
Agreement; provided that during the existence of an Event of Default or a
payment Default, the payment of any management fees shall constitute a
Restricted Junior Payment; and (v) any payment or prepayment of principal of,
premium, if any, or interest on, or redemption, purchase, retirement,
defeasance, sinking fund or similar payment with respect to, any Subordinated
Indebtedness.
"RESTRUCTURING EXPENSES" means losses, expenses and charges incurred in
connection with restructuring by Holdings and/or one or more of its
Subsidiaries, including in connection with integration of acquired businesses or
persons, disposition of one or more Subsidiaries or businesses, exiting of one
or more lines of businesses and relocation or consolidation of facilities,
including severance, lease termination and other non-ordinary-course,
non-operating costs and expenses in connection therewith.
"REVOLVING COMMITMENT" means the commitment of a Lender to make or
otherwise fund any Revolving Loan and to acquire participations in Letters of
Credit and Swing Line Loans hereunder and "REVOLVING COMMITMENTS" means such
commitments of all Lenders in the aggregate. The amount of each Lender's
Revolving Commitment, if any, is set forth on Appendix A-3 or in the applicable
Assignment Agreement or Joinder Agreement, subject to any adjustment or
reduction pursuant to the terms and conditions hereof. The aggregate amount of
the Revolving Commitments as of the Closing Date is Can$50.0 million.
"REVOLVING COMMITMENT PERIOD" means the period from the Closing Date to
but excluding the Revolving Commitment Termination Date.
"REVOLVING COMMITMENT TERMINATION DATE" means the earliest to occur of (i)
the date which is five years and three months after the Closing Date, (ii) the
date the Revolving Commitments are permanently reduced to zero pursuant to
Section 2.15(b) or 2.16, and (iii) the date of the termination of the Revolving
Commitments pursuant to Section 8.1.
"REVOLVING EXPOSURE" means, with respect to any Lender as of any date of
determination, (i) prior to the termination of the Revolving Commitments, that
Lender's Revolving Commitment; and (ii) after the termination of the Revolving
Commitments, the sum of (a) the aggregate outstanding principal amount of the
Revolving Loans of that Lender, (b) in the case of an Issuing Lender, the
aggregate Letter of Credit Usage in respect of all Letters of Credit issued by
that Lender (net of any participations by Lenders in such Letters of Credit),
(c) the aggregate amount of all participations by that Lender in any outstanding
Letters of Credit or any unreimbursed drawing under any Letter of Credit, (d) in
the case of Swing Line Lender, the aggregate outstanding principal amount of all
Swing Line Loans (net of any participations therein by other Lenders), and (e)
the aggregate amount of all participations therein by that Lender in any
outstanding Swing Line Loans, including, in each case, the Canadian Dollar
Equivalent of any amount denominated in U.S. Dollars.
"REVOLVING LENDERS" means the Lenders having Revolving Exposure.
"REVOLVING LOAN" means a Loan made by a Revolving Lender to Company
pursuant to Section 2.2(a).
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"REVOLVING LOAN NOTE" means a promissory note in the form of Exhibit B-3,
as it may be amended, supplemented or otherwise modified from time to time.
"ROLLOVER" means the issuance of new Bankers' Acceptances or the making of
new BA Equivalent Advances (subject to the provisions hereof) in respect of all
or any portion of Bankers' Acceptances (or BA Equivalent Advances made in lieu
thereof) maturing at the end of the BA Interest Period applicable thereto, all
in accordance with Section 2.11.
"S&P" means Standard & Poor's Ratings Services, a division of The McGraw
Hill Companies, Inc.
"SCHEDULE I LENDER" means a Lender which is a U.S. branch of a Canadian
chartered bank listed on Schedule I to the Bank Act (Canada).
"SCHEDULE II LENDER" means a Lender which is a Canadian chartered bank
listed on Schedule II to the Bank Act (Canada).
"SCHEDULE III LENDER" means a Lender which is an authorized foreign bank
listed on Schedule III to the Bank Act (Canada).
"SDN LIST" as defined in Section 6.17.
"SECTION 951 TAXES" as defined in Section 6.5(f).
"SECURED HEDGE AGREEMENT" means each Hedge Agreement with a Lender
Counterparty existing on the Closing Date or thereafter entered into so long as
in the case of Interest Rate Agreements, such agreements do not have a notional
amount in the aggregate in excess of the Loans and Commitments hereunder.
"SECURED PARTIES" means, collectively, Administrative Agent, Collateral
Agent, each other Agent, the Lenders and each Lender Counterparty.
"SECURITIES" means any stock, shares, partnership interests, voting trust
certificates, certificates of interest or participation in any profit-sharing
agreement or arrangement, options, warrants, bonds, debentures, notes, or other
evidences of indebtedness, secured or unsecured, convertible, subordinated or
otherwise, or in general any instruments commonly known as "securities" or any
certificates of interest, shares or participations in temporary or interim
certificates for the purchase or acquisition of, or any right to subscribe to,
purchase or acquire, any of the foregoing.
"SECURITIES ACT" means the Securities Act of 1933, as amended from time to
time, and any successor statute.
"SECURITY AGREEMENTS" shall mean the U.S. Security Agreement, the Canadian
Security Agreement and the Quebec Security Documents.
"SENIOR SUBORDINATED NOTES" means all 9.75% Senior Subordinated Notes due
2012 of Company issued under the Senior Subordinated Notes Indenture.
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"SENIOR SUBORDINATED NOTES INDENTURE" means the indenture dated as of the
Closing Date among Company, the Guarantors and U.S. Bank Trust, N.A., as
trustee, as amended, restated, supplemented or otherwise modified from time to
time in accordance with the terms hereof and thereof.
"SERIES" as defined in Section 2.26.
"SI MOVEABLE HYPOTHEC" means the Moveable Hypothec dated as of the Closing
Date between Canadian Holding Company and Company or its predecessor.
"SODEX FACTORING AGREEMENT" means that certain Convention Cadre, dated as
of February 24, 2004, by and among the Acquired Business, MAAX Canada Inc., MAAX
Spas (Ontario) Inc., MAAX Westco Inc., MAAX Spas (BC) Inc., MAAX-KSD
Corporation, MAAX Southeast Inc., Pearl Baths, Inc., MAAX-Hydro Swirl
Manufacturing Corp., MAAX Midwest Inc., MAAX Spas (Arizona), Inc., Cuisine
Expert - C.E. Cabinets, Inc., 9022-3751 Quebec Inc., Aker Plastics Company Inc.
and NatExport and Sodex, both divisions of the National Bank of Canada.
"SOLVENCY CERTIFICATE" means a Solvency Certificate of the chief financial
officer of Holdings and Company substantially in the form of Exhibit G-2.
"SOLVENT" means, with respect to any Credit Party, that as of the date of
determination, both (i) (a) the sum of such Credit Party's debt (including
contingent liabilities) does not exceed the present fair saleable value of such
Credit Party's present assets; (b) such Credit Party's capital is not
unreasonably small in relation to its business as contemplated on the Closing
Date and reflected in the Projections or with respect to any transaction
contemplated or undertaken after the Closing Date; and (c) such Person has not
incurred and does not intend to incur, or believe that it will incur, debts
beyond its ability to pay such debts as they become due (whether at maturity or
otherwise); and (ii) such Person is "solvent" within the meaning given that term
and similar terms under applicable laws relating to fraudulent transfers and
conveyances. For purposes of this definition, the amount of any contingent
liability at any time shall be computed as the amount that, in light of all of
the facts and circumstances existing at such time, represents the amount that
can reasonably be expected to become an actual or matured liability
(irrespective of whether such contingent liabilities meet the criteria for
accrual under Statement of Financial Accounting Standards No. 5).
"SPA BUSINESS" means the assets and business entities owned Company and
its Subsidiaries engaged solely in the manufacture and sale of spas.
"SPECIAL INTERCOMPANY NOTE" means that certain Note, dated on or about the
Closing Date, made by Canadian Holding Company in favor of Company or its
predecessor, as such note may be amended, restated, supplemented or otherwise
modified from time to time.
"SPECIAL SCHEDULE I LENDER" means a Lender which is a Canadian chartered
bank listed on Schedule I to the Bank Act (Canada) but excludes any U.S. branch
of any such Lender.
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"SPONSORS" means J.W. Childs Associates L.P., Borealis Private Equity
Limited Partnership, Borealis (QLP) Private Equity Limited Partnership and
Ontario Municipal Employees Retirement Board.
"ST. MARIE FACILITY" means the facility owned by the Acquired Business and
located at 640, Cameron, Sainte-Marie, Quebec, Canada.
"SUBJECT TRANSACTION" as defined in Section 6.8(e).
"SUBORDINATED INDEBTEDNESS" means Indebtedness of any Credit Party that is
by its terms subordinated in right of payment to the Obligations of such Credit
Party, including the Senior Subordinated Notes.
"SUBSIDIARY" means, with respect to any Person, any corporation,
partnership, limited liability company, association, joint venture or other
business entity of which more than 50% of the total voting power of the Capital
Stock entitled (without regard to the occurrence of any contingency) to vote in
the election of the Person or Persons (whether directors, managers, trustees or
other Persons performing similar functions) having the power to direct or cause
the direction of the management and policies thereof is at the time owned or
controlled, directly or indirectly, by that Person or one or more of the other
Subsidiaries of that Person or a combination thereof; provided, in determining
the percentage of ownership interests of any Person controlled by another
Person, no ownership interest in the nature of a "qualifying share" of the
former Person shall be deemed to be outstanding. Unless expressly stated
otherwise, when reference is made herein directly or indirectly to the
Subsidiaries of Company, "Subsidiaries" shall be deemed to include Canadian
Holding Company and its Subsidiaries regardless of whether they are actually
Subsidiaries of Company so long as they are Subsidiaries of Holdings.
"SUCCESSFUL SYNDICATION" shall have the meaning given to such term in the
Commitment Letter.
"SUPPLEMENTAL COLLATERAL AGENT" as defined in Section 9.1(b).
"SWING LINE ACCOUNTS" as defined in Section 2.4(b).
"SWING LINE LENDER" means National Bank of Canada, New York Branch, in its
capacity as Swing Line Lender hereunder, together with its permitted successors
and assigns in such capacity.
"SWING LINE LOAN" means a Loan made by Swing Line Lender to Company
pursuant to Section 2.4.
"SWING LINE LOAN SUBCOMMITMENT" means the commitment of Swing Line Lender
to make Swing Line Loans to Company pursuant to Section 2.4(a).
"SWING LINE NOTE" means a promissory note in the form of Exhibit B-5, as
it may be amended, supplemented or otherwise modified from time to time.
"SYNDICATION AGENT" as defined in the preamble hereto.
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"TAX" means any and all present or future tax, levy, impost, duty,
assessment, charge, fee, deduction or withholding of any nature imposed by any
Governmental Authority (including all interest and penalties with respect
thereto) and whatever called, by whomsoever, on whomsoever and wherever imposed,
levied, collected, withheld or assessed.
"TERM LOAN" means a Tranche A Term Loan, a Tranche B Term Loan or a New
Term Loan.
"TERM LOAN COMMITMENT" means the Tranche A Term Loan Commitment, the
Tranche B Term Loan Commitment or the New Term Loan Commitment of a Lender, and
"TERM LOAN COMMITMENTS" means such commitments of all Lenders.
"TERM LOAN MATURITY DATE" means the Tranche A Term Loan Maturity Date, the
Tranche B Term Loan Maturity Date and the New Term Loan Maturity Date of any
Series of New Term Loans.
"TERMINATED LENDER" as defined in Section 2.25.
"TITLE POLICY" as defined in Section 3.1(g)(ii).
"TOTAL UTILIZATION OF REVOLVING COMMITMENTS" means, as at any date of
determination, the sum of (i) the aggregate principal amount of all outstanding
Revolving Loans (other than Revolving Loans made for the purpose of repaying any
Refunded Swing Line Loans or reimbursing an Issuing Lender for any amount drawn
under any Letter of Credit, but not yet so applied), (ii) the aggregate
principal amount of all outstanding Swing Line Loans, and (iii) the Letter of
Credit Usage, in each case, including the Canadian Dollar Equivalent of any
amount denominated in U.S. Dollars.
"TRANCHE A TERM LOAN" means a Tranche A Term Loan made by a Lender to
Company pursuant to Section 2.1(a)(i).
"TRANCHE A TERM LOAN COMMITMENT" means the commitment of a Lender to make
or otherwise fund a Tranche A Term Loan and "TRANCHE A TERM LOAN COMMITMENTS"
means such commitments of all Lenders in the aggregate. The amount of each
Lender's Tranche A Term Loan Commitment, if any, is set forth on Appendix A-1 or
in the applicable Assignment Agreement, subject to any adjustment or reduction
pursuant to the terms and conditions hereof. The aggregate amount of the Tranche
A Term Loan Commitments as of the Closing Date is Can$130.0 million.
"TRANCHE A TERM LOAN EXPOSURE" means, with respect to any Lender, as of
any date of determination, the outstanding principal amount of the Tranche A
Term Loans of such Lender; provided, at any time prior to the making of the
Tranche A Term Loans, the Tranche A Term Loan Exposure of any Lender shall be
equal to such Lender's Tranche A Term Loan Commitment.
"TRANCHE A TERM LOAN LENDERS" means the Lenders having Tranche A Term Loan
Exposure.
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"TRANCHE A TERM LOAN MATURITY DATE" means the earlier of (i) the date
which is five years and three months after the Closing Date, and (ii) the date
that all Tranche A Term Loans shall become due and payable in full hereunder,
whether by acceleration or otherwise.
"TRANCHE A TERM LOAN NOTE" means a promissory note in the form of Exhibit
B-1, as it may be amended, supplemented or otherwise modified from time to time.
"TRANCHE B TERM LOAN" means a Tranche B Term Loan made by a Lender to
Company pursuant to Section 2.1(a)(ii).
"TRANCHE B TERM LOAN COMMITMENT" means the commitment of a Lender to make
or otherwise fund a Tranche B Term Loan and "TRANCHE B TERM LOAN COMMITMENTS"
means such commitments of all Lenders in the aggregate. The amount of each
Lender's Tranche B Term Loan Commitment, if any, is set forth on Appendix A-2 or
in the applicable Assignment Agreement, subject to any adjustment or reduction
pursuant to the terms and conditions hereof. The aggregate amount of the Tranche
B Term Loan Commitments as of the Closing Date is U.S.$115.0 million.
"TRANCHE B TERM LOAN EXPOSURE" means, with respect to any Lender, as of
any date of determination, the outstanding principal amount of the Tranche B
Term Loans of such Lender; provided, at any time prior to the making of the
Tranche B Term Loans, the Tranche B Term Loan Exposure of any Lender shall be
equal to such Lender's Tranche B Term Loan Commitment.
"TRANCHE B TERM LOAN LENDERS" means the Lenders having Tranche B Term Loan
Exposure.
"TRANCHE B TERM LOAN MATURITY DATE" means the earlier of (i) the seventh
anniversary of the Closing Date, and (ii) the date that all Tranche B Term Loans
shall become due and payable in full hereunder, whether by acceleration or
otherwise.
"TRANCHE B TERM LOAN NOTE" means a promissory note in the form of Exhibit
B-2, as it may be amended, supplemented or otherwise modified from time to time.
"TRANSACTIONS" means the Acquisition, the Equity Financing, the
Refinancing and the Notes Offering and the other transactions contemplated by
the Related Agreements.
"TYPE OF LOAN" means (i) with respect to either Term Loans or Revolving
Loans, a Base Rate Loan, a Prime Rate Loan, a BA Discount Rate Loan, a
Eurodollar Rate Loan or a Canadian Eurodollar Rate Loan and (ii) with respect to
Swing Line Loans, a Prime Rate Loan or Base Rate Loan.
"UCC" means the Uniform Commercial Code as in effect in any applicable
United States jurisdiction.
"U.S. BORROWINGS" means Loans denominated in U.S. Dollars.
44
"U.S. DOLLAR EQUIVALENT" means, as to any amount denominated in Canadian
Dollars as of any date of determination, the amount of U.S. Dollars which would
be required to purchase such amount of Canadian Dollars at the Bank of Canada
noon (Toronto time) spot rate on such date or, if such date of determination is
not a Business Day, on the Business Day immediately preceding such date of
determination.
"U.S. DOLLARS" and "U.S.$" mean the lawful money of the United States of
America.
"U.S. EMPLOYEE BENEFIT PLAN" as set forth in the definition of Employee
Benefit Plan.
"U.S. PRIME RATE" means the rate of interest quoted by Administrative
Agent at its New York branch as its U.S. prime rate, as in effect from time to
time. The U.S. Prime Rate is a reference rate and does not necessarily represent
the lowest or best rate actually charged to any customer. Administrative Agent
or any other Lender may make commercial loans or other loans at rates of
interest at, above or below the U.S. Prime Rate.
"U.S. REVOLVING LOAN" means each Revolving Loan denominated in U.S.
Dollars.
"U.S. SECURITY AGREEMENT" means the U.S. Security Agreement to be executed
by Company and each Guarantor with personal property located within, or
organized under the laws of, the United States or any State thereof
substantially in the form of Exhibit I-1, as it may be amended, supplemented or
otherwise modified from time to time.
"U.S. SWING LINE ACCOUNT" as defined in Section 2.4(b).
"U.S. SWING LINE LOAN" means each Swing Line Loan denominated in U.S.
Dollars.
1.2. ACCOUNTING TERMS. Except as otherwise expressly provided herein, all
accounting terms not otherwise defined herein shall have the meanings assigned
to them in conformity with GAAP. Financial statements and other information
required to be delivered by Holdings or Company to Lenders pursuant to Sections
5.1(a), 5.1(b) and 5.1(c) shall be prepared in accordance with GAAP as in effect
at the time of such preparation (and delivered together with the reconciliation
statements provided for in Section 5.1(e), if applicable). Subject to the
foregoing, calculations in connection with the financial covenants and other
provisions hereof shall utilize GAAP as in effect on the Closing Date.
1.3. INTERPRETATION, ETC. Any of the terms defined herein may, unless the
context otherwise requires, be used in the singular or the plural, depending on
the reference. References herein to real and personal property shall be deemed
to include immovable and movable property, respectively, within the meaning of
the Civil Code, references to perfect or perfection shall, in connection with
any security or opinion relating to the Province of Quebec, be deemed to mean to
set up or render opposable against third parties, within the meaning of the
Civil Code, references to hypothec shall have the meaning ascribed to such term
in the Civil Code, and references herein to corporations shall be deemed to
include companies. References herein to any Section, Appendix, Schedule or
Exhibit shall be to a Section, an Appendix, a Schedule or an Exhibit, as the
case may be, hereof unless otherwise specifically provided. The use herein of
the word "include" or "including", when following any general statement, term or
matter, shall not be construed to limit such statement, term or matter to the
specific items or matters set forth
45
immediately following such word or to similar items or matters, whether or not
no limiting language (such as "without limitation" or "but not limited to" or
words of similar import) is used with reference thereto, but rather shall be
deemed to refer to all other items or matters that fall within the broadest
possible scope of such general statement, term or matter. No Credit Party shall
be deemed in violation of any covenants in Section 6.1, 6.2, 6.5, 6.7, 6.9 or
6.10 due solely to fluctuations in exchange rates. The ability to enter into any
transaction pursuant to Section 6.1, 6.2, 6.5, 6.7, 6.9 or 6.10 shall be
determined on the potential date of any such transaction by including the U.S.
Dollar Equivalent of any applicable amounts denominated in Canadian Dollars
(whether related to past transactions or the transaction being tested).
SECTION 2. LOANS AND LETTERS OF CREDIT
2.1. TERM LOANS.
(a) Loan Commitments. Subject to the terms and conditions hereof,
(i) each Lender severally agrees to make, on the Closing Date,
a Tranche A Term Loan to Company in an amount equal to such Lender's
Tranche A Term Loan Commitment; and
(ii) each Lender severally agrees to make, on the Closing
Date, a Tranche B Term Loan to Company in an amount equal to such
Lender's Tranche B Term Loan Commitment.
Company may make only one borrowing under each of the Tranche A Term Loan
Commitments and Tranche B Term Loan Commitments which shall be on the Closing
Date. Any amount borrowed under this Section 2.1(a) and subsequently repaid or
prepaid may not be reborrowed. Each Lender's Tranche A Term Loan Commitment and
Tranche B Term Loan Commitment shall terminate immediately and without further
action on the Closing Date after giving effect to the funding of such Lender's
Tranche A Term Loan Commitment and Tranche B Term Loan Commitment on such date.
(b) Borrowing Mechanics for Term Loans.
(i) Company shall deliver to Administrative Agent a fully
executed Funding Notice no later than 2:00 p.m. (Toronto time) at
least one Business Day (or, if any Eurodollar Rate Loans or BA
Discount Rate Loans are requested by Company, three Business Days)
prior to the Closing Date. Promptly upon receipt by Administrative
Agent of such Funding Notice, Administrative Agent shall notify each
Lender of the proposed borrowing. It is understood and agreed that
when a Funding Notice with respect to Tranche A Term Loans is
delivered and BA Discount Rate Loans are requested, with respect to
Schedule I Lenders, such request for BA Discount Rate Loans shall be
deemed a request for Canadian Eurodollar Rate Loans from such
Lenders with an Interest Period equal to the elected BA Interest
Period.
(ii) Each Lender shall make its Tranche A Term Loan and/or
Tranche B Term Loan, as the case may be, available to Administrative
Agent not
46
later than 12:00 noon (Toronto time) on the Closing Date, by wire
transfer of same day funds in Canadian Dollars, with respect to its
Tranche A Term Loans and in U.S. Dollars, with respect to its
Tranche B Term Loans, at Administrative Agent's Principal Office.
Upon satisfaction or waiver of the conditions precedent specified
herein, Administrative Agent shall make the proceeds of the Term
Loans available to Company on the Closing Date by causing an amount
of same day funds in Canadian Dollars, with respect to the Tranche A
Term Loans and in U.S. Dollars, with respect to the Tranche B Term
Loans, the sum of which is equal to the proceeds of all such Loans
received by Administrative Agent from Lenders to be credited to the
account of Company at Administrative Agent's Principal Office or to
such other account as may be designated in writing to Administrative
Agent by Company.
2.2. REVOLVING LOANS.
(a) Revolving Commitments. During the Revolving Commitment Period,
subject to the terms and conditions hereof, each Lender severally agrees to make
Revolving Loans, in any Approved Currency specified in the applicable Funding
Notice, to Company in an aggregate amount up to but not exceeding such Lender's
Revolving Commitment (including the Canadian Dollar Equivalent of any amount
denominated in U.S. Dollars); provided that after giving effect to the making of
any Revolving Loans in no event shall the Total Utilization of Revolving
Commitments exceed the aggregate Revolving Commitments then in effect. Amounts
borrowed pursuant to this Section 2.2(a) may be repaid and reborrowed during the
Revolving Commitment Period. Each Lender's Revolving Commitment shall expire on
the Revolving Commitment Termination Date and all Revolving Loans and all other
amounts owed hereunder with respect to the Revolving Loans and the Revolving
Commitments shall be paid in full no later than such date.
(b) Borrowing Mechanics for Revolving Loans.
(i) Except pursuant to Section 2.5(h), Revolving Loans that
are Prime Rate Loans, Canadian Eurodollar Rate Loans or BA Discount
Rate Loans shall be made in an aggregate minimum amount of Can$1.0
million and integral multiples of Can$100,000 in excess of that
amount, and Revolving Loans that are Base Rate Loans or Eurodollar
Rate Loans shall be in an aggregate minimum amount of U.S.$1.0
million and integral multiples of U.S.$100,000 in excess of such
amount.
(ii) Whenever Company desires that Revolving Lenders make
Revolving Loans, Company shall deliver to Administrative Agent a
fully executed and delivered Funding Notice no later than 12:00 noon
(Toronto time) (or provide the information required by such Funding
Notice by telephone by such time, promptly followed by delivery in
writing of such Funding Notice) at least three Business Days in
advance of the proposed Credit Date in the case of a Eurodollar Rate
Loan or BA Discount Rate Loan, and at least one Business Day in
advance of the proposed Credit Date in the case of a Revolving Loan
that is a Base Rate Loan or Prime Rate Loan. Except as otherwise
provided herein, a
47
Funding Notice for a Revolving Loan that is a BA Discount Rate Loan
shall be irrevocable, and a Funding Notice for a Revolving Loan that
is a Eurodollar Rate Loan shall be irrevocable on and after the
related Interest Rate Determination Date, and Company shall be bound
to make a borrowing in accordance therewith. It is understood and
agreed that when a Funding Notice with respect to Revolving Loans is
delivered and BA Discount Rate Loans are requested, with respect to
Schedule I Lenders, such request for BA Discount Rate Loans shall be
deemed a request for Canadian Eurodollar Rate Loans from such
Lenders with an Interest Period equal to the elected BA Interest
Period.
(iii) Notice of receipt of each Funding Notice in respect of
Revolving Loans, together with the amount of each Lender's Pro Rata
Share thereof, if any, together with the applicable interest rate,
shall be provided by Administrative Agent to each applicable Lender
by telefacsimile with reasonable promptness, but (provided
Administrative Agent shall have received such notice by 10:00 a.m.
(Toronto time)) not later than 2:00 p.m. (Toronto time) on the same
day as Administrative Agent's receipt of such Notice from Company.
(iv) Each Revolving Lender shall make the amount of its
Revolving Loan available to Administrative Agent not later than
12:00 noon (Toronto time) on the applicable Credit Date by wire
transfer of same day funds in Canadian Dollars, with respect to
Canadian Revolving Loans, and U.S. Dollars, with respect to U.S.
Revolving Loans, at Administrative Agent's Principal Office. Except
as provided herein, upon satisfaction or waiver of the conditions
precedent specified herein, Administrative Agent shall make the
proceeds of such Revolving Loans available to Company on the
applicable Credit Date by causing an amount of same day funds in
Canadian Dollars, with respect to Canadian Revolving Loans, and U.S.
Dollars, with respect to U.S. Revolving Loans, equal to the proceeds
of all such Revolving Loans received by Administrative Agent from
Revolving Lenders to be credited to the account of Company at
Administrative Agent's Principal Office or such other account as may
be designated in writing to Administrative Agent by Company and
reasonably acceptable to Administrative Agent.
2.3. BANKERS' ACCEPTANCES.
(a) Bankers' Acceptances. Company may request, in accordance with
the provisions of this Section 2.3, from time to time during the period from the
Closing Date to but excluding the 30th day prior to the Revolving Commitment
Termination Date or Tranche A Term Loan Maturity Date, as applicable, that the
Lenders accept Bankers' Acceptances issued by Company or make BA Equivalent
Advances to Company. Subject to the terms and conditions of this Agreement and
in reliance upon the representations and warranties of Company herein set forth,
such Lenders shall accept such Bankers' Acceptances, or make BA Equivalent
Advances in lieu thereof, in accordance with the provisions of this Section 2.3;
provided that Company shall not request that any Lender having a Term Loan
Commitment accept such Bankers' Acceptances, or make BA Equivalent Advances (and
no such Lender shall do so), except
48
(i) on the Closing Date to fund the advance of the Tranche A
Term Loan Commitment, if so requested in the Funding Notice
therefor,
(ii) as Rollovers of existing Bankers' Acceptances or BA
Equivalent Advances,
(iii) as Conversions from Prime Rate Loans into Bankers'
Acceptances or BA Equivalent Advances,
in any case in Sections 2.3(a)(i), (ii) and (iii), involving no increase in
borrowing under the Tranche A Term Loan Commitment.
Company shall not request that any Revolving Lender or Tranche A Term Loan
Lender accept such Bankers' Acceptances, or make BA Equivalent Advances (and no
Revolving Lender or Tranche A Term Loan Lender shall do so), if, after giving
effect to such issuance a Bankers' Acceptance or BA Equivalent Advance would
have a term ending later than the Revolving Commitment Termination Date or
Tranche A Term Loan Maturity Date, as the case may be. Company shall not request
that any Revolving Lender accept such Bankers' Acceptances, or make BA
Equivalent Advances (and no Revolving Lender shall do so), if after giving
effect to such issuances the Total Utilization of Revolving Commitments would
exceed the Revolving Commitment.
(b) Applicable Provisions. The following provisions shall apply to
each Bankers' Acceptance hereunder:
(i) the face amount at maturity of each draft drawn by Company
to be accepted as a Bankers' Acceptance shall be Can$100,000 and
integral multiples of Can$1000 in excess thereof;
(ii) each draft drawn by Company and presented for acceptance
by a Lender shall be drawn on the standard form of such Lender in
effect at the time, specifying the BA Interest Period; provided that
Administrative Agent may require the Lenders to use a generic form
of Bankers' Acceptance, in a form satisfactory to each Lender,
acting reasonably, provided by Administrative Agent for such purpose
in place of the Lenders' own forms;
(iii) subject to Section 2.3(b)(iv), Bankers' Acceptances
shall be signed by duly authorized officers of Company or, in the
alternative, the signatures of such officers may be mechanically
reproduced in facsimile thereon and Bankers' Acceptances bearing
such facsimile signatures shall be binding on Company as if they had
been manually executed and delivered by such officers on behalf of
Company. Notwithstanding that any person whose manual or facsimile
signature appears on any Bankers' Acceptance may no longer be an
authorized signatory for Company on the date of issuance of a
Bankers' Acceptance, such signature shall nevertheless be valid and
sufficient for all purposes as if such authority had remained in
force at the time of such issuance and any such Bankers' Acceptance
shall be binding on Company; and
49
(iv) in lieu of Company signing Bankers' Acceptances in
accordance with Section 2.3(b)(iii), and for so long as the power of
attorney in Section 2.3(c) is in force with respect to a given
Lender, such Lender shall execute and deliver Bankers' Acceptances
on behalf of Company in accordance with the provisions thereof and,
for certainty, all references herein to drafts drawn by Company,
Bankers' Acceptances executed by Company or similar expressions
shall be deemed to include Bankers' Acceptances executed in
accordance with a power of attorney, unless the context otherwise
requires.
If and for so long as the power of attorney referred to in Section 2.3(c) is in
force with respect to each Lender, it is intended that pursuant to the DBNA, all
Bankers' Acceptances accepted by the Lenders (other than Old System Issuers)
under this Agreement will be issued in the form of a "depository bill" (as
defined in the DBNA), and deposited with a Clearing House. In order to give
effect to the foregoing, Administrative Agent will, subject to the approval of
Company and the Lenders (other than Old System Issuers), establish and notify
Company and the Lenders of any additional procedures, consistent with the terms
of this Agreement and the DBNA, as are reasonably necessary to accomplish such
intention, including:
(A) any instrument held by Administrative Agent for the
purposes of Bankers' Acceptances will have marked prominently
and legibly on its face and within its text, at or before the
time of issue, the words "This is a depository bill subject to
the Depository Bills and Notes Act (Canada)";
(B) any reference to the authentication of the Bankers'
Acceptance will be removed; and
(C) any reference to the "bearer" will be removed and
such Bankers' Acceptances will not be marked with any words
prohibiting negotiation, transfer or assignment of it or of an
interest in it.
(c) Power of Attorney. As a condition precedent to each Lender's
obligation to accept Bankers' Acceptances hereunder, Company hereby appoints
each Lender, acting by any authorized signatory of the Lender in question, the
attorney of Company:
(i) to sign for and on behalf and in the name of Company as
drawer, drafts in such Lender's standard form which are depository
bills as defined in the DBNA, payable to a Clearing House;
(ii) for drafts which are not depository bills, to sign for
and on behalf and in the name of Company as drawer and to endorse on
its behalf, Bankers' Acceptances drawn on such Lender payable to the
order of such Lender;
(iii) for BA Discount Notes, to sign for and on behalf and in
the name of Company as drawer and to endorse on its behalf BA
Discount Notes payable to the order of such Lender;
50
(iv) to fill in the amount, date and maturity date of such
Bankers' Acceptances (or BA Discount Notes as applicable); and
(v) to deposit and/or deliver such Bankers' Acceptances which
have been accepted by such Lender or such BA Discount Notes which
are payable to the order of such Lender;
provided that such acts in each case are to be undertaken by the Lender in
question strictly in accordance with instructions given to such Lender by
Company as provided in this Section. For certainty, signatures of any authorized
signatory of a Lender may be mechanically reproduced in facsimile on Bankers'
Acceptances (or BA Discount Notes, as applicable) in accordance herewith and
such facsimile signatures shall be binding and effective as if they had been
manually executed by such authorized signatory of such Lender.
The communication in writing by Company, or on behalf of Company by
Administrative Agent, to the Lender of the instructions set out in the Funding
Notices and Conversion/Continuation Notices referred to above shall constitute
(a) the authorization and instruction of Company to the Lender to sign for and
on behalf and in the name of Company as drawer of the requested Bankers'
Acceptances (or BA Discount Notes, as applicable) and to complete and/or endorse
Bankers' Acceptances (or BA Discount Notes, as applicable) in accordance with
such information as set out above, and (b) the request of Company to the Lender
to accept such Bankers' Acceptances and deposit the same with a Clearing House
or deliver the same, as the case may be, in each case in accordance with this
Agreement and such instructions. Company acknowledges that a Lender shall not be
obligated to accept any such Bankers' Acceptances except in accordance with the
provisions of this Agreement.
A Lender shall be and it is hereby authorized to act on behalf of Company
upon and in compliance with instructions communicated to that Lender as provided
herein if the Lender reasonably believes such instructions to be genuine. If a
Lender accepts Bankers' Acceptances pursuant to any such instructions, that
Lender shall confirm particulars of such instructions and advise Administrative
Agent that it has complied therewith by notice in writing to Administrative
Agent in accordance with the provisions hereof. A Lender's actions in compliance
with such instructions, confirmed and advised to Administrative Agent by such
notice, shall be prima facie evidence of having been in accordance with the
instructions of Company.
(d) Revocation. The power of attorney in Section 2.3(c) may be
revoked by Company with respect to any particular Lender at any time upon not
less than 2 Business Days' prior written notice served upon the Lender in
question and Administrative Agent; provided that no such revocation shall
reduce, limit or otherwise affect the obligations of Company in respect of any
Bankers' Acceptance (or BA Discount Note, as applicable) executed, completed,
endorsed, deposited and/or delivered in accordance herewith prior to the time at
which such revocation becomes effective. If the power of attorney is so revoked
with respect to any Lender, Company shall, from time to time as required by the
applicable Lender, provide to Administrative Agent for delivery to each such
Lender drafts drawn in blank by Company (pre-endorsed and otherwise in fully
negotiable form, if applicable) in quantities sufficient for each such Lender to
fulfill its obligations hereunder. Any such pre-signed drafts which are
delivered
51
by Company to Administrative Agent or a Lender shall be held in safekeeping by
Administrative Agent or such Lender, as the case may be, with the same degree of
care as if they were Administrative Agent's or such Lender's property, and shall
only be dealt with by the Lenders and Administrative Agent in accordance
herewith. No Lender shall be responsible or liable for its failure to make its
share of any Bankers' Acceptances required hereunder if the cause of such
failure is, in whole or in part, due to the failure of Company to provide such
pre-signed drafts to Administrative Agent (for delivery to such Lender) on a
timely basis.
(e) Delivery of Drafts. By 11:00 a.m. (Toronto time) on the
applicable Funding Date or Conversion/Continuation Date, Company shall (i)
either deliver to each Lender in Toronto, or, if previously delivered, be deemed
to have authorized each Lender to complete and accept, or (ii) where the power
of attorney in Section 2.3(c) is in force with respect to a Lender, be deemed to
have authorized each such Lender to sign on behalf of Company, complete and
accept, drafts drawn by Company on such Lender in a principal amount at maturity
equal to such Lender's share of the Bankers' Acceptances specified by Company in
the relevant Funding Notice or Conversion/Continuation Notice, as the case may
be, as notified to the Lenders by Administrative Agent.
(f) Apportionment. Upon receipt by Administrative Agent of a Funding
Notice or Conversion/Continuation Notice from Company requesting the issuance of
Bankers' Acceptances, Administrative Agent shall promptly notify the Lenders
thereof and advise each Lender of the aggregate face amount of Bankers'
Acceptances to be accepted and purchased by such Lender, the date of issue and
the BA Interest Period for such Loan; the apportionment among the Lenders of the
face amounts of Bankers' Acceptances to be accepted by each Lender shall be
determined by Administrative Agent by reference and in proportion to the
respective applicable Commitments of each Lender; provided that, when such
apportionment cannot be evenly made, Administrative Agent shall round
allocations among such Lenders consistent with Administrative Agent's normal
money market practices.
(g) Rate Determination. On each Funding Date or
Conversion/Continuation Date involving the issuance of Bankers' Acceptances:
(i) on or about 10:00 a.m. (Toronto time) on such date,
Administrative Agent shall determine the CDOR Rate and shall obtain
quotations from the Reference Lenders in order to determine the BA
Discount Rate then applicable to Bankers' Acceptances accepted by
such Schedule II Lender and Schedule III Lender in respect of an
issue of Bankers' Acceptances in a comparable amount and with
comparable maturity to the Bankers' Acceptances proposed to be
issued on such date;
(ii) on or about 10:00 a.m. (Toronto time) on such date,
Administrative Agent shall determine the BA Discount Rate applicable
to each Lender and shall advise each Lender of the BA Discount Rate
applicable to it;
(iii) each Lender shall complete and accept, in accordance
with the Funding Notice or Conversion/Continuation Notice delivered
by Company and advised by Administrative Agent in connection with
such issue, its share of the
52
Bankers' Acceptances to be issued on such date and shall purchase
such Bankers' Acceptances for its own account at a purchase price
which reflects the BA Discount Rate applicable to such issue; and
(iv) in the case of a borrowing, each Lender shall, on the
Funding Date, remit the BA Discount Proceeds or advance the BA
Equivalent Advance, as the case may be, payable by such Lender (net
of the stamping fee payable to such Lender pursuant to Section
2.3(k)) to Administrative Agent for the account of Company in
accordance with Section 2.2(b)(iv).
(h) Resale. Each Lender may at any time and from time to time hold,
sell, rediscount or otherwise dispose of any or all Bankers' Acceptances
accepted and purchased by it for its own account. No Person to whom Bankers'
Acceptances are resold pursuant to this Section 2.3(h) shall be entitled to the
benefit of Section 2.22 with respect to such resold Bankers' Acceptances.
(i) BA Equivalent Advances. Notwithstanding the foregoing provisions
of this Section 2.3, a Non-Acceptance Lender shall, in lieu of accepting
Bankers' Acceptances, make a BA Equivalent Advance. The amount of each BA
Equivalent Advance shall be equal to the BA Discount Proceeds which would be
realized from a hypothetical sale of those Bankers' Acceptances which, but for
this Section 2.3(i), such Lender would otherwise be required to accept as part
of such a borrowing, Conversion or Rollover of Bankers' Acceptances. To
determine the amount of such BA Discount Proceeds, the hypothetical sale shall
be deemed to take place at the BA Discount Rate for such Loan. Any BA Equivalent
Advance shall be made on the relevant Funding Date, or Rollover or Conversion
date, as the case may be, and shall remain outstanding for the term of the
relevant Bankers' Acceptances. Concurrent with the making of a BA Equivalent
Advance, a Non-Acceptance Lender shall be entitled to deduct therefrom an amount
equal to the stamping fee which, but for this Section 2.3(i), such Lender would
otherwise be entitled to receive as part of such Loan. Upon the maturity date
for such Bankers' Acceptances, Company shall pay to each Non-Acceptance Lender
an amount equal to the face amount of the Bankers' Acceptances which such Lender
would have accepted as part of such Loan if it were not a Non-Acceptance Lender.
All references herein to "Bankers' Acceptances" shall, unless otherwise
expressly provided herein or unless the context otherwise requires, be deemed to
include BA Equivalent Advances made by a Non-Acceptance Lender as part of a
borrowing, Conversion or Rollover of Bankers' Acceptances.
(j) Termination of Bankers' Acceptances. If at any time a Lender
ceases to accept Bankers' Acceptances in the ordinary course of its business,
such Lender shall be deemed to be a Non-Acceptance Lender and shall make BA
Equivalent Advances in lieu of accepting Bankers' Acceptances under this
Agreement.
(k) Stamping Fees. Upon the acceptance by a Lender of a Bankers'
Acceptance, Company shall pay to Administrative Agent for the account of such
Lender a stamping fee in Canadian Dollars equal to the Applicable Margin
calculated on the principal amount at maturity of such Bankers' Acceptance and
BA Equivalent Advances and for the
53
period of time from and including the date of acceptance or advance to but
excluding the maturity date of such Bankers' Acceptance or BA Equivalent Advance
and calculated on the basis of the number of days elapsed in a year of 365 or
366 days, as the case may be.
(l) Collateralization of Bankers' Acceptances. With respect to the
prepayment or cash collateralization of unmatured Bankers' Acceptances to the
extent required hereunder (it being acknowledged that any requirement to pay or
prepay Bankers' Acceptances prior to their maturity shall be construed as a
requirement to provide cash collateral under this provision), Company shall
provide for the funding of such unmatured Bankers' Acceptances by paying to and
depositing with Administrative Agent cash collateral for each such unmatured
Bankers' Acceptances in an amount equal to the principal amount at maturity of
such Bankers' Acceptances; such cash collateral deposited by Company shall be
held by Administrative Agent in the Collateral Account with interest to be
credited to Company at rates prevailing at the time of deposit for similar
accounts with Administrative Agent. Such Collateral Account shall be held by
Administrative Agent as security for the obligations of Company in relation to
such Bankers' Acceptances and the security of Administrative Agent thereby
created shall rank in priority to all other Liens and adverse claims against
such cash collateral. Such cash collateral shall be applied to satisfy pro tanto
the obligations of Company for such Bankers' Acceptances as they mature and
Administrative Agent is hereby irrevocably directed by Company to apply any such
cash collateral to such maturing Bankers' Acceptances. Amounts held in such
Collateral Account may not be withdrawn by Company; however, interest on such
deposited amounts shall be for the account of Company and may be withdrawn by
Company so long as no Default or Event of Default is then continuing. If after
maturity of the Bankers' Acceptances for which such funds are held and
application by Administrative Agent of the amounts in such Collateral Accounts
to satisfy the obligations of Company hereunder with respect to the Bankers'
Acceptances being repaid, any excess remains, such excess shall be promptly paid
by Administrative Agent to Company so long as no Default or Event of Default is
then continuing.
(m) Market for Bankers' Acceptances. In the event that at any time
subsequent to the giving of a Funding Notice or Conversion/Continuation Notice
to Administrative Agent by Company with regard to any requested Bankers'
Acceptances, but before the date of the borrowing, Rollover or Conversion, as
the case may be, Administrative Agent makes a determination, which shall be
conclusive and binding upon Company, absent manifest error, that there no longer
exists an active market for Bankers' Acceptances accepted by the Lenders then:
(i) the right of Company to request Bankers' Acceptances or BA
Equivalent Advances from any Lender shall be suspended until
Administrative Agent determines that the circumstances causing such
suspension no longer exist, and so notifies Company;
(ii) any outstanding Funding Notice requesting a Loan by way
of Bankers' Acceptances or BA Equivalent Advances shall be deemed to
be a Funding Notice requesting a Loan by way of Prime Rate Loans in
the amount specified in the original Funding Notice;
54
(iii) any outstanding Conversion/Continuation Notice
requesting a Conversion of a Prime Rate Loan into Bankers'
Acceptances or BA Equivalent Advances shall be deemed to be revoked;
and
(iv) any outstanding Conversion/Continuation Notice requesting
a Rollover of Bankers' Acceptances or BA Equivalent Advances shall
(unless revoked by Company before the Funding Date) be deemed to be
a Conversion/Continuation Notice requesting a Conversion of such
Loans into Prime Rate Loans.
Administrative Agent shall promptly notify Company and the Lenders of any
suspension of Company's right to request Bankers' Acceptances or BA Equivalent
Advances and of any termination of any such suspension.
(n) Compensation for Non-Commencement of BA Interest Periods.
Company shall compensate each Lender, upon written request by such Lender (which
request shall set forth the basis for requesting such amounts), for all
reasonable losses, expenses and liabilities (including any interest paid by such
Lender to Lenders of funds borrowed by it to make or carry its BA Discount Rate
Loans and any loss, expense or liability sustained by such Lender in connection
with the liquidation or re-employment of such funds but excluding loss of
anticipated profits) which such Lender may sustain if for any reason (other than
a default by such Lender) a borrowing of any BA Discount Rate Loan does not
occur on a date specified therefore in a Funding Notice or a telephonic request
for borrowing, or a Conversion to or Rollover of any BA Discount Rate Loan does
not occur on a date specified therefor in a Conversion/Continuation Notice or a
telephonic request for Conversion or Rollover.
2.4. SWING LINE LOANS.
(a) General Provisions. Swing Line Lender hereby agrees, subject to
the limitations set forth below with respect to the maximum amount of Swing Line
Loans permitted to be outstanding from time to time, to make a portion of the
Revolving Commitments available to Company from time to time during the period
from and including the Closing Date to but excluding the Revolving Commitment
Termination Date by making Canadian Swing Line Loans and U.S. Swing Line Loans
to Company in an aggregate amount not exceeding the amount of the Swing Line
Loan Subcommitment to be used for the purposes identified in Section 2.7,
notwithstanding the fact that such Swing Line Loans, when aggregated with Swing
Line Lender's outstanding Revolving Loans and Swing Line Lender's Pro Rata Share
of the Letter of Credit Usage then in effect, may exceed Swing Line Lender's
Revolving Commitment. At the Closing Date, the Swing Line Loan Subcommitment is
Can$7.5 million; provided that any reduction of the Revolving Commitments made
pursuant to Section 2.17(b) that reduces the aggregate Revolving Commitments to
an amount less than the then current amount of the Swing Line Loan Subcommitment
shall result in an automatic corresponding reduction of the Swing Line Loan
Subcommitment to the amount of the aggregate Revolving Commitments, as so
reduced, without any further action on the part of Company, Administrative Agent
or Swing Line Lender. The Swing Line Loan Subcommitment shall expire on the
Revolving Commitment Termination Date and all Swing Line Loans and all other
amounts owed hereunder with respect to the Swing Line Loans shall be paid in
full no later than that date. Amounts borrowed under
55
this Section 2.4(a) may be repaid and reborrowed to but excluding the Revolving
Commitment Termination Date. Swing Line Lender shall not make any Swing Line
Loans (A) after the occurrence and during the continuation of a Default or Event
of Default or (B) at its election, at a time when a Funding Default exists
unless Swing Line Lender has entered into arrangements satisfactory to it and
Company to eliminate Swing Line Lender's risk with respect to the Defaulting
Lender's participation in such Swing Ling Loan, including by cash
collateralizing such Defaulting Lender's Pro Rata Share of the outstanding Swing
Line Loans.
Anything contained in this Agreement to the contrary notwithstanding, the
Swing Line Loans and the Swing Line Loan Subcommitment shall be subject to the
limitation that in no event shall the Total Utilization of Revolving Commitments
at any time exceed the aggregate Revolving Commitments then in effect.
(b) Swing Line Accounts. Swing Line Lender will establish (i) at one
of its branches in Canada a Canadian Dollar account of Company (the "CANADIAN
SWING LINE ACCOUNT"), (ii) at its Principal Office a U.S. Dollar account of
Company (the "U.S. SWING LINE ACCOUNT") and (iii) at one of its branches in
Canada, a U.S. Dollar account of Company (the "CANADIAN BASED U.S. SWING LINE
ACCOUNT" and, together with the Canadian Swing Line Account and the U.S. Swing
Line Account, the "SWING LINE ACCOUNTS"). The Swing Line Accounts shall record
the day-to-day banking business of Company conducted through Swing Line Lender.
If, at the end of any Business Day,
(i) the balance in the Canadian Swing Line Account:
(1) is a credit in excess of Can$100,000, Swing
Line Lender may apply the amount of the credit or any
part thereof rounded down to the nearest Can$50,000, as
applicable, as a repayment of any Prime Rate Loans owing
to Swing Line Lender under the Swing Line Subcommitment;
or
(2) is a debit, Swing Line Lender shall make
available a Canadian Swing Line Loan (to the extent that
such advance would not, when added to the outstanding
Swing Line Loans, exceed the Swing Line Loan
Subcommitment), in an amount rounded up to the nearest
Can$50,000, as the case maybe, to place Company in a net
credit position of zero (or such other amount arrived at
from such rounding).
