EXHIBIT 10.2
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CREDIT AGREEMENT
AMONG
THE J. M. SMUCKER COMPANY,
AS US BORROWER,
AND
J.M. SMUCKER (CANADA) INC.,
AS CANADIAN BORROWER,
THE LENDERS NAMED HEREIN,
AS LENDERS,
AND
KEYBANK NATIONAL ASSOCIATION,
AS LEAD ARRANGER AND ADMINISTRATIVE AGENT,
AND
BANK OF MONTREAL,
AS CANADIAN FUNDING AGENT AND
DOCUMENTATION AGENT
---------------------
DATED AS OF
JUNE 18, 2004
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TABLE OF CONTENTS
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ARTICLE I. DEFINITIONS........................................................................................ 1
Section 1.1. Definitions................................................................................... 1
Section 1.2. Accounting Terms.............................................................................. 28
Section 1.3. Terms Generally............................................................................... 28
ARTICLE II. AMOUNT AND TERMS OF CREDIT........................................................................ 28
Section 2.1. Amount and Nature of Credit................................................................... 29
Section 2.2. US Revolving Credit........................................................................... 30
Section 2.3. Canadian Revolving Loans...................................................................... 34
Section 2.4. Interest...................................................................................... 36
Section 2.5. Evidence of Indebtedness...................................................................... 39
Section 2.6. Notice of Credit Event; Funding of Loans...................................................... 40
Section 2.7. Payment on Loans and Other Obligations........................................................ 42
Section 2.8. Prepayment.................................................................................... 44
Section 2.9. Facility and Other Fees; Reduction of Commitment.............................................. 45
Section 2.10. Computation of Interest and Fees............................................................. 47
Section 2.11. Mandatory Payment............................................................................ 47
Section 2.12. Appointment of US Borrower as Canadian Borrower's Agent...................................... 48
Section 2.13. Waivers of Borrowers......................................................................... 48
Section 2.14. Extension of Commitment...................................................................... 49
ARTICLE III. ADDITIONAL PROVISIONS RELATING TO FIXED RATE LOANS; INCREASED CAPITAL; TAXES..................... 49
Section 3.1. Requirements of Law........................................................................... 49
Section 3.2. Taxes......................................................................................... 50
Section 3.3. Funding Losses................................................................................ 52
Section 3.4. Eurodollar Rate, Alternate Currency Rate or Canadian Fixed Rate Lending Unlawful; Inability to
Determine Rate..................................................................................... 52
Section 3.5. Replacement of Lenders........................................................................ 53
ARTICLE IV. CONDITIONS PRECEDENT.............................................................................. 53
Section 4.1. Conditions to Each Credit Event............................................................... 54
Section 4.2. Conditions to the First Credit Event.......................................................... 54
ARTICLE V. COVENANTS.......................................................................................... 56
Section 5.1. Insurance..................................................................................... 56
Section 5.2. Money Obligations............................................................................. 56
Section 5.3. Financial Statements and Information.......................................................... 56
Section 5.4. Financial Records............................................................................. 57
Section 5.5. Franchises; Change in Business................................................................ 58
Section 5.6. ERISA Compliance.............................................................................. 58
Section 5.7. Financial Covenants........................................................................... 59
Section 5.8. Borrowing..................................................................................... 59
Section 5.9. Liens......................................................................................... 60
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Section 5.10. Regulations T, U and X....................................................................... 62
Section 5.11. Compliance with Laws......................................................................... 62
Section 5.12. Merger and Sale of Assets.................................................................... 62
Section 5.13. Acquisitions................................................................................. 63
Section 5.14. Notice....................................................................................... 64
Section 5.15. Environmental Compliance..................................................................... 64
Section 5.16. Affiliate Transactions....................................................................... 65
Section 5.17. Use of Proceeds.............................................................................. 65
Section 5.18. Sale and Leaseback Transactions.............................................................. 65
Section 5.19. Guaranty Under Material Indebtedness Agreement............................................... 65
Section 5.20. Restrictive Agreements....................................................................... 65
Section 5.21. Other Covenants.............................................................................. 66
Section 5.22. Pari Passu Ranking........................................................................... 66
Section 5.23. Note Purchase Agreements..................................................................... 66
ARTICLE VI. REPRESENTATIONS AND WARRANTIES.................................................................... 67
Section 6.1. Corporate Existence; Subsidiaries; Foreign Qualification...................................... 67
Section 6.2. Corporate Authority........................................................................... 67
Section 6.3. Compliance with Laws.......................................................................... 67
Section 6.4. Litigation and Administrative Proceedings..................................................... 68
Section 6.5. Title to Assets............................................................................... 68
Section 6.6. Liens and Security Interests.................................................................. 68
Section 6.7. Tax Returns................................................................................... 68
Section 6.8. Environmental Laws............................................................................ 68
Section 6.9. Continued Business............................................................................ 69
Section 6.10. Employee Benefits Plans...................................................................... 69
Section 6.11. Consents or Approvals........................................................................ 70
Section 6.12. Solvency..................................................................................... 70
Section 6.13. Financial Statements......................................................................... 71
Section 6.14. Regulations.................................................................................. 71
Section 6.15. Material Agreements.......................................................................... 71
Section 6.16. Intellectual Property........................................................................ 71
Section 6.17. Insurance.................................................................................... 71
Section 6.18. Accurate and Complete Statements............................................................. 72
Section 6.19. Note Purchase Agreements..................................................................... 72
Section 6.20. Investment Company; Holding Company.......................................................... 72
Section 6.21. Existing Indebtedness........................................................................ 72
Section 6.22. Defaults..................................................................................... 72
ARTICLE VII. EVENTS OF DEFAULT................................................................................ 72
Section 7.1. Payments...................................................................................... 72
Section 7.2. Special Covenants............................................................................. 73
Section 7.3. Other Covenants............................................................................... 73
Section 7.4. Representations and Warranties................................................................ 73
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Section 7.5. Cross Default................................................................................. 73
Section 7.6. ERISA Default................................................................................. 74
Section 7.7. Change in Control............................................................................. 74
Section 7.8. Money Judgment................................................................................ 74
Section 7.9. Validity of Loan Documents.................................................................... 74
Section 7.10. Solvency..................................................................................... 74
ARTICLE VIII. REMEDIES UPON DEFAULT........................................................................... 75
Section 8.1. Optional Defaults............................................................................. 75
Section 8.2. Automatic Defaults............................................................................ 75
Section 8.3. Letters of Credit............................................................................. 75
Section 8.4. Offsets....................................................................................... 76
Section 8.5. Equalization Provision........................................................................ 76
Section 8.6. Other Remedies................................................................................ 77
ARTICLE IX. THE AGENT AND THE CANADIAN FUNDING AGENT.......................................................... 77
Section 9.1. Appointment and Authorization................................................................. 77
Section 9.2. Note Holders.................................................................................. 77
Section 9.3. Consultation With Counsel..................................................................... 77
Section 9.4. Documents..................................................................................... 78
Section 9.5. Agent and Affiliates.......................................................................... 78
Section 9.6. Knowledge of Default.......................................................................... 78
Section 9.7. Action by Agent............................................................................... 78
Section 9.8. Notice of Default............................................................................. 78
Section 9.9. Indemnification of Agent and Canadian Funding Agent........................................... 78
Section 9.10. Successor Agent.............................................................................. 79
Section 9.11. Canadian Funding Agent....................................................................... 79
Section 9.12. Other Agents................................................................................. 79
ARTICLE X. MISCELLANEOUS...................................................................................... 79
Section 10.1. Lenders' Independent Investigation........................................................... 79
Section 10.2. No Waiver; Cumulative Remedies............................................................... 80
Section 10.3. Amendments, Consents......................................................................... 80
Section 10.4. Notices...................................................................................... 80
Section 10.5. Costs, Expenses and Taxes.................................................................... 81
Section 10.6. Indemnification.............................................................................. 81
Section 10.7. Obligations Several; No Fiduciary Obligations................................................ 82
Section 10.8. Execution in Counterparts.................................................................... 82
Section 10.9. Binding Effect; Borrowers' Assignment........................................................ 82
Section 10.10. Lender Assignments.......................................................................... 82
Section 10.11. Sale of Participations...................................................................... 84
Section 10.12. Severability of Provisions; Captions; Attachments........................................... 85
Section 10.13. Investment Purpose.......................................................................... 85
Section 10.14. Entire Agreement............................................................................ 85
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Section 10.15. Confidentiality............................................................................. 86
Section 10.16. Legal Representation of Parties............................................................. 86
Section 10.17. Currency.................................................................................... 86
Section 10.18. Governing Law; Submission to Jurisdiction................................................... 87
Section 10.19. Jury Trial Waiver.............................................................Signature Page 1
Exhibit A Form of US Revolving Credit Note
Exhibit B Form of US Swing Line Note
Exhibit C Form of Canadian Revolving Credit Note
Exhibit D Form of Canadian Swing Line Note
Exhibit E Form of Notice of Loan
Exhibit F Form of Compliance Certificate
Exhibit G Form of Assignment and Acceptance Agreement
Exhibit H Form of Request for Extension
Schedule 1 Commitment of Lenders
Schedule 5.8 Long Term Funded Debt
Schedule 6.1 Subsidiaries
Schedule 6.3 Compliance Disclosures
Schedule 6.4 Litigation and Administrative Proceedings
Schedule 6.8 Environmental Disclosures
Schedule 6.10 Employee Benefit Plans
Schedule 6.13 Financial Statements
Schedule 6.15 Material Agreements
Schedule 6.21 Existing Indebtedness
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This CREDIT AGREEMENT (as the same may from time to time be amended,
restated or otherwise modified, this "Agreement") is made effective as of the
18th day of June, 2004, among:
(a) THE J. M. SMUCKER COMPANY, an Ohio corporation ("US Borrower");
(b) J.M. SMUCKER (CANADA) INC., a corporation organized under the
laws of Ontario, Canada ("Canadian Borrower" and, together with US
Borrower, collectively, "Borrowers" and, individually, each a "Borrower");
(c) the lenders listed on Schedule 1 hereto and each other Eligible
Transferee, as hereinafter defined, that becomes a party hereto pursuant
to Section 10.10 hereof (collectively, the "Lenders" and, individually,
each a "Lender");
(d) KEYBANK NATIONAL ASSOCIATION, as the lead arranger and
administrative agent for the Lenders under this Agreement ("Agent"); and
(e) BANK OF MONTREAL, as the Canadian funding agent and
documentation agent under this Agreement (the "Canadian Funding Agent").
WITNESSETH:
WHEREAS, Borrowers, Agent and the Lenders desire to contract for the
establishment of credits in the aggregate principal amounts hereinafter set
forth, to be made available to Borrowers upon the terms and subject to the
conditions hereinafter set forth;
NOW, THEREFORE, it is mutually agreed as follows:
ARTICLE I. DEFINITIONS
Section 1.1. Definitions. As used in this Agreement, the following terms
shall have the following meanings:
"Acquisition" shall mean any transaction or series of related transactions
for the purpose of or resulting, directly or indirectly, in (a) the acquisition
of all or substantially all of the assets of any Person (other than a Company),
or any business or division of any Person (other than a Company), (b) the
acquisition of in excess of fifty percent (50%) of the stock (or other equity
interest) of any Person (other than a Company), or (c) the acquisition of
another Person (other than a Company) by a merger, amalgamation or consolidation
or any other combination with such Person.
"Advantage" shall mean any payment (whether made voluntarily or
involuntarily, by offset of any deposit or other indebtedness or otherwise)
received by any Lender in respect of the Applicable Debt, if such payment
results in that Lender having less than its pro rata share (based upon its
Applicable Commitment Percentage) of the Applicable Debt then outstanding, than
was the case immediately before such payment.
"Affiliate" shall mean any Person, directly or indirectly, controlling,
controlled by or under common control with a Company and "control" (including
the correlative meanings, the terms "controlling", "controlled by" and "under
common control with") shall mean the power, directly or indirectly, to direct or
cause the direction of the management and policies of a Company, whether through
the ownership of voting securities, by contract or otherwise.
"Agent Fee Letter" shall mean the Agent Fee Letter between US Borrower and
Agent, dated as of the Closing Date, as the same may from time to time be
amended, restated or otherwise modified.
"Alternate Currency" shall mean Euros, Pounds Sterling, Australian Dollars
or any other currency, other than Dollars, agreed to by Agent and the US Lenders
that shall be freely transferable and convertible into Dollars.
"Alternate Currency Exposure" shall mean, at any time and without
duplication, the sum of the Dollar Equivalent of (a) the aggregate principal
amount of Alternate Currency Loans outstanding, and (b) the Letter of Credit
Exposure that is denominated in one or more Alternate Currencies.
"Alternate Currency Loan" shall mean a Loan described in Section 2.2(a)
hereof that shall be denominated in an Alternate Currency and on which US
Borrower shall pay interest at a rate based upon the Derived LIBOR Fixed Rate
applicable to such Alternate Currency.
"Alternate Currency Maximum Amount" shall mean, at any time, the Dollar
Equivalent of Fifty Million Dollars ($50,000,000).
"Alternate Currency Rate" shall mean, with respect to an Alternate
Currency Loan, for any Interest Period, a rate per annum equal to the quotient
obtained (rounded upwards, if necessary, to the nearest 1/16th of 1%) by
dividing (a) the rate of interest, determined by Agent in accordance with its
usual procedures (which determination shall be conclusive absent manifest error)
as of approximately 11:00 A.M. (London time) two Business Days prior to the
beginning of such Interest Period pertaining to such Alternate Currency Loan, as
listed on British Bankers Association Interest Rate LIBOR 01 or 02 as provided
by Reuters (or, if for any reason such rate is unavailable from Reuters, from
any other similar company or service that provides rate quotations comparable to
those currently provided by Reuters) as the rate in the London interbank market
for deposits in the relevant Alternate Currency in immediately available funds
with a maturity comparable to such Interest Period, provided that, in the event
that such rate quotation is not available for any reason, then the Alternate
Currency Rate shall be the average (rounded upward to the nearest 1/16th of 1%)
of the per annum rates at which deposits in immediately available funds in the
relevant Alternate Currency for the relevant Interest Period
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and in the amount of the Alternate Currency Loan to be disbursed or to remain
outstanding during such Interest Period, as the case may be, are offered to
Agent (or an affiliate of Agent, in Agent's discretion) by prime banks in any
Alternate Currency market reasonably selected by Agent, determined as of 11:00
A.M. (London time) (or as soon thereafter as practicable), two Business Days
prior to the beginning of the relevant Interest Period pertaining to such
Alternate Currency Loan hereunder; by (b) 1.00 minus the Reserve Percentage.
"Applicable Commitment Percentage" shall mean, for each Lender:
(a) with respect to the US Revolving Credit Commitment, the
percentage, if any, set forth opposite such Lender's name under the column
headed "US Revolving Credit Commitment Percentage", as listed in Schedule
1 hereto; and
(b) with respect to the Canadian Revolving Credit Commitment, the
percentage, if any, set forth opposite such Lender's name under the column
headed "Canadian Revolving Credit Commitment Percentage", as listed in
Schedule 1 hereto.
"Applicable Debt" shall mean:
(a) with respect to the US Commitment, collectively, (i) all
Indebtedness incurred by US Borrower to the US Lenders pursuant to this
Agreement and the other Loan Documents and includes, without limitation,
the principal of and interest on the Notes payable by US Borrower to the
US Lenders, and all obligations with respect to the US Swing Line
Commitment and the Letter of Credit Commitment, (ii) each extension,
renewal or refinancing of the foregoing, in whole or in part, and (iii)
the facility, utilization and other fees and amounts payable hereunder in
connection with the US Commitment; and
(b) with respect to the Canadian Commitment, collectively, (i) all
Indebtedness incurred by Canadian Borrower to the Canadian Lenders
pursuant to this Agreement and the other Loan Documents and includes,
without limitation, the principal of and interest on the Notes payable by
Canadian Borrower to the Canadian Lenders, and all obligations with
respect to the Canadian Swing Line Commitment, (ii) each extension,
renewal or refinancing of the foregoing, in whole or in part, and (iii)
the facility, utilization and other fees and amounts payable hereunder in
connection with the Canadian Commitment.
"Applicable Facility Fee Rate" shall mean:
(a) for the period from the Closing Date through September 30, 2004,
ten (10.00) basis points; and
(b) for the period commencing October 1, 2004 and thereafter, the
number of basis points set forth in the following matrix, based upon the
result of the computation of the Leverage Ratio:
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LEVERAGE RATIO APPLICABLE FACILITY FEE RATE
- ------------------------------------------------------- ----------------------------
Greater than 2.50 to 1.00 17.50 basis points
Greater than 2.00 to 1.00 but less than or equal to 2.50 15.00 basis points
to 1.00
Greater than 1.50 to 1.00 but less than or equal to 2.00 12.50 basis points
to 1.00
Greater than 1.00 to 1.00 but less than or equal to 1.50 10.00 basis points
to 1.00
Less than or equal to 1.00 to 1.00 7.50 basis points
The Applicable Facility Fee Rate shall change on October 1, 2004 based on the
July 31, 2004 Consolidated financial statements of US Borrower for the most
recently completed four fiscal quarters, and thereafter changes to the
Applicable Facility Fee Rate shall be effective on the first day of each month
following the date upon which Agent received, or, if earlier, Agent should have
received, pursuant to Section 5.3(a) or (b) hereof, the financial statements of
the Companies. The above matrix does not modify or waive, in any respect, the
rights of Agent and the Lenders to charge the Default Rate, or the rights and
remedies of Agent and the Lenders pursuant to Articles VII and VIII hereof.
Notwithstanding anything herein to the contrary, during any period when US
Borrower shall have failed to timely deliver the financial statements pursuant
to Section 5.3(a) or (b) hereof, or the Compliance Certificate pursuant to
Section 5.3(c) hereof, until such time as the appropriate financial statements
and Compliance Certificate are delivered, at the option of the Required Lenders,
the Applicable Facility Fee Rate shall be the highest rate per annum indicated
in the above pricing grid regardless of the Leverage Ratio at such time.
"Applicable Lender" shall mean, (a) a US Lender with respect to the US
Commitment, and (b) a Canadian Lender with respect to the Canadian Commitment.
"Applicable Margin" shall mean:
(a) for the period from the Closing Date through September 30, 2004,
thirty (30.00) basis points; and
(b) for the period commencing October 1, 2004 and thereafter, the
number of basis points set forth in the following matrix, based upon the
result of the computation of the Leverage Ratio:
LEVERAGE RATIO APPLICABLE MARGIN
- -------------------------------------------------------- ------------------
Greater than 2.50 to 1.00 70.00
Greater than 2.00 to 1.00 but less than or equal to 2.50 60.00
to 1.00
Greater than 1.50 to 1.00 but less than or equal to 2.00 40.00
to 1.00
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Greater than 1.00 to 1.00 but less than or equal to 1.50 30.00
to 1.00
Less than or equal to 1.00 to 1.00 27.50
The Applicable Margin shall change on October 1, 2004, based on the July 31,
2004 Consolidated financial statements of US Borrower for the most recently
completed four fiscal quarters, and thereafter changes to the Applicable Margin
shall be effective on the first day of each month following the date upon which
Agent received, or, if earlier, Agent should have received, pursuant to Section
5.3(a) or (b) hereof, the financial statements of the Companies. The above
matrix does not modify or waive, in any respect, the rights of Agent and the
Lenders to charge the Default Rate, or the rights and remedies of Agent and the
Lenders pursuant to Articles VII and VIII hereof. Notwithstanding anything
herein to the contrary, during any period when US Borrower shall have failed to
timely deliver the financial statements pursuant to Section 5.3(a) or (b)
hereof, or the Compliance Certificate pursuant to Section 5.3(c) hereof, until
such time as the appropriate financial statements and Compliance Certificate are
delivered, at the option of the Required Lenders, the Applicable Margin shall be
the highest rate per annum indicated in the above pricing grid regardless of the
Leverage Ratio at such time.
"Applicable Utilization Fee Rate" shall mean:
(a) for the period from the Closing Date through September 30, 2004,
five (5.00) basis points; and
(b) for the period commencing October 1, 2004 and thereafter, the
number of basis points set forth in the following matrix, based upon the
result of the computation of the Leverage Ratio:
LEVERAGE RATIO APPLICABLE UTILIZATION FEE RATE
- -------------------------------------------------------- -------------------------------
Greater than 2.50 to 1.00 12.50 basis points
Greater than 2.00 to 1.00 but less than or equal to 2.50 10.00 basis points
to 1.00
Less than or equal to 2.00 to 1.00 5.00 basis points
The Applicable Utilization Fee Rate shall change on October 1, 2004 based on the
July 31, 2004 Consolidated financial statements of US Borrower for the most
recently completed four fiscal quarters, and thereafter changes to the
Applicable Utilization Fee Rate shall be effective on the first day of each
month following the date upon which Agent received, or, if earlier, Agent should
have received, pursuant to Section 5.3(a) or (b) hereof, the financial
statements of the Companies. The above matrix does not modify or waive, in any
respect, the rights of Agent and the Lenders to charge the Default Rate, or the
rights and remedies of Agent and the Lenders pursuant to Articles VII and VIII
hereof. Notwithstanding anything herein to the contrary, during any period when
US Borrower shall have failed to timely deliver the financial statements
pursuant to Section 5.3(a) or (b) hereof, or the Compliance Certificate pursuant
to Section 5.3(c) hereof, until such time as the appropriate financial
statements and Compliance Certificate are delivered, at the option of the
Required Lenders, the Applicable Utilization Fee Rate shall be the
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highest rate per annum indicated in the above pricing grid regardless of the
Leverage Ratio at such time.
"Assignment Agreement" shall mean an Assignment and Acceptance Agreement
in the form of the attached Exhibit G.
"Attributable Debt" shall mean, as to any particular lease relating to a
Sale/Leaseback Transaction, the present value of all Lease Rentals required to
be paid by any Company under such lease during the remaining term thereof
(determined in accordance with GAAP using a discount factor equal to the
interest rate implicit in such lease if known or, if not known, an interest rate
of ten percent (10%) per annum).
"Authorized Officer" shall mean a Financial Officer or other individual
authorized by a Financial Officer in writing (with a copy to Agent) to handle
certain administrative matters in connection with this Agreement.
"Business Day" shall mean (a) any day that is not a Saturday, Sunday or
other day on which national banking associations are authorized or required to
close, (b) if the applicable Business Day relates to a Eurodollar Loan, a day of
the year on which dealings in deposits are carried on in the London interbank
Eurodollar market, (c) if the applicable Business Day relates to an Alternate
Currency Loan, a day of the year on which dealings in deposits are carried on in
the relevant Alternate Currency, or (d) if the applicable Business Day relates
to a Canadian Revolving Loan or Canadian Swing Loan, a day of the year on which
Canadian banks are open for dealings in the Province of Ontario, Canada.
"CAD" or "Canadian Dollar" shall mean lawful money of Canada.
"CAD CDOR Loan" shall mean a Canadian Revolving Loan that shall be
denominated in Canadian Dollars and on which Canadian Borrower shall pay
interest at a rate based on the Derived CAD Fixed Rate.
"CAD Equivalent" shall mean the amount denominated in CAD, as of any date
of determination, that could be purchased by Agent in accordance with its normal
practice with the applicable amount of Dollars at the spot exchange rate quoted
by Agent at approximately 11:00 A.M. (Eastern time) on such date.
"CAD Fixed Rate" shall mean, with respect to a CAD CDOR Loan, for any
Interest Period, the rate per annum determined by Canadian Funding Agent by
reference to the average rate quoted on the Reuters Monitor Screen (Page CDOR,
or such other page as may replace such page on such screen for the purpose of
displaying Canadian interbank bid rates for Canadian Dollar bankers'
acceptances) applicable to Canadian Dollar bankers' acceptances (on a three
hundred sixty-five (365) day basis) with a term comparable to such Interest
Period as of 10:00 A.M. (Eastern time) on the first day of such Interest Period
and, if such day is not a Business Day, then on the immediately preceding
Business Day (as adjusted by the Canadian Funding Agent after 10:00A.M. (Eastern
time) to reflect any error in a posted rate of interest or in the posted average
annual rate of interest). If, for any reason, the Reuters Monitor Screen rates
are
6
unavailable, CAD Fixed Rate means the rate of interest determined by Canadian
Funding Agent that is equal to the rate (rounded upwards to the nearest basis
point) quoted by the Canadian Reference Bank in respect of Canadian Dollar
bankers' acceptances (on a three hundred sixty-five (365) day basis) with a term
comparable to such Interest Period. No adjustment shall be made to account for
the difference between the number of days in a year on which the rates referred
to in this definition are based and the number of days in a year on the basis of
which interest is calculated in this Agreement.
"Canadian Base Rate Loan" shall mean a Canadian CAD Base Rate Loan or a
Canadian USD Base Rate Loan.
"Canadian Benefit Plan" shall mean each material written plan, fund,
program, or policy, whether formal or informal, funded or unfunded, insured or
uninsured, providing employee benefits, including medical, hospital care,
dental, sickness, accident, disability, life insurance, pension, retirement or
savings benefits, under which Canadian Borrower and its Subsidiaries have any
liability with respect to any employee or former employee, but excluding any
Canadian Pension Plan.
"Canadian CAD Base Rate" shall mean the per annum interest rate
established from time to time by the Canadian Reference Bank as the Canadian
Reference Bank's "prime rate" or similar index, whether or not such rate is
publicly announced, applicable to commercial loans made by the Canadian
Reference Bank in CAD. Each change in the Canadian CAD Base Rate shall be
effective immediately from and after such change.
"Canadian CAD Base Rate Loan" shall mean a Canadian Revolving Loan that
shall be denominated in Canadian Dollars and on which Canadian Borrower shall
pay interest at a rate based on the Canadian CAD Base Rate.
"Canadian CAD Swing Loan" shall mean a Canadian Swing Loan that shall be
denominated in Canadian Dollars and on which Canadian Borrower shall pay
interest at a rate based on the Canadian CAD Base Rate.
"Canadian Commitment" shall mean the obligation hereunder of the Canadian
Lenders, during the Commitment Period, to make Loans pursuant to the Canadian
Revolving Credit Commitments, up to the Maximum Canadian Revolving Amount.
"Canadian Eurodollar Loan" shall mean a Loan described in Section 2.3(a)
hereof that shall be denominated in Dollars and on which Canadian Borrower shall
pay interest at a rate based upon the Derived LIBOR Fixed Rate applicable to
Eurodollars.
"Canadian Fixed Rate Loan" shall mean a CAD CDOR Loan or a Canadian
Eurodollar Loan.
"Canadian Lender" shall mean each Lender that is designated as a Canadian
Lender on Schedule 1 hereto.
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"Canadian Pension Plan" shall mean a pension plan required to be
registered under Canadian federal or provincial law that is maintained or
contributed to by Canadian Borrower and its Subsidiaries for their employees or
former employees, but does not include the Canada Pension Plan or the Quebec
Pension Plan as maintained by the Government of Canada or the Province of
Quebec, respectively.
"Canadian Reference Bank" shall mean Canadian Funding Agent.
"Canadian Revolving Credit Commitment" shall mean the obligation
hereunder, during the Commitment Period, of (a) each Canadian Lender to make
Canadian Revolving Loans up to the Maximum Amount for such Canadian Lender, and
(b) the Canadian Swing Line Lender to make and each Canadian Lender to
participate in Canadian Swing Loans pursuant to the Canadian Swing Line
Commitment.
"Canadian Revolving Credit Note" shall mean a Canadian Revolving Credit
Note executed and delivered pursuant to Section 2.5(c) hereof.
"Canadian Revolving Exposure" shall mean the sum of (a) the Dollar
Equivalent of the aggregate principal amount of all Canadian Revolving Loans
outstanding, and (b) the Canadian Swing Line Exposure.
"Canadian Revolving Loan" shall mean a Canadian CAD Base Rate Loan, a
Canadian USD Base Rate Loan, a CAD CDOR Loan or a Canadian Eurodollar Loan
granted to Canadian Borrower in accordance with Section 2.3(a) hereof.
"Canadian Swing Line" shall mean the credit facility established by the
Canadian Swing Line Lender for Canadian Borrower in accordance with Section
2.3(b) hereof.
"Canadian Swing Line Commitment" shall mean the commitment of the Canadian
Swing Line Lender to make Canadian Swing Loans to Canadian Borrower up to the
aggregate amount at any time outstanding of Ten Million Dollars ($10,000,000).
"Canadian Swing Line Exposure" shall mean, at any time, the sum of (a) the
Dollar Equivalent of the aggregate principal amount of all Canadian CAD Swing
Loans outstanding, and (b) the aggregate principal amount of all Canadian USD
Swing Loans outstanding.
"Canadian Swing Line Lender" shall mean Bank of Montreal, as holder of the
Canadian Swing Line Commitment.
"Canadian Swing Line Note" shall mean the Canadian Swing Line Note
executed and delivered pursuant to Section 2.5(d) hereof.
"Canadian Swing Loan" shall mean a Canadian CAD Swing Loan or a Canadian
USD Swing Loan granted to Canadian Borrower in accordance with Section 2.3(b)
hereof.
8
"Canadian USD Base Rate" shall mean the per annum interest rate
established from time to time by the Canadian Reference Bank as the reference
rate of interest applicable to commercial loans made in Canada by the Canadian
Reference Bank in Dollars. Each change in the Canadian USD Base Rate shall be
effective immediately from and after such change.
"Canadian USD Base Rate Loan" shall mean a Canadian Revolving Loan that
shall be denominated in Dollars and on which Canadian Borrower shall pay
interest at a rate based on the Canadian USD Base Rate.
"Canadian USD Swing Loan" shall mean a Canadian Swing Loan that shall be
denominated in Dollars and on which Canadian Borrower shall pay interest at a
rate based on the Canadian USD Base Rate.
"Capital Distribution" shall mean a payment made, liability incurred or
other consideration given by a Company to any Person that is not a Company, for
the purchase, acquisition, redemption, repurchase or retirement of any capital
stock or other equity interest of such Company or as a dividend, return of
capital or other distribution (other than any stock dividend, stock split or
other equity distribution payable only in capital stock or other equity of such
Company) in respect of such Company's capital stock or other equity interest.
"Capitalization Ratio" shall mean, as determined for the most recently
completed fiscal quarter of US Borrower, on a Consolidated basis and in
accordance with GAAP, the ratio of (a) the sum of (i) Debt of the Companies
secured by Liens permitted by Section 5.9(g) hereof, (ii) Debt of Subsidiaries
(other than Excluded Subsidiary Debt), and (iii) Consolidated Attributable Debt;
to (b) Consolidated Total Capitalization.
"Capitalized Lease Obligations" shall mean obligations of the Companies
for the payment of rent for any real or personal property under leases or
agreements to lease that, in accordance with GAAP, have been or should be
capitalized on the books of the lessee and, for purposes hereof, the amount of
any such obligation shall be the capitalized amount thereof determined in
accordance with GAAP.
"Change in Control" shall mean:
(a) the failure of the Smucker Family to hold, in the aggregate, not
less than the greater of (i) seven and one-half percent (7.5%) of the
Special Voting Power of all Voting Shares of US Borrower, and (ii) not
less than the amount of the Special Voting Power of all Voting Shares of
US Borrower possessed by the Largest Other Shareholder;
(b) the failure of the Smucker Family to hold, in the aggregate, not
less than the greater of (i) five percent (5%) of the Ordinary Voting
Power of all Voting Shares of US Borrower, and (ii) not less than the
amount of Ordinary Voting Power of all Voting Shares of US Borrower
possessed by the Largest Other Shareholder;
(c) the sale or transfer of all or substantially all of the assets
of US Borrower, in a single transaction or a series of related
transactions, to any person (within the
9
meaning of Rule 13d-3 of the SEC under the Securities Exchange Act of
1934, as in effect on the Closing Date) or related persons constituting a
group (within the meaning of Rule 13d-3 of the SEC under the Securities
Exchange Act of 1934, as in effect on the Closing Date);
(d) if either Timothy P. Smucker or Richard K. Smucker (or both)
shall fail to serve on the board of directors of US Borrower at any time;
provided, however, that if either Timothy P. Smucker or Richard K. Smucker
(but not both) shall fail to serve on the board of directors of US
Borrower at any time, then with respect to this subpart (c) only, it shall
not be deemed to constitute a Change in Control if such individual is
replaced as a director of US Borrower within one hundred twenty (120) days
of such event by an individual reasonably satisfactory to the Required
Lenders; or
(e) the occurrence of a change in control, or other similar
provision, as defined in any Material Indebtedness Agreement, the result
of which is to cause such Indebtedness to become due prior to its stated
maturity.
"Clean-Down Amount of Consolidated Current Debt" shall mean, at any date,
the lowest average daily amount of Consolidated Current Debt outstanding during
any period of thirty (30) consecutive days occurring in the twelve consecutive
calendar months most recently ended (or on such date if such date shall be the
last day of a calendar month).
"Closing Date" shall mean the effective date of this Agreement as set
forth in the first paragraph of this Agreement.
"Closing Fee Letter" shall mean the Closing Fee Letter between US Borrower
and Agent, dated as of the Closing Date.
"Code" shall mean the Internal Revenue Code of 1986, as amended, together
with the rules and regulations promulgated thereunder.
"Commitment" shall mean the US Commitment and the Canadian Commitment.
"Commitment Period" shall mean the period from the Closing Date to June
17, 2009 or such earlier date on which the Commitment shall have been terminated
pursuant to Article VIII hereof.
"Companies" shall mean all Borrowers and Subsidiaries.
"Company" shall mean a Borrower or Subsidiary.
"Compliance Certificate" shall mean a certificate, substantially in the
form of the attached Exhibit F.
"Confidential Information" shall mean all confidential or proprietary
information about the Companies that has been furnished by any Company to Agent
or any Lender, whether
10
furnished before, on or after the Closing Date and regardless of the manner in
which it is furnished, but does not include any such information that (a) is or
becomes generally available to the public other than as a result of a disclosure
by Agent or such Lender not permitted by this Agreement, (b) was available to
Agent or such Lender on a nonconfidential basis prior to its disclosure to Agent
or such Lender or (c) becomes available to Agent or such Lender on a
nonconfidential basis from a Person other than a Company that is not, to the
knowledge of Agent or such Lender, acting in violation of a confidentiality
agreement with a Company or is not otherwise prohibited from disclosing the
information to Agent or such Lender.
"Consideration" shall mean, in connection with an Acquisition, the
aggregate consideration paid, including borrowed funds, cash, the issuance of
securities or notes, the assumption or incurring of liabilities (direct or
contingent), the payment of consulting fees or fees for a covenant not to
compete and any other consideration paid for such Acquisition.
"Consolidated" shall mean the resultant consolidation of the financial
statements of US Borrower and its Subsidiaries in accordance with GAAP,
including principles of consolidation consistent with those applied in
preparation of the consolidated financial statements referred to in Section 6.13
hereof.
"Consolidated Attributable Debt" shall mean, at any date, the total of all
Attributable Debt of the Companies outstanding on such date, after eliminating
all offsetting debits and credits between the Companies and all other items
required to be eliminated in the course of the preparation of the financial
statements of US Borrower, as determined on a Consolidated basis and in
accordance with GAAP.
"Consolidated Current Debt" shall mean, at any date, all Current Debt of
the Companies outstanding on such date, after eliminating all offsetting debits
and credits between the Companies and all other items required to be eliminated
in the course of the preparation of the financial statements of US Borrower, as
determined on a Consolidated basis and in accordance with GAAP.
"Consolidated Depreciation and Amortization Charges" shall mean, for any
period, the aggregate of all depreciation and amortization charges for fixed
assets, leasehold improvements and general intangibles (specifically including
goodwill) of the Companies for such period, as determined on a Consolidated
basis and in accordance with GAAP.
