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Linens Holding Co.
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8-K
May 29, 3:32 PM ET
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Linens Holding Co. 8-K
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Contents
606
ARTICLE I. DEFINITIONS
(b) the maximum amount of Revolving Credit Obligations (as defined in the Senior Note Agreement) that are permitted in Section 4.09 of the Senior Note Agreement as Permitted Debt thereunder minus the US Revolving Exposure of all of the Lenders minus the Line Reserve allocated to the Canadian Revolving Commitments.
ARTICLE II. THE CREDITS
(a) each US Revolving Lender agrees, severally and not jointly, to make US Revolving Loans to US Borrowers, at any time and from time to time on or after the Closing Date until the earlier of the Business Day prior to the Revolving Maturity Date and the termination of the Revolving Commitment of such Lender in accordance with the terms hereof, in an aggregate principal amount at any time outstanding that will not (subject to the provisions of Section 10.10 and Section 10.11) result in such Lender’s US Revolving Exposure exceeding the lesser of (i) such Lender’s Revolving Commitment less such Lender’s Pro Rata Percentage of
any Line Reserve and (ii) such Lender’s Pro Rata Percentage multiplied by the Borrowing Base then in effect; and
(b) each Canadian Revolving Lender agrees, severally and not jointly, to make Canadian Revolving Loans to Canadian Borrower, at any time and from time to time on or after the Closing Date until the earlier of the Business Day prior to the Revolving Maturity Date and the termination of the Canadian Revolving Commitment of such Lender in accordance with the terms hereof, in an aggregate principal amount at any time outstanding that will not (subject to Section 10.10 and Section 10.11) result in such Lender’s Canadian Exposure exceeding the lesser of (i) such Lender’s Canadian Revolving Commitment less such Lender’s Pro Rata Percentage of any Line Reserve allocated to Canadian Revolving Commitments and (ii) such Lender’s Pro Rata Percentage multiplied by the Canadian Borrowing Base then in effect.
(a) Each Loan (other than Swingline Loans) shall be made as part of a Borrowing consisting of Loans made by the Lenders ratably in accordance with their applicable Commitments; provided, that the failure of any Lender to make its Loan shall not in itself relieve any other Lender of its obligation to lend hereunder (it being understood, however, that no Lender shall be responsible for the failure of any other Lender to make any Loan required to be made by such other Lender). Except for Loans deemed made pursuant to Section 2.18(e)(ii), (A) ABR Loans comprising any Borrowing shall be in an aggregate principal amount that is (i) an integral multiple of $1.0 million and not less than $3.0 million or (ii) equal to the remaining available balance of the applicable Commitments and (B) the Eurodollar Loans comprising any Borrowing shall be in an aggregate principal amount that is (i) an integral multiple of $1.0 million and not less than $3.0 million or (ii) equal to the remaining available balance of the applicable Commitments (C) Canadian Prime Rate Loans in Canadian dollars comprising any Borrowing shall be in an aggregate principal amount that is (i) an integral multiple of Can$100,000 and not less than Can$1.0 million or (ii) equal to the remaining available balance of the applicable Commitments and (D) Bankers’ Acceptances in Canadian dollars comprising any Borrowing shall be in an aggregate principal amount that is (i) an integral multiple of Can$100,000 and not less than Can$3.0 million or (ii) equal to the remaining available balance of the applicable commitments.
(b) Subject to Section 2.11 and Section 2.12, each Borrowing shall be comprised entirely of ABR Loans, Eurodollar Loans, Canadian Prime Rate Loans or Bankers’ Acceptances as the applicable Borrower may request pursuant to Section 2.03. Each Lender may at its option make any Eurodollar Loan by causing any domestic or foreign branch or Affiliate of such Lender to make such Loan; provided that any exercise of such option shall not affect the obligation of such Borrower to repay such Loan in accordance with the terms of this Agreement. Borrowings of more than one Type may be outstanding at the same time; provided that such Borrower shall not be entitled to request any Borrowing that, if made, would result in more than eight Eurodollar Borrowings outstanding hereunder at any one time. For purposes of the foregoing, Borrowings
having different Interest Periods, regardless of whether they commence on the same date, shall be considered separate Borrowings.
(c) Except with respect to Loans deemed made pursuant to Section 2.18(e)(ii), each Lender shall make each Loan to be made by it hereunder on the proposed date thereof by wire transfer of immediately available funds to such account in New York City or Toronto, as the case may be, as the applicable Administrative Agent may designate not later than 11:00 a.m., New York City time, and the applicable Administrative Agent shall promptly credit the amounts so received to an account as directed by the Administrative Borrower in the applicable Borrowing Request maintained with the applicable Administrative Agent or, if a Borrowing shall not occur on such date because any condition precedent herein specified shall not have been met, return the amounts so received to the respective Lenders.
(d) Unless the applicable Administrative Agent shall have received notice from a Lender prior to the date of any Borrowing that such Lender will not make available to the applicable Administrative Agent such Lender’s portion of such Borrowing, such Administrative Agent may assume that such Lender has made such portion available to such Administrative Agent on the date of such Borrowing in accordance with paragraph (c) above, and such Administrative Agent may, in reliance upon such assumption, make available to the applicable Borrower on such date a corresponding amount. If the applicable Administrative Agent shall have so made funds available, then, to the extent that such Lender shall not have made such portion available to such Administrative Agent, each of such Lender and the Borrowers severally agrees to repay to such Administrative Agent forthwith on demand such corresponding amount together with interest thereon, for each day from the date such amount is made available to the applicable Borrower until the date such amount is repaid to such Administrative Agent at (i) in the case of such Borrower, the interest rate applicable at the time to the Loans comprising such Borrowing and (ii) in the case of such Lender, the greater of the Federal Funds Effective Rate and a rate determined by such Administrative Agent in accordance with banking industry rules on interbank compensation. If such Lender shall repay to such Administrative Agent such corresponding amount, such amount shall constitute such Lender’s Loan as part of such Borrowing for purposes of this Agreement, and Borrowers’ obligation to repay such Administrative Agent such corresponding amount pursuant to this Section 2.02(d) shall cease.
(e) Notwithstanding any other provision of this Agreement, Borrowers shall not be entitled to request, or to elect to convert or continue, any Borrowing if the Interest Period requested with respect thereto would end after the Revolving Maturity Date.
(a) Borrowings. To request a Revolving Borrowing, the Administrative Borrower shall deliver, by hand delivery or telecopier, a duly completed and executed Borrowing Request to the applicable Administrative Agent (i) in the case of a Eurodollar Borrowing in dollars or a Bankers’ Acceptance, not later than 11:00 a.m., New York City time, three Business Days before the date of the proposed Borrowing, (ii) in the case of an ABR Borrowing, not later than 9:00 a.m., New York City time, on the date of the proposed Borrowing or (iii) in the case of a Borrowing of Canadian Prime Rate Loans, not later than 11:00 a.m., New York time, one
Business Day before the date of the proposed Borrowing. Each Borrowing Request shall be irrevocable and shall specify the following information in compliance with Section 2.02:
(i) the aggregate amount and Approved Currency of such Borrowing;
(ii) the date of such Borrowing, which shall be a Business Day;
(iii) for US Revolving Loans, whether such Borrowing is to be an ABR Borrowing or a Eurodollar Borrowing or, for Canadian Revolving Loans, whether such Borrowing is to be by way of Bankers’ Acceptance or Canadian Prime Rate Loan;
(iv) in the case of a Eurodollar Borrowing or a Bankers’ Acceptance, the initial Interest Period to be applicable thereto, which shall be a period contemplated by the definition of the term “Interest Period”;
(v) the name of the applicable Borrower and the location and number of the applicable Borrower’s account to which funds are to be disbursed, which shall comply with the requirements of Section 2.02(c); and
(vi) that the conditions set forth in Section 4.02(b) – (e) have been satisfied as of the date of the notice.
(b) Bankers’ Acceptances.
(i) Canadian Administrative Agent. On each date that a Bankers’ Acceptance is to be accepted hereunder, the Canadian Administrative Agent shall advise the Canadian Borrower as to the Canadian Administrative Agent’s determination of the applicable Discount Rate for the Bankers’ Acceptance which any of the Canadian Revolving Lenders have agreed to accept and purchase.
(ii) Purchase. Each Canadian Revolving Lender shall purchase a Bankers’ Acceptance accepted by it, and the Canadian Borrower shall sell such Bankers’ Acceptance to such Canadian Revolving Lender at the applicable Discount Rate. The relevant Canadian Revolving Lender shall provide to the Canadian Administrative Agent on the date of the related Borrowing the Discount Proceeds less the Acceptance Fee payable by the Canadian Borrower with respect to such Bankers’ Acceptance.
(iii) Sale. Each Canadian Revolving Lender may from time to time hold, sell, rediscount or otherwise dispose of any or all Bankers’ Acceptances accepted and purchased by it.
(iv) Power of Attorney for the Execution of Bankers’ Acceptances. To facilitate the issuance of Bankers’ Acceptances, the Canadian Borrower hereby appoints each Canadian Revolving Lender as its attorney to sign and endorse on its behalf, in handwriting or facsimile or mechanical signature as and when deemed necessary by such Canadian Revolving Lender, blank forms of Bankers’ Acceptances. In this respect, it is each Canadian Revolving Lender’s responsibility to maintain an adequate supply of blank forms of Bankers’ Acceptances for acceptance under this Agreement. The Canadian Borrower recognizes and agrees that all Bankers’ Acceptances signed and/or endorsed on its behalf by a Canadian Revolving Lender shall bind the Canadian Borrower as fully and effectually as if signed in the handwriting of and duly issued by the proper signing officers of the Canadian Borrower. Each Canadian Revolving Lender is hereby authorized to issue such Bankers’ Acceptances endorsed in blank in such face amounts as may be determined by such Canadian Revolving Lender; provided that the aggregate amount thereof is equal to the aggregate amount of Bankers’ Acceptances required to be accepted and purchased by such Canadian Revolving Lender. No Canadian Revolving Lender shall be liable for any damage, loss or other claim arising by reason of any loss or improper use of any such instrument except for the gross negligence or willful misconduct of such Canadian Revolving Lender. Each Canadian Revolving Lender shall maintain a record with respect to Bankers’ Acceptances held by it in blank hereunder, voided by it for any reason, accepted and purchased by it hereunder, and canceled at their respective maturities.
(v) Execution. Drafts drawn by the Canadian Borrower to be accepted as Bankers’ Acceptances shall be signed by a duly authorized officer or officers of the Canadian Borrower or by its attorneys-in-fact, including attorneys-in-fact appointed pursuant to this Section. Notwithstanding that any person whose signature appears on any Bankers’ Acceptance may no longer be an authorized signatory for the Canadian Borrower at the time of issuance of a Bankers’ Acceptance, that signature shall nevertheless be valid and sufficient for all purposes as if the authority had remained in force at the time of issuance and any Bankers’ Acceptance so signed shall be binding on the Canadian Borrower. Any executed drafts or orders to be used as Bankers’ Acceptances shall be held in safekeeping with the same degree of care as if they were Lender’s own property.
(vi) Issuance. The Canadian Administrative Agent, promptly following receipt of a Borrowing Request or Interest Election Request for Bankers’ Acceptances, shall advise the Canadian Revolving Lenders of the notice and the face amount of Bankers’ Acceptances to be accepted by it and the applicable Interest Period (which shall be identical for all Canadian Revolving Lenders). The aggregate face amount of Bankers’ Acceptances to be accepted by a Canadian Revolving Lender shall be determined by reference to such Canadian Revolving Lender’s Canadian Pro Rata Percentage of the issue of Bankers’ Acceptances, except that, if the face amount of a Bankers’ Acceptance which would otherwise be accepted by a Canadian Revolving
Lender would not be Can$500,000 or a whole multiple thereof, the face amount shall be increased or reduced by the Canadian Administrative Agent in its sole discretion to Can$100,000, or the nearest whole multiple of that amount, as appropriate; provided that after such issuance, no Canadian Revolving Lender shall have aggregate outstanding Canadian Exposure in excess of its Canadian Revolving Commitment.
(vii) Waiver of Presentment and Other Conditions. The Canadian Borrower waives presentment for payment and any other defense to payment of any amounts due to any Canadian Revolving Lender in respect of a Bankers’ Acceptance accepted and purchased by it pursuant to this Agreement which might exist solely by reason of the Bankers’ Acceptance being held, at the maturity thereof, by such Canadian Revolving Lender in its own right and the Canadian Borrower agrees not to claim any days of grace if the Canadian Revolving Lender as holder sues or otherwise commences legal proceedings against the Canadian Borrower on the Bankers’ Acceptance for payment of the amount payable by the Canadian Borrower thereunder.
(viii) BA Equivalent Loans by Non-BA Lenders. Whenever the Canadian Borrower requests a Canadian Revolving Loan under this Agreement by way of Bankers’ Acceptances, each Non-BA Lender (or, at its option, any other Canadian Revolving Lender), shall, in lieu of accepting a Bankers’ Acceptance, make a BA Equivalent Loan in an amount equal to such Non-BA Lender’s Canadian Pro Rata Percentage of such Canadian Revolving Loan.
(ix) Terms Applicable to Discount Notes. As set out in the definition of “Bankers’ Acceptances”, that term includes Discount Notes and BA Equivalent Loans not evidenced by Discount Notes and all terms of this Agreement applicable to Bankers’ Acceptances shall apply equally to BA Equivalent Loans and Discount Notes evidencing BA Equivalent Loans with such changes as may in the context be necessary. For greater certainty:
(1) the term of a Discount Note shall be the same as the Interest Period for Bankers’ Acceptances accepted and purchased on the same date in respect of the same Canadian Revolving Loan;
(2) an acceptance fee will be payable in respect of a Discount Note and shall be calculated at the same rate and in the same manner as the Acceptance Fee in respect of a Bankers’ Acceptance; and
(3) the Discount Rate applicable to a Discount Note shall be the Discount Rate applicable to BA Equivalent Loans made on the same date in respect of the same Canadian Revolving Loan.
(x) Depository Bills and Notes Act. At the option of the Canadian Borrower and any Canadian Revolving Lender, Bankers’ Acceptances under this Agreement to be accepted by such Canadian Revolving Lender may be issued in the form of depository bills for deposit with The Canadian Depository for Securities Limited pursuant to the Depository Bills and Notes Act (Canada). All depository bills so issued shall be governed by the provisions of this Section.
(xi) Prepayments and Mandatory Payments. If at any time any Bankers’ Acceptances are to be paid prior to their maturity, the Canadian Borrower shall be required to deposit the face amount of such Bankers’ Acceptances being prepaid in an interest-bearing cash collateral account with the Canadian Administrative Agent until the date of maturity of such Bankers’ Acceptances. The cash collateral account shall be under the sole control of the Canadian Administrative Agent and shall be subject to no Liens, except for Liens in favor of the Canadian Administrative Agent in its capacity as such. Except as contemplated by this Section, neither the Canadian Borrower nor any person claiming on its behalf shall have any right to any of the cash in the cash collateral account. The Canadian Administrative Agent shall apply the cash held in the cash collateral account and interest earned thereon to the face amount of such Bankers’ Acceptances at maturity, whereupon any cash remaining in the cash collateral account shall be released by the Canadian Administrative Agent to the Canadian Borrower.
(a) Promise to Repay. The US Borrowers hereby unconditionally promise to pay (i) to the US Administrative Agent for the account of each Revolving Lender, the then unpaid principal amount of each US Revolving Loan of such Revolving Lender on the Revolving Maturity Date and (ii) to the US Swingline Lender, the then unpaid principal amount of each US Swingline Loan on the earlier of the Revolving Maturity Date and the first date after such Swingline Loan is made that is the 15th or last day of a calendar month and is at least two (2) Business Days after such Swingline Loan is made; provided that on each date that a US Revolving Loan is made, the US Borrowers shall repay all US Swingline Loans that were outstanding on the date such Borrowing was requested. Canadian Borrower hereby unconditionally promises to pay (i) to Canadian Administrative Agent for the account of each Canadian Revolving Lender, the then unpaid principal amount of each Canadian Revolving Loan of such Canadian Revolving Lender on the Revolving Maturity Date and (ii) to the Canadian Swingline Lender, the then unpaid principal amount of each Canadian Swingline Loan on the earlier of the Revolving Maturity Date and the first date after such Swingline Loan is made that is the 15th or last day of a calendar month and is at least two (2) Business Days after such Swingline Loan is made; provided that on each date that a Canadian Revolving Loan is made, the Canadian Borrower shall repay all Canadian Swingline Loans that were outstanding on the date such Borrowing was requested. All payments or repayments of Loans made pursuant to this Section 2.04(a) shall be made in the Approved Currency in which such Loan is denominated.
(b) Lender and Administrative Agent Records. Each Lender shall maintain in accordance with its usual practice an account or accounts evidencing the indebtedness of the applicable Borrower to such Lender resulting from each Loan made by such Lender from time to time, including the amounts of principal and interest payable and paid to such Lender from time to time under this Agreement. The applicable Administrative Agent shall maintain accounts in which it will record (i) the amount and Approved Currency of each Loan made hereunder, the Type and Class thereof, the name of the applicable Borrower and the Interest Period applicable thereto; (ii) the amount of any principal or interest due and payable or to become due and payable from the applicable Borrower to each applicable Lender hereunder; and (iii) the amount of any sum received by such Administrative Agent hereunder for the account of the applicable Lenders and each such Lender’s share thereof. The entries made in the accounts maintained pursuant to this paragraph shall be prima facie evidence of the existence and amounts of the obligations therein recorded as well as the Borrower which received such Loans or Letters of Credit; provided that the failure of any Lender or such Administrative Agent to maintain such accounts or any error therein shall not in any manner affect the obligations of the Borrowers to repay the Loans in accordance with their terms.
(c) Promissory Notes. Any Lender by written notice to Administrative Borrower (with a copy to the Administrative Agents) may request that Loans of any Class made by it be
evidenced by a promissory note (unless already evidenced by a Bankers’ Acceptance). In such event, the applicable Borrower shall prepare, execute and deliver to such Lender a promissory note payable to the order of such Lender (or, if requested by such Lender, to such Lender and its registered assigns) in the form of Exhibit K-1, K-2, K-3 or K-4 as the case may be. Thereafter, the Loans evidenced by such promissory note and interest thereon shall at all times (including after assignment pursuant to Section 11.04) be represented by one or more promissory notes in such form payable to the order of the payee named therein (or, if such promissory note is a registered note, to such payee and its registered assigns).
(a) Commitment Fee. The Borrowers agree to pay to the applicable Administrative Agent for the account of each Lender a commitment fee (a “Commitment Fee”) equal to the Applicable Fee per annum on the average daily unused amount of each Commitment of such Lender during the period from and including the date hereof to but excluding the date on which such Commitment terminates. Accrued Commitment Fees shall be payable in arrears (A) on the last Business Day of March, June, September and December of each year, commencing on the first such date to occur after the date hereof, and (B) on the date on which such Commitment terminates. Commitment Fees shall be computed on the basis of a year of 360 days and shall be payable for the actual number of days elapsed (including the first day but excluding the last day). For purposes of computing Commitment Fees with respect to Revolving Commitments a Revolving Commitment of a Lender shall be deemed to be used to the extent of the outstanding Revolving Loans and LC Exposure of such Lender (and the Swingline Exposure of such Lender shall be disregarded for such purpose).
(b) Administrative Agent Fees. The Borrowers agree to pay to the US Administrative Agent, for the accounts of the applicable Administrative Agents, the administrative fees (to be allocated between the Administrative Agents in a manner to be mutually agreed upon by the Administrative Agents) payable in the amounts and at the times set forth in the Fee Letter (the “Administrative Agent Fees”).
(c) Collateral Monitoring Fee. The Borrowers agree to pay to the US Administrative Agent, for the accounts of the applicable Collateral Agents, a collateral monitoring fee (to be allocated among the Collateral Agents in a manner to be mutually agreed upon by the Collateral Agents) payable in the amounts and at the times set forth in the Fee Letter (the “Collateral Monitoring Fees”).
(d) LC and Fronting Fees. The US Borrowers agree to pay (i) to the US Administrative Agent for the account of each Revolving Lender (other than a Canadian Revolving Lender) a participation fee (“Standby LC Participation Fee”) with respect to its participations in Standby Letters of Credit, which shall accrue at a rate equal to the Applicable Margin from time to time used to determine the interest rate on Eurodollar Revolving Loans pursuant to Section 2.06 on the average daily amount of such Lender’s LC Exposure (excluding any portion thereof attributable to Reimbursement Obligations), as appropriate, during the period from and including the Closing Date to but excluding the later of the date on which such Lender’s Revolving Commitment terminates and the date on which such Lender ceases to have any LC Exposure, (ii) to the US Administrative Agent for the account of each Revolving Lender
a participation fee (“Commercial LC Participation Fee” and together with the Standby LC Participation Fee, the “LC Participation Fee”) with respect to its participation in Commercial Letters of Credit, which shall accrue at a rate equal to the greater of (A) the Applicable Margin from time to time used to determine the interest rate on Eurodollar Revolving Loans pursuant to Section 2.06 on the average daily amount of such Lender’s LC Exposure (excluding any portion thereof attributable to Reimbursement Obligations), as appropriate, during the period from and including the Closing Date to but excluding the later of the date on which such Lender’s Revolving Commitment terminates and the date on which such Lender ceases to have any LC Exposure minus 0.50% and (B) 0.50%, and (iii) to the Issuing Bank a fronting fee (“Fronting Fee”), which shall accrue at the rate of 0.125% per annum on the average daily amount of the LC Exposure (excluding any portion thereof attributable to Reimbursement Obligations) during the period from and including the Closing Date to but excluding the later of the date of termination of the Revolving Commitments and the date on which there ceases to be any LC Exposure, as well as the Issuing Bank’s customary fees with respect to the issuance, amendment, renewal or extension of any Letter of Credit or processing of drawings thereunder. Accrued LC Participation Fees and Fronting Fees shall be payable in arrears (i) on the last Business Day of March, June, September and December of each year, commencing on the first such date to occur after the Closing Date, and (ii) on the date on which the Revolving Commitments terminate. Any such fees accruing after the date on which the Revolving Commitments terminate shall be payable on demand. Any other fees payable to the Issuing Bank pursuant to this paragraph shall be payable within 10 days after demand therefor. All LC Participation Fees and Fronting Fees shall be computed on the basis of a year of 360 days and shall be payable for the actual number of days elapsed (including the first day but excluding the last day). During the continuance of a Default, the LC Participation Fee shall be increased to a per annum rate equal to 2% plus the otherwise applicable rate with respect thereto.
(e) All Fees shall be paid on the dates due, in immediately available funds in dollars, to the applicable Administrative Agent for distribution, if and as appropriate, among the applicable Lenders, except that the US Borrowers shall pay the Fronting Fees directly to the Issuing Bank. Once paid, none of the Fees shall be refundable under any circumstances.
(a) ABR Loans. Subject to the provisions of Section 2.06(e), the Loans comprising each ABR Borrowing, including each Swingline Loan, shall bear interest at a rate per annum equal to the Alternate Base Rate plus the Applicable Margin in effect from time to time.
(b) Canadian Prime Rate Loans. Subject to Section 2.06(e), the Loans comprising each Canadian Prime Rate Borrowing shall bear interest at a rate per annum equal to the Canadian Prime Rate plus the Applicable Margin in effect from time to time.
(c) Eurodollar Loans. Subject to the provisions of Section 2.06(e), the Loans comprising each Eurodollar Borrowing shall bear interest at a rate per annum equal to the Adjusted LIBOR Rate for the Interest Period in effect for such Borrowing plus the Applicable Margin in effect from time to time.
(d) Bankers’ Acceptances. Subject to Section 2.06(e), upon acceptance of a Bankers’ Acceptance by a Lender, Canadian Borrower shall pay to Canadian Administrative Agent on behalf of such Lender a fee (the “Acceptance Fee”) calculated on the face amount of such Bankers’ Acceptance at a rate per annum equal to the Applicable Margin on the basis of the number of days in the Interest Period applicable to such Bankers’ Acceptance and a year of 365 or 366 days, as applicable.
(e) Default Rate. Notwithstanding the foregoing, during an Event of Default, all Obligations shall, to the extent permitted by applicable law, bear interest, after as well as before judgment, at a per annum rate equal to (i) in the case of principal and premium, if any, of or interest on any Loan, 2% plus the rate otherwise applicable to such Loan as provided in the preceding paragraphs of this Section 2.06 or (ii) in the case of any other amount, 2% plus the rate applicable to ABR Revolving Loans in the case of Borrowings in dollars, or Canadian Prime Rate Loans, in the case of Borrowings in Canadian dollars, as provided in Section 2.06(a) or (b), respectively (in either case, the “Default Rate”).
(f) Interest Payment Dates. Accrued interest on each Loan shall be payable in arrears on each Interest Payment Date for such Loan; provided that (i) interest accrued pursuant to Section 2.06(e) shall be payable on demand, (ii) in the event of any repayment or prepayment of any Loan (other than a prepayment of an ABR Revolving Loan, Canadian Prime Rate Loan or a Swingline Loan without a permanent reduction in Revolving Commitments), accrued interest on the principal amount repaid or prepaid shall be payable on the date of such repayment or prepayment and (iii) in the event of any conversion of any Eurodollar Loan prior to the end of the current Interest Period therefor, accrued interest on such Loan shall be payable on the effective date of such conversion.
(g) Interest Calculation. All interest hereunder shall be computed on the basis of a year of 360 days, except that interest computed by reference to the Alternate Base Rate, the Canadian Prime Rate or Bankers’ Acceptances shall be computed on the basis of a year of 365 days (or 366 days in a leap year), and in each case shall be payable for the actual number of days elapsed (including the first day but excluding the last day). The applicable Alternate Base Rate, Adjusted LIBOR Rate, Canadian Prime Rate or Acceptance Fee shall be determined by the applicable Administrative Agent in accordance with the provisions of this Agreement and such determination shall be conclusive absent manifest error.
(h) Currency for Payment of Interest. All interest paid or payable pursuant to this Section 2.06 shall be paid in the Approved Currency in which the Loan giving rise to such interest is denominated.
(i) Interest Act (Canada). For the purposes of the Interest Act (Canada), in any case in which an interest or fee rate is stated in this Agreement to be calculated on the basis of a number of days that is other than the number in a calendar year, the yearly rate, to which such interest or fee rate is equivalent, is equal to such interest or fee rate multiplied by the actual number of days in the year in which the relevant interest or fee payment accrues and divided by the number of days used as the basis for such calculation.
(a) Termination of Commitments. The Revolving Commitments, the US Swingline Commitment, the Canadian Swingline Commitment and the LC Commitment shall automatically terminate on the Revolving Maturity Date.
(b) Optional Terminations and Reductions. At their option, Borrowers may at any time terminate, or from time to time permanently reduce, the Commitments of any Class; provided that (i) each reduction of the Commitments of any Class shall be in an amount that is an integral multiple of $1.0 million and not less than $5.0 million and (ii) the Revolving Commitments shall not be terminated or reduced if, after giving effect to any concurrent prepayment of the Revolving Loans in accordance with Section 2.10, the aggregate amount of Revolving Exposures would exceed the aggregate amount of Revolving Commitments. Any permanent reduction of the Revolving Commitment shall result in a pro rata permanent reduction in the Canadian Revolving Commitments.
(c) Notice by the Borrowers. The applicable Borrower shall notify the applicable Administrative Agent in writing of any election to terminate or reduce the Commitments under Section 2.07(b) at least three Business Days prior to the effective date of such termination or reduction, specifying such election and the effective date thereof. Promptly following receipt of any notice, such Administrative Agent shall advise the Lenders of the contents thereof. Each notice delivered by such Borrower pursuant to this Section shall be irrevocable; provided that a notice of termination of the Commitments delivered by any Borrower may state that such notice is conditioned upon the effectiveness of other credit facilities, in which case such notice may be revoked by such Borrower (by notice to such Administrative Agent on or prior to the specified effective date) if such condition is not satisfied. Any termination or reduction of the Commitments of any Class shall be permanent. Each reduction of the Commitments of any Class shall be made ratably among the Lenders in accordance with their respective Commitments of such Class.
(a) Generally. Each Revolving Borrowing including each Canadian Revolving Borrowing initially shall be of the Type specified in the applicable Borrowing Request and, in the case of a Eurodollar Borrowing and a Bankers’ Acceptance, shall have an initial Interest Period as specified in such Borrowing Request. Thereafter, the applicable Borrower may elect to convert such Borrowing to a different Type or to rollover or continue such Borrowing and, in the case of a Eurodollar Borrowing or a Bankers’ Acceptance, may elect Interest Periods therefor, all as provided in this Section (except that only the Canadian Borrower may elect Canadian Prime Rate Borrowings or Bankers’ Acceptances). Borrowings consisting of Canadian Revolving Loans may only be converted to a different Type of Canadian Revolving Loan. The applicable Borrower may elect different options with respect to different portions of the affected Borrowing, in which case each such portion shall be allocated ratably among the Lenders holding the Loans comprising such Borrowing, and the Loans comprising each such portion shall be considered a separate Borrowing. Notwithstanding anything to the contrary, the applicable Borrower shall not be entitled to request any conversion, rollover or continuation that, if made, would result in more than eight Eurodollar Borrowings or Bankers’ Acceptances having more than eight different Interest Periods being outstanding hereunder at any one time. This Section shall not apply to Borrowings of Swingline Loans, which may not be converted or continued.
(b) Interest Election Notice. To make an election pursuant to this Section, the applicable Borrower shall deliver, by hand delivery or telecopier, a duly completed and executed Interest Election Request to the applicable Administrative Agent not later than the time that a Borrowing Request would be required under Section 2.03 if such Borrower were requesting a Revolving Borrowing of the Type resulting from such election to be made on the effective date of such election. Each Interest Election Request shall be irrevocable. Each Interest Election Request shall specify the following information in compliance with Section 2.02:
(i) the Borrowing to which such Interest Election Request applies and, if different options are being elected with respect to different portions thereof, or if outstanding Borrowings are being combined, allocation to each resulting Borrowing (in which case the information to be specified pursuant to clauses (iii), (iv) and (v) below shall be specified for each resulting Borrowing);
(ii) the effective date of the election made pursuant to such Interest Election Request, which shall be a Business Day;
(iii) the Approved Currency of the resulting Borrowing;
(iv) whether the resulting Borrowing is to be an ABR Borrowing, Canadian Prime Rate Borrowing, a Eurodollar Borrowing or an advance by way of Bankers’ Acceptance; and
(v) if the resulting Borrowing is a Eurodollar Borrowing or an advance by way of Bankers’ Acceptance, the Interest Period to be applicable thereto after giving effect to such election, which shall be a period contemplated by the definition of the term “Interest Period”.
(c) Automatic Conversion to ABR Borrowing or Canadian Prime Rate Borrowings. If an Interest Election Request with respect to a Eurodollar Borrowing or a Bankers’ Acceptance is not timely delivered prior to the end of the Interest Period applicable thereto, then, unless such Borrowing or Bankers’ Acceptance is repaid as provided herein, at the end of such Interest Period such Eurodollar Borrowing or Bankers’ Acceptance shall be converted to (i) in the case of a Eurodollar Borrowing, an ABR Borrowing and (ii) in the case of a Bankers’ Acceptance, a Canadian Prime Rate Borrowing. Notwithstanding any contrary provision hereof, if an Event of Default has occurred and is continuing, the applicable Administrative Agent or the Required Lenders may require, by notice to the applicable Borrower, that (i) no outstanding Borrowing may be converted to or continued as a Eurodollar Borrowing or a Bankers’ Acceptance and (ii) unless repaid, each Eurodollar Borrowing shall be converted to an ABR Borrowing and each
Banker’s Acceptance shall be converted into a Canadian Prime Rate Loan, in each case, at the end of the Interest Period applicable thereto.
(d) Existing Borrowings. Any Existing ABR Borrowing outstanding on the Closing Date shall be deemed to be refinanced on the Closing Date with a new ABR Borrowing, bearing interest as provided in this Agreement, and such new Borrowing shall be deemed to be advanced under this Agreement to repay such Existing ABR Borrowings. Each Existing Eurodollar Revolving Borrowing outstanding on the Closing Date shall remain outstanding and in all respects be continuing after the Closing Date and shall be deemed to be a Eurodollar Revolving Borrowing hereunder, having the Interest Period that commenced on the date of such Existing Eurodollar Revolving Borrowing (each such Eurodollar Revolving Borrowing being a “Grandfathered Eurodollar Borrowing” and each such Interest Period being a “Grandfathered Interest Period”). From and including the Closing Date until and including the last day of the relevant Grandfathered Interest Period, each Grandfathered Eurodollar Revolving Borrowing shall bear interest per annum equal to the Adjusted LIBOR Rate for the applicable Grandfathered Interest Period plus the Applicable Margin applicable thereto under the Original Credit Agreement. Thereafter, the applicable Borrower may make elections with respect to the Grandfathered Eurodollar Borrowings as provided in Section 2.08, and all such Loans shall bear interest as provided in this Agreement.
SECTION 2.09. [Intentionally Deleted].
(a) Optional Prepayments. Each Borrower shall have the right at any time and from time to time to prepay any Borrowing, in whole or in part, subject to the requirements of this Section 2.10 and subject to the provisions of Section 9.02(g); provided that each partial prepayment shall be in an amount that is an integral multiple of $1.0 million (or, if applicable, Can$100,000) and not less than $3.0 million (or, if applicable, Can$1.0 million) or, if less, the outstanding principal amount of such Borrowing.
(b) Certain Revolving Loan Prepayments.
(i) In the event of the termination of all the Revolving Commitments, each Borrower shall, on the date of such termination, repay or prepay all its outstanding Revolving Borrowings and all outstanding Swingline Loans and replace all outstanding Letters of Credit or cash collateralize all outstanding Letters of Credit in accordance with the procedures set forth in Section 2.18(i).
(ii) In the event of any partial reduction of the Revolving Commitments, then (x) at or prior to the effective date of such reduction, the Administrative Agents shall notify Borrowers and the Revolving Lenders of the sum of the Revolving Exposures after giving effect thereto and (y) if the sum of the Revolving Exposures would exceed the aggregate amount of Revolving Commitments after giving effect to such reduction, then Borrowers shall, on the date of such reduction, first, repay or prepay Swingline Loans, second, repay or prepay Revolving Borrowings and third, replace outstanding Letters of Credit or cash collateralize outstanding Letters of Credit in accordance with
the procedures set forth in Section 2.18(i), in an aggregate amount sufficient to eliminate such excess.
(iii) In the event that (x) the sum of all Lenders’ Revolving Exposures exceeds the Revolving Commitments then in effect (including on any date on which Dollar Equivalents are determined pursuant to Section 11.17) or (y) the sum of all Lenders’ Canadian Exposures exceeds the Canadian Revolving Commitments then in effect (including on any date on which Dollar Equivalents are determined pursuant to Section 11.17), then in each case, Borrowers shall, without notice or demand, immediately first, repay or prepay Revolving Borrowings, and second, replace outstanding Letters of Credit or cash collateralize outstanding Letters of Credit in accordance with the procedures set forth in Section 2.18(i), in an aggregate amount sufficient to eliminate such excess.
(iv) In the event that the aggregate LC Exposure exceeds the LC Commitment then in effect (including on any date on which Dollar Equivalents are determined pursuant to Section 11.17), US Borrowers shall, without notice or demand, immediately replace outstanding Letters of Credit or cash collateralize outstanding Letters of Credit in accordance with the procedures set forth in Section 2.18(i), in an aggregate amount sufficient to eliminate such excess.
(v) In the event that (x) the sum of all Lenders’ US Revolving Exposures exceeds the Borrowing Base then in effect or (y) the sum of all Lenders’ Canadian Exposures exceeds the Canadian Borrowing Base then in effect, the Borrowers shall, without notice or demand, immediately apply an amount equal to such excess to prepay the Loans and any interest accrued thereon, in accordance with this Section 2.10(b)(v). The Borrowers shall make prepayments in accordance with Section 2.10(f) in an amount sufficient to eliminate such excess.
(vi) In the event an Activation Notice has been given (as contemplated by Section 9.02), the Borrowers shall pay all proceeds of Collateral (other than proceeds of a Casualty Event or an Asset Sale that do not require a permanent repayment) into the Collection Account, for application in accordance with Section 9.02(g).
(vii) Borrowings by way of Bankers’ Acceptance may only be prepaid by cash collateralizing the same in accordance with Section 2.03(b)(xi).
(c) Asset Sales. Not later than one Business Day following the receipt of any Net Cash Proceeds of any Asset Sale by Holdings or any of its Subsidiaries, Borrowers shall make any prepayments required by Section 2.10(b) as well as prepayments in accordance with Section 2.10(f) and (g) in an aggregate amount equal to 100% of such Net Cash Proceeds; provided that:
(i) no such prepayment shall be required under this Section 2.10(c)(i) with respect to (A) any Asset Sale permitted by Section 6.06(a), (B) the disposition of property which constitutes a Casualty Event, or (C) Asset Sales for fair market value resulting in no more than the Dollar Equivalent of $100,000 in Net Cash Proceeds per Asset Sale (or series of related Asset Sales) and less than the Dollar Equivalent of
$1.0 million in Net Cash Proceeds in any fiscal year; provided that clause (C) shall not apply in the case of any Asset Sale described in clause (b) of the definition thereof; and
(ii) subject to Section 2.10(g) and any requirement for a prepayment made under Section 2.10(b) and so long as no Default shall then exist or would arise therefrom, such proceeds shall not be required to be so applied on such date to the extent that Borrowers shall have delivered an Officers’ Certificate to the applicable Administrative Agent on or prior to such date stating that such Net Cash Proceeds are expected to be reinvested in fixed or capital assets within 365 days following the date of such Asset Sale (which Officers’ Certificate shall set forth the estimates of the proceeds to be so expended); provided that if all or any portion of such Net Cash Proceeds is not so reinvested within such 365-day period, such unused portion shall be applied on the last day of such period as a mandatory prepayment as provided in this Section 2.10(c); provided, further, that if the property subject to such Asset Sale constituted Collateral, then all property purchased with the Net Cash Proceeds thereof pursuant to this subsection shall be made subject to the Lien of the applicable Security Documents in favor of the applicable Collateral Agents for their benefit and for the benefit of the other Secured Parties in accordance with Section 5.11 and Section 5.12.
(d) Casualty Events. Not later than one Business Day following the receipt of any Net Cash Proceeds from a Casualty Event by Holdings or any of its Subsidiaries, the applicable Borrower shall make any prepayments required by Section 2.10(b) as well as any prepayments in accordance with Sections 2.10(f) and (g) in an aggregate amount equal to 100% of such Net Cash Proceeds; provided that:
(i) so long as no Default shall then exist or arise therefrom, such proceeds (other than amounts required under Section 2.10(b) to be prepaid) shall not be required to be so applied on such date to the extent that Borrowers shall have delivered an Officers’ Certificate to the Administrative Agents on or prior to such date stating that such proceeds are expected to be used to repair, replace or restore any property in respect of which such Net Cash Proceeds were paid or to reinvest in other fixed or capital assets, no later than 180 days following the date of receipt of such proceeds; provided that if the property subject to such Casualty Event constituted Collateral under the Security Documents, then all property purchased with the Net Cash Proceeds thereof pursuant to this subsection shall be made subject to the Lien of the applicable Security Documents in favor of the applicable Collateral Agents for their benefit and for the benefit of the other Secured Parties in accordance with Section 5.11 and Section 5.12; and
(ii) if any portion of such Net Cash Proceeds shall not be so applied within such 180-day period, such unused portion shall be applied on the last day of such period as a mandatory prepayment as provided in this Section 2.10(d).
(e) [Intentionally Deleted].
(f) Application of Prepayments. (i) Prior to any optional or mandatory prepayment hereunder, Borrowers shall select the Borrowing or Borrowings to be prepaid and shall specify
such selection in the notice of such prepayment pursuant to Section 2.10(g), subject to the provisions of this Section 2.10(f). Any mandatory prepayments (other than those required by Section 2.10(b)) shall be applied to the Revolving Loans and, upon the Administrative Agent’s election, the Revolving Commitments shall be permanently reduced ratably among the Revolving Lenders in accordance with their applicable Revolving Commitments in an aggregate amount equal to such prepayment and Borrower shall comply with Section 2.10(b).
(ii) Notwithstanding the foregoing, in the event that Borrowers have delivered an Officers’ Certificate in accordance with Section 2.10(c) or in accordance with Section 2.10(d), (A) the applicable Net Cash Proceeds shall be applied against the outstanding Revolving Loans, without a permanent reduction in the Commitments, (B) both a Reserve and a reserve against the Commitments (“Line Reserve”) shall be established (in the amount of the Net Cash Proceeds less any amounts used for prepayments that were required by Sections 2.10(b) because of the sale or disposition of Inventory outside of the ordinary course of business) which Reserve and Line Reserve shall each be released simultaneously with and to the extent of any Loans advanced to the Borrowers for the purpose of purchasing assets in accordance with Section 2.10(c) or Section 2.10(d), as applicable; provided Borrowers submit (with the applicable Borrowing Request) an Officer’s Certificate setting forth the use of proceeds of the requested Loan and confirming that such use is in compliance with Section 2.10(c) or Section 2.10(d), as applicable, and (C) in the event that any part or all of the Reserve remains in place at the end of the time period set forth in Section 2.10(c) or Section 2.10(d), as applicable, the Commitments shall be permanently reduced by an amount equal to such remaining Reserve and, simultaneously with the such reduction, the remaining Line Reserve shall be released.
(iii) Amounts to be applied pursuant to this Section 2.10 to the prepayment of Revolving Loans shall, in the absence of direction from the Borrowers pursuant to Section 2.10(g)(i), be applied to the prepayment of the ABR Loans and Canadian Prime Rate Loans in the discretion of the Administrative Agents. Any amounts remaining after each such application shall be applied to prepay Eurodollar Revolving Loans or Bankers’ Acceptances, as applicable. Notwithstanding the foregoing, if the amount of any prepayment of Loans required under this Section 2.10 shall be in excess of the amount of the ABR Loans and Canadian Prime Rate Loans at the time outstanding (an “Excess Amount”), only the portion of the amount of such prepayment as is equal to the amount of such outstanding ABR Loans and Canadian Prime Rate Loans shall be immediately prepaid and, at the election of the applicable Borrower, the Excess Amount shall be either (A) deposited in an escrow account on terms satisfactory to the applicable Collateral Agents and applied to the prepayment of Eurodollar Loans or Bankers’ Acceptances on the last day of the then next-expiring Interest Period for the applicable Eurodollar Loans or Bankers’ Acceptances, as the case may be; provided that (i) interest in respect of such Excess Amount shall continue to accrue thereon at the rate provided hereunder for the Loans which such Excess Amount is intended to repay until such Excess Amount shall have been used in full to repay such Loans and (ii) at any time while a Default has occurred and is continuing, the Administrative Agent may, and upon written direction from the Required Lenders shall, apply any or all proceeds then on deposit to the payment of such Loans in an amount equal to such Excess Amount or (B) prepaid immediately, together with any amounts owing to the Lenders under Section 2.13.
(g) Notice of Prepayment. The applicable Borrower shall notify the applicable Administrative Agent (and, in the case of prepayment of a Swingline Loan, the applicable Swingline Lender) by written notice of any prepayment hereunder (i) in the case of prepayment of a Eurodollar Borrowing or Bankers’ Acceptances, not later than 11:00 a.m., New York City time, three Business Days before the date of prepayment, (ii) in the case of prepayment of an ABR Borrowing or a Canadian Prime Rate Loan, not later than 11:00 a.m., New York City time, one Business Day before the date of prepayment and (iii) in the case of prepayment of a Swingline Loan, not later than 11:00 a.m., New York City time, on the date of prepayment. Each such notice shall be irrevocable; provided that, if a notice of prepayment is given in connection with a conditional notice of termination of the Commitments as contemplated by Section 2.07, then such notice of prepayment may be revoked if such termination is revoked in accordance with Section 2.07. Each such notice shall specify the prepayment date, the principal amount of each Borrowing or portion thereof to be prepaid and, in the case of a mandatory prepayment, a reasonably detailed calculation of the amount of such prepayment. Promptly following receipt of any such notice (other than a notice relating solely to Swingline Loans), such Administrative Agent shall advise the Lenders of the contents thereof. Each partial prepayment of any Borrowing shall be in an amount that would be permitted in the case of a Credit Extension of the same Type as provided in Section 2.02, except as necessary to apply fully the required amount of a mandatory prepayment. Each prepayment of a Borrowing shall be applied ratably to the Loans included in the prepaid Borrowing and otherwise in accordance with this Section 2.09. Prepayments shall be accompanied by accrued interest to the extent required by Section 2.06.
(a) If prior to the commencement of any Interest Period for a Eurodollar Borrowing:
(i) the applicable Administrative Agent determines (which determination shall be final and conclusive absent manifest error) that adequate and reasonable means do not exist for ascertaining the Adjusted LIBOR Rate for such Interest Period; or
(ii) the applicable Administrative Agent is advised in writing by the Required Lenders that the Adjusted LIBOR Rate for such Interest Period will not adequately and fairly reflect the cost to such Lenders of making or maintaining their Loans included in such Borrowing for such Interest Period;
(b) If prior to the commencement of any Interest Period relating to a Bankers’ Acceptance, the Canadian Administrative Agent determines (which determination shall be final and conclusive absent manifest error) that, by reason of circumstances affecting the money
markets, there is no active market for Bankers’ Acceptances or the demand for Bankers’ Acceptances is insufficient to allow the sale or trading of the Bankers’ Acceptances to be created hereunder, then:
(a) Increased Costs Generally. If any Change in Law shall:
(i) impose, modify or deem applicable any reserve, special deposit, compulsory loan, insurance charge or similar requirement against assets of, deposits with or for the account of, or credit extended or participated in, by any Lender (except any reserve requirement reflected in the Adjusted LIBOR Rate) or the Issuing Bank;
(ii) subject any Lender or the Issuing Bank to any tax of any kind whatsoever with respect to this Agreement, any Letter of Credit, any participation in a Letter of Credit or any Eurodollar Loan made by it or any Bankers’ Acceptance purchased or accepted by it, or change the basis of taxation of payments to such Lender or the Issuing Bank in respect thereof (except for Indemnified Taxes or Other Taxes covered by Section 2.15 and the imposition of, or any change in the rate of, any Excluded Tax payable by such Lender or the Issuing Bank); or
(iii) impose on any Lender or the Issuing Bank or the London interbank market any other condition, cost or expense (other than any Taxes) affecting this Agreement or Eurodollar Loans made by such Lender or any Bankers’ Acceptance purchased or accepted by such Lender or any Letter of Credit or participation therein;
(b) Capital Requirements. If any Lender or the Issuing Bank determines (in good faith, but in its sole absolute discretion) that any Change in Law affecting such Lender or the Issuing Bank or any lending office of such Lender or such Lender’s or the Issuing Bank’s holding company, if any, regarding capital requirements has or would have the effect of reducing the rate of return on such Lender’s or the Issuing Bank’s capital or on the capital of such Lender’s or the Issuing Bank’s holding company, if any, as a consequence of this Agreement, the Commitments of such Lender or the Loans made by, the Bankers’ Acceptances purchased or accepted by, or participations in Letters of Credit held by, such Lender, or the Letters of Credit issued by the Issuing Bank, to a level below that which such Lender or the Issuing Bank or such Lender’s or the Issuing Bank’s holding company could have achieved but for such Change in Law (taking into consideration such Lender’s or the Issuing Bank’s policies and the policies of such Lender’s or the Issuing Bank’s holding company with respect to capital adequacy), then from time to time the applicable Borrower will pay to such Lender or the Issuing Bank, as the case may be, such additional amount or amounts as will compensate such Lender or the Issuing Bank or such Lender’s or the Issuing Bank’s holding company for any such reduction suffered.
(c) Certificates for Reimbursement. A certificate of a Lender or the Issuing Bank setting forth the amount or amounts necessary to compensate such Lender or the Issuing Bank or its holding company, as the case may be, as specified in paragraph (a) or (b) of this Section 2.12 and delivered to the applicable Borrower shall be conclusive absent manifest error. The applicable Borrower shall pay such Lender or the Issuing Bank, as the case may be, the amount shown as due on any such certificate within 10 days after receipt thereof.
(d) Delay in Requests. Failure or delay on the part of any Lender or the Issuing Bank to demand compensation pursuant to this Section 2.12 shall not constitute a waiver of such Lender’s or the Issuing Bank’s right to demand such compensation; provided that Borrowers shall not be required to compensate a Lender or the Issuing Bank pursuant to this Section for any increased costs incurred or reductions suffered more than nine months prior to the date that such Lender or the Issuing Bank, as the case may be, notifies the applicable Borrower of the Change in Law giving rise to such increased costs or reductions and of such Lender’s or the Issuing Bank’s intention to claim compensation therefor (except that, if the Change in Law giving rise to such increased costs or reductions is retroactive, then the nine-month period referred to above shall be extended to include the period of retroactive effect thereof).
(a) Payments Generally. Borrowers shall make each payment required to be made by it hereunder or under any other Loan Document (whether of principal, interest, fees or Reimbursement Obligations, or of amounts payable under Section 2.12, Section 2.13, Section 2.15 or Section 11.03, or otherwise) on or before the time expressly required hereunder or under such other Loan Document for such payment (or, if no such time is expressly required, prior to 2:00 p.m., New York City time), on the date when due, in immediately available funds, without setoff, deduction or counterclaim. Any amounts received after such time on any date may, in the discretion of the applicable Administrative Agent, be deemed to have been received on the next succeeding Business Day for purposes of calculating interest thereon. All such payments shall be made to the applicable Administrative Agent at the office designated by it from time to time, except payments to be made directly to the Issuing Bank or a Swingline Lender as expressly provided herein and except that payments pursuant to Section 2.12, Section 2.13, Section 2.15 and Section 11.03 shall be made directly to the persons entitled thereto and payments pursuant to other Loan Documents shall be made to the persons specified therein. The applicable Administrative Agent shall distribute any such payments received by it for the account of any other person to the appropriate recipient promptly following receipt thereof. If any payment under any Loan Document shall be due on a day that is not a Business Day, unless specified otherwise, the date for payment shall be extended to the next succeeding Business Day, and, in the case of any payment accruing interest, interest thereon shall be payable for the period of such extension. All payments under each Loan Document shall be made in dollars, except as expressly specified otherwise.
(b) Pro Rata Treatment.
(i) Each payment by Borrowers of interest in respect of its Loans shall be applied to the amounts of such Borrower’s obligations owing to the applicable Lenders pro rata according to the respective amounts then due and owing to such Lenders.
(ii) Each payment by Borrowers on account of principal of the Revolving Borrowings shall be made to the applicable Lenders pro rata based on the principal amounts of the Revolving Loans then held by the Revolving Lenders.
(c) Insufficient Funds. If at any time insufficient funds are received by and available to the applicable Administrative Agent to pay fully all amounts of principal, Reimbursement Obligations, interest and fees then due hereunder, such funds shall be applied (i) first, toward payment of interest and fees then due hereunder, ratably among the parties entitled thereto in accordance with the amounts of interest and fees then due to such parties, and (ii) second, toward payment of principal and Reimbursement Obligations then due hereunder, ratably among the parties entitled thereto in accordance with the amounts of principal and Reimbursement Obligations then due to such parties.
(d) Sharing of Set-Off. Subject to the terms of the Intercreditor Agreement, if any Lender (and/or the Issuing Bank, which shall be deemed a “Lender” for purposes of this Section 2.14(d)) shall, by exercising any right of setoff or counterclaim or otherwise, obtain payment in respect of any principal of or interest on any of its Loans or other Obligations resulting in such Lender’s receiving payment of a proportion of the aggregate amount of its Loans and accrued interest thereon or other Obligations greater than its pro rata share thereof as provided herein, then the Lender receiving such greater proportion shall (a) notify the applicable Administrative Agent of such fact, and (b) purchase (for cash at face value) participations in the Loans and such other obligations of the other applicable Lenders, or make such other adjustments as shall be equitable, so that the benefit of all such payments shall be shared by the applicable Lenders ratably in accordance with the aggregate amount of principal of and accrued interest on their respective Loans and other amounts owing them, provided that:
(i) if any such participations are purchased and all or any portion of the payment giving rise thereto is recovered, such participations shall be rescinded and the purchase price restored to the extent of such recovery, without interest; and
(ii) the provisions of this paragraph shall not be construed to apply to (x) any payment made by Borrowers pursuant to and in accordance with the express terms of this Agreement or (y) any payment obtained by a Lender as consideration for the assignment of or sale of a participation in any of its Loans or participations in LC Disbursements to any assignee or participant, other than to Borrowers or any Subsidiary thereof (as to which the provisions of this paragraph shall apply).
(e) Borrowers Default. Unless the applicable Administrative Agent shall have received notice from any Borrower prior to the date on which any payment is due to such Administrative Agent for the account of the Lenders or the Issuing Bank hereunder that Borrowers will not make such payment, the Administrative Agent may assume that such Borrower has made such payment on such date in accordance herewith and may, in reliance upon such assumption, distribute to the Lenders or the Issuing Bank, as the case may be, the amount due. In such event, if the applicable Borrower has not in fact made such payment, then each of the Lenders or the Issuing Bank, as the case may be, severally agrees to repay to the applicable Administrative Agent forthwith on demand the amount so distributed to such Lender or the Issuing Bank with interest thereon, for each day from and including the date such amount is distributed to it to but excluding the date of payment to the Administrative Agent, at the greater of the Federal Funds Effective Rate and a rate determined by such Administrative Agent in accordance with banking industry rules on interbank compensation.
(f) Lender Default. If any Lender shall fail to make any payment required to be made by it pursuant to Section 2.02(c), Section 2.14(e), Section 2.17(d), Section 2.18(d), Section 2.18(e) or Section 11.03(c), then the applicable Administrative Agent may, in its discretion (notwithstanding any contrary provision hereof), apply any amounts thereafter received by such Administrative Agent for the account of such Lender to satisfy such Lender’s obligations under such Sections until all such unsatisfied obligations are fully paid.
(a) Payments Free of Taxes. Any and all payments by or on account of any obligation of the Loan Parties hereunder or under any other Loan Document shall be made free and clear of and without deduction or withholding for any Indemnified Taxes or Other Taxes; provided that if the Loan Parties shall be required by applicable Requirements of Law to deduct any Indemnified Taxes (including any Other Taxes) from such payments, then (i) the sum payable shall be increased as necessary so that after making all required deductions (including deductions applicable to additional sums payable under this Section) the applicable Administrative Agent, the applicable Collateral Agent, Lender or Issuing Bank, as the case may be, receives an amount equal to the sum it would have received had no such deductions been made, (ii) the applicable Loan Party shall make such deductions and (iii) the applicable Loan Party shall timely pay the full amount deducted to the relevant Governmental Authority in accordance with applicable Requirements of Law.
(b) Payment of Other Taxes by Borrowers. Without limiting the provisions of paragraph (a) above, Borrowers shall timely pay any Other Taxes to the relevant Governmental Authority in accordance with applicable Requirements of Law.
(c) Indemnification by Borrowers. Borrowers shall indemnify the Agents, each Lender and the Issuing Bank, within 10 days after demand therefor, for the full amount of any Indemnified Taxes or Other Taxes (including Indemnified Taxes or Other Taxes imposed or asserted on or attributable to amounts payable under this Section) paid by the Agents, such Lender or the Issuing Bank, as the case may be, and any penalties, interest and reasonable expenses arising therefrom or with respect thereto, whether or not such Indemnified Taxes or Other Taxes were correctly or legally imposed or asserted by the relevant Governmental Authority. A certificate as to the amount of such payment or liability delivered to Borrowers by a Lender or the Issuing Bank (with a copy to the Administrative Agents), or by the Agents on their own behalf or on behalf of a Lender or the Issuing Bank, shall be conclusive absent manifest error.
(d) Evidence of Payments. As soon as practicable after any payment of Indemnified Taxes or Other Taxes by Borrowers to a Governmental Authority, Borrowers shall deliver to the Administrative Agents the original or a certified copy of a receipt issued by such Governmental Authority evidencing such payment, a copy of the return reporting such payment or other evidence of such payment reasonably satisfactory to the Administrative Agents.
(e) Status of Lenders. Any Foreign Lender that is entitled to an exemption from or reduction of withholding tax under the law of the jurisdiction in which US Borrowers are resident for tax purposes, or any treaty to which such jurisdiction is a party, with respect to payments hereunder or under any other Loan Document shall, to the extent it may lawfully do so, deliver to US Borrowers (with a copy to the Administrative Agents), at the time or times prescribed by applicable Requirements of Law or as reasonably requested by US Borrowers or the Administrative Agents, such properly completed and executed documentation prescribed by applicable Requirements of Law as will permit such payments to be made without withholding or at a reduced rate of withholding. In addition, any Lender, if requested by US Borrowers or either Administrative Agent, shall deliver such other documentation prescribed by applicable Requirements of Law or reasonably requested by US Borrowers or the Administrative Agents as will enable US Borrowers or the Administrative Agents to determine whether or not such Lender is subject to backup withholding or information reporting requirements. Notwithstanding anything to the contrary in the above two sentences, in the case of non-U.S. withholding taxes the completion, execution and submission of non-U.S. forms shall not be required if in the Lender’s judgment such completion, execution or submission would subject such Lender to any material unreimbursed cost or expense or would be otherwise disadvantageous to such Lender in any material respect.
Each initial Canadian Lender of the Canadian Borrower represents and warrants to the Canadian Borrower that on the Closing Date (a) (i) it is not a “non-resident” within the meaning of the ITA; or (ii) it is an “authorized foreign bank” within the meaning of the Bank Act for purposes of the ITA, and is entering into this Agreement in the ordinary course of its trade and business that is its “Canadian banking business” for purposes of the ITA, and each amount paid or credited by or to it in respect of the transactions contemplated hereunder is, and will be brought into account and recorded and reported in computing its income for Canadian tax purposes as having been made or received as the case may be, in respect of its “Canadian banking business” as so defined; and (b) has no present intention to withdraw from this Agreement. Upon the written request of the Canadian Administrative Agent or the Canadian
Borrower acting reasonably, each such Canadian Lender shall use its best efforts to deliver to the Canadian Administrative Agent and Canadian Borrower such certificates, documents or other evidence as may be required from time to time, properly completed and duly executed by such Canadian Lender, to confirm the continuing accuracy of the foregoing representation or alternatively, shall deliver a notice to the Canadian Borrower indicating the facts and circumstances (other than facts and circumstances brought about unilaterally by such Canadian Lender) which have resulted in the above representation and warranty no longer continuing to be true and accurate. If such Canadian Lender fails to deliver such requested certificates, documents, other evidence on the one hand, or such notice on the other or, for greater certainty, the facts and circumstances relating to the change of the status of the Canadian Lender have been brought about unilaterally by such Canadian Lender, then the Canadian Borrower or the Canadian Administrative Agent, as the case may be, shall withhold from any interest payment to such Canadian Lender an amount equivalent to the applicable Canadian withholding tax imposed by applicable Canadian laws (including any applicable tax treaty) and the Canadian Borrower shall not be required to pay any additional or other amounts to such Canadian Lender under Section 2.15(a). From time to time, each such Canadian Lender shall (i) promptly submit to the Canadian Administrative Agent and the Canadian Borrower such certificates, documents, other evidence or notice as aforesaid, (ii) promptly notify the Canadian Administrative Agent and the Canadian Borrower of any change in circumstances which would result in the above representation and warranty no longer continuing to be true and accurate, and (iii) take such steps as shall not be materially disadvantageous to it, in the reasonable judgment of such Canadian Lender, and as may be reasonably necessary (including the re-designation of its Lending Office) to avoid any requirement of applicable laws that the Canadian Borrower make any deduction or withholding for Taxes from amounts payable to such Canadian Lender. Notwithstanding the foregoing, but subject to Section 11.04(b)(v), the Borrowers acknowledge that the rights and obligations of a Canadian Lender hereunder may be assigned to an Eligible Assignee that does not qualify as an Eligible Canadian Lender and further agree that any Borrower approval required in respect of such an assignment shall not be withheld on such basis.
(i) duly completed copies of Internal Revenue Service Form W-8BEN claiming eligibility for benefits of an income tax treaty to which the United States of America is a party,
(ii) duly completed copies of Internal Revenue Service Form W-8ECI,
(iii) in the case of a Foreign Lender claiming the benefits of the exemption for portfolio interest under Section 881(c) of the Code, (x) a certificate, in substantially the form of Exhibit Q, or any other form approved by the applicable Administrative Agent, to the effect that such Foreign Lender is not (A) a “bank” within the meaning of Section 881(c)(3)(A) of the Code, (B) a “10 percent shareholder” of any Borrower
within the meaning of Section 881(c)(3)(B) of the Code, or (C) a “controlled foreign corporation” described in Section 881(c)(3)(C) of the Code and (y) duly completed copies of Internal Revenue Service Form W-8BEN, or
(iv) any other form prescribed by applicable Requirements of Law as a basis for claiming exemption from or a reduction in United States Federal withholding tax duly completed together with such supplementary documentation as may be prescribed by applicable Requirements of Law to permit Borrower to determine the withholding or deduction required to be made.
This section shall not be construed to require either Administrative Agent, any Lender or the Issuing Bank to make available its tax returns (or any other information relating to its taxes that it deems confidential) to Borrowers or any other person. Notwithstanding anything to the contrary, in no event will any Administrative Agent, any Lender or the Issuing Bank be required to pay any amount to Borrowers the payment of which would place such Lender, such Administrative Agent or the Issuing Bank in a less favorable net after-tax position than such Lender, such Administrative Agent or the Issuing Bank would have been in if the additional amounts giving rise to such refund of any Indemnified Taxes or Other Taxes had never been paid.
(g) Upon the reasonable request of the Canadian Borrower, and at the Canadian Borrower’s expense, a Canadian Lender shall use its reasonable efforts to co-operate with the Canadian Borrower with a view to obtaining a refund of any Tax which is not, in the Canadian Borrower’s reasonable opinion, correctly or legally imposed and for which the Canadian Borrower has indemnified the Canadian Lender under this Agreement, if obtaining such refund would not, in the sole judgment of the Canadian Lender, be disadvantageous to the Canadian Lender; provided that nothing in this clause shall be construed to require the Canadian Lender to institute any administrative proceeding (other than the filing of a claim for any such refund) or judicial proceeding to obtain any such refund. If such Canadian Lender shall receive a refund from a taxing authority (as a result of any error in the imposition of Taxes by such taxing authority) or any Taxes paid by the Canadian Borrower pursuant to this Agreement, the Canadian Lender shall promptly pay to the Canadian Borrower the amount so received, less any Taxes imposed on the Canadian Lender as a result of such amount and net out-of-pocket expenses provided that the Canadian Lender shall only be required to pay the Canadian Borrower such amounts as the Canadian Lender determines are attributable to Taxes paid by the Canadian Borrower. In the event that the Canadian Lender is required to repay the amount of such refund (including interest, if any), the Canadian Borrower, upon the request of the Canadian Lender, agrees to promptly return to the Canadian Lender the amount of such refund and interest, if any (plus penalties, interest and other charges imposed in connection with the repayment of such amounts by the Canadian Lender).
(a) Designation of a Different Lending Office. If any Lender requests compensation under Section 2.12, or requires Borrowers to pay any additional amount to any Lender or any Governmental Authority for the account of any Lender pursuant to Section 2.15, then such Lender shall use reasonable efforts to designate a different lending office for funding or booking its Loans hereunder or to assign its rights and obligations hereunder to another of its offices,
branches or affiliates, if, in the judgment of such Lender, such designation or assignment (i) would eliminate or reduce amounts payable pursuant to Section 2.12 or Section 2.15, as the case may be, in the future and (ii) would not subject such Lender to any unreimbursed cost or expense and would not otherwise be disadvantageous to such Lender. Borrower hereby agrees to pay all reasonable costs and expenses incurred by any Lender in connection with any such designation or assignment. A certificate setting forth such costs and expenses submitted by such Lender to Borrower shall be conclusive absent manifest error.
(b) Replacement of Lenders. If any Lender requests compensation under Section 2.12, or if Borrowers are required to pay any additional amount to any Lender or any Governmental Authority for the account of any Lender pursuant to Section 2.15, or if any Lender defaults in its obligation to fund Loans hereunder, or if Borrowers exercises their replacement rights under Section 11.02(d), then Borrowers may, at their sole expense and effort, upon notice to such Lender and the Administrative Agents, require such Lender to assign and delegate, without recourse (in accordance with and subject to the restrictions contained in, and consents required by, Section 11.04), all of its interests, rights and obligations under this Agreement and the other Loan Documents to an Eligible Assignee that shall assume such obligations (which assignee may be another Lender, if a Lender accepts such assignment); provided that:
(i) Borrowers shall have paid to the applicable Administrative Agent the processing and recordation fee specified in Section 11.04(b);
(ii) such Lender shall have received payment of an amount equal to the outstanding principal of its Loans and participations in LC Disbursements and Swingline Loans, accrued interest thereon, accrued fees and all other amounts payable to it hereunder and under the other Loan Documents (including any amounts under Section 2.13), from the assignee (to the extent of such outstanding principal and accrued interest and fees) or Borrowers(in the case of all other amounts);
(iii) in the case of any such assignment resulting from a claim for compensation under Section 2.12 or payments required to be made pursuant to Section 2.15, such assignment will result in a reduction in such compensation or payments thereafter; and
(iv) such assignment does not conflict with applicable Requirements of Law.
(a) US Swingline Commitment. Subject to the terms and conditions set forth herein, the US Swingline Lender agrees to make US Swingline Loans to US Borrowers from time to time during the Revolving Availability Period, in an aggregate principal amount at any time outstanding that will not result in the aggregate principal amount of outstanding US Swingline Loans exceeding $35 million and provided that after making a US Swingline Loan, the sum of
the total US Revolving Exposures shall not exceed the lesser of (A) the total Revolving Commitments minus any Line Reserve and (B) the Borrowing Base then in effect; provided that the US Swingline Lender shall not be required to make a US Swingline Loan to refinance an outstanding Swingline Loan. Within the foregoing limits and subject to the terms and conditions set forth herein, US Borrowers may borrow, repay and reborrow US Swingline Loans.
(b) US Swingline Loans. To request a US Swingline Loan, Administrative Borrower shall deliver, by hand delivery or telecopier, a duly completed and executed Borrowing Request to the US Administrative Agent and the US Swingline Lender, not later than 2:00 p.m., New York City time, on the day of a proposed Swingline Loan. Each such notice shall be irrevocable and shall specify the requested date (which shall be a Business Day) and the amount of the requested US Swingline Loan. Each US Swingline Loan shall be an ABR Loan. The US Swingline Lender shall make each US Swingline Loan available to the applicable US Borrower by means of a credit to the general deposit account of such US Borrower with the US Swingline Lender (or, in the case of a US Swingline Loan made to finance the reimbursement of an LC Disbursement as provided in Section 2.18(e), by remittance to the Issuing Bank) by 3:00 p.m., New York City time, on the requested date of such US Swingline Loan. US Borrowers shall not request a US Swingline Loan if at the time of or immediately after giving effect to the extension of credit contemplated by such request a Default has occurred and is continuing or would result therefrom. US Swingline Loans shall be made in minimum amounts of $1.0 million and integral multiples of $500,000 above such amount.
(c) Prepayment. US Borrowers shall have the right at any time and from time to time to repay any US Swingline Loan, in whole or in part, upon giving written notice to the US Swingline Lender and the US Administrative Agent before 12:00 (noon), New York City time, on the proposed date of repayment.
(d) Canadian Swingline Commitment. Subject to the terms and conditions set forth herein, the Canadian Swingline Lender agrees to make Canadian Swingline Loans to Canadian Borrower from time to time during the Revolving Availability Period, in an aggregate principal amount at any time outstanding that will not result in the aggregate principal amount of outstanding Canadian Swingline Loans exceeding $5.0 million and provided that after making a Canadian Swingline Loan, the sum of the total Canadian Exposures shall not exceed the lesser of (A) the total Canadian Revolving Commitments minus any Line Reserve allocated to the Canadian Revolving Commitments and (B) the Canadian Borrowing Base then in effect; provided that the Canadian Swingline Lender shall not be required to make a Canadian Swingline Loan to refinance an outstanding Swingline Loan. Within the foregoing limits and subject to the terms and conditions set forth herein, Canadian Borrower may borrow, repay and reborrow Canadian Swingline Loans.
(e) Canadian Swingline Loans. To request a Swingline Loan, Administrative Borrower shall deliver, by hand delivery or telecopier, a duly completed and executed Borrowing Request to the Canadian Administrative Agent and the Canadian Swingline Lender, not later than 2:00 p.m., New York City time, on the day of a proposed Canadian Swingline Loan. Each such notice shall be irrevocable and shall specify the requested date (which shall be a Business Day) and the amount of the requested Canadian Swingline Loan. Each Canadian Swingline Loan shall be a Canadian Prime Rate Loan. The Canadian Swingline Lender shall make each
Canadian Swingline Loan available to Canadian Borrower by means of a credit to the general deposit account of Canadian Borrower with the Canadian Swingline Lender by 3:00 p.m., New York City time, on the requested date of such Canadian Swingline Loan. Canadian Borrower shall not request a Canadian Swingline Loan if at the time of or immediately after giving effect to the extension of credit contemplated by such request a Default has occurred and is continuing or would result therefrom. Canadian Swingline Loans shall be made in minimum amounts of Can$1.0 million and integral multiples of Can$500,000 above such amount.
(f) Prepayment. Canadian Borrower shall have the right at any time and from time to time to repay any Canadian Swingline Loan, in whole or in part, upon giving written notice to the Canadian Swingline Lender and the Canadian Administrative Agent before 12:00 (noon), New York City time, on the proposed date of repayment.
(g) Participations. Either Swingline Lender may at any time in its discretion by written notice given to the applicable Administrative Agent (provided such notice requirement shall not apply if either (i) the US Swingline Lender and the US Administrative Agent are the same entity or (ii) the Canadian Swingline Lender and the Canadian Administrative Agent are the same entity, as applicable) not later than 11:00 A.M., New York City time, on the next succeeding Business Day following such notice require the Revolving Lenders to acquire participations on such Business Day in all or a portion of the Swingline Loans then outstanding. Such notice shall specify the aggregate amount of Swingline Loans in which Revolving Lenders will participate. Promptly upon receipt of such notice, the applicable Administrative Agent will give notice thereof to each Revolving Lender, specifying in such notice such Lender’s Pro Rata Percentage of such Swingline Loan or Loans. Each Revolving Lender hereby absolutely and unconditionally agrees, upon receipt of notice as provided above, to pay to the applicable Administrative Agent, for the account of the applicable Swingline Lender, such Lender’s Pro Rata Percentage of such Swingline Loan or Swingline Loans. Each Revolving Lender acknowledges and agrees that its obligation to acquire participations in Swingline Loans pursuant to this paragraph is absolute and unconditional and shall not be affected by any circumstance whatsoever, including the occurrence and continuance of a Default or reduction or termination of the Commitments, and that each such payment shall be made without any offset, abatement, withholding or reduction whatsoever (so long as such payment shall not cause such Lender’s Revolving Exposure to exceed such Lender’s Revolving Commitment). Each Revolving Lender shall comply with its obligation under this paragraph by wire transfer of immediately available funds, in the same manner as provided in Section 2.02(c) with respect to Loans made by such Lender (and Section 2.02 shall apply, mutatis mutandis, to the payment obligations of the Revolving Lenders), and the applicable Administrative Agent shall promptly pay to the applicable Swingline Lender the amounts so received by it from the Revolving Lenders. The applicable Administrative Agent shall notify Administrative Borrower of any participations in any Swingline Loan acquired by the Revolving Lenders pursuant to this paragraph, and thereafter payments in respect of such Swingline Loan shall be made to such Administrative Agent and not to such Swingline Lender. Any amounts received by any Swingline Lender from any Borrower (or other party on behalf of Borrowers) in respect of a Swingline Loan after receipt by such Swingline Lender of the proceeds of a sale of participations therein shall be promptly remitted to the Administrative Agents. Any such amounts received by the Administrative Agents shall be promptly remitted by the Administrative Agents to the Revolving Lenders that shall have made their payments pursuant to this paragraph, as their
interests may appear. The purchase of participations in a Swingline Loan pursuant to this paragraph shall not relieve Borrowers of any default in the payment thereof.
(a) General. Subject to the terms and conditions set forth herein, US Borrowers may request the Issuing Bank, and the Issuing Bank agrees, to issue Letters of Credit denominated in any Approved Currency for its own account or the account of a Subsidiary in a form reasonably acceptable to the US Administrative Agent and the Issuing Bank, at any time and from time to time during the Revolving Availability Period (provided that US Borrowers shall be a co-applicant, and be jointly and severally liable, with respect to each Letter of Credit issued for the account of a Subsidiary). Upon receipt of an LC Request in accordance with Section 2.18(b) below, the US Administrative Agent shall notify the Issuing Bank as to whether the issuance of such Letter of Credit is authorized. The Issuing Bank shall not issue any Letter of Credit without first receiving such authorization and US Borrowers shall not request the issuance of, any Letter of Credit at any time if after giving effect to such issuance, the LC Exposure would exceed the LC Commitment or the total Revolving Exposure would exceed the limits set forth in clause (b) below. In the event of any inconsistency between the terms and conditions of this Agreement and the terms and conditions of any form of letter of credit application or other agreement submitted by US Borrowers to, or entered into by US Borrowers with, the Issuing Bank relating to any Letter of Credit, the terms and conditions of this Agreement shall control. Borrowers and Guarantors hereby acknowledge and agree that, effective as of the Original Closing Date, each of the Existing Issuing Bank Letters of Credit shall be deemed and shall each constitute a Letter of Credit as if such Existing Issuing Bank Letters of Credit were originally issued as a Letter of Credit under the Original Credit Agreement and shall be subject to the terms and conditions of this Agreement.
(b) Request for Issuance, Amendment, Renewal, Extension; Certain Conditions and Notices. To request the issuance of a Letter of Credit or the amendment, renewal or extension of an outstanding Letter of Credit, US Borrowers shall deliver, by hand or telecopier (or transmit by electronic communication, if arrangements for doing so have been approved by the Issuing Bank), an LC Request to the Issuing Bank and the US Administrative Agent not later than 11:00 a.m. on the third Business Day preceding the requested date of issuance, amendment, renewal or extension (or such later date and time as is acceptable to the Issuing Bank).
(i) the proposed issuance date of the requested Letter of Credit (which shall be a Business Day);
(ii) the amount and the currency thereof (which shall be any Approved Currency);
(iii) the expiry date thereof (which shall not be later than the close of business on the Letter of Credit Expiration Date);
(iv) the name and address of the beneficiary thereof;
(v) whether the Letter of Credit is to be issued for its own account or for the account of one of its Subsidiaries (provided that US Borrowers shall be a co-applicant, and therefor jointly and severally liable, with respect to each Letter of Credit issued for the account of a Subsidiary);
(vi) the documents to be presented by such beneficiary in connection with any drawing thereunder;
(vii) the full text of any certificate to be presented by such beneficiary in connection with any drawing thereunder; and
(viii) such other matters as the Issuing Bank may require.
(c) Expiration Date. Each Letter of Credit shall expire (or be subject to non-renewal or termination by the US Administrative Agent) at or prior to the close of business on the earlier of (x) the date which is one year after the date of the issuance of such Letter of Credit (or, in the case of any renewal or extension thereof, one year after such renewal or extension) and (y) the Letter of Credit Expiration Date.
(d) Participations. By the issuance of a Letter of Credit (or an amendment to a Letter of Credit increasing the amount thereof) and without any further action on the part of the Issuing Bank or the Lenders, the Issuing Bank hereby irrevocably grants to each Revolving Lender, and each Revolving Lender hereby acquires from the Issuing Bank, a participation in such Letter of Credit equal to such Revolving Lender’s Pro Rata Percentage of the aggregate amount available to be drawn under such Letter of Credit. In consideration and in furtherance of the foregoing, each Revolving Lender hereby absolutely and unconditionally agrees to pay to the US Administrative Agent, for the account of the Issuing Bank, such Revolving Lender’s Pro Rata Percentage of each LC Disbursement made by the Issuing Bank and not reimbursed by US Borrowers on the date due as provided in Section 2.18(d), or of any reimbursement payment required to be refunded to US Borrowers for any reason. Each Revolving Lender acknowledges and agrees that its obligation to acquire participations pursuant to this paragraph in respect of Letters of Credit is absolute and unconditional and shall not be affected by any circumstance whatsoever, including any amendment, renewal or extension of any Letter of Credit or the occurrence and continuance of a Default or reduction or termination of the Commitments, or expiration, termination or cash collateralization of any Letter of Credit and that each such payment shall be made without any offset, abatement, withholding or reduction whatsoever.
(e) Reimbursement.
(i) If the Issuing Bank shall make any LC Disbursement in respect of a Letter of Credit or LC Acceptance, US Borrowers (or Canadian Borrower, in the first instance, and US Borrowers, alternatively, for Letters of Credit governed by Section 2.18(m)) shall reimburse such LC Disbursement by paying to the Issuing Bank an amount equal to such LC Disbursement not later than 3:00 p.m., New York City time, on the date that such LC Disbursement is made if Administrative Borrower shall have received notice of such LC Disbursement prior to 11:00 a.m., New York City time, on such date, or, if such notice has not been received by Administrative Borrower prior to such time on such date, then not later than 3:00 p.m., New York City time, on the Business Day immediately following the day that Administrative Borrower receives such notice; provided that US Borrowers may, subject to the conditions to borrowing set forth herein, request in accordance with Section 2.03 that such payment be financed with ABR Revolving Loans or Swingline Loans in an equivalent amount and, to the extent so financed, Administrative Borrowers’ obligation to make such payment shall be discharged and replaced by the resulting ABR Revolving Loans or Swingline Loans.
(ii) If US Borrowers (or Canadian Borrower and US Borrowers for Letters of Credit governed by Section 2.18(m)) fail to make such payment when due, the Issuing Bank shall notify the US Administrative Agent and the US Administrative Agent shall notify each Revolving Lender of the applicable LC Disbursement, the payment then due from US Borrowers in respect thereof and such Revolving Lender’s Pro Rata Percentage thereof. Each Revolving Lender shall pay by wire transfer of immediately available funds to the US Administrative Agent not later than 2:00 p.m., New York City time, on such date (or, if such Revolving Lender shall have received such notice later than 12:00 noon, New York City time, on any day, not later than 11:00 a.m., New York City time, on the immediately following Business Day), an amount equal to such Revolving Lender’s Pro Rata Percentage of the unreimbursed LC Disbursement in the same manner as provided in Section 2.02(c) with respect to Revolving Loans made by such Revolving Lender, and the US Administrative Agent will promptly pay to the Issuing Bank the amounts so received by it from the Revolving Lenders. The US Administrative Agent will promptly pay to the Issuing Bank any amounts received by it from US Borrowers or Canadian Borrower, as the case may be, pursuant to the above paragraph prior to the time that any Revolving Lender makes any payment pursuant to the preceding sentence and any such amounts received by the US Administrative Agent from US Borrowers or Canadian Borrower, as the case may be, thereafter will be promptly remitted by the US Administrative Agent to the Revolving Lenders that shall have made such payments and to the Issuing Bank, as appropriate.
(iii) If any Revolving Lender shall not have made its Pro Rata Percentage of such LC Disbursement available to the US Administrative Agent as provided above, each of such Revolving Lender and US Borrowers severally agree to pay interest on such amount, for each day from and including the date such amount is required to be paid in accordance with the foregoing to but excluding the date such amount is paid, to the US Administrative Agent for the account of the Issuing Bank at (i) in the case of US Borrower, the rate per annum set forth in Section 2.18(h) and (ii) in the case of such Lender, at a rate determined by the US Administrative Agent in accordance with banking industry rules or practices on interbank compensation.
(iv) All payments made pursuant to this Section 2.18(e) shall be in the Approved Currency in which the LC Disbursement giving rise to such payment is denominated.
(f) Obligations Absolute. The Reimbursement Obligation of US Borrowers and Canadian Borrower, as applicable, as provided in Section 2.18(e) shall be absolute, unconditional and irrevocable, and shall be paid and performed strictly in accordance with the terms of this Agreement under any and all circumstances whatsoever and irrespective of (i) any lack of validity or enforceability of any Letter of Credit or this Agreement, or any term or provision therein; (ii) any draft or other document presented under a Letter of Credit being proved to be forged, fraudulent, invalid or insufficient in any respect or any statement therein being untrue or inaccurate in any respect; (iii) payment by the Issuing Bank (or creation of an LC Acceptance) under a Letter of Credit against presentation of a draft or other document that fails to comply with the terms of such Letter of Credit; (iv) any other event or circumstance whatsoever, whether or not similar to any of the foregoing, that might, but for the provisions of this Section 2.18,
constitute a legal or equitable discharge of, or provide a right of setoff against, the obligations of US Borrowers and Canadian Borrower, as applicable, hereunder; (v) the fact that a Default shall have occurred and be continuing; or (vi) any material adverse change in the business, property, results of operations, prospects or condition, financial or otherwise, of US Borrowers and its Subsidiaries. None of the Agents, the Lenders, the Issuing Bank or any of their Affiliates shall have any liability or responsibility by reason of or in connection with the issuance or transfer of any Letter of Credit or any LC Acceptance or any payment or failure to make any payment thereunder (irrespective of any of the circumstances referred to in the preceding sentence), or any error, omission, interruption, loss or delay in transmission or delivery of any draft, notice or other communication under or relating to any Letter of Credit (including any document required to make a drawing thereunder), any error in interpretation of technical terms or any consequence arising from causes beyond the control of the Issuing Bank; provided that the foregoing shall not be construed to excuse the Issuing Bank from liability to US Borrowers or Canadian Borrower, as applicable, to the extent of any direct damages (as opposed to consequential damages, claims in respect of which are hereby waived by Borrowers to the extent permitted by applicable Requirements of Law) suffered by US Borrowers or Canadian Borrower, as applicable, that are caused by the Issuing Bank’s failure to exercise care when determining whether drafts and other documents presented under a Letter of Credit comply with the terms thereof. The parties hereto expressly agree that, in the absence of gross negligence or willful misconduct on the part of the Issuing Bank (as finally determined by a court of competent jurisdiction), the Issuing Bank shall be deemed to have exercised care in each such determination. In furtherance of the foregoing and without limiting the generality thereof, the parties agree that, with respect to documents presented which appear on their face to be in substantial compliance with the terms of a Letter of Credit, the Issuing Bank may, in its sole discretion, either accept and make payment upon such documents without responsibility for further investigation, regardless of any notice or information to the contrary, or refuse to accept and make payment upon such documents if such documents are not in strict compliance with the terms of such Letter of Credit.
(g) Disbursement Procedures. The Issuing Bank shall, promptly following its receipt thereof, examine all documents purporting to represent a demand for payment (or creation of an LC Acceptance) under a Letter of Credit. The Issuing Bank shall promptly give written notice to the US Administrative Agent and US Borrowers of such demand for payment and whether the Issuing Bank has made or will make an LC Disbursement thereunder (or, in the case of the creation of an LC Acceptance, the date payment is due thereunder); provided that any failure to give or delay in giving such notice shall not relieve Administrative Borrower or Canadian Borrower, as applicable, of its Reimbursement Obligation to the Issuing Bank and the Revolving Lenders with respect to any such LC Disbursement (other than with respect to the timing of such Reimbursement Obligation set forth in Section 2.18(e)).
(h) Interim Interest. If the Issuing Bank shall make any LC Disbursement, then, unless US Borrowers or Canadian Borrower, as applicable, shall reimburse such LC Disbursement in full on the date such LC Disbursement is made, the unpaid amount thereof shall bear interest payable on demand, for each day from and including the date such LC Disbursement is made to but excluding the date that US Borrowers or Canadian Borrower, as applicable, reimburse such LC Disbursement, at the rate per annum determined pursuant to Section 2.06(e). Interest accrued pursuant to this paragraph shall be for the account of the Issuing Bank, except that interest accrued on and after the date of payment by any Revolving
Lender pursuant to Section 2.18(e) to reimburse the Issuing Bank shall be for the account of such Lender to the extent of such payment.
(i) Cash Collateralization. If any Event of Default shall occur and be continuing, on the Business Day that Administrative Borrower receives notice from the US Administrative Agent or the Required Lenders (or, if the maturity of the Loans has been accelerated, Revolving Lenders with LC Exposure representing greater than 50% of the total LC Exposure) demanding the deposit of cash collateral pursuant to this paragraph, US Borrowers shall deposit on terms and in accounts satisfactory to the applicable Collateral Agents, in the name of the applicable Collateral Agents and for the benefit of the Revolving Lenders, an amount in cash equal to the LC Exposure as of such date plus any accrued and unpaid interest thereon; provided that the obligation to deposit such cash collateral shall become effective immediately, and such deposit shall become immediately due and payable, without demand or other notice of any kind, upon the occurrence of any Event of Default with respect to US Borrowers described in Section 8.01(g) or Section 8.01(h). Funds so deposited shall be applied by the applicable Collateral Agents to reimburse the Issuing Bank for LC Disbursements for which it has not been reimbursed and, to the extent not so applied, shall be held for the satisfaction of outstanding Reimbursement Obligations or, if the maturity of the Loans has been accelerated (but subject to the consent of Revolving Lenders with LC Exposure representing greater than 50% of the total LC Exposure), be applied to satisfy other Obligations of US Borrowers under this Agreement. If US Borrowers are required to provide an amount of cash collateral hereunder as a result of the occurrence of an Event of Default, such amount plus any accrued interest or realized profits with respect to such amounts (to the extent not applied as aforesaid) shall be returned to US Borrowers within three Business Days after all Events of Default have been cured or waived.
(j) Additional Issuing Banks. US Borrowers may, at any time and from time to time, designate one or more additional Revolving Lenders to act as an issuing bank under the terms of this Agreement, with the consent of the US Administrative Agent (which consent shall not be unreasonably withheld), the Issuing Bank and such Revolving Lender(s). Any Lender designated as an issuing bank pursuant to this paragraph (j) shall be deemed (in addition to being a Revolving Lender) to be the Issuing Bank with respect to Letters of Credit issued or to be issued by such Revolving Lender, and all references herein and in the other Loan Documents to the term “Issuing Bank” shall, with respect to such Letters of Credit, be deemed to refer to such Revolving Lender in its capacity as Issuing Bank, as the context shall require.
(k) Resignation or Removal of the Issuing Bank. The Issuing Bank may resign as Issuing Bank hereunder at any time upon at least 30 days’ prior notice to the Lenders, the Administrative Agents and Administrative Borrower. The Issuing Bank may be replaced at any time by written agreement among US Borrowers, each Agent, the replaced Issuing Bank and the successor Issuing Bank. US Administrative Agent shall notify the Lenders of any such replacement of the Issuing Bank or any such additional Issuing Bank. At the time any such resignation or replacement shall become effective, US Borrowers shall pay all unpaid fees accrued for the account of the replaced Issuing Bank pursuant to Section 2.05(c). From and after the effective date of any such resignation or replacement or addition, as applicable, (i) the successor or additional Issuing Bank shall have all the rights and obligations of the Issuing Bank under this Agreement with respect to Letters of Credit to be issued by it thereafter and (ii) references herein to the term “Issuing Bank” shall be deemed to refer to such successor or
such addition or to any previous Issuing Bank, or to such successor or such addition and all previous Issuing Banks, as the context shall require. After the resignation or replacement of an Issuing Bank hereunder, the replaced Issuing Bank shall remain a party hereto and shall continue to have all the rights and obligations of an Issuing Bank under this Agreement with respect to Letters of Credit issued by it prior to such resignation or replacement, but shall not be required to issue additional Letters of Credit. If at any time there is more than one Issuing Bank hereunder, US Borrowers may, in their discretion, select which Issuing Bank is to issue any particular Letter of Credit.
(l) Other. The Issuing Bank shall be under no obligation to issue any Letter of Credit if
(i) any order, judgment or decree of any Governmental Authority or arbitrator shall by its terms purport to enjoin or restrain the Issuing Bank from issuing such Letter of Credit, or any Requirement of Law applicable to the Issuing Bank or any request or directive (whether or not having the force of law) from any Governmental Authority with jurisdiction over the Issuing Bank shall prohibit, or request that the Issuing Bank refrain from, the issuance of letters of credit generally or such Letter of Credit in particular or shall impose upon the Issuing Bank with respect to such Letter of Credit any restriction, reserve or capital requirement (for which the Issuing Bank is not otherwise compensated hereunder) not in effect on the Closing Date, or shall impose upon the Issuing Bank any unreimbursed loss, cost or expense which was not applicable on the Closing Date and which the Issuing Bank in good faith deems material to it; or
(ii) the issuance of such Letter of Credit would violate one or more policies of the Issuing Bank.
(m) Notwithstanding the foregoing, at no time shall there be greater than $10 million outstanding of Letters of Credit issued for the account of Canadian Borrower and/or Canadian Guarantors and any such Letters of Credit issued for the account of Canadian Borrower and/or the Canadian Guarantors shall be treated as if issued for the account of a US Borrower for purposes of calculating the Borrowing Base. The Canadian Borrower shall have the primary responsibility for the Reimbursement Obligation with respect to any such Letter of Credit through the borrowing of Canadian Revolving Loans; provided, that in the event Canadian Borrower shall not reimburse such Issuing Bank then such obligation shall be for the account of US Borrowers as provided in Section 2.18(e).
(a) Borrower Request. The Borrowers may by written notice to the Administrative Agents elect to request prior to the Revolving Maturity Date, an increase to the existing Revolving Commitments by an amount not in excess of $100 million in the aggregate and not
(b) Conditions. The increased or new Commitments shall become effective, as of such Increase Effective Date; provided that:
(i) each of the conditions set forth in Section 4.02 shall be satisfied;
(ii) no Default shall have occurred and be continuing or would result from the borrowings to be made on the Increase Effective Date;
(iii) if on the Increase Effective Date (prior to giving effect to the borrowings or the increase in commitments to be made on the Increase Effective Date) the Excess Availability is less than $75 million then, after giving pro forma effect to the borrowings to be made on the Increase Effective Date and to any change in Consolidated Cash Flow and any increase in Indebtedness resulting from the consummation of any Permitted Acquisition concurrently with such borrowings as of the date of the most recent financial statements delivered pursuant to Section 5.01(a) or Section 5.01(b), Borrowers shall be in compliance with each of the covenants set forth in Section 6.10;
(iv) Borrowers shall make any payments required pursuant to Section 2.13 in connection with any adjustment of Revolving Loans pursuant to Section 2.19(d); and
(v) Borrowers shall deliver or cause to be delivered any legal opinions or other documents reasonably requested by the applicable Administrative Agent in connection with any such transaction.
(c) Terms of New Loans and Commitments. The terms and provisions of the Revolving Loans made pursuant to the new Commitments shall be identical to the Revolving Loans. The increased or new Commitments shall be effected by a joinder agreement (the “Increase Joinder”) executed by the Borrowers, the Administrative Agents and each Lender making such increased or new Commitment, in form and substance satisfactory to each of them.
The Increase Joinder may, without the consent of any other Lenders, effect such amendments to this Agreement and the other Loan Documents as may be necessary or appropriate, in the opinion of the Administrative Agents, to effect the provisions of this Section 2.19.
(d) Adjustment of Revolving Loans. Each of the Revolving Lenders (other than Canadian Revolving Lenders) having a Revolving Commitment prior to such Increase Effective Date (the “Pre-Increase Revolving Lenders”) shall assign to any Revolving Lender which is acquiring a new or additional Revolving Commitment on the Increase Effective Date (the “Post-Increase Revolving Lenders”), and such Post-Increase Revolving Lenders shall purchase from each Pre-Increase Revolving Lender, at the principal amount thereof, such interests in the Revolving Loans and participation interests in LC Exposure and Swingline Loans outstanding on such Increase Effective Date as shall be necessary in order that, after giving effect to all such assignments and purchases, such Revolving Loans and participation interests in LC Exposure and Swingline Loans will be held by Pre-Increase Revolving Lenders and Post-Increase Revolving Lenders ratably in accordance with their Revolving Commitments after giving effect to such increased Revolving Commitments.
(e) Adjustment of Canadian Revolving Loans. Each of the Canadian Revolving Lenders having a Canadian Revolving Commitment prior to such Increase Effective Date (the “Canadian Pre-Increase Revolving Lenders”) shall assign to any Revolving Lender which is acquiring a new or additional Canadian Revolving Commitment on the Increase Effective Date (the “Canadian Post-Increase Revolving Lenders”), and such Canadian Post-Increase Revolving Lenders shall purchase from each Canadian Pre-Increase Revolving Lender, at the principal amount thereof, such interests in the Canadian Revolving Loans outstanding on such Increase Effective Date as shall be necessary in order that, after giving effect to all such assignments and purchases, such Revolving Loans will be held by Canadian Pre-Increase Revolving Lenders and Canadian Post-Increase Revolving Lenders ratably in accordance with their Canadian Revolving Commitments after giving effect to such increased Canadian Revolving Commitments.
(f) Equal and Ratable Benefit. The Loans and Commitments established pursuant to this paragraph shall constitute Loans and Commitments under, and shall be entitled to all the benefits afforded by, this Agreement and the other Loan Documents, and shall, without limiting the foregoing, benefit equally and ratably from the Guarantees and security interests created by the Security Documents, except that the new Loans may be subordinated in right of payment or the Liens securing the new Loans may be subordinated, in each case, as set forth in the Increase Joinder. The Loan Parties shall take any actions reasonably required by the Administrative Agents to ensure and/or demonstrate that the Lien and security interests granted by the Security Documents continue to be perfected under the UCC or the PPSA, as applicable, or otherwise after giving effect to the establishment of any such new Commitments.
SECTION 2.20. Determination of Borrowing Base.
(a) Eligible Accounts. On any date of determination of the Borrowing Base, the term “Eligible Accounts” as used herein shall comprise all of the Credit Card Receivables of US Borrowers and any of the US Borrowing Base Guarantors as arise in the ordinary course of business, which have been earned by performance, that are not excluded as ineligible by virtue of
one or more of the criteria set forth below and are reflected in the most recent Borrowing Base Certificate delivered by the Borrowers to the Collateral Agents and the Administrative Agents. None of the following shall be deemed to be Eligible Accounts:
(i) Credit Card Receivables due from major credit card processors that have been outstanding for more than five (5) Business Days from the date of sale, or for such longer period(s) as may be approved by the applicable Collateral Agents;
(ii) Credit Card Receivables due from major credit card processors with respect to which US Borrowers or any of the US Borrowing Base Guarantors do not have good, valid and marketable title thereto, free and clear of any Lien (other than Liens granted to the applicable Administrative Agent for its own benefit and the benefit of the other Secured Parties pursuant to the Security Documents, those Liens specified in Section 6.02 (a), (e) and (i) and Permitted Liens having priority by operation of applicable law over the Lien of the Collateral Agents);
(iii) Credit Card Receivables due from major credit card processors that are not subject to a first priority (except as provided in clause (ii), above) security interest in favor of the Collateral Agents, as applicable, for its own benefit and the benefit of the other Secured Parties;
(iv) Credit Card Receivables due from major credit card processors which are disputed, or with respect to which a claim, counterclaim, offset or chargeback has been asserted, by the related credit card processor (but only to the extent of such dispute, counterclaim, offset or chargeback) (it being the intent that chargebacks in the ordinary course by the credit card processors as contemplated by the applicable Control Agreement shall not be deemed violative of this clause);
(v) Except as otherwise approved by the US Administrative Agent and applicable Collateral Agents, Credit Card Receivables due from major credit card processors as to which the credit card processor has the right under certain circumstances to require the US Borrowers or any of the US Borrowing Base Guarantors to repurchase such Accounts from such credit card processor;
(vi) Except as otherwise approved by the US Administrative Agent and applicable Collateral Agents, Credit Card Receivables due from major credit card processors as to which the US Administrative Agent and the applicable Collateral Agents have not received an acceptable Control Agreement;
(vii) Accounts due from major credit card processors (other than Visa, Mastercard, American Express, Diners Club and Discover) which the applicable Collateral Agents determine in their commercially reasonable discretion, acting in good faith, to be unlikely to be collected; or
(viii) Except as otherwise approved by the applicable Collateral Agents in their sole discretion, Credit Card Receivables of US Borrowers and any of the US Borrowing Base Guarantors arising from Private Label Credit Cards.
Notwithstanding the above, the applicable Collateral Agents and the US Administrative Agent reserve the right, at any time and from time to time after the Closing Date, to adjust the criteria set forth above, to establish new criteria and to adjust the applicable advance rate with respect to Eligible Accounts, in their Permitted Discretion, subject to the approval of the Supermajority Lenders in the case of adjustments, new criteria or changes in the applicable advance rates which have the effect of making more credit available. The Collateral Agents shall have the right to establish, modify or eliminate Reserves against Eligible Accounts (including, without limitation, for estimates, chargeback or other accrued liabilities or offsets by credit card processors and amounts to adjust for material claims, offsets, defenses or counterclaims or other material disputes described in Section 9.01) from time to time in their Permitted Discretion.
(b) Eligible Inventory. For purposes of this Agreement, Eligible Inventory shall exclude any Inventory to which any of the exclusionary criteria set forth below applies. The Collateral Agents shall have the right to establish, modify or eliminate Reserves against Eligible Inventory from time to time in their Permitted Discretion. In addition, the Collateral Agents and the Administrative Agents reserve the right, upon two (2) Business Day’s prior written notice to the Administrative Borrower, at any time and from time to time after the Closing Date, to adjust any of the criteria set forth below, to establish new criteria and to adjust the applicable advance rate with respect to Eligible Inventory, in their Permitted Discretion, subject to the approval of the Supermajority Lenders in the case of adjustments, new criteria, changes in the applicable advance rate or the elimination of Reserves which have the effect of making more credit available. Eligible Inventory shall not include any Inventory of US Borrowers or any US Borrowing Base Guarantor that:
(i) the applicable Collateral Agents, on behalf of Secured Parties, do not have a first priority and exclusive perfected Lien on such Inventory;
(ii) (1) is stored at a leased or rented location where the aggregate value of Inventory exceeds $250,000 unless the applicable Collateral Agents have given their prior consent thereto or unless either (x) a Landlord Access Agreement in respect of such location has been delivered to the applicable Collateral Agents, or (y) Reserves reasonably satisfactory to the applicable Collateral Agents have been established with respect thereto or (2) is stored with a bailee or warehouseman where the aggregate value of Inventory exceeds $250,000 unless either (x) an acknowledged bailee waiver letter which is in form and substance satisfactory to the applicable Collateral Agents and the US Administrative Agent has been received by the applicable Collateral Agents or (y) Reserves reasonably satisfactory to the applicable Collateral Agents have been established with respect thereto, or (3) is located at an owned location subject to a mortgage in favor of a lender other than any of the Collateral Agents and the Senior Note Collateral Agent where the aggregate value of Inventory exceeds $250,000 unless either (x) mortgagee waiver which is in form and substance satisfactory to the applicable Collateral Agents and the US Administrative Agent has been delivered to the applicable Collateral Agents or (y) Reserves reasonably satisfactory to the applicable Collateral Agents have been established with respect thereto;
(iii) (1) is placed on consignment by a third party consignor with any US Borrower or US Borrowing Base Guarantor as consignee or (2) is placed on
consignment by any US Borrower or US Borrowing Base Guarantor as consignor with any third party as consignee, unless a valid consignment agreement which is reasonably satisfactory to applicable Collateral Agents is in place with respect to such Inventory;
(iv) is covered by a negotiable document of title, unless such document has been delivered to the applicable Collateral Agents with all necessary endorsements, free and clear of all Liens except those in favor of the Collateral Agents and the Lenders and landlords, carriers, bailees and warehousemen if clause (ii) above has been complied with;
(v) is to be returned to suppliers;
(vi) is obsolete, unsalable, shopworn, seconds, damaged or unfit for sale;
(vii) consists of display items, samples or packing or shipping materials, manufacturing supplies, work-in-process Inventory, replacement parts or spare parts;
(viii) is not finished goods held for sale in the ordinary course of US Borrower’s or any US Borrowing Base Guarantor’s, as applicable, business;
(ix) breaches any of the representations or warranties pertaining to Inventory set forth in the Loan Documents;
(x) consists of Hazardous Material or goods that, in either case, can be transported or sold only with licenses that are not readily available;
(xi) is not covered by casualty insurance maintained as required by Section 5.04;
(xii) supplies used or consumed in US Borrower’s business;
(xiii) bill and hold goods;
(xiv) unserviceable or slow moving Inventory;
(xv) inventory returned by retail customers that is not held for resale;
(xvi) inventory subject to deposit made by retail customers for sale of Inventory that have not been delivered to the extent of such deposits; or
(xvii) is subject to any licensing arrangement the effect of which would be to limit the ability of any Collateral Agent, or any person selling the Inventory on behalf of such Collateral Agent, to sell such Inventory in enforcement of such Collateral Agent’s Liens, without further consent or payment to the licensor or other person.
SECTION 2.21. Determination of Canadian Borrowing Base.
(a) Eligible Canadian Accounts. On any date of determination of the Canadian Borrowing Base the term “Eligible Canadian Accounts” as used herein shall comprise all of the
Credit Card Receivables of Canadian Borrower and any of Canadian Borrowing Base Guarantors as arise in the ordinary course of business, which have been earned by performance, that are not excluded as ineligible by virtue of one or more of the criteria set forth below and are reflected in the most recent Borrowing Base Certificate delivered by the Borrowers to the Collateral Agents and the Administrative Agents. None of the following shall be deemed to be Eligible Accounts:
(i) Credit Card Receivables due from major credit card processors that have been outstanding for more than five (5) Business Days from the date of sale or, in the case of Accounts due from American Express to the Canadian Borrower or any of the Canadian Borrowing Base Guarantors, that have been outstanding for more than ten (10) Business Days from the date of sale, or for such longer period(s) as may be approved by the applicable Collateral Agents;
(ii) Credit Card Receivables due from major credit card processors with respect to which Canadian Borrower or any of the Canadian Borrowing Base Guarantors do not have good, valid and marketable title thereto, free and clear of any Lien (other than Liens granted to the applicable Administrative Agent for its own benefit and the benefit of the other Secured Parties pursuant to the Security Documents, those Liens specified in Section 6.02 (a), (e) and (i) and Permitted Liens having priority by operation of applicable law over the Lien of the applicable Collateral Agents);
(iii) Credit Card Receivables due from major credit card processors that are not subject to a first priority (except as provided in clause (ii), above) security interest in favor of the Collateral Agents, as applicable, for its own benefit and the benefit of the other Secured Parties;
(iv) Credit Card Receivables due from major credit card processors which are disputed, or with respect to which a claim, counterclaim, offset or chargeback has been asserted, by the related credit card processor (but only to the extent of such dispute, counterclaim, offset or chargeback) (it being the intent that chargebacks in the ordinary course by the credit card processors shall not be deemed violative of this clause);
(v) Except as otherwise approved by the Canadian Administrative Agent and applicable Collateral Agents, Credit Card Receivables due from major credit card processors as to which the credit card processor has the right under certain circumstances to require the Canadian Borrower or any of the Canadian Borrowing Base Guarantors to repurchase such Accounts from such credit card processor;
(vi) Except as otherwise approved by the Canadian Administrative Agent and applicable Collateral Agents, Credit Card Receivables due from major credit card processors as to which the Canadian Administrative Agent and the applicable Collateral Agents have not received an acceptable Control Agreement;
(vii) Accounts due from major credit card processors (other than Visa, Mastercard, American Express, Diners Club and Discover) which the applicable
Collateral Agents determine in their commercially reasonable discretion, acting in good faith, to be unlikely to be collected.; or
(viii) Except as otherwise approved by the applicable Collateral Agents in their sole discretion, Credit Card Receivables of Canadian Borrower and any of the Canadian Borrowing Base Guarantors arising from Private Label Credit Cards.
Notwithstanding the above, the applicable Collateral Agents and the Canadian Administrative Agent reserve the right, at any time and from time to time after the Closing Date, to adjust the criteria set forth above, to establish new criteria and to adjust the applicable advance rate with respect to Eligible Canadian Accounts, in their Permitted Discretion, subject to the approval of the Supermajority Lenders in the case of adjustments, new criteria or changes in the applicable advance rates which have the effect of making more credit available. The Collateral Agents shall have the right to establish, modify or eliminate Reserves against Eligible Canadian Accounts (including, without limitation, for estimates, chargeback or other accrued liabilities or offsets by credit card processors and amounts to adjust for material claims, offsets, defenses or counterclaims or other material disputes described in Section 9.01) from time to time in their Permitted Discretion.
(b) Eligible Inventory. For purposes of this Agreement, Eligible Canadian Inventory shall exclude any Canadian Inventory to which any of the exclusionary criteria set forth below applies. The applicable Collateral Agents shall have the right to establish, modify or eliminate Reserves against Eligible Canadian Inventory from time to time in their Permitted Discretion. In addition, the applicable Collateral Agents and the Canadian Administrative Agent reserve the right, upon two (2) Business Day’s prior written notice to the Administrative Borrower, at any time and from time to time after the Closing Date, to adjust any of the criteria set forth below, to establish new criteria and to adjust the applicable advance rate with respect to Eligible Canadian Inventory, in their Permitted Discretion, subject to the approval of the Supermajority Lenders in the case of adjustments, new criteria, changes in the applicable advance rate or the elimination of Reserves which have the effect of making more credit available. Eligible Canadian Inventory shall not include any Canadian Inventory of Canadian Borrower or any of the Canadian Borrowing Base Guarantors that:
(i) the applicable Collateral Agents, on behalf of Secured Parties, do not have a first priority and exclusive perfected Lien on such Canadian Inventory;
(ii) (1) is stored at a leased or rental location where the aggregate value of Canadian Inventory exceeds $250,000 unless the applicable Collateral Agents have given their prior consent thereto or unless either (x) a Landlord Access Agreement in respect of such location has been delivered to the applicable Collateral Agents, or (y) Reserves reasonably satisfactory to the applicable Collateral Agents have been established with respect thereto or (2) is stored with a bailee or warehouseman where the aggregate value of Canadian Inventory exceeds $250,000 unless either (x) an acknowledged bailee waiver letter which is in form and substance satisfactory to the applicable Collateral Agents and the Canadian Administrative Agent has been received
by the applicable Collateral Agents or (y) Reserves reasonably satisfactory to the applicable Collateral Agents have been established with respect thereto, or (3) is located at an owned location subject to a mortgage in favor of a lender other than the Collateral Agents and the Senior Note Collateral Agent where the aggregate value of such Canadian Inventory exceeds $250,000 unless either (x) a mortgagee waiver which is in form and substance satisfactory to the applicable Collateral Agents and the Canadian Administrative Agent has been delivered to the applicable Collateral Agents or (y) Reserves reasonably satisfactory to the applicable Collateral Agents have been established with respect thereto;
(iii) (1) is placed on consignment by a third party consignor with any Canadian Borrower or any Canadian Borrowing Base Guarantor as consignee or (2) is placed on consignment by any Canadian Borrower or Canadian Borrowing Base Guarantor as consignor with any third party as consignee, unless a valid consignment agreement which is reasonably satisfactory to applicable Collateral Agent is in place with respect to such Canadian Inventory;
(iv) is covered by a negotiable document of title, unless such document has been delivered to one of the applicable Collateral Agents with all necessary endorsements, free and clear of all Liens except those in favor of the Collateral Agents and the Lenders and landlords, carriers, bailees and warehousemen if clause (ii) above has been complied with;
(v) is to be returned to suppliers;
(vi) is obsolete, unsalable, shopworn, seconds, defective, damaged or unfit for sale;
(vii) consists of display items, samples or packing or shipping materials, manufacturing supplies, work-in-process Canadian Inventory, replacement or spare parts;
(viii) is not finished goods held for sale in the ordinary course of Canadian Borrower’s or any of the Canadian Borrowing Base Guarantor’s, as applicable, business;
(ix) breaches any of the representations or warranties pertaining to Canadian Inventory set forth in the Loan Documents;
(x) consists of Hazardous Material or goods that, in either case, can be transported or sold only with licenses that are not readily available;
(xi) is not covered by casualty insurance maintained as required by Section 5.04;
(xii) supplies used or consumed in Canadian Borrower’s business;
(xiii) bill and hold goods;
(xiv) unserviceable or slow moving Canadian Inventory;
(xv) inventory returned by retail customers that is not held for resale;
(xvi) inventory subject to deposit made by retail customers for sale of Inventory that have not been delivered to the extent of such deposits; or
(xvii) is subject to any licensing arrangement the effect of which would be to limit the ability of any Collateral Agent, or any person selling the Canadian Inventory on behalf of such Collateral Agent, to sell such Canadian Inventory in enforcement of such Collateral Agent’s Liens, without further consent or payment to the licensor or other person.
(d) In the event that after the CAM Exchange Date any drawing shall be made in respect of a Letter of Credit, the applicable Administrative Agent shall, at the request of the Issuing Bank in respect of such Letter of Credit, withdraw from the L/C Reserve Account of each Lender any amounts, up to the amount of such Lender’s CAM Percentage of such drawing, deposited in respect of such Letter of Credit and remaining on deposit and deliver such amounts to such Issuing Bank in satisfaction of the reimbursement obligations of the Lenders under Section 2.18 (but not of any Borrower under Section 2.18). In the event any Lender shall default on its obligation to pay over any amount to the Administrative Agents in respect of any Letter of Credit as provided in this Section 2.22, the Issuing Bank in respect thereof shall, in the event of a drawing thereunder, have a claim against such Lender to the same extent as if such Lender had defaulted on its obligations under Section 2.18, but shall have no claim against any other Lender in respect of such defaulted amount, notwithstanding the exchange of interests in the reimbursement obligations pursuant to Section 2.22(a). Each other Lender shall have a claim against such defaulting Lender for any damages sustained by it as a result of such default, including, in the event such Letter of Credit shall expire undrawn, its CAM Percentage of the defaulted amount.
(e) In the event that after the CAM Exchange Date any Letter of Credit shall expire undrawn, the applicable Administrative Agent shall withdraw from the L/C Reserve Account of each Lender the amount remaining on deposit therein in respect of such Letter of Credit and distribute such amount to such Lender.
(f) With the prior written approval of the US Administrative Agent or the Canadian Administrative Agent, as applicable, and the Issuing Bank in respect of such Letter of Credit, any Lender may withdraw the amount held in its L/C Reserve Account in respect of the undrawn amount of any Letter of Credit. Any Lender making such a withdrawal shall be unconditionally obligated, in the event there shall subsequently be a drawing under such Letter of Credit, to pay over to the applicable Administrative Agent for the account of such Issuing Bank on demand, its CAM Percentage of such drawing.
(g) Pending the withdrawal by any Lender of any amounts from its L/C Reserve Account as contemplated by the above paragraphs, the applicable Administrative Agent will, at the direction of such Lender and subject to such rules as the applicable Administrative Agent may prescribe for the avoidance of inconvenience, invest such amounts in Cash Equivalents. Each Lender that has not withdrawn the amounts in its L/C Reserve Account as provided in Section 2.22(f) above shall have the right, at intervals reasonably specified by the applicable Administrative Agent to withdraw the earnings on investments so made by the Administrative Agents with amounts in its L/C Reserve Account and to retain such earnings for its own account.
(h) Notwithstanding any other provision of this Agreement, if, as a direct result of the implementation of the CAM Exchange, any Borrower is required to withhold Taxes from amounts payable to any Agent, any Lender or any Participant hereunder, the amounts so payable to such Agent, such Lender or such Participant shall be increased to the extent necessary to yield to such Agent, such Lender or such Participant (after payment of all Taxes) interest or any such other amounts payable hereunder at the rates or in the amounts specified in this Agreement; provided, however, that such Borrower shall not be required to increase any such amounts payable to such Lender or Participant under this Section 2.22 (but, rather, shall be required to increase any such amounts payable to such Lender or Participant to the extent required by Section 2.15) if such Lender or Participant was prior to or on the CAM Exchange Date already a Lender or Participant with respect to such Borrower. If a Lender that is not incorporated in the United States, in its good faith judgment, is eligible for an exemption from, or reduced rate of, U.S. federal withholding tax on payments by the U.S. Borrower under this Agreement, the U.S. Borrowers shall not be required to increase any such amounts payable to such Lender if such Lender fails to comply with the requirements of Section 2.15(e).
ARTICLE III. REPRESENTATIONS AND WARRANTIES
(b) No Liabilities. Except as set forth in the financial statements referred to in Section 3.04(a) (including the notes thereto), there are no liabilities of any Company of any kind, whether accrued, contingent, absolute, determined, determinable or otherwise, which could reasonably be expected to result in a Material Adverse Effect, and there is no existing condition, situation or set of circumstances which could reasonably be expected to result in such a liability, other than liabilities under the Loan Documents and the Senior Note Documents. Since December 30, 2006, there has been no event, change, circumstance or occurrence that, individually or in the aggregate, has had or could reasonably be expected to result in a Material Adverse Effect.
(c) Forecasts. The forecasts of financial performance of Holdings and its Subsidiaries furnished to the Lenders have been prepared in good faith by the Borrowers and based on assumptions believed by the Borrowers to be reasonable.
(a) Generally. Each Company has good title to, or valid leasehold interests in, all its property material to its business, free and clear of all Liens except for, Permitted Liens and minor irregularities or deficiencies in title that, individually or in the aggregate, do not interfere with its ability to conduct its business as currently conducted or to utilize such property for its intended purpose. The property of the Companies, taken as a whole, (i) is in good operating order, condition and repair (ordinary wear and tear excepted), except to the extent that the failure to be in such condition could not reasonably be expected to result in a Material Adverse Effect and (ii) constitutes all the property which is required for the business and operations of the Companies as presently conducted.
(b) Real Property.
(i) Schedules 8(a) and 8(b) to the Perfection Certificate dated the Closing Date contain a true and complete list of each interest in Real Property (x) owned by any Company as of the date hereof and describes the type of interest therein held by such Company and whether such owned Real Property is leased and if leased whether the underlying Lease contains any option to purchase all or any portion of such Real Property or any interest therein or contains any right of first refusal relating to any sale of such Real Property or any portion thereof or interest therein and (y) leased, subleased or otherwise occupied or utilized by any Company, as lessee, sublessee, franchisee or licensee, as of the date hereof and describes the type of interest therein held by such Company. No such Lease requires the consent of the landlord or tenant thereunder, or other party thereto, to the Transactions, except (x) for such consents which have been obtained or (y) to the extent that failure to obtain such consent could not reasonably be expected to result in a Material Adverse Effect.
(ii) The fair market value (net of existing mortgage debt secured by each such property) of the Real Property owned by US Borrowers or their US Subsidiaries located in Colorado Springs, Colorado and Newport News, Virginia does not exceed $500,000 individually for any such property or $1,000,000 in the aggregate for all such properties.
(c) No Casualty Event. No Company has received any written notice of, nor has any knowledge of, the occurrence or pendency of any Casualty Event affecting all or any material portion of its property. No Mortgage encumbers improved Real Property that is located in an area that has been identified by the Secretary of Housing and Urban Development as an area having special flood hazards within the meaning of the National Flood Insurance Act of 1968 unless flood insurance available under such Act has been obtained in accordance with Section 5.04 or the applicable Collateral Agent has waived such requirement in the Mortgage.
(d) Collateral. Each Company owns or has rights to use all of the Collateral and all rights with respect to any of the foregoing used in, necessary for or material to each Company’s business as currently conducted. The use by each Company of such Collateral and all such rights with respect to the foregoing do not infringe on the rights of any person other than such infringement which could not, individually or in the aggregate, reasonably be expected to result in a Material Adverse Effect. No claim has been made and remains outstanding that any Company’s use of any Collateral does or may violate the rights of any third party that could, individually or in the aggregate, reasonably be expected to result in a Material Adverse Effect.
(a) Ownership/No Claims. Each Loan Party owns, or is licensed to use, all patents, patent applications, trademarks, industrial designs, trade names, servicemarks, copyrights, technology, trade secrets, proprietary information, domain names, know-how and processes necessary for the conduct of its business as currently conducted (the “Intellectual Property”), except for those the failure to own or license which, individually or in the aggregate, could not reasonably be expected to result in a Material Adverse Effect. No claim has been asserted and is pending by any person challenging or questioning the use of any such Intellectual Property or the validity or effectiveness of any such Intellectual Property in any material respect, nor does any Loan Party know of any valid basis for any such claim. The use of such Intellectual Property by each Loan Party does not infringe the rights of any person, except for such claims and infringements that, individually or in the aggregate, could not reasonably be expected to result in a Material Adverse Effect.
(b) Registrations. Except pursuant to licenses and other user agreements entered into by each Loan Party in the ordinary course of business that are listed in Schedule 12(a) or 12(b) to the Perfection Certificate, on and as of the date hereof (i) each Loan Party owns and possesses the right to use, and has done nothing to authorize or enable any other person to use, any copyright, patent, industrial designs or trademark (as such terms are defined in the Security Agreement) listed in Schedule 12(a) or 12(b) to the Perfection Certificate and (ii) all registrations listed in Schedule 12(a) or 12(b) to the Perfection Certificate are valid and in full force and effect.
(c) No Violations or Proceedings. To each Loan Party’s knowledge, on and as of the date hereof, there is no material violation by others of any right of such Loan Party with respect to any copyright, patent, industrial designs or trademark listed in Schedule 12(a) or 12(b) to the Perfection Certificate, pledged by it under the name of such Loan Party.
(a) Equity Interests. Schedules 1(a) and 10(a) to the Perfection Certificate dated the Closing Date set forth a list of (i) all the Subsidiaries of Holdings and their jurisdictions of
organization as of the Closing Date and (ii) the number of each class of its Equity Interests authorized, and the number outstanding, on the Closing Date and the number of shares covered by all outstanding options, warrants, rights of conversion or purchase and similar rights at the Closing Date. All Equity Interests of each Company are duly and validly issued and are fully paid and non-assessable, and, other than the Equity Interests of US Borrowers, are owned by LNT Center, directly or indirectly through Wholly Owned Subsidiaries. All Equity Interests of LNT are owned directly by Holdings. Each Loan Party is the record and beneficial owner of, and has good and marketable title to, the Equity Interests pledged by it under the Security Agreement, free of any and all Liens, rights or claims of other persons, except the security interest created by the Security Agreement, and there are no outstanding warrants, options or other rights to purchase, or shareholder, voting trust or similar agreements outstanding with respect to, or property that is convertible into, or that requires the issuance or sale of, any such Equity Interests.
(b) Organizational Chart. An accurate organizational chart, showing the ownership structure of Holdings, the Borrowers and each Subsidiary on the Closing Date is set forth on Schedule 10(a) to the Perfection Certificate dated the Closing Date.
(a) Except as, individually or in the aggregate, could not reasonably be expected to result in a Material Adverse Effect:
(i) The Companies and their businesses, operations and Real Property are in compliance with, and the Companies have no liability under, any applicable Environmental Law; and under the currently effective business plan of the Companies, no expenditures or operational adjustments will be required in order to comply with applicable Environmental Laws during the next five years;
(ii) The Companies have obtained all Environmental Permits required for the conduct of their businesses and operations, and the ownership, operation and use of their property, under Environmental Law, all such Environmental Permits are valid and in good standing and, under the currently effective business plan of the Companies, no
expenditures or operational adjustments will be required in order to renew or modify such Environmental Permits during the next five years;
(iii) There has been no Release or threatened Release of Hazardous Material on, at, under or from any Real Property or facility presently or formerly owned, leased or operated by the Companies or their predecessors in interest that could reasonably be expected to result in liability by the Companies under any applicable Environmental Law;
(iv) There is no Environmental Claim pending or, to the knowledge of the Companies, threatened against the Companies, or relating to the Real Property currently or formerly owned, leased or operated by the Companies or their predecessors in interest or relating to the operations of the Companies, and there are no actions, activities, circumstances, conditions, events or incidents that could reasonably be expected to form the basis of such an Environmental Claim; and
(v) No person with an indemnity or contribution obligation to the Companies relating to compliance with or liability under Environmental Law is in default with respect to such obligation.
(b) (i) No Company is obligated to perform any action or otherwise incur any expense under Environmental Law pursuant to any order, decree, judgment or agreement by which it is bound or has assumed by contract, agreement or operation of law, and no Company is conducting or financing any Response pursuant to any Environmental Law with respect to any Real Property or any other location;
(ii) No Real Property or facility owned, operated or leased by the Companies and, to the knowledge of the Companies, no Real Property or facility formerly owned, operated or leased by the Companies or any of their predecessors in interest is (i) listed or proposed for listing on the National Priorities List promulgated pursuant to CERCLA or (ii) listed on the Comprehensive Environmental Response, Compensation and Liability Information System promulgated pursuant to CERCLA or (iii) included on any similar list maintained by any Governmental Authority including any such list relating to petroleum;
(iii) No Lien has been recorded or, to the knowledge of any Company, threatened under any Environmental Law with respect to any Real Property or other assets of the Companies;
(iv) The execution, delivery and performance of this Agreement and the consummation of the transactions contemplated hereby will not require any notification, registration, filing, reporting, disclosure, investigation, remediation or cleanup pursuant to any Governmental Real Property Disclosure Requirements or any other applicable Environmental Law; and
(v) The Companies have made available to the Lenders all material records and files in the possession, custody or control of, or otherwise reasonably available to,
the Companies concerning compliance with or liability under Environmental Law, including those concerning the actual or suspected existence of Hazardous Material at Real Property or facilities currently or formerly owned, operated, leased or used by the Companies.
(a) Security Agreements. The execution and delivery of the Security Documents by the Loan Parties on the Original Closing Date, together with the actions taken on or prior to the date hereof (including (i) the filing of financing statements and other filings in appropriate form in the offices specified on Schedule 7 to the initial Perfection Certificate, (ii) the filing of the Security Agreements or a short form thereof in the United States Patent and Trademark Office, the United States Copyright Office or the Canadian Intellectual Property Office, as applicable, and (iii) the delivery to the applicable Collateral Agent of the Security Agreement Collateral with respect to which a security interest may be perfected only by possession or control (all of which Collateral has been so delivered to the extent possession or control by such Collateral Agent is required by the applicable Security Document) was and continues to be effective to create in favor of the Collateral Agents for the benefit of the Secured Parties, a legal, valid and enforceable security interest in and Lien on the Security Agreement Collateral, subject to no Liens other than Permitted Liens, and all filings and other actions necessary or desirable to perfect and maintain the perfection and First Priority status of such Liens have been duly made or taken and remain in full force and effect, other than (i) the periodic filing of UCC continuation statements and PPSA renewal financing change statements in respect of UCC and PPSA financing statements filed by or on behalf of the Collateral Agent and (ii) such Security Agreement Collateral subject to or referenced in the US Security Agreement or Canadian Security Agreements in which a security interest cannot be perfected (x) under the UCC or PPSA as in effect at the relevant time in the relevant jurisdiction or (y) by other filings in appropriate form filed in the offices specified on Schedule 7 to the initial Perfection Certificate.
(b) [Intentionally Omitted.]
(c) [Intentionally Omitted.]
(d) Mortgages. Each Mortgage is effective to create, in favor of the applicable Collateral Agent, for its benefit and the benefit of the Secured Parties, legal, valid and enforceable First Priority Liens on, and security interests in, all of the Loan Parties’ right, title and interest in and to the Mortgaged Properties thereunder and the proceeds thereof, subject only
to Permitted Liens or other Liens reasonably acceptable to the Senior Note Collateral Agent, and when the Mortgages are filed in the offices specified on Schedule 8(a) to the Perfection Certificate dated the Closing Date (or, in the case of any Mortgage executed and delivered after the date thereof in accordance with the provisions of Section 5.11 and Section 5.12, unless a Loan Party has disclosed in writing any issues related to perfection thereof or the security interest therein to the applicable Collateral Agent when such Mortgage is filed in the offices specified in the local counsel opinion delivered with respect thereto in accordance with the provisions of Section 5.11 and Section 5.12), the Mortgages shall constitute fully perfected First Priority Liens on, and security interests in, all right, title and interest of the Loan Parties in the Mortgaged Properties and the proceeds thereof, in each case prior and superior in right to any other person, other than Liens permitted by such Mortgage.
(e) Valid Liens. Each Security Document, unless a Loan Party has disclosed in writing any issues related to the legality, enforceability, validity or security interest therein, delivered pursuant to Section 5.11 and Section 5.12 will, upon execution and delivery thereof, be effective to create in favor of the applicable Collateral Agent, for the benefit of the applicable Secured Parties, legal, valid and enforceable Liens on, and security interests in, all of the Loan Parties’ right, title and interest in and to the Collateral thereunder, and when all appropriate filings or recordings are made in the appropriate offices as may be required under applicable law, such Security Document will constitute fully perfected First Priority Liens on, and security interests in, all right, title and interest of the Loan Parties in such Collateral, in each case subject to no Liens other than the applicable Permitted Liens.
(i) a person that is listed in the annex to, or is otherwise subject to the provisions of, the Executive Order;
(ii) a person owned or controlled by, or acting for or on behalf of, any person that is listed in the annex to, or is otherwise subject to the provisions of, the Executive Order;
(iii) a person with which any Lender is prohibited from dealing or otherwise engaging in any transaction by any Anti-Terrorism Law;
(iv) a person that commits, threatens or conspires to commit or supports “terrorism” as defined in the Executive Order; or
(v) a person that is named as a “specially designated national and blocked person” on the most current list published by the U.S. Treasury Department Office of Foreign Assets Control (“OFAC”) at its official website or any replacement website or other replacement official publication of such list.
ARTICLE IV. CONDITIONS TO CREDIT EXTENSIONS
(e) Financial Statements; Projections. The Lenders shall have received the financial statements described in Section 3.04 and with the forecasts of the Borrowing Base and the financial performance of Holdings, the Borrowers, and their respective Subsidiaries.
(f) Indebtedness and Minority Interests. After giving effect to the Transactions and the other transactions contemplated hereby, no Company shall have outstanding any Indebtedness or preferred stock other than (i) the Loans and Credit Extensions hereunder, (ii) the Senior Notes, (iii) the Indebtedness listed on Schedule 6.01(b) and (iv) Indebtedness owed to any Borrower or any Guarantor.
(g) Opinions of Counsel. The Administrative Agents shall have received, on behalf of themselves, the other Agents, the Arranger, the Lenders and the Issuing Bank, a favorable written opinion of (i) Morgan, Lewis & Bockius LLP, special counsel for the Loan Parties, and (ii) each local and foreign counsel listed on Schedule 4.01(g), in each case (A) dated the Closing Date, (B) addressed to the Agents, the Issuing Bank and the Lenders and (C) covering the matters set forth in Exhibit N and such other matters relating to the Loan Documents as the Administrative Agents shall reasonably request.
(h) [Intentionally Omitted].
(i) Requirements of Law. The Lenders shall be satisfied that Holdings, its Subsidiaries and the Transactions shall be in full compliance with all material Requirements of Law, including Regulations T, U and X of the Board, and shall have received satisfactory evidence of such compliance reasonably requested by them.
(j) Consents. The Lenders shall be satisfied that all requisite Governmental Authorities and third parties shall have approved or consented to the transactions contemplated hereby, except for such consents or approvals the absence of which could not reasonably be expected to have a Material Adverse Effect, and there shall be no governmental or judicial action, actual or threatened, that has or would have, singly or in the aggregate, a reasonable likelihood of restraining, preventing or imposing burdensome conditions on the transactions contemplated hereby.
(k) Litigation. There shall be no litigation, public or private, or administrative proceedings, governmental investigation or other legal or regulatory developments, actual or threatened, that, singly or in the aggregate, could reasonably be expected to result in a Material Adverse Effect, or could materially and adversely affect the ability of Holdings, the Borrowers and their respective Subsidiaries to fully and timely perform their respective obligations under the Transaction Documents, or the ability of the parties to consummate the financings or transactions contemplated hereby.
(l) Sources and Uses. The sources and uses of the Loans shall be as set forth in Section 3.12.
(m) Fees. The Arranger, Administrative Agents and Collateral Agents shall have received (i) all of the accrued and unpaid Fees, interest and other amounts which are due and payable under the Original Credit Agreement or any other Prior Loan Document, (ii) all Fees, interest and other amounts due and payable on or prior to the Closing Date, including, to the extent invoiced, reimbursement or payment of all reasonable out-of-pocket expenses (including the reasonable legal fees and expenses of Latham & Watkins, LLP, special counsel to the applicable Administrative Agents and the applicable Collateral Agents, and the reasonable fees and expenses of any local counsel, foreign counsel, appraisers, consultants and other advisors) required to be reimbursed or paid by the Borrowers hereunder or under any other Loan Document and including all fees and expenses due under that certain letter agreement dated as of May 1, 2007 among Borrowers, UBS and UBSS relating to the increase in the revolving commitments and other amendments to the Original Credit Agreement and (iii) all of the unpaid interest accrued under the Original Credit Agreement up to, but excluding, the Closing Date.
(n) Security Documents. The Agents shall have received (i) a Reaffirmation Agreement, (ii) a Canadian Reaffirmation Agreement, (iii) all necessary amendments, modifications and/or confirmations to the Security Documents in effect on and after the Original Closing Date and (iv) evidence that all other actions that Agents may deem necessary or desirable in order to perfect and protect, and continue the perfection and protection of, the First Priority Liens and security interests created under the Security Documents have been taken.
(o) Real Property Requirements. The applicable Collateral Agents shall have received:
(i) a Mortgage encumbering each Mortgaged Property owned by a US Borrower or US Subsidiary that, together with any improvements thereon, individually has a fair market value (net of existing mortgage debt secured by each such property) of greater than $500,000, in each case, in favor of the applicable Collateral Agents, for the benefit of the Secured Parties, duly executed and acknowledged by each Loan Party that is the owner of or holder of any interest in such Mortgaged Property, and otherwise in form for recording in the recording office of each applicable political subdivision where each such Mortgaged Property is situated, together with such certificates, affidavits, questionnaires or returns as shall be required in connection with the recording or filing thereof to create a lien under applicable Requirements of Law, and such financing statements and any other instruments necessary to grant a mortgage lien under the laws of any applicable jurisdiction, all of which shall be in form and substance reasonably satisfactory to such Collateral Agent;
(ii) with respect to each such Mortgaged Property, such consents, approvals, amendments, supplements, estoppels, tenant subordination agreements or other instruments as shall reasonably be deemed necessary by such Collateral Agent in order for the owner or holder of the fee or leasehold interest constituting such Mortgaged Property to grant the Lien contemplated by the Mortgage with respect to such Mortgaged Property;
(iii) with respect to each Mortgage required under clause (i) above, a policy of title insurance (or marked up title insurance commitment having the effect of a policy
of title insurance) insuring the Lien of such Mortgage as a valid First Priority mortgage Lien on the Mortgaged Property and fixtures described therein in the amount equal to not less than 115% of the fair market value of such Mortgaged Property and fixtures, which policy (or such marked-up commitment) (each, a “Title Policy”) shall (A) be issued by the Title Company, (B) contain a “tie-in” or “cluster” endorsement, if available under applicable law (i.e., policies which insure against losses regardless of location or allocated value of the insured property up to a stated maximum coverage amount), (C) have been supplemented by such endorsements (or where such endorsements are not available, opinions of special counsel, architects or other professionals reasonably acceptable to such Collateral Agent) as shall be reasonably requested by such Collateral Agent (including endorsements on matters relating to usury, first loss, last dollar, zoning, contiguity, revolving credit, doing business, non-imputation, public road access, survey, variable rate, environmental lien, subdivision, mortgage recording tax, separate tax lot, and so-called comprehensive coverage over covenants and restrictions), and (D) contain no exceptions to title other than Permitted Liens and other exceptions acceptable to such Collateral Agent;
(iv) with respect to each such Mortgaged Property, such affidavits, certificates, information (including financial data) and instruments of indemnification (including a so-called “gap” indemnification) as shall be reasonably required to induce the Title Company to issue the Title Policy/ies and endorsements contemplated above;
(v) evidence reasonably acceptable to such Collateral Agent of payment by or on behalf of the Borrowers of all Title Policy premiums, search and examination charges, escrow charges and related charges, mortgage recording taxes, fees, charges, costs and expenses required for the recording of the Mortgages and issuance of the Title Policies referred to above;
(vi) with respect to each such Mortgaged Property, copies of all Leases in which any Borrower or any Subsidiary holds the lessor’s interest. To the extent any of the foregoing affect any Mortgaged Property, such agreement shall be subordinate to the Lien of the Mortgage to be recorded against such Mortgaged Property, either expressly by its terms or pursuant to a subordination, non-disturbance and attornment agreement, and shall otherwise be acceptable to such Collateral Agent;
(vii) with respect to each such Mortgaged Property, each Company shall have made all notifications, registrations and filings, to the extent required by, and in accordance with, all Governmental Real Property Disclosure Requirements applicable to such Mortgaged Property;
(viii) Surveys reasonably acceptable to Collateral Agents with respect to each such Mortgaged Property; and
(ix) a completed Federal Emergency Management Agency Standard Flood Hazard Determination with respect to each such Mortgaged Property.
(p) Insurance. The Administrative Agents shall have confirmed receipt by Collateral Agents of copies of, or certificates as to coverage under, the insurance policies and endorsements required by Section 5.04 and the applicable provisions of the Security Documents, each of which shall be in form and substance satisfactory to the Administrative Agents and Collateral Agents.
(q) USA Patriot Act. The Lenders shall have received, sufficiently in advance of the Closing Date, all documentation and other information required by bank regulatory authorities under applicable “know your customer” and anti-money laundering rules and regulations, including without limitation, the United States PATRIOT Act (Title III of Pub. L. 107-56 (signed into law October 26, 2001)) including, without limitation, the information described in Section 11.13.
(r) Initial Borrowing Base Certificate. The Collateral Agents and the Administrative Agents shall have received a Borrowing Base Certificate dated as of the last day of the fiscal month of April.
(s) Excess Availability. As of the Closing Date, Excess Availability shall not be less than $100,000,000 or such lesser amount as UBS, after consultation with the Lenders, may approve.
(a) Notice. The applicable Administrative Agent shall have received a Borrowing Request as required by Section 2.03 (or such notice shall have been deemed given in accordance with Section 2.03) if Loans are being requested or, in the case of the issuance, amendment, extension or renewal of a Letter of Credit, the Issuing Bank and the applicable Administrative Agent shall have received an LC Request as required by Section 2.18(b) or, in the case of the Borrowing of a Swingline Loan, the applicable Swingline Lender and the applicable Administrative Agent shall have received a Borrowing Request as required by Section 2.17(b).
(b) No Default. The Borrowers and each other Loan Party shall be in compliance in all material respects with all the terms and provisions set forth herein and in each other Loan Document on its part to be observed or performed, and, at the time of and immediately after giving effect to such Credit Extension and the application of the proceeds thereof, no Default shall have occurred and be continuing on such date.
(c) Representations and Warranties. Each of the representations and warranties made by any Loan Party set forth in Article III hereof or in any other Loan Document shall be true and correct in all material respects (except that any representation and warranty that is qualified as to “materiality” or “Material Adverse Effect” shall be true and correct in all respects) on and as of the date of such Credit Extension with the same effect as though made on and as of such date, except to the extent such representations and warranties expressly relate to an earlier date.
(d) Compliance with Borrowing Base. After giving pro forma effect to the proposed Credit Extension, the outstanding Revolving Exposure shall not exceed the Borrowing Base plus (without duplication) the Canadian Borrowing Base, in each case then in effect.
(e) No Legal Bar. No order, judgment or decree of any Governmental Authority shall purport to restrain any Lender from making any Loans to be made by it. No injunction or other restraining order shall have been issued, shall be pending or noticed with respect to any action, suit or proceeding seeking to enjoin or otherwise prevent the consummation of, or to recover any damages or obtain relief as a result of, the transactions contemplated by this Agreement or the making of Loans hereunder.
ARTICLE V. AFFIRMATIVE COVENANTS
(b) Quarterly Reports. As soon as available and in any event within 45 days after the end of each of the first three fiscal quarters of each fiscal year, beginning with the first fiscal quarter of the 2006 fiscal year, (i)(A) the consolidated balance sheet of Holdings as of the end of each of the first three fiscal quarters of the 2006 fiscal year and related consolidated statements of income and cash flows for each such fiscal quarter and for the then elapsed portion of the fiscal year and (B) the consolidated balance sheet of Holdings as of the end of each of the first three fiscal quarters of the 2007 fiscal year and of each fiscal year thereafter and related consolidated statements of income and cash flows for such fiscal quarter and for the then elapsed portion of the fiscal year, in comparative form with the consolidated statements of income and cash flows for the comparable periods in the previous fiscal year, and notes, in each case, thereto (including a note with a consolidating balance sheet and statements of income and cash flows separating out Holdings, the Borrowers and the Subsidiaries), all prepared in accordance with Regulation S-X under the Securities Act and accompanied by a certificate of a Financial Officer stating that such financial statements fairly present, in all material respects, the consolidated financial condition, results of operations and cash flows of Holdings as of the date and for the periods specified in accordance with GAAP consistently applied, and on a basis consistent with audited financial statements referred to in clause (a) of this Section, subject to normal year-end audit adjustments, (ii) a management report in a form reasonably satisfactory to the Administrative Agents setting forth (A) statement of income items and Consolidated Cash Flow of Holdings for such fiscal quarter and for the then elapsed portion of the fiscal year, showing variance, by dollar amount and percentage, from amounts for the comparable periods in the previous fiscal year and budgeted amounts and (B) key operational information and statistics for such fiscal quarter and for the then elapsed portion of the fiscal year consistent with internal and industry-wide reporting standards, including same-store sales and (iii) management’s discussion and analysis, in a form reasonably satisfactory to the Administrative Agents, of the financial condition and results of operations for such fiscal quarter and the then elapsed portion of the fiscal year, as compared to the comparable periods in the previous fiscal year and budgeted amounts (it being understood that the information required by clause (i) may be furnished in the form of a Form 10-Q);
(c) Monthly Reports. Within 30 days after the end of each of the first two months of each fiscal quarter (i) the unaudited consolidated balance sheet of Holdings and its Subsidiaries as of the end of such two months and the related consolidated statements of income and cash flows of Holdings and its Subsidiaries for such month and for the then elapsed portion of the fiscal year, in comparative form with the consolidated statements of income and cash flows for the comparable periods in the previous fiscal year (except that comparative statements of income and cash flows for the fiscal year ending December 31, 2005 shall not be required), and (ii) same store sales information and statistics for such month and for the then elapsed portion of the fiscal year consistent with internal and industry-wide reporting standards, each in form and substance reasonably satisfactory to the Administrative Agent;
(d) Financial Officer’s Certificate. (i) Concurrently with any delivery of financial statements under Section 5.01(a) or (b), a Compliance Certificate (A) certifying that no Default has occurred or, if such a Default has occurred, specifying the nature and extent thereof and any corrective action taken or proposed to be taken with respect thereto, (B) beginning with the first fiscal quarter of the 2006 fiscal year, setting forth computations in reasonable detail satisfactory to the Administrative Agents demonstrating compliance with the covenants contained in Section 6.10 (including the aggregate amount of Excluded Issuances for such period and the uses therefor) and (C) showing a reconciliation of Consolidated Cash Flow to the net income set forth on the statement of income; and (ii) concurrently with any delivery of financial statements under Section 5.01(a) above, beginning with the fiscal year ending December 31, 2006, a report of the accounting firm opining on or certifying such financial statements stating that in the course of its regular audit of the financial statements of Holdings and its Subsidiaries, which audit was conducted in accordance with generally accepted auditing standards, such accounting firm obtained no knowledge that any Default insofar as it relates to financial or accounting matters has occurred or, if in the opinion of such accounting firm such a Default has occurred, specifying the nature and extent thereof;
(e) Financial Officer’s Certificate Regarding Collateral. Concurrently with any delivery of financial statements under Section 5.01(a), a certificate of a Financial Officer setting forth the information required pursuant to the Perfection Certificate Supplement or confirming that there has been no change in such information since the date of the Perfection Certificate or latest Perfection Certificate Supplement;
(f) Public Reports. Promptly after the same become publicly available, copies of all periodic and other reports, proxy statements and other materials filed by any Company with the Securities and Exchange Commission, the Ontario Securities Commission or any Governmental Authority succeeding to any or all of the functions of any said Commission, or with any national or other securities exchange or securities commission, or distributed to holders of its Indebtedness pursuant to the terms of the documentation governing such Indebtedness (or any trustee, agent or other representative therefor), as the case may be;
(g) Management Letters. Promptly after the receipt thereof by any Company, a copy of any “management letter” received by any such person from its certified public accountants and the management’s responses thereto;
(h) Budgets. Within 30 days after the beginning of each fiscal year, a budget for Holdings in form reasonably satisfactory to the Administrative Agents, but to include balance sheets, statements of income and sources and uses of cash, for (i) each month of such fiscal year prepared in detail, including line items for budgeted Borrowing Base levels and utilization of Revolving Loans and (ii) each fiscal year thereafter, through and including the fiscal year in which the Final Maturity Date occurs, prepared in summary form, in each case, of Holdings, Borrowers and their respective Subsidiaries, with appropriate presentation and discussion of the principal assumptions upon which such budgets are based, accompanied by the statement of a Financial Officer of Borrower to the effect that the budget of Holdings is a reasonable estimate for the periods covered thereby and, promptly when available, any material revisions of such budget;
(i) Organization. Concurrently with any delivery of financial statements under Section 5.01(a), an accurate organizational chart as required by Section 3.07(c), or confirmation that there are no changes to Schedule 10(a) to the Perfection Certificate;
(j) Organizational Documents. Promptly provide copies of any Organizational Documents that have been amended or modified in accordance with the terms hereof and deliver a copy of any notice of default given or received by any Company under any Organizational Document within 15 days after such Company gives or receives such notice; and
(k) Other Information. Promptly, from time to time, such other information regarding the operations, business affairs and financial condition of any Company, or compliance with the terms of any Loan Document or matters regarding the Collateral (beyond the requirements contained in Section 9.04) as the Administrative Agents or any Lender may reasonably request.
(a) any Default, specifying the nature and extent thereof and the corrective action (if any) taken or proposed to be taken with respect thereto;
(b) the filing or commencement of, or any threat or notice of intention of any person to file or commence, any action, suit, litigation or proceeding, whether at law or in equity by or before any Governmental Authority, (i) against any Company or any Affiliate thereof that could reasonably be expected to result in a Material Adverse Effect or (ii) with respect to any Loan Document;
(c) any development that has resulted in, or could reasonably be expected to result in a Material Adverse Effect;
(d) the occurrence of a Casualty Event; and
(e) (i) the incurrence of any material Lien (other than Permitted Liens) on, or claim asserted against any of the Collateral or (ii) the occurrence of any other event which could materially affect the value of the Collateral.
(a) Do or cause to be done all things necessary to preserve, renew and maintain in full force and effect its legal existence, except as otherwise expressly permitted under Section 6.05 or Section 6.06 or, in the case of any Subsidiary, where the failure to perform such obligations, individually or in the aggregate, could not reasonably be expected to result in a Material Adverse Effect.
(b) Do or cause to be done all things necessary to obtain, preserve, renew, extend and keep in full force and effect the rights, licenses, permits, privileges, franchises, authorizations, patents, copyrights, trademarks and trade names material to the conduct of its business except where such failure could reasonably be expected to result in a Material Adverse Effect; maintain and operate such business in substantially the manner in which it is presently conducted and operated; comply with all applicable Requirements of Law (including any and all zoning, building, Environmental Law, ordinance, code or approval or any building permits or any restrictions of record or agreements affecting the Real Property) and decrees and orders of any Governmental Authority, whether now in effect or hereafter enacted, except where the failure to comply, individually or in the aggregate, could not reasonably be expected to result in a Material Adverse Effect; pay and perform its obligations under all Leases and Transaction Documents; and at all times maintain, preserve and protect all property material to the conduct of such business and keep such property in good repair, working order and condition (other than wear and tear occurring in the ordinary course of business) and from time to time make, or cause to be made, all needful and proper repairs, renewals, additions, improvements and replacements thereto necessary in order that the business carried on in connection therewith may be properly conducted at all times; provided that nothing in this Section 5.03(b) shall prevent (i) sales of property, consolidations or mergers or amalgamations by or involving any Company in accordance with Section 6.05 or Section 6.06; (ii) the withdrawal by any Company of its qualification as a foreign corporation in any jurisdiction where such withdrawal, individually or in the aggregate, could not reasonably be expected to result in a Material Adverse Effect; or (iii) the abandonment by any Company of any rights, franchises, licenses, trademarks, trade names, copyrights or patents that such person reasonably determines are not useful to its business or no longer commercially desirable.
(a) Generally. Keep its insurable property adequately insured at all times by financially sound and reputable insurers; maintain such other insurance, to such extent and against such risks as is customary with companies in the same or similar businesses operating in the same or similar locations, including insurance with respect to Mortgaged Properties and other properties material to the business of the Companies against such casualties and contingencies and of such types and in such amounts with such deductibles as is customary in the case of similar businesses operating in the same or similar locations, including (i) physical hazard insurance on an “all risk” basis, (ii) commercial general liability against claims for bodily injury, death or property damage covering any and all insurable claims, (iii) explosion insurance in respect of any boilers, machinery or similar apparatus constituting Collateral, (iv) business interruption insurance, (v) worker’s compensation insurance and such other insurance as may be required by any Requirement of Law and (vi) such other insurance against risks as the
Administrative Agents and the Collateral Agents may from time to time reasonably require (such policies to be in such form and amounts and having such coverage as may be reasonably satisfactory to the applicable Administrative Agent and applicable Collateral Agent); provided that with respect to physical hazard insurance, neither Collateral Agent nor the applicable Company shall agree to the adjustment of any claim for more than $5.0 million thereunder without the consent of the other (such consent not to be unreasonably withheld or delayed); provided, further, that no consent of any Company shall be required during an Event of Default.
(b) Requirements of Insurance. All such insurance shall (i) provide that no cancellation, material reduction in amount or material reduction in coverage thereof shall be effective until at least 30 days after receipt by the applicable Collateral Agent of written notice thereof, (ii) with respect to the Collateral, name the applicable Collateral Agents as mortgagee (in the case of property insurance) or additional insured on behalf of the applicable Secured Parties (in the case of liability insurance) or loss payee (in the case of property insurance), as applicable, (iii) if reasonably requested by such Collateral Agents, include a breach of warranty clause and (iv) be reasonably satisfactory in all other respects to such Collateral Agents.
(c) Notice to Agents. Notify the Administrative Agents and the Collateral Agents immediately whenever any separate insurance concurrent in form or contributing in the event of loss with that required to be maintained under this Section 5.04 is taken out by any Company; and promptly deliver to the Administrative Agents and the Collateral Agents a duplicate original copy of such policy or policies.
(d) Flood Insurance. With respect to each Mortgaged Property, obtain flood insurance in such total amount as the Administrative Agents or the Required Lenders may from time to time reasonably require, if at any time the area in which any improvements located on any Mortgaged Property is designated a “flood hazard area” in any Flood Insurance Rate Map published by the Federal Emergency Management Agency (or any successor agency), and otherwise comply with the National Flood Insurance Program as set forth in the Flood Disaster Protection Act of 1973, as amended from time to time.
(e) Broker’s Report. Deliver to the Administrative Agents and the Collateral Agents and the Lenders a report of a reputable insurance broker with respect to such insurance and such supplemental reports with respect thereto as the Administrative Agents or the Collateral Agents may from time to time reasonably request.
(f) Mortgaged Properties. Each Loan Party shall otherwise comply in all material respects with all Insurance Requirements in respect of the Premises; provided, however, that each Loan Party may, at its own expense and after written notice to the Administrative Agents and the Collateral Agents, (i) contest the applicability or enforceability of any such Insurance Requirements by appropriate legal proceedings, or (ii) cause the Insurance Policy containing any such Insurance Requirement to be replaced by a new policy complying with the provisions of this Section 5.04.
(a) Payment of Obligations. Pay its Indebtedness and other obligations promptly and in accordance with their terms and pay and discharge promptly when due all Taxes, assessments
and governmental charges or levies imposed upon it or upon its income or profits or in respect of its property, before the same shall become delinquent or in default, as well as all lawful claims for labor, services, materials and supplies or otherwise that, if unpaid, might give rise to a Lien other than a Permitted Lien upon such properties or any part thereof; provided that such payment and discharge shall not be required with respect to any such Tax, assessment, charge, levy or claim so long as (x)(i) the validity or amount thereof shall be contested in good faith by appropriate proceedings timely instituted and diligently conducted and the applicable Company shall have set aside on its books adequate reserves or other appropriate provisions with respect thereto in accordance with GAAP, (ii) such contest operates to suspend collection of the contested obligation, Tax, assessment or charge and enforcement of a Lien other than a Permitted Lien and (iii) in the case of Collateral, the applicable Company shall have otherwise complied with the Contested Collateral Lien Conditions and (y) the failure to pay could not reasonably be expected to result in a Material Adverse Effect.
(b) Filing of Returns. Timely and correctly file all material Tax Returns required to be filed by it. Withhold, collect and remit all Taxes that it is required to collect, withhold or remit.
(c) Tax Shelter Reporting. Each Borrower does not intend to treat the Loans as being a “reportable transaction” within the meaning of Treasury Regulation Section 1.6011-4. In the event any Borrower determines to take any action inconsistent with such intention, such Borrower will promptly notify the Administrative Agents thereof.
SECTION 5.07. Maintaining Records; Access to Properties and Inspections; Annual Meetings.
(a) Keep proper books of record and account in which full, true and correct entries in conformity with GAAP and all Requirements of Law are made of all dealings and transactions in relation to its business and activities, including, without limitation, proper records of intercompany transaction and the Borrowing Base Guarantor Intercompany Loan Amounts with full, true and correct entries reflecting all payments received and paid (including, without limitation, funds received by or for the account of Borrower from deposit accounts of the other Companies). Each Company will permit any representatives designated by the Administrative Agents or any Lender to visit and inspect the financial records and the property of such Company at reasonable times during regular business hours and as often as reasonably requested and to make extracts from and copies of such financial records, and permit any representatives designated by the Administrative Agents or any Lender to discuss the affairs, finances, accounts and condition of any Company with the officers and employees thereof and advisors therefor (including independent accountants).
(b) Within 150 days after the end of each fiscal year of the Companies, at the request of the Administrative Agents or Required Lenders, hold a meeting (at a mutually agreeable location, venue and time or, at the option of the Administrative Agents, by conference call, the costs of such venue or call to be paid by the Borrowers) with all Lenders who choose to attend such meeting, at which meeting shall be reviewed the financial results of the previous fiscal year and the financial condition of the Companies and the budgets presented for the current fiscal year of the Companies.
(a) Comply, and cause all lessees and other persons occupying Real Property of any Company to comply, in all material respects with all Environmental Laws and Environmental Permits applicable to its operations and Real Property; obtain and renew all material Environmental Permits applicable to its operations and Real Property; and conduct all Responses required by, and in accordance with, Environmental Laws; provided that no Company shall be required to undertake any Response to the extent that its obligation to do so is being contested in good faith and by proper proceedings and appropriate reserves are being maintained with respect to such circumstances in accordance with GAAP.
(b) If a Default caused by reason of a breach of Section 3.18 or Section 5.09(a) shall have occurred and be continuing for more than 20 days without the Companies commencing activities reasonably likely to cure such Default in accordance with Environmental Laws, at the written request of the Administrative Agents or the Required Lenders through the Administrative Agents, provide to the Lenders within 45 days after such request, at the expense of the Borrowers, an environmental assessment report regarding the matters which are the subject of such Default, including, where appropriate in the reasonable judgment of the Administrative Agents, soil and/or groundwater sampling, prepared by an environmental consulting firm and, in the form and substance, reasonably acceptable to the Administrative Agents and indicating the
presence or absence of Hazardous Materials and the estimated cost of any compliance or Response to address them.
(a) Subject to the terms of the Intercreditor Agreement and this Section 5.11, with respect to any property acquired after the Original Closing Date by any Loan Party that is intended to be subject to the Lien created by any of the Security Documents (as specified in this Section 5.11), promptly (and in any event within 60 days after the acquisition thereof) (i) execute and deliver to the applicable Administrative Agent and the applicable Collateral Agents such amendments or supplements to the relevant Security Documents or such other documents as such Administrative Agent or such Collateral Agents shall deem reasonably necessary or advisable to grant to such Collateral Agents, for their benefit and for the benefit of the Secured Parties, a Lien on such property subject to no Liens other than Permitted Liens, and (ii) take all actions necessary to cause such Lien to be duly perfected to the extent required by such Security Document in accordance with all applicable Requirements of Law, including the filing of financing statements in such jurisdictions as may be reasonably requested by such Administrative Agent. The Borrowers shall otherwise take such actions and execute and/or deliver to the applicable Collateral Agents such documents as the applicable Administrative Agent or such Collateral Agents shall require to confirm the validity, perfection and priority of the Lien of the Security Documents against such after-acquired properties.
(b) Subject to the terms of the Intercreditor Agreement, with respect to any person that is or becomes a Subsidiary after the Original Closing Date, promptly (and in any event within 30 days after such person becomes a Subsidiary) (i) pledge and deliver to the applicable Collateral Agent the certificates, if any, representing all of the Equity Interests of such Subsidiary, provided that with respect to any Foreign Subsidiary no more than 65% of the Equity Interests of any first-tier Foreign Subsidiary of US Borrowers or any US Subsidiary (and no stock of any other Foreign Subsidiary) shall be so pledged and delivered as security for the US Obligations, together with undated stock powers or other appropriate instruments of transfer executed and delivered in blank by a duly authorized officer of the holder(s) of such Equity Interests, (ii)(A) deliver to the US Collateral Agent as security for the US Obligations all intercompany notes owing from such Subsidiary to any Loan Party that is a US Borrower or US Subsidiary and (B) deliver to the Canadian Collateral Agent as security for the Canadian Obligations all intercompany notes owing from such Subsidiary to any Loan Party that is a Canadian Borrower or Foreign Subsidiary, in each case, together with instruments of transfer executed and delivered in blank by a duly authorized officer of such Loan Party and (iii) (A) if such new Subsidiary is a US Subsidiary, cause such new US Subsidiary to execute and deliver a Joinder Agreement or such comparable documentation to become a Subsidiary Guarantor and a joinder agreement to the applicable Security Agreement, substantially in the form annexed thereto, (B) if such new Subsidiary is a Foreign Subsidiary, cause such new Foreign Subsidiary to execute and deliver a pledge agreement, security agreement and guarantee substantially in the form of the applicable Canadian Pledge Agreement, Canadian Security Agreement and Canadian Guaranty and (C) cause to take all actions necessary or advisable in the opinion of the applicable Administrative Agent or the applicable Collateral Agent to cause the Lien created by the
applicable Security Agreement to be duly perfected to the extent required by such agreement in accordance with all applicable Requirements of Law, including the filing of financing statements in such jurisdictions as may be reasonably requested by the applicable Administrative Agent or the applicable Collateral Agent.
(c) Subject to the terms of the Intercreditor Agreement, promptly grant to the applicable Collateral Agents, within 60 days of the acquisition thereof, a security interest in and Mortgage on each Real Property owned in fee by such Loan Party that is a US Borrower or US Subsidiary, as is acquired by such Loan Party after the Closing Date and that, together with any improvements thereon, individually has a fair market value of at least $5,000,000, in each case, as additional security for the Secured Obligations (unless the subject property is already mortgaged to a third party to the extent permitted by Section 6.02). Subject to the terms of the Intercreditor Agreement, such Mortgages shall be granted pursuant to documentation reasonably satisfactory in form and substance to the applicable Administrative Agents and the applicable Collateral Agents and shall constitute valid and enforceable perfected First Priority Liens subject only to Permitted Liens or other Liens reasonably acceptable to the such Collateral Agent. Subject to the terms of the Intercreditor Agreement, the Mortgages or instruments related thereto shall be duly recorded or filed in such manner and in such places as are required by law to establish, perfect, preserve and protect the First Priority Liens in favor of the applicable Collateral Agents required to be granted pursuant to the Mortgages and all taxes, fees and other charges payable in connection therewith shall be paid in full. Such Loan Party shall otherwise take such actions and execute and/or deliver to the applicable Collateral Agents such documents as the applicable Administrative Agent or such Collateral Agent shall reasonably require to confirm the validity, perfection and priority of the Lien of any existing Mortgage or new Mortgage against such after-acquired Real Property (including a Title Policy, a Survey and local counsel opinion (in form and substance reasonably satisfactory to such Administrative Agent and such Collateral Agent) in respect of such Mortgage).
(d) The Borrowers may designate any Subsidiary acquired or formed after the Original Closing Date as a Non-Guarantor Subsidiary by written notice to the applicable Administrative Agent; provided, however, that if at any time any Non-Guarantor Subsidiary or group of Non-Guarantor Subsidiaries in the aggregate (other than any Foreign Subsidiary not otherwise subject to Section 5.11(b)) has assets with either a book value or fair market value in excess of $1.0 million, then the Borrowers shall, and shall cause one or more of such Subsidiaries to, comply with Section 5.11(b) within the time frames set forth therein so that no Non-Guarantor Subsidiary or group of Non-Guarantor Subsidiaries in the aggregate holds property having either a book value or fair market value in excess of $1.0 million.
(a) Not effect any change (i) in any Loan Party’s legal name or in any trade name used to identify it in the conduct of its business or in the ownership of its properties, (ii) in the location of any Loan Party’s chief executive office, its principal place of business, any office in which it maintains books or records relating to Collateral owned by it, domicile (within the meaning of the Quebec Civil Code) or any office or facility (other than any Store) at which Collateral owned by it with a value of more than $250,000 is located (including the establishment of any such new office or facility), (iii) in any Loan Party’s identity or organizational structure, (iv) in any Loan Party’s Federal Taxpayer Identification Number or organizational identification number, if any, or (v) in any Loan Party’s jurisdiction of organization (in each case, including by merging or amalgamating with or into any other entity, reorganizing, dissolving, liquidating, reorganizing or organizing in any other jurisdiction), until (A) it shall have given the applicable Collateral Agents and the applicable Administrative Agent not less than 30 days’ prior written notice (in the form of an Officers’ Certificate), or such lesser notice period agreed to by such Collateral Agents, of its intention so to do, clearly describing such change and providing such other information in connection therewith as such Collateral Agents or such Administrative Agent may reasonably request and (B) it shall have taken all action reasonably satisfactory to such Collateral Agents to maintain the perfection and priority of the security interest of such Collateral Agents for the benefit of the Secured Parties in the Collateral, if applicable. Each Loan Party agrees to promptly provide the applicable Collateral Agents with certified Organizational Documents reflecting any of the changes described in the preceding sentence. Each Loan Party also agrees to promptly notify the applicable Collateral Agents of any change in the location of any office in which it maintains books or records relating to Collateral owned by it or any office or facility at which Collateral is located (including the establishment of any such new office or facility), other than changes in location to a Mortgaged Property or a leased property subject to a Landlord Access Agreement.
(b) Concurrently with the delivery of financial statements pursuant to Section 5.01(a), deliver to the applicable Administrative Agents and applicable Collateral Agents a Perfection Certificate Supplement and a certificate of a Financial Officer and the chief legal officer(s) of the Borrowers certifying that all UCC financing statements (including fixture filings, as applicable), PPSA financing statements or financing change statements or other appropriate filings, recordings or registrations, including all refilings, rerecordings and reregistrations, containing a description of the Collateral have been filed of record in each governmental, municipal or other appropriate office in each jurisdiction necessary to protect and perfect the security interests and Liens under the Security Documents for a period of not less than 18 months after the date of such certificate (except as noted therein with respect to any continuation statements to be filed within such period).
ARTICLE VI. NEGATIVE COVENANTS
(b) (i) Indebtedness outstanding on the Original Closing Date and listed on Schedule 6.01(b) to the Original Credit Agreement, (ii) refinancings or renewals thereof; provided that (A) any such refinancing Indebtedness is in an aggregate principal amount not greater than the aggregate principal amount of the Indebtedness being renewed or refinanced, plus the amount of any premiums required to be paid thereon, accrued or capitalized interest and reasonable fees and expenses associated therewith, (B) such refinancing Indebtedness has a later or equal final maturity and longer or equal weighted average life than the Indebtedness being renewed or refinanced and (C) the covenants, events of default, subordination and other provisions thereof (including any guarantees thereof) shall be, in the aggregate, no less favorable to the Lenders than those contained in the Indebtedness being renewed or refinanced and (iii) the Senior Notes and Senior Note Guarantees (including any notes and guarantees issued in exchange therefor in accordance with the registration rights document entered into in connection with the issuance of the Senior Notes and Senior Note Guarantees);
(c) Indebtedness of any Company under Hedging Agreements;
(d) Indebtedness permitted by Section 6.04(i);
(e) To the extent recorded in the Companies’ intercompany account ledgers, intercompany Indebtedness of the Companies outstanding to the extent permitted by Section 6.04(d);
(f) Indebtedness in respect of Purchase Money Obligations and Capital Lease Obligations, and refinancings or renewals thereof (other than refinancings funded with intercompany advances), in an aggregate amount not to exceed the greater of (i) $15 million or (ii) 1% of Consolidated Net Tangible Assets, in either case, at any time outstanding;
(g) Indebtedness incurred by Foreign Subsidiaries and/or Non-Guarantor Subsidiaries in an aggregate amount not to exceed $15 million at any time outstanding;
(h) Indebtedness in respect of workers’ compensation claims, self-insurance obligations, performance bonds, surety appeal or similar bonds and completion guarantees provided by a Company in the ordinary course of its business;
(i) Contingent Obligations of any Loan Party in respect of Indebtedness otherwise permitted under this Section 6.01;
(j) Indebtedness arising from the honoring by a bank or other financial institution of a check, draft or similar instrument inadvertently (except in the case of daylight overdrafts) drawn against insufficient funds in the ordinary course of business; provided, however, that such Indebtedness is extinguished within five Business Days of incurrence;
(k) Indebtedness of any seller, the business, person or properties acquired in a Permitted Acquisition;
(l) Indebtedness arising in connection with endorsement of instruments for deposit in the ordinary course of business;
(m) [Intentionally Omitted].
(n) unsecured Indebtedness of any Company in an aggregate amount not to exceed $100 million at any time outstanding.
(a) inchoate Liens for taxes, assessments or governmental charges or levies not yet due and payable or delinquent and Liens for taxes, assessments or governmental charges or levies, which (i) are being contested in good faith by appropriate proceedings for which adequate reserves have been established in accordance with GAAP, which proceedings (or orders entered in connection with such proceedings) have the effect of preventing the forfeiture or sale of the property subject to any such Lien, and (ii) in the case of any such charge or claim which has or may become a Lien against any of the Collateral, such Lien and the contest thereof shall satisfy the Contested Collateral Lien Conditions;
(b) Liens in respect of property of any Company imposed by Requirements of Law, and do not secure Indebtedness for borrowed money, such as carriers’, warehousemen’s, materialmen’s, landlords’, workmen’s, suppliers’, repairmen’s and mechanics’ Liens and other similar Liens, and (i) which do not in the aggregate materially detract from the value of the property of the Companies, taken as a whole, and do not materially impair the use thereof in the operation of the business of the Companies, taken as a whole, (ii) which, if they secure obligations that are then due and unpaid, are being contested in good faith by appropriate proceedings for which adequate reserves have been established in accordance with GAAP, which proceedings (or orders entered in connection with such proceedings) have the effect of preventing the forfeiture or sale of the property subject to any such Lien, and (iii) in the case of any such Lien which has become a Lien against any of the Collateral, such Lien and the contest thereof shall satisfy the Contested Collateral Lien Conditions;
(c) any Lien in existence on the Original Closing Date and set forth on Schedule 6.02(c) to the Original Credit Agreement and any Lien granted as a replacement or substitute therefor; provided that any such replacement or substitute Lien (i) except as permitted by Section 6.01(b) (ii)(A), does not secure an aggregate amount of Indebtedness, if any, greater than that secured on the Closing Date and (ii) does not encumber any property other than the property subject thereto on the Closing Date (any such Lien, an “Existing Lien”);
(d) easements, rights-of-way, restrictions (including zoning restrictions), covenants, licenses, encroachments, protrusions and other similar charges or encumbrances, and minor title deficiencies on or with respect to any Real Property, in each case whether now or hereafter in existence, not (i) securing Indebtedness, (ii) individually or in the aggregate materially impairing the value or marketability of such Real Property or (iii) individually or in the aggregate materially interfering with the ordinary conduct of the business of the Companies at such Real Property;
(e) Liens arising out of judgments, attachments or awards not resulting in a Default and in respect of which such Company shall in good faith be prosecuting an appeal or proceedings for review in respect of which there shall be secured a subsisting stay of execution pending such appeal or proceedings and, in the case of any such Lien which has or may become a Lien against any of the Collateral, such Lien and the contest thereof shall satisfy the Contested Collateral Lien Conditions;
(f) Liens (other than any Lien imposed by ERISA) (x) imposed by Requirements of Law or deposits made in connection therewith in the ordinary course of business in connection with workers’ compensation, unemployment insurance, social security and similar legislation, (y) incurred in the ordinary course of business to secure the performance of tenders, statutory obligations (other than excise taxes), surety, stay, customs and appeal bonds, statutory bonds, bids, leases, government contracts, trade contracts, performance and return of money bonds and other similar obligations (exclusive of obligations for the payment of borrowed money) or (z) arising by virtue of deposits made in the ordinary course of business to secure liability for premiums to insurance carriers; provided that (i) with respect to clauses (x), (y) and (z) of this paragraph (f), such Liens are for amounts not yet due and payable or delinquent or, to the extent such amounts are so due and payable, such amounts are being contested in good faith by appropriate proceedings for which adequate reserves have been established in accordance with GAAP, which proceedings or orders entered in connection with such proceedings have the effect of preventing the forfeiture or sale of the property subject to any such Lien, (ii) to the extent such Liens are not imposed by Requirements of Law, such Liens shall in no event encumber any property other than cash and Cash Equivalents, (iii) in the case of any such Lien against any of the Collateral, such Lien and the contest thereof shall satisfy the Contested Collateral Lien Conditions and (iv) the aggregate amount of deposits at any time pursuant to clause (y) and clause (z) of this paragraph (f) shall not exceed $250,000 in the aggregate;
(g) Leases of the properties of any Company, so long as such Leases are subordinate in all respects to the Liens granted and evidenced by the Security Documents and do not, individually or in the aggregate, (i) interfere in any material respect with the ordinary conduct of the business of any Company or (ii) materially impair the use (for its intended purposes) or the value of the property subject thereto;
(h) Liens arising out of conditional sale, title retention, consignment or similar arrangements for the sale of goods entered into by any Company in the ordinary course of business in accordance with the past practices of such Company;
(i) Liens securing Indebtedness incurred pursuant to Section 6.01(f); provided that any such Liens attach only to the property being financed pursuant to such Indebtedness and do not encumber any other property of any Company;
(j) bankers’ Liens, rights of setoff and other similar Liens existing solely with respect to cash and Cash Equivalents on deposit in one or more accounts maintained by any Company, in each case granted in the ordinary course of business in favor of the bank or banks with which such accounts are maintained, securing amounts owing to such bank with respect to cash management and operating account arrangements, including those involving pooled accounts and netting arrangements; provided that, unless such Liens are non-consensual and arise by operation
of law, in no case shall any such Liens secure (either directly or indirectly) the repayment of any Indebtedness;
(k) Liens on property of a person existing at the time such person is acquired or merged with or into or consolidated with any Company to the extent permitted hereunder (and not created in anticipation or contemplation thereof); provided that such Liens do not extend to property not subject to such Liens at the time of acquisition (other than improvements thereon) and are no more favorable to the lienholders than such existing Lien;
(l) Liens granted pursuant to the Security Documents to secure the Secured Obligations;
(m) licenses of Intellectual Property granted by any Company in the ordinary course of business and not interfering in any material respect with the ordinary conduct of business of the Companies;
(n) the filing of UCC financing statements or PPSA financing statements or financing change statements solely as a precautionary measure in connection with operating leases or consignment of goods;
(o) Liens securing Indebtedness incurred pursuant to Section 6.01(g); provided that (i) such Liens do not extend to, or encumber, property which constitutes Collateral and (ii) such Liens extend only to the property (or Equity Interests) of the Foreign Subsidiary incurring such Indebtedness;
(p) the existence of the “equal and ratable” clause in the Senior Note Documents (but not any security interests granted pursuant thereto); and
(q) Liens with respect to obligations that do not in the aggregate exceed $10 million at any time outstanding;
(a) the Companies may consummate the Transactions in accordance with the provisions of the Transaction Documents;
(b) Investments outstanding on the Original Closing Date and identified on Schedule 6.04(b) to the Original Credit Agreement;
(c) the Companies may (i) acquire and hold accounts receivables owing to any of them if created or acquired in the ordinary course of business and payable or dischargeable in accordance with customary terms, (ii) invest in, acquire and hold cash and Cash Equivalents, (iii) endorse negotiable instruments held for collection in the ordinary course of business or (iv) make lease, utility and other similar deposits in the ordinary course of business;
(d) any Borrowing Base Guarantor (other than Holdings) may make intercompany loans and advances to any other Borrowing Base Guarantor (other than Holdings) that is a Wholly Owned Subsidiary; provided, that such loan shall simultaneously be recorded on such Borrowing Base Guarantor’s ledgers as an intercompany loan, evidenced by a promissory notes and shall be pledged (and delivered) by such Borrowing Base Guarantor that is the lender of such intercompany loan as Collateral pursuant to the Security Agreement, provided further that (i) no Borrowing Base Guarantor may make loans to any Foreign Subsidiary pursuant to this paragraph (d) unless permitted under Section 6.01(g) and (ii) any loans made pursuant to this paragraph (d) shall be subordinated to the obligations of the Borrowing Base Guarantors pursuant to an intercompany note in substantially the form of Exhibit P and may only be repaid in accordance with Section 6.09(b);
(e) The Borrowers and the Borrowing Base Guarantors may make loans and advances (including payroll, travel and entertainment related advances) in the ordinary course of business to their respective employees (other than any loans or advances to any director or executive officer (or equivalent thereof) that would be in violation of Section 402 of the Sarbanes-Oxley Act) so long as the aggregate principal amount thereof at any time outstanding (determined without regard to any write-downs or write-offs of such loans and advances) shall not exceed $1.0 million;
(f) Any Borrower may enter into Hedging Agreements to the extent permitted by Section 6.01(c);
(g) The Borrowers and the Borrowing Base Guarantors may sell or transfer amounts and acquire assets to the extent permitted by Section 6.06;
(h) loans and advances to directors, employees and officers of the Borrowers and the Subsidiaries for bona fide business purposes and to purchase Equity Interests of Holdings, in aggregate amount not to exceed $1.0 million at any time outstanding;
(i) Investments (i) by any Company in any Borrower or any Subsidiary Guarantor, (ii) by a Subsidiary Guarantor in another Subsidiary Guarantor and (iii) by a Subsidiary that is not a Subsidiary Guarantor in any other Subsidiary that is not a Subsidiary Guarantor; provided that any Investment in the form of a loan or advance shall be evidenced by the Intercompany Note and, in the case of a loan or advance by a Loan Party, pledged by such Loan Party as Collateral pursuant to the Security Documents;
(j) Investments in securities of trade creditors or customers in the ordinary course of business received upon foreclosure or pursuant to any plan of reorganization or liquidation or similar arrangement upon the bankruptcy or insolvency of such trade creditors or customers;
(k) Investments made by any Borrower or any Subsidiary as a result of consideration received in connection with an Asset Sale made in compliance with Section 6.06;
(l) other Investments in an aggregate amount not to exceed $35 million at any time outstanding; and
(m) An Investment shall be deemed to be outstanding to the extent not returned in the same form as the original Investment to any Borrower or any Subsidiary Guarantor.
(a) the Transactions as contemplated by the Transaction Documents;
(b) Asset Sales in compliance with Section 6.06;
(c) acquisitions in compliance with Section 6.07;
(d) any Company may merge or consolidate with or into any Borrower or any Subsidiary Guarantor (as long as such Borrower is the surviving person in the case of any merger, amalgamation or consolidation involving such Borrower and such Subsidiary Guarantor is the surviving person and remains a Wholly Owned Subsidiary of Holdings in any other case); provided that the Lien on and security interest in such property granted or to be granted in favor of the applicable Collateral Agents under the Security Documents shall be maintained or created in accordance with the provisions of Section 5.11 or Section 5.12, as applicable; and
(e) any Subsidiary may dissolve, liquidate or wind up its affairs at any time; provided that such dissolution, liquidation or winding up, as applicable, could not reasonably be expected to have a Material Adverse Effect.
(a) disposition of used, worn out, obsolete or surplus property by any Company in the ordinary course of business and the abandonment or other disposition of Intellectual Property that is, in the reasonable judgment of the Borrowers, no longer economically practicable to maintain or useful in the conduct of the business of the Companies taken as a whole;
(b) Asset Sales (other than Sale and Leaseback Transactions); provided that the aggregate consideration received in respect of all Asset Sales (other than Sale and Leaseback Transactions) pursuant to this clause (b) shall not exceed $100 million in any four consecutive fiscal quarters of the Borrowers;
(c) dispositions as part of Sale and Leaseback Transactions with respect to any Store, distribution center or corporate office building constructed or owned by US Borrowers or any of their Subsidiaries;
(d) leases and subleases of real or personal property in the ordinary course of business and in accordance with the applicable Security Documents;
(e) the Transactions as contemplated by the Transaction Documents;
(f) mergers, amalgamations and consolidations in compliance with Section 6.05; and
(g) Investments in compliance with Section 6.04.
(a) Capital Expenditures by the Borrowers and the Subsidiaries;
(b) purchases and other acquisitions of inventory, materials, equipment and intangible property in the ordinary course of business;
(c) Investments in compliance with Section 6.04;
(d) leases or subleases of real or personal property in the ordinary course of business and in accordance with the applicable Security Documents;
(e) the Transactions as contemplated by the Transaction Documents;
(f) Permitted Acquisitions; and
(g) Mergers, amalgamations and consolidations in compliance with Section 6.05;
(a) Dividends by any Company to any Borrower or any Guarantor that is a Wholly Owned Subsidiary of any Borrower;
(b) so long as no Default shall then exist or would arise therefrom, payments to Holdings to permit Holdings, and the subsequent use of such payments by Holdings, to repurchase or redeem Qualified Capital Stock of Holdings held by officers, directors or employees or former officers, directors or employees (or their transferees, estates or beneficiaries under their estates) of any Company, upon their death, disability, retirement, severance or termination of employment or service; provided that the aggregate cash consideration paid for all such redemptions and payments shall not exceed $2.5 million, in any fiscal year, (and up to 100% of such $2.5 million not used in any fiscal year may be carried forward to the next succeeding (but no other) fiscal year);
(c) so long as no Default shall then exist or would arise therefrom, (A) to the extent actually used by Holdings to pay such taxes, costs and expenses, payments by any Borrower to or on behalf of Holdings in an amount sufficient to pay franchise taxes and other fees required to maintain the legal existence of Holdings and (B) payments by any Borrower to or on behalf of Holdings in an amount sufficient to pay out-of-pocket legal, accounting and filing costs and other expenses in the nature of overhead in the ordinary course of business of Holdings, in the case of clauses (A) and (B) in an aggregate amount not to exceed $5 million in any fiscal year;
(d) Permitted Tax Distributions, so long as Holdings uses such distributions to pay its taxes; and
(e) payments to Holdings by any Company to permit distributions by Holdings, and the subsequent use of such payments by Holdings to make distributions, in an aggregate amount not exceeding the sum of 50% of Consolidated Net Income for the period from October 2, 2005 to the end of the most recent fiscal quarter for which financial statements are available plus 100% of the Net Cash Proceeds of Equity Issuances after the Original Closing Date (to the extent not used for Permitted Acquisitions), so long as at the time of such distribution (i) Administrative Borrower has given five (5) Business Days written notice to Administrative Agents of its intention to make such distribution, which notice shall specify the amount of such distribution, (ii) no Triggering Event has occurred and is continuing and (iii) Excess Availability, after giving effect to such distribution, shall be greater than $90 million.
(a) Dividends permitted by Section 6.08;
(b) Investments permitted by Section 6.04(h) and Section 6.04(i);
(c) reasonable and customary director, officer and employee compensation (including bonuses) and other benefits (including retirement, health, stock option and other benefit plans) and indemnification arrangements, which in the case of director and executive officer compensation is approved by the Board of Directors of Borrower;
(d) transactions with customers, clients, suppliers, joint venture partners or purchasers or sellers of goods and services, in each case in the ordinary course of business and otherwise not prohibited by the Loan Documents;
(e) so long as no Default exists, (i) the payment of regular management fees to Sponsor in the amounts and at the times specified in the Management Services Agreement, as in effect on the Original Closing Date or as thereafter amended or replaced in any manner, that, taken as a whole, is not more adverse to the interests of the Lenders in any material respect than such agreement as it was in effect on the Original Closing Date; provided that payments under this clause (e)(i) shall in any event not exceed $2.0 million per fiscal year plus out of pocket expenses and (ii) the payment of the “Transaction Fee” as defined in the Management Services Agreement;
(f) the existence of, and the performance by any Loan Party of its obligations under the terms of, any limited liability company, limited partnership or other Organizational Document or securityholders agreement (including any registration rights agreement or purchase agreement related thereto) to which it is a party on the Original Closing Date and which has been disclosed to the Lenders as in effect on the Original Closing Date, and similar agreements that it may enter into thereafter; provided, however, that the existence of, or the performance by any Loan Party of obligations under, any amendment to any such existing agreement or any such similar agreement entered into after the Original Closing Date shall only be permitted by this Section 6.09(f) to the extent not more adverse to the interest of the Lenders in any material respect, when taken as a whole, than any of such documents and agreements as in effect on the Original Closing Date;
(g) sales of Qualified Capital Stock of Holdings to Affiliates of the Borrowers not otherwise prohibited by the Loan Documents and the granting of registration and other customary rights in connection therewith;
(h) any transaction with an Affiliate where the only consideration paid by any Loan Party is Qualified Capital Stock of Holdings; and
(i) the Transactions as contemplated by the Transaction Documents.
(a) Maximum Total Leverage Ratio. At any time when the Excess Availability does not exceed $70,000,000, permit the Total Leverage Ratio during the applicable Test Period set forth in the table below, to exceed the ratio set forth opposite such period in the table below:
(b) Minimum Fixed Charge Coverage Ratio. At any time when the Excess Availability does not exceed $70,000,000, permit the Consolidated Fixed Charge Coverage Ratio during the applicable Test Period set forth in the table below, to be less than the ratio set forth opposite such period in the table below:
(a) make (or give any notice in respect thereof) any voluntary or optional payment or prepayment on or redemption or acquisition for value of, or any prepayment or redemption as a result of any asset sale, change of control or similar event of, any Indebtedness outstanding under the Senior Notes unless (i) the Administrative Borrower shall have given the Administrative Agents five (5) Business Day’s prior written notice of its intention to make such payment or prepayment, which notice shall specify the amount of such payment or prepayment, (ii) no Triggering Event has occurred and is continuing and (ii) Excess Availability, after giving effect to such payment or prepayment, shall be greater than $90 million;
(b) amend or modify, or permit the amendment or modification of, any provision of any Transaction Document in any manner that is adverse in any material respect to the interests of the Lenders; or
(c) terminate, amend, modify (including electing to treat any Pledged Interests (as defined in the Security Agreement) as a “security” under Section 8-103 of the UCC or under the PPSA) or change any of its Organizational Documents (including by the filing or modification of any certificate of designation) or any agreement to which it is a party with respect to its Equity Interests (including any stockholders’ agreement), or enter into any new agreement with respect to its Equity Interests, other than any such amendments, modifications or changes or such new agreements which are not adverse in any material respect to the interests of the Lenders; provided that Holdings may issue such Equity Interests, so long as such issuance is not prohibited by Section 6.13 or any other provision of this Agreement, and may amend its Organizational Documents to authorize any such Equity Interests.
(a) With respect to Holdings, issue any Equity Interest that is not Qualified Capital Stock.
(b) With respect to the Borrowers or any Subsidiary, issue any Equity Interest (including by way of sales of treasury stock) or any options or warrants to purchase, or securities convertible into, any Equity Interest, except (i) for stock splits, stock dividends and additional issuances of Equity Interests which do not decrease the aggregate percentage ownership of the Borrowers and their Subsidiaries in any class of the Equity Interest of any other Subsidiary; (ii) Subsidiaries of the Borrowers formed after the Closing Date in accordance with Section 6.14 may issue Equity Interests to Borrower or the Subsidiary of the Borrowers which is to own such Equity Interests; and (iii) the Borrowers may issue common stock that is Qualified Capital Stock to Holdings. All Equity Interests issued in accordance with this Section 6.13(b) shall, to the
extent required by Section 5.11 and Section 5.12 or any Security Agreement, be delivered to the applicable Collateral Agent for pledge pursuant to the applicable Security Agreement.
(a) With respect to Holdings, engage in any business activities or have any properties or liabilities, other than (i) its ownership of the Equity Interests of the Borrowers, (ii) obligations under the Loan Documents and the Senior Note Documents and (iii) activities and properties incidental to the foregoing clauses (i) and (ii).
(b) With respect to the Borrowers and the Subsidiaries, engage (directly or indirectly) in any business other than those businesses in which the Borrowers and its Subsidiaries are engaged on the Original Closing Date as described in the Confidential Information Memorandum (or, in the good faith judgment of the Board of Directors, which are substantially related thereto or are reasonable extensions thereof).
(a) Directly or indirectly, (i) knowingly conduct any business or engage in making or receiving any contribution of funds, goods or services to or for the benefit of any person described in Section 3.22, (ii) knowingly deal in, or otherwise engage in any transaction relating to, any property or interests in property blocked pursuant to the Executive Order or any other Anti-Terrorism Law, or (iii) knowingly engage in or conspire to engage in any transaction that evades or avoids, or has the purpose of evading or avoiding, or attempts to violate, any of the prohibitions set forth in any Anti-Terrorism Law (and the Loan Parties shall deliver to the Lenders any certification or other evidence requested from time to time by any Lender in its reasonable discretion, confirming the Loan Parties’ compliance with this Section 6.19).
(b) Cause or permit any of the funds of such Loan Party that are used to repay the Loans to be derived from any unlawful activity with the result that the making of the Loans would be in violation of any Requirement of Law.
ARTICLE VII. GUARANTEE
(i) at any time or from time to time, without notice to the Guarantors or US Borrowers, the time for any performance of or compliance with any of the Guaranteed Obligations shall be extended, or such performance or compliance shall be waived;
(ii) any of the acts mentioned in any of the provisions of this Agreement or the Notes, if any, or any other agreement or instrument referred to herein or therein shall be done or omitted;
(iii) the maturity of any of the Guaranteed Obligations shall be accelerated, or any of the Guaranteed Obligations shall be amended in any respect, or any right under the Loan Documents or any other agreement or instrument referred to herein or therein shall be amended or waived in any respect or any other guarantee of any of the Guaranteed Obligations or any security therefor shall be released or exchanged in whole or in part or otherwise dealt with;
(iv) any Lien or security interest granted to, or in favor of, Issuing Bank or any Lender or Agent as security for any of the Guaranteed Obligations shall fail to be perfected; or
(v) the release of any other Guarantor or US Borrower pursuant to Section 7.09 or otherwise.
ARTICLE VIII. EVENTS OF DEFAULT
(g) an involuntary proceeding shall be commenced (including the filing of any notice of intention in respect thereof) or an involuntary petition shall be filed in a court of competent jurisdiction seeking (i) relief in respect of any Company or of a substantial part of the property of any Company, under Title 11 of the U.S. Code, as now constituted or hereafter amended, or any other Insolvency Law, federal, state, provincial or foreign bankruptcy, insolvency, receivership or similar law; (ii) the appointment of a receiver, interim receiver, receiver and manager, liquidator, trustee, custodian, sequestrator, conservator or similar official for any Company or for a substantial part of the property of any Company; or (iii) the winding-up or liquidation of any Company; and such proceeding or petition shall continue undismissed for 60 days or an order or decree approving or ordering any of the foregoing shall be entered;
(h) any Company shall (i) voluntarily commence any proceeding or file any petition seeking relief under Title 11 of the United States Code, as now constituted or hereafter amended, or any other Insolvency Law, federal, state, provincial or foreign bankruptcy, insolvency, receivership, incorporation law in any jurisdiction or similar law; (ii) consent to the institution of, or fail to contest in a timely and appropriate manner, any proceeding or the filing of any petition described in clause (g) above; (iii) apply for or consent to the appointment of a receiver, interim receiver, receiver and manager, liquidator, trustee, custodian, sequestrator, conservator or similar official for any Company or for a substantial part of the property of any Company; (iv) file an answer admitting the material allegations of a petition filed against it in any such proceeding; (v) make a general assignment for the benefit of creditors; (vi) become unable, admit in writing its inability or fail generally to pay its debts as they become due; (vii) take any action for the purpose of effecting any of the foregoing; or (viii) wind up or liquidate;
(i) one or more judgments, orders or decrees for the payment of money in an aggregate amount in excess of $5 million shall be rendered against any Company or any combination thereof and the same shall remain undischarged, unvacated or unbonded for a period of 30 consecutive days during which execution shall not be effectively stayed, or any action shall be legally taken by a judgment creditor to levy upon properties of any Company to enforce any such judgment;
(j) one or more ERISA Events or noncompliance with respect to Foreign Plans shall have occurred that, in the reasonable opinion of the Required Lenders, when taken together with all other such ERISA Events and noncompliance with respect to Foreign Plans, could reasonably be expected to result in a Material Adverse Effect or in the imposition of a Lien on any properties of a Company;
(k) any security interest and Lien purported to be created by any Security Document shall cease to be in full force and effect, or shall cease to give the applicable Collateral Agents for the benefit of the applicable Secured Parties, the Liens, rights, powers and privileges purported to be created and granted under such Security Document (including a perfected first priority security interest in and Lien on all of the Collateral thereunder (except as otherwise expressly provided in this Agreement or such Security Document)) in favor of such Collateral Agents, or shall be asserted by the Borrowers or any other Loan Party not to be a valid, perfected, first priority (except as otherwise expressly provided in this Agreement or such Security Document) security interest in or Lien on the Collateral covered thereby;
(l) any Loan Document or any material provisions thereof shall at any time and for any reason be declared by a court of competent jurisdiction to be null and void, or a proceeding shall be commenced by any Loan Party or any other person, or by any Governmental Authority, seeking to establish the invalidity or unenforceability thereof (exclusive of questions of interpretation of any provision thereof), or any Loan Party shall repudiate or deny any portion of its liability or obligation for the Obligations;
(m) there shall have occurred a Change in Control;
(n) any Company shall be prohibited or otherwise restrained from conducting the business theretofore conducted by it in any manner that has or could reasonably be expected to result in a Material Adverse Effect by virtue of any determination, ruling, decision, decree or order of any court or Governmental Authority of competent jurisdiction;
then, and in every such event (other than an event with respect to Holdings or any Borrower described in paragraph (g) or (h) above), and at any time thereafter during the continuance of such event, the Administrative Agents may, and at the request of the Required Lenders shall, by notice to the Borrowers, take either or both of the following actions, at the same or different times: (i) terminate forthwith the Commitments and (ii) declare the Loans and Reimbursement Obligations then outstanding to be forthwith due and payable in whole or in part, whereupon the principal of the Loans and Reimbursement Obligations so declared to be due and payable, together with accrued interest thereon and any unpaid accrued Fees and all other Obligations of the Borrowers accrued hereunder and under any other Loan Document, shall become forthwith due and payable, without presentment, demand, protest or any other notice of any kind, all of which are hereby expressly waived by the Borrowers and the Guarantors, anything contained herein or in any other Loan Document to the contrary notwithstanding; and in any event, with respect to Holdings or any Borrower described in paragraph (g) or (h) above, the Commitments shall automatically terminate and the principal of the Loans and Reimbursement Obligations then outstanding, together with accrued interest thereon and any unpaid accrued Fees and all other Obligations of the Borrowers accrued hereunder and under any other Loan Document, shall automatically become due and payable, without presentment, demand, protest or any other notice of any kind, all of which are hereby expressly waived by the Borrowers and the Guarantors, anything contained herein or in any other Loan Document to the contrary notwithstanding.
(a) First, to the payment of all reasonable costs and expenses, fees, commissions and taxes of such sale, collection or other realization including compensation to such Collateral Agents and their agents and counsel, and all expenses, liabilities and advances made or incurred by such Collateral Agents in connection therewith and all amounts for which such Collateral Agents are entitled to indemnification pursuant to the provisions of any Loan Document, together with interest on each such amount at the highest rate then in effect under this Agreement from and after the date such amount is due, owing or unpaid until paid in full;
(b) Second, to the payment of all other reasonable costs and expenses of such sale, collection or other realization including compensation to the other Secured Parties and their agents and counsel and all costs, liabilities and advances made or incurred by the other Secured Parties in connection therewith, together with interest on each such amount at the highest rate then in effect under this Agreement from and after the date such amount is due, owing or unpaid until paid in full;
(c) Third, without duplication of amounts applied pursuant to clauses (a) and (b) above, to the indefeasible payment in full in cash, pro rata, of interest and other amounts constituting Obligations (other than principal, Reimbursement Obligations and obligations of the type described in clause (d) in the definition of “Obligations”) and any fees, premiums and scheduled periodic payments due under Hedging Agreements constituting Secured Obligations and any interest accrued thereon, in each case equally and ratably in accordance with the respective amounts thereof then due and owing;
(d) Fourth, to the indefeasible payment in full in cash, pro rata, of principal amount of the Obligations (including Reimbursement Obligations, but excluding obligations of the type described in clause (d) in the definition of “Obligations”) and any breakage, termination or other
payments under Hedging Agreements constituting Secured Obligations and any interest accrued thereon;
(e) Fifth, to the indefeasible payment in full in cash, pro rata, of obligations of the type described in clause (d) in the definition of “Obligations”;
(f) Sixth, the balance, if any, to the person lawfully entitled thereto (including the applicable Loan Party or its successors or assigns) or as a court of competent jurisdiction may direct.
ARTICLE IX. COLLATERAL ACCOUNT; APPLICATION OF COLLATERAL PROCEEDS
(a) The Borrowers and each Borrowing Base Guarantor shall notify the Collateral Agents promptly of: (i) any material delay in the performance by the Borrowers or any Borrowing Base Guarantor of any of their material obligations to any Account Debtor or the assertion of any material claims, offsets, defenses or counterclaims by any Account Debtor, or any material disputes with Account Debtors, or any settlement, adjustment or compromise thereof, (ii) all material adverse information known to any Loan Party relating to the financial condition of any Account Debtor and (iii) any event or circumstance which, to any Loan Party’s knowledge, would result in any Account no longer constituting an Eligible Account. The Borrowers and each Borrowing Base Guarantor hereby agree not to grant to any Account Debtor any credit, discount, allowance or extension, or to enter into any agreement for any of the foregoing, without the applicable Collateral Agents consent, except in the ordinary course of business in accordance with practices and policies previously disclosed in writing to the Collateral Agents. So long as no Event of Default exists or has occurred and is continuing, the Borrowers and each Borrowing Base Guarantor may settle, adjust or compromise any claim, offset, counterclaim or dispute with any Account Debtor. At any time that an Event of Default exists or has occurred and is continuing, the applicable Collateral Agents shall, at their option,
have the exclusive right to settle, adjust or compromise any claim, offset, counterclaim or dispute with Account Debtors of any Loan Party or grant any credits, discounts or allowances.
(b) With respect to each Account: (i) the amounts shown on any invoice delivered to Collateral Agents or schedule thereof delivered to Collateral Agents shall be true and complete in all material respects, (ii) no payments shall be made thereon except payments immediately delivered to Collateral Agents pursuant to the terms of this Agreement or any applicable Security Document (to the extent so required), (iii) there shall be no setoffs, deductions, contras, defenses, counterclaims or disputes existing or asserted with respect thereto except as reported to Collateral Agents and promptly reflected in the reporting of the Borrowing Base, in accordance with the terms of this Agreement, and (iv) none of the transactions giving rise thereto will violate any applicable laws or regulations, all documentation relating thereto will be legally sufficient under such laws and regulations and all such documentation will be legally enforceable in accordance with its terms.
(c) Collateral Agents shall have the right at any time or times, in Collateral Agents’ name or in the name of a nominee of a Collateral Agent, to verify the validity, amount or any other matter relating to any Account or other Collateral, by mail, telephone, e-mail, facsimile transmission or otherwise. To facilitate the exercise of the right described in the immediately preceding sentence, the Borrowers hereby agrees to provide Collateral Agents upon request the name and address of each Account Debtor of the Borrowers and Borrowing Base Guarantors.
The Borrowers and each Guarantor shall maintain a cash management system which is acceptable to the Administrative Agents and the applicable Collateral Agents (the “Cash Management System”), which shall operate as follows:
(a) All funds held by Borrowers or any other Loan Party (other than funds being collected pursuant to the provisions stated below) shall be deposited in one or more bank accounts or securities investment accounts, in form and substance reasonably satisfactory to applicable Collateral Agents subject to the terms of the Security Agreement and applicable Control Agreements.
(b) The Borrowers shall establish and maintain, at their sole expense, and shall cause each Guarantor to establish and maintain, at its sole expense blocked accounts or lockboxes and related deposit accounts, which, on the Closing Date, shall consist of accounts and related lockboxes maintained by the financial institutions as described on Schedule 9.02 hereto (in each case, “Blocked Accounts”), as the applicable Collateral Agent may specify, with such banks as are acceptable to the applicable Collateral Agents into which the Borrowers and Guarantors shall promptly deposit and direct their respective Account Debtors to directly remit all payments on Accounts and all payments constituting proceeds of Inventory or other Collateral (other than proceeds of a Casualty Event or an Asset Sale that do not require a permanent repayment under Loan Documents) in the identical form in which such payments are made, whether by cash, check or other manner and shall be identified and segregated from all other funds of the Loan Parties. The Borrowers and Guarantors shall deliver, or cause to be delivered, to the applicable Collateral Agents a Control Agreement duly authorized, executed and delivered by each bank
where a Blocked Account for the benefit of the Borrowers or any Guarantor is maintained, and by each bank where any other deposit account is from time to time maintained. The Borrowers shall further execute and deliver, and shall cause each Guarantor to execute and deliver, such agreements and documents as the applicable Collateral Agents may require in connection with such Blocked Accounts and such Control Agreements. The Borrowers and Guarantors shall not establish any deposit accounts after the Closing Date, unless the Borrowers or Guarantor (as applicable) have complied in full with the provisions of this Section 9.01 with respect to such deposit accounts. Borrowers agree that from and after the delivery of an Activation Notice (as defined below) all payments made to such Blocked Accounts or other funds received and collected by the applicable Collateral Agents or any Lender, whether in respect of the Accounts, as proceeds of Inventory or other Collateral or otherwise shall be treated as payments to the applicable Collateral Agents and Lenders in respect of the Obligations and therefor shall constitute the property of such Collateral Agents and Lenders to the extent of the then outstanding Obligations.
(c) With respect to the Blocked Accounts of US Borrowers and such Guarantors (other than Guarantors organized under the laws of Canada) as the applicable Collateral Agents shall determine in their sole discretion, the applicable bank maintaining such Blocked Accounts shall agree to forward daily all amounts in each Blocked Account to one of the Blocked Accounts designated as a concentration account in the name of US Borrowers (the “US Concentration Account”) at the bank that shall be designated as the Concentration Account bank for US Borrowers (the “US Concentration Account Bank”), which, on the Closing Date, shall be account #8900338261 maintained by The Bank of New York (or other financial institution acceptable to the applicable Collateral Agents); provided, however, that amounts in the Blocked Accounts with numbers 2000028308229, 2000028308245, 2000028308261, 2000028308274, 2000028308258 and 2000028308232 maintained at Wachovia Bank, National Association (the “US Tax Bank”) will be combined into account #2000028308216 (the “Master Tax Account”) at Wachovia Bank, National Association. The US Concentration Account Bank and US Tax Bank shall agree, from and after the receipt of a notice (an “Activation Notice”) from the applicable US Collateral Agent (which Activation Notice may or, upon instruction of the Required Lenders, shall be given by such Collateral Agent at any time from and after the occurrence of a Trigger Event which is continuing at the time of such notice) pursuant to the applicable Control Agreement, to forward daily all amounts in the US Concentration Account to the account designated as collection account (the “US Collection Account”) which shall be under the exclusive dominion and control of the US Administrative Agent.
(d) With respect to the Blocked Accounts of Canadian Borrower and such Guarantors organized under the laws of Canada as the applicable Collateral Agents shall determine in their sole discretion, the applicable bank maintaining such Blocked Accounts shall agree to forward daily all amounts in each Blocked Account to one of the Blocked Accounts designated as a concentration accounts in the name of Canadian Borrower (the “Canadian Concentration Accounts” and together with the US Concentration Account and Master Tax Account, the “Concentration Accounts”) at the bank that shall be designated as the Concentration Account bank for Canadian Borrower (the “Canadian Concentration Account Bank” and together with the US Concentration Account Bank, the “Concentration Account Banks”), which, on the Closing Date, shall be account nos. 1496-666 and 4688-785 maintained by The Bank of Montreal (or other financial institution acceptable to the applicable Collateral Agents). The
Canadian Concentration Account Bank shall agree, from and after the receipt of a notice an Activation Notice (which Activation Notice may or, upon instruction of the Required Lenders, shall be given by such Collateral Agent at any time from and after the occurrence of a Trigger Event which is continuing at the time of such notice) pursuant to the applicable Control Agreement, to forward daily all amounts in the Canadian Concentration Account to the account designated as collection account (the “Canadian Collection Account” and together with the US Collection Account, the “Collection Accounts”) which shall be under the exclusive dominion and control of the Canadian Administrative Agent.
(e) With respect to the Blocked Accounts of such Guarantors as the respective Collateral Agents shall determine in their sole discretion, the applicable bank maintaining such Blocked Accounts shall agree, from and after the receipt of an Activation Notice (which Activation Notice may or, upon instruction of the Required Lenders, shall be given by the applicable Collateral Agents at any time from and after a Trigger Event), to forward all amounts in each Blocked Account to the US Collection Account and/or Canadian Collection Account, as applicable, and to commence the process of daily sweeps from such Blocked Account into the applicable Collection Accounts.
(f) Any provision of this Section 9.02 to the contrary notwithstanding, (A) Loan Parties may maintain payroll accounts and trust accounts that are not a part of the Cash Management System provided that no Loan Party shall accumulate or maintain cash in such accounts as of any date of determination in excess of checks outstanding against such accounts as of that date and amounts necessary to meet minimum balance requirements and (B) Loan Parties may maintain local cash accounts that are not a part of the Cash Management System which individually do not at any time contain funds in excess of $500,000 and, together with all other such local cash accounts, do not exceed $5 million.
(g) (i) The US Administrative Agent shall apply all funds received in the US Collection Account on a daily basis to the repayment of the Obligations of the US Borrowers and its US Subsidiaries to either, at its option, (a) outstanding US Swingline Loans or (b) in accordance with any instructions received under Section 2.10(g). From and after the delivery of an Activation Notice, unless Administrative Agents and Collateral Agents determine to release such funds to Borrowers in accordance with the following sentence, US Administrative Agent shall apply all such funds in the US Collection Account on a daily basis to the repayment of (a) first, Fees and reimbursable expenses of the US Administrative Agent and the US Collateral Agent then due and payable; (b) second, to interest then due and payable on all Loans (other than Canadian Revolving Loans), (c) third, Overadvances (other than such Overadvances comprised of Canadian Revolving Loans), (d) fourth, the Swingline Loans, (e) fifth, ABR Revolving Loans (other than Canadian Revolving Loans), (f) sixth, Eurodollar Revolving Loans (other than Canadian Revolving Loans), together with all accrued and unpaid interest thereon (provided, however, payments on Eurodollar Revolving Loans with respect to which the application of such payment would result in the payment of the principal prior to the last day of the relevant Interest Period shall be transferred to the Cash Collateral Account to be applied to the Eurodollar Revolving Loans (other than Canadian Revolving Loans) on the last day of the relevant Interest Period of such Eurodollar Revolving Loan or to the Obligations of the US Borrowers and its Domestic Subsidiaries as they come due (whether at stated maturity, by acceleration or otherwise)). Notwithstanding the foregoing sentence, after payment in full has been made of the
amounts required under subsections (a)-(c) above, upon US Borrower’s request and as long as no Default has occurred and is continuing and all other conditions precedent to a Borrowing have been satisfied, any additional funds deposited in the US Collection Account or Cash Collateral Account shall be released to US Borrower. In addition, if consented to by the Administrative Agents, the Collateral Agents and the Required Lenders, such funds in the US Collection Account or Cash Collateral Account may be released to Borrowers. Notwithstanding the above, if the applicable Administrative Agent has declared the Loans and/or Reimbursement Obligations then outstanding to be forthwith due and payable in whole or in part pursuant to Section 8.01, the US Administrative Agent shall apply all funds received in the Collection Account in accordance with Section 8.03.
(h) The Borrowers and their directors, employees, agents and other Affiliates and Borrowing Base Guarantors shall promptly deposit or cause the same to be deposited, any monies, checks, notes, drafts or any other payment relating to and/or proceeds of Accounts, Inventory or other Collateral which come into their possession or under their control in the applicable Blocked Accounts, or remit the same or cause the same to be remitted, in kind, to the applicable Collateral Agents. In no event shall the same be commingled with Borrowers’ own funds. US Borrowers agrees to reimburse US Collateral Agents and Canadian Borrower agrees to reimburse Canadian Collateral Agents, as applicable, on demand for any amounts owed or paid to any bank at which a Blocked Account is established or any other bank or person involved in the transfer of funds to or from the Blocked Accounts arising out of such Collateral Agents’ payments to or indemnification of such bank or person.
(a) (i) in no event less frequently than 30 days after the end of the month ending February 28, 2006 and for each month thereafter through and including the month ending July 31, 2006 and (ii) in no event less frequently than 20 days after the end of the month ending August 30, 2006 and for each month thereafter, a Borrowing Base Certificate from the Borrowers accompanied by such supporting detail and documentation as shall be requested by the applicable Collateral Agent in its reasonable credit judgment, provided, that if at any time the Average Excess Availability is less than $90 million and so long as Borrowers do not maintain Average Excess Availability in excess of $90 million for a period of three (3) consecutive fiscal months, Borrowers shall deliver additional weekly roll-forward of Accounts and Inventory referenced in paragraph (b) below within five (5) Business Days after the end of each calendar week, and, if requested by the applicable Collateral Agents, a Borrowing Base Certificate (prepared weekly to reflect results satisfactory to such Collateral Agents) within five (5) Business Days after the end of each calendar week, or more frequent Borrowing Base Certificates reflecting shorter periods as reasonably requested by such Collateral Agents. Each Borrowing Base Certificate shall reflect all information through the end of the appropriate period for Borrowers and each Borrowing Base Guarantor;
(b) upon request by the Collateral Agents, and in no event less frequently than 30 days after the end of (i) each month, a monthly trial balance showing Accounts outstanding aged
from statement date as follows: 1 to 30 days, 31 to 60 days, 61 to 90 days and 91 days or more, accompanied by a comparison to the prior month’s trial balance and such supporting detail and documentation as shall be requested by the Collateral Agents in their reasonable credit judgment and (ii) each month, a summary of Inventory by location and type accompanied by such supporting detail and documentation as shall be requested by the Collateral Agents in their reasonable credit judgment (in each case, together with a copy of all or any part of such delivery requested by any Lender in writing after the Closing Date);
(c) on the date any Borrowing Base Certificate is delivered pursuant to Section 9.04(a) or at such more frequent intervals as the Collateral Agents may request from time to time (together with a copy of all or any part of such delivery requested by any Lender in writing after the Closing Date), (i) a copy of the ledger registering the Borrowing Base Guarantor Intercompany Loan Amount as of the date of the Borrowing Base Certificate and (ii) a collateral report with respect to the Loan Parties, including all additions and reductions (cash and non-cash) with respect to intercompany loan accounts of the Borrowers and Borrowing Base Guarantors, accompanied by such supporting detail and documentation as shall be requested by the Collateral Agents in their reasonable credit judgment;
(d) at the time of delivery of each of the financial statements delivered pursuant to Section 5.01(a) and (b), a reconciliation of the Accounts trial balance and quarter-end Inventory reports of the Borrowers and Borrowing Base Guarantors to the general ledger of such Loan Party, in each case, accompanied by such supporting detail and documentation as shall be requested by the Collateral Agents in their reasonable credit judgment;
(e) a list of any applications for the registration of any patent, trademark or copyright with the United States Patent and Trademark Office, the United States Copyright Office or any similar office or agency which any Loan Party has filed in the prior fiscal quarter; and
(f) such other reports, statements and reconciliations with respect to the Borrowing Base, Canadian Borrowing Base or Collateral of any or all Loan Parties as the Collateral Agents shall from time to time request in its reasonable credit judgment.
ARTICLE X. THE ADMINISTRATIVE AGENTS AND THE COLLATERAL AGENTS
SECTION 10.03. Exculpatory Provisions.
(a) No Agent shall have any duties or obligations except those expressly set forth herein and in the other Loan Documents. Without limiting the generality of the foregoing, no Agent:
(i) shall be subject to any fiduciary or other implied duties, regardless of whether a Default has occurred and is continuing;
(ii) shall have any duty to take any discretionary action or exercise any discretionary powers, except discretionary rights and powers expressly contemplated hereby or by the other Loan Documents that such Agent is required to exercise as directed in writing by the Required Lenders (or such other number or percentage of the Lenders as shall be expressly provided for herein or in the other Loan Documents); provided that such Agent shall not be required to take any action that, in its judgment or the judgment of its counsel, may expose such Agent to liability or that is contrary to any Loan Document or applicable Requirements of Law; and
(iii) shall, except as expressly set forth herein and in the other Loan Documents, have any duty to disclose, and shall not be liable for the failure to disclose, any information relating to the Borrowers or any of its Affiliates that is communicated to or obtained by the person serving as such Agent or any of its Affiliates in any capacity.
(b) No Agent shall be liable for any action taken or not taken by it (x) with the consent or at the request of the Required Lenders (or such other number or percentage of the Lenders as shall be necessary, or as such Agent shall believe in good faith shall be necessary, under the circumstances as provided in Section 11.02) or (y) in the absence of its own gross negligence or willful misconduct. No Agent shall be deemed to have knowledge of any Default unless and until notice describing such Default is given to such Agent by the Borrowers, a Lender or the Issuing Bank.
(c) No Agent shall be responsible for or have any duty to ascertain or inquire into (i) any statement, warranty or representation made in or in connection with this Agreement or any other Loan Document, (ii) the contents of any certificate, report or other document delivered hereunder or thereunder or in connection herewith or therewith, (iii) the performance or observance of any of the covenants, agreements or other terms or conditions set forth herein or therein or the occurrence of any Default, (iv) the validity, enforceability, effectiveness or genuineness of this Agreement, any other Loan Document or any other agreement, instrument or document or (v) the satisfaction of any condition set forth in Article IV or elsewhere herein, other than to confirm receipt of items expressly required to be delivered to such Agent. Without limiting the generality of the foregoing, the use of the term “agent” in this Agreement with reference to the Administrative Agents or the Collateral Agents is not intended to connote any fiduciary or other implied (or express) obligations arising under agency doctrine of any applicable law. Instead, such term us used merely as a matter of market custom and is intended to create or reflect only an administrative relationship between independent contracting parties.
(d) Canadian Administrative Agent represents and warrants to the Canadian Borrower that on the Closing Date and throughout the term of this Agreement:
(i) it is not a “non-resident” within the meaning of the ITA, or
(ii) it is an “Authorized Foreign Bank” within the meaning of the Bank Act for purposes of the ITA and is entering into this agreement in the ordinary course of its trade and business that is its “Canadian banking business” for purposes of the ITA.
(a) is deemed to have requested that Agents furnish such Lender, promptly after it becomes available, a copy of each field audit or examination report and report with respect to the Borrowing Base prepared or received by Agents (each field audit or examination report and report with respect to the Borrowing Base being referred to herein as a “Report” and collectively, “Reports”), appraisals with respect to the Collateral and financial statements with respect to Borrowers and its Subsidiaries received by Agents;
(b) expressly agrees and acknowledges that Agents (i) does not make any representation or warranty as to the accuracy of any Report, appraisal or financial statement or (ii) shall not be liable for any information contained in any Report, appraisal or financial statement;
(c) expressly agrees and acknowledges that the Reports are not comprehensive audits or examinations, that Agents or any other party performing any audit or examination will inspect only specific information regarding Borrowers and Guarantors and will rely significantly upon Borrowers’ and Guarantors’ books and records, as well as on representations of Borrowers’ and Guarantors’ personnel; and
(d) agrees to keep all Reports confidential and strictly for its internal use in accordance with the terms of Section 11.12, and not to distribute or use any Report in any other manner.
ARTICLE XI. MISCELLANEOUS
(a) Generally. Except in the case of notices and other communications expressly permitted to be given by telephone (and except as provided in paragraph (b) below), all notices and other communications provided for herein shall be in writing and shall be delivered by hand or overnight courier service, mailed by certified or registered mail or sent by telecopier as follows:
(i) if to any Loan Party, to US Borrowers at:
(ii) if to UBS AG, Stamford Branch, as US Administrative Agent, US Collateral Agent or the Issuing Bank, to it at:
(iii) if to UBS AG Canada Branch, as Canadian Collateral Agent, to it at:
(iv) if to Wachovia Bank, National Association, as US Collateral Agent, to it at:
(v) if to Wachovia Bank, National Association, as Issuing Bank, to it at
Wachovia Bank, National Association
(vi) if to Wachovia Capital Finance Corporation (Canada), as Canadian Collateral Agent or Canadian Administrative Agent, to it at:
Wachovia Capital Finance Corporation (Canada)
Wachovia Bank, National Association
(vii) if to a Lender, to it at its address (or telecopier number) set forth in its Administrative Questionnaire; and
(viii) if to the US Swingline Lender, to it at:
(ix) if to the Canadian Swingline Lender, to it at:
Wachovia Capital Finance Corporation (Canada)
Wachovia Bank, National Association
(b) Electronic Communications. Notices and other communications to the Lenders and the Issuing Bank hereunder may (subject to Section 11.01(d)) be delivered or furnished by electronic communication (including e-mail and Internet or intranet websites) pursuant to procedures approved by the Administrative Agents; provided that the foregoing shall not apply to notices to any Lender or the Issuing Bank pursuant to Article II if such Lender or the Issuing Bank, as applicable, has notified the Administrative Agents that it is incapable of receiving notices under such Article by electronic communication. The Administrative Agents, the Collateral Agents or the Borrowers may, in their discretion, agree to accept notices and other communications to it hereunder by electronic communications pursuant to procedures approved by it (including as set forth in Section 11.01(d)); provided that approval of such procedures may be limited to particular notices or communications.
(c) Change of Address, Etc. Any party hereto may change its address or telecopier number for notices and other communications hereunder by notice to the other parties hereto.
(d) Posting. Each Loan Party hereby agrees that it will provide to the Administrative Agents all information, documents and other materials that it is obligated to furnish to the Administrative Agents pursuant to this Agreement and any other Loan Document, including all notices, requests, financial statements, financial and other reports, certificates and other information materials, but excluding any such communication that (i) relates to a request for a new, or a conversion of an existing, Borrowing or other extension of credit (including any election of an interest rate or interest period relating thereto), (ii) relates to the payment of any principal or other amount due under this Agreement prior to the scheduled date therefor, (iii) provides notice of any Default under this Agreement or (iv) is required to be delivered to satisfy any condition precedent to the effectiveness of this Agreement and/or any borrowing or other extension of credit hereunder (all such non-excluded communications, collectively, the “Communications”), by transmitting the Communications in an electronic/soft medium in a format reasonably acceptable to the US Administrative Agent at such e-mail address(es) provided to the Borrowers from time to time or in such other form, including hard copy delivery thereof, as the Administrative Agents shall require. In addition, each Loan Party agrees to continue to provide the Communications to the Administrative Agents in the manner specified in this Agreement or any other Loan Document or in such other form, including hard copy delivery thereof, as the Administrative Agents shall require. Nothing in this Section 11.01(d) shall prejudice the right of the Agents, any Lender or any Loan Party to give any notice or other communication pursuant to this Agreement or any other Loan Document in any other manner specified in this Agreement or any other Loan Document or as any such Agent shall require.
(a) Generally. No failure or delay by any Agent, the Issuing Bank or any Lender in exercising any right or power hereunder or under any other Loan Document shall operate as a waiver thereof, nor shall any single or partial exercise of any such right or power, or any abandonment or discontinuance of steps to enforce such a right or power, preclude any other or further exercise thereof or the exercise of any other right or power. The rights and remedies of each Agent, the Issuing Bank and the Lenders hereunder and under the other Loan Documents are cumulative and are not exclusive of any rights or remedies that they would otherwise have. No waiver of any provision of any Loan Document or consent to any departure by any Loan Party therefrom shall in any event be effective unless the same shall be permitted by this Section 11.02, and then such waiver or consent shall be effective only in the specific instance and for the purpose for which given. Without limiting the generality of the foregoing, the making of a Loan or issuance of a Letter of Credit shall not be construed as a waiver of any Default, regardless of whether any Agent, any Lender or the Issuing Bank may have had notice or knowledge of such Default at the time. No notice or demand on the Borrowers in any case shall entitle the Borrowers to any other or further notice or demand in similar or other circumstances.
(b) Required Consents. Subject to the terms of the Intercreditor Agreement and to Section 11.02(c) and (d) neither this Agreement nor any other Loan Document nor any provision hereof or thereof may be waived, amended, supplemented or modified except, in the case of this Agreement, pursuant to an agreement or agreements in writing entered into by the Borrowers and the Required Lenders, pursuant to a Financial Covenant Amendment Notice or, in the case of any other Loan Document, pursuant to an agreement or agreements in writing entered into by the Administrative Agents, the Collateral Agents (in the case of any Security Document) and the Loan Party or Loan Parties that are party thereto, in each case with the written consent of the Required Lenders; provided that no such agreement shall be effective if the effect thereof would:
(i) increase the Commitment of any Lender without the written consent of such Lender (it being understood that no amendment, modification, termination, waiver or consent with respect to any condition precedent, covenant or Default shall constitute an increase in the Commitment of any Lender);
(ii) reduce the principal amount or premium of any Loan or LC Disbursement or reduce the rate of interest thereon (other than interest pursuant to Section 2.06(d)), or reduce any Fees payable hereunder, or change the form or currency of payment of any Obligation, without the written consent of each Lender directly affected thereby (it being understood that any amendment or modification to the
financial definitions in this Agreement shall not constitute a reduction in the rate of interest for purposes of this clause (ii));
(iii) (A) change the scheduled final maturity of any Loan, (B) postpone the date for payment of any Reimbursement Obligation or any interest or fees payable hereunder, (C) change the amount of, waive or excuse any such payment (other than waiver of any increase in the interest rate pursuant to Section 2.06(e)), or (D) postpone the scheduled date of expiration of any Commitment or any Letter of Credit beyond the Revolving Maturity Date, in any case, without the written consent of each Lender directly affected thereby;
(iv) increase the maximum duration of Interest Periods hereunder, without the written consent of each Lender directly affected thereby;
(v) permit the assignment or delegation by the Borrowers of any of their rights or obligations under any Loan Document, without the written consent of each Lender;
(vi) release Holdings or all or substantially all of the Subsidiary Guarantors from their Guarantee (except as expressly provided in Article VII), or limit their liability in respect of such Guarantee, without the written consent of each Lender;
(vii) except as provided for in the Intercreditor Agreement, release all or a substantial portion of the Collateral from the Liens of the Security Documents or alter the relative priorities of the Secured Obligations entitled to the Liens of the Security Documents, in each case without the written consent of each Lender (it being understood that additional Classes of Loans pursuant to Section 2.19 or consented to by the Required Lenders may be equally and ratably secured by the Collateral with the then existing Secured Obligations under the Security Documents);
(viii) change Section 2.14(b), (c) or (d) in a manner that would alter the pro rata sharing of payments or setoffs required thereby or any other provision in a manner that would alter the pro rata allocation among the Lenders of Loan disbursements, including the requirements of Section 2.02(a), Section 2.17(d) and Section 2.18(d), without the written consent of each Lender directly affected thereby;
(ix) change any provision of this Section 11.02(b), (c), or (d), without the written consent of each Lender directly affected thereby (except for additional restrictions on amendments or waivers for the benefit of Lenders of additional Classes of Loans pursuant to Section 2.19 or consented to by the Required Lenders);
(x) change the percentage set forth in the definition of “Required Lenders,” “Supermajority Lenders” or any other provision of any Loan Document (including this Section) specifying the number or percentage of Lenders (or Lenders of any Class) required to waive, amend or modify any rights thereunder or make any determination or grant any consent thereunder, without the written consent of each Lender (or each Lender of such Class, as the case may be), other than to increase such percentage or
number or to give any additional Lender or group of Lenders such right to waive, amend or modify or make any such determination or grant any such consent;
(xi) change the application of payments as among or between Classes under Section 2.10(f), Section 8.03 or Section 9.02(g) without the written consent of the Lenders of each Class that is being allocated a lesser prepayment as a result thereof (it being understood that the Required Lenders may waive, in whole or in part, any prepayment under Section 2.10(f) so long as the application, as between Classes, of any portion of such prepayment that is still required to be made is not changed and, if additional Classes of Revolving Loans under this Agreement pursuant to Section 2.19 or consented to by the Required Lenders are made, such new Revolving Loans may be included on a pro rata basis in the various prepayments required pursuant to Section 2.10(f));
(xii) [Intentionally Deleted];
(xiii) change or waive any provision of Article X as the same applies to any Agent, or any other provision of this Agreement as the same applies to the rights or obligations of any Agent, in each case without the written consent of such Agent;
(xiv) change or waive any obligation of the Lenders relating to the issuance of or purchase of participations in Letters of Credit, without the written consent of the applicable Administrative Agent and the Issuing Bank; or
(xv) change or waive any provision hereof relating to Swingline Loans (including the definition of “US Swingline Commitment” or “Canadian Swingline Commitment”), without the written consent of the applicable Swingline Lender;
(c) Collateral. Without the consent of any other person, the applicable Loan Party or Parties and the Administrative Agents and/or the Collateral Agents may (in its or their respective sole discretion, or shall, to the extent required by any Loan Document) enter into any amendment or waiver of any Loan Document, or enter into any new agreement or instrument, to effect the granting, perfection, protection, expansion or enhancement of any security interest in any Collateral or additional property to become Collateral for the benefit of the Secured Parties, or as
required by local law to give effect to, or protect any security interest for the benefit of the Secured Parties, in any property or so that the security interests therein comply with applicable Requirements of Law.
(d) Dissenting Lenders. If, in connection with any proposed change, waiver, discharge or termination of the provisions of this Agreement as contemplated by Section 11.02(b), the consent of the Required Lenders or Supermajority Lenders, as applicable, is obtained but the consent of one or more of such other Lenders whose consent is required is not obtained, then the Borrowers shall have the right to replace all, but not less than all, of such non-consenting Lender or Lenders (so long as all non-consenting Lenders are so replaced) with one or more persons pursuant to Section 2.16 so long as at the time of such replacement each such new Lender consents to the proposed change, waiver, discharge or termination.
(a) Costs and Expenses. The Borrowers and Guarantors shall pay (i) all reasonable out-of-pocket expenses incurred by the Administrative Agents, the Collateral Agents and their respective Affiliates (including the reasonable fees, charges and disbursements of counsel for the Administrative Agents and/or the Collateral Agents) in connection with the syndication of the credit facilities provided for herein (including the obtaining and maintaining of CUSIP numbers for the Loans), the preparation, negotiation, execution, delivery and administration of this Agreement and the other Loan Documents, including any Inventory Appraisal, or in connection with any amendments, modifications or waivers of the provisions hereof or thereof (whether or not the transactions contemplated hereby or thereby shall be consummated), including in connection with post-closing searches to confirm that security filings and recordations have been properly made, (ii) all reasonable out-of-pocket expenses incurred by the Issuing Banks in connection with the issuance, amendment, renewal or extension of any Letter of Credit or any demand for payment thereunder, (iii) all reasonable out-of-pocket expenses incurred by the Administrative Agents, the Collateral Agents, any Lender or the Issuing Banks (including the reasonable fees, charges and disbursements of any counsel for the Administrative Agents, the Collateral Agents, any Lender or the Issuing Banks), in connection with the enforcement or protection or attempted enforcement or protection of its rights (A) in connection with this Agreement and the other Loan Documents, including its rights under this Section 11.03, or (B) in preserving and protecting, or attempting to preserve or protect its interests in the Collateral, or (C) in connection with the Loans made or Letters of Credit issued hereunder, including all such out-of-pocket expenses incurred during any workout, restructuring or negotiations in respect of such Loans or Letters of Credit and (iv) all documentary and similar taxes and charges in respect of the Loan Documents.
(b) Indemnification by Borrower. Each of the Borrowers and Guarantors shall indemnify the Administrative Agents (and any sub-agent thereof), the Collateral Agents (and any sub-agent thereof) each Lender and the Issuing Bank, and each Related Party of any of the foregoing persons (each such person being called an “Indemnitee”) against, and hold each Indemnitee harmless from, any and all losses, claims, damages, liabilities and related expenses (including the fees, charges and disbursements of any counsel for any Indemnitee) incurred by any Indemnitee or asserted against any Indemnitee by any third party or by the Borrowers or any other Loan Party arising out of, in connection with, or as a result of (i) the execution or delivery
of this Agreement, the Original Credit Agreement, any other Loan Document or any other Prior Loan Document or any agreement or instrument contemplated hereby or thereby, the performance by the parties hereto of their respective obligations hereunder or thereunder or the consummation of the transactions contemplated hereby or thereby, (ii) any Loan or Letter of Credit or the use or proposed use of the proceeds therefrom (including any refusal by the Issuing Bank to honor a demand for payment under a Letter of Credit if the documents presented in connection with such demand do not strictly comply with the terms of such Letter of Credit), (iii) any actual or alleged presence or Release or threatened Release of Hazardous Materials on, at, under or from any property owned, leased or operated by any Company at any time, or any Environmental Claim related in any way to any Company, or (iv) any actual or prospective claim, litigation, investigation or proceeding relating to any of the foregoing, whether based on contract, tort or any other theory, whether brought by a third party or by the Borrowers or any other Loan Party, and regardless of whether any Indemnitee is a party thereto; provided that such indemnity shall not, as to any Indemnitee, be available to the extent that such losses, claims, damages, liabilities or related expenses (x) are determined by a court of competent jurisdiction by final and nonappealable judgment to have resulted from the gross negligence or willful misconduct of such Indemnitee or (y) result from a claim brought by the Borrowers or any other Loan Party against an Indemnitee for breach in bad faith of such Indemnitee’s obligations hereunder or under any other Loan Document, if the Borrowers or such Loan Party has obtained a final and nonappealable judgment in its favor on such claim as determined by a court of competent jurisdiction.
(c) Reimbursement by Lenders. To the extent that any Borrowers or Guarantors for any reason fails to indefeasibly pay any amount required under paragraph (a) or (b) of this Section 11.03 to be paid by it to the Administrative Agents (or any sub-agent thereof), the Collateral Agents, the Issuing Bank, the Swingline Lenders or any Related Party of any of the foregoing, each applicable Lender severally agrees to pay to the Administrative Agent (or any such sub-agent), the Collateral Agents (or any sub-agent thereof), the Issuing Bank, the Swingline Lenders or such Related Party, as the case may be, such Lender’s pro rata share (determined as of the time that the applicable unreimbursed expense or indemnity payment is sought) of such unpaid amount; provided that the unreimbursed expense or indemnified loss, claim, damage, liability or related expense, as the case may be, was incurred by or asserted against the Administrative Agent (or any such sub-agent), the Collateral Agents (or any sub-agent thereof), the Swingline Lenders or the Issuing Bank in its capacity as such, or against any Related Party of any of the foregoing acting for the Administrative Agent (or any such sub-agent), the Collateral Agents (or any sub-agent thereof), the Swingline Lenders or Issuing Bank in connection with such capacity. The obligations of the Lenders under this paragraph (c) are subject to the provisions of Section 2.14. For purposes hereof, a Lender’s “pro rata share” shall be determined based upon its share of the sum of the total Revolving Exposure and unused Commitments at the time.
(d) Waiver of Consequential Damages, Etc. To the fullest extent permitted by applicable Requirements of Law, no Loan Party shall assert, and each Loan Party hereby waives, any claim against any Indemnitee, on any theory of liability, for special, indirect, consequential or punitive damages (as opposed to direct or actual damages) arising out of, in connection with, or as a result of, this Agreement, any other Loan Document or any agreement or instrument contemplated hereby, the transactions contemplated hereby or thereby, any Loan or Letter of
Credit or the use of the proceeds thereof. No Indemnitee referred to in paragraph (b) above shall be liable for any damages arising from the use by unintended recipients of any information or other materials distributed by it through telecommunications, electronic or other information transmission systems in connection with this Agreement or the other Loan Documents or the transactions contemplated hereby or thereby.
(e) Payments. All amounts due under this Section shall be payable not later than three (3) Business Days after demand therefor.
(a) Successors and Assigns Generally. The provisions of this Agreement shall be binding upon and inure to the benefit of the parties hereto and their respective successors and assigns permitted hereby, except that the Borrowers may not assign or otherwise transfer any of their rights or obligations hereunder without the prior written consent of the Administrative Agent, the Collateral Agents, the Issuing Bank, the Swingline Lenders and each Lender and no Lender may assign or otherwise transfer any of its rights or obligations hereunder except (i) to an Eligible Assignee in accordance with the provisions of paragraph (b) of this Section 11.04, (ii) by way of participation in accordance with the provisions of paragraph (d) of this Section 11.04 or (iii) by way of pledge or assignment of a security interest subject to the restrictions of paragraph (f) of this Section (and any other attempted assignment or transfer by Borrower or any Lender shall be null and void). Nothing in this Agreement, expressed or implied, shall be construed to confer upon any person (other than the parties hereto, their respective successors and assigns permitted hereby, Participants to the extent provided in paragraph (d) of this Section and, to the extent expressly contemplated hereby, the other Indemnitees) any legal or equitable right, remedy or claim under or by reason of this Agreement.
(b) Assignments by Lenders. Any Lender may at any time assign to one or more Eligible Assignees all or a portion of its rights and obligations under this Agreement (including all or a portion of its Commitment and the Loans at the time owing to it); provided that
(i) except in the case of any assignment made in connection with the syndication of the Commitment and Loans by UBS or an assignment of the entire remaining amount of the assigning Lender’s Commitment and the Loans at the time owing to it or in the case of an assignment to a Lender or an Affiliate of a Lender or an Approved Fund with respect to a Lender, the aggregate amount of the Commitment (which for this purpose includes Loans outstanding thereunder) or, if the applicable Commitment is not then in effect, the principal outstanding balance of the Loans of the assigning Lender subject to each such assignment (determined as of the date the Assignment and Assumption with respect to such assignment is delivered to the Administrative Agent or, if “Trade Date” is specified in the Assignment and Assumption, as of the Trade Date) shall not be less than $5.0 million, in the case of any assignment in respect of Revolving Loans and/or Revolving Commitments, unless the applicable Administrative Agent and, so long as no Default has occurred and is continuing, the Borrowers otherwise consent (each such consent not to be unreasonably withheld or delayed);
(ii) each partial assignment shall be made as an assignment of a proportionate part of all the assigning Lender’s rights and obligations under this Agreement with respect to the Loan or the Commitment assigned, except that this clause (ii) shall not permit any Lender to assign all or a portion of its rights and obligations among separate tranches or to separate Lenders on a non-pro rata basis;
(iii) after the Effective Date (as defined in the related Assignment and Assumption), the assigning Lender shall hold the same percentage of Canadian Revolving Loans as compared to Revolving Loans as such Lender held prior to the such Effective Date;
(iv) the parties to each assignment shall execute and deliver to the applicable Administrative Agent an Assignment and Assumption, together with the Assigning Lender’s original Note (if any) and a processing and recordation fee of $3,500, and the Eligible Assignee, if it shall not be a Lender, shall deliver to the applicable Administrative Agent an Administrative Questionnaire; and
(v) in the case of an assignment of rights and obligations hereunder by a Canadian Lender, such Lender shall use its commercially reasonable efforts to assign such rights and obligations to an Eligible Assignee which qualifies as an Eligible Canadian Lender.
(c) Register. The applicable Administrative Agent, acting solely for this purpose as an agent of the Borrowers, shall maintain at one of its offices, a copy of each Assignment and Assumption delivered to it and a register for the recordation of the names and addresses of the Lenders, and the Commitments of, and principal amounts of the Loans and LC Disbursements owing to, each Lender pursuant to the terms hereof from time to time (the “Register”). The entries in the Register shall be conclusive, and the Borrowers, the Administrative Agents, the Issuing Bank and the Lenders may treat each person whose name is recorded in the Register pursuant to the terms hereof as a Lender hereunder for all purposes of this Agreement, notwithstanding notice to the contrary. The Register shall be available for inspection by the
Borrowers, the Issuing Bank, the Collateral Agents, the Swingline Lenders and any Lender (with respect to its own interest only), at any reasonable time and from time to time upon reasonable prior notice.
(d) Participations. Any Lender may at any time, without the consent of, or notice to, the Borrowers, the Administrative Agents, the Issuing Bank or the Swingline Lenders sell participations to any person (other than a natural person or the Borrowers or any of the Borrowers’ Affiliates or Subsidiaries) (each, a “Participant”) in all or a portion of such Lender’s rights and/or obligations under this Agreement (including all or a portion of its Commitment and/or the Loans owing to it); provided that (i) such Lender’s obligations under this Agreement shall remain unchanged, (ii) such Lender shall remain solely responsible to the other parties hereto for the performance of such obligations and (iii) the Borrowers, the Administrative Agents and the Lenders and Issuing Bank shall continue to deal solely and directly with such Lender in connection with such Lender’s rights and obligations under this Agreement.
(e) Limitations on Participant Rights. A Participant shall not be entitled to receive any greater payment under Section 2.12, Section 2.13 and Section 2.15 than the applicable Lender would have been entitled to receive with respect to the participation sold to such Participant, unless the sale of the participation to such Participant is made with the Borrowers’ prior written consent.
(f) Certain Pledges. Any Lender may at any time pledge or assign a security interest in all or any portion of its rights under this Agreement to secure obligations of such Lender, including any pledge or assignment to secure obligations to a Federal Reserve Bank; provided that no such pledge or assignment shall release such Lender from any of its obligations hereunder or substitute any such pledgee or assignee for such Lender as a party hereto. In the case of any Lender that is a fund that invests in bank loans, such Lender may, without the consent of the Borrowers or the Administrative Agents, collaterally assign or pledge all or any portion of its rights under this Agreement, including the Loans and Notes or any other instrument evidencing its rights as a Lender under this Agreement, to any holder of, trustee for, or any other representative of holders of, obligations owed or securities issued, by such fund, as security for such obligations or securities.
(a) Counterparts; Integration; Effectiveness. This Agreement may be executed in counterparts (and by different parties hereto in different counterparts), each of which shall constitute an original, but all of which when taken together shall constitute a single contract. This Agreement and the other Loan Documents, and any separate letter agreements with respect to fees payable to the Administrative Agent, constitute the entire contract among the parties relating to the subject matter hereof and supersede any and all previous agreements and understandings, oral or written, relating to the subject matter hereof. Except as provided in Section 4.01, this Agreement shall become effective when it shall have been executed by the Administrative Agent and when the Administrative Agent shall have received counterparts hereof that, when taken together, bear the signatures of each of the other parties hereto. Delivery of an executed counterpart of a signature page of this Agreement by telecopier shall be effective as delivery of a manually executed counterpart of this Agreement.
(b) Electronic Execution of Assignments. The words “execution,” “signed,” “signature,” and words of like import in any Assignment and Assumption shall be deemed to include electronic signatures or the keeping of records in electronic form, each of which shall be of the same legal effect, validity or enforceability as a manually executed signature or the use of a paper-based recordkeeping system, as the case may be, to the extent and as provided for in any applicable Requirement of Law, including the Federal Electronic Signatures in Global and National Commerce Act, the New York State Electronic Signatures and Records Act, or any other similar state laws based on the Uniform Electronic Transactions Act.
(a) Governing Law. This Agreement shall be construed in accordance with and governed by the law of the State of New York, without regard to conflicts of law principles that would require the application of the laws of another jurisdiction.
(b) Submission to Jurisdiction. Each Loan Party hereby irrevocably and unconditionally submits, for itself and its property, to the nonexclusive jurisdiction of the Supreme Court of the State of New York sitting in New York County and of the United States District Court of the Southern District of New York, and any appellate court from any thereof and any court of competent jurisdiction in Ontario, Canada, in any action or proceeding arising out of or relating to any Loan Document, or for recognition or enforcement of any judgment, and each of the parties hereto hereby irrevocably and unconditionally agrees that all claims in respect of any such action or proceeding may be heard and determined in such New York State court, each Ontario court or, to the fullest extent permitted by applicable law, in such Federal court. Each of the parties hereto agrees that a final judgment in any such action or proceeding shall be conclusive and may be enforced in other jurisdictions by suit on the judgment or in any other manner provided by law. Nothing in this Agreement or any other Loan Document shall affect any right that the Administrative Agents, the Issuing Bank or any Lender may otherwise have to bring any action or proceeding relating to this Agreement or any other Loan Document against any Loan Party or its properties in the courts of any jurisdiction.
(c) Waiver of Venue. Each Loan Party hereby irrevocably and unconditionally waives, to the fullest extent permitted by applicable Requirements of Law, any objection which it may now or hereafter have to the laying of venue of any suit, action or proceeding arising out of or relating to this Agreement or any other Loan Document in any court referred to in Section 11.09(b). Each of the parties hereto hereby irrevocably waives, to the fullest extent permitted by
applicable Requirements of Law, the defense of an inconvenient forum to the maintenance of such action or proceeding in any such court.
(d) Service of Process. Each party hereto irrevocably consents to service of process in any action or proceeding arising out of or relating to any Loan Document, in the manner provided for notices (other than telecopier) in Section 11.01. Nothing in this Agreement or any other Loan Document will affect the right of any party hereto to serve process in any other manner permitted by applicable Requirements of Law.
(a) any bankruptcy, insolvency, reorganization, arrangement, readjustment, composition, liquidation or the like of any Loan Party;
(b) any lack of validity or enforceability of any Loan Document or any other agreement or instrument relating thereto against any Loan Party;
(c) any change in the time, manner or place of payment of, or in any other term of, all or any of the Obligations, or any other amendment or waiver of or any consent to any departure from any Loan Document or any other agreement or instrument relating thereto;
(d) any exchange, release or non-perfection of any other Collateral, or any release or amendment or waiver of or consent to any departure from any guarantee, for all or any of the Obligations;
(e) any exercise or non-exercise, or any waiver of any right, remedy, power or privilege under or in respect hereof or any Loan Document; or
(f) any other circumstances which might otherwise constitute a defense available to, or a discharge of, the Loan Parties.
(a) The Borrowers’ obligation hereunder and under the other Loan Documents to make payments in the applicable Approved Currency (pursuant to such obligation, the “Obligation Currency”) shall not be discharged or satisfied by any tender or recovery pursuant to any judgment expressed in or converted into any currency other than the Obligation Currency, except to the extent that such tender or recovery results in the effective receipt by the applicable Administrative Agent or the respective Lender of the full amount of the Obligation Currency expressed to be payable to such Administrative Agent or such Lender under this Agreement or the other Loan Documents. If, for the purpose of obtaining or enforcing judgment against the Borrowers in any court or in any jurisdiction, it becomes necessary to convert into or from any currency other than the Obligation Currency (such other currency being hereinafter referred to as the “Judgment Currency”) an amount due in the Obligation Currency, the conversion shall be made at the Dollar Equivalent, and in the case of other currencies, the rate of exchange (as quoted by such Administrative Agent or if such Administrative Agent does not quote a rate of exchange on such currency, by a known dealer in such currency designated by such Administrative Agent) determined, in each case, as of the Business Day immediately preceding the day on which the judgment is given (such Business Day being hereinafter referred to as the “Judgment Currency Conversion Date”).
(b) If there is a change in the rate of exchange prevailing between the Judgment Currency Conversion Date and the date of actual payment of the amount due, the Borrowers covenant and agree to pay, or cause to be paid, such additional amounts, if any (but in any event not a lesser amount) as may be necessary to ensure that the amount paid in the Judgment Currency, when converted at the rate of exchange prevailing on the date of payment, will produce the amount of the Obligation Currency which could have been purchased with the amount of Judgment Currency stipulated in the judgment or judicial award at the rate of exchange prevailing on the Judgment Currency Conversion Date.
(c) For purposes of determining the Dollar Equivalent or any other rate of exchange for this Section 11.18, such amounts shall include any premium and costs payable in connection with the purchase of the Obligation Currency.
(a) All funds to be made available to the applicable Administrative Agent pursuant to this Agreement in Canadian dollars shall be made available to such Administrative Agent in immediately available, freely transferable, cleared funds to such account with such bank in such principal financial center in Canada as such Administrative Agent shall from time to time nominate for this purpose.
(b) In relation to the payment of any amount denominated in Canadian dollars, no Administrative Agent shall be liable to the Borrowers or any of the Lenders for any delay, or the consequences of any delay, in the crediting to any account of any amount required by this Agreement to be paid by such Administrative Agent if such Administrative Agent shall have taken all relevant and necessary steps to achieve, on the date required by this Agreement, the payment of such amount in immediately available, freely transferable, cleared funds (in Canadian dollars) to the account with the bank in the principal financial center in Canada which the Borrowers or, as the case may be, any Lender shall have specified for such purpose. In this Section 11.19(b), “all relevant steps” means all such steps as may be prescribed from time to time by the regulations or operating procedures of such clearing or settlement system as such Administrative Agent may from time to time determine for the purpose of clearing or settling payments of Canadian dollars. Furthermore, and without limiting the foregoing, such Administrative Agent shall not be liable to the Borrowers or any of the Lenders with respect to the foregoing matters in the absence of its gross negligence or willful misconduct (as determined by a court of competent jurisdiction in a final and non-appealable decision or pursuant to a binding arbitration award or as otherwise agreed in writing by the affected parties).
ARTICLE XII.
AMENDMENT AND RESTATEMENT OF ORIGINAL CREDIT AGREEMENT
(a) The Original Credit Agreement shall be deemed to be amended and restated in its entirety in the form of this Agreement.
(b) All Existing Obligations (including, without limitation, all Letters of Credit issued pursuant to the Original Credit Agreement) shall in all respects be continuing after the Closing Date and shall be deemed to be Obligations governed by this Agreement.
(c) This Agreement shall not be deemed to evidence or result in a novation, extinguishment, discharge or repayment of the Existing Obligations, but the Existing Obligations under the Original Credit Agreement and the Liens securing payment and performance thereof shall in all respects be continuing as Obligations under this Agreement and as Liens securing payment and performance thereof.
(d) All references in the Loan Documents executed in connection with the Original Credit Agreement, whether on the Original Closing Date or at any time thereafter but prior to the Closing Date (collectively, the “Prior Loan Documents”) to (i) the Original Credit Agreement or the “Credit Agreement” shall be deemed to include references to this Agreement, as amended, restated, supplemented or otherwise modified from time to time, and (ii) the “Lenders” or a “Lender”, the “Administrative Agent”, the “Administrative Agents”, the “Collateral Agent” or the “Collateral Agents” shall mean such terms as defined in this Agreement. The Prior Loan Documents that are not superseded by corresponding Loan Documents executed and delivered in connection with this Agreement shall remain in full force and effect.
(e) Each Loan Party hereby acknowledges and agrees that each of the Prior Loan Documents to which such Loan Party is a party remains in full force and effect and hereby ratifies and reaffirms all of its respective repayment and performance obligations, contingent or otherwise, under each of the Prior Loan Documents to which it is a party and, to the extent such Loan Party granted Liens on or security interests in any of its properties pursuant to any of the Prior Loan Documents as security for the Existing Obligations, such Loan Party, as the case may be, hereby ratifies and reaffirms such grant of security and confirms and agrees that such Liens and security interests secure all of the Obligations under this Agreement and remain in full force and effect after giving effect to this Agreement. The execution, delivery and effectiveness of this Agreement shall not operate as a waiver of any right, power or remedy of any of the Agents or Lenders under the Original Credit Agreement or any Prior Loan Document, nor constitute a waiver of any provision of the Original Credit Agreement or any Prior Loan Document, except as specifically set forth therein.
(f) Each Loan Party hereby acknowledges and agrees that each of the representations and warranties contained in the Original Credit Agreement is true and correct in all material
respects on and as of the Closing Date as if made on the Closing Date, except to the extent that such representations and warranties expressly relate to an earlier date.
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