(ii) the balance in the U.S. Swing Line Account:
(1) is a credit in excess of U.S.$100,000, Swing
Line Lender may apply the amount of the credit or any
part thereof rounded down to the nearest U.S.$50,000, as
applicable, as a repayment of any Base Rate Loans owing
to Swing Line Lender under the Swing Line Subcommitment;
or
(2) is a debit, Swing Line Lender shall make
available a U.S. Swing Line Loan (to the extent that
such advance would not,
56
when added to the outstanding Swing Line Loans, exceed
the Swing Line Loan Subcommitment), in an amount rounded
up to the nearest U.S.$50,000, as the case maybe, to
place Company in a net credit position of zero (or such
other amount arrived at from such rounding).
(iii) the balance in the Canadian Based U.S. Swing Line
Account:
(1) is a credit in excess of U.S.$100,000, Swing
Line Lender may apply the amount of the credit or any
part thereof rounded down to the nearest U.S.$50,000, as
applicable, as a repayment of any Base Rate Loans owing
to Swing Line Lender under the Swing Line Subcommitment;
or
(2) is a debit, Swing Line Lender shall make
available a U.S. Swing Line Loan (to the extent that
such advance would not, when added to the outstanding
Swing Line Loans, exceed the Swing Line Loan
Subcommitment), in an amount rounded up to the nearest
U.S.$50,000, as the case maybe, to place Company in a
net credit position of zero (or such other amount
arrived at from such rounding).
(c) Swing Line Loans by Request. In addition to the automatic
advance of Swing Line Loans pursuant to Section 2.4(b) above, Swing Line Lender
also agrees to make Swing Line Loans available pursuant to a Funding Notice
delivered as provided herein.
(i) Canadian Swing Line Loans made pursuant to this Section
2.4(c) shall be made in an aggregate minimum amount of Can$100,000
and integral multiples of Can$50,000 in excess of that amount and
U.S. Swing Line Loans made pursuant to this Section 2.4(c) shall be
made in an aggregate minimum amount of U.S.$100,000 and integral
multiples of U.S.$50,000 in excess of that amount.
(ii) Whenever Company desires that Swing Line Lender make a
Swing Line Loan, Company shall deliver to Swing Line Lender a
Funding Notice no later than 12:00 noon (Toronto time) (or provide
the information required by such Funding Notice by telephone by such
time, promptly followed by delivery in writing of such Funding
Notice) on the proposed Credit Date.
(iii) Swing Line Lender shall make the amount of its Swing
Line Loan available to Company not later than 2:00 p.m. (Toronto
time) on the applicable Credit Date by wire transfer of same day
funds in Canadian Dollars to the Canadian Swing Line Account, with
respect to Canadian Swing Line Loans and in U.S. Dollars to the U.S.
Swing Line Account, with respect to U.S. Swing Line Loans.
(d) Swing Line Loan Prepayment with Proceeds of Other Revolving
Loans. With respect to any Swing Line Loans that have not been voluntarily
prepaid by Company
57
pursuant to Section 2.15(a), Swing Line Lender may at any time in its sole and
absolute discretion, deliver to Administrative Agent (with a copy to Company),
no later than 11:00 a.m. (Toronto time) at least one Business Day in advance of
the proposed Credit Date, a notice (which shall be deemed to be a Funding Notice
given by Company) requesting that each Lender holding a Revolving Commitment
make Revolving Loans that are Prime Rate Loans, if such Swing Line Loans are
Canadian Swing Line Loans, or Base Rate Loans, if such Swing Line Loans are U.S.
Swing Line Loans, to Company on such Credit Date in an aggregate amount equal to
the amount of such Swing Line Loans outstanding on the date such notice is given
which Swing Line Lender requests Lenders to prepay (the "REFUNDED SWING LINE
LOANS"). Company hereby authorizes the giving of any such notice and the making
of any such Revolving Loans. Anything contained in this Agreement to the
contrary notwithstanding, (1) the proceeds of such Revolving Loans made by
Revolving Lenders other than Swing Line Lender shall be immediately delivered by
Administrative Agent to Swing Line Lender (and not to Company) and applied to
repay a corresponding portion of the Refunded Swing Line Loans by depositing
such proceeds in the Canadian Swing Line Account, in the case of Refunded
Canadian Swing Line Loans, and the U.S. Swing Line Account, in the case of
Refunded U.S. Swing Line Loans and (2) on the day such Revolving Loans are made,
Swing Line Lender's Pro Rata Share of the Refunded Swing Line Loans shall be
deemed to be paid with the proceeds of a Revolving Loan made by Swing Line
Lender, and such portion of the Swing Line Loans deemed to be so paid shall no
longer be outstanding as Swing Line Loans and shall no longer be due under the
Swing Line Note of Swing Line Lender but shall instead constitute part of Swing
Line Lender's outstanding Revolving Loans to Company and shall be due under the
Revolving Loan Note issued by Company to Swing Line Lender. Company hereby
authorizes Administrative Agent and Swing Line Lender to charge Company's
accounts with Administrative Agent and Swing Line Lender (up to the amount
available in each such account) in order to immediately pay Swing Line Lender
the amount of the Refunded Swing Line Loans to the extent of the proceeds of
such Revolving Loans made by Lenders, including the Revolving Loans deemed to be
made by Swing Line Lender, are not sufficient to repay in full the Refunded
Swing Line Loans. If any portion of any such amount paid (or deemed to be paid)
to Swing Line Lender should be recovered by or on behalf of Company from Swing
Line Lender in any bankruptcy proceeding, in any assignment for the benefit of
creditors or otherwise, the loss of the amount so recovered shall be apportioned
among all Revolving Lenders in accordance with their Pro Rata Shares.
(e) Swing Line Loan Assignments. If for any reason (1) Revolving
Loans are not made upon the request of Administrative Agent as provided in
Section 2.4(d) in an amount sufficient to repay any amounts owed to Swing Line
Lender in respect of any outstanding Swing Line Loans on or before the third
Business Day after demand for payment thereof by Swing Line Lender or (2) the
Revolving Commitments are terminated at a time when any Swing Line Loans are
outstanding, each Revolving Lender shall be deemed to, and hereby agrees to,
have purchased an assignment of such outstanding Swing Line Loans in an amount
equal to its Pro Rata Share (calculated, in the case of the foregoing clause
(2), immediately prior to such termination of the Revolving Commitments) of the
unpaid amount of such Swing Line Loans together with accrued interest thereon.
Upon one Business Day's notice from Administrative Agent, each Revolving Lender
shall deliver to Administrative Agent for payment to Swing Line Lender an amount
equal to its respective assignment in same day funds at its Principal Office. In
order to further evidence such assignment (and without prejudice to the
effectiveness of the assignment provisions set forth above), each Revolving
Lender agrees to enter into an
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Assignment Agreement at the request of Swing Line Lender and Administrative
Agent in form and substance reasonably satisfactory to Swing Line Lender and
Administrative Agent. In the event any Revolving Lender fails to make available
to Administrative Agent for payment to Swing Line Lender the amount of such
Revolving Lender's assignment as provided in this paragraph, Swing Line Lender
shall be entitled to recover such amount on demand from such Revolving Lender
together with interest thereon at the rate customarily used by Swing Line Lender
for the correction of errors among banks for three Business Days and thereafter
at the Canadian Prime Rate or Base Rate, as applicable. In the event Swing Line
Lender receives a payment of any amount in which other Revolving Lenders have
purchased assignments as provided in this Section 2.4(e), Swing Line Lender
shall promptly pay to Administrative Agent for distribution to each such other
Revolving Lender its Pro Rata Share of such payment.
(f) Revolving Lenders' Obligations. Anything contained herein to the
contrary notwithstanding, each Revolving Lender's obligation to make Revolving
Loans for the purpose of repaying any Refunded Swing Line Loans pursuant to
Section 2.4(d) and each Revolving Lender's obligation to purchase an assignment
of any unpaid Swing Line Loans pursuant to Section 2.4(e) shall be absolute and
unconditional and shall not be affected by any circumstance, including (1) any
set-off, counterclaim, recoupment, defense or other right which such Revolving
Lender may have against Swing Line Lender, Company or any other Person for any
reason whatsoever; (2) the occurrence or continuance of a Default or Event of
Default; (3) any Material Adverse Effect; (4) any breach of this Agreement or
any other Credit Document by any party thereto; or (5) any other circumstance,
happening or event whatsoever, whether or not similar to any of the foregoing;
provided that such obligations of each Revolving Lender are subject to the
condition that Swing Line Lender believed in good faith that all conditions
under Section 3.2 to the making of the applicable Refunded Swing Line Loans or
other unpaid Swing Line Loans, were satisfied at the time such Refunded Swing
Line Loans or unpaid Swing Line Loans were made, or the satisfaction of any such
condition not satisfied had been waived by the Requisite Lenders prior to or at
the time such Refunded Swing Line Loans or other unpaid Swing Line Loans were
made; provided further that the Swing Line Lender shall irrevocably be deemed to
have believed in good faith that all conditions under Section 3.2 to the making
of the applicable Refunded Swing Line Loans or other unpaid Swing Line Loans
were satisfied at the time such Refunded Swing Line Loans or unpaid Swing Line
Loans were made unless, prior to the making of the applicable Refunded Swing
Line Loans or other unpaid Swing Line loans, the Swing Line Lender was notified
in writing by Administrative Agent that the conditions under Section 3.2 were
not or could not be met and accordingly that no further Swing Line Loans should
be made until notified to the contrary.
(g) Indemnification. Each Revolving Lender agrees to indemnify Swing
Line Lender (to the extent not reimbursed by Company) ratably according to its
Pro Rata Share from and against any and all losses and claims of any kind or
nature whatsoever which may be imposed on, incurred by or asserted against Swing
Line Lender in any way relating to or arising out of any Swing Line Loans;
provided that no Lender shall be liable for any portion of such losses or claims
resulting from Swing Line Lender's gross negligence or willful misconduct.
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2.5. ISSUANCE OF LETTERS OF CREDIT AND PURCHASE OF PARTICIPATIONS THEREIN.
(a) Letters of Credit. Company may request, in accordance with the
provisions of this Section 2.5(a), from time to time on or prior to the 10th day
prior to the Revolving Commitment Termination Date, that a Revolving Lender
issue one or more Letters of Credit denominated in either Approved Currency for
the account of Company for the purposes specified in Section 2.7. Subject to the
terms and conditions of this Agreement and in reliance upon the representations
and warranties of Company herein set forth, any Revolving Lender may, but
(except as provided in Section 2.5(c) in respect of Issuing Bank) shall not be
obligated to, issue such Letters of Credit in accordance with the provisions of
this Section 2.5(a); provided that Company shall not request that any Revolving
Lender issue (and no Revolving Lender shall issue):
(i) any Letter of Credit if, after giving effect to such
issuance, the Letter of Credit Usage would exceed the Letter of
Credit Sublimit;
(ii) any Letter of Credit having an expiration date later than
the earlier of (x) 5 days prior to the Revolving Commitment
Termination Date and (y) the date which is one year from the date of
issuance of such Letter of Credit, provided that the immediately
preceding clause (y) shall not prevent any Issuing Lender from
agreeing that a Letter of Credit will automatically be extended for
one or more successive periods not to exceed one year each unless
such Issuing Lender elects not to extend for any such additional
period; provided, further, that such Issuing Lender shall not extend
such Letter of Credit if it has knowledge that an Event of Default
has occurred and is continuing (which has not been waived in
accordance with Section 10.5) at the time such Issuing Lender must
elect whether or not to allow such extension; or
(iii) any Letter of Credit issued for the purpose of
supporting indebtedness for borrowed money.
The Existing Letters of Credit shall be deemed to have been issued
pursuant to the terms of this Section 2.5, shall be participated in by the
Lenders as set forth in Section 2.5(f), and shall be subject to all other terms
of this Agreement applicable to Letters of Credit. This Agreement shall
constitute all of the terms and conditions with respect to the Existing Letters
of Credit and supersedes any and all prior agreements, oral or written (other
than the Existing Letters of Credit themselves and the related applications,
each of which shall remain in full force and effect), between the Issuing Lender
and the Credit Parties with respect to the Existing Letters of Credit.
(b) Issuance Notice. Whenever Company desires the issuance of a
Letter of Credit, it shall deliver to Administrative Agent and Issuing Bank an
Issuance Notice no later than 12:00 noon (Toronto time) at least two Business
Days in advance of the proposed date of issuance. The Issuing Lender, in its
reasonable discretion, may require changes in the text of the proposed Letter of
Credit or any documents described in or attached to the Issuance Notice, and may
require an application and/or indemnity of Company in such Issuing Lender's
customary form. Company may submit Issuance Notices by telefacsimile, and
Administrative Agent and any Issuing Lender may rely and act upon any such
Issuance Notice without receiving an
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original signed copy thereof. Unless the Issuing Lender thereof otherwise
agrees, no Letter of Credit shall require payment against a conforming demand
for payment to be made thereunder within less than two (2) business days (under
the laws of the jurisdiction in which the office of the Issuing Lender to which
such demand for payment is required to be presented is located) from the day
that such demand for payment is presented.
Company shall notify the applicable Issuing Lender (and Administrative
Agent, if Administrative Agent is not such Issuing Lender) prior to the issuance
of any Letter of Credit in the event that any of the matters to which Company is
required to certify in the applicable Issuance Notice is no longer true and
correct as of the proposed date of issuance of such Letter of Credit, and upon
the issuance of any Letter of Credit, Company shall be deemed to have
re-certified, as of the date of such issuance, as to the matters to which
Company is required to certify in the applicable Issuance Notice.
(c) Determination of Issuing Lender. Upon receipt by Administrative
Agent of an Issuance Notice, in the event Issuing Bank elects to issue such
Letter of Credit, Administrative Agent shall promptly so notify Company, and
Issuing Bank shall be the Issuing Lender with respect thereto. In the event that
Issuing Bank, in its sole discretion, elects not to issue such Letter of Credit,
Issuing Bank shall promptly so notify Company and Administrative Agent,
whereupon Company may request any other Revolving Lender to issue such Letter of
Credit by delivering to such Revolving Lender a copy of the applicable Issuance
Notice. Any Revolving Lender so requested to issue such Letter of Credit shall
promptly notify Company, Issuing Bank and Administrative Agent whether or not,
in its sole discretion, it has elected to issue such Letter of Credit, and any
such Revolving Lender that so elects to issue such Letter of Credit shall be the
Issuing Lender with respect thereto; provided that if more than one Revolving
Lender so elects to issue such Letter of Credit, Company shall determine which
Revolving Lender shall be the Issuing Lender.
In the event that all other Revolving Lenders shall have declined to issue
such Letter of Credit, notwithstanding the prior election of Issuing Bank not to
issue such Letter of Credit, Issuing Bank shall be obligated to issue such
Letter of Credit and shall be the Issuing Lender with respect thereto,
notwithstanding the fact that the Letter of Credit Usage with respect to such
Letter of Credit and with respect to all other Letters of Credit issued by
Issuing Bank, when aggregated with Issuing Bank's outstanding Revolving Loans,
may exceed Issuing Bank's Revolving Commitment then in effect. Notwithstanding
the foregoing, under no circumstance shall Issuing Bank be obligated to issue
any Letter of Credit constituting a letter of guaranty if based upon the advice
of its legal counsel Issuing Bank is prohibited from issuing such a Letter of
Credit. In such a circumstance, Issuing Bank may if it so chooses, with the
consent of Company, issue such Letter of Credit out of a branch located in
Canada and, notwithstanding anything to the contrary herein (including Section
2.22 or the definition of Eligible Assignee), such branch's entitlement to
benefits under Section 2.22 shall not be diminished by the fact that the Letter
of Credit was not issued out of the United States and such branch shall be
entitled to the full benefits of Section 2.22. If Issuing Bank has resigned as
provided in Section 9.5(c) and no successor Issuing Bank has been appointed at
the time of an Issuance Notice, then each Revolving Lender shall issue or cause
to be issued a Letter of Credit as to its own Pro Rata Share of each requested
Letter of Credit, all of which taken together would aggregate the amount
requested in the Issuance Notice.
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(d) Issuance of Letter of Credit. Upon satisfaction or waiver (in
accordance with Section 10.5) of the conditions set forth in Section 3.2(a), the
Issuing Lender shall issue the requested Letter of Credit in accordance with the
Issuing Lender's standard operating procedures.
(e) Notification to Revolving Lenders. Upon the issuance or
amendment of any Letter of Credit, the applicable Issuing Lender shall promptly
notify Administrative Agent and Company of such issuance or amendment in writing
and such notice shall be accompanied by a copy of such Letter of Credit or
amendment. Upon receipt of such notice (or, if Administrative Agent is the
Issuing Lender, together with such notice), Administrative Agent shall notify
each Revolving Lender in writing of such issuance or amendment and the amount of
such Revolving Lender's respective participation in such Letter of Credit or
amendment, and, if so requested by a Revolving Lender, Administrative Agent
shall provide such Revolving Lender with a copy of such Letter of Credit or
amendment.
(f) Revolving Lenders' Purchase of Participations in Letters of
Credit. Immediately upon the issuance of each Letter of Credit, each Revolving
Lender shall be deemed to, and hereby agrees to, have irrevocably purchased from
the Issuing Lender a participation in such Letter of Credit and any drawings
honored thereunder in an amount equal to such Revolving Lender's Pro Rata Share
of the maximum amount that is or at any time may become available to be drawn
thereunder.
(g) Responsibility of Issuing Lender with Respect to Drawings. In
determining whether to honor any drawing under any Letter of Credit by the
beneficiary thereof, the Issuing Lender shall be responsible only to examine the
documents delivered under such Letter of Credit with reasonable care so as to
ascertain whether they appear on their face to be in accordance with the terms
and conditions of such Letter of Credit.
(h) Reimbursement by Company of Amounts Paid Under Letters of
Credit. In the event an Issuing Lender has determined to honor a drawing under a
Letter of Credit issued by it, such Issuing Lender shall immediately notify in
writing Company and Administrative Agent, and Company shall reimburse such
Issuing Lender on or before the Business Day immediately following the date on
which such drawing is honored (the "REIMBURSEMENT DATE") in an amount in the
applicable Approved Currency and in same day funds equal to the amount of such
payment; provided that, anything contained in this Agreement to the contrary
notwithstanding, unless Company shall have notified Administrative Agent and
such Issuing Lender prior to 2:00 p.m. (Toronto time) on the date such drawing
is honored that Company intends to reimburse such Issuing Lender for the amount
of such payment with funds other than the proceeds of Revolving Loans:
(1) Company shall be deemed to have given a timely
Funding Notice to Administrative Agent requesting Revolving
Lenders to make Revolving Loans that are Prime Rate Loans, if
such Letter of Credit is denominated in Canadian Dollars, and
Base Rate Loans, if such Letter of Credit is denominated in
U.S. Dollars, on the Reimbursement Date in an amount equal to
the amount of such payment, and
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(2) subject to satisfaction or waiver of the conditions
specified in Section 3.2(a), Revolving Lenders shall, on the
Reimbursement Date, make Revolving Loans that are Prime Rate
Loans, if such Letter of Credit is denominated in Canadian
Dollars, and Base Rate Loans, if such Letter of Credit is
denominated in U.S. Dollars, in the amount of such payment,
the proceeds of which shall be applied directly by
Administrative Agent to reimburse such Issuing Lender for the
amount of such payment;
and provided, further, that if for any reason proceeds of Revolving Loans are
not received by such Issuing Lender on the Reimbursement Date in an amount equal
to the amount of such payment, Company shall reimburse such Issuing Lender, on
demand, in an amount in same day funds equal to the excess of the amount of such
payment by Issuing Lender over the aggregate amount of such Revolving Loans, if
any, which are so received. Nothing in this Section 2.5(h) shall be deemed to
relieve any Revolving Lender from its obligation to make Revolving Loans on the
terms and conditions set forth in this Agreement, and Company shall retain any
and all rights it may have against any Revolving Lender resulting from the
failure of such Revolving Lender to make such Revolving Loans under this Section
2.5(h).
(i) Payment by Revolving Lenders of Unreimbursed Amounts Paid Under
Letters of Credit. In the event that Company shall fail for any reason to
reimburse any Issuing Lender as provided in Section 2.5(h) in an amount equal to
the amount of any payment by such Issuing Lender under a Letter of Credit issued
by it, such Issuing Lender shall promptly notify Administrative Agent, who shall
promptly notify each other Revolving Lender of the unreimbursed amount of such
honored drawing and of such Revolving Lender's respective participation therein
based on such Revolving Lender's Pro Rata Share. Each Revolving Lender (other
than such Issuing Lender) shall make available to Administrative Agent an amount
equal to its respective participation, in the Approved Currency in which the
Letter of Credit giving rise to such payment is denominated, in same day funds,
at Administrative Agent's Principal Office not later than 12:00 noon (Toronto
time) on the first Business Day after the date notified by Administrative Agent,
and Administrative Agent shall make available to such Issuing Lender in such
Approved Currency, in same day funds, at the office of such Issuing Lender on
such Business Day the aggregate amount of the payments so received by
Administrative Agent. In the event that any Revolving Lender fails to make
available to Administrative Agent on such Business Day the amount of such
Revolving Lender's participation in such Letter of Credit as provided in this
Section 2.5(i), such Issuing Lender shall be entitled to recover such amount on
demand from such Revolving Lender together with interest thereon at the rate
customarily used by such Issuing Lender for the correction of errors among banks
for three Business Days and thereafter at the Canadian Prime Rate or Base Rate,
as applicable. Nothing in this Section 2.5(i) shall be deemed to prejudice the
right of Administrative Agent to recover, for the benefit of Revolving Lenders,
from any Issuing Lender any amounts made available to such Issuing Lender
pursuant to this Section 2.5(i) in the event that it is determined by the final
judgment of a court of competent jurisdiction that the payment with respect to a
Letter of Credit by such Issuing Lender in respect of which payments were made
by Revolving Lenders constituted gross negligence or willful misconduct on the
part of such Issuing Lender.
(j) Distribution to Lenders of Reimbursements Received from Company.
In the event any Issuing Lender shall have been reimbursed by other Revolving
Lenders pursuant to
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Section 2.5(i) for all or any portion of any payment by such Issuing Lender
under a Letter of Credit issued by it, and Administrative Agent or such Issuing
Lender thereafter receives any payments from Company in reimbursement of such
payment under the Letter of Credit, to the extent any such payment is received
by such Issuing Lender, it shall distribute such payment to Administrative
Agent, and Administrative Agent shall distribute to each other Revolving Lender
that has paid all amounts payable by it under Section 2.5(i) with respect to
such payment such Revolving Lender's Pro Rata Share of all payments subsequently
received by Administrative Agent or by such Issuing Lender from Company.
(k) Obligations Absolute. The obligation of Company to reimburse
each Issuing Lender for payments under the Letters of Credit issued by it and to
repay any Revolving Loans made by Revolving Lenders pursuant to Section 2.5(h)
and the obligations of Revolving Lenders under Section 2.5(i) shall be
unconditional and irrevocable and shall be paid strictly in accordance with the
terms of this Agreement under all circumstances including any of the following
circumstances:
(i) any lack of validity or enforceability of any Letter of
Credit;
(ii) the existence of any claim, set-off, defense or other
right which Company or any Lender 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 Issuing
Lender or other Revolving Lender or any other Person or, in the case
of a Revolving Lender, against Company, whether in connection with
this Agreement, the transactions contemplated herein or any
unrelated transaction (including any underlying transaction between
Company or one of its Subsidiaries and the beneficiary for which any
Letter of Credit was procured);
(iii) any draft or other document presented under any Letter
of Credit proving to be forged, fraudulent, invalid or insufficient
in any respect or any statement therein being untrue or inaccurate
in any respect;
(iv) payment by the applicable Issuing Lender under any Letter
of Credit against presentation of a draft or other document which
does not strictly comply with the terms of such Letter of Credit;
(v) any Material Adverse Effect;
(vi) any breach of this Agreement or any other Credit Document
by any party thereto;
(vii) any other circumstance or happening whatsoever, whether
or not similar to any of the foregoing;
(viii) the fact that an Event of Default shall have occurred
and be continuing; or
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(ix) the fact that a Letter of Credit may have been issued
even if, at the time of its issuance, the conditions set forth in
Section 3.2(a) may not have been met or waived (in accordance with
Section 10.5);
provided, in each case, that payment by the applicable Issuing Lender under the
applicable Letter of Credit shall not have constituted gross negligence or
willful misconduct of such Issuing Lender under the circumstances in question
(as determined by a final judgment of a court of competent jurisdiction).
(l) Nature of Issuing Lenders' Duties. As between Company and any
Issuing Lender, Company assumes all risks of the acts and omissions of, or
misuse of the Letters of Credit issued by such Issuing Lender by, the respective
beneficiaries of such Letters of Credit. In furtherance and not in limitation of
the foregoing, such Issuing Lender shall not be responsible for: (i) the form,
validity, sufficiency, accuracy, genuineness or legal effect of any document
submitted by any party in connection with the application for and issuance of
any such Letter of Credit, even if it should in fact prove to be in any or all
respects invalid, insufficient, inaccurate, fraudulent or forged; (ii) the
validity or sufficiency of any instrument transferring or assigning or
purporting to transfer or assign any such Letter of Credit or the rights or
benefits thereunder or proceeds thereof, in whole or in part, which may prove to
be invalid or ineffective for any reason; (iii) failure of the beneficiary of
any such Letter of Credit to comply fully with any conditions required in order
to draw upon such Letter of Credit; (iv) errors, omissions, interruptions or
delays in transmission or delivery of any messages, by mail, cable, telegraph,
telex or otherwise, whether or not they be in cipher; (v) errors in
interpretation of technical terms; (vi) 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; (vii) the misapplication by the
beneficiary of any such Letter of Credit of the proceeds of any drawing under
such Letter of Credit; or (viii) any consequences arising from causes beyond the
control of such Issuing Lender, including any act or omission by a Governmental
Authority, and none of the above shall affect or impair, or prevent the vesting
of, any of such Issuing Lender's rights or powers hereunder.
In furtherance and extension and not in limitation of the specific
provisions set forth in the first paragraph of this Section 2.5(l), any action
taken or omitted by any Issuing Lender under or in connection with the Letters
of Credit issued by it or any documents and certificates delivered thereunder,
if taken or omitted in good faith, shall not put such Issuing Lender under any
resulting liability to Company.
Notwithstanding anything to the contrary contained in this Section 2.5(l),
Company shall retain any and all rights it may have against any Issuing Lender
for any liability to the extent arising out of the gross negligence or willful
misconduct of such Issuing Lender, as determined by a final judgment of a court
of competent jurisdiction.
(m) All payments made pursuant to this Section 2.5 shall be in the
Approved Currency in which the Letter of Credit giving rise to such payment is
denominated.
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(n) Collateralization of Letters of Credit.
(i) With respect to funding the cash collateralization of
unexpired Letters of Credit to the extent required hereunder (it
being acknowledged that any requirement to pay or prepay or
collateralize Letters of Credit prior to their expiry date shall be
construed as a requirement to provide cash collateral under this
provision), it is agreed that Company shall provide for the funding
of such unexpired Letters of Credit by paying to and depositing with
Administrative Agent for the benefit of the applicable Issuing
Lender cash collateral for each such unexpired Letter of Credit in
an amount equal to the maximum drawable amount of such Letter of
Credit; such cash collateral deposited by Company shall be held by
Administrative Agent for the benefit of such Issuing Lender in the
Collateral Account with interest to be credited to Company at rates
prevailing at the time of deposit for similar accounts with
Administrative Agent. Such Collateral Account shall be held by
Administrative Agent as security for the obligations of Company in
relation to such Letters of Credit and the security of
Administrative Agent and any Issuing Lender thereby created in such
cash collateral shall rank in priority to all other Liens and
adverse claims against such cash collateral. Such cash collateral
shall be applied to satisfy the obligations of Company for such
Letters of Credit as payments are made thereunder and the Issuing
Lender is hereby irrevocably directed by Company to so apply any
such cash collateral. Amounts held in such Collateral Account may
not be withdrawn by Company; however, interest on such deposited
amounts shall be for the account of Company and may be withdrawn by
Company so long as no Default or Event of Default is then
continuing. If after expiry of the Letters of Credit for which such
funds are held and application by Administrative Agent and any
Issuing Lender of the amounts in such Collateral Account to satisfy
the obligations of Company hereunder with respect to the Letters of
Credit being repaid, any excess remains, such excess shall be
promptly paid by Administrative Agent to Company so long as no
Default or Event of Default is then continuing.
(ii) In lieu of depositing cash in the Collateral Account as
provided in Section 2.5(n)(i), Company may satisfy the cash
collateralization requirement by providing to the applicable Issuing
Lender a letter of credit issued for its benefit by a financial
institution satisfactory to it and Administrative Agent, which
letter of credit is in form and substance satisfactory to the
applicable Issuing Lender and Administrative Agent.
2.6. PRO RATA SHARES; AVAILABILITY OF FUNDS.
(a) Pro Rata Shares. All Loans shall be made, and all participations
purchased, by Lenders simultaneously and proportionately to their respective Pro
Rata Shares, it being understood that no Lender shall be responsible for any
default by any other Lender in such other Lender's obligation to make a Loan
requested hereunder or purchase a participation required hereby nor shall any
Term Loan Commitment or any Revolving Commitment of any Lender be increased or
decreased as a result of a default by any other Lender in such other
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Lender's obligation to make a Loan requested hereunder or purchase a
participation required hereby.
(b) Availability of Funds. Unless Administrative Agent shall have
been notified by any Lender prior to the applicable Credit Date that such Lender
does not intend to make available to Administrative Agent the amount of such
Lender's Loan requested on such Credit Date, Administrative Agent may assume
that such Lender has made such amount available to Administrative Agent on such
Credit Date and Administrative Agent may, in its sole discretion, but shall not
be obligated to, make available to Company a corresponding amount on such Credit
Date. If such corresponding amount is not in fact made available to
Administrative Agent by such Lender, Administrative Agent shall be entitled to
recover such corresponding amount on demand from such Lender together with
interest thereon, for each day from such Credit Date until the date such amount
is paid to Administrative Agent, at the customary rate set by Administrative
Agent for the correction of errors among banks for three Business Days and
thereafter at the Base Rate or Canadian Prime Rate, as applicable. If such
Lender does not pay such corresponding amount forthwith upon Administrative
Agent's demand therefor, Administrative Agent shall promptly notify Company and
Company shall forthwith pay such corresponding amount to Administrative Agent
together with interest thereon, for each day from such Credit Date until the
date such amount is paid to Administrative Agent, at the rate payable hereunder
for Base Rate Loans (for U.S. Borrowings) or Prime Rate Loans (for Canadian
Borrowings) for such Class of Loans. Nothing in this Section 2.6(b) shall be
deemed to relieve any Lender from its obligation to fulfill its obligations with
respect to its Term Loan Commitments and Revolving Commitments hereunder or to
prejudice any rights that Company may have against any Lender as a result of any
default by such Lender hereunder.
2.7. USE OF PROCEEDS. The proceeds of the Term Loans and of up to Can$20.0
million of Revolving Loans and Swing Line Loans borrowed on the Closing Date
shall be applied by Company to fund, in part, the Acquisition (including
refinancing or retiring all existing debt (except as otherwise permitted by this
Agreement) and redeeming any preferred stock of the Acquired Business and its
subsidiaries) and paying fees, commissions and expenses in connection with the
Acquisition. On the Closing Date, the Existing Letters of Credit will be deemed
to have been issued hereunder. The proceeds of the Revolving Loans and Swing
Line Loans shall be applied, and Letters of Credit issued after the Closing Date
shall be used, by Company for working capital and general corporate purposes of
Company, the Guarantor Subsidiaries and their Subsidiaries, including Permitted
Acquisitions and Consolidated Capital Expenditures permitted by Section 6.8(d).
No portion of the proceeds of any Credit Extension shall be used in any manner
that causes such Credit Extension or the application of such proceeds to violate
Regulation T, Regulation U or Regulation X of the Board of Governors of the
Federal Reserve System or any other regulation thereof or to violate the
Exchange Act.
2.8. EVIDENCE OF DEBT; REGISTER; LENDERS' BOOKS AND RECORDS; NOTES.
(a) Lenders' Evidence of Debt. Each Lender shall maintain on its
internal records an account or accounts evidencing the Obligations of Company to
such Lender, including the amounts of the Loans made by it and each repayment
and prepayment in respect thereof. Any such recordation shall be conclusive and
binding on Company, absent manifest error; provided that the failure to make any
such recordation, or any error in such recordation,
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shall not affect any Lender's Revolving Commitments or Company's Obligations in
respect of any applicable Loans; and provided, further, in the event of any
inconsistency between the Register and any Lender's records, the recordations in
the Register shall govern.
(b) Register. Administrative Agent on behalf of Company shall
maintain at its Principal Office a register for the recordation of the names and
addresses of Lenders and the Revolving Commitments and Loans of each Lender from
time to time (the "REGISTER"). The Register shall be available for inspection by
any of the Joint Lead Arrangers or, with respect to information as to itself
only, any Lender at any reasonable time and from time to time upon reasonable
prior notice. Administrative Agent shall record in the Register the Revolving
Commitments and the Loans, and each repayment or prepayment in respect of the
principal amount of and interest on the Loans, and any such recordation shall be
conclusive and binding on Company and each Lender, absent manifest error;
provided failure to make any such recordation, or any error in such recordation,
shall not affect any Lender's Revolving Commitments or Company's Obligations in
respect of any Loan. Any assignment of an interest in a Loan or a Letter of
Credit will be effective only upon appropriate entries being made with respect
thereto in the Register. Company hereby designates Administrative Agent to serve
as Company's agent solely for purposes of maintaining the Register as provided
in this Section 2.8(b), and Company hereby agrees that, to the extent
Administrative Agent serves in such capacity, Administrative Agent and its
officers, directors, employees, agents and Affiliates shall constitute
Indemnitees.
(c) Notes. If so requested by any Lender by written notice to
Company (with a copy to Administrative Agent) at least two Business Days prior
to the Closing Date, or at any time thereafter, Company shall execute and
deliver to such Lender (and/or, if applicable and if so specified in such
notice, to any Person who is an assignee of such Lender pursuant to Section
10.6) on the Closing Date (or, if such notice is delivered after the Closing
Date, promptly after Company's receipt of such notice) a Note or Notes to
evidence such Lender's Tranche A Term Loan, Tranche B Term Loan, New Term Loan,
Revolving Loan or Swing Line Loan, as the case may be.
2.9. INTEREST ON LOANS.
(a) Except as otherwise set forth herein, each Class of Loan (other
than BA Discount Rate Loans) shall bear interest on the unpaid principal amount
thereof from the date made through repayment (whether by acceleration or
otherwise) thereof as follows:
(i) in the case of Tranche A Term Loans and Canadian Revolving
Loans:
(1) if a Prime Rate Loan, at the Canadian Prime Rate
plus the Applicable Margin; or
(2) if a Canadian Eurodollar Rate Loan, at the Adjusted
Canadian Eurodollar Rate plus the Applicable Margin;
(ii) in the case of U.S. Swing Line Loans, at the Base Rate
plus the Applicable Margin;
68
(iii) in the case of Canadian Swing Line Loans, at the
Canadian Prime Rate plus the Applicable Margin; and
(iv) in the case of Tranche B Term Loans and U.S. Revolving
Loans:
(1) if a Base Rate Loan, at the Base Rate plus the
Applicable Margin; or
(2) if a Eurodollar Rate Loan, at the Adjusted
Eurodollar Rate plus the Applicable Margin.
Bankers' Acceptances or BA Equivalent Advances shall bear interest by way of
discount of the face amount thereof in accordance with Section 2.3.
(b) The basis for determining the rate of interest with respect to
any Loan (except a Canadian Swing Line Loan or a U.S. Swing Line Loan, which can
be made and maintained only as Prime Rate Loans or Base Rate Loans,
respectively), and the Interest Period or BA Interest Period with respect to any
Eurodollar Rate Loan, Canadian Eurodollar Rate Loan or BA Discount Rate Loan,
shall be selected by Company and notified to Administrative Agent and Lenders
pursuant to the applicable Funding Notice or Conversion/Continuation Notice, as
the case may be; provided until the earlier of 60 days following the Closing
Date and a Successful Syndication, the Term Loans shall be maintained as either
(1) Eurodollar Rate Loans, Canadian Eurodollar Rate Loans and/or BA Discount
Rate Loans having an Interest Period or BA Interest Period, respectively, of no
longer than one month or (2) Base Rate Loans or Prime Rate Loans, as the case
may be. If on any day a Loan is outstanding with respect to which a Funding
Notice or Conversion/Continuation Notice has not been delivered to
Administrative Agent in accordance with the terms hereof specifying the
applicable basis for determining the rate of interest, then for that day such
Loan shall be a Base Rate Loan or Prime Rate Loan, as applicable.
(c) In connection with BA Discount Rate Loans, Canadian Eurodollar
Rate Loans and Eurodollar Rate Loans, there shall be no more than fifteen (15)
BA Interest Periods and Interest Periods in the aggregate outstanding at any
time. In the event Company fails to specify between a Base Rate Loan or a
Eurodollar Rate Loan in the applicable Funding Notice or Conversion/Continuation
Notice for a U.S. Borrowing, such Loan (if outstanding as a Eurodollar Rate
Loan) will be automatically converted into a Base Rate Loan on the last day of
the then-current Interest Period for such Loan (or if outstanding as a Base Rate
Loan will remain as, or (if not then outstanding) will be made as, a Base Rate
Loan). In the event Company fails to specify an Interest Period for any
Eurodollar Rate Loan in the applicable Funding Notice or Conversion/Continuation
Notice, Company shall be deemed to have selected an Interest Period of one
month. In the event Company fails to specify between a Prime Rate Loan or a BA
Discount Rate Loan in the applicable Funding Notice or Conversion/Continuation
Notice for a Canadian Borrowing, such Loan (if outstanding as a BA Discount Rate
Loan or Canadian Eurodollar Rate Loan) will be automatically converted into a
Prime Rate Loan on the last day of the then-current BA Interest Period or
Interest Period, as applicable, for such Loan (or if outstanding as a Prime Rate
Loan will remain as, or (if not then outstanding) will be made as, a Prime Rate
Loan). In the event Company fails to specify a BA Interest Period, for any BA
69
Discount Rate Loan, in the applicable Funding Notice or Conversion/Continuation
Notice, Company shall be deemed to have selected a BA Interest Period of one
month. As soon as practicable after 10:00 a.m. (Toronto time) on each Interest
Rate Determination Date, Administrative Agent shall determine (which
determination shall, absent manifest error, be final, conclusive and binding
upon all parties) the interest rate that shall apply to the Eurodollar Rate
Loans and Canadian Eurodollar Rate Loans for which an interest rate is then
being determined for the applicable Interest Period and shall promptly give
notice thereof (in writing or by telephone confirmed in writing) to Company and
each Lender.
(d) Interest payable pursuant to Section 2.9(a) shall be computed
(i) in the case of Base Rate Loans and Prime Rate Loans, on the basis of a
365-day or 366-day year, as the case may be, (ii) in the case of BA Discount
Rate Loans, on the basis of a 365-day year, and (iii) in the case of Eurodollar
Rate Loans and Canadian Eurodollar Rate Loans, on the basis of a 360-day year,
in each case for the actual number of days elapsed in the period during which it
accrues. In computing interest on any Loan, the date of the making of such Loan
or the first day of an Interest Period applicable to such Loan or, with respect
to a Base Rate Loan being converted from a Eurodollar Rate Loan, the date of
conversion of such Eurodollar Rate Loan to such Base Rate Loan, or, with respect
to a Prime Rate Loan being converted from a BA Discount Rate Loan or a Canadian
Eurodollar Rate Loan, the date of conversion to such Prime Rate Loan, as the
case may be, shall be included, and the date of payment of such Loan or the
expiration date of an Interest Period applicable to such Loan or, with respect
to a Base Rate Loan being converted to a Eurodollar Rate Loan, the date of
conversion of such Base Rate Loan to such Eurodollar Rate Loan, or, with respect
to a Prime Rate Loan being converted to a BA Discount Rate Loan or Canadian
Eurodollar Rate Loan, the date of conversion of such Prime Rate Loan, as the
case may be, shall be excluded; provided, if a Loan is repaid on the same day on
which it is made, one day's interest shall be paid on that Loan.
(e) Except as otherwise set forth herein, interest on each Loan
shall be payable in arrears on and to (i) each Interest Payment Date applicable
to that Loan; (ii) upon any prepayment of that Loan, whether voluntary or
mandatory, to the extent accrued on the amount being prepaid (other than
voluntary prepayments of Swing Line Loans and Revolving Loans); and (iii) at
maturity, including final maturity.
(f) Company agrees to pay to Administrative Agent, with respect to
payments under any Letters of Credit issued by any Issuing Lender, interest on
the amount paid by such Issuing Lender in respect of each such payment from the
date a drawing is honored to but excluding the date such amount is reimbursed by
Company (including any such reimbursement out of the proceeds of Revolving Loans
pursuant to Section 2.5(h)) at a rate equal to (a) for the period from the date
such drawing is honored to but excluding the Reimbursement Date, the rate then
in effect under this Agreement with respect to Revolving Loans that (i) are
Prime Rate Loans, in the case of payments made under a Letter of Credit
denominated in Canadian Dollars, and (ii) are Base Rate Loans, in the case of
payments made under a Letter of Credit denominated in U.S. Dollars, and (b)
thereafter, a rate which is 2% per annum in excess of the rate of interest
otherwise payable under this Agreement with respect to Revolving Loans that are
(i) Prime Rate Loans, in the case of payments made under a Letter of Credit
denominated in Canadian Dollars, and (ii) are Base Rate Loans, in the case of
payments made under a Letter of Credit denominated in U.S. Dollars. Interest
payable pursuant to this Section 2.9(f) shall be computed on the basis of
70
a 365-day, or 366-day, as applicable, year for the actual number of days elapsed
in the period during which it accrues and shall be payable on demand or, if no
demand is made, on the date on which the related drawing under a Letter of
Credit is reimbursed in full.
(g) Promptly upon receipt by Administrative Agent of any payment of
interest pursuant to Section 2.9(f) with respect to a payment under a Letter of
Credit,
(i) Administrative Agent shall distribute to (x) each
Revolving Lender (including any Issuing Lender) out of the interest
received by Administrative Agent in respect of the period from the
date such drawing is honored to but excluding the date on which the
applicable Issuing Lender is reimbursed for the amount of such
payment (including any such reimbursement out of the proceeds of
Revolving Loans pursuant to Section 2.5(h)), the amount that such
Revolving Lender would have been entitled to receive in respect of
the letter of credit fee that would have been payable in respect of
such Letter of Credit for such period pursuant to Section 2.13(b) if
no drawing had been honored under such Letter of Credit, and (y)
such Issuing Lender the amount, if any, remaining after payment of
the amounts applied pursuant to clause (x), and
(ii) in the event such Issuing Lender shall have been
reimbursed by other Revolving Lenders pursuant to Section 2.9(f) for
all or any portion of such payment, Administrative Agent shall
distribute to each Revolving Lender (including such Issuing Lender)
that has paid all amounts payable by it under Section 2.9(f) with
respect to such payment such Revolving Lender's Pro Rata Share of
any interest received by Administrative Agent in respect of that
portion of such payment so made by Revolving Lenders for the period
from the date on which such Issuing Lender was so reimbursed to but
excluding the date on which such portion of such payment is
reimbursed by Company.
Any such distribution shall be made to a Revolving Lender at the account
specified by such Revolving Lender.
(h) All payments pursuant to this Section 2.09 shall be made in the
Approved Currency in which the Loan or Letter of Credit giving rise to such
payment is denominated.
2.10. INTEREST ACT DISCLOSURE. Whenever a rate of interest hereunder is
calculated on the basis of a year (the "DEEMED YEAR") which contains fewer days
than the actual number of days in the calendar year of calculation, such rate of
interest shall be expressed as a yearly rate for purposes of the Interest Act
(Canada) by multiplying such rate of interest by the actual number of days in
the calendar year of calculation and dividing it by the number of days in the
deemed year.
2.11. CONVERSION/CONTINUATION.
(a) Subject to Section 2.20 and so long as no Default or Event of
Default shall have occurred and then be continuing, Company shall have the
option:
71
(i) with respect to Canadian Borrowings, to convert at any
time all or any part of any Term Loan or Revolving Loan equal to
Can$1.0 million and integral multiples of Can$100,000, in excess of
that amount from Prime Rate Loans to an issue of BA Discount Rate
Loans and Canadian Eurodollar Rate Loans, or from BA Discount Rate
Loans and Canadian Eurodollar Rate Loans to Prime Rate Loans;
provided that an issue of BA Discount Rate Loans may only be
converted into a Prime Rate Loan on the expiration date of the BA
Interest Period applicable thereto and an issue of Canadian
Eurodollar Rate Loans may be converted only on the expiration of the
Interest Period applicable to such Canadian Eurodollar Rate Loan
unless Company shall pay all amounts due under Section 2.20 in
connection with any such conversion;
(ii) upon the expiration of a BA Interest Period applicable to
Bankers' Acceptances and Interest Period applicable to Canadian
Eurodollar Rate Loans, to roll over all or any portion of such Loan
equal to Can$1.0 million and integral multiples of Can$100,000 in
excess of that amount as a new issue of Bankers' Acceptances or
Canadian Eurodollar Rate Loans, as applicable;
(iii) with respect to U.S. Borrowings, to convert at any time
all or any part of any Term Loan or Revolving Loan equal to U.S.$1.0
million and integral multiples of U.S.$100,000, in excess of that
amount from Base Rate Loans to Eurodollar Rate Loans, or from
Eurodollar Rate Loans to Base Rate Loans; provided a Eurodollar Rate
Loan may only be converted on the expiration of the Interest Period
applicable to such Eurodollar Rate Loan unless Company shall pay all
amounts due under Section 2.20 in connection with any such
conversion; or
(iv) upon the expiration of any Interest Period applicable to
any Eurodollar Rate Loan, to continue all or any portion of such
Loan equal to U.S.$1.0 million and integral multiples of
U.S.$100,000 in excess of that amount as a Eurodollar Rate Loan.
(b) Company shall deliver a Conversion/Continuation Notice to
Administrative Agent no later than 12:00 noon (Toronto time) at least one
Business Day in advance of the proposed conversion date (or, in the case of a
conversion to, or a continuation of, a Eurodollar Rate Loan or a BA Discount
Rate Loan, at least three Business Days in advance of the proposed
conversion/continuation date). Except as otherwise provided herein, a
Conversion/Continuation Notice for conversion to, or continuation of, any
Eurodollar Rate Loans (or telephonic notice in lieu thereof) shall be
irrevocable on and after the related Interest Rate Determination Date, and
Company shall be bound to effect a conversion or continuation in accordance
therewith. Administrative Agent shall notify each Lender of any Loan subject to
a Notice of Conversion/Continuation. It is understood and agreed that when a
Notice of Conversion/Continuation with respect to Revolving Loans or Tranche A
Term Loans is delivered and a conversion to BA Discount Rate Loans is requested,
with respect to Schedule I Lenders, such request for a conversion to BA Discount
Rate Loans shall be deemed a request for a conversion to Canadian Eurodollar
Rate Loans from such Lenders with an Interest Period equal to the elected BA
Interest Period. It is understood and agreed that when a Notice of
Continuation/Conversion with respect to Revolving Loans or Tranche A Term Loans
is delivered
72
and a conversion from BA Discount Rate Loans is requested, with respect to
Schedule I Lenders, such request shall be deemed to be a request for a
conversion from Canadian Eurodollar Rate Loans made by Schedule I Lenders who
made Canadian Eurodollar Rate Loans in lieu of such BA Discount Rate Loans.
(c) Rollover of Bankers' Acceptances. In order to satisfy the
liability of Company to a Lender for the face amount of maturing Bankers'
Acceptances accepted by such Lender, such Lender shall receive and retain for
its own account the BA Discount Proceeds of new Bankers' Acceptances issued on a
Rollover, and Company shall on the maturity date of the Bankers' Acceptances
being rolled over pay to Administrative Agent for the account of the Lenders an
amount equal to the difference between the face amount of the maturing Bankers'
Acceptances and the BA Discount Proceeds from the new Bankers' Acceptances,
together with the stamping fees to which the Lenders are entitled pursuant to
Section 2.3(k).
