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EXHIBIT 4.1
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EXECUTION COPY
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CREDIT AGREEMENT
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$200,000,000 U.S. CREDIT FACILITY
AND
$50,000,000 CANADIAN CREDIT FACILITY
DATED AS OF FEBRUARY 17, 1998
AMONG
EVI, INC.
AS U.S. BORROWER,
EVI OIL TOOLS CANADA LTD.,
AS CANADIAN BORROWER,
THE SUBSIDIARY GUARANTORS,
CHASE BANK OF TEXAS, NATIONAL ASSOCIATION,
AS U.S. ADMINISTRATIVE AGENT AND AS A U.S. LENDER,
THE BANK OF NOVA SCOTIA,
AS CANADIAN AGENT, AS DOCUMENTATION AGENT,
AS A U.S. LENDER AND AS A CANADIAN LENDER
ABN AMRO BANK, N.V.,
AS SYNDICATION AGENT AND AS A U.S. LENDER
AND
THE OTHER LENDERS NOW OR HEREAFTER
PARTIES HERETO
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TABLE OF CONTENTS
Page
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ARTICLE I
DEFINITIONS; ACCOUNTING TERMS; INTERPRETATION
SECTION 1.01. Definitions. ...................................................................2
SECTION 1.02. Types of Borrowings.............................................................33
SECTION 1.03. Accounting Terms; Changes in GAAP...............................................33
SECTION 1.04. Interpretation..................................................................34
ARTICLE II
COMMITMENTS; LOANS; BA'S AND LETTERS OF CREDIT
SECTION 2.01. Loans and BA's..................................................................35
SECTION 2.02. Letters of Credit...............................................................36
SECTION 2.03. Certain Provisions Relating to Bankers' Acceptances. ..........................41
SECTION 2.04. Terminations, Reductions or Reallocations of Commitments.......................44
SECTION 2.05. Commitment Fees.................................................................45
SECTION 2.06. Several Obligations.............................................................46
SECTION 2.07. Notes...........................................................................46
SECTION 2.08. Use of Proceeds.................................................................47
SECTION 2.09. Currency Fluctuations...........................................................47
ARTICLE III
BORROWINGS, PREPAYMENTS AND INTEREST OPTIONS
SECTION 3.01. Borrowings......................................................................48
SECTION 3.02. Prepayments.....................................................................48
SECTION 3.03. Interest Options................................................................49
ARTICLE IV
PAYMENTS; PRO RATA TREATMENT; COMPUTATIONS, ETC.
SECTION 4.01. Payments........................................................................54
SECTION 4.02. Pro Rata Treatment..............................................................56
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SECTION 4.03. Certain Actions, Notices, Etc...................................................56
SECTION 4.04. Non-Receipt of Funds by Either Agent............................................57
SECTION 4.05. Sharing of Payments, Etc........................................................57
ARTICLE V
CONDITIONS PRECEDENT
SECTION 5.01. Conditions Precedent to the Initial Credit Event................................58
SECTION 5.02. Conditions Precedent to All Credit Events.......................................60
SECTION 5.03. Delivery of Documents...........................................................61
ARTICLE VI
REPRESENTATIONS AND WARRANTIES
SECTION 6.01. Organization and Qualification..................................................62
SECTION 6.02. Authorization, Validity, Etc....................................................62
SECTION 6.03. Governmental Consents, Etc......................................................62
SECTION 6.04. Conflicting or Adverse Agreements or Restrictions...............................62
SECTION 6.05. Title to Assets.................................................................63
SECTION 6.06. Litigation......................................................................63
SECTION 6.07. Information Memorandum; Financial Statements....................................63
SECTION 6.08. Default.........................................................................63
SECTION 6.09. Investment Company Act..........................................................63
SECTION 6.10. Public Utility Holding Company Act..............................................64
SECTION 6.11. ERISA...........................................................................64
SECTION 6.12. Tax Returns and Payments........................................................64
SECTION 6.13. Requirements of Law; Environmental Matters......................................65
SECTION 6.14. Purpose of Loans................................................................66
SECTION 6.15. Franchises and Other Rights.....................................................66
SECTION 6.16. No Intent to Hinder, Delay or Defraud...........................................66
SECTION 6.17. Designation of this Agreement and the Obligations...............................66
ARTICLE VII
AFFIRMATIVE COVENANTS
SECTION 7.01. Information Covenants...........................................................67
SECTION 7.02. Books, Records and Inspections..................................................70
SECTION 7.03. Insurance and Maintenance of Properties.........................................70
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SECTION 7.04. Payment of Taxes and other Claims...............................................71
SECTION 7.05. Existence.......................................................................71
SECTION 7.06. Compliance with Statutes, Etc...................................................71
SECTION 7.07. ERISA Information and Compliance................................................71
SECTION 7.08. End of Fiscal Years.............................................................72
SECTION 7.09. Performance of Loan Documents...................................................72
SECTION 7.10. Indemnification for Breach of Representations or Covenants......................73
SECTION 7.11. Capital Adequacy................................................................73
SECTION 7.12. Subsidiaries....................................................................73
ARTICLE VIII
NEGATIVE COVENANTS
SECTION 8.01. Material Change in Business.....................................................74
SECTION 8.02. Consolidation, Merger, Sale or Purchase of Assets, Etc..........................74
SECTION 8.03. Liens...........................................................................77
SECTION 8.04. Indebtedness....................................................................77
SECTION 8.05. Stock Issuance..................................................................78
SECTION 8.06. Investments.....................................................................78
SECTION 8.07. Ownership of Subsidiaries.......................................................80
SECTION 8.08. Tangible Net Worth..............................................................81
SECTION 8.09. Other Financial Covenants.......................................................81
SECTION 8.10. Limitation on Transactions with Affiliates......................................81
SECTION 8.11. Restrictions on Subsidiary Dividends............................................82
SECTION 8.12. Debentures......................................................................82
SECTION 8.13. The Debenture Indenture.........................................................82
SECTION 8.14. Share Capital of Certain Material Foreign Subsidiaries..........................82
ARTICLE IX
EVENTS OF DEFAULT AND REMEDIES
SECTION 9.01. Events of Default and Remedies..................................................82
SECTION 9.02. Right of Setoff.................................................................86
SECTION 9.03. Preservation of Security for Unmatured Obligations..............................86
SECTION 9.04. Other Remedies..................................................................87
SECTION 9.05. Currency Conversion After Maturity..............................................87
SECTION 9.06. Application of Moneys During Continuation of Event of Default...................87
ARTICLE X
AGENTS
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SECTION 10.01. Appointment, Powers and Immunities.............................................88
SECTION 10.02. Reliance.......................................................................89
SECTION 10.03. Defaults; Events of Default....................................................90
SECTION 10.04. Material Written Notices.......................................................90
SECTION 10.05. Rights as a Lender.............................................................90
SECTION 10.06. Indemnification................................................................90
SECTION 10.07. Non-Reliance on Agents and Other Lenders.......................................91
SECTION 10.08. Failure to Act.................................................................92
SECTION 10.09. Resignation or Removal of an Agent.............................................92
SECTION 10.10. No Partnership.................................................................92
SECTION 10.11. Consents under Security Documents..............................................93
ARTICLE XI
U.S. BORROWER GUARANTY
SECTION 11.01. U.S. Borrower Guaranty.........................................................93
SECTION 11.02. Continuing Guaranty............................................................93
SECTION 11.03. Effect of Debtor Relief Laws...................................................96
SECTION 11.04. Waiver.........................................................................97
SECTION 11.05. Full Force and Effect..........................................................97
ARTICLE XII
SUBSIDIARY GUARANTORS GUARANTY
SECTION 12.01. Subsidiary Guarantors Guaranty.................................................98
SECTION 12.02. Continuing Guaranty............................................................98
SECTION 12.03. Effect of Debtor Relief Laws..................................................101
SECTION 12.04. General Limitation on Borrower Guaranteed Obligations.........................102
SECTION 12.05. Rights of Contribution........................................................102
SECTION 12.06. Subrogation...................................................................102
SECTION 12.07. Subordination.................................................................103
SECTION 12.08. Waiver........................................................................103
SECTION 12.09. Full Force and Effect.........................................................104
ARTICLE XIII
MISCELLANEOUS
SECTION 13.01. No Waiver; Remedies...........................................................104
SECTION 13.02. Notices.......................................................................104
SECTION 13.03. Expenses, Etc.................................................................105
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SECTION 13.04. Indemnity.....................................................................105
SECTION 13.05. Amendments, Etc...............................................................106
SECTION 13.06. Successors and Assigns........................................................107
SECTION 13.07. Confidentiality...............................................................109
SECTION 13.08. Survival of Representations and Warranties....................................110
SECTION 13.09. Governing Law.................................................................110
SECTION 13.10. Independence of Covenants.....................................................110
SECTION 13.11. Binding Effect................................................................110
SECTION 13.12. Separability..................................................................111
SECTION 13.13. Tax Forms; Net Payments.......................................................111
SECTION 13.14. Interest Act (Canada).........................................................111
SECTION 13.15. Judgment Currency.............................................................111
SECTION 13.16. Conflicts Between This Agreement and
the Other Loan Documents......................................................112
SECTION 13.17. Limitation on Charges; Substitute Lenders; Non-Discrimination.................112
SECTION 13.18. Limitation of Interest........................................................112
SECTION 13.19. Execution in Counterparts.....................................................113
SECTION 13.20. SUBMISSION TO JURISDICTION....................................................113
SECTION 13.21. WAIVER OF JURY TRIAL..........................................................114
SECTION 13.22. FINAL AGREEMENT OF THE PARTIES................................................115
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EXHIBITS
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EXHIBIT 1.01A ADMINISTRATIVE QUESTIONNAIRE
EXHIBIT 1.01B CANADIAN DOLLAR NOTE
EXHIBIT 1.01C CANADIAN NOTE
EXHIBIT 1.01D RATE DESIGNATION NOTICE
EXHIBIT 1.01E-1 REQUEST FOR EXTENSION OF CREDIT
EXHIBIT 1.01E-2 REQUEST FOR EXTENSION OF CREDIT
EXHIBIT 1.01F U. S. NOTE
EXHIBIT 2.03 FORM OF BANKERS' ACCEPTANCE NOTICE
EXHIBIT 7.01 COMPLIANCE CERTIFICATE
EXHIBIT 8.02 SUBSIDIARY GUARANTOR COUNTERPART
EXHIBIT 13.06 ASSIGNMENT AND ACCEPTANCE
SCHEDULES
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SCHEDULE 6.01 SUBSIDIARIES
SCHEDULE 6.13 ENVIRONMENTAL MATTERS
SCHEDULE 8.06 INVESTMENTS
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CREDIT AGREEMENT
THIS CREDIT AGREEMENT, dated as of February 17, 1998, (this
"Agreement"), is among:
(a) EVI, Inc., a Delaware corporation (the "U.S. Borrower");
(b) EVI Oil Tools Canada Ltd., an Alberta corporation (the
"Canadian Borrower");
(c) EVI Oil Tools, Inc., a Delaware corporation; Grant Prideco,
Inc., a Delaware corporation; Channelview Real Property, Inc.,
a Delaware corporation; EVI Management, Inc., a Delaware
corporation; EVI Arrow, Inc., a Delaware corporation; EVI
Watson Packers, Inc., a Delaware corporation; XL Systems
International, Inc., a Delaware corporation; EVI
International, Inc., a Delaware corporation; TA Industries,
Inc., a Delaware corporation; Texas Arai, Inc., a Delaware
corporation; Tube- Alloy Capital Corporation, a Texas
corporation; Tube-Alloy Corporation, a Louisiana corporation;
Tube-Alloy Corporation International, a Texas corporation;
Petroleum Equipment Supply Company, a Louisiana corporation;
XLS Holding, Inc., a Texas corporation; XL Systems, Inc., a
Texas corporation; Ercon, Inc., a Delaware corporation; Van
der Horst U.S.A., Inc., a Delaware corporation; Christiana
Acquisition, Inc., a Wisconsin corporation; Trico Industries,
Inc., a California corporation; and Houston Well Screen
Company, a Texas corporation (together with each other Person
that becomes a Subsidiary Guarantor pursuant to Section
8.02(f)(ii), collectively, the "Subsidiary Guarantors");
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(d) Chase Bank of Texas, National Association, individually as a
U.S. Lender and as administrative agent for the other U.S.
Lenders (in such capacity together with any other Person that
becomes the U.S. Administrative Agent pursuant to Section
10.09, the "U.S. Administrative Agent");
(e) The Bank of Nova Scotia, individually as a U.S. Lender and a
Canadian Lender, as documentation agent for the other Lenders
(in such capacity, the "Documentation Agent") and as agent for
the other Canadian Lenders (in such capacity together with any
other Person that becomes the Canadian Agent pursuant to
Section 10.09, the "Canadian Agent");
(f) ABN AMRO Bank, N.V., individually as a U.S. Lender and as
syndication agent for the other Lenders (in such capacity, the
"Syndication Agent"); and
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(g) the banks and other financial institutions listed on the
signature pages hereof under the caption "Lenders" (together
with each other Person that becomes a Lender pursuant to
Section 13.06, collectively, the "Lenders").
The parties hereto agree as follows:
ARTICLE I
DEFINITIONS; ACCOUNTING TERMS; INTERPRETATION
SECTION 1.01. Definitions. As used in this Agreement the following
terms shall have the following meanings:
"Acceptance Fee" means the stamping fee payable in Canadian Dollars to
each Canadian Lender in respect of the Bankers' Acceptances accepted by such
Canadian Lender computed in accordance with Section 2.03(c).
"Additional Interest" means the aggregate of all amounts accrued or paid
pursuant to the Notes or any of the other Loan Documents (other than
interest on the Notes at the Stated Rate and any Acceptance Fee) which,
under applicable laws, are or may be deemed to constitute interest on the
indebtedness evidenced by the Notes or the other Obligations.
"Administrative Questionnaire" means an Administrative Questionnaire in
the form of Exhibit 1.01A, which each Lender shall complete and provide to
the Agents and the U.S. Borrower.
"Affiliate" means, with respect to any Person, any other Person that,
directly or indirectly, controls, is controlled by or is under direct or
indirect common control with, such Person. For the purposes of this
definition, "control" (including, with correlative meanings, the terms
"controlling" and "controlled"), when used with respect to any Person, means
the power to direct the management and policies of such Person, directly or
indirectly, whether through the ownership of voting securities, by contract
or otherwise.
"Affiliate Transaction" has the meaning specified in Section 8.10.
"Agents" means the U.S. Administrative Agent and the Canadian Agent,
collectively, and "Agent" means either the U.S. Administrative Agent or the
Canadian Agent, as applicable.
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"Agreement" means this Credit Agreement, as it may from time to time be
amended, modified, restated or supplemented.
"Alberta" means 675833 Alberta Ltd., a corporation incorporated under
the laws of the Province of Alberta.
"Applicable BA Discount Rate" means, with respect to a Bankers'
Acceptance (a) being purchased by any Schedule I Canadian Lender on any day,
the percentage discount rate (expressed to two decimal places and rounded
upward, if necessary, to the nearest 1/100th of 1%) quoted by the Canadian
Agent as that at which the Canadian Agent would, in accordance with normal
practice, at or about 10:00 a.m. (Toronto, Ontario time), on such day, be
prepared to purchase Bankers' Acceptances in an amount and having a maturity
date comparable to the amount and maturity date of such Bankers'
Acceptances, and (b) being purchased by any Schedule II Canadian Lender on
any day, the lesser of (i) the arithmetic average of the percentage discount
rates (expressed to two decimal places and rounded upward, if necessary, to
the nearest 1/100th of 1%) quoted by the two Schedule II Reference Banks as
that at which the two Schedule II Reference Banks would, in accordance with
normal practice, at or about 10:00 a.m. (Toronto, Ontario time), on such
day, be prepared to purchase Bankers' Acceptances in an amount and having a
maturity date comparable to the amount and maturity date of such Bankers'
Acceptances and (ii) the percentage discount rate quoted by the Canadian
Agent pursuant to clause (a) above, on the assumption that such Bankers'
Acceptance would be purchased by a Schedule I Canadian Lender, plus 0.1% per
annum.
"Applicable Canadian Pension Legislation" means, at any time, any
pension legislation then applicable to the Canadian Borrower, including all
regulations made thereunder, and all rules, regulations, rulings and
interpretations made or issued by any Governmental Authority having or
asserting jurisdiction in respect thereof.
"Applications" means all applications and agreements for Letters of
Credit, or similar instruments or agreements, now or hereafter executed by
any Person in connection with any Letter of Credit now or hereafter issued
or to be issued under the terms hereof at the request of any Person. The
term "Application" as used herein shall include that certain Master
Commercial & Standby Letter of Credit Agreement executed or to be executed
by and between the U.S. Borrower and Chase.
"Assignment and Acceptance" has the meaning specified in Section
13.06(b).
"Assurance" means, as to any Person, any guaranty or other contingent
liability of such Person (other than any endorsement for collection or
deposit in the ordinary course of business) or obligations as an account
party in respect of letters of credit, direct or indirect, with respect to
any obligation of another Person, through an agreement or otherwise,
including (a) any other endorsement or discount with recourse or undertaking
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substantially equivalent to or having economic effect similar to a guarantee
in respect of any such obligation and (b) any agreement (i) to purchase, or
to advance or supply funds for the payment or purchase of, any such
obligation, (ii) to purchase securities or to purchase, sell or lease
property (whether as lessee or lessor), products, materials or supplies, or
transportation or services, in respect of enabling such other Person to pay
any such obligation or to assure the owner thereof against loss regardless
of the delivery or non-delivery of the securities, property, products,
materials or supplies, or transportation or services or (iii) to make any
loan, advance or capital contribution to or other investment in, or to
otherwise provide funds to or for, such other Person in respect of enabling
such Person to satisfy any obligation (including any liability for a
dividend, stock liquidation payment or expense) or to assure a minimum
equity, working capital or other balance sheet condition in respect of any
such obligation. The amount of any Assurance shall be an amount equal to the
lesser of the stated or determinable amount of the primary obligation in
respect of which such Assurance is made or, if not stated or determinable,
the maximum reasonably anticipated liability in respect thereof (assuming
such Person is required to perform thereunder) as determined by such Person
in good faith.
"Availability Period" means, for each Lender, the period from the
Effective Date to the Termination Date.
"Average Life" means, as of the date of determination, with reference to
any Indebtedness, the quotient obtained by dividing (a) the sum of the
products of the number of years from the date of determination to the dates
of each successive scheduled principal payment of such Indebtedness
multiplied by the amount of such principal payment by (b) the sum of all
such principal payments.
"BA Discount Proceeds" means, in respect of any Bankers' Acceptance
being purchased by a Canadian Lender on any day under Section 2.03, an
amount (rounded to the nearest whole Canadian cent, and with one-half of one
Canadian cent being rounded up) calculated on such day by multiplying:
(a) the face amount of such Bankers' Acceptance; by
(b) the quotient equal to one divided by the sum of one plus the
product of:
(i) the Applicable BA Discount Rate applicable to such Bankers'
Acceptance; and
(ii) a fraction, the numerator of which is the number of days
remaining in the term of such Bankers' Acceptance and the
denominator of which is 365;
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with such quotient being rounded up or down to the nearest
fifth decimal place and .000005 being rounded up.
"Bankers' Acceptance" or "BA" means a bill of exchange denominated in
Canadian Dollars drawn by the Canadian Borrower on and accepted by a
Canadian Lender pursuant to Section 2.03.
"Bankers' Acceptance Liabilities" means, at any time and in respect of
any Bankers' Acceptance, the face amount thereof if still outstanding and
unpaid or, following maturity and payment thereof, the aggregate unpaid
amount of all Reimbursement Obligations at that time due and payable in
respect of the payment of such Bankers' Acceptance upon maturity.
"Bankers' Acceptance Notice" has the meaning specified in Section
2.03(a).
"Bankruptcy Code" means (a) the United States Bankruptcy Code, (b) the
Bankruptcy and Insolvency Act (Canada) and (c) the Companies' Creditors
Arrangement Act (Canada), as the same may be amended and together with any
successor statutes.
"Base Rate Borrowing" means that portion of the principal balance of the
Loans at any time bearing interest at the U.S. Alternate Base Rate, in the
case of Loans advanced to the U.S. Borrower or at the Canadian Alternate
Base Rate, in the case of Loans denominated in Dollars advanced to the
Canadian Borrower.
"Board" means the Board of Governors of the Federal Reserve System of
the United States (or any successor).
"Board of Directors" means, with respect to any Person, the Board of
Directors of such Person (or of its (managing) general partner or managing
member, as the case may be), or any committee thereof duly authorized to act
on behalf of such Board of Directors.
"Board Resolution" means, with respect to any Person, a copy of a
resolution certified by the Secretary or an Assistant Secretary of such
Person to have been duly adopted by the Board of Directors of such Person
and to be in full force and effect on the date of such certification, and
delivered to the Agent.
"Borrower Guaranteed Obligations" has the meaning specified in Section
12.01.
"Borrowers" means the U.S. Borrower and the Canadian Borrower,
collectively.
"Business Day" means any day (other than a day which is a Saturday,
Sunday or legal holiday in the State of Texas or the Province of Ontario or
Alberta) on which banks
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are open for business in Houston, Texas, Toronto, Ontario and Edmonton,
Alberta; provided, however, that, when used in connection with a LIBOR
Borrowing, 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.
"Calculation Date" means the last Business Day of each month.
"Canadian Alternate Base Rate" means, for any day, the rate per annum
equal to the applicable Margin Percentage from time to time in effect plus
the greater of (a) the base rate for that day for Loans denominated in
Dollars quoted by the Canadian Agent and (b) the Federal Funds Rate for that
day plus 1/2 of 1%. The aforesaid base rate is a reference rate and does not
necessarily represent the lowest or best rate or a favored rate and the
Canadian Agent and each Canadian Lender disclaims any statement,
representation or warranty to the contrary. The Canadian Agent or any
Canadian Lender may make commercial loans or other loans at rates of
interest at, above or below the aforesaid base rate. If for any reason the
Canadian Agent shall have determined (which determination shall be presumed
correct, absent manifest error) that it is unable to ascertain the Federal
Funds Rate for any reason, the Canadian Alternate Base Rate shall, until the
circumstances giving rise to such inability no longer exist, be the base
rate in (a) above plus the applicable Margin Percentage from time to time in
effect.
"Canadian Borrower" has the meaning specified in the introduction to
this Agreement.
"Canadian Borrower Guaranteed Obligations" has the meaning specified in
Section 11.01.
"Canadian Commitment" means, as to any Canadian Lender, the obligation,
if any, of such Canadian Lender to make Canadian Loans, incur or participate
in Letter of Credit Liabilities relating to the Canadian Letters of Credit
and accept and purchase Bankers' Acceptances in an aggregate principal
amount at any one time outstanding up to (but not exceeding) the amount, if
any, set forth below such Canadian Lender's name on the signature pages
hereof under the caption "Canadian Commitment", or otherwise provided for in
an Assignment and Acceptance (as the same may be increased or reduced from
time to time pursuant to Section 2.04).
"Canadian Dollars" or "C$" means lawful money of Canada.
"Canadian Dollar Notes" means the Notes of the Canadian Borrower
evidencing the Canadian Loans denominated in Canadian Dollars, in the form
of Exhibit 1.01B.
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"Canadian Lender" means each Lender with (a) prior to the Termination
Date, a Canadian Commitment and (b) on and after the Termination Date, any
outstanding Canadian Obligations.
"Canadian Letters of Credit" has the meaning specified in Section 2.02.
"Canadian Loan" means a Loan made pursuant to Section 2.01(b).
"Canadian Notes" means the Notes of the Canadian Borrower evidencing the
Canadian Loans denominated in Dollars, in the form of Exhibit 1.01C.
"Canadian Obligations" means, as at any date of determination thereof,
the sum of the following (determined without duplication): (a) the aggregate
principal amount of the Canadian Loans outstanding hereunder on such date,
plus (b) the aggregate amount of the Bankers' Acceptance Liabilities
outstanding on such date, plus (c) the aggregate amount of Letter of Credit
Liabilities outstanding on such date relating to the Canadian Letters of
Credit.
"Canadian Prime Loans" means Loans made pursuant to Section 2.01(b)
which are denominated in Canadian Dollars.
"Canadian Prime Rate" means, on any day, as to Loans denominated in
Canadian Dollars made to the Canadian Borrower, the greater of (a) the
annual rate of interest announced from time to time by the Canadian Agent as
its prime rate then in effect at its Principal Office, being the reference
rate used by the Canadian Agent for determining interest rates on commercial
loans denominated in Canadian Dollars to borrowers in Canada, and (b) an
annual rate of interest equal to the sum of (i) the CDOR Rate and (ii) 1.00%
per annum. The Canadian Prime Rate is a reference rate and does not
necessarily represent the lowest or best rate or a favored rate, the
Canadian Agent, and each Canadian Lender disclaims any statement,
representation or warranty to the contrary. The Canadian Agent or any other
Canadian Lender may make commercial loans or other loans at rates of
interest at, above or below the Canadian Prime Rate.
"Capital Expenditures" means, for any period, the sum of all
expenditures (whether paid in cash or accrued as a liability, including the
portion of Capital Lease Obligations originally incurred during such period
that are capitalized for the consolidated balance sheet of the U.S.
Borrower) by the U.S. Borrower and the Subsidiaries during such period,
that, in conformity with GAAP, are included in "capital expenditures,"
"additions to property, plant or equipment" or comparable items in the
consolidated financial statements of the U.S. Borrower, provided, however,
that such term shall not include any amount in respect of the value of all
net property, plant or equipment and other net non-current assets of
businesses acquired by the U.S. Borrower and the Subsidiaries during such
period, including all purchase price adjustments.
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"Capital Lease" means, as to any Person, any lease in respect of which
the rental obligation of such Person constitutes a Capitalized Lease
Obligation.
"Capital Stock" means, with respect to any Person, any and all shares,
interests, rights to purchase, warrants, options, participations or other
equivalents (however designated) of such Person's equity, including all
common stock and preferred stock, any limited or general partnership
interest and any limited liability company membership.
"Capitalized Lease Obligation" means, with respect to any Person, the
obligation of such Person to pay rent or other amounts under a lease of (or
other agreement conveying the right to use) real or personal property that
is required to be classified and accounted for as a capital lease obligation
on a balance sheet of such Person under GAAP and, for purposes of this
Agreement, the amount of such obligation at any date will be the capitalized
amount thereof at such date, determined in accordance with GAAP.
"CDOR Rate" means, on any day, an annual rate of interest equal to the
average 30 day rate applicable to Canadian bankers' acceptances appearing on
the "Reuters Screen CDOR Page" (as defined in the International Swap Dealer
Association, Inc. (1991 ISDA) definitions, as modified and amended from time
to time) as of 10:00 a.m., Toronto, Ontario time on such day, or if such day
is not a Business Day, then on the immediately preceding Business Day;
provided, however, if such rate does not appear on the Reuters Screen CDOR
Page as contemplated, then the CDOR Rate on any day shall be calculated as
the arithmetic mean of the 30 day rates applicable to Canadian bankers'
acceptances quoted by the Canadian Lenders which are listed in Schedule I to
the Bank Act (Canada) as of 10:00 a.m., Toronto, Ontario time on such day,
or if such day is not a Business Day, then on the immediately preceding
Business Day.
"Ceiling Rate" means, on any day, the maximum nonusurious rate of
interest permitted for that day by whichever of applicable United States
federal or Texas laws or, in the case of advances made in Canada by the
Canadian Lenders to the Canadian Borrower, whichever of applicable Canadian
laws (or the laws of any other jurisdiction whose usury laws are deemed to
apply to the Notes or any other Loan Documents despite the intention and
desire of the express choice of law provisions set forth herein) permits the
higher interest rate, stated as a rate per annum. On each day, if any, that
Chapter One establishes the Ceiling Rate, the Ceiling Rate shall be the
"indicated rate ceiling" (as defined in Chapter One) for that day. The U.S.
Administrative Agent may from time to time, as to current and future
balances, implement any other ceiling under Chapter One by notice to the
Borrowers, if and to the extent permitted by Chapter One. Without notice to
the Borrowers or any other Person, the Ceiling Rate shall automatically
fluctuate upward and downward as and in the amount by which such maximum
nonusurious rate of interest permitted by applicable law fluctuates.
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16
"CERCLA" means the Comprehensive Environmental Response, Compensation
and Liability Act.
"Change of Control" means an event or series of events by which (a) any
"person" (as such term is used in Sections 13(d) and 14(d) of the Exchange
Act as in effect on the Execution Date) or related persons constituting a
"group" (as such term is used in Rule 13d-5 under the Exchange Act in effect
on the Execution Date) is or becomes the "beneficial owner" (as defined in
Rules 13d-3 and 13d-5 under the Exchange Act, as in effect on the Execution
Date, except that a person or such group shall be deemed to have "beneficial
ownership" of all shares that any such person or such group has the right to
acquire without condition, other than the passage of time, whether such
right is exercisable immediately or only after the passage of time),
directly or indirectly, of 50% or more of the total voting power of the
Voting Stock of the U.S. Borrower; (b) the U.S. Borrower consolidates with
or merges into another Person or conveys, transfers or leases all or
substantially all of its assets to any Person, or any Person consolidates
with, or merges into, the U.S. Borrower in a transaction not otherwise
permitted by Section 8.02; (c) the U.S. Borrower conveys, transfers or
leases all or substantially all of its assets to any Person; (d) the
stockholders of the U.S. Borrower approve any plan of liquidation or
dissolution of the U.S. Borrower; or (e) during any period of twelve
consecutive months, individuals who, at the beginning of such period,
constituted the Board of Directors of the U.S. Borrower (together with any
new directors whose election by such Board of Directors or whose nomination
for election by the stockholders of the U.S. Borrower, as applicable, was
approved by a vote of not less than a majority of the directors then still
in office who were either directors at the beginning of such period or whose
election or nomination for election was previously so approved) cease for
any reason to constitute a majority of the Board of Directors of the U.S.
Borrower then in office.
"Change of Control Event" means (a) the execution of any definitive
agreement which when fully performed by the parties thereto, would result in
a Change of Control; or (b) the commencement of a tender offer pursuant to
Section 14(d) of the Exchange Act that would result in a Change of Control
if completed.
"Chapter One" means Chapter One of Title 79, Texas Revised Civil
Statutes, 1925, as amended.
"Chase" means Chase Bank of Texas, National Association, a national
banking association.
"Code" means the Internal Revenue Code of 1986, as amended, from time to
time, and the regulations promulgated thereunder.
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17
"Collateral" means, collectively, all the properties and assets of the
Obligors described in and subject to the Liens purported to be created by
the Security Documents.
"Commitment Fee Percentage" means, at any time and from time to time, a
percentage per annum equal to the applicable percentage set forth below for
the Performance Level set forth below:
- ---------------------------------------------------------------------------
PERFORMANCE LEVEL COMMITMENT FEE
- ---------------------------------------------------------------------------
I .175%
- ---------------------------------------------------------------------------
II .200%
- ---------------------------------------------------------------------------
III .225%
- ---------------------------------------------------------------------------
IV .250%
- ---------------------------------------------------------------------------
V .250%
- ---------------------------------------------------------------------------
The Commitment Fee Percentage for the Commitment Fee shall be determined by
reference to the Performance Level in effect from time to time.
"Commitment Percentage" means, as to any Lender, the percentage
equivalent of a fraction the numerator of which is the amount of such
Lender's U.S. Commitment or Canadian Commitment, as the case may be, and the
denominator of which is the aggregate amount of the U.S. Commitments or the
Canadian Commitments, as the case may be, of all Lenders.
"Commitments" means collectively (a) the U.S. Commitments and the
Canadian Commitments, or (b) the U.S. Commitment and the Canadian Commitment
of any Lender, as the context requires.
"Communications" has the meaning specified in Section 13.02.
"Compliance Certificate" has the meaning specified in Section 7.01(g).
"Consolidated EBITDA" means, for any period, the Consolidated Net Income
of the U.S. Borrower and the Subsidiaries for such period, increased (to the
extent deducted in determining Consolidated Net Income) by the sum of (a)
all income taxes (including state franchise taxes based on income) of the
U.S. Borrower and the Subsidiaries paid or accrued according to GAAP for
such period; (b) Consolidated Interest Expense of the U.S. Borrower and the
Subsidiaries for such period; (c) depreciation and amortization of the U.S.
Borrower and the Subsidiaries for such period determined in accordance with
GAAP; and (d) other non-cash charges (excluding any such non-cash charges to
the
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extent they require an accrual of, or reserve for, cash charges for any
future periods) for such period determined in accordance with GAAP, and
decreased (to the extent added in determining Consolidated Net Income) by
any non-cash credits for such period determined in accordance with GAAP.
"Consolidated Indebtedness" means, at the date of any determination
thereof, Indebtedness of the U.S. Borrower and the Subsidiaries (other than
Interest Rate Risk Indebtedness and contingent obligations in respect of
letters of credit) determined on a consolidated basis in accordance with
GAAP.
"Consolidated Interest Expense" means (without duplication), with
respect to the U.S. Borrower and the Subsidiaries for any period, the
aggregate amount of interest (a) whether expensed or capitalized, paid,
accrued or scheduled to be paid or accrued during such period in respect of
all Indebtedness of the U.S. Borrower and the Subsidiaries including (i) the
interest portion of any deferred payment obligation, (ii) the portion of any
rental obligation (other than rental obligations incurred in connection with
Tax Benefit Transfer Leases) in respect of any Capitalized Lease Obligation
or Sale- Leaseback Transaction allocable to interest expense and (iii) any
non-cash interest payments or accruals (including amortization of original
issue discounts but excluding amortization of capitalized issuance costs),
all determined on a consolidated basis in accordance with GAAP, and (b)
actually paid in cash during such period in respect of the Debentures.
"Consolidated Net Income" of the U.S. Borrower and the Subsidiaries
means, for any period, the net income or loss of the U.S. Borrower and the
Subsidiaries for such period, determined on a consolidated basis in
accordance with GAAP; provided, that there shall be excluded, without
limitation, from such net income (to the extent otherwise included therein):
(a) net extraordinary gains and losses;
(b) net gains or losses in respect of dispositions of assets other
than in the ordinary course of business;
(c) the net income of any Person in which the U.S. Borrower or any
Subsidiary has a joint equity interest, except to the extent of the
amount of dividends or other distributions actually paid in cash to the
U.S. Borrower or such Subsidiary by such other Person during such
period;
(d) the net income of any Person accrued prior to the date it
becomes a Subsidiary or is merged into or consolidated with the U.S.
Borrower or any Subsidiary or prior to the date its assets are acquired
by the U.S. Borrower or
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19
any of the Subsidiaries, except that the foregoing shall not apply to
any business acquisition accounted for as a pooling of interests;
(e) the net income of any Subsidiary to the extent that the
declaration or payment of dividends or similar distributions by that
Subsidiary of that income is not at the time permitted by operation of
the terms of its charter or any agreement, instrument, judgment, decree,
order, statute, rule or governmental regulation applicable to that
Subsidiary;
(f) any gains or losses attributable to write-ups or write-downs of
assets other than in the ordinary course of business; and
(g) foreign currency translations or adjustments.
"Cover" means, with respect to any Letter of Credit Liabilities or any
Bankers' Acceptance Liabilities, the payment to the U.S. Administrative
Agent or the Canadian Agent, as the case may be, of immediately available
funds, to be held by the U.S. Administrative Agent or the Canadian Agent, as
the case may be, in a collateral account maintained by the U.S.
Administrative Agent or the Canadian Agent, as the case may be, at its
Principal Office and collaterally assigned to the U.S. Administrative Agent
or the Canadian Agent, as the case may be, as security for the applicable
Obligations using documentation reasonably satisfactory to the U.S.
Administrative Agent or the Canadian Agent, as the case may be, in the
amount required by any applicable provision hereof. Such amount shall be
retained by the U.S. Administrative Agent or the Canadian Agent, as the case
may be, in such collateral account until such time as the applicable Letter
of Credit shall have expired and the Reimbursement Obligations, if any, with
respect thereto shall have been fully satisfied or the applicable Bankers'
Acceptance shall have matured and the related Bankers' Acceptance
Liabilities shall have been fully satisfied; provided, however, that at such
time if a Default or Event of Default has occurred and is continuing, the
U.S. Administrative Agent or the Canadian Agent, as the case may be, shall
not be required to release such amount in such collateral account from the
time of such collateral assignment until such Default or Event of Default
shall have been cured or waived.
"Credit Event" means the making of any Loan, the acceptance and purchase
by a Canadian Lender of any Bankers' Acceptance or the issuance or the
extension of any Letter of Credit.
"Debenture Indenture" means the Indenture dated as of October 15, 1997,
from the U.S. Borrower to The Chase Manhattan Bank, as Trustee, as amended
and supplemented to the Execution Date.
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20
"Debentures" means the U.S. Borrower's 5% Convertible Subordinated
Preferred Equivalent Debentures due 2027 issued pursuant to the Debenture
Indenture.
"Default" means the occurrence of any event which with the giving of
notice or the passage of time or both could become an Event of Default.
"Derivatives Obligations" means, as to any Person all obligations of
such Person in respect of any swap transaction, forward rate transaction,
commodity swap, commodity option, interest rate option, foreign exchange
transaction, cap transaction, floor transaction, collar transaction,
currency swap transaction, cross-currency rate swap transaction, currency
option or any other similar transaction (including any option with respect
to any of foregoing transactions) or any combination of the foregoing
transactions, entered into in the ordinary course of business of such Person
for the purpose of hedging and not for speculative purposes.
"Disqualified Stock" means any Capital Stock issued by the U.S. Borrower
or any Subsidiary that, by its terms (or by the terms of any security into
which it is convertible or for which it is exercisable, redeemable or
exchangeable), or upon the happening of an event or with the passage of
time, matures, or is mandatorily redeemable (other than for Capital Stock
that is not Disqualified Stock), pursuant to a sinking fund obligation or
otherwise, or is redeemable at the option of the holder thereof for cash or
other property, in whole or in part, in each case on, or prior to, the
Termination Date, or which is exchangeable or convertible into debt
securities of the U.S. Borrower or any Subsidiary, except to the extent that
such exchange or conversion rights cannot be exercised prior to the
Termination Date.
"Distribution Date" has the meaning specified in Section 9.06.
"Dollars," "US$" and "$" means lawful money of the United States of
America.
"domestic" means, when used with respect to any Subsidiary of any
Person, a Subsidiary of such Person organized under the laws of one of the
states of the United States or the District of Columbia.
"Dual Lender" means any Lender that has both a U.S. Commitment and a
Canadian Commitment, or that has a U.S. Commitment and an Affiliate that has
a Canadian Commitment; provided that each Canadian Lender shall comply with
Section 13.13.
"Effective Date" means the date on which the conditions to borrowing set
forth in Article V are first met.
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21
"Eligible Assignee" means (a) any Lender; (b) a commercial bank
organized or licensed under the laws of the United States, or a state
thereof, and having total assets in excess of $1,000,000,000; (c) a
commercial bank organized under the laws of any other country which is a
member of the OECD, or a political subdivision of any such country, and
having total assets in excess of $1,000,000,000; provided that such bank is
acting through a branch or agency located in the country in which it is
organized or another country which is also a member of the OECD; and (d) any
other bank approved by the Agents and the U.S. Borrower.
"ERISA" means the Employee Retirement Income Security Act of 1974, as
amended from time to time, and all rules, regulations, rulings and
interpretations adopted by the U.S. Department of Labor thereunder and, as
the context may require, Applicable Canadian Pension Legislation.
"ERISA Affiliate" means (a) all members of a controlled group of
corporations and all trades or businesses (whether or not incorporated)
under common control which, together with any Borrower, are treated as a
single employer under Section 414 of the Code or under Applicable Canadian
Pension Legislation and (b) any Subsidiary of any Obligor.
"Eurodollar Rate" means for any day during an Interest Period for a
LIBOR Borrowing a rate per annum equal to the lesser of (a) the sum of (i)
the Adjusted LIBOR in effect on the first day of such Interest Period plus
(ii) the applicable Margin Percentage from time to time in effect and (b)
the Ceiling Rate. Each Eurodollar Rate is subject to adjustments for
reserves, insurance assessments and other matters as provided for in Section
3.03 hereof.
"Eurodollar Reserve Requirement" means, on any day, that percentage
(expressed as a decimal fraction and rounded, if necessary, to the next
highest one ten-thousandth [.0001]) which is in effect on such day for
determining all reserve requirements (including, without limitation, basic,
supplemental, marginal and emergency reserves) applicable to "Eurocurrency
liabilities," as currently defined in Regulation D. Each determination of
the Eurodollar Reserve Requirement by either Agent shall be presumed
correct, absent manifest error, and may be computed using any reasonable
averaging and attribution method.
"Event of Default" shall have the meaning specified in Article IX
hereof.
"Excess Funding Obligor" has the meaning specified in Section 12.05.
"Excess Payment" has the meaning specified in Section 12.05.
"Exchange Act" means the Securities Exchange Act of 1934, as amended.
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22
"Exchange Rate" means, on any Business Day, (a) with respect to Canadian
Dollars in relation to Dollars, the spot rate as quoted by the Bank of
Canada as its noon spot rate at which Dollars are offered on such Business
Day for Canadian Dollars, and (b) with respect to Dollars in relation to
Canadian Dollars, the spot rate as quoted by the Bank of Canada as its noon
spot rate at which Canadian Dollars are offered on such day for Dollars, and
(c) with respect to all other currencies in relation to Dollars, the spot
rate quoted by the U.S. Administrative Agent, or if not quoted by the U.S.
Administrative Agent, then as quoted in a foreign currency market of
recognized national standing, as the noon spot rate at which Dollars are
offered on such Business Day for such other currency.
"Execution Date" means the earliest date upon which all of the following
shall have occurred: counterparts of this Agreement shall have been executed
by the Obligors and each Lender listed on the signature pages hereof and the
Agents shall have received counterparts hereof which taken together, bear
the signature of the Obligors, each Lender and each Agent.
"Existing Chase Credit Agreement" has the meaning specified in Section
5.01.
"FDIC" means the Federal Deposit Insurance Corporation (or any
successor).