"Consolidated EBITDA" shall mean, for any period, as determined on a
Consolidated basis and in accordance with GAAP, Consolidated Net Earnings for
such period plus the aggregate amounts deducted in determining such Consolidated
Net Earnings in respect of (a) Consolidated Interest Expense, (b) Consolidated
Income Tax Expense, (c) Consolidated Depreciation and Amortization Charges, and
(d) non-recurring charges and expenses incurred in an amount not to exceed, in
the aggregate for both years, Thirty-Five Million Dollars ($35,000,000) for the
2005 and 2006 fiscal years of US Borrower.
"Consolidated Income Tax Expense" shall mean, for any period, all
provisions for taxes based on the gross or net income of the Companies
(including, without limitation, any additions
11
to such taxes, and any penalties and interest with respect thereto), and all
franchise taxes of the Companies, as determined on a Consolidated basis and in
accordance with GAAP.
"Consolidated Interest Expense" shall mean, for any period, the interest
expense of the Companies for such period, as determined on a Consolidated basis
and in accordance with GAAP.
"Consolidated Long-Term Funded Debt" shall mean, at any date, Long-Term
Funded Debt of the Companies outstanding on such date, after eliminating all
offsetting debits and credits between the Companies and all other items required
to be eliminated in the course of the preparation of the financial statements of
US Borrower, as determined on a Consolidated basis and in accordance with GAAP.
"Consolidated Net Earnings" shall mean, for any period, the net income
(loss) of the Companies for such period, as determined on a Consolidated basis
and in accordance with GAAP.
"Consolidated Net Worth" shall mean, at any time:
(a) the sum of (i) the par value (or value stated on the books of
the corporation) of the capital stock (but excluding treasury stock,
capital stock subscribed and unissued and preferred stock redeemable prior
to the last day of the Commitment Period) of the Companies, plus (ii) the
amount of the paid-in capital and retained earnings of the Companies, in
each case as such amounts would be shown on a Consolidated balance sheet
of US Borrower as of such time prepared in accordance with GAAP; minus
(b) to the extent included in subpart (a) hereof, all amounts
properly attributable to minority interests, if any, in the stock and
surplus of Subsidiaries.
"Consolidated Senior Long-Term Funded Debt" shall mean all Consolidated
Long-Term Funded Debt other than any such Debt that has been Subordinated.
"Consolidated Total Assets" shall mean, at any time, all of the assets of
the Companies, as determined on a Consolidated basis and in accordance with
GAAP, after eliminating all amounts properly attributable to minority interests,
if any, in the stock and surplus of Subsidiaries.
"Consolidated Total Capitalization" shall mean, at any time, the sum of
Consolidated Net Worth and Consolidated Long-Term Funded Debt.
"Consolidated Total Indebtedness" shall mean, at any date, all
Indebtedness (including, but not limited to, current, long-term and Subordinated
Indebtedness, if any) of the Companies, as determined on a Consolidated basis
and in accordance with GAAP.
"Control Event" shall mean (a) the execution of any written agreement or
letter of intent that, when fully performed by the parties thereto, would result
in a Change in Control; or (b) the
12
making of any written offer by any person (as such term is used in Rule 13d-5
under the Exchange Act as in effect on the Closing Date) or related persons
constituting a group (as such term is used in Rule 13d-5 under the Exchange Act
as in effect on the Closing Date) to the holders of Voting Shares of US Borrower
that, if accepted, would result in a Change in Control.
"Controlled Group" shall mean a Company and each Person required to be
aggregated with a Company under Code Section 414(b), (c), (m) or (o).
"Credit Event" shall mean the making by the Lenders of a Loan, the
conversion by the US Lenders of a US Base Rate Loan to a US Fixed Rate Loan or
by the Canadian Lenders of a Canadian Base Rate Loan to a CAD CDOR Loan, the
continuation by the applicable Lenders of a Fixed Rate Loan after the end of the
applicable Interest Period, the making by the US Swing Line Lender of a US Swing
Loan, the making by the Canadian Swing Line Lender of a Canadian Swing Loan, or
the issuance by the Fronting Lender of a Letter of Credit.
"Credit Party" shall mean a Borrower and any Subsidiary or other Affiliate
that is a Guarantor of Payment.
"Current Debt" shall mean, at any date, with respect to any Person, all
Debt of such Person which by its terms or by the terms of any instrument or
agreement relating thereto matures on demand or within one year from the date of
the creation thereof and is not directly or indirectly renewable or extendible
at the option of the obligor in respect thereof to a date one year or more from
such date; provided, however, that (a) Debt outstanding under a revolving credit
or similar agreement which obligates the lender or lenders to extend credit over
a period of one year or more and (b) Current Maturities of Long-Term Funded Debt
shall constitute Long-Term Funded Debt and not Current Debt, even though such
Debt by its terms matures on demand or within one year from such date.
"Current Maturities of Long-Term Funded Debt" shall mean, at any date,
with respect to any item of Long-Term Funded Debt, the portion of such Long-Term
Funded Debt outstanding at such time which by the terms of such Long-Term Funded
Debt or the terms of any instrument or agreement relating thereto is due on
demand or within one year from such time (whether by sinking fund, other
required prepayment or final payment at maturity) and is not directly or
indirectly renewable, extendible or refundable at the option of the obligor
under an agreement or firm commitment in effect at such time to a date one year
or more from such time.
"Debt" shall mean, for any Company, without duplication:
(a) all liabilities for borrowed money;
(b) all liabilities for the deferred purchase price of property
acquired by such Company (excluding accounts payable arising in the
ordinary course of business but including, without limitation, all
liabilities created or arising under any conditional sale or other title
retention agreement with respect to any such property);
13
(c) all liabilities appearing on its balance sheet in accordance
with GAAP in respect of capital leases;
(d) all liabilities for borrowed money secured by any Lien with
respect to any property owned by such Company (whether or not it has
assumed or otherwise become liable for such liabilities); and
(e) any guaranty by such Company with respect to liabilities of a
type described in any of subpart (a) through (d) hereof.
Debt of any Company shall include all obligations of such Company of the
character described in subparts (a) through (e) to the extent such Company
remains legally liable in respect thereof notwithstanding that any such
obligation is deemed to be extinguished under GAAP.
"Debt Prepayment Application" shall mean, with respect to any sale, lease,
transfer or other disposition of property, the application by a Company of cash
in an amount equal to the Net Proceeds Amount with respect to such sale, lease,
transfer or other disposition to pay Consolidated Senior Long-Term Funded Debt
of such Company (other than Consolidated Senior Long-Term Funded Debt owing to a
Company or any Affiliate and Consolidated Senior Long-Term Funded Debt in
respect of any revolving credit or similar credit facility providing a Company
with the right to obtain loans or other extensions of credit from time to time,
except to the extent that, in connection with such payment of Consolidated
Senior Long-Term Funded Debt, the availability of credit under such credit
facility is permanently reduced by an amount not less than the amount of such
proceeds applied to the payment of such Consolidated Senior Long-Term Funded
Debt).
"Default" shall mean an event or condition that constitutes, or with the
lapse of any applicable grace period or the giving of notice or both would
constitute, an Event of Default, and that has not been waived by the Required
Lenders in writing.
"Default Rate" shall mean (a) with respect to any Loan, a rate per annum
equal to two percent (2%) in excess of the rate otherwise applicable thereto,
and (b) with respect to any other amount, if no rate is specified or available,
a rate per annum equal to two percent (2%) in excess of the US Base Rate from
time to time in effect.
"Derived CAD Fixed Rate" shall mean a rate per annum equal to the sum of
the Applicable Margin (from time to time in effect) plus the CAD Fixed Rate.
"Derived LIBOR Fixed Rate" shall mean (a) with respect to a Eurodollar
Loan, a rate per annum equal to the sum of the Applicable Margin (from time to
time in effect) plus the Eurodollar Rate, and (b) with respect to an Alternate
Currency Loan, a rate per annum equal to the sum of the Applicable Margin (from
time to time in effect) plus the Alternate Currency Rate applicable to the
relevant Alternate Currency.
"Designated Lending Office" shall mean the office of Canadian Funding
Agent, at 1 First Canadian Place, 19th Floor, Toronto, Ontario M5X1A1,
Attention: Manager, Global Distribution
14
Services, or such other office and address in Canada as Canadian Funding Agent
may from time to time designate.
"Dollar" or the sign $ shall mean lawful money of the United States of
America.
"Dollar Equivalent" shall mean (a) with respect to a Canadian CAD Base
Rate Loan, a CAD CDOR Loan or a Canadian CAD Swing Loan, the Dollar equivalent
of the amount of such Loan, determined by Agent on the basis of its spot rate at
approximately 11:00 A.M. (London time) on the date two Business Days before the
date of such Loan, for the purchase of Canadian Dollars with Dollars for
delivery on the date of such Loan, (b) with respect to an Alternate Currency
Loan or Letter of Credit denominated in an Alternate Currency, the Dollar
equivalent of the amount of such Alternate Currency Loan or Letter of Credit
denominated in an Alternate Currency, determined by Agent on the basis of its
spot rate at approximately 11:00 A.M. (London time) on the date two Business
Days before the date of such Alternate Currency Loan, for the purchase of the
relevant Alternate Currency with Dollars for delivery on the date of such
Alternate Currency Loan or Letter of Credit, and (c) with respect to any other
amount, if such amount is denominated in Dollars, then such amount in Dollars
and, otherwise the Dollar equivalent of such amount, determined by Agent on the
basis of its spot rate at approximately 11:00 A.M. (London time) on the date for
which the Dollar equivalent amount of such amount is being determined, for the
purchase of Canadian Dollars or the relevant Alternate Currency, as the case may
be, with Dollars for delivery on such date; provided, however, that, in
calculating the Dollar Equivalent for purposes of determining (i) any Borrower's
obligation to prepay Loans and Letters of Credit pursuant to Section 2.11
hereof, or (ii) any Borrower's ability to request additional Loans or Letters of
Credit pursuant to the Commitment, Agent may, in its discretion, on any Business
Day selected by Agent (prior to payment in full of the Obligations), calculate
the Dollar Equivalent of each such Loan or Letter of Credit. Agent shall notify
US Borrower of the Dollar Equivalent of such Canadian CAD Base Rate Loans, CAD
CDOR Loans, Canadian CAD Swing Loans, Alternate Currency Loans or any other
amount, at the time that such Dollar Equivalent shall have been determined
pursuant to this definition.
"Dormant Subsidiary" shall mean a Company that (a) is not a Credit Party,
(b) has aggregate assets of less than One Million Dollars ($1,000,000), and (c)
has no direct or indirect Subsidiaries with aggregate assets for all such
Subsidiaries of more than One Million Dollars ($1,000,000).
"Eligible Transferee" shall mean a commercial bank, financial institution
or other "accredited investor" (as defined in SEC Regulation D or, for the
purposes of the Canadian Commitment, as defined in Ontario Securities Commission
Rule 45-501) that is not a Borrower, a Subsidiary or an Affiliate.
"Environmental Laws" shall mean all provisions of law (including the
common law), statutes, ordinances, codes, rules, guidelines, policies,
procedures, orders-in-council, regulations, permits, licenses, judgments, writs,
injunctions, decrees, orders, awards and standards promulgated by a Governmental
Authority or by any court, agency, instrumentality, regulatory authority or
commission of any of the foregoing concerning health, safety and protection of,
or regulation of the discharge of substances into, the environment.
15
"Environmental Permits" shall mean all permits, licenses, authorizations,
certificates, approvals or registrations required by any Governmental Authority
under any Environmental Laws.
"ERISA" shall mean the Employee Retirement Income Security Act of 1974, as
amended from time to time, and the regulations promulgated pursuant thereto.
"ERISA Event" shall mean (a) the occurrence of an event with respect to an
ERISA Plan that results in the imposition of an excise tax or any other
liability on a Company or of the imposition of a Lien on the assets of a
Company; (b) the engagement by a Controlled Group member in a non-exempt
"prohibited transaction" (as defined under ERISA Section 406 or Code Section
4975) or a breach of a fiduciary duty under ERISA that results in liability to a
Company; (c) the application by a Controlled Group member for a waiver from the
minimum funding requirements of Code Section 412 or ERISA Section 302 or a
Controlled Group member is required to provide security under Code Section
401(a)(29) or ERISA Section 307; (d) the occurrence of a Reportable Event with
respect to any Pension Plan as to which notice is required to be provided to the
PBGC; (e) the withdrawal by a Controlled Group member from a Multiemployer Plan
in a "complete withdrawal" or a "partial withdrawal" (as such terms are defined
in ERISA Sections 4203 and 4205, respectively); (f) the involvement of, a
Multiemployer Plan in any reorganization under ERISA Section 4241; (g) the
failure of an ERISA Plan (and any related trust) that is intended to be
qualified under Code Sections 401 and 501 to be so qualified or the failure of
any "cash or deferred arrangement" under any such ERISA Plan to meet the
requirements of Code Section 401(k) in any material respect; (h) the termination
of a Pension Plan by the PBGC or appointment by the PBGC of a trustee to
administer a Pension Plan, or the termination of a Pension Plan by a Controlled
Group member; (i) the failure by a Controlled Group member or an ERISA Plan to
substantially satisfy any requirements of law applicable to an ERISA Plan in any
material respect; (j) the commencement, existence or threatening of a claim,
action, suit, audit or investigation with respect to an ERISA Plan, other than a
routine claim for benefits; or (k) any incurrence by a Controlled Group member
of any liability for post-retirement benefits under any Welfare Plan, other than
as required by ERISA Section 601, et. seq. or Code Section 4980B.
"ERISA Plan" shall mean an "employee benefit plan" (within the meaning of
ERISA Section 3(3)) that a Controlled Group member at any time sponsors,
maintains, contributes to, has liability with respect to or has an obligation to
contribute to such plan.
"Eurocurrency Liabilities" shall have the meaning assigned to that term in
Regulation D of the Board of Governors of the Federal Reserve System, as in
effect from time to time.
"Eurodollar" shall mean a Dollar denominated deposit in a bank or branch
outside of the United States.
"Eurodollar Loan" shall mean a US Eurodollar Loan or a Canadian Eurodollar
Loan.
16
"Eurodollar Rate" shall mean, with respect to a Eurodollar Loan, for any
Interest Period, a rate per annum equal to the quotient obtained (rounded
upwards, if necessary, to the nearest 1/16th of 1%) by dividing (a) the rate of
interest, determined by Agent (or Canadian Funding Agent, as applicable) in
accordance with its usual procedures (which determination shall be conclusive
absent manifest error) as of approximately 11:00 A.M. (London time) two Business
Days prior to the beginning of such Interest Period pertaining to such
Eurodollar Loan, as listed on British Bankers Association Interest Rate LIBOR 01
or 02 as provided by Reuters (or, if for any reason such rate is unavailable
from Reuters, from any other similar company or service that provides rate
quotations comparable to those currently provided by Reuters) as the rate in the
London interbank market for Dollar deposits in immediately available funds with
a maturity comparable to such Interest Period, provided that, in the event that
such rate quotation is not available for any reason, then the Eurodollar Rate
shall be the average (rounded upward to the nearest 1/16th of 1%) of the per
annum rates at which deposits in immediately available funds in Dollars for the
relevant Interest Period and in the amount of the Eurodollar Loan to be
disbursed or to remain outstanding during such Interest Period, as the case may
be, are offered to Agent (or an affiliate of Agent, in Agent's discretion, or
Canadian Funding Agent, as applicable) by prime banks in any Eurodollar market
reasonably selected by Agent (or Canadian Funding Agent, as applicable),
determined as of 11:00 A.M. (London time) (or as soon thereafter as
practicable), two Business Days prior to the beginning of the relevant Interest
Period pertaining to such Eurodollar Loan hereunder; by (b) 1.00 minus the
Reserve Percentage.
"Event of Default" shall mean an event or condition that shall constitute
an event of default as defined in Article VII hereof.
"Excluded Subsidiary Debt" shall mean (a) intercompany Debt of the
Companies, (b) any guaranty by a Subsidiary of Debt of the Companies under this
Agreement and (c) Debt of MIX under the Note Purchase Agreements and Debt of any
guarantor thereof that is a Subsidiary.
"Excluded Taxes" shall mean net income taxes (and franchise taxes imposed
in lieu of net income taxes) imposed on Agent or any Lender by the Governmental
Authority located in any jurisdiction, as a result of Agent or Lender, as
applicable, having been a citizen or resident of the jurisdiction of such taxing
authority or being or having been engaged in a trade or business in such
jurisdiction (but excluding any connection arising solely from Agent's or any
Lender's execution or enforcement of, or performance of, its obligations
hereunder or under any of the other Loan Documents, or the Intercreditor
Agreement or the Lender Agreement).
"Federal Funds Effective Rate" shall mean, for any day, the rate per annum
(rounded upward to the nearest one one-hundredth of one percent (1/100 of 1%))
announced by the Federal Reserve Bank of New York (or any successor) on such day
as being the weighted average of the rates on overnight federal funds
transactions arranged by federal funds brokers on the previous trading day, as
computed and announced by such Federal Reserve Bank (or any successor) in
substantially the same manner as such Federal Reserve Bank computes and
announces the weighted average it refers to as the "Federal Funds Effective
Rate" as of the Closing Date.
17
"Financial Officer" shall mean any of the following officers: chief
executive officer, president, chief financial officer or treasurer. Unless
otherwise qualified, all references to a Financial Officer in this Agreement
shall refer to a Financial Officer of US Borrower.
"Fixed Rate Loan" shall mean a US Eurodollar Loan, an Alternate Currency
Loan, a Canadian Eurodollar Loan or a CAD CDOR Loan.
"Fronting Lender" shall mean, as to any Letter of Credit transaction
hereunder, Agent as issuer of the Letter of Credit, or, in the event that Agent
either shall be unable to issue or shall agree that another US Lender may issue,
a Letter of Credit, such other US Lender as shall agree to issue the Letter of
Credit in its own name, but on behalf of the US Lenders hereunder.
"GAAP" shall mean generally accepted accounting principles in the United
States as then in effect, which shall include the official interpretations
thereof by the Financial Accounting Standards Board, applied on a basis
consistent with the past accounting practices and procedures of US Borrower;
provided that, when used with respect to any Company organized under the laws of
Canada, "GAAP" shall mean generally accepted accounting principles in Canada as
approved by the Canadian Institute of Chartered Accountants in effect from time
to time applied on a basis consistent with the past accounting practices and
procedures of such Company.
"Governmental Authority" shall mean any nation or government, any state,
province or territory or other political subdivision thereof, any governmental
agency, department, authority, instrumentality, regulatory body, court, central
bank or other governmental entity exercising executive, legislative, judicial,
taxing, regulatory or administrative functions of or pertaining to government,
any securities exchange and any self-regulatory organization.
"Guarantor" shall mean a Person that shall have pledged its credit or
property in any manner for the payment or other performance of the indebtedness,
contract or other obligation of another and includes (without limitation) any
guarantor (whether of payment or of collection), surety, co-maker, endorser or
Person that shall have agreed conditionally or otherwise to make any purchase,
loan or investment in order thereby to enable another to prevent or correct a
default of any kind.
"Guarantor of Payment" shall mean MIX, which is executing and delivering a
Guaranty of Payment on the Closing Date, or any other Person that shall deliver
a Guaranty of Payment to Agent subsequent to the Closing Date.
"Guaranty of Payment" shall mean the Parent Guaranty of Payment and each
other Guaranty of Payment executed and delivered on or after the Closing Date in
connection with this Agreement, as the same may from time to time be amended,
restated or otherwise modified.
"Hedge Agreement" shall mean any (a) hedge agreement, interest rate swap,
basis swap agreement, cap, collar or floor agreement, or other interest rate
management device (including forward rate agreements) entered into by a Company
with any Person in connection with any Indebtedness of such Company; (b)
currency swap agreement, forward currency purchase agreement or similar
arrangement or agreement designed to protect against fluctuations in
18
currency exchange rates entered into by a Company with any Person; or (c)
forward commodity purchase agreement or similar agreement or arrangement
designed to protect against fluctuations in raw material or other commodity
prices entered into by a Company with any Person.
"Indebtedness" shall mean, for any Company (excluding in all cases trade
payables payable in the ordinary course of business by such Company), without
duplication, (a) all obligations to repay borrowed money, direct or indirect,
incurred or assumed, (b) all obligations for the deferred purchase price of
capital assets, (c) all obligations under conditional sales or other title
retention agreements, (d) all obligations (contingent or otherwise) under any
letter of credit or banker's acceptance, (e) all net obligations (on a
mark-to-market basis) under any currency swap agreement, interest rate swap,
cap, collar or floor agreement or other interest rate management device or any
Hedge Agreement, (f) all synthetic leases, (g) all capital lease obligations
that have been or should be capitalized on the books of such Company in
accordance with GAAP, (h) all obligations of such Company with respect to asset
securitization financing programs, (i) all obligations to advance funds to, or
to purchase assets, property or services from, any other Person in order to
maintain the financial condition of such Person, (j) any other transaction
(including forward sale or purchase agreements) having the commercial effect of
a borrowing of money entered into by such Company to finance its operations or
capital requirements, and (k) any guaranty of any obligation described in
subpart (a) through (j) hereof.
"Intercreditor Agreement" shall mean the Intercreditor Agreement, dated as
of the Closing Date among Agent, for the benefit of and on behalf of the
Lenders, and the Noteholders, as the same may from time to time be amended,
restated or otherwise modified.
"Interest Adjustment Date" shall mean the last day of each Interest
Period.
"Interest Period" shall mean:
(a) with respect to any US Fixed Rate Loan, the period commencing on
the date such US Fixed Rate Loan is made and ending on the last day of
such period, as selected by US Borrower pursuant to the provisions hereof,
and, thereafter (unless, with respect to a US Eurodollar Loan, such US
Fixed Rate Loan is converted to a US Base Rate Loan), each subsequent
period commencing on the day after the last day of the immediately
preceding Interest Period and ending on the last day of such period, as
selected by US Borrower pursuant to the provisions hereof. The duration of
each Interest Period for a US Fixed Rate Loan shall be one month, two
months, three months or six months (or, if available from all of the US
Lenders, as determined by Agent and the US Lenders, in their sole but
reasonable discretion, twelve months), in each case as US Borrower may
select upon notice, as set forth in Section 2.6 hereof; provided that (i)
if US Borrower shall fail to so select the duration of any Interest Period
for a US Eurodollar Loan at least three Business Days prior to the
Interest Adjustment Date applicable to such US Eurodollar Loan, US
Borrower shall be deemed to have converted such US Fixed Rate Loan to a US
Base Rate Loan at the end of the then current Interest Period; and (ii)
each Alternate Currency Loan must be repaid on the last day of the
Interest Period applicable thereto; and
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(b) with respect to a Canadian Fixed Rate Loan, the period
commencing on the date such Canadian Fixed Rate Loan is made and ending on
the last day of such period, as selected by Canadian Borrower pursuant to
the provisions hereof, and, thereafter (unless such Canadian Fixed Rate
Loan is converted to a Canadian Base Rate Loan), each subsequent period
commencing on the day after the last day of the immediately preceding
Interest Period and ending on the last day of such period, as selected by
Canadian Borrower pursuant to the provisions hereof. The duration of each
Interest Period for a Canadian Fixed Rate Loan shall be one month, two
months, three months or six months (or, if available from all of the
Canadian Lenders, as determined by Agent and the Canadian Lenders, in
their sole but reasonable discretion, twelve months), in each case as
Canadian Borrower may select upon notice, as set forth in Section 2.6
hereof; provided that (i) if Canadian Borrower shall fail to so select the
duration of any Interest Period at least three Business Days prior to the
Interest Adjustment Date applicable to such Canadian Fixed Rate Loan,
Canadian Borrower shall be deemed to have converted such Canadian Fixed
Rate Loan to a Canadian Base Rate Loan at the end of the then current
Interest Period and (ii) each Canadian Eurodollar Loan must be repaid on
the last day of the Interest Period applicable thereto.
"Largest Other Shareholder" shall mean, with respect to Voting Shares of
US Borrower having Special Voting Power or Ordinary Voting Power, the person (as
such term is used in Rule 13d-5 under the Exchange Act as in effect on the
Closing Date) or related persons constituting a group (as such term is used in
Rule 13d-5 under the Exchange Act as in effect on the Closing Date), other than
the Smucker Family, possessing Voting Shares of US Borrower with the greatest
Special Voting Power or the greatest Ordinary Voting Power, as the case may be.
"Lender Agreement" shall mean that certain Lender Agreement, dated as of
the Closing Date, between Agent, on behalf of the US Lenders, and Canadian
Funding Agent, on behalf of the Canadian Lenders, as the same may from time to
time be amended, restated or otherwise modified.
"Lease Rentals" shall mean for any period, the sum of the minimum amount
of rental and other obligations required to be paid during such period by a
Company as lessee under all leases of real or personal property (other than
capital leases), excluding any amounts required to be paid by the lessee
(whether or not therein designated as rental or additional rental) (a) that are
on account of maintenance and repairs, insurance, taxes, assessments, water
rates and similar charges, or (b) that are based on profits, revenues or sales
realized by the lessee from the leased property or otherwise based on the
performance of the lessee.
"Letter of Credit" shall mean a commercial documentary letter of credit or
standby letter of credit that shall be issued by the Fronting Lender for the
account of US Borrower, including amendments thereto, if any, and shall have an
expiration date no later than the earlier of (a) one year after its date of
issuance, or (b) thirty (30) days prior to the last day of the Commitment
Period.
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"Letter of Credit Commitment" shall mean the commitment of the Fronting
Lender, on behalf of the US Lenders, to issue Letters of Credit in an aggregate
face amount of up to Twenty-Five Million Dollars ($25,000,000).
"Letter of Credit Exposure" shall mean, at any time, the Dollar Equivalent
of the sum of (a) the aggregate undrawn face amount of all issued and
outstanding Letters of Credit, and (b) the aggregate of the draws made on
Letters of Credit that have not been reimbursed by US Borrower or converted to a
US Revolving Loan pursuant to Section 2.2(b) hereof.
"Leverage Ratio" shall mean, at any time, as determined on a Consolidated
basis and in accordance with GAAP, the ratio of (a) Consolidated Total
Indebtedness (for the most recently completed fiscal quarter of US Borrower) to
(b) Consolidated EBITDA (for the most recently completed four fiscal quarters of
US Borrower).
"Lien" shall mean any mortgage, security interest, lien (statutory or
other), deemed trust, charge, assignment, hypothecation, encumbrance on, pledge
or deposit of, or conditional sale, leasing (other than operating leases), sale
with a right of redemption or other title retention agreement and any
capitalized lease with respect to any property (real or personal) or asset.
"Loan" shall mean a US Revolving Loan or a US Swing Loan granted to US
Borrower by the US Lenders in accordance with Section 2.2(a) or 2.2(c) hereof,
or a Canadian Revolving Loan or a Canadian Swing Loan granted to Canadian
Borrower by the Canadian Lenders in accordance with Section 2.3(a) or 2.3(b)
hereof.
"Loan Documents" shall mean, collectively, this Agreement, each Note, each
Guaranty of Payment, all documentation relating to each Letter of Credit, the
Agent Fee Letter and the Closing Fee Letter, as any of the foregoing may from
time to time be amended, restated or otherwise modified or replaced, and any
other document delivered pursuant thereto.
"Long-Term Funded Debt" shall mean, with respect to any Person, all Debt
of such Person which by its terms or by the terms of any instrument or agreement
relating thereto matures, or which is otherwise payable or unpaid, one year or
more from, or is directly or indirectly renewable or extendible at the option of
the obligor in respect thereof to a date one year or more (including, without
limitation, an option of such obligor under a revolving credit or similar
agreement obligating the lender or lenders to extend credit over a period of one
year or more) from, the date of the creation thereof.
"Material Adverse Effect" shall mean a material adverse effect on (a) the
business, operations, affairs, financial condition, assets or property of the
Companies taken as a whole, (b) the ability of US Borrower or Canadian Borrower
to perform its obligations under this Agreement or any of the other Loan
Documents, (c) the ability of any Guarantor of Payment to perform its
obligations under its Guaranty of Payment, or (d) the validity or enforceability
of this Agreement or any of the other Loan Documents.
"Material Indebtedness Agreement" shall mean any debt instrument, lease
(capital, operating or otherwise), guaranty, contract, commitment, agreement or
other arrangement
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evidencing any Indebtedness of any Company or the Companies in excess of the
amount of Fifteen Million Dollars ($15,000,000).
"Maximum Amount" shall mean, for each Lender, the amount set forth
opposite such Lender's name under the column headed "Maximum Amount" as set
forth on Schedule 1 hereto, subject to decreases determined pursuant to Section
2.9(d) hereof and assignments of interests pursuant to Section 10.10 hereof;
provided, however, that the Maximum Amount for the US Swing Line Lender shall
exclude the US Swing Line Commitment and the Maximum Amount for the Canadian
Swing Line Lender shall exclude the Canadian Swing Line Commitment.
"Maximum Canadian Revolving Amount" shall mean the CAD Equivalent of
Seventy Million Dollars ($70,000,000), as such amount may be reduced pursuant to
Section 2.9(d) hereof.
"Maximum US Revolving Amount" shall mean One Hundred Ten Million Dollars
($110,000,000), as such amount may be reduced pursuant to Section 2.9(d) hereof.
"MIX" shall mean International Multifoods Corporation, a Delaware
corporation, formerly known as MIXAcquisition Corporation, and its successors
and assigns.
"Multiemployer Plan" shall mean a Pension Plan that is subject to the
requirements of Subtitle E of Title IV of ERISA.
"Net Proceeds Amount" shall mean, with respect to any sale, lease,
transfer or other disposition of any property by any Person, an amount equal to
the difference of (a) the aggregate amount of the consideration (valued at the
fair market value of such consideration at the time of the consummation of such
sale, lease, transfer or other disposition) received by such Person in respect
of such sale, lease, transfer or other disposition, minus (b) all ordinary and
reasonable out-of-pocket costs and expenses actually incurred by such Person in
connection with such sale, lease, transfer or other disposition.
"Note" shall mean a Revolving Credit Note or a Swing Line Note, or any
other promissory note delivered pursuant to this Agreement.
"Note Purchase Agreement" shall mean, collectively, (a) those certain Note
Purchase Agreements, each dated as of June 16, 1999, among US Borrower and each
of the Purchasers (as defined therein), as amended through the date of this
Agreement, relating to $75,000,000 of 6.77% Senior Notes due June 1, 2009; (b)
those certain Note Purchase Agreements, each dated as of August 23, 2000, among
US Borrower and each of the Purchasers (as defined therein), as amended through
the date of this Agreement, relating to (i) $17,000,000 of 7.70% Series A Senior
Notes due September 1, 2005, (ii) $33,000,000 of 7.87% Series B Senior Notes due
September 1, 2007, and (iii) $10,000,000 of 7.94% Series C Senior Notes due
September 1, 2010; (c) that certain Note Purchase Agreement, dated as of May 27,
2004, among US Borrower and each of the Purchasers (as defined therein),
relating to $100,000,000 of 4.78% Senior Notes due June 1, 2014; and (d) any
other similar public or private debt instrument or agreement that
22
meets the definition of Material Indebtedness Agreement; as each of the
foregoing may from time to time be further amended, restated or otherwise
modified or replaced.
"Noteholders" shall mean the Purchasers as respectively defined in the
Note Purchase Agreements under the Note Purchase Agreements.
"Notice of Loan" shall mean a Notice of Loan in the form of the attached
Exhibit E.
"Obligations" shall mean, collectively, (a) all Indebtedness and other
obligations incurred by Borrowers to Agent, the Fronting Lender, the US Swing
Line Lender, the Canadian Swing Line Lender or any Lender pursuant to this
Agreement, and includes the principal of and interest on all Loans and all
obligations pursuant to Letters of Credit, (b) each extension, renewal or
refinancing thereof in whole or in part, and (c) the facility fees, utilization
fees, the other fees and any prepayment fees payable hereunder, and all fees and
charges in connection with Letters of Credit.
"Ordinary Voting Power" shall mean the Voting Power attributable to all
Voting Shares of US Borrower entitled to voting rights for purposes of electing
directors of US Borrower.
"Organizational Documents" shall mean, with respect to any Person (other
than an individual), such Person's Articles (Certificate) of Incorporation,
operating agreement or equivalent formation documents, and Regulations (Bylaws),
or equivalent governing documents, and any amendments to any of the foregoing.
"Other Taxes" shall mean any and all present or future stamp or
documentary taxes or any other excise, ad valorem or property taxes, goods and
services taxes, harmonized sales taxes and other sales taxes, use taxes, value
added taxes, charges or similar taxes or levies arising from any payment made
hereunder or from the execution, delivery or enforcement of, or otherwise with
respect to, this Agreement, any other Loan Document, the Intercreditor Agreement
or the Lender Agreement.
"Overall Commitment Percentage" shall mean a Lender's percentage of the
Total Commitment Amount based upon such Lender's Maximum Amount of the Total
Commitment Amount.
"Parent Guaranty of Payment" shall mean the Guaranty of Payment executed
and delivered by US Borrower with respect to Canadian Borrower, as the same may
from time to time be amended, restated or otherwise modified.
"PBGC" shall mean the Pension Benefit Guaranty Corporation, or its
successor.
"Pension Plan" shall mean an ERISA Plan that is a "pension plan" (within
the meaning of ERISA Section 3(2)).
"Person" shall mean any individual, sole proprietorship, partnership,
joint venture, unincorporated organization, corporation, limited liability
company, unlimited liability company,
23
institution, trust, estate, government or other agency or political subdivision
thereof or any other entity.
"Prime Rate" shall mean the interest rate established from time to time by
Agent as Agent's prime rate, whether or not such rate shall be publicly
announced; the Prime Rate may not be the lowest interest rate charged by Agent
for commercial or other extensions of credit. Each change in the Prime Rate
shall be effective immediately from and after such change.
"Property Reinvestment Application" shall mean, with respect to any sale,
lease, transfer or other disposition of property, the satisfaction of each of
the following conditions:
(a) an amount equal to the Net Proceeds Amount with respect to such
sale, lease, transfer or other disposition shall have been applied to the
acquisition by the Company making such sale, lease, transfer or other
disposition, of property that, upon such acquisition, is unencumbered by
any Lien (other than Liens described in Section 5.9(a) through (f) hereof)
and that:
(i) constitutes property that is (A) properly classifiable
under GAAP as non-current to the extent that such proceeds are
derived from the sale, lease, transfer or other disposition of
property that was properly classifiable as non-current, and
otherwise properly classifiable as either current or non-current,
and (B) to be used in the ordinary course of business of such
Company, or
(ii) constitutes equity interests of a Person that shall be,
on or prior to the time of such acquisition, a Company, and that
shall invest the proceeds of such acquisition in property of the
nature described in the immediately preceding subsection (i); and
(b) US Borrower shall have delivered a certificate of a Financial
Officer to Agent identifying the property that was the subject of such
sale, lease, transfer or other disposition, the value of such property,
and the nature, terms, amount and application of the proceeds from the
sale, lease, transfer or other disposition.
"Regularly Scheduled Payment Date" shall mean the last day of each
January, April, July and October of each year.
"Related Writing" shall mean each Loan Document and any other assignment,
mortgage, security agreement, guaranty agreement, subordination agreement,
financial statement, audit report or other writing furnished by any Credit
Party, or any of its officers, to Agent or the Lenders pursuant to or otherwise
in connection with this Agreement.
"Reportable Event" shall mean a reportable event as that term is defined
in Title IV of ERISA, except actions of general applicability by the Secretary
of Labor under Section 110 of such Act.
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"Request for Extension" shall mean a notice, substantially in the form of
the attached Exhibit H.