(d) Conversion into Bankers' Acceptances. In respect of Conversions
into Bankers' Acceptances, in order to satisfy the liability of Company to the
Lenders for the amount of the converted Loan, each Lender shall receive and
retain for its own account the BA Discount Proceeds of the Bankers' Acceptances
issued upon such Conversion, and Company shall on the date for Conversion pay to
Administrative Agent for the account of the Lenders an amount equal to the
difference between the principal amount of the converted Loan and the aggregate
BA Discount Proceeds from the Bankers' Acceptances issued on such Conversion,
together with the stamping fees to which the Lenders are entitled pursuant to
Section 2.3(k).
(e) Conversion from Bankers' Acceptances. In order to satisfy the
liability of Company to the Lenders for an amount equal to the aggregate face
amount of the maturing Bankers' Acceptances converted to a Prime Rate Loan,
Administrative Agent shall record the obligation of Company to the Lenders as a
Prime Rate Loan.
2.12. DEFAULT INTEREST. If the principal amount of any Loan outstanding or
any interest payment on any Loan or any fees or other amounts owed hereunder is
not paid when due, whether at stated maturity, upon acceleration or otherwise,
such overdue amount shall, to the extent permitted by applicable law, thereafter
bear interest (including post-petition interest in any proceeding under the
Bankruptcy Laws) payable on demand at a rate that is 2% per annum in excess of
the interest rate otherwise payable hereunder with respect to the applicable
Loans (or, in the case of any such fees and other amounts, at a rate which is 2%
per annum in excess of the interest rate otherwise payable hereunder for (i) in
the case of amounts owed in U.S. Dollars, Base Rate Loans and (ii) in the case
of amounts owed in Canadian Dollars, Prime Rate Loans); provided, (x) in the
case of Eurodollar Rate Loans or Canadian Eurodollar Rate Loans, upon the
expiration of the Interest Period in effect at the time any such increase in
interest rate is effective such Eurodollar Rate Loans or Canadian Eurodollar
Rate Loans shall thereupon become Base Rate Loans or Prime Rate Loans, as
applicable, and shall thereafter bear interest payable upon demand at a rate
which is 2% per annum in excess of the interest rate otherwise payable hereunder
for Base Rate Loans or Prime Rate Loans, as applicable, and (y) in the case of
Bankers' Acceptances, upon the expiration of the BA Interest Period in effect at
the time any such increase in interest rate is effective, such Bankers'
Acceptances shall thereupon become Prime Rate Loans and shall thereafter bear
interest payable upon demand at a rate which is 2% per annum in excess of the
interest rate otherwise payable under this Agreement for Prime Rate
73
Loans. Payment or acceptance of the increased rates of interest provided for in
this Section 2.12 is not a permitted alternative to timely payment and shall not
constitute a waiver of any Event of Default or otherwise prejudice or limit any
rights or remedies of Administrative Agent or any Lender.
2.13. FEES.
(a) Company agrees to pay to Revolving Lenders commitment fees,
payable in Canadian Dollars, equal to (1) the average of the daily difference
between (a) the aggregate Revolving Commitments and (b) the sum of (x) the
aggregate principal amount of outstanding Revolving Loans (but not any
outstanding Swing Line Loans), including the Canadian Dollar Equivalent of any
amount denominated in U.S. Dollars, plus (y) the Letter of Credit Usage, times
(2) the Applicable Revolving Commitment Fee Percentage.
(b) Company agrees to pay the following amounts with respect to
Letters of Credit issued hereunder:
(i) with respect to each Letter of Credit denominated in
Canadian Dollars, (A) a fronting fee, payable in Canadian Dollars,
directly to the applicable Issuing Lender for its own account, equal
to 0.15 % per annum of the daily amount available to be drawn under
such Letter of Credit and (B) a letter of credit fee, payable in
Canadian Dollars to Administrative Agent for the account of
Revolving Lenders, equal to the Applicable Margin then in effect for
Revolving Loans bearing interest at the BA Discount Rate per annum
plus, upon the occurrence and during the continuance of an Event of
Default, 2% per annum multiplied by the average daily maximum amount
available to be drawn under such Letter of Credit;
(ii) with respect to each Letter of Credit denominated in U.S.
Dollars, (A) a fronting fee, payable in U.S. Dollars, directly to
the applicable Issuing Lender for its own account, equal to 0.15 %
per annum of the daily amount available to be drawn under such
Letter of Credit and (B) a letter of credit fee, payable in U.S.
Dollars to Administrative Agent for the account of Revolving
Lenders, equal to the Applicable Margin then in effect for Revolving
Loans bearing interest at the Adjusted Eurodollar Rate per annum
plus, upon the occurrence and during the continuance of an Event of
Default, 2% per annum multiplied by the average daily maximum amount
available to be drawn under such Letter of Credit; and
(iii) with respect to the issuance, administration, amendment
or transfer of each Letter of Credit and each payment of a drawing
made thereunder (without duplication of the fees payable under
Section 2.13(b)(i)), documentary and processing charges payable
directly to the applicable Issuing Lender in the Approved Currency
in which such charges were incurred for its own account in
accordance with such Issuing Lender's standard schedule for such
charges in effect at the time.
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For purposes of calculating any fees payable under this Section 2.13(b), the
daily amount available to be drawn under any Letter of Credit shall be
determined as of the close of business on any date of determination.
Notwithstanding the foregoing no fronting fees shall be paid on Existing Letters
of Credit.
(c) All fees referred to in Sections 2.13(a), 2.13(b)(i)(B) and
2.13(b)(ii)(B) shall be paid to Administrative Agent at its Principal Office and
upon receipt, Administrative Agent shall promptly distribute to each Lender its
Pro Rata Share thereof. All fees referred to in Sections 2.13(a) and 2.13(b)
shall be calculated on the basis of a 365-day, or 366-day, as applicable, year
and the actual number of days elapsed and shall be payable in arrears (i) on the
first Business Day following each March 31, June 30, September 30 and December
31 of each year during the Revolving Commitment Period, commencing with the
first such date to occur after the Closing Date and (ii) on the Revolving
Commitment Termination Date.
(d) In addition to any of the foregoing fees, Company agrees to pay
to the Agents such other fees set forth in the senior facilities fee letter
dated March 10, 2004, among Sponsors, GSCP, RBC and Merrill Lynch Capital
Corporation.
2.14. SCHEDULED INSTALLMENTS. The principal amounts of the Term Loans
shall be repaid in consecutive quarterly installments (each, an "INSTALLMENT")
in the aggregate amounts set forth below on the date set forth below or, if such
date is not a Business Day, the next succeeding Business Day (each, an
"INSTALLMENT DATE"):
TRANCHE A TRANCHE B
TERM LOAN TERM LOAN
DATE INSTALLMENTS INSTALLMENTS
---- ------------ ------------
September 30, 2004 -- -- U.S.$0.2875 million
December 31, 2004 Can$1.625 million U.S.$0.2875 million
March 31, 2005 Can$1.625 million U.S.$0.2875 million
June 30, 2005 Can$1.625 million U.S.$0.2875 million
September 30, 2005 Can$1.625 million U.S.$0.2875 million
December 31, 2005 Can$3.25 million U.S.$0.2875 million
March 31, 2006 Can$3.25 million U.S.$0.2875 million
June 30, 2006 Can$3.25 million U.S.$0.2875 million
September 30, 2006 Can$3.25 million U.S.$0.2875 million
December 31, 2006 Can$4.875 million U.S.$0.2875 million
March 31, 2007 Can$4.875 million U.S.$0.2875 million
June 30, 2007 Can$4.875 million U.S.$0.2875 million
September 30, 2007 Can$4.875 million U.S.$0.2875 million
December 31, 2007 Can$6.5 million U.S.$0.2875 million
March 31, 2008 Can$6.5 million U.S.$0.2875 million
June 30, 2008 Can$6.5 million U.S.$0.2875 million
September 30, 2008 Can$6.5 million U.S.$0.2875 million
December 31, 2008 Can$16.25 million U.S.$0.2875 million
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TRANCHE A TRANCHE B
TERM LOAN TERM LOAN
DATE INSTALLMENTS INSTALLMENTS
---- ------------ ------------
March 31, 2009 Can$16.25 million U.S.$0.2875 million
June 30, 2009 Can$16.25 million U.S.$0.2875 million
September 4, 2009 Can$16.25 million -- --
September 30, 2009 -- -- U.S.$0.2875 million
December 31, 2009 -- -- U.S.$0.2875 million
March 31, 2010 -- -- U.S.$0.2875 million
June 30, 2010 -- -- U.S.$0.2875 million
September 30, 2010 -- -- U.S.$27.025 million
December 31, 2010 -- -- U.S.$27.025 million
March 31, 2011 -- -- U.S.$27.025 million
June 4, 2011 -- -- U.S.$27.025 million
; provided, in the event any New Term Loans are made, such New Term Loans shall
be repaid on each Installment Date occurring on or after the applicable
Increased Amount Date in an amount no greater than (i) the aggregate principal
amount of New Term Loans of the applicable Series of New Term Loans, times (ii)
the ratio (expressed as a percentage) of (y) the amount of all other Term Loans
being repaid on such Installment Date and (z) the total aggregate principal
amount of all other Term Loans outstanding on such Increased Amount Date.
Notwithstanding the foregoing, (x) the Installments set forth above shall
be reduced in connection with any voluntary or mandatory prepayments of the
Tranche A Term Loans or the Tranche B Term Loans, as the case may be, in
accordance with Sections 2.15, 2.16 and 2.17, as applicable; and (y) the Tranche
A Term Loans and the Tranche B Term Loans, together with all other amounts owed
hereunder with respect thereto, shall, in any event, be paid in full no later
than the Tranche A Term Loan Maturity Date and the Tranche B Term Loan Maturity
Date, respectively.
2.15. VOLUNTARY PREPAYMENTS/COMMITMENT REDUCTIONS.
(a) Voluntary Prepayments.
(i) Any time and from time to time:
(1) with respect to Prime Rate Loans (other than Swing
Line Loans), Canadian Eurodollar Rate Loans or BA Discount
Rate Loans, Company may prepay any such Loans on any Business
Day, in whole or in part, in an aggregate minimum amount of
Can$500,000 and integral multiples of Can$50,000 in excess of
that amount;
(2) with respect to Base Rate Loans (other than Swing
Line Loans) or Eurodollar Rate Loans, Company may prepay any
such Loans on any Business Day, in whole or in part, in an
aggregate minimum
76
amount of U.S.$500,000 and integral multiples of U.S.$50,000
in excess of that amount; and
(3) with respect to Swing Line Loans, Company may prepay
any such Loans on any Business Day, in whole or in part, in an
aggregate minimum amount of Can$50,000, with respect to
Canadian Swing Line Loans, or U.S.$50,000, with respect to
U.S. Swing Line Loans, and integral multiples of Can$50,000 or
U.S.$50,000, as applicable, in excess of that amount; provided
that any aggregate amount of Swing Line Loans may be repaid if
all outstanding U.S. Swing Line Loans or Canadian Swing Line
Loans are repaid at such time.
(ii) All such prepayments shall be made:
(1) upon not less than one Business Day's prior written
or telephonic notice in the case of Base Rate Loans or Prime
Rate Loans (other than Swing Line Loans);]
(2) upon not less than two Business Days' prior written
or telephonic notice in the case of Eurodollar Rate Loans,
Canadian Eurodollar Rate Loans or BA Discount Rate Loans;
provided that BA Discount Rate Loans may be prepaid only on
the expiration of the BA Interest Period; and
(3) upon written or telephonic notice on the date of
prepayment, in the case of Swing Line Loans;
in each case given to Administrative Agent or Swing Line Lender, as the case may
be, by 2:00 p.m. (Toronto time) on the date required and, if given by telephone,
promptly confirmed in writing to Administrative Agent (and Administrative Agent
will promptly transmit such telephonic or original notice for Term Loans or
Revolving Loans, as the case may be, by telefacsimile or telephone to each
Lender) or Swing Line Lender, as the case may be. Upon the giving of any such
notice, the principal amount of the Loans specified in such notice shall become
due and payable on the prepayment date specified therein. Any such voluntary
prepayment shall be applied as specified in Section 2.17(a).
(b) Voluntary Commitment Reductions.
(i) Company may, upon not less than two Business Days' prior
written or telephonic notice confirmed in writing to Administrative
Agent (which original written or telephonic notice Administrative
Agent will promptly transmit by telefacsimile or telephone to each
applicable Lender), at any time and from time to time terminate in
whole or permanently reduce in part, without premium or penalty, the
Revolving Commitments; provided that (x) the Total Utilization of
Revolving Commitments after giving effect to such proposed
termination or reduction shall not exceed the aggregate Revolving
Commitments after giving effect to any such reduction or
termination; and (y) any partial reduction of the
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Revolving Commitments shall be in an aggregate minimum amount of
Can$1.0 million and integral multiples of Can$100,000 in excess of
that amount.
(ii) Company's notice to Administrative Agent shall designate
the date (which shall be a Business Day) of such termination or
reduction and the amount of any partial reduction, and such
termination or reduction of the Revolving Commitments shall be
effective on the date specified in Company's notice and shall reduce
the Revolving Commitment of each Lender proportionately to its Pro
Rata Share thereof.
2.16. OFFERS TO PREPAY AND MANDATORY PREPAYMENTS/COMMITMENT REDUCTIONS.
(a) Asset Sales. No later than three Business Days following the
date of receipt by Holdings or any of its Subsidiaries of any Net Asset Sale
Proceeds other than pursuant to an Asset Sale permitted by Sections 6.9(a), (b),
(c), (d), (e), (j), (k), (l), (m) or (o), Company shall make an Offer to Prepay
the Loans and/or otherwise apply such Net Asset Sale Proceeds as set forth in
Section 2.17(b) in an aggregate amount equal to such Net Asset Sale Proceeds;
provided, so long as no Default or Event of Default shall have occurred and be
continuing, with respect to aggregate Net Asset Sale Proceeds of up to U.S.$25.0
million per Fiscal Year, Company shall have the option, directly or through one
or more of its Subsidiaries, to invest Net Asset Sale Proceeds within one year
of receipt thereof in productive assets of the general type used or useful in
the business of Company and its Subsidiaries (or to acquire at least a majority
of the Capital Stock of a Person that is engaged in a business in which Company
and its Subsidiaries are permitted under Section 6.11).
(b) Insurance/Condemnation Proceeds. No later than three Business
Days following the date of receipt by Holdings or any of its Subsidiaries, or
Administrative Agent as loss payee, of any Net Insurance/Condemnation Proceeds,
Company shall make an Offer to Prepay the Loans and/or otherwise apply such Net
Insurance/Condemnation Proceeds as set forth in Section 2.17(b) in an aggregate
amount equal to such Net Insurance/Condemnation Proceeds; provided, so long as
no Default or Event of Default shall have occurred and be continuing, Company
shall have the option, directly or through one or more of its Subsidiaries to
invest such Net Insurance/Condemnation Proceeds within one year of receipt
thereof in productive assets of the general type used or useful in the business
of Company and its Subsidiaries, which investment may include the repair,
restoration or replacement of the applicable assets thereof (or to acquire at
least a majority of the Capital Stock of a Person that is engaged in a business
in which Company and its Subsidiaries are permitted under Section 6.11).
(c) Issuance of Equity Securities. On the date of receipt by any
Parent Company of any Cash proceeds from a capital contribution to, or the
issuance of any Capital Stock of, any Parent Company (other than (i) pursuant to
any employee stock or stock option compensation plan and (ii) issuances to or
capital contributions from the Permitted Holders or management of any Parent
Company, Holdings or its Subsidiaries), Company shall prepay the Loans and/or
otherwise apply such Cash proceeds as set forth in Section 2.17(b) in an
aggregate amount equal to 50% of such proceeds, net of underwriting discounts
and commissions and other reasonable costs and expenses associated therewith,
including reasonable legal, investment banking and accountants' fees and
expenses.
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(d) Issuance of Debt. On the date of receipt by Holdings or any of
its Subsidiaries of any Cash proceeds from the incurrence of any Indebtedness of
Holdings or any of its Subsidiaries (other than with respect to any Indebtedness
permitted to be incurred pursuant to Section 6.1 or incurred pursuant to the
Intercompany Debt Documents), Company shall make an Offer to Prepay the Loans
and/or otherwise apply such Cash proceeds as set forth in Section 2.17(b) in an
aggregate amount equal to 100% of such proceeds, net of underwriting discounts
and commissions and other reasonable costs and expenses associated therewith,
including reasonable legal, investment banking and accountants' fees and
expenses.
(e) Consolidated Excess Cash Flow. In the event that there shall be
Consolidated Excess Cash Flow for any Fiscal Year (commencing with the Fiscal
Year ending February 28, 2005), Company shall, no later than 90 days after the
end of such Fiscal Year, prepay the Loans and/or otherwise apply such Cash
proceeds as set forth in Section 2.17(b) in an aggregate amount equal to the
excess of (x) the Applicable ECF Percentage of such Consolidated Excess Cash
Flow less (y) any voluntary prepayments of Consolidated Total Debt during such
Fiscal Year, excluding (A) any repayments of Revolving Loans or Swing Line Loans
to the extent there is not an equivalent permanent reduction in the Revolving
Commitments in connection with such repayments and (B) any repayment of
Indebtedness to the extent made with the proceeds of capital contributions,
issuances of Capital Stock, incurrences of Indebtedness or Asset Sales.
"APPLICABLE ECF PERCENTAGE" means, with respect to any Fiscal Year, (i) 50% if
the Leverage Ratio as of the end of such Fiscal Year as set forth in the
Compliance Certificate delivered pursuant to Section 5.1(d) for such Fiscal year
is equal to or less than 4.5x but not less than 3.0x, (ii) 0% if the Leverage
Ratio as of the end of such Fiscal Year as set forth in the Compliance
Certificate delivered pursuant to Section 5.1(d) for such Fiscal year is less
than 3.0x and (iii) 75% if neither clause (i) or (ii) applies.
(f) Revolving Loans, Swing Loans and Letters of Credit. In the event
that the Total Utilization of Revolving Commitments exceeds the Revolving
Commitment by 3.0% or more due solely to fluctuations in currency exchange rates
or by any amount, if not due solely to fluctuations in currency exchange rates
(in either case, including on any date on which the Canadian Dollar Equivalent
of any amount denominated in U.S. Dollars is determined pursuant to Section
10.7), Company shall, within five Business Days of either an Authorized Officer
of Company learning thereof or the request of Administrative Agent, from time to
time first, prepay the Swing Line Loans, second, prepay the Revolving Loans, and
third, replace outstanding Letters of Credit or cash collateralize outstanding
Letters of Credit in accordance with the procedures set forth in Section 2.5(n),
in an aggregate amount sufficient to eliminate such excess.
In the event that the Letter of Credit Usage exceeds the Letter of Credit
Sublimit then in effect (including on any date on which the Canadian Dollar
Equivalent of any amount denominated in U.S. Dollars is determined pursuant to
Section 10.7), Company shall, without notice or demand, immediately replace
outstanding Letters of Credit or cash collateralize outstanding Letters of
Credit in accordance with the procedures set forth in Section 2.5(n), in an
aggregate amount sufficient to eliminate such excess.
In the event that the outstanding principal amount of Swing Line Loans
exceeds the Swing Line Loan Subcommitment then in effect (including on any date
on which the Canadian Dollar Equivalent of any amount denominated in U.S.
Dollars is determined pursuant to
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Section 10.7), Swing Line Lender is authorized by Company, without notice or
demand to Company, to deliver a notice pursuant to Section 2.4(d) to have Swing
Line Loans repaid with the proceeds of Revolving Loans in accordance with
Section 2.4(d) in an aggregate amount sufficient to eliminate such excess.
(g) Prepayment Certificate. Concurrently with any Offer to Prepay or
prepayment of the Loans and/or reduction of the Revolving Commitments pursuant
to Sections 2.16(a) through 2.16(e), Company shall deliver to Administrative
Agent a certificate of an Authorized Officer demonstrating the calculation of
the amount of the applicable net proceeds or Consolidated Excess Cash Flow, as
the case may be. In the event that Company shall subsequently determine that the
actual amount received exceeded the amount set forth in such certificate,
Company shall promptly make an additional prepayment of the Loans and/or the
Revolving Commitments shall be permanently reduced in an amount equal to such
excess, and Company shall concurrently therewith deliver to Administrative Agent
a certificate of an Authorized Officer demonstrating the derivation of such
excess.
(h) Limitation on Mandatory Prepayments. Notwithstanding Sections
2.14, 2.16(c) and 2.16(e), the aggregate amount of all prepayments and
repayments by Company with respect to the Tranche B Term Loans pursuant to
Sections 2.14, 2.16(c) and 2.16(e) from the Closing Date to the fifth
anniversary thereof shall not exceed 25% of the initial aggregate principal
amount of the Tranche B Term Loans, except for payments required as a result of
an acceleration of the Obligations pursuant to Section 8. On the Business Day
following the fifth anniversary of the Closing Date, Company shall repay the
Tranche B Term Loans in an aggregate principal amount equal to (i) the amount of
repayments that would have been required to be made (but were not so made) in
respect thereof under Sections 2.14, 2.16(c) and 2.16(e) but for the limitation
expressed in the preceding sentence less (ii) all voluntary prepayments of
Tranche B Term Loans, and such payments shall be applied in the manner specified
in Section 2.17. For greater certainty and notwithstanding any other provision
of this Agreement, the failure of Company to make any prepayment or repayment
required by Sections 2.14, 2.16(c) or 2.16(e) solely as a consequence of the
first sentence of this paragraph shall not constitute a Default.
(i) Mandatory Offers to Prepay. When required by Section 2.16(a),
(b) or (d), Company shall make an offer to prepay Borrowings made by Company in
accordance with the terms of Section 2.16(g), which offer may be accepted or
declined by the Lenders in accordance with Section 10.5(e) (an "OFFER TO
PREPAY"). If any Offer to Prepay is accepted, all prepayments shall be made in
accordance with Section 2.17. The parties hereto acknowledge that failure to
make an Offer to Prepay as and when required hereunder, shall constitute an
"event of default" within the meaning of Section 212(1)(b)(vii) of the Income
Tax Act (Canada).
2.17. APPLICATION OF PREPAYMENTS/REDUCTIONS.
(a) Application of Voluntary Prepayments by Type of Loans. Any
prepayment of any Loan pursuant to Section 2.15(a) shall be applied as specified
by Company in the applicable notice of prepayment; provided that such
prepayments of a Term Loan shall be applied first, to the next scheduled
Installment of such Term Loan and then, to the then remaining Installments of
such Term Loan on a pro rata basis. In the event Company fails to
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specify the Loans to which any such prepayment shall be applied, such prepayment
shall be applied as follows:
first, to repay outstanding Swing Line Loans to the full extent
thereof, without reduction of Commitments;
second, to repay outstanding Revolving Loans to the full extent
thereof, without reduction of Commitments;
third, to prepay the Tranche A Term Loans and the Tranche B Term
Loans on a pro rata basis (in accordance with the respective outstanding
principal amounts thereof) to the full extent thereof in accordance with
the proviso set forth in the preceding sentence; and
fourth, to replace outstanding Letters of Credit or cash
collateralize outstanding Letters of Credit in accordance with the
procedures set forth in Section 2.5(n).
(b) Application of Offers to Prepay/Mandatory Prepayments by Type of
Loans. Any amount required to be paid pursuant to Sections 2.16(c) or 2.16(e)
and any amount paid pursuant to an Offer to Prepay under Section 2.16(a), (b) or
(d) shall be applied as follows:
first, to prepay Term Loans on a pro rata basis (in accordance with
the respective outstanding principal amounts thereof) and shall be further
applied on a pro rata basis to the remaining scheduled Installments of
principal of the Tranche A Term Loans and Tranche B Term Loans to the full
extent thereof;
second, to prepay the Swing Line Loans to the full extent thereof
and to permanently reduce the Revolving Commitments by the amount of such
prepayment;
third, to prepay the Revolving Loans to the full extent thereof and
to further permanently reduce the Revolving Commitments by the amount of
such prepayment;
fourth, to pay the then outstanding reimbursement obligations with
respect to Letters of Credit and to further permanently reduce the
Revolving Commitments by the amount of such prepayment; and
fifth, to cash collateralize Letters of Credit pursuant to Section
2.5(n) and to further permanently reduce the Revolving Commitments by the
amount of such cash collateralization.
(c) Waiver of Offer to Prepay. Anything contained herein to the
contrary notwithstanding, so long as any Tranche A Term Loans are outstanding,
in the event Company is required to make an Offer to Prepay pursuant to Section
2.16(a), 2.16(b) or 2.16(d) the Tranche B Term Loans, not less than three
Business Days prior to the date (the "OFFER TO PREPAY DATE") on which Company is
required to make such Offer to Prepay, Company shall notify Administrative Agent
of the amount subject to such Offer to Prepay (the "OFFER TO PREPAY AMOUNT"),
and Administrative Agent will promptly thereafter notify each Lender holding an
outstanding Tranche B Term Loan of such Lender's Pro Rata Share of such Offer to
Prepay
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Amount and such Lender's option to refuse such Offer to Prepay Amount, subject
to Section 10.5(e). Each such Lender may exercise such option by giving written
notice to Company and Administrative Agent of its election to do so on or before
the first Business Day prior to the Offer to Prepay Date (it being understood
that any Lender which does not notify Company and Administrative Agent of its
election to exercise such option on or before the first Business Day prior to
the Offer to Prepay Date shall be deemed to have elected, as of such date, not
to exercise such option). On the Offer to Prepay Date, Company shall pay to
Administrative Agent the Offer to Prepay Amount, which amount shall be applied
(i) in an amount equal to that portion of the Offer to Prepay Amount payable to
those Lenders that have elected not to exercise such option, to prepay the
Tranche B Term Loans of such Lenders (which prepayment shall be applied to the
scheduled Installments of principal of the Tranche B Term Loans in accordance
with Section 2.17(b)) and (ii) in an amount equal to that portion of the Offer
to Prepay Amount otherwise payable to those Lenders that have elected to
exercise such option, to prepay the Tranche A Term Loans (which prepayment shall
be applied to the scheduled installments of principal of the Tranche A Term
Loans, and if any amounts remain after such prepayment of the Tranche A Term
Loans in full to prepay, cash collateralize or reduce other amounts, in
accordance with Section 2.17(b) (it being understood that after the Tranche A
Term Loans are prepaid in full the Lenders holding Tranche B Term Loans will
have no refusal rights pursuant to this Section 2.17(c))).
(d) Application of Prepayments of Loans to Base Rate Loans and
Eurodollar Rate Loans. Considering each Class of Loans being prepaid separately,
any prepayment thereof with respect to U.S. Borrowings shall be applied first to
Base Rate Loans to the full extent thereof before application to Eurodollar Rate
Loans, in each case in a manner which minimizes the amount of any payments
required to be made by Company pursuant to Section 2.20(c).
(e) Application of Prepayments to Prime Rate Loans and Bankers'
Acceptances. Considering each Class of Loans being prepaid separately, any
prepayment thereof with respect to Canadian Borrowings shall be applied first to
Prime Rate Loans, in a manner which minimizes the amount of any payments
required to be made by Company pursuant to Section 2.20(c), to the full extent
thereof before application to Canadian Eurodollar Rate Loans or
collateralization of Bankers' Acceptances in accordance with Section 2.3(l), on
a pro rata basis between Canadian Eurodollar Rate Loans and Bankers'
Acceptances.
2.18. GENERAL PROVISIONS REGARDING PAYMENTS.
(a) All payments by Company of principal, interest, fees and other
Obligations shall, to the extent not explicitly stated otherwise herein, be made
in Canadian Dollars, with respect to Canadian Borrowings, and U.S. Dollars, with
respect to U.S. Borrowings, in same day funds, without defense, setoff or
counterclaim, free of any restriction or condition, and delivered to
Administrative Agent (or Swing Line Lender with respect to interest on the Swing
Line Loans) not later than 12:00 noon (Toronto time) on the date due at
Administrative Agent's Principal Office (or Swing Line Lender's Principal Office
with respect to interest on the Swing Line Loans) for the account of Lenders (or
Swing Line Lender with respect to interest on the Swing Line Loans); funds
received by Administrative Agent (or Swing Line Lender with respect to interest
on the Swing Line Loans) after that time on such due date shall be deemed to
have been paid by Company on the next succeeding Business Day.
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(b) All payments in respect of the principal amount of any Loan
(other than voluntary prepayments of Swing Line Loans and Revolving Loans) shall
be accompanied by payment of accrued interest on the principal amount being
repaid or prepaid.
(c) Administrative Agent shall promptly distribute to each Lender
at such address as such Lender shall indicate in writing, such Lender's
applicable Pro Rata Share of all payments and prepayments of principal and
interest due hereunder, together with all other amounts due thereto, including,
without limitation, all fees payable with respect thereto, to the extent
received by Administrative Agent.
(d) Notwithstanding the foregoing provisions hereof, if any
Conversion/Continuation Notice is withdrawn as to any Affected Lender or if any
Affected Lender makes Base Rate Loans or Prime Rate Loans in lieu of its Pro
Rata Share of any Eurodollar Rate Loans or Canadian Eurodollar Rate Loans,
Administrative Agent shall give effect thereto in apportioning payments received
thereafter.
(e) Subject to the provisos set forth in the definition of
"Interest Period", whenever any payment to be made hereunder shall be stated to
be due on a day that is not a Business Day, such payment shall be made on the
next succeeding Business Day and such extension of time shall be included in the
computation of the payment of interest hereunder or of the Revolving Commitment
fees hereunder.
(f) Company hereby authorizes Administrative Agent to charge
Company's loan accounts with Administrative Agent in order to cause timely
payment to be made to Administrative Agent of all principal, interest, fees and
expenses due hereunder (subject to sufficient funds being available in its loan
accounts for that purpose).
(g) Administrative Agent shall deem any payment by or on behalf of
Company hereunder that is not made in same day funds prior to 12:00 noon
(Toronto time) to be a non-conforming payment. Any such payment shall not be
deemed to have been received by Administrative Agent until the earlier of (i)
the time such funds become available funds, and (ii) the applicable next
Business Day. Administrative Agent shall give prompt telephonic notice to
Company and each applicable Lender (confirmed in writing) if any payment is
non-conforming. Any non-conforming payment may constitute or become a Default or
Event of Default in accordance with the terms of Section 8.1(a). Interest shall
continue to accrue on any principal as to which a non-conforming payment is made
until such funds are deemed received in accordance with the second sentence of
this Section 2.18(g) at the rate determined pursuant to Section 2.12 from the
date such amount was due and payable until the date such amount is paid in full.
(h) If an Event of Default shall have occurred and not otherwise
been waived, and the maturity of the Obligations shall have been accelerated
pursuant to Section 8.1, all payments or proceeds received by the Agents
hereunder in respect of any of the Obligations, shall be applied in accordance
with the application arrangements described in Section 2.27.
2.19. RATABLE SHARING. Lenders hereby agree among themselves that, except
as otherwise provided in the Collateral Documents with respect to amounts
realized from the exercise of rights with respect to Liens on the Collateral, if
any of them shall, whether by
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voluntary payment (other than a voluntary prepayment of Loans made and applied
in accordance with the terms hereof), through the exercise of any right of
set-off or banker's lien, by counterclaim or cross action or by the enforcement
of any right under the Credit Documents or otherwise, or as adequate protection
of a deposit treated as cash collateral under the Bankruptcy Laws, receive
payment or reduction of a proportion of the aggregate amount of principal,
interest, amounts payable in respect of Letters of Credit, fees and other
amounts then due and owing to such Lender hereunder or under the other Credit
Documents (collectively, the "AGGREGATE AMOUNTS DUE" to such Lender) which is
greater than the proportion received by any other Lender in respect of the
Aggregate Amounts Due to such other Lender, then the Lender receiving such
proportionately greater payment shall (a) notify Administrative Agent and each
other Lender of the receipt of such payment and (b) apply a portion of such
payment to purchase participations (which it shall be deemed to have purchased
from each seller of a participation simultaneously upon the receipt by such
seller of its portion of such payment) in the Aggregate Amounts Due to the other
Lenders so that all such recoveries of Aggregate Amounts Due shall be shared by
all Lenders in proportion to the Aggregate Amounts Due to them; provided, if all
or part of such proportionately greater payment received by such purchasing
Lender is thereafter recovered from such Lender upon the bankruptcy or
reorganization of any Credit Party or otherwise, those purchases shall be
rescinded and the purchase prices paid for such participations shall be returned
to such purchasing Lender ratably to the extent of such recovery, but without
interest. Each Credit Party expressly consents to the foregoing arrangement and
agrees that any holder of a participation so purchased may exercise any and all
rights of banker's lien, set-off or counterclaim with respect to any and all
monies owing by such Credit Party to that holder with respect thereto to the
same extent as if that holder were owed the amount of the participation held by
that holder.
2.20. MAKING OR MAINTAINING EURODOLLAR RATE LOANS.
(a) Inability to Determine Applicable Interest Rate. In the event
that Administrative Agent shall have determined (which determination shall be
final and conclusive and binding upon all parties hereto), on any Interest Rate
Determination Date with respect to any Eurodollar Rate Loans or Canadian
Eurodollar Rate Loans, that by reason of circumstances affecting the London
interbank market adequate and fair means do not exist for ascertaining the
interest rate applicable to such Loans on the basis provided for in the
definition of Adjusted Eurodollar Rate or Adjusted Canadian Eurodollar Rate, as
applicable, Administrative Agent shall on such date give notice (by
telefacsimile or by telephone confirmed in writing) to Company and each Lender
of such determination, whereupon (i) no Loans may be made as, or converted to,
Eurodollar Rate Loans or Canadian Eurodollar Rate Loans, as applicable, until
such time as Administrative Agent notifies Company and Lenders that the
circumstances giving rise to such notice no longer exist (which Administrative
Agent agrees to do promptly once it has knowledge that such condition no longer
exists), and (ii) any Funding Notice or Conversion/Continuation Notice given by
Company with respect to the Loans in respect of which such determination was
made shall be deemed to be rescinded by Company.
(b) Illegality or Impracticability of Eurodollar Rate Loans. In
the event that on any date any Lender shall have determined (which determination
shall be final and conclusive and binding upon all parties hereto but shall be
made only after consultation with Company and Administrative Agent) that the
making, maintaining or continuation of its Eurodollar Rate Loans
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or Canadian Eurodollar Rate Loans (i) has become unlawful as a result of
compliance by such Lender in good faith with any law, treaty, governmental rule,
regulation, guideline or order (or would conflict with any such treaty,
governmental rule, regulation, guideline or order not having the force of law
even though the failure to comply therewith would not be unlawful), or (ii) has
become impracticable, as a result of contingencies occurring after the date
hereof which materially and adversely affect the London interbank market, then,
and in any such event, such Lender shall be an "AFFECTED LENDER" and it shall on
that day give notice (by telefacsimile or by telephone confirmed in writing) to
Company and Administrative Agent of such determination (which notice
Administrative Agent shall promptly transmit to each other Lender). Thereafter
(1) the obligation of the Affected Lender to make Loans as, or to convert Loans
to, Eurodollar Rate Loans or Canadian Eurodollar Rate Loans, as applicable,
shall be suspended until such notice shall be withdrawn by the Affected Lender,
(2) to the extent such determination by the Affected Lender relates to a
Eurodollar Rate Loan or Canadian Eurodollar Rate Loan, as applicable, then being
requested by Company pursuant to a Funding Notice or a Conversion/Continuation
Notice, the Affected Lender shall make such Loan as (or continue such Loan as or
convert such Loan to, as the case may be) a Base Rate Loan, (3) the Affected
Lender's obligation to maintain its outstanding Eurodollar Rate Loans or
Canadian Eurodollar Rate Loans, as applicable (the "AFFECTED LOANS"), shall be
terminated at the earlier to occur of the expiration of the Interest Period then
in effect with respect to the Affected Loans or when required by law, and (4)
the Affected Loans shall automatically convert into Base Rate Loans on the date
of such termination. Notwithstanding the foregoing, to the extent a
determination by an Affected Lender as described above relates to a Eurodollar
Rate Loan or Canadian Eurodollar Rate Loan then being requested by Company
pursuant to a Funding Notice or a Conversion/Continuation Notice, Company shall
have the option, subject to the provisions of Section 2.20(c), to rescind such
Funding Notice or Conversion/Continuation Notice as to all Lenders by giving
notice (by telefacsimile or by telephone confirmed in writing) to Administrative
Agent of such rescission on the date on which the Affected Lender gives notice
of its determination as described above (which notice of rescission
Administrative Agent shall promptly transmit to each other Lender). Except as
provided in the immediately preceding sentence, nothing in this Section 2.20(b)
shall affect the obligation of any Lender other than an Affected Lender to make
or maintain Loans as, or to convert Loans to, Eurodollar Rate Loans or Canadian
Eurodollar Rate Loans in accordance with the terms hereof.
(c) Compensation for Breakage or Non-Commencement of Interest
Periods. Company shall compensate each Lender, upon written request by such
Lender (which request shall set forth the basis for requesting such amounts),
for all reasonable losses, expenses and liabilities (including any interest paid
by such Lender to Lenders of funds borrowed by it to make or carry its
Eurodollar Rate Loans or Canadian Eurodollar Rate Loans and any loss, expense or
liability sustained by such Lender in connection with the liquidation or
re-employment of such funds but excluding loss of anticipated profits) which
such Lender may sustain: (i) if for any reason (other than a default by such
Lender) a borrowing of any Eurodollar Rate Loan or Canadian Eurodollar Rate Loan
does not occur on a date specified therefor in a Funding Notice or a telephonic
request for borrowing, or a conversion to or continuation of any Eurodollar Rate
Loan or Canadian Eurodollar Rate Loan does not occur on a date specified
therefor in a Conversion/Continuation Notice or a telephonic request for
conversion or continuation; (ii) if any prepayment or other principal payment
of, or any conversion of, any of its Eurodollar Rate Loans or Canadian
Eurodollar Rate Loans occurs on a date prior to the last day of an Interest
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Period applicable to that Loan; or (iii) if any prepayment of any of its
Eurodollar Rate Loans or Canadian Eurodollar Rate Loans is not made on any date
specified in a notice of prepayment given by Company.
(d) [Intentionally Omitted]
(e) Assumptions Concerning Funding of Eurodollar Rate Loans.
Calculation of all amounts payable to a Lender under this Section 2.20 and under
Section 2.21 shall be made as though such Lender had actually funded each of its
relevant Eurodollar Rate Loans or Canadian Eurodollar Rate Loans, as applicable,
through the purchase of a Eurodollar deposit bearing interest at the rate
obtained pursuant to clause (i) of the definition of Adjusted Eurodollar Rate or
Adjusted Canadian Eurodollar Rate, as applicable, in an amount equal to the
amount of such Eurodollar Rate Loan or Canadian Eurodollar Rate Loan and having
a maturity comparable to the relevant Interest Period and through the transfer
of such Eurodollar deposit from an offshore office of such Lender to a domestic
office of such Lender in the United States of America; provided, however, each
Lender may fund each of its Eurodollar Rate Loans or Canadian Eurodollar Rate
Loans in any manner it sees fit and the foregoing assumptions shall be utilized
only for the purposes of calculating amounts payable under this Section 2.20 and
under Section 2.21.
2.21. INCREASED COSTS; CAPITAL ADEQUACY.
(a) Compensation for Increased Costs and Taxes. In the event that
any Lender (which term shall include Issuing Bank and each Issuing Lender for
purposes of this Section 2.21(a)) shall determine (which determination shall,
absent manifest error, be final and conclusive and binding upon all parties
hereto) that any law, treaty or governmental rule, regulation or order, or any
change therein or in the interpretation, administration or application thereof
(including the introduction of any new law, treaty or governmental rule,
regulation or order), or any determination of a court or governmental authority,
in each case that becomes effective after the date hereof, or compliance by such
Lender with any guideline, request or directive issued or made after the date
hereof by any central bank or other governmental or quasi-governmental authority
(whether or not having the force of law): (i) subjects such Lender (or its
applicable lending office) to any additional Tax (other than any Excluded Tax)
with respect to this Agreement or any of the other Credit Documents or any of
its obligations hereunder or thereunder or any payments to such Lender (or its
applicable lending office) of principal, interest, fees or any other amount
payable hereunder; (ii) imposes, modifies or holds applicable any reserve
(including any marginal, emergency, supplemental, special or other reserve),
special deposit, compulsory loan, U.S. Federal Deposit Insurance Corporation
insurance or similar requirement against assets held by, or deposits or other
liabilities in or for the account of, or advances or loans by, or other credit
extended by, or any other acquisition of funds by, any office of such Lender
(other than any such reserve or other requirements with respect to Eurodollar
Rate Loans or Canadian Eurodollar Rate Loans that are reflected in the
definition of Adjusted Eurodollar Rate or Adjusted Canadian Eurodollar Rate); or
(iii) imposes any other condition (other than with respect to a Tax matter) on
or affecting such Lender (or its applicable lending office) or its obligations
hereunder or the London interbank market; and the result of any of the foregoing
is to increase the cost to such Lender of agreeing to make, making or
maintaining Loans hereunder or to reduce any amount received or receivable by
such Lender
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(or its applicable lending office) with respect thereto; then, in
any such case, Company shall promptly pay to such Lender, upon receipt of the
statement referred to in the next sentence, such additional amount or amounts
(in the form of an increased rate of, or a different method of calculating,
interest or otherwise as such Lender in its sole discretion shall determine) as
may be necessary to compensate such Lender for any such increased cost or
reduction in amounts received or receivable hereunder; provided, no payment
shall be made under this Section 2.21 in respect of any Tax to the extent that a
gross-up payment or indemnification payment in respect of such Tax is payable
under Section 2.22 or to the extent specifically excluded from a gross-up or
indemnification payment pursuant to clause (iv) or (v) of the definition of
Eligible Assignees or pursuant to Section 2.22(e) or (f). Such Lender shall
deliver to Company (with a copy to Administrative Agent) a written statement,
setting forth in reasonable detail the basis for calculating the additional
amounts owed to such Lender under this Section 2.21(a), which statement shall be
conclusive and binding upon all parties hereto absent manifest error.
(b) Capital Adequacy Adjustment. In the event that any Lender
(which term shall include Issuing Bank and each Issuing Lender for purposes of
this Section 2.21(b)) shall have determined that a Change in Law has or would
have the effect of reducing the rate of return on the capital of such Lender or
any corporation controlling such Lender as a consequence of, or with reference
to, such Lender's Loans or Revolving Commitments or Letters of Credit, or
participations therein or other obligations hereunder with respect to the Loans
or the Letters of Credit to a level below that which such Lender or such
controlling corporation could have achieved but for such Change in Law (taking
into consideration the policies of such Lender or such controlling corporation
with regard to capital adequacy), then from time to time, within five Business
Days after receipt by Company from such Lender of the statement referred to in
the next sentence, Company shall pay to such Lender such additional amount or
amounts as will compensate such Lender or such controlling corporation on an
after-tax basis for such reduction. Such Lender shall deliver to Company (with a
copy to Administrative Agent) a written statement, setting forth in reasonable
detail the basis for calculating the additional amounts owed to Lender under
this Section 2.21(b), which statement shall be conclusive and binding upon all
parties hereto absent manifest error.
(c) Survival. The provisions of this Section 2.21 shall survive
the payment of the Loans, the cancellation or expiration of the Letters of
Credit and the reimbursement of any amounts drawn thereunder, and the
termination hereof.
2.22. TAXES; WITHHOLDING, ETC.
(a) Payments to Be Free and Clear. Except as otherwise provided in
this Section and in clause (iv) or (v) of the definition of Eligible Assignee,
all sums payable by any Credit Party hereunder and under the other Credit
Documents shall (except to the extent required by law) be paid free and clear
of, and without any deduction or withholding on account of, any Tax (other than
an Excluded Tax).
(b) Withholding of Taxes. Except as otherwise provided in this
Section or in clause (iv) or (v) of the definition of Eligible Assignee, if any
Credit Party or any other Person is required by law to make any deduction or
withholding on account of any Tax (other than an Excluded Tax) from any sum paid
or payable by any Credit Party to Administrative Agent or any
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Lender under any of the Credit Documents: (i) such Credit Party shall notify
Administrative Agent of any such requirement or any change in any such
requirement as soon as such Credit Party becomes aware of it; (ii) such Credit
Party shall withhold or deduct the full amount of any such Tax and shall pay any
such Tax to the relevant Governmental Authority before the date on which
penalties attach thereto, such payment to be made (if the liability to pay is
imposed on any Credit Party) for its own account or (if that liability is
imposed on Administrative Agent or such Lender, as the case may be) on behalf of
and in the name of Administrative Agent or such Lender; (iii) the sum payable by
such Credit Party in respect of which the relevant deduction, withholding or
payment is required shall be increased to the extent necessary to ensure that,
after the making of that deduction, withholding or payment (including any
deduction, withholding or payment on the additional amounts), Administrative
Agent or such Lender, as the case may be, receives on the due date a net sum
equal to what it would have received had no such deduction, withholding or
payment been required or made; and (iv) within thirty days after paying any sum
from which it is required by law to make any deduction or withholding, and
within thirty days after the due date of payment of any Tax which it is required
by clause (ii) above to pay, Company shall deliver to Administrative Agent an
official receipt or other evidence satisfactory to the other affected parties of
such deduction, withholding or payment and of the remittance thereof to the
relevant Governmental Authority. Except as otherwise provided in this Section or
clause (iv) or (v) of the definition of Eligible Assignee, if any Tax (other
than an Excluded Tax) in connection with the transactions contemplated by this
Agreement is directly asserted against Administrative Agent or any Lender,
Company will indemnify and hold harmless Administrative Agent or Lender (as the
case may be) from each such Tax (and all reasonable expenses related thereto)
whether or not each such Tax was correctly or legally asserted.
(c) Other Taxes. Company shall timely pay to the relevant
Governmental Authority and indemnify and hold harmless Administrative Agent and
each Lender from any and all Other Taxes (and all reasonable expenses related
thereto) whether or not such Other Taxes were correctly or legally asserted.
(d) Evidence of Exemption from U.S. Withholding Tax. To the extent
that it is legally entitled to do so, each Lender that is not a United States
Person (as such term is defined in Section 7701(a)(30) of the Internal Revenue
Code) for U.S. federal income tax purposes (a "NON-U.S. LENDER") shall deliver
to Administrative Agent for transmission to Company, on or prior to the Closing
Date (in the case of each Lender listed on the signature pages hereof on the
Closing Date) or on or prior to the date of the Assignment Agreement pursuant to
which it becomes a Lender (in the case of each other Lender), on or prior to the
date on which it designates a new lending office and at such other times as may
be necessary in the determination of Company or Administrative Agent (each in
the reasonable exercise of its discretion), (i) two original copies of Internal
Revenue Service Form W-8BEN or W-8ECI (or any successor forms), properly
completed and duly executed by such Lender, and such other documentation
required under the Internal Revenue Code and reasonably requested by Company to
establish that such Lender is not subject to deduction or withholding of United
States federal income tax with respect to any payments to such Lender of
principal, interest, fees or other amounts payable under any of the Credit
Documents, or (ii) if such Lender is not a "bank" or other Person described in
Section 881(c)(3) of the Internal Revenue Code and cannot deliver either
Internal Revenue Service Form W-8BEN or W-8ECI pursuant to clause (i) above, a
Certificate re Non-Bank Status in the form of Exhibit F, properly completed and
duly executed by such
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Lender, and such other documentation required under the Internal Revenue Code
and reasonably requested by Company to establish that such Lender is not subject
to deduction or withholding of United States federal income tax with respect to
any payments to such Lender of interest payable under any of the Credit
Documents. Each Lender required to deliver any forms, certificates or other
evidence with respect to United States federal income tax withholding matters
pursuant to this Section 2.22(d) hereby agrees, from time to time after the
initial delivery by such Lender of such forms, certificates or other evidence,
whenever a lapse in time or change in circumstances renders such forms,
certificates or other evidence obsolete or inaccurate in any material respect,
that such Lender, to the extent it is legally entitled to do so, shall promptly
deliver to Administrative Agent for transmission to Company two new original
copies of Internal Revenue Service Form W-8BEN or W-8ECI or a Certificate re
Non-Bank Status, as the case may be, properly completed and duly executed by
such Lender, and such other documentation required under the Internal Revenue
Code and reasonably requested by Company to confirm or establish that such
Lender is not subject to deduction or withholding of United States federal
income tax with respect to payments to such Lender under the Credit Documents,
or notify Administrative Agent and Company of its inability to deliver any such
forms, certificates or other evidence.
