EXHIBIT 10.1
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FIFTH AMENDED AND RESTATED
CREDIT AGREEMENT
dated as of
MAY 3, 2005
among
DURA AUTOMOTIVE SYSTEMS, INC.,
as Parent Guarantor
THE SUBSIDIARY GUARANTORS PARTY HERETO,
as Loan Guarantors
DURA OPERATING CORP.
and
DURA AUTOMOTIVE SYSTEMS (CANADA), LTD.
as Borrowers
The Lenders Party Hereto
BANK OF AMERICA, N.A.,
as Collateral Agent and Syndication Agent
and
JPMORGAN CHASE BANK, N.A.,
as Administrative Agent
---------------------------
J.P. MORGAN SECURITIES INC.,
as Sole Bookrunner and Sole Lead Arranger
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TABLE OF CONTENTS
I. DEFINITIONS................................................................................. 1
SECTION 1.01. Defined Terms............................................................... 1
SECTION 1.02. Classification of Loans and Borrowings...................................... 40
SECTION 1.03. Terms Generally............................................................. 40
SECTION 1.04. Accounting Terms; GAAP...................................................... 41
II. The Credits................................................................................. 41
SECTION 2.01. The Facility................................................................ 41
SECTION 2.02. Revolving Loans............................................................. 41
SECTION 2.03. Loans and Borrowings........................................................ 42
SECTION 2.04. Requests for Revolving Borrowings........................................... 43
SECTION 2.05. Protective Advances......................................................... 44
SECTION 2.06. Swingline Loans............................................................. 45
SECTION 2.07. Letters of Credit........................................................... 48
SECTION 2.08. Funding of Borrowings....................................................... 51
SECTION 2.09. Interest Elections.......................................................... 53
SECTION 2.10. Termination and Reduction of Revolving Commitments.......................... 54
SECTION 2.11. Repayment and Amortization of Loans; Evidence of Debt....................... 55
SECTION 2.12. Prepayment of Loans......................................................... 56
SECTION 2.13. Fees........................................................................ 57
SECTION 2.14. Interest.................................................................... 58
SECTION 2.15. Alternate Rate of Interest.................................................. 59
SECTION 2.16. Increased Costs............................................................. 60
SECTION 2.17. Break Funding Payments...................................................... 60
SECTION 2.18. Taxes....................................................................... 61
SECTION 2.19. Payments Generally; Allocation of Proceeds; Sharing of Set-offs............. 62
SECTION 2.20. Mitigation Obligations; Replacement of Lenders.............................. 65
SECTION 2.21. Indemnity for Returned Payments............................................. 66
SECTION 2.22. Utilization of Commitments in Canadian Dollars.............................. 66
III. Representations and Warranties.............................................................. 67
SECTION 3.01. Organization; Powers........................................................ 67
SECTION 3.02. Authorization; Enforceability............................................... 68
SECTION 3.03. Governmental Approvals; No Conflicts........................................ 68
SECTION 3.04. Financial Condition; No Material Adverse Change............................. 68
SECTION 3.05. Properties.................................................................. 68
SECTION 3.06. Litigation and Environmental Matters........................................ 69
SECTION 3.07. Compliance with Laws and Agreements......................................... 69
SECTION 3.08. Investment and Holding Company Status....................................... 69
SECTION 3.09. Taxes....................................................................... 69
SECTION 3.10. ERISA....................................................................... 69
SECTION 3.11. Disclosure.................................................................. 70
SECTION 3.12. [Intentionally Deleted]..................................................... 70
SECTION 3.13. Solvency.................................................................... 70
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SECTION 3.14. Reportable Transaction...................................................... 70
SECTION 3.15. Capitalization and Subsidiaries............................................. 70
SECTION 3.16. [Intentionally Deleted]..................................................... 71
SECTION 3.17. Security Interest in Collateral............................................. 71
SECTION 3.18. Senior Debt................................................................. 71
IV. Conditions.................................................................................. 71
SECTION 4.01. Effective Date.............................................................. 71
SECTION 4.02. Each Credit Event........................................................... 75
V. Affirmative Covenants....................................................................... 76
SECTION 5.01. Financial Statements; Borrowing Base and Other Information.................. 76
SECTION 5.02. Notices of Material Events.................................................. 78
SECTION 5.03. Existence; Conduct of Business.............................................. 79
SECTION 5.04. Payment of Obligations...................................................... 79
SECTION 5.05. Maintenance of Properties and Intellectual Property Rights.................. 79
SECTION 5.06. Books and Records; Inspection Rights........................................ 79
SECTION 5.07. Compliance with Laws........................................................ 79
SECTION 5.08. Use of Proceeds and Letters of Credit....................................... 80
SECTION 5.09. Insurance................................................................... 80
SECTION 5.10. Appraisals.................................................................. 80
SECTION 5.11. Additional Collateral; Further Assurances................................... 80
SECTION 5.12. Depository Banks............................................................ 81
SECTION 5.13. Collateral Access Agreements................................................ 81
VI. Negative Covenants.......................................................................... 82
SECTION 6.01. Indebtedness................................................................ 82
SECTION 6.02. Liens....................................................................... 84
SECTION 6.03. Fundamental Changes......................................................... 86
SECTION 6.04. Investments, Loans, Advances, Guarantees and Acquisitions................... 87
SECTION 6.05. Restricted Payments......................................................... 89
SECTION 6.06. Transactions with Affiliates................................................ 89
SECTION 6.07. Restrictive Agreements...................................................... 90
SECTION 6.08. Prepayment of Indebtedness; Subordinated Indebtedness;
Second Lien Obligations..................................................... 90
SECTION 6.09. Change in Fiscal Periods.................................................... 91
SECTION 6.10. Trust Preferred Stock Transactions.......................................... 91
SECTION 6.11. Capital Expenditures........................................................ 91
SECTION 6.12. Fixed Charge Coverage Ratio................................................. 92
SECTION 6.13. Parent...................................................................... 92
VII. EVENTS OF DEFAULT........................................................................... 92
VIII. the Agents.................................................................................. 94
IX. Miscellaneous............................................................................... 97
SECTION 9.01. Notices..................................................................... 97
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SECTION 9.02. Waivers; Amendments......................................................... 98
SECTION 9.03. Expenses; Indemnity; Damage Waiver.......................................... 101
SECTION 9.04. Successors and Assigns...................................................... 103
SECTION 9.05. Survival.................................................................... 105
SECTION 9.06. Counterparts; Integration; Effectiveness.................................... 106
SECTION 9.07. Severability................................................................ 106
SECTION 9.08. Right of Setoff............................................................. 106
SECTION 9.09. Governing Law; Jurisdiction; Consent to Service of Process.................. 106
SECTION 9.10. WAIVER OF JURY TRIAL........................................................ 107
SECTION 9.11. Headings.................................................................... 107
SECTION 9.12. Confidentiality............................................................. 107
SECTION 9.13. Several Obligations; Nonreliance; Violation of Law.......................... 108
SECTION 9.14. USA Patriot Act............................................................. 108
SECTION 9.15. Disclosure.................................................................. 108
SECTION 9.16. Execution of Loan Documents................................................. 108
SECTION 9.17. Interest Rate Limitation.................................................... 108
SECTION 9.18. Amendment and Restatement................................................... 108
SECTION 9.19. Judgment Currency........................................................... 109
SECTION 9.20. Canadian Lenders............................................................ 109
SECTION 9.21. Limitation.................................................................. 109
X. Loan Guaranty............................................................................... 109
SECTION 10.01. Guaranty.................................................................... 109
SECTION 10.02. Guaranty of Payment......................................................... 110
SECTION 10.03. No Discharge or Diminishment of Loan Guaranty............................... 110
SECTION 10.04. Defenses Waived............................................................. 111
SECTION 10.05. Rights of Subrogation....................................................... 111
SECTION 10.06. Reinstatement; Stay of Acceleration......................................... 111
SECTION 10.07. Information................................................................. 111
SECTION 10.08. Termination................................................................. 112
SECTION 10.09. Taxes....................................................................... 112
SECTION 10.10. Maximum Liability........................................................... 112
SECTION 10.11. Contribution................................................................ 112
SECTION 10.12. Liability Cumulative........................................................ 113
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SCHEDULES:
Commitment Schedule
Schedule 1.01(a) - Canadian Eligible Real Property
Schedule 1.01(b) - Eligible Aircraft
Schedule 1.01(c) - Eligible U.S. Equipment
Schedule 1.01(d) - Eligible U.S. Real Property
Schedule 3.05 -- Properties
Schedule 3.06 -- Disclosed Matters
Schedule 3.09 -- Tax Filings
Schedule 3.15 -- Capitalization and Subsidiaries
Schedule 6.01 -- Existing Indebtedness
Schedule 6.02 -- Existing Liens
Schedule 6.04 -- Existing Investments
Schedule 6.07 -- Existing Restrictions
EXHIBITS:
Exhibit A -- Form of Assignment and Assumption
Exhibit B -- Form of Opinion of Loan Parties' Counsel
Exhibit C -- Form of U.S. Borrowing Base Certificate
Exhibit D -- Form of Compliance Certificate
Exhibit E -- Joinder Agreement
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FIFTH AMENDED AND RESTATED CREDIT AGREEMENT dated as of May 3, 2005
(as it may be amended, restated, supplemented or otherwise modified from time to
time, this "Agreement"), among DURA AUTOMOTIVE SYSTEMS, INC., a Delaware
corporation (the "Parent"), the other Loan Guarantors from time to time party to
this Agreement, DURA OPERATING CORP., a Delaware corporation (the "U.S.
Borrower"), DURA AUTOMOTIVE SYSTEMS (CANADA), LTD., an Ontario corporation (the
"Canadian Borrower") (U.S. Borrower and Canadian Borrower are collectively
referred to herein as the "Borrowers"), the several banks and other financial
institutions or entities from time to time party to this Agreement (the
"Lenders"), BANK OF AMERICA, N.A., in its capacity as collateral agent ( the
"Collateral Agent") and JPMORGAN CHASE BANK, N.A., in its capacity as
Administrative Agent for the Lenders hereunder (including its Affiliates, the
"Administrative Agent").
WHEREAS, pursuant to that certain Amended and Restated Credit
Agreement dated as of October 31, 2003 (as amended, supplemented or otherwise
modified from time to time prior to the date hereof, the "Existing Credit
Agreement"), certain lenders and other financial institutions (the "Existing
Lenders") extended term loans and made available revolving credit commitments to
the Borrowers and certain other subsidiaries of the Borrowers on the terms set
forth in the Existing Credit Agreement (the "Existing Indebtedness");
WHEREAS, the Borrowers have requested that the Existing Credit
Agreement be amended and restated pursuant to this Agreement to, among other
things, continue the "U.S. Revolving Commitment" under the Existing Credit
Agreement as U.S. Revolving Commitments hereunder and the "Guaranties" delivered
by the Loan Parties under the Existing Credit Agreement as the Loan Guaranty
hereunder;
WHEREAS, the parties hereto wish to amend and restate the Existing
Credit Agreement upon the terms and subject to the conditions set forth herein;
WHEREAS, unless otherwise expressly provided for herein to the
contrary, the security interests granted by the Loan Parties pursuant to the
"Collateral Documents" delivered under the Existing Credit Agreement will
continue to provide collateral security for the Secured Obligations of the Loan
Parties;
NOW, THEREFORE, in consideration of the premises and the mutual
covenants herein contained, the Existing Credit Agreement is hereby amended and
restated in its entirety as follows:
ARTICLE I
I. DEFINITIONS
SECTION 1.01. Defined Terms. As used in this Agreement, the
following terms have the meanings specified below:
"ABR", when used in reference to any Loan or Borrowing, refers to
whether such Loan, or the Loans comprising such Borrowing, are bearing interest
at a rate determined by reference to the Alternate Base Rate.
"Account" has the meaning assigned to such term in the Security
Agreement.
"Account Debtor" means any Person obligated on an Account.
"Acquisition" means a transaction or series of related transactions
for the purpose of or resulting, directly or indirectly, in (a) the acquisition
of all or substantially all of the assets of a Person, or of any division of a
Person, (b) the acquisition of in excess of 50% of the capital stock,
partnership interests, membership interests or equity of any Person, or
otherwise causing any Person to become a Subsidiary, or (c) a merger or
consolidation or any other combination with another Person (other than a Person
that is a Subsidiary) provided that U.S. Borrower or a Subsidiary of U.S.
Borrower is the surviving entity.
"Additional Canadian Eligible Equipment" means equipment acquired by
the Canadian Borrower following the Effective Date which the Canadian Borrower
has elected to include as Canadian Eligible Equipment; provided, that:
(a) the Administrative Agent shall have received written notice of
such election from the Canadian Borrower, together with (i) a certificate of a
Financial Officer of the Canadian Borrower setting forth in reasonable detail a
schedule of such equipment and the location(s) thereof and certifying the Hard
Costs of such equipment and (ii) invoices and other documentary evidence
reasonably satisfactory to the Administrative Agent evidencing the purchase and
acceptance of such equipment and the payment in full of the purchase price for
such equipment;
(b) such equipment shall satisfy the criteria for Canadian Eligible
Equipment set forth in the definition thereof;
(c) no more than one such election may be made by the Canadian
Borrower during any fiscal quarter; and
(d) the sum of the aggregate Hard Costs of Additional Eligible U.S.
Equipment included as Eligible U.S. Equipment during any fiscal year plus the
Dollar Equivalent of the aggregate Hard Costs of Additional Canadian Eligible
Equipment included as Canadian Eligible Equipment during such fiscal year shall
not exceed $10,000,000.
"Additional Eligible U.S. Equipment" means equipment acquired by the
U.S. Borrower or a U.S. Subsidiary Guarantor following the Effective Date which
the U.S. Borrower has elected to include as Eligible U.S. Equipment; provided,
that:
(a) the Administrative Agent shall have received written notice of
such election from the U.S. Borrower, together with (i) a certificate of a
Financial Officer of the U.S. Borrower setting forth in reasonable detail a
schedule of such equipment and the location(s) thereof and certifying the Hard
Costs of such equipment and (ii) invoices and other documentary evidence
reasonably satisfactory to the Administrative Agent evidencing the purchase and
acceptance of such equipment and the payment in full of the purchase price for
such equipment;
(b) such equipment shall satisfy the criteria for Eligible U.S.
Equipment set forth in the definition thereof;
(c) no more than one such election may be made by the U.S. Borrower
during any fiscal quarter; and
(d) the sum of the aggregate Hard Costs of Additional Eligible U.S.
Equipment included as Eligible U.S. Equipment during any fiscal year plus the
Dollar Equivalent of the aggregate Hard Costs of Additional Canadian Eligible
Equipment included as Canadian Eligible Equipment during such fiscal year shall
not exceed $10,000,000.
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"Adjusted Available Canadian Inventory" means, at any time, the sum
of (A) the lesser of (i) 65% of the Canadian Borrower's Canadian Eligible
Inventory (valued at the lower of cost or market value, determined on a
first-in-first-out basis, at such time), and (ii) 90% of the product of (a) the
Canadian Net Recovery Liquidation Rate for the Canadian Borrower in effect
(based on the then most recent independent inventory appraisal received by the
Administrative Agent) on such date of determination multiplied by (b) the
aggregate amount of gross Canadian Inventory (as reported in accordance with the
Canadian Borrower's perpetual inventory system or general ledger, as determined
acceptable by the Administrative Agent in its Permitted Discretion, at such date
of determination) as set forth in the most recent Canadian Borrowing Base
Certificate, minus (B) the Rent Reserve, minus, (C) the Canadian Priority
Payables Reserve, minus (D) any Canadian Inventory Reserves deemed by the
Administrative Agent in its Permitted Discretion to be included in the
calculation of "Adjusted Available Canadian Inventory."
"Adjusted Available U.S. Inventory" means, at any time, the sum of
(A) the lesser of (i) 65% of the U.S. Borrower's and the U.S. Subsidiary
Guarantors' Eligible U.S. Inventory (valued at the lower of cost or market
value, determined on a first-in-first-out basis, at such time), and (ii) 90% of
the product of (a) the U.S. Net Recovery Liquidation Rate for the U.S. Borrower
and the U.S. Subsidiary Guarantors in effect (based on the then most recent
independent inventory appraisal received by the Administrative Agent) on such
date of determination multiplied by (b) the aggregate amount of gross domestic
Inventory (as reported in accordance either with the U.S. Borrower's perpetual
inventory system or general ledger, as determined acceptable by the
Administrative Agent in its Permitted Discretion, at such date of determination)
as set forth in the most recent U.S. Borrowing Base Certificate, minus (B) the
Rent Reserve, minus, (C) the Canadian Priority Payables Reserve, if applicable,
minus (D) any U.S. Inventory Reserves deemed by the Administrative Agent in its
Permitted Discretion to be included in the calculation of "Adjusted Available
U.S. Inventory."
"Adjusted Canadian Eligible Accounts" shall mean the Canadian
Eligible Accounts, minus the Canadian Dilution Reserve.
"Adjusted Eligible U.S. Accounts" shall mean the Eligible U.S.
Accounts, minus the U.S. Dilution Reserve.
"Adjusted LIBO Rate" means, with respect to any Eurodollar Borrowing
for any Interest Period, an interest rate per annum (rounded upwards, if
necessary, to the next 1/16 of 1%) equal to (a) the LIBO Rate for such Interest
Period multiplied by (b) the Statutory Reserve Rate.
"Administrative Agent" means JPMorgan Chase Bank, N.A., including
its Affiliates, in its capacity as Administrative Agent for the Lenders
hereunder.
"Administrative Questionnaire" means an Administrative Questionnaire
in a form supplied by the Administrative Agent.
"Affiliate" means, with respect to a specified Person, another
Person that directly, or indirectly through one or more intermediaries, Controls
or is Controlled by or is under common Control with the Person specified.
"Agents" means the collective reference to the Collateral Agent and
the Administrative Agent.
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"Aggregate Canadian Commitment" means the aggregate of the Canadian
Revolving Subfacility Commitments of all the Canadian Lenders, as reduced from
time to time pursuant to the terms hereof, which Aggregate Canadian Commitment
shall initially be in the amount of C$25,000,000.
"Aggregate Credit Exposure" means, at any time, the aggregate Credit
Exposure of all the Lenders.
"Aggregate Commitment" means the aggregate of the Revolving
Commitments of all the Lenders, increased and/or reduced from time to time
pursuant to the terms hereof, which Aggregate Commitment shall initially be in
the amount of $175,000,000.
"Aggregate U.S. Commitment" means the aggregate of the U.S.
Revolving Commitments of all the U.S. Lenders, as increased and/or reduced from
time to time pursuant to the terms hereof, which Aggregate U.S. Commitment shall
initially be in the amount of $175,000,000.
"Alternate Base Rate" means, for any day, a rate per annum equal to
the greatest of (a) the Prime Rate in effect on such day and (b) the Federal
Funds Effective Rate in effect on such day plus -1/2 of 1%. Any change in the
Alternate Base Rate due to a change in the Prime Rate or the Federal Funds
Effective Rate shall be effective from and including the effective date of such
change in the Prime Rate or the Federal Funds Effective Rate, respectively.
"Applicable Rate" means, for any day, with respect to any ABR Loan,
Eurodollar Revolving Loan, Canadian Prime Rate Loan or Canadian Dollar LIBO
Loan, or with respect to the commitment fees payable hereunder, as the case may
be, the applicable rate per annum set forth below under the caption "ABR
Spread", "Eurodollar Spread", "Canadian Prime Rate Spread", "Canadian Dollar
LIBO Spread" or "Commitment Fee Rate", as the case may be, based upon average
daily Availability for the Borrowers' most recent calendar quarter:
Canadian Revolver
U.S. Revolver -----------------------
----------------------- Canadian Canadian
Average Eurodollar Prime Rate Dollar LIBO Commitment
Level Availability ABR Spread Spread Spread Spread Fee Rate
- ----- ---------------------- ---------- ---------- ---------- ----------- ----------
III <$35,000,000 1.50% 2.50% 1.50% 2.50% 0.25%
II > or = $35,000,000 but 1.25% 2.25% 1.25% 2.25% 0.30%
< or = $100,000,000
I >$100,000,000 1.00% 2.00% 1.00% 2.00% 0.375%
For the purposes of the above pricing grid, as of the Effective
Date, the Applicable Margin shall be set at Level I. Changes in the Applicable
Margin resulting from changes in Availability shall become effective on the
first day of each calendar quarter, commencing January 1, 2006, based upon the
average daily Availability during the immediately preceding calendar quarter, as
calculated by the Administrative Agent.
"Approved Fund" has the meaning assigned to such term in Section
9.04.
"Assignment and Assumption" means an assignment and assumption
entered into by a Lender and an assignee (with the consent of any party whose
consent is required by Section 9.04), and
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accepted by the Administrative Agent, substantially in the form of Exhibit A or
any other form approved by the Administrative Agent (which other form shall not,
without the approval of the U.S. Borrower, affect any rights or obligations as
between the Borrowers and any Lender).
"Availability" means, at any time, an amount equal to the lesser of
(a) the Available Revolving Commitment and (b) the sum of the Dollar Equivalent
of Canadian Availability plus U.S. Availability.
"Availability Period" means the period from and including the
Effective Date to but excluding the earlier of the Maturity Date and the date of
termination of the Revolving Commitments.
"Available Revolving Commitment" means, at any time, the U.S.
Revolving Commitment then in effect minus the Revolving Credit Exposure of all
Revolving Lenders at such time.
"Banking Services" means each and any of the following bank services
provided to any Loan Party by the Administrative Agent or the Collateral Agent
or any of their respective Affiliates: (a) commercial credit cards, (b) stored
value cards and (c) treasury management services (including, without limitation,
controlled disbursement, automated clearinghouse transactions, return items,
overdrafts and interstate depository network services).
"Banking Services Obligations" of the Loan Parties means any and all
obligations of the Loan Parties (whether absolute or contingent and howsoever
and whensoever created, arising, evidenced or acquired (including all renewals,
extensions and modifications thereof and substitutions therefor)) in connection
with Banking Services.
"Board" means the Board of Governors of the Federal Reserve System
of the United States of America.
"Borrowers" has the meaning ascribed to such term in the preamble
hereto.
"Borrowing" means (a) Revolving Loans of the same Type, made,
converted or continued on the same date and, in the case of Eurodollar Loans and
Canadian Dollar LIBO Loans, as to which a single Interest Period is in effect,
(b) a Swingline Loan, and (c) a Protective Advance.
"Borrowing Base(s)" shall mean a collective reference to the U.S.
Borrowing Base and the Canadian Borrowing Base.
"Borrowing Request" means a request by the applicable Borrower for a
Revolving Borrowing in accordance with Section 2.03.
"Business Day" means any day that is not a Saturday, Sunday or other
day on which commercial banks in New York City are authorized or required by law
to remain closed; provided that, when used in connection with a Eurodollar Loan,
the term "Business Day" shall also exclude any day on which banks are not open
for dealings in dollar deposits in the London interbank market and provided
further, when used in connection with a Canadian Revolving Loan or Canadian
Swingline Loan, the term "Business Day" shall also exclude any day on which
commercial banks in Toronto, Ontario are authorized or required by law to close.
"Canadian Applicable Percentage" means, with respect to any Canadian
Lender, (a) with respect to Canadian Revolving Loans or Canadian Swingline
Loans, a portion equal to a fraction the numerator of which is such Canadian
Lender's Canadian Revolving Subfacility Commitment and the
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denominator of which is the aggregate Canadian Revolving Subfacility Commitments
of all Canadian Revolving Lenders (if the Canadian Revolving Subfacility
Commitments have terminated or expired, the Canadian Applicable Percentages
shall be determined based upon the Canadian Revolving Subfacility Commitments
most recently in effect, giving effect to any assignments), (b) with respect to
Protective Advances made to protect Canadian Lenders or with respect to the
aggregate Canadian Revolving Subfacility Credit Exposure prior to the Maturity
Date, a portion equal to a fraction the numerator of which is such Canadian
Lender's Canadian Revolving Subfacility Commitment and the denominator of which
is the aggregate Canadian Revolving Subfacility Commitments of all Canadian
Lenders, and (c) with respect to Protective Advances made to protect Canadian
Lenders or with respect to the aggregate Canadian Revolving Subfacility Credit
Exposure after the Maturity Date, a portion equal to a fraction the numerator of
which is such Canadian Lender's Canadian Revolving Subfacility Credit Exposure
and the denominator of which is the aggregate Canadian Revolving Subfacility
Credit Exposure.
"Canadian Availability" means, at any time, an amount equal to the
lesser of (a) the Aggregate Canadian Commitment and (b) the Canadian Borrowing
Base, in each case, minus the Canadian Revolving Subfacility Credit Exposure of
all Canadian Revolving Lenders.
"Canadian Borrower" has the meaning ascribed to such term in the
preamble hereto.
"Canadian Borrowing Base" means, at any time, the sum of (a) 85% of
the Canadian Borrower's Adjusted Canadian Eligible Accounts at such time plus
(b) Adjusted Available Canadian Inventory plus (c) the Canadian Fixed Asset
Component, minus, without duplication, (d) Reserves (other than Reserves
otherwise deducted in calculating Adjusted Available Canadian Inventory or
Adjusted Canadian Eligible Accounts). The maximum amount of Canadian Borrower's
Adjusted Available Canadian Inventory included as part of the Canadian Borrowing
Base shall not exceed 50% of the aggregate Canadian Borrowing Base.
"Canadian Borrowing Base Certificate" means a certificate, signed
and certified as accurate and complete by a financial officer of the Canadian
Borrower, in substantially the form of Exhibit C or another form which is
reasonably acceptable to the Administrative Agent.
"Canadian Debenture" means that certain Amended and Restated Fixed
and Floating Charge Demand Debenture dated as of January 30, 2004 by the
Canadian Borrower in favor of the Collateral Agent, for the benefit of the
Collateral Agent and the Lenders, as reaffirmed and amended by the Canadian
Borrower on the date hereof, and as same may be further amended, restated or
otherwise modified from time to time.
"Canadian Dilution Factors" shall mean, without duplication, with
respect to any period, the aggregate amount of all deductions, credit memos,
returns, adjustments, allowances, bad debt write-offs and other non-cash credits
which are recorded to reduce the Canadian Borrower's Accounts in a manner
consistent with current and historical accounting practices of the Canadian
Borrower.
"Canadian Dilution Ratio" shall mean, at any date, the amount
(expressed as a percentage) equal to (a) the aggregate amount of the applicable
Canadian Dilution Factors for the twelve (12) fiscal month period most recently
ended divided by (b) total gross sales by the Canadian Borrower for the twelve
(12) fiscal month period most recently ended or such other amount as may be
determined by the Administrative Agent in its reasonable discretion in the event
the Canadian Borrower is unable to calculate dilution effectively in the manner
contemplated.
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"Canadian Dilution Reserve" shall mean, at any date, (a) the amount
(if any) by which the Canadian Dilution Ratio exceeds 5.00% multiplied by (b)
the Canadian Eligible Accounts on such date. If the Canadian Dilution Ratio does
not exceed 5.00%, the Canadian Dilution Reserve shall be zero.
"Canadian Dollar LIBO" when used in reference to any Loan or
Borrowing by the Canadian Borrower, refers to whether such Loan, or the Loans
comprising such Borrowing, are bearing interest at a rate determined by
reference to the Canadian Dollar LIBO Rate.
"Canadian Dollar LIBO Rate" means, with respect to any Canadian
Dollar LIBO Borrowing for any Interest Period, the rate appearing on Page 3750
of the Dow Jones Market Service (or on any successor page or any successor to
such Service, or any substitute page or substitute for such Service, providing
rate quotations comparable to those currently provided on such page of such
Service, as determined by the Administrative Agent from time to time for
purposes of providing quotations of interest rates applicable to Canadian Dollar
deposits in the London interbank market) at approximately 11:00 a.m., London
time, two Business Days prior to the commencement of such Interest Period, as
the rate for Canadian Dollar deposits with a maturity comparable to such
Interest Period. In the event that such rate is not available at such time for
any reason, then the "Canadian Dollar LIBO Rate" with respect to such Canadian
Dollar LIBO Borrowing for such Interest Period shall be the rate at which
Canadian Dollar deposits of C$5,000,000 and for a maturity comparable to such
Interest Period are offered by the principal London office of the Administrative
Agent in immediately available funds in the London interbank market at
approximately 11:00 a.m., London time, two Business Days prior to the
commencement of such Interest Period.
"Canadian Dollars" and "C$" mean dollars in lawful currency of
Canada.
"Canadian Eligible Accounts" means, at any time, the aggregate
Accounts of the Canadian Borrower, but excluding any Account:
(a) which is not subject to a first priority perfected security
interest in favor of the Collateral Agent;
(b) which is subject to any Lien other than (i) a Lien in favor of
the Collateral Agent and (ii) a Permitted Lien which does not have priority over
the Lien in favor of the Collateral Agent;
(c) (i) is unpaid more than 90 days (105 days in the case of any
Account with an original due date more than 30 days after the date of the
original invoice therefor) after the date of the original invoice therefor or
more than 60 days after the original due date, or (ii) which has been written
off the books of the Canadian Borrower or otherwise designated as uncollectible;
(d) which is owing by an Account Debtor for which more than 50% of
the Accounts owing from such Account Debtor and its Affiliates are ineligible
pursuant to clause (c) above;
(e) which is owing by an Account Debtor to the extent the aggregate
amount of Accounts owing from such Account Debtor and its Affiliates to the Loan
Parties exceeds 20% (25% in respect of an Account Debtor whose securities are
rated Investment Grade) of the sum of the aggregate Canadian Eligible Accounts
plus the aggregate Eligible U.S. Accounts;
(f) with respect to which any covenant, representation, or warranty
contained in this Agreement, the Canadian Debenture, the Canadian Security
Agreements or the Security Agreement has been breached or is not true;
7
(g) which (i) does not arise from the sale of goods or performance
of services in the ordinary course of business, (ii) is not evidenced by an
invoice or other documentation reasonably satisfactory to the Administrative
Agent which has been sent to the Account Debtor, (iii) represents a progress
billing, (iv) is contingent upon the Canadian Borrower's completion of any
further performance, (v) represents a sale on a bill-and-hold, guaranteed sale,
sale-and-return, sale on approval, consignment, cash-on-delivery or any other
repurchase or return basis or (vi) relates to payments of interest;
(h) with respect to which any check or other instrument of payment
has been returned uncollected for any reason;
(i) which is owed by an Account Debtor which currently (i) has
applied for, suffered, or consented to the appointment of any receiver,
custodian, trustee, monitor, custodian, liquidator, administrator, interim
receiver, monitor or trustee or other for such Account Debtor or for any of its
assets, including, without limitation, the appointment of or taking possession
by a "custodian," as defined in the Bankruptcy Code (U.S.) or "trustee" under
the Bankruptcy and Insolvency Act (Canada), (ii) has instituted or had
instituted against it any other type of insolvency, liquidation, bankruptcy,
winding up or reorganization proceeding (under the laws of Canada, the United
States or otherwise, including applicable corporate statutes, the Bankruptcy and
Insolvency Act (Canada), the Companies' Creditors Arrangement Act (Canada) and
the Bankruptcy Code (U.S.)) or any formal or informal proceeding for the
dissolution or liquidation of, settlement of claims against, or winding up of
affairs of, such Account Debtor, (iii) has had possession of all or a material
part of its property taken by any receiver, custodian, trustee or liquidator,
(iv) has filed, or had filed against it, any request, proposal, notice of intent
to file a proposal, proceeding, action or petition for liquidation,
reorganization, arrangement, adjustment of debts, adjudication as a bankrupt,
winding-up, or voluntary or involuntary case or other relief under the
bankruptcy, insolvency, restructuring, liquidation, winding up, corporate or
similar laws of Canada, any province or territory thereof, the United States of
America or any State thereof, or any foreign jurisdiction, now or hereafter in
effect (other than post-petition Accounts payable of an Account Debtor that is a
debtor-in-possession and reasonably acceptable to the Administrative Agent), (v)
has made any general assignment for the benefit of creditors, (vi) has admitted
in writing its inability, or is generally unable to, pay its debts as they
become due, (vii) has become insolvent, or (viii) has ceased operation of its
business;
(j) which is owed by an Account Debtor which (i) does not maintain
its chief executive office or principal office in the U.S. or Canada or (ii) is
not organized under applicable law of the U.S., any state of the U.S., Canada,
or any province of Canada unless, in either case, such Account is backed by a
letter of credit reasonably acceptable to the Administrative Agent which is in
the possession of, has been assigned to and is directly drawable by the
Collateral Agent;
(k) which is owed in any currency other than Canadian Dollars or
U.S. Dollars;
(l) which is owed by (i) the government (or any department, agency,
public corporation, or instrumentality thereof) of any country other than the
U.S. unless such Account is backed by a letter of credit acceptable to the
Administrative Agent which is in the possession of the Collateral Agent, or (ii)
the government of the U.S., or any department, agency, public corporation, or
instrumentality thereof, unless the Federal Assignment of Claims Act of 1940, as
amended (31 U.S.C. Section 3727 et seq. and 41 U.S.C. Section 15 et seq.), and
any other steps necessary to perfect the Lien of the Collateral Agent in such
Account have been complied with to the Agents' reasonable satisfaction;
(m) which is owed by any Affiliate, Subsidiary, employee, officer,
director, agent or stockholder of any Loan Party;
8
(n) which, for any Account Debtor, exceeds a credit limit determined
by the Canadian Borrower, to the extent of such excess;
(o) where the Account Debtor (i) is a creditor, (ii) has or has
asserted a right of set-off against the Canadian Borrower (unless such Account
Debtor has entered into a written agreement reasonably acceptable to the
Administrative Agent to waive such set-off rights) or (iii) has disputed its
liability (whether by chargeback or otherwise) or made any asserted or
unasserted claim with respect to the Account or any other Account of the
Canadian Borrower which has not been resolved, in each case, without
duplication, to the extent of the amount owed by such Canadian Borrower to the
Account Debtor, but only to the extent of the amount of such actual or asserted
right of set-off, or the amount of such dispute claim, or the amount of such
security, deposit, progress payment, retainage or other similar advance made by
or for the benefit of an Account Debtor, as the case may be;
(p) which is evidenced by any promissory note, chattel paper, or
instrument;
(q) which is owed by an Account Debtor located in any jurisdiction
which requires filing of a "Notice of Business Activities Report" or other
similar report in order to permit the Canadian Borrower to seek judicial
enforcement in such jurisdiction of payment of such Account, unless the Canadian
Borrower has filed such report or qualified to do business in such jurisdiction;
(r) with respect to which the Canadian Borrower has made any
agreement with the Account Debtor for any reduction thereof, other than
discounts and adjustments given in the ordinary course of business, or any
Account which was partially paid and the Canadian Borrower created a new
receivable for the unpaid portion of such Account;
(s) which does not comply in all material respects with the
requirements of all applicable laws and regulations, whether Federal,
provincial, state or local, including without limitation the Federal Consumer
Credit Protection Act, the Federal Truth in Lending Act and Regulation Z of the
Board;
(t) which is for goods that have been sold under a purchase order or
pursuant to the terms of a contract or other agreement or understanding (written
or oral) that indicates or purports that any Person other than the Canadian
Borrower (or, upon consummation of such sale, the Account Debtor to whom such
goods were sold) has or has had an ownership interest in such goods, or which
indicates any party other than the Canadian Borrower as payee or remittance
party;
(u) which was created on cash on delivery terms;
(v) which is a non-trade Account (except for an Account which
represents a sale of tooling or prototypes that have been approved and accepted
by the applicable Account Debtor);
(w) which is an extended terms account, which is due and payable
more than 90 days from the original date of invoice; or
(x) which the Administrative Agent determines in its Permitted
Discretion may not be paid by reason of the Account Debtor's inability to pay or
which the Administrative Agent otherwise determines in its Permitted Discretion
is unacceptable for any reason whatsoever, in either case based on any Changed
Circumstances.
In the event that an Account which was previously a Canadian
Eligible Account ceases to be a Canadian Eligible Account hereunder, the
Canadian Borrower shall exclude such Account from
9
Eligible Accounts on, and at the time of submission to the Administrative Agent
of, the next Canadian Borrowing Base Certificate. In determining the amount of a
Canadian Eligible Account, the face amount of an Account shall be reduced by,
without duplication and to the extent such deduction is not reflected in such
face amount, (i) the amount of all accrued and actual discounts, claims, credits
or credits pending, promotional program allowances, price adjustments, finance
charges or other allowances (including any amount that the Canadian Borrower is
obligated to rebate to an Account Debtor pursuant to the terms of any agreement
or understanding (written or oral) and (ii) the aggregate amount of all cash
received in respect of such Account but not yet applied by the Canadian Borrower
to reduce the amount of such Account. In determining the aggregate amount from
the same Account Debtor that is unpaid more than 90 days (or 105 days, if
applicable) from the date of invoice or more than 60 days from the due date
pursuant to clause (c) above, there shall be excluded the amount of any net
credit balances relating to Accounts due from an Account Debtor with invoice
dates more than 90 days (or 105 days, if applicable) from the date of invoice or
more than 60 days from the due date.
"Canadian Eligible Equipment" means equipment owned by the Canadian
Borrower on the Effective Date in respect of which an appraisal report has been
delivered to the Administrative Agent (in form, scope and substance reasonably
satisfactory to the Administrative Agent) or constituting Additional Canadian
Eligible Equipment, and, in either case, meeting each of the following
requirements:
(a) the Canadian Borrower has good title to such equipment;
(b) the Canadian Borrower has the right to subject such equipment to
a Lien in favor of the Collateral Agent; such equipment is subject to a first
priority perfected Lien in favor of the Collateral Agent and is free and clear
of all other Liens of any nature whatsoever (except for Permitted Liens which do
not have priority over the Lien in favor of the Collateral Agent);
(c) the full purchase price for such equipment has been paid by the
Canadian Borrower;
(d) such equipment is located on premises (i) owned by the Canadian
Borrower, which premises are subject to a first priority perfected Lien in favor
of the Collateral Agent, or (ii) leased by the Canadian Borrower so long as (x)
the lessor has delivered to the Agents a Collateral Access Agreement or (y) a
Rent Reserve or Reserve for charges, and other amounts due or to become due with
respect to such facility has been established by the Administrative Agent in its
Permitted Discretion;
(e) such equipment is in good working order and condition (ordinary
wear and tear excepted) and is used or held for use by the Canadian Borrower in
the ordinary course of business of the Canadian Borrower;
(f) such equipment is not subject to any agreement which restricts
the ability of the Canadian Borrower to use, sell, transport or dispose of such
equipment or which restricts the any Agent's ability to take possession of, sell
or otherwise dispose of such equipment; and
(g) such equipment does not constitute "fixtures" under the
applicable laws of the jurisdiction in which such equipment is located, unless
such equipment is located on Canadian Eligible Real Property.
In the event that equipment which was previously Canadian Eligible
Equipment ceases to be Canadian Eligible Equipment hereunder, the Canadian
Borrower shall exclude such equipment from Canadian Eligible Equipment on, and
at the time of submission to the Administrative Agent of, the next Canadian
Borrowing Base Certificate.
10
"Canadian Eligible Inventory" means, at any time, the Inventory of
the Canadian Borrower, but excluding any Inventory:
(a) which is not subject to a first priority perfected Lien in favor
of the Collateral Agent;
(b) which is subject to any Lien other than (i) a Lien in favor of
the Collateral Agent and (ii) a Permitted Lien which does not have priority over
the Lien in favor of the Collateral Agent;
(c) which is identified by the Canadian Borrower (in accordance with
its current practices as of the Effective Date) as, or (if the Canadian Borrower
modifies such practices in any material respect after the Effective Date) in the
Administrative Agent's opinion (exercising its Permitted Discretion) is, excess,
slow moving, obsolete, unmerchantable, unfit for sale or not salable at prices
approximating at least the cost of such Inventory in the ordinary course of
business;
(d) with respect to which any covenant, representation, or warranty
contained in this Agreement, the Canadian Debenture, the Canadian Security
Agreements or the Security Agreement has been breached or is not true and which
does not conform to all standards imposed by any Governmental Authority;
(e) in which any Person other than the Canadian Borrower shall (i)
have any direct or indirect ownership, interest or title to such Inventory or
(ii) be indicated on any purchase order or invoice with respect to such
Inventory as having or purporting to have an interest therein;
(f) which is not finished goods or raw materials, or which
constitutes work-in-process, maintenance or repair parts for manufacturing
equipment, packaging and shipping materials, manufacturing supplies, samples,
prototypes, displays or display items, bill-and-hold goods, goods that are
returned or marked for return, repossessed goods, defective or damaged goods,
goods held on consignment, or goods which are not of a type held for sale in the
ordinary course of business;
(g) which is not located in Canada or the United States or is in
transit with a common carrier from vendors and suppliers;
(h) which is located in any location leased by any Loan Party unless
(i) the lessor has delivered to the Agents a Collateral Access Agreement or (ii)
a Rent Reserve or Reserve for charges and other amounts due or to become due
with respect to such facility has been established by the Administrative Agent
in its Permitted Discretion;
(i) which is located in any third party warehouse or is in the
possession of a bailee (other than a third party processor) and is not evidenced
by a Document, unless (i) such warehouseman or bailee has delivered to the
Collateral Agent a Collateral Access Agreement and such other documentation as
the Administrative Agent may require or (ii) an appropriate Reserve has been
established by the Administrative Agent in its Permitted Discretion;
(j) which is being processed offsite at a third party location or
outside processor, or is in-transit to or from said third party location or
outside processor;
(k) which is a discontinued product or component thereof in excess
of quantities required under customer purchase agreements;
(l) which is the subject of a consignment by the Canadian Borrower
as consignor;
11
(m) which is perishable;
(n) which contains or bears any intellectual property rights
licensed to the Canadian Borrower unless the Collateral Agent may sell or
otherwise dispose of such Inventory without (i) infringing the rights of such
licensor, (ii) violating any contract with such licensor, or (iii) incurring any
liability with respect to payment of royalties other than royalties incurred
pursuant to sale of such Inventory under the current licensing agreement;
(o) which is not reflected in a current perpetual inventory report
of the Canadian Borrower (unless such Inventory is reflected in a report to the
Administrative Agent as "in transit" Inventory);
(p) to the extent of that portion of the cost of such Inventory
which is attributable to intercompany profit among the Canadian Borrower and any
Affiliate; or
(q) which the Administrative Agent otherwise determines in its
Permitted Discretion is unacceptable for any reason whatsoever based upon any
Changed Circumstances.
In the event that Inventory which was previously Canadian Eligible
Inventory ceases to be Canadian Eligible Inventory hereunder, the Canadian
Borrower shall exclude such Inventory from Canadian Eligible Inventory on, and
at the time of submission to the Administrative Agent of, the next Canadian
Borrowing Base Certificate.
"Canadian Eligible Real Property" means the real property listed on
Schedule 1.01(a) owned by the Canadian Borrower (i) in respect of which an
appraisal report has been delivered to the Administrative Agent in form, scope
and substance reasonably satisfactory to the Administrative Agent, (ii) in
respect of which all actions necessary or desirable in order to create a
perfected first priority Lien on such real property have been taken, including,
the filing and recording of Mortgages, (iii) in respect of which an
environmental assessment report has been completed and delivered to the
Administrative Agent in form and substance reasonably satisfactory to the
Administrative Agent and which does not indicate any material pending,
threatened or existing Environmental Liability, or material non-compliance with
any Environmental Law, in any case which could reasonably be expected to impair
the value of such real property in any material respect or result in any
material liability to the owner thereof, except (in the case of any such real
property) to the extent a Reserve has been imposed by Administrative Agent in
its Permitted Discretion with respect to such Environmental Liability or such
non-compliance with Environmental Law, (iv) with respect to which the
Administrative Agent has received fully-paid valid title insurance with
endorsements and in amounts reasonably acceptable to the Administrative Agent,
insuring that the Collateral Agent, for the benefit of the Collateral Agent and
the Lenders, shall have a perfected first priority Lien on such real property,
and (v) if required by the Administrative Agent in its reasonable judgment, with
respect to which (A) an ALTA survey has been delivered for which all necessary
fees have been paid and which is dated no more than 30 days prior to the date on
which the applicable Mortgage is recorded, certified to Administrative Agent and
the issuer of the title insurance policy in a manner reasonably satisfactory to
the Administrative Agent by a land surveyor duly registered and licensed in the
state in which such real property is located and reasonably acceptable to the
Administrative Agent, which shows all buildings and other improvements, the
location of any easements, parking spaces, building setback lines and the
absence of encroachments, either by such improvements or on to such property,
and other defects, other than encroachments and other defects acceptable to the
Administrative Agent; (B) local counsel for the Agents in provinces in which the
Canadian Eligible Real Property is located have delivered a letter of opinion
with respect to the enforceability and perfection of the Mortgages and any
related fixture filings (and such other customary matters) in form and substance
satisfactory to the Administrative Agent; and (C) the Canadian Borrower shall
have used its
12
commercially reasonable best efforts to obtain estoppel certificates executed by
all tenants of such Canadian Eligible Real Property and such other consents,
agreements and confirmations of lessors and third parties have been delivered as
the Administrative Agent may deem necessary, together with evidence that all
other actions that the Administrative Agent may deem necessary in order to
create perfected first priority Liens on the property described in the Mortgages
have been taken.
In the event that real property which was previously Canadian
Eligible Real Property ceases to be Canadian Eligible Real Property hereunder,
the Canadian Borrower shall exclude such real property from Canadian Eligible
Real Property on, and at the time of submission to the Administrative Agent of,
the next Canadian Borrowing Base Certificate.
"Canadian Fixed Asset Component" means, at any time and with respect
to the Canadian Borrower, the lesser of (A) the Canadian Fixed Asset Sublimit
and (B) the sum of (i) 75% of the Net Orderly Liquidation Value of the Canadian
Eligible Equipment (based on the then most recent independent appraisal thereof
received by the Administrative Agent), plus (ii) 75% of the fair market value of
the Canadian Eligible Real Property (based on the then most recent independent
appraisal thereof received by the Administrative Agent).
"Canadian Fixed Asset Sublimit" shall initially mean an amount equal
to C$15,000,000, which amount shall be reduced by C$125,000 on the first day of
each fiscal quarter commencing with the calendar quarter beginning on July 1,
2005. Upon the inclusion of any Additional Canadian Eligible Equipment as
Canadian Eligible Equipment, the Canadian Fixed Asset Sublimit shall be
increased by an amount equal to 75% of the Hard Costs of such Additional
Canadian Eligible Equipment (each such increase, a "Canadian Fixed Asset
Sublimit Increase"); provided that in no event shall the Canadian Fixed Asset
Sublimit be increased to an amount exceeding C$15,000,000. Each Canadian Fixed
Asset Sublimit Increase shall be reduced quarterly on the first day of each
fiscal quarter by an amount equal to 1/28th of the initial amount of such
Canadian Fixed Asset Sublimit Increase, commencing with the first day of the
fiscal quarter which begins at least 90 days after the date of such Canadian
Fixed Asset Sublimit Increase.
"Canadian Guarantees" means collectively the Guarantees of each of
the Canadian Subsidiary Guarantors in favor of the Collateral Agent, for the
benefit of the Collateral Agent and the Lenders, including any reaffirmations of
same, and as same may be further amended, restated or otherwise modified from
time to time.
"Canadian Inventory Reserves" shall mean reserves against Canadian
Eligible Inventory equal to the sum of the following:
(a) a reserve determined by the Administrative Agent in its
Permitted Discretion for shrink, or discrepancies that arise pertaining to
Inventory quantities on hand between the Canadian Borrower's perpetual
accounting system, and physical counts of the Inventory, to the extent not
recorded on the Canadian Borrower's books and records;
(b) a revaluation reserve whereby capitalized favorable variances
shall be deducted from Canadian Eligible Inventory and unfavorable variances
shall not be added to Canadian Eligible Inventory;
(c) a lower of cost or market reserve for any differences between
the Canadian Borrower's actual cost to produce versus its selling price to third
parties; and
(d) any other reserve as deemed appropriate by the Administrative
Agent in its Permitted Discretion, from time to time based upon any Changed
Circumstances.
13
"Canadian Lenders" means the Persons listed as such on the
Commitment Schedule and any other Canadian Resident Lender that shall have
become a party hereto, in such capacity, pursuant to an Assignment and
Assumption, other than any such Person that ceases to be a party hereto pursuant
to an Assignment and Assumption. Unless the context otherwise requires, the term
"Canadian Lenders" includes the Canadian Swingline Lender.
"Canadian Loans" means the collective reference to the Canadian
Revolving Loans, the Canadian Swingline Loans and Protective Advances made on
behalf of the Canadian Lenders.
"Canadian Net Recovery Liquidation Rate" shall mean, at any time
with respect to the Canadian Borrowers' Canadian Inventory, the quotient
(expressed as a percentage) of (i) the Net Orderly Liquidation Value of Canadian
Borrower's Canadian Inventory divided by (ii) the gross inventory cost of such
Inventory, determined on the basis of the then most recently conducted inventory
appraisal performed by an independent inventory appraisal firm reasonably
satisfactory to the Administrative Agent.
"Canadian Obligations" means all unpaid principal of and accrued and
unpaid interest on the Canadian Loans, all accrued and unpaid fees and all
expenses, reimbursements, indemnities and other obligations of the Canadian
Borrower to the Canadian Lenders or to any Canadian Lender, the Agents or to any
Agent, or any indemnified party arising under the Loan Documents.
"Canadian Pension Event" means (a) the filing of a notice of intent
to terminate, the treatment of a Canadian Plan amendment, withdrawal, cessation
of operations or termination of employees as a termination (in whole or in
part), or the commencement of proceedings by any Governmental Authority or
administrator appointed by a Governmental Authority to terminate (in whole or in
part) a Canadian Plan, (b) the occurrence of an event or condition which would
reasonably be expected to constitute grounds for the termination (in whole or in
part) of, or the appointment by a Governmental Authority of a third party to
administer, any Canadian Plan, or (c) the imposition of any liability by any
Governmental Authority in respect of a Canadian Plan, other than for premiums or
contributions due but not delinquent, upon a Loan Party.
"Canadian Plan" means at any time an employee benefit plan which is
subject to the minimum funding standards described by applicable Canadian
federal or provincial law or is otherwise required to be registered under or is
subject to the application of pension benefits legislation of any province
established for or in respect of the Canadian Borrower.
"Canadian Pledge Agreements" means collectively the Pledge
Agreements of the Canadian Borrower and any of the Canadian Subsidiary
Guarantors granting Liens in favor of the Collateral Agent, for the benefit of
the Collateral Agent and the Lenders, including any reaffirmations of same, and
as same may be further amended, restated or otherwise modified from time to
time.
"Canadian Prime Rate" means, on any day, the annual rate of interest
equal to the greater of (i) the annual rate of interest announced by the
JPMorgan Chase Bank, N.A., Toronto Branch and in effect as its prime rate at its
principal office in Toronto, Ontario on such day for determining interest rates
on Canadian Dollar-denominated commercial loans in Canada, and (ii) the annual
rate of interest equal to the sum of (A) the one-month Canadian Dollar LIBO Rate
in effect on such date, plus (B) 1.00%.
"Canadian Priority Payables Reserve" means the sum of (a) at any
time, the full amount of the liabilities at such time which have a trust imposed
to provide for payment thereof or a security interest, lien or charge, ranking
or capable of ranking, in each case, senior to or pari passu with the Liens
granted by the applicable Loan Party under Canadian federal, provincial, county,
municipal, or local law
14
with respect to claims for goods and services taxes, sales tax, income tax and
other employee source deductions, workers' compensation obligations, vacation
pay or pension fund obligations.
"Canadian Resident Lender" means, as of any date of determination, a
Person that (a) at that time is not a non-resident of Canada for purposes of the
Income Tax Act (Canada) or (b) at that time is an "authorized foreign bank" for
purposes of the Income Tax Act (Canada) that holds any interest it has in the
Canadian Loans in the course of its "Canadian banking business" as defined in
the Income Tax Act (Canada).
"Canadian Revolving Lenders" means, as of any date of determination,
Lenders having a Canadian Revolving Subfacility Commitment.
"Canadian Revolving Loan" means a Loan made pursuant to Section
2.02(b).
"Canadian Revolving Subfacility Commitment" means, with respect to
each Canadian Revolving Lender, the commitment of such Canadian Lender to make
Canadian Revolving Loans and to acquire participations in Canadian Swingline
Loans and Protective Advances hereunder, as such commitment may be (a) reduced
from time to time pursuant to Section 2.10 and (b) reduced or increased from
time to time pursuant to assignments by or to such Canadian Lender pursuant to
Section 9.04. The initial amount of each Canadian Revolving Lender's Canadian
Revolving Subfacility Commitment is set forth on the Commitment Schedule, or in
the Assignment and Assumption pursuant to which such Lender shall have assumed
its Canadian Revolving Subfacility Commitment, as applicable. The initial
aggregate amount of the Canadian Revolving Lenders' Canadian Revolving
Subfacility Commitments is C$25,000,000.
"Canadian Revolving Subfacility Credit Exposure" means, with respect
to any Canadian Revolving Lender at any time, the sum of the outstanding
principal amount of such Canadian Revolving Lender's Canadian Revolving Loans
and an amount equal to its Canadian Applicable Percentage of the aggregate
principal amount of Canadian Swingline Loans outstanding at such time.
"Canadian Security Agreements" means collectively the General
Security Agreements of each of the Canadian Subsidiary Guarantors granting Liens
in favor of the Collateral Agent, for the benefit of the Collateral Agent and
the Lenders, including any reaffirmations of same, and as same may be further
amended, restated or otherwise modified from time to time.
"Canadian Subsidiary" means a Subsidiary that is organized under the
laws of Canada or a province or territory thereof.
"Canadian Subsidiary Guarantors" means Canadian Subsidiaries which
have guarantied the Canadian Obligations.
"Canadian Swingline Lender" means JPMorgan Chase Bank, N.A., Toronto
Branch, in its capacity as lender of Canadian Swingline Loans hereunder.
"Canadian Swingline Loan" means a Loan made pursuant to Section
2.06(b).
"Capital Expenditures" means, without duplication, any expenditure
for any purchase or other acquisition of any asset which would be classified as
a fixed or capital asset on a consolidated balance sheet of the Parent and its
Subsidiaries prepared in accordance with GAAP, except to the extent made with
asset sale, condemnation or casualty proceeds.
15
"Capital Lease Obligations" of any Person means the obligations of
such Person to pay rent or other amounts under any lease of (or other
arrangement conveying the right to use) real or personal property, or a
combination thereof, which obligations are required to be classified and
accounted for as capital leases on a balance sheet of such Person under GAAP,
and the amount of such obligations shall be the capitalized amount thereof
determined in accordance with GAAP.
"Cash Availability Trigger" means, at any time, the sum of (i)
Availability plus (ii) the Dollar Equivalent amount of unrestricted cash and
Permitted Investments, in each case deposited or held in a depository account or
investment account maintained with JPMorgan Chase Bank, N.A. and subject to a
springing blocked account or control agreement in favor of the Collateral Agent.
"Change in Control" any of the following events: (a) any Person or
group (within the meaning of Rule 13-d-5 of the SEC under the Securities
Exchange Act of 1934), shall be or become the beneficial owner (as defined in
Rule 13d-3 of the SEC under the Securities Exchange Act of 1934) of issued and
outstanding capital stock of Parent representing 35% or more of the voting power
in elections for directors of Parent on a fully diluted basis; (b) a majority of
the members of the board of directors of Parent or the board of directors of
U.S. Borrower shall cease to be Continuing Members; (c) Parent shall cease to
own, directly or indirectly, 100% of the issued and outstanding capital stock of
U.S. Borrower; or (d) a Change of Control, as defined in the 1999 Subordinated
Indenture, the 1999 Subordinated Notes, the 2002 Senior Indenture, the 2002
Senior Unsecured Notes or the Second Lien Credit Agreement, shall occur.
"Change in Law" means (a) the adoption of any law, rule or
regulation after the date of this Agreement, (b) any change in any law, rule or
regulation or in the interpretation or application thereof by any Governmental
Authority after the date of this Agreement or (c) compliance by any Lender or
the Issuing Bank (or, for purposes of Section 2.16(b), by any lending office of
such Lender or by such Lender's or the Issuing Bank's holding company, if any)
with any request, guideline or directive (whether or not having the force of
law) of any Governmental Authority made or issued after the date of this
Agreement.
"Changed Circumstances" means any material facts or circumstances
which arise after the Effective Date or which otherwise first become known to
the Administrative Agent after the Effective Date.
"Chase" means JPMorgan Chase Bank, N.A., a national banking
association, in its individual capacity, and its successors.
"Class", when used in reference to any Loan or Borrowing, refers to
whether such Loan, or the Loans comprising such Borrowing, are Canadian
Revolving Loans, U.S. Revolving Loans, Canadian Swingline Loans, U.S. Swingline
Loans, Protective Advances for the benefit of Canadian Lenders or Protective
Advances for the benefit of U.S. Lenders.
"Code" means the Internal Revenue Code of 1986, as amended from time
to time.
"Collateral" means any and all property owned, leased or operated by
a Person covered by the Collateral Documents and any and all other property of
any Loan Party, now existing or hereafter acquired, that may at any time be or
become subject to a security interest or Lien in favor of Collateral Agent, on
behalf of itself and the Lenders, to secure the Secured Obligations.
16
"Collateral Agent" means, collectively, Bank of America, N.A. or
JPMorgan Chase Bank, N.A., together with their respective Affiliates, as the
collateral agents for the Lenders under this Agreement and the other Loan
Documents, together with any of their respective permitted successors.
"Collateral Access Agreement" has the meaning assigned to such term
in the Security Agreement.
"Collateral Documents" means, collectively, the Canadian Debenture,
the Canadian Pledge Agreements, the Security Agreement, the Canadian Security
Agreements, the Canadian Guarantees, the Mortgages and any other documents
granting a Lien upon the Collateral as security for payment of the Secured
Obligations.
"Collection Account" has the meaning assigned to such term in the
Security Agreement.
"Commitment Increase" has the meaning assigned to such term in
Section 2.02(c).
"Commitment Increase Cap" has the meaning assigned to such term in
Section 2.02(c).
"Commitment Schedule" means the Schedule attached hereto identified
as such.
"Continuing Member" means a member of the board of directors of
Parent or U.S. Borrower who either (a) was a member of such board of directors
on the Effective Date and has been such continuously thereafter or (b) became a
member of such board of directors after the Effective Date and whose election or
nomination for election was approved by a vote of the majority of the Continuing
Members then members of such board of directors.
"Control" means the possession, directly or indirectly, of the power
to direct or cause the direction of the management or policies of a Person,
whether through the ability to exercise voting power, by contract or otherwise.
"Controlling" and "Controlled" have meanings correlative thereto.
"Credit Exposure" means, as to any Lender at any time, the sum of
(a) such Lender's Revolving Credit Exposure at such time, plus (b) an amount
equal to its Canadian Applicable Percentage or U.S. Applicable Percentage (as
applicable), if any, of the Dollar Equivalent of the aggregate principal amount
of Protective Advances outstanding at such time.
"Default" means any event or condition which constitutes an Event of
Default or which upon notice, lapse of time or both would, unless cured or
waived, become an Event of Default.
"Defaulting Lender" has the meaning assigned to such term in Section
2.08(b).
"Disclosed Matters" means the actions, suits, matters and
proceedings and the environmental matters disclosed in Schedule 3.06.
"Disposed Business" means the sale or other transfer of
substantially all of the assets of a business unit, line or plant to another
Person or Persons that are neither Parent nor a Subsidiary.
"Disposed Subsidiary" means the sale or other transfer of any or all
of Parent's or any Subsidiary's interest in any Subsidiary to another Person or
Persons so that such Disposed Subsidiary is no longer a Subsidiary of Parent or
its Subsidiaries.
"Document" has the meaning assigned to such term in the Security
Agreement.
17
"Dollar Equivalent" means, at any time, (i) with respect to dollars,
the amount of such Dollars and (ii) with respect to any amount of currency other
than Dollars, the amount of Dollars into which the amount of such other currency
could be converted into dollars as determined by the Administrative Agent using
the Exchange Rate.
"Dollars", "dollars" or "$" refers to lawful money of the United
States of America.
"Domestic Subsidiary" means any Subsidiary incorporated or otherwise
formed under the laws of the United States of America, any state thereof or the
District of Columbia.
"EBITDA" means for any period, the sum of:
(a) Net Income of Parent and its Subsidiaries for such period
excluding, to the extent reflected in determining such Net Income, (i)
extraordinary gains and losses for such period and non-cash restructuring or
other non-cash charges and (ii) gains and losses from the disposition of a
Disposed Business or Disposed Subsidiary, plus
(b) to the extent deducted in determining Net Income, Interest
Expense, income tax expense, depreciation, depletion, amortization, any
scheduled payment of interest on (without duplication) any of the Trust
Preferred Stock Debentures or the Trust Preferred Securities and any minority
interest subtracted from Net Income for such period.
"Effective Date" means the date on which the conditions specified in
Section 4.01 are satisfied (or waived in accordance with Section 9.02).
"Eligible Aircraft" means the aircraft owned by Automotive Aviation
Partners, LLC and identified on Exhibit 1.01(b) and meeting each of the criteria
for "Eligible U.S. Equipment" set forth in the definition thereof, excluding the
criteria set forth in clause (d) of such definition.
"Eligible U.S. Accounts" means, at any time, the aggregate Accounts
of the U.S. Borrower and U.S. Subsidiary Guarantors, but excluding any Account:
(a) which is not subject to a first priority perfected security
interest in favor of the Collateral Agent;
(b) which is subject to any Lien other than (i) a Lien in favor of
the Collateral Agent and (ii) a Permitted Lien which does not have priority over
the Lien in favor of the Collateral Agent;
(c) (i) is unpaid more than 90 days (105 days in the case of any
Account with an original due date more than 30 days after the date of the
original invoice therefor) after the date of the original invoice therefor or
more than 60 days after the original due date, or (ii) which has been written
off the books of the U.S. Borrower or applicable U.S. Subsidiary Guarantors or
otherwise designated as uncollectible;
(d) which is owing by an Account Debtor for which more than 50% of
the Accounts owing from such Account Debtor and its Affiliates are ineligible
pursuant to clause (c) above;
(e) which is owing by an Account Debtor to the extent the aggregate
amount of Accounts owing from such Account Debtor and its Affiliates to the Loan
Parties exceeds 20% (25% in respect of an Account Debtor whose securities are
rated Investment Grade) of the sum of the aggregate Eligible U.S. Accounts plus
the aggregate Canadian Eligible Accounts;
18
(f) with respect to which any covenant, representation, or warranty
contained in this Agreement or in the Security Agreement has been breached or is
not true;
(g) which (i) does not arise from the sale of goods or performance
of services in the ordinary course of business, (ii) is not evidenced by an
invoice or other documentation reasonably satisfactory to the Administrative
Agent which has been sent to the Account Debtor, (iii) represents a progress
billing, (iv) is contingent upon the U.S. Borrower's or applicable U.S.
Subsidiary Guarantors' completion of any further performance, (v) represents a
sale on a bill-and-hold, guaranteed sale, sale-and-return, sale on approval,
consignment, cash-on-delivery or any other repurchase or return basis or (vi)
relates to payments of interest;
(h) with respect to which any check or other instrument of payment
has been returned uncollected for any reason;
(i) which is owed by an Account Debtor which currently (i) has
applied for, suffered, or consented to the appointment of any receiver,
custodian, trustee, or liquidator of its assets, (ii) has had possession of all
or a material part of its property taken by any receiver, custodian, trustee or
liquidator, (iii) filed, or had filed against it, any request or petition for
liquidation, reorganization, arrangement, adjustment of debts, adjudication as
bankrupt, winding-up, or voluntary or involuntary case under any state or
federal bankruptcy laws (other than post-petition Accounts of an Account Debtor
that is a debtor-in-possession under the Bankruptcy Code and reasonably
acceptable to the Administrative Agent), (iv) has admitted in writing its
inability, or is generally unable to, pay its debts as they become due, (v)
become insolvent, or (vi) ceased operation of its business;
(j) which is owed by an Account Debtor which (i) does not maintain
its chief executive office or principal office in the U.S. or Canada or (ii) is
not organized under applicable law of the U.S., any state of the U.S., Canada,
or any province of Canada unless, in either case, such Account is backed by a
letter of credit reasonably acceptable to the Administrative Agent which is in
the possession of, has been assigned to and is directly drawable by the
Collateral Agent;
(k) which is owed in any currency other than U.S. Dollars or
Canadian Dollars;
(l) which is owed by (i) the government (or any department, agency,
public corporation, or instrumentality thereof) of any country other than the
U.S. unless such Account is backed by a letter of credit acceptable to the
Administrative Agent which is in the possession of the Collateral Agent, or (ii)
the government of the U.S., or any department, agency, public corporation, or
instrumentality thereof, unless the Federal Assignment of Claims Act of 1940, as
amended (31 U.S.C. Section 3727 et seq. and 41 U.S.C. Section 15 et seq.), and
any other steps necessary to perfect the Lien of the Collateral Agent in such
Account have been complied with to the Administrative Agent's reasonable
satisfaction;
(m) which is owed by any Affiliate, Subsidiary, employee, officer,
director, agent or stockholder of any Loan Party;
(n) which, for any Account Debtor, exceeds a credit limit determined
by the U.S. Borrower, to the extent of such excess;
(o) where the Account Debtor (i) is a creditor, (ii) has or has
asserted a right of set-off against the U.S. Borrower or any U.S. Subsidiary
Guarantor (unless such Account Debtor has entered into a written agreement
reasonably acceptable to the Administrative Agent to waive such set-off rights)
or (iii) has disputed its liability (whether by chargeback or otherwise) or made
any asserted or unasserted claim with respect to the Account or any other
Account of the U.S. Borrower or any U.S. Subsidiary
19
Guarantor which has not been resolved, in each case, without duplication, to the
extent of the amount owed by such U.S. Borrower or applicable U.S. Subsidiary
Guarantor to the Account Debtor, but only to the extent of the amount of such
actual or asserted right of set-off, or the amount of such dispute claim, or the
amount of such security, deposit, progress payment, retainage or other similar
advance made by or for the benefit of an Account Debtor, as the case may be;
(p) which is evidenced by any promissory note, chattel paper, or
instrument;
(q) which is owed by an Account Debtor located in any jurisdiction
which requires filing of a "Notice of Business Activities Report" or other
similar report in order to permit the U.S. Borrower or applicable U.S.
Subsidiary Guarantors to seek judicial enforcement in such jurisdiction of
payment of such Account, unless the U.S. Borrower or applicable U.S. Subsidiary
Guarantors has filed such report or qualified to do business in such
jurisdiction;
(r) with respect to which the U.S. Borrower or applicable U.S.
Subsidiary Guarantors has made any agreement with the Account Debtor for any
reduction thereof, other than discounts and adjustments given in the ordinary
course of business, or any Account which was partially paid and the U.S.
Borrower or applicable U.S. Subsidiary Guarantors created a new receivable for
the unpaid portion of such Account;
(s) which does not comply in all material respects with the
requirements of all applicable laws and regulations, whether Federal, state or
local, including without limitation the Federal Consumer Credit Protection Act,
the Federal Truth in Lending Act and Regulation Z of the Board;
(t) which is for goods that have been sold under a purchase order or
pursuant to the terms of a contract or other agreement or understanding (written
or oral) that indicates or purports that any Person other than the U.S. Borrower
or applicable U.S. Subsidiary Guarantors (or, upon consummation of such sale,
the Account Debtor to whom such goods were sold) has or has had an ownership
interest in such goods, or which indicates any party other than the U.S.
Borrower or applicable U.S. Subsidiary Guarantors as payee or remittance party;
(u) which was created on cash on delivery terms;
(v) which is a non-trade Account (except for an Account which
represents a sale of tooling or prototypes that have been approved and accepted
by the applicable Account Debtor);
(w) which is an extended terms account, which is due and payable
more than 90 days from the original date of invoice; or
(x) which the Administrative Agent determines in its Permitted
Discretion may not be paid by reason of the Account Debtor's inability to pay or
which the Administrative Agent otherwise determines in its Permitted Discretion
is unacceptable for any reason whatsoever, in either case based on any Changed
Circumstances.
In the event that an Account which was previously an Eligible U.S.
Account ceases to be an Eligible U.S. Account hereunder, the U.S. Borrower shall
exclude such Account form Eligible U.S. Accounts on, and at the time of
submission to the Administrative Agent of, the next U.S. Borrowing Base
Certificate. In determining the amount of the Eligible U.S. Account, the face
amount of an Account shall be reduced by, without duplication and to the extent
such reduction is not reflected in such face amount, (i) the amount of all
accrued and actual discounts, claims, credits or credits pending, promotional
program allowances, price adjustments, finance charges or other allowances
(including any amount that the U.S.
20
Borrower or applicable U.S. Subsidiary Guarantors is obligated to rebate to an
Account Debtor pursuant to the terms of any agreement or understanding (written
or oral) and (ii) the aggregate amount of all cash received in respect of such
Account but not yet applied by the U.S. Borrower or applicable U.S. Subsidiary
Guarantors to reduce the amount of such Account. In determining the aggregate
amount from the same Account Debtor that is unpaid more than 90 days (or 105
days, if applicable) from the date of invoice or more than 60 days from the due
date pursuant to clause (c) above, there shall be excluded the amount of any net
credit balances relating to Accounts due from an Account Debtor with invoice
dates more than 90 days (or 105 days, if applicable) from the date of invoice or
more than 60 days from the due date.
"Eligible U.S. Equipment" means the equipment owned by the U.S.
Borrower or U.S. Subsidiary Guarantors described on Schedule 1.01(c) or
constituting Additional Eligible U.S. Equipment, and, in either case, meeting
each of the following requirements:
(a) the U.S. Borrower or U.S. Subsidiary Guarantors has good title
to such equipment;
(b) the U.S. Borrower or U.S. Subsidiary Guarantors has the right to
subject such equipment to a Lien in favor of the Collateral Agent; such
equipment is subject to a first priority perfected Lien in favor of the
Collateral Agent and is free and clear of all other Liens of any nature
whatsoever (except for Permitted Liens which do not have priority over the Lien
in favor of the Collateral Agent);
(c) the full purchase price for such equipment has been paid by the
U.S. Borrower or U.S. Subsidiary Guarantors;
(d) such equipment is located on premises (i) owned by the U.S.
Borrower or any U.S. Subsidiary Guarantor, which premises are subject to a first
priority perfected Lien in favor of the Collateral Agent, or (ii) leased by the
U.S. Borrower or any U.S. Subsidiary Guarantor so long as (x) the lessor has
delivered to the Agents a Collateral Access Agreement or (y) a Rent Reserve or
Reserve for charges, and other amounts due or to become due with respect to such
facility has been established by the Administrative Agent in its Permitted
Discretion;
(e) such equipment is in good working order and condition (ordinary
wear and tear excepted) and is used or held for use by the U.S. Borrower or any
U.S. Subsidiary Guarantor in the ordinary course of business of the U.S.
Borrower or such U.S. Subsidiary Guarantor;
(f) such equipment is not subject to any agreement which restricts
the ability of the U.S. Borrower or any U.S. Subsidiary Guarantor to use, sell,
transport or dispose of such equipment or which restricts the any Agent's
ability to take possession of, sell or otherwise dispose of such equipment; and
(g) such equipment does not constitute "fixtures" under the
applicable laws of the jurisdiction in which such equipment is located, unless
such equipment is located on Eligible U.S. Real Property.
In the event that equipment which was previously Eligible U.S.
Equipment ceases to be Eligible U.S. Equipment hereunder, the U.S. Borrower
shall exclude such equipment from Eligible U.S. Equipment on, and at the time of
submission to the Administrative Agent of, the next U.S. Borrowing Base
Certificate.
21
"Eligible U.S. Inventory" means, at any time, the Inventory of the
U.S. Borrower and the U.S. Subsidiary Guarantors, but excluding any Inventory:
(a) which is not subject to a first priority perfected Lien in favor
of the Collateral Agent;
(b) which is subject to any Lien other than (i) a Lien in favor of
the Collateral Agent and (ii) a Permitted Lien which does not have priority over
the Lien in favor of the Collateral Agent;
(c) which is identified by the U.S. Borrower (in accordance with its
current practices as in effect on the Effective Date) as, or (if the U.S.
Borrower modifies such practices in any material respect after the Effective
Date) in the Administrative Agent's opinion (exercising its Permitted
Discretion) is, excess, slow moving, obsolete, unmerchantable, unfit for sale or
not salable at prices approximating at least the cost of such Inventory in the
ordinary course of business;
(d) with respect to which any covenant, representation, or warranty
contained in this Agreement or the Security Agreement has been breached or is
not true and which does not conform to all standards imposed by any Governmental
Authority;
(e) in which any Person other than the U.S. Borrower or applicable
U.S. Subsidiary Guarantors shall (i) have any direct or indirect ownership,
interest or title to such Inventory or (ii) be indicated on any purchase order
or invoice with respect to such Inventory as having or purporting to have an
interest therein;
(f) which is not finished goods or raw materials, or which
constitutes work-in-process, manufacturing maintenance or repair parts,
packaging and shipping materials, manufacturing supplies, samples, prototypes,
displays or display items, bill-and-hold goods, goods that are returned or
marked for return, repossessed goods, defective or damaged goods, goods held on
consignment, or goods which are not of a type held for sale in the ordinary
course of business;
(g) which is not located in the U.S. or Canada or is in transit with
a common carrier from vendors and suppliers;
(h) which is located in any location leased by any Loan Party unless
(i) the lessor has delivered to the Agents a Collateral Access Agreement or (ii)
a Rent Reserve or Reserve for charges and other amounts due or to become due
with respect to such facility has been established by the Administrative Agent
in its Permitted Discretion;
(i) which is located in any third party warehouse or is in the
possession of a bailee (other than a third party processor) and is not evidenced
by a Document, unless (i) such warehouseman or bailee has delivered to the
Agents a Collateral Access Agreement and such other documentation as the Agents
may require or (ii) an appropriate Reserve has been established by the
Administrative Agent in its Permitted Discretion;
(j) which is being processed offsite at a third party location or
outside processor, or is in-transit to or from said third party location or
outside processor;
(k) which is a discontinued product or component thereof in excess
of quantities required under customer purchase agreements;
22
(l) which is the subject of a consignment by the U.S. Borrower or
applicable U.S. Subsidiary Guarantors as consignor;
(m) which is perishable;
(n) which contains or bears any intellectual property rights
licensed to the U.S. Borrower or applicable U.S. Subsidiary Guarantors unless
the Collateral Agent may sell or otherwise dispose of such Inventory without (i)
infringing the rights of such licensor, (ii) violating any contract with such
licensor, or (iii) incurring any liability with respect to payment of royalties
other than royalties incurred pursuant to sale of such Inventory under the
current licensing agreement;
(o) which is not reflected in a current perpetual inventory report
of the U.S. Borrower or applicable U.S. Subsidiary Guarantors (unless such
Inventory is reflected in a report to the Administrative Agent as "in transit"
Inventory);
(p) to the extent of that portion of the cost of such Inventory
which is attributable to intercompany profit among the U.S. Borrower or
applicable U.S. Subsidiary Guarantor and their Affiliates; or
(q) which the Administrative Agent otherwise determines in its
Permitted Discretion is unacceptable for any reason whatsoever based upon any
Changed Circumstances.
In the event that Inventory which was previously Eligible U.S.
Inventory ceases to be Eligible U.S. Inventory hereunder, the U.S. Borrower
shall exclude such Inventory from Eligible U.S. Inventory on, and at the time of
submission to the Administrative Agent of, the next U.S. Borrowing Base
Certificate.
"Eligible U.S. Real Property" means the real property listed on
Schedule 1.01(d) owned by the U.S. Borrower or any U.S. Subsidiary Guarantor (i)
in respect of which an appraisal report has been delivered to the Administrative
Agent in form, scope and substance reasonably satisfactory to the Administrative
Agent, (ii) in respect of which all actions necessary or desirable in order to
create a perfected first priority Lien on such real property have been taken,
including, the filing and recording of Mortgages, (iii) in respect of which an
environmental assessment report has been completed and delivered to the
Administrative Agent in form and substance reasonably satisfactory to the
Administrative Agent and which does not indicate any material pending,
threatened or existing Environmental Liability, or material non-compliance with
any Environmental Law, in any case which could reasonably be expected to impair
the value of such real property in any material respect or result in any
material liability to the owner thereof, except (in the case of any such real
property) to the extent a Reserve has been imposed by Administrative Agent in
its Permitted Discretion with respect to such Environmental Liability or such
non-compliance with Environmental Law, (iv) with respect to which the
Administrative Agent has received fully-paid valid title insurance with
endorsements and in amounts reasonably acceptable to the Administrative Agent,
insuring that the Collateral Agent, for the benefit of the Collateral Agent and
the Lenders, shall have a perfected first priority Lien on such real property,
and (v) if required by the Administrative Agent in its reasonable judgment, with
respect to which (A) an ALTA survey has been delivered for which all necessary
fees have been paid and which is dated no more than 30 days prior to the date on
which the applicable Mortgage is recorded, certified to Administrative Agent and
the issuer of the title insurance policy in a manner reasonably satisfactory to
the Administrative Agent by a land surveyor duly registered and licensed in the
state in which such real property is located and reasonably acceptable to the
Administrative Agent, which shows all buildings and other improvements, the
location of any easements, parking spaces, building setback lines and the
absence of encroachments, either by such improvements or on to such property,
and other defects, other than encroachments and other defects
23
acceptable to the Administrative Agent; (B) local counsel for the Agents in
states in which the Eligible U.S. Real Property is located have delivered a
letter of opinion with respect to the enforceability and perfection of the
Mortgages and any related fixture filings (and such other customary matters) in
form and substance satisfactory to the Administrative Agent; and (C) the U.S.
Borrower or applicable U.S. Subsidiary Guarantors shall have used its
commercially reasonable best efforts to obtain estoppel certificates executed by
all tenants of such Eligible U.S. Real Property, if any, and such other
consents, agreements and confirmations of lessors and third parties have been
delivered as the Administrative Agent may deem necessary, together with evidence
that all other actions that the Administrative Agent may deem necessary in order
to create perfected first priority Liens on the property described in the
Mortgages have been taken.
In the event that real property which was previously Eligible U.S.
Real Property ceases to be Eligible U.S. Real Property hereunder, the U.S.
Borrower shall exclude such real property from Eligible U.S. Real Property on,
and at the time of submission to the Administrative Agent of, the next U.S.
Borrowing Base Certificate.
"Environmental Laws" means all laws, rules, regulations, codes,
ordinances, orders, decrees, judgments, injunctions, notices or binding
agreements issued, promulgated or entered into by any Governmental Authority,
relating in any way to the environment, preservation or reclamation of natural
resources, the management, release or threatened release of any Hazardous
Material or to human health matters.
"Environmental Liability" means any liability, contingent or
otherwise (including any liability for damages, costs of environmental
remediation, fines, penalties or indemnities), of the Borrowers or any
Subsidiary resulting from or based upon (a) violation of any Environmental Law,
(b) the generation, use, handling, transportation, storage, treatment or
disposal of any Hazardous Materials, (c) exposure to any Hazardous Materials,
(d) the release or threatened release of any Hazardous Materials into the
environment or (e) any contract, agreement or other consensual arrangement
pursuant to which liability is assumed or imposed with respect to any of the
foregoing.
"Equity Interests" means shares of capital stock, partnership
interests, membership interests in a limited liability company, beneficial
interests in a trust or other equity ownership interests in a Person, and any
warrants, options or other rights entitling the holder thereof to purchase or
acquire any such equity interest.
"ERISA" means the United States Employee Retirement Income Security
Act of 1974, as amended from time to time.
"ERISA Affiliate" means any trade or business (whether or not
incorporated) that, together with the Borrowers, is treated as a single employer
under Section 414(b) or (c) of the Code or, solely for purposes of Section 302
of ERISA and Section 412 of the Code, is treated as a single employer under
Section 414 of the Code.
"ERISA Event" means (a) any "reportable event", as defined in
Section 4043 of ERISA or the regulations issued thereunder with respect to a
Plan (other than an event for which the 30-day notice period is waived); (b) the
existence with respect to any Plan of an "accumulated funding deficiency" (as
defined in Section 412 of the Code or Section 302 of ERISA), whether or not
waived; (c) the filing pursuant to Section 412(d) of the Code or Section 303(d)
of ERISA of an application for a waiver of the minimum funding standard with
respect to any Plan; (d) the incurrence by the U.S. Borrower or any of its ERISA
Affiliates of any liability under Title IV of ERISA with respect to the
termination of any Plan; (e) the receipt by the U.S. Borrower or any ERISA
Affiliate from the PBGC or a
24
plan administrator of any notice relating to an intention to terminate any Plan
or Plans or to appoint a trustee to administer any Plan; (f) the incurrence by
the U.S. Borrower or any of its ERISA Affiliates of any liability with respect
to the withdrawal or partial withdrawal from any Plan or Multiemployer Plan; or
(g) the receipt by the U.S. Borrower or any ERISA Affiliate of any notice,
concerning the imposition of Withdrawal Liability or a determination that a
Multiemployer Plan is, or is expected to be, insolvent or in reorganization,
within the meaning of Title IV of ERISA.
"Eurodollar", when used in reference to any Loan or Borrowing by the
U.S. Borrower, refers to whether such Loan, or the Loans comprising such
Borrowing, are bearing interest at a rate determined by reference to the
Adjusted LIBO Rate.
"Event of Default" has the meaning assigned to such term in Article
VII.
"Exchange Rate" means, with respect to Dollars or Canadian Dollars
on any date, the rate at which Dollars may be exchanged into Canadian Dollars,
or Canadian Dollars may be exchanged into Dollars, as the case may be, as
determined in accordance with the Bank of Canada's noon spot rate on such date,
and if such date is not a Business Day, on the immediately preceding Business
Day.
"Excluded Taxes" means, with respect to the Administrative Agent,
any Lender, the Issuing Bank or any other recipient of any payment to be made by
or on account of any obligation of the Borrowers hereunder, (a) income or
franchise taxes imposed on (or measured by) its net income or net profit by the
United States of America (including any political subdivision or taxing
authority thereof or therein), or by the jurisdiction under the laws of which
such recipient is organized or in which its principal office is located
(including any political subdivision or taxing authority thereof or therein) or,
in the case of any Lender, in which its applicable lending office is located
(including any political subdivision or taxing authority thereof or therein),
(b) any branch profits taxes imposed by the United States of America or any
similar tax imposed by any other jurisdiction in which any Borrower is located,
(c) in the case of a Foreign Lender (other than an assignee pursuant to a
request by any Borrower under Section 2.20(b)), any withholding tax that is
imposed on amounts payable to such Foreign Lender at the time such Foreign
Lender becomes a party to this Agreement (or designates a new lending office) or
is attributable to such Foreign Lender's failure to comply with Section 2.18(e)
or Section 9.20, except to the extent that such Foreign Lender (or its assignor,
if any) was entitled, at the time of designation of a new lending office (or
assignment), to receive additional amounts from the Borrowers with respect to
such withholding tax pursuant to Section 2.18(a) and (d) in the case of any
Canadian Lender, capital taxes imposed by Canada (including any political
subdivision or taxing authority thereof or therein).
"Existing Credit Agreement" shall have the meaning ascribed to such
term in the preamble hereto.
"Existing Letter of Credit" means the letters of credit issued under
the Existing Credit Agreement and outstanding on the Effective Date.
"Federal Funds Effective Rate" means, for any day, the weighted
average (rounded upwards, if necessary, to the next 1/100 of 1%) of the rates on
overnight Federal funds transactions with members of the Federal Reserve System
arranged by Federal funds brokers, as published on the next succeeding Business
Day by the Federal Reserve Bank of New York, or, if such rate is not so
published for any day that is a Business Day, the average (rounded upwards, if
necessary, to the next 1/100 of 1%) of the quotations for such day for such
transactions received by the Administrative Agent from three Federal funds
brokers of recognized standing selected by it.
25
"Financial Officer" means the chief financial officer, principal
accounting officer, treasurer or controller of the applicable Borrower.
"Fixed Asset Sublimit" shall initially mean an amount equal to
$40,000,000, which amount shall be reduced by $1,428,600 on the first day of
each fiscal quarter, commencing with the fiscal quarter beginning on July 1,
2005. Upon the inclusion of any Additional Eligible U.S. Equipment as Eligible
U.S. Equipment, the Fixed Asset Sublimit shall be increased by an amount equal
to 75% of the Hard Costs of such Additional Eligible U.S. Equipment (each such
increase, a "Fixed Asset Sublimit Increase"); provided that in no event shall
the Fixed Asset Sublimit be increased to an amount exceeding $40,000,000. Each
Fixed Asset Sublimit Increase shall be reduced quarterly on the first day of
each fiscal quarter by an amount equal to 1/28th of the initial amount of such
Fixed Asset Sublimit Increase, commencing with the first day of the fiscal
quarter which begins at least ninety (90) days after the date of such Fixed
Asset Sublimit Increase.
"Fixed Charges" means, with reference to any period, without
duplication, cash Interest Expense, plus scheduled principal payments on
Indebtedness made during such period, plus Capital Lease Obligation payments,
all calculated for the Parent and its Subsidiaries on a consolidated basis.
"Fixed Charge Coverage Ratio" means, the ratio, determined as of the
end of each fiscal quarter of the Borrowers for the most-recently ended four
fiscal quarters, of (a) EBITDA minus the unfinanced portion of Capital
Expenditures to (b) Fixed Charges, all calculated for the Parent and its
Subsidiaries on a consolidated basis in accordance with GAAP.
"Foreign Lender" means any Lender that is organized under the laws
of a jurisdiction other than that in which the Borrower to which the Lender has
made a Loan is organized. For purposes of this definition, (i) the United States
of America, each State thereof and the District of Columbia and (ii) Canada and
each province thereof shall each be deemed to constitute a single jurisdiction.
"Foreign Subsidiary" means any Subsidiary that is not a Domestic
Subsidiary.
"Funding Accounts" has the meaning assigned to such term in Section
4.01(h).
"GAAP" means generally accepted accounting principles in the United
States of America.
"Governmental Authority" means the government of the United States
of America, Canada, any other nation or any political subdivision thereof,
whether state, provincial, territorial, municipal or local, and any agency,
authority, instrumentality, regulatory body, board, commission, tribunal,
committee, instrumentality, court, central bank or other entity exercising
executive, legislative, judicial, taxing, regulatory or administrative powers or
functions of or pertaining to government.
"Guarantee" of or by any Person (the "guarantor") means any
obligation, contingent or otherwise, of the guarantor guaranteeing or having the
economic effect of guaranteeing any Indebtedness or other obligation (the
"primary obligations") of any other Person (the "primary obligor") in any
manner, whether directly or indirectly, and including any obligation of the
guarantor, direct or indirect, (a) to purchase or pay (or advance or supply
funds for the purchase or payment of) such Indebtedness or other obligation or
to purchase (or to advance or supply funds for the purchase of) any security for
the payment thereof, (b) to purchase or lease property, securities or services
for the purpose of assuring the owner of such Indebtedness or other obligation
of the payment thereof, (c) to maintain working capital, equity capital or any
other financial statement condition or liquidity of the primary obligor so as to
enable the primary obligor to pay such Indebtedness or other obligation or (d)
as an account party in respect of any
26
letter of credit or letter of guaranty issued to support such Indebtedness or
obligation; provided, that the term Guarantee shall not include endorsements for
collection or deposit in the ordinary course of business. The amount of any
Guarantee of any guarantor shall be deemed to be the lower of (i) an amount
equal to the stated or determinable amount of the primary obligation in respect
of which the Guarantee is made and (ii) the maximum amount for which such
guarantor may be liable pursuant to the terms of the instrument embodying such
Guarantee, unless such primary obligations or the maximum amount for which such
guarantor may be liable are not stated or determinable, in which case the amount
of such Guarantee shall be such guarantor's maximum reasonably anticipated
liability as determined by the Parent or the applicable Borrower in good faith.
"Guaranteed Obligations" has the meaning assigned to such term in
Section 10.01.
"Hard Costs" means the aggregate amount paid by any Borrower or U.S.
Subsidiary Guarantor on an arm's-length basis for Additional Canadian Eligible
Equipment or Additional Eligible U.S. Equipment, as applicable, net of
insurance, taxes, freight, delivery, installation, engineering, warranties
and/or similar charges and excluding computer software costs.
"Hazardous Materials" means all explosive or radioactive substances
or wastes and all hazardous or toxic substances, wastes or other pollutants,
including petroleum or petroleum distillates, asbestos or asbestos containing
materials, polychlorinated biphenyls, radon gas, infectious or medical wastes
and all other substances or wastes regulated pursuant to any Environmental Law.
"Indebtedness" of any Person means, without duplication, (a) all
obligations of such Person for borrowed money (other than trade payables and
accrued expenses arising in the ordinary course of business), (b) all
obligations of such Person evidenced by bonds, debentures, notes or similar
instruments, including obligations so evidenced incurred in connection with the
acquisition of property, assets or businesses; (c) all obligations of such
Person under conditional sale or other title retention agreements relating to
property acquired by such Person, (d) all obligations of such Person in respect
of the deferred purchase price of property or services if secured by a Lien, (e)
all Indebtedness of others secured by (or for which the holder of such
Indebtedness has an existing right, contingent or otherwise, to be secured by)
any Lien on property owned or acquired by such Person, whether or not the
Indebtedness secured thereby has been assumed, (f) all Guarantees by such Person
of Indebtedness of others, (g) all Capital Lease Obligations of such Person, (h)
all non-contingent obligations of such Person as an account party in respect of
letters of credit and letters of guaranty, and (i) all non-contingent
obligations, of such Person in respect of bankers' acceptances. The Indebtedness
of any Person shall include the Indebtedness of any other entity (including any
partnership in which such Person is a general partner) to the extent such Person
is liable therefor as a result of such Person's ownership interest in or other
relationship with such entity, except to the extent the terms of such
Indebtedness provide that such Person is not liable therefor.
"Indemnified Taxes" means Taxes other than Excluded Taxes. For
avoidance of doubt, Indemnified Taxes includes Other Taxes.
"Information Memorandum" means the Confidential Information
Memorandum dated April, 2005 relating to the Borrowers and the Transactions.
"Intercreditor Agreement" means that certain Intercreditor Agreement
dated as of the date hereof, among U.S. Borrower, Administrative Agent for the
benefit of the Lenders, Collateral Agent, Second Lien Agent for the benefit of
the Second Lien Lenders, and Second Lien Collateral Agent.
"Interest Election Request" means a request by the Borrower to
convert or continue a Revolving Borrowing in accordance with Section 2.08.
27
"Interest Expense" means for any period, the consolidated interest
expense of Parent and its Subsidiaries for such period determined in accordance
with GAAP plus dividends relating to Trust Preferred Securities, net of any
interest income.
"Interest Payment Date" means (a) with respect to any ABR Loan and
any Canadian Prime Rate Loan (in each case, other than a Swingline Loan), the
last day of each March, June, September and December and the Maturity Date, and
(b) with respect to any Eurodollar Loan and any Canadian Dollar LIBO Loan, the
last day of the Interest Period applicable to the Borrowing of which such Loan
is a part and, in the case of a Eurodollar Borrowing and Canadian Dollar LIBO
Rate Borrowing with an Interest Period of more than three months' duration, each
day prior to the last day of such Interest Period that occurs at intervals of
three months' duration after the first day of such Interest Period and the
Maturity Date, and (c) with respect to any Swingline Loan, the day that such
Loan is required to be repaid and the Maturity Date.
"Interest Period" means (a) with respect to any Eurodollar
Borrowing, the period commencing on the date of such Borrowing and ending on the
numerically corresponding day in the calendar month that is one, two, three or
six months (or, with the consent of each applicable Lender, nine or twelve
months) thereafter, as the U.S. Borrower may elect and (b) with respect to any
Canadian Dollar LIBO Rate Borrowing, the period commencing on the date of such
Borrowing and ending on the numerically corresponding day in the calendar month
that is 30, 60, 90 or 180 days thereafter, as the Canadian Borrower may elect;
provided, that (i) if any Interest Period would end on a day other than a
Business Day, such Interest Period shall be extended to the next succeeding
Business Day unless, in the case of a Eurodollar Borrowing or Canadian Dollar
LIBO Rate Borrowing only, such next succeeding Business Day would fall in the
next calendar month, in which case such Interest Period shall end on the next
preceding Business Day and (ii) any Interest Period pertaining to a Eurodollar
Borrowing or Canadian Dollar LIBO Rate Borrowing that commences on the last
Business Day of a calendar month (or on a day for which there is no numerically
corresponding day in the last calendar month of such Interest Period) shall end
on the last Business Day of the last calendar month of such Interest Period. For
purposes hereof, the date of a Borrowing initially shall be the date on which
such Borrowing is made and, in the case of a Revolving Borrowing, thereafter
shall be the effective date of the most recent conversion or continuation of
such Borrowing.
"Inventory" has the meaning assigned to such term in the Security
Agreement.
"Investment Grade" means a rating of no less than BBB- by S&P and no
less than Baa3 by Moody's.
"Issuing Bank" means Chase and Bank of America, N.A., in their
respective capacities as the issuers of Letters of Credit hereunder, and their
respective successors in such capacity as provided in Section 2.07(i). The
Issuing Bank may, in its discretion, arrange for one or more Letters of Credit
to be issued by Affiliates of the Issuing Bank, in which case the term "Issuing
Bank" shall include any such Affiliate with respect to Letters of Credit issued
by such Affiliate.
"Joinder Agreement" has the meaning assigned to such term in Section
5.11.
"Joint Venture" means a limited-purpose corporation, partnership,
limited liability company, joint venture or other similar legal arrangement
(whether created or conducted through a separate legal entity) now or hereafter
formed or invested in by Parent or any of its Subsidiaries with another Person
or Persons in order to conduct a common venture or enterprise with such Person
or Persons.
28
"LC Collateral Account" has the meaning assigned to such term in
Section 2.07(j).
"LC Disbursement" means a payment made by the Issuing Bank pursuant
to a Letter of Credit.
"LC Exposure" means, at any time, the sum of (a) the aggregate
undrawn amount of all outstanding Letters of Credit at such time plus (b) the
aggregate amount of all LC Disbursements that have not yet been reimbursed by or
on behalf of the U.S. Borrower at such time. The LC Exposure of any U.S.
Revolving Lender at any time shall be its U.S. Applicable Percentage of the
total LC Exposure at such time.
"LC Shortfall Amount" means an amount equal to the difference of (x)
the amount of LC Exposure at such time, less (y) the amount on deposit in the LC
Collateral Account at such time which is free and clear of all rights and claims
of third parties and has not been applied against the U.S. Obligations.
"Lenders" means the Canadian Lenders and the U.S. Lenders.
"Letter of Credit" means any letter of credit issued pursuant to
this Agreement including, without limitation, the Existing Letters of Credit.
"LIBO Rate" means, with respect to any Eurodollar Borrowing for any
Interest Period, the rate appearing on Page 3750 of the Dow Jones Market Service
(or on any successor page or any successor to such Service, or any substitute
page or substitute for such Service, providing rate quotations comparable to
those currently provided on such page of such Service, as determined by the
Administrative Agent from time to time for purposes of providing quotations of
interest rates applicable to Dollar deposits in the London interbank market) at
approximately 11:00 a.m., London time, two Business Days prior to the
commencement of such Interest Period, as the rate for Dollar deposits with a
maturity comparable to such Interest Period. In the event that such rate is not
available at such time for any reason, then the "LIBO Rate" with respect to such
Eurodollar Borrowing for such Interest Period shall be the rate at which Dollar
deposits of $5,000,000 and for a maturity comparable to such Interest Period are
offered by the principal London office of the Administrative Agent in
immediately available funds in the London interbank market at approximately
11:00 a.m., London time, two Business Days prior to the commencement of such
Interest Period.
"Lien" means, with respect to any asset, (a) any mortgage, deed of
trust, lien, pledge, hypothecation, assignment, deposit arrangement,
encumbrance, charge, secured claim, title retention, garnishment right, deemed
trust, security interest or preference or priority in, on, or in respect of such
asset, choate or inchoate, whether or not for amounts due or accruing due,
arising by statute, act or law of any jurisdiction, at common law, in equity or
by any agreement, (b) the interest of a vendor or a lessor under any conditional
sale agreement, capital lease or title retention agreement (or any financing
lease having substantially the same economic effect as any of the foregoing)
relating to such asset and (c) in the case of securities, any purchase option,
call or similar right of a third party with respect to such securities.
"Loan Documents" means this Agreement, any promissory notes issued
pursuant to this Agreement, any Letter of Credit applications, the Collateral
Documents, the Loan Guaranty, the Intercreditor Agreement and all other
agreements, instruments, documents and certificates identified in Section 4.01
executed and delivered to, or in favor of any Agent or any Lenders and including
all other pledges, powers of attorney, consents, assignments, contracts,
notices, letter of credit agreements and all other written matter whether
heretofore, now or hereafter executed by or on behalf of any Loan Party, or any
employee of any Loan Party, and delivered to the Agents, as applicable, or any
Lender in connection
29
with this Agreement or the transactions contemplated hereby. Any reference in
this Agreement or any other Loan Document to a Loan Document shall include all
appendices, exhibits or schedules thereto, and all amendments, restatements,
supplements or other modifications thereto, and shall refer to this Agreement or
such Loan Document as the same may be in effect at any and all times such
reference becomes operative.
"Loan Guarantor" means each Loan Party (other than the Canadian
Borrower) and any other Person who becomes a Loan Party pursuant to a Joinder
Agreement and their respective successors and assigns.
"Loan Guaranty" means Article X of this Agreement, as it may be
amended or modified and in effect from time to time.
"Loan Parties" means the Parent, the Borrowers, the Canadian
Subsidiary Guarantors and the U.S. Subsidiary Guarantors; provided that Dura
Automotive Systems Capital Trust shall not be a Loan Party to the extent that
either Requirements of Law, the organizational documents governing such trust or
any other agreement binding upon such trust do not permit the assignment of any
interest in such trust.
"Loans" means the loans and advances made by the Lenders pursuant to
this Agreement, including Revolving Loans, Swingline Loans and Protective
Advances.
"Material Adverse Effect" means a material adverse effect on (a) the
business, assets, operations or condition, financial or otherwise, of the Loan
Parties taken as a whole, (b) the Collateral or the Collateral Agent's Liens (on
behalf of itself and the Lenders) on the Collateral or the priority of such
Liens, or (c) the validity or enforceability of this Agreement or any of the
other Loan Documents or the rights or remedies of the Administrative Agent, the
Collateral Agent, Issuing Bank or the Lenders hereunder or thereunder.
"Material Indebtedness" means Indebtedness (other than the Loans and
Letters of Credit), or obligations in respect of one or more Swap Agreements, of
any one or more of the Borrowers and their Subsidiaries in an aggregate
principal amount exceeding $20,000,000. For purposes of determining Material
Indebtedness, the "obligations" of the Borrower or any Subsidiary in respect of
any Swap Agreement at any time shall be the maximum aggregate amount (giving
effect to any netting agreements) that such Borrower or such Subsidiary would be
required to pay if such Swap Agreement were terminated at such time.
"Material Subsidiary" means (i) each Loan Party and (b) any other
Subsidiary of Parent (other than Dura Automotive Systems Capital Trust) whose
assets or annual revenues together with the assets or annual revenues, as the
case may be, of its Subsidiaries constitute 5% or more of the total assets or
annual revenues (on a pro forma basis for the most recently ended fiscal year)
of Parent and its Subsidiaries on a consolidated basis.
"Maturity Date" means the earliest of (a) May 3, 2010, (b) the date
that is six months prior to the maturity of the 1999 Subordinated Notes if, at
such time, any of the 1999 Subordinated Notes remain outstanding unless, at such
time(and so long as thereafter), the Cash Availability Trigger less the amount
outstanding under the 1999 Subordinated Notes at such date of determination
exceeds $75,000,000 or (c) any earlier date on which the Revolving Commitments
are reduced to zero or otherwise terminated pursuant to the terms hereof.
"Maximum Liability" has the meaning assigned to such term in Section
10.10.
30
"Moody's" means Moody's Investors Service, Inc.
"Mortgages" means any mortgage, charge/mortgage of land, deed of
trust or other agreement which conveys or evidences a Lien in favor of the
Collateral Agent, for the benefit of the Collateral Agent and the Lenders, on
real property of a Loan Party, including any amendment, modification or
supplement thereto.
"Multiemployer Plan" means a multiemployer plan as defined in
Section 4001(a)(3) of ERISA to which the U.S. Borrower contributes or would have
any liability including liability on account of an ERISA Affiliate.
"Net Cash Proceeds" means, if in connection with (a) an asset
disposition, cash proceeds net of (i) commissions and other transaction costs,
fees and expenses properly attributable to such transaction and payable by such
Loan Party in connection therewith, (ii) transfer taxes, (iii) amounts payable
to holders of senior Liens on such asset (to the extent such Liens constitute
Permitted Liens hereunder), if any, (iv) an appropriate reserve for income taxes
in accordance with GAAP established in connection therewith, and (v) reserves
for normal course post-closing adjustments and indemnification obligations in
connection with such transaction, (b) the issuance or incurrence of
Indebtedness, cash proceeds net of attorneys' fees, investment banking fees,
accountants' fees, underwriting discounts and commissions and other customary
fees and expenses actually incurred in connection therewith or, (c) an equity
issuance, cash proceeds net of underwriting discounts and commissions and other
reasonable costs paid to non-Affiliates in connection therewith. "Net Cash
Proceeds" shall include, without limitation, any other amounts received by a
Loan Party which would otherwise be required to be applied to the prepayment of
any Second Lien Obligations.
"Net Income" means for any period, the consolidated net income (or
loss) of Parent and its Subsidiaries for such period; provided that there shall
be excluded therefrom (i) the income or loss of any Person which is not a
Subsidiary (but any dividends or other distributions received in cash by Parent
or any Subsidiary from such Person shall be included in determining Net Income)
and (ii) compensation expense resulting from the issuance of capital stock,
stock options or stock appreciation rights issued to employees, including
officers, of Parent or any Subsidiary, or the exercise of such options or
rights, in each case to the extent the obligation (if any) associated therewith
is not expected to be settled by the payment of cash by Parent or any Affiliate
of Parent.
"Net Orderly Liquidation Value" means, with respect to Inventory or
equipment of any Person, the orderly liquidation value thereof as reasonably
determined in a manner acceptable to the Administrative Agent by an appraiser
reasonably acceptable to the Administrative Agent, net of all costs of
liquidation thereof; provided that with respect to equipment constituting
Additional Canadian Eligible Equipment or Additional U.S. Eligible Equipment,
the Net Orderly Liquidation Value thereof shall be deemed to be the Hard Costs
of such equipment until such time, if any, as the Administrative Agent has
requested and obtained an independent appraisal thereof.
"1999 Subordinated Indenture" means that certain Indenture dated as
of April 22, 1999 under which the 1999 Subordinated Notes are issued.
"1999 Subordinated Notes" means the U.S. Borrower's 9% Senior
Subordinated Notes due 2009.
"Non-Consenting Lender" has the meaning assigned to such term in
Section 9.02(f).
"Non-Paying Guarantor" has the meaning assigned to such term in
Section 10.11.
31
"Obligated Party" has the meaning assigned to such term in Section
10.02.
"Obligations" means all unpaid principal of and accrued and unpaid
interest on the Loans, all LC Exposure, all accrued and unpaid fees and all
expenses, reimbursements, indemnities and other obligations of the Loan Parties
to the Lenders or to any Lender, the Agents or to any Agent, the Issuing Bank or
any indemnified party arising under the Loan Documents.
"Other Taxes" means any and all present or future stamp or
documentary taxes or any other excise or property taxes, charges or similar
levies arising from any payment made hereunder or from the execution, delivery
or enforcement of, or otherwise with respect to, this Agreement.
"Parent" has the meaning assigned to such term in the preamble
hereto.
"Participant" has the meaning set forth in Section 9.04.
"Paying Guarantor" has the meaning assigned to such term in Section
10.11.
"PBGC" means the United States Pension Benefit Guaranty Corporation
referred to and defined in ERISA and any successor entity performing similar
functions.
"Permitted Discretion" means a determination made in good faith and
in the exercise of commercially reasonable (from the perspective of a secured
asset-based lender) business judgment.
"Permitted Investments" means:
(a) direct obligations of, or obligations the principal of and
interest on which are unconditionally guaranteed by, the United States of
America (or by any agency thereof to the extent such obligations are backed by
the full faith and credit of the United States of America), in each case
maturing within one year from the date of acquisition thereof;
(b) investments in commercial paper maturing within 270 days from
the date of acquisition thereof and having, at such date of acquisition, the
highest credit rating obtainable from S&P or from Moody's;
(c) investments in certificates of deposit, banker's acceptances,
time deposits, Eurodollar time deposits and overnight bank deposits maturing
within twelve (12) months from the date of acquisition thereof issued or
guaranteed by or placed with, and money market deposit accounts issued or
offered by any Lender, any domestic office of any commercial bank organized
under the laws of the United States of America or any State thereof which has a
combined capital and surplus and undivided profits of not less than
$500,000,000;
(d) repurchase obligations with a term of not more than 30 days for
securities described in clause (a) above and entered into with a financial
institution satisfying the criteria described in clause (c) above;
(e) money market funds that (i) comply with the criteria set forth
in Securities and Exchange Commission Rule 2a-7 under the Investment Company Act
of 1940, (ii) are rated AAA by S&P and Aaa by Moody's and (iii) have portfolio
assets of at least $5,000,000,000;
(f) securities with maturities of one year or less from the date of
acquisition issued or fully guaranteed by any state, commonwealth or territory
of the United States, by any political
32
subdivision or taxing authority of any such state, commonwealth or territory or
by any foreign government, the securities of which state, commonwealth,
territory, political subdivision, taxing authority or foreign government (as the
case may be) are rated at least A by S&P or A2 by Moody's;
(g) securities with maturities of six months or less from the date
of acquisition backed by standby letters of credit issued by a Lender or any
commercial bank satisfying the requirements of clause (c) of this definition;
(h) money market mutual or similar funds that invest exclusively in
assets satisfying the requirements of clauses (a) through (g) of this
definition; and
(i) investments with foreign governmental entities which are members
of the OECD or foreign banks organized under the laws of countries which are
members of the OECD similar to the investments set forth in clauses (a), (b),
(c) and (d) above, so long as such foreign bank has combined capital and surplus
of a Dollar Equivalent or no less than $500,000,000.
"Permitted Liens" means Liens permitted by Section 6.02.
"Person" means any natural person, corporation, limited liability
company, trust, joint venture, association, company, partnership, Governmental
Authority or other entity.
"Personal Property Security Act" means the Personal Property
Security Act, any successor statute or other legislation relating to security in
personal property generally, including accounts receivable, as adopted by and in
effect from time to time in any province of Canada, as applicable, the laws of
which are required by such legislation to be applied in connection with the
issue, perfection, enforcement, validity or effect of security interests.
"Plan" means any employee pension benefit plan (other than a
Multiemployer Plan) subject to the provisions of Title IV of ERISA or Section
412 of the Code or Section 302 of ERISA, and in respect of which the Borrower or
any ERISA Affiliate is (or, if such plan were terminated, would under Section
4069 of ERISA be deemed to be) an "employer" as defined in Section 3(5) of
ERISA.
"Post-Closing Agreement" means that certain Post Closing Matters
Agreement dated as of the date hereof, among the Loan Parties and the Agents, as
the same may be amended, restated or otherwise modified from time to time.
"Prime Rate" means the rate of interest per annum publicly announced
from time to time by Chase as its prime rate; each change in the Prime Rate
shall be effective from and including the date such change is publicly announced
as being effective.
"Projections" has the meaning assigned to such term in Section
5.01(f).
"Protective Advance" has the meaning assigned to such term in
Section 2.05.
"Register" has the meaning set forth in Section 9.04.
"Related Parties" means, with respect to any specified Person, such
Person's Affiliates and the respective directors, officers, employees, agents
and advisors of such Person and such Person's Affiliates.
33
"Rent Reserve" means, with respect to any store, warehouse
distribution center, regional distribution center or depot where any Canadian
Eligible Inventory owned by the Canadian Borrower or any Eligible U.S. Inventory
owned by the U.S. Borrower or any U.S. Subsidiary Guarantor (as applicable)
subject to Liens arising by operation of law is located, a reserve equal to two
(2) months' rent at such store, warehouse distribution center, regional
distribution center or depot.
"Report" means reports prepared by the Administrative Agent or
another Person showing the results of appraisals, field examinations or audits
pertaining to the Borrowers' assets from information furnished by or on behalf
of the Borrowers, after the Administrative Agent has exercised its rights of
inspection pursuant to this Agreement, which Reports may be distributed to the
Lenders by the Administrative Agent.
"Required Lenders" means, at any time, U.S. Lenders having U.S.
Revolving Commitments representing a majority of the Aggregate U.S. Revolving
Commitment at such time or, if the Revolving Commitments of the Lenders have
been terminated, Lenders representing a majority of the Aggregate Credit
Exposure.
"Requirement of Law" as to any Person, the Certificate of
Incorporation and By-Laws (if applicable) or other organizational or governing
documents of such Person, and any law, treaty, rule or regulation or
determination of an arbitrator or a court or other Governmental Authority, in
each case applicable to or binding upon such Person or any of its property or to
which such Person or any of its property is subject.
"Reserves" means any and all Rent Reserves, Canadian Priority
Payables Reserves, Canadian Inventory Reserves, U.S. Inventory Reserves,
Canadian Dilution Reserves, U.S. Dilution Reserves, reserves for Swap
Obligations (determined based upon the mark-to-market exposure (determined on a
monthly basis or more frequently at Administrative Agent's reasonable
discretion)), reserves for Environmental Liability (whether pending, threatened
or existing) or material non-compliance with any Environmental Law which (in any
case) could reasonably be expected to impair the value of any Canadian Eligible
Real Property or U.S. Eligible Real Property in any material respect or result
in any material liability to the owner thereof, and any and all other reserves
which the Administrative Agent deems necessary to maintain in its Permitted
Discretion and which are established on the Effective Date or are based on any
Changed Circumstances.
"Restricted Payment" means any dividend or other distribution
(whether in cash, securities or other property) with respect to any Equity
Interests in the Borrowers or any Subsidiary, or any payment (whether in cash,
securities or other property), including any sinking fund or similar deposit, on
account of the purchase, redemption, retirement, acquisition, cancellation or
termination of any such Equity Interests in the Borrowers or any option, warrant
or other right to acquire any such Equity Interests in the Borrowers.
"Revolving Commitments" means the Canadian Revolving Subfacility
Commitment and the U.S. Revolving Commitment.
"Revolving Credit Exposure" means, with respect to any Revolving
Lender at any time, the sum of such Revolving Lender's U.S. Revolving Credit
Exposure and the Dollar Equivalent amount of its Canadian Revolving Subfacility
Credit Exposure.
"Revolving Lenders" means, as of any date of determination, Lenders
having a Revolving Commitment.
34
"Revolving Loan" means a U.S. Revolving Loan and/or a Canadian
Revolving Loan.
"S&P" means Standard & Poor's Ratings Services, a division of The
McGraw Hill Companies, Inc.
"Second Lien Agent" means the "Administrative Agent" under and as
defined in the Second Lien Credit Agreement.
"Second Lien Collateral Agent" means the "Collateral Agent" under
and as defined in the Second Lien Credit Agreement.
"Second Lien Collateral Documents" means the security agreements,
the mortgages and each of the other agreements, instruments or documents that
create or purport to create a Lien in favor of the Second Lien Collateral Agent
for the benefit of the Second Lien Lenders, in each case as amended, restated,
supplemented or otherwise modified from time to time in accordance with Section
6.08(c).
"Second Lien Credit Agreement" means that certain Second Lien Credit
Agreement dated as of the date hereof, among the U.S. Borrower, Second Lien
Agent, Second Lien Collateral Agent, and the Second Lien Lenders, as amended,
restated, supplemented or otherwise modified from time to time in accordance
with Section 6.08(c).
"Second Lien Lenders" means the "Lenders" under and as defined in
the Second Lien Credit Agreement.
"Second Lien Obligations" means the "Obligations" under and as
defined in the Second Lien Credit Agreement.
"Second Lien Term Loan" means the term loans advanced by the Second
Lien Lenders pursuant to the Second Lien Credit Agreement in an initial
aggregate principal amount of $150,000,000.
"Secured Obligations" means all Obligations, together with (i)
Banking Service Obligations and (ii) all Swap Obligations owing to one or more
Lenders or their respective Affiliates; provided that at or prior to the time
that any transaction relating to such Swap Obligation is executed (except for
the existing Swap Obligations on the Effective Date), the Lender party thereto
(other than Chase) shall have delivered written notice to the Administrative
Agent that such a transaction has been entered into and that it constitutes a
Secured Obligation entitled to the benefits of the Collateral Documents.
"Security Agreement" means that certain Pledge and Security
Agreement, dated as of the date hereof, between the Loan Parties and the
Collateral Agent, for the benefit of the Collateral Agent and the Lenders, and
any other pledge or security agreement entered into, after the date of this
Agreement by any other Loan Party or any other Person (as required by this
Agreement or any other Loan Document), as the same may be amended, restated or
otherwise modified from time to time.
"Settlement" has the meaning assigned to such term in Section
2.06(g).
"Settlement Date" has the meaning assigned to such term in Section
2.06(g).
"Statutory Reserve Rate" means a fraction (expressed as a decimal),
the numerator of which is the number one and the denominator of which is the
number one minus the aggregate of the maximum reserve percentages (including any
marginal, special, emergency or supplemental reserves)
35
expressed as a decimal established by the Board to which the Administrative
Agent is subject with respect to the Adjusted LIBO Rate, for eurocurrency
funding (currently referred to as "Eurocurrency Liabilities" in Regulation D of
the Board). Such reserve percentages shall include those imposed pursuant to
such Regulation D. Eurodollar Loans shall be deemed to constitute eurocurrency
funding and to be subject to such reserve requirements without benefit of or
credit for proration, exemptions or offsets that may be available from time to
time to any Lender under such Regulation D or any comparable regulation. The
Statutory Reserve Rate shall be adjusted automatically on and as of the
effective date of any change in any reserve percentage.
"Subordinated Indebtedness" of a Person means any Indebtedness of
such Person the payment of which is subordinated to payment of the Secured
Obligations to the reasonable satisfaction of the Administrative Agent,
including without limitation, the Indebtedness under the 1999 Subordinated
Notes.
"subsidiary" means, with respect to any Person (the "parent") at any
date, any corporation, limited liability company, partnership, association or
other entity the accounts of which would be consolidated with those of the
parent in the parent's consolidated financial statements if such financial
statements were prepared in accordance with GAAP as of such date, as well as any
other corporation, limited liability company, partnership, association or other
entity (a) of which securities or other ownership interests representing more
than 50% of the equity or more than 50% of the ordinary voting power or, in the
case of a partnership, more than 50% of the general partnership interests are,
as of such date, owned, controlled or held, or (b) the management of which is,
as of such date, otherwise Controlled, by the parent or one or more subsidiaries
of the parent or by the parent and one or more subsidiaries of the parent.
"Subsidiary" means any subsidiary of the Parent, any Borrower or any
other Loan Party, as applicable.
"Supermajority Lenders" means, at any time, U.S. Lenders having U.S.
Commitments representing at least 66-2/3% of the aggregate U.S. Revolving
Commitments at such time or, if the Revolving Commitments of the Lenders have
been terminated, Lenders representing 66-2/3% of the aggregate U.S. Credit
Exposure.
"Supporting Letter of Credit" means a standby letter of credit, in
form and substance satisfactory to the Administrative Agent, issued by an issuer
reasonably satisfactory to the Administrative Agent, in a stated amount equal to
103% of the LC Shortfall Amount.
"Swap Agreement" means any agreement with respect to any swap,
forward, future or derivative transaction or option or similar agreement
involving, or settled by reference to, one or more rates, currencies,
commodities, equity or debt instruments or securities, or economic, financial or
pricing indices or measures of economic, financial or pricing risk or value or
any similar transaction or any combination of these transactions; provided that
no phantom stock or similar plan providing for payments only on account of
services provided by current or former directors, officers, employees or
consultants of the Borrowers, or their Subsidiaries shall be a Swap Agreement.
"Swap Obligations" of a Person means any and all obligations of such
Person, whether absolute or contingent and howsoever and whensoever created,
arising, evidenced or acquired (including all renewals, extensions and
modifications thereof and substitutions therefore), under (a) any and all Swap
Agreements, and (b) any and all cancellations, buy backs, reversals,
terminations or assignments of any Swap Agreement transaction.
36
"Swingline Loan" means a U.S. Swingline Loan and/or the Canadian
Swingline Loan.
"Taxes" means any and all present or future taxes, levies, imposts,
duties, deductions, charges or withholdings imposed by any Governmental
Authority.
"Transactions" means the execution, delivery and performance by the
Borrowers of this Agreement, the borrowing of Loans and other credit extensions,
the incurrence of the Second Lien Term Loan pursuant to the Second Lien Credit
Agreement, the use of the proceeds hereof and thereof and the issuance of
Letters of Credit hereunder.
"Trust Preferred Securities" means the Convertible Trust Originated
Preferred Securities issued by the Trust Preferred Stock Trust containing
substantially the terms described in the Trust Preferred Stock Indenture.
"Trust Preferred Stock Debentures" means the 7-1/2% Convertible
Subordinated Debentures issued by Parent to the Trust Preferred Stock Trust
containing substantially the terms described in the Trust Preferred Stock
Indenture and relating to the Trust Preferred Securities.
"Trust Preferred Stock Indenture" means the Prospectus dated March
16, 1998 for Dura Automotive Systems Capital Trust Convertible Trust Preferred
Securities issued by the Trust Preferred Stock Trust.
"Trust Preferred Stock Trust" means the Dura Automotive Systems
Capital Trust, a special purpose Delaware business trust established by Parent,
of which Parent holds all the common securities, which issued the Trust
Preferred Securities, and which has lent to Parent (such loans being evidenced
by the Trust Preferred Stock Debentures) the net proceeds of issuance and sale
of the Trust Preferred Securities.
"2002 Senior Indenture" means that certain Indenture dated as of
April 18, 2002 between the U.S. Borrower and the trustee thereunder, pursuant to
which the 2002 Senior Unsecured Notes are issued.
"2002 Senior Unsecured Notes" means the 8-5/8% Senior Notes due 2012
issued or to be issued by U.S. Borrower pursuant to the 2002 Senior Indenture.
"Type", when used in reference to any Loan or Borrowing, refers to
whether the rate of interest on such Loan, or on the Loans comprising such
Borrowing, is determined by reference to the Adjusted LIBO Rate, the Alternate
Base Rate, the Canadian Prime Rate or the Canadian Dollar LIBO Rate.
"UCC" means the Uniform Commercial Code as in effect from time to
time in the State of New York or any other state the laws of which are required
to be applied in connection with the issue of perfection of security interests.
"Unliquidated Obligations" means, at any time, any Secured
Obligations (or portion thereof) that are contingent in nature or unliquidated
at such time, including any Secured Obligation that is: (i) an obligation to
reimburse a bank for drawings not yet made under a letter of credit issued by
it; (ii) any other obligation (including any guarantee) that is contingent in
nature at such time; or (iii) an obligation to provide collateral to secure any
of the foregoing types of obligations.
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"U.S. Applicable Percentage" means, with respect to any U.S. Lender,
(a) with respect to U.S. Revolving Loans, LC Exposure, or U.S. Swingline Loans,
a portion equal to a fraction the numerator of which is such U.S. Lender's U.S.
Revolving Commitment and the denominator of which is the aggregate U.S.
Revolving Commitments of all U.S. Revolving Lenders (if the U.S. Revolving
Commitments have terminated or expired, the U.S. Applicable Percentages shall be
determined based upon the U.S. Revolving Commitments most recently in effect,
giving effect to any assignments pursuant to Section 9.04 hereof), (b) with
respect to Protective Advances made to protect U.S. Lenders or with respect to
the aggregate U.S. Revolving Credit Exposure prior to the Maturity Date, a
portion equal to a fraction the numerator of which is such U.S. Lender's U.S.
Revolving Commitment and the denominator of which is the aggregate U.S.
Revolving Commitments of all U.S. Lenders, and (c) with respect to Protective
Advances made to protect U.S. Lenders or with respect to the aggregate U.S.
Revolving Credit Exposure after the Maturity Date, a portion equal to a fraction
the numerator of which is such U.S. Lender's U.S. Revolving Credit Exposure and
the denominator of which is the aggregate U.S. Revolving Credit Exposure.
"U.S. Availability" means, at any time, an amount equal to the
lesser of (a) the Available Revolving Commitment and (b) the U.S. Borrowing
Base, minus the U.S. Revolving Credit Exposure of all U.S. Revolving Lenders.
"U.S. Borrower" has the meaning ascribed to such term in the
preamble hereto.
"U.S. Borrowing Base" means, at any time, the sum of (a) 85% of the
U.S. Borrower's and its U.S. Subsidiary Guarantors' Adjusted Eligible U.S.
Accounts at such time, plus (b) Adjusted Available U.S. Inventory plus (c) the
U.S. Fixed Asset Component minus, without duplication, (d) Reserves (excluding
Reserves otherwise deducted in calculating Adjusted Available U.S. Inventory or
Adjusted Eligible U.S. Accounts). The maximum amount of U.S. Borrower's and its
U.S. Subsidiary Guarantors' Inventory which may be included as part of the U.S.
Borrowing Base shall not exceed 50% of the aggregate U.S. Borrowing Base.
"U.S. Borrowing Base Certificate" means a certificate, signed and
certified as accurate and complete by a Financial Officer of the U.S. Borrower,
in substantially the form of Exhibit C or another form which is reasonably
acceptable to the Administrative Agent.
"U.S. Dilution Factors" shall mean, without duplication, with
respect to any period, the aggregate amount of all deductions, credit memos,
returns, adjustments, allowances, bad debt write-offs and other non-cash credits
which are recorded to reduce U.S. Borrower's and the U.S. Subsidiary Guarantors'
Accounts in a manner consistent with current and historical accounting practices
of the U.S. Borrower and the U.S. Subsidiary Guarantors, as applicable.
"U.S. Dilution Ratio" shall mean, at any date, the amount (expressed
as a percentage) equal to (a) the aggregate amount of the applicable U.S.
Dilution Factors for the twelve (12) fiscal month period most recently ended
divided by (b) total gross sales by the U.S. Borrower and the U.S. Subsidiary
Guarantors for the twelve (12) fiscal month period most recently ended or such
other amount as may be determined by the Administrative Agent in its reasonable
discretion in the event the U.S. Borrower is unable to calculate dilution
effectively in the manner contemplated.
"U.S. Dilution Reserve" shall mean, at any date, (a) the amount (if
any) by which the U.S. Dilution Ratio exceeds 5.00% multiplied by (b) the
Eligible U.S. Accounts on such date. If the U.S. Dilution Ratio does not exceed
5.00%, the U.S. Dilution Reserve shall be zero.
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"U.S. Fixed Asset Component" means, at any time and with respect to
the U.S. Borrower and the U.S. Subsidiary Guarantors, the lesser of (A) the
Fixed Asset Sublimit (reduced on a Dollar-for-Dollar basis by the Dollar
Equivalent of the Canadian Fixed Asset Component at such time) and (B) the sum
of (i) 75% of the Net Orderly Liquidation Value of the Eligible U.S. Equipment
(based on the then most recent independent appraisal thereof received by the
Administrative Agent), plus (ii) 75% of the fair market value of the Eligible
U.S. Real Property (based on the then most recent independent appraisal thereof
received by the Administrative Agent), plus (iii) the lesser of (a) 90% of the
value of the Eligible Aircraft as determined on a reasonable basis by the
Administrative Agent and reasonably satisfactory to the Required Lenders (it
being agreed that the value on the Effective Date is $6,750,000) and (b)
$10,000,000.