"Federal Funds Rate" means, for any day, a fluctuating interest rate per
annum equal for such day to the weighted average of the rates on overnight
Federal funds transactions with members of the Federal Reserve System
arranged by Federal funds brokers, as published for such day (or, if such
day is not a Business Day, for the next preceding Business Day) by the
Federal Reserve Bank of New York, or, if such rate is not so published for
any such day which is a Business Day, the average of the quotations for such
day on such transactions received by the U.S. Administrative Agent from
three Federal funds brokers of recognized standing selected by the U.S.
Administrative Agent in its sole and absolute discretion.
"Fee Letter" means that certain fee letter agreement dated January 14,
1997 [sic] among the U.S. Borrower, Chase, Chase Securities Inc., and ABN
AMRO Bank, N.V.
"foreign" means, when used with respect to a Subsidiary of any Person, a
Subsidiary of such Person organized under the laws of any jurisdiction other
than a State of the United States or the District of Columbia.
"Funding Loss" means, with respect to (a) either Borrower's payment of
principal of a LIBOR Borrowing on a day other than the last day of the
applicable Interest Period; (b) either Borrower's failure to borrow a LIBOR
Borrowing or to borrow funds by way of Bankers' Acceptances on the date
specified by such Borrower; (c) either Borrower's failure to make any
prepayment of the Loans (other than Base Rate Borrowings and
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23
Canadian Prime Loans) on the date specified by such Borrower, or (d) any
cessation of a Eurodollar Rate to apply to the Loans or any part thereof
pursuant to Section 3.03, in each case whether voluntary or involuntary, any
loss, expense, penalty, premium or liability actually incurred by any Lender
(including but not limited to any loss or expense incurred by reason of the
liquidation or reemployment of deposits or other funds acquired by any
Lender to fund or maintain a Loan).
"GAAP" means generally accepted accounting principles as in effect from
time to time as set forth in the opinions, statements and pronouncements of
the Accounting Principles Board of the American Institute of Certified
Public Accountants, the Financial Accounting Standards Board and, in the
case of the Canadian Borrower, such other Persons who shall be approved by a
significant segment of the accounting profession and concurred in by the
independent certified public accountants certifying any audited financial
statements of the Canadian Borrower.
"Governmental Authority" means any governmental authority of the United
States of America, Canada, any State of the United States, any Province of
Canada, or of any other foreign jurisdiction and any political subdivision
of any of the foregoing, and any central bank, agency, department,
commission, board, bureau, court or other tribunal having or lawfully
asserting jurisdiction over either Agent, any Lender, any Obligor or their
respective properties.
"Guaranties" means, collectively, (a) the Subsidiary Guarantors Guaranty
of the Obligations of the Borrowers contained in Article XII; (b) the U.S.
Borrower Guaranty of the Obligations of the Canadian Borrower contained in
Article XI; and (c) any and all other guaranties hereafter executed in favor
of either Agent, for the benefit of the U.S. Lenders or the Canadian
Lenders, relating to the Obligations, as any of them may from time to time
be amended, modified, restated or supplemented.
"Hazardous Materials" means any hazardous substance, hazardous or toxic
waste, pollutant, contaminant, oil, petroleum product, or other substance
which is listed, regulated, or designated as toxic or hazardous (or words of
similar meaning and regulatory effect), or with respect to which remedial
obligations may be imposed, under any of the Requirements of Environmental
Laws.
"Impermissible Qualification" means, relative to any opinion by
independent public accountants as to any financial statement of the U.S.
Borrower and its Subsidiaries, any qualification or exception to such
opinion:
(a) which is of a "going concern" or a similar nature;
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24
(b) which relates to the limited scope of examination of matters
relevant to such financial statement (other than scope limitations
included in the standard form of opinion utilized by such accountants);
or
(c) which relates to the treatment or classification of any item in
such financial statement and which, as a condition to its removal, would
require an adjustment to such item the effect of which would be to cause
a default under Article VIII.
"Indebtedness" means (without duplication), with respect to any Person,
(a) any liability (other than the Debentures) of such Person (i) for
borrowed money (whether or not the recourse of the lender is to the whole of
the assets of such Person or only to a portion thereof), or under any
reimbursement obligation relating to a letter of credit, bankers' acceptance
or note purchase facility, (ii) evidenced by a bond, note, debenture or
similar instrument, (iii) for the balance deferred and unpaid of the
purchase price for any property or any obligation upon which interest
charges are customarily paid (except for trade payables arising in the
ordinary course of business), or (iv) for the payment of money relating to
the principal portion of any Capitalized Lease Obligation; (b) any
obligation of any Person secured by (or for which the holder of such
obligation has an existing right, contingent or otherwise, to be secured by)
a consensual Lien on property owned or acquired, whether or not any
obligation secured thereby has been assumed, by such Person; (c) all net
obligations of such Person as of the date of a required calculation of any
Derivatives Obligations; (d) all Assurances of such Person of the
Indebtedness of any other Person of the type referred to in clause (a) or
(c); (e) Interest Rate Risk Indebtedness of such Person; and (f) any
amendment, supplement, modification, deferral, renewal, extension or
refunding of any liability of the types referred to above.
"Indemnitee" has the meaning specified in Section 13.04.
"Information Memorandum" means the Confidential Information Memorandum
dated February 1998 furnished by the Agent to the Lenders.
"Interest Coverage Ratio" means, at December 31, 1997 and at the end of
each fiscal quarter thereafter, the ratio of (a) the excess of Consolidated
EBITDA for the fiscal quarter then ended and for the immediately preceding
three fiscal quarters over Capital Expenditures of the U.S. Borrower and the
Subsidiaries made or incurred during such four fiscal quarters to (b)
Consolidated Interest Expense for such four fiscal quarters.
"Interest Options" means the Canadian Alternate Base Rate, the U.S.
Alternate Base Rate, each Eurodollar Rate and, as to the Canadian Dollar
Notes only, the Canadian Prime Rate, and "Interest Option" means any of
them.
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25
"Interest Payment Dates" means (a) for Base Rate Borrowings and for
Canadian Prime Loans, March 31, 1998 and the last day of each June,
September, December and March thereafter prior to the Maturity Date, and the
Maturity Date; and (b) for LIBOR Borrowings, the end of the applicable
Interest Period (and if such Interest Period exceeds three months' duration,
the day that would have been the last day of such Interest Period had it had
a duration of three months), and the Maturity Date.
"Interest Period" means, for each LIBOR Borrowing, a period commencing
on the date such LIBOR Borrowing began and ending on the numerically
corresponding day which is, subject to availability as set forth in Section
3.03(c)(iii), one, two, three or six months thereafter, as either Borrower
shall elect in accordance herewith; provided, (a) unless the Agents shall
otherwise consent, no Interest Period with respect to a LIBOR Borrowing
shall commence on a date earlier than three (3) Business Days after this
Agreement shall have been fully executed; (b) any Interest Period with
respect to a LIBOR Borrowing which would otherwise end on a day which is not
a Business Day shall be extended to the next succeeding Business Day, unless
such Business Day falls in another calendar month, in which case such
Interest Period shall end on the next preceding Business Day; (c) any
Interest Period with respect to a LIBOR Borrowing which begins on the last
Business Day of a calendar month (or on a day for which there is no
numerically corresponding day in the calendar month at the end of such
Interest Period) shall end on the last Business Day of the appropriate
calendar month; (d) no Interest Period for a Loan shall ever extend beyond
the Maturity Date, and (e) Interest Periods shall be selected by each
Borrower in such a manner that the Interest Period with respect to any
portion of the Loans which shall become due shall not extend beyond such due
date.
"Interest Rate Risk Agreement" means an interest rate swap agreement,
interest rate cap agreement, interest rate collar agreement or similar
arrangement entered into by either Borrower for the purpose of reducing such
Borrower's exposure to interest rate fluctuations and not for speculative
purposes, approved in writing by the U.S. Administrative Agent (such
approval not to be unreasonably withheld), as it may from time to time be
amended, modified, restated or supplemented.
"Interest Rate Risk Indebtedness" means all obligations and Indebtedness
of the Borrowers with respect to the program for the hedging of interest
rate risk provided for in any Interest Rate Risk Agreement.
"Investment" means, as applied to any Person, any direct or indirect
purchase or other acquisition by such Person of stock or other securities of
any other Person, or any direct or indirect loan, advance or capital
contribution by such Person to any other Person, and any other item which
would be classified as an "investment" on a balance sheet of such Person
prepared in accordance with GAAP, including any direct or indirect
-18-
26
contribution by such Person of property or assets to a joint venture,
partnership or other business entity in which such Person retains an
interest.
"ISDA" means the International Swaps and Derivatives Association, Inc.
"Issuer" means the issuer (or, where applicable, each issuer) of a
Letter of Credit under this Agreement.
"Lender" has the meaning specified in the introduction to this
Agreement.
"Letter of Credit Liabilities" means, at any time and in respect of any
Letter of Credit, the sum of (a) the amount available for drawings under
such Letter of Credit plus (b) the aggregate unpaid amount of all
Reimbursement Obligations at the time due and payable in respect of previous
drawings made under such Letter of Credit. For the purpose of determining at
any time the amount described in clause (a), in the case of any Letter of
Credit payable in a currency other than Dollars or Canadian Dollars, such
amount shall be converted by the applicable Agent to Dollars by using the
Exchange Rate in effect on such day, and such converted amount shall be
presumed correct, absent manifest error.
"Letters of Credit" means the U.S. Letters of Credit and the Canadian
Letters of Credit.
"LIBOR" means, with respect to any Interest Period for any applicable
LIBOR Borrowing, the rate of interest per annum, rounded upwards, if
necessary, to the nearest 1/16th of 1%, quoted by the U.S. Administrative
Agent at or before 11:00 a.m.,Houston, Texas time (in respect of a LIBOR
Borrowing relating to the U.S. Loans) or 12:00 noon, Toronto, Ontario time
(in respect of a LIBOR Borrowing relating to the Canadian Loans) (or, in
either case, as soon thereafter as practicable), on the date two Business
Days before the first day of such Interest Period, to be the arithmetic
average of the prevailing rates per annum at the time of determination and
in accordance with the then existing practice in the applicable market, for
the offering to the U.S. Administrative Agent or the Canadian Agent, as the
case may be, by one or more prime banks selected by such Agent in its sole
discretion, in the London interbank market, of deposits in Dollars for
delivery on the first day of such Interest Period and having a maturity
equal (or as nearly equal as may be) to the length of such Interest Period
and in an amount equal (or as nearly equal as may be) to the LIBOR Borrowing
to which such Interest Period relates. If such rate shall be for any reason
unavailable, then "LIBOR" means, for each Interest Period for any LIBOR
Borrowing, the rate per annum (rounded upwards, if necessary, to the nearest
1/16th of 1%) equal to the average of the offered quotations appearing on
Dow Jones Market Service (formerly Telerate) Page 3750 (or if such Page
shall not be available, any successor or similar service as may be selected
by the Agents and the Borrowers) as of 11:00 a.m., Houston, Texas time (in
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27
respect of a LIBOR Borrowing relating to the U.S. Loans) or 12:00 noon,
Toronto, Ontario time (in respect of a LIBOR Borrowing relating to the
Canadian Loans) (or, in either case, as soon thereafter as practicable) on
the day two Business Days prior to the first day of such Interest Period for
deposits in Dollars having a term comparable to such Interest Period and in
an amount comparable to the principal amount of the LIBOR Borrowing to which
such Interest Period relates. Each determination by either Agent of LIBOR
shall be presumed correct, absent manifest error, and may be computed using
any reasonable averaging and attribution method.
"LIBOR Borrowing" means each portion of the principal balance of the
Loans at any time bearing interest at a Eurodollar Rate.
"Lien" means any lien, mortgage, pledge, assignment (including any
assignment of rights to receive payments of money), security interest,
charge or encumbrance of any kind including any conditional sale or other
title retention agreement or any lease (excluding, however, any lease that
is not a Capital Lease) in the nature thereof (whether voluntary or
involuntary and whether imposed or created by operation of law or
otherwise), and any agreement to give a lien, mortgage, pledge, assignment
(including any assignment of rights to receive payments of money), security
interest, charge or other encumbrance of any kind; provided, however, that
"Lien" shall not include or cover (i) setoff rights and other standard
arrangements for netting payment obligations in the settlement of
obligations, arising under ISDA standard documents or otherwise customary in
swap or hedging transactions; and (ii) setoff rights of banks party to
Derivative Obligations which rights arise in the ordinary course of
customary banking relationships.
"Lines of Business" means any of (a) the manufacture, production,
distribution or sale of oil field service equipment; (b) the provision of
any other oil field services to Persons in the oil and gas industry; (c) the
manufacture, production, distribution, leasing as a lessor or sale of any
products for use in the oil and gas industry; and (d) the provision of other
services and the sale of other goods related to any of the foregoing.
"Loan Documents" means, collectively, this Agreement, the Notes, the
Security Documents, the Bankers' Acceptances, the Bankers' Acceptance
Notices, the Guaranties, the Applications, all instruments, certificates and
agreements now or hereafter executed or delivered by any Obligor to either
Agent or any Lender pursuant to any of the foregoing or in connection with
the Obligations or any commitment regarding the Obligations, and all
amendments, modifications, renewals, extensions, increases and
rearrangements of, and substitutions for, any of the foregoing.
"Loans" means the loans provided for by Section 2.01(a) and (b).
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"Majority Lenders" means, at any time while the Commitments are
outstanding, Lenders having at least 66-2/3% of the aggregate amount of
Commitments, and at any other time, Lenders having at least 66-2/3% of the
aggregate amount of outstanding Obligations.
"Margin Percentage" means at any time and from time to time, a
percentage per annum equal to the applicable percentage set forth below for
the Performance Level set forth below:
- --------------------------------------------------------------------------------------
CANADIAN PRIME LOANS/
PERFORMANCE LIBOR BORROWINGS BASE RATE BORROWING
LEVEL MARGIN PERCENTAGE MARGIN PERCENTAGE
- --------------------------------------------------------------------------------------
I .375% 0
- --------------------------------------------------------------------------------------
II .500% 0
- --------------------------------------------------------------------------------------
III .625% 0
- --------------------------------------------------------------------------------------
IV .750% 0
- --------------------------------------------------------------------------------------
V 1.00% 0
- --------------------------------------------------------------------------------------
The Margin Percentage for each LIBOR Borrowing made pursuant to Section 2.02
and for purposes of calculating (a) Acceptance Fees pursuant to Section
2.03(c) and (b) certain fees in respect of Letters of Credit pursuant to
Section 2.02(b)(v) shall be determined by reference to the Performance Level
in effect from time to time.
"Material Adverse Effect" means, relative to any occurrence of whatever
nature (including any adverse determination in any litigation, arbitration
or governmental investigation or proceeding) and after taking into account
actual insurance coverage and effective indemnification with respect to such
occurrence, (a) a material adverse effect on the financial condition,
business or operations of the U.S. Borrower and the Subsidiaries taken as a
whole, (b) the impairment of (i) the ability of the Obligors to collectively
perform their payment or other material obligations hereunder or under the
Notes and other Loan Documents or (ii) the ability of either Agent or the
Lenders to realize the material benefits intended to be provided by the
Obligors under the Loan Documents or (c) the subjection of either Agent or
any Lender to any civil or criminal liability arising in connection with the
Loan Documents.
Material Domestic Subsidiary" means, at any date, each domestic
Subsidiary the Capital Stock of which is owned by the U.S. Borrower and/or
one or more domestic Subsidiaries that either (a) has a net worth in excess
of 5% of the Tangible Net Worth of the U.S. Borrower and the Subsidiaries or
(b) has gross net revenues in excess of 5% of the consolidated gross
revenues of the U.S. Borrower and the Subsidiaries based, in each case, on
the most recent audited consolidated financial statements of the U.S.
Borrower.
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"Material Foreign Subsidiary" means, at any date, each foreign
Subsidiary the Capital Stock of which is owned by the U.S. Borrower and/or
one or more domestic Subsidiaries and that either (a) has a net worth in
excess of 5% of the Tangible Net Worth of the U.S. Borrower and the
Subsidiaries or (b) has gross net revenues in excess of 5% of the
consolidated gross revenues of the U.S. Borrower and the Subsidiaries based,
in each case, on the most recent audited consolidated financial statements
of the U.S. Borrower.
"Maturity Date" means the date of maturity of the Notes and the other
Obligations, which is February 17, 2003.
"Maximum Canadian Available Amount" means $50,000,000. In connection
with the application of any provision hereof using the term "Maximum
Canadian Available Amount", any amounts denominated in Canadian Dollars
shall be converted to Dollars using the then current Exchange Rate. The
Maximum Canadian Available Amount is subject to change pursuant to Section
2.04(c) hereof.
"Maximum U.S. Available Amount" means $200,000,000. The Maximum U.S.
Available Amount is subject to change pursuant to Section 2.04(c) hereof.
"Moody's" means Moody's Investors Service, Inc.
"Multiemployer Plan" means any plan which is a "multiemployer plan" (as
such term is defined in Section 4001(a)(3) of ERISA).
"Net Worth" means, as to the U.S. Borrower and the Subsidiaries, on a
consolidated basis, at any date of determination thereof, the sum of (a) the
par value or stated value of its Capital Stock, plus (b) capital in excess
of par or stated value of shares of its Capital Stock, plus (or minus in the
case of a deficit), (c) retained earnings or accumulated deficit, as the
case may be, plus (d) and any other account which, in accordance with GAAP,
constitutes stockholders' equity, plus (e) the principal amount of the
Debentures outstanding on such date, excluding (f) any treasury stock, and
(g) the effects upon net worth resulting from the translation of foreign
currency denominated assets into Dollars.
"New Subsidiary" has the meaning specified in Section 8.02.
"Notes" has the meaning specified in Section 2.07 hereof.
"Notice of Default" has the meaning specified in Section 10.03.
"Obligations" means, as at any date of determination thereof, the sum of
the following: (a) the aggregate principal amount of Loans outstanding
hereunder on such
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date, plus (b) the aggregate amount of the outstanding Letter of Credit
Liabilities on such date, plus (c) the aggregate amount of outstanding
Bankers' Acceptance Liabilities on such date, plus (d) all other outstanding
liabilities, obligations and indebtedness of any Obligor under any Loan
Document on such date.
"Obligors" means each Borrower and each Subsidiary Guarantor.
"OECD" means the Organization for Economic Cooperation and Development
(or any successor thereto).
"Operating Rights" has the meaning specified in Section 6.15.
"Past Due Rate" means, on any day, a rate per annum equal to the
applicable Base Rate or Canadian Prime Rate, as the case may be, plus two
percent (2%).
"Payor" has the meaning specified in Section 4.04.
"PBGC" means the Pension Benefit Guaranty Corporation or any entity
succeeding to any or all of its functions under ERISA and any pension
commission or similar body constituted under any Applicable Canadian Pension
Legislation.
"Performance Level" means a reference to one of Performance Level I,
Performance Level II, Performance Level III, Performance Level IV or
Performance Level V.
"Performance Level I" means, at any date of determination, the U.S.
Borrower shall have a U.S. Borrower Debt Rating in effect on such date of at
least BBB+ by S&P and at least Baa1 by Moody's.
"Performance Level II" means, at any date of determination, (a) the
Performance Level does not meet the requirements of Performance Level I and
(b) the U.S. Borrower shall have a U.S. Borrower Debt Rating in effect on
such date of at least BBB by S&P and at least Baa2 by Moody's.
"Performance Level III" means, at any date of determination, (a) the
Performance Level does not meet the requirements of Performance Level I or
Performance Level II and (b) the U.S. Borrower shall have a U.S. Borrower
Debt Rating in effect on such date of at least BBB- by S&P and at least Baa3
by Moody's.
"Performance Level IV" means, at any date of determination, (a) the
Performance Level does not meet the requirements of Performance Level I,
Performance Level II or Performance Level III and (b) the U.S. Borrower
shall have a U.S. Borrower Debt Rating in effect on such date of at least
BB+ by S&P and at least Ba1 by Moody's.
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"Performance Level V" means, at any date of determination, the
Performance Level does not meet the requirements of Performance Level I,
Performance Level II, Performance Level III or Performance Level IV.
"Permitted Business Acquisition" has the meaning specified in Section
8.02(f).
"Permitted Joint Venture" means an investment in a Person other than a
Subsidiary (a) that is engaged in one or more Lines of Business; and (b) no
debt or equity interest in which (other than directors' qualifying shares)
is or will be held by an officer or director of the U.S. Borrower or of any
Subsidiary, or any spouse, immediate family member of, or other relative
having the same principal residence as, any such officer or director, or any
trust the beneficiary of which is any of the foregoing parties or any other
Affiliate of the U.S. Borrower (except the U.S. Borrower or a Subsidiary).
"Permitted Joint Venture Investments" means Investments (other than
Investments that are permitted pursuant to clauses (g) through (s) and in
clause (u) of Section 8.06) by the U.S. Borrower or any Subsidiary in a
Permitted Joint Venture if, after giving effect to such Investment, the
aggregate book value of all assets of the U.S. Borrower and the Subsidiaries
(determined on the date of transfer) transferred since the Execution Date to
Permitted Joint Ventures (less the lesser of (a) the aggregate fair market
value (as determined in good faith by the Board of Directors of the U.S.
Borrower and evidenced by a Board Resolution) and (b) the aggregate book
value of all such assets subsequently transferred back to the U.S. Borrower
or any of its Wholly-Owned Subsidiaries) would not exceed 10% of the
Tangible Net Worth (determined as of the end of the U.S. Borrower's most
recent fiscal quarter for which financial information is available
immediately prior to the date of determination).
"Permitted Liens" means, without duplication,
(a) Liens existing on the Execution Date provided that the aggregate
principal amount of the Indebtedness secured thereby does not exceed
$55,000,000;
(b) Liens on assets of the Obligors securing the Obligations;
(c) Liens for taxes or unpaid utilities not yet delinquent or which
are being contested in good faith by appropriate proceedings; provided
that adequate reserves with respect thereto are maintained on the books
of the U.S. Borrower or the Subsidiaries, as the case may be, in
conformity with GAAP;
(d) carriers', warehousemen's, mechanics', materialmen's,
repairmen's or other like Liens arising in the ordinary course of
business and not
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overdue for a period of more than 60 days or which are being contested
in good faith by appropriate proceedings;
(e) pledges or deposits or deemed trusts in connection with workers'
compensation, unemployment insurance, pension, employment or other
social security legislation;
(f) easements, rights-of-way, use restrictions, minor defects or
irregularities in title, reservations (including reservations in any
original grant from any government of any land or interests therein and
statutory exceptions to title) and other similar encumbrances incurred
in the ordinary course of business which, in the aggregate, are not
substantial in amount and which do not in any case materially detract
from the value of the property subject thereto or materially interfere
with the ordinary conduct of the business of the U.S. Borrower or any
Subsidiary;
(g) judgment and attachment Liens not giving rise to an Event of
Default or Liens created by or existing from any litigation or legal
proceeding that are currently being contested in good faith by
appropriate proceedings, promptly instituted and diligently conducted,
and for which adequate reserves have been made to the extent required by
GAAP;
(h) Liens on the assets of any entity or asset existing at the time
such asset or entity is acquired by the U.S. Borrower or any Subsidiary,
whether by merger, consolidation, purchase of assets or otherwise;
provided that such Liens (i) are not created, incurred or assumed by
such entity in contemplation of such entity's being acquired by the U.S.
Borrower or any Subsidiary; (ii) do not extend to any other assets of
the U.S. Borrower or any Subsidiary; and (iii) the Indebtedness secured
by such Lien is permitted pursuant to this Agreement;
(i) Liens securing Indebtedness of the Borrower and its Subsidiaries
permitted by Section 8.04 incurred to finance the acquisition of fixed
or capital assets, provided that (A) such Liens shall be created not
more than 90 days after the acquisition of such fixed or capital assets,
(B) such Liens do not at any time encumber any property other than the
property financed by such Indebtedness and (C) the Liens are not
modified to secure other Indebtedness and the amount of Indebtedness
secured thereby is not increased;
(j) Liens incurred to secure the performance of tenders, bids,
leases, statutory obligations, surety and appeal bonds, government
contracts, performance and return-of-money bonds and other obligations
of a like nature incurred in the ordinary course of business (exclusive
of obligations for the payment of borrowed money);
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33
(k) leases or subleases granted to others not interfering in any
material respect with the business of the U.S. Borrower or any
Subsidiary;
(l) Liens to secure obligations arising from statutory or regulatory
requirements;
(m) any interest or title of a lessor in property subject to any
Capitalized Lease Obligation or operating lease which, in each case, is
permitted under this Agreement;
(n) Liens in favor of collecting or payor banks having a right of
setoff, revocation, refund or chargeback with respect to money or
instruments of the U.S. Borrower or any Subsidiary on deposit with or in
possession of such bank;
(o) any renewal or refinancing of or substitution for, or any
extension or modification of any maturity date for any Indebtedness
secured by, any Lien permitted by any of the preceding clauses; provided
that the debt secured is not increased nor the Lien extended to any
additional assets;
(p) Liens granted or Letters of Credit issued in connection with the
Tax Benefit Transfer Lease Obligations; and
(q) additional Liens securing obligations in an aggregate amount not
to exceed $25,000,000 at any one time.
"Person" means any individual, corporation, limited or general
partnership, limited liability company, joint venture, association, joint
stock company, trust, unincorporated organization or other entity, or any
Governmental Authority.
"Plan" means an employee pension benefit plan which is covered by Title
IV of ERISA or subject to the minimum funding standards under Section 412 of
the Code or any Applicable Canadian Pension Legislation and is either (a)
maintained by either Borrower or any ERISA Affiliate for employees of either
Borrower or any ERISA Affiliate or (b) maintained pursuant to a collective
bargaining agreement or any other arrangement under which more than one
employer makes contributions and to which either Borrower or any ERISA
Affiliate is then making or accruing an obligation to make contributions or
has within the preceding five plan years made contributions.
"Principal Office" means (a) as to Obligations of the U.S. Borrower, the
principal office of the U.S. Administrative Agent, presently located at 712
Main Street, Houston, Texas 77002, and (b) as to Obligations of the Canadian
Borrower, the principal office of the Canadian Agent, presently located at
44 King Street West, 17th Floor, Toronto, Ontario, Canada M5H 1H1.
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"Pro Rata Share" has the meaning specified in Section 12.05.
"Proceeds of Remedies" has the meaning specified in Section 9.03.
"Qualified Stock" means, with respect to any Person, any Capital Stock
of such Person or a Subsidiary of such Person that is not Disqualified
Stock.
"Quarterly Dates" means the last day of each March, June, September and
December, provided that if any such date is not a Business Day, then the
relevant Quarterly Date shall be the next succeeding Business Day.
"Rate Designation Date" means that Business Day which is (a) in the case
of Base Rate Borrowings by the U.S. Borrower, 11:00 a.m.,Houston, Texas time
and, in the case of Base Rate Borrowings by the Canadian Borrower, 12:00
noon, Toronto, Ontario time, in each case on the date of such borrowing, and
(b) in the case of LIBOR Borrowings by the U.S. Borrower, 11:00 a.m.,
Houston, Texas time, and, in the case of LIBOR Borrowings by the Canadian
Borrower, 12:00 noon, Toronto, Ontario time, in each case, on the date three
Business Days preceding the first day of any proposed Interest Period.
"Rate Designation Notice" means a written notice substantially in the
form of Exhibit 1.01D.
"Refunding Bankers' Acceptance" has the meaning specified in Section
2.03(b).
"Regulation A" means Regulation A of the Board (respecting loans to
depository institutions), as the same is from time to time in effect, and
all official rulings and interpretations thereunder or thereof.
"Regulation D" means Regulation D of the Board (respecting reserve
requirements), as the same is from time to time in effect, and all official
rulings and interpretations thereunder or thereof.
"Regulation G" means Regulation G of the Board (respecting margin credit
extended by certain lenders) as the same is from time to time in effect, and
all official rulings and interpretations thereunder or thereof.
"Regulation U" means Regulation U of the Board (respecting margin credit
extended by banks), as the same is from time to time in effect, and all
official rulings and interpretations thereunder or thereof.
"Regulation X" means Regulation X of the Board (respecting borrowers who
obtain margin credit), as the same is from time to time in effect, and all
official rulings and interpretations thereunder or thereof.
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35
"Regulatory Change" means with respect to any Lender, any change on or
after the date of this Agreement in any Requirement of Law (including,
without limitation, Regulation D) or the adoption or making on or after such
date of any interpretation, directive or request applying to a class of
lenders including such Lender under any Requirement of Laws (whether or not
having the force of law) by any Governmental Authority.
"Reimbursement Obligations" means, as at any date, (a) the obligations
of either Borrower then outstanding in respect of Letters of Credit under
this Agreement, to reimburse the applicable Issuers for the amount paid by
such Issuers in respect of any drawing under such Letters of Credit and (b)
the obligations of the Canadian Borrower then outstanding in respect of any
Bankers' Acceptance paid by any Canadian Lender on maturity thereof. Except
for the Canadian Letters of Credit denominated in Canadian Dollars,
Reimbursement Obligations in respect of any Letter of Credit shall at all
times be payable in Dollars notwithstanding any such Letter of Credit being
payable in a currency other than Dollars.
"Release" means any spilling, leaking, pumping, pouring, emitting,
emptying, discharging, injecting, escaping, leaching, dumping or disposing
into the environment (including the abandonment or discarding of barrels,
containers and other closed receptacles).
"Reportable Event" means an event described in Section 4043(b) of ERISA
with respect to a Plan as to which the 30-day notice requirement has not
been waived by the PBGC.
"Request for Extension of Credit" means a request for extension of
credit duly executed by the chief executive officer, chief financial officer
or treasurer of the U.S. Borrower or the Canadian Borrower, as the case may
be, or any other Person duly authorized by one of such officers,
appropriately completed and substantially in the form of Exhibit 1.01E-1
(U.S. Borrower) or Exhibit 1.01E-2 (Canadian Borrower), as the case may be.
"Required Payment" has the meaning specified in Section 4.04.
"Requirement of Law" means, as to any Person, 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.
"Requirements of Environmental Laws" means all requirements imposed by
any law (including for example and without limitation The Resource
Conservation and Recovery Act and CERCLA), rule, regulation, or order of any
federal (U.S. or
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36
Canadian), state, provincial or local executive, legislative, judicial,
regulatory or administrative agency, board or authority in effect at the
applicable time which relate to (a) noise; (b) pollution, contamination,
protection or clean-up of the air, surface water, ground water or land; (c)
solid, gaseous or liquid waste generation, handling, treatment, storage,
disposal or transportation; (d) exposure to Hazardous Substances; (e) the
safety or health of employees or (f) the manufacture, processing,
distribution in commerce, use, discharge or storage of Hazardous Substances.
"Reset Date" has the meaning specified in Section 2.09(a).
"Responsible Officer" means, with respect to any Obligor, the President,
the chief financial officer, the controller or any vice president of such
Obligor.
"S&P" means Standard & Poor's Ratings Group, a division of McGraw-Hill,
Inc.
"Schedule I Canadian Lenders" means Canadian Lenders which are listed in
Schedule I to the Bank Act (Canada).
"Schedule II Canadian Lenders" means Canadian Lenders which are listed
in Schedule II to the Bank Act (Canada).
"Schedule II Reference Banks" means The Chase Manhattan Bank of Canada
and ABN AMRO Bank Canada, or such two other Schedule II Canadian Lenders as
may be selected by the Canadian Agent in consultation with the Canadian
Borrower.
"Secured Parties" means (a) the Lenders and (b) the Agents in their
respective capacities as agents for the Lenders.
"Security Documents" means, collectively, the U.S. Borrower Pledge
Agreement, the Subsidiary Guarantors Pledge Agreements and any other
agreement executed by any Obligor securing the Obligations, including all
security agreements and other documents delivered pursuant to Section
7.12(b) or 8.02(f).
"Single Employer Plan" means any Plan which is covered by Title IV of
ERISA, but which is not a Multiemployer Plan.
"Solvent" has the meaning specified in Section 6.16.
"Stated Rate" means the effective weighted per annum rate of interest
applicable to the Obligations; provided, that if on any day such rate shall
exceed the Ceiling Rate for that day, the Stated Rate shall be fixed at the
Ceiling Rate on that day and on each day thereafter until the total amount
of interest accrued at the Stated Rate on the unpaid principal balances of
the Notes and the other Obligations plus the Additional Interest
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equals the total amount of interest which would have accrued if there had
been no Ceiling Rate. If the Obligations mature (or are prepaid) before such
equality is achieved, then, in addition to the unpaid principal and accrued
interest then owing pursuant to the other provisions of the Loan Documents,
the applicable Borrower promises to pay on demand to the order of the holder
of the applicable Obligations interest in an amount equal to the excess (if
any) of (a) the lesser of (i) the total interest which would have accrued on
such Obligations if the Stated Rate had been defined as equal to the Ceiling
Rate from time to time in effect and (ii) the total interest which would
have accrued on such Obligations if the Stated Rate were not so prohibited
from exceeding the Ceiling Rate, over (b) the total interest actually
accrued on such Obligations to such maturity (or prepayment) date. Without
notice to either Borrower or any other Person, the Stated Rate shall
automatically fluctuate upward and downward in accordance with the
provisions of this definition.
"Subsidiary" means (a) a corporation a majority of whose Voting Stock is
at the time, directly or indirectly, owned by such Person, by one or more
subsidiaries of such Person or by such Person and one or more subsidiaries
of such Person, (b) a partnership in which such Person or a subsidiary of
such Person is, at the date of determination, a general or limited partner
of such partnership, but only if such Person or its subsidiary is entitled
to receive more than 50% of the assets of such partnership upon its
dissolution, or (c) any other Person (other than a corporation or
partnership) in which such Person, directly or indirectly, at the date of
determination thereof, has (i) at least a majority ownership interest or
(ii) the power to elect or direct the election of a majority of the
directors or other governing body of such Person. Unless the context
otherwise clearly requires, references in this Agreement to a "Subsidiary"
or the "Subsidiaries" refer to a Subsidiary or the Subsidiaries of the U.S.
Borrower.
"Subsidiary Guarantors" has the meaning specified in the introduction to
this Agreement.
"Subsidiary Guarantors Guaranty" means the guaranty contained in Article
XII.
"Subsidiary Guarantors Pledge Agreements" means (a) the Pledge Agreement
dated as of the date hereof executed by Trico Industries, Inc., a Delaware
corporation, to the U.S. Administrative Agent for the benefit of the Secured
Parties and (b) the Pledge Agreement dated as of the date hereof executed by
EVI Oil Tools, Inc., a Delaware corporation, to the U.S. Administrative
Agent for the benefit of the Secured Parties.
"Tangible Net Worth" means, as to the U.S. Borrower and the
Subsidiaries, on a consolidated basis, as of the date of determination, Net
Worth after deducting therefrom the following:
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38
(a) any surplus resulting from the write-up of assets subsequent to
December 31, 1996;
(b) goodwill, including any amounts (however designated on the
balance sheet) representing the cost of acquisitions of Subsidiaries in
excess of underlying tangible assets;
(c) patents, trade names, trademarks, service marks and copyrights;
(d) leasehold improvements not recoverable at the expiration of a
lease;
(e) deferred charges (including unamortized debt discount and
expense, organization expenses and experimental and development
expenses, but excluding prepaid expenses); and
(f) any items not included in clauses (a) through (e) above which
are treated as intangibles in conformity with GAAP.
"Tax Benefit Transfer Lease Obligations" means the obligations of Grant
Prideco, Inc. incurred in connection with the TBT Leases.
"Taxes" shall have the meaning ascribed to it in Section 4.01(d).
"TBT Leases" means (i) tax transfer lease Agreement dated November 30,
1982, between The Scott Fetzer Company and the U.S. Borrower with related
Escrow Agreement; (ii) tax transfer lease Agreement dated November 30, 1982
between The Scott Fetzer Company and Muskogee Inspection Company with
related Escrow Agreement covering equipment with a tax cost of $1,678,158,
(iii) tax transfer lease Agreement dated November 30, 1982, between The
Scott Fetzer Company and Muskogee Inspection Company with related Escrow
Agreement covering equipment with a tax cost of $670,000 and (iv) tax
transfer lease Agreement dated December 27, 1982, between St. Clairs' Inc.
and the U.S. Borrower with related Escrow Agreement.
"Termination Date" means the earlier of (a) the Maturity Date or (b) the
earlier date of the acceleration of the maturity of the Obligations pursuant
to Section 9.01.
"Total Canadian Exposure" means, at any time and without duplication,
the sum of the aggregate principal amounts of the then outstanding Canadian
Loans, then outstanding Bankers' Acceptance Liabilities and then outstanding
Letter of Credit Liabilities in respect of the Canadian Letters of Credit,
in each case expressed in Dollars using, where applicable, the then current
Exchange Rate.
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39
"Total Capitalization" means, at any date, the sum of Consolidated
Indebtedness and Net Worth at such date.
"UCC" means the Uniform Commercial Code in effect from time to time in
the State of Texas.
"UCP" means the Uniform Customs and Practice for Documentary Credits
(1993 Revision), International Chamber of Commerce, Publication No. 500 (and
any subsequent revisions thereof approved by a Congress of the International
Chamber of Commerce and adhered to by the Issuer).
"Unfunded Current Liability" means, with respect to any Plan, at any
time, the amount (if any) by which (a) the present value of all benefits
under such Plan exceeds (b) the fair market value of all Plan assets
allocable to such benefits, all determined as of the then most recent
actuarial valuation report for such Plan, but only to the extent that such
excess represents a potential liability of any member of the Controlled
Group to the PBGC or a Plan under Title IV of ERISA or under Applicable
Canadian Pension Legislation. With respect to multi-employer Plans, the term
"Unfunded Liabilities" shall also include contingent liability for
withdrawal liability under Section 4201 of ERISA or under Applicable
Canadian Pension Legislation to all multi-employer Plans to which either
Borrower or any member of a Controlled Group for employees of either
Borrower contributes in the event of complete withdrawal from such plans.
"U.S. Alternate Base Rate" means, for any day, the rate per annum equal
to the applicable Margin Percentage from time to time in effect plus the
greater of (a) the prime rate for that day for Loans denominated in Dollars
quoted by the U.S. Administrative Agent and (b) the Federal Funds Rate for
that day plus 1/2 of 1%. The aforesaid prime rate is a reference rate and
does not necessarily represent the lowest or best rate or a favored rate and
the U.S. Administrative Agent and each U.S. Lender disclaims any statement,
representation or warranty to the contrary. The U.S. Administrative Agent or
any U.S. Lender may make commercial loans or other loans at rates of
interest at, above or below the aforesaid prime rate. If for any reason the
U.S. Administrative Agent shall have determined (which determination shall
be presumed correct, absent manifest error) that it is unable to ascertain
the Federal Funds Rate for any reason, the U.S. Alternate Base Rate shall,
until the circumstances giving rise to such inability no longer exist, be
the prime rate in (a) above plus the applicable Margin Percentage from time
to time in effect.
"U.S. Borrower" has the meaning specified in the introduction to this
Agreement.
"U.S. Borrower Debt Rating" means, with respect to the U.S. Borrower as
of any date of determination, the rating that has been most recently
announced by either S&P
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or Moody's, as the case may be, for any non-credit enhanced long-term senior
debt issued or to be issued by the U.S. Borrower. For purposes of the
foregoing:
(a) if only one of S&P and Moody's shall have in effect a U.S.
Borrower Debt Rating, the Margin Percentage and the Commitment Fee
Percentage shall be determined by reference to the available rating;
(b) if, at any time, neither S&P nor Moody's shall have in effect a
U.S. Borrower Debt Rating, the Margin Percentage and the Commitment Fee
Percentage shall be set in accordance with Performance Level V under the
definition of "Margin Percentage" or "Commitment Fee Percentage," as the
case may be;
(c) if the ratings established by S&P and Moody's shall fall within
different Performance Levels, the Margin Percentage and the Commitment
Fee Percentage shall be based upon the lower rating; provided, however,
that, if the higher of such ratings is two or more Performance Levels
above the lower of such ratings, the Margin Percentage and the
Commitment Fee Percentage shall be based upon the rating that is one
Performance Level above the lower rating;
(d) if any rating established by S&P or Moody's shall be changed,
such change shall be effective as of the date on which such change is
announced publicly by the rating agency making such change; and
(e) if S&P or Moody's shall change the basis on which ratings are
established by it, each reference to the U.S. Borrower Debt Rating
announced by S&P or Moody's shall refer to the then equivalent rating by
S&P or Moody's, as the case may be.
"U.S. Borrower Guaranty" means the guaranty contained in Article XI.
"U.S. Borrower Pledge Agreement" means the Pledge Agreement dated as of
the date hereof, and executed by the U.S. Borrower and the U.S.
Administrative Agent for the benefit of the Secured Parties.
"U.S. Commitment" means, as to any U.S. Lender, the obligation, if any,
of such U.S. Lender to make U.S. Loans and incur or participate in Letter of
Credit Liabilities relating to U.S. Letters of Credit in an aggregate
principal amount at any one time outstanding up to (but not exceeding) the
amount, if any, set forth below such U.S. Lender's name on the signature
pages hereof under the caption "U.S. Commitment", or otherwise provided for
in an Assignment and Acceptance Agreement (as the same may be increased or
reduced from time to time pursuant to Section 2.04 hereof).
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"U.S. Lender" means each lender signatory hereto with (a) prior to the
Termination Date, a U.S. Commitment and (b) on and after the Termination
Date, any outstanding U.S. Obligations.
"U.S. Letter of Credit" shall have the meaning assigned to such term in
Section 2.02.
"U.S. Loan" means a Loan made pursuant to Section 2.01(a).
"U.S. Notes" means the Notes of the U.S. Borrower evidencing the U.S.
Loans, in the form of Exhibit 1.01F.
"U.S. Obligations" means, as at any date of determination thereof, the
sum of the following (determined without duplication): (a) the aggregate
principal amount of the U.S. Loans outstanding hereunder on such date plus
(b) the aggregate amount of the Letter of Credit Liabilities outstanding on
such date relating to the U.S. Letters of Credit.
"Voting Stock" means, with respect to any Person, securities of any
class or classes of Capital Stock in such Person entitling holders thereof
(whether at all times or only so long as no senior class of stock has voting
power by reason of any contingency) to vote in the election of members of
the Board of Directors or other governing body of such Person.
"Wholly-Owned Subsidiary" means a Subsidiary of which all issued and
outstanding Capital Stock (excluding directors' qualifying shares) is
directly or indirectly owned by the U.S. Borrower.