(e) Notwithstanding anything to the contrary in Section 2.21 or
this Section 2.22, no Lender with respect to payments in respect of the Tranche
B Term Loans or the New Term Loans shall be entitled to any gross-up payments or
indemnification payments in respect of any United States federal withholding
taxes imposed under the law as in effect on the date such Lender becomes a
Lender or designates a new lending office except (A) in the case of any Lender
that is not an Original Lender under this Agreement, to the extent that such
gross-up or indemnification payments do not exceed the greater of (i) the
gross-up or indemnification payments to which such Lender's assignor (the
"CURRENT ASSIGNOR") was entitled immediately prior to such assignment or (ii)
the gross-up or indemnification payments to which the current assignor's
assignor would have been entitled if the current assignor had made an assignment
back to such prior assignor, (B) in the case of a Lender that designates a new
lending office, to the extent such gross-up or indemnification payments do not
exceed the gross-up or indemnification payments to which it was entitled
immediately prior to such designation and (C) any Person that became a Lender
during the continuance of an Event of Default pursuant to clause (vi) of the
definition of Eligible Assignees.
(f) Notwithstanding anything to the contrary in this Section 2.22,
no Lender shall be entitled to any gross-up payments or indemnification payments
for Canadian or United States federal withholding taxes with respect to payments
in respect of the Tranche A Term Loans and the Revolving Loans to the extent
such obligation to make such gross-up or indemnification payments arises solely
as a result of a voluntary change in such Lender's tax status occurring after
the date such Lender becomes a Lender.
(g) For purposes of this Section 2.22, the term "Lender" shall
include Issuing Bank and each Issuing Lender in its respective capacity as such.
(h) If a Lender or Administrative Agent determines, in its
reasonable discretion, that it has received a refund of any Taxes or Other Taxes
(other than Excluded Taxes) with respect to which Company has paid additional
amounts under this Section 2.22 it shall reimburse such portion of such refund
to Company (including such portion of interest paid by the
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relevant Governmental Authority with respect to such refund) that the Lender or
Administrative Agent, as the case may be, determines in good faith will leave
it, after such reimbursement, in no better or worse position than it would have
been in if the payment by Company had not been required (taking into account,
without limitation, any out-of-pocket expenses of such Lender or Administrative
Agent and any Taxes on such refund); provided that Company, upon the request of
such Lender or Administrative Agent, agrees to repay as soon as reasonably
practicable such reimbursement (plus any penalties, interest or other charges
imposed by the relevant Governmental Authority) to such Lender or Administrative
Agent in the event such Lender or Administrative Agent is required to repay all
or any portion of such refund to such Governmental Authority. This Section shall
not be construed to require any Lender or Administrative Agent to make available
its Tax returns (or any other information relating to its Taxes which it deems
confidential) to Company or any other person.
(i) The provisions of this Section 2.22 shall survive the payment
of the Loans, the cancellation or expiration of the Letters of Credit and the
reimbursement of any amounts drawn thereunder, and the termination hereof.
2.23. OBLIGATION TO MITIGATE. Each Lender (which term shall include
Issuing Bank and each Issuing Lender for purposes of this Section 2.23) agrees
that, as promptly as practicable after the officer of such Lender responsible
for administering its Loans or Letters of Credit, as the case may be, becomes
aware of the occurrence of an event or the existence of a condition that would
cause such Lender to become an Affected Lender or that would entitle such Lender
to receive payments under Section 2.20, 2.21 or 2.22, it will, to the extent not
inconsistent with the internal policies of such Lender and any applicable legal
or regulatory restrictions, use reasonable efforts to (a) make, issue, fund or
maintain its Credit Extensions, including any Affected Loans, through another
office of such Lender, or (b) take such other measures as such Lender may deem
reasonable, if as a result thereof the circumstances which would cause such
Lender to be an Affected Lender would cease to exist or the additional amounts
which would otherwise be required to be paid to such Lender pursuant to Section
2.20, 2.21 or 2.22 would be materially reduced and if, as determined by such
Lender in its sole discretion, the making, issuing, funding or maintaining of
such Revolving Commitments, Loans or Letters of Credit through such other office
or in accordance with such other measures, as the case may be, would not
otherwise adversely affect such Revolving Commitments, Loans or Letters of
Credit or the interests of such Lender; provided such Lender will not be
obligated to take any action described in clause (a) or (b) above unless Company
agrees to pay all incremental expenses incurred by such Lender. A certificate as
to the amount of any such expenses payable by Company pursuant to this Section
2.23 (setting forth in reasonable detail the basis for requesting such amount)
submitted by such Lender to Company (with a copy to Administrative Agent) shall
be conclusive absent manifest error. No Lender shall be entitled to compensation
under Section 2.20, 2.21 or 2.22 for any costs incurred or reductions suffered
with respect to any date that it has such costs or reductions unless it shall
have notified Company that it will demand compensation from Company for such
costs or reductions not more than 120 days after the later of (i) such date and
(ii) the date on which it shall have become aware of such costs or reductions;
provided that if any event has retroactive effect beyond such 120 days, Company
shall compensate such Lender for such retroactive effect period. Notwithstanding
the foregoing, it is agreed that the failure to give the notice referred to in
the preceding sentence within the time period described therein shall
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only reduce a Lender's entitlement to compensation under Section 2.22 to the
extent Company was actually prejudiced by such failure to give such timely
notice.
2.24. DEFAULTING LENDERS. Anything contained herein to the contrary
notwithstanding, in the event that any Lender defaults (a "DEFAULTING LENDER")
in its obligation to fund (a "FUNDING DEFAULT") any Revolving Loan or its
portion of any unreimbursed payment under Section 2.4(e) or Section 2.5(i) (in
each case, a "DEFAULTED LOAN"), then (a) during any Default Period with respect
to such Defaulting Lender, such Defaulting Lender shall be deemed not to be a
"Lender" for purposes of voting on any matters (including the granting of any
consents or waivers) with respect to any of the Credit Documents or making
elections under Section 2.17(c); (b) to the extent permitted by applicable law,
until such time as the Default Excess with respect to such Defaulting Lender
shall have been reduced to zero, (i) any voluntary prepayment of the Revolving
Loans shall, if Company so directs at the time of making such voluntary
prepayment, be applied to the Revolving Loans of other Lenders as if such
Defaulting Lender had no Revolving Loans outstanding and the Revolving Exposure
of such Defaulting Lender were zero, and (ii) any mandatory prepayment of the
Revolving Loans shall, if Company so directs at the time of making such
mandatory prepayment, be applied to the Revolving Loans of other Lenders (but
not to the Revolving Loans of such Defaulting Lender) as if such Defaulting
Lender had funded all Defaulted Loans of such Defaulting Lender, it being
understood and agreed that Company shall be entitled to retain any portion of
any mandatory prepayment of the Revolving Loans that is not paid to such
Defaulting Lender solely as a result of the operation of the provisions of this
clause (b); (c) such Defaulting Lender's Revolving Commitment and outstanding
Revolving Loans and such Defaulting Lender's Pro Rata Share of the Letter of
Credit Usage shall be excluded for purposes of calculating the Revolving
Commitment fee payable to Lenders in respect of any day during any Default
Period with respect to such Defaulting Lender, and such Defaulting Lender shall
not be entitled to receive any Revolving Commitment fee pursuant to Section
2.13(a) with respect to such Defaulting Lender's Revolving Commitment in respect
of any Default Period with respect to such Defaulting Lender; and (d) the Total
Utilization of Revolving Commitments as at any date of determination shall be
calculated as if such Defaulting Lender had funded all Defaulted Loans of such
Defaulting Lender. No Revolving Commitment of any Lender shall be increased or
otherwise affected, and, except as otherwise expressly provided in this Section
2.24, performance by Company of its obligations hereunder and the other Credit
Documents shall not be excused or otherwise modified as a result of any Funding
Default or the operation of this Section 2.24. The rights and remedies against a
Defaulting Lender under this Section 2.24 are in addition to other rights and
remedies which Company may have against such Defaulting Lender with respect to
any Funding Default and which Administrative Agent or any Lender may have
against such Defaulting Lender with respect to any Funding Default.
2.25. REMOVAL OR REPLACEMENT OF A LENDER. Anything contained herein to the
contrary notwithstanding, in the event that: (a) (i) any Lender (an
"INCREASED-COST LENDER") shall give notice to Company that such Lender is an
Affected Lender or that such Lender is entitled to receive payments under
Section 2.20, 2.21 or 2.22, (ii) the circumstances which have caused such Lender
to be an Affected Lender or which entitle such Lender to receive such payments
shall remain in effect, and (iii) such Lender shall fail to withdraw such notice
within five Business Days after Company's request for such withdrawal; or (b)
(i) any Lender shall become a Defaulting Lender, (ii) the Default Period for
such Defaulting Lender shall remain in
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effect, and (iii) such Defaulting Lender shall fail to cure the default as a
result of which it has become a Defaulting Lender within five Business Days
after Company's request that it cure such default; or (c) in connection with any
proposed amendment, modification, termination, waiver or consent with respect to
any of the provisions hereof as contemplated by Section 10.5(b), the consent of
Requisite Lenders shall have been obtained but the consent of one or more of
such other Lenders (each, a "NON-CONSENTING LENDER") whose consent is required
shall not have been obtained; then, with respect to each such Increased-Cost
Lender, Defaulting Lender or Non-Consenting Lender (the "TERMINATED LENDER"),
Company may, by giving written notice to Administrative Agent and any Terminated
Lender of its election to do so, elect to cause such Terminated Lender (and such
Terminated Lender hereby irrevocably agrees) to assign its outstanding Loans and
its Revolving Commitments, if any, in full to one or more Eligible Assignees
(each, a "REPLACEMENT LENDER") in accordance with the provisions of Section
10.6; provided, (1) on the date of such assignment, the Replacement Lender shall
pay to Terminated Lender an amount equal to the sum of (A) an amount equal to
the principal of, and all accrued interest on, all outstanding Loans of the
Terminated Lender, (B) an amount equal to all unreimbursed drawings that have
been funded by such Terminated Lender, together with all then unpaid interest
with respect thereto at such time and (C) an amount equal to all accrued, but
theretofore unpaid fees owing to such Terminated Lender pursuant to Section
2.13; (2) on the date of such assignment, Company shall pay any amounts payable
to such Terminated Lender pursuant to Section 2.20(c), 2.21 or 2.22 or otherwise
as if it were a prepayment and (3) in the event such Terminated Lender is a
Non-Consenting Lender, each Replacement Lender shall consent, at the time of
such assignment, to each matter in respect of which such Terminated Lender was a
Non-Consenting Lender; provided Company may not make such election with respect
to any Terminated Lender that is also an Issuing Lender unless, prior to the
effectiveness of such election, Company shall have caused each outstanding
Letter of Credit issued by such Issuing Lender to be cancelled or collateralized
in accordance with Section 2.5(n). Upon the prepayment of all amounts owing to
any Terminated Lender and the termination of such Terminated Lender's Revolving
Commitments, if any, such Terminated Lender shall no longer constitute a
"Lender" for purposes hereof; provided any rights of such Terminated Lender to
indemnification hereunder that by their terms survive termination of this
Agreement shall survive as to such Terminated Lender. Notwithstanding the
foregoing, Company shall not be able to cause any Non-Consenting Lender to
assign its outstanding Loans and its Revolving Commitments pursuant to this
paragraph unless it causes all Non-Consenting Lenders to do so.
2.26. INCREMENTAL FACILITIES. Company may by written notice to Syndication
Agent and Administrative Agent elect to request the establishment of one or more
new term loan commitments (the "NEW TERM LOAN COMMITMENTS"), by an amount (x)
not in excess of U.S.$50.0 million in the aggregate and (y) not less than
U.S.$10.0 million individually (or such lesser amount which shall be approved by
Administrative Agent and Syndication Agent or such lesser amount that shall
constitute the difference between U.S.$50.0 million and all such New Term Loan
Commitments obtained prior to such date), and integral multiples of U.S.$5.0
million in excess of that amount. Each such notice shall specify (A) the date
(each, an "INCREASED AMOUNT DATE") on which Company proposes that the New Term
Loan Commitments shall be effective, which shall be a date not less than 10
Business Days after the date on which such notice is delivered to Syndication
Agent and Administrative Agent and (B) the identity of each Lender or other
Person that is an Eligible Assignee (each, a "NEW TERM LOAN LENDER") to whom
Company proposes any portion of such New Term Loan Commitments be allocated and
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the amounts of such allocations; provided that any Lender approached to provide
all or a portion of the New Term Loan Commitments may elect or decline, in its
sole discretion, to provide a New Term Loan Commitment. Such New Term Loan
Commitments shall become effective as of such Increased Amount Date; provided
that (1) no Default or Event of Default shall exist on such Increased Amount
Date immediately before or after giving effect to such New Term Loan
Commitments; (2) both before and after giving effect to the making of any Series
of New Term Loans, the condition set forth in Section 3.2(a)(iii) shall be
satisfied as of such Increased Amount Date; (3) Holdings and its Subsidiaries
shall be in pro forma compliance with each of the covenants set forth in Section
6.8 as of the last day of the most recently ended Fiscal Quarter after giving
effect to such New Term Loan Commitments; (4) the New Term Loan Commitments
shall be effected pursuant to one or more Joinder Agreements executed and
delivered by Company, Syndication Agent and Administrative Agent, and each of
which shall be recorded in the Register and shall be subject to the requirements
set forth in Section 2.22(d); and (5) Company shall deliver or cause to be
delivered any legal opinions or other documents reasonably requested by
Administrative Agent or Syndication Agent in connection with any such
transaction. Any New Term Loans made on an Increased Amount Date shall be
designated, a separate series (a "SERIES") of New Term Loans for all purposes of
this Agreement.
On any Increased Amount Date on which any New Term Loan Commitments of any
Series are effective, subject to the satisfaction of the foregoing terms and
conditions, (i) each New Term Loan Lender of any Series shall make a Loan to
Company (a "NEW TERM LOAN") in an amount equal to its New Term Loan Commitment
of such Series, and (ii) each New Term Loan Lender of any Series shall become a
Lender hereunder with respect to the New Term Loan Commitment of such Series and
the New Term Loans of such Series made pursuant thereto.
Administrative Agent shall notify Lenders promptly upon receipt of
Company's notice of each Increased Amount Date and in respect thereof the Series
of New Term Loan Commitments and the New Term Loan Lenders of such Series.
The terms and provisions of the New Term Loans and New Term Loan
Commitments of any Series shall be, except as otherwise set forth herein or in
the Joinder Agreement, identical to the Tranche B Term Loans. In any event (i)
the weighted average life to maturity of all New Term Loans of any Series shall
be no shorter than the weighted average life to maturity of the Revolving Loans,
the Tranche A Term Loans and the Tranche B Term Loans, (ii) the applicable New
Term Loan Maturity Date of each Series shall be no earlier than the final
maturity of the Revolving Loans, the Tranche A Term Loans and the Tranche B Term
Loans, (iii) the rate of interest applicable to the New Term Loans of each
Series shall be determined by Company and the applicable new Lenders and shall
be set forth in each applicable Joinder Agreement; provided, however, that the
Applicable Margins applicable to the New Term Loans shall not be more than 50
basis points greater than the comparable Applicable Margins applicable to the
Tranche B Term Loans, and the Applicable Margins applicable to the Tranche B
Term Loans shall be increased to the extent necessary to achieve the foregoing,
and (iv) the aggregate amount of prepayments and repayments of any Series of New
Term Loans during the first five years after the borrowing of any such Series
shall be limited in the same manner that prepayments and repayments of Tranche B
Term Loans are limited under Section 2.16(h). Each Joinder Agreement may,
without the consent of any other Lenders, effect such amendments to this
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Agreement and the other Credit Documents as may be necessary or appropriate, in
the opinion of the Syndication Agent and Administrative Agent, to effect the
provision of this Section 2.26.
2.27. APPLICATION OF FUNDS. The proceeds received by Collateral Agent in
respect of any sale of, collection from or other realization upon all or any
part of the Collateral pursuant to the exercise by Collateral Agent of its
remedies, and any other funds realized by Administrative Agent or Collateral
Agent during the continuance of an Event of Default, shall be applied, subject
to applicable laws, in full or in part, together with any other sums then held
by Collateral Agent pursuant to this Agreement, promptly by Collateral Agent as
follows:
(a) First, to the payment of all reasonable costs and expenses,
fees, commissions and taxes of such sale, collection or other realization
including compensation to the Agents and their agents and counsel, and all
expenses, liabilities and advances made or incurred by the Agents in
connection therewith and all amounts for which the Agents are entitled to
indemnification pursuant to the provisions of any Credit Document,
together with interest on each such amount at the highest rate then in
effect under this Agreement from and after the date such amount is due,
owing or unpaid until paid in full;
(b) Second, to the payment of all other reasonable costs and
expenses of such sale, collection or other realization including
compensation to the other Secured Parties and their agents and counsel and
all costs, liabilities and advances made or incurred by the other Secured
Parties in connection therewith, together with interest on each such
amount at the highest rate then in effect under this Agreement from and
after the date such amount is due, owing or unpaid until paid in full;
(c) Third, without duplication of amounts applied pursuant to
clauses (a) and (b) above, to the payment in full in cash, pro rata, of
interest and other amounts constituting Obligations (other than principal
and reimbursement obligations in respect of Letters of Credit) in each
case equally and ratably in accordance with the respective amounts thereof
then due and owing;
(d) Fourth, to the payment in full in cash, pro rata, of principal
amount of the Obligations (including reimbursement obligations in respect
of Letters of Credit); and
(e) Fifth, the balance, if any, to the person lawfully entitled
thereto (including the applicable Credit Party or its successors or
assigns) or as a court of competent jurisdiction may direct.
In the event that any such proceeds are insufficient to pay in full the
items described in clauses (a) through (e) of this Section 2.27, the Credit
Parties shall remain liable, jointly and severally, for any deficiency.
SECTION 3. CONDITIONS PRECEDENT
3.1. CLOSING DATE. The obligation of any Lender, the Issuing Bank or any
Issuing Lender to make a Credit Extension on the Closing Date is subject to the
satisfaction or waiver of the following conditions on or before the Closing
Date:
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(a) Credit Documents. Administrative Agent shall have received
each Credit Document originally executed and delivered by each applicable
Credit Party for itself, the Issuing Bank and each Lender.
(b) Organizational Documents; Incumbency. Administrative Agent
shall have received (i) each Organizational Document executed and
delivered by each Credit Party, as applicable, and, to the extent
applicable, certified as of a recent date by the appropriate governmental
official, each dated the Closing Date or a recent date prior thereto; (ii)
signature and incumbency certificates of the officers of each Credit Party
executing the Credit Documents to which it is a party; (iii) resolutions
of the Board of Directors of each Credit Party approving and authorizing
the execution, delivery and performance of this Agreement and the other
Credit Documents and the Related Agreements to which it is a party,
certified as of the Closing Date by its secretary or an assistant
secretary as being in full force and effect without modification or
amendment; and (iv) subject to such exceptions as are reasonably
acceptable to Administrative Agent, a good standing certificate (or the
equivalent) from the applicable Governmental Authority of each Credit
Party's jurisdiction of incorporation, organization or formation and in
each jurisdiction in which it is qualified as a foreign corporation or
other entity to do business, each dated a recent date prior to the Closing
Date.
(c) Organizational and Capital Structure. The organizational
structure and capital structure of MAAX Holdings and its Subsidiaries,
after giving effect to the Transactions, to the extent described or
provided to the Agents prior to the date of the Commitment Letter, shall
not be changed or amended in any material respect from those described or
provided to the Agents prior to the date of the Commitment Letter, without
the consent of the Agents (which consent shall not be unreasonably
withheld), and otherwise shall be in form and substance reasonably
satisfactory to the Agents.
(d) Consummation of Transactions.
(i) (1) All conditions to the Transactions set forth in
Related Agreements (other than the Intercompany Debt Documents)
shall have been satisfied or the fulfillment of any such conditions
shall have been waived with the consent of the Agents and (2) such
Transactions shall have been, or shall substantially concurrently
be, consummated in accordance with the terms of the Related
Agreements.
(ii) The Agents shall each have received a fully executed
copy of each Related Agreement and any documents executed in
connection therewith, together with copies of each of the opinions
of counsel delivered to the parties under the Related Agreements,
addressed to the Lenders or accompanied by a letter from each such
counsel, authorizing Lenders to rely upon such opinion to the same
extent as though it were addressed to Lenders. Each Related
Agreement shall be in full force and effect, shall include terms and
provisions reasonably satisfactory to the Agents and no provision
thereof shall have been modified or waived in any respect determined
by the Agents to be material, in each case without the consent of
the Agents.
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(e) Existing Indebtedness and Preferred Stock. On the Closing
Date, MAAX Holdings and its Subsidiaries shall have (i) consummated the
Refinancing, (ii) terminated any commitments to lend or make other
extensions of credit thereunder, (iii) delivered to the Agents all
documents or instruments necessary to release all Liens securing Existing
Indebtedness or other obligations of MAAX Holdings and its Subsidiaries
thereunder being repaid on the Closing Date, (iv) made arrangements
satisfactory to the Agents with respect to the cancellation of any letters
of credit outstanding thereunder other than the Existing Letters of Credit
and (v) redeemed all outstanding Preferred Stock other than Preferred
Stock allowed by Sections 6.7(b)(i) or (d).
(f) Governmental Authorizations and Consents. Each Credit Party
shall have obtained all material Governmental Authorizations and all
material consents of other Persons, in each case that are necessary in
connection with the transactions contemplated by the Credit Documents and
the Related Agreements and each of the foregoing shall be in full force
and effect. All applicable waiting periods shall have expired without any
action being taken or threatened by any competent authority which would
restrain, prevent or otherwise impose adverse conditions on the
transactions contemplated by the Credit Documents or the Related
Agreements or the financing thereof and no action, request for stay,
petition for review or rehearing, reconsideration, or appeal with respect
to any of the foregoing shall be pending, and the time for any applicable
agency to take action to set aside its consent on its own motion shall
have expired.
(g) Real Estate Assets. Collateral Agent shall have received from
Company and each applicable Guarantor:
(i) fully executed and (where required) notarized Mortgages,
in proper form for recording, registration or filing in all
appropriate places in all applicable jurisdictions, encumbering each
Real Estate Asset listed in Schedule 3.1(g) (each, a "CLOSING DATE
MORTGAGED PROPERTY"), together with such authorizations,
certificates, affidavits, questionnaires or returns as shall be
required in connection with the registering, recording or filing
thereof to create a Mortgage Lien under applicable law, and such
financing statements and any other instruments necessary to grant a
Mortgage Lien or equivalent under the laws of any applicable
jurisdiction, all of which shall be in form and substance reasonably
satisfactory to Collateral Agent;
(ii) (A) ALTA or Canadian equivalent mortgagee title
insurance policies (or unconditional commitments therefor having the
effect of a title insurance policy) issued by one or more title
companies reasonably satisfactory to Collateral Agent with respect
to each Closing Date Mortgaged Property (each, a "TITLE POLICY"),
insuring each Mortgage is subject to no Liens other than the
Permitted Collateral Liens in amounts not less than the full
replacement value of each Closing Date Mortgaged Property set forth
on Schedule 3.1(g), together with (w) a title report issued by a
title company with respect thereto, dated not more than thirty days
prior to the Closing Date and copies of all recorded or registered
documents listed as exceptions to title or otherwise referred to
therein, each in form and substance reasonably satisfactory to
Collateral Agent, (x) such
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affirmative insurance and endorsement as Collateral Agent shall
reasonably request (including endorsements on matters relating to
usury, first loss, last dollar, zoning (provided, to the extent such
affirmative insurance and endorsement on matters relating to zoning
are not available at commercially reasonable rates, Company shall
order, at its sole cost and expense, zoning reports in form and
substance reasonably acceptable to Collateral Agent from the
Planning & Zoning Resource Corporation ("PZR") indicating that the
use of the Closing Date Mortgaged Property complies with applicable
zoning ordinances, and shall provide to PZR such documents and
instruments as reasonably requested including, without limitation,
surveys and owners' affidavits), contiguity, revolving credit, doing
business, non-imputation, public road access, survey, variable rate,
guarantees, restrictions, encroachments and minerals, work order,
gap, environmental liens, subdivision, separate tax lot, creditors'
rights amendments and so-called comprehensive coverage over
covenants and restrictions), (y) an "aggregation," "tie-in" or
"cluster" endorsement, if available under applicable law (i.e.,
policies which insure against losses regardless of location or
allocated value of the insured property up to a stated maximum
coverage amount) and (z) if required by Collateral Agent, such
reinsurance arrangements (with provisions for direct access) as
shall be reasonably acceptable to Collateral Agent and (B) evidence
satisfactory to Collateral Agent that such Credit Party has paid to
the title company or to the appropriate governmental authorities all
expenses and premiums of the title company and all other sums
required in connection with the issuance of each Title Policy and
all recording and stamp taxes (including mortgage recording and
intangible taxes) payable in connection with recording or
registering the Mortgages for each Closing Date Mortgaged Property
in the appropriate real estate records or land registry office;
provided that Company or Guarantor may, instead of providing a Title
Policy and complying with the preceding text of this clause (ii)
with respect to those Closing Date Mortgaged Properties located in
Canada, provide to Collateral Agent an opinion of counsel (which
counsel shall be reasonably satisfactory to Collateral Agent) in the
applicable province confirming that (a) save with respect to lot
number 2 294 798 forming part of the Closing Date Mortgaged Property
listed as number 9 on Schedule 3.1(g), Company or Guarantor, as
applicable, has good and marketable title to the Closing Date
Mortgaged Property in fee simple subject to no Liens, other than the
Permitted Collateral Liens (or, in respect of each Closing Date
Mortgaged Property situated in the Province of Quebec, that Company
or Guarantor, as applicable, is the registered owner of the Closing
Date Mortgaged Property with a good and valid title, free and clear
of any registered Liens, other than Permitted Collateral Liens), (b)
the applicable Mortgage has been registered, filed and recorded in
all places in that province where it is necessary or desirable to do
so in order to perfect the Mortgage Lien, (c) the Mortgage Lien
constituted by the Mortgage is valid and enforceable against Company
or Guarantor, as the case may be, and constitutes a valid Mortgage
Lien having a First Priority on the Closing Date Mortgaged Property
subject to no Liens other than the Permitted Collateral Liens, and
(d) addressing compliance of the Closing Date Mortgaged Property
with applicable law, realty tax arrears, building and zoning by-laws
and
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building codes, public road access, survey or certificates of
location and such other matters as Collateral Agent may reasonably
request, and otherwise in form and substance reasonably satisfactory
to Collateral Agent;
(iii) evidence of flood insurance with respect to each Flood
Hazard Property, if any, that is located in a community that
participates in the National Flood Insurance Program, in each case
in compliance with any applicable regulations of the Board of
Governors of the Federal Reserve System, in form and substance
reasonably satisfactory to Collateral Agent;
(iv) ALTA or Canadian equivalent surveys or certificates of
location prepared by qualified professional land surveyors of all
Closing Date Mortgaged Properties, certified to Collateral Agent
and, with respect to the U.S. properties, dated not more than thirty
days prior to the Closing Date, and otherwise in form and substance
satisfactory to Collateral Agent; the surveys and certificates of
location will disclose the location of all buildings and
improvements as well as the location of all easements, servitudes
and rights-of-way, and shall not disclose any encroachments from or
onto the Closing Date Mortgaged Properties which have not been
insured over by the Title Policies, and the surveys and non-Quebec
certificates of location will disclose the location of all access
points, driveways and parking areas;
(v) with respect to each Closing Date Mortgaged Property,
such consents, approvals, amendments, supplements, estoppels, tenant
subordination agreements or other instruments as necessary to
consummate the transactions contemplated hereby or as shall
reasonably be deemed necessary by Collateral Agent in order for the
owner of the fee constituting such Mortgaged Property to grant the
Mortgage Lien contemplated by the Mortgage with respect to such
Mortgaged Property;
(vi) with respect to each Closing Date Mortgaged Property,
such affidavits, certificates, information (including financial
data) and instruments of indemnification (including a so-called
"gap" indemnification) as shall be required to induce the title
company to issue the Title Policy/ies and endorsements contemplated
above; and
(vii) with respect to each Real Estate Asset or Closing Date
Mortgaged Property, copies of all leases (if any) in which any
Credit Party holds the lessor's interest or other agreements
relating to possessory interests, if any.
(h) Personal Property Collateral. Collateral Agent shall have
received:
(i) evidence reasonably satisfactory to Collateral Agent of
the compliance by each Credit Party with its obligations under the
Security Agreements and the other Collateral Documents (including,
without limitation, their obligations to execute and deliver UCC and
PPSA financing statements,
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originals of securities, instruments and chattel paper and any
control agreements with respect to deposit and/or securities
accounts as provided therein);
(ii) A completed Perfection Certificate, dated the Closing
Date and executed by an Authorized Officer of each Credit Party,
together with all attachments contemplated thereby, including, as
applicable, (A) the results of a recent search, by a Person
reasonably satisfactory to Collateral Agent, of all effective UCC
and PPSA financing statements (or equivalent filings) made with
respect to any property of any Credit Party in the jurisdictions
specified in the Perfection Certificate, together with copies of all
such filings disclosed by such search, and (B) UCC termination
statements and PPSA discharge statements (or similar documents) duly
executed (as applicable) by all applicable Persons for filing in all
applicable jurisdictions as may be necessary to terminate any
effective UCC and PPSA financing statements (or equivalent filings)
disclosed in such search (other than any such financing statements
in respect of Permitted Collateral Liens); and
(iii) evidence that each Credit Party shall have taken or
caused to be taken any other action, executed and delivered or
caused to be executed and delivered any other agreement, document
and instrument (including without limitation, (i) any intercompany
notes evidencing Indebtedness permitted to be incurred pursuant to
Section 6.1(b) and (ii) estoppel letters or certificates from
potentially conflicting registrants under the PPSA) and made or
caused to be made any other filing and recording (other than as set
forth herein) reasonably required by Collateral Agent.
(i) Evidence of Insurance. Collateral Agent shall have received a
certificate from Company's insurance broker or other evidence reasonably
satisfactory to it that all insurance required to be maintained pursuant
to Section 5.5 is in full force and effect and that Collateral Agent, for
the benefit of Lenders has been named as additional insured and loss payee
thereunder to the extent required under Section 5.5.
(j) Opinions of Counsel to Credit Parties. Administrative Agent,
Issuing Bank and Lenders shall have received originally executed copies of
the favorable written opinions of (i) Kaye Scholer LLP, U.S. counsel for
Credit Parties, (ii) Fasken Martineau DuMoulin LLP, Ontario, British
Columbia, Alberta and Quebec counsel for Credit Parties, (iii) McInnes
Cooper, Nova Scotia counsel for the Credit Parties, and (iv) local
counsels in the States of Pennsylvania, Minnesota, Washington, Indiana,
California, Georgia, West Virginia and Arizona, in the forms of Exhibit
D-1 to D-11, respectively, and as to such other matters as Administrative
Agent or Syndication Agent may reasonably request, dated as of the Closing
Date and otherwise in form and substance reasonably satisfactory to
Administrative Agent and Syndication Agent (and each Credit Party hereby
instructs such counsel to deliver such opinions to the Agents and
Lenders).
(k) Fees. Company shall have paid the fees payable on the Closing
Date referred to in Section 2.13(d).
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(l) Solvency Certificate. On the Closing Date, Administrative
Agent, Issuing Bank and Lenders shall have received a Solvency Certificate
from the Credit Parties dated the Closing Date and addressed to Agents and
Lenders, and in form, scope and substance satisfactory to Agents, with
appropriate attachments and demonstrating that after giving effect to the
consummation of the Transactions (other than those pursuant to the
Intercompany Debt Documents), each Credit Party is Solvent.
(m) Closing Date Certificate. Holdings and Company shall have
delivered to Initial Agents an originally executed Closing Date
Certificate, together with all attachments thereto.
(n) No Litigation. There shall not exist any action, suit,
investigation, litigation or proceeding or other legal or regulatory
developments, pending or threatened in any court or before any arbitrator
or Governmental Authority that, in the reasonable opinion of any Joint
Lead Arranger singly or in the aggregate, adversely affects the
Transactions, the financing thereof or any of the other transactions
contemplated by the Credit Documents or the Related Agreements, or that
has or could reasonably be expected to have a Material Adverse Effect.
(o) Completion of Proceedings. All partnership, corporate and
other proceedings taken or to be taken in connection with the transactions
contemplated hereby and all documents incidental thereto not previously
found acceptable by the Joint Lead Arrangers and their counsel shall be
reasonably satisfactory in form and substance to the Joint Lead Arrangers
and such counsel, and the Joint Lead Arrangers and such counsel shall have
received all such counterpart originals or certified copies of such
documents as any Joint Lead Arranger may reasonably request.
(p) Minimum EBITDA. Consolidated Adjusted EBITDA of the Acquired
Business for Fiscal Year 2004, calculated based on the Historical
Financial Statements, but prepared on the basis of accounting principles
generally accepted in Canada, as adjusted pursuant to the Commitment
Letter, shall not be less than Can$95.0 million.
Each Lender, by delivering its signature page to this Agreement and funding a
Loan on the Closing Date, shall be deemed to have acknowledged receipt of, and
consented to and approved, each Credit Document and each other document required
to be approved by any Agent, Requisite Lenders or Lenders, as applicable on the
Closing Date.
3.2. CONDITIONS TO EACH CREDIT EXTENSION.
(a) Conditions Precedent. The obligation of each Lender to make
any Loan, or Issuing Bank or any Issuing Lender to issue any Letter of Credit,
on any Credit Date, including the Closing Date, is subject to the satisfaction,
or waiver in accordance with Section 10.5, of the following conditions
precedent:
(i) Administrative Agent shall have received a fully
executed and delivered Funding Notice or Issuance Notice, as the
case may be;
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(ii) after making the Credit Extensions requested on such
Credit Date, the Total Utilization of Revolving Commitments shall
not exceed the Revolving Commitments then in effect;
(iii) as of such Credit Date, the representations and
warranties contained herein and in the other Credit Documents shall
be true and correct in all material respects (and any such
representations and warranties that contain a materiality or
Material Adverse Effect qualification shall be true and correct in
all respects) on and as of that Credit Date to the same extent as
though made on and as of that date, except to the extent such
representations and warranties specifically relate to an earlier
date, in which case such representations and warranties shall have
been true and correct in all material respects on and as of such
earlier date;
(iv) as of such Credit Date, no event shall have occurred and
be continuing or would result from the consummation of the
applicable Credit Extension that would constitute an Event of
Default or a Default; and
(v) on or before the date of issuance of any Letter of
Credit, Administrative Agent shall have received all other
information required by the applicable Issuance Notice, and such
other documents or information as the applicable Issuing Lender may
reasonably require in connection with the issuance of such Letter of
Credit.
Any Agent or Requisite Lenders shall be entitled, but not obligated, to request
and receive, prior to the making of any Credit Extension, additional information
reasonably satisfactory to the requesting party confirming the satisfaction of
any of the foregoing if, in the good faith judgment of such Agent or Requisite
Lenders, such request is warranted under the circumstances.
(b) Notices. Any Notice shall be executed by an Authorized Officer
in a writing delivered to Administrative Agent. In lieu of delivering a Notice,
Company may give Administrative Agent telephonic notice by the required time of
any proposed borrowing, conversion/continuation or issuance of a Letter of
Credit, as the case may be; provided each such notice shall be promptly
confirmed in writing by delivery of the applicable Notice to Administrative
Agent on or before the applicable date of borrowing, continuation/conversion or
issuance. None of Administrative Agent, Issuing Bank, any Issuing Lender or any
Lender shall incur any liability to Company in acting upon any telephonic notice
referred to above that Administrative Agent believes in good faith to have been
given by a duly authorized officer or other person authorized on behalf of
Company or for otherwise acting in good faith.
SECTION 4. REPRESENTATIONS AND WARRANTIES
In order to induce Lenders, Issuing Bank and each Issuing Lender to enter
into this Agreement and to make each Credit Extension to be made thereby, each
Credit Party represents and warrants to each Lender, Issuing Bank and each
Issuing Lender, on the Closing Date and on each Credit Date, that the following
statements are true and correct (it being understood and agreed that the
representations and warranties made on the Closing Date are deemed to be made
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concurrently with the consummation of the Transactions occurring on the Closing
Date and the other mergers, asset transfers and amalgamations among Holdings and
its Subsidiaries occurring on the Closing Date):
4.1. ORGANIZATION; REQUISITE POWER AND AUTHORITY; QUALIFICATION. Each of
Holdings and its Subsidiaries (a) is duly organized, validly existing and in
good standing under the laws of its jurisdiction of organization as identified
in Schedule 4.1, (b) has all requisite power and authority to own and operate
its properties, to carry on its business as now conducted and as proposed to be
conducted, to enter into the Credit Documents to which it is a party and to
carry out the transactions contemplated thereby, and (c) is qualified to do
business and in good standing in every jurisdiction where its assets are located
and wherever necessary to carry out its business and operations, except in
jurisdictions where the failure to be so qualified or in good standing has not
had, and could not be reasonably expected to have, a Material Adverse Effect.
4.2. CAPITAL STOCK AND OWNERSHIP. The Capital Stock of each of Holdings
and its Subsidiaries has been duly authorized and validly issued and is fully
paid and non-assessable. Except as set forth on Schedule 4.2, as of the date
hereof, there is no existing option, warrant, call, right, commitment or other
agreement to which Holdings or any of its Subsidiaries is a party requiring, and
there is no membership interest or other Capital Stock of Holdings or any of its
Subsidiaries outstanding which upon conversion or exchange would require, the
issuance by Holdings or any of its Subsidiaries of any additional membership
interests or other Capital Stock of Holdings or any of its Subsidiaries or other
Securities convertible into, exchangeable for or evidencing the right to
subscribe for or purchase, a membership interest or other Capital Stock of
Holdings or any of its Subsidiaries. Schedule 4.2 correctly sets forth the
ownership interest of Holdings and each of its Subsidiaries in their respective
Subsidiaries as of the Closing Date after giving effect to the Transactions
(other than those pursuant to the Intercompany Debt Documents).
4.3. DUE AUTHORIZATION. The execution, delivery and performance of the
Credit Documents have been duly authorized by all necessary action on the part
of each Credit Party that is a party thereto.
4.4. NO CONFLICT. The execution, delivery and performance by Credit
Parties of the Credit Documents to which they are parties and the consummation
of the transactions contemplated by the Credit Documents do not and will not (a)
violate any provision of (x) any law or any governmental rule or regulation
applicable to Holdings or any of its Subsidiaries, (y) any of the Organizational
Documents of Holdings or any of its Subsidiaries, or (z) any order, judgment or
decree of any court or other agency of government binding on Holdings or any of
its Subsidiaries, except in the case of clauses (x) and (z) as could not
reasonably be expected to have a Material Adverse Effect; (b) conflict with,
result in a breach of or constitute (with due notice or lapse of time or both) a
default under any Contractual Obligation of Holdings or any of its Subsidiaries
except to the extent such conflict, breach or default could not reasonably be
expected to have a Material Adverse Effect; (c) result in or require the
creation or imposition of any Lien upon any of the properties or assets of
Holdings or any of its Subsidiaries (other than any Liens created under any of
the Credit Documents in favor of Collateral Agent, on behalf of Secured
Parties); or (d) require any approval of stockholders, members or partners of
Holdings
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or any of its Subsidiaries, except for such approvals or consents which will be
obtained on or before the Closing Date.
4.5. GOVERNMENTAL CONSENTS. The execution, delivery and performance by
Credit Parties of the Credit Documents to which they are parties and the
consummation of the transactions contemplated by the Credit Documents do not and
will not require any registration with, consent or approval of, or notice to, or
other action to, with or by, any Governmental Authority except as otherwise set
forth in the Merger Agreement, and except for filings and recordings with
respect to the Collateral to be made, or otherwise delivered to Collateral Agent
for filing and/or recordation, as of the Closing Date.
4.6. BINDING OBLIGATION. Each Credit Document has been duly executed and
delivered by each Credit Party that is a party thereto and is the legally valid
and binding obligation of such Credit Party, enforceable against such Credit
Party in accordance with its respective terms, except as may be limited by
bankruptcy, insolvency, reorganization, moratorium or similar laws relating to
or limiting creditors' rights generally or by equitable principles relating to
enforceability.
4.7. HISTORICAL FINANCIAL STATEMENTS.
(a) The Historical Financial Statements were prepared in
conformity with GAAP and fairly present, in all material respects, the financial
position, on a consolidated basis, of the Acquired Business as at the respective
dates thereof and the results of operations, cash flows and shareholders'
equity, on a consolidated basis, for each of the periods then ended. As of the
Closing Date, neither Holdings nor any of its Subsidiaries has any contingent
liability (other than under the Credit Documents or the Senior Subordinated
Notes Indenture) or liability for taxes, long-term lease or unusual forward or
long-term commitment that is not reflected in the Historical Financial
Statements or the notes thereto and which in any such case could reasonably be
expected to have a Material Adverse Effect.
(b) The unaudited pro forma consolidated balance sheet of Holdings
and its Subsidiaries as of February 29, 2004 and the related income statement
for the Fiscal Year then ended, including the notes thereto (the "PRO FORMA
FINANCIAL STATEMENTS"), provided to the Lenders present fairly the information
shown therein in all material respects, and the assumptions used in the
preparation thereof are reasonable and the adjustments made therein are
appropriate to give effect to the transactions and circumstances referred to
therein.
4.8. PROJECTIONS. On and as of the Closing Date, the projections of
Holdings and its Subsidiaries for the period Fiscal Year 2005 through and
including Fiscal Year 2009 (the "PROJECTIONS") are based on good faith estimates
and assumptions made by the management of Holdings; provided the Projections are
not to be viewed as facts and that actual results during the period or periods
covered by the Projections may differ from such Projections and that the
differences may be material; provided, further, as of the Closing Date,
management of Holdings believed that the Projections were reasonable and
attainable.
4.9. NO MATERIAL ADVERSE CHANGE. As of the Closing Date, there has not
occurred any change or changes (or any condition, event, circumstance or
development involving a
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prospective change) since February 29, 2004 in the business (including a
material loss of business from an important customer), operations, affairs,
assets, liabilities (including any contingent liabilities that may arise through
outstanding, pending or threatened litigation or otherwise), capitalization,
results of operations, cash flows, condition (financial or otherwise), Licenses
(as defined in Schedule 3.1 to the Merger Agreement), rights or privileges of
the Acquired Business or any of its Subsidiaries which has materially and
adversely changed, or could reasonably be expected to materially and adversely
change, the Acquired Business and its Subsidiaries, taken as a whole, other than
any such change or changes which arose out of a matter that had been publicly
disclosed in writing by the Acquired Business prior to March 10, 2004 or
otherwise disclosed in the Disclosure Letter (as defined in the Merger
Agreement). As of each Credit Date after the Closing Date, since February 29,
2004, no event, circumstance or change has occurred that has caused or
evidences, or could reasonably be expected to have, either in any case or in the
aggregate, a Material Adverse Effect.
4.10. NO RESTRICTED JUNIOR PAYMENTS. Since February 29, 2004, neither
Holdings nor any of its Subsidiaries has directly or indirectly declared,
ordered, paid or made, or set apart any sum or property for, any Restricted
Junior Payment or agreed to do so except in connection with the Transactions (as
reflected in the Pro Forma Financial Statements), the dividend to Company's
public shareholders paid in calendar year 2004 prior to the Closing Date or as
permitted pursuant to Section 6.5 or Section 6.19.
4.11. ADVERSE PROCEEDINGS, ETC. There are no Adverse Proceedings,
individually or in the aggregate, that could reasonably be expected to have a
Material Adverse Effect. Neither Holdings nor any of its Subsidiaries (a) is in
violation of any applicable laws that, individually or in the aggregate, could
reasonably be expected to have a Material Adverse Effect, or (b) is subject to
or in default with respect to any final judgments, writs, injunctions, decrees,
rules or regulations of any court or any federal, state, municipal or other
governmental department, commission, board, bureau, agency or instrumentality,
domestic or foreign, that, individually or in the aggregate, could reasonably be
expected to have a Material Adverse Effect.
4.12. PAYMENT OF TAXES. Except as set forth on Schedule 4.12, all material
tax returns and reports of Holdings and its Subsidiaries required to be filed by
any of them have been timely filed, and all taxes shown on such tax returns to
be due and payable and all other material assessments, fees and other
governmental charges upon Holdings and its Subsidiaries and upon their
respective properties, assets, income, businesses and franchises which are due
and payable have been paid when due and payable. Holdings knows of no proposed
tax assessment against Holdings or any of its Subsidiaries other than
assessments for a Tax or claim which (i) is being actively contested by Holdings
or such Subsidiary in good faith and by appropriate proceedings and for which
adequate reserves or other appropriate provisions, if any, required in
conformity with GAAP have been made or provided therefor, (ii) in the case of a
Tax or claim which has or may become a Lien against any of the Collateral, such
contest proceedings conclusively operate to stay the sale of any portion of the
Collateral to satisfy such Tax or claim and (iii) could not, individually or in
the aggregate, reasonably be expected to have a Material Adverse Effect.
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4.13. PROPERTIES.
(a) Title. Each of Holdings and its Subsidiaries has (i) good,
sufficient and legal title to (in the case of fee interests in real property) or
good, valid and marketable title to (in the case of real property situated in
the Province of Quebec), (ii) valid leasehold interests in (in the case of
leasehold interests in real property situated outside of the Province of Quebec
or personal property), and (iii) good title to (in the case of all other
personal property), all of their respective properties and assets reflected in
the Historical Financial Statements and in the most recent financial statements
delivered pursuant to Section 5.1, in each case except for assets disposed of
since the date of such financial statements in the ordinary course of business
or as otherwise permitted under Section 6.9. As of the Closing Date, all such
properties and assets are free and clear of Liens except for the Permitted
Collateral Liens. After the Closing Date, all of such properties and assets are
free and clear of all Liens except as permitted by this Agreement.
(b) Real Estate. As of the Closing Date, Schedule 4.13 contains a
true, accurate and complete list of (i) all Material Real Estate Assets and
Closing Date Mortgaged Properties and (ii) all leases, subleases or assignments
of leases (together with all amendments, modifications, supplements, renewals or
extensions of any thereof) affecting each Material Real Estate Asset of any
Credit Party, regardless of whether such Credit Party is the landlord or tenant
(whether directly or as an assignee or successor in interest) under such lease,
sublease or assignment. To the knowledge of the Credit Parties, each agreement
listed in clause (ii) of the immediately preceding sentence is in full force and
effect and no Credit Party has knowledge of any default that has occurred and is
continuing thereunder that could reasonably be expected to have a Material
Adverse Effect, and each such agreement constitutes the legally valid and
binding obligation of each applicable Credit Party, enforceable against such
Credit Party in accordance with its terms, except as enforcement may be limited
by bankruptcy, insolvency, reorganization, moratorium or similar laws relating
to or limiting creditors' rights generally or by equitable principles.
4.14. ENVIRONMENTAL MATTERS. Neither Holdings nor any of its Subsidiaries
nor any of their respective Facilities or operations are subject to any
outstanding written order, consent decree or settlement or other agreement with
any Person relating to any Environmental Law, any Environmental Claim or any
Hazardous Materials Activity that, individually or in the aggregate, could
reasonably be expected to have a Material Adverse Effect. Neither Holdings nor
any of its Subsidiaries has received any notice of potential responsibility or
request for information under the Comprehensive Environmental Response,
Compensation, and Liability Act of 1980 (42 U.S.C. Section 9604) or any
comparable Environmental Law that individually or in the aggregate could
reasonably be expected to have a Material Adverse Effect. There are and, to each
of Holdings' and its Subsidiaries' knowledge, have been no conditions,
occurrences or Hazardous Materials Activities which could reasonably be expected
to form the basis of an Environmental Claim against Holdings or any of its
Subsidiaries that, individually or in the aggregate, could reasonably be
expected to have a Material Adverse Effect. The operations and Facilities of
Holdings and its Subsidiaries are in compliance with all applicable
Environmental Laws, except for any non-compliance which individually or in the
aggregate could not reasonably be expected to have a Material Adverse Effect. No
Lien has been recorded or registered pursuant to any Environmental Laws against
any of the Facilities or other assets of Holdings of any of its Subsidiaries.