"U.S. Inventory Reserves" shall mean reserves against Eligible U.S.
Inventory equal to the sum of the following:
(a) a reserve determined by the Administrative Agent in its
Permitted Discretion for shrink, or discrepancies that arise pertaining to
Inventory quantities on hand between the U.S. Borrower's or the U.S. Subsidiary
Guarantors' (as applicable) perpetual accounting system, and physical counts of
the inventory, to the extent not recorded on the U.S. Borrower's and U.S.
Subsidiary Guarantors' books and records;
(b) a revaluation reserve whereby capitalized favorable variances
shall be deducted from Eligible U.S. Inventory and unfavorable variances shall
not be added to Eligible U.S. Inventory;
(c) a lower of cost or market reserve for any differences between
the U.S. Borrower's or the U.S. Subsidiary Guarantors' (as applicable) actual
cost to produce versus its selling price to third parties; and
(d) any other reserve as deemed appropriate by the Administrative
Agent in its Permitted Discretion, from time to time based upon any Changed
Circumstances.
"U.S. Lenders" means the Persons listed as such on the Commitment
Schedule and any other Person that shall have become a party hereto, in such
capacity, pursuant to an Assignment and Assumption, other than any such Person
that ceases to be a party hereto pursuant to an Assignment and Assumption.
Unless the context otherwise requires, the term "U.S. Lenders" includes the U.S.
Swingline Lender.
"U.S. Loans" means the collective reference to U.S. Revolving Loans,
U.S. Swingline Loans and Protective Advances made on behalf of the U.S. Lenders.
"U.S. Net Recovery Liquidation Rate" shall mean, at any time with
respect to the U.S. Borrower's and U.S. Subsidiary Guarantors' domestic
Inventory, the quotient (expressed as a percentage) of (i) the Net Orderly
Liquidation Value of the U.S. Borrower's and U.S. Subsidiary Guarantors'
domestic Inventory divided by (ii) the gross inventory cost of such Inventory,
determined on the basis of the then most recently conducted inventory appraisal
performed by an independent inventory appraisal firm reasonably satisfactory to
the Administrative Agent.
"U.S. Obligations" means all unpaid principal of and accrued and
unpaid interest on the U.S. Loans, all LC Exposure, all accrued and unpaid fees
and all expenses, reimbursements, indemnities and other obligations of the U.S.
Borrower and the U.S. Subsidiary Guarantors to the U.S. Lenders or to any U.S.
Lender, the Agents or to any Agent, the Issuing Bank or any indemnified party
arising under the Loan Documents, but excluding any guaranty of the Canadian
Obligations.
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"U.S. Revolving Commitment" means, with respect to each U.S.
Revolving Lender, the commitment of such U.S. Revolving Lender to make U.S.
Revolving Loans and to acquire participations in Letters of Credit, Protective
Advances and U.S. Swingline Loans hereunder, as such commitment may be (a)
reduced from time to time pursuant to Section 2.10, (b) reduced or increased
from time to time pursuant to assignments by or to such Lender pursuant to
Section 9.04 and (c) increased from time to time pursuant to Section 2.02(c).
The initial amount of each U.S. Revolving Lender's Revolving Commitment is set
forth on the Commitment Schedule, or in the Assignment and Assumption pursuant
to which such U.S. Revolving Lender shall have assumed its U.S. Revolving
Commitment, as applicable. The initial aggregate amount of the U.S. Revolving
Lenders' U.S. Revolving Commitment is $175,000,000.
"U.S. Revolving Credit Exposure" means, with respect to any U.S.
Revolving Lender at any time, the sum of the outstanding principal amount of
such U.S. Revolving Lender's U.S. Revolving Loans, its LC Exposure and an amount
equal to its U.S. Applicable Percentage of the aggregate principal amount of
U.S. Swingline Loans outstanding at such time.
"U.S. Revolving Lenders" means, as of any date of determination,
Lenders having a U.S. Revolving Commitment.
"U.S. Revolving Loan" means a Loan made pursuant to Section 2.02(a).
"U.S. Subsidiary Guarantors" shall mean Domestic Subsidiaries which
have Guaranteed the Secured Obligations.
"U.S. Swingline Lender" means JPMorgan Chase Bank, N.A., in its
capacity as Lender of U.S. Swingline Loans hereunder.
"U.S. Swingline Loan" means a Loan made pursuant to Section 2.06
(a).
"Withdrawal Liability" means liability to a Multiemployer Plan as a
result of a complete or partial withdrawal from such Multiemployer Plan, as such
terms are defined in Part I of Subtitle E of Title IV of ERISA.
SECTION 1.02. Classification of Loans and Borrowings. For purposes
of this Agreement, Loans may be classified and referred to by Class (e.g., a
"Revolving Loan") or by Type (e.g., a "Eurodollar Loan") or by Class and Type
(e.g., a "Eurodollar Revolving Loan"). Borrowings also may be classified and
referred to by Class (e.g., a "Revolving Borrowing") or by Type (e.g., a
"Eurodollar Borrowing") or by Class and Type (e.g., a "Eurodollar Revolving
Borrowing").
SECTION 1.03. Terms Generally. The definitions of terms herein shall
apply equally to the singular and plural forms of the terms defined. Whenever
the context may require, any pronoun shall include the corresponding masculine,
feminine and neuter forms. The words "include", "includes" and "including" shall
be deemed to be followed by the phrase "without limitation". The word "will"
shall be construed to have the same meaning and effect as the word "shall".
Unless the context requires otherwise (a) any definition of or reference to any
agreement, instrument or other document herein shall be construed as referring
to such agreement, instrument or other document as from time to time amended,
supplemented or otherwise modified (subject to any restrictions on such
amendments, supplements or modifications set forth herein), (b) any reference
herein to any Person shall be construed to include such Person's successors and
assigns, (c) the words "herein", "hereof" and "hereunder", and words of similar
import, shall be construed to refer to this Agreement in its entirety and not to
any particular provision hereof, (d) all references herein to Articles,
Sections, Exhibits and Schedules shall be construed to refer to Articles and
Sections of, and Exhibits and Schedules to, this Agreement and (e) the words
"asset" and
40
"property" shall be construed to have the same meaning and effect and to refer
to any and all tangible and intangible assets and properties, including cash,
securities, accounts and contract rights.
SECTION 1.04. Accounting Terms; GAAP. Except as otherwise expressly
provided herein, all terms of an accounting or financial nature shall be
construed in accordance with GAAP, as in effect from time to time; provided
that, if the Borrowers notify the Administrative Agent that the Borrowers
request an amendment to any provision hereof to eliminate the effect of any
change occurring after the date hereof in GAAP or in the application thereof on
the operation of such provision (or if the Administrative Agent notifies the
Borrowers that the Required Lenders request an amendment to any provision hereof
for such purpose), regardless of whether any such notice is given before or
after such change in GAAP or in the application thereof, then such provision
shall be interpreted on the basis of GAAP as in effect and applied immediately
before such change shall have become effective until such notice shall have been
withdrawn or such provision amended in accordance herewith.
ARTICLE II
II. THE CREDITS
SECTION 2.01. The Facility. Subject to the terms and conditions set
forth herein, each U.S. Lender agrees to make U.S. Revolving Loans to the U.S.
Borrower and each Canadian Lender agrees to make Canadian Revolving Loans to the
Canadian Borrower from time to time during the Availability Period in an
aggregate principal amount that will not result in (i) such U.S. Lender's U.S.
Revolving Credit Exposure exceeding such U.S. Lender's U.S. Revolving
Commitment, (ii) such Canadian Lender's Canadian Revolving Subfacility Credit
Exposure exceeding such Canadian Lender's Canadian Revolving Subfacility
Commitment or (iii) the sum of the Dollar Equivalent of the total Credit
Exposures exceeding the Aggregate U.S. Commitment; it being agreed that the
Aggregate Canadian Commitment is a sub-facility of the Aggregate U.S.
Commitment. The Issuing Bank will issue Letters of Credit hereunder on the terms
and conditions set forth below. The Aggregate Commitment shall be composed of
Revolving Loans, Swingline Loans, Protective Advances, and Letters of Credit as
set forth below.
SECTION 2.02. Revolving Loans. (a) U.S. Revolving Loans. Subject to
the terms and conditions set forth herein, each U.S. Revolving Lender agrees to
make U.S. Revolving Loans to the U.S. Borrower in Dollars from time to time
during the Availability Period in an aggregate principal amount that will not
result in (i) such U.S. Lender's U.S. Revolving Credit Exposure exceeding such
U.S. Lender's U.S. Revolving Commitment or (ii) the total U.S. Revolving Credit
Exposures exceeding the lesser of (x) the sum of the total U.S. Revolving
Commitments of the U.S. Revolving Lenders (less the total Canadian Revolving
Subfacility Credit Exposure) or (y) the U.S. Borrowing Base, subject to the
Administrative Agent's authority, in its sole discretion, to make Protective
Advances pursuant to the terms of Section 2.05. Within the foregoing limits and
subject to the terms and conditions set forth herein, the U.S. Borrower may
borrow, prepay and reborrow U.S. Revolving Loans.
(b) Canadian Revolving Loans. Subject to the terms and conditions
set forth herein, each Canadian Revolving Lender agrees to make Canadian
Revolving Loans in Canadian Dollars to the Canadian Borrower from time to time
during the Availability Period in an aggregate principal amount that will not
result in (i) such Canadian Lender's Canadian Revolving Subfacility Credit
Exposure exceeding such Canadian Lender's Canadian Revolving Subfacility
Commitment or (ii) the total Canadian Revolving Subfacility Credit Exposures
exceeding the lesser of (x) the sum of the total Canadian Revolving Subfacility
Commitments of the Canadian Revolving Lenders or (y) the Canadian Borrowing
Base, subject to the Administrative Agent's authority, in its sole discretion,
to make Protective Advances pursuant to the terms of Section 2.05. Within the
foregoing limits and subject to the terms and conditions set forth herein, the
Canadian Borrower may borrow, prepay and reborrow Canadian Revolving Loans.
41
(c) Commitment Increase. From time to time after the Effective Date,
the U.S. Revolving Commitments may be increased (but in no event in excess of
$50,000,000 in the aggregate for all such increases) (the "Commitment Increase
Cap") such that the aggregate U.S. Revolving Commitments shall at no time exceed
$225,000,000 (any such increase, a "Commitment Increase") at the option of the
U.S. Borrower pursuant to delivery of written notice of a proposed Commitment
Increase to the Administrative Agent if each of the following conditions have
been met:
(i) No Event of Default shall exist;
(ii) No Commitment Increase may be in an amount less
than $10,000,000;
(iii) The proposed Commitment Increase has been
consented to in writing by Administrative Agent and each U.S. Lender who
is increasing its U.S. Revolving Commitment;
(iv) the proposed Commitment Increase, together with any
prior Commitment Increase, shall not exceed the Commitment Increase Cap;
and
(v) Administrative Agent shall have received amendments
to this Agreement and the Loan Documents, joinders, and all other
promissory notes, agreements, documents and instruments reasonably
satisfactory to Administrative Agent in its reasonable discretion
evidencing and setting forth the conditions of the Commitment Increase.
Each of Borrowers, Lenders and Administrative Agent acknowledge and
agree that each Commitment Increase meeting the conditions set forth in this
Section 2.02(c) shall not require the consent of any Lender other than those
U.S. Lenders, if any, which have agreed to increase their U.S. Revolving
Commitments in connection with such proposed Commitment Increase.
(d) Maximum Aggregate Credit Exposure. Notwithstanding any other
provisions of this Agreement to the contrary, the Borrowers shall not be
entitled to request any Revolving Loan, Swingline Loan or Letter of Credit if,
after giving effect to the making of such Loan or the issuance of such Letter of
Credit, the Aggregate Credit Exposure would exceed the Aggregate U.S.
Commitment.
SECTION 2.03. Loans and Borrowings. (a) Each U.S. Revolving Loan
shall be made as part of a Borrowing consisting of U.S. Revolving Loans made by
the U.S. Revolving Lenders ratably in accordance with their respective U.S.
Revolving Commitments. Each Canadian Revolving Loan shall be made as part of a
Borrowing consisting of Canadian Revolving Loans made by the Canadian Revolving
Lenders ratably in accordance with their respective Canadian Revolving
Subfacility Commitment. Any Protective Advance shall be made in accordance with
the procedures set forth in Section 2.05.
(b) Subject to Section 2.15, (i) each Revolving Borrowing of U.S.
Revolving Loans shall be comprised entirely of ABR Loans or Eurodollar Loans as
the U.S. Borrower may request in accordance herewith and (ii) each Revolving
Borrowing of Canadian Revolving Loans shall be comprised entirely of Canadian
Prime Rate Loans or Canadian Dollar LIBO Loans as the Canadian Borrower may
request in accordance herewith. Each U.S. Swingline Loan shall be an ABR Loan.
Each U.S. Lender at its option may make any Eurodollar Loan by causing any
domestic or foreign branch or Affiliate of such U.S. Lender to make such Loan;
provided that any exercise of such option shall not affect the obligation of the
U.S. Borrower to repay such Loan in accordance with the terms of this Agreement.
Each Canadian Swingline Loan shall be a Canadian Prime Rate Loan. Each Canadian
Lender at its option may make any
42
Canadian Dollar LIBO Loan by causing any domestic or foreign branch or Affiliate
of such Canadian Lender to make such Loan; provided that any exercise of such
option shall not affect the obligation of the Canadian Borrower to repay such
Loan in accordance with the terms of this Agreement and provided that such
branch or Affiliate qualifies as a Canadian Resident Lender.
(c) At the time that each ABR Revolving Borrowing is made, such
Borrowing shall be in an aggregate amount that is an integral multiple of
$1,000,000 and not less than $1,000,000; provided that an ABR Revolving
Borrowing may be in an aggregate amount that is equal to the entire unused
balance of the total U.S. Revolving Commitments or that is required to finance
the reimbursement of an LC Disbursement as contemplated by Section 2.07(e). Each
U.S. Swingline Loan shall be in an amount that is an integral multiple of
$500,000 and not less than $500,000. Borrowings of more than one Type and Class
may be outstanding at the same time; provided that there shall not at any time
be more than a total of seven (7) Eurodollar Revolving Borrowings outstanding.
At the time that each Canadian Dollar LIBO Revolving Borrowing is made, such
Borrowing shall be in an aggregate amount that is an integral multiple of
C$1,000,000 and not less than C$1,000,000; provided that a Canadian Dollar LIBO
Revolving Borrowing may be in an aggregate amount that is equal to the entire
unused balance of the total Canadian Revolving Subfacility Commitments. Each
Canadian Swingline Loan shall be in an amount that is an integral multiple of
C$500,000 and not less than C$500,000. Borrowings of more than one Type and
Class may be outstanding at the same time; provided that there shall not at any
time be more than a total of four (4) Canadian Dollar LIBO Revolving Borrowings
outstanding.
(d) Notwithstanding any other provision of this Agreement, the
Borrowers shall not be entitled to request, or to elect to convert or continue,
any Borrowing if the Interest Period requested with respect thereto would end
after the Maturity Date.
SECTION 2.04. Requests for Revolving Borrowings. To request a
Revolving Borrowing, the applicable Borrower (U.S. Revolving Loans shall be
requested by U.S. Borrower and Canadian Revolving Loans shall be requested by
Canadian Borrower) shall notify the Administrative Agent of such request either
in writing (delivered by hand or facsimile) in a form approved by the
Administrative Agent and signed by the applicable Borrower or by telephone (a)
in the case of a Eurodollar Borrowing or a Canadian Dollar LIBO Rate Borrowing,
not later than 12:00 noon, New York City time, three Business Days before the
date of the proposed Borrowing or (b) in the case of an ABR Borrowing or a
Canadian Prime Rate Borrowing, not later than 12:00 noon, New York City time, on
the date of the proposed Borrowing; provided that any such notice of an ABR
Revolving Borrowing to finance the reimbursement of an LC Disbursement as
contemplated by Section 2.07(e) shall be given not later than 12:00 noon, New
York City time, on the date of the proposed Borrowing. Each such telephonic
Borrowing Request shall be irrevocable and shall be confirmed promptly by hand
delivery or facsimile to the Administrative Agent of a written Borrowing Request
in a form approved by the Administrative Agent and signed by the applicable
Borrower. Each such telephonic and written Borrowing Request shall specify the
following information in compliance with Section 2.02:
(i) the aggregate amount of the requested Borrowing and
a breakdown of the separate wires comprising such Borrowing;
(ii) the date of such Borrowing, which shall be a
Business Day;
(iii) whether such Borrowing is to be an ABR Borrowing,
a Eurodollar Borrowing, a Canadian Prime Rate Borrowing or a Canadian
Dollar LIBO Rate Borrowing; and
43
(iv) in the case of a Eurodollar Borrowing and a
Canadian Dollar LIBO Rate Borrowing, the initial Interest Period to be
applicable thereto, which shall be a period contemplated by the definition
of the term "Interest Period."
If no election as to the Type of Revolving Borrowing is specified, then the
requested Revolving Borrowing shall be an ABR Borrowing or Canadian Prime Rate
Borrowing, as applicable. If no Interest Period is specified with respect to any
requested Eurodollar Revolving Borrowing or Canadian Dollar LIBO Revolving
Borrowing, then the Borrower shall be deemed to have selected an Interest Period
of one month's or 30 day's duration, as applicable. Promptly following receipt
of a Borrowing Request in accordance with this Section, the Administrative Agent
shall advise each Lender of the details thereof and of the amount of such
Lender's Loan to be made as part of the requested Borrowing.
SECTION 2.05. Protective Advances. (a) Subject to the limitations
set forth below, the Administrative Agent is authorized by the Borrowers and the
Lenders, from time to time in the Administrative Agent's sole discretion (but
shall have absolutely no obligation to), to make Loans to the U.S. Borrower, on
behalf of all U.S. Revolving Lenders, or to make Loans to the Canadian Borrower,
on behalf of the Canadian Lenders, which the Administrative Agent, in its
Permitted Discretion, deems necessary or desirable (i) to preserve or protect
the Collateral, or any portion thereof, (ii) to enhance the likelihood of, or
maximize the amount of, repayment of the Loans and other Obligations, or (iii)
to pay any other amount chargeable to or required to be paid by the applicable
Borrower pursuant to the terms of this Agreement, including payments of
principal, interest, LC Disbursements, fees, premiums, reimbursable expenses
(including costs, fees, and expenses as described in Section 9.03) and other
sums payable under the Loan Documents (any of such Loans are herein referred to
as "Protective Advances"), provided that at no time shall such Protective
Advances cause (A) the Aggregate Credit Exposure to exceed the Aggregate
Commitments, (B) the aggregate U.S. Credit Exposure to exceed the aggregate U.S.
Revolving Commitments or (C) the aggregate Canadian Credit Exposure to exceed
the aggregate Canadian Revolving Subfacility Commitments; provided further that,
the aggregate amount of Protective Advances outstanding at any time, which were
made pursuant to clauses (i) and (ii) above, shall not at any time exceed
$17,500,000. Protective Advances may be made even if the conditions precedent
set forth in Section 4.02 have not been satisfied. The Protective Advances made
to the Canadian Borrower on behalf of the Canadian Lenders shall be secured by
the Liens in favor of the Collateral Agent in and to the Collateral and shall
constitute Canadian Obligations hereunder, and the Protective Advances made to
the U.S. Borrower on behalf of the U.S. Lenders shall be secured by the Liens in
favor of the Collateral Agent in and to the Collateral owned by the U.S.
Borrower and the U.S. Subsidiary Guarantors (and such other Loan Parties to the
extent such other Loan Parties have granted Liens to secure the U.S.
Obligations) and shall constitute U.S. Obligations hereunder. All Protective
Advances made to the Canadian Borrower on behalf of the Canadian Lenders shall
be Canadian Prime Rate Borrowings and all Protective Advances made to the U.S.
Borrower on behalf of the U.S. Lenders shall be ABR Borrowings. The
Administrative Agent's authorization to make Protective Advances may be revoked
at any time by the Required Lenders. Any such revocation must be in writing and
shall become effective prospectively upon the Administrative Agent's receipt
thereof. At any time that there is sufficient Canadian Availability or U.S.
Availability and the conditions precedent set forth in Section 4.02 have been
satisfied, the Administrative Agent may request the Canadian Revolving Lenders
or U.S. Revolving Lenders, as applicable, to make a Canadian Revolving Loan or
U.S. Revolving Loan, as applicable, to repay a Protective Advance. At any other
time the Administrative Agent may require the applicable Canadian Revolving
Lenders or U.S. Revolving Lenders to fund their risk participations described in
Section 2.05(b).
(b) Upon the making of a Protective Advance by the Administrative
Agent (whether before or after the occurrence of a Default), each Canadian
Revolving Lender and/or U.S. Revolving Lender, as applicable, shall be deemed,
without further action by any party hereto, to have
44
unconditionally and irrevocably purchased from the Administrative Agent without
recourse or warranty, an undivided interest and participation in such Protective
Advance in proportion to its Canadian Applicable Percentage or U.S. Applicable
Percentage of the aggregate Canadian Revolving Subfacility Commitments or
aggregate U.S. Revolving Commitments, as applicable. From and after the date, if
any, on which any Lender is required to fund its participation in any Protective
Advance purchased hereunder, the Administrative Agent shall promptly distribute
to such Lender, such Lender's Canadian Applicable Percentage or U.S. Applicable
Percentage, as applicable, of all payments of principal and interest and all
proceeds of Collateral received by the Administrative Agent in respect of such
Protective Advance.
SECTION 2.06. Swingline Loans. (a) Subject to the terms and
conditions set forth herein, the U.S. Swingline Lender agrees to make U.S.
Swingline Loans to the U.S. Borrower from time to time during the Availability
Period, in an aggregate principal amount at any time outstanding that will not
result in (i) the aggregate principal amount of outstanding U.S. Swingline Loans
exceeding $25,000,000 or (ii) the sum of the total U.S. Revolving Credit
Exposures exceeding the lesser of (x) the total U.S. Revolving Commitments (less
the total Canadian Revolving Subfacility Exposure) and (y) the U.S. Borrowing
Base; provided that the U.S. Swingline Lender shall not be required to make a
U.S. Swingline Loan to refinance an outstanding U.S. Swingline Loan. Within the
foregoing limits and subject to the terms and conditions set forth herein, the
U.S. Borrower may borrow, prepay and reborrow U.S. Swingline Loans. To request a
U.S. Swingline Loan, the U.S. Borrower shall notify the Administrative Agent of
such request by telephone (confirmed by facsimile), not later than 12:00 noon,
New York City time, on the day of a proposed U.S. Swingline Loan. Each such
notice shall be irrevocable and shall specify the requested date (which shall be
a Business Day) and amount of the requested U.S. Swingline Loan. The
Administrative Agent will promptly advise the U.S. Swingline Lender of any such
notice received from the U.S. Borrower. The U.S. Swingline Lender shall make
each U.S. Swingline Loan available to the U.S. Borrower by means of a credit to
the Funding Accounts (and in the case of repayment of another Loan or fees or
expenses as provided by Section 2.19(c), by remittance to the Administrative
Agent to be distributed to the applicable U.S. Lenders) by 3:00 p.m., New York
City time, on the requested date of such U.S. Swingline Loan.
(b) Subject to the terms and conditions set forth herein, the
Canadian Swingline Lender agrees to make Canadian Swingline Loans to the
Canadian Borrower from time to time during the Availability Period, in an
aggregate principal amount at any time outstanding that will not result in (i)
the aggregate principal amount of outstanding Canadian Swingline Loans exceeding
$10,000,000 or (ii) the sum of the total Canadian Revolving Subfacility Credit
Exposures exceeding the lesser of (x) the total Canadian Revolving Subfacility
Commitments and (y) the Canadian Borrowing Base; provided that the Canadian
Swingline Lender shall not be required to make a Canadian Swingline Loan to
refinance an outstanding Canadian Swingline Loan. Within the foregoing limits
and subject to the terms and conditions set forth herein, the Canadian Borrower
may borrow, prepay and reborrow Canadian Swingline Loans. To request a Canadian
Swingline Loan, the Canadian Borrower shall notify the Administrative Agent of
such request by telephone (confirmed by facsimile), not later than 12:00 noon,
New York City time, on the day of a proposed Canadian Swingline Loan. Each such
notice shall be irrevocable and shall specify the requested date (which shall be
a Business Day) and amount of the requested Canadian Swingline Loan. The
Administrative Agent will promptly advise the Canadian Swingline Lender of any
such notice received from the Canadian Borrower. The Canadian Swingline Lender
shall make each Canadian Swingline Loan available to the Canadian Borrower by
means of a credit to the Funding Accounts (or, in the case of a Canadian
Swingline Loan made to finance the reimbursement of an LC Disbursement as
provided in Section 2.07(e), by remittance to the Issuing Bank, and in the case
of repayment of another Canadian Loan or fees or expenses as provided by Section
2.19(c), by remittance to the Administrative Agent to be distributed to the
applicable Lenders) by 3:00 p.m., New York City time, on the requested date of
such Canadian Swingline Loan.
45
(c) The U.S. Swingline Lender may by written notice given to the
Administrative Agent not later than 10:00 a.m., New York City time, on any
Business Day require the U.S. Revolving Lenders to acquire participations on
such Business Day in all or a portion of the U.S. Swingline Loans outstanding.
Such notice shall specify the aggregate amount of U.S. Swingline Loans in which
U.S. Revolving Lenders will participate. Promptly upon receipt of such notice,
the Administrative Agent will give notice thereof to each U.S. Revolving Lender,
specifying in such notice such Lender's U.S. Applicable Percentage of such U.S.
Swingline Loan or Loans. Each U.S. Revolving Lender hereby absolutely and
unconditionally agrees, upon receipt of notice as provided above, to pay to the
Administrative Agent, for the account of the U.S. Swingline Lender, such
Lender's U.S. Applicable Percentage of such U.S. Swingline Loan or Loans. Each
U.S. Revolving Lender acknowledges and agrees that its obligation to acquire
participations in U.S. Swingline Loans pursuant to this paragraph is absolute
and unconditional and shall not be affected by any circumstance whatsoever,
including the occurrence and continuance of an Event of Default or reduction or
termination of the Revolving Commitments, and that each such payment shall be
made without any offset, abatement, withholding or reduction whatsoever. Each
U.S. Revolving Lender shall comply with its obligation under this paragraph by
wire transfer of immediately available funds, in the same manner as provided in
Section 2.08 with respect to Loans made by such U.S. Revolving Lender (and
Section 2.08 shall apply, mutatis mutandis, to the payment obligations of the
U.S. Lenders), and the Administrative Agent shall promptly pay to the U.S.
Swingline Lender the amounts so received by it from the U.S. Revolving Lenders.
The Administrative Agent shall notify the U.S. Borrower of any participations in
any U.S. Swingline Loan acquired pursuant to this paragraph, and thereafter
payments in respect of such U.S. Swingline Loan shall be made to the
Administrative Agent and not to the U.S. Swingline Lender. Any amounts received
by the U.S. Swingline Lender from the U.S. Borrower (or other party on behalf of
the U.S. Borrower) in respect of a U.S. Swingline Loan after receipt by the U.S.
Swingline Lender of the proceeds of a sale of participations therein shall be
promptly remitted to the Administrative Agent; any such amounts received by the
Administrative Agent shall be promptly remitted by the Administrative Agent to
the U.S. Revolving Lenders that shall have made their payments pursuant to this
paragraph and to the U.S. Swingline Lender, as their interests may appear;
provided that any such payment so remitted shall be repaid to the U.S. Swingline
Lender or to the Administrative Agent, as applicable, if and to the extent such
payment is required to be refunded to the U.S. Borrower for any reason. The
purchase of participations in a U.S. Swingline Loan pursuant to this paragraph
shall not relieve the U.S. Borrower of any default in the payment thereof.
(d) The Canadian Swingline Lender may by written notice given to the
Administrative Agent not later than 10:00 a.m., New York City time, on any
Business Day require the Canadian Revolving Lenders to acquire participations on
such Business Day in all or a portion of the Canadian Swingline Loans
outstanding. Such notice shall specify the aggregate amount of Canadian
Swingline Loans in which Canadian Revolving Lenders will participate. Promptly
upon receipt of such notice, the Administrative Agent will give notice thereof
to each Canadian Revolving Lender, specifying in such notice such Lender's
Canadian Applicable Percentage of such Canadian Swingline Loan or Loans. Each
Canadian Revolving Lender hereby absolutely and unconditionally agrees, upon
receipt of notice as provided above, to pay to the Administrative Agent, for the
account of the Canadian Swingline Lender, such Lender's Canadian Applicable
Percentage of such Canadian Swingline Loan or Loans. Each Canadian Revolving
Lender acknowledges and agrees that its obligation to acquire participations in
Canadian Swingline Loans pursuant to this paragraph is absolute and
unconditional and shall not be affected by any circumstance whatsoever,
including the occurrence and continuance of an Event of Default or reduction or
termination of the Revolving Commitments, and that each such payment shall be
made without any offset, abatement, withholding or reduction whatsoever. Each
Canadian Revolving Lender shall comply with its obligation under this paragraph
by wire transfer of immediately available funds, in the same manner as provided
in Section 2.08 with respect to Loans made by such Canadian Revolving Lender
(and Section 2.08 shall apply, mutatis mutandis, to the payment obligations of
the
46
Canadian Lenders), and the Administrative Agent shall promptly pay to the
Canadian Swingline Lender the amounts so received by it from the Canadian
Revolving Lenders. The Administrative Agent shall notify the Canadian Borrower
of any participations in any Canadian Swingline Loan acquired pursuant to this
paragraph, and thereafter payments in respect of such Canadian Swingline Loan
shall be made to the Administrative Agent and not to the Canadian Swingline
Lender. Any amounts received by the Canadian Swingline Lender from the Canadian
Borrower (or other party on behalf of the Canadian Borrower) in respect of a
Canadian Swingline Loan after receipt by the Canadian Swingline Lender of the
proceeds of a sale of participations therein shall be promptly remitted to the
Administrative Agent; any such amounts received by the Administrative Agent
shall be promptly remitted by the Administrative Agent to the Canadian Revolving
Lenders that shall have made their payments pursuant to this paragraph and to
the Canadian Swingline Lender, as their interests may appear; provided that any
such payment so remitted shall be repaid to the Canadian Swingline Lender or to
the Administrative Agent, as applicable, if and to the extent such payment is
required to be refunded to the Canadian Borrower for any reason. The purchase of
participations in a Canadian Swingline Loan pursuant to this paragraph shall not
relieve the Canadian Borrower of any default in the payment thereof.
(e) Upon the making of a U.S. Swingline Loan (whether before or
after the occurrence of a Default and regardless of whether a Settlement has
been requested with respect to such U.S. Swingline Loan), each U.S. Revolving
Lender shall be deemed, without further action by any party hereto, to have
unconditionally and irrevocably purchased from the U.S. Swingline Lender,
without recourse or warranty, an undivided interest and participation in such
U.S. Swingline Loan in proportion to its U.S. Applicable Percentage of the U.S.
Revolving Commitment. The U.S. Swingline Lender may, at any time, require the
U.S. Revolving Lenders to fund their participations. From and after the date, if
any, on which any U.S. Revolving Lender is required to fund its participation in
any U.S. Swingline Loan purchased hereunder, the Administrative Agent shall
promptly distribute to such U.S. Revolving Lender, such U.S. Revolving Lender's
U.S. Applicable Percentage of all payments of principal and interest and all
proceeds of Collateral received by the Administrative Agent in respect of such
Loan.
(f) Upon the making of a Canadian Swingline Loan (whether before or
after the occurrence of a Default and regardless of whether a Settlement has
been requested with respect to such Canadian Swingline Loan), each Canadian
Revolving Lender shall be deemed, without further action by any party hereto, to
have unconditionally and irrevocably purchased from the Canadian Swingline
Lender, without recourse or warranty, an undivided interest and participation in
such Canadian Swingline Loan in proportion to its Canadian Applicable Percentage
of the Canadian Revolving Subfacility Commitment. The Canadian Swingline Lender
may, at any time, require the Canadian Revolving Lenders to fund their
participations. From and after the date, if any, on which any Canadian Revolving
Lender is required to fund its participation in any Canadian Swingline Loan
purchased hereunder, the Administrative Agent shall promptly distribute to such
Canadian Lender, such Canadian Lender's Canadian Applicable Percentage of all
payments of principal and interest and all proceeds of Collateral received by
the Administrative Agent in respect of such Loan.
(g) The Administrative Agent, on behalf of the Canadian Swingline
Lender or U.S. Swingline Lender, as applicable, shall request settlement (a
"Settlement") with the Canadian Revolving Lenders or U.S. Revolving Lenders, as
applicable on at least a weekly basis or on any date that the Administrative
Agent elects, by notifying the Canadian Revolving Lenders or U.S. Revolving
Lenders, as applicable, of such requested Settlement by facsimile, telephone, or
e-mail no later than 11:00 a.m., New York City time, on the date of such
requested Settlement (the "Settlement Date"). Each Canadian Revolving Lender or
U.S. Revolving Lender (other than the Canadian Swingline Lender or U.S.
Swingline Lender, as applicable, in the case of the Swingline Loans) shall
transfer the amount of such Canadian Revolving Lenders or U.S. Revolving
Lender's Canadian Applicable Percentage or U.S. Applicable Percentage, as
applicable, of the outstanding principal amount of the applicable Loan with
47
respect to which Settlement is requested to the Administrative Agent, to such
account of the Administrative Agent as the Administrative Agent may designate,
not later than 10:00 a.m., New York City time, on the Business Day after such
Settlement Date. Settlements may occur during the existence of a Default and
whether or not the applicable conditions precedent set forth in Section 4.02
have then been satisfied. Such amounts transferred to the Administrative Agent
shall be applied against the amounts of the Canadian Swingline Lender's or U.S.
Swingline Lender's Swingline Loans, as applicable, and, together with Canadian
Swingline Lender or U.S. Swingline Lender's Canadian Applicable Percentage or
U.S. Applicable Percentage of such Canadian Swingline Loan or U.S. Swingline
Loan, as applicable, shall constitute Canadian Revolving Loans or U.S. Revolving
Loans of such Canadian Revolving Lenders or U.S. Revolving Lenders,
respectively. If any such amount is not transferred to the Administrative Agent
by any applicable Revolving Lender on such Settlement Date, the applicable
Swingline Lender shall be entitled to recover such amount on demand from such
applicable Lender together with interest thereon as specified in Section 2.08.
SECTION 2.07. Letters of Credit. (a) General. Subject to the terms
and conditions set forth herein, the U.S. Borrower may request the issuance of
Letters of Credit for its own account, in a form reasonably acceptable to the
Administrative Agent and the Issuing Bank, at any time and from time to time
during the Availability Period. In the event of any inconsistency between the
terms and conditions of this Agreement and the terms and conditions of any form
of letter of credit application or other agreement submitted by the U.S.
Borrower to, or entered into by the U.S. Borrower with, the Issuing Bank
relating to any Letter of Credit, the terms and conditions of this Agreement
shall control.
(b) Notice of Issuance, Amendment, Renewal, Extension; Certain
Conditions. To request the issuance of a Letter of Credit (or the amendment,
renewal or extension of an outstanding Letter of Credit), the U.S. Borrower
shall hand deliver or facsimile (or transmit by electronic communication, if
arrangements for doing so have been approved by the Issuing Bank) to the Issuing
Bank and the Administrative Agent (prior to 12:00 noon, New York City time, at
least three Business Days prior to the requested date of issuance, amendment,
renewal or extension) a notice requesting the issuance of a Letter of Credit, or
identifying the Letter of Credit to be amended, renewed or extended, and
specifying the date of issuance, amendment, renewal or extension (which shall be
a Business Day), the date on which such Letter of Credit is to expire (which
shall comply with paragraph (c) of this Section), the amount of such Letter of
Credit, the name and address of the beneficiary thereof and such other
information as shall be necessary to prepare, amend, renew or extend such Letter
of Credit. If requested by the Issuing Bank, the U.S. Borrower also shall submit
a letter of credit application on the Issuing Bank's standard form in connection
with any request for a Letter of Credit. A Letter of Credit shall be issued,
amended, renewed or extended only if (and upon issuance, amendment, renewal or
extension of each Letter of Credit the U.S. Borrower shall be deemed to
represent and warrant that), after giving effect to such issuance, amendment,
renewal or extension (i) the LC Exposure shall not exceed $50,000,000, (ii) the
total Revolving Credit Exposures shall not exceed the lesser of the total U.S.
Revolving Commitments and the U.S. Borrowing Base and (iii) the form of such
requested Letter of Credit is satisfactory to the Issuing Bank and the
Administrative Agent.
(c) Expiration Date. Each Letter of Credit shall expire at or prior
to the close of business on the earlier of (i) the date one year after the date
of the issuance of such Letter of Credit (or, in the case of any renewal or
extension thereof, one year after such renewal or extension), provided that any
Letter of Credit with a one-year term may provide for the renewal thereof for
additional one-year periods (which shall in no event extend beyond the date
referred to in clause (ii) below) and (ii) the date that is five Business Days
prior to the Maturity Date.
(d) Participations. By the issuance of a Letter of Credit (or an
amendment to a Letter of Credit increasing the amount thereof) and without any
further action on the part of the Issuing Bank or
48
the U.S. Revolving Lenders, the Issuing Bank hereby grants to each U.S.
Revolving Lender, and each U.S. Revolving Lender hereby acquires from the
Issuing Bank, a participation in such Letter of Credit equal to such U.S.
Revolving Lender's U.S. Applicable Percentage of the aggregate amount available
to be drawn under such Letter of Credit. In consideration and in furtherance of
the foregoing, each U.S. Revolving Lender hereby absolutely and unconditionally
agrees to pay to the Administrative Agent, for the account of the Issuing Bank,
such U.S. Revolving Lender's U.S. Applicable Percentage of each LC Disbursement
made by the Issuing Bank and not reimbursed by the U.S. Borrower on the date due
as provided in paragraph (e) of this Section, or of any reimbursement payment
required to be refunded to the U.S. Borrower for any reason. Each U.S. Revolving
Lender acknowledges and agrees that its obligation to acquire participations
pursuant to this paragraph in respect of Letters of Credit is absolute and
unconditional and shall not be affected by any circumstance whatsoever,
including any amendment, renewal or extension of any Letter of Credit or the
occurrence and continuance of a Default, Event of Default or reduction or
termination of the U.S. Revolving Commitments, and that each such payment shall
be made without any offset, abatement, withholding or reduction whatsoever.
(e) Reimbursement. If the Issuing Bank shall make any LC
Disbursement in respect of a Letter of Credit, the U.S. Borrower shall reimburse
such LC Disbursement by paying to the Administrative Agent an amount equal to
such LC Disbursement not later than 12:00 noon, New York City time, on the date
that such LC Disbursement is made, if the U.S. Borrower shall have received
notice of such LC Disbursement prior to 10:00 a.m., New York City time, on such
date, or, if such notice has not been received by the U.S. Borrower prior to
such time on such date, then not later than 12:00 noon, New York City time, on
the Business Day immediately following the day that the U.S. Borrower receives
such notice; provided that, if such LC Disbursement is not less than $100,000,
the U.S. Borrower may, subject to the conditions to borrowing set forth herein,
request in accordance with Section 2.04 or 2.06 that such payment be financed
with an ABR Revolving Borrowing or U.S. Swingline Loan in an equivalent amount
and, to the extent so financed, the U.S. Borrower's obligation to make such
payment shall be discharged and replaced by the resulting ABR Revolving
Borrowing or Swingline Loan. If the U.S. Borrower fails to make such payment
when due, the Administrative Agent shall notify each U.S. Revolving Lender of
the applicable LC Disbursement, the payment then due from the U.S. Borrower in
respect thereof and such U.S. Revolving Lender's U.S. Applicable Percentage
thereof. Promptly following receipt of such notice, each U.S. Revolving Lender
shall pay to the Administrative Agent its U.S. Applicable Percentage of the
payment then due from the U.S. Borrower, in the same manner as provided in
Section 2.08 with respect to Loans made by such U.S. Revolving Lender (and
Section 2.08 shall apply, mutatis mutandis, to the payment obligations of the
U.S. Revolving Lenders), and the Administrative Agent shall promptly pay to the
Issuing Bank the amounts so received by it from the U.S. Revolving Lenders.
Promptly following receipt by the Administrative Agent of any payment from the
U.S. Borrower pursuant to this paragraph, the Administrative Agent shall
distribute such payment to the Issuing Bank or, to the extent that U.S.
Revolving Lenders have made payments pursuant to this paragraph to reimburse the
Issuing Bank, then to such U.S. Revolving Lenders and the Issuing Bank as their
interests may appear. Any payment made by a U.S. Revolving Lender pursuant to
this paragraph to reimburse the Issuing Bank for any LC Disbursement (other than
the funding of ABR Revolving Loans or a Swingline Loan as contemplated above)
shall not constitute a Revolving Loan and shall not relieve the U.S. Borrower of
its obligation to reimburse such LC Disbursement.
(f) Obligations Absolute. The U.S. Borrower's obligation to
reimburse LC Disbursements as provided in paragraph (e) of this Section shall be
absolute, unconditional and irrevocable, and shall be performed strictly in
accordance with the terms of this Agreement under any and all circumstances
whatsoever and irrespective of (i) any lack of validity or enforceability of any
Letter of Credit or this Agreement, or any term or provision therein or herein,
(ii) any draft or other document presented under a Letter of Credit proving to
be forged, fraudulent or invalid in any respect or any statement therein being
untrue or inaccurate in any respect, (iii) payment by the Issuing Bank under a
49
Letter of Credit against presentation of a draft or other document that does not
comply with the terms of such Letter of Credit, or (iv) any other event or
circumstance whatsoever, whether or not similar to any of the foregoing, that
might, but for the provisions of this Section, constitute a legal or equitable
discharge of, or provide a right of setoff against, the U.S. Borrower's
obligations hereunder. Neither the Administrative Agent, the U.S. Revolving
Lenders nor the Issuing Bank, nor any of their Related Parties, shall have any
liability or responsibility by reason of or in connection with the issuance or
transfer of any Letter of Credit or any payment or failure to make any payment
thereunder (irrespective of any of the circumstances referred to in the
preceding sentence), or any error, omission, interruption, loss or delay in
transmission or delivery of any draft, notice or other communication under or
relating to any Letter of Credit (including any document required to make a
drawing thereunder), any error in interpretation of technical terms or any
consequence arising from causes beyond the control of the Issuing Bank; provided
that the foregoing shall not be construed to excuse the Issuing Bank from
liability to the U.S. Borrower to the extent of any direct damages (as opposed
to consequential damages, claims in respect of which are hereby waived by the
U.S. Borrower to the extent permitted by applicable law) suffered by the U.S.
Borrower that are caused by the Issuing Bank's failure to exercise care when
determining whether drafts and other documents presented under a Letter of
Credit comply with the terms thereof. The parties hereto expressly agree that,
in the absence of gross negligence or willful misconduct on the part of the
Issuing Bank, the Issuing Bank shall be deemed to have exercised care in each
such determination. In furtherance of the foregoing and without limiting the
generality thereof, the parties agree that, with respect to documents presented
which appear on their face to be in substantial compliance with the terms of a
Letter of Credit, the Issuing Bank may, in its sole discretion, either accept
and make payment upon such documents without responsibility for further
investigation, regardless of any notice or information to the contrary, or
refuse to accept and refuse to make payment upon such documents if such
documents are not in strict compliance with the terms of such Letter of Credit.
(g) Disbursement Procedures. The Issuing Bank shall, promptly
following its receipt thereof, examine all documents purporting to represent a
demand for payment under a Letter of Credit. The Issuing Bank shall promptly
notify the Administrative Agent and the U.S. Borrower by telephone (confirmed by
facsimile) of such demand for payment and whether the Issuing Bank has made or
will make an LC Disbursement thereunder; provided that any failure to give or
delay in giving such notice shall not relieve the U.S. Borrower of its
obligation to reimburse the Issuing Bank and the U.S. Revolving Lenders with
respect to any such LC Disbursement.
(h) Interim Interest. If the Issuing Bank shall make any LC
Disbursement, then, unless the U.S. Borrower shall reimburse such LC
Disbursement in full on the date such LC Disbursement is made, the unpaid amount
thereof shall bear interest, for each day from and including the date such LC
Disbursement is made to but excluding the date that the U.S. Borrower reimburses
such LC Disbursement, at the rate per annum then applicable to ABR Revolving
Loans; provided that, if the U.S. Borrower fails to reimburse such LC
Disbursement when due pursuant to paragraph (e) of this Section, then Section
2.14(f) shall apply. Interest accrued pursuant to this paragraph shall be for
the account of the Issuing Bank, except that interest accrued on and after the
date of payment by any U.S. Revolving Lender pursuant to paragraph (e) of this
Section to reimburse the Issuing Bank shall be for the account of such Lender to
the extent of such payment.
(i) Replacement of the Issuing Bank. The Issuing Bank may be
replaced at any time by written agreement among the U.S. Borrower, the
Administrative Agent, the replaced Issuing Bank and the successor Issuing Bank.
The Administrative Agent shall notify the U.S. Revolving Lenders of any such
replacement of the Issuing Bank. At the time any such replacement shall become
effective, the U.S. Borrower shall pay all unpaid fees accrued for the account
of the replaced Issuing Bank pursuant to Section 2.13(b). From and after the
effective date of any such replacement, (i) the successor Issuing Bank shall
have all the rights and obligations of the Issuing Bank under this Agreement
with respect to Letters
50
of Credit to be issued thereafter and (ii) references herein to the term
"Issuing Bank" shall be deemed to refer to such successor or to any previous
Issuing Bank, or to such successor and all previous Issuing Banks, as the
context shall require. After the replacement of an Issuing Bank hereunder, the
replaced Issuing Bank shall remain a party hereto and shall continue to have all
the rights and obligations of an Issuing Bank under this Agreement with respect
to Letters of Credit issued by it prior to such replacement, but shall not be
required to issue additional Letters of Credit.
(j) Cash Collateralization.
(i) If the maturity of the Loans has been accelerated,
the U.S. Borrower shall deposit in an account with the Administrative
Agent, in the name of the Administrative Agent and for the benefit of the
U.S. Revolving Lenders (the "LC Collateral Account"), an amount in cash
equal to 103% of the LC Shortfall as of such date; provided that the
obligation to deposit such cash collateral shall become effective
immediately, and such deposit shall become immediately due and payable,
without demand or other notice of any kind, upon the occurrence of any
Event of Default with respect to either Borrower described in clause (h)
or (i) of Article VII. Such deposit shall be held by the Administrative
Agent as collateral for the payment and performance of the Secured
Obligations. The Administrative Agent shall have exclusive dominion and
control, including the exclusive right of withdrawal, over such account
and the U.S. Borrower hereby grants the Administrative Agent a security
interest in the LC Collateral Account. Other than any interest earned on
the investment of such deposits, which investments shall be made at the
option and sole discretion of the Administrative Agent and at the U.S.
Borrower's risk and expense, such deposits shall not bear interest.
Interest or profits, if any, on such investments shall accumulate in such
account. Moneys in such account shall be applied by the Administrative
Agent to reimburse the Issuing Bank for LC Disbursements for which it has
not been reimbursed and, to the extent not so applied, shall be held for
the satisfaction of the reimbursement obligations of the U.S. Borrower for
the LC Exposure at such time or, if the maturity of the Loans has been
accelerated (but subject to the consent of U.S. Revolving Lenders with LC
Exposure representing greater than 50% of the total LC Exposure), be
applied to satisfy other Secured Obligations in accordance with the terms
of this Agreement. If the U.S. Borrower is required to provide an amount
of cash collateral hereunder as a result of the occurrence and continuance
of an Event of Default, such amount (to the extent not applied as
aforesaid) shall be returned to the U.S. Borrower within three Business
Days after all such Events of Defaults have been cured or waived, unless
needed to satisfy Section 2.07(j)(ii).
(ii) If, notwithstanding the provisions of this Section
2.07, any Letter of Credit is outstanding on the Maturity Date, then on
such date the U.S. Borrower shall deposit with the Administrative Agent,
for the benefit of the Administrative Agent and the U.S. Revolving
Lenders, with respect to all LC Exposure, as the Administrative Agent in
its discretion shall specify, either (i) a Supporting Letter of Credit
(under which the Administrative Agent is entitled to draw amounts
necessary to reimburse the Issuing Bank for LC Disbursements for which it
has not been reimbursed and any fees and expenses associated with such
outstanding Letter of Credit), or (ii) cash, in immediately available
funds, in an amount equal to 103% of the LC Shortfall Amount to be held in
the LC Collateral Account. Such Supporting Letter of Credit or deposit of
cash shall be held by the Administrative Agent, for the benefit of the
U.S. Revolving Lenders, as collateral for the payment and performance of
the obligations of the U.S. Borrower under any such Letter of Credit
remaining outstanding.
SECTION 2.08. Funding of Borrowings. (a) Each Lender shall make each
Loan to be made by it hereunder on the proposed date thereof by wire transfer of
immediately available funds by 1:00 p.m., New York City time, to the account of
the Administrative Agent most recently designated by it
51
for such purpose by notice to the Lenders in an amount equal to such Lender's
U.S. Applicable Percentage or Canadian Applicable Percentage, as applicable;
provided that, Swingline Loans shall be made as provided in Section 2.06. The
Administrative Agent will make such Loans available to the applicable Borrower
by promptly crediting the amounts so received, in like funds, to the Funding
Accounts; provided that ABR Revolving Loans made to finance the reimbursement of
(i) an LC Disbursement as provided in Section 2.07(e) shall be remitted by the
Administrative Agent to the Issuing Bank and (ii) a Protective Advance shall be
retained by the Administrative Agent.
(b) Unless the Administrative Agent shall have received notice from
a Lender prior to the proposed funding of any Borrowing that such Lender will
not make available to the Administrative Agent such Lender's share of such
Borrowing, the Administrative Agent may assume that such Lender has made such
share available on such date in accordance with paragraph (a) of this Section
and may, in reliance upon such assumption, make available to the applicable
Borrower a corresponding amount. In such event, if a Lender has not in fact made
its share of the applicable Borrowing available to the Administrative Agent (a
"Defaulting Lender"), then the applicable Lender and the applicable Borrower
severally agree to pay to the Administrative Agent forthwith on demand such
corresponding amount with interest thereon, for each day from and including the
date such amount is made available to the applicable Borrower to but excluding
the date of payment to the Administrative Agent, at (i) in the case of such
Lender, the greater of the Federal Funds Effective Rate, the Administrative
Agent's cost of funds and a rate determined by the Administrative Agent in
accordance with banking industry rules on interbank compensation or (ii) in the
case of the Borrower, the interest rate applicable to ABR Loans or Canadian
Prime Rate Loans, as applicable. If such Lender pays such amount to the
Administrative Agent, then such amount shall constitute such Lender's Loan
included in such Borrowing. The Administrative Agent shall not be obligated to
transfer to a Defaulting Lender any payments made by the applicable Borrower to
the Administrative Agent for the Defaulting Lender's benefit, and, in the
absence of such transfer to the Defaulting Lender, the Administrative Agent
shall transfer any such payments to each other non-Defaulting Lender ratably in
accordance with their U.S. Applicable Percentage or Canadian Applicable
Percentage, as applicable, of the U.S. Revolving Commitments or Canadian
Revolving Subfacility Commitments, as applicable (but only to the extent that
such Defaulting Lender's Borrowing was funded by the other U.S. Revolving
Lenders or Canadian Revolving Lenders, as applicable) or, if so directed by the
applicable Borrower and if no Default has occurred and is continuing (and to the
extent such Defaulting Lender's Borrowing was not funded by the other U.S.
Revolving Lenders or Canadian Revolving Lenders), retain the same to be
re-advanced to the applicable Borrower as if such Defaulting Lender had made
Loans to the applicable Borrower. Subject to the foregoing, the Administrative
Agent may hold and, in its Permitted Discretion, setoff such Defaulting Lender's
funding shortfall against that Defaulting Lender's U.S. Applicable Percentage or
Canadian Applicable Percentage, as applicable, of all payments received from the
applicable Borrower or re-lend to the applicable Borrower for the account of
such Defaulting Lender the amount of all such payments received and retained by
the Administrative Agent for the account of such Defaulting Lender. Until a
Defaulting Lender cures its failure to fund its U.S. Applicable Percentage or
Canadian Applicable Percentage, as applicable, of any Borrowing (i) solely for
the purposes of voting or consenting to matters with respect to the Loan
Documents, such Defaulting Lender shall be deemed not to be a "Lender" and such
Defaulting Lender's U.S. Revolving Loan Commitment or Canadian Revolving Loan
Commitment, as applicable, shall be deemed to be zero, (ii) such Defaulting
Lender shall not be entitled to any portion of the commitment fee and (iii) the
commitment fee shall accrue in favor of the Lenders which have funded their
respective U.S. Applicable Percentages of such requested Borrowing and shall be
allocated among such non-Defaulting Lenders ratably based on their U.S.
Applicable Percentage of the U.S. Commitments. This Section shall remain
effective with respect to such Defaulting Lender until (x) the non-Defaulting
Lenders, the Administrative Agent, and the Borrowers shall have waived such
Defaulting Lender's default in writing, or (y) the Defaulting Lender makes its
U.S. Applicable Percentage of the applicable Borrowing and pays to
Administrative Agent all amounts owing by the Defaulting Lender in respect
thereof. The operation of
52
this Section shall not be construed to increase or otherwise affect the U.S.
Revolving Commitment or Canadian Revolving Subfacility Commitment of any Lender,
to relieve or excuse the performance by such Defaulting Lender or any other
Lender of its duties and obligations hereunder, or to relieve or excuse the
performance by the Borrowers of their duties and obligations hereunder.
SECTION 2.09. Interest Elections. (a) Each Revolving Borrowing
initially shall be of the Type specified in the applicable Borrowing Request
and, in the case of a Eurodollar Revolving Borrowing and Canadian Dollar LIBO
Rate Borrowing, shall have an initial Interest Period as specified in such
Borrowing Request. Thereafter, the Borrowers may elect to convert such Borrowing
to a different Type or to continue such Borrowing and, in the case of a
Eurodollar Revolving Borrowing and a Canadian Dollar LIBO Revolving Borrowing,
may elect Interest Periods therefor, all as provided in this Section. The
Borrowers may elect different options with respect to different portions of the
affected Borrowing, in which case each such portion shall be allocated ratably
among the Lenders holding the Loans comprising such Borrowing, and the Loans
comprising each such portion shall be considered a separate Borrowing. This
Section shall not apply to Swingline Borrowings or Protective Advances, which
may not be converted or continued.
(b) To make an election pursuant to this Section, the applicable
Borrower shall notify the Administrative Agent of such election by telephone by
the time that a Borrowing Request would be required under Section 2.04 if the
applicable Borrower were requesting a Revolving Borrowing of the Type resulting
from such election to be made on the effective date of such election. Each such
telephonic Interest Election Request shall be irrevocable and shall be confirmed
promptly by hand delivery or facsimile to the Administrative Agent of a written
Interest Election Request in a form approved by the Administrative Agent and
signed by the applicable Borrower.
(c) Each telephonic and written Interest Election Request shall
specify the following information in compliance with Section 2.03:
(i) the Borrowing to which such Interest Election
Request applies and, if different options are being elected with respect
to different portions thereof, the portions thereof to be allocated to
each resulting Borrowing (in which case the information to be specified
pursuant to clauses (iii) and (iv) below shall be specified for each
resulting Borrowing);
(ii) the effective date of the election made pursuant to
such Interest Election Request, which shall be a Business Day;
(iii) (A) in the case of a Borrowing by the U.S.
Borrower, whether the resulting Borrowing is to be an ABR Borrowing or a
Eurodollar Borrowing and (B) in the case of a Borrowing by the Canadian
Borrower, whether the resulting Borrowing is to be a Canadian Prime Rate
Borrowing or a Canadian Dollar LIBO Rate Borrowing; and
(iv) if the resulting Borrowing is a Eurodollar
Borrowing or Canadian Dollar LIBO Rate Borrowing, the Interest Period to
be applicable thereto after giving effect to such election, which shall be
a period contemplated by the definition of the term "Interest Period".
If any such Interest Election Request requests a Eurodollar Borrowing but does
not specify an Interest Period, then the U.S. Borrower shall be deemed to have
selected an Interest Period of one month's duration. If any such Interest
Election Request requests a Canadian Dollar LIBO Rate Borrowing but does not
specify an Interest Period, then the Canadian Borrower shall be deemed to have
selected an Interest Period of 30 days' duration.
53
(d) Promptly following receipt of an Interest Election Request, the
Administrative Agent shall advise each applicable Lender of the details thereof
and of such applicable Lender's portion of each resulting Borrowing.
(e) If the applicable Borrower fails to deliver a timely Interest
Election Request with respect to a Eurodollar Borrowing or Canadian Dollar LIBO
Borrowing prior to the end of the Interest Period applicable thereto, then,
unless such Borrowing is repaid as provided herein, at the end of such Interest
Period such Borrowing shall be converted to an ABR Borrowing or Canadian Prime
Rate Borrowing, as applicable. Notwithstanding any contrary provision hereof, if
an Event of Default has occurred and is continuing and the Administrative Agent,
at the request of the Required Lenders, so notifies the Borrower, then, so long
as an Event of Default is continuing (i) no outstanding Revolving Borrowing may
be converted to or continued as a Eurodollar Borrowing or Canadian Dollar LIBO
Rate Borrowing and (ii) unless repaid, each Eurodollar Revolving Borrowing shall
be converted to an ABR Borrowing at the end of the Interest Period applicable
thereto and each Canadian Dollar LIBO Rate Borrowing shall be converted to a
Canadian Prime Rate Borrowing at the end of the interest period as applicable
thereto.
SECTION 2.10. Termination and Reduction of Revolving Commitments.
(a) Unless previously terminated, the Revolving Commitments shall terminate on
the Maturity Date.
(b) The Borrowers may at any time terminate the Revolving
Commitments upon (i) the payment in full of all outstanding Loans, together with
accrued and unpaid interest thereon, (ii) the cancellation and return of all
outstanding Letters of Credit (or alternatively, with respect to each such
Letter of Credit, the furnishing to the Agents, as applicable, of a cash deposit
or Supporting Letter of Credit as required by Section 2.07(j)(ii)), (iii) the
payment in full of the accrued and unpaid fees, and (iv) the payment in full of
all reimbursable expenses and other Obligations (other than contingent
indemnification Obligations to the extent no claims giving rise thereto have
been asserted) together with accrued and unpaid interest thereon.
(c) The Borrowers may from time to time reduce the Revolving
Commitments; provided that (i) each reduction of the Revolving Commitments shall
be in an amount that is an integral multiple of $1,000,000 and not less than
$5,000,000 and (ii) the Borrowers shall not reduce the Revolving Commitments if,
after giving effect to any concurrent prepayment of the Revolving Loans in
accordance with Section 2.11, (A) the sum of the U.S. Revolving Credit Exposures
would exceed the lesser of the Aggregate U.S. Commitments and the U.S. Borrowing
Base or (B) the sum of the Canadian Revolving Subfacility Credit Exposures would
exceed the lesser of the aggregate Canadian Revolving Subfacility Commitments
and the Canadian Borrowing Base. The Aggregate U.S. Commitment shall not at any
time be reduced below the Aggregate Canadian Commitment.
(d) The Borrowers shall notify the Administrative Agent of any
election to terminate or reduce the Revolving Commitments under paragraph (b) or
(c) of this Section at least three Business Days prior to the effective date of
such termination or reduction, specifying such election and the effective date
thereof. Promptly following receipt of any notice, the Administrative Agent
shall advise the Lenders of the contents thereof. Each notice delivered by the
Borrowers pursuant to this Section shall be irrevocable; provided that a notice
of termination of the Revolving Commitments delivered by the Borrowers may state
that such notice is conditioned upon the effectiveness of other credit
facilities, in which case such notice may be revoked by the Borrowers (by notice
to the Administrative Agent on or prior to the specified effective date) if such
condition is not satisfied. Subject to Section 2.02(c), any termination or
reduction of the Canadian Revolving Subfacility Commitments or the U.S.
Revolving Commitments shall be permanent. Each reduction of the U.S. Revolving
Commitments shall be made ratably among the U.S. Lenders in accordance with
their respective U.S. Revolving Commitments and
54
each reduction of the Canadian Revolving Subfacility Commitments shall be made
ratably among the Canadian Lenders in accordance with their respective Canadian
Revolving Subfacility Commitments.
SECTION 2.11. Repayment and Amortization of Loans; Evidence of Debt.
(a) The U.S. Borrower hereby unconditionally promises to pay (i) to the
Administrative Agent for the account of each U.S. Revolving Lender the then
unpaid principal amount of each U.S. Revolving Loan on the Maturity Date, (ii)
to the Administrative Agent the then unpaid amount of each Protective Advance
made to the U.S. Borrower on the earlier of the Maturity Date and demand by the
Administrative Agent, and (iii) to the U.S. Swingline Lender the then unpaid
principal amount of each U.S. Swingline Loan on the earlier of the Maturity Date
and the 30th day after such U.S. Swingline Loan is made. The Canadian Borrower
hereby unconditionally promises to pay (i) to the Administrative Agent for the
account of each Canadian Revolving Lender the then unpaid principal amount of
each Canadian Revolving Loan on the Maturity Date, (ii) to the Administrative
Agent the then unpaid amount of each Protective Advance made to the Canadian
Borrower on the earlier of the Maturity Date and demand by the Administrative
Agent, and (iii) to the Canadian Swingline Lender the then unpaid principal
amount of each Canadian Swingline Loan on the earlier of the Maturity Date and
the 30th day after such Canadian Swingline Loan is made.