SECTION 1.02. Types of Borrowings. Borrowings hereunder are
distinguished by "Type." The "Type" of a Loan refers to the determination
whether such Loan is a part of a LIBOR Borrowing, part of a Base Rate Borrowing,
or is a Canadian Prime Loan.
SECTION 1.03. Accounting Terms; Changes in GAAP. All accounting and
financial terms used herein and not otherwise defined herein and the compliance
with each covenant contained herein which relates to financial matters shall be
determined in accordance with GAAP applied by the U.S. Borrower or the Canadian
Borrower, as the case may be, on a consistent basis, except to the extent that a
deviation therefrom is expressly stated. Should there be a change in GAAP from
that in effect on the Execution Date, such that the defined terms set forth in
Section 1.01 or the covenants set forth in Article VIII would then be calculated
in a different manner or with different components or would render the same not
meaningful criteria for evaluating the matters contemplated to be evidenced by
such covenants, (a) the Borrowers and the Lenders agree, within the 60-day
period following any such change, to negotiate in good faith and enter into an
amendment to this Agreement in order to conform the
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defined terms set forth in Section 1.01 or the covenants set forth in Article
VIII, or both, in such respects as shall reasonably be deemed necessary by the
Majority Lenders so that the criteria for evaluating the matters contemplated to
be evidenced by such covenants are substantially the same criteria as were
effective prior to any such change in GAAP or Statutory Accounting Practices,
and (b) the Borrowers shall be deemed to be in compliance with such covenants
during the 60- day period following any such change, or until the earlier date
of execution of such amendment, if and to the extent that the Borrowers would
have been in compliance therewith under GAAP as in effect immediately prior to
such change.
SECTION 1.04. Interpretation. (a) In this Agreement, unless a clear
contrary intention appears:
(i) the singular number includes the plural number and vice versa;
(ii) reference to any gender includes each other gender;
(iii) the words "herein," "hereof" and "hereunder" and other words of
similar import refer to this Agreement as a whole and not to any particular
Article, Section or other subdivision;
(iv) reference to any Person includes such Person's successors and
assigns but, if applicable, only if such successors and assigns are
permitted by this Agreement, and reference to a Person in a particular
capacity excludes such Person in any other capacity or individually,
provided that nothing in this clause (iv) is intended to authorize any
assignment not otherwise permitted by this Agreement;
(v) except as expressly provided to the contrary herein, reference to
any agreement, document or instrument (including this Agreement) means such
agreement, document or instrument as amended, supplemented or modified and
in effect from time to time in accordance with the terms thereof and, if
applicable, the terms hereof, and reference to any Note or other note
includes any note issued pursuant hereto in extension or renewal thereof and
in substitution or replacement therefor;
(vi) unless the context indicates otherwise, reference to any Article,
Section, Schedule or Exhibit means such Article or Section hereof or such
Schedule or Exhibit hereto;
(vii) the word "including" (and with correlative meaning "include")
means including, without limiting the generality of any description
preceding such term;
(viii) with respect to the determination of any period of time, except
as expressly provided to the contrary, the word "from" means "from and
including" and the word "to" means "to but excluding";
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(ix) reference to any law, rule or regulation means such as amended,
modified, codified or reenacted, in whole or in part, and in effect from
time to time; and
(x) the term "annualized" as used herein shall mean the multiplication
of the applicable amount for any given period by a fraction, the numerator
of which is 365 or 366 (whichever may be the number of days in the
applicable year) and the denominator of which is the number of days elapsed
in such year.
(b) The Article and Section headings herein and the Table of Contents
are for convenience only and shall not affect the construction hereof.
(c) No provision of this Agreement shall be interpreted or construed
against any Person solely because that Person or its legal representative
drafted such provision.
ARTICLE II
COMMITMENTS; LOANS; BA'S AND LETTERS OF CREDIT
SECTION 2.01. Loans and BA's. Each Lender severally agrees, subject to
all of the terms and conditions of this Agreement to make Loans and, in the case
of the Canadian Lenders, to accept and purchase Bankers' Acceptances, as
follows:
(a) U.S. Loans. From time to time on or after the Effective Date and
during the Availability Period, each U.S. Lender shall make loans under this
Section 2.01(a) to the U.S. Borrower in an aggregate principal amount at any one
time outstanding (including its Commitment Percentage of all Letter of Credit
Liabilities relating to the U.S. Letters of Credit at such time) up to but not
exceeding such U.S. Lender's Commitment Percentage of the Maximum U.S. Available
Amount. Subject to the conditions in this Agreement, any such U.S. Loan repaid
prior to the Termination Date may be reborrowed pursuant to the terms of this
Agreement; provided, that any and all such U.S. Loans shall be due and payable
in full on the Termination Date. Loans made under this Section 2.01(a) shall be
made and denominated in Dollars. The aggregate of all U.S. Loans to be made by
the U.S. Lenders in connection with a particular borrowing shall be equal to the
lesser of (i) the unutilized portion of the U.S. Commitments and (ii) $3,000,000
or any integral multiple of $100,000 in excess thereof.
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(b) Canadian Loans. From time to time on or after the Effective Date and
during the Availability Period, each Canadian Lender shall make loans under this
Section 2.01(b) to the Canadian Borrower in an aggregate principal amount at any
one time outstanding (including such Canadian Lender's Commitment Percentage of
all Bankers' Acceptance Liabilities and all Letter of Credit Liabilities
relating to the Canadian Letters of Credit at such time) up to but not exceeding
such Canadian Lender's Commitment Percentage of the Maximum Canadian Available
Amount. Subject to the conditions in this Agreement, any such Canadian Loan
repaid prior to the Termination Date may be reborrowed pursuant to the terms of
this Agreement; provided, that any and all such Canadian Loans shall be due and
payable in full on the Termination Date. Loans made under this Section 2.01(b)
may, at the option of the Canadian Borrower, be made and denominated either in
Dollars or in Canadian Dollars (but all Loans to be made under a particular
borrowing must be made and denominated in the same currency). The aggregate of
all Canadian Loans to be made by the Canadian Lenders in connection with a
particular borrowing shall be equal to the lesser of (i) the unutilized portion
of the Canadian Commitments or (ii) $1,000,000 or any integral multiple of
$100,000 in excess thereof (if the Loans are denominated in Dollars) or
C$1,000,000 or any integral multiple of C$100,000 in excess thereof (if the
Loans are denominated in Canadian Dollars). LIBOR Loans to the Canadian Borrower
shall be available only in Dollars.
(c) Bankers' Acceptances. From time to time on or after the Effective
Date and during the Availability Period, each Canadian Lender shall accept and
purchase Bankers' Acceptances drawn on it under Section 2.03 by the Canadian
Borrower in an aggregate principal amount at any one time outstanding (including
such Canadian Lender's Commitment Percentage of all Canadian Loans outstanding
at such time and all Letter of Credit Liabilities relating to the Canadian
Letters of Credit at such time) up to but not exceeding such Canadian Lender's
Commitment Percentage of the Maximum Canadian Available Amount. No Bankers'
Acceptance may be made or accepted on or after the Termination Date and all
outstanding Bankers' Acceptances shall mature no later than the end of the
Availability Period. Loans made by way of Bankers' Acceptances shall be made and
denominated in Canadian Dollars.
(d) Chapter 15. The Borrowers, the Agents and the Lenders agree that
Chapter 15 of the Texas Credit Code shall not apply to this Agreement, the Notes
or any other Obligation.
SECTION 2.02. Letters of Credit. (a) Letters of Credit. Subject to the
terms and conditions of this Agreement, and on the condition that aggregate
Letter of Credit Liabilities relating to the U.S. Letters of Credit shall never
exceed $30,000,000 and that aggregate Letter of Credit Liabilities relating to
the Canadian Letters of Credit shall never exceed $15,000,000, (i) the U.S.
Borrower shall have the right, in addition to the U.S. Loans provided for in
Section 2.01(a), to utilize the U.S. Commitments from time to time during the
Availability Period by obtaining the issuance of standby letters of credit for
the account of the U.S. Borrower if the U.S. Borrower shall so request in the
notice referred to in Section 2.02(b)(i) (such standby letters of credit as any
of them may be amended, supplemented, extended or confirmed from
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time to time, being herein collectively called the "U.S. Letters of Credit") and
the Canadian Borrower shall have the right, in addition to the Canadian Loans
provided for in Section 2.01(b) and Bankers' Acceptances provided for in Section
2.01(c), to utilize the Canadian Commitments from time to time during the
Availability Period by obtaining the issuance of standby letters of credit for
the account of the Canadian Borrower if the Canadian Borrower shall so request
in the notice referred to in Section 2.02(b)(i) (such standby letters of credit
as any of them may be amended, supplemented, extended or confirmed from time to
time, being herein collectively called the "Canadian Letters of Credit") and
(ii) the U. S. Administrative Agent agrees to issue the U.S. Letters of Credit
and the Canadian Agent agrees to issue the Canadian Letters of Credit. The
Letters of Credit will, at the request of the applicable Borrower, be issued in
currencies other than those expressly provided for in this Agreement so long as
the applicable Agent is reasonably satisfied that such currency is readily
available in the required amounts and that such currency selection is not
otherwise disadvantageous to either Agent or any Lender. Upon the date of the
issuance of a Letter of Credit, the applicable Issuer shall be deemed, without
further action by any party hereto, to have sold to each U.S. Lender or each
Canadian Lender, as the case may be, and each such U.S. Lender or each such
Canadian Lender, as the case may be, shall be deemed, without further action by
any party hereto, to have purchased from the applicable Issuer, a participation,
to the extent of such Lender's Commitment Percentage, in such Letter of Credit
and the related Letter of Credit Liabilities, which participation shall
terminate on the earlier of the expiration date of such Letter of Credit or 10
days prior to the Maturity Date. Any Letter of Credit that shall have an
expiration date after the date that is 10 days prior to the Maturity Date shall
be subject to Cover (due and payable on the tenth day prior to the Maturity
Date) or backed by a standby letter of credit in form and substance, and issued
by a Person, acceptable to the applicable Agent in its sole discretion. The U.
S. Administrative Agent or, with the prior approval of the U.S. Borrower, the
U.S. Administrative Agent and the applicable U.S. Lender, another U.S. Lender
shall be the Issuer of each U.S. Letter of Credit and the Canadian Agent or,
with the prior approval of the Canadian Borrower, the Canadian Agent and the
applicable Canadian Lender, another Canadian Lender shall be the Issuer of each
Canadian Letter of Credit. Except as provided above, all U.S. Letters of Credit
shall be denominated in Dollars and all Canadian Letters of Credit shall, at the
option of the Canadian Borrower, be denominated in either Dollars or Canadian
Dollars. Fees due in respect of a U.S. Letter of Credit shall be payable in
Dollars and fees due in respect of a Canadian Letter of Credit shall be payable
(i) in Dollars, if such Letter of Credit is denominated in Dollars and (ii) in
Canadian Dollars if such Letter of Credit is denominated in Canadian Dollars or
any other currency.
(b) Additional Provisions. The following additional provisions shall
apply to each Letter of Credit:
(i) The U.S. Borrower or the Canadian Borrower, as the case may be,
shall give the appropriate Agent notice requesting each issuance of a Letter
of Credit hereunder as provided in Section 4.03 and shall furnish such
additional information regarding such transaction as such Agent may
reasonably request. Upon receipt of such
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notice, such Agent shall promptly notify each U.S. Lender or the Canadian
Lender, as the case may be, of the contents thereof and of such Lender's
Commitment Percentage of the amount of such proposed Letter of Credit.
(ii) No U.S. Letter of Credit may be issued if after giving effect
thereto the sum of (A) the aggregate outstanding principal amount of the
U.S. Loans plus (B) the aggregate Letter of Credit Liabilities relating to
the U.S. Letters of Credit would exceed the Maximum U.S. Available Amount.
No Canadian Letter of Credit may be issued if after giving effect thereto
the sum of (A) the aggregate outstanding principal amount of the Canadian
Loans plus (B) the aggregate Letter of Credit Liabilities relating to the
Canadian Letters of Credit plus (C) the aggregate Bankers' Acceptance
Liabilities would exceed the Maximum Canadian Available Amount. On each day
during the period commencing with the issuance of any Letter of Credit and
until such Letter of Credit shall have expired or been terminated, the U. S.
Commitment or the Canadian Commitment, as the case may be, of each
applicable Lender shall be deemed to be utilized for all purposes hereof in
an amount equal to such Lender's Commitment Percentage of the amount then
available for drawings under such Letter of Credit (and any unreimbursed
drawings under such Letter of Credit).
(iii) Upon receipt from the beneficiary of any Letter of Credit of any
demand for payment thereunder, the applicable Issuer shall notify the Agents
and thereafter the U.S. Administrative Agent or the Canadian Agent, as the
case may be, shall promptly notify the applicable Borrower and each
applicable Lender as to the amount to be paid as a result of such demand and
the payment date therefor. If at any time prior to the expiration date of a
Letter of Credit any applicable Issuer shall have made a payment to a
beneficiary of a Letter of Credit in respect of a drawing under such Letter
of Credit, each applicable Lender will pay to the U.S. Administrative Agent
or the Canadian Agent, as the case may be, immediately upon demand by such
Issuer at any time during the period commencing after such payment until
reimbursement thereof in full by the applicable Borrower, an amount equal to
such Lender's U.S. Commitment Percentage or Canadian Commitment Percentage,
as the case may be, of such payment, together with interest on such amount
for each day from the date of demand for such payment (or, if such demand is
made after 11:00 a.m., Houston, Texas time (in the case of a U.S. Letter of
Credit), or 12:00 noon, Toronto, Ontario time (in the case of a Canadian
Letter of Credit), on such date, from the next succeeding Business Day) to
the date of payment by such Lender of such amount at a rate of interest per
annum equal to (A) in respect of the U.S. Letters of Credit, the Federal
Funds Rate, (B) in respect of the Canadian Letters of Credit which are
denominated in Dollars, the Base Rate plus 2% and (C) in respect of the
Canadian Letters of Credit which are denominated in Canadian Dollars, the
CDOR Rate. For purposes of determining the amount of each Lender's payment
obligation to the Issuer, the amount of each drawing paid by either Issuer
under a Letter of Credit issued in a currency other than Dollars or Canadian
Dollars shall be converted into Dollars by the applicable Agent at the
Exchange Rate on the date of such drawing. To
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the extent that it is ultimately determined that the applicable Borrower is
relieved of its obligation to reimburse the applicable Issuer because of
such Issuer's gross negligence, willful misconduct or unlawful conduct in
determining that documents received under any applicable Letter of Credit
comply with the terms thereof, the applicable Issuer shall be obligated to
refund to the paying Lenders all amounts paid to such Issuer to reimburse
Issuer for the applicable drawing under such Letter of Credit.
(iv) The U.S. Borrower or the Canadian Borrower, as the case may be,
shall be irrevocably and unconditionally obligated forthwith to reimburse
the appropriate Agent, on the date on which such Agent notifies the U.S.
Borrower or the Canadian Borrower, as the case may be, of the date and
amount of any payment by the applicable Issuer of any drawing under a Letter
of Credit, for the amount paid by such Issuer upon such drawing, without
presentment, demand, protest or other formalities of any kind, all of which
are hereby waived. Such reimbursement may, subject to satisfaction of the
conditions in Article V and to the Maximum U.S. Available Amount or Maximum
Canadian Available Amount, as the case may be (after adjustment in the same
to reflect the elimination of the corresponding Letter of Credit Liability),
be made by a borrowing comprised of Loans or, in the case of the Canadian
Borrower, by the issuance, acceptance and purchase of Bankers' Acceptances.
The applicable Agent will pay to each Lender such Lender's Commitment
Percentage of all amounts received from the U.S. Borrower or the Canadian
Borrower, as the case may be, for application in payment, in whole or in
part, of the Reimbursement Obligation in respect of any Letter of Credit,
but only to the extent such Lender has made payment to the applicable Agent
in respect of such Letter of Credit pursuant to clause (iii) above.
(v) The U.S. Borrower or the Canadian Borrower, as the case may be, will
pay to the appropriate Agent at the Principal Office of such Agent for the
account of each applicable Lender a letter of credit fee with respect to
each Letter of Credit equal to the greater of (x) $500 or (y) the Margin
Percentage applicable to LIBOR Borrowings multiplied by the daily average
amount available for drawings under each Letter of Credit (and computed on
the basis of the actual number of days elapsed in a year composed of 360
days), in each case for the period from and including the date of issuance
of such Letter of Credit to and including the date of expiration or
termination thereof, such fee to be due and payable quarterly in advance. In
the event any Letter of Credit is drawn, that portion of the applicable
letter of credit fee provided for in the preceding sentence relating to the
period beyond the date of such drawing shall be credited to the applicable
Borrower's Reimbursement Obligations relating thereto. The applicable Agent
will pay to each applicable Lender, promptly after receiving any payment in
respect of letter of credit fees referred to in this clause (v), an amount
equal to the product of such Lender's U.S. Commitment Percentage or Canadian
Commitment Percentage, as the case may be, times the amount of such fees. In
addition to and cumulative of the above described fees, the U.S. Borrower or
the Canadian Borrower, as the case may be, shall pay to the appropriate
Agent, for the account of the applicable Issuer, in advance on the date of
the
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issuance of the applicable Letter of Credit, a fee in an amount equal to
1/8% of the face amount of the applicable Letter of Credit (such fee to be
retained by the applicable Issuer for its own account).
(vi) The issuance by the applicable Issuer of each Letter of Credit
shall, in addition to the conditions precedent set forth in Article V, be
subject to the conditions precedent (A) that such Letter of Credit shall be
in such form and contain such terms as shall be reasonably satisfactory to
the applicable Agent, and (B) that the U.S. Borrower or the Canadian
Borrower, as the case may be, shall have executed and delivered such
Applications and other instruments and agreements relating to such Letter of
Credit as the applicable Agent shall have reasonably requested and are not
inconsistent with the terms of this Agreement. In the event of a conflict
between the terms of this Agreement and the terms of any Application, the
terms of this Agreement shall control.
(vii) Each Issuer will send to the U.S. Borrower or the Canadian
Borrower, as the case may be, and each applicable Lender, immediately upon
issuance of any Letter of Credit issued by such Issuer or any amendment
thereto, a true and correct copy of such Letter of Credit or amendment.
(viii) If either Borrower shall fail to reimburse the appropriate Agent,
or to provide Cover, for any Letter of Credit, the amount of such
reimbursement or Cover shall bear interest from the date due at the Past Due
Rate until the date such reimbursement is made or such Cover is provided.
(c) Indemnification. The U.S. Borrower or the Canadian Borrower, as the
case may be, hereby indemnifies and holds harmless each Agent, each Lender and
each Issuer from and against any and all claims and damages, losses,
liabilities, costs or expenses which such Agent, such Lender or such Issuer may
incur (or which may be claimed against such Agent, such Lender or such Issuer by
any Person whatsoever), REGARDLESS OF WHETHER CAUSED IN WHOLE OR IN PART BY THE
NEGLIGENCE OF ANY OF THE INDEMNIFIED PARTIES, in connection with the execution
and delivery of any Letter of Credit or transfer of or payment or failure to pay
under any Letter of Credit; provided that the U.S. Borrower or the Canadian
Borrower, as the case may be, shall not be required to indemnify any party
seeking indemnification for any claims, damages, losses, liabilities, costs or
expenses to the extent, but only to the extent, caused by (i) the willful
misconduct, gross negligence or unlawful conduct of the party seeking
indemnification, or (ii) the failure by the party seeking indemnification to pay
under any Letter of Credit after the presentation to it of a request required to
be paid under applicable law.
(d) Additional Costs in Respect of Letters of Credit. (i) If as a result
of any Regulatory Change there shall be imposed, modified or deemed applicable
any Tax, reserve, special deposit or similar requirement against or with respect
to or measured by reference to
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Letters of Credit issued or to be issued hereunder or participations in such
Letters of Credit, and the result shall be to increase the cost to any Lender of
issuing or maintaining any Letter of Credit or any participation therein, or
materially reduce any amount receivable by any Lender hereunder in respect of
any Letter of Credit or any participation therein (which increase in cost, or
reduction in amount receivable, shall be the result of such Lender's reasonable
allocation of the aggregate of such increases or reductions resulting from such
event), then such Lender shall notify the U.S. Borrower or the Canadian
Borrower, as the case may be, through the appropriate Agent (which notice shall
be accompanied by a statement setting forth in reasonable detail the basis for
the determination of the amount due), and within 15 Business Days after demand
therefor by such Lender through such Agent, the U.S. Borrower or the Canadian
Borrower, as the case may be, shall pay to such Lender, from time to time as
specified by such Lender, such additional amounts as shall be sufficient to
compensate such Lender for such increased costs or reductions in amount. Such
statement as to such increased costs or reductions in amount incurred by such
Lender, submitted by such Lender to the U.S. Borrower or the Canadian Borrower,
as the case may be, shall be conclusive as to the amount thereof, absent
manifest error, and may be computed using any reasonable averaging and
attribution method. Each Lender will notify the U.S. Borrower or the Canadian
Borrower, as the case may be, through the appropriate Agent of any event
occurring after the date of this Agreement that will entitle such Lender to
compensation pursuant to this Section as promptly as practicable, and in any
event within 120 days after it becomes aware thereof, and determines to request
such compensation, and (if so requested by the U.S. Borrower or the Canadian
Borrower, as the case may be, through the appropriate Agent) will designate a
different lending office of such Lender for the issuance or maintenance of the
Letters of Credit by such Lender or will take such other action as the U.S.
Borrower or the Canadian Borrower, as the case may be, may reasonably request if
such designation or action is consistent with legal and regulatory restrictions,
can be undertaken at no additional cost, will avoid the need for, or reduce the
amount of, such compensation and will not, in the sole opinion of such Lender,
be disadvantageous to such Lender (provided that no such U.S. Lender shall have
any obligation so to designate a different lending office which is not located
in the United States of America and no such Canadian Lender shall have any
obligation so to designate a different lending office which is not located in
Canada).
(ii) Anything in this Section 2.02(d) notwithstanding, if any Lender
elects to require payment by either Borrower of any amount under this Section
2.02(d), the applicable Borrower may, within 60 days after the date of receiving
notice thereof and so long as no Default shall have occurred and be continuing,
elect to terminate such Lender as a party to this Agreement; provided that,
concurrently with such termination the applicable Borrower shall have arranged
for an Eligible Assignee as of such date, to become a substitute Lender for all
purposes under this Agreement in the manner provided in Section 11.06; provided
further that, prior to substitution for any Lender, the applicable Borrower
shall have given written notice to the Agents of such intention and the
remaining Lenders shall have the option, but no obligation, for a period of 10
days after receipt of such notice, to increase their Commitments in order to
replace the affected Lender in lieu of such substitution.
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SECTION 2.03. Certain Provisions Relating to Bankers' Acceptances. (a)
Subject to the terms and conditions hereof, each Canadian Lender severally
agrees to accept and purchase Bankers' Acceptances drawn upon it by the Canadian
Borrower denominated in Canadian Dollars. The Canadian Borrower shall notify the
Canadian Agent by irrevocable written notice (each a "Bankers' Acceptance
Notice") by 12:00 noon, Toronto, Ontario time two Business Days prior to the
proposed date of any borrowing by way of Bankers' Acceptances. Each borrowing by
way of Bankers' Acceptances shall be in a minimum aggregate face amount of
C$1,500,000 and integral multiples of C$100,000 in excess thereof. The face
amount of each Bankers' Acceptance shall be C$100,000 or any integral multiple
of $100,000 in excess thereof. Each Bankers' Acceptance Notice shall be in the
form of Exhibit 2.03.
(i) Bankers' Acceptances shall be issued and shall mature on a Business
Day. Each Bankers' Acceptance shall have a term of not less than 28 days and
not more than 182 days excluding days of grace and shall mature on or before
the Maturity Date and shall be in form and substance reasonably satisfactory
to each Canadian Lender.
(ii) The Canadian Borrower hereby appoints each Canadian Lender as its
attorney to sign and endorse on its behalf, in handwriting or by facsimile
or mechanical signature as and when requested by the Canadian Borrower,
blank forms of Bankers' Acceptances. The Canadian Borrower recognizes and
agrees that all Bankers' Acceptances signed or endorsed or both on its
behalf by a Canadian Lender shall bind the Canadian Borrower as fully and
effectually as if signed in the handwriting of and duly issued by the proper
signing officer of the Canadian Borrower. Each Canadian Lender is hereby
authorized to issue such Bankers' Acceptances endorsed in blank in such face
amounts as may be determined by such Canadian Lender provided that the
aggregate amount thereof is equal to the aggregate amount of Bankers'
Acceptances required to be accepted by such Canadian Lender. No Canadian
Lender shall be responsible or liable for its failure to accept a Bankers'
Acceptance if the cause of such failure is, in whole or in part, due to the
failure of the Canadian Borrower to provide duly executed and endorsed
drafts to the Canadian Agent on a timely basis nor shall any Canadian Lender
be liable for any damage, loss or other claim arising by reason of any loss
or improper use of any such instrument except loss or improper use arising
by reason of the gross negligence, willful misconduct or unlawful conduct of
such Canadian Lender, its officers, employees, agents or representatives.
Each Canadian Lender shall maintain a record with respect to Bankers'
Acceptances (A) received by it from the Canadian Agent in blank hereunder,
(B) voided by it for any reason, (C) accepted by it hereunder, (D) purchased
by it hereunder and (E) canceled at their respective maturities. Each
Canadian Lender further agrees to retain such records in the manner and for
the statutory periods provided in the various Canadian provincial or federal
statutes and regulations which apply to such Canadian Lender.
(iii) Intentionally Deleted.
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(iv) Promptly following receipt of a Bankers' Acceptance Notice, the
Canadian Agent shall so advise the Canadian Lenders and shall advise each
Canadian Lender of the face amount of each Bankers' Acceptance to be
accepted by it and the term thereof. The aggregate face amount of Bankers'
Acceptances to be accepted by a Canadian Lender shall be determined by the
Canadian Agent by reference to the respective Canadian Commitments of the
Canadian Lenders, except that, if the face amount of a Bankers' Acceptance,
that would otherwise be accepted by a Canadian Lender, would not be
C$100,000 or an integral multiple thereof, such face amount shall be
increased or reduced by the Canadian Agent in its sole and unfettered
discretion to the nearest integral multiple of C$100,000.
(v) Each Bankers' Acceptance to be accepted by a Canadian Lender shall
be accepted at such Canadian Lender's office shown on the signature pages
hereof or as otherwise designated by such Canadian Lender from time to time.
(vi) On the relevant borrowing date, each Canadian Lender severally
agrees to purchase from the Canadian Borrower, at the face amount thereof
discounted by the Applicable BA Discount Rate, any Bankers' Acceptance
accepted by it and provide to the Canadian Agent, for the account of the
Canadian Borrower, the BA Discount Proceeds in respect thereof after
deducting therefrom the amount of the Acceptance Fee payable by the Canadian
Borrower to such Canadian Lender under Section 2.03(c) in respect of such
Bankers' Acceptance.
(vii) Without any further charge or cost to the Canadian Borrower, each
Canadian Lender may at any time and from time to time hold, sell, rediscount
or otherwise dispose of any or all Bankers' Acceptances accepted and
purchased by it.
(viii) The Canadian Borrower waives presentment for payment and any
other defense to payment of any amounts due to a Canadian Lender in respect
of a Bankers' Acceptance accepted by it pursuant to this Agreement which
might exist solely by reason of such Bankers' Acceptance being held, at the
maturity thereof, by such Canadian Lender in its own right and the Canadian
Borrower agrees not to claim any days of grace if such Canadian Lender as
holder sues the Canadian Borrower on the Bankers' Acceptances for payment of
the amount payable by the Canadian Borrower thereunder.
(ix) No more than six borrowings by way of Bankers' Acceptances shall be
in effect at any time.
(b) With respect to each Bankers' Acceptance, the Canadian Borrower,
prior to the occurrence and continuation of a Default, may give irrevocable
telephone or written notice (or such other method of notification as may be
agreed upon between the Canadian Agent and the Canadian Borrower) to the
Canadian Agent at or before 12:00 noon, Toronto, Ontario time, two (2) Business
Days prior to the maturity date of such Bankers' Acceptances followed by
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written confirmation electronically transmitted to the Canadian Agent on the
same day, of the Canadian Borrower's intention to issue one or more Bankers'
Acceptances on such maturity date (each a "Refunding Bankers' Acceptance") to
provide for the payment of such maturing Bankers' Acceptance (it being
understood that payments by the Canadian Borrower and fundings by the Canadian
Lenders in respect of each maturing Bankers' Acceptance and each related
Refunding Bankers' Acceptance shall be made on a net basis reflecting the
difference between the face amount of such maturing Bankers' Acceptance and the
BA Discount Proceeds (net of the applicable Acceptance Fee) of such Refunding
Bankers' Acceptance). Any funding on account of any maturing Bankers' Acceptance
must be made at or before 12:00 noon, Toronto, Ontario time, on the maturity
date of such Bankers' Acceptance. If the Canadian Borrower fails to give such
notice, then subject to satisfaction of the conditions in Article V and to the
Maximum Canadian Available Amount, the Canadian Borrower shall be irrevocably
deemed to have requested and to have been advanced a Canadian Prime Loan in the
face amount of such maturing Bankers' Acceptance on the maturity date of such
Bankers' Acceptance from the Canadian Lender which accepted such maturing
Bankers' Acceptance, which Canadian Prime Loan shall thereafter bear interest as
such in accordance with the provisions hereof until paid in full.
(c) An Acceptance Fee shall be payable by the Canadian Borrower to each
Canadian Lender in advance (in the manner specified in Section 2.03(a)(vi)) in
respect of a Bankers' Acceptance to be accepted by such Canadian Lender
calculated at the rate per annum equal to the Margin Percentage applicable to
LIBOR Borrowings, calculated on the face amount of such Bankers' Acceptance and
computed on the basis of the number of days in the term of such Bankers'
Acceptance and a year of 365 days.
(d) If the Canadian Borrower fails to provide Cover for any Bankers'
Acceptance Liabilities, the amount of such Cover shall bear interest at the Past
Due Rate until the date such Cover is provided.
SECTION 2.04. Terminations, Reductions or Reallocations of Commitments.
(a) Mandatory. On the Termination Date, all Commitments shall be
terminated in their entirety.
(b) Optional. The U.S. Borrower or the Canadian Borrower, as the case
may be, shall have the right to terminate or reduce the unused portion of the
U.S. Commitments or the Canadian Commitments, as the case may be, at any time or
from time to time, provided that (i) the U.S. Borrower or the Canadian Borrower,
as the case may be, shall give notice of each such termination or reduction to
the appropriate Agent as provided in Section 4.03 and (ii) each such partial
reduction shall be in an integral multiple of $5,000,000. Notwithstanding the
foregoing, the U.S. Borrower may not reduce the U.S. Commitments below the then
outstanding principal balance of the U.S. Obligations and the Canadian Borrower
may not reduce the Canadian Commitments below the then outstanding principal
balance of the Canadian
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Obligations. No termination or reduction of the Commitments pursuant to this
provision may be reinstated without the prior written approval of both Agents
and all the Lenders.
(c) Reallocations. Any Dual Lender may agree with the Borrowers to
reallocate its existing U.S. Commitment and Canadian Commitment, so long as the
sum of such U.S. Commitment and Canadian Commitment remains unchanged. In
addition, with the prior written consent of all of the Dual Lenders, any U.S.
Lender may agree with the Borrowers to convert a portion of its U.S. Commitment
into a Canadian Commitment, thereby becoming a Dual Lender, and any Canadian
Lender may agree with the Borrowers to convert a portion of its Canadian
Commitment into a U.S. Commitment, in each case so long as, after giving effect
thereto (i) such Lender or an Affiliate of such Lender shall be a U.S. Lender
with a U.S. Commitment of at least $1,000,000, and (ii) the sum of such Lender's
(and such Affiliate's, if applicable) U.S. Commitment and Canadian Commitment
remains equal to the aggregate amount of such Lender's (and such Affiliate's, if
applicable) U.S. Commitment and Canadian Commitment prior to such reallocation.
The Borrowers shall give written notice to the Agents of any reallocation
pursuant to this provision at least ten Business Days prior to the effective
date of any such reallocation. No Lender shall be required to agree to any such
reallocation, but may do so at its option, in its sole discretion. The following
conditions precedent must be satisfied prior to any such reallocation becoming
effective:
(i) no Default or Event of Default shall have occurred and be
continuing;
(ii) the Borrowers shall execute and deliver new Notes to the Agents
evidencing the reallocated Commitments, and if the Dual Lender has delivered
the replaced Notes to the Agents, the Agents shall deliver such replaced
Notes to the Borrowers.
(iii) if, as a result of any such reallocation, the aggregate U.S.
Obligations would exceed the aggregate of all of the U.S. Commitments, then
the U.S. Borrower shall, on the effective date of such reallocation, repay
or prepay the U.S. Loans (or provide Cover for Letter of Credit Liabilities
relating to the U.S. Letters of Credit) in accordance with this Agreement in
an aggregate principal amount such that, after giving effect thereto, the
aggregate U.S. Obligations shall not exceed the aggregate of all of the U.S.
Commitments;
(iv) if, as a result of any such reallocation, the Total Canadian
Exposure would exceed the aggregate of all of the Canadian Commitments
(expressed in Dollars), then the Canadian Borrower shall, on the effective
date of such reallocation, repay or prepay the Canadian Loans (or provide
Cover for Letter of Credit Liabilities relating to the Canadian Letters of
Credit or for Bankers' Acceptance Liabilities) in accordance with this
Agreement in an aggregate principal amount such that, after giving effect
thereto, the Total Canadian Exposure shall not exceed the aggregate of all
of the Canadian Commitments (expressed in Dollars);
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(v) the Borrowers shall have paid any amounts (or shall have provided
Cover) due under Sections 2.09(c) or (d) hereof on the date of such
reallocation;
(vi) The Maximum Canadian Available Amount shall be adjusted to equal
the sum of all of the Canadian Commitments after giving effect to such
reallocation and the Maximum U.S. Available Amount shall be adjusted to
equal the sum of all of the U.S. Commitments after giving effect to such
reallocation;
(vii) participations by the Lenders in the outstanding Letters of Credit
and the Letter of Credit Liabilities and the outstanding Loans of the
Lenders shall be adjusted to give effect to such reallocation; provided,
however, that in lieu of requiring any prepayment of any Bankers'
Acceptances in order to make appropriate adjustments to give effect to such
reallocations, the Canadian Borrower shall be required to provide additional
Cover for any applicable portion of the Bankers' Acceptance Liabilities;
(viii) each Lender whose U.S. Commitment or Canadian Commitment shall be
the subject of any reallocation shall have received from the Borrowers a fee
equal to the greater of $3,000.00 or 1/16 of 1% of the amount of the
increase or decrease, as the case be, in its Canadian Commitment.
SECTION 2.05. Commitment Fees. (a) The U.S. Borrower shall pay to the
U.S. Administrative Agent for the account of each U.S. Lender, and the Canadian
Borrower shall pay to the Canadian Agent for the account of each Canadian
Lender, commitment fees for the period from the Effective Date to and including
the Termination Date at a rate per annum equal to the Commitment Fee Percentage.
Such commitment fees shall be computed (on the basis of the actual number of
days elapsed in a year composed of 360 days) on each day and shall be based on
the excess of (x) the aggregate amount of each Lender's Commitment for such day
over (y) the sum of (i) the aggregate unpaid principal balance (in Dollars) of
such Lender's Note or Notes on such day plus (ii) the aggregate Letter of Credit
Liabilities as to such Lender for such day plus, in the case of the Canadian
Lenders only, (iii) the aggregate Bankers' Acceptance Liabilities outstanding on
such day. Accrued commitment fees shall be payable in arrears on the Quarterly
Dates prior to the Termination Date and on the Termination Date, with any
Canadian Obligations converted to Dollars at the Exchange Rate on each such date
for the purposes of each such calculation.
(b) All past due fees payable under this Section 2.05 shall bear
interest at the Past Due Rate.
SECTION 2.06. Several Obligations. The failure of any Lender to make any
Loan to be made by it or to accept and purchase any Bankers' Acceptance required
to be so accepted and purchased by it on the date specified therefor shall not
relieve any other Lender of its obligation to make its Loan or to accept and
purchase its Bankers' Acceptance on such date, but neither Agent nor any Lender
shall be responsible or liable for the failure of any other
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Lender to make a Loan or to accept and purchase any Bankers' Acceptance or to
participate in, or co-issue, any Letter of Credit. Notwithstanding anything
contained herein to the contrary, (a) if a U.S. Lender fails to make a U.S. Loan
or participate in, or co-issue, any Letter of Credit as and when required
hereunder, then upon each subsequent event which would otherwise result in
payments of principal being made to the defaulting U.S. Lender, the amount which
would have been paid to the defaulting U.S. Lender shall be divided among the
non-defaulting U.S. Lenders ratably according to their respective Commitment
Percentages until the Obligations of each U.S. Lender (including the defaulting
U.S. Lender) are equal to such U.S. Lender's Commitment Percentage of the total
U.S. Obligations and (b) if a Canadian Lender fails to make a Canadian Loan or
accept and purchase any Bankers' Acceptance or participate in, or co-issue any
Letter of Credit as and when required hereunder, then upon each subsequent event
which would otherwise result in payments of principal being made to the
defaulting Canadian Lender, the amount which would have been paid to the
defaulting Canadian Lender shall be divided among the non-defaulting Canadian
Lenders ratably according to their respective Commitment Percentages until the
Obligations of each Canadian Lender (including the defaulting Canadian Lender)
are equal to such Canadian Lender's Commitment Percentage of the total Canadian
Obligations.
SECTION 2.07. Notes. The U.S. Loans made by each U.S. Lender shall be
evidenced by a single U.S. Note of the U.S. Borrower in substantially the form
of Exhibit 1.01F payable to the order of such U.S. Lender in a principal amount
equal to the U.S. Commitment of such U.S. Lender, and otherwise duly completed.
The Canadian Loans made by each Canadian Lender that are denominated in Dollars
shall be evidenced by a single Canadian Note of the Canadian Borrower in
substantially the form of Exhibit 1.01B payable to the order of such Canadian
Lender in a principal amount equal to the Canadian Commitment of such Canadian
Lender, and otherwise duly completed, if requested by such Lender. The Canadian
Prime Loans made by each Canadian Lender shall be evidenced by a single Canadian
Dollar Note of the Canadian Borrower in substantially the form of Exhibit 1.01C
payable to the order of such Canadian Lender in a principal amount equal to the
Canadian Commitment of such Canadian Lender, and otherwise duly completed, if
requested by such Lender. The promissory notes described in this Section 2.07
are each, together with all renewals, extensions, modifications and replacements
thereof and substitutions therefor, called a "Note" and collectively called the
"Notes". Each Lender is hereby authorized by each Borrower to note in such
Lender's records or endorse on the schedule (or a continuation thereof) that may
be attached to each Note of such Lender, to the extent applicable, the date,
amount, type of and the applicable period of interest for each Loan made by such
Lender to the applicable Borrower hereunder, and the amount of each payment or
prepayment of principal of such Loan received by such Lender, provided, that any
failure by such Lender to make any such endorsement shall not affect the
obligations of either Borrower under such Note or hereunder in respect of such
Loan.
SECTION 2.08. Use of Proceeds. The proceeds of the Loans and of the
acceptance and purchase of Bankers' Acceptances shall be used by the Borrowers
for working capital and general corporate purposes, including business
acquisitions, working capital and
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capital expenditures. Neither Agent nor any Lender shall have any responsibility
as to the use of any proceeds of the Loans or of the acceptance and purchase of
Bankers' Acceptances.
SECTION 2.09. Currency Fluctuations. (a) Not later than 1:00 p.m.,
Houston, Texas time, on each Calculation Date, the U.S. Administrative Agent
shall determine the Exchange Rate as of such Calculation Date. The Exchange Rate
so determined shall become effective on the first Business Day immediately
following the relevant Calculation Date (a "Reset Date") and shall remain
effective until the next succeeding Calculation Date.
(b) Not later than 3:00 p.m., Houston, Texas time, on each Reset Date,
the U.S. Administrative Agent shall consult with the Canadian Agent and the
Agents shall determine the Total Canadian Exposure and the aggregate U.S.
Obligations.
(c) If, on any Reset Date or on the date of any reallocation of the U.S.
Commitments and the Canadian Commitments pursuant to Section 2.04(c) hereof, the
sum of the aggregate U.S. Obligations and the Total Canadian Exposure exceeds
the aggregate of all of the U.S. Commitments and the Canadian Commitments
(expressed in Dollars) by five percent (5%) or more, then (i) the Agents shall
give notice thereof to the Lenders and the Borrowers and (ii) the Borrowers
shall within two (2) Business Days thereafter, repay or prepay Loans (or provide
Cover for Letter of Credit Liabilities or Bankers' Acceptance Liabilities) in
accordance with this Agreement in an aggregate principal amount sufficient to
reduce the sum of the aggregate U.S. Obligations and the Total Canadian Exposure
to the aggregate of all of the U.S. Commitments and the Canadian Commitments
(expressed in Dollars).
(d) If, on any day prior to the Termination Date, the Total Canadian
Exposure exceeds the aggregate of all of the Canadian Commitments (expressed in
Dollars) by five percent (5%) or more, then (i) the Canadian Agent shall give
notice thereof to the Canadian Borrower and the Canadian Lenders and (ii) within
two Business Days thereafter, the Canadian Borrower shall repay or prepay the
Canadian Loans (or provide Cover for Letter of Credit Liabilities relating to
the Canadian Letters of Credit or Bankers' Acceptance Liabilities) in accordance
with this Agreement in an aggregate principal amount such that, after giving
effect thereto, the Total Canadian Exposure shall not exceed the aggregate of
all of the Canadian Commitments (expressed in Dollars).
ARTICLE III
BORROWINGS, PREPAYMENTS AND INTEREST OPTIONS
SECTION 3.01. Borrowings. The applicable Borrower shall give the
applicable Agent notice of each borrowing to be made hereunder as provided in
Section 4.03 (or Section 2.03 in case of Bankers' Acceptances), and the
applicable Agent shall promptly notify each applicable Lender of such request.
Not later than 12:00 noon, Houston, Texas time (in the case of the U.S. Loans)
or 1:00 p.m. Toronto, Ontario time (in the case of the Canadian Loans which
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are not same-day fundings and Bankers' Acceptances), or 12:00 noon Toronto,
Ontario time (in the case of the Canadian Loans which are same day fundings), on
the date specified for each such borrowing hereunder, each applicable Lender
shall make available the amount of the Loan, if any, to be made by it on such
date and/or the proceeds of the acceptance and purchase of any Bankers'
Acceptances, if any, to be so accepted and purchased by it on such date to the
applicable Agent at its Principal Office, in immediately available funds, for
the account of the applicable Borrower. Such amounts received by the applicable
Agent will be held in an account maintained by the applicable Borrower with the
applicable Agent. The amounts so received by the applicable Agent shall, subject
to the terms and conditions of this Agreement, be made available to the
applicable Borrower by wiring or otherwise transferring, in immediately
available funds, such amount to an account designated by the applicable Borrower
and approved by the applicable Agent.
SECTION 3.02. Prepayments.
(a) Optional Prepayments. Except as provided in Section 3.03, each
Borrower shall have the right to prepay, on any Business Day, in whole or in
part, without the payment of any penalty or fee, any of the Obligations (other
than Obligations relating to Bankers' Acceptances) at any time or from time to
time, provided that the applicable Borrower shall give the applicable Agent
notice of each such prepayment as provided in Section 4.03. Each optional
prepayment on a Loan shall be in an amount equal to an integral multiple of
$3,000,000 (in respect of U. S. Loans) or C$1,000,000 (in respect of U.S. Loans
denominated in Canadian Dollars) or $1,000,000 (in respect of Canadian Loans
denominated in Dollars) or C$1,000,000 in respect of Canadian Loans denominated
in Canadian Dollars). Bankers' Acceptances may not be prepaid.
(b) Interest Payments. Accrued and unpaid interest on the unpaid
principal balance of the Notes shall be due and payable in arrears on the
Interest Payment Dates.
(c) Payments and Interest on Reimbursement Obligations. Each Borrower
will pay to the applicable Agent for the account of each applicable Lender the
amount of each Reimbursement Obligation with respect to such Borrower on the
date on which the applicable Agent notifies the applicable Borrower of the date
and amount of the applicable payment by the Issuer of any drawing under a Letter
of Credit or payment of any Bankers' Acceptance on maturity. The amount of any
Reimbursement Obligation may, if the applicable conditions precedent specified
in Sections 5.01 and 5.02 have been satisfied, be paid with the proceeds of
Loans or, in the case of the Canadian Obligations, of the acceptance and
purchase of Bankers' Acceptances. Subject to Section 13.18, each Borrower will
pay to the applicable Agent for the account of each applicable Lender interest
on any Reimbursement Obligation at (i) at either the Canadian Alternate Base
Rate or the U.S. Alternate Base Rate, as the case may be (with respect to
Reimbursement Obligations denominated in Dollars), or at the Canadian Prime Rate
(with respect to Reimbursement Obligations denominated in Canadian Dollars) plus
the applicable Margin Percentage from the date such Reimbursement Obligation
arises until the date five
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Business Days thereafter and (ii) at the applicable Past Due Rate thereafter
until the same is paid in full.
(d) Mandatory Prepayments. On the date that a Change of Control of the
type described in clause (c) of the definition of that term occurs and on the
date that is 15 days after the occurrence of any other type of Change of
Control, the Borrowers shall prepay the outstanding principal amount of the
Loans and shall provide Cover with respect to Letter of Credit Liabilities and
Bankers' Acceptance Liabilities (i) with respect to Letters of Credit
denominated in Dollars, in Dollars in immediately available funds in an amount
equal to the aggregate Letter of Credit Liabilities for such Letters of Credit
and (ii) with respect to Bankers' Acceptances and Letters of Credit denominated
in Canadian Dollars, in Canadian Dollars in immediately available funds in an
amount equal to the Letter of Credit Liabilities and the Bankers' Acceptance
Liabilities for such Canadian Letters of Credit and Bankers' Acceptances.
SECTION 3.03. Interest Options
(a) Options Available. The outstanding principal balance of the Canadian
Dollar Notes shall bear interest at the Canadian Prime Rate and the outstanding
principal balance of the other Notes shall bear interest at either the U.S.
Alternate Base Rate, in the case of Notes issued by the U.S. Borrower, or the
Canadian Alternate Base Rate, in the case of Notes issued by the Canadian
Borrower; provided, that (i) all past due amounts, both principal and accrued
interest, shall bear interest at the Past Due Rate, and (ii) subject to the
provisions hereof, each Borrower shall have the option of having all or any
portion of the principal balances of its Notes (other than the Canadian Dollar
Notes) from time to time outstanding bear interest at a Eurodollar Rate. The
records of the Agents and each of the Lenders with respect to Interest Options,
Interest Periods and the amounts of the Loans to which they are applicable shall
be binding and conclusive, absent manifest error. Interest on the amount of each
advance against the Notes shall be computed on the amount of that advance and
from the date it is made. Notwithstanding anything in this Agreement to the
contrary, for the full term of the Notes the interest rate produced by the
aggregate of all sums paid or agreed to be paid to the holders of the Notes for
the use, forbearance or detention of the debt evidenced thereby (including all
interest on the Notes at the Stated Rate plus the Additional Interest) shall not
exceed the Ceiling Rate.
(b) Designation and Conversion. Each Borrower shall have the right to
designate or convert its Interest Options in accordance with the provisions
hereof. Provided no Default or Event of Default has occurred and is continuing
and subject to the last sentence of Section 3.03(a) and the provisions of
Section 3.03(c), each Borrower may elect to have a Eurodollar Rate apply or
continue to apply to all or any portion of the principal balance of its Notes
(other than the Canadian Dollar Notes). Each change in Interest Options shall be
a conversion of the rate of interest applicable to the specified portion of the
Loans, but such
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conversion shall not change the respective outstanding principal balances of the
applicable Notes. The Interest Options shall be designated or converted in the
manner provided below:
(i) The applicable Borrower shall give the applicable Agent a written
Rate Designation Notice (and the applicable Agent shall promptly inform each
applicable Lender thereof). Each such written notice shall specify the
amount of the Loan which is the subject of the designation, if any; the
amount of borrowings into which such borrowings are to be converted or for
which an Interest Option is designated; the proposed date for the
designation or conversion and the Interest Period or Periods, if any,
selected by the applicable Borrower. Such notice shall be irrevocable and
shall be given to the applicable Agent no later than the applicable Rate
Designation Date.
(ii) No more than five LIBOR Borrowings shall be in effect with respect
to the U.S. Loans at any time and no more than three LIBOR Borrowings shall
be in effect with respect to the Canadian Loans at any time. No single LIBOR
Borrowing may include both U.S. Loans and Canadian Loans.
(iii) Each designation or conversion of a LIBOR Borrowing shall occur on
a Business Day.
(iv) Except as provided in Section 3.03(c), no LIBOR Borrowing shall be
converted to a Base Rate Borrowing or another LIBOR Borrowing on any day
other than the last day of the applicable Interest Period.
(v) Each request for a LIBOR Borrowing shall be in the amount equal to
an integral multiple of $100,000.
(vi) Each designation of an Interest Option with respect to the U.S.
Notes shall apply to all of the U.S. Notes ratably in accordance with their
respective outstanding principal balances. Each designation of an Interest
Option with respect to the Canadian Notes shall apply to all of the Canadian
Notes ratably in accordance with their respective outstanding principal
balances. If any Lender assigns an interest in any of its Notes when any
LIBOR Borrowing is outstanding with respect thereto, then such assignee
shall have its ratable interest in such LIBOR Borrowing.
(vii) The entire outstanding principal balance of the Canadian Dollar
Notes shall bear interest at the Canadian Prime Rate.
(c) Special Provisions Applicable to LIBOR Borrowings.
i) Options Unlawful. If the adoption of any applicable Requirement of
Law after the Effective Date or any change after the Effective Date in any
applicable Requirement of Law or in the interpretation or administration
thereof by any Govern-
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mental Authority or compliance by any Lender with any request or directive
(whether or not having the force of law) issued after the Effective Date by
any central bank or other Governmental Authority shall at any time make it
unlawful or impossible for any Lender to permit the establishment of or to
maintain any LIBOR Borrowing, the commitment of such Lender to establish or
maintain such LIBOR Borrowing shall forthwith be canceled and the applicable
Borrower shall forthwith, upon demand by the applicable Agent to such
Borrower, (A) convert the LIBOR Borrowing of such Lender with respect to
which such demand was made to a Base Rate Borrowing; (B) pay all accrued and
unpaid interest to date on the amount so converted; and (C) pay any amounts
required to compensate each Lender for any additional cost or expense which
any Lender may incur as a result of such adoption of or change in such
Requirement of Law or in the interpretation or administration thereof and
any Funding Loss which any Lender may incur as a result of such conversion;
provided, however, all such amounts shall be for the account of such Lender.
If, when either Agent so notifies either Borrower, such Borrower has given a
Rate Designation Notice specifying a LIBOR Borrowing but the selected
Interest Period has not yet begun, as to the applicable Lender such Rate
Designation Notice shall be deemed to be of no force and effect, as if never
made, and the balance of the Loans made by such Lender specified in such
Rate Designation Notice shall bear interest at the Base Rate until a
different available Interest Option shall be designated in accordance
herewith.
ii) Increased Cost of Borrowings. If the adoption after the Effective
Date of any applicable Requirement of Law or any change after the Effective
Date in any applicable Requirement of Law or in the interpretation or
administration thereof by any Governmental Authority or compliance by any
Lender with any request or directive (whether or not having the force of
law) issued after the Effective Date by any central bank or Governmental
Authority shall at any time as a result of any portion of the principal
balances of the Notes being maintained on the basis of a Eurodollar Rate:
(A) subject any Lender to any Taxes, or any deduction or
withholding for any Taxes, on or from any payment due under any
LIBOR Borrowing; or
(B) impose, modify, increase or deem applicable any reserve
requirement (excluding that portion of any reserve requirement
included in the calculation of the applicable Eurodollar Rate),
special deposit requirement or similar requirement (including, but
not limited to, state law requirements and Regulation D) against
assets of any Lender, or against deposits with any Lender, or
against loans made by any Lender, or against any other funds,
obligations or other Property owned or held by any Lender; or
(C) impose on any Lender any other condition regarding any LIBOR
Borrowing;
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and the result of any of the foregoing is to increase the cost to
any Lender of agreeing to make or of making, renewing or maintaining
such LIBOR Borrowing, or reduce the amount of principal or interest
received by any Lender, then, within 15 Business Days after demand
by either Agent (accompanied by a statement setting forth in
reasonable detail the applicable Lender's basis therefor), the
applicable Borrower shall pay to the applicable Agent additional
amounts which shall compensate each Lender for such increased cost
or reduced amount. The determination by any Lender of the amount of
any such increased cost, increased reserve requirement or reduced
amount shall be presumed correct, absent manifest error. Each
Borrower shall have the right, if it receives from either Agent any
notice referred to in this paragraph, upon three Business Days'
notice to the applicable Agent (which shall notify each affected
Lender), either (1) to repay in full (but not in part) any borrowing
with respect to which such notice was given, together with any
accrued interest thereon, or (2) to convert the LIBOR Borrowing
which is the subject of the notice to a Base Rate Borrowing;
provided, that any such repayment or conversion shall be accompanied
by payment of (I) the amount required to compensate each Lender for
the increased cost or reduced amount referred to in the preceding
paragraph, (II) all accrued and unpaid interest to date on the
amount so repaid or converted, and (III) any Funding Loss which any
Lender may incur as a result of such repayment or conversion; and
further provided that all such amounts shall be for such Lender's
account. Each Lender will notify the applicable Borrower through the
applicable Agent of any event occurring after the date of this
Agreement which will entitle such Lender to compensation pursuant to
this Section as promptly as practicable after it obtains knowledge
thereof and determines to request such compensation, and (if so
requested by the applicable Borrower through the applicable Agent)
will designate a different lending office of such Lender for the
applicable LIBOR Borrowing or will take such other action as the
applicable Borrower may reasonably request if such designation or
action is consistent with legal and regulatory restrictions, will
avoid the need for, or reduce the amount of, such compensation and
will not, in the sole opinion of such Lender, be disadvantageous to
such Lender; (provided that no such U.S. Lender shall have any
obligation so to designate a different lending office that is not
located in the United States of America and no such Canadian Lender
shall have any obligation so to designate a different lending office
that is not located in Canada).
iii) Inadequacy of Pricing and Rate Determination. If, for any reason
with respect to any Interest Period, either Agent (or, in the case of clause
(B) below, the applicable Lender) shall have determined (which determination
shall be presumed correct with respect to each Borrower, absent manifest
error) that:
(A) either Agent is unable through its customary general
practices to determine any applicable Eurodollar Rate, or
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(B) any applicable Eurodollar Rate will not adequately and
fairly reflect the cost to any Lender of making and maintaining such
LIBOR Borrowing hereunder for any proposed Interest Period,
then the applicable Agent shall give the applicable Borrower notice
thereof and thereupon, (1) any Rate Designation Notice previously given by
such Borrower designating the applicable LIBOR Borrowing which has not
commenced as of the date of such notice from either Agent shall be deemed
for all purposes hereof to be of no force and effect, as if never given, and
(2) until the applicable Agent shall notify such Borrower that the
circumstances giving rise to such notice from such Agent no longer exist,
each Rate Designation Notice requesting the applicable Eurodollar Rate shall
be deemed a request for a Base Rate Borrowing, and any applicable LIBOR
Borrowing then outstanding shall be converted, without any notice to or from
either Borrower, upon the termination of the Interest Period then in effect
with respect to it, to a Base Rate Borrowing.
iv) Funding Losses. Each Borrower shall indemnify each applicable Lender
against and hold each applicable Lender harmless from any Funding Loss
relating to Loans to such Borrower or relating to Bankers' Acceptances
requested by such Borrower. This indemnity shall survive the payment of the
Notes. A certificate of any Lender (explaining in reasonable detail the
amount and calculation of the amount claimed) as to any additional amounts
payable pursuant to this paragraph submitted to the applicable Borrower
shall be presumed correct with respect to such Borrower, absent manifest
error.
(d) Funding Offices; Adjustments Automatic; Calculation Year. Any Lender
may, if it so elects, fulfill its obligation as to any LIBOR Borrowing by
causing a branch or affiliate of such Lender to make such Loan and may transfer
and carry such Loan at, to or for the account of any branch office or affiliate
of such Lender; provided, that in such event for the purposes of this Agreement
such Loan shall be deemed to have been made by such Lender and the obligation of
the applicable Borrower to repay such Loan shall nevertheless be to such Lender
and shall be deemed held by it for the account of such branch or affiliate.
Without notice to either Borrower or any other Person, each rate required to be
calculated or determined under this Agreement shall automatically fluctuate
upward and downward in accordance with the provisions of this Agreement.
Interest at the Canadian Prime Rate shall be computed on the basis of the actual
number of days elapsed in a year consisting of 365 or 366 days, as the case may
be. All other interest required to be calculated or determined under this
Agreement shall be computed on the basis of the actual number of days elapsed in
a year consisting of 360 days, unless the Ceiling Rate would thereby be
exceeded, in which event, to the extent necessary to avoid exceeding the Ceiling
Rate, the applicable interest shall be computed on the basis of the actual
number of days elapsed in the applicable calendar year in which such interest
accrued.
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(e) Funding Sources. Notwithstanding any provision of this Agreement to
the contrary, each Lender shall be entitled to fund and maintain its funding of
all or any part of the Loans in any manner it sees fit, it being understood,
however, that for the purposes of this Agreement all determinations hereunder
shall be made as if each Lender had actually funded and maintained each LIBOR
Borrowing during each Interest Period through the purchase of deposits having a
maturity corresponding to such Interest Period and bearing an interest rate
equal to the Eurodollar Rate for such Interest Period.
ARTICLE IV
PAYMENTS; PRO RATA TREATMENT; COMPUTATIONS, ETC.
SECTION 4.01. Payments. (a) Except to the extent otherwise provided
herein, all payments of principal, interest, Reimbursement Obligations and other
amounts to be made by either Borrower hereunder, under the Notes and under the
other Loan Documents shall be made (i) with respect to Bankers' Acceptance
Liabilities, Canadian Prime Loans and Reimbursement Obligations with respect to
Letters of Credit denominated in Canadian Dollars, in Canadian Dollars, and (ii)
in all other cases, in Dollars, in immediately available funds, to the
applicable Agent at its Principal Office (or in the case of a successor U.S.
Administrative Agent, at the principal office of such successor U.S.
Administrative Agent in the United States or in the case of a successor Canadian
Agent, at the principal office of such successor Canadian Agent in Canada), not
later than 11:00 a.m., Houston, Texas time (in the case of any payment by the
U.S. Borrower), or 12:00 noon, Toronto, Ontario time (in the case of any payment
by the Canadian Borrower), on the date on which such payment shall become due
(each such payment made after such time on such due date to be deemed to have
been made on the next succeeding Business Day).
(b) Each Borrower shall, at the time of making each payment hereunder,
under any Note or under any other Loan Document, specify to the applicable Agent
the Obligations payable by such Borrower hereunder or thereunder to which such
payment is to be applied. Each payment received by either Agent hereunder, under
any Note or under any other Loan Document for the account of a Lender shall be
paid promptly to such Lender, in immediately available funds. If either Agent
fails to send to any Lender the applicable amount by the close of business on
the date any such payment is received by such Agent if such payment is received
prior to 11:00 a.m., Houston, Texas time (in the case of any payment to a U.S.
Lender), or 12:00 noon, Toronto, Ontario time (in the case of any payment to a
Canadian Lender), (or on the next succeeding Business Day with respect to
payments which are received after such time), such Agent shall pay to the
applicable Lender interest on such amount from such date at a rate of interest
per annum equal to (i) in respect of Obligations which are denominated in
Dollars, the Federal Funds Rate and (ii) in respect of the Canadian Obligations
which are denominated in Canadian Dollars, the CDOR Rate.
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(c) If the due date of any payment hereunder or under any other Loan
Document falls on a day which is not a Business Day, the due date for such
payments (except as otherwise provided in the definition of "Interest Period"
set forth in Section 1.01) shall be extended to the next succeeding Business Day
and interest shall be payable for any principal so extended for the period of
such extension.
(d) All payments (whether of principal, interest, fees, reimbursements
or otherwise) by the Borrowers hereunder and under the other Loan Documents
shall be made without set off or counterclaim and shall be made free and clear
of and without deduction for or on account of any present or future income,
stamp, or other taxes, fees, duties, withholding or other charges of any nature
whatsoever imposed by any taxing authority excluding in the case of each Lender
taxes imposed on or measured by its net income or franchise taxes imposed by the
United States or its political subdivisions or the jurisdiction in which it is
organized or has its principal office or applicable lending office (such
non-excluded items being hereinafter referred to as "Taxes"). If as a result of
any change in law (or the interpretation thereof) after the date that the
applicable Lender became a "Lender" under this Agreement any withholding or
deduction from any payment to be made to, or for the account of, a Lender by
either Borrower hereunder or under any other Loan Document is required in
respect of any Taxes pursuant to any applicable law, rule, or regulation, then
such Borrower will (i) pay to the relevant authority the full amount required to
be so withheld or deducted; (ii) to the extent available, promptly forward to
the applicable Agent an official receipt or other documentation reasonably
satisfactory to such Agent evidencing such payment to such authority; and (iii)
pay to the applicable Agent, for the account of each affected Lender, such
additional amount or amounts as are necessary to ensure that the net amount
actually received by such Lender will equal the full amount such Lender would
have received had no such withholding or deduction been required. Each Lender
shall determine such additional amount or amounts payable to it (which
determination shall, in the absence of manifest error, be presumed correct with
respect to each Borrower). If a Lender becomes aware that any such withholding
or deduction from any payment to be made by either Borrower hereunder or under
any other Loan Document is required, then such Lender shall promptly notify the
applicable Agent and the applicable Borrower thereof stating the reasons
therefor and the additional amount required to be paid under this Section. Each
Lender shall execute and deliver to the applicable Agent and the applicable
Borrower such forms as it may be required to execute and deliver pursuant to
Section 13.13. To the extent that any such withholding or deduction results from
the failure or delay of a Lender to provide a form required by Section 13.13
(unless such failure or delay is due to some prohibition under applicable
Requirement of Laws), the applicable Borrower shall have no obligation to pay
the additional amount required by clause (iii) above. Anything in this Section
4.01 notwithstanding, if any Lender elects to require payment by either Borrower
of any material amount under this Section, the applicable Borrower may, within
60 days after the date of receiving notice thereof and so long as no Default
shall have occurred and be continuing, elect to terminate such Lender as a party
to this Agreement; provided that, concurrently with such termination the
applicable Borrower shall (i) if the Agents and each of the other Lenders shall
consent, pay that Lender all principal, interest and fees and other amounts owed
to such Lender
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through such date of termination or (ii) have arranged for an Eligible Assignee
to become a substitute Lender for all purposes under this Agreement in the
manner provided in Section 13.06; provided further that, prior to substitution
for any Lender, the applicable Borrower shall have given written notice to the
Agents of such intention and the Lenders shall have the option, but no
obligation, for a period of sixty (60) days after receipt of such notice, to
increase their Commitments in order to replace the affected Lender in lieu of
such substitution.
(e) Notwithstanding the foregoing, in no event shall the compensation
payable under this Section (to the extent, if any, constituting interest under
applicable laws) together with all amounts constituting interest under
applicable laws and payable in connection with this Agreement and the other Loan
Documents exceed the Ceiling Rate.
SECTION 4.02. Pro Rata Treatment. Except to the extent otherwise
provided herein: (a) each borrowing from the Lenders under Section 2.01 shall be
made (i) in the case of the Canadian Loans, ratably from the Canadian Lenders in
accordance with their respective Canadian Commitments and (ii) in the case of
the U.S. Loans, ratably from the U.S. Lenders in accordance with their
respective U.S. Commitments; (b) each payment of commitment fees shall be made
for the account of the Lenders, and each termination or reduction of the
Commitments under Section 2.03 shall be applied, pro rata, according to the
Lenders' respective Commitments; (c) each payment by either Borrower of
principal of or interest on the Loans or any Bankers' Acceptance shall be made
to the applicable Agent for the account of the applicable Lenders pro rata in
accordance with the respective unpaid principal amounts of the Loans held by or
Bankers' Acceptances accepted by such Lenders; and (d) the applicable Lenders
(other than the applicable Issuer) shall purchase from the applicable Issuer
participations in each Letter of Credit to the extent of their respective U.S.
Commitment Percentages or Canadian Commitment Percentages, as the case may be.
SECTION 4.03. Certain Actions, Notices, Etc. Notices to the applicable
Agent of any termination or reduction of Commitments and of borrowings and
optional prepayments of Loans and requests for issuances of Letters of Credit
shall be irrevocable and shall be effective only if received by the applicable
Agent not later than 11:00 a.m., Houston, Texas time (in the case of the U.S.
Loans and the U.S. Letters of Credit), 11:00 a.m., Toronto, Ontario time (in the
case of Canadian Loans that are same day fundings) or 12:00 noon, Toronto,
Ontario time (in the case of the Canadian Loans that are not same day fundings)
and the Canadian Letters of Credit), on the number of Business Days prior to the
date of the relevant termination, reduction, borrowing and/or prepayment
specified below:
Number of Business Days
Prior Notice
Termination or Reduction of
Commitments 5
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Loan repayment 1
Base Rate Borrowings same day
and Canadian Prime Loans
Bankers' Acceptances 2
Letter of Credit issuance 3
Selection of a Eurodollar Rate 3
Each such notice of termination or reduction shall specify the amount of the
applicable Commitment to be terminated or reduced. Each such notice of borrowing
or prepayment shall specify the amount of the Loans to be borrowed or prepaid
and the date of borrowing or prepayment (which shall be a Business Day). The
applicable Agent shall promptly notify the affected Lenders of the contents of
each such notice.
SECTION 4.04. Non-Receipt of Funds by Either Agent. Unless the
applicable Agent shall have been notified by a Lender or a Borrower (the
"Payor") prior to the date on which such Lender is to make payment to such Agent
of the proceeds of a Loan (or funding of a drawing under a Letter of Credit or
reimbursement with respect to any drawing under a Letter of Credit or funding of
a payment under a Bankers' Acceptance or reimbursement with respect to any
payment under a Bankers' Acceptance) to be made by it hereunder or the
applicable Borrower is to make a payment to such Agent for the account of one or
more of the Lenders, as the case may be (such payment being herein called the
"Required Payment"), which notice shall be effective upon receipt, that the
Payor does not intend to make the Required Payment to such Agent, the applicable
Agent may assume that the Required Payment has been made and may, in reliance
upon such assumption (but shall not be required to), make the amount thereof
available to the intended recipient on such date and, if the Payor has not in
fact made the Required Payment to such Agent, the recipient of such payment (or,
if such recipient is the beneficiary of a Letter of Credit, the applicable
Borrower and, if such Borrower fails to pay the amount thereof to the applicable
Agent forthwith upon demand, the applicable Lenders ratably in proportion to
their respective Commitment Percentages) shall, on demand, pay to such Agent the
amount made available by such Agent, together with interest thereon in respect
of the period commencing on the date such amount was so made available by such
Agent until the date Agent recovers such amount at a rate of interest per annum
equal to (a) in respect of Obligations which are denominated in Dollars, the
Federal Funds Rate and (b) in respect of Canadian Obligations which are
denominated in Canadian Dollars, the CDOR Rate.
SECTION 4.05. Sharing of Payments, Etc. If a Lender shall obtain payment
of any principal of or interest on any Loan made by it under this Agreement, on
any Reimbursement Obligation or on any other Obligation then due to such Lender
hereunder, through the exercise of any right of set-off (including, any right of
setoff or Lien granted under Section 9.02), banker's Lien, counterclaim or
similar right, or otherwise (other than a setoff
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right in connection with any credit extended by such Lender outside this
Agreement)), it shall promptly purchase from the other Lenders participations in
the Loans made, or Reimbursement Obligations or other Obligations held, by the
other Lenders in such amounts, and make such other adjustments from time to time
as shall be equitable to the end that all the Lenders shall share the benefit of
such payment (net of any expenses which may be incurred by such Lender in
obtaining or preserving such benefit) pro rata in accordance with the unpaid
Obligations then due to each of them. To such end all the Lenders shall make
appropriate adjustments among themselves (by the resale of participations sold
or otherwise) if such payment is rescinded or must otherwise be restored. Each
Borrower agrees, to the fullest extent it may effectively do so under applicable
law, that any Lender so purchasing a participation in the Loans made, or
Reimbursement Obligations or other Obligations held, by other Lenders may
exercise all rights of set-off, bankers' Lien, counterclaim or similar rights
with respect to such participation as fully as if such Lender were a direct
holder of Loans, Reimbursement Obligations or other Obligations in the amount of
such participation. Nothing contained herein shall require any Lender to
exercise any such right or shall affect the right of any Lender to exercise, and
retain the benefits of exercising, any such right with respect to any other
indebtedness or obligation of either Borrower.
ARTICLE V
CONDITIONS PRECEDENT
SECTION 5.01. Conditions Precedent to the Initial Credit Event. The
obligation of each Lender to make its initial Loan or to accept and purchase any
Bankers' Acceptance or either Issuer to issue the initial Letter of Credit is
subject to the following conditions:
(a) The Agents shall have received the following:
(i) this Agreement executed by each party hereto;
(ii) the appropriate Note or Notes of each Borrower for each Lender,
duly completed and executed and dated the Execution Date;
(iii) the U.S. Borrower Pledge Agreement executed by the U.S. Borrower
dated as of the Execution Date;
(iv) the Subsidiary Guarantors Pledge Agreements executed by the
respective Subsidiary Guarantors party thereto dated as of the Execution
Date;
(v) a certificate of a Responsible Officer and of the secretary or an
assistant secretary of each Obligor or of its (managing) general partner or
managing member, as the case may be, dated the date of the initial Credit
Event and certifying, inter alia, (A) true and complete copies of the
bylaws, as amended and in effect, of such Person
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and the resolutions adopted by the Board of Directors of such Person (1)
authorizing the execution, delivery and performance by such Person of this
Agreement and the other Loan Documents to which it is or will be a party
and, in the case of each Borrower, the Loans to be made and the Letters of
Credit to be issued hereunder and, in the case of the Canadian Borrower, the
sale of the Bankers' Acceptances to be accepted and purchased hereunder, (2)
approving the forms of the Loan Documents to which it is a party and which
will be delivered at or prior to the date of the initial Credit Event and
(3) authorizing officers of such Person or of its (managing) general partner
or managing member, as the case may be, to execute and deliver the Loan
Documents to which it is or will be a party and any related documents,
including, any agreement contemplated by this Agreement, (B) the incumbency
and specimen signatures of the officers of such Person or of its (managing)
general partner or managing member, as the case may be, executing any
documents on its behalf and (C) (1) that the representations and warranties
made by such Obligor in any Loan Document to which such Person is a party
and which will be delivered at or prior to the date of the initial Credit
Event are true and correct in all material respects, (2) the absence of any
proceedings for the dissolution or liquidation of such Person and (3) the
absence of the occurrence and continuance of any Default or Event of
Default;
(vi) a certificate of a vice president and of the secretary or an
assistant secretary of the Canadian Borrower, Taro Industries Limited and
BMW Monarch (Lloydminster) Ltd. dated the date of the initial Credit Event
and certifying, inter alia, (A) true and complete copies of the resolutions
adopted by the Board of Directors of such Person authorizing the pledge of
such Person's Capital Stock to the U.S. Administrative Agent for the benefit
of the Secured Parties and approving the form of the Security Document
pursuant to which such Capital Stock is to be pledged and (B) the incumbency
and specimen signatures of the officers of such Person executing such
certificate;
(vii) favorable, signed opinions addressed to the Agents and the Lenders
dated the date of the initial Credit Event from (A) Fulbright & Jaworski
L.L.P., counsel to the Obligors, (B) Milner Fenerty, special Canadian
counsel to the Obligors, (C) Serra de Oliveira, Barroso e Pose, special
Brazilian counsel to the Obligors, and (D) Basurto, Santillana y Arguijo,
S.C., special Mexican counsel to the Obligors, each given upon the express
instruction of the Obligors;
(viii) letters from CT Corporation System, Inc. in form and substance
satisfactory to the Agents and the Lenders evidencing the obligation of CT
Corporation System, Inc. to accept service of process in the State of Texas
on behalf of each Obligor that is not authorized to do business as a foreign
corporation in the State of Texas; and
(ix) copies of the articles or certificates of incorporation or other
similar organizational documents of each Obligor certified as of a recent
date by the appropriate Governmental Authority (except that any such
documents of the Canadian Borrower may
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be notarized rather than certified by such Governmental Authority) and
certificates of appropriate public officials as to the existence, good
standing and qualification to do business as a foreign corporation or other
foreign entity, as applicable, of each Obligor in each jurisdiction in which
the ownership of its properties or the conduct of its business requires such
qualification and where the failure to so qualify would, individually or
collectively, have a Material Adverse Effect.
(b) The U.S. Administrative Agent shall have received all of the shares
of Capital Stock of each Subsidiary described on Schedule I to the U.S. Borrower
Pledge Agreement and each of the Subsidiary Guarantors Pledge Agreements
together with related stock powers executed in blank by the U.S. Borrower or the
appropriate Subsidiary Guarantor.
(c) The Agents shall have received evidence satisfactory to them that
all material consents of each Governmental Authority and of each other Person,
if any, reasonably required in connection with (a) the Loans, the Letters of
Credit and the Bankers' Acceptances and (b) the execution, delivery and
performance of this Agreement and the other Loan Documents have been
satisfactorily obtained.
(d) The Agents shall be satisfied that coincident with the initial
Credit Event (a) the U.S. Borrower shall have terminated, and paid in full all
indebtedness outstanding under, that certain Amended and Restated Credit
Agreement dated as of December 6, 1996, as amended (the "Existing Chase Credit
Agreement"), among the U.S. Borrower, the Subsidiary Guarantors and the Lenders
named therein and The Chase Manhattan Bank, as agent and (b) that the Canadian
Borrower shall have terminated and paid in full all indebtedness outstanding
under, that certain Extendible Revolving Term Loan Agreement dated August 29,
1997, among the Canadian Borrower, the Canadian Agent, as agent, and the lenders
named therein.
(e) Uniform Commercial Code financing statements, or proper notices,
statements or other instruments in respect thereof, shall be in a form and
completed to permit them to be duly recorded, published, registered and filed in
all such places as is required by applicable law to grant to the U.S. Agent a
first priority security interest in the Collateral, subject only to Permitted
Liens.
(f) The Agents shall be satisfied with the terms and provisions of the
Debenture Indenture.
(g) The U.S. Borrower shall have paid (i) to the Agents and the Lenders,
as applicable, all fees and expenses agreed upon by such parties to be paid on
or prior to the Execution Date, and (ii) to Andrews & Kurth L.L.P. pursuant to
Section 13.03 all fees and disbursements invoiced by said firm to the U.S.
Borrower on or prior to the date of the initial Credit Event.
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SECTION 5.02. Conditions Precedent to All Credit Events. The obligation
of the Lenders to make any Loan or to accept and purchase any Bankers'
Acceptance or either Issuer to issue or extend any Letter of Credit (including
any Loan made, Letter of Credit issued or Bankers' Acceptance accepted and
purchased on the date of the initial Credit Event) is subject to the further
conditions precedent that on the date of such Credit Event:
(a) The conditions precedent set forth in Section 5.01 shall have
theretofore been satisfied.
(b) The representations and warranties set forth in Article VI and in
the other Loan Documents shall be true and correct in all material respects as
of, and as if such representations and warranties were made on, the date of the
proposed Loan, Letter of Credit or Bankers' Acceptance, as the case may be
(unless such representation and warranty expressly relates to an earlier date),
and the Obligors shall be deemed to have certified to the Agents and the Lenders
that such representations and warranties are true and correct in all material
respects by either Borrower's delivery of a Request for Extension of Credit or
the Canadian Borrower's delivery of a Bankers' Acceptance Notice, as the case
may be.
(c) The applicable Agent shall have received the following, all of which
shall be duly executed: (i) a Request for Extension of Credit as to the Loan,
Letter of Credit or Bankers' Acceptance, as the case may be, by the time and on
the Business Day specified under Section 4.03 and (ii) in the case of a Letter
of Credit, an Application.
(d) No Default or Event of Default shall have occurred and be continuing
or would result from such Credit Event.
(e) The Agents and the Lenders shall have received such other approvals,
opinions or documents as either Agent or the Majority Lenders may reasonably
request.
The acceptance of the benefits of each Credit Event shall constitute a
representation and warranty by each of the Obligors to each of the Lenders that
all of the conditions specified in this Section 5.02 above exist as of that
time.
SECTION 5.03. Delivery of Documents. All of the Notes, certificates,
legal opinions and other documents and papers referred to in this Article V,
unless otherwise specified, shall be delivered to the Agents for the account of
each of the Lenders and, except for the Notes, in sufficient counterparts or
copies for each of the Lenders and shall be satisfactory in form and substance
to the Agents.
ARTICLE VI
REPRESENTATIONS AND WARRANTIES
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To induce the Lenders to enter into this Agreement and to make the Loans
and issue or participate in the Letters of Credit and accept and purchase
Bankers' Acceptances, each Obligor represents and warrants as to itself and the
U.S. Borrower represents and warrants as to itself and the other Obligors (such
representations and warranties to survive any investigation and the making of
the Loans and the issuance of any Letters of Credit and the acceptance and
purchase of any Bankers' Acceptances) to the Lenders and the Agents as follows:
SECTION 6.01. Organization and Qualification. The U.S. Borrower and each
domestic Subsidiary and each Material Foreign Subsidiary (a) is a corporation or
partnership duly organized, validly existing and in good standing under the laws
of the jurisdiction of its incorporation or organization, (b) has the corporate,
partnership or other power and authority to own its property and to carry on its
business as now conducted and (c) is duly qualified as a foreign corporation to
do business and is in good standing in every jurisdiction in which the failure
to be so qualified would, individually or together with all such other failures
of the Obligors and their Subsidiaries, have a Material Adverse Effect. As of
the Execution Date, the corporations and other entities named in Schedule 6.01
are all of the Subsidiaries of the U.S. Borrower, such Schedule (x) accurately
reflects (i) the direct owner of the Capital Stock of each such Subsidiary and
(ii) the percentage of the issued and outstanding Capital Stock of each such
Subsidiary owned by each Obligor, (y) accurately identifies such Subsidiaries,
each Material Domestic Subsidiary and each Material Foreign Subsidiary, and (z)
accurately sets forth the jurisdictions of their respective incorporation or
organization and jurisdictions in which they are required to be qualified as
foreign corporations, foreign partnerships or other foreign entities to do
business.
SECTION 6.02. Authorization, Validity, Etc. Each Obligor has the
corporate, partnership or other power and authority to execute, deliver and
perform its obligations hereunder and under the other Loan Documents to which it
is a party and, in the case of each Borrower, to obtain the Loans, the issuance
of Letters of Credit and the acceptance and purchase of Bankers' Acceptances
hereunder, and all such action has been duly authorized by all necessary
corporate, partnership or other proceedings on its part or on its behalf. This
Agreement and the Security Documents have been duly and validly executed and
delivered by or on behalf of each Obligor party thereto and constitute valid and
legally binding agreements of such Obligor enforceable against such Obligor in
accordance with the respective terms thereof, and the Notes and the other Loan
Documents to which such Obligor is a party, when duly executed and delivered by
or on behalf of such Obligor, will constitute valid and legally binding
obligations of such Obligor enforceable in accordance with the respective terms
thereof and of this Agreement, except, in each case, (a) as such enforceability
may be limited by bankruptcy, insolvency, reorganization, moratorium, fraudulent
transfer or other similar laws relating to or affecting the enforcement of
creditors' rights generally, and by general principles of equity which may limit
the right to obtain equitable remedies (regardless of whether such
enforceability is a proceeding in equity or at law) and (b) as to the
enforceability of provisions for indemnification for violation of applicable
securities laws, limitations thereon arising as a matter of law or public
policy.
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SECTION 6.03. Governmental Consents, Etc. No authorization, consent,
approval, license or exemption of or filing or registration with any
Governmental Authority, is necessary for the valid execution, delivery or
performance by any Obligor of any Loan Document to which it is a party, except
those that have been obtained and such matters relating to performance as would
ordinarily be done in the ordinary course of business after the Execution Date.
SECTION 6.04. Conflicting or Adverse Agreements or Restrictions. Neither
the U.S. Borrower nor any of the Subsidiaries is a party to any contract or
agreement or subject to any restriction that would reasonably be expected to
have a Material Adverse Effect. Neither the execution, delivery and performance
by any Obligor of the Loan Documents to which it is a party, nor compliance with
the terms and provisions thereof, nor the extensions of credit contemplated by
the Loan Documents, (a) will breach or violate any applicable Requirement of
Law, (b) will result in any breach or violation of, any of the terms, covenants,
conditions or provisions of, or constitute a default under, or result in the
creation or imposition of (or the obligation to create or impose) any Lien upon
any of its property or assets pursuant to the terms of any indenture, mortgage,
deed of trust, agreement or other instrument to which it or any of its
Subsidiaries is party or by which any property or asset of it or any of its
Subsidiaries is bound or to which it is subject, except for breaches, violations
and defaults under clauses (a) and (b) that collectively for all Obligors will
not have a Material Adverse Effect or (c) will violate any provision of the
organic documents of any Obligor.
SECTION 6.05. Title to Assets. Without limiting the representations as
to the Collateral contained in the Security Documents, the U.S. Borrower and
each Subsidiary has good and indefeasible title to its assets, subject to no
Liens, except Permitted Liens and immaterial Liens.
SECTION 6.06. Litigation. There are no actions, suits or proceedings
pending for which service of process has been accomplished or, to the best
knowledge of any Obligor, threatened with respect to any Obligor, the Loan
Documents or any transactions contemplated therein that are reasonably likely to
have (individually or collectively) a Material Adverse Effect.
SECTION 6.07. Information Memorandum; Financial Statements. The
Information Memorandum, as affected by the disclosures made herein, in the other
Loan Documents and in the filings made by the U.S. Borrower with the Securities
and Exchange Commission pursuant to the Exchange Act, did not as of the date
thereof and will not (in the case of the Information Memorandum) as of the date
of the initial Credit Event hereunder, when read together and taken as a whole,
contain any untrue statement of a material fact or omit to state a material fact
necessary in order to make the statements contained therein not misleading in
any material respect. Since December 31, 1996 there has been no material adverse
change in the financial condition, business or operations of the U.S. Borrower
and the Subsidiaries taken
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as a whole, except as described in the documents and filings referred to in
the preceding sentence.
SECTION 6.08. Default. Except for defaults or violations which,
individually or together with all other defaults and violations by the U.S.
Borrower and the Subsidiaries, would not reasonably be expected to have a
Material Adverse Effect, neither the U.S. Borrower nor any Subsidiary is in
default in any respect under the provisions of any instrument evidencing any
Indebtedness or of any agreement relating thereto, or in default in any respect
under or in violation of any Requirement of Law.
SECTION 6.09. Investment Company Act. Neither the U.S. Borrower nor any of
the Subsidiaries is, or is regulated as an "investment company," as such term is
defined in the Investment Company Act of 1940, as amended.
SECTION 6.10. Public Utility Holding Company Act. Neither the U.S. Borrower
nor any of the Subsidiaries is a non-exempt "holding company," or subject to
regulation as such, or, to the knowledge of any Obligor's officers, an
"affiliate" of a "holding company" or a "subsidiary company" of a "holding
company," within the meaning of the Public Utility Holding Company Act of 1935,
as amended.
SECTION 6.11. ERISA. (a) The U.S. Borrower, and each ERISA Affiliate has
operated and administered each Plan and Multiemployer Plan in compliance with
all applicable laws except for such instances of noncompliance as have not
resulted in and would not reasonably be expected to have a Material Adverse
Effect. Neither the U.S. Borrower nor any ERISA Affiliate has incurred any
liability pursuant to Title I or IV of ERISA or the penalty or excise tax
provisions of the Code relating to employee benefit plans (as defined in Section
3 of ERISA), and no event, transaction or condition has occurred or exists that
would reasonably be expected to result in the incurrence of any such liability
by the U.S. Borrower or any ERISA Affiliate, or in the imposition of any Lien on
any of the rights, properties or assets of the U.S. Borrower or any ERISA
Affiliate, in either case pursuant to Title I or IV of ERISA or to such penalty
or excise tax provisions or to Section 401(a)(29) or 412 of the Code, other than
such liabilities or Liens as would not individually or in the aggregate
reasonably be expected to have a Material Adverse Effect.
(b) No accumulated funding deficiency (as defined in Section 412 of
the Code or Section 302 of ERISA) in excess of $6,000,000, whether or not
waived, exists or is expected to be incurred with respect to any Plan.
(c) The U.S. Borrower and its ERISA Affiliates have not incurred
withdrawal liabilities (and are not subject to contingent withdrawal
liabilities) under section 4201 or 4204 of ERISA in respect of
Multiemployer Plans that individually or in the aggregate would reasonably
be expected to have a Material Adverse Effect.
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(d) The expected post-retirement benefit obligation (determined as of
the last day of the U.S. Borrower's most recently ended fiscal year in
accordance with Financial Accounting Standards Board Statement No. 106,
without regard to liabilities attributable to continuation coverage
mandated by section 4980B of the Code) of the U.S. Borrower and the
Subsidiaries would not reasonably be expected to have a Material Adverse
Effect.
(e) No such Multiemployer Plan is in "reorganization" or "insolvent,"
within the meaning of such terms as used in ERISA.
SECTION 6.12. Tax Returns and Payments. (a) The U.S. Borrower and its
Subsidiaries have caused to be filed all federal income tax returns and other
material tax returns, statements and reports (or obtained extensions with
respect thereto) which are required to be filed and have paid or deposited or
made adequate provision in accordance with GAAP for the payment of all taxes
(including estimated taxes shown on such returns, statements and reports) which
are shown to be due pursuant to such returns, except where the failure to pay
such taxes (individually or collectively for the U.S. Borrower and the
Subsidiaries) would not have a Material Adverse Effect. No material income tax
liability of the U.S. Borrower or the Subsidiaries has been asserted by the
Internal Revenue Service of the United States or any other Governmental
Authority for any taxes in excess of those already paid, except for taxes which
are being contested in good faith by appropriate proceedings and for which
adequate reserves in accordance with GAAP have been created on the books of the
U.S. Borrower and the Subsidiaries.
(b) The federal income tax liabilities, if any, of the U.S. Borrower
and the Subsidiaries have been finally determined by the Internal Revenue
Service and Revenue Canada, if applicable, and satisfied for all taxable
years through the fiscal year ending in 1992.
SECTION 6.13. Requirements of Law; Environmental Matters. (a) The U.S.
Borrower and each Subsidiary is in compliance with all Requirements of Law,
applicable statutes, regulations and orders of, and all applicable restrictions
imposed by, all Governmental Authorities in respect of the conduct of its
business and the ownership of its property, except for such noncompliances
which, individually or in the aggregate for the U.S. Borrower and all such
Subsidiaries, would not have a Material Adverse Effect.
(b) Without limitation of the foregoing, the U.S. Borrower and each
Subsidiary possesses all environmental, health and safety licenses,
permits, authorizations, registrations, approvals and similar rights
necessary under law or otherwise for the U.S. Borrower or such Subsidiary
to conduct its operations as now being conducted (other than those with
respect to which the failure to possess or maintain would not, individually
or in the aggregate for the U.S. Borrower and all such Subsidiaries, have a
Material Adverse Effect), and each of such licenses, permits,
authorizations, registrations, approvals and similar rights is valid and
subsisting, in full force and effect and enforceable by the U.S. Borrower
or such Subsidiary, and the U.S. Borrower and each Subsidiary is in
compliance with all terms, conditions or other provisions of
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such permits, authorizations, registrations, approvals and similar rights
except for such failure or noncompliance that, individually or in the
aggregate for the U.S. Borrower and all such Subsidiaries, would not have
a Material Adverse Effect. Except as disclosed on Schedule 6.13, neither
the U.S. Borrower nor any Subsidiary has received any notices of any
violation of, noncompliance with, or remedial obligation under,
Requirements of Environmental Laws, and there are no writs, injunctions,
decrees, orders or judgments outstanding, or lawsuits, claims,
proceedings, investigations or inquiries or, to the knowledge of any
Obligor, pending or threatened, relating to the ownership, use, condition,
maintenance or operation of, or conduct of business related to, any
property owned, leased or operated by the U.S. Borrower or any Subsidiary
or other assets of the U.S. Borrower or such Subsidiary, other than those
violations, instances of noncompliance, obligations, writs, injunctions,
decrees, orders, judgments, lawsuits, claims, proceedings, investigations
or inquiries that, individually or in the aggregate for all Obligors and
such Subsidiaries, would not have a Material Adverse Effect. Except as
disclosed on Schedule 6.13, there are no material obligations,
undertakings or liabilities arising out of or relating to Requirements of
Environmental Laws to which any Obligor or any of its Subsidiaries has
agreed, assumed or retained, or by which any Obligor or any of its
Subsidiaries is adversely affected, by contract or otherwise, which would
have a Material Adverse Effect. Except as disclosed on Schedule 6.13, no
Obligor nor any of its Subsidiaries has received a written notice or claim
to the effect that such Person is or may be liable to any other Person as
the result of a Release or threatened Release of a Hazardous Material,
which liability would have a Material Adverse Effect.
SECTION 6.14. Purpose of Loans. (a) All proceeds of the Loans and Bankers'
Acceptances will be used by a Borrower for the purposes set forth in Section
2.08.
(b) None of the proceeds of the Loans under the Existing Chase Credit
Agreement or this Agreement were or will be used directly or indirectly for
the purpose of buying or carrying any "margin stock" within the meaning of
Regulation G or Regulation U (herein called "margin stock") or for the
purpose of reducing or retiring any indebtedness (including the
indebtedness repaid with the proceeds of the loans made under the Existing
Chase Credit Agreement) which was originally incurred to buy or carry a
margin stock, or for any other purpose which might constitute this
transaction a "purpose" credit within the meaning of Regulation G or
Regulation U. Neither any Obligor nor any agent acting on its behalf has
taken or will take any action which might cause this Agreement or any other
Loan Document to violate Regulation G, T, U or X, or any other regulation
of the Board or to violate the Exchange Act. Margin stock did not on the
Execution Date, and does not constitute more than 25% of the assets of the
U.S. Borrower or any other Obligor.
SECTION 6.15. Franchises and Other Rights. The U.S. Borrower and each
Subsidiary has all franchises, permits, licenses and other authority
(collectively, the "Operating Rights") as are necessary to enable them to carry
on their respective businesses as now being conducted, except for Operating
Rights with respect to which the failure to have would not individually or in
the aggregate for all such failures by the U.S. Borrower and the Subsidiaries
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have a Material Adverse Effect. Neither the U.S. Borrower nor any Subsidiary is
in default under any of the Operating Rights which default, individually or
together with all such defaults of the U.S. Borrower and the Subsidiaries, would
have a Material Adverse Effect.
SECTION 6.16. No Intent to Hinder, Delay or Defraud. Each Subsidiary
Guarantor has entered into this Agreement, including the Subsidiary Guarantors
Guaranty and the other Loan Documents, with no intent to hinder, delay or
defraud any Person to whom such Subsidiary Guarantor was or becomes, on or after
the Execution Date, indebted, within the meaning of ss.548 of the Bankruptcy
Code.
SECTION 6.17. Designation of this Agreement and the Obligations. The
Indebtedness evidenced by this Agreement constitutes a refinancing of the
Existing Chase Credit Agreement. This Agreement constitutes the "principal bank
credit agreement" of the U.S. Borrower, and the Obligations hereunder and under
the other Loan Documents constitute "Designated Senior Indebtedness" as such
phrases are used in the Debenture Indenture.
ARTICLE VII
AFFIRMATIVE COVENANTS
Each Obligor covenants and agrees for itself, and the U.S. Borrower
covenants and agrees with respect to the Canadian Borrower and each of the other
Obligors, that prior to the termination of this Agreement it will duly and
faithfully perform, and cause its respective Subsidiaries to perform, each and
all of the following covenants:
SECTION 7.01. Information Covenants. The U.S. Borrower will furnish or
cause to be furnished to the Agents and each Lender:
(a) As soon as available, and in any event within 60 days after the
end of each of the first three quarterly accounting periods in each fiscal
year (i) the Form 10-Q of the U.S. Borrower and (ii) the consolidated
balance sheet of the U.S. Borrower and the Subsidiaries as at the end of
such fiscal quarter and the related consolidated unaudited statements of
income, retained earnings and cash flows for such fiscal quarter and for
the elapsed portion of the fiscal year ended with the last day of such
fiscal quarter, and setting forth, in each case, comparative consolidated
figures for the related periods and date in the prior fiscal year, all of
which shall be certified by the chief financial officer, chief executive
officer or controller of the U.S. Borrower subject to changes resulting
from normal year-end audit adjustments; provided, however, if the Form 10-Q
of the U.S. Borrower contains the consolidated balance sheet and
consolidated statements of income, retained earnings and cash flows, the
U.S. Borrower shall not be required to comply with clause (ii).
(b) As soon as available, and in any event within 120 days after the
close of each fiscal year, the Annual Report of the U.S. Borrower for such
fiscal year containing therein,
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the consolidated balance sheet of the U.S. Borrower and the Subsidiaries as
at the end of such fiscal year and the related consolidated statements of
income, retained earnings and cash flows for such fiscal year, setting
forth, in each case, comparative figures as of the end of and for the
preceding fiscal year and certified by Arthur Andersen LLP or other
independent certified public accountants of recognized national standing
reasonably acceptable to the Agents and the Majority Lenders, whose
certification shall be without Impermissible Qualification, together with a
certificate of such accounting firm stating that in the course of its
regular audit of the business of the U.S. Borrower, which audit was
conducted in accordance with generally accepted United States auditing
standards, such accounting firm has obtained no knowledge of any Default or
Event of Default which has occurred and is continuing or, if in the opinion
of such accounting firm such a Default or Event of Default has occurred and
is continuing, a statement as to the nature thereof, all of the foregoing
to be in form and substance reasonably satisfactory to the Majority
Lenders.
(c) As soon as available, and in any event within 60 days after the
end of each of the quarterly accounting periods in each fiscal year, the
consolidated balance sheet of the Canadian Borrower and its Subsidiaries as
at the end of such fiscal quarter and the related consolidated unaudited
statement of income, retained earnings and cash flows for such fiscal
quarter and for the elapsed portion of the fiscal year ended with the last
day of such fiscal quarter, and setting forth, in each case, comparative
consolidated figures for the related date and period in the prior fiscal
year, all of which shall be certified by the chief financial officer, chief
executive officer or controller of the Canadian Borrower.
(d) Promptly upon the mailing thereof to the shareholders of the U.S.
Borrower generally, copies of all financial statements, reports and proxy
statements so mailed.
(e) Promptly upon the filing thereof (or in the case of reports on
Form 8-K made in connection with business acquisitions or the disposition
of assets, not later than ten days after the end of each calendar month),
copies of all effective registration statements (other than registration
statements on Form S-8 and periodic amendments to shelf registration
statements) and annual, quarterly or current reports which the U.S.
Borrower shall have filed with the Securities and Exchange Commission.
(f) Promptly, and in any event within five Business Days after any
Responsible Officer of any Obligor obtains knowledge of
(i) any material violation of, noncompliance with, or remedial
obligations under, Requirements of Environmental Laws which would
reasonably be expected to have a Material Adverse Effect,
(ii) any material Release or threatened material Release of
Hazardous Materials that materially and adversely affects or is
reasonably expected so to affect any
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material property owned, leased or operated by the U.S. Borrower or
any Subsidiary, or
(iii) any event or condition which constitutes a Default or an
Event of Default,
a notice of such event or condition, specifying the nature and period of
existence thereof and specifying the notice given or action taken by such Person
and the nature of any such claimed default, event or condition and, in the case
of an Event of Default or Default, what action has been taken, is being taken or
is proposed to be taken with respect thereto.
(g) At the time of the delivery of the financial statements
provided for in Sections 7.01(a) and (b), (i) a certificate of the
chief financial officer or the controller of the U.S. Borrower in the
form of Exhibit 7.01(g) (the "Compliance Certificate") to the effect
that no Default or Event of Default exists or, if any Default or Event
of Default does exist, specifying the nature and extent thereof and
the action that is being taken or that is proposed to be taken with
respect thereto, which Compliance Certificate shall also set forth
calculations required to establish whether the U.S. Borrower and the
Subsidiaries were in compliance with the provisions of Article VIII as
at the end of such fiscal quarter or fiscal year, as the case may be
and (ii) a listing of the Material Domestic Subsidiaries and the
Material Foreign Subsidiaries at the end of such fiscal quarter or
fiscal year, as the case may be.
(h) At the time of the delivery of the financial statements
provided for in Section 7.01(c), a certificate of the chief financial
officer or controller of the Canadian Borrower to the effect that no
Default or Event of Default exists with respect to the Canadian
Borrower or, if any such Default or Event of Default does exist,
specifying the nature and extent there of and the action that is being
taken or that is proposed to be taken with respect thereto.
(i) Promptly, and in any event within five Business Days after
any Responsible Officer of any Obligor obtains knowledge thereof,
notice
(i) of any condition or event which, in the opinion of
management of such Obligor, would reasonably be expected to have
a Material Adverse Effect,
(ii) that any Person has given any notice to the U.S.
Borrower or any Subsidiary or taken any other action with respect
to a claimed default or event under any instrument or agreement
involving in excess of $5,000,000 and to which any of them is a
party,
(iii) of the institution of any litigation involving stated
claims against the U.S. Borrower or any Subsidiary equal to or
greater than $5,000,000 (net of any insurance that the U.S.
Borrower reasonably and in good faith believes effectively covers
such claim) with respect to any single cause of action or of any
adverse determination
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in any court proceeding in any litigation involving a potential
liability to the U.S. Borrower or any Subsidiary equal to or
greater than $5,000,000 (net of any insurance that the U.S.
Borrower reasonably and in good faith believes effectively covers
such liability) with respect to any single cause of action which
makes the likelihood of an adverse determination in such
litigation against the U.S. Borrower or such Subsidiary
substantially more probable, or
(iv) of the occurrence of any Change in Control or any Change
of Control Event.
(j) Promptly, and in any event within 30 days after any Responsible
Officer of any Obligor obtains knowledge thereof, notice:
(i) of the occurrence or expected occurrence of any Reportable
Event with respect to any Plan, a failure to make any required
contribution to a Plan, any Lien in favor of the PBGC or a Plan, or
any withdrawal from, or the termination, reorganization or insolvency
(within the meaning of such terms as used in ERISA) of any
Multiemployer Plan, or
(ii) of the institution of proceedings or the taking of any other
action by the PBGC or the U.S. Borrower or any ERISA Affiliate or any
Multiemployer Plan with respect to the withdrawal from, or the
terminating, reorganization or insolvency (within the meaning of such
terms as used in ERISA) of, any Plan, except that no notice shall be
required with respect to the merger of a defined contribution plan of
one ERISA Affiliate into a defined contribution plan of another ERISA
Affiliate.
(k) Not less than 15 days prior to the end of each fiscal year, an
annual business plan and budget for each of the U.S. Borrower and the
Subsidiaries, and the Canadian Borrower and its Subsidiaries, for the next
succeeding fiscal year containing, inter alia, pro forma financial
statements for the next fiscal year.
(l) From time to time and with reasonable promptness, such other
information or documents (financial or otherwise) with respect to the U.S.
Borrower or any Subsidiary as either Agent or any Lender through the
applicable Agent may reasonably request.
SECTION 7.02. Books, Records and Inspections. Each Obligor will permit, or
cause to be permitted, any Person designated by any Lender or Lenders in writing
to visit and inspect any of the properties of the U.S. Borrower and the
Subsidiaries, to examine the corporate books and financial records of the U.S.
Borrower and the Subsidiaries and make copies thereof or extracts therefrom and
to discuss the affairs, finances and accounts of any such corporations with the
officers and agents of the U.S. Borrower and the Subsidiaries and with their
independent public accountants, all at such reasonable times and as often as
either Agent or such Lender(s), through the applicable Agent, may reasonably
request.
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SECTION 7.03. Insurance and Maintenance of Properties. (a) The Obligors
will maintain or cause to be maintained, with financially sound and reputable
insurers, insurance with respect to its property and business against such
liabilities, casualties, risks and contingencies (including business
interruption insurance) and in such types and amounts as is customary in the
case of Persons engaged in the same or similar businesses and similarly
situated.
(b) The U.S. Borrower will, and will cause the Subsidiaries to, cause
all properties owned by the U.S. Borrower or any Subsidiary or used or held
for use in the conduct of the business of the U.S. Borrower or the business
of any such Subsidiary to be maintained and kept in good condition, repair
and working order and supplied with all necessary equipment and will cause
to be made all necessary repairs, renewals, replacements, betterments and
improvements thereof, all as in the judgment of the U.S. Borrower may be
necessary so that the business carried on in connection therewith may be
properly and advantageously conducted at all times; provided, however, that
nothing in this Section 7.03(b) shall prevent the U.S. Borrower from
discontinuing the maintenance of any of such properties if such
discontinuance is, in the judgment of the U.S. Borrower, desirable in the
conduct of its business or the business of any such Subsidiary and not
disadvantageous in any material respect to the Lenders.
SECTION 7.04. Payment of Taxes and other Claims. The U.S. Borrower will,
and will cause each of the Subsidiaries to, pay or discharge or cause to be paid
or discharged, before the same shall become delinquent, (a) all taxes,
assessments and governmental charges levied or imposed upon the U.S. Borrower or
such Subsidiary or upon the income, profits or property of the U.S. Borrower or
such Subsidiary and (b) all lawful claims for labor, materials and supplies
which, if unpaid, might by law become a Lien upon the property of the U.S.
Borrower or such Subsidiary; provided, however, that the U.S. Borrower and the
Subsidiaries shall not be required to pay or discharge or cause to be paid or
discharged any such tax, assessment, charge or claim (i) whose amount,
applicability or validity is being contested in good faith by appropriate
proceedings or (ii) that has not been reported, so long as the position taken by
such Obligor or such Subsidiary in not reporting same is based on "substantial
authority," as defined in Section 6662 of the Code or, in the case of taxes
other than U.S. federal income taxes, upon the reasonable judgment of such
Obligor after consultation with tax counsel and so long as, if any such item is
challenged, it is paid or the requirements of the preceding clause (i) are met
with respect thereto, but in either case only if it has maintained adequate
reserves with respect thereto in accordance with GAAP, or (iii) with respect to
foreign Subsidiaries, if such taxes, assessments, charges or levies are not
material to the financial condition or operation of such foreign Subsidiaries or
have not been levied by a bona fide Governmental Authority.
SECTION 7.05. Existence. Except as expressly permitted pursuant to Section
8.02, each Obligor will do all things necessary to preserve and keep in full
force and effect the corporate, partnership or other existence, rights and
franchises of such Obligor.
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SECTION 7.06. Compliance with Statutes, Etc. (a) The U.S. Borrower will and
will cause each Subsidiary to comply with each applicable Requirement of Law,
other than those Requirements of Law the failure to comply with which
(individually or collectively for the U.S. Borrower and the Subsidiaries) would
not have a Material Adverse Effect; provided, however, the U.S. Borrower and
each such Subsidiary shall have the right diligently to contest any Requirement
of Law; so long as (i) the contest is in good faith and by appropriate
proceedings and such reserve or other appropriate provision, if any, as shall be
required by GAAP shall have been made therefor, (ii) such contest shall operate
to suspend the collection of any disputed amount from such property and (iii)
such contest will not (A) subject any or any part of such property to loss,
forfeiture or sale or (B) have a Material Adverse Effect.
(b) Without limiting the foregoing, the U.S. Borrower will and will
cause each Subsidiary to comply in a timely fashion with, or operate
pursuant to valid waiver of the provisions of, all Requirements of
Environmental Laws, including any such laws or regulations relating to
contamination from any Hazardous Materials, except where noncompliance
would not have a Material Adverse Effect.
SECTION 7.07. ERISA Information and Compliance. Promptly furnish to Agents:
(a) immediately upon receipt, a copy of any notice of complete or partial
withdrawal liability under ERISA and any notice from the PBGC under ERISA of an
intent to terminate or appoint a trustee to administer any Plan, (b) if
requested by either Agent, promptly after the filing thereof with the United
States Secretary of Labor or the PBGC or the Internal Revenue Service or any
Governmental Authority having jurisdiction under Applicable Canadian Pension
Legislation, copies of each annual and other report with respect to each Plan or
any trust created thereunder, (c) immediately upon becoming aware of the
occurrence of any Reportable Event for which the disclosure requirements have
not been waived, or of any "prohibited transaction", as such term is defined in
Section 4975 of the Code, in connection with any Plan or any trust created
thereunder, a written notice signed by a Responsible Officer of the applicable
Borrower or the applicable ERISA Affiliate specifying the nature thereof, what
action the applicable Borrower or the applicable ERISA Affiliate is taking or
proposes to take with respect thereto, and, when known, any action taken by the
PBGC, the Internal Revenue Service, the Department of Labor or any other
applicable Governmental Authority with respect thereto, (d) promptly after the
filing or receiving thereof by either Borrower or any ERISA Affiliate, any
notice of the institution of any proceedings or other actions which may result
in the termination of any Plan, and (e) each request for waiver of the funding
standards or extension of the amortization periods required by ERISA or Section
412 of the Code or Applicable Canadian Pension Legislation promptly after the
request is submitted by Borrower or any ERISA Affiliate to the Secretary of the
Treasury, the Department of Labor, the Internal Revenue Service or any other
applicable Governmental Authority. To the extent required under applicable
statutory funding requirements, each Borrower will fund, or will cause the
applicable ERISA Affiliate to fund, all current service pension liabilities as
they are incurred under the provisions of all Plans from time to time in effect,
and comply with all applicable provisions of ERISA, in each case, except to the
extent that failure to do any or all of the foregoing would not reasonably be
expected to
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have a Material Adverse Effect. Each Borrower covenants that it shall and shall
cause each ERISA Affiliate to (i) make contributions to each Plan in a timely
manner and in an amount sufficient to comply with the contribution obligations
under such Plan and the minimum funding standards requirements of ERISA or
Applicable Canadian Pension Legislation; (ii) prepare and file in a timely
manner all notices and reports required under the terms of ERISA or Applicable
Canadian Pension Legislation including but not limited to annual reports; and
(iii) pay in a timely manner all required PBGC premiums, in each case, except to
the extent that failure to do any or all of the foregoing would not reasonably
be expected to have a Material Adverse Effect.
SECTION 7.08. End of Fiscal Years. Each Borrower shall cause each of its,
and its Subsidiaries' fiscal years to end on December 31 and with respect to
Subsidiaries acquired by such Borrower after the date hereof whose fiscal years
do not end on December 31 at the time of acquisition, will cause the same to be
changed to December 31 as promptly as possible thereafter.
SECTION 7.09. Performance of Loan Documents. (a) Each Obligor will duly and
punctually pay and perform its respective obligations under the Loan Documents
to which it is a party in accordance with, and without breach of, the terms of
each thereof.
(b) All covenants and other obligations contained in the Security
Documents shall be in addition to the covenants contained herein.
SECTION 7.10. Indemnification for Breach of Representations or Covenants.
The U.S. Borrower and the Canadian Borrower shall indemnify each Indemnitee and
hold each Indemnitee harmless from and against all losses, costs, expenses
(including reasonable attorneys' fees), obligations, damages, penalties,
disbursements and liabilities which such Indemnitee may actually incur as a
result of, in connection with or arising out of (a) the breach of any
representation or warranty of the Obligors contained herein or in the other Loan
Documents or (b) the nonfulfillment by any Obligor of, or its failure to
perform, any of its covenants or agreements contained in this Agreement or in
the other Loan Documents. The indemnity contained in this Section 7.10 shall
survive the termination of this Agreement.
SECTION 7.11. Capital Adequacy. If any Lender shall have determined that
the adoption after the Effective Date or effectiveness after the Effective Date
(whether or not previously announced) of any applicable law, rule, regulation or
treaty regarding capital adequacy, or any change therein after the Effective
Date, or any change in the interpretation or administration thereof after the
Effective Date by any Governmental Authority, central bank or comparable agency
charged with the interpretation or administration thereof, or compliance by any
Lender with any request or directive after the Effective Date regarding capital
adequacy (whether or not having the force of law) of any such Governmental
Authority, central bank or comparable agency has or would have the effect of
reducing the rate of return on such Lender's capital as a consequence of its
obligations hereunder, under the Letters of Credit, the Notes or
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other Obligations held by it to a level below that which such Lender could have
achieved but for such adoption, change or compliance (taking into consideration
such Lender's policies with respect to capital adequacy) by an amount deemed by
such Lender to be material, then from time to time, upon satisfaction of the
conditions precedent set forth in this Section, after demand by such Lender
(with a copy to the appropriate Agent) as provided below, pay (subject to
Section 13.18) to such Lender such additional amount or amounts as will
compensate such Lender for such reduction. The certificate of any Lender setting
forth such amount or amounts as shall be necessary to compensate it and the
basis thereof and reasons therefor shall be delivered as soon as practicable to
the U.S. Borrower or the Canadian Borrower, as the case may be, and shall be
presumed correct, absent manifest error. The U.S. Borrower or the Canadian
Borrower, as the case may be, shall pay the amount shown as due on any such
certificate within fifteen (15) Business Days after the delivery of such
certificate. In preparing such certificate, a Lender may employ such assumptions
and allocations of costs and expenses as it shall in good faith deem reasonable
and may use any reasonable averaging and attribution method.
SECTION 7.12. Subsidiaries. If the certificate delivered pursuant to
Section 5.01(g) indicates that any foreign Subsidiary has become a Material
Foreign Subsidiary, the U.S. Borrower shall deliver within 10 days of the
delivery such certificate (a) if such Capital Stock has not been delivered
pursuant to the Security Documents, certificates evidencing all of such
Subsidiary's Capital Stock owned by it or any other domestic Subsidiary (but not
in excess of 65% of the issued and outstanding Capital Stock of such Material
Foreign Subsidiary), (b) appropriate pledge agreements or amendments to any
previously executed Security Documents effectively pledging to the U.S.
Administrative Agent for the benefit of the Secured Parties the Capital Stock
referred to in the preceding clause (a), and (c) one or more opinions of counsel
to such Material Foreign Subsidiary, which opinions (i) shall be addressed to
the Agents and the Lenders, (ii) shall collectively opine: (A) that such
Material Foreign Subsidiary is a corporation (or other entity) duly organized or
formed, validly existing and in good standing under the laws of the jurisdiction
of its organization or formation; (B) as to the enforceability of such pledge
agreement or such amendment; (C) that such Material Foreign Subsidiary has all
requisite power and authority to carry on the business in which it is then
engaged; (D) that all of the outstanding Capital Stock of such Material Foreign
Subsidiary is duly authorized, fully paid and non-assessable and all of such
Capital Stock subjected to the Lien of such pledge agreement or the Security
Document to which such amendment relates is owned of record by the U.S. Borrower
and/or one of the domestic Subsidiaries; and (E) as to the necessary actions, if
any, to be taken under the laws of the jurisdiction of its organization or
formation to perfect the Lien upon the Capital Stock of such Material Foreign
Subsidiary granted to the U.S. Administrative Agent for the benefit of the
Secured Parties in the applicable pledge agreement or Security Document as
amended, and (iii) shall otherwise be in form and substance reasonably
satisfactory to the Agents.
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ARTICLE VIII
NEGATIVE COVENANTS
The U.S. Borrower and the Canadian Borrower each covenants and agrees with
the Agents and the Lenders that prior to the termination of this Agreement it
will duly and faithfully perform, and cause its respective Subsidiaries to
perform, each and all of the following covenants:
SECTION 8.01. Material Change in Business. Neither the U.S. Borrower and
the Subsidiaries nor the Canadian Borrower and its Subsidiaries, in each case,
taken as a whole, shall engage principally in any business other than one or
more Lines of Business.
SECTION 8.02. Consolidation, Merger, Sale or Purchase of Assets, Etc. The
Borrowers will not, and will not permit any of their respective Subsidiaries to,
wind up, liquidate or dissolve its affairs, or effect any merger or
consolidation, sell, lease or otherwise dispose of all or any part of its
property or assets (other than sales of inventory in the ordinary course of
business), or purchase, lease or otherwise acquire (in one or a series of
related transactions) all or any part of the property or assets or all or any
part of the Capital Stock of any Person, or (unless such agreement shall
expressly condition consummation by the relevant Borrower or Subsidiary of the
transactions contemplated thereby upon receipt of the prior written consent of
the Majority Lenders) agree to do any of the foregoing at any future time,
except that this Section 8.02 shall not prohibit any of the following
transactions, or any agreement to effect the same:
(a) (i) the purchase, lease or sale of inventory, (ii) the lease
pursuant to Capital Leases of tangible personal property or (iii) the
acquisition of facilities, equipment and other assets, in each case, by
either Borrower or any Subsidiary in the ordinary course of business;
(b) if, at the time thereof and immediately after giving effect
thereto, no Event of Default or Default shall have occurred and be
continuing (i) the merger of any domestic Wholly-Owned Subsidiary into the
U.S. Borrower in a transaction in which the U.S. Borrower is the surviving
Person, or the merger or consolidation of any domestic Wholly-Owned
Subsidiary with and into any other domestic Wholly-Owned Subsidiary, in
each case in a transaction in which no Person other than the U.S. Borrower
or a Wholly-Owned Subsidiary receives any consideration; (ii) the merger or
consolidation of any foreign Wholly-Owned Subsidiary with and into a
domestic Wholly-Owned Subsidiary or any other foreign Wholly-Owned
Subsidiary, in each case in a transaction in which no Person other than the
U.S. Borrower or a Wholly-Owned Subsidiary receives any consideration,
provided that in any such merger or consolidation involving the Canadian
Borrower, the Canadian Borrower is the surviving Person; and (iii) the
merger of any other Person with and into the U.S. Borrower, the Canadian
Borrower or a Subsidiary if the U.S. Borrower, the Canadian Borrower or a
Wholly-Owned Subsidiary is the surviving entity and the U.S. Borrower and
the Subsidiaries shall be in compliance, on a pro forma basis after giving
effect to such transaction, with the
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covenants contained in this Article VIII recomputed as of the last day of
the most recently ended fiscal quarter of the U.S. Borrower and the
Subsidiaries as if such transaction had occurred on the first day of each
relevant period for testing such compliance, and the U.S. Borrower shall
have delivered to the Agents an officer's certificate to such effect,
together with all relevant financial information and calculations
demonstrating such compliance;
(c) Investments permitted by Section 8.06;
(d) sales, leases or other dispositions of assets by the U.S. Borrower
or the Subsidiaries determined by the Board of Directors of the U.S.
Borrower to be no longer useful, necessary or desirable in the operation of
the business of the U.S. Borrower or the Subsidiaries; provided, unless the
consideration received for such sale, lease or other disposition has a
value in excess of $12,000,000, the determination by the Board of Directors
of the U.S. Borrower shall not be required;
(e) so long as at the time thereof and immediately after giving effect
thereto no Default or Event of Default shall have occurred and be
continuing:
(i) a domestic Subsidiary may transfer property and assets to the
U.S. Borrower or to any domestic Wholly-Owned Subsidiary;
(ii) a foreign Subsidiary may transfer property and assets to the
U.S. Borrower or to any Wholly-Owned Subsidiary;
(iii) the U.S. Borrower may transfer property or assets to any
domestic Wholly-Owned Subsidiary; and
(iv) any domestic Wholly-Owned Subsidiary, or the U.S. Borrower,
may transfer assets or property to any foreign Wholly-Owned
Subsidiary, provided that (A) such transfers shall be made for
consideration of not less than the book value of the property or
assets so transferred, (B) licenses of technology by and among the
U.S. Borrower and the Subsidiaries shall not be subject to any other
limitations contained in this Agreement, and (C) in addition to and
without limitation of the foregoing, the U.S. Borrower and the
domestic Subsidiaries shall be permitted to transfer assets or
property to any one or more foreign Wholly-Owned Subsidiaries,
provided that the aggregate book value of all such assets or property
transferred pursuant to this clause (C) during any fiscal year of the
U.S. Borrower does not exceed $12,000,000;
(f) the U.S. Borrower or any Subsidiary may acquire all or
substantially all of the assets of, or all the Capital Stock in, a Person
or division or line of business of a Person if, at the time thereof and
immediately after giving effect thereto (each such acquisition being a
"Permitted Business Acquisition"):
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(i) no Event of Default or Default shall have occurred and be
continuing or would result therefrom;
(ii) all the Capital Stock of any acquired or newly-formed
corporation, partnership, limited liability company, association or
other business entity (a "New Subsidiary") is owned directly by the
U.S. Borrower or one or more Wholly-Owned Subsidiaries and (unless it
is a foreign Subsidiary) shall have executed a Subsidiary Guarantor
Counterpart in the form of Exhibit 8.02 (a "Subsidiary Guarantor
Counterpart") guaranteeing the Obligations;
(iii) the U.S. Borrower and the Subsidiaries shall be in
compliance, on a pro forma basis, after giving effect to such
acquisition or formation, with the covenants contained in this Article
VIII, recomputed as at the last day of the most recently ended fiscal
quarter of the U.S. Borrower and the Subsidiaries as if such
acquisition had occurred on the first day of each relevant period for
testing such compliance, and the U.S. Borrower shall have delivered to
the Agents and the Lenders a certificate of a Responsible Officer to
such effect, together with all relevant financial information of such
New Subsidiary or assets and calculations demonstrating such
compliance;
(iv) any New Subsidiary shall not be liable for any Indebtedness
(except for Indebtedness permitted by Section 8.04);
(v) the Majority Lenders shall have given their prior written
consent (which consent shall not be unreasonably withheld, taking into
consideration the merits of the acquisition) in the case of any
acquisition involving consideration (whether cash or property (other
than Qualified Capital Stock of the U.S. Borrower), as valued at the
time each investment is made) in excess of $75,000,000;
(vi) if such New Subsidiary is a Material Foreign Subsidiary, the
U.S. Administrative Agent for the benefit of the Canadian Agent and
the Lenders shall have a valid and perfected first priority security
interest in all of the Capital Stock of such New Subsidiary owned by
the U.S. Borrower and/or one or more domestic Subsidiaries (but not
more than 65% of the issued and outstanding Capital Stock of such
Material Foreign Subsidiary unless subsequent to the date of this
Agreement changes are made to Section 956 of the Code, or equivalent
provisions then in effect, such that any pledge of 662/3% or more of
the Capital Stock is no longer deemed to constitute "United States
Property" (as defined in such Section of the Code) held by such
Material Foreign Subsidiary, in which event all additional Capital
Stock shall be pledged up to but not exceeding an amount that would
constitute such "United States Property"); and
(vii) if such New Subsidiary is a Material Foreign Subsidiary or
a domestic Subsidiary, the Agents shall have received (A) such
opinions of counsel to such New Subsidiary as the Agents and the
Lenders may reasonably request as to the
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organization and good standing of such New Subsidiary, (if such New
Subsidiary is a domestic Subsidiary) the enforceability of this
Agreement and the Subsidiary Guarantor Counterpart, the creation and
perfection of the Liens referred to in clause (vi) above and such
other matters as the Agents and the Lenders may reasonably require and
(B) such other agreements, certificates, financing statements,
approvals, reports, consents, waivers, estoppels, stock powers,
filings and other documentation as the Agents and the Majority Lenders
may reasonably request.
The U.S. Borrower shall pay all reasonable costs and expenses (including
the reasonable legal expenses and out-of-pocket expenses) incurred by the Agents
and the Lenders in connection with the satisfaction of the requirements set
forth in Section 8.02(f).
SECTION 8.03. Liens. The Borrower will not, and will not permit any of
their respective Subsidiaries to, create, incur, assume or suffer to exist any
Lien upon or with respect to any property or assets of any kind (real or
personal, tangible or intangible) of either Borrower or any such Subsidiary
whether now owned or hereafter acquired, except Permitted Liens.
SECTION 8.04. Indebtedness. (a) The Borrowers will not create, incur or
assume, or permit any of their respective Subsidiaries to create, incur or
assume any Indebtedness, unless (i) on the date such Indebtedness is created,
incurred or assumed, and giving effect to the concurrent repayment of any other
Indebtedness no Default or Event of Default would exist, and (ii) in the case of
Indebtedness of the U.S. Borrower or the Canadian Borrower to any Subsidiary,
such Indebtedness shall be (A) evidenced by a note, and (B) subordinated in
right of payment to the Obligations of the U.S. Borrower or the Canadian
Borrower, as the case may be, hereunder on terms (including final maturity,
Average Life and amortization, as well as relative rank) satisfactory to the
Majority Lenders. For purposes of clause (i) of the next preceding sentence,
covenant compliance shall be determined on a pro forma basis, with the covenants
contained in this Article VIII recomputed as of the last day of the most
recently ended fiscal quarter of the U.S. Borrower and the Subsidiaries as if
the transaction in question had occurred on the first day of each relevant
period for testing such compliance, and the U.S. Borrower shall deliver to the
Agents an officer's certificate to such effect, together with all relevant
financial information and calculations demonstrating such compliance.
(b) Notwithstanding Section 8.04(a), the aggregate principal amount of
all Indebtedness of all foreign Subsidiaries (other than the Canadian
Borrower) at any time outstanding to any Person other than the U. S.
Borrower and the Subsidiaries shall not exceed 5% of Tangible Net Worth at
such time.
(c) Notwithstanding the foregoing subordination requirement, so long
as an Event of Default shall not have occurred and be continuing, the U.S.
Borrower and any Subsidiary (including the Canadian Borrower) may repay or
prepay any Indebtedness, or any other indebtedness, obligation, charge,
expense, overhead allocation, fee, royalty, obligation or
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liability, owed by any such Person to any of the U.S. Borrower or any
Subsidiary of the U.S. Borrower (including the Canadian Borrower or any
Subsidiary thereof).
SECTION 8.05. Stock Issuance. The U.S. Borrower will not issue any
Disqualified Stock.
SECTION 8.06. Investments. The Borrowers will not, and will not permit any
of their respective Subsidiaries to, directly or indirectly, make or own any
Investment in any Person, except:
(a) Investments owned by them on the date hereof as set forth on
Schedule 8.06, including the Investments in their respective Subsidiaries,
partnerships and other Persons owned on the Execution Date;
(b) Investments permitted to be made under Section 8.02 or Section
8.04;
(c) the endorsement of negotiable instruments for collection in the
ordinary course of business; and
(d) so long as no Default or Event of Default shall have occurred and
be continuing or would result therefrom, Investments in any Person to the
extent the consideration paid consists of Qualified Stock of the U.S.
Borrower;
(e) the acquisition of the Capital Stock or securities of a
Wholly-Owned Subsidiary;
(f) Investments in repurchase obligations with a term of not more than
one Business Day for securities with maturities of one year or less from
the date of issue or fully guaranteed or insured by the United States
Government or any agency thereof.
(g) investments in certificates of deposit maturing within one year
from the date of issuance thereof, issued by a bank or trust company (i)
organized under the laws of the United States or any state thereof or the
laws of Canada, having capital, surplus and undivided profits aggregating
at least $200,000,000 and whose long-term certificates of deposit are, at
the time of acquisition thereof by the U.S. Borrower or any of the
Restricted Subsidiaries, rated A-1 by S&P or P-1 by Moody's or (ii)
organized under the laws of any jurisdiction other than the United States
or any state thereof or the laws of Canada, provided that such foreign bank
shall be one of the three most reputable, creditworthy banks in such
country;
(h) deposit accounts (i) in a bank or trust company organized under
the laws of the United States or any state thereof or Canada, having
capital surplus and undivided profits aggregating at least $200,000,000 and
whose commercial paper (or that of the holding company with which such bank
or trust company is affiliated) is rated A-1 by S&P or P-1 by Moody's,
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(ii) in banks outside of the United States or Canada, in currencies other
than U.S. dollars, which banks provide working capital, operating accounts
or similar services to one or more Subsidiaries at such foreign banks,
provided that such foreign bank shall be one of the three most reputable,
creditworthy banks in such country and (iii) in a bank organized under the
laws of the United States or any state thereof or Canada not included in
the descriptions in clause (i) or (ii) above, so long as the aggregate
amount on deposit in all such banks by the U.S. Borrower and the
Subsidiaries does not exceed $12,000,000;
(i) receivables arising from the sale of goods and services in the
ordinary course of business of the U.S. Borrower and the Subsidiaries;
(j) investments in eurodollars not in excess of $12,000,000 in the
aggregate at any one time outstanding, issued by any bank or trust company
having capital, surplus and undivided profits aggregating at least
$200,000,000 and whose long term certificates of deposit are, at the time
of acquisition thereof by the U.S. Borrower or any Subsidiary, rated A-1 by
S&P or P-1 by Moody's;
(k) marketable direct obligations issued or unconditionally guaranteed
by the United States or Canadian government or issued by any agency thereof
and backed by the full faith and credit of the United States or Canada, as
the case may be, in each case maturing no later than one year from the date
of acquisition;
(l) the acquisition or ownership of Capital Stock or obligations or
securities received in settlement of debts (created in the ordinary course
of business) owing to the U.S. Borrower or any Subsidiary;
(m) money market, mutual or similar funds that invest in obligations
referred to in Section 8.06(g) or (h), in each case having assets in excess
of $500,000,000;
(n) Derivatives Obligations entered into in the ordinary course of
business and not for the purpose of speculation the effect of each of which
is to hedge or limit the risk of the U.S. Borrower or any Subsidiary
arising from exchange rate or commodity price fluctuations on investments
in the currency or commodity position hedged;
(o) investments and common stock of publicly held companies not
exceeding $50,000 at any one time outstanding;
(p) investments by the U.S. Borrower or any Wholly-Owned Subsidiary in
any Person which, immediately after the making of such Investment, is a
Wholly-Owned Subsidiary;
(q) overnight or other short term (less than 90 days duration)
Investments outside of the United States of America and Canada of a local
Subsidiary's excess local currency balances in debt instruments having one
of the two highest local debt ratings, as determined by
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the U.S. Borrower in its business judgment, provided that the total amount
of all such Investments does not exceed $12,000,000 at any one time
outstanding;
(r) loans and other extensions of credit to officers, directors and
employees of the U.S. Borrower and the Subsidiaries for travel,
entertainment and moving and other relocation expenses made in direct
furtherance and in the ordinary course of the business of the U.S. Borrower
and the Subsidiaries;
(s) investments and payments to any employee, officer or director of
the U.S. Borrower or any of the Subsidiaries pursuant to employee benefit
plans or compensation arrangements entered into in the ordinary course of
business and approved by the Board of Directors of the U.S. Borrower or
such Subsidiary or payments, contributions or transactions relating to such
plans;
provided, that the aggregate principal amount of loans and other extensions of
credit, Investments and payments made pursuant to clauses (r) and (s) above does
not exceed $6,000,000 at any one time outstanding;
(t) Permitted Joint Venture Investments; and
(u) the repurchase option, set forth in the Stock Repurchase Agreement
dated as of August 20, 1996, between the U.S. Borrower and Alberta,
pursuant to which the U.S. Borrower or its Subsidiary acquired shares of
capital stock of Alberta, and Alberta was granted the right to repurchase
such shares for Canadian $1,000,000 (subject to adjustment) plus interest
on the purchase price from the date the Company purchased such shares.
SECTION 8.07. Ownership of Subsidiaries. Except as expressly permitted in
Section 8.02 and for one share of the Capital Stock of 708621 Alberta Ltd., the
U.S. Borrower shall not at any time cease to own, beneficially and of record,
directly or indirectly, 100% of the Capital Stock (except for director's
qualifying shares) of each other Obligor and each Subsidiary.
SECTION 8.08. Tangible Net Worth. The U.S. Borrower will not permit
Tangible Net Worth (determined without regard to any variations therein
resulting from the periodic translation of foreign currency denominated assets
into Dollars to be less than the sum of (a) $454,000,000 (being 85% of Tangible
Net Worth at December 31, 1997), plus (b) 50% of Consolidated Net Income (if
positive) for the period (taken as a single accounting period) from December 31,
1997 to the end of its most recently completed fiscal quarter, plus (c) 100% of
the net cash proceeds received by the U.S. Borrower from all sales of its
Qualified Stock during the period from the Execution Date to the end of its most
recently completed fiscal quarter.
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SECTION 8.09. Other Financial Covenants. (a) The U.S. Borrower will not
permit Consolidated Indebtedness to exceed 40% of Total Capitalization at the
end of any fiscal quarter.
(b) The U.S. Borrower will not permit the Interest Coverage Ratio at
the end of any fiscal quarter to be less than 3.0 to 1.0.
SECTION 8.10. Limitation on Transactions with Affiliates. The U.S. Borrower
will not, and will not permit any Subsidiary to, directly or indirectly, conduct
any business or enter into, renew, extend or permit to exist any transaction
(including the purchase, sale, lease or exchange of any assets or the rendering
of any service) or series of related transactions with any Affiliate of the U.S.
Borrower or any holder of 5% or more of the U.S. Borrower's Capital Stock (other
than a Wholly-Owned Subsidiary or employee benefit plan or plan trust) (an
"Affiliate Transaction") on terms that are less favorable to the U.S. Borrower
or such Subsidiary, as the case may be, than would be available in a comparable
arm's length transaction with a Person who is not an Affiliate or 5% stockholder
of the U.S. Borrower or such Subsidiary, except for (i) a sale to Alberta of the
capital stock of Alberta and (ii) transfers of assets and licenses of technology
permitted under Section 8.02 (e) (iv) (A) or (B). In addition, the U.S. Borrower
will not, and will not permit any Subsidiary to, enter into an Affiliate
Transaction, or any series of related Affiliate Transactions, unless (a) with
respect to a transaction or series of related transactions involving aggregate
consideration equal to or greater than $6,000,000, such transaction is approved
by a majority of the Board of Directors of the U.S. Borrower, including a
majority of the disinterested directors; and (b) with respect to such
transaction or series of related transactions involving aggregate consideration
equal to or greater than $12,000,000, the U.S. Borrower has delivered to the
Agents and the Lenders an opinion of a nationally recognized investment banking
firm to the effect that such transaction or transactions are fair to the U.S.
Borrower or such Subsidiary, as the case may be, from a financial point of view.
Notwithstanding the foregoing, the restrictions set forth in this covenant will
not apply to (i) the payment of reasonable and customary regular fees to
directors of the U.S. Borrower who are not employees of the U.S. Borrower; (ii)
loans and advances to officers, directors and employees of the U.S. Borrower and
the Subsidiaries for travel, entertainment and moving and other relocation
expenses made in direct furtherance and in the ordinary course of business of
the U.S. Borrower and the Subsidiaries; (iii) any other transaction with any
employee, officer or director of the U.S. Borrower or any of the Subsidiaries
pursuant to employee benefit or compensation arrangements entered into in the
ordinary course of business and approved by the Board of Directors of the U.S.
Borrower or the Board of Directors of such Subsidiary permitted by this
Agreement; (iv) customary underwriting or similar transactions with an
investment banking Affiliate; (v) any transaction entered into in the ordinary
course of business with the U.S. Borrower or a Subsidiary; (vi) transactions in
the ordinary course of business between the U.S. Borrower and the Subsidiaries
permitted by this Agreement; provided, however, the aggregate principal amount
of loans and advances made pursuant to clauses (ii) and (iii) of this sentence
shall not exceed $6,000,000 at any time outstanding.
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SECTION 8.11. Restrictions on Subsidiary Dividends. The U.S. Borrower will
not and will not permit any Subsidiary to enter into any agreement or contract
which limits or restricts in any way the payment of any dividends or
distributions by any Subsidiary of either Borrower to such Borrower or to
another Subsidiary of such Borrower.
SECTION 8.12. Debentures. Except as expressly permitted in writing by the
Majority Lenders, the Borrowers will not amend, modify or obtain or grant a
waiver of any provision of the Debentures or the Debenture Indenture with
respect to the Debentures if such amendment, modification or waiver would be
adverse to the Lenders.
SECTION 8.13. The Debenture Indenture. The U.S. Borrower will not take any
action that could result in this Agreement failing to be the U.S. Borrower's
"principal bank credit agreement" (as such phrase is used in the Debenture
Indenture).
SECTION 8.14. Share Capital of Certain Material Foreign Subsidiaries. The
U.S. Borrower will not at any time allow 50% or more of the value of the issued
shares in the share capital of any Material Foreign Subsidiary to derive from
real property situated in Canada.
ARTICLE IX
EVENTS OF DEFAULT AND REMEDIES
SECTION 9.01. Events of Default and Remedies. If any of the following
events ("Events of Default") shall occur and be continuing:
(a) (i) any installment of principal on any Note or any Reimbursement
Obligation shall not be paid on the date on which such payment is due, or
(ii) any payment of interest on any such Note or Reimbursement Obligation
or any other amount due hereunder or any other Loan Document shall not be
paid within five calendar days following the date on which such payment of
interest or such other amount is due; or
(b) any representation or warranty made or, for purposes of Article V,
deemed made by or on behalf of any Obligor herein, at the direction of any
Obligor or by any Obligor in any other Loan Document or in any document,
certificate or financial statement delivered in connection with this
Agreement or any other Loan Document shall prove to have been incorrect in
any material respect when made or deemed made or reaffirmed, as the case
may be; or
(c) any Obligor shall fail to perform or observe any covenant
contained in Article VIII or fails to give any notice required by Section
7.01(f) or Section 7.01(i); or
(d) any Obligor shall fail to perform or observe any other term,
covenant or agreement contained in this Agreement (other than those
specified in Section 9.01(a),
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Section 9.01(b) or Section 9.01(c)) or any other Loan Document to which it
is a party and, in any event, such failure shall remain unremedied for 30
calendar days after the earlier of (i) written notice of such failure shall
have been given to a Responsible Officer of the U.S. Borrower by either
Agent or any Lender or, (ii) a Responsible Officer of any Obligor becomes
aware of such failure; or
(e) the U.S. Borrower or any Subsidiary (i) fails to make (whether as
primary obligor or as guarantor or other surety) any principal payment of
or interest or premium, if any, on any Indebtedness (other than the
Obligations) beyond any period of grace provided with respect thereto (not
to exceed 30 days), provided that the aggregate amount of all Indebtedness
as to which such a payment default shall occur and be continuing is equal
to or exceeds $5,000,000, or (ii) fails to duly observe, perform or comply
with any agreement with any Person or any term or condition of any
instrument, if such failure, either individually or in the aggregate, shall
have caused or shall have the ability to cause the acceleration of the
payment of Indebtedness with an aggregate face amount which is equal to or
exceeds $5,000,000; or
(f) the entry by a court having jurisdiction in the premises of (i) a
decree or order for relief in respect of the U.S. Borrower or any
Subsidiary in an involuntary case or proceeding under any applicable
federal, state or foreign bankruptcy, insolvency, reorganization or other
similar law or (ii) a decree or order adjudging the U.S. Borrower or any
Subsidiary bankrupt or insolvent, or approving as properly filed a petition
seeking reorganization, arrangement, adjustment or composition of or in
respect of the U.S. Borrower or any Subsidiary under any applicable
federal, state or foreign law, or appointing a custodian, receiver,
liquidator, assignee, trustee, sequestrator or other similar official of
the U.S. Borrower or any Subsidiary or of any substantial part of its
property, or ordering the winding up or liquidation of its affairs, and the
continuance of any such decree or order for relief or any such other decree
or order that shall be unstayed and in effect for a period of 60
consecutive days; or
(g) the commencement by the U.S. Borrower or any Subsidiary of a
voluntary case or proceeding under any applicable federal, state or foreign
bankruptcy, insolvency, reorganization or other similar law or of any other
case or proceeding to be adjudicated a bankrupt or insolvent, or the
consent by the U.S. Borrower or any Subsidiary to the entry of a decree or
order for relief in respect of the U.S. Borrower or such Subsidiary in an
involuntary case or proceeding under any applicable federal, state or
foreign bankruptcy, insolvency, reorganization or other similar law or to
the commencement of any bankruptcy or insolvency case or proceeding against
it, or the filing by the U.S. Borrower or any Subsidiary of a petition or
answer or consent seeking reorganization or relief under any applicable
federal, state or foreign law, or the consent by the U.S. Borrower or any
Subsidiary to the filing of such petition or the appointment of or taking
possession by a custodian, receiver, liquidator, assignee, trustee,
sequestrator or similar official of the U.S. Borrower or such Subsidiary or
of any substantial part of its property, or the making by it of an
assignment for the benefit of creditors, or the admission by the U.S.
Borrower or any Subsidiary in writing of its inability to pay its debts
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generally as they become due, or the taking of corporate action by the U.S.
Borrower or any Subsidiary in furtherance of any such action; or
(h) there shall be commenced against the U.S. Borrower or any
Subsidiary any case, proceeding or other action seeking issuance of a
warrant of attachment, execution, distraint or similar process against all
or any substantial part of its assets which results in the entry of an
order for any such relief which shall not have been vacated, discharged, or
stayed or bonded pending appeal within 60 days from the entry thereof; or
(i) the U.S. Borrower or any Subsidiary shall take any action in
furtherance of, or indicating its consent to, approval of, or acquiescence
in, any of the acts set forth in clause (f), (g) or (h); or
(j) the U.S. Borrower or any Subsidiary shall generally not, or shall
be unable to, or shall admit in writing its inability to, pay its debts as
they become due; or
(k) any Loan Document shall (other than with the consent of the Agents
and the Lenders), at any time after its execution and delivery and for any
reason, cease to be in full force and effect in any material respect, or
shall be declared to be null and void, or the validity or enforceability
thereof shall be contested by any Obligor or any Obligor shall deny that it
has any or further liability or obligation thereunder; or
(l) any Plan shall incur an "accumulated funding deficiency" (as
defined in Section 412 of the Code or Section 302 of ERISA) which
(individually or collectively) exceeds $6,000,000, whether or not waived,
or a waiver of the minimum funding standard or extension of any
amortization period is sought or granted under Section 412 of the Code with
respect to a Plan; any proceeding shall have occurred or is reasonably
likely to occur by the PBGC under Section 4069(a) of ERISA to impose
liability on the U.S. Borrower, any Subsidiary or an ERISA Affiliate which
(individually or collectively) exceeds $3,000,000; any Plan shall have an
Unfunded Current Liability in excess of $3,000,000; any required
contribution to a Plan or Multiemployer Plan in excess of $3,000,000 shall
not have been made within 15 days of the date such contribution is due; the
U.S. Borrower, any Subsidiary or an ERISA Affiliate shall have become or is
reasonably likely to incur any unfunded liability reportable under
Statement of Financial Accounting Standards Number 106 for post-retirement
benefits with respect to one or more welfare benefit plans (as defined in
Section 3(1) of ERISA) which (individually or collectively) exceeds
$3,000,000; or the U.S. Borrower, any Subsidiary or any ERISA Affiliate has
incurred or is reasonably likely to incur a liability to or on account of a
Plan or Multiemployer Plan under Section 515, 4062, 4063, 4064, 4201 or
4204 of ERISA, and there shall result (individually or collectively) from
any such event or events a material risk of either (i) the imposition of a
Lien(s) upon, or the granting of a security interest(s) in, the assets of
the U.S. Borrower, any Subsidiary and/or an ERISA Affiliate securing an
amount(s) equal to or exceeding $3,000,000, or (ii) the U.S. Borrower, any
Subsidiary and/or an ERISA Affiliate
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incurring a liability(ies) or obligation(s) with respect thereto equal to
or exceeding $3,000,000; or
(m) a judgment or order shall be entered against the U.S. Borrower or
any Subsidiary, which with other outstanding judgments and orders entered
against the U.S. Borrower and the Subsidiaries equals or exceeds $6,000,000
in the aggregate (to the extent not covered by insurance as to which the
respective insurer has acknowledged coverage), and (i) within 30 days after
entry thereof such judgment shall not have been discharged or execution
thereof stayed pending appeal or, within 30 days after the expiration of
any such stay, such judgment shall not have been discharged, or (ii) any
enforcement proceeding shall have been commenced (and not stayed) by any
creditor upon such judgment;
then, in any such event, and at any time thereafter if any Event of Default
shall then be continuing, the U.S. Administrative Agent (or in the case of
clause (iii) below, the Canadian Agent) may (and at the direction of the
Majority Lenders, shall) do any or all of the following:
(i) without notice to the U.S. Borrower, the Canadian Borrower or
any other Person, declare the U.S. Commitments and the Canadian
Commitments terminated (whereupon the U.S. Commitments and the
Canadian Commitments shall be terminated) and/or accelerate the
Termination Date to a date as early as the date of termination of the
Commitments;
(ii) terminate any Letter of Credit allowing for such
termination, by sending a notice of termination as provided therein
and require the applicable Borrower to provide Cover for outstanding
Letters of Credit, and each Borrower agrees to provide such Cover;
(iii) require the Canadian Borrower to provide Cover for all
outstanding Bankers Acceptance Liabilities, and the Canadian Borrower
agrees to provide such Cover;
(iv) declare the principal amount then outstanding of and the
unpaid accrued interest on the Loans and Reimbursement Obligations and
all fees and all other amounts payable hereunder, under the Notes and
under the other Loan Documents to be forthwith due and payable,
whereupon such amounts shall be and become immediately due and
payable, without notice (including notice of acceleration and notice
of intent to accelerate), presentment, demand, protest or other
formalities of any kind, all of which are hereby expressly waived by
the U.S. Borrower and the Canadian Borrower; provided, that in the
case of the occurrence of an Event of Default with respect to any
Obligor referred to in Section 9.01(f) or Section 9.01(g), the
Commitments shall be automatically terminated the principal amount
then outstanding of and unpaid accrued interest on the Loans and the
Reimbursement Obligations and all fees and all other amounts payable
hereunder, under the Notes and under the other Loan Documents shall be
and become automatically and immediately due and payable, without
notice (including notice of acceleration and notice of intent to
accelerate), presentment, demand, protest or other formalities of any
kind, all
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of which are hereby expressly waived by the U.S. Borrower and the
Canadian Borrower; and
(v) exercise any or all other rights and remedies available to
either Agent or any Lenders under the Loan Documents, at law or in
equity.
SECTION 9.02. Right of Setoff. Upon the occurrence and during the
continuance of any Event of Default, each Lender is hereby authorized at any
time and from time to time, without notice to any Obligor (any such notice being
expressly waived by the U.S. Borrower, the Canadian Borrower and the other
Obligors), to setoff and apply any and all deposits (general or special, time or
demand, provisional or final but excluding the funds held in accounts clearly
designated as escrow or trust accounts held by the U.S. Borrower, the Canadian
Borrower or any other Obligor for the benefit of Persons which are not
Affiliates of any Obligor), whether or not such setoff results in any loss of
interest or other penalty, and including without limitation all certificates of
deposit, at any time held, and any other funds or property at any time held, and
other indebtedness at any time owing by such Lender to or for the credit or the
account of the U.S. Borrower, the Canadian Borrower or any other Obligor against
any and all of the Obligations irrespective of whether or not such Lender or
either Agent will have made any demand under this Agreement, the Notes or any
other Loan Document. Should the right of any Lender to realize funds in any
manner set forth hereinabove be challenged and any application of such funds be
reversed, whether by court order or otherwise, the Lenders shall make
restitution or refund to the U.S. Borrower or the Canadian Borrower or the
applicable other Obligor, as the case may be, pro rata in accordance with their
U.S. Commitments or the Canadian Commitments, as the case may be. Each Lender
agrees to promptly notify the U.S. Borrower, the Canadian Borrower and the
Agents after any such setoff and application, provided that the failure to give
such notice will not affect the validity of such setoff and application. The
rights of Agents and the Lenders under this Section are in addition to other
rights and remedies (including without limitation other rights of setoff) which
the Agents or the Lenders may have. This Section is subject to the terms and
provisions of Section 4.05 and Section 13.18. Any amounts realized under this
Section 9.02 which constitute an asset of the Canadian Borrower shall only be
applied to the payment of the Canadian Obligations.
SECTION 9.03. Preservation of Security for Unmatured Obligations. In the
event that, following (a) the occurrence of an Event of Default and the exercise
of any rights available to either Agent or any Lender under the Loan Documents,
and (b) payment in full of the principal amount then outstanding of and the
accrued interest on the Loans and Reimbursement Obligations and fees and all
other amounts payable hereunder and under the Loan Documents and all other
amounts secured by the Security Documents, any Letters of Credit or Bankers'
Acceptances shall remain outstanding and undrawn upon, the applicable Agent
shall be entitled to hold (and each Borrower and each other Obligor hereby
grants and conveys to each Agent a security interest in and to) all cash or
other Property ("Proceeds of Remedies") realized or arising out of the exercise
of any rights available under the Loan Documents, at law or in equity,
including, without limitation, the proceeds of any foreclosure, as collateral
for the
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payment of any amounts due or to become due under or in respect of such Letters
of Credit and/or such Bankers' Acceptances. Such Proceeds of Remedies shall be
held for the ratable benefit of the U.S. Lenders or the Canadian Lenders, as the
case may be. The rights, titles, benefits, privileges, duties and obligations of
the applicable Agent with respect thereto shall be governed by the terms and
provisions of this Agreement and, to the extent not inconsistent with this
Agreement, the applicable Security Documents. The applicable Agent may, but
shall have no obligation to, invest any such Proceeds of Remedies in such manner
as such Agent, in the exercise of its sole discretion, deems appropriate. Such
Proceeds of Remedies shall be applied to Reimbursement Obligations arising in
respect of any such Letters of Credit, the payment of any Lender's obligations
under any such Letter of Credit and/or the Obligations relating to any such
Bankers' Acceptance when such Letter of Credit is drawn upon or such Bankers'
Acceptance matures, as the case may be. Nothing in this Section shall cause or
permit an increase in the maximum amount of the Obligations permitted to be
outstanding from time to time under this Agreement. Any amounts realized under
this Section 9.03 which constitute an asset of the Canadian Borrower shall only
be applied to the payment of the Canadian Obligations.
SECTION 9.04. Other Remedies. No remedy conferred herein or in any of the
other Loan Documents is to be exclusive of any other remedy, and each and every
remedy contained herein or in any other Loan Document shall be cumulative and
shall be in addition to every other remedy given hereunder and under the other
Loan Documents now or hereafter existing at law or in equity or by statute or
otherwise.
SECTION 9.05. Currency Conversion After Maturity. At any time following the
occurrence of an Event of Default and the acceleration of the maturity of the
Obligations owed to the Canadian Lenders hereunder, the Canadian Lenders shall
be entitled to convert, with two (2) Business Days' prior notice to the Canadian
Borrower, any and all or any part of the then unpaid and outstanding LIBOR
Borrowings and Base Rate Borrowings of the Canadian Borrower to Canadian Prime
Loans. Any such conversion shall be calculated so that the resulting Canadian
Prime Loans shall be the equivalent on the date of conversion of the amount of
Dollars so converted. Any accrued and unpaid interest denominated in Dollars at
the time of any such conversion shall be similarly converted to Canadian
Dollars, and such Canadian Prime Loans and accrued and unpaid interest thereon
shall thereafter bear interest in accordance with the terms hereof.
SECTION 9.06. Application of Moneys During Continuation of Event of
Default. (a) So long as an Event of Default of which the Agent shall have given
notice to the Lenders shall continue, all moneys received by the Agent (i) from
any Obligor under the Loan Documents shall, except as otherwise required by law,
be distributed by the Agent on the dates selected by the Agent (individually, a
"Distribution Date" and collectively, the "Distribution Dates") as follows:
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first, to payment of the unreimbursed expenses for which either Agent or
any Lender is to be reimbursed pursuant to Section 13.03 and unpaid fees
owing to the Agents pursuant to the Fee Letter;
second, to the ratable payment of accrued but unpaid interest on the
Obligations;
third, to the ratable payment of unpaid principal of the Obligations;
fourth, to the ratable payment of all other amounts payable by the Obligors
hereunder;
fifth, to the ratable payment of all other Obligations, until all
Obligations shall have been paid in full; and
finally, to payment to the Obligors, or their respective successors or
assigns, or as a court of competent jurisdiction may direct, of any surplus
then remaining from such proceeds.
(b) The term "unpaid" as used in this Section 9.06 shall mean all
Obligations outstanding as of a Distribution Date (including any amounts
unpaid under clause (v) of the last sentence of Section 9.01) as to which
prior distributions have not been made, after giving effect to any
adjustments which are made pursuant to Section 9.02 of which the Agents
shall have been notified.
ARTICLE X
AGENTS
SECTION 10.01. Appointment, Powers and Immunities. Each U.S. Lender hereby
irrevocably appoints and authorizes the U.S. Administrative Agent to act as its
agent hereunder, under the U.S. Letters of Credit and under the other Loan
Documents with such powers as are specifically delegated to the U.S.
Administrative Agent by the terms hereof and thereof, together with such other
powers as are reasonably incidental thereto. Each Canadian Lender hereby
irrevocably appoints and authorizes the Canadian Agent to act as its agent
hereunder, under the Canadian Letters of Credit and under the other Loan
Documents with such powers as are specifically delegated to the Canadian Agent
by the terms hereof and thereof, together with such other powers as are
reasonably incidental thereto. Any Loan Documents executed in favor of any Agent
shall be held by such Agent for the ratable benefit of the applicable Lenders.
Neither of the Agents ("Agents" as used in this Article IX shall include
reference to their Affiliates and their own and their Affiliates' respective
officers, shareholders, directors, employees and agents) (a) shall have any
duties or responsibilities except those expressly set forth in this Agreement,
the Letters of Credit, and the other Loan Documents, and shall not by reason of
this Agreement or any other Loan Document be a trustee or fiduciary for any
Lender; (b) shall be responsible to any Lender for any recitals, statements,
representations or warranties contained in this
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Agreement, the Letters of Credit or any other Loan Document, or in any
certificate or other document referred to or provided for in, or received by any
of them under, this Agreement, the Letters of Credit or any other Loan Document,
or for the value, validity, effectiveness, genuineness, enforceability,
execution, filing, registration, collectibility, recording, perfection,
existence or sufficiency of this Agreement, the Letters of Credit, or any other
Loan Document or any other document referred to or provided for herein or
therein or any property covered thereby or for any failure by any Obligor or any
other Person to perform any of its obligations hereunder or thereunder, or shall
have any duty to inquire into or pass upon any of the foregoing matters; (c)
shall be required to initiate or conduct any litigation or collection
proceedings hereunder or under the Letters of Credit or any other Loan Document
except to the extent requested and adequately indemnified by the Majority
Lenders; (d) shall be responsible for any mistake of law or fact or any action
taken or omitted to be taken by it hereunder or under the Letters or Credit or
any other Loan Document or any other document or instrument referred to or
provided for herein or therein or in connection herewith or therewith,
including, without limitation, pursuant to its own negligence, except for its
own gross negligence, willful misconduct or unlawful conduct; (e) shall be bound
by or obliged to recognize any agreement among or between either Borrower and
any Lender to which such Agent is not a party, regardless of whether such Agent
has knowledge of the existence of any such agreement or the terms and provisions
thereof; (f) shall be charged with notice or knowledge of any fact or
information not herein set out or provided to such Agent in accordance with the
terms of this Agreement or any other Loan Document; (g) shall be responsible for
any delay, error, omission or default of any mail, telegraph, cable or wireless
agency or operator, and (h) shall be responsible for the acts or edicts of any
Governmental Authority. Either Agent may employ agents and attorneys-in-fact and
neither of the Agents shall be responsible for the negligence or misconduct of
any such agents or attorneys-in-fact selected by it with reasonable care.
Without in any way limiting any of the foregoing, each Lender acknowledges that
none of the Agents (nor any Issuer) shall have greater responsibility in the
operation of the Letters of Credit than is specified in the UCP. In any
foreclosure proceeding concerning any Collateral, each holder of an Obligation
if bidding for its own account or for its own account and the accounts of other
Lenders is prohibited from including in the amount of its bid an amount to be
applied as a credit against the Obligations held by it or the Obligations held
by the other Lenders; instead, such holder must bid in cash only. However, in
any such foreclosure proceeding, (i) the U.S. Administrative Agent may (but
shall not be obligated to) submit a bid for all U.S. Lenders (including itself)
in the form of a credit against the U.S. Obligations, and the U.S.
Administrative Agent or its designee may (but shall not be obligated to) accept
title to such collateral for and on behalf of all U.S. Lenders and (ii) the
Canadian Agent may (but shall not be obligated to) submit a bid for all Canadian
Lenders (including itself) in the form of a credit against the Canadian
Obligations, and the Canadian Agent or its designee may (but shall not be
obligated to) accept title to such collateral for and on behalf of all Canadian
Lenders.
SECTION 10.02. Reliance. Each Agent shall be entitled to rely upon any
certification, notice or other communication (including any thereof by
telephone, telex, telegram or cable) believed by it in good faith to be genuine
and correct and to have been signed or sent
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by or on behalf of the proper Person or Persons, and upon advice and statements
of legal counsel (which may be counsel for either Borrower), independent
accountants and other experts selected by such Agent. Neither of the Agents
shall be required in any way to determine the identity or authority of any
Person delivering or executing the same; provided, however neither Agent is
entitled to rely on any telephonic notice from either Borrower with respect to
the transfer of funds. As to any matters not expressly provided for by this
Agreement, the Letters of Credit, or any other Loan Document, each Agent shall
in all cases be fully protected in acting, or in refraining from acting,
hereunder and thereunder in accordance with instructions of the Majority
Lenders, and any action taken or failure to act by the U.S. Administrative Agent
pursuant thereto shall be binding on all of the U.S. Lenders and any action
taken or failure to act by the Canadian Agent pursuant thereto shall be binding
on all of the Canadian Lenders. Pursuant to instructions of the Majority
Lenders, the Agents shall have the authority to execute releases of the Security
Documents on behalf of the Lenders without the joinder of any Lender. If any
order, writ, judgment or decree shall be made or entered by any court affecting
the rights, duties and obligations of any Agent under this Agreement or any
other Loan Document, then and in any of such events such Agent is authorized, in
its sole discretion, to rely upon and comply with such order, writ, judgment or
decree which it is advised by legal counsel of its own choosing is binding upon
it under the terms of this Agreement, the relevant Loan Document or otherwise;
and if such Agent complies with any such order, writ, judgment or decree, then
it shall not be liable to any Lender or to any other Person by reason of such
compliance even though such order, writ, judgment or decree may be subsequently
reversed, modified, annulled, set aside or vacated.
SECTION 10.03. Defaults; Events of Default. None of the Agents shall be
deemed to have knowledge of the occurrence of a Default or and Event of Default
(other than the non-payment of principal of or interest on Loans or
Reimbursement Obligations) unless such Agent has received notice from a Lender
or a Borrower specifying such Default or Event of Default and stating that such
notice is a "Notice of Default." In the event that either Agent receives such a
Notice of Default, such Agent shall give prompt notice thereof to the other
Agent and the Lenders (and shall give the other Agent and each Lender prompt
notice of each such non-payment). Each Agent shall (subject to Section 10.07)
take such action with respect to such Notice of Default as shall be directed by
the Majority Lenders and within its rights under the Loan Documents and at law
or in equity, provided that, unless and until an Agent shall have received such
directions, such Agent may (but shall not be obligated to) take such action, or
refrain from taking such action, permitted hereby with respect to such Notice of
Default as it shall deem advisable in the best interests of the Lenders and
within its rights under the Loan Documents, at law or in equity.
SECTION 10.04. Material Written Notices. In the event that either Agent
receives any written notice of a material nature from either Borrower or any
other Obligor under the Loan Documents, such Agent shall promptly inform the
other Agent and each of the Lenders thereof.
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SECTION 10.05. Rights as a Lender. With respect to its U.S. Commitment or
Canadian Commitment and the Obligations, each of Chase and The Bank of Nova
Scotia, in its capacity as a Lender hereunder, shall have the same rights and
powers hereunder as any other Lender and may exercise the same as though it were
not acting in its agency capacity, and the term "Lender" or "Lenders" shall,
unless the context otherwise indicates, include each Agent in its individual
capacity. Each Agent may (without having to account therefor to any Lender)
accept deposits from, lend money to and generally engage in any kind of banking,
trust, letter of credit, agency or other business with either Borrower (and any
of their Affiliates) as if it were not acting as an Agent, and each Agent may
accept fees and other consideration from either Borrower (in addition to the
fees heretofore agreed to between either Borrower and any Agent) for services in
connection with this Agreement or otherwise without having to account for the
same to the Lenders.
SECTION 10.06. Indemnification. Neither Agent shall be required to take any
action hereunder or to prosecute or defend any suit in respect of this
Agreement, the Notes or any other Loan Document unless indemnified to the
applicable Agent's satisfaction by the U.S. Lenders or the Canadian Lenders, as
the case may be, against loss, cost, liability and expense. If any indemnity
furnished to the Agents shall become impaired, it may call for additional
indemnity and cease to do the acts indemnified against until such additional
indemnity is given. The Canadian Lenders and the U.S. Lenders, respectively,
agree to indemnify the Canadian Agent and the U.S. Administrative Agent,
respectively (to the extent not reimbursed under Section 2.02(c), Section 13.03
or Section 13.04, but without limiting the obligations of either Borrower under
said Sections 2.02(c), 13.03 and 13.04), ratably in accordance with the sum of
the applicable Lenders' respective U.S. Commitments or Canadian Commitments, as
the case may be, for any and all liabilities, obligations, losses, damages,
penalties, actions, judgments, suits, costs, expenses or disbursements of any
kind and nature whatsoever, REGARDLESS OF WHETHER CAUSED IN WHOLE OR IN PART BY
THE NEGLIGENCE OF ANY INDEMNIFIED PARTIES, which may be imposed on, incurred by
or asserted against the applicable Agent in any way relating to or arising out
of this Agreement, the Letters of Credit or any other Loan Document or any other
documents contemplated by or referred to herein or therein or the transactions
contemplated hereby or thereby (including, without limitation, the costs and
expenses which either Borrower is obligated to pay under Sections 2.02(c), 13.03
and 13.04, interest, penalties, attorneys' fees and amounts paid in settlement,
but excluding, unless a Default or an Event of Default has occurred and is
continuing, normal administrative costs and expenses incident to the performance
of its agency duties hereunder) or the enforcement of any of the terms hereof or
thereof or of any such other documents; provided that no Lender shall be liable
for any of the foregoing to the extent they arise from the gross negligence,
willful misconduct or unlawful conduct of the party to be indemnified. The
obligations of the Lenders under this Section 10.06 shall survive the
termination of this Agreement, the repayment of the Obligations and the
expiration of the Letter of Credit.
SECTION 10.07. Non-Reliance on Agents and Other Lenders. Each Lender agrees
that it has received current financial information with respect to each Borrower
and each other
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Obligor and that it has, independently and without reliance on either Agent or
any other Lender and based on such documents and information as it has deemed
appropriate, made its own credit analysis of each Borrower and each other
Obligor and decision to enter into this Agreement and that it will,
independently and without reliance upon either Agent or any other Lender, and
based on such documents and information as it shall deem appropriate at the
time, continue to make its own analysis and decisions in taking or not taking
action under this Agreement or any of the other Loan Documents. Neither of the
Agents shall be required to keep itself informed as to the performance or
observance by any Obligor of this Agreement, the Letters of Credit or any of the
other Loan Documents or any other document referred to or provided for herein or
therein or to inspect the properties or books of any Obligor. Except for
notices, reports and other documents and information expressly required to be
furnished to the Lenders by either Agent hereunder, under the Letters of Credit
or the other Loan Documents, neither of the Agents shall have any duty or
responsibility to provide any Lender with any credit or other information
concerning the affairs, financial condition or business of any Obligor (or any
of their affiliates) which may come into the possession of either Agent.
SECTION 10.08. Failure to Act. Except for action expressly required of
either Agent hereunder, under the Letters of Credit or under the other Loan
Documents, each Agent shall in all cases be fully justified in failing or
refusing to act hereunder and thereunder unless it shall receive further
assurances to its satisfaction by the Lenders of their indemnification
obligations under Section 10.06 against any and all liability and expense which
may be incurred by it by reason of taking or continuing to take any such action.
SECTION 10.09. Resignation or Removal of an Agent. Subject to the
appointment and acceptance of a successor U.S. Administrative Agent or Canadian
Agent, as the case may be, as provided below, the U.S. Administrative Agent and
the Canadian Agent, respectively, may resign at any time by giving notice
thereof to the U.S. Lenders and the Canadian Lenders, respectively, and to the
U.S. Borrower and the Canadian Borrower, respectively. Either Agent may be
removed at any time with or without cause by the Majority Lenders; provided,
that such Agent shall continue as the U.S. Administrative Agent or the Canadian
Agent, as the case may be, until such time as any successor shall have accepted
appointment hereunder as the U.S. Administrative Agent or the Canadian Agent, as
the case may be. Upon any such resignation or removal, (a) the Majority Lenders
without the consent of any Obligor shall have the right to appoint a successor
U.S. Administrative Agent or Canadian Agent, as the case may be, so long as such
successor U.S. Administrative Agent or the Canadian Agent, as the case may be,
is also a Lender at the time of such appointment and (b) the Majority Lenders
shall have the right to appoint a successor U.S. Administrative Agent or
Canadian Agent, as the case may be, that is not a Lender at the time of such
appointment so long as the Borrowers consent to such appointment (which consent
shall not be unreasonably withheld). If no successor U.S. Administrative Agent
or Canadian Agent, as the case may be, shall have been so appointed by the
Majority Lenders and accepted such appointment within thirty (30) days after the
retiring U.S. Administrative Agent's or Canadian Agent's, as the case may be,
giving of notice of resignation or the Majority Lenders' removal of the retiring
U.S. Administrative Agent or
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Canadian Agent, as the case may be, then the retiring Agent may, on behalf of
the applicable Lenders, appoint a successor U.S. Administrative Agent or
Canadian Agent, as the case may be, without the necessity of any consent on the
part of either Borrower or any Lender. Any successor U.S. Administrative Agent
shall be a bank which has an office in the United States and a combined capital
and surplus of at least $250,000,000 and any successor Canadian Agent shall be a
bank which has an office in Canada and a combined capital and surplus of at
least C$250,000,000. Upon the acceptance of any appointment as the U.S.
Administrative Agent or the Canadian Agent, as the case may be, hereunder by a
successor Agent, such successor Agent shall thereupon succeed to and become
vested with all the rights, powers, privileges and duties of the retiring Agent
and the retiring Agent shall be discharged from its duties and obligations
hereunder and under any other Loan Documents. Such successor Agent shall
promptly specify by notice to Borrowers the location of its Principal Office.
After any retiring Agent's resignation or removal hereunder as an Agent, the
provisions of this Article X shall continue in effect for its benefit in respect
of any actions taken or omitted to be taken by it while it was acting as Agent.
SECTION 10.10. No Partnership. Neither the execution and delivery of this
Agreement nor any of the other Loan Documents nor any interest the Lenders, the
Agents or any of them may now or hereafter have in all or any part of the
Obligations shall create or be construed as creating a partnership, joint
venture or other joint enterprise between the Lenders or among the Lenders and
either Agent. The relationship between the Lenders, on the one hand, and either
Agent, on the other, is and shall be that of principals and agent only, and
nothing in this Agreement or any of the other Loan Documents shall be construed
to constitute either Agent as trustee or other fiduciary for any Lender or to
impose on either Agent any duty, responsibility or obligation other than those
expressly provided for herein and therein.
SECTION 10.11. Consents under Security Documents. The Agents may, with the
prior consent of the Majority Lenders (but not otherwise), consent to any
modification, supplement or waiver under any of the Security Documents, provided
that, without the prior consent of all the Lenders, the Agents shall not release
any Collateral or otherwise terminate any Lien under any Security Document
providing for collateral security, or agree to additional obligations being
secured by such collateral security.
ARTICLE XI
U.S. BORROWER GUARANTY
SECTION 11.01 U.S. Borrower Guaranty. (a) In consideration of, and in order
to induce the (i) Canadian Lenders to make Canadian Loans to, and to accept and
purchase Bankers' Acceptances from, the Canadian Borrower and (ii) the issuance
of Canadian Letters of Credit for the account of the Canadian Borrower, the U.S.
Borrower hereby absolutely, unconditionally and irrevocably guarantees in favor
of all of the Canadian Lenders, the punctual
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payment and performance when due, whether at stated maturity, by acceleration or
otherwise, of the Obligations of the Canadian Borrower, and all covenants of the
Canadian Borrower, now or hereafter existing under this Agreement and the other
Loan Documents to which the Canadian Borrower is a party, whether for principal,
interest (including interest accruing or becoming owing both prior to and
subsequent to the commencement of any proceeding against or with respect to the
Canadian Borrower under any applicable Bankruptcy Code, fees, commissions,
expenses (including reasonable attorneys' fees and expenses) or otherwise (all
such obligations being the "Canadian Borrower Guaranteed Obligations"). The U.S.
Borrower agrees to pay any and all expenses incurred by each Canadian Lender and
the Canadian Agent in enforcing this U.S. Borrower Guaranty against the U.S.
Borrower.
(b) This U.S. Borrower Guaranty is an absolute, unconditional, present
and continuing guaranty of payment and not of collectibility and is in no
way conditioned upon any attempt to collect from the Canadian Borrower or
any other Obligor or any other action, occurrence or circumstance
whatsoever.
SECTION 11.02. Continuing Guaranty. (a) The U.S. Borrower guarantees that
the Canadian Borrower Guaranteed Obligations will be paid strictly in accordance
with the terms of this Agreement and the other Loan Documents. The U.S. Borrower
agrees that, to the maximum extent permitted by applicable law, the Canadian
Borrower Guaranteed Obligations and Loan Documents to which the Canadian
Borrower is a party may be extended or renewed, and indebtedness thereunder
repaid and reborrowed in whole or in part, without notice to or assent by the
U.S. Borrower, and that it will remain bound upon this U.S. Borrower Guaranty
notwithstanding any extension, renewal or other alteration of any Canadian
Borrower Guaranteed Obligations or such Loan Documents, or any repayment and
reborrowing of the Canadian Loans, or the expiration of the Canadian Letters of
Credit. To the maximum extent permitted by applicable law, except as otherwise
expressly provided in this Agreement or any other Loan Document to which the
U.S. Borrower is a party, the obligations of the U.S. Borrower under this U.S.
Borrower Guaranty shall be absolute, unconditional and irrevocable, and shall be
performed strictly in accordance with the terms hereof under any circumstances
whatsoever, including:
(i) any modification, amendment, supplement, renewal, extension
for any period, increase, decrease, alteration or rearrangement of all
or any part of the Canadian Borrower Guaranteed Obligations, or of
this Agreement or any other Loan Document executed in connection
herewith, or any contract or understanding among the U.S. Borrower,
the Canadian Borrower, any Subsidiary Guarantor, either Agent and/or
the Lenders, or any other Person, pertaining to the Canadian Borrower
Guaranteed Obligations;
(ii) any adjustment, indulgence, forbearance or compromise that
might be granted or given by the Lenders to the U.S. Borrower or any
Subsidiary Guarantor or any other Person liable on the Canadian
Borrower Guaranteed Obligations;
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(iii) the insolvency, bankruptcy, arrangement, adjustment,
composition, liquidation, disability, dissolution or lack of power of
the U.S. Borrower, the Canadian Borrower, any Subsidiary Guarantor or
any other Person at any time liable for the payment of all or part of
the Canadian Borrower Guaranteed Obligations; or any dissolution of
the U.S. Borrower, the Canadian Borrower, or any Subsidiary Guarantor,
or any sale, lease or transfer of any or all of the assets of the U.S.
Borrower, the Canadian Borrower, or any Subsidiary Guarantor, or any
changes in the shareholders of the U.S. Borrower, the Canadian
Borrower, or any Subsidiary Guarantor; or any reorganization of the
U.S. Borrower, the Canadian Borrower, or any Subsidiary Guarantor;
(iv) the invalidity, illegality or unenforceability of all or any
part of the Canadian Borrower Guaranteed Obligations, or any document
or agreement executed in connection with the Canadian Borrower
Guaranteed Obligations, for any reason whatsoever, including the fact
that (A) the Canadian Borrower Guaranteed Obligations, or any part
thereof, exceeds the amount permitted by law, (B) the act of creating
the Canadian Borrower Guaranteed Obligations or any part thereof is
ultra vires, (C) the officers or representatives executing the
documents or otherwise creating the Canadian Borrower Guaranteed
Obligations acted in excess of their authority, (D) the Canadian
Borrower Guaranteed Obligations or any part thereof violate applicable
usury laws, (E) the U.S. Borrower, the Canadian Borrower or any
Subsidiary Guarantor has valid defenses, claims and offsets (whether
at law or in equity, by agreement or by statute) which render the
Canadian Borrower Guaranteed Obligations wholly or partially
uncollectible from the U.S. Borrower, the Canadian Borrower or such
Subsidiary Guarantor, (F) the creation, performance or repayment of
the Canadian Borrower Guaranteed Obligations (or execution, delivery
and performance of any document or instrument representing part of the
Canadian Borrower Guaranteed Obligations or executed in connection
with the Canadian Borrower Guaranteed Obligations, or given to secure
the repayment of the Canadian Borrower Guaranteed Obligations) is
illegal, uncollectible, legally impossible or unenforceable, or (G)
this Agreement, any other Loan Document, or any other document or
instrument pertaining to the Canadian Borrower Guaranteed Obligations
has been forged or otherwise is irregular or not genuine or authentic;
(v) any full or partial release of the liability of the U.S.
Borrower, the Canadian Borrower or any Subsidiary Guarantor on the
Canadian Borrower Guaranteed Obligations or any part thereof, or any
other Person now or hereafter liable, whether directly or indirectly,
jointly, severally, or jointly and severally, to pay, perform,
guarantee or assure the payment of the Canadian Borrower Guaranteed
Obligations or any part thereof; it being recognized, acknowledged and
agreed by the U.S. Borrower that the U.S. Borrower may be required to
pay the Canadian Borrower Guaranteed Obligations in full without
assistance or support of any other Person, and the U.S. Borrower has
not been induced to enter into this U.S. Borrower Guaranty on the
basis of a contemplation, belief, understanding or agreement that any
other Person will be liable to perform the Canadian Borrower
Guaranteed Obligations, or that the Canadian Administrative Agent or
any Canadian
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Lender will look to any other Person to perform the Canadian Borrower
Guaranteed Obligations;
(vi) the taking or accepting of any other security, collateral or
guaranty, or other assurance of payment, for all or any part of the
Canadian Borrower Guaranteed Obligations;
(vii) any release, surrender, exchange, subordination,
deterioration, waste, loss or impairment of any collateral, property
or security, at any time existing in connection with, or assuring or
securing payment of, all or any part of the Canadian Borrower
Guaranteed Obligations;
(viii) the failure of either Agent, the Lenders or any other
Person to exercise diligence or reasonable care in the preservation,
protection, enforcement, sale or other handling or treatment of all or
any part of such collateral, property or security;
(ix) the fact that any collateral, security or Lien contemplated
or intended to be given, created or granted as security for the
repayment of the Canadian Borrower Guaranteed Obligations shall not be
properly perfected or created, or shall prove to be unenforceable or
subordinate to any other Lien; it being recognized and agreed by the
U.S. Borrower that the U.S. Borrower is not entering into this U.S.
Borrower Guaranty in reliance on, or in contemplation of the benefits
of, the validity, enforceability, collectibility or value of any of
the collateral for the Canadian Borrower Guaranteed Obligations;
(x) any payment by the Canadian Borrower or the U.S. Borrower to
the Canadian Agent or any Lender is held to constitute a preference
under bankruptcy laws, or for any other reason either the Canadian
Agent or any Canadian Lender is required to refund such payment or pay
such amount to the Canadian Borrower or any other Person; or
(xi) any other action taken or omitted to be taken with respect
to this Agreement, any other Loan Document, the Canadian Borrower
Guaranteed Obligations, or the security and collateral therefor,
whether or not such action or omission prejudices the U.S. Borrower or
increases the likelihood that the U.S. Borrower will be required to
pay the Canadian Borrower Guaranteed Obligations pursuant to the terms
hereof;
it being the unambiguous and unequivocal intention of the U.S. Borrower that the
U.S. Borrower shall be obligated to pay the Canadian Borrower Guaranteed
Obligations when due, notwithstanding any occurrence, circumstance, event,
action, or omission whatsoever, whether contemplated or uncontemplated, and
whether or not otherwise or particularly described herein, except for the full
and final payment and satisfaction of the Canadian Borrower Guaranteed
Obligations after the termination of all of the Canadian Commitments and the
expiration or termination of the Canadian Letter of Credit.
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(b) The U.S. Borrower further agrees that, to the fullest extent
permitted by law, as between the U.S. Borrower, on the one hand, and the
Lenders and the Agents, on the other hand, (i) the maturity of the Canadian
Borrower Guaranteed Obligations may be accelerated as provided in Article
IX for the purposes of this U.S. Borrower Guaranty, notwithstanding any
stay, injunction or other prohibition preventing such acceleration of the
Canadian Borrower Guaranteed Obligations, and (ii) in the event of any
acceleration of the Canadian Borrower Guaranteed Obligations as provided in
Article IX, the Canadian Borrower Guaranteed Obligations (whether or not
due and payable) shall forthwith become due and payable by the U.S.
Borrower for the purpose of this U.S. Borrower Guaranty.
SECTION 11.03. Effect of Debtor Relief Laws. If after receipt of any
payment of, or proceeds of any security applied (or intended to be applied) to
the payment of all or any part of the Canadian Borrower Guaranteed Obligations,
either Agent, the applicable Issuer or any Lender is for any reason compelled to
surrender or voluntarily surrenders, such payment or proceeds to any Person (a)
because such payment or application of proceeds is or may be avoided,
invalidated, declared fraudulent, set aside, determined to be void or voidable
as a preference, fraudulent conveyance, fraudulent transfer, impermissible
set-off or a diversion of trust funds or (b) for any other reason, including (i)
any judgment, decree or order of any court or administrative body having
jurisdiction over the Canadian Agent, the applicable Issuer, any Canadian Lender
or any of their respective properties or (ii) any settlement or compromise of
any such claim effected by the Canadian Agent, the Issuer of the Canadian
Letters of Credit or any Canadian Lender with any such claimant (including the
Canadian Borrower), then the Canadian Borrower Guaranteed Obligations or part
thereof intended to be satisfied shall be reinstated and continue, and this U.S.
Borrower Guaranty shall continue in full force as if such payment or proceeds
have not been received, notwithstanding any revocation thereof or the
cancellation of any instrument evidencing any of the Canadian Borrower
Guaranteed Obligations or otherwise; and the U.S. Borrower shall be liable to
pay the Agents, the Issuer of the Canadian Letters of Credit and the Lenders,
and hereby do indemnify the Agents, the Issuer of the Canadian Letters of Credit
and the Lenders and hold them harmless for the amount of such payment or
proceeds so surrendered and all reasonable expenses (including reasonable
attorneys' fees, court costs and expenses attributable thereto) incurred by
either Agent, such Issuer or any such Lender in the defense of any claim made
against it that any payment or proceeds received by the such Agent, such Issuer
or any such Lender in respect of all or part of the Canadian Borrower Guaranteed
Obligations must be surrendered. The provisions of this paragraph shall survive
the termination of this U.S. Borrower Guaranty, and any satisfaction and
discharge of the Canadian Borrower by virtue of any payment, court order or any
law.
SECTION 11.04. Waiver. The U.S. Borrower hereby waives promptness,
diligence, notice of acceptance and any other notice with respect to any of the
Canadian Borrower Guaranteed Obligations and this U.S. Borrower Guaranty and
waives presentment, demand for payment, notice of intent to accelerate, notice
of dishonor or nonpayment and any requirement that either Agent or any Canadian
Lender institute suit, collection proceedings or take any other action to
collect the Canadian Borrower Guaranteed Obligations, including any
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requirement that either Agent or any Lender protect, secure, perfect or insure
any Lien against any property subject thereto or exhaust any right or take any
action against the Canadian Borrower or any other Person or any collateral (it
being the intention of the Canadian Agent, the Canadian Lenders and the U.S.
Borrower that this U.S. Borrower Guaranty is to be a guaranty of payment and not
of collection). It shall not be necessary for either Agent or any Canadian
Lender, in order to enforce any payment by the U.S. Borrower hereunder, to
institute suit or exhaust its rights and remedies against the Canadian Borrower,
any Subsidiary Guarantor or any other Person, including others liable to pay any
Canadian Borrower Guaranteed Obligations, or to enforce its rights against any
security ever given to secure payment thereof. The U.S. Borrower hereby
expressly waives to the maximum extent permitted by applicable law each and
every right to which it may be entitled by virtue of the suretyship laws of the
State of Texas or any other state in which it may be located, including any and
all rights it may have pursuant to Rule 31, Texas Rules of Civil Procedure,
Section 17.001 of the Texas Civil Practice and Remedies Code and Chapter 34 of
the Texas Business and Commerce Code. The U.S. Borrower hereby waives marshaling
of assets and liabilities, notice by either Agent or any Lender of any
indebtedness or liability to which such Lender applies or may apply any amounts
received by such Lender, and of the creation, advancement, increase, existence,
extension, renewal, rearrangement or modification of the Canadian Borrower
Guaranteed Obligations. The U.S. Borrower expressly waives, to the extent
permitted by applicable law, the benefit of any and all laws providing for
exemption of property from execution or for valuation and appraisal upon
foreclosure.
SECTION 11.05. Full Force and Effect. This U.S. Borrower Guaranty is a
continuing guaranty and shall remain in full force and effect until all of the
Canadian Borrower Guaranteed Obligations under this Agreement and the other Loan
Documents to which the Canadian Borrower is a party and all other amounts
payable under this U.S. Borrower Guaranty have been paid in full (after the
termination of the Canadian Commitments and the termination or expiration of the
Canadian Letters of Credit). All rights, remedies and powers provided in this
U.S. Borrower Guaranty may be exercised, and all waivers contained in this U.S.
Borrower Guaranty may be enforced, only to the extent that the exercise or
enforcement thereof does not violate any provisions of applicable law which may
not be waived.
ARTICLE XII
SUBSIDIARY GUARANTORS GUARANTY
SECTION 12.01 Subsidiary Guarantors Guaranty. (a) In consideration of, and
in order to induce the Lenders to make the Loans, accept and purchase Bankers'
Acceptances and the Issuers to issue Letters of Credit hereunder, each
Subsidiary Guarantor hereby absolutely, unconditionally and irrevocably, jointly
and severally guarantees, in favor of all of the Lenders, the punctual payment
and performance when due, whether at stated maturity, by acceleration or
otherwise, of the Obligations of the Borrowers, and all other obligations and
covenants of the Borrowers, now or hereafter existing under this Agreement and
the other Loan Documents to
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which either Borrower is a party, whether for principal, interest (including
interest accruing or becoming owing both prior to and subsequent to the
commencement of any proceeding against or with respect to such Borrower under
any applicable Bankruptcy Code, commitment fees, commissions, expenses
(including reasonable attorneys' fees and expenses) or otherwise, subject
however to the limitation set forth in Section 12.04 (all such obligations being
the "Borrower Guaranteed Obligations", it being understood, for the avoidance of
doubt, that, as to each Subsidiary Guarantor such term shall not include its own
obligations as a Subsidiary Guarantor. Each Subsidiary Guarantor agrees to pay
any and all expenses incurred by each Lender and each Agent in enforcing this
Subsidiary Guarantors Guaranty against such Subsidiary Guarantor.
(b) Each Subsidiary Guarantor agrees that the amount of the Borrower
Guaranteed Obligations may at any time and from time to time exceed the
amount of the maximum liability of such Subsidiary Guarantor in respect
thereof under this Subsidiary Guarantors Guaranty (by reason of the
limitations set forth in Section 12.04) without impairing this Subsidiary
Guarantors Guaranty or affecting the rights and remedies of the Agents and
the Lenders hereunder.
(c) This Subsidiary Guarantors Guaranty is an absolute, unconditional,
present and continuing guaranty of payment and not of collectibility and is
in no way conditioned upon any attempt to collect from the either Borrower,
any other Obligor or any other action, occurrence or circumstance
whatsoever.
SECTION 12.02. Continuing Guaranty. (a) Each Subsidiary Guarantor
guarantees that the Borrower Guaranteed Obligations will be paid strictly in
accordance with the terms of this Agreement and the other Loan Documents. Each
Subsidiary Guarantor agrees that, to the maximum extent permitted by applicable
law, the Borrower Guaranteed Obligations and the Loan Documents may be extended
or renewed, and Loans repaid and reborrowed in whole or in part, without notice
to or assent by such Subsidiary Guarantor, and that it will remain bound upon
this Subsidiary Guarantors Guaranty notwithstanding any extension, renewal or
other alteration of any of the Borrower Guaranteed Obligations or the Loan
Documents, or any repayment and reborrowing of the Loans, or the expiration of
the Letters of Credit. To the maximum extent permitted by applicable law, except
as otherwise expressly provided in this Agreement or any other Loan Document to
which such Subsidiary Guarantor is a party, the obligations of each Subsidiary
Guarantor under this Subsidiary Guarantors Guaranty shall be absolute,
unconditional and irrevocable, and shall be performed strictly in accordance
with the terms hereof under any circumstances whatsoever, including:
(i) any modification, amendment, supplement, renewal, extension
for any period, increase, decrease, alteration or rearrangement of all
or any part of the Borrower Guaranteed Obligations or this Agreement
or any other Loan Document executed in connection herewith, or any
contract or understanding among either Borrower, any Subsidiary
Guarantor, either Agent and/or the Lenders, or any other Person,
pertaining to the Borrower Guaranteed Obligations;
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(ii) any adjustment, indulgence, forbearance or compromise that
might be granted or given by the Lenders to either Borrower or any
Subsidiary Guarantor or any other Person liable on the Borrower
Guaranteed Obligations;
(iii) the insolvency, bankruptcy, arrangement, adjustment,
composition, liquidation, disability, dissolution or lack of power of
either Borrower, any Subsidiary Guarantor or any other Person at any
time liable for the payment of all or part of the Borrower Guaranteed
Obligations; or any dissolution of either Borrower or any Subsidiary
Guarantor, or any sale, lease or transfer of any or all of the assets
of either Borrower or any Subsidiary Guarantor, or any changes in the
holders of the equity in either Borrower or any Subsidiary Guarantor;
or any reorganization of either Borrower or any Subsidiary Guarantor;
(iv) the invalidity, illegality or unenforceability of all or any
part of the Borrower Guaranteed Obligations, or any document or
agreement executed in connection with the Borrower Guaranteed
Obligations, for any reason whatsoever, including, without limitation,
the fact that (A) the Borrower Guaranteed Obligations, or any part
thereof, exceeds the amount permitted by law, (B) the act of creating
the Borrower Guaranteed Obligations or any part thereof is ultra
vires, (C) the officers or representatives executing the documents or
otherwise creating the Borrower Guaranteed Obligations acted in excess
of their authority, (D) the Borrower Guaranteed Obligations or any
part thereof violate applicable usury laws, (E) either Borrower or any
Subsidiary Guarantor has valid defenses, claims and offsets (whether
at law or in equity, by agreement or by statute) which render the
Borrower Guaranteed Obligations wholly or partially uncollectible from
either Borrower or such Subsidiary Guarantor, (F) the creation,
performance or repayment of the Borrower Guaranteed Obligations (or
execution, delivery and performance of any document or instrument
representing part of the Borrower Guaranteed Obligations or executed
in connection with the Borrower Guaranteed Obligations, or given to
secure the repayment of the Borrower Guaranteed Obligations) is
illegal, uncollectible, legally impossible or unenforceable, or (G)
this Agreement, any other Loan Document, or any other document or
instrument pertaining to the Borrower Guaranteed Obligations has been
forged or otherwise is irregular or not genuine or authentic;
(v) any full or partial release of the liability of either
Borrower or any Subsidiary Guarantor on the Borrower Guaranteed
Obligations or any part thereof, or any other Person now or hereafter
liable, whether directly or indirectly, jointly, severally, or jointly
and severally, to pay, perform, guarantee or assure the payment of the
Borrower Guaranteed Obligations or any part thereof; it being
recognized, acknowledged and agreed by each Subsidiary Guarantor that
such Subsidiary Guarantor may be required to pay the Borrower
Guaranteed Obligations in full without assistance or support of any
other Person, and such Subsidiary Guarantor has not been induced to
enter into this Subsidiary Borrower Guaranty on the basis of a
contemplation, belief, understanding or agreement that any other
Person will be liable to perform the Borrower Guaranteed Obligations,
or that either Agent
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or any Lender will look to any other Person to perform the Borrower
Guaranteed Obligations;
(vi) the taking or accepting of any other security, collateral or
guaranty, or other assurance of payment, for all or any part of the
Borrower Guaranteed Obligations;
(vii) any release, surrender, exchange, subordination,
deterioration, waste, loss or impairment of any collateral, property
or security, at any time existing in connection with, or assuring or
securing payment of, all or any part of the Borrower Guaranteed
Obligations;
(viii) the failure of either Agent, the Lenders or any other
Person to exercise diligence or reasonable care in the preservation,
protection, enforcement, sale or other handling or treatment of all or
any part of such collateral, property or security;
(ix) the fact that any collateral, security or Lien contemplated
or intended to be given, created or granted as security for the
repayment of the Borrower Guaranteed Obligations shall not be properly
perfected or created, or shall prove to be unenforceable or
subordinate to any other Lien; it being recognized and agreed by each
Subsidiary Guarantor that such Subsidiary Guarantor is not entering
into this Subsidiary Guarantors Guaranty in reliance on, or in
contemplation of the benefits of, the validity, enforceability,
collectibility or value of any of the collateral for the Borrower
Guaranteed Obligations;
(x) any payment by the U.S. Borrower or any Subsidiary Guarantor
to either Agent or any Lender is held to constitute a preference under
bankruptcy laws, or for any reason either Agent or any Lender is
required to refund such payment or pay such amount to the U.S.
Borrower or any other Person; or
(xi) any other action taken or omitted to be taken with respect
to this Agreement, any other Loan Document, the Borrower Guaranteed
Obligations, or the security and collateral therefor, whether or not
such action or omission prejudices any Subsidiary Guarantor or
increases the likelihood that any Subsidiary Guarantor will be
required to pay the Borrower Guaranteed Obligations pursuant to the
terms hereof;
it being the unambiguous and unequivocal intention of each Subsidiary Guarantor
that such Subsidiary Guarantor shall be obligated to pay the Borrower Guaranteed
Obligations when due, notwithstanding any occurrence, circumstance, event,
action, or omission whatsoever, whether contemplated or uncontemplated, and
whether or not otherwise or particularly described herein, except for the full
and final payment and satisfaction of the Borrower Guaranteed Obligations after
the termination of all of the Commitments and the expiration or termination of
all Letters of Credit.
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(b) Each Subsidiary Guarantor further agrees that, as between such
Subsidiary Guarantor, on the one hand, and the Lenders and the Agents, on
the other hand, (i) the maturity of the Borrower Guaranteed Obligations may
be accelerated as provided in Article VIII for the purposes of this
Subsidiary Guarantors Guaranty, notwithstanding any stay, injunction or
other prohibition preventing such acceleration of the Borrower Guaranteed
Obligations, and (ii) in the event of any acceleration of the Obligations
as provided in Article IX, the Borrower Guaranteed Obligations (whether or
not due and payable) shall forthwith become due and payable by each
Subsidiary Guarantor for the purpose of this Subsidiary Guarantors
Guaranty.
SECTION 12.03. Effect of Debtor Relief Laws. If after receipt of any
payment of, or proceeds of any security applied (or intended to be applied) to
the payment of all or any part of the Borrower Guaranteed Obligations, either
Agent, either Issuer or any Lender is for any reason compelled to surrender or
voluntarily surrenders, such payment or proceeds to any Person (a) because such
payment or application of proceeds is or may be avoided, invalidated, declared
fraudulent, set aside, determined to be void or voidable as a preference,
fraudulent conveyance, fraudulent transfer, impermissible set-off or a diversion
of trust funds or (b) for any other reason, including (i) any judgment, decree
or order of any court or administrative body having jurisdiction over such
Agent, Issuer, such Lender or any of their respective properties or (ii) any
settlement or compromise of any such claim effected by such Agent, such Issuer
or such Lender with any such claimant (including the U.S. Borrower), then the
Borrower Guaranteed Obligations or part thereof intended to be satisfied shall
be reinstated and continue, and this Subsidiary Guarantors Guaranty shall
continue in full force as if such payment or proceeds have not been received,
notwithstanding any revocation thereof or the cancellation of any Note or any
other instrument evidencing any of the Borrower Guaranteed Obligations or
otherwise; and the Subsidiary Guarantors, jointly and severally, shall be liable
to pay each Agent, each Issuer and the Lenders, and hereby do indemnify each
Agent, each Issuer and the Lenders and hold them harmless for the amount of such
payment or proceeds so surrendered and all reasonable expenses (including
reasonable attorneys' fees, court costs and expenses attributable thereto)
incurred by such Agent, such Issuer or such Lender in the defense of any claim
made against it that any payment or proceeds received by such Agent, such Issuer
or such Lender in respect of all or part of the Borrower Guaranteed Obligations
must be surrendered. The provisions of this paragraph shall survive the
termination of this Subsidiary Guarantors Guaranty, and any satisfaction and
discharge of the Borrowers by virtue of any payment, court order or any law.
SECTION 12.04. General Limitation on Borrower Guaranteed Obligations. In
any action or proceeding involving any state corporate law, or any state or
federal bankruptcy, insolvency, reorganization or other law affecting the rights
of creditors generally, if the obligations of any Subsidiary Guarantor under
Section 12.01 would otherwise, taking into account the provisions of Section
12.05, be held or determined to be void, invalid or unenforceable, or
subordinated to the claims of any other creditors, on account of the amount of
its liability under Section 12.01, then, notwithstanding any other provision
hereof to the contrary, the amount of such liability shall, without any further
action by such Subsidiary
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Guarantor, any Lender, either Agent or any other Person, be automatically
limited and reduced to the highest amount that is valid and enforceable and not
subordinated to the claims of other creditors as determined in such action or
proceeding.
SECTION 12.05. Rights of Contribution. The Subsidiary Guarantors hereby
agree, as between themselves, that if any Subsidiary Guarantor shall become an
Excess Funding Obligor (as defined below) by reason of the payment by such
Subsidiary Guarantor of any of the Borrower Guaranteed Obligations, each other
Subsidiary Guarantor shall, on demand of such Excess Funding Obligor (but
subject to the next sentence), pay to such Excess Funding Obligor an amount
equal to such Subsidiary Guarantor's Pro Rata Share (as defined below and
determined, for this purpose, without reference to the properties, debts and
liabilities of such Excess Funding Obligor) of the Excess Payment (as defined
below) in respect of such Borrower Guaranteed Obligations.
For purposes of this Section 12.05, (i) "Excess Funding Obligor" shall
mean, in respect of any of the Borrower Guaranteed Obligations, a Subsidiary
Guarantor that has paid an amount in excess of its Pro Rata Share of such
Borrower Guaranteed Obligations, (ii) "Excess Payment" shall mean, in respect of
any of the Borrower Guaranteed Obligations, the amount paid by an Excess Funding
Obligor in excess of its Pro Rata Share of such Borrower Guaranteed Obligations
and (iii) "Pro Rata Share" shall mean, for any Subsidiary Guarantor, the ratio
(expressed as a percentage) of (x) the amount by which the aggregate fair
saleable value of all properties of such Subsidiary Guarantor on the date of
this Agreement exceeds the amount of all the debts and liabilities of such
Subsidiary Guarantor (including contingent, subordinated, unmatured and
unliquidated liabilities, but excluding the obligations that have been
guaranteed by such Subsidiary Guarantor in Section 12.01) to (y) the amount by
which the aggregate fair saleable value of all assets of the Borrowers and all
the Subsidiary Guarantors exceeds the amount of all the debts and liabilities
(including contingent, subordinated, unmatured and unliquidated liabilities, but
excluding the obligations of the Borrowers and the Subsidiary Guarantors
hereunder) of the Borrowers and all the Subsidiary Guarantors, all as of the
Execution Date.
SECTION 12.06. Subrogation. Notwithstanding any payment or payments made by
any Subsidiary Guarantor hereunder, or any set-off or application by either
Agent or any Lender of any security or of any credits or claims, no Subsidiary
Guarantor will assert or exercise any rights of such Agent or any Lender or of
such Subsidiary Guarantor against either Borrower to recover the amount of any
payment made by such Subsidiary Guarantor to such Agent or any Lender hereunder
by way of any claim, remedy or subrogation, reimbursement, exoneration,
contribution, indemnity, participation or otherwise arising by contract, by
statute, under common law or otherwise, and such Subsidiary Guarantor shall not
have any right of recourse to or any claim against assets or property of either
Borrower, until all of the Borrower Guaranteed Obligations are paid in full
after the termination of all of the Commitments and the expiration or
termination of all Letters of Credit. If any amount shall nevertheless be paid
to a Subsidiary Guarantor by either Borrower or another Subsidiary Guarantor
prior to payment
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in full of the Borrower Guaranteed Obligations, such amount shall be held in
trust for the benefit of the Administrative Agent and the Lenders and shall
forthwith be paid to the Administrative Agent to be credited and applied to the
Borrower Guaranteed Obligations, whether matured or unmatured. The provisions of
this paragraph shall survive the termination of this Subsidiary Guarantors
Guaranty, and any satisfaction and discharge of either Borrower by virtue of any
payment, court order or any federal or state law.
SECTION 12.07. Subordination. If any Subsidiary Guarantor becomes the
holder of any indebtedness payable by either Borrower or another Subsidiary
Guarantor, each Subsidiary Guarantor hereby subordinates all indebtedness owing
to it from such Borrower or such other Subsidiary Guarantor to all indebtedness
of such Borrower or such other Subsidiary Guarantor to the Agents and the
Lenders, and agrees that during the continuance of any Default or Event of
Default it shall not accept any payment on the same until the first to occur of
(a) the date such Default or Event of Default no longer exists and (b) payment
in full of the Borrower Guaranteed Obligations of the Borrowers under this
Agreement and the other Loan Documents after the termination of all of the
Commitments and the termination or expiration of the Letters of Credit and all
other Loan Documents, and, while any Default or Event of Default exists, shall
in no circumstance whatsoever attempt to set-off or reduce any obligations
hereunder because of such indebtedness. If any amount shall nevertheless be paid
to a Subsidiary Guarantor by either Borrower or another Subsidiary Guarantor
prior to payment in full of the Borrower Guaranteed Obligations and, while any
Default or Event of Default exists, such amount shall be held in trust for the
benefit of the Agents and the Lenders and shall forthwith be paid to the
applicable Agent to be credited and applied to the Borrower Guaranteed
Obligations, whether matured or unmatured.
SECTION 12.08. Waiver. Each Subsidiary Guarantor hereby waives promptness,
diligence, notice of acceptance and any other notice with respect to any of the
Borrower Guaranteed Obligations and this Subsidiary Guarantors Guaranty and
waives presentment, demand for payment, notice of intent to accelerate, notice
of dishonor or nonpayment and any requirement that the Administrative Agent or
any Lender institute suit, collection proceedings or take any other action to
collect the Borrower Guaranteed Obligations, including any requirement that
either Agent or any Lender protect, secure, perfect or insure any Lien against
any property subject thereto or exhaust any right or take any action against the
U.S. Borrower or any other Person or any collateral (it being the intention of
the Agents, the Lenders and each Subsidiary Guarantor that this Subsidiary
Guarantors Guaranty is to be a guaranty of payment and not of collection). It
shall not be necessary for either Agent or any Lender, in order to enforce any
payment by any Subsidiary Guarantor hereunder, to institute suit or exhaust its
rights and remedies against either Borrower, any other Subsidiary Guarantor or
any other Person, including others liable to pay any Guaranteed Obligations, or
to enforce its rights against any security ever given to secure payment thereof.
Each Subsidiary Guarantor hereby expressly waives to the maximum extent
permitted by applicable law each and every right to which it may be entitled
pursuant to Rule 31, Texas Rules of Civil Procedure, Section 17.001 of the Texas
Civil Practice and Remedies Code and Chapter 34 of the Texas Business and
Commerce Code.
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Each Subsidiary Guarantor hereby waives marshaling of assets and liabilities,
notice by either Agent or any Lender of any indebtedness or liability to which
such Lender applies or may apply any amounts received by such Lender, and of the
creation, advancement, increase, existence, extension, renewal, rearrangement or
modification of the Borrower Guaranteed Obligations. Each Subsidiary Guarantor
expressly waives, to the extent permitted by applicable law, the benefit of any
and all laws providing for exemption of property from execution or for valuation
and appraisal upon foreclosure.
SECTION 12.09. Full Force and Effect. This Subsidiary Guarantors Guaranty
is a continuing guaranty and shall remain in full force and effect until all of
the Borrower Guaranteed Obligations under this Agreement and the other Loan
Documents and all other amounts payable under this Subsidiary Guarantors
Guaranty have been paid in full (after the termination of all of the Commitments
and the termination or expiration of all Letters of Credit). All rights,
remedies and powers provided in this Subsidiary Guarantors Guaranty may be
exercised, and all waivers contained in this Subsidiary Guarantors Guaranty may
be enforced, only to the extent that the exercise or enforcement thereof does
not violate any provisions of applicable law which may not be waived.
ARTICLE XIII
MISCELLANEOUS
SECTION 13.01. No Waiver; Remedies. No failure on the part of any Lender or
the Agent to exercise, and no delay in exercising, any right hereunder, under
any Note or under any other Loan Document shall operate as a waiver thereof; nor
shall any single or partial exercise of any such right, or any abandonment or
discontinuance of any steps to enforce such right, preclude any other or further
exercise thereof or the exercise of any other right. No notice to or demand on
any Obligor in any case shall entitle such Obligor to any other or further
notice or demand in similar or other circumstances. The remedies provided herein
and the in the other Loan Documents are cumulative and not exclusive of any
remedies provided by law.
SECTION 13.02. Notices. All notices and other communications provided for
herein, including any modifications of, or waivers or consents under, this
Agreement (collectively, "Communications") shall be given or made on a Business
Day by telecopy (confirmed by mail) or other writing and telecopied or mailed or
delivered to the intended recipient at the "Address for Notices" specified below
its name on the signature pages hereof (or provided for in an Assignment and
Acceptance); or, as to any party hereto, at such other address as shall be
designated by such party in a notice (given in accordance with this Section
13.02) (i) as to either Borrower, to the Agents, (ii) as to the U.S.
Administrative Agent, to the U.S. Borrower and to each U.S. Lender, (iii) as to
the Canadian Agent, to the Canadian Borrower and to each Canadian Lender, (iv)
as to any U.S. Lender, to the U.S. Borrower and the Agents and (v) as to any
Canadian Lender, to the Canadian Borrower and the Agents. Except as otherwise
provided in this Agreement, all such Communications shall be deemed to
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have been duly given when (a) transmitted by telecopier, (b) personally
delivered (c) one Business Day after deposit with an overnight mail or delivery
service, postage prepaid or (d) five Business Days' after deposit in a
receptacle maintained by the United States Postal Service or Canada Post, as the
case may be, postage prepaid, registered or certified mail, return receipt
requested, in each case given or addressed as aforesaid. Notwithstanding the
foregoing, Communications to either Agent pursuant to Article II, Article III,
Article IV or Article X shall not be effective until received by such Agent.
SECTION 13.03. Expenses, Etc. Whether or not any Loan is ever made or any
Bankers' Acceptances ever accepted and purchased or any Letter of Credit ever
issued, Borrowers shall pay or reimburse within 10 days after written demand (a)
either Agent for paying the reasonable fees and expenses of legal counsel to
such Agent, together with the reasonable fees and expenses of each local counsel
to the Agents, in connection with the preparation, negotiation, execution and
delivery of this Agreement (including the exhibits and schedules hereto), the
Security Documents and the other Loan Documents and the making of the Loans and
the acceptance and purchase of Bankers' Acceptances and the issuance of Letters
of Credit hereunder, and any modification, supplement or waiver of any of the
terms of this Agreement, the Letters of Credit or any other Loan Document; (b)
either Agent for any Lien search fees, collateral audit fees, appraisal fees,
survey fees, environmental study fees, and title insurance costs and premiums;
(c) either Agent for reasonable out-of-pocket expenses incurred in connection
with the preparation, documentation, administration and syndication of any of
the Loan Documents (including, without limitation, the advertising, marketing,
printing, publicity, duplicating, mailing and similar expenses) or any of the
Obligations; (d) either Agent or any Lender for paying all transfer, stamp,
documentary or other similar taxes, assessments or charges levied by any
governmental or revenue authority in respect of this Agreement, any Letter of
Credit or any other Loan Document or any other document referred to herein or
therein; (e) any Agent for paying all costs, expenses, taxes, assessments and
other charges incurred in connection with any filing, registration, recording or
perfection of any security interest contemplated by this Agreement, any Security
Document or any document referred to herein or therein, and (f) following the
occurrence and during the continuation of an Event of Default, any Lender or
either Agent for paying all amounts reasonably expended, advanced or incurred by
such Lender or such Agent to protect the Collateral, to collect the Obligations
or to enforce, protect, preserve or defend the rights of the Lenders or the
Agents under this Agreement or any other Loan Document, together with interest
thereon at the Past Due Rate applicable to the U.S. Loans on each such amount
from the due date of payment until the date of reimbursement to such Lender or
such Agent.
SECTION 13.04. Indemnity. (a) The U.S. Borrower shall indemnify the Agent,
the Lenders and each Affiliate thereof and their respective directors, officers,
employees and agents (each such Person being an "Indemnitee") from, and hold
each Indemnitee harmless against, any and all losses, liabilities, claims or
damages (including reasonable legal fees and expenses) to which any Indemnitee
may become subject, insofar as such losses, liabilities, claims or damages arise
out of or result from (i) any actual or proposed use by the U.S. Borrower or
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any Subsidiary of the proceeds of any extension of credit by any Lender
hereunder or (ii) any investigation, litigation or other proceeding (including
any threatened investigation or proceeding) relating to the foregoing or any of
the other Loan Documents, and the U.S. Borrower shall reimburse each Indemnitee,
upon demand for any expenses (including reasonable legal fees) incurred in
connection with any such investigation or proceeding; but excluding any such
losses, liabilities, claims, damages or expenses incurred by reason of the gross
negligence, willful misconduct or unlawful conduct of such Indemnitee.
(b) WITHOUT LIMITING ANY PROVISION OF THIS AGREEMENT, IT IS THE
EXPRESS INTENTION OF THE PARTIES HERETO THAT EACH INDEMNITEE HEREUNDER
SHALL BE INDEMNIFIED AND HELD HARMLESS AGAINST ANY AND ALL LOSSES,
LIABILITIES, CLAIMS OR DAMAGES ARISING OUT OF OR RESULTING FROM THE SOLE OR
CONCURRENT ORDINARY NEGLIGENCE OF SUCH INDEMNITEE. Without prejudice to the
survival of any other obligations of each Borrower hereunder and under the
other Loan Documents to which it is a party, the obligations of each
Borrower under this Section 13.04 shall survive the termination of this
Agreement and the other Loan Documents and the payment of the Obligations
or the assignment of the Notes.
SECTION 13.05. Amendments, Etc. No amendment or modification of this
Agreement, the Notes or any other Loan Document shall in any event be effective
against either Borrower unless the same shall be agreed or consented to in
writing by the applicable Borrower. No amendment, modification or waiver of any
provision of this Agreement, the Notes or any other Loan Document, nor any
consent to any departure by either Borrower therefrom, shall in any event be
effective against the Lenders unless the same shall be agreed or consented to in
writing by the Majority Lenders, and each such waiver or consent shall be
effective only in the specific instance and for the specific purpose for which
given; provided, that no amendment, modification, waiver or consent shall,
unless in writing and signed by each Lender affected thereby, do any of the
following: (a) increase the U.S. Commitment or the Canadian Commitment of any of
the Lenders (or reinstate any termination or reduction of the U. S. Commitment
or the Canadian Commitment) or subject any of the Lenders to any additional
obligations; (b) reduce the principal of, or interest on, any Loan,
Reimbursement Obligation, fee or other amount due hereunder; (c) postpone or
extend the Maturity Date, the Termination Date, the Availability Period or any
scheduled date fixed for any payment of principal of, or interest on, any Loan,
Reimbursement Obligation, fee or other sum to be paid hereunder or waive any
Event of Default described in Section 9.01(a); (d) change the percentage of any
of the U.S. Commitment or the Canadian Commitment or of the aggregate unpaid
principal amount of Obligations, or the percentage of Lenders, which shall be
required for the Lenders or any of them to take any action under this Agreement
(including, to change the definition of "Majority Lenders"); (e) change any
provision contained in Sections 2.02(c), 7.11, 13.03 or 13.04 or this Section
13.05, or (f) release any Person from liability under a guaranty or release all
or substantially all of the security for the Obligations or release Collateral
(exclusive of Collateral with respect to which either Agent is obligated to
provide a release pursuant to this Agreement or any of the other Loan Documents
or by law). Notwithstanding anything in this Section 13.05 to the contrary, no
amendment, modification, waiver or consent shall be made with respect to
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Article X without the consent of the U.S. Administrative Agent to the extent it
affects the U.S. Administrative Agent, as the U.S. Administrative Agent or the
Canadian Agent to the extent it affects the Canadian Agent, as the Canadian
Agent. Subject to the foregoing, the amendment or waiver of any provisions of
Article VI, VII, VIII or IX may be effected with the consent of the Majority
Lenders.
SECTION 13.06. Successors and Assigns. (a) This Agreement shall be binding
upon and inure to the benefit of the Borrowers, the Agents and the Lenders and
their respective successors and assigns; provided, however, that neither
Borrower may assign or transfer any of its rights or obligations hereunder
without the prior written consent of all of the Lenders, and any such assignment
or transfer without such consent shall be null and void. Each Lender may sell
participations to any Person in all or part of any Loan or Bankers' Acceptance,
or all or part of its Notes, U.S. Commitment or Canadian Commitment or interests
in Letters of Credit or Bankers' Acceptances, in which event, without limiting
the foregoing, the provisions of the Loan Documents shall inure to the benefit
of each purchaser of a participation; provided, however, the pro rata treatment
of payments, as described in Section 4.02, shall be determined as if such Lender
had not sold such participation. No Lender that sells one or more participations
to any Person shall be relieved by virtue of such participation from any of its
obligations to the Borrowers under this Agreement. In the event any Lender shall
sell any participation, such Lender shall retain the sole right and
responsibility to enforce the obligations of the Borrowers hereunder and under
the other Loan Documents, including the right to approve any amendment,
modification or waiver of any provision of this Agreement or any other Loan
Document other than amendments, modifications or waivers with respect to (i) any
fees payable hereunder to the Lenders, (ii) the amount of principal or the rate
of interest payable on, or the dates fixed for the scheduled repayment of
principal of, any of the Obligations and (iii) the release of the Liens on all
or substantially all of the Collateral.
(b) Each U.S. Lender may assign to one or more U.S. Lenders or any
other Person all or a portion of its interests, rights and obligations
under this Agreement; provided, however, that (i) the aggregate amount of
the U.S. Commitment of the assigning U.S. Lender subject to each such
assignment shall in no event be less than $10,000,000; provided that such
assigning Lender shall retain at least $5,000,000 of its U.S. Commitment
unless such Lender is assigning all of its U.S. Commitment and (ii) other
than in the case of an assignment to another U.S. Lender (that is, at the
time of the assignment, a party hereto) or to an Affiliate of such U.S.
Lender, Agents and, so long as no Event of Default shall have occurred and
be continuing, the U.S. Borrower must each give its prior written consent,
which consents shall not be unreasonably withheld. Each Canadian Lender may
assign to one or more Canadian Lenders or any other Person all or a portion
of its interests, rights and obligations under this Agreement; provided,
however, that (i) the aggregate amount of the Canadian Commitment of the
assigning Canadian Lender subject to each such assignment shall in no event
be less than $10,000,000; provided that such assigning Lender shall retain
at least $5,000,000 of such Canadian Commitment unless such Lender is
assigning all of its Canadian Commitment and (ii) other than in the case of
an assignment to another Canadian Lender (that is, at the time of the
assignment,
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a party hereto) or to an Affiliate of such Canadian Lender, the Agents
and, so long as no Event of Default shall have occurred and be continuing,
the Canadian Borrower must each give its prior written consent, which
consents shall not be unreasonably withheld. As a condition precedent to
any such assignment, the parties to each such assignment shall execute and
deliver to the applicable Agent, for its acceptance an Assignment and
Acceptance in the form of Exhibit 13.06 hereto (each an "Assignment and
Acceptance") with blanks appropriately completed, together with any Note
or Notes subject to such assignment and a processing and recording fee of
$3,000 paid by the assignee (for which Borrowers will have no liability).
Upon such execution, delivery and acceptance, from and after the effective
date specified in each Assignment and Acceptance, (A) the assignee
thereunder shall be a party hereto and, to the extent provided in such
Assignment and Acceptance, have the rights and obligations of a Lender
hereunder and (B) the Lender thereunder shall, to the extent provided in
such Assignment and Acceptance, be released from its obligations under
this Agreement (and, in the case of an Assignment and Acceptance covering
all or the remaining portion of an assigning Lender's rights and
obligations under this Agreement, such Lender shall cease to be a party
hereto except in respect of provisions of this Agreement which survive
payment of the Obligations and termination of the U.S. Commitment and the
Canadian Commitment).
(c) By executing and delivering an Assignment and Acceptance, the
assignor and assignee thereunder confirm to and agree with each other and
the other parties hereto as follows: (i) other than the representation and
warranty that it is the legal and beneficial owner of the interest being
assigned thereby free and clear of any adverse claim, the applicable
assignor makes no representation or warranty and assumes no responsibility
with respect to any statements, warranties or representations made in or in
connection with this Agreement or any of the other Loan Documents or the
execution, legality, validity, enforceability, genuineness, sufficiency or
value of this Agreement or any of the other Loan Documents or any other
instrument or document furnished pursuant thereto; (ii) the applicable
assignor makes no representation or warranty and assumes no responsibility
with respect to the financial condition of either Borrower or the
performance or observance by either Borrower of any of its obligations
under this Agreement or any of the other Loan Documents or any other
instrument or document furnished pursuant hereto; (iii) the applicable
assignee confirms that it has received a copy of this Agreement and the
other Loan Documents, together with copies of the financial statements
referred to in Section 6.07 and such other documents and information as it
has deemed appropriate to make its own credit analysis and decision to
enter into such Assignment and Acceptance; (iv) the applicable assignee
will, independently and without reliance upon either Agent, the applicable
assignor or any other Lender and based on such documents and information as
it shall deem appropriate at the time, continue to make its own credit
decisions in taking or not taking action under this Agreement and the other
Loan Documents; (v) the applicable assignee appoints and authorizes the
U.S. Administrative Agent or the Canadian Agent, as the case may be, to
take such action as agent on its behalf and to exercise such powers under
this Agreement and the other Loan Documents as are delegated to such Agent
by the terms hereof, together with such powers as are reasonably incidental
thereto; and (vi) the applicable assignee agrees that it will perform in
accordance with their terms all obligations that by the
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terms of this Agreement and the other Loan Documents are required to be
performed by it as a Lender.
(d) The entries in the records of each applicable Agent as to each
Assignment and Acceptance delivered to it and the names and addresses of
the Lenders and the U. S. Commitment and the Canadian Commitment, as the
case may be of, and principal amount of the Obligations owing to, each
Lender from time to time shall be conclusive, in the absence of manifest
error, and Borrowers, Agents and the Lenders may treat each Person the name
of which is recorded in the books and records of the applicable Agent as a
Lender hereunder for all purposes of this Agreement and the other Loan
Documents.
(e) Upon the applicable Agent's receipt of an Assignment and
Acceptance executed by an assigning Lender and the assignee thereunder,
together with any Note or Notes subject to such assignment and the written
consent to such assignment (to the extent consent is required), such Agent
shall, if such Assignment and Acceptance has been completed with blanks
appropriately filled, (i) accept such Assignment and Acceptance, (ii)
record the information contained therein in its records and (iii) give
prompt notice thereof to the applicable Borrower. Within five Business Days
after receipt of notice, the applicable Borrower, at its own expense, shall
execute and deliver to the applicable Agent new Notes payable to the order
of such assignee in the appropriate amounts and, if the assigning Lender
has retained Commitments hereunder, new Notes to the order of the assigning
Lender in the appropriate amounts. Such new Notes shall be dated the
effective date of such Assignment and Acceptance and shall otherwise be in
the forms required hereunder.
(f) Notwithstanding any other provision herein, any Lender may, in
connection with any assignment or participation or proposed assignment or
participation pursuant to this Section 13.06 disclose to the assignee or
participant or proposed assignee or participant, any information relating
to the Obligors furnished to such Lender by or on behalf of any Obligor
subject, however to the provisions of Section 13.07.
(g) Anything in this Section 13.06 to the contrary notwithstanding,
any Lender may at any time, without the consent of either Agent, either
Borrower or any other Person, assign and pledge all or any portion of its
U.S. Commitment or Canadian Commitment and the Obligation owing to it to
any Federal Reserve Bank (and its transferees) as collateral security
pursuant to Regulation A and any Operating Circular issued by such Federal
Reserve Bank. No such assignment shall release the assigning Lender from
its obligations hereunder.
(h) All transfers of any interest in any Note hereunder shall be in
compliance with all federal and state securities laws, if applicable.
Notwithstanding the foregoing sentence, however, the parties to this
Agreement do not intend that any transfer under this Section 13.06 be
construed as a "purchase" or "sale" of a "security" within the meaning of
any applicable federal or state securities laws.
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SECTION 13.07. Confidentiality. Each Lender agrees to exercise its best
efforts to keep any information delivered or made available by any Obligor to it
(including any information obtained pursuant to Section 7.01) which is clearly
indicated to be confidential information, confidential from anyone other than
Persons employed or retained by such Lender who are or are expected to become
engaged in evaluating, approving, structuring or administering the Loans or the
Letters of Credit; provided that nothing herein shall prevent any Lender from
disclosing such information (a) to any other Lender, (b) pursuant to subpoena or
upon the order of any court or administrative agency, (c) upon the request or
demand of any regulatory agency or authority having jurisdiction over such
Lender, (d) which has been publicly disclosed, (e) to the extent reasonably
required in connection with any litigation to which either Agent, any Lender,
any Obligor or their respective Affiliates may be a party, (f) to the extent
reasonably required in connection with the exercise of any remedy hereunder or
under any other Loan Document, (g) to such Lender's legal counsel and
independent auditors and (h) to any actual or proposed participant or assignee
of all or part of its rights hereunder which has agreed in writing to be bound
by the provisions of this Section 13.07. Each Lender will promptly notify the
U.S. Borrower and the Canadian Borrower of any information that it is required
or requested to deliver pursuant to clause (b) or (c) of this Section 13.07 and,
if no Obligor is a party to any such litigation, clause (e) of this Section
13.07.
SECTION 13.08. Survival of Representations and Warranties. All
representations, warranties and covenants contained herein or made in writing by
the Obligors in connection herewith and the other Loan Documents shall survive
the execution and delivery of this Agreement, the Notes and the other Loan
Documents until two years and one day after payment in full of the Obligations
and the termination of the U.S. Commitment and the Canadian Commitment of the
Lenders and the termination or expiration of the Letters of Credit, and will
bind and inure to the benefit of the respective successors and assigns of the
parties hereto, whether so expressed or not, provided, that the undertaking of
the Lenders to make Loans and extend credit to the applicable Borrower and the
undertaking of the Issuers to issue Letters of Credit shall not inure to the
benefit of any successor or assign of such Borrower, except a successor or
assign that becomes such in accordance with, as provided in Section 8.02.
SECTION 13.09. Governing Law. This Agreement, all Notes, the other Loan
Documents and all other documents executed in connection herewith and therewith
and the rights and obligations of the parties hereto and thereto, shall be
deemed to be contracts and agreements executed by the Obligor, the Agents and
the Lenders under the laws of the State of Texas and of the United States of
America and for all purposes shall be construed in accordance with, and governed
by, the laws of said state and, to the extent controlling, of the United States
of America.
SECTION 13.10. Independence of Covenants. All covenants contained in this
Agreement and in the other Loan Documents shall be given independent effect so
that if a particular action or condition is not permitted by any of such
covenants, the fact that such action or condition would be permitted by an
exception to, or otherwise be within the limitations of,
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another covenant, shall not avoid the occurrence of a Default or an Event of
Default if such action is taken or condition exists.
SECTION 13.11. Binding Effect. This Agreement shall become effective on the
Effective Date.
SECTION 13.12. Separability. Should any clause, sentence, paragraph or
Section of this Agreement be judicially declared to be invalid, unenforceable or
void, such decision will not have the effect of invalidating or voiding the
remainder of this Agreement, and the parties hereto agree that the part or parts
of this Agreement so held to be invalid, unenforceable or void will be deemed to
have been stricken herefrom and the remainder will have the same force and
effectiveness as if such part or parts had never been included herein.
SECTION 13.13. Tax Forms; Net Payments. (a) Each U.S. Lender which is
organized under the laws of a jurisdiction outside the United States shall, on
the day of the initial borrowing from each such U.S. Lender hereunder and from
time to time thereafter if requested by the U.S. Borrower or the U.S.
Administrative Agent, provide the U.S. Administrative Agent and the U.S.
Borrower with the forms prescribed by the Internal Revenue Service of the United
States certifying as to such U.S. Lender's status for purposes of determining
exemption from United States withholding taxes with respect to all payments to
be made to such U.S. Lender hereunder and under the other Loan Documents or
other documents satisfactory to such U.S. Lender, the U.S. Borrower and the U.S.
Administrative Agent indicating that all payments to be made to such U.S. Lender
hereunder and under the other Loan Documents are not subject to United States
withholding tax. Unless the U.S. Borrower and the U.S. Administrative Agent
shall have received such forms or such documents indicating that payments to
such U.S. Lender hereunder and under the other Loan Documents are not subject to
United States withholding tax, the U.S. Borrower and the U.S. Administrative
Agent shall be entitled to withhold taxes from such payments at the applicable
statutory rate.
(b) Each Canadian Lender shall be a resident of Canada for purposes of
the Income Tax Act (Canada).
SECTION 13.14. Interest Act (Canada). Whenever interest is calculated on
the basis of a year of 360 or 365 days, for the purposes of the Interest Act
(Canada), the yearly rate of interest which is equivalent to the rate payable
hereunder is the rate payable multiplied by the actual number of days in the
year and divided by 360 or 365, as the case may be. All interest will be
calculated using the nominal rate method and not the effective rate method and
the deemed reinvestment principle shall not apply to such calculations.
SECTION 13.15. Judgment Currency. The obligation of each Borrower to make
payments on any Obligation to the Lenders or to any Agent hereunder in any
currency (the "first currency") shall not be discharged or satisfied by any
tender or recovery pursuant to any judgment expressed in or converted into any
other currency (the "second currency") except to
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the extent to which such tender or recovery shall result in the effective
receipt by the applicable Lender or the applicable Agent of the full amount of
the first currency payable, and accordingly the primary obligation of each
Borrower shall be enforceable as an alternative or additional cause of action
for the purpose of recovery in the second currency of the amount (if any) by
which such effective receipt shall fall short of the full amount of the full
currency payable and shall not be affected by a judgment being obtained for any
other sum due hereunder.
SECTION 13.16. Conflicts Between This Agreement and the Other Loan
Documents. In the event of any conflict between, or inconsistency with, the
terms of this Agreement and the terms of any of the other Loan Documents, the
terms of this Agreement shall control.
SECTION 13.17. Limitation on Charges; Substitute Lenders;
Non-Discrimination. Anything in Sections 3.03(c) or 7.11 notwithstanding:
(a) no Borrower shall be required to pay to any Lender reimbursement
with regard to any costs or expenses described in such Sections, unless
such Lender notifies the applicable Borrower of such costs or expenses
within 90 days after the date paid or incurred;
(b) none of the Lenders shall be permitted to pass through to either
Borrower charges and costs under such Sections on a discriminatory basis
(i.e., which are not also passed through by such Lender to other customers
of such Lender similarly situated where such customer is subject to
documents providing for such pass through); and
(c) if any Lender elects to pass through to either Borrower any
material charge or cost under such Sections or elects to terminate the
availability of LIBOR Borrowings for any material period of time, the
applicable Borrower may, within 60 days after the date of such event and so
long as no Default or Event of Default shall have occurred and be
continuing, elect to terminate such Lender as a party to this Agreement;
provided that, concurrently with such termination such Borrower shall (i)
if Agents and each of the other Lenders shall consent, pay that Lender all
principal, interest and fees and other amounts owed to such Lender through
such date of termination (including all amounts that would be due to such
Lender if such Lender's Loans were prepaid) or (ii) have arranged for an
Eligible Assignee as of such date, to become a substitute Lender for all
purposes under this Agreement in the manner provided in Section 13.06;
provided further that, prior to substitution for any Lender, the applicable
Borrower shall have given written notice to the Agents of such intention
and the Lenders shall have the option, but no obligation, for a period of
10 days after receipt of such notice, to increase their U.S. Commitment or
Canadian Commitment, as the case may be, in order to replace the affected
Lender in lieu of such substitution.
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SECTION 13.18. Limitation of Interest. The Borrowers and the Lenders intend
to strictly comply with all applicable federal and Texas laws, including
applicable usury laws (or the usury laws of any jurisdiction, including Canada,
whose usury laws are deemed to apply to the Notes or any other Loan Documents
despite the intention and desire of the parties to apply the usury laws of the
State of Texas). Accordingly, the provisions of this Section 13.18 shall govern
and control over every other provision of this Agreement or any other Loan
Document which conflicts or is inconsistent with this Section, even if such
provision declares that it controls. As used in this Section, the term
"interest" includes the aggregate of all charges, fees, benefits or other
compensation which constitute interest under applicable law, provided that, to
the maximum extent permitted by applicable law, (a) any non-principal payment
shall be characterized as an expense or as compensation for something other than
the use, forbearance or detention of money and not as interest, and (b) all
interest at any time contracted for, reserved, charged or received shall be
amortized, prorated, allocated and spread, in equal parts during the full term
of the Obligations. In no event shall the Borrowers or any other Person be
obligated to pay, or any Lender have any right or privilege to reserve, receive
or retain, (a) any interest in excess of the maximum amount of nonusurious
interest permitted under the laws of the State of Texas or the applicable laws
(if any) of the United States or of any other applicable jurisdiction, or (b)
total interest in excess of the amount which such Lender could lawfully have
contracted for, reserved, received, retained or charged had the interest been
calculated for the full term of the Obligations at the Ceiling Rate. The daily
interest rates to be used in calculating interest at the Ceiling Rate shall be
determined by dividing the applicable Ceiling Rate per annum by the number of
days in the calendar year for which such calculation is being made. None of the
terms and provisions contained in this Agreement or in any other Loan Document
(including Section 9.01 hereof) which directly or indirectly relate to interest
shall ever be construed without reference to this Section 13.18, or be construed
to create a contract to pay for the use, forbearance or detention of money at an
interest rate in excess of the Ceiling Rate. If the term of any Obligation is
shortened by reason of acceleration of maturity as a result of any Event of
Default or by any other cause, or by reason of any required or permitted
prepayment, and if for that (or any other) reason any Lender at any time,
including but not limited to, the stated maturity, is owed or receives (and/or
has received) interest in excess of interest calculated at the Ceiling Rate,
then and in any such event all of any such excess interest shall be canceled
automatically as of the date of such acceleration, prepayment or other event
which produces the excess, and, if such excess interest has been paid to such
Lender, it shall be credited pro tanto against the then-outstanding principal
balance of the applicable Borrower's obligations to such Lender, effective as of
the date or dates when the event occurs which causes it to be excess interest,
until such excess is exhausted or all of such principal has been fully paid and
satisfied, whichever occurs first, and any remaining balance of such excess
shall be promptly refunded to its payor.
SECTION 13.19. Execution in Counterparts. This Agreement may be executed in
any number of counterparts and by different parties hereto in separate
counterparts, each of which when so executed shall be deemed to be an original
and all of which taken together shall constitute one and the same agreement.
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SECTION 13.20. SUBMISSION TO JURISDICTION. (a) ANY LEGAL ACTION OR
PROCEEDING WITH RESPECT TO THIS AGREEMENT AND THE OTHER LOAN DOCUMENTS MAY BE
BROUGHT IN THE COURTS OF THE STATE OF TEXAS OR OF THE UNITED STATES FOR THE
SOUTHERN DISTRICT OF TEXAS AND, BY EXECUTION AND DELIVERY OF THIS AGREEMENT,
EACH OBLIGOR, EACH AGENT, EACH LENDER AND THE ISSUER HEREBY IRREVOCABLY ACCEPTS
FOR ITSELF AND IN RESPECT OF ITS PROPERTY, UNCONDITIONALLY, THE NON-EXCLUSIVE
JURISDICTION OF THE AFORESAID COURTS WITH RESPECT TO ANY SUCH ACTION OR
PROCEEDING. EACH OBLIGOR, TO THE EXTENT IT IS NOT QUALIFIED TO DO BUSINESS IN
TEXAS, HEREBY IRREVOCABLY DESIGNATES, APPOINTS AND EMPOWERS CT CORPORATION
SYSTEM, INC., WITH OFFICES ON THE DATE HEREOF AT 811 DALLAS STREET, HOUSTON,
TEXAS 77002, AS ITS DESIGNEE, APPOINTEE AND AGENT TO RECEIVE, ACCEPT AND
ACKNOWLEDGE FOR AND ON ITS BEHALF, AND IN RESPECT OF ITS PROPERTY, SERVICE OF
ANY AND ALL LEGAL PROCESS, SUMMONS, NOTICES AND DOCUMENTS WHICH MAY BE SERVED IN
ANY SUCH ACTION OR PROCEEDING. IF FOR ANY REASON SUCH DESIGNEE, APPOINTEE AND
AGENT SHALL CEASE TO BE AVAILABLE TO ACT AS SUCH, EACH SUCH OBLIGOR AGREES TO
DESIGNATE A NEW DESIGNEE, APPOINTEE AND AGENT IN TEXAS ON THE TERMS AND FOR THE
PURPOSES OF THIS PROVISION SATISFACTORY TO THE AGENTS. EACH OBLIGOR FURTHER
IRREVOCABLY CONSENTS TO THE SERVICE OF PROCESS OUT OF ANY OF THE AFOREMENTIONED
COURTS IN ANY SUCH ACTION OR PROCEEDING BY THE MAILING OF COPIES THEREOF BY
REGISTERED OR CERTIFIED MAIL, POSTAGE PREPAID, TO IT AT ITS ADDRESS PROVIDED IN
SECTION 13.02, SUCH SERVICE TO BECOME EFFECTIVE THIRTY DAYS AFTER SUCH MAILING.
NOTHING HEREIN SHALL AFFECT THE RIGHT OF THE AGENT OR ANY LENDER TO SERVE
PROCESS IN ANY OTHER MANNER PERMITTED BY LAW OR TO COMMENCE LEGAL PROCEEDINGS OR
OTHERWISE PROCEED AGAINST ANY OBLIGORS IN ANY OTHER JURISDICTION.
(b) EACH OF THE OBLIGORS HEREBY IRREVOCABLY WAIVES ANY OBJECTION WHICH
IT MAY NOW OR HEREAFTER HAVE TO THE LAYING OF VENUE OF ANY OF THE AFORESAID
ACTIONS OR PROCEEDINGS ARISING OUT OF OR IN CONNECTION WITH THIS AGREEMENT
BROUGHT IN THE COURTS REFERRED TO IN CLAUSE (a) ABOVE AND HEREBY FURTHER
IRREVOCABLY WAIVES, TO THE MAXIMUM EXTENT PERMITTED BY APPLICABLE LAW, AND
AGREES NOT TO PLEAD OR CLAIM IN ANY SUCH COURT THAT ANY SUCH ACTION OR
PROCEEDING BROUGHT IN ANY SUCH COURT HAS BEEN BROUGHT IN AN INCONVENIENT
FORUM.
SECTION 13.21. WAIVER OF JURY TRIAL. EACH OBLIGOR, EACH AGENT, EACH LENDER
AND EACH ISSUER (a) IRREVOCABLY AND
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UNCONDITIONALLY WAIVES, TO THE FULLEST EXTENT PERMITTED BY LAW, TRIAL BY JURY IN
ANY LEGAL ACTION OR PROCEEDING RELATING TO ANY LOAN DOCUMENT AND FOR ANY
COUNTERCLAIM THEREIN; (b) IRREVOCABLY WAIVES, TO THE MAXIMUM EXTENT PERMITTED BY
LAW, ANY RIGHT IT MAY HAVE TO CLAIM OR RECOVER IN ANY SUCH LITIGATION ANY
SPECIAL, EXEMPLARY, PUNITIVE OR CONSEQUENTIAL DAMAGES, OR DAMAGES OTHER THAN, OR
IN ADDITION TO, ACTUAL DAMAGES; (c) CERTIFIES THAT NO PARTY HERETO NOR ANY
REPRESENTATIVE OR COUNSEL FOR ANY PARTY HERETO HAS REPRESENTED, EXPRESSLY OR
OTHERWISE, OR IMPLIED THAT SUCH PARTY WOULD NOT, IN THE EVENT OF LITIGATION,
SEEK TO ENFORCE THE FOREGOING WAIVERS; AND (d) ACKNOWLEDGES THAT IT HAS BEEN
INDUCED TO ENTER INTO THIS AGREEMENT, THE OTHER LOAN DOCUMENTS AND THE
TRANSACTIONS CONTEMPLATED HEREBY AND THEREBY BASED UPON, AMONG OTHER THINGS, THE
MUTUAL WAIVERS AND CERTIFICATIONS CONTAINED IN THIS SECTION.
SECTION 13.22. FINAL AGREEMENT OF THE PARTIES. THIS AGREEMENT (INCLUDING
THE SCHEDULES AND EXHIBITS HERETO), THE NOTES AND THE OTHER LOAN DOCUMENTS
CONSTITUTE A "LOAN AGREEMENT" AS DEFINED IN SECTION 26.02(a) OF THE TEXAS
BUSINESS AND COMMERCE CODE, AND REPRESENT THE FINAL AGREEMENT BETWEEN THE
PARTIES RELATING TO THE SUBJECT MATTER HEREOF AND THEREOF, AND MAY NOT BE
CONTRADICTED BY EVIDENCE OF PRIOR, CONTEMPORANEOUS OR SUBSEQUENT ORAL AGREEMENTS
OF THE PARTIES. THERE ARE NO UNWRITTEN ORAL AGREEMENTS BETWEEN THE PARTIES.
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IN WITNESS WHEREOF, the parties hereto have executed this Agreement as of
the date first above written.
U.S. Borrower:
EVI, INC., a Delaware corporation
By: /s/ JAMES G. KILEY
-------------------------------------------
Name: James G. Kiley
-------------------------------------------
Title: Vice President, Treasurer and Secretary
------------------------------------------
Canadian Borrower:
EVI OIL TOOLS CANADA LTD.,
an Alberta corporation
By: /s/ JAMES G. KILEY
-------------------------------------------
Name: James G. Kiley
-------------------------------------------
Title: Vice President, Treasurer and Secretary
------------------------------------------
Subsidiary Guarantors:
EVI OIL TOOLS, INC., a Delaware corporation
By: /s/ JAMES G. KILEY
-------------------------------------------
Name: James G. Kiley
-------------------------------------------
Title: Vice President, Treasurer and Secretary
------------------------------------------
GRANT PRIDECO, INC., a Delaware corporation
By: /s/ JAMES G. KILEY
-------------------------------------------
Name: James G. Kiley
-------------------------------------------
Title: Vice President, Treasurer and Secretary
------------------------------------------
128
CHANNELVIEW REAL PROPERTY, INC., a
Delaware corporation
By: /s/ JAMES G. KILEY
-------------------------------------------
Name: James G. Kiley
-------------------------------------------
Title: Vice President, Treasurer and Secretary
------------------------------------------
EVI MANAGEMENT, INC., a Delaware corporation
By: /s/ JAMES G. KILEY
-------------------------------------------
Name: James G. Kiley
-------------------------------------------
Title: Vice President, Treasurer and Secretary
------------------------------------------
EVI ARROW, INC., a Delaware corporation
By: /s/ JAMES G. KILEY
-------------------------------------------
Name: James G. Kiley
-------------------------------------------
Title: Vice President, Treasurer and Secretary
------------------------------------------
EVI WATSON PACKERS, INC., a Delaware corporation
By: /s/ JAMES G. KILEY
-------------------------------------------
Name: James G. Kiley
-------------------------------------------
Title: Vice President, Treasurer and Secretary
------------------------------------------
XL SYSTEMS INTERNATIONAL, INC., a
Delaware corporation
By: /s/ JAMES G. KILEY
-------------------------------------------
Name: James G. Kiley
-------------------------------------------
Title: Vice President, Treasurer and Secretary
------------------------------------------
129
EVI INTERNATIONAL, INC., a Delaware corporation
By: /s/ JAMES G. KILEY
-------------------------------------------
Name: James G. Kiley
-------------------------------------------
Title: Vice President, Treasurer and Secretary
------------------------------------------
TA INDUSTRIES, INC., a Delaware corporation
By: /s/ JAMES G. KILEY
-------------------------------------------
Name: James G. Kiley
-------------------------------------------
Title: Vice President, Treasurer and Secretary
------------------------------------------
TEXAS ARAI, INC., a Delaware corporation
By: /s/ JAMES G. KILEY
-------------------------------------------
Name: James G. Kiley
-------------------------------------------
Title: Vice President, Treasurer and Secretary
------------------------------------------
TUBE-ALLOY CAPITAL CORPORATION, a
Texas corporation
By: /s/ JAMES G. KILEY
-------------------------------------------
Name: James G. Kiley
-------------------------------------------
Title: Vice President, Treasurer and Secretary
------------------------------------------
TUBE-ALLOY CORPORATION, a Louisiana corporation
By: /s/ JAMES G. KILEY
-------------------------------------------
Name: James G. Kiley
-------------------------------------------
Title: Vice President, Treasurer and Secretary
------------------------------------------
130
TUBE-ALLOY CORPORATION
INTERNATIONAL, a Texas corporation
By: /s/ JAMES G. KILEY
-------------------------------------------
Name: James G. Kiley
-------------------------------------------
Title: Vice President, Treasurer and Secretary
------------------------------------------
PETROLEUM EQUIPMENT SUPPLY
COMPANY, a Louisiana corporation
By: /s/ JAMES G. KILEY
-------------------------------------------
Name: James G. Kiley
-------------------------------------------
Title: Vice President, Treasurer and Secretary
------------------------------------------
XLS HOLDING, INC., a Texas corporation
By: /s/ JAMES G. KILEY
-------------------------------------------
Name: James G. Kiley
-------------------------------------------
Title: Vice President, Treasurer and Secretary
------------------------------------------
XL SYSTEMS, INC., a Texas corporation
By: /s/ JAMES G. KILEY
-------------------------------------------
Name: James G. Kiley
-------------------------------------------
Title: Vice President, Treasurer and Secretary
------------------------------------------
ERCON INC., a Delaware corporation
By: /s/ JAMES G. KILEY
-------------------------------------------
Name: James G. Kiley
-------------------------------------------
Title: Vice President, Treasurer and Secretary
------------------------------------------
131
VAN DER HORST U.S.A., INC., a Delaware corporation
By: /s/ JAMES G. KILEY
-------------------------------------------
Name: James G. Kiley
-------------------------------------------
Title: Vice President, Treasurer and Secretary
------------------------------------------
CHRISTIANA ACQUISITION, INC., a Wisconsin
corporation
By: /s/ JAMES G. KILEY
-------------------------------------------
Name: James G. Kiley
-------------------------------------------
Title: Vice President, Treasurer and Secretary
------------------------------------------
TRICO INDUSTRIES, INC., a California corporation
By: /s/ JAMES G. KILEY
-------------------------------------------
Name: James G. Kiley
-------------------------------------------
Title: Vice President, Treasurer and Secretary
------------------------------------------
HOUSTON WELL SCREEN COMPANY, a
Texas corporation
By: /s/ JAMES G. KILEY
-------------------------------------------
Name: James G. Kiley
-------------------------------------------
Title: Vice President, Treasurer and Secretary
------------------------------------------
132
U.S. Administrative Agent:
CHASE BANK OF TEXAS,
NATIONAL ASSOCIATION, AS ADMINISTRATIVE AGENT
By: /s/ MONA M. FOCH
--------------------------------------------
Name: Mona M. Foch
-------------------------------------------
Title: Managing Director
------------------------------------------
133
Syndication Agent:
ABN AMRO BANK, N.V., HOUSTON AGENCY,
AS SYNDICATION AGENT
By: /s/ H. GENE SHIELS
----------------------------------------------
Name: Gene Shiels
--------------------------------------------
Title: Vice President
-------------------------------------------
134
Canadian Agent:
THE BANK OF NOVA SCOTIA,
AS CANADIAN AGENT AND DOCUMENTATION AGENT
By: /s/ DOUG FOSTER
----------------------------------------------
Name: Doug Foster
--------------------------------------------
Title: Relationship Manager
-------------------------------------------
135
Lenders:
CHASE BANK OF TEXAS, NATIONAL ASSOCIATION
By: /s/ MONA M. FOCH
----------------------------------------------
Name: Mona M. Foch
--------------------------------------------
Title: Managing Director
-------------------------------------------
707 Travis Street
Houston, Texas 77002
Telecopy No.: (713) 216-4913
Domestic Lending Office
707 Travis Street
Houston, Texas 77002
Eurodollar Lending Office
707 Travis Street
Houston, Texas 77002
U.S. Commitment: $20,000,000
136
THE CHASE MANHATTAN BANK OF CANADA
By: /s/ CHRISTINE CHAN
----------------------------------------------
Name: Christine Chan
--------------------------------------------
Title: Vice President
--------------------------------------------
First Canadian Place
100 King Street West, Suite 6900
Toronto, Ontario M5X1A4
Canada
Attention: Ms. Christine Chan
Telecopy No.: (416) 216-4161
Canadian Commitment: $10,000,000
137
ABN AMRO BANK, N.V.
By: /s/ GENE SHIELS
---------------------------------------
Name: Gene Shiels
------------------------------------
Title: Vice President
-----------------------------------
Three Riverway, Suite 1700
Houston, Texas 77056
Telecopy No.: (713) 621-5801
U.S. Commitment: $20,000,000
138
ABN AMRO BANK CANADA
By: /s/ P. K. CHAN Jane Taylor
-------------------------------------------------
Name: P. K. Chan Jane Taylor
-----------------------------------------------
Title: Vice President Assistant Vice President
----------------------------------------------
2500-65- West Georgia Street
P O Box 11587, Vancouver, BC V6B 4NB
Telecopy No.: (604) 682-2936
Canadian Commitment: $10,000,000
139
THE BANK OF NOVA SCOTIA
By: /s/ W. C. N. ASHBY
-------------------------------------------
Name: W. C. N. Ashby
-----------------------------------------
Title: Senior Manager Loan Operations
----------------------------------------
1100 Louisiana, Suite 3000
Houston, Texas 77002
Telecopy No.: (713) 752-2425
U.S. Commitment: $15,000,000
Canadian Commitment: $15,000,000
140
WELLS FARGO BANK (TEXAS), N.A.
By: /s/ FRANK SCHAGEMAN
-------------------------------------------
Name: Frank Schageman
-----------------------------------------
Title: Vice President & Sr. Relationship Mgr.
----------------------------------------
1000 Louisiana, 3rd Floor
Houston, Texas 77002
Telecopy No.: (713) 250-7912
U.S. Commitment: $25,000,000
Canadian Commitment: $ -0-
141
BANQUE PARIBAS
By: /s/ BRIAN M. MALONE
-------------------------------------------
Name: Brian M. Malone
-----------------------------------------
Title: Managing Director
----------------------------------------
By: /s/ BARTON D. SCHOUEST
-------------------------------------------
Name: Barton D. Schouest
-----------------------------------------
Title: Managing Director
----------------------------------------
1200 Smith Street, Suite 3100
Houston, Texas 77002
Telecopy No.: (713) 659-6915
U.S. Commitment: $17,000,000
142
PARIBAS BANK OF CANADA
By: /s/ MICHAEL GOSSELIN
-------------------------------------------
Name: Michael Gosselin
-----------------------------------------
Title: Director Corporate Finance
By: /s/ EDWARD SPOEL
-------------------------------------------
Name: Edward Spoel
-----------------------------------------
Title: President and C.E.O.
----------------------------------------
Toronto Dominion Centre
Royal Trust Tower, Suite 4100
Toronto, Ontario M5K 1N8
Telecopy No.: (416) 947-0086
Canadian Commitment: $ 5,000,000
143
THE BANK OF TOKYO-MITSUBISHI, LTD. HOUSTON AGENCY
By: /s/ JOHN W. MCGHEE
-------------------------------------------
Name: John W. McGhee
-----------------------------------------
Title: Vice President & Manager
----------------------------------------
1100 Louisiana, Suite 2800
Houston, Texas 77002
Telecopy No.: (713) 658-0116
U.S. Commitment: $11,000,000
Canadian Commitment: $ -0-
144
THE UNION BANK OF CALIFORNIA, N.A.
By: /s/ DENTON FOLKES
-------------------------------------------
Name: Denton Folkes
-----------------------------------------
Title: Senior Vice President
----------------------------------------
550 South Hope Street, Third Floor
Los Angeles, California 90071
Telecopy No.: (213) 243-3552
U.S. Commitment: $11,000,000
Canadian Commitment: $ -0-
145
FIRST NATIONAL BANK OF COMMERCE
By: /s/ NEMESIO J. VISO
-------------------------------------------
Name: Nemesio J. Viso
-----------------------------------------
Title: Vice President
----------------------------------------
First National Bank of Commerce
201 St. Charles Avenue, 28th Floor
New Orleans, Louisiana 70170
Telecopy No.: (504) 623-1316
U.S. Commitment: $13,000,000
Canadian Commitment: $ -0-
146
CORESTATES BANK, N.A.
By: /s/ SCOTT HUFFMAN
-------------------------------------------
Name: Scott Huffman
-----------------------------------------
Title: Vice President
----------------------------------------
1339 Chestnut Street
Philadelphia, Pennsylvania 19101-7618
Telecopy No.: (215) 973-6745
U.S. Commitment: $13,000,000
Canadian Commitment: $ -0-
147
CREDIT LYONNAIS NEW YORK BRANCH
By: /s/ PHILLIPE SOUSTRA
-------------------------------------------
Name: Phillipe Soustra
-----------------------------------------
Title: Senior Vice President
----------------------------------------
1301 Avenue of the Americas
New York, New York 10019
With notices to:
Credit Lyonnais
Houston Representative Office
1000 Louisiana, Suite 5360
Houston, Texas 77002
Attention: Mr. C. Page Dillehunt
U.S. Commitment: $ 8,000,000
148
CREDIT LYONNAIS CANADA
By: /s/ WILHELM K. MORO
--------------------------------------------------
Name: Wilhelm K. Moro
-----------------------------------------------
Title: First Vice-President, Manager, Western Region
----------------------------------------------
300 Fifth Avenue SW, Suite 2050
The Stock Exchange Tower
Calgary, Alberta T2P 3C4
Telecopy No.: (403) 263-4095
Canadian Commitment: $ 5,000,000
149
DG BANK DEUTSCHE GENOSSENSCHAFTSBANK
By: /s/ MARK CONNELLY
-------------------------------------------
Name: Mark Connelly
-----------------------------------------
Title: Vice President
----------------------------------------
By: /s/ PAMELA D. INGRAM
-------------------------------------------
Name: Pamela D. Ingram
-----------------------------------------
Title: Assistant Vice President
----------------------------------------
609 Fifth Avenue
New York, New York 10017-1021
Telecopy No.: (212) 745-1550
U.S. Commitment: $13,000,000
Canadian Commitment: $ -0-
150
THE FIRST NATIONAL BANK OF CHICAGO
By: /s/ HELEN A. CARR
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Name: Helen A. Carr
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Title: Attorney in Fact
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1100 Louisiana, Suite 3200
Houston, Texas 77002
Telecopy No.: (713) 654-7370
U.S. Commitment: $ 8,000,000
FIRST CHICAGO NBD BANK, CANADA
By: /s/ HELEN A. CARR
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Name: Helen A. Carr
-----------------------------------------
Title: Attorney In Fact
----------------------------------------
1100 Louisiana, Suite 3200
Houston, Texas 77002
Telecopy No.: (713) 654-7370
Canadian Commitment: $ 5,000,000
151
HIBERNIA NATIONAL BANK
By: /s/ TAMMY ANGELETY
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Name: Tammy Angelety
-----------------------------------------
Title: Assistant Vice President
----------------------------------------
313 Carondelet Street
New Orleans, Louisiana 70130
Telecopy No.: (504) 533-5434
U.S. Commitment: $13,000,000
Canadian Commitment: $ -0-
152
NATEXIS BANQUE - BFCE
By: /s/ MARK A. HARRINGTON
-------------------------------------------
Name: Mark A. Harrington
-----------------------------------------
Title: Vice President and Regional Manager
----------------------------------------
By: /s/ JOHN THIEROFF
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Name: John Thieroff
-----------------------------------------
Title: Vice President
----------------------------------------
333 Clay Street, Suite 4340
Houston, Texas 77002
Telecopy No.: (713) 759-9908
with a copy to:
New York Branch
645-5th Avenue, 20th Floor
New York, New York 10022
Attn: Joan Rankine
U.S. Commitment: $13,000,000
Canadian Commitment: $ -0-
153
FORM OF U.S. NOTE
$ , 199
---------------------- ----------------------
FOR VALUE RECEIVED, EVI, INC., a Delaware corporation, ("Maker"), promises
to pay to the order of ____________________ _________________________ ("Payee"),
at the principal office of Chase Bank of Texas, National Association, 712 Main
Street, Houston, Texas 77002, in immediately available funds and in lawful money
of the United States of America, the principal sum of
_____________________________________ DOLLARS ($__________) (or the unpaid
balance of all principal advanced against this note, if that amount is less),
together with interest on the unpaid principal of this note from time to time
outstanding at a rate or rates provided in that certain Credit Agreement (as it
may be amended, supplemented or restated from time to time, the "Credit
Agreement") dated as of February 17, 1998, by and among Maker, as the U.S.
Borrower, EVI Oil Tools Canada Ltd., an Alberta corporation, as the Canadian
Borrower, the Subsidiary Guarantors named therein, the Lenders named therein,
Chase Bank of Texas, National Association, as the U.S. Administrative Agent and
The Bank of Nova Scotia, as the Canadian Agent. Any term defined in the Credit
Agreement which is used herein and not otherwise defined in this note shall have
the same meaning ascribed to it in the Credit Agreement.
1. Credit Agreement; Advances; Security. This note has been issued pursuant
to the terms of the Credit Agreement, and is one of the U.S. Notes referred to
in the Credit Agreement. Advances against this note by Payee or other holder
hereof shall be governed by the terms and provisions of the Credit Agreement.
Reference is hereby made to the Credit Agreement for all purposes. Payee is
entitled to the benefits of and security provided for in the Security Documents.
The unpaid principal balance of this note at any time shall be the total of all
amounts lent or advanced against this note less the amount of all payments or
prepayments made on this note and by or for the account of Maker. All Loans and
advances and all payments and prepayments made hereon may be endorsed by the
holder of this note on a schedule which may be attached hereto (and thereby made
a part hereof for all purposes) or otherwise recorded in the holder's records;
provided, that any failure to make notation of (a) any Loan or advance shall not
cancel, limit or otherwise affect Maker's obligations or any holder's rights
with respect to that Loan or advance, or (b) any payment or prepayment of
principal shall not cancel, limit or otherwise affect Maker's entitlement to
credit for that payment as of the date received by the holder.
2. Mandatory Payments of Principal and Interest. (a) Accrued and unpaid
interest on the unpaid principal balance of this note shall be due and payable
on the Interest Payment Dates.
154
(b) On the Termination Date, the entire unpaid principal balance of this
note and all accrued and unpaid interest on the unpaid principal balance of this
note shall be finally due and payable.
(c) All payments hereon made pursuant to this Paragraph shall be applied
first to accrued interest, the balance to principal.
(d) The Credit Agreement provides for required prepayments of the
indebtedness evidenced hereby upon terms and conditions specified therein.
3. No Usury Intended; Spreading. Notwithstanding any provision to the
contrary contained in this note or any other Loan Documents, it is expressly
provided that in no case or event shall the aggregate of (a) all interest on the
unpaid balance of this note, accrued or paid from the date hereof and (b) the
aggregate of any Additional Interest, ever exceed the Ceiling Rate. In this
connection, Maker and Payee stipulate and agree that it is their common and
overriding intent to contract in strict compliance with applicable federal and
Texas usury laws (and the usury laws of any other jurisdiction whose usury laws
are deemed to apply to this note or any of the other Loan Documents despite the
intention and desire of the parties to apply the usury laws of the State of
Texas). In furtherance hereof, none of the terms of this note or any of the
other Loan Documents shall ever be construed to create a contract to pay, as
consideration for the use, forbearance or detention of money, interest at a rate
in excess of the Ceiling Rate. Maker or other parties now or hereafter becoming
liable for payment of the indebtedness evidenced by this note shall never be
liable for interest in excess of the Ceiling Rate. If, for any reason whatever,
the interest paid or received on this note during its full term produces a rate
which exceeds the Ceiling Rate, the holder of this note shall credit against the
principal of this note (or, if such indebtedness shall have been paid in full,
shall refund to the payor of such interest) such portion of said interest as
shall be necessary to cause the interest paid on this note to produce a rate
equal to the Ceiling Rate. All sums paid or agreed to be paid to the holder of
this note for the use, forbearance or detention of the indebtedness evidenced
hereby shall, to the extent permitted by applicable law, be amortized, prorated,
allocated and spread in equal parts throughout the full term of this note, so
that the interest rate is uniform throughout the full term of this note. The
provisions of this Paragraph shall control all agreements, whether now or
hereafter existing and whether written or oral, between Maker and Payee.
4. Default. The Credit Agreement provides for the acceleration of the
maturity of this note and other rights and remedies upon the occurrence of
certain events specified therein.
5. Waivers by Maker and Others. Except to the extent, if any, that notice
of default is expressly required herein or in the other Loan Documents, Maker
and any and all co-makers, endorsers, guarantors and sureties severally waive
notice (including, but not limited to, notice of intent to accelerate and notice
of acceleration, notice of protest and notice of dishonor), demand, presentment
for payment, protest, diligence in collecting and the filing of suit for the
purpose of fixing liability and consent that the time of payment hereof may be
extended and re-
155
extended from time to time without notice to any of them. Each such Person
agrees that its liability on or with respect to this note shall not be affected
by any release of or change in any guaranty or security at any time existing or
by any failure to perfect or to maintain perfection of any lien against or
security interest in any such security or the partial or complete
unenforceability of any guaranty or other surety obligation, in each case in
whole or in part, with or without notice and before or after maturity.
6. Paragraph Headings. Paragraph headings appearing in this note are for
convenient reference only and shall not be used to interpret or limit the
meaning of any provision of this note.
7. Choice of Law. THIS NOTE SHALL BE GOVERNED AND CONSTRUED IN ACCORDANCE
WITH THE APPLICABLE LAWS OF THE STATE OF TEXAS AND THE UNITED STATES OF AMERICA.
8. Successors and Assigns. This note and all the covenants and agreements
contained herein shall be binding upon, and shall inure to the benefit of, the
respective legal representatives, heirs, successors and assigns of Maker and
Payee.
9. Records of Payments. The records of Payee shall be prima facie evidence
of the amounts owing on this note.
156
10. Severability. If any provision of this note is held to be illegal,
invalid or unenforceable under present or future laws, the legality, validity
and enforceability of the remaining provisions of this note shall not be
affected thereby, and this note shall be liberally construed so as to carry out
the intent of the parties to it.
11. Revolving Loans. Subject to the terms and provisions of the Credit
Agreement, Maker may use all or any part of the credit provided to be evidenced
by this note at any time before the Termination Date. Maker may borrow, repay
and reborrow hereunder, and except as set forth in the Credit Agreement there is
no limitation on the number of advances made hereunder. Pursuant to Article
15.10(b) of Chapter 15 ("Chapter 15") of Title 79, Texas Revised Civil Statutes,
1925, as amended, Maker and Payee expressly agree that Chapter 15 shall not
apply to this note or to any Loan evidenced by this note and that neither this
note nor any such Loan shall be governed by or subject to the provisions of
Chapter 15 in any manner whatsoever.
12. Business Loans. Maker warrants and represents to Payee and all other
holders of this note that all loans evidenced by this note are and will be for
business, commercial, investment or other similar purpose and not primarily for
personal, family, household or agricultural use, as such terms are used in
Chapter One.
EVI, INC., a Delaware corporation
By:
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Name:
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Title:
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