Compliance with all current or reasonably foreseeable future requirements
105
pursuant to or under Environmental Laws could not be reasonably expected to
have, individually or in the aggregate, a Material Adverse Effect. No event or
condition has occurred or is occurring with respect to Holdings or any of its
Subsidiaries relating to any Environmental Law, any Release of Hazardous
Materials, or any Hazardous Materials Activity which individually or in the
aggregate has had, or could reasonably be expected to have, a Material Adverse
Effect.
4.15. NO DEFAULTS. Neither Holdings nor any of its Subsidiaries is in
default in the performance, observance or fulfillment of any of the obligations,
covenants or conditions contained in any of its Contractual Obligations, and no
condition exists which, with the giving of notice or the lapse of time or both,
could constitute such a default, except where the consequences, direct or
indirect, of such default or defaults, if any, could not reasonably be expected
to have a Material Adverse Effect.
4.16. MATERIAL CONTRACTS. Schedule 4.16 contains a true, correct and
complete list of all the Material Contracts in effect on the Closing Date, and
except as described thereon, all such Material Contracts are in full force and
effect and no defaults currently exist thereunder.
4.17. GOVERNMENTAL REGULATION. Neither Holdings nor any of its
Subsidiaries is subject to regulation under the U.S. Public Utility Holding
Company Act of 1935, the U.S. Federal Power Act or the U.S. Investment Company
Act of 1940 or under any other federal, state or provincial statute or
regulation in the United States or Canada which may render all or any portion of
the Obligations unenforceable. Neither Holdings nor any of its Subsidiaries is a
"registered investment company" or a company "controlled" by a "registered
investment company" or a "principal underwriter" of a "registered investment
company" as such terms are defined in the Investment Company Act of 1940.
4.18. MARGIN STOCK. Neither Holdings nor any of its Subsidiaries is
engaged principally, or as one of its important activities, in the business of
extending credit for the purpose of purchasing or carrying any Margin Stock. No
part of the proceeds of any Loan or any Letter of Credit will be used, whether
directly or indirectly, and whether immediately, incidentally or ultimately, for
any purpose that entails a violation of, or that is inconsistent with, the
provisions of the regulations of the Board of Governors of the Federal Reserve
System, including Regulation T, U or X. The pledge of Collateral constituting
Securities pursuant to the Collateral Documents does not violate such
regulations.
4.19. EMPLOYEE MATTERS. Neither Holdings nor any of its Subsidiaries is
engaged in any unfair labor practice that could reasonably be expected to have a
Material Adverse Effect. There is (a) no unfair labor practice or related
employer complaint or application for a declaration pending against Holdings or
any of its Subsidiaries, or to the best knowledge of the Credit Parties,
threatened against any of them before the National Labor Relations Board, the
Ontario Labour Relations Board or any similar board, tribunal or agency, and no
grievance or arbitration proceeding arising out of or under any collective
bargaining agreement pending against Holdings or any of its Subsidiaries or to
the best knowledge of the Credit Parties, threatened against any of them, in
each case, that could reasonably be expected to have a Material Adverse Effect,
(b) no strike or work stoppage in existence or threatened involving Holdings or
any of its Subsidiaries that could reasonably be expected to have a Material
Adverse Effect, and (c) to the best knowledge of the Credit Parties, no union
representation question
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existing with respect to the employees of Holdings or any of its Subsidiaries
and, to the best knowledge of the Credit Parties, no union organization activity
that is taking place, except, with respect to any matter specified in clause
(a), (b) or (c) above, either individually or in the aggregate, such as could
not reasonably be expected to have a Material Adverse Effect.
4.20. EMPLOYEE BENEFIT PLANS. Holdings, each of its Subsidiaries and each
of their respective ERISA Affiliates are in material compliance with all
applicable provisions and requirements of ERISA and the Internal Revenue Code
and the regulations and published interpretations thereunder with respect to
each U.S. Employee Benefit Plan, and have performed all material obligations
under each U.S. Employee Benefit Plan. Each U.S. Employee Benefit Plan which is
intended to qualify under Section 401(a) of the Internal Revenue Code has
received a favorable determination letter from the U.S. Internal Revenue Service
indicating that each such plan is so qualified and to the knowledge of Holdings
and each of its ERISA Affiliates, nothing has occurred subsequent to the
issuance of such determination letter which would cause such U.S. Employee
Benefit Plan to lose its qualified status. No material liability to the PBGC
(other than required premium payments), the U.S. Internal Revenue Service, any
U.S. Employee Benefit Plan or any trust established under Title IV of ERISA has
been or is expected to be incurred by Holdings, any of its Subsidiaries or any
of their ERISA Affiliates. No ERISA Event has occurred or is reasonably expected
to occur that could reasonably be expected to have a Material Adverse Effect.
Except to the extent required under Section 4980B of the Internal Revenue Code
or similar state laws, no U.S. Employee Benefit Plan provides health or welfare
benefits (through the purchase of insurance or otherwise) for any retired or
former employee of Holdings, any of its Subsidiaries or any of their respective
ERISA Affiliates. Each Canadian Employee Benefit Plan is and has been
established, registered, qualified, administered, funded and invested in all
material respects in accordance with the terms of such Canadian Employee Benefit
Plan, the terms of the material documents that support such Canadian Employee
Benefit Plan, any applicable collective agreement and all applicable laws. To
the knowledge of the Credit Parties, no event has occurred respecting any
Canadian Employee Benefit Plan which could result in the revocation of the
registration of such Canadian Employee Benefit Plan or entitle any person
(without consent of Holdings or Company) to wind up or terminate any Canadian
Employee Benefit Plan (in whole or in part) or which could otherwise reasonably
be expected to adversely affect the tax status of any Canadian Employee Benefit
Plan. None of the Canadian Employee Benefit Plans provide for benefit increases
or the acceleration of, or an increase in, funding obligations that are
contingent upon, or will be triggered by the completion of, the transactions
contemplated herein. There is no proceeding, action, suit or claim (other than
routine claim for payments of benefits) pending or threatened involving any
Canadian Employee Benefit Plan or its assets. The present value of the aggregate
benefit liabilities under each U.S. Pension Plan sponsored, maintained or
contributed to by Holdings, any of its Subsidiaries or any of their ERISA
Affiliates (determined as of the end of the most recent plan year on the basis
of the actuarial assumptions specified for funding purposes in the most recent
actuarial valuation for such U.S. Pension Plan), did not exceed the aggregate
current value of the assets of such U.S. Pension Plan in an amount that could
reasonably be expected to have a Material Adverse Effect. There are no material
unfunded liabilities in respect of any Canadian Pension Plan as at the date
hereof including going concern unfunded liabilities, solvency, deficiencies or
wind-up deficiencies, where applicable, and no Canadian Pension Plan Default
Event has occurred. Neither Holdings, any Subsidiary, or any ERISA Affiliate of
either, has (i) incurred a complete or partial withdrawal (within the meaning of
Section 4201 or 4203, respectively) from a U.S.
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Multiemployer Plan or (ii) reasonably expects to incur a complete or partial
withdrawal from a U.S. Multiemployer Plan that (in the case of (ii)) could
reasonably be expected to have a Material Adverse Effect. Holdings, each of its
Subsidiaries and each of their ERISA Affiliates have complied with the
requirements of Section 515 of ERISA with respect to each U.S. Multiemployer
Plan and are not in material "default" (as defined in Section 4219(c)(5) of
ERISA) with respect to payments to a U.S. Multiemployer Plan. None of the
Canadian Employee Benefit Plans is a Canadian Multiemployer Plan.
4.21. CERTAIN FEES. No broker's or finder's fee or commission will be
payable with respect hereto or any of the transactions contemplated hereby,
except as contemplated by the Commitment Letter and the Merger Agreement.
4.22. SOLVENCY. Each Credit Party is and, immediately following the
incurrence of any Obligation by such Credit Party on any date on which this
representation and warranty is made, will be, Solvent.
4.23. RELATED AGREEMENTS.
(a) Delivery. Holdings and Company have delivered to the Agents
complete and correct copies of (i) each Related Agreement and of all exhibits
and schedules thereto as of the date hereof and (ii) copies of any material
amendment, restatement, supplement or other modification to or waiver of each
Related Agreement entered into after the date hereof.
(b) Representations and Warranties. Except to the extent otherwise
expressly set forth herein or in the schedules hereto, and subject to the
qualifications set forth therein, each of the representations and warranties
given by any Credit Party in any Related Agreement is true and correct in all
material respects (and any such representations and warranties that contain a
materiality or Material Adverse Effect qualification shall be true and correct
in all respects) as of the Closing Date (or as of any earlier date to which such
representation and warranty specifically relates). Notwithstanding anything in
the Related Agreement to the contrary, the representations and warranties of
each Credit Party set forth in this Section 4.23 shall, solely for purposes
hereof, survive the Closing Date for the benefit of Lenders.
(c) Governmental Approvals. All material Governmental
Authorizations and all other material authorizations, approvals and consents of
any other Person required by the Related Agreements or to consummate the
Transactions have been obtained and are in full force and effect.
(d) Conditions Precedent. On the Closing Date, (i) all of the
conditions to effecting or consummating the Transactions set forth in the
Related Agreements (other than the Intercompany Debt Documents) have been duly
satisfied or, with the consent of the Agents, waived, and (ii) such Transactions
have been consummated in accordance with the Related Agreements and all material
applicable laws.
4.24. COMPLIANCE WITH STATUTES, ETC. Each of Holdings and its Subsidiaries
is in compliance with all applicable statutes, regulations and orders of, and
all applicable restrictions imposed by, all Governmental Authorities, in respect
of the conduct of its business and the ownership of its property (including
compliance with all applicable Environmental Laws with
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respect to any Real Estate Asset or governing its business and the requirements
of any Governmental Authorizations issued under such Environmental Laws with
respect to any such Real Estate Asset or the operations of Holdings or any of
its Subsidiaries), except such non-compliance that, individually or in the
aggregate, could not reasonably be expected to result in a Material Adverse
Effect.
4.25. DISCLOSURE. No representation or warranty of any Credit Party
contained in any Credit Document or in any other documents, certificates or
written statements furnished to Lenders by or on behalf of Holdings or any of
its Subsidiaries for use in connection with the transactions contemplated hereby
contains any untrue statement of a material fact or omits to state a material
fact (known to Holdings or Company, in the case of any document not furnished by
either of them) necessary in order to make the statements contained herein or
therein not materially misleading in the light of the circumstances in which the
same were made. Any projections and pro forma financial information contained in
such materials are based upon good faith estimates and assumptions believed by
Holdings or Company to be reasonable at the time made, it being recognized by
Lenders that such projections as to future events are not to be viewed as facts
and that actual results during the period or periods covered by any such
projections may differ from the projected results.
4.26. INTELLECTUAL PROPERTY.
(a) Ownership/No Claims. Each Credit Party owns, or is licensed to
use, all patents, patent applications, trademarks, trade names, service marks,
copyrights, technology, trade secrets, proprietary information, domain names,
know-how and processes necessary for the conduct of its business as currently
conducted (the "INTELLECTUAL PROPERTY"), except for those the failure to own or
license which, individually or in the aggregate, could not reasonably be
expected to result in a Material Adverse Effect. Except as set forth on Schedule
4.26, no claim has been asserted and is pending by any person challenging or
questioning the use of any such Intellectual Property or the validity or
effectiveness of any such Intellectual Property, nor does any Credit Party know
of any valid basis for any such claim. The use of such Intellectual Property by
each Credit Party does not infringe the rights of any person, except for such
claims and infringements that, individually or in the aggregate, could not
reasonably be expected to result in a Material Adverse Effect.
(b) Registrations. Except pursuant to licenses and other user
agreements entered into by each Credit Party in the ordinary course of business
that are listed in Schedules 14(a) and 14(b) to the Perfection Certificate, on
and as of the Closing Date (i) each Credit Party owns and possesses the right to
use, and has done nothing to authorize or enable any other person to use, any
copyright, patent or trademark listed in Schedules 14(a) and 14(b) to the
Perfection Certificate and (ii) all registrations listed in Schedules 14(a) and
14(b) to the Perfection Certificate are valid and in full force and effect.
(c) No Violations or Proceedings. To each Credit Party's
knowledge, on and as of the date hereof, there is no violation by others of any
right of such Credit Party with respect to any copyright, patent or trademark
listed in Schedules 14(a) and 14(b) to the Perfection Certificate pledged by it
under the name of such Credit Party except as could not reasonably be expected
to have a Material Adverse Effect.
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4.27. ANTI-TERRORISM LAW.
(a) Compliance with Law. No Credit Party and, to the knowledge of
the Credit Parties, none of its Affiliates is in violation of any laws relating
to terrorism or money laundering ("ANTI-TERRORISM LAWS"), including Executive
Order No. 13224 on Terrorist Financing, effective September 24, 2001 (the
"EXECUTIVE ORDER"), and the Uniting and Strengthening America by Providing
Appropriate Tools Required to Intercept and Obstruct Terrorism Act of 2001,
Public Law 107-56.
(b) Prohibited Lists. No Credit Party and to the knowledge of the
Credit Parties, no Affiliate of any Credit Party acting or benefiting in any
capacity in connection with the Loans is any of the following:
(i) a person that is listed in the annex to, or is otherwise
subject to the provisions of, the Executive Order;
(ii) a person owned or controlled by, or acting for or on
behalf of, any person that is listed in the annex to, or is
otherwise subject to the provisions of, the Executive Order;
(iii) a person with which any Lender is prohibited from
dealing or otherwise engaging in any transaction by any
Anti-Terrorism Law;
(iv) a person that commits, threatens or conspires to commit
or supports "terrorism" as defined in the Executive Order; or
(v) a person that is named as a "specially designated
national and blocked person" on the most current list published by
the U.S. Treasury Department Office of Foreign Assets Control
("OFAC") at its official website or any replacement website or other
replacement official publication of such list.
(c) Relationships. No Credit Party (i) conducts any business or
engages in making or receiving any contribution of funds, goods or services to
or for the benefit of any person described in paragraph (b) above, (ii) deals
in, or otherwise engages in any transaction relating to, any property or
interests in property blocked pursuant to the Executive Order, or (iii) engages
in or conspires to engage in any transaction that evades or avoids, or has the
purpose of evading or avoiding, or attempts to violate, any of the prohibitions
set forth in any Anti-Terrorism Law.
4.28. SUBORDINATION OF SENIOR SUBORDINATED NOTES. The Obligations and the
Guaranteed Obligations are "Senior Debt" and "Designated Senior Debt" within the
meaning of the Senior Subordinated Notes Indenture.
SECTION 5. AFFIRMATIVE COVENANTS
Each Credit Party covenants and agrees that so long as any Commitment is
in effect and until payment in full of all Obligations (other than contingent
Obligations that constitute indemnification obligations that survive termination
of this Agreement) and cancellation,
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collateralization in accordance with Section 2.5(n) or expiration of all Letters
of Credit, each Credit Party shall perform, and shall cause each of its
Subsidiaries to perform, all covenants in this Section 5.
5.1. FINANCIAL STATEMENTS AND OTHER REPORTS. Holdings, or Company, as
applicable, will deliver to Administrative Agent and Collateral Agent (and, upon
receipt thereof, Administrative Agent shall promptly furnish to the Lenders):
(a) Monthly Reports. As soon as available, and in any event within
40 days after the end of each month ending after the Closing Date, the
consolidated balance sheet of Holdings and its Subsidiaries as at the end
of such month and the related consolidated statements of income,
stockholders' equity and cash flows of Holdings and its Subsidiaries for
such month and for the period from the beginning of the then current
Fiscal Year to the end of such month, setting forth in each case in
comparative form the corresponding figures for the corresponding periods
of the previous Fiscal Year (commencing with the monthly financial
statements delivered for the calendar month ending March 31, 2005) and the
corresponding figures from the Financial Plan for the current Fiscal Year,
to the extent prepared on a monthly basis, all in reasonable detail,
together with a Financial Officer Certification;
(b) Quarterly Financial Statements. As soon as available, and in
any event within 45 days after the end of each of the first three Fiscal
Quarters of each Fiscal Year, the consolidated balance sheet of Holdings
and its Subsidiaries as at the end of such Fiscal Quarter and the related
consolidated statements of income, stockholders' equity and cash flows of
Holdings and its Subsidiaries for such Fiscal Quarter and for the period
from the beginning of the then current Fiscal Year to the end of such
Fiscal Quarter, setting forth in each case in comparative form the
corresponding figures for the corresponding periods of the previous Fiscal
Year (provided that figures from periods prior to the Closing Date may be
adjusted by Holdings from Canadian generally accepted accounting
principles) and the corresponding figures from the Financial Plan for the
current Fiscal Year, all in reasonable detail, together with a Financial
Officer Certification and a Narrative Report with respect thereto;
(c) Annual Financial Statements. As soon as available, and in any
event within 110 days after the end of each Fiscal Year, (i) the
consolidated balance sheet of Holdings and its Subsidiaries as at the end
of such Fiscal Year and the related consolidated statements of income,
stockholders' equity and cash flows of Holdings and its Subsidiaries for
such Fiscal Year, setting forth in comparative form the corresponding
figures for the previous Fiscal Year and the corresponding figures from
the Financial Plan for the current Fiscal Year, in reasonable detail,
together with a Financial Officer Certification and a Narrative Report
with respect thereto; and (ii) with respect to such consolidated financial
statements reports thereon of KPMG LLP or other independent certified
public accountants of recognized national standing selected by Holdings,
and reasonably satisfactory to Administrative Agent (which report shall be
unqualified as to going concern and scope of audit, and shall state that
such consolidated financial statements fairly present, in all material
respects, the consolidated financial position of Holdings and its
Subsidiaries as at the dates indicated and the results of their operations
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and their cash flows for the periods indicated in conformity with GAAP
applied on a basis consistent with prior years (except as otherwise
disclosed in such financial statements) and that the examination by such
accountants in connection with such consolidated financial statements has
been made in accordance with generally accepted auditing standards)
together with a written statement by such independent certified public
accountants stating (1) that their audit examination has included a review
of the terms of the Credit Documents and (2) whether, in connection
therewith, any condition or event that constitutes a Default or an Event
of Default has come to their attention and, if such a condition or event
has come to their attention, specifying the nature and period of existence
thereof, with respect to any covenants set forth in Section 6.8;
(d) Compliance Certificate. Together with each delivery of
financial statements pursuant to Sections 5.1(b) and 5.1(c), a duly
executed and completed Compliance Certificate;
(e) Statements of Reconciliation After Change in Accounting
Principles. If, as a result of any change in accounting principles and
policies from those used in the preparation of the Historical Financial
Statements, the consolidated financial statements delivered pursuant to
Section 5.1(b) or 5.1(c) will differ in any material respect from the
consolidated financial statements that would have been delivered pursuant
to such Sections had no such change in accounting principles and policies
been made, then, together with the first delivery of such financial
statements after such change, one or more statements describing such
change, and, if requested by Administrative Agent, reconciliation to the
prior financial statements, all in form and substance reasonably
satisfactory to Administrative Agent;
(f) Notice of Default. Promptly upon any Authorized Officer of any
Credit Party obtaining knowledge (i) of any condition or event that
constitutes a Default or an Event of Default or that notice has been given
to Holdings or any of its Subsidiaries with respect thereto; (ii) that any
Person has given any notice to Holdings or any of its Subsidiaries or
taken any other action with respect to any event or condition set forth in
Section 8.1(b); or (iii) of the occurrence of any event, condition or
change that has caused or evidences, or could reasonably be expected to
have, either in any case or in the aggregate, a Material Adverse Effect, a
certificate of its Authorized Officers specifying the nature and period of
existence of such condition, event or change, or specifying the notice
given and action taken by any such Person and the nature of such claimed
Event of Default, Default, default, event or condition, and what action
Company has taken, is taking and proposes to take with respect thereto;
(g) Notice of Litigation. Promptly upon any Authorized Officer of
any Credit Party obtaining knowledge of (i) the institution of, or
non-frivolous threat of, any Adverse Proceeding not previously disclosed
in writing by Company to Lenders, or (ii) any material development in any
Adverse Proceeding that, in the case of either (i) or (ii) if adversely
determined, could be reasonably expected to have a Material Adverse
Effect, or seeks to enjoin or otherwise prevent the consummation of, or to
recover any damages or obtain relief as a result of, the transactions
contemplated hereby, written notice thereof
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together with such other information as may be reasonably available to the
Credit Parties to enable Lenders and their counsel to evaluate such
matters;
(h) ERISA. (i) Promptly upon, and in any case within ten (10)
Business Days after becoming aware of the occurrence of or forthcoming
occurrence of any ERISA Event or a Canadian Pension Plan Default Event, a
written notice specifying the nature thereof, what action Holdings, any of
its Subsidiaries or any of their respective ERISA Affiliates has taken, is
taking or proposes to take with respect thereto and, when known, any
action taken or threatened by the U.S. Internal Revenue Service, Canada
Customs and Revenue Agency, the U.S. Department of Labor, the relevant
provincial pension regulator, the PBGC or the PBGF with respect thereto;
and (ii) with reasonable promptness, copies of (1) each Schedule B
(Actuarial Information) to the annual report (Form 5500 Series) and each
actuarial report filed by Holdings, any of its Subsidiaries or any of
their respective ERISA Affiliates with the U.S. Internal Revenue Service,
Canada Customs and Revenue Agency or the relevant provincial pension
regulator with respect to each Pension Plan; (2) all notices received by
Holdings, any of its Subsidiaries or any of their respective ERISA
Affiliates from a Multiemployer Plan sponsor concerning an ERISA Event;
and (3) copies of such other documents or governmental reports or filings
relating to any Employee Benefit Plan as Administrative Agent shall
reasonably request;
(i) Financial Plan. As soon as practicable and in any event no
later than thirty days after the beginning of each Fiscal Year, a
consolidated plan and financial forecast for such Fiscal Year (a
"FINANCIAL PLAN"), including (i) a forecasted consolidated balance sheet
and forecasted consolidated statements of income and cash flows of
Holdings and its Subsidiaries for such Fiscal Year and an explanation of
the assumptions on which such forecasts are based and (ii) forecasted
consolidated statements of income and cash flows of Holdings and its
Subsidiaries for each month of the upcoming Fiscal Year;
(j) Insurance Report. Not less frequently than once each Fiscal
Year, a report in form and substance satisfactory to Administrative Agent
outlining all material insurance coverage maintained as of the date of
such report by Holdings and its Subsidiaries and all material insurance
coverage planned to be maintained by Holdings and its Subsidiaries in the
immediately succeeding Fiscal Year;
(k) Notice Regarding Material Contracts. Promptly, and in any
event within ten Business Days, after any Material Contract of Holdings or
any of its Subsidiaries is terminated, expired or amended in a manner that
is materially adverse to Holdings or such Subsidiary, as the case may be a
written statement describing such event, with copies of such material
amendments, delivered to Administrative Agent (to the extent such delivery
is permitted by the terms of any such Material Contract, provided no such
prohibition on delivery shall be effective if it were bargained for by
Holdings or its applicable Subsidiary with the intent of avoiding
compliance with this Section 5.1(k)), and an explanation of any actions
being taken with respect thereto;
(l) Environmental Reports and Audits. As soon as practicable
following receipt thereof, copies of all environmental audits and reports
(whether generated internally or by a third party, including a
Governmental Authority) with respect to
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environmental matters at any Facility or which relate to any actual or
potential environmental liabilities of Holdings or its Subsidiaries which,
in any such case, individually or in the aggregate, could reasonably be
expected to result in a Material Adverse Effect; and
(m) Chief Executive Office; Change of Name; Jurisdiction of
Organization.
(i) The exact legal name, type of organization, jurisdiction
of organization, organizational identification number (if any) and
chief executive office of such Pledgor is indicated next to its name
in Schedule 1 or 2(a) of the Perfection Certificate, as applicable.
Such Pledgor shall not (a) change its corporate or other
organizational name, (b) establish any other location where non-real
property Collateral is maintained, (c) change its identity or type
of organization or corporate structure, (d) change its
organizational identification number (including, without limitation,
by merging with or into or amalgamating with any other entity,
reorganizing, dissolving, liquidating, reincorporating or
incorporating in any other jurisdiction) until (A) in the case of
clauses (a), (c) and (d), it shall have given Collateral Agent not
less than 15 days' prior written notice of its intention so to do,
clearly describing such change and providing such other information
in connection therewith as Collateral Agent may reasonably request,
and (B) with respect to such change, such Pledgor shall have taken
all action reasonably satisfactory to Collateral Agent to maintain
the perfection and priority of the security interest of Collateral
Agent for the benefit of the Secured Parties in the Collateral
intended to be granted hereby. Each Pledgor agrees to promptly
provide Collateral Agent with certified organizational documents
reflecting any of the changes described in the preceding sentence.
(ii) Each Pledgor agrees to maintain, at its own cost and
expense, such complete and accurate records with respect to the
Collateral owned by it as is necessary to generate financial
statements required hereunder, but in any event to include complete
accounting records as required by this Agreement, and, at such time
or times as Collateral Agent may reasonably request, promptly to
prepare and deliver to Collateral Agent a duly certified schedule or
schedules in form and detail reasonably satisfactory to Collateral
Agent showing in summary form the identity, amount and location of
any and all Collateral. In the event that any Pledgor or any of its
Subsidiaries keeps in the Province of Quebec any such records, such
Pledgor or Subsidiary shall, if requested by Collateral Agent, keep
on computer disks or tapes a duplicate of such records at a location
outside the Province of Quebec in a jurisdiction in which Collateral
Agent has confirmed that it has perfected security in such records.
(n) Annual Collateral Verification. Each year, at the time of
delivery of annual financial statements with respect to the preceding
Fiscal Year pursuant to Section 5.1(c), Company shall deliver to
Collateral Agent an Officer's Certificate either confirming that there has
been no change in such information since the date of the Perfection
Certificate delivered on the Closing Date or the date of the most recent
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certificate delivered pursuant to this Section and/or identifying such
changes through a Perfection Certificate Supplement.
(o) Other Information. (A) Promptly upon their becoming available,
copies of (i) all financial statements, reports, notices and proxy
statements sent or made available generally by MAAX Holdings to its
security holders acting in such capacity and (ii) all regular and periodic
reports and all registration statements and prospectuses, if any, filed by
any Parent Company or any of its Subsidiaries with any securities exchange
or with the Securities and Exchange Commission or other securities
commission or any governmental or private regulatory authority, and (B)
such other information and data with respect to any Parent Company or any
of its Subsidiaries as from time to time may be reasonably requested by
Administrative Agent, any Initial Agent or any Lender through
Administrative Agent.
5.2. EXISTENCE. Except as otherwise permitted under Section 6.9, each
Credit Party will, and will cause each of its Subsidiaries to, at all times
preserve and keep in full force and effect its existence and all rights and
franchises, licenses and permits material to its business; provided (x) no
Subsidiary of Holdings (other than Company) shall be required to preserve its
existence, and (y) no Credit Party or any of its Subsidiaries shall be required
to preserve any such right or franchise, licenses and permits if, in any case of
clause (x) or (y), such Person's Board of Directors shall determine that the
preservation thereof is no longer desirable in the conduct of the business of
such Person, and that the loss thereof is not disadvantageous in any material
respect to the Credit Parties and their Subsidiaries, taken as a whole, or to
Lenders.
5.3. PAYMENT OF TAXES AND CLAIMS. Each Credit Party will, and will cause
each of its Subsidiaries to, pay all material Taxes imposed upon it or any of
its properties or assets or in respect of any of its income, businesses or
franchises before any penalty or fine accrues thereon, and all claims (including
claims for labor, services, materials and supplies) for sums that have become
due and payable and that by law have or may become a Lien upon any of its
properties or assets, prior to the time when any penalty or fine shall be
incurred with respect thereto; provided no such Tax or claim need be paid if it
is being contested in good faith by appropriate proceedings promptly instituted
and diligently conducted, so long as (a) adequate reserve or other appropriate
provision, as shall be required in conformity with GAAP shall have been made
therefor, (b) in the case of a Tax or claim which has or may become a Lien
against any of the Collateral, such contest proceedings conclusively operate to
stay the sale of any portion of the Collateral to satisfy such Tax or claim and
(c) such Tax or claim could not, individually or in the aggregate, reasonably be
expected to have a Material Adverse Effect.
5.4. MAINTENANCE OF PROPERTIES. Each Credit Party will, and will cause
each of its Subsidiaries to, maintain or cause to be maintained, all material
properties used in the businesses of Holdings and its Subsidiaries in such
manner as is necessary to properly conduct such businesses.
5.5. INSURANCE. Holdings will maintain or cause to be maintained, with
financially sound and reputable insurers, such public liability insurance, third
party property damage insurance, business interruption insurance and casualty
insurance with respect to liabilities, losses or damage in respect of the
assets, properties and businesses of Holdings and its
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Subsidiaries as may customarily be carried or maintained under similar
circumstances by Persons engaged in similar businesses, in each case in such
amounts (giving effect to self-insurance), with such deductibles, covering such
risks and otherwise on such terms and conditions as shall be customary for such
Persons. Without limiting the generality of the foregoing, Holdings will
maintain or cause to be maintained (a) flood insurance with respect to each
Flood Hazard Property, if any, that is located in a community that participates
in the National Flood Insurance Program, in each case in compliance with any
applicable regulations of the Board of Governors of the Federal Reserve System,
and (b) replacement value casualty insurance on the Collateral under such
policies of insurance, with such insurance companies, in such amounts, with such
deductibles, and covering such risks as are at all times carried or maintained
under similar circumstances by Persons engaged in similar businesses. Each such
policy of insurance shall (i) name Collateral Agent, on behalf of Lenders as an
additional insured thereunder as its interests may appear and (ii) in the case
of each casualty insurance policy, contain a loss payable clause or endorsement,
reasonably satisfactory in form and substance to Collateral Agent, that names
Collateral Agent, on behalf of Lenders as the loss payee thereunder and provides
for at least thirty days' prior written notice to Collateral Agent of any
modification or cancellation of such policy.
5.6. INSPECTIONS. Each Credit Party will, and will cause each of its
Subsidiaries to, permit any authorized representatives designated by
Administrative Agent, Syndication Agent or any Lender to visit and inspect any
of the properties of any Credit Party and any of its respective Subsidiaries, to
inspect, copy and take extracts from its and their financial and accounting
records, and to discuss its and their affairs, finances and accounts with its
and their officers and independent public accountants, all upon reasonable
notice and at such reasonable times during normal business hours and as often as
may reasonably be requested; provided that (i) the Lenders shall be limited to
one visit per property per Fiscal Year (excluding any visits during an Event of
Default), (ii) all visits by Lenders shall be coordinated through Administrative
Agent and, other than visits during an Event of Default, shall be at the expense
of the applicable Lenders and (iii) management shall have the opportunity to be
present at discussions with independent public accountants.
5.7. LENDERS MEETINGS. Holdings and Company will, upon the request of
Administrative Agent or Requisite Lenders, participate in a meeting of
Administrative Agent and Lenders once during each Fiscal Year to be held at
Company's corporate offices (or at such other location as may be agreed to by
Company and Administrative Agent) at such time as may be agreed to by Company
and Administrative Agent.
5.8. COMPLIANCE WITH LAWS. Each Credit Party will comply, and shall cause
each of its Subsidiaries to comply, with the requirements of all applicable
laws, rules, regulations and orders of any Governmental Authority (including all
Environmental Laws), noncompliance with which could reasonably be expected to
have, individually or in the aggregate, a Material Adverse Effect.
5.9. ENVIRONMENTAL.
(a) Environmental Disclosure. Each Credit Party will deliver to
Administrative Agent:
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(i) within a reasonable time after receipt thereof, copies
of all environmental audits, investigations, analyses and reports of
any kind or character, whether prepared by personnel of Holdings or
any of its Subsidiaries or by independent consultants, Governmental
Authorities or any other Persons, with respect to actually or
potentially significant environmental matters related to past or
current operations at any Facility or with respect to any
Environmental Claims that could reasonably be expected to result in
a Material Adverse Effect;
(ii) within a reasonable time after the occurrence thereof,
written notice describing in reasonable detail (1) any Release
required to be reported to any Governmental Authority under any
Environmental Law that could reasonably be expected to result in
liabilities greater than U.S.$1.0 million, (2) any remedial action
taken by Holdings, any of its Subsidiaries or any other Person in
response to (A) any Hazardous Materials Activities the existence of
which has a reasonable possibility of resulting in one or more
Environmental Claims having, individually or in the aggregate, a
Material Adverse Effect, or (B) any Environmental Claims that,
individually or in the aggregate, have a reasonable possibility of
resulting in a Material Adverse Effect, and (3) any discovery by an
Authorized Officer of any Credit Party of any occurrence or
condition on any real property adjoining or in the vicinity of any
Facility that could reasonably be expected to cause such Facility or
any part thereof to be subject to any material restrictions on the
ownership, occupancy, transferability or use thereof under any
Environmental Laws;
(iii) within a reasonable time after the sending or receipt
thereof by Holdings or any of its Subsidiaries, a copy of any and
all written communications with respect to (1) any Environmental
Claims that, individually or in the aggregate, have a reasonable
possibility of giving rise to a Material Adverse Effect, (2) any
Release required to be reported to any Governmental Authority under
any Environmental Law that could reasonably be expected to result in
liabilities greater than U.S.$1.0 million, and (3) any request for
information from any Governmental Authority that suggests it is
investigating or conducting an inspection to determine whether
Holdings or any of its Subsidiaries may be potentially responsible
for any Hazardous Materials Activity that could reasonably be
expected to have a Material Adverse Effect;
(iv) prompt written notice describing in reasonable detail
(1) any proposed acquisition of stock, assets, or property by
Holdings or any of its Subsidiaries that could reasonably be
expected to (A) expose Holdings or any of its Subsidiaries to, or
result in, Environmental Claims that could reasonably be expected to
have, individually or in the aggregate, a Material Adverse Effect or
(B) affect the ability of Holdings or any of its Subsidiaries to
maintain in full force and effect all material Governmental
Authorizations required under any Environmental Laws for their
respective operations and (2) any proposed action to be taken by
Holdings or any of its Subsidiaries to modify current operations in
a manner that could reasonably be expected to subject Holdings or
any of its Subsidiaries to any additional obligations or
requirements under any
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Environmental Laws that could reasonably be expected to have a
Material Adverse Effect; and
(v) with reasonable promptness, such other documents and
information as from time to time may be reasonably requested by
Administrative Agent in relation to any matters disclosed pursuant
to this Section 5.9(a).
(b) Hazardous Materials Activities, Etc. Each Credit Party shall
promptly take, and shall cause each of its Subsidiaries promptly to take, any
and all actions necessary to (i) cure any violation of Environmental Laws by
such Credit Party or its Subsidiaries that could reasonably be expected to have,
individually or in the aggregate, a Material Adverse Effect, and (ii) make an
appropriate response to any Environmental Claim against such Credit Party or any
of its Subsidiaries and discharge any obligations it may have to any Person
thereunder where failure to do so could reasonably be expected to have,
individually or in the aggregate, a Material Adverse Effect.
(c) Failure of Environmental Compliance. If an Event of Default
caused by reason of a breach of Section 4.14 or Section 5.9(a) or 5.9(b) shall
have occurred and be continuing for more than 30 days without the applicable
Credit Parties commencing activities reasonably likely to cure such Event of
Default, Company shall, at the written request of Administrative Agent, provide
to Administrative Agent as soon as practicable after such request, at the
expense of the Credit Parties, an environmental assessment report regarding the
matters which are the subject of such Event of Default, including, where
appropriate, any soil and/or groundwater sampling, prepared by a reputable
environmental consulting firm and, in the form and substance, reasonably
acceptable to Administrative Agent and indicating the presence or absence of
Hazardous Materials and the estimated cost of any compliance or Response to
address them.
5.10. SUBSIDIARIES.
(a) In the event that any Person becomes a wholly-owned Domestic
Subsidiary of Holdings, Holdings shall (a) promptly cause such Domestic
Subsidiary to become a Guarantor hereunder and a Pledgor under the Security
Agreements by executing and delivering to Administrative Agent and Collateral
Agent a Counterpart Agreement, and (b) take all such actions and execute and
deliver, or cause to be executed and delivered, all such documents, instruments,
agreements, and certificates as are similar to those described in Sections
3.1(b), 3.1(g), 3.1(h) and 3.1(j). In the event that any Person becomes a
Foreign Subsidiary of Holdings, and the ownership interests of such Foreign
Subsidiary are owned by Holdings or by any Domestic Subsidiary thereof, Holdings
shall, or shall cause such Domestic Subsidiary to, deliver all such documents,
instruments, agreements and certificates as are similar to those described in
Section 3.1(b), and Holdings shall take, or shall cause such Domestic Subsidiary
to take, all of the actions referred to in Section 3.1(h)(i) necessary to grant
and to perfect a First Priority Lien in favor of Collateral Agent, for the
benefit of Secured Parties, under the applicable Security Agreement in 65% of
such ownership interests. With respect to each such Subsidiary, Holdings shall
promptly send to Administrative Agent written notice setting forth with respect
to such Person (i) the date on which such Person became a Subsidiary of
Holdings, and (ii) all of the data required to be set forth in Schedules 4.1 and
4.2 with respect to all Subsidiaries of Holdings;
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provided such written notice shall be deemed to supplement Schedules 4.1 and 4.2
for all purposes hereof.
(b) Subject to this Section 5.10, with respect to any property
(other than any Real Estate Asset) acquired after the Closing Date by any Credit
Party that is intended to be subject to the Lien created by any of the
Collateral Documents but is not so subject, promptly (and in any event within 60
days after the acquisition thereof) (i) execute and deliver to Administrative
Agent and Collateral Agent such amendments or supplements to the relevant
Collateral Documents or such other documents as Administrative Agent or
Collateral Agent shall deem necessary or advisable to grant to Collateral Agent,
for the benefit of the Secured Parties, a Lien on such property subject to no
Liens other than Permitted Liens, and (ii) take all actions necessary to cause
such Lien to be duly perfected to the extent required by such Security Document
in accordance with all applicable requirements of law, including the filing of
financing statements in such jurisdictions as may be reasonably requested by
Administrative Agent. Company shall otherwise take such actions and execute
and/or deliver to Collateral Agent such documents as Administrative Agent or
Collateral Agent shall require to confirm the validity, perfection and priority
of the Lien of the Collateral Documents against such after-acquired properties.
(c) At its sole discretion, Company shall have the ability to
cause any of its Subsidiaries that is not a Guarantor and that does not
otherwise need to be made a Guarantor pursuant to this Section 5.10 to become a
Guarantor hereunder and a Pledgor under the Security Agreements.
5.11. ADDITIONAL REAL ESTATE ASSETS.
(a) In the event that (i) any Credit Party acquires a Material
Real Estate Asset or (ii) any Real Estate Asset owned by any Credit Party
becomes a Material Real Estate Asset, and such interest has not otherwise been
made subject to the Lien of the Collateral Documents in favor of Collateral
Agent, for the benefit of Secured Parties, then such Credit Party, within 30
days (or such later date as is acceptable to Administrative Agent) after the
date of such acquisition or the date on which such Real Estate Asset becomes a
Material Real Estate Asset, shall take all such actions and execute and deliver,
or cause to be executed and delivered, all such mortgages, documents,
instruments, agreements, opinions and certificates similar to those described in
Sections 3.1(g) and (j) with respect to each such Material Real Estate Asset
that Collateral Agent shall reasonably request to create in favor of Collateral
Agent, for the benefit of Secured Parties, a valid and, subject to any filing
and/or recording and/or registration referred to herein, perfected First
Priority security interest in such Material Real Estate Assets, subject to no
Liens other than the Permitted Collateral Liens; provided that (x) in no event
shall any Credit Party be required to determine whether a Real Estate Asset is a
Material Real Estate Asset other than at the time of acquisition thereof or at
the time of delivery of an Officer's Certificate pursuant to Section 5.1(n) and
(y) the use of current insurance company valuations with respect to the
replacement value of a Real Estate Asset that are believed in good faith by a
Credit Party to be reasonable shall be conclusive as to the fair market value of
such asset.
(b) At all times, Collateral Agent shall have, for the benefit of
the Secured Parties, (x) a Mortgage Lien on or (y) with respect to Leasehold
Properties, a Landlord Personal
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Property Collateral Access Agreement with respect to, Real Estate Assets where
at least 50% of the book value of the total consolidated inventory of Holdings
and its Subsidiaries is located; provided that in no event shall Company be
required to determine whether the foregoing requirement is met other than at the
time of delivery of an Officer's Certificate pursuant to Section 5.1(n). In the
event that the foregoing requirement is not met, the Credit Parties shall take
all such actions and execute and deliver, or cause to be executed and delivered,
all such mortgages, documents, instruments, agreements, opinions and
certificates similar to those described in Sections 3.1(g), (h) and (j) to the
extent applicable, that Collateral Agent shall reasonably request and, if such
requirement is to be met by the delivery of a mortgage or similar document,
necessary to create in favor of Collateral Agent, for the benefit of Secured
Parties, a valid and, subject to any filing and/or recording referred to herein,
perfected First Priority Mortgage Lien on any such Real Estate Asset.
5.12. INTEREST RATE PROTECTION. No later than 60 days following the
Closing Date and at all times thereafter, Company shall maintain, or caused to
be maintained, in effect one or more Interest Rate Agreements for a term of not
less than 3 years and otherwise in form and substance reasonably satisfactory to
the Agents, which Interest Rate Agreements shall contain terms and conditions
that result in at least 50% of the aggregate principal amount of Consolidated
Total Debt outstanding at the Closing Date being effectively subject to a fixed
or maximum interest rate acceptable to the Agents.
5.13. FURTHER ASSURANCES. At any time or from time to time upon the
request of Administrative Agent, each Credit Party will, at its expense,
promptly execute, acknowledge and deliver such further documents and do such
other acts and things as Administrative Agent or Collateral Agent may reasonably
request in order to effect fully the purposes of the Credit Documents. In
furtherance and not in limitation of the foregoing, each Credit Party shall take
such actions as Administrative Agent or Collateral Agent may reasonably request
from time to time to ensure that the Obligations are guarantied by the
Guarantors and are secured by substantially all of the assets of Holdings, its
Subsidiaries and all of the outstanding Capital Stock of Company and its
Subsidiaries (subject to limitations contained in the Credit Documents with
respect to Foreign Subsidiaries).
5.14. LEASEHOLD PROPERTIES.
(a) For sixty days after the Closing Date, the Credit Parties
shall use commercially reasonable efforts to obtain Landlord Personal Property
Collateral Access Agreements with respect to the Keystone Properties.
(b) The Credit Parties shall use commercially reasonable efforts
to obtain Landlord Personal Property Collateral Access Agreements with respect
to (i) the BAL Properties at any time when any such property's lease comes up
for renewal and (ii) any Leasehold Properties acquired after the Closing Date
where more than Can$1.0 million of inventory is reasonably expected to be held;
provided that the amount of such inventory need only be calculated at the
signing of any such lease and at the date of delivery of an Officer's
Certificate pursuant to Section 5.1(n). Notwithstanding the foregoing, the
Credit Parties need not comply with Section 5.14(b)(ii) as long as the covenant
in Section 5.11(b) would be satisfied if such covenant contained a 75%
requirement instead of a 50% requirement.
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(c) If the real property located at 640 Route Cameron, Ste-Marie,
Quebec, G6E 1B2, is still owned by a Credit Party eighteen months after the
Closing Date, then at such time the applicable Credit Party shall grant to
Collateral Agent for the benefit of the Secured Parties a First Priority
Mortgage Lien on such real property and shall take or cause actions necessary to
execute and deliver to Collateral Agent items similar to those described in
Section 3.1(g) or (j) to the extent applicable.
5.15. POST-CLOSING OBLIGATIONS.
(a) Company shall, and shall cause Canadian Holding Company to:
(i) forward to Collateral Agent and its counsel promptly
upon receipt any responses which are received in respect of any
off-title searches relating to the Closing Date Mortgaged Properties
located in Canada (the "OFF-TITLE SEARCHES") for which responses
have not been received as of the Closing Date as identified in the
off-title search reports attached as a schedule to the title
opinions for such properties delivered under Section 3.1(g)(ii);
(ii) take such actions as Collateral Agent may reasonably
require to resolve, to the satisfaction of Collateral Agent, acting
reasonably, any outstanding issues that are revealed by the
Off-Title Searches, including those issues, if any, identified in
the off-title search reports attached as a schedule to the title
opinions delivered under Section 3.1(g)(ii) for the Closing Date
Mortgaged Properties located in Canada or in any response received
subsequent to the Closing Date in respect of any Off-Title Searches
for which a response had not been received by the Closing Date; and
(iii) register a discharge of Easement KM17568 from title to
the Closing Date Mortgaged Property located at 4225 Spallumcheen
Drive, Armstrong, British Columbia and provide evidence thereof to
Collateral Agent and its counsel as soon as possible and in any
event within 30 days after the Closing Date.
(b) The applicable Credit Party shall obtain and deliver to
Collateral Agent, within ten (10) Business Days after the Closing Date, unless
waived or extended by Collateral Agent in its sole discretion (x) a survey for
the Closing Date Mortgaged Properties located at 1001 North Oak Road, Plymouth,
Indiana and 2011 Mid Atlantic Parkway, Martinsburg, West Virginia and (y) such
affidavits or other documents requested by the title company, each in form and
substance suitable to the title company to induce it to remove the standard
survey exceptions from the Title Policy and issue survey related endorsements.
(c) The applicable Credit Party shall obtain, file of record with
the applicable recording office and provide proof of filing to Collateral Agent,
within thirty (30) days after the Closing Date, unless waived or extended by
Collateral Agent in its sole discretion, a satisfaction of that certain Deed of
Trust, Assignment of Rents and Security Agreement dated April 3, 1998, between
Maax-Hydro Swirl Manufacturing Corp. and Maax, Inc., recorded on April 8, 1998
in the real estate records of Whatcom County Washington under document number
1980400639,
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and UCC-3 terminations of the filings made in Lowndes County Georgia at Deed
Book 1247 Page 31, Deed Book 1260 Page 360, Deed Book 1544 Page 022, Deed Book
1636 Page 336 and Deed Book 1636 Page 340.
SECTION 6. NEGATIVE COVENANTS
Each Credit Party covenants and agrees that, so long as any Commitment is
in effect and until payment in full of all Obligations (other than contingent
Obligations that constitute indemnification obligations that survive termination
of this Agreement) and cancellation, collateralization in accordance with
Section 2.5(n) or expiration of all Letters of Credit, such Credit Party shall
perform, and shall cause each of its Subsidiaries to perform, all covenants in
this Section 6.
Each Parent Company (other than Holdings) covenants and agrees that, so
long as any Commitment is in effect and until payment in full of all Obligations
(other than contingent Obligations that constitute indemnification obligations
that survive termination of this Agreement) and cancellation, collateralization
in accordance with Section 2.5(n) or expiration of all Letters of Credit, such
Parent Company shall comply with the terms and provisions of Section 6.12.
6.1. INDEBTEDNESS. No Credit Party shall, nor shall it permit any of its
Subsidiaries to, directly or indirectly, create, incur, assume or guaranty, or
otherwise become or remain directly or indirectly liable with respect to any
Indebtedness or issue any Preferred Stock, except:
(a) the Obligations;
(b) Indebtedness or Preferred Stock permitted by Sections 6.7(b),
(d) or (h);
(c) (i) the Senior Subordinated Notes issued on the Closing Date
and senior subordinated guarantees thereof by the Guarantors and
additional Senior Subordinated Notes issued after the Closing Date
under the Senior Subordinated Notes Indenture and senior
subordinated guarantees thereof by the Guarantors,
(ii) Senior Subordinated Notes issued by Company and senior
subordinated guarantees issued by the Guarantors in exchange for
Senior Subordinated Notes issued in a private placement and
guarantees referenced in clause (i) pursuant to an "A/B" exchange
offer; and
(iii) so long as no Event of Default is continuing, Permitted
Refinancing Indebtedness in respect of Indebtedness permitted by
clause (i) or (ii) above;
(d) Indebtedness or Preferred Stock incurred by Company or any of
its Subsidiaries consisting of guarantees, earn-outs, indemnities or
obligations in respect of purchase price adjustments in connection with
the disposition of assets, including, without limitation, shares of
Capital Stock; provided that the maximum aggregate liability in respect of
all such obligations outstanding under this clause (d) shall at no
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time exceed the gross proceeds actually received by Company and its
Subsidiaries in connection with such disposition;
(e) Indebtedness in respect of workers' compensation claims,
self-insurance obligations, bankers' acceptances, bids, performance,
completion, appeal and surety bonds or guarantees, and similar types of
obligations in the ordinary course of business;
(f) Indebtedness arising from the honoring by a bank or other
financial institution of a check, draft or similar instrument
inadvertently drawn against insufficient funds, so long as such
Indebtedness is covered within five business days;
(g) guaranties by Company of Indebtedness of a Guarantor
Subsidiary or guaranties by a Subsidiary of Company of Indebtedness of
Company or a Guarantor Subsidiary, in each case, with respect to
Indebtedness otherwise permitted to be incurred pursuant to this Section
6.1;
(h) Indebtedness described in Schedule 6.1, but not any
extensions, renewals or replacements of such Indebtedness except (i)
renewals and extensions expressly provided for in the agreements
evidencing any such Indebtedness as the same are in effect on the date of
this Agreement and (ii) Permitted Refinancing Indebtedness in respect
thereof;
(i) Indebtedness with respect to Capital Leases, mortgage
financings or purchase money obligations, in each case, incurred for the
purpose of financing all or any part of the purchase price or cost of
design, construction, installation or improvement of property, plant or
equipment used or useful in the business of Company or any of its
Subsidiaries, and refinancings thereof, in an aggregate amount not to
exceed U.S.$10.0 million at any time outstanding;
(j) liabilities under factoring agreements the sales of accounts
receivable pursuant to which are permitted by Section 6.9(j), to the
extent required to be reflected as Indebtedness in accordance with GAAP;
(k) liabilities under Hedge Agreements;
(l) Holdings may issue Qualified Capital Stock; and
(m) other Indebtedness or Preferred Stock of Holdings and its
Subsidiaries, in an aggregate amount not to exceed U.S.$20.0 million at
any time outstanding.
6.2. LIENS. No Credit Party shall, nor shall it permit any of its
Subsidiaries to, directly or indirectly, create, incur, assume or permit to
exist any Lien on or with respect to any property or asset of any kind
(including any document or instrument in respect of goods or accounts
receivable) of Holdings or any of its Subsidiaries, whether now owned or
hereafter acquired, or any income or profits therefrom, or file or authorize the
filing of, or authorize to remain in effect, any financing statement or other
similar notice of any Lien with respect to any such property, asset, income or
profits under the UCC of any State, the PPSA of any Province or under any
similar recording or notice statute, except:
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(a) Liens in favor of Collateral Agent for the benefit of Secured
Parties granted pursuant to any Credit Document;
(b) Liens for Taxes if not yet due or if obligations with respect
to such Taxes are being contested in good faith by appropriate proceedings
promptly instituted and diligently conducted (which proceedings contesting
such Liens shall have the effect of staying the sale or forfeiture of any
portion of the Collateral on account of such Liens), so long as reserves
or other appropriate provisions, if any, as shall be required by GAAP
shall have been made for any such contested amounts;
(c) statutory Liens of landlords, of carriers, warehousemen,
mechanics, repairmen, suppliers, workmen and materialmen, and other Liens
imposed by law (other than any such Lien imposed pursuant to Section
401(a)(29) or 412(n) of the Internal Revenue Code or by ERISA), in each
case incurred in the ordinary course of business (i) for amounts not yet
overdue or (ii) for amounts that are delinquent and that (in the case of
any such amounts delinquent for a period in excess of five days) are being
contested in good faith by appropriate proceedings (which proceedings
contesting such Liens shall have the effect of staying the sale or
forfeiture of any portion of the Collateral on account of such Liens), so
long as such reserves or other appropriate provisions, if any, as shall be
required by GAAP shall have been made for any such contested amounts;
(d) Liens incurred in the ordinary course of business in
connection with workers' compensation, unemployment insurance, vacation
pay and other types of social security, or to secure the performance of
tenders, statutory obligations, completion, surety and appeal bonds, bids,
leases, government contracts, trade contracts, performance and
return-of-money bonds and other similar obligations (exclusive of
obligations for the payment of borrowed money or other Indebtedness), so
long as no foreclosure, sale or similar proceedings have been commenced on
account thereof (i) with respect to any Real Estate Asset or (ii) that
could reasonably be expected to result in a Material Adverse Effect;
(e) easements, rights-of-way, restrictions, encroachments, and
other minor defects or irregularities in title, in each case which do not
and will not interfere in any material respect with the ordinary conduct
of the businesses of Holdings and its Subsidiaries at the property
affected thereby;
(f) any interest or title of a lessor or sublessor under any lease
of real estate or personal property permitted hereunder entered into in
the ordinary course of business; provided, however, with respect to any
properties acquired by a Credit Party after the Closing Date which are
mortgaged under Section 5.11, and which are encumbered by existing
Lease(s) on the date of such acquisition, such Lease(s) shall be Permitted
Liens and Permitted Collateral Liens so long as (i) such Lease(s) are
subordinate by their terms to the Mortgage with respect to such Real
Estate Asset, or (ii) the applicable Credit Party obtains a subordination,
non-disturbance and attornment agreement from each tenant thereunder in
form and substance reasonably satisfactory to Collateral Agent or (iii)
the applicable Credit Party is unable to obtain such subordination,
non-disturbance and
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attornment agreement despite its commercially reasonable efforts to do so
and the Lease is otherwise reasonably satisfactory to Collateral Agent;
(g) Liens solely on any cash earnest money deposits made by
Holdings or any of its Subsidiaries in connection with any letter of
intent or purchase agreement permitted hereunder;
(h) purported Liens evidenced by the filing of precautionary UCC
or PPSA financing statements relating solely to operating leases of
personal property entered into in the ordinary course of business;
(i) Liens in favor of customs and revenue authorities arising as a
matter of law to secure payment of customs duties in connection with the
importation of goods;
(j) any zoning or similar law or right reserved to or vested in
any governmental office or agency to control or regulate the use of any
real property;
(k) licenses of patents, trademarks and other intellectual
property rights granted by Company or any of its Subsidiaries in the
ordinary course of business and not interfering in any respect with the
ordinary conduct of the business of Holdings and its Subsidiaries taken as
a whole;
(l) Liens described in Schedule 6.2 or on a Title Policy delivered
pursuant to Section 3.1(g)(ii);
(m) Liens securing Indebtedness permitted pursuant to 6.1(i);
provided any such Lien shall encumber only the asset acquired with the
proceeds of such Indebtedness;
(n) Liens on accounts receivable subject to sales permitted
pursuant to Section 6.9(j);
(o) Liens deemed to exist in connection with Investments in
repurchase agreements permitted under Section 6.7(a);
(p) bankers' Liens, rights of set-off and other similar Liens
existing solely with respect to cash and Cash Equivalents on deposit in
one or more accounts maintained by Company or any of its Subsidiaries, in
each case granted in the ordinary course of business in favor of the bank
or banks with which such accounts are maintained, securing amounts owing
to such bank with respect to cash management and operating account
arrangements, including those involving pooled accounts and netting
arrangements; provided that, unless such Liens are non-consensual and
arise by operation of law, in no case shall any such Liens secure (either
directly or indirectly) the repayment of any Indebtedness;
(q) Liens arising out of conditional sale, title retention,
consignment or similar arrangements for the sale of goods entered into by
Company or any of its Subsidiaries in the ordinary course of business in
accordance with the past practices of such entity;
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(r) judgment Liens not giving rise to an Event of Default;
(s) consensual Liens in the Province of Quebec securing the
payment of rent and other amounts customarily owed to a landlord under
leases of real property in the Province of Quebec; and
(t) Liens not otherwise permitted under this Section 6.2; provided
that the aggregate amount of all obligations secured thereby does not
exceed U.S.$5.0 million at any time outstanding.
6.3. EQUITABLE LIEN. If any Credit Party or any of its Subsidiaries shall
create or assume any Lien upon any of its properties or assets, whether now
owned or hereafter acquired, other than Permitted Liens, it shall make or cause
to be made effective provisions whereby the Obligations will be secured by such
Lien equally and ratably with any and all other Indebtedness secured thereby as
long as any such Indebtedness shall be so secured; provided, notwithstanding the
foregoing, this covenant shall not be construed as a consent by Requisite
Lenders to the creation or assumption of any such Lien not otherwise permitted
hereby.
6.4. NO FURTHER NEGATIVE PLEDGES. No Credit Party nor any of its
Subsidiaries shall enter into any agreement prohibiting the creation or
assumption of any Lien upon any of its properties or assets, whether now owned
or hereafter acquired, except with respect to (a) specific property encumbered
to secure payment of particular Indebtedness or to be sold pursuant to an
executed agreement with respect to a permitted Asset Sale, (b) restrictions by
reason of customary provisions restricting assignments, subletting or other
transfers contained in leases, licenses and similar agreements entered into in
the ordinary course of business (provided that such restrictions are limited to
the property or assets secured by such Liens or the property or assets subject
to such leases, licenses or similar agreements, as the case may be), (c)
restrictions by reason of any Permitted Lien or any document or instrument
governing any Permitted Lien, provided that any such restriction contained
therein relates only to the asset or assets subject to such Permitted Lien and
(d) restrictions under the Credit Documents and the Senior Subordinated Notes
Indenture.
6.5. RESTRICTED JUNIOR PAYMENTS. No Credit Party shall, nor shall it
permit any of its Subsidiaries through any manner or means or through any other
Person to, directly or indirectly, declare, order, pay, make or set apart, or
agree to declare, order, pay, make or set apart, any sum for any Restricted
Junior Payment, except
(a) Company may make regularly scheduled payments of interest in
respect of the Senior Subordinated Notes or any other Subordinated
Indebtedness in accordance with the terms of, and only to the extent
required by, and subject to the subordination provisions contained in, the
Senior Subordinated Notes Indenture, in the case of the Senior
Subordinated Notes, and the indenture or other agreement pursuant to which
such Subordinated Indebtedness was issued, in the case of any other
Subordinated Indebtedness;
(b) dividends or distributions payable to Company or any Guarantor
Subsidiary or to all holders (other than any Parent Company that is not a
Guarantor) of
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Capital Stock of a Subsidiary on a pro rata basis, taking into account the
relative preferences, if any, of the various classes of equity interests
in each Subsidiary; provided that any dividends or distributions to any
Parent Company pursuant to this clause shall only be allowed to the extent
such Parent Company immediately contributes such dividend or distribution
as common equity to Company or the Subsidiary that made the dividend or
distribution;
(c) any dividend, payment or distribution to occur as part of the
Transactions on the Closing Date in connection with the amalgamation under
the Merger Agreement;
(d) Company may make Restricted Junior Payments to or on behalf of
any Parent Company in an amount sufficient to pay out-of-pocket legal,
accounting and filing and other general corporate overhead costs of such
Parent Company actually incurred by such Parent Company and franchise
taxes and other fees required to maintain its existence, in any case in an
aggregate amount not to exceed U.S.$2.0 million in any calendar year;
(e) so long as no Default or Event of Default exists, the
repurchase, redemption or other acquisition or retirement for value of any
Capital Stock of Company or any Guarantor Subsidiary, or payments by
Company to any Parent Company to permit, and which are used by, any Parent
Company to repurchase, redeem or otherwise acquire or retire for value any
Capital Stock of any Parent Company, in each case, held by any current or
former officer, director, consultant or employee of Company or any
Guarantor Subsidiary (or permitted transferees, assigns, estates or heirs
of the foregoing); provided that the aggregate price paid for all Capital
Stock repurchased, redeemed, acquired or retired pursuant to this clause
(e), net of proceeds received by or contributed to Company and Guarantor
Subsidiaries from sales or resales of any Capital Stock purchased pursuant
to this clause (e) and net of repayment of loans related to such Capital
Stock made by a Credit Party pursuant to Section 6.7(f) and repaid in
connection with such repurchase, redemption, acquisition or retirement,
shall not exceed U.S.$2.5 million in any calendar year, with unused
amounts being carried over for availability in the following calendar
year, but not in any calendar year thereafter, and with the amount
expended in any calendar year first being deemed to come from the amount
allocated to such calendar year before giving effect to any carryover;
(f) to the extent that Company or one or more of its Subsidiaries
are members of a consolidated, combined or similar income tax group of
which a direct or indirect parent of Company is the common parent, Company
and its Subsidiaries may make Restricted Junior Payments pursuant to a tax
sharing agreement or otherwise to the extent necessary to pay, and which
are used to pay, any income taxes of such tax group that are attributable
to Company and/or its Subsidiaries (including, for the avoidance of doubt,
any U.S. income taxes (net of applicable foreign tax credits) imposed on a
direct or indirect parent of Company pursuant to Section 951 of the
Internal Revenue Code, as amended (or any comparable provision of any
state or local law), that is attributable to the ownership of stock of a
Subsidiary by Company or any direct or indirect parent of Company
("SECTION 951 TAXES")) and are not payable directly by Company and/or its
Subsidiaries; provided that the amount of any such dividends or
distributions (plus any
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such taxes payable directly by Company and/or its Subsidiaries) shall not
exceed the amount of such taxes that would have been payable directly by
Company and/or its Subsidiaries had Company been the U.S. common parent of
a separate tax group that included only Company and its Subsidiaries and
assuming that all the stock of any Subsidiary that gives rise to Section
951 Taxes was owned by Company (and not partly by any direct or indirect
parent of Company); and
(g) Company may prepay, defease, redeem, repurchase or otherwise
acquire or retire for value any Subordinated Indebtedness with the
proceeds received from any contribution to its common equity capital
financed by the substantially concurrent issue and sale of Qualified
Capital Stock by any Parent Company which is not required to be applied
pursuant to Section 2.16(c).
6.6. RESTRICTIONS ON SUBSIDIARY DISTRIBUTIONS. Except as provided herein,
in the other Credit Documents and in the Senior Subordinated Note Indenture, no
Credit Party shall, nor shall it permit any of its Subsidiaries to, create or
otherwise cause or suffer to exist or become effective any consensual
encumbrance or restriction of any kind on the ability of any Subsidiary of
Company to (a) pay dividends or make any other distributions on any of such
Subsidiary's Capital Stock owned by Company or any other Subsidiary of Company,
(b) repay or prepay any Indebtedness owed by such Subsidiary to Company or any
other Subsidiary of Company, (c) make loans or advances to Company or any other
Subsidiary of Company, or (d) transfer any of its property or assets to Company
or any other Subsidiary of Company other than restrictions (i) in agreements
evidencing Indebtedness permitted by Section 6.1(i) that impose restrictions on
the property so acquired, (ii) by reason of customary provisions restricting
assignments, subletting or other transfers contained in leases, licenses, joint
venture agreements and similar agreements entered into in the ordinary course of
business, and (iii) that are or were created by virtue of any transfer of,
agreement to transfer or option or right with respect to any property, assets or
Capital Stock not otherwise prohibited under this Agreement.
6.7. INVESTMENTS. No Credit Party shall, nor shall it permit any of its
Subsidiaries to, directly or indirectly, make or own any Investment in any
Person, including without limitation in any Joint Venture, except:
(a) Investments in Cash and Cash Equivalents;
(b) Investments owned as of the Closing Date (i) in any Subsidiary
(including without limitation loans and advances made to such Subsidiary)
or (ii) listed on Schedule 6.7;
(c) Investments (i) in any Securities received in satisfaction or
partial satisfaction thereof from financially troubled account debtors and
(ii) deposits, prepayments and other credits to suppliers made in the
ordinary course of business of Company and its Subsidiaries;
(d) Investments (i) by Company in any Guarantor Subsidiary, (ii)
by Holdings or any of its Subsidiaries in Company or any Guarantor
Subsidiary, (iii) by a Guarantor Subsidiary in another Guarantor
Subsidiary and (iv) by a Subsidiary that is not a
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Guarantor Subsidiary in any other Subsidiary that is not a Guarantor
Subsidiary; provided that any Investment in the form of a loan or advance
(other than a loan or advance owed by an entity that is not a Credit
Party) shall be evidenced by the Intercompany Note or another intercompany
note with substantially similar subordination provisions that is
reasonably satisfactory to Administrative Agent and, in the case of a loan
or advance by a Credit Party, pledged by such Credit Party as Collateral
pursuant to the Collateral Documents;
(e) Consolidated Capital Expenditures permitted by Section 6.8(d);
(f) so long as no Default or Event of Default is continuing at the
time of making such loans or advances, loans and advances to officers,
directors and employees of Company or any Guarantor Subsidiary (x) in the
ordinary course of business in an aggregate amount not to exceed U.S.$1.5
million at any time outstanding and (y) to the extent the proceeds are
used to acquire Capital Stock of any Parent Company, so long as any cash
proceeds received by a Parent Company are contemporaneously contributed to
the common equity capital of Company;
(g) Investments made in connection with Permitted Acquisitions
permitted pursuant to Section 6.9(h);
(h) Investments by Company or any Guarantor Subsidiary in any
Subsidiary of Holdings that is not a Guarantor Subsidiary in an aggregate
amount not to exceed U.S.$2.5 million at any time outstanding;
(i) Investments by Company or any of its Subsidiaries in any Joint
Venture in an aggregate amount not to exceed U.S.$2.5 million at any time
outstanding;
(j) Investments consisting of guaranties permitted under Section
6.1(g); and
(k) other Investments in an aggregate amount not to exceed at any
time outstanding U.S.$10.0 million.
6.8. FINANCIAL COVENANTS.
(a) Interest Coverage Ratio. Company shall not permit the Interest
Coverage Ratio as of the last day of any Fiscal Quarter, beginning with the
Fiscal Quarter ending August 31, 2004, to be less than the ratio indicated
below:
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INTEREST
COVERAGE
FISCAL QUARTER ENDING RATIO
- ------------------------------------------------------------ ----------
On or prior to August 31, 2006 2.00:1.00
After August 31, 2006 and on or prior to August 31, 2007 2.25:1.00
After August 31, 2007 and on or prior to February 28, 2008 2.50:1:00
After February 28, 2008 2.75:1.00
(b) Fixed Charge Coverage Ratio. Company shall not permit the
Fixed Charge Coverage Ratio as of the last day of any Fiscal Quarter, beginning
with the Fiscal Quarter ending August 31, 2004, to be less than 1.00:1.00.
(c) Leverage Ratio. Company shall not permit the Leverage Ratio as
of the last day of any Fiscal Quarter, beginning with the Fiscal Quarter ending
August 31, 2004, to exceed the ratio indicated below:
FISCAL QUARTER ENDING LEVERAGE RATIO
- ----------------------------------------------------------- --------------
On or prior to May 31, 2005 6.00:1.00
August 31, 2005 5.75:1.00
November 30, 2005 5.75:1.00
February 28, 2006 5.50:1.00
May 31, 2006 5.25:1.00
August 31, 2006 5.25:1.00
November 30, 2006 5.25:1.00
February 28, 2007 5.00:1.00
May 31, 2007 4.75:1.00
August 31, 2007 4.75:1.00
November 30, 2007 4.50:1.00
February 29, 2008 4.25:1.00
May 31, 2008 and thereafter 3.75:1.00
(d) Maximum Consolidated Capital Expenditures. Holdings shall not,
and shall not permit its Subsidiaries to, make or incur Consolidated Capital
Expenditures, in any Fiscal Year indicated below, in an aggregate amount for
Holdings and its Subsidiaries in excess of the corresponding amount set forth
below opposite such Fiscal Year; provided that (x) if the aggregate amount of
Consolidated Capital Expenditures made in any Fiscal Year shall be less than the
maximum amount of Consolidated Capital Expenditures permitted under this Section
6.8(d) for such Fiscal Year (before giving effect to any carryover), then such
shortfall may be added to the amount of Consolidated Capital Expenditures
permitted under this Section 6.8(d) for the immediately succeeding (but not any
other) Fiscal Year and (y) in determining whether any amount is available for
carryover, the amount expended in any Fiscal Year shall first be
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deemed to be from the amount allocated to such Fiscal Year (before giving effect
to any carryover):
CONSOLIDATED
FISCAL YEAR ENDING CAPITAL EXPENDITURES
- ----------------------------------------------------- --------------------
February 2005 U.S.$22.0 million
February 2006 U.S.$22.0 million
February 2007 and thereafter U.S.$20.0 million
In determining compliance with this Section 6.8(d), Company shall (i) calculate
the U.S. Dollar equivalent amount of Capital Expenditures for each Fiscal
Quarter, using the rate of exchange used in preparing the financial statements
for such Fiscal Quarter, and (ii) calculate the aggregate amount of Capital
Expenditures for each Fiscal Year based on the sum of the Capital Expenditures
for each Fiscal Quarter determined pursuant to clause (i).
(e) Certain Calculations. With respect to any period during which
a Permitted Acquisition or an Asset Sale has occurred (each, a "SUBJECT
TRANSACTION"), for purposes of determining compliance with the financial
covenants set forth in this Section 6.8 (but not for purposes of determining the
Applicable Margin, Applicable Commitment Fee Percentage and Excess Cash Flow),
Consolidated Adjusted EBITDA and the components of Consolidated Fixed Charges
shall be calculated with respect to such period on a pro forma basis using the
historical financial statements of any business so acquired or to be acquired or
sold or to be sold and the consolidated financial statements of Holdings and its
Subsidiaries, which shall be adjusted as if such Subject Transaction, and any
Indebtedness incurred or repaid in connection therewith, had been consummated or
incurred or repaid at the beginning of such period. In making such calculations,
pro forma effect shall be given to items that are directly attributable to a
specific transaction, are factually supportable and are expected to have a
continuing impact on Holdings and its Subsidiaries, in each case as reasonably
acceptable to or required by Administrative Agent and Syndication Agent.
For purposes of determining compliance with the financial covenants set
forth in this Section 6.8, if any Indebtedness bears a floating rate of
interest, the interest expense on such Indebtedness will be calculated as if the
rate in effect as of the last day of the applicable period had been the
applicable rate for the entire period (taking into account any Hedge Agreement
applicable to such Indebtedness if such Hedge Agreement has a remaining term as
at the last day of the applicable period in excess of 12 months).
6.9. FUNDAMENTAL CHANGES; DISPOSITION OF ASSETS; ACQUISITIONS. No Credit
Party shall, nor shall it permit any of its Subsidiaries to, enter into any
transaction of merger, amalgamation or consolidation, or liquidate, wind-up or
dissolve itself (or suffer any liquidation or dissolution), or convey, sell,
lease or sub-lease (as lessor or sublessor), exchange, transfer or otherwise
dispose of, in one transaction or a series of transactions, all or any part of
its business, assets or property of any kind whatsoever, whether real, personal
or mixed and whether tangible or intangible, whether now owned or hereafter
acquired, or acquire by purchase or otherwise (other than purchases or other
acquisitions of inventory, materials and equipment and capital expenditures in
the ordinary course of business) the business, property or fixed assets of, or
stock
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or other evidence of beneficial ownership of, any Person or any division or line
of business or other business unit of any Person, except:
(a) any Subsidiary of Company may be merged or amalgamated with or
into Company or any Guarantor Subsidiary, or be liquidated, wound up or
dissolved, or all or any part of its business, property or assets may be
conveyed, sold, leased, transferred or otherwise disposed of, in one
transaction or a series of transactions, to Company or any Guarantor
Subsidiary; provided, in the case of such a merger (x) involving Company,
Company shall be the continuing or surviving Person, and (y) involving a
Guarantor Subsidiary and not involving Company, such Guarantor Subsidiary
shall be the continuing or surviving Person;
(b) Holdings may be merged or amalgamated with or into any other
Parent Company or Company, or be liquidated, wound up or dissolved, or all
or any part of its business, property or assets may be conveyed, sold,
leased, transferred or otherwise disposed of, in one transaction or a
series of transactions, to any other Parent Company or Company; provided,
in the case of such a merger (x) involving Company, Company shall be the
continuing or surviving Person and (y) not involving Company, Holdings
shall be the continuing or surviving Person;
(c) any Non-Guarantor Subsidiary may be merged or amalgamated with
or into any other Non-Guarantor Subsidiary;
(d) so long as no Material Adverse Effect could reasonably be
expected to result therefrom, any Subsidiary may be liquidated, wound up
or dissolved, or all or any part of its business, property or assets may
be conveyed, sold, leased, transferred or otherwise disposed of, in one
transaction or a series of transactions, to any of Holdings' Subsidiaries;
provided that if such Subsidiary was a Guarantor Subsidiary, then the
acquiring entity must be Company or a Guarantor Subsidiary;
(e) sales or other dispositions of assets that do not constitute
Asset Sales;
(f) Asset Sales, the proceeds of which (valued at the principal
amount thereof in the case of non-Cash proceeds consisting of notes or
other debt Securities and valued at fair market value in the case of other
non-Cash proceeds) (i) are less than U.S.$5.0 million with respect to any
single Asset Sale or series of related Asset Sales and (ii) when
aggregated with the proceeds of all other Asset Sales made within the same
Fiscal Year, are less than U.S.$20.0 million; provided (1) the
consideration received for such assets shall be in an amount at least
equal to the fair market value thereof (determined in good faith by the
Board of Directors of Company), (2) no less than 75% thereof shall be paid
in Cash or Cash Equivalents, and (3) the Net Asset Sale Proceeds thereof
shall be applied as required by Section 2.16(a). For purposes of this
clause (f), any liabilities, as shown on Holdings' most recent
consolidated balance sheet, of Company or any of its Subsidiaries (other
than liabilities that are by their terms subordinated to the Obligations)
that are assumed by the transferee of any such assets pursuant to a
customary novation agreement that releases Company or such Subsidiary from
such liabilities shall be deemed to be Cash;
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(g) disposals of damaged, obsolete, worn out or surplus property
or property not otherwise used or useful in the conduct of the businesses
of Holdings and its Subsidiaries;
(h) Permitted Acquisitions; provided that the aggregate
consideration for Permitted Acquisitions shall not exceed U.S.$50.0
million in the aggregate in any Fiscal Year (excluding any such
consideration consisting of Qualified Capital Stock of any Parent
Company); provided further that the aggregate consideration for
acquisitions of Capital Stock of any Persons that do not thereby become
Guarantor Subsidiaries shall not exceed U.S.$20.0 million in the aggregate
in any Fiscal Year (excluding any such consideration consisting of
Qualified Capital Stock of any Parent Company);
(i) Investments made in accordance with Section 6.7;
(j) sales of accounts receivable pursuant to the Sodex Factoring
Agreement and factoring agreements on similar terms that are reasonably
satisfactory to Administrative Agent; provided that the aggregate amount
of accounts receivable subject to all factoring agreements under this
clause (j) shall not exceed U.S.$15.0 million at any time outstanding (it
being understood that an account shall cease to be outstanding for this
purpose when it has been collected);
(k) dispositions under Hedge Agreements permitted hereunder;
(l) the sale of the St. Marie Facility;
(m) the sale all of the Capital Stock or all or substantially all
of the assets of any Foreign Subsidiaries existing on the Closing Date;
(n) the sale of all, but not less than all of, the Spa Business;
and
(o) licenses, leases and subleases of real or personal property in
the ordinary course of business.
To the extent the Requisite Lenders waive the provisions of this Section
6.9 with respect to the sale of any Collateral, or any Collateral is sold as
permitted by this Section 6.9, such Collateral (unless sold to Holdings or any
of its Subsidiaries) shall be sold free and clear of the Liens created by the
Collateral Documents, and the Agents shall take all actions they deem
appropriate in order to effect the foregoing.
6.10. TRANSACTIONS WITH SHAREHOLDERS AND AFFILIATES. No Credit Party
shall, nor shall it permit any of its Subsidiaries to, directly or indirectly,
enter into or permit to exist any transaction (including the purchase, sale,
lease or exchange of any property or the rendering of any service) with any
Affiliate of Holdings or any of its Subsidiaries, on terms that are less
favorable to such Credit Party or that Subsidiary, as the case may be, than
those that might reasonably be obtained at the time from a Person who is not
such an Affiliate; provided the foregoing restriction shall not apply to (a) any
transaction between or among Company and/or one or more Guarantor Subsidiaries;
(b) reasonable and customary fees and reimbursements paid to members of the
Board of Directors of Holdings and its Subsidiaries; (c) compensation
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arrangements for officers, consultants and employees of Holdings and its
Subsidiaries entered into in the ordinary course of business; (d) the payment of
the closing fee on the Closing Date and, so long as no Event of Default exists,
management fees to Sponsors and their Affiliates pursuant to the Management
Agreement; (e) Investments permitted by Section 6.7(d), (e), (f), (h), (i) or
(j); (f) Restricted Junior Payments permitted by Sections 6.5(b), (c), (d) and
(e); (g) the transactions set forth on Schedule 6.10 (and renewals and
replacements thereof on terms, in each case taken as a whole, not materially
more disadvantageous to the applicable Credit Party or Subsidiary, as the case
may be); (h) payments to Sponsors or any of their respective Affiliates of
reasonable expenses incurred in connection with services provided by such
Persons to any of the Credit Parties or their Subsidiaries; and (i) transactions
permitted by Section 6.1(b), 6.1(g), 6.9(a), 6.9(b), 6.9(c) or 6.9(d).
6.11. CONDUCT OF BUSINESS. From and after the Closing Date, no Credit
Party shall, nor shall it permit any of its Subsidiaries to, engage in any
business other than (i) the businesses engaged in by such Credit Party on the
Closing Date and reasonably similar, complementary, incidental or related
businesses and reasonable extensions thereof and (ii) such other lines of
business as may be consented to by Requisite Lenders.
6.12. PERMITTED ACTIVITIES OF PARENT COMPANIES. Holdings shall not (a)
incur, directly or indirectly, any Indebtedness or any other obligation or
liability whatsoever other than (i) the Indebtedness and obligations under the
Senior Subordinated Notes Indenture, the Credit Documents and the Related
Agreements and (ii) guarantees of obligations of Company and its Subsidiaries
under leases not prohibited by this Agreement; (b) create or suffer to exist any
Lien upon any property or assets now owned or hereafter acquired by it other
than the Liens created under any Credit Document or pursuant to the Intercompany
Debt Transactions; (c) own any assets other than the Capital Stock of Company
and the Canadian Holding Company and rights under the Intercompany Debt
Documents; or (d) engage in any business or activity other than (i) performing
its obligations and activities incidental thereto under the Senior Subordinated
Notes Indenture, the Credit Documents and the Related Agreements, (ii) issuing
Qualified Capital Stock and (iii) making Restricted Junior Payments permitted to
be made by it under Section 6.5.
No Parent Company (other than Holdings) shall (a) incur, directly or
indirectly, any Indebtedness or any other obligation or liability whatsoever
other than the Indebtedness and obligations under the Related Agreements, each
as in effect on the date hereof, and the Permitted Holder Debt; (b) create or
suffer to exist any Lien upon any property or assets now owned or hereafter
acquired by it other than the Liens created under any Credit Document or
permitted pursuant to Section 6.2; (c) own any assets other than the Capital
Stock of another Parent Company; (d) engage in any business or activity other
than (i) performing its obligations and activities incidental thereto under the
Credit Documents and the Related Agreements, (ii) issuing Qualified Capital
Stock and (iii) making dividends and distributions; (e) other than as permitted
by Section 6.9, consolidate or amalgamate with or merge with or into, or convey,
transfer or lease all or substantially all its assets to, any Person; or (f)
create or acquire any Subsidiary or make or own any Investment in any Person
other than another Parent Company.
6.13. AMENDMENTS OR WAIVERS OF CERTAIN RELATED AGREEMENTS. Except as set
forth in Section 6.14, no Credit Party shall nor shall it permit any of its
Subsidiaries to, agree to any
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material amendment, restatement, supplement or other modification to, or waiver
of, any of its material rights under any Related Agreement after the Closing
Date, in each case which is adverse in any material respect to the Lenders,
without in each case obtaining the prior written consent of Requisite Lenders to
such amendment, restatement, supplement or other modification or waiver.
6.14. AMENDMENTS OR WAIVERS OF OR WITH RESPECT TO SUBORDINATED
INDEBTEDNESS. No Credit Party shall, nor shall it permit any of its Subsidiaries
to, amend or otherwise change the terms of any Subordinated Indebtedness, or
make any payment consistent with an amendment thereof or change thereto, if the
effect of such amendment or change is to increase the interest rate on such
Subordinated Indebtedness, change (to earlier dates) any dates upon which
payments of principal or interest are due thereon, change any event of default
or condition to an event of default with respect thereto (other than to
eliminate any such event of default or increase any grace period related
thereto), change the redemption, prepayment or defeasance provisions thereof,
change the subordination provisions of such Subordinated Indebtedness (or of any
guaranty thereof), or if the effect of such amendment or change, together with
all other amendments or changes made, is to increase materially the obligations
of the obligor thereunder or to confer any additional rights on the holders of
such Subordinated Indebtedness (or a trustee or other representative on their
behalf) which would be adverse to any Credit Party or Lenders.
6.15. FISCAL YEAR. No Credit Party shall, nor shall it permit any of its
Subsidiaries to change its Fiscal Year-end from the last day of February without
the prior consent of Administrative Agent.
6.16. ANTI-TERRORISM LAW; ANTI-MONEY LAUNDERING.
(a) No Credit Party shall directly or indirectly, (i) knowingly
conduct any business or engage in making or receiving any contribution of funds,
goods or services to or for the benefit of any Person described in Section 4.27,
(ii) knowingly deal in, or otherwise engage in any transaction relating to, any
property or interests in property blocked pursuant to the Executive Order or any
other Anti-Terrorism Law, or (iii) knowingly engage in or conspire to engage in
any transaction that evades or avoids, or has the purpose of evading or
avoiding, or attempts to violate, any of the prohibitions set forth in any
Anti-Terrorism Law (and the Credit Parties shall deliver to the Lenders any
certification or other evidence requested from time to time by any Lender in its
reasonable discretion, confirming the Credit Parties' compliance with this
Section 6.16).
(b) No Credit Party shall directly or indirectly cause or permit
any of the funds of such Credit Party that are used to repay the Loans to be
derived from any unlawful activity with the result that the making of the Loans
would be in violation of law.
6.17. EMBARGOED PERSON. No Credit Party shall cause or permit (a) any of
the funds or properties of the Credit Parties that are used to repay the Loans
to constitute property of, or be beneficially owned directly or indirectly by,
any Person subject to sanctions or trade restrictions under United States law
("EMBARGOED PERSON" or "EMBARGOED PERSONS") that is identified on (1) the "List
of Specially Designated Nationals and Blocked Persons" (the "SDN LIST")
maintained by OFAC and/or on any other similar list ("OTHER LIST") maintained by
OFAC
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pursuant to any authorizing statute including, but not limited to, the
International Emergency Economic Powers Act, 50 U.S.C. Sections 1701 et seq.,
The Trading with the Enemy Act, 50 U.S.C. App. 1 et seq., and any Executive
Order or regulation promulgated thereunder, with the result that the investment
in the Credit Parties (whether directly or indirectly) is prohibited by law, or
the Loans made by the Lenders would be in violation of law, or (2) the Executive
Order, any related enabling legislation or any other similar Executive Orders,
or (b) any Embargoed Person to have any direct or indirect interest, of any
nature whatsoever in the Credit Parties, with the result that the investment in
the Credit Parties (whether directly or indirectly) is prohibited by law or the
Loans are in violation of law.
6.18. DESIGNATED SENIOR DEBT. Company shall not designate any Indebtedness
other than the Obligations and the Guaranteed Obligations as "Designated Senior
Debt" within the meaning of the Senior Subordinated Notes Indenture.
6.19. INTERCOMPANY DEBT TRANSACTIONS. Notwithstanding anything in this
Section 6 to the contrary, the Intercompany Debt Transactions are expressly
permitted by this Agreement and shall be disregarded for all purposes of Section
2.16 and this Section 6, including calculating baskets and exceptions.
6.20. ACCOUNT MAINTENANCE. No Credit Party shall have cash available for
withdrawal at the end of any Business Day in excess of Can$75,000 in any
Designated Account that is not either (i) with respect to accounts located in
Canada, maintained with a Lender or (ii) subject to a Control Agreement (as
defined in the U.S. Security Agreement with respect to accounts located in the
U.S., the Canadian Security Agreement with respect to accounts located in Canada
(outside Quebec) and meaning an account control agreement reasonably
satisfactory to Collateral Agent with respect to accounts located in Quebec or
elsewhere) and the Credit Parties shall not have cash available for withdrawal
at the end of any Business Day in excess of Can$750,000 in the aggregate in all
Designated Accounts not meeting the conditions described in clause (i) or (ii).
SECTION 7. GUARANTY
7.1. GUARANTY OF THE OBLIGATIONS. Subject to the provisions of Section
7.2, Guarantors jointly and severally hereby irrevocably and unconditionally
guaranty to Administrative Agent for the ratable benefit of the Secured Parties
the due and punctual payment in full of all Obligations when the same shall
become due, whether at stated maturity, by required prepayment, declaration,
acceleration, demand or otherwise (including amounts that would become due but
for the operation of the automatic stay under applicable provisions of the
Bankruptcy Laws) (collectively, the "GUARANTEED OBLIGATIONS").
7.2. CONTRIBUTION BY GUARANTORS. All Guarantor Subsidiaries desire to
allocate among themselves (collectively, the "CONTRIBUTING GUARANTORS"), in a
fair and equitable manner, their obligations arising under this Guaranty.
Accordingly, in the event any payment or distribution is made on any date by a
Guarantor Subsidiary (a "FUNDING GUARANTOR") under this Guaranty such that its
Aggregate Payments exceed its Fair Share as of such date, such Funding Guarantor
shall be entitled to a contribution from each of the other Contributing
Guarantors in an amount sufficient to cause each Contributing Guarantor's
Aggregate Payments to equal its Fair
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Share as of such date. "FAIR SHARE" means, with respect to a Contributing
Guarantor as of any date of determination, an amount equal to (a) the ratio of
(i) the Fair Share Contribution Amount with respect to such Contributing
Guarantor to (ii) the aggregate of the Fair Share Contribution Amounts with
respect to all Contributing Guarantors multiplied by (b) the aggregate amount
paid or distributed on or before such date by all Funding Guarantors under this
Guaranty in respect of the obligations Guaranteed. "FAIR SHARE CONTRIBUTION
AMOUNT" means, with respect to a Contributing Guarantor as of any date of
determination, the maximum aggregate amount of the obligations of such
Contributing Guarantor under this Guaranty that would not render its obligations
hereunder or thereunder subject to avoidance as a fraudulent transfer or
conveyance under applicable provisions of the Bankruptcy Laws; provided, solely
for purposes of calculating the Fair Share Contribution Amount with respect to
any Contributing Guarantor for purposes of this Section 7.2, any assets or
liabilities of such Contributing Guarantor arising by virtue of any rights to
subrogation, reimbursement or indemnification or any rights to or obligations of
contribution hereunder shall not be considered as assets or liabilities of such
Contributing Guarantor. "AGGREGATE PAYMENTS" means, with respect to a
Contributing Guarantor as of any date of determination, an amount equal to (1)
the aggregate amount of all payments and distributions made on or before such
date by such Contributing Guarantor in respect of this Guaranty (including,
without limitation, in respect of this Section 7.2), minus (2) the aggregate
amount of all payments received on or before such date by such Contributing
Guarantor from the other Contributing Guarantors as contributions under this
Section 7.2. The amounts payable as contributions hereunder shall be determined
as of the date on which the related payment or distribution is made by the
applicable Funding Guarantor. The allocation among Contributing Guarantors of
their obligations as set forth in this Section 7.2 shall not be construed in any
way to limit the liability of any Contributing Guarantor hereunder. Each
Guarantor is a third party beneficiary to the contribution agreement set forth
in this Section 7.2.
7.3. PAYMENT BY GUARANTORS. Subject to Section 7.2, Guarantors hereby
jointly and severally agree, in furtherance of the foregoing and not in
limitation of any other right which any Secured Party may have at law or in
equity against any Guarantor by virtue hereof, that upon the failure of Company
to pay any of the Guaranteed Obligations when and as the same shall become due,
whether at stated maturity, by required prepayment, declaration, acceleration,
demand or otherwise (including amounts that would become due but for the
operation of the automatic stay under applicable provisions of the Bankruptcy
Laws), Guarantors will upon demand pay, or cause to be paid, in Cash, to
Administrative Agent for the ratable benefit of Secured Parties, an amount equal
to the sum of the unpaid principal amount of all Guaranteed Obligations then due
as aforesaid, accrued and unpaid interest on such Guaranteed Obligations
(including interest which, but for Company's becoming the subject of a case
under the Bankruptcy Laws, would have accrued on such Guaranteed Obligations,
whether or not a claim is allowed against Company for such interest in the
related bankruptcy case) and all other Guaranteed Obligations then owed to
Secured Parties as aforesaid.
7.4. LIABILITY OF GUARANTORS ABSOLUTE. Each Guarantor agrees that its
obligations hereunder are irrevocable, absolute, independent and unconditional
and shall not be affected by any circumstance which constitutes a legal or
equitable discharge of a guarantor or surety other than payment in full of the
Guaranteed Obligations. In furtherance of the foregoing and without limiting the
generality thereof, each Guarantor agrees as follows:
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(a) this Guaranty is a guaranty of payment when due and not of
collectability; this Guaranty is a primary obligation of each Guarantor
and not merely a contract of surety;
(b) Administrative Agent may enforce this Guaranty upon the
occurrence of an Event of Default notwithstanding the existence of any
dispute between Company and any Secured Party with respect to the
existence of such Event of Default;
(c) the obligations of each Guarantor hereunder are independent of
the obligations of Company and the obligations of any other guarantor
(including any other Guarantor) of the obligations of Company, and a
separate action or actions may be brought and prosecuted against such
Guarantor whether or not any action is brought against Company or any of
such other guarantors and whether or not Company is joined in any such
action or actions;
(d) payment by any Guarantor of a portion, but not all, of the
Guaranteed Obligations shall in no way limit, affect, modify or abridge
any Guarantor's liability for any portion of the Guaranteed Obligations
which has not been paid. Without limiting the generality of the foregoing,
if Administrative Agent is awarded a judgment in any suit brought to
enforce any Guarantor's covenant to pay a portion of the Guaranteed
Obligations, such judgment shall not be deemed to release such Guarantor
from its covenant to pay the portion of the Guaranteed Obligations that is
not the subject of such suit, and such judgment shall not, except to the
extent satisfied by such Guarantor, limit, affect, modify or abridge any
other Guarantor's liability hereunder in respect of the Guaranteed
Obligations;
(e) any Secured Party, upon such terms as it deems appropriate,
without notice or demand and without affecting the validity or
enforceability hereof or giving rise to any reduction, limitation,
impairment, discharge or termination of any Guarantor's liability
hereunder, from time to time may (i) renew, extend, accelerate, increase
the rate of interest on, or otherwise change the time, place, manner or
terms of payment of the Guaranteed Obligations; (ii) settle, compromise,
release or discharge, or accept or refuse any offer of performance with
respect to, or substitutions for, the Guaranteed Obligations or any
agreement relating thereto and/or subordinate the payment of the same to
the payment of any other obligations; (iii) request and accept other
guaranties of the Guaranteed Obligations and take and hold security for
the payment hereof or the Guaranteed Obligations; (iv) release, surrender,
exchange, substitute, compromise, settle, rescind, waive, alter,
subordinate or modify, with or without consideration, any security for
payment of the Guaranteed Obligations, any other guaranties of the
Guaranteed Obligations, or any other obligation of any Person (including
any other Guarantor) with respect to the Guaranteed Obligations; (v)
enforce and apply any security now or hereafter held by or for the benefit
of such Secured Party in respect hereof or the Guaranteed Obligations and
direct the order or manner of sale thereof, or exercise any other right or
remedy that such Secured Party may have against any such security, in each
case as such Secured Party in its discretion may determine consistent
herewith or the applicable Hedge Agreement and any applicable security
agreement, including foreclosure on any such security pursuant to one or
more judicial or nonjudicial sales,
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whether or not every aspect of any such sale is commercially reasonable,
and even though such action operates to impair or extinguish any right of
reimbursement or subrogation or other right or remedy of any Guarantor
against Company or any security for the Guaranteed Obligations; and (vi)
exercise any other rights available to it under the Credit Documents or
the Hedge Agreements; and
(f) this Guaranty and the obligations of Guarantors hereunder
shall be valid and enforceable and shall not be subject to any reduction,
limitation, impairment, discharge or termination for any reason (other
than payment in full of the Guaranteed Obligations), including the
occurrence of any of the following, whether or not any Guarantor shall
have had notice or knowledge of any of them: (i) any failure or omission
to assert or enforce or agreement or election not to assert or enforce, or
the stay or enjoining, by order of court, by operation of law or
otherwise, of the exercise or enforcement of, any claim or demand or any
right, power or remedy (whether arising under the Credit Documents or the
Hedge Agreements, at law, in equity or otherwise) with respect to the
Guaranteed Obligations or any agreement relating thereto, or with respect
to any other guaranty of or security for the payment of the Guaranteed
Obligations; (ii) any rescission, waiver, amendment or modification of, or
any consent to departure from, any of the terms or provisions (including
provisions relating to events of default) hereof, any of the other Credit
Documents, any of the Hedge Agreements or any agreement or instrument
executed pursuant thereto, or of any other guaranty or security for the
Guaranteed Obligations, in each case whether or not in accordance with the
terms hereof or such Credit Document, such Hedge Agreement or any
agreement relating to such other guaranty or security; (iii) the
Guaranteed Obligations, or any agreement relating thereto, at any time
being found to be illegal, invalid or unenforceable in any respect; (iv)
the application of payments received from any source (other than payments
received pursuant to the other Credit Documents or any of the Hedge
Agreements or from the proceeds of any security for the Guaranteed
Obligations, except to the extent such security also serves as collateral
for indebtedness other than the Guaranteed Obligations) to the payment of
indebtedness other than the Guaranteed Obligations, even though any
Secured Party might have elected to apply such payment to any part or all
of the Guaranteed Obligations; (v) any Secured Party's consent to the
change, reorganization or termination of the corporate structure or
existence of Holdings or any of its Subsidiaries and to any corresponding
restructuring of the Guaranteed Obligations; (vi) any failure to perfect
or continue perfection of a security interest in any collateral which
secures any of the Guaranteed Obligations; (vii) any defenses, set-offs or
counterclaims which Company may allege or assert against any Secured Party
in respect of the Guaranteed Obligations, including failure of
consideration, breach of warranty, payment, statute of frauds, statute of
limitations, accord and satisfaction and usury; and (viii) any other act
or thing or omission, or delay to do any other act or thing, which may or
might in any manner or to any extent vary the risk of any Guarantor as an
obligor in respect of the Guaranteed Obligations.
7.5. WAIVERS BY GUARANTORS. Each Guarantor hereby waives, for the benefit
of the Secured Parties: (a) any right to require any Secured Party, as a
condition of payment or performance by such Guarantor, to (i) proceed against
Company, any other guarantor (including any other Guarantor) of the Guaranteed
Obligations or any other Person, (ii) proceed against or
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exhaust any security held from Company, any such other guarantor or any other
Person, (iii) proceed against or have resort to any balance of any Deposit
Account or credit on the books of any Secured Party in favor of Company or any
other Person, or (iv) pursue any other remedy in the power of any Secured Party
whatsoever; (b) any defense arising by reason of the incapacity, lack of
authority or any disability or other defense of Company or any other Guarantor
including any defense based on or arising out of the lack of validity or the
unenforceability of the Guaranteed Obligations or any agreement or instrument
relating thereto or by reason of the cessation of the liability of Company or
any other Guarantor from any cause other than payment in full of the Guaranteed
Obligations; (c) any defense based upon any statute or rule of law which
provides that the obligation of a surety must be neither larger in amount nor in
other respects more burdensome than that of the principal; (d) any defense based
upon any Secured Party's errors or omissions in the administration of the
Guaranteed Obligations, except behavior which amounts to bad faith; (e) (i) any
principles or provisions of law, statutory or otherwise, which are or might be
in conflict with the terms hereof and any legal or equitable discharge of such
Guarantor's obligations hereunder, (ii) the benefit of any statute of
limitations affecting such Guarantor's liability hereunder or the enforcement
hereof, (iii) any rights to set-offs, recoupments and counterclaims, and (iv)
promptness, diligence and any requirement that any Secured Party protect,
secure, perfect or insure any security interest or lien or any property subject
thereto; (f) notices, demands, presentments, protests, notices of protest,
notices of dishonor and notices of any action or inaction, including acceptance
hereof, notices of default hereunder, the Hedge Agreements or any agreement or
instrument related thereto, notices of any renewal, extension or modification of
the Guaranteed Obligations or any agreement related thereto, notices of any
extension of credit to Company and notices of any of the matters referred to in
Section 7.4 and any right to consent to any thereof; and (g) any defenses or
benefits that may be derived from or afforded by law which limit the liability
of or exonerate guarantors or sureties, or which may conflict with the terms
hereof.
