Document:

Exhibit 10.1

 

 

 

 

THIRD AMENDED AND RESTATED CREDIT AGREEMENT

 

dated as of

 

December 23, 2011

 

among

 

STEWART & STEVENSON LLC,
 STEWART & STEVENSON DISTRIBUTOR HOLDINGS LLC,
 STEWART & STEVENSON POWER PRODUCTS LLC,
 STEWART & STEVENSON PETROLEUM SERVICES LLC,
 STEWART & STEVENSON FUNDING CORP.,
 STEWART & STEVENSON MATERIAL HANDLING LLC,

STEWART & STEVENSON MANUFACTURING TECHNOLOGIES LLC,

EMDSI - HUNT POWER, L.L.C.,
 as US Borrowers,

 

STEWART & STEVENSON CANADA INC.,

as a Canadian Borrower,

 

The Lenders Party Hereto,

 

JPMORGAN CHASE BANK, N.A.,
 as Administrative Agent and US Collateral Agent

 

JPMORGAN CHASE BANK, N.A., TORONTO BRANCH,
 as Canadian Administrative Agent and as Canadian Collateral Agent

 

and

 

JPMORGAN CHASE BANK, N.A.,
 as Export-Related Lender

 

 

J.P. MORGAN SECURITIES LLC,

 

as Sole Bookrunner and Sole Lead Arranger

 

	
 
    

 

CHASE BUSINESS CREDIT

 

 

 

 

TABLE OF CONTENTS

 

	
 
    	
 
    	
Page No.
    
	
 
    	
 
    	
 
    
	
ARTICLE I
    
	
DEFINITIONS
    
	
 
    
	
Section 1.1
    	
Defined Terms
    	
2
    
	
Section 1.2
    	
Classification of Loans and Borrowings
    	
56
    
	
Section 1.3
    	
Terms Generally
    	
56
    
	
Section 1.4
    	
Accounting Terms; GAAP
    	
57
    
	
 
    	
 
    	
 
    
	
ARTICLE II
    
	
THE   CREDITS
    
	
 
    
	
Section 2.1
    	
Commitments
    	
57
    
	
Section 2.2
    	
Loans and Borrowings
    	
57
    
	
Section 2.3
    	
Requests for Borrowings
    	
59
    
	
Section 2.4
    	
Protective Advances
    	
60
    
	
Section 2.5
    	
Swingline Loans and Overadvances
    	
61
    
	
Section 2.6
    	
Letters of Credit
    	
65
    
	
Section 2.7
    	
Funding of Borrowings
    	
69
    
	
Section 2.8
    	
Interest Elections
    	
70
    
	
Section 2.9
    	
Termination and Reduction of Commitments
    	
72
    
	
Section 2.10
    	
Repayment and Amortization of Loans; Evidence of Debt
    	
73
    
	
Section 2.11
    	
Prepayment of Loans
    	
75
    
	
Section 2.12
    	
Fees
    	
77
    
	
Section 2.13
    	
Interest
    	
79
    
	
Section 2.14
    	
Bankers’ Acceptances
    	
80
    
	
Section 2.15
    	
Alternate Rate of Interest
    	
82
    
	
Section 2.16
    	
Increased Costs
    	
82
    
	
Section 2.17
    	
Break Funding Payments
    	
84
    
	
Section 2.18
    	
Taxes
    	
84
    
	
Section 2.19
    	
Payments Generally; Allocation of Proceeds; Sharing of   Set-offs
    	
88
    
	
Section 2.20
    	
Mitigation Obligations; Replacement of Lenders
    	
92
    
	
Section 2.21
    	
Returned Payments
    	
93
    
	
Section 2.22
    	
Borrowings of Revolving Loans to Satisfy Secured Obligations
    	
93
    
	
Section 2.23
    	
Joint and Several Liability; Rights of Contribution
    	
94
    
	
Section 2.24
    	
Increase of Commitments
    	
96
    
	
Section 2.25
    	
Illegality
    	
97
    
	
Section 2.26
    	
Senior Notes
    	
98
    
	
Section 2.27
    	
Defaulting Lenders
    	
99
    
	
Section 2.28
    	
Fixed Asset Component
    	
101
    
	
 
    	
 
    	
 
    
	
ARTICLE III
    
	
REPRESENTATIONS   AND WARRANTIES
    
	
 
    
	
Section 3.1
    	
Organization; Powers
    	
101
    
	
Section 3.2
    	
Authorization; Enforceability
    	
101
    
	
Section 3.3
    	
Governmental Approvals; No Conflicts
    	
101
    
	
Section 3.4
    	
Financial Condition; No Material Adverse Change
    	
102
    

 

i

 

	
Section 3.5
    	
Properties
    	
102
    
	
Section 3.6
    	
Litigation and Environmental Matters
    	
103
    
	
Section 3.7
    	
Compliance with Laws and Agreements
    	
103
    
	
Section 3.8
    	
Investment and Holding Company Status
    	
103
    
	
Section 3.9
    	
Taxes
    	
104
    
	
Section 3.10
    	
Employee Benefits
    	
104
    
	
Section 3.11
    	
Disclosure
    	
104
    
	
Section 3.12
    	
Material Agreements
    	
105
    
	
Section 3.13
    	
Solvency
    	
105
    
	
Section 3.14
    	
Insurance
    	
105
    
	
Section 3.15
    	
Capitalization and Subsidiaries
    	
105
    
	
Section 3.16
    	
Security Interest in Collateral
    	
105
    
	
Section 3.17
    	
Labor Disputes
    	
106
    
	
Section 3.18
    	
Affiliate Transactions
    	
106
    
	
Section 3.19
    	
Common Enterprise
    	
106
    
	
Section 3.20
    	
Casualties; Taking of Properties
    	
106
    
	
Section 3.21
    	
Perfection Certificate; Schedules to other Loan Documents
    	
107
    
	
Section 3.22
    	
Existing Indebtedness
    	
107
    
	
Section 3.23
    	
[Intentionally Reserved]
    	
107
    
	
Section 3.24
    	
Deposit Accounts
    	
107
    
	
Section 3.25
    	
Regulation H
    	
107
    
	
Section 3.26
    	
Compliance with Anti-Terrorism and Anti-Money Laundering   Laws and Regulations
    	
107
    
	
 
    	
 
    	
 
    
	
ARTICLE IV
    
	
CONDITIONS
    
	
 
    
	
Section 4.1
    	
Effective Date
    	
108
    
	
Section 4.2
    	
Each Credit Event
    	
111
    
	
 
    	
 
    	
 
    
	
ARTICLE V
    
	
AFFIRMATIVE   COVENANTS
    
	
 
    
	
Section 5.1
    	
Financial Statements; Borrowing Base and Other Information
    	
112
    
	
Section 5.2
    	
Notices of Material Events
    	
116
    
	
Section 5.3
    	
Existence; Conduct of Business
    	
117
    
	
Section 5.4
    	
Payment of Obligations
    	
117
    
	
Section 5.5
    	
Maintenance of Properties
    	
117
    
	
Section 5.6
    	
Books and Records; Inspection Rights
    	
117
    
	
Section 5.7
    	
Compliance with Laws
    	
117
    
	
Section 5.8
    	
Use of Proceeds
    	
118
    
	
Section 5.9
    	
Insurance
    	
118
    
	
Section 5.10
    	
Casualty and Condemnation
    	
118
    
	
Section 5.11
    	
Field Examinations
    	
118
    
	
Section 5.12
    	
Appraisals
    	
119
    
	
Section 5.13
    	
Depository Bank
    	
119
    
	
Section 5.14
    	
Additional Collateral; Further Assurances
    	
119
    
	
Section 5.15
    	
Post-closing Deliveries
    	
121
    

 

ii

 

	
ARTICLE VI
    
	
NEGATIVE   COVENANTS
    
	
 
    
	
Section 6.1
    	
Indebtedness
    	
122
    
	
Section 6.2
    	
Liens
    	
124
    
	
Section 6.3
    	
Fundamental Changes
    	
125
    
	
Section 6.4
    	
Investments, Loans, Advances, Guarantees and Acquisitions
    	
125
    
	
Section 6.5
    	
Asset Sales
    	
127
    
	
Section 6.6
    	
Sale and Leaseback Transactions
    	
128
    
	
Section 6.7
    	
Swap Agreements
    	
128
    
	
Section 6.8
    	
Restricted Payments; Certain Payments of Indebtedness
    	
128
    
	
Section 6.9
    	
Transactions with Affiliates
    	
130
    
	
Section 6.10
    	
Restrictive Agreements
    	
130
    
	
Section 6.11
    	
Amendment of Material Documents
    	
131
    
	
Section 6.12
    	
Operating Leases
    	
131
    
	
Section 6.13
    	
Fixed Charge Coverage Ratio
    	
131
    
	
 
    	
 
    	
 
    
	
ARTICLE VII
    
	
EVENTS OF   DEFAULT
    
	
 
    
	
ARTICLE VIII
    
	
THE   AGENTS; INTERCREDITOR ISSUES
    
	
 
    
	
Section 8.1
    	
Appointment of Agents
    	
134
    
	
Section 8.2
    	
Limitation of Duties of Agents
    	
135
    
	
Section 8.3
    	
Reliance by Agents
    	
135
    
	
Section 8.4
    	
Sub-Agents
    	
136
    
	
Section 8.5
    	
Resignation of Agents; Successor Agents
    	
136
    
	
Section 8.6
    	
Lender Acknowledgments
    	
136
    
	
Section 8.7
    	
Collateral Priority
    	
137
    
	
Section 8.8
    	
Allocation of Proceeds of Collateral
    	
138
    
	
Section 8.9
    	
Commingling of Inventory
    	
138
    
	
Section 8.10
    	
Export-Related Loan Agreement
    	
138
    
	
Section 8.11
    	
Syndication Agent Title
    	
139
    
	
 
    	
 
    	
 
    
	
ARTICLE IX
    
	
MISCELLANEOUS
    
	
 
    
	
Section 9.1
    	
Notices
    	
139
    
	
Section 9.2
    	
Waivers; Amendments
    	
140
    
	
Section 9.3
    	
Expenses; Indemnity; Damage Waiver
    	
143
    
	
Section 9.4
    	
Successors and Assigns
    	
145
    
	
Section 9.5
    	
Survival
    	
148
    
	
Section 9.6
    	
Counterparts; Integration; Effectiveness
    	
149
    
	
Section 9.7
    	
Severability
    	
149
    
	
Section 9.8
    	
Right of Setoff
    	
149
    
	
Section 9.9
    	
Governing Law; Jurisdiction; Consent to Service of Process
    	
150
    
	
Section 9.10
    	
WAIVER OF JURY TRIAL
    	
150
    
	
Section 9.11
    	
Judgment Currency
    	
151
    
	
Section 9.12
    	
Headings
    	
151
    
	
Section 9.13
    	
Confidentiality
    	
151
    

 

iii

 

	
Section 9.14
    	
Several Obligations; Nonreliance; Violation of Law
    	
152
    
	
Section 9.15
    	
USA Patriot Act
    	
152
    
	
Section 9.16
    	
Disclosure
    	
152
    
	
Section 9.17
    	
Appointment for Perfection
    	
152
    
	
Section 9.18
    	
Interest Rate Limitation
    	
153
    
	
Section 9.19
    	
No Financial Assistance by Canadian Loan Parties
    	
153
    
	
Section 9.20
    	
Export-Related Financing Documents
    	
153
    
	
 
    	
 
    	
 
    
	
ARTICLE X
    
	
LOAN   GUARANTY
    
	
 
    
	
Section 10.1
    	
Guaranty
    	
153
    
	
Section 10.2
    	
Limitation
    	
154
    
	
Section 10.3
    	
Guaranty of Payment
    	
154
    
	
Section 10.4
    	
No Discharge or Diminishment of Loan Guaranty
    	
154
    
	
Section 10.5
    	
Defenses Waived
    	
155
    
	
Section 10.6
    	
Rights of Subrogation
    	
155
    
	
Section 10.7
    	
Reinstatement; Stay of Acceleration
    	
155
    
	
Section 10.8
    	
Information
    	
156
    
	
Section 10.9
    	
Termination
    	
156
    
	
Section 10.10
    	
Taxes
    	
156
    
	
Section 10.11
    	
Maximum Liability
    	
156
    
	
Section 10.12
    	
Contribution
    	
157
    
	
Section 10.13
    	
Liability Cumulative
    	
157
    
	
 
    	
 
    	
 
    
	
ARTICLE XI
    
	
THE   BORROWER REPRESENTATIVES
    
	
 
    
	
Section 11.1
    	
Appointment; Nature of Relationship
    	
158
    
	
Section 11.2
    	
Powers
    	
158
    
	
Section 11.3
    	
Employment of Agents
    	
158
    
	
Section 11.4
    	
Notices
    	
158
    
	
Section 11.5
    	
Successor Borrower Representative
    	
159
    
	
Section 11.6
    	
Execution of Loan Documents; Borrowing Base Certificates
    	
159
    
	
Section 11.7
    	
Reporting
    	
159
    

 

iv

 

	
EXHIBITS
    	
 
    	
 
    
	
 
    	
 
    	
 
    
	
Exhibit A
    	
Assignment   and Assumption
    	
 
    
	
Exhibit B
    	
Opinion   of Counsel for the US Borrowers
    	
 
    
	
Exhibit C
    	
US   Borrowing Base Certificate
    	
 
    
	
Exhibit D
    	
Canadian   Borrowing Base Certificate
    	
 
    
	
Exhibit E
    	
Compliance   Certificate
    	
 
    
	
Exhibit F
    	
Joinder   Agreement
    	
 
    
	
Exhibit G
    	
Commitment   Increase Agreement
    	
 
    
	
Exhibit H
    	
New   Lender Agreement
    	
 
    
	
Exhibit I
    	
Perfection   Certificate Update
    	
 
    
	
Exhibit J
    	
Certificate   of Effectiveness
    	
 
    
	
Exhibit K
    	
Form of   B/A Equivalent Note
    	
 
    
	
Exhibit L
    	
Participation   Agreement
    	
 
    
	
Exhibit M
    	
Form of   U.S. Tax Certificate for Non-U.S. Lenders That Are Not Partnerships)
    	
 
    
	
Exhibit N
    	
Form of   U.S. Tax Certificate for Non-U.S. Lenders That Are Partnerships)
    	
 
    
	
 
    	
 
    	
 
    
	
SCHEDULES
    	
 
    	
 
    
	
 
    	
 
    	
 
    
	
Commitment Schedule
    	
 
    
	
 
    	
 
    
	
Schedule   3.5
    	
–
    	
Properties
    	
 
    
	
Schedule   3.6
    	
–
    	
Disclosed   Matters
    	
 
    
	
Schedule   3.12
    	
–
    	
Material   Agreements
    	
 
    
	
Schedule   3.14
    	
–
    	
Insurance
    	
 
    
	
Schedule   3.15
    	
–
    	
Capitalization   and Subsidiaries
    	
 
    
	
Schedule   3.18
    	
–
    	
Affiliate   Transactions
    	
 
    
	
Schedule   3.22
    	
–
    	
Existing   Indebtedness
    	
 
    
	
Schedule   3.24
    	
–
    	
Deposit   Accounts
    	
 
    
	
Schedule   6.1
    	
–
    	
Indebtedness
    	
 
    
	
Schedule   6.2
    	
–
    	
Liens
    	
 
    
	
Schedule   6.4
    	
–
    	
Investments
    	
 
    
	
Schedule   6.10
    	
–
    	
Restrictions   and Conditions
    	
 
    

 

v

 

LIST OF DEFINED TERMS

 

	
 
    	
Page No.
    
	
$
    	
21
    
	
ABR
    	
2
    
	
ABR Spread
    	
4
    
	
Acceptance Fee
    	
3
    
	
Account
    	
3
    
	
Account Debtor
    	
3
    
	
Acquisition
    	
3
    
	
Act
    	
151
    
	
Activation Period
    	
3
    
	
Adjusted LIBO Rate
    	
3
    
	
Administrative Agent
    	
3
    
	
Administrative Questionnaire
    	
3
    
	
Affiliate
    	
3
    
	
Agents
    	
3
    
	
Aggregate Canadian Credit Exposure
    	
4
    
	
Aggregate US Credit Exposure
    	
4
    
	
Agreement
    	
1
    
	
Alternate Base Rate
    	
4
    
	
Ansary Related Parties
    	
4
    
	
Applicable Percentage
    	
4
    
	
Applicable Period
    	
5
    
	
Applicable Rate
    	
4
    
	
Appraised Value
    	
6
    
	
Approved Fund
    	
145
    
	
asset
    	
56
    
	
Assignment and Assumption
    	
6
    
	
Availability
    	
6
    
	
Availability Block
    	
98
    
	
Availability Period
    	
6
    
	
Available Canadian Revolving Commitment
    	
6
    
	
Available US Revolving Commitment
    	
6
    
	
Average Excess Availability
    	
6
    
	
B/A
    	
6
    
	
B/A Borrowing
    	
56
    
	
B/A Cover
    	
6
    
	
B/A Equivalent Note
    	
80
    
	
B/A Loan
    	
7
    
	
B/A Spread
    	
4
    
	
Banking Services
    	
7
    
	
Banking Services Obligations
    	
7
    
	
Banking Services Reserves
    	
7
    
	
Bankruptcy Event
    	
7
    
	
Base Value
    	
7
    
	
Beneficially Own
    	
16
    

 

vi

 

	
Board
    	
7
    
	
Borrower
    	
1
    
	
Borrower Representative
    	
8, 19
    
	
Borrower Representative Canada
    	
157
    
	
Borrower Representative US
    	
157
    
	
Borrower Representatives
    	
8, 19
    
	
Borrowers
    	
1
    
	
Borrowing
    	
8
    
	
Borrowing Base Reserves
    	
8
    
	
Borrowing Request
    	
8
    
	
Business Day
    	
8
    
	
C$ Denominated Loan
    	
8
    
	
C$
    	
8
    
	
Canadian Administrative Agent
    	
8
    
	
Canadian Administrative Agent Overline
    	
7, 9, 75
    
	
Canadian Availability
    	
9
    
	
Canadian Borrower or Canadian Borrowers
    	
9
    
	
Canadian Borrowing Base
    	
9
    
	
Canadian Borrowing Base Certificate
    	
11
    
	
Canadian Collateral Agent
    	
11
    
	
Canadian Commitment
    	
11
    
	
Canadian Controlled Disbursement Account
    	
11
    
	
Canadian Credit Exposure
    	
11
    
	
Canadian Employee Funding Liability Reserve
    	
12
    
	
Canadian Fixed Asset Amortization Amount
    	
12
    
	
Canadian Fixed   Asset Component
    	
12
    
	
Canadian Fixed Asset Component Limit
    	
12
    
	
Canadian Fixed Asset Component Limit Notice
    	
12, 13
    
	
Canadian Funding Account
    	
108
    
	
Canadian Inventory Limit
    	
13
    
	
Canadian Lender
    	
13
    
	
Canadian Loan Parties
    	
13
    
	
Canadian Loans
    	
13
    
	
Canadian Overadvances
    	
63
    
	
Canadian Parts Inventory Limit
    	
13
    
	
Canadian Pension Plan
    	
13
    
	
Canadian Prime Rate
    	
13
    
	
Canadian Prime Rate Loans
    	
14
    
	
Canadian Prime Rate Spread
    	
4
    
	
Canadian Priority Claims Reserve
    	
14
    
	
Canadian Protective Advances
    	
60
    
	
Canadian Revolving Commitment
    	
14
    
	
Canadian Revolving Exposure
    	
14
    
	
Canadian Revolving Loan
    	
14
    
	
Canadian Secured Obligations
    	
14
    
	
Canadian Security Agreement
    	
14
    

 

vii

 

	
Canadian Settlement Date
    	
15
    
	
Canadian Subsidiary
    	
15
    
	
Capital Expenditures
    	
15
    
	
Capital Lease Obligations
    	
15
    
	
CDOR Rate
    	
15
    
	
Certificate of Effectiveness
    	
16
    
	
Change in Control
    	
16
    
	
Change in Law
    	
16
    
	
Charges
    	
152
    
	
Chase
    	
17
    
	
Chase Canada
    	
17
    
	
Class
    	
17
    
	
Code
    	
17
    
	
Collateral
    	
17
    
	
Collateral Access Agreement
    	
17
    
	
Collateral Documents
    	
17
    
	
Collection Accounts
    	
17
    
	
Commitment
    	
17
    
	
Commitment Fee Rate
    	
17
    
	
Commitment Increase Agreement
    	
18
    
	
Commitment Increase Notice
    	
95
    
	
Commitment Reserves
    	
18
    
	
Commitment Schedule
    	
18
    
	
Commitments
    	
17
    
	
Company
    	
1
    
	
Contract Period
    	
18
    
	
Control
    	
19
    
	
Controlled
    	
19
    
	
Controlling
    	
19
    
	
Credit Agreement
    	
2
    
	
Credit Exposure
    	
19
    
	
Current Financials
    	
19
    
	
Dated Assets
    	
94
    
	
Dated Liabilities
    	
94
    
	
default
    	
132
    
	
Default
    	
19
    
	
Defaulting Lender
    	
19
    
	
Departing Lender
    	
92
    
	
Detroit Diesel
    	
19
    
	
Deutz
    	
20
    
	
Dilution Factors
    	
20
    
	
Dilution Ratio
    	
20
    
	
Dilution Reserve
    	
20
    
	
Disclosed Matters
    	
20
    
	
Discount Proceeds
    	
20
    
	
Discount Rate
    	
20
    

 

viii

 

	
Distribution Division
    	
20
    
	
Document
    	
20
    
	
Dollar Denominated Loans
    	
20
    
	
Dollar Equivalent
    	
21
    
	
Dollars
    	
21
    
	
each Lender
    	
141
    
	
each Lender affected thereby
    	
141
    
	
EBITDA
    	
21
    
	
Effective Date
    	
21
    
	
Eligible Accounts
    	
21
    
	
Eligible Equipment
    	
24
    
	
Eligible Inventory
    	
25
    
	
Eligible Mortgaged Real Property
    	
27
    
	
EMDSI
    	
1, 27
    
	
Environmental Laws
    	
27
    
	
Environmental Liability
    	
28
    
	
Equity Interests
    	
28
    
	
ERISA
    	
28
    
	
ERISA Affiliate
    	
28
    
	
ERISA Event
    	
28
    
	
Eurocurrency Liabilities
    	
47
    
	
Eurodollar
    	
28
    
	
Eurodollar Loan
    	
56
    
	
Eurodollar Revolving Loan
    	
56
    
	
Eurodollar Revolving Loan Borrowing
    	
56
    
	
Eurodollar Spread
    	
4
    
	
event of default
    	
132
    
	
Events of Default
    	
130
    
	
Excluded Subsidiary
    	
28
    
	
Excluded Taxes
    	
29
    
	
Ex-Im Bank
    	
29
    
	
Existing Borrowers
    	
1
    
	
Existing Credit Agreement
    	
1
    
	
Existing Loan Documents
    	
2
    
	
Export-Related Accounts Receivable
    	
29
    
	
Export-Related Borrowing Base
    	
29
    
	
Export-Related Borrowing Base Certificate
    	
29
    
	
Export-Related Collection Account
    	
29
    
	
Export-Related Financing Documents
    	
29
    
	
Export-Related General Intangibles
    	
30
    
	
Export-Related Inventory
    	
30
    
	
Export-Related Lender
    	
30
    
	
Export-Related Loan Agreement
    	
30
    
	
Export-Related Obligations
    	
30
    
	
Export-Related Priority Collateral
    	
30
    
	
Export-Related Reserve
    	
30
    

 

ix

 

	
FATCA
    	
30, 86
    
	
Federal Funds Effective Rate
    	
30
    
	
Fee Letter
    	
30
    
	
FEMA
    	
30
    
	
Financial Officer
    	
30
    
	
Fixed Asset Collateral
    	
31
    
	
Fixed Asset Component Limit
    	
31
    
	
Fixed Charge Coverage Ratio
    	
31
    
	
Fixed Charges
    	
31
    
	
Foreign Lender
    	
31
    
	
GAAP
    	
31
    
	
Governmental Authority
    	
31
    
	
Group
    	
16
    
	
Guarantee
    	
31
    
	
Guaranteed Obligations
    	
153
    
	
guarantor
    	
31
    
	
Hazardous Materials
    	
32
    
	
holding company
    	
103
    
	
Hyster
    	
32
    
	
Indebtedness
    	
32
    
	
Indemnified Taxes
    	
32
    
	
Indemnitee
    	
143
    
	
Information
    	
151
    
	
Interest Election Request
    	
32
    
	
Interest Expense
    	
33
    
	
Interest Payment Date
    	
33
    
	
Interest Period
    	
33
    
	
Inventory
    	
33
    
	
Inventory Advance Percentage
    	
33
    
	
Inventory Limit
    	
33
    
	
investment company
    	
103
    
	
IRS
    	
34
    
	
Issuing Bank
    	
34
    
	
Joinder Agreement
    	
118
    
	
Judgment Conversion Date
    	
150
    
	
Judgment Currency
    	
150
    
	
LC Collateral Account
    	
68
    
	
LC Disbursement
    	
34
    
	
LC Exposure
    	
34
    
	
LC Shortfall Amount
    	
34
    
	
Lender Priority Collateral
    	
34
    
	
Lender Update
    	
34
    
	
Lenders
    	
34
    
	
Letter of Credit
    	
34
    
	
Leverage Ratio
    	
34
    
	
LIBO Rate
    	
34
    

 

x

 

	
Lien
    	
35
    
	
Loan Documents
    	
35
    
	
Loan Guarantor
    	
35
    
	
Loan Guaranty
    	
35
    
	
Loan Parties
    	
35
    
	
Loans
    	
35
    
	
Manufacturing Division
    	
35
    
	
Material Adverse Effect
    	
36
    
	
Material Indebtedness
    	
36
    
	
Maturity Date
    	
36
    
	
Maximum Liability
    	
36, 156
    
	
Maximum Rate
    	
152
    
	
Moody’s
    	
36
    
	
Mortgages
    	
36
    
	
Multiemployer Plan
    	
36
    
	
Net Income
    	
36
    
	
Net Orderly Liquidation Value
    	
37
    
	
Net Proceeds
    	
37
    
	
New Lender
    	
37, 96
    
	
New Lender Agreement
    	
37
    
	
Non-Consenting Lender
    	
37, 141
    
	
Non-Financed Capital Expenditures
    	
37
    
	
Non-Paying Guarantor
    	
37, 156
    
	
Non-U.S. Lender
    	
37
    
	
Noteholder Agreement
    	
97
    
	
Notice of Business Activities Report
    	
23, 38
    
	
Obligated Party
    	
153
    
	
Obligation Currency
    	
150
    
	
Obligations
    	
38
    
	
OFAC
    	
38, 107
    
	
Off-Balance Sheet Liability
    	
38
    
	
Other Connection Taxes
    	
38
    
	
Other Secured Parties
    	
38
    
	
Other Taxes
    	
38
    
	
Overadvances
    	
38
    
	
parent
    	
47
    
	
Participant
    	
38, 146
    
	
Participant Register
    	
38, 147
    
	
Participation Agreement
    	
38
    
	
Parts Inventory Limit
    	
39
    
	
Paying Guarantor
    	
39, 156
    
	
PBGC
    	
39
    
	
Perfection Certificate
    	
39
    
	
Perfection Certificate Update
    	
39
    
	
Permitted Acquisition
    	
39
    
	
Permitted Discretion
    	
40
    

 

xi

 

	
Permitted Encumbrances
    	
41
    
	
Permitted Fixed Asset Disposition
    	
43
    
	
Permitted Investments
    	
42
    
	
Permitted Liens
    	
42
    
	
Permitted Senior Encumbrances
    	
43
    
	
Person
    	
43
    
	
Plan
    	
43
    
	
Prepayment Event
    	
43
    
	
primary obligor
    	
31
    
	
Prime Rate
    	
44
    
	
Pro Rata Inventory Percentage
    	
137
    
	
Proceeds
    	
44
    
	
Projections
    	
112
    
	
property
    	
56
    
	
Property
    	
44
    
	
Protective Advance
    	
44
    
	
Qualified Public Offering
    	
44
    
	
rate of exchange
    	
150
    
	
Real Property
    	
44
    
	
Recipient
    	
44
    
	
Register
    	
146
    
	
Related Parties
    	
44
    
	
Related Person
    	
16
    
	
Rent Reserve
    	
44
    
	
Report
    	
45
    
	
Required Lenders
    	
45
    
	
Requirement of Law
    	
45
    
	
Reserves
    	
45
    
	
Responsible Officer
    	
45
    
	
Restricted Payment
    	
45
    
	
return receipt requested
    	
139
    
	
Revolving Commitments
    	
45
    
	
Revolving Exposure
    	
45
    
	
Revolving Lenders
    	
45
    
	
Revolving Loan
    	
46
    
	
Revolving Loan Borrowing
    	
56
    
	
S&P
    	
46
    
	
Secured Obligations
    	
46
    
	
Security Agreements
    	
46
    
	
Senior Notes
    	
46
    
	
Senior Notes Documents
    	
46
    
	
Senior Notes Indenture
    	
46
    
	
Senior Notes Offering
    	
46
    
	
Senior Notes Offering Memorandum
    	
46
    
	
Senior Notes Trigger Date
    	
46
    
	
Settlement
    	
46, 64
    

 

xii

 

	
Special Vendor Payable Reserve
    	
46
    
	
Spot Exchange Rate
    	
46
    
	
SS Canada
    	
1, 46
    
	
SSC
    	
1, 47
    
	
SSDH
    	
1, 47
    
	
SSMH
    	
1, 47
    
	
SSMT
    	
1, 47
    
	
SSPP
    	
1, 47
    
	
SSPS
    	
1, 47
    
	
Statutory Reserve Rate
    	
47
    
	
Subject Borrower
    	
47, 94
    
	
Subject Canadian Borrower
    	
47, 94
    
	
Subordinated Indebtedness
    	
47
    
	
subsidiary
    	
47
    
	
Subsidiary
    	
47
    
	
Supermajority Revolving Lenders
    	
48
    
	
Swap Agreement
    	
48
    
	
Swap Obligations
    	
48
    
	
Swingline Exposure
    	
48
    
	
Swingline Lender
    	
48
    
	
Swingline Loan
    	
48
    
	
Syndication Agent
    	
48
    
	
Taxes
    	
48
    
	
Total Indebtedness
    	
48
    
	
Transactions
    	
48
    
	
True-Up Loans
    	
2
    
	
Type
    	
48
    
	
U.S. Person
    	
54
    
	
UCC
    	
49
    
	
Unliquidated Obligations
    	
49
    
	
Unrelated Person
    	
16
    
	
US Availability
    	
49
    
	
US Base Rate (Canada)
    	
49
    
	
US Borrower
    	
49
    
	
US Borrowers
    	
49
    
	
US Borrowing Base
    	
49
    
	
US Borrowing Base Certificate
    	
52
    
	
US Collateral Agent
    	
52
    
	
US Commitment
    	
52
    
	
US Controlled Disbursement Account
    	
52
    
	
US Credit Exposure
    	
52
    
	
US Fixed Asset   Amortization Amount
    	
53
    
	
US Fixed Asset   Component
    	
53
    
	
US Fixed Asset Component Limit
    	
53
    
	
US Fixed Asset Component Limit Notice
    	
53
    
	
US Funding Account
    	
108
    

 

xiii

 

	
US Inventory Limit
    	
54
    
	
US Lender
    	
54
    
	
US Loan Parties
    	
54
    
	
US Loans
    	
54
    
	
US Overadvances
    	
62
    
	
US Parts Inventory Limit
    	
54
    
	
US Protective Advances
    	
60
    
	
US Revolving Commitment
    	
54
    
	
US Revolving Exposure
    	
55
    
	
US Revolving Lender
    	
55
    
	
US Revolving Loans
    	
55
    
	
US Secured Obligations
    	
55
    
	
US Security Agreement
    	
55
    
	
US Settlement Date
    	
64
    
	
US Subsidiary
    	
55
    
	
Withdrawal Liability
    	
55
    
	
Withholding Agent
    	
56
    

 

xiv

 

THIRD AMENDED AND RESTATED CREDIT AGREEMENT

 

THIRD AMENDED AND RESTATED CREDIT AGREEMENT dated as of December 23, 2011 (as it may be amended or modified from time to time, this “Agreement”), among STEWART & STEVENSON LLC, a Delaware limited liability company (the “Company”), STEWART & STEVENSON DISTRIBUTOR HOLDINGS LLC, a Delaware limited liability company (“SSDH”), STEWART & STEVENSON POWER PRODUCTS LLC, a Delaware limited liability company (“SSPP”), STEWART & STEVENSON PETROLEUM SERVICES LLC, a Delaware limited liability company (“SSPS”), STEWART & STEVENSON FUNDING CORP., a Delaware corporation (“SSC”), STEWART & STEVENSON MATERIAL HANDLING LLC, a Delaware limited liability company formerly known as S&S Agent LLC (“SSMH”), STEWART & STEVENSON MANUFACTURING TECHNOLOGIES LLC, a Delaware limited liability company (“SSMT”), EMDSI-HUNT POWER, L.L.C., a Delaware limited liability company (“EMDSI”),  each as a US Borrower (as herein defined), STEWART & STEVENSON CANADA INC., a New Brunswick corporation (“SS Canada”), as a Canadian Borrower (as herein defined) (the US Borrowers and the Canadian Borrowers are together referred to herein as the “Borrowers” and each individually, a “Borrower”), the Lenders party hereto, JPMORGAN CHASE BANK, N.A., as the Administrative Agent and as the US Collateral Agent, JPMORGAN CHASE BANK, N.A., TORONTO BRANCH, as the Canadian Administrative Agent and as the Canadian Collateral Agent, and JPMORGAN CHASE BANK, N.A., as the Export-Related Lender.

 

RECITALS:

 

WHEREAS, the Company, SSDH, SSPP, SSPS, SSC, SSMH, SSMT, EMDSI and SS Canada (collectively, the “Existing Borrowers”), the Administrative Agent, the US Collateral Agent and the lenders party thereto are parties to that certain Second Amended and Restated Credit Agreement dated as of February 13, 2007 (as heretofore amended, the “Existing Credit Agreement”), pursuant to which JPMorgan Chase Bank, N.A. and certain other lenders party thereto extended certain financing to the Existing Borrowers in accordance with the terms and conditions set forth therein; and

 

WHEREAS, the Borrowers have requested that the Existing Credit Agreement be amended and restated in its entirety in the form of this Agreement.

 

AGREEMENTS:

 

In consideration of the mutual covenants and agreements herein contained, the Borrowers, the Agents, the Issuing Bank and the Lenders agree that, subject to the satisfaction of each condition precedent contained in Section 4.1 hereof, the satisfaction of which shall be evidenced by the execution and delivery by the Borrowers and the Administrative Agent of the Certificate of Effectiveness (as herein defined), the Existing Credit Agreement shall be amended and restated as of the Effective Date (as herein defined) in its entirety in the form of this Agreement.  It is the intention of the Borrowers, the Lenders, the Issuing Bank and the Agents that this Agreement supersede and replace the Existing Credit Agreement in its entirety; provided, that, (a) such amendment and restatement shall operate to renew, amend and modify the rights and obligations of the parties under the Existing Credit Agreement, as provided herein, 

 

1

 

but shall not effect a novation thereof, (b) unless otherwise provided for herein and evidenced by a separate written agreement, amendment or release, no other Loan Document, as defined in, and executed and/or delivered pursuant to the terms of, the Existing Credit Agreement (collectively, the “Existing Loan Documents”) shall be amended, terminated or released in any respect and all of such other Existing Loan Documents shall remain in full force and effect except that the Borrowers and the Lenders agree that by executing this Agreement the definition of “Credit Agreement” contained in such Existing Loan Documents shall be amended to refer to this Agreement as it may hereafter be amended, modified, renewed or extended in accordance with the terms hereof in place of the Existing Credit Agreement, and (c) the Liens securing the Secured Obligations under and as defined in the Existing Credit Agreement and granted pursuant to the Existing Loan Documents and the liabilities and obligations of the US Borrowers shall not be extinguished, but shall be carried forward, and such Liens shall secure such Secured Obligations, in each case, as renewed, amended, restated and modified hereby.

 

Upon delivery of the Certificate of Effectiveness, (a) each US Lender who holds US Revolving Loans in an aggregate amount less than its Applicable Percentage (after giving effect to this amendment and restatement) of all US Revolving Loans shall advance new US Revolving Loans which shall be disbursed to the Administrative Agent and used to repay US Revolving Loans outstanding to each US Lender who holds US Revolving Loans in an aggregate amount greater than its Applicable Percentage of all US Revolving Loans, (b) each Canadian Lender who holds Canadian Revolving Loans in an aggregate amount less than its Applicable Percentage (after giving effect to this amendment and restatement) of all Canadian Revolving Loans shall advance new Canadian Revolving Loans which shall be disbursed to the Canadian Administrative Agent and used to repay Canadian Revolving Loans outstanding to each Canadian Lender who holds Canadian Revolving Loans in an aggregate amount greater than its Applicable Percentage of all Canadian Revolving Loans, (c) each Lender’s participation in each Letter of Credit shall be automatically adjusted to equal its Applicable Percentage (after giving effect to this amendment and restatement), and (d) such other adjustments shall be made as the Administrative Agent or the Canadian Administrative Agent, as applicable, shall specify so that each Lender’s US Credit Exposure and Canadian Credit Exposure equal its Applicable Percentage (after giving effect to this amendment and restatement) of the Aggregate US Credit Exposure and the Aggregate Canadian Credit Exposure, respectively.  The loans and/or adjustments described in this paragraph are referred to herein as the “True-Up Loans”.

 

The parties hereto further agree as follows:

 

ARTICLE I
 DEFINITIONS

 

Section 1.1            Defined Terms.  As used in this Agreement, the following terms have the meanings specified below:

 

“ABR”, when used in reference to (a) any Loan or Borrowing to any US Borrower, refers to whether such Loan, or the Loans comprising such Borrowing, are bearing interest at a rate determined by reference to the Alternate Base Rate, and (b) any Dollar Denominated Loan to any Canadian Borrower, refers to whether such Loan, or the Loans comprising such Borrowing, are bearing interest at a rate determined by reference to the US Base Rate (Canada).

 

2

 

“Acceptance Fee” means a fee payable in C$ by the Canadian Borrowers to a Canadian Lender with respect to the acceptance or purchase of a B/A by such Canadian Lender, calculated on the face amount of such B/A at a rate per annum equal to the Applicable Rate with respect to B/A Loans on the basis of the number of days in the applicable Contract Period (inclusive of the first day and exclusive of the last day) and a year of 365 days (or 366 days in a leap year) (it being agreed that the Applicable Rate in respect of a B/A Equivalent Note is equivalent to the Applicable Rate otherwise applicable to the B/A Borrowing which has been replaced by the making of such B/A Equivalent Note pursuant to Section 2.14(g)).

 

“Account” has the meaning assigned to such term in the applicable UCC.

 

“Account Debtor” means any Person obligated on an Account.

 

“Acquisition” means any transaction, or any series of related transactions, consummated on or after the date of this Agreement, by which any Loan Party (a) acquires any going business or all or substantially all of the assets of any Person, whether through purchase of assets, merger or otherwise or (b) directly or indirectly acquires (in one transaction or as the most recent transaction in a series of transactions) at least a majority (in number of votes) of the Equity Interests in a Person which has ordinary voting power for the election of directors or other similar management personnel of a Person (other than Equity Interests having such power only by reason of the happening of a contingency) or a majority of the outstanding Equity Interests in a Person.

 

“Activation Period” means any period commencing on the date that Availability is less than the greater of (i) $25,000,000 and (ii) 10% of the US Revolving Commitments at any time, and, in each case, continuing until the date that both (x) Availability exceeds the greater of (1) $25,000,000 and (2) 10% of the US Revolving Commitments at such time for ninety (90) consecutive calendar days and (y) no Default or Event of Default then exists or has existed during such ninety (90) consecutive calendar day period.

 

“Adjusted LIBO Rate” means, with respect to any Eurodollar Borrowing for any Interest Period, an interest rate per annum (rounded upwards, if necessary, to the next 1/16 of 1%) equal to (a) the LIBO Rate for such Interest Period multiplied by (b) the Statutory Reserve Rate.

 

“Administrative Agent” means JPMorgan Chase Bank, N.A., in its capacity as administrative agent for the Lenders hereunder and its successors and assigns in such capacity.

 

“Administrative Questionnaire” means an Administrative Questionnaire in a form supplied by the Administrative Agent.

 

“Affiliate” means, with respect to a specified Person, another Person that directly, or indirectly through one or more intermediaries, Controls or is Controlled by or is under common Control with the Person specified.

 

“Agents” means the Administrative Agent, the Canadian Administrative Agent, the US Collateral Agent and the Canadian Collateral Agent together, and “Agent” means any one of such Agents individually.

 

3

 

“Aggregate Canadian Credit Exposure” means, at any time, the sum of all of the Canadian Lenders’ Canadian Credit Exposure.

 

“Aggregate US Credit Exposure” means, at any time, the sum of all of the US Lenders’ US Credit Exposure.

 

“Alternate Base Rate” means, for any day, a rate per annum equal to the greater of (a) the Prime Rate in effect on such day, (b) the Federal Funds Effective Rate in effect on such day plus 1⁄2 of 1% and (c) the Adjusted LIBO Rate for a one month interest period appearing on the Reuters Screen LIBOR01 Page (or on any successor or substitute page) on such day plus 1%; provided  that, for the avoidance of doubt, the Adjusted LIBO Rate for any day shall be based on the rate appearing on the Reuters Screen LIBOR01 Page (or on any successor or substitute page) at approximately 11:00 a.m. London time on such day (without any rounding).  Any change in the Alternate Base Rate due to a change in the Prime Rate, the Federal Funds Effective Rate or the Adjusted LIBO Rate shall be effective from and including the effective date of such change in the Prime Rate, the Federal Funds Effective Rate or the Adjusted LIBO Rate, respectively.

 

“Ansary Related Parties” means Mr. Hushang Ansary, his family members or Persons in which all Equity Interests in such Persons are owned or otherwise Controlled solely by Hushang Ansary and/or members of his family.

 

“Applicable Percentage” means (a) with respect to any US Lender, (i) with respect to US Revolving Loans, LC Exposure, Swingline Loans or US Overadvances, a percentage equal to a fraction the numerator of which is such US Lender’s US Revolving Commitment and the denominator of which is the aggregate US Revolving Commitments of all US Revolving Lenders (if the US Revolving Commitments have terminated or expired, the Applicable Percentages shall be determined based upon such US Revolving Lender’s share of the aggregate US Revolving Exposures at that time), and (ii) with respect to US Protective Advances or with respect to the Aggregate US Credit Exposure, a percentage based upon its share of the Aggregate US Credit Exposure and the unused US Commitments, and (b) with respect to any Canadian Lender, (i) with respect to Canadian Revolving Loans or Canadian Overadvances, a percentage equal to a fraction the numerator of which is such Canadian Lender’s Canadian Revolving Commitment and the denominator of which is the aggregate Canadian Revolving Commitments of all Canadian Lenders (if the Canadian Revolving Commitments have been terminated or expired, the Applicable Percentages shall be determined based upon such Canadian Lender’s share of the aggregate Canadian Revolving Exposures at that time), and (ii) with respect to Canadian Protective Advances or Aggregate Canadian Credit Exposure, a percentage based on its share of the Aggregate Canadian Credit Exposure and the unused Canadian Commitments; provided that, in accordance with Section 2.27, so long as any Lender shall be a Defaulting Lender, such Defaulting Lender’s US Revolving Commitment and Canadian Revolving Commitment, as applicable, shall be disregarded in the calculations under clauses (a) and (b) above, respectively.

 

“Applicable Rate” means, for any day, with respect to any ABR Loan, Eurodollar Loan, B/A Loan or Canadian Prime Rate Loan, as the case may be, the applicable rate per annum set forth below under the caption “ABR Spread”, “Eurodollar Spread”, “B/A Spread” or “Canadian Prime Rate Spread”, as the case may be, based upon the Borrowers’ Average Excess Availability as of the most recent determination date, provided  that until the first calendar 

 

4

 

day of the month following the date of delivery to the Administrative Agent, pursuant to Section 5.1, of the Company’s consolidated financial information and related compliance certificate for the Company’s fiscal quarter ending January 31, 2012 the “Applicable Rate” shall be the applicable rate per annum set forth below in Category 3:

 

	
Category
    	
 
    	
Average Excess
   Availability
    	
 
    	
ABR Spread
    	
 
    	
Eurodollar Spread
    	
 
    	
Canadian Prime
   Rate Spread
    	
 
    	
B/A Spread
    	
 
    
	
1
    	
 
    	
Less than or equal to $75,000,000
    	
 
    	
1.25
    	
%
    	
2.25
    	
%
    	
2.00
    	
%
    	
2.25
    	
%
    
	
2
    	
 
    	
Greater than $75,000,000 but less than $150,000,000
    	
 
    	
1.00
    	
%
    	
2.00
    	
%
    	
1.75
    	
%
    	
2.00
    	
%
    
	
3
    	
 
    	
Greater than or equal to $150,000,000
    	
 
    	
0.75
    	
%
    	
1.75
    	
%
    	
1.50
    	
%
    	
1.75
    	
%
    

 

The rates per annum set forth in the pricing grid above will each decrease by 0.25% to the extent the Borrowers’ Leverage Ratio for any reporting period is less than 2.0 to 1, which decrease shall be effective only during the period described below.  For purposes of clarity, the rates per annum in respect of each category set forth in the pricing grid above shall never be reduced by more than 0.25% at any point during the term of this Agreement.

 

For purposes of the foregoing and subject to the foregoing proviso, (a) the Applicable Rate shall be determined as of the end of each fiscal quarter of the Borrowers upon the Administrative Agent’s receipt of such consolidated financial statements and related compliance certificate based upon the Borrowers’ Average Excess Availability for the preceding fiscal quarter and Leverage Ratio determined for the period of four consecutive fiscal quarters ending on the last day of the preceding fiscal quarter and (b) each change in the Applicable Rate resulting from a change in the Borrowers’ Average Excess Availability or Leverage Ratio shall be effective during the period commencing on and including the first calendar day of the month following the date of delivery to the Administrative Agent of such consolidated financial statements and related compliance certificate and ending on the date immediately preceding the effective date of the next such change; provided  that to the extent the pricing grid has been decreased by 0.25% pursuant to the foregoing paragraph, the rates per annum will be re-set as set forth in the pricing grid above at the option of the Administrative Agent or at the request of the Required Lenders if the Borrowers fail to deliver the annual or quarterly consolidated financial statements or related compliance certificate required to be delivered by them pursuant to Section 5.1 during the period from the expiration of the time for delivery thereof until the first calendar day of the month following the date of delivery of such consolidated financial statements and related compliance certificate.

 

Without limitation of any other provision of this Agreement or any other remedy available to the Agents or the Lenders under any of the Loan Documents, to the extent that any financial statements or compliance certificate delivered by the Borrowers pursuant to Section 5.1 shall be incorrect in any manner in respect any period (an “Applicable Period”) and the Company or any other Loan Party shall deliver to the Administrative Agent and/or the Lenders corrected financial statements for such Applicable Period, the Administrative Agent may recalculate the Leverage Ratio for such Applicable Period based upon such corrected financial 

 

5

 

statements, and, if such recalculation results in a Leverage Ratio that would have caused the Applicable Rate for such Applicable Period to have been higher than under the prior calculations, then upon written notice thereof to the applicable Borrower Representative, the Loans shall bear interest based upon such recalculated Applicable Rate for such Applicable Period retroactively from the date of delivery of the erroneous financial statements in question.

 

“Appraised Value” means (a) with respect to the Eligible Mortgaged Real Property, the fair market value of the Eligible Mortgaged Real Property reflected in an MAI appraisal of such Real Property and (b) with respect to the Eligible Equipment, the net orderly liquidation value of the Eligible Equipment in an appraisal of such equipment, in each case in form and substance and prepared by an appraiser acceptable to the Administrative Agent and the Canadian Administrative Agent, as applicable.

 

“Approved Fund” has the meaning assigned to such term in Section 9.4.

 

“Assignment and Assumption” means an assignment and assumption entered into by a Lender and an assignee (with the consent of any party whose consent is required by Section 9.4), and accepted by the Administrative Agent, in the form of Exhibit A or any other form approved by the Administrative Agent.

 

“Available Canadian Revolving Commitment” means, with respect to each Canadian Lender at any time, the Canadian Revolving Commitment of such Canadian Lender then in effect minus the Canadian Revolving Exposure of such Canadian Lender at such time.

 

“Available US Revolving Commitment” means, with respect to each US Revolving Lender at any time, the US Revolving Commitment of such US Revolving Lender then in effect minus the US Revolving Exposure  of such US Revolving Lender at such time.

 

“Availability” means, at any time, the sum of the US Availability and the Canadian Availability.

 

“Availability Block” has the meaning assigned to such term in Section 2.26.

 

“Availability Period” means the period from and including the Effective Date to but excluding the earlier of the Maturity Date and the date of termination of the Commitments.

 

“Average Excess Availability” means, for any period the average daily Availability determined for such period based on the excess Availability during such period as determined by the Administrative Agent.

 

“B/A” means a non-interest bearing bill of exchange denominated in C$, drawn by the Canadian Borrowers and accepted by a Canadian Lender in accordance with this Agreement, and includes a “depository note” within the meaning of the Depository Bills and Notes Act (Canada) and a bill of exchange within the meaning of the Bills of Exchange Act (Canada).

 

“B/A Cover” means an amount equal to the aggregate amount of all outstanding B/A Loans, which amount when required by this Agreement (a) shall be paid to the Canadian Administrative Agent, in immediately available funds, and collaterally assigned as security for 

 

6

 

Canadian Secured Obligations pursuant to the Loan Documents, and (b) shall be retained by the Canadian Administrative Agent and applied to repay the principal of each B/A Loan upon the maturity thereof until all such B/A Loans and all other Canadian Secured Obligations have been fully satisfied.

 

“B/A Equivalent Note “ has the meaning assigned such term in Section 2.14(g).

 

“B/A Loan” means a Borrowing represented by B/As.

 

“Banking Services” means each and any of the following bank services provided to any Loan Party by any Lender or any of its Affiliates:  (a) commercial credit cards, purchase cards and products related to commercial credit and purchase cards, (b) stored value cards and (c) treasury management services (including, without limitation, controlled disbursement, automated clearinghouse transactions, return items, overdrafts and interstate depository network services).

 

“Banking Services Obligations” of the Loan Parties means any and all obligations of the Loan Parties, whether absolute or contingent and howsoever and whensoever created, arising, evidenced or acquired (including all renewals, extensions and modifications thereof and substitutions therefor) in connection with Banking Services.

 

“Banking Services Reserves” means all Reserves which the Administrative Agent from time to time establishes in its Permitted Discretion for Banking Services then provided or outstanding.

 

“Bankruptcy Event” means, with respect to any Person, such Person becomes the subject of a bankruptcy or insolvency proceeding, or has had a receiver, conservator, trustee, administrator, custodian, assignee for the benefit of creditors or similar Person charged with reorganization or liquidation of its business, appointed for it, or, in the good faith determination of the Administrative Agent, has taken any action in furtherance of, or indicating its consent to, approval of, or acquiescence in, any such proceeding or appointment, provided that a Bankruptcy Event shall not result solely by virtue of any ownership interest, or the acquisition of any ownership interest, in such Person by a Governmental Authority or instrumentality thereof, provided, further, that such ownership interest does not result in or provide such Person with immunity from the jurisdiction of courts within the United States or from the enforcement of judgments or writs of attachment on its assets or permit such Person (or such Governmental Authority or instrumentality), to reject, repudiate, disavow or disaffirm any contracts or agreements made by such Person.

 

“Base Value” means, with respect to certain categories of Eligible Inventory, the lower of (a) cost (determined on a first in first out basis in accordance with GAAP and excluding any component of cost consisting of intercompany profit with respect to such Eligible Inventory acquired from an Affiliate), or (b) market value.

 

“Board” means the Board of Governors of the Federal Reserve System of the United States of America.

 

7

 

“Borrower” or “Borrowers” has the meanings set forth in the initial paragraph hereof and shall include any other Person who becomes a Borrower under this Agreement and their successors and assigns.

 

“Borrower Representatives” means the Borrower Representative Canada (as defined in Section 11.1) and the Borrower Representative US (as defined in Section 11.1) together, and “Borrower Representative” means any one of such representatives of the Borrowers individually.

 

“Borrowing” means (a) Revolving Loans of the same Type, made, converted or continued on the same date and, in the case of Eurodollar Loans or B/A Loans, as to which a single Interest Period or Contract Period (as applicable) is in effect, (b) a Swingline Loan, (c) a US Protective Advance, (d) a US Overadvance, (e) a Canadian Protective Advance, and (f) a Canadian Overadvance.

 

“Borrowing Base Reserves” means any and all reserves which the Administrative Agent deems necessary, in its Permitted Discretion, to establish with respect to the US Borrowing Base and/or the Canadian Borrowing Base and which will be deducted in the calculation thereof, as applicable.  Such Borrowing Base Reserves include, without limitation, Banking Services Reserves, Dilution Reserves at any time that the Dilution Ratio is greater than 5%, reserves for slow moving Inventory, the Export-Related Reserve (with respect to the US Borrowing Base only), reserves for contingent liabilities of any Loan Party, reserves for uninsured losses of any Loan Party, reserves for uninsured, underinsured, un-indemnified or under-indemnified liabilities or potential liabilities with respect to any litigation with respect to the Collateral or any Loan Party, and, with respect to the Canadian Borrowing Base only, reserves for statutory claims, deemed trusts or inventory subject to rights of suppliers under Section 81.1 of the Bankruptcy and Insolvency Act (Canada), and the Canadian Priority Claims Reserve; provided, that Borrowing Base Reserves shall not include any reserves specifically described under the definition of “Commitment Reserves”.

 

“Borrowing Request” means a request by a Borrower Representative for a Borrowing in accordance with Section 2.2 and Section 2.3.

 

“Business Day” means any day that is not a Saturday, Sunday or other day on which commercial banks in New York City are authorized or required by law to remain closed; provided  that, (a) when used in connection with a Eurodollar Loan, the term “Business Day” shall also exclude any day on which banks are not open for dealings in dollar deposits in the London interbank market, and (b) when used in connection with Canadian Revolving Loans, including B/A Loans, or the determination of the Dollar Equivalent of any amount denominated in C$. “Business Day” shall also exclude any other day on which banks are required or authorized to close in Toronto, Ontario, Canada.

 

“C$” means the lawful money of Canada.

 

“C$ Denominated Loan” means Canadian Revolving Loans which are denominated in C$.

 

8

 

“Canadian Administrative Agent” mean JPMorgan Chase Bank, N.A., Toronto Branch, in its capacity as administrative agent for the Canadian Lenders hereunder and its successors and assigns in such capacity.

 

“Canadian Administrative Agent Overline” has the meaning assigned such term in Section 2.10(j).

 

“Canadian Availability” means, at any time, an amount equal to (a) the lesser of the total Canadian Revolving Commitments and the Canadian Borrowing Base minus (b) the Canadian Commitment Reserves minus (c) the aggregate Canadian Revolving Exposure of all Canadian Lenders (calculated, with respect to any Defaulting Lender, as if such Defaulting Lender had funded its Applicable Percentage of all outstanding Canadian Loans if applicable).

 

“Canadian Borrower” or “Canadian Borrowers” means (a) SS Canada as of the Effective Date, (b) each of the Borrowers’ Canadian Subsidiaries that becomes a Borrower under this Agreement pursuant to Section 5.14 and (c) each of their successors and assigns.

 

“Canadian Borrowing Base” means, at any time, the sum of (a) 85% of the Canadian Borrowers’ Eligible Accounts at such time, plus (b) the lesser of (i) the Canadian Inventory Limit, and (ii) the sum of the following:

 

(1)           the lesser of (A) 65% of the Base Value of the Canadian Borrowers’ Eligible Inventory consisting of primary finished goods of the Canadian Borrowers’ Manufacturing Division, and (B) the sum of (x) the Inventory Advance Percentage of the Canadian Borrowers’ Eligible Inventory consisting of primary finished goods of the Canadian Borrowers’ Manufacturing Division, plus (y) the book value of the Canadian Borrowers’ Eligible Inventory consisting of primary finished goods of the Canadian Borrowers’ Manufacturing Division purchased after the date of the Inventory appraisal used to determine the Inventory Advance Percentage minus (z) the book value of the Canadian Borrowers’ Eligible Inventory consisting of primary finished goods of the Canadian Borrowers’ Manufacturing Division sold, retired or otherwise disposed of and depreciated after the date of the Inventory appraisal used to determine the Inventory Advance Percentage, plus

 

(2)           the lesser of (A) 65% of the Base Value of the Canadian Borrowers’ Eligible Inventory consisting of engine and transmission units of the Canadian Borrowers’ Distribution Division, and (B) the sum of (x) the Inventory Advance Percentage of the Canadian Borrowers’ Eligible Inventory consisting of engine and transmission units of the Canadian Borrowers’ Distribution Division, plus (y) the book value of the Canadian Borrowers’ Eligible Inventory consisting of engine and transmission units of the Canadian Borrowers’ Distribution Division purchased after the date of the Inventory appraisal used to determine the Inventory Advance Percentage, minus (z) the book value of the Canadian Borrowers’ Eligible Inventory consisting of engine and transmission units of the Canadian Borrowers’ Distribution Division sold, retired or otherwise disposed of and depreciated after the date of the Inventory appraisal used to determine the Inventory Advance Percentage, plus

 

(3)           the lesser of (A) the Canadian Parts Inventory Limit, and (B) the sum of the following:

 

9

 

(I)            the lesser of (A) 65% of the Base Value of the Canadian Borrowers’ Eligible Inventory consisting of active parts of the Canadian Borrowers’ Distribution Division, and (B) the sum of (x) the Inventory Advance Percentage of the Canadian Borrowers’ Eligible Inventory consisting of active parts of the Canadian Borrowers’ Distribution Division, plus (y) the book value of the Canadian Borrowers’ Eligible Inventory consisting of active parts of the Canadian Borrowers’ Distribution Division purchased after the date of the Inventory appraisal used to determine the Inventory Advance Percentage, minus (z) the book value of the Canadian Borrowers’ Eligible Inventory consisting of active parts of the Canadian Borrowers’ Distribution Division sold, retired or otherwise disposed of and depreciated after the date of the Inventory appraisal used to determine the Inventory Advance Percentage, plus

 

(II)           the lesser of (A) 65% of the Base Value of the Canadian Borrowers’ Eligible Inventory consisting of parts of the Canadian Borrowers’ Manufacturing Division, and (B) the sum of (x) the Inventory Advance Percentage of the Canadian Borrowers’ Eligible Inventory consisting of parts of the Canadian Borrowers’ Manufacturing Division, plus (y) the book value of the Canadian Borrowers’ Eligible Inventory consisting of parts of the Canadian Borrowers’ Manufacturing Division purchased after the date of the Inventory appraisal used to determine the Inventory Advance Percentage, minus (z) the book value of the Canadian Borrowers’ Eligible Inventory consisting of parts of the Canadian Borrowers’ Manufacturing Division sold, retired or otherwise disposed of and depreciated after the date of the Inventory appraisal used to determine the Inventory Advance Percentage, plus

 

(4)           the lesser of (A) 65% of the Base Value of the Canadian Borrowers’ Eligible Inventory consisting of custom built work-in-process of the Canadian Borrowers’ Distribution Division, and (B) the sum of (x) the Inventory Advance Percentage of the Canadian Borrowers’ Eligible Inventory consisting of custom built work-in-process of the Canadian Borrowers’ Distribution Division, plus (y) the book value of the Canadian Borrowers’ Eligible Inventory consisting of custom built work-in-process of the Canadian Borrowers’ Distribution Division purchased or manufactured after the date of the Inventory appraisal used to determine the Inventory Advance Percentage, minus (z) the book value of the Canadian Borrowers’ Eligible Inventory consisting of custom built work-in-process of the Canadian Borrowers’ Distribution Division sold, retired or otherwise disposed of and depreciated after the date of the Inventory appraisal used to determine the Inventory Advance Percentage, plus

 

(5)           the lesser of (A) 65% of the Base Value of the Canadian Borrowers’ Eligible Inventory consisting of identifiable work-in-process of the Canadian Borrowers’ Manufacturing Division, and (B) the sum of (x) the Inventory Advance Percentage of the Canadian Borrowers’ Eligible Inventory consisting of identifiable work-in-process of the Canadian Borrowers’ Manufacturing Division, plus (y) the book value of the Canadian Borrowers’ Eligible Inventory consisting of identifiable work-in-process of the Canadian Borrowers’ Manufacturing Division purchased or manufactured after the date of the Inventory appraisal used to determine the Inventory Advance Percentage, minus (z) the book value of the Canadian Borrowers’ Eligible Inventory consisting of identifiable work-in-process of the Canadian Borrowers’ Manufacturing Division sold, retired or otherwise disposed of and depreciated after the date of the Inventory appraisal used to determine the Inventory Advance Percentage, plus

 

(6)           the Canadian Fixed Asset Component, minus

 

10

 

(7)           Borrowing Base Reserves (applicable to the Canadian Borrowing Base as determined by the Administrative Agent in its Permitted Discretion).

 

The Administrative Agent may, in its Permitted Discretion, reduce the advance rates set forth above, or reduce one or more of the other elements used in computing the Canadian Borrowing Base, with any such changes to be effective three (3) days after delivery of notice thereof to the Borrower Representative Canada and the Canadian Lenders.  The Canadian Borrowing Base at any time shall be determined by reference to the most recent Canadian Borrowing Base Certificate delivered to the Administrative Agent pursuant to Section 5.1(g) subject to (i) the right of the Administrative Agent to redetermine any component of the Canadian Borrowing Base or the calculation thereof if and to the extent the Administrative Agent believes, in its Permitted Discretion, such component or calculation to be incorrect (any such redetermination made in its Permitted Discretion and absent manifest error shall be conclusive and binding on the Canadian Borrowers) and provided that the Administrative Agent gives the Canadian Borrowers contemporaneous notice of such redetermination, and (ii) immediate adjustment as a result of (A) the establishment or release of Borrowing Base Reserves, (B) reductions in the Canadian Fixed Asset Component by the amount of the Canadian Fixed Asset Amortization Amount applicable to the Canadian Fixed Asset Component, (C) reduction in advance rates provided for herein, (D) subject to the three (3) day period set forth above, changes in eligibility criteria or standards imposed by the Administrative Agent and (E) the occurrence of a Permitted Fixed Asset Disposition (as applicable).

 

“Canadian Borrowing Base Certificate” means a certificate, signed and certified as accurate and complete by a Financial Officer of the Borrower Representative Canada, in substantially the form of Exhibit D or another form which is acceptable to the Administrative Agent in its sole discretion.

 

“Canadian Collateral Agent” means JPMorgan Chase Bank, N.A., Toronto Branch, in its capacity as collateral agent for the Canadian Lenders, and its successors and assigns in such capacity.

 

“Canadian Commitment” means, with respect to each Canadian Lender, the sum of such Canadian Lender’s Canadian Revolving Commitment, together with the commitment of such Canadian Lender to acquire participations in Canadian Protective Advances hereunder.  The initial amount of each Canadian Lender’s Canadian Commitment is set forth on the Commitment Schedule, or in the Assignment and Assumption pursuant to which such Canadian Lender shall have assumed its Canadian Commitment, as applicable.

 

“Canadian Controlled Disbursement Account” means the accounts of any of the Canadian Borrowers (and any replacements therefor) maintained with the Canadian Administrative Agent as a zero balance, cash management account pursuant to and under any agreement between any of the Canadian Borrowers and the Canadian Administrative Agent, as modified and amended from time to time, and through which all disbursements of the Canadian Borrowers, any Loan Party and any designated Subsidiary of any Canadian Borrower are made and settled on a daily basis with no uninvested balance remaining overnight.

 

11

 

“Canadian Credit Exposure” means, as to any Canadian Lender at any time, the sum of (a) such Canadian Lender’s Canadian Revolving Exposure at such time, plus (b) an amount equal to its Applicable Percentage, if any, of the aggregate principal amount of Canadian Protective Advances outstanding at such time.

 

“Canadian Employee Funding Liability Reserve” means all such amounts which, under the provisions of any Plan, agreement relating thereto or applicable law, (i) are required to be paid as contributions to a Plan by any Canadian Loan Party and (ii) have not been made when and at such times as required pursuant to the terms of any such Plan, agreement relating thereto or applicable law including any and all fines, penalties and assessments relating thereto.

 

“Canadian Fixed Asset Amortization Amount” means the monthly amortization amount, which shall be calculated and established by the Canadian Administrative Agent upon the Canadian Administrative Agent’s establishment of the Canadian Fixed Asset Component and shall be in an amount equal to 1/120th of the initial Canadian Fixed Asset Component established by the Canadian Administrative Agent after the Effective Date.  The Canadian Administrative Agent, in its Permitted Discretion, reserves the right to decrease the Canadian Fixed Asset Amortization Amount (a) upon the consummation of dispositions of Eligible Equipment or Eligible Mortgaged Real Property owned by any Canadian Borrower and (b) at such time as any equipment or Real Property which was previously Eligible Equipment or Eligible Mortgaged Real Property (as applicable) ceases to be Eligible Equipment or Eligible Mortgaged Real Property hereunder, by the applicable percentage of the Appraised Value of the Property so disposed of or the equipment or Real Property which has ceased to be Eligible Equipment or Eligible Mortgaged Real Property hereunder, as applicable; provided, that any such reduction shall be in connection with a corresponding reduction of the Canadian Fixed Asset Component.

 

“Canadian Fixed Asset Component” means an amount established by the Canadian Administrative Agent prior to March 31, 2012 upon its receipt of (a) an appraisal and environmental reports of the Canadian Borrowers’ Fixed Asset Collateral and all other Collateral Documents and other documents related to the Canadian Borrowers’ Fixed Asset Collateral that are required to be  delivered to the Canadian Collateral Agent pursuant to Section 5.14, in form and substance reasonably satisfactory to the Canadian Administrative Agent and (b) the Canadian Fixed Asset Component Limit Notice, which amount shall be equal to the lesser of (i) the Canadian Fixed Asset Component Limit and (ii) seventy-five percent (75%) of the Appraised Value of the Canadian Borrowers’ Fixed Asset Collateral allocated to the Canadian Fixed Asset Component.  For purposes of clarity, the Canadian Fixed Asset Component shall be $0 as of the Effective Date. The Canadian Fixed Asset Component shall be reduced by (x) the Canadian Fixed Asset Amortization Amount applicable to the Canadian Fixed Asset Component on the first day of each month commencing on the first day of the first full month following the establishment of the Canadian Fixed Asset Amortization Amount and continuing on the first day of each month thereafter throughout the term of this Agreement and (y) the percentage of the Appraised Value of any Fixed Asset Collateral allocated to the Canadian Fixed Asset Component which (1) is the subject of a casualty event (including, without limitation, damage, destruction or condemnation) or a Permitted Fixed Asset Disposition, or (2) is no longer Eligible Equipment or Eligible Mortgaged Real Property (as applicable) less in each case the portion of such amount that has already been reduced from the Canadian Fixed Asset Component as a 

 

12

 

result of prior Canadian Fixed Asset Amortization Amount reductions, in each case such amounts being determined by the Canadian Administrative Agent in its sole discretion.

 

“Canadian Fixed Asset Component Limit” means the amount of the Fixed Asset Component Limit which a Borrower Representative designates in writing (the “Canadian Fixed Asset Component Limit Notice”) as the “Canadian Fixed Asset Component Limit” on or prior to March 31, 2012; provided, that, in no event shall (a) the Canadian Fixed Asset Component Limit exceed $15,000,000 in the aggregate or (b) the sum of the Canadian Fixed Asset Component Limit and the US Fixed Asset Component Limit exceed the Fixed Asset Component Limit.

 

“Canadian Fixed Asset Component Limit Notice” has the meaning assigned to such term in the definition of “Canadian Fixed Asset Component Limit”.

 

“Canadian Funding Account” has the meaning assigned to such term in Section 4.1(h).

 

“Canadian Inventory Limit” means the amount of the Inventory Limit which the Borrower Representative Canada designates as the “Canadian Inventory Limit” on the Canadian Borrowing Base Certificate from which the Canadian Borrowing Base is being calculated; provided, that, in no event shall the sum of the Canadian Inventory Limit and the US Inventory Limit in effect at any time ever exceed the Inventory Limit.

 

“Canadian Lender” means, as of any date of determination, a Lender with a Canadian Revolving Commitment or, if the Canadian Revolving Commitments have terminated or expired, a Lender with Canadian Revolving Exposure.

 

“Canadian Loan Parties” means, (a) the Canadian Borrowers, and (b) each of the Canadian Borrowers’ Canadian Subsidiaries or any other Person which is formed or organized under the federal laws of Canada or under the laws of any province or territory in Canada and who becomes a party to this Agreement pursuant to a Joinder Agreement and their successors and assigns.

 

“Canadian Loans” means the Canadian Revolving Loans, the Canadian Overadvances and the Canadian Protective Advances, collectively.

 

“Canadian Overadvance” has the meaning assigned to such term in Section 2.5(d).

 

“Canadian Parts Inventory Limit” shall mean the amount of the Parts Inventory Limit which the Borrower Representative Canada designates as the “Canadian Parts Inventory Limit” on the Canadian Borrowing Base Certificate from which the Canadian Borrowing Base is being calculated; provided, that, in no event shall the sum of the Canadian Parts Inventory Limit and the US Parts Inventory Limit in effect at any time ever exceed the Parts Inventory Limit.

 

“Canadian Pension Plan” means any pension benefit plan within the meaning of the Employment Pension Plans Act (Alberta) in respect of which any Canadian Loan Party makes or has made contributions in respect of its employees.

 

13

 

“Canadian Prime Rate” means on any day, the annual rate of interest (rounded upwards, if necessary, to the nearest 1/16 of 1%) equal to the greater of: (a) the annual rate of interest announced from time to time by Chase Canada as its prime rate in effect at its principal office in Toronto, Ontario, Canada on such day being the reference rate used for determining interest rates on C$ denominated commercial loans to its customers in Canada, and (b) the one month annual rate of interest equal to the sum of (i) the CDOR Rate in effect on such day and (ii) 1.0%.

 

“Canadian Prime Rate Loans” means C$ Denominated Loans which bear interest at a rate based upon the Canadian Prime Rate.

 

“Canadian Priority Claims Reserve” means, as of the last day of each month, the aggregate amount of all claims against the Canadian Borrowers on such date, which if asserted could have priority over the Canadian Secured Obligations pursuant to applicable Canadian federal, provincial or territorial laws and shall include, without limitation, claims with respect to accrued salaries and wages, accrued vacation payable, Revenue Canada employment taxes, goods and services taxes, and provincial sales taxes.

 

“Canadian Protective Advance” has the meaning assigned to such term in Section 2.4(b).

 

“Canadian Revolving Commitment” means, with respect to each Canadian Lender, the commitment, if any, of such Canadian Lender to make Canadian Revolving Loans and to acquire participations in Canadian Overadvances hereunder, expressed as an amount representing the maximum possible aggregate amount of such Canadian Lender’s Canadian Revolving Exposure hereunder, as such commitment may be (a) reduced from time to time pursuant to Section 2.9, (b) reduced or increased from time to time pursuant to assignments by or to such Canadian Lender pursuant to Section 9.4, and (c) increased from time to time pursuant to Section 2.24.  The initial amount of each Canadian Lender’s Canadian Revolving Commitment is set forth on the Commitment Schedule, or in the Assignment and Assumption pursuant to which such Canadian Lender shall have assumed its Canadian Revolving Commitment, as applicable.  The initial aggregate amount of the Canadian Lenders’ Canadian Revolving Commitments is $25,000,000.

 

“Canadian Revolving Exposure” means, with respect to any Canadian Lender at any time, the sum of (a) the outstanding principal amount of such Canadian Lender’s Canadian Revolving Loans at such time, plus (b) an amount equal to its Applicable Percentage of the aggregate principal amount of Canadian Overadvances outstanding at such time.

 

“Canadian Revolving Loan” means a Loan to the Canadian Borrowers made pursuant to Section 2.1 in either Dollars or C$.

 

“Canadian Secured Obligations” means (a) all Obligations owing by the Canadian Loan Parties, (b) all Banking Services Obligations owing by the Canadian Loan Parties and (c) Swap Obligations owing by the Canadian Loan Parties to one or more Canadian Lenders or their respective Affiliates; provided  that at or prior to the time that any transaction relating to a Swap Obligation is executed, the Canadian Lender party thereto (other than Chase Canada) shall have 

 

14

 

delivered written notice to the Administrative Agent that such a transaction has been entered into and that it constitutes a Canadian Secured Obligation entitled to the benefits of the Collateral Documents.

 

“Canadian Security Agreement” means that certain Amended and Restated Canadian Pledge and Security Agreement, dated as of the date hereof, between the Canadian Loan Parties and the Canadian Collateral Agent, for the benefit of itself, the Canadian Administrative Agent, the Canadian Lenders and the Other Secured Parties, as the same may be amended, restated or otherwise modified from time to time, and (b) any other pledge or security agreement entered into after the date of this Agreement by any Canadian Loan Party (as required by this Agreement or any other Loan Document) in favor of the Canadian Collateral Agent for the ratable benefit of the Canadian Administrative Agent, the Canadian Lenders and the Other Secured Parties to secure the Canadian Secured Obligations, as the same may be amended, restated, or otherwise modified from time to time.

 

“Canadian Settlement Date” means the date, weekly, and more frequently, at the discretion of the Canadian Administrative Agent, upon the occurrence of an Event of Default or a continuing decline or increase of the Canadian Revolving Loans, that the Canadian Administrative Agent and the Canadian Lenders shall settle amongst themselves so that (a) the Canadian Administrative Agent shall not have, as the agent for the Canadian Lenders, any money at risk, and (b) on such Canadian Settlement Date the Canadian Lenders shall have their Applicable Percentage of the Aggregate Canadian Revolving Exposure; provided, that, each Canadian Settlement Date for a Canadian Lender shall be a Business Day on which such Canadian Lender and its bank are open for business, as applicable; provided, further, each Canadian Lender shall have at least one Business Day’s notice of a Canadian Settlement Date and the amount owed by such Canadian Lender on that date.

 

“Canadian Subsidiary” means any Subsidiary of any Borrower that is formed or organized under the federal laws of Canada or under the laws of any province or territory thereof.

 

“Capital Expenditures” means, with respect to any Person, without duplication, any expenditure or commitment to expend money by such Person for any purchase or other acquisition of any asset which would be classified as a fixed or capital asset on a consolidated balance sheet of such Person and its Subsidiaries prepared in accordance with GAAP.

 

“Capital Lease Obligations” of any Person means the obligations of such Person to pay rent or other amounts under any lease of (or other arrangement conveying the right to use) real or personal property, or a combination thereof, which obligations are required to be classified and accounted for as capital leases on a balance sheet of such Person under GAAP, and the amount of such obligations shall be the capitalized amount thereof determined in accordance with GAAP.

 

“CDOR Rate” means on any date, the annual rate of interest which is the rate based on an average rate applicable to bankers’ acceptances for a term of thirty (30) days appearing on the “Reuters Screen CDOR Page” (as defined in the International Swaps and Derivatives Association, Inc. definitions, as modified and amended from time to time) at approximately 

 

15

 

10:00 a.m. (Toronto, Ontario Canada time), on such date, or if such date is not a Business Day, then on the immediately preceding Business Day, provided, that, if such rate does not appear on the Reuters Screen CDOR Page as contemplated, then the CDOR Rate on any date shall be calculated as the rate for the term referred to above applicable to bankers’ acceptances quoted by Chase Canada as of 10:00 a.m. (Toronto, Ontario, Canada time) on such date or, if such date is not a Business Day, then on the immediately preceding Business Day.

 

“Certificate of Effectiveness” means a Certificate of Effectiveness in the form of Exhibit J attached hereto to be executed by the Borrowers and the Administrative Agent upon the satisfaction (or waiver in accordance with Section 9.2) of each of the conditions precedent contained in Section 4.1 hereof.

 

“Change in Control” means (a) (i) prior to the completion of a Qualified Public Offering, Ansary Related Parties shall cease to own, free and clear of all Liens or other encumbrances, Equity Interests in the Company possessing at least 50.01% of the total voting power of the Equity Interests in the Company entitled to vote on a fully diluted basis and (ii) after the completion of a Qualified Public Offering, any Unrelated Person or Unrelated Persons, acting together, which would constitute a Group together with Affiliates and Related Persons thereof (in each case also constituting Unrelated Persons) shall at any time either (1) Beneficially Own more than 35% of the aggregate voting power of the Equity Interests in the Company entitled to vote on a fully diluted basis and such percentage owned is greater than the percentage of the aggregate voting power of the Equity Interests in the Company entitled to vote on a fully diluted basis then owned by Ansary Related Parties, or (2) succeed in having a sufficient number of its or their nominees elected to the board of directors/managers of the Company such that such nominees, when added to any existing director remaining on such governing body of the Company after such election who is an Affiliate or Related Person of such Person or Group, shall constitute a majority of the governing body of the Company; (b) the Company shall cease to own, directly or indirectly, free and clear of all Liens or other encumbrances (other than Liens created pursuant to a Loan Document) 100% of the outstanding Equity Interests in each Loan Party (other than the Company); (c) occupation of a majority of the seats (other than vacant seats) on the board of directors/managers of the Company by Persons who were neither (i) nominated by the board of directors/managers of the Company nor (ii) appointed by directors/managers so nominated; (d) the acquisition of direct or indirect Control of any Loan Party by any Person or group other than Ansary Related Parties; or (e) so long as any of the Senior Notes are outstanding, any “Change of Control”, “Fundamental Change” or other similar term described in the Senior Notes Indenture.  As used herein (1) “Beneficially Own” means “beneficially own” as defined in Rule 13d-3 and 13d-5 of the Securities Exchange Act of 1934, as amended, or any successor provision thereto; (2) “Group” means a “group” for purposes of Section 13(d) of the Securities Exchange Act of 1934, as amended; (3) “Unrelated Person” means at any time any Person other than Ansary Related Parties and the Company; and (4) “Related Person” of any Person means any other Person owning (A) 10% or more of the outstanding Equity Interests of such Person or (B) 10% or more of the voting power of the Equity Interests in such Person entitled to vote on a fully diluted basis.

 

“Change in Law” means (a) the adoption of any law, rule, regulation or treaty (including any rules or regulations issued under or implementing any existing law) after the date of this Agreement, (b) any change in any law, rule, regulation or treaty or in the interpretation or 

 

16

 

application thereof by any Governmental Authority after the date of this Agreement or (c) compliance by any Lender or the Issuing Bank (or, for purposes of Section 2.16(b), by any lending office of such Lender or by such Lender’s or the Issuing Bank’s holding company, if any) with any request, guideline or directive (whether or not having the force of law) of any Governmental Authority made or issued after the date of this Agreement; provided that notwithstanding anything herein to the contrary, (i) the Dodd-Frank Wall Street Reform and Consumer Protection Act and all requests, rules, guidelines or directives thereunder, issued in connection therewith or in implementation thereof, and (ii) all requests, rules, guidelines and directives promulgated by the Bank for International Settlements, the Basel Committee on Banking Supervision (or any successor or similar authority) or the United States or regulatory authorities, in each case pursuant to Basel III, shall in each case be deemed to be a “Change in Law”, regardless of the date enacted, adopted, issued or implemented.

 

“Chase” means JPMorgan Chase Bank, N.A., a national banking association, in its individual capacity, and its successors.

 

“Chase Canada” means JPMorgan Chase Bank, N.A., Toronto Branch, in its individual capacity and not as the Canadian Administrative Agent or Canadian Collateral Agent.

 

“Class”, when used in reference to any Loan or Borrowing, refers to whether such Loan, or the Loans comprising such Borrowing, are US Revolving Loans, Canadian Revolving Loans, Swingline Loans, US Protective Advances, Canadian Protective Advances, US Overadvances or Canadian Overadvances.

 

“Code” means the Internal Revenue Code of 1986, as amended from time to time.

 

“Collateral” means any and all property owned, leased or operated by a Person covered by the Collateral Documents and any and all other property of any Loan Party, now existing or hereafter acquired, that may at any time be or become subject to a security interest or Lien in favor of either the US Collateral Agent or the Canadian Collateral Agent, on behalf of the Agents, the Lenders, the Export-Related Lender and the Other Secured Parties to secure all or a portion of the Secured Obligations, as applicable.

 

“Collateral Access Agreement” has the meaning assigned to such term in the Security Agreements.

 

“Collateral Documents” means, collectively, the Security Agreements, the Mortgages and any other documents granting a Lien upon the Collateral as security for payment of the Secured Obligations.

 

“Collection Accounts” has the meaning assigned to such term in the Security Agreements.

 

“Commitment” means any US Commitment or Canadian Commitment and “Commitments” means all such Commitments collectively.

 

“Commitment Fee Rate” means the applicable rate per annum set forth below under the caption “Commitment Fee Rate” on the average daily unused portion of the US Revolving 

 

17

 

Commitments and, without duplication, the Canadian Revolving Commitment payable monthly in arrears to the Administrative Agent for the account of the Lenders (including the Administrative Agent and the Canadian Administrative Agent), as applicable, commencing on the first day of the first fiscal quarter following the Effective Date, provided  that until the first calendar day of the month following the date of delivery to the Administrative Agent, pursuant to Section 5.1, of the Company’s consolidated financial information and related compliance certificate for the Company’s fiscal quarter ending January 31, 2012, the “Commitment Fee Rate” shall be the applicable rate per annum set forth below in Category 1:

 

	
Category
    	
 
    	
Average Amount Utilized
    	
 
    	
Commitment Fee Rate
    	
 
    
	
1
    	
 
    	
Less than or equal to 35% of the Commitments
    	
 
    	
0.50
    	
%
    
	
2
    	
 
    	
Greater than 35% of the Commitments
    	
 
    	
0.375
    	
%
    

 

For purposes of the foregoing and subject to the foregoing proviso, (a) the Commitment Fee Rate shall be determined as of the end of each fiscal quarter of the Borrowers upon receipt of the Company’s annual or quarterly consolidated financial statements and related compliance certificate delivered pursuant to Section 5.1 based upon the average daily unused portion of the Commitments for such preceding fiscal quarter as determined by the Administrative Agent and (b) each change in the Commitment Fee Rate resulting from a change in the amount of the Commitments utilized shall be effective during the period commencing on and including the first calendar day of the month following the date of delivery to the Administrative Agent of such consolidated financial statements and  related compliance certificate and ending on the date immediately preceding the effective date of the next such change.

 

“Commitment Increase Agreement” means a Commitment Increase Agreement entered into by a Lender in accordance with Section 2.24 and accepted by the Administrative Agent or the Canadian Administrative Agent, as applicable, in the form of Exhibit G, or any other form approved by the Administrative Agent or the Canadian Administrative Agent, as applicable.

 

“Commitment Increase Notice” has the meaning assigned to such term in Section 2.24 hereof.

 

“Commitment Reserves” means any and all reserves which the Administrative Agent deems necessary, in its Permitted Discretion, to establish with respect to the maximum amount available for borrowing under the Revolving Commitments.  Such Commitment Reserves include, without limitation, reserves for accrued and unpaid interest on the Obligations, reserves for Swap Obligations, the Special Vendor Payable Reserve, the Rent Reserve, reserves for other charges at consignee, warehouse and bailee locations, reserves for customs and shipping charges for inventory in transit and reserves for taxes, fees, assessments, and other governmental charges, and the Canadian Employee Funding Liability Reserve; provided, that Commitment Reserves shall not include any reserves (a) specifically described under the definition of “Borrowing Base Reserves” or (b) for scheduled payments of amounts then owing under the Senior Notes to the extent the Availability Block is then in effect.

 

“Commitment Schedule” means the Schedule attached hereto identified as such.

 

18

 

“Company” has the meaning assigned to such term in the initial paragraph hereof.

 

“Contract Period” means the term of a B/A and related B/A Loan selected by the Canadian Borrowers in accordance with Section 2.8 or Section 2.14 commencing on the date of the Borrowing or such B/A Loan or any rollover date, as applicable, of such B/A (which shall be a Business Day) and expiring on a Business Day which shall be either one month, two months, three months, or with the consent of the Canadian Lenders, six months later; provided, that, no Contract Period shall extend beyond the Maturity Date.  Notwithstanding the foregoing, whenever the last day of any Contract Period would otherwise occur on a day which is not a Business Day, the last day of such Contract Period shall occur on the next succeeding Business Day and such extension of time shall in such case be included in computing the Acceptance Fee in respect of the relevant B/A.

 

“Control” means the possession, directly or indirectly, of the power to direct or cause the direction of the management or policies of a Person, whether through the ability to exercise voting power, by contract or otherwise.  “Controlling” and “Controlled” have meanings correlative thereto.

 

“Controlled Disbursement Accounts” means the Canadian Disbursement Account and the US Disbursement Account together, and “Controlled Disbursement Account” means any one of such accounts individually.

 

“Credit Exposure” means, at any time, the sum of the US Credit Exposure and the Canadian Credit Exposure.

 

“Current Financials” means, as of any day, the financial statements and other related information for any applicable period most recently required to be delivered to the Administrative Agent pursuant to Section 5.1(a), Section 5.1(b) and Section 5.1(c).

 

“Dated Assets” has the meaning assigned to such term in Section 2.23(e) hereof.

 

“Dated Liabilities” has the meaning assigned to such term in Section 2.23(e) hereof.

 

“Default” means any event or condition which constitutes an Event of Default or which upon notice, lapse of time or both would, unless cured or waived, become an Event of Default.

 

“Defaulting Lender” means any Lender, that has (a) failed, within two (2) Business Days of the date required to be funded or paid, to (i) fund any portion of its Loans (ii) fund any portion of its participations in Letters of Credit or Swingline Loans or (iii) pay over to any Loan Party any other amount required to be paid by it hereunder; (b) has notified any Borrower or any Loan Party in writing, or has made a public statement, to the effect that it does not intend or expect to comply with any of its funding obligations under this Agreement or generally under other agreements in which it commits to extend credit, (c) has failed, within three (3) Business Days after request by a Loan Party, acting in good faith, to provide a certification in writing from an authorized officer of such Lender that it will comply with its obligations to fund prospective Loans and participations in then outstanding Letters of Credit and Swingline Loans under this Agreement, provided that such Lender shall cease to be a Defaulting Lender pursuant to this 

 

19

 

clause (c) upon such Loan Party’s receipt of such certification in form and substance satisfactory to it and the Administrative Agent, or (d) has become the subject of a Bankruptcy Event.

 

“Detroit Diesel” means Detroit Diesel Corporation, MTU Detroit Diesel, Inc., MTU Friedrichshafen GmbH, MTU DDC International GmbH, DDC MTU Americas Company L.L.C., DaimlerChrysler AG, DaimlerChrysler Off-Highway Holding GmbH and their Affiliates.

 

“Deutz” means Deutz Corporation and its Affiliates.

 

“Dilution Factors” means, without duplication, with respect to any period, the aggregate amount of all deductions, credit memos, returns, adjustments, allowances, bad debt write-offs and other non-cash credits which are recorded to reduce accounts receivable in a manner consistent with current and historical accounting practices of the Borrowers.

 

“Dilution Ratio” means, at any date, the amount (expressed as a percentage) equal to (a) the aggregate amount of the applicable Dilution Factors for the twelve (12) most recently ended fiscal months divided by (b) total gross sales for the twelve (12) most recently ended fiscal months.

 

“Dilution Reserve” means, at any date, the applicable Dilution Ratio multiplied by the Eligible Accounts on such date.

 

“Disclosed Matters” means the actions, suits and proceedings and the environmental matters disclosed in Schedule 3.6.

 

“Discount Proceeds” means for any B/A, an amount (rounded to the nearest whole C$ cent, and with one-half of one C$ cent being rounded upwards) calculated on the applicable date of the Borrowing of which such B/A is a part or any rollover date for such Borrowing by multiplying:  (a) the face amount of the B/A; by (b) the quotient of one divided by the sum of one plus the product of:  (1) the Discount Rate (expressed as a decimal) applicable to such B/A, and (2) a fraction, the numerator of which is the Contract Period of the B/A and the denominator of which is 365 (or 366 in a leap year), with such quotient being rounded up or down to the fifth decimal place, and .000005 being rounded up.

 

“Discount Rate” means, with respect to a B/A for a particular Contract Period being purchased by a Lender on any day, (a) for any lender which is a Schedule I chartered bank under the Bank Act (Canada), the CDOR Rate on such day for such Contract Period; and (b) for any other lender, the lesser of (i) the CDOR Rate on such day for such Contract Period, plus 0.10%, and (ii) the percentage discount rate quoted by such Lender as the percentage discount rate at which such Lender would, in accordance with its normal practices, at or about 10:00 a.m., Toronto, Ontario Canada time, on such date, be prepared to purchase bankers’ acceptances having a face amount and term comparable to the face amount and term of such B/A.

 

“Distribution Division” means the operating divisions of the Borrowers (formerly known as the power products division) engaged in the sale and rental of various industrial equipment; sale of components, replacement parts, accessories and other materials supplied by independent manufacturers; provision of in-shop and on-site repair services for industrial, 

 

20

 

transportation, marine, construction, power generation and material handling equipment; and fabrication, marketing and packaging of engine-driven equipment.

 

“Document” has the meaning assigned to such term in the US Security Agreement.

 

“Dollar Denominated Loans” means US Revolving Loans and any Canadian Revolving Loans which are denominated in Dollars.

 

“Dollar Equivalent” means, on any date of determination, with respect to any amount expressed in C$, the amount of Dollars that may be purchased with such amount of C$ at the Spot Exchange Rate on such date.

 

“Dollars” or “$” (without further designation) refers to lawful money of the United States of America.

 

“EBITDA” means, for any period, Net Income for such period plus (a) without duplication and to the extent deducted in determining Net Income for such period, the sum of (i) Interest Expense for such period, (ii) income tax expense for such period net of tax refunds, (iii) all amounts attributable to depreciation and amortization expense for such period, (iv) any extraordinary non-cash charges for such period, (v) any other non-cash charges for such period and (vi) fees and expenses incurred in connection with a Permitted Acquisition and payable to unrelated third parties during such period; provided that the aggregate amount of such fees and expenses added to EBITDA for all periods pursuant to this clause (vii) shall not exceed $7,500,000, minus (b) without duplication and to the extent included in Net Income, any extraordinary gains and any non-cash items of income for such period, all calculated for the Company and its Subsidiaries on a consolidated basis in accordance with GAAP but excluding from such calculation any results of operations of each Excluded Subsidiary.  For purposes of determining EBITDA for any period, if the Borrowers make one or more Permitted Acquisitions during such period for aggregate consideration in excess of $15,000,000, EBITDA will be determined on a pro forma basis (determined in a manner acceptable to the Administrative Agent in its Permitted Discretion) giving effect to such Permitted Acquisition(s) as if it/they had occurred on the first day of such period.

 

“Effective Date” means the date on which the conditions specified in Section 4.1 are satisfied (or waived in accordance with Section 9.2).

 

“Eligible Accounts” means, at any time, the Accounts of the Borrowers which the Administrative Agent determines in its Permitted Discretion are eligible as the basis for the extension of Revolving Loans, Swingline Loans and the issuance of Letters of Credit hereunder.  Without limiting the Administrative Agent’s discretion provided herein, Eligible Accounts shall not include any Account:

 

(a)           which is not subject to a first priority perfected security interest in favor of the US Collateral Agent or the Canadian Collateral Agent, as applicable (subject to Permitted Senior Encumbrances);

 

(b)           which is subject to any Lien other than (i) a Lien in favor of the US Collateral Agent or the Canadian Collateral Agent, as applicable, and (ii) Permitted Senior Encumbrances 

 

21

 

and other Permitted Encumbrances which other Permitted Encumbrances do not have priority over the Lien in favor of the US Collateral Agent or the Canadian Collateral Agent, as applicable;

 

(c)           which is unpaid more than 90 days after the date of the original invoice therefor or more than 60 days after the original due date, or which has been written off the books of a Borrower or otherwise designated as uncollectible;

 

(d)           which is owing by an Account Debtor for which more than 50% of the Accounts owing from such Account Debtor and its Affiliates are otherwise ineligible hereunder;

 

(e)           which is owing by an Account Debtor other than any Account Debtor whose securities are rated BBB or better by S&P or Baa3 or better by Moody’s to the extent the aggregate amount of Accounts owing from such Account Debtor and its Affiliates to the Borrowers exceeds 15% of the aggregate Eligible Accounts (to the extent of such excess);

 

(f)            with respect to which any covenant, representation, or warranty contained in this Agreement or in any Security Agreement has been breached or is not true;

 

(g)           which (i) does not arise from the sale of goods or performance of services in the ordinary course of business, (ii) is not evidenced by an invoice or other documentation satisfactory to the Administrative Agent which has been sent to the Account Debtor, (iii) represents a progress billing, (iv) is contingent upon a Borrower’s completion of any further performance, (v) represents a sale on a bill-and-hold, guaranteed sale, sale-and-return, sale on approval, consignment, cash-on-delivery or any other repurchase or return basis or (vi) relates to payments of interest;

 

(h)           for which the goods giving rise to such Account have not been shipped to the Account Debtor or for which the services giving rise to such Account have not been performed by a Borrower or if such Account was invoiced more than once (except to the extent such invoice was not redated as of a date later than the original invoice date and such account is not otherwise compromised);

 

(i)            with respect to which any check or other instrument of payment has been returned uncollected for any reason;

 

(j)            which is owed by an Account Debtor which has (i) applied for, suffered, or consented to the appointment of any receiver, custodian, trustee, or liquidator of its assets, (ii) has had possession of all or a material part of its property taken by any receiver, custodian, trustee or liquidator, (iii) filed, or had filed against it, any request or petition for liquidation, reorganization, arrangement, adjustment of debts, adjudication as bankrupt, winding-up, or voluntary or involuntary case under any state or federal bankruptcy laws, (iv) has admitted in writing its inability, or is generally unable, to pay its debts as they become due, (v) become insolvent, or (vi) ceased operation of its business;

 

(k)           which is owed by any Account Debtor which has sold all or a substantially all of its assets;

 

22

 

(l)            which is owed by an Account Debtor which (i) does not maintain its chief executive office in the U.S. or Canada or (ii) is not organized under applicable law of the U.S., any state of the U.S., Canada, or any province of Canada unless, in either case, such Account is either (1) backed by a letter of credit acceptable to the Administrative Agent which is in the possession of, has been assigned to and is directly drawable by the US Collateral Agent or the Canadian Collateral Agent (as applicable), or (2) for such Accounts in an aggregate amount up to $12,500,000 (or such greater amount as may be determined from time to time by the Administrative Agent in its sole and absolute discretion), backed by credit insurance on terms and issued by a provider acceptable to the Administrative Agent;

 

(m)          which is owed in any currency other than (i) with respect to US Borrowers, Dollars, and (ii) with respect to Canadian Borrowers, Dollars or C$;

 

(n)           which is owed by (i) the government (or any department, agency, public corporation, or instrumentality thereof) of any country other than the U.S. or Canada unless such Account is backed by a letter of credit acceptable to the Administrative Agent and which is in the possession of the US Collateral Agent or the Canadian Collateral Agent (as applicable), or (ii) the government of the U.S. or Canada, or any department, agency, public corporation, or instrumentality thereof, unless the Federal Assignment of Claims Act of 1940, as amended (31 U.S.C. § 3727 et seq. and 41 U.S.C. § 15 et seq.), or the Financial Administration Act (Canada) or similar provincial or territorial legislation or municipal ordinance of similar purpose, and any other steps necessary to perfect the Lien of the US Collateral Agent or Canadian Collateral Agent (as applicable) in such Account have been complied with to the US Collateral Agent’s or Canadian Collateral Agent’s (as applicable) satisfaction;

 

(o)           which is owed by any Affiliate, employee, officer, director, agent or stockholder of any Loan Party;

 

(p)           which, for any Account Debtor, exceeds a credit limit determined by the Administrative Agent, to the extent of such excess;

 

(q)           which is owed by an Account Debtor or any Affiliate of such Account Debtor to which any Loan Party is indebted, but, subject to clause (y) of this definition, only to the extent of such indebtedness or is subject to any security, deposit, progress payment, retainage or other similar advance made by or for the benefit of an Account Debtor, in each case to the extent thereof;

 

(r)            which is subject to any counterclaim, deduction, defense, setoff or dispute but only to the extent of any such counterclaim, deduction, defense, setoff or dispute;

 

(s)           which is evidenced by any promissory note, chattel paper, or instrument, except for Accounts arising out of the rental of equipment in the ordinary course of business and which are evidenced by chattel paper;

 

(t)            which is owed by an Account Debtor located in any jurisdiction which requires filing of a “Notice of Business Activities Report” or other similar report in order to permit a Borrower to seek judicial enforcement in such jurisdiction of payment of such Account, unless such Borrower has filed such report or qualified to do business in such jurisdiction;

 

23

 

(u)           with respect to which any Borrower has made any agreement with the Account Debtor for any reduction thereof, other than discounts and adjustments given in the ordinary course of business, or any Account which was partially paid and such Borrower created a new receivable for the unpaid portion of such Account;

 

(v)           which does not comply in all material respects with the requirements of all applicable laws and regulations, whether federal, state, provincial or local, including without limitation the Federal Consumer Credit Protection Act, the Federal Truth in Lending Act and Regulation Z of the Board;

 

(w)          which is for goods that have been sold under a purchase order or pursuant to the terms of a contract or other agreement or understanding (written or oral) that indicates or purports that any Person other than the Borrowers have or have had an ownership interest in such goods, or which indicates any party other than a Borrower as payee or remittance party;

 

(x)            which the Administrative Agent determines in its Permitted Discretion may not be paid by reason of the Account Debtor’s inability to pay or which the Administrative Agent otherwise determines in its Permitted Discretion is unacceptable for any reason whatsoever;

 

(y)           which is owed by any vendor or supplier to any Loan Party; or

 

(z)            which is an Export-Related Accounts Receivable.

 

In the event that an Account which was previously an Eligible Account ceases to be an Eligible Account hereunder, the Borrowers or a Borrower Representative shall notify the Administrative Agent thereof on and at the time of submission of the next US Borrowing Base Certificate, Export-Related Borrowing Base Certificate or Canadian Borrowing Base Certificate (as applicable).  In determining the amount of an Eligible Account (which shall be the Dollar Equivalent at such time of any amount denominated in C$), the face amount of an Account shall be reduced by, without duplication, to the extent not reflected in such face amount, (i) the amount of all accrued and actual discounts, claims, credits or credits pending, promotional program allowances, price adjustments, finance charges or other allowances (including any amount that the Borrowers may be obligated to rebate to an Account Debtor pursuant to the terms of any agreement or understanding (written or oral)) and (ii) the aggregate amount of all cash received in respect of such Account but not yet applied by the Borrowers to reduce the amount of such Account.  Standards of eligibility may be changed from time to time solely by the Administrative Agent in the exercise of its Permitted Discretion, with any such changes which are more restrictive to be effective three (3) days after delivery of notice thereof to the Borrowers and the Lenders.

 

“Eligible Equipment” means the equipment owned by a Borrower and meeting each of the following requirements:

 

(a)           such Borrower has good title to such equipment;

 

(b)           such Borrower has the right to subject such equipment to a Lien in favor of the US Collateral Agent; such equipment is subject to a first priority perfected Lien in favor of the US Collateral Agent subject to Permitted Senior Encumbrances and is free and clear of all other 

 

24

 

Liens of any nature whatsoever (except for Permitted Senior Encumbrances and other Permitted Encumbrances which other Permitted Encumbrances do not have priority over the Lien in favor of the US Collateral Agent);

 

(c)           the full purchase price for such equipment has been paid by such Borrower;

 

(d)           such equipment is located on premises (i) owned by a US Borrower, which premises are subject to a first priority perfected Lien in favor of the US Collateral Agent, or (ii) leased by such Borrower where (x) the lessor has delivered to the US Collateral Agent a Collateral Access Agreement or (y) a Rent Reserve with respect to such facility has been established by the Administrative Agent in its Permitted Discretion;

 

(e)           such equipment is in good working order and condition (ordinary wear and tear excepted) and is used or held for use by such Borrower in the ordinary course of business of such Borrower;

 

(f)            such equipment is not subject to any agreement which restricts the ability of such Borrower to use, sell, transport or dispose of such equipment or which restricts the US Collateral Agent’s ability to take possession of, sell or otherwise dispose of such equipment;

 

(g)           such equipment does not constitute “fixtures” under the applicable laws of the jurisdiction in which such equipment is located; and

 

(h)           with respect to which any covenant, representation, or warranty contained in this Agreement or any Security Agreement has been breached or is not true and which does not conform to all standards imposed by any Governmental Authority.

 

“Eligible Inventory” means, at any time, the Inventory of the Borrowers which the Administrative Agent determines in its Permitted Discretion is eligible as the basis for the extension of Revolving Loans, Swingline Loans and the issuance of Letters of Credit hereunder.  Without limiting the Administrative Agent’s discretion provided herein, Eligible Inventory shall not include any Inventory:

 

(a)           which is not subject to a first priority perfected Lien in favor of the US Collateral Agent or the Canadian Collateral Agent (as applicable) subject in each case to Permitted Senior Encumbrances;

 

(b)           which is subject to any Lien other than (i) a Lien in favor of the US Collateral Agent or the Canadian Collateral Agent and (ii) Permitted Senior Encumbrances and other Permitted Encumbrances which other Permitted Encumbrances do not have priority over the Lien in favor of the US Collateral Agent or the Canadian Collateral Agent (as applicable);

 

(c)           which is, in the Administrative Agent’s opinion, obsolete, unmerchantable, defective, used, unfit for sale, not salable at prices approximating at least the cost of such Inventory in the ordinary course of business or unacceptable due to age, type, category and/or quantity;

 

25

 

(d)           with respect to which any covenant, representation, or warranty contained in this Agreement or any Security Agreement has been breached or is not true and which does not conform to all standards imposed by any Governmental Authority;

 

(e)           in which any Person other than a Borrower shall (i) have any direct or indirect ownership, interest or title to such Inventory or (ii) be indicated on any purchase order or invoice with respect to such Inventory as having or purporting to have an interest therein;

 

(f)            which is not finished goods or which constitutes work-in-process (other than work-in-process inventory expressly included in the definition of the term US Borrowing Base or Canadian Borrowing Base, as applicable), raw materials, inactive, spare or, except as expressly included in the definition of the term US Borrowing Base or Canadian Borrowing Base (as applicable), replacement parts, subassemblies, packaging and shipping material, manufacturing supplies, samples, prototypes, displays or display items, bill-and-hold goods, goods that are returned or marked for return, repossessed goods, defective or damaged goods, goods held on consignment, or goods which are not of a type held for sale in the ordinary course of business;

 

(g)           which is not located in the U.S. or in Canada or which is in transit with a common carrier from vendors and suppliers;

 

(h)           which is located in any location leased by a Borrower unless (i) the lessor has delivered to the US Collateral Agent or the Canadian Collateral Agent (as applicable) a Collateral Access Agreement or (ii) a Rent Reserve with respect to such facility has been established by the Administrative Agent in its Permitted Discretion;

 

(i)            which is located in any third party warehouse or is in the possession of a bailee (other than a third party processor) and is not evidenced by a Document, unless (i) such warehouseman or bailee has delivered to the US Collateral Agent or the Canadian Collateral Agent (as applicable) a Collateral Access Agreement and such other documentation as the US Collateral Agent or the Canadian Collateral Agent (as applicable) may require or (ii) an appropriate Reserve has been established by the Administrative Agent in its Permitted Discretion;

 

(j)            which is being processed offsite at a third party location or outside processor, or is in-transit to or from said third party location or outside processor;

 

(k)           which is a discontinued product or component thereof;

 

(l)            which is the subject of a consignment by a Borrower as consignor;

 

(m)          which is perishable;

 

(n)           which contains or bears any intellectual property rights licensed to a Borrower unless the US Collateral Agent or the Canadian Collateral Agent (as applicable) is satisfied that it may sell or otherwise dispose of such Inventory without (i) infringing the rights of such licensor, (ii) violating any contract with such licensor, or (iii) incurring any liability with respect to payment of royalties other than royalties incurred pursuant to sale of such Inventory under the current licensing agreement;

 

26

 

(o)           which is not reflected in a current perpetual inventory report of the Borrowers;

 

(p)           with respect to Inventory consisting of rental equipment or rolling stock, which (x) is not in good working order and condition (ordinary wear and tear excepted), or (y) is subject to any agreement (other than a short term rental agreement entered into in the ordinary course of the Borrowers’ business) which restricts the ability of the Borrowers to use, sell, transport or dispose of such equipment or which restricts the US Collateral Agent’s or the Canadian Collateral Agent’s (as applicable) ability to take possession of, sell or otherwise dispose of such equipment;

 

(q)           which is subject to repossession under the Bankruptcy and Insolvency Act (Canada) except to the extent that the applicable vendor has entered into an agreement with the Canadian Collateral Agent waiving its right to repossession, which agreement shall be acceptable to the Administrative Agent;

 

(r)            which the Administrative Agent otherwise determines in its Permitted Discretion is unacceptable for any reason whatsoever; or

 

(s)           which is Export-Related Inventory.

 

In the event that Inventory which was previously Eligible Inventory ceases to be Eligible Inventory hereunder, the Borrowers or a Borrower Representative shall notify the Administrative Agent thereof on and at the time of submission of the next US Borrowing Base Certificate, Export-Related Borrowing Base Certificate or Canadian Borrowing Base Certificate.  Standards of eligibility may change from time to time solely by the Administrative Agent in the exercise of its Permitted Discretion, with any such changes which are more restrictive to be effective three (3) days after delivery of notice thereof to a Borrower Representative and the Lenders.

 

“Eligible Mortgaged Real Property” means the Real Property owned by a Borrower described on Schedule 3.5, and the Real Property owned by a Borrower that is described by the Borrowers to the Administrative Agent or the Canadian Administrative Agent, as the case may be, on or prior to March 31, 2012 and upon the Administrative Agent’s and the Canadian Administrative Agent’s receipt of such information Schedule 3.5 shall be deemed to be amended to include such Real Property, in each case for which each of the following statements is accurate and complete (and each Borrower by including such Real Property in the Fixed Asset Component of the US Borrowing Base or the Canadian Borrowing Base (as applicable) shall be deemed to represent and warrant to the Agents, the Issuing Bank and each Lender the accuracy and completeness of such statements):

 

(a)           such Borrower holds good and marketable title to the Real Property;

 

(b)           the Real Property is subject to a first priority perfected security interest in favor of the US Collateral Agent or the Canadian Collateral Agent (as applicable), subject in each case to Permitted Senior Encumbrances, securing the Secured Obligations; and 

 

(c)           the Real Property is not subject to any Lien, except for Permitted Encumbrances and Liens in favor of the US Collateral Agent or the Canadian Collateral Agent (as applicable) securing the Secured Obligations.

 

27

 

“EMDSI” has the meaning set forth in the initial paragraph hereof.

 

“Environmental Laws” means all laws, rules, regulations, codes, ordinances, orders, decrees, judgments, injunctions, notices or binding agreements issued, promulgated or entered into by any Governmental Authority, relating in any way to the environment, preservation or reclamation of natural resources, the management, release or threatened release of any Hazardous Material or to health and safety matters.

 

“Environmental Liability” means any liability, contingent or otherwise (including any liability for damages, costs of environmental remediation, fines, penalties or indemnities), of any Borrower or any Subsidiary directly or indirectly resulting from or based upon (a) violation of any Environmental Law, (b) the generation, use, handling, transportation, storage, treatment or disposal of any Hazardous Materials, (c) exposure to any Hazardous Materials, (d) the release or threatened release of any Hazardous Materials into the environment or (e) any contract, agreement or other consensual arrangement pursuant to which liability is assumed or imposed with respect to any of the foregoing.

 

“Equity Interests” means shares of capital stock, partnership interests, membership interests in a limited liability company, beneficial interests in a trust or other equity ownership interests in a Person, and any warrants, options or other rights entitling the holder thereof to purchase or acquire any such equity interest.

 

“ERISA” means the Employee Retirement Income Security Act of 1974, as amended from time to time.

 

“ERISA Affiliate” means any trade or business (whether or not incorporated) that, together with any Borrower, is treated as a single employer under Section 414(b) or (c) of the Code or, solely for purposes of Section 302 of ERISA and Section 412 of the Code, is treated as a single employer under Section 414 of the Code.

 

“ERISA Event” means (a) any “reportable event”, as defined in Section 4043 of ERISA or the regulations issued thereunder with respect to a Plan (other than an event for which the 30 day notice period is waived); (b) the existence with respect to any Plan of an “accumulated funding deficiency” (as defined in Section 412 of the Code or Section 302 of ERISA), whether or not waived; (c) the filing pursuant to Section 412(d) of the Code or Section 303(d) of ERISA of an application for a waiver of the minimum funding standard with respect to any Plan; (d) the incurrence by any Borrower or any of its ERISA Affiliates of any liability under Title IV of ERISA with respect to the termination of any Plan; (e) the receipt by any Borrower or any ERISA Affiliate from the PBGC or a plan administrator of any notice relating to an intention to terminate any Plan or Plans or to appoint a trustee to administer any Plan; (f) the incurrence by any Borrower or any of its ERISA Affiliates of any liability with respect to the withdrawal or partial withdrawal from any Plan or Multiemployer Plan; or (g) the receipt by any Borrower or any ERISA Affiliate of any notice, or the receipt by any Multiemployer Plan from the Borrower or any ERISA Affiliate of any notice, concerning the imposition of Withdrawal Liability or a determination that a Multiemployer Plan is, or is expected to be, insolvent or in reorganization, within the meaning of Title IV of ERISA.

 

28

 

“Eurodollar”, when used in reference to any Loan or Borrowing, refers to whether such Loan, or the Loans comprising such Borrowing, are bearing interest at a rate determined by reference to the Adjusted LIBO Rate.

 

“Event of Default” has the meaning assigned to such term in Article VII.

 

“Excluded Subsidiary” means any Subsidiary of the Company which is not a Loan Party.  The Excluded Subsidiaries on the date hereof are Stewart & Stevenson Truck Holdings LLC, Stewart & Stevenson de Venezuela, S.A., Transmissiones y Embragues, S.A., Stewart & Stevenson de las Americas Colombia Ltda. and Stewart & Stevenson Hong Kong Limited.

 

“Excluded Taxes” means, with respect to any Agent, any Lender, the Issuing Bank or any other recipient of any payment to be made by or on account of any obligation of the Borrowers hereunder, (a) income or franchise taxes imposed on or measured by net income of any Agent, any Lender, the Issuing Bank or any other recipient of any payment to be made by or on account of any obligation of the Borrowers (i)(A) by the United States of America, or by any jurisdiction under the laws of which such recipient is organized or in which its principal office is located or (B) that are Other Connection Taxes, or (ii) in the case of any Lender, in which its applicable lending office is located; (b) any branch profits taxes imposed by the United States of America or any similar tax imposed by any other jurisdiction in which such recipient is located; (c) in the case of a Foreign Lender (other than an assignee pursuant to a request by the Borrowers under Section 2.20(b)), any withholding tax that (i) is imposed on amounts payable to such Foreign Lender at the time such Foreign Lender becomes a party to this Agreement (or designates a new lending office), except to the extent that such Foreign Lender (or its assignor, if any) was entitled, at the time of designation of a new lending office (or assignment), to receive additional amounts from the Borrowers with respect to such withholding Taxes pursuant to Section 2.18(a), or (ii) is attributable to such Foreign Lender’s failure or inability to comply with Section 2.18(f); and (d) U.S. federal withholding taxes imposed under FATCA. Notwithstanding the foregoing, “Excluded Taxes” shall not include withholding taxes attributable to any amount payable by a US Loan Party pursuant to the Guarantee, a Security Agreement or any other Loan Document in respect of the Obligations of a Canadian Loan Party.

 

“Ex-Im Bank” means The Export-Import Bank of the United States and its successors and assigns.

 

“Existing Borrowers” has the meaning given such term in the recitals hereto.

 

“Existing Credit Agreement” has the meaning given such term in the recitals hereto.

 

“Export-Related Accounts Receivable” has the meaning assigned to such term in the US Security Agreement.

 

“Export-Related Borrowing Base” has the meaning given to such term in the Export-Related Loan Agreement.

 

“Export-Related Borrowing Base Certificate” means a certificate, signed and certified as accurate and complete by a Financial Officer of the Borrower Representative US, in form and substance acceptable to the Administrative Agent in its Permitted Discretion.

 

29

 

“Export-Related Collection Account” has the meaning assigned to such term in the US Security Agreement.

 

“Export-Related Financing Documents” shall mean the “Financing Documents” as defined in the Export-Related Loan Agreement, each to be in form and substance satisfactory to Administrative Agent in its Permitted Discretion.

 

“Export-Related General Intangibles” has the meaning assigned to such term in the US Security Agreement.

 

“Export-Related Inventory” has the meaning assigned to such term in the US Security Agreement.

 

“Export-Related Lender” means JPMorgan Chase Bank, N.A. as the lender under the Export-Related Loan Agreement, and its successors and assigns in such capacity.

 

“Export-Related Loan Agreement” means that certain Fast Track Export Loan Agreement dated as of October 31, 2010 by and among the US Borrowers and the Export-Related Lender, as the same may be amended, restated, or otherwise modified from time to time.

 

“Export-Related Obligations” shall mean all “Borrowers’ Obligations” as defined in the Export-Related Loan Agreement.

 

“Export-Related Priority Collateral” means the Export-Related Accounts Receivable, the Export-Related General Intangibles and the Export-Related Inventory and Proceeds of the same.

 

“Export-Related Reserve” means a Borrowing Base Reserve which, at any time, shall be in an amount equal to ten percent (10%) of the Export-Related Obligations then outstanding.

 

“FATCA” means Sections 1471 through 1474 of the Code, as of the date of this Agreement (or any amended or successor version that is substantively comparable and not materially more onerous to comply with) and any regulations or official interpretations thereof.

 

“Fee Letter” means one or more letter agreements regarding fees, executed by Chase and/or certain of its Affiliates and accepted and agreed to by the Company as the same have been or may hereafter be amended from time to time.

 

“Federal Funds Effective Rate” means, for any day, the weighted average (rounded upwards, if necessary, to the next 1/100 of 1%) of the rates on overnight Federal funds transactions with members of the Federal Reserve System arranged by Federal funds brokers, as published on the next succeeding Business Day by the Federal Reserve Bank of New York, or, if such rate is not so published for any day that is a Business Day, the average (rounded upwards, if necessary, to the next 1/100 of 1%) of the quotations for such day for such transactions received by the Administrative Agent from three (3) Federal funds brokers of recognized standing selected by it.

 

30

 

“FEMA” means the Federal Emergency Management Agency, a component of the U.S. Department of Homeland Security that administers the National Flood Insurance Program.

 

“Financial Officer” means the chief financial officer, principal accounting officer, treasurer or controller of a Borrower.  Unless otherwise specified, all references to a Financial Officer herein means a Financial Officer of all Borrowers.

 

“Fixed Asset Collateral” means Collateral constituting (a) the Eligible Mortgaged Real Property described in Schedule 3.5, and the Eligible Mortgaged Real Property that is identified by the Borrowers to the Administrative Agent or the Canadian Administrative Agent, as the case may be, on or prior to March 31, 2012 and upon the Administrative Agent or the Canadian Administrative Agent’s receipt of such information Schedule 3.5 shall be deemed to be amended to include such Real Property, in each case, together with any fixtures thereon, and (b) Eligible Equipment, in each case owned by a US Borrower or a Canadian Borrower.

 

“Fixed Asset Component Limit” means $50,000,000.

 

“Fixed Charges” means, with reference to any period, without duplication, cash Interest Expense (including the interest component of Capital Lease Obligations), plus scheduled principal payments on Indebtedness made during such period (including the principal component of Capital Lease Obligations but which shall exclude mandatory prepayments made pursuant to Section 2.11(d)), plus dividends or distributions paid in cash during such period (other than dividends or distributions paid from a Borrower or Subsidiary of a Borrower to a Borrower), all calculated for the Borrowers and their Subsidiaries on a consolidated basis.

 

“Fixed Charge Coverage Ratio” means, with reference to any period, the ratio of the following calculated for such period:  (a) EBITDA minus Non-Financed Capital Expenditures minus income tax expenses paid in cash to (b) Fixed Charges, all calculated for the Borrowers and their Subsidiaries other than any Excluded Subsidiary on a consolidated basis in accordance with GAAP.

 

“Foreign Lender” means, in respect of a Borrower, any Agent, any Lender or the Issuing Bank or other recipient of any payment hereunder by or on account of such Borrower that is organized under the laws of a jurisdiction other than that in which such Borrower is resident for tax purposes.  For purposes of this definition, (a) the United States of America, each State thereof and the District of Columbia shall be deemed to constitute a single jurisdiction and (b) Canada and each province and territory thereof shall be deemed to constitute a single jurisdiction.

 

“GAAP” means generally accepted accounting principles in the United States of America.

 

“Governmental Authority” means the government of the United States of America or Canada, any other nation or any political subdivision thereof, whether state, provincial or local, and any agency, authority, instrumentality, regulatory body, court, central bank or other entity exercising executive, legislative, judicial, taxing, regulatory or administrative powers or functions of or pertaining to government.

 

31

 

“Guarantee” of or by any Person (the “guarantor”) means any obligation, contingent or otherwise, of the guarantor guaranteeing or having the economic effect of guaranteeing any Indebtedness or other obligation of any other Person (the “primary obligor”) in any manner, whether directly or indirectly, and including any obligation of the guarantor, direct or indirect, (a) to purchase or pay (or advance or supply funds for the purchase or payment of) such Indebtedness or other obligation or to purchase (or to advance or supply funds for the purchase of) any security for the payment thereof, (b) to purchase or lease property, securities or services for the purpose of assuring the owner of such Indebtedness or other obligation of the payment thereof, (c) to maintain working capital, equity capital or any other financial statement condition or liquidity of the primary obligor so as to enable the primary obligor to pay such Indebtedness or other obligation or (d) as an account party in respect of any letter of credit or letter of guaranty issued to support such Indebtedness or obligation; provided, that the term Guarantee shall not include endorsements for collection or deposit in the ordinary course of business.

 

“Guaranteed Obligations” has the meaning assigned to such term in Section 10.1.

 

“Hazardous Materials” means all explosive or radioactive substances or wastes, petroleum or petroleum distillates, asbestos or asbestos containing materials, polychlorinated biphenyls, radon gas, infectious or medical wastes and all other substances or wastes of any nature regulated pursuant to any Environmental Law.

 

“Hyster” means the Hyster Company, Hyster Credit Company and their Affiliates.

 

“Indebtedness” of any Person means, without duplication, (a) all obligations of such Person for borrowed money or with respect to deposits or advances of any kind, (b) all obligations of such Person evidenced by bonds, debentures, notes or similar instruments, (c) all obligations of such Person upon which interest charges are customarily paid, (d) all obligations of such Person under conditional sale or other title retention agreements relating to property acquired by such Person, (e) all obligations of such Person in respect of the deferred purchase price of property or services (excluding accounts payable incurred in the ordinary course of business and not more than ninety (90) days overdue), (f) all Indebtedness of others secured by (or for which the holder of such Indebtedness has an existing right, contingent or otherwise, to be secured by) any Lien on property owned or acquired by such Person, whether or not the Indebtedness secured thereby has been assumed, (g) all Guarantees by such Person of Indebtedness of others, (h) all Capital Lease Obligations of such Person, (i) all reimbursement or similar obligations including interest thereon, contingent or otherwise, of such Person as an account party in respect of letters of credit and letters of guaranty, (j) all reimbursement or similar obligations including interest thereon, contingent or otherwise, of such Person in respect of bankers’ acceptances, (k) obligations under any liquidated earn-out and (l) any other Off-Balance Sheet Liability.  The Indebtedness of any Person shall include the Indebtedness of any other entity (including any partnership in which such Person is a general partner) to the extent such Person is liable therefor as a result of such Person’s ownership interest in or other relationship with such entity, except to the extent the terms of such Indebtedness provide that such Person is not liable therefor.

 

32

 

“Indemnified Taxes” means (a) Taxes, other than Excluded Taxes, imposed on or with respect to any payment made by or on account of any obligation of any Loan Party under any Loan Document and (b) Other Taxes.

 

“Indemnitee” has the meaning assigned to such term in Section 9.3(b).

 

“Interest Election Request” means a request by a Borrower Representative to convert or continue a Borrowing in accordance with Section 2.8.

 

“Interest Expense” means, with reference to any period, total cash interest expense (including that attributable to Capital Lease Obligations) of the Borrowers and their Subsidiaries for such period with respect to all outstanding Indebtedness of the Borrowers and their Subsidiaries (including all commissions, discounts and other fees and charges owed with respect to letters of credit and bankers’ acceptance financing and net costs under Swap Agreements in respect of interest rates to the extent such net costs are allocable to such period in accordance with GAAP), calculated on a consolidated basis for the Borrowers and their Subsidiaries for such period in accordance with GAAP.

 

“Interest Payment Date” means (a) with respect to any ABR Loan (other than a Swingline Loan) and any Canadian Prime Rate Loan, the first day of each calendar month in arrears in respect of the previous calendar month, upon any prepayment due to acceleration and the Maturity Date (b) with respect to any Eurodollar Loan, the last day of the Interest Period applicable to the Borrowing of which such Loan is a part and, in the case of a Eurodollar Borrowing with an Interest Period of more than three months’ duration, each day prior to the last day of such Interest Period that occurs at intervals of three months’ duration after the first day of such Interest Period, upon any prepayment due to acceleration and the Maturity Date, and (c) with respect to any Swingline Loan, the day that such Loan is required to be repaid and the Maturity Date.

 

“Interest Period” means with respect to any Eurodollar Borrowing, the period commencing on the date of such Borrowing and ending on the numerically corresponding day in the calendar month that is one, two, three or six months thereafter, as a Borrower Representative may elect; provided, that (i) if any Interest Period would end on a day other than a Business Day, such Interest Period shall be extended to the next succeeding Business Day unless such next succeeding Business Day would fall in the next calendar month, in which case such Interest Period shall end on the next preceding Business Day and (ii) any Interest Period pertaining to a Eurodollar Borrowing that commences on the last Business Day of a calendar month (or on a day for which there is no numerically corresponding day in the last calendar month of such Interest Period) shall end on the last Business Day of the last calendar month of such Interest Period.  For purposes hereof, the date of a Borrowing initially shall be the date on which such Borrowing is made and thereafter shall be the effective date of the most recent conversion or continuation of such Borrowing.

 

“Inventory” has the meaning assigned to such term in the Security Agreements.

 

“Inventory Advance Percentage” means, with respect to a particular category of the Borrowers’ Eligible Inventory, the percentage calculated by dividing (a) 85% (or, in the case of 

 

33

 

the US Borrowers’ Eligible Inventory consisting of rental equipment (other than rolling stock), 90%) of the Net Orderly Liquidation Value of such Inventory as determined pursuant to the most recent Inventory appraisal conducted by the Administrative Agent pursuant to Section 5.12 hereof by (b) the book value of such Inventory as of such appraisal date.

 

“Inventory Limit” shall mean $150,000,000 (subject to an upward adjustment on a dollar for dollar basis not to exceed $200,000,000 upon any increase in the Revolving Commitments pursuant to Section 2.24 hereof).

 

“IRS” means the United States Internal Revenue Service.

 

“Issuing Bank” means Chase, in its capacity as the issuer of Letters of Credit hereunder, and its successors in such capacity as provided in Section 2.6(i).  The Issuing Bank may, in its discretion, arrange for one or more Letters of Credit to be issued by Affiliates of the Issuing Bank, in which case the term “Issuing Bank” shall include any such Affiliate with respect to Letters of Credit issued by such Affiliate.

 

“Joinder Agreement” has the meaning assigned to such term in Section 5.14.

 

“LC Disbursement” means a payment made by the Issuing Bank pursuant to a Letter of Credit.

 

“LC Exposure” means, at any time, the sum of (a) the aggregate undrawn amount of all Letters of Credit outstanding at such time plus (b) the aggregate amount of all LC Disbursements that have not yet been reimbursed by or on behalf of the US Borrowers at such time.  The LC Exposure of any US Revolving Lender at any time shall be its Applicable Percentage of the total LC Exposure at such time.

 

“LC Collateral Account” has the meaning assigned to such term in Section 2.6(j).

 

“LC Shortfall Amount” means an amount equal to the difference of (x) the amount of LC Exposure at such time, less (y) the amount on deposit in the LC Collateral Account at such time which is free and clear of all rights and claims of third parties.

 

“Lender Priority Collateral” means all US Borrowers’ Collateral other than the Export-Related Priority Collateral.

 

“Lender Update” means the Confidential Information Memorandum dated November 2011 and the Management Presentation dated November 16, 2011, in each case relating to the Borrowers and the Transactions.

 

“Lenders” means the Persons listed on the Commitment Schedule and any other Person that shall have become a party hereto pursuant to an Assignment and Assumption, other than any such Person that ceases to be a party hereto pursuant to an Assignment and Assumption.  Unless the context otherwise requires, the term “Lenders” includes the Swingline Lender, but does not include the Export-Related Lender.

 

34

 

“Letter of Credit” means any letter of credit issued pursuant to the Existing Credit Agreement or this Agreement.

 

“Leverage Ratio” means, on any date, the ratio of (a) Total Indebtedness on such date to (b) EBITDA for the period of four consecutive fiscal quarters ended on such date (or, if such date is not the last day of a fiscal quarter, ended on the last day of the fiscal quarter most recently ended prior to such date).

 

“LIBO Rate” means, with respect to any Eurodollar Borrowing for any Interest Period, the rate appearing on Reuters Screen LIBOR01 Page (or on any successor or substitute page of such Service, or any successor to or substitute for such Service, providing rate quotations comparable to those currently provided on such page of such Service, as determined by the Administrative Agent from time to time for purposes of providing quotations of interest rates applicable to dollar deposits in the London interbank market) at approximately 11:00 a.m., London time, two Business Days prior to the commencement of such Interest Period, as the rate for dollar deposits with a maturity comparable to such Interest Period.  In the event that such rate is not available at such time for any reason, then the “LIBO Rate” with respect to such Eurodollar Borrowing for such Interest Period shall be the rate (rounded upwards, if necessary, to the next 1/16 of 1%) at which dollar deposits of $5,000,000 and for a maturity comparable to such Interest Period are offered by the principal London office of the Administrative Agent in immediately available funds in the London interbank market at approximately 11:00 a.m., London time, two Business Days prior to the commencement of such Interest Period.  Notwithstanding the above, to the extent that “LIBO Rate” or “Adjusted LIBO Rate” is used in connection with an ABR Borrowing, such rate shall be determined as modified by the definition of Alternate Base Rate.

 

“Lien” means, with respect to any asset, (a) any mortgage, deed of trust, lien, pledge, hypothecation, encumbrance, charge or security interest in, on or of such asset, (b) the interest of a vendor or a lessor under any conditional sale agreement, capital lease or title retention agreement (or any financing lease having substantially the same economic effect as any of the foregoing) relating to such asset and (c) in the case of securities, any purchase option, call or similar right of a third party with respect to such securities.

 

“Loan Documents” means this Agreement, any promissory notes issued pursuant to this Agreement, any Letter of Credit applications, the Collateral Documents and all other agreements, instruments, documents and certificates identified in Section 4.1 executed and delivered to, or in favor of, any Agent or any Lenders and including all other pledges, powers of attorney, consents, assignments, contracts, notices, letter of credit agreements and all other written matter whether heretofore, now or hereafter executed by or on behalf of any Loan Party, or any employee of any Loan Party, and delivered to any Agent or any Lender in connection with this Agreement or the transactions contemplated thereby.  Any reference in this Agreement or any other Loan Document to a Loan Document shall include all appendices, exhibits or schedules thereto, and all amendments, restatements, supplements or other modifications thereto, and shall refer to this Agreement or such Loan Document as the same may be in effect at any and all times such reference becomes operative.

 

“Loan Guarantor” means each Loan Party.

 

35

 

“Loan Guaranty” means Article X of this Agreement.

 

“Loan Parties” means the US Loan Parties and the Canadian Loan Parties.

 

“Loans” means the loans and advances made by the Lenders pursuant to this Agreement, including Swingline Loans, Overadvances and Protective Advances.

 

“Manufacturing Division” means the operating divisions of the Borrowers (formerly known as the engineered products division) engaged in the design, manufacturing, service and sale of equipment for coiled tubing, acidizing, fracturing, pumping (including nitrogen pumping equipment), railcar movers, seismic equipment systems, silicon controlled rectifiers and switchgear equipment.

 

“Material Adverse Effect” means a material adverse effect on (a) the business, assets, operations, prospects or condition, financial or otherwise, of the Loan Parties taken as a whole, (b) the ability of any Loan Party to perform any of its obligations under the Loan Documents to which it is a party, (c) the Collateral, or the US Collateral Agent’s or the Canadian Collateral Agent’s (as applicable) Liens (on behalf of itself, the other Agents, the Lenders, the Export-Related Lender and the Other Secured Parties) on the Collateral or the priority of such Liens, or (d) the rights of or benefits available to the Agents, the Issuing Bank, the Lenders or the Export-Related Lender thereunder.

 

“Material Indebtedness” means Indebtedness (other than the Loans, the B/As and Letters of Credit), obligations in respect of the Export-Related Loan Agreement or obligations in respect of one or more Swap Agreements, of any one or more of the Borrowers and their Subsidiaries in an aggregate principal amount exceeding $10,000,000.  For purposes of determining Material Indebtedness, the “obligations” of any Borrower or any Subsidiary in respect of any Swap Agreement at any time shall be the maximum aggregate amount (giving effect to any netting agreements) that such Borrower or such Subsidiary would be required to pay if such Swap Agreement were terminated at such time.

 

“Maturity Date” means the earliest of (a) December 23, 2016, (b) the Senior Notes Trigger Date if either of the following conditions are not satisfied by such date: (i) such Senior Notes are not repaid, repurchased, or defeased in full, or refinanced or extended to have a scheduled maturity date at least ninety (90) days after December 23, 2016 or (ii) the sum of (x) the Availability Block and (y) the principal amount of the Senior Notes subject to the Noteholder Agreement, each as established in accordance with the terms and conditions set forth in Section 2.26 is not less than the principal amount of the Senior Notes then outstanding and (c) any date on which the Commitments are reduced to zero or otherwise terminated pursuant to the terms hereof.

 

“Maximum Liability” has the meaning assigned to such term in Section 10.11.

 

“Moody’s” means Moody’s Investors Service, Inc.

 

“Mortgages” means any mortgage, deed of trust or other agreement which conveys or evidences a Lien in favor of the US Collateral Agent or the Canadian Collateral Agent to secure 

 

36

 

the Canadian Secured Obligations or the US Secured Obligations (as applicable) on Real Property of a Loan Party, including any amendment, modification or supplement thereto.

 

“Multiemployer Plan” means a multiemployer plan as defined in Section 4001(a)(3) of ERISA.

 

“Net Income” means, for any period, the consolidated net income (or loss) of the Borrowers and their Subsidiaries, determined on a consolidated basis in accordance with GAAP; provided  that there shall be excluded (a) the income (or deficit) of any Person accrued prior to the date it becomes a Subsidiary of a Borrower or is merged into or consolidated with a Borrower or any of its Subsidiaries, (b) the income (or deficit) of any Person (other than a Subsidiary of a Borrower) in which a Borrower or any of its Subsidiaries has an ownership interest, except to the extent that any such income is actually received by a Borrower or such Subsidiary in the form of dividends or similar distributions and (c) the undistributed earnings of any Subsidiary of any Borrower (other than another Borrower or a Loan Guarantor) to the extent that the declaration or payment of dividends or similar distributions by such Subsidiary is not at the time permitted by the terms of any contractual obligation (other than under any Loan Document) or Requirement of Law applicable to such Subsidiary.

 

“Net Orderly Liquidation Value” means, with respect to Inventory, including, without limitation, Eligible Inventory consisting of rental equipment, of any Person, the orderly liquidation value thereof as determined in a manner acceptable to the Administrative Agent by an appraiser acceptable to the Administrative Agent, net of all costs of liquidation thereof.

 

“Net Proceeds” means, with respect to any event, (a) the cash proceeds received in respect of such event including (i) any cash received in respect of any non-cash proceeds (including any cash payments received by way of deferred payment of principal pursuant to a note or installment receivable or purchase price adjustment receivable or otherwise, but excluding any interest payments), but only as and when received, (ii) in the case of a casualty, insurance proceeds and (iii) in the case of a condemnation or similar event, condemnation awards and similar payments, net of (b) the sum of (i) all reasonable fees and out-of-pocket expenses paid to third parties (other than Affiliates) in connection with such event, (ii) in the case of a sale, transfer or other disposition of an asset (including pursuant to a sale and leaseback transaction or a casualty or a condemnation or similar proceeding), the amount of all payments required to be made as a result of such event to repay Indebtedness (other than Loans) secured by such asset or otherwise subject to mandatory prepayment as a result of such event and (iii) the amount of all taxes paid (or reasonably estimated to be payable) and the amount of any reserves established to fund contingent liabilities reasonably estimated to be payable, in each case during the year that such event occurred or the next succeeding year and that are directly attributable to such event (as determined reasonably and in good faith by a Financial Officer).

 

“New Lender” has the meaning assigned to such term in Section 2.24.

 

“New Lender Agreement” means a New Lender Agreement entered into by a New Lender in accordance with Section 2.24 and accepted by the Administrative Agent in the form of Exhibit H, or any other form approved by the Administrative Agent.

 

37

 

“Non-Consenting Lender” has the meaning assigned to such term in Section 9.2(d).

 

“Non-Financed Capital Expenditures” means Capital Expenditures made by any Loan Party which are not financed pursuant to the incurrence of Indebtedness, the issuance of Equity Interests or receipt of an equity contribution, a Capitalized Lease Obligation or a Loan.

 

“Non-Paying Guarantor” has the meaning assigned to such term in Section 10.12.

 

“Non-U.S. Lender” means a Lender that is not a U.S. Person.

 

“Noteholder Agreement” has the meaning assigned to such term in Section 2.26.

 

“Notice of Business Activities Report” has the meaning assigned to such term in the definition of “Eligible Accounts”.

 

“Obligated Party” has the meaning assigned to such term in Section 10.3.

 

“Obligations” means all unpaid principal of and accrued and unpaid interest on the Loans, all LC Exposure, all accrued and unpaid fees and all expenses, reimbursements, indemnities and other obligations of the Loan Parties to the Lenders or to any Lender, the Agents, the Issuing Bank or any indemnified party arising under the Loan Documents.

 

“OFAC” has the meaning assigned to such term in Section 3.26.

 

“Off-Balance Sheet Liability” of a Person means (a) any repurchase obligation or liability of such Person with respect to accounts or notes receivable sold by such Person, (b) any indebtedness, liability or obligation under any so-called “synthetic lease” transaction entered into by such Person, or (c) any indebtedness, liability or obligation arising with respect to any other transaction which is the functional equivalent of or takes the place of borrowing but which does not constitute a liability on the balance sheets of such Person (other than operating leases and Capital Lease Obligations).

 

“Other Connection Taxes” means, with respect to any Recipient, Taxes imposed as a result of a present or former connection between such Recipient and the jurisdiction imposing such Taxes (other than a connection arising from such Recipient having executed, delivered, enforced, become a party to, performed its obligations under, received payments under, received or perfected a security interest under, or engaged in any other transaction pursuant to, or enforced, any Loan Document, or sold or assigned an interest in any Loan Document).

 

“Other Secured Parties” means all of the Lenders and the Affiliates of the Lenders to whom Banking Service Obligations and/or Swap Obligations are owed.

 

“Other Taxes” means any present or future stamp, court, documentary, intangible, recording, filing or similar excise or property Taxes that arise from any payment made under, from the execution, delivery, performance, enforcement or registration of, or from the registration, receipt or perfection of a security interest under, or otherwise with respect to, any Loan Document, except any such Taxes that are Other Connection Taxes imposed with respect to an assignment (other than an assignment under Section 2.20(b)).

 

38

 

“Overadvances” means collectively the US Overadvances and the Canadian Overadvances.

 

“Participant” has the meaning set forth in Section 9.4.

 

“Participant Register” has the meaning assigned to such term in Section 9.4(c).

 

“Participation Agreement” means a participation agreement entered into by the Export-Related Lender and a US Lender, as a participant, in the form of Exhibit L or any other form approved by the Export-Related Lender and the applicable US Lender.

 

“Parts Inventory Limit” means $50,000,000.

 

“Paying Guarantor” has the meaning assigned to such term in Section 10.12.

 

“PBGC” means the Pension Benefit Guaranty Corporation referred to and defined in ERISA and any successor entity performing similar functions.

 

“Perfection Certificate” means that certain Perfection Certificate dated January 25, 2006, executed by each Borrower and addressed to the US Collateral Agent.

 

“Perfection Certificate Update” means a Certificate from a Responsible Officer of the Borrowers in the form of Exhibit I hereto to be delivered to the US Collateral Agent and the Canadian Collateral Agent monthly pursuant to Section 5.1(q) hereof and setting forth all changes that would be required to be made to the Perfection Certificate (as updated pursuant to any prior Perfection Certificate Updates) to cause the Perfection Certificate to be accurate and complete if reissued as of the last day of the month immediately preceding the month in which the Perfection Certificate Update is required to be delivered pursuant to Section 5.1(q) hereof.

 

“Permitted Acquisition” means any Acquisition by any Loan Party in a transaction that satisfies each of the following requirements:

 

(a)           such Acquisition is not a hostile or contested acquisition;

 

(b)           the business acquired in connection with such Acquisition is not engaged, directly or indirectly, in any line of business other than the businesses in which the Loan Parties are engaged on the date of this Agreement and any business activities that are substantially similar, related, or incidental thereto;

 

(c)           both before and after giving effect to such Acquisition and the Loans (if any) requested to be made in connection therewith, each of the representations and warranties in the Loan Documents is true and correct in all material respects (except (i) any such representation or warranty which relates to a specified prior date and (ii) to the extent the Administrative Agent and the Lenders have been notified in writing by the Loan Parties that any representation or warranty is not correct and the Required Lenders have explicitly waived in writing compliance with such representation or warranty) and no Default or Event of Default exists, will exist, or would result therefrom;

 

39

 

(d)           as soon as available, but in any event adequately prior to such Acquisition in order to allow the Administrative Agent time to review the information provided to the Lenders under clause (ii) below, for Acquisitions with a purchase price greater than $5,000,000, the Borrowers shall provide, the Lenders (i) notice of such Acquisition and (ii) a copy of all business and financial information reasonably requested by the Administrative Agent including pro forma financial statements, statements of cash flow, and Availability projections;

 

(e)           if the Accounts and Inventory acquired in connection with such Acquisition are proposed to be included in the determination of the US Borrowing Base, the Export-Related Borrowing Base or the Canadian Borrowing Base, the Administrative Agent shall have conducted an audit and field examination of such Accounts and Inventory to its satisfaction, and all appropriate Lien filings and collateral documentation, including Collateral Access Agreements, have been duly completed, executed and delivered to the Administrative Agent;

 

(f)            [Intentionally Reserved.]

 

(g)           if such Acquisition is an acquisition of the Equity Interests of a Person, the Acquisition is structured so that the acquired Person shall become a wholly-owned Subsidiary of a Borrower and, to the extent required by Section 5.14, a Loan Party pursuant to the terms of this Agreement;

 

(h)           if such Acquisition is an acquisition of assets located primarily in the United States, the Acquisition is structured so that a Borrower shall acquire such assets;

 

(i)            if such Acquisition is an acquisition of Equity Interests, such Acquisition will not result in any violation of Regulation U;

 

(j)            no Loan Party shall, as a result of or in connection with any such Acquisition, assume or incur any direct or contingent liabilities (whether relating to environmental, tax, litigation, or other matters) that could have a Material Adverse Effect;

 

(k)           in connection with an Acquisition of the Equity Interests in any Person, all Liens on property of such Person shall be terminated unless permitted pursuant to Section 6.2(e), or the Administrative Agent in its sole discretion consents otherwise, and in connection with an Acquisition of the assets of any Person, all Liens on such assets shall be terminated;

 

(l)            the Fixed Charge Coverage Ratio for the Borrowers (after giving effect to such Acquisition) shall be greater than 1.25 to 1.00 for the most recently completed twelve month period assuming that for purposes of calculating the Fixed Charge Coverage Ratio for such period (calculated on a pro forma basis in a manner acceptable to the Administrative Agent) such Acquisition occurred on the first day of such applicable period;

 

(m)          Each Borrower shall certify (and provide the Administrative Agent with pro forma and projected calculations in form and substance reasonably satisfactory to the Administrative Agent), on its behalf and on behalf of the other Borrowers, to the Administrative Agent and the Lenders that, immediately after giving effect to the completion of such Acquisition and for next succeeding twelve month period, Availability will not be less than the greater of (i) $25,000,000 or (ii) 10% of the US Revolving Commitments at such time, in each 

 

40

 

case,  on a pro forma basis (calculated in a manner acceptable to the Administrative Agent and assuming all past due accounts payable of the Borrowers have been paid in full in cash and no accounts payable of the Borrowers are allowed to become past due during such twelve month period thereafter) which includes all consideration given in connection with such Acquisition, other than Equity Interests in the Company delivered to the seller(s) in such Acquisition, as having been paid in cash at the time of making such Acquisition; and

 

(n)           no Default or Event of Default exists or would result therefrom.

 

“Permitted Discretion” means a determination made in good faith and in the exercise of reasonable (from the perspective of a secured asset-based lender) business judgment.

 

“Permitted Encumbrances” means:

 

(a)           Liens imposed by law for taxes that are not yet due or are being contested in compliance with Section 5.4;

 

(b)           carriers’, warehousemen’s, landlords’, mechanics’, materialmen’s, vendors’, repairmen’s and other like Liens imposed by law, arising in the ordinary course of business and securing obligations that are not overdue by more than thirty (30) days or are being contested in compliance with Section 5.4;

 

(c)           (i) pledges and deposits made in the ordinary course of business in compliance with workers’ compensation, unemployment insurance and other social security laws or regulations and (ii) pledges and deposits securing liability for reimbursement or indemnification obligations of (including obligations in respect of letters of credit, bank guarantees or similar instruments for the benefit of) insurance carriers providing property, casualty or liability insurance to any Loan Party;

 

(d)           deposits to secure the performance of bids, trade contracts, leases, statutory obligations, surety and appeal bonds, performance bonds and other obligations of a like nature, in each case in the ordinary course of business;

 

(e)           judgment liens in respect of judgments that do not constitute an Event of Default under clause (k) of Article VII;

 

(f)            easements, zoning restrictions, rights-of-way, restrictive covenants, encroachments, protrusions and similar encumbrances on real property imposed by law or arising in the ordinary course of business that do not secure any monetary obligations and do not materially detract from the value of the affected property or interfere with the ordinary conduct of business of any Borrower or any Subsidiary including without limitation any defects and encumbrances noted and disclosed in a mortgage’s title insurance policy issued in favor of and delivered to the US Collateral Agent or the Canadian Collateral Agent (as applicable) in connection with any Mortgage and any state of facts disclosed on any survey referenced in any such title policy and any replacement, extension or renewal of any such Lien; provided that such replacement, extension or renewal Lien shall not cover any property other than the property that was subject to such Lien prior to such replacement, extension or renewal; provided  further  that  

 

41

 

the Indebtedness and other obligations secured by such replacement, extension or renewal Lien are permitted by this Agreement;

 

(g)           any interest of a consignor in goods held by any Loan Party on consignment provided that such goods are held on consignment in the ordinary course of business and in compliance with this Agreement;

 

(h)           any leasehold interest or title of a lessor or sublessor under any leases or subleases entered into by any Loan Party in the ordinary course of business and in compliance with this Agreement;

 

(i)            Liens that are contractual rights of set-off (i) relating to the establishment of depository relations with banks not given in connection with the issuance of Indebtedness, or (ii) relating to purchase orders and other agreements entered into with customers in the ordinary course of business and in compliance with this Agreement;

 

(j)            licenses or sublicenses of intellectual property granted by any Loan Party in the ordinary course of business and in compliance with this Agreement;

 

(k)           Liens solely on any cash earnest money deposits made by any Loan Party or any of their Subsidiaries in connection with any letter of intent or purchase agreement with respect to the purchase of assets or property by a Loan Party which is permitted hereunder;

 

(m)          Liens arising from precautionary UCC financing statements regarding operating leases; and

 

(n)           Liens in favor of Deutz, Hyster and Detroit Diesel encumbering inventory and equipment (and the proceeds thereof) purchased by Borrowers from Deutz, Hyster and Detroit Diesel;

 

provided that (i) the term “Permitted Encumbrances” shall not include any Lien securing Indebtedness, and (ii) to the extent the term “Permitted Encumbrances” is being used with reference to assets which are Export-Related Priority Collateral, “Permitted Encumbrances” shall mean “Permitted Liens” as such term is defined in the Export-Related Financing Documents.

 

“Permitted Investments” means:

 

(a)           direct obligations of, or obligations the principal of and interest on which are unconditionally guaranteed by, the United States of America (or by any agency thereof to the extent such obligations are backed by the full faith and credit of the United States of America), in each case maturing within one year from the date of acquisition thereof;

 

(b)           investments in commercial paper maturing within 360 days from the date of acquisition thereof and having, at such date of acquisition, the highest credit rating obtainable from S&P or from Moody’s;

 

(c)           investments in certificates of deposit, banker’s acceptances and time deposits maturing within 180 days from the date of acquisition thereof issued or guaranteed by or placed 

 

42

 

with, and money market deposit accounts issued or offered by, any domestic office of any commercial bank organized under the laws of the United States of America or any State thereof which has a combined capital and surplus and undivided profits of not less than $500,000,000;

 

(d)           fully collateralized repurchase agreements with a term of not more than 30 days for securities described in clause (a) above and entered into with a financial institution satisfying the criteria described in clause (c) above;

 

(e)           shares of mutual funds whose investment guidelines restrict substantially all of such funds’ investments in securities of the types described in clauses (a) through (d) above;

 

(f)            money market funds that (i) comply with the criteria set forth in Securities and Exchange Commission Rule 2a-7 under the Investment Company Act of 1940, (ii) are rated AAA by S&P and Aaa by Moody’s and (iii) have portfolio assets of at least $5,000,000,000; and

 

(g)           investments in (i) direct obligations of, or obligations the principal of and interest on which are unconditionally guaranteed by, the government of Canada or of any Canadian province (or by any agency thereof to the extent such obligations are backed by the full faith and credit of the government of Canada or of such Canadian province), in each case maturing within one year from the date of acquisition thereof; (ii) commercial paper maturing within 360 days from the date of acquisition thereof and having, at such date of acquisition, the highest credit rating obtainable from CBRS Inc., Dominion Bond Rating Service, Moody’s or S&P; (iii) certificates of deposit, banker’s acceptances and time deposits maturing within 180 days from the date of acquisition thereof issued or guaranteed by or placed with, and money market deposit accounts issued or offered by, any Canadian office of any commercial bank organized under the laws of Canada or of any Canadian province which has a combined capital surplus and undivided profits of not less than C$600,000,000; and (iv) fully collateralized repurchase agreements with a term of not more than 30 days for securities described in clause (i) above and entered into with a financial institution satisfying the criteria described in clause (iii) above.

 

“Permitted Fixed Asset Disposition” means sales, assignments, leases, licenses, transfers, exchanges or other dispositions of or the pledge or grant of a security interest in (a) any Real Property together with any fixtures thereon resulting in Net Proceeds to a Borrower in an amount greater than or equal to eighty-five percent (85%) of the appraisal value of such Real Property received by and used by the Administrative Agent or the Canadian Administrative Agent, as applicable, in the establishment of the US Fixed Asset Component and the Canadian Fixed Asset Component, or (b) any Equipment of the Borrowers, in each case to the extent permitted under Section 6.5.

 

“Permitted Senior Encumbrances” means (a) Liens described in clauses (a) and (b) of the definition of “Permitted Encumbrances” in each case securing amounts which are not past due, and (b) Liens in favor of Deutz, Hyster and Detroit Diesel encumbering inventory and equipment (and the proceeds thereof) purchased by the Borrowers from Deutz, Hyster and Detroit Diesel.

 

43

 

“Person” means any natural person, corporation, limited liability company, business trust, individual or family trust, joint venture, association, company, partnership, Governmental Authority or other entity.

 

“Plan” means any employee pension benefit plan, as defined in Section 3(2) of ERISA (including, but not limited to, an employee pension benefit plan, such as a foreign plan, which is not subject to the provisions of ERISA), which (i) is currently or hereafter sponsored, maintained or contributed to by any Loan Party or an ERISA Affiliate, or (ii) was at any time during the six preceding fiscal years sponsored, maintained or contributed to by any Loan Party or an ERISA Affiliate.

 

“Prepayment Event” means:

 

(a)           any sale, transfer or other disposition (including pursuant to a sale and leaseback transaction) of any property or asset of any Loan Party, other than dispositions described in Section 6.5(a), (b), (c), (d) or (f) to the extent excluded in clause (b) below) and other than such sales, transfers or other dispositions resulting in no more than $1,000,000 in Net Proceeds per event and less than $2,000,000 in Net Proceeds in any four consecutive fiscal quarters of the Company); or

 

(b)           any casualty or other insured damage to, or any taking under power of eminent domain or by condemnation or similar proceeding of, any property or asset of any Loan Party with a fair value immediately prior to such event equal to or greater than $1,000,000; or

 

(c)           the incurrence by any Loan Party of any Indebtedness, other than Indebtedness permitted under Section 6.1.

 

“Prime Rate” means the rate of interest per annum publicly announced from time to time by Chase or its parent as its prime rate (which is not necessarily the lowest rate charged to any customer); each change in the Prime Rate shall be effective from and including the date such change is publicly announced as being effective.

 

“Proceeds” has the meaning assigned to such term in the Security Agreements.

 

“Projections” has the meaning assigned to such term in Section 5.1(f).

 

“Property” means any interest in any kind of property or asset, whether real, personal or mixed, tangible or intangible.

 

“Protective Advances” means collectively the US Protective Advances and the Canadian Protective Advances.

 

“Qualified Public Offering” means the first underwritten public offering pursuant to an effective registration statement under the Securities Act of 1933, as amended, covering the offer and sale of Equity Interests in the Company on a firm commitment basis in which the aggregate Net Proceeds received by the Company at the public offering price is at least $75,000,000.

 

44

 

“Real Property” means any right, title or interest in and to real property, including any fee interest, leasehold interest, easement, or license and any other right to use or occupy real property, including any right arising by contract.

 

“Recipient” means, as applicable, (a) the Administrative Agent, (b) any Lender and (c) the Issuing Bank.

 

“Register” has the meaning set forth in Section 9.4.

 

“Related Affiliate” shall mean (a) with respect to any US Revolving Lender, such Lender’s Affiliates which are a Canadian Revolving Lender hereunder if any, and (b) with respect to any Canadian Revolving Lender, such Lender’s Affiliates which are a US Revolving Lender hereunder if any.

 

“Related Parties” means, with respect to any specified Person, such Person’s Affiliates and the respective directors, officers, employees, agents and advisors of such Person and such Person’s Affiliates.

 

“Rent Reserve” means a reserve equal to four (4) months of rental obligations for each parcel of Real Property leased by a Borrower at which Eligible Inventory is located and, with respect to any store, warehouse distribution center, regional distribution center or depot where any Inventory subject to Liens arising by operation of law is located, a reserve equal to four (4) months’ rent at such store, warehouse distribution center, regional distribution center or depot, in each case with respect to which the applicable landlord, warehouseman or bailee has not provided a Collateral Access Agreement.

 

“Report” means reports prepared by the Administrative Agent or another Person showing the results of appraisals, field examinations or audits pertaining to the Borrowers’ assets from information furnished by or on behalf of the Borrowers, after the Administrative Agent has exercised its rights of inspection pursuant to this Agreement, which Reports may be distributed to the Lenders by the Administrative Agent.

 

“Required Lenders” means, at any time, Lenders (other than Defaulting Lenders) having Credit Exposure and unused Commitments representing more than 50% of the sum of the total Credit Exposure and unused Commitments at such time.  In addition to the foregoing, so long as there are two or more Lenders party to this Agreement, Required Lenders must include at least two Lenders.

 

“Requirement of Law” means, as to any Person, the certificate of incorporation and bylaws or other organizational or governing documents of such Person, and any law, treaty, rule or regulation or determination of an arbitrator or a court or other Governmental Authority, in each case applicable to or binding upon such Person or any of its property or to which such Person or any of its property is subject.

 

“Reserves” means the Borrowing Base Reserves and the Commitment Reserves, collectively.

 

45

 

“Responsible Officer” means, with respect to any limited liability company or corporation, the chairman of the board, the president, any vice president, the chief executive officer or the chief operating officer, or any equivalent officer (regardless of his or her title), and, in respect of financial or accounting matters, a Financial Officer.  Unless otherwise specified, all references to a Responsible Officer herein means a Responsible Officer of all Borrowers.

 

“Restricted Payment” means any dividend or other distribution (whether in cash, securities or other property) with respect to any Equity Interests in any Borrower or any Subsidiary, or any payment (whether in cash, securities or other property), including any sinking fund or similar deposit, on account of the purchase, redemption, retirement, acquisition, cancellation or termination of any such Equity Interests in any Borrower or any option, warrant or other right to acquire any such Equity Interests in any Borrower.

 

“Revolving Commitments” means, collectively, the US Revolving Commitments and the Canadian Revolving Commitments.

 

“Revolving Exposure” means, at any time for each Revolving Lender, the sum of such Lender’s US Revolving Exposure and Canadian Revolving Exposure at such time.

 

“Revolving Lenders” means, collectively, the US Revolving Lenders and the Canadian Lenders.

 

“Revolving Loans” means, collectively, the US Revolving Loans and the Canadian Revolving Loans.

 

“S&P” means Standard & Poor’s Ratings Services, a division of The McGraw Hill Companies, Inc.

 

“Secured Obligations” means the US Secured Obligations and the Canadian Secured Obligations.

 

“Security Agreements” means, collectively, the US Security Agreement and the Canadian Security Agreement.

 

“Senior Notes” means the 10% Senior Unsecured Notes due 2014 issued by the Company on or about July 6, 2006 in the aggregate principal amount of $150,000,000 having the terms set forth in the Senior Notes Indenture.

 

“Senior Notes Documents” means the Senior Notes, the Senior Notes Indenture, and each other material document, instrument or agreement to which the Company or any of its Subsidiaries is or may hereafter become a party pertaining to the Senior Notes.

 

“Senior Notes Indenture” means the Indenture dated July 6, 2006, by and between the Company and Wells Fargo Bank, National Association as Trustee setting forth certain terms and conditions of certain of the Senior Notes.

 

46

 

“Senior Notes Offering” means the offering by the Company and SSC, as co-issuers of the Senior Notes pursuant to the terms and conditions of the Senior Notes Offering Memorandum.

 

“Senior Notes Offering Memorandum” means the Offering Memorandum dated June 29, 2006 setting forth the terms and conditions of the Senior Notes Offering.

 

“Senior Notes Trigger Date” means May 16, 2014, which is the date that is sixty (60) days prior to the scheduled Maturity date of the Senior Notes as in effect on the Effective Date.

 

“Settlement” has the meaning assigned to such term in Section 2.5(g).

 

“Special Vendor Payable Reserve” means a reserve established by the Administrative Agent in its Permitted Discretion in an amount equal to the accounts payable owed by Borrowers to Deutz, Hyster and Detroit Diesel less (calculated separately for each such vendor) the amount of accounts owed by each such vendor to a Borrower in respect of warranty work performed by such Borrower and which are not more than sixty (60) days past the original invoice date.

 

“Spot Exchange Rate” means, on any day, the spot rate at which Dollars are offered on such day by Chase Canada in Toronto, Ontario, Canada for C$ at approximately 11:00 a.m. (Toronto, Ontario, Canada time).

 

“SS Canada” has the meaning set forth in the initial paragraph hereof.

 

“SSC” has the meaning set forth in the initial paragraph hereof.

 

“SSDH” has the meaning set forth in the initial paragraph hereof.

 

“SSMH” has the meaning set forth in the initial paragraph hereof.

 

“SSMT” has the meaning set forth in the initial paragraph hereof.

 

“SSPP” has the meaning set forth in the initial paragraph hereof.

 

“SSPS” has the meaning set forth in the initial paragraph hereof.

 

“Statutory Reserve Rate” means a fraction (expressed as a decimal), the numerator of which is the number one and the denominator of which is the number one minus the aggregate of the maximum reserve percentages (including any marginal, special, emergency or supplemental reserves) expressed as a decimal established by the Board to which the Administrative Agent is subject with respect to the Adjusted LIBO Rate, for eurocurrency funding (currently referred to as “Eurocurrency Liabilities” in Regulation D of the Board).  Such reserve percentages shall include those imposed pursuant to such Regulation D.  Eurodollar Loans shall be deemed to constitute eurocurrency funding and to be subject to such reserve requirements without benefit of or credit for proration, exemptions or offsets that may be available from time to time to any Lender under such Regulation D or any comparable regulation.  The Statutory Reserve Rate shall be adjusted automatically on and as of the effective date of any change in any reserve percentage.

 

47

 

“Subject Borrower” has the meaning assigned to such term in Section 2.23(b) hereof.

 

“Subject Canadian Borrower” has the meaning assigned to such term in Section 2.23(d) hereof.

 

“Subordinated Indebtedness” of a Person means any Indebtedness of such Person the payment of which is subordinated in writing to payment of the Secured Obligations to the satisfaction of the Administrative Agent and the Canadian Administrative Agent.

 

“subsidiary” means, with respect to any Person (the “parent”) at any date, any corporation, limited liability company, partnership, association or other entity the accounts of which would be consolidated with those of the parent in the parent’s consolidated financial statements if such financial statements were prepared in accordance with GAAP as of such date, as well as any other corporation, limited liability company, partnership, association or other entity (a) of which securities or other ownership interests representing more than 50% of the equity or more than 50% of the ordinary voting power or, in the case of a partnership, more than 50% of the general partnership interests are, as of such date, owned, controlled or held, or (b) that is, as of such date, otherwise Controlled, by the parent or one or more subsidiaries of the parent or by the parent and one or more subsidiaries of the parent.

 

“Subsidiary” means any subsidiary of the Company or a Loan Party, as applicable.

 

“Supermajority Revolving Lenders” means, at any time, Lenders (other than Defaulting Lenders) having Revolving Exposure and unused Revolving Commitments representing 75% or more of the sum of the total Revolving Exposure and unused Revolving Commitment.

 

“Swap Agreement” means any agreement with respect to any swap, forward, future or derivative transaction or option or similar agreement involving, or settled by reference to, one or more rates, currencies, commodities, equity or debt instruments or securities, or economic, financial or pricing indices or measures of economic, financial or pricing risk or value or any similar transaction or any combination of these transactions; provided  that no phantom stock or similar plan providing for payments only on account of services provided by current or former directors, officers, employees or consultants of any Borrower or any Subsidiary shall be a Swap Agreement.

 

“Swap Obligations” of a Person means any and all obligations of such Person, whether absolute or contingent and howsoever and whensoever created, arising, evidenced or acquired (including all renewals, extensions and modifications thereof and substitutions therefor), under (a) any and all Swap Agreements, and (b) any and all cancellations, buy backs, reversals, terminations or assignments of any Swap Agreement transaction.

 

“Swingline Exposure” means, at any time, the sum of the aggregate undrawn amount of all outstanding Swingline Loans.  The Swingline Exposure of any US Revolving Lender at any time shall be its Applicable Percentage of the aggregate Swingline Exposure.

 

“Swingline Lender” means JPMorgan Chase Bank, N.A., in its capacity as lender of Swingline Loans hereunder.

 

48

 

“Swingline Loan” means a Loan made pursuant to Section 2.5.

 

“Syndication Agent” means Wells Fargo Capital Finance, LLC, in its capacity as syndication agent for the Lenders hereunder, and its successors and assigns in such capacity.

 

“Taxes” means any and all present or future taxes, levies, imposts, duties, deductions, charges, fees or other charges imposed by any Governmental Authority, including any interest, additions to taxes or penalties applicable thereto.

 

“Total Indebtedness” means, at any date, the aggregate principal amount of all Indebtedness of the Borrowers and their Subsidiaries for borrowed money at such date, determined on a consolidated basis in accordance with GAAP.

 

“Transactions” means the execution, delivery and performance by the Borrowers of this Agreement, the borrowing of Loans and other credit extensions, the use of the proceeds thereof, the drawing and acceptance of B/As and the issuance of Letters of Credit hereunder.

 

“True-Up Loans” has the meaning given such term in the recitals hereto.

 

“Type”, when used in reference to any Loan (other than a B/A Loan) or Borrowing (other than a B/A Borrowing), refers to whether the rate of interest on such Loan, or on the Loans comprising such Borrowing, is determined by reference to the Adjusted LIBO Rate, the Alternate Base Rate or the Canadian Prime Rate, and when used in reference to a B/A refers to a B/A Loan.

 

“UCC” means the Uniform Commercial Code as in effect from time to time in the State of New York or any other state the laws of which are required to be applied in connection with the issue of perfection of security interests.  In addition, “UCC” means with respect to the Canadian Loan Parties or any Collateral of the Canadian Loan Parties subject thereto, the Personal Property Security Act or similar legislation as from time to time in effect in the province of Alberta or any other province the laws of which are required to be applied in connection with the issue of perfection of security interests.

 

“Unliquidated Obligations” means, at any time, any Secured Obligations (or portion thereof) that are contingent in nature or unliquidated at such time, including any Secured Obligation that is: (a) an obligation to reimburse a bank for drawings not yet made under a letter of credit issued by it; (b) any other obligation (including any guarantee) that is contingent in nature at such time; or (c) an obligation to provide collateral to secure any of the foregoing types of obligations.

 

“US Availability” means, at any time, an amount equal to (a) the lesser of the total US Revolving Commitments and the US Borrowing Base minus (b) the US Commitment Reserves minus (c) the aggregate US Revolving Exposure of all US Revolving Lenders (calculated, with respect to any Defaulting Lender, as if such Defaulting Lender had funded its Applicable Percentage of all outstanding US Loans if applicable) minus (d) the Availability Block.

 

“US Base Rate (Canada)” means, for any day, a rate per annum equal to the greater of (a) the annual rate of interest announced by Chase Canada and in effect as its base rate at its

 

49

 

principal office in Toronto, Ontario on such day for determining interest rates on US Dollar-denominated commercial loans made in Canada, (b) the Federal Funds Effective Rate if effect on such day plus 1⁄2 of 1% and (c) the Adjusted LIBO Rate for a one month interest period appearing on the Reuters Screen LIBOR01 Page (or on any successor or substitute page) on such day plus 1%; provided  that, for the avoidance of doubt, the Adjusted LIBO Rate for any day shall be based on the rate appearing on the Reuters Screen LIBOR01 Page (or on any successor or substitute page) at approximately 11:00 a.m. London time on such day (without any rounding).  Any change in the US Base Rate (Canada) due to a change in the rate referred to in clause (a) above, the Federal Funds Effective Rate or the Adjusted LIBO Rate shall be effective from and including the effective date of such change in the rate referred to in clause (a) above, the Federal Funds Effective Rate or the Adjusted LIBO Rate, respectively.

 

“US Borrower” or “US Borrowers” means (a) the Company, SSDH, SSPP, SSPS, SSC, SSMH, SSMT and EMDSI as of the Effective Date, (b) each of the Borrowers’ US Subsidiaries that becomes a Borrower under this Agreement pursuant to Section 5.14 and (c) each of their successors and assigns.

 

“US Borrowing Base” means, at any time, the sum of (a) 85% of the US Borrowers’ Eligible Accounts at such time, plus (b) the lesser of (i) the US Inventory Limit, and (ii) the sum of the following:

 

(1)           the lesser of (A) 65% of the Base Value of the US Borrowers’ Eligible Inventory consisting of primary finished goods of the US Borrowers’ Manufacturing Division, and (B) the sum of (x) the Inventory Advance Percentage of the US Borrowers’ Eligible Inventory consisting of primary finished goods of the US Borrowers’ Manufacturing Division, plus (y) the book value of the US Borrowers’ Eligible Inventory consisting of primary finished goods of the US Borrowers’ Manufacturing Division purchased after the date of the Inventory appraisal used to determine the Inventory Advance Percentage, minus (z) the book value of the US Borrowers’ Eligible Inventory consisting of primary finished goods of the US Borrowers’ Manufacturing Division sold, retired or otherwise disposed of and depreciated after the date of the Inventory appraisal used to determine the Inventory Advance Percentage, plus

 

(2)           the lesser of (A) 65% of the Base Value of the US Borrowers’ Eligible Inventory consisting of engine and transmission units of the US Borrowers’ Distribution Division, and (B) the sum of (x) the Inventory Advance Percentage of the US Borrowers’ Eligible Inventory consisting of engine and transmission units of the US Borrowers’ Distribution Division, plus (y) the book value of the US Borrowers’ Eligible Inventory consisting of engine and transmission units of the US Borrowers’ Distribution Division purchased after the date of the Inventory appraisal used to determine the Inventory Advance Percentage, minus (z) the book value of the US Borrowers’ Eligible Inventory consisting of engine and transmission units of the US Borrowers’ Distribution Division sold, retired or otherwise disposed of and depreciated after the date of the Inventory appraisal used to determine the Inventory Advance Percentage, plus

 

(3)           the lesser of (A) the US Parts Inventory Limit, and (B) the sum of the following:

 

(I)            the lesser of (A) 65% of the Base Value of the US Borrowers’ Eligible Inventory consisting of active parts of the US Borrowers’ Distribution Division, and (B) the sum of (x) the

 

50

 

Inventory Advance Percentage of the US Borrowers’ Eligible Inventory consisting of active parts of the US Borrowers’ Distribution Division, plus (y) the book value of the US Borrowers’ Eligible Inventory consisting of active parts of the US Borrowers’ Distribution Division purchased after the date of the Inventory appraisal used to determine the Inventory Advance Percentage, minus (z) the book value of the US Borrowers’ Eligible Inventory consisting of active parts of the US Borrowers’ Distribution Division sold, retired or otherwise disposed of and depreciated after the date of the Inventory appraisal used to determine the Inventory Advance Percentage, plus

 

(II)           the lesser of (A) 65% of the Base Value of the US Borrowers’ Eligible Inventory consisting of parts of the US Borrowers’ Manufacturing Division, and (B) the sum of (x) the Inventory Advance Percentage of the US Borrowers’ Eligible Inventory consisting of parts of the US Borrowers’ Manufacturing Division, plus (y) the book value of the US Borrowers’ Eligible Inventory consisting of parts of the US Borrowers’ Manufacturing Division purchased after the date of the Inventory appraisal used to determine the Inventory Advance Percentage, minus (z) the book value of the US Borrowers’ Eligible Inventory consisting of parts of the US Borrowers’ Manufacturing Division sold, retired or otherwise disposed of and depreciated after the date of the Inventory appraisal used to determine the Inventory Advance Percentage.

 

, plus

 

(4)           the least of (A) $2,500,000, (B) 65% of the Base Value of the US Borrowers’ Eligible Inventory consisting of dirty cores, and (C) the sum of (x) the Inventory Advance Percentage of the US Borrowers’ Eligible Inventory consisting of dirty cores, plus (y) the book value of the US Borrowers’ Eligible Inventory consisting of dirty cores purchased after the date of the Inventory appraisal used to determine the Inventory Advance Percentage, minus (z) the book value of the US Borrowers’ Eligible Inventory consisting of dirty cores sold, retired or otherwise disposed of and depreciated after the date of the Inventory appraisal used to determine the Inventory Advance Percentage, plus

 

(5)           the lesser of (A) 65% of the Base Value of the US Borrowers’ Eligible Inventory consisting of custom built work-in-process of the US Borrowers’ Distribution Division, and (B) the sum of (x) the Inventory Advance Percentage of the US Borrowers’ Eligible Inventory consisting of custom built work-in-process of the US Borrowers’ Distribution Division, plus (y) the book value of the US Borrowers’ Eligible Inventory consisting of custom built work-in-process of the US Borrowers’ Distribution Division purchased or manufactured after the date of the Inventory appraisal used to determine the Inventory Advance Percentage, minus (z) the book value of the US Borrowers’ Eligible Inventory consisting of custom built work-in-process of the US Borrowers’ Distribution Division sold, retired or otherwise disposed of and depreciated after the date of the Inventory appraisal used to determine the Inventory Advance Percentage, plus

 

(6)           the lesser of (A) 65% of the Base Value of the US Borrowers’ Eligible Inventory consisting of identifiable work-in-process of the US Borrowers’ Manufacturing Division, and (B) the sum of (x) the Inventory Advance Percentage of the US Borrowers’ Eligible Inventory consisting of identifiable work-in-process of the US Borrowers’ Manufacturing Division, plus (y) the book value of the US Borrowers’ Eligible Inventory consisting of identifiable work-in-process of the US Borrowers’ Manufacturing Division purchased or manufactured after the date

 

51

 

of the Inventory appraisal used to determine the Inventory Advance Percentage, minus (z) the book value of the US Borrowers’ Eligible Inventory consisting of identifiable work-in-process of the US Borrowers’ Manufacturing Division sold, retired or otherwise disposed of and depreciated after the date of the Inventory appraisal used to determine the Inventory Advance Percentage, plus

 

(7)           the lesser of (A) $45,000,000 and (B) the sum of (x) the Inventory Advance Percentage of the US Borrowers’ Eligible Inventory consisting of rental equipment (other than rolling stock), plus (y) the book value of the US Borrowers’ Eligible Inventory consisting of rental equipment (other than rolling stock) purchased after the date of the Inventory appraisal used to determine the Inventory Advance Percentage, minus (z) the book value of the US Borrowers’ Eligible Inventory consisting of rental equipment (other than rolling stock) sold, retired or otherwise disposed of and depreciated after the date of the Inventory appraisal used to determine the Inventory Advance Percentage, plus

 

(8)           the US Fixed Asset Component, minus

 

(9)           Borrowing Base Reserves (applicable to the US Borrowing Base as determined by the Administrative Agent in its Permitted Discretion).

 

The US Borrowers’ Eligible Accounts and Eligible Inventory included in the Export-Related Borrowing Base will be excluded from the US Borrowing Base.  The Administrative Agent may, in its Permitted Discretion, reduce the advance rates set forth above, or reduce one or more of the other elements used in computing the US Borrowing Base, with any such changes to be effective three (3) days after delivery of notice thereof to the Borrower Representative US and the US Lenders.  The US Borrowing Base at any time shall be determined by reference to the most recent US Borrowing Base Certificate delivered to the Administrative Agent pursuant to Section 5.1(g) subject to (i) the right of the Administrative Agent to redetermine any component of the US Borrowing Base or the calculation thereof if and to the extent the Administrative Agent believes, in its Permitted Discretion, such component or calculation to be incorrect (any such redetermination made in its Permitted Discretion and absent manifest error shall be conclusive and binding on the US Borrowers) and provided that the Administrative Agent gives the US Borrowers contemporaneous notice of such redetermination, and (ii) immediate adjustment as a result of (A) the establishment or release of Borrowing Base Reserves, (B) reductions in the US Fixed Asset Component by the amount of the US Fixed Asset Amortization Amount applicable to the US Fixed Asset Component, (C) reduction in advance rates provided for herein, (D) subject to the three (3) day period set forth above, changes in eligibility criteria or standards imposed by the Administrative Agent, and (E) the occurrence of a Permitted Fixed Asset Disposition (as applicable).

 

“US Borrowing Base Certificate” means a certificate signed and certified as accurate and complete by a Financial Officer of the Borrower Representative US, in substantially the form of Exhibit C or another form which is acceptable to the Administrative Agent in its sole discretion.

 

52

 

“US Collateral Agent” means JPMorgan Chase Bank, N.A., in its capacity as collateral agent for the US Lenders hereunder and for the Export-Related Lender under the Export-Related Loan Agreement, and its successors and assigns in such capacity.

 

“US Commitment” means, with respect to each US Lender, the sum of such US Lender’s US Revolving Commitment, together with the commitment of such US Lender to acquire participations in US Protective Advances hereunder.  The initial amount of each US Lender’s US Commitment is set forth on the Commitment Schedule, or in the Assignment and Assumption pursuant to which such US Lender shall have assumed its US Commitment, as applicable.

 

“US Controlled Disbursement Account” means the following account: #709370605, and any replacement or additional accounts of any of the US Borrowers maintained with the Administrative Agent as a zero balance, cash management account pursuant to and under any agreement between any of the US Borrowers and the Administrative Agent, as modified and amended from time to time, and through which all disbursements of the US Borrowers, any Loan Party and any designated Subsidiary of any US Borrower are made and settled on a daily basis with no uninvested balance remaining overnight.

 

“US Credit Exposure” means, as to any US Lender at any time, the sum of (a) such US Lender’s Revolving Exposure at such time, plus (b) an amount equal to its Applicable Percentage, if any, of the aggregate principal amount of US Protective Advances outstanding at such time.

 

“US Fixed Asset Amortization Amount” means the monthly amortization amount, which shall be calculated and established by the Administrative Agent upon the Administrative Agent’s establishment of the US Fixed Asset Component and shall be in an amount equal to 1/120th of the initial US Fixed Asset Component established by the Administrative Agent after the Effective Date.  The Administrative Agent, in its Permitted Discretion, reserves the right to decrease the US Fixed Asset Amortization Amount (a) upon the consummation of dispositions of Eligible Equipment or Eligible Mortgaged Real Property owned by any US Borrower and (b) at such time as any equipment or Real Property which was previously Eligible Equipment or Eligible Mortgaged Real Property (as applicable) ceases to be Eligible Equipment or Eligible Mortgaged Real Property hereunder, by the applicable percentage of the Appraised Value of the Property so disposed of or the equipment or Real Property which has ceased to be Eligible Equipment or Eligible Mortgaged Real Property hereunder, as applicable; provided, that any such reduction shall be in connection with a corresponding reduction of the US Fixed Asset Component.

 

“US Fixed Asset Component” means an amount established by the Administrative Agent prior to March 31, 2012 upon its receipt of (a) an appraisal and environmental reports of the US Borrowers’ Fixed Asset Collateral and any title endorsement related to the US Borrowers’ Fixed Asset Collateral required to be delivered to the Administrative Agent pursuant to Section 5.15, in form and substance reasonably satisfactory to the Administrative Agent and (b) the US Fixed Asset Component Limit Notice, which amount shall be equal to the lesser of (x) the US Fixed Asset Component Limit and (y) seventy-five percent (75%) of the Appraised Value of the US Borrowers’ Fixed Asset Collateral allocated to the US Fixed Asset Component.  For

 

53

 

purposes of clarity, the US Fixed Asset Component shall be $0 as of the Effective Date. The US Fixed Asset Component shall be reduced by (a) the US Fixed Asset Amortization Amount applicable to the US Fixed Asset Component on the first day of each month commencing on the first day of the first full month following the establishment of the US Fixed Asset Amortization Amount and continuing on the first day of each month thereafter throughout the term of this Agreement and (b) the percentage of the Appraised Value of any Fixed Asset Collateral allocated to the US Fixed Asset Component which (i) is the subject of a casualty event (including, without limitation, damage, destruction or condemnation) or a Permitted Fixed Asset Disposition, or (ii) is no longer Eligible Equipment or Eligible Mortgaged Real Property (as applicable) less in each case the portion of such amount that has already been reduced from the US Fixed Asset Component as a result of prior US Fixed Asset Amortization Amount reductions, in each case such amounts being determined by the Administrative Agent in its sole discretion.

 

“US Fixed Asset Component Limit” means the amount of the Fixed Asset Component Limit which a Borrower Representative designates in writing (the “US Fixed Asset Component Limit Notice”) as the “US Fixed Asset Component Limit” on or prior to March 31, 2012; provided, that, in no event shall the sum of the Canadian Fixed Asset Component Limit and the US Fixed Asset Component Limit exceed the Fixed Asset Component Limit.

 

“US Fixed Asset Component Limit Notice” has the meaning assigned to such term in the definition of “US Fixed Asset Component Limit”.

 

“US Funding Account” has the meaning assigned to such term in Section 4.1(h).

 

“US Inventory Limit” means the amount of the Inventory Limit which the Borrower Representative US designates as the “US Inventory Limit” on the US Borrowing Base Certificate from which the US Borrowing Base is being calculated; provided, that, in no event shall the sum of the Canadian Inventory Limit and the US Inventory Limit in effect at any time ever exceed the Inventory Limit.

 

“US Lender” means a Lender with a US Revolving Commitment.

 

“US Loan Parties” means (a) the US Borrowers, and (b) each of the Borrowers’ US Subsidiaries (other than Stewart & Stevenson Truck Holdings LLC) or any other Person which is formed or organized under the federal laws of the United States of America, the laws of any State thereof or the laws of the District of Columbia and who becomes a party to this Agreement pursuant to a Joinder Agreement and their successors and assigns.

 

“US Loans” means the US Revolving Loans, the Swingline Loans, the US Overadvances and the US Protective Advances, collectively.

 

“US Overadvances” has the meaning assigned to such term in Section 2.5(c).

 

“US Parts Inventory Limit” means the amount of the Parts Inventory Limit which the Borrower Representative US designates as the “US Parts Inventory Limit” on the US Borrowing Base Certificate from which the US Borrowing Base is being calculated; provided  that, in no event shall the sum of the Canadian Parts Inventory Limit and the US Parts Inventory Limit in effect at any time ever exceed the Parts Inventory Limit.

 

54

 

“U.S. Person” means a “United States person” within the meaning of Section 7701(a)(30) of the Code.

 

“US Protective Advance” has the meaning assigned to such term in Section 2.4(c).

 

“US Revolving Commitment” means, with respect to each US Lender, the commitment, if any, of such US Lender to make US Revolving Loans and to acquire participations in Letters of Credit, US Overadvances and Swingline Loans hereunder, expressed as an amount representing the maximum possible aggregate amount of such US Lender’s US Revolving Exposure hereunder, as such commitment may be (a) reduced from time to time pursuant to Section 2.9, (b) reduced or increased from time to time pursuant to assignments by or to such US Lender pursuant to Section 9.4, and (c) increased from time to time pursuant to Section 2.24.  The initial amount of each US Lender’s US Revolving Commitment is set forth on the Commitment Schedule, or in the Assignment and Assumption pursuant to which such US Lender shall have assumed its US Revolving Commitment, as applicable.  The initial aggregate amount of the US Lenders’ US Revolving Commitments is $250,000,000; provided  that (i) so long as any Canadian Secured Obligations are outstanding hereunder, the aggregate amount of the US Lenders’ US Revolving Commitments will be reduced by the Dollar Equivalent of the outstanding principal amount of the Obligations of the Canadian Borrowers at any time (and the US Revolving Commitment of each US Revolving Lender will reduce proportionately in accordance with its Applicable Percentage), and (ii) subject to Section 9.20, so long as the Export-Related Loan Agreement remains in effect or any Export-Related Obligations are outstanding thereunder, the aggregate amount of the US Lenders’ US Revolving Commitments will be reduced by the principal amount of such Export-Related Obligations (and the US Revolving Commitment of each US Revolving Lender will reduce proportionately in accordance with its Applicable Percentage).

 

“US Revolving Exposure” means, with respect to any US Lender at any time, the sum of (a) the outstanding principal amount of such US Lender’s US Revolving Loans, its Swingline Exposure and its LC Exposure at such time, plus (b) an amount equal to its Applicable Percentage of the aggregate principal amount of US Overadvances outstanding at such time.

 

“US Revolving Lender” means, as of the date of determination, a Lender with a US Revolving Commitment or, if the US Revolving Commitments have terminated or expired, a Lender with US Revolving Exposure.

 

“US Revolving Loans” means a Loan made to the US Borrowers pursuant to Section 2.1 in Dollars.

 

“US Secured Obligations” means (a) all Obligations owing by the US Loan Parties, (b) the Export-Related Obligations, (c) all Banking Services Obligations owing by the US Loan Parties and (d) Swap Obligations owing by the US Loan Parties to one or more US Lenders or their respective Affiliates; provided that at or prior to the time that any transaction relating to a Swap Obligation is executed, the US Lender party thereto (other than Chase) shall have delivered written notice to the Administrative Agent that such a transaction has been entered into and that it constitutes a US Secured Obligation entitled to the benefits of the Collateral Documents.

 

55

 

“US Security Agreement” means that certain Third Amended and Restated Pledge and Security Agreement, dated as of the date hereof, between the US Loan Parties and the US Collateral Agent, for the benefit of itself, the Administrative Agent, the US Lenders, the Export-Related Lender and the Other Secured Parties, as the same may be amended, restated or otherwise modified from time to time, and (b) any other pledge or security agreement entered into after the date of this Agreement by any US Loan Party (as required by this Agreement, any other Loan Document or any Export-Related Financing Document) in favor of the US Collateral Agent for the ratable benefit of the Agents, Lenders, the Export-Related Lender and the Other Secured Parties to secure the Secured Obligations, as the same may be amended, restated, or otherwise modified from time to time.

 

“US Settlement Date” has the meaning assigned to such term in Section 2.5(g).

 

“US Subsidiary” means any Subsidiary of any Borrower that is formed or organized under the federal laws of the United States of America or under the laws of any State thereof or under the laws of the District of Columbia.

 

“Withdrawal Liability” means liability to a Multiemployer Plan as a result of a complete or partial withdrawal from such Multiemployer Plan, as such terms are defined in Part I of Subtitle E of Title IV of ERISA.

 

“Withholding Agent” means any  Borrower Representative and the Administrative Agent.

 

Section 1.2            Classification of Loans and Borrowings.  For purposes of this Agreement, Loans may be classified and referred to by Class (e.g., a “Canadian Revolving Loan”) or by Type (e.g., a “Eurodollar Loan”) or by Class and Type (e.g., a “Eurodollar Revolving Loan”).  Borrowings also may be classified and referred to by Class (e.g., a “Revolving Loan Borrowing”) or by Type (e.g., a “B/A Borrowing”) or by Class and Type (e.g., a “Eurodollar Revolving Loan Borrowing”).

 

Section 1.3            Terms Generally.  The definitions of terms herein shall apply equally to the singular and plural forms of the terms defined.  Whenever the context may require, any pronoun shall include the corresponding masculine, feminine and neuter forms.  The words “include”, “includes” and “including” shall be deemed to be followed by the phrase “without limitation”.  The word “will” shall be construed to have the same meaning and effect as the word “shall”.  Unless the context requires otherwise (a) any definition of or reference to any agreement, instrument or other document herein shall be construed as referring to such agreement, instrument or other document as from time to time amended, supplemented or otherwise modified (subject to any restrictions on such amendments, supplements or modifications set forth herein), (b) any reference herein to any Person shall be construed to include such Person’s successors and assigns, (c) the words “herein”, “hereof” and “hereunder”, and words of similar import, shall be construed to refer to this Agreement in its entirety and not to any particular provision hereof, (d) all references herein to Articles, Sections, Exhibits and Schedules shall be construed to refer to Articles and Sections of, and Exhibits and Schedules to, this Agreement and (e) the words “asset” and “property” shall be construed to have the same

 

56

 

meaning and effect and to refer to any and all tangible and intangible assets and properties, including cash, securities, accounts and contract rights.

 

Section 1.4            Accounting Terms; GAAP.  Except as otherwise expressly provided herein, all terms of an accounting or financial nature shall be construed in accordance with GAAP, as in effect from time to time; provided  that, if a Borrower Representative notifies the Administrative Agent that the Borrowers request an amendment to any provision hereof to eliminate the effect of any change occurring after the date hereof in GAAP or in the application thereof on the operation of such provision (or if the Administrative Agent notifies a Borrower Representative that the Required Lenders request an amendment to any provision hereof for such purpose), regardless of whether any such notice is given before or after such change in GAAP or in the application thereof, then such provision shall be interpreted on the basis of GAAP as in effect and applied immediately before such change shall have become effective until such notice shall have been withdrawn or such provision amended in accordance herewith.

 

ARTICLE II
 THE CREDITS

 

Section 2.1            Commitments.  Subject to the terms and conditions set forth herein, (a) each US Lender agrees to make US Revolving Loans in Dollars to the US Borrowers from time to time during the Availability Period in an aggregate principal amount that will not result in (i) such US Lender’s US Revolving Exposure exceeding such US Lender’s US Revolving Commitment or (ii) the total US Revolving Exposures exceeding a) the lesser of 1) the total US Revolving Commitments and 2) the US Borrowing Base, minus b) the Commitment Reserves, minus c) the Availability Block, subject to the Administrative Agent’s authority, in its sole discretion, to make US Protective Advances and US Overadvances pursuant to the terms of Section 2.4 and Section 2.5, and (b) each Canadian Lender agrees to make Canadian Revolving Loans in either Dollars or C$ (including by means of B/As) to the Canadian Borrowers from time to time during the Availability Period in an aggregate principal amount that will not result in the Dollar Equivalent of (i) subject to Section 2.10(j), such Canadian Lender’s Canadian Revolving Exposure exceeding such Canadian Lender’s Canadian Revolving Commitment or (ii) the total Canadian Revolving Exposures exceeding a) the lesser of 1) the total Canadian Revolving Commitments and 2) the Canadian Borrowing Base, minus b) the Commitment Reserves, subject to the Administrative Agent’s authority, in its sole discretion, to make Canadian Protective Advances and Canadian Overadvances pursuant to the terms of Section 2.4 and Section 2.5.  Notwithstanding the forgoing, if the Required Lenders establish a separate US Borrowing Base for each US Borrower and/or a separate Canadian Borrowing Base for each Canadian Borrower pursuant to its rights under Section 2.23(f), then the above-described Revolving Loans shall be made on a Borrower-by-Borrower basis with appropriate adjustments to subparagraphs (a)(ii)a)2) and (b)(ii)a)2).  Within the foregoing limits and subject to the terms and conditions set forth herein, the Borrowers may borrow, prepay and reborrow Revolving Loans.

 

Section 2.2            Loans and Borrowings.

 

(a)           Each Loan (other than a Swingline Loan) shall be made as part of a Borrowing consisting of Loans of the same Class and Type made by the US Lenders or the

 

57

 

Canadian Lenders (as applicable) ratably in accordance with their respective Commitments of the applicable Class.  Any Protective Advance, any Overadvance and any Swingline Loan shall be made in accordance with the procedures set forth in Section 2.4 and Section 2.5.

 

(b)           Subject to Section 2.14, each Dollar Denominated Loan shall be comprised entirely of ABR Loans or Eurodollar Loans as the applicable Borrower Representative may request in accordance herewith, provided that all Dollar Denominated Loans made on the Effective Date must be made as ABR Borrowings but may be converted into Eurodollar Borrowings in accordance with Section 2.8.  Each C$ Denominated Loan shall be comprised entirely of either Canadian Prime Rate Loans or B/A Loans as the Canadian Borrowers may request in accordance herewith; provided  that all C$ Denominated Loans made on the Effective Date must be made as Canadian Prime Rate Borrowings but may be converted into B/A Borrowings in accordance with Section 2.8.  Each Swingline Loan shall be an ABR Loan.  Each Lender at its option may 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 the Borrowers to repay such Loan in accordance with the terms of this Agreement.

 

(c)           All Borrowings must be made in the following minimum amounts:

 

(i)            At the time that any ABR Borrowing of Revolving Loans is made, such Borrowing shall be in an aggregate amount that is an integral multiple of $1,000,000 and not less than $1,000,000; provided  that such an ABR Borrowing may be in an aggregate amount (1) in the case of a US Revolving Loan Borrowing, (A) that is equal to the entire unused balance of the total US Revolving Commitments, or (B) that is required to finance the reimbursement of an LC Disbursement as contemplated by Section 2.6(e), or (2) in the case of a Canadian Revolving Loan Borrowing, that is equal to the entire unused balance of the total Canadian Revolving Commitments;

 

(ii)           At the time that each Eurodollar Borrowing of Revolving Loans is made, any such Borrowing shall be in an aggregate amount that is an integral multiple of $1,000,000 and not less than $1,000,000;

 

(iii)          At the time that each Canadian Prime Rate Borrowing of Canadian Revolving Loans is made, such Borrowing shall be in an aggregate amount that is an integral multiple of C$250,000 and not less than C$250,000; provided  that such a Canadian Prime Rate Borrowing may be in an aggregate amount that is equal to the entire unused balance of the total Canadian Revolving Commitments;

 

(iv)          At the time that each B/A Borrowing of Canadian Revolving Loans is made, such Borrowing shall be in an aggregate amount that is an integral multiple of C$500,000 and not less than C$500,000;

 

(v)           Each Swingline Loan shall be in an amount that is an integral multiple of $250,000 and not less than $250,000.

 

58

 

Borrowings of more than one Type and Class may be outstanding at the same time; provided  that there shall not at any time be more than a total of fifteen (15) Eurodollar Borrowings or five (5)  B/A Borrowings outstanding.

 

(d)           Notwithstanding any other provision of this Agreement, the Borrower Representatives shall not be entitled to request, or to elect to convert or continue, any Borrowing if the Interest Period or Contract Period (as applicable) requested with respect thereto would end after the Maturity Date.

 

Section 2.3            Requests for Borrowings.  To request a Revolving Loan Borrowing, the applicable Borrower Representative shall notify the Administrative Agent (in the case of any Borrowing of US Revolving Loans) or the Canadian Administrative Agent with a simultaneous copy to the Administrative Agent (in the case of any Borrowing of Canadian Revolving Loans) of such request in writing (delivered by hand or facsimile) in a form approved by the Administrative Agent or the Canadian Administrative Agent (as applicable) and signed by the applicable Borrower Representative (a) in the case of a Eurodollar Borrowing, not later than 10:00 a.m., Chicago time, three (3) Business Days before the date of the proposed Borrowing, (b) in the case of an ABR Borrowing, not later than 10:00 a.m., Chicago time, on the date of the proposed Borrowing; provided that any such notice of an ABR Revolving Loan Borrowing to finance the reimbursement of an LC Disbursement as contemplated by Section 2.6(e) may be given not later than 9:00 a.m., Chicago time, on the date of the proposed Borrowing, (c) in the case of a Canadian Prime Rate Borrowing, not later than 10:00 a.m., Toronto, Ontario, Canada time on the date of the proposed Borrowing, and (d) in the case of a B/A Borrowing, not later than 10:00 a.m., Toronto, Ontario, Canada time two (2) Business Days before the date of the proposed Borrowing.  Each such Borrowing Request shall specify the following information in compliance with Section 2.1:

 

(i)            the aggregate amount of the requested Borrowing and on whose behalf the requested Borrowing is being made along with a breakdown of the separate wires comprising such Borrowing;

 

(ii)           the date of such Borrowing, which shall be a Business Day;

 

(iii)          whether such Borrowing is to be a US Revolving Loan Borrowing or a Canadian Revolving Loan Borrowing;

 

(iv)          in the case of a Canadian Revolving Loan Borrowing, whether such Borrowing is to be a Dollar Denominated Loan or a C$ Denominated Loan;

 

(v)           whether the Dollar Denominated Loans being made pursuant to such Borrowing are to be ABR Loans or Eurodollar Loans;

 

(vi)          whether the C$ Denominated Loans being made pursuant to such Borrowing are to be Canadian Prime Rate Loans or B/A Loans; and

 

(vii)         in the case of a Eurodollar Borrowing or a B/A Borrowing, the initial Interest Period or Contract Period, respectively, to be applicable thereto, which 

 

59

 

shall be a period contemplated by the definition of the terms “Interest Period” or “Contract Period”,  as applicable.

 

If no election as to the Type of Revolving Loan Borrowing is specified, then the requested Revolving Loan Borrowing shall be an ABR Borrowing.  If no Interest Period or Contract Period (as applicable) is specified with respect to any requested Eurodollar Borrowing or B/A Borrowing, then the Borrowers shall be deemed to have selected an Interest Period or Contract Period (as applicable) of one month’s duration.  Promptly following receipt of a Borrowing Request in accordance with this Section, (A) in the case of US Revolving Loans, the Administrative Agent shall advise each US Lender of the details thereof and of the amount of such US Lender’s Loan to be made as part of the requested Borrowing, and (B) in the case of Canadian Revolving Loans but subject to Section 2.10(j), the Canadian Administrative Agent shall advise each Canadian Lender of the details thereof and the amount of such Canadian Lender’s Loan to be made as part of the requested Borrowing.

 

Section 2.4            Protective Advances.

 

(a)           Subject to the limitations set forth below, the Administrative Agent is authorized by the US Borrowers and the US Lenders, from time to time in the Administrative Agent’s sole discretion (but shall have absolutely no obligation), to make Loans to the US Borrowers, on behalf of all Lenders, which the Administrative Agent, in its Permitted Discretion, deems necessary or desirable (i) to preserve or protect the Collateral owned by the US Loan Parties, or any portion thereof, (ii) to enhance the likelihood of, or maximize the amount of, repayment of the US Loans and other Obligations of the US Borrowers, or (iii) to pay any other amount chargeable to or required to be paid by the US Borrowers pursuant to the terms of this Agreement, including payments of reimbursable expenses (including costs, fees, and expenses as described in Section 9.3) and other sums payable under the Loan Documents (any of such Loans are herein referred to as “US Protective Advances”); provided  that, the aggregate amount of US Protective Advances outstanding at any time shall not at any time exceed $15,000,000; provided  further  that, the aggregate amount of outstanding US Protective Advances plus the aggregate US Revolving Exposure shall not exceed the aggregate US Revolving Commitments.  US Protective Advances may be made even if the conditions precedent set forth in Section 4.2 have not been satisfied.  The US Protective Advances shall be secured by the Liens in favor of the US Collateral Agent in and to the Collateral and shall constitute US Secured Obligations hereunder.  All US Protective Advances shall be ABR Borrowings.  The Administrative Agent’s authorization to make US Protective Advances may be revoked at any time by the Supermajority Revolving Lenders.  Any such revocation must be in writing and shall become effective upon the Administrative Agent’s receipt thereof.  At any time that there is sufficient US Availability and the conditions precedent set forth in Section 4.2 have been satisfied, the Administrative Agent may request the US Revolving Lenders to make a US Revolving Loan to repay a US Protective Advance.  At any other time the Administrative Agent may require the US Lenders to fund their risk participations described in Section 4.2(b).

 

(b)           Subject to the limitations set forth below, the Canadian Administrative Agent is authorized by the Canadian Borrowers and the Canadian Lenders, from time to time in the Canadian Administrative Agent’s sole discretion (but shall have absolutely no obligation), to make Loans to the Canadian Borrowers, on behalf of all Canadian Lenders, which the Canadian 

 

60

 

Administrative Agent, in its Permitted Discretion, deems necessary or desirable (i) to preserve or protect the Collateral owned by the Canadian Loan Parties, or any portion thereof, (ii) to enhance the likelihood of, or maximize the amount of, repayment of the Canadian Revolving Loans and other Obligations of the Canadian Borrowers, or (iii) to pay any other amount chargeable to or required to be paid by the Canadian Borrowers pursuant to the terms of this Agreement, including payments of reimbursable expenses (including costs, fees, and expenses as described in Section 9.3) and other sums payable under the Loan Documents (any of such Loans are herein referred to as “Canadian Protective Advances”); provided  that, the aggregate amount of Canadian Protective Advances outstanding at any time shall not at any time exceed $2,500,000; provided  further  that, the aggregate amount of outstanding Canadian Protective Advances plus the aggregate Canadian Revolving Exposure shall not exceed the aggregate Canadian Revolving Commitments.  Canadian Protective Advances may be made even if the conditions precedent set forth in Section 4.2 have not been satisfied.  The Canadian Protective Advances shall be secured by the Liens in favor of the Canadian Collateral Agent in and to the Collateral owned by the Canadian Loan Parties and shall constitute Canadian Secured Obligations hereunder.  All Canadian Protective Advances shall be Dollar Denominated and ABR Borrowings.  The Canadian Administrative Agent’s authorization to make Canadian Protective Advances may be revoked at any time by the Supermajority Revolving Lenders.  Any such revocation must be in writing and shall become effective prospectively upon the Canadian Administrative Agent’s receipt thereof.  At any time that there is sufficient Canadian Availability and the conditions precedent set forth in Section 4.2 have been satisfied, the Canadian Administrative Agent may request the Canadian Lenders to make a Canadian Revolving Loan to repay a Canadian Protective Advance.  At any other time the Canadian Administrative Agent may require the Canadian Lenders to fund their risk participations described in Section 4.2(b).

 

(c)           Upon the making of a Protective Advance (whether before or after the occurrence of a Default), (i) in the case of a US Protective Advance made by the Administrative Agent, each US Revolving Lender shall be deemed, without further action by any party hereto, to have unconditionally and irrevocably purchased from the Administrative Agent without recourse or warranty, an undivided interest and participation in such US Protective Advance in proportion to its Applicable Percentage, and (ii) in the case of a Canadian Protective Advance made by the Canadian Administrative Agent, each Canadian Lender shall be deemed, without further action by any party hereto, to have irrevocably and unconditionally purchased from the Canadian Administrative Agent without recourse or warranty, an undivided interest and participation in such Canadian Protective Advance in proportion to its Applicable Percentage.  From and after the date, if any, on which any Lender is required to fund its participation in any Protective Advance purchased hereunder, the Administrative Agent or the Canadian Administrative Agent (as applicable) shall promptly distribute to such Lender, such Lender’s Applicable Percentage of all payments of principal and interest and all proceeds of Collateral received by the Administrative Agent or the Canadian Administrative Agent (as applicable) in respect of such Protective Advance.

 

Section 2.5            Swingline Loans and Overadvances.

 

(a)           Subject to the terms and conditions set forth herein, the Swingline Lender agrees to make Swingline Loans to the US Borrowers from time to time during the Availability Period, in an aggregate principal amount at any time outstanding that will not result in (i) the 

 

61

 

aggregate principal amount of outstanding Swingline Loans exceeding $30,000,000 or (ii) the total US Revolving Exposures exceeding (x) the lesser of (A) the total US Revolving Commitments and (B) the US Borrowing Base, minus (y) the Commitment Reserves, minus (z) the Availability Block; provided  that the Swingline Lender shall not be required to make a Swingline Loan to refinance an outstanding Swingline Loan.  Within the foregoing limits and subject to the terms and conditions set forth herein, the US Borrowers may borrow, prepay and reborrow Swingline Loans.  To request a Swingline Loan, the Borrower Representative US shall notify the Administrative Agent of such request by telephone (confirmed by facsimile), not later than 11:00 a.m., Chicago 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 amount of the requested Swingline Loan.  The Administrative Agent will promptly advise the Swingline Lender of any such notice received from the Borrower Representative US.  The Swingline Lender shall make each Swingline Loan available to the US Borrowers by means of a credit to the US Funding Account (or, in the case of a Swingline Loan made to finance the reimbursement of an LC Disbursement as provided in Section 2.6(e), by remittance to the Issuing Bank, and in the case of repayment of another Loan or fees or expenses as provided by Section 2.19(d), by remittance to the Administrative Agent to be distributed to the US Lenders) by 2:00 p.m., Chicago time, on the requested date of such Swingline Loan.  In addition, the US Borrowers hereby authorize the Swingline Lender to, and the Swingline Lender shall, subject to the terms and conditions set forth herein (but without any further written notice required), not later than 1:00 p.m., Chicago time, on each Business Day, make available to the US Borrowers by means of a credit to the US Funding Account, the proceeds of a Swingline Loan to the extent necessary to pay items to be drawn on any Controlled Disbursement Account that day (as determined based on notice from the Administrative Agent).

 

(b)           The Swingline Lender may by written notice given to the Administrative Agent not later than 9:00 a.m., Chicago time, on any Business Day require the US Revolving Lenders to acquire participations on such Business Day in all or a portion of the Swingline Loans outstanding.  Such notice shall specify the aggregate amount of Swingline Loans in which US Revolving Lenders will participate.  Promptly upon receipt of such notice, the Administrative Agent will give notice thereof to each US Revolving Lender, specifying in such notice such Lender’s Applicable Percentage of such Swingline Loan or Loans.  Each US Revolving Lender hereby absolutely and unconditionally agrees, upon receipt of notice as provided above, to pay to the Administrative Agent, for the account of the Swingline Lender, such US Revolving Lender’s Applicable Percentage of such Swingline Loan or Loans.  Each US 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.  Each US 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 2.7 with respect to US Revolving Loans made by such US Revolving Lender (and Section 2.7 shall apply, mutatis mutandis, to the payment obligations of the US Revolving Lenders), and the Administrative Agent shall promptly pay to the Swingline Lender the amounts so received by it from the US Revolving Lenders.  The Administrative Agent shall notify the Borrower Representative US of any participations in any Swingline Loan acquired pursuant to this paragraph, and thereafter payments in respect of such Swingline Loan 

 

62

 

shall be made to the Administrative Agent and not to the Swingline Lender.  Any amounts received by the Swingline Lender from the US Borrowers (or other party on behalf of the US Borrowers) in respect of a Swingline Loan after receipt by the Swingline Lender of the proceeds of a sale of participations therein shall be promptly remitted to the Administrative Agent; any such amounts received by the Administrative Agent shall be promptly remitted by the Administrative Agent to the US Revolving Lenders that shall have made their payments pursuant to this paragraph and to the Swingline Lender, as their interests may appear; provided that any such payment so remitted shall be repaid to the Swingline Lender or to the Administrative Agent, as applicable, if and to the extent such payment is required to be refunded to the US Borrowers for any reason.  The purchase of participations in a Swingline Loan pursuant to this paragraph shall not relieve the US Borrowers of any default in the payment thereof.

 

(c)           Any provision of this Agreement to the contrary notwithstanding, at the request of the Borrower Representative US, the Administrative Agent may in its sole discretion (but with absolutely no obligation), make US Revolving Loans to the US Borrowers, on behalf of the US Revolving Lenders, in amounts that exceed Availability (any such excess US Revolving Loans are herein referred to collectively as “US Overadvances”); provided that, no US Overadvance shall result in a Default due to US Borrowers’ failure to comply with Section 2.1 for so long as such US Overadvance remains outstanding in accordance with the terms of this paragraph, but solely with respect to the amount of such US Overadvance.  In addition, US Overadvances may be made even if the condition precedent set forth in Section 4.2(c) has not been satisfied.  All US Overadvances shall constitute ABR Borrowings.  The authority of the Administrative Agent to make US Overadvances is limited to an aggregate amount not to exceed $15,000,000 at any time, each US Overadvance shall mature and be due on the earlier of the Maturity Date, demand by the Administrative Agent and thirty (30) days after such US Overadvance is made and no US Overadvance shall cause any US Revolving Lender’s US Revolving Exposure to exceed its US Revolving Commitment; provided  that, the Required Lenders may at any time revoke the Administrative Agent’s authorization to make US Overadvances.  Any such revocation must be in writing and shall become effective prospectively upon the Administrative Agent’s receipt thereof.

 

(d)           Any provision of this Agreement to the contrary notwithstanding, at the request of the Borrower Representative Canada, the Canadian Administrative Agent may in its sole discretion (but with absolutely no obligation), make Canadian Revolving Loans to the Canadian Borrowers, on behalf of the Canadian Lenders, in amounts that exceed Canadian Availability (any such excess Canadian Revolving Loans are herein referred to collectively as “Canadian Overadvances”); provided that, no Canadian Overadvance shall result in a Default due to Canadian Borrowers’ failure to comply with Section 2.1 for so long as such Canadian Overadvance remains outstanding in accordance with the terms of this paragraph, but solely with respect to the amount of such Canadian Overadvance.  In addition, Canadian Overadvances may be made even if the condition precedent set forth in Section 4.2(c) has not been satisfied.  All Canadian Overadvances shall constitute Dollar Denominated ABR Borrowings.  The authority of the Canadian Administrative Agent to make Canadian Overadvances is limited to an aggregate amount not to exceed $2,500,000 at any time, each Canadian Overadvance shall mature and be due on the earlier of the Maturity Date, demand by the Canadian Administrative Agent and thirty (30) days after such Canadian Overadvance is made and no Canadian Overadvance shall cause any Canadian Lender’s Canadian Revolving Exposure to exceed its Canadian Revolving 

 

63

 

Commitment; provided that, the Required Lenders may at any time revoke the Canadian Administrative Agent’s authorization to make Canadian Overadvances.  Any such revocation must be in writing and shall become effective prospectively upon the Canadian Administrative Agent’s receipt thereof.

 

(e)           Upon the making of an Overadvance (i) in the case of a US Overadvance made by the Administrative Agent, each US Revolving Lender shall be deemed, without further action by any party hereto, to have unconditionally and irrevocably purchased from the Administrative Agent without recourse or warranty, an undivided interest and participation in such US Overadvance in proportion to its Applicable Percentage of the US Revolving Commitment, and (ii) in the case of a Canadian Overadvance made by the Canadian Administrative Agent, each Canadian Lender shall be deemed, without further action by any party hereto, to have unconditionally and irrevocably purchased from the Canadian Administrative Agent without recourse or warranty, an undivided interest and participation in such Canadian Overadvance in proportion to its Applicable Percentage of the Canadian Revolving Commitment. The Administrative Agent and the Canadian Administrative Agent (as applicable) may, at any time, require the Revolving Lenders to fund their participations. From and after the date, if any, on which any Revolving Lender is required to fund its participation in any Overadvance purchased hereunder, the Administrative Agent or the Canadian Administrative Agent (as applicable) shall promptly distribute to such Lender, such Lender’s Applicable Percentage of all payments of principal and interest and all proceeds of Collateral received by the Administrative Agent or the Canadian Administrative Agent (as applicable) in respect of such Loan.

 

(f)            Upon the making of a Swingline Loan (whether before or after the occurrence of a Default and regardless of whether a Settlement has been requested with respect to such Swingline Loan), each US Revolving Lender shall be deemed, without further action by any party hereto, to have unconditionally and irrevocably purchased from the Swingline Lender, without recourse or warranty, an undivided interest and participation in such Swingline Loan in proportion to its Applicable Percentage of the US Revolving Commitment.  The Swingline Lender may, at any time, require the US Revolving Lenders to fund their participations.  From and after the date, if any, on which any US Revolving Lender is required to fund its participation in any Swingline Loan purchased hereunder, the Administrative Agent shall promptly distribute to such Lender, such Lender’s Applicable Percentage of all payments of principal and interest and all proceeds of Collateral received by the Administrative Agent in respect of such Loan.

 

(g)           The Administrative Agent, on behalf of the Swingline Lender, shall request settlement (a “Settlement”) with the US Revolving Lenders on at least a weekly basis or on any date that the Administrative Agent elects, by notifying the US Revolving Lenders of such requested Settlement by facsimile, telephone, or e-mail no later than 12:00 noon Chicago time on the date of such requested Settlement (the “US Settlement Date”).  Each US Revolving Lender (other than the Swingline Lender, in the case of the Swingline Loans) shall transfer the amount of such US Revolving Lender’s Applicable Percentage of the outstanding principal amount of the applicable Loan with respect to which Settlement is requested to the Administrative Agent, to such account of the Administrative Agent as the Administrative Agent may designate, not later than 2:00 p.m., Chicago time, on such US Settlement Date.  Settlements may occur during the existence of a Default and whether or not the applicable conditions precedent set forth in Section 

 

64

 

4.2 have then been satisfied.  Such amounts transferred to the Administrative Agent shall be applied against the amounts of the Swingline Lender’s Swingline Loans and, together with Swingline Lender’s US Applicable Percentage of such Swingline Loan, shall constitute US Revolving Loans of such US Revolving Lenders, respectively.  If any such amount is not transferred to the Administrative Agent by any US Revolving Lender on such US Settlement Date, the Swingline Lender shall be entitled to recover such amount on demand from such Lender together with interest thereon as specified in Section 2.7.

 

Section 2.6            Letters of Credit.

 

(a)           General.  Subject to the terms and conditions set forth herein, the Borrower Representative US may request the issuance of Letters of Credit for the account of one or more Loan Parties, in a form reasonably acceptable to the Administrative Agent and the Issuing Bank, at any time and from time to time during the Availability Period.  In the event of any inconsistency between the terms and conditions of this Agreement and the terms and conditions of any form of letter of credit application or other agreement submitted by a US Borrower to, or entered into by a US Borrower with, the Issuing Bank relating to any Letter of Credit, the terms and conditions of this Agreement shall control.

 

(b)           Notice of Issuance, Amendment, Renewal, Extension; Certain Conditions.  To request the issuance of a Letter of Credit (or the amendment, renewal or extension of an outstanding Letter of Credit), the Borrower Representative US shall hand deliver or facsimile (or transmit by electronic communication, if arrangements for doing so have been approved by the Issuing Bank) to the Issuing Bank and the Administrative Agent (prior to 9:00 am, Chicago time, at least three (3) Business Days prior to the requested date of issuance, amendment, renewal or extension, or such shorter period of time as may be agreed to by the Administrative Agent and the Issuing Bank) a notice requesting the issuance of a Letter of Credit, or identifying the Letter of Credit to be amended, renewed or extended, and specifying the date of issuance, amendment, renewal or extension (which shall be a Business Day), the date on which such Letter of Credit is to expire (which shall comply with Section 2.6(c)), the amount of such Letter of Credit, the name and address of the beneficiary thereof and such other information as shall be necessary to prepare, amend, renew or extend such Letter of Credit.  If requested by the Issuing Bank, the requesting US Borrower also shall submit a letter of credit application on the Issuing Bank’s standard form in connection with any request for a Letter of Credit.  A Letter of Credit shall be issued, amended, renewed or extended only if (and upon issuance, amendment, renewal or extension of each Letter of Credit each US Borrower shall be deemed to represent and warrant that), after giving effect to such issuance, amendment, renewal or extension (i) the LC Exposure shall not exceed $50,000,000 and (ii) the total US Revolving Exposures shall not exceed (A) the lesser of the total US Revolving Commitments and the US Borrowing Base, minus (B) the Commitment Reserves, minus (C) the Availability Block.

 

(c)           Expiration Date.  Each Letter of Credit shall expire at or prior to the close of business on the earlier of (i) the date one year after the date of the issuance of such Letter of Credit (or, in the case of any renewal or extension thereof, one year after such renewal or extension) and (ii) the date that is five (5) Business Days prior to the Maturity Date.

 

65

 

(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 US Revolving Lenders, the Issuing Bank hereby grants to each US Revolving Lender, and each US Revolving Lender hereby acquires from the Issuing Bank, a participation in such Letter of Credit equal to such Lender’s Applicable Percentage of the aggregate amount available to be drawn under such Letter of Credit.  In consideration and in furtherance of the foregoing, each US Revolving Lender hereby absolutely and unconditionally agrees to pay to the Administrative Agent, for the account of the Issuing Bank, such Lender’s Applicable Percentage of each LC Disbursement made by the Issuing Bank and not reimbursed by the US Borrowers on the date due as provided in Section 2.6(e), or of any reimbursement payment required to be refunded to the US Borrowers for any reason.  Each US 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, and that each such payment shall be made without any offset, abatement, withholding or reduction whatsoever.

 

(e)           Reimbursement.  If the Issuing Bank shall make any LC Disbursement in respect of a Letter of Credit, the US Borrowers shall reimburse such LC Disbursement by paying to the Administrative Agent an amount equal to such LC Disbursement not later than 11:00 a.m., Chicago time, on the date that such LC Disbursement is made, if the Borrower Representative US shall have received notice of such LC Disbursement prior to 9:00 a.m., Chicago time, on such date, or, if such notice has not been received by the Borrower Representative US prior to such time on such date, then not later than 11:00 a.m., Chicago time, on (i) the Business Day that the Borrower Representative US receives such notice, if such notice is received prior to 9:00 a.m., Chicago time, on the day of receipt, or (ii) the Business Day immediately following the day that the Borrower Representative US receives such notice, if such notice is not received prior to such time on the day of receipt; provided  that, if such LC Disbursement is not less than $250,000, the US Borrowers may, subject to the conditions to borrowing set forth herein, request in accordance with Section 2.3 or Section 2.5 that such payment be financed with an ABR Revolving Loan Borrowing or Swingline Loan Borrowing in an equivalent amount and, to the extent so financed, the US Borrowers’ obligation to make such payment shall be discharged and replaced by the resulting ABR Revolving Loan Borrowing or Swingline Loan Borrowing.  If the US Borrowers fail to make such payment when due, the Administrative Agent shall notify each US Revolving Lender of the applicable LC Disbursement, the payment then due from the US Borrowers in respect thereof and such Lender’s Applicable Percentage thereof.  Promptly following receipt of such notice, each US Revolving Lender shall pay to the Administrative Agent its Applicable Percentage of the payment then due from the US Borrowers, in the same manner as provided in Section 2.7 with respect to Loans made by such Lender (and Section 2.7 shall apply, mutatis mutandis, to the payment obligations of the US Revolving Lenders), and the Administrative Agent shall promptly pay to the Issuing Bank the amounts so received by it from the US Revolving Lenders.  Promptly following receipt by the Administrative Agent of any payment from the US Borrowers pursuant to this paragraph, the Administrative Agent shall distribute such payment to the Issuing Bank or, to the extent that US Revolving Lenders have made payments pursuant to this paragraph to reimburse the Issuing Bank, then to such Lenders and the Issuing Bank as their interests may appear.  Any payment made by a US Revolving 

 

66

 

Lender pursuant to this paragraph to reimburse the Issuing Bank for any LC Disbursement (other than the funding of ABR Revolving Loans or a Swingline Loan as contemplated above) shall not constitute a Loan and shall not relieve the US Borrowers of their obligation to reimburse such LC Disbursement.

 

(f)            Obligations Absolute.  The US Borrowers’ obligation to reimburse LC Disbursements as provided in Section 2.6(e) shall be absolute, unconditional and irrevocable, and shall be performed strictly in accordance with the terms of this Agreement under any and all circumstances whatsoever and irrespective of (i) any lack of validity or enforceability of any Letter of Credit or this Agreement, or any term or provision therein, (ii) any draft or other document presented under a Letter of Credit proving to be forged, fraudulent or invalid in any respect or any statement therein being untrue or inaccurate in any respect, (iii) payment by the Issuing Bank under a Letter of Credit against presentation of a draft or other document that does not comply with the terms of such Letter of Credit, or (iv) any other event or circumstance whatsoever, whether or not similar to any of the foregoing, that might, but for the provisions of this Section, constitute a legal or equitable discharge of, or provide a right of setoff against, the US Borrowers’ obligations hereunder.  Neither the Administrative Agent, the US Revolving Lenders nor the Issuing Bank, nor any of their Related Parties, shall have any liability or responsibility by reason of or in connection with the issuance or transfer of any Letter of Credit or any payment or failure to make any payment thereunder (irrespective of any of the circumstances referred to in the preceding sentence), or any error, omission, interruption, loss or delay in transmission or delivery of any draft, notice or other communication under or relating to any Letter of Credit (including any document required to make a drawing thereunder), any error in interpretation of technical terms or any consequence arising from causes beyond the control of the Issuing Bank; provided  that the foregoing shall not be construed to excuse the Issuing Bank from liability to the US Borrowers to the extent of any direct damages (as opposed to consequential damages, claims in respect of which are hereby waived by the US Borrowers to the extent permitted by applicable law) suffered by the US Borrowers 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 under a Letter of Credit.  The Issuing Bank shall promptly notify the Administrative Agent and the US Borrowers by telephone (confirmed by facsimile) of such demand for payment and whether the Issuing Bank has made or will make an LC Disbursement thereunder; provided  that any failure to give or delay in giving such notice shall not relieve the US Borrowers of their obligation to 

 

67

 

reimburse the Issuing Bank and the US Revolving Lenders with respect to any such LC Disbursement.

 

(h)           Interim Interest.  If the Issuing Bank shall make any LC Disbursement, then, unless the US Borrowers shall reimburse such LC Disbursement in full on the date such LC Disbursement is made, the unpaid amount thereof shall bear interest, for each day from and including the date such LC Disbursement is made to but excluding the date that the US Borrowers reimburse such LC Disbursement, at the rate per annum then applicable to ABR Revolving Loans; provided  that, if the US Borrowers fail to reimburse such LC Disbursement when due pursuant to Section 2.6(e), then Section 2.13(e) shall apply.  Interest accrued pursuant to this paragraph shall be for the account of the Issuing Bank, except that interest accrued on and after the date of payment by any US Revolving Lender pursuant to Section 2.6(e) to reimburse the Issuing Bank shall be for the account of such Lender to the extent of such payment.

 

(i)            Replacement of the Issuing Bank.  The Issuing Bank may be replaced at any time by written agreement among the Borrower Representative US, the Administrative Agent, the replaced Issuing Bank and the successor Issuing Bank.  The Administrative Agent shall notify the US Revolving Lenders of any such replacement of the Issuing Bank.  At the time any such replacement shall become effective, the US Borrowers shall pay all unpaid fees accrued for the account of the replaced Issuing Bank pursuant to Section 2.12(b).  From and after the effective date of any such replacement, (i) the successor Issuing Bank shall have all the rights and obligations of the Issuing Bank under this Agreement with respect to Letters of Credit to be issued thereafter and (ii) references herein to the term “Issuing Bank” shall be deemed to refer to such successor or to any previous Issuing Bank, or to such successor and all previous Issuing Banks, as the context shall require.  After the replacement of an Issuing Bank hereunder, the replaced Issuing Bank shall remain a party hereto and shall continue to have all the rights and obligations of an Issuing Bank under this Agreement with respect to Letters of Credit issued by it prior to such replacement, but shall not be required to issue additional Letters of Credit.

 

(j)            Cash Collateralization.  If any Event of Default shall occur and be continuing, on the Business Day that the Borrower Representative US receives notice from the Administrative Agent or the Required Lenders (or, if the maturity of the Loans has been accelerated, US Revolving Lenders with LC Exposure representing greater than 50% of the total LC Exposure) demanding the deposit of cash collateral pursuant to this paragraph, the US Borrowers shall deposit in an account with the Administrative Agent, in the name of the Administrative Agent and for the benefit of the US Revolving Lenders (the “LC Collateral Account”), an amount in cash equal to 105% of the LC Shortfall Amount as of such date plus 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 the Borrowers described in clause (h) or (i) of Article VII.  Such deposit shall be held by the Administrative Agent as collateral for the payment and performance of the Secured Obligations.  The Administrative Agent shall have exclusive dominion and control, including the exclusive right of withdrawal, over such account and the US Borrowers hereby grant the Administrative Agent a security interest in the LC Collateral Account.  Other than any interest earned on the investment of such deposits, which investments shall be made at the option and sole discretion of the Administrative Agent and at the US Borrowers’ risk and expense, such 

 

68

 

deposits shall not bear interest.  Interest or profits, if any, on such investments shall accumulate in such account.  Moneys in such account shall be applied by the Administrative Agent to reimburse the Issuing Bank for LC Disbursements for which it has not been reimbursed and, to the extent not so applied, shall be held for the satisfaction of the reimbursement obligations of the US Borrowers for the LC Exposure at such time or, if the maturity of the Loans has been accelerated (but subject to the consent of US Revolving Lenders with LC Exposure representing greater than 50% of the total LC Exposure), be applied to satisfy other Secured Obligations.  If the US Borrowers are required to provide an amount of cash collateral hereunder as a result of the occurrence of a Default, such amount (to the extent not applied as aforesaid) shall be returned to the US Borrowers within three (3) Business Days after all such Defaults have been cured or waived.

 

Section 2.7            Funding of Borrowings.

 

(a)           Each US Revolving Lender (in the case of any Borrowing of US Revolving Loans) and, subject to Section 2.10(j), each Canadian Lender (in the case of any Borrowing of Canadian Revolving Loans) shall make each Loan to be made by it hereunder on the proposed date thereof by wire transfer of immediately available funds by 11:00 a.m. (in the case of Eurodollar Loans) and 1:00 p.m. (in the case of ABR, Canadian Prime Rate and B/A Loans), Chicago time, to the account of the Administrative Agent (or the Canadian Administrative Agent in the case of a Borrowing of Canadian Revolving Loans) most recently designated by it for such purpose by notice to the Lenders in an amount equal to such Lender’s Applicable Percentage; provided  that, Swingline Loans shall be made as provided in Section 2.5.  The Administrative Agent or the Canadian Administrative Agent (as applicable) will make such Loans available to the Borrower Representative US by promptly crediting the amounts so received, in like funds, to the applicable Canadian Funding Account or US Funding Account; provided  that ABR Revolving Loans made to finance the reimbursement of (i) an LC Disbursement as provided in Section 2.6(e) shall be remitted by the Administrative Agent to the Issuing Bank and (ii) a Protective Advance or an Overadvance shall be retained by the Administrative Agent.

 

(b)           Unless the Administrative Agent or the Canadian Administrative Agent (as applicable) shall have received notice from a Lender prior to the proposed date of any Borrowing that such Lender will not make available to the Administrative Agent or the Canadian Administrative Agent (as applicable) such Lender’s share of such Borrowing, subject to Section 2.10(j) with respect to Canadian Revolving Loans, the Administrative Agent or the Canadian Administrative Agent (as applicable) may assume that such Lender has made such share available on such date in accordance with Section 2.7(a) and may, in reliance upon such assumption, make available to the applicable Borrowers a corresponding amount.  In such event, if a Lender has not in fact made its share of the applicable Borrowing available to the Administrative Agent or the Canadian Administrative Agent (as applicable), then the applicable Lender and the applicable Borrowers severally agree to pay to the Administrative Agent or the Canadian Administrative Agent (as applicable) forthwith on demand such corresponding amount with interest thereon, for each day from and including the date such amount is made available to such Borrowers to but excluding the date of payment to the Administrative Agent, at (i) in the case of such Lender, the greater of the Federal Funds Effective Rate and a rate determined by the Administrative Agent in accordance with banking industry rules on interbank compensation or 

 

69

 

(ii) in the case of such Borrowers, the interest rate applicable to ABR Loans.  If such Lender pays such amount to the Administrative Agent or the Canadian Administrative Agent (as applicable), then such amount shall constitute such Lender’s Loan included in such Borrowing.

 

Section 2.8            Interest Elections.

 

(a)           Each Borrowing initially shall be of the Type specified in the applicable Borrowing Request and, in the case of a Eurodollar Borrowing or a B/A Borrowing, shall have an initial Interest Period or Contract Period (as applicable) as specified in such Borrowing Request.  Thereafter, the applicable Borrower Representative may elect to convert such Borrowing to a different Type or to continue such Borrowing and, in the case of a Eurodollar Borrowing or a B/A Borrowing, may elect Interest Periods or Contract Periods (as applicable) therefor, all as provided in this Section.  The applicable Borrower Representative may elect different options with respect to different portions of the affected Borrowing, in which case each such portion shall be allocated ratably among the Lenders holding the Loans comprising such Borrowing, and the Loans comprising each such portion shall be considered a separate Borrowing.  This Section shall not apply to Swingline Loan Borrowings, Overadvances or Protective Advances, which may not be converted or continued.

 

(b)           To make an election pursuant to this Section, the applicable Borrower Representative shall notify the Administrative Agent or the Canadian Administrative Agent (as applicable) of such election by telephone by the time that a Borrowing Request would be required under Section 2.3 if the Borrowers were requesting a Borrowing of the Type resulting from such election to be made on the effective date of such election.  Each such telephonic Interest Election Request shall be irrevocable and shall be confirmed promptly by hand delivery or facsimile to the Administrative Agent or the Canadian Administrative Agent (as applicable) of a written Interest Election Request in a form approved by the Administrative Agent or the Canadian Administrative Agent (as applicable) and signed by the applicable Borrower Representative.

 

(c)           Each telephonic and written Interest Election Request shall specify the following information in compliance with Section 2.2:

 

(i)            the Borrowing to which such Interest Election Request applies and, if different options are being elected with respect to different portions thereof, the portions thereof to be allocated to each resulting Borrowing (in which case the information to be specified pursuant to clauses (iii) and (iv) below shall be specified for each resulting Borrowing);

 

(ii)           the effective date of the election made pursuant to such Interest Election Request, which shall be a Business Day;

 

(iii)          whether the resulting Borrowing is to be an ABR Borrowing or a Eurodollar Borrowing; and

 

(iv)          if the resulting Borrowing is a Eurodollar Borrowing, the Interest Period to be applicable thereto after giving effect to such election, which shall be a period contemplated by the definition of the term “Interest Period”.

 

70

 

If any such Interest Election Request requests a Eurodollar Borrowing but does not specify an Interest Period, then the Borrowers shall be deemed to have selected an Interest Period of one month’s duration.

 

(d)           Promptly following receipt of an Interest Election Request, the Administrative Agent or the Canadian Administrative Agent (as applicable) shall advise each Lender affected thereby of the details thereof and of such Lender’s portion of each resulting Borrowing.

 

(e)           If a Borrower Representative fails to deliver a timely Interest Election Request with respect to a Eurodollar Borrowing prior to the end of the Interest Period applicable thereto, then, unless such Borrowing is repaid as provided herein, at the end of such Interest Period such Borrowing shall be converted to an ABR Borrowing.  Notwithstanding any contrary provision hereof, if a Default has occurred and is continuing and the Administrative Agent, at the request of the Required Lenders, so notifies the Borrower Representatives, then, so long as a Default is continuing (i) no outstanding Borrowing may be converted to or continued as a Eurodollar Borrowing and (ii) unless repaid, each Eurodollar Borrowing shall be converted to an ABR Borrowing at the end of the Interest Period applicable thereto.

 

(f)            With respect to each B/A Borrowing, at or before 12:00 p.m. (noon), Toronto, Ontario Canada time, three (3) Business Days before the maturity date of such B/As, the Canadian Borrowers shall notify in writing the Canadian Administrative Agent, if the Canadian Borrowers intend to issue B/As on such maturity date to provide for the payment of such maturing B/As. If the Canadian Borrowers fail to notify the Canadian Administrative Agent of their intention to issue B/As on such maturity the Canadian Borrowers shall provide payment to the Canadian Administrative Agent for the account of the Canadian Lenders of an amount equal to the aggregate face amount of such B/As on the maturity date of such B/As. If the Canadian Borrowers fail to make such payment, such maturing B/As shall be deemed to have been converted on their maturity date into a Canadian Prime Rate Loan in an aggregate principal amount equal to the aggregate face amounts of such B/As and the Canadian Borrowers shall on demand jointly and severally pay any losses, costs or penalties that may have been incurred by the Canadian Administrative Agent or any Canadian Lender due to the failure of the Canadian Borrowers to make such payment. No B/A may be rolled over when any Default has occurred and is continuing and the Canadian Administrative Agent has or the Canadian Lenders have determined in its or their sole discretion that such conversion is not appropriate.

 

(g)           Subject to the provisions of this Agreement, the Canadian Borrowers may, prior to the Maturity Date, effective on any Business Day, convert in whole or part, Canadian Prime Rate Loans into B/As or vice versa (but only on the last day of a Contract Period in the case of conversions of B/As) upon giving to the Canadian Administrative Agent three (3) Business Days’ prior notice, provided, that:  (i) no Canadian Prime Rate Loan may be converted into a B/A when any Default has occurred and is continuing and the Canadian Administrative Agent has or the Canadian Lenders have determined in its or their sole reasonable discretion that such conversion is not appropriate; and (ii) each conversion pursuant to this paragraph shall be no less than C$500,000 and shall be in an integral multiple of C$100,000.  In the case of conversions of Canadian Prime Rate Loans into B/As, the Canadian Borrowers shall jointly and severally pay to the Canadian Administrative Agent, for the account of the Canadian Lender

 

71

 

accepting such B/A, on the date of such conversion an amount equal to (A) the difference between the principal amount of the converted Canadian Prime Rate Loan less the Discount Proceeds plus (B) the Acceptance Fee to which such Canadian Lender is entitled upon acceptance of such B/A.  If the Canadian Borrowers shall not have delivered a Borrowing Request in accordance with this paragraph prior to the maturity date then in effect for any B/A Borrowing requesting that such Borrowing be refinanced with another B/A Borrowing or converted to a Canadian Prime Rate Borrowing, then the Canadian Borrowers shall (unless the Canadian Borrowers have notified the Canadian Administrative Agent, before 11:00 a.m., Toronto, Ontario Canada time, not less than one (1) Business Day prior to such maturity date, that such Borrowing is to be repaid on such maturity date) be deemed to have delivered a Borrowing Request requesting that such Borrowing be refinanced with a new Borrowing of the same amount, and such new Borrowing shall be a Canadian Prime Rate Borrowing.

 

Section 2.9            Termination and Reduction of Commitments.

 

(a)           Unless previously terminated, the Commitments shall terminate on the Maturity Date.

 

(b)           The US Borrowers may at any time terminate the US Commitments in their entirety upon (i) the payment in full of all outstanding US Loans, together with accrued and unpaid interest thereon and on any Letters of Credit, (ii) the cancellation and return of all outstanding Letters of Credit (or alternatively, with respect to each such Letter of Credit, the furnishing to the Administrative Agent of a cash deposit (or at the discretion of the Administrative Agent a back up standby letter of credit satisfactory to the Administrative Agent) equal to 105% of the LC Shortfall Amount as of such date), (iii) the payment in full of the accrued and unpaid fees owing by the US Borrowers, and (iv) the payment in full of all reimbursable expenses and other Obligations of the US Borrowers together with accrued and unpaid interest thereon.  The Canadian Borrowers may at any time terminate the Canadian Commitments in their entirety upon (1) the payment in full of all outstanding Canadian Loans, together with accrued and unpaid interest thereon, (2) the payment in full of the accrued and unpaid fees owing by the Canadian Borrowers, and (3) the payment in full of all reimbursable expenses and other Obligations of the Canadian Borrowers together with accrued and unpaid interest thereon.

 

(c)           The US Borrowers may from time to time reduce the US Revolving Commitments; provided  that (x) each reduction of the US Revolving Commitments shall be in an amount that is an integral multiple of $10,000,000 and (y) the US Borrowers shall not reduce the US Revolving Commitments if, after giving effect to any concurrent prepayment of the US Revolving Loans in accordance with Section 2.10, the sum of the US Revolving Exposures would exceed (A) the lesser of the total US Revolving Commitments and the US Borrowing Base minus (B) the Commitment Reserves minus (C) the Availability Block.  In the event the sum of the total unfunded Commitments plus the aggregate principal amount (without duplication) of Revolving Exposures and other Loans outstanding at any time is reduced to $100,000,000 or less, the Commitments shall terminate and all Obligations shall become immediately due and payable in full.

 

72

 

(d)           The applicable Borrower Representative shall notify the Administrative Agent of any election to terminate the US Commitments or the Canadian Commitments under Section 2.9(b) or to reduce the US Revolving Commitments under Section 2.9(c) at least thirty (30) days prior to the effective date of such termination or reduction, specifying such election and the effective date thereof.  Promptly following receipt of any notice, the Administrative Agent shall advise the Lenders of the contents thereof.  Each notice delivered by a Borrower Representative pursuant to this Section shall be irrevocable; provided  that a notice of termination of the Commitments delivered by a Borrower Representative 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 Representative (by notice to the Administrative Agent on or prior to the specified effective date) if such condition is not satisfied.  Any termination or reduction of the Commitments shall be permanent.  Each reduction of the US Revolving Commitments shall be made ratably among the US Revolving Lenders in accordance with their respective US Revolving Commitments.

 

Section 2.10         Repayment and Amortization of Loans; Evidence of Debt.

 

(a)           The US Borrowers hereby, jointly and severally, unconditionally promise to pay (i) to the Administrative Agent for the account of each US Revolving Lender the then unpaid principal amount of each US Revolving Loan on the Maturity Date, (ii) to the Administrative Agent the then unpaid amount of each US Protective Advance on the earlier of the Maturity Date and demand by the Administrative Agent, (iii) to the Swingline Lender the then unpaid principal amount of each Swingline Loan on the earlier of the 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 Swingline Loans then outstanding, and (iv) to the Administrative Agent the then unpaid principal amount of each US Overadvance on the earlier of the Maturity Date, demand by the Administrative Agent and the 30th day after such US Overadvance is made.

 

(b)           The Canadian Borrowers hereby, jointly and severally, unconditionally promise to pay (i) to the Canadian Administrative Agent for the account of each Canadian Lender the then unpaid principal amount of each Canadian Revolving Loan on the Maturity Date, (ii) to the Canadian Administrative Agent the then unpaid amount of each Canadian Protective Advance on the earlier of the Maturity Date and demand by the Canadian Administrative Agent, and (iii) to the Canadian Administrative Agent the then unpaid principal amount of each Canadian Overadvance on the earlier of the Maturity Date, demand by the Canadian Administrative Agent and the 30th day after such Canadian Overadvance is made.

 

(c)           At all times that full cash dominion is in effect pursuant to Section 7.3 of the US Security Agreement, on each Business Day, at or before 11:00 a.m., Chicago time, the Administrative Agent shall apply all immediately available funds credited to the Collection Accounts (as defined in the US Security Agreement) other than the Export-Related Collection Account first to prepay any US Protective Advances and US Overadvances that may be outstanding, pro rata, and second to prepay the US Revolving Loans (including Swingline Loans) and, if an Event of Default has occurred and is continuing, to cash collateralize outstanding LC Exposure in an amount equal to 105% of the LC Shortfall Amount.

 

73

 

(d)           At all times that full cash dominion is in effect pursuant to Section 7.3 of the Canadian Security Agreement, on each Business Day, at or before 11:00 a.m., Toronto, Ontario, Canada time, the Canadian Administrative Agent shall, subject to Section 2.10(j), apply all immediately available funds credited to the Collection Accounts (as defined in the Canadian Security Agreement) first to prepay any Canadian Protective Advances and Canadian Overadvances that may be outstanding, pro rata, and second to prepay the Canadian Revolving Loans.

 

(e)           Each Lender shall maintain in accordance with its usual practice an account or accounts evidencing the indebtedness of the Borrowers to such Lender resulting from each Loan made by such Lender, including the amounts of principal and interest payable and paid to such Lender from time to time hereunder.

 

(f)            The Administrative Agent shall maintain accounts in which it shall record (i) the amount of each US Loan made hereunder, the Class and Type thereof and the Interest Period applicable thereto, (ii) the amount of any principal or interest due and payable or to become due and payable from the US Borrowers to each US Lender hereunder and (iii) the amount of any sum received by the Administrative Agent hereunder for the account of the US Lenders and each US Lender’s share thereof.

 

(g)           The Canadian Administrative Agent shall maintain accounts in which it shall record (i) the amount of each Canadian Revolving Loan made hereunder, the Class and Type thereof and the Interest Period or Contract Period applicable thereto, (ii) the amount of any principal or interest due and payable or to become due and payable from the Canadian Borrowers to each Canadian Lender hereunder and (iii) the amount of any sum received by the Canadian Administrative Agent hereunder for the account of the Canadian Lenders and each Canadian Lender’s share thereof.

 

(h)           The entries made in the accounts maintained pursuant to Section 2.10(e) - Section 2.10(g) shall be prima facie evidence of the existence and amounts of the obligations recorded therein; provided  that the failure of any Lender, the Administrative Agent or the Canadian Administrative Agent to maintain such accounts or any error therein shall not in any manner affect the obligation of the Borrowers to repay the Loans in accordance with the terms of this Agreement.

 

(i)            Any Lender may request that Loans made by it be evidenced by a promissory note.  In such event, the Borrowers shall prepare, execute and deliver to such Lender a promissory note payable to the order of such Lender (or, if requested by such Lender, to such Lender and its registered assigns) and in a form approved by the Administrative Agent.  Thereafter, the Loans evidenced by such promissory note and interest thereon shall at all times (including after assignment pursuant to Section 9.4) 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).

 

(j)            Subject to Section 2.1(b)(ii), the Canadian Administrative Agent may (but shall not be required to) make Canadian Revolving Loans to the Canadian Borrowers notwithstanding the fact that the Borrowing Request therefor does not comply with the delivery

 

74

 

deadlines set forth in Section 2.3.  Each Canadian Lender hereby unconditionally agrees to make a settlement regarding any such Canadian Revolving Loans in accordance with this Section.  The Canadian Administrative Agent shall on any Canadian Settlement Date, and upon notice given by the Canadian Administrative Agent no later than 12:00 noon Toronto, Ontario Canada time, request each Canadian Lender to make and each Canadian Lender hereby agrees to make, a Canadian Revolving Loan in an amount equal to such Canadian Lender’s Applicable Percentage of the aggregate amount of the Canadian Revolving Loans made by the Canadian Administrative Agent from the preceding Canadian Settlement Date to the date of such notice.  Each Canadian Lender’s obligation to make the Canadian Revolving Loans referred to in this Section and to make the settlements pursuant to this Section shall not be affected by any circumstance, including, without limitation, (i) any set-off, counterclaim, recoupment, defense or other right which any such Canadian Lender or the Canadian Borrowers may have against the Canadian Administrative Agent, any Canadian Borrower, any Canadian Lender or any other Person for any reason whatsoever; (ii) any adverse change in the condition (financial or otherwise) of the Canadian Borrowers; or (iii) any other circumstance, happening or event whatsoever, whether or not similar to any of the foregoing.  Without limiting the liability and obligation of each Canadian Lender to make such advances, the Canadian Borrowers authorize the Canadian Administrative Agent to charge the Canadian Borrower’s account to the extent amounts received from the Canadian Lenders are not sufficient to repay in full the amount of any such deficiency.  On the Canadian Settlement Date, the Canadian Administrative Agent and the Canadian Lenders shall each remit to the other, in immediately available funds, all amounts necessary so as to ensure that, as of the Canadian Settlement Date, the Canadian Lenders shall have their Applicable Percentage of all outstanding Canadian Revolving Exposure.  The Canadian Lenders acknowledge and agree that the Canadian Revolving Exposure of the Canadian Administrative Agent may exceed the amount of its Canadian Revolving Commitment (the “Canadian Administrative Agent Overline”) solely as a result of the Canadian Administrative Agent making advances on behalf of the other Canadian Lenders pending settlement pursuant to this Section, but that such Canadian Administrative Agent Overline shall in no way affect, limit or modify in any respect the other Canadian Lenders’ obligations to settle with the Canadian Administrative Agent provided in this Section.  The Canadian Administrative Agent shall, after receipt of any interest and fees earned under this Agreement, promptly remit to the Canadian Lenders their pro rata portion (based on their Applicable Percentages) of any (i) fees they are entitled to receive, and (ii) interest computed at the rate and as provided for in this Agreement on all outstanding amounts advanced by the Canadian Lenders on each Canadian Settlement Date, prior to adjustment for such settlement, which fees and interest are subsequent to the last remittance by the Canadian Administrative Agent to the Canadian Lenders of such interest amounts, provided, however, that, the Canadian Lenders (other than the Canadian Administrative Agent in its role as the agent for and on behalf of the Canadian Lenders) shall not share in any of the fees provided for in any Fee Letter.  The Canadian Administrative Agent shall not be permitted to make any B/A Loans or Eurodollar Loans on behalf of the other Canadian Lenders.

 

Section 2.11         Prepayment of Loans.

 

(a)           The Borrowers shall have the right at any time and from time to time to prepay any Borrowing (other than B/A Loans) in whole or in part, subject to prior notice in accordance with Section 2.11(g).

 

75

 

(b)           Except for US Overadvances permitted under Section 2.5, in the event and on such occasion that the total US Revolving Exposure exceeds (x) the lesser of (A) the aggregate US Revolving Commitments and (B) the US Borrowing Base, minus (y) the Commitment Reserves, minus (z) the Availability Block with respect to the US Revolving Commitments, the US Borrowers shall prepay the US Revolving Loans, LC Exposure and/or Swingline Loans in an aggregate amount equal to such excess.

 

(c)           Except for Canadian Overadvances permitted under Section 2.5, in the event and on such occasion that the total Canadian Revolving Exposure exceeds (x) the lesser of (A) the aggregate Canadian Revolving Commitments and (B) the Canadian Borrowing Base, minus (y) the Commitment Reserves with respect to the Canadian Revolving Commitments, the Canadian Borrowers shall prepay the Canadian Revolving Loans in an aggregate amount equal to such excess.

 

(d)           In the event and on each occasion that any Net Proceeds are received by or on behalf of any Loan Party in respect of any Prepayment Event, the Borrowers shall, immediately after such Net Proceeds are received by any Loan Party, prepay the Obligations as set forth in Section 2.11(e) or Section 2.11(f), as applicable, below in an aggregate amount equal to 100% of such Net Proceeds.

 

(e)           All such amounts prepaid by the US Borrowers pursuant to Section 2.11(d) (as to any insurance or condemnation proceeds, to the extent they arise from casualties or losses to Collateral) shall be applied, first to prepay any US Protective Advances and US Overadvances that may be outstanding, pro rata, second to prepay the US Revolving Loans (including Swingline Loans) without a corresponding reduction in the US Revolving Commitments and, if an Event of Default shall have occurred and is continuing, to cash collateralize outstanding LC Exposure in an amount equal to 105% of the LC Shortfall Amount, third to prepay any Canadian Protective Advances and Canadian Overadvances that may be outstanding, pro rata, fourth to prepay the Canadian Revolving Loans without a corresponding reduction in the Canadian Revolving Commitments, and fifth, if an Event of Default shall have occurred and is continuing, to repay the Export-Related Obligations.  Notwithstanding the foregoing, all such amounts required to be repaid by the US Borrowers pursuant to Section 2.11(d) (as to any insurance or condemnation proceeds to the extent they arise from casualties or losses to Export-Related Inventory or Proceeds thereof) shall be applied in the manner provided in the Export-Related Loan Agreement to the extent required thereunder, and then as provided in this paragraph.  If the precise amount of insurance or condemnation proceeds allocable to Inventory as compared to equipment, fixtures and Real Property is not otherwise determined, the allocation and application of those proceeds shall be determined by the Administrative Agent, in its Permitted Discretion.

 

(f)            All such amounts prepaid by the Canadian Borrowers pursuant to Section 2.11(d) (as to any insurance or condemnation proceeds, to the extent they arise from casualties or losses to Collateral) shall be applied, first to prepay any Canadian Protective Advances and Canadian Overadvances that may be outstanding, pro rata, and second to prepay the Canadian Revolving Loans without a corresponding reduction in the Canadian Revolving Commitments.

 

76

 

(g)           the applicable Borrower Representative shall notify the Administrative  Agent (and, in the case of prepayment of a Swingline Loan, the Swingline Lender) by telephone (confirmed by facsimile) of any prepayment hereunder (i) in the case of prepayment of a Eurodollar Borrowing, not later than 10:00 a.m., Chicago time, three (3) Business Days before the date of prepayment, (ii) in the case of prepayment of an ABR Borrowing, not later than 10:00 a.m., Chicago time, one (1) Business Day before the date of prepayment or (iii) in the case of prepayment of a Swingline Loan, not later than 11:00 a.m., Chicago time, on the date of prepayment.  Each such notice shall be irrevocable and shall specify the prepayment date and the principal amount of each Borrowing or portion thereof to be prepaid; provided  that, if a notice of prepayment is given in connection with a conditional notice of termination of the Commitments as contemplated by Section 2.9, then such notice of prepayment may be revoked if such notice of termination is revoked in accordance with Section 2.9.  Promptly following receipt of any such notice relating to a US Revolving Loan Borrowing, the Administrative Agent shall advise the US Lenders of the contents thereof.  Each partial prepayment of any US Revolving Loan Borrowing shall be in an amount that would be permitted in the case of an advance of a US Revolving Loan Borrowing, as applicable, of the same Type as provided in Section 2.2.  Each prepayment of a US Revolving Loan Borrowing shall be applied ratably to the US Revolving Loans included in the prepaid Borrowing.  Prepayments shall be accompanied by accrued interest to the extent required by Section 2.13.

 

(h)           The Canadian Borrowers shall notify the Canadian Administrative Agent by telephone (confirmed by facsimile) of any prepayment hereunder (i) in the case of prepayment of a Eurodollar Borrowing, not later than 10:00 a.m., Chicago time, three (3) Business Days before the date of prepayment, or (ii) in the case of prepayment of an ABR or Canadian Prime Rate Borrowing, not later than 10:00 a.m., Chicago time, one (1) Business Day before the date of prepayment.  Each such notice shall be irrevocable and shall specify the prepayment date and the principal amount of each Borrowing or portion thereof to be prepaid; provided  that, if a notice of prepayment is given in connection with a conditional notice of termination of the Commitments as contemplated by Section 2.9, then such notice of prepayment may be revoked if such notice of termination is revoked in accordance with Section 2.9.  Promptly following receipt of any such notice relating to a Canadian Revolving Loan Borrowing, the Canadian Administrative Agent shall advise the Canadian Lenders of the contents thereof.  Each partial prepayment of any Canadian Revolving Loan Borrowing shall be in an amount that would be permitted in the case of an advance of a Canadian Revolving Loan Borrowing of the same Type as provided in Section 2.2.  Each prepayment of a Canadian Revolving Loan Borrowing shall be applied ratably to the Canadian Revolving Loans included in the prepaid Borrowing.  Prepayments shall be accompanied by accrued interest to the extent required by Section 2.13.

 

Section 2.12         Fees.

 

(a)           The US Borrowers agree, jointly and severally, to pay to the Administrative Agent for the account of each US Revolving Lender a commitment fee computed at a rate per annum equal to the Commitment Fee Rate on the average daily amount of the aggregate Available US Revolving Commitments during the period from and including the Effective Date to but excluding the date on which the US Revolving Commitments terminate.  The Canadian Borrowers agree, jointly and severally, to pay to the Canadian Administrative

 

77

 

Agent for the account of each Canadian Lender a commitment fee computed at a rate per annum equal to the Commitment Fee Rate on the average daily amount of the aggregate Available Canadian Revolving Commitments during the period from and including the Effective Date to but excluding the date on which the Canadian Revolving Commitments terminate.  Accrued commitment fees shall be payable in arrears on the first day of each calendar month in respect of the previous calendar month and on the date on which the Commitments terminate, commencing on the first such date to occur after the date hereof.  All 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).

 

(b)           The US Borrowers agree, jointly and severally, to pay (i) to the Administrative Agent for the account of each US Revolving Lender a participation fee with respect to its participations in Letters of Credit, which shall accrue at a rate per annum equal to the Applicable Rate used to determine the interest rate applicable to Eurodollar Revolving Loans on the average daily amount of such Lender’s LC Exposure (excluding any portion thereof attributable to unreimbursed LC Disbursements) during the period from and including the Effective Date to but excluding the later of the date on which such US Lender’s US Revolving Commitment terminates and the date on which such US Revolving Lender ceases to have any LC Exposure, and (ii) to the Issuing Bank a fronting fee, which shall accrue at the rate of 0.25% per annum on the average daily amount of the LC Exposure (excluding any portion thereof attributable to unreimbursed LC Disbursements) during the period from and including the Effective Date to but excluding the later of the date of termination of the US Revolving Commitments and the date on which there ceases to be any LC Exposure, as well as the Issuing Bank’s standard fees with respect to the issuance, amendment, renewal or extension of any Letter of Credit or processing of drawings thereunder.  Participation fees and fronting fees accrued through and including the last day of each calendar month shall be payable on the first Business Day following such last day, commencing on the first such date to occur after the Effective Date; provided  that all such fees shall be payable on the date on which the US Revolving Commitments terminate and any such fees accruing after the date on which the US Commitments terminate shall be payable on demand.  Any other fees payable to the Issuing Bank pursuant to this paragraph shall be payable within ten (10) days after demand.  All participation fees and fronting fees shall be computed on the basis of a year of 360 days and shall be payable for the actual number of days elapsed (including the first day but excluding the last day).

 

(c)           The US Borrowers agree, jointly and severally, to pay to the Administrative Agent, for its own account, fees payable in the amounts and at the times separately agreed upon between the Borrowers and the Administrative Agent.

 

(d)           All fees payable hereunder shall be paid on the dates due, in immediately available funds, to the Administrative Agent or the Canadian Administrative Agent (as applicable) (or to the Issuing Bank, in the case of fees payable to it) for distribution, in the case of commitment fees and participation fees, to the Lenders.  Fees paid shall not be refundable under any circumstances.

 

78

 

Section 2.13         Interest.

 

(a)           The Loans comprising each ABR Borrowing (including each Swingline Loan) shall bear interest at the Alternate Base Rate plus the Applicable Rate.

 

(b)           The Loans comprising each Eurodollar Borrowing shall bear interest at the Adjusted LIBO Rate for the Interest Period in effect for such Borrowing plus the Applicable Rate.

 

(c)           The Loans comprising each Canadian Prime Rate Borrowing shall bear interest at the Canadian Prime Rate plus the Applicable Rate.

 

(d)           Each Protective Advance and each Overadvance (i) made in Dollars shall bear interest at the Alternate Base Rate plus the Applicable Rate for ABR Loans plus 2% or (ii) made in C$ shall bear interest at the Canadian Prime Rate plus the Applicable Rate for Canadian Prime Rate Loans plus 2%.

 

(e)           Notwithstanding the foregoing, during the occurrence and continuance of an Event of Default, the Administrative Agent or the Required Lenders may, at their option, by notice to a Borrower Representative (which notice may be revoked at the option of the Required Lenders notwithstanding any provision of Section 2.9 requiring the consent of “each Lender affected thereby” for reductions in interest rates), declare that (i) all Loans shall bear interest at 2% plus the rate otherwise applicable to such Loans as provided in the preceding paragraphs of this Section or (ii) in the case of any other amount outstanding hereunder, such amount shall accrue at 2% plus the rate applicable to such fee or other obligation as provided hereunder.

 

(f)            Accrued interest on each ABR Loan, Eurodollar Loan and Canadian Prime Rate Loan shall be payable in arrears on each Interest Payment Date for such Loan and upon termination of the Commitments; provided  that (i) interest accrued pursuant to Section 2.13(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 or a Canadian Prime Rate Loan prior to the end of the Availability Period), accrued interest on the principal amount repaid or prepaid shall be payable on the date of such repayment or prepayment and (iii) in the event of any conversion of any Eurodollar 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)           All interest hereunder shall be computed on the basis of a year of 360 days, except that interest computed by reference to (i) the Canadian Prime Rate or (ii) the Alternate Base Rate at times when the Alternate Base Rate is based on the Prime Rate shall be computed on the basis of a year of 365 days (or 366 days in a leap year), and in each case shall be payable for the actual number of days elapsed (including the first day but excluding the last day).  The applicable Alternate Base Rate, Adjusted LIBO Rate or LIBO Rate shall be determined by the Administrative Agent, and such determination shall be conclusive absent manifest error.

 

(h)           Solely for purposes of determining the amount of interest which accrues and is payable in respect of Revolving Loans, payments of principal will be deemed to be applied to the outstanding principal balance of the Revolving Loans on the first Business Day

 

79

 

following receipt by the Administrative Agent or the Canadian Administrative Agent (as applicable) of collected funds.

 

Section 2.14         Bankers’ Acceptances.

 

(a)           Subject to the terms and conditions of this Agreement, the Canadian Borrowers may request Borrowings of Canadian Revolving Loans by presenting drafts for acceptance and purchase as B/As by the Canadian Lenders.

 

(b)           To facilitate availment of B/A Borrowings, the Canadian Borrowers hereby appoint each Canadian Lender as their attorney-in-fact to sign and endorse on their behalf, in handwriting or by facsimile or mechanical signature as and when deemed necessary by such Canadian Lender, blank forms of B/As in the form requested by such Canadian Lender. In this respect, it is each Canadian Lender’s responsibility to maintain an adequate supply of blank forms of B/As for acceptance under this Agreement.  The Canadian Borrowers recognize and agree that all B/As signed and/or endorsed on its behalf by a Canadian Lender shall jointly and severally bind the Canadian Borrowers as fully and effectually as if signed in the handwriting of and duly issued by the proper signing officers of each Canadian Borrower. Each Canadian Lender is hereby authorized to issue such B/As endorsed in blank in such face amounts as may be determined by such Canadian Lender, provided, that the aggregate amount thereof is equal to the aggregate amount of B/As required to be accepted and purchased by such Canadian Lender.  No Canadian Lender or any Affiliate thereof shall be liable for any damage, loss or other claim arising by reason of any loss or improper use of any such instrument except the gross negligence or willful misconduct of such Canadian Lender or its Affiliate, as applicable, or its officers, employees, agents or representatives. Each Canadian Lender shall maintain a record with respect to B/As (i) received by it in blank hereunder, (ii) voided by it for any reason, (iii) accepted and purchased by it hereunder and (iv) canceled at their respective maturities. Each Canadian Lender further agrees to retain such records in the manner and for the statutory periods provided in the various provincial or federal statutes and regulations which apply to such Canadian Lender. Each Canadian Lender agrees to provide a copy of such records to the Canadian Borrowers at the Canadian Borrowers’ expense upon request. On request by or on behalf of the Canadian Borrowers, a Canadian Lender shall cancel all forms of B/As which have been pre-signed or pre-endorsed on behalf of the Canadian Borrowers and which are held by such Canadian Lender and are not required to be issued in accordance with the Canadian Borrowers’ irrevocable notice.  The Canadian Borrowers agree that, at the request of the Canadian Administrative Agent, they shall deliver to the Canadian Administrative Agent a “depository note” which complies with the requirements of the Depository Bills and Notes Act (Canada) and consents to the deposit of any such depository note in the book-based clearance system maintained by the Canadian Depository for Securities.

 

(c)           Drafts of the Canadian Borrowers to be accepted as B/As hereunder shall be signed as set forth in this Section 2.14.  Notwithstanding that any person whose signature appears on any B/A may no longer be an authorized signatory for any Canadian Lender or the Canadian Borrowers at the date of issuance of a B/A, such signature shall nevertheless be valid and sufficient for all purposes as if such authority had remained in force at the time of such issuance and any such B/A so signed shall be binding on the Canadian Borrowers.

 

80

 

(d)           Promptly following receipt of a Borrowing Request or notice of rollover by way of B/As, the Canadian Administrative Agent shall so advise the Canadian Lenders and shall advise each Canadian Lender of the aggregate face amount of the B/As to be accepted by it and the applicable Contract Period (which shall be identical for all Canadian Lenders). The aggregate face amount of the B/As to be accepted by the Canadian Lenders in respect of any Borrowing or rollover of B/A Loans shall be not less than C$500,000 and shall be in an integral multiple of C$100,000.

 

(e)           Upon acceptance of a B/A by a Canadian Lender, such Canadian Lender shall purchase, or arrange the purchase of, such B/A from the Canadian Borrowers at the Discount Rate for such Canadian Lender applicable to such B/A accepted by it and provide to Canadian Administrative Agent the Discount Proceeds for the account of the Canadian Borrowers in which event an Acceptance Fee shall be payable by the Canadian Borrowers to such Canadian Lender in respect of such B/A and shall be set off against the Discount Proceeds payable by such Canadian Lender under this Section.

 

(f)            Each Canadian Lender may at any time and from time to time hold, sell, rediscount or otherwise dispose of any or all B/As accepted and purchased by it.

 

(g)           If a Canadian Lender is not a chartered bank under the Bank Act (Canada) or if a Canadian Lender notifies the Canadian Administrative Agent in writing that it is otherwise unable or unwilling to accept B/As, such Canadian Lender will, instead of accepting and purchasing B/As, purchase from the Canadian Borrowers a non-interest bearing note denominated in C$ (a “B/A Equivalent Note”), in the form of Exhibit K, issued by the Canadian Borrowers in the amount and for the same term as the draft which such Canadian Lender would otherwise have been required to accept and purchase hereunder.  Each such Canadian Lender will provide to the Canadian Administrative Agent the Discount Proceeds of such B/A Equivalent Note for the account of any Canadian Borrower.  Each such B/A Equivalent Note will bear interest at the same rate which would result if such Canadian Lender had accepted (and been paid an Acceptance Fee) and purchased (on a discounted basis) a B/A for the relevant Contract Period (it being the intention of the parties that each such B/A Equivalent Note shall have the same economic consequences for the Canadian Lenders and any Canadian Borrower as the B/A which such B/A Equivalent Note replaces).  All such interest shall be paid in advance on the date such B/A Loan is made, and will be deducted from the principal amount of such B/A Equivalent Note in the same manner in which the Discount Proceeds of a B/A would be deducted from the face amount of the B/A.  Subject to repayment requirements, on the last day of the relevant Contract Period for such B/A Equivalent Note, any Canadian Borrower shall be entitled to convert each such B/A Equivalent Note into another type of Loan, or to roll over each such B/A Equivalent Note into another B/A Equivalent Note, all in accordance with the corresponding provisions of this Agreement which relate to B/As.

 

(h)           The Canadian Borrowers waive presentment for payment and any other defense to payment of any amounts due to a Canadian Lender in respect of a B/A accepted and purchased by it pursuant to this Agreement which might exist solely by reason of such B/A being held, at the maturity thereof, by such Canadian Lender in its own right and the Canadian Borrowers agree not to claim any days of grace if such Canadian Lender as holder sues the Canadian Borrowers on the B/A for payment of the amount payable by the Canadian Borrowers

 

81

 

thereunder. On the specified maturity date of a B/A, or such earlier date as may be required or permitted pursuant to the provisions of this Agreement, the Canadian Borrowers shall jointly and severally pay, through the Canadian Administrative Agent, the Canadian Lender that has accepted and purchased such B/A the full face amount of such B/A and after such payment, the Canadian Borrowers shall have no further liability in respect of such B/A and such Canadian Lender shall be entitled to all benefits of, and be responsible for all payments due to third parties under, such B/A.

 

(i)            If a Canadian Lender grants a participation in a portion of its rights under this Agreement to a participant under Section 9.4, then in respect of any B/A Borrowing, a portion thereof may, at the option of such Canadian Lender, be by way of B/A accepted by such participant. In such event, the Canadian Borrowers shall upon request of the Canadian Administrative Agent or the Canadian Lender granting the participation execute and deliver a form of B/A indemnity in favor of such participant for delivery to such participant.

 

(j)            Notwithstanding anything herein to the contrary, no B/A may be prepaid prior to the maturity date thereof, except as provided in Article VII(s)(iii).

 

Section 2.15         Alternate Rate of Interest.  If prior to the commencement of any Interest Period for a Eurodollar Borrowing:

 

(a)           the Administrative Agent determines (which determination shall be conclusive absent manifest error) that adequate and reasonable means do not exist for ascertaining the Adjusted LIBO Rate or the LIBO Rate, as applicable, for such Interest Period; or

 

(b)           the Administrative Agent is advised by the Required Lenders that the Adjusted LIBO Rate or the LIBO Rate, as applicable, for such Interest Period will not adequately and fairly reflect the cost to such Lenders (or Lender) of making or maintaining their Loans (or its Loan) included in such Borrowing for such Interest Period;

 

then the Administrative Agent shall give notice thereof to a Borrower Representative and the Lenders by telephone or facsimile as promptly as practicable thereafter and, until the Administrative Agent notifies a Borrower Representative and the Lenders that the circumstances giving rise to such notice no longer exist, (i) any Interest Election Request that requests the conversion of any Borrowing to, or continuation of any Borrowing as, a Eurodollar Borrowing shall be ineffective, and (ii) if any Borrowing Request requests a Eurodollar Borrowing, such Borrowing shall be made as an ABR Borrowing.

 

Section 2.16         Increased Costs.

 

(a)           If any Change in Law shall:

 

(i)            impose, modify or deem applicable any reserve, special deposit or similar requirement against assets of, deposits with or for the account of, or credit extended by, any Lender (except any such reserve requirement reflected in the Adjusted LIBO Rate) or the Issuing Bank; or

 

82

 

(ii)           impose on any Lender or the Issuing Bank or the London interbank market any other condition affecting this Agreement or Loans made by such Lender or any Letter of Credit or participation therein;

 

(iii)          subject any Recipient to any Taxes (other than (A) Indemnified Taxes, (B) Excluded Taxes and (C) Other Connection Taxes that are imposed on or measured by net income or that are franchise taxes or branch profit taxes) on its loans, loan principal, letters of credit, commitments, or other obligations, or its deposits, reserves, other liabilities or capital attributable thereto;

 

and the result of any of the foregoing shall be to increase the cost to such Lender or such other Recipient of making or maintaining any Loan (or of maintaining its obligation to make any such Loan) or to increase the cost to such Lender, the Issuing Bank or other Recipient hereunder of participating in, issuing or maintaining any Letter of Credit or to reduce the amount of any sum received or receivable by such Lender, the Issuing Bank or other Recipient hereunder (whether of principal, interest or otherwise), then the Borrowers will pay to such Lender, the Issuing Bank or such other Recipient, as the case may be, such additional amount or amounts as will compensate such Lender, the Issuing Bank or such other Recipient, as the case may be, for such additional costs incurred or reduction suffered.

 

(b)           If any Lender or the Issuing Bank determines that any Change in Law regarding capital requirements has or would have the effect of reducing the rate of return on such Lender’s or the Issuing Bank’s capital or on the capital of such Lender’s or the Issuing Bank’s holding company, if any, as a consequence of this Agreement or the Loans made by, or participations in Letters of Credit held by, such Lender, or the Letters of Credit issued by the Issuing Bank, to a level below that which such Lender or the Issuing Bank or such Lender’s or the Issuing Bank’s holding company could have achieved but for such Change in Law (taking into consideration such Lender’s or the Issuing Bank’s policies and the policies of such Lender’s or the Issuing Bank’s holding company with respect to capital adequacy), then from time to time the Borrowers will pay to such Lender or the Issuing Bank, as the case may be, such additional amount or amounts as will compensate such Lender or the Issuing Bank or such Lender’s or the Issuing Bank’s holding company for any such reduction suffered.

 

(c)           A certificate of a Lender or the Issuing Bank setting forth the amount or amounts necessary to compensate such Lender or the Issuing Bank or its holding company, as the case may be, as specified in Section 2.16(a) or Section 2.16(b) shall be delivered to the applicable Borrower Representative and shall be conclusive absent manifest error.  The Borrowers shall pay such Lender or the Issuing Bank, as the case may be, the amount shown as due on any such certificate within ten (10) days after receipt thereof.

 

(d)           Failure or delay on the part of any Lender or the Issuing Bank to demand compensation pursuant to this Section shall not constitute a waiver of such Lender’s or the Issuing Bank’s right to demand such compensation; provided  that the Borrowers shall not be required to compensate a Lender or the Issuing Bank pursuant to this Section for any increased costs or reductions incurred more than 270 days prior to the date that such Lender or the Issuing Bank, as the case may be, notifies such Borrower Representative 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

 

83

 

claim compensation therefor; provided  further  that, if the Change in Law giving rise to such increased costs or reductions is retroactive, then the 270-day period referred to above shall be extended to include the period of retroactive effect thereof.

 

Section 2.17         Break Funding Payments.  In the event of (a) the payment of any principal of any Eurodollar Loan or B/A Loan other than on the last day of an Interest Period or Contract Period applicable thereto (including as a result of an Event of Default), (b) the conversion of any Eurodollar Loan or B/A Loan other than on the last day of the Interest Period or Contract Period applicable thereto, (c) the failure to borrow, convert, continue or prepay any Eurodollar Loan or B/A Loan on the date specified in any notice delivered pursuant hereto (regardless of whether such notice may be revoked under Section 2.9(d) and is revoked in accordance therewith), or (d) the assignment of any Eurodollar Loan or B/A Loan other than on the last day of the Interest Period or Contract Period applicable thereto as a result of a request by a Borrower Representative pursuant to Section 2.20, then, in any such event, the Borrowers shall compensate each Lender for the loss, cost and expense attributable to such event.  In the case of a Eurodollar Loan, such loss, cost or expense to any Lender shall be deemed to include an amount determined by such Lender to be the excess, if any, of (i) the amount of interest which would have accrued on the principal amount of such Loan had such event not occurred, at the Adjusted LIBO Rate that would have been applicable to such Loan, for the period from the date of such event to the last day of the then current Interest Period therefor (or, in the case of a failure to borrow, convert or continue, for the period that would have been the Interest Period for such Loan), over (ii) the amount of interest which would accrue on such principal amount for such period at the interest rate which such Lender would bid were it to bid, at the commencement of such period, for dollar deposits of a comparable amount and period from other banks in the eurodollar market.  A certificate of any Lender setting forth any amount or amounts that such Lender is entitled to receive pursuant to this Section shall be delivered to the applicable Borrower Representative and shall be conclusive absent manifest error.  The Borrowers shall pay such Lender the amount shown as due on any such certificate within ten (10) days after receipt thereof.  Notwithstanding the foregoing, the Canadian Borrowers shall not be required to compensate any US Lender in respect of losses arising with respect to US Loans.

 

Section 2.18         Taxes.

 

(a)           Withholding of Taxes; Gross-Up.  Each payment by any Loan Party under any Loan Document shall be made without withholding for any Taxes, unless such withholding is required by any law.  If any Withholding Agent determines, in its reasonable discretion, that it or any Loan Party is so required to withhold Taxes, then such Withholding Agent or any Loan Party may so withhold and shall timely pay the full amount of withheld Taxes to the relevant Governmental Authority in accordance with applicable law.  If such Taxes are Indemnified Taxes, then the amount payable by such Loan Party shall be increased as necessary so that, net of such withholding (including such withholding applicable to additional amounts payable under this Section 2.18), the applicable Recipient receives the amount it would have received had no such withholding been made.

 

(b)           Payment of Other Taxes by the Borrowers.  The Borrowers shall timely pay any Other Taxes to the relevant Governmental Authority in accordance with applicable law.

 

84

 

(c)           Evidence of Payments.  As soon as practicable after any payment of Indemnified Taxes by any Loan Party to a Governmental Authority, a Borrower Representative shall deliver to the Administrative Agent the original or a certified copy of a receipt, if any, issued by such Governmental Authority evidencing such payment, a copy of the return reporting such payment or other evidence of such payment reasonably satisfactory to the Administrative Agent.

 

(d)           Indemnification by the Borrowers.  The Loan Parties shall jointly and severally indemnify each Recipient for any Indemnified Taxes that are paid or payable by such Recipient in connection with any Loan Document (including Indemnified Taxes imposed or asserted on or attributable to amounts paid or payable under this Section 2.18(d)) and any reasonable expenses arising therefrom or with respect thereto, whether or not such Indemnified Taxes were correctly or legally imposed or asserted by the relevant Governmental Authority.  The indemnity under this Section 2.18(d) shall be paid within ten (10) days after the Recipient delivers to a Borrower Representative a certificate stating the amount of any Indemnified Taxes so paid or payable by such Recipient and describing the basis for the indemnification claim.  Such certificate shall be conclusive of the amount so paid or payable absent manifest error.  Such Recipient shall deliver a copy of such certificate to the Administrative Agent.

 

(e)           Indemnification by the Lenders.  Each Lender shall severally indemnify the Administrative Agent for any Taxes (but, in the case of any Indemnified Taxes, only to the extent that any Loan Party has not already indemnified the Administrative Agent for such Indemnified Taxes and without limiting the obligation of the Loan Parties to do so) attributable to such Lender that are paid or payable by the Administrative Agent in connection with any Loan Document and any reasonable expenses arising therefrom or with respect thereto, whether or not such Taxes were correctly or legally imposed or asserted by the relevant Governmental Authority.  The indemnity under this Section 2.18(e) shall be paid within ten (10) days after the Administrative Agent delivers to the applicable Lender a certificate stating the amount of Taxes so paid or payable by the Administrative Agent.  Such certificate shall be conclusive of the amount so paid or payable absent manifest error.

 

(f)            Status of Lenders.  (i) Any Lender that is entitled to an exemption from, or reduction of, any applicable withholding tax with respect to any payments under any Loan Document shall deliver to the Borrower Representative US and the Administrative Agent, at the time or times reasonably requested by the Borrower Representative US or the Administrative Agent, such properly completed and executed documentation reasonably requested by the Borrower Representative US or the Administrative Agent as will permit such payments to be made without, or at a reduced rate of, withholding.  In addition, any Lender, if requested by the Borrower Representative US or the Administrative Agent, shall deliver such other documentation prescribed by law or reasonably requested by the Borrower Representative US or the Administrative Agent as will enable the Borrower Representative US or the Administrative Agent to determine whether or not such Lender is subject to any withholding (including backup withholding) or information reporting requirements.  Notwithstanding anything to the contrary in the preceding two sentences, the completion, execution and submission of such documentation (other than such documentation set forth in Section 2.18(f)(ii) through (iii) below) shall not be required if in the Lender’s reasonable judgment such completion, execution or submission would subject such Lender to any material unreimbursed cost or expense or would materially prejudice

 

85

 

the legal or commercial position of such Lender.  Upon the reasonable request of the Borrower Representative US or the Administrative Agent, any Lender shall update any form or certification previously delivered pursuant to this Section 2.18(f).  If any form or certification previously delivered pursuant to this Section expires or becomes obsolete or inaccurate in any respect with respect to a Lender, such Lender shall promptly (and in any event within ten (10) days after such expiration, obsolescence or inaccuracy) notify the Borrower Representative US and the Administrative Agent in writing of such expiration, obsolescence or inaccuracy and update the form or certification if it is legally eligible to do so.

 

(ii)           Without limiting the generality of the foregoing, if any Borrower is a U.S. Person, any Lender with respect to such Borrower shall, if it is legally eligible to do so, deliver to the Borrower Representative US and the Administrative Agent (in such number of copies reasonably requested by the Borrower Representative US and the Administrative Agent) on or prior to the date on which such Lender becomes a party hereto, duly completed and executed copies of whichever of the following is applicable:

 

(A)          in the case of a Lender that is a U.S. Person, IRS Form W-9 certifying that such Lender is exempt from U.S. federal backup withholding tax;

 

(B)           in the case of a Non-U.S. Lender that is the beneficial owner of the payments under this Agreement and is claiming the benefits of an income tax treaty to which the United States is a party (1) with respect to payments of interest under any Loan Document, IRS Form W-8BEN establishing an exemption from, or reduction of, U.S. federal withholding Tax pursuant to the “interest” article of such tax treaty and (2) with respect to any other applicable payments under this Agreement, IRS Form W-8BEN establishing an exemption from, or reduction of, U.S. federal withholding tax pursuant to the “business profits” or “other income” article of such tax treaty;

 

(C)           in the case of a Non-U.S. Lender that is the beneficial owner of the payments under this Agreement and is for whom payments under this Agreement constitute income that is effectively connected with such Lender’s conduct of a trade or business in the United States, IRS Form W-8ECI;

 

(D)          in the case of a Non-U.S. Lender that is the beneficial owner of the payments under this Agreement and is claiming the benefits of the exemption for portfolio interest under Section 881(c) of the Code both (1) IRS Form W-8BEN and (2) a tax certificate substantially in the form of Exhibit M to the effect that such Lender is not a) a “bank” within the meaning of Section 881(c)(3)(A) of the Code, b) a “10 percent shareholder” of such Borrower within the meaning of Section 881(c)(3)(B) of the Code c) a “controlled foreign corporation” described in Section 881(c)(3)(C) of the Code and d) conducting a trade or business in the United States with which the relevant interest payments are effectively connected;

 

(E)           in the case of a Non-U.S. Lender that is not the beneficial owner of payments made under this Agreement (including a partnership or a

 

86

 

participating Lender) (1) an IRS Form W-8IMY on behalf of itself and (2) the relevant forms prescribed in clauses (A), (B), (C), (D) and (F) of this paragraph (f)(ii) that would be required of each such beneficial owner or partner of such partnership if such beneficial owner or partner were a Lender; provided, however, that if the Lender is a partnership and one or more of its partners are claiming the exemption for portfolio interest under Section 881(c) of the Code, such Lender may provide a tax certificate substantially in the form of Exhibit N on behalf of such partners; or

 

(F)           any other form prescribed by law as a basis for claiming exemption from, or a reduction of, U.S. federal withholding tax together with such supplementary documentation necessary to enable the Borrower Representative or the Administrative Agent to determine the amount of Tax (if any) required by law to be withheld.

 

(iii)          If a payment made to a Lender under any Loan Document would be subject to U.S. federal withholding tax imposed by FATCA if such Lender were to fail to comply with the applicable reporting requirements of FATCA (including those contained in Section 1471(b) or 1472(b) of the Code, as applicable), such Lender shall deliver to the Withholding Agent, at the time or times prescribed by law and at such time or times reasonably requested by the Withholding Agent, such documentation prescribed by applicable law (including as prescribed by Section 1471(b)(3)(C)(i) of the Code) and such additional documentation reasonably requested by the Withholding Agent as may be necessary for the Withholding Agent to comply with its obligations under FATCA, to determine that such Lender has or has not complied with such Lender’s obligations under FATCA and, as necessary, to determine the amount to deduct and withhold from such payment.  Solely for purposes of this Section 2.18(f)(iii), “FATCA” shall include any amendments made to FATCA after the date of this Agreement.

 

Each Lender agrees that if any form or certification it previously delivered expires or becomes obsolete or inaccurate in any respect, it shall update such form or certificate or promptly notify the Borrower Representative US and the Administrative Agent in writing of its legal inability to do so.

 

(g)           Treatment of Certain Refunds.  If any party determines, in its sole discretion exercised in good faith, that it has received a refund of any Taxes as to which it has been indemnified pursuant to this Section 2.18 (including additional amounts paid pursuant to this Section 2.18), it shall pay to the indemnifying party an amount equal to such refund (but only to the extent of indemnity payments made under this Section with respect to the Taxes giving rise to such refund), net of all out-of-pocket expenses (including any Taxes) of such indemnified party and without interest (other than any interest paid by the relevant Governmental Authority with respect to such refund).  Such indemnifying party, upon the request of such indemnified party, shall repay to such indemnified party the amount paid to such indemnified party pursuant to the previous sentence (plus any penalties, interest or other charges imposed by the relevant Governmental Authority) in the event such indemnified party is required to repay such refund to such Governmental Authority.  Notwithstanding anything to the contrary in this Section 2.18(g), in no event will any indemnified party be required to pay any amount to any

 

87

 

indemnifying party pursuant to this Section 2.18(g) if such payment would place such indemnified party in a less favorable position (on a net after-Tax basis) than such indemnified party would have been in if the indemnification payments or additional amounts giving rise to such refund had never been paid.  This Section 2.18(g) shall not be construed to require any indemnified party to make available its Tax returns (or any other information relating to its Taxes which it deems confidential) to the indemnifying party or any other Person.

 

(h)           Issuing Bank.  For purposes of Section 2.18(e) and (f), the term “Lender” includes the Issuing Bank.

 

Section 2.19         Payments Generally; Allocation of Proceeds; Sharing of Set-offs.

 

(a)           Each Borrower shall make each payment required to be made by it hereunder (whether of principal, interest, fees or reimbursement of LC Disbursements, or of amounts payable under Section 2.16, Section 2.17 or Section 2.18, or otherwise) to the Administrative Agent (if such payment is made in respect of US Loans or Letters of Credit) or to the Canadian Administrative Agent (if such payment is made in respect of Canadian Revolving Loans) prior to 11:00 a.m., Chicago time, on the date when due, in immediately available funds, without set off or counterclaim.  Any amounts received after such time on any date may, in the discretion of the Administrative Agent or the Canadian Administrative Agent (as applicable), be deemed to have been received on the next succeeding Business Day for purposes of calculating interest thereon.  All payments to the Administrative Agent shall be made at its offices at 10 South Dearborn, 22nd Floor, Mail Code IL1-1190, Chicago, Illinois 60603-2300, except payments to be made directly to the Issuing Bank or Swingline Lender as expressly provided herein and except that payments pursuant to Section 2.16, Section 2.17, Section 2.18 and Section 9.3 shall be made directly to the Persons entitled thereto.  All payments to the Canadian Administrative Agent shall be made at its offices at Royal Bank Plaza, South Tower, 200 Bay Street, Suite 1800, Toronto, Ontario MJ5 2J2.  The Administrative Agent or the Canadian Administrative Agent (as applicable) shall distribute any such payments received by it for the account of any other Person to the appropriate recipient promptly following receipt thereof.  If any payment hereunder shall be due on a day that is not a Business Day, the date for payment shall be extended to the next succeeding Business Day, and, in the case of any payment accruing interest, interest thereon shall be payable for the period of such extension.  All payments hereunder shall be made in Dollars (unless such payment is a payment of principal or interest on C$ Denominated Loans, in which case such payments shall be made in C$).  At all times that full cash dominion is in effect pursuant to Section 7.3 of the US Security Agreement, solely for purposes of determining the amount of US Revolving Loans available for borrowing purposes, checks and cash or other immediately available funds from collections of items of payment and proceeds of any Collateral owned by the US Borrowers shall be applied in whole or in part against the Obligations, on the day of receipt, subject to actual collection.  At all times that full cash dominion is in effect pursuant the terms and conditions of the Canadian Security Agreement, solely for purposes of determining the amount of Canadian Revolving Loans available for borrowing purposes, checks and cash or other immediately available funds from collections of items of payment and proceeds of any Collateral owned by the Canadian Borrowers shall be applied in whole or in part against the Obligations, on the day of receipt, subject to actual collection.

 

88

 

(b)           Any proceeds of the US Borrowers’ Collateral, other than Export-Related Priority Collateral (unless such Proceeds of Export-Related Priority Collateral are received at any time that the Export-Related Obligations are paid in full), received by the US Collateral Agent or the Administrative Agent (i) not constituting either (A) a specific payment of principal, interest, fees or other sum payable under the Loan Documents (which shall be applied as specified by the US Borrowers), (B) a mandatory prepayment (which shall be applied in accordance with Section 2.11) or (C) amounts to be applied from the Collection Account when full cash dominion is in effect pursuant to Section 7.3 of the US Security Agreement (which shall be applied in accordance with Section 2.10(c)) or (ii) after an Event of Default has occurred and is continuing and the Administrative Agent so elects or the Required Lenders so direct, such funds shall be applied ratably first, to pay any fees, indemnities, or expense reimbursements including amounts then due to the Agents and the Issuing Bank from the US Borrowers (other than in connection with Banking Services or Swap Obligations), second, to pay any fees or expense reimbursements then due to the US Lenders from the US Borrowers (other than in connection with Banking Services or Swap Obligations), third, to pay interest due in respect of the US Overadvances and US Protective Advances, fourth, to pay the principal of the US Overadvances and US Protective Advances, fifth, to pay interest then due and payable on the US Loans (other than the US Overadvances and US Protective Advances) ratably, sixth, to prepay principal on the US Loans (other than the US Overadvances and US Protective Advances) and unreimbursed LC Disbursements ratably, seventh, to pay an amount to the Administrative Agent equal to one hundred five percent (105%) of the LC Shortfall Amount, to be held as cash collateral for such Obligations, eighth, to pay any fees, indemnities, or expense reimbursements including amounts then due to the Agents from the Canadian Borrowers (other than in connection with Banking Services or Swap Obligations), ninth, to pay any fees or expense reimbursements then due to the US Lenders from the Canadian Borrowers (other than in connection with Banking Services or Swap Obligations), tenth, to pay interest due in respect of the Canadian Overadvances and Canadian Protective Advances, eleventh, to pay the principal of the Canadian Overadvances and Canadian Protective Advances, twelfth, to pay interest then due and payable on the Canadian Revolving Loans (other than the Canadian Overadvances and Canadian Protective Advances) ratably, thirteenth, to prepay principal on the Canadian Revolving Loans (other than the Canadian Overadvances and Canadian Protective Advances), fourteenth, to payment of any amounts owing with respect to Banking Services and Swap Obligations, and fifteenth, to the payment of any other Secured Obligation due to the Administrative Agent or any Lender by the Borrowers, and, sixteenth, to the Export-Related Lender for application to the Export-Related Obligations in accordance with the Export-Related Loan Agreement.  Notwithstanding anything to the contrary contained in this Agreement, unless so directed by the Borrower Representative US, or unless a Default is in existence, neither the Administrative Agent nor any Lender shall apply any payment which it receives to any Eurodollar Loan of a Class, except (A) on the expiration date of the Interest Period applicable to any such Eurodollar Loan or (B) in the event, and only to the extent, that there are no outstanding ABR Loans of the same Class and, in any event, the US Borrowers shall pay the break funding payment required in accordance with Section 2.17.  The Administrative Agent and the Lenders shall have the continuing and exclusive right to apply and reverse and reapply any and all such proceeds and payments to any portion of the Secured Obligations.

 

(c)           Any proceeds of the Canadian Borrowers’ Collateral received by the Canadian Collateral Agent or the Canadian Administrative Agent (i) not constituting either (A) a

 

89

 

specific payment of principal, interest, fees or other sum payable under the Loan Documents (which shall be applied as specified by the Canadian Borrowers), (B) a mandatory prepayment (which shall be applied in accordance with Section 2.11) or (C) amounts to be applied from the Collection Account when full cash dominion is in effect pursuant to Section 7.3 of the Canadian Security Agreement (which shall be applied in accordance with Section 2.10(b)) or (ii) after an Event of Default has occurred and is continuing and the Canadian Administrative Agent so elects or the Required Lenders so direct, such funds shall be applied ratably first, to pay any fees, indemnities, or expense reimbursements including amounts then due to the Agents and the Issuing Bank from the Canadian Borrowers (other than in connection with Banking Services or Swap Obligations), second, to pay any fees or expense reimbursements then due to the Canadian Lenders from the Canadian Borrowers (other than in connection with Banking Services or Swap Obligations), third, to pay interest due in respect of the Canadian Overadvances and Canadian Protective Advances, fourth, to pay the principal of the Canadian Overadvances and Canadian Protective Advances, fifth, to pay interest then due and payable on the Canadian Revolving Loans (other than the Canadian Overadvances and Canadian Protective Advances) ratably, sixth, to prepay principal on the Canadian Revolving Loans (other than the Canadian Overadvances and Canadian Protective Advances) ratably, seventh, to payment of any amounts owing by the Canadian Borrowers with respect to Banking Services and Swap Obligations, and eighth, to the payment of any other Secured Obligation due to the Canadian Administrative Agent or any Canadian Lender by the Canadian Borrowers.  Notwithstanding anything to the contrary contained in this Agreement, unless so directed by the Borrower Representative Canada, or unless a Default is in existence, neither the Canadian Administrative Agent nor any Canadian Lender shall apply any payment which it receives to any Eurodollar Loan of a Class, except (A) on the expiration date of the Interest Period applicable to any such Eurodollar Loan or (B) in the event, and only to the extent, that there are no outstanding ABR Loans of the same Class and, in any event, the Canadian Borrowers shall pay the break funding payment required in accordance with Section 2.17.  The Canadian Administrative Agent and the Canadian Lenders shall have the continuing and exclusive right to apply and reverse and reapply any and all such proceeds and payments to any portion of the Canadian Secured Obligations.

 

(d)           At the election of the Administrative Agent, all payments of principal, interest, LC Disbursements, fees, premiums, reimbursable expenses (including, without limitation, all reimbursement for fees and expenses pursuant to Section 9.3), and other sums payable under the Loan Documents, may be paid from the proceeds of Borrowings made hereunder whether made following a request by the Borrower Representative US pursuant to Section 2.3 or a deemed request as provided in this Section or may be deducted from any deposit account of a US Borrower maintained with the Administrative Agent.  The US Borrowers hereby irrevocably authorize (i) the Administrative Agent to make a Borrowing for the purpose of paying each payment of principal, interest and fees owing by the US Borrowers as it becomes due hereunder or any other amount due under the Loan Documents and agrees that all such amounts charged shall constitute US Loans (including Swingline Loans and US Overadvances, but such a Borrowing may only constitute a US Protective Advance if it is to reimburse costs, fees and expenses as described in Section 9.3) and that all such Borrowings shall be deemed to have been requested pursuant to Section 2.3, Section 2.4 or Section 2.5, as applicable and (ii) the Administrative Agent to charge any deposit account of any US Borrower maintained with the Administrative Agent for each payment of principal, interest and fees owing by the US Borrowers as it becomes due hereunder or any other amount due under the Loan Documents.

 

90

 

(e)           At the election of the Canadian Administrative Agent, all payments of principal, interest, fees, premiums, reimbursable expenses (including, without limitation, all reimbursement for fees and expenses pursuant to Section 9.3), and other sums payable under the Loan Documents, may be paid from the proceeds of Borrowings made hereunder whether made following a request by the Borrower Representative Canada pursuant to Section 2.3 or a deemed request as provided in this Section or may be deducted from any deposit account of a Canadian Borrower maintained with the Canadian Administrative Agent.  The Canadian Borrowers hereby irrevocably authorize (i) the Canadian Administrative Agent to make a Borrowing for the purpose of paying each payment of principal, interest and fees owing by the Canadian Borrowers as it becomes due hereunder or any other amount due under the Loan Documents and agrees that all such amounts charged shall constitute Canadian Loans (including Canadian Overadvances, but such a Borrowing may only constitute a Canadian Protective Advance if it is to reimburse costs, fees and expenses as described in Section 9.3) and that all such Borrowings shall be deemed to have been requested pursuant to Section 2.3, Section 2.4 or Section 2.5, as applicable and (ii) the Canadian Administrative Agent to charge any deposit account of any Canadian Borrower maintained with the Canadian Administrative Agent for each payment of principal, interest and fees owing by the Canadian Borrowers as it becomes due hereunder or any other amount due under the Loan Documents.

 

(f)            If any US Lender shall, by exercising any right of set off or counterclaim or otherwise, obtain payment in respect of any principal of or interest on any of its Loans or participations in LC Disbursements resulting in such Lender receiving payment of a greater proportion of the aggregate amount of its Loans and participations in LC Disbursements and accrued interest thereon than the proportion received by any other US Lender, then the US Lender receiving such greater proportion shall purchase (for cash at face value) participations in the Loans and participations in LC Disbursements of other US Lenders to the extent necessary so that the benefit of all such payments shall be shared by the US Lenders ratably in accordance with the aggregate amount of principal of and accrued interest on their respective US Loans and participations in LC Disbursements; provided  that (i) if any such participations are purchased and all or any portion of the payment giving rise thereto is recovered,  such participations shall be rescinded and the purchase price restored to the extent of such recovery, without interest, and (ii) the provisions of this paragraph shall not be construed to apply to any payment made by the US Borrowers pursuant to and in accordance with the express terms of this Agreement or any payment obtained by a US Lender as consideration for the assignment of or sale of a participation in any of its Loans or participations in LC Disbursements to any assignee or participant, other than to the Borrowers or any Subsidiary or Affiliate of the Borrowers (as to which the provisions of this paragraph shall apply).  The Borrowers consent to the foregoing and agree, to the extent they may effectively do so under applicable law, that any US Lender acquiring a participation pursuant to the foregoing arrangements may exercise against the Borrowers rights of set-off and counterclaim with respect to such participation as fully as if such US Lender were a direct creditor of the Borrowers in the amount of such participation.

 

(g)           If any Canadian Lender shall, by exercising any right of set off or counterclaim or otherwise, obtain payment in respect of any principal of or interest on any of its Canadian Revolving Loans resulting in such Canadian Lender receiving payment of a greater proportion of the aggregate amount of its Canadian Loans and accrued interest thereon than the proportion received by any other Canadian Lender, then the Canadian Lender receiving such

 

91

 

greater proportion shall purchase (for cash at face value) participations in the Canadian Revolving Loans of other Canadian Lenders to the extent necessary so that the benefit of all such payments shall be shared by the Canadian Lenders ratably in accordance with the aggregate amount of principal of and accrued interest on their respective Canadian Revolving Loans; provided  that (i) if any such participations are purchased and all or any portion of the payment giving rise thereto is recovered, such participations shall be rescinded and the purchase price restored to the extent of such recovery, without interest, and (ii) the provisions of this paragraph shall not be construed to apply to any payment made by the Canadian Borrowers pursuant to and in accordance with the express terms of this Agreement or any payment obtained by a Canadian Lender as consideration for the assignment of or sale of a participation in any of its Canadian Revolving Loans to any assignee or participant, other than to the Borrowers or any Subsidiary or Affiliate of the Borrowers (as to which the provisions of this paragraph shall apply).  The Borrowers consent to the foregoing and agree, to the extent they may effectively do so under applicable law, that any Canadian Lender acquiring a participation pursuant to the foregoing arrangements may exercise against the Borrowers rights of set-off and counterclaim with respect to such participation as fully as if such Canadian Lender were a direct creditor of the Borrowers in the amount of such participation.

 

(h)           Unless the Administrative Agent or the Canadian Administrative Agent (as applicable) shall have received notice from the applicable Borrower Representative prior to the date on which any payment is due to the Administrative Agent or the Canadian Administrative Agent (as applicable) for the account of the Lenders or the Issuing Bank hereunder that the Borrowers will not make such payment, the Administrative Agent or the Canadian Administrative Agent (as applicable) may assume that the Borrowers have made such payment on such date in accordance herewith and may, in reliance upon such assumption, distribute to the Lenders or the Issuing Bank, as the case may be, the amount due.  In such event, if the Borrowers have not in fact made such payment, then each of the Lenders or the Issuing Bank, as the case may be, severally agrees to repay to the Administrative Agent or the Canadian Administrative Agent (as applicable) forthwith on demand the amount so distributed to such Lender or Issuing Bank with interest thereon, for each day from and including the date such amount is distributed to it to but excluding the date of payment to the Administrative Agent or the Canadian Administrative Agent (as applicable), at the greater of the Federal Funds Effective Rate and a rate determined by the Administrative Agent in accordance with banking industry rules on interbank compensation.

 

(i)            If any Lender shall fail to make any payment required to be made by it hereunder, then the Administrative Agent or the Canadian Administrative Agent (as applicable) may, in its discretion (notwithstanding any contrary provision hereof), apply any amounts thereafter received by the Administrative Agent or the Canadian Administrative Agent (as applicable) for the account of such Lender to satisfy such Lender’s obligations hereunder until all such unsatisfied obligations are fully paid.

 

Section 2.20         Mitigation Obligations; Replacement of Lenders.  If any Lender requests compensation under Section 2.16, or if the Borrowers are required to pay any additional amount to any Lender or any Governmental Authority for the account of any Lender pursuant to Section 2.18 or any Change in Law, then:

 

92

 

(a)           such Lender shall use reasonable efforts to designate a different lending office for funding or booking its Loans hereunder or to assign its rights and obligations hereunder to another of its offices, branches or affiliates, if, in the judgment of such Lender, such designation or assignment (i) would eliminate or reduce amounts payable pursuant to Section 2.16, Section 2.18 or such Change in Law, as the case may be, in the future and (ii) would not subject such Lender to any unreimbursed cost or expense and would not otherwise be disadvantageous to such Lender (and the Borrowers hereby agree to pay all reasonable costs and expenses incurred by any Lender in connection with any such designation or assignment);

 

(b)           the Borrowers may, at their sole expense and effort, require such Lender or any Lender that becomes a Defaulting Lender (herein, a “Departing Lender”), upon notice to the Departing Lender and the Administrative Agent or the Canadian Administrative Agent (as applicable), to assign and delegate, without recourse (in accordance with and subject to the restrictions contained in Section 9.4), all its interests, rights and obligations under this Agreement to an assignee that shall assume such obligations (which assignee may be another Lender, if a Lender accepts such assignment); provided  that (i) the Borrowers shall have received the prior written consent of the Administrative Agent (and if a Revolving Commitment is being assigned, the Issuing Bank) or the Canadian Administrative Agent (as applicable), which consent shall not unreasonably be withheld, (ii) the Departing Lender shall have received payment of an amount equal to the outstanding principal of its Loans and participations in LC Disbursements and Swingline Loans, accrued interest thereon, accrued fees and all other amounts payable to it hereunder, from the assignee (to the extent of such outstanding principal and accrued interest and fees) or the Borrowers (in the case of all other amounts) and (iii) in the case of any such assignment resulting from a claim for compensation under Section 2.16 or payments required to be made pursuant to Section 2.18 or a Change in Law, such assignment will result in a reduction in such compensation or payments.  A Departing Lender shall not be required to make any such assignment and delegation if, prior thereto, as a result of a waiver by such Lender or otherwise, the circumstances entitling the Borrowers to require such assignment and delegation cease to apply.

 

Section 2.21         Returned Payments.  If after receipt of any payment which is applied to the payment of all or any part of the Obligations, any Agent or any Lender is for any reason compelled to surrender such payment or proceeds to any Person because such payment or application of proceeds is invalidated, declared fraudulent, set aside, determined to be void or voidable as a preference, impermissible setoff, or a diversion of trust funds, or for any other reason, then the Obligations or part thereof intended to be satisfied shall be revived and continued and this Agreement shall continue in full force as if such payment or proceeds had not been received by such Agent or such Lender.  The provisions of this Section 2.21 shall be and remain effective notwithstanding any contrary action which may have been taken by any Agent or any Lender in reliance upon such payment or application of proceeds.  The provisions of this Section 2.21 shall survive the termination of this Agreement.

 

Section 2.22         Borrowings of Revolving Loans to Satisfy Secured Obligations.  Each of the Borrowers and each Lender hereby agree with the Administrative Agent, the Canadian Administrative Agent and each other Lender that, on each date on which any payment of interest, fees, principal or other amounts are due and owing hereunder or under any of the other Loan Documents, the Administrative Agent or the Canadian Administrative Agent (as applicable)

 

93

 

may, in its sole discretion, but without any obligation to do so and subject to all other terms of this Agreement (other than any request for delivery of a Borrowing Request hereunder) cause (a) with respect to a payment in connection with any US Loan, a Borrowing of Swingline Loans to the extent available, and thereafter such Borrowings shall be US Revolving Loans which shall be ABR Loans, or (b) with respect to a payment in connection with a Canadian Revolving Loan, a Borrowing of Canadian Revolving Loans which shall be ABR Loans or Canadian Prime Rate Loans, each to be made on such date in an amount sufficient to satisfy in full all such payments of interest, fees or other amounts which are then due hereunder and, subject to Section 2.10(j) with respect to the Canadian Lenders, the Administrative Agent or the Canadian Administrative Agent (as applicable) shall disburse the proceeds of such Borrowing to itself and each applicable Lender, as applicable to satisfy all such obligations and liabilities which are then due and the Administrative Agent or the Canadian Administrative Agent (as applicable) shall give the Borrowers prompt notice of any such Borrowings.

 

Section 2.23         Joint and Several Liability; Rights of Contribution.

 

(a)           Each US Borrower states and acknowledges that:  (i) pursuant to this Agreement, the US Borrowers desire to utilize their borrowing potential on a consolidated basis to the same extent possible if they were merged into a single corporate entity; (ii) each US Borrower has determined that it will benefit specifically and materially from the advances of credit contemplated by this Agreement; (iii) it is both a condition precedent to the obligations of the Administrative Agent and Lenders hereunder and a desire of each US Borrower that each US Borrower execute and deliver to Administrative Agent and Lenders this Agreement; and (iv) each US Borrower has requested and bargained for the structure and terms of and security for the advances contemplated by this Agreement.

 

(b)           Each US Borrower hereby irrevocably and unconditionally:  (i) agrees that it is jointly and severally liable to the Administrative Agent, the Canadian Administrative Agent and the Lenders for the full and prompt payment and performance of the obligations of each Borrower under this Agreement and each other Loan Document that may specify that a particular Borrower is responsible for a given payment or performance; (ii) agrees to fully and promptly perform all of its obligations hereunder with respect to each advance of credit hereunder as if such advance had been made directly to it; and (iii) agrees as a primary obligation to indemnify the Administrative Agent, the Canadian Administrative Agent and each Lender, on demand for and against any loss incurred by any such Agent or any Lender as a result of any of the obligations of any Borrower (the “Subject Borrower”) being or becoming void, voidable, unenforceable or ineffective for any reason whatsoever, whether or not known to the Subject Borrower or any Person, the amount of such loss being the amount which the Administrative Agent, the Canadian Administrative Agent or the Lenders (or any of them) would otherwise have been entitled to recover from the Borrower.

 

(c)           Each Canadian Borrower states and acknowledges that:  (i) pursuant to this Agreement, the Canadian Borrowers desire to utilize their borrowing potential on a consolidated basis to the same extent possible if they were merged into a single corporate entity; (ii) each Canadian Borrower has determined that it will benefit specifically and materially from the advances of credit contemplated by this Agreement; (iii) it is both a condition precedent to the obligations of the Administrative Agent and Lenders hereunder and a desire of each

 

94

 

Canadian Borrower that each Canadian Borrower execute and deliver to Administrative Agent and Lenders this Agreement; and (iv) each Canadian Borrower has requested and bargained for the structure and terms of and security for the advances contemplated by this Agreement.

 

(d)           Each Canadian Borrower hereby irrevocably and unconditionally:  (i) agrees that it is jointly and severally liable to the Administrative Agent, the Canadian Administrative Agent and the Lenders for the full and prompt payment and performance of the obligations of each Canadian Borrower under this Agreement and each other Loan Document that may specify that a particular Canadian Borrower is responsible for a given payment or performance; (ii) agrees to fully and promptly perform all of its obligations hereunder with respect to each advance of credit hereunder to a Canadian Borrower as if such advance had been made directly to it; and (iii) agrees as a primary obligation to indemnify the Administrative Agent, the Canadian Administrative Agent and each Canadian Lender, on demand for and against any loss incurred by any such Agent or any Canadian Lender as a result of any of the obligations of any Canadian Borrower (the “Subject Canadian Borrower”) being or becoming void, voidable, unenforceable or ineffective for any reason whatsoever, whether or not known to the Subject Canadian Borrower or any Person, the amount of such loss being the amount which the Administrative Agent, the Canadian Administrative Agent or the Canadian Lenders (or any of them) would otherwise have been entitled to recover from the Subject Canadian Borrower.

 

(e)           It is the intent of each US Borrower that the indebtedness, obligations and liabilities hereunder and under the other Loan Documents of each of them not be subject to challenge on any basis related to any federal or state law dealing with fraudulent conveyances or any other law related to transfers for less than fair or reasonably equivalent value.  Accordingly, as of the date hereof, the liability of each US Borrower under this Section 2.23 together with all of its other liabilities to all persons as of the date hereof and as of any other date on which a transfer is deemed to occur by virtue of this Agreement, calculated in amount sufficient to pay its probable net liabilities on its existing indebtedness as the same become absolute and matured (“Dated Liabilities”) is and is to be, less than the amount of the aggregate of a fair valuation of its property as of such corresponding date (“Dated Assets”).  To this end, each US Borrower under this Section 2.23 (i) grants to and recognizes in each other US Borrower ratably, rights of subrogation and contribution in the amount, if any, by which the Dated Assets of such US Borrower, but for the aggregate rights of subrogation and contribution in its favor recognized herein, would exceed the Dated Liabilities of such US Borrower and (ii) acknowledges receipt of and recognizes its right to subrogation and contribution ratably from the other US Borrowers in the amount, if any, by which the Dated Liabilities of such US Borrower, but for the aggregate of subrogation and contribution in its favor recognized herein, would exceed the Dated Assets of such US Borrower under this Section 2.23.  In recognizing the value of the Dated Assets and the Dated Liabilities, it is understood that each US Borrower will recognize, to at least the same extent of their aggregate recognition of liabilities hereunder, their rights to subrogation and contribution hereunder.  It is a material objective of this Section 2.23 that each US Borrower recognizes rights to subrogation and contribution rather than be deemed to be insolvent (or in contemplation thereof) by reason of an arbitrary interpretation of its joint and several obligations hereunder.

 

(f)            Each Borrower agrees and acknowledges that the present structure of the credit facilities detailed in this Agreement is based in part upon the financial and other

 

95

 

information presently known to the Administrative Agent, the Canadian Administrative Agent and the Lenders regarding each Borrower, the corporate structure of the Borrowers, and the present financial condition of each Borrower.  Each Borrower hereby agrees that the Required Lenders shall have the right, in their sole credit judgment, to require that any or all of the following changes be made to these credit facilities:  (i) further restrict loans and advances between the Borrowers, (ii) establish separate lockbox and Controlled Disbursement Accounts for each Borrower, (iii) separate the Swingline Loans and Revolving Loans into separate revolving credit loans to each of the Borrowers as shall be determined by the Required Lenders, and (iv) establish such other procedures as shall be reasonably deemed by the Required Lenders to be useful in tracking where Loans are made under this Agreement and the source of payments received by the Lenders on such Loans.

 

Section 2.24         Increase of Commitments.

 

(a)           If no Default or Event of Default shall have occurred and be continuing and no event, change or condition has occurred that has had, or could reasonably be expected to have, a Material Adverse Effect, since January 31, 2011, the Borrowers may at any time from time to time prior to the Maturity Date request one or more increases of the US Revolving Commitments or Canadian Revolving Commitments by notice to the Administrative Agent in writing of the amount of such proposed increase (each such notice, a “Commitment Increase Notice”); provided, however, that, (i) neither the US Revolving Commitment nor the Canadian Revolving Commitment of any Lender may be increased without such Lender’s consent, (ii) the aggregate amount of the Revolving Commitments as so increased shall not exceed $375,000,000, (iii) the Canadian Revolving Commitments as so increased shall not exceed $35,000,000 in the aggregate, and (iv) the Revolving Commitments may not be increased without the consent of the Administrative Agent (which consent shall not be unreasonably withheld or delayed).

 

(b)           The Borrowers may, in their sole discretion, but with the consent of the Administrative Agent as to any Person that is not at such time a Lender (which consent shall not be unreasonably withheld or delayed), offer to any existing Lender or to one or more additional banks or financial institutions the opportunity to participate in all or a portion of the increased US Revolving Commitments and/or Canadian Revolving Commitments, by notifying the Administrative Agent; provided, that the US Revolving Commitment of any New Lender shall not be less than $15,000,000 (and shall be in an integral multiple of $5,000,000) and the Canadian Revolving Commitment of any New Lender shall not be less than $10,000,000; provided, further  that after giving effect to any increase in the commitments pursuant to this Section 2.24, all Revolving Lenders, including any new Revolving Lender (together with its Related Affiliates) shall have pro rata Revolving Commitments with respect to the US Revolving Commitments and Canadian Revolving Commitments.    Promptly and in any event within five (5) Business Days after receipt of notice from the Borrowers of their desire to offer such commitments to certain existing Lenders or to the additional banks or financial institutions identified therein, the Administrative Agent shall notify such proposed lenders of the opportunity to participate in all or a portion of the increased US Revolving Commitments or Canadian Revolving Commitments.

 

(c)           Any existing Lender that accepts the Borrowers’ offer to increase its US Revolving Commitment or Canadian Revolving Commitment shall execute a Commitment

 

96

 

Increase Agreement with the Borrowers and Agents, whereupon such Lender shall be bound by, and entitled to the benefits of, this Agreement with respect to the full amount of its US Revolving Commitment or Canadian Revolving Commitment, as applicable, as so increased.

 

(d)           Any additional bank or financial institution which is not an existing Lender and which accepts Borrowers’ offer to participate in the increased US Revolving Commitments or Canadian Revolving Commitments shall execute and deliver to the Agents and the Borrowers a New Lender Agreement setting forth its US Revolving Commitment or Canadian Revolving Commitment (subject to the limitations on the amounts thereof set forth herein), and upon the effectiveness of such New Lender Agreement such bank or financial institution (a “New Lender”) shall become a US Revolving Lender or Canadian Lender, as applicable, for all purposes and to the same extent as if originally a party hereto and shall be bound by and entitled to the benefits of this Agreement, and the signature pages hereof shall be deemed to be amended to add the name of such New Lender.

 

(e)           Upon any increase in the US Revolving Commitments or Canadian Revolving Commitments pursuant to this Section 2.24, the Commitment Schedule shall be deemed amended to reflect the US Revolving Commitment and Canadian Revolving Commitment of each Lender (including any New Lender) as thereby increased.

 

Section 2.25         Illegality.

 

(a)           In the event that any Lender shall have determined (which determination shall be reasonably exercised and shall, absent manifest error, be final, conclusive and binding upon all parties) at any time that the making or continuance of any Eurodollar Loan has become unlawful as a result of compliance by such Lender in good faith with any applicable law, governmental rule, regulation, guideline or order (whether or not having the force of law and whether or not failure to comply therewith would be unlawful), then, in any such event, the Lender shall give prompt notice (by telephone confirmed in writing) to the Borrowers and to the Administrative Agent of such determination (which notice the Administrative Agent shall promptly transmit to the other Lenders).

 

(b)           Upon the giving of the notice to the Borrowers referred to in paragraph (a) above, (i) the Borrowers’ right to request (by continuation, conversion or otherwise) and such Lender’s obligation to make Eurodollar Loans shall be immediately suspended, and thereafter, any requested Borrowing of Eurodollar Loans shall, as to such Lender only, be deemed to be a request for an ABR Loan, and (ii) if the affected Eurodollar Loan or Loans are then outstanding, the Borrowers shall immediately, or if permitted by applicable law, no later than the date permitted thereby, upon at least one Business Day’s written notice to the Administrative Agent and the affected Lender, convert each such Eurodollar Loan into an ABR Loan, provided, that if more than one Lender is affected at any time, then all affected Lenders must be treated the same pursuant to this subsection.

 

(c)           In the event that any Canadian Lender shall have determined (which determination shall be reasonably exercised and shall, absent manifest error, be final, conclusive and binding upon all parties) at any time that the making or continuance of any Dollar Denominated Loan has become unlawful as a result of compliance by such Canadian Lender in

 

97

 

good faith with any applicable law, governmental rule, regulation, guideline or order (whether or not having the force of law and whether or not failure to comply therewith would be unlawful), then, in any such event, the Canadian Lender shall give prompt notice (by telephone confirmed in writing) to the Canadian Borrowers and to the Canadian Administrative Agent of such determination (which notice the Canadian Administrative Agent shall promptly transmit to the other Canadian Lenders).

 

(d)           Upon the giving of the notice to the Canadian Borrowers referred to in paragraph (c) above, (i) the Canadian Borrowers’ right to request (by continuation, conversion or otherwise) and such Canadian Lender’s obligation to make Dollar Denominated Loans shall be immediately suspended, and thereafter, any requested Borrowing of Dollar Denominated Loans shall, as to such Canadian Lender only, be deemed to be a request for a Canadian Revolving Loan, and (ii) if the affected Dollar Denominated Loan or Loans are then outstanding, the Canadian Borrowers shall immediately, or if permitted by applicable law, no later than the date permitted thereby, upon at least one Business Day’s written notice to the Canadian Administrative Agent and the affected Canadian Lender, convert each such Dollar Denominated Loan which is a Eurodollar Loan into a B/A Loan and convert each such Dollar Denominated Loan which is an ABR Loan into a Canadian Prime Rate Loan, provided, that if more than one Lender is affected at any time, then all affected Lenders must be treated the same pursuant to this subsection.

 

Section 2.26         Senior Notes.  To the extent the Senior Notes have not been (a) repaid, repurchased or defeased in full, or (b) refinanced or extended to have a scheduled maturity date at least ninety (90) days after December 23, 2016, in each case to the extent permitted hereunder and prior to the Senior Notes Trigger Date, then:

 

(i)            the Ansary Related Parties who hold Senior Notes then outstanding may execute and deliver one or more agreements, in form and substance reasonably satisfactory to the Administrative Agent (the “Noteholder Agreement”), pursuant to which such Ansary Related Parties shall have irrevocably agreed with respect to the Senior Notes held by such Ansary Related Parties (x) to customary subordination, including permanent standstill provisions with respect to any enforcement of any remedial actions that may be taken by the noteholders, or by the trustee on their behalf, under the Senior Notes until at least ninety (90) days after December 23, 2016 and (y) that contemporaneously with the payment, prepayment or repurchase of the Senior Notes for which the Availability Block has been established, the scheduled maturity of the remaining Senior Notes then outstanding shall be extended to a date not less than ninety (90) days after December 23, 2016; provided that nothing in the forgoing shall restrict the Borrowers’ ability to prepay Senior Notes subject to the Noteholder Agreement, and Ansary Related Parties’ right to receive and keep proceeds of such prepayment, so long as the terms and conditions set forth in Section 6.8(b)(v) are satisfied;

 

(ii)           On the Senior Notes Trigger Date, the Administrative Agent shall establish an Availability block in an amount equal to (x) the amount then outstanding of Senior Notes not then owned and controlled by the Ansary Related Parties and not subject to the Noteholder Agreement or (y) the amount of all Senior Notes then outstanding to the extent the Borrowers have not provided a Noteholder Agreement as of

 

98

 

the Senior Notes Trigger Date (in each case, the “Availability Block”); provided that after giving effect to the establishment of the Availability Block, the Borrowers shall immediately prepay any amount required pursuant to Section 2.11(b) (a failure to make any such payment being an immediate Event of Default pursuant to clause (a) of Article VII). The Availability Block will be removed by the Administrative Agent to allow for the Borrowers to repay, prepay or purchase the Senior Notes for which the Availability Block has been established; provided that (1) the terms and conditions under Section 6.8(b)(v) have been satisfied and the Borrowers are in compliance with such terms and conditions immediately prior to and after giving effect to such repayment, prepayment or purchase and (2) contemporaneously with such repayment, prepayment or purchase, the scheduled maturity of the remaining Senior Notes then outstanding shall be extended to a date not less than ninety (90) days after December 23, 2016, and the Administrative Agent shall have received evidence reasonably satisfactory to the Administrative Agent of the Borrowers’ compliance with such conditions.

 

Section 2.27         Defaulting Lenders.  Notwithstanding any provision of this Agreement to the contrary, if any Lender becomes a Defaulting Lender, then the following provisions shall apply for so long as such Lender is a Defaulting Lender.

 

(a)           fees shall cease to accrue on the unfunded portion of the Revolving Commitment of such Defaulting Lender pursuant to Section 2.12(a);

 

(b)           such Defaulting Lender shall not have the right to vote on any issue on which voting is required (other than to the extent expressly provided in Section 9.2(b)) and the Commitment and Revolving Exposure of such Defaulting Lender shall not be included in determining whether the Required Lenders or the Supermajority Revolving Lenders have taken or may take any action hereunder;

 

(c)           if any Swingline Exposure or LC Exposure exists at the time a Lender becomes a Defaulting Lender then:

 

(i)            all or any part of the Swingline Exposure and LC Exposure of such Defaulting Lender shall be reallocated among the non-Defaulting Lenders in accordance with their respective Applicable Percentages but only to the extent (1) the sum of all non-Defaulting Lenders’ Revolving Exposures plus such Defaulting Lender’s Swingline Exposure and LC Exposure does not exceed the total of all non-Defaulting Lenders’ Revolving Commitments and (2) none of the non-Defaulting Lender’s Revolving Exposure will exceed its applicable Revolving Commitment, in each case after giving effect to such reallocation;

 

(ii)           if the reallocation described in clause (i) above cannot, or can only partially, be effected, the Borrowers shall within one (1) Business Day following notice by the Administrative Agent (x) first, prepay such Swingline Exposure and (y) second, cash collateralize, for the benefit of the Issuing Bank, the Borrowers’ obligations corresponding to such Defaulting Lender’s LC Exposure (after giving effect to any partial reallocation pursuant to clause (i) above) in accordance with the procedures set forth in Section 2.6(j) for so long as such LC Exposure is outstanding;

 

99

 

(iii)          if the Borrowers cash collateralize any portion of such Defaulting Lender’s LC Exposure pursuant to clause (ii) above, the Borrowers shall not be required to pay any fees to such Defaulting Lender pursuant to Section 2.12(b) with respect to such Defaulting Lender’s LC Exposure during the period such Defaulting Lender’s LC Exposure is cash collateralized;

 

(iv)          if the LC Exposure of the non-Defaulting Lenders is reallocated pursuant to clause (i) above, then the fees payable to the Lenders pursuant to Section 2.12(a) and Section 2.12(b) shall be adjusted in accordance with such non-Defaulting Lenders’ Applicable Percentages; and

 

(v)           if all or any portion of such Defaulting Lender’s LC Exposure is neither reallocated nor cash collateralized pursuant to clause (i) or (ii) above, then, without prejudice to any rights or remedies of the Issuing Bank or any Lender hereunder, all letter of credit fees payable under Section 2.12(b) with respect to such Defaulting Lender’s LC Exposure shall be payable to the Issuing Bank until such LC Exposure is reallocated and/or cash collateralized; and

 

(d)           so long as such Lender is a Defaulting Lender, the Swingline Lender shall not be required to fund any Swingline Loan and the Issuing Bank shall not be required to issue, amend or increase any Letter of Credit, unless it is satisfied that the related exposure will be 100% covered by the Commitments of the non-Defaulting Lenders and/or cash collateral will be provided by the Borrowers in accordance with Section 2.27(c), and participating interests in any such newly made Swingline Loan or newly issued or increased Letter of Credit shall be allocated among non-Defaulting Lenders in a manner consistent with Section 2.27(c)(i) (and such Defaulting Lender shall not participate therein).

 

If (i) a Bankruptcy Event with respect to the Parent of any Lender shall occur following the date hereof and for so long as such event shall continue or (ii) the Issuing Bank or the Swingline Lender has a good faith belief that any Lender has defaulted in fulfilling its obligations under one or more other agreements in which such Lender commits to extend credit, the Issuing Bank shall not be required to issue, amend or increase any Letter of Credit and the Swingline Lender shall not be required to fund any Swingline Loan, unless the Issuing Bank or the Swingline Lender, as the case may be, shall have entered into arrangements with the Borrowers or such Lender, satisfactory to the Issuing Bank or the Swingline Lender, as the case may be, to defease any risk in respect of such Lender hereunder.

 

In the event that each of the Administrative Agent, the Borrowers, the Issuing Bank and the Swingline Lender agrees that a Defaulting Lender has adequately remedied all matters that caused such Lender to be a Defaulting Lender, then the Swingline Exposure and LC Exposure of the Lenders shall be readjusted to reflect the inclusion of such Lender’s Revolving Commitment and on the date of such readjustment such Lender shall purchase at par such of the Loans of the other Lenders (other than Swingline Loans) as the Administrative Agent shall determine may be necessary in order for such Lender to hold such Loans in accordance with its Applicable Percentage.

 

100

 

Section 2.28         Fixed Asset Component.  Upon receipt of the Canadian Fixed Asset Component Limit Notice, the Canadian Administrative Agent shall distribute the Canadian Fixed Asset Component Limit Notice to the Canadian Revolving Lenders. Upon receipt of the US Fixed Asset Component Limit Notice, the Administrative Agent shall distribute the US Fixed Asset Component Limit Notice to the US Revolving Lenders.  After the Canadian Administrative Agent and the Administrative Agent (as applicable) have established the initial Canadian Fixed Asset Component and the Canadian Fixed Asset Amortization Amount and the initial US Fixed Asset Component and the US Fixed Asset Amortization Amount (as applicable), the Canadian Administrative Agent and the Administrative shall provide written notice of such amounts to the Borrower Representatives and the Canadian Revolving Lenders and the US Revolving Lenders (as applicable).

 

ARTICLE III
 REPRESENTATIONS AND WARRANTIES

 

Each Loan Party represents and warrants to the Lenders that:

 

Section 3.1            Organization; Powers.  Each of the Loan Parties and each of its Subsidiaries is duly organized, validly existing and in good standing under the laws of the jurisdiction of its organization, has all requisite power and authority to carry on its business as now conducted and is qualified to do business in, and is in good standing in, every jurisdiction where the failure to so qualify could reasonably be expected to have a Material Adverse Effect.

 

Section 3.2            Authorization; Enforceability.  The Transactions are within each Loan Party’s corporate or limited liability company powers and have been duly authorized by all necessary corporate or limited liability company and, if required, stockholder action.  The Loan Documents to which each Loan Party is a party have been duly executed and delivered by such Loan Party and constitute a legal, valid and binding obligation of such Loan Party, enforceable in accordance with its terms, subject to applicable bankruptcy, insolvency, reorganization, moratorium or other laws affecting creditors’ rights generally and subject to general principles of equity, regardless of whether considered in a proceeding in equity or at law.

 

Section 3.3            Governmental Approvals; No Conflicts.  The Transactions (a) do not require any consent or approval of, registration or filing with, or any other action by, any Governmental Authority, except such as have been obtained or made and are in full force and effect and except for filings necessary to perfect Liens created pursuant to the Loan Documents, including actions required to satisfy the Federal Assignment of Claims Act of 1940, (b) will not violate any Requirement of Law applicable to any Loan Party or any of its Subsidiaries, (c) will not violate or result in a default under any indenture, agreement or other instrument binding upon any Loan Party or any of its Subsidiaries or its assets, or give rise to a right thereunder to require any payment to be made by any Loan Party or any of its Subsidiaries, and (d) will not result in the creation or imposition of any Lien on any asset of any Loan Party or any of its Subsidiaries, except Liens created pursuant to the Loan Documents.

 

101

 

Section 3.4            Financial Condition; No Material Adverse Change.

 

(a)           Current Financials.  The Current Financials were prepared in accordance with GAAP as in effect on the date such Current Financials are delivered (subject, in the case of interim financial statements, to the absence of footnotes and year-end audit adjustments which will not, individually or in the aggregate, be material) and fairly present the consolidated and consolidating financial condition and results of operations of the Company and its consolidated Subsidiaries as of the dates and for the periods reflected therein.

 

(b)           Historical Financials.  The Borrowers have heretofore furnished to the Lenders (i) the audited consolidated financial statements of the Company for the fiscal years ended January 31, 2008, January 31, 2009, January 31, 2010 and January 31, 2011 reported on by Ernst & Young, independent public accountants, (ii) management prepared consolidated and consolidating financial statements for the Company for the fiscal years ended January 31, 2008, January 31, 2009, January 31, 2010 and January 31, 2011, and (iii) management prepared interim consolidated and consolidating financial statements of the Company for the fiscal quarter ended October 29, 2011, certified by its chief financial officer.  Such financial statements present fairly, in all material respects, the consolidated and consolidating financial position and results of operations and cash flows of the Company, as of such dates and for such periods in accordance with GAAP, subject to year end audit adjustments and the absence of footnotes in the case of the statements referred to in clauses (ii) and (iii) above.

 

(c)           Absence of Contingent Liabilities.  No Loan Party has any outstanding Indebtedness or other liability (including, without limitation, contingent liabilities) or unusual, forward or long term commitments which if unpaid could reasonably be expected to result in a Material Adverse Effect other than (i) those disclosed in the most recent financial statements referred to in Section 5.1(a), (b), (c) or (d) below, as applicable, or the notes thereto, (ii) those expressly described in this Agreement (including in the Schedules hereto), and (iii) those entered into or incurred in compliance with the terms of this Agreement.

 

(d)           [Intentionally Deleted]

 

(e)           Projections.  The projections delivered to the Administrative Agent and the Lenders pursuant to Section 4.1(b) and Section 5.1(f) set forth the Borrowers’ reasonable best estimate as of the date hereof of the Company’s consolidated financial condition and results of operations as of the dates and for the periods covered thereby.  Such projections were prepared in good faith in accordance with sound financial planning practices on the basis of the assumptions stated therein, which assumptions were believed by the Borrowers to be reasonable at the time made and which the Borrowers continue to believe are reasonable on the date hereof.

 

(f)            No Material Adverse Change.  No event, change or condition has occurred that has had, or could reasonably be expected to have, a Material Adverse Effect, since January 31, 2011.

 

Section 3.5            Properties.

 

(a)           As of the date of this Agreement, Schedule 3.5 sets forth the address of each parcel of real property that is owned or leased by each Loan Party.  Each of such leases and

 

102

 

subleases is valid and enforceable in accordance with its terms and is in full force and effect, and no default by any party to any such lease or sublease exists that could reasonably be expected to result in a Material Adverse Effect.  Each of the Loan Parties and its Subsidiaries has good and indefeasible title to, or valid leasehold interests in, all its real and personal property, free of all Liens other than those permitted by Section 6.2.

 

(b)           Each Loan Party and its Subsidiaries owns, or is licensed to use, all trademarks, tradenames, copyrights, patents and other intellectual property necessary to its business as currently conducted, a correct and complete list of which, as of the date of this Agreement, is set forth on Schedule 3.5, and the use thereof by the Loan Parties and its Subsidiaries does not infringe in any material respect upon the rights of any other Person, and the Loan Parties’ rights thereto are not subject to any licensing agreement or similar arrangement.

 

Section 3.6            Litigation and Environmental Matters.

 

(a)           There are no actions, suits or proceedings by or before any arbitrator or Governmental Authority pending against or, to the knowledge of any Loan Party, threatened against or affecting the Loan Parties or any of their Subsidiaries or any of the Collateral (i) as to which there is a reasonable possibility of an adverse determination and that, if adversely determined, could reasonably be expected, individually or in the aggregate, to result in a Material Adverse Effect (other than the Disclosed Matters) or (ii) that involve this Agreement or the Transactions.

 

(b)           Except for the Disclosed Matters (i) no Loan Party nor any of its Subsidiaries has received notice of any claim with respect to any Environmental Liability or knows of any basis for any Environmental Liability and (ii) and except with respect to any other matters that, individually or in the aggregate, could not reasonably be expected to result in a Material Adverse Effect, no Loan Party nor any of its Subsidiaries (A) has failed to comply with any Environmental Law or to obtain, maintain or comply with any permit, license or other approval required under any Environmental Law or (B) has become subject to any Environmental Liability.

 

(c)           Since the date of this Agreement, there has been no change in the status of the Disclosed Matters that, individually or in the aggregate, has resulted in, or materially increased the likelihood of, a Material Adverse Effect.

 

Section 3.7            Compliance with Laws and Agreements.  Each Loan Party and its Subsidiaries is in compliance with all Requirements of Law applicable to it or its property and all indentures, agreements and other instruments binding upon it or its property, except where the failure to do so, individually or in the aggregate, could not reasonably be expected to result in a Material Adverse Effect.

 

Section 3.8            Investment and Holding Company Status.  No Loan Party nor any of its Subsidiaries is (a) an “investment company” as defined in, or subject to regulation under, the Investment Company Act of 1940 or (b) a “holding company” as defined in, or subject to regulation under, the Public Utility Holding Company Act of 1935.

 

103

 

Section 3.9            Taxes.  Each Loan Party and its Subsidiaries have timely filed or caused to be filed all income and other Tax returns and reports required to have been filed and have paid or caused to be paid all income and other Taxes required to have been paid by it, except Taxes that are being contested in good faith by appropriate proceedings and for which such Loan Party or such Subsidiary, as applicable, has set aside on its books adequate reserves.  No tax liens have been filed and no claims are being asserted with respect to any such taxes.

 

Section 3.10         Employee Benefits.

 

(a)           No ERISA Event has occurred or is reasonably expected to occur that, when taken together with all other such ERISA Events for which liability is reasonably expected to occur, could reasonably be expected to result in a Material Adverse Effect.  The present value of all accumulated benefit obligations under each Plan (based on the assumptions used for purposes of Statement of Financial Accounting Standards No. 87) did not, as of the date of the most recent financial statements reflecting such amounts, exceed the fair market value of the assets of such Plan, and the present value of all accumulated benefit obligations of all underfunded Plans (based on the assumptions used for purposes of Statement of Financial Accounting Standards No. 87) did not, as of the date of the most recent financial statements reflecting such amounts, exceed the fair market value of the assets of all such underfunded Plans.

 

(b)           Except as could not reasonably be expected to have a Material Adverse Effect, each Canadian Loan Party has complied in all material respects with all applicable laws regarding each Canadian Pension Plan (including, where applicable, the Employment Pension Plans Act (Alberta) and the Income Tax Act (Canada) and the terms and conditions of each Canadian Pension Plan).  There exists no material outstanding liability of any Canadian Loan Party with respect to any Canadian Pension Plan that has been terminated.  Each Canadian Pension Plan relating to a Canadian Loan Party has been funded in accordance with its terms and regulatory requirements as outlined by the Employment Pension Plans Act (Alberta), administrative requirements of the Superintendent of Pensions of Alberta and the most recent actuarial report filed with the Superintendent of Pensions of Alberta in respect of such Canadian Pension Plan, as and to the extent applicable, except to the extent any failure to do so could not reasonably be expected to have a Material Adverse Effect.  No Canadian Loan Party sponsors, maintains or contributes to, or has at any time sponsored, maintained or contributed to any “specified multi-employer plan” (as defined in the Employment Pension Plans Act (Alberta)).

 

Section 3.11         Disclosure.  The Borrowers have disclosed to the Lenders all agreements, instruments and corporate or other restrictions to which any Loan Party is subject, and all other matters known to them, that, individually or in the aggregate, could reasonably be expected to result in a Material Adverse Effect.  Neither the Lender Update nor any of the other reports, financial statements, certificates or other information furnished by or on behalf of any Loan Party to the Administrative Agent or any Lender in connection with the negotiation of this Agreement or any other Loan Document (as modified or supplemented by other information so furnished) as of the date of delivery, contains any material misstatement of fact or omits to state any material fact necessary to make the statements therein, in the light of the circumstances under which they were made, not misleading; provided  that, with respect to forecast or projected financial information, the Borrowers represent only that such information was prepared in good faith based upon assumptions believed to be reasonable at the time delivered and, if such

 

104

 

projected financial information was delivered prior to the Effective Date, as of the Effective Date.

 

Section 3.12         Material Agreements.  All material agreements and contracts to which any Loan Party is a party or is bound as of the date of this Agreement are listed on Schedule 3.12.  No Loan Party is in default in the performance, observance or fulfillment of any of the obligations, covenants or conditions contained in (a) any material agreement to which it is a party or (b) any agreement or instrument evidencing or governing Indebtedness, where such default could reasonably be expected to result in a Material Adverse Effect.

 

Section 3.13         Solvency.

 

(a)           Immediately after the consummation of the Transactions to occur on the Effective Date, (i) the fair value of the assets of each Loan Party, at a fair valuation, will exceed its debts and liabilities, subordinated, contingent or otherwise; (ii) the present fair saleable value of the property of each Loan Party will be greater than the amount that will be required to pay the probable liability of its debts and other liabilities, subordinated, contingent or otherwise, as such debts and other liabilities become absolute and matured; (iii) each Loan Party will be able to pay its debts and liabilities, subordinated, contingent or otherwise, as such debts and liabilities become absolute and matured; and (iv) each Loan Party will not have unreasonably small capital with which to conduct the business in which it is engaged as such business is now conducted and is proposed to be conducted after the Effective Date.

 

(b)           No Loan Party intends to, or will permit any of its Subsidiaries to, and no Loan Party believes that it or any of its Subsidiaries will, incur debts beyond its ability to pay such debts as they mature, taking into account the timing of and amounts of cash to be received by it or any such Subsidiary and the timing of the amounts of cash to be payable on or in respect of its Indebtedness or the Indebtedness of any such Subsidiary.

 

Section 3.14         Insurance.  Schedule 3.14 sets forth a description of all insurance maintained by or on behalf of the Loan Parties and the Subsidiaries as of the Effective Date.  As of the Effective Date, all premiums in respect of such insurance have been paid.  The Borrowers believe that the insurance maintained by or on behalf of the Borrowers and their Subsidiaries is adequate.

 

Section 3.15         Capitalization and Subsidiaries.  Schedule 3.15 sets forth (a) a correct and complete list of the name and relationship to the Borrowers of each and all of each Borrower’s Subsidiaries, (b) a true and complete listing of each class of each of the Borrowers’ authorized Equity Interests, of which all of such issued shares are validly issued, outstanding, fully paid and non-assessable, and owned beneficially and of record by the Persons identified on Schedule 3.15, and (c) the type of entity of each Borrower and each of its Subsidiaries.  All of the issued and outstanding Equity Interests owned by any Loan Party have been (to the extent such concepts are relevant with respect to such ownership interests) duly authorized and issued and are fully paid and non assessable.

 

Section 3.16         Security Interest in Collateral.  Except to the extent perfection is expressly excused pursuant to the Loan Documents, the provisions of this Agreement and the

 

105

 

other Loan Documents create legal and valid Liens on all the Collateral in favor of the US Collateral Agent or the Canadian Collateral Agent (as applicable), and such Liens constitute perfected and continuing Liens on the Collateral, securing (a) in the case of the Collateral owned by the US Loan Parties, the Secured Obligations, and (b) in the case of the Collateral owned by the Canadian Loan Parties, the Canadian Secured Obligations, in each case enforceable against the applicable Loan Party and all third parties, and having priority over all other Liens on the Collateral except for (i) Permitted Senior Encumbrances, and (ii) Liens perfected only by possession (including possession of any certificate of title) to the extent the US Collateral Agent or the Canadian Collateral Agent (as applicable) has not obtained or does not maintain possession of such Collateral.

 

Section 3.17         Labor Disputes.  As of the Effective Date, there are no strikes, lockouts or slowdowns against any Loan Party or any Subsidiary pending or, to the knowledge of the Borrowers, threatened.  The hours worked by and payments made to employees of the Loan Parties and the Subsidiaries have not been in violation of the Fair Labor Standards Act or any other applicable Federal, state, local or foreign law dealing with such matters.  All payments due from any Loan Party or any Subsidiary, or for which any claim may be made against any Loan Party or any Subsidiary, on account of wages and employee health and welfare insurance and other benefits, have been paid or accrued as a liability on the books of the Loan Party or such Subsidiary.

 

Section 3.18         Affiliate Transactions.  Except as set forth on Schedule 3.18, as of the date of this Agreement, there are no existing or proposed agreements, arrangements, understandings, or transactions between any Loan Party and any of the officers, members, managers, directors, stockholders, parents, other interest holders, employees, or Affiliates (other than Subsidiaries) of any Loan Party or any members of their respective immediate families, and none of the foregoing Persons are directly or indirectly indebted to or have any direct or indirect ownership, partnership, or voting interest in any Affiliate of any Loan Party or any Person with which any Loan Party has a business relationship or which competes with any Loan Party.

 

Section 3.19         Common Enterprise.  The successful operation and condition of each of the Loan Parties are dependent on the continued successful performance of the functions of the group of the Loan Parties as a whole and the successful operation of each of the Loan Parties is dependent on the successful performance and operation of each other Loan Party.  Each Loan Party expects to derive benefit (and its board of directors or other governing body has determined that it may reasonably be expected to derive benefit), directly and indirectly, from (a) successful operations of each of the other Loan Parties and (b) the credit extended by the Lenders to the Borrowers hereunder, both in their separate capacities and as members of the group of companies.  Each Loan Party has determined that execution, delivery, and performance of this Agreement and any other Loan Documents to be executed by such Loan Party is within its purpose, will be of direct and indirect benefit to such Loan Party, and is in its best interest.

 

Section 3.20         Casualties; Taking of Properties.  Neither the business nor the properties of any Loan Party has been affected in a manner that has had or could have a Material Adverse Effect as a result of any fire, explosion, earthquake, flood, drought, windstorm, accident, strike or other labor disturbance, embargo, requisition or taking of property or cancellation of contracts,

 

106

 

permits or concessions by any domestic or foreign government or any agency thereof, riot, activities of armed forces or acts of God or of any public enemy.

 

Section 3.21         Perfection Certificate; Schedules to other Loan Documents.  All information in the Perfection Certificate and each Perfection Certificate Update and all information set forth in all disclosure schedules to each of the Loan Documents is true, correct and complete.  No Borrower has filed a US federal income tax return or any other tax return with a Governmental Authority under a name different in any respect from the name of that Borrower listed on the signature pages hereto or the prior names of that Borrower set forth in the Perfection Certificate or any Perfection Certificate Update.

 

Section 3.22         Existing Indebtedness.  Schedule 3.22 hereto contains an accurate and complete list and description of any and all Indebtedness of the Loan Parties existing on the date of this Agreement to be repaid on the date of this Agreement, prior to giving effect to the repayment of any such Indebtedness and including, with respect to each such item of existing Indebtedness: (a) the current lender or holder of such Indebtedness, (b) the principal amount of such Indebtedness on the date of this Agreement prior to giving effect to the repayment of any such Indebtedness, (c) a description of the material loan agreements, promissory notes and other documents evidencing, governing or otherwise pertaining to such Indebtedness, and (d) a description of all property which stands as security for such Indebtedness.

 

Section 3.23         [Intentionally Reserved].

 

Section 3.24         Deposit Accounts.  Other than the Controlled Disbursement Accounts and the deposit accounts listed on Schedule 3.24, none of the Borrowers maintains any deposit account with any bank or other depository institution into which any cash or cash equivalents are deposited or cash or cash equivalents are maintained.

 

Section 3.25         Regulation H.  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 and in which flood insurance has been made available under the National Flood Insurance Act of 1968, except for which the Administrative Agent has received evidence of an acceptable flood hazard insurance policy covering such improvements.

 

Section 3.26         Compliance with Anti-Terrorism and Anti-Money Laundering Laws and Regulations.  No Loan Parties nor any of their Affiliates, nor any of their respective partners, members, shareholders or other equity owners, and none of their respective employees, officers, directors, representatives or agents, is, nor will they become, a person or entity with whom U.S. persons or entities are restricted from doing business under regulations of the Office of Foreign Asset Control (“OFAC”) of the Department of the Treasury (including those named on OFAC’s Specially Designated Nationals and Blocked Persons List) or under any statute, executive order (including the September 24, 2001, Executive Order Blocking Property and Prohibiting Transactions with Persons Who Commit, Threaten to Commit, or Support Terrorism), or other governmental action and is not and will not engage in any dealings or transactions or be otherwise associated with such persons or entities.

 

107

 

ARTICLE IV
 CONDITIONS

 

Section 4.1            Effective Date.  The amendment and restatement of the Existing Credit Agreement and the obligations of the Lenders to make Loans (including, without limitation, the True-Up Loans) and of the Issuing Bank to issue Letters of Credit hereunder shall not become effective until the date on which each of the following conditions is satisfied (or waived in accordance with Section 9.2) as evidenced by the execution and delivery of the Certificate of Effectiveness:

 

(a)           Credit Agreement and Loan Documents.  The Administrative Agent (or its counsels) shall have received (i) from each party hereto either (A) a counterpart of this Agreement signed on behalf of such party or (B) written evidence satisfactory to the Administrative Agent (which may include facsimile or other electronic transmission of a signed signature page of this Agreement) that such party has signed a counterpart of this Agreement and (ii) duly executed copies of the Loan Documents and such other certificates, documents, instruments and agreements as the Administrative Agent shall reasonably request in connection with the transactions contemplated by this Agreement and the other Loan Documents, including any promissory notes requested by a Lender pursuant to Section 2.10 payable to the order of each such requesting Lender and a written opinion of the Loan Parties’ counsel, addressed to each Agent, the Issuing Bank and the Lenders in substantially the form of Exhibit B.

 

(b)           Financial Statements and Projections.  The Lenders shall have received (i) audited consolidated financial statements of the Company for the fiscal years ended January 31, 2008, 2009, 2010 and 2011, (ii) unaudited interim consolidated financial statements of the Company for each fiscal month and  quarter ended after the date of the latest applicable financial statements delivered pursuant to clause (i) of this paragraph as to which such financial statements are available, and such financial statements shall not, in the reasonable judgment of the Administrative Agent, reflect any material adverse change in the consolidated financial condition of the Company, as reflected in the audited, consolidated financial statements described in clause (i) of this paragraph  and (iii) satisfactory projections prepared on (x) a quarterly basis through January 31, 2013 and (y) an annual basis through January 31, 2017, in each case in form and substance reasonably satisfactory to the Administrative Agent.

 

(c)           Closing Certificates; Certified Certificate of Incorporation; Good Standing Certificates.  The Administrative Agent shall have received (i) a certificate of each Loan Party, dated the Effective Date and executed by its Secretary or Assistant Secretary, which shall (A) certify the resolutions of its Board of Directors, members or other body authorizing the execution, delivery and performance of the Loan Documents to which it is a party, (B) identify by name and title and bear the signatures of the Financial Officers and any other Responsible Officers of such Loan Party authorized to sign the Loan Documents to which it is a party, and (C) contain appropriate attachments, including the certificate or articles of incorporation or organization of each Loan Party certified by the relevant authority of the jurisdiction of organization of such Loan Party and a true and correct copy of its bylaws or operating, management or partnership agreement, (ii) a long form good standing certificate for each Loan Party from its jurisdiction of organization, and (iii) a good standing/foreign qualification

 

108

 

certificate for each Loan Party for each jurisdiction where such Loan Party is required to be qualified to do business.

 

(d)           No Default Certificate.  The Administrative Agent shall have received a certificate, signed by the chief financial officer of each Borrower, on the Effective Date (i) stating that no Default has occurred and is continuing at the time of and immediately after giving effect to (1) the amendment and restatement of the Existing Credit Agreement and the making of all True-Up Loans required thereby, and (2) the funding of all Borrowings and issuance of all Letters of Credit occurring on the Effective Date, if any, (ii) stating that the representations and warranties contained in Article III are true and correct as of such date, and (iii) certifying any other factual matters as may be reasonably requested by the Administrative Agent or the Canadian Administrative Agent.

 

(e)           Fees.  The Lenders, the Agents and JPMorgan Securities, LLC (as Sole Bookrunner and Sole Lead Arranger) shall have received all fees required to be paid, and all expenses for which invoices have been presented (including the reasonable fees and expenses of legal counsel to the Agents and local counsel), on or before the Effective Date.  All such amounts will be paid with proceeds of Loans made on the Effective Date and will be reflected in the funding instructions given by the Borrower Representative US to the Administrative Agent on or before the Effective Date.

 

(f)            Lien Searches.  The Administrative Agent and the Canadian Administrative Agent shall have received the results of a recent lien search in each of the jurisdictions where the Loan Parties are organized or assets of the Loan Parties are located, and such search shall reveal no liens on any of the assets of the Loan Parties except for liens permitted by Section 6.2 or discharged on or prior to the Effective Date pursuant to a pay-off letter or other documentation satisfactory to the Administrative Agent.

 

(g)           Repayment of Outstanding Fees and Interest.  All accrued and unpaid fees and interest owing under the Existing Credit Agreement shall be paid in full in cash by the Borrowers.

 

(h)           Funding Accounts.  The Administrative Agent shall have received a notice setting forth the deposit account of the US Borrowers (the “US Funding Account”) and the deposit account of the Canadian Borrowers (the “Canadian Funding Account”) to which the Administrative Agent is authorized by the US Borrowers and the Canadian Borrowers to transfer the proceeds of any Borrowings by the US Borrowers or the Canadian Borrowers requested or authorized pursuant to this Agreement.

 

(i)            Solvency.  The Administrative Agent and the Canadian Administrative Agent shall have received a solvency certificate from a Financial Officer of each Loan Party.

 

(j)            Borrowing Base Certificates.  The Administrative Agent shall have received a Canadian Borrowing Base Certificate and a US Borrowing Base Certificate which calculate the Canadian Borrowing Base and the US Borrowing Base as of October 29, 2011, respectively.

 

109

 

(k)           Closing Availability.  After giving effect to the repayments required pursuant to clause (h) above, to all Borrowings to be made on the Effective Date and the issuance of any Letters of Credit on the Effective Date and payment of all fees and expenses due hereunder, and with all of the Loan Parties’ indebtedness, liabilities, and obligations current, the Borrowers’ aggregate Availability shall not be less than $100,000,000.

 

(l)            Filings, Registrations and Recordings.  Each document (including any Uniform Commercial Code financing statement and similar filings under the Personal Property Security Act) required by the Collateral Documents or under law or reasonably requested by the US Collateral Agent or the Canadian Collateral Agent to be filed, registered or recorded in order to create in favor of (i) the US Collateral Agent, for the benefit of the Administrative Agent, the US Lenders, the Export-Related Lender and the Other Secured Parties, and (ii) the Canadian Collateral Agent, for the benefit of the Canadian Collateral Agent, the Canadian Lenders and the Other Secured Parties, a perfected Lien on the Collateral described therein, prior and superior in right to any other Person (other than with respect to Liens expressly permitted by Section 6.2), shall be in proper form for filing, registration or recordation.

 

(m)          Mortgage Amendments, etc.  The US Collateral Agent and the Canadian Collateral Agent shall have received, with respect to each parcel of Real Property (other than the Real Property owned by EMDSI) which is required to be subject to a Lien in favor of the US Collateral Agent or the Canadian Collateral Agent (as applicable), each of the following, in form and substance reasonably satisfactory to the US Collateral Agent or the Canadian Collateral Agent (as applicable):

 

(i)            Mortgages (other than the Mortgage to be executed by EMDSI, which is to be delivered pursuant to Section 5.15(a)) or amendments to the existing Mortgages encumbering such Real Property dated as of the date hereof and duly executed by the applicable Loan Parties, each in form and substance satisfactory to the Administrative Agent;

 

(ii)           evidence satisfactory to the Administrative Agent that a modification endorsement with respect to each existing Mortgage will be issued following recordation of the amendments described in clause (i) above and all premiums therefore have been paid;

 

(iii)          an opinion of counsel in the state or province in which such parcel of Real Property is located in form and substance and from counsel reasonably satisfactory to the US Collateral Agent or the Canadian Collateral Agent (as applicable); and

 

(iv)          such other information, documentation, and certifications as may be reasonably required by the US Collateral Agent and the Canadian Collateral Agent.

 

(n)           [Intentionally Deleted]

 

(o)           Participation Agreements.  The Administrative Agent shall have received an executed Participation Agreement from each US Lender as required pursuant to Section 8.10.

 

110

 

(p)           Other Documents.  The Administrative Agent and the Canadian Administrative Agent shall have received such other documents as the Administrative Agent, the Canadian Administrative Agent, the Issuing Bank, any Lender or their respective counsel may have reasonably requested.

 

Without limiting the generality of the provisions of Section 8.3, for purposes of determining compliance with the conditions specified in this Section 4.1, each Lender that has signed this Agreement shall be deemed to have consented to, approved or accepted or to be satisfied with, each document or other matter required under this Section 4.1 to be consented to or approved by or acceptable or satisfactory to a Lender unless the Administrative Agent or the Canadian Administrative Agent, as applicable, shall have received notice from such Lender prior to the Effective Date specifying its objection thereto.  All documents executed or submitted pursuant to this Section 4.1 by and on behalf of the Borrowers or any of the other Loan Parties shall be in form and substance reasonably satisfactory to the Administrative Agent, the Canadian Administrative Agent and their counsel.  Pursuant to and upon the execution and delivery of the Certificate of Effectiveness, the Administrative Agent shall notify the Borrowers and the Lenders of the Effective Date, and such notice shall be conclusive and binding.  Notwithstanding the foregoing, the obligations of the Lenders to make Loans and of the Issuing Bank to issue Letters of Credit hereunder shall not become effective unless each of the foregoing conditions is satisfied (or waived pursuant to Section 9.2) at or prior to 2:00 p.m., Chicago time, on December 31, 2011 (and, in the event such conditions are not so satisfied or waived, the Commitments shall terminate at such time).

 

Section 4.2            Each Credit Event.  The obligation of each Lender to make a Loan on the occasion of any Borrowing, and of the Issuing Bank to issue, amend, renew or extend any Letter of Credit, is subject to the satisfaction of the following conditions:

 

(a)           The representations and warranties of the Borrowers set forth in this Agreement shall be true and correct in all material respects on and as of the date of such Borrowing or the date of issuance, amendment, renewal or extension of such Letter of Credit, as applicable, except to the extent such representations or warranties expressly relate to an earlier date, or if they are not true and correct in all material respects none of the Administrative Agent, the Canadian Administrative Agent or the Required Lenders shall have determined not to make such Loan or instructed the Issuing Bank not to issue such Letters of Credit as a result of the fact that such representation or warranty is untrue or incorrect.

 

(b)           At the time of and immediately after giving effect to such Borrowing or the issuance, amendment, renewal or extension of such Letter of Credit, as applicable, no Default shall have occurred and be continuing or if a Default has occurred and is continuing, none of the Administrative Agent, the Canadian Administrative Agent or the Required Lenders shall have determined not to make such Borrowing or instructed the Issuing Bank not to issue such Letter of Credit as a result of such Default.

 

(c)           After giving effect to any Revolving Loan Borrowing or the issuance of any Letter of Credit, (i) US Availability is not less than zero, and (ii) Canadian Availability is not less than zero.

 

111

 

Each Borrowing and each issuance, amendment, renewal or extension of a Letter of Credit shall be deemed to constitute a representation and warranty by the Borrowers on the date thereof as to the matters specified in Section 4.2(a), Section 4.2(b) and Section 4.2(c).

 

ARTICLE V
 AFFIRMATIVE COVENANTS

 

Until the Commitments have expired or been terminated and the principal of and interest on each Loan and all fees payable hereunder shall have been paid in full and all Letters of Credit shall have expired or terminated and all LC Disbursements shall have been reimbursed, each Loan Party executing this Agreement covenants and agrees, jointly and severally with all of the Loan Parties, with the Lenders that:

 

Section 5.1            Financial Statements; Borrowing Base and Other Information.  The Borrowers will furnish to the Administrative Agent (and Administrative Agent shall thereafter furnish to the Lenders to the extent requested) and, with respect to the certificate specified in Section 5.1(q) hereof, the US Collateral Agent and the Canadian Collateral Agent:

 

(a)           within 90 days after the end of each fiscal year of the Company, its audited consolidated balance sheet and related statements of operations, stockholders’ equity and cash flows as of the end of and for such year, setting forth in each case in comparative form the figures for the previous fiscal year, all reported on by independent public accountants of recognized national standing acceptable to the Required Lenders (without a “going concern” or like qualification or exception and without any qualification or exception as to the scope of such audit) to the effect that such consolidated financial statements present fairly in all material respects the financial condition and results of operations of the Company and its consolidated Subsidiaries on a consolidated basis in accordance with GAAP consistently applied, accompanied by any management letter prepared by said accountants;

 

(b)           within 45 days after the end of each of the first three fiscal quarters of the Company, its consolidated and consolidating balance sheet and related statements of operations, stockholders’ equity and cash flows as of the end of and for such fiscal quarter and the then elapsed portion of the fiscal year, setting forth in each case in comparative form the figures for the corresponding period or periods of (or, in the case of the balance sheet, as of the end of) the previous fiscal year, all certified by one of its Financial Officers as presenting fairly in all material respects the financial condition and results of operations of the Company and its consolidated Subsidiaries on a consolidated basis in accordance with GAAP consistently applied, subject to normal year-end audit adjustments and the absence of footnotes;

 

(c)           within 20 days after the end of each fiscal month of the Company, its consolidated and consolidating balance sheet and related statements of operations, stockholders’ equity and cash flows as of the end of and for such fiscal month and the then elapsed portion of the fiscal year, setting forth in each case in comparative form the figures for the corresponding period or periods of (or, in the case of the balance sheet, as of the end of) the previous fiscal year, all certified by one of its Financial Officers as presenting fairly in all material respects the financial condition and results of operations of the Company and its consolidated Subsidiaries on

 

112

 

a consolidated basis in accordance with GAAP consistently applied, subject to normal year-end audit adjustments and the absence of footnotes;

 

(d)           concurrently with any delivery of financial statements under Section 5.1(a), Section 5.1(b) or Section 5.1(c) above, a certificate of a Financial Officer of each of the Borrower Representatives in substantially the form of Exhibit E (i) certifying, in the case of the financial statements delivered under Section 5.1(b) or Section 5.1(c), as presenting fairly in all material respects the financial condition and results of operations of the Company and its consolidated Subsidiaries on a consolidated basis in accordance with GAAP consistently applied, subject to normal year-end audit adjustments and the absence of footnotes, (ii) certifying as to whether a Default has occurred and, if a Default has occurred, specifying the details thereof and any action taken or proposed to be taken with respect thereto, (iii) setting forth reasonably detailed calculations of the Borrowers’ Leverage Ratio and demonstrating compliance with Section 6.1, Section 6.4, Section 6.5, Section 6.7, Section 6.12 and Section 6.13 and providing support for the financial components and other information contained therein, including, without limitation, documentation and support for any fees and expenses incurred in connection with a Permitted Acquisition included in the calculation of the Borrowers’ EBITDA, and (iv) stating whether any change in GAAP or in the application thereof has occurred since the date of the audited financial statements referred to in Section 3.4 and, if any such change has occurred, specifying the effect of such change on the financial statements accompanying such certificate;

 

(e)           concurrently with any delivery of financial statements under Section 5.1(a) above, a certificate of the accounting firm that reported on such financial statements stating whether they obtained knowledge during the course of their examination of such financial statements of any Default (which certificate may be limited to the extent required by accounting rules or guidelines);

 

(f)            as soon as available, but in any event not more than 60 days prior to, but no more than 30 days after, the end of each fiscal year of the Company, a copy of the plan and forecast (including a projected consolidated and consolidating balance sheet, income statement and funds flow statement) of the Company and its Subsidiaries for each month of the upcoming fiscal year (the “Projections”) in form reasonably satisfactory to the Administrative Agent;

 

(g)           as soon as available but in any event within 20 days of the end of each calendar month, and at such other times as may be necessary to re-determine availability of Advances hereunder or as may be requested by the Administrative Agent, as of the period then ended, a US Borrowing Base Certificate, a Canadian Borrowing Base Certificate, an Export-Related Borrowing Base Certificate and, in each case, supporting information in connection therewith, together with any additional reports with respect to the US Borrowing Base, the Export-Related Borrowing Base and the Canadian Borrowing Base as the Administrative Agent may reasonably request; provided  that if following the Effective Date, Availability is less than the greater of (i) $30,000,000 and (ii) 12% of the US Revolving Commitments at any time, the Administrative Agent, in its sole discretion, may require the delivery of a US Borrowing Base Certificate, a Canadian Borrowing Base Certificate, an Export-Related Borrowing Base Certificate and supporting information more often than monthly, including weekly or daily, in which event the US Borrowing Base, the Export-Related Borrowing Base and the Canadian Borrowing Base would be adjusted immediately upon receipt of such reports;

 

113

 

(h)           as soon as available but in any event within 20 days of the end of each calendar month and at such other times as may be requested by the Administrative Agent, as of the period then ended, all delivered electronically in a text formatted file (not in an Adobe *.pdf file):

 

(i)            a detailed aging of the Borrowers’ Accounts (A) including all invoices aged by invoice date and due date (with an explanation of the terms offered) and (B) reconciled to the US Borrowing Base Certificate, Export-Related Borrowing Base Certificate or Canadian Borrowing Base Certificate (as applicable) delivered as of such date prepared in a manner reasonably acceptable to the Administrative Agent, together with a summary specifying the name, address, and balance due for each Account Debtor;

 

(ii)           a schedule detailing the Borrowers’ Inventory, in form satisfactory to the Administrative Agent, (A) by location (showing Inventory in transit, any Inventory located with a third party under any consignment, bailee arrangement, or warehouse agreement), by class (raw material, rental, rolling stock, work-in-process and finished goods), by product type, and by volume on hand, which Inventory shall be valued at the lower of cost (determined on a first-in, first-out basis) or market and adjusted for Reserves as the Administrative Agent has previously indicated to a Borrower Representative are deemed by the Administrative Agent to be appropriate, (B) including a report of any variances or other results of Inventory counts performed by the Borrowers since the last Inventory schedule (including information regarding sales or other reductions, additions, returns, credits issued by the Borrowers and complaints and claims made against the Borrowers), and (C) reconciled to the US Borrowing Base Certificate, Export-Related Borrowing Base Certificate or Canadian Borrowing Base Certificate (as applicable) delivered as of such date;

 

(iii)          a worksheet of calculations prepared by the Borrowers to determine Eligible Accounts and Eligible Inventory, such worksheets detailing the Accounts and Inventory excluded from Eligible Accounts and Eligible Inventory and the reason for such exclusion;

 

(iv)          a reconciliation of the Borrowers’ Accounts and Inventory between the amounts shown in the Borrowers’ general ledger and financial statements and the reports delivered pursuant to clauses (i) and (ii) above; and

 

(v)           a reconciliation of the loan balance per the Borrowers’ general ledger to the loan balance under this Agreement;

 

(i)            as soon as available but in any event within 3 days of the end of each calendar week and at such other times as may be requested by the Administrative Agent, as of the calendar week then ended, a schedule and aging of the Borrowers’ accounts payable, delivered electronically in a text formatted file (not in an Adobe *.pdf file);

 

(j)            as soon as available but in any event within 20 days of the end of each calendar month and at such other times as may be requested by the Administrative Agent, as of the month then ended, a report of the Borrowers’ rental equipment (including rolling stock), such

 

114

 

report detailing all acquisitions and dispositions since the prior report delivered to the Administrative Agent, delivered electronically in a text formatted file (not in an Adobe *.pdf file);

 

(k)           as soon as available but in any event within 20 days of the end of each calendar month and at such other times as may be requested by the Administrative Agent, as of the month then ended, statements of the Borrowers’ lockbox accounts, delivered electronically in a text formatted file (not in an Adobe *.pdf file);

 

(l)            as soon as available but in any event within 20 days of the end of each calendar quarter, as of the quarter then ended, and at such other times as may be requested by the Administrative Agent, an updated customer list for the Borrowers and their Subsidiaries, which list shall state the customer’s name, mailing address and phone number and shall be certified as true and correct by a Financial Officer of each of the Borrower Representatives, such list to be delivered electronically in a text formatted file (not in an Adobe *.pdf file);

 

(m)          promptly upon the Administrative Agent’s request:

 

(i)            copies of invoices in connection with the invoices issued by the Borrowers in connection with any Accounts, credit memos, shipping and delivery documents, and other information related thereto;

 

(ii)           copies of purchase orders, invoices, and shipping and delivery documents in connection with any Inventory or Equipment purchased by any Loan Party; and

 

(iii)          a schedule detailing the balance of all intercompany accounts of the Loan Parties;

 

(n)           as soon as available but in any event within 20 days of the end of each calendar month and at such other times as may be requested by the Administrative Agent, as of the period then ended, the Borrowers’ sales journal, cash receipts journal (identifying trade and non-trade cash receipts) and debit memo/credit memo journal;

 

(o)           as soon as possible and in any event within 20 days of filing thereof, copies of all tax returns filed by any Loan Party with the U.S. Internal Revenue Service or any Canadian tax authority;

 

(p)           within 20 days of the first Business Day of each March and September, a certificate of good standing for each Loan Party from the appropriate governmental officer in its jurisdiction of incorporation, formation, or organization;

 

(q)           as soon as available but in any event within 20 days of the end of each calendar month, a Perfection Certificate Update prepared as of the close of business on the last Business Day of the preceding calendar month;

 

(r)            promptly following any request therefor, such other information regarding the operations, business affairs and financial condition of each of the Borrowers or any of their

 

115

 

Subsidiaries, or compliance with the terms of this Agreement, as the Administrative Agent or any Lender may reasonably request; and

 

(s)           on or prior to May 2, 2014, the Borrowers shall deliver to the Administrative Agent evidence of the Ansary Related Parties’ ownership of the Senior Notes and the amount of the Senior Notes then outstanding, in form and detail reasonably satisfactory to the Administrative Agent.

 

Section 5.2            Notices of Material Events.  The Borrowers will furnish to the Administrative Agent and each Lender prompt written notice of the following:

 

(a)           the occurrence of any Default;

 

(b)           receipt of any notice of any governmental investigation or any litigation or proceeding commenced or threatened against any Loan Party that (i) seeks damages in excess of $5,000,000, (ii) seeks injunctive relief, (iii) is asserted or instituted against any Plan, its fiduciaries or its assets, (iv) alleges criminal misconduct by any Loan Party, (v) alleges the violation of any law regarding, or seeks remedies in connection with, any Environmental Laws, (vi) contests any tax, fee, assessment, or other governmental charge in excess of $1,000,000, or (vii) involves any product recall;

 

(c)           incurrence of any Lien (other than Permitted Encumbrances) or claim made or asserted against any of the Collateral;

 

(d)           any loss, damage, or destruction to the Collateral in the amount of $2,500,000 or more, whether or not covered by insurance;

 

(e)           any and all default notices received under or with respect to any leased location or public warehouse where Collateral is located (which shall be delivered within two Business Days after receipt thereof);

 

(f)            all material amendments to the agreements and contracts listed on Schedule 3.12, together with a copy of each such amendment;

 

(g)           the fact that a Loan Party has entered into a Swap Agreement or an amendment to a Swap Agreement, together with copies of all agreements evidencing such Swap Agreement or amendments thereto (which shall be delivered within two Business Days);

 

(h)           the occurrence of any ERISA Event that, alone or together with any other ERISA Events that have occurred, could reasonably be expected to result in liability of the Borrowers and their Subsidiaries in an aggregate amount exceeding $1,000,000; and

 

(i)            any other development that results in, or could reasonably be expected to result in, a Material Adverse Effect.

 

Each notice delivered under this Section shall be accompanied by a statement of a Financial Officer or other Responsible Officer of each of the Borrower Representatives setting forth the

 

116

 

details of the event or development requiring such notice and any action taken or proposed to be taken with respect thereto.

 

Section 5.3            Existence; Conduct of Business.  Each Loan Party will, and will cause each Subsidiary to, (a) do or cause to be done all things necessary to preserve, renew and keep in full force and effect its legal existence and the rights, qualifications, licenses, permits, franchises, governmental authorizations, intellectual property rights, licenses and permits material to the conduct of its business, and maintain all requisite authority to conduct its business in each jurisdiction in which its business is conducted, where the failure to perform such obligations, individually or in the aggregate, could not reasonably be expected to result in a Material Adverse Effect; provided that the foregoing shall not prohibit (i) any merger, consolidation, liquidation or dissolution permitted under Section 6.3 or (ii) the Company from converting from a limited liability company to a corporation in the State of Delaware so long as the Company provides the Administrative Agent with at least ten (10) Business Days’ written notice before such conversion and (b) carry on and conduct its business in substantially the same manner and in substantially the same fields of enterprise as it is presently conducted.

 

Section 5.4            Payment of Obligations.  Each Loan Party will, and will cause each Subsidiary to, pay or discharge all Material Indebtedness and all other material liabilities and obligations, including Taxes, before the same shall become delinquent or in default, except where (a) the validity or amount thereof is being contested in good faith by appropriate proceedings, (b) such Loan Party or such Subsidiary has set aside on its books adequate reserves with respect thereto in accordance with GAAP, and (c) none of the Collateral becomes subject to forfeiture or loss as a result of the contest.

 

Section 5.5            Maintenance of Properties.  Each Loan Party will, and will cause each Subsidiary to, keep and maintain all property material to the conduct of its business in good working order and condition, ordinary wear and tear excepted.

 

Section 5.6            Books and Records; Inspection Rights.  Each Loan Party will, and will cause each Subsidiary to, (a) keep proper books of record and account in which full, true and correct entries are made of all dealings and transactions in relation to its business and activities and (b) permit any representatives designated by any Agent or any Lender (including employees of any Agent, any Lender or any consultants, accountants, lawyers and appraisers retained by any Agent), upon reasonable prior notice, to visit and inspect its properties, to examine and make extracts from its books and records, including environmental assessment reports and Phase I or Phase II studies, and to discuss its affairs, finances and condition with its officers and independent accountants, all at such reasonable times and as often as reasonably requested.  After the occurrence and during the continuance of any Event of Default, each Loan Party shall provide each Agent and each Lender with access to its suppliers.  The Loan Parties acknowledge that any Agent, after exercising its rights of inspection, may prepare and distribute to the Lenders certain Reports pertaining to the Loan Parties’ assets for internal use by the Agents and the Lenders.

 

Section 5.7            Compliance with Laws.  Each Loan Party will, and will cause each Subsidiary to, comply in all material respects with all Requirements of Law applicable to it or its property.

 

117

 

Section 5.8            Use of Proceeds.  The proceeds of the Revolving Loans will be used only to finance the working capital needs of the Borrowers, for general corporate purposes of the Borrowers and their Subsidiaries in the ordinary course of business, to refinance certain existing Indebtedness (including Senior Notes) to the extent permitted hereunder, to finance the Transactions and expenses incurred in connection therewith, to finance the Permitted Acquisitions and other uses acceptable to the Administrative Agent and the Canadian Administrative Agent.  No part of the proceeds of any Loan and no Letter of Credit will be used, whether directly or indirectly, for any purpose that entails a violation of any of the Regulations of the Board, including Regulations T, U and X.

 

Section 5.9            Insurance.  Each Loan Party will, and will cause each Subsidiary to, maintain with financially sound and reputable carriers having a financial strength rating of at least A by A.M. Best Company (a) insurance in such amounts (with no greater risk retention) and against such risks (including loss or damage by fire and loss in transit; theft, burglary, pilferage, larceny, embezzlement, and other criminal activities; business interruption; flood; and general liability) and such other hazards, as is customarily maintained by companies of established repute engaged in the same or similar businesses operating in the same or similar locations and (b) all insurance required pursuant to the Collateral Documents.  The Borrowers will furnish to the Lenders, upon request of any Agent, information in reasonable detail as to the insurance so maintained.

 

Section 5.10         Casualty and Condemnation.  The Borrowers (a) will furnish to the Agents and the Lenders prompt written notice of any casualty or other insured damage to any material portion of the Collateral or the commencement of any action or proceeding for the taking of any material portion of the Collateral or interest therein under power of eminent domain or by condemnation or similar proceeding and (b) will ensure that the Net Proceeds of any such event (whether in the form of insurance proceeds, condemnation awards or otherwise) are collected and applied in accordance with the applicable provisions of this Agreement and the Collateral Documents.

 

Section 5.11         Field Examinations.  At any time that the Administrative Agent requests, the Borrowers and the Subsidiaries will provide the Administrative Agent, at the sole expense of the Borrowers, reports of a collateral field examiner approved by the Administrative Agent (which may be the Administrative Agent or an affiliate thereof) with respect to all of the components of the US Borrowing Base, the Export-Related Borrowing Base and the Canadian Borrowing Base and such other matters regarding the Loan Parties or the Collateral as the Administrative Agent shall reasonably require.  Without limiting the foregoing right of the Administrative Agent to require a field examination/borrowing base audit at any time, as of the date of this Agreement it is anticipated that one field examination/borrowing base audit per fiscal year will be conducted.  The Borrowers shall pay all costs for each examination required pursuant to this Section 5.11 (including, without limitation, all reasonable travel and out of pocket costs) in accordance with the Administrative Agent’s, such Affiliates’ or any such third party’s fee schedule in effect from time to time.

 

118

 

Section 5.12         Appraisals.

 

(a)           At any time that the Administrative Agent requests, the Borrowers and the Subsidiaries will provide the Administrative Agent with appraisals or updates thereof of their Inventory, including, without limitation, Inventory consisting of rental equipment and rolling stock, from an appraiser selected and engaged by the Administrative Agent, and prepared on a basis satisfactory to the Administrative Agent, such appraisals and updates to include, without limitation, information required by applicable law and regulations.  Without limiting the foregoing right of the Administrative Agent to require an inventory appraisal at any time, as of the date of this Agreement it is anticipated that one inventory appraisal per fiscal year will be conducted.

 

(b)           The Administrative Agent and the Canadian Administrative Agent shall have received an appraisal of the Borrowers’ owned Real Property and equipment to the extent such Real Property and equipment is to be included in the Canadian Fixed Asset Component or the US Fixed Asset Component (as applicable) from a firm(s) satisfactory to the Administrative Agent and the Canadian Administrative Agent and prepared on a basis satisfactory to the Administrative Agent and Canadian Administrative Agent, which appraisals shall include information required by applicable laws and regulations, including, without limitation, such form and substance as is required under the rules, statutes and/or policies of the Financial Institutions Reform Recovery and Enforcement Act (FIRREA) for the Real Property appraisals.  Appraisals received under this paragraph shall be used by the Administrative Agent and the Canadian Administrative Agent to establish the amount of the Canadian Fixed Asset Component or the US Fixed Asset Component (as applicable); provided that to the extent the Administrative Agent and the Canadian Administrative Agent have not received such appraisals on or prior to March 31, 2012, the Canadian Fixed Asset Component and the US Fixed Asset Component shall continue to equal $0 for the duration of this Agreement.

 

Section 5.13         Depository Bank.  The Borrowers and each Subsidiary will maintain the Administrative Agent and the Canadian Administrative Agent as their principal depository banks, including for the maintenance of operating, administrative, cash management, collection activity, and other deposit accounts for the conduct of its business.

 

Section 5.14         Additional Collateral; Further Assurances.

 

(a)           Subject to applicable law, the Borrowers and each Subsidiary that is a Loan Party shall cause each of its US Subsidiaries or Canadian Subsidiaries formed or acquired after the date of this Agreement in accordance with the terms of this Agreement to become a Loan Party by executing the Joinder Agreement set forth as Exhibit F hereto (the “Joinder Agreement”).  Upon execution and delivery thereof, each such Person (i) shall automatically become (x) with respect to a US Subsidiary formed or acquired after the date of this Agreement (or any other US Subsidiary which is wholly owned by a US Borrower and approved by the Administrative Agent to become a US Borrower in the Administrative Agent’s Permitted Discretion), a US Borrower, (y) with respect to a Canadian Subsidiary formed or acquired after the date of this Agreement (or any other wholly owned Canadian Subsidiary approved by the Administrative Agent to become a Canadian Borrower in the Administrative Agent’s Permitted Discretion), a Canadian Borrower, or (z) with respect to any other Person, a Loan Guarantor hereunder and thereupon shall have all of the rights, benefits, duties, and obligations in such capacity under the Loan Documents and (ii) will grant Liens to the US Collateral Agent or the

 

119

 

Canadian Collateral Agent (as applicable), for the benefit of the Agents, the Lenders, the Export-Related Lender and the Other Secured Parties, in any property of such Loan Party which constitutes Collateral, including any parcel of Real Property located in the U.S. or Canada and owned by any Loan Party.

 

(b)           The US Borrowers and each of their US Subsidiaries that is a Loan Party will cause (i) 100% of the issued and outstanding Equity Interests in each of its US Subsidiaries and (ii) 65% (or such greater percentage that, due to a change in applicable law after the date hereof, (A) could not reasonably be expected to cause the undistributed earnings of such foreign Subsidiary as determined for U.S. federal income tax purposes to be treated as a deemed dividend to such foreign Subsidiary’s U.S. parent and (B) could not reasonably be expected to cause any material adverse tax consequences) of the issued and outstanding Equity Interests entitled to vote (within the meaning of Treas. Reg. Section 1.956-2(c)(2)) and 100% of the issued and outstanding Equity Interests not entitled to vote (within the meaning of Treas. Reg. Section 1.956-2(c)(2)) in each foreign Subsidiary directly owned by any US Borrower or any US Subsidiary to be subject at all times to a first priority, perfected Lien in favor of the US Collateral Agent pursuant to the terms and conditions of the Loan Documents or other security documents as the US Collateral Agent shall reasonably request.  The Canadian Borrowers and each of their Canadian Subsidiaries that is a Loan Party will cause 100% of the issued and outstanding Equity Interests in each of its Canadian Subsidiaries to be subject at all times to a first priority, perfected Lien in favor of the Canadian Collateral Agent pursuant to the terms and conditions of the Loan Documents or other security documents as the Canadian Collateral Agent shall reasonably request.

 

(c)           Without limiting the foregoing, each Loan Party will, and will cause each Subsidiary to, execute and deliver, or cause to be executed and delivered, to the US Collateral Agent or the Canadian Collateral Agent (as applicable) such documents, agreements and instruments, and will take or cause to be taken such further actions (including the filing and recording of financing statements, fixture filings, mortgages, deeds of trust, debentures and other documents and such other actions or deliveries of the type required by Section 4.1, as applicable), which may be required by law or which the US Collateral Agent or the Canadian Collateral Agent (as applicable) may, from time to time, reasonably request to carry out the terms and conditions of this Agreement and the other Loan Documents and to ensure perfection and priority of the Liens created or intended to be created by the Collateral Documents, all at the expense of the Loan Parties.  Notwithstanding the foregoing, at any time after an Event of Default has occurred, each Loan Party will, upon the request of the Administrative Agent, cause each foreign Subsidiary to become a Loan Party and a Loan Guarantor and to grant Liens to the US Collateral Agent or the Canadian Collateral Agent (as applicable) on its assets and have the balance of its Equity Interests pledged to the US Collateral Agent or the Canadian Collateral Agent (as applicable).

 

(d)           If any material assets (including any Real Property or improvements thereto or any interest therein) are acquired by the Borrowers or any Subsidiary that is a Loan Party after the Effective Date (other than assets constituting Collateral under the Security Agreements that become subject to the Lien in favor of the Security Agreements upon acquisition thereof), the applicable Borrower Representative will notify the Administrative Agent, the Canadian Administrative Agent and the Lenders thereof, and, if requested by the

 

120

 

Administrative Agent, the Canadian Administrative Agent or the Required Lenders, the Borrowers will cause such assets to be subjected to a Lien securing the Secured Obligations and will take, and cause the Subsidiary Loan Parties to take, such actions as shall be necessary or reasonably requested by the US Collateral Agent or the Canadian Collateral Agent (as applicable) to grant and perfect such Liens, including actions described in Section 5.14(c), all at the expense of the Loan Parties.

 

Section 5.15         Post-closing Deliveries.  On or prior to the date that is ninety (90) days following the Effective Date, the Borrowers shall deliver, or cause to be delivered, to the Administrative Agent:

 

(a)           mortgages, deeds of trust, financing statements or other instruments, all in form and substance satisfactory to the Administrative Agent (and executed and acknowledged where necessary or appropriate for recording),  creating a valid Lien on the Real Property owned by EMDSI;

 

(b)           for all Real Property owned by the Borrowers on the Effective Date, which is subject to a Mortgage on the Effective Date or shall be subject to a Mortgage after the Effective Date pursuant to clause (a) above, (i) a policy or policies of flood insurance in amounts acceptable to the Administrative Agent based on all FEMA flood determinations received by the Administrative Agent after the Effective Date and issued by a nationally recognized insurance company, together with such endorsements, coinsurance, and reinsurance as may reasonably be requested by the Administrative Agent and available in the state in which the Real Property of any Borrower is located, (ii) a policy or policies of title insurance in amounts reasonably acceptable to the Administrative Agent and the Canadian Administrative Agent, as applicable, and issued by a nationally recognized insurance company, together with such endorsements, coinsurance, and reinsurance as may reasonably be requested by the Administrative Agent and the Canadian Administrative Agent, as applicable, and available in the state or province in which the Real Property of any Borrower is located, insuring the Lien created by any Mortgage as a first lien on such Real Property (subject to Permitted Encumbrances of the type described in clauses (a) to (c) and (f) of the definition thereof, subject to the provisos at the end of such definition) in such amount(s) as may be reasonably determined by Administrative Agent and the Canadian Administrative Agent, as applicable, and the to the extent any and all existing title policies do not provide sufficient coverage and taking into account (x) any appraisals received by Administrative Agent and the Canadian Administrative Agent after the Effective Date, (y) the Fixed Asset Component Limit and (z) the coverage available under all title policies provided to the Administrative Agent and the Canadian Administrative Agent, (iii) modification and/ or down date endorsement(s) to any existing title policies with respect to the modification of any deed of trust or mortgage, and (iv) such other documents, abstracts, appraisals, environmental site assessments and legal opinions as reasonably requested by the Administrative Agent and the Canadian Administrative Agent, as applicable, in each case in form and substance satisfactory to the Administrative Agent and the Canadian Administrative Agent, as applicable; and

 

(c)           an amendment to the vendor subordination letter agreement between SSPP, Deutz and US Collateral Agent dated as of June 29, 2006 to extend the expiration date of such letter agreement from January 26, 2013 to a date no earlier than December 23, 2017.

 

121

 

The Borrowers’ failure to comply with any requirement of this Section 5.15 on or before ninety (90) days after the Effective Date shall constitute an immediate Event of Default.

 

ARTICLE VI
 NEGATIVE COVENANTS

 

Until the Commitments have expired or terminated and the principal of and interest on each Loan and all fees, expenses and other amounts payable under any Loan Document have been paid in full and all Letters of Credit have expired or terminated and all LC Disbursements shall have been reimbursed, the Loan Parties covenant and agree, jointly and severally, with the Lenders that:

 

Section 6.1            Indebtedness.  No Loan Party will, nor will it permit any Subsidiary to, create, incur or suffer to exist any Indebtedness, except:

 

(a)           the Secured Obligations;

 

(b)           Indebtedness existing on the date hereof and set forth in Schedule 6.1 and extensions, renewals and replacements of any such Indebtedness in accordance with Section 6.1(f) hereof;

 

(c)           (i) Indebtedness of any US Borrower to any US Subsidiary and of any US Subsidiary to any US Borrower or any other US Subsidiary, or (ii) Indebtedness of any Canadian Borrower to any Canadian Subsidiary and of any Canadian Subsidiary to any Canadian Borrower or any other Canadian Subsidiary, provided that (A) Indebtedness of any Subsidiary that is not a Loan Party to a Borrower or any Subsidiary that is a Loan Party shall be subject to Section 6.4 and (B) Indebtedness of any Borrower to any Subsidiary and Indebtedness of any Subsidiary that is a Loan Party to any Subsidiary that is not a Loan Party shall be subordinated to the Secured Obligations on terms reasonably satisfactory to the Administrative Agent;

 

(d)           (i) Guarantees by the US Borrowers of Indebtedness of any US Subsidiary and by any US Subsidiary of Indebtedness of a US Borrower or any other US Subsidiary, or (ii) Guarantees by the Canadian Borrowers of Indebtedness of any Canadian Subsidiary and by any Canadian Subsidiary of Indebtedness of a Canadian Borrower or any other Canadian Subsidiary, provided that (A) the Indebtedness so Guaranteed is permitted by this Section 6.1, (B) Guarantees by the Borrowers or any Subsidiary that is a Loan Party of Indebtedness of any Subsidiary that is not a Loan Party shall be subject to Section 6.4 and (iii) Guarantees permitted under this Section 6.1(d) shall be subordinated to the Secured Obligations of the applicable Subsidiary on the same terms as the Indebtedness so Guaranteed is subordinated to the Secured Obligations;

 

(e)           Indebtedness of the Borrowers or any Subsidiary incurred to finance the acquisition, construction or improvement of any fixed or capital assets (whether or not constituting purchase money Indebtedness), including Capital Lease Obligations and any Indebtedness assumed in connection with the acquisition of any such assets or secured by a Lien on any such assets prior to the acquisition thereof, and extensions, renewals and replacements of any such Indebtedness in accordance with Section 6.1(f) hereof; provided that (i) such Indebtedness is incurred prior to or within 90 days after such acquisition or the completion of

 

122

 

such construction or improvement, and (ii) the aggregate principal amount of Indebtedness permitted by Section 6.1(e), Section 6.1(k), Section 6.1(l) and Section 6.1(m) shall not exceed $125,000,000 at any time outstanding;

 

(f)            Indebtedness which represents an extension, refinancing, or renewal of any of the Indebtedness described in Section 6.1(b) and Section 6.1(e) hereof; provided that, (i) any Liens securing such Indebtedness are not extended to any additional property of any Loan Party, (ii) no Loan Party that is not originally obligated with respect to repayment of such Indebtedness is required to become obligated with respect thereto, (iii) such extension, refinancing or renewal does not result in a shortening of the average weighted maturity of the Indebtedness so extended, refinanced or renewed, (iv) the terms of any such extension, refinancing, or renewal are not less favorable to the obligor thereunder than the original terms of such Indebtedness and (v) if the Indebtedness that is refinanced, renewed, or extended was subordinated in right of payment to any of the Secured Obligations, then the terms and conditions of the refinancing, renewal, or extension Indebtedness must include subordination terms and conditions that are at least as favorable to the Administrative Agent, the Canadian Administrative Agent and the Lenders as those that were applicable to the refinanced, renewed, or extended Indebtedness;

 

(g)           Indebtedness owed to any person providing workers’ compensation, health, disability or other employee benefits or property, casualty or liability insurance, pursuant to reimbursement or indemnification obligations to such person, in each case incurred in the ordinary course of business;

 

(h)           Indebtedness of the Borrowers or any Subsidiary in respect of performance bonds, bid bonds, appeal bonds, surety bonds and similar obligations, in each case provided in the ordinary course of business;

 

(i)            Indebtedness evidenced by the Senior Notes and Guarantees in respect of the Indebtedness evidenced by the Senior Notes; provided  that such Senior Notes are not guaranteed by any Subsidiary of any Borrower which is not either a Borrower or a Loan Guarantor which has guaranteed the Obligations pursuant to the Loan Guaranty;

 

(j)            Indebtedness consisting of advance payments by customers under purchase contracts in the ordinary course of business of the Borrowers;

 

(k)           Indebtedness secured by Liens described in Section 6.2(e); provided that  the aggregate principal amount of Indebtedness permitted by Section 6.1(e), Section 6.1(k), Section 6.1(l) and Section 6.1(m) shall not exceed $125,000,000 at any time outstanding;

 

(l)            Indebtedness incurred in connection with financing of Real Property owned by a Borrower, together with the fixtures thereon, or of Equipment owned by a Borrower; provided that the aggregate principal amount of Indebtedness permitted by Section 6.1(e), Section 6.1(k), Section 6.1(l) and Section 6.1(m) shall not exceed $125,000,000 at any time outstanding; and

 

123

 

(m)          other secured or unsecured Indebtedness; provided that the aggregate principal amount of Indebtedness permitted by Section 6.1(e), Section 6.1(k), Section 6.1(l) and Section 6.1(m) shall not exceed $125,000,000 at any time outstanding;

 

provided, that, the Indebtedness of a Person (other than a Loan Party or an Affiliate of a Loan Party) that is repaid either contemporaneously with or immediately after giving effect to the closing of the acquisition of such Person or the assets of such Person which are encumbered by such Indebtedness shall not constitute Indebtedness for purposes of this Section 6.1.

 

provided, further, that, the aggregate principal amount of Indebtedness under the Export-Related Financing Documents shall not exceed $25,000,000 at any time outstanding and the Export-Related Loan Agreement and other Export-Related Financing Documents shall be on terms and conditions acceptable to the Administrative Agent, in its Permitted Discretion.

 

Section 6.2            Liens.  No Loan Party will, nor will it permit any Subsidiary to, create, incur, assume or permit to exist any Lien on any property or asset now owned or hereafter acquired by it, or assign or sell any income or revenues (including accounts receivable) or rights in respect of any thereof, except:

 

(a)           Liens created pursuant to any Loan Document;

 

(b)           Permitted Encumbrances;

 

(c)           any Lien on any property or asset of the Borrowers or any Subsidiary existing on the date hereof and set forth in Schedule 6.2; provided that (i) such Lien shall not apply to any other property or asset of the Borrowers or Subsidiary and (ii) such Lien shall secure only those obligations which it secures on the date hereof and extensions, renewals and replacements thereof that do not increase the outstanding principal amount thereof;

 

(d)           Liens on fixed or capital assets acquired, constructed or improved by the Borrowers or any Subsidiary (which shall expressly exclude rental equipment); provided that (i) such security interests secure Indebtedness permitted by Section 6.1(e), (ii) such security interests and the Indebtedness secured thereby are incurred prior to or within 90 days after such acquisition or the completion of such construction or improvement, (iii) the Indebtedness secured thereby does not exceed 100% of the cost of acquiring, constructing or improving such fixed or capital assets and (iv) such security interests shall not apply to any other property or assets of the Borrowers or Subsidiary;

 

(e)           any Lien existing on any property or asset (other than Accounts and Inventory) prior to the acquisition thereof by the Borrowers or any Subsidiary or existing on any property or asset (other than Accounts and Inventory) of any Person that becomes a Loan Party after the date hereof prior to the time such Person becomes a Loan Party; provided that (i) such Lien is not created in contemplation of or in connection with such acquisition or such Person becoming a Loan Party, as the case may be, (ii) such Lien shall not apply to any other property or assets of the Loan Party and (iii) such Lien shall secure only those obligations which it secures on the date of such acquisition or the date such Person becomes a Loan Party, as the case may be and extensions, renewals and replacements thereof that do not increase the outstanding principal amount thereof;

 

124

 

(f)            Liens of a collecting bank arising in the ordinary course of business under Section 4.208 of the Uniform Commercial Code in effect in the relevant jurisdiction covering only the items being collected upon;

 

(g)           Liens on Real Property, together with the fixtures thereon, and on Equipment, in each case arising out of sale and leaseback transactions permitted by Section 6.6 or financing transactions permitted by Section 6.1(l);

 

(h)           Liens granted by a Subsidiary that is not a Loan Party in favor of the Borrowers or another Loan Party in respect of Indebtedness owed by such Subsidiary; and

 

(i)            Liens to secure other Indebtedness as permitted under Section 6.1(m).

 

Notwithstanding the foregoing, none of the Liens permitted pursuant to this Section 6.2 may at any time attach to any Loan Party’s (i) Accounts, other than those permitted under clause (a) of the definition of Permitted Encumbrance and Section 6.2(a) above, (ii) Inventory, other than Permitted Senior Encumbrances and Section 6.2(a) above and (iii) other assets included in the Fixed Asset Component of each Borrower, other than Permitted Senior Encumbrances.

 

Section 6.3            Fundamental Changes.

 

(a)           No Loan Party will, nor will it permit any Subsidiary to, merge into or consolidate with any other Person, or permit any other Person to merge into or consolidate with it, or liquidate or dissolve, except that, if at the time thereof and immediately after giving effect thereto no Event of Default shall have occurred and be continuing (i) any Borrower and any Subsidiary of a Borrower may merge into a Borrower in a transaction in which a Borrower is the surviving Person, provided that if one of the parties is the Company, the Company is the surviving Person, (ii) any Loan Party (other than a Borrower) may merge into any Loan Party in a transaction in which the surviving entity is a Loan Party and (iii) any Subsidiary that is not a Loan Party may liquidate or dissolve if the Borrowers determine in good faith that such liquidation or dissolution is in the best interests of the Borrowers and is not materially disadvantageous to the Lenders; provided that any such merger involving a Person that is not a wholly owned Subsidiary immediately prior to such merger shall not be permitted unless also permitted by Section 6.4; and provided, further, that no US Borrower or US Subsidiary shall merge with or into any Canadian Borrower or Canadian Subsidiary unless such US Borrower or US Subsidiary is the surviving entity.

 

(b)           No Loan Party will, nor will it permit any of its Subsidiaries to, engage in any business other than businesses of the type conducted by the Borrowers and their Subsidiaries on the date of execution of this Agreement and businesses reasonably related thereto.

 

(c)           No Loan Party will change the end of its fiscal year to be something other than the last day of January of each year.

 

Section 6.4            Investments, Loans, Advances, Guarantees and Acquisitions.  No Loan Party will, nor will it permit any Subsidiary to, purchase, hold or acquire (including pursuant to any merger with any Person that was not a Loan Party and a wholly owned Subsidiary prior to such merger) any capital stock, evidences of indebtedness or other securities

 

125

 

(including any option, warrant or other right to acquire any of the foregoing) of, make or permit to exist any loans or advances to, Guarantee any obligations of, or make or permit to exist any investment or any other interest in, any other Person, or purchase or otherwise acquire (in one transaction or a series of transactions) any assets of any other Person constituting a business unit (whether through purchase of assets, merger or otherwise), except:

 

(a)           Permitted Investments, subject to control agreements in favor of the US Collateral Agent or the Canadian Collateral Agent (as applicable) for the benefit of the applicable Lenders or otherwise subject to a perfected security interest in favor of the US Collateral Agent or the Canadian Collateral Agent (as applicable) for the benefit of the applicable Lenders;

 

(b)           investments in existence on the date of this Agreement and described in Schedule 6.4;

 

(c)           investments by any Borrower and the Subsidiaries in Equity Interests in their respective Subsidiaries, provided that (i) any such Equity Interests held by a Loan Party shall be pledged pursuant to the Security Agreements (subject to the limitations applicable to common stock of a foreign Subsidiary referred to in Section 5.13), (ii) the aggregate amount of investments by Loan Parties in Subsidiaries that are not Loan Parties shall not exceed $20,000,000 at any time outstanding (in each case determined without regard to any write-downs or write-offs), and (iii) the aggregate amount of such investments from US Loan Parties in Canadian Loan Parties shall not exceed $20,000,000 at any time outstanding.

 

(d)           loans or advances made by any Borrower to any Subsidiary and made by any Subsidiary to any Borrower or any other Subsidiary, provided that (i) any such loans and advances made by a Loan Party shall be evidenced by a promissory note pledged pursuant to the Security Agreements, (ii) the aggregate amount of such loans and advances made by Loan Parties to Subsidiaries that are not Loan Parties shall not exceed $20,000,000 at any time outstanding (in each case determined without regard to any write-downs or write-offs), and (iii) the aggregate amount of such loans and advances from US Loan Parties to Canadian Loan Parties shall not exceed $20,000,000 at any time outstanding;

 

(e)           Guarantees constituting Indebtedness permitted by Section 6.1, provided that (i) the aggregate principal amount of Indebtedness of Subsidiaries that are not Loan Parties that is Guaranteed by any Loan Party shall not exceed $20,000,000 at any time outstanding (in each case determined without regard to any write-downs or write-offs), and (ii) the aggregate principal amount of such Indebtedness owing by Canadian Loan Parties that is Guaranteed by US Loan Parties shall not exceed $10,000,000 at any time outstanding;

 

(f)            loans or advances made by a Loan Party to its employees on an arms-length basis in the ordinary course of business consistent with past practices for travel and entertainment expenses, relocation costs and similar purposes up to a maximum of $1,000,000 to any employee and up to a maximum of $5,000,000 in the aggregate at any time outstanding;

 

(g)           subject to Sections 4.2(a) and 4.4 of the US Security Agreement and the corresponding provisions of the Canadian Security Agreement, notes payable, or stock or other

 

126

 

securities issued by Account Debtors to a Loan Party pursuant to negotiated agreements with respect to settlement of such Account Debtor’s Accounts in the ordinary course of business, consistent with past practices;

 

(h)           investments in the form of Swap Agreements permitted by Section 6.7;

 

(i)            investments of any Person existing at the time such Person becomes a Subsidiary of a Borrower or consolidates or merges with a Borrower or any of the Subsidiaries (including in connection with a Permitted Acquisition) so long as such investments were not made in contemplation of such Person becoming a Subsidiary or of such merger;

 

(j)            accounts receivable, security deposits and prepayments arising and trade credit granted in the ordinary course of business and any assets or securities, in each case, received in satisfaction or partial satisfaction thereof from financially troubled account debtors to the extent reasonably necessary in order to prevent or limit loss and any prepayments and other credits to suppliers made in the ordinary course of business;

 

(k)           investments constituting Permitted Acquisitions; provided, that no investment, loan or advance in or to any Person created or acquired pursuant to such Permitted Acquisition which is not a Loan Party will be permitted except to the extent such Investment is permitted pursuant to Section 6.4(c) or (d), as applicable;

 

(l)            investments received in connection with the dispositions of assets permitted by Section 6.5; and

 

(m)          investments constituting deposits described in clauses (c) and (d) of the definition of the term “Permitted Encumbrances”.

 

Section 6.5            Asset Sales.  No Loan Party will, nor will it permit any Subsidiary to, sell, transfer, lease or otherwise dispose of any Property, including any Equity Interest owned by it, nor will the Borrowers permit any Subsidiary to issue any additional Equity Interest in such Subsidiary (other than to a Borrower or another Subsidiary in compliance with Section 6.4), except:

 

(a)           sales, transfers and dispositions of (i) inventory in the ordinary course of business and (ii) used, obsolete, worn out or surplus equipment or property in the ordinary course of business;

 

(b)           sales, transfers and dispositions (i) to any US Borrower, (ii) to any Canadian Borrower by any other Canadian Loan Party, or (iii) to any Subsidiary, provided that any such sales, transfers or dispositions from a US Loan Party to any Canadian Subsidiary or a Subsidiary that is not a Loan Party shall be made in compliance with Section 6.9;

 

(c)           sales, transfers and dispositions of accounts receivable in connection with the compromise, settlement or collection thereof;

 

(d)           sales, transfers and dispositions of Permitted Investments in the ordinary course of business and investments permitted by Section 6.4(i) and Section 6.4(m);

 

127

 

(e)           sale and leaseback transactions permitted by Section 6.6;

 

(f)            dispositions resulting from any casualty or other insured damage to, or any taking under power of eminent domain or by condemnation or similar proceeding of, any property or asset of any Borrower or any Subsidiary;

 

(g)           sales, transfers and other dispositions of assets (other than Equity Interests in a Subsidiary unless all Equity Interests in such Subsidiary are sold) that are not permitted by any other paragraph of this Section, provided that the aggregate fair market value of all assets sold, transferred or otherwise disposed of in reliance upon this Section 6.5(g) shall not exceed (i) $15,000,000 during any fiscal year of the Company and (ii) $75,000,000 during the term of this Agreement; and

 

(h)           Permitted Fixed Asset Dispositions of Real Property, together with fixtures thereon, or Equipment so long as at the time of any such sale and immediately after giving effect thereto no Event of Default shall have occurred and be continuing;

 

provided that all sales, transfers, leases and other dispositions permitted hereby (other than those permitted by Section 6.5(b) and Section 6.5(f) above) shall be made for fair value and for only cash consideration, provided, that, sale and leaseback transactions permitted under Section 6.5(h) and Section 6.6 shall be made for cash consideration in an amount not less than 85% of the fair value of such fixed or capital asset.

 

Section 6.6            Sale and Leaseback Transactions.  No Loan Party will, nor will it permit any Subsidiary to, enter into any arrangement, directly or indirectly, whereby it shall sell or transfer any property, real or personal, used or useful in its business, whether now owned or hereafter acquired, and thereafter rent or lease such property or other property that it intends to use for substantially the same purpose or purposes as the property sold or transferred, except for Permitted Fixed Asset Dispositions or any sale of any other fixed or capital assets by any Borrower or any Subsidiary that is made for cash consideration in an amount not less than 85% of the fair value of such fixed or capital asset.

 

Section 6.7            Swap Agreements.  No Loan Party will, nor will it permit any Subsidiary to, enter into any Swap Agreement, except (a) Swap Agreements entered into to hedge or mitigate risks to which the Loan Parties have actual exposure (other than those in respect of Equity Interests in any Borrower or any of its Subsidiaries), and (b) Swap Agreements entered into in order to effectively cap, collar or exchange interest rates (from fixed to floating rates, from one floating rate to another floating rate or otherwise) with respect to any interest-bearing liability or investment of any Loan Party.

 

Section 6.8            Restricted Payments; Certain Payments of Indebtedness.

 

(a)           No Loan Party will, nor will it permit any Subsidiary to, declare or make, or agree to pay or make, directly or indirectly, any Restricted Payment, or incur any obligation (contingent or otherwise) to do so, except (i) each Borrower may declare and pay dividends with respect to its Equity Interests payable solely in additional Equity Interests, (ii) Subsidiaries may declare and pay dividends or other distributions ratably with respect to their Equity Interests, (iii) so long as there exists no Default or Event of Default, the Borrowers may make Restricted

 

128

 

Payments pursuant to and in accordance with Equity Interest option plans or other benefit plans for management or employees of the Borrowers and their Subsidiaries, (iv) so long as there exists no Default or Event of Default and the Company is a “flow through” or “disregarded” entity for United States federal income tax purposes, the Company may pay dividends or make distributions to its members in an aggregate amount not greater than the amount necessary for such members (or, if any such member is a “flow through” or “disregarded” entity for United States federal income tax purposes, the members of such member) to pay their actual state and United States federal, state and local income tax liabilities in respect of income earned by the Borrowers, and (v) the Company shall be permitted to pay dividends and distributions; provided, that such dividends and distribution shall only be permitted if (1) there exists no Default or Event of Default, (2) the Fixed Charge Coverage Ratio for the Borrowers (after giving effect to such dividend and distribution) would not be less than 1.25 to 1 for the most recently completed twelve month period assuming that for purposes of calculating the Fixed Charge Coverage Ratio for such period (calculated on a pro forma basis in a manner acceptable to the Administrative Agent) such dividends and distributions occurred on the first day of such applicable period, and (3) immediately after giving effect to the payment of any such dividends and distributions and for the next succeeding twelve month period, Availability will not be less than the greater of (i) $25,000,000 or (ii) 10% of the US Revolving Commitments at such time, in each case, on a pro forma basis (calculated in a manner acceptable to the Administrative Agent and assuming all past due accounts payable of the Borrowers have been paid in full in cash at the time of such payment and no accounts payable of the Borrowers are allowed to become past due during such twelve month period thereafter).

 

(b)           No Loan Party will, nor will it permit any Subsidiary to, make or agree to pay or make, directly or indirectly, any payment or other distribution (whether in cash, securities or other property) of or in respect of principal of or interest on any Indebtedness, or any payment or other distribution (whether in cash, securities or other property), including any sinking fund or similar deposit, on account of the purchase, redemption, retirement, acquisition, cancellation or termination of any Indebtedness, except:

 

(i)            payment of Indebtedness created under the Loan Documents;

 

(ii)           payment of regularly scheduled interest and principal payments as and when due in respect of any Indebtedness, other than payments in respect of the Subordinated Indebtedness prohibited by the subordination provisions thereof;

 

(iii)          refinancings of Indebtedness to the extent permitted by Section 6.1;

 

(iv)          payment of secured Indebtedness that becomes due as a result of the voluntary sale or transfer of the property or assets securing such Indebtedness; and

 

(v)           repayments or repurchases of Senior Notes; provided, that (1) immediately after giving effect to such repayment or repurchase and for the next succeeding twelve month period, Availability will not be less than the greater of (i) $25,000,000 or (ii) 10% of the US Revolving Commitments at such time, in each case, on a pro forma basis (calculated in a manner acceptable to the Administrative Agent and

 

129

 

assuming all past due accounts payable of the Borrowers have been paid in full in cash at the time of such payment and no accounts payable of the Borrowers are allowed to become past due during such twelve month period thereafter), and (2) the Fixed Charge Coverage Ratio for the Borrowers (after giving effect to such repayment or repurchase) would not be less than 1.0 to 1 for the most recently completed twelve month period assuming that for purposes of calculating the Fixed Charge Coverage Ratio for such period (calculated on a pro forma basis in a manner acceptable to the Administrative Agent) such repayment or repurchase occurred on the first day of such applicable period.

 

Section 6.9            Transactions with Affiliates.  No Loan Party will, nor will it permit any Subsidiary to, sell, lease or otherwise transfer any Property to, or purchase, lease or otherwise acquire any Property from, or otherwise engage in any other transactions with, any of its Affiliates, except (a) transactions that (i) are in the ordinary course of business and (ii) are at prices and on terms and conditions not less favorable to the Borrower or such Subsidiary than could be obtained on an arm’s-length basis from unrelated third parties, (b) transactions between or among (i) any US Borrower and any US Subsidiary that is a Loan Party and not involving any other Affiliate or (ii) any Canadian Borrower and any Canadian Subsidiary that is a Loan Party and not involving another Affiliate, (c) any investment permitted by Section 6.4(c) or Section 6.4(d), (d) any Indebtedness permitted under Section 6.1(c), (e) any Restricted Payment permitted by Section 6.8, (f) loans or advances to employees permitted under Section 6.4, (g) the payment of reasonable fees to directors or managers of any Borrower or any Subsidiary who are not employees of any Borrower or any Subsidiary, and compensation and employee benefit arrangements paid to, and indemnities provided for the benefit of, directors, officers or employees of the Borrowers or their Subsidiaries in the ordinary course of business, (h) any issuances of securities or other payments, awards or grants in cash, securities or otherwise pursuant to, or the funding of, employment agreements, stock options and stock ownership plans approved by any Borrower’s board of directors or managers, as applicable, and (i) payment of compensation to Mr. Hushang Ansary in an aggregate amount of up to $5,000,000 per fiscal year (provided that after the occurrence of a Qualified Public Offering such amount may be increased to whatever amount is approved by the Company’s board of directors) plus reimbursement of all reasonable and customary business expenses of Mr. Hushang Ansary related to the Borrowers.

 

Section 6.10         Restrictive Agreements.  No Loan Party will, nor will it permit any Subsidiary to, directly or indirectly, enter into, incur or permit to exist any agreement or other arrangement that prohibits, restricts or imposes any condition upon (a) the ability of such Loan Party or any of its Subsidiaries to create, incur or permit to exist any Lien upon any of its property or assets, or (b) the ability of any Subsidiary to pay dividends or other distributions with respect to any of its Equity Interests or to make or repay loans or advances to the Borrowers or any other Subsidiary or to Guarantee Indebtedness of the Borrowers or any other Subsidiary; provided that (i) the foregoing shall not apply to restrictions and conditions imposed by law or by any Loan Document or any Export-Related Financing Documents, (ii) the foregoing shall not apply to restrictions and conditions existing on the date hereof identified on Schedule 6.10 (but shall apply to any extension or renewal of, or any amendment or modification expanding the scope of, any such restriction or condition), (iii) the foregoing shall not apply to customary restrictions and conditions contained in agreements relating to the sale of a Subsidiary pending such sale, provided such restrictions and conditions apply only to the Subsidiary that is to be sold and such sale is permitted hereunder, (iv) Section 6.10(a) of the foregoing shall not apply to

 

130

 

restrictions or conditions imposed by any agreement relating to secured Indebtedness permitted by this Agreement if such restrictions or conditions apply only to the property or assets securing such Indebtedness and (v) Section 6.10(a) of the foregoing shall not apply to customary provisions in leases and other contracts restricting the assignment thereof.

 

Section 6.11         Amendment of Material Documents.  No Loan Party will, nor will it permit any Subsidiary to, amend, modify or waive any of its rights under (a) any agreement relating to any Subordinated Indebtedness, (b) its certificate of incorporation, by-laws, operating, management or partnership agreement or other organizational documents or (c) any document, instrument or agreement described on Schedule 3.12 or any document, instrument or agreement executed in connection therewith or pursuant thereto (i) without providing to Administrative Agent at least ten (10) Business Days’ written notice thereof describing in reasonable detail the proposed amendment, modification or waiver, and (ii) to the extent any such amendment, modification or waiver would be adverse to the Lenders or otherwise material.

 

Section 6.12         Operating Leases.  The Borrowers will not, nor will they permit any Subsidiary to, incur, create, assume or become liable as a lessee, or permit any other Loan Party to incur, create, assume or become liable as a lessee, under any lease, sublease, license or similar arrangement (other than related to Capital Lease Obligations) pursuant to which a Person leases, subleases, licenses or otherwise is granted the right to occupy, take possession of, or use Property, other than such leases, subleases, licenses or other arrangements created in the normal course of business consistent with past practices which would not result in the Borrowers and their Subsidiaries’ annual lease expense exceeds $50,000,000.

 

Section 6.13         Fixed Charge Coverage Ratio.  The Borrowers will not permit the Fixed Charge Coverage Ratio to be less than 1.1 to 1.0 for any period of four consecutive fiscal quarters ending on the last day of each such period; provided  that, this covenant shall only be applicable for such periods ending during any Activation Period and for such periods ending on the last day of the fiscal quarter ending immediately prior to any Activation Period.

 

ARTICLE VII
 EVENTS OF DEFAULT

 

If any of the following events (“Events of Default”) shall occur:

 

(a)           the Borrowers shall fail to pay any principal of any Loan or any reimbursement obligation in respect of any LC Disbursement when and as the same shall become due and payable, whether at the due date thereof or at a date fixed for prepayment thereof or otherwise;

 

(b)           the Borrowers shall fail to pay any interest on any Loan or any fee or any other amount (other than an amount referred to in clause (a) of this Article VII) payable under this Agreement, when and as the same shall become due and payable;

 

(c)           any representation or warranty made or deemed made by or on behalf of any Loan Party or any Subsidiary in or in connection with this Agreement or any Loan Document or any amendment or modification thereof or waiver thereunder, or in any report, certificate, financial statement or other document furnished pursuant to or in connection with this

 

131

 

Agreement or any Loan Document or any amendment or modification thereof or waiver thereunder, shall prove to have been materially incorrect when made or deemed made;

 

(d)           any Loan Party shall fail to observe or perform any covenant, condition or agreement contained in Section 5.2(a), Section 5.3 (with respect to a Loan Party’s existence) or Section 5.8, Section 5.15 or in Article VI;

 

(e)           any Loan Party shall fail to observe or perform any covenant, condition or agreement contained in this Agreement (other than those which constitute a default under another Section of this Article), and such failure shall continue unremedied for a period of (i)  5 Business Days after the earlier of such breach or notice thereof from the Administrative Agent or the Canadian Administrative Agent (which notice will be given at the request of any Lender) if such breach relates to terms or provisions of Section 5.1, Section 5.2 (other than Section 5.2(a)), Section 5.6 or Section 5.9 of this Agreement or (ii) 30 days after acquiring actual knowledge or notice thereof from the Administrative Agent or the Canadian Administrative Agent (which notice will be given at the request of any Lender) if such breach relates to terms or provisions of any other Section of this Agreement or any other Loan Document;

 

(f)            any Loan Party or any Subsidiary shall fail to make any payment (whether of principal or interest and regardless of amount) in respect of any Material Indebtedness, when and as the same shall become due and payable after giving effect to applicable grace periods;

 

(g)           any event or condition occurs that results in any Material Indebtedness becoming due prior to its scheduled maturity or that enables or permits (with or without the giving of notice, the lapse of time or both) the holder or holders of any Material Indebtedness or any trustee or agent on its or their behalf to cause any Material Indebtedness to become due, or to require the prepayment, repurchase, redemption or defeasance thereof, prior to its scheduled maturity; provided that this clause (g) shall not apply to secured Indebtedness that becomes due as a result of the voluntary sale or transfer of the property or assets securing such Indebtedness;

 

(h)           an involuntary proceeding shall be commenced or an involuntary petition shall be filed seeking (i) liquidation, reorganization or other relief in respect of a Loan Party or any Subsidiary of any Loan Party or its debts, or of a substantial part of its assets, under any federal, state, province, territory or foreign bankruptcy, insolvency, receivership or similar law now or hereafter in effect or (ii) the appointment of a receiver, trustee, custodian, sequestrator, conservator or similar official for any Loan Party or any Subsidiary of any Loan Party or for a substantial part of its assets, and, in any such case, such proceeding or petition shall continue undismissed for 60 days or an order or decree approving or ordering any of the foregoing shall be entered;

 

(i)            any Loan Party or any Subsidiary of any Loan Party shall (i) voluntarily commence any proceeding or file any petition seeking liquidation, reorganization or other relief under any federal, state, province, territory or foreign bankruptcy, insolvency, receivership or similar law now or hereafter in effect, (ii) consent to the institution of, or fail to contest in a timely and appropriate manner, any proceeding or petition described in clause (h) of this Article VII, (iii) apply for or consent to the appointment of a receiver, trustee, custodian, sequestrator, conservator or similar official for such Loan Party or Subsidiary of any Loan Party or for a

 

132

 

substantial part of its assets, (iv) file an answer admitting the material allegations of a petition filed against it in any such proceeding, (v) make a general assignment for the benefit of creditors or (vi) take any action for the purpose of effecting any of the foregoing;

 

(j)            any Loan Party or any Subsidiary of any Loan Party shall become unable, admit in writing its inability or fail generally to pay its debts as they become due;

 

(k)           one or more judgments for the payment of money in an aggregate amount in excess of $2,500,000 (exclusive of any amounts fully covered by insurance and for which evidence of unconditional coverage acceptance by the insurer, in form and substance satisfactory to the Administrative Agent in its Permitted Discretion, has been delivered to the Administrative Agent) shall be rendered against any Loan Party, any Subsidiary of any Loan Party or any combination thereof and the same shall remain unpaid and undischarged for a period of 30 consecutive days during which execution shall not be effectively stayed, or any action shall be legally taken by a judgment creditor to attach or levy upon any assets of any Loan Party or any Subsidiary of any Loan Party to enforce any such judgment or any Loan Party or any Subsidiary of any Loan Party shall fail within 30 days to discharge one or more non-monetary judgments or orders which, individually or in the aggregate, could reasonably be expected to have a Material Adverse Effect, which judgments or orders, in any such case, are not stayed on appeal or otherwise being appropriately contested in good faith by proper proceedings diligently pursued;

 

(l)            an ERISA Event shall have occurred that, in the opinion of the Required Lenders, when taken together with all other ERISA Events that have occurred, could reasonably be expected to result in liability of the Borrowers and their Subsidiaries in an aggregate amount exceeding $2,500,000 for all periods;

 

(m)          a Change in Control shall occur;

 

(n)           the occurrence of any “default” or “event of default”, as defined in any Loan Document (other than this Agreement) or the breach of any of the terms or provisions of any Loan Document (other than this Agreement), which default or breach continues beyond any period of grace therein provided;

 

(o)           the Loan Guaranty shall fail to remain in full force or effect or any action shall be taken to discontinue or to assert the invalidity or unenforceability of the Loan Guaranty, or any Loan Guarantor shall fail to comply with any of the terms or provisions of the Loan Guaranty to which it is a party, or any Loan Guarantor shall deny that it has any further liability under the Loan Guaranty to which it is a party, or shall give notice to such effect;

 

(p)           any Collateral Document shall for any reason fail to create a valid and perfected first priority security interest in any Collateral purported to be covered thereby, except as permitted by the terms of any Collateral Document, or any Collateral Document shall fail to remain in full force or effect or any action shall be taken to discontinue or to assert the invalidity or unenforceability of any Collateral Document, or any Loan Party shall fail to comply with any of the terms or provisions of any Collateral Document;

 

(q)           any material provision of any Loan Document for any reason ceases to be valid, binding and enforceable in accordance with its terms (or any Loan Party shall challenge

 

133

 

the enforceability of any Loan Document or shall assert in writing, or engage in any action or inaction based on any such assertion, that any provision of any of the Loan Documents has ceased to be or otherwise is not valid, binding and enforceable in accordance with its terms);

 

(r)            any Loan Party is criminally indicted or convicted under any law that may reasonably be expected to lead to a forfeiture of any property of such Loan Party; or

 

(s)           the Borrowers shall fail to maintain Availability equal to or greater than $25,000,000 any time the Availability Block is in effect.

 

then, and in every such event (other than an event with respect to the Borrowers described in clause (h) or (i) of this Article VII), and at any time thereafter during the continuance of such event, the Administrative Agent and the Canadian Administrative Agent may, and at the request of the Required Lenders shall, by notice to a Borrower Representative, take either or both of the following actions, at the same or different times:  (i) terminate the Commitments, and thereupon the Commitments shall terminate immediately, (ii) declare the Loans then outstanding to be due and payable in whole (or in part, in which case any principal not so declared to be due and payable may thereafter be declared to be due and payable), and thereupon the principal of the Loans so declared to be due and payable, together with accrued interest thereon and all fees and other obligations of the Borrowers accrued hereunder, shall become due and payable immediately, without presentment, demand, protest or other notice of any kind, all of which are hereby waived by the Borrowers; and in case of any event with respect to the Borrowers described in clause (h) or (i) of this Article VII, the Commitments shall automatically terminate and the principal of the Loans then outstanding, together with accrued interest thereon and all fees and other obligations of the Borrowers accrued hereunder, shall automatically become due and payable, without presentment, demand, protest or other notice of any kind, all of which are hereby waived by the Borrowers, and (iii) if any B/A is outstanding, demand B/A Cover which the Canadian Borrowers shall immediately jointly and severally pay to the Canadian Administrative Agent.  Upon the occurrence and the continuance of an Event of Default, the Agents may, and at the request of the Required Lenders shall, exercise any rights and remedies provided to the Agents under the Loan Documents or at law or equity, including all remedies provided under the UCC.

 

ARTICLE VIII
 THE AGENTS; INTERCREDITOR ISSUES

 

Section 8.1            Appointment of Agents.  Each of the Lenders and the Issuing Bank hereby irrevocably appoints the Administrative Agent and the Canadian Administrative Agent as its agents and authorizes each such Agent to take such actions on its behalf, including execution of the other Loan Documents, and to exercise such powers as are delegated to the Administrative Agent and the Canadian Administrative Agent by the terms of the Loan Documents, together with such actions and powers as are reasonably incidental thereto.  Each of the Lenders and the Issuing Bank hereby irrevocably appoints the US Collateral Agent and the Canadian Collateral Agent as its agents and authorizes each such Agent to take such actions on its behalf, including execution of the other Loan Documents, and to exercise such powers as are delegated to the US Collateral Agent and the Canadian Collateral Agent by the terms of the Loan Documents, together with such actions and powers as are reasonably incidental thereto.  The Export-Related

 

134

 

Lender hereby irrevocably appoints the US Collateral Agent and its agent and authorizes the US Collateral Agent to take such actions on its behalf, including execution of the other Loan Documents, and to exercise such powers as are delegated to the US Collateral Agent by the terms of the Loan Documents and the Export-Related Financing Documents, together with such actions and powers as are reasonably incidental thereto.  Any bank serving as an Agent hereunder shall have the same rights and powers in its capacity as a Lender (or the Export-Related Lender) as any other Lender (or the Export-Related Lender) and may exercise the same as though it were not an Agent, and such bank and its Affiliates may accept deposits from, lend money to and generally engage in any kind of business with the Loan Parties or any Subsidiary of a Loan Party or other Affiliate thereof as if it were not an Agent hereunder.

 

Section 8.2            Limitation of Duties of Agents.  No Agent shall have any duties or obligations except those expressly set forth in the Loan Documents.  Without limiting the generality of the foregoing, (a) neither Agent shall be subject to any fiduciary or other implied duties, regardless of whether a Default has occurred and is continuing, (b) no Agent shall have any duty to take any discretionary action or exercise any discretionary powers, except discretionary rights and powers expressly contemplated by the Loan Documents that such Agent is required to exercise in writing as directed by the Required Lenders (or such other number or percentage of the Lenders as shall be necessary under the circumstances as provided in Section 9.2) or by the Export-Related Lender to the extent the requested action pertains solely to the Export-Related Priority Collateral, and (c) except as expressly set forth in the Loan Documents, the Agents shall not have any duty to disclose, and shall not be liable for the failure to disclose, any information relating to any Loan Party or any of its Subsidiaries that is communicated to or obtained by the bank serving as an Agent or any of its Affiliates in any capacity.  No Agent shall be liable for any action taken or not taken by it with the consent or at the request of the Required Lenders (or such other number or percentage of the Lenders as shall be necessary under the circumstances as provided in Section 9.2) or with the consent or at the request of the Export-Related Lender to the extent the action or omission relates solely to the Export-Related Priority Collateral or 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 written notice thereof is given to such Agent by a Borrower Representative or a Lender, and the Agents shall not be responsible for or have any duty to ascertain or inquire into (i) any statement, warranty or representation made in or in connection with any Loan Document or any Export-Related Financing Document, (ii) the contents of any certificate, report or other document delivered hereunder or in connection with any Loan Document or any Export-Related Financing Document, (iii) the performance or observance of any of the covenants, agreements or other terms or conditions set forth in any Loan Document or any Export-Related Financing Document, (iv) the validity, enforceability, effectiveness or genuineness of any Loan Document or any Export-Related Financing Document or any other agreement, instrument or document, (v) the creation, perfection or priority of Liens on the Collateral or the existence of the Collateral, or (vi) the satisfaction of any condition set forth in Article IV or elsewhere in any Loan Document, other than to confirm receipt of items expressly required to be delivered to the Agents.

 

Section 8.3            Reliance by Agents.  Each Agent shall be entitled to rely upon, and shall not incur any liability for relying upon, any notice, request, certificate, consent, statement, instrument, document or other writing believed by it to be genuine and to have been signed or sent by the proper Person.  Each Agent also may rely upon any statement made to it orally or by

 

135

 

telephone and believed by it to be made by the proper Person, and shall not incur any liability for relying thereon.  Each Agent may consult with legal counsel (who may be counsel for the Borrowers), independent accountants and other experts selected by it, and shall not be liable for any action taken or not taken by it in accordance with the advice of any such counsel, accountants or experts.

 

Section 8.4            Sub-Agents.  Each Agent may perform any and all its duties and exercise its rights and powers by or through any one or more sub-agents appointed by such Agent.  Each Agent and any of such Agent’s sub-agent may perform any and all its duties and exercise its rights and powers through their respective Related Parties.  The exculpatory provisions of the preceding paragraphs shall apply to any such sub-agent and to the Related Parties of the Agents and any such sub-agents, and shall apply to their respective activities in connection with the syndication of the credit facilities provided for herein as well as activities as Agents.

 

Section 8.5            Resignation of Agents; Successor Agents.  Subject to the appointment and acceptance of a successor Agent as provided in this paragraph, each Agent may resign at any time by notifying the Lenders, the Issuing Bank, a Borrower Representative and, if the Agent resigning is the US Collateral Agent, the Export-Related Lender.  Upon any such resignation, the Required Lenders shall have the right, in consultation with the Borrowers, to appoint a successor; provided, however, the Export-Related Lender’s consent shall be required for the appointment of a successor US Collateral Agent.  If no successor shall have been so appointed by the Required Lenders (and consented to by the Export-Related Lender if US Collateral Agent has resigned) and shall have accepted such appointment within thirty (30) days after the retiring Agent gives notice of its resignation, then the retiring Agent may, on behalf of the Lenders, the Issuing Bank and, in respect of US Collateral Agent appointments, the Export-Related Lender, appoint a successor Agent which shall be a commercial bank or an Affiliate of any such commercial bank.  Upon the acceptance of its appointment as an Agent hereunder by a successor, such successor shall succeed to and become vested with all the rights, powers, privileges and duties of the retiring Agent, and the retiring Agent shall be discharged from its duties and obligations hereunder.  The fees payable by the Borrowers to a successor Agent shall be the same as those payable to its predecessor unless otherwise agreed between the Borrowers and such successor.  After an Agent’s resignation hereunder, the provisions of this Article VIII and Section 9.3 shall continue in effect for the benefit of such retiring Agent, its sub agents and their respective Related Parties in respect of any actions taken or omitted to be taken by any of them while it was acting as Agent.

 

Section 8.6            Lender Acknowledgments.

 

(a)           Each Lender acknowledges that it has, independently and without reliance upon any Agent or any other Lender and based on such documents and information as it has deemed appropriate, made its own credit analysis and decision to enter into this Agreement.  The Export-Related Lender acknowledges that it has, independently and without reliance upon any Agent or any Lender and based on such documents and information as it has deemed appropriate, made its own credit analysis and decision to enter into this Agreement.  Each Lender also acknowledges that it will, independently and without reliance upon either Agent or any other Lender and based on such documents and information as it shall from time to time deem appropriate, continue to make its own decisions in taking or not taking action under or based

 

136

 

upon this Agreement, any other Loan Document or related agreement or any document furnished hereunder or thereunder.  The Export-Related Lender also acknowledges that it will, independently and without reliance upon any Agent or any Lender and based on such documents and information as it shall from time to time deem appropriate, continue to make its own decision whether to enter into the Export-Related Loan Agreement and thereafter in taking or not taking action under or based upon the Export-Related Financing Documents.

 

(b)           Each Lender and the Export-Related Lender hereby agree that (a) it has requested a copy of each Report prepared by or on behalf of any Agent; (b) no Agent (i) made any representation or warranty, express or implied, as to the completeness or accuracy of any Report or any of the information contained therein or any inaccuracy or omission contained in or relating to a Report and (ii) shall be liable for any information contained in any Report; (c) the Reports are not comprehensive audits or examinations, and that any Person performing any field examination will inspect only specific information regarding the Loan Parties and will rely significantly upon the Loan Parties’ books and records, as well as on representations of the Loan Parties’ personnel and that no Agent undertakes any obligation to update, correct or supplement the Reports; (d) it will keep all Reports confidential and strictly for its internal use, not share the Report with any Loan Party or any other Person except as otherwise permitted pursuant to this Agreement; and (e) without limiting the generality of any other indemnification provision contained in this Agreement, it will pay and protect, and indemnify, defend, and hold each Agent and any such other Person preparing a Report harmless from and against, the claims, actions, proceedings, damages, costs, expenses, and other amounts (including reasonable attorney’s fees) incurred by as the direct or indirect result of any third parties who might obtain all or part of any Report through the indemnifying Lender.

 

Section 8.7            Collateral Priority.  Notwithstanding (a) the date, time, method, manner, or order of grant, attachment, or perfection of any Liens now or hereafter granted to the Agents, the Lenders or the Export-Related Lender in respect of all or any portion of the Collateral, (b) any provision of UCC or any other applicable law, or of the Loan Documents or the Export-Related Financing Documents, or (c) any other circumstance of any kind or nature whatsoever, each of the Agents, the Lenders and the Export-Related Lender, herby agree that:

 

(i)            all right, title and interests of the Export-Related Lender in and to the Lender Priority Collateral, including, without limitation, all right, title and interest in and to the Lender Priority Collateral arising under or pursuant to any and all Liens securing the Export-Related Obligations now or hereafter held by or on behalf of the US Collateral Agent or the Export-Related Lender shall in all respects be junior and subordinate to all right, title and interests of the Agents, the Issuing Bank, the Lenders and the Other Secured Parties in and to such Lender Priority Collateral.

 

(ii)           all right, title and interests of the Agents, the Issuing Bank, the Lenders and the Other Secured Parties in and to the Export-Related Priority Collateral, including, without limitation, all right, title and interest in and to the Export-Related Priority Collateral arising under or pursuant to any and all Liens securing the Secured Obligations (other than the Export-Related Obligations) now or hereafter held by or on behalf of any Agent, the Issuing Bank, any Lender or any Other Secured Parties shall in

 

137

 

all respects be junior and subordinate to all right, title and interests of the Export-Related Lender in and to such Export-Related Priority Collateral.

 

Section 8.8            Allocation of Proceeds of Collateral.

 

(a)           Each of the Agents, the Lenders and the Export-Related Lender hereby agree that all Proceeds of the Lender Priority Collateral shall be applied as follows:

 

(i)            first, to the Administrative Agent and the Canadian Administrative Agent for application to the Secured Obligations other than the Export-Related Obligations in accordance with the Loan Documents until such Secured Obligations have been paid in full; and

 

(ii)           second, to the Export-Related Lender for application to the Export-Related Obligations in accordance with the Export-Related Financing Documents until the Export-Related Obligations have been paid in full.

 

(b)           Each of the Agents, the Lenders and the Export-Related Lender hereby agree that all Proceeds of the Export-Related Priority Collateral shall be applied as follows:

 

(i)            first, to the Export-Related Lender for application to the Export-Related Obligations in accordance with the Export-Related Financing Documents until the Export-Related Obligations have been paid in full; and

 

(ii)           second, to the Administrative Agent and the Canadian Administrative Agent for application to the Secured Obligations in accordance with the Loan Documents until the Secured Obligations other than the Export-Related Obligations have been paid in full.

 

Section 8.9            Commingling of Inventory.  Unless the Export-Related Inventory is effectively segregated from other Inventory of the Borrowers, the amount of Export-Related Inventory shall be the Pro Rata Inventory Percentage.  For purposes hereof, the term “Pro Rata Inventory Percentage” shall mean, as of the date of determination, the principal balance of the Credit Accommodations (as defined in the Export-Related Loan Agreement) made or incurred under the Export-Related Loan Agreement that is supported by the US Borrowers’ Export-Related Inventory, as a percentage of the sum of the US Revolving Exposure of all US Lenders supported by the US Borrowers’ Inventory plus the outstanding principal balance of the Credit Accommodations made or incurred under the Export-Related Loan Agreement that is supported by the US Borrowers’ Export-Related Inventory.

 

Section 8.10         Export-Related Loan Agreement.  Each US Lender hereby agrees that it has or will (a) purchase a participation interest in the Export-Related Lender’s commitments under the Export-Related Loan Agreement in an amount equal to such US Lender’s Applicable Percentage of the loans and commitments of the Export-Related Lender under such Export-Related Loan Agreement and (b) enter into a Participation Agreement to effectuate the purchase of such participation interest as a part of becoming a US Lender under this Agreement; provided, that, the aggregate principal amount of the Export-Related Lender’s commitments under the Export-Related Loan Agreement shall in no event exceed $25,000,000.

 

138

 

Section 8.11         Syndication Agent Title.  The banks (or Affiliates thereof) identified in this Agreement, or hereafter appointed by the Administrative Agent, as a “Syndication Agent” or other similar titles, shall not have any additional right, power, liability, responsibility or duty under this Agreement other than those applicable to all banks herein.

 

ARTICLE IX
 MISCELLANEOUS

 

Section 9.1            Notices.

 

(a)           Except in the case of notices and other communications expressly permitted to be given by telephone (and subject to Section 9.1(b) below), all notices and other communications provided for herein shall be in writing and shall be delivered by hand or overnight courier service, mailed by certified or registered mail or sent by facsimile, as follows:

 

(i)            if to any Loan Party, to the Company at:

 

Stewart & Stevenson LLC
 1000 Louisiana, Suite 5900
 Houston, Texas  77002
 Attention: John Simmons
 Facsimile No: (713) 659-3137

 

(ii)           if to the Agents, the Issuing Bank or the Swingline Lender, to JPMorgan Chase Bank, N.A. at:

 

JPMorgan Chase Bank, N.A.
 2200 Ross Avenue, 9th Floor
 Dallas, Texas  75201
 Mail Code # TX1-2921
 Attention:  Christy L. West
 Facsimile No: (214) 965-2594

 

(iii)          if to any other Lender, to it at its address or facsimile number set forth in its Administrative Questionnaire; and

 

(iv)          if to the Export-Related Lender, at:

 

JPMorgan Chase Bank, N.A.
 2200 Ross Avenue, 9th Floor
 Dallas, Texas  75201
 Mail Code # TX1-2921
 Attention:  Christy L. West
 Facsimile No: (214) 965-2594

 

All such notices and other communications (A) sent by hand or overnight courier service, or mailed by certified or registered mail, shall be deemed to have been given when received or (B) sent by facsimile shall be deemed to have been given when sent, provided that if not given

 

139

 

during normal business hours for the recipient, shall be deemed to have been given at the opening of business on the next Business Day for the recipient.

 

(b)           Notices and other communications to the Lenders hereunder may be delivered or furnished by electronic communications (including e-mail and internet or intranet websites) pursuant to procedures approved by the Administrative Agent and the Canadian Administrative Agent; provided that the foregoing shall not apply to notices pursuant to Article II or to compliance and no Event of Default certificates delivered pursuant to Section 5.1(d) unless otherwise agreed by the Administrative Agent, the Canadian Administrative Agent and the applicable Lender.  The Agents or the Company (on behalf of the Loan Parties) may, in its discretion, agree to accept notices and other communications to it hereunder by electronic communications pursuant to procedures approved by it; provided that approval of such procedures may be limited to particular notices or communications.  All such notices and other communications (i) sent to an e-mail address shall be deemed received upon the sender’s receipt of an acknowledgement from the intended recipient (such as by the “return receipt requested” function, as available, return e-mail or other written acknowledgement), provided that if not given during the normal business hours of the recipient, such notice or communication shall be deemed to have been given at the opening of business on the next Business Day for the recipient, and (ii) posted to an Internet or intranet website shall be deemed received upon the deemed receipt by the intended recipient at its e-mail address as described in the foregoing Section 9.1(b)(i) of notification that such notice or communication is available and identifying the website address therefor.

 

(c)           Any party hereto may change its address or facsimile number for notices and other communications hereunder by notice to the other parties hereto.

 

Section 9.2            Waivers; Amendments.

 

(a)           No failure or delay by any Agent, the Issuing Bank, any Lender or the Export-Related 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 the Agents, the Issuing Bank, the Lenders and the Export-Related Lender hereunder and under any other Loan Document are cumulative and are not exclusive of any rights or remedies that they would otherwise have.  No waiver of any provision of any Loan Document or consent to any departure by any Loan Party therefrom shall in any event be effective unless the same shall be permitted by Section 9.2(b), 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.

 

(b)           Neither this Agreement nor any other Loan Document nor any provision hereof or thereof may be waived, amended or modified except (i) in the case of this Agreement, pursuant to an agreement or agreements in writing entered into by the Borrowers and the Required Lenders or, (ii) in the case of any other Loan Document, pursuant to an agreement or

 

140

 

agreements in writing entered into by the Agent party thereto and the Loan Party or Loan Parties that are parties thereto, with the consent of the Required Lenders; provided that no such agreement shall (A) increase the Commitment of any Lender without the written consent of such Lender (including any such Lender that is a Defaulting Lender) (provided that the Administrative Agent and the Canadian Administrative Agent may make Protective Advances as set forth in Section 2.4), (B) reduce or forgive the principal amount of any Loan or LC Disbursement or reduce the rate of interest thereon, or reduce or forgive any interest or fees payable hereunder, without the written consent of each Lender (including any such Lender that is a Defaulting Lender) directly affected thereby, (C) postpone any scheduled date of payment of the principal amount of any Loan or LC Disbursement, or any date for the payment of any interest, fees or other Obligations payable hereunder, or reduce the amount of, waive or excuse any such payment, or postpone the scheduled date of expiration of any Commitment, without the written consent of each Lender (including any such Lender that is a Defaulting Lender) directly affected thereby, (D) change Section 2.19(b),  Section 2.19(c), Section 2.19(f) or Section 2.19(g) in a manner that would alter the manner in which payments are shared, without the written consent of each Lender (including any such Lender that is a Defaulting Lender), (E) increase the advance rates set forth in the definition of US Borrowing Base or Canadian Borrowing Base, add new categories of eligible assets or modify the definitions applicable to existing categories of eligible assets in a manner that would have the effect of increasing Availability, without the written consent of the Supermajority Revolving Lenders (other than any Defaulting Lender), (F) change any of the provisions of this Section or the definition of “Required Lenders” or any other provision of any Loan Document specifying the number or percentage of Lenders (or Lenders of any Class) required to waive, amend or modify any rights thereunder or make any determination or grant any consent thereunder, without the written consent of each Lender (including any such Lender that is a Defaulting Lender) directly affected thereby, (G) release any Loan Guarantor from its obligation under its Loan Guaranty (except as otherwise permitted herein or in the other Loan Documents), without the written consent of each Lender (other than any Defaulting Lender), (H) consent to the assignment of this Agreement or any other Loan Document by any Loan Party, without the consent of each Lender (other than any Defaulting Lender), (I) change Section 2.27, without the consent of each Lender (other than any Defaulting Lender),  (J) except as provided in Section 9.2(d) of this Section or in any Collateral Document, release all or substantially all of the Collateral, without the written consent of each Lender (other than any Defaulting Lender), and release all or substantially all of the Export-Related Priority Collateral without the consent of the Export-Related Lender or (K) except as permitted under Section 6.2, subordination of all or substantially all of the Liens to the Administrative Agent, the Canadian Administrative Agent or any Lender, as applicable, or the Secured Obligations, without the written consent of the Supermajority Revolving Lenders (other than any Defaulting Lender); provided further that no such agreement shall amend, modify or otherwise affect the rights or duties of any Agent, the Issuing Bank, the Swingline Lender or the Export-Related Lender hereunder without the prior written consent of such Agent, the Issuing Bank, the Swingline Lender or the Export-Related Lender as the case may be.  The Administrative Agent and the Canadian Administrative Agent may also amend the Commitment Schedule to reflect assignments entered into pursuant to Section 9.4.

 

(c)           The Lenders hereby irrevocably authorize the US Collateral Agent or the Canadian Collateral Agent (as applicable), at its option and in its sole discretion, to release any Liens granted to the US Collateral Agent or the Canadian Collateral Agent (as applicable) by the

 

141

 

Loan Parties on any Collateral (i) upon the termination of the all Commitments, payment and satisfaction in full in cash of all Secured Obligations (other than Unliquidated Obligations), and the cash collateralization of all Unliquidated Obligations in a manner satisfactory to each affected Lender, (ii) constituting property being sold or disposed of if the Loan Party disposing of such property certifies to the US Collateral Agent or the Canadian Collateral Agent (as applicable) that the sale or disposition is made in compliance with the terms of this Agreement and the Export-Related Financing Documents (and the US Collateral Agent or the Canadian Collateral Agent (as applicable) may rely conclusively on any such certificate, without further inquiry), (iii) constituting property leased to a Loan Party under a lease which has expired or been terminated in a transaction permitted under this Agreement, or (iv) as required to effect any sale or other disposition of such Collateral in connection with any exercise of remedies of the Agents, the Lenders or the Export-Related Lender pursuant to Article VII.  Except as provided in the preceding sentence, the US Collateral Agent and the Canadian Collateral Agent will not release any Liens on Collateral other than the Export-Related Priority Collateral without the prior written authorization of the Required Lenders or any Liens on the Export-Related Priority Collateral without the prior written consent of the Export-Related Lender; provided  that, the US Collateral Agent and the Canadian Collateral Agent may in their discretion, release its Liens on Collateral valued in the aggregate not in excess of $10,000,000 (other than Export-Related Priority Collateral) during any calendar year without the prior written authorization of the Required Lenders.  Any such release shall not in any manner discharge, affect, or impair the Obligations or any Liens (other than those expressly being released) upon (or obligations of the Loan Parties in respect of) all interests retained by the Loan Parties, including the proceeds of any sale, all of which shall continue to constitute part of the Collateral.

 

(d)           If, in connection with any proposed amendment, waiver or consent requiring the consent of “each Lender” or “each Lender affected thereby,” the consent of the Required Lenders is obtained, but the consent of other necessary Lenders is not obtained (any such Lender whose consent is necessary but not obtained being referred to herein as a “Non-Consenting Lender”), then the Borrowers may elect to replace a Non-Consenting Lender as a Lender party to this Agreement, provided that, concurrently with such replacement, (i) another bank or other entity which is reasonably satisfactory to the Borrowers and the Administrative Agent shall agree, as of such date, to purchase for cash the Loans and other Obligations due to the Non-Consenting Lender pursuant to an Assignment and Assumption and to become a Lender for all purposes under this Agreement and to assume all obligations of the Non-Consenting Lender to be terminated as of such date and to comply with the requirements of Section 9.4(b), and (ii) the Borrowers shall pay to such Non-Consenting Lender in same day funds on the day of such replacement (A) all interest, fees and other amounts then accrued but unpaid to such Non-Consenting Lender by the Borrowers hereunder to and including the date of termination, including without limitation payments due to such Non-Consenting Lender under Section 2.16 and Section 2.18, and (B) an amount, if any, equal to the payment which would have been due to such Lender on the day of such replacement under Section 2.17 had the Loans of such Non-Consenting Lender been prepaid on such date rather than sold to the replacement Lender.

 

(e)           For purposes of clarity, the representations, warranties, covenants, defaults and other provisions of the Export-Related Financing Documents are independent of the representations, warranties, covenants, defaults and other provisions of the Loan Documents (except for the US Security Agreement, which constitutes both an Export-Related Financing

 

142

 

Document and a Loan Document) and no amendment, modifications, waiver or consent granted pursuant to the Loan Documents shall be effective for purposes of the Export-Related Financing documents (or vice versa) and no act or omission of any Loan Party which is permitted pursuant to the Loan Documents will, solely as a result of being permitted pursuant to the Loan Documents be deemed to be permitted pursuant to the Export-Related Financing Documents (or vice versa).

 

Section 9.3            Expenses; Indemnity; Damage Waiver.

 

(a)           The Borrowers shall pay (i) all reasonable out of pocket expenses incurred by each Agent and its Affiliates, including the reasonable fees, charges and disbursements of Vinson & Elkins L.L.P., and local counsel in applicable jurisdictions, in connection with the syndication and distribution (including, without limitation, via the internet or through a service such as Intralinks) of the credit facilities provided for herein, the preparation and administration of the Loan Documents or any amendments, modifications or waivers of the provisions of the Loan Documents (whether or not the transactions contemplated hereby or thereby shall be consummated), (ii) all reasonable out-of-pocket expenses incurred by the Issuing Bank in connection with the issuance, amendment, renewal or extension of any Letter of Credit or any demand for payment thereunder and (iii) all out-of-pocket expenses incurred by any Agent, the Issuing Bank, any Lender or the Export-Related Lender, including the fees, charges and disbursements of any counsel for any Agent, the Issuing Bank, any Lender or the Export-Related Lender, in connection with the enforcement, collection or protection of its rights in connection with the Loan Documents, including its rights under this Section, or in connection with the Loans made or Letters of Credit issued hereunder, including all such out of pocket expenses incurred during any workout, restructuring or negotiations in respect of such Loans or Letters of Credit.  Expenses being reimbursed by the Borrowers under this Section include, without limiting the generality of the foregoing, costs and expenses incurred in connection with:

 

(i)            appraisals and environmental reports;

 

(ii)           field examinations and the preparation of Reports based on the fees charged by a third party retained by the Administrative Agent or the Canadian Administrative Agent or the internally allocated fees for each Person employed by the Administrative Agent or the Canadian Administrative Agent with respect to each field examination;

 

(iii)          lien and title searches and title insurance;

 

(iv)          taxes, fees and other charges for recording the Mortgages, filing financing statements and continuations, and other actions to perfect, protect, and continue the US Collateral Agent’s and the Canadian Collateral Agent’s Liens;

 

(v)           sums paid or incurred to take any action required of any Loan Party under the Loan Documents that such Loan Party fails to pay or take;

 

(vi)          forwarding loan proceeds, collecting checks and other items of payment, and establishing and maintaining the accounts and lock boxes, and costs and expenses of preserving and protecting the Collateral; and

 

143

 

(vii)         fees and other charges assessed by the Ex-Im Bank, including, without limitation, all facility fees and application fees.

 

All of the foregoing costs and expenses may be charged to the Borrowers as Revolving Loans or to another deposit account, all as described in Section 2.19(d).

 

(b)           The Borrowers shall, jointly and severally, indemnify each Agent, the Issuing Bank and each Lender, and each Related Party of any of the foregoing Persons (each such Person being called an “Indemnitee”) against, and hold each Indemnitee harmless from, any and all losses, claims, damages, penalties, liabilities and related expenses, including the fees, charges and disbursements of any counsel for any Indemnitee, incurred by or asserted against any Indemnitee arising out of, in connection with, or as a result of (i) the execution or delivery of the Loan Documents or any agreement or instrument contemplated thereby, the performance by the parties hereto of their respective obligations thereunder or the consummation of the Transactions or any other transactions contemplated hereby, (ii) any Loan or Letter of Credit or the use of the proceeds therefrom (including any refusal by the Issuing Bank to honor a demand for payment under a Letter of Credit if the documents presented in connection with such demand do not strictly comply with the terms of such Letter of Credit), (iii) any actual or alleged presence or release of Hazardous Materials on or from any property owned or operated by the Borrowers or any of their Subsidiaries, or any Environmental Liability related in any way to the Borrowers or any of their Subsidiaries, or (iv) any actual or prospective claim, litigation, investigation or proceeding relating to any of the foregoing, whether based on contract, tort or any other theory and regardless of whether any Indemnitee is a party thereto; provided that such indemnity shall not, as to any Indemnitee, be available to the extent that such losses, claims, damages, penalties, liabilities or related expenses 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. This Section 9.3(b) shall not apply with respect to Taxes other than any Taxes that represent losses or damages arising from any non-Tax claim.

 

(c)           To the extent that the Borrowers fail to pay any amount required to be paid by any of them to any Agent, the Issuing Bank or the Swingline Lender under Section 9.3(a) or Section 9.3(b), each Lender severally agrees to pay such Agent, the Issuing Bank or the Swingline Lender, as the case may be, such Lender’s Applicable Percentage (determined as of the time that the applicable unreimbursed expense or indemnity payment is sought) of such unpaid amount; provided that the unreimbursed expense or indemnified loss, claim, damage, penalty, liability or related expense, as the case may be, was incurred by or asserted against such Agent, the Issuing Bank or the Swingline Lender in its capacity as such; provided, further, that if such amount is required to be paid to the US Collateral Agent, the Export-Related Lender shall pay its proportionate share of such amount determined based on the proportion of the Export-Related Obligations to the total US Secured Obligations.

 

(d)           To the extent permitted by applicable law, no Loan Party shall assert, and each hereby waives, any claim against any Indemnitee, on any theory of liability, for special, indirect, consequential or punitive damages (as opposed to direct or actual damages) arising out of, in connection with, or as a result of, this Agreement or any agreement or instrument contemplated hereby, the Transactions, any Loan or Letter of Credit or the use of the proceeds thereof.

 

144

 

(e)           All amounts due under this Section shall be payable promptly after written demand therefor.

 

Section 9.4            Successors and Assigns.

 

(a)           The provisions of this Agreement shall be binding upon and inure to the benefit of the parties hereto and their respective successors and assigns permitted hereby (including any Affiliate of the Issuing Bank that issues any Letter of Credit), except that (i) the Borrowers may not assign or otherwise transfer any of its rights or obligations hereunder without the prior written consent of each Lender (and any attempted assignment or transfer by the Borrowers without such consent shall be null and void) and (ii) no Lender may assign or otherwise transfer its rights or obligations hereunder except in accordance with this Section.  Nothing in this Agreement, expressed or implied, shall be construed to confer upon any Person (other than the parties hereto, their respective successors and assigns permitted hereby (including any Affiliate of the Issuing Bank that issues any Letter of Credit), Participants (to the extent provided in Section 9.4(c)) and, to the extent expressly contemplated hereby, the Related Parties of each of the Agents, the Issuing Bank and the Lenders) any legal or equitable right, remedy or claim under or by reason of this Agreement.

 

(b)           (i) Subject to the conditions set forth in Section 9.4(b)(ii) below, any Lender may assign to one or more assignees all or a portion of its rights and obligations under this Agreement (including all or a portion of its Commitment and the Loans at the time owing to it) with the prior written consent (such consent not to be unreasonably withheld) of:

 

(A)          the Borrower Representative US, provided that the Borrower Representative US shall be deemed to have consented to any such assignment unless it shall object thereto by written notice to the Administrative Agent within ten (10) Business Days after having received notice thereof, and provided further that no consent of the Borrower Representative US shall be required for an assignment to a Lender, an Affiliate of a Lender, an Approved Fund or, if an Event of Default has occurred and is continuing, any other assignee;

 

(B)           the Administrative Agent or the Canadian Administrative Agent; and

 

(C)           with respect to the assignment of any Revolving Commitment, the Issuing Bank.

 

(ii)           Assignments shall be subject to the following additional conditions:

 

(A)          except in the case of an assignment to a Lender or an Affiliate of a Lender or an assignment of the entire remaining amount of the assigning Lender’s Commitments or Loans of any Class, the amount of the Commitment or Loans of the assigning Lender subject to each such assignment (determined as of the date the Assignment and Assumption with respect to such assignment is delivered to the Administrative Agent and the Canadian Administrative Agent) shall not be less than $5,000,000 unless each of the

 

145

 

Borrower Representative US, the Administrative Agent and the Canadian Administrative Agent otherwise consent, provided that no such consent of the Borrower Representative US shall be required if an Event of Default has occurred and is continuing;

 

(B)           each partial assignment shall be made as an assignment of a proportionate part of all the assigning Lender’s (or its Related Affiliate’s) rights and obligations under this Agreement, provided that the assignment of any part of all the assigning Lender’s (or its Related Affiliate’s) rights and obligations in respect of Commitments or Loans shall require (1) a pro rata assignment of such assigning Lender’s (or its Related Affiliate’s) participation interests under the Export-Related Loan Agreement and such assigning Lender’s (or its Related Affiliate’s) Canadian Commitments or Canadian Loans if such assigning Lender is a US Lender and (2) a pro rata assignment of such assigning Lender’s (or its Related Affiliate’s) participation interests under the Export-Related Loan Agreement and such assigning Lender’s (or its Related Affiliate’s) US Commitments or US Loans if such assigning Lender is a Canadian Lender;

 

(C)           the parties to each assignment shall execute and deliver to the Administrative Agent and the Canadian Administrative Agent an Assignment and Assumption, together with a processing and recordation fee of $3,500;

 

(D)          the assignee, if it shall not be a Lender, shall deliver to the Administrative Agent and the Canadian Administrative Agent an Administrative Questionnaire; and

 

(E)           in the case of an assignment of US Revolving Commitments, the assignee shall execute and deliver to the Administrative Agent a Participation Agreement to the extent required by Section 8.10.

 

For the purposes of this Section 9.4(b), the term “Approved Fund” has the following meaning:

 

“Approved Fund” means any Person (other than a natural person) that is engaged in making, purchasing, holding or investing in bank loans and similar extensions of credit in the ordinary course of its business and that is administered or managed by (a) a Lender, (b) an Affiliate of a Lender or (c) an entity or an Affiliate of an entity that administers or manages a Lender.

 

(iii)          Subject to acceptance and recording thereof pursuant to Section 9.4(b)(iv), from and after the effective date specified in each Assignment and Assumption the assignee thereunder shall be a party hereto and, to the extent of the interest assigned by such Assignment and Assumption, have the rights and obligations of a Lender under this Agreement, and the assigning Lender thereunder shall, to the extent of the interest assigned by such Assignment and Assumption, be released from its obligations under this Agreement (and, in the case of an Assignment and Assumption covering all of the assigning Lender’s rights and obligations under this Agreement, such Lender shall cease

 

146

 

to be a party hereto but shall continue to be entitled to the benefits of Section 2.16, Section 2.17, Section 2.18 and Section 9.3).  Any assignment or transfer by a Lender of rights or obligations under this Agreement that does not comply with this Section 9.4 shall be treated for purposes of this Agreement as a sale by such Lender of a participation in such rights and obligations in accordance with this Section 9.4(c).

 

(iv)          The Administrative Agent, acting for this purpose as an agent of the Borrowers, shall maintain at one of its offices a copy of each Assignment and Assumption delivered to it and a register for the recordation of the names and addresses of the Lenders, and the Commitment of, and principal amount (and stated interest) 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 Agent, the Canadian Administrative Agent, the Issuing Bank and the Lenders may treat each Person whose name is recorded in the Register pursuant to the terms hereof as a Lender hereunder for all purposes of this Agreement, notwithstanding notice to the contrary.  The Register shall be available for inspection by the Borrowers, the Issuing Bank and any Lender, at any reasonable time and from time to time upon reasonable prior notice.

 

(v)           Upon its receipt of a duly completed Assignment and Assumption executed by an assigning Lender and an assignee, the assignee’s completed Administrative Questionnaire (unless the assignee shall already be a Lender hereunder), the processing and recordation fee referred to in Section 9.4(b) and any written consent to such assignment required by Section 9.4(b), the Administrative Agent shall accept such Assignment and Assumption and record the information contained therein in the Register; provided that if either the assigning Lender or the assignee shall have failed to make any payment required to be made by it pursuant to Section 2.5, Section 2.6(d),  Section 2.6(e), Section 2.7(b), Section 2.19(f), Section 2.19(g) or Section 9.3(c), the Administrative Agent shall have no obligation to accept such Assignment and Assumption and record the information therein in the Register unless and until such payment shall have been made in full, together with all accrued interest thereon.  No assignment shall be effective for purposes of this Agreement unless it has been recorded in the Register as provided in this paragraph.

 

(c)           (i) Any Lender may, without the consent of the Borrowers, the Administrative Agent, the Canadian Administrative Agent, the Issuing Bank or the Swingline Lender, sell participations to one or more banks or other entities (a “Participant”) in all or a portion of such Lender’s rights and obligations under this Agreement (including all or a portion of its Commitment and the Loans owing to it); provided that (A) such Lender’s obligations under this Agreement shall remain unchanged, (B) such Lender shall remain solely responsible to the other parties hereto for the performance of such obligations and (C) the Borrowers, the Agents, the Issuing Bank and the other Lenders shall continue to deal solely and directly with such Lender in connection with such Lender’s rights and obligations under this Agreement.  Any agreement or instrument pursuant to which a Lender sells such a participation shall provide that such Lender shall retain the sole right to enforce this Agreement and to approve any amendment, modification or waiver of any provision of this Agreement; provided that such agreement or instrument may provide that such Lender will not, without the consent of the Participant, agree to

 

147

 

any amendment, modification or waiver described in the first proviso to Section 9.2(b) that affects such Participant.  The Borrowers agree that each Participant shall be entitled to the benefits of Section 2.16, Section 2.17 and Section 2.18 (subject to the requirements and limitations therein, including the requirements under Section 2.18(f) (it being understood that the documentation required under Section 2.18(f) shall be delivered to the participating Lender)) to the same extent as if it were a Lender and had acquired its interest by assignment pursuant to paragraph (b) of this Section; provided that such Participant (1) agrees to be subject to the provisions of Section 2.19 and Section 2.20 as if it were an assignee under paragraph (b) of this Section; and (2) shall not be entitled to receive any greater payment under Section 2.16 or Section 2.18, with respect to any participation, than its participating Lender would have been entitled to receive, except to the extent such entitlement to receive a greater payment results from a Change in Law that occurs after the Participant acquired the applicable participation.

 

(ii)           To the extent permitted by law, each Participant also shall be entitled to the benefits of Section 9.8 as though it were a Lender, provided such Participant agrees to be subject to Section 2.19(d) and Section 2.19(e), as applicable, as though it were a Lender.  Each Lender that sells a participation shall, acting solely for this purpose as an agent of the Borrowers, maintain a register on which it enters the name and address of each Participant and the principal amounts (and stated interest) of each Participant’s interest in the Loans or other obligations under this Agreement (the “Participant Register”); provided that no Lender shall have any obligation to disclose all or any portion of the Participant Register to any Person (including the identity of any Participant or any information relating to a Participant’s interest in any Commitments, Loans, Letters of Credit or its other obligations under any Loan Document) except to the extent that such disclosure is necessary to establish that such Commitment, Loan, Letter of Credit or other obligation is in registered form under Section 5f.103-1(c) of the United States Treasury Regulations.  The entries in the Participant Register shall be conclusive absent manifest error, and such Lender shall treat each person whose name is recorded in the Participant Register as the owner of such participation for all purposes of this Agreement notwithstanding any notice to the contrary.  For the avoidance of doubt, the Administrative Agent and the Canadian Administrative Agent (in their capacity as administrative agents) shall have no responsibility for maintaining a Participant Register.

 

(d)           Any Lender may at any time pledge or assign a security interest in all or any portion of its rights under this Agreement to secure obligations of such Lender, including without limitation any pledge or assignment to secure obligations to a Federal Reserve Bank, and this Section shall not apply to any such pledge or assignment of a security interest; provided that no such pledge or assignment of a security interest shall release a Lender from any of its obligations hereunder or substitute any such pledgee or assignee for such Lender as a party hereto.

 

(e)           Nothing contained herein shall restrict the right of the Export-Related Lender to assign or transfer all or any part of its obligations hereunder to the Ex-Im Bank.

 

Section 9.5            Survival.  All covenants, agreements, representations and warranties made by the Loan Parties in the Loan Documents and in the certificates or other instruments delivered in connection with or pursuant to this Agreement or any other Loan Document shall be

 

148

 

considered to have been relied upon by the other parties hereto and shall survive the execution and delivery of the Loan Documents and the making of any Loans and issuance of any Letters of Credit, regardless of any investigation made by any such other party or on its behalf and notwithstanding that any Agent, the Issuing Bank or any Lender may have had notice or knowledge of any Default or incorrect representation or warranty at the time any credit is extended hereunder, and shall continue in full force and effect as long as the principal of or any accrued interest on any Loan or any fee or any other amount payable under this Agreement is outstanding and unpaid or any Letter of Credit is outstanding and so long as the Commitments have not expired or terminated.  The provisions of Section 2.16, Section 2.17, Section 2.18 and Section 9.3 and Article VIII shall survive and remain in full force and effect regardless of the consummation of the transactions contemplated hereby, the repayment of the Loans, the expiration or termination of the Letters of Credit and the Commitments or the termination of this Agreement or any provision hereof.

 

Section 9.6            Counterparts; Integration; Effectiveness.  This Agreement may be executed in counterparts (and by different parties hereto on different counterparts), each of which shall constitute an original, but all of which when taken together shall constitute a single contract.  This Agreement, the other Loan Documents and any separate letter agreements with respect to fees payable to the Agents constitute the entire contract among the parties relating to the subject matter hereof and supersede any and all previous agreements and understandings, oral or written, relating to the subject matter hereof.  Except as provided in Section 4.1, this Agreement shall become effective when it shall have been executed by the Administrative Agent and the Canadian Administrative Agent and when such Agents shall have received counterparts hereof which, when taken together, bear the signatures of each of the other parties hereto, and thereafter shall be binding upon and inure to the benefit of the parties hereto and their respective successors and assigns.  Delivery of an executed counterpart of a signature page of this Agreement by facsimile or other electronic transmission shall be effective as delivery of a manually executed counterpart of this Agreement.  THIS WRITTEN AGREEMENT REPRESENTS THE FINAL AGREEMENT BETWEEN THE PARTIES AND MAY NOT BE CONTRADICTED BY EVIDENCE OF PRIOR, CONTEMPORANEOUS, OR SUBSEQUENT ORAL AGREEMENTS OF THE PARTIES.  THERE ARE NO UNWRITTEN ORAL AGREEMENTS BETWEEN THE PARTIES.

 

Section 9.7            Severability.  Any provision of any Loan Document held to be invalid, illegal or unenforceable in any jurisdiction shall, as to such jurisdiction, be ineffective to the extent of such invalidity, illegality or unenforceability without affecting the validity, legality and enforceability of the remaining provisions thereof; and the invalidity of a particular provision in a particular jurisdiction shall not invalidate such provision in any other jurisdiction.

 

Section 9.8            Right of Setoff.  If an Event of Default shall have occurred and be continuing, each Lender and each of its Affiliates is hereby authorized at any time and from time to time, to the fullest extent permitted by law, to set off and apply any and all deposits (general or special, time or demand, provisional or final) at any time held and other obligations at any time owing by such Lender or Affiliate to or for the credit or the account of the Borrowers against any of and all the Secured Obligations (other than the Export-Related Obligations) held by such Lender, irrespective of whether or not such Lender shall have made any demand under the Loan Documents and although such obligations may be unmatured.  The applicable Lender

 

149

 

shall notify the Borrower Representative US, the Administrative Agent and the Canadian Administrative Agent of such set-off or application, provided that any failure to give or any delay in giving such notice shall not affect the validity of any such set-off or application under this Section; provided  further  that no Lender shall exercise any right of setoff with respect to any deposit of any Canadian Borrower to satisfy Obligations other than those Obligations of the Canadian Borrowers.  The rights of each Lender under this Section are in addition to other rights and remedies (including other rights of setoff) which such Lender may have.

 

Section 9.9            Governing Law; Jurisdiction; Consent to Service of Process.

 

(a)           The Loan Documents (other than those containing a contrary express choice of law provision) shall be governed by and construed in accordance with the laws of the State of New York, but giving effect to federal laws applicable to national banks.

 

(b)           Each Loan Party hereby irrevocably and unconditionally submits, for itself and its property, to the nonexclusive jurisdiction of any U.S. federal or New York State court sitting in New York, New York in any action or proceeding arising out of or relating to any Loan Documents, or for recognition or enforcement of any judgment, and each of the parties hereto hereby irrevocably and unconditionally agrees that all claims in respect of any such action or proceeding may be heard and determined in such New York State or, to the extent permitted by law, in such Federal court.  Each of the parties hereto agrees that a final judgment in any such action or proceeding shall be conclusive and may be enforced in other jurisdictions by suit on the judgment or in any other manner provided by law.  Nothing in this Agreement or any other Loan Document shall affect any right that any Agent, the Issuing Bank or any Lender may otherwise have to bring any action or proceeding relating to this Agreement or any other Loan Document against any Loan Party or its properties in the courts of any jurisdiction.

 

(c)           Each Loan Party hereby irrevocably and unconditionally waives, to the fullest extent it may legally and effectively do so, any objection which it may now or hereafter have to the laying of venue of any suit, action or proceeding arising out of or relating to this Agreement or any other Loan Document in any court referred to in Section 9.9(b).  Each of the parties hereto hereby irrevocably waives, to the fullest extent permitted by law, the defense of an inconvenient forum to the maintenance of such action or proceeding in any such court.

 

(d)           Each party to this Agreement irrevocably consents to service of process in the manner provided for notices in Section 9.1.  Nothing in this Agreement or any other Loan Document will affect the right of any party to this Agreement to serve process in any other manner permitted by law.

 

Section 9.10         WAIVER OF JURY TRIAL.  EACH PARTY HERETO HEREBY WAIVES, TO THE FULLEST EXTENT PERMITTED BY APPLICABLE LAW, ANY RIGHT IT MAY HAVE TO A TRIAL BY JURY IN ANY LEGAL PROCEEDING DIRECTLY OR INDIRECTLY ARISING OUT OF OR RELATING TO THIS AGREEMENT, ANY OTHER LOAN DOCUMENT OR THE TRANSACTIONS CONTEMPLATED THEREBY (WHETHER BASED ON CONTRACT, TORT OR ANY OTHER THEORY).  EACH PARTY HERETO (a) CERTIFIES THAT NO REPRESENTATIVE, AGENT OR ATTORNEY OF ANY OTHER PARTY HAS REPRESENTED, EXPRESSLY OR OTHERWISE, THAT SUCH

 

150

 

OTHER PARTY WOULD NOT, IN THE EVENT OF LITIGATION, SEEK TO ENFORCE THE FOREGOING WAIVER AND (b) ACKNOWLEDGES THAT IT AND THE OTHER PARTIES HERETO HAVE BEEN INDUCED TO ENTER INTO THIS AGREEMENT BY, AMONG OTHER THINGS, THE MUTUAL WAIVERS AND CERTIFICATIONS IN THIS SECTION.

 

Section 9.11         Judgment Currency.

 

(a)           If, for the purpose of obtaining or enforcing any judgment against any Borrowers or any Loan Party in any court in any jurisdiction, it becomes necessary to convert into any other currency (such other currency being hereinafter in this Section 9.11 referred to as the “Judgment Currency”) an amount due under any Loan Document in any currency (the “Obligation Currency”) other than the Judgment Currency, the conversion shall be made at the rate of exchange prevailing on the Business Day immediately preceding (i) the date of actual payment of the amount due, in the case of any proceeding in the courts of any jurisdiction that will give effect to such conversion being made on such date, or (ii) the date on which the judgment is given, in the case of any proceeding in the courts of any other jurisdiction (the applicable date as of which such conversion is made pursuant to this Section 9.11 being hereinafter in this Section referred to as the “Judgment Conversion Date”).

 

(b)           If, in the case of any proceeding, there is a change in the rate of exchange prevailing between the Judgment Conversion Date and the date of actual receipt for value of the amount due, the applicable Borrower or Loan Party shall pay such additional amount (if any, but in any event not lesser amount) as may be necessary to ensure that the amount actually received 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 the Judgment Currency stipulated in the judgment or judicial order at the rate of exchange prevailing on the Judgment Conversion Date.  Any amount due from a Borrower or Loan Party under this paragraph shall be due as a separate debt and shall not be affected by judgment being obtained for any other amounts due under or in respect of any of the Loan Documents.

 

(c)           The term “rate of exchange” in this Section means the rate of exchange at which the Administrative Agent would, on the relevant date at or about 12:00 noon (New York time), be prepared to sell the Obligation Currency against the Judgment Currency.

 

Section 9.12         Headings.  Article and Section headings and the Table of Contents used herein are for convenience of reference only, are not part of this Agreement and shall not affect the construction of, or be taken into consideration in interpreting, this Agreement.

 

Section 9.13         Confidentiality.  Each of the Agents, the Issuing Bank and the Lenders agrees to maintain the confidentiality of the Information (as defined below), except that Information may be disclosed (a) to its and its Affiliates’ directors, officers, employees and agents, including accountants, legal counsel and other advisors (it being understood that the Persons to whom such disclosure is made will be informed of the confidential nature of such Information and instructed to keep such Information confidential), (b) to the extent requested by any regulatory authority, (c) to the extent required by Requirement of Law or by any subpoena or

 

151

 

similar legal process, (d) to any other party to this Agreement, (e) in connection with the exercise of any remedies hereunder or any suit, action or proceeding relating to this Agreement or any other Loan Document or the enforcement of rights hereunder or thereunder, (f) subject to an agreement containing provisions substantially the same as those of this Section, to (i) any assignee of or Participant in, or any prospective assignee of or Participant in, any of its rights or obligations under this Agreement or (ii) any actual or prospective counterparty (or its advisors) to any swap or derivative transaction relating to the Loan Parties and their obligations, (g) with the consent of the Borrower Representatives or (h) to the extent such Information (i) becomes publicly available other than as a result of a breach of this Section or (ii) becomes available to any Agent, the Issuing Bank or any Lender on a nonconfidential basis from a source other than the Borrowers.  For the purposes of this Section, “Information” means all information received from the Borrowers relating to the Borrowers or their businesses, other than any such information that is available to any Agent, the Issuing Bank or any Lender on a non-confidential basis prior to disclosure by the Borrowers; provided that, in the case of information received from the Borrowers after the date hereof, such information is clearly identified at the time of delivery as confidential.  Any Person required to maintain the confidentiality of Information as provided in this Section shall be considered to have complied with its obligation to do so if such Person has exercised the same degree of care to maintain the confidentiality of such Information as such Person would accord to its own confidential information.

 

Section 9.14         Several Obligations; Nonreliance; Violation of Law.  The respective obligations of the Lenders hereunder are several and not joint and the failure of any Lender to make any Loan or perform any of its obligations hereunder shall not relieve any other Lender from any of its obligations hereunder. Each Lender hereby represents that it is not relying on or looking to any margin stock for the repayment of the Borrowings provided for herein.  Anything contained in this Agreement to the contrary notwithstanding, neither the Issuing Bank nor any Lender shall be obligated to extend credit to the Borrowers in violation of any Requirement of Law.

 

Section 9.15         USA Patriot Act.  Each Lender that is subject to the requirements of the USA Patriot Act (Title III of Pub. L. 107-56 (signed into law October 26, 2001)) (the “Act”) hereby notifies the Borrowers that pursuant to the requirements of the Act, it is required to obtain, verify and record information that identifies the Borrowers, which information includes the name and address of the Borrowers and other information that will allow such Lender to identify the Borrowers in accordance with the Act.

 

Section 9.16         Disclosure.  Each Loan Party, each Lender and the Export-Related Lender hereby acknowledges and agrees that each Agent and/or its Affiliates from time to time may hold investments in, make other loans to or have other relationships with any of the Loan Parties and their respective Affiliates.

 

Section 9.17         Appointment for Perfection.  Each Lender and the Export-Related Lender hereby appoints each other Lender as its agent for the purpose of perfecting Liens, for the benefit of the Agents, the Lenders and the Export-Related Lender, in assets which, in accordance with Article 9 of the UCC or any other applicable law can be perfected only by possession.  Should any Lender or the Export-Related Lender (other than the US Collateral Agent) obtain possession of any such Collateral, such Lender shall notify the US Collateral Agent thereof, and,

 

152

 

promptly upon the US Collateral Agent’s request therefor shall deliver such Collateral to the US Collateral Agent or otherwise deal with such Collateral in accordance with the US Collateral Agent’s instructions.

 

Section 9.18         Interest Rate Limitation.  Notwithstanding anything herein to the contrary, if at any time the interest rate applicable to any Loan, together with all fees, charges and other amounts which are treated as interest on such Loan under applicable law (collectively the “Charges”), shall exceed the maximum lawful rate (the “Maximum Rate”) which may be contracted for, charged, taken, received or reserved by the Lender holding such Loan in accordance with applicable law, the rate of interest payable in respect of such Loan hereunder, together with all Charges payable in respect thereof, shall be limited to the Maximum Rate and, to the extent lawful, the interest and Charges that would have been payable in respect of such Loan but were not payable as a result of the operation of this Section shall be cumulated and the interest and Charges payable to such Lender in respect of other Loans or periods shall be increased (but not above the Maximum Rate therefor) until such cumulated amount, together with interest thereon at the Federal Funds Effective Rate to the date of repayment, shall have been received by such Lender.

 

Section 9.19         No Financial Assistance by Canadian Loan Parties.  Notwithstanding any provision of this Agreement or any of the other Loan Documents to the contrary, no Canadian Loan Party will have any liability hereunder or thereunder for, nor shall any of the assets of any such Canadian Loan Party (including proceeds of any Collateral owned by any such Canadian Loan Party) be applied against or issued to satisfy or offset, any indebtedness, obligations or liabilities (actual or contingent) of any Person which is not indebtedness, an obligation, or a liability of a Canadian Loan Party; provided, that, nothing contained herein shall limit or impair the rights of any Agent, any Lender or any Other Secured Party or the liability or obligation of any Canadian Loan Party with respect to its Obligations, including, without limitation, any Swap Agreements or any agreements related to Banking Services entered into with any Canadian Loan Party.

 

Section 9.20         Export-Related Financing Documents.  In connection with the execution and delivery of any amended, restated, modified, or supplemented Export-Related Financing Documents, the parties hereto further agree to execute any amendment or consent documentation the sole purpose of which is to implement conforming amendments and modifications to this Agreement and/or any other Loan Document as the Administrative Agent determines to be appropriate and necessary in its Permitted Discretion to cure any ambiguity, defect or inconsistency in the Loan Documents as they relate to the Export-Related Financing Documents.

 

ARTICLE X
 LOAN GUARANTY

 

Section 10.1         Guaranty.  Each Loan Guarantor now or hereafter a party hereto hereby agrees that it is jointly and severally liable for, and, as primary obligor and not merely as surety, absolutely and unconditionally guarantees to the Lenders, the Export-Related Lender and the Other Secured Parties the prompt payment when due, whether at stated maturity, upon acceleration or otherwise, and at all times thereafter, of the Secured Obligations and all costs and

 

153

 

expenses including, without limitation, all court costs and attorneys’ and paralegals’ fees (including allocated costs of in-house counsel and paralegals) and expenses paid or incurred by the Agents, the Issuing Bank, the Export-Related Lender and the Lenders in endeavoring to collect all or any part of the Secured Obligations from, or in prosecuting any action against, the Borrowers, any Loan Guarantor or any other guarantor of all or any part of the Secured Obligations (such costs and expenses, together with the Secured Obligations, collectively the “Guaranteed Obligations”).  Each Loan Guarantor further agrees that the Guaranteed Obligations may be extended or renewed in whole or in part without notice to or further assent from it, and that it remains bound upon its guarantee notwithstanding any such extension or renewal. All terms of this Loan Guaranty apply to and may be enforced by or on behalf of any domestic or foreign branch or Affiliate of any Lender and the Export-Related Lender that extended any portion of the Guaranteed Obligations.

 

Section 10.2         Limitation.  Notwithstanding Section 10.1 to the contrary, the obligations of any Loan Guarantors organized under the laws of Canada under this Guaranty shall be limited to that portion of the Guaranteed Obligations relating to the Canadian Borrowers and the other Canadian Loan Parties and represented by the Canadian Secured Obligations.

 

Section 10.3         Guaranty of Payment.  This Loan Guaranty is a guaranty of payment and not of collection. Each Loan Guarantor waives any right to require the Agents, the Issuing Bank, any Lender, the Export-Related Lender and/or any Other Secured Parties to sue the Borrowers, any Loan Guarantor, any other guarantor, or any other person obligated for all or any part of the Guaranteed Obligations (each, an “Obligated Party”), or otherwise to enforce its payment against any collateral securing all or any part of the Guaranteed Obligations.

 

Section 10.4         No Discharge or Diminishment of Loan Guaranty.

 

(a)           Except as otherwise provided for herein, the obligations of each Loan Guarantor hereunder are unconditional and absolute and not subject to any reduction, limitation, impairment or termination for any reason (other than the indefeasible payment in full in cash of the Guaranteed Obligations), including:  (i) any claim of waiver, release, extension, renewal, settlement, surrender, alteration, or compromise of any of the Guaranteed Obligations, by operation of law or otherwise; (ii) any change in the corporate existence, structure or ownership of any Borrower or any other guarantor of or other person liable for any of the Guaranteed Obligations; (iii) any insolvency, bankruptcy, reorganization or other similar proceeding affecting any Obligated Party, or their assets or any resulting release or discharge of any obligation of any Obligated Party; or (iv) the existence of any claim, setoff or other rights which any Loan Guarantor may have at any time against any Obligated Party, any Agent, the Issuing Bank, any Lender, the Export-Related Lender and/or Other Secured Parties or any other person, whether in connection herewith or in any unrelated transactions.

 

(b)           The obligations of each Loan Guarantor hereunder are not subject to any defense or setoff, counterclaim, recoupment, or termination whatsoever by reason of the invalidity, illegality, or unenforceability of any of the Guaranteed Obligations or otherwise, or any provision of applicable law or regulation purporting to prohibit payment by any Obligated Party, of the Guaranteed Obligations or any part thereof.

 

154

 

(c)           Further, the obligations of any Loