EXHIBIT 10.25
EXECUTION COPY
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CELADON GROUP, INC.
CELADON TRUCKING SERVICES, INC.
TRUCKERSB2B, INC.
as Domestic Borrowers
CELADON CANADA, INC.
as Canadian Borrower
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LOAN AND SECURITY AGREEMENT
Dated: September 26, 2002
$55,000,000
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FLEET CAPITAL CORPORATION
Individually and as Administrative Agent
FLEET CAPITAL CANADA CORPORATION
Individually and as Canadian Agent
THE LENDERS NAMED HEREIN
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TABLE OF CONTENTS
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SECTION 1. CREDIT FACILITY...................................................1
1.1 Revolving Credit Facility. .........................................1
1.2 Letters of Credit; LC Guaranties. ..................................4
1.3 Term Loan Subfacilities. ...........................................5
SECTION 2. INTEREST, FEES AND CHARGES .......................................6
2.1 Interest. ..........................................................6
2.2 Computation of Interest and Fees. ..................................8
2.3 Fee Letter..........................................................8
2.4 Letter of Credit and LC Guaranty Fees...............................8
2.5 Unused Line Fee. ...................................................9
2.6 Canadian Participation Fee. ........................................9
2.7 Prepayment Fee. ....................................................9
2.8 Audit Fees. ........................................................9
2.9 Reimbursement of Expenses. ........................................10
2.10 Bank Charges. .....................................................11
2.11 Collateral Protection Expenses; Appraisals. .......................11
2.12 Payment of Charges. ...............................................12
2.13 Taxes. ............................................................12
SECTION 3. LOAN ADMINISTRATION..............................................17
3.1 Manner of Borrowing Loans. ........................................17
3.2 Payments. .........................................................25
3.3 Mandatory and Optional Prepayments. ...............................29
3.4 Application of Payments and Collections. ..........................33
3.5 All Loans to Constitute One Obligation. ...........................35
3.6 Loan Account. .....................................................35
3.7 Statements of Account. ............................................36
3.8 Sharing of Payments, Etc. .........................................36
3.9 Increased Costs. ..................................................37
3.10 Basis for Determining Interest Rate Inadequate or Unfair. .........38
SECTION 4. TERM AND TERMINATION ............................................39
4.1 Term of Agreement..................................................39
4.2 Termination. ......................................................39
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SECTION 5. SECURITY INTERESTS...............................................40
5.1 Security Interest in Collateral....................................40
5.2 Other Collateral. .................................................44
5.3 Lien Perfection; Further Assurances. ..............................45
5.4 Lien on Realty.....................................................46
SECTION 6. COLLATERAL ADMINISTRATION .......................................46
6.1 General. ..........................................................46
6.2 Administration of Accounts. .......................................48
6.3 [Intentionally Omitted]............................................50
6.4 Administration of Equipment. ......................................50
SECTION 7. REPRESENTATIONS AND WARRANTIES...................................51
7.1 General Representations and Warranties. ...........................51
7.2 Continuous Nature of Representations and Warranties. ..............61
7.3 Survival of Representations and Warranties. .......................61
SECTION 8. COVENANTS AND CONTINUING AGREEMENTS .............................62
8.1 Affirmative Covenants. ............................................62
8.2 Negative Covenants. ...............................................69
8.3 Specific Financial Covenants. .....................................74
SECTION 9. CONDITIONS PRECEDENT ............................................74
9.1 Documentation......................................................74
9.2 No Default. .......................................................74
9.3 Other Conditions. .................................................75
9.4 No Litigation......................................................75
9.5 Material Adverse Effect. ..........................................75
9.6 Fees. .............................................................75
9.7 Collateral. .......................................................75
9.8 Diligence..........................................................75
9.9 Corporate Matters. ................................................76
9.10 Environmental Matters. ............................................76
9.11 Insurance..........................................................76
9.12 Legal Opinions.....................................................76
9.13 Reference Checks. .................................................76
9.14 Financial Statements. .............................................76
9.15 Updated Audit......................................................77
9.16 Personal Reference and Background Checks...........................77
9.17 Costs and Expenses. ...............................................77
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9.18 Representations and Warranties. ...................................77
SECTION 10. EVENTS OF DEFAULT; RIGHTS AND REMEDIES ON DEFAULT ..............77
10.1 Events of Default. ................................................77
10.2 Acceleration of the Obligations....................................81
10.3 Other Remedies.....................................................81
10.4 Set Off and Sharing of Payments....................................83
10.5 Remedies Cumulative; No Waiver. ....................................84
SECTION 11. THE ADMINISTRATIVE AGENT AND THE CANADIAN AGENT ................85
11.1 Authorization and Action. .........................................85
11.2 Administrative Agent's and Canadian Agent's Reliance, Etc. ........86
11.3 Fleet and Affiliates. .............................................87
11.4 Lender Credit Decision. ...........................................87
11.5 Indemnification. ..................................................88
11.6 Rights and Remedies to be Exercised by Administrative
Agent and Canadian Agent Only. ....................................88
11.7 Agency Provisions Relating to Collateral. .........................89
11.8 Administrative Agent's and Canadian Agent's Right to
Purchase Commitments. .............................................90
11.9 Right of Sale, Assignment, Participations. ........................90
11.10 Amendment. ........................................................92
11.11 Resignation of Administrative Agent or Canadian Agent;
Appointment of Successor...........................................92
SECTION 12. MISCELLANEOUS. .................................................93
12.1 Power of Attorney. ................................................93
12.2 Indemnity. ........................................................95
12.3 Sale of Interest. .................................................95
12.4 Severability. .....................................................95
12.5 Successors and Assigns. ...........................................95
12.6 Cumulative Effect; Conflict of Terms. .............................96
12.7 Execution in Counterparts. ........................................96
12.8 Notices. ..........................................................96
12.9 Consent. ..........................................................97
12.10 Credit Inquiries. .................................................98
12.11 Time of Essence. ..................................................98
12.12 Entire Agreement. .................................................98
12.13 Interpretation.....................................................98
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12.14 Confidentiality. ..................................................98
12.15 Judgment...........................................................98
12.16 GOVERNING LAW; CONSENT TO FORUM. ..................................99
12.17 WAIVERS BY BORROWERS..............................................100
12.18 Joint and Several. ...............................................101
12.19 Further Assurances................................................101
12.20 Interest Act (Canada). ...........................................102
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LOAN AND SECURITY AGREEMENT
THIS LOAN AND SECURITY AGREEMENT is made as of September 26, 2002, by and
among FLEET CAPITAL CORPORATION ("Fleet"), a Rhode Island corporation with an
office at 15260 Ventura Boulevard, Suite 400, Sherman Oaks, California 91403,
individually as a Lender and as administrative agent ("Administrative Agent")
for itself and any other financial institution which is or becomes a party
hereto (each such financial institution, including Fleet, Fleet Canada (as
defined below) as the Canadian Lender, and each Canadian Participating Lender
(as defined in Appendix A attached hereto), is referred to hereinafter
individually as a "Lender" and collectively as the "Lenders"), FLEET CAPITAL
CANADA CORPORATION ("Fleet Canada"), a Canadian corporation with an office at
300 The East Mall, Suite 120, Toronto, Ontario M9B 6B7 Canada, individually as
the Canadian Lender and as Canadian agent ("Canadian Agent") for itself, the
Canadian Lender and any other financial entity which is or becomes a Canadian
Participating Lender, the LENDERS, CELADON GROUP, INC., a Delaware corporation
with its chief executive office and principal place of business at One Celadon
Drive, Indianapolis, Indiana 46235-4207 ("CGI"), CELADON TRUCKING SERVICES,
INC., a New Jersey corporation with its chief executive office and principal
place of business at One Celadon Drive, Indianapolis, Indiana 46235-4207
("CTSI"), TRUCKERSB2B, INC., a Delaware corporation with its chief executive
office and principal place of business at One Celadon Drive, Indianapolis,
Indiana 46235-4207 ("TB2B" and, together with CGI and CTSI, "Domestic
Borrowers"), and CELADON CANADA, INC., an Ontario corporation with a place of
business at 280 Shoemaker Street, Kitchener, Ontario N2E 3EI ("Canadian
Borrower", and together with Domestic Borrowers, "Borrowers"). Capitalized terms
used in this Agreement have the meanings assigned to them in Appendix A, General
Definitions. Accounting terms not otherwise specifically defined herein shall be
construed in accordance with GAAP consistently applied.
SECTION 1. CREDIT FACILITY
Subject to the terms and conditions of, and in reliance upon the
representations and warranties made in, this Agreement and the other Loan
Documents, Lenders agree to make a total credit facility of up to $55,000,000
available upon Borrowers' request therefor, as follows:
1.1 Revolving Credit Facility.
1.1.1 Domestic Revolving Credit Loans. Each Lender having a Domestic
Revolving Credit Commitment (each, a "Domestic Lender") agrees, severally
and not jointly, for so long as no Default or Event of Default exists, to
make loans denominated in U.S. Dollars (such loans relative to such Lender, its
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"Domestic Revolving Credit Loans") to Domestic Borrowers from time to time
during the period from the date hereof to but not including the last day of the
Term, as requested by Borrower Representative in the manner set forth in Section
3.1.1(a) hereof, provided, that no Domestic Revolving Credit Loan shall be made
if, after giving effect to the making of such Loan and the simultaneous
application of the proceeds thereof, (a) the amount of the Domestic Revolving
Credit Exposure of such Lender would exceed such Lender's Domestic Revolving
Credit Commitment minus the outstanding principal amount of that portion of the
Domestic Term Loan owing to such Lender minus such Lender's Canadian Percentage
of the Dollar Equivalent of the aggregate principal amount of the outstanding
Canadian Revolving Credit Loans minus such Lender's Canadian Percentage of the
Dollar Equivalent of the outstanding principal amount of the Canadian Term Loan
minus such Lender's Domestic Revolving Loan Percentage of reserves, if any, (b)
the aggregate amount of the Domestic Revolving Credit Exposure of all the
Domestic Lenders would exceed the Domestic Borrowing Base then in effect minus
reserves, if any, or (c) the aggregate amount of the Domestic Revolving Credit
Exposure of all the Domestic Lenders would exceed the Revolving Credit Maximum
Amount minus the outstanding principal amount of the Domestic Term Loan minus
the Dollar Equivalent of the aggregate principal amount of the outstanding
Canadian Revolving Credit Loans minus the Dollar Equivalent of the outstanding
principal amount of the Canadian Term Loan minus reserves, if any. Domestic
Revolving Credit Loans may be borrowed as Base Rate Loans or LIBOR Loans.
Amounts borrowed under this Section 1.1.1 may be repaid in whole or in part and,
up to but excluding the last day of the Term, reborrowed, all in accordance with
the terms and conditions hereof. The Domestic Revolving Credit Loans shall be
further evidenced by, and repayable in accordance with the terms of, the
applicable Revolving Notes and shall be secured by all of the Domestic
Collateral.
1.1.2 Canadian Revolving Credit Loans.
(a) Subject to the terms and conditions hereof, the Canadian Lender
agrees, for so long as no Default or Event of Default exists, to make loans
to Canadian Borrower denominated in U.S. Dollars or Canadian Dollars (each
such loan or extension of credit, a "Canadian Revolving Credit Loan") from
time to time during the period from the date hereof to but not including
the last day of the Term, as requested by the Borrower Representative in
the manner set forth in Section 3.1.1(b) hereof; provided that no Canadian
Revolving Credit Loan shall be made if, after giving effect to the making
of such Loan and the simultaneous application of the proceeds thereof, (i)
with respect to each Lender, the amount of the Domestic Revolving Credit
Exposure of such Lender would exceed such Lender's Domestic Revolving
Credit Commitment minus the outstanding principal amount of that portion of
the Domestic Term Loan owing to such Lender minus such Lender's Canadian
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Percentage of the Dollar Equivalent of the aggregate principal amount of
the outstanding Canadian Revolving Credit Loans minus such Lender's
Canadian Percentage of the Dollar Equivalent of the outstanding principal
amount of the Canadian Term Loan minus such Lender's Domestic Revolving
Loan Percentage of reserves, if any, (ii) the aggregate amount of the
Canadian Revolving Credit Exposure of the Canadian Lender would exceed the
Canadian Borrowing Base then in effect minus reserves, if any, or (iii) the
aggregate amount of the Domestic Revolving Credit Exposure of all the
Lenders would exceed the Revolving Credit Maximum Amount minus the
outstanding principal amount of the Domestic Term Loan minus the Dollar
Equivalent of the aggregate principal amount of the outstanding Canadian
Revolving Credit Loans minus the Dollar Equivalent of the outstanding
principal amount of the Canadian Term Loan minus reserves, if any. Canadian
Revolving Credit Loans may be borrowed as Canadian Base Rate Loans or
Canadian Fixed Rate Loans. The Canadian Revolving Credit Loans shall be
further evidenced by, and repayable in accordance with the terms of, the
applicable Revolving Note and shall be secured by all of the Canadian
Collateral and the Domestic Collateral. Amounts borrowed under this Section
1.1.2 may be repaid in whole or in part and, up to but excluding the last
day of the Term, reborrowed, all in accordance with the terms and
conditions hereof. Upon the making of each such Canadian Revolving Credit
Loan and subject to Section 3.2.6, each Canadian Participating Lender shall
be deemed to have irrevocably and unconditionally purchased from the
Canadian Lender, without recourse or warranty, an undivided interest and
participation in each Canadian Revolving Credit Loan to the extent of such
Canadian Participating Lender's Canadian Percentage thereof.
(b) The Administrative Agent will determine the Dollar Equivalent
amount with respect to any (i) Canadian Revolving Credit Loans as of the
requested borrowing date, and (ii) outstanding Canadian Revolving Credit
Loans as of the last Business Day of each month, or on such earlier date
during such month as the Administrative Agent reasonably believes
necessary, for all other purposes under this Agreement where the
determination of a Dollar Equivalent is required to be made.
1.1.3 Use of Proceeds. The Revolving Credit Loans shall be used by
Borrowers solely for (a) the satisfaction of certain existing Indebtedness
of Borrowers identified on Exhibit 1.1.3 hereto, (b) for the general
operating capital needs of Borrowers in a manner consistent with the
provisions of this Agreement and all applicable laws, and (c) for other
purposes permitted under this Agreement.
1.1.4 Reserves. Administrative Agent shall have the right to establish
reserves in such amounts, and with respect to such matters, as Administrative
Agent shall reasonably deem necessary or appropriate, against the amount of
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Revolving Credit Loans which Borrowers may otherwise request under this Section
1.1 with respect to (a) price adjustments, damages, unearned discounts, returned
products or other matters for which credit memoranda are issued in the ordinary
course of Borrowers' businesses; (b) other sums chargeable against Borrowers'
Loan Accounts as Revolving Credit Loans under any section of this Agreement; and
(c) such other specific events, conditions or contingencies as to which
Administrative Agent, in its reasonable credit judgment, determines reserves
should be established from time to time hereunder. Notwithstanding the
foregoing, Administrative Agent shall not establish any reserves in respect of
any matters relating to any items of Collateral that have been taken into
account in determining Eligible Accounts.
1.2 Letters of Credit; LC Guaranties.
Administrative Agent agrees, for so long as no Default or Event of Default
exists and if requested by Borrower Representative, to (a) issue its, or cause
to be issued by Bank or another Affiliate of Administrative Agent, Letters of
Credit for the account of a Domestic Borrower on the date requested by Borrower
Representative or (b) execute LC Guaranties, by which Bank, or another Affiliate
of Administrative Agent, on the date requested by Borrower Representative, shall
guaranty the payment or performance by a Domestic Borrower of its reimbursement
obligations with respect to Letters of Credit, provided that the LC Amount shall
not exceed $10,000,000 at any time. No Letter of Credit or LC Guaranty may have
an expiration date that is more than one year from the date of issuance thereof,
which expiration date may be extended for additional periods of up to one year,
subject to the immediately following sentence. No Letter of Credit or LC
Guaranty may have an expiration date that is after 30 days prior to the last day
of the Term. Each Letter of Credit shall be denominated in U.S. Dollars.
Notwithstanding anything to the contrary contained herein, Domestic Borrowers,
Administrative Agent and Domestic Lenders hereby agree that all LC Obligations
and all obligations of Domestic Borrowers relating thereto shall be satisfied by
the prompt issuance of one or more Domestic Revolving Credit Loans that are Base
Rate Loans, which Domestic Borrowers hereby acknowledge are requested and
Domestic Lenders hereby agree to fund. In the event that Domestic Revolving
Credit Loans are not, for any reason, promptly made to satisfy all then existing
LC Obligations, each Domestic Lender hereby agrees to pay to Administrative
Agent, on demand, an amount equal to such LC Obligations multiplied by such
Domestic Lender's Domestic Revolving Loan Percentage, and until so paid, such
amount shall be secured by the Domestic Collateral and shall bear interest and
be payable at the same rate and in the same manner as Base Rate Loans.
Immediately upon the issuance of a Letter of Credit or an LC Guaranty under this
Agreement, each Domestic Lender shall be deemed to have irrevocably and
unconditionally purchased and received from Administrative Agent, without
recourse or warranty, an undivided interest and
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participation therein equal to such LC Amount or LC Obligations multiplied by
such Domestic Lender's Domestic Revolving Loan Percentage.
1.3 Term Loan Subfacilities.
1.3.1 Domestic Term Loan Subfacility. Each Domestic Lender, severally
and not jointly, agrees to make a term loan to CGI consisting of two advances,
in the aggregate principal amount of such Domestic Lender's Domestic Term Loan
Commitment (collectively, the "Domestic Term Loan"), as follows: (a) the first
Domestic Term Loan advance shall be in the aggregate principal amount of
$9,593,080 and shall be made on the Closing Date; and (b) the second Domestic
Term Loan advance (the "Second Domestic Term Loan Advance") shall be in the
aggregate principal amount of up to $344,000 and shall be made at Borrower's
request, pursuant to the borrowing procedures set forth in Section 3.1.1(a)
applicable to Domestic Revolving Credit Loans, on or before the date which is
ninety (90) days after the Closing Date, provided that, prior to the date of the
Second Domestic Term Loan Advance, the Administrative Agent shall have received
a Phase II environmental assessment, satisfactory to the Administrative Agent in
its sole discretion, with respect to the Owned Properties located in Denton,
Texas and Horizon City, Texas. The Domestic Term Loan shall be repayable in
accordance with the terms of the applicable Term Notes and shall be secured by
all of the Domestic Collateral. The Domestic Term Loan shall constitute a
subfacility under the Domestic Revolving Credit Loans facility, and the proceeds
of the Domestic Term Loan shall be used solely for the purposes for which the
proceeds of the Domestic Revolving Credit Loans are authorized to be used.
1.3.2 Canadian Term Loan Subfacility. Canadian Lender agrees to make
a term loan (the "Canadian Term Loan") to Canadian Borrower on the Closing Date,
in the original principal amount of $862,920.00, which shall be repayable in
accordance with the terms of the applicable Term Note and shall be secured by
all of the Domestic Collateral and all of the Canadian Collateral. The Canadian
Term Loan shall constitute a subfacility under the Canadian Revolving Credit
Loans facility, and the proceeds of the Canadian Term Loan shall be used solely
to repay an intercompany loan owed by Canadian Borrower to CGI, and CGI will on
the Closing Date use such proceeds for partial repayment on the Closing Date of
the outstanding ING Indebtedness. Upon the making of the Canadian Term Loan and
subject to Section 3.2.6, each Canadian Participating Lender shall be deemed to
have irrevocably and unconditionally purchased from the Canadian Lender, without
recourse or warranty, an undivided interest and participation in the Canadian
Term Loan to the extent of such Canadian Participating Lender's Canadian
Percentage thereof.
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SECTION 2. INTEREST, FEES AND CHARGES
2.1 Interest.
2.1.1 Rates of Interest.
(a) Interest shall accrue on the principal amount of the Base Rate
Loans outstanding at the end of each day at a fluctuating rate per annum equal
to the Applicable Margin then in effect plus the Base Rate. Such rate of
interest shall increase or decrease by an amount equal to any increase or
decrease in the Base Rate, effective as of the opening of business on the day
that any such change in the Base Rate occurs.
(b) Interest shall accrue on the principal amount of Canadian Base
Rate Loans outstanding at the end of each day at a fluctuating rate per annum
equal to the Applicable Margin then in effect plus the Canadian Base Rate. Such
rate of interest shall increase or decrease by an amount equal to any increase
or decrease in the Canadian Base Rate, effective as of the opening of business
on the day that any such change in the Canadian Base Rate occurs.
(c) Interest shall accrue on the principal amount of LIBOR Loans
outstanding at the end of each day at a rate per annum equal to the Applicable
Margin then in effect plus the LIBOR for the applicable Interest Period for such
LIBOR Loan.
(d) Interest shall accrue on the principal amount of Canadian Fixed
Rate Loans outstanding at the end of each day at a rate per annum equal to the
Applicable Margin then in effect plus the Canadian Fixed Rate for the applicable
Interest Period for such Canadian Fixed Rate Loan.
2.1.2 Default Rate of Interest. Upon and after the occurrence of an
Event of Default, and during the continuation thereof, the principal amount of
all Loans shall bear interest at a rate per annum equal to 2.0% plus the
interest rate otherwise applicable thereto (the "Default Rate").
2.1.3 Maximum Interest.
(a) In no event whatsoever shall the aggregate of all amounts deemed
interest hereunder or under the Notes and charged or collected pursuant to the
terms of this Agreement or pursuant to the Notes exceed the highest rate
permissible under any law which a court of competent jurisdiction shall, in a
final determination, deem applicable hereto (the "Maximum Rate"). If any
provisions of this Agreement or the Notes are in contravention of any such law,
such provisions shall be deemed amended to conform thereto. If at any time, the
amount of interest paid hereunder is limited by the Maximum Rate, and the
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amount at which interest accrues hereunder is subsequently below the Maximum
Rate, the rate at which interest accrues hereunder shall remain at the Maximum
Rate, until such time as the aggregate interest paid hereunder equals the amount
of interest that would have been paid had the Maximum Rate not applied.
(b) Without limiting the provisions of Section 2.1.3(a), if any
provision of this Agreement or any of the other Loan Documents would obligate
Canadian Borrower to make any payment of interest under the Canadian Obligations
or other amount in an amount or calculated at a rate which would be prohibited
by law or would result in a receipt by the applicable recipient of interest
under the Canadian Obligations at a criminal rate (as such terms are construed
under the Criminal Code (Canada)) then, notwithstanding such provision, such
amount or rates shall be deemed to have been adjusted with retroactive effect to
the maximum amount or rate of interest, as the case may be, as would not be so
prohibited by law or so result in a receipt by such recipient of interest under
the Canadian Obligations at a criminal rate, such adjustment to be effected, to
the extent necessary, as follows: (1) first, by reducing the amount or rates of
interest required to be paid to the recipient under this Section 2.1.3(b); and
(2) thereafter, by reducing any fees, commissions, premiums and other amounts
required to be paid by the Canadian Borrower which would constitute interest
under the Canadian Obligations for purposes of Section 347 of the Criminal Code
(Canada). Notwithstanding the foregoing, and after giving effect to all
adjustments contemplated thereby, if the recipient of payments by the Canadian
Borrower shall have received an amount in excess of the maximum permitted by
that section of the Criminal Code (Canada), then Canadian Borrower shall be
entitled, by notice in writing to Canadian Agent for the benefit of such
recipient, to obtain reimbursement from such recipient in an amount equal to
such excess, and pending such reimbursement, such amount shall be deemed to be
an amount payable by such recipient to Canadian Borrower. Any amount or rate of
interest under the Canadian Obligations referred to in this Section 2.1.3 shall
be determined in accordance with generally accepted actuarial practices and
principles as an effective annual rate of interest over the term that any Loan
to Canadian Borrower remains outstanding on the assumption that any charges,
fees or expenses that fall within the meaning of "interest" (as defined in the
Criminal Code (Canada)) shall, if they relate to a specific period of time, be
pro-rated over that period of time and otherwise be pro-rated over the period
from the Closing Date to the date all Obligations have been indefeasibly paid in
full and all commitments to make Canadian Revolving Credit Loans have been
terminated and, in the event of a dispute, a certificate of a Fellow of the
Canadian Institute of Actuaries appointed by Canadian Agent shall be conclusive
for the purposes of such determination.
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2.2 Computation of Interest and Fees.
Interest, Letter of Credit and LC Guaranty fees and unused line fees
hereunder shall be calculated daily and shall be computed on the actual number
of days elapsed over a year of 360 days (except for such Canadian Obligations as
are denominated in Canadian Dollars, which shall be based on a 365-day year).
For the purpose of computing interest hereunder, (a) all items of payment
received by Administrative Agent shall be applied by Administrative Agent on
account of the Domestic Obligations (and, upon repayment in full of the Domestic
Obligations, on account of the Canadian Obligations)(subject to final payment of
such items) one (1) Business Day after receipt by Administrative Agent of such
items in Administrative Agent's account located in Hartford, Connecticut and (b)
all items of payment received by Canadian Agent shall be applied by Canadian
Agent on account of the Canadian Obligations (subject to final payment of such
items) one (1) Business Day after receipt by Canadian Agent of such items in
Canadian Agent's account located in Toronto, Ontario, Canada.
2.3 Fee Letter.
Borrowers shall pay to Administrative Agent certain fees and other
amounts in accordance with the terms of the fee letter between Borrowers and
Administrative Agent dated as of the date hereof (the "Fee Letter").
2.4 Letter of Credit and LC Guaranty Fees.
Domestic Borrowers shall pay to Administrative Agent, through
Administrative Agent's Treasury and International Services Group, (a) for
Administrative Agent's own account, a fronting fee equal to 0.25% multiplied by
the available amount of each Letter of Credit at the time of issuance of such
Letter of Credit and at the time of any amendment to increase the amount of each
such Letter of Credit (on the amount of any such increase), (b) for the ratable
benefit of the Lenders, a fee equal to the LC Margin (provided that upon and
after the occurrence of an Event of Default, and during the continuation
thereof, the LC Margin shall be increased by 2.0% per annum) multiplied by the
aggregate available amount of all Letters of Credit and LC Guaranties
outstanding from time to time during the term of this Agreement, which fees
shall be payable monthly in arrears on the first day of each month hereafter,
and (c), for the benefit of Bank, all normal and customary charges associated
with the issuance, amendment, administration, processing, transfer or
negotiation of such Letters of Credit and LC Guaranties, which fees and charges
shall be deemed fully earned and shall be due and payable upon issuance,
amendment, transfer or negotiation of each such Letter of Credit or LC Guaranty
or such other times as notified by Administrative Agent or Bank and shall not be
subject to rebate or proration upon the termination of this Agreement for any
reason.
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2.5 Unused Line Fee.
Domestic Borrowers shall pay to Administrative Agent, for the ratable
benefit of the Lenders, a fee (the "Unused Line Fee") equal to 0.25% per annum
multiplied by the average daily amount by which the Revolving Credit Maximum
Amount exceeds the sum of the outstanding principal balance of the Dollar
Equivalent of the Revolving Credit Loans plus the LC Amount plus the outstanding
principal balance of the Dollar Equivalent of the Term Loans. The Unused Line
Fee shall be payable monthly in arrears on the first day of each month
hereafter.
2.6 Canadian Participation Fee.
When and as interest is collected on Canadian Revolving Credit Loans and
the Canadian Term Loan, and until the Canadian Revolving Credit Loans and the
Canadian Term Loan are refunded in accordance with Section 3.2.6, Canadian Agent
shall distribute to the Canadian Lender and the Canadian Participating Lenders,
ratably, a per annum fee (the "Canadian Participation Fee") equal to the
Applicable Margin then in effect for (a) in the case of Canadian Fixed Rate
Loans, Canadian Fixed Rate Loans, and (b) in the case of Canadian Base Rate
Loans, Canadian Base Rate Loans, of the aggregate principal amount of such Loans
outstanding from time to time during the term of this Agreement. The Canadian
Participation Fee shall be distributed by the Canadian Agent promptly upon
receipt of the relevant Applicable Margin by the Canadian Agent pursuant to
Sections 2.1.1(b) and (d). If Canadian Borrower pays less than all of the
interest then due and owing by it for any period, that portion of the interest
corresponding to the Canadian Participation Fee shall be deemed to be the last
portion of interest paid or to be paid.
2.7 Prepayment Fee.
Domestic Borrowers shall pay to Administrative Agent, for the ratable
benefit of the Lenders, a fee in the event that prior to the third (3(rd))
anniversary of the Closing Date, Borrowers elect to repay the Loans in full and
terminate all credit facilities provided pursuant to this Agreement. Such fee
shall be payable upon repayment of the Loans and shall be in an amount equal to
one percent (1%) of the Revolving Credit Maximum Amount.
2.8 Audit Fees.
Borrowers shall pay to Administrative Agent and Canadian Agent, as the case
may be, an audit fee of $850 per day per auditor which is an employee of
Administrative Agent or Canadian Agent (which daily audit fee shall be subject
to change from time to time without prior notice), and, with respect to audits
conducted by auditors which are not employees of Administrative Agent or
Canadian Agent, such reasonable audit fees as shall be charged by such auditors,
together with all reasonable
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out-of-pocket expenses incurred by Administrative Agent and Canadian Agent, as
the case may be, in connection with audits of the books and records and
Properties of Borrowers and their Subsidiaries and such other matters as
Administrative Agent and Canadian Agent, as the case may be, shall deem
appropriate in its sole judgment, whether such audits are conducted by employees
of Administrative Agent or Canadian Agent, as the case may be, or by third
parties hired by Administrative Agent or Canadian Agent, as the case may be.
Such fees and out-of-pocket expenses shall be payable promptly following the
date of issuance by Administrative Agent or Canadian Agent, as the case may be,
of a request for payment thereof to Borrower Representative.
2.9 Reimbursement of Expenses.
If, at any time or times regardless of whether or not an Event of Default
then exists, (a) Administrative Agent and/or Canadian Agent incurs legal or
accounting expenses or any other costs or out-of-pocket expenses (including,
without limitation, costs or expenses of any third party consultants) in
connection with (i) the negotiation and preparation of this Agreement or any of
the other Loan Documents, the Administrative Agent's and Canadian Agent's due
diligence in connection therewith, any amendment of or modification of this
Agreement or any of the other Loan Documents, or any sale or attempted sale of
any interest herein to any assignee (including, without limitation, printing and
distribution of materials to prospective Lenders and all costs associated with
bank meetings, but excluding any closing fees paid to Lenders in connection
therewith) or (ii) the administration of this Agreement or any of the other Loan
Documents and the transactions contemplated hereby and thereby; or (b)
Administrative Agent, Canadian Agent or any Lender incurs legal or accounting
expenses or any other costs or out-of-pocket expenses (including, without
limitation, costs or expenses of any third-party consultants) in connection with
(i) any litigation, contest, dispute, suit, proceeding or action (whether
instituted by Administrative Agent, Canadian Agent, any Lender, any Borrower or
any other Person) relating to the Collateral, this Agreement or any of the other
Loan Documents or any Borrower's, any of its Subsidiaries' or any Guarantor's
affairs; (ii) any attempt to enforce any rights of Administrative Agent,
Canadian Agent or any Lender against any Borrower or any other Person which may
be obligated to Administrative Agent, Canadian Agent or any Lender by virtue of
this Agreement or any of the other Loan Documents, including, without
limitation, the Account Debtors; or (iii) any attempt to inspect, verify,
protect, preserve, restore, collect, sell, liquidate or otherwise dispose of or
realize upon the Collateral; then all such reasonable legal and accounting
expenses, other costs and out of pocket expenses of Administrative Agent,
Canadian Agent or any Lender, as applicable, shall be charged to Borrowers;
provided, that Borrowers shall not be responsible for such costs and
out-of-pocket expenses to the extent incurred because of the gross negligence or
willful misconduct of Administrative Agent, Canadian Agent or any Lender.
Borrowers shall also reimburse Administrative
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Agent and Canadian Agent for expenses incurred by Administrative Agent and
Canadian Agent in their administration of the Collateral to the extent and in
the manner provided in Section 2.11 hereof.
2.10 Bank Charges.
Borrowers shall pay to Administrative Agent and Canadian Agent any and all
fees, costs or expenses which Administrative Agent or Canadian Agent pays to a
bank or other similar institution arising out of or in connection with (a) the
forwarding to Borrowers or any other Person on behalf of any Borrower, by
Administrative Agent or Canadian Agent, of proceeds of Loans made to any
Borrower pursuant to this Agreement and (b) the depositing for collection by
Administrative Agent or Canadian Agent of any check or item of payment received
or delivered to Administrative Agent or Canadian Agent on account of the
Obligations.
2.11 Collateral Protection Expenses; Appraisals.
All out-of-pocket expenses incurred in protecting, storing, warehousing,
insuring, handling, maintaining and shipping the Collateral, any and all excise,
property, sales, and use taxes imposed by any state, federal, provincial or
local authority on any of the Collateral or in respect of the sale thereof shall
be borne and paid by Borrowers. If Borrowers fail to promptly pay any portion
thereof when due, Administrative Agent or Canadian Agent, as the case may be,
may, at its option, but shall not be required to, pay the same and charge
Borrowers therefor. Additionally, from time to time, if Administrative Agent or
Canadian Agent or any Lender determines that obtaining appraisals is necessary
in order for it to comply with applicable laws or regulations, or is otherwise
necessary in the reasonable credit judgment of the Administrative Agent or the
Canadian Agent, as the case may be, and at any time if a Default or an Event of
Default shall have occurred and be continuing, Administrative Agent or the
Canadian Agent, as the case may be, may, at Borrowers' expense (subject to the
last sentence of this Section 2.11), obtain appraisals from appraisers (who may
be personnel of Administrative Agent or Canadian Agent, as the case may be),
stating the then current fair market value or liquidation value of all or any
portion of the real estate or personal property of Borrowers or any of their
Subsidiaries. Administrative Agent and Canadian Agent also shall have the right
to obtain such appraisals periodically, at Borrowers' expense (subject to the
last sentence of this Section 2.11), with respect to the real estate or
equipment of Borrowers to confirm the continuing adequacy of the value of such
Collateral as the basis for the Term Loans. Subject to the next sentence, in the
event that personnel of Administrative Agent or Canadian Agent conduct any such
appraisal, Administrative Agent's or Canadian Agent's, as applicable,
then-prevailing internal cost of such appraisal shall be payable by Borrowers
(which cost per appraisal shall be subject to change from time to time with
respect to future appraisals without prior notice). Unless a Default or Event of
Default shall have occurred and be continuing (in which
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event the following limitation shall not apply), with respect to appraisals
conducted subsequent to the Closing Date, Borrowers shall only be required to
pay the costs of one such appraisal with respect to each category of personal
property Collateral or parcel of real Property per calendar year.
2.12 Payment of Charges.
All amounts chargeable to Domestic Borrowers under this Agreement shall be
Obligations secured by all of the Domestic Collateral, and all amounts
chargeable to Canadian Borrower under this Agreement shall be Obligations
secured by all of the Collateral, and in each case shall be, unless specifically
otherwise provided, payable on demand and shall bear interest from the date
demand was made or such amount is due, as applicable, until paid in full at the
rate applicable to that portion of the outstanding principal amount of the
Domestic Term Loans bearing interest with reference to the Base Rate from time
to time, with respect to amounts chargeable to Domestic Borrowers, and at the
rate applicable to that portion of the outstanding principal amount of the
Canadian Term Loan bearing interest with reference to the Canadian Base Rate
from time to time, with respect to amounts chargeable to Canadian Borrower.
2.13 Taxes.
2.13.1 Subject to Section 2.13.5, all payments made by any Domestic
Borrower to any Lender under this Agreement or any other Loan Document shall be
made free and clear of, and without deduction or withholding for or on account
of, any present or future taxes, levies, assessments, imposts, duties, fees,
deductions or withholdings or similar charges, and all liabilities with respect
thereto, now or hereafter imposed, levied, collected, withheld or assessed by
any governmental authority, excluding, in the case of the Administrative Agent,
Bank and each Lender, net income taxes imposed on the Administrative Agent, Bank
or such Lender (including, without limitation, any transferee or assignee
(including a participation holder) (any such entity, a "Transferee")), as the
case may be, as a result of a present or former connection between the
jurisdiction of the governmental authority imposing such tax and the
Administrative Agent, Bank or such Lender (excluding a connection arising solely
from the Administrative Agent, Bank or such Lender or Transferee having
executed, delivered or performed its obligations or received a payment under, or
enforced, this Agreement or any other Loan Document) (all such non-excluded
taxes, levies, imposts, duties, charges, fees, deductions and withholdings being
hereinafter called "Non-Excluded Taxes").
2.13.2 Subject to Section 2.13.5, if any Domestic Borrower shall be
required by law to deduct or withhold any Non-Excluded Taxes or Further Taxes
from or in respect of any sum payable hereunder to any Lender, Bank or the
Administrative Agent, then:
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(a) the sum payable shall be increased as necessary so that, after
making all required deductions and withholdings (including deductions and
withholdings applicable to additional sums payable under this Section), such
Lender, Bank or the Administrative Agent, as the case may be, receives and
retains an amount equal to the sum it would have received and retained had no
such deductions or withholdings been made;
(b) such Domestic Borrower shall make such deductions and
withholdings;
(c) such Domestic Borrower shall pay the full amount deducted or
withheld to the relevant taxing authority or other authority in accordance with
applicable law; and
(d) such Domestic Borrower shall also pay to each Lender, Bank or the
Administrative Agent for the account of such Lender or Bank, at the time
interest is paid, Further Taxes in the amount that the respective Lender or Bank
specifies is necessary to preserve the after-tax yield such Lender or Bank would
have received if such Non-Excluded Taxes or Further Taxes had not been imposed.
2.13.3 Subject to Section 2.13.5, each Domestic Borrower agrees to
indemnify and hold harmless each Lender, Bank and the Administrative Agent for
the full amount of Non-Excluded Taxes and Further Taxes in the amount that the
respective Lender, Bank or the Administrative Agent specifies as necessary to
preserve the after-tax yield such Lender, Bank or the Administrative Agent would
have received if such Non-Excluded Taxes or Further Taxes had not been imposed,
and any liability (including penalties, interest, additions to tax and expenses)
arising therefrom or with respect thereto, whether or not such Non-Excluded
Taxes or Further Taxes were correctly or legally asserted. Payment under this
indemnification shall be made within 30 days after the date the applicable
Lender, Bank or the Administrative Agent makes written demand therefor,
specifying the amount and basis for such determination.
2.13.4 Within 30 days after the date of any payment by any Domestic
Borrower of Non-Excluded Taxes or Further Taxes, such Domestic Borrower shall
furnish to each Lender, Bank or the Administrative Agent the original or a
certified copy of a receipt evidencing payment thereof, or other evidence of
payment satisfactory to such Lender, Bank or the Administrative Agent.
2.13.5 (a) Each Lender or Transferee that is a "foreign corporation,
partnership or trust" within the meaning of the Code, agrees that it will
deliver to the Borrower Representative and the Administrative Agent on or before
the date it becomes a Lender or Transferee two duly completed and
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signed copies of Form W-8BEN, Form W-8ECI or Form W-8IMY or successor applicable
form (relating to such Person and entitling it to an exemption from, or
reduction of, withholding tax on all payments to be made to such Person by the
Domestic Borrowers pursuant to this Agreement or the other Loan Documents)
certifying that such Person is entitled to receive all payments under this
Agreement and the other Loan Documents without deduction or withholding of any
United States federal income taxes (or, in the case of a Transferee, that any
such deduction or withholding is no greater than it would have been for the
Lender (or the Transferee) that transferred or assigned its interest to such
Transferee). A Form W-8BEN completed and delivered by (i) certain foreign
trusts, or (ii) persons claiming an exemption or reduced rate of withholding at
source under an income tax treaty will not be considered duly completed unless
the Form W-8BEN contains such person's U.S. taxpayer identification number. Each
such Lender or Transferee also agrees (x) to deliver to the Borrower
Representative and the Administrative Agent two further completed and signed
copies of one of such forms (or successor applicable forms) on or before the
date that any such statement or form expires or becomes obsolete or after the
occurrence of any event (including, without limitation, a change in such
Lender's or Transferee's lending office) requiring a change in the most recent
statement or form previously delivered by it to the Borrower Representative and
the Administrative Agent, and (y) to obtain such extensions of the time for
filing and to renew such statements or forms and certifications thereof as may
reasonably be requested by the Borrower Representative or the Administrative
Agent, unless in any such case an event (including, without limitation, any
change in treaty, law or regulation) has occurred prior to the date on which any
such delivery would otherwise be required which renders all such statements or
forms inapplicable or which would prevent such Lender or Transferee from duly
completing and delivering any such statement or form with respect to it and such
Lender or Transferee so advises the Borrower Representative and the
Administrative Agent. If such Person fails to deliver the above forms or other
documentation, then the Administrative Agent may withhold from any interest
payment to such Person an amount equivalent to the applicable withholding tax
imposed by Sections 1441 and 1442 of the Code, without reduction, provided that
the Domestic Borrowers shall not be required to increase any such amounts
payable to any Lender pursuant to Section 2.13.1, unless the obligation to pay
such increased amounts would not have arisen but for a change in law. Each
Lender or Transferee that is a "United States person", as defined under Section
7701(a)(30) of the Code, and that is not a corporation agrees that it will
deliver to the Borrower Representative and the Administrative Agent a Form W-9
stating that it is entitled to an exemption from United States backup
withholding tax.
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(b) No Domestic Borrower shall be required to pay any additional
amounts to any Lender or Transferee pursuant to Section 2.13.1 if the obligation
to pay such additional amounts arose solely from a failure by such Lender or
Transferee to comply with the provisions of Section 2.13.5(a) above.
2.13.6 If any Lender or Transferee claims exemption from, or
reduction of, withholding tax under a United States tax treaty by providing IRS
Form W-8BEN or W-8IMY (or any successor form) or claims an exemption from
withholding tax by providing an IRS Form W-8ECI (or any successor form) and such
Lender or Transferee sells, assigns or (other than pursuant to Section 2.13.8
below) otherwise transfers all or part of the Obligations of a Domestic Borrower
to a transferee Lender or Transferee, such Lender or Transferee agrees to notify
the Administrative Agent of the percentage amount in which it is no longer the
beneficial owner of Obligations of a Domestic Borrower to such Lender or
Transferee. To the extent of such percentage amount, the Administrative Agent
will treat such Lender or Transferee's IRS Form W-8BEN or W-8IMY (or any
successor form) as no longer valid.
2.13.7 If any Lender or Transferee claims an exemption from, or
reduction of, withholding tax under a United States tax treaty by providing IRS
Form W-8BEN or W-8IMY (or any successor form) or claims an exemption from
withholding tax by providing Form W-8ECI (or successor form) and such Lender or
Transferee grants a participation in the Obligations of a Domestic Borrower to a
transferee Lender or Transferee, such Lender or Transferee agrees to notify the
Administrative Agent of the percentage amount in which it is no longer the
beneficial owner of Obligations of a Domestic Borrower, and such Lender or
Transferee agrees to undertake responsibility to provide to the Administrative
Agent such forms and documentation (including IRS Form W-8IMY and forms and
documentation provided by each participant to the extent required by the IRS) to
enable the Domestic Borrowers to comply with the withholding tax requirements
imposed by Sections 1441 and 1442 of the Code.
2.13.8 If the IRS or any other governmental authority of the United
States or other jurisdiction asserts a claim that the Administrative Agent did
not properly withhold tax or any other amount from amounts paid to or for the
account of any Lender or Transferee (because the appropriate form was not
delivered or was not properly executed, or because such Lender or Transferee
failed to notify the Administrative Agent of a change in circumstances which
rendered the exemption from, or reduction of, withholding tax ineffective, or
for any other reason) such Lender or Transferee shall indemnify the
Administrative Agent fully for all amounts paid, directly or indirectly, by the
Administrative Agent as tax or otherwise, including penalties and interest, and
including any taxes imposed by any jurisdiction on the amounts payable to the
Administrative Agent under this Section 2.13, together with all
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costs and expenses (including reasonable fees and expenses of legal counsel).
The obligation of the Lenders or Transferees under this Section 2.13.8 shall
survive the payment of all Obligations and the resignation or replacement of the
Administrative Agent.
2.13.9 Any and all payments or reimbursements made by the Canadian
Borrower hereunder and under the other Loan Documents shall be made in Dollars
or Canadian Dollars, as applicable, free and clear of and without deduction for
any and all taxes, levies, imposts, deductions, charges or withholdings, and all
liabilities with respect thereto; excluding, however, the following: taxes
imposed on the net income of Canadian Agent or Canadian Lender by the
jurisdiction under the laws of which Canadian Agent or Canadian Lender is
organized or doing business or any political subdivision thereof and taxes
imposed on its net income by the jurisdiction of Canadian Agent's or Canadian
Lender's applicable lending office or any political subdivision thereof (all
such taxes, levies, imposts, deductions, charges or withholdings and all
liabilities with respect thereto, excluding such franchise taxes and taxes
imposed on net income, herein "Canadian Non-Excluded Taxes"). If Canadian
Borrower shall be required by law or the administration thereof to deduct any
such Canadian Non-Excluded Taxes from or in respect of any sum payable hereunder
to Canadian Agent, Canadian Lender or any Canadian Participating Lender, then
the sum payable hereunder shall be increased as may be necessary so that, after
all required deductions are made, Canadian Agent, Canadian Lender and any such
Canadian Participating Lender receives an amount equal to the sum it would have
received had no such deductions been made. Whenever any Canadian Non-Excluded
Taxes are deducted by Canadian Borrower, as soon as practicable thereafter, the
Borrower Representative shall send to Canadian Agent for its own account or for
the account of the Canadian Lender or Canadian Participating Lenders, as the
case may be, a certified copy of an original official receipt received by
Canadian Borrower showing payment thereof or other evidence of such payment
reasonably satisfactory to the Canadian Agent. If Canadian Borrower fails to pay
any Canadian Non-Excluded Taxes when due to the appropriate taxing authority or
fails to remit to Canadian Agent the required receipts or other required
documentary evidence, Canadian Borrower shall indemnify Canadian Agent, Canadian
Lender and Canadian Participating Lenders for any incremental taxes, interest or
penalties that may become payable by Canadian Agent, Canadian Lender or Canadian
Participating Lenders as a result of any such failure. Without in any way
limiting the foregoing, Canadian Borrower shall indemnify and hold harmless
Canadian Agent, Canadian Lender and Canadian Participating Lenders for any
Canadian Non-Excluded Taxes (including related interest and penalties, if any)
that may be incurred by Canadian Agent, Canadian Lender and/or Canadian
Participating Lender in respect of arrangements pertaining to the refunding,
pursuant to Section 3.2.6, of the Canadian Revolving Credit Loans and Canadian
Term Loan and the Canadian Participation Fees provided for pursuant to Section
2.6.
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2.13.10 The agreements in this Section 2.13 shall survive the
termination of this Agreement and the payment of the Loans and all other amounts
payable hereunder.
SECTION 3. LOAN ADMINISTRATION
3.1 Manner of Borrowing Loans.
Borrowings under the credit facility established pursuant to Section 1
hereof shall be as follows:
3.1.1 Loan Requests.
(a) Domestic Revolving Credit Loan Requests. A request for a Domestic
Revolving Credit Loan shall be made, or shall be deemed to be made, in the
following manner: (i) Borrower Representative may give Administrative Agent
notice of its intention to borrow, in which notice Borrower Representative
shall specify the amount of the proposed borrowing and the proposed
borrowing date, no later than 10:00 a.m. Los Angeles time on the proposed
borrowing date (or in accordance with Section 3.1.7 in the case of a
request for a LIBOR Loan), provided, however, that no such request may be
made at a time when there exists a Default or an Event of Default; and (ii)
the becoming due of any amount required to be paid under this Agreement or
the Notes, whether as interest or for any other Domestic Obligation, shall
be deemed irrevocably to be a request for a Domestic Revolving Credit Loan
bearing interest in relation to the Base Rate on the due date in the amount
required to pay such interest or other Domestic Obligation.
(b) Canadian Revolving Credit Loan Requests. A request for a Canadian
Revolving Credit Loan shall be made upon Borrower Representative's
irrevocable written notice delivered to the Administrative Agent and the
Canadian Agent in a form specified by the Administrative Agent and the
Canadian Agent, which notice must be received by each of the Administrative
Agent and the Canadian Agent prior to 10:00 a.m. (Los Angeles time) (i)
four (4) Business Days prior to the requested borrowing date, in the case
of Canadian Fixed Rate Loans and (ii) one (1) Business Day prior to the
requested borrowing date, in the case of Canadian Base Rate Loans,
specifying:
(A) the amount of the proposed borrowing;
(B) the requested borrowing date, which shall be a Business
Day;
(C) whether such Canadian Revolving Credit Loan is to be
denominated in Canadian Dollars (for Canadian
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Base Rate Loans and Canadian BA Rate Loans) or U.S. Dollars (for
Canadian Base Rate Loans or Canadian Offshore Rate Loans);
provided, that if the notice fails to specify the currency in
which such Canadian Revolving Credit Loan is to be denominated,
the denomination will be deemed to be Canadian Dollars;
(D) whether such Canadian Revolving Credit Loan shall be
maintained as a Canadian Base Rate Loan, Canadian BA Rate Loan,
or Canadian Offshore Rate Loan; and
(E) with respect to Canadian Fixed Rate Loans, the duration
of the Interest Period applicable to such Loan; provided, that if
the notice fails to specify the duration of the Interest Period,
such Interest Period shall be one month.
The becoming due of any amount required to be paid under this Agreement or the
Notes, whether as interest or for any other Canadian Obligation, shall be deemed
irrevocably to be a request for a Canadian Revolving Credit Loan bearing
interest in relation to the Canadian Base Rate on the due date in the amount
required to pay such interest or other Canadian Obligation.
3.1.2 Disbursement. Each Borrower hereby irrevocably authorizes
Administrative Agent and Canadian Agent, as the case may be, to disburse the
proceeds of each Revolving Credit Loan requested, or deemed to be requested,
pursuant to Section 3.1.1 as follows: (a) the proceeds of each Revolving Credit
Loan requested under Sections 3.1.1(a)(i) or 3.1.1(b) shall be disbursed by
Administrative Agent or Canadian Agent, as the case may be, in lawful money of
the United States of America or Canada, as the case may be, in immediately
available funds, in the case of the initial borrowing, in accordance with the
terms of the written disbursement letter from Borrower Representative, and in
the case of each subsequent borrowing, by wire transfer to such bank account as
may be agreed upon by Borrower Representative and Administrative Agent from time
to time; and (b) the proceeds of each Revolving Credit Loan deemed requested
under Section 3.1.1(a)(ii) shall be disbursed by Administrative Agent by way of
direct payment of the relevant interest or other Domestic Obligation.
3.1.3 Payment by Lenders. Administrative Agent shall give to
each Domestic Lender prompt written notice by facsimile, telex or cable of the
receipt by Administrative Agent from Borrower Representative of any request for
a Domestic Revolving Credit Loan, and Administrative Agent shall give to each
Canadian Participating Lender prompt written notice by facsimile, telex or cable
of the receipt by Administrative Agent from Canadian Lender of any Notice of
Canadian Revolving Loan Refunding (as defined in Section 3.2.6 below) and Notice
of Canadian
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Term Loan Refunding (as defined in Section 3.2.6 below). Each Domestic Lender
shall not later than 12:00 p.m. (Los Angeles time) and each Canadian
Participating Lender shall not later than 12:00 p.m. Toronto time on the
applicable requested date of funding, wire to a bank designated by
Administrative Agent the amount of that Lender's Domestic Revolving Loan
Percentage of the requested Domestic Revolving Credit Loan, or that Canadian
Participating Lender's Canadian Percentage of the outstanding principal amount
of Canadian Revolving Credit Loans, or that Canadian Participating Lender's
Canadian Percentage of the outstanding principal amount of the Canadian Term
Loan. The failure of any Domestic Lender or Canadian Participating Lender to
make the Domestic Revolving Credit Loans, Canadian Revolving Credit Loans
refunding or Canadian Term Loan refunding, as the case may be, to be made by it
shall not release any other Domestic Lender or Canadian Participating Lender, as
the case may be, of its obligations hereunder to make its Domestic Revolving
Credit Loan, Canadian Revolving Credit Loan refunding or Canadian Term Loan
refunding, as the case may be. Neither Administrative Agent, Canadian Agent nor
any other Domestic Lender or Canadian Participating Lender shall be responsible
for the failure of any other Domestic Lender or Canadian Participating Lender,
as the case may be, to make the Domestic Revolving Credit Loan, Canadian
Revolving Credit Loan refunding or Canadian Term Loan refunding, as the case may
be, to be made by such other Domestic Lender or Canadian Participating Lender,
as the case may be. The foregoing notwithstanding, Administrative Agent or
Canadian Agent, as applicable, in its sole discretion, may from its own funds
make a Domestic Revolving Credit Loan on behalf of any Domestic Lender, or a
Canadian Revolving Credit Loan refunding or Canadian Term Loan refunding on
behalf of any Canadian Participating Lender. In such event, the Domestic Lender
or Canadian Participating Lender on behalf of whom Administrative Agent or
Canadian Agent made the Domestic Revolving Credit Loan, Canadian Revolving
Credit Loan refunding or Canadian Term Loan refunding, as the case may be, shall
reimburse Administrative Agent or Canadian Agent, as applicable, for the amount
of such Domestic Revolving Credit Loan, Canadian Revolving Credit Loan refunding
or Canadian Term Loan refunding, as the case may be, made on its behalf, on a
weekly (or more frequent, as determined by Administrative Agent or Canadian
Agent, as applicable, in its sole discretion) basis. The entire amount of
interest attributable to such Domestic Revolving Credit Loan, Canadian Revolving
Credit Loan refunding or Canadian Term Loan refunding, as the case may be, for
the period from the date on which such Domestic Revolving Credit Loan, Canadian
Revolving Credit Loan refunding or Canadian Term Loan refunding, as the case may
be, was made by Administrative Agent or Canadian Agent on such Domestic Lender's
or Canadian Participating Lender's, as the case may be, behalf until
Administrative Agent or Canadian Agent, as applicable, is reimbursed by such
Domestic Lender or Canadian Participating Lender, as the case may be, shall be
paid to Administrative Agent or Canadian Agent, as applicable, for its own
account.
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3.1.4 Authorization.
(a) Each Domestic Borrower hereby irrevocably authorizes
Administrative Agent to advance on behalf of Domestic Borrowers, and
to charge to Domestic Borrowers' Domestic Loan Account hereunder as a
Domestic Revolving Credit Loan (which shall be a Base Rate Loan), a
sum sufficient to pay all interest accrued on the Domestic Obligations
during the immediately preceding month and to pay all fees, costs and
expenses and other Domestic Obligations at any time owed by any
Domestic Borrower to Administrative Agent or any Lender hereunder.
(b) Canadian Borrower hereby irrevocably authorizes Canadian
Agent to advance on behalf of Canadian Borrower, and to charge to
Canadian Borrower's Canadian Loan Account hereunder as a Canadian
Revolving Credit Loan (which shall be a Canadian Base Rate Loan), a
sum sufficient to pay interest accrued on the Canadian Obligations
during the immediately preceding month and to pay all fees, costs and
expenses and other Canadian Obligations at any time owed by Canadian
Borrower to Canadian Agent or any Lender hereunder.
3.1.5 Letter of Credit and LC Guaranty Requests. A request for
a Letter of Credit or LC Guaranty shall be made in the following manner:
Borrower Representative may give Administrative Agent and Bank a written notice
of its request for the issuance of a Letter of Credit or LC Guaranty, not later
than 10:00 a.m. Los Angeles time, three (3) Business Days before the proposed
issuance date thereof, in which notice Borrower Representative shall specify the
proposed beneficiary, issuance date, expiration date and format and wording for
the Letter of Credit or LC Guaranty being requested (which shall be satisfactory
to Administrative Agent and Bank) and the Domestic Borrower for whose account
the Letter of Credit or LC Guaranty is to be issued; provided, that no such
request may be made at a time when there exists a Default or Event of Default.
Such request shall be accompanied by an executed application and reimbursement
agreement in form and substance satisfactory to Administrative Agent and Bank,
as well as any required resolutions.
3.1.6 Method of Making Requests. As an accommodation to
Borrowers, unless a Default or an Event of Default is then in existence, (a)
Administrative Agent shall permit telephonic requests for Domestic Revolving
Credit Loans to Administrative Agent, (b) Administrative Agent and Canadian
Agent shall permit telephonic requests for Canadian Revolving Credit Loans to
Administrative Agent and Canadian Agent, (c) Administrative Agent and Bank may,
in their discretion, permit electronic transmittal of requests for Letters of
Credit and LC Guaranties to them, and (d) Administrative Agent may, in
Administrative Agent's discretion, permit electronic transmittal of
instructions, authorizations, agreements or reports to Administrative Agent.
Unless Borrower Representative specifically directs
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Administrative Agent, Canadian Agent or Bank in writing not to accept or act
upon telephonic or electronic communications, none of Administrative Agent,
Canadian Agent nor Bank shall have any liability to Borrowers for any loss or
damage suffered by Borrowers as a result of Administrative Agent's, Canadian
Agent's or Bank's honoring of any requests, execution of any instructions,
authorizations or agreements or reliance on any reports communicated to it
telephonically or electronically and purporting to have been sent to
Administrative Agent, Canadian Agent or Bank by an authorized officer of
Borrower Representative, and none of Administrative Agent, Canadian Agent nor
Bank shall have any duty to verify the origin of any such communication or the
authority of the Person sending it. Each telephonic request for a Revolving
Credit Loan, Letter of Credit or LC Guaranty accepted by Administrative Agent,
Canadian Agent and Bank, if applicable, hereunder shall be promptly followed by
a written confirmation of such request from Borrower Representative to
Administrative Agent, Canadian Agent and Bank, if applicable.
3.1.7 LIBOR Loans and Canadian Fixed Rate Loans.
(a) Notwithstanding the provisions of Section 3.1.1(a), in the
event Borrower Representative desires to obtain a LIBOR Loan, Borrower
Representative shall give Administrative Agent prior, written,
irrevocable notice no later than 10:00 a.m. Los Angeles time on the
third (3(rd)) Business Day prior to the requested borrowing date
specifying (i) Borrower Representative's election to obtain a LIBOR
Loan, (ii) the date of the proposed borrowing (which shall be a
Business Day), (iii) the length of the Interest Period, and (iv) the
amount to be borrowed, which amount shall be in a minimum principal
amount of $1,000,000 and may increase in integral multiples of
$100,000. In no event shall Domestic Borrowers be permitted to have
outstanding at any one time in the aggregate for all Domestic
Borrowers more than five (5) different LIBOR Loans.
(b) Notwithstanding the provisions of Section 3.1.1(b), in the
event Canadian Borrower desires to obtain a Canadian Fixed Rate Loan,
Borrower Representative shall give Administrative Agent and Canadian
Agent prior, written, irrevocable notice no later than 10:00 a.m. (Los
Angeles time) on the fourth (4(th)) Business Day prior to the
requested borrowing date specifying (i) Borrower Representative's
election to obtain a Canadian Fixed Rate Loan, (ii) whether interest
on such Loan will be based on the Canadian Offshore Rate or the
Canadian BA Rate, (iii) the date of the proposed borrowing (which
shall be a Business Day), (iv) the length of the Interest Period, and
(v) the amount and currency to be borrowed, which amount shall be in a
minimum principal amount of (A) in the case of Canadian Fixed Rate
Loans denominated in U.S. Dollars, $1,000,000 or an integral multiple
of $100,000 in excess thereof, and (B) in the case of Canadian Fixed
Rate Loans denominated in Canadian
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Dollars, cdn$1,000,000 or an integral multiple of cdn$100,000 in
excess thereof. In no event shall Canadian Borrower be permitted to
have outstanding at any one time more than three (3) different
Canadian Fixed Rate Loans.
3.1.8 Conversion of Base Rate Loans. Provided that no Default
or Event of Default has occurred which is then continuing, Borrower
Representative may, on any Business Day, convert any Base Rate Loan into a LIBOR
Loan. If Borrower Representative desires to convert a Base Rate Loan, Borrower
Representative shall give Administrative Agent not less than three (3) Business
Days' prior written notice (prior to 10:00 a.m. Los Angeles time on such
Business Day), specifying the date of such conversion, the amount to be
converted, and the length of the Interest Period. Each conversion into or
conversion of a LIBOR Loan shall be in a minimum principal amount of $1,000,000
and may increase in integral multiples of $100,000 in excess thereof. After
giving effect to any conversion of Base Rate Loans to LIBOR Loans, Domestic
Borrowers shall not be permitted to have outstanding at any one time in the
aggregate for all Domestic Borrowers more than five (5) different LIBOR Loans.
3.1.9 Continuation of LIBOR Loans. Borrower Representative shall
have the right on three (3) Business Days' prior irrevocable written notice
given to Administrative Agent by Borrower Representative (prior to 10:00 a.m.
Los Angeles time on such Business Day), subject to the provisions hereof, to
continue any LIBOR Loan into a subsequent Interest Period of the same or a
different permitted duration, in each case subject to the satisfaction of the
following conditions:
(a) in the case of a continuation of less than all LIBOR Loans,
the LIBOR Loans continued shall each be in a minimum principal amount
of $1,000,000 and may increase in integral multiples of $100,000; and
(b) no LIBOR Loan (or portion thereof) may be continued as a
LIBOR Loan if a Default or Event of Default has occurred which is then
continuing or if, after giving effect to such continuation, Domestic
Borrowers shall have outstanding in the aggregate for all Domestic
Borrowers more than five (5) separate LIBOR Loans.
If Borrower Representative shall fail to give timely notice of its election
to continue any LIBOR Loan or portion thereof as provided above, or if such
continuation shall not be permitted, such LIBOR Loan or portion thereof, unless
such LIBOR Loan shall be repaid, shall automatically be converted into a Base
Rate Loan at the end of the Interest Period then in effect with respect to such
LIBOR Loan.
3.1.10 Conversion of Canadian Revolving Credit Loans and
Canadian Term Loan. Provided that no Default or Event of Default has occurred
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which is then continuing, Borrower Representative may, on any Business Day,
convert any Canadian Base Rate Loan into a Canadian Fixed Rate Loan; provided
that any Canadian Base Rate Loans denominated in U.S. Dollars may only be
converted into Canadian Offshore Rate Loans and Canadian Base Rate Loans
denominated in Canadian Dollars may only be converted into Canadian BA Rate
Loans. If Borrower Representative desires to convert a Canadian Base Rate Loan,
Borrower Representative shall give Administrative Agent and Canadian Agent not
less than four (4) Business Days' prior written notice (prior to 10:00 a.m. (Los
Angeles time) on such Business Day), specifying the date of such conversion, the
currency and amount to be converted, and the length of the Interest Period. Each
conversion into or conversion of a Canadian Fixed Rate Loan shall be in a
minimum principal amount (a) in the case of Canadian Fixed Rate Loans
denominated in U.S. Dollars, $1,000,000 or an integral multiple of $100,000 in
excess thereof, and (b) in the case of Canadian Fixed Rate Loans denominated in
Canadian Dollars, cdn$1,000,000 or an integral multiple of cdn$100,000 in excess
thereof. After giving effect to any conversion of Canadian Base Rate Loans to
Canadian Fixed Rate Loans, Canadian Borrower shall not be permitted to have
outstanding at any one time more than three (3) separate Canadian Fixed Rate
Loans.
3.1.11 Continuation of Canadian Fixed Rate Loans. Borrower
Representative shall have the right on four (4) Business Days' prior irrevocable
written notice given to Administrative Agent and Canadian Agent by Borrower
Representative (prior to 10:00 a.m. (Los Angeles time) on such Business Day),
subject to the provisions hereof, to continue any Canadian Fixed Rate Loan into
a subsequent Interest Period of the same or a different permitted duration, in
each case subject to the satisfaction of the following conditions:
(a) in the case of a continuation of less than all Canadian Fixed
Rate Loans, the Canadian Fixed Rate Loans continued shall each be in a
minimum principal amount of (i) in the case of Canadian Fixed Rate
Loans denominated in U.S. Dollars, $1,000,000 or an integral multiple
of $100,000 in excess thereof, and (ii) in the case of Canadian Fixed
Rate Loans denominated in Canadian Dollars, cdn$1,000,000 or an
integral multiple of cdn$100,000 in excess thereof; and
(b) no Canadian Fixed Rate Loan (or portion thereof) may be
continued as a Canadian Fixed Rate Loan if a Default or Event of
Default has occurred which is then continuing or if, after giving
effect to such continuation, Canadian Borrower shall have outstanding
more than three (3) separate Canadian Fixed Rate Loans.
If Borrower Representative shall fail to give timely notice of its election
to continue any Canadian Fixed Rate Loan or portion thereof as provided above,
or if such continuation shall not be permitted, such Canadian Fixed Rate Loan or
portion
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thereof, unless such Canadian Fixed Rate Loan shall be repaid, shall
automatically be converted into a Canadian Base Rate Loan at the end of the
Interest Period then in effect with respect to such Canadian Fixed Rate Loan.
3.1.12 Inability to Make LIBOR Loans or Canadian Fixed Rate
Loans. Notwithstanding any other provision hereof, if any applicable law,
treaty, regulation or directive, or any change therein or in the interpretation
or application thereof, shall make it unlawful for any Lender (for purposes of
this Section 3.1.12, the term "Lender" shall include the office or branch where
a Lender or any corporation or bank then controlling such Lender makes or
maintains any LIBOR Loans or Canadian Fixed Rate Loans, as the case may be) to
make or maintain its LIBOR Loans or Canadian Fixed Rate Loans, as the case may
be, or if with respect to any Interest Period, Administrative Agent is unable to
determine the LIBOR or Canadian Agent is unable to determine the Canadian BA
Rate, as applicable, relating thereto, or adverse or unusual conditions in, or
changes in applicable law relating to, the London interbank market or the
Canadian BA market, as applicable, make it, in the reasonable judgment of
Administrative Agent or Canadian Agent, as the case may be, impracticable to
fund therein any of the LIBOR Loans or Canadian Fixed Rate Loans, as the case
may be, or make the projected LIBOR unreflective of the actual costs of funds
therefor to any Lender, the obligation of the Administrative Agent, Canadian
Agent and Lenders to make or continue LIBOR Loans or Canadian Fixed Rate Loans,
as the case may be, or convert Base Rate Loans to LIBOR Loans or Canadian Base
Rate Loans to Canadian Fixed Rate Loans, as the case may be, hereunder shall
forthwith be suspended during the pendency of such circumstances and Borrowers
shall, if any affected LIBOR Loans or Canadian Fixed Rate Loans, as the case may
be, are then outstanding, promptly upon request from Administrative Agent or
Canadian Agent, as the case may be, convert such affected LIBOR Loans or
Canadian Fixed Rate Loans, as the case may be, into Base Rate Loans or Canadian
Base Rate Loans, as the case may be.
3.1.13 Borrower Representative. Each Borrower hereby designates
CGI as its representative and agent on its behalf for the purposes of requests
for Loans, giving instructions with respect to the disbursement of the proceeds
of the Loans, selecting interest rate options, requesting Letters of Credit,
giving and receiving all other notices and consents hereunder or under any of
the other Loan Documents and taking all other actions (including in respect of
compliance with covenants) on behalf of any Borrower or Borrowers under the Loan
Documents. CTSI hereby accepts such appointment as Borrower Representative.
Administrative Agent, Canadian Agent and each Lender may regard any notice or
other communication pursuant to any Loan Document from Borrower Representative
as a notice or communication from all Borrowers, any group of Borrowers or any
Borrower, as the case may be, and may give any notice or communication required
or permitted to be given to any Borrower or Borrowers hereunder to Borrower
Representative on behalf
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of such Borrower or Borrowers. Each Borrower agrees that each notice, election,
representation and warranty, covenant, agreement and undertaking made on its
behalf by Borrower Representative shall be deemed for all purposes to have been
made by such Borrower and shall be binding upon and enforceable against such
Borrower to the same extent as if the same had been made directly by such
Borrower.
3.2 Payments.
Except where evidenced by notes or other instruments issued or made by
Borrowers to any Lender and accepted by such Lender specifically containing
payment instructions that are in conflict with this Section 3.2 (in which case
the conflicting provisions of said notes or other instruments shall govern and
control), the Obligations shall be payable as follows:
3.2.1 Principal.
(a) Domestic Revolving Credit Loans. Principal payable on account of
Domestic Revolving Credit Loans shall be payable by Domestic Borrowers to
Administrative Agent for the ratable benefit of Domestic Lenders, in
addition to the circumstances described in Sections 3.3.2 and 3.3.4,
immediately upon the earliest of (i) the receipt by Administrative Agent or
any Domestic Borrower of any proceeds of any of the Domestic Collateral
(except as otherwise provided herein), including without limitation
pursuant to Sections 3.3.1, 3.3.3(a) and 6.2.4, to the extent of such
proceeds, subject to Domestic Borrowers' rights to reborrow such amounts in
compliance with Section 1.1.1 hereof; (ii) the occurrence of an Event of
Default in consequence of which Administrative Agent or Majority Lenders
elect to accelerate the maturity and payment of the Obligations, or (iii)
termination of this Agreement pursuant to Section 4 hereof. Each payment
(including principal prepayments) by Domestic Borrowers on account of
principal of the Domestic Revolving Credit Loans shall be applied first to
Base Rate Loans, then to LIBOR Loans.
(b) Canadian Revolving Credit Loans. Principal on account of Canadian
Revolving Credit Loans shall be payable by Canadian Borrower to Canadian
Agent for the benefit of the Canadian Lender and the Canadian Participating
Lenders, in addition to the circumstances described in Sections 3.3.2 and
3.3.4, immediately upon the earliest of (i) the receipt by Canadian
Borrower of any proceeds of any of the Collateral (except as otherwise
provided herein), including without limitation pursuant to Sections 3.3.1,
3.3.3(b) and 6.2.4, to the extent of such proceeds, subject to Canadian
Borrower's right to reborrow such amounts in compliance with Section 1.1.2
hereof, (ii) the occurrence of an Event of Default in consequence of which
Administrative Agent or Majority Lenders elect to accelerate the maturity
and payment of the Obligations, or (iii) termination of this Agreement
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pursuant to Section 4 hereof. Each payment (including principal
prepayments) by Canadian Borrower on account of principal of the Canadian
Revolving Credit Loans shall be applied first to Canadian Base Rate Loans,
then to Canadian Offshore Rate Loans, then to Canadian BA Rate Loans; it
being understood and agreed that funds received by the Canadian Agent for
application pursuant to this Section 3.2.1(b) which are (A) denominated in
Canadian Dollars, shall be applied first, to Canadian Obligations
denominated in Canadian Dollars and second, to Canadian Obligations
denominated in U.S. Dollars (at a rate of exchange determined by the
Administrative Agent in a manner consistent with clause (ii) of the
definition of "Dollar Equivalent"), and (B) denominated in U.S. Dollars,
shall be applied first, to Canadian Obligations denominated in U.S. Dollars
and second, to Canadian Obligations denominated in Canadian Dollars (at a
rate of exchange determined by the Administrative Agent in a manner
consistent with clause (ii) of the definition of "Dollar Equivalent").
3.2.2 Interest. Interest accrued on all Loans shall be due and
payable on each applicable Interest Payment Date and on the earliest of (a) the
occurrence of an Event of Default in consequence of which Administrative Agent
or Majority Lenders elect to accelerate the maturity and payment of the
Obligations or (b) termination of this Agreement pursuant to Section 4 hereof.
3.2.3 Costs, Fees and Charges. Costs, fees and charges payable
pursuant to this Agreement shall be payable by Borrowers to Administrative Agent
and Canadian Agent, as and when provided in Section 2 or Section 3 hereof or to
any other Person designated by Administrative Agent or Canadian Agent in
writing.
3.2.4 Other Obligations. The balance of the Domestic Obligations
requiring the payment of money, if any, shall be payable by Domestic Borrowers
to Administrative Agent for distribution to Domestic Lenders and Bank, as
appropriate, and the balance of the Canadian Obligations requiring the payment
of money, if any, shall be payable by Canadian Borrower to Canadian Agent for
the benefit of Canadian Lender and the Canadian Participating Lenders, as and
when provided in this Agreement, the Other Agreements or the Security Documents,
or on demand, whichever is later.
3.2.5 Prepayment of or Failure to Borrow LIBOR Loans and
Canadian Fixed Rate Loans. Borrowers may repay a LIBOR Loan or Canadian Fixed
Rate Loan only upon at least three (3) Business Days prior written notice to
Administrative Agent (which notice shall be irrevocable), and any such repayment
shall occur only on the last day of the Interest Period for such LIBOR Loan or
Canadian Fixed Rate Loan. Domestic Borrowers shall pay to Administrative Agent,
upon request of Administrative Agent, such amount or amounts as shall be
sufficient (in the reasonable opinion of Administrative Agent) to compensate
Domestic Lenders
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for any loss, cost, or expense incurred as a result of: (a) any payment of a
LIBOR Loan on a date other than the last day of the Interest Period for such
Loan; (b) any failure by a Domestic Borrower to borrow a LIBOR Loan on the date
specified by Borrower Representative's applicable written notice; or (c) any
failure by a Domestic Borrower to pay a LIBOR Loan on the date for payment
specified in Borrower Representative's written notice. Canadian Borrower shall
pay to Canadian Agent, upon request of Canadian Agent, such amount or amounts as
shall be sufficient (in the reasonable opinion of Canadian Agent) to compensate
Canadian Lender and Canadian Participating Lenders for any loss, cost, or
expense incurred as a result of: (a) any payment of a Canadian Fixed Rate Loan
on a date other than the last day of the Interest Period for such Loan; (b) any
failure by Canadian Borrower to borrow a Canadian Fixed Rate Loan on the date
specified by Borrower Representative's applicable written notice; or (c) any
failure by Canadian Borrower to pay a Canadian Fixed Rate Loan on the date for
payment specified in Borrower Representative's written notice. Without limiting
the foregoing, in connection with any prepayment of a LIBOR Loan or Canadian
Fixed Rate Loan, Borrowers shall pay, as applicable, to Administrative Agent,
for the ratable benefit of Domestic Lenders, or to Canadian Agent, for the
benefit of Canadian Lender and, as applicable, Canadian Participating Lenders, a
"yield maintenance fee" in an amount computed as follows: the greater of (i)
$150.00 and (ii) the amount obtained when the current rate for United States
Treasury securities (bills on a discounted basis shall be converted to a bond
equivalent)(or Canadian equivalent as determined by Canadian Agent) with a
maturity date closest to the Interest Period chosen pursuant to the LIBOR Loan
or Canadian Fixed Rate Loan as to which the prepayment is made, is subtracted
from the LIBOR, or Canadian BA Rate or Canadian Offshore Rate, as applicable, in
effect at the time of prepayment. If the result is zero or a negative number,
there shall be no yield maintenance fee. If the result is a positive number,
then the resulting percentage shall be multiplied by the amount of the principal
balance being prepaid. The resulting amount shall be divided by 360 and
multiplied by the number of days remaining in the Interest Period chosen
pursuant to the LIBOR Loan or Canadian Fixed Rate Loan as to which the
prepayment is made. Such amount shall be reduced to present value calculated by
using the above referenced United States Treasury securities rate (or Canadian
equivalent, as applicable) and the number of days remaining in the term chosen
pursuant to the LIBOR Loan or Canadian Fixed Rate Loan as to which prepayment is
made. The resulting amount shall be, as applicable, the yield maintenance fee
due to Administrative Agent, for the ratable benefit of Domestic Lenders, upon
the prepayment of a LIBOR Loan, or the yield maintenance fee due to Canadian
Agent, for the ratable benefit of Canadian Lender and the Canadian Participating
Lenders, upon the prepayment of a Canadian Fixed Rate Loan. If by reason of an
Event of Default, Administrative Agent or Majority Lenders elect to declare the
Obligations to be immediately due and payable, then any yield maintenance fee
with respect to a LIBOR Loan or a Canadian Fixed Rate Loan, as the
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case may be, shall become due and payable in the same manner as though Borrowers
had exercised such right of prepayment.
3.2.6 Canadian Revolving Credit Loans and Canadian Term Loan
Refunding.
(a) If any Default or Event of Default shall occur and be
continuing, the Canadian Lender may, in its sole and absolute
discretion, direct that the Canadian Revolving Credit Loans owing to
it be refunded by delivering a notice (with such detail as the
Administrative Agent shall request, a "Notice of Canadian Revolving
Loan Refunding") to the Administrative Agent, and may direct that the
Canadian Term Loan owing to it be refunded by delivering a notice
(with such detail as the Administrative Agent shall request, a "Notice
of Canadian Term Loan Refunding") to the Administrative Agent. Upon
receipt of any such notice, the Administrative Agent shall (i)
promptly give notice of the contents thereof to the Canadian
Participating Lenders at their respective Facility Offices and, unless
an Event of Default described in Sections 10.1.8 or 10.1.9 shall have
occurred, to the Borrower Representative and (ii) calculate (A) the
aggregate principal amount of Canadian Revolving Credit Loans or the
Canadian Term Loan, as applicable, denominated in Canadian Dollars
(the "Canadian Dollar Refunding Amount") and (B) the aggregate
principal amount of Canadian Revolving Credit Loans or the Canadian
Term Loan, as applicable, denominated in U.S. Dollars (the "U.S.
Dollar Refunding Amount"). Each such Notice of Canadian Revolving Loan
Refunding and each such Notice of Canadian Term Loan Refunding shall
be deemed to constitute delivery of a notice to the Administrative
Agent requesting each Canadian Participating Lender to immediately
transfer to the Canadian Lender, in immediately available funds, the
amount of such Canadian Participating Lender's participation
denominated in U.S. Dollars and Canadian Dollars, as the case may be,
with reference to the U.S. Dollar Refunding Amount and the Canadian
Dollar Refunding Amount, as the case may be.
(b) Whenever, at any time after a Canadian Participating Lender
has funded a participating interest in a Canadian Revolving Credit
Loan or the Canadian Term Loan, the Canadian Lender receives any
payment on account thereof, the Canadian Lender will distribute to the
Canadian Agent for delivery to such Canadian Participating Lender its
participating interest in such amount (appropriately adjusted, in the
case of interest payments, to reflect the period of time during which
such Canadian Participating Lender's participating interest was
outstanding and funded); provided, however, that in the event that
such payment received by the Canadian Lender is required to be
returned, such Canadian Participating Lender will return to the
Canadian Agent for delivery to
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the Canadian Lender any portion thereof previously distributed by the
Canadian Agent or the Canadian Lender to it.
(c) Each Canadian Participating Lender's obligation to fund the
participating interests referred to in this Section 3.2.6 shall be
absolute and unconditional and shall not be affected by any
circumstances, including, without limitation, (i) any set-off,
counterclaim, recoupment, defense or other right which such Canadian
Participating Lender or any Borrower may have against the Canadian
Lender, any Borrower or any other Person for any reason whatsoever,
(ii) the occurrence or continuance of a Default or an Event of
Default, (iii) any adverse change in the condition (financial or
otherwise) of any Borrower, (iv) any breach of this Agreement or any
other Loan Document by any Borrower, any Guarantor, any Subsidiary of
any Borrower or any other Lender, or (v) any other circumstances,
happening or event whatsoever, whether or not similar to any of the
foregoing.
(d) Notwithstanding anything herein to the contrary, during the
existence of a Default or an Event of Default which would permit the
delivery of a Notice of Canadian Revolving Loan Refunding or a Notice
of Canadian Term Loan Refunding, upon the request of the
Administrative Agent or the Canadian Agent, all or any part of any
outstanding Canadian Revolving Credit Loans or the outstanding
Canadian Term Loan, as the case may be, shall be redenominated and
converted into U.S. Dollar-denominated Canadian Base Rate Loans. The
Administrative Agent will promptly notify the Borrower Representative
of any such redenomination and conversion request.
3.3 Mandatory and Optional Prepayments.
3.3.1 Proceeds of Sale, Loss, Destruction or Condemnation
of Collateral. Except as provided in Sections 6.4.2 and 8.2.11, if any Borrower
or any of its Subsidiaries sells any of the Equipment or real Property (other
than the Foothill Note Collateral), or if any of the Collateral (other than the
Foothill Note Collateral) owned by such Borrower or such Subsidiary is lost or
destroyed or taken by condemnation, such Borrower shall, unless otherwise agreed
by Majority Lenders, pay, in the case of Domestic Borrowers, to Administrative
Agent for the ratable benefit of Lenders, and, in the case of Canadian Borrower,
to Canadian Agent for the benefit of Canadian Lender and the Canadian
Participating Lenders, as and when received by such Borrower or such Subsidiary
and as a mandatory prepayment of the Loans, as herein provided, a sum equal to
the proceeds (including insurance payments but net of costs and taxes incurred
in connection with such sale or event) received by such Borrower or such
Subsidiary from such sale, loss, destruction or condemnation. Any prepayment
under this Section 3.3.1 with respect to Domestic Collateral shall be applied
first to the installments of principal due under the Term Notes evidencing the
Domestic Term Loan ratably, to be applied to future installment payments in
inverse
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order of maturity until paid in full, second to repay ratably outstanding
principal of Domestic Revolving Credit Loans (but shall not permanently reduce
the Domestic Revolving Credit Commitments), and third, to be held by
Administrative Agent as security for repayment of any remaining Obligations. Any
prepayment under this Section 3.3.1 with respect to Canadian Collateral shall be
applied first to the installments of principal due under the Term Note
evidencing the Canadian Term Loan, to be applied ratably to future installment
payments in inverse order of maturity until paid in full, second to repay
ratably outstanding principal of Canadian Revolving Credit Loans (but shall not
permanently reduce the Canadian Revolving Credit Sub-Limit), and third to be
held by Canadian Agent as security for repayment of any remaining Canadian
Obligations. Notwithstanding the foregoing, if the proceeds of insurance (net of
costs and taxes incurred) with respect to any loss or destruction of Equipment,
Inventory or real Property (a) are less than $250,000, unless an Event of
Default is then in existence, Administrative Agent shall remit such proceeds to
the applicable Borrower for use in replacing or repairing the damaged Collateral
or (b) are equal to or greater than $250,000 and the applicable Borrower has
requested that Administrative Agent agree to permit such Borrower or the
applicable Subsidiary to repair or replace the damaged Collateral, such amounts
shall be provisionally applied to reduce the outstanding principal balance of
the applicable Revolving Credit Loans until the earlier of Administrative
Agent's decision with respect thereto or the expiration of 180 days from such
request. If Administrative Agent agrees, in its reasonable judgment, to permit
such repair or replacement under such clause (b), such amount shall, unless an
Event of Default is in existence, be remitted to the applicable Borrower for use
in replacing or repairing the damaged Collateral; if Administrative Agent
declines to permit such repair or replacement or does not respond to the
applicable Borrower within such 180 day period, such amount shall be applied to
the Loans in the manner specified in the second sentence of this Section 3.3.1
until payment thereof in full.
3.3.2 Excess Cash Flow Recapture. Borrowers shall prepay the
Loans in amounts equal to Borrowers' Excess Cash Flow with respect to each
fiscal year of CGI during the Term hereof, commencing with the fiscal year
ending June 30, 2003, such prepayments to be based upon, and made within 5
Business Days following the due date for delivery by Borrowers to Administrative
Agent of the annual financial statements required by Section 8.1.3(a) hereof.
Each such prepayment shall be applied to the Loans as follows: (a) that portion
of Borrowers' Excess Cash Flow which is attributable to Domestic Borrowers' and
their Subsidiaries' (other than Canadian Borrower) operations shall be applied
first to the installments of principal due under the Term Notes evidencing the
Domestic Term Loan ratably, to be applied to future installment payments in
inverse order of maturity until paid in full, and second to repay ratably
outstanding principal of Domestic Revolving Credit Loans (and shall permanently
reduce the Domestic Revolving Credit Commitments); and (b) that portion of
Borrowers' Excess Cash Flow attributable to Canadian Borrower's
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operations shall be applied first to the installments of principal due under the
Term Note evidencing the Canadian Term Loan, to be applied to future installment
payments in inverse order of maturity until paid in full, and second to repay
outstanding principal of Canadian Revolving Credit Loans (and shall permanently
reduce the Canadian Revolving Credit Sub-Limit).
3.3.3 Prepayment Upon Exceeding Commitments and Borrowing Base.
(a) Domestic Revolving Credit Loans. Domestic Borrowers shall
prepay the outstanding principal amount of the Domestic Revolving
Credit Loans on any date on which Domestic Revolving Credit Exposure
of all the Domestic Lenders exceeds the Domestic Borrowing Base then
in effect (minus reserves, if any) or the Revolving Credit Maximum
Amount (minus the outstanding principal amount of the Domestic Term
Loan minus the Dollar Equivalent of the aggregate principal amount of
the outstanding Canadian Revolving Credit Loans minus the Dollar
Equivalent of the outstanding principal amount of the Canadian Term
Loan minus reserves, if any), in the amount of such excess. Any such
prepayment shall be applied to repay ratably outstanding principal of
Domestic Revolving Credit Loans (but shall not permanently reduce the
Domestic Revolving Credit Commitments).
(b) Canadian Revolving Credit Loans. Canadian Borrower shall
prepay the outstanding principal amount of Canadian Revolving Credit
Loans on any date on which the aggregate amount of the Canadian
Revolving Credit Exposure of the Canadian Lender would exceed
(including, without limitation, solely as a result of fluctuation in
exchange rates) the Canadian Borrowing Base then in effect (minus
reserves, if any) minus the Dollar Equivalent of the outstanding
principal amount of the Canadian Term Loan (minus reserves, if any),
in the amount of such excess and in the applicable currency; provided,
however, that if such excess is solely as a result of fluctuation in
exchange rates, such repayment shall not be required to be made until
two Business Days after notice from the Canadian Agent and Canadian
Borrower shall not be obligated to pay such amount unless such excess
is greater than the Dollar Equivalent of an amount equal to 1% of the
Canadian Revolving Credit Sub-Limit then in effect. Any such
prepayment shall be applied to repay ratably outstanding principal of
Canadian Revolving Credit Loans (but shall not permanently reduce the
Canadian Revolving Credit Sub-Limit).
3.3.4 Proceeds from Issuance of Additional Indebtedness or
Equity. If any Borrower issues any additional Indebtedness or obtains any
additional equity in a manner permitted under this Agreement, other than
(provided no Default or Event of Default has occurred and is continuing) for the
purpose of financing an asset
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or stock acquisition approved by the Majority Lenders or repaying the Foothill
Note, such Borrower shall pay, in the case of a Domestic Borrower, to
Administrative Agent for the ratable benefit of Domestic Lenders, and, in the
case of Canadian Borrower, to Canadian Agent for the ratable benefit of Canadian
Lender and the Canadian Participating Lenders, when and as received by such
Borrower and as a mandatory prepayment of the Domestic Obligations or the
Canadian Obligations, respectively, a sum equal to 100% of the net proceeds to
such Borrower of the issuance of such Indebtedness or equity. Any such
prepayment shall be applied to the applicable Loans in the manner specified in
the second sentence of Section 3.3.1 until payment thereof in full.
3.3.5 [Intentionally Omitted].
3.3.6 LIBOR Loans and Canadian Fixed Rate Loans. If the
application of any payment made in accordance with the provisions of this
Section 3.3 at a time when no Event of Default has occurred and is continuing
would result in termination of a LIBOR Loan or a Canadian Fixed Rate Loan prior
to the last day of the Interest Period for such LIBOR Loan or Canadian Fixed
Rate Loan, the amount of such prepayment shall not be applied to such LIBOR Loan
or Canadian Fixed Rate Loan, but will, at Borrower Representative's option, be
held by Administrative Agent, in the case of Domestic Borrowers, or Canadian
Agent, in the case of Canadian Borrower, in a non-interest bearing account or
deposited by the applicable Borrower in an interest-bearing account at a Lender
or another bank satisfactory to Administrative Agent, in the case of Domestic
Borrowers, or Canadian Agent, in the case of Canadian Borrower, in its
discretion, which account is in the name of Administrative Agent, in the case of
Domestic Borrowers, or Canadian Agent, in the case of Canadian Borrower, and
from which account only Administrative Agent or Canadian Agent, as the case may
be, can make any withdrawal, in each case to be applied as such amount would
otherwise have been applied under this Section 3.3 at the earlier to occur of
(a) the last day of the relevant Interest Period or (b) the occurrence of a
Default or an Event of Default.
3.3.7 Optional Term Loan Prepayments. Domestic Borrowers may,
at their option from time to time upon not less than 3 Business Days' prior
written notice to Administrative Agent, prepay installments of the Term Notes
evidencing the Domestic Term Loan, provided that the amount of any such
prepayment is at least $500,000 and in integral multiples of $100,000 above
$500,000, and that such prepayments are made ratably with respect to all such
Term Notes. Canadian Borrower may, at its option from time to time upon not less
than 3 Business Days' prior written notice to Canadian Agent, prepay
installments of the Term Note evidencing the Canadian Term Loan. Any such
optional prepayment shall be credited against the amount of the mandatory
prepayment required under Section 3.3.2 for the fiscal year of CGI in which such
optional prepayment was made. Except for charges
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under Section 3.2.5 applicable to prepayments of LIBOR Loans and Canadian Fixed
Rate Loans, such prepayments shall be without premium or penalty.
3.3.8 Optional Reductions of Commitments. Borrower
Representative may, at its option from time to time upon not less than 3
Business Days' prior written notice to Administrative Agent, terminate in whole
or permanently reduce ratably in part, the unused portion of the Domestic
Revolving Credit Commitments and the Canadian Revolving Credit Sub-Limit,
provided, however, that with respect to any reduction of the Domestic Revolving
Credit Commitments, (a) each such partial reduction shall be in an amount of
$2,000,000 or integral multiples of $1,000,000 in excess thereof and (b) the
aggregate of all optional reductions to the Domestic Revolving Credit
Commitments may not exceed $5,000,000 during any 12 month period or $15,000,000
during the Term, and provided, further, however, that with respect to any
reduction of the Canadian Revolving Credit Sub-Limit, each such partial
reduction shall be in an amount of $100,000 or integral multiples of $100,000 in
excess thereof. Except for charges under Section 3.2.5 applicable to prepayments
of LIBOR Loans and Canadian Fixed Rate Loans and except for charges under
Section 2.7 applicable to termination of the credit facilities provided pursuant
to this Agreement, such prepayments shall be without premium or penalty.
3.4 Application of Payments and Collections.
3.4.1 Collections. All items of payment received by
Administrative Agent by 12:00 noon, Los Angeles time, or by Canadian Agent by
12:00 noon, Toronto time, on any Business Day shall be deemed received on that
Business Day for purposes other than computation of interest. All items of
payment received after 12:00 noon, Los Angeles time, or 12:00 noon, Toronto
time, on any Business Day shall be deemed received on the following Business Day
for purposes other than computation of interest. Each Domestic Borrower
irrevocably waives the right to direct the application of any and all payments
and collections at any time or times hereafter received by Administrative Agent
from or on behalf of Domestic Borrowers or any of their Subsidiaries (other than
Canadian Borrower), and each Domestic Borrower does hereby irrevocably agree
that Administrative Agent shall have the continuing exclusive right to apply and
reapply any and all such payments and collections received at any time or times
hereafter by Administrative Agent or its agent against the Obligations, in such
manner as Administrative Agent may deem advisable, notwithstanding any entry by
Administrative Agent or any Lender upon any of its books and records. Canadian
Borrower irrevocably waives the right to direct the application of any and all
payments and collections at any time or times hereafter received by Canadian
Agent from or on behalf of Canadian Borrower, and Canadian Borrower does hereby
irrevocably agree that Canadian Agent shall have the continuing exclusive right
to apply and reapply any and all such payments and collections
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received at any time or times hereafter by Canadian Agent or its agent against
the Canadian Obligations, in such manner as Canadian Agent may deem advisable,
notwithstanding any entry by Canadian Agent or Canadian Lender or any Canadian
Participating Lender upon any of its books and records. If as the result of
collections of Accounts as authorized by Section 6.2.4 hereof or otherwise, a
credit balance exists in the Domestic Loan Account, such credit balance shall
not accrue interest in favor of Domestic Borrowers, but shall be disbursed to
Domestic Borrowers or otherwise at Borrower Representative's direction in the
manner set forth in Section 3.1.2, upon Borrower Representative's request at any
time, so long as no Default or Event of Default then exists. If as the result of
collections of Accounts authorized by Section 6.2.4 hereof or otherwise, a
credit balance exists in the Canadian Loan Account, such credit balance shall
not accrue interest in favor of Canadian Borrower, but shall be disbursed to
Canadian Borrower or otherwise at Borrower Representative's direction in the
manner set forth in Section 3.1.2, upon Borrower Representative's request at any
time, so long as no Default or Event of Default then exists. Administrative
Agent may at its option, offset such credit balance with respect to the Domestic
Loan Account against any of the Obligations upon and during the continuance of
an Event of Default. Canadian Agent may at its option, offset such credit
balance with respect to the Canadian Loan Account against any of the Canadian
Obligations upon and during the continuance of an Event of Default.
3.4.2 Apportionment; Application and Reversal of Payments.
Principal and interest payments shall be apportioned ratably among the Lenders
(according to the unpaid principal balance of the Loans to which such payments
relate held by each Lender). All payments by Domestic Borrowers shall be
remitted to Administrative Agent, and all such payments not relating to
principal or interest of specific Loans, or not constituting payment of specific
fees, and all proceeds of Accounts or, except as provided in Section 3.3.1,
other Collateral received by Administrative Agent, shall be applied, ratably,
subject to the provisions of this Agreement, first, to pay any fees,
indemnities, or expense reimbursements then due to Administrative Agent, Bank or
Lenders from Domestic Borrowers; second, to pay interest due from Domestic
Borrowers in respect of all Domestic Revolving Credit Loans and the Domestic
Term Loan; third, to pay or prepay principal of the Domestic Term Loan; fourth,
to pay or prepay principal of the Domestic Revolving Credit Loans and unpaid
reimbursement obligations in respect of Letters of Credit; fifth, to pay an
amount to Administrative Agent equal to the available amount of all outstanding
Letters of Credit to be held as cash collateral for reimbursement and fee
obligations in respect of such Letters of Credit; and sixth, to the payment of
any other Domestic Obligations due to the Administrative Agent, Bank or any
Lender by Domestic Borrowers. All payments by Canadian Borrower shall be
remitted to Canadian Agent, and all such payments not relating to principal or
interest of specific Loans, or not constituting payment of specific fees, and
all proceeds of Accounts or, except as provided in Section 3.3.1, other
Collateral received by Canadian Agent, shall be
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applied, ratably, subject to the provisions of this Agreement, first, to pay any
fees, indemnities, or expense reimbursements then due to Canadian Agent,
Canadian Lender or Canadian Participating Lender from Canadian Borrower; second,
to pay interest due from Canadian Borrower in respect of all Canadian Revolving
Credit Loans and the Canadian Term Loan; third, to pay or prepay principal of
the Canadian Term Loan; fourth, to pay or prepay principal of the Canadian
Revolving Credit Loan; and fifth, to the payment of any other Canadian
Obligations due to the Canadian Agent, the Canadian Lender or any Canadian
Participating Lender by Canadian Borrower. After the occurrence and during the
continuance of an Event of Default, Administrative Agent and Canadian Agent
shall have the continuing exclusive right to apply and reapply any and all such
payments and collections received at any time or times hereafter by
Administrative Agent or Canadian Agent or their agents against the Domestic
Obligations and the Canadian Obligations, respectively, in such manner as
Administrative Agent or Canadian Agent may deem advisable, notwithstanding any
entry by Administrative Agent, Canadian Agent, Bank or any Lender upon any of
its books and records.
3.5 All Loans to Constitute One Obligation.
The Domestic Revolving Credit Loans and the Domestic Term Loan shall
constitute one general joint and several Obligation of Domestic Borrowers, and
shall be secured by Administrative Agent's (for the benefit of itself, Canadian
Agent, Bank and each Lender) Lien upon all of the Domestic Collateral. The
Canadian Revolving Credit Loans and the Canadian Term Loan shall constitute one
general Obligation of Canadian Borrower, and shall be secured by Administrative
Agent's (for the benefit of itself, Canadian Agent, Bank and each Lender) Lien
upon all of the Domestic Collateral and Canadian Agent's (on behalf of itself,
Canadian Lender and the Canadian Participating Lenders) Lien upon all of the
Canadian Collateral.
3.6 Loan Account.
Administrative Agent shall enter all Domestic Revolving Credit Loans and
the Domestic Term Loan as debits to a loan account (the "Domestic Loan
Account"), and the Canadian Agent shall enter all Canadian Revolving Credit
Loans and the Canadian Term Loan as debits to a loan account (the "Canadian Loan
Account" and, together with the Domestic Loan Account, each a "Loan Account"),
and shall also record in the relevant Loan Account all payments made by the
relevant Borrowers on any Obligations and all proceeds of the relevant
Collateral which are finally paid to Administrative Agent or Canadian Agent, as
the case may be, and may record therein, in accordance with customary accounting
practice, other debits and credits, including interest and all charges and
expenses properly chargeable to Borrowers pursuant to this Agreement or any
other Loan Document.
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3.7 Statements of Account.
Administrative Agent will account to Borrower Representative monthly with a
statement of Loans, charges and payments made pursuant to this Agreement during
the immediately preceding month, and such account rendered by Administrative
Agent shall be deemed final, binding and conclusive upon Borrowers absent
demonstrable error unless Administrative Agent is notified by Borrower
Representative in writing to the contrary within 30 days of the date each
accounting is received by Borrower Representative. Such notice shall only be
deemed an objection to those items specifically objected to therein.
3.8 Sharing of Payments, Etc.
3.8.1 If any Domestic Lender shall obtain any payment (whether
voluntary, involuntary, through the exercise of any right of set-off, or
otherwise) on account of any Domestic Revolving Credit Loan or the portion of
the Domestic Term Loan made by it in excess of its ratable share of payments on
account of such Loans made by all Domestic Lenders, such Domestic Lender shall
forthwith purchase from each other Domestic Lender such participation in such
Loans as shall be necessary to cause such purchasing Domestic Lender to share
the excess payment ratably with each other Domestic Lender; provided, that if
all or any portion of such excess payment is thereafter recovered from such
purchasing Domestic Lender, such purchase from each Domestic Lender shall be
rescinded and such Domestic Lenders shall repay to the purchasing Domestic
Lender the purchase price to the extent of such recovery, together with an
amount equal to such Domestic Lender's ratable share (according to the
proportion of (i) the amount of such Domestic Lender's required repayment to
(ii) the total amount so recovered from the purchasing Domestic Lender) of any
interest or other amount paid or payable by the purchasing Domestic Lender in
respect of the total amount so recovered. Each Borrower agrees that any Domestic
Lender so purchasing a participation from another Domestic Lender pursuant to
this Section 3.8.1 may, to the fullest extent permitted by law, exercise all its
rights of payment (including the right of set-off) with respect to such
participation as fully as if such Domestic Lender were the direct creditor of
Borrowers in the amount of such participation. Notwithstanding anything to the
contrary contained herein, all purchases and repayments to be made under this
Section 3.8.1 shall be made through Administrative Agent.
3.8.2 If Canadian Lender or any Canadian Participating Lender shall
obtain any payment (whether voluntary, involuntary, through the exercise of any
right of set-off, or otherwise) on account of any Canadian Revolving Credit Loan
or any portion of the Canadian Term Loan made or refunded by it in excess of its
ratable share of payments on account of such Loans made or refunded by Canadian
Agent and Canadian Participating Lenders in the aggregate, such Lender shall
forthwith purchase from Canadian Lender and each other Canadian Participating
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Lender such participation in such Loans as shall be necessary to cause such
purchasing Lender to share the excess payment ratably with Canadian Lender and
each other Canadian Participating Lender; provided, that if all or any portion
of such excess payment is thereafter recovered from such purchasing Lender, such
purchase from Canadian Lender and each Canadian Participating Lender shall be
rescinded and Canadian Lender and such Canadian Participating Lenders shall
repay to the purchasing Lender the purchase price to the extent of such
recovery, together with an amount equal to such Lender's ratable share
(according to the proportion of (i) the amount of such Lender's required
repayment to (ii) the total amount so recovered from the purchasing Lender) of
any interest or other amount paid or payable by the purchasing Lender in respect
of the total amount so recovered. Each Borrower agrees that Canadian Lender and
any Canadian Participating Lender so purchasing a participation from Canadian
Lender or a Canadian Participating Lender pursuant to this Section 3.8.2 may, to
the fullest extent permitted by law, exercise all its rights of payment
(including the right of set-off) with respect to such participation as fully as
if such Lender were the direct creditor of Borrowers in the amount of such
participation. Notwithstanding anything to the contrary contained herein, all
purchases and repayments to be made under this Section 3.8.2 shall be made
through Canadian Agent.
3.9 Increased Costs.
If any law or any governmental or quasi-governmental rule, regulation,
policy, guideline or directive (whether or not having the force of law) adopted
or implemented after the date of this Agreement and having general applicability
to all banks or finance companies within the jurisdiction in which any Lender
operates (excluding, for the avoidance of doubt, the effect of and phasing in of
capital requirements or other regulations or guidelines passed prior to the date
of this Agreement), or any interpretation or application thereof by any
governmental authority charged with the interpretation or application thereof,
or the compliance of such Lender therewith, shall:
(a) (i) subject such Lender to any tax with respect to this Agreement
(other than any tax based on or measured by net income or otherwise in the
nature of a net income tax) or (ii) change the basis of taxation of
payments to such Lender of principal, fees, interest or any other amount
payable hereunder or under any Loan Documents (other than in respect of any
tax based on or measured by net income or otherwise in the nature of a net
income tax);
(b) impose, modify or hold applicable any reserve (except any reserve
taken into account in the determination of the applicable LIBOR), special
deposit, assessment or similar requirement against assets held by, or
deposits in or for the account of, advances or loans by, or other credit
extended
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by, any office of such Lender, including (without limitation) pursuant to
Regulation D of the Board of Governors of the Federal Reserve System; or
(c) impose on such Lender or the London interbank market or Canadian
BA market any other condition with respect to any Loan Document
and the result of any of the foregoing is to increase the cost to such Lender of
making, renewing or maintaining its Loans hereunder by an amount that such
Lender deems to be material or the result of any of the foregoing is to reduce
the rate of return on such Lender's capital as a consequence of its obligations
hereunder, or the result of any of the foregoing is to reduce the amount of any
payment (whether of principal, interest or otherwise) in respect of any of such
Loans by an amount that such Lender deems to be material, then, in any such
case, the applicable Borrower(s) shall pay such Lender, upon demand and
certification not later than sixty (60) days following Borrower Representative's
receipt of notice of the imposition of such increased costs, such additional
amount as will compensate such Lender for such additional cost or such
reduction, as the case may be, to the extent such Lender has not otherwise been
compensated, with respect to a particular Loan, for such increased cost as a
result of an increase in the Base Rate, Canadian Base Rate, LIBOR or a Canadian
Fixed Rate. An officer of such Lender shall determine the amount of such
additional cost or reduced amount using reasonable averaging and attribution
methods and shall certify the amount of such additional cost or reduced amount
to Borrower Representative, which certification shall include a written
explanation of such additional cost or reduction to Borrower Representative.
Such certification shall be conclusive absent manifest error. If a Lender claims
any additional cost or reduced amount pursuant to this Section 3.9, then such
Lender shall use reasonable efforts (consistent with legal and regulatory
restrictions) to designate a different lending office or to file any certificate
or document reasonably requested by Borrower Representative if the making of
such designation or filing would avoid the need for, or reduce the amount of,
any such additional cost or reduced amount and would not, in the sole discretion
of such Lender, be otherwise disadvantageous to such Lender.
3.10 Basis for Determining Interest Rate Inadequate or Unfair.
In the event that Administrative Agent shall have determined that:
(a) reasonable means do not exist for ascertaining the LIBOR or a
Canadian Fixed Rate for any Interest Period; or
(b) Dollar deposits in the relevant amount and for the relevant
maturity are not available in the London interbank market with respect to a
proposed LIBOR Loan or Canadian Fixed Rate Loan, or a proposed conversion
of a Base Rate Loan into a LIBOR Loan or of a Canadian Base Rate Loan into
a Canadian Fixed Rate Loan; then
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Administrative Agent shall give Borrower Representative prompt written,
telephonic or electronic notice of the determination of such event. If such
notice is given, (i) any such requested LIBOR Loan shall be made as a Base Rate
Loan, and any such requested Canadian Fixed Rate Loan shall be made as a
Canadian Base Rate Loan, as applicable, unless Borrower Representative shall
notify Administrative Agent, with respect to LIBOR Loans, no later than 10:00
a.m. (Los Angeles time) three (3) Banking Days prior to, or, with respect to
Canadian Fixed Rate Loans, no later than 10:00 a.m. (Los Angeles time) four (4)
Business Days prior to, the date of such proposed borrowing that the request for
such borrowing shall be canceled or made as an unaffected type of LIBOR Loan or
Canadian Fixed Rate Loan, and (ii) any Base Rate Loan or Canadian Base Rate Loan
which was to have been converted to an affected type of LIBOR Loan or Canadian
Fixed Rate Loan shall be continued as or converted into a Base Rate Loan or
applicable Canadian Base Rate Loan, as the case may be, or, if Borrower
Representative shall notify Administrative Agent, with respect to LIBOR Loans,
no later than 10:00 a.m. (Los Angeles time) three (3) Business Days prior to,
or, with respect to Canadian Fixed Rate Loans, no later than 10:00 a.m. (Los
Angeles time) four (4) Business Days prior to, the proposed conversion, shall be
maintained as an unaffected type of LIBOR Loan or applicable Canadian Fixed Rate
Loan, as the case may be.
SECTION 4. TERM AND TERMINATION
4.1 Term of Agreement.
Subject to the right of Lenders to cease making Loans to Borrowers during
the continuance of any Default or Event of Default, this Agreement shall be in
effect for a period of three (3) years from the date hereof, through and
including September 26, 2005 (the "Term"), unless terminated as provided in
Section 4.2 hereof.
4.2 Termination.
4.2.1 Termination by Lenders. Administrative Agent may, and at the
direction of Majority Lenders shall, terminate this Agreement without notice
upon or after the occurrence and during the continuance of an Event of Default.
4.2.2 Termination by Borrower Representative. Upon at least 90 days
prior written notice to Administrative Agent and Lenders, Borrower
Representative may, at its option, terminate this Agreement; provided, however,
no such termination shall be effective until Borrowers have paid or
collateralized to Administrative Agent's reasonable satisfaction all of the
Obligations in immediately available funds, all Letters of Credit and LC
Guaranties have expired, terminated or have been cash collateralized to
Administrative Agent's reasonable satisfaction and Borrowers have complied with
Sections 2.7 and 3.2.5. Any notice of termination given by Borrower
Representative shall be irrevocable unless all Lenders otherwise
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agree in writing, and no Lender shall have any obligation to make any Loans or
issue or procure any Letters of Credit or LC Guaranties on or after the
termination date stated in such notice. Borrower Representative may elect to
terminate this Agreement in its entirety only. No section of this Agreement or
type of Loan available hereunder may be terminated singly.
4.2.3 Effect of Termination. All of the Obligations shall be
immediately due and payable upon the termination date stated in any notice of
termination of this Agreement. All undertakings, agreements, covenants,
warranties and representations of Borrowers and their Subsidiaries contained in
the Loan Documents shall survive any such termination and Administrative Agent
and Canadian Agent shall retain their Liens in the Collateral and Administrative
Agent, Canadian Lender and each Lender shall retain all of its rights and
remedies under the Loan Documents notwithstanding such termination until all
Obligations have been discharged or paid, in full, in immediately available
funds, including, without limitation, all Obligations under Sections 2.7 and
3.2.5 resulting from such termination. Notwithstanding the foregoing or the
payment in full of the Obligations, neither Administrative Agent nor Canadian
Agent shall be required to terminate its Liens in the Collateral unless, with
respect to any loss or damage Administrative Agent or Canadian Agent may incur
as a result of dishonored checks or other items of payment received by
Administrative Agent or Canadian Agent from Borrowers or any of their
Subsidiaries or any Account Debtor and applied to the Obligations,
Administrative Agent shall, at its option, (a) have received a written agreement
satisfactory to Administrative Agent, executed by Borrowers and/or their
Subsidiaries and by any Person whose loans or other advances to Borrowers and/or
their Subsidiaries are used in whole or in part to satisfy the Obligations,
indemnifying Administrative Agent, Canadian Agent and each Lender from any such
loss or damage or (b) have retained cash collateral for such period of time as
Administrative Agent, in its reasonable discretion, may deem necessary to
protect Administrative Agent, Canadian Agent and each Lender from any such loss
or damage.
SECTION 5. SECURITY INTERESTS
5.1 Security Interest in Collateral.
5.1.1 To secure the prompt payment and performance to Administrative
Agent, Canadian Agent, Bank and each Lender of the Obligations (including,
without limitation, the obligations of Domestic Borrowers under the Domestic
Borrower Guaranty), each of the Domestic Borrowers hereby grants to
Administrative Agent for the benefit of itself, Canadian Agent, Bank and each
Lender a continuing Lien upon all of such Domestic Borrower's assets, including
all of the following Property and interests in Property of such Domestic
Borrower, whether now owned or existing or hereafter created, acquired or
arising and wheresoever located:
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(a) Accounts;
(b) Certificated Securities;
(c) Chattel Paper;
(d) Computer Hardware and Software and all rights with respect
thereto, including, any and all licenses, options, warranties, service
contracts, program services, test rights, maintenance rights, support
rights, improvement rights, renewal rights and indemnifications, and any
substitutions, replacements, additions or model conversions of any of the
foregoing;
(e) Contract Rights;
(f) Deposit Accounts;
(g) Documents;
(h) Equipment, other than the Foothill Note Collateral; provided,
however, immediately upon CTSI's payment of the Foothill Note in full, CTSI
shall execute and deliver to Administrative Agent such additional Security
Documents as the Administrative Agent reasonably may require for the grant
by CTSI to Administrative Agent and Canadian Agent of a perfected and
first-priority Lien on the Foothill Note Collateral;
(i) Financial Assets;
(j) Fixtures;
(k) General Intangibles, including Payment Intangibles and Software;
(l) Goods (including all of its Equipment, Fixtures and Inventory),
and all accessions, additions, attachments, improvements, substitutions and
replacements thereto and therefor;
(m) Instruments (including promissory notes, if any, issued to such
Borrower by any Subsidiary of CGI in connection with Permitted Intercompany
Loans);
(n) Intellectual Property; (o) Inventory; (p) Investment Property;
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(q) money (of every jurisdiction whatsoever);
(r) Letter-of-Credit Rights;
(s) Payment Intangibles;
(t) Security Entitlements;
(u) Software;
(v) Supporting Obligations;
(w) Uncertificated Securities; and
(x) to the extent not included in the foregoing, all other personal
property of any kind or description;
together with all books, records, writings, data bases, information and other
property relating to, used or useful in connection with, or evidencing,
embodying, incorporating or referring to any of the foregoing, and all Proceeds,
products, offspring, rents, issues, profits and returns of and from any of the
foregoing; provided that to the extent that the provisions of any lease or
license of Computer Hardware and Software or Intellectual Property expressly
prohibit (which prohibition is enforceable under applicable law) any assignment
thereof, and the grant of a security interest therein, Administrative Agent will
not enforce its security interest in the applicable Domestic Borrower's rights
under such lease or license (other than in respect of the Proceeds thereof) for
so long as such prohibition continues, it being understood that upon request of
Administrative Agent, the applicable Domestic Borrower will in good faith use
reasonable efforts to obtain consent for the creation of a security interest in
favor of Administrative Agent (and to Administrative Agent's enforcement of such
security interest) in such Domestic Borrower's rights under such lease or
license.
5.1.2 To secure the prompt payment and performance to Canadian Agent,
Canadian Lender and each Canadian Participating Lender of the Canadian
Obligations, Canadian Borrower hereby grants to Canadian Agent for the benefit
of itself, Canadian Lender and each Canadian Participating Lender a continuing
security interest upon all of Canadian Borrower's assets, including all of the
following Property and interests in Property of Canadian Borrower, whether now
owned or existing or hereafter created, acquired or arising and wheresoever
located:
(a) Accounts;
(b) Certificated Securities;
(c) Chattel Paper;
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(d) Computer Hardware and Software and all rights with respect
thereto, including, any and all licenses, options, warranties, service
contracts, program services, test rights, maintenance rights, support
rights, improvement rights, renewal rights and indemnifications, and any
substitutions, replacements, additions or model conversions of any of the
foregoing;
(e) Contract Rights;
(f) Deposit Accounts;
(g) Documents;
(h) Equipment;
(i) Financial Assets;
(j) Fixtures;
(k) General Intangibles, including Payment Intangibles and Software;
(l) Goods (including all of its Equipment, Fixtures and Inventory),
and all accessions, additions, attachments, improvements, substitutions and
replacements thereto and therefor;
(m) Instruments;
(n) Intellectual Property;
(o) Inventory;
(p) Investment Property;
(q) money (of every jurisdiction whatsoever);
(r) Letter-of-Credit Rights;
(s) Payment Intangibles;
(t) Security Entitlements;
(u) Software;
(v) Supporting Obligations;
(w) Uncertificated Securities; and
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(x) to the extent not included in the foregoing, all other personal
property of any kind or description;
together with all books, records, writings, data bases, information and other
property relating to, used or useful in connection with, or evidencing,
embodying, incorporating or referring to any of the foregoing, and all Proceeds,
products, offspring, rents, issues, profits and returns of and from any of the
foregoing; provided, however, that notwithstanding the foregoing this Section
5.1.2 shall not constitute a grant of a security interest in any property to the
extent that such grant of a security interest is prohibited by any Requirements
of Law, requires a consent not obtained of any governmental authority pursuant
to such Requirement of Law or is prohibited by, or constitutes a breach or
default under or results in the termination of or requires any consent not
obtained under, any contract, license, agreement, instrument or other document
evidencing or giving rise to such property or, in the case of any Investment
Property, any applicable shareholder or similar agreement, except to the extent
that such Requirement of Law or the term in such contract, license, agreement,
instrument or other document or shareholder or similar agreement providing for
such prohibition, breach, default or termination or requiring such consent is
ineffective under applicable law, it being understood that upon request of
Canadian Agent, Canadian Borrower will in good faith use reasonable efforts to
obtain consent for the creation of a security interest in favor of Canadian
Agent (and to Canadian Agent's enforcement of such security interest) in
Canadian Borrower's rights under such lease or license.
5.2 Other Collateral.
5.2.1 Commercial Tort Claims. Each Domestic Borrower shall promptly
notify Administrative Agent in writing upon incurring or otherwise obtaining a
Commercial Tort Claim after the Closing Date against any third party and, upon
request of Administrative Agent, promptly enter into an amendment to this
Agreement and do such other acts or things deemed appropriate by Administrative
Agent to give Administrative Agent a security interest in any such Commercial
Tort Claim.
5.2.2 Other Collateral. Each Borrower shall promptly notify
Administrative Agent or Canadian Agent, as the case may be, in writing upon
acquiring or otherwise obtaining any Collateral after the date hereof consisting
of Deposit Accounts, Investment Property, Letter of Credit Rights or Electronic
Chattel Paper and, upon the request of Administrative Agent or Canadian Agent,
as the case may be, promptly execute such other documents, and do such other
acts or things deemed appropriate by Administrative Agent or Canadian Agent, as
the case may be, to deliver to Administrative Agent or Canadian Agent, as the
case may be, control with respect to such Collateral; promptly notify
Administrative Agent or Canadian Agent, as the case may be, in writing upon
acquiring or otherwise obtaining any Collateral after the date hereof consisting
of Documents (and Documents of Title, as defined in
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the PPSA) or Instruments and, upon the request of Administrative Agent or
Canadian Agent, as the case may be, will promptly execute such other documents,
and do such other acts or things deemed appropriate by Administrative Agent or
Canadian Agent, as the case may be, to deliver to Administrative Agent or
Canadian Agent, as the case may be, possession of such Documents (and Documents
of Title, as defined in the PPSA) which are negotiable and Instruments, and,
with respect to nonnegotiable Documents (and Documents of Title, as defined in
the PPSA), to have such nonnegotiable Documents (and Documents of Title, as
defined in the PPSA) issued in the name of Administrative Agent or Canadian
Agent, as the case may be; and with respect to Collateral in the possession of a
third party, other than Certificated Securities and Goods covered by a Document,
obtain an acknowledgement from the third party that it is holding the Collateral
for the benefit of Administrative Agent or Canadian Agent, as the case may be.
5.3 Lien Perfection; Further Assurances.
Each Borrower hereby authorizes Administrative Agent to file such UCC-1 and
PPSA financing statements as are required by the UCC or the PPSA and such other
instruments, assignments or documents as are necessary to perfect Administrative
Agent's Lien upon any of the Domestic Collateral and Canadian Agent's Lien upon
any of the Canadian Collateral, and shall take such other action as may be
required to perfect or to continue the perfection of Administrative Agent's Lien
upon the Domestic Collateral and Canadian Agent's Lien upon the Canadian
Collateral. Without limiting the generality of the preceding sentence, each
Borrower hereby irrevocably authorizes Administrative Agent and Canadian Agent,
as applicable, to file any such financing statements, including, without
limitation, financing statements that indicate the portion of the Collateral
owned by such Borrower (a) as all assets of such Borrower or words of similar
effect, or (b) as being of an equal or lesser scope, or with greater or lesser
detail, than as set forth in Section 5.1. Each Borrower also hereby ratifies its
authorization for Administrative Agent and Canadian Agent, as the case may be,
to have filed in any jurisdiction any like financing statements or amendments
thereto if filed prior to the date hereof. The parties agree that a carbon,
photographic or other reproduction of this Agreement shall be sufficient as a
financing statement for the purposes of the UCC and may be filed in any
appropriate office in lieu thereof. At Administrative Agent's or Canadian
Agent's request, each Borrower shall also promptly execute or cause to be
executed and shall deliver to Administrative Agent or Canadian Agent, as the
case may be, any and all documents, instruments and agreements deemed necessary
by Administrative Agent or Canadian Agent, as the case may be, to give effect to
or carry out the terms or intent of the Loan Documents.
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5.4 Lien on Realty.
The due and punctual payment and performance of the Obligations shall also
be secured by the Lien created by Mortgages upon all real Property of each
Domestic Borrower now or hereafter owned. The due and punctual payment and
performance of the Canadian Obligations shall also be secured by the Lien
created by Mortgages upon all real Property of Canadian Borrower now or
hereafter owned. Each Mortgage shall be executed by the applicable Borrower in
favor of Administrative Agent or Canadian Agent, as the case may be. Each
Mortgage shall be duly recorded, at Borrowers' expense, in each office where
such recording is required to constitute a fully perfected first Lien on the
real Property covered thereby. Each applicable Borrower shall deliver to
Administrative Agent or Canadian Agent, as the case may be, at Borrowers'
expense, mortgagee title insurance policies issued by a title insurance company
satisfactory to Administrative Agent or Canadian Agent, as the case may be,
which policies shall be in form and sub stance satisfactory to Administrative
Agent or Canadian Agent, as the case may be, and shall insure a valid first Lien
in favor of Administrative Agent (for the benefit of itself, Canadian Agent,
Bank and the Lenders), or in favor of Canadian Agent (for the benefit of itself,
Canadian Lender and the Canadian Participating Lenders), as the case may be, on
the Property covered by each Mortgage, subject only to those exceptions
acceptable to Administrative Agent or Canadian Agent, as the case may be, and
its counsel. Each applicable Borrower shall deliver to Administrative Agent or
Canadian Agent, as the case may be, such other documents, including, without
limitation, as-built survey prints of the real Property, as Administrative Agent
or Canadian Agent, as the case may be, and its counsel may request relating to
the real Property subject to the Mortgages.
5.5 Lien on Investment Property.
Within 30 days after the Closing Date, Borrowers shall cause Morgan Stanley
& Co. to enter into a control agreement with Administrative Agent, in form and
substance acceptable to Administrative Agent, with respect to all securities,
securities accounts and other investment property maintained by any Borrower
with Morgan Stanley & Co.
SECTION 6. COLLATERAL ADMINISTRATION
6.1 General.
6.1.1 Location of Collateral. All tangible Collateral, other than
Deposit Accounts, Inventory in transit, tractors and trailers, and tangible
Collateral in the Administrative Agent's possession will at all times be kept by
the applicable Borrowers and their Subsidiaries at one or more of the business
locations set forth in Exhibit 6.1.1 hereto.
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6.1.2 Insurance of Collateral. Each Borrower shall maintain and pay
for insurance upon all Collateral owned by such Borrower wherever located and
with respect to the business of such Borrower and each of its Subsidiaries,
covering casualty, hazard, public liability, workers' compensation and such
other risks in such amounts and with such insurance companies as are reasonably
satisfactory to Administrative Agent. Each Borrower shall deliver certified
copies of such policies to Administrative Agent and Canadian Agent as promptly
as practicable, with satisfactory lender's loss payable endorsements, naming
Administrative Agent, with respect to Domestic Collateral, and Canadian Agent,
with respect to Canadian Collateral, as a loss payee, assignee or additional
insured, as appropriate, as its interest may appear, and showing only such other
loss payees, assignees and additional insureds as are satisfactory to
Administrative Agent and Canadian Agent, as the case may be. Each policy of
insurance or endorsement shall contain a clause requiring the insurer to give
not less than 10 days' prior written notice to Administrative Agent or Canadian
Agent, as the case may be, in the event of cancellation of the policy for
nonpayment of premium and not less than 30 days' prior written notice to
Administrative Agent or Canadian Agent, as the case may be, in the event of
cancellation of the policy for any other reason whatsoever and a clause
specifying that the interest of Administrative Agent or Canadian Agent, as the
case may be, shall not be impaired or invalidated by any act or neglect of the
applicable Borrower, any of its Subsidiaries or the owner of the Property or by
the occupation of the premises for purposes more hazardous than are permitted by
said policy. Borrower Representative agrees to deliver to Administrative Agent
and Canadian Agent, as the case may be, promptly as rendered, true copies of all
reports made in any reporting forms to insurance companies. All proceeds of
business interruption insurance (if any) of Borrowers and their Subsidiaries
shall be remitted to Administrative Agent or Canadian Agent, as the case may be,
for application to the outstanding balance of the Revolving Credit Loans.
Unless Borrower Representative provides Administrative Agent and Canadian
Agent, as the case may be, with evidence of the insurance coverage required by
this Agreement, Administrative Agent or Canadian Agent, as the case may be, may
purchase insurance at Borrowers' expense to protect Administrative Agent's and
Canadian Agent's, as the case may be, interests in the Properties of Borrowers
and their Subsidiaries. This insurance may, but need not, protect the interests
of Borrowers and their Subsidiaries. The coverage that Administrative Agent or
Canadian Agent, as the case may be, purchases may not pay any claim that
Borrowers or any Subsidiary makes or any claim that is made against Borrowers or
any such Subsidiary in connection with said Property. Borrower Representative
may later cancel any insurance purchased by Administrative Agent or Canadian
Agent, but only after (a) providing Administrative Agent or Canadian Agent, as
the case may be, with evidence that Borrowers and their Subsidiaries have
obtained insurance as required by this Agreement, and (b) Administrative Agent
or Canadian Agent, as the case may be,
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shall have approved such insurance. If Administrative Agent or Canadian Agent
purchases insurance, Borrowers will be responsible for the costs of that
insurance, including interest and any other charges Administrative Agent or
Canadian Agent, as the case may be, may impose in connection with the placement
of insurance, until the effective date of the cancellation or expiration of the
insurance. The costs of the insurance may be added to the Obligations. The costs
of the insurance may be more than the cost of insurance that Borrowers and their
Subsidiaries may be able to obtain on their own.
6.1.3 Protection of Collateral. Neither Administrative Agent, Canadian
Agent, nor Lenders shall be liable or responsible in any way for the safekeeping
of any of the Collateral or for any loss or damage thereto (except for
reasonable care in the custody thereof while any Collateral is in Administrative
Agent's, Canadian Agent's or any Lender's actual possession) or for any
diminution in the value thereof, or for any act or default of any warehouseman,
carrier, forwarding agency, or other person whomsoever, but the same shall be at
the applicable Borrower's or Subsidiary's sole risk.
6.2 Administration of Accounts.
6.2.1 Records, Schedules and Assignments of Accounts. Each Borrower
shall keep (and shall cause each of its Subsidiaries to keep) accurate and
complete records of its Accounts and all payments and collections thereon and
Borrowers shall submit to Administrative Agent and Canadian Agent on such
periodic basis as Administrative Agent or Canadian Agent shall request a sales
and collections report for the preceding period, in form consistent with the
reports currently prepared by Borrowers and their Subsidiaries with respect to
such information. Concurrently with the delivery of each Borrowing Base
Certificate required by Section 8.1.4, or more frequently as reasonably
requested by Administrative Agent or Canadian Agent, from and after the date
hereof, Borrower Representative shall deliver to Administrative Agent and
Canadian Agent a detailed aged trial balance of all Accounts of Borrowers and
their Subsidiaries, and upon Administrative Agent's or Canadian Agent's request
therefor, copies of proof of delivery and the original copy of all documents,
including, without limitation, repayment histories and present status reports
relating to the Accounts so scheduled and such other matters and information
relating to the status of then existing Accounts as Administrative Agent or
Canadian Agent shall reasonably request.
6.2.2 If an Account of a Borrower (or any of its Subsidiaries)
includes a charge for any tax payable to any governmental taxing authority,
Administrative Agent and Canadian Agent, as the case may be, is authorized, in
its sole discretion, to pay the amount thereof to the proper taxing authority
for the account of the applicable Borrower or Subsidiary and to charge Borrowers
therefor, except for taxes that (i) are being actively contested in good faith
and by appropriate proceedings
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and with respect to which the applicable Borrower or Subsidiary maintains
reasonable reserves on its books therefor and (ii) would not reasonably be
expected to result in any Lien other than a Permitted Lien. In no event shall
Administrative Agent, Canadian Agent or any Lender be liable for any taxes to
any governmental taxing authority that may be due by any Borrower or any
Subsidiary of a Borrower.
6.2.3 Account Verification. Any of Administrative Agent's or Canadian
Agent's officers, employees or agents shall have the right, at any time or times
hereafter, in the name of Administrative Agent or Canadian Agent, any designee
of Administrative Agent, Canadian Agent or any Borrower or any of its
Subsidiaries, to verify the validity, amount or any other matter relating to any
Accounts owned by any such Person by mail, telephone, telegraph or otherwise;
provided, that unless a Default or an Event of Default is then in existence,
prior to conducting each set of verifications, Administrative Agent and Canadian
Agent shall generally consult with the applicable Borrower or Subsidiary about
the verification process. Each Borrower shall (and shall cause each of its
Subsidiaries to) cooperate fully with Administrative Agent and Canadian Agent in
an effort to facilitate and promptly conclude any such verification process.
6.2.4 Maintenance of Dominion Accounts. Commencing no later than
forty-five (45) days after the Closing Date, each Borrower shall maintain, and
shall cause each Subsidiary of such Borrower to maintain (other than Restricted
Subsidiaries), at Borrowers' expense, a Dominion Account or Accounts pursuant to
lockbox and blocked account arrangements acceptable to Administrative Agent, in
the case of Domestic Borrowers and their Subsidiaries (other than Canadian
Borrower and Restricted Subsidiaries), and Canadian Agent, in the case of
Canadian Borrower, with such banks as may be selected by such Borrowers and be
acceptable to Administrative Agent and Canadian Agent, as applicable, for direct
deposit of payments and other remittances. No later than forty-five (45) days
after the Closing Date, each Domestic Borrower shall issue, and shall cause each
of its Subsidiaries (other than Canadian Borrower and Restricted Subsidiaries)
to issue, to any such banks an irrevocable letter of instruction directing such
banks to deposit all payments or other remittances received in the lockbox and
blocked accounts to such Borrower's Dominion Account for daily application on
account of the Obligations, and Canadian Borrower shall issue to any such banks
an irrevocable letter of instruction directing such banks to deposit all
payments or other remittances received in the lockbox and blocked accounts to
Canadian Borrower's Dominion Account for application on account of the Canadian
Obligations in the event of the occurrence of an Event of Default. All funds
deposited in any Dominion Account shall immediately become the property of, in
the case of Domestic Borrowers and their Subsidiaries (other than Canadian
Borrower and Restricted Subsidiaries), Administrative Agent, for the ratable
benefit of Lenders, and, in the case of Canadian Borrower, Canadian Agent, for
the ratable benefit of Canadian Lender and the Canadian Participating Lenders,
and the applicable Borrowers shall
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obtain (and shall cause their applicable Subsidiaries to obtain) the agreement
by such banks in favor of Administrative Agent and Canadian Agent, as
applicable, to waive any offset rights against the funds so deposited. Neither
Administrative Agent nor Canadian Agent assumes any responsibility for such
lockbox and blocked account arrangements, including, without limitation, any
claim of accord and satisfaction or release with respect to deposits accepted by
any bank thereunder.
6.2.5 Collection of Accounts, Proceeds of Collateral. To expedite
collection, each Borrower shall endeavor in the first instance, and shall cause
its Subsidiaries (other than Restricted Subsidiaries) to endeavor in the first
instance, to make collection of its Accounts for Administrative Agent or
Canadian Agent, as applicable. All remittances received by each applicable
Borrower or Subsidiary on account of Accounts, together with the proceeds of any
other Collateral, shall be held as Administrative Agent's property, for its
benefit and the benefit of Canadian Agent, Bank and Lenders, or Canadian Agent's
property, for its benefit and the benefit of Canadian Lender and Canadian
Participating Lenders, as the case may be, by such Borrower or Subsidiary as
trustee of an express trust for Administrative Agent's or Canadian Agent's, as
the case may be, benefit and such Borrower shall, and shall cause its applicable
Subsidiaries to, immediately deposit same in kind in the lockboxes or a Dominion
Account. Administrative Agent and Canadian Agent each retains the right at all
times after the occurrence and during the continuance of a Default or an Event
of Default to notify Account Debtors that Borrowers' and their applicable
Subsidiaries' Accounts have been assigned to Administrative Agent or Canadian
Agent, as the case may be, and to collect such Borrowers' and their applicable
Subsidiaries' Accounts directly in its own name and to charge the collection
costs and expenses, including legal fees, to Borrowers.
6.3 [Intentionally Omitted].
6.4 Administration of Equipment.
6.4.1 Records and Schedules of Equipment. Each Borrower shall (and
shall cause each of its Subsidiaries to) keep records of its Equipment which
shall be complete and accurate in all material respects itemizing and describing
the kind, type, quality, quantity and book value of its Equipment and all
dispositions made in accordance with Section 6.4.2 hereof, and Borrowers shall,
and shall cause each of their Subsidiaries to, furnish Administrative Agent and
Canadian Agent with a current schedule containing the foregoing information on
at least an annual basis and more often if reasonably requested by
Administrative Agent. Promptly after the reasonable request therefor by
Administrative Agent, each such Borrower shall (and shall cause each of its
Subsidiaries to) deliver to Administrative Agent and Canadian Agent any and all
evidence of ownership, if any, of any of its Equipment.
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6.4.2 Dispositions of Equipment. No Borrower shall, nor shall it
permit any of its Subsidiaries to, sell, lease or otherwise dispose of or
transfer any of its respective Equipment or other fixed assets or any part
thereof without the prior written consent of Administrative Agent, in the case
of Domestic Borrowers, and Canadian Agent, in the case of Canadian Borrower;
provided, however, that the foregoing restriction shall not apply, for so long
as no Default or Event of Default exists and is continuing, to (a) dispositions
of Equipment and other fixed assets which, in the aggregate during any
consecutive twelve-month period, have a book value of $250,000 or less, provided
that all proceeds thereof are remitted to Administrative Agent or Canadian
Agent, as applicable, for application to the Loans as provided in Section 3.3.1,
or (b) replacements of Equipment or other fixed assets that are substantially
worn, damaged or obsolete with Equipment or other fixed assets which are useful
in the business of the applicable Borrower or one of its Subsidiaries, provided
that the replacement Equipment or other fixed assets shall be acquired within
180 days before or after any disposition of the Equipment or other fixed assets
that are to be replaced and the replacement Equipment or other fixed assets
shall be free and clear of Liens other than Permitted Liens that are Purchase
Money Liens and leases with respect to leased equipment.
SECTION 7. REPRESENTATIONS AND WARRANTIES
7.1 General Representations and Warranties.
To induce Administrative Agent, Canadian Agent and each Lender to enter
into this Agreement and to make advances hereunder, each Borrower warrants,
represents and covenants to Administrative Agent, Canadian Agent and each Lender
that:
7.1.1 Organization and Qualification. CGI is a corporation duly
organized, validly existing and in good standing under the laws of the State of
Delaware. CTSI is a corporation duly organized, validly existing and in good
standing under the laws of the State of New Jersey. TB2B is a corporation duly
organized, validly existing and in good standing under the laws of the State of
Delaware. Canadian Borrower is a corporation duly organized and validly existing
under the laws of Ontario. Each of Borrowers' Subsidiaries is a corporation,
limited partnership or limited liability company duly organized, validly
existing and in good standing under the laws of the jurisdiction of its
incorporation or organization. Each Borrower and each of its Subsidiaries is
duly qualified and is authorized to do business and is in good standing as a
foreign limited liability company, limited partnership or corporation, as
applicable, in each state or jurisdiction listed on Exhibit 7.1.1 hereto and in
all other states and jurisdictions in which the failure of such Borrower or any
of its Subsidiaries to be so qualified would reasonably be expected to have a
Material Adverse Effect.
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7.1.2 Power and Authority. Each Borrower and each of its Subsidiaries
is duly authorized and empowered to enter into, execute, deliver and perform
this Agreement and each of the other Loan Documents to which it is a party. The
execution, delivery and performance of this Agreement and each of the other Loan
Documents have been duly authorized by all necessary corporate or other relevant
action and do not and will not (a) require any consent or approval of the
shareholders of any Borrower or any of the shareholders, partners or members, as
the case may be, of any Subsidiary of any Borrower; (b) contravene any
Borrower's or any of its Subsidiaries' charter, articles or certificate of
incorporation, partnership agreement, unanimous shareholder agreement,
certificate of formation, by-laws, limited liability agreement, operating
agreement or other organizational documents (as the case may be); (c) violate,
or cause any Borrower or any of its Subsidiaries to be in default under, any
provision of any law, rule, regulation, order, writ, judgment, injunction,
decree, determination or award in effect having applicability to such Borrower
or any of its Subsidiaries, the violation of which would reasonably be expected
to have a Material Adverse Effect; (d) result in a breach of or constitute a
default under any indenture or loan or credit agreement or any other agreement,
lease or instrument to which any Borrower or any of its Subsidiaries is a party
or by which it or its Properties may be bound or affected, the breach of or
default under which would reasonably be expected to have a Material Adverse
Effect; or (e) result in, or require, the creation or imposition of any Lien
(other than Permitted Liens) upon or with respect to any of the Properties now
owned or hereafter acquired by any Borrower or any of its Subsidiaries.
7.1.3 Legally Enforceable Agreement. This Agreement is, and each of
the other Loan Documents when delivered under this Agreement will be, a legal,
valid and binding obligation of each Borrower and each of its Subsidiaries party
thereto, enforceable against it in accordance with its respective terms, except
as limited by applicable bankruptcy or insolvency laws, and by general
principles of equity.
7.1.4 Capital Structure. Exhibit 7.1.4 hereto states, as of the date
hereof, (a) the correct name of each of the Subsidiaries of each Borrower, its
jurisdiction of incorporation or organization and the percentage of its Voting
Stock owned by Borrowers, (b) the name of each Borrower's and each of its
Subsidiaries' corporate or joint venture relationships and the nature of the
relationship, (c) the number, nature and holder of all outstanding Securities of
Borrowers (other than CGI) and the holder of Securities of each Subsidiary of
each Borrower and (d) the number of issued and treasury Securities of each
Borrower. Each Borrower has good title to all of the Securities it purports to
own of each of such Subsidiaries, free and clear in each case of any Lien other
than Permitted Liens. All such Securities have been duly issued and are fully
paid and non-assessable. Except as set forth on Exhibit 7.1.4, as of the date
hereof, there are no outstanding options to purchase, or any rights or warrants
to subscribe for, or any commitments or agreements to issue or sell any
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Securities or obligations convertible into, or any powers of attorney relating
to any Securities of any Borrower or any of its Subsidiaries. Except as set
forth on Exhibit 7.1.4, as of the date hereof, there are no outstanding
agreements or instruments binding upon any of any Borrower's or any of its
Subsidiaries' partners, members or shareholders, as the case may be, relating to
the ownership of its Securities.
7.1.5 Names. No Borrower nor any of its Subsidiaries has been known as
or has used any legal, fictitious or trade names except those listed on Exhibit
7.1.5 hereto. Except as set forth on Exhibit 7.1.5, no Borrower nor any of its
Subsidiaries has been the surviving entity of a merger or consolidation, or the
entity resulting from an amalgamation, or has acquired all or substantially all
of the assets of any Person. Each Borrower's and each of its Subsidiaries'
respective jurisdictions of incorporation or organization, Type of Organization
and Organizational I.D. Number are set forth on Exhibits 7.1.4 and 7.1.5. The
respective exact legal names of each Borrower and each of its Subsidiaries are
set forth on Exhibit 7.1.5.
7.1.6 Business Locations. Each Borrower's and each of its
Subsidiaries' chief executive office and other places of business as of the date
hereof are as listed on Exhibit 6.1.1 hereto as updated from time to time by
Borrower Representative. During the preceding one-year period, no Borrower nor
any of its Subsidiaries has had an office or place of business other than as
listed on Exhibit 6.1.1. All tangible Collateral is and will at all times be
kept by each Borrower and its Subsidiaries in accordance with Section 6.1.1.
Except as shown on Exhibit 6.1.1, as of the date hereof, no Inventory is stored
with a bailee, distributor, warehouseman or similar party, nor is any Inventory
consigned to any Person.
7.1.7 Title to Properties; Priority of Liens. Each Borrower and each
of its Subsidiaries has good, indefeasible and marketable title to and fee
simple ownership of, or valid and subsisting leasehold interests in, all of its
real Property, and good title to all of the Collateral owned by such Borrower or
Subsidiary and all of its other Property, in each case, free and clear of all
Liens except Permitted Liens. Each Borrower and each of its Subsidiaries has
paid or discharged all lawful claims which, if unpaid, might become a Lien
against any Borrower's or such Subsidiary's Properties that is not a Permitted
Lien. The Liens granted to Administrative Agent and Canadian Agent under Section
5 hereof are first priority Liens, subject only to Permitted Liens.
7.1.8 Accounts. Administrative Agent and Canadian Agent may rely, in
determining which Accounts are Eligible Accounts, on all statements and
representations made by Borrowers and their Subsidiaries with respect to any
Account or Accounts. With respect to each Account of a Borrower and each Account
of each Subsidiary of a Borrower, whether or not such Account of such Borrower
or such Subsidiary is an Eligible Account, unless otherwise disclosed to
Administrative Agent or Canadian Agent in writing:
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(a) It is genuine and in all respects what it purports to be, and it
is not evidenced by a judgment;
(b) It arises out of a completed, bona fide sale and delivery of goods
or rendition of services by such Borrower or such Subsidiary, in the
ordinary course of its business and in accordance with the terms and
conditions of all purchase orders, contracts or other documents relating
thereto and forming a part of the contract between such Borrower or such
Subsidiary and the Account Debtor and the Account Debtor is not an
Affiliate of such Borrower or such Subsidiary;
(c) It is for a liquidated amount maturing as stated in the duplicate
invoice covering such sale or rendition of services, a copy of which has
been furnished or is available to Administrative Agent or Canadian Agent,
as applicable;
(d) There are no facts, events or occurrences which in any way impair
the validity or enforceability of any Accounts or tend to reduce the amount
payable thereunder from the face amount of the invoice and statements
delivered or made available to Administrative Agent or Canadian Agent, as
applicable, with respect thereto;
(e) To the best of such Borrower's knowledge, the Account Debtor
thereunder (i) had the capacity to contract at the time any contract or
other document giving rise to the Account was executed and (ii) such
Account Debtor is Solvent; and
(f) To the best of such Borrower's knowledge, there are no proceedings
or actions which are threatened or pending against the Account Debtor
thereunder which might result in any material adverse change in such
Account Debtor's financial condition or the collectability of such Account.
7.1.9 Equipment. The Equipment of each Borrower and its Subsidiaries
is in good operating condition and repair, and all necessary replacements of and
repairs thereto shall be made so that the operating efficiency thereof shall be
maintained and preserved, reasonable wear and tear excepted, except where the
failure to so maintain the same would not reasonably be expected to have a
Material Adverse Effect. No Borrower will permit (nor will it allow any of its
Subsidiaries (other than Restricted Subsidiaries) to permit) any Equipment owned
by such Borrower or Subsidiary to become affixed to any real Property leased to
such Borrower or such Subsidiary so that an interest arises therein under the
real estate laws of the applicable jurisdiction unless the landlord of such real
Property has executed a landlord waiver or leasehold mortgage in favor of and in
form reasonably acceptable to Administrative Agent or Canadian Agent, as
applicable, and no Borrower will permit (nor will it allow
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any of its Subsidiaries (other than Restricted Subsidiaries) to permit) any of
the Equipment of such Borrower or such Subsidiary to become an accession to any
personal Property other than Equipment that is subject to first priority (except
for Permitted Liens) Liens in favor of Administrative Agent or Canadian Agent,
as applicable.
7.1.10 Financial Statements; Fiscal Year. The Consolidated balance
sheets of CGI and its Subsidiaries (including the accounts of all Subsidiaries
of CGI and their respective Subsidiaries for the respective periods during which
a Subsidiary relationship existed) as of March 31, 2002, and the related
statements of income for the periods ended on such dates, except for the absence
of footnote disclosures and normal year-end adjustments, have been prepared in
accordance with GAAP, and present fairly in all material respects the financial
positions of CGI and such Persons, taken as a whole, at such dates and the
results of CGI's and such Persons' operations, taken as a whole, for such
periods. As of the date hereof, since March 31, 2002, there has been no material
adverse change in the financial position of CGI and such other Persons, taken as
a whole, as reflected in the Consolidated balance sheet as of such date. As of
the date hereof, the fiscal year of each Borrower and each of its Subsidiaries
ends on June 30 of each year.
7.1.11 Full Disclosure. The financial statements referred to in
Section 7.1.10 hereof do not, nor does this Agreement or any other written
statement of any Borrower or any of its Subsidiaries to Administrative Agent,
Canadian Agent or any Lender contain any untrue statement of a material fact or
omit a material fact necessary to make the statements contained therein or
herein not misleading. There is no fact which any Borrower or any of its
Subsidiaries has failed to disclose to Administrative Agent, Canadian Agent or
any Lender in writing which would reasonably be expected to have a Material
Adverse Effect.
7.1.12 Solvent Financial Condition. Each Borrower and each of its
Subsidiaries, is now and, after giving effect to the initial Loans to be made
and the initial Letters of Credit and LC Guaranties to be issued hereunder and
all related transactions, will be, Solvent.
7.1.13 Surety Obligations. Except as set forth on Exhibit 7.1.13, as
of the date hereof, no Borrower nor any of its Subsidiaries is obligated as
surety or indemnitor under any surety or similar bond or other contract issued
or entered into to assure payment, performance or completion of performance of
any undertaking or obligation of any Person.
7.1.14 Taxes. CGI's federal tax identification number is 13-3361050.
CTSI's federal tax identification number is 13-3276138. TB2B's federal tax
identification number is 35-2099173. Canadian Borrower's business number is
1285332. The federal tax identification number of each domestic Subsidiary of
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Borrower is shown on Exhibit 7.1.14 hereto. Each Borrower and each of its
Subsidiaries has filed all federal, national, state, provincial and local tax
returns (including, without limitation, any returns required under its
jurisdiction of organization or incorporation) and other reports relating to
taxes it is required by law to file, except where the failure to so file would
not reasonably be expected to have a Material Adverse Effect, and has paid, or
made provision for the payment of, all taxes, assessments, fees, levies and
other governmental charges upon it, its income and Properties as and when such
taxes, assessments, fees, levies and charges are due and payable, unless and to
the extent any thereof are being actively contested in good faith and by
appropriate proceedings and each Borrower and each of its Subsidiaries maintains
reasonable reserves on its books therefor. Except as set forth on Exhibit
7.1.14, no tax Lien has been filed and, to the knowledge of each Borrower, no
claim is being asserted with respect to any such tax, fee or other charge. The
provision for taxes on the books of each Borrower and its Subsidiaries is
adequate for all years not closed by applicable statutes, and for the current
fiscal year. No Borrower, nor any of its Subsidiaries, has entered into any
"listed transactions" within the meaning of Treasury Regulation 1.6011-4T(b)(2),
or has sought a tax opinion with respect to any transaction which it has
consummated.
7.1.15 Brokers. Except as shown on Exhibit 7.1.15 hereto, there are no
claims for brokerage commissions, finder's fees or investment banking fees in
connection with the transactions contemplated by this Agreement.
7.1.16 Patents, Trademarks, Copyrights and Licenses. Each Borrower and
each of its Subsidiaries owns, possesses or licenses or has the right to use all
the patents, trademarks, service marks, trade names, copyrights, licenses and
other Intellectual Property necessary for the present and planned future conduct
of its business without any known conflict with the rights of others, except for
such conflicts as would not reasonably be expected to have a Material Adverse
Effect. All such patents, trademarks, service marks, trade names, copyrights,
licenses, and Intellectual Property are listed on Exhibit 7.1.16 hereto. No
claim has been asserted to any Borrower or any of its Subsidiaries which is
currently pending that their use of their Intellectual Property or the conduct
of their business does or may infringe upon the Intellectual Property rights of
any third party. To the knowledge of Borrowers and except as set forth on
Exhibit 7.1.16 hereto, as of the date hereof, no Person is engaging in any
activity that infringes in any material respect upon Borrowers' or any of their
Subsidiaries' material Intellectual Property. Except as set forth on Exhibit
7.1.16, each Borrower's and each of its Subsidiaries' (a) material trademarks,
service marks, and copyrights are registered with the U.S. Patent and Trademark
Office or in the U.S. Copyright Office or foreign equivalent, as applicable and
(b) material license agreements and similar arrangements relating to its
Inventory (i) permits, and does not restrict, the assignment by such Borrower or
any of its Subsidiaries to Administrative Agent or Canadian Agent, as the case
may be, or any
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other Person designated by Administrative Agent or Canadian Agent, as the case
may be,, of all of such Borrower's or such Subsidiary's, as applicable, rights,
title and interest pertaining to such license agreement or such similar
arrangement and (ii) would permit the continued use by such Borrower or such
Subsidiary, or Administrative Agent or Canadian Agent, as the case may be, or
its assignee, of such license agreement or such similar arrangement and the
right to sell Inventory subject to such license agreement for a period of no
less than 6 months after a default or breach of such agreement or arrangement.
The consummation and performance of the transactions and actions contemplated by
this Agreement and the other Loan Documents, including without limitation, the
exercise by Administrative Agent or Canadian Agent, as the case may be, of any
of its rights or remedies under Section 10, will not result in the termination
or impairment of any of any Borrower's or any of its Subsidiaries' ownership or
rights relating to its Intellectual Property, except for such Intellectual
Property rights the loss or impairment of which would not reasonably be expected
to have a Material Adverse Effect. Except as listed on Exhibit 7.1.16 and except
as would not reasonably be expected to have a Material Adverse Effect, (A) no
Borrower nor any of its Subsidiaries is in breach of, or default under, any term
of any license or sublicense with respect to any of its Intellectual Property
and (B) to the knowledge of Borrowers, no other party to such license or
sublicense is in breach thereof or default thereunder, and such license is valid
and enforceable.
7.1.17 Governmental Consents. Each Borrower and each of its
Subsidiaries has, and is in good standing with respect to, all governmental
consents, approvals, licenses, authorizations, permits, certificates,
inspections and franchises necessary to continue to conduct its business as
heretofore or proposed to be conducted by it and to own or lease and operate its
Properties as now owned or leased by it, except where the failure to possess or
so maintain such rights would not reasonably be expected to have a Material
Adverse Effect. No action, consent or approval of, registration or filing with
or any other action by any governmental authority is or will be required in
connection with the borrowings hereunder, the creation of the security interests
contemplated hereby and the other transactions contemplated to occur under the
Loan Documents, except for (a) the filing of UCC and PPSA financing statements
and filings with the United States Patent and Trademark Office, the United
States Copyright Office and foreign equivalent, as applicable, and (b) such
others as have been made or obtained and are in full force and effect.
7.1.18 Compliance with Laws. Each Borrower and each of its
Subsidiaries has duly complied in all material respects with, and its
Properties, business operations and leaseholds are in compliance in all material
respects with, the provisions of all federal, state, provincial and local laws,
rules and regulations applicable to such Borrower or such Subsidiary, as
applicable, its Properties or the conduct of its business, except for such
non-compliance as would not reasonably be expected to have a Material Adverse
Effect, and there have been no citations, notices
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or orders of noncompliance issued to any Borrower or any of its Subsidiaries
under any such law, rule or regulation, except where such noncompliance would
not reasonably be expected to have a Material Adverse Effect. To the best of
Borrowers' knowledge, each Borrower and each of its Subsidiaries has established
and maintains an adequate monitoring system to insure that it remains in
compliance in all material respects with all federal, state, provincial and
local rules, laws and regulations applicable to it. No Inventory has been
produced in violation of the Fair Labor Standards Act (29 U.S.C.ss.201 et seq.),
as amended.
7.1.19 Restrictions. No Borrower nor any of its Subsidiaries is a
party or subject to any contract or agreement which restricts its right or
ability to incur Indebtedness, other than as set forth on Exhibit 7.1.19 hereto,
none of which prohibit the execution of or compliance with this Agreement or the
other Loan Documents by any Borrower or any of its Subsidiaries, as applicable.
7.1.20 Litigation. Except as set forth on Exhibit 7.1.20 hereto, there
are no actions, suits, proceedings or investigations pending, or to the
knowledge of Borrowers, threatened, against or involving any Borrower or any of
its Subsidiaries, or the business, operations, Properties, prospects, profits or
condition of any Borrower or any of its Subsidiaries which, singly or in the
aggregate, would reasonably be expected to have a Material Adverse Effect. No
Borrower nor any of its Subsidiaries is in default with respect to any order,
writ, injunction, judgment, decree or rule of any court, governmental authority
or arbitration board or tribunal, which, singly or in the aggregate, would
reasonably be expected to have a Material Adverse Effect.
7.1.21 No Defaults. No event has occurred and no condition exists
which would, upon or after the execution and delivery of this Agreement or
Borrowers' performance hereunder, constitute a Default or an Event of Default.
No Borrower nor any of its Subsidiaries is in default in (and no event has
occurred and no condition exists which constitutes, or which with the passage of
time or the giving of notice or both would constitute, a default in) the payment
of any Indebtedness to any Person for Money Borrowed in excess of $500,000.
7.1.22 Leases. Exhibit 7.1.22 hereto is a complete listing of all
capitalized and operating personal property leases of Borrowers and their
Subsidiaries and all real property leases of Borrowers and their Subsidiaries.
Each Borrower and each of its Subsidiaries is in full compliance with all of the
terms of each of its respective capitalized and operating leases, except where
the failure to so comply would not reasonably be expected to have a Material
Adverse Effect.
7.1.23 Pension Plans.
(a) Except as disclosed on Exhibit 7.1.23 hereto, no Borrower nor any
of its Subsidiaries has any Plan or Canadian Pension Plan. Each
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Borrower and each of its Subsidiaries is in compliance with the
requirements of ERISA and the regulations promulgated thereunder with
respect to each Plan, except where the failure to so comply would not
reasonably be expected to have a Material Adverse Effect. No fact or
situation that would reasonably be expected to result in a material adverse
change in the financial condition of any Borrower and its Subsidiaries
exists in connection with any Plan. No Domestic Borrower nor any of its
Subsidiaries has any material withdrawal liability in connection with a
Multiemployer Plan.
(b) The Canadian Pension Plans are duly registered under and have been
administered in compliance with the Income Tax Act (Canada) and all other
applicable laws which require registration and no event has occurred which
is reasonably likely to cause the loss of such registered status. All
material obligations of Canadian Borrower or any of its Subsidiaries
(including fiduciary, funding, investment and administration obligations)
required to be performed in connection with the Canadian Pension Plans and
the funding agreements therefor have been performed in a timely fashion.
There have been no improper withdrawals or applications of the assets of
the Canadian Pension Plans or the Canadian Benefit Plans. There are no
outstanding disputes, actions, suits or claims concerning the assets of the
Canadian Pension Plans or the Canadian Benefit Plans. Each of the Canadian
Pension Plans is fully funded on a solvency basis (using actuarial methods
and assumptions which are consistent with the valuations last filed with
the applicable governmental authorities and which are consistent with
generally accepted actuarial principles). Canadian Borrower and its
Subsidiaries have withheld all employee withholdings and have made all
employer contributions to be withheld and made by it pursuant to Canadian
and any provincial applicable law on account of Canadian Pension Plans,
Canadian Benefit Plans, Canadian employment insurance and employee income
taxes. No condition exists or transaction has occurred in connection with
any Canadian Pension Plan or Canadian Benefit Plan which could result in
the incurrence by Canadian Borrower or its Subsidiaries of any material
liability, fine or penalty.
7.1.24 Trade Relations. Except as set forth on Exhibit 7.1.24, there
exists no actual or, to any Borrower's knowledge, threatened termination,
cancellation or limitation of, or any modification or change in, the business
relationship between any Borrower or any of its Subsidiaries and any customer or
any group of customers whose purchases individually or in the aggregate are
material to the business of any Borrower and its Subsidiaries, or with any
material supplier, except in each case, where the same would not reasonably be
expected to have a Material Adverse Effect, and there exists no present
condition or state of facts or circumstances which would prevent any Borrower or
any of its Subsidiaries from conducting such business after the consummation of
the transaction contemplated by
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this Agreement in substantially the same manner in which it has heretofore been
conducted.
7.1.25 Labor Relations. Except as described on Exhibit 7.1.25 hereto,
as of the date hereof, no Borrower nor any of its Subsidiaries is a party to any
collective bargaining agreement. There are no material grievances, disputes or
controversies with any union or any other organization of any Borrower's or any
of its Subsidiaries' employees, or threats of strikes, work stoppages or any
asserted pending demands for collective bargaining by any union or organization,
except those that would not reasonably be expected to have a Material Adverse
Effect.
7.1.26 Environmental Matters.
(a) The properties now or formerly owned or operated by each Borrower
and its Subsidiaries (as referred to in this Section 7.1.26, the "Owned
Properties") do not contain any Hazardous Materials in amounts or
concentrations which to the knowledge of Borrower (i) constitute, or
constituted a violation of, or (ii) could give rise to liability under,
Environmental Laws resulting from any Release of Hazardous Materials during
such Borrower's or its Subsidiaries' ownership or operation of the Owned
Properties or at any other time, which violations and liabilities, in the
aggregate, could reasonably be expected to result in a Material Adverse
Effect.
(b) The Owned Properties and all operations of such Borrower and its
Subsidiaries are in compliance, and, to the extent that such Borrower or
any of its Subsidiaries owned or operated such Owned Properties in the past
three years, in the last three years have been in compliance, with all
Environmental Laws and all Environmental Permits and all necessary
Environmental Permits have been obtained and are in effect, except to the
extent that such non-compliance or failure to obtain any necessary permits,
in the aggregate, could not reasonably be expected to result in a Material
Adverse Effect.
(c) During the time of such Borrower's or its Subsidiaries' ownership
or operation of the Owned Properties and, to the knowledge of such
Borrower, at any other time, there have been no Releases at, from, under or
proximate to the Owned Properties or otherwise in connection with the
operations of such Borrower or its Subsidiaries, which Releases, in the
aggregate, could reasonably be expected to result in a Material Adverse
Effect, and none of the Owned Properties currently owned or operated by
such Borrower and its Subsidiaries are listed on the Federal National
Priorities List (under CERCLA and as defined pursuant to Environmental
Law), or any similar listing in any other relevant jurisdiction.
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(d) No Borrower nor any of its Subsidiaries has received any
Environmental Claim in connection with any of the Owned Properties or the
operations of such Borrower or any of its Subsidiaries or with regard to
any Person whose liabilities for environmental matters such Borrower or any
of its Subsidiaries has retained or assumed, in whole or in part,
contractually, by operation of law or otherwise, which Environmental Claim,
in the aggregate, could reasonably be expected to result in a Material
Adverse Effect, nor do such Borrower or any of its Subsidiaries have reason
to believe that notice of any such Environmental Claim will be received or
is being threatened.
Hazardous Materials have not been transported from any of the Owned
Properties by any Borrower or any of its Subsidiaries or, to the knowledge of
Borrowers, any other party, nor have Hazardous Materials been generated,
treated, stored or disposed of at, on or under any of the Owned Properties in a
manner that could reasonably be expected to give rise to liability under any
Environmental Law that would constitute a Material Adverse Effect, nor have any
Borrower or any of its Subsidiaries retained or assumed any liability,
contractually, by operation of law or otherwise, with respect to the generation,
treatment, storage or disposal of Hazardous Materials, which transportation,
generation, treatment, storage or disposal, or retained or assumed liabilities,
in the aggregate, could reasonably be expected to result in a Material Adverse
Effect.
7.2 Continuous Nature of Representations and Warranties.
Each representation and warranty contained in this Agreement and the other
Loan Documents shall be continuous in nature and shall remain accurate, complete
and not misleading at all times during the term of this Agreement, except for
changes in the nature of a Borrower's or one of a Borrower's Subsidiary's
business or operations that would render the information in any exhibit attached
hereto or to any other Loan Document either inaccurate, incomplete or
misleading, so long as Majority Lenders have consented to such changes or such
changes are expressly permitted by this Agreement.
7.3 Survival of Representations and Warranties.
All representations and warranties of Borrowers contained in this Agreement
or any of the other Loan Documents shall survive the execution, delivery and
acceptance thereof by Administrative Agent, Canadian Agent and each Lender and
the parties thereto and the closing of the transactions described therein or
related thereto.
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SECTION 8. COVENANTS AND CONTINUING AGREEMENTS
8.1 Affirmative Covenants.
During the term of this Agreement, and thereafter for so long as there are
any Obligations outstanding, each Borrower covenants that, unless otherwise
consented to by Majority Lenders, in writing, it shall (and it shall cause each
of its Subsidiaries to):
8.1.1 Visits and Inspections; Lender Meeting. Permit representatives
of Administrative Agent and Canadian Agent, and during the continuation of any
Default or Event of Default any Lender, from time to time, as often as may be
reasonably requested, but only during normal business hours, to visit and
inspect the Properties of such Borrower and such Subsidiaries, inspect, audit
and make extracts from their books and records, and discuss with their officers,
their employees, their consultants and their independent accountants, such
Borrower's and such Subsidiaries' business, assets, liabilities, financial
condition, business prospects and results of operations. Administrative Agent or
Canadian Agent, as applicable, if no Default or Event of Default then exists,
shall give each Borrower or Subsidiary reasonable prior notice of any such
inspection or audit. Without limiting the foregoing, each Borrower will
participate and will cause its Subsidiaries and key management personnel to
participate in a meeting with Administrative Agent, Canadian Agent and Lenders
periodically during each year, which meetings shall be held at such times and
such places as may be reasonably requested by Administrative Agent and Canadian
Agent.
8.1.2 Notices. Promptly notify Administrative Agent in writing of the
occurrence of (a) any Default or Event of Default and (b) any event or the
existence of any fact which renders any representation or warranty in this
Agreement or any of the other Loan Documents inaccurate, incomplete or
misleading in any material respect as of the date made or remade. In addition,
each Borrower agrees to provide Administrative Agent with (i) 10 Business Days'
prior written notice of (A) any change in the legal name of such Borrower or any
of its Subsidiaries, (B) the adoption by such Borrower or any of its
Subsidiaries of any new fictitious name or trade name and (C) any change in the
chief executive office of such Borrower or any of its Subsidiaries, and (ii)
prompt written notice of any change in the information disclosed in any exhibit
hereto, in each case after giving effect to the materiality limits and Material
Adverse Effect qualifications contained therein.
8.1.3 Financial Statements. Keep, and cause each of its Subsidiaries
to keep, adequate records and books of account with respect to its business
activities in which proper entries are made in accordance with customary
accounting practices reflecting all its financial transactions; and cause to be
prepared and furnished to Administrative Agent, Canadian Agent and each Lender,
the
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following, all to be prepared in accordance with GAAP applied on a consistent
basis, unless Borrowers' certified public accountants concur in any change
therein and such change is disclosed to Administrative Agent and is consistent
with GAAP:
(a) not later than 90 days after the close of each fiscal year of CGI,
unqualified (except for a qualification for a change in accounting
principles with which the accountant concurs) audited financial statements
of CGI and its Subsidiaries as of the end of such year (including without
limitation, a balance sheet, statement of income and statement of cash
flow), on a Consolidated basis, certified by a firm of independent
certified public accountants of recognized standing selected by Borrowers
but acceptable to Administrative Agent and, within a reasonable time
thereafter a copy of any management letter issued in connection therewith;
(b) not later than 45 days after the end of each fiscal quarter of CGI
other than the last fiscal quarter in any fiscal year of CGI, unaudited
financial statements of CGI and its Subsidiaries as of the end of such
quarter (including without limitation, a balance sheet, statement of income
and statement of cash flow), in the form contained in the corresponding
10-Q report filed by CGI with the Securities and Exchange Commission;
(c) not later than 30 days after the end of each month hereafter,
including the last month of CGI's fiscal year, an unaudited statement of
income of CGI and its Subsidiaries as of the end of such month and of the
portion of the fiscal year then elapsed, on a Consolidated and
consolidating basis, and a balance sheet for each Subsidiary of CGI as of
the end of such month, certified in each case by the principal financial
officer of CGI as prepared in accordance with GAAP and fairly presenting in
all material respects the financial position and results of operations of
CGI and its Subsidiaries for such month and period subject only to changes
from audit and year-end adjustments and except that such statements need
not contain notes;
(d) together with each delivery of financial statements pursuant to
clauses (a) and (c) of this Section 8.1.3, a management report (i) setting
forth in comparative form the corresponding figures for the corresponding
periods of the previous fiscal year and the corresponding figures from the
most recent Projections for the current fiscal year delivered pursuant to
Section 8.1.7 and (ii) identifying the reasons for any significant
variations. The information above shall be presented in reasonable detail
and shall be certified by the chief financial officer of CGI to the effect
that such information fairly presents in all material respects the results
of operations and financial condition of CGI and its Subsidiaries as at the
dates and for the periods indicated;
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(e) promptly after the sending or filing thereof, as the case may be,
copies of any annual report, proxy statements or financial statements which
any Borrower has made available to its Securities holders and copies of any
annual, regular, periodic and special reports or registration statements
which any Borrower or any of its Subsidiaries files with the Securities and
Exchange Commission or any governmental authority which may be substituted
therefor, or any national securities exchange, including each annual report
on Form 10-K filed by CGI with the Securities and Exchange Commission,
which shall be so delivered no later than 90 days after the end of CGI's
applicable fiscal year;
(f) upon request of Administrative Agent, copies of any annual report
to be filed with the United States Department of Labor in connection with
each Plan;
(g) concurrently with the delivery of the financial statements
described in paragraph (a) and (b) of this Section 8.1.3 and as more
frequently as Administrative Agent or Canadian Agent may request, a
statutory payables certificate with respect to Canadian Borrower in the
form of Exhibit 8.1.3(g) hereto; and
(h) such other data and information (financial and otherwise) as
Administrative Agent, Canadian Agent or any Lender, from time to time, may
reasonably request, bearing upon or related to the Collateral or Borrowers'
or any of their Subsidiaries' financial condition or results of operations.
Concurrently with the delivery of the financial statements described in
paragraph (a) of this Section 8.1.3, Borrowers shall forward to Administrative
Agent a copy of the accountants' letter to CGI's management that is prepared in
connection with such financial statements and shall also cause to be prepared
and shall furnish to Administrative Agent a certificate of the aforesaid
certified public accountants certifying to Administrative Agent that, based upon
their examination of the financial statements of CGI and its Subsidiaries, they
are not aware of any Default or Event of Default, or, if they are aware of such
Default or Event of Default, specifying the nature thereof. Concurrently with
the delivery of the financial statements described in paragraphs (a) and (c) of
this Section 8.1.3, or more frequently if reasonably requested by Administrative
Agent or Canadian Agent, Borrowers shall cause to be prepared and furnished to
Administrative Agent and Canadian Agent a Compliance Certificate in the form of
Exhibit 8.1.3 hereto executed by the Chief Financial Officer of CGI.
8.1.4 Borrowing Base Certificates. On or before the 15th day of each
month from and after the date hereof, Borrowers shall deliver to Administrative
Agent a Borrowing Base Certificate as of the last day of the immediately
preceding month, with such supporting materials as Administrative Agent
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shall reasonably request, which Borrowing Base Certificate shall provide
eligibility information with respect to Accounts of the Account Creditors on a
consolidated and consolidating basis. In addition to the foregoing, on Monday of
each week from and after the date hereof, Borrowers shall deliver to
Administrative Agent a Borrowing Base Certificate as of the last day of the
immediately preceding week. Borrowers shall not be required to include in any
weekly Borrowing Base Certificate referred to in the immediately preceding
sentence an update of ineligible Accounts from the most recently delivered
monthly Borrowing Base Certificate. If Administrative Agent deems it advisable,
Borrowers shall execute and deliver to Administrative Agent Borrowing Base
Certificates more frequently than as provided above.
8.1.5 Landlord, Processor and Storage Agreements. Provide
Administrative Agent and Canadian Agent with copies of all agreements between
each Borrower or any of its Subsidiaries and any landlord, processor,
distributor, warehouseman or consignee which owns any premises at which any
Collateral may, from time to time, be kept.
8.1.6 Guarantor Financial Statements. Deliver or cause to be delivered
to Administrative Agent financial statements, if any, for each Guarantor (to the
extent not consolidated with the financial statements delivered to
Administrative Agent under Section 8.1.3) in form and substance satisfactory to
Administrative Agent at such intervals and covering such time periods as
Administrative Agent may request, and at least, with respect to Guarantors which
are not individuals, no later than 90 days after each fiscal year end of such
Guarantors, as of such fiscal year end.
8.1.7 Projections. No later than thirty (30) days following the end of
each fiscal year of CGI, deliver to Administrative Agent Consolidated and
consolidating Projections of CGI and each of its Subsidiaries for the
forthcoming fiscal year of CGI, month by month.
8.1.8 Subsidiaries. Cause each Domestic Subsidiary of CGI (other than
Restricted Subsidiaries) and upon Administrative Agent's request each Foreign
Subsidiary of CGI (other than Canadian Borrower and Restricted Subsidiaries), in
each case whether now or hereafter in existence, to execute and deliver to
Administrative Agent a Guaranty Agreement and a Guaranty Security Agreement
pursuant to which such Subsidiary guaranties the payment of all Obligations and
grants to Administrative Agent (for the benefit of itself, Canadian Agent, Bank
and Lenders) a first priority Lien (subject only to Permitted Liens) on all of
its Properties of the types described in Section 5. Additionally, each Borrower
and each Subsidiary of a Borrower (other than Exempt Foreign Subsidiaries) shall
execute and deliver to Administrative Agent a pledge agreement pursuant to which
such Borrower or such Subsidiary grants to Administrative Agent (for the benefit
of itself, Canadian Agent, Bank and Lenders) a first priority Lien (subject
only to Permitted Liens) with respect to all of CGI's holdings of the issued and
outstanding Securities of
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each Subsidiary of CGI which is not an Exempt Foreign Subsidiary and with
respect to, in the aggregate, 65% of CGI's holdings of the issued and
outstanding Securities of each Exempt Foreign Subsidiary.
8.1.9 Deposit and Brokerage Accounts. For each deposit account or
brokerage account that any Borrower or any of its Subsidiaries (other than
Restricted Subsidiaries) at any time opens or maintains, such Borrower shall (or
shall cause such Subsidiary to), at Administrative Agent's or Canadian Agent's,
as the case may be, request and option, pursuant to an agreement in form and
substance satisfactory to Administrative Agent or Canadian Agent, as the case
may be, cause the depository bank or securities intermediary, as applicable, to
agree to comply at any time with instructions from Administrative Agent or
Canadian Agent, as the case may be, to such depository bank or securities
intermediary, as applicable, directing the disposition of funds from time to
time credited to such deposit or brokerage account, without further consent of
such Borrower or such Subsidiary.
8.1.10 ERISA. Each Borrower will, and will cause each of the
Subsidiaries to, (a) comply with the applicable provisions of ERISA and the Code
(or their Canadian equivalent) and of the regulations and published
interpretations thereunder, except where the failure to comply therewith could
not reasonably be expected to have a Material Adverse Effect, and (b) furnish to
the Administrative Agent (i) promptly, and in any event within 30 days after any
responsible officer of such Borrower either knows or has a reasonable basis to
know that any Reportable Event has occurred, that alone or together with any
other Reportable Event could reasonably be expected to result in material
liability, of such Borrower, any Subsidiary or any ERISA Affiliate to the PBGC,
a statement of a responsible officer of such Borrower (in his or her capacity as
such) setting forth details as to such Reportable Event and the action proposed
to be taken with respect thereto, together with a copy of the notice, if any, of
such Reportable Event given to the PBGC, (ii) promptly after receipt thereof, a
copy of any notice such Borrower, any Subsidiary or any ERISA Affiliate receives
from the PBGC relating to the intention of the PBGC to terminate any Plan or
Plans or to appoint a trustee to administer any Plan or Plans, (iii) within 30
days after the due date for filing with the PBGC pursuant to Section 412(n) of
the Code a notice of failure to make a required installment or other payment
with respect to a Plan, a statement of a responsible officer of such Borrower
setting forth details as to such failure and the action proposed to be taken
with respect thereto, together with a copy of such notice given to the PBGC and
(iv) promptly and in any event within 30 days after receipt thereof by such
Borrower, any Subsidiary or any ERISA Affiliate from the sponsor of a
Multiemployer Plan, a copy of each notice received by such Borrower, any
Subsidiary or any ERISA Affiliate concerning (A) the imposition of Withdrawal
Liability or (B) a determination that a Multiemployer Plan is, or is expected to
be, terminated or in Reorganization, in each case within the meaning of Title IV
of ERISA; provided, however, that no such notice or statement will be
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required under this Section 8.1.10 unless the event, when aggregated with all
other events described in this Section 8.1.10 occurring at the same time, could
be reasonably expected to result in liability to such Borrower, any Subsidiary
or any ERISA Affiliate in an amount that would exceed $2,500,000 in the
aggregate for such Borrower, its Subsidiaries and all ERISA Affiliates.
8.1.11 Compliance with Environmental Laws. Except as any of the
following, individually or in the aggregate, could not reasonably be expected to
result in a Material Adverse Effect, each Borrower will, and will cause each of
its Subsidiaries to, comply, and use its reasonable best efforts to cause all
lessees and other Persons occupying its Properties to comply, in all material
respects with all Environmental Laws and Environmental Permits applicable to its
operations and Properties; obtain and renew all material Environmental Permits
necessary for its operations and Properties; and conduct any remedial action
required by any governmental authority in accordance with Environmental Laws;
provided, however, that no Borrower nor any of its Subsidiaries shall be
required to undertake any remedial action to the extent that its obligation to
do so is being contested in good faith and by proper proceedings and appropriate
reserves are being maintained with respect to such circumstances.
8.1.12 Patents, Trademarks and Copyrights. Each Borrower will, and
will cause each of its Subsidiaries to (a) consistent with past practice, use
commercially reasonable efforts to register with the United States Patent and
Trademark Office, the United States Copyright Office or foreign equivalent, as
the case may be, all of its or their right, title and interest in each material
patent, trademark and copyright used in its or their business which is so
registrable under applicable law, (b) report each such filing and registration
to the Administrative Agent, with respect to Domestic Collateral, and Canadian
Agent, with respect to Canadian Collateral, within fifteen (15) Business Days
after the last day of the fiscal quarter in which such filing occurs and (c)
promptly upon request by the Administrative Agent, with respect to Domestic
Collateral, and Canadian Agent, with respect to Canadian Collateral, execute and
deliver any and all agreements, instruments, documents, and papers (each of
which shall be in form and substance reasonably satisfactory to the
Administrative Agent or Canadian Agent, as applicable) as may be necessary or as
the Administrative Agent or Canadian Agent, as applicable, may reasonably
request to grant (to the extent possible) to the Administrative Agent, for the
benefit of itself, Canadian Agent, Bank and the Lenders, and to Canadian Agent,
for the benefit of itself, the Canadian Lender and the Canadian Participating
Lenders, a perfected, first priority security interest therein and in any
goodwill and general intangibles relating thereto or represented thereby.
8.1.13 Motor Vehicle Lien Perfection. Take all actions reasonably
requested by the Administrative Agent subsequent to the Closing Date to
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ensure that no later than sixty (60) days after the Closing Date, Administrative
Agent (for the benefit of itself, Canadian Agent, Bank and each Lender) has a
perfected and (except for Permitted Liens) first-priority Lien on each motor
vehicle owned by the Borrowers and their Subsidiaries (other than Canadian
Borrower and Restricted Subsidiaries) as security for the Obligations. Take all
actions reasonably requested by Canadian Agent subsequent to the Closing Date to
ensure that no later than sixty (60) days after the Closing Date, Canadian Agent
(for the benefit of itself, Canadian Lender and Canadian Participating Lenders)
has a perfected and (except for Permitted Liens) first-priority Lien on each
motor vehicle owned by Canadian Borrower as security for the Canadian
Obligations.
8.1.14 Environmental Reports. Subsequent to the Closing Date, engage
an environmental consultant acceptable to Administrative Agent and cause such
environmental consultant, at Borrowers' expense, to conduct, subsequent to the
Closing Date, and deliver to the Administrative Agent, no later than ninety (90)
days after the Closing Date, in form and substance acceptable to Administrative
Agent, a written "Phase I" environmental report with respect to the Owned
Property in Waxahachie, Texas and written "Phase II" environmental reports with
respect to the Owned Properties in Denton, Texas and Horizon City, Texas.
8.1.15 Canadian Pension and Benefit Plans.
(a) For each existing Canadian Pension Plan of Canadian Borrower or
any of its Subsidiaries, Canadian Borrower or such Subsidiary, as
applicable, shall ensure that such plan retains its registered status under
and is administered in a timely manner in all material respects in
accordance with the applicable pension plan text, funding agreement, the
Income Tax Act (Canada) and all other applicable laws.
(b) For each Canadian Pension Plan hereafter adopted by Canadian
Borrower or any of its Subsidiaries which is required to be registered
under the Income Tax Act (Canada) or any other applicable laws, the
Canadian Borrower or such Subsidiary, as applicable, shall use its best
efforts to seek and receive confirmation in writing from the applicable
governmental authorities to the effect that such plan is unconditionally
registered under the Income Tax Act (Canada) and such other applicable
laws.
(c) For each existing and hereafter adopted Canadian Pension Plan and
Canadian Benefit Plan of Canadian Borrower or any of its Subsidiaries,
Canadian Borrower or such Subsidiary, as applicable, shall in a timely
fashion perform in all material respects all obligations (including
fiduciary, funding, investment and administration obligations) required to
be performed in connection with such plan and the funding media therefor.
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(d) Canadian Borrower and each Subsidiary of Canadian Borrower shall
deliver to Administrative Agent and Canadian Agent, if requested by
Administrative Agent or Canadian Agent, promptly after the filing thereof
by Canadian Borrower or such Subsidiary, as applicable, with any applicable
governmental authority, (i) copies of each annual and other return, report
or valuation with respect to each Canadian Pension Plan of Canadian
Borrower or such Subsidiary, as applicable; (ii) promptly after receipt
thereof, a copy of any direction, order, notice, ruling or opinion that
Canadian Borrower or such Subsidiary, as applicable, may receive from any
applicable governmental authority with respect to any Canadian Pension Plan
of Canadian Borrower or such Subsidiary, as applicable; and (iii)
notification within 30 days of any increases having a cost to Canadian
Borrower or such Subsidiary, as applicable, in excess of $500,000 per
annum, in the benefits of any existing Canadian Pension Plan or Canadian
Benefit Plan, or the establishment of any new Canadian Pension Plan or
Canadian Benefit Plan, or the commencement of contributions to any such
plan to which Canadian Borrower or such Subsidiary, as applicable, was not
previously contributing.
8.2 Negative Covenants.
During the Term, and thereafter for so long as there are any Obligations
outstanding, each Borrower covenants that, unless otherwise consented to by
Majority Lenders, in writing, it shall not (and it shall not permit its
Subsidiaries to):
8.2.1 Mergers; Consolidations; Acquisitions; Structural Changes.
Merge, amalgamate or consolidate with any Person; or acquire all or any
substantial part of the Properties of any Person; or change its state or other
jurisdiction of incorporation or organization or Type of Organization; or change
its legal name, except for:
(a) mergers of any Subsidiary of a Borrower into a Borrower or another
Subsidiary (other than Canadian Borrower or a Restricted Subsidiary) of a
Borrower; and
(b) acquisitions of assets consisting of fixed assets or real property
that constitute Capital Expenditures permitted under Section 8.2.8.
8.2.2 Loans and Advances. Make any loans or other advances of money to
any Person, other than (a) for salary, travel advances, advances against
commissions and other similar advances to employees and extensions of trade
credit in the ordinary course of business, (b) deposits with financial
institutions permitted under this Agreement, and (c) prepaid expenses.
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8.2.3 Total Indebtedness. Create, incur, assume, or suffer to exist,
any Indebtedness, except:
(a) Obligations owing to Administrative Agent, Canadian Agent, Bank or
any Lender under this Agreement or the other Loan Documents;
(b) Indebtedness existing on the date of this Agreement and listed on
Exhibit 8.2.3(b);
(c) Permitted Purchase Money Indebtedness;
(d) Contingent liabilities arising out of endorsements of checks and
other negotiable instruments for deposit or collection in the ordinary
course of business;
(e) Guaranties of any Indebtedness permitted hereunder;
(f) Indebtedness in respect of Permitted Intercompany Loans, provided
that the aggregate outstanding principal amount of such Indebtedness shall
not exceed $5,000,000 at any time;
(g) To the extent not mentioned above, trade payables, accruals and
accounts payable in the ordinary course of business (in each case to the
extent not overdue) not for Money Borrowed;
(h) Subordinated Debt in such amounts as may be approved in writing by
Administrative Agent and the Majority Lenders; and
(i) Indebtedness not included in paragraphs (a) through (h) above
which does not exceed at any time, in the aggregate, the sum of $1,000,000.
8.2.4 Affiliate Transactions. Enter into, or be a party to, any
transaction with any Affiliate of a Borrower or any holder of any Securities of
a Borrower or any Subsidiary of a Borrower, including without limitation any
management, consulting or similar fees, except (a) in the ordinary course of and
pursuant to the reasonable requirements of such Borrower's or such Subsidiary's
business and upon fair and reasonable terms which are fully disclosed to
Administrative Agent and are no less favorable to such Borrower or such
Subsidiary than would be obtained in a comparable arms-length transaction with a
Person not an Affiliate or Security holder of such Borrower or such Subsidiary,
and (b) as otherwise permitted under this Agreement.
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8.2.5 Limitation on Liens. Create or suffer to exist any Lien upon any
of its Property, income or profits, whether now owned or hereafter acquired,
except:
(a) Liens at any time granted in favor of Administrative Agent for the
benefit of itself, Canadian Agent, Bank and Lenders, and Liens at any time
granted in favor of Canadian Agent for the benefit of itself, Canadian
Lender and Canadian Participating Lenders;
(b) Liens for taxes, assessments or governmental charges (excluding
any Lien imposed pursuant to any of the provisions of ERISA) not yet due,
or being contested in the manner described in Section 7.1.14 hereto, but
only if such Lien would not reasonably be expected to have a Material
Adverse Effect;
(c) Liens arising in the ordinary course of the business of such
Borrower or any of its Subsidiaries by operation of law or regulation, but
only if payment in respect of any such Lien is not at the time required and
such Liens do not, in the aggregate, materially detract from the value of
the Property of such Borrower or any of its Subsidiaries or materially
impair the use thereof in the operation of the business of such Borrower or
any of its Subsidiaries;
(d) Purchase Money Liens securing Permitted Purchase Money
Indebtedness (including Foothill's Lien on the Foothill Note Collateral);
(e) Such other Liens as appear on Exhibit 8.2.5 hereto;
(f) Liens incurred or deposits made in the ordinary course of business
in connection with (i) worker's compensation, social security, unemployment
insurance and other like laws or (ii) sales contracts, leases, statutory
obligations, work in progress advances and other similar obligations not
incurred in connection with the borrowing of money or the payment of the
deferred purchase price of property;
(g) Reservations, covenants, zoning and other land use regulations,
title exceptions or encumbrances granted in the ordinary course of
business, affecting real Property owned or leased by such Borrower or one
of its Subsidiaries; provided that such exceptions do not in the aggregate
materially interfere with the use of such Property in the ordinary course
of such Borrower's or such Subsidiary's business;
(h) Judgment Liens that do not give rise to an Event of Default under
Section 10.1.15; and
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(i) Such other Liens as Majority Lenders may hereafter approve in
writing.
8.2.6 Payments and Amendments of Certain Debt.
(a) Make any payment of any part or all of any Subordinated Debt or
take any other action or omit to take any other action in respect of any
Subordinated Debt, except in accordance with the subordination agreement
relative thereto or the subordination provisions thereof; or
(b) Amend or modify any agreement, instrument or document evidencing
or relating to any Subordinated Debt.
8.2.7 Distributions. Declare or make any Distributions, except for:
(a) Distributions by any Subsidiary of Borrowers to a Borrower or to
another Subsidiary of Borrowers which is not a Restricted Subsidiary;
(b) Distributions paid solely in Securities of such Borrower or any of
its Subsidiaries; and
(c) Distributions by such Borrower or such Subsidiary in amounts
necessary to permit such Borrower or such Subsidiary to repurchase
Securities of such Borrower or such Subsidiary from employees of such
Borrower or such Subsidiary upon the termination of their employment, so
long as no Default or Event of Default exists at the time of or would be
caused by the making of such Distributions and the aggregate cash amount of
such Distributions for all Borrowers and their Subsidiaries, measured at
the time when made, does not exceed $250,000 in any fiscal year of CGI.
8.2.8 Capital Expenditures. Make unfinanced Capital Expenditures
(including, without limitation, by way of capitalized leases) which, in the
aggregate, as to Borrowers and all of their Subsidiaries, exceed $1,000,000
during any fiscal year of CGI, except that any unused portion of the foregoing
unfinanced Capital Expenditure allowance may be carried over to the immediately
succeeding fiscal year only, to be used in such succeeding fiscal year after all
of the unfinanced Capital Expenditure allowance for that year has been used.
8.2.9 Operating Leases; Capitalized Lease Obligations. Incur any
obligation to pay rent under an operating lease or any Capitalized Lease
Obligation if to do so would result in the aggregate obligation of Borrowers and
their Subsidiaries to make cash payments under all operating leases, and leases
that are required to be capitalized for financial reporting purposes in
accordance with GAAP,
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for the twelve-month period ending as of the last day of any month during the
Term to exceed (i) $45,000,000 in the case of any twelve-month period ending as
of the last day of any month in fiscal year 2003, (ii) $50,000,000 in the case
of any twelve-month period ending as of the last day of any month in fiscal year
2004, or (iii) $55,000,000 in the case of any twelve-month period ending as of
the last day of any month in any subsequent fiscal year.
8.2.10 [Intentionally Omitted].
8.2.11 Disposition of Assets. Sell, lease or otherwise dispose of any
of its Properties, including any disposition of Property as part of a sale and
leaseback transaction, to or in favor of any Person, except for:
(a) so long as no Default or Event of Default has occurred and is
continuing, sales of Inventory in the ordinary course of business;
(b) transfers of Property to such Borrower by a Subsidiary of such
Borrower;
(c) dispositions of Property that is substantially worn, damaged,
uneconomic or obsolete (subject to Section 6.4.2 hereof);
(d) dispositions of investments described in paragraphs (d), (e), (f)
and (g) of the definition of the term "Restricted Investments"; and
(e) other dispositions expressly authorized by this Agreement.
8.2.12 Securities of Subsidiaries. Permit any of its Subsidiaries to
issue any additional Securities except director's qualifying Securities.
8.2.13 Bill-and-Hold Sales, Etc. Make a sale to any customer on a
bill-and-hold or consignment basis.
8.2.14 Restricted Investment. Make or have any Restricted Investment.
8.2.15 Subsidiaries and Joint Ventures. Create, acquire or otherwise
suffer to exist any Subsidiary or joint venture arrangement not in existence as
of the date hereof.
8.2.16 Tax Consolidation. File or consent to the filing of any
consolidated income tax return with any Person other than CGI and its
Subsidiaries.
8.2.17 Organizational Documents. Agree to, or suffer to occur, any
amendment, supplement or addition to its or any of its Subsidiaries' charter,
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articles or certificate of incorporation, certificate of formation, limited
partnership agreement, bylaws, limited liability agreement, operating agreement
or other organizational documents (as the case may be), that would reasonably be
expected to have a Material Adverse Effect.
8.2.18 Fiscal Year End. Change its fiscal year end.
8.3 Specific Financial Covenants.
During the Term, and thereafter for so long as there are any Obligations
outstanding, each Borrower covenants that, unless otherwise consented to by
Majority Lenders in writing, it shall comply (and shall cause each of its
Subsidiaries to comply) with all of the financial covenants set forth in Exhibit
8.3 hereto. If GAAP changes from the basis used in preparing the audited
financial statements delivered to Administrative Agent by Borrowers on or before
the Closing Date, Borrowers will provide Administrative Agent with certificates
demonstrating compliance with such financial covenants and will include, at the
election of Borrowers or upon the request of Administrative Agent, calculations
setting forth the adjustments necessary to demonstrate how Borrowers and their
Subsidiaries are in compliance with such financial covenants based upon GAAP as
in effect on the Closing Date.
SECTION 9. CONDITIONS PRECEDENT
Notwithstanding any other provision of this Agreement or any of the other
Loan Documents, and without affecting in any manner the rights of Administrative
Agent, Canadian Agent or any Lender under the other sections of this Agreement,
no Lender shall be required to make any Loan, nor shall Administrative Agent be
required to or issue or procure any Letter of Credit or LC Guaranty unless and
until each of the following conditions has been and continues to be satisfied:
9.1 Documentation.
Administrative Agent shall have received, in form and substance
satisfactory to Administrative Agent and Canadian Agent and their counsel, a
duly executed copy of this Agreement and the other Loan Documents, together with
such additional documents, instruments and certificates as Administrative Agent
and Canadian Agent and their counsel shall require in connection therewith from
time to time, all in form and substance satisfactory to Administrative Agent and
Canadian Agent and their counsel.
9.2 No Default.
No Default or Event of Default shall exist.
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9.3 Other Conditions.
Each of the conditions precedent set forth in the other Loan Documents
shall have been satisfied.
9.4 No Litigation.
No action, proceeding, investigation, regulation or legislation shall have
been instituted or proposed before any court, governmental agency or legislative
body to enjoin, restrain or prohibit, or to obtain damages in respect of, or
which is related to or arises out of this Agreement or the consummation of the
transactions contemplated hereby.
9.5 Material Adverse Effect.
Since March 31, 2002, there has not been any material adverse change in
Borrowers' business, assets, financial condition, income or prospects and no
event or condition exists which would be reasonably likely to result in any
Material Adverse Effect.
9.6 Fees.
The fees payable on the Closing Date pursuant to the Fee Letter shall have
been paid.
9.7 Collateral.
Administrative Agent shall be reasonably satisfied that, upon the filing of
appropriate financing statements showing Administrative Agent (for the benefit
of itself, Canadian Agent, Bank and each Lender) as secured party with the
appropriate governmental authorities, Administrative Agent (for the benefit of
itself, Canadian Agent, Bank and each Lender) will hold a first priority
perfected Lien in the collateral described therein, other than the motor vehicle
collateral described in Section 8.1.13, subject only to Permitted Liens.
Canadian Agent shall be reasonably satisfied that, upon the filing of
appropriate financing statements showing Canadian Agent (for the benefit of
itself, Canadian Lender and Canadian Participating Lenders) as secured party
with the appropriate governmental authorities, Canadian Agent (for the benefit
of itself, Canadian Lender and Canadian Participating Lenders) will hold a first
priority perfected Lien in the collateral described therein, other than the
motor vehicle collateral de scribed in Section 8.1.13, subject only to Permitted
Liens.
9.8 Diligence.
Administrative Agent and Canadian Agent shall have completed and received
all audits, inspections, appraisals (including without limitation the Taylor &
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Martin updated appraisal) and examinations as deemed necessary in the
Administrative Agent's and Canadian Agent's reasonable opinion with respect to
the Collateral (including inventory, fixed assets and real property), the books
and records of Borrowers and their Subsidiaries, the financial and business
condition and operations of Borrowers and their Subsidiaries, environmental
assessment studies and remediation plans, and the transactions contemplated
hereby.
9.9 Corporate Matters.
Administrative Agent shall be satisfied with the corporate and legal
structure and capitalization of Borrowers and each of their Subsidiaries,
including the charter and bylaws of Borrowers and each such Subsidiary and each
agreement or instrument relating thereto.
9.10 Environmental Matters.
Administrative Agent shall be satisfied as to the existing and potential
liability of Borrowers and their Subsidiaries with respect to any environmental
matters, and as to the compliance by Borrowers and their Subsidiaries with all
Environmental Laws.
9.11 Insurance.
Administrative Agent and Canadian Agent shall be satisfied that Borrowers
have obtained the insurance policies and the loss payable endorsements relating
thereto required by Section 6.1.2.
9.12 Legal Opinions.
Administrative Agent and Canadian Agent shall have received satisfactory
written opinions of counsel for Borrowers as to the transactions contemplated
hereby, the status of Borrowers and the legal and binding effect of the Loan
Documents.
9.13 Reference Checks.
Administrative Agent shall have completed satisfactory reference checks of
the customers and vendors of Borrowers and their Subsidiaries.
9.14 Financial Statements.
Administrative Agent shall have been satisfied with its review of
Borrowers' financial statements for the fiscal year ending June 30, 2002 and all
interim financial statements of Borrowers delivered to Administrative Agent
prior to the Closing Date.
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9.15 Updated Audit.
Administrative Agent and Canadian Agent shall have completed a satisfactory
pre-closing updated audit of the books and records of Borrowers and their
Subsidiaries.
9.16 Personal Reference and Background Checks.
Administrative Agent shall have completed satisfactory personal reference
and background checks on Paul Will and Stephen Russell.
9.17 Costs and Expenses.
The reasonable costs and expenses of the Administrative Agent and Canadian
Agent in connection with the preparation of the Loan Documents payable pursuant
to Section 2.9 and invoiced to Borrowers prior to the Closing Date, shall have
been paid.
9.18 Representations and Warranties.
The representations and warranties of Borrowers contained in Section 7
shall be true and correct in all material respects.
SECTION 10. EVENTS OF DEFAULT; RIGHTS AND REMEDIES ON DEFAULT
10.1 Events of Default.
The occurrence of one or more of the following events shall constitute an
"Event of Default":
10.1.1 Payment of Obligations. Borrowers shall fail to pay any of the
Obligations hereunder or under any Note on the due date thereof (whether due at
stated maturity, on demand, upon acceleration or otherwise).
10.1.2 Misrepresentations. Any representation, warranty or other
statement made or furnished to Administrative Agent, Canadian Agent or any
Lender by or on behalf of any Borrower, any Subsidiary of any Borrower or any
Guarantor in this Agreement, any of the other Loan Documents or any instrument,
certificate or financial statement furnished in compliance with or in reference
thereto proves to have been false or misleading in any material respect when
made, furnished or remade pursuant to Section 7.2 hereof.
10.1.3 Breach of Specific Covenants. Any Borrower shall fail or
neglect to perform, keep or observe any covenant contained in Sections 5.2,
6.1.2, 8.1.1, 8.1.2, 8.1.4, 8.2 or 8.3 hereof on the date that Borrowers are
required to perform,
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keep or observe such covenant or shall fail or neglect to perform, keep or
observe any covenant contained in Section 8.1.3 hereof within 5 days following
the date on which Borrowers are required to perform, keep or observe such
covenant.
10.1.4 Breach of Other Covenants. Any Borrower shall fail or neglect
to perform, keep or observe any covenant contained in this Agreement (other than
a covenant which is dealt with specifically elsewhere in Section 10.1 hereof)
and the breach of such other covenant is not cured to Administrative Agent's
satisfaction within 30 days after the sooner to occur of Borrower
Representative's receipt of notice of such breach from Administrative Agent or
the date on which such failure or neglect first becomes known to any officer of
any Borrower.
10.1.5 Default Under Security Documents or Other Agreements. Any event
of default shall occur under, or any Borrower, any of its Subsidiaries or any
Guarantor shall default in the performance or observance of any term, covenant,
condition or agreement contained in, any of the Security Documents or the Other
Agreements and such default shall continue beyond any applicable grace period.
10.1.6 Other Defaults. There shall occur any default or event of
default on the part of any Borrower, any Subsidiary of any Borrower or any
Guarantor under any agreement, document or instrument to which such Borrower,
such Subsidiary of any Borrower or such Guarantor is a party or by which such
Borrower, such Subsidiary of any Borrower or such Guarantor or any of its
Property is bound, evidencing or relating to any Indebtedness (other than the
Obligations) with an outstanding principal balance in excess of $500,000, if the
payment or maturity of such Indebtedness is accelerated in consequence of such
event of default or demand for payment of such Indebtedness is made or could be
made in accordance with the terms thereof.
10.1.7 Uninsured Losses. Any material loss, theft, damage or
destruction of any portion of the Collateral having a fair market value of
$500,000, in the aggregate, if not fully covered (subject to such deductibles
and self-insurance retentions as Administrative Agent or Canadian Agent, as the
case may be, shall have permitted) by insurance.
10.1.8 Insolvency and Related Proceedings. Any Borrower, any
Subsidiary of any Borrower or any Guarantor shall cease to be Solvent or shall
suffer the appointment of a receiver, trustee, custodian or similar fiduciary,
or shall make an assignment for the benefit of creditors, or any petition for an
order for relief shall be filed by or against any Borrower, any Subsidiary of
any Borrower or any Guarantor under the United States federal bankruptcy laws or
the Insolvency Laws of Canada (if against any Borrower, any Subsidiary of any
Borrower or any Guarantor the continuation of such proceeding for more than 45
days), or any Borrower, any
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Subsidiary of any Borrower or any Guarantor shall make any offer of settlement,
extension or composition to their respective unsecured creditors generally.
10.1.9 Business Disruption; Condemnation. There shall occur a
cessation of a substantial part of the business of any Borrower, any Subsidiary
of any Borrower or any Guarantor for a period which materially adversely affects
Borrowers' and their Subsidiaries', taken as a whole, or such Guarantor's (if
such Guarantor is not a Subsidiary of a Borrower) capacity to continue its
business on a profitable basis; or any Borrower, any Subsidiary of any Borrower
or any Guarantor shall suffer the loss or revocation of any material license or
permit now held or hereafter acquired by such Borrower, such Subsidiary or such
Guarantor which is necessary to the continued or lawful operation of its
business; or any Borrower, any Subsidiary of any Borrower or any Guarantor shall
be enjoined, restrained or in any way prevented by court, governmental or
administrative order from conducting all or any material part of its business
affairs; or any material lease or agreement pursuant to which any Borrower, any
Subsidiary of any Borrower or any Guarantor leases, uses or occupies any
Property shall be canceled or terminated prior to the expiration of its stated
term, except any such lease or agreement the cancellation or termination of
which would not reasonably be expected to have a Material Adverse Effect; or any
material portion of the Collateral shall be taken through condemnation or the
value of such Property shall be impaired through condemnation.
10.1.10 Change of Ownership. Any Borrower shall cease to own and
control, beneficially and of record (directly or indirectly), 100% of the issued
and outstanding Securities and Voting Stock of each of its Subsidiaries (or, in
the case of Serviciosde Transportacion Jaguar, S.A. de C.V., 100% of the issued
and outstanding Voting Stock and 75% of all issued and outstanding securities of
such Subsidiary or, in the case of TB2B, eighty-one percent (81%) of the issued
and outstanding Securities and Voting Stock of such Subsidiary).
10.1.11 Reportable Event. A Reportable Event shall occur which, in
Administrative Agent's determination, constitutes grounds for the termination by
the PBGC of any Plan or for the appointment by the appropriate United States
district court of a trustee for any Plan, or if any Plan shall be terminated or
any such trustee shall be requested or appointed, or if any Borrower, any
Subsidiary of any Borrower or any Guarantor is in "default" (as defined in
Section 4219(c)(5) of ERISA) with respect to payments to a Multiemployer Plan
resulting from such Borrower's, such Subsidiary's or such Guarantor's complete
or partial withdrawal from such Plan and any such event would reasonably be
expected to have a Material Adverse Effect.
10.1.12 Challenge to Agreement. Any Borrower, any Subsidiary of any
Borrower or any Guarantor, or any Affiliate of any of them, shall challenge or
contest in any action, suit or proceeding the validity or enforceability of this
Agreement or any of the other Loan Documents, the legality or enforceability of
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any of the Obligations or the perfection or priority of any Lien granted to
Administrative Agent or Canadian Agent. Any holder of Subordinated Debt of more
than $250,000 asserts in writing that such Subordinated Debt is not subordinated
to the Obligations in accordance with its terms and Borrowers do not promptly
deny in writing such assertion and contest any attempt by such holder to take
action based on such assertion.
10.1.13 Repudiation of or Default Under Guaranty Agreement. Any
Guarantor shall revoke or attempt to revoke the Guaranty Agreement signed by
such Guarantor, or shall repudiate such Guarantor's liability thereunder or
shall be in default under the terms thereof.
10.1.14 Criminal Forfeiture. Any Borrower, any Subsidiary of any
Borrower or any Guarantor shall be criminally indicted or convicted under any
law that could lead to a forfeiture of any Property of any Borrower, any
Subsidiary of any Borrower or any Guarantor.
10.1.15 Judgments. Any money judgments, writ of attachment or similar
processes (collectively, "Judgments") are issued or rendered against any
Borrower, any Subsidiary of any Borrower or any Guarantor, or any of their
respective Property (i) in the case of money judgments, in an amount of
$1,000,000 or more for any single judgment, attachment or process or $2,500,000
or more for all such judgments, attachments or processes in the aggregate, in
each case in excess of any applicable insurance with respect to which the
insurer has admitted liability, and (ii) in the case of non-monetary Judgments,
such Judgment or Judgments (in the aggregate) would reasonably be expected to
have a Material Adverse Effect, in each case which Judgment is not stayed,
released or discharged within 30 days.
10.1.16 Canadian Pension Plans. Any of the following events or
conditions has occurred which could reasonably be expected to have a Material
Adverse Effect: (a) the withdrawal of Canadian Borrower or any of its
Subsidiaries from a Canadian Pension Plan; (b) the obligation to provide
affected parties with written notice of the intention to terminate or wind-up a
Canadian Pension Plan in whole or in part, whether voluntarily or by order of
any applicable pension regulatory authority; (c) the institution by any
applicable pension regulatory authority of any action to terminate, in whole or
in part, any Canadian Pension Plan; (d) any event or condition which would
require the appointment of a trustee or similar Person to administer a Canadian
Pension Plan; or (e) any event that would give rise to any liability or offense
under Canadian pension laws or that could jeopardize the registration of any
Canadian Pension Plan.
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10.2 Acceleration of the Obligations.
Upon or at any time after the occurrence and during the continuance of an
Event of Default, (a) the Domestic Revolving Credit Commitments and the Canadian
Revolving Credit Sub-Limit shall, at the option of Administrative Agent or
Majority Lenders be terminated and/or (b) Administrative Agent or Majority
Lenders may declare all or any portion of the Obligations at once due and
payable without presentment, demand, protest or further notice by Administrative
Agent, Canadian Agent or any Lender, and Domestic Borrowers shall forthwith pay
to Administrative Agent, and Canadian Borrower shall forthwith pay to Canadian
Agent, the full amount of such Obligations, provided, that upon the occurrence
of an Event of Default specified in Section 10.1.8 hereof, the Domestic
Revolving Credit Commitments (together with the Canadian Revolving Credit
Sub-Limit) shall automatically be terminated and all of the Obligations shall
become automatically due and payable without declaration, notice or demand by
Administrative Agent, Canadian Agent or any Lender.
10.3 Other Remedies.
Upon the occurrence and during the continuance of an Event of Default,
Administrative Agent and Canadian Agent shall have and may exercise from time to
time the following rights and remedies:
10.3.1 All of the rights and remedies of a secured party under the UCC
or the PPSA or under other applicable law, and all other legal and equitable
rights to which Administrative Agent, Canadian Agent or Lenders may be entitled,
all of which rights and remedies shall be cumulative and shall be in addition to
any other rights or remedies contained in this Agreement or any of the other
Loan Documents, and none of which shall be exclusive.
10.3.2 The right to take immediate possession of the Collateral, and
to (a) require Borrowers and each of their Subsidiaries to assemble the
Collateral, at Borrowers' expense, and make it available to Administrative Agent
and/or Canadian Agent at a place designated by Administrative Agent and/or
Canadian Agent which is reasonably convenient to both parties, and (b) enter any
premises where any of the Collateral shall be located and to keep and store the
Collateral on said premises until sold (and if said premises be the Property of
any Borrower or any Subsidiary of any Borrower, such Borrower agrees not to
charge, or permit any of its Subsidiaries to charge, Administrative Agent or
Canadian Agent for storage thereof).
10.3.3 The right to sell or otherwise dispose of all or any Collateral
in its then condition, or after any further manufacturing or processing thereof,
at public or private sale or sales, with such notice as may be required by law,
in lots or in bulk, for cash or on credit, all as Administrative Agent or
Canadian Agent,
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as applicable, in its sole discretion, may deem advisable. Administrative Agent
and/or Canadian Agent, as applicable, may, at Administrative Agent's and/or
Canadian Agent's, as applicable, option, disclaim any and all warranties
regarding the Collateral in connection with any such sale. Each Borrower agrees
that 10 days' written notice to Borrower Representative of any public or private
sale or other disposition of Collateral shall be reasonable notice thereof, and
such sale shall be at such locations as Administrative Agent and/or Canadian
Agent may designate in said notice. Administrative Agent and/or Canadian Agent,
as applicable, shall have the right to conduct such sales on Borrowers' or any
of their Subsidiaries' premises, without charge therefor, and such sales may be
adjourned from time to time in accordance with applicable law. Administrative
Agent and/or Canadian Agent shall have the right to sell, lease or otherwise
dispose of the Collateral, or any part thereof, for cash, credit or any
combination thereof, and Administrative Agent, on behalf of itself, Canadian
Agent, Bank and Lenders, and Canadian Agent, on behalf of itself, Canadian
Lender and Canadian Participating Lenders, may purchase all or any part of the
Collateral at public or, if permitted by law, private sale and, in lieu of
actual payment of such purchase price, may set off the amount of such price
against the Obligations. The proceeds realized from the sale of any Collateral
may be applied, after allowing one (1) Business Day for collection, first to the
costs, expenses and reasonable legal fees incurred by Administrative Agent
and/or Canadian Agent, as applicable, in collecting the Obligations, in
enforcing the rights of Administrative Agent, Canadian Agent, Bank and Lenders
under the Loan Documents and in collecting, retaking, completing, protecting,
removing, storing, advertising for sale, selling and delivering any Collateral,
second to the interest due upon any of the Obligations; and third, to the
principal of the Obligations. If any deficiency shall arise with respect to the
Domestic Obligations, Domestic Borrowers and each Guarantor shall remain jointly
and severally liable to Administrative Agent, Bank and Lenders therefor. If any
deficiency shall arise with respect to the Canadian Obligations, Domestic
Borrowers and each Guarantor shall remain jointly and severally liable, and
Canadian Borrower shall remain liable, to Canadian Agent, Canadian Lender and
Canadian Participating Lenders therefor.
10.3.4 Administrative Agent, with respect to the Domestic Collateral,
and Canadian Agent, with respect to the Canadian Collateral, is hereby granted a
license or other right to use, without charge, Borrowers' and each of their
Subsidiary's labels, patents, copyrights, licenses, rights of use of any name,
trade secrets, trade names, trademarks and advertising matter, or any Property
of a similar nature, as it pertains to the applicable Collateral, in completing,
advertising for sale and selling any applicable Collateral and Borrowers' and
each of their Subsidiary's rights under all licenses and all franchise
agreements shall inure to Administrative Agent's and Canadian Agent's, as
applicable, benefit.
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10.3.5 Administrative Agent may, at its option, require Domestic
Borrowers to deposit with Administrative Agent funds equal to one hundred and
five percent (105%) of the LC Amount and, if Domestic Borrowers fail to promptly
make such deposit, Administrative Agent may advance such amount as a Domestic
Revolving Credit Loan. Each such Domestic Revolving Credit Loan shall be secured
by all of the Domestic Collateral and shall bear interest and be payable at the
same rate and in the same manner as the Base Rate Loans. Any such deposit or
advance shall be held by Administrative Agent as a reserve to fund future
payments on such LC Guaranties and future drawings against such Letters of
Credit and fees payable in connection with such Letters of Credit. At such time
as all LC Guaranties have been paid or terminated and all Letters of Credit have
been drawn upon or expired, any amounts remaining in such reserve shall be
applied against any outstanding Obligations, or, if all Obligations have been
indefeasibly paid in full, returned to Domestic Borrowers.
10.4 Set Off and Sharing of Payments.
10.4.1 In addition to any rights now or hereafter granted under
applicable law and not by way of limitation of any such rights, during the
continuance of any Event of Default, each Domestic Lender is hereby authorized
by Domestic Borrowers at any time or from time to time, with prior written
consent of Administrative Agent and with reasonably prompt subsequent notice to
Borrower Representative (any prior or contemporaneous notice to Borrowers being
hereby expressly waived) to set off and to appropriate and to apply any and all
(a) balances held by such Domestic Lender at any of its offices for the account
of any Domestic Borrower or any of its Subsidiaries (other than Canadian
Borrower)(regardless of whether such balances are then due to such Borrower or
its Subsidiaries), and (b) other property at any time held or owing by such
Domestic Lender to or for the credit or for the account of any Borrower or any
of its Subsidiaries (other than Canadian Borrower), against and on account of
any of the Domestic Obligations. Any Domestic Lender exercising a right to set
off shall, to the extent the amount of any such set off exceeds its pro rata
share of the amount set off, purchase for cash (and the other Domestic Lenders
shall sell) interests in each such other Domestic Lender's pro rata share of the
Domestic Obligations as would be necessary to cause such Domestic Lender to
share such excess with each other Domestic Lender in accordance with their
respective pro rata shares. Each Domestic Borrower agrees, to the fullest extent
permitted by law, that any Domestic Lender may exercise its right to set off
with respect to amounts in excess of its pro rata share of the Domestic
Obligations and upon doing so shall deliver such excess to Administrative Agent
for the benefit of all Domestic Lenders, in accordance with the Domestic
Revolving Loan Percentages and the outstanding principal amount of the Domestic
Term Loans, as applicable, to be applied to the Domestic Obligations in the
manner set forth in the second sentence of Section 3.3.1 with respect to the
application of proceeds of Domestic Collateral.
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10.4.2 In addition to any rights now or hereafter granted under
applicable law and not by way of limitation of any such rights, during the
continuance of any Event of Default, each Canadian Lender and each Canadian
Participating Lender is hereby authorized by Canadian Borrower at any time or
from time to time, with prior written consent of Canadian Agent and with
reasonably prompt subsequent notice to Borrower Representative (any prior or
contemporaneous notice to Borrowers being hereby expressly waived) to set off
and to appropriate and to apply any and all (a) balances held by Canadian Lender
or such Canadian Participating Lender at any of its offices for the account of
Canadian Borrower (regardless of whether such balances are then due to Canadian
Borrower), and (b) other property at any time held or owing by Canadian Lender
or such Canadian Participating Lender to or for the credit or for the account of
Canadian Borrower, against and on account of any of the Canadian Obligations.
Canadian Lender, or any Canadian Participating Lender, exercising a right to set
off shall, to the extent the amount of any such set off exceeds its Canadian
Percentage of the amount set off, purchase for cash (and Canadian Lender and the
Canadian Participating Lenders shall sell) interests in each such Lender's
Canadian Percentage of the Canadian Obligations as would be necessary to cause
Canadian Lender or such Canadian Participating Lender, as applicable, to share
such excess with Canadian Lender and each Canadian Participating Lender in
accordance with their respective Canadian Percentages of the Canadian
Obligations. Canadian Borrower agrees, to the fullest extent permitted by law,
that Canadian Lender and any Canadian Participating Lender may exercise its
right to set off with respect to amounts in excess of its Canadian Percentage of
the Canadian Obligations and upon doing so shall deliver such excess to Canadian
Agent for the benefit of Canadian Lender and all Canadian Participating Lenders,
in accordance with the Canadian Percentages and the outstanding principal
amount of the Canadian Term Loans, as applicable, to be applied in the manner
set forth in the second sentence of Section 3.3.1 with respect to the
application of proceeds of Canadian Collateral.
10.5 Remedies Cumulative; No Waiver.
All covenants, conditions, provisions, warranties, guaranties, indemnities,
and other undertakings of Borrowers contained in this Agreement and the other
Loan Documents, or in any document referred to herein or contained in any
agreement supplementary hereto or in any schedule or in any Guaranty Agreement
given to Administrative Agent, Canadian Agent, Bank or any Lender or contained
in any other agreement between Bank, any Lender and any Borrower or between
Administrative Agent, Canadian Agent and any Borrower heretofore, concurrently,
or hereafter entered into, shall be deemed cumulative to and not in derogation
or substitution of any of the terms, covenants, conditions, or agreements of
Borrowers herein contained. The failure or delay of Administrative Agent,
Canadian Agent, Bank or any Lender to require strict performance by Borrowers of
any provision of this Agreement or to exercise or enforce any rights, Liens,
powers, or remedies
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hereunder or under any of the aforesaid agreements or other documents or
security or Collateral shall not operate as a waiver of such performance, Liens,
rights, powers and remedies, but all such requirements, Liens, rights, powers,
and remedies shall continue in full force and effect until all Loans and other
Obligations owing or to become owing from Borrowers to Administrative Agent,
Canadian Agent, Bank and each Lender have been fully satisfied. None of the
undertakings, agreements, warranties, covenants and representations of Borrowers
and their Subsidiaries contained in this Agreement or any of the other Loan
Documents and no Default or Event of Default by Borrowers or any of their
Subsidiaries under this Agreement or any other Loan Document shall be deemed to
have been suspended or waived by Lenders or Bank, unless such suspension or
waiver is by an instrument in writing specifying such suspension or waiver and
is signed by a duly authorized representative of Administrative Agent, Canadian
Agent or Bank, as applicable, and directed to Borrowers.
SECTION 11. THE ADMINISTRATIVE AGENT AND THE CANADIAN AGENT
11.1 Authorization and Action.
Each Lender hereby appoints and authorizes Administrative Agent and
Canadian Agent to take such action on its behalf and to exercise such powers
under this Agreement and the other Loan Documents as are delegated to
Administrative Agent and Canadian Agent, as applicable, by the terms hereof and
thereof, together with such powers as are reasonably incidental thereto. Each
Lender hereby acknowledges that neither Administrative Agent nor Canadian Agent
has by reason of this Agreement assumed a fiduciary relationship in respect of
any Lender. In performing its functions and duties under this Agreement,
Administrative Agent and Canadian Agent shall act solely as agent of Lenders and
shall not assume, or be deemed to have assumed, any obligation toward, or
relationship of agency or trust with or for, any Borrower or any of its
Subsidiaries. As to any matters not expressly provided for by this Agreement and
the other Loan Documents (including without limitation enforcement and
collection of the Notes), Administrative Agent and Canadian Agent may, but
shall not be required to, exercise any discretion or take any action, but shall
be required to act or to refrain from acting (and shall be fully protected in so
acting or refraining from acting) upon the instructions of the Majority Lenders,
whenever such instruction shall be requested by Administrative Agent or Canadian
Agent or required hereunder, or a greater or lesser number of Lenders if so
required hereunder, and such instructions shall be binding upon all Lenders;
provided, that Administrative Agent and Canadian Agent shall be fully justified
in failing or refusing to take any action which exposes Administrative Agent
and/or Canadian Agent to any liability or which is contrary to this Agreement,
the other Loan Documents or applicable law, unless Administrative Agent and/or
Canadian Agent is indemnified to its satisfaction by the other Lenders against
any and all liability and expense which it may incur by reason of taking or
continuing to take any such action.
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If Administrative Agent and/or Canadian Agent seeks the consent or approval of
the Majority Lenders (or a greater or lesser number of Lenders as required in
this Agreement), with respect to any action hereunder, Administrative Agent
and/or Canadian Agent shall send notice thereof to each Lender and shall notify
each Lender at any time that the Majority Lenders (or such greater or lesser
number of Lenders) have instructed Administrative Agent and/or Canadian Agent to
act or refrain from acting pursuant hereto.
11.2 Administrative Agent's and Canadian Agent's Reliance, Etc.
Neither Administrative Agent, Canadian Agent, any Affiliate of
Administrative Agent or Canadian Agent, nor any of their respective directors,
officers, agents or employees shall be liable for any action taken or omitted to
be taken by it or them under or in connection with this Agreement or the other
Loan Documents, except for its or their own gross negligence or willful
misconduct. Without limitation of the generality of the foregoing,
Administrative Agent and Canadian Agent: (a) may treat each Lender party hereto
as the holder of Obligations until Administrative Agent receives written notice
of the assignment or transfer of such Lender's portion of the Obligations signed
by such Lender and in form reasonably satisfactory to Administrative Agent; (b)
may consult with legal counsel, independent public accountants and other experts
selected by it and shall not be liable for any action taken or omitted to be
taken in good faith by it in accordance with the advice of such counsel,
accountants or experts, (c) makes no warranties or representations to any
Lender and shall not be responsible to any Lender for any recitals, statements,
warranties or representations made in or in connection with this Agreement or
any other Loan Documents; (d) shall not have any duty beyond Administrative
Agent's or Canadian Agent's customary practices in respect of loans in which
Administrative Agent or Canadian Agent is the only lender, to ascertain or to
inquire as to the performance or observance of any of the terms, covenants or
conditions of this Agreement or the other Loan Documents on the part of any
Borrower or any of their Subsidiaries, to inspect the property (including the
books and records) of any Borrower or any of their Subsidiaries, to monitor the
financial condition of any Borrower or any of their Subsidiaries or to ascertain
the existence or possible existence or continuation of any Default or Event of
Default; (e) shall not be responsible to any Lender for the due execution,
legality, validity, enforceability, genuineness, sufficiency or value of this
Agreement or the other Loan Documents or any other instrument or document
furnished pursuant hereto or thereto; (f) shall not be liable to any Lender for
any action taken, or inaction, by Administrative Agent or Canadian Agent upon
the instructions of Majority Lenders pursuant to Section 11.1 hereof or
refraining to take any action pending such instructions; (g) shall not be liable
for any apportionment or distributions of payments made by it in good faith
pursuant to Section 3 hereof; (h) shall incur no liability under or in respect
of this Agreement or the other Loan Documents by acting upon any notice,
consent, certificate, message or
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other instrument or writing (which may be by telephone, facsimile, telegram,
cable or telex) believed in good faith by it to be genuine and signed or sent by
the proper party or parties; and (i) may assume that no Event of Default has
occurred and is continuing, unless Administrative Agent or Canadian Agent, as
applicable, has actual knowledge of the Event of Default, has received notice
from Borrowers or Borrowers' independent certified public accountants stating
the nature of the Event of Default, or has received notice from a Lender stating
the nature of the Event of Default and that such Lender considers the Event of
Default to have occurred and to be continuing. In the event any apportionment or
distribution described in clause (g) above is determined to have been made in
error, the sole recourse of any Person to whom payment was due but not made
shall be to recover from the recipients of such payments any payment in excess
of the amount to which they are determined to have been entitled.
11.3 Fleet and Affiliates.
With respect to its commitment hereunder to make Loans, Fleet and Fleet
Canada shall have the same rights and powers under this Agreement and the other
Loan Documents as any other Lender and may exercise the same as though it were
not Administrative Agent and Canadian Agent, respectively; and the terms
"Lender," "Lenders" or "Majority Lenders" shall, unless otherwise expressly
indicated, include Fleet and Fleet Canada in its individual capacity as a
Lender. Fleet, Fleet Canada and its Affiliates may lend money to, and generally
engage in any kind of business with, Borrowers, Borrowers' Subsidiaries, and any
Person who may do business with or own Securities of Borrowers all as if Fleet
and Fleet Canada were not Administrative Agent and Canadian Agent, respectively,
and without any duty to account therefor to any other Lender.
11.4 Lender Credit Decision.
Each Lender acknowledges that it has, independently and without reliance
upon Administrative Agent or Canadian Agent or any other Lender and based on the
financial statements referred to herein and such other documents and information
as it has deemed appropriate, made its own credit analysis and decision to enter
into this Agreement. Each Lender also acknowledges that it will, independently
and without reliance upon Administrative Agent or Canadian 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 credit decisions in taking or not taking
action under this Agreement. Neither Administrative Agent nor Canadian Agent
shall have any duty or responsibility, either initially or on an ongoing basis,
to provide any Lender with any credit or other similar information regarding
Borrowers or any of their Subsidiaries.
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11.5 Indemnification.
Lenders agree to indemnify Administrative Agent and Canadian Agent (to the
extent not reimbursed by Borrowers), in accordance with their respective
Aggregate Percentages, from and against any and all liabilities, obligations,
losses, damages, penalties, actions, judgments, suits, costs, expenses or
disbursements of any kind or nature whatsoever which may be imposed on, incurred
by, or asserted against Administrative Agent and/or Canadian Agent in any way
relating to or arising out of this Agreement or any other Loan Document or any
action taken or omitted by Administrative Agent and/or Canadian Agent under this
Agreement; provided that no Lender shall be liable for any portion of such
liabilities, obligations, losses, damages, penalties, actions, judgments, suits,
costs, expenses or disbursements resulting from Administrative Agent's or
Canadian Agent's gross negligence or willful misconduct. Without limitation of
the foregoing, each Lender agrees to reimburse Administrative Agent and Canadian
Agent promptly upon demand for its ratable share, as set forth above, of any
out-of-pocket expenses (including legal fees) and allocated costs of audits and
appraisals incurred by Administrative Agent and/or Canadian Agent in connection
with the preparation, execution, delivery, administration, modification,
amendment or enforcement (whether through negotiation, legal proceedings or
otherwise) of, or legal advice in respect of rights or responsibilities under,
this Agreement and each other Loan Document, to the extent that Administrative
Agent and/or Canadian Agent is not reimbursed for such expenses by Borrowers.
The obligations of Lenders under this Section 11.5 shall survive the payment in
full of all Obligations and the termination of this Agreement. If after payment
and distribution of any amount by Administrative Agent and/or Canadian Agent to
Lenders, any Lender or any other Person, including any Borrower, any Subsidiary
of any Borrower, any creditor of any Borrower or any of its Subsidiaries, a
liquidator, administrator or trustee in bankruptcy, recovers from
Administrative Agent and/or Canadian Agent any amount found to have been
wrongfully paid to Administrative Agent and/or Canadian Agent or disbursed by
Administrative Agent and/or Canadian Agent to Lenders, then Lenders, in
accordance with their respective Aggregate Percentages, shall reimburse
Administrative Agent and/or Canadian Agent for all such amounts.
11.6 Rights and Remedies to be Exercised by Administrative Agent and
Canadian Agent Only.
Each Lender agrees that, except as set forth in Section 10.4, no Lender
shall have any right individually (a) to realize upon the security created by
this Agreement or any other Loan Document, (b) to enforce any provision of this
Agreement or any other Loan Document, or (c) to make demand under this Agreement
or any other Loan Document.
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11.7 Agency Provisions Relating to Collateral.
Each Lender authorizes and ratifies Administrative Agent's and Canadian
Agent's entry into this Agreement and the Security Documents for the benefit of
Lenders. Each Lender agrees that any action taken by Administrative Agent and/or
Canadian Agent with respect to the Collateral in accordance with the provisions
of this Agreement or the Security Documents, and the exercise by Administrative
Agent and/or Canadian Agent of the powers set forth herein or therein, together
with such other powers as are reasonably incidental thereto, shall be authorized
and binding upon all Lenders. Administrative Agent and Canadian Agent, as the
case may be, are hereby authorized on behalf of all Lenders, without the
necessity of any notice to or further consent from any Lender, from time to time
prior to an Event of Default, to take any action with respect to any Collateral
or the Loan Documents which may be necessary to perfect and maintain perfected
Administrative Agent's Liens upon the Domestic Collateral, for its and Canadian
Agent's and Bank's benefit and the ratable benefit of Lenders, and Canadian
Agent's Liens upon the Canadian Collateral, for its and Canadian Lender's and
Canadian Participating Lenders' benefit. Lenders hereby irrevocably authorize
Administrative Agent and Canadian Agent, as the case may be, at its option and
in its discretion, to release any Lien granted to or held by Administrative
Agent or Canadian Agent upon any Collateral (a) upon termination of this
Agreement and payment and satisfaction of all Obligations; or (b) constituting
property being sold or disposed of if the Borrower Representative certifies to
Administrative Agent and Canadian Agent, as the case may be, that the sale or
disposition is made in compliance with Section 8.2.11 hereof (and Administrative
Agent and Canadian Agent may rely conclusively on any such certificate, without
further inquiry); or (c) constituting property in which the applicable Borrower
or Subsidiary of a Borrower owned no interest at the time the Lien was granted
or at any time thereafter; or (d) in connection with any foreclosure sale or
other disposition of Collateral after the occurrence and during the continuation
of an Event of Default or (e) if approved, authorized or ratified in writing by
Administrative Agent at the direction of all Lenders in the case of Domestic
Collateral, and by Canadian Agent at the direction of Canadian Lender and
Canadian Participating Lenders in the case of Canadian Collateral. Upon request
by Administrative Agent or Canadian Agent, as the case may be, at any time,
Lenders will confirm in writing Administrative Agent's or Canadian Agent's, as
the case may be, authority to release particular types or items of Collateral
pursuant hereto. Neither Administrative Agent nor Canadian Agent shall have any
obligation whatsoever to any Lender or to any other Person to assure that the
Collateral exists or is owned by the applicable Borrowers or Subsidiaries of
Borrowers or is cared for, protected or insured or has been encumbered or that
the Liens granted to Administrative Agent or Canadian Agent, as the case may
be, herein or pursuant to the Security Documents have been properly or
sufficiently or lawfully created, perfected, protected or enforced or are
entitled to any particular priority, or to exercise at all or in any particular
manner or under any duty of care, disclosure or fidelity, or to
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continue exercising, any of its rights, authorities and powers granted or
available to Administrative Agent or Canadian Agent, as the case may be, in this
Section 11.7 or in any of the Loan Documents, it being understood and agreed
that in respect of the Collateral, or any act, omission or event related
thereto, Administrative Agent or Canadian Agent, as the case may be, may act in
any manner it may deem appropriate, in its sole discretion, but consistent with
the provisions of this Agreement, including given Administrative Agent's or
Canadian Agent's own interest in the Collateral as a Lender and that neither
Administrative Agent nor Canadian Agent shall have any duty or liability
whatsoever to any Lender.
11.8 Administrative Agent's and Canadian Agent's Right to Purchase
Commitments.
Administrative Agent and Canadian Agent shall have the right, but shall not
be obligated, at any time upon written notice to any Lender and with the consent
of such Lender, which may be granted or withheld in such Lender's sole
discretion, to purchase for Administrative Agent's or Canadian Agent's, as the
case may be, own account all of such Lender's interests in this Agreement, the
other Loan Documents and the Obligations, for the face amount of the outstanding
Obligations owed to such Lender, including without limitation all accrued and
unpaid interest and fees.
11.9 Right of Sale, Assignment, Participations.
Each Borrower hereby consents to any Lender's participation, sale,
assignment, transfer or other disposition, at any time or times hereafter, of
this Agreement and any of the other Loan Documents, or of any portion hereof or
thereof, including, without limitation, such Lender's rights, title, interests,
remedies, powers, and duties hereunder or thereunder subject to the terms and
conditions set forth below:
11.9.1 Sales, Assignments. Each Lender hereby agrees that, with
respect to any sale or assignment (other than pursuant to Section 3.2.6 or in
the case of an assignment by Canadian Lender to an Affiliate of Canadian Lender
or of Administrative Agent) (a) no such sale or assignment shall be for an
amount of less than $5,000,000 (or the aggregate principal amount of Loans owing
to such Lender, if less), (b) each such sale or assignment shall be made on
terms and conditions which are customary in the industry at the time of the
transaction, (c) Administrative Agent and, in the absence of a Default or Event
of Default, Borrowers, must consent, such consent not to be unreasonably
withheld, to each such assignment to a Person that is not an original signatory
to this Agreement, and (d) the assignee Lender shall pay to the Administrative
Agent a processing and recordation fee of $3,500 and any out-of-pocket legal
fees and expenses incurred by the Administrative Agent in connection with any
such sale or assignment. After such sale or assignment has been consummated (i)
the assignee Lender thereupon shall become a "Lender" for all purposes of this
Agreement and (ii) the assigning Lender shall have no further liability
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for funding Loans under this Agreement to the extent such liability was assumed
by such other Lender.
11.9.2 Participations. Any Lender may grant participations in its
extensions of credit hereunder to any other Lender or other lending institution
(a "Participant"), provided that (a) no such participation shall be for an
amount of less than $5,000,000 (or the aggregate principal amount of Loans owing
to such Lender, if less), (b) no Participant shall thereby acquire any direct
rights under this Agreement, (c) no Participant shall be granted any right to
consent to any amendment, except to the extent any of the same pertain to (i)
reducing the aggregate principal amount of, or interest rate on, or fees
applicable to, any Loan in which such Participant has an interest, or (ii)
extending the final stated maturity of any Loan in which such Participant has an
interest or the stated maturity of any portion of any payment of principal of,
or interest or fees applicable to, any of the Loans; provided, that the rights
described in this subclause (ii) shall not be deemed to include the right to
consent to any amendment with respect to or which has the effect of requiring
any mandatory prepayment of any portion of any Loan or any amendment or waiver
of any Default or Event of Default, (d) no sale of a participation in extensions
of credit shall in any manner relieve the originating Lender of its obligations
hereunder, (e) the originating Lender shall remain solely responsible for the
performance of such obligations, (f) Borrowers and the Administrative Agent
shall continue to deal solely and directly with the originating Lender in
connection with the originating Lender's rights and obligations under this
Agreement and the other Loan Documents, (g) in no event shall any financial
institution purchasing the participation grant a participation in its
participation interest in the Loans without the prior written consent of
Administrative Agent, and, in the absence of a Default or an Event of Default,
Borrowers, which consents shall not unreasonably be withheld and (h) all amounts
payable by Borrowers hereunder shall be deter mined as if the originating Lender
had not sold any such participation. For greater certainty, the provisions of
this Section 11.9.2 do not apply to the Canadian Participating Lenders in their
capacities as such.
11.9.3 Certain Agreements of Borrowers. Each Borrower agrees that (a)
it will use its best efforts to assist and cooperate with each Lender in any
manner reasonably requested by such Lender to effect the sale of participations
in or assignments of any of the Loan Documents or any portion thereof or
interest therein, including, without limitation, assisting in the preparation of
appropriate disclosure documents and making members of management available at
reasonable times to meet with and answer questions of potential assignees and
Participants; and (b) subject to the provisions of Section 12.14 hereof, such
Lender may disclose credit information regarding such Borrower and its
Subsidiaries to any potential Participant or assignee.
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11.10 Amendment.
No amendment or waiver of any provision of this Agreement or any other Loan
Document (including without limitation any Note), nor consent to any departure
by Borrowers or any of their Subsidiaries therefrom, shall in any event be
effective unless the same shall be in writing and signed by the Majority Lenders
and Borrower Representative and/or such Subsidiaries of Borrowers, and then such
waiver or consent shall be effective only in the specific instance and for the
specific purpose for which given; provided, that no amendment, waiver or consent
shall be effective, unless (a) in writing and signed by each Lender, to do any
of the following: (i) increase or decrease the aggregate Domestic Revolving
Credit Commitments, the Canadian Revolving Credit Sub-Limit, or any Lender's
Domestic Revolving Credit Commitment, or its Canadian Percentage, (ii) reduce
the principal of, or interest on, any amount payable hereunder or under any
Note, other than those payable only to Fleet in its capacity as Administrative
Agent, which may be reduced by Fleet unilaterally, and other than those payable
only to Fleet Canada in its capacity as Canadian Agent, which may be reduced by
Fleet Canada unilaterally, (iii) postpone any date fixed for any payment of
principal of, or interest on, any amounts payable hereunder or under any Note,
other than those payable only to Fleet in its capacity as Administrative Agent,
which may be postponed by Fleet unilaterally and other than those payable only
to Fleet Canada in its capacity as Canadian Agent, which may be postponed by
Fleet Canada unilaterally, (iv) reduce the number of Lenders that shall be
required for Lenders or any of them to take any action hereunder, (v) release or
discharge any Person liable for the performance of any obligations of Borrowers
hereunder or under any of the Loan Documents, (vi) amend any provision of this
Agreement that requires the consent of all Lenders or consent to or waive any
breach thereof, (vii) amend the definition of the term "Majority Lenders",
(viii) amend this Section 11.10 or (ix) release any substantial portion of the
Collateral, unless otherwise permitted pursuant to Section 11.7 hereof; or (b)
in writing and signed by Administrative Agent or Canadian Agent, as the case may
be, in addition to the Lenders required above to take such action, to affect the
rights or duties of Administrative Agent or Canadian Agent, as the case may be,
under this Agreement, any Note or any other Loan Document.
11.11 Resignation of Administrative Agent or Canadian Agent; Appointment of
Successor.
The Administrative Agent or Canadian Agent may resign as Administrative
Agent or Canadian Agent, as the case may be, by giving not less than thirty (30)
days' prior written notice to the Lenders and Borrower Representative. If the
Administrative Agent or Canadian Agent shall resign under this Agreement, then,
(a) subject to the consent of Borrower Representative (which consent shall not
be unreasonably withheld and which consent shall not be required during any
period in
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which a Default or an Event of Default exists), the Majority Lenders shall
appoint from among the Lenders a successor Administrative Agent or Canadian
Agent for the Lenders or (b) if a successor Administrative Agent or Canadian
Agent shall not be so appointed and approved within the thirty (30) day period
following the Administrative Agent's or Canadian Agent's notice to the Lenders
and Borrower Representative of its resignation, then the Administrative Agent or
Canadian Agent, as the case may be, shall appoint a successor Administrative
Agent or Canadian Agent, as the case may be, who shall serve as Administrative
Agent or Canadian Agent, as the case may be, until such time as the Majority
Lenders appoint a successor Administrative Agent or Canadian Agent, as the case
may be, subject to Borrower Representative's consent as set forth above.
Notwithstanding the foregoing, without the consent of Lenders or Borrowers, an
Affiliate of the Canadian Agent or of Administrative Agent may be appointed by
the Administrative Agent to replace Fleet Capital Canada Corporation as Canadian
Agent. Upon its appointment, such successor Administrative Agent or Canadian
Agent, as the case may be, shall succeed to the rights, powers and duties of the
Administrative Agent or Canadian Agent, as the case may be, and the term
"Administrative Agent" or "Canadian Agent", as the case may be, shall mean such
successor effective upon its appointment, and the former Administrative Agent's
or Canadian Agent's rights, powers and duties as Administrative Agent or
Canadian Agent, as the case may be, shall be terminated without any other or
further act or deed on the part of such former Administrative Agent or Canadian
Agent, as the case may be, or any of the parties to this Agreement. After the
resignation of any Administrative Agent or Canadian Agent hereunder, the
provisions of this Section 11 shall inure to the benefit of such former
Administrative Agent or Canadian Agent, as the case may be, and such former
Administrative Agent or Canadian Agent, as the case may be, shall not by reason
of such resignation be deemed to be released from liability for any actions
taken or not taken by it while it was an Administrative Agent or Canadian Agent,
as the case may be, under this Agreement.
SECTION 12. MISCELLANEOUS
12.1 Power of Attorney.
Each Domestic Borrower hereby irrevocably designates, makes, constitutes
and appoints Administrative Agent (and all Persons designated by Administrative
Agent) as such Domestic Borrower's true and lawful attorney (and agent-in-fact),
solely with respect to the matters set forth in this Section 12.1, and
Administrative Agent, or Administrative Agent's agent, may, without notice to
such Domestic Borrower and in such Domestic Borrower's or Administrative Agent's
name, but at the cost and expense of Domestic Borrowers, do the following, and
Canadian Borrower hereby irrevocably designates, makes, constitutes and appoints
Canadian Agent (and all Persons designated by Canadian Agent) as Canadian
Borrower's true and lawful attorney (and agent-in-fact), solely with respect to
the matters set forth in
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this Section 12.1, and Canadian Agent, or Canadian Agent's agent, may, without
notice to Canadian Borrower and in Canadian Borrower's or Canadian Agent's name,
but at the cost and expense of Canadian Borrower, do the following:
12.1.1 At such time or times as Administrative Agent or Canadian
Agent, as the case may be, or said agent, in its sole discretion, may determine,
endorse such Borrower's name on any checks, notes, acceptances, drafts, money
orders or any other evidence of payment or proceeds of the Collateral which come
into the possession of Administrative Agent or Canadian Agent, as the case may
be, or under Administrative Agent's or Canadian Agent's, as the case may be,
control.
12.1.2 At such time or times upon or after the occurrence and during
the continuance of an Event of Default (provided that the occurrence of an Event
of Default shall not be required with respect to clauses (d), (f), (h) and (i)
below), as Administrative Agent or Canadian Agent, as the case may be, or its
agent in its sole discretion may determine: (a) demand payment of the Accounts
from the Account Debtors, enforce payment of the Accounts by legal proceedings
or otherwise, and generally exercise all of such Borrower's rights and remedies
with respect to the collection of the Accounts; (b) settle, adjust, compromise,
discharge or release any of the Accounts or other Collateral or any legal
proceedings brought to collect any of the Accounts or other Collateral; (c) sell
or assign any of the Accounts and other Collateral upon such terms, for such
amounts and at such time or times as Administrative Agent or Canadian Agent, as
the case may be, deems advisable; (d) take control, in any manner, of any item
of payment or proceeds relating to any Collateral; (e) prepare, file and sign
such Borrower's name to a proof of claim in bankruptcy or similar document
against any Account Debtor or to any notice of lien, assignment or satisfaction
of lien or similar document in connection with any of the Collateral; (f)
receive, open and dispose of all mail addressed to such Borrower and notify
postal authorities to change the address for delivery thereof to such address as
Administrative Agent or Canadian Agent, as applicable, may designate; (g)
endorse the name of such Borrower upon any of the items of payment or proceeds
relating to any Collateral and deposit the same to the account of Administrative
Agent or Canadian Agent, as the case may be, on account of the Obligations; (h)
endorse the name of such Borrower upon any chattel paper, document, instrument,
invoice, freight bill, bill of lading or similar document or agreement relating
to the Accounts, Inventory and any other Collateral; (i) use such Borrower's
stationery and sign the name of such Borrower to verifications of the Accounts
and notices thereof to Account Debtors; (j) use the information recorded on or
contained in any data processing equipment and computer hardware and software
relating to the Accounts, Inventory, Equipment and any other Collateral; (k)
make and adjust claims under policies of insurance; and (l) do all other acts
and things necessary, in Administrative Agent's or Canadian Agent's, as the case
may be, determination, to fulfill such Borrower's obligations under this
Agreement.
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The power of attorney granted hereby shall constitute a power coupled with
an interest and shall be irrevocable.
12.2 Indemnity.
Each Borrower hereby agrees to indemnify Administrative Agent, Canadian
Agent, Bank and each Lender (and each of their Affiliates) and hold
Administrative Agent, Canadian Agent, Bank and each Lender (and each of their
Affiliates) harmless from and against any liability, loss, damage, suit, action
or proceeding ever suffered or incurred by any such Person (including reasonable
legal fees and expenses) as the result of Borrowers' failure to observe, perform
or discharge Borrowers' duties hereunder. In addition, each Borrower shall
defend Administrative Agent, Canadian Agent, Bank and each Lender (and each of
their Affiliates) against and save it harmless from all claims of any Person
with respect to the Collateral (except those resulting from the gross negligence
or intentional misconduct of any such Person). Without limiting the generality
of the foregoing, these indemnities shall extend to any claims asserted against
Administrative Agent, Canadian Agent, Bank or any Lender (and each of their
Affiliates) by any Person under any Environmental Laws by reason of any
Borrower's or any other Person's failure to comply with laws applicable to solid
or hazardous waste materials or other toxic substances. Notwithstanding any
contrary provision in this Agreement, the obligations of Borrowers under this
Section 12.2 shall survive the payment in full of the Obligations and the
termination of this Agreement.
12.3 Sale of Interest.
No Borrower may sell, assign or transfer any interest in this Agreement,
any of the other Loan Documents, or any of the Obligations, or any portion
thereof, including, without limitation, such Borrower's rights, title,
interests, remedies, powers, and duties hereunder or thereunder.
12.4 Severability.
Wherever possible, each provision of this Agreement shall be interpreted in
such manner as to be effective and valid under applicable law, but if any
provision of this Agreement shall be prohibited by or invalid under applicable
law, such provision shall be ineffective only to the extent of such prohibition
or invalidity, without invalidating the remainder of such provision or the
remaining provisions of this Agreement.
12.5 Successors and Assigns.
This Agreement, the Other Agreements and the Security Documents shall be
binding upon and inure to the benefit of the successors and assigns of each
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Borrower, Administrative Agent, Canadian Agent, Bank and each Lender permitted
under Section 11.9 or Section 11.11 hereof.
12.6 Cumulative Effect; Conflict of Terms.
The provisions of the Other Agreements and the Security Documents are
hereby made cumulative with the provisions of this Agreement. Except as
otherwise provided in any of the other Loan Documents by specific reference to
the applicable provision of this Agreement, if any provision contained in this
Agreement is in direct conflict with, or inconsistent with, any provision in any
of the other Loan Documents, the provision contained in this Agreement shall
govern and control.
12.7 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 and delivered shall be deemed to be an original and all of which
counterparts taken together shall constitute but one and the same instrument.
12.8 Notices.
Except as otherwise provided herein, all notices, requests and demands to or
upon a party hereto, to be effective, shall be in writing and shall be sent by
certified or registered mail, return receipt requested, by personal delivery
against receipt, by overnight courier or by facsimile and, unless otherwise
expressly provided herein, shall be deemed to have been validly served, given,
delivered or received immediately when delivered against receipt, one Business
Day after deposit with an overnight courier or, in the case of facsimile notice,
when sent, addressed in the case of each Lender to such Lender at such Lender's
address set forth on the signature page to this Agreement (or set forth in the
applicable assignment agreement by which such Lender became a Lender under this
Agreement), and with respect to the following Persons, as follows:
If to Administrative Agent: Fleet Capital Corporation
15260 Ventura Boulevard, Suite 400
Sherman Oaks, California 91403
Attention: Portfolio Manager
Facsimile No.: (818) 382-4291
With a copy to: Sheppard, Mullin, Richter & Hampton LLP
333 South Hope Street, 48(th) Floor
Los Angeles, California 90071
Attention: Anthony R. Callobre
Facsimile No.: (213) 620-1398
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If to Canadian Agent: Fleet Capital Canada Corporation
300 The East Mall
Suite 120
Toronto, Ontario
M9B 6B7 Canada
Attention: General Manager
Facsimile No.: (416) 236-4572
With a copy to: Fleet Capital Corporation
400 Galleria Parkway
Suite 1950
Atlanta, Georgia 30339
Attention: Account Administration
Manager
Facsimile No.: (770) 859-2480
If to Borrowers or Borrower c/o Celadon Group, Inc.
Representative: One Celadon Drive
Indianapolis, Indiana 46235-4207
Attention: Chief Financial Officer
Facsimile No.: (317) 890-8099
With a copy to: Ice Miller
One American Square
Box 82001
Indianapolis, Indiana 46282-0002
Attention: Peggy J. Naile, Esq.
Facsimile No.: (317) 236-2219
or to such other address as each party may designate for itself by notice given
in accordance with this Section 12.8; provided, however, that any notice,
request or demand to or upon Administrative Agent, Canadian Agent or a Lender
pursuant to Section 3.1.1 or 4.2.2 hereof shall not be effective until received
by Administrative Agent, Canadian Agent or such Lender.
12.9 Consent.
Whenever Administrative Agent's, Canadian Agent's or Majority Lenders'
consent is required to be obtained under this Agreement, any of the Other
Agreements or any of the Security Documents as a condition to any action,
inaction, condition or event, except as otherwise specifically provided herein,
Administrative Agent, Canadian Agent or Majority Lenders, as applicable, shall
be authorized to give or withhold such consent in their sole and absolute
discretion.
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12.10 Credit Inquiries.
Each Borrower hereby authorizes and permits Administrative Agent, Canadian
Agent and each Lender to respond to usual and customary credit inquiries from
third parties concerning such Borrower or any of its Subsidiaries.
12.11 Time of Essence.
Time is of the essence of this Agreement, the Other Agreements and the
Security Documents.
12.12 Entire Agreement.
This Agreement and the other Loan Documents, together with all other
instruments, agreements and certificates executed by the parties in connection
therewith or with reference thereto, embody the entire understanding and
agreement between the parties hereto and thereto with respect to the subject
matter hereof and thereof and supersede all prior agreements, understandings and
inducements, whether express or implied, oral or written.
12.13 Interpretation.
No provision of this Agreement or any of the other Loan Documents shall be
construed against or interpreted to the disadvantage of any party hereto by any
court or other governmental or judicial authority by reason of such party having
or being deemed to have structured or dictated such provision.
12.14 Confidentiality.
Administrative Agent, Canadian Agent and each Lender shall hold all
nonpublic information obtained pursuant to the requirements of this Agreement in
accordance with Administrative Agent's, Canadian Agent's and such Lender's
customary procedures for handling confidential information of this nature and in
accordance with safe and sound banking practices and in any event may make
disclosure reasonably required by a prospective participant or assignee in
connection with the contemplated participation or assignment or as required or
requested by any governmental authority or representative thereof or pursuant to
legal process and shall require any such participant or assignee to agree to
comply with this Section 12.14.
12.15 Judgment.
If, for the purposes of obtaining judgment in any court, it is necessary to
convert a sum due hereunder or under any other Loan Document in one currency
into another currency, the rate of exchange used shall be that at which in
accordance with normal banking procedures the Administrative Agent could
purchase the first currency
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with such other currency on the Business Day preceding that on which final
judgment is given. The obligation of each Borrower in respect of any such sum
due from it to the Administrative Agent, Canadian Agent or any Lender hereunder
or under the other Loan Documents shall, notwithstanding any judgment in a
currency (the "Judgment Currency") other than that in which such sum is
denominated in accordance with the applicable provisions of this Agreement (the
"Agreement Currency"), be discharged only to the extent that on the Business Day
following receipt by the Administrative Agent, Canadian Agent or such Lender of
any sum adjudged to be so due in the Judgment Currency, the Administrative Agent
or such Lender may in accordance with normal banking procedures purchase the
Agreement Currency with the Judgment Currency. If the amount of the Agreement
Currency so purchased is less than the sum originally due to the Administrative
Agent, Canadian Agent or such Lender in the Agreement Currency, each Borrower
agrees, as a separate obligation and notwithstanding any such judgment, to
indemnify the Administrative Agent, Canadian Agent or such Lender or the Person
to whom such obligation was owing against such loss. If the amount of the
Agreement Currency so purchased is greater than the sum originally due to the
Administrative Agent, Canadian Agent or such Lender in such currency, the
Administrative Agent, Canadian Agent or such Lender agrees to return the amount
of any excess to the applicable Borrower (or to any other Person who may be
entitled thereto under applicable law).
12.16 GOVERNING LAW; CONSENT TO FORUM.
THIS AGREEMENT HAS BEEN NEGOTIATED AND DELIVERED IN AND SHALL BE DEEMED TO
HAVE BEEN MADE IN LOS ANGELES, CALIFORNIA. THIS AGREEMENT SHALL BE GOVERNED BY
AND CONSTRUED IN ACCORDANCE WITH THE LAWS OF THE STATE OF CALIFORNIA; PROVIDED,
HOWEVER, THAT IF ANY OF THE COLLATERAL SHALL BE LOCATED IN ANY JURISDICTION
OTHER THAN CALIFORNIA, THE LAWS OF SUCH JURISDICTION SHALL GOVERN THE METHOD,
MANNER AND PROCEDURE FOR FORECLOSURE OF, OR REALIZATION UNDER, ADMINISTRATIVE
AGENT'S OR CANADIAN AGENT'S LIEN UPON SUCH COLLATERAL AND THE ENFORCEMENT OF
ADMINISTRATIVE AGENT'S OR CANADIAN AGENT'S OTHER REMEDIES IN RESPECT OF SUCH
COLLATERAL TO THE EXTENT THAT THE LAWS OF SUCH JURISDICTION ARE DIFFERENT FROM
OR INCONSISTENT WITH THE LAWS OF CALIFORNIA. AS PART OF THE CONSIDERATION FOR
NEW VALUE RECEIVED, AND REGARDLESS OF ANY PRESENT OR FUTURE DOMICILE OR
PRINCIPAL PLACE OF BUSINESS OF ANY BORROWER, ADMINISTRATIVE AGENT, CANADIAN
AGENT OR ANY LENDER, EACH BORROWER HEREBY CONSENTS AND AGREES THAT THE SUPERIOR
COURT OF LOS ANGELES COUNTY, CALIFORNIA, OR, AT ADMINISTRATIVE AGENT'S OR
CANADIAN AGENT'S OPTION, THE UNITED
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STATES DISTRICT COURT FOR THE CENTRAL DISTRICT OF CALIFORNIA, SHALL HAVE
EXCLUSIVE JURISDICTION TO HEAR AND DETERMINE ANY CLAIMS OR DISPUTES BETWEEN ANY
BORROWER ON THE ONE HAND AND ADMINISTRATIVE AGENT, CANADIAN AGENT OR ANY LENDER
ON THE OTHER HAND PERTAINING TO THIS AGREEMENT OR TO ANY MATTER ARISING OUT OF
OR RELATED TO THIS AGREEMENT; PROVIDED THAT ADMINISTRATIVE AGENT, CANADIAN AGENT
AND/OR ANY LENDER MAY INITIATE LEGAL OR EQUITABLE PROCEEDINGS IN ANY OTHER COURT
WHICH HAS SUBJECT MATTER JURISDICTION OVER THE MATTER IN CONTROVERSY. EACH
BORROWER EXPRESSLY SUBMITS AND CONSENTS IN ADVANCE TO SUCH JURISDICTION IN ANY
ACTION OR SUIT COMMENCED IN ANY SUCH COURT, AND EACH BORROWER HEREBY WAIVES ANY
OBJECTION WHICH SUCH BORROWER MAY HAVE BASED UPON LACK OF PERSONAL JURISDICTION,
IMPROPER VENUE OR FORUM NON CONVENIENS AND HEREBY CONSENTS TO THE GRANTING OF
SUCH LEGAL OR EQUITABLE RELIEF AS IS DEEMED APPROPRIATE BY SUCH COURT. EACH
BORROWER HEREBY WAIVES PERSONAL SERVICE OF THE SUMMONS, COMPLAINT AND OTHER
PROCESS ISSUED IN ANY SUCH ACTION OR SUIT AND AGREES THAT SERVICE OF SUCH
SUMMONS, COMPLAINT AND OTHER PROCESS MAY BE MADE BY REGISTERED OR CERTIFIED MAIL
ADDRESSED TO THE BORROWER REPRESENTATIVE AT THE ADDRESS SET FORTH IN THIS
AGREEMENT AND THAT SERVICE SO MADE SHALL BE DEEMED COMPLETED UPON THE EARLIER OF
THE BORROWER REPRESENTATIVE'S ACTUAL RECEIPT THEREOF OR 3 DAYS AFTER DEPOSIT IN
THE U.S. MAILS, PROPER POSTAGE PREPAID. NOTHING IN THIS AGREEMENT SHALL BE
DEEMED OR OPERATE TO AFFECT THE RIGHT OF ADMINISTRATIVE AGENT, CANADIAN AGENT OR
ANY LENDER TO SERVE LEGAL PROCESS IN ANY OTHER MANNER PERMITTED BY LAW, OR TO
PRECLUDE THE ENFORCEMENT BY ADMINISTRATIVE AGENT, CANADIAN AGENT OR ANY LENDER
OF ANY JUDGMENT OR ORDER OBTAINED IN SUCH FORUM OR THE TAKING OF ANY ACTION
UNDER THIS AGREEMENT TO ENFORCE SAME IN ANY OTHER APPROPRIATE FORUM OR
JURISDICTION.
12.17 WAIVERS BY BORROWERS.
EACH BORROWER WAIVES (a) THE RIGHT TO TRIAL BY JURY (WHICH ADMINISTRATIVE
AGENT, CANADIAN AGENT AND EACH LENDER HEREBY ALSO WAIVES) IN ANY ACTION, SUIT,
PROCEEDING OR COUNTERCLAIM OF ANY KIND ARISING OUT OF OR RELATED TO ANY OF THE
LOAN DOCUMENTS, THE OBLIGATIONS OR THE COLLATERAL; (b) PRESENTMENT, DEMAND AND
PROTEST AND NOTICE OF PRESENTMENT, PROTEST, DEFAULT, NON PAYMENT, MATURITY,
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RELEASE, COMPROMISE, SETTLEMENT, EXTENSION OR RENEWAL OF ANY OR ALL COMMERCIAL
PAPER, ACCOUNTS, CONTRACT RIGHTS, DOCUMENTS, INSTRUMENTS , CHATTEL PAPER AND
GUARANTIES AT ANY TIME HELD BY ADMINISTRATIVE AGENT, CANADIAN AGENT OR ANY
LENDER ON WHICH ANY BORROWER MAY IN ANY WAY BE LIABLE AND HEREBY RATIFIES AND
CONFIRMS WHATEVER ADMINISTRATIVE AGENT, CANADIAN AGENT OR ANY LENDER MAY DO IN
THIS REGARD; (c) NOTICE PRIOR TO ADMINISTRATIVE AGENT'S OR CANADIAN AGENT'S
TAKING POSSESSION OR CONTROL OF THE COLLATERAL OR ANY BOND OR SECURITY WHICH
MIGHT BE REQUIRED BY ANY COURT PRIOR TO ALLOWING ADMINISTRATIVE AGENT OR
CANADIAN AGENT TO EXERCISE ANY OF ADMINISTRATIVE AGENT'S OR CANADIAN AGENT'S
REMEDIES; (d) THE BENEFIT OF ALL VALUATION, APPRAISEMENT AND EXEMPTION LAWS; AND
(e) NOTICE OF ACCEPTANCE HEREOF. EACH BORROWER ACKNOWLEDGES THAT THE FOREGOING
WAIVERS ARE A MATERIAL INDUCEMENT TO ADMINISTRATIVE AGENT'S, CANADIAN AGENT'S
AND EACH LENDER'S ENTERING INTO THIS AGREEMENT AND THAT ADMINISTRATIVE AGENT,
CANADIAN AGENT AND EACH LENDER IS RELYING UPON THE FOREGOING WAIVERS IN ITS
FUTURE DEALINGS WITH BORROWERS. EACH BORROWER WARRANTS AND REPRESENTS THAT IT
HAS REVIEWED THE FOREGOING WAIVERS WITH ITS LEGAL COUNSEL AND HAS KNOWINGLY AND
VOLUNTARILY WAIVED ITS JURY TRIAL RIGHTS FOLLOWING CONSULTATION WITH LEGAL
COUNSEL. IN THE EVENT OF LITIGATION, THIS AGREEMENT MAY BE FILED AS A WRITTEN
CONSENT TO A TRIAL BY THE COURT.
12.18 Joint and Several.
Each Domestic Borrower shall be obligated for all of the Obligations on a
joint and several basis, notwithstanding which of the Domestic Borrowers may
have directly received the proceeds of any particular Loan. Each Domestic
Borrower acknowledges and agrees that, for purposes of the Loan Documents, the
Domestic Borrowers constitute a single integrated financial enterprise and that
each receives a benefit from the availability of credit under this Agreement to
all Domestic Borrowers. Each Domestic Borrower waives all defenses arising under
the laws of suretyship, to the extent such laws are applicable, in connection
with its joint and several obligations under this Agreement. Without limiting
the foregoing, each Domestic Borrower agrees to the Joint Borrower Provisions
set forth in Exhibit 12.18, incorporated by this reference.
12.19 Further Assurances.
Without limiting in any manner any other obligation, requirement or
agreement hereunder or under any of the other Loan Documents or otherwise,
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Borrowers shall, at their expense and without expense to the Lenders,
Administrative Agent or Canadian Agent, do, execute and deliver such further
acts and documents as the Majority Lenders, the Administrative Agent or the
Canadian Agent from time to time require for the assuring and confirming unto
the Lenders, the Administrative Agent or the Canadian Agent of the rights hereby
created or intended now or hereafter so to be, or for carrying out the intention
or facilitating the performance of the terms of any Loan Document.
12.20 Interest Act (Canada).
For the purpose of complying with the Interest Act (Canada), it is
expressly stated that:
12.20.1 where interest is calculated pursuant hereto at a rate based
upon a 360-day period (for the purposes of this Section 12.20.1, the "first
rate"), the yearly rate or percentage of interest to which the first rate is
equivalent is the first rate multiplied by the actual number of days in the
calendar year in which the same is to be ascertained and divided by 360; and
12.20.2 the parties hereto acknowledge that there is a material
distinction between the nominal and effective rates of interest and that they
are capable of making the calculations necessary to compare such rates and that
the calculations herein are to be made using the nominal rate method and not on
any basis that gives effect to the principle of deemed reinvestment of interest.
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IN WITNESS WHEREOF, this Agreement has been duly executed on the day and
year specified at the beginning of this Agreement.
CELADON GROUP, INC.,
a Delaware corporation
By:
------------------------------------------
Name:
----------------------------------------
Title:
---------------------------------------
CELADON TRUCKING SERVICES, INC.,
a New Jersey corporation
By:
------------------------------------------
Name:
----------------------------------------
Title:
---------------------------------------
TRUCKERSB2B, INC.,
a Delaware corporation
By:
------------------------------------------
Name:
----------------------------------------
Title:
---------------------------------------
CELADON CANADA, INC.,
an Ontario corporation
By:
------------------------------------------
Name:
----------------------------------------
Title:
---------------------------------------
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FLEET CAPITAL CORPORATION, a Rhode Island
corporation, as Administrative Agent, a
Lender, and as a Canadian Participating Lender
By:
-------------------------------------------
Leslie Reuter
Senior Vice President
FIFTH THIRD BANK, as a Lender
By:
-------------------------------------------
Name:
-----------------------------------------
Title:
----------------------------------------
KEY BANK, as a Lender
By:
-------------------------------------------
Name:
-----------------------------------------
Title:
----------------------------------------
LA SALLE BANK NATIONAL ASSOCIATION, as a
Lender and as a Canadian Participating Lender
By:
-------------------------------------------
Name:
-----------------------------------------
Title:
----------------------------------------
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FLEET CAPITAL CANADA CORPORATION, a Canadian
corporation, as Canadian Agent and Canadian
Lender
By:
------------------------------------------
Name:
----------------------------------------
Title:
---------------------------------------
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APPENDIX A
GENERAL DEFINITIONS
When used in the Loan and Security Agreement dated as of September 24,
2002, by and among Fleet Capital Corporation, individually and as Administrative
Agent, the other financial institutions which are or become parties thereto,
Fleet Capital Canada Corporation, individually and as Canadian Agent, Celadon
Group, Inc., a Delaware corporation, Celadon Trucking Services, Inc., a New
Jersey corporation, TruckersB2B, Inc., a Delaware corporation, and Celadon
Canada, Inc., an Ontario corporation, (a) the terms Account, Certificated
Security, Chattel Paper, Deposit Account, Document, Equipment, Financial Asset,
Fixture, General Intangibles, Goods, Instruments, Inventory, Investment
Property, Security, Proceeds, Security Entitlement and Uncertificated Security
have the respective meanings assigned thereto under the UCC (as defined below);
(b) the terms Commercial Tort Claims, Electronic Chattel Paper,
Health-Care-Insurance Receivables, Letter-of-Credit Rights, Payment Intangibles,
Software, Supporting Obligations and Tangible Chattel Paper have the respective
meanings assigned thereto in the UCC Revisions (as defined below); (c) all
terms indicating Collateral having the meanings assigned thereto under the UCC
or the UCC Revisions shall be deemed to mean such Property, whether now owned or
hereafter created or acquired by Borrowers and their applicable Subsidiaries or
in which Borrowers and their applicable Subsidiaries now have or hereafter
acquire any interest; (d) capitalized terms which are not otherwise defined have
the respective meanings assigned thereto in said Loan and Security Agreement;
and (e) the following terms shall have the following meanings (terms defined in
the singular to have the same meaning when used in the plural and vice versa):
"Account Creditor" - collectively, Domestic Borrowers, Canadian Borrower
and any other Subsidiary of CGI, if any, approved by the Administrative Agent
and Majority Lenders in writing from time to time for inclusion as an "Account
Creditor" for purposes of the Loan Documents. As of the Closing Date, the sole
Account Creditors shall be Domestic Borrowers and Canadian Borrower.
"Account Debtor" - any Person who is or may become obligated on or under or
on account of any Account, Contract Right, Chattel Paper or General Intangible.
"Adjustment Date" - as defined in the definition of "Applicable Margin".
"Administrative Agent" - Fleet Capital Corporation in its capacity as
administrative agent for the Lenders under the Agreement and any successor in
that capacity appointed pursuant to Section 11.11 of the Agreement.
A-1
"Affiliate" - a Person: (a) which directly or indirectly through one or
more intermediaries controls, or is controlled by, or is under common control
with, a Person; (b) which beneficially owns or holds 5% or more of any class of
the Voting Stock of a Person; or (c) 5% or more of the Voting Stock (or in the
case of a Person which is not a corporation, 5% or more of the equity interest)
of which is beneficially owned or held by a Person or a Subsidiary of a Person.
"Aggregate Percentage" - with respect to each Lender, the percentage equal
to the quotient of (a) such Lender's Domestic Revolving Credit Commitment
divided by (b) the aggregate of all Domestic Revolving Credit Commitments.
"Agreement" - the Loan and Security Agreement referred to in the first
sentence of this Appendix A, all Exhibits and Schedules thereto and this
Appendix A, in each case either as originally executed or as the same may from
time to time be supplemented, modified, amended, restated, extended or
supplanted.
"Agreement Currency" - as defined in Section 12.15 of the Agreement.
"Applicable Margin" - from the Closing Date to, but not including, the
first Adjustment Date (as hereinafter defined) the percentages set forth below
with respect to Base Rate Loans, LIBOR Loans, Canadian Base Rate Loans and
Canadian Fixed Rate Loans:
Base Rate Loans (Domestic Revolving) 0.50%
Base Rate Loans (Domestic Term) 1.00%
LIBOR Loans (Domestic Revolving) 2.50%
LIBOR Loans (Domestic Term) 3.00%
Canadian Base Rate Loans (Revolving) 2.50%
Canadian Base Rate Loans (Term) 3.00%
Canadian Fixed Rate Loans 2.50%
(Revolving)
Canadian Fixed Rate Loans (Term) 3.00%
The percentages set forth above will be adjusted quarterly on the first day
of each month after Administrative Agent's receipt of the monthly financial
statements delivered by Borrowers to Administrative Agent pursuant to Section
8.1.3(c) of the Agreement with respect to each month (beginning with December
2002) which is a final month in a fiscal quarter of CGI (each such date an
"Adjustment Date"), by reference to the Fixed Charge Coverage Ratio for the four
consecutive fiscal quarters most recently ending, determined on the basis of
such monthly financial statements, in accordance with the following:
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Fixed Charge Base Rate Base Rate Loans LIBOR Loans LIBOR Loans
Coverage Ratio Loans (Domestic Term) (Domestic Revolving), (Domestic Term),
- -------------- (Domestic --------------- Canadian Base Rate Canadian Base Rate
Revolving) Loans (Revolving) and Loans (Term),
---------- Canadian Fixed Rate Canadian Fixed
Loans (Revolving) Rate Loans (Term)
--------------------- ------------------
<1.0 1.00% 1.50% 3.00% 3.50%
1.00-1.25 0.50% 1.00% 2.50% 3.00%
1.26-1.50 0.25% 0.50% 2.00% 2.50%
1.51-2.00 0% 0.25% 1.75% 2.25%
2.01 0% 0% 1.50% 2.00%
provided that, (a) if CGI's audited financial statements for any fiscal year
delivered pursuant to Section 8.1.3(a) of the Agreement reflect a Fixed Charge
Coverage Ratio that yields a different Applicable Margin than that yielded by
the monthly financial statements previously delivered pursuant to Section
8.1.3(c) of the Agreement for the last month of such fiscal year, the Applicable
Margin shall be readjusted retroactive to the preceding Adjustment Date and (b)
if Borrowers fail to deliver the financial statements required to be delivered
pursuant to Section 8.1.3(a) or Section 8.1.3(c) of the Agreement on or before
the due date thereof, the interest rate shall automatically adjust to the
highest interest rate set forth above, effective prospectively from such due
date until the next Adjustment Date.
"Bank" - Fleet National Bank, or its successor.
"Base Rate" - the rate of interest announced or quoted by Bank from time to
time as its prime rate for commercial loans, whether or not such rate is the
lowest rate charged by Bank to its most preferred borrowers; and, if such prime
rate for commercial loans is discontinued by Bank as a standard, a comparable
reference rate designated by Bank as a substitute therefor shall be the Base
Rate.
"Base Rate Loan" - any Loan hereunder bearing interest computed by
reference to the Base Rate, including, without limitation, that portion of the
outstanding principal amount of the Domestic Term Loan bearing interest with
reference to the Base Rate.
"Borrowers" - as defined in the preamble to the Agreement.
"Borrower Representative" - CTSI.
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"Borrowing Base Certificate" - a certificate by a responsible officer of
Borrower Representative, substantially in the form of Exhibit 8.1.4 (or another
form acceptable to Administrative Agent) setting forth the calculation of the
Domestic Borrowing Base and the Canadian Borrowing Base, including a calculation
of each component thereof, all in such detail as shall be satisfactory to
Administrative Agent. All calculations of the Domestic Borrowing Base and the
Canadian Borrowing Base in connection with the preparation of any Borrowing Base
Certificate shall originally be made by Borrower Representative and certified to
Administrative Agent; provided, that Administrative Agent and Canadian Agent, as
applicable, shall have the right to review and adjust, in the exercise of its
reasonable credit judgment, any such calculation after giving notice thereof to
Borrower Representative, (a) to reflect its reasonable estimate of declines in
value of any of the Collateral described therein, and (b) to the extent that
such calculation is not in accordance with this Agreement.
"Business Day" - (a) any day excluding Saturday, Sunday and any day which
is a legal holiday under the laws of the State of California or is a day on
which banking institutions located in the State of California are closed, (b)
with respect to any disbursements and payments in and calculations pertaining to
any Canadian Revolving Credit Loan or the Canadian Term Loan, any day which is a
Business Day in clause (a) above and which is also not a day on which commercial
banks in Toronto, Canada, Atlanta, Georgia and New York, New York are authorized
or required by law to close, and (c) with respect to the making, continuing,
prepaying or repaying of any LIBOR Loan or Canadian Offshore Rate Loan, any day
which is a Business Day described in clauses (a) and (b) above and which is also
a day on which dealings in U.S. Dollars are carried on in the London interbank
eurodollar market.
"Canadian Agent" - Fleet Canada in its capacity as Canadian Agent for the
Canadian Lender and the Canadian Participating Lenders under the Agreement and
any successor in that capacity appointed pursuant to Section 11.11 of the
Agreement.
"Canadian BA" - a depository bill as defined in the Depository Bills and
Notes Act (Canada) in Canadian Dollars that is in the form of a draft drawn by a
borrower and accepted by a Canadian lender.
"Canadian BA Rate" - for the applicable Interest Period of a Canadian BA
Rate Loan, the rate of interest per annum equal to the annual rate of interest
quoted by the Canadian Agent as being the rate of interest applicable to
Canadian BAs for a face amount similar to the amount of the applicable Canadian
BA Rate Loan and for the applicable Interest Period, plus the Fleet Canada
Margin.
"Canadian BA Rate Loan" - a loan in Canadian Dollars made to Canadian
Borrower pursuant to the Agreement, bearing interest with reference to the
Canadian BA Rate, including, without limitation, that portion of the outstanding
A-4
principal amount of the Canadian Term Loan bearing interest with reference to
the Canadian BA Rate.
"Canadian Base Rate" - (a) with respect to an obligation denominated in
U.S. Dollars for any date, the annual rate of interest in effect for such day as
publicly announced from time to time by the Canadian Lender as its "reference
rate" for commercial loans made by it to customers in Canada denominated in U.S.
Dollars, plus the Fleet Canada Margin, and (b) with respect to an obligation
denominated in Canadian Dollars for any date, the Canadian Prime, plus the Fleet
Canada Margin. The "reference rate" is a rate set by the Canadian Lender based
upon various factors including its costs and desired return, general economic
conditions and other factors, and is used as a reference point for pricing some
loans, which may be priced at, above, or below such announced rate. Any change
in the reference rate announced by the Canadian Lender shall take effect at the
opening of business on the day specified in the public announcement of such
change.
"Canadian Base Rate Loan" - a loan in U.S. Dollars or Canadian Dollars made
by to Canadian Borrower pursuant to the Agreement, bearing interest with
reference to the Canadian Base Rate, including, without limitation, that portion
of the outstanding principal amount of the Canadian Term Loan bearing interest
with reference to the Canadian Base Rate.
"Canadian Benefit Plans" - all material employee benefit plans, programs or
arrangements of any nature or kind whatsoever that are not Canadian Pension
Plans and are maintained or contributed to by, or to which there is or may be an
obligation to contribute by, Canadian Borrower or its Subsidiaries in respect to
their employees or former employees in Canada.
"Canadian Borrower" - as defined in the preamble to the Agreement.
"Canadian Borrowing Base" - as at any date of determination thereof, the
Dollar Equivalent of an amount equal to the lesser of the following:
(a) the Canadian Revolving Credit Sub-Limit; and
(b) an amount equal to the sum of 85% of the net amount of Eligible
Accounts of Canadian Borrower outstanding at such date.
The limitations set forth in the immediately preceding sentence and the
advance rate set forth above may be adjusted downward by Canadian Agent as
Canadian Agent shall deem necessary or appropriate in its reasonable credit
judgment, including, without limitation, adjustments with respect to Prior
Claims or inventory subject to rights of suppliers under Section 81.1 of the
Bankruptcy and Insolvency Act (Canada). For purposes hereof, the net amount of
Eligible Accounts at any time shall
A-5
be the face amount of such Eligible Accounts less any and all returns, rebates,
discounts (which may, at Canadian Agent's option, be calculated on shortest
terms), credits, allowances or excise taxes of any nature at any time issued,
owing, claimed by Account Debtors, granted, outstanding or payable in connection
with such Accounts at such time.
"Canadian Collateral" - all of the Property and interests in Property of
Canadian Borrower described in Section 5 of the Agreement, and all other
Property and interests in Property of Canadian Borrower that now or hereafter
secures the payment and performance of any of the Canadian Obligations.
"Canadian Dollar Refunding Amount" - as defined in Section 3.2.6 of the
Agreement.
"Canadian Dollars and cdn$" - each, lawful currency of Canada.
"Canadian Fixed Rate" - either the Canadian BA Rate or the Canadian
Offshore Rate, as applicable.
"Canadian Fixed Rate Loan" - a Canadian Revolving Credit Loan or a portion
of the Canadian Term Loan maintained as a Canadian Offshore Rate Loan or a
Canadian BA Rate Loan, as applicable.
"Canadian Lender" - Fleet Canada, in its capacity as provider of Canadian
Revolving Credit Loans and the Canadian Term Loan.
"Canadian Loan Account" - as defined in Section 3.6 of the Agreement.
"Canadian Non-Excluded Taxes" - as defined in Section 2.13.9 of the
Agreement.
"Canadian Obligations" - all Loans made by the Canadian Lender and all
other advances, debts, liabilities, obligations, covenants and duties, together
with all interest (including, without limitation, whether accruing prior to or
subsequent to the commencement of a bankruptcy or similar proceeding with
Canadian Borrower as a debtor thereof and whether or not such interest is an
allowed claim in any such proceeding), fees and other charges thereon, owing,
arising, due or payable from Canadian Borrower to Canadian Agent, for its own
benefit, from Canadian Borrower to Canadian Agent for the benefit of Canadian
Lender or Canadian Participating Lenders or from Canadian Borrower to any other
Lender or Bank, of any kind or nature, present or future, whether or not
evidenced by any note, guaranty or other instrument, whether arising under the
Agreement or any of the other Loan Documents or otherwise, whether direct or
indirect (including those acquired by assignment), absolute or contingent,
primary or secondary, due or to become due, now existing or hereafter arising
and however acquired, including without limitation any Derivative
A-6
Obligations owing by Canadian Borrower to Canadian Agent, Canadian Lender, any
Canadian Participating Lender, any other Lender or Bank.
"Canadian Offshore Rate" - for any Interest Period, with respect to
Canadian Offshore Rate Loans comprising part of the same borrowing, based on
LIBOR (but without giving effect to the last sentence of the definition of
LIBOR), plus the Fleet Canada Margin.
"Canadian Offshore Rate Loan" - a loan in U.S. Dollars made to Canadian
Borrower pursuant to the Agreement bearing interest with reference to the
Canadian Offshore Rate, including, without limitation, that portion of the
outstanding principal amount of the Canadian Term Loan bearing interest with
reference to the Canadian Offshore Rate.
"Canadian Participating Lender" - each Lender that has a Canadian
Percentage as identified on Exhibit 1.1; it being understood and agreed that
each Canadian Affiliate of a Lender (other than Fleet and Canadian Lender) which
is not a non-resident of Canada for purposes of Part XIII of the Income Tax Act
(Canada) or any successor provision thereto shall be a Canadian Participating
Lender.
"Canadian Participation Fee" - as defined in Section 2.6 of the Agreement.
"Canadian Pension Plan" - means each plan, program or arrangement which is
considered to be a pension plan under any applicable pension benefits standard
or tax statute and/or regulation in Canada established, maintained or
contributed to by, or to which there is or may be an obligation to contribute
by, Canadian Borrower or its Subsidiaries in respect of its employees or former
employees.
"Canadian Percentage" - relative to the Canadian Lender and any Canadian
Participating Lender, the applicable percentage relating to such Person's
obligation to fund Canadian Revolving Credit Loans and a portion of the Canadian
Term Loan pursuant to Section 3.2.6 of the Agreement as set forth opposite its
name on Exhibit 1.1 to the Agreement, as such percentage may be adjusted from
time to time pursuant to assignment agreements executed by such Lender and
delivered pursuant to Section 11.9 of the Agreement. A Lender shall not have any
Canadian Percentage if its percentage under the Canadian Percentage column is
zero or is blank.
"Canadian Prime" - the annual rate of interest announced by the Canadian
Agent as its "reference rate" for commercial loans made by it in Canada in
Canadian Dollars. The "reference rate" is a rate set by the Canadian Agent based
upon various factors including its cost and desired return, general economic
conditions and other factors, and is used as a reference point for pricing some
loans, which may be
A-7
priced at, above, or below such announced rate. Any change in the reference rate
announced by the Canadian Agent shall take effect at the opening of business on
the day specified in the public announcement of such change.
"Canadian Revolving Credit Exposure" - at any date, the amount equal to the
Dollar Equivalent of the aggregate principal amount of all Canadian Revolving
Credit Loans.
"Canadian Revolving Credit Loan" - as defined in Section 1.1.2 of the
Agreement.
"Canadian Revolving Credit Sub-Limit" - $4,000,000, as such amount may be
reduced from time to time in accordance with the provisions of the Agreement.
"Canadian Term Loan" - the loan made by the Canadian Lender pursuant to
Section 1.3.2 of the Agreement.
"Capital Expenditures" - expenditures made or liabilities incurred for the
acquisition of any fixed assets or improvements, replacements, substitutions or
additions thereto which have a useful life of more than one year, including the
total principal portion of Capitalized Lease Obligations.
"Capitalized Lease Obligation" - any Indebtedness represented by
obligations under a lease that is required to be capitalized for financial
reporting purposes in accordance with GAAP.
"CERCLA" - as defined in the definition of "Environmental Laws".
"CGI" - as defined in the preamble to the Agreement.
"Closing Date" - the date on which all of the conditions precedent in
Section 9 of the Agreement are satisfied and the initial Loans are made or the
initial Letters of Credit or LC Guaranties are issued under the Agreement.
"Closing Date Lenders" - Fleet, Fleet Canada, Fifth Third Bank, Key Bank
and La Salle Bank, N.A.
"Code" - the Internal Revenue Code of 1986, as amended, and regulations
promulgated thereunder.
"Collateral" - collectively, the Canadian Collateral and the Domestic
Collateral.
"Computer Hardware and Software" - all of Borrowers' rights (including
rights as licensee and lessee) with respect to (a) computer and other electronic
data
A-8
processing hardware, including all integrated computer systems, central
processing units, memory units, display terminals, printers, computer elements,
card readers, tape drives, hard and soft disk drives, cables, electrical supply
hardware, generators, power equalizers, accessories, peripheral devices and
other related computer hardware; (b) all Software and all software programs
designed for use on the computers and electronic data processing hardware
described in clause (a) above, including all operating system software,
utilities and application programs in any form (source code and object code in
magnetic tape, disk or hard copy format or any other listings whatsoever); (c)
any firmware associated with any of the foregoing; and (d) any documentation for
hardware, Software and firmware described in clauses (a), (b) and (c) above,
including flow charts, logic diagrams, manuals, specifications, training
materials, charts and pseudo codes.
"Consolidated" - the consolidation in accordance with GAAP of the accounts
or other items as to which such term applies.
"Contract Right" - any right of Borrowers to payment under a contract for
the sale or lease of goods or the rendering of services, which right is at the
time not yet earned by performance.
"CTSI" - as defined in the preamble to the Agreement.
"Current Assets" - at any date means the amount at which all of the current
assets of a Person would be properly classified as current assets shown on a
balance sheet at such date in accordance with GAAP.
"Default" - an event or condition the occurrence of which would, with the
lapse of time or the giving of notice, or both, become an Event of Default.
"Default Rate" - as defined in Section 2.1.2 of the Agreement.
"Derivative Obligations" - every obligation of a Person under any forward
contract, futures contract, swap, option or other financing agreement or
arrangement (including, without limitation, caps, floors, collars and similar
agreements), the value of which is dependent upon interest rates, currency
exchange rates, commodities or other indices.
"Distribution" - in respect of any Person means and includes: (a) the
payment of any dividends or other distributions on Securities (except
distributions in such Securities) and (b) the redemption or acquisition of
Securities of such Person, as the case may be, unless made contemporaneously
from the net proceeds of the sale of Securities.
"Dollars", "dollar", "U.S. Dollar", "U.S. dollar" and "$" - each, lawful
currency of the United States.
A-9
"Dollar Equivalent" - at any time (a) as to any amount denominated in U.S.
Dollars, the amount thereof at such time and (b) as to any amount denominated in
Canadian Dollars, the equivalent amount in U.S. Dollars determined by the
Administrative Agent at such time on the basis of the spot rate for the purchase
by Canadian Agent of such Canadian Dollars with U.S. Dollars through a foreign
exchange trading office selected by Canadian Agent or such other rate which
Canadian Agent may select based on reasonable commercial practices.
"Domestic Borrowers" - as defined in the preamble to the Agreement.
"Domestic Borrower Guaranty" - the continuing guaranty agreement executed
by the Domestic Borrowers, in form and substance satisfactory to Administrative
Agent.
"Domestic Borrowing Base" - as at any date of determination thereof, an
amount equal to (without duplication) 85% of the net amount of Eligible Accounts
of the Domestic Borrowers, provided that in no event shall the aggregate
outstanding advances made on the basis of Eligible Multinational Mexican
Accounts, Eligible Non-Multinational Mexican Accounts or Eligible Logistics
Accounts at any time exceed the following applicable dollar limitations:
(i) Eligible Multinational
Mexican Accounts - $5,000,000;
(ii) Eligible Non-
Multinational Mexican
Accounts - $1,000,000; and
(iii) Eligible Logistics
Accounts - $2,000,000.
The limitations set forth in the immediately preceding sentence and the
advance rate set forth above may be adjusted downward by Administrative Agent as
Administrative Agent shall deem necessary or appropriate in its reasonable
credit judgment. For purposes hereof, the net amount of Eligible Accounts at any
time shall be the face amount of such Eligible Accounts less any and all
returns, rebates, discounts (which may, at Administrative Agent's option, be
calculated on shortest terms), credits, allowances or excise taxes of any nature
at any time issued, owing, claimed by Account Debtors, granted, outstanding or
payable in connection with such Accounts at such time.
"Domestic Collateral" - all of the Property and interests in Property of
Domestic Borrowers described in Section 5 of the Agreement, and all other
Property and interests in Property of Domestic Borrowers or any Subsidiary of
CGI (other than
A-10
Canadian Borrower) that now or hereafter secures the payment and performance of
any of the Obligations.
"Domestic Lender" - as defined in Section 1.1.1 of the Agreement.
"Domestic Loan Account" - as defined in Section 3.6 of the Agreement.
"Domestic Obligations" - all Loans made by any Domestic Lender, all LC
Obligations, LC Amount and all other advances, debts, liabilities, obligations,
covenants and duties, together with all interest (including, without limitation,
whether accruing prior to or subsequent to the commencement of a bankruptcy or
similar proceeding with any Domestic Borrower as a debtor thereof and whether or
not such interest is an allowed claim in any such proceeding), fees and other
charges thereon, owing, arising, due or payable from Domestic Borrowers to
Administrative Agent or Canadian Agent, for its own benefit and the benefit of
the Lenders, or from Domestic Borrowers to Bank or to any other affiliate of
Fleet, of any kind or nature, present or future, whether or not evidenced by any
note, guaranty or other instrument, whether arising under the Agreement or any
of the other Loan Documents or otherwise, whether direct or indirect (including
those acquired by assignment), absolute or contingent, primary or secondary, due
or to become due, now existing or hereafter arising and however acquired,
including without limitation any Derivative Obligations owing by Domestic
Borrowers to Administrative Agent, Canadian Agent, any Lender or Bank.
"Domestic Revolving Credit Commitment" - as to any Lender, the obligation
of such Lender to make Domestic Revolving Credit Loans and Domestic Term Loans
to the Domestic Borrowers hereunder and to participate in Letters of Credit
issued for the account of Domestic Borrowers and to refund Canadian Revolving
Credit Loans and the Canadian Term Loan, subject in each case to the limitations
provided herein and the other terms hereof, in an aggregate principal amount at
any one time outstanding not to exceed the amount set forth below such Lender's
name on Exhibit 1.1 hereto under the heading "Domestic Revolving Credit
Commitment", as such amount may be reduced from time to time in accordance with
the provisions of this Agreement. The Domestic Revolving Credit Commitments of
all the Lenders shall not exceed $55,000,000, as such amount may be reduced from
time to time in accordance with the provisions of this Agreement.
"Domestic Revolving Credit Exposure" - at any date, (a) as to all Domestic
Lenders, the amount equal to the sum of the aggregate principal amount of all
Domestic Revolving Credit Loans, the LC Amount and all LC Obligations then
outstanding, and (b) as to any Domestic Lender, the amount equal to the sum of
(i) the aggregate principal amount of all then outstanding Domestic Revolving
Credit Loans made by such Domestic Lender, and (ii) such Domestic Lender's
Domestic Revolving Loan Percentage of the LC Amount and the then outstanding LC
Obligations.
A-11
"Domestic Revolving Credit Loan" - as defined in Section 1.1.1 of the
Agreement.
"Domestic Revolving Loan Percentage" - with respect to each Domestic
Lender, the percentage equal to the quotient of such Domestic Lender's Domestic
Revolving Credit Commitment divided by the aggregate of all Domestic Revolving
Credit Commitments.
"Domestic Subsidiary" - a Subsidiary of a Borrower that is not a Foreign
Subsidiary or a Borrower.
"Domestic Term Loan" - as defined in Section 1.3.1 of the Agreement.
"Domestic Term Loan Commitment" - with respect to any Domestic Lender, the
amount of such Domestic Lender's commitment under the Domestic Term Loan
subfacility of the Domestic Revolving Credit Loan facility to make a term loan
to CGI pursuant to Section 1.3.1 of the Agreement, as set forth below such
Domestic Lender's name on Exhibit 1.1 hereto under the heading "Domestic Term
Loan Commitment".
"Dominion Account" - a special bank account or accounts of Administrative
Agent or Canadian Agent, as the case may be, established by Borrowers and their
Subsidiaries pursuant to Section 6.2.4 of the Agreement at a bank or banks
selected by Borrowers and their Subsidiaries, but acceptable to Administrative
Agent or Canadian Agent, as the case may be, in its reasonable discretion, and
over which Administrative Agent or Canadian Agent, as the case may be, shall
have sole and exclusive access and control for withdrawal purposes.
"EBITDA" - for any period, without duplication, the Consolidated net income
(or loss) of Borrowers, plus (a) Borrowers' Consolidated interest expense for
that period, including without limitation any rent payable with respect to
Capitalized Lease Obligations which should, in accordance with GAAP, be treated
as interest expense, to the extent paid during that period in cash, plus (b) the
aggregate amount of federal, state and provincial income taxes on or measured by
such Consolidated net income to the extent paid or accrued for that period, plus
(c) the Consolidated depreciation and amortization expense of Borrowers for that
period, plus (d) the Consolidated non-cash expenses of Borrowers for that
period, minus (e) any non-cash income for that period, in each case determined
in accordance with GAAP, consistently applied.
"Eligible Account" - an Account of an Account Creditor arising in the
ordinary course of the business of the applicable Account Creditor from the sale
of goods or rendition of services which Administrative Agent, in its reasonable
credit
A-12
judgment, deems to be an Eligible Account. Without limiting the generality of
the foregoing, no Account shall be an Eligible Account if:
(a) it arises out of a sale made or services rendered by the
applicable Account Creditor to a Subsidiary of any Borrower or an Affiliate
of any Borrower or to a Person controlled by an Affiliate of any Borrower;
or
(b) it remains unpaid more than 90 days after the original invoice
date; or
(c) it is owed by an Account Debtor with respect to which the total
unpaid Accounts of such Account Debtor exceed 20% of the net amount of all
Eligible Accounts, but only to the extent of such excess; or
(d) any covenant, representation or warranty contained in the
Agreement with respect to such Account has been breached; or
(e) the Account Debtor is also a creditor or supplier of the
applicable Account Creditor or any Subsidiary of the applicable Account
Creditor, or the Account Debtor has disputed liability with respect to such
Account, or the Account Debtor has made any claim with respect to any other
Account due from such Account Debtor to the applicable Account Creditor or
any Subsidiary of the applicable Account Creditor, or the Account otherwise
is or may become subject to right of setoff by the Account Debtor,
provided, that any such Account shall be eligible to the extent such amount
thereof exceeds such contract, dispute, claim, setoff or similar right; or
(f) the Account Debtor has commenced a voluntary case under the
federal bankruptcy laws, as now constituted or hereafter amended, or made
an assignment for the benefit of creditors, or a decree or order for relief
has been entered by a court having jurisdiction in the premises in respect
of the Account Debtor in an involuntary case under the federal bankruptcy
laws, as now constituted or hereafter amended, or any other petition or
other application for relief under the federal bankruptcy laws, as now
constituted or hereafter amended, has been filed against the Account
Debtor, or if the Account Debtor has failed, suspended business, ceased to
be Solvent, or consented to or suffered a receiver, trustee, liquidator or
custodian to be appointed for it or for all or a significant portion of its
assets or affairs; or
(g) (i) in the case of Domestic Borrowers, it arises from a sale made
or services rendered to an Account Debtor outside the United States of
America, unless the sale is either (A)(I) to an Account Debtor located in
Ontario or any other province of Canada in which the PPSA has been adopted
in substantially the same form or with the same effect as currently in
effect in
A-13
Ontario or (II) on letter of credit, guaranty or acceptance terms, in each
case acceptable to Administrative Agent in its reasonable credit judgment
or (B) the Account is an Eligible Multinational Mexican Account or an
Eligible Non-Multinational Mexican Account, and (ii) in the case of
Canadian Borrower, it arises from a sale made or services rendered to an
Account Debtor outside Canada, unless the sale is either (A) to an Account
Debtor located in the United States of America, or (B) on letter of credit,
guaranty or acceptance terms, in each case acceptable to the Administrative
Agent and the Canadian Agent in their reasonable credit judgment; or
(h) (i) it arises from a sale to the Account Debtor on a bill-and-hold
or consignment basis; or (ii) it is subject to a reserve established by the
applicable Account Creditor or any of its Subsidiaries for potential
returns or refunds, to the extent of such reserve; or
(i) the Account Debtor is the United States of America or Her Majesty
the Queen in right of Canada or any department, agency or instrumentality
thereof, unless the applicable Account Creditor assigns its right to
payment of such Account to Administrative Agent, in a manner satisfactory
to Administrative Agent, in its reasonable credit judgment, so as to comply
with the Assignment of Claims Act of 1940 (31 U.S.C.ss.203 et seq., as
amended) or the Financial Administration Act (Canada) as applicable; or
(j) it is not at all times subject to Administrative Agent's or
Canadian Agent's, as the case may be, duly perfected, first priority
security interest and to no other Lien that is not a Permitted Lien; or
(k) the goods giving rise to such Account have not been delivered to
and accepted by the Account Debtor or the services giving rise to such
Account have not been performed by the applicable Account Creditor and
accepted by the Account Debtor or the Account otherwise does not represent
a final sale; or
(l) the Account is evidenced by chattel paper or an instrument of any
kind, or has been reduced to judgment; or
(m) the applicable Account Creditor or a Subsidiary of the applicable
Account Creditor has made any agreement with the Account Debtor for any
deduction therefrom, except for discounts or allowances which are made in
the ordinary course of business for prompt payment and which discounts or
allowances are reflected in the calculation of the face value of each
invoice related to such Account; or
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(n) more than 25% of the Accounts owing from the Account Debtor are
not Eligible Accounts hereunder; or
(o) the applicable Account Creditor has not issued an invoice to the
Account Debtor unless such Account is otherwise deemed eligible for
advances because it is an Eligible Unbilled Account.
"Eligible Logistics Account" - an Eligible Account of a Domestic Borrower
arising from logistics services provided by such Domestic Borrower related to
drayage and warehousing.
"Eligible Multinational Mexican Accounts" - an Eligible Account of a
Domestic Borrower payable in U.S. Dollars by wire transfer or otherwise of
immediately available funds owed to such Domestic Borrower by an Account Debtor
located in Mexico and which Account Debtor is a "multi-national" entity approved
in writing by the Administrative Agent.
"Eligible Non-Multinational Mexican Account" - an Eligible Account of a
Domestic Borrower payable in U.S. Dollars by wire transfer or otherwise of
immediately available funds owed to such Domestic Borrower by an Account Debtor
located in Mexico and which Account Debtor is not a "multi-national" entity, and
which has been approved in writing by the Administrative Agent as an "Eligible
Non-Multinational Mexican Account".
"Eligible Unbilled Account" - an Eligible Account of a Domestic Borrower or
Canadian Borrower with respect to which the Account Creditor has not issued an
invoice to the Account Debtor, and which remains owing less than 60 days (or,
for periods after 120 days after the Closing Date, less than 30 days) after the
earlier of (a) the date such Eligible Account is recognized by the applicable
Account Creditor and (b) the date such Eligible Account is reported to the
Administrative Agent. In no event shall the aggregate outstanding advances made
on the basis of Eligible Unbilled Accounts (including both Domestic Revolving
Credit Loans and Canadian Revolving Credit Loans made on the basis of Eligible
Unbilled Accounts) exceed $8,000,000 at any time during the first 120 days of
the Term or $7,000,000 at any time thereafter.
"Environmental Claim" - any written accusation, allegation, notice of
violation, claim, demand, order, directive, cost recovery action or other cause
of action by, or on behalf of, any governmental authority or any Person for
damages, injunctive or equitable relief, personal injury (including sickness,
disease or death), remedial action costs, tangible or intangible property
damage, natural resource damages, nuisance relating to Hazardous Material,
pollution, any adverse effect on the environment caused by any Hazardous
Material, or fines, penalties or restrictions, resulting from or based upon: (a)
the existence, or the continuation of the existence, of
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a Release (including sudden or non-sudden, accidental or non-accidental
Releases); (b) exposure to any Hazardous Material; (c) the presence, use,
handling, transportation, storage, treatment or disposal of any Hazardous
Material; or (d) the violation or alleged violation of any Environmental Law or
Environmental Permit.
"Environmental Laws" - all applicable federal, provincial, state, municipal
or local laws, statutes, common law duties, rules, regulations, ordinances and
codes, together with all administrative orders, directed duties, requests,
licenses, authorizations and permits of, and agreements with, any governmental
authorities, in each case relating to environmental, health, safety and land use
matters, including without limitation, the Comprehensive Environmental Response,
Compensation and Liability Act of 1980 ("CERCLA"), the Clean Air Act, the
Federal Water Pollution Control Act of 1972, the Solid Waste Disposal Act, the
Federal Resource Conservation and Recovery Act, the Toxic Substances Control
Act, and, to the extent legally enforceable, the Emergency Planning and
Community Right-to-Know Act, the Environmental Protection Act (Ontario) or any
other act, rule, guideline or policy of Canada or any jurisdiction thereof
having the force of law.
"Environmental Permit" - any applicable permit, approval, authorization,
certificate, license, variance, filing or permission required by or from any
governmental authority pursuant to any Environmental Law.
"ERISA" - the Employee Retirement Income Security Act of 1974, as amended,
and all rules and regulations from time to time promulgated thereunder.
"ERISA Affiliate" - any trade or business (whether or not incorporated)
that, together with a Domestic Borrower, is treated as a single employer under
Section 414(b) or (c) of the Code, or, solely for purposes of Section 302 of
ERISA and Section 412 of the Code, is treated as a single employer under Section
414 of the Code.
"Event of Default" - as defined in Section 10.1 of the Agreement.
"Excess Cash Flow" - with respect to any fiscal year of CGI, commencing
with the fiscal year ending June 30, 2003, 50% of the amount equal to the sum of
net income plus depreciation, amortization and other non-cash charges deducted
in determining net income minus the sum of regularly scheduled payments of
principal on Indebtedness for Money Borrowed and Capital Expenditures which are
not financed for such fiscal year, determined in each case with respect to CGI
and its Subsidiaries on a Consolidated basis.
"Exempt Foreign Subsidiary" - as of any date of determination, a Foreign
Subsidiary which the Majority Lenders have agreed, in writing, prior to such
date, to exempt from the requirements of executing and delivering a Guaranty
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Agreement and a Guaranty Security Agreement and from the requirement that 100%
of the outstanding equity of such Subsidiary be pledged to the Administrative
Agent. As of the Closing Date, Canadian Borrower and Mexican Subsidiaries are
the sole Exempt Foreign Subsidiaries.
"Fee Letter" - as defined in Section 2.3 of the Agreement.
"Fixed Charge Coverage Ratio" - as of the last day of any fiscal quarter of
CGI, and for the fiscal period consisting of the consecutive four (4) fiscal
quarters of CGI ending on such day, the ratio of (a)(i) EBITDA for such fiscal
period, minus (ii) Consolidated payments made in cash with respect to tax
expense of CGI for such fiscal period, minus (iii) Consolidated unfinanced
Capital Expenditures of CGI for such fiscal period to (b) Consolidated Fixed
Charges of CGI for such fiscal period.
"Fixed Charges" - for any period, with respect to any Person, the sum of
cash interest payments, scheduled principal payments and scheduled payments with
respect to Capitalized Lease Obligations, in each case made during such period.
"Fleet" - as defined in the preamble to the Agreement, or its successor.
"Fleet Canada" - as defined in the preamble to the Agreement, or its
successor.
"Fleet Canada Margin" - the cost determined from time to time by Fleet
Canada as its cost of funds, which as of the Closing Date is 0.25% and which is
subject to change from time to time after the Closing Date without notice.
"Foothill" - as defined in Section 9.13 of the Agreement.
"Foothill Note" - the Term Promissory Note, dated March 18, 2002, in the
original principal amount of $7,500,000, executed by CTSI in favor of Foothill,
evidencing CTSI's obligation to pay the purchase price to Foothill for certain
Equipment purchased by CTSI from Foothill under the Purchase and Sale Agreement,
dated as of March 18, 2002, by and between CTSI and Foothill.
"Foothill Note Collateral" - the personal property of CTSI securing the
payment of the obligations of CTSI to Foothill evidenced by the Foothill Note
pursuant to the Security Agreement, dated March 18, 2002, by and between CTSI
and Foothill.
"Foreign Subsidiary" - a Subsidiary of a Borrower that (a) is organized
under the laws of a country (or political subdivision thereof) other than the
United States of America and (b) holds all or substantially all of its assets
outside the United States of America.
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"Further Taxes" - any and all present or future taxes, levies, assessments,
imposts, duties, deductions, fees, withholdings or similar charges (including
net income taxes and franchise taxes), and all liabilities with respect thereto,
imposed by any jurisdiction on account of amounts payable or paid pursuant to
Section 2.13 of the Agreement.
"GAAP" - generally accepted accounting principles in the United States of
America in effect from time to time.
"Guarantors" - Each Domestic Borrower, each Subsidiary Guarantor, and each
other Person who now or hereafter guarantees payment or performance of the whole
or any part of the Obligations.
"Guaranty Agreements" - the Domestic Borrower Guaranty, the Subsidiary
Guaranties, and any other guaranty hereafter executed by any Guarantor.
"Guaranty Security Agreements" - the respective security agreements
executed by each of the Subsidiary Guarantors, in form and substance
satisfactory to Administrative Agent and Canadian Agent, in favor of the
Administrative Agent, as collateral security for the payment and performance of
the obligations of the Subsidiary Guarantors to Administrative Agent and the
Domestic Lenders under the Subsidiary Guaranty (Domestic Borrower), and in favor
of Canadian Agent, as collateral security for the payment and performance of the
obligations of the Subsidiary Guarantors to Canadian Agent and Canadian Lender
under the Subsidiary Guaranty (Canadian Borrower).
"Hazardous Materials" - all explosive or radioactive substances or wastes,
hazardous or toxic substances or wastes, pollutants, solid, liquid or gaseous
wastes, including petroleum or petroleum distillates, friable asbestos or
asbestos-containing materials, polychlorinated biphenyls ("PCBs") or
PCB-containing materials or equipment, radon gas, infectious or medical wastes
regulated pursuant to any Environmental Law and all other substances or wastes
of any nature regulated pursuant to any Environmental Law.
"Indebtedness" - as applied to a Person means, without duplication:
(a) all items which in accordance with GAAP would be included in
determining total liabilities as shown on the liability side of a
balance sheet of such Person as at the date as of which Indebtedness
is to be determined, including, without limitation, Capitalized Lease
Obligations;
(b) all obligations of other Persons which such Person has
guaranteed;
A-18
(c) all reimbursement obligations in connection with letters of
credit or letter of credit guaranties issued for the account of such
Person;
(d) Derivative Obligations; and
(e) in the case of Borrowers (without duplication), the
applicable Obligations.
"ING Indebtedness" - the Indebtedness payable by CGI and CTSI to the
lenders party to the credit facility provided to CGI and CTSI with respect to
which ING (U.S.) Capital LLC is the administrative agent, as further identified
on Exhibit 1.1.3 hereto.
"Insolvency Laws of Canada" - each of the Bankruptcy and Insolvency Act
(Canada) and the Companies Creditors' Arrangement Act (Canada), each as now and
hereafter in effect, any successors to such statutes and any other applicable
insolvency or other similar law of any Canadian jurisdiction including, without
limitation, any law of any Canadian jurisdiction permitting a debtor to obtain a
stay or a compromise of the claims of its creditors against it.
"Intellectual Property" - all past, present and future: trade secrets,
know-how and other proprietary information; trademarks, internet domain names,
service marks, trade dress, trade names, business names, designs, logos, slogans
(and all translations, adaptations, derivations and combinations of the
foregoing) indicia and other source and/or business identifiers, and the
goodwill of the business relating thereto and all registrations or applications
for registrations which have heretofore been or may hereafter be issued thereon
throughout the world; copyrights (including copyrights for computer programs)
and copyright registrations or applications for registrations which have
heretofore been or may hereafter be issued throughout the world and all tangible
property embodying the copyrights; unpatented inventions (whether or not
patentable); patent applications and patents; industrial design applications and
registered industrial designs; license agreements related to any of the
foregoing and income therefrom; books, records, writings, computer tapes or
disks, flow diagrams, specification sheets, computer software, source codes,
object codes, executable code, data, databases and other physical
manifestations, embodiments or incorporations of any of the foregoing; the right
to sue for all past, present and future infringements of any of the foregoing;
all other intellectual property; and all common law and other rights throughout
the world in and to all of the foregoing.
"Interest Payment Date" - as to any Canadian Fixed Rate Loan, Base Rate
Loan, LIBOR Loan, or Canadian Base Rate Loan, the first calendar day of each
month (for the immediately preceding month), computed through the last calendar
day of the preceding month.
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"Interest Period" - as applicable to any LIBOR Loan or Canadian Fixed Rate
Loan, a period commencing on the date such LIBOR Loan or Canadian Fixed Rate
Loan is made, continued or converted, and ending on the date which is one (1)
month, two (2) months, three (3) months, or six (6) months later (or 30, 60, 90
or 180 days later, in the case of Canadian Fixed Rate Loans which are Canadian
BA Rate Loans), as may then be requested by Borrower Representative; provided
that (a) any Interest Period which would otherwise end on a day which is not a
Business Day shall end in the next preceding or succeeding Business Day as is
Administrative Agent's or Canadian Agent's custom in the market to which such
LIBOR Loan or Canadian Fixed Rate Loan relates; (b) there remains a minimum of
one (1) month, two (2) months, three (3) months or six (6) months (depending
upon which Interest Period Borrower Representative selects) in the Term; and (c)
all Interest Periods of the same duration which commence on the same date shall
end on the same date.
"Judgment Currency" - as defined in Section 12.15 of the Agreement.
"Judgments" - as defined in Section 10.1.15 of the Agreement.
"LC Amount" - at any time, the aggregate undrawn available amount of all
Letters of Credit and LC Guaranties then outstanding.
"LC Guaranty" - any guaranty pursuant to which Administrative Agent or any
Affiliate of Administrative Agent shall guaranty the payment or performance by
any Domestic Borrower of its reimbursement obligation under any Letter of
Credit.
"LC Margin" - the Applicable Margin then in effect for LIBOR Loans which
are Domestic Revolving Credit Loans per annum.
"LC Obligations" - any Obligations that arise from any draw against any
Letter of Credit or against any Letter of Credit supported by an LC Guaranty.
"Legal Requirement" - any requirement imposed upon Administrative Agent,
Canadian Agent or any Lender by any law of the United States of America or
Canada or the United Kingdom or by any regulation, order, interpretation, ruling
or official directive (whether or not having the force of law) of the Federal
Reserve Board, the Bank of Canada, the Bank of England or any other board,
central bank or governmental or administrative agency, institution or authority
of the United States of America, Canada, the United Kingdom or any political
subdivision of either thereof.
"Lender" -as defined in the preamble to the Agreement.
"Letter of Credit" - any standby letter of credit issued by Administrative
Agent, Bank or any Affiliate of Administrative Agent or Bank for the account of
any Domestic Borrower.
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"LIBOR" - as applicable to any LIBOR Loan, the rate per annum (rounded
upward, if necessary, to the nearest 1/32 of one percent) as determined on the
basis of the offered rates for deposits in U.S. dollars for a period of time
comparable to such LIBOR Loan which appears on the Telerate page 3750 as of
11:00 a.m. (London Time) on the date that is two (2) London Banking Days
preceding the first day of such LIBOR Loan; provided, however, if the rate
described above does not appear on the Telerate System on any applicable
interest determination date, the LIBOR rate shall be the rate (rounded upwards
as described above, if necessary) for deposits in U.S. dollars for a period
substantially equal to the interest period on the Reuters Page "LIBO" (or such
other page as may replace the LIBO Page on that service for the purpose of
displaying such rates), as of 11:00 a.m. (London Time), on the day that is two
(2) London Banking Days prior to the beginning of such interest period. If both
the Telerate and Reuters systems are unavailable, then the rate for that date
will be determined on the basis of the offered rates for deposits in U.S.
dollars for a period of time comparable to such LIBOR Loan which are offered by
four (4) major banks in the London interbank market at approximately 11:00 a.m.
(London time), on the day that is two (2) London Banking Days preceding the
first day of such LIBOR as selected by Administrative Agent. The principal
London office of each of the major London Banks so selected will be requested to
provide a quotation of its U.S. dollar deposit offered rate. If at least two (2)
such quotations are provided, the rate for that date will be the arithmetic mean
of the quotations. If fewer than two quotations are provided as requested, the
rate for that date will be determined on the basis of the rates quoted for loans
in U.S. dollars to leading European banks for a period of time comparable to
such LIBOR Loan offered by major banks in New York City at approximately 11:00
a.m. (New York City time), o n the date that is two (2) London Banking Days
preceding the first day of such LIBOR Loan. In the event that Administrative
Agent is unable to obtain any such quotation as provided above, it will be
determined that LIBOR pursuant to a LIBOR Loan cannot be determined. In the
event that the Board of Governors of the Federal Reserve System shall impose a
Reserve Percentage with respect to LIBOR deposits of Bank then for any period
during which such Reserve Percentage shall apply, LIBOR shall be equal to the
amount determined above divided by an amount equal to 1 minus the Reserve
Percentage.
"LIBOR Loan" - any Loan made hereunder to a Domestic Borrower bearing
interest computed by reference to the LIBOR, including, without limitation, that
portion of the outstanding principal amount of the Domestic Term Loans bearing
interest with reference to the LIBOR.
"Lien" - any interest in Property securing an obligation owed to, or a
claim by, a Person other than the owner of the Property, whether such interest
is based on common law, statute or contract. The term "Lien" shall also include
hypotheses, rights of sellers under conditional sales contracts or title
retention agreements,
A-21
reservations, exceptions, encroachments, easements, rights-of-way, covenants,
conditions, restrictions, leases and other title exceptions and encumbrances
affecting Property. For the purpose of the Agreement, Borrowers (and their
applicable Subsidiaries) shall be deemed to be the owner of any Property which
they have acquired or hold subject to a conditional sale agreement or other
arrangement pursuant to which title to the Property has been retained by or
vested in some other Person for security purposes.
"Loan Account" - as defined in Section 3.6 of the Agreement.
"Loan Documents" - the Agreement, the Other Agreements and the Security
Documents.
"Loans" - all loans and advances of any kind made by Administrative Agent,
Canadian Agent or any Lender (or by any affiliate of Fleet) pursuant to the
Agreement.
"London Banking Day" - any date on which commercial banks are open for
business in London, England.
"Majority Lenders" - as of any date, Domestic Lenders holding 51% of the
aggregate Domestic Revolving Credit Commitments and following the termination of
the Domestic Revolving Credit Commitments, Domestic Lenders holding 51% or more
of the outstanding Loans (including as Canadian Participating Lenders, whether
or not a refunding has occurred), LC Amounts and LC Obligations not yet
reimbursed by Domestic Borrowers or funded with a Domestic Revolving Credit
Loan, provided, that (a) in each case, if there are 2 or more Lenders with
outstanding Loans, a portion of the LC Amount, unfounded and unreimbursed LC
Obligations or Domestic Revolving Credit Commitments, at least 2 Lenders shall
be required to constitute Majority Lenders; and (b) prior to termination of the
Domestic Revolving Credit Commitments, if any Domestic Lender breaches its
obligation to fund any requested Revolving Credit Loan, for so long as such
breach exists, its voting rights hereunder shall be calculated with reference to
its outstanding Loans, portion of the LC Amount and unfounded and unreimbursed
LC Obligations, rather than its Domestic Revolving Credit Commitment.
"Material Adverse Effect" - (a) a material adverse effect on the business,
condition (financial or otherwise), operation, performance or properties of
Borrowers and their Subsidiaries taken as a whole, (b) a material adverse effect
on the rights and remedies of Administrative Agent, Canadian Agent or Lenders
under the Loan Documents, or (c) the material impairment of the ability of
Borrowers or any of their Subsidiaries to perform their obligations hereunder or
under any other Loan Document.
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"Maximum Rate" - as defined in Section 2.1.3(a) of the Agreement.
"Mexican Subsidiaries" - collectively, the following Subsidiaries of CGI:
(a) Servicios de Transportacion Jaguar, S.A. de C.V., a Mexican corporation, (b)
Celadon Mexicana S.A. de C.V., a Mexican corporation, and (c) Leasing Servisio
S.A. de C.V., a Mexican corporation.
"Money Borrowed" - means, without duplication, (a) Indebtedness arising
from the lending of money by any Person to any Borrower or any of its
Subsidiaries; (b) Indebtedness, whether or not in any such case arising from the
lending by any Person of money to any Borrower or any of its Subsidiaries, (i)
which is represented by notes payable or drafts accepted that evidence
extensions of credit, (ii) which constitutes obligations evidenced by bonds,
debentures, notes or similar instruments, or (iii) upon which interest charges
are customarily paid (other than accounts payable) or that was issued or assumed
as full or partial payment for Property; (c) Indebtedness that constitutes a
Capitalized Lease Obligation; (d) reimbursement obligations with respect to
letters of credit or guaranties of letters of credit and (e) Indebtedness of any
Borrower or any of its Subsidiaries under any guaranty of obligations that would
constitute Indebtedness for Money Borrowed under clauses (a) through (c) hereof,
if owed directly by such Borrower or any of its Subsidiaries. Money Borrowed
shall not include trade payables or accrued expenses.
"Mortgages" - All mortgages, deeds of trust and comparable documents now or
at any time hereafter securing the whole or any part of the Obligations.
"Multiemployer Plan" - has the meaning set forth in Section 4001(a)(3) of
ERISA.
"Non-Excluded Taxes" - as defined in Section 2.13.1 of the Agreement.
"Notes" - the Revolving Notes and the Term Notes.
"Notice of Canadian Revolving Loan Refunding" - as defined in Section 3.2.6
of the Agreement.
"Notice of Canadian Term Loan Refunding" - as defined in Section 3.2.6 of
the Agreement.
"Obligations" - the Canadian Obligations and the Domestic Obligations,
collectively.
"Organizational I.D. Number" - with respect to any Borrower or any
Subsidiary of any Borrower, the organizational identification number assigned to
such Borrower or such Subsidiary by the applicable governmental unit or agency
of the jurisdiction of organization of such Borrower or such Subsidiary.
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"Other Agreements" - any and all agreements, instruments and documents
(other than the Agreement and the Security Documents), heretofore, now or
hereafter executed by any Borrower, any Subsidiary of any Borrower or any other
third party and delivered to Administrative Agent, Canadian Agent or any Lender
in respect of the transactions contemplated by the Agreement, in each case
either as originally executed or as the same may from time to time be
supplemented, modified, amended, restated, extended or supplanted.
"Owned Properties" - as defined in Section 7.1.26(a) of the Agreement.
"Participant" - as defined in Section 11.9.2 of the Agreement.
"PBGC" - the Pension Benefit Guaranty Corporation referred to and defined
in ERISA.
"PCBs" - as defined in the definition of "Hazardous Materials".
"Permitted Intercompany Loans" - intercompany loans and advances made by
any Domestic Borrower to any of the Mexican Subsidiaries, provided that (a) such
Domestic Borrower shall record all intercompany loans on its books and records
in a manner satisfactory to Administrative Agent, (b) the obligations of any
Domestic Borrower under any such intercompany loan shall be subordinated to the
Obligations of Domestic Borrowers hereunder in a manner reasonably satisfactory
to Administrative Agent, (c) at the time any such intercompany loan is made by
such Domestic Borrower and after giving effect thereto, such Domestic Borrower
shall be Solvent, and (d) no Default of Event of Default would occur and be
continuing after giving effect to any such proposed intercompany loan.
"Permitted Liens" - any Lien of a kind specified in Section 8.2.5 of the
Agreement.
"Permitted Purchase Money Indebtedness" - Purchase Money Indebtedness of
Borrowers incurred after the date hereof which is secured by a Purchase Money
Lien and the principal amount of which, when aggregated with the principal
amount of all other such Indebtedness and Capitalized Lease Obligations of
Borrowers and their Subsidiaries at the time outstanding, does not exceed
$60,000,000. For the purposes of this definition, the principal amount of any
Purchase Money Indebtedness consisting of capitalized leases (as opposed to
operating leases) shall be computed as a Capitalized Lease Obligation.
"Person" - an individual, partnership, corporation, limited liability
company, joint stock company, land trust, business trust, or unincorporated
organization, or a government or agency or political subdivision thereof.
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"Plan" - in the case of a Domestic Borrower or a Domestic Subsidiary, an
employee benefit plan (as defined in Section 3(3) of ERISA) subject to ERISA
which any Borrower or any ERISA Affiliate sponsors or maintains or to which any
Borrower or any ERISA Affiliate makes, is making, or is obligated to make
contributions or otherwise has any liability.
"PPSA" - the Personal Property Security Act (Ontario) as in effect from
time to time.
"Prior Claims" - all Liens created by applicable law (in contrast with
Liens voluntarily granted) which rank or are capable of ranking prior or
paripassu with Canadian Agent's Lien (or the applicable equivalent of such
Liens) against all or part of the Canadian Collateral, including for amounts
owing for vacation pay, employee deductions and contributions, goods and
services taxes, sales taxes, realty taxes, business taxes, workers'
compensation, pension plan or fund obligations and overdue rents (to the extent,
in the case of rents, that such rents are not already the subject of a reserve).
"Projections" - Borrowers' forecasted Consolidated (a) balance sheets, (b)
profit and loss statements, and (c) cash flow statements, all prepared on a
consistent basis with the historical financial statements of Borrowers and their
Subsidiaries, together with appropriate supporting details and a statement of
underlying assumptions.
"Property" - any interest in any kind of property or asset, whether real,
personal or mixed, or tangible or intangible.
"Purchase Money Indebtedness" - means and includes (a) Indebtedness (other
than the Obligations) for the payment of all or any part of the purchase price
of any fixed assets, (b) any Indebtedness (other than the Obligations) incurred
at the time of or within 10 days prior to or after the acquisition of any fixed
assets for the purpose of financing all or any part of the purchase price
thereof, and (c) any renewals, extensions or refinancings thereof, but not any
increases in the principal amounts thereof outstanding at the time; provided,
however, in no event shall the term "Purchase Money Indebtedness" include
Indebtedness incurred by any Borrower for the purchase of parts on credit terms
not exceeding 60 days.
"Purchase Money Lien" - a Lien upon fixed assets which secures Purchase
Money Indebtedness, but only if such Lien shall at all times be confined solely
to the fixed assets the purchase price of which was financed through the
incurrence of the Purchase Money Indebtedness secured by such Lien.
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"Release" - any spilling, leaking, pumping, pouring, emitting, emptying,
discharging, injection, escaping, leaching, dumping, disposing, or depositing,
or threat thereof, of any Hazardous Material in, into, onto or through the
environment.
"Reportable Event" - any of the events set forth in Section 4043(b) of
ERISA.
"Reserve Percentage" - the maximum aggregate reserve requirement (including
all basic, supplemental, marginal and other reserves) which is imposed on member
banks of the Federal Reserve System against "Eurocurrency Liabilities" as
defined in Regulation D.
"Restricted Investment" - any investment made in cash or by delivery of
Property to any Person, whether by acquisition of stock, Indebtedness or other
obligation or Security, or by loan, advance or capital contribution, or
otherwise, or in any Property except the following:
(a) investments by any Borrower, to the extent existing on the
Closing Date, in one or more Subsidiaries of any Borrower;
(b) Property to be used in the ordinary course of business;
(c) Current Assets arising from the sale of goods and services in
the ordinary course of business of Borrowers or any of their
Subsidiaries;
(d) Permitted Intercompany Loans;
(e) investments existing on the date hereof and listed on Exhibit
8.2.14 hereto; and
(f) investments otherwise expressly permitted pursuant to the
Agreement.
"Restricted Subsidiary" - as of any date of determination, a Subsidiary of
CGI which (a) is inactive as of such date and has total assets of less than
$10,000 as of such date, determined in accordance with GAAP, or (b) is an Exempt
Foreign Subsidiary; provided, however, that (i) the term "Restricted Subsidiary"
shall not include Canadian Borrower, and (ii) Celadon CT&L, Inc.; CBW, Inc.;
International Freight Holding Corporation; JML Freight Forwarding, Inc.; RIL,
Inc.; Randy Express, Inc.; Celadon Jacky Maeder Co.; and Celadon Transportation,
L.L.P., which entities Borrowers are in the process of dissolving, shall in any
event be "Restricted Subsidiaries" hereunder; provided, however, if any entity
identified in this clause (ii) is not, in fact, dissolved after the Closing Date
and hereafter becomes active and acquires total assets of $10,000 or more, such
entity shall cease to be a Restricted Subsidiary.
A-26
"Revolving Credit Loans" - collectively, the Domestic Revolving Credit
Loans and Canadian Revolving Credit Loans made by any Lender pursuant to Section
1.1 of the Agreement.
"Revolving Credit Maximum Amount" - $55,000,000, as such amount may be
reduced from time to time pursuant to the terms of the Agreement.
"Revolving Notes" - the secured promissory notes to be executed by
Borrowers in favor of each Lender to evidence the Revolving Credit Loans, which
shall be in the form of Exhibit 1.2 to the Agreement, together with any
replacement or successor notes therefor.
"Security" - all shares of stock, partnership interests, membership
interests, membership units or other ownership interests in any other Person and
all warrants, options or other rights to acquire the same.
"Security Documents" - the Guaranty Agreements, the Guaranty Security
Agreements, the Mortgages and all other instruments and agreements now or at any
time hereafter securing the whole or any part of the Obligations, in each case
either as originally executed or as the same may from time to time be
supplemented, modified, amended, restated, extended or supplanted.
"Solvent" - as to any Person, such Person (a) owns Property whose fair
saleable value is greater than the amount required to pay all of such Person's
Indebtedness (including contingent debts discounted based on the likelihood of
their having to be paid), (b) is able to pay all of its Indebtedness as such
Indebtedness matures and (c) has capital sufficient to carry on its business and
transactions and all business and transactions in which it is about to engage.
"Subordinated Debt" - Indebtedness of any Borrower or any Subsidiary of any
Borrower that is subordinated to the Obligations in a manner satisfactory to
Administrative Agent and Canadian Agent, and contains terms, including without
limitation, payment terms, satisfactory to Administrative Agent and Canadian
Agent.
"Subsidiary" - any Person of which another Person owns, directly or
indirectly through one or more intermediaries, more than 50% of the Voting Stock
at the time of determination.
"Subsidiary Guarantor" - any Subsidiary of CGI which is neither a Borrower
nor a Restricted Subsidiary.
"Subsidiary Guaranties" - collectively, (i) the continuing guaranty of the
Domestic Obligations, in form and substance satisfactory to the Administrative
Agent, executed by each of the Subsidiary Guarantors in favor of the
Administrative Agent and the Domestic Lenders (the "Subsidiary Guaranty
(Domestic Borrower)") and
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(ii) the continuing guaranty of the Canadian Obligations, in form and substance
satisfactory to Canadian Agent, executed by each of the Subsidiary Guarantors in
favor of Canadian Agent and Canadian Lender (the "Subsidiary Guaranty (Canadian
Borrower)").
"TB2B" - as defined in the preamble to the Agreement.
"Term" - as defined in Section 4.1 of the Agreement.
"Term Loans" - the Canadian Term Loan and the Domestic Term Loan,
collectively.
"Term Notes" - the secured promissory notes to be executed by Borrowers in
favor of each applicable Lender to evidence the Term Loans, which shall be in
the form of Exhibit 1.3 to the Agreement, together with any replacement or
successor notes therefor.
"Transferee" - as defined in Section 2.13.1 of the Agreement.
"Type of Organization" - with respect to any Borrower or any Subsidiary of
any Borrower, the kind or type of entity by which such Borrower or such
Subsidiary is organized, such as a corporation or limited liability company.
"UCC" - the Uniform Commercial Code as in effect in the State of
California, as amended or otherwise modified.
"Unused Line Fee" - as defined in Section 2.5 of the Agreement.
"U.S. Dollar Refunding Amount" - as defined in Section 3.2.6 of the
Agreement.
"Voting Stock" - Securities of any class or classes of a corporation,
limited partnership or limited liability company or any other entity the holders
of which are ordinarily, in the absence of contingencies, entitled to vote with
respect to the election of corporate directors (or Persons performing similar
functions).
"Withdrawal Liability" - the liability to a Multiemployer Plan, as defined
in Section 4201 of ERISA.
"yield maintenance fee" - as defined in Section 3.2.5 of the Agreement.
Other Terms. All other terms contained in the Agreement shall have, when
the context so indicates, the meanings provided for by the UCC to the extent the
same are used or defined therein.
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Certain Matters of Construction. The terms "herein", "hereof" and
"hereunder" and other words of similar import refer to the Agreement as a whole
and not to any particular section, paragraph or subdivision. Any pronoun used
shall be deemed to cover all genders. The section titles, table of contents and
list of exhibits appear as a matter of convenience only and shall not affect the
interpretation of the Agreement. All references to statutes and related
regulations shall include any amendments of same and any successor statutes and
regulations. All references to any of the Loan Documents shall include any and
all modifications thereto and any and all extensions or renewals thereof. Any
reference herein to "Borrowers and their Subsidiaries" or the like shall refer
solely to Borrowers during such times, if any, as Borrowers shall have no
Subsidiaries.
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