7.6. GUARANTORS' RIGHTS OF SUBROGATION, CONTRIBUTION, ETC. Until the
Guaranteed Obligations shall have been paid in full and the Revolving
Commitments shall have terminated and all Letters of Credit shall have expired
or been cancelled or collateralized in accordance with Section 2.5(n), each
Guarantor hereby waives any claim, right or remedy, direct or indirect, that
such Guarantor now has or may hereafter have against Company or any other
Guarantor or any of its assets in connection with this Guaranty or the
performance by such Guarantor of its obligations hereunder, in each case whether
such claim, right or remedy arises in equity, under contract, by statute, under
common law or otherwise and including without limitation (a) any right of
subrogation, reimbursement or indemnification that such Guarantor now has or may
hereafter have against Company with respect to the Guaranteed Obligations, (b)
any right to enforce, or to participate in, any claim, right or remedy that any
Secured Party now has or may hereafter have against Company, and (c) any benefit
of, and any right to participate in, any collateral or security now or hereafter
held by any Secured Party. In addition, until the Guaranteed Obligations shall
have been paid in full and the Revolving Commitments shall have terminated and
all Letters of Credit shall have expired or been cancelled or collateralized in
accordance with Section 2.5(n), each Guarantor shall withhold exercise of any
right of contribution such Guarantor may have against any other guarantor
(including any other Guarantor) of the Guaranteed Obligations, including,
without limitation, any such right of contribution as contemplated by Section
7.2. Each Guarantor further agrees that, to the extent the waiver or agreement
to withhold the exercise of its rights of subrogation, reimbursement,
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indemnification and contribution as set forth herein is found by a court of
competent jurisdiction to be void or voidable for any reason, any rights of
subrogation, reimbursement or indemnification such Guarantor may have against
Company or against any collateral or security, and any rights of contribution
such Guarantor may have against any such other guarantor, shall be junior and
subordinate to any rights any Secured Party may have against Company, to all
right, title and interest any Secured Party may have in any such collateral or
security, and to any right any Secured Party may have against such other
guarantor. If any amount shall be paid to any Guarantor on account of any such
subrogation, reimbursement, indemnification or contribution rights at any time
when all Guaranteed Obligations shall not have been finally paid in full, such
amount shall be held in trust for Administrative Agent on behalf of the Secured
Parties and shall forthwith be paid over to Administrative Agent for the benefit
of the Secured Parties to be credited and applied against the Guaranteed
Obligations, whether matured or unmatured, in accordance with the terms hereof.
7.7. SUBORDINATION OF OTHER OBLIGATIONS. Any Indebtedness of Company or
any Guarantor now or hereafter held by any Guarantor (the "OBLIGEE GUARANTOR")
is hereby subordinated in right of payment to the Guaranteed Obligations, and
any such indebtedness collected or received by the Obligee Guarantor during the
existence of an Event of Default shall be held in trust for Administrative Agent
on behalf of the Secured Parties and shall forthwith be paid over to
Administrative Agent for the benefit of the Secured Parties to be credited and
applied against the Guaranteed Obligations but without affecting, impairing or
limiting in any manner the liability of the Obligee Guarantor under any other
provision hereof.
7.8. CONTINUING GUARANTY. This Guaranty is a continuing guaranty and
shall remain in effect until all of the Guaranteed Obligations shall have been
paid in full and the Revolving Commitments shall have terminated and all Letters
of Credit shall have expired or been cancelled or collateralized in accordance
with Section 2.5(n). Each Guarantor hereby irrevocably waives any right to
revoke this Guaranty as to future transactions giving rise to any Guaranteed
Obligations.
7.9. AUTHORITY OF GUARANTORS OR COMPANY. It is not necessary for any
Secured Party to inquire into the capacity or powers of any Guarantor or Company
or the officers, directors or any agents acting or purporting to act on behalf
of any of them.
7.10. FINANCIAL CONDITION OF COMPANY. Any Credit Extension may be made to
Company or continued from time to time, and any Hedge Agreements may be entered
into from time to time, in each case without notice to or authorization from any
Guarantor regardless of the financial or other condition of Company at the time
of any such grant or continuation or at the time such Hedge Agreement is entered
into, as the case may be. No Secured Party shall have any obligation to disclose
or discuss with any Guarantor its assessment, or any Guarantor's assessment, of
the financial condition of Company. Each Guarantor has adequate means to obtain
information from Company on a continuing basis concerning the financial
condition of Company and its ability to perform its obligations under the Credit
Documents and the Hedge Agreements, and each Guarantor assumes the
responsibility for being and keeping informed of the financial condition of
Company and of all circumstances bearing upon the risk of nonpayment of the
Guaranteed Obligations. Each Guarantor hereby waives and relinquishes any
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duty on the part of any Secured Party to disclose any matter, fact or thing
relating to the business, operations or conditions of Company now known or
hereafter known by any Secured Party.
7.11. BANKRUPTCY, ETC.
(a) Each Guarantor acknowledges and agrees that any interest on
any portion of the Guaranteed Obligations which accrues after the commencement
of any case or proceeding referred to in clause (a) above (or, if interest on
any portion of the Guaranteed Obligations ceases to accrue by operation of law
by reason of the commencement of such case or proceeding, such interest as would
have accrued on such portion of the Guaranteed Obligations if such case or
proceeding had not been commenced) shall be included in the Guaranteed
Obligations because it is the intention of Guarantors and the Secured Parties
that the Guaranteed Obligations which are guaranteed by Guarantors pursuant
hereto should be determined without regard to any rule of law or order which may
relieve Company of any portion of such Guaranteed Obligations. Guarantors will
not object to any trustee in bankruptcy, receiver, debtor in possession,
assignee for the benefit of creditors or similar person making payment to
Administrative Agent, or the allowance of the claim of Administrative Agent in
respect of, any such interest accruing after the date on which such case or
proceeding is commenced.
(b) In the event that all or any portion of the Guaranteed
Obligations are paid by Company, the obligations of Guarantors hereunder shall
continue and remain in full force and effect or be reinstated, as the case may
be, in the event that all or any part of such payment(s) are rescinded or
recovered directly or indirectly from any Secured Party as a preference,
fraudulent transfer or otherwise, and any such payments which are so rescinded
or recovered shall constitute Guaranteed Obligations for all purposes hereunder.
7.12. DISCHARGE OF GUARANTY.
(a) If all or substantially all of the Capital Stock of any
Guarantor Subsidiary or any of its successors in interest hereunder shall be
sold or otherwise disposed of (including by merger or consolidation) in
accordance with the terms and conditions hereof, the Guaranty of such Guarantor
Subsidiary or such successor in interest, as the case may be, hereunder shall
automatically be discharged and released without any further action by any
Secured Party or any other Person effective as of the time of such Asset Sale.
The Agents shall take all actions they deem appropriate in order to effect such
discharge and release.
(b) If Company elects to cause one of its Subsidiaries to become a
Guarantor pursuant to Section 5.10(c), then, so long as such Subsidiary is not
otherwise required by this Agreement to be a Guarantor, the Guaranty of such
Guarantor Subsidiary shall be discharged and released at the option of Company
upon notice to Administrative Agent; provided that (i) any Investments in such
Subsidiary made in reliance on Section 6.7(d)(i), (ii), or (iii) shall be
returned in the amount and form of Investment made or shall be permitted as an
Investment at the time of such release pursuant to another clause of Section 6.7
and (ii) any Subsidiary that became a Guarantor Subsidiary in order to be
excluded from the limitation set forth in the proviso of Section 6.9(h) may not
be released pursuant to this Section 7.12(b).
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SECTION 8. EVENTS OF DEFAULT
8.1. EVENTS OF DEFAULT. If any one or more of the following conditions or
events shall occur (each, an "EVENT OF DEFAULT"):
(a) Failure to Make Payments When Due. Failure by Company to pay
(i) when due any installment of principal of any Loan, whether at stated
maturity, by acceleration, by mandatory prepayment, accepted Offer to
Prepay or otherwise; (ii) when due any amount payable to the Issuing Bank
or an Issuing Lender in reimbursement of any drawing under a Letter of
Credit; or (iii) any interest on any Loan or any fee or any other amount
due hereunder within five days after the date due; or
(b) Default in Other Agreements. (i) Failure of any Credit Party
or any of their respective Subsidiaries to pay when due any principal of
or interest on or any other amount payable in respect of one or more items
of Indebtedness (other than Indebtedness referred to in Section 8.1(a)) in
an individual principal amount of U.S.$10.0 million or more or with an
aggregate principal amount of U.S.$10.0 million or more, in each case
beyond the grace period, if any, provided therefor; or (ii) breach or
default by any Credit Party with respect to any other material term of (x)
one or more items of Indebtedness in the individual or aggregate principal
amounts referred to in clause (i) above or (y) any loan agreement,
mortgage, indenture or other agreement relating to such item(s) of
Indebtedness, in each case beyond the grace period, if any, provided
therefor, if the effect of such breach or default is to cause, or to
permit the holder or holders of that Indebtedness (or a trustee on behalf
of such holder or holders), to cause, that Indebtedness to become or be
declared due and payable (or redeemable) prior to its stated maturity or
the stated maturity of any underlying obligation, as the case may be; or
(c) Breach of Certain Covenants. Failure of any Credit Party to
perform or comply with any term or condition contained in Section 2.7,
Section 5.1(f), Section 5.2 (as to legal existence) or Section 6 or any
Parent Company to perform or comply with any term or condition contained
in Section 6.12; or
(d) Breach of Representations, etc. Any representation, warranty,
certification or other statement made or deemed made by any Credit Party
in any Credit Document or in any statement or certificate at any time
given by any Credit Party or any of its Subsidiaries in writing pursuant
hereto or thereto or in connection herewith or therewith shall be false in
any material respect (or in any respect if such statement was subject to a
materiality or Material Adverse Effect qualification) as of the date made
or deemed made; or
(e) Other Defaults Under Credit Documents. Any Credit Party shall
default in the performance of or compliance with any term contained herein
or any of the other Credit Documents, other than any such term referred to
in any other Section of this Section 8.1, and such default shall not have
been remedied or waived within thirty days after the earlier of (i) an
Authorized Officer of such Credit Party becoming aware of such default or
(ii) receipt by Company of notice from Administrative Agent or any Lender
of such default; or
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(f) Involuntary Bankruptcy; Appointment of Receiver, etc. (i) A
court of competent jurisdiction shall enter a decree or order for relief
in respect of Holdings or any of its Subsidiaries in an involuntary case
under any Bankruptcy Laws now or hereafter in effect, which decree or
order is not stayed within sixty days; or any other similar relief shall
be granted under any applicable federal, state or provincial law; or (ii)
an involuntary case shall be commenced against Holdings or any of its
Subsidiaries under any Bankruptcy Laws now or hereafter in effect; or a
decree or order of a court having jurisdiction in the premises for the
appointment of a receiver, liquidator, sequestrator, trustee, custodian or
other officer having similar powers over Holdings or any of its
Subsidiaries, or over all or a substantial part of its property, shall
have been entered; or there shall have occurred the involuntary
appointment of an interim receiver, trustee or other custodian of Holdings
or any of its Subsidiaries for all or a substantial part of its property;
or a warrant of attachment, execution or similar process shall have been
issued against any substantial part of the property of Holdings or any of
its Subsidiaries, and any such event described in this clause (ii) shall
continue for sixty days without having been dismissed, bonded or
discharged; or
(g) Voluntary Bankruptcy; Appointment of Receiver, etc. (i)
Holdings or any of its Subsidiaries shall have an order for relief entered
with respect to it or shall commence a voluntary case under any Bankruptcy
Laws now or hereafter in effect, or shall consent to the entry of an order
for relief in an involuntary case, or to the conversion of an involuntary
case to a voluntary case, under any such law, or shall consent to the
appointment of or taking possession by a receiver, trustee or other
custodian for all or a substantial part of its property; or Holdings or
any of its Subsidiaries shall make any assignment for the benefit of
creditors; or (ii) Holdings or any of its Subsidiaries shall be unable, or
shall fail generally, or shall admit in writing its inability, to pay its
debts as such debts become due; or the Board of Directors of Holdings or
any of its Subsidiaries (or any committee thereof) shall adopt any
resolution or otherwise authorize any action to approve any of the actions
referred to herein or in Section 8.1(f); or
(h) Judgments and Attachments. Any money judgment, writ or warrant
of attachment or similar process involving individually or in the
aggregate at any time an amount in excess of U.S.$10.0 million (in either
case to the extent not adequately covered by insurance) shall be entered
or filed against Holdings or any of its Subsidiaries or any of their
respective assets and shall remain undischarged, unvacated, unbonded or
unstayed for a period of forty-five days (or in any event later than five
days prior to the date of any proposed sale thereunder); or
(i) Dissolution. Any order, judgment or decree shall be entered
against Holdings or any of its Subsidiaries decreeing the dissolution or
split up of such Person, other than a voluntary dissolution permitted by
Section 6.9, and such order shall remain undischarged or unstayed for a
period in excess of thirty days; or
(j) Employee Benefit Plans. (i) There shall occur one or more
ERISA Events or Canadian Pension Plan Default Events which individually or
in the aggregate results in or would reasonably be expected to result in
liability of Holdings, any of its Subsidiaries or any of their respective
ERISA Affiliates in excess of U.S.$10.0 million during the term
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hereof; or (ii) there exists any fact or circumstance that reasonably
could be expected to result in the imposition of a material Lien or
security interest under Section 412(n) of the Internal Revenue Code or
under Section 4068 of ERISA; or
(k) Change of Control. A Change of Control shall occur; or
(l) Guaranties, Collateral Documents and other Credit Documents.
At any time after the execution and delivery thereof, (i) the Guaranty for
any reason, other than the satisfaction in full of all Obligations, shall
cease to be in full force and effect (other than in accordance with its
terms) or shall be declared to be null and void or any Guarantor shall
repudiate its obligations thereunder, (ii) this Agreement or any
Collateral Document ceases to be in full force and effect (other than by
reason of a release of Collateral in accordance with the terms hereof or
thereof or the satisfaction in full of the Obligations in accordance with
the terms hereof) or shall be declared null and void, or Collateral Agent
shall not have or shall cease to have a valid and perfected Lien in any
Collateral purported to be covered by the Collateral Documents with the
priority required by the relevant Collateral Document (except as provided
in this Agreement or such Collateral Document), in each case for any
reason other than the failure of Collateral Agent or any Secured Party to
take any action within its control, or (iii) any Credit Party shall
contest the validity or enforceability of any Credit Document in writing
or deny in writing that it has any further liability, including with
respect to future advances by Lenders, under any Credit Document to which
it is a party; or
(m) Offer to Prepay. Company shall fail to make an Offer to Prepay
as, when and on the terms required by Section 2.16,
THEN, (1) upon the occurrence of any Event of Default described in Section
8.1(f) or 8.1(g), automatically, and (2) upon the occurrence of any other Event
of Default, upon receipt of notice from Administrative Agent (which notice may
be given by Administrative Agent as it may determine and must be given if the
Requisite Lenders so request), (A) the Revolving Commitments of each Revolving
Lender and the obligation of any Issuing Lender or Issuing Bank to issue any
Letter of Credit shall immediately terminate; (B) each of the following shall
immediately become due and payable, in each case without presentment, demand,
protest or other requirements of any kind, all of which are hereby expressly
waived by each Credit Party: (I) the unpaid principal amount of and accrued
interest on the Loans, (II) an amount equal to the maximum amount that may at
any time be drawn under all Letters of Credit then outstanding (regardless of
whether any beneficiary under any such Letter of Credit shall have presented, or
shall be entitled at such time to present, the drafts or other documents or
certificates required to draw under such Letters of Credit), and (III) all other
Obligations; provided the foregoing shall not affect in any way the obligations
of Lenders under Section 2.4(d), 2.4(e) or 2.5(i); (C) Administrative Agent may
cause Collateral Agent to enforce any and all Liens and security interests
created pursuant to Collateral Documents; and (D) without duplication of clause
(B)(II), Administrative Agent shall direct Company to pay (and Company hereby
agrees upon receipt of such notice, or upon the occurrence of any Event of
Default specified in Sections 8.1(f) and (g) to pay) to Administrative Agent
such additional amounts of cash, to be held as security for Company's
reimbursement Obligations in respect of Letters of Credit then outstanding,
equal to the Letter of Credit Usage at such time.
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SECTION 9. AGENTS
9.1. APPOINTMENT OF THE AGENTS.
(a) Appointment of the Agents. GSCP is hereby appointed
Syndication Agent hereunder, and each Lender hereby authorizes Syndication Agent
to act as its agent in accordance with the terms hereof and the other Credit
Documents. RBC is hereby appointed Administrative Agent and Collateral Agent
hereunder and under the other Credit Documents and each Lender hereby authorizes
Administrative Agent and Collateral Agent to act as its agent in accordance with
the terms hereof and the other Credit Documents. MLPF&S is hereby appointed
Documentation Agent hereunder, and each Lender hereby authorizes Documentation
Agent to act as its agent in accordance with the terms hereof and the other
Credit Documents. Each Agent hereby agrees to act upon the express conditions
contained herein and the other Credit Documents, as applicable. The provisions
of this Section 9 are solely for the benefit of the Agents and Lenders and no
Credit Party shall have any rights as a third party beneficiary of any of the
provisions thereof. In performing its functions and duties hereunder, each Agent
shall act solely as an agent of Lenders and does not assume and shall not be
deemed to have assumed any obligation towards or relationship of agency or trust
with or for Holdings or any of its Subsidiaries. Each of Syndication Agent and
Documentation Agent, without consent of or notice to any party hereto, may
assign any and all of its rights or obligations hereunder to any of its
Affiliates. As of the Closing Date, neither GSCP, in its capacity as Syndication
Agent, nor MLPF&S, in its capacity as Documentation Agent, shall have any
obligations but shall be entitled to all benefits of this Section 9.
(b) Appointment of Supplemental Collateral Agents. It is the
purpose of this Agreement and the other Credit Documents that there shall be no
violation of any law of any jurisdiction denying or restricting the right of
banking corporations or associations to transact business as agent or trustee in
such jurisdiction. It is recognized that in case of litigation under this
Agreement or any of the other Credit Documents, and in particular in case of the
enforcement of any of the Credit Documents, or in case Collateral Agent deems
that by reason of any present or future law of any jurisdiction it may not
exercise any of the rights, powers or remedies granted herein or in any of the
other Credit Documents or take any other action which may be desirable or
necessary in connection therewith, it may be necessary that Collateral Agent
appoint an additional individual or institution as a separate trustee,
co-trustee, collateral agent or collateral co-agent (any such additional
individual or institution being referred to herein individually as a
"SUPPLEMENTAL COLLATERAL AGENT" and collectively as "SUPPLEMENTAL COLLATERAL
AGENTS").
In the event that Collateral Agent appoints a Supplemental
Collateral Agent with respect to any Collateral, (i) each and every right,
power, privilege or duty, and each obligation, expressed or intended by this
Agreement or any of the other Credit Documents to be exercised by or vested in
or conveyed to Collateral Agent or to which Collateral Agent is subject, with
respect to such Collateral shall be exercisable by and vest in such Supplemental
Collateral Agent to the extent, and only to the extent, necessary to enable such
Supplemental Collateral Agent to exercise such rights, powers and privileges
with respect to such Collateral as if such Supplemental Collateral Agent were
Collateral Agent, and to perform such duties with respect to such Collateral,
and every covenant and obligation contained in the Credit Documents and
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necessary to the exercise or performance thereof by and against such Collateral
Agent shall run to and be enforceable by and against either Collateral Agent or
such Supplemental Collateral Agent, and (ii) the provisions of this Section 9
that refer to Collateral Agent shall inure to the benefit of such Supplemental
Collateral Agent and all references therein to Collateral Agent shall be deemed
to be references to Collateral Agent and/or such Supplemental Collateral Agent,
as the context may require. The appointment of a Supplemental Collateral Agent,
other than during an Event of Default, shall be subject to the approval of
Company, such approval not to be unreasonably withheld.
Should any instrument in writing from Company or any other Credit
Party be required by any Supplemental Collateral Agent so appointed by
Collateral Agent for more fully and certainly vesting in and confirming to him
or it such rights, powers, privileges and duties, Company shall, or shall cause
such Credit Party to, execute, acknowledge and deliver any and all such
instruments promptly upon request by Collateral Agent. In case any Supplemental
Collateral Agent, or a successor thereto, shall die, become incapable of acting,
resign or be removed, all the rights, powers, privileges and duties of such
Supplemental Collateral Agent, to the extent permitted by Applicable Law, shall
vest in and be exercised by Collateral Agent until the appointment of a new
Supplemental Collateral Agent.
(c) Control. Each Lender and Collateral Agent hereby appoint each
other Lender as agent for the purpose of perfecting Collateral Agent's security
interest in assets that, in accordance with any governing legislation, can be
perfected by possession or control.
(d) Each Lender (acting for itself and on behalf of each of its
Affiliates which are or become a Lender Counterparty from time to time) confirms
the appointment and designation of Collateral Agent (or any successor thereto)
as the person holding the power of attorney ("FONDE DE POUVOIR") within the
meaning of Article 2692 of the Civil Code for the purposes of the hypothecary
security under each deed of hypothec to be granted by Company and any one or
more Guarantors under the laws of the Province of Quebec and, in such capacity,
Collateral Agent shall hold the hypothecs granted under the laws of the Province
of Quebec as such fonde de pouvoir in the exercise of the rights conferred
thereunder. The execution by Collateral Agent as such fonde de pouvoir prior to
the Closing Date of any deed creating or evidencing any such hypothec is hereby
ratified and confirmed. Notwithstanding the provisions of Section 32 of the Act
respecting the special powers of legal persons (Quebec), Collateral Agent may
acquire and be the holder of any of the debentures secured by any such hypothec.
Each future Lender that becomes a party to this Agreement, by becoming a party
to this Agreement, shall be deemed to have ratified and confirmed (for itself
and on behalf of each of its Affiliates that are or become a Lender Counterparty
from time to time) the appointment of Collateral Agent as fonde de pouvoir.
9.2. POWERS AND DUTIES; GENERAL IMMUNITY.
(a) Powers; Duties Specified. Each Lender irrevocably authorizes
each Agent to take such action on such Lender's behalf and to exercise such
powers, rights and remedies hereunder and under the other Credit Documents as
are specifically delegated or granted to such Agent by the terms hereof and
thereof, together with such powers, rights and remedies as are reasonably
incidental thereto. Each Agent shall have only those duties and responsibilities
that
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are expressly specified herein and the other Credit Documents together with such
powers, rights and remedies as are reasonably incidental thereto. Each Agent may
exercise such powers, rights and remedies and perform such duties by or through
its agents or employees. No Agent shall have, by reason hereof or any of the
other Credit Documents, a fiduciary relationship in respect of any Lender or any
Credit Party; and nothing herein or any of the other Credit Documents, expressed
or implied, is intended to or shall be so construed as to impose upon any Agent
any obligations in respect hereof or any of the other Credit Documents except as
expressly set forth herein or therein.
(b) No Responsibility for Certain Matters. No Agent shall be
responsible to any Lender for the execution, effectiveness, genuineness,
validity, enforceability, collectability or sufficiency hereof or any other
Credit Document or for any representations, warranties, recitals or statements
made herein or therein or made in any written or oral statements or in any
financial or other statements, instruments, reports or certificates or any other
documents furnished or made by any Agent to Lenders or by or on behalf of any
Credit Party to any Agent or any Lender in connection with the Credit Documents
and the transactions contemplated thereby or for the financial condition or
business affairs of any Credit Party or any other Person liable for the payment
of any Obligations, nor shall any Agent be required to ascertain or inquire as
to the performance or observance of any of the terms, conditions, provisions,
covenants or agreements contained in any of the Credit Documents or as to the
use of the proceeds of the Loans or the use of the Letters of Credit or as to
the existence or possible existence of any Event of Default or Default or to
make any disclosures with respect to the foregoing. Anything contained herein to
the contrary notwithstanding, Administrative Agent shall not have any liability
arising from confirmations of the amount of outstanding Loans or the Letter of
Credit Usage or the component amounts thereof.
Without limiting the generality of the foregoing, no Agent shall be
responsible or in any manner liable to any Lender for any Agent's failure to
comply with Section 33-404 of the Arizona Revised Statute in connection with any
and all Mortgages from time to time encumbering real property located in Arizona
(the "ARIZONA MORTGAGES") if certain disclosures required of the Agents, as
beneficiaries under the Arizona Mortgages, including, among other things, the
names and addresses of the Lenders who are the then owners' of the Arizona
Mortgages or any beneficial interest therein or in the Loans or Notes secured
thereby, are not made in accordance with said statute. Each of the Lenders
acknowledges that Agents have made reasonable efforts to comply fully with
Section 33-404, but may not in the future comply fully or at all with said
Section 33-404, but nevertheless holds harmless and indemnifies each Agent for
and against any loss or damage resulting from the invalidity, unenforceability,
or ineffectiveness, now or hereafter, of any and all Arizona Mortgages; the
Lenders acknowledge that the foregoing is an agreed risk and shall not be
construed as negligence, gross negligence or willful misconduct or other
liability whatever of any Agent (or any other Lender).
(c) Exculpatory Provisions. No Agent nor any of its officers,
partners, directors, employees or agents shall be liable to Lenders for any
action taken or omitted by any Agent under or in connection with any of the
Credit Documents except to the extent caused by such Agent's gross negligence or
willful misconduct. Each Agent shall be entitled to refrain from any act or the
taking of any action (including the failure to take an action) in connection
herewith or any of the other Credit Documents or from the exercise of any power,
discretion or
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authority vested in it hereunder or thereunder unless and until such Agent shall
have received instructions in respect thereof from Requisite Lenders (or such
other Lenders as may be required to give such instructions under Section 10.5)
and, upon receipt of such instructions from Requisite Lenders (or such other
Lenders, as the case may be), such Agent shall be entitled to act or (where so
instructed) refrain from acting, or to exercise such power, discretion or
authority, in accordance with such instructions. Without prejudice to the
generality of the foregoing, (i) each Agent shall be entitled to rely, and shall
be fully protected in relying, upon any communication, instrument or document
believed by it to be genuine and correct and to have been signed or sent by the
proper Person or Persons, and shall be entitled to rely and shall be protected
in relying on opinions and judgments of attorneys (who may be attorneys for
Holdings and its Subsidiaries), accountants, experts and other professional
advisors selected by it; and (ii) no Lender shall have any right of action
whatsoever against any Agent as a result of such Agent acting or (where so
instructed) refraining from acting hereunder or any of the other Credit
Documents in accordance with the instructions of Requisite Lenders (or such
other Lenders as may be required to give such instructions under Section 10.5).
(d) Agents Entitled to Act as Lender. The agency hereby created
shall in no way impair or affect any of the rights and powers of, or impose any
duties or obligations upon, any Agent in its individual capacity as a Lender
hereunder. With respect to its participation in the Loans and the Letters of
Credit, each Agent shall have the same rights and powers hereunder as any other
Lender and may exercise the same as if it were not performing the duties and
functions delegated to it hereunder, and the term "Lender" shall, unless the
context clearly otherwise indicates, include each Agent in its individual
capacity. Any Agent and its Affiliates may accept deposits from, lend money to,
own securities of, and generally engage in any kind of banking, trust, financial
advisory or other business with Holdings or any of its Affiliates as if it were
not performing the duties specified herein, and may accept fees and other
consideration from Company for services in connection herewith and otherwise
without having to account for the same to Lenders.
9.3. INDEPENDENT INVESTIGATION BY LENDERS; NO RESPONSIBILITY FOR
APPRAISAL OF CREDITWORTHINESS.
(a) Each Lender represents and warrants that it has made its own
independent investigation of the financial condition and affairs of Holdings and
its Subsidiaries in connection with the making of the Loans and the issuance of
Letters of Credit hereunder and that it has made and shall continue to make its
own appraisal of the creditworthiness of Holdings and its Subsidiaries. No Agent
shall have any duty or responsibility, either initially or on a continuing
basis, to make any such investigation or any such appraisal on behalf of Lenders
or to provide any Lender with any credit or other information with respect
thereto, whether coming into its possession before the making of the Loans or
issuance of any Letter of Credit or at any time or times thereafter, and no
Agent shall have any responsibility with respect to the accuracy of or the
completeness of any information provided to Lenders.
(b) Each Lender, by delivering its signature page to this
Agreement or a Joinder Agreement and funding its Tranche A Term Loan, Tranche B
Term Loan and/or Revolving Loans on the Closing Date or by the funding of any
New Term Loans, as the case may be, shall be deemed to have acknowledged receipt
of, and consented to and approved, each
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Credit Document and each other document required to be approved by any Agent,
Requisite Lenders or Lenders, as applicable on the Closing Date or as of the
date of funding of such New Term Loans.
9.4. RIGHT TO INDEMNITY. Each Lender, in proportion to its Pro Rata
Share, severally agrees to indemnify each Agent and its officers, directors,
employees, agents, attorneys, professional advisors and Affiliates to the extent
that any such Person shall not have been reimbursed by Company, for and against
any and all liabilities, obligations, losses, damages, penalties, actions,
judgments, suits, costs, expenses (including counsel fees and disbursements and
fees and disbursements of any financial advisor engaged by the Agents) or
disbursements of any kind or nature whatsoever which may be imposed on, incurred
by or asserted against an Agent or any other such Persons in exercising the
powers, rights and remedies of an Agent or performing duties of an Agent
hereunder or under the other Credit Documents or otherwise in its capacity as
Agent in any way relating to or arising out of this Agreement or the other
Credit Documents, provided that no Lender shall be liable for any portion of
such liabilities, obligations, losses, damages, penalties, actions, judgments,
suits, costs, expenses or disbursements of an Agent to the extent resulting from
such Agent's gross negligence or willful misconduct as determined by a final
judgment of a court of competent jurisdiction. If any indemnity furnished to an
Agent or any other such Person for any purpose shall, in the opinion of such
Agent, be insufficient or become impaired, such Agent may call for additional
indemnity and cease, or not commence, to do the acts indemnified against until
such additional indemnity is furnished.
9.5. SUCCESSOR AGENT, SWING LINE LENDER AND ISSUING BANK.
(a) Successor Agent. Any Agent may resign at any time by giving 30
days' prior written notice thereof to Lenders and Company. Upon any such notice
of resignation, Requisite Lenders shall have the right, upon five Business Days'
notice to Company, to appoint a successor Agent, which must be a Lender, subject
(if no Event of Default exists) to the approval of Company (not to be
unreasonably withheld). Upon the acceptance of any appointment as an Agent
hereunder by a successor Agent, that successor Agent shall thereupon succeed to
and become vested with all the rights, powers, privileges and duties of the
retiring Agent. Whether or not a successor is appointed, the retiring Agent
shall be discharged from its duties and obligations under this Agreement upon
its resignation becoming effective in accordance with its notice of resignation.
After any retiring Agent's resignation hereunder as an Agent, the provisions of
this Section 9.5(a) shall inure to its benefit as to any actions taken or
omitted to be taken by it while it was an Agent under this Agreement.
Any resignation of an Agent pursuant to this Section 9.5(a) shall
also constitute the resignation of it as Swing Line Lender or Issuing Bank (if
applicable), and any successor Agent appointed pursuant to this Section 9.5(a)
shall, upon its acceptance of such appointment, become the successor Swing Line
Lender or Issuing Bank (if applicable) for all purposes hereunder. In the event
that an Agent acting as Swing Line Lender resigns, Company shall prepay any
outstanding Swing Line Loans made by the retiring or removed Agent in its
capacity as Swing Line Lender.
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(b) Successor Swing Line Lender. The Swing Line Lender may resign
at any time by giving 30 days' prior written notice thereof to Lenders and
Company. Upon any such notice of resignation, Requisite Lenders shall have the
right, upon five Business Days' notice to Company, to appoint a successor Swing
Line Lender, which must be a Revolving Lender, subject (if no Event of Default
exists) to the approval of Company. Upon the acceptance of any appointment as
Swing Line Lender hereunder by a successor Swing Line Lender, that successor
Swing Line Lender shall thereupon succeed to and become vested with all the
rights, powers, privileges and duties of the retiring Swing Line Lender and the
retiring Swing Line Lender shall be discharged from its duties and obligations
under this Agreement. Whether or not a successor is appointed, the retiring
Swing Line Lender shall be discharged from its duties and obligations under this
Agreement upon its resignation becoming effective in accordance with its notice
of resignation. In such event Company shall prepay any outstanding Swing Line
Loans made by the retiring Swing Line Lender. After any retiring Swing Line
Lender's resignation hereunder as Swing Line Lender, the provisions of this
Agreement shall inure to its benefit as to any actions taken or omitted to be
taken by it while it was Swing Line Lender under this Agreement.
(c) Successor Issuing Bank. Issuing Bank may resign at any time by
giving 30 days' prior written notice thereof to Lenders and Company. Upon any
such notice of resignation, Requisite Lenders shall have the right, upon five
Business Days' notice to Company, to appoint a successor Issuing Bank, which
must be a Revolving Lender, subject (if no Event of Default exists) to the
approval of Company (not to be unreasonably withheld). Upon the acceptance of
any appointment as Issuing Bank hereunder by a successor Issuing Bank, that
successor Issuing Bank shall thereupon succeed to and become vested with all the
rights, powers, privileges and duties of the retiring Issuing Bank and the
retiring Issuing Bank shall be discharged from its duties and obligations under
this Agreement. Whether or not a successor is appointed, the retiring Issuing
Bank shall be discharged from its duties and obligations under this Agreement
upon its resignation becoming effective in accordance with its notice of
resignation. After any retiring Issuing Bank's resignation hereunder as Issuing
Bank, the provisions of this Agreement shall inure to its benefit as to any
actions taken or omitted to be taken by it while it was Issuing Bank under this
Agreement.
9.6. COLLATERAL DOCUMENTS AND GUARANTIES. Each Lender hereby further
authorizes Collateral Agent, on behalf of and for the benefit of Lenders, to
enter into each Collateral Document as secured party and to be the agent for and
representative of Lenders under any other Credit Document other than this
Agreement, and each Lender agrees to be bound by the terms of each such Credit
Document, provided that Collateral Agent shall not:
(i) enter into or consent to any material amendment,
modification, termination or waiver of any provision contained in
any such Credit Document, or
(ii) release any Collateral,
except in compliance with Section 10.5, and provided further that, without
further written consent or authorization from Lenders, Collateral Agent may
execute any documents or instruments necessary to:
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(1) release any Lien encumbering any item of
Collateral that is the subject of a sale or other disposition
of assets permitted by this Agreement or to which Requisite
Lenders have otherwise consented,
(2) release any Guarantor Subsidiary from its Guaranty
if all or substantially all of the Capital Stock of such
Guarantor Subsidiary is sold or disposed of to any Person
(other than an Affiliate of Company) pursuant to a sale or
other disposition permitted hereunder or to which Requisite
Lenders have otherwise consented, or
(3) subordinate the Liens of Collateral Agent, on
behalf of Lenders, to any Liens permitted by Section 6.2;
so long as, in the case of a sale of such item of Collateral or Capital Stock
referred to in Section 9.6(a)(ii)(1) or (2), the requirements of Section 10.5
are satisfied. Anything contained in any of the Credit Documents to the contrary
notwithstanding, the Credit Parties, Collateral Agent and each Lender hereby
agree that:
(1) no Lender shall have any right individually to
realize upon any of the Collateral under any Collateral
Document or to enforce any Guaranty, it being understood and
agreed that all powers, rights and remedies under the
Collateral Documents and the Guaranties may be exercised
solely by Collateral Agent for the benefit of Lenders in
accordance with the terms thereof, and
(2) in the event of a foreclosure by Collateral Agent
on any of the Collateral pursuant to a public or private sale,
Collateral Agent or any Lender may be the purchaser of any or
all of such Collateral at any such sale and Collateral Agent,
as agent for and representative of Secured Parties (but not
any Lender or Lenders in its or their respective individual
capacities unless Requisite Lenders shall otherwise agree in
writing) shall be entitled, for the purpose of bidding and
making settlement or payment of the purchase price for all or
any portion of the Collateral sold at any such public sale, to
use and apply any of the Obligations as a credit on account of
the purchase price for any collateral payable by Collateral
Agent at such sale.
9.7. ADMINISTRATIVE AGENT MAY FILE PROOFS OF CLAIM. In case of the
pendency of any receivership, insolvency, liquidation, bankruptcy,
reorganization, arrangement, adjustment, composition or other judicial
proceeding relative to Company or any of its Subsidiaries, Administrative Agent
(irrespective of whether the principal of any Loan shall then be due and payable
as herein expressed or by declaration or otherwise and irrespective of whether
Administrative Agent shall have made any demand on Company) shall be entitled
and empowered, by intervention in such proceeding or otherwise:
(a) to file and prove a claim for the whole amount of principal
and interest owing and unpaid in respect of the Loans or Letters of Credit
and any other Obligations
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that are owing and unpaid and to file such other papers or documents as
may be necessary or advisable in order to have the claims of Lenders and
the Agents (including any claim for the reasonable compensation, expenses,
disbursements and advances of Lenders and the Agents and their agents and
counsel and all other amounts due Lenders and the Agents hereunder)
allowed in such judicial proceeding; and
(b) to collect and receive any moneys or other property payable or
deliverable on any such claims and to distribute the same;
and any custodian, receiver, assignee, trustee, liquidator, sequestrator or
other similar official in any such judicial proceeding is hereby authorized by
each Lender to make such payments to Administrative Agent and, in the event that
Administrative Agent shall consent to the making of such payments directly to
Lenders, to pay to Administrative Agent any amount due for the reasonable
compensation, expenses, disbursements and advances of the Agents and their
agents and counsel, and any other amounts due the Agents hereunder.
Nothing herein contained shall be deemed to authorize Administrative Agent
to authorize or consent to or accept or adopt on behalf of any Lender any plan
of reorganization, arrangement, adjustment or composition affecting the
Obligations or the rights of any Lenders or to authorize Administrative Agent to
vote in respect of the claim of any Lender in any such proceeding.
SECTION 10. MISCELLANEOUS
10.1. NOTICES. Unless otherwise specifically provided herein, any notice
or other communication herein required or permitted to be given to a Credit
Party or an Agent, Swing Line Lender, Issuing Bank, an Issuing Lender or a
Lender shall be sent to such Person's address as set forth on Appendix B or
otherwise advised to Administrative Agent in writing. Each notice hereunder
shall be in writing and may be personally served, telexed or sent by
telefacsimile or mail or courier service and shall be deemed to have been given
when delivered in person or by courier service and signed for against receipt
thereof, upon receipt of telefacsimile or telex, or three Business Days after
depositing it in the mail with postage prepaid and properly addressed; provided
no notice to any Agent or the Issuing Bank shall be effective until received by
such party.
10.2. EXPENSES. Company agrees to pay promptly (a) all the reasonable
out-of-pocket costs and expenses of preparation of the Credit Documents and any
consents, amendments, waivers or other modifications thereto; (b) the reasonable
fees, expenses and disbursements of counsel to the Initial Agents and their
successors in their capacity as Agents in all applicable jurisdictions in
connection with the negotiation, preparation, execution and administration of
the Credit Documents and any consents, amendments, waivers or other
modifications thereto and any other documents or matters requested by Company;
(c) all reasonable costs and expenses of creating and perfecting Liens in favor
of Collateral Agent, for the benefit of Lenders pursuant hereto, including
filing and recording fees, expenses and taxes, stamp or documentary taxes,
search fees, title insurance premiums and reasonable fees, expenses and
disbursements of counsel to each Agent in all applicable jurisdictions; (d) all
the reasonable costs, fees, expenses and disbursements of any auditors,
accountants, consultants or appraisers appointed with the consent of Company,
such consent not to be unreasonably withheld (provided no such consent
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shall be required for an appointment during an Event of Default); (e) all the
reasonable costs and expenses (including the reasonable fees, expenses and
disbursements of any appraisers, consultants, advisors and agents employed or
retained by Collateral Agent and its counsel) in connection with the custody or
preservation of any of the Collateral; (f) all other reasonable out-of-pocket
costs and expenses incurred by each Agent in connection with the syndication of
the Loans and Commitments and the negotiation, preparation and execution of the
Credit Documents and any consents, amendments, waivers or other modifications
thereto and the transactions contemplated thereby; and (g) all reasonable
out-of-pocket costs and expenses, including reasonable attorneys' fees in all
applicable jurisdictions and costs of settlement, incurred by any Agent, Issuing
Bank, any Issuing Lender and Lenders in enforcing any Obligations of or in
collecting any payments due from any Credit Party hereunder or under the other
Credit Documents after the occurrence and during the continuance of a Default or
an Event of Default, (including in connection with the sale of, collection from,
or other realization upon any of the Collateral or the enforcement of the
Guaranty) or in connection with any refinancing or restructuring of the credit
arrangements provided hereunder in the nature of a "work-out" or pursuant to any
insolvency or bankruptcy cases or proceedings.
10.3. INDEMNITY.
(a) In addition to the payment of expenses pursuant to Section
10.2, whether or not the transactions contemplated hereby shall be consummated,
each Credit Party agrees to defend (subject to Indemnitees' selection of
counsel), indemnify, pay and hold harmless, each Agent and Lender and the
officers, partners, directors, trustees, employees, agents and Affiliates of
each Agent and each Lender (each, an "INDEMNITEE"), from and against any and all
Indemnified Liabilities; provided no Credit Party shall have any obligation to
any Indemnitee hereunder with respect to any Indemnified Liabilities to the
extent such Indemnified Liabilities arise from the gross negligence, bad faith
or willful misconduct of that Indemnitee or its related persons. To the extent
that the undertakings to defend, indemnify, pay and hold harmless set forth in
this Section 10.3 may be unenforceable in whole or in part because they are
violative of any law or public policy, the applicable Credit Party shall
contribute the maximum portion that it is permitted to pay and satisfy under
applicable law to the payment and satisfaction of all Indemnified Liabilities
incurred by Indemnitees or any of them.
(b) To the extent permitted by applicable law, no Credit Party
shall assert, and each Credit Party hereby waives, any claim against Lenders,
the Agents and their respective Affiliates, directors, employees, attorneys or
agents, on any theory of liability, for special, indirect, consequential or
punitive damages (as opposed to direct or actual damages) (whether or not the
claim therefor is based on contract, tort or duty imposed by any applicable
legal requirement) arising out of, in connection with, arising out of, as a
result of, or in any way related to, this Agreement or any Credit Document or
any agreement or instrument contemplated hereby or thereby or referred to herein
or therein, the transactions contemplated hereby or thereby, any Loans or the
use of the proceeds thereof or any act or omission or event occurring in
connection therewith, other than such damages to the extent arising out of or as
a result of the gross negligence, willful misconduct or bad faith of such
Person, and each Credit Party hereby waives, releases and agrees not to sue upon
any such claim or any such damages, whether or not accrued and whether or not
known or suspected to exist in its favor.
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10.4. SET-OFF. In addition to any rights now or hereafter granted under
applicable law and not by way of limitation of any such rights, during the
existence of any Event of Default each Lender or its Affiliates is hereby
authorized by each Credit Party at any time or from time to time, without notice
to any Credit Party or to any other Person (other than Administrative Agent),
any such notice being hereby expressly waived, to set off and to appropriate and
to apply any and all deposits (general or special, including Indebtedness
evidenced by certificates of deposit, whether matured or unmatured, but not
including trust accounts) and any other Indebtedness at any time held or owing
by such Lender or its Affiliates to or for the credit or the account of any
Credit Party against and on account of the obligations and liabilities of any
Credit Party to such Lender hereunder, the Letters of Credit and participations
therein and under the other Credit Documents, including all claims of any nature
or description arising out of or connected hereto, the Letters of Credit and
participations therein or with any other Credit Document, irrespective of
whether or not (a) such Lender shall have made any demand hereunder or (b) the
principal of or the interest on the Loans or any amounts in respect of the
Letters of Credit or any other amounts due hereunder shall have become due and
payable pursuant to Section 2 and although such obligations and liabilities, or
any of them, may be contingent or unmatured.
10.5. AMENDMENTS AND WAIVERS.
(a) Requisite Lenders' Consent. Subject to Sections 10.5(b) and
10.5(c), no amendment, modification, termination or waiver of any provision of
the Credit Documents, or consent to any departure by any Credit Party therefrom,
shall in any event be effective without the written concurrence of the Requisite
Lenders and Company.
(b) Affected Lenders' Consent. Without the written consent of each
Lender (other than a Defaulting Lender) that would be affected thereby and
Company, no amendment, modification, termination, or consent shall be effective
if the effect thereof would:
(i) extend the scheduled final maturity of any Loan or Note;
(ii) waive, reduce or postpone any scheduled repayment
(including any Installment but not any prepayment);
(iii) extend the stated expiration date of any Letter of
Credit beyond the Revolving Commitment Termination Date;
(iv) reduce the rate of interest on any Loan (other than any
waiver of any increase in the interest rate applicable to any Loan
pursuant to Section 2.12) or any fee payable hereunder;
(v) extend the time for payment of any such interest or
fees;
(vi) reduce the principal amount of any Loan or any
reimbursement obligation in respect of any Letter of Credit, or
change the currency of payment of any Obligation;
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(vii) amend, modify, terminate or waive any provision of this
Section 10.5(b) or Section 10.5(c);
(viii) amend the definition of "Requisite Lenders" or "Pro
Rata Share"; provided, with the consent of Requisite Lenders,
additional extensions of credit pursuant hereto may be included in
the determination of "Requisite Lenders" or "Pro Rata Share" on
substantially the same basis as the Term Loan Commitments, the Term
Loans, the Revolving Commitments and the Revolving Loans are
included on the Closing Date;
(ix) release all or substantially all of the Collateral or
all or substantially all of the Guarantors from the Guaranty except
as expressly provided in the Credit Documents; or
(x) consent to the assignment or transfer by any Credit
Party of any of its rights and obligations under any Credit
Document.
(c) Other Consents. No amendment, modification, termination or
waiver of any provision of the Credit Documents, or consent to any departure by
any Credit Party therefrom, shall:
(i) increase any Revolving Commitment of any Lender over the
amount thereof then in effect without the consent of such Lender and
Company; provided no amendment, modification or waiver of any
condition precedent, covenant, Default or Event of Default shall
constitute an increase in any Revolving Commitment of any Lender;
(ii) amend, modify, terminate or waive any provision hereof
relating to (x) the Swing Line Subcommitment or the Swing Line Loans
without the consent of Swing Line Lender and Company, (y) the Letter
of Credit Sublimit without the consent of Issuing Bank and Company
or (z) any Letter of Credit without the consent of each applicable
Issuing Lender and Company;
(iii) amend the definition of "Requisite Class Lenders"
without the consent of Requisite Class Lenders of each Class and
Company; provided, with the consent of the Requisite Lenders,
additional extensions of credit pursuant hereto may be included in
the determination of such "Requisite Class Lenders" on substantially
the same basis as the Term Loan Commitments, the Term Loans, the
Revolving Commitments and the Revolving Loans are included on the
Closing Date;
(iv) alter the required application of any repayments,
prepayments or amounts as between Classes pursuant to Section 2.17
or 2.27 without the consent of Requisite Class Lenders of each Class
which is being allocated a lesser repayment, prepayment or amount as
a result thereof and Company; provided Requisite Lenders may waive,
in whole or in part, any prepayment so long as the application, as
between Classes, of any portion of such prepayment which is still
required to be made is not altered;
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(v) amend, modify, terminate or waive any obligation of
Lenders relating to the purchase of participations in Letters of
Credit as provided in Section 2.5(f) without the written consent of
Administrative Agent and of Issuing Bank and Company; or
(vi) amend, modify, terminate or waive any provision of
Section 9 as the same applies to any Agent, or any other provision
hereof as the same applies to the rights or obligations of any
Agent, in each case without the consent of such Agent and Company.