(b) At all times that full cash dominion is in effect pursuant to
Section 7.3 of the Security Agreement, each Business Day, at or before 11:00
a.m., New York City time, the Collateral Agent shall apply all immediately
available funds credited to the Collection Account first to prepay any
Protective Advances that may be outstanding, pro rata, and second to prepay the
Revolving Loans and Swing Line Loans and third to cash collateralize outstanding
LC Exposure; provided that funds credited to the Collection Account from or on
behalf of the Canadian Borrower or Canadian Subsidiary Guarantors shall only be
applied to Canadian Obligations; provided further, that funds credited to the
Collection Account from or on behalf of the Parent, the U.S. Borrower or the
U.S. Subsidiary Guarantors shall be applied first to the U.S. Obligations in the
aforesaid manner prior to being applied to the Canadian Obligations.
(c) Each Lender shall maintain in accordance with its usual practice
an account or accounts evidencing the Indebtedness of the Borrowers to such
Lender resulting from each Loan made by such Lender, including the amounts of
principal and interest payable and paid to such Lender from time to time
hereunder.
(d) The Administrative Agent shall maintain accounts in which it
shall record (i) the amount of each Loan made hereunder, the Class and Type
thereof and the Interest Period applicable thereto, (ii) the amount of any
principal or interest due and payable or to become due and payable from each
Borrower to each Lender hereunder and (iii) the amount of any sum received by
the Administrative Agent hereunder for the account of the Lenders and each
Lender's pro rata share thereof.
(e) The entries made in the accounts maintained pursuant to
paragraph (c) or (d) of this Section shall be prima facie evidence of the
existence and amounts of the obligations recorded therein; provided that the
failure of any Lender or the Administrative Agent to maintain such accounts or
any error therein shall not in any manner affect the obligation of the Borrowers
to repay the Loans in accordance with the terms of this Agreement.
(f) Any Lender may request that Loans made by it be evidenced by a
promissory note. In such event, the Borrowers shall prepare, execute and deliver
to such Lender a promissory note payable to the order of such Lender (or, if
requested by such Lender, to such Lender and its registered permitted assigns)
and in a form approved by the Agents and reasonably acceptable to the Borrowers.
Thereafter, the Loans evidenced by such promissory note and interest thereon
shall at all times (including after assignment pursuant to Section 9.04) be
represented by one or more promissory notes in such form
55
payable to the order of the payee named therein (or, if such promissory note is
a registered note, to such payee and its registered assigns) except to the
extent that any such Lender subsequently returns any such promissory note for
cancellation and requests that such Loans once again be evidenced as described
in paragraphs (c) and (d) above.
SECTION 2.12. Prepayment of Loans. (a) The Borrowers shall have the
right at any time and from time to time to prepay any Borrowing in whole or in
part, subject to prior notice in accordance with paragraph (d) of this Section.
(b) (i) Subject to clause (iv) of this paragraph (b), the U.S.
Borrower shall immediately repay the U.S. Revolving Loans, LC Exposure and/or
U.S. Swingline Loans if at any time the total U.S. Revolving Credit Exposure of
all U.S. Revolving Lenders exceeds the lesser of (A) the U.S. Revolving
Commitments less the total Canadian Revolving Subfacility Credit Exposure of all
Canadian Revolving Lenders and (B) the U.S. Borrowing Base, to the extent
required to eliminate such excess; provided, that if such excess arises due to a
reduction in the U.S. Borrowing Base resulting from the imposition of Reserves
by the Administrative Agent or the exclusion by the Administrative Agent in its
Permitted Discretion of any Accounts or Inventory previously constituting
Eligible U.S. Accounts or Eligible U.S. Inventory, such excess shall be
eliminated within two (2) Business Days following such reduction. The Canadian
Borrower shall immediately repay the Canadian Revolving Loans and/or Canadian
Swingline Loans if at any time the total Canadian Revolving Subfacility Credit
Exposure of all Canadian Revolving Lenders exceeds the lesser of (A) the
Canadian Revolving Subfacility Commitments and (B) the Canadian Borrowing Base,
to the extent required to eliminate such excess; provided that if such excess
arises due to a reduction in the Canadian Borrowing Base resulting from the
imposition of Reserves by the Administrative Agent or the exclusion by the
Administrative Agent in its Permitted Discretion of any Accounts or Inventory
previously constituting Canadian Eligible Accounts or Canadian Eligible
Inventory, such excess shall be eliminated within two (2) Business Days
following such reduction.
(ii) Immediately upon receipt by any Loan Party of the
Net Cash Proceeds of any asset disposition (other than (1) sales of
Inventory in the ordinary course of business and (2) any asset disposition
or series of related asset dispositions resulting in Net Cash Proceeds of
less than $500,000), the Borrowers shall prepay the Obligations in an
amount equal to 100% of such Net Cash Proceeds as set forth in paragraph
(c) below.
(iii) If any Loan Party issues Indebtedness (other than
Indebtedness permitted under Section 6.01) or Equity Interests (other than
Equity Interests issued by a Loan Party to another Loan Party) or if any
Loan Party receives any dividend or distribution from a Person other than
a Loan Party or a Subsidiary, the Borrowers shall prepay the Obligations
in an amount equal to 100% of the Net Cash Proceeds of such issuance or
the amount of such dividend or distribution no later than the Business Day
following the date of receipt of such Net Cash Proceeds or such dividend
or distribution as set forth in paragraph (c) below.
(iv) Subject to Section 9.03, at any time the
Administrative Agent shall have determined that the then outstanding
Dollar Equivalent principal amount of all Revolving Loans plus (without
duplication) the amount of all Letter of Credit obligations exceeds the
aggregate Revolving Commitments by more than $2,000,000 due to a change in
application rates of exchange between Dollars, on the one hand, and
Canadian Dollars, on the other hand, then the Administrative Agent shall
give notice to Parent that a prepayment is required under this subsection,
and the applicable Borrower agrees thereupon to make prepayments of Loans
such that, after giving effect to such prepayment, the outstanding Dollar
Equivalent amount of all
56
Revolving Loans plus (without duplication) the amount of all Letter of
Credit obligations does not exceed the aggregate Revolving Commitments.
(v) Any insurance or condemnation proceeds to be applied
to the Obligations in accordance with Section 5.09 shall be applied as set
forth in clause (c) below.
(vi) Nothing in this Section shall be construed to
constitute Administrative Agent's or any Lender's consent to any
transaction that is not permitted by other provisions of this Agreement or
the other Loan Documents.
(c) All such amounts pursuant to Section 2.12(b)(ii), (iii), (iv)
and (v) shall be applied, first to prepay any Protective Advances that may be
outstanding, pro rata and second to prepay the Revolving Loans and Swing Line
Loans without a corresponding reduction in the Revolving Commitment.
Notwithstanding the preceding sentence, payments received from the Canadian
Borrower or the Canadian Subsidiary Guarantors shall be applied only to the
Canadian Obligations, and payments received from the Parent, the U.S. Borrower
or the U.S. Subsidiary Guarantors shall be applied first to the U.S. Obligations
in the aforesaid manner prior to being applied to the Canadian Obligations.
(d) The Borrowers shall notify the Administrative Agent (and, in the
case of prepayment of a Swingline Loan, the Swingline Lender) by telephone
(confirmed by facsimile) of any prepayment hereunder (i) subject to clause (iii)
below, in the case of prepayment of a Eurodollar Revolving Borrowing or Canadian
Dollar LIBO Revolving Borrowing, not later than 12:00 noon, New York City time,
three Business Days before the date of prepayment, (ii) subject to clause (iii)
below, in the case of prepayment of an ABR Revolving Borrowing, not later than
12:00 noon, New York City time, one Business Day before the date of prepayment
or (iii) in the case of prepayment of a Swingline Loan or in the case of any
mandatory prepayment pursuant to paragraph (b) of this Section, not later than
12:00 noon, New York City time, on the date of prepayment. Each such notice
shall be irrevocable and shall specify the prepayment date and the principal
amount of each Borrowing or portion thereof to be prepaid; provided that, if a
notice of prepayment is given in connection with a conditional notice of
termination of the Revolving Commitments as contemplated by Section 2.10, then
such notice of prepayment may be revoked if such notice of termination is
revoked in accordance with Section 2.10. Promptly following receipt of any such
notice relating to a Revolving Borrowing, the Administrative Agent shall advise
the Lenders of the contents thereof. Each partial prepayment of any Revolving
Borrowing shall be in an amount that would be permitted in the case of an
advance of a Revolving Borrowing of the same Type as provided in Section 2.03.
Each prepayment of a Revolving Borrowing shall be applied ratably to the
Revolving Loans included in the prepaid Borrowing. Prepayments shall be
accompanied by accrued interest to the extent required by Section 2.14.
SECTION 2.13. Fees. (a) The U.S. Borrower agrees to pay to the
Administrative Agent for the account of each U.S. Revolving Lender a commitment
fee, which shall accrue at the Applicable Rate on the average daily amount of
the Available Revolving Commitment of such Lender during the period from and
including the Effective Date to but excluding the date on which the Lenders'
Revolving Commitments terminate. Accrued commitment fees shall be payable in
arrears on the last day of each March, June, September and December and on the
date on which the Revolving Commitments terminate, commencing on the first such
date to occur after the date hereof. Subject to Section 2.14(i), all facility
fees shall be computed on the basis of a year of 360 days and shall be payable
for the actual number of days elapsed (including the first day but excluding the
last day).
(b) The U.S. Borrower agrees to pay (i) to the Administrative Agent
for the account of each U.S. Revolving Lender a participation fee with respect
to its participations in Letters of Credit, which shall accrue at the same
Applicable Rate used to determine the interest rate applicable to
57
Eurodollar Revolving Loans on the average daily amount of such Lender's LC
Exposure (excluding any portion thereof attributable to unreimbursed LC
Disbursements) during the period from and including the Effective Date to but
excluding the later of the date on which such U.S. Lender's Revolving Commitment
terminates and the date on which such Revolving Lender ceases to have any LC
Exposure, and (ii) to the Issuing Bank a fronting fee, which shall accrue at the
rate of 0.125% per annum on the average daily amount of the LC Exposure
(excluding any portion thereof attributable to unreimbursed LC Disbursements)
during the period from and including the Effective Date to but excluding the
later of the date of termination of the Revolving Commitments and the date on
which there ceases to be any LC Exposure, as well as the Issuing Bank's normal
and customary fees with respect to the issuance, amendment, renewal or extension
of any Letter of Credit or processing of drawings thereunder. Participation fees
and fronting fees accrued through and including the last day of each March,
June, September and December shall be payable on the third Business Day
following such last day, commencing on the first such date to occur after the
Effective Date; provided that all such fees shall be payable on the date on
which the Revolving Commitments terminate and any such fees accruing after the
date on which the Revolving Commitments terminate shall be payable on written
demand. Any other fees payable to the Issuing Bank pursuant to this paragraph
shall be payable within 10 days after demand. All participation fees and
fronting fees shall be computed on the basis of a year of 360 days and shall be
payable for the actual number of days elapsed (including the first day but
excluding the last day).
(c) The Borrowers agree to pay to the Agents, for their own accounts
fees payable in the amounts and at the times separately agreed upon between the
Borrowers and the Agents.
(d) All fees payable hereunder shall be paid on the dates due, in
immediately available funds, to the Administrative Agent (or to the Collateral
Agent or Issuing Bank, in the case of fees payable to such applicable party) for
distribution, in the case of commitment fees and participation fees, to the
Lenders. Fees paid shall not be refundable under any circumstances.
SECTION 2.14. Interest. (a) The Loans comprising each ABR Borrowing
(including each U.S. Swingline Loan) shall bear interest at the Alternate Base
Rate plus the Applicable Rate.
(b) The Loans comprising each Eurodollar Borrowing shall bear
interest at the Adjusted LIBO Rate for the Interest Period in effect for such
Borrowing plus the Applicable Rate.
(c) The Loans comprising each Canadian Dollar LIBO Rate Borrowing
shall bear interest at the Canadian Dollar LIBO Rate for the Interest Period in
effect for such Borrowing plus the Applicable Rate.
(d) The Loans comprising each Canadian Prime Rate Borrowing
(including Canadian Swing Line Loans) shall bear interest at the Canadian Prime
Rate plus the Applicable Rate.
(e) Each Protective Advance (i) made to U.S. Borrower shall bear
interest at the Alternate Base Rate plus the Applicable Rate for U.S. Revolving
Loans plus 2% and (ii) made to Canadian Borrower shall bear interest at the
Canadian Prime Rate plus the Applicable Rate for Canadian Revolving Loans plus
2%.
(f) Notwithstanding the foregoing, during the occurrence and
continuance of an Event of Default, the Administrative Agent or the Required
Lenders may, at their option, by notice to the Borrowers (which notice may be
revoked at the option of the Required Lenders notwithstanding any provision of
Section 9.02 requiring the consent of "each Lender affected thereby" for
reductions in interest rates), declare that (i) all due and unpaid Loans shall
bear interest at 2% plus the rate otherwise applicable to such Loans as provided
in the preceding paragraphs of this Section or (ii) in the case of any
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other amount due and unpaid hereunder, such amount shall accrue at 2% plus the
rate applicable to such fee or other obligation as provided hereunder.
(g) Accrued interest on each Loan shall be payable in arrears on
each Interest Payment Date for such Loan and upon termination of the Revolving
Commitments; provided that (i) interest accrued pursuant to paragraph (e) and
(f) of this Section shall be payable on demand, (ii) in the event of any
repayment or prepayment of any Loan (other than a prepayment of an ABR Revolving
Loan or Canadian Prime Rate Loan prior to the end of the Availability Period),
accrued interest on the principal amount repaid or prepaid shall be payable on
the date of such repayment or prepayment and (iii) in the event of any
conversion of any Eurodollar Revolving Loan or Canadian Dollar LIBO Revolving
Loan prior to the end of the current Interest Period therefor, accrued interest
on such Loan shall be payable on the effective date of such conversion.
(h) All interest hereunder shall be computed on the basis of a year
of 360 days, except that interest computed by reference to the Alternate Base
Rate (at times when the Alternate Base Rate is based on the Prime Rate) and the
Canadian Prime Rate shall be computed on the basis of a year of 365 days (or 366
days in a leap year), and in each case shall be payable for the actual number of
days elapsed (including the first day but excluding the last day). The
applicable Canadian Prime Rate, Canadian Dollar LIBO Rate, Alternate Base Rate,
Adjusted LIBO Rate or LIBO Rate shall be determined by the Administrative Agent,
and such determination shall be conclusive absent manifest error.
(i) For purposes of the Interest Act (Canada), whenever any interest
rate or fee is calculated using a rate based on a year of 360 days or 365 days,
as the case may be, the rate determined pursuant to such calculation, when
expressed as an annual rate, is equivalent to (x) the applicable rate based on a
year of 360 days or 365 days, as the case may be, (y) multiplied by the actual
number of days in the calendar year in which the period for which such interest
or fee is payable (or compounded) ends, and (z) divided by 360 or 365, as the
case may be.
SECTION 2.15. Alternate Rate of Interest. If prior to the
commencement of any Interest Period for a Eurodollar Borrowing or Canadian
Dollar LIBO Rate Borrowing:
(a) the Administrative Agent determines (which determination shall
be conclusive absent manifest error) that adequate and reasonable means do not
exist for ascertaining the Adjusted LIBO Rate or the LIBO Rate, as applicable,
or the Canadian Dollar LIBO Rate, as applicable, for such Interest Period; or
(b) the Administrative Agent is advised by the Required Lenders that
the Adjusted LIBO Rate or the LIBO Rate, as applicable, or the Canadian Dollar
LIBO Rate, as applicable, for such Interest Period will not adequately and
fairly reflect the cost to such Lenders (or Lender) of making or maintaining
their Loans (or its Loan) included in such Borrowing for such Interest Period;
then the Administrative Agent shall give notice thereof to the applicable
Borrower and the Lenders by telephone or facsimile as promptly as practicable
thereafter and, until the Administrative Agent notifies such Borrower and the
Lenders that the circumstances giving rise to such notice no longer exist, (i)
any Interest Election Request that requests the conversion of any Revolving
Borrowing to, or continuation of any Revolving Borrowing as, a Eurodollar
Borrowing, as applicable, shall be ineffective, (ii) if any Borrowing Request
requests a Eurodollar Revolving Borrowing, such Borrowing shall be made as an
ABR Borrowing and (iii) if any Borrowing Request requests a Canadian Dollar LIBO
Revolving Borrowing, such Borrowing shall be made as a Canadian Prime Rate
Borrowing.
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SECTION 2.16. Increased Costs. (a) If any Change in Law shall:
(i) impose, modify or deem applicable any reserve,
special deposit or similar requirement against assets of, deposits with or
for the account of, or credit extended by, any Lender (except any such
reserve requirement reflected in the Adjusted LIBO Rate) or the Issuing
Bank; or
(ii) impose on any Lender or the Issuing Bank or the
London interbank market any other condition affecting this Agreement or
Eurodollar Loans made by such Lender or any Letter of Credit or
participation therein;
and the result of any of the foregoing shall be to increase the cost to such
Lender of making or maintaining any Eurodollar Loan (or of maintaining its
obligation to make any such Loan) or to increase the cost to such Lender or the
Issuing Bank, by an amount such Lender reasonably deems to be material, of
participating in, issuing or maintaining any Letter of Credit or to reduce the
amount of any sum received or receivable by such Lender or the Issuing Bank
hereunder (whether of principal, interest or otherwise), then the Borrowers will
pay to such Lender or the Issuing Bank, as the case may be, such additional
amount or amounts as will compensate such Lender or the Issuing Bank, as the
case may be, for such additional costs incurred or reduction suffered.
(b) If any Lender or the Issuing Bank determines that any Change in
Law regarding capital requirements has or would have the effect of reducing the
rate of return on such Lender's or the Issuing Bank's capital or on the capital
of such Lender's or the Issuing Bank's holding company, if any, as a consequence
of this Agreement or the Loans made by, or participations in Letters of Credit
held by, such Lender, or the Letters of Credit issued by the Issuing Bank, to a
level below that which such Lender or the Issuing Bank or such Lender's or the
Issuing Bank's holding company could have achieved but for such Change in Law
(taking into consideration such Lender's or the Issuing Bank's policies and the
policies of such Lender's or the Issuing Bank's holding company with respect to
capital adequacy), by an amount reasonably deemed by such Lender to be material,
then from time to time the Borrowers will pay to such Lender or the Issuing
Bank, as the case may be, such additional amount or amounts as will compensate
such Lender or the Issuing Bank or such Lender's or the Issuing Bank's holding
company for any such reduction suffered.
(c) A certificate of a Lender or the Issuing Bank setting forth the
amount or amounts necessary to compensate such Lender or the Issuing Bank or its
holding company, as the case may be, as specified in paragraph (a) or (b) of
this Section shall be delivered to the Borrower and shall be conclusive absent
manifest error. The Borrower shall pay such Lender or the Issuing Bank, as the
case may be, the amount shown as due on any such certificate within 10 Business
Days after receipt thereof.
(d) Failure or delay on the part of any Lender or the Issuing Bank
to demand compensation pursuant to this Section shall not constitute a waiver of
such Lender's or the Issuing Bank's right to demand such compensation; provided
that the Borrowers shall not be required to compensate a Lender or the Issuing
Bank pursuant to this Section for any increased costs or reductions incurred
more than 180 days prior to the date that such Lender or the Issuing Bank, as
the case may be, notifies the Borrowers in writing of the Change in Law giving
rise to such increased costs or reductions and of such Lender's or the Issuing
Bank's intention to claim compensation therefor; provided further that, if the
Change in Law giving rise to such increased costs or reductions is retroactive,
then the 180-day period referred to above shall be extended to include the
period of retroactive effect thereof.
SECTION 2.17. Break Funding Payments. In the event of (a) the payment of any
principal of any Eurodollar Loan or Canadian Dollar LIBO Loan other than on the
last day of an Interest
60
Period applicable thereto (including as a result of an Event of Default), (b)
the conversion of any Eurodollar Loan or Canadian Dollar LIBO Loan other than on
the last day of the Interest Period applicable thereto, (c) the failure to
borrow, convert, continue or prepay any Eurodollar Loan on the date specified in
any notice delivered pursuant hereto (regardless of whether such notice may be
revoked under Section 2.10(d) and is revoked in accordance therewith), or (d)
the assignment of any Eurodollar Loan or Canadian Dollar LIBO Loan other than on
the last day of the Interest Period applicable thereto as a result of a request
by the U.S. Borrower or Canadian Borrower pursuant to Section 2.20, then, in any
such event, the applicable Borrower shall compensate each applicable Lender for
the loss, cost and expense attributable to such event. In the case of a
Eurodollar Loan or Canadian Dollar LIBO Loan, such loss, cost or expense to any
Lender shall be deemed to include an amount reasonably determined by such Lender
to be the excess, if any, of (i) the amount of interest which would have accrued
on the principal amount of such Loan had such event not occurred, at the
Adjusted LIBO Rate or Canadian Dollar LIBO Rate, as applicable, that would have
been applicable to such Loan, for the period from the date of such event to the
last day of the then current Interest Period therefor (or, in the case of a
failure to borrow, convert or continue, for the period that would have been the
Interest Period for such Loan), over (ii) the amount of interest which would
accrue on such principal amount for such period at the interest rate which such
Lender would bid were it to bid, at the commencement of such period, for dollar
deposits of a comparable amount and period from other banks in the eurodollar
market or Canadian market, as applicable. A certificate of any Lender setting
forth any amount or amounts that such Lender is entitled to receive pursuant to
this Section shall be delivered to the Borrowers and shall be conclusive absent
manifest error. The Borrowers shall pay such Lender the amount shown as due on
any such certificate within 10 days after receipt thereof.
SECTION 2.18. Taxes. (a) Any and all payments by or on account of
any obligation of the Borrowers hereunder shall be made free and clear of and
without deduction or withholding for or on account of any Indemnified Taxes;
provided that if the Borrowers shall be required to deduct or withhold any
Indemnified Taxes from such payments or any Agent, any Lender or the Issuing
Bank shall be liable to remit any Indemnified Taxes, in either case, then (i)
the sum payable shall be increased as necessary so that after making all
required deductions, withholdings or remittances (including, without limitation,
deductions and withholdings applicable to additional sums payable under this
Section) the Agent, Lender or Issuing Bank (as the case may be) receives an
amount equal to the sum it would have received had no such deductions,
remittances or withholdings been made, (ii) the applicable Borrower shall make
such deductions or withholdings and (iii) the applicable Borrower shall pay the
full amount deducted or withheld to the relevant Governmental Authority in
accordance with applicable law; provided, however, that the Borrowers shall not
be required to increase any such amount if the increase in such amount payable
results from the Agents', Lenders' or Issuing Bank's own willful misconduct or
gross negligence.
(b) In addition, the Borrowers shall pay any Other Taxes to the
relevant Governmental Authority in accordance with applicable law.
(c) The Borrowers shall indemnify each Agent, each Lender and the
Issuing Bank, within fifteen (15) days after written demand therefor, for the
full amount of any Indemnified Taxes paid by such Agent, such Lender or the
Issuing Bank, as the case may be, on or with respect to any payment by or on
account of any obligation of the Borrowers hereunder including any amounts
required to be remitted by it or them on account of withholding taxes (including
Indemnified Taxes imposed or asserted on or attributable to amounts payable
under this Section) and any penalties, interest and reasonable expenses arising
therefrom or with respect thereto (other than penalties resulting from such
Agent's, such Lender's, or Issuing Bank's own willful misconduct or gross
negligence), whether or not such Indemnified Taxes were correctly or legally
imposed or asserted by the relevant Governmental Authority. A certificate as to
the amount of such payment or liability delivered to the Borrowers by a Lender
or the Issuing Bank, or by
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an Agent on its own behalf or on behalf of a Lender or the Issuing Bank, shall
be prima facie evidence of manifest error.
(d) As soon as commercially practicable after any payment of
Indemnified Taxes by the Borrowers to a Governmental Authority, the Borrowers
shall deliver to the Administrative Agent the original or a certified copy of a
receipt issued by such Governmental Authority evidencing such payment, a copy of
the return reporting such payment or other evidence of such payment reasonably
satisfactory to the Administrative Agent.
(e) Any Lender that is entitled to an exemption from or reduction of
withholding tax under the law of the jurisdiction in which any Borrower is
located, or any treaty to which such jurisdiction is a party, with respect to
payments under this Agreement shall deliver to the Borrowers (with a copy to the
Administrative Agent), at the time or times prescribed by applicable law, or in
the case of a Lender that is an assignee or transferee of an interest under
Section 9.04, on the date of such assignment or transfer, such properly
completed and executed documentation prescribed by applicable law or reasonably
requested by the Borrowers as will permit such payments to be made without
withholding or at a reduced rate.
(f) If an Agent or a Lender determines, in its sole discretion, that
it has received a refund of any Taxes or Other Taxes as to which it has been
indemnified by the Borrowers or with respect to which any Borrower has paid
additional amounts pursuant to this Section 2.18, it shall pay over such refund
to the applicable Borrower (but only to the extent of indemnity payments made,
or additional amounts paid, by the applicable Borrower under this Section 2.18
with respect to the Taxes or Other Taxes giving rise to such refund), net of all
reasonable out-of-pocket expenses of such Agent or such Lender and without
interest (other than any interest paid by the relevant Governmental Authority
with respect to such refund); provided, that the applicable Borrower, upon the
request of such Agent or such Lender, agrees to repay the amount paid over to
such Borrower (plus any penalties, interest or other charges imposed by the
relevant Governmental Authority, other than such penalties, interest or other
charges imposed as a result of the willful misconduct or gross negligence of the
Agent hereunder) to such Agent or such Lender in the event such Agent or such
Lender is required to repay such refund to such Governmental Authority. Except
as expressly provided for in this Section 2.18, this Section shall not be
construed to require any Agent or any Lender to make available its tax returns
(or any other information relating to its taxes which it deems confidential) to
the Borrowers or any other Person.
SECTION 2.19. Payments Generally; Allocation of Proceeds; Sharing of
Set-offs. (a) The Borrowers shall make each payment required to be made by it
hereunder (whether of principal, interest, fees or reimbursement of LC
Disbursements, or of amounts payable under Section 2.16, 2.17 or 2.18, or
otherwise) prior to 12:00 noon, New York City time, on the date when due, in
immediately available funds, without set off or counterclaim. Any amounts
received after such time on any date may, in the discretion of the
Administrative Agent, be deemed to have been received on the next succeeding
Business Day for purposes of calculating interest thereon. All such payments
shall be made to the Administrative Agent at its offices in the relevant
jurisdiction, except payments to be made directly to the Issuing Bank or
Swingline Lender as expressly provided herein and except that payments pursuant
to Sections 2.13(c) (in respect of the applicable Agent), 2.16, 2.17, 2.18 and
9.03 shall be made directly to the Persons entitled thereto. The Administrative
Agent shall distribute any such payments received by it for the account of any
other Person to the appropriate recipient promptly following receipt thereof. If
any payment hereunder shall be due on a day that is not a Business Day, the date
for payment shall be extended to the next succeeding Business Day, and, in the
case of any payment accruing interest, interest thereon shall be payable for the
period of such extension. All payments hereunder shall be made in Dollars,
except as otherwise expressly provided in this Agreement. Solely for purposes of
determining the amount of Loans available for borrowing purposes, checks and
cash or other immediately available
62
funds from collections of items of payment and proceeds of any Collateral shall
be applied in whole or in part against the Obligations, on the day of receipt,
subject to actual collection.
(b) Any proceeds of Collateral (other than proceeds of Collateral of
the Canadian Borrower or the Canadian Subsidiary Guarantors) received by the
Agents (i) not constituting either (A) a specific payment of principal,
interest, fees or other sum payable under the Loan Documents (which shall be
applied as specified by the Borrowers), (B) a mandatory prepayment (which shall
be applied in accordance with Section 2.12) or (C) amounts to be applied from
the Collection Account (which shall be applied in accordance with Section
2.11(b)) or (ii) after an Event of Default has occurred and is continuing and
the Administrative Agent so elects or the Required Lenders so direct, shall be
applied ratably first, to pay any fees, indemnities, or expense reimbursements
then due to the Agents and the Issuing Bank from the U.S. Borrower (other than
in connection with Banking Services or Swap Obligations), second, to pay any
fees or expense reimbursements then due to the U.S. Lenders from the U.S.
Borrower (other than in connection with Banking Services or Swap Obligations),
third, to pay interest due in respect of the Protective Advances made to the
U.S. Borrower, fourth, to pay the principal of the Protective Advances made to
the U.S. Borrower, fifth, to pay interest then due and payable on the Loans
(other than the Protective Advances) made to the U.S. Borrower ratably, sixth,
to prepay principal on the Loans (other than the Protective Advances) made to
the U.S. Borrower and unreimbursed LC Disbursements ratably, seventh, to pay an
amount to the Administrative Agent equal to one hundred three percent (103%) of
the aggregate undrawn face amount of all outstanding Letters of Credit and the
aggregate amount of any unpaid LC Disbursements, to be held as cash collateral
for such Obligations, eighth, to the payment of any other Secured Obligation
(other than Swap Obligations and Banking Services Obligations) due to any Agent
or any U.S. Lender by the U.S. Borrower; ninth, to the payment of any amounts
with respect to Swap Obligations owing by the Parent, the U.S. Borrower or the
U.S. Subsidiary Guarantors; tenth, to payment of any amounts with respect to
Banking Services Obligations owing by the U.S. Borrower or the U.S. Subsidiary
Guarantors; eleventh, to pay any fees, indemnities or expense reimbursements
then due to the Agents and the Issuing Bank from the Canadian Borrower (other
than in connection with Banking Services or Swap Obligations); twelfth, to pay
any fees or expense reimbursements then due to the Lenders from the Canadian
Borrower (other than in connection with Banking Services or Swap Obligations);
thirteenth, to pay interest due in respect of the Protective Advances made to
the Canadian Borrower; fourteenth, to pay the principal of the Protective
Advances made to the Canadian Borrower; fifteenth, to pay interest then due and
payable on the Loans (other than the Protective Advances) made to the Canadian
Borrower, ratably; sixteenth, to prepay principal on the Loans (other than the
Protective Advances) made to the Canadian Borrower; seventeenth, to the payment
of any other Secured Obligation (other than Swap Obligations) due to any Agent
or any Lender by the Canadian Borrower or the Canadian Subsidiary Guarantors;
eighteenth, to the payment of any amounts with respect to Swap Obligations owing
by the Canadian Borrower or the Canadian Subsidiary Guarantors; and nineteenth,
to payment of any amounts with respect to Banking Services Obligation owing by
the Canadian Borrower or the Canadian Subsidiary Guarantors. Any proceeds of
Collateral of the Canadian Borrower or the Canadian Subsidiary Guarantors
received by the Agents (i) not constituting either (A) a specific payment of
principal, interest, fees or other sum payable under the Loan Documents (which
shall be applied as specified by the Borrower), (B) a mandatory prepayment
(which shall be applied in accordance with Section 2.12) or (C) amounts to be
applied from the Collection Account (which shall be applied in accordance with
Section 2.11(b)) or (ii) after an Event of Default has occurred and is
continuing and the Administrative Agent so elects or the Required Lenders so
direct, shall be applied ratably first, to pay any fees, indemnities, or expense
reimbursements including amounts then due to the Agents and the Issuing Bank
from the Canadian Borrower (other than in connection with Banking Services or
Swap Obligations); second, to pay any fees or expense reimbursements then due to
the Lenders from the Canadian Borrower (other than in connection with Banking
Services or Swap Obligations); third, to pay interest due in respect of the
Protective Advances made to the Canadian Borrower; fourth, to pay the principal
of the Protective Advances made to the Canadian Borrower; fifth,
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to pay interest then due and payable on the Loans (other than the Protective
Advances) made to the Canadian Borrower, ratably; sixth, to prepay principal on
the Loans (other than the Protective Advances) made to the Canadian Borrower;
seventh, to the payment of any other Secured Obligation (other than Swap
Obligations) due to any Agent or any Lender by the Canadian Borrower; eighth, to
the payment of any amounts owing by the Canadian Borrower with respect to Swap
Obligations; and ninth, to payment of any amounts owing with respect to Banking
Services Obligations owing by the Canadian Borrower or the Canadian Subsidiary
Guarantors. Notwithstanding anything to the contrary contained in this
Agreement, unless so directed by the Borrowers or unless an Event of Default is
in existence, neither Agent nor any Lender shall apply any payment which it
receives to any Eurodollar Loan of a Class, except (a) on the expiration date of
the Interest Period applicable to any such Eurodollar Loan or (b) in the event,
and only to the extent, that there are no outstanding ABR Loans of the same
Class and, in any event, the Borrowers shall pay the break funding payment
required in accordance with Section 2.17. The Agents and the Lenders shall have
the continuing and exclusive right to apply and reverse and reapply any and all
such proceeds and payments to any portion of the Secured Obligations.
(c) At the election of the Administrative Agent, all payments of
principal, interest, LC Disbursements, fees, premiums, reimbursable expenses
(including, without limitation, all reimbursement for fees and expenses pursuant
to Section 9.03), and other sums payable under the Loan Documents, may be paid
from the proceeds of Borrowings made hereunder whether made following a request
by the Borrowers pursuant to Section 2.04 or a deemed request as provided in
this Section or may be deducted from any deposit account (other than any payroll
or trust account) of the Borrowers maintained with the Agents. Each Borrower
hereby irrevocably authorizes (i) the Administrative Agent to make a Borrowing
for the purpose of paying each payment of principal, interest and fees as it
becomes due hereunder or any other amount due under the Loan Documents in the
event such Borrower fails to make any such payment as it becomes due hereunder
and agrees that all such amounts charged shall constitute Loans (including
Swingline Loans and Protective Advances) to such Borrower and that all such
Borrowings shall be deemed to have been requested by such Borrower pursuant to
Sections 2.04, 2.05 or 2.06, as applicable and (ii) the Administrative Agent to
charge any deposit account of such Borrower maintained with the Collateral Agent
for each payment of principal, interest and fees as it becomes due hereunder
from such Borrower or any other amount due from such Borrower under the Loan
Documents in the event such Borrower fails to make any such payment as it
becomes due hereunder.
(d) If any Lender shall, by exercising any right of set-off or
counterclaim or otherwise, obtain payment in respect of any principal of or
interest on any of its Loans or participations in LC Disbursements resulting in
such Lender receiving payment of a greater proportion of the aggregate amount of
its Loans and participations in LC Disbursements and accrued interest thereon
than the proportion received by any other Lender, then the Lender receiving such
greater proportion shall purchase (for cash at face value) participations in the
Loans and participations in LC Disbursements of other Lenders to the extent
necessary so that the benefit of all such payments shall be shared by the
Lenders ratably in accordance with the aggregate amount of principal of and
accrued interest on their respective Loans and participations in LC
Disbursements; provided that (i) if any such participations are purchased and
all or any portion of the payment giving rise thereto is recovered, such
participations shall be rescinded and the purchase price restored to the extent
of such recovery, without interest, and (ii) the provisions of this paragraph
shall not be construed to apply to any payment made by the Borrowers pursuant to
and in accordance with the express terms of this Agreement or any payment
obtained by a Lender as consideration for the assignment of or sale of a
participation in any of its Loans or participations in LC Disbursements to any
assignee or participant, other than to the Borrowers or any Subsidiary or
Affiliate thereof (as to which the provisions of this paragraph shall apply).
The Borrowers consent to the foregoing and agree, to the extent it may
effectively do so under applicable law, that any Lender acquiring a
participation pursuant to the foregoing arrangements may exercise against the
64
Borrowers rights of set-off and counterclaim with respect to such participation
as fully as if such Lender were a direct creditor of the applicable Borrower in
the amount of such participation.
(e) Unless the Administrative Agent shall have received notice from
the Borrowers prior to the date on which any payment is due to the
Administrative Agent for the account of the Lenders or the Issuing Bank
hereunder that the Borrowers will not make such payment, the Administrative
Agent may assume that the Borrowers have made such payment on such date in
accordance herewith and may, in reliance upon such assumption, distribute to the
Lenders or the Issuing Bank, as the case may be, the amount due. In such event,
if the Borrowers have not in fact made such payment, then each of the Lenders or
the Issuing Bank, as the case may be, severally agrees to repay to the
Administrative Agent forthwith on demand the amount so distributed to such
Lender or Issuing Bank with interest thereon, for each day from and including
the date such amount is distributed to it to but excluding the date of payment
to the Administrative Agent, at the greater of the Federal Funds Effective Rate
and a rate determined by the Administrative Agent in accordance with banking
industry rules on interbank compensation.
(f) If any Lender shall fail to make any payment required to be made
by it pursuant to Section 2.06, 2.07(d) or (e), 2.08(b), 2.19(e) or 9.03(c),
then the Administrative Agent may, in its discretion (notwithstanding any
contrary provision hereof), apply any amounts thereafter received by the
Administrative Agent for the account of such Lender to satisfy such Lender's
obligations under such Sections until all such unsatisfied obligations are fully
paid.
SECTION 2.20. Mitigation Obligations; Replacement of Lenders. If any
Lender requests compensation under Section 2.16, or if the Borrowers are
required to pay any additional amount to any Lender or any Governmental
Authority for the account of any Lender pursuant to Section 2.18, then:
(a) such Lender shall use reasonable efforts to designate a
different lending office for funding or booking its Loans hereunder or to assign
its rights and obligations hereunder to another of its offices, branches or
affiliates, if, in the reasonable judgment of such Lender, such designation or
assignment (i) would eliminate or reduce amounts payable pursuant to Section
2.16 or 2.18, as the case may be, in the future and (ii) would not subject such
Lender to any unreimbursed cost or expense and would not otherwise be
disadvantageous to such Lender (and the Borrowers hereby agree to pay all
reasonable costs and out-of-pocket expenses incurred by any Lender in connection
with any such designation or assignment);
(b) the Borrowers may, at their sole expense and effort, require
such Lender or any Defaulting Lender (such Lender or Defaulting Lender herein, a
"Departing Lender"), upon notice to the Departing Lender and the Administrative
Agent, to assign and delegate, without recourse (in accordance with and subject
to the restrictions contained in Section 9.04), all its interests, rights and
obligations under this Agreement to an assignee that shall assume such
obligations (which assignee may be another Lender, if a Lender accepts such
assignment); provided that (i) the Borrowers shall have received the prior
written consent of the Administrative Agent (and if a Revolving Commitment is
being assigned, the Issuing Bank), which consent shall not be unreasonably
withheld or delayed, (ii) the Departing Lender shall have received payment of an
amount equal to the outstanding principal of its Loans and participations in LC
Disbursements and Swingline Loans, accrued interest thereon, accrued fees and
all other amounts payable to it hereunder, from the assignee (to the extent of
such outstanding principal and accrued interest and fees) or the Borrowers (in
the case of all other amounts) and (iii) in the case of any such assignment
resulting from a claim for compensation under Section 2.16 or payments required
to be made pursuant to Section 2.18, such assignment will result in a reduction
in such compensation or payments. A Departing Lender shall not be required to
make any such assignment and delegation if, prior thereto, as a result of a
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waiver by such Lender or otherwise, the circumstances entitling the Borrowers to
require such assignment and delegation cease to apply.
SECTION 2.21. Indemnity for Returned Payments. If after receipt of
any payment which is applied to the payment of all or any part of the
Obligations, any Agent or any Lender is for any reason compelled to surrender
such payment or proceeds to any Person because such payment or application of
proceeds is invalidated, declared fraudulent, set aside, determined to be void
or voidable as a preference, impermissible setoff, or a diversion of trust
funds, or for any other reason, then the Obligations or part thereof intended to
be satisfied shall be revived and continued and this Agreement shall continue in
full force as if such payment or proceeds had not been received by such Agent or
such Lender and the Borrowers shall be liable to pay to the Agents and the
Lenders, and each Borrower hereby indemnifies the Agents and the Lenders and
holds the Agents and the Lenders harmless for the amount of such payment or
proceeds surrendered. The provisions of this Section 2.21 shall be and remain
effective notwithstanding any contrary action which may have been taken by any
Agent or any Lender in reliance upon such payment or application of proceeds,
and any such contrary action so taken shall be without prejudice to the Agents'
and the Lenders' rights under this Agreement and shall be deemed to have been
conditioned upon such payment or application of proceeds having become final and
irrevocable. The provisions of this Section 2.21 shall survive the termination
of this Agreement.
SECTION 2.22. Utilization of Commitments in Canadian Dollars. (a)
The Administrative Agent will determine the Dollar Equivalent with respect to
(i) any Borrowing comprised of Canadian Dollars as of the requested date of the
Borrowing, (ii) all outstanding Canadian Dollar Revolving Loans as of the last
Business Day of any month (if the Administrative Agent has not previously made a
determination of the Dollar Equivalent amount of all outstanding Canadian Dollar
Revolving Loans during such month) and (iii) any outstanding Canadian Dollar
Loan as of any redenomination date pursuant to this Article 2 and any date on
which the Canadian Revolving Subfacility Commitments are reduced pursuant to
Section 2.10.
(b) In the case of a proposed Borrowing of Canadian Revolving Loans,
the Canadian Lenders shall be under no obligation to make a Canadian Dollar
Revolving Loan in Canadian Dollars as part of such Borrowing if the
Administrative Agent has received notice from Canadian Lenders having Canadian
Revolving Subfacility Commitments representing a majority of the Canadian
Commitments at such time by 5:00 p.m., New York City time, four Business Days
prior to the day of such Borrowing that such Canadian Lenders cannot provide
Canadian Revolving Loans in Canadian Dollars, in which case the Administrative
Agent will promptly give notice to the Canadian Borrower that the Borrowing in
Canadian Dollars is not available, and notice thereof also will be given
promptly by the Administrative Agent to all other Canadian Lenders. If the
Administrative Agent shall have so notified Canadian Borrower that such
Borrowing in Canadian Dollars is not then available, the Canadian Borrower may,
by notice to the Administrative Agent not later than 12:00 noon, New York City
time, three Business Days prior to the requested date of such Borrowing,
withdraw such notice of borrowing relating to such requested Borrowing. If the
Canadian Borrower does so withdraw such notice of borrowing, the Borrowing
requested therein shall not occur and the Administrative Agent will promptly so
notify each applicable Canadian Lender. If the Canadian Borrower does not so
withdraw such notice of borrowing, the Administrative Agent will promptly so
notify each applicable Canadian Lender and such notice shall be deemed to be a
notice of borrowing that requests a Borrowing comprised of Dollar Revolving
Loans in an aggregate amount approximately equal to the amount of the originally
requested Borrowing as expressed in Dollars; and in such notice by the
Administrative Agent to each applicable Canadian Lender the Administrative Agent
will state such aggregate amount of such borrowing in Dollars and such Canadian
Lender's share thereof.
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(c) In the case of a proposed continuation of Canadian Dollar
Revolving Loans for an additional Interest Period, the Canadian Lenders shall be
under no obligation to continue such Canadian Dollar Revolving Loans if the
Administrative Agent has received notice from Canadian Lenders having Canadian
Revolving Subfacility Commitments representing a majority of the Canadian
Commitments by 5:00 p.m., New York City time, four Business Days prior to the
day of such continuation that such Canadian Lenders cannot continue to provide
Revolving Loans in Canadian Dollars, in which event the Administrative Agent
will promptly give notice to the Canadian Borrower that the continuation of such
Canadian Dollar Revolving Loan is not then available, and notice thereof also
will be given promptly by the Administrative Agent to all other Canadian
Lenders. If the Administrative Agent shall have notified the Canadian Borrower
that any such continuation of Canadian Dollar Revolving Loans is not then
available, any notice of continuation/conversion with respect thereto shall be
deemed withdrawn and such Canadian Dollar Revolving Loans shall be repaid on the
last day of the Interest Period with respect to such Canadian Dollar Revolving
Loans.
(d) Notwithstanding anything herein to the contrary, during the
existence and continuance of an Event of Default, upon the request of the
Canadian Lenders having Canadian Revolving Subfacility Commitments representing
a majority of the Canadian Commitments under the Canadian Revolving Facility or,
if such Canadian Revolving Subfacility Commitments have been terminated, those
Canadian Lenders representing a majority of the aggregate Canadian Revolving
Subfacility Credit Exposure, all of any part of any outstanding Canadian Dollar
Revolving Loans shall be redenominated and converted into ABR Revolving Loans in
Dollars with effect from the last day of the Interest Period with respect to
such Canadian Dollar Revolving Loans. The Administrative Agent will promptly
notify the Borrowers and each Canadian Lender of any request pursuant to the
foregoing sentence.
(e) Unless otherwise specifically set forth herein, any reference to
currency shall be a reference to Dollars.
(f) All payments (including prepayments) to be made by any Borrower,
whether on account of principal, interest, fees or otherwise, shall be made
without setoff or counterclaim and shall be made in the currency in which such
amounts are denominated in immediately available funds (or, in the case of
payments in Canadian Dollars, in same day or other similar funds reasonably
satisfactory to Administrative Agent). All payments of principal and interest in
respect of a Loan denominated in Canadian Dollars shall be made in Canadian
Dollars. All other payments made by any Borrower hereunder shall be made in
Dollars.
(g) The Administrative Agent shall not be liable to any party to
this Agreement in any way whatsoever for any delay (other than to the extent
caused by willful misconduct or gross negligence of the Administrative Agent),
or the consequences of any delay, in the crediting to any account of any amount
denominated in Canadian Dollars.
ARTICLE III
III. REPRESENTATIONS AND WARRANTIES
Each Loan Party, jointly and severally, represents and warrants to
the Lenders that:
SECTION 3.01. Organization; Powers. Each of the Loan Parties and
each of its Subsidiaries is duly organized, validly existing and in good
standing under the laws of the jurisdiction of its organization, has all
requisite power and authority necessary to carry on its business as now
conducted and is qualified to do business in, and is in good standing in, every
jurisdiction where such qualification is
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required except to the extent failure to so qualify would not reasonably be
expected to result in a Material Adverse Effect.
SECTION 3.02. Authorization; Enforceability. The Transactions are
within each Loan Party's corporate powers and have been duly authorized by all
necessary corporate and, if required, stockholder action. The Loan Documents to
which each Loan Party is a party have been duly executed and delivered by such
Loan Party and constitute a legal, valid and binding obligation of such Loan
Party, enforceable in accordance with its terms, subject to applicable
bankruptcy, insolvency, reorganization, moratorium or other laws affecting
creditors' rights generally and subject to general principles of equity,
regardless of whether considered in a proceeding in equity or at law.
SECTION 3.03. Governmental Approvals; No Conflicts. The Transactions
(a) do not require any consent or approval of, registration or filing with, or
any other action by, any Governmental Authority, except (i) such as have been
obtained or made and are in full force and effect or (ii) consents or approvals
which the failure to so obtain would not reasonably be expected to result in a
Material Adverse Effect, (b) will not violate any material Requirement of Law or
regulation or the charter of any Loan Party or any of its Subsidiaries or any
order of any Governmental Authority, (c) will not violate or result in an Event
of Default under any material indenture, agreement or other instrument binding
upon any Loan Party or any of its Subsidiaries or its assets, or give rise to a
right thereunder to require any payment in excess of $1,000,000 to be made by
any Loan Party or any of its Subsidiaries, and (d) will not result in the
creation or imposition of any Lien on any asset of any Loan Party or any of its
Subsidiaries other than Liens created by the Collateral Documents.
SECTION 3.04. Financial Condition; No Material Adverse Change. (a)
The Borrowers have heretofore furnished to the Lenders Parent's annual reports
on Form 10-K for fiscal years ending December 31, 2004. Such financial
statements present fairly, in all material respects, the financial position and
results of operations and cash flows of Parent and its consolidated Subsidiaries
as of such dates and for such periods in accordance with GAAP.
(b) Since December 31, 2004, there has been no development or event
that has had a Material Adverse Effect.
SECTION 3.05. Properties. (a) As of the date of this Agreement,
Schedule 3.05 sets forth a correct and complete list of all real property owned
or leased by each Loan Party. Each of such leases and subleases is valid and
enforceable in accordance with its terms and is in full force and effect, and no
default by any party to any such lease or sublease exists, except where such
invalidity or unenforceability could not individually or in the aggregate have a
Material Adverse Effect. Except as set forth on Schedule 3.05, each of Loan
Parties and its Subsidiaries has marketable title to, or valid leasehold
interests in, all its real and personal property, free of all Liens other than
Permitted Liens.
(b) Each Loan Party and its Subsidiaries owns, or is licensed to
use, all trademarks, tradenames, copyrights, patents and other intellectual
property necessary to the Loan Parties' business, except where failure to do so,
individually or in the aggregate, could not reasonably be expected to result in
a Material Adverse Effect. A correct and complete list of any such United States
or Canadian (i) patent and patent applications, trademark registrations and
applications and (iii) copyright registrations and applications owned or leased
by a Loan Party or any of its Subsidiaries, as of the date of this Agreement, is
set forth on Schedule 3.05, and the use thereof by the Loan Parties and its
Subsidiaries does not infringe in any material respect upon the rights of any
other Person, and, except as set forth on Schedule 3.05, the Loan Parties'
rights thereto are not subject to any licensing agreement or similar
arrangement.
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SECTION 3.06. Litigation and Environmental Matters. (a) Except for
the Disclosed Matters, there are no actions, suits or proceedings by or before
any arbitrator or Governmental Authority pending against or, to the knowledge of
any Loan Party, threatened against or affecting the Loan Parties or any of their
Subsidiaries (i) as to which there is a reasonable likelihood of an adverse
determination and that, if adversely determined, could reasonably be expected,
individually or in the aggregate, to result in a Material Adverse Effect or (ii)
that involve this Agreement or the Transactions.
(b) Except for the Disclosed Matters and except with respect to any
other matters that, individually or in the aggregate, could not reasonably be
expected to result in a Material Adverse Effect, (i) no Loan Party nor any of
its Subsidiaries has received notice of any claim with respect to any
Environmental Liability or knows of any basis for any Environmental Liability
and (ii) no Loan Party nor any of its Subsidiaries (1) has failed to comply with
any Environmental Law or to obtain, maintain or comply with any permit, license
or other approval required under any Environmental Law or (2) has become subject
to any Environmental Liability.
SECTION 3.07. Compliance with Laws and Agreements. Each of the Loan
Parties and each of its Subsidiaries is in compliance with all Requirements of
Law and all indentures, agreements and other instruments binding upon it or its
property, except where the failure to do so, individually or in the aggregate,
could not reasonably be expected to result in a Material Adverse Effect.
SECTION 3.08. Investment and Holding Company Status. No Loan Party
is (a) an "investment company" as defined in, or subject to regulation under,
the Investment Company Act of 1940 or (b) a "holding company" as defined in, or
subject to regulation under, the Public Utility Holding Company Act of 1935.
SECTION 3.09. Taxes. Except as set forth on Schedule 3.09, each of
the Loan Parties and its Subsidiaries has timely filed or caused to be filed all
material Tax returns and reports required to have been filed and has paid or
caused to be paid all federal and all other material Taxes required to have been
paid by it, except Taxes that are being contested in good faith by appropriate
proceedings and for which the applicable Loan Party or such Subsidiary has set
aside on its books adequate reserves. No claims have been asserted with respect
to Taxes, except to the extent such claims, individually or in the aggregate,
could not be expected to result in a Material Adverse Effect.
SECTION 3.10. ERISA. (a) No ERISA Event has occurred or is
reasonably expected to occur that, when taken together with all other such ERISA
Events for which liability is reasonably expected to occur, could reasonably be
expected to result in a Material Adverse Effect. The present value of all
accumulated benefit obligations under each Plan (based on the assumptions used
for purposes of Statement of Financial Accounting Standards No. 87) did not, as
of the date of the most recent financial statements reflecting such amounts,
exceed the fair market value of the assets of such Plan by a material amount.
(b) Each of the Canadian Plans is registered under, and in
compliance in all material respects with, the terms of such Canadian Plan, all
fiduciary duties in respect of such Canadian Plan and the Income Tax Act
(Canada) and all other applicable Canadian federal and provincial legislation
and all reports, returns and filings required to be made thereunder have been
made. As of the date of this Agreement, no Canadian Pension Event has occurred
and the Canadian Plans have been at all times administered in accordance with
their terms and the provisions of applicable law except to the extent any
Canadian Pension Event or violation individually or in the aggregate could not
be expected to result in a Material Adverse Effect. As of the date of this
Agreement, correct and complete copies of the Canadian Plans have been made
available to the Administrative Agent and the Lenders. As of the date of this
Agreement, there are no unfunded liabilities under the Canadian Plans and,
without limiting the generality
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of the foregoing, there is no going concern unfunded actuarial liability, past
service unfunded actuarial liability or solvency deficiencies, or any Lien in
respect of any Canadian Plans except for material current contribution amounts
not due and unpaid. As of the date of this Agreement, none of the Loan Parties
has received, or applied for, any payment of surplus from any of the Canadian
Plans.
SECTION 3.11. Disclosure. The Borrowers have disclosed to the
Lenders all agreements, instruments and corporate or other restrictions to which
such Borrower or any of its Subsidiaries is subject, that, individually or in
the aggregate, could reasonably be expected to result in a Material Adverse
Effect. To the best knowledge of each Loan Party, neither the Information
Memorandum nor any of the other written reports, financial statements,
certificates or other information furnished by or on behalf of the Borrowers to
the Administrative Agent or any Lender in connection with the negotiation of
this Agreement or delivered hereunder (as modified or supplemented by other
information so furnished) contains any material misstatement of fact or omits to
state any material fact necessary to make the statements therein, in the light
of the circumstances under which they were made, not materially misleading;
provided that, with respect to projected financial information, the Borrowers
represent only that such information was prepared in good faith based upon
assumptions believed to be reasonable at the time, but actual results may differ
and such differences may be material.
SECTION 3.12. [Intentionally Deleted].
SECTION 3.13. Solvency.
(a) Immediately after the consummation of the transactions to occur
on the date hereof and immediately following the making of each Borrowing and
the issuance of each Letter of Credit, if any, made on the date hereof and after
giving effect to the application of the proceeds of such Borrowing or such
issuance of a Letter of Credit, (a) the fair value of the assets of the Loan
Parties and their Subsidiaries taken as a whole (on a going concern basis), at a
fair valuation, will exceed the debts and liabilities, subordinated, contingent
or otherwise, of the Loan Parties and their Subsidiaries taken as a whole; (b)
the present fair saleable value (on a going concern basis) of the property of
the Loan Parties and their Subsidiaries, taken as a whole, will be greater than
the amount that will be required to pay the probable liability of the Loan
Parties and their Subsidiaries, taken as a whole, on their debts and other
liabilities, subordinated, contingent or otherwise, as such debts and other
liabilities become absolute and matured; (c) each Loan Party will be able to pay
its debts and liabilities, subordinated, contingent or otherwise, as such debts
and liabilities become absolute and matured; and (d) each Loan Party will not
have unreasonably small capital with which to conduct the businesses in which it
is engaged as such businesses are now conducted and are proposed to be conducted
after the date hereof.
(b) No Loan Party intends to, or will permit any of its Subsidiaries
to, and believes that it or any of its Subsidiaries will, incur debts beyond its
ability to pay such debts as they mature, taking into account the timing of and
amounts of cash to be received by it or any such Subsidiary and the timing of
the amounts of cash to be payable on or in respect of its Indebtedness or the
Indebtedness of any such Subsidiary.
SECTION 3.14. Reportable Transaction. The Borrowers do not intend to
treat the Borrowings or issuances of Letters of Credit and related transactions
as being a "reportable transaction" (within the meaning of Treasury Regulation
Section 1.6011-4). In the event the Borrowers determine to take any action
inconsistent with such intention, it will promptly notify the Administrative
Agent thereof.
SECTION 3.15. Capitalization and Subsidiaries. As of the date
hereof, Schedule 3.15 sets forth (a) a correct and complete list of the name and
relationship to the Borrowers of each and all of Parent and its Subsidiaries,
(b) a true and complete listing of each class of each of Parent's and the
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Borrowers' authorized Equity Interests, of which all of such issued shares are
validly issued, outstanding, fully paid and non-assessable, if applicable, and
owned beneficially and of record by the Persons identified on Schedule 3.15, and
(c) the type of entity of each Loan Party and each of its Subsidiaries. All of
the issued and outstanding Equity Interests owned by any Loan Party has been (to
the extent such concepts are relevant with respect to such ownership interests)
duly authorized and issued and is fully paid and non-assessable.
SECTION 3.16. [Intentionally Deleted].
SECTION 3.17. Security Interest in Collateral. The provisions of
this Agreement and the other Loan Documents create legal and valid Liens on all
the Collateral in favor of the Collateral Agent, for the benefit of the
Collateral Agent and the Lenders, and such Liens constitute perfected and
continuing Liens on the Collateral, securing the Secured Obligations,
enforceable (except as enforceability may be limited by applicable bankruptcy,
insolvency, reorganization, moratorium or similar laws affecting the enforcement
of creditors' rights generally and by general equitable principles (whether
enforcement is brought by proceedings in equity or at law)) against the
applicable Loan Party and all third parties, and having priority over all other
Liens on the Collateral except in the case of (a) Permitted Liens, (b) Liens
perfected by possession, control or filing (including possession of any
certificate of title) to the extent the Collateral Agent has not obtained or
does not maintain possession of such Collateral, other than as a result of any
breach by a Loan Party of any of its covenants or representations under the Loan
Documents, and (c) Liens perfected only by filing to the extent the Collateral
Agent has not made such filing. Unless an Event of Default has occurred and is
continuing, the Collateral Agent shall not require the filing of intellectual
property Lien filings in jurisdictions outside of Canada and the United States.
SECTION 3.18. Senior Debt. The Obligations of each Loan Party
constitutes Senior Debt of such Loan Party under and as defined in the 1999
Subordinated Indenture to the extent such Loan Party is the issuer or a
guarantor under the 1999 Subordinated Indenture.
ARTICLE IV
IV. CONDITIONS
SECTION 4.01. Effective Date. The obligations of the Lenders to make
Loans and of the Issuing Bank to issue Letters of Credit hereunder shall not
become effective until the date on which each of the following conditions
(excluding those addressed in the Post-Closing Agreement) is satisfied (or
waived in accordance with Section 9.02):
(a) Credit Agreement and Loan Documents. The Administrative Agent
(or its counsel) shall have received (i) from each party hereto either (A) a
counterpart of this Agreement signed on behalf of such party or (B) written
evidence reasonably satisfactory to the Administrative Agent (which may include
facsimile transmission of a signed signature page of this Agreement) that such
party has signed a counterpart of this Agreement and (ii) duly executed copies
of the Loan Documents and such other reaffirmations, certificates, documents,
instruments and agreements as the Administrative Agent shall reasonably request
in connection with the transactions contemplated by this Agreement and the other
Loan Documents, including any promissory notes requested by a Lender pursuant to
Section 2.11 payable to the order of each such requesting Lender and a written
opinion of the Loan Parties' counsel (and, in the case of U.K. and French law
opinions, Administrative Agent's counsel), addressed to the Administrative
Agent, the Issuing Bank and the Lenders in substantially the form of Exhibit B.
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(b) Financial Statements and Projections. The Lenders shall have
received (i) Parent's annual reports on Form 10-K for fiscal years ending
December 31, 2003 and December 31, 2004 and (ii) projections of the Borrowers'
most recent income statement, balance sheet and cash flows for the five fiscal
years ending December 31, 2009 (including quarterly projections for the fiscal
year ending December 31, 2005); provided that the parties agree that the
projections for fiscal years ending December 31, 2008 and December 31, 2009 may
be delivered in a summary basis reasonably satisfactory to Administrative Agent.
(c) Closing Certificates; Certified Certificate of Incorporation;
Good Standing Certificates. The Administrative Agent shall have received (i) a
certificate of each Loan Party, dated the Effective Date and executed by its
Secretary or Assistant Secretary, which shall (A) certify the resolutions of its
Board of Directors, managers, members, shareholders or other body authorizing
the execution, delivery and performance of the Loan Documents to which it is a
party, (B) identify by name and title and bear the signatures of the Financial
Officers and any other officers of such Loan Party authorized to sign the Loan
Documents to which it is a party, and (C) contain appropriate attachments,
including the certificate or articles of incorporation or organization or
amalgamation of each Loan Party certified by the relevant authority of the
jurisdiction of organization of such Loan Party and a true and correct copy of
its by-laws or operating, management or partnership agreement, and (ii) a long
form good standing certificate for each Loan Party from its jurisdiction of
organization.
(d) [Intentionally Deleted]
(e) Fees. The Lenders, the Agents shall have received all fees
invoiced and required to be paid, and all reasonable out-of-pocket expenses
required to be paid for which invoices have been presented (including the
reasonable fees and out-of-pocket expenses of legal counsel), on or before the
Effective Date. All such amounts will be paid with cash on hand or proceeds of
Loans made on the Effective Date and will be reflected in the funding
instructions given by the U.S. Borrower to the Administrative Agent on or before
the Effective Date.
(f) Lien Searches. The Administrative Agent shall have received the
results of a recent lien search in each of the jurisdictions where assets of the
Parent, the Borrowers and each U.S. Subsidiary Guarantor and other Subsidiary
organized under the laws of Canada are located, and such search shall reveal no
liens on any of the assets of the Parent, the Borrowers and each U.S. Subsidiary
Guarantor and other Subsidiary organized under the laws of Canada except for
liens permitted by Section 6.02 or discharged on or prior to the Effective Date
pursuant to a pay-off letter or other documentation satisfactory to the
Administrative Agent.
(g) Pay-Off Letters. The Administrative Agent shall have received
reasonably satisfactory pay-off letters for all existing Indebtedness to be
repaid from the proceeds of the initial Borrowing, confirming that all Liens
upon any of the property of the Loan Parties constituting Collateral will be
terminated concurrently with such payment and all letters of credit issued or
guaranteed as part of such Indebtedness shall have been cash collateralized or
supported by a Letter of Credit; provided that, in the case of all Existing
Indebtedness evidenced by the Existing Credit Agreement, (i) the Lenders shall
have received satisfactory assignments of the Existing Indebtedness by the
Existing Lenders and (ii) all Liens securing such Existing Indebtedness shall
continue as first priority Liens securing the Secured Obligations, subject only
to those Liens expressly permitted by Section 6.02.