"Required Lenders" shall mean the holders of at least fifty-one percent
(51%) of the Total Commitment Amount, or, if the US Commitment and the Canadian
Commitment shall have expired or been terminated, the holders of at least
fifty-one percent (51%), based upon each Lender's Applicable Commitment
Percentages, of the sum of (i) the aggregate principal amount outstanding on the
Loans (other than the Swing Loans), and (ii) the Letter of Credit Exposure and
the Swing Line Exposure (including, in each case, the aggregate amount of each
Lender's risk participation and funded participation in Letters of Credit and
Swing Loans).
"Requirement of Law" shall mean, as to any Person, any law, treaty, rule
or regulation or determination or policy statement or interpretation of an
arbitrator or a court or other Governmental Authority, in each case applicable
to or binding upon such Person or any of its property and having the force of
law.
"Reserve Percentage" shall mean for any day that percentage (expressed as
a decimal) that is in effect on such day, as prescribed by the Board of
Governors of the Federal Reserve System (or any successor) for determining the
maximum reserve requirement (including, without limitation, all basic,
supplemental, marginal and other reserves and taking into account any
transitional adjustments or other scheduled changes in reserve requirements) for
a member bank of the Federal Reserve System in Cleveland, Ohio, in respect of
Eurocurrency Liabilities. The Derived LIBOR Fixed Rate shall be adjusted
automatically on and as of the effective date of any change in the Reserve
Percentage.
"Revolving Credit Exposure" shall mean, at any time, the sum of (a) the US
Revolving Exposure, and (b) the Canadian Revolving Exposure.
"Revolving Credit Note" shall mean a US Revolving Credit Note or a
Canadian Revolving Credit Note.
"Revolving Loan" shall mean a US Revolving Loan or a Canadian Revolving
Loan.
"Sale/Leaseback Transaction" shall mean a transaction or series of
transactions pursuant to which a Company shall sell or transfer to any Person
(other than another Company) any property, whether now owned or hereafter
acquired, and, as part of the same transaction or series of transactions, a
Company shall rent or lease as lessee (other than pursuant to a capital lease),
or similarly acquire the right to possession or use of, such property or one or
more properties which such Company intends to use for the same purpose or
purposes as such property.
"SEC" shall mean the United States Securities and Exchange Commission, or
any governmental body or agency succeeding to any of its principle functions.
"Smucker Family" shall mean Timothy P. Smucker, Richard K. Smucker, Susan
Smucker Wagstaff and Marcella Smucker Clark, and any member of their immediate
families, heirs, legatees, descendants and blood relatives to the fifth degree
of consanguinity of such
25
individual, or any trustees or trusts (or other entity created for estate
planning purposes) established for their benefit or the benefit of the members
of their immediate families and lineal descendants.
"Special Voting Power" shall mean Voting Power attributable to those
Voting Shares of US Borrower entitled to the special voting rights set forth in
Division II, Section 2(a) of the Amended Articles of Incorporation of US
Borrower.
"Subordinated" shall mean, as applied to Indebtedness or Debt,
Indebtedness or Debt, as the case may be, that shall have been subordinated (by
written terms or written agreement being, in either case, in form and substance
satisfactory to Agent and the Required Lenders) in favor of the prior payment in
full of the Obligations.
"Subsidiary" of a Company shall mean (a) a corporation more than fifty
percent (50%) of the Voting Power of which is owned, directly or indirectly, by
such Company or by one or more other subsidiaries of such Company or by such
Company and one or more subsidiaries of such Company, (b) a partnership, limited
liability company or unlimited liability company of which such Company, one or
more other subsidiaries of such Company or such Company and one or more
subsidiaries of such Company, directly or indirectly, is a general partner or
managing member, as the case may be, or otherwise has an ownership interest
greater than fifty percent (50%) of all of the ownership interests in such
partnership, limited liability company or unlimited liability company, or (c)
any other Person (other than a corporation, partnership, limited liability
company or unlimited liability company) in which such Company, one or more other
subsidiaries of such Company or such Company and one or more subsidiaries of
such Company, directly or indirectly, has at least a majority interest in the
Voting Power or the power to elect or direct the election of a majority of
directors or other governing body of such Person.
"Swing Line Exposure" shall mean, at any time, the sum of (a) the US Swing
Line Exposure, and (b) the Canadian Swing Line Exposure.
"Swing Line Note" shall mean the US Swing Line Note or the Canadian Swing
Line Note.
"Swing Loan" shall mean a US Swing Loan or a Canadian Swing Loan.
"Swing Loan Maturity Date" shall mean, with respect to any Swing Loan, the
earlier of (a) thirty (30) days after the date such Swing Loan is made, or (b)
the last day of the Commitment Period.
"Taxes" shall mean any and all present or future taxes of any kind,
including but not limited to, levies, imposts, duties, charges, fees, deductions
or withholdings now or hereafter imposed, levied, collected, withheld or
assessed by any Governmental Authority (together with any interest, penalties,
additions to taxes or similar liabilities with respect thereto) other than
Excluded Taxes.
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"Total Commitment Amount" shall mean the principal amount of One Hundred
Eighty Million Dollars ($180,000,000) (or such lesser amount as shall be
determined pursuant to Section 2.9(d) hereof).
"US Base Rate" shall mean a rate per annum equal to the greater of (a) the
Prime Rate or (b) one-half of one percent (.50%) in excess of the Federal Funds
Effective Rate. Any change in the US Base Rate shall be effective immediately
from and after such change in the US Base Rate.
"US Base Rate Loan" shall mean a US Revolving Loan described in Section
2.2(a) hereof that shall be denominated in Dollars and on which US Borrower
shall pay interest at a rate based on the US Base Rate.
"US Commitment" shall mean the obligation hereunder of the US Lenders,
during the Commitment Period, to make Loans and issue Letters of Credit pursuant
to the US Revolving Credit Commitments, up to the Maximum US Revolving Amount.
"US Eurodollar Loan" shall mean a US Revolving Loan described in Section
2.2(a) hereof that shall be denominated in Dollars and on which US Borrower
shall pay interest at a rate based upon the Derived LIBOR Fixed Rate applicable
to Eurodollars.
"US Fixed Rate Loan" shall mean a US Eurodollar Loan or an Alternate
Currency Loan.
"US Lender" shall mean each Lender that is designated as a US Lender on
Schedule 1 hereto.
"US Revolving Credit Commitment" shall mean the obligation hereunder,
during the Commitment Period, of (a) each US Lender to make US Revolving Loans
up to the Maximum Amount for such US Lender, (b) the Fronting Lender to issue
and each US Lender to participate in Letters of Credit pursuant to the Letter of
Credit Commitment, and (c) the US Swing Line Lender to make and each US Lender
to participate in US Swing Loans pursuant to the US Swing Line Commitment.
"US Revolving Credit Note" shall mean a US Revolving Credit Note executed
and delivered pursuant to Section 2.5(a) hereof.
"US Revolving Exposure" shall mean the sum of (a) the aggregate principal
amount of all US Revolving Loans outstanding, (b) the US Swing Line Exposure,
and (c) the Letter of Credit Exposure.
"US Revolving Loan" shall mean a US Base Rate Loan, a US Eurodollar Loan
or an Alternate Currency Loan granted to US Borrower in accordance with Section
2.2(a) hereof.
"US Swing Line" shall mean the credit facility established by the US Swing
Line Lender for US Borrower in accordance with Section 2.2(c) hereof.
27
"US Swing Line Commitment" shall mean the commitment of the US Swing Line
Lender to make US Swing Loans to US Borrower up to the aggregate amount at any
time outstanding of Fifteen Million Dollars ($15,000,000).
"US Swing Line Exposure" shall mean, at any time, the aggregate principal
amount of all US Swing Loans outstanding.
"US Swing Line Lender" shall mean KeyBank National Association, as holder
of the US Swing Line Commitment.
"US Swing Line Note" shall mean the US Swing Line Note executed and
delivered pursuant to Section 2.5(b) hereof.
"US Swing Loan" shall mean a loan that shall be denominated in Dollars
granted to US Borrower by the US Swing Line Lender under the US Swing Line.
"Voting Power" shall mean, with respect to any Person, the exclusive
ability to control, through the ownership of shares of capital stock,
partnership interests, membership interests or otherwise, the election of
members of the board of directors or other similar governing body of such
Person. The holding of a designated percentage of Voting Power of a Person means
the ownership of shares of capital stock, partnership interests, membership
interests or other interests of such Person sufficient to control exclusively
the election of that percentage of the members of the board of directors or
similar governing body of such Person.
"Voting Share" shall mean a share of capital stock of any class or classes
of a Person the holders of which are ordinarily, in the absence of
contingencies, entitled to elect corporate directors (or Persons performing
similar functions).
"Welfare Plan" shall mean an ERISA Plan that is a "welfare plan" within
the meaning of ERISA Section 3(l).
"Wholly-Owned Subsidiary" shall mean, with respect to any Person, any
corporation, limited liability company, unlimited liability company or other
entity, all of the securities or other ownership interest of which having
ordinary Voting Power to elect a majority of the board of directors, or other
persons performing similar functions, are at the time directly or indirectly
owned by such Person.
Section 1.2. Accounting Terms. Any accounting term not specifically
defined in this Article I shall have the meaning ascribed thereto by GAAP.
Section 1.3. Terms Generally. The foregoing definitions shall be
applicable to the singular and plurals of the foregoing defined terms.
ARTICLE II. AMOUNT AND TERMS OF CREDIT
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Section 2.1. Amount and Nature of Credit.
(a) Subject to the terms and conditions of this Agreement, the Applicable
Lenders, during the Commitment Period and to the extent hereinafter provided,
shall make Loans to Borrowers, participate in Swing Loans made by the US Swing
Line Lender to US Borrower or the Canadian Swing Line Lender to Canadian
Borrower, and issue or participate in Letters of Credit at the request of US
Borrower, in such aggregate amount as Borrowers shall request pursuant to the
Commitment; provided, however, that in no event shall the Revolving Credit
Exposure be in excess of the Total Commitment Amount.
(b) Each US Lender, for itself and not one for any other, agrees to make
US Revolving Loans, make or participate in US Swing Loans, and issue or
participate in Letters of Credit, during the Commitment Period, on such basis
that, immediately after the completion of any borrowing by US Borrower or the
issuance of a Letter of Credit:
(i) the Dollar Equivalent of the aggregate outstanding principal
amount of US Revolving Loans made by such US Lender, when combined with
such US Lender's pro rata share of the Letter of Credit Exposure and the
US Swing Line Exposure, shall not be in excess of the Maximum Amount for
such US Lender; and
(ii) the aggregate principal amount of US Revolving Loans made by
such US Lender shall represent that percentage of the aggregate principal
amount then outstanding on all US Revolving Loans that shall be such US
Lender's Applicable Commitment Percentage. Each borrowing (other than US
Swing Loans) from the US Lenders hereunder shall be made pro rata
according to the respective Applicable Commitment Percentages of the US
Lenders.
(c) Each Canadian Lender, for itself and not one for any other, agrees to
make Canadian Revolving Loans and make or participate in Canadian Swing Loans,
during the Commitment Period, on such basis that, immediately after the
completion of any borrowing by Canadian Borrower:
(i) the Dollar Equivalent of the aggregate outstanding principal
amount of Canadian Revolving Loans made by such Canadian Lender, when
combined with such Canadian Lender's pro rata share of the Canadian Swing
Line Exposure, shall not be in excess of the Maximum Amount for such
Canadian Lender; and
(ii) the aggregate principal amount of Canadian Revolving Loans made
by such Canadian Lender shall represent that percentage of the aggregate
principal amount then outstanding on all Canadian Revolving Loans that
shall be such Canadian Lender's Applicable Commitment Percentage. Each
borrowing (other than Canadian Swing Loans) from the Canadian Lenders
hereunder shall be made pro rata according to the respective Applicable
Commitment Percentages of the Canadian Lenders.
(d) The Loans may be made as US Revolving Loans as described in Section
2.2(a) hereof, Canadian Revolving Loans as described in Section 2.3(a) hereof,
US Swing Loans as
29
described in Section 2.2(c) hereof, Canadian Swing Loans as described in Section
2.3(b) hereof, and Letters of Credit may be issued in accordance with Section
2.2(b) hereof.
Section 2.2. US Revolving Credit.
(a) US Revolving Loans. Subject to the terms and conditions of this
Agreement, during the Commitment Period, the US Lenders shall make a US
Revolving Loan or US Revolving Loans to US Borrower in such amount or amounts as
US Borrower may from time to time request, but not exceeding in the aggregate
principal amount at any time outstanding hereunder the Maximum US Revolving
Amount, when such US Revolving Loans are combined with the Letter of Credit
Exposure and the US Swing Line Exposure; provided, however, that US Borrower
shall not request any Alternate Currency Loan (and the US Lenders shall not be
obligated to make an Alternate Currency Loan) if, after giving effect thereto,
the Alternate Currency Exposure would exceed the Alternate Currency Maximum
Amount. US Borrower shall have the option, subject to the terms and conditions
set forth herein, to borrow US Revolving Loans, maturing on the last day of the
Commitment Period, by means of any combination of US Base Rate Loans, US
Eurodollar Loans or Alternate Currency Loans. With respect to each Alternate
Currency Loan, subject to the other provisions of this Agreement, US Borrower
shall receive all of the proceeds of such Alternate Currency Loan in one
Alternate Currency and repay such Alternate Currency Loan in the same Alternate
Currency. Subject to the provisions of this Agreement, US Borrower shall be
entitled under this Section 2.2(a) to borrow funds, repay the same in whole or
in part and re-borrow hereunder at any time and from time to time during the
Commitment Period.
(b) Letters of Credit.
(i) Generally. Subject to the terms and conditions of this
Agreement, during the Commitment Period, the Fronting Lender shall, in its
own name, on behalf of the US Lenders, issue such Letters of Credit for
the account of US Borrower and any other Company (with US Borrower being
liable to the US Lenders for reimbursement of such Letters of Credit), as
US Borrower may from time to time request. US Borrower shall not request
any Letter of Credit (and the Fronting Lender shall not be obligated to
issue any Letter of Credit) if, after giving effect thereto, (A) the
Letter of Credit Exposure would exceed the Letter of Credit Commitment,
(B) the US Revolving Credit Exposure would exceed the Maximum US Revolving
Amount, or (C) with respect to a request for a Letter of Credit to be
issued in an Alternate Currency, the Alternate Currency Exposure would
exceed the Alternate Currency Maximum Amount. The issuance of each Letter
of Credit shall confer upon each US Lender the benefits and liabilities of
a participation consisting of an undivided pro rata interest in the Letter
of Credit to the extent of such US Lender's Applicable Commitment
Percentage.
(ii) Request for Letter of Credit. Each request for a Letter of
Credit shall be delivered to Agent (and to the Fronting Lender, if the
Fronting Lender is a Lender other than Agent) by an Authorized Officer not
later than 11:00 A.M. (Eastern time) three Business Days prior to the day
upon which the Letter of Credit is to be issued. Each such request shall
be in a form acceptable to Agent (and the Fronting Lender, if the Fronting
30
Lender is a Lender other than Agent) and shall specify the face amount
thereof, whether such Letter of Credit shall be a commercial documentary
or a standby Letter of Credit, the account party, the beneficiary, the
intended date of issuance, the expiry date thereof, the Alternate Currency
or Canadian Dollars, if other than Dollars are requested, and the nature
of the transaction to be supported thereby. Concurrently with each such
request, US Borrower shall execute and deliver to the Fronting Lender an
appropriate application and agreement, being in the standard form of the
Fronting Lender for such letters of credit, as amended to conform to the
provisions of this Agreement if required by Agent. Agent shall give the
Fronting Lender and each US Lender notice of each such request for a
Letter of Credit.
(iii) Commercial Documentary Letters of Credit. With respect to each
Letter of Credit that shall be a commercial documentary letter of credit
and the drafts thereunder, US Borrower agrees to (A) pay to Agent, for the
pro rata benefit of the US Lenders, a non-refundable commission based upon
the face amount of such Letter of Credit, which shall be paid quarterly in
arrears, on each Regularly Scheduled Payment Date, at a rate per annum
equal to the Applicable Margin (in effect on the date such payment is to
be made) times the face amount of such Letter of Credit; (B) pay to Agent,
for the sole benefit of the Fronting Lender, an additional Letter of
Credit fee, which shall be paid on the date that any draw shall be made on
such Letter of Credit, at the rate of one-eighth percent (1/8%) of the
amount drawn under such Letter of Credit; and (C) pay to Agent, for the
sole benefit of the Fronting Lender, such other issuance, amendment,
negotiation, draw, acceptance, telex, courier, postage and similar
transactional fees as are generally charged by the Fronting Lender under
its fee schedule as in effect from time to time.
(iv) Standby Letters of Credit. With respect to each Letter of
Credit that shall be a standby letter of credit and the drafts thereunder,
if any, US Borrower agrees to (A) pay to Agent, for the pro rata benefit
of the US Lenders, a non-refundable commission based upon the face amount
of such Letter of Credit, which shall be paid quarterly in arrears, on
each Regularly Scheduled Payment Date, at a rate per annum equal to the
Applicable Margin (in effect on the date such payment is to be made) times
the face amount of such Letter of Credit; (B) pay to Agent, for the sole
benefit of the Fronting Lender, an additional Letter of Credit fee, which
shall be paid on each date that such Letter of Credit shall be issued,
amended or renewed at the rate of one-eighth percent (1/8%) of the face
amount of such Letter of Credit; and (C) pay to Agent, for the sole
benefit of the Fronting Lender, such other issuance, amendment,
negotiation, draw, acceptance, telex, courier, postage and similar
transactional fees as are generally charged by the Fronting Lender under
its fee schedule as in effect from time to time.
(v) Refunding of Letters of Credit with Revolving Loans. Whenever a
Letter of Credit shall be drawn, US Borrower shall immediately reimburse
the Fronting Lender for the amount drawn. In the event that the amount
drawn shall not have been reimbursed by US Borrower within one Business
Day of the drawing of such Letter of Credit, at the sole option of Agent
(and the Fronting Lender, if the Fronting Lender is a Lender other than
Agent), US Borrower shall be deemed to have requested a US
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Revolving Loan, subject to the provisions of Sections 2.2(a) and 2.6
hereof (other than the requirement set forth in Section 2.6(d) hereof), in
the amount drawn. Such US Revolving Loan shall be evidenced by the US
Revolving Credit Notes (or, if a US Lender has not requested a US
Revolving Credit Note, by the records of Agent and such US Lender). Each
US Lender agrees to make a US Revolving Loan on the date of such notice,
subject to no conditions precedent whatsoever. Each US Lender acknowledges
and agrees that its obligation to make a US Revolving Loan pursuant to
Section 2.2(a) hereof when required by this subsection (v) shall be
absolute and unconditional and shall not be affected by any circumstance
whatsoever, including, without limitation, the occurrence and continuance
of a Default or Event of Default, and that its payment to Agent, for the
account of the Fronting Lender, of the proceeds of such US Revolving Loan
shall be made without any offset, abatement, recoupment, counterclaim,
withholding or reduction whatsoever and whether or not the US Revolving
Credit Commitment of such US Lender shall have been reduced or terminated.
US Borrower irrevocably authorizes and instructs Agent to apply the
proceeds of any borrowing pursuant to this subsection (v) to reimburse, in
full (other than the Fronting Lender's pro rata share of such borrowing),
the Fronting Lender for the amount drawn on such Letter of Credit. Each
such US Revolving Loan shall be deemed to be a US Base Rate Loan unless
otherwise requested by and available to US Borrower hereunder. Each US
Lender is hereby authorized to record on its records relating to its US
Revolving Credit Note (or, if such US Lender has not requested a US
Revolving Credit Note, its records relating to US Revolving Loans) such US
Lender's pro rata share of the amounts paid and not reimbursed on the
Letters of Credit.
(vi) Participation in Letters of Credit. If, for any reason, Agent
(or the Fronting Lender if the Fronting Lender shall be a Lender other
than Agent) shall be unable to or, in the opinion of Agent, it shall be
impracticable to, convert any Letter of Credit to a US Revolving Loan
pursuant to the preceding subsection, Agent (or the Fronting Lender if the
Fronting Lender is a Lender other than Agent) shall have the right to
request that each US Lender purchase a participation in the amount due
with respect to such Letter of Credit, and Agent shall promptly notify
each US Lender thereof (by facsimile or telephone, confirmed in writing).
Upon such notice, but without further action, the Fronting Lender hereby
agrees to grant to each US Lender, and each US Lender hereby agrees to
acquire from the Fronting Lender, an undivided participation interest in
the amount due with respect to such Letter of Credit in an amount equal to
such US Lender's Applicable Commitment Percentage of the principal amount
due with respect to such Letter of Credit. In consideration and in
furtherance of the foregoing, each US Lender hereby absolutely and
unconditionally agrees, upon receipt of notice as provided above, to pay
to Agent, for the account of the Fronting Lender, such US Lender's ratable
share of the amount due with respect to such Letter of Credit (determined
in accordance with such US Lender's Applicable Commitment Percentage).
Each US Lender acknowledges and agrees that its obligation to acquire
participations in the amount due under any Letter of Credit that is drawn
but not reimbursed by US Borrower pursuant to this subsection (vi) shall
be absolute and unconditional and shall not be affected by any
circumstance whatsoever, including, without limitation, the occurrence and
continuance of a Default or Event of Default, and that each such payment
32
shall be made without any offset, abatement, recoupment, counterclaim,
withholding or reduction whatsoever and whether or not the US Revolving
Credit Commitment of such US Lender shall have been reduced or terminated.
Each US Lender shall comply with its obligation under this subsection (vi)
by wire transfer of immediately available funds, in the same manner as
provided in Section 2.6 hereof with respect to US Revolving Loans. Each US
Lender is hereby authorized to record on its records such US Lender's pro
rata share of the amounts paid and not reimbursed on the Letters of
Credit.
(c) US Swing Loans.
(i) Generally. Subject to the terms and conditions of this
Agreement, during the Commitment Period, the US Swing Line Lender shall
make a US Swing Loan or US Swing Loans to US Borrower in such amount or
amounts as US Borrower, through an Authorized Officer, may from time to
time request; provided that US Borrower shall not request any US Swing
Loan if, after giving effect thereto, (A) the US Revolving Credit Exposure
would exceed the Maximum US Revolving Amount, or (B) the US Swing Line
Exposure would exceed the US Swing Line Commitment. Each US Swing Loan
shall be due and payable on the Swing Loan Maturity Date applicable
thereto. Each US Swing Loan shall be made in Dollars.
(ii) Refunding of US Swing Loans. If the US Swing Line Lender so
elects, by giving notice to US Borrower and the US Lenders, US Borrower
agrees that the US Swing Line Lender shall have the right, in its sole
discretion, to require that any US Swing Loan be refinanced as a US
Revolving Loan. Such US Revolving Loan shall be a US Base Rate Loan unless
otherwise requested by and available to US Borrower hereunder. Upon
receipt of such notice by US Borrower and the US Lenders, US Borrower
shall be deemed, on such day, to have requested a US Revolving Loan in the
principal amount of the US Swing Loan in accordance with Sections 2.2(a)
and 2.6 hereof (other than the requirement set forth in Section 2.6(d)
hereof). Each US Lender agrees to make a US Revolving Loan on the date of
such notice, subject to no conditions precedent whatsoever. Such US
Revolving Loan shall be evidenced by the US Revolving Credit Notes (or, if
a US Lender has not requested a US Revolving Credit Note, by the records
of Agent and such US Lender). Each US Lender acknowledges and agrees that
such US Lender's obligation to make a US Revolving Loan pursuant to
Section 2.2(a) hereof when required by this subsection (ii) is absolute
and unconditional and shall not be affected by any circumstance
whatsoever, including, without limitation, the occurrence and continuance
of a Default or Event of Default, and that its payment to Agent, for the
account of the US Swing Line Lender, of the proceeds of such US Revolving
Loan shall be made without any offset, abatement, recoupment,
counterclaim, withholding or reduction whatsoever and whether or not the
US Revolving Credit Commitment of such US Lender shall have been reduced
or terminated. US Borrower irrevocably authorizes and instructs Agent to
apply the proceeds of any borrowing pursuant to this subsection (ii) to
repay in full such US Swing Loan. Each US Lender is hereby authorized to
record on its records relating to its US Revolving Credit Note (or, if
such US Lender has not requested a US Revolving Credit Note, its records
relating to US Revolving Loans) such US Lender's pro rata share of the
amounts paid to refund such US Swing Loan.
33
(iii) Participation in US Swing Loans. If, for any reason, Agent is
unable to or, in the opinion of Agent, it is impracticable to, convert any
US Swing Loan to a US Revolving Loan pursuant to the preceding subsection
(ii), then on any day that a US Swing Loan is outstanding (whether before
or after the maturity thereof), Agent shall have the right to request that
each US Lender purchase a participation in such US Swing Loan, and Agent
shall promptly notify each US Lender thereof (by facsimile or telephone,
confirmed in writing). Upon such notice, but without further action, the
US Swing Line Lender hereby agrees to grant to each US Lender, and each US
Lender hereby agrees to acquire from the US Swing Line Lender, an
undivided participation interest in such US Swing Loan in an amount equal
to the Applicable Commitment Percentage of such US Lender of the principal
amount of such US Swing Loan. In consideration and in furtherance of the
foregoing, each US Lender hereby absolutely and unconditionally agrees,
upon receipt of notice as provided above, to pay to Agent, for the benefit
of the US Swing Line Lender, such US Lender's ratable share of such US
Swing Loan (determined in accordance with the Applicable Commitment
Percentage of such US Lender). Each US Lender acknowledges and agrees that
its obligation to acquire participations in US Swing Loans pursuant to
this subsection (iii) is absolute and unconditional and shall not be
affected by any circumstance whatsoever, including, without limitation,
the occurrence and continuance of a Default or an Event of Default, and
that each such payment shall be made without any offset, abatement,
recoupment, counterclaim, withholding or reduction whatsoever and whether
or not the US Revolving Credit Commitment of such US Lender shall have
been reduced or terminated. Each US Lender shall comply with its
obligation under this subsection (iii) by wire transfer of immediately
available funds, in the same manner as provided in Section 2.6 hereof with
respect to US Revolving Loans to be made by such US Lender.
Section 2.3. Canadian Revolving Credit.
(a) Canadian Revolving Credit. Subject to the terms and conditions of this
Agreement, during the Commitment Period, the Canadian Lenders shall make a
Canadian Revolving Loan or Canadian Revolving Loans to Canadian Borrower in such
amount or amounts as Canadian Borrower may from time to time request, but not
exceeding in aggregate principal amount at any time outstanding hereunder the
Maximum Canadian Revolving Amount, when such Canadian Revolving Loans are
combined with the Canadian Swing Line Exposure. Canadian Borrower shall have the
option, subject to the terms and conditions set forth herein, to borrow Canadian
Revolving Loans, maturing no later than the last day of the Commitment Period,
by means of any combination of Canadian CAD Base Rate Loans, Canadian USD Base
Rate Loans, Canadian Eurodollar Loans or CAD CDOR Loans. Subject to the
provisions of this Agreement, Canadian Borrower shall be entitled under this
Section 2.3(a) to borrow funds, repay the same in whole or in part and re-borrow
hereunder at any time and from time to time during the Commitment Period.
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(b) Canadian Swing Loans.
(i) Generally. Subject to the terms and conditions of this
Agreement, during the Commitment Period, the Canadian Swing Line Lender
shall make a Canadian Swing Loan or Canadian Swing Loans to Canadian
Borrower in such amount or amounts as Canadian Borrower, through an
Authorized Officer or as provided in Section 2.6(a)(ii) hereof, may from
time to time request; provided that Canadian Borrower shall not request
any Canadian Swing Loan if, after giving effect thereto, (A) the Canadian
Revolving Credit Exposure would exceed the Maximum Canadian Revolving
Amount, or (B) the Canadian Swing Line Exposure would exceed the Canadian
Swing Line Commitment. Each Canadian Swing Loan shall be due and payable
on the Swing Loan Maturity Date applicable thereto. Each Canadian Swing
Loan shall be made in Dollars or Canadian Dollars.
(ii) Refunding of Canadian Swing Loans. If the Canadian Swing Line
Lender so elects, by giving notice to Canadian Borrower and the Canadian
Lenders, Canadian Borrower agrees that the Canadian Swing Line Lender
shall have the right, in its sole discretion, to require that any Canadian
Swing Loan be refinanced as a Canadian Revolving Loan. Such Canadian
Revolving Loan shall be a Canadian Base Rate Loan unless otherwise
requested by and available to Canadian Borrower hereunder. Upon receipt of
such notice by Canadian Borrower and the Canadian Lenders, Canadian
Borrower shall be deemed, on such day, to have requested a Canadian
Revolving Loan in the principal amount of the Canadian Swing Loan in
accordance with Sections 2.3(a) and 2.6 hereof (other than the requirement
set forth in Section 2.6(d) hereof). Each Canadian Lender agrees to make a
Canadian Revolving Loan on the date of such notice, subject to no
conditions precedent whatsoever. Such Canadian Revolving Loan shall be
evidenced by the Canadian Revolving Credit Notes (or, if a Canadian Lender
has not requested a Canadian Revolving Credit Note, by the records of
Agent or Canadian Funding Agent and such Canadian Lender). Each Canadian
Lender acknowledges and agrees that such Canadian Lender's obligation to
make a Canadian Revolving Loan pursuant to Section 2.3(a) hereof when
required by this subsection (ii) is absolute and unconditional and shall
not be affected by any circumstance whatsoever, including, without
limitation, the occurrence and continuance of a Default or Event of
Default, and that its payment to Canadian Funding Agent, for the account
of the Canadian Swing Line Lender, of the proceeds of such Canadian
Revolving Loan shall be made without any offset, abatement, recoupment,
counterclaim, withholding or reduction whatsoever and whether or not the
Canadian Revolving Credit Commitment of such Canadian Lender shall have
been reduced or terminated. Canadian Borrower irrevocably authorizes and
instructs Canadian Funding Agent to apply the proceeds of any borrowing
pursuant to this subsection (ii) to repay in full such Canadian Swing
Loan. Each Canadian Lender is hereby authorized to record on its records
relating to its Canadian Revolving Credit Note (or, if such Canadian
Lender has not requested a Canadian Revolving Credit Note, its records
relating to Canadian Revolving Loans) such Canadian Lender's pro rata
share of the amounts paid to refund such Canadian Swing Loan.
35
(iii) Participation in Canadian Swing Loans. If, for any reason,
Canadian Funding Agent is unable to or, in the opinion of Canadian Funding
Agent, it is impracticable to, convert any Canadian Swing Loan to a
Canadian Revolving Loan pursuant to the preceding subsection (ii), then on
any day that a Canadian Swing Loan is outstanding (whether before or after
the maturity thereof), Canadian Funding Agent shall have the right to
request that each Canadian Lender purchase a participation in such
Canadian Swing Loan, and Canadian Funding Agent shall promptly notify each
Canadian Lender thereof (by facsimile or telephone, confirmed in writing).
Upon such notice, but without further action, the Canadian Swing Line
Lender hereby agrees to grant to each Canadian Lender, and each Canadian
Lender hereby agrees to acquire from the Canadian Swing Line Lender, an
undivided participation interest in such Canadian Swing Loan in an amount
equal to the Applicable Commitment Percentage of such Canadian Lender of
the principal amount of such Canadian Swing Loan. In consideration and in
furtherance of the foregoing, each Canadian Lender hereby absolutely and
unconditionally agrees, upon receipt of notice as provided above, to pay
to Canadian Funding Agent, for the benefit of the Canadian Swing Line
Lender, such Canadian Lender's ratable share of such Canadian Swing Loan
(determined in accordance with the Applicable Commitment Percentage of
such Canadian Lender). Each Canadian Lender acknowledges and agrees that
its obligation to acquire participations in Canadian Swing Loans pursuant
to this subsection (iii) is absolute and unconditional and shall not be
affected by any circumstance whatsoever, including, without limitation,
the occurrence and continuance of a Default or an Event of Default, and
that each such payment shall be made without any offset, abatement,
recoupment, counterclaim, withholding or reduction whatsoever and whether
or not the Canadian Revolving Credit Commitment of such Canadian Lender
shall have been reduced or terminated. Each Canadian Lender shall comply
with its obligation under this subsection (iii) by wire transfer of
immediately available funds, in the same manner as provided in Section 2.6
hereof with respect to Canadian Revolving Loans to be made by such
Canadian Lender.
Section 2.4. Interest.
(a) US Revolving Loans.
(i) US Base Rate Loan. US Borrower shall pay interest on the unpaid
principal amount of a US Base Rate Loan outstanding from time to time from
the date thereof until paid at the US Base Rate from time to time in
effect. Interest on such US Base Rate Loan shall be payable, commencing
July 31, 2004, and on each Regularly Scheduled Payment Date thereafter and
at the maturity thereof.
(ii) US Fixed Rate Loans. US Borrower shall pay interest on the
unpaid principal amount of each US Fixed Rate Loan outstanding from time
to time, fixed in advance on the first day of the Interest Period
applicable thereto through the last day of the Interest Period applicable
thereto (but subject to changes in the Applicable Margin), at the Derived
LIBOR Fixed Rate. Interest on such US Fixed Rate Loan shall be payable on
each Interest Adjustment Date with respect to an Interest Period (provided
that if an
36
Interest Period shall exceed three months, the interest must be paid every
three months, commencing three months from the beginning of such Interest
Period).
(b) US Swing Loans. US Borrower shall pay interest to Agent, for the sole
benefit of the US Swing Line Lender (and any US Lender that shall have purchased
a participation in such US Swing Loan), on the unpaid principal amount of each
US Swing Loan outstanding from time to time from the date thereof until paid at
the US Base Rate. Interest on each US Swing Loan shall be payable on the Swing
Loan Maturity Date applicable thereto. Each US Swing Loan shall bear interest
for a minimum of one day.
(c) Canadian Revolving Loans
(i) Canadian CAD Base Rate Loan. Canadian Borrower shall pay
interest on the unpaid principal amount of a Canadian CAD Base Rate Loan
outstanding from time to time from the date thereof until paid at the
Canadian CAD Base Rate from time to time in effect. Interest on such
Canadian CAD Base Rate Loan shall be payable, commencing July 31, 2004,
and on each Regularly Scheduled Payment Date thereafter and at the
maturity thereof.
(ii) Canadian USD Base Rate Loan. Canadian Borrower shall pay
interest on the unpaid principal amount of a Canadian USD Base Rate Loan
outstanding from time to time from the date thereof until paid at the
Canadian USD Base Rate from time to time in effect. Interest on such
Canadian USD Base Rate Loan shall be payable, commencing July 31, 2004,
and on each Regularly Scheduled Payment Date thereafter and at the
maturity thereof.
(iii) CAD CDOR Loans. Canadian Borrower shall pay interest on the
unpaid principal amount of each CAD CDOR Loan outstanding from time to
time, fixed in advance on the first day of the Interest Period applicable
thereto through the last day of the Interest Period applicable thereto
(but subject to changes in the Applicable Margin), at the Derived CAD
Fixed Rate. Interest on such CAD CDOR Loan shall be payable on each
Interest Adjustment Date with respect to an Interest Period (provided that
if an Interest Period shall exceed ninety (90) days, the interest must be
paid every ninety (90) days, commencing ninety (90) days from the
beginning of such Interest Period).
(iv) Canadian Eurodollar Loans. Canadian Borrower shall pay interest
on the unpaid principal amount of each Canadian Eurodollar Loan
outstanding from time to time, fixed in advance on the first day of the
Interest Period applicable thereto through the last day of the Interest
Period applicable thereto (but subject to changes in the Applicable
Margin), at the Eurodollar Rate. Interest on such Canadian Eurodollar Loan
shall be payable on each Interest Adjustment Date with respect to an
Interest Period (provided that if an Interest Period shall exceed three
months, the interest must be paid every three months, commencing three
months from the beginning of such Interest Period).
(d) Canadian Swing Loans.
37
(i) Canadian CAD Swing Loans. Canadian Borrower shall pay interest
to Canadian Funding Agent, for the sole benefit of the Canadian Swing Line
Lender (and any Canadian Lender that shall have purchased a participation
in such Canadian CAD Swing Loan), on the unpaid principal amount of each
Canadian CAD Swing Loan outstanding from time to time from the date
thereof until paid at the Canadian CAD Base Rate. Interest on each
Canadian CAD Swing Loan shall be payable on the Swing Loan Maturity Date
applicable thereto. Each Canadian CAD Swing Loan shall bear interest for a
minimum of one day.
(ii) Canadian USD Swing Loans. Canadian Borrower shall pay interest
to Canadian Funding Agent, for the sole benefit of the Canadian Swing Line
Lender (and any Canadian Lender that shall have purchased a participation
in such Canadian USD Swing Loan), on the unpaid principal amount of each
Canadian USD Swing Loan outstanding from time to time from the date
thereof until paid at the Canadian USD Base Rate. Interest on each
Canadian USD Swing Loan shall be payable on the Swing Loan Maturity Date
applicable thereto. Each Canadian USD Swing Loan shall bear interest for a
minimum of one day.
(e) Default Rate. Anything herein to the contrary notwithstanding, if an
Event of Default shall occur, upon the election of the Required Lenders, (i) the
principal of each Loan and the unpaid interest thereon shall bear interest,
until paid, at the Default Rate, (ii) the fee for the aggregate undrawn face
amount of all issued and outstanding Letters of Credit shall be increased by two
percent (2%) in excess of the rate otherwise applicable thereto, and (iii) in
the case of any other amount then due and owing from Borrowers hereunder or
under any other Loan Document, such amount shall bear interest at the Default
Rate until paid; provided that, during an Event of Default under Section 7.10
hereof, the applicable Default Rate shall apply without any election or action
on the part of Agent or any Lender.
(f) Limitation on Interest.
(i) Generally. In no event shall the rate of interest hereunder
exceed the maximum rate allowable by law. Notwithstanding anything to the
contrary contained in any Loan Document, the interest paid or agreed to be
paid under the Loan Documents shall not exceed the maximum rate of
non-usurious interest permitted by applicable Law (the "Maximum Rate"). If
Agent or any Lender shall receive interest in an amount that exceeds the
Maximum Rate, the excess interest shall be applied to the principal of the
Loans or, if it exceeds such unpaid principal, refunded to the applicable
Borrower. In determining whether the interest contracted for, charged, or
received by Agent or a Lender exceeds the Maximum Rate, such Person may,
to the extent permitted by applicable law, (A) characterize any payment
that is not principal as an expense, fee, or premium rather than interest,
(B) exclude voluntary prepayments and the effects thereof, and (C)
amortize, prorate, allocate, and spread in equal or unequal parts the
total amount of interest throughout the contemplated term of the
Obligations.
38
(ii) Canadian Interest. If any provision of this Agreement or any
other Loan Document would obligate Canadian Borrower to make any payment
of interest or other amount payable to (including for the account of) any
Canadian Lender in an amount, or calculated at a rate, that would be
prohibited by law or would result in a receipt by such Canadian Lender of
interest at a criminal rate (as such terms are construed under the
Criminal Code (Canada)) then, notwithstanding such provision, such amount
or rate 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 Canadian Lender
of interest at a criminal rate, such adjustment to be effected, to the
extent necessary, as follows: (A) first, by reducing the amount or rate of
interest required to be paid to such Canadian Lender under this Article
II; and (B) thereafter, by reducing any fees, commissions, premiums and
other amounts required to be paid to such Canadian Lender that would
constitute interest for purposes of Section 347 of the Criminal Code
(Canada). Notwithstanding the foregoing, and after giving effect to all
adjustments contemplated thereby, if a Canadian Lender shall have received
an amount in excess of the maximum amount permitted by that section of the
Criminal Code (Canada), then the Canadian Lender shall pay an amount equal
to such excess to Canadian Borrower. Any amount or rate of interest
referred to in this Article II with respect to the Canadian Commitment
shall be determined in accordance with generally accepted actuarial
practices and principles as an effective annual rate of interest over the
term that the Canadian Commitment 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 Commitment Period and, in the event of
a dispute, a certificate of a Fellow of the Canadian Institute of
Actuaries appointed by Agent shall be conclusive for the purposes of such
determination.
Section 2.5. Evidence of Indebtedness.
(a) US Revolving Loans. Upon the request of a US Lender, to evidence the
obligation of US Borrower to repay the US Base Rate Loans and US Fixed Rate
Loans made by such US Lender and to pay interest thereon, US Borrower shall
execute a US Revolving Credit Note in the form of the attached Exhibit A,
payable to the order of such US Lender in the principal amount of its US
Revolving Credit Commitment, or, if less, the aggregate unpaid principal amount
of US Revolving Loans made by such US Lender; provided, however, that failure of
a US Lender to request a Revolving Credit Note shall in no way detract from US
Borrower's obligations to such US Lender hereunder.
(b) US Swing Loan. The obligation of US Borrower to repay the US Swing
Loans and to pay interest thereon shall be evidenced by a US Swing Line Note of
US Borrower in the form of the attached Exhibit B, and payable to the order of
the US Swing Line Lender in the principal amount of the US Swing Line
Commitment, or, if less, the aggregate unpaid principal amount of US Swing Loans
made by the US Swing Line Lender.
(c) Canadian Revolving Loans. Upon the request of Canadian Lender, to
evidence the obligation of Canadian Borrower to repay the Canadian Base Rate
Loans and the Canadian
39
Fixed Rate Loans made by such Canadian Lender and to pay interest thereon,
Canadian Borrower shall execute a Canadian Revolving Credit Note in the form of
the attached Exhibit C, payable to the order of such Canadian Lender in the
principal amount of its Canadian Revolving Credit Commitment, or, if less, the
aggregate unpaid principal amount of Canadian Revolving Loans made by such
Canadian Lender; provided, however, that failure of a Canadian Lender to request
a Canadian Revolving Credit Note shall in no way detract from Canadian
Borrower's obligations to such Canadian Lender hereunder.
(d) Canadian Swing Loan. The obligation of Canadian Borrower to repay the
Canadian Swing Loans and to pay interest thereon shall be evidenced by a
Canadian Swing Line Note of Canadian Borrower in the form of the attached
Exhibit D, and payable to the order of the Canadian Swing Line Lender in the
principal amount of the Canadian Swing Line Commitment, or, if less, the
aggregate unpaid principal amount of Canadian Swing Loans made by the Canadian
Swing Line Lender.
Section 2.6. Notice of Credit Event; Funding of Loans.
(a) Notice of Credit Event.
(i) Generally. US Borrower, through an Authorized Officer, (or US
Borrower or Canadian Borrower with respect to Canadian Revolving Loans and
Canadian Swing Loans) shall provide to Agent (and, in addition, to
Canadian Funding Agent with respect to Canadian Revolving Loans and
Canadian Swing Loans) a Notice of Loan prior to (A) 11:00 A.M. (Eastern
time) on the proposed date of borrowing or conversion of any US Base Rate
Loan, (B) 11:00 A.M. (Eastern time) three Business Days prior to the
proposed date of borrowing, conversion or continuation of any US
Eurodollar Loan, (C) 10:00 A.M. (Eastern time) three Business Days prior
to the proposed date of borrowing of any Alternate Currency Loan, (D)
11:00 A.M. (Eastern time) on the proposed date of borrowing of any Swing
Loan, (E) 11:00 A.M. (Eastern time) on the proposed date of borrowing or
conversion of any Canadian Base Rate Loan, and (F) 11:00 A.M. (Eastern
time) three Business Days prior to the proposed date of borrowing,
conversion or continuation of any Canadian Fixed Rate Loan. US Borrower
shall comply with the notice provisions set forth in Section 2.2(b) hereof
with respect to Letters of Credit.
(ii) Overdraft Notice. Notwithstanding the provisions of subsection
(i) of this Section 2.6(a) and Section 4.1 hereof requiring a Notice of
Loan, should an overdraft occur in any account held by Canadian Borrower
at Canadian Funding Agent, Canadian Borrower shall be deemed to have
requested, and the Canadian Funding Agent shall be deemed to have made, a
Canadian Swing Loan (in Dollars or Canadian Dollars, depending on the
currency of the item causing the overdraft) on each date any overdraft
shall be outstanding in an amount equal to such overdraft (irrespective of
the amount limitation set forth in subsection (d)(vii) of this Section
2.6). Canadian Funding Agent shall promptly (but in no event later than
the next Business Day) notify Agent in writing of such Swing Loan.
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(b) Funding of Loans. Agent shall notify the US Lenders and Canadian
Funding Agent shall notify the Canadian Lenders, as appropriate, depending on
whether US Revolving Loans or Canadian Revolving Loans are requested, of the
date, amount, type of currency and Interest Period (if applicable) promptly upon
the receipt of a Notice of Loan, and, in any event, by 2:00 P.M. (Eastern time
(except with respect to Canadian Base Rate Loans, which shall be by 12:00 noon
(Eastern time)) on the date such Notice of Loan is received. On the date that
the Credit Event set forth in such Notice of Loan is to occur, each such
Applicable Lender shall provide to Agent (or the Canadian Funding Agent, as
appropriate) not later than 3:00 P.M. (Eastern time), the amount in Dollars, or,
with respect to an Alternate Currency, in the applicable Alternate Currency, or,
with respect to the Canadian Commitment, in Dollars or Canadian Dollars, in
federal or other immediately available funds, required of it. If Agent (or the
Canadian Funding Agent) shall elect to advance the proceeds of such Loan prior
to receiving funds from such Lender, Agent (or the Canadian Funding Agent, as
appropriate) shall have the right, upon prior notice to the appropriate
Borrower, to debit any account of the appropriate Borrower or otherwise receive
such amount from the appropriate Borrower, on demand, in the event that such
Lender shall fail to reimburse Agent (or the Canadian Funding Agent, as
appropriate) in accordance with this subsection. Agent (or the Canadian Funding
Agent, as appropriate) shall also have the right to receive interest from such
Lender at the Federal Funds Effective Rate (or cost of funds with respect to the
Canadian Funding Agent) in the event that such Lender shall fail to provide its
portion of the Loan on the date requested and Agent (or the Canadian Funding
Agent, as appropriate) shall elect to provide such funds.
(c) Conversion of Loans. At the request of US Borrower to Agent, subject
to the notice and other provisions of this Section 2.6, the US Lenders shall
convert a US Base Rate Loan to one or more US Eurodollar Loans at any time and
shall convert a US Eurodollar Loan to a US Base Rate Loan on any Interest
Adjustment Date applicable thereto. US Swing Loans may be converted by the US
Swing Line Lender to US Revolving Loans in accordance with Section 2.2(c)(ii)
hereof. At the request of Canadian Borrower to Canadian Funding Agent (with a
copy to Agent), subject to the notice and other provisions of this Section 2.6,
the Canadian Lenders shall convert a Canadian Base Rate Loan to one or more CAD
CDOR Loans at any time and shall convert a CAD CDOR Loan to a Canadian Base Rate
Loan on any Interest Adjustment Date applicable thereto. Canadian Swing Loans
may be converted by the Canadian Swing Line Lender to Canadian Revolving Loans
in accordance with Section 2.3(b)(ii) hereof. No Alternate Currency Loan may be
converted to a US Base Rate Loan or US Eurodollar Loan and no US Base Rate Loan
or US Eurodollar Loan may be converted to an Alternate Currency Loan. No
Canadian Eurodollar Loan may be converted to a Canadian Base Rate Loan or CAD
CDOR Loan and no Canadian Base Rate Loan or CAD CDOR Loan may be converted to a
Canadian Eurodollar Loan.
(d) Minimum Amount. Each request for:
(i) a US Base Rate Loan shall be in an amount of not less than One
Million Dollars ($1,000,000), increased by increments of One Hundred
Thousand Dollars ($100,000);
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(ii) a US Fixed Rate Loan shall be in an amount (or, with respect to
an Alternate Currency Loan, the Dollar Equivalent (or, in the discretion
of Agent, such approximately comparable amount as shall result in a
rounded number)) of not less than Two Million Five Hundred Thousand
Dollars ($2,500,000), increased by increments of Five Hundred Thousand
Dollars ($500,000) (or, with respect to an Alternate Currency Loan, the
Dollar Equivalent (in the discretion of Agent, approximately comparable as
shall result in a rounded number));
(iii) a US Swing Loan shall be in an amount not less than One
Hundred Thousand Dollars ($100,000), increased by increments of Five
Thousand Dollars ($5,000);
(iv) a Canadian Base Rate Loan shall be in an amount of not less
than the CAD Equivalent of One Million Dollars ($1,000,000), increased by
increments of One Hundred Thousand Dollars ($100,000) (or, in the
discretion of Canadian Funding Agent, such approximately comparable amount
as shall result in a rounded number of CAD);
(v) a Canadian Eurodollar Loan shall be in an amount of not less
than One Million Dollars ($1,000,000), increased by increments of One
Hundred Thousand Dollars ($100,000);
(vi) a CAD CDOR Loan shall be in an amount of not less than the CAD
Equivalent of Two Million Five Hundred Thousand Dollars ($2,500,000),
increased by increments of Five Hundred Thousand Dollars ($500,000) (or,
in the discretion of Canadian Funding Agent, such approximately comparable
amount as shall result in a rounded number of CAD); and
(vii) a Canadian Swing Loan shall be in an amount not less than One
Hundred Thousand Dollars ($100,000) (or the CAD Equivalent for Canadian
CAD Swing Loans), increased by increments of Five Thousand Dollars
($5,000) (or the CAD Equivalent for Canadian CAD Swing Loans) (or, in the
discretion of Canadian Funding Agent, such approximately comparable amount
as shall result in a rounded number of CAD).
(e) Interest Periods. At no time shall US Borrower request that US Fixed
Rate Loans be outstanding for more than ten different Interest Periods. At no
time shall Canadian Borrower request that Canadian Fixed Rate Loans be
outstanding for more than six different Interest Periods.
Section 2.7. Payment on Loans and Other Obligations.
(a) Payments Generally. Each payment made hereunder by a Credit Party
shall be made without any offset, abatement, recoupment, counterclaim,
withholding or reduction whatsoever.
(b) Payments in Canadian Dollars to Canadian Lenders. With respect to any
Canadian CAD Base Rate Loan, CAD CDOR Loan or Canadian CAD Swing Loan, all
payments
42
(including prepayments) to the Canadian Lenders of the principal of or interest
on such Canadian Revolving Loan or other payment shall be made in Canadian
Dollars. All such payments shall be remitted by Canadian Borrower to the
Canadian Funding Agent at the Designated Lending Office, for the account of the
Canadian Lenders, not later than 1:00 P.M. (Eastern time) on the due date
thereof in same day funds. Any payments received by the Canadian Funding Agent
after 1:00 P.M. (Eastern time) shall be deemed to have been made and received on
the next Business Day.
(c) Payments in Dollars to Canadian Lenders. With respect to any Canadian
USD Base Rate Loan, Canadian Eurodollar Loan or Canadian USD Swing Loan, all
payments (including prepayments) to the Canadian Lenders of the principal of or
interest on such Loan or other payment shall be made in Dollars. All such
payments shall be remitted by Canadian Borrower to the Canadian Funding Agent at
the Designated Lending Office, for the account of the Canadian Lenders, not
later than 1:00 P.M. (Eastern time) on the due date thereof in same day funds.
Any payments received by the Canadian Funding Agent after 1:00 P.M. (Eastern
time) shall be deemed to have been made and received on the next Business Day.
(d) Payments in Alternate Currency to US Lenders. With respect to any
Alternate Currency Loan or any Alternate Currency Letter of Credit, all payments
(including prepayments) to any US Lender of the principal of or interest on such
Alternate Currency Loan or Alternate Currency Letter of Credit shall be made in
the same Alternate Currency as the original US Revolving Loan or Letter of
Credit. All such payments shall be remitted by US Borrower to Agent, at the
address of Agent for notices referred to in Section 10.4 hereof, (or at such
other office or account as designated in writing by Agent to US Borrower) for
the account of the US Lenders (or the Fronting Lender) not later than 11:00 A.M.
(Eastern time) on the due date thereof in same day funds. Any payments received
by Agent after 11:00 A.M. (Eastern time) shall be deemed to have been made and
received on the next Business Day.
(e) Payments in Dollars to Agent or US Lenders. With respect to any US
Revolving Loan (other than an Alternate Currency Loan), and the utilization fee
described in Section 2.9(b) hereof, all payments (including prepayments) to
Agent of the principal of or interest on such Loan or other payment, including
but not limited to principal, interest, fees or any other amount owed by US
Borrower (or Canadian Borrower with respect to its portion of the utilization
fee described in Section 2.9(b) hereof) under this Agreement, shall be made in
Dollars. All payments described in this subsection (e) shall be remitted to
Agent at the address of Agent for notices referred to in Section 10.4 hereof for
the account of the US Lenders (or the Fronting Lender, the US Swing Line Lender
or, with respect to the utilization fees described in Section 2.9(b) hereof, the
Canadian Lenders, as appropriate) not later than 11:00 A.M. (Eastern time) on
the due date thereof in immediately available funds. Any such payments received
by Agent after 11:00 A.M. (Eastern time) shall be deemed to have been made and
received on the next Business Day.
(f) Payments to Lenders. Upon receipt by Agent or the Canadian Funding
Agent of payments hereunder, Agent (or the Canadian Funding Agent, as
appropriate) shall immediately distribute to the Applicable Lenders (except with
respect to Swing Loans, which shall be paid to the US Swing Line Lender or the
Canadian Swing Line Lender, as appropriate) their respective
43
ratable share, if any, of the amount of principal, interest, and facility and
other fees received for the account of such Lender. Payments received by Agent
(or the Canadian Funding Agent) in Dollars shall be delivered to the appropriate
Lenders in Dollars in immediately available funds and payments received by Agent
(or the Canadian Funding Agent) in Canadian Dollars shall be delivered to the
Canadian Lenders in Canadian Dollars in same day funds; provided that, if Agent
(or the Canadian Funding Agent, as appropriate) receives a payment in a currency
other than the currency in which the underlying obligation was made, Agent (or
the Canadian Funding Agent, as appropriate) shall have the right, in its sole
discretion, to convert such currency into its CAD Equivalent or Dollar
Equivalent, as applicable. Notwithstanding the preceding sentence to the
contrary, payments received by Agent in any Alternate Currency shall be
delivered to the US Lenders in such Alternate Currency in same day funds and
payments received by Canadian Funding Agent in Dollars shall be delivered to the
Canadian Lenders in Dollars in same day funds. Each Lender shall record, as
appropriate, any principal, interest or other payment, the principal amounts of
US Base Rate Loans, US Fixed Rate Loans, Canadian Base Rate Loans and Canadian
Fixed Rate Loans, the type of currency for each Loan, all prepayments and the
applicable dates, including Interest Periods, with respect to the Loans made,
and payments received by such Lender, by such method as such Lender may
generally employ; provided, however, that failure to make any such entry shall
in no way detract from the obligations of Borrowers under this Agreement or any
Note. The aggregate unpaid amount of Loans, types of Loans, Interest Periods and
similar information with respect to the Loans and Letters of Credit set forth on
the records of Agent and Canadian Funding Agent shall be rebuttably presumptive
evidence with respect to such information, including the amounts of principal,
interest and fees owing to each Lender.
(g) Timing of Payments. Whenever any payment to be made hereunder,
including, without limitation, any payment to be made on any Loan, shall be
stated to be due on a day that is not a Business Day, such payment shall be made
on the next Business Day and such extension of time shall in each case be
included in the computation of the interest payable on such Loan; provided,
however, that, with respect to any Fixed Rate Loan, if the next Business Day
shall fall in the succeeding calendar month, such payment shall be made on the
preceding Business Day and the relevant Interest Period shall be adjusted
accordingly.
Section 2.8. Prepayment.
(a) Right to Prepay. Borrowers shall have the right at any time or from
time to time to prepay, on a pro rata basis for all of the Applicable Lenders,
as appropriate, all or any part of the principal amount of the Loans then
outstanding to such Lenders from such Borrowers, as designated by Borrowers.
Such payment shall include interest accrued and unpaid on the amount so prepaid
to the date of such prepayment and any amount payable under Article III hereof
with respect to the amount being prepaid. US Borrower shall have the right, at
any time or from time to time, to prepay, for the benefit of the US Swing Line
Lender (and any US Lender that has purchased a participation in such US Swing
Loan), all or
44
any part of the principal amount of the US Swing Loans then outstanding, as
designated by US Borrower, plus interest accrued on the amount so prepaid to the
date of such prepayment. Canadian Borrower shall have the right, at any time or
from time to time, to prepay, for the benefit of the Canadian Swing Line Lender
(and any Canadian Lender that has purchased a participation in such Canadian
Swing Loan), all or any part of the principal amount of the Canadian Swing Loans
then outstanding, as designated by Canadian Borrower, plus interest accrued on
the amount so prepaid to the date of such prepayment.
(b) Notice of Prepayment. US Borrower shall give Agent irrevocable written
notice of prepayment of any US Base Rate Loan or US Swing Loan not later than
11:00 A.M. (Eastern time) on the Business Day such prepayment is to be made and
written notice of the prepayment of any US Fixed Rate Loan not later than 1:00
P.M. (Eastern time) three Business Days before the Business Day on which such
prepayment is to be made. Canadian Borrower shall give to the Canadian Funding
Agent (with a copy to Agent), irrevocable written notice of prepayment of any
Canadian Base Rate Loan or Canadian Swing Loan not later than 11:00 A.M.
(Eastern time) on the Business Day such prepayment is to be made and written
notice of the prepayment of any Canadian Fixed Rate Loan not later than 1:00
P.M. (Eastern time) three Business Days before the Business Day on which such
prepayment is to be made.
(c) Minimum Amount. Other than in the case of a mandatory payment pursuant
to Section 2.11 or Article III hereof, each prepayment of (i) a US Eurodollar
Loan shall be in the principal amount of not less than Two Million Five Hundred
Thousand Dollars ($2,500,000), (ii) an Alternate Currency Loan shall be in the
principal amount of not less than the Dollar Equivalent of Two Million Five
Hundred Thousand Dollars ($2,500,000), (iii) a Swing Loan shall be in the
principal balance of such Swing Loan, (iv) a Canadian Eurodollar Loan shall be
in the principal amount of not less than Two Million Five Hundred Thousand
Dollars ($2,500,000), and (v) a CAD CDOR Loan shall be in the principal amount
of not less than Two Million Five Hundred Thousand Canadian Dollars (CAD
2,500,000).
Section 2.9. Facility and Other Fees; Reduction of Commitment.
(a) Facility Fee.
(i) US Commitment. US Borrower shall pay to Agent, for the ratable
account of the US Lenders, as a consideration for the US Commitment, a
facility fee from the Closing Date to and including the last day of the
Commitment Period, payable quarterly, at a rate per annum equal to (A) the
Applicable Facility Fee Rate in effect on the payment date, times (B) the
average daily Maximum US Revolving Amount in effect during such quarter.
The facility fee shall be payable in arrears, on July 31, 2004 and on each
Regularly Scheduled Payment Date thereafter, and on the last day of the
Commitment Period.
(ii) Canadian Commitment. Canadian Borrower shall pay to Canadian
Funding Agent, for the ratable account of the Canadian Lenders, as a
consideration for the Canadian Commitment, a facility fee from the Closing
Date to and including the last day of the Commitment Period, payable
quarterly, at a rate per annum equal to (A) the Applicable Facility Fee
Rate in effect on the payment date, times (B) the average daily Maximum
Canadian Revolving Amount in effect during such quarter. The facility fee
shall be payable in arrears, on July 31, 2004 and on each Regularly
Scheduled Payment Date thereafter, and on the last day of the Commitment
Period.
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(b) Utilization Fee.
(i) US Utilization Fee. For each day that the Revolving Credit
Exposure exceeds fifty percent (50%) of the Total Commitment Amount, US
Borrower shall pay to Agent, for the ratable account of the US Lenders
based upon each US Lender's Overall Commitment Percentage, a utilization
fee at a rate per annum equal to (A) the Revolving Credit Exposure on that
day, times (B) the Applicable Utilization Fee Rate in effect on that date,
times (C) the fraction represented by the Maximum US Revolving Amount as
the numerator and the Total Commitment Amount as the denominator.
(ii) Canadian Utilization Fee. For each day that the Revolving
Credit Exposure exceeds fifty percent (50%) of the Total Commitment
Amount, Canadian Borrower shall pay to Agent, for the ratable account of
the Canadian Lenders based upon each Canadian Lender's Overall Commitment
Percentage, a utilization fee at a rate per annum equal to (A) the
Revolving Credit Exposure on that day, times (B) the Applicable
Utilization Fee Rate in effect on that date, times (C) the fraction
represented by the Maximum Canadian Revolving Amount as the numerator and
the Total Commitment Amount as the denominator.
The utilization fee shall be payable in arrears for any fiscal quarter for which
a utilization fee is payable, commencing July 31, 2004, and on each Regularly
Scheduled Payment Date thereafter, and on the last day of the Commitment Period.
(c) Agent Fee. US Borrower shall pay to Agent, for its sole benefit, the
fees set forth in the Agent Fee Letter.
(d) Optional Reduction of Commitment.
(i) US Commitment. US Borrower may at any time or from time to time
permanently reduce in whole or ratably in part the US Commitment of the US
Lenders hereunder to an amount not less than the then existing US
Revolving Credit Exposure, by giving Agent not fewer than three Business
Days notice of such reduction, provided that any such partial reduction
shall be in an aggregate amount, for all of the US Lenders, of not less
than Five Million Dollars ($5,000,000), increased by increments of One
Million Dollars ($1,000,000). Agent shall promptly notify each US Lender
of the date of each such reduction and such US Lender's proportionate
share thereof. After each such reduction, the facility fees payable
hereunder shall be calculated upon the Maximum US Revolving Amount as so
reduced.
(ii) Canadian Commitment. Canadian Borrower may at any time or from
time to time permanently reduce in whole or ratably in part the Canadian
Commitment of the Canadian Lenders hereunder to an amount not less than
the then existing Canadian Revolving Exposure, by giving Agent not fewer
than three Business Days notice of such reduction, provided that any such
partial reduction shall be in an aggregate amount, for all of the Canadian
Lenders, of not less than Five Million Canadian Dollars (CAD
46
5,000,000), increased by increments of One Million Canadian Dollars (CAD
1,000,000). Agent shall promptly notify each Canadian Lender of the date
of each such reduction and such Canadian Lender's proportionate share
thereof. After each such reduction, the facility fees payable hereunder
shall be calculated upon the Maximum Canadian Revolving Amount as so
reduced.
(iii) Generally. If Borrowers reduce in whole the Commitment of the
Lenders, on the effective date of such reduction (Borrowers having prepaid
in full the unpaid principal balance, if any, of the Loans, together with
all interest and facility and other fees accrued and unpaid), all of the
Notes, if Notes have been issued, shall be delivered to Agent marked
"Canceled" and Agent shall redeliver such Notes to Borrowers. Any partial
reduction in the Total Commitment Amount shall be effective during the
remainder of the Commitment Period. The US Commitment may not, at any
time, be reduced to an amount less than the then existing amount of the
Canadian Commitment.
Section 2.10. Computation of Interest and Fees.
(a) Generally. Interest on Loans and facility, utilization and other fees
and charges hereunder shall be computed on the basis of a year having three
hundred sixty (360) days and calculated for the actual number of days elapsed.
(b) Interest Act (Canada). For purposes of disclosure pursuant to the
Interest Act (Canada), the annual rates of interest or fees to which the rates
of interest or fees provided in this Agreement and the other Loan Documents (and
stated herein or therein, as applicable, to be computed on the basis of a three
hundred sixty (360) day year or any other period of time less than a calendar
year) are equivalent to the rates so determined multiplied by the actual number
of days in the applicable calendar year and divided by three hundred sixty (360)
or such other period of time, respectively.
Section 2.11. Mandatory Payment.
(a) US Revolving Credit Commitment. If, at any time, the US Revolving
Credit Exposure shall exceed the Maximum US Revolving Amount as then in effect,
US Borrower shall, as promptly as practicable, but in no event later than the
next Business Day, prepay an aggregate principal amount of the US Revolving
Loans sufficient to bring the US Revolving Credit Exposure within the Maximum US
Revolving Amount.
(b) US Swing Line Commitment. If, at any time, the US Swing Line Exposure
shall exceed the US Swing Line Commitment, US Borrower shall, as promptly as
practicable, but in no event later than the next Business Day, prepay an
aggregate principal amount of the US Swing Loans sufficient to bring the US
Swing Line Exposure within the US Swing Line Commitment.
(c) Canadian Revolving Credit Commitment. If, at any time, the Canadian
Revolving Exposure shall exceed the Maximum Canadian Revolving Amount as then in
effect, Canadian Borrower shall, as promptly as practicable, but in no event
later than the next Business Day,
47
prepay an aggregate principal amount of the Canadian Revolving Loans sufficient
to bring the Canadian Revolving Exposure within the Maximum Canadian Revolving
Amount.
(d) Canadian Swing Line Commitment. If, at any time, the Canadian Swing
Line Exposure shall exceed the Canadian Swing Line Commitment, Canadian Borrower
shall, as promptly as practicable, but in no event later than the next Business
Day, prepay an aggregate principal amount of the Canadian Swing Loans sufficient
to bring the Canadian Swing Line Exposure within the Canadian Swing Line
Commitment.
(e) Total Commitment Amount. If, at any time, the Revolving Credit
Exposure shall exceed the Total Commitment Amount as then in effect, Borrowers
shall, as promptly as practicable, but in no event later than the next Business
Day, prepay an aggregate principal amount of the Loans sufficient to bring the
Revolving Credit Exposure within the Total Commitment Amount.
Section 2.12. Appointment of US Borrower as Canadian Borrower's Agent.
Canadian Borrower hereby irrevocably appoints US Borrower as the borrowing agent
and attorney-in-fact for Canadian Borrower, which appointment shall remain in
full force and effect unless and until Agent shall have received prior written
notice signed by Canadian Borrower that such appointment has been revoked.
Canadian Borrower hereby irrevocably appoints and authorizes US Borrower (a) to
provide Agent and Canadian Funding Agent with all notices with respect to
Canadian Revolving Loans obtained for the benefit of Canadian Borrower and all
other notices and instructions under this Agreement, and (b) to take such action
as US Borrower deems appropriate on its behalf to obtain Canadian Revolving
Loans and to exercise such other powers as are reasonably incidental thereto to
carry out the purposes of this Agreement.
Section 2.13. Waivers of Borrowers. In the event that any obligation of
any Borrower under this Agreement is deemed to be an agreement by such Borrower
to answer for the debt or default of another Credit Party, each Borrower
represents and warrants that (a) no representation has been made to such
Borrower as to the creditworthiness of such other Credit Party, and (b) such
Borrower has established adequate means of obtaining from such other Credit
Party on a continuing basis, financial or other information pertaining to such
other Credit Party's financial condition. Each Borrower expressly waives, except
as expressly required under this Agreement, diligence, demand, presentment,
protest and notice of every kind and nature whatsoever, and consents that Agent,
the Lenders and any other Credit Party may deal with each other in connection
with such obligations or otherwise, or alter any contracts now or hereafter
existing between them, in any manner whatsoever, including without limitation
the renewal, extension, acceleration or changes in time for payment of any such
obligations or in the terms or conditions of any security held. Agent and the
Lenders are hereby expressly given the right, at their option, to proceed in the
enforcement of any of the Obligations independently of any other remedy or
security they may at any time hold in connection with such obligations secured
and it shall not be necessary for Agent and the Lenders to proceed upon or
against or exhaust any other security or remedy before proceeding to enforce
their rights against such Borrower. Each Borrower further subordinates any right
of subrogation, reimbursement, exoneration, contribution, indemnification,
setoff or other recourse in respect of sums paid to Agent and the Lenders by any
48
other Credit Party. Anything herein to the contrary notwithstanding, Canadian
Borrower shall not at any time be liable for the Indebtedness of US Borrower
under this Agreement.
Section 2.14. Extension of Commitment. Contemporaneously with the delivery
of the financial statements required pursuant to Section 5.3(b) hereof
(beginning with the financial statements for the fiscal year of US Borrower
ending April 30, 2005), US Borrower may deliver a Request for Extension,
requesting that the Lenders extend the maturity of the Commitment for an
additional year. Each such extension shall require the written consent of the
extending Lenders and shall be upon such terms and conditions as may be agreed
to by Agent, Borrowers and the extending Lenders; provided, however, that if all
of the Lenders shall not consent to the extension, (a) only the commitments of
the extending Lenders will be extended, and (b) US Borrower may solicit
commitments from other financial institutions to provide the commitments of the
Lenders not so extending, and provided further that the US Borrower may withdraw
the Request for Extension if fewer than all of the Lenders have extended. US
Borrower shall pay any attorneys' fees or other expenses of Agent in connection
with the documentation of any such extension, as well as such other fees as may
be agreed upon between Borrowers and Agent.
ARTICLE III. ADDITIONAL PROVISIONS RELATING
TO FIXED RATE LOANS; INCREASED CAPITAL; TAXES
Section 3.1. Requirements of Law.
(a) If, after the Closing Date, (i) the adoption of or any change in any
Requirement of Law or in the interpretation or application thereof or (ii) the
compliance by any Lender with any request or directive (whether or not having
the force of law) from any central bank or other Governmental Authority:
(A) shall subject any Lender to any tax of any kind whatsoever with
respect to this Agreement, any Letter of Credit or any Fixed Rate Loan
made by it, or change the basis of taxation of payments to such Lender in
respect thereof (except for Taxes and Excluded Taxes which are governed by
Section 3.2 hereof);
(B) shall impose, modify or hold applicable any reserve, special
deposit, compulsory loan or similar requirement against assets held by,
deposits or other liabilities in or for the account of, advances, loans or
other extensions of credit by, or any other acquisition of funds by, any
office of such Lender that is not otherwise included in the determination
of the Eurodollar Rate, an Alternate Currency Rate or the CAD Fixed Rate;
or
(C) shall impose on such Lender any other condition;
and the result of any of the foregoing is to increase the cost to such Lender of
making, converting into, continuing or maintaining Fixed Rate Loans or issuing
or participating in Letters of Credit, or to reduce any amount receivable
hereunder in respect thereof, then, in any such case, US Borrower (and Canadian
Borrower if such Loan was made to Canadian Borrower) shall pay to
49
such Lender, promptly after receipt of a written request therefor, any
additional amounts necessary to compensate such Lender for such increased cost
or reduced amount receivable. If any Lender becomes entitled to claim any
additional amounts pursuant to this subsection (a), such Lender shall promptly
notify US Borrower or Canadian Borrower, as the case may be, (with a copy to
Agent or Canadian Funding Agent, as the case may be) of the event by reason of
which it has become so entitled.
(b) If any Lender shall have determined that, after the Closing Date, the
adoption of or any change in any Requirement of Law regarding capital adequacy
or in the interpretation or application thereof or compliance by such Lender or
any corporation controlling such Lender with any request or directive regarding
capital adequacy (whether or not having the force of law) from any Governmental
Authority shall have the effect of reducing the rate of return on such Lender's
or such corporation's capital as a consequence of its obligations hereunder, or
under or in respect of any Letter of Credit, to a level below that which such
Lender or such corporation could have achieved but for such adoption, change or
compliance (taking into consideration the policies of such Lender or corporation
with respect to capital adequacy), then from time to time, upon submission by
such Lender to US Borrower or Canadian Borrower, as the case may be, (with a
copy to Agent or Canadian Funding Agent, as the case may be) of a written
request therefor (which shall include the method for calculating such amount,
which method shall be generally employed by such Lender and in the industry),
the appropriate Borrowers shall promptly pay or cause to be paid to such Lender
such additional amount or amounts as will compensate such Lender for such
reduction.
(c) A certificate as to any additional amounts payable pursuant to this
Section 3.1, submitted by any Lender to US Borrower or Canadian Borrower, as the
case may be, (with a copy to Agent or Canadian Funding Agent, as the case may
be) shall be conclusive absent manifest or demonstrable error. In determining
any such additional amounts, such Lender may use any method of averaging and
attribution that it (in its reasonable discretion) shall deem applicable. The
obligations of Borrowers pursuant to this Section 3.1 shall survive the
termination of this Agreement for one hundred eighty (180) days and the payment
of the Loans and all other amounts payable hereunder.
Section 3.2. Taxes.
(a) All payments made by any Credit Party under any Loan Document shall be
made free and clear of, and without deduction or withholding for or on account
of any Taxes or Other Taxes. If any Taxes or Other Taxes are required to be
deducted or withheld from any amounts payable to Agent, the Canadian Funding
Agent or any Lender hereunder, the amounts so payable to Agent, the Canadian
Funding Agent or such Lender shall be increased to the extent necessary to yield
to Agent, the Canadian Funding Agent or such Lender (after deducting,
withholding and payment of all Taxes and Other Taxes) interest or any such other
amounts payable hereunder at the rates or in the amounts specified in the Loan
Documents.
(b) In addition, the Credit Parties shall pay Taxes and Other Taxes to the
relevant Governmental Authority in accordance with applicable law.
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(c) Whenever any Taxes or Other Taxes are required to be withheld and paid
by a Credit Party, such Credit Party shall timely withhold and pay such taxes to
the relevant Governmental Authorities. As promptly as possible thereafter, such
Credit Party shall send to Agent for its own account or for the account of the
relevant Lender, as the case may be, a certified copy of an original official
receipt received by such Credit Party showing payment thereof or other evidence
of payment reasonably acceptable to Agent or such Lender. If such Credit Party
shall fail to pay any Taxes or Other Taxes when due to the appropriate
Governmental Authority or fails to remit to Agent the required receipts or other
required documentary evidence, such Credit Party shall indemnify Agent, the
Canadian Funding Agent and the appropriate Lenders on demand for any incremental
Taxes or Other Taxes paid or payable by Agent, the Canadian Funding Agent or
such Lender as a result of any such failure.
(d) If any Lender shall be so indemnified by a Credit Party, such Lender
shall use reasonable efforts to obtain the benefits of any refund, deduction or
credit for any taxes or other amounts with respect to the amount paid by such
Credit Party and shall reimburse such Credit Party to the extent, but only to
the extent, that such Lender shall receive a refund with respect to the amount
paid by such Credit Party or an effective net reduction in taxes or other
governmental charges (including any taxes imposed on or measured by the total
net income of such Lender) of the United States or any state or subdivision or
any other Governmental Authority thereof by virtue of any such deduction or
credit, after first giving effect to all other deductions and credits otherwise
available to such Lender. If, at the time any audit of such Lender's income tax
return is completed, such Lender determines, based on such audit, that it shall
not have been entitled to the full amount of any refund reimbursed to such
Credit Party as aforesaid or that its net income taxes shall not have been
reduced by a credit or deduction for the full amount reimbursed to such Credit
Party as aforesaid, such Credit Party, upon request of such Lender, shall
promptly pay to such Lender the amount of the refund claimed to which such
Lender shall not have been so entitled, or the amount by which the net income
taxes of such Lender shall not have been so reduced, as the case may be.
(e) Each US Lender that is not incorporated or organized in or under the
laws of the United States of America (or any state thereof) (a "Non-U.S.
Lender") shall deliver to US Borrower and Agent two copies of either U.S.
Internal Revenue Service Form W-8BEN or Form W-8ECI, or, in the case of a
Non-U.S. Lender claiming exemption from U.S. federal withholding tax under
Section 871(h) or 881(c) of the Code with respect to payments of "portfolio
interest", a statement with respect to such interest and a Form W-8BEN, or any
subsequent versions thereof or successors thereto, properly completed and duly
executed by such Non-U.S. Lender claiming complete exemption from, or a reduced
rate of, U.S. federal withholding tax on all payments by Credit Parties (other
than Canadian Borrower) under this Agreement and the other Loan Documents. Such
forms shall be delivered by each Non-U.S. Lender on or before the date it
becomes a party to this Agreement or such other Loan Document. In addition, each
Non-U.S. Lender shall deliver such forms or appropriate replacements promptly
upon the obsolescence or invalidity of any form previously delivered by such
Non-U.S. Lender. Each Non-U.S. Lender shall promptly notify US Borrower at any
time it determines that such Lender is no longer in a position to provide any
previously delivered certificate to US Borrower (or any other form of
certification adopted by the U.S. taxing authorities for such purpose).
Notwithstanding any other provision of this subsection (e), a Non-U.S. Lender
shall not be required to deliver any form
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pursuant to this subsection (e) that such Non-U.S. Lender is not legally able to
deliver due to a change in applicable law after the date of this Agreement.
(f) The agreements in this Section 3.2 shall survive the termination of
the Loan Documents and the payment of the Loans and all other amounts payable
hereunder.
Section 3.3. Funding Losses. US Borrower, and Canadian Borrower to the
extent such activity involves a Canadian Fixed Rate Loan made to Canadian
Borrower, agree to indemnify each Applicable Lender, promptly after receipt of a
written request therefor, and to hold each Applicable Lender harmless from, any
loss or expense that such Lender may sustain or incur as a consequence of (a)
default by a Borrower in making a borrowing of, conversion into or continuation
of Fixed Rate Loans after such Borrower has given a notice requesting the same
in accordance with the provisions of this Agreement, (b) default by a Borrower
in making any prepayment of or conversion from Fixed Rate Loans after such
Borrower has given a notice thereof in accordance with the provisions of this
Agreement, (c) the making of a prepayment of a Fixed Rate Loan on a day that is
not the last day of an Interest Period applicable thereto, or (d) any conversion
of a Fixed Rate Loan to a US Base Rate Loan or Canadian Base Rate Loan pursuant
to Section 3.4 hereof on a day that is not the last day of an Interest Period
applicable thereto. Such indemnification shall be in an amount equal to the
excess, if any, of (i) the amount of interest that would have accrued on the
amounts so prepaid, or not so borrowed, converted or continued, for the period
from the date of such prepayment or of such failure to borrow, convert or
continue to the last day of such Interest Period (or, in the case of a failure
to borrow, convert or continue, the Interest Period that would have commenced on
the date of such failure) at the applicable rate of interest for such Loans
provided for herein (excluding, however, the Applicable Margin included therein,
if any) over (ii) the amount of interest (as reasonably determined by such
Lender) that would have accrued to such Lender on such amount by placing such
amount on deposit for a comparable period with leading banks in the appropriate
London interbank market (or Canadian market, if applicable), along with any
administration fee customarily charged by such Lender. A certificate as to any
amounts payable pursuant to this Section 3.3 submitted to US Borrower or
Canadian Borrower, as the case may be (with a copy to Agent (and Canadian
Funding Agent, as appropriate)), by any Lender shall be conclusive absent
manifest or demonstrable error. The obligations of Borrowers pursuant to this
Section 3.3 shall survive the termination of this Agreement and the payment of
the Loans and all other amounts payable hereunder.
Section 3.4. Eurodollar Rate, Alternate Currency Rate or Canadian Fixed
Rate Lending Unlawful; Inability to Determine Rate.
(a) If any Lender shall reasonably determine (which determination
shall, upon notice thereof to US Borrower or Canadian Borrower, as the case may
be (with a copy to Agent (and Canadian Funding Agent, as appropriate)), be
conclusive and binding on Borrowers) that, after the Closing Date, (i) the
introduction of or any change in or in the generally accepted interpretation of
any law makes it unlawful, or (ii) any Governmental Authority asserts that it is
unlawful, for such Lender to make or continue any Loan as, or to convert (if
permitted pursuant to this Agreement) any Loan into, a Fixed Rate Loan, the
obligations of such Lender to make, continue or convert any such Fixed Rate Loan
shall, upon such determination, be suspended until
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such Lender shall notify Agent (and Canadian Funding Agent with respect to a
Canadian Revolving Loan) that the circumstances causing such suspension no
longer exist, and all outstanding Fixed Rate Loans payable to such Lender shall
automatically convert (if conversion is permitted under this Agreement) into a
US Base Rate Loan or Canadian Base Rate Loan, as the case may be, or be repaid
(if no conversion is permitted) at the end of the then current Interest Periods
with respect thereto or sooner, if required by law or such assertion.
(b) If Agent, Canadian Funding Agent or the Required Lenders determine
that for any reason adequate and reasonable means do not exist for determining
the Eurodollar Rate, Alternate Currency Rate or CAD Fixed Rate for any requested
Interest Period with respect to a proposed Fixed Rate Loan, or that the
Eurodollar Rate, Alternate Currency Rate or CAD Fixed Rate for any requested
Interest Period with respect to a proposed Fixed Rate Loan does not adequately
and fairly reflect the cost to the applicable Lenders of funding such Loan,
Agent or Canadian Funding Agent, as the case may be, will promptly so notify US
Borrower, or Canadian Borrower, as the case may be, and each applicable Lender.
Thereafter, the obligation of the applicable Lenders to make or maintain such
Fixed Rate Loan shall be suspended until Agent (upon the instruction of the
Required Lenders) revokes such notice. Upon receipt of such notice, US Borrower,
or Canadian Borrower, as the case may be, may revoke any pending request for a
borrowing of, conversion to or continuation of such Fixed Rate Loan or, failing
that, will be deemed to have converted such request into a request for a
borrowing of a US Base Rate Loan or Canadian Base Rate Loan, as the case may be,
in the amount specified therein.
Section 3.5. Replacement of Lenders. US Borrower or Canadian Borrower, as
the case may be, shall be permitted to replace any Lender that requests
reimbursement for amounts owing pursuant to Section 3.1 or 3.2(a), or asserts
its inability to make a Fixed Rate Loan pursuant to Section 3.4 hereof; provided
that (a) such replacement does not conflict with any Requirement of Law, (b) no
Default or Event of Default shall have occurred and be continuing at the time of
such replacement, (c) prior to any such replacement, such Lender shall have
taken no action to select a different lending office for such Lender so as to
eliminate the continued need for payment of amounts owing pursuant to Section
3.1 or 3.2(a) or, if it has taken any action, such request has still been made,
(d) the replacement financial institution shall purchase, at par, all Loans and
other amounts owing to such replaced Lender on or prior to the date of
replacement and assume all commitments and obligations of such replaced Lender,
(e) Borrowers shall be liable to such replaced Lender under Section 3.3 if any
Fixed Rate Loan owing to such replaced Lender shall be purchased other than on
the last day of the Interest Period relating thereto, (f) the replacement
financial institution, if not already a Lender, shall be reasonably satisfactory
to Agent or Canadian Funding Agent, as the case may be, (g) the replaced Lender
shall be obligated to make such replacement in accordance with the provisions of
Section 10.10 hereof (provided that Borrowers (or the succeeding Lender, if such
Lender is willing) shall be obligated to pay the assignment fee referred to
therein), and (h) until such time as such replacement shall be consummated,
Borrowers shall pay all additional amounts (if any) required pursuant to Section
3.1 or 3.2(a), as the case may be.
ARTICLE IV. CONDITIONS PRECEDENT
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Section 4.1. Conditions to Each Credit Event. The obligation of the
Lenders, the Fronting Lender, the US Swing Line Lender and the Canadian Swing
Line Lender to participate in any Credit Event shall be conditioned, in the case
of each Credit Event, upon the following:
(a) all conditions precedent as listed in Section 4.2 hereof required to
be satisfied prior to the first Credit Event shall have been satisfied or waived
in writing prior to or as of the first Credit Event;
(b) US Borrower (or Canadian Borrower as provided in Section 2.6(a)
hereof) shall have submitted a Notice of Loan (or with respect to a Letter of
Credit, complied with the provisions of Section 2.2(b) hereof) and otherwise
complied with Section 2.6 hereof;
(c) no Default or Event of Default shall then exist or immediately after
the Credit Event would exist; and
(d) each of the representations and warranties contained in Article VI
hereof shall be true in all material respects as if made on and as of the date
of the Credit Event, except to the extent that any thereof expressly relate to
an earlier date.
Each request by US Borrower or Canadian Borrower for a Credit Event shall be
deemed to be a representation and warranty by Borrowers as of the date of such
request as to the satisfaction of the conditions precedent specified in
subsections (c) and (d) above.
Section 4.2. Conditions to the First Credit Event. The obligation of the
Lenders, the Fronting Lender, the US Swing Line Lender and the Canadian Swing
Line Lender to participate in the first Credit Event is subject to Borrowers
satisfying each of the following conditions prior to or concurrently with such
Credit Event:
(a) Notes. US Borrower shall have executed and delivered to each US Lender
requesting a US Revolving Credit Note such US Lender's US Revolving Credit Note
and shall have executed and delivered to US Swing Line Lender the US Swing Line
Note. Canadian Borrower shall have executed and delivered to each Canadian
Lender requesting a Canadian Revolving Credit Note such Canadian Lender's
Canadian Revolving Credit Note and shall have executed and delivered to Canadian
Swing Line Lender the Canadian Swing Line Note.
(b) Guaranties of Payment. MIX shall have executed and delivered to Agent
a Guaranty of Payment; and US Borrower shall have executed and delivered to
Agent the Parent Guaranty of Payment.
(c) Officer's Certificate, Resolutions, Organizational Documents. Each
Credit Party shall have delivered to Agent an officer's certificate (or
comparable domestic or foreign documents) certifying the names of the officers
of such Credit Party authorized to sign the Loan Documents, together with the
true signatures of such officers and certified copies of (i) the resolutions of
the board of directors (or comparable domestic or foreign documents) of such
Credit Party evidencing approval of the execution and delivery of the Loan
Documents and the
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execution of other Related Writings to which such Credit Party is a party, and
(ii) the Organizational Documents of such Credit Party.
(d) Good Standing and Full Force and Effect Certificates. Borrowers shall
have delivered to Agent a good standing certificate or full force and effect
certificate (or comparable domestic or foreign document), for each Credit Party,
issued on or about the Closing Date by the Secretary of State in the state where
such Credit Party is incorporated or formed (or appropriate foreign official).
(e) Legal Opinion. Borrowers shall have delivered to Agent an opinion of
counsel for each Credit Party (which, with respect to US Borrower and MIX, may
be the General Counsel of US Borrower), in form and substance reasonably
satisfactory to Agent and the Lenders.
(f) Agent Fee Letter, Closing Fee Letter and Other Fees. US Borrower shall
have (i) executed and delivered to Agent the Agent Fee Letter and paid to Agent,
for its sole account, the fees stated therein, (ii) executed and delivered to
Agent the Closing Fee Letter and paid to Agent, for the benefit of the Lenders,
the fees stated therein, and (iii) paid all legal fees and expenses of Agent in
connection with the preparation and negotiation of the Loan Documents invoiced
on or prior to the date hereof.
(g) Lien Searches.
(i) US Searches. With respect to the property owned or leased by US
Borrower and MIX, US Borrower shall have caused to be delivered to Agent
(A) the results of Uniform Commercial Code lien searches, satisfactory to
Agent and the Lenders, (B) the results of federal and state tax lien and
judicial lien searches, satisfactory to Agent and the Lenders, and (C)
Uniform Commercial Code termination statements reflecting termination of
all financing statements previously filed by any Person and not expressly
permitted pursuant to Section 5.9 hereof.
(ii) Canadian Searches. With respect to property owned or leased by
Canadian Borrower, Canadian Borrower shall have caused to be delivered to
Agent the results of searches conducted under the Personal Property
Security Act in effect in each jurisdiction in Canada in which a financing
statement could perfect an interest in assets of any Credit Party
organized or incorporated in Canada (collectively, the "PPSA"), the
Register of Personal and Movable Real Rights (Quebec), Execution Acts in
relevant jurisdictions, Bank Act (Canada), Bankruptcy and Insolvency Act
(Canada) and under applicable corporate and partnership statutes then in
effect in relevant jurisdictions in Canada, all satisfactory to Agent and
the Lenders.
(h) Note Purchase Agreements. US Borrower shall have provided to Agent
copies of each of the Note Purchase Agreements and amendments thereto, and the
other loan documents executed in connection therewith, certified by a Financial
Officer as complete.
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(i) Closing Certificate. Borrowers shall have delivered to Agent and the
Lenders an officer's certificate certifying that, as of the Closing Date, (i)
all conditions precedent set forth in this Article IV have been satisfied or
waived, (ii) no Default or Event of Default exists nor immediately after the
making of the first Loan or the issuance of the first Letter of Credit will
exist, and (iii) each of the representations and warranties contained in Article
VI hereof are true and correct in all material respects as of the Closing Date.
(j) Letter of Direction. Borrowers shall have delivered to Agent a letter
of direction authorizing Agent, on behalf of the Lenders, to disburse the
proceeds of the Loans, which includes the transfer of funds under this Agreement
and wire instructions setting forth the locations to which such funds shall be
sent.
(k) No Material Adverse Change. No material adverse change, in the opinion
of Agent, shall have occurred in the financial condition, operations or
prospects of the Companies, taken as a whole, since April 30, 2004.
(l) Miscellaneous. Borrowers shall have provided to Agent, Canadian
Funding Agent and the Lenders such other items and shall have satisfied such
other conditions as may be reasonably required by Agent, Canadian Funding Agent
or the Lenders.
ARTICLE V. COVENANTS
Section 5.1. Insurance. Each Company shall (a) maintain insurance to such
extent and against such hazards and liabilities as is commonly maintained by
Persons similarly situated; and (b) within ten days of any Lender's written
request, furnish to such Lender such information about such Company's insurance
as that Lender may from time to time reasonably request, which information shall
be prepared in form and detail satisfactory to such Lender.
Section 5.2. Money Obligations. Each Company shall pay in full (a) prior
in each case to the date when penalties would attach, all taxes, assessments and
governmental charges and levies (except only those so long as and to the extent
that the same shall be contested in good faith by appropriate and timely
proceedings and for which adequate provisions have been established in
accordance with GAAP) for which it may be or become liable or to which any or
all of its properties may be or become subject; (b) all of its material wage
obligations to its employees in compliance with the Fair Labor Standards Act (29
U.S.C. Sections 206-207) or any comparable provisions, including those under
foreign laws with respect to employee source deductions, obligations and
employer obligations to its employees; and (c) all of its other material
obligations calling for the payment of money (except only those so long as and
to the extent that the same shall be contested in good faith and for which
adequate provisions have been established in accordance with GAAP) before such
payment becomes overdue, except in each case of (a), (b) and (c), as would not
have a Material Adverse Effect.
Section 5.3. Financial Statements and Information.
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(a) Quarterly Financials. Borrowers shall deliver to Agent and the
Lenders, within forty-five (45) days after the end of each of the first three
quarter-annual periods of each fiscal year of US Borrower, balance sheets of the
Companies as of the end of such period and statements of income (loss), changes
in stockholders' equity and cash flow for the quarter and fiscal year to date
periods, all prepared on a Consolidated basis, in accordance with GAAP, and in
form and detail satisfactory to Agent and the Lenders and certified by a
Financial Officer of US Borrower, it being understood and agreed that delivery
of US Borrower's 10-Q financial statements prepared in compliance with the
requirements hereof within the time period specified above shall be deemed to
satisfy the requirements of this subsection (a).
(b) Annual Audit Report. Borrowers shall deliver to Agent and the Lenders,
within ninety (90) days after the end of each fiscal year of US Borrower, an
annual audit report of the Companies for that year prepared on a Consolidated
basis, in accordance with GAAP, and in form and detail satisfactory to Agent and
the Lenders and certified by an independent public accountant reasonably
satisfactory to Agent, which report shall include balance sheets and statements
of income (loss), changes in stockholders' equity and cash-flow for that period,
it being understood and agreed that delivery of US Borrower's 10-K financial
statements prepared in compliance with the requirements hereof within the time
period specified above shall be deemed to satisfy the requirements of this
subsection (b).
(c) Compliance Certificate. Borrowers shall deliver to Agent and the
Lenders, concurrently with the delivery of the financial statements set forth in
subsections (a) and (b) above, a Compliance Certificate.
(d) Shareholder and SEC Documents. Borrowers shall deliver to Agent, as
soon as available, copies of all notices, reports, definitive proxy or other
regular or periodic reports and registration statements and other documents sent
by Borrowers to all of their shareholders generally, to all of the holders of
any of its debentures or bonds or the trustee of any indenture securing the same
or pursuant to which they are issued, or sent by Borrowers (in final form) to
any securities exchange or over the counter authority or system, or to the SEC
or any similar federal agency having regulatory jurisdiction over the issuance
of any Borrower's securities.
(e) Financial Information of Companies. Borrowers shall deliver to Agent
and the Lenders, within ten days of the written request of Agent, such other
information about the financial condition, properties and operations of any
Company as Agent may from time to time reasonably request, which information
shall be submitted in form and detail reasonably satisfactory to Agent.
Section 5.4. Financial Records. Each Company shall at all times maintain
true and complete records and books of account, including, without limiting the
generality of the foregoing, appropriate provisions for possible losses and
liabilities, all in accordance with GAAP, and at all reasonable times (during
normal business hours and upon prior notice to such Company) permit Agent and
the Lenders, or any representative thereof, to examine such Company's books and
records and to make excerpts therefrom and transcripts thereof.
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Section 5.5. Franchises; Change in Business; Maintenance of Property.
(a) Each Company (other than a Dormant Subsidiary) shall preserve and
maintain at all times its existence and its material rights and franchises
(except as otherwise permitted under Section 5.12 hereof).
(b) No Company shall engage in any business if, as a result thereof, the
general nature of the business of the Companies taken as a whole would be
substantially changed from the general nature of the business the Companies are
engaged in on the Closing Date.
(c) Each Company shall maintain and keep, or cause to be maintained and
kept, their respective properties in good repair, working order and condition
(other than ordinary wear and tear), so that the business carried on in
connection therewith may be properly conducted at all times, provided that this
Section 5.5(c) shall not prevent any Company from discontinuing the operation
and the maintenance of any of its properties if such discontinuance is desirable
in the conduct of its business and such Company has concluded that such
discontinuance would not, individually or in the aggregate, have a Material
Adverse Effect.
Section 5.6. ERISA Compliance.
(a) Generally. No Company shall incur any material accumulated funding
deficiency within the meaning of ERISA, or any material liability to the PBGC,
in connection with any ERISA Plan. Borrowers shall furnish to the Lenders (i) as
soon as possible and in any event within thirty (30) days after any Company
knows or has reason to know that any Reportable Event as to which notice is
required to be provided to the PBGC with respect to any ERISA Plan has occurred,
a statement of a Financial Officer of such Company, setting forth details as to
such Reportable Event and the action that such Company proposes to take with
respect thereto, together with a copy of the notice of such Reportable Event
given to the PBGC if a copy of such notice is available to such Company, and
(ii) promptly after receipt thereof a copy of any notice such Company, or any
member of the Controlled Group may receive from the PBGC or the Internal Revenue
Service with respect to any ERISA Plan administered by such Company; provided
that this latter clause shall not apply to notices of general application
promulgated by the PBGC or the Internal Revenue Service. Borrowers shall
promptly notify the Lenders of any material taxes assessed, against a Company by
the Internal Revenue Service with respect to any ERISA Plan. As used in this
Section 5.6, "material" means the measure of a matter of significance that shall
be determined as being an amount equal to five percent (5%) of Consolidated Net
Worth. As soon as practicable, and in any event within twenty (20) days, after
any Company shall become aware that an ERISA Event shall have occurred, such
Company shall provide Agent with notice of such ERISA Event with a certificate
by a Financial Officer of such Company setting forth the details of the event
and the action such Company or another Controlled Group member proposes to take
with respect thereto. Borrowers shall, at the request of Agent or any Lender,
deliver or cause to be delivered to Agent or such Lender, as the case may be,
true and correct copies of any documents relating to the ERISA Plan of any
Company.
(b) Canadian Pension Plans and Benefit Plans.
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(i) For each existing, or hereafter adopted, Canadian Pension Plan
and Canadian Benefit Plan, Canadian Borrower shall in a timely fashion
comply with and perform in all material respects all of its obligations
under and in respect of such Canadian Pension Plan or Canadian Benefit
Plan, including under any funding agreements and all applicable laws
(including any fiduciary, funding, investment and administration
obligations).
(ii) All employer or employee payments, contributions or premiums
required to be remitted, paid to or in respect of each Canadian Pension
Plan or Canadian Benefit Plan shall be paid or remitted by Canadian
Borrower in a timely fashion in accordance with the terms thereof, any
funding agreements and all applicable laws.
(iii) Canadian Borrower shall deliver to Agent (A) if requested by
Agent, copies of each annual and other return, report or valuation with
respect to each Canadian Pension Plan as filed with any applicable
Governmental Authority; (B) promptly after receipt thereof, a copy of any
material direction, order, notice, ruling or opinion that Canadian
Borrower may receive from any applicable Governmental Authority with
respect to any Canadian Pension Plan; and (C) notification within thirty
(30) days of any increases having a cost to Canadian Borrower in excess of
Two Hundred Fifty Thousand Dollars ($250,000) per annum in the aggregate,
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 was not previously contributing.
Section 5.7. Financial Covenants.
(a) Capitalization Ratio. US Borrower shall not suffer or permit at any
time the Capitalization Ratio to exceed 0.25 to 1.00.
(b) Consolidated Net Worth. US Borrower shall not suffer or permit at any
time the Consolidated Net Worth to be less than Two Hundred Forty Million
Dollars ($240,000,000).
Section 5.8. Borrowing.
(a) Long-Term Funded Debt. No Company shall create, incur or have
outstanding any Long-Term Funded Debt of any kind; provided that this subsection
(a) shall not apply to the following:
(i) the Loans, the Letters of Credit or any other Debt under this
Agreement;
(ii) Long-Term Funded Debt owing to a Borrower or a Wholly-Owned
Subsidiary;
(iii) any Long-Term Funded Debt incurred pursuant to the Note
Purchase Agreements;
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(iv) the Long-Term Funded Debt existing on the Closing Date, as set
forth in Schedule 5.8 hereto (and any extension, renewal or refinancing
thereof so long as the principal amount thereof shall not be increased
after the Closing Date); and
(v) any other Long-Term Funded Debt so long as, on the date such
Company becomes liable with respect to such Long-Term Funded Debt and
immediately after giving effect thereto and the concurrent retirement of
any other Long-Term Funded Debt:
(A) no Default or Event of Default shall then exist or
immediately thereafter shall being to exist;
(B) the sum of (1) Consolidated Senior Long-Term Funded Debt,
plus (2) the Clean-Down Amount of Consolidated Current Debt, does
not exceed fifty-five percent (55%) of Consolidated Total
Capitalization; and
(C) the sum of (1) Consolidated Long-Term Funded Debt, plus
(2) the Clean-Down Amount of Consolidated Current Debt, does not
exceed sixty-five percent (65%) of Consolidated Total
Capitalization.
(b) Current Debt. No Company shall, at any date, create, incur or have
outstanding any Current Debt of any kind unless, on the date such Company
becomes liable for such Current Debt, no Default or Event of Default shall exist
on such date and there shall have been a period of thirty (30) consecutive days
occurring in the twelve consecutive calendar months most recently ended (or on
such date if such date shall be the last day of a calendar month) on each day of
which Consolidated Current Debt shall not have been in excess of the amount of
Long-Term Funded Debt that the Companies could have incurred, but did not incur,
on such day in accordance with subpart (a)(v) above.
(c) Generally. For the purposes of this Section 5.8, any Person becoming a
Subsidiary of US Borrower after the date hereof shall be deemed, at the time it
becomes a Subsidiary, to have incurred all of its then outstanding Current Debt
or Long-Term Funded Debt, and any Person extending, renewing or refunding any
Current Debt or Long-Term Funded Debt shall be deemed to have incurred such
Current Debt or Long-Term Funded Debt at the time of such extension, renewal or
refunding. For the avoidance of doubt, the parties hereto acknowledge and agree
that the covenant set forth in this Section 5.8 is to be applied on and as of
each date upon which any Company shall, directly or indirectly, create, incur,
assume, guarantee or otherwise become directly or indirectly liable with respect
to (or, as described in the immediately preceding sentence, be deemed, directly
or indirectly, to create, incur, assume, guarantee or otherwise become directly
or indirectly liable with respect to), any Current Debt or Long-Term Funded
Debt.
Section 5.9. Liens. No Company shall create, assume or suffer to exist
(upon the happening of a contingency or otherwise) any Lien upon any of its
property or assets, whether now owned or hereafter acquired; provided that this
Section shall not apply to the following:
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(a) Liens (other than any Lien imposed by ERISA) incurred or deposits made
in the ordinary course of business:
(i) in connection with workers' compensation, unemployment insurance
and other types of social security or retirement benefits, or
(ii) to secure (or to obtain letters of credit that secure) the
performance of tenders, statutory obligations, surety bonds, bids, leases
(other than capital leases), performance bonds, purchase, construction or
sales contracts and other similar obligations, in each case not incurred
or made in connection with the borrowing of money, the obtaining of
advances or credit or the payment of the deferred purchase price of
property;
(b) statutory Liens of landlords and Liens of carriers, warehousemen,
mechanics, materialmen and other similar Liens, in each case incurred in the
ordinary course of business for sums not yet due and payable or the payment of
which is not at the time required by Section 5.2;
(c) Liens arising from judicial attachments or judgments, or securing
appeal bonds, and other similar Liens, provided that
(i) the execution or other enforcement of such Liens is effectively
stayed, and
(ii) the claims secured thereby are being actively contested in good
faith and adequate reserves in respect thereof have been established by
such Company in accordance with GAAP;
(d) leases or subleases granted to others, easements, rights-of-way,
restrictions and other similar charges or encumbrances, in each case incidental
to, and not interfering with, the ordinary conduct of the business of a Company,
provided that such Liens do not, in the aggregate, materially impair the use of
such property by such Company;
(e) Liens for taxes not yet due or that are being actively contested in
good faith by appropriate proceedings and for which adequate reserves shall have
been established in accordance with GAAP;
(f) Liens on property or assets of a Subsidiary to secure obligations of
such Subsidiary to a Credit Party; or
(g) other Liens securing Debt permitted pursuant to Section 5.8(a)(v)
hereof (but subject to Section 5.7(a) hereof).
If, US Borrower shall, or shall permit any of its Subsidiaries to, directly or
indirectly create, incur, assume or permit to exist any Lien securing the
obligations pursuant to the Note Purchase Agreements, it will make or cause to
be made effective provision whereby the Obligations will be secured equally and
ratably with any and all other obligations thereby secured, such security to be
pursuant to agreements reasonably satisfactory to the Required Lenders and, in
any such
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case, the Obligations shall have the benefit, to the fullest extent that, and
with such priority as, the holders of the Obligations may be entitled under
applicable law, of an equitable Lien on such property. Such violation of this
Section 5.9 will constitute an Event of Default, whether or not provision is
made for an equal and ratable Lien pursuant to this Section 5.9.
Section 5.10. Regulations T, U and X. No Company shall take any action
that would result in any non-compliance of the Loans or Letters of Credit with
Regulations T, U or X, or any other applicable regulation, of the Board of
Governors of the Federal Reserve System. Margin stock does not and shall not
constitute more than five percent (5%) of the value of the consolidated assets
of any Company and each Company does not have any present intention that margin
stock will constitute more than five percent (5%) of the value of such assets.
Section 5.11. Compliance with Laws. Each Company:
(a) shall maintain in effect all permits, certificates, licenses, orders,
registrations, franchises, authorizations, and other approvals from any
Governmental Authority necessary for the conduct of its business and will comply
with all applicable laws relating thereto; and
(b) shall comply with all federal, state, provincial, local, or foreign
applicable statutes, rules, regulations, and orders including, without
limitation, those relating to environmental protection, occupational safety and
health, and equal employment and labor practices;
except, with respect to subsection (a) or (b) above, as would not result in a
Material Adverse Effect.
Section 5.12. Merger and Sale of Assets. No Company shall merge,
amalgamate or consolidate with any other Person, or sell, lease or transfer or
otherwise dispose of any assets (including the capital stock of a Subsidiary) to
any Person other than in the ordinary course of business, except that, if no
Default or Event of Default shall then exist or immediately thereafter shall
begin to exist:
(a) any Company may merge (or amalgamate) with any other Person, provided
that if such Company is US Borrower, such Company shall be the continuing or
surviving Person;
(b) Canadian Borrower may amalgamate with any other Person, provided that
the amalgamated corporation resulting from such amalgamation shall deliver a
written confirmation to Agent confirming that it is subject to all of the
obligations of Canadian Borrower hereunder and such other documentation as Agent
may reasonably request, all in form and substance reasonably satisfactory to
Agent and the Lenders;
(c) any Subsidiary may sell, lease, transfer or otherwise dispose of any
of its assets to (i) a Borrower or (ii) any Wholly-Owned Subsidiary;
(d) any Borrower may sell, lease, transfer or otherwise dispose of any of
its assets to any Wholly-Owned Subsidiary;
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(e) any Company may sell, lease, transfer or otherwise dispose of any
assets to any other Company so long as such sale, lease or transfer is for fair
market value;
(f) any Company may sell, lease, transfer or otherwise dispose of any
assets that are obsolete, worn-out or no longer used or useful in such Company's
business;
(g) any Company may sell, lease, transfer or otherwise dispose of any
assets to any Person so long as (i) such disposition is for fair market value
(as determined by such Company); and (ii) the aggregate amount of all such
dispositions pursuant to this subsection (g) for all of the Companies does not
exceed, for the most recently completed four fiscal quarters of US Borrower, an
amount equal to fifteen percent (15%) of Consolidated Total Assets for the most
recently completed fiscal year of US Borrower; provided, however, that if the
proceeds hereof are intended to be used to effect a Debt Prepayment Application
or a Property Reinvestment Application within three hundred sixty-five (365)
days, then such sale, lease, transfer or other disposition shall be excluded for
the purposes of determining compliance with this Section 5.12(g); or
(h) Acquisitions may be effected in accordance with the provisions of
Section 5.13 hereof.
Section 5.13. Acquisitions. No Company shall effect an Acquisition;
provided, however, that a Company may effect an Acquisition so long as:
(a) in the case of a merger, amalgamation or other combination including
US Borrower, US Borrower shall be the surviving entity;
(b) in the case of a merger, amalgamation or other combination including
Canadian Borrower, the surviving entity shall deliver a written confirmation to
Agent confirming that it is subject to all of the obligations of Canadian
Borrower hereunder and such other documentation as Agent may reasonably request,
all in form and substance reasonably satisfactory to Agent and the Lenders;
(c) the business to be acquired shall be similar or complementary to the
lines of business of the Companies;
(d) such Acquisition is not actively opposed by the board of directors (or
similar governing body) of the selling Persons or the Persons whose equity
interests are to be acquired;
(e) the Companies shall be in full compliance with the Loan Documents both
prior to and subsequent to the transaction;
(f) no Default or Event of Default shall exist prior to or after giving
effect to such Acquisition; and
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(g) if the Consideration paid for such Acquisition is in excess of One
Hundred Million Dollars ($100,000,000), Borrowers shall have provided to Agent
and the Lenders, at least ten (10) days prior to such Acquisition, historical
financial statements of the target entity and a pro forma financial statement of
the Companies accompanied by a certificate of a Financial Officer of US Borrower
showing pro forma compliance with Section 5.7 hereof, both before and after the
proposed Acquisition.
Section 5.14. Notice.
(a) Notice of Default. Borrowers shall cause a Financial Officer to
promptly notify Agent and the Lenders, in writing, whenever any Default or Event
of Default may occur hereunder or any representation or warranty made in Article
VI hereof or elsewhere in this Agreement or in any Related Writing may for any
reason cease in any material respect to be true and complete.
(b) Notice to Noteholders. Borrowers shall provide written notice to Agent
and the Lenders contemporaneously with any material notice required to be
provided to the Noteholders under any Note Purchase Agreement (without
duplication of notices otherwise required hereunder).
(c) Notice of Change in Control or Control Event. Borrowers shall give
written notice to Agent and the Lenders of a Change in Control or Control Event
within five Business Days after any Financial Officer has knowledge of the
occurrence of such Change in Control or Control Event.
Section 5.15. Environmental Compliance. Each Company shall comply in all
material respects with any and all Environmental Laws and Environmental Permits
including, without limitation, all Environmental Laws in jurisdictions in which
such Company owns or operates a facility or site, arranges for disposal or
treatment of hazardous substances, solid waste or other wastes, accepts for
transport any hazardous substances, solid waste or other wastes or holds any
interest in real property or otherwise. Borrowers shall furnish to the Lenders,
promptly after receipt thereof, a copy of any notice such Company may receive
from any Governmental Authority or private Person or otherwise that any material
litigation or proceeding pertaining to any environmental, health or safety
matter has been filed or is threatened against such Company, any real property
in which such Company holds any interest or any past or present operation of
such Company. No Company shall allow the material release or disposal of
hazardous waste, solid waste or other wastes on, under or to any real property
in which any Company holds any interest or performs any of its operations, in
violation of any Environmental Law. As used in this Section, "litigation or
proceeding" means any demand, claim, notice, suit, suit in equity action,
administrative action, investigation or inquiry whether brought by any
Governmental Authority or private Person or otherwise. Borrowers shall defend,
indemnify and hold Agent and the Lenders harmless against all costs, expenses,
claims, damages, penalties and liabilities of every kind or nature whatsoever
(including attorneys' fees) arising out of or resulting from the noncompliance
of any Company with any Environmental Law. Such indemnification shall survive
any termination of this Agreement.
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Section 5.16. Affiliate Transactions. No Company shall, directly or
indirectly, enter into or permit to exist any material transaction (including,
without limitation, the purchase, sale, lease or exchange of any property or the
rendering of any service) with any Affiliate of a Company (other than a Company
that is a Credit Party) on terms that shall be less favorable (considered as a
whole) to such Company than those that might be obtained at the time in a
transaction with a non-Affiliate; provided, however, that the foregoing shall
not prohibit (a) the payment of customary and reasonable directors' fees to
directors who are not employees of a Company or an Affiliate; (b) any
transaction between a Company (if a Credit Party) and an Affiliate (if a Credit
Party) which US Borrower reasonably determines in good faith is beneficial to
the Companies as a whole and which is not entered into for the purpose of
hindering the exercise by Agent or the Lenders of their rights or remedies under
this Agreement; (c) any employment agreement, employee benefit plan, stock
option plan, officer and director indemnification agreement or any similar
arrangement entered into by a Company in the ordinary course of business; or (d)
loans to employees or officers to the extent permitted under this Agreement.
Section 5.17. Use of Proceeds. Borrowers use of the proceeds of the Loans
shall be solely for working capital and other general corporate purposes of the
Companies, and for Acquisitions.
Section 5.18. Sale and Leaseback Transactions. No Company shall enter into
or permit to continue any Sale/Leaseback Transaction unless (a) the Attributable
Debt associated therewith can be incurred and remain outstanding in accordance
with the requirements of Section 5.7(a) hereof, or (b) such Company shall give
written notice to Agent prior to consummation of any such transaction that it
intends to apply the Net Proceeds Amount arising therefrom to a Debt Prepayment
Application or a Property Reinvestment Application within three hundred
sixty-five (365) days after such consummation, in which event such transaction,
only for the purpose of determining compliance with this Section 5.18, shall be
deemed not to be a Sale/Leaseback Transaction; provided that, if such Company
shall fail to apply such Net Proceeds Amount as stated in such notice within
such period, such failure shall constitute an Event of Default.
Section 5.19. Guaranty Under Material Indebtedness Agreement. No Company
shall be or become a Guarantor of the Indebtedness incurred pursuant to any Note
Purchase Agreement or any other Material Indebtedness Agreement unless such
Company shall also become a Guarantor of Payment under this Agreement prior to
or concurrently therewith by executing and delivering to Agent, for the benefit
of the Lenders, a Guaranty of Payment of all of the Obligations, such agreement
to be in form and substance acceptable to Agent (it being understood and agreed
that the forms of Guaranty of Payment executed and delivered on the date hereof
are in form and substance acceptable to Agent), along with any such other
supporting documentation, corporate governance and authorization documents, and
an opinion of counsel, in each case reasonably requested by Agent.
Section 5.20. Restrictive Agreements. Except as set forth in this
Agreement, Borrowers shall not, and shall not permit any of their Subsidiaries
to, directly or indirectly, create or otherwise cause or suffer to exist or
become effective any encumbrance or restriction on the ability of any Subsidiary
to (a) make, directly or indirectly, any Capital Distribution to any Borrower or
Guarantor of Payment, (b) make, directly or indirectly, loans or advances or
capital
65
contributions to any Borrower or Guarantor of Payment or (c) transfer, directly
or indirectly, any of the properties or assets of such Subsidiary to any
Borrower or Guarantor of Payment; except, with respect to (a), (b) or (c), for
such encumbrances or restrictions existing under or by reason of (i) applicable
law, (ii) customary non-assignment provisions in leases or other agreements
entered in the ordinary course of business and consistent with past practices,
or (iii) customary restrictions in security agreements or mortgages securing
Indebtedness of a Company, or capital leases, of a Company to the extent such
restrictions shall only restrict the transfer of the property subject to such
security agreement, mortgage or lease.
Section 5.21. Other Covenants. If, at any time, any Note Purchase
Agreement existing as of the Closing Date (but including amendments thereof) is
amended, restated or otherwise modified, and the result thereof is that one or
more Financial Covenants, as hereinafter defined, contained therein are either
not contained in this Agreement or are contained in this Agreement but are more
favorable to the Noteholders than are the terms of this Agreement to the
Lenders, this Agreement shall, without any further action on the part of any
Borrower or the Lenders, be deemed to be amended automatically to include each
such additional or more favorable Financial Covenant, unless the Required
Lenders provide written notice to US Borrower to the contrary within thirty (30)
days after having received written notice from US Borrower of the effectiveness
of such additional or more favorable Financial Covenant. No modification or
amendment of any such Note Purchase Agreement that results in any Financial
Covenant becoming less restrictive shall be effective as a modification,
amendment or waiver under this Agreement. Borrowers further covenant promptly to
execute and deliver at their expense (including, without limitation, attorneys'
fees and expenses) an amendment to this Agreement in form and substance
satisfactory to the Required Lenders, provided that the execution and delivery
of such amendment shall not be a precondition to the effectiveness of such
additional or more favorable Financial Covenant as provided for in this Section
5.21. The provisions of this Section 5.21 shall apply successively to each
change in a Financial Covenant contained in any such Note Purchase Agreement.
For purposes of this Section 5.21, "Financial Covenant" shall mean any covenant
or equivalent provision (including, without limitation, any default or event of
default provision and definitions of defined terms used therein) requiring any
Company (a) to maintain any level of financial performance (including, without
limitation, a specified level of net worth, total assets, cash flow or net
income), (b) not to exceed any maximum level of Indebtedness, (c) to maintain
any relationship of any component of its capital structure to any other
component thereof (including, without limitation, the relationship of
indebtedness, senior indebtedness or subordinated indebtedness to total
capitalization or to net worth), or (d) to maintain any measure of its ability
to service its indebtedness (including, without limitation, falling below any
specified ratio of revenues, cash flow or net income to interest expense, rental
expense, capital expenditures and/or scheduled payments of Indebtedness).
Section 5.22. Pari Passu Ranking. The Obligations shall, and each Borrower
shall take all necessary action to ensure that the Obligations shall, at all
times, rank at least pari passu in right of payment with all other senior
unsecured Indebtedness of such Borrower.
Section 5.23. Note Purchase Agreements. US Borrower shall not, without the
prior written consent of Agent and the Required Lenders, (a) amend, restate,
supplement or otherwise modify any Note Purchase Agreement to (i) increase the
principal amount outstanding
66
thereunder, unless the amount of such increase shall be permitted pursuant to
Section 5.8 hereof, or (ii) otherwise modify any provision such that a Default
or Event of Default will exist, or (b) grant or suffer to exist (upon the
happening of a contingency or otherwise) any Lien securing any of the
obligations under any of the Note Purchase Agreements.
ARTICLE VI. REPRESENTATIONS AND WARRANTIES
Section 6.1. Corporate Existence; Subsidiaries; Foreign Qualification.
Each Company is duly organized, validly existing and in good standing under the
laws of its state or jurisdiction of incorporation or organization, and as of
the Closing Date is duly qualified and authorized to do business and is in good
standing as a foreign entity in the jurisdictions where the character of its
property or its business activities makes such qualification necessary, except
where a failure to qualify will not result in a Material Adverse Effect.
Schedule 6.1 hereto sets forth, as of the Closing Date, each Subsidiary of a
Borrower, its state or jurisdiction of formation, its registered office (if it
is a Canadian organization), its relationship to US Borrower, including the
percentage of each class of stock owned by a Company, each Person that owns the
stock or other equity interest of each Company (other than US Borrower).
Section 6.2. Corporate Authority. Each Credit Party has the corporate or
other organizational right and power and is duly authorized and empowered to
enter into, execute and deliver the Loan Documents to which it is a party and to
perform and observe the provisions of the Loan Documents. The Loan Documents to
which each Credit Party is a party have been duly authorized and approved by
such Credit Party's board of directors or other governing body, as applicable,
and are the valid and binding obligations of such Credit Party, enforceable
against such Credit Party in accordance with their respective terms, except as
enforceability thereof may be limited by bankruptcy, insolvency, moratorium and
similar laws and by equitable principles, whether considered at law or in
equity. The execution, delivery and performance of the Loan Documents will not
conflict with nor result in any breach in any of the provisions of, or
constitute a default under, or result in the creation of any Lien (other than
Liens permitted under Section 5.9 hereof) upon any assets or property of any
Company under the provisions of, such Company's Organizational Documents or any
material agreement.
Section 6.3. Compliance with Laws. Except as set forth on Schedule 6.3
hereto or except as would not have a Material Adverse Effect, each Company:
(a) holds permits, certificates, licenses, orders, registrations,
franchises, authorizations, and other approvals from any Governmental Authority
necessary for the conduct of its business and is in compliance with all
applicable laws relating thereto;
(b) is in compliance with all federal, state, provincial, local, or
foreign applicable statutes, rules, regulations, and orders including, without
limitation, those relating to environmental protection, occupational safety and
health, and equal employment and labor practices; and
67
(c) is not in violation of or in default under any agreement to which it
is a party or by which its assets are subject or bound.
Section 6.4. Litigation and Administrative Proceedings. Except as
disclosed on Schedule 6.4 hereto or as would not have a Material Adverse Effect,
there are (a) no lawsuits, actions, investigations, or other proceedings pending
or threatened against any Company, or in respect of which any Company may have
any liability, in any court or before any Governmental Authority, arbitration
board, or other tribunal, (b) no orders, writs, injunctions, judgments, or
decrees of any court or government agency or instrumentality to which any
Company is a party or by which the property or assets of any Company are bound,
and (c) no grievances, disputes, or controversies outstanding with any union or
other organization of the employees of any Company, or threats of work stoppage,
strike, or pending demands for collective bargaining.
Section 6.5. Title to Assets. Each Company has title to and ownership of
all material properties it purports to own, which properties are free and clear
of all Liens, except those permitted under Section 5.9 hereof.
Section 6.6. Liens and Security Interests. On and after the Closing Date,
except for Liens permitted pursuant to Section 5.9 hereof, (a) there is and will
be no Uniform Commercial Code or Personal Property Security Act Financing
Statement outstanding covering any personal property of any Company; (b) there
is and will be no mortgage or deed of hypothec outstanding covering any real
property of any Company; and (c) no real or personal property of any Company is
subject to any security interest or Lien of any kind.
Section 6.7. Tax Returns. All federal, state, provincial and material
local tax returns and other material reports required by law to be filed in
respect of the income, business, properties and employees of each Company have
been filed and all material taxes, assessments, fees and other governmental
charges that are shown thereon to be due and payable have been paid, except as
otherwise permitted herein. The provision for taxes on the books of each Company
is adequate for all years not closed by applicable statutes and for the current
fiscal year.
Section 6.8. Environmental Laws. Except as disclosed on Schedule 6.8
hereto, (a) each Company is in material compliance with all Environmental Laws,
including, without limitation, all Environmental Laws in all jurisdictions in
which any Company owns or operates, or has owned or operated, a facility or
site, arranges or has arranged for disposal or treatment of hazardous
substances, solid waste or other wastes, accepts or has accepted for transport
any hazardous substances, solid waste or other wastes or holds or has held any
interest in real property or otherwise; (b) no material litigation or proceeding
arising under, relating to or in connection with any Environmental Law or
Environmental Permit is pending or, to the best knowledge of each Company,
threatened, against any Company, any real property in which any Company holds or
has held an interest or any past or present operation of any Company; and (c) no
material release, threatened release or disposal of hazardous waste, solid waste
or other wastes is occurring, or has occurred (other than those that are
currently being cleaned up in accordance with Environmental Laws), on, under or
to any real property in which any Company holds any interest or performs any of
its operations, in violation of any Environmental Law. As used in this Section,
"litigation or proceeding" means any demand, claim, notice, suit, suit in
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equity, action, administrative action, investigation or inquiry whether brought
by any Governmental Authority or private Person, or otherwise.
Section 6.9. Continued Business. There exists no actual, pending, or, to
each Borrower's knowledge, any threatened termination, cancellation or
limitation of, or any modification or change in the business relationship of any
Company and any customer or supplier, or any group of customers or suppliers,
whose purchases or supplies, individually or in the aggregate, are material to
the business of any Company, and there exists no present condition or state of
facts or circumstances that would have a Material Adverse Effect or prevent a
Company from conducting such business or the transactions contemplated by this
Agreement in substantially the same manner in which it was previously conducted.
Section 6.10. Employee Benefits Plans.
(a) Schedule 6.10 hereto identifies each ERISA Plan and each Multiemployer
Plan as of the Closing Date. Except as set forth on Schedule 6.10 hereto, no
ERISA Event has occurred or is expected to occur with respect to an ERISA Plan
that would have a Material Adverse Effect. Except as would not result in a
Material Adverse Effect, full payment has been made of all amounts that a
Controlled Group member is required, under applicable law or under the governing
documents, to have paid as a contribution to or a benefit under each ERISA Plan.
The liability of each Controlled Group member with respect to each ERISA Plan
has been fully funded based upon reasonable and proper actuarial assumptions,
has been fully insured, or has been fully reserved for on its financial
statements except for such failure that would not result in a Material Adverse
Effect. No changes have occurred or are expected to occur that would cause a
material increase in the cost of providing benefits under the ERISA Plan. With
respect to each ERISA Plan that is intended to be qualified under Code Section
401(a), (i) the ERISA Plan and any associated trust operationally comply in all
material respects with the applicable requirements of Code Section 401(a) except
for such failure that would not result in a Material Adverse Effect; (ii) the
ERISA Plan and any associated trust have been amended to comply with all such
requirements as currently in effect, other than those requirements for which a
retroactive amendment can be made within the "remedial amendment period"
available under Code Section 401(b) (as extended under Treasury Regulations and
other Treasury pronouncements upon which taxpayers may rely) except for such
failure that would not result in a Material Adverse Effect; (iii) the ERISA Plan
and any associated trust have received a favorable determination letter from the
Internal Revenue Service stating that the ERISA Plan qualifies under Code
Section 401(a), that the associated trust qualifies under Code Section 501(a)
and, if applicable, that any cash or deferred arrangement under the ERISA Plan
qualifies under Code Section 401(k), unless the ERISA Plan was first adopted at
a time for which the above-described "remedial amendment period" has not yet
expired; (iv) the ERISA Plan currently satisfies the requirements of Code
Section 410(b), subject to any retroactive amendment that may be made within the
above-described "remedial amendment period" except for such failure that would
not result in a Material Adverse Effect; and (v) no contribution made to the
ERISA Plan is subject to an excise tax under Code Section 4972 that would have a
Material Adverse Effect. Except as would not result in a Material Adverse
Effect, with respect to any Pension Plan, the "accumulated benefit obligation"
of Controlled Group members with respect to the Pension Plan (as determined in
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accordance with Statement of Accounting Standards No. 87, "Employers' Accounting
for Pensions") does not exceed the fair market value of Pension Plan assets.
(b) Canadian Pension Plan and Benefit Plans. As of the Closing Date,
Schedule 6.10 hereto lists all Canadian Benefit Plans and Canadian Pension Plans
currently maintained or contributed to by Canadian Borrower. The Canadian
Pension Plans are duly registered under the Income Tax Act (Canada) and all
other applicable laws which require registration. Canadian Borrower has complied
with and performed all of its obligations under and in respect of the Canadian
Pension Plans and Canadian Benefit Plans under the terms thereof, any funding
agreements and all applicable laws (including any fiduciary, funding, investment
and administration obligations) except to the extent as would not reasonably be
expected to have a Material Adverse Effect. All employer and employee payments,
contributions or premiums to be remitted, paid to or in respect of each Canadian
Pension Plan or Canadian Benefit Plan have been paid in a timely fashion in
accordance with the terms thereof, any funding agreement and all applicable laws
except to the extent the failure to do so would not reasonably be expected to
have a Material Adverse Effect. Except as set forth on Schedule 6.10 hereto, as
of the Closing Date, there are no outstanding actions or suits concerning the
assets of the Canadian Pension Plans or the Canadian Benefit Plans. Except as
set forth on Schedule 6.10 hereto, as of the Closing Date, each of the Canadian
Pension Plans is fully funded on an ongoing basis (using actuarial methods and
assumptions as of the date of the valuations last filed with the applicable
Governmental Authorities and that are consistent with generally accepted
actuarial principles).
Section 6.11. Consents or Approvals. No consent, approval or authorization
of, or filing, registration or qualification with, any Governmental Authority or
any other Person is required to be obtained or completed by any Company in
connection with the execution, delivery or performance of any of the Loan
Documents, that has not already been obtained or completed.
Section 6.12. Solvency.
(a) US Borrower. US Borrower has received consideration that is the
reasonable equivalent value of the obligations and liabilities that US Borrower
has incurred to Agent and the Lenders. US Borrower is not insolvent as defined
in any applicable state, federal or relevant foreign statute, nor will US
Borrower be rendered insolvent by the execution and delivery of the Loan
Documents to Agent and the Lenders. US Borrower is not engaged or about to
engage in any business or transaction for which the assets retained by it are or
will be an unreasonably small amount of capital, taking into consideration the
obligations to Agent and the Lenders incurred hereunder. US Borrower does not
intend to, nor does it believe that it will, incur debts beyond its ability to
pay such debts as they mature.
(b) Canadian Borrower. Canadian Borrower has received consideration that
is the reasonable equivalent value of the obligations and liabilities that
Canadian Borrower has incurred to Agent, Canadian Funding Agent and the Canadian
Lenders. Canadian Borrower is not insolvent as defined in any applicable state,
provincial, federal, municipal or relevant foreign statute, nor will Canadian
Borrower be rendered insolvent by the execution and delivery of the Loan
Documents to Agent, Canadian Funding Agent and the Canadian Lenders. Canadian
Borrower is not engaged or about to engage in any business or transaction for
which the assets
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retained by it are or will be an unreasonably small amount of capital, taking
into consideration the obligations to Agent, Canadian Funding Agent and the
Canadian Lenders incurred hereunder. Canadian Borrower does not intend to, nor
does it believe that it will, incur debts beyond its ability to pay such debts
as they mature.
Section 6.13. Financial Statements. Except as disclosed on Schedule 6.13
hereto, the Consolidated financial statements of US Borrower for the fiscal year
ended April 30, 2003 and the unaudited Consolidated financial statements of
Borrowers for the fiscal quarter ended January 31, 2004, furnished to Agent and
the Lenders, are true and complete, have been prepared in accordance with GAAP,
and fairly present in all material respects the financial condition of the
Companies as of the dates of such financial statements and the results of their
operations for the periods then ending (other than, with respect to interim
statements, the absence of footnotes and subject to year-end adjustments). Since
the dates of such statements, there has been no material adverse change in any
Company's financial condition, properties or business or any change in any
Company's accounting procedures.
Section 6.14. Regulations. No Company is engaged principally or as one of
its important activities, in the business of extending credit for the purpose of
purchasing or carrying any "margin stock" (within the meaning of Regulation U of
the Board of Governors of the Federal Reserve System of the United States of
America). Neither the granting of any Loan (or any conversion thereof) or Letter
of Credit nor the use of the proceeds of any Loan or Letter of Credit will
violate, or be inconsistent with, the provisions of Regulation T, U or X or any
other Regulation of such Board of Governors. Margin stock does not and shall not
constitute more than five percent (5%) of the value of the consolidated assets
of any Company and each Company does not have any present intention that margin
stock will constitute more than five percent (5%) of the value of such assets.
Section 6.15. Material Agreements. Except as disclosed on Schedule 6.15
hereto as of the Closing Date, no Company is a party to any (a) Material
Indebtedness Agreement (excluding the Loan Documents and the Note Purchase
Agreement), (b) contract, commitment, agreement, or other arrangement with any
of its "Affiliates" (as such term is defined in the Securities Exchange Act of
1934, as amended) other than a Company, or (c) collective bargaining agreement;
which, in the case of subsections (a), (b) and (c) above, if violated, breached
or terminated, would have or would be reasonably expected to have a Material
Adverse Effect.
Section 6.16. Intellectual Property. Each Company owns, or has the right
to use all of the patents, patent applications, industrial designs, trademarks,
service marks, copyrights, licenses, and rights with respect to the foregoing
necessary for the conduct of its business without any known conflict with the
rights of others, except as would not result in a Material Adverse Effect.
Section 6.17. Insurance. The Companies maintain with financially sound and
reputable insurers insurance with coverage and limits as required by law and as
is customary with similarly situated Persons engaged in the same or similar
businesses as the Companies.
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Section 6.18. Accurate and Complete Statements. Neither the Loan Documents
nor any written statement made by any Company in connection with any of the Loan
Documents contains any untrue statement of a material fact or omits a material
fact necessary to make the statements contained therein or in the Loan Documents
not misleading. There is no known fact that any Company has not disclosed to
Agent and the Lenders that has or is likely to have a Material Adverse Effect.
Section 6.19. Note Purchase Agreements. (a) No Default or Event of Default
(as each term (or similar term, if any) is defined in the Note Purchase
Agreements) exists, nor will any such Default or Event of Default exist
immediately after the granting of any loan under this Agreement or the Note
Purchase Agreement, or any agreement executed in connection therewith; (b) no
Company has incurred any "Debt" (as defined, or as a similar term is defined, in
each Note Purchase Agreement) in violation of the provisions of any Note
Purchase Agreement; and (c) the Obligations (as defined herein) constitute
"Debt" (as defined or, as a similar term is defined, in each Note Purchase
Agreement) permitted pursuant to the provisions of the Note Purchase Agreements.
No Subsidiary is a Guarantor under any Note Purchase Agreement or any other
Material Indebtedness Agreement that is not also a Guarantor of Payment
hereunder.
Section 6.20. Investment Company; Holding Company. No Company is (a) an
"investment company" or a company "controlled" by an "investment company" within
the meaning of the Investment Company Act of 1940, as amended, or (b) subject to
regulation under the Public Utility Holding Company Act of 1935 or the Federal
Power Act, each as amended, or any foreign, federal, state or local statute or
regulation limiting its ability to incur Indebtedness.
Section 6.21. Existing Indebtedness. Except as described therein, Schedule
6.21 sets forth a complete and correct list of all outstanding Indebtedness of
the Companies as of April 30, 2004, since which date there has been no material
change in the amounts, interest rates, sinking funds, installment payments or
maturities of the Indebtedness of the Companies. No Company is in default and no
waiver of default is currently in effect, in the payment of any principal or
interest on any Indebtedness of any Company and no event or condition exists
with respect to any Indebtedness of any Company the outstanding principal amount
of which exceeds Fifteen Million Dollars ($15,000,000) that would permit (or
that with notice or the lapse of time, or both, would permit) one or more
Persons to cause such Indebtedness to become due and payable before its stated
maturity or before its regularly scheduled dates of payment.
Section 6.22. Defaults. No Default or Event of Default exists hereunder,
nor will any begin to exist immediately after the execution and delivery hereof.
ARTICLE VII. EVENTS OF DEFAULT
Each of the following shall constitute an Event of Default hereunder:
Section 7.1. Payments. If (a) the interest on any Loan or any facility,
utilization or other fee shall not be paid in full punctually when due and
payable or within five Business Days
thereafter, or (b) the principal of any Loan or any obligation under any Letter
of Credit shall not be paid in full when due and payable.
Section 7.2. Special Covenants. If any Company shall fail or omit to
perform and observe Section 5.7, 5.8, 5.9, 5.12, 5.19, 5.21, 5.22 or 5.23
hereof.
Section 7.3. Other Covenants. If any Company shall fail or omit to perform
and observe any agreement or other provision (other than those referred to in
Section 7.1 or 7.2 hereof) contained or referred to in this Agreement or any
Related Writing that is on such Company's part to be complied with, and that
Default shall not have been fully corrected within thirty (30) days after the
earlier of (a) any Financial Officer of such Company becomes aware of the
occurrence thereof, or (b) the giving of written notice thereof to US Borrower
by Agent or any Lender that the specified Default is to be remedied.
Section 7.4. Representations and Warranties. If any representation,
warranty or statement made in or pursuant to this Agreement or any Related
Writing or any other material written factual information furnished by any
Company to the Lenders or any thereof or any other holder of any Note, shall be
false or erroneous in any material respect.
Section 7.5. Cross Default.
(a) Note Purchase Agreement. If (i) any event of default (as each term or
similar term is defined in any Note Purchase Agreement) shall occur under any
Note Purchase Agreement or any agreement executed in connection therewith, or
(ii) the Indebtedness incurred in connection with any Note Purchase Agreement
shall be accelerated for any reason.
(b) Other Cross Defaults. If any Company shall:
(i) default in the payment of principal or interest due and owing on
any Indebtedness that is outstanding in an aggregate principal amount of
Five Million Dollars ($5,000,000) or more beyond any period of grace
provided with respect thereto;
(ii) default in the payment of principal or interest due and owing
under any Material Indebtedness Agreement beyond any period of grace
provided with respect thereto or in the performance or observance of any
other agreement, term or condition contained in any agreement under which
such obligation is created, if the effect of such default is to cause the
Indebtedness (or any part thereof) under such Material Indebtedness
Agreement to become due prior to its stated maturity; or
(iii) default in the performance or observance of any term or
condition contained in any agreement evidencing Indebtedness in an
aggregate outstanding principal amount of Thirty Million Dollars
($30,000,000) or more, if the effect of such default is to allow the
acceleration of the maturity of such Indebtedness.
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Section 7.6. ERISA Default. The occurrence of one or more ERISA Events
that (a) the Required Lenders determine would have a Material Adverse Effect, or
(b) results in a material Lien on any of the assets of any Company.
Section 7.7. Change in Control. If any Change in Control shall occur.
Section 7.8. Money Judgment. A final judgment or order for the payment of
money shall be rendered against any Company by a court of competent
jurisdiction, that remains unpaid or unstayed and undischarged for a period
(during which execution shall not be effectively stayed) of thirty (30) days
after the date on which the right to appeal has expired, provided that the
aggregate of all such judgments at any time unstayed or undischarged, for all
such Companies, shall exceed Fifteen Million Dollars ($15,000,000).
Section 7.9. Validity of Loan Documents. (a) Any material provision, in
the reasonable opinion of Agent, of any Loan Document shall at any time for any
reason cease to be valid, binding and enforceable against any Credit Party; (b)
the validity, binding effect or enforceability of any Loan Document against any
Credit Party shall be contested by any Credit Party; (c) any Credit Party shall
deny that it has any or further liability or obligation under any Loan Document;
or (d) any Loan Document shall be terminated, invalidated or set aside, or be
declared ineffective or inoperative or in any way cease to give or provide to
Agent and the Lenders the benefits purported to be created thereby. In addition
to any other material Loan Documents, this Agreement, each Note and each
Guaranty of Payment shall be deemed to be "material".
Section 7.10. Solvency. If any Company (other than a Dormant Subsidiary)
shall (a) except as permitted pursuant to Section 5.12 hereof, discontinue
business, (b) generally not pay its debts as such debts become due, (c) make a
general assignment for the benefit of creditors, (d) apply for or consent to the
appointment of an interim receiver, a receiver and manager, an administrator,
sequestrator, monitor, a custodian, a trustee, an interim trustee, liquidator,
agent or other similar official of all or a substantial part of its assets or of
such Company, (e) be adjudicated a debtor or insolvent or have entered against
it an order for relief under Title 11 of the United States Code, or under any
other bankruptcy insolvency, liquidation, winding-up, corporate or similar
statute or law, foreign, federal, state or provincial, in any applicable
jurisdiction, now or hereafter existing, as any of the foregoing may be amended
from time to time, or other applicable statute for jurisdictions outside of the
United States, as the case may be, (f) file a voluntary petition in bankruptcy,
or file a proposal or notice of intention to file a proposal or have an
involuntary proceeding filed against it and the same shall continue undismissed
for a period of sixty (60) days from commencement of such proceeding or case, or
file a petition or an answer or an application or a proposal seeking
reorganization or an arrangement with creditors or seeking to take advantage of
any other law (whether federal, provincial or state, or, if applicable, other
jurisdiction) relating to relief of debtors, or admit (by answer, by default or
otherwise) the material allegations of a petition filed against it in any
bankruptcy, reorganization, insolvency or other proceeding (whether federal,
provincial or state, or, if applicable, other jurisdiction) relating to relief
of debtors, (g) suffer or permit or to continue unstayed and in effect for sixty
(60) consecutive days any judgment, decree or order entered by a court of
competent jurisdiction, that approves a petition or an application or a proposal
seeking
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its reorganization or appoints an interim receiver, a receiver and manager, an
administrator, custodian, trustee, interim trustee or liquidator of all or a
substantial part of its assets, or of such Company, (h) take, or omit to take,
any action in order thereby to effect any of the foregoing, (i) have assets, the
value of which is less than its liabilities (taking into account prospective and
contingent liabilities), or (j) have a moratorium declared in respect of any of
its Indebtedness, or any analogous procedure or step is taken in any
jurisdiction.
ARTICLE VIII. REMEDIES UPON DEFAULT
Notwithstanding any contrary provision or inference herein or elsewhere:
Section 8.1. Optional Defaults. If any Event of Default referred to in
Section 7.1, 7.2, 7.3, 7.4, 7.5, 7.6, 7.7, 7.8 or 7.9 hereof shall occur, Agent
may, with the consent of the Required Lenders, and shall, at the written request
of the Required Lenders, give written notice to Borrowers, to:
(a) terminate the Commitment, if not previously terminated, and,
immediately upon such election, the obligations of the Lenders, and each
thereof, to make any further Loan and the obligation of the Fronting Lender to
issue any Letter of Credit immediately shall be terminated, and/or
(b) accelerate the maturity of all of the Obligations (if the Obligations
are not already due and payable), whereupon all of the Obligations shall become
and thereafter be immediately due and payable in full without any presentment or
demand and without any further or other notice of any kind, all of which are
hereby waived by each Borrower.
Section 8.2. Automatic Defaults. If any Event of Default referred to in
Section 7.10 hereof shall occur:
(a) all of the Commitment shall automatically and immediately terminate,
if not previously terminated, and no Lender thereafter shall be under any
obligation to grant any further Loan, nor shall the Fronting Lender be obligated
to issue any Letter of Credit, and
(b) the principal of and interest then outstanding on all of the Loans,
and all of the other Obligations, shall thereupon become and thereafter be
immediately due and payable in full (if the Obligations are not already due and
payable), all without any presentment, demand or notice of any kind, which are
hereby waived by each Borrower.
Section 8.3. Letters of Credit. If the maturity of the Obligations shall
be accelerated pursuant to Section 8.1 or 8.2 hereof, US Borrower shall
immediately deposit with Agent, as security for the obligations of US Borrower
(or US Borrower together with another Company) and to reimburse Agent and the US
Lenders for any then outstanding Letters of Credit, cash equal to one hundred
five percent (105%) of the sum of the aggregate undrawn balance of any then
outstanding Letters of Credit. Agent and the Lenders are hereby authorized, at
their option, to deduct any and all such amounts from any deposit balances then
owing by any Lender (or any
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affiliate of such Lender) to or for the credit or account of any Company, as
security for the obligations of US Borrower and any Guarantor of Payment to
reimburse Agent and the US Lenders for any then outstanding Letters of Credit.
Section 8.4. Offsets. If there shall occur or exist any Event of Default
referred to in Section 7.10 hereof or if the maturity of the Obligations is
accelerated pursuant to Section 8.1 or 8.2 hereof, each Lender shall have the
right at any time to set off against, and to appropriate and apply toward the
payment of, any and all Obligations then owing by a Borrower or Guarantor of
Payment to such Lender (including, without limitation, any participation
purchased or to be purchased pursuant to Section 2.2(b), 2.2(c) or 8.5 hereof),
whether or not the same shall then have matured, any and all deposit (general or
special) balances and all other indebtedness then held or owing by such Lender
(including, without limitation, by branches and agencies or any affiliate of
such Lender, wherever located) to or for the credit or account of such Borrower
or Guarantor of Payment, all without notice to or demand upon any Borrower or
any other Person, all such notices and demands being hereby expressly waived by
each Borrower.
Section 8.5. Equalization Provision.
(a) Equalization. Each US Lender agrees with the other US Lenders that if
it, at any time, shall obtain any Advantage over the other US Lenders, or any
thereof, in respect of the Applicable Debt (except as to US Swing Loans and
amounts under Article III hereof), such US Lender shall purchase from the other
US Lenders, for cash and at par, such additional participation in the Applicable
Debt as shall be necessary to nullify the Advantage. Each Canadian Lender agrees
with the other Canadian Lenders that if it, at any time, shall obtain any
Advantage over the other Canadian Lenders, or any thereof, in respect of the
Applicable Debt (except as to Canadian Swing Loans and amounts under Article III
hereof), such Canadian Lender shall purchase from the other Canadian Lenders,
for cash and at par, such additional participation in the Applicable Debt as
shall be necessary to nullify the Advantage.
(b) Recovery of Advantage. If any such Advantage resulting in the purchase
of an additional participation as aforesaid shall be recovered in whole or in
part from the Lender receiving the Advantage, each such purchase shall be
rescinded, and the purchase price restored (but without interest unless such
Lender receiving the Advantage is required to pay interest on the Advantage to
the Person recovering the Advantage from such Lender) ratably to the extent of
the recovery.
(c) Application and Sharing of Set-Off Amounts. Each Lender further agrees
with the other Lenders that if it at any time shall receive any payment for or
on behalf of a Credit Party on any Indebtedness owing by such Credit Party to
such Lender by reason of offset of any deposit or other Indebtedness, it shall
apply such payment first to any and all Indebtedness owing by such Credit Party
to such Lender pursuant to this Agreement (including, without limitation, any
participation purchased or to be purchased pursuant to this Section or any other
Section of this Agreement). Each Credit Party agrees that any Lender so
purchasing a participation from the other Lenders, or any thereof, pursuant to
this Section may exercise all of its rights of payment (including the right of
set-off) with respect to such participation as fully as if such Lender were a
direct creditor of such Credit Party in the amount of such participation.
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Section 8.6. Other Remedies. The remedies in this Article VIII are in
addition to, not in limitation of, any other right, power, privilege, or remedy,
either in law, in equity, or otherwise, to which the Lenders may be entitled.
Agent shall exercise the rights under this Article VIII and all other collection
efforts on behalf of the Lenders and no Lender shall act independently with
respect thereto, except as otherwise specifically set forth in this Agreement.
ARTICLE IX. THE AGENT AND THE CANADIAN FUNDING AGENT
The Lenders authorize KeyBank National Association and KeyBank National
Association hereby agrees to act as agent for the Lenders in respect of this
Agreement upon the terms and conditions set forth elsewhere in this Agreement,
and upon the following terms and conditions. The Lenders authorize Bank of
Montreal and Bank of Montreal hereby agrees to act as Canadian funding agent for
the Canadian Lenders in respect of this Agreement upon the terms and conditions
set forth elsewhere in this Agreement, and upon the following terms and
conditions:
Section 9.1. Appointment and Authorization. Each Lender hereby irrevocably
appoints and authorizes Agent (and Canadian Funding Agent, with respect to the
Lender Agreement) to take such action as agent on its behalf and to exercise
such powers hereunder as are delegated to Agent (and Canadian Funding Agent) by
the terms hereof, together with such powers as are reasonably incidental
thereto, including, without limitation, to execute and deliver the Intercreditor
Agreement and the Lender Agreement on behalf of the Lenders. Neither Agent nor
Canadian Funding Agent (or any of their respective affiliates, directors,
officers, attorneys or employees) shall (a) be liable for any action taken or
omitted to be taken by it or them hereunder or in connection herewith, except
for its or their own gross negligence or willful misconduct (as determined by a
court of competent jurisdiction), or be responsible in any manner to any of the
Lenders for the effectiveness, enforceability, genuineness, validity or due
execution of this Agreement or any other Loan Documents, (b) be under any
obligation to any Lender to ascertain or to inquire as to the performance or
observance of any of the terms, covenants or conditions hereof or thereof on the
part of Borrowers or any other Company, or the financial condition of Borrowers
or any other Company, or (c) be liable to any of the Companies for consequential
damages resulting from any breach of contract, tort or other wrong in connection
with the negotiation, documentation, administration or collection of the Loans
or Letters of Credit or any of the Loan Documents. Each Lender, by becoming a
party to this Agreement, agrees to be bound by and subject to the terms and
conditions of the Intercreditor Agreement and the Lender Agreement as if it were
an original party thereto.
Section 9.2. Note Holders. Agent and Canadian Funding Agent may treat the
payee of any Note as the holder thereof until written notice of transfer shall
have been filed with Agent, signed by such payee and in form satisfactory to
Agent.
Section 9.3. Consultation With Counsel. Agent and Canadian Funding Agent
may consult with legal counsel selected by Agent and shall not be liable for any
action taken or
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suffered in good faith by Agent or Canadian Funding Agent, as the case may be,
in accordance with the opinion of such counsel.
Section 9.4. Documents. Neither Agent nor Canadian Funding Agent shall be
under any duty to examine into or pass upon the validity, effectiveness,
genuineness or value of any Loan Document or any other Related Writing furnished
pursuant hereto or in connection herewith or the value of any collateral
obtained hereunder, and Agent and Canadian Funding Agent shall be entitled to
assume that the same are valid, effective and genuine and what they purport to
be.
Section 9.5. Agent and Affiliates. With respect to the Loans, Agent and
Canadian Funding Agent shall have the same rights and powers hereunder as any
other Lender and may exercise the same as though it were not Agent or Canadian
Funding Agent, and Agent and Canadian Funding Agent and their respective
affiliates may accept deposits from, lend money to and generally engage in any
kind of business with any Company or any Affiliate.
Section 9.6. Knowledge of Default. It is expressly understood and agreed
that Agent (and Canadian Funding Agent) shall be entitled to assume that no
Default or Event of Default has occurred, unless Agent has been notified by a
Lender in writing that such Lender believes that a Default or Event of Default
has occurred and is continuing and specifying the nature thereof or has been
notified by a Borrower pursuant to Section 5.14 hereof.
Section 9.7. Action by Agent. Subject to the other terms and conditions
hereof, so long as Agent shall be entitled, pursuant to Section 9.6 hereof, to
assume that no Default or Event of Default shall have occurred and be
continuing, Agent shall be entitled to use its discretion with respect to
exercising or refraining from exercising any rights that may be vested in it by,
or with respect to taking or refraining from taking any action or actions that
it may be able to take under or in respect of, this Agreement. Agent shall incur
no liability under or in respect of this Agreement by acting upon any notice,
certificate, warranty or other paper or instrument believed by it to be genuine
or authentic or to be signed by the proper party or parties, or with respect to
anything that it may do or refrain from doing in the reasonable exercise of its
judgment, or that may seem to it to be necessary or desirable in the premises.
Section 9.8. Notice of Default. In the event that Agent shall have
acquired actual knowledge of any Default or Event of Default, Agent shall
promptly notify the Lenders and shall take such action and assert such rights
under this Agreement as the Required Lenders shall direct and Agent shall inform
the other Lenders in writing of the action taken. Agent may take such action and
assert such rights as it deems to be advisable, in its discretion, for the
protection of the interests of the holders of the Obligations.
Section 9.9. Indemnification of Agent and Canadian Funding Agent. The
Lenders agree to indemnify Agent and Canadian Funding Agent (to the extent not
reimbursed by Borrowers) ratably, according to their respective Overall
Commitment Percentages, from and against any and all liabilities, obligations,
losses, damages, penalties, actions, judgments, suits, costs, expenses
(including attorneys' fees) or disbursements of any kind or nature whatsoever
that may be imposed on, incurred by or asserted against Agent or Canadian
Funding Agent in its capacity as agent in any way relating to or arising out of
this Agreement, the Intercreditor Agreement, the Lender Agreement or any Loan
Document, or any action taken or omitted by Agent or Canadian Funding Agent with
respect to this Agreement, the Intercreditor Agreement, the
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Lender Agreement or any Loan Document, provided that no Lender shall be liable
for any portion of such liabilities, obligations, losses, damages, penalties,
actions, judgments, suits, costs, expenses (including attorneys' fees) or
disbursements resulting from the gross negligence or willful misconduct of Agent
or Canadian Funding Agent, as the case may be, as determined by a court of
competent jurisdiction, or from any action taken or omitted by Agent or Canadian
Funding Agent, as the case may be, in any capacity other than as agent under
this Agreement, the Intercreditor Agreement, the Lender Agreement or any other
Loan Document.
Section 9.10. Successor Agent. Agent may resign as agent hereunder by
giving not fewer than thirty (30) days prior written notice to Borrowers and the
Lenders. If Agent shall resign under this Agreement, then either (a) the
Required Lenders shall appoint from among the Lenders a successor agent for the
Lenders (with the consent of Borrowers so long as an Event of Default has not
occurred and which consent shall not be unreasonably withheld), or (b) if a
successor agent shall not be so appointed and approved within the thirty (30)
day period following Agent's notice to the Lenders of its resignation, then
Agent shall appoint a successor agent that shall serve as agent until such time
as the Required Lenders appoint a successor agent. Upon its appointment, such
successor agent shall succeed to the rights, powers and duties as agent, and the
term "Agent" shall mean such successor effective upon its appointment, and the
former agent's rights, powers and duties as agent shall be terminated without
any other or further act or deed on the part of such former agent or any of the
parties to this Agreement. In the event that the Canadian Funding Agent shall
resign or shall no longer be a Canadian Lender, Agent shall select another
Canadian Lender to serve as successor Canadian Funding Agent and such successor
shall succeed to the rights, powers and duties of Canadian Funding Agent.
Section 9.11. Canadian Funding Agent. The Lender that acts as the Canadian
Funding Agent from time to time shall be entitled to the same indemnifications
with respect to Borrowers and the other Lenders that Agent would have were it
performing the administrative duties that the Canadian Funding Agent performs
from time to time.
Section 9.12. Other Agents. As used in this Agreement, the term "Agent"
shall only include Agent.
ARTICLE X. MISCELLANEOUS
Section 10.1. Lenders' Independent Investigation. Each Lender, by its
signature to this Agreement, acknowledges and agrees that Agent and Canadian
Funding Agent have made no representation or warranty, express or implied, with
respect to the creditworthiness, financial condition, or any other condition of
any Company or with respect to the statements contained in any information
memorandum furnished in connection herewith or in any other oral or written
communication between Agent or Canadian Funding Agent and such Lender. Each
Lender represents that it has made and shall continue to make its own
independent investigation of the creditworthiness, financial condition and
affairs of the Companies in connection with the extension of credit hereunder,
and agrees that Agent and Canadian Funding Agent have no duty
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or responsibility, either initially or on a continuing basis, to provide any
Lender with any credit or other information with respect thereto (other than
such notices as may be expressly required to be given by Agent or Canadian
Funding Agent to the Lenders hereunder), whether coming into its possession
before the first Credit Event hereunder or at any time or times thereafter. Each
Lender further represents that it has reviewed each of the Loan Documents,
including, but not limited to, the Intercreditor Agreement and the Lender
Agreement.
Section 10.2. No Waiver; Cumulative Remedies. No omission or course of
dealing on the part of Agent or Canadian Funding Agent, any Lender or the holder
of any Note in exercising any right, power or remedy hereunder or under any of
the Loan Documents shall operate as a waiver thereof; nor shall any single or
partial exercise of any such right, power or remedy preclude any other or
further exercise thereof or the exercise of any other right, power or remedy
hereunder or under any of the Loan Documents. The remedies herein provided are
cumulative and in addition to any other rights, powers or privileges held by
operation of law, by contract or otherwise.
Section 10.3. Amendments, Consents. No amendment, modification,
termination, or waiver of any provision of any Loan Document nor consent to any
variance therefrom, shall be effective unless the same shall be in writing and
signed by the Required Lenders 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 consent of waiver shall be effective to the extent
additional obligations are imposed on Agent or Canadian Funding Agent (in its
capacity as Agent or Canadian Funding Agent) without its consent. Anything
herein to the contrary notwithstanding, unanimous consent of the Lenders shall
be required with respect to (a) any increase in the Commitment, the US Revolving
Credit Commitment or the Canadian Revolving Credit Commitment, (b) the extension
of maturity of the Loans, the scheduled (but not the date of any mandatory
prepayment) payment date of interest or principal thereunder, or the payment
date of facility, utilization or other fees or amounts payable hereunder, (c)
any reduction in the rate of interest on the Loans (provided that the
institution of the Default Rate and a subsequent removal of the Default Rate
shall not constitute a decrease in interest rate of this Section), or in any
amount of principal or interest due on any Loan, or the payment of facility,
utilization or other fees hereunder or any change in the manner of pro rata
application of any payments made by Borrowers to the Lenders hereunder, other
than as provided in Section 2.14 hereof, (d) any change in any percentage voting
requirement, voting rights, or the Required Lenders definition in this
Agreement, (e) the release of any Borrower or Guarantor of Payment (except in
connection with a merger, disposition or other transaction permitted hereunder),
or (f) any amendment to this Section 10.3 or Section 8.5 or 9.9 hereof. Notice
of amendments or consents ratified by the Lenders hereunder shall be forwarded
by Agent to all of the Lenders. Each Lender or other holder of a Note (or
interest in any Loan) shall be bound by any amendment, waiver or consent
obtained as authorized by this Section, regardless of its failure to agree
thereto.
Section 10.4. Notices. All notices, requests, demands and other
communications provided for hereunder shall be in writing and, if to a Borrower,
mailed or delivered to it, addressed to it at the address specified on the
signature pages of this Agreement, if to a Lender, mailed or delivered to it,
addressed to the address of such Lender specified on the signature pages of this
Agreement, or, as to each party, at such other address as shall be designated by
such
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party in a written notice to each of the other parties. All notices, statements,
requests, demands and other communications provided for hereunder shall be given
by overnight delivery or first class mail with postage prepaid by registered or
certified mail, addressed as aforesaid, or sent by facsimile with telephonic
confirmation of receipt, except that all notices hereunder shall not be
effective until received.
Section 10.5. Costs, Expenses and Taxes. US Borrower and, to the extent
relating to the Canadian Commitment, Canadian Borrower, agree to pay on demand
all costs and expenses of Agent, including but not limited to, (a) syndication,
administration, travel and out-of-pocket expenses, including but not limited to
attorneys' fees and expenses, of Agent in connection with the preparation,
negotiation and closing of the Intercreditor Agreement, the Lender Agreement and
the Loan Documents, the administration of the Intercreditor Agreement, the
Lender Agreement and the Loan Documents, and the collection and disbursement of
all funds hereunder and the other instruments and documents to be delivered
hereunder, (b) extraordinary expenses of Agent in connection with the
administration of the Intercreditor Agreement, the Lender Agreement and the Loan
Documents and the other instruments and documents to be delivered hereunder, (c)
the reasonable fees and out-of-pocket expenses of special counsel for Agent,
with respect to the foregoing, and of local counsel, if any, who may be retained
by said special counsel with respect thereto, and (d) the reasonable fees and
out-of-pocket expenses of counsel to Canadian Funding Agent incurred in
connection with the Lender Agreement and the Loan Documents. US Borrower and, to
the extent relating to the Canadian Commitment, Canadian Borrower, also agree to
pay on demand all costs and expenses of Agent and the Lenders, including
reasonable attorneys' fees, in connection with the restructuring or enforcement
of the Obligations, this Agreement, the Intercreditor Agreement, the Lender
Agreement or any Related Writing. In addition, US Borrower and, to the extent
relating to the Canadian Commitment, Canadian Borrower, shall pay any and all
stamp and other taxes and fees payable or determined to be payable in connection
with the execution and delivery of the Loan Documents, and the other instruments
and documents to be delivered hereunder, and agree to hold Agent, Canadian
Funding Agent and each Lender harmless from and against any and all liabilities
with respect to or resulting from any delay in paying or failure to pay such
taxes or fees.
Section 10.6. Indemnification.
(a) US Borrower. Subject to subpart (c) below, US Borrower agrees to
defend, indemnify and hold harmless Agent, Canadian Funding Agent and the US
Lenders (and their respective affiliates, officers, directors, attorneys, agents
and employees) from and against any and all liabilities, obligations, losses,
damages, penalties, actions, judgments, suits, costs, expenses (including
attorneys' fees) or disbursements of any kind or nature whatsoever that may be
imposed on, incurred by or asserted against Agent, Canadian Funding Agent or any
Lender in connection with any investigative, administrative or judicial
proceeding (whether or not such Lender, Agent or Canadian Funding Agent shall be
designated a party thereto) or any other claim by any Person relating to or
arising out of the Intercreditor Agreement, the Lender Agreement and any Loan
Document or any actual or proposed use of proceeds of the Loans or any of the
Obligations, or any activities of any Company or its Affiliates.
81
(b) Canadian Borrower. Subject to subpart (c) below, Canadian Borrower
agrees to defend, indemnify and hold harmless Agent, Canadian Funding Agent and
the Canadian Lenders (and their respective affiliates, officers, directors,
attorneys, agents and employees) from and against any and all liabilities,
obligations, losses, damages, penalties, actions, judgments, suits, costs,
expenses (including reasonable attorneys' fees) or disbursements of any kind or
nature whatsoever that may be imposed on, incurred by or asserted against Agent,
Canadian Funding Agent or any Canadian Lender in connection with any
investigative, administrative or judicial proceeding (whether or not such
Canadian Lender, Canadian Funding Agent or Agent shall be designated a party
thereto) or any other claim by any Person relating to or arising out of the
Intercreditor Agreement, the Lender Agreement and any Loan Document executed by
Canadian Borrower or any actual or proposed use of proceeds of the Canadian
Revolving Loans or the Canadian Swing Loans to Canadian Borrower or any of the
Applicable Debt, or any activities of any Company or its Affiliates in
connection with the Canadian Commitment.
(c) Generally. None of Agent, Canadian Funding Agent or any Lender shall
have the right to be indemnified under this Section for its own gross negligence
or willful misconduct, as determined by a court of competent jurisdiction. All
obligations provided for in this Section 10.6 shall survive any termination of
this Agreement.
Section 10.7. Obligations Several; No Fiduciary Obligations. The
obligations of the Lenders hereunder are several and not joint. Nothing
contained in this Agreement and no action taken by Agent, Canadian Funding Agent
or the Lenders pursuant hereto shall be deemed to constitute Agent, Canadian
Funding Agent or the Lenders a partnership, association, joint venture or other
entity. No default by any Lender hereunder shall excuse the other Lenders from
any obligation under this Agreement; but no Lender shall have or acquire any
additional obligation of any kind by reason of such default. The relationship
between Borrowers and the Lenders with respect to the Loan Documents and the
Related Writings is and shall be solely that of debtors and creditors,
respectively, and neither Agent or Canadian Funding Agent, nor any Lender shall
have any fiduciary obligation toward any Credit Party with respect to any such
documents or the transactions contemplated thereby.
Section 10.8. Execution in Counterparts. This Agreement may be executed in
any number of counterparts and by different parties hereto in separate
counterparts, and by facsimile signature, each of which counterparts when so
executed and delivered shall be deemed to be an original and all of which taken
together shall constitute but one and the same agreement.
Section 10.9. Binding Effect; Borrowers' Assignment. This Agreement shall
become effective when it shall have been executed by each Borrower, Agent,
Canadian Funding Agent and each Lender and thereafter shall be binding upon and
inure to the benefit of each Borrower, Agent, Canadian Funding Agent and each of
the Lenders and their respective successors and assigns, except that no Borrower
shall have the right to assign its rights hereunder or any interest herein
without the prior written consent of Agent and all of the Lenders.
Section 10.10. Lender Assignments.
82
(a) Assignments of Commitments. Each Lender shall have the right at any
time or times to assign to an Eligible Transferee (other than to a Lender that
shall not be in compliance with this Agreement), without recourse, all or a
percentage of all of the following: (i) such Lender's Commitment, (ii) all Loans
made by that Lender, (iii) such Lender's Notes, and (iv) such Lender's interest
in any Letter of Credit or Swing Loan, and any participation purchased pursuant
to Section 2.2(b), 2.2(c) or 8.5 hereof.
(b) Prior Consent. No assignment may be consummated pursuant to this
Section 10.10 without the prior written consent of US Borrower and Agent (other
than an assignment by any Lender to another Lender or to any affiliate of such
Lender which affiliate is an Eligible Transferee and either wholly-owned by a
Lender or is wholly-owned by a Person that wholly owns, either directly or
indirectly, such Lender), which consent of US Borrower and Agent shall not be
unreasonably withheld; provided, however, that the consent of US Borrower shall
not be required if, at the time of the proposed assignment, any Event of Default
shall then exist. Anything herein to the contrary notwithstanding, any Lender
may at any time make a collateral assignment of all or any portion of its rights
under the Loan Documents to a Federal Reserve Bank, and no such assignment shall
release such assigning Lender from its obligations hereunder.
(c) Minimum Amount. Each such assignment shall be in a minimum amount of
the lesser of Five Million Dollars ($5,000,000) of the assignor's Commitment and
interest herein, or the entire amount of the assignor's Commitment and interest
herein.
(d) Assignment Fee. Unless the assignment shall be to an affiliate of the
assignor or the assignment shall be due to merger of the assignor or for
regulatory purposes, either the assignor or the assignee shall remit to Agent,
for its own account, an administrative fee of Three Thousand Five Hundred
Dollars ($3,500).
(e) Assignment Agreement. Unless the assignment shall be due to merger of
the assignor or a collateral assignment for regulatory purposes, the assignor
shall (i) cause the assignee to execute and deliver to US Borrower and Agent an
Assignment Agreement, and (ii) execute and deliver, or cause the assignee to
execute and deliver, as the case may be, to Agent such additional amendments,
assurances and other writings as Agent may reasonably require.
(f) Non-U.S. Assignee. If the assignment is to be made in respect of the
US Commitment to an assignee that is organized under the laws of any
jurisdiction other than the United States or any state thereof, the assignor US
Lender shall cause such assignee, at least five Business Days prior to the
effective date of such assignment, (i) to represent to the assignor US Lender
(for the benefit of the assignor US Lender, Agent and the Credit Parties) that
under applicable law and treaties no taxes will be required to be withheld by
Agent, the Credit Parties or the assignor with respect to any payments to be
made to such assignee in respect of the Loans hereunder, (ii) to furnish to the
assignor US Lender (and, in the case of any assignee registered in the Register
(as defined below), Agent and the Credit Parties) either U.S. Internal Revenue
Service Form W-8ECI or U.S. Internal Revenue Service Form W-8BEN, as applicable
(wherein such assignee claims entitlement to complete exemption from U.S.
federal withholding tax on all payments hereunder), and (iii) to agree (for the
benefit of the assignor, Agent and the Credit
83
Parties) to provide to the assignor US Lender (and, in the case of any assignee
registered in the Register, to Agent and the Credit Parties) a new Form W-8ECI
or Form W-8BEN, as applicable, upon the expiration or obsolescence of any
previously delivered form and comparable statements in accordance with
applicable U.S. laws and regulations and amendments duly executed and completed
by such assignee, and to comply from time to time with all applicable U.S. laws
and regulations with regard to such withholding tax exemption.
(g) Deliveries by Borrowers. Upon satisfaction of all applicable
requirements specified in subsections (a) through (f) above, Borrowers shall
execute and deliver (i) to Agent, the assignor and the assignee, any consent or
release (of all or a portion of the obligations of the assignor) required to be
delivered by Borrowers in connection with the Assignment Agreement, and (ii) to
the assignee and the assignor, if applicable, an appropriate Note or Notes.
After delivery of the new Note or Notes, the assignor's Note or Notes being
replaced shall be returned to US Borrower marked "replaced".
(h) Effect of Assignment. Upon satisfaction of all applicable requirements
set forth in subsections (a) through (g) above, and any other condition
contained in this Section 10.10, (i) the assignee shall become and thereafter be
deemed to be a "Lender" for the purposes of this Agreement, (ii) the assignor
shall be released from its obligations hereunder to the extent that its interest
has been assigned, (iii) in the event that the assignor's entire interest has
been assigned, , the assignor shall cease to be and thereafter shall no longer
be deemed to be a "Lender" and (iv) the signature pages hereto and Schedule 1
hereto shall be automatically amended, without further action, to reflect the
result of any such assignment.
(i) Agent to Maintain Register. Agent shall maintain at the address for
notices referred to in Section 10.4 hereof a copy of each Assignment Agreement
delivered to it and a register (the "Register") for the recordation of the names
and addresses of the Lenders and the Commitment of, and principal amount of the
Loans owing to, each Lender from time to time. The entries in the Register shall
be conclusive, in the absence of manifest or demonstrable error, and Borrowers,
Agent and the Lenders may treat each Person whose name is recorded in the
Register as the owner of the Loan recorded therein for all purposes of this
Agreement. The Register shall be available for inspection by Borrowers or any
Lender at any reasonable time and from time to time upon reasonable prior
notice.
Section 10.11. Sale of Participations. Any Lender may, in the ordinary
course of its commercial banking business and in accordance with applicable law,
at any time sell participations to one or more Eligible Transferees (each a
"Participant") in all or a portion of its rights or obligations under this
Agreement and the other Loan Documents (including, without limitation, all or a
portion of the Commitment and the Loans and participations owing to it and the
Note held by it); provided that:
(a) any such Lender's obligations under this Agreement and the other Loan
Documents shall remain unchanged;
(b) such Lender shall remain solely responsible to the other parties
hereto for the performance of such obligations;
84
(c) the parties hereto shall continue to deal solely and directly with
such Lender in connection with such Lender's rights and obligations under this
Agreement and each of the other Loan Documents;
(d) such Participant shall be bound by the provisions of Section 8.5
hereof, and the Lender selling such participation shall obtain from such
Participant a written confirmation of its agreement to be so bound; and
(e) no Participant (unless such Participant is itself a Lender) shall be
entitled to require such Lender to take or refrain from taking action under this
Agreement or under any other Loan Document, except that such Lender may agree
with such Participant that such Lender will not, without such Participant's
consent, take action of the type described as follows:
(i) increase the portion of the participation amount of any
Participant over the amount thereof then in effect, or extend the
Commitment Period, without the written consent of each Participant
affected thereby; or
(ii) reduce the principal amount of or extend the time for any
payment of principal of any Loan, or reduce the rate of interest or extend
the time for payment of interest on any Loan, or reduce the facility or
utilization fee, without the written consent of each Participant affected
thereby.
Borrowers agree that any Lender that sells participations pursuant to this
Section 10.11 shall still be entitled to the benefits of Article III hereof,
notwithstanding any such transfer; provided, however, that the obligations of
Borrowers shall not increase as a result of such transfer and Borrowers shall
have no obligation to any Participant.
Section 10.12. Severability of Provisions; Captions; Attachments. Any
provision of this Agreement that shall be prohibited or unenforceable in any
jurisdiction shall, as to such jurisdiction, be ineffective to the extent of
such prohibition or unenforceability without invalidating the remaining
provisions hereof or affecting the validity or enforceability of such provision
in any other jurisdiction. The several captions to Sections and subsections
herein are inserted for convenience only and shall be ignored in interpreting
the provisions of this Agreement. Each schedule or exhibit attached to this
Agreement shall be incorporated herein and shall be deemed to be a part hereof.
Section 10.13. Investment Purpose. Each of the Lenders represents and
warrants to Borrowers that it is entering into this Agreement with the present
intention of acquiring any Note issued pursuant hereto for investment purposes
only and not for the purpose of distribution or resale, it being understood,
however, that each Lender shall at all times retain full control over the
disposition of its assets.
Section 10.14. Entire Agreement. This Agreement, any Note and any other
Loan Document or other agreement, document or instrument attached hereto or
executed on or as of the Closing Date integrate all the terms and conditions
mentioned herein or incidental hereto and
85
supersede all oral representations and negotiations and prior writings with
respect to the subject matter hereof.
Section 10.15. Confidentiality. Agent, Canadian Funding Agent and each
Lender shall hold all Confidential Information in accordance with the customary
procedures of Agent, Canadian Funding Agent or such Lender for handling
confidential information of this nature, and in accordance with safe and sound
banking practices. Notwithstanding the foregoing, Agent, Canadian Funding Agent
or any Lender may in any event make disclosures of, and furnish copies of
Confidential Information (a) to another agent under this Agreement or another
Lender; (b) when reasonably required by any bona fide transferee or participant
in connection with the contemplated transfer of any Loans or Commitment or
participation therein (provided that each such prospective transferee or
participant shall execute an agreement for the benefit of Borrowers with such
prospective transferor Lender or participant containing provisions substantially
identical to those contained in this Section 10.15); (c) to the parent
corporation or other affiliates of Agent, Canadian Funding Agent or such Lender,
and to their respective auditors and attorneys; and (d) as required or requested
by any Governmental Authority or representative thereof, or pursuant to legal
process, provided, that, unless specifically prohibited by applicable law or
court order, Agent, Canadian Funding Agent or such Lender, as applicable, shall
notify the chief financial officer of US Borrower of any request by any
Governmental Authority or representative thereof (other than any such request in
connection with an examination of the financial condition of Agent, Canadian
Funding Agent or such Lender by such Governmental Authority), and of any other
request pursuant to legal process for disclosure of any such non-public
information prior to disclosure of such Confidential Information. In no event
shall Agent, Canadian Funding Agent or any Lender be obligated or required to
return any materials furnished by or on behalf of any Company. Each Borrower
hereby agrees that the failure of Agent, Canadian Funding Agent or any Lender to
comply with the provisions of this Section 10.15 shall not relieve any Borrower
of any of the obligations to Agent, Canadian Funding Agent and the Lenders under
this Agreement and the other Loan Documents.
Section 10.16. Legal Representation of Parties. The Loan Documents were
negotiated by the parties with the benefit of legal representation and any rule
of construction or interpretation otherwise requiring this Agreement or any
other Loan Document to be construed or interpreted against any party shall not
apply to any construction or interpretation hereof or thereof.
Section 10.17. Currency.
(a) Currency Equivalent Generally. For the purposes of making valuations
or computations under this Agreement (but not for the purposes of the
preparation of any financial statements delivered pursuant hereto), unless
expressly provided otherwise, where a reference is made to a dollar amount the
amount is to be considered as the amount in Dollars and, therefor, each other
currency shall be converted into the Dollar Equivalent.
(b) Judgment Currency. If Agent, on behalf of the Lenders, obtains a
judgment or judgments against any Credit Party in Canadian Dollars or an
Alternate Currency, in respect of obligations denominated in Dollars, the
obligations of such Credit Party in respect of any sum
86
adjudged to be due to Agent or the Lenders hereunder or under the Notes (the
"Judgment Amount") shall be discharged only to the extent that, on the Business
Day following receipt by Agent of the Judgment Amount in Canadian Dollars or
such Alternate Currency, Agent, in accordance with normal banking procedures,
purchases Dollars with the Judgment Amount in Canadian Dollars or such Alternate
Currency. If the amount of Dollars so purchased is less than the amount of
Dollars that could have been purchased with the Judgment Amount on the date or
dates the Judgment Amount (excluding the portion of the Judgment Amount that has
accrued as a result of the failure of such Credit Party to pay the sum
originally due hereunder or under the Notes when it was originally due and owing
to Agent or the Lenders hereunder or under the Notes) was originally due and
owing to Agent or the Lenders hereunder or under the Notes (the "Original Due
Date") (the "Loss"), such Credit Party agrees as a separate obligation and
notwithstanding any such judgment, to indemnify Agent or such Lender, as the
case may be, against the Loss, and if the amount of Dollars so purchased exceeds
the amount of Dollars that could have been purchased with the Judgment Amount on
the Original Due Date, Agent or such Lender agrees to remit such excess to such
Credit Party.
Section 10.18. Governing Law; Submission to Jurisdiction. This Agreement,
each of the Notes and any Related Writing shall be governed by and construed in
accordance with the laws of the State of Ohio and the respective rights and
obligations of Borrowers, Agent, and the Lenders shall be governed by Ohio law,
without regard to principles of conflict of laws. Each Borrower hereby
irrevocably submits to the non-exclusive jurisdiction of any Ohio state or
federal court sitting in Cleveland, Ohio, over any action or proceeding arising
out of or relating to this Agreement, the Obligations or any Related Writing,
and each Borrower hereby irrevocably agrees that all claims in respect of such
action or proceeding may be heard and determined in such Ohio state or federal
court. Each Borrower, on behalf of itself and its Subsidiaries, hereby
irrevocably waives, to the fullest extent permitted by law, any objection it may
now or hereafter have to the laying of venue in any action or proceeding in any
such court as well as any right it may now or hereafter have to remove such
action or proceeding, once commenced, to another court on the grounds of FORUM
NON CONVENIENS or otherwise. Each Borrower agrees that a final, nonappealable
judgment in any such action or proceeding shall be conclusive and may be
enforced in other jurisdictions by suit on the judgment or in any other manner
provided by law.
[Remainder of page left intentionally blank]
87
Section 10.19. JURY TRIAL WAIVER. TO THE EXTENT PERMITTED BY LAW, EACH
BORROWER, AGENT, CANADIAN FUNDING AGENT AND EACH LENDER WAIVE ANY RIGHT TO HAVE
A JURY PARTICIPATE IN RESOLVING ANY DISPUTE, WHETHER SOUNDING IN CONTRACT, TORT
OR OTHERWISE, AMONG BORROWERS, AGENT, CANADIAN FUNDING AGENT AND THE LENDERS, OR
ANY THEREOF, ARISING OUT OF, IN CONNECTION WITH, RELATED TO, OR INCIDENTAL TO
THE RELATIONSHIP ESTABLISHED AMONG THEM IN CONNECTION WITH THIS AGREEMENT OR ANY
NOTE OR OTHER INSTRUMENT, DOCUMENT OR AGREEMENT EXECUTED OR DELIVERED IN
CONNECTION HEREWITH OR THE TRANSACTIONS RELATED THERETO.
IN WITNESS WHEREOF, the parties have executed and delivered this Credit
Agreement as of the date first set forth above.
Address: One Strawberry Lane THE J. M. SMUCKER COMPANY
Orrville, Ohio 44667
Attention: Treasurer By: /s/ Mark R. Belgya
-------------------
Mark R. Belgya
Vice President and Treasurer
Address: One Strawberry Lane J.M. SMUCKER (CANADA) INC.
Orrville, Ohio 44667
Attention: Treasurer By: /s/ Mark R. Belgya
-------------------
Mark R. Belgya
Treasurer
Address: 127 Public Square KEYBANK NATIONAL ASSOCIATION,
Cleveland, Ohio 44114-1306 as Agent and as a Lender
Attention: Institutional Banking
By: /s/ Lawrence A. Mack
---------------------
Name: Lawrence A. Mack
Title: Sr. Vice President
Signature Page
1 of 2 of the Credit Agreement
Address: 1 First Canadian Place, 19th Floor BANK OF MONTREAL,
Toronto, Ontario M5X1A1, as Canadian Funding Agent,
Attention: Manager, Global Documentation Agent and as a
Distribution Services Lender
By: /s/ Ben Ciallella
---------------------------
Name: Ben Ciallella
Title: Vice President
Address: 1404 East Ninth Street FIFTH THIRD BANK
Cleveland, Ohio 44114
Attention: Martin McGinty By: /s/ Martin McGinty
---------------------------
Martin McGinty
Vice President
Address: 1300 East Ninth Street, Suite 1000 LASALLE BANK NATIONAL
Cleveland, Ohio 44114 ASSOCIATION
Attn: Commercial Lending
By: /s/ Patrick F. Dunphy
---------------------------
Patrick F. Dunphy
Senior Vice President
Address: 79 Wellington Street West LASALLE BUSINESS CREDIT,
Suite 1500 A DIVISION OF ABN AMRO BANK
P.O. Box 114 N.V., CANADA BRANCH
Toronto Dominion Centre
Toronto, Ontario By: /s/ Darcy Mack/Keith Hughes
M5K 1G8 ---------------------------
Attention: LaSalle Business Credit Name: Darcy Mack / Keith Hughes
Title: V.P., Asset Based
Lending / Senior Vice President
Address: 111 West Monroe Street HARRIS TRUST AND SAVINGS BANK
Chicago, Illinois 60603-4095
Attention: Food Group By: /s/ Erica T. Kuhlmann
---------------------------
Name: Erica T. Kuhlmann
Title: Managing Director
Signature Page
2 of 2 of the Credit Agreement
SCHEDULE 1
US REVOLVING US REVOLVING
CREDIT CREDIT
COMMITMENT COMMITMENT
US LENDERS PERCENTAGE AMOUNT MAXIMUM AMOUNT
---------- ---------- ------ --------------
KeyBank National Association 54.55% $ 60,000,000 $ 60,000,000
Fifth Third Bank 27.27% $ 30,000,000 $ 30,000,000
LaSalle Bank National Association 13.64% $ 15,000,000 $ 15,000,000
Harris Trust and Savings Bank 4.54% $ 5,000,000 $ 5,000,000
------ ------------ ------------
Maximum US Revolving Amount 100.00% $110,000,000 $110,000,000
------ ------------ ------------
CANADIAN CANADIAN
REVOLVING REVOLVING
CREDIT CREDIT
COMMITMENT COMMITMENT
CANADIAN LENDERS PERCENTAGE AMOUNT MAXIMUM AMOUNT
---------------- ---------- ------ --------------
Bank of Montreal 71.43% $50,000,000 $ 50,000,000
LaSalle Business Credit, a division of
ABN AMRO Bank N.V., Canada
Branch 28.57% $20,000,000 $ 20,000,000
------ ----------- ------------
Maximum Canadian Revolving Amount 100.00% $70,000,000 $ 70,000,000
------ ----------- ------------
TOTAL COMMITMENT AMOUNT $180,000,000
------------
S-1
EXHIBIT A
FORM OF
US REVOLVING CREDIT NOTE
$ __________________________ Cleveland, Ohio
June 18, 2004
FOR VALUE RECEIVED, the undersigned, THE J. M. SMUCKER COMPANY, an Ohio
corporation ("US Borrower"), promises to pay, on the last day of the Commitment
Period, as defined in the Credit Agreement (as hereinafter defined), to the
order of _______ ("Lender") at the main office of KEYBANK NATIONAL ASSOCIATION,
as Agent, as hereinafter defined, 127 Public Square, Cleveland, Ohio 44114-1306
the principal sum of
[__________________] AND 00/100 DOLLARS
or the aggregate unpaid principal amount of all US Revolving Loans, as defined
in the Credit Agreement made by Lender to US Borrower pursuant to Section 2.2 of
the Credit Agreement, whichever is less, in lawful money of the United States of
America; provided that US Revolving Loans that are Alternate Currency Loans, as
defined in the Credit Agreement, shall be payable in the applicable Alternate
Currency, as defined in the Credit Agreement. US Borrower also agrees to pay any
additional amount that is required to be paid pursuant to Section 10.17 of the
Credit Agreement.
As used herein, "Credit Agreement" means the Credit Agreement dated as of
June 18, 2004, among US Borrower and Canadian Borrower, as defined therein, the
Lenders, as defined therein, KeyBank National Association, as lead arranger and
administrative agent for the Lenders ("Agent"), and Bank of Montreal, as the
Canadian funding agent and documentation agent, as the same may from time to
time be amended, restated or otherwise modified. Each capitalized term used
herein that is defined in the Credit Agreement and not otherwise defined herein
shall have the meaning ascribed to it in the Credit Agreement.
US Borrower also promises to pay interest on the unpaid principal amount
of each US Revolving Loan from time to time outstanding, from the date of such
US Revolving Loan until the payment in full thereof, at the rates per annum that
shall be determined in accordance with the provisions of Section 2.4(a) of the
Credit Agreement. Such interest shall be payable on each date provided for in
such Section 2.4(a); provided, however, that interest on any principal portion
that is not paid when due shall be payable on demand.
The portions of the principal sum hereof from time to time representing US
Base Rate Loans, US Eurodollar Loans and Alternate Currency Loans, and payments
of principal of any thereof, shall be shown on the records of Lender by such
method as Lender may generally employ; provided, however, that failure to make
any such entry shall in no way detract from the obligations of US Borrower under
this Note.
E-1
If this Note shall not be paid at maturity, whether such maturity occurs
by reason of lapse of time or by operation of any provision for acceleration of
maturity contained in the Credit Agreement, the principal hereof and the unpaid
interest thereon shall bear interest, until paid, at a rate per annum equal to
the Default Rate, if required by Section 2.4(e) of the Credit Agreement. All
payments of principal of and interest on this Note shall be made in immediately
available funds.
This Note is one of the US Revolving Credit Notes referred to in the
Credit Agreement. Reference is made to the Credit Agreement for a description of
the right of the undersigned to anticipate payments hereof, the right of the
holder hereof to declare this Note due prior to its stated maturity, and other
terms and conditions upon which this Note is issued. This Note shall be governed
by and construed in accordance with the laws of the State of Ohio, without
regard to principles of conflicts of laws.
Except as expressly provided in the Credit Agreement, US Borrower
expressly waives presentment, demand, protest and notice of any kind.
JURY TRIAL WAIVER. US BORROWER, TO THE EXTENT PERMITTED BY LAW, HEREBY
WAIVES ANY RIGHT TO HAVE A JURY PARTICIPATE IN RESOLVING ANY DISPUTE, WHETHER
SOUNDING IN CONTRACT, TORT OR OTHERWISE, AMONG US BORROWER, CANADIAN BORROWER,
AGENT AND THE LENDERS, OR ANY THEREOF, ARISING OUT OF, IN CONNECTION WITH,
RELATED TO, OR INCIDENTAL TO THE RELATIONSHIP ESTABLISHED AMONG THEM IN
CONNECTION WITH THE CREDIT AGREEMENT, THIS NOTE OR ANY OTHER NOTE OR OTHER
INSTRUMENT, DOCUMENT OR AGREEMENT EXECUTED OR DELIVERED IN CONNECTION HEREWITH
OR THE TRANSACTIONS RELATED THERETO.
THE J. M. SMUCKER COMPANY
By: _____________________
Name: ___________________
Title: __________________
E-2
EXHIBIT B
FORM OF
US SWING LINE NOTE
$ 15,000,000 Cleveland, Ohio
June 18, 2004
FOR VALUE RECEIVED, the undersigned, THE J. M. SMUCKER COMPANY, an Ohio
corporation ("US Borrower"), promises to pay, on the last day of the Commitment
Period, as defined in the Credit Agreement (as hereinafter defined), to the
order of KEYBANK NATIONAL ASSOCIATION ("US Swing Line Lender") at the main
office of KEYBANK NATIONAL ASSOCIATION, as Agent, as hereinafter defined, 127
Public Square, Cleveland, Ohio 44114-1306 the principal sum of
FIFTEEN MILLION AND 00/100 DOLLARS
or the aggregate unpaid principal amount of all US Swing Loans, as defined in
the Credit Agreement (as hereinafter defined) made by US Swing Line Lender to US
Borrower pursuant to Section 2.2(c) of the Credit Agreement, whichever is less,
in lawful money of the United States of America on the earlier of the last day
of the Commitment Period, as defined in the Credit Agreement, or, with respect
to each US Swing Loan, the Swing Loan Maturity Date applicable thereto
As used herein, "Credit Agreement" means the Credit Agreement dated as of
June 18, 2004, among US Borrower and Canadian Borrower, as defined therein, the
Lenders, as defined therein, KeyBank National Association, as lead arranger and
administrative agent for the Lenders ("Agent"), and Bank of Montreal, as the
Canadian funding agent and documentation agent, as the same may from time to
time be amended, restated or otherwise modified. Each capitalized term used
herein that is defined in the Credit Agreement and not otherwise defined herein
shall have the meaning ascribed to it in the Credit Agreement.
US Borrower also promises to pay interest on the unpaid principal amount
of each US Swing Loan from time to time outstanding, from the date of such US
Swing Loan until the payment in full thereof, at the rates per annum that shall
be determined in accordance with the provisions of Section 2.4(b) of the Credit
Agreement. Such interest shall be payable on each date provided for in such
Section 2.4(b); provided, however, that interest on any principal portion which
is not paid when due shall be payable on demand.
The principal sum hereof from time to time and the payments of principal
and interest thereon, shall be shown on the records of US Swing Line Lender by
such method as US Swing Line Lender may generally employ; provided, however,
that failure to make any such entry shall in no way detract from the obligation
of US Borrower under this Note.
If this Note shall not be paid at maturity, whether such maturity occurs
by reason of lapse of time or by operation of any provision for acceleration of
maturity contained in the Credit Agreement, the principal hereof and the unpaid
interest thereon shall bear interest, until paid, at a
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rate per annum equal to the Default Rate, if required by Section 2.4(e) of the
Credit Agreement. All payments of principal of and interest on this Note shall
be made in immediately available funds.
This Note is the US Swing Line Note referred to in the Credit Agreement.
Reference is made to the Credit Agreement for a description of the right of the
undersigned to anticipate payments hereof, the right of the holder hereof to
declare this Note due prior to its stated maturity, and other terms and
conditions upon which this Note is issued. This Note shall be governed by and
construed in accordance with the laws of the State of Ohio, without regard to
principles of conflicts of laws.
Except as expressly provided in the Credit Agreement, US Borrower
expressly waives presentment, demand, protest and notice of any kind.
JURY TRIAL WAIVER. US BORROWER, TO THE EXTENT PERMITTED BY LAW, HEREBY
WAIVES ANY RIGHT TO HAVE A JURY PARTICIPATE IN RESOLVING ANY DISPUTE, WHETHER
SOUNDING IN CONTRACT, TORT OR OTHERWISE, AMONG US BORROWER, CANADIAN BORROWER,
AGENT AND THE LENDERS, OR ANY THEREOF, ARISING OUT OF, IN CONNECTION WITH,
RELATED TO, OR INCIDENTAL TO THE RELATIONSHIP ESTABLISHED AMONG THEM IN
CONNECTION WITH THE CREDIT AGREEMENT, THIS NOTE OR ANY OTHER NOTE OR OTHER
INSTRUMENT, DOCUMENT OR AGREEMENT EXECUTED OR DELIVERED IN CONNECTION HEREWITH
OR THE TRANSACTIONS RELATED THERETO.
THE J. M. SMUCKER COMPANY
By: _____________________
Name: ___________________
Title: __________________
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EXHIBIT C
FORM OF
CANADIAN REVOLVING CREDIT NOTE
$____________ Cleveland, Ohio
June 18, 2004
FOR VALUE RECEIVED, the undersigned, J.M. SMUCKER (CANADA) INC., a
corporation incorporated under the laws of Canada ("Canadian Borrower"),
promises to pay, on the last day of the Commitment Period, as defined in the
Credit Agreement (as hereinafter defined), to the order of _______ ("Lender") at
the Designated Lending Office, as defined in the Credit Agreement, the principal
sum of
[__________________] AND 00/100 DOLLARS
or the Dollar Equivalent of the aggregate unpaid principal amount of all
Canadian Revolving Loans, as defined in the Credit Agreement made by Canadian
Lender to Canadian Borrower pursuant to Section 2.3(a) of the Credit Agreement,
whichever is less, in lawful money of the United States of America; provided
that Canadian Revolving Loans that are Canadian CAD Base Rate Loans or CAD CDOR
Loans, as each such term is defined in the Credit Agreement, shall be payable in
Canadian Dollars. Canadian Borrower also agrees to pay any additional amount
that is required to be paid pursuant to Section 10.17 of the Credit Agreement.
As used herein, "Credit Agreement" means the Credit Agreement dated as of
June 18, 2004, among US Borrower and Canadian Borrower, as defined therein, the
Lenders, as defined therein, KeyBank National Association, as lead arranger and
administrative agent for the Lenders ("Agent"), and Bank of Montreal, as the
Canadian funding agent and documentation agent, as the same may from time to
time be amended, restated or otherwise modified. Each capitalized term used
herein that is defined in the Credit Agreement and not otherwise defined herein
shall have the meaning ascribed to it in the Credit Agreement.
Canadian Borrower also promises to pay interest on the unpaid principal
amount of each Canadian Revolving Loan from time to time outstanding, from the
date of such Canadian Revolving Loan until the payment in full thereof, at the
rates per annum that shall be determined in accordance with the provisions of
Section 2.4(c) of the Credit Agreement. Such interest shall be payable on each
date provided for in such Section 2.4(c); provided, however, that interest on
any principal portion that is not paid when due shall be payable on demand.
The portions of the principal sum hereof from time to time representing
Canadian CAD Base Rate Loans, Canadian USD Base Rate Loans, Canadian Eurodollar
Loans and CAD CDOR Loans, and payments of principal of any thereof, shall be
shown on the records of Lender by such method as Lender may generally employ;
provided, however, that failure to make any such entry shall in no way detract
from the obligations of Canadian Borrower under this Note.
If this Note shall not be paid at maturity, whether such maturity occurs
by reason of lapse of time or by operation of any provision for acceleration of
maturity contained in the Credit Agreement, the principal hereof and the unpaid
interest thereon shall bear interest, until paid, at a
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rate per annum equal to the Default Rate, if required by Section 2.4(e) of the
Credit Agreement. All payments of principal of and interest on this Note shall
be made in immediately available funds.
This Note is one of the Canadian Revolving Credit Notes referred to in the
Credit Agreement. Reference is made to the Credit Agreement for a description of
the right of the undersigned to anticipate payments hereof, the right of the
holder hereof to declare this Note due prior to its stated maturity, and other
terms and conditions upon which this Note is issued. This Note shall be governed
by and construed in accordance with the laws of the State of Ohio, without
regard to principles of conflicts of laws.
Except as expressly provided in the Credit Agreement, Canadian Borrower
expressly waives presentment, demand, protest and notice of any kind.
JURY TRIAL WAIVER. CANADIAN BORROWER, TO THE EXTENT PERMITTED BY LAW,
HEREBY WAIVES ANY RIGHT TO HAVE A JURY PARTICIPATE IN RESOLVING ANY DISPUTE,
WHETHER SOUNDING IN CONTRACT, TORT OR OTHERWISE, AMONG US BORROWER, CANADIAN
BORROWER, AGENT, CANADIAN FUNDING AGENT AND THE LENDERS, OR ANY THEREOF, ARISING
OUT OF, IN CONNECTION WITH, RELATED TO, OR INCIDENTAL TO THE RELATIONSHIP
ESTABLISHED AMONG THEM IN CONNECTION WITH THE CREDIT AGREEMENT, THIS NOTE OR ANY
OTHER NOTE OR OTHER INSTRUMENT, DOCUMENT OR AGREEMENT EXECUTED OR DELIVERED IN
CONNECTION HEREWITH OR THE TRANSACTIONS RELATED THERETO.
J.M. SMUCKER (CANADA) INC.
By: _____________________
Name: ___________________
Title: __________________
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EXHIBIT D
FORM OF
CANADIAN SWING LINE NOTE
$10,000,000 Cleveland, Ohio
June 18, 2004
FOR VALUE RECEIVED, the undersigned, J.M. SMUCKER (CANADA) INC., a
corporation incorporated under the laws of Canada ("Canadian Borrower"),
promises to pay, on the last day of the Commitment Period, as defined in the
Credit Agreement (as hereinafter defined), to the order of BANK OF MONTREAL
("Canadian Swing Line Lender") at the Designated Lending Office, as defined in
the Credit Agreement, the principal sum of
TEN MILLION AND 00/100 DOLLARS
or the Dollar Equivalent of the aggregate unpaid principal amount of all
Canadian Swing Loans, as defined in the Credit Agreement made by the Canadian
Swing Line Lender to Canadian Borrower pursuant to Section 2.3(b) of the Credit
Agreement, whichever is less, in lawful money of the United States of America on
the earlier of the last day of the Commitment Period, as defined in the Credit
Agreement, or, with respect to each Canadian Swing Loan, the Swing Loan Maturity
Date applicable thereto; provided that Canadian CAD Swing Loans shall be payable
in Canadian Dollars. Canadian Borrower also agrees to pay any additional amount
that is required to be paid pursuant to Section 10.17 of the Credit Agreement.
As used herein, "Credit Agreement" means the Credit Agreement dated as of
June 18, 2004, among US Borrower and Canadian Borrower, as defined therein, the
Lenders, as defined therein, KeyBank National Association, as lead arranger and
administrative agent for the Lenders ("Agent"), and Bank of Montreal, as the
Canadian funding agent and documentation agent, as the same may from time to
time be amended, restated or otherwise modified. Each capitalized term used
herein that is defined in the Credit Agreement and not otherwise defined herein
shall have the meaning ascribed to it in the Credit Agreement.
Canadian Borrower also promises to pay interest on the unpaid principal
amount of each Canadian Swing Loan from time to time outstanding, from the date
of such Canadian Swing Loan until the payment in full thereof, at the rates per
annum that shall be determined in accordance with the provisions of Section
2.4(d) of the Credit Agreement. Such interest shall be payable on each date
provided for in such Section 2.4(d); provided, however, that interest on any
principal portion which is not paid when due shall be payable on demand.
The principal sum hereof from time to time and the payments of principal
and interest thereon, shall be shown on the records of Canadian Swing Line
Lender by such method as Canadian Swing Line Lender may generally employ;
provided, however, that failure to make any such entry shall in no way detract
from the obligation of Canadian Borrower under this Note.
If this Note shall not be paid at maturity, whether such maturity occurs
by reason of lapse of time or by operation of any provision for acceleration of
maturity contained in the Credit
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Agreement, the principal hereof and the unpaid interest thereon shall bear
interest, until paid, at a rate per annum equal to the Default Rate, if required
by Section 2.4(e) of the Credit Agreement. All payments of principal of and
interest on this Note shall be made in immediately available funds.
This Note is the Canadian Swing Line Note referred to in the Credit
Agreement. Reference is made to the Credit Agreement for a description of the
right of the undersigned to anticipate payments hereof, the right of the holder
hereof to declare this Note due prior to its stated maturity, and other terms
and conditions upon which this Note is issued. This Note shall be governed by
and construed in accordance with the laws of the State of Ohio, without regard
to principles of conflicts of laws.
Except as expressly provided in the Credit Agreement, Canadian Borrower
expressly waives presentment, demand, protest and notice of any kind.
JURY TRIAL WAIVER. CANADIAN BORROWER, TO THE EXTENT PERMITTED BY LAW,
HEREBY WAIVES ANY RIGHT TO HAVE A JURY PARTICIPATE IN RESOLVING ANY DISPUTE,
WHETHER SOUNDING IN CONTRACT, TORT OR OTHERWISE, AMONG US BORROWER, CANADIAN
BORROWER, AGENT AND THE LENDERS, OR ANY THEREOF, ARISING OUT OF, IN CONNECTION
WITH, RELATED TO, OR INCIDENTAL TO THE RELATIONSHIP ESTABLISHED AMONG THEM IN
CONNECTION WITH THE CREDIT AGREEMENT, THIS NOTE OR ANY OTHER NOTE OR OTHER
INSTRUMENT, DOCUMENT OR AGREEMENT EXECUTED OR DELIVERED IN CONNECTION HEREWITH
OR THE TRANSACTIONS RELATED THERETO.
J.M. SMUCKER (CANADA) INC.
By: _____________________
Name: ___________________
Title: __________________
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EXHIBIT E
FORM OF
NOTICE OF LOAN
[Date]_______________________, 20____
KeyBank National Association, and, with respect to the Canadian
as Agent Commitment:
127 Public Square Bank of Montreal,
Cleveland, Ohio 44114-0616 as Canadian Funding Agent
Attention: Institutional Banking 1 First Canadian Place, 19th Floor
Toronto, Ontario M5X1A1,
Attention: Manager, Global
Distribution Services
Ladies and Gentlemen:
The undersigned, The J. M. Smucker Company ("US Borrower"), (or US
Borrower or J.M. Smucker (Canada) Inc. ("Canadian Borrower") with respect to
Canadian Revolving Loans and Canadian Swing Loans) refers to the Credit
Agreement, dated as of June 18, 2004 ("Credit Agreement", the terms defined
therein being used herein as therein defined), among US Borrower, Canadian
Borrower, the Lenders, as defined in the Credit Agreement, KeyBank National
Association, as Agent, and Bank of Montreal, as the Canadian Funding Agent, and
hereby gives you notice, pursuant to Section 2.6 of the Credit Agreement that US
Borrower hereby requests a Loan under the Credit Agreement, and in connection
therewith sets forth below the information relating to the Loan (the "Proposed
Loan") as required by Section 2.6 of the Credit Agreement:
US COMMITMENT
(a) The Business Day of the Proposed Loan is __________, 200__.
(b) The amount of the Proposed Loan is $_______________.
(c) The Proposed Loan is to be a: US Base Rate Loan ___ / US Eurodollar
Loan ___ Alternate Currency Loan ___ / US Swing Loan ___ . (Check
one.)
(d) If the Proposed Loan is an Alternate Currency Loan, the Alternate
Currency requested is ___________.
(e) If the Proposed Loan is a Fixed Rate Loan, the Interest Period
requested is one month ___ / two months ___ / three months ___ / six
months ____ / twelve months ___ (this requires prior approval from
all US Lenders). (Check one.)
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CANADIAN COMMITMENT
(a) The Business Day of the Proposed Loan is __________, 200__.
(b) The amount of the Proposed Loan is $_______________/
CAD____________.
(c) The Proposed Loan is to be a: Canadian CAD Base Rate Loan ___ /
Canadian USD Base Rate Loan ___ / CAD CDOR Loan ___ / Canadian
Eurodollar Loan ___ / Canadian CAD Swing Loan ___ / Canadian USD
Swing Loan ___. (Check one.)
(d) If the Proposed Loan is a Fixed Rate Loan, the Interest Period
requested is one month ___ / two months ___ / three months ___ / six
months ____ / twelve months ___ (this requires prior approval from
all Canadian Lenders). (Check one.)
The undersigned hereby certifies on behalf of Borrowers that the following
statements are true on the date hereof, and will be true on the date of the
Proposed Loan:
(i) the representations and warranties contained in each Loan Document
are correct, before and after giving effect to the Proposed Loan and the
application of the proceeds therefrom, as though made on and as of such date;
(ii) no event has occurred and is continuing, or would result from such
Proposed Loan, or the application of proceeds therefrom, that constitutes a
Default or Event of Default; and
(iii) the conditions set forth in Section 2.6 and Article IV of the Credit
Agreement have been satisfied.
THE J. M. SMUCKER COMPANY
By: ________________________________________
Name: ______________________________________
Title: _____________________________________
or, with respect to the Canadian Commitment:
J.M. SMUCKER (CANADA) INC.
By: ________________________________________
Name: ______________________________________
Title: _____________________________________
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EXHIBIT F
COMPLIANCE CERTIFICATE
For Fiscal Quarter ended ____________
THE UNDERSIGNED HEREBY CERTIFIES THAT:
(1) I am the duly elected President or Chief Financial Officer of The J.
M. Smucker Company, an Ohio corporation ("US Borrower");
(2) I am familiar with the terms of that certain Credit Agreement, dated
as of June 18, 2004, among US Borrower, Canadian Borrower, the lenders named on
Schedule 1 thereto (together with their respective successors and assigns,
collectively, the "Lenders"), as defined in the Credit Agreement, KeyBank
National Association, as Agent, and Bank of Montreal, as the Canadian Funding
Agent, (as the same may from time to time be amended, restated or otherwise
modified, the "Credit Agreement", the terms defined therein being used herein as
therein defined), and the terms of the other Loan Documents, and I have made, or
have caused to be made under my supervision, a review in reasonable detail of
the transactions and condition of Borrowers and their Subsidiaries during the
accounting period covered by the attached financial statements;
(3) The review described in paragraph (2) above did not disclose, and I
have no knowledge of, the existence of any condition or event that constitutes
or constituted a Default or Event of Default, at the end of the accounting
period covered by the attached financial statements or as of the date of this
Certificate;
(4) The representations and warranties made by Borrowers contained in each
Loan Document are true and correct as though made on and as of the date hereof;
and
(5) Set forth on Attachment I hereto are calculations of the financial
covenants set forth in Section 5.7 of the Credit Agreement and the calculation
of the Leverage Ratio, which calculations show compliance with the terms
thereof.
IN WITNESS WHEREOF, I have signed this certificate the ___ day of
_________, 20___.
THE J. M. SMUCKER COMPANY
By: _____________________
Name: ___________________
Title:___________________
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EXHIBIT G
FORM OF
ASSIGNMENT AND ACCEPTANCE AGREEMENT
This Assignment and Acceptance Agreement (this "Assignment Agreement")
between ______________________ (the "Assignor") and ______________________ (the
"Assignee") is dated as of ________, 20_. The parties hereto agree as follows:
1. Preliminary Statement. Assignor is a party to a Credit Agreement, dated
as of June 18, 2004 (as the same may from time to time be amended, restated or
otherwise modified, the "Credit Agreement"), among THE J. M. SMUCKER COMPANY.,
an Ohio corporation ("US Borrower"), an [_____________________], a corporation
incorporated under the laws of Canada ("Canadian Borrower" and, together with US
Borrower, collectively, "Borrowers" and, individually, each a "Borrower"), the
lenders named on Schedule 1 thereto (together with their respective successors
and assigns, collectively, the "Lenders" and, individually, each a "Lender"),
KEYBANK NATIONAL ASSOCIATION, as lead arranger and administrative agent for the
Lenders ("Agent"), and BANK OF MONTREAL, as the Canadian funding agent and
documentation agent. Capitalized terms used herein and not otherwise defined
herein shall have the meanings attributed to them in the Credit Agreement.
2. Assignment and Assumption. Assignor hereby sells and assigns to
Assignee, and Assignee hereby purchases and assumes from Assignor, an interest
in and to Assignor's rights and obligations under the Credit Agreement,
effective as of the Assignment Effective Date (as hereinafter defined), equal to
the percentage interest specified on Annex 1 hereto (hereinafter, "Assignee's
Percentage") of Assignor's right, title and interest in and to (a) the
Commitment of Assignor as set forth on Annex 1 hereto (hereinafter, the
"Assigned Amount"), (b) any Loan made by Assignor that is outstanding on the
Assignment Effective Date, (c) Assignor's interest in any Letter of Credit, as
defined in the Credit Agreement, that is issued and outstanding on the
Assignment Effective Date, (d) any Note delivered to Assignor pursuant to the
Credit Agreement, and (e) the Credit Agreement and the other Related Writings.
After giving effect to such sale and assignment and on and after the Assignment
Effective Date, Assignee shall be deemed to have an "Applicable Commitment
Percentage" under the Credit Agreement equal to the Commitment Percentage set
forth in subpart II.A on Annex 1 hereto.
3. Assignment Effective Date. The Assignment Effective Date (the
"Assignment Effective Date") shall be [________ __, ____] (or such other date
agreed to by Agent). On or prior to the Assignment Effective Date, Assignor
shall satisfy the following conditions:
(a) receipt by Agent of this Assignment Agreement, including Annex 1
hereto, properly executed by Assignor and Assignee and accepted and consented to
by Agent and, if necessary pursuant to the provisions of Section 10.10(a) of the
Credit Agreement, by Borrowers;
(b) receipt by Agent from Assignor of a fee of Three Thousand Five Hundred
Dollars ($3,500), if required by Section 10.10 of the Credit Agreement;
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(c) receipt by Agent from Assignee of an administrative questionnaire, or
other similar document, which shall include (i) the address for notices under
the Credit Agreement, (ii) the address of its Lending Office, (iii) wire
transfer instructions for delivery of funds by Agent, (iv) and such other
information as Agent shall request; and
(d) receipt by Agent from Assignor or Assignee of any other information
required pursuant to Section 10.10 of the Credit Agreement or otherwise
necessary to complete the transaction contemplated hereby.
4. Payment Obligations. In consideration for the sale and assignment of
Loans hereunder, Assignee shall pay to Assignor, on the Assignment Effective
Date, the amount agreed to by Assignee and Assignor. Any interest, fees and
other payments accrued prior to the Assignment Effective Date with respect to
the Assigned Amount shall be for the account of Assignor. Any interest, fees and
other payments accrued on and after the Assignment Effective Date with respect
to the Assigned Amount shall be for the account of Assignee. Each of Assignor
and Assignee agrees that it will hold in trust for the other party any interest,
fees or other amounts which it may receive to which the other party is entitled
pursuant to the preceding sentence and to pay the other party any such amounts
which it may receive promptly upon receipt thereof.
5. Credit Determination; Limitations on Assignor's Liability. Assignee
represents and warrants to Assignor, Borrowers, Agent and the Lenders (a) that
it is capable of making and has made and shall continue to make its own credit
determinations and analysis based upon such information as Assignee deemed
sufficient to enter into the transaction contemplated hereby and not based on
any statements or representations by Assignor, (b) Assignee confirms that it
meets the requirements to be an assignee as set forth in Section 10.10 of the
Credit Agreement; (c) Assignee confirms that it is able to fund the Loans and
the Letters of Credit as required by the Credit Agreement; (d) Assignee agrees
that it will perform in accordance with their terms all of the obligations which
by the terms of the Credit Agreement, the Intercreditor Agreement, the Lender
Agreement and the Related Writings are required to be performed by it as a
Lender thereunder; and (e) Assignee represents that it has reviewed each of the
Loan Documents, the Intercreditor Agreement and the Lender Agreement, and by its
signature to this Assignment Agreement, agrees to be bound by and subject to the
terms and conditions of the Intercreditor Agreement and the Lender Agreement, as
if it were an original party thereto. It is understood and agreed that the
assignment and assumption hereunder are made without recourse to Assignor and
that Assignor makes no representation or warranty of any kind to Assignee and
shall not be responsible for (i) the due execution, legality, validity,
enforceability, genuineness, sufficiency or collectability of the Credit
Agreement, the Intercreditor Agreement, the Lender Agreement or any Related
Writings, (ii) any representation, warranty or statement made in or in
connection with the Credit Agreement, the Intercreditor Agreement, the Lender
Agreement or any of the Related Writings, (iii) the financial condition or
creditworthiness of any Borrower or Guarantor of Payment, (iv) the performance
of or compliance with any of the terms or provisions of the Credit Agreement,
the Intercreditor Agreement, the Lender Agreement or any of the Related
Writings, (v) the inspection of any of the property, books or records of
Borrowers, or (vi) the validity, enforceability, perfection, priority,
condition, value or sufficiency of any collateral securing or purporting to
secure the Loans or Letters of Credit. Neither Assignor nor any of its
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officers, directors, employees, agents or attorneys shall be liable for any
mistake, error of judgment, or action taken or omitted to be taken in connection
with the Loans, the Letters of Credit, the Credit Agreement, the Intercreditor
Agreement, the Lender Agreement or the Related Writings, except for its or their
own bad faith or willful misconduct. Assignee appoints Agent (and Canadian
Funding Agent, if applicable) to take such action as agent on its behalf and to
exercise such powers under the Credit Agreement as are delegated to Agent (or
Canadian Funding Agent, if applicable) by the terms thereof.
6. Indemnity. Assignee agrees to indemnify and hold Assignor harmless
against any and all losses, cost and expenses (including, without limitation,
attorneys' fees) and liabilities incurred by Assignor in connection with or
arising in any manner from Assignee's performance or non-performance of
obligations assumed under this Assignment Agreement.
7. Subsequent Assignments. After the Assignment Effective Date, Assignee
shall have the right pursuant to Section 10.10 of the Credit Agreement to assign
the rights which are assigned to Assignee hereunder, provided that (a) any such
subsequent assignment does not violate any of the terms and conditions of the
Credit Agreement, the Intercreditor Agreement, the Lender Agreement, any of the
Related Writings, or any law, rule, regulation, order, writ, judgment,
injunction or decree and that any consent required under the terms of the Credit
Agreement, the Intercreditor Agreement, the Lender Agreement, or any of the
Related Writings has been obtained, (b) the assignee under such assignment from
Assignee shall agree to assume all of Assignee's obligations hereunder in a
manner satisfactory to Assignor and (c) Assignee is not thereby released from
any of its obligations to Assignor hereunder.
8. Reductions of Aggregate Amount of Commitments. If any reduction in the
Total Commitment Amount occurs between the date of this Assignment Agreement and
the Assignment Effective Date, the percentage of the Total Commitment Amount
assigned to Assignee shall remain the percentage specified in Section 1 hereof
and the dollar amount of the Commitment of Assignee shall be recalculated based
on the reduced Total Commitment Amount.
9. Acceptance of Agent; Notice by Assignor. This Assignment Agreement is
conditioned upon the acceptance and consent of Agent and, if necessary pursuant
to Section 10.10 of the Credit Agreement, upon the acceptance and consent of US
Borrower; provided, that the execution of this Assignment Agreement by Agent
and, if necessary, by US Borrower is evidence of such acceptance and consent.
10. Entire Agreement. This Assignment Agreement embodies the entire
agreement and understanding between the parties hereto and supersedes all prior
agreements and understandings between the parties hereto relating to the subject
matter hereof.
11. Governing Law. This Assignment Agreement shall be governed by the laws
of the State of Ohio, without regard to conflicts of laws.
12. Notices. Notices shall be given under this Assignment Agreement in the
manner set forth in the Credit Agreement. For the purpose hereof, the addresses
of the parties hereto
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(until notice of a change is delivered) shall be the address set forth under
each party's name on the signature pages hereof.
[Remainder of page intentionally left blank.]
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13. JURY TRIAL WAIVER. EACH OF THE UNDERSIGNED, TO THE EXTENT PERMITTED BY
LAW, WAIVES ANY RIGHT TO HAVE A JURY PARTICIPATE IN RESOLVING ANY DISPUTE,
WHETHER SOUNDING IN CONTRACT, TORT, OR OTHERWISE, AMONG AGENT, ANY OF THE
LENDERS, AND/OR BORROWER ARISING OUT OF, IN CONNECTION WITH, RELATED TO, OR
INCIDENTAL TO THE RELATIONSHIP ESTABLISHED BETWEEN EACH OF THEM IN CONNECTION
WITH THIS INSTRUMENT OR ANY NOTE OR OTHER AGREEMENT, INSTRUMENT OR DOCUMENT
EXECUTED OR DELIVERED IN CONNECTION THEREWITH OR THE TRANSACTIONS RELATED
HERETO.
IN WITNESS WHEREOF, the parties hereto have executed this Assignment
Agreement by their duly authorized officers as of the date first above written.
ASSIGNOR:
Address: ___________________________ _________________________
___________________________
Attention: ________________ By: _____________________
Phone: ____________________ Name: ___________________
Fax: ______________________ Title: __________________
ASSIGNEE:
Address: ___________________________ _________________________
___________________________
Attention: ________________ By: _____________________
Phone: ____________________ Name: ___________________
Fax: ______________________ Title:___________________
Accepted and Consented to this ___ day of ___, 20_:
KEYBANK NATIONAL ASSOCIATION,
as Agent
By: ________________________________
Name:_______________________________
Title:______________________________
Accepted and Consented to this ___ day of _______, 20__:
THE J. M. SMUCKER COMPANY
By:_________________________________
Name:_______________________________
Title:______________________________
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ANNEX 1
TO
ASSIGNMENT AND ACCEPTANCE AGREEMENT
On and after the Assignment Effective Date, the Commitment of Assignee,
and, if this is less than an assignment of all of Assignor's interest, Assignor,
shall be as follows:
I. INTEREST OF ASSIGNOR BEING ASSIGNED TO ASSIGNEE
A. Assignee's Percentage __________%
B. Assigned Amount $__________
II. ASSIGNEE'S COMMITMENT (as of the Assignment Effective Date)
A. Assignee's Commitment Percentage
under the Credit Agreement __________%
B. Assignee's Commitment Amount under
the Credit Agreement $__________
III. ASSIGNOR'S COMMITMENT (as of the Assignment Effective Date)
A. Assignor's Commitment Percentage
under the Credit Agreement __________%
B. Assignor's Commitment Amount
under the Credit Agreement $__________
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EXHIBIT H
REQUEST FOR EXTENSION
[__________________, 20__]
KeyBank National Association, as Agent
127 Public Square
Cleveland, Ohio 44114-0616
Attention: Institutional Banking
Ladies and Gentlemen:
The undersigned, THE J. M. SMUCKER COMPANY and J.M. SMUCKER (CANADA) INC.
(collectively, "Borrowers" and, individually, each a "Borrower"), refers to the
Credit Agreement, dated as of June 18, 2004 (as the same may from time to time
be amended, restated or otherwise modified, the "Credit Agreement", the terms
defined therein being used herein as therein defined), among the undersigned,
the Lenders, as defined in the Credit Agreement, KEYBANK NATIONAL ASSOCIATION,
as lead arranger and administrative agent for the Lenders ("Agent"), and BANK OF
MONTREAL, as the Canadian funding agent and documentation agent, and hereby
gives you notice, pursuant to Section 2.14 of the Credit Agreement that the
undersigned hereby requests an extension as set forth below (the "Extension")
under the Credit Agreement, and in connection with the Extension sets forth
below the information relating to the Extension as required by Section 2.14 of
the Credit Agreement.
The undersigned hereby requests Agent and the Lenders to extend the
Commitment Period from ______________ _____, 200_ to ________________ _____,
200_.
The undersigned hereby certifies that the following statements are true on
the date hereof, and will be true on the date of the Extension: (a) the
representations and warranties contained in each Loan Document are correct,
before and after giving effect to the Extension and the application of the
proceeds therefrom, as though made on and as of such date; (b) no event has
occurred and is continuing, or would result from such Extension, or the
application of proceeds therefrom, which constitutes a Default or an Event of
Default; and (c) the conditions set forth in Section 2.14 and Article IV of the
Credit Agreement have been satisfied.
THE J. M. SMUCKER COMPANY
By: ______________________
Name: ____________________
Title: ___________________
J.M. SMUCKER (CANADA) INC.
By: ______________________
Name: ____________________
Title: ___________________
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