(d) Execution of Amendments, etc. Administrative Agent may, but
shall have no obligation to, with the concurrence of any Lender, execute
amendments, modifications, waivers or consents on behalf of such Lender. Any
waiver or consent shall be effective only in the specific instance and for the
specific purpose for which it was given. No notice to or demand on any Credit
Party in any case shall entitle any Credit Party to any other or further notice
or demand in similar or other circumstances. Any amendment, modification,
termination, waiver or consent effected in accordance with this Section 10.5
shall be binding upon each Lender at the time outstanding, each future Lender.
(e) Offer to Prepay. Notwithstanding anything in this Agreement to
the contrary other than Section 2.17(c), any Offer to Prepay shall be accepted
by all Lenders to which such Offer to Prepay was made unless three Business Days
prior to the proposed redemption date the Requisite Lenders give their consent
for such Offer to Prepay to be declined, in which case it shall be declined by
all Lenders.
10.6. SUCCESSORS AND ASSIGNS; PARTICIPATIONS.
(a) Generally. This Agreement shall be binding upon the parties
hereto and their respective successors and assigns and shall inure to the
benefit of the parties hereto and the successors and assigns of Lenders. No
Credit Party's rights or obligations hereunder nor any interest therein may be
assigned or delegated by any Credit Party without the prior written consent of
all Lenders. Nothing in this Agreement, expressed or implied, shall be construed
to confer upon any Person (other than the parties hereto, their respective
successors and assigns permitted hereby and, to the extent expressly
contemplated hereby, Affiliates of each of the Agents and Lenders) any legal or
equitable right, remedy or claim under or by reason of this Agreement.
(b) Register. Company, Administrative Agent and Lenders shall deem
and treat the Persons listed as Lenders in the Register as the holders and
owners of the corresponding Commitments and Loans listed therein for all
purposes hereof, and no assignment or transfer of any such Commitment or Loan
shall be effective, in each case, unless and until an Assignment Agreement
effecting the assignment or transfer thereof shall have been delivered to and
accepted by Administrative Agent and recorded in the Register as provided in
Section 10.6(e). Prior to such recordation, all amounts owed with respect to the
applicable Commitment or Loan shall be owed to the Lender listed in the Register
as the owner thereof, and any request, authority or consent of any Person who,
at the time of making such request or giving such authority or
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consent, is listed in the Register as a Lender shall be conclusive and binding
on any subsequent holder, assignee or transferee of the corresponding
Commitments or Loans.
(c) Right to Assign.
(i) Each Lender shall have the right at any time to sell,
assign or transfer to any Eligible Assignee all or a portion of its
rights and obligations under this Agreement, including, without
limitation, all or a portion of its Commitment or Loans owing to it
or other Obligation (provided, however, that each such assignment
shall be of a uniform, and not varying, percentage of all rights and
obligations under and in respect of any Loan and any related
Commitments); provided that, in the case of assignments (except in
the case of assignments made by or to GSCP or any of its Affiliates)
of Revolving Loans or Revolving Commitments to any such Eligible
Assignee that is not a Lender, an Affiliate of a Lender or a Related
Fund, such assignments must be consented to by each of
Administrative Agent and, with respect to Revolving Commitments,
Issuing Bank and, other than during the existence of an Event of
Default, Company (such consents not to be unreasonably withheld or
delayed). Each Lender may make, carry or transfer Loans at, to or
for the account any of its branch offices or the office of an
Affiliate of such Lender; provided that, in either case, such office
is an Eligible Assignee.
(ii) Each assignment pursuant to Section 10.6(c)(i) (other
than in the case of assignments to a Lender, an Affiliate of a
Lender or a Related Fund) shall be in an aggregate amount of not
less than (A) Can$5.0 million (including the Canadian Dollar
Equivalent of any amount denominated in U.S. Dollars) (or such
lesser amount as may be agreed to by Company and Administrative
Agent or as shall constitute the aggregate amount of the Revolving
Commitments and Revolving Loans of the assigning Lender) with
respect to the assignment of the Revolving Commitments and Revolving
Loans, (B) Can$1.0 million (or such lesser amount as may be agreed
to by Company and Administrative Agent) with respect to the
assignment of Tranche A Term Loans and (C) U.S.$1.0 million (or such
lesser amount as may be agreed to by Company and Administrative
Agent or as shall constitute the aggregate amount of the Tranche B
Term Loans or New Term Loans of a Series of the assigning Lender)
with respect to the assignment of Tranche B Term Loans or New Term
Loans; provided that if an assignment with respect to Revolving
Commitments and Revolving Loans or Tranche A Term Loans leaves the
assigning Lender with less than Can$1.0 million but greater than
Can$0 of Revolving Commitments or Tranche A Term Loans, as
applicable, after such assignment, such assignment shall not be
permitted pursuant to this Section 10.6(c).
(d) Mechanics. The assigning Lender and the assignee thereof shall
execute and deliver to Administrative Agent an Assignment Agreement, together
with (i) a processing and recordation fee of Can$3,500 (such fee need not be
paid in connection with assignments to a Lender, an Affiliate of a Lender or a
Related Fund or by or to Administrative Agent or Syndication Agent or their
respective Affiliates or in connection with assignments of Tranche B
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Term Loans) and (ii) such forms, certificates or other evidence, if any, with
respect to Canadian and United States federal income tax withholding matters as
the assignee under such Assignment Agreement may be required to deliver to
Administrative Agent, including those pursuant to Section 2.22(d).
(e) Notice of Assignment. Upon its receipt of a duly executed and
completed Assignment Agreement, together with the processing and recordation fee
referred to in Section 10.6(d) (and any forms, certificates or other evidence
required by this Agreement in connection therewith), Administrative Agent shall
record the information contained in such Assignment Agreement in the Register,
shall give prompt notice thereof to Syndication Agent and Company, and shall
maintain a copy of such Assignment Agreement.
(f) Representations and Warranties of Assignee. Each Lender, upon
execution and delivery hereof or upon executing and delivering an Assignment
Agreement, as the case may be, represents and warrants as of the Closing Date or
as of the applicable Effective Date (as defined in the applicable Assignment
Agreement) that (i) it is an Eligible Assignee; (ii) it has experience and
expertise in the making of or investing in commitments or loans such as the
applicable Commitments or Loans, as the case may be; and (iii) it will make or
invest in, as the case may be, its Commitments or Loans for its own account in
the ordinary course of its business and without a view to distribution of such
Commitments or Loans within the meaning of the Securities Act or the Exchange
Act or other United States or Canadian securities laws (it being understood
that, subject to the provisions of this Section 10.6, the disposition of such
Commitments or Loans or any interests therein shall at all times remain within
its exclusive control).
(g) Effect of Assignment. Subject to the terms and conditions of
this Section 10.6, as of the "Effective Date" specified in the applicable
Assignment Agreement: (i) the assignee thereunder shall have the rights and
obligations of a "Lender" hereunder to the extent such rights and obligations
hereunder have been assigned to it pursuant to such Assignment Agreement and
shall thereafter be a party hereto and a "Lender" for all purposes hereof with
respect to the interests assigned; (ii) the assigning Lender thereunder shall,
to the extent that rights and obligations hereunder have been assigned thereby
pursuant to such Assignment Agreement, relinquish its rights (other than any
rights which survive the termination hereof under Section 10.10) and be released
from its obligations hereunder (and, in the case of an Assignment Agreement
covering all or the remaining portion of an assigning Lender's rights and
obligations hereunder, such Lender shall cease to be a party hereto; provided
anything contained in any of the Credit Documents to the contrary
notwithstanding, (x) an Issuing Lender shall continue to have all rights and
obligations thereof with respect to such Letters of Credit until the
cancellation or expiration of such Letters of Credit and the reimbursement of
any amounts drawn thereunder and (y) such assigning Lender shall continue to be
entitled to the benefit of all indemnities hereunder as specified herein with
respect to matters arising out of the prior involvement of such assigning Lender
as a Lender hereunder); (iii) the Commitments shall be modified to reflect the
Commitment of such assignee and any Revolving Commitment of such assigning
Lender, if any; and (iv) if any such assignment occurs after the issuance of any
Note hereunder, the assigning Lender shall, upon the effectiveness of such
assignment or as promptly thereafter as practicable, surrender its applicable
Notes to Administrative Agent for cancellation, and thereupon Company shall
issue and deliver new Notes, if so requested by the assignee and/or
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assigning Lender, to such assignee and/or to such assigning Lender, with
appropriate insertions, to reflect the new Revolving Commitments and/or
outstanding Loans of the assignee and/or the assigning Lender.
(h) Participations. Each Lender shall have the right at any time
to sell one or more participations to any Eligible Assignee in all or any part
of its Commitments, Loans or in any other Obligation. The holder of any such
participation, other than an Affiliate of the Lender granting such
participation, shall not be entitled to require such Lender to take or omit to
take any action hereunder except with respect to any amendment, modification or
waiver that would (i) extend the final scheduled maturity of any Loan, Note or
Letter of Credit (unless such Letter of Credit is not extended beyond the
Revolving Commitment Termination Date) in which such participant is
participating, or reduce the rate of interest (other than any waiver of any
increase in the interest rate applicable pursuant to Section 2.12) or any fee
thereon or extend the time for payment of any such interest or fees or reduce
the principal amount thereof, or increase the amount of the participant's
participation over the amount thereof then in effect (it being understood that a
waiver of any Default or Event of Default or of a mandatory reduction in the
Commitment shall not constitute a change in the terms of such participation, and
that an increase in any Commitment or Loan shall be permitted without the
consent of any participant if the participant's participation is not increased
as a result thereof) or (ii) consent to the assignment or transfer by Company of
any of its rights and obligations under this Agreement. Company agrees that each
participant shall be entitled to the benefits of Sections 2.20(c), 2.21 and 2.22
to the same extent as if it were a Lender and had acquired its interest by
assignment pursuant to paragraph (c) of this Section; provided, a participant
shall not be entitled to receive any greater payment under Section 2.21 or 2.22
than the applicable Lender would have been entitled to receive with respect to
the participation sold to such participant. To the extent permitted by law, each
participant also shall be entitled to the benefits of Section 10.4 as though it
were a Lender, provided such Participant agrees to be subject to Section 2.19 as
though it were a Lender.
(i) Certain Other Assignments. Any Lender may at any time assign
all or any portion of its rights under this Agreement and its Notes to a Federal
Reserve Bank without notice to or consent of any Person. No such assignment
shall release the transferor Lender from its obligations hereunder. In addition,
any Lender may assign all or any portion of its rights under this Agreement and
its Notes to any Person other than a Federal Reserve Bank, without notice to or
consent of any Person, to secure obligations of such Lender; provided no Lender,
as between Company and such Lender, shall be relieved of any of its obligations
hereunder as a result of any such assignment and pledge, and provided, further,
that in no event shall the applicable pledgee, assignee or trustee be considered
to be a "Lender" and in no event shall any such pledgee, assignee or trustee be
entitled to require the assigning or pledging Lender to take or omit any action
hereunder.
10.7. CANADIAN DOLLAR EQUIVALENT CALCULATIONS. For purposes of this
Agreement, the Canadian Dollar Equivalent of each Loan that is a U.S. Revolving
Loan and the Canadian Dollar Equivalent of the stated amount of each Letter of
Credit that is a Letter of Credit denominated in U.S. Dollars shall be
calculated on the date when any such Loan is made, such Letter of Credit is
issued, on the first Business Day of each month and at such other times as
designated by Administrative Agent. Such Canadian Dollar Equivalent shall remain
in effect until the same is recalculated by Administrative Agent as provided
above and notice of such recalculation is
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received by Company, it being understood that until such notice of such
recalculation is received, the Canadian Dollar Equivalent shall be that Canadian
Dollar Equivalent as last reported to Company by Administrative Agent.
10.8. JUDGMENT CURRENCY.
(a) Company's obligation hereunder and under the other Credit
Documents to make payments in the applicable Approved Currency (pursuant to such
obligation, the "OBLIGATION CURRENCY") shall not be discharged or satisfied by
any tender or recovery pursuant to any judgment expressed in or converted into
any currency other than the Obligation Currency, except to the extent that such
tender or recovery results in the effective receipt by Administrative Agent or
the respective Lender of the full amount of the Obligation Currency expressed to
be payable to Administrative Agent or such Lender under this Agreement or the
other Credit Documents. If, for the purpose of obtaining or enforcing judgment
against Company in any court or in any jurisdiction, it becomes necessary to
convert into or from any currency other than the Obligation Currency (such other
currency being hereinafter referred to as the "JUDGMENT CURRENCY") an amount due
in the Obligation Currency, the conversion shall be made, if relevant, at the
Canadian Dollar, U.S. Dollar Equivalent and, in the case of other currencies,
the rate of exchange (as quoted by Administrative Agent or if Administrative
Agent does not quote a rate of exchange on such currency, by a known dealer in
such currency designated by Administrative Agent) determined, in each case, as
of the Business Day immediately preceding the day on which the judgment is given
(such Business Day being hereinafter referred to as the "JUDGMENT CURRENCY
CONVERSION DATE").
(b) If there is a change in the rate of exchange prevailing
between the Judgment Currency Conversion Date and the date of actual payment of
the amount due, Company covenants and agrees to pay, or cause to be paid, such
additional amounts, if any (but in any event not a lesser amount) as may be
necessary to ensure that the amount paid 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 Judgment Currency stipulated in the judgment or judicial
award at the rate of exchange prevailing on the Judgment Currency Conversion
Date.
(c) For purposes of determining the Relevant Currency Equivalent
or any other rate of exchange for this Section 10.8, such amounts shall include
any premium and costs payable in connection with the purchase of the Obligation
Currency.
10.9. INDEPENDENCE OF COVENANTS. All covenants hereunder shall be given
independent effect so that if a particular action or condition is not permitted
by any of such covenants, the fact that it would be permitted by an exception
to, or would otherwise be within the limitations of, another covenant shall not
avoid the occurrence of a Default or an Event of Default if such action is taken
or condition exists.
10.10. SURVIVAL OF REPRESENTATIONS, WARRANTIES AND AGREEMENTS. All
representations, warranties and agreements made herein shall survive the
execution and delivery hereof and the making of any Credit Extension.
Notwithstanding anything herein or implied by law to the contrary, the
agreements of each Credit Party set forth in Sections 2.20(c) (to the
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extent provided therein), 2.21 (to the extent provided therein), 2.22 (to the
extent provided therein), 10.2, 10.3 and 10.4 and the agreements of Lenders set
forth in Sections 2.19, 9.2(c) and 9.4 shall survive the payment of the Loans,
the cancellation or expiration of the Letters of Credit and the reimbursement of
any amounts drawn thereunder, and the termination hereof.
10.11. NO WAIVER; REMEDIES CUMULATIVE. No failure or delay on the part of
any Agent or any Lender in the exercise of any power, right or privilege
hereunder or under any other Credit Document shall impair such power, right or
privilege or be construed to be a waiver of any default or acquiescence therein,
nor shall any single or partial exercise of any such power, right or privilege
preclude other or further exercise thereof or of any other power, right or
privilege. The rights, powers and remedies given to each Agent and each Lender
hereby are cumulative and shall be in addition to and independent of all rights,
powers and remedies existing by virtue of any statute or rule of law or in any
of the other Credit Documents or any of the Hedge Agreements. Any forbearance or
failure to exercise, and any delay in exercising, any right, power or remedy
hereunder shall not impair any such right, power or remedy or be construed to be
a waiver thereof, nor shall it preclude the further exercise of any such right,
power or remedy.
10.12. MARSHALLING; PAYMENTS SET ASIDE. Neither any Agent nor any Lender
shall be under any obligation to marshal any assets in favor of any Credit Party
or any other Person or against or in payment of any or all of the Obligations.
To the extent that any Credit Party makes a payment or payments to
Administrative Agent or Lenders (or to Administrative Agent, on behalf of
Lenders), or Administrative Agent or Lenders enforce any security interests or
exercise their rights of setoff, and such payment or payments or the proceeds of
such enforcement or setoff or any part thereof are subsequently invalidated,
declared to be fraudulent or preferential, set aside and/or required to be
repaid to a trustee, receiver or any other party under any bankruptcy law, any
other state or federal law, common law or any equitable cause, then, to the
extent of such recovery, the obligation or part thereof originally intended to
be satisfied, and all Liens, rights and remedies therefor or related thereto,
shall be revived and continued in full force and effect as if such payment or
payments had not been made or such enforcement or setoff had not occurred.
10.13. SEVERABILITY. In case any provision in or obligation hereunder or
any Note shall be invalid, illegal or unenforceable in any jurisdiction, the
validity, legality and enforceability of the remaining provisions or
obligations, or of such provision or obligation in any other jurisdiction, shall
not in any way be affected or impaired thereby.
10.14. OBLIGATIONS SEVERAL; INDEPENDENT NATURE OF LENDERS' RIGHTS. The
obligations of Lenders hereunder are several and no Lender shall be responsible
for the obligations or Commitment of any other Lender hereunder. Nothing
contained herein or in any other Credit Document, and no action taken by Lenders
pursuant hereto or thereto, shall be deemed to constitute Lenders as a
partnership, an association, a joint venture or any other kind of entity. 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 hereof and it shall not be necessary for any other Lender to
be joined as an additional party in any proceeding for such purpose.
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10.15. HEADINGS. Section headings herein are included herein for
convenience of reference only and shall not constitute a part hereof for any
other purpose or be given any substantive effect.
10.16. APPLICABLE LAW. THIS AGREEMENT AND THE RIGHTS AND OBLIGATIONS OF
THE PARTIES HEREUNDER SHALL BE GOVERNED BY, AND SHALL BE CONSTRUED AND ENFORCED
IN ACCORDANCE WITH, THE LAWS OF THE STATE OF NEW YORK WITHOUT REGARD TO CONFLICT
OF LAWS PRINCIPLES THEREOF THAT WOULD REQUIRE THE APPLICATION OF THE LAWS OF
ANOTHER JURISDICTION.
10.17. CONSENT TO JURISDICTION. ALL JUDICIAL PROCEEDINGS BROUGHT AGAINST
ANY CREDIT PARTY ARISING OUT OF OR RELATING HERETO OR ANY OTHER CREDIT DOCUMENT,
OR ANY OF THE OBLIGATIONS, MAY BE BROUGHT IN ANY STATE OR FEDERAL COURT OF
COMPETENT JURISDICTION IN THE STATE, COUNTY AND CITY OF NEW YORK. BY EXECUTING
AND DELIVERING THIS AGREEMENT, EACH CREDIT PARTY, FOR ITSELF AND IN CONNECTION
WITH ITS PROPERTIES, IRREVOCABLY (a) ACCEPTS GENERALLY AND UNCONDITIONALLY THE
NONEXCLUSIVE JURISDICTION AND VENUE OF SUCH COURTS; (b) WAIVES ANY DEFENSE OF
FORUM NON CONVENIENS; (c) AGREES THAT SERVICE OF ALL PROCESS IN ANY SUCH
PROCEEDING IN ANY SUCH COURT MAY BE MADE BY REGISTERED OR CERTIFIED MAIL, RETURN
RECEIPT REQUESTED, TO THE APPLICABLE CREDIT PARTY AT ITS ADDRESS PROVIDED IN
ACCORDANCE WITH SECTION 10.1; (d) AGREES THAT SERVICE AS PROVIDED IN CLAUSE (c)
ABOVE IS SUFFICIENT TO CONFER PERSONAL JURISDICTION OVER THE APPLICABLE CREDIT
PARTY IN ANY SUCH PROCEEDING IN ANY SUCH COURT, AND OTHERWISE CONSTITUTES
EFFECTIVE AND BINDING SERVICE IN EVERY RESPECT; AND (e) AGREES AGENTS AND
LENDERS RETAIN THE RIGHT TO SERVE PROCESS IN ANY OTHER MANNER PERMITTED BY LAW
OR TO BRING PROCEEDINGS AGAINST ANY CREDIT PARTY IN THE COURTS OF ANY OTHER
JURISDICTION.
10.18. WAIVER OF JURY TRIAL. EACH OF THE PARTIES HERETO HEREBY AGREES TO
WAIVE ITS RESPECTIVE RIGHTS TO A JURY TRIAL OF ANY CLAIM OR CAUSE OF ACTION
BASED UPON OR ARISING HEREUNDER OR UNDER ANY OF THE OTHER CREDIT DOCUMENTS OR
ANY DEALINGS BETWEEN THEM RELATING TO THE SUBJECT MATTER OF THIS LOAN
TRANSACTION OR THE LENDER/COMPANY RELATIONSHIP THAT IS BEING ESTABLISHED. THE
SCOPE OF THIS WAIVER IS INTENDED TO BE ALL-ENCOMPASSING OF ANY AND ALL DISPUTES
THAT MAY BE FILED IN ANY COURT AND THAT RELATE TO THE SUBJECT MATTER OF THIS
TRANSACTION, INCLUDING CONTRACT CLAIMS, TORT CLAIMS, BREACH OF DUTY CLAIMS AND
ALL OTHER COMMON LAW AND STATUTORY CLAIMS. EACH PARTY HERETO ACKNOWLEDGES THAT
THIS WAIVER IS A MATERIAL INDUCEMENT TO ENTER INTO A BUSINESS RELATIONSHIP, THAT
EACH HAS ALREADY RELIED ON THIS WAIVER IN ENTERING INTO THIS AGREEMENT,
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AND THAT EACH WILL CONTINUE TO RELY ON THIS WAIVER IN ITS RELATED FUTURE
DEALINGS. EACH PARTY HERETO FURTHER WARRANTS AND REPRESENTS THAT IT HAS REVIEWED
THIS WAIVER WITH ITS LEGAL COUNSEL AND THAT IT KNOWINGLY AND VOLUNTARILY WAIVES
ITS JURY TRIAL RIGHTS FOLLOWING CONSULTATION WITH LEGAL COUNSEL. THIS WAIVER IS
IRREVOCABLE, MEANING THAT IT MAY NOT BE MODIFIED EITHER ORALLY OR IN WRITING
(OTHER THAN BY A MUTUAL WRITTEN WAIVER SPECIFICALLY REFERRING TO THIS SECTION
10.18 AND EXECUTED BY EACH OF THE PARTIES HERETO), AND THIS WAIVER SHALL APPLY
TO ANY SUBSEQUENT AMENDMENTS, RENEWALS, SUPPLEMENTS OR MODIFICATIONS HERETO OR
ANY OF THE OTHER CREDIT DOCUMENTS OR TO ANY OTHER DOCUMENTS OR AGREEMENTS
RELATING TO THE LOANS MADE HEREUNDER. IN THE EVENT OF LITIGATION, THIS AGREEMENT
MAY BE FILED AS A WRITTEN CONSENT TO A TRIAL BY THE COURT.
10.19. CONFIDENTIALITY. Each Lender shall hold all non-public information
regarding Holdings and its Subsidiaries and their businesses in accordance with
such Lender's customary procedures for handling confidential information of such
nature, it being understood and agreed by Company that, in any event, a Lender
may make (i) disclosures of such information to Affiliates of such Lender and to
their agents and advisors to the extent such Persons have agreed to hold such
information confidential, (ii) disclosures of such information reasonably
required by any bona fide or potential assignee, transferee or participant in
connection with the contemplated assignment, transfer or participation by such
Lender of any Loans or any participations therein or by any direct or indirect
contractual counterparties (or the professional advisors thereto) in Hedge
Agreements (provided such counterparties and advisors are advised of and agree
to be bound by the provisions of this Section 10.19), (iii) disclosure to any
rating agency when required by it; provided, prior to any such disclosure in
connection with a rating of a Lender or its portfolio, each rating agency shall
undertake to preserve the confidentiality of such information, and (iv)
disclosures required or requested by any governmental agency or representative
thereof or by the NAIC or pursuant to legal or judicial process; provided,
unless specifically prohibited by applicable law or court order, each Lender
shall make reasonable efforts to notify Company of any request by any
governmental agency or representative thereof (other than any such request in
connection with any examination of the financial condition or other routine
examination of such Lender by such governmental agency) for disclosure of any
such non-public information prior to disclosure of such information.
10.20. USURY SAVINGS CLAUSE. Notwithstanding any other provision herein,
the aggregate interest rate charged with respect to any of the Obligations,
including all charges or fees in connection therewith deemed in the nature of
interest under applicable law shall not exceed the Highest Lawful Rate. If the
rate of interest (determined without regard to the preceding sentence) under
this Agreement at any time exceeds the Highest Lawful Rate, the outstanding
amount of the Loans made hereunder shall bear interest at the Highest Lawful
Rate until the total amount of interest due hereunder equals the amount of
interest which would have been due hereunder if the stated rates of interest set
forth in this Agreement had at all times been in effect. In addition, if when
the Loans made hereunder are repaid in full the total interest due hereunder
(taking into account the increase provided for above) is less than the total
amount of interest which would have been due hereunder if the stated rates of
interest set forth in this
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Agreement had at all times been in effect, then to the extent permitted by law,
Company shall pay to Administrative Agent an amount equal to the difference
between the amount of interest paid and the amount of interest which would have
been paid if the Highest Lawful Rate had at all times been in effect.
Notwithstanding the foregoing, it is the intention of Lenders and Company to
conform strictly to any applicable usury laws. Accordingly, if any Lender
contracts for, charges, or receives any consideration which constitutes interest
in excess of the Highest Lawful Rate, then any such excess shall be cancelled
automatically and, if previously paid, shall at such Lender's option be applied
to the outstanding amount of the Loans made hereunder or be refunded to Company.
10.21. POSTING.
(a) Each Credit Party hereby agrees that it will provide to
Administrative Agent all information, documents and other materials that it is
obligated to furnish to Administrative Agent pursuant to this Agreement and any
other Credit Document, including, without limitation, all notices, requests,
financial statements, financial and other reports, certificates and other
information materials, but excluding any such communication that (A) relates to
a request for a new, or a conversion of an existing, Borrowing or other
extension of credit (including any election of an interest rate or interest
period relating thereto), (B) relates to the payment of any principal or other
amount due under this Agreement prior to the scheduled date therefor, (C)
provides notice of any Default or Event of Default under this Agreement or (D)
is required to be delivered to satisfy any condition precedent to the
effectiveness of this Agreement and/or any borrowing or other extension of
credit hereunder (all such non-excluded communications, collectively, the
"COMMUNICATIONS"), by transmitting the Communications in an electronic/soft
medium in a format reasonably acceptable to Administrative Agent at
ann.hurley@rbccm.com and adam.ahmed@rbccm.com or at such other e-mail
address(es) provided to Company from time to time or in such other form,
including hard copy delivery thereof, as Administrative Agent shall require. In
addition, each Credit Party agrees to continue to provide the Communications to
Administrative Agent in the manner specified in this Agreement or any other
Credit Document or in such other form, including hard copy delivery thereof, as
Administrative Agent shall require. Nothing in this Section 10.21 shall
prejudice the right of the Agents, any Lender or any Credit Party to give any
notice or other communication pursuant to this Agreement or any other Credit
Document in any other manner specified in this Agreement or any other Credit
Document or as any such Agent shall require.
(b) To the extent consented to by Administrative Agent in writing
from time to time, Administrative Agent agrees that receipt of the
Communications by Administrative Agent at its e-mail address(es) set forth above
shall constitute effective delivery of the Communications to Administrative
Agent for purposes of the Credit Documents; provided that Company shall also
deliver to Administrative Agent an executed original of each Compliance
Certificate required to be delivered hereunder. Each Lender agrees that notice
to it (as provided in the next sentence) specifying that the Communications have
been posted to the Platform (as defined below) shall constitute effective
delivery of the Communications to such Lender for purposes of the Credit
Documents; provided that any Lender may request and shall accordingly receive
hard copy delivery of any Communications. Each Lender agrees (A) to notify
Administrative Agent in writing from time to time of such Lender's e-mail
address(es) to which
165
the foregoing notice may be sent by electronic transmission and (B) that the
foregoing notice may be sent to such e-mail address(es).
(c) Each Credit Party further agrees that Administrative Agent may
make the Communications available to the Lenders by posting the Communications
on Intralinks or a substantially similar electronic transmission system (the
"PLATFORM"). The Platform is provided "as is" and "as available." The Agent
Parties (as defined below) do not warrant the accuracy or completeness of the
Communications, or the adequacy of the Platform and expressly disclaim liability
for errors or omissions in the communications. No warranty of any kind, express,
implied or statutory, including, without limitation, any warranty of
merchantability, fitness for a particular purpose, non-infringement of third
party rights or freedom from viruses or other code defects, is made by any Agent
Party (as defined below) in connection with the Communications or the Platform.
In no event shall Administrative Agent or any of its affiliates or any of their
respective officers, directors, employees, agents advisors or representatives
(collectively, "AGENT PARTIES") have any liability to the Credit Parties, any
Lender or any other person or entity for damages of any kind, including, without
limitation, direct or indirect, special, incidental or consequential damages,
losses or expenses (whether in tort, contract or otherwise) arising out of any
Credit Party's or Administrative Agent's transmission of communications through
the internet, except to the extent the liability of any Agent Party is found in
a final non-appealable judgment by a court of competent jurisdiction to have
resulted from such Agent Party's gross negligence or willful misconduct.
10.22. COUNTERPARTS. This Agreement may be executed in any number of
counterparts, each of which when so executed and delivered shall be deemed an
original, but all such counterparts together shall constitute but one and the
same instrument.
10.23. EFFECTIVENESS. This Agreement shall become effective upon the
execution of a counterpart hereof by each of the parties hereto and receipt by
Company and Administrative Agent of delivery of executed counterparts of all
such parties.
[Remainder of page intentionally left blank]
166
IN WITNESS WHEREOF, the parties hereto have caused this Agreement to be
duly executed and delivered by their respective officers thereunto duly
authorized as of the date first written above.
MAAX CORPORATION
By: /s/ James Rhee
------------------------------------------
Name: James Rhee
Title: Secretary
BEAUCELAND CORPORATION
By: /s/ James Rhee
------------------------------------------
Name: James Rhee
Title: Secretary
[SIGNATURE PAGE TO CREDIT AGREEMENT]
GUARANTOR SUBSIDIARIES (U.S.):
AKER PLASTICS COMPANY INC.
MAAX (2004) LLC
MAAX HOLDING CO.
MAAX-HYDRO SWIRL MANUFACTURING CORP.
MAAX-KSD CORPORATION
MAAX LLC
MAAX MIDWEST, INC.
MAAX SPAS (ARIZONA), INC.
PEARL BATHS, INC.
By: /s/ Robert Martin
------------------------------------------
Name: Robert Martin
Title: Vice President
[SIGNATURE PAGE TO CREDIT AGREEMENT]
GUARANTOR SUBSIDIARIES (CANADIAN):
MAAX CANADA INC.
CUISINE EXPERT-C.E. CABINETS INC.
9022-3751 QUEBEC INC.
MAAX SPAS (ONTARIO) INC.
MAAX SPAS (B.C.) INC.
By: /s/ Denis Aubin
----------------------------------------
Name: Denis Aubin
Title: Director & Officer
4200217 CANADA INC.
By: /s/ James Rhee
----------------------------------------
Name: James Rhee
Title: Secretary
[SIGNATURE PAGE TO CREDIT AGREEMENT]
With respect to Section 6.12 only,
MAAX HOLDINGS, INC.
By: /s/ James Rhee
----------------------------------------
Name: James Rhee
Title: Secretary
[SIGNATURE PAGE TO CREDIT AGREEMENT]
GOLDMAN SACHS CREDIT PARTNERS L.P.,
as Joint Lead Arranger, Syndication Agent and a
Lender
By: /s/ Steve P. Hickey
----------------------------------------
Authorized Signatory
GOLDMAN SACHS CANADA CREDIT PARTNERS CO.,
as a Lender
By: /s/ Steve P. Hickey
----------------------------------------
Authorized Signatory
[SIGNATURE PAGE TO CREDIT AGREEMENT]
ROYAL BANK OF CANADA, as Administrative
Agent and Collateral Agent
By: /s/ Gail Watkin
----------------------------------------
Name: Gail Watkin
Title: Manager, Agency
ROYAL BANK OF CANADA, as a Lender
By: /s/ John M. Crawford
----------------------------------------
Name: John M. Crawford
Title: Attorney in Fact
[SIGNATURE PAGE TO CREDIT AGREEMENT]
ROYAL BANK OF CANADA,
acting through its business group RBC Capital
Markets, as Joint Lead Arranger
By: /s/ John M. Crawford
----------------------------------------
Name: John M. Crawford
Title: Attorney in Fact
[SIGNATURE PAGE TO CREDIT AGREEMENT]
MERRILL LYNCH CAPITAL CANADA INC.,
as a Lender
By: /s/ Eric Giroux
----------------------------------------
Name: Eric Giroux
Title: Vice President
[SIGNATURE PAGE TO CREDIT AGREEMENT]
MERRILL LYNCH & CO.,
MERRILL LYNCH, PIERCE, FENNER & SMITH
INCORPORATED,
as Joint Lead Arranger and Documentation Agent
By: /s/ Michael E. O'Brien
--------------------------------------------
Name: Michael E. O'Brien
Title: Director
[SIGNATURE PAGE TO CREDIT AGREEMENT]
NATIONAL BANK OF CANADA, NEW YORK BRANCH,
as Issuing Bank, Swing Line Lender and a Lender
By: /s/ Vincent Lima
----------------------------------------
Name: Vincent Lima
Title: Vice President
By: /s/ Yvon Laplante
----------------------------------------
Name: Yvon Laplante
Title: Vice President & Manager
[SIGNATURE PAGE TO CREDIT AGREEMENT]
BANK OF MONTREAL, CHICAGO BRANCH, as a Lender,
By: /s/ Bruce Pietka
----------------------------------------
Name: Bruce Pietka
Title: Vice President
[SIGNATURE PAGE TO CREDIT AGREEMENT]
LA CAISSE CENTRALE DESJARDINS DU
QUEBEC, as a Lender
By: /s/ Michel Voyer
----------------------------------------
Name: Michel Voyer
Title: Senior Manager
By: /s/ Sylvain Gascon
----------------------------------------
Name: Sylvain Gascon
Title: Vice President
[SIGNATURE PAGE TO CREDIT AGREEMENT]
CITIBANK, N.A., CANADIAN BRANCH, as a Lender
By: /s/ Isabelle F. Cote
----------------------------------------
Name: Isabelle F. Cote
[SIGNATURE PAGE TO CREDIT AGREEMENT]
COMERICA BANK CANADA BRANCH, as a Lender
By: /s/ Robert Rosen
----------------------------------------
Name: Robert Rosen
Title: Vice President
[SIGNATURE PAGE TO CREDIT AGREEMENT]
NATIONAL CITY BANK, CANADA BRANCH, as a Lender
By: /s/ J. Andrew Riddell
----------------------------------------
Name: J. Andrew Riddell
Title: Vice-President
[SIGNATURE PAGE TO CREDIT AGREEMENT]
GE CANADA FINANCE HOLDING COMPANY, as a Lender
By: /s/ Stephen B. Smith
----------------------------------------
Name: Stephen B. Smith
Title: President
[SIGNATURE PAGE TO CREDIT AGREEMENT]
SIGNATURE CORPORATE BOND FUND, as a Lender
By: /s/ Matt Shandro
----------------------------------------
Name: Matt Shandro
Title: Vice President
By: /s/ Eric Bushell
----------------------------------------
Name: Eric Bushell
Title: Chief Information Officer
SIGNATURE HIGH INCOME FUND, as a Lender
By: /s/ Matt Shandro
----------------------------------------
Name: Matt Shandro
Title: Vice President
By: /s/ Eric Bushell
----------------------------------------
Name: Eric Bushell
Title: Chief Information Officer
SIGNATURE HIGH INCOME SECTOR FUND, as a Lender
By: /s/ Matt Shandro
----------------------------------------
Name: Matt Shandro
Title: Vice President
By: /s/ Eric Bushell
----------------------------------------
Name: Eric Bushell
Title: Chief Information Officer
[SIGNATURE PAGE TO CREDIT AGREEMENT]
SKYLON GROWTH & INCOME TRUST, as a Lender
By: /s/ Matt Shandro
----------------------------------------
Name: Matt Shandro
Title: Vice President
By: /s/ Eric Bushell
----------------------------------------
Name: Eric Bushell
Title: Chief Information Officer
[SIGNATURE PAGE TO CREDIT AGREEMENT]
APPENDIX A-1
TO CREDIT AND GUARANTY AGREEMENT
TRANCHE A TERM LOAN COMMITMENTS
TRANCHE A PRO
LENDER TERM LOAN COMMITMENT RATA SHARE
- ------------------------------------------------------------------------------------------------------------------
Royal Bank of Canada Can$19,500,000 15.00%
Goldman Sachs Canada Credit Partners Co. Can$7,611,000 5.86%
Merrill Lynch Capital Canada Inc. Can$7,611,000 5.86%
National Bank of Canada, New York Branch Can$18,056,000 13.89%
Bank of Montreal, Chicago Branch Can$18,056,000 13.89%
La Caisse Centrale Desjardins du Quebec Can$14,445,000 11.11%
Citibank, N.A., Canadian Branch Can$10,833,000 8.33%
Comerica Bank Canada Branch Can$10,833,000 8.33%
National City Bank, Canada Branch Can$10,833,000 8.33%
GE Canada Finance Holding Company Can$7,222,000 5.56%
Signature Corporate Bond Fund Can$1,250,000 0.96%
Signature High Income Fund Can$1,250,000 0.96%
Signature High Income Sector Fund Can$1,250,000 0.96%
Skylon Growth & Income Trust Can$1,250,000 0.96%
Total Can$130.0 million 100.00%
APPENDIX A-1-1
APPENDIX A-2
TO CREDIT AND GUARANTY AGREEMENT
TRANCHE B TERM LOAN COMMITMENTS
TRANCHE B PRO
LENDER TERM LOAN COMMITMENT RATA SHARE
- ------------------------------------------------------------------------------------------------------------------
Goldman Sachs Credit Partners L.P. U.S.$115.0 million 100.00%
Total U.S.$115.0 million 100.00%
APPENDIX A-2-1
APPENDIX A-3
TO CREDIT AND GUARANTY AGREEMENT
REVOLVING COMMITMENTS
LENDER REVOLVING COMMITMENT PRO RATA SHARE
- ----------------------------------------------------------------------------------------------------------------------
Royal Bank of Canada Can$7,500,000 15.00%
Goldman Sachs Canada Credit Partners Co. Can$3,889,000 7.78%
Merrill Lynch Capital Canada Inc. Can$3,889,000 7.78%
National Bank of Canada, New York Branch Can$6,944,000 13.89%
Bank of Montreal, Chicago Branch Can$6,944,000 13.89%
La Caisse Centrale Desjardins du Quebec Can$5,555,000 11.11%
Citibank, N.A., Canadian Branch Can$4,167,000 8.33%
Comerica Bank Canada Branch Can$4,167,000 8.33%
National City Bank, Canada Branch Can$4,167,000 8.33%
GE Canada Finance Holding Company Can$2,778,000 5.56%
Total Can$50.0 million 100.00%
APPENDIX A-3-1
APPENDIX B
TO CREDIT AND GUARANTY AGREEMENT
NOTICE ADDRESSES
BORROWER OR ANY GUARANTOR
Prior to August 1, 2004,
Maax Corporation,
640 Cameron,
Sainte-Marie, Quebec, Canada, G6E 1B2
Attention: Denis Aubin, Executive Vice President and Chief Financial Officer
Telecopier: (418) 386-4520
August 1 and thereafter,
Maax Corporation,
1010 Sherbrooke West,
Montreal, Quebec, Canada, H3A 2R7
Attention: Denis Aubin, Executive Vice President and Chief Financial Officer
with a copy to:
J.W. CHILDS ASSOCIATES, L.P.
111 Huntington Avenue, Suite 2900
Boston, MA 02199
Telecopier: (617) 753-1101
Attention : Steven G. Segal, Partner
APPENDIX B-1
GOLDMAN SACHS CREDIT PARTNERS L.P.,
as Joint Lead Arranger, Syndication Agent and a Lender
Goldman Sachs Credit Partners L.P.
85 Broad Street
New York, New York 10004
Attention: Elizabeth Fischer
Telecopier: (212) 357-9110
GOLDMAN SACHS CANADA CREDIT PARTNERS CO.,
as a Lender
Goldman Sachs Canada Credit Partners Co.
150 King Street West, Suite 1201
Toronto, Ontario
M5H 1J9
Attention: Stefano Zuliani
Telecopier: (416) 343-8906
with a copy to:
Goldman Sachs Credit Partners L.P.
85 Broad Street
New York, New York 10004
Attention: Elizabeth Fischer
Telecopier: (212) 357-9110
APPENDIX B-2
ROYAL BANK OF CANADA,
as Administrative Agent and Collateral Agent
Royal Bank of Canada
Global Banking - Agency
12th. Floor, South Tower
Royal Bank Plaza
200 Bay Street
Toronto, Ontario M5J 2W7
Attention: Manager, Agency
Fax: (416)-842-4023
ROYAL BANK OF CANADA,
as a Lender
Royal Bank of Canada
New York Branch
One Liberty Plaza, 3rd Floor
New York, New York 10006-1404
Attention: David Banning
Telephone No.: (212) 428-6369
Facsimile No.: (212) 428-2372
with a copy to:
Royal Bank of Canada
One Liberty Plaza, 3rd Floor
New York, New York 10006-1404
Attention: John Crawford
Telephone No.: (212) 428-6261
Facsimile No.: (212) 428-6460
ROYAL BANK OF CANADA, acting through its business group RBC Capital Markets, as
Joint Lead Arranger
Royal Bank of Canada
One Liberty Plaza, 3rd Floor
New York, New York 10006-1404
Attention: John Crawford
Telephone No.: (212) 428-6261
Facsimile No.: (212) 428-6460
APPENDIX B-3
MERRILL LYNCH & CO.,
MERRILL LYNCH, PIERCE, FENNER & SMITH INCORPORATED
as Joint Lead Arranger and Documentation Agent
Merrill Lynch & Co.,
Merrill Lynch, Pierce, Fenner & Smith Incorporated
4 World Financial Center, 16th Floor
New York, NY 10080
Attention: Michael O'Brien
Telecopier: (212) 738-1186
with a copy to:
Merrill Lynch & Co.,
Merrill Lynch, Pierce, Fenner & Smith Incorporated
4 World Financial Center, 16th Floor
New York, NY 10080
Attention: Loan Administration
Telecopier: (212) 738-1719
MERRILL LYNCH CAPITAL CANADA INC.,
as a Lender
Merrill Lynch Capital Canada Inc.
181 Bay Street
Toronto, ON M5J 2V8
Attention: Mark Dickerson
Telecopier: (416) 369-2106
with a copy to:
Merrill Lynch Capital Canada Inc.
4 World Financial Center, 16th Floor
New York, NY 10080
Attention: Loan Administration
Telecopier: (212) 738-1719
APPENDIX B-4
NATIONAL BANK OF CANADA, NEW YORK BRANCH,
as Issuing Bank, Swing Line Lender and a Lender
National Bank of Canada
125 West 55th Street - 22nd Floor
New York, NY 10019
Attention: Rick Roberts --Senior Administration Officer
Telecopier: (212) 632-8509
APPENDIX B-5
BANK OF MONTREAL, CHICAGO BRANCH,
as a Lender
115 South Lasalle,
Chicago, IL 60603
Attention: Bruce Pietka
Telecopier: (312) 750-6057
with a copy to:
Corporate Finance
105, St. Jacques, 3rd Floor
Montreal, Quebec H2Y 1L6
Attention: Luc Bernier
Telecopier: (514) 877-7704
APPENDIX B-6
LA CAISSE CENTRALE DESJARDINS DU QUEBEC,
as a Lender
1, complexe Desjardins,
Suite 2822
Montreal, Quebec H5B 1BC
Attention: Michel Voyer
Telecopier: (514) 281-7083
APPENDIX B-7
CITIBANK, N.A., CANADIAN BRANCH,
as a Lender
630 Rene Levesque Boulevard West
Suite 2450
Montreal, Quebec H3B 1S6
Attention: Isabelle F. Cote
Telecopier: (514) 393-7545
APPENDIX B-8
COMERICA BANK CANADA BRANCH, as a Lender
Suite 2210, South Tower
Royal Bank Plaza
200 Bay Street
P.O. Box 61
Toronto, Ontario, M5J 2J2
Attention: Robert Rosen
Telecopier: (416) 367-2460
APPENDIX B-9
NATIONAL CITY BANK, CANADA BRANCH, as a Lender
130 King Street West
Suite 2140
Toronto, Ontario M5X 1E4
Attention: J. Andrew Riddell
Telecopier: (416) 361-0085
APPENDIX B-10
GE CANADA FINANCE HOLDING COMPANY, as a Lender
General Electric Capital
Corporate Financial Services
201 Merritt 7, P.O. Box 5201
Norwalk, CT 06856-5201
Attention: Mei Nishiwaki
Telecopier: (203) 956-4007
with a copy to:
Bingham McCutchen LLP
One State Street
Hartford, CT 06103
Attention: Frank A. Appicelli
Telecopier: (860) 240-2800
APPENDIX B-11
SIGNATURE CORPORATE BOND FUND,
as a Lender
c/o Royton & Co. - RBC Global Securities
SL Level, Royal Bank Plaza
200 Bay Street, South Tower,
Toronto, ON M5J 2J5
Attention: Matt Shandro
Telecopier: (416) 681-3138
SIGNATURE HIGH INCOME FUND,
as a Lender
c/o Royton & Co. - RBC Global Securities
SL Level, Royal Bank Plaza
200 Bay Street, South Tower,
Toronto, ON M5J 2J5
Attention: Matt Shandro
Telecopier: (416) 681-3138
SIGNATURE HIGH INCOME SECTOR FUND,
as a Lender
c/o Royton & Co. - RBC Global Securities
SL Level, Royal Bank Plaza
200 Bay Street, South Tower,
Toronto, ON M5J 2J5
Attention: Matt Shandro
Telecopier: (416) 681-3138
SKYLON GROWTH & INCOME TRUST,
as a Lender
c/o Royton & Co. - RBC Global Securities
SL Level, Royal Bank Plaza
200 Bay Street, South Tower,
Toronto, ON M5J 2J5
Attention: Matt Shandro
Telecopier: (416) 681-3138
APPENDIX B-12
APPENDIX C
TO CREDIT AND GUARANTY AGREEMENT
ELIGIBLE CATEGORIES OF INSTITUTIONS
1. U.S. branches of Canadian banks that are engaged in a trade or business
within the United States for U.S. federal income tax purposes.
2. Canadian branches of banks that are U.S. persons under the Internal
Revenue Code; provided that such branch is an authorized foreign bank in
Canada, interest is paid to such branch in respect of its Canadian banking
business and the Lender provides to Borrower appropriate representation
with regard thereto (it being understood that Canadian subsidiaries of
U.S. banks do not qualify).
3. Canadian branches of non-U.S. foreign banks that are exempt from Canadian
federal withholding tax where treaty with U.S. provides for zero U.S.
federal withholding tax and the branch is eligible(1) for such treaty
benefits and gives IRS Form W-8 BEN (or successor form) establishing such
exemption (it being understood that Canadian subsidiaries of non-U.S.
foreign banks do not qualify); provided that the branch is an authorized
foreign bank in Canada, interest is paid to the branch in respect of its
Canadian banking business and the Lender provides to Borrower appropriate
representation with regard thereto.
4. Canadian residents that are exempt from Canadian federal withholding tax,
are not banks and are eligible for exemption from U.S. federal withholding
tax under the portfolio interest exemption (within the meaning of sections
871 and 881 of the Internal Revenue Code) and give IRS Form W-8BEN (or
successor form) and any other required certification of eligibility for
such exemption (in accordance with sections 871 and 881 of the Internal
Revenue Code).
5. Canadian pension funds that are exempt from Canadian federal withholding
tax and are eligible for exemption from U.S. federal withholding tax under
the U.S./Canada treaty and provide IRS Form W-8BEN (or successor form)
establishing entitlement to such exemption.
6. U.S. pension funds that are exempt from U.S. federal withholding tax and
are eligible for exemption from Canadian federal withholding tax under the
U.S./Canada treaty and provide to Borrower appropriate representation of
entitlement to such exemption.
- ----------
(1) This generally will require that they both meet the definition of a
resident in such country for treaty purposes and are not limited by the
limitation on benefits provisions of the treaty.
APPENDIX C-1