(h) Funding Accounts. The Administrative Agent shall have received a
notice setting forth the deposit account of the U.S. Borrower and the deposit
account of the Canadian Borrower (collectively, the "Funding Accounts") to which
the Lenders, as applicable, are authorized by the
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Borrowers, as applicable, to transfer the proceeds of any Borrowings requested
or authorized pursuant to this Agreement.
(i) Insurance. The Agents shall have received evidence of insurance
coverage in compliance with the terms of Section 5.09 of this Agreement and
Section 4.12 of the Security Agreement.
(j) [Intentionally Deleted]
(k) Control Agreements. The Agents shall have received each Deposit
Account Control Agreement (which shall, among other things, provide for a
springing blocked account which shall be (x) converted into full dominion and
control if the Cash Availability Trigger is less than $50,000,000 for any ten
(10) consecutive Business Days and (y) converted back into a springing account
from full dominion and control if the Cash Availability Trigger is greater than
$75,000,000 for a period of sixty (60) consecutive days) required to be provided
pursuant to Section 7.1(b) of the Security Agreement; provided that no such
Deposit Account Control Agreements shall be required for trust, payroll accounts
and petty cash accounts (containing petty cash in an aggregate amount for all
such petty cash accounts not to exceed $125,000, at any time outstanding).
(l) Solvency. The Administrative Agent shall have received a
solvency certificate from the chief financial officer of each of the Borrowers.
(m) Borrowing Base Certificate. The Administrative Agent shall have
received a Borrowing Base Certificate which calculates the Borrowing Base as of
the end of March, 2005.
(n) Closing Availability. After giving effect to all Borrowings to
be made on the Effective Date (including, without limitation, the Existing
Indebtedness constituting Obligations hereunder) and, without duplication, the
issuance of any Letters of Credit on the Effective Date and payment of all
invoiced and reasonable fees and expenses due hereunder, and with all of the
Loan Parties' indebtedness, liabilities, and obligations current, the U.S.
Availability shall not be less than $50,000,000.
(o) Second Lien Credit Agreement. All conditions precedent to the
closing of the Second Lien Credit Agreement shall have been satisfied or waived
prior to or simultaneously with the closing hereunder, the terms and conditions
of the Second Lien Credit Agreement shall be reasonably satisfactory to the
Administrative Agent and the Borrowers shall have received gross proceeds of at
least $150,000,000 from the Second Lien Credit Agreement.
(p) Intercreditor Agreement. All conditions precedent to the closing
of the Intercreditor Agreement shall have been satisfied prior to or
simultaneously with the closing hereunder, the terms and conditions of the
Intercreditor Agreement shall be reasonably satisfactory to the Administrative
Agent and the Borrowers.
(q) Pledged Stock; Stock Powers; Pledged Notes. The Collateral Agent
shall have received (i) the certificates representing the shares of Capital
Stock pledged pursuant to the Security Agreement and the Canadian Pledge
Agreements, together with an undated stock power for each such certificate
executed in blank by a duly authorized officer of the pledgor thereof and (ii)
each promissory note (if any) pledged to the Collateral Agent pursuant to the
Security Agreement endorsed (without recourse) in blank (or accompanied by an
executed transfer form in blank) by the pledgor thereof.
(r) Filings, Registrations and Recordings. Each document (including
any Uniform Commercial Code or Personal Property Security Act (Ontario)
financing statement) required by the Collateral Documents or under law or
reasonably requested by the Agents to be filed, registered or
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recorded in order to create or continue, as applicable, in favor of the
Collateral Agent, for the benefit of the Collateral Agent and the Lenders, a
perfected Lien on the Collateral described therein, prior and superior in right
to any other Person (other than with respect to Liens expressly permitted by
Section 6.02), shall be in proper form for filing, registration or recordation.
(s) Environmental Reports. The Administrative Agent shall have
received environmental reports with respect to the real properties of the
Borrowers and their Subsidiaries specified by the Administrative Agent from
Environ Corporation or any other firm(s) reasonably satisfactory to the
Administrative Agent, which review reports shall be reasonably acceptable to the
Administrative Agent.
(t) Mortgages, etc. The Agents shall have received, with respect to
each parcel of real property which is required to be subject to a Lien in favor
of the Collateral Agent, each of the following, in form and substance reasonably
satisfactory to the Agents:
(i) a Mortgage (including, without limitation,
reaffirmations and amendments thereto) on such property;
(ii) ALTA or other mortgagee's title policy or
endorsement thereto insuring such mortgage is a valid and enforceable
continuing first priority Lien in favor of the Collateral Agent for the
benefit of itself and the Lenders;
(iii) an ALTA survey prepared and certified to the
Administrative Agent by a surveyor reasonably acceptable to the
Administrative Agent (or survey certificate sufficient to obtain a survey
endorsement on the title policies); and
(iv) an opinion of counsel in the state or province in
which such parcel of real property is located in form and substance and
from counsel reasonably satisfactory to the Administrative Agent.
(u) Letter of Credit Application. The Administrative Agent shall
have received a properly completed letter of credit application if the issuance
of a Letter of Credit will be required on the Effective Date. The U.S. Borrower
shall have executed the Issuing Bank's master agreement for the issuance of
commercial Letters of Credit.
(v) Approvals. All governmental and third party approvals necessary
in connection with the transactions contemplated hereby (including shareholder
approval, if required) shall have been obtained on reasonably satisfactory terms
and be in full force and effect.
(w) Closing Compliance Certificate. The Administrative Agent shall
have received a certificate of the U.S. Borrower demonstrating that (i) the
Agreement, the other Loan Documents and the Obligations are permitted under the
2002 Senior Indenture and the 1999 Subordinated Indenture and (ii) the
Obligations (assuming full utilization of the Revolving Commitments) constitute
"Senior Debt" under the 1999 Subordinated Indenture.
(x) Appraisals. The Administrative Agent shall have received asset
appraisals (in form and substance reasonably acceptable to Administrative Agent)
pertaining to such assets as Administrative Agent shall have specified from
appraisers reasonably satisfactory to the Administrative Agent (including,
without limitation, being engaged directly by the Administrative Agent and
having no direct or indirect interest, financial or otherwise, in the assets
being appraised or the Transactions).
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(y) Field Examination. The Administrative Agent shall have conducted
a reasonably satisfactory field examination of the Accounts and Inventory
(including related working capital matters), financial information and related
data processing and other systems of the Borrowers and Parent's other
Subsidiaries organized under the laws of a jurisdiction within the United
States.
(z) Legal and Regulatory Matters. The Administrative Agent shall be
reasonably satisfied with all legal (including, without limitation, tax
implications) and regulatory matters relating to the Loan Parties and their
Subsidiaries, including, without limitation, the Loan Parties and their
Subsidiaries' corporate and capital structure, material accounts and compliance
with all applicable requirements of Regulations T, U and X of the Board of
Governors of the Federal Reserve System.
(aa) Other Documents. The Agents shall have received such other
documents as the Agents, the Issuing Bank, any Lender or their respective
counsel may have reasonably requested.
The Administrative Agent shall notify the Borrowers and the Lenders of the
Effective Date, and such notice shall be conclusive and binding. Notwithstanding
the foregoing, the obligations of the Lenders to make Loans and of the Issuing
Bank to issue Letters of Credit hereunder shall not become effective unless each
of the foregoing conditions is satisfied (or waived pursuant to Section 9.02) at
or prior to 2:00 p.m., New York City time, on May 3, 2005 (and, in the event
such conditions are not so satisfied or waived, the Revolving Commitments shall
terminate at such time).
SECTION 4.02. Each Credit Event. The obligation of each Lender to
make a Loan on the occasion of any Borrowing (excluding the continuation of a
Loan as a Loan of the same Type or the conversion of a Loan from one Type into
another Type), and of the Issuing Bank to issue, amend, renew or extend any
Letter of Credit, is subject to the satisfaction of the following conditions:
(a) The representations and warranties of the Borrowers set forth in
this Agreement, any Letter of Credit applications and the Collateral Documents
shall be true and correct in all material respects on and as of the date (except
to the extent such representations or warranties relate to an earlier date in
which case they shall be true and correct in all material respects as of such
date) of such Borrowing or the date of issuance, amendment, renewal or extension
of such Letter of Credit, as applicable, and if they are not true and correct in
all material respects the Administrative Agent or the Required Lenders shall
have determined not to make any such Loan or instructed the Issuing Bank not to
issue Letters of Credit as a result of the fact that such representation or
warranty is untrue or incorrect.
(b) At the time of and immediately after giving effect to such
Borrowing or the issuance, amendment, renewal or extension of such Letter of
Credit, as applicable, no Default shall have occurred and be continuing and the
Administrative Agent or the Required Lenders shall have determined not to make
such Borrowing or instructed the Issuing Bank not to issue such Letter of Credit
as a result of such Default.
(c) After giving effect to any Borrowing or the issuance of any
Letter of Credit, U.S. Availability is not less than zero.
(d) After giving effect to any Borrowing by the Canadian Borrower,
Canadian Availability is not less that zero.
Each Borrowing (excluding the continuation of a Loan as a Loan of the same Type
or the conversion of a Loan from one Type into another Type), and each issuance,
amendment, renewal or extension of a Letter of Credit shall be deemed to
constitute a representation and warranty by the Borrower on the date thereof as
to the matters specified in paragraphs (a)-(d) of this Section. Any Lender may
require a duly completed
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compliance certificate as a condition to making a Borrowing or requesting the
issuance of a Letter of Credit.
ARTICLE V
V. AFFIRMATIVE COVENANTS
Until the Revolving Commitments have expired or been terminated and
the principal of and interest on each Loan and all fees and other Obligations
(other than contingent indemnification Obligations to the extent no claims
giving rise thereto have been asserted) payable hereunder shall have been paid
in full and all Letters of Credit shall have expired, terminated or secured in
accordance with Section 2.07(j)(ii) hereof and all LC Disbursements shall have
been reimbursed, each Loan Party executing this Agreement covenants and agrees,
jointly and severally with all of the Loan Parties, with the Lenders that:
SECTION 5.01. Financial Statements; Borrowing Base and Other
Information. The Borrowers will furnish to the Administrative Agent and each
Lender:
(a) within 90 days after the end of each fiscal year of the Parent,
its audited consolidated and consolidating (by division) balance sheet and
related statements of operations, stockholders' equity and cash flows as of the
end of and for such year, setting forth in each case in comparative form the
figures for the previous fiscal year, all reported on by Deloitte & Touche LLP
or other independent public accountants reasonably acceptable to the Required
Lenders (without a "going concern" or like qualification or exception and
without any qualification or exception as to the scope of such audit) to the
effect that such consolidated financial statements present fairly in all
material respects the financial condition and results of operations of Parent
and its consolidated Subsidiaries on a consolidated basis in accordance with
GAAP consistently applied, accompanied by any management letter prepared by said
accountants;
(b) within 45 days after the end of each of the first three fiscal
quarters of the Parent, its unaudited consolidated and consolidating (by
division) balance sheet and related statements of operations, stockholders'
equity and cash flows as of the end of and for such fiscal quarter and the then
elapsed portion of the fiscal year, setting forth in each case in comparative
form the figures for the corresponding period or periods of (or, in the case of
the balance sheet, as of the end of) the previous fiscal year, all certified by
one of its Financial Officers as presenting fairly in all material respects the
financial condition and results of operations of the Parent and its consolidated
Subsidiaries on a consolidated basis in accordance with GAAP consistently
applied, subject to normal year-end audit adjustments and the absence of
footnotes;
(c) within 20 days after the end of each fiscal month of the Parent
if, at such time, the Cash Availability Trigger is less than $35,000,000, its
unaudited consolidated and consolidating (by division) balance sheet and related
statements of operations, stockholders' equity and cash flows as of the end of
and for such fiscal month and the then elapsed portion of the fiscal year,
setting forth in each case in comparative form the figures for the corresponding
period or periods of (or, in the case of the balance sheet, as of the end of)
the previous fiscal year, all certified by one of its Financial Officers as
presenting fairly in all material respects the financial condition and results
of operations of Parent and its consolidated Subsidiaries on a consolidated
basis in accordance with GAAP consistently applied, subject to normal year-end
audit adjustments and the absence of footnotes;
(d) concurrently with any delivery of financial statements under
clause (a) or (b) or, if applicable, (c) above, a certificate of a Financial
Officer of the U.S. Borrower in substantially the form
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of Exhibit D (i) certifying, in the case of the financial statements delivered
under clause (b) or, if applicable, (c), as presenting fairly in all material
respects the financial condition and results of operations of Parent and its
consolidated Subsidiaries on a consolidated basis in accordance with GAAP
consistently applied, subject to normal year-end audit adjustments and the
absence of footnotes, (ii) certifying as to whether a Default has occurred and,
if a Default has occurred, specifying the details thereof and any action taken
or proposed to be taken with respect thereto, (iii) setting forth reasonably
detailed calculations demonstrating compliance with Section 6.12 and (iv)
stating whether any change in GAAP or in the application thereof has occurred
since the date of the audited financial statements referred to in Section 3.04
and, if any such change has occurred, specifying the effect of such change on
the financial statements accompanying such certificate;
(e) concurrently with any delivery of financial statements under
clause (a) above, a certificate of the accounting firm that reported on such
financial statements stating whether they obtained knowledge during the course
of their examination of such financial statements of any Default (which
certificate may be limited to the extent required by accounting rules or
guidelines);
(f) as soon as available, but in any event not more than sixty (60)
days after the end of each fiscal year, a copy of the plan and forecast
(including a projected consolidated and consolidating balance sheet, income
statement and funds flow statement) of the Borrowers for each quarter of the
following fiscal year (the "Projections") in form reasonably satisfactory to the
Administrative Agent, it being agreed that the form and scope of Projections
delivered on the Effective Date is reasonably satisfactory to the Administrative
Agent;
(g) as soon as available but in any event within twenty (20) days of
the end of each fiscal month, and at such other times as may be reasonably
requested by the Administrative Agent if, at such time, the Cash Availability
Trigger is less than $35,000,000, as of the period then ended, a completed U.S.
Borrowing Base Certificate and a completed Canadian Borrowing Base Certificate
(showing such Borrowing Base as of the close of business on the last day of such
fiscal month) and, in each case, supporting information in connection therewith
(including without limitation, the "Reporting Requirements" schedules thereto),
together with any additional reports with respect to the Borrowing Bases as the
Administrative Agent may reasonably request; and the Eligible U.S. Equipment,
Eligible U.S. Real Property, Eligible Aircraft, Canadian Eligible Equipment and
Canadian Eligible Real Property components of the Borrowing Bases, as
applicable, shall be updated (w) from time to time upon receipt of periodic
valuation updates received from the Administrative Agent's asset valuation
experts, (x) concurrent with the sale or commitment to sell any assets
constituting part of the Eligible U.S. Equipment, Eligible U.S. Real Property,
Eligible Aircraft, Canadian Eligible Equipment and Canadian Eligible Real
Property as applicable, (y) in the event such assets are idled for any reason
other than maintenance or repairs for a period in excess of ten (10) consecutive
days, or (z) in the event that the value of such owned and leased assets is
otherwise materially impaired, as determined in the Administrative Agent's
Permitted Discretion;
(h) within ninety (90) days following the Cash Availability Trigger
being less than $50,000,000 and as reasonably requested thereafter (until such
time, if at all, that the Cash Availability Trigger is greater than $75,000,000
for a period of sixty (60) consecutive days) or at any time when an Event of
Default has occurred and is continuing, an updated customer list for the
Borrowers and the Subsidiary Guarantors, which list shall state the customer's
name, mailing address and phone number and shall be certified as true and
correct by a Financial Officer of the U.S. Borrower; and
(i) promptly following any request therefor, such other information
regarding the operations, business affairs and financial condition of Parent or
any Subsidiary, or compliance with the
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terms of this Agreement or any other Loan Document, as the Administrative Agent
or any Lender may reasonably request.
SECTION 5.02. Notices of Material Events. The U.S. Borrower will
furnish to the Administrative Agent and each Lender prompt written notice of the
following:
(a) the occurrence of any Default;
(b) receipt of any notice of any governmental investigation or any
litigation commenced or threatened against any Loan Party that (i) seeks damages
in excess of $5,000,000, (ii) seeks injunctive relief that, if successful, would
reasonably be expected to result in costs or liabilities (or negatively impact
the value of such Loan Party's property) in excess of $5,000,000, (iii) is
asserted or instituted against any Plan, its fiduciaries or its assets which
would reasonably be expected to result in costs or liabilities in excess of
$5,000,000, (iv) alleges criminal misconduct by any Loan Party, (v) alleges the
violation of any law regarding, or seeks remedies in connection with, any
Environmental Laws which resolution or remedy would be reasonably expected to
result in costs or liabilities in excess of $5,000,000; or (vi) involves any
product recall to the extent such action could reasonably be expected to result
in a Material Adverse Effect;
(c) any Lien (other than Permitted Liens) placed on or asserted
against any of the Collateral;
(d) commencement of any proceedings contesting any tax, fee,
assessment, or other governmental charge in excess of $5,000,000;
(e) the opening of any new deposit account (other than a payroll or
trust account or petty cash accounts to the extent the aggregate of deposits in
all petty cash accounts do not exceed $125,000) by any Loan Party with any bank
or other financial institution;
(f) any loss, damage, or destruction to the Collateral in the amount
of $20,000,000 or more, whether or not covered by insurance;
(g) as and when known by a Financial Officer or other senior officer
of a Loan Party, any and all default notices received under or with respect to
any leased location or public warehouse where material Collateral is located
(which shall be delivered within two (2) Business Days after knowledge thereof);
(h) any pending or threatened strike, work stoppage, unfair labor
practice claim, or other labor dispute affecting the Borrowers or any of their
Subsidiaries in a manner which could reasonably be expected to have a Material
Adverse Effect;
(i) the occurrence of any ERISA Event that, alone or together with
any other ERISA Events that have occurred, could reasonably be expected to
result in a Material Adverse Effect; and
(j) any other development that results in, or could reasonably be
expected to result in, a Material Adverse Effect.
Each notice delivered under this Section shall be accompanied by a statement of
a Financial Officer or other executive officer of the U.S. Borrower setting
forth the details of the event or development requiring such notice and any
action taken or proposed to be taken with respect thereto.
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SECTION 5.03. Existence; Conduct of Business. Each Loan Party will,
and will cause each of its Subsidiaries to, (a) do or cause to be done all
things necessary (i) to preserve, renew and keep in full force and effect its
legal existence and the rights, licenses, permits, privileges and franchises
material to the conduct of its business, and (ii) maintain all requisite
authority to conduct its business in each jurisdiction in which its business is
conducted, except to the extent failure to comply with this clause (ii) could
not be reasonably expected to result in a Material Adverse Effect; provided that
the foregoing shall not prohibit any merger, consolidation, liquidation or
dissolution permitted under Section 6.03 and (b) carry on and conduct its
business in substantially the same manner and in substantially the same fields
of enterprise as it is presently conducted.
SECTION 5.04. Payment of Obligations. Each Loan Party will, and will
cause each of its Subsidiaries to, pay or discharge when due all material
Indebtedness and all other material liabilities and obligations, including
Taxes, except where (a) the validity or amount thereof is being contested in
good faith by appropriate proceedings, (b) such Loan Party or such Subsidiary
has set aside on its books adequate reserves with respect thereto in accordance
with GAAP and (c) the failure to make payment pending such contest could not
reasonably be expected to result in a Material Adverse Effect.
SECTION 5.05. Maintenance of Properties and Intellectual Property
Rights. Each Loan Party will, and will cause each of its Subsidiaries to, (a)
keep and maintain all property material to the conduct of its business in good
working order and condition, ordinary wear and tear, casualty and condemnation
excepted, and (b) obtain and maintain in effect at all times all material
franchises, governmental authorizations, intellectual property rights, licenses
and permits, which are necessary for it to own its property or conduct its
business as conducted on the date of this Agreement, except to the extent the
failure to maintain such intellectual property, franchises, government
authorizations, licenses and permits could not reasonably be expected to result
in a Material Adverse Effect.
SECTION 5.06. Books and Records; Inspection Rights. Each Loan Party
will, and will cause each of its Subsidiaries to, keep proper books of record
and account in accordance with GAAP. Each Loan Party will, and will cause each
of its Subsidiaries to, permit any representatives designated by the
Administrative Agent or any Lender (so long such Lender or its representatives
are accompanying the Administrative Agent) (including employees of the
Administrative Agent, any Lender or any consultants, accountants, lawyers and
appraisers retained by the Administrative Agent), upon reasonable prior notice,
to visit and inspect its properties, to examine and make extracts from its books
and records, and to permit the Administrative Agent and Lenders to discuss its
affairs, finances and condition with its officers and independent accountants
(provided a representative from Borrowers may be elect to present), all at such
reasonable times (during normal business hours) and as often as reasonably
requested; provided that so long as no Event of Default has occurred and is
continuing, Borrowers shall only be required to reimburse the Administrative
Agent and Lenders for the cost of (i) one such inspection in any fiscal year
(including internally allocated fees and expenses of employees of the
Administrative Agent and expenses of any such representatives retained by the
Administrative Agent as to which invoices have been furnished to conduct any
such inspection) and (ii) one additional such inspection in any such fiscal year
in the event the Cash Availability Trigger is less than or equal to $50,000,000
for ten (10) or more consecutive Business Days during such fiscal year. After
the occurrence and during the continuance of any Event of Default, each Loan
Party shall provide the Administrative Agent, and each Lender with access to its
suppliers. The Loan Parties acknowledge that the Administrative Agent, after
exercising its rights of inspection, may prepare and distribute to the Lenders
certain Reports pertaining to the Loan Parties' assets for internal use by the
Administrative Agent and the Lenders.
SECTION 5.07. Compliance with Laws. Each Loan Party will, and will
cause each of its Subsidiaries to, comply with all laws, rules, regulations and
orders of any Governmental Authority
79
applicable to it or its property, except where the failure to do so,
individually or in the aggregate, could not reasonably be expected to result in
a Material Adverse Effect.
SECTION 5.08. Use of Proceeds and Letters of Credit. The proceeds of
the Loans will be used only for working capital and general corporate purposes
of the Borrowers and their Subsidiaries in the ordinary course of their business
and to refinance certain Existing Indebtedness. No part of the proceeds of any
Loan will be used, whether directly or indirectly, for any purpose that entails
a violation of any of the Regulations of the Board, including Regulations T, U
and X. Letters of Credit will be issued only to support the working capital
needs and other general corporate purposes of the Borrowers and their
Subsidiaries in the ordinary course of business.
SECTION 5.09. Insurance. Each Loan Party will, and will cause each
of its Subsidiaries to, maintain with financially sound and reputable
independent insurance carriers having a financial strength rating of at least A
by A.M. Best Company insurance against: (i) loss or damage by fire and loss in
transit; (ii) theft, burglary, pilferage, larceny, embezzlement, and other
criminal activities; (iii) business interruption; (iv) general liability and (v)
and such other hazards, each as is customary for companies of a similar size
engaged in similar business under similar circumstances as such Person. All such
insurance shall be in amounts, cover such assets and be under policies
reasonably acceptable to the Administrative Agent in its Permitted Discretion.
No Loan Party will use or permit any property to be used in any manner which
would render inapplicable any material insurance coverage. Any insurance or
condemnation net cash proceeds in excess of $5,000,000 received by the Loan
Parties from a casualty or condemnation (or any related casualties or
condemnations) shall be immediately forwarded to the Administrative Agent and
the Administrative Agent shall apply any such proceeds to the reduction of the
Obligations in accordance with Section 2.12(b)(v).
SECTION 5.10. Appraisals. At any time that the Administrative Agent
reasonably requests, or at any time that the Borrowers so elect, the Loan
Parties will provide the Administrative Agent with appraisals or updates thereof
(and will reimburse the Administrative Agent for the costs thereof) of their
Inventory, equipment, Eligible Aircraft and real property from an appraiser
selected and engaged by the Administrative Agent, and prepared on a basis
reasonably satisfactory to the Administrative Agent, such appraisals and updates
to include, without limitation, information required by applicable law and
regulations; provided that, in the case of any appraisal requested by the
Administrative Agent, so long as no Event of Default has occurred and is
continuing, the Borrowers shall only be required to reimburse the Administrative
Agent and Lenders for the cost of (i) one such appraisal in any fiscal year and
(ii) one additional such appraisal in any such fiscal year in the event the Cash
Availability Trigger is less than or equal to $50,000,000 for ten (10) or more
consecutive Business Days during such fiscal year. The Administrative Agent
shall not request appraisals of equipment, Eligible Aircraft or real estate for
the purpose of redetermining the Net Orderly Liquidation Value of equipment or
Eligible Aircraft included in the Borrowing Bases or the fair market value of
real estate included in the Borrowing Bases unless (i) an Event of Default has
occurred and is continuing or (ii) unless the sum of the Dollar Equivalent of
the aggregate Hard Costs of Additional Canadian Eligible Equipment included in
Canadian Eligible Equipment plus the aggregate Hard Costs of Additional Eligible
U.S. Equipment included in Eligible U.S. Equipment exceeds $20,000,000, in which
event the Administrative Agent may request such appraisals for the purpose of
redetermining the values of all equipment, Eligible Aircraft and real estate
included in the Borrowing Bases; provided that the foregoing shall not prohibit
the Borrowers from electing to obtain appraisals for such purpose at any time.
Upon any Lender's reasonable request, Administrative Agent shall provide such
Lender with a copy of any appraisal delivered hereunder.
SECTION 5.11. Additional Collateral; Further Assurances. Subject to
applicable law, each Loan Party shall, unless the Required Lenders otherwise
consent, cause each of its Domestic Subsidiaries and Canadian Subsidiaries
formed or acquired after the date of this Agreement in accordance
80
with the terms of this Agreement to become a Loan Party by executing the Joinder
Agreement set forth as Exhibit E hereto (the "Joinder Agreement"). Upon
execution and delivery thereof, each such Person (i) shall automatically become
a Loan Guarantor hereunder and thereupon shall have all of the rights, benefits,
duties, and obligations in such capacity under the Loan Documents and (ii) will
grant Liens to the Collateral Agent, for the benefit of the Collateral Agent and
the Lenders, in any property of such Loan Party which constitutes Collateral,
including any parcel of real property valued in excess of $1,000,000 which is
located in the U.S. or Canada and owned by any Loan Party. Notwithstanding the
foregoing, the guaranty of each Canadian Subsidiary Guarantor shall be limited
to a guaranty of the Canadian Obligations.
(a) Each Loan Party will cause (i) 100% of the issued and
outstanding Equity Interests of each of its Domestic Subsidiaries and (ii) 65%
of the issued and outstanding Equity Interests of each Foreign Subsidiary
directly owned by the Parent, the U.S. Borrower or any U.S. Subsidiary
Guarantor, to be subject at all times to a first priority, perfected Lien
(subject to Permitted Liens) in favor of the Collateral Agent pursuant to the
terms and conditions of the Loan Documents or other security documents as the
Agents shall reasonably request. Each Canadian Subsidiary and Canadian Borrower
will cause 100% of its issued and outstanding Equity Interests to be subject at
all times to a first priority perfected Lien (subject to Permitted Liens) in
favor of the Collateral Agent pursuant to the terms and conditions of the Loan
Documents or other security documents as the Agent shall reasonably request in
order to secure the Canadian Obligations.
(b) Without limiting the foregoing, each Loan Party will, and will
cause each of the Subsidiaries which is required to become a Loan Party pursuant
to the terms of this Agreement to, execute and deliver, or cause to be executed
and delivered, to the Agents, as applicable, such documents and agreements, and
will take or cause to be taken such actions as the Agents may, from time to
time, reasonably request to carry out the terms and conditions of this Agreement
and the other Loan Documents, including but not limited to all items of the type
required by Section 4.01 (as applicable).
(c) [Intentionally Deleted].
(d) To the extent permitted hereunder, if any Loan Party proposes to
acquire a fee ownership interest in real property valued in excess of $1,000,000
and located in Canada or the United States after the date of this Agreement, it
shall contemporaneously with such acquisition provide to the Agents a mortgage
or deed of trust granting the Collateral Agent a first priority Lien on such
real property (subject to Permitted Liens), mortgage title insurance commitment,
real property survey, local counsel opinion(s), and, if required by the Agents,
and flood insurance, and such other documents, instruments or agreements
reasonably requested by the Agents, in each case, in form and substance
reasonably satisfactory to the Agents provided that any such Lien granted by a
Subsidiary that is not a U.S. Subsidiary Guarantor shall only service the
Canadian Obligations.
SECTION 5.12. Depository Banks. Each Loan Party will maintain Bank
of America, N.A. as such Loan Party's principal depository bank, including for
the maintenance of operating, administrative, cash management, collection
activity, and other deposit accounts for the conduct of its business.
SECTION 5.13. Collateral Access Agreements. Within forty-five (45)
days following the Effective Date, each Loan Party shall use commercially
reasonable efforts to deliver to the Agents each Collateral Access Agreement
required to be provided pursuant to Section 4.13 of the Security Agreement.
ARTICLE VI
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VI. NEGATIVE COVENANTS
Until the Revolving Commitments have expired or terminated and the
principal of and interest on each Loan and all fees and other Obligations (other
than contingent indemnification Obligations to the extent no claims giving rise
thereto have been asserted) payable hereunder have been paid in full and all
Letters of Credit have expired, terminated or secured in accordance with Section
2.07(j)(ii) hereof, each Loan Party executing this Agreement covenants and
agrees, jointly and severally with all of the Loan Parties, with the Lenders
that:
SECTION 6.01. Indebtedness. No Loan Party will, nor will it permit
any of its Subsidiaries to, create, incur or suffer to exist any Indebtedness,
except:
(a) the Secured Obligations;
(b) Indebtedness existing on the date hereof and set forth in
Schedule 6.01 and extensions, renewals and replacements of any such Indebtedness
in accordance with clause (g) hereof;
(c) Unsecured Indebtedness of any (i) Loan Party, excluding the
Parent, to any other wholly-owned Loan Party and (ii) Subsidiary that is not a
Loan Party to any other Subsidiary that is not a Loan Party;
(d) Guarantees by a Loan Party of Indebtedness of (i) any other Loan
Party (other than the Parent) if the primary obligation is expressly permitted
elsewhere in this Section 6.01 and (ii) any Subsidiary that is not a Loan Party
if the primary obligation is expressly permitted elsewhere in this Section 6.01
and if the credit extension creating any such Guarantee is permitted under
Section 6.04(l)(v);
(e) Indebtedness of any Loan Party incurred to finance the
acquisition, construction or improvement of any fixed or capital assets,
including Capital Lease Obligations and any Indebtedness assumed in connection
with the acquisition of any such assets or secured by a Lien on any such assets
prior to the acquisition thereof, and extensions, renewals and replacements of
any such Indebtedness in accordance with clause (g) hereof; provided that (i)
such Indebtedness is incurred prior to or within 90 days after such acquisition
or the completion of such construction or improvement and (ii) the aggregate
principal amount of Indebtedness permitted by this clause (e) and (f) shall not
exceed $100,000,000 at any time outstanding;
(f) purchase money Indebtedness incurred in connection with the
purchase of any Equipment (as such term is defined in the Security Agreement);
provided that, the amount of such purchase money Indebtedness shall be limited
to an amount not in excess of the purchase price of such Equipment and the
aggregate of all such purchase money Indebtedness incurred at any time, together
with the Indebtedness incurred pursuant to clause (e) hereof shall not exceed
$100,000,000;
(g) Indebtedness which represents an extension, refinancing, or
renewal of any of the Indebtedness described in clauses (b) and (e) hereof;
provided that, (i) the principal amount or interest rate of such Indebtedness is
not increased, (ii) any Liens securing such Indebtedness are not extended to any
additional property of any Loan Party, (iii) no Loan Party that is not
originally obligated with respect to repayment of such Indebtedness is required
to become obligated with respect thereto, (iv) such extension, refinancing or
renewal does not result in a shortening of the average weighted maturity of the
Indebtedness so extended, refinanced or renewed, (v) the terms of any such
extension, refinancing, or renewal are not less favorable to the obligor
thereunder than the original terms of such Indebtedness and (iv) if the
Indebtedness that is refinanced, renewed, or extended was subordinated in right
of payment to the Secured Obligations, then the terms and conditions of the
refinancing, renewal, or extension
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Indebtedness must include subordination terms and conditions that are at least
as favorable to the Administrative Agent and the Lenders as those that were
applicable to the refinanced, renewed, or extended Indebtedness;
(h) Indebtedness of any Person that becomes a Subsidiary after the
date hereof; provided that (i) such Indebtedness exists at the time such Person
becomes a Subsidiary and is not created in contemplation of or in connection
with such Person becoming a Subsidiary and (ii) the aggregate principal amount
of Indebtedness permitted by this clause (h) shall not exceed $10,000,000 at any
time outstanding;
(i) Guarantees by a Subsidiary that is not a Loan Party of
Indebtedness of another Subsidiary that is not a Loan Party;
(j) 1999 Subordinated Notes and the 2002 Senior Unsecured Notes and
any refinancings, refundings, renewals or extensions thereof (without increasing
the principal amount or shortening the maturity thereof); provided that the Net
Cash Proceeds of 2002 Senior Unsecured Notes issued after the first $400,000,000
of Senior Unsecured Notes issued shall be used to refinance other Senior
Unsecured Notes or applied in accordance with Section 2.12;
(k) Indebtedness under the Second Lien Credit Agreement and the
Second Lien Collateral Documents and guaranty thereof in an aggregate principal
amount not to exceed $150,000,000 at any time outstanding;
(l) Indebtedness of Borrowers' Foreign Subsidiaries (excluding the
Canadian Subsidiaries) (i) to Persons other than Parent and its Subsidiaries, in
a principal amount not to exceed $75,000,000 at any time outstanding in the
aggregate for all such Indebtedness and (ii) to the Loan Parties to the extent
the credit extension creating any such Indebtedness is permitted under Section
6.04(l)(v);
(m) the Trust Preferred Stock Debentures;
(n) Swap Obligations entered into in the ordinary course of business
and not for speculative purposes;
(o) Indebtedness of any Borrower or of any of its Subsidiaries
incurred to finance insurance premiums and owing to the applicable insurance
company providing the applicable policy;
(p) Indebtedness of any Borrower or of any of its Subsidiaries in
connection with industrial revenue bonds and similar financings issued for the
benefit of Parent and its Subsidiaries;
(q) Additional Indebtedness of any Borrower or of any of its
Subsidiaries in an aggregate principal amount of all Indebtedness permitted by
this clause (q) not to exceed $10,000,000 at any time;
(r) Indebtedness arising from deposit accounts or from the honoring
by a bank or other financial situations of a check, draft or similar instrument
inadvertently (except in the case of daylight overdrafts) drawn against
insufficient funds in the ordinary course of business; provided, however, that
such Indebtedness is extinguished within 10 Business Days of incurrence;
(s) Indebtedness consisting of promissory notes issued to current or
former directors, consultants, managers, officer and employees or their spouses
or estates of any of its Subsidiaries to
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purchase or redeem Capital Stock of Holdings issued to such director,
consultants, manager, officer or employee in the ordinary course of business;
and
(t) Indebtedness in respect of netting services and otherwise in
connection with deposits accounts in the ordinary course of business.
SECTION 6.02. Liens. No Loan Party will, nor will it permit any
Subsidiary to, create, incur, assume or permit to exist any Lien on any property
or asset now owned or hereafter acquired by it, or assign or sell any income or
revenues (including accounts receivable) or rights in respect of any thereof,
except:
(a) Account factoring arrangements by Foreign Subsidiaries (other
than the Canadian Subsidiaries) permitted under Section 6.03;
(b) Liens on the Collateral securing obligations under the Second
Lien Credit Agreement and the Second Lien Collateral Documents and guaranty
thereof, provided that the same are subject to and subordinated to the Liens
granted pursuant to the Loan Documents in accordance with the terms of the
Intercreditor Agreement;
(c) any Lien on any property or asset of any Loan Party or any of
its Subsidiaries existing on the date hereof and set forth in Schedule 6.02;
provided that (i) such Lien shall not apply to any other property or asset of
such Loan Party or Subsidiary and (ii) such Lien shall secure only those
obligations which it secures on the date hereof and permitted extensions,
renewals and replacements thereof that do not increase the outstanding principal
amount thereof;
(d) Liens securing purchase money Indebtedness of a Loan Party
permitted pursuant to clause (f) of Section 6.01; provided that, such Liens
attach only to the property which was purchased with the proceeds of such
purchase money Indebtedness;
(e) Liens on fixed or capital assets acquired, constructed or
improved by a Loan Party or any of its Subsidiaries; provided that (i) such
security interests secure Indebtedness permitted by clause (e) of Section 6.01,
(ii) such security interests and the Indebtedness secured thereby are incurred
prior to or within 90 days after such acquisition or the completion of such
construction or improvement, (iii) the Indebtedness secured thereby does not
exceed 100% of the cost of acquiring, constructing or improving such fixed or
capital assets and (iv) such security interests shall not apply to any other
property or assets of such Loan Party or Subsidiary;
(f) any Lien existing on any property or asset prior to the
acquisition thereof by a Loan Party or existing on any property or asset of any
Person that becomes a Loan Party after the date hereof prior to the time such
Person becomes a Loan Party; provided that (i) such Lien is not created in
contemplation of or in connection with such acquisition or such Person becoming
a Loan Party, as the case may be, (ii) such Lien shall not apply to any other
property or assets of the Loan Party and (iii) such Lien shall secure only those
obligations which it secures on the date of such acquisition or the date such
Person becomes a Loan Party, as the case may be;
(g) any interest or title of a lessor or licensor under any lease,
sublease, license or sublicense entered into by the Borrowers or any Subsidiary
in the ordinary course of its business and covering only those assets subject to
such lease or sublease, as applicable and any Liens encumbering such lessor's or
sublessor's interest in such lease or sublease granted by such lessor or
sublessor to secure such lessor's or sublessor's Indebtedness to any lender or
creditor;
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(h) Liens arising in the ordinary course of business solely by
virtue of any statutory or common law provision relating to banker's liens,
rights of set-off or similar rights and remedies in favor of the applicable
depository bank as to such deposit accounts;
(i) Liens securing Indebtedness permitted under 6.01(l); provided
that such Liens solely secure assets owned by a Subsidiary other than a Canadian
Subsidiary or a Domestic Subsidiary;
(j) Liens securing the Indebtedness permitted under Section 6.01(o);
provided that (i) such Liens are limited to securing only the unpaid premiums
under the applicable insurance policy and (ii) such Liens only encumber the
proceeds of the applicable insurance policy;
(k) Liens arising solely by virtue of any statutory or common law
provision relating to banker's liens, rights of set-off or similar rights and
remedies as to deposit accounts or other funds maintained with a creditor
depository institution; provided that (i) such deposit account is not a
dedicated Collateral Account (except to the extent provided in the applicable
Deposit Account Control Agreement) and is not subject to restrictions against
access by Parent or any Subsidiary in excess of those set forth by regulations
promulgated by the Federal Reserve Board or (ii) such deposit account is not
intended by Parent or such Subsidiary to provide collateral to the depository
institution;
(l) Liens (excluding Liens on Inventory and Accounts) not otherwise
permitted hereunder which secure obligations not exceeding in the aggregate the
Dollar Equivalent of $10,000,000;
(m) liens attaching solely to cash earnest money deposits in
connection with an investment permitted hereunder;
(n) precautionary UCC filings;
(o) inchoate Liens imposed by law for Taxes that are not yet due or
are being contested in compliance with Section 5.04;
(p) carriers', warehousemen's, mechanics', materialmen's,
repairmen's and other like Liens arising in the ordinary course of business and
securing obligations that are not overdue by more than 30 days or are being
contested in compliance with Section 5.04;
(q) pledges and deposits made in the ordinary course of business in
compliance with workers' compensation, unemployment insurance and other social
security laws or regulations;
(r) deposits to secure the performance of bids, trade contracts,
leases, statutory obligations, surety and appeal bonds, performance bonds and
other obligations of a like nature, in each case in the ordinary course of
business;
(s) judgment liens in respect of judgments that do not constitute an
Event of Default under clause (k) of Article VII;
(t) easements, zoning restrictions, rights-of-way and similar
encumbrances on real property imposed by law or arising in the ordinary course
of business that do not secure any monetary obligations and do not materially
detract from the value of the affected property or materially interfere with the
ordinary conduct of business of the Borrowers or any Subsidiary;
(u) discounts or forgiveness of accounts receivables to the extent
permitted pursuant to Section 6.03(a)(9); and
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(v) Liens in favor of the Collateral Agent granted pursuant to any
Loan Document.
Notwithstanding the foregoing, none of the Liens permitted pursuant to this
Section 6.02 (except clause (b) hereof) may at any time attach to any Loan
Party's (1) Accounts, other than those permitted under clauses (o), (s) and (v)
hereof and (2) Inventory, other than those permitted under clauses (o), (p), (s)
and (v) of the definition of Permitted Lien.
SECTION 6.03. Fundamental Changes. (a) No Loan Party will, nor will
it permit any Subsidiary to, merge into or consolidate with any other Person, or
permit any other Person to merge into or consolidate with it, or issue, sell,
transfer, lease or otherwise dispose of (in one transaction or in a series of
related transactions) any of its assets, or any of the stock of any of its
Subsidiaries (in each case, whether now owned or hereafter acquired), or
liquidate or dissolve, or amend or terminate its articles of incorporation,
charter, certificate of formation, by-laws, operating, management or partnership
agreement or other organizational document that is adverse to the Lenders,
except that, if at the time thereof and immediately after giving effect thereto
no Event of Default shall have occurred and be continuing (i) any Subsidiary of
the Borrowers may merge into the U.S. Borrower in a transaction in which the
U.S. Borrower is the surviving corporation, any Subsidiary that is not a U.S.
Subsidiary Guarantor of the Borrowers may merge into the Canadian Borrower in a
transaction in which the Canadian Borrower is the surviving corporation and any
Canadian Guarantor may amalgamate with any other Canadian Guarantor provided
such new Canadian Subsidiary will take all actions required under Section 5.11,
(ii) any Loan Party (other than the Parent, the Borrowers or a U.S. Subsidiary
Guarantor) may merge into any Loan Party in a transaction in which the surviving
entity is a wholly-owned Loan Party or any U.S. Subsidiary Guarantor may merge
into any Loan Party in a transaction in which the surviving entity is the U.S.
Borrower or a wholly-owned U.S. Subsidiary Guarantor, (iii) any Loan Party may
sell, transfer, lease or otherwise dispose of (1) its assets to any wholly-owned
Loan Party; provided that (a) the Borrowers shall not sell, transfer, lease or
otherwise dispose of their assets, except to a U.S. Subsidiary Guarantor or the
U.S. Borrower and (b) the U.S. Subsidiary Guarantors shall not sell, transfer,
lease or otherwise dispose of their assets except to another wholly-owned U.S.
Subsidiary Guarantor or the U.S. Borrower; (2) Inventory in the ordinary course
of business, (3) equipment, other fixed assets, intellectual property and
technology rights that is obsolete, surplus, negligible, worn out or no longer
useful in its business, and the licensing or abandonment of technology or
intellectual property rights, all in the ordinary course of business; (4) other
assets (other than sales primarily of Accounts and notes receivable) not
otherwise permitted hereunder which are made for fair market value; provided
that at the time of any such disposition, (i) no Default or Event of Default
shall exist or shall result therefrom and (ii) the aggregate value of all asset
so sold by U.S. Borrower and its Subsidiaries after the date hereof shall not
exceed 15% of consolidated total assets of U.S. Borrower and its Subsidiaries
after giving effect to such sale; (5) assets to the extent that such assets are
exchanged for credit against the purchase price of productive assets, or the
proceeds of such sale are reasonably promptly applied to the purchase price of
productive assets; (6) Account factoring arrangements by Foreign Subsidiaries
(other than the Canadian Subsidiaries) to the extent permitted under Section
6.01(l) (assuming for purposes hereof, that such Account factoring arrangements
constitute Indebtedness); (7) dispositions set forth on Schedule 6.03; (8) the
leasing or subleasing of real property in the ordinary course of business; (9)
discounts or forgiveness of account receivables in the ordinary course of
business or in connection with collection or compromise thereof; provided the
account debtor is not an Affiliate; and (10) equipment and other fixed assets to
Subsidiaries that are not Loan Parties which have an aggregate net book value
(in respect of all equipment and fixed assets sold, transferred, leased or
otherwise disposed of) not exceeding $3,000,000 in any fiscal year; (iv) any
Subsidiary that is not a Loan Party may merge into another Subsidiary that is
not a Loan Party and sell, transfer, lease and otherwise dispose of assets to
another Subsidiary that is not a Loan Party; (v) any Subsidiary of a Loan Party
that is not a Loan Party may liquidate or dissolve if the Borrowers determine in
good faith that such liquidation or dissolution is in the best interests of the
Borrowers and is not materially disadvantageous to the Lenders; provided that
any such merger involving
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a Person that is not a wholly owned Subsidiary immediately prior to such merger
shall not be permitted unless also permitted by Section 6.04 and (vi) any
Subsidiary that is a Loan Party may liquidate or dissolve so long as all assets
(if any) of such Subsidiary are distributed to a Loan Party. The Net Cash
Proceeds of any sale or disposition permitted pursuant to this Section 6.03
(other than pursuant to clause (a)(iii)(2) of this Section 6.03) shall be
delivered to the Administrative Agent as required by Section 2.12 and applied to
the Obligations as set forth therein.
(b) No Loan Party will, nor will it permit any of its Subsidiaries
to, engage in any business other than businesses of the type conducted by the
Borrower and its Subsidiaries on the date of execution of this Agreement and
businesses reasonably related thereto.
SECTION 6.04. Investments, Loans, Advances, Guarantees and
Acquisitions. No Loan Party will, nor will it permit any of its Subsidiaries to,
purchase, hold or acquire (including pursuant to any merger with any Person that
was not a Loan Party and a wholly owned Subsidiary prior to such merger) any
capital stock, evidences of indebtedness or other securities (including any
option, warrant or other right to acquire any of the foregoing) of, make or
permit to exist any loans or advances to, Guarantee any obligations of, or make
or permit to exist any investment or any other interest in, any other Person, or
purchase or otherwise acquire (in one transaction or a series of related
transactions) any assets of any other Person constituting a business unit
(whether through purchase of assets, merger or otherwise), except:
(a) Permitted Investments, subject to control agreements (with
respect to Loan Parties) in favor of the Collateral Agent for the benefit of the
Collateral Agent and the Lenders or otherwise subject to a perfected security
interest in favor of the Collateral Agent for the benefit of the Collateral
Agent and the Lenders;
(b) investments by the Loan Parties existing on the date hereof in
the capital stock of its Subsidiaries;
(c) loans or advances made by a Loan Party or any Subsidiaries to
any other Loan Party;
(d) Guarantees constituting Indebtedness permitted by Section 6.01;
(e) other investments in existence on the date of this Agreement and
described in Schedule 6.04;
(f) subject to Sections 4.2(a) and 4.4 of the Security Agreement,
notes payable, or stock or other securities issued by Account Debtors to a Loan
Party pursuant to negotiated agreements with respect to settlement of such
Account Debtor's Accounts in the ordinary course of business, consistent with
past practices;
(g) extensions of credit in the nature of accounts receivable or
notes receivable arising from the sale or lease of goods or services in the
ordinary course of business;
(h) investments by the Borrowers or their Subsidiaries in tooling so
long as the amount by which such investments exceed the amount of the
contractual obligations to reimburse the Borrowers or such Subsidiaries for such
tooling is not greater than $20,000,000 at any time;
(i) investments (including through issuances of a Guarantee) in (A)
Joint Ventures not resulting in an Acquisition and (B) minority interests;
provided that (I) the aggregate amount of all
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outstanding investments under this clause (i) made by Parent or any of its
Subsidiaries (the amount of such investment to be determined as of the date of
such investment) shall not exceed 15% of the consolidated net worth of Parent
and (II) both immediately before and immediately after giving effect to such
investment, no Default or Event of Default shall exist or result therefrom and
so long as Availability exceeds $50,000,000 immediately before and immediately
after giving effect to any Borrowing to fund such investment;
(j) investments made in order to consummate Acquisitions; provided
that (i) no Default or Event of Default exist or will result therefrom, (ii) the
board of directors or equivalent governing body of the acquiree or the parent of
the acquiree shall have given its written consent to or approval of such
Acquisition, and (iii) Availability exceeds $50,000,000 immediately before and
immediately after giving effect to any Borrowing to fund such Acquisition;
(k) other advances, loans, guarantees or extensions of credit
(excluding advances, loans, guarantees or extensions of credit of the types
described in clause (i) above) in the ordinary course of business by Parent or
any Subsidiary not at any time exceeding in the aggregate 5% of the consolidated
net worth of Parent; provided that (i) at the time of such advance, guarantee or
extension of credit and immediately after giving effect thereto, no Default or
Event of Default shall exist or result therefrom and (ii) at any time when the
aggregate of all such advances, loans, guarantees and extensions of credit
exceeds $5,000,000, so long as Availability exceeds $50,000,000 immediately
before and immediately after giving effect to any such advance, loan, guaranty
or extension of credit and any related Borrowing;
(l) (i) investments by Parent in any Subsidiary, (ii) investments by
any Subsidiary of Parent in U.S. Borrower or any U.S. Subsidiary Guarantor,
(iii) investments by Canadian Borrower or any Canadian Subsidiary in Canadian
Borrower or any other Canadian Subsidiary, (iv) investments by any Subsidiary
that is not a Canadian Subsidiary or a U.S. Subsidiary in any Subsidiary and (v)
investments by any Loan Party in any Subsidiary that is not a Loan Party
(including, without limitation, loans, Guarantees, extensions of credit and
capital contributions and whether made in the form of cash or equipment and
other fixed assets of any Loan Party) in an aggregate amount at any time
outstanding not exceeding $75,000,000 (excluding any such investments made at a
time when the Cash Availability Trigger, immediately before and immediately
after giving effect to such investment, exceeds $125,000,000);
(m) pledges or deposits required in the ordinary course of business
in connection with workmen's compensation, unemployment insurance and other
social security legislation;
(n) Investments constituting earnest money required in connection
with an Acquisition;
(o) the Borrower and their Subsidiaries may organize new
Subsidiaries so long as they comply with Section 5.11 hereof;
(p) any Loan Party may capitalize or forgive any Indebtedness owed
to them by any other Loan Party;
(q) any Loan Party may cancel, forgive, set-off, or accept
prepayments with respect to debt, other obligations and/or equity securities in
the ordinary course of business and to the extent not otherwise prohibited by
the terms of this Agreement (including, without limitation, Section 6.05
hereof).
(r) customary indemnification obligations incurred in connection
with acquisitions or asset dispositions to the extent otherwise permitted
hereunder; and
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(s) Guarantees of surety obligations in the ordinary course of
business and any guarantee of the performance of contractual obligations (other
than the payment of money) of other Persons so long as such guaranty arises in
the ordinary course of business.
SECTION 6.05. Restricted Payments. No Loan Party will, nor will it
permit any of its Subsidiaries to, declare or make, or agree to pay or make,
directly or indirectly, any Restricted Payment, except:
(a) the Loan Parties may declare and pay dividends with respect to
its Equity Interests payable solely in additional shares of its common stock and
the Trust Preferred Stock Trust may make a distribution of Parent's Common Stock
pursuant to the terms of the Trust Preferred Securities or the Trust Preferred
Stock Debentures,
(b) Subsidiaries of the Loan Parties (other than the Borrower) may
declare and pay dividends ratably with respect to their Equity Interests;
(c) the Borrower may make Restricted Payments pursuant to and in
accordance with stock option plans, bonus plans or other benefit plans for
management or employees of the Borrower and its Subsidiaries;
(d) Parent and U.S. Borrower may purchase, redeem or otherwise
acquire shares of its common stock or warrants or options to acquire any such
shares with the proceeds received from the substantially concurrent issuance of
new shares of its common stock not otherwise required to be applied to a
prepayment under Section 2.12;
(e) U.S. Borrower may make dividends to Parent so that Parent may
purchase or otherwise acquire shares of its common stock in connection with its
employee stock purchase or bonus plans in the ordinary course of business and in
a manner consistent with its past practices;
(f) U.S. Borrower may (i) pay dividends to or on behalf of Parent
under a tax sharing arrangement reasonably acceptable to the Administrative
Agent and disclosed to the Lenders so long as such tax sharing arrangement is
based on the method prescribed in Treas. Reg. Section 1.1502-33(d)(2)(ii) and on
the method prescribed in Treasury Reg. Section 1.552-1(a)(2) (and using 100% as
the percentage described in Treas. Reg. Section 1.1502-33(d)(2)(b)), (ii) pay
dividends to or on behalf of Parent in the amount of Parent's franchise taxes
and audit fees incurred in the ordinary course of Parent's business, and (iii)
pay dividends to or on behalf of Parent to repurchase the capital stock of
Parent owned by members of management who is no longer employed so long as the
aggregate amount of such repurchases in any fiscal year does not exceed
$1,000,000 and no Event of Default then exists or would arise therefrom;
(g) so long as no Default or Event of Default exists or would result
therefrom, U.S. Parent may make dividends to Parent so that Parent may make
scheduled (as of the Effective Date) payments on and required under the Trust
Preferred Stock Debentures and permit the Trust Preferred Stock Trust to make
corresponding distributions on the Trust Preferred Securities; and
(h) U.S. Borrower or Parent may make Restricted Payments to the
extent permitted pursuant to Section 6.08(b) hereof.
SECTION 6.06. Transactions with Affiliates. No Loan Party will, nor
will it permit any of its Subsidiaries to, sell, lease or otherwise transfer any
property or assets to, or purchase, lease or otherwise acquire any property or
assets from, or otherwise engage in any other transactions with, any of
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its Affiliates, except (a) in the ordinary course of business at prices and on
terms and conditions not less favorable to the Loan Party or such Subsidiary
than could be obtained on an arm's-length basis from unrelated third parties,
(b) transactions between or among a Loan Party and another Loan Party that is a
wholly owned Subsidiary of a Loan Party not involving any other Affiliate and
(c) any Restricted Payment permitted by Section 6.05.
SECTION 6.07. Restrictive Agreements. No Loan Party will, nor will
it permit any of its Subsidiaries to, directly or indirectly, enter into, incur
or permit to exist any agreement or other arrangement that prohibits, restricts
or imposes any condition upon (a) the ability of such Loan Party or any of its
Subsidiaries to create, incur or permit to exist any Lien upon any of its
property or assets, or (b) the ability of any Subsidiary of a Loan Party to pay
dividends or other distributions with respect to any shares of its capital stock
or to make or repay loans or advances to the Borrowers or any other Subsidiary
of the Borrower or to Guarantee Indebtedness of the Borrowers or any other
Subsidiary of the Borrowers; provided that (i) the foregoing shall not apply to
restrictions and conditions imposed by law or by this Agreement, (ii) the
foregoing shall not apply to restrictions and conditions existing on the date
hereof identified on Schedule 6.07 (but shall apply to any extension or renewal
of, or any amendment or modification expanding the scope of, any such
restriction or condition), (iii) the foregoing shall not apply to customary
restrictions and conditions contained in agreements relating to the sale of a
Subsidiary pending such sale, provided such restrictions and conditions apply
only to the Subsidiary that is to be sold and such sale is permitted hereunder,
(iv) clause (a) of the foregoing shall not apply to restrictions or conditions
imposed by any agreement relating to secured Indebtedness permitted by this
Agreement if such restrictions or conditions apply only to the property or
assets securing such Indebtedness, (v) clause (a) of the foregoing shall not
apply to customary provisions in leases restricting the assignment thereof; (vi)
the foregoing shall not apply to restrictions in the 2002 Senior Indenture
similar to those in effect on the Effective Date; (vii) the foregoing shall not
apply to the Second Lien Credit Agreement and the Second Lien Collateral
Documents as in effect on the date hereof and (viii) the foregoing shall not
apply to agreements evidencing Indebtedness permitted pursuant to Section
6.01(l) to the extent such restrictions relate solely to Foreign Subsidiaries
(other than Canadian Subsidiaries) and their assets.
SECTION 6.08. Prepayment of Indebtedness; Subordinated Indebtedness;
Second Lien Obligations. (a) No Loan Party shall, directly or indirectly,
voluntarily purchase, redeem, defease or prepay any principal of, premium, if
any, interest or other amount payable in respect of any Indebtedness prior to
its scheduled maturity, other than (i) the Secured Obligations; (ii)
Indebtedness secured by a Permitted Lien if the asset securing such Indebtedness
has been sold or otherwise disposed of in accordance with Section 6.03 or is the
subject of a casualty or condemnation; (iii) Indebtedness permitted by Section
6.01(g) upon any refinancing thereof in accordance therewith; (iv) Indebtedness
permitted by Section 6.01(c); and (v) subject to Section 6.08(b).
(b) No Loan Party shall make any payment of principal of or interest
on, or acquire, redeem or otherwise retire, or make any other distribution in
respect of, any of the Subordinated Indebtedness, Senior Unsecured Notes or
Second Lien Obligation, except that:
(i) so long as no Default or Event of Default exists
that would result therefrom, U.S. Borrower or Parent may (a) make any
interest payment on the 2002 Senior Unsecured Notes, (b) make any other
payment, acquisition, redemption or other retirement or distribution on
the 2002 Senior Unsecured Notes from proceeds of equity issued by Parent
and not required to be applied otherwise under this Agreement, (c) make
any other payments, acquisitions, redemptions or other retirements or
distributions on the 2002 Senior Unsecured Notes(when taken together with
any such payments, acquisitions, redemptions or other retirements or
distributions permitted under Section 6.08(b)(ii)(c) hereof) not in excess
of $100,000,000 in the aggregate for all such payments and (d) may
refinance 2002 Senior
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Unsecured Notes with the proceeds of other 2002 Senior Unsecured Notes
permitted to be incurred under Section 6.01(g) and (j);
(ii) so long as no Default or Event of Default exists or
would result therefrom and such payment is not blocked under the
subordination provisions of the applicable agreement governing the 1999
Subordinated Notes, U.S. Borrower or Parent may (a) make any interest
payment on the 1999 Subordinated Notes, (b) may refinance the 1999
Subordinated Notes to the extent permitted under Section 6.01(g) and (j)
and (c) make any other payments, acquisitions, redemptions or other
retirements or distributions on the 1999 Subordinated Notes (when taken
together with any such payments, acquisitions, redemptions or other
retirements or distributions permitted under Section 6.08(b)(i)(c) hereof)
not in excess of $100,000,000 in the aggregate for all such payments;
(iii) so long as no Default or Event of Default exists
or would result therefrom and such payment is not blocked under the
subordination provisions of the applicable agreement governing such
Subordinated Indebtedness, U.S. Borrower or Parent may (a) make any
interest payment on Subordinated Indebtedness and (b) any other payment on
such Subordinated Indebtedness from proceeds of equity issued by Parent
and not required to be applied otherwise under this Agreement; and
(iv) subject to any restrictions set forth in the
Intercreditor Agreement, U.S. Borrower or Parent may (a) make any interest
and other payment (other than any payment in respect of principal) on the
Second Lien Obligations and (b) make any other payments, acquisitions,
redemptions or other retirements or distributions on the Second Lien
Obligations so long as, in the case of this clause (b), no Default or
Event of Default exists or would result therefrom and so long as
Availability exceeds $75,000,000 immediately before and immediately after
giving effect to such payment, acquisition, redemption, other retirement
or distribution and any related Borrowing.
(c) No Loan Party shall make any material amendment, waiver,
consent, supplement or other modification to the 2002 Senior Indenture, 2002
Senior Unsecured Notes, the Second Lien Credit Agreement or the Second Lien
Collateral Documents, 1999 Subordinated Notes, 1999 Subordinated Indenture or
the indenture, note or other agreement evidencing or governing any Subordinated
Indebtedness which would be adverse in any material respect to the Lenders
without the prior written consent of the Required Lenders.
SECTION 6.09. Change in Fiscal Periods. No Loan Party shall permit
its fiscal year to end on a day other than December 31 or change its method of
determining fiscal quarters.
SECTION 6.10. Trust Preferred Stock Transactions. No Loan Party
shall make any amendment to or other modification of the Trust Preferred Stock
Debentures, the Trust Preferred Securities or the Trust Preferred Stock
Indenture, which is adverse in any material respect to the interest of the
Lenders.
SECTION 6.11. Capital Expenditures. The Parent and its Subsidiaries
shall not make or commit to make Capital Expenditures, except Capital
Expenditures of Parent and its Subsidiaries not exceeding $85,000,000 per fiscal
year; provided, that (a) such amount, if not so expended in the fiscal year for
which it is permitted, may be carried over for expenditure in the next
succeeding fiscal year and (b) Capital Expenditures made pursuant to this
Section 6.11 during any fiscal year shall be deemed made, first, in respect of
amounts permitted for such fiscal year as provided above and, second, in respect
of amounts carried over from the prior fiscal year pursuant to clause (a) above.
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SECTION 6.12. Fixed Charge Coverage Ratio. At any time after the
Cash Availability Trigger is less than $35,000,000 for a period of five (5)
consecutive Business Days, the Borrowers will not permit the Fixed Charge
Coverage Ratio, determined as of the end of each of its fiscal quarters for the
then most-recently ended four fiscal quarters, to be less than 1.10 to 1.0;
provided that the Fixed Charge Coverage Ratio shall no longer be required to be
satisfied (until such subsequent time as the Cash Availability Trigger is less
than $35,000,000 for a period of five (5) consecutive Business Days) if the Cash
Availability Trigger is greater than or equal to $35,000,000 for a period of
sixty (60) consecutive days.
SECTION 6.13. Parent. The Parent shall not engage in any trade or
business, or own any assets (other than the Equity Interests of its
Subsidiaries) or incur any Indebtedness (other than the Secured Obligations, the
guarantee of the Second Lien Obligations, other Guarantees by Parent to the
extent otherwise permitted hereunder and pledges of its assets pursuant to the
terms of the Second Lien Collateral Documents (and subject to the Intercreditor
Agreement)).
ARTICLE VII
VII. EVENTS OF DEFAULT
If any of the following events ("Events of Default") shall occur:
(a) the Borrowers shall fail to pay any principal of any Loan or any
reimbursement obligation in respect of any LC Disbursement when and as the same
shall become due and payable, whether at the due date thereof or at a date fixed
for prepayment thereof or otherwise;
(b) the Borrowers shall fail to pay any interest on any Loan or any
fee or any other amount (other than an amount referred to in clause (a) of this
Article) payable under this Agreement, when and as the same shall become due and
payable, and such failure shall continue unremedied for a period of five days;
(c) any representation or warranty made by or on behalf of any Loan
Party or any Subsidiary of any Loan Party in this Agreement or any Loan Document
or any amendment or modification thereof or waiver thereunder, or in any written
report, certificate, financial statement or other document furnished pursuant to
or in connection with this Agreement or any Loan Document or any amendment or
modification thereof or waiver thereunder, shall prove to have been materially
incorrect when made or deemed made;
(d) any Loan Party shall fail to observe or perform any covenant,
condition or agreement contained in Section 5.02(a), 5.03 (with respect to a
Loan Party's existence) or 5.08 or in Article VI;
(e) any Loan Party shall fail to observe or perform any covenant,
condition or agreement contained in this Agreement (other than those which
constitute a default under another Section of this Article) or any other Loan
Document (beyond any grace period therein provided), and such failure shall
continue unremedied for a period of (i) 5 Business Days after the earlier of
notice thereof from the Administrative Agent (which notice will be given at the
request of any Lender) and knowledge of such breach by a Financial Officer or
other senior officer if such breach relates to terms or provisions of Section
5.01, 5.02 (other than Section 5.02(a)), 5.03 through 5.07 and 5.09 and 5.10 of
this Agreement or (ii) 30 days after the earlier of knowledge of such breach by
a Financial Officer or other senior officer or notice thereof from the
Administrative Agent (which notice will be given at the request of any Lender)
if such breach relates to terms or provisions of any other Section of this
Agreement;
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(f) [Intentionally Deleted];
(g) any event or condition occurs that results in any Material
Indebtedness becoming due prior to its scheduled maturity or that enables or
permits (with or without the giving of notice, the lapse of time or both) the
holder or holders of any Material Indebtedness or any trustee or agent on its or
their behalf to cause any Material Indebtedness to become due, or to require the
prepayment, repurchase, redemption or defeasance thereof, prior to its scheduled
maturity; provided that this clause (g) shall not apply to secured Indebtedness
(other than the Second Lien Obligations) that becomes due as a result of the
voluntary sale or transfer of the property or assets securing such Indebtedness;
(h) an involuntary proceeding shall be commenced or an involuntary
petition shall be filed seeking (i) liquidation, reorganization or other relief
in respect of a Borrower, the Parent or any Material Subsidiary or its debts, or
of a substantial part of its assets, under any Federal, state or foreign
bankruptcy, insolvency, receivership or similar law now or hereafter in effect
or (ii) the appointment of a receiver, trustee, custodian, sequestrator,
conservator or similar official for any a Borrower, the Parent or any Material
Subsidiary or for a substantial part of its assets, and, in any such case, such
proceeding or petition shall continue undismissed for 60 days or an order or
decree approving or ordering any of the foregoing shall be entered;
(i) any Borrower, the Parent or any Material Subsidiary shall (i)
voluntarily commence any proceeding or file any petition seeking liquidation,
reorganization or other relief under any Federal, state or foreign bankruptcy,
insolvency, receivership or similar law now or hereafter in effect, (ii) consent
to the institution of, or fail to contest in a timely and appropriate manner,
any proceeding or petition described in clause (h) of this Article, (iii) apply
for or consent to the appointment of a receiver, trustee, custodian,
sequestrator, conservator or similar official for such Loan Party or Subsidiary
of any Loan Party or for a substantial part of its assets, (iv) file an answer
admitting the material allegations of a petition filed against it in any such
proceeding, (v) make a general assignment for the benefit of creditors or (vi)
take any action for the purpose of effecting any of the foregoing;
(j) any Loan Party or any Subsidiary of any Loan Party shall become
unable, admit in writing its inability or fail generally to pay its debts as
they become due;
(k) one or more judgments for the payment of money in an aggregate
amount in excess of $20,000,000 (to the extent not covered by independent
third-party insurance from a financially sound insurer as to which the insurer
does not dispute coverage) shall be rendered against any Loan Party, any
Subsidiary of any Loan Party or any combination thereof and the same shall
remain undischarged for a period of 30 consecutive days during which execution
shall not be effectively stayed, or any action shall be legally taken by a
judgment creditor to attach or levy upon any assets of any Loan Party or any
Subsidiary of any Loan Party to enforce any such judgment or any Loan Party or
any Subsidiary of any Loan Party shall fail within 30 days to discharge one or
more non-monetary judgments or orders which, individually or in the aggregate,
could reasonably be expected to have a Material Adverse Effect, which judgments
or orders, in any such case, are not stayed on appeal or otherwise being
appropriately contested in good faith by proper proceedings diligently pursued;
(l) an ERISA Event shall have occurred, when taken together with all
other ERISA Events that have occurred, could reasonably be expected to result in
a Material Adverse Effect (other than in accordance with its terms or as
permitted hereunder);
(m) a Change in Control shall occur;
(n) [Intentionally Deleted];
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(o) the Loan Guaranty shall fail to remain in full force or effect
or any action shall be taken to discontinue or to assert the invalidity or
unenforceability of the Loan Guaranty, or any Loan Guarantor shall deny that it
has any further liability under the Loan Guaranty to which it is a party, or
shall give notice to such effect;
(p) any Collateral Document shall for any reason fail to create a
valid and perfected first priority security interest in any Collateral purported
to be covered thereby, except as permitted by the terms of any Collateral
Document, or any Collateral Document shall fail to remain in full force or
effect or any action shall be taken to discontinue or to assert the invalidity
or unenforceability of any Collateral Document; or
(q) any material provision of any Loan Document for any reason
ceases to be valid, binding and enforceable (except to the extent covered in (h)
or (i) above) in accordance with its terms (or any Loan Party shall challenge
the enforceability of any Loan Document or shall assert in writing, or engage in
any action or inaction based on any such assertion, that any provision of any of
the Loan Documents has ceased to be or otherwise is not valid, binding and
enforceable in accordance with its terms).
then, and in every such event (other than an event with respect to the Borrower
described in clause (h) or (i) of this Article), and at any time thereafter
during the continuance of such event, the Administrative Agent may, and at the
request of the Required Lenders shall, by written notice to the Borrower, take
either or both of the following actions, at the same or different times: (i)
terminate the Revolving Commitments, and thereupon the Revolving Commitments
shall terminate immediately, and (ii) declare the Loans then outstanding to be
due and payable in whole (or in part, in which case any principal not so
declared to be due and payable may thereafter be declared to be due and
payable), and thereupon the principal of the Loans so declared to be due and
payable, together with accrued interest thereon and all fees and other
obligations of the Borrower accrued hereunder, shall become due and payable
immediately, without presentment, demand, protest or other notice of any kind,
all of which are hereby waived by the Borrower; and in case of any event with
respect to the Borrower described in clause (h) or (i) of this Article, the
Revolving Commitments shall automatically terminate and the principal of the
Loans then outstanding, together with accrued interest thereon and all fees and
other obligations of the Borrower accrued hereunder, shall automatically become
due and payable, without presentment, demand, protest or other notice of any
kind, all of which are hereby waived by the Borrower to the extent permitted by
applicable law. Upon the occurrence and the continuance of an Event of Default,
the Administrative Agent at the request of the Required Lenders shall, increase
the rate of interest applicable to the Loans and other Obligations as set forth
in this Agreement and exercise any rights and remedies provided to the
Administrative Agent under the Loan Documents or at law or equity, including all
remedies provided under the UCC.
ARTICLE VIII
VIII. THE AGENTS
Each of the Lenders and the Issuing Bank hereby irrevocably appoints
the Agents as its agent and authorizes the Agents to take such actions on its
behalf and to exercise such powers as are delegated to such Agent by the terms
of the Loan Documents, together with such actions and powers as are reasonably
incidental thereto. In particular, the Agents are entitled to enter on behalf of
each of the Lenders and the Issuing Bank into any Collateral Document.
The banks serving as Agents hereunder shall have the same rights and
powers in its capacity as a Lender as any other Lender and may exercise the same
as though it were not an Agent, and
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such bank and its Affiliates may accept deposits from, lend money to and
generally engage in any kind of business with the Loan Parties or any Subsidiary
of a Loan Party or other Affiliate thereof as if it were not an Agent hereunder.
Neither Agent shall have any duties or obligations except those
expressly set forth in the Loan Documents. Without limiting the generality of
the foregoing, (a) neither Agent shall be subject to any fiduciary or other
implied duties, regardless of whether an Event of Default has occurred and is
continuing, (b) neither Agent shall have any duty to take any discretionary
action or exercise any discretionary powers, except discretionary rights and
powers expressly contemplated by the Loan Documents that the Agents are required
to exercise in writing as directed by the Required Lenders (or such other number
or percentage of the Lenders as shall be necessary under the circumstances as
provided in Section 9.02), and (c) except as expressly set forth in the Loan
Documents, neither Agent shall have any duty to disclose, and shall not be
liable for the failure to disclose, any information relating to any Loan Party
or any of its Subsidiaries that is communicated to or obtained by the bank
serving as an Agent or any of such bank's Affiliates in any capacity. Neither
Agent shall be liable for any action taken or not taken by it with the consent
or at the request of the Required Lenders (or such other number or percentage of
the Lenders as shall be necessary under the circumstances as provided in Section
9.02) or in the absence of its own gross negligence or willful misconduct. The
Agents shall be deemed not to have knowledge of any Event of Default unless and
until written notice thereof is given to the Agents by the Borrowers or a
Lender, and neither Agent shall be responsible for or have any duty to ascertain
or inquire into (i) any statement, warranty or representation made in or in
connection with any Loan Document, (ii) the contents of any certificate, report
or other document delivered hereunder or in connection with any Loan Document,
(iii) the performance or observance of any of the covenants, agreements or other
terms or conditions set forth in any Loan Document, (iv) the validity,
enforceability, effectiveness or genuineness of any Loan Document or any other
agreement, instrument or document, or (v) the satisfaction of any condition set
forth in Article IV or elsewhere in any Loan Document, other than to confirm
receipt of items expressly required to be delivered to any Agent.
The Agents shall be entitled to rely upon, and shall not incur any
liability for relying upon, any notice, request, certificate, consent,
statement, instrument, document or other writing believed by it to be genuine
and to have been signed or sent by the proper Person. The Agents also may rely
upon any statement made to it orally or by telephone and believed by it to be
made by the proper Person, and shall not incur any liability for relying
thereon. The Agents may consult with legal counsel (who may be counsel for the
Borrowers), independent accountants and other experts selected by it (such
selection to be made by Agents in their reasonable discretion), and shall not be
liable for any action taken or not taken by it in accordance with the advice of
any such counsel, accountants or experts.
The Agents may perform any and all its duties and exercise its
rights and powers by or through any one or more sub-agents appointed by such
Agent (such appointment to be made by Agents in their reasonable discretion).
The Agents and any such sub-agent may perform any and all its duties and
exercise its rights and powers through their respective Related Parties. The
exculpatory provisions of the preceding paragraphs shall apply to any such
sub-agent and to the Related Parties of such Agent and any such sub-agent, and
shall apply to their respective activities in connection with the syndication of
the credit facilities provided for herein as well as activities as Agent.
Subject to the appointment and acceptance of a successor Agent as
provided in this paragraph, either Agent, as applicable, may resign at any time
by notifying the Lenders, the Issuing Bank and the Borrowers. Upon any such
resignation, the Required Lenders shall have the right to appoint a successor
which successor Agent shall (unless an Event of Default under Section 7(a), (b)
or (h)-(j) shall have occurred and be continuing) be subject to approval by the
Borrowers which approval shall not be unreasonably withheld or delayed. If no
successor shall have been so appointed by the Required Lenders
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and shall have accepted such appointment within 30 days after the retiring Agent
gives notice of its resignation, then the retiring Agent may, on behalf of the
Lenders and the Issuing Bank, appoint a successor Agent with the approval of the
Borrowers (which approval shall not be unreasonably withheld or delayed and
which shall not be required upon the occurrence of an Event of Default under
Sections 7(a), (b) or (h)-(j)) which shall be a commercial bank or an Affiliate
of any such commercial bank. Upon the acceptance of its appointment as an Agent
hereunder by a successor, such successor shall succeed to and become vested with
all the rights, powers, privileges and duties of the retiring Agent, and the
retiring Agent shall be discharged from its duties and obligations hereunder.
The fees payable by the Borrowers to a successor Agent shall be the same as
those payable to its predecessor unless otherwise agreed between the Borrowers
and such successor. After the Agent's resignation hereunder, the provisions of
this Article and Section 9.03 shall continue in effect for the benefit of such
retiring Agent, its sub-agents and their respective Related Parties in respect
of any actions taken or omitted to be taken by any of them while it was acting
as Agent.
Each Lender acknowledges that it has, independently and without
reliance upon any Agent or any other Lender and based on such documents and
information as it has deemed appropriate, made its own credit analysis and
decision to enter into this Agreement. Each Lender also acknowledges that it
will, independently and without reliance upon any Agent or any other Lender and
based on such documents and information as it shall from time to time deem
appropriate, continue to make its own decisions in taking or not taking action
under or based upon this Agreement, any other Loan Document or related agreement
or any document furnished hereunder or thereunder.
Neither Agent shall have any obligation to any of the Lenders to
ensure that the Collateral exists, is owned by the Loan Parties, is cared for,
protected or insured, is unencumbered by others, or that the Liens granted to
the Collateral Agent therein have been properly, sufficiently or lawfully
created, perfected, protected or enforced, or that such Liens are entitled to
any particular priority, it being understood and agreed that in respect of the
Collateral, or any act, omission, or event related thereto, the Agents may act
in any manner they may deem appropriate, in their sole discretion given such
Agent's own interest in the Collateral in its capacity as one of the Lenders and
that the Agents shall have no other duty or liability whatsoever to any Lender
as to any of the foregoing.
Each Lender hereby appoints each other Lender as its agent for the
purpose of perfecting Liens, for the benefit of the Collateral Agent and the
Lenders, in assets which, in accordance with Article 9 of the UCC or any other
applicable law can be perfected only by possession. Should any Lender (other
than the Collateral Agent) obtain possession of any such Collateral, such Lender
shall notify the Agents thereof, and, promptly upon the Administrative Agent's
request therefor shall deliver such Collateral to the Collateral Agent or
otherwise deal with such Collateral in accordance with the Administrative
Agent's instructions.
Each Lender hereby agrees that (a) it is deemed to have requested
that the Administrative Agent furnish such Lender, promptly after it becomes
available, a copy of each Report prepared by or on behalf of the Administrative
Agent; (b) the Administrative Agent (i) makes no representation or warranty,
express or implied, as to the completeness or accuracy of any Report or any of
the information contained therein or any inaccuracy or omission contained in or
relating to a Report, and (ii) shall not be liable for any information contained
in any Report; (c) the Reports are not comprehensive audits or examinations, and
that the Administrative Agent or any other party performing any audit or
examination will inspect only specific information regarding the Loan Parties
and will rely significantly upon the Loan Parties' books and records, as well as
on representations of the Loan Parties' personnel and that the Administrative
Agent undertakes no obligation to update, correct or supplement the Reports; (d)
it will keep all Reports confidential and strictly for its internal use, not
share the Report with any Loan Party and not distribute any Report to any other
Person except as otherwise permitted pursuant to this Agreement;
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and (e) without limiting the generality of any other indemnification provision
contained in this Agreement, it will pay and protect, and indemnify, defend, and
hold the Administrative Agent and any such other Person preparing a Report
harmless from and against, the claims, actions, proceedings, damages, costs,
expenses, and other amounts (including reasonable attorney fees) incurred by the
Administrative Agent and any such other Person preparing a Report as the direct
or indirect result of any third parties who might obtain all or part of any
Report through the indemnifying Lender.
Each of the Lenders hereby acknowledges that it has received and
reviewed the Intercreditor Agreement and agrees to be bound by the terms
thereof. Each Lender (and each person that becomes a Lender hereunder pursuant
to Section 9.04) hereby (i) acknowledges that JPMorgan Chase Bank, N.A. and Bank
of America, N.A. are acting under the Intercreditor Agreement in multiple
capacities as the Administrative Agent (as applicable), the Collateral Agent (as
applicable), the Second Lien Agent and the collateral agent under the Second
Lien Credit Agreement (as applicable) and Second Lien Collateral Documents (as
applicable) and (ii) waives any conflict of interest, now contemplated or
arising hereafter, in connection therewith and agrees not to assert against
JPMorgan Chase Bank, N.A. or Bank of America, N.A. any claims, causes of action,
damages or liabilities of whatever kind or nature relating thereto. Each Lender
(and each person that becomes a Lender hereunder pursuant to Section 9.04)
hereby authorizes and directs JPMorgan Chase Bank, N.A. and Bank of America,
N.A. to enter into the Intercreditor Agreement on behalf of such Lender and
agrees that each of JPMorgan Chase Bank, N.A. and Bank of America, N.A., in
their various capacities thereunder, may take such actions on its behalf as is
contemplated by the terms of the Intercreditor Agreement.
Each of the Lenders hereby acknowledges that it has received and
reviewed the Post-Closing Agreement and agrees to be bound by the terms thereof.
The Syndication Agent shall have no duties or responsibilities
hereunder in its capacity as such.
ARTICLE IX
IX. MISCELLANEOUS
SECTION 9.01. Notices. (a) Except in the case of notices and other
communications expressly permitted to be given by telephone (and subject to
paragraph (b) below), all notices and other communications provided for herein
shall be in writing and shall be delivered by hand or overnight courier service,
mailed by certified or registered mail or sent by facsimile, as follows:
(i) if to any Loan Party, to the U.S. Borrower at:
2791 Research Drive
Rochester Hills, MI 48309
Attention: Glenn Dong
Facsimile No: (248) 299-7518
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(ii) if to the Administrative Agent, the Issuing Bank or the
Swingline Lender, to JPMorgan Chase Bank, N.A. at:
JPMorgan Chase Bank
270 Park Avenue, 4th Floor
New York, NY 10017
Attention: Karen May Sharf
Facsimile No: (212) 270-5127
(iii) if to the Collateral Agent, the Issuing Bank to Bank of
America, N.A. at:
Bank of America Business Credit
20800 Swenson Drive, Suite 350
Waukesha, WI 53187
Attention: Wendy Lewis, Brian Conole
Facsimile No: (262) 798-4882
(iv) if to any other Lender, to it at its address or
facsimile number set forth in its Administrative
Questionnaire.
All such notices and other communications (i) sent by hand or overnight courier
service, or mailed by certified or registered mail, shall be deemed to have been
given when received or (ii) sent by facsimile shall be deemed to have been given
when sent, provided that if not given during normal business hours for the
recipient, shall be deemed to have been given at the opening of business on the
next Business Day for the recipient.
(b) Notices and other communications to the Lenders hereunder may be
delivered or furnished by electronic communications (including e-mail and
internet or intranet websites) pursuant to procedures approved by the Agents);
provided that the foregoing shall not apply to notices pursuant to Article II or
to compliance and no Event of Default certificates delivered pursuant to Section
5.01(d) unless otherwise agreed by the Administrative Agent and the applicable
Lender. The Agents or the Borrowers (on behalf of the Loan Parties) may, in
their discretion, agree to accept notices and other communications to them
hereunder by electronic communications pursuant to procedures approved by them;
provided that approval of such procedures may be limited to particular notices
or communications. All such notices and other communications (i) sent to an
e-mail address shall be deemed received upon the sender's receipt of an
acknowledgement from the intended recipient (such as by the "return receipt
requested" function, as available, return e-mail or other written
acknowledgement), provided that if not given during the normal business hours of
the recipient, such notice or communication shall be deemed to have been given
at the opening of business on the next Business Day for the recipient, and (ii)
posted to an Internet or intranet website shall be deemed received upon the
deemed receipt by the intended recipient at its e-mail address as described in
the foregoing clause (b)(i) of notification that such notice or communication is
available and identifying the website address therefor.
(c) Any party hereto may change its address or facsimile number for
notices and other communications hereunder by notice to the other parties
hereto.
SECTION 9.02. Waivers; Amendments. (a) No failure or delay by the
Agents, the Issuing Bank or any Lender in exercising any right or power
hereunder or under any other Loan Document shall operate as a waiver thereof,
nor shall any single or partial exercise of any such right or power, or any
abandonment or discontinuance of steps to enforce such a right or power,
preclude any
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other or further exercise thereof or the exercise of any other right or power.
The rights and remedies of the Agents, the Issuing Bank and the Lenders
hereunder and under any other Loan Document are cumulative and are not exclusive
of any rights or remedies that they would otherwise have. No waiver of any
provision of any Loan Document or consent to any departure by any Loan Party
therefrom shall in any event be effective unless the same shall be permitted by
paragraph (b) of this Section, and then such waiver or consent shall be
effective only in the specific instance and for the purpose for which given.
Without limiting the generality of the foregoing, the making of a Loan or
issuance of a Letter of Credit shall not be construed as a waiver of any Event
of Default, regardless of whether any Agent, any Lender or the Issuing Bank may
have had notice or knowledge of such Event of Default at the time.
(b) Neither this Agreement nor any other Loan Document nor any
provision hereof or thereof may be waived, amended or modified except (i) in the
case of this Agreement, pursuant to an agreement or agreements in writing
entered into by the Borrowers and the Required Lenders or, (ii) in the case of
any other Loan Document, pursuant to an agreement or agreements in writing
entered into by the Administrative Agent and, if applicable the Collateral Agent
and the Loan Party or Loan Parties that are parties thereto, with the consent of
the Required Lenders; provided that no such agreement shall (i) increase the
Revolving Commitment of any Lender without the written consent of each Lender
directly affected thereby (provided that the Administrative Agent may make
Protective Advances as set forth in Section 2.05), (ii) reduce or forgive the
principal amount of any Loan or LC Disbursement or reduce the rate of interest
thereon, or reduce or forgive any interest or fees payable hereunder, without
the written consent of each Lender directly affected thereby, (iii) postpone the
maturity of any Loan, or any scheduled date of payment of the principal amount
of any Loan or LC Disbursement, the extension of the time period set forth in
Section 2.07(c)(ii) hereof, or any date for the payment of any interest, fees or
other Obligations payable hereunder, or reduce the amount of, waive or excuse
any such payment, or postpone the scheduled date of expiration of any
Commitment, without the written consent of each Lender directly affected
thereby, (iv) change Section 2.19(b) or (d) or Section 2.06(g) in a manner that
would alter the manner in which payments are shared, without the written consent
of each Lender, (v) increase the advance rates set forth in the definition of
U.S. Borrowing Base or Canadian Borrowing Base or amend the definition of
"Adjusted Available Canadian Inventory," "Adjusted Available U.S. Inventory,"
"Eligible U.S. Accounts," "Eligible U.S. Inventory," "Eligible U.S. Equipment,"
"Eligible U.S. Real Property," "Canadian Eligible Accounts," "Canadian Eligible
Inventory," "Canadian Eligible Equipment," "Canadian Eligible Real Estate,"
"Reserves", "Rent Reserves," "Canadian Priority Payables Reserves," "Canadian
Inventory Reserves," "U.S. Inventory Reserves," "Canadian Dilution Reserves" or
"U.S. Dilution Reserves" which in any such case has the effect of increasing
U.S. Availability or Canadian Availability, without the written consent of the
Supermajority Lenders, (vi) change any of the provisions of this Section or the
definition of "Required Lenders", "Supermajority Lenders" or any other provision
of any Loan Document specifying the number or percentage of Lenders (or Lenders
of any Class) required to waive, amend or modify any rights thereunder or make
any determination or grant any consent thereunder, without the written consent
of each Lender, (vii) release any Loan Guarantor from its obligation under its
Loan Guaranty (except as otherwise permitted herein or in the other Loan
Documents), without the written consent of each Lender, (viii) except as
provided in clauses (d) and (e) of this Section or in any Collateral Document,
release or subordinate the Liens granted to Collateral Agent, for the benefit of
the Lenders, in all or substantially all of the Collateral, without the written
consent of each Lender, or (ix) consent to the assignment, delegation or other
transfer by any Loan Party of any of its rights or obligations under this
Agreement or any other Loan Document; provided further that no such agreement
shall amend, modify or otherwise affect the rights or duties of the Agents, the
Issuing Bank or the Swingline Lender under Article VIII or otherwise hereunder
without the prior written consent of such Agent, the Issuing Bank or the
Swingline Lender, as the case may be.
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(c) The Administrative Agent may (i) amend the Commitment Schedule
to reflect assignments entered into pursuant to Section 9.04, and (ii) waive
payment of the fee required under Section 9.04(b)(ii)(C).
(d) The Lenders hereby irrevocably authorize the Collateral Agent,
at its option and in its sole discretion, to release any guarantees or Liens
granted to the Collateral Agent by the Loan Parties on any Collateral or, in the
case of guarantees, executed by any Loan Party (i) upon the termination of the
Aggregate Commitment, payment and satisfaction in full in cash of all Secured
Obligations (other than Unliquidated Obligations), and the cash
collateralization of all the LC Exposure in a manner reasonably satisfactory to
the Administrative Agent, (ii) constituting property of a Loan Party being sold
or disposed of if the Loan Party disposing of such property or entity certifies
to the Administrative Agent that the sale or disposition is made in compliance
with the terms of this Agreement (and the Administrative Agent may rely
conclusively on any such certificate, without further inquiry), (iii)
constituting property in which no Loan Party has at any time during the term of
this Agreement owned any interest, (iv) constituting property leased to a Loan
Party under a lease which has expired or been terminated in a transaction
permitted under this Agreement, (v) owned by or leased to any Loan Party which
is subject to a purchase money security interest or which is a Capital Lease
Obligation, in either case, entered into by such Loan Party pursuant to Section
6.01, or (vi) as required to effect any sale or other disposition of such
Collateral or Loan Party in connection with any exercise of remedies of the
Agents and the Lenders pursuant to Article VII. Upon request by any Agent at any
time, the Lenders will confirm in writing the Collateral Agent's authority to
release any guarantees and Liens upon particular types or items of Collateral
pursuant to this Section 9.02. Except as provided in the preceding sentence, the
Collateral Agent will not release any guarantees or Liens on Collateral without
the prior written authorization of the Required Lenders; provided that, the
Collateral Agent may in its reasonable discretion, release its Liens on
immaterial Collateral without the prior written authorization of the Required
Lenders. The Lenders hereby irrevocably authorize each Agent to release any
guaranties or Liens granted to such Agent by any Foreign Subsidiary that is not
a Canadian Subsidiary (or in respect of the capital stock and equity securities
of any Foreign Subsidiary that is not a Canadian Subsidiary) pursuant to the
"Collateral Documents" or "Guaranties" delivered under the Existing Credit
Agreement, and the Agents and the Lenders acknowledge and agree that such
guaranties and Liens are hereby deemed released as of the Effective Date. The
Lenders hereby authorize each Agent to release each of the "French Borrower,"
the "German Borrower" and the "U.K. Borrower" from their respective
"Obligations" as "Borrowers" under the Existing Credit Agreement, and the Agents
and the Lenders acknowledge and agree that such "Obligations" of the "French
Borrower," the "German Borrower" and the "U.K. Borrower" are hereby deemed
released as of the Effective Date.
(e) Upon receipt by the Collateral Agent of any authorization
required pursuant to clause (d) of this Section 9.02 from the Required Lenders
of the Collateral Agent's authority to release any Liens upon particular types
or items of Collateral or guaranty of a Loan Party, and upon at least five
Business Days prior written request by the Loan Parties (or such shorter time as
agreed to by the Collateral Agent) , the Collateral Agent shall (and is hereby
irrevocably authorized by the Lenders to) execute such documents as may be
necessary to evidence the release of its Liens upon such Collateral or guaranty;
provided that, (i) the Collateral Agent shall not be required to execute any
such document on terms which, in the Collateral Agent's opinion, would expose
the Collateral Agent to liability or create any obligation or entail any
consequence other than the release of such Liens or guaranty without recourse or
warranty and (ii) such release shall not in any manner discharge, affect, or
impair the Obligations or any Liens or guarantees (other than those expressly
being released) upon (or obligations of the Loan Parties in respect of) all
interests retained by the Loan Parties, including the proceeds of any sale, all
of which shall continue to constitute part of the Collateral.
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(f) If, in connection with any proposed amendment, waiver or consent
requiring the consent of "each Lender" or "each Lender affected thereby," the
consent of the Required Lenders is obtained, but the consent of other necessary
Lenders is not obtained (any such Lender whose consent is necessary but not
obtained being referred to herein as a "Non-Consenting Lender"), then, so long
as the Administrative Agent and the Collateral Agent is not a Non-Consenting
Lender, the Borrower may elect to replace a Non-Consenting Lender as a Lender
party to this Agreement, provided that, concurrently with such replacement, (i)
another bank or other entity which is reasonably satisfactory to the Borrowers
and the Administrative Agent shall agree, as of such date, to purchase for cash
the Loans and other Obligations due to the Non-Consenting Lender pursuant to an
Assignment and Assumption and to become a Lender for all purposes under this
Agreement and to assume all obligations of the Non-Consenting Lender to be
terminated as of such date and to comply with the requirements of clause (b) of
Section 9.04, and (ii) the Borrowers shall pay to such Non-Consenting Lender in
same day funds on the day of such replacement (1) all interest, fees and other
amounts then accrued but unpaid to such Non-Consenting Lender by the Borrowers
hereunder to and including the date of termination, including without limitation
payments due to such Non-Consenting Lender under Sections 2.16 and 2.18, and (2)
an amount, if any, equal to the payment which would have been due to such Lender
on the day of such replacement under Section 2.17 had the Loans of such
Non-Consenting Lender been prepaid on such date rather than sold to the
replacement Lender.
SECTION 9.03. Expenses; Indemnity; Damage Waiver. (a) The Borrowers
shall pay (i) all reasonable out-of-pocket expenses incurred by the Agents and
their Affiliates, including the reasonable fees, charges and disbursements of
external counsel for the Agents, in connection with the syndication and
distribution (including, without limitation, via the internet or through a
service such as Intralinks) of the credit facilities provided for herein, the
preparation and administration of the Loan Documents or any amendments,
modifications or waivers of the provisions of the Loan Documents, (i) all
reasonable out-of-pocket expenses incurred by the Issuing Bank in connection
with the issuance, amendment, renewal or extension of any Letter of Credit or
any demand for payment thereunder and (ii) all out-of-pocket expenses incurred
by any Agent, the Issuing Bank or any Lender, including the reasonable fees,
charges and disbursements of any external counsel for any Agent, the Issuing
Bank or any Lender, in connection with the enforcement, collection or protection
of its rights in connection with the Loan Documents, including its rights under
this Section, or in connection with the Loans made or Letters of Credit issued
hereunder, including all such out-of-pocket expenses incurred during any
workout, restructuring or negotiations in respect of such Loans or Letters of
Credit. Expenses being reimbursed by the Borrowers under this Section include,
without limiting the generality of the foregoing but subject to the limitations
set forth in this Agreement, costs and expenses incurred in connection with:
(i) subject to Section 5.10, appraisals of all or any portion
of the Collateral (including travel, lodging, meals and other out of
pocket expenses of the appraisers);
(ii) field examinations and the preparation of Reports based
on the reasonable fees charged by a third party retained by the
Administrative Agent or the internally allocated fees for each Person
employed by the Administrative Agent with respect to each field
examination (which shall be a per day charge reasonably determined by the
Administrative Agent for that transaction), plus in each case
out-of-pocket travel, lodging, meals and other out of pocket expenses;
(iii) lien and title searches and title insurance;
(iv) taxes, fees and other charges for recording the
Mortgages, filing financing statements and continuations, and other
actions to perfect, protect, and continue the Collateral Agent's Liens;
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(v) sums paid or incurred to take any action required of any
Loan Party under the Loan Documents that, after notice thereof, such Loan
Party fails to pay or take; and
(vi) reasonable costs and expenses of forwarding loan
proceeds, collecting checks and other items of payment, and establishing
and maintaining the accounts and lock boxes, and costs and expenses of
preserving and protecting the Collateral.
All of the foregoing costs and expenses may be charged to the Borrowers as
Revolving Loans or to another deposit account, all as described in Section
2.19(c).
(b) The Borrowers shall indemnify each Agent, the Issuing Bank and
each Lender, and each Related Party of any of the foregoing Persons (each such
Person being called an "Indemnitee") against, and hold each Indemnitee harmless
from, any and all losses, claims, damages, penalties, liabilities and related
expenses, including the reasonable fees, charges and disbursements of any
counsel for any Indemnitee, incurred by or asserted against any Indemnitee
arising out of, in connection with, or as a result of (i) the execution or
delivery of the Loan Documents or any agreement or instrument contemplated
thereby, the performance by the parties hereto of their respective obligations
thereunder or the consummation of the Transactions or any other transactions
contemplated hereby, (ii) any Loan or Letter of Credit or the use of the
proceeds therefrom (including any refusal by the Issuing Bank to honor a demand
for payment under a Letter of Credit if the documents presented in connection
with such demand do not strictly comply with the terms of such Letter of
Credit), (iii) any actual or alleged presence or release of Hazardous Materials
on or from any property owned or operated by the Borrowers or any of their
Subsidiaries, or any Environmental Liability related in any way to the Borrowers
or any of their Subsidiaries, or (iv) any actual or prospective claim,
litigation, investigation or proceeding relating to any of the foregoing,
whether based on contract, tort or any other theory and regardless of whether
any Indemnitee is a party thereto; provided that the Borrowers shall not be
obligated to indemnify any Indemnitee to the extent that such losses, claims,
damages, penalties, liabilities or related expenses resulted from the gross
negligence or willful misconduct of such Indemnitee.
(c) To the extent that the Borrowers fail to pay any amount required
to be paid by it to the Agents, the Issuing Bank or the Swingline Lender under
paragraph (a) or (b) of this Section, each Lender severally agrees to pay to the
Agents, the Issuing Bank or the Swingline Lender, as the case may be, such
Lender's Canadian Applicable Percentage or U.S. Applicable Percentage (based
upon which of the Borrower failed to pay and, in the event both Borrowers failed
to pay, as allowed by the Agents in good faith) (determined as of the time that
the applicable unreimbursed expense or indemnity payment is sought) of such
unpaid amount; provided that the unreimbursed expense or indemnified loss,
claim, damage, penalty, liability or related expense, as the case may be, was
incurred by or asserted against the Agents, the Issuing Bank or the Swingline
Lender in its capacity as such.
(d) The relationship between any Loan Party on the one hand and the
Lenders, the Issuing Bank and the Agents on the other hand shall be solely that
of debtor and creditor. Neither the Agents, the Issuing Bank nor any Lender (i)
shall have any fiduciary responsibilities to any Loan Party or (ii) undertakes
any responsibility to any Loan Party to review or inform such Loan Party of any
matter in connection with any phase of any Loan Party's business or operations.
To the extent permitted by applicable law, no Loan Party shall assert, and each
hereby waives, any claim against any Indemnitee, on any theory of liability, for
special, indirect, consequential or punitive damages (as opposed to direct or
actual damages) arising out of, in connection with, or as a result of, this
Agreement or any agreement or instrument contemplated hereby, the Transactions,
any Loan or Letter of Credit or the use of the proceeds thereof.
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(e) All amounts due under this Section shall be payable promptly and
in any event within ten (10) days after written demand therefor.
SECTION 9.04. Successors and Assigns. (a) The provisions of this
Agreement shall be binding upon and inure to the benefit of the parties hereto
and their respective successors and assigns permitted hereby (including any
Affiliate of the Issuing Bank that issues any Letter of Credit), except that (i)
the Borrowers may not assign or otherwise transfer any of its rights or
obligations hereunder without the prior written consent of each Lender (and any
attempted assignment or transfer by the Borrowers without such consent shall be
null and void) and (ii) no Lender may assign or otherwise transfer its rights or
obligations hereunder except in accordance with this Section. Nothing in this
Agreement, expressed or implied, shall be construed to confer upon any Person
(other than the parties hereto, their respective successors and assigns
permitted hereby (including any Affiliate of the Issuing Bank that issues any
Letter of Credit), Participants (to the extent provided in paragraph (c) of this
Section) and, to the extent expressly contemplated hereby, the Related Parties
of each of the Agents, the Issuing Bank and the Lenders) any legal or equitable
right, remedy or claim under or by reason of this Agreement.
(b) (i) Subject to the conditions set forth in paragraph (b)(ii)
below, any Lender may assign to one or more assignees all or a portion of its
rights and obligations under this Agreement (including all or a portion of its
Revolving Commitment and the Loans at the time owing to it) with the prior
written consent (such consent not to be unreasonably withheld) of:
(A) the Borrowers, provided that no consent
of the Borrowers shall be required for an assignment to a
Lender, an Affiliate of a Lender, an Approved Fund or, if an
Event of Default has occurred and is continuing, any other
assignee;
(B) the Administrative Agent; and
(C) the Issuing Bank.
(ii) Assignments shall be subject to the following
additional conditions:
(A) except in the case of an assignment to a
Lender, an Affiliate of a Lender or an Approved Fund or an
assignment of the entire remaining amount of the assigning
Lender's Revolving Commitment or Loans of any Class, the
amount of the Revolving Commitment or Loans of the assigning
Lender subject to each such assignment (determined as of the
date the Assignment and Assumption with respect to such
assignment is delivered to the Administrative Agent) shall not
be less than $5,000,000 unless each of the Borrowers and the
Administrative Agent otherwise consent, provided that no such
consent of the Borrowers shall be required if an Event of
Default has occurred and is continuing;
(B) each partial assignment shall be made as
an assignment of a proportionate part of all the assigning
Lender's rights and obligations under this Agreement
(C) the parties to each assignment shall
execute and deliver to the Administrative Agent an Assignment
and Assumption, together with a processing and recordation fee
of $3,500;
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(D) the assignee, if it shall not be a
Lender, shall deliver to the Administrative Agent an
Administrative Questionnaire; and
(E) in the case of an assignment of a
Canadian Loan or any interest therein, the assignee is a
Canadian Resident Lender that makes the representation and
covenant contained in Section 9.20.
For the purposes of this Section 9.04(b), the term
"Approved Fund" has the following meaning:
"Approved Fund" means any Person (other than a natural person) that
is engaged in making, purchasing, holding or investing in bank loans and similar
extensions of credit in the ordinary course of its business and that is
administered or managed by (a) a Lender, (b) an Affiliate of a Lender or (c) an
entity or an Affiliate of an entity that administers or manages a Lender.
(v) Subject to acceptance and recording thereof pursuant
to paragraph (b)(iv) of this Section, from and after the effective date
specified in each Assignment and Assumption the assignee thereunder shall
be a party hereto and, to the extent of the interest assigned by such
Assignment and Assumption, have the rights and obligations of a Lender
under this Agreement, and the assigning Lender thereunder shall, to the
extent of the interest assigned by such Assignment and Assumption, be
released from its obligations under this Agreement (and, in the case of an
Assignment and Assumption covering all of the assigning Lender's rights
and obligations under this Agreement, such Lender shall cease to be a
party hereto but shall continue to be entitled to the benefits of Sections
2.16, 2.17, 2.18 and 9.03). Any assignment or transfer by a Lender of
rights or obligations under this Agreement that does not comply with this
Section 9.04 shall be treated for purposes of this Agreement as a sale by
such Lender of a participation in such rights and obligations in
accordance with paragraph (c) of this Section.
(vi) The Administrative Agent, acting for this purpose
as an agent of the Borrowers, shall maintain at one of its offices a copy
of each Assignment and Assumption delivered to it and a register for the
recordation of the names and addresses of the Lenders, and the Revolving
Commitment of, and principal amount of the Loans and LC Disbursements
owing to, each Lender pursuant to the terms hereof from time to time (the
"Register"). The entries in the Register shall be conclusive absent
manifest error, and the Borrowers, the Administrative Agent, the Issuing
Bank and the Lenders may treat each Person whose name is recorded in the
Register pursuant to the terms hereof as a Lender hereunder for all
purposes of this Agreement, notwithstanding notice to the contrary. The
Register shall be available for inspection by the Borrowers, the Issuing
Bank and any Lender, at any reasonable time and from time to time upon
reasonable prior notice.
(vii) Upon its receipt of a duly completed Assignment
and Assumption executed by an assigning Lender and an assignee, the
assignee's completed Administrative Questionnaire (unless the assignee
shall already be a Lender hereunder), the processing and recordation fee
referred to in paragraph (b) of this Section and any written consent to
such assignment required by paragraph (b) of this Section, the
Administrative Agent shall accept such Assignment and Assumption and
record the information contained therein in the Register; provided that if
either the assigning Lender or the assignee shall have failed to make any
payment required to be made by it pursuant to Section 2.06, 2.07(d) or
(e), 2.08(b), 2.19(d) or 9.03(c), the Administrative Agent shall have no
obligation to accept such Assignment and Assumption and record the
information therein in the Register unless and until such payment shall
have been made in full, together with all accrued interest thereon. No
assignment shall be
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effective for purposes of this Agreement unless it has been recorded in
the Register as provided in this paragraph.
(c) (i) Any Lender may, without the consent of the Borrowers, the
Administrative Agent, the Issuing Bank or the Swingline Lender, sell
participations to one or more banks or other entities (a "Participant") in all
or a portion of such Lender's rights and obligations under this Agreement
(including all or a portion of its Revolving Commitment and the Loans owing to
it); provided that (A) such Lender's obligations under this Agreement shall
remain unchanged, (B) such Lender shall remain solely responsible to the other
parties hereto for the performance of such obligations and (C) the Borrowers,
the Administrative Agent, the Issuing Bank and the other Lenders shall continue
to deal solely and directly with such Lender in connection with such Lender's
rights and obligations under this Agreement. Any agreement or instrument
pursuant to which a Lender sells such a participation shall provide that such
Lender shall retain the sole right to enforce this Agreement and to approve any
amendment, modification or waiver of any provision of this Agreement; provided
that such agreement or instrument may provide that such Lender will not, without
the consent of the Participant, agree to any amendment, modification or waiver
described in the first proviso to Section 9.02(b) that affects such Participant.
Subject to paragraph (c)(ii) of this Section, the Borrowers agree that each
Participant shall be entitled to the benefits of Sections 2.16, 2.17 and 2.18 to
the same extent as if it were a Lender and had acquired its interest by
assignment pursuant to and in compliance with paragraph (b) of this Section. To
the extent permitted by law, each Participant also shall be entitled to the
benefits of Section 9.08 as though it were a Lender, provided such Participant
agrees to be subject to Section 2.19(c) as though it were a Lender.
(ii) A Participant shall not be entitled to receive any
greater payment under Section 2.16 or 2.18 than the applicable Lender
would have been entitled to receive with respect to the participation sold
to such Participant, unless the sale of the participation to such
Participant is made with the Borrowers' prior written consent. A
Participant that would be a Foreign Lender if it were a Lender shall not
be entitled to the benefits of Section 2.18 unless the Borrowers are
notified in writing prior to the sale of the participation sold to such
Participant and such Participant agrees, for the benefit of the Borrowers,
to comply with Section 2.18(e) as though it were a Lender.
(d) Any Lender may at any time pledge or assign a security interest
in all or any portion of its rights under this Agreement to secure obligations
of such Lender, including without limitation any pledge or assignment to secure
obligations to a Federal Reserve Bank, and this Section shall not apply to any
such pledge or assignment of a security interest; provided that no such pledge
or assignment of a security interest shall release a Lender from any of its
obligations hereunder or substitute any such pledgee or assignee for such Lender
as a party hereto.
SECTION 9.05. Survival. All covenants, agreements, representations
and warranties made by the Loan Parties in the Loan Documents and in the
certificates or other instruments delivered in connection with or pursuant to
this Agreement or any other Loan Document shall be considered to have been
relied upon by the other parties hereto and shall survive the execution and
delivery of the Loan Documents and the making of any Loans and issuance of any
Letters of Credit, regardless of any investigation made by any such other party
or on its behalf and notwithstanding that any Agent, the Issuing Bank or any
Lender may have had notice or knowledge of any Event of Default or incorrect
representation or warranty at the time any credit is extended hereunder, and
shall continue in full force and effect as long as the principal of or any
accrued interest on any Loan or any fee or any other amount payable under this
Agreement is outstanding and unpaid or any Letter of Credit is outstanding and
so long as the Revolving Commitments have not expired or terminated. The
provisions of Sections 2.16, 2.17, 2.18 and 9.03 and Article VIII shall survive
and remain in full force and effect regardless of the
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consummation of the transactions contemplated hereby, the repayment of the
Loans, the expiration or termination of the Letters of Credit and the Revolving
Commitments or the termination of this Agreement or any provision hereof.
SECTION 9.06. Counterparts; Integration; Effectiveness. This
Agreement may be executed in counterparts (and by different parties hereto on
different counterparts), each of which shall constitute an original, but all of
which when taken together shall constitute a single contract. This Agreement,
the other Loan Documents and any separate letter agreements with respect to fees
payable to the Agents constitute the entire contract among the parties relating
to the subject matter hereof and supersede any and all previous agreements and
understandings, oral or written, relating to the subject matter hereof. Except
as provided in Section 4.01, this Agreement shall become effective when it shall
have been executed by the Agents and when the Administrative Agent shall have
received counterparts hereof which, when taken together, bear the signatures of
each of the other parties hereto, and thereafter shall be binding upon and inure
to the benefit of the parties hereto and their respective permitted successors
and assigns. Delivery of an executed counterpart of a signature page of this
Agreement by facsimile shall be effective as delivery of a manually executed
counterpart of this Agreement.
SECTION 9.07. Severability. Any provision of any Loan Document held
to be invalid, illegal or unenforceable in any jurisdiction shall, as to such
jurisdiction, be ineffective to the extent of such invalidity, illegality or
unenforceability without affecting the validity, legality and enforceability of
the remaining provisions thereof; and the invalidity of a particular provision
in a particular jurisdiction shall not invalidate such provision in any other
jurisdiction.
SECTION 9.08. Right of Setoff. If an Event of Default shall have
occurred and be continuing, however evidenced, each Lender and each of its
Affiliates is hereby authorized at any time and from time to time, to the
fullest extent permitted by law, to set off and apply any and all deposits
(general or special, time or demand, provisional or final but excluding any
deposits in trust accounts to the extent constituting trust assets) at any time
held and other obligations at any time owing by such Lender or Affiliate to or
for the credit or the account of the Borrowers or such Loan Guarantor against
any amount becoming due and payable by any Loan Party hereunder (whether at the
stated maturity, by acceleration or otherwise) of and all the Secured
Obligations held by such Lender, irrespective of whether or not such Lender
shall have made any demand under the Loan Documents and although such
obligations may be unmatured. The rights of each Lender under this Section are
in addition to other rights and remedies (including other rights of setoff)
which such Lender may have.
SECTION 9.09. Governing Law; Jurisdiction; Consent to Service of
Process. (a) The Loan Documents (other than those containing a contrary express
choice of law provision) shall be governed by and construed in accordance with
the laws of the State of New York, but giving effect to federal laws applicable
to national banks.
(b) Each Loan Party hereby irrevocably and unconditionally submits,
for itself and its property, to the nonexclusive jurisdiction of any U.S.
Federal or New York State court sitting in New York, New York in any action or
proceeding arising out of or relating to any Loan Documents, or for recognition
or enforcement of any judgment, and each of the parties hereto hereby
irrevocably and unconditionally agrees that all claims in respect of any such
action or proceeding may be heard and determined in such New York State or, to
the extent permitted by law, in such Federal court. Each of the parties hereto
agrees that a final judgment in any such action or proceeding shall be
conclusive and may be enforced in other jurisdictions by suit on the judgment or
in any other manner provided by law. Nothing in this Agreement or any other Loan
Document shall affect any right that any Agent, the Issuing Bank or any Lender
may otherwise have to bring any action or proceeding relating to this Agreement
or any other Loan Document against any Loan Party or its properties in the
courts of any jurisdiction.
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(c) Each Loan Party hereby irrevocably and unconditionally waives,
to the fullest extent it may legally and effectively do so, any objection which
it may now or hereafter have to the laying of venue of any suit, action or
proceeding arising out of or relating to this Agreement or any other Loan
Document in any court referred to in paragraph (b) of this Section. Each of the
parties hereto hereby irrevocably waives, to the fullest extent permitted by
law, the defense of an inconvenient forum to the maintenance of such action or
proceeding in any such court.
(d) Each party to this Agreement irrevocably consents to service of
process in the manner provided for notices in Section 9.01. Nothing in this
Agreement or any other Loan Document will affect the right of any party to this
Agreement to serve process in any other manner permitted by law.
SECTION 9.10. WAIVER OF JURY TRIAL. EACH PARTY HERETO HEREBY WAIVES,
TO THE FULLEST EXTENT PERMITTED BY APPLICABLE LAW, ANY RIGHT IT MAY HAVE TO A
TRIAL BY JURY IN ANY LEGAL PROCEEDING DIRECTLY OR INDIRECTLY ARISING OUT OF OR
RELATING TO THIS AGREEMENT, ANY OTHER LOAN DOCUMENT OR THE TRANSACTIONS
CONTEMPLATED THEREBY (WHETHER BASED ON CONTRACT, TORT OR ANY OTHER THEORY). EACH
PARTY HERETO (A) CERTIFIES THAT NO REPRESENTATIVE, AGENT OR ATTORNEY OF ANY
OTHER PARTY HAS REPRESENTED, EXPRESSLY OR OTHERWISE, THAT SUCH OTHER PARTY WOULD
NOT, IN THE EVENT OF LITIGATION, SEEK TO ENFORCE THE FOREGOING WAIVER AND (B)
ACKNOWLEDGES THAT IT AND THE OTHER PARTIES HERETO HAVE BEEN INDUCED TO ENTER
INTO THIS AGREEMENT BY, AMONG OTHER THINGS, THE MUTUAL WAIVERS AND
CERTIFICATIONS IN THIS SECTION.
SECTION 9.11. Headings. Article and Section headings and the Table
of Contents used herein are for convenience of reference only, are not part of
this Agreement and shall not affect the construction of, or be taken into
consideration in interpreting, this Agreement.
SECTION 9.12. Confidentiality. Each of the Agents, the Issuing Bank
and the Lenders agrees to maintain the confidentiality of the Information (as
defined below), except that Information may be disclosed (a) to its and its
Affiliates' directors, officers, employees and agents, including accountants,
legal counsel and other advisors (it being understood that the Persons to whom
such disclosure is made will be informed of the confidential nature of such
Information and shall agree to keep such Information confidential), (b) to the
extent requested by any regulatory authority having authority over the Agents,
Issuing Bank or any Lender, (c) to the extent required by Requirement of Law or
by any subpoena or similar legal process, (d) to any other party to this
Agreement, (e) in connection with the exercise of any remedies hereunder or any
suit, action or proceeding relating to this Agreement or any other Loan Document
or the enforcement of rights hereunder or thereunder, (f) subject to an
agreement containing provisions substantially the same as those of this Section,
to (i) any assignee of or Participant in, or any prospective assignee of or
Participant in, any of its rights or obligations under this Agreement or (ii)
any actual or prospective counterparty (or its advisors) to any swap or
derivative transaction relating to the Loan Parties and their obligations, (g)
with the prior consent of the Borrowers or (h) to the extent such Information
(i) becomes publicly available other than as a result of a breach of this
Section or (ii) becomes available to any Agent, the Issuing Bank or any Lender
on a nonconfidential basis from a source other than the Borrowers. For the
purposes of this Section, "Information" means all information received from the
Borrowers relating to the Borrowers or their business, other than any such
information that is available to any Agent, the Issuing Bank or any Lender on a
nonconfidential basis prior to disclosure by the Borrowers; provided that, in
the case of information received from the Borrowers after the date hereof, such
information is designated as confidential by the provider thereof. Any Person
required to maintain the confidentiality of Information as provided in this
Section shall be considered to have complied with its obligation to do so if
such Person has exercised the same degree of care to
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maintain the confidentiality of such Information as such Person would accord to
its own confidential information.
SECTION 9.13. Several Obligations; Nonreliance; Violation of Law.
The respective obligations of the Lenders hereunder are several and not joint
and the failure of any Lender to make any Loan or perform any of its obligations
hereunder shall not relieve any other Lender from any of its obligations
hereunder. Each Lender hereby represents that it is not relying on or looking to
any margin stock for the repayment of the Borrowings provided for herein.
Anything contained in this Agreement to the contrary notwithstanding, neither
the Issuing Bank nor any Lender shall be obligated to extend credit to the
Borrowers in violation of any Requirement of Law.
SECTION 9.14. USA Patriot Act. Each Lender that is subject to the
requirements of the USA Patriot Act (Title III of Pub. L. 107-56 (signed into
law October 26, 2001)) (the "Act") hereby notifies the Borrowers that pursuant
to the requirements of the Act, it is required to obtain, verify and record
information that identifies the Borrowers, which information includes the name
and address of the Borrowers and other information that will allow such Lender
to identify the Borrowers in accordance with the Act.
SECTION 9.15. Disclosure. Each Loan Party and each Lender hereby
acknowledges and agrees that the Agents and/or their Affiliates from time to
time may hold investments in, make other loans to or have other relationships
with any of the Loan Parties and their respective Affiliates.
SECTION 9.16. Execution of Loan Documents. The Lenders hereby
empower and authorize the Agents, on behalf of the Lenders, to execute and
deliver to the Loan Parties the other Loan Documents and all related agreements,
certificates, documents, or instruments as shall be necessary or appropriate to
effect the purposes of the Loan Documents. Each Lender agrees that any action
taken by the Agents, the Supermajority Lenders or the Required Lenders in
accordance with the terms of this Agreement or the other Loan Documents, and the
exercise by the Agents, the Supermajority Lenders or the Required Lenders of
their respective powers set forth therein or herein, together with such other
powers that are reasonably incidental thereto, shall be binding upon all of the
Lenders.
SECTION 9.17. Interest Rate Limitation. Notwithstanding anything
herein to the contrary, if at any time the interest rate applicable to any Loan,
together with all fees, charges and other amounts which are treated as interest
on such Loan under applicable law (collectively the "Charges"), shall exceed the
maximum lawful rate (the "Maximum Rate") which may be contracted for, charged,
taken, received or reserved by the Lender holding such Loan in accordance with
applicable law, the rate of interest payable in respect of such Loan hereunder,
together with all Charges payable in respect thereof, shall be limited to the
Maximum Rate and, to the extent lawful, the interest and Charges that would have
been payable in respect of such Loan but were not payable as a result of the
operation of this Section shall be cumulated and the interest and Charges
payable to such Lender in respect of other Loans or periods shall be increased
(but not above the Maximum Rate therefor) until such cumulated amount, together
with interest thereon at the Federal Funds Effective Rate to the date of
repayment, shall have been received by such Lender.
SECTION 9.18. Amendment and Restatement. This Agreement is an
amendment and restatement of the Existing Credit Agreement. All "Obligations"
under the Existing Credit Agreement and all Liens securing payment of
"Obligations" under the Existing Credit Agreement shall in all respects be
continuing and this Agreement shall not be deemed to evidence or result in a
novation or repayment and reborrowing of such "Obligations". This Agreement
shall supersede the Existing Credit Agreement. From and after the Effective
Date, this Agreement shall govern the terms of the "Obligations" under the
Existing Credit Agreement. To the extent not replaced by Loan Documents dated as
of the date of this
108
Agreement, any "Loan Documents" (as defined in the Existing Credit Agreement)
executed in connection with the Existing Credit Agreement (other than any such
Loan Document that is specifically terminated by the parties thereto) shall
continue to be effective, and all references in those prior Loan Documents to
the "Credit Agreement", the "Loan Agreement", the "Agreement" or words of like
import shall be deemed to refer to this Agreement without further amendment
thereof.
SECTION 9.19. Judgment Currency. If, for the purposes of obtaining
judgment in any court, it is necessary to convert a sum due hereunder or any
other Loan Document in one currency into another currency, the rate of exchange
used shall be that at which in accordance with normal banking procedures the
Administrative Agent could purchase the first currency with such other currency
on the Business Day proceeding that on which final judgment is given. The
obligation of each Borrower in respect of any such sum due from it to the
Administrative Agent hereunder or under any other Loan Document shall,
notwithstanding any judgment in a currency (the "Judgment Currency") other than
that in which such sum is denominated in accordance with the applicable
provisions of this Agreement (the "Agreement Currency"), be discharged only to
the extent that on the Business Day following receipt by the Administrative
Agent may in accordance with normal banking procedures purchase the Agreement
Currency with the Judgment Currency. If the amount of the Agreement Currency so
purchased is greater than the sum originally due to the Administrative Agent in
such currency, the Administrative Agent agrees to return the amount of any
excess to the applicable Borrower (or to any other Person who may be entitled
thereto under applicable law).
SECTION 9.20. Canadian Lenders. Each of the Canadian Lenders hereby
represents and warrants to the Canadian Borrower that it is, and covenants that
it will not take any affirmative action to cause it to cease to be, a Canadian
Resident Lender. Any Person who becomes a Canadian Lender (including, for
greater certainty, the Canadian Swingline Lender) or acquires an interest in any
Canadian Loan by way of assignment or otherwise, shall and shall be deemed to
make the representation, warranty and covenant set out in this Section 9.20 at
the time such Person becomes a Canadian Lender. The representations, covenants
and warranties contained in this Section 9.20 shall survive the termination of
this Agreement.
SECTION 9.21. Limitation. Notwithstanding any other terms of this
Agreement or any other Loan Document, (a) no Foreign Subsidiary shall be
obligated in respect of any Obligations of the Parent, the U.S. Borrower or any
U.S. Subsidiary Guarantor (a "U.S. Loan Party") unless such U.S. Loan Party is
an entity which is neither (i) a "United States shareholder" (as defined in
Section 951(b) of the Code) of such Foreign Subsidiary nor (ii) a corporation,
25% or more of the total combined voting power of which is owned (directly,
indirectly or constructively) by one or more United States shareholders or such
Foreign Subsidiary in the aggregate.
ARTICLE X
X. LOAN GUARANTY
SECTION 10.01. Guaranty. Each Loan Guarantor (other than a Canadian
Subsidiary Guarantor) hereby agrees that it is jointly and severally liable for,
and, as primary obligor and not merely as surety, absolutely and unconditionally
guarantees to the Lenders the prompt payment when due, whether at stated
maturity, upon acceleration or otherwise, and at all times thereafter, of the
Secured Obligations and all costs and expenses including, without limitation,
all court costs and reasonable attorneys' and paralegals' fees and expenses of
external counsel paid or incurred by the Agents, the Issuing Bank and the
Lenders in endeavoring to collect all or any part of the Secured Obligations
from, or in prosecuting any action against, the Borrowers, any Loan Guarantor or
any other guarantor of all or any part of the Secured Obligations. Each Canadian
Subsidiary Guarantor hereby agrees that it is jointly and
109
severally liable for, and, as primary obligor and not merely as surety,
absolutely and unconditionally guarantees to the Lenders the prompt payment when
due, whether at stated maturity, upon acceleration or otherwise, and at all
times thereafter, of the Secured Obligations solely to the extent owing by the
Canadian Borrower and all costs and expenses including, without limitation, all
court costs and attorneys' and paralegals' fees and expenses paid or incurred by
the Agents, the Issuing Bank and the Lenders in endeavoring to collect all or
any part of the Secured Obligations (solely to the extent owing by the Canadian
Borrower) from, or in prosecuting any action against, the Canadian Borrower or
any Canadian Subsidiary Guarantor of all or any part of the Secured Obligations
(solely to the extent owing by the Canadian Borrower) (such costs and expenses,
together with the costs and expenses set forth in the immediately preceding
sentence and the Secured Obligations, collectively the "Guaranteed
Obligations"). Each Loan Guarantor further agrees that the Guaranteed
Obligations guarantied by such Loan Guarantor may be extended or renewed in
whole or in part without notice to or further assent from it, and that it
remains bound upon its guarantee notwithstanding any such extension or renewal.
All terms of this Loan Guaranty apply to and may be enforced by or on behalf of
any domestic or foreign branch or Affiliate of any Lender that extended any
portion of the Guaranteed Obligations.
SECTION 10.02. Guaranty of Payment. This Loan Guaranty is a guaranty
of payment and not of collection. To the extent not prohibited by applicable
law, each Loan Guarantor waives any right to require any Agent, the Issuing Bank
or any Lender to sue the Borrower, any Loan Guarantor, any other guarantor, or
any other person obligated for all or any part of the Guaranteed Obligations
(each, an "Obligated Party"), or otherwise to enforce its payment against any
collateral securing all or any part of the Guaranteed Obligations.
SECTION 10.03. No Discharge or Diminishment of Loan Guaranty. (a)
Except as otherwise provided for herein, the obligations of each Loan Guarantor
hereunder are unconditional and absolute and not subject to any reduction,
limitation, impairment or termination for any reason (other than the payment in
full in cash of the Guaranteed Obligations (other than contingent
indemnification Obligations to the extent no claims giving rise thereto have
been asserted), including: (i) any claim of waiver, release, extension, renewal,
settlement, surrender, alteration, or compromise of any of the Guaranteed
Obligations, by operation of law or otherwise; (ii) any change in the corporate
existence, structure or ownership of the Borrowers or any other guarantor of or
other person liable for any of the Guaranteed Obligations; (iii) any insolvency,
bankruptcy, reorganization or other similar proceeding affecting any Obligated
Party, or their assets or any resulting release or discharge of any obligation
of any Obligated Party; or (iv) the existence of any claim, setoff or other
rights which any Loan Guarantor may have at any time against any Obligated
Party, any Agent, the Issuing Bank, any Lender, or any other person, whether in
connection herewith or in any unrelated transactions.
(b) To the extent not prohibited by applicable law, the obligations
of each Loan Guarantor hereunder are not subject to any defense or setoff,
counterclaim, recoupment, or termination whatsoever by reason of the invalidity,
illegality, or unenforceability of any of the Guaranteed Obligations or
otherwise, or any provision of applicable law or regulation purporting to
prohibit payment by any Obligated Party, of the Guaranteed Obligations or any
part thereof.
(c) Further, to the extent not prohibited by applicable law, the
obligations of any Loan Guarantor hereunder are not discharged or impaired or
otherwise affected by: (i) the failure of any Agent, the Issuing Bank or any
Lender to assert any claim or demand or to enforce any remedy with respect to
all or any part of the Guaranteed Obligations; (ii) any waiver or modification
of or supplement to any provision of any agreement relating to the Guaranteed
Obligations; (iii) any release, non-perfection, or invalidity of any indirect or
direct security for the obligations of the Borrowers for all or any part of the
Guaranteed Obligations or any obligations of any other guarantor of or other
person liable for any of the Guaranteed Obligations; (iv) any action or failure
to act by any Agent, the Issuing Bank or
110
any Lender with respect to any collateral securing any part of the Guaranteed
Obligations; or (v) any default, failure or delay, willful or otherwise, in the
payment or performance of any of the Guaranteed Obligations, or any other
circumstance, act, omission or delay that might in any manner or to any extent
vary the risk of such Loan Guarantor or that would otherwise operate as a
discharge of any Loan Guarantor as a matter of law or equity (other than the
payment in full in cash of the Guaranteed Obligations (other than contingent
indemnification Obligations to the extent no claims giving rise thereto have
been asserted)).
SECTION 10.04. Defenses Waived. To the fullest extent permitted by
applicable law, each Loan Guarantor hereby waives any defense based on or
arising out of any defense of the Borrowers or any Loan Guarantor or the
unenforceability of all or any part of the Guaranteed Obligations from any
cause, or the cessation from any cause of the liability of the Borrowers or any
Loan Guarantor, other than the indefeasible payment in full in cash of the
Guaranteed Obligations (other than contingent indemnification Obligations to the
extent no claims giving rise thereto have been asserted). Without limiting the
generality of the foregoing, each Loan Guarantor irrevocably waives acceptance
hereof, presentment, demand, protest and, to the fullest extent permitted by
law, any notice not provided for herein, as well as any requirement that at any
time any action be taken by any person against any Obligated Party, or any other
person. The Administrative Agent may, at its election, foreclose on any
Collateral held by it by one or more judicial or nonjudicial sales, accept an
assignment of any such Collateral in lieu of foreclosure or otherwise act or
fail to act with respect to any Collateral securing all or a part of the
Guaranteed Obligations, compromise or adjust any part of the Guaranteed
Obligations, make any other accommodation with any Obligated Party or exercise
any other right or remedy available to it against any Obligated Party, without
affecting or impairing in any way the liability of such Loan Guarantor under
this Loan Guaranty except to the extent the Guaranteed Obligations have been
fully and paid in cash (other than contingent indemnification Obligations to the
extent no claims giving rise thereto have been asserted). To the fullest extent
permitted by applicable law, each Loan Guarantor waives any defense arising out
of any such election even though that election may operate, pursuant to
applicable law, to impair or extinguish any right of reimbursement or
subrogation or other right or remedy of any Loan Guarantor against any Obligated
Party or any security.
SECTION 10.05. Rights of Subrogation. No Loan Guarantor will assert
any right, claim or cause of action, including, without limitation, a claim of
subrogation, contribution or indemnification that it has against any Obligated
Party, or any Collateral, until the Loan Parties and the Loan Guarantors have
fully performed all their Secured Obligations. Upon payment in full of the
Secured Obligations (other than contingent indemnification Obligations to the
extent no claims giving rise thereto have been asserted), the Loan Guarantors
shall be subrogated to the Issuing Banks and the Lenders to the extent of any
payments hereunder.
SECTION 10.06. Reinstatement; Stay of Acceleration. If at any time
any payment of any portion of the Guaranteed Obligations is rescinded or must
otherwise be restored or returned upon the insolvency, bankruptcy, or
reorganization of any Borrower or otherwise, each Loan Guarantor's obligations
under this Loan Guaranty with respect to that payment shall be reinstated at
such time as though the payment had not been made and whether or not the Agents,
the Issuing Bank and the Lenders are in possession of this Loan Guaranty. If
acceleration of the time for payment of any of the Guaranteed Obligations is
stayed upon the insolvency, bankruptcy or reorganization of any Borrower, all
such amounts otherwise subject to acceleration under the terms of any agreement
relating to the Guaranteed Obligations shall nonetheless be payable by the Loan
Guarantors forthwith on demand by the Lender.
SECTION 10.07. Information. Each Loan Guarantor assumes all
responsibility for being and keeping itself informed of the Borrowers' financial
condition and assets, and of all other circumstances bearing upon the risk of
nonpayment of the Guaranteed Obligations and the nature, scope
111
and extent of the risks that each Loan Guarantor assumes and incurs under this
Loan Guaranty, and agrees that neither the Issuing Bank, any Agent, nor any
Lender shall have any duty to advise any Loan Guarantor of information known to
it regarding those circumstances or risks.
SECTION 10.08. Termination. The Lenders may continue to make loans
or extend credit to the Borrowers based on this Loan Guaranty until five days
after they receive written notice of termination from any Loan Guarantor.
Notwithstanding receipt of any such notice, each Loan Guarantor will continue to
be liable to the Lenders for any Guaranteed Obligations created, assumed or
committed to prior to the fifth day after receipt of the notice, and all
subsequent renewals, extensions, modifications and amendments with respect to,
or substitutions for, all or any part of that Guaranteed Obligations.
SECTION 10.09. Taxes. All payments of the Guaranteed Obligations
will be made by each Loan Guarantor free and clear of and without deduction for
any Indemnified Taxes; provided that if any Loan Guarantor shall be required to
deduct any Indemnified Taxes from such payments, then (i) the sum payable shall
be increased as necessary so that after making all required deductions
(including deductions applicable to additional sums payable under this Section)
any Agent, Lender or Issuing Bank (as the case may be) receives an amount equal
to the sum it would have received had no such deductions been made, (ii) such
Loan Guarantor shall make such deductions and (iii) such Loan Guarantor shall
pay the full amount deducted to the relevant Governmental Authority in
accordance with applicable law; provided, however, that such Loan Guarantor
shall not be required to increase any such amount if the increase in such amount
payable results from the Agents', Lenders' or Issuing Bank's own willful
misconduct or gross negligence.
SECTION 10.10. Maximum Liability. The provisions of this Loan
Guaranty are severable, and in any action or proceeding involving any state
corporate law, or any state, federal or foreign bankruptcy, insolvency,
reorganization or other law affecting the rights of creditors generally, if the
obligations of any Loan Guarantor under this Loan Guaranty would otherwise be
held or determined to be avoidable, invalid or unenforceable on account of the
amount of such Loan Guarantor's liability under this Loan Guaranty, then,
notwithstanding any other provision of this Loan Guaranty to the contrary, the
amount of such liability shall, without any further action by the Loan
Guarantors or the Lenders, be automatically limited and reduced to the highest
amount that is valid and enforceable as determined in such action or proceeding
(such highest amount determined hereunder being the relevant Loan Guarantor's
"Maximum Liability"). This Section with respect to the Maximum Liability of each
Loan Guarantor is intended solely to preserve the rights of the Lenders to the
maximum extent not subject to avoidance under applicable law, and no Loan
Guarantor nor any other person or entity shall have any right or claim under
this Section with respect to such Maximum Liability, except to the extent
necessary so that the obligations of any Loan Guarantor hereunder shall not be
rendered voidable under applicable law. Each Loan Guarantor agrees that the
Guaranteed Obligations may at any time and from time to time exceed the Maximum
Liability of each Loan Guarantor without impairing this Loan Guaranty or
affecting the rights and remedies of the Lenders hereunder, provided that,
nothing in this sentence shall be construed to increase any Loan Guarantor's
obligations hereunder beyond its Maximum Liability.
SECTION 10.11. Contribution. In the event any Loan Guarantor (a
"Paying Guarantor") shall make any payment or payments under this Loan Guaranty
or shall suffer any loss as a result of any realization upon any collateral
granted by it to secure its obligations under this Loan Guaranty, each other
Loan Guarantor (each a "Non-Paying Guarantor") shall contribute to such Paying
Guarantor an amount equal to such Non-Paying Guarantor's "Applicable Percentage"
of such payment or payments made, or losses suffered, by such Paying Guarantor.
For purposes of this Article X, each Non-Paying Guarantor's "Applicable
Percentage" with respect to any such payment or loss by a Paying Guarantor shall
be determined as of the date on which such payment or loss was made by reference
to the ratio of (i) such Non-Paying Guarantor's Maximum Liability as of such
date (without giving effect to any
112
right to receive, or obligation to make, any contribution hereunder) or, if such
Non-Paying Guarantor's Maximum Liability has not been determined, the aggregate
amount of all monies received by such Non-Paying Guarantor from the Borrowers
after the date hereof (whether by loan, capital infusion or by other means) to
(ii) the aggregate Maximum Liability of all Loan Guarantors hereunder (including
such Paying Guarantor) as of such date (without giving effect to any right to
receive, or obligation to make, any contribution hereunder), or to the extent
that a Maximum Liability has not been determined for any Loan Guarantor, the
aggregate amount of all monies received by such Loan Guarantors from the
Borrowers after the date hereof (whether by loan, capital infusion or by other
means). Nothing in this provision shall affect any Loan Guarantor's several
liability for the entire amount of the Guaranteed Obligations (up to such Loan
Guarantor's Maximum Liability). Each of the Loan Guarantors covenants and agrees
that its right to receive any contribution under this Loan Guaranty from a
Non-Paying Guarantor shall be subordinate and junior in right of payment to the
payment in full in cash of the Guaranteed Obligations. This provision is for the
benefit of the Agents, the Issuing Bank, the Lenders and the Loan Guarantors and
may be enforced by any one, or more, or all of them in accordance with the terms
hereof.
SECTION 10.12. Liability Cumulative. The liability of each Loan
Party as a Loan Guarantor under this Article X is in addition to and shall be
cumulative with all liabilities of each Loan Party to the Agents, the Issuing
Bank and the Lenders under this Agreement and the other Loan Documents to which
such Loan Party is a party or in respect of any obligations or liabilities of
the other Loan Parties, without any limitation as to amount, unless the
instrument or agreement evidencing or creating such other liability specifically
provides to the contrary.
[SIGNATURE PAGE FOLLOWS]
113
IN WITNESS WHEREOF, the parties hereto have caused this Agreement to be duly
executed by their respective authorized officers as of the day and year first
above written.
DURA AUTOMOTIVE SYSTEMS, INC.,
as Parent Guarantor
By: /s/ Keith Marchiando
-------------------------
Name:
Title:
[Signature Page to Fifth Amended and Restated Credit Agreement]
S-1
DURA OPERATING CORP., as U.S.
Borrower
By: /s/ Keith Marchiando
-------------------------
Name:
Title:
[Signature Page to Fifth Amended and Restated Credit Agreement]
S-2
DURA AUTOMOTIVE SYSTEMS
(CANADA), LTD., as Canadian Borrower
By: /s/ Keith Marchiando
-------------------------
Name:
Title:
[Signature Page to Fifth Amended and Restated Credit Agreement]
S-3
DURA AUTOMOTIVE CANADA ULC, as a
Loan Guarantor
By: /s/ Keith Marchiando
-------------------------
Name:
Title:
[Signature Page to Fifth Amended and Restated Credit Agreement]
S-4
DURA ONTARIO INC., as a Loan Guarantor
By: /s/ Keith Marchiando
-------------------------
Name:
Title:
[Signature Page to Fifth Amended and Restated Credit Agreement]
S-5
DURA CANADA LP, as a Loan Guarantor
By: /s/ Keith Marchiando
-------------------------
Name:
Title:
[Signature Page to Fifth Amended and Restated Credit Agreement]
S-6
TRIDENT AUTOMOTIVE LIMITED, as a
Loan Guarantor
By: /s/ Keith Marchiando
-------------------------
Name:
Title:
[Signature Page to Fifth Amended and Restated Credit Agreement]
S-7
TRIDENT AUTOMOTIVE CANADA CO., as a
Loan Guarantor
By: /s/ Keith Marchiando
-------------------------
Name:
Title:
[Signature Page to Fifth Amended and Restated Credit Agreement]
S-8
DURA HOLDINGS ULC, as a Loan Guarantor
By: /s/ Keith Marchiando
-------------------------
Name:
Title:
[Signature Page to Fifth Amended and Restated Credit Agreement]
S-9
DURA HOLDINGS CANADA LP, as a Loan
Guarantor
By: /s/ Keith Marchiando
-------------------------
Name:
Title:
[Signature Page to Fifth Amended and Restated Credit Agreement]
S-10
DURA OPERATING CANADA LP, as a Loan
Guarantor
By: /s/ Keith Marchiando
-------------------------
Name:
Title:
[Signature Page to Fifth Amended and Restated Credit Agreement]
S-11
AUTOMOTIVE AVIATION PARTNERS,
LLC, as a Loan Guarantor
BY: DuraAircraft Operating Company,
LLC, its managing member
By: Dura Operating Corp.
Its: Sole Member
By: /s/ Keith Marchiando
-------------------------
Name:
Title:
[Signature Page to Fifth Amended and Restated Credit Agreement]
S-12
ADWEST ELECTRONICS, INC., as a Loan
Guarantor
By: /s/ Keith Marchiando
-------------------------
Name:
Title:
[Signature Page to Fifth Amended and Restated Credit Agreement]
S-13
ATWOOD AUTOMOTIVE, INC., as a Loan
Guarantor
By: /s/ Keith Marchiando
-------------------------
Name:
Title:
[Signature Page to Fifth Amended and Restated Credit Agreement]
S-14
DURA CABLES NORTH LLC, as a Loan
Guarantor
By: Atwood Automotive, Inc.
Its: Sole Member
By: /s/ Keith Marchiando
-------------------------
Name:
Title:
[Signature Page to Fifth Amended and Restated Credit Agreement]
S-15
DURA CABLES SOUTH LLC, as a Loan
Guarantor
By: Atwood Automotive, Inc.
Its: Sole Member
By: /s/ Keith Marchiando
-------------------------
Name:
Title:
[Signature Page to Fifth Amended and Restated Credit Agreement]
S-16
DURA G.P., as a Loan Guarantor
By: Dura Operating Corp
Its: Managing General Partner
By: /s/ Keith Marchiando
-------------------------
Name:
Title:
[Signature Page to Fifth Amended and Restated Credit Agreement]
S-17
DURA SPICEBRIGHT, INC.
as a Loan Guarantor
By: /s/ Keith Marchiando
-------------------------
Name:
Title:
[Signature Page to Fifth Amended and Restated Credit Agreement]
S-18
MARK I MOLDED PLASTICES OF
TENNESSEE, INC., as a Loan Guarantor
By: /s/ Keith Marchiando
-------------------------
Name:
Title:
[Signature Page to Fifth Amended and Restated Credit Agreement]
S-19
DURA GLOBAL TECHNOLOGIES, INC., as a
Loan Guarantor
By: /s/ Keith Marchiando
-------------------------
Name:
Title:
[Signature Page to Fifth Amended and Restated Credit Agreement]
S-20
DURA AUTOMOTIVE SYSTEMS OF
INDIANA, INC., as a Loan Guarantor
By: /s/ Keith Marchiando
-------------------------
Name:
Title:
[Signature Page to Fifth Amended and Restated Credit Agreement]
S-21
DURA AIRCRAFT OPERATING COMPANY,
LLC, as a Loan Guarantor
By: Dura Operating Corp.
Its: Sole Member
By: /s/ Keith Marchiando
-------------------------
Name:
Title:
[Signature Page to Fifth Amended and Restated Credit Agreement]
S-22
DURA BRAKE SYSTEMS, L.L.C., as a Loan
Guarantor
By: Dura Operating Corp.
Its: Sole Member
By: /s/ Keith Marchiando
-------------------------
Name:
Title:
[Signature Page to Fifth Amended and Restated Credit Agreement]
S-23
DURA SHIFTER L.L.C., as a Loan Guarantor
By: Dura Operating Corp.
Its: Sole Member
By: /s/ Keith Marchiando
-------------------------
Name:
Title:
[Signature Page to Fifth Amended and Restated Credit Agreement]
S-24
DURA SERVICES L.L.C., as a Loan Guarantor
By: /s/ Keith Marchiando
-------------------------
Name:
Title: Manager
[Signature Page to Fifth Amended and Restated Credit Agreement]
S-25
DURA MANCELONA L.L.C., as a Loan
Guarantor
By: /s/ Keith Marchiando
-------------------------
Name:
Title: Manager
[Signature Page to Fifth Amended and Restated Credit Agreement]
S-26
DURA FREMONT L.L.C., as a Loan Guarantor
By: /s/ Keith Marchiando
-------------------------
Name:
Title: Manager
[Signature Page to Fifth Amended and Restated Credit Agreement]
S-27
DURA GLADWIN L.L.C., as a Loan Guarantor
By: /s/ Keith Marchiando
-------------------------
Name:
Title: Manager
[Signature Page to Fifth Amended and Restated Credit Agreement]
S-28
DURA AUTOMOTIVE SYSTEMS CABLE
OPERATIONS, INC., as a Loan Guarantor
By: /s/ Keith Marchiando
-------------------------
Name:
Title:
[Signature Page to Fifth Amended and Restated Credit Agreement]
S-29
UNIVERSAL TOOL & STAMPING
COMPANY, INC., as a Loan Guarantor
By: /s/ Keith Marchiando
-------------------------
Name:
Title:
[Signature Page to Fifth Amended and Restated Credit Agreement]
S-30
TRIDENT AUTOMOTIVE, L.P., as a Loan
Guarantor
By: Trident Automotive Ltd.
Its: General Partner
By: /s/ Keith Marchiando
-------------------------
Name:
Title:
[Signature Page to Fifth Amended and Restated Credit Agreement]
S-31
TRIDENT AUTOMOTIVE, L.L.C., as a Loan
Guarantor
By: Trident Automotive Canada Co.
Its: Managing Member
By: /s/ Keith Marchiando
-------------------------
Name:
Title:
[Signature Page to Fifth Amended and Restated Credit Agreement]
S-32
ATWOOD MOBILE PRODUCTS, INC., as a
Loan Guarantor
By: /s/ Keith Marchiando
-------------------------
Name:
Title:
[Signature Page to Fifth Amended and Restated Credit Agreement]
S-33
CREATION GROUP HOLDINGS, INC., as a
Loan Guarantor
By: /s/ Keith Marchiando
-------------------------
Name:
Title:
[Signature Page to Fifth Amended and Restated Credit Agreement]
S-34
KEMBERLY, INC., as a Loan Guarantor
By: /s/ Keith Marchiando
-------------------------
Name:
Title:
[Signature Page to Fifth Amended and Restated Credit Agreement]
S-35
CREATION GROUP, INC., as a Loan
Guarantor
By: /s/ Keith Marchiando
-------------------------
Name:
Title:
[Signature Page to Fifth Amended and Restated Credit Agreement]
S-36
CREATION GROUP TRANSPORTATION,
INC., as a Loan Guarantor
By: /s/ Keith Marchiando
-------------------------
Name:
Title:
[Signature Page to Fifth Amended and Restated Credit Agreement]
S-37
KEMBERLY, LLC, as a Loan Guarantor
By: /s/ Keith Marchiando
-------------------------
Name:
Title:
[Signature Page to Fifth Amended and Restated Credit Agreement]
S-38
SPEC-TEMP, INC., as a Loan Guarantor
By: /s/ Keith Marchiando
-------------------------
Name:
Title:
[Signature Page to Fifth Amended and Restated Credit Agreement]
S-39
CREATION WINDOWS, INC., as a Loan
Guarantor
By: /s/ Keith Marchiando
-------------------------
Name:
Title:
[Signature Page to Fifth Amended and Restated Credit Agreement]
S-40
CREATION WINDOWS,LLC, as a Loan
Guarantor
By: /s/ Keith Marchiando
-------------------------
Name:
Title:
[Signature Page to Fifth Amended and Restated Credit Agreement]
S-41
JPMORGAN CHASE BANK, N.A.,
individually, as Administrative Agent,
Issuing Bank and Swingline Lender
By: /s/ Karen M. Sharf
-------------------------
Name: KAREN M. SHARF
Title: VICE PRESIDENT
[Signature Page to Fifth Amended and Restated Credit Agreement]
S-42
BANK OF AMERICA, N.A., individually,
as Collateral Agent and as a Lender
By /s/ Brian Conok
-------------------------
Name: Brian Conok
Title: Senior Vice President
[Signature Page to Fifth Amended and Restated Credit Agreement]
S-43
JPMORGAN CHASE BANK, N.A.,
TORONTO BRANCH
By /s/ Drew McDonald
-------------------------
Name: Drew McDonald
Title: Vice President
[Signature Page to Amended and Restated Credit Agreement]
S-45
Standard Federal Bank N.A.
By /s/ Armette Gordon
-------------------------
Name: Armette Gordon
Title: First Vice President
[Signature Page to Amended and Restated Credit Agreement]
S-45
THE BANK OF NOVA SCOTIA
By /s/ V. Gibson
-------------------------
Name: V. GIBSON
Title: ASST. AGENT
[Signature Page to Amended and Restated Credit Agreement]
S-45
PNC. BANK, N.A.
By /s/ Angus J. White
-------------------------
Name: Angus J. White
Title: Vice President
[Signature Page to Amended and Restated Credit Agreement]
S-45
Wachovia Bank, N.A.
By /s/ Herbert C.Korn
-------------------------
Name: Herbert C.Korn
Title: VP
[Signature Page to Amended and Restated Credit Agreement]
S-45
GENERAL ELECTRIC CAPITAL
CORPORATION
By /s/ Donna H. Evans
-------------------------
Name: Donna H. Evans
Title: Duly Authorized Signatory
[Signature Page to Amended and Restated Credit Agreement]
S-45
Wells Fargo Foothill, LLC
By /s/ Dennis King
-------------------------
Name: Dennis King
Title: Vice President
[Signature Page to Amended and Restated Credit Agreement]
S-45
Merrill Lynch Capital, a Division of Merrill
Lynch Business Financial Services Inc.
By /s/ Thomas W. Bukowski
-------------------------
Name: Thomas W. Bukowski
Title: Director
[Signature Page to Amended and Restated Credit Agreement]
S-45
/s/ Fifth Third Bank
--------------------------
Fifth Third Bank
By /s/ Michael Blackburn
-------------------------
Name: Michael Blackburn
Title: Vice President
[Signature Page to Amended and Restated Credit Agreement]
S-45
UBS LOAN FINANCE LLC
By /s/ Wilfred V. Saint
--------------------------
Name: Wilfred V. Saint
Title: Director
By /s/ Richard L. Tavrow
-------------------------
Name: Richard L. Tavrow
Title: Director
[Signature Page to Amended and Restated Credit Agreement]
S-45
Siemens Financial Services, Inc.
By /s/ Frank Amodio
-------------------------
Name: Frank Amodio
Title: Vice President - Credit
[Signature Page to Amended and Restated Credit Agreement]
S-45
AMENDED AND RESTATED PLEDGE AND SECURITY AGREEMENT
THIS AMENDED AND RESTATED PLEDGE AND SECURITY AGREEMENT (as it may be
amended or modified from time to time, the "Security Agreement") is entered into
as of May 3, 2005 by and among Dura Automotive Systems, Inc., a Delaware
corporation, Dura Operating Corp., a Delaware corporation, Dura Automotive
Systems (Canada), Ltd., an Ontario corporation, each of the U.S. Subsidiary
Guarantors party hereto and each of the Canadian Subsidiary Guarantors party
hereto (each of the foregoing, together with each other Person which may from
time to time become a party hereto as a Grantor, individually a "Grantor" and
collectively, "Grantors") and Bank of America, N.A., in its capacity as
collateral agent (the "Collateral Agent") for the Secured Parties (as defined
below).
PRELIMINARY STATEMENT
The Grantors, the other Loan Parties, JPMorgan Chase Bank, N.A., as
Administrative Agent, Issuing Bank and Swingline Lender, the Collateral Agent
and the Lenders are entering into a Fifth Amended and Restated Credit Agreement
dated as of May 3, 2005 (as it may be amended or modified from time to time, the
"Credit Agreement"), whereby, among other things, the parties desired to amend
and restate their rights and obligations under their existing credit agreement
("Existing Credit Agreement").
In connection with the Loan Parties' Existing Credit Agreement and
pursuant to a series of security agreements, reaffirmations and joinders thereto
(the "Existing Security Agreements"), the Loan Parties granted Liens on
substantially all of their personal property to secure their obligations under
the Existing Credit Agreement.
The Grantors are entering into this Security Agreement in order to grant a
continuing Lien on the Collateral, and to amend and restate and continue the
Liens granted under the Existing Security Agreements, in each case in order to
secure the Secured Obligations that they have agreed are owing by the Grantors
(whether as a Borrower or as a Guarantor) and to induce the Lenders to continue
to extend credit to the Borrowers under the Credit Agreement.
ACCORDINGLY, the Grantors and the Collateral Agent, on behalf of the
Secured Parties, hereby agree as follows:
ARTICLE I
DEFINITIONS
1.1 Terms Defined in Credit Agreement. All capitalized terms used herein
and not otherwise defined shall have the meanings assigned to such terms in the
Credit Agreement.
1.2 Terms Defined in UCC. Terms defined in the UCC which are not otherwise
defined in this Security Agreement are used herein as defined in the UCC.
1.3 Definitions of Certain Terms Used Herein. As used in this Security
Agreement, in addition to the terms defined in the Preliminary Statement, the
following terms shall have the following meanings:
"Accounts" shall have the meaning set forth in Article 9 of the UCC.
"Article" means a numbered article of this Security Agreement, unless
another document is specifically referenced.
"Bankruptcy Code" means title 11, United States Code, as amended from time
to time, and any successor statute thereto.
"Borrowing Base Certificate" means the Canadian Borrowing Base Certificate
and/or the U.S. Borrowing Base Certificate delivered pursuant to the Credit
Agreement.
"Chattel Paper" shall have the meaning set forth in Article 9 of the UCC.
"Closing Date" means the date of the Credit Agreement.
"Collateral" shall have the meaning set forth in Article II.
"Collateral Access Agreement" means any landlord waiver or other
agreement, in form and substance reasonably satisfactory to the Agents, between
the Collateral Agent and any third party (including any bailee, consignee,
customs broker, or other similar Person) in possession of any Collateral or any
landlord of any Loan Party for any real property where any Collateral is
located, as such landlord waiver or other agreement may be amended, restated, or
otherwise modified from time to time.
"Collateral Deposit Account" shall have the meaning set forth in Section
7.1(a).
"Collection Account" shall have the meaning set forth in Section 7.1(b).
"Commercial Tort Claims" means all "commercial tort claims" as defined in
Article 9 of the UCC, including without limitation all commercial tort claims
listed on EXHIBIT J hereto (as such schedule may be amended and supplemented
from time to time).
"Control" shall have the meaning set forth in Article 8 or, if applicable,
in Section 9-104, 9-105, 9-106 or 9-107 of Article 9 of the UCC.
"Copyrights" means, with respect to any Person, all of such Person's
right, title, and interest in and to the following: (a) all U.S. copyrights,
rights and interests in copyrights, works protectable by copyright, copyright
registrations, and copyright applications; (b) all renewals of any of the
foregoing; (c) all income, royalties, damages, and payments now or hereafter due
and/or payable under any of the foregoing, including, without limitation,
damages or payments for past or future infringements for any of the foregoing;
(d) the right to sue for past, present, and future infringements of any of the
foregoing; and (e) all rights corresponding to any of the foregoing throughout
the world.
"Default" means any event or condition which constitutes an Event of
Default or which upon notice, lapse of time or both would, unless cured or
waived, become an Event of Default.
"Deposit Account Control Agreement" means an agreement, in form and
substance reasonably satisfactory to the Collateral Agent, among any Grantor, a
banking institution holding such Grantor's funds, and the Collateral Agent with
respect to collection and control of all deposits and balances held in a deposit
account maintained by any Grantor with such banking institution.
"Deposit Accounts" shall have the meaning set forth in Article 9 of the
UCC.
"Documents" shall have the meaning set forth in Article 9 of the UCC.
"Equipment" shall have the meaning set forth in Article 9 of the UCC.
"Event of Default" means an event described in Section 5.1.
"Excluded Property" shall mean Special Property other than the following:
(a) the right to receive any payment of money (including, without
limitation, Accounts, General Intangibles and Payment Intangibles) or any
other rights referred to in Sections 9-406(f), 9-407(a) or 9-408(a) of the
UCC; and
(b) any Proceeds, substitutions or replacements of any Special
Property (unless such Proceeds, substitutions or replacements would
constitute Special Property).
"Exhibit" refers to a specific exhibit to this Security Agreement, unless
another document is specifically referenced.
"Fixtures" shall have the meaning set forth in Article 9 of the UCC.
"General Intangibles" shall have the meaning set forth in Article 9 of the
UCC.
"Goods" shall have the meaning set forth in Article 9 of the UCC.
"Instruments" shall have the meaning set forth in Article 9 of the UCC.
"Inventory" shall have the meaning set forth in Article 9 of the UCC.
"Investment Property" shall have the meaning set forth in Article 9 of the
UCC.
"Lenders" means the lenders party to the Credit Agreement and their
successors and assigns.
"Letter-of-Credit Rights" shall have the meaning set forth in Article 9 of
the UCC.
"Licenses" means, with respect to any Person, all of such Person's right,
title, and interest in and to (a) any and all licensing agreements or similar
arrangements in and to its Patents, Copyrights, or Trademarks, (b) all income,
royalties, damages, claims, and payments now or hereafter due or payable under
and with respect thereto, including, without limitation, damages and payments
for past and future breaches thereof, and (c) all rights to sue for past,
present, and future breaches thereof.
"Lock Boxes" shall have the meaning set forth in Section 7.1(a).
"Lock Box Agreements" shall have the meaning set forth in Section 7.1(a).
"Non-Pledged Foreign Interest" shall have the meaning ascribed to such
term in Article II.
"Patents" means, with respect to any Person, all of such Person's right,
title, and interest in and to: (a) any and all U.S. patents and patent
applications; (b) all inventions and improvements described and claimed therein;
(c) all reissues, divisions, continuations, renewals, extensions, and
continuations-in-part thereof; (d) all income, royalties, damages, claims, and
payments now or hereafter due or payable under and with respect thereto,
including, without limitation, damages and payments for past and future
infringements thereof; and (e) all rights to sue for past, present, and future
infringements thereof.
"Pledged Collateral" means all Instruments, Securities and other
Investment Property of the Grantors (other than Excluded Property and
Non-Pledged Foreign Interest), whether or not physically delivered to the
Collateral Agent pursuant to this Security Agreement.
"Pledged ULC Share Issuer" means Dura Automotive Canada ULC.
"Pledged ULC Shares" means any shares of capital stock of the Pledged ULC
Share Issuer being pledged hereunder.
"Receivables" means the Accounts, Chattel Paper, Documents, Investment
Property, Instruments and any other rights or claims to receive money which are
General Intangibles or which are otherwise included as Collateral.
"Section" means a numbered section of this Security Agreement, unless
another document is specifically referenced.
"Secured Parties" means the Agents, the Lenders, their respective
Affiliates, and each of their permitted successors and assigns.
"Security" has the meaning set forth in Article 8 of the UCC.
"Special Property" shall mean:
(a) any permit, lease or license, or the assets (owned by a Person
other than a Loan Party) relating thereto or covered thereby, held by any
Grantor that validly prohibits the creation by such Grantor of a security
interest therein or thereon;
(b) any permit, lease or license, or the assets (owned by a Person
other than a Loan Party) relating thereto or covered thereby, held by any
Grantor to the extent that any Requirement of Law applicable thereto
prohibits the creation of a security interest therein or thereon;
(c) Equipment owned by any Grantor on the date hereof or hereafter
acquired that is subject to a Lien securing purchase money Indebtedness
incurred in connection with the purchase of any Equipment or Capital Lease
Obligation permitted to be incurred pursuant to the provisions of the
Credit Agreement if the contract or other agreement in which such Lien is
granted (or the documentation providing for such purchase money
Indebtedness incurred in connection with the purchase of any Equipment or
Capital Lease Obligation) validly prohibits the creation of any other Lien
on such Equipment;
(d) Any intellectual property Collateral, including without
limitation, intent-to-use trademark applications, for which the creation
by a Grantor of a security interest therein is prohibited without the
consent of third party, by Requirement of Law, or would otherwise result
in the loss by any Loan Party of any material rights therein;
(e) Equity Interests in Dura Automotive Systems Capital Trust which,
pursuant to either Requirements of Law, the organizational documents
governing such trust or any other agreement binding upon such trust, do
not permit the assignment of any interest in such trust; and
(f) Equity Interests held by any Grantor in Shanghai Atwood Electric
Co., Ltd. which, pursuant to either Requirements of Law or the
organizational documents governing such joint venture, do not permit the
assignment of such Grantor's interests.
provided, however, that in each case described in clauses (a), (b), (c),
(d), (e) and (f) of this definition, such property shall constitute "Special
Property" only to the extent and for so long as such permit, lease, license,
contract or other agreement or Requirement of Law applicable thereto, validly
prohibits the creation of a Lien on such property in favor of the Collateral
Agent and, upon the termination of such prohibition (howsoever occurring), such
property shall cease to constitute "Special Property."
"Stock Rights" means all dividends, cash, instruments or other
distributions and any other right or property including any proceeds thereof
which the Grantors shall receive or shall become entitled to receive for any
reason whatsoever with respect to, in substitution for or in exchange for any
Equity Interest constituting
Collateral, any right to receive an Equity Interest and any right to receive
earnings, in which the Grantors now have or hereafter acquire any right, issued
by an issuer of such Equity Interest.
"Supporting Obligations" shall have the meaning set forth in Article 9 of
the UCC.
"Trademarks" means, with respect to any Person, all of such Person's
right, title, and interest in and to the following: (a) all U.S. trademarks
(including service marks), trade names, trade dress, and trade styles and the
registrations and applications for registration thereof and the goodwill of the
business symbolized by the foregoing; (b) all licenses of the foregoing, whether
as licensee or licensor; (c) all renewals of the foregoing; (d) all income,
royalties, damages, and payments now or hereafter due or payable with respect
thereto, including, without limitation, damages, claims, and payments for past
and future infringements thereof; (e) all rights to sue for past, present, and
future infringements of the foregoing, including the right to settle suits
involving claims and demands for royalties owing; and (f) all rights
corresponding to any of the foregoing throughout the world.
"UCC" means the Uniform Commercial Code, as in effect from time to time,
of the State of New York or of any other state the laws of which are required as
a result thereof to be applied in connection with the attachment, perfection or
priority of, or remedies with respect to, Collateral Agent's or any Secured
Party's Lien on any Collateral.
"ULC" means an unlimited company (also known as an "unlimited liability
company") existing under the laws of the province of Nova Scotia.
The foregoing definitions shall be equally applicable to both the singular
and plural forms of the defined terms.
ARTICLE II
GRANT OF SECURITY INTEREST
Each Grantor hereby pledges, assigns (other than with respect to the
Pledged ULC Shares) and grants to the Collateral Agent, on behalf of and for the
benefit of the Secured Parties, a security interest in all of its right, title
and interest in, to and under all personal property and other assets, whether
now owned by or owing to, or hereafter acquired by or arising in favor of such
Grantor (including under any trade name or derivations thereof), and whether
owned or consigned by or to, or leased from or to, such Grantor, and regardless
of where located (all of which will be collectively referred to as the
"Collateral"), including:
(i) all Accounts;
(ii) all Chattel Paper;
(iii) all Documents;
(iv) all Equipment;
(v) all Fixtures;
(vi) all General Intangibles, Patents, Trademarks and Copyrights
and all Licenses;
(vii) all Goods;
(viii) all Instruments;
(ix) all Equity Interests and other Securities;
(x) all Inventory;
(xi) all Investment Property;
(xii) all cash or cash equivalents;
(xiii) all letters of credit, Letter-of-Credit Rights and Supporting
Obligations;
(xiv) all Deposit Accounts with any bank or other financial
institution;
(xv) all Commercial Tort Claims listed on EXHIBIT J hereto;
(xvi) and all accessions to, substitutions for and replacements,
proceeds (including Stock Rights), insurance proceeds and
products of the foregoing, together with all books and
records, customer lists, credit files, computer files,
programs, printouts and other computer materials and records
related thereto and any General Intangibles at any time
evidencing or relating to any of the foregoing;
to secure the prompt and complete payment and performance of the Secured
Obligations (specifically including, without limitation, each Grantor's
obligations arising under Article X of the Credit Agreement). Notwithstanding
the foregoing, (i) the Collateral of the Canadian Borrower and the Canadian
Subsidiary Guarantors (and the pledges and security interests granted hereunder
by the Canadian Borrower and the Canadian Subsidiary Guarantors) shall secure
the prompt and complete payment and performance of the Secured Obligations
solely to the extent constituting Canadian Obligations and (ii) with respect to
each Grantor's pledge of the outstanding securities held by it of any first-tier
Foreign Subsidiary, such pledge to the Collateral Agent will be limited to 65%
of the outstanding voting securities of such Foreign Subsidiary (the remaining
35% of such voting securities is referred to herein as the "Non-Pledged Foreign
Interest").
Notwithstanding anything to the contrary contained in clauses (i) through
(xvi) above, the security interest created by this Agreement shall not extend
to, and the terms "Pledged Collateral" and "Collateral" shall not include, any
Excluded Property and any Non-Pledged Foreign Interest and (i) the Grantors
shall from time to time at the reasonable request of the Collateral Agent give
written notice to the Collateral Agent identifying in reasonable detail the
Special Property (and stating in such notice that such Special Property
constitutes "Excluded Property") and shall provide to the Collateral Agent such
other information regarding the Special Property as the Collateral Agent may
reasonably request and (ii) from and after the date hereof, no Grantor shall
permit to become effective in any document creating, governing or providing for
any permit, lease or license, a provision that would prohibit the creation of a
Lien on such permit, lease or license in favor of the Collateral Agent unless
such Grantor believes, in its reasonable judgment, that such prohibition is
usual and customary in transactions of such type.
ARTICLE III
REPRESENTATIONS AND WARRANTIES
Each Grantor represents and warrants that:
3.1 Title, Perfection and Priority. Each Grantor has good and valid rights
in or the power to pledge, collaterally assign, deliver, deposit, and transfer
the Collateral and title to the Collateral with respect to which it has
purported to grant a security interest hereunder, free and clear of all Liens
except for Permitted Liens, and has full power and authority to grant to the
Collateral Agent the security interest in such Collateral pursuant hereto. When
financing statements have been filed in the appropriate offices against the
applicable Grantors in the locations listed on EXHIBIT H, the Collateral Agent
will have a fully perfected first priority security interest in that Collateral
in which a security interest may be perfected by filing, subject only to
Permitted Liens.
3.2 Type and Jurisdiction of Organization, Organizational and
Identification Numbers. As of the date hereof, each Grantor's type of entity,
its state of organization, the organizational number issued to it by its state
of organization and its federal employer identification number are set forth on
EXHIBIT A (such Exhibit shall be displayed on a Grantor by Grantor basis).
3.3 Principal Location. As of the date hereof, each Grantor's mailing
address and the location of its place of business (if it has only one) or its
chief executive office (if it has more than one place of business) is disclosed
in EXHIBIT A, as applicable; the Grantors have no other places of business
except those set forth in EXHIBIT A.
3.4 Collateral Locations. As of the date hereof, all of Grantors'
locations where Collateral is located are listed on EXHIBIT A. All of said
locations are owned by the Grantors except for locations (i) which are leased by
the Grantors as lessee and designated in Part VII(b) of EXHIBIT A and (ii) at
which Inventory is held in a public warehouse or is otherwise held by a bailee
or on consignment as designated in Part VII(c) of EXHIBIT A.
3.5 Deposit Accounts. As of the date hereof, all of the Deposit Accounts
of each Grantor are listed on EXHIBIT B.
3.6 Exact Names. Each Grantor's name in which it has executed this
Security Agreement is the exact name as it appears in such Grantor's
organizational documents, as amended, as filed with such Grantor's jurisdiction
of organization. The Grantors have not, during the past year, been known by or
used any other corporate or fictitious name, or been a party to any merger or
consolidation, or been a party to any acquisition, other than as listed on
EXHIBIT A.
3.7 Letter-of-Credit Rights and Chattel Paper. As of the date hereof,
EXHIBIT C lists all Letter-of-Credit Rights and Chattel Paper of each of the
Grantors having an individual fair market value in an amount in excess of
$250,000. All action by each Grantor reasonably necessary to protect and perfect
the Collateral Agent's Lien on each item listed on EXHIBIT C (including the
delivery of all originals and the placement of a legend on all Chattel Paper as
required hereunder) has been duly taken. The Collateral Agent will have a fully
perfected first priority security interest in the Collateral listed on EXHIBIT
C, subject only to Permitted Liens.
3.8 Accounts and Chattel Paper.
(a) The names of the obligors, amounts owing, due dates and other
information with respect to the Accounts and Chattel Paper are and will be
correctly stated in all material respects in all records of each Grantor
relating thereto and in all invoices and Borrowing Base Certificates as of the
date of such Borrowing Base Certificates with respect thereto furnished to the
Collateral Agent by each Grantor in accordance with the terms of the Loan
Documents. As of the time when each Account or each item of Chattel Paper, in
each case constituting Collateral, arises, each Grantor shall be deemed to have
represented and warranted that such Account or Chattel Paper, as the case may
be, and all records of such Grantor relating thereto, are genuine and in all
material respects what they purport to be.
(b) With respect to Accounts scheduled or listed on the most recent
Borrowing Base Certificates as of the date of such Borrowing Base Certificates,
(i) all Accounts are Canadian Eligible Accounts or Eligible U.S. Accounts, as
applicable; (ii) all Accounts represent bona fide sales of Inventory or
rendering of services to Account Debtors in the ordinary course of each
Grantor's business and are not evidenced by a judgment, Instrument or Chattel
Paper; (iii) there are no setoffs, claims or disputes existing or asserted with
respect thereto and the Grantors have not made any agreement with any Account
Debtor for any extension of time for the payment thereof, any compromise or
settlement for less than the full amount thereof, any release of any Account
Debtor from liability therefor, or any deduction therefrom except a discount or
allowance allowed by a Grantor in the ordinary course of its business; (iv) to
the knowledge of any Financial Officer or other senior
officer of any Grantor, there are no facts, events or occurrences which in any
way impair the validity or enforceability thereof or could reasonably be
expected to reduce the amount payable thereunder as shown on each Grantor's
books and records and any invoices, statements and Borrowing Base Certificates
with respect thereto; (v) the Grantors have not received any notice of
proceedings or actions which are threatened or pending against any Account
Debtor which could reasonably be expected to result in any material adverse
change in such Account Debtor's financial condition; and (vi) the Grantors have
no knowledge that any Account Debtor is unable generally to pay its debts as
they become due.
3.9 Inventory. With respect to any Inventory scheduled or listed on the
most recent Borrowing Base Certificates as of the date of such Borrowing Base
Certificates, (a) such Inventory (other than Inventory in transit or out for
repairs) is located at one of the Grantor's locations set forth on EXHIBIT A, as
applicable, (b) no Inventory (other than Inventory in transit) is now, or shall
at any time or times hereafter be stored at any other location except as
permitted by Section 4.1(g), (c) the Grantors have good title to such Inventory
and such Inventory is not subject to any Lien or security interest or document
whatsoever except for the Lien granted to the Collateral Agent, for the benefit
of the Collateral Agent and Secured Parties, and except for Permitted Liens, (d)
except as specifically disclosed in the most recent Borrowing Base Certificate,
such Inventory is Eligible Inventory of good and merchantable quality, free from
any defects, (e) such Inventory is not subject to any licensing, patent,
royalty, trademark, trade name or copyright agreements with any third parties
which would require any consent of any third party upon sale or disposition of
that Inventory or, except royalties incurred pursuant to the sale of such
Inventory under the current license agreement, the payment of any monies to any
third party upon such sale or other disposition, (f) such Inventory has been
produced in accordance with the Federal Fair Labor Standards Act of 1938, as
amended, and all rules, regulations and orders thereunder and (g) the completion
of manufacture in accordance with the applicable purchase order specifications,
sale or other disposition of such Inventory by the Collateral Agent following an
Event of Default shall not require the consent of any Person and shall not
constitute a breach or default under any contract or agreement to which any
Grantor is a party or to which such property is subject.
3.10 Intellectual Property. As of the date hereof, the Grantors do not
have any interest in, or title to, any Patent, Trademark or Copyright materially
necessary for operation of the business, except as set forth in EXHIBIT D. This
Security Agreement is effective to create a valid and continuing Lien and, upon
filing of appropriate financing statements in the offices listed on EXHIBIT H
and this Security Agreement with the United States Copyright Office and the
United States Patent and Trademark Office, fully perfected first priority
security interests in favor of the Collateral Agent on each Grantor's Patents,
Trademarks and Copyrights, except as set forth on EXHIBIT D, subject to Section
4.7(c). Such perfected security interests are enforceable as such as against any
and all creditors of and purchasers from the Grantors; and all action necessary
to protect and perfect the Collateral Agent's Lien on each Grantor's Patents,
Trademarks or Copyrights shall have been duly taken.
3.11 Filing Requirements. As of the date hereof, none of the Equipment is
covered by any certificate of title, except for vehicles having an aggregate
fair market value greater than $500,000, described in Part I of EXHIBIT E. As of
the date hereof, none of the Collateral is of a type for which security
interests or liens may be perfected by filing under any federal statute except
for (a) the vehicles or aircrafts described in Part II of EXHIBIT E and (b)
Patents, Trademarks and Copyrights held by the Grantors and described in EXHIBIT
D. The legal description, county and street address of each property on which
any Fixtures are located is set forth in EXHIBIT F together with the name and
address of the record owner of each such property.
3.12 No Financing Statements, Security Agreements. No financing statement
or security agreement describing all or any portion of the Collateral which has
not lapsed or been terminated naming any of the Grantors as debtor has been
filed or is of record in any jurisdiction except (a) for financing statements or
security agreements naming the Collateral Agent on behalf of the Secured Parties
as the secured party and (b) as permitted in connection with Permitted Liens.
3.13 Pledged Collateral.
(a) As of the date hereof, EXHIBIT G sets forth a complete and
accurate list of all of the Pledged Collateral. Each Grantor is the direct, sole
beneficial owner and sole holder of record of the Pledged Collateral listed on
EXHIBIT G as being owned by it, free and clear of any Liens, except for
Permitted Liens. Each Grantor further represents and warrants that (i) all
Pledged Collateral constituting an Equity Interest has been (to the extent such
concepts are relevant with respect to such Pledged Collateral) duly authorized,
validly issued, are fully paid and (except in the case of Pledged ULC Shares)
non-assessable, (ii) with respect to any certificates delivered to the
Collateral Agent representing an Equity Interest, either such certificates are
Securities as defined in Article 8 of the UCC as a result of actions by the
issuer or otherwise, or, if such certificates are not Securities, the Grantors
have so informed the Collateral Agent so that the Collateral Agent may take
steps to perfect its security interest therein as a General Intangible, (iii)
all Pledged Collateral held by a securities intermediary is covered by a control
agreement among the applicable Grantor, the securities intermediary and the
Collateral Agent pursuant to which the Collateral Agent has Control and (iv) all
Pledged Collateral which represents Indebtedness having an individual fair
market value in excess of $1,000,000 owed to any Grantor has been duly
authorized, authenticated or issued and delivered by the issuer of such
Indebtedness, is the legal, valid and binding obligation of such issuer and, to
such Grantor's knowledge as of the date hereof, such issuer is not in default
thereunder.
(b) In addition, (i) none of the Pledged Collateral (constituting
Equity Interests of Parent's Subsidiaries) has been issued or transferred in
violation of the securities registration, securities disclosure or similar laws
of any jurisdiction to which such issuance or transfer may be subject, (ii)
there are existing no options, warrants, calls or commitments of any character
whatsoever relating to the Pledged Collateral (constituting Equity Interests of
Parent's Subsidiaries) or which obligate the issuer (that is a Subsidiary of
Parent) of any Equity Interest included in the Pledged Collateral to issue
additional Equity Interests, and (iii) no consent, approval, authorization, or
other action by, and no giving of notice, filing with, any governmental
authority or any other Person is required for the pledge by any Grantor of the
Pledged Collateral pursuant to this Security Agreement or for the execution,
delivery and performance of this Security Agreement by any Grantor, or for the
exercise by the Collateral Agent of the voting or other rights provided for in
this Security Agreement or for the remedies in respect of the Pledged Collateral
pursuant to this Security Agreement, except (i) as may be required in connection
with such disposition by laws affecting the offering and sale of securities
generally, (ii) consents, approvals, authorizations or other actions already
taken, (iii) with respect to the Pledged ULC Shares and (iv) that the (x)
limited partnership agreements governing the equity interests in Canadian
limited partnerships forming part of Pledged Collateral and/or (y) the articles
of association governing the Pledged ULC Shares may be subject to restrictions
on transfer to non-residents of Canada.
(c) Except as set forth in EXHIBIT G, the Grantors own 100% of the
issued and outstanding Equity Interests which constitute Pledged Collateral as
of the date hereof.
ARTICLE IV
COVENANTS
From the date of this Security Agreement, and thereafter until this
Security Agreement is terminated pursuant to Section 8.14 hereof, each Grantor
agrees that:
4.1 General.
(a) Collateral Records. Each Grantor will maintain books and records
with respect to the Collateral which are complete and accurate in all material
respects, and furnish to the Agents, with sufficient copies for each of the
Lenders, such reports relating to the Collateral as either Agent shall from time
to time reasonably request.
(b) Authorization to File Financing Statements; Ratification. Each
Grantor hereby authorizes either Agent to file, and if requested will deliver to
the Collateral Agent, all financing statements and other documents and take such
other actions as may from time to time be requested by the Collateral Agent in
order to maintain a first perfected security interest in and, if applicable,
Control of, the Collateral, except as otherwise provided hereunder. Any
financing statement filed by the Collateral Agent may be filed in any filing
office in any applicable UCC jurisdiction and may (i) indicate the Collateral
(1) as all assets of the Grantor or words of similar effect, regardless of
whether any particular asset comprised in the Collateral falls within the scope
of Article 9 of the UCC or such jurisdiction, or (2) by any other description
which reasonably approximates the description contained in this Security
Agreement, and (ii) contain any other information required by part 5 of Article
9 of the UCC for the sufficiency or filing office acceptance of any financing
statement or amendment, including (A) whether any Grantor is an organization,
the type of organization and any organization identification number issued to
any Grantor, and (B) in the case of a financing statement filed as a fixture
filing or indicating Collateral as as-extracted collateral or timber to be cut,
a sufficient description of real property to which the Collateral relates. Each
Grantor also agrees to furnish any such information to Agents promptly upon
request. Each Grantor also ratifies its authorization for the Collateral Agent
to have filed in any UCC jurisdiction any initial financing statements or
amendments thereto if filed prior to the date hereof.
(c) Further Assurances. Each Grantor will, if so reasonably
requested by an Agent, furnish to the Agents, as often as an Agent reasonably
requests, statements and schedules further identifying and describing the
Collateral and such other reports and information in connection with the
Collateral as such Agent may reasonably request, all in such reasonable detail
as such Agent may specify. Each Grantor also agrees to take any and all
commercially reasonable actions necessary to defend title to the Collateral
against all persons and to defend the security interest of the Collateral Agent
in the Collateral and the priority thereof against any Lien not expressly
permitted hereunder.
(d) Other Financing Statements. No Grantor will authorize the filing
of any financing statement naming it as debtor covering all or any portion of
the Collateral, except as permitted pursuant to the Credit Agreement. Each
Grantor acknowledges that it is not authorized to file any financing statement
or amendment or termination statement with respect to any financing statement
without the prior written consent of the Collateral Agent, subject to each
Grantor's rights under Section 9-509(d)(2) of the UCC.
(e) Locations. Subject to the following sentence, no Grantor will
(i) maintain any Collateral (other than Collateral in transit or out for
repairs) that has an aggregate fair market value in excess of $5,000,000 at any
location other than those locations listed on EXHIBIT A, (ii) otherwise change,
or add to, such locations, or (iii) change its principal place of business or
chief executive office from the location identified on EXHIBIT A. Such Grantor
will give the Agents at least (A) thirty (30) days prior written notice of any
change in such Grantor's chief place of business and (B) ten (10) Business Days
prior written notice of any new location of business or any new location for any
of its Collateral except for locations where the Collateral stored or warehoused
at all such new locations has an aggregate fair market value not exceeding
$5,000,000. With respect to any new location (i) where the Collateral stored or
warehoused at such location has an aggregate fair market value in excess of
$5,000,000 and (ii) which is located within the continental United States or
Canada, such Grantor will execute such documents and take such actions as the
Agents deem necessary to perfect and protect the Liens granted under the
Collateral Documents and will use commercially reasonable efforts to obtain a
Collateral Access Agreements for each such location.
4.2 Receivables.
(a) Certain Agreements on Receivables. Except as otherwise permitted
in the Credit Agreement, no Grantor will make or agree to make any discount,
credit, rebate or other reduction in the original amount owing on a Receivable
or accept in satisfaction of a Receivable less than the original amount thereof,
except that, prior to the occurrence and during the continuation of an Event of
Default, the Grantors may reduce the amount of Accounts arising from the sale of
Inventory in the ordinary course of business.
(b) Collection of Receivables. Except as otherwise permitted in this
Security Agreement, each Grantor will use commercially reasonable efforts to
collect and enforce, at such Grantor's sole expense, all amounts due or
hereafter due to any Grantor under the Receivables.
(c) Delivery of Invoices. Each Grantor will deliver to the
Collateral Agent promptly upon its request after the occurrence and during the
continuation of an Event of Default duplicate invoices with respect to each
Account bearing such language of assignment as the Agents shall specify.
(d) Disclosure of Counterclaims on Receivables. If (i) any discount,
credit or agreement to make a rebate or to otherwise reduce the amount owing on
a Receivable exists or (ii) if, to the knowledge of any Financial Officer or any
other senior office of any Grantor, any dispute, setoff, claim, counterclaim or
defense exists or has been asserted or threatened with respect to a Receivable,
such Grantor will disclose such fact to the Agents in the next Borrowing Base
Certificate delivered to the Agents.
(e) Electronic Chattel Paper. Each Grantor shall take all steps
necessary to grant the Collateral Agent Control of all electronic chattel paper
having an individual fair market value in an amount in excess of $500,000, in
accordance with the UCC and all "transferable records" as defined in each of the
Uniform Electronic Transactions Act and the Electronic Signatures in Global and
National Commerce Act.
4.3 Inventory and Equipment.
(a) Maintenance of Goods. Except as otherwise set forth in the
Credit Agreement, each Grantor will do all things necessary to maintain,
preserve, protect and keep the Inventory and the Equipment in good repair and
working and saleable condition, except for damaged or defective goods arising in
the ordinary course of any Grantor's business and except for ordinary wear and
tear, casualty and condemnation in respect of the Equipment.
(b) Inventory Count; Perpetual Inventory System. Subject to the
terms of the Credit Agreement, each Grantor will conduct a physical count or a
periodic cycle count of the Inventory at least once per Fiscal Year, and after
and during the continuation of an Event of Default, at such other times as the
Collateral Agent requests. The Grantors, at their own expense, shall deliver to
the Agents the results of each physical verification, which the Grantors have
made, or has caused any other Person to make on their behalf, of all or any
portion of their Inventory. The Grantors will maintain a perpetual inventory
reporting system at all times.
(c) Equipment. The Grantors shall not permit any Equipment to become
a fixture with respect to real property or to become an accession with respect
to other personal property with respect to which real or personal property the
Collateral Agent does not have a Lien.
(d) Titled Vehicles. Except with respect to vehicles having an
aggregate fair market value less than $500,000, the Grantors will deliver to the
Collateral Agent, upon reasonable request, the original of any vehicle title
certificate and provide and/or file all other documents or instruments necessary
to have the Lien of the Collateral Agent noted on any such certificate or with
the appropriate state office.
4.4 Delivery of Instruments, Securities, Chattel Paper and Documents. Each
Grantor will (a) deliver to the Collateral Agent promptly upon execution of this
Security Agreement the originals of all Chattel Paper having an individual fair
market value in excess of $250,000, Securities and Instruments constituting
Collateral (if any then exist), (b) hold in trust for the Collateral Agent upon
receipt and promptly thereafter deliver to the Collateral Agent any Chattel
Paper having an individual fair market value in excess of $250,000, Securities
and Instruments constituting Collateral from time to time acquired by any
Grantor, (c) upon either Agent's reasonable request, deliver to the Collateral
Agent (and thereafter hold in trust for the Collateral
Agent upon receipt and immediately deliver to the Collateral Agent) any
negotiable Document evidencing or constituting Collateral and (d) upon either
Agent's reasonable request, deliver to the Collateral Agent a duly executed
amendment to this Security Agreement, in the form of Exhibit I hereto (the
"Amendment"), pursuant to which such Grantor will pledge such additional
Collateral. All Pledged Shares shall be accompanied by duly executed instruments
of transfer or assignment in blank, all in form and substance reasonably
satisfactory to Collateral Agent. The Grantors hereby authorize the Collateral
Agent to attach each Amendment to this Security Agreement and agree that all
additional Collateral set forth in such Amendments shall be considered to be
part of the Collateral.
4.5 Uncertificated Pledged Collateral.
(a) Each Grantor will permit the Collateral Agent from time to time
to cause the appropriate issuers (and, if held with a securities intermediary,
such securities intermediary) of uncertificated securities or other types of
Pledged Collateral not represented by certificates to mark their books and
records with the numbers and face amounts of all such uncertificated securities
or other types of Pledged Collateral not represented by certificates and all
rollovers and replacements therefor to reflect the Lien of the Collateral Agent
granted pursuant to this Security Agreement. Each Grantor will take any actions
reasonably necessary to cause (a) the issuers of uncertificated securities which
are Pledged Collateral and (b) any securities intermediary which is the holder
of any Pledged Collateral, to cause the Collateral Agent to have and retain
Control over such Pledged Collateral. Without limiting the foregoing, each
Grantor will, with respect to Pledged Collateral held with a securities
intermediary, cause such securities intermediary to enter into a control
agreement with the Collateral Agent, in form and substance reasonably
satisfactory to the Agents, giving the Collateral Agent Control.
(b) Each Grantor hereby represents and warrants that the Equity
Interests in a partnership and/or limited liability company (i) are not dealt in
or traded on securities exchanges or in securities markets, (ii) are not
"investment company securities" (as defined in Section 8-103(b) of the Uniform
Commercial Code) and (iii) do not provide, in the related membership or
partnership agreement, certificates, if any, representing such Equity Interests
in a partnership and/or limited liability company or otherwise, that they are
securities governed by the Uniform Commercial Code of any jurisdiction.
(c) Each Grantor hereby covenants and agrees that, without the prior
express written consent of the Collateral Agent, it will not agree to any
election by any partnership or limited liability company to treat the Equity
Interests in a partnership and/or limited liability company as securities
governed by the Uniform Commercial Code of any jurisdiction and in any event
will promptly notify the Collateral Agent in writing if the representation set
forth in Section 4.5(b) hereof becomes untrue for any reason and, in such event,
take such action as the Collateral Agent may request in order to establish the
Collateral Agent's "control" (within the meaning of Section 8-106 of the Uniform
Commercial Code) over such Equity Interests in a partnership and/or limited
liability company.
4.6 Pledged Collateral.
(a) Changes in Capital Structure of Issuers. Except as permitted
under the Credit Agreement, no Grantor will (i) permit or suffer any issuer
(that is a Subsidiary of Parent) of an Equity Interest constituting Pledged
Collateral to dissolve, merge, liquidate, retire any of its Equity Interests or
other Instruments or Securities evidencing ownership, reduce its capital, sell
or encumber all or substantially all of its assets (except for Permitted Liens
and sales of assets permitted pursuant to Section 6.03 of the Credit Agreement)
or merge or consolidate with any other entity, or (ii) vote any Pledged
Collateral in favor of any of the foregoing. Each Grantor shall cause the issuer
(that is a Subsidiary of Parent) of any Equity Interests to make all necessary
amendments and modifications to such issuer's organizational documentation in
order to permit the Collateral Agent to exercise its remedies hereunder and
under the Credit Agreement (including, without limitation, in order to allow
such Collateral Agent and its permitted successors and assigns to become members
or partners, as applicable, of such issuer with the same voting and other rights
and benefits as the Grantor had with respect to such Grantor's Equity Interests
in such issuer).
(b) Issuance of Additional Securities. Except as permitted under the
Credit Agreement, no Grantor will permit or suffer the issuer of an Equity
Interest constituting Pledged Collateral to issue additional Equity Interests,
any right to receive the same or any right to receive earnings, except to the
Grantor. Any such issuances permitted under the Credit Agreement shall promptly
be pledged in accordance with the terms of this Security Agreement.
(c) Registration of Pledged Collateral. Upon the occurrence and
during the continuation of an Event of Default, the Grantors will permit any
registerable Pledged Collateral to be registered in the name of the Collateral
Agent or its nominee, provided that, in no case shall the Pledged ULC Shares be
registered in the name of the Collateral Agent other than upon 10 days' written
notice from the Administrative Agent to the Grantor, as applicable (which notice
has not been rescinded during such 10-day period).
(d) Exercise of Rights in Pledged Collateral.
(i) Without in any way limiting the foregoing and subject to
clause (ii) below, the Grantors shall have the right to exercise all voting
rights or other rights relating to the Pledged Collateral for all purposes not
inconsistent with this Security Agreement, the Credit Agreement or any other
Loan Document; provided however, that no vote or other right shall be exercised
or action taken which would have the effect of impairing the rights of the
Collateral Agent in respect of the Pledged Collateral.
(ii) Each Grantor will permit the Collateral Agent or its
nominee at any time after the occurrence and during the continuation of an Event
of Default, without notice, to exercise all voting rights or other rights
relating to Pledged Collateral (other than Pledged ULC Shares), including,
without limitation, exchange, subscription or any other rights, privileges, or
options pertaining to any Equity Interest or Investment Property constituting
Pledged Collateral (other than Pledged ULC Shares) as if it were the absolute
owner thereof.
(iii) Each Grantor shall be entitled to collect and receive
for its own use all cash dividends and interest paid in respect of the Pledged
Collateral (other than Pledged ULC Shares) to the extent not in violation of the
Credit Agreement and except as otherwise provided under the Credit Agreement and
the other Loan Documents.
4.7 Intellectual Property.
(a) The Grantors will use their commercially reasonable efforts to
secure all consents and approvals necessary or appropriate for the assignment to
or benefit of the Collateral Agent of any License held by any Grantor and to
enforce the security interests granted hereunder.
(b) Each Grantor shall notify the Agents immediately if it knows or
has reason to know that any application or registration relating to any material
Patent, Trademark or Copyright (now or hereafter existing) may become abandoned
or dedicated (except to the extent not prohibited pursuant to the Credit
Agreement), or of any material adverse determination or development (including
the institution of, or any such determination or development in, any proceeding
in the United States Patent and Trademark Office, the United States Copyright
Office or any court) regarding the Grantor's ownership of any material Patent,
Trademark or Copyright, its right to register the same, or to keep and maintain
the same.
(c) Each Grantor shall notify the Agents within ten Business Days of
the beginning of each fiscal quarter commencing with the fiscal quarter
beginning on or about July 1, 2005, if such Grantor, either directly or through
any agent, employee, licensee or designee, has filed an application for the
registration of any Patent, Trademark or Copyright with the United States Patent
and Trademark Office, the United States Copyright Office or any similar office
or agency during the preceding fiscal quarter, and, upon request of either
Agent, each Grantor shall execute and deliver any and all security agreements as
either Agent may request to evidence the Collateral Agent's first priority
security interest on such Patent, Trademark or Copyright, and the General
Intangibles of each Grantor relating thereto or represented thereby.
(d) Each Grantor, in its commercially reasonable business judgment,
shall take all actions reasonably necessary to maintain and pursue each
application, to obtain the relevant registration and to maintain the
registration of each of the Patents, Trademarks and Copyrights (now or hereafter
existing), including the filing of applications for renewal, affidavits of use,
affidavits of noncontestability and opposition and interference and cancellation
proceedings unless the applicable Grantor shall determine, in its commercially
reasonable business judgment, that such Patent, Trademark or Copyright is not
material to the conduct of such Grantor's business.
(e) Each Grantor shall, unless it shall reasonably determine that
such Patent, Trademark or Copyright is not material to the conduct of its
business or operations, promptly sue for infringement, misappropriation or
dilution and to recover any and all damages for such infringement,
misappropriation or dilution, and that such Grantor shall take such other
actions as the Agents shall deem reasonably appropriate under the circumstances
to protect such Patent, Trademark or Copyright. In the event that any Grantor
institutes suit because any of the Patents, Trademarks or Copyrights
constituting Collateral is infringed upon, or misappropriated or diluted by a
third party, the Grantor shall comply with Section 4.8.
4.8 Commercial Tort Claims. Each Grantor shall promptly, and in any event
within five (5) Business Days after a Financial Officer or other senior officer
becomes aware that the same is acquired by it, notify the Agents of any
commercial tort claim (as defined in the UCC) having an individual fair market
value in an amount in excess of $1,000,000, acquired by it and, unless the
Collateral Agent otherwise consents, the applicable Grantor shall enter into an
amendment to this Security Agreement, in the form of Exhibit I hereto, granting
to Collateral Agent a first priority security interest in such commercial tort
claim subject to Permitted Liens.
4.9 Letter-of-Credit Rights. If any Grantor is or becomes the beneficiary
of a letter of credit having an individual fair market value in an amount in
excess of $250,000, the applicable Grantor shall promptly, and in any event
within five (5) Business Days after becoming a beneficiary, notify the Agents
thereof and use commercially reasonable efforts to cause the issuer and/or
confirmation bank to (i) consent to the assignment of any Letter-of-Credit
Rights to the Collateral Agent and (ii) agree to direct all payments thereunder
to a Deposit Account at the Collateral Agent or subject to a Deposit Account
Control Agreement for application to the
Secured Obligations, in accordance with Section 2.19 of the Credit Agreement,
all in form and substance reasonably satisfactory to the Agents.
4.10 Federal, State or Municipal Claims. Each Grantor will promptly notify
the Agents of any Collateral which constitutes a claim against the United States
government or any state or local government or any instrumentality or agency
thereof having an individual fair market value in excess of $2,000,000, the
assignment of which claim is restricted by federal, state or municipal law.
4.11 No Interference. Each Grantor agrees that it will not interfere with
any right, power and remedy of the Collateral Agent provided for in this
Security Agreement or now or hereafter existing at law or in equity or by
statute or otherwise, or the exercise or beginning of the exercise by the
Collateral Agent of any one or more of such rights, powers or remedies, in each
case to the extent such rights, powers or remedies are exercised in accordance
with the Loan Documents.
4.12 Insurance. All insurance policies required under Section 5.09 of the
Credit Agreement shall name the Collateral Agent (for the benefit of the
Collateral Agent and the Secured Parties) as an additional insured or as loss
payee, as applicable, and shall contain loss payable clauses or mortgagee
clauses, through endorsements in form and substance reasonably satisfactory to
the Agents, which provide that: (i) subject to the terms of the Credit
Agreement, all proceeds thereunder with respect to any Collateral shall be
payable to the Collateral Agent; (ii) no such insurance shall be affected by any
act or neglect of the insured or owner of the property described in such policy;
and (iii) such policy and loss payable or mortgagee clauses may be canceled,
amended, or terminated only upon at least thirty days prior written notice given
to the Collateral Agent.
4.13 Collateral Access Agreements. Each Grantor shall use commercially
reasonable efforts to obtain a Collateral Access Agreement, from the lessor of
each leased property, mortgagee of owned property or bailee or consignee with
respect to any warehouse, processor or converter facility or other location
where the aggregate value of the Collateral stored or located exceeds
$5,000,000, which agreement or letter shall provide access rights, contain a
waiver or subordination of all Liens or claims that the landlord, mortgagee,
bailee or consignee may assert against the Collateral at that location, and
shall otherwise be reasonably satisfactory in form and substance to the Agents.
With respect to any locations or warehouse space leased as of the Closing Date
and thereafter, if the Collateral Agent has not received a Collateral Access
Agreement as of the Effective Date (or, if later, as of the date such location
is acquired or leased), the applicable Grantor's Eligible U.S. Inventory and
Canadian Eligible Inventory at that location shall be subject to such Reserves
as may be established by the Administrative Agent in its Permitted Discretion.
After the Closing Date, no real property or warehouse space shall be leased by
any Grantor and no Inventory shall be shipped to a processor or converter under
arrangements established after the Closing Date, unless and until either a
reasonably satisfactory Collateral Access Agreement shall first have been
obtained with respect to such location or Borrower's Eligible U.S. Inventory or
Canadian Eligible Inventory, as applicable, at that location shall be subject to
the establishment of Reserves acceptable to the Collateral Agent in its
Permitted Discretion.
4.14 [Intentionally Omitted].
4.15 Change of Name or Location; Change of Fiscal Year. Each Grantor
agrees that it shall not (a) change its name as it appears in official filings
in the state of its incorporation or organization, (b) change its chief
executive office, principal place of business, mailing address, corporate
offices or warehouses or locations at which Collateral is held or stored (other
than Collateral in transit or out for repairs), except as permitted under
Section 4.1(e), or the location of its records concerning the Collateral as set
forth in the Security Agreement, (c) change the type of entity that it is, (d)
change its organization identification number, if any, issued by its state of
incorporation or other organization, or (e) change its state of incorporation or
organization, in each case, unless the Agents shall have received at least
thirty (30) days prior written notice of such change and either (1) the
Administrative Agent shall have acknowledged in writing that such change will
not adversely affect the validity, perfection or priority of the Collateral
Agent's security interest in the Collateral, or (2) any reasonable action
requested by the Agents in connection therewith has been completed or taken or
shall be completed contemporaneously with such action (including any action to
continue the perfection of any Liens in favor of the Collateral Agent, on behalf
of Secured Parties, in any Collateral).
ARTICLE V
EVENTS OF DEFAULT AND REMEDIES
5.1 Events of Default. The occurrence of any "Event of Default" as defined
in the Credit Agreement shall constitute an Event of Default hereunder.
5.2 Remedies.
(a) Upon the occurrence and during the continuation of an Event of
Default, the Collateral Agent may exercise any or all of the following rights
and remedies (i) in respect of any Collateral other than Pledged ULC Shares or
(ii) in respect of any Collateral constituting Pledge ULC Shares insofar as (x)
neither the existence nor the exercise of such right or remedy would result in
the Agent being deemed to be a "member" of the issuer of the Pledged ULC Shares
or (y) upon the exercise of such right or remedy and following notice as
provided for in Section 4.4, the Agent or its nominee becomes the registered
holder of Pledged ULC Shares:
(i) those rights and remedies provided in this Security
Agreement, the Credit Agreement, or any other Loan Document; PROVIDED THAT, this
Section 5.2(a) shall not be understood to limit any rights available to the
Agents prior to an Event of Default;
(ii) those rights and remedies available to a secured party
under the UCC (whether or not the UCC applies to the affected Collateral) or
under any other applicable law (including, without limitation, any law governing
the exercise of a bank's right of setoff (except with respect to trust assets
held in a trust account) or bankers' lien) when a debtor is in default under a
security agreement;
(iii) give notice of sole control or any other instruction
under any Deposit Account Control Agreement or any other control agreement with
any securities intermediary and take any action therein with respect to such
Collateral, provided, however, that in the event and at such time that such
Events of Default are waived, the Collateral Agent agrees to promptly inform any
relevant third party and withdraw such notice of sole control;
(iv) without notice (except as specifically provided in
Section 8.1 or elsewhere herein), demand or advertisement of any kind to any
Grantor or any other Person, enter the premises of any Grantor where any
Collateral is located (through self-help and without judicial process) to
collect, receive, assemble, process, appropriate, sell, lease, assign, grant an
option or options to purchase or otherwise dispose of, deliver, or realize upon,
the Collateral or any part thereof in one or more parcels at public or private
sale or sales (which sales may be adjourned or continued from time to time with
or without notice and may take place at the applicable Grantor's premises or
elsewhere), for cash, on credit or for future delivery without assumption of any
credit risk, and upon such other terms as the Collateral Agent may deem
commercially reasonable; and
(v) concurrently with written notice to any Grantor, transfer
and register in its name or in the name of its nominee the whole or any part of
the Pledged Collateral, to exchange certificates or instruments representing or
evidencing Pledged Collateral for certificates or instruments of smaller or
larger denominations, to exercise the voting and all other rights as a holder
with respect thereto, to collect and receive all cash dividends, interest,
principal and other distributions made thereon and to otherwise act with respect
to the Pledged Collateral as though the Collateral Agent was the outright owner
thereof.
(b) The Collateral Agent, on behalf of the Secured Parties, may
comply with any applicable state or federal law requirements in connection with
a disposition of the Collateral and compliance will not be considered to
adversely affect the commercial reasonableness of any sale of the Collateral.
(c) The Collateral Agent shall have the right upon any such public
sale or sales and, to the extent permitted by law, upon any such private sale or
sales, to purchase for the benefit of the Collateral Agent and the Secured
Parties, the whole or any part of the Collateral so sold, free of any right of
equity redemption, which equity redemption the Grantors hereby expressly
release.
(d) Until the Collateral Agent is able to effect a sale, lease, or
other disposition of Collateral, the Collateral Agent shall have the right to
hold or use Collateral, or any part thereof, to the extent that it deems
appropriate for the purpose of preserving Collateral or its value, while using
commercially reasonable care, or for any other purpose deemed appropriate by the
Collateral Agent. The Collateral Agent may, if it so elects, seek the
appointment of a receiver or keeper to take possession of Collateral and to
enforce any of the Collateral Agent's remedies (for the benefit of the
Collateral Agent and Secured Parties), with respect to such appointment without
prior notice or hearing as to such appointment.
(e) If, after the Credit Agreement has terminated by its terms and
all of the Secured Obligations have been paid in full, there remain Swap
Obligations outstanding, the Required Secured Parties may exercise the remedies
provided in this Section 5.2 upon the occurrence of any event which would allow
or require the termination or acceleration of any Swap Obligations pursuant to
the terms of the Swap Agreement.
(f) Notwithstanding the foregoing, neither the Collateral Agent nor
the Secured Parties shall be required to (i) make any demand upon, or pursue or
exhaust any of their rights or remedies against, any Grantor, any other obligor,
guarantor, pledgor or any other Person with respect to the payment of the
Secured Obligations or to pursue or exhaust any of their rights or remedies with
respect to any Collateral therefor or any direct or indirect guarantee thereof,
(ii) marshal the Collateral or any guarantee of the Secured Obligations or to
resort to the Collateral or any such guarantee in any particular order, or (iii)
effect a public sale of any Collateral.
(g) The Grantors recognize that the Collateral Agent may be unable
to effect a public sale of any or all the Pledged Collateral and may be
compelled to resort to one or more private sales thereof in accordance with
clause (a) above. The Grantors also acknowledge that any private sale may result
in prices and other terms less favorable to the seller than if such sale were a
public sale and, notwithstanding such circumstances, agree that any such private
sale shall not be deemed to have been made in a commercially unreasonable manner
solely by virtue of such sale being private. The Collateral Agent shall be under
no obligation to delay a sale of any of the Pledged Collateral for the period of
time necessary to permit any Grantor or the issuer of the Pledged Collateral to
register such securities for public sale under the Securities Act of 1933 (the
"Act"), as amended, or under applicable state securities laws, even if the
Grantor and the issuer would agree to do so. Without limiting the generality of
the foregoing the Collateral Agent, in its discretion, (x) may, in accordance
with applicable securities laws, proceed to make such private sale
notwithstanding that a registration statement for the purpose of registering
such Pledged Collateral or part thereof could be or shall have been filed under
the Act (or similar statute), (y) may approach and negotiate with a single
purchaser to effect such sale, and (z) may restrict such sale to a purchaser who
is an accredited investor under the Act and who will represent and agree that
such purchaser is purchasing for its own account, for investment and not with a
view to the distribution or sale of such Pledged Collateral or any part thereof.
In addition to a private sale as provided above in this Section 5.2(g), if any
of the Pledged Collateral shall not be freely distributable to the public
without registration under the Act (or similar statute) at the time of any
proposed sale pursuant to this Section 5.2(g), then the Collateral Agent shall
not be required to effect such registration or cause the same to be effected
but, in Collateral Agent's discretion (subject only to applicable requirements
of law), may require that any sale hereunder (including a sale at auction) be
conducted subject to restrictions:
(i) as to the financial sophistication and ability of any
Person permitted to bid or purchase at any such sale;
(ii) as to the content of legends to be placed upon any
certificates representing the Pledged Collateral sold in such sale, including
restrictions on future transfer thereof;
(iii) as to the representations required to be made by each
Person bidding or purchasing at such sale relating to that Person's access to
financial information about the entities comprising such Pledged Collateral and
such Person's intentions as to the holding of the Pledged Collateral so sold for
investment for its own account and not with a view to the distribution thereof;
and
(iv) as to such other matters as the Collateral Agent may, in
its discretion, deem necessary or appropriate in order that such sale
(notwithstanding any failure so to register) may be effected in compliance with
the Bankruptcy Code and other laws affecting the enforcement of creditors'
rights and the Act and all applicable state securities laws.
5.3 Grantors' Obligations Upon Default. Upon the request of the Collateral
Agent after the occurrence and during the continuation of an Event of Default,
each Grantor will:
(a) assemble and make available to the Collateral Agent the
Collateral and all books and records relating thereto at any place or places
specified by the Collateral Agent, whether at each Grantor's premises or
elsewhere;
(b) pursuant to Section 5.06 of the Credit Agreement, permit the
Collateral Agent, by the Collateral Agent's representatives and agents, to
enter, occupy and use any premises (during normal business hours) where all or
any part of the Collateral, or the books and records relating thereto, or both,
are located, to take possession of all or any part of the Collateral or the
books and records relating thereto, or both, to remove all or any part of the
Collateral or the books and records relating thereto, or both, and to conduct
sales of the Collateral, without any obligation to pay any Grantor for such use
and occupancy;
(c) take, or cause an issuer (that is a Subsidiary of Parent) of
Pledged Collateral to take, any and all actions necessary to register or qualify
the Pledged Collateral to enable the Collateral Agent to consummate a public
sale or other disposition of the Pledged Collateral; and
(d) at its own expense, cause the independent certified public
accountants then engaged by any Grantor or any other party reasonably acceptable
to Administrative Agent to prepare and deliver to the Collateral Agent and each
Secured Party, at any time, and from time to time, promptly upon the Collateral
Agent's request, the following reports with respect to any Grantor: (i) a
reconciliation of all Accounts; (ii) an aging of all Accounts; (iii) trial
balances; and (iv) a test verification of such Accounts.
5.4 Grant of Intellectual Property License. For the sole purpose of
enabling the Collateral Agent to exercise the rights and remedies under this
Article V and only at such time as the Collateral Agent shall be lawfully
entitled to exercise such rights and remedies, each Grantor hereby (a) grants to
the Collateral Agent, for the benefit of the Collateral Agent and the Secured
Parties, an irrevocable, nonexclusive license (exercisable without payment of
royalty or other compensation to any of the Grantors) to use, license or
sublicense any intellectual property rights now owned or hereafter acquired by
any of the Grantors, and wherever the same may be located, and including in such
license access to all media in which any of the licensed items may be recorded
or stored and to all computer software and programs used for the compilation or
printout thereof and (b) irrevocably agrees that the Collateral Agent may sell
any of the Inventory of any Grantor directly to any person, including without
limitation persons who have previously purchased the Grantors' Inventory from
the Grantors and in connection with any such sale or other enforcement of the
Collateral Agent's rights under this Security
Agreement, may sell Inventory which bears any Trademark owned by or licensed to
any of the Grantors and any Inventory that is covered by any Copyright owned by
or licensed to any of the Grantors and the Collateral Agent may finish any work
in process and affix any Trademark owned by or licensed to any of the Grantors
and sell such Inventory as provided herein.
ARTICLE VI
ACCOUNT VERIFICATION; ATTORNEY IN FACT; PROXY
6.1 Account Verification. Upon the occurrence and during the continuation
of an Event of Default, either Agent may at any time, in such Agent's own name,
in the name of a nominee of such Agent, or in the name of any Grantor
communicate (by mail, telephone, facsimile or otherwise) with the Account
Debtors of the Grantors, parties to contracts with the Grantors and obligors in
respect of Instruments of the Grantors to verify with such Persons, to such
Agent's reasonable satisfaction, the existence, amount, terms of, and any other
matter relating to, Accounts, Instruments, Chattel Paper, payment intangibles
and/or other Receivables.
6.2 Authorization for Secured Party to Take Certain Action.
(a) Each Grantor irrevocably authorizes the Collateral Agent at any
time and from time to time in the sole discretion of the Collateral Agent and
appoints the Collateral Agent as its attorney in fact (i) to execute on behalf
of the Grantor as debtor and to file financing statements necessary in the
Collateral Agent's sole discretion to perfect and to maintain the perfection and
priority of the Collateral Agent's security interest in the Collateral, (ii)
following the occurrence and during the continuation of an Event of Default, to
endorse and collect any cash proceeds of the Collateral, (iii) to file a carbon,
photographic or other reproduction of this Security Agreement or any financing
statement with respect to the Collateral as a financing statement and to file
any other financing statement or amendment of a financing statement (which does
not add new collateral or add a debtor) in such offices as the Collateral Agent
in its sole discretion deems necessary to perfect and to maintain the perfection
and priority of the Collateral Agent's security interest in the Collateral, (iv)
to contact and enter into one or more agreements with the issuers of
uncertificated securities which are Pledged Collateral or with securities
intermediaries holding Pledged Collateral as may be necessary to give the
Collateral Agent Control over such Pledged Collateral (other than Excluded
Property); provided that Collateral Agent agrees to consult with the applicable
Grantor prior to contacting such issuer if (a) no Event of Default has occurred
and is continuing and (b) such issuer is not a Subsidiary of Parent, (v) to
apply the proceeds of any Collateral received by the Collateral Agent to the
Secured Obligations as provided in Section 7.3, (vi) following the occurrence
and during the continuation of an Event of Default and as otherwise permitted
under the Credit Agreement, to discharge past due taxes, assessments, charges,
fees or Liens on the Collateral (except for such Liens as are specifically
permitted hereunder), (vii) following the occurrence and during the continuation
of an Event of Default, to contact Account Debtors for any reason, (viii)
following the occurrence and during the continuation of an Event of Default, to
demand payment or enforce payment of the Receivables in the name of the
Collateral Agent or the Grantor, (ix) to endorse any and all checks, drafts, and
other instruments for the payment of money relating to the Receivables, (x)
following the occurrence and during the continuation of an Event of Default, to
sign the Grantor's name on any invoice or bill of lading relating to the
Receivables, drafts against any Account Debtor of the Grantor, assignments and
verifications of Receivables, (xi) following the occurrence and during the
continuation of an Event of Default, to exercise all of the Grantor's rights and
remedies with respect to the collection of the Receivables and any other
Collateral, (xii) following the occurrence and during the continuation of an
Event of Default, to settle, adjust, compromise, extend or renew the
Receivables, (xiii) following the occurrence and during the continuation of an
Event of Default, to settle, adjust or compromise any legal proceedings brought
to collect Receivables, (xiv) following the occurrence and during the
continuation of an Event of Default, to prepare, file and sign the Grantor's
name on a proof of claim in bankruptcy or similar document against any Account
Debtor of the Grantor, (xv) following the occurrence and during the continuation
of an Event of Default, to prepare, file and sign the Grantor's name on any
notice of Lien, assignment or satisfaction of Lien or similar document in
connection with the Receivables, (xvi) following the occurrence and during the
continuation of an Event of Default, to change the address for delivery of mail
addressed to the
Grantor to such address as the Collateral Agent may designate and to receive,
open and dispose of all mail addressed to the Grantor, and (xvii) after the
occurrence and during the continuation of an Event of Default in the Collateral
Agent's discretion, to do all other acts and execute any instruments consistent
with or necessary to carry out this Security Agreement or any other Loan
Document; and the Grantor agrees to reimburse the Collateral Agent within ten
(10) Business Days on demand for any reasonable payment made or any expense
incurred by the Collateral Agent in connection with any of the foregoing;
provided that, this authorization shall not relieve any Grantor of any of its
obligations under this Security Agreement or under the Credit Agreement.
(b) All acts of said attorney or designee in accordance with the
terms hereof are hereby ratified and approved. The powers conferred on the
Collateral Agent, for the benefit of the Collateral Agent and Secured Parties,
under this Section 6.2 are solely to protect the Collateral Agent's interests in
the Collateral and shall not impose any duty upon the Collateral Agent or any
Secured Party to exercise any such powers.
6.3 PROXY. THE GRANTORS HEREBY IRREVOCABLY CONSTITUTE AND APPOINT THE
COLLATERAL AGENT AS THE PROXY AND ATTORNEY-IN-FACT (AS SET FORTH IN SECTION 6.2
ABOVE) OF THE GRANTORS WITH RESPECT TO THE PLEDGED COLLATERAL (IMMEDIATELY
EFFECTIVE FOLLOWING THE OCCURRENCE OF AN EVENT OF DEFAULT), INCLUDING THE RIGHT
TO VOTE SUCH PLEDGED COLLATERAL, WITH FULL POWER OF SUBSTITUTION TO DO SO. IN
ADDITION TO THE RIGHT TO VOTE ANY SUCH PLEDGED COLLATERAL, THE APPOINTMENT OF
THE COLLATERAL AGENT AS PROXY AND ATTORNEY-IN-FACT SHALL INCLUDE THE RIGHT TO
EXERCISE ALL OTHER RIGHTS, POWERS, PRIVILEGES AND REMEDIES TO WHICH A HOLDER OF
SUCH PLEDGED COLLATERAL WOULD BE ENTITLED (INCLUDING GIVING OR WITHHOLDING
WRITTEN CONSENTS OF SHAREHOLDERS, CALLING SPECIAL MEETINGS OF SHAREHOLDERS AND
VOTING AT SUCH MEETINGS). SUCH PROXY SHALL BE EFFECTIVE, AUTOMATICALLY AND
WITHOUT THE NECESSITY OF ANY ACTION (INCLUDING ANY TRANSFER OF ANY SUCH PLEDGED
COLLATERAL ON THE RECORD BOOKS OF THE ISSUER THEREOF) BY ANY PERSON (INCLUDING
THE ISSUER OF SUCH PLEDGED COLLATERAL OR ANY OFFICER OR THE COLLATERAL AGENT
THEREOF), UPON THE OCCURRENCE AND DURING THE CONTINUATION OF AN EVENT OF
DEFAULT.
6.4 NATURE OF APPOINTMENT; LIMITATION OF DUTY. THE APPOINTMENT OF THE
COLLATERAL AGENT AS PROXY AND ATTORNEY-IN-FACT IN THIS ARTICLE VI IS COUPLED
WITH AN INTEREST AND SHALL BE IRREVOCABLE UNTIL THE DATE ON WHICH THIS SECURITY
AGREEMENT IS TERMINATED IN ACCORDANCE WITH SECTION 8.14. NOTWITHSTANDING
ANYTHING CONTAINED HEREIN, NEITHER THE COLLATERAL AGENT, NOR ANY SECURED PARTY,
NOR ANY OF THEIR RESPECTIVE AFFILIATES, OFFICERS, DIRECTORS, EMPLOYEES, AGENTS
OR REPRESENTATIVES SHALL HAVE ANY DUTY TO EXERCISE ANY RIGHT OR POWER GRANTED
HEREUNDER OR OTHERWISE OR TO PRESERVE THE SAME AND SHALL NOT BE LIABLE FOR ANY
FAILURE TO DO SO OR FOR ANY DELAY IN DOING SO, EXCEPT IN RESPECT OF DAMAGES
ATTRIBUTABLE TO THEIR OWN GROSS NEGLIGENCE OR WILLFUL MISCONDUCT; PROVIDED THAT,
IN NO EVENT SHALL THEY BE LIABLE FOR ANY PUNITIVE, EXEMPLARY, INDIRECT OR
CONSEQUENTIAL DAMAGES.
ARTICLE VII
COLLECTION AND APPLICATION OF COLLATERAL PROCEEDS;
DEPOSIT ACCOUNTS
7.1 Collection of Receivables.
(a) On or before the Closing Date, each Grantor shall (a) execute
and deliver to the Collateral Agent Deposit Account Control Agreements for each
Deposit Account maintained by the Grantors into which all cash, checks or other
similar payments relating to or constituting payments made in respect of
Receivables will be deposited (a "Collateral Deposit Account"), which Collateral
Deposit Accounts are identified as such on Exhibit B, and (b) establish lock box
service (the "Lock Boxes") with the bank(s) set forth in Exhibit B, which lock
boxes shall be subject to irrevocable lockbox agreements in the form provided by
or otherwise reasonably acceptable to the Agents and shall be accompanied by an
acknowledgment by the bank where the Lock Box is located of the Lien of the
Collateral Agent granted hereunder and of irrevocable instructions to wire all
amounts collected therein to the Collection Account (a "Lock Box Agreement").
After the Closing Date, the Grantors will comply with the terms of Section 7.2.
(b) Each Grantor shall direct all of its Account Debtors to forward
payments directly to Lock Boxes subject to Lock Box Agreements. The Lock Box
Agreement shall require all deposits to be swept daily to a Collateral Deposit
Account and shall require Collateral Agent's consent to any modification to such
Lock Box Agreements. Following the occurrence and during the continuation of an
Event of Default or at any time after the Cash Availability Trigger is less than
$50,000,000 for any ten (10) consecutive Business Days (each such event, a
"Triggering Event"), Collateral Agent shall be permitted to deliver a notice to
the depository bank directing them to take all future instructions from
Collateral Agent and not the applicable Grantor; provided that, following the
waiver of such Event of Default or following the Cash Availability Trigger being
greater than $75,000,000 for a period of sixty (60) consecutive days, as
applicable, Collateral Agent shall promptly provide notice to such depository
bank that it can resume following instructions from the applicable Grantor. If
notwithstanding the foregoing instructions, any Grantor receives any proceeds of
any Receivables, the Grantor shall receive such payments as the Collateral
Agent's trustee, and shall immediately deposit all cash, checks or other similar
payments related to or constituting payments made in respect of Receivables
received by it to a Collateral Deposit Account. The Collateral Agent shall hold
and apply funds received following a Triggering Event from a Collateral Deposit
Account as provided by the terms of Section 7.3.
7.2 Covenant Regarding New Deposit Accounts; Lock Boxes. Before opening or
replacing any Collateral Deposit Account, other Deposit Account (other than
trust accounts containing trust assets, payroll accounts or petty cash accounts
to the extent the aggregate of deposits in all petty cash accounts do not exceed
$125,000), or establishing a new Lock Box, the Grantors shall (a) provide notice
to the Agents and (b) cause each bank or financial institution in which it seeks
to open (i) such Deposit Account, to enter into a Deposit Account Control
Agreement with the Collateral Agent in order to give the Collateral Agent
Control of such Deposit Account, or (ii) a Lock Box, to enter into a Lock Box
Agreement with the Collateral Agent in order to give the Collateral Agent
Control of the Lock Box. In the case of Deposit Accounts or Lock Boxes
maintained with Secured Parties, the terms of such letter shall be subject to
the provisions of the Credit Agreement regarding setoffs.
7.3 Application of Proceeds; Deficiency. All amounts deposited in the
Collection Account shall be deemed received by the Collateral Agent in
accordance with Section 2.19 of the Credit Agreement and shall, after having
been credited in immediately available funds to the Collection Account, be
applied (and allocated) by Collateral Agent in accordance with Section 2.11(b)
of the Credit Agreement; provided that, so long as no Triggering Event has
occurred and is continuing, collections which are received into the Collection
Account shall be deposited into the Borrowers' Funding Account (as defined in
the Credit Agreement) rather than being used to reduce amounts owing under the
Credit Agreement. Any such proceeds of the Collateral shall be applied in the
order set forth in Section 2.19 of the Credit Agreement unless a court of
competent jurisdiction shall otherwise direct. The balance, if any, after all of
the Secured Obligations have been satisfied, shall be deposited by the
Collateral Agent into the Borrowers' general operating account with the
Collateral Agent. The Grantors shall remain liable for any deficiency if the
proceeds of any sale or disposition of the Collateral are insufficient to pay
all Secured Obligations, including any reasonable attorneys' fees and other
out-of-pocket expenses incurred by Collateral Agent or any Secured Party to
collect such deficiency.
ARTICLE VIII
GENERAL PROVISIONS
8.1 Waivers. To the extent permitted by applicable law. the Grantors
hereby waive notice of the time and place of any public sale or the time after
which any private sale or other disposition of all or any part of the Collateral
may be made. To the extent such notice may not be waived under applicable law,
any notice made shall be deemed reasonable if sent to the applicable Grantor,
addressed as set forth in Article IX, at least ten days prior to (i) the date of
any such public sale or (ii) the time after which any such private sale or other
disposition may be made. To the maximum extent permitted by applicable law, the
Grantors waive all claims, damages, and demands against the Collateral Agent or
any Secured Party arising out of the repossession, retention or sale of the
Collateral, except such as arise solely out of the gross negligence or willful
misconduct of the Collateral Agent or such Secured Party. To the extent it may
lawfully do so, each Grantor absolutely and irrevocably waives and relinquishes
the benefit and advantage of, and covenants not to assert against the Collateral
Agent or any Secured Party, any valuation, stay, appraisal, extension,
moratorium, redemption or similar laws and any and all rights or defenses it may
have as a surety now or hereafter existing which, but for this provision, might
be applicable to the sale of any Collateral made under the judgment, order or
decree of any court, or privately under the power of sale conferred by this
Security Agreement, or otherwise. Except as otherwise specifically provided
herein, the Grantors hereby waive presentment, demand, protest or any notice (to
the maximum extent permitted by applicable law) of any kind in connection with
this Security Agreement or any Collateral.
8.2 Limitation on Collateral Agent's and Secured Parties' Duty with
Respect to the Collateral. Except as required by applicable law, the Collateral
Agent shall have no obligation to clean-up or otherwise prepare the Collateral
for sale. The Collateral Agent and each Secured Party shall use reasonable care
with respect to the Collateral in its possession or under its control. Neither
the Collateral Agent nor any Secured Party shall have any other duty as to any
Collateral in its possession or control or in the possession or control of any
agent or nominee of the Collateral Agent or such Secured Party or any income
thereon or as to the preservation of rights against prior parties or any other
rights pertaining thereto. To the extent that applicable law imposes duties on
the Collateral Agent to exercise remedies in a commercially reasonable manner,
the Grantors acknowledge and agree that it is commercially reasonable for the
Collateral Agent (i) to fail to incur expenses deemed significant by the
Collateral Agent to prepare Collateral for disposition or otherwise to transform
raw material or work in process into finished goods or other finished products
for disposition, (ii) to fail to obtain third party consents for access to
Collateral to be disposed of, or to obtain or, if not required by other law, to
fail to obtain governmental or third party consents for the collection or
disposition of Collateral to be collected or disposed of, (iii) to fail to
exercise collection remedies against Account Debtors or other Persons obligated
on Collateral or to remove Liens on or any adverse claims against Collateral,
(iv) to exercise collection remedies against Account Debtors and other Persons
obligated on Collateral directly or through the use of collection agencies and
other collection specialists, (v) to advertise dispositions of Collateral
through publications or media of general circulation, whether or not the
Collateral is of a specialized nature, (vi) to contact other Persons, whether or
not in the same business as any of the Grantors, for expressions of interest in
acquiring all or any portion of such Collateral, (vii) to hire one or more
professional auctioneers to assist in the disposition of Collateral, whether or
not the Collateral is of a specialized nature, (viii) to dispose of Collateral
by utilizing internet sites that provide for the auction of assets of the types
included in the Collateral or that have the reasonable capacity of doing so, or
that match buyers and sellers of assets, (ix) to dispose of assets in wholesale
rather than retail markets, (x) to disclaim disposition warranties, such as
title, possession or quiet enjoyment, (xi) to purchase insurance or credit
enhancements to insure the Collateral Agent against risks of loss, collection or
disposition of Collateral or to provide to the Collateral Agent a guaranteed
return from the collection or disposition of Collateral, or (xii) to the extent
deemed appropriate by the Collateral Agent, to obtain the services of other
brokers, investment bankers, consultants and other professionals to assist the
Collateral Agent in the collection or disposition of any of the Collateral. The
Grantors acknowledge that the purpose of this Section 8.2 is to provide
non-exhaustive indications of what actions or omissions by the Collateral Agent
would be commercially reasonable in the Collateral Agent's exercise of remedies
against the
Collateral and that other actions or omissions by the Collateral Agent shall not
be deemed commercially unreasonable solely on account of not being indicated in
this Section 8.2. Without limitation upon the foregoing, nothing contained in
this Section 8.2 shall be construed to grant any rights to the Grantors or to
impose any duties on the Collateral Agent that would not have been granted or
imposed by this Security Agreement or by applicable law in the absence of this
Section 8.2.
8.3 Compromises and Collection of Collateral. The Grantors and the
Collateral Agent recognize that setoffs, counterclaims, defenses and other
claims may be asserted by obligors with respect to certain of the Receivables,
that certain of the Receivables may be or become uncollectible in whole or in
part and that the expense and probability of success in litigating a disputed
Receivable may exceed the amount that reasonably may be expected to be recovered
with respect to a Receivable. In view of the foregoing, the Grantors agree that
the Collateral Agent may at any time and from time to time, if an Event of
Default has occurred and is continuing, compromise with the obligor on any
Receivable, accept in full payment of any Receivable such amount as the
Collateral Agent in its sole discretion shall determine or abandon any
Receivable, and any such action by the Collateral Agent shall be commercially
reasonable so long as the Collateral Agent acts in good faith based on
information known to it at the time it takes any such action.
8.4 Secured Party Performance of Debtor Obligations. Without having any
obligation to do so, either Agent may perform or pay any obligation which any
Grantor agreed to perform or pay in this Security Agreement to the extent
Grantors fail to do so and the Grantors shall reimburse such Agent for any
amounts paid by such Agent pursuant to this Section 8.4. The Grantors'
obligation to reimburse the Collateral Agent pursuant to the preceding sentence
shall be a Secured Obligation payable promptly and in any event within ten (10)
days after written demand therefor.
8.5 Specific Performance of Certain Covenants. Each Grantor acknowledges
and agrees that a breach of any of the covenants contained in Sections 4.4, 4.5,
4.6, 4.7, 4.8, 4.9, 4.10, 4.12, 4.13, 4.14, 4.15, 4.16, 5.3, or 8.7 or in
Article VII will cause irreparable injury to the Collateral Agent and the
Secured Parties, that the Collateral Agent and Secured Parties have no adequate
remedy at law in respect of such breaches and therefore agrees, without limiting
the right of the Collateral Agent or the Secured Parties to seek and obtain
specific performance of other obligations of the Grantors contained in this
Security Agreement, that the covenants of the Grantors contained in the Sections
referred to in this Section 8.5 shall be specifically enforceable against the
Grantors.
8.6 Dispositions Not Authorized. No Grantor is authorized to sell or
otherwise dispose of the Collateral except as set forth in Section 6.03 of the
Credit Agreement and notwithstanding any course of dealing between any Grantor
and the Collateral Agent or other conduct of the Collateral Agent, no
authorization to sell or otherwise dispose of the Collateral (except as set
forth in Section 6.03 of the Credit Agreement) shall be binding upon the
Collateral Agent or the Secured Parties unless such authorization is in writing
signed by the Collateral Agent with the consent or at the direction of the
Required Secured Parties.
8.7 No Waiver; Amendments; Cumulative Remedies. No delay or omission of
the Collateral Agent or any Secured Party to exercise any right or remedy
granted under this Security Agreement shall impair such right or remedy or be
construed to be a waiver of any Default or an acquiescence therein, and any
single or partial exercise of any such right or remedy shall not preclude any
other or further exercise thereof or the exercise of any other right or remedy.
No waiver, amendment or other variation of the terms, conditions or provisions
of this Security Agreement whatsoever shall be valid unless in writing signed by
the Collateral Agent with the concurrence or at the direction of the Secured
Parties required under Section 9.02 of the Credit Agreement and then only to the
extent in such writing specifically set forth. All rights and remedies contained
in this Security Agreement or by law afforded shall be cumulative and all shall
be available to the Collateral Agent and the Secured Parties until the Secured
Obligations have been paid in full, no Letters of Credit are outstanding and no
commitments of the Collateral Agent or the Lenders which would give rise to any
Secured Obligations are outstanding.
8.8 Limitation by Law; Severability of Provisions. All rights, remedies
and powers provided in this Security Agreement may be exercised only to the
extent that the exercise thereof does not violate any applicable provision of
law, and all the provisions of this Security Agreement are intended to be
subject to all applicable mandatory provisions of law that may be controlling
and to be limited to the extent necessary so that they shall not render this
Security Agreement invalid, unenforceable or not entitled to be recorded or
registered, in whole or in part. Any provision in any this Security Agreement
that is held to be inoperative, unenforceable, or invalid in any jurisdiction
shall, as to that jurisdiction, be inoperative, unenforceable, or invalid
without affecting the remaining provisions in that jurisdiction or the
operation, enforceability, or validity of that provision in any other
jurisdiction, and to this end the provisions of this Security Agreement are
declared to be severable.
8.9 Reinstatement. This Security Agreement shall remain in full force and
effect and continue to be effective should any petition be filed by or against
any Grantor for liquidation or reorganization, should any Grantor become
insolvent or make an assignment for the benefit of any creditor or creditors or
should a receiver or trustee be appointed for all or any significant part of any
Grantor's assets, and shall continue to be effective or be reinstated, as the
case may be, if at any time payment and performance of the Secured Obligations,
or any part thereof, is, pursuant to applicable law, rescinded or reduced in
amount, or must otherwise be restored or returned by any obligee of the Secured
Obligations, whether as a "voidable preference," "fraudulent conveyance," or
otherwise, all as though such payment or performance had not been made. In the
event that any payment, or any part thereof, is rescinded, reduced, restored or
returned, the Secured Obligations shall be reinstated and deemed reduced only by
such amount paid and not so rescinded, reduced, restored or returned.
8.10 Benefit of Agreement. The terms and provisions of this Security
Agreement shall be binding upon and inure to the benefit of the Grantors, the
Collateral Agent and the Secured Parties and their respective successors and
permitted assigns (including all persons who become bound as a debtor to this
Security Agreement), except that the Grantors shall not have the right to assign
their rights or delegate their obligations under this Security Agreement or any
interest herein, without the prior written consent of the Collateral Agent. No
sales of participations, assignments, transfers, or other dispositions of any
agreement governing the Secured Obligations or any portion thereof or interest
therein shall in any manner impair the Lien granted to the Collateral Agent, for
the benefit of the Collateral Agent and the Secured Parties, hereunder.
8.11 Survival of Representations. All representations and warranties of
the Grantors contained in this Security Agreement shall survive the execution
and delivery of this Security Agreement.
8.12 Taxes and Expenses. Subject to the terms of the Credit Agreement, any
taxes (including income taxes) payable or ruled payable by Federal or State
authority in respect of this Security Agreement shall be paid by the Grantors,
together with interest and penalties, if any. Subject to Section 9.03 of the
Credit Agreement, the Grantors shall reimburse the Collateral Agent for any and
all reasonable out-of-pocket expenses and charges (including reasonable
attorneys', auditors' and accountants' fees) paid or incurred by the Collateral
Agent in connection with the preparation, execution, delivery, administration,
collection and enforcement of this Security Agreement and in the audit,
analysis, administration, collection, preservation or sale of the Collateral
(including the expenses and charges associated with any periodic or special
audit of the Collateral undertaken in accordance with the terms of the Loan
Documents). Subject to Section 9.03 of the Credit Agreement, any and all costs
and expenses incurred by the Grantors in the performance of actions required
pursuant to the terms hereof shall be borne solely by the Grantors.
8.13 Headings. The title of and section headings in this Security
Agreement are for convenience of reference only, and shall not govern the
interpretation of any of the terms and provisions of this Security Agreement.
8.14 Termination and Release.
(a) This Security Agreement shall continue in effect
(notwithstanding the fact that from time to time there may be no Secured
Obligations outstanding) until (i) the Credit Agreement has terminated pursuant
to its express terms and (ii) all of the Secured Obligations other than
Unliquidated Obligations for which a claim has not yet been asserted, have been
paid and performed in full (or with respect to any outstanding Letters of
Credit, a cash deposit or Supporting Letter of Credit has been delivered to the
Collateral Agent as required by the Credit Agreement) and no commitments of the
Collateral Agent or the Lenders which would give rise to any Secured Obligations
are outstanding.
(b) The Pledged Collateral shall be released from the Lien of this
Agreement if such Pledged Collateral is disposed of in a disposition permitted
pursuant to the Credit Agreement. Upon termination hereof or any release of
Pledged Collateral in accordance with the provisions of the Credit Agreement,
the Collateral Agent shall, upon the request and at the sole cost and expense of
the Grantors, assign, transfer and deliver to Grantor, against receipt and
without recourse to or warranty by the Collateral Agent except as to the fact
that the Collateral Agent has not encumbered the released assets, such of the
Pledged Collateral to be released (in the case of a release) as may be in
possession of the Collateral Agent and as shall not have been sold or otherwise
applied pursuant to the terms hereof, and, with respect to any other Pledged
Collateral, proper documents and instruments (including UCC-3 termination
statements or releases) acknowledging the termination hereof or the release of
such Pledged Collateral, as the case may be.
8.15 Entire Agreement. Except as covered by the Canadian Security
Agreement, this Security Agreement embodies the entire agreement and
understanding between the Grantors and the Collateral Agent relating to the
Collateral and supersedes all prior agreements and understandings between any
Grantor and the Collateral Agent relating to the Collateral. To the extent the
provisions of this Security Agreement are inconsistent with the provisions of
the Canadian Security Agreement, the provisions of this Security Agreement shall
govern solely in connection with the security interests granted by the Canadian
Borrower or a Canadian Subsidiary with respect to such Canadian Borrower's or
Canadian Subsidiaries' assets located in the United States, if any.
8.16 CHOICE OF LAW. THIS SECURITY AGREEMENT SHALL BE GOVERNED BY, AND
CONSTRUED IN ACCORDANCE WITH, THE INTERNAL LAWS (AND NOT THE LAW OF CONFLICTS)
OF THE STATE OF NEW YORK, BUT GIVING EFFECT TO FEDERAL LAWS APPLICABLE TO
NATIONAL BANKS.
8.17 CONSENT TO JURISDICTION. THE GRANTORS HEREBY IRREVOCABLY SUBMITS TO
THE NON-EXCLUSIVE JURISDICTION OF ANY U.S. FEDERAL OR NEW YORK STATE COURT
SITTING IN NEW YORK, NEW YORK IN ANY ACTION OR PROCEEDING ARISING OUT OF OR
RELATING TO THIS SECURITY AGREEMENT OR ANY OTHER LOAN DOCUMENT AND EACH PARTY
HERETO HEREBY IRREVOCABLY AGREE THAT ALL CLAIMS IN RESPECT OF SUCH ACTION OR
PROCEEDING MAY BE HEARD AND DETERMINED IN ANY SUCH COURT AND IRREVOCABLY WAIVES
ANY OBJECTION THEY MAY NOW OR HEREAFTER HAVE AS TO THE VENUE OF ANY SUCH SUIT,
ACTION OR PROCEEDING BROUGHT IN SUCH A COURT OR THAT SUCH COURT IS AN
INCONVENIENT FORUM. NOTHING HEREIN SHALL LIMIT THE RIGHT OF THE COLLATERAL AGENT
OR ANY SECURED PARTY TO BRING PROCEEDINGS AGAINST ANY GRANTOR IN THE COURTS OF
ANY OTHER JURISDICTION.
8.18 WAIVER OF JURY TRIAL. THE GRANTORS, THE COLLATERAL AGENT AND EACH
SECURED PARTY HEREBY WAIVE TRIAL BY JURY IN ANY JUDICIAL PROCEEDING INVOLVING,
DIRECTLY OR INDIRECTLY, ANY MATTER (WHETHER SOUNDING IN TORT, CONTRACT OR
OTHERWISE) IN ANY WAY ARISING OUT OF, RELATED TO, OR CONNECTED WITH THIS
SECURITY AGREEMENT OR ANY OTHER LOAN DOCUMENT OR THE RELATIONSHIP ESTABLISHED
THEREUNDER.
8.19 Indemnity. The Grantors hereby agree to indemnify the Collateral
Agent and the Secured Parties, and their respective successors, permitted
assigns, agents and employees, from and against any and all liabilities,
damages, penalties, suits, costs, and expenses of any kind and nature
(including, without limitation, all reasonable expenses of litigation or
preparation therefor whether or not the Collateral Agent or any Secured Party is
a party thereto) imposed on, incurred by or asserted against the Collateral
Agent or the Secured Parties, or their respective successors, assigns, agents
and employees, in any way relating to or arising out of this Security Agreement,
or the manufacture, purchase, acceptance, rejection, ownership, delivery, lease,
possession, use, operation, condition, sale, return or other disposition of any
Collateral (including, without limitation, latent and other defects, whether or
not discoverable by the Collateral Agent or the Secured Parties or any Grantor,
and any claim for Patent, Trademark or Copyright infringement); provided that
the Grantors shall not be obligated to indemnify the Collateral Agent or the
Secured Parties, or their respective successors, assigns, agents and employees
to the extent that such liabilities, damages, penalties, suits, costs, and
expenses of any kind and nature resulted from the gross negligence or willful
misconduct of the Collateral Agent or the Secured Parties, or their respective
successors, assigns, agents and employees.
8.20 Counterparts. This Security Agreement may be executed in any number
of counterparts, all of which taken together shall constitute one agreement, and
any of the parties hereto may execute this Security Agreement by signing any
such counterpart. Delivery of an executed counterpart of a signature page of
this Security Agreement by facsimile shall be effective as delivery of a
manually executed counterpart of this Security Agreement.
8.21 Amendment and Restatement. This Security Agreement is an amendment
and restatement of the Existing Security Agreements. All "Obligations" under the
Existing Security Agreements and all Liens securing payment of "Obligations"
under the Existing Security Agreements shall in all respects be continuing and
this Security Agreement shall not be deemed to evidence or result in a novation
or repayment and reborrowing of such "Obligations". This Security Agreement
shall supersede the Existing Security Agreements. From and after the Effective
Date, this Security Agreement shall govern the terms of the "Obligations" under
the Existing Security Agreements. To the extent not replaced by Loan Documents
dated as of the date of this Agreement, any "Loan Documents" (as defined in the
Existing Security Agreements) executed in connection with the Existing Credit
Agreement (other than any such Loan Document that is specifically terminated by
the parties thereto) shall continue to be effective, and all references in those
prior Loan Documents to the "Security Agreement", "Pledge Agreement" or words of
like import shall be deemed to refer to this Security Agreement without further
amendment thereof.
8.22 Pledged ULC Shares. Notwithstanding any provisions to the contrary
contained in this Security Agreement or any other document or agreement among
all or some of the parties hereto, the Grantor, as indicated, is the sole
registered and beneficial owner of all Pledged ULC Shares and will remain so
until such time as such Pledged ULC Shares are effectively transferred into the
name of the Agent or any other person on the books and records of the Pledged
ULC Share Issuer. Accordingly such Grantor shall be entitled to receive and
retain for its own account any dividend on or other distribution, if any, in
respect of such Pledged ULC Shares (except insofar as such Grantor has granted a
security interest in such dividend on or other distribution, and any shares
which are collateral shall be delivered to the Agent to hold as collateral
hereunder) and shall have the right to vote such collateral and to control the
direction, management and policies of Pledged ULC Share Issuer or other issuer
of the Pledged ULC Shares to the same extent as the Grantor would if such
collateral were not pledged to the Agent pursuant hereto. Nothing in this
Security Agreement or any other document or agreement among all or some of the
parties hereto is intended to, and nothing in this Security Agreement or any
other document or agreement among all or some of the parties hereto shall,
constitute the Agent or any person other than the Grantor, a member of any
unlimited company for the purposes of the Companies Act (Nova Scotia) until such
time as notice is given to the applicable Grantor and further steps are taken
thereunder so as to register the Agent or other person as holder of Pledged ULC
Shares. To the extent any provision hereof would have the effect of constituting
the Agent as a member of the Pledged ULC Share Issuer or other issuer of the
Pledged ULC Shares prior to such time, such provision shall be severed therefrom
and ineffective with respect
to Collateral which are Pledged ULC Shares without otherwise invalidating or
rendering unenforceable this Security Agreement or invalidating or rendering
unenforceable such provision insofar as it relates to Collateral which are not
Pledged ULC Shares. Except upon the exercise of rights to sell or otherwise
dispose of the Pledged ULC Shares following the occurrence of an Event of
Default hereto, the applicable Grantor shall not cause or permit, or enable any
issuer in which it holds Pledged ULC Shares to cause or permit, the Agent to:
(a) be registered as shareholders or members of such issuer; (b) have any
notation entered in their favour in the share register of such issuer; (c) be
held out as shareholders or members of such issuer; (d) to receive, directly or
indirectly, any dividends, property or other distributions from the Pledged ULC
Share Issuer or other issuer by reason of the Agent holding a security interest
in the Pledged ULC Shares; or (e) to act as a shareholder or member of the
Pledged ULC Share Issuer or other issuer of the Pledged ULC Shares, or exercise
any rights of a shareholder or member including the right to attend a meeting of
the Pledged ULC Share Issuer or other issuer of the Pledged ULC Shares or vote
the Pledged ULC Shares.
ARTICLE IX
NOTICES
9.1 Sending Notices. Any notice required or permitted to be given under
this Security Agreement shall be sent by United States mail, telecopier,
personal delivery or nationally established overnight courier service, and shall
be deemed received (a) when received, if sent by hand or overnight courier
service, or mailed by certified or registered mail notices or (b) when sent, if
sent by telecopier (except that, if not given during normal business hours for
the recipient, shall be deemed to have been given at the opening of business on
the next Business Day for the recipient), in each case addressed to the Grantors
at the applicable address set forth on Exhibit A as their principal place of
business, and to the Collateral Agent and the Secured Parties at the addresses
set forth in accordance with Section 9.01 of the Credit Agreement.
9.2 Change in Address for Notices. Each of the Grantors, the Collateral
Agent and the Secured Parties may change the address for service of notice upon
it by a notice in writing to the other parties.
ARTICLE X
THE COLLATERAL AGENT
Bank of America, N.A. has been appointed Collateral Agent for the Secured
Parties hereunder pursuant to Article VIII of the Credit Agreement. It is
expressly understood and agreed by the parties to this Security Agreement that
any authority conferred upon the Collateral Agent hereunder is subject to the
terms of the delegation of authority made by the Lenders to the Collateral Agent
pursuant to the Credit Agreement, and that the Collateral Agent has agreed to
act (and any successor Collateral Agent shall act) as such hereunder only on the
express conditions contained in such Article VIII. Any successor Collateral
Agent appointed in accordance with Article VIII of the Credit Agreement shall be
entitled to all the rights, interests and benefits of the Collateral Agent
hereunder.
[Signature Page Follows]
IN WITNESS WHEREOF, each Grantor and the Collateral Agent have executed
this Security Agreement as of the date first above written.
DURA AUTOMOTIVE SYSTEMS, INC.
By: /s/ Keith Marchiando
---------------------------------
Name:
Title:
[Signature Page to Pledge and Security Agreement]
S-1
DURA OPERATING CORP.
By: /s/ Keith Marchiando
---------------------------------
Name:
Title:
[Signature Page to Pledge and Security Agreement]
S-2
DURA AUTOMOTIVE SYSTEMS (CANADA), LTD.
By: /s/ Keith Marchiando
---------------------------------
Name:
Title:
[Signature Page to Pledge and Security Agreement]
S-3
DURA AUTOMOTIVE CANADA ULC
By: /s/ Keith Marchiando
---------------------------------
Name:
Title:
[Signature Page to Pledge and Security Agreement]
S-4
DURA ONTARIO INC.
By: /s/ Keith Marchiando
---------------------------------
Name:
Title:
[Signature Page to Pledge and Security Agreement]
S-5
DURA CANADA LP
By: /s/ Keith Marchiando
---------------------------------
Name:
Title:
[Signature Page to Pledge and Security Agreement]
S-6
TRIDENT AUTOMOTIVE LIMITED
By: /s/ Keith Marchiando
---------------------------------
Name:
Title:
[Signature Page to Pledge and Security Agreement]
S-7
TRIDENT AUTOMOTIVE CANADA CO.
By: /s/ Keith Marchiando
---------------------------------
Name:
Title:
[Signature Page to Pledge and Security Agreement]
S-8
DURA HOLDINGS ULC
By: /s/ Keith Marchiando
----------------------
Name:
Title:
[Signature Page to Pledge and Security Agreement]
S-9
DURA HOLDINGS CANADA LP
By: /s/ Keith Marchiando
---------------------------------
Name:
Title:
[Signature Page to Pledge and Security Agreement]
S-10
DURA OPERATING CANADA LP
By: /s/ Keith Marchiando
---------------------------------
Name:
Title:
[Signature Page to Pledge and Security Agreement]
S-11
AUTOMOTIVE AVIATION PARTNERS, LLC
By: DuraAircraft Operating Company,
LLC, its managing member
By: Dura Operating Corp.
Its: Sole Member
By: /s/ Keith Marchiando
---------------------------------
Name:
Title:
[Signature Page to Pledge and Security Agreement]
S-12
ADWEST ELECTRONICS, INC.
By: /s/ Keith Marchiando
---------------------------------
Name:
Title:
[Signature Page to Pledge and Security Agreement]
S-13
ATWOOD AUTOMOTIVE, INC.
By: /s/ Keith Marchiando
---------------------------------
Name:
Title:
[Signature Page to Pledge and Security Agreement]
S-14
DURA CABLES NORTH LLC
By: Atwood Automotive, Inc.
Its: Sole Member
By: /s/ Keith Marchiando
---------------------------------
Name:
Title:
[Signature Page to Pledge and Security Agreement]
S-15
DURA CABLES SOUTH LLC
By: Atwood Automotive, Inc.
Its: Sole Member
By: /s/ Keith Marchiando
---------------------------------
Name:
Title:
[Signature Page to Pledge and Security Agreement]
S-16
DURA G.P.
By: Dura Operating Corp
Its: Managing General Partner
By: /s/ Keith Marchiando
---------------------------------
Name:
Title:
[Signature Page to Pledge and Security Agreement]
S-17
DURA SPICEBRIGHT, INC.
as a Loan Guarantor
By: /s/ Keith Marchiando
---------------------------------
Name:
Title:
[Signature Page to Pledge and Security Agreement]
S-18
MARK I MOLDED PLASTICS OF TENNESSEE,
INC.
By: /s/ Keith Marchiando
---------------------------------
Name:
Title:
[Signature Page to Pledge and Security Agreement]
S-19
DURA GLOBAL TECHNOLOGIES, INC.
By: /s/ Keith Marchiando
---------------------------------
Name:
Title:
[Signature Page to Pledge and Security Agreement]
S-20
DURA AUTOMOTIVE SYSTEMS OF INDIANA,
INC.
By: /s/ Keith Marchiando
---------------------------------
Name:
Title:
[Signature Page to Pledge and Security Agreement]
S-21
DURA AIRCRAFT OPERATING COMPANY,
LLC.
By: Dura Operating Corp.
Its: Sole Member
By: /s/ Keith Marchiando
---------------------------------
Name:
Title:
[Signature Page to Pledge and Security Agreement]
S-22
DURA BRAKE SYSTEMS, L.L.C.
By: Dura Operating Corp.
Its: Sole Member
By: /s/ Keith Marchiando
---------------------------------
Name:
Title:
[Signature Page to Pledge and Security Agreement]
S-23
DURA SHIFTER L.L.C.
By: Dora Operating Corp.
Its: Sole Member
By: /s/ Keith Marchiando
---------------------------------
Name:
Title:
[Signature Page to Pledge and Security Agreement]
S-24
DURA SERVICES L.L.C.
By: /s/ Keith Marchiando
---------------------------------
Name:
Title: Manager
[Signature Page to Pledge and Security Agreement]
S-25
DURA MANCELONA L.L.C.
By: /s/ Keith Marchiando
---------------------------------
Name:
Title: Manager
[Signature Page to Pledge and Security Agreement]
S-26
DURA FREMONT L.L.C.
By: /s/ Keith Marchiando
---------------------------------
Name:
Title: Manager
[Signature Page to Pledge and Security Agreement]
S-27
DURA GLADWIN L.L.C.
By: /s/ Keith Marchiando
---------------------------------
Name:
Title: Manager
[Signature Page to Pledge and Security Agreement]
S-28
DURA AUTOMOTIVE SYSTEMS CABLE
OPERATIONS, INC.
By: /s/ Keith Marchiando
---------------------------------
Name:
Title:
[Signature Page to Pledge and Security Agreement]
S-29
UNIVERSAL TOOL & STAMPING COMPANY,
INC.
By: /s/ Keith Marchiando
---------------------------------
Name:
Title:
[Signature Page to Pledge and Security Agreement]
S-30
TRIDENT AUTOMOTIVE, L.P.
By: Trident Automotive Ltd.
Its: General Partner
By: /s/ Keith Marchiando
---------------------------------
Name:
Title:
[Signature Page to Pledge and Security Agreement]
S-31
TRIDENT AUTOMOTIVE, L.L.C.
By: Trident Automotive Canada Co.
Its: Managing Member
By: /s/ Keith Marchiando
---------------------------------
Name:
Title:
[Signature Page to Pledge and Security Agreement]
S-32
ATWOOD MOBILE PRODUCTS, INC.
By: /s/ Keith Marchiando
---------------------------------
Name:
Title:
[Signature Page to Pledge and Security Agreement]
S-33
CREATION GROUP HOLDINGS, INC.
By: /s/ Keith Marchiando
---------------------------------
Name:
Title:
[Signature Page to Pledge and Security Agreement]
S-34
KEMBERLY, INC.
By: /s/ Keith Marchiando
---------------------------------
Name:
Title:
[Signature Page to Pledge and Security Agreement]
S-35
CREATION GROUP, INC.
By: /s/ Keith Marchiando
---------------------------------
Name:
Title:
[Signature Page to Pledge and Security Agreement]
S-36
CREATION GROUP TRANSPORTATION, INC.
By: /s/ Keith Marchiando
---------------------------------
Name:
Title:
[Signature Page to Pledge and Security Agreement]
S-37
KEMBERLY, LLC
By: /s/ Keith Marchiando
---------------------------------
Name:
Title:
[Signature Page to Pledge and Security Agreement]
S-38
SPEC-TEMP, INC.
By: /s/ Keith Marchiando
---------------------------------
Name:
Title:
[Signature Page to Pledge and Security Agreement]
S-39
CREATION WINDOWS, INC.
By: /s/ Keith Marchiando
---------------------------------
Name:
Title:
[Signature Page to Pledge and Security Agreement]
S-40
CREATION WINDOWS, LLC
By: /s/ Keith Marchiando
---------------------------------
Name:
Title:
[Signature Page to Pledge and Security Agreement]
S-41
BANK OF AMERICA, N.A., as Collateral Agent
By: /s/ Brian Conok
---------------------------------
Name: Brian Conok
Title: Senior Vice President
[Signature Page to Pledge and Security Agreement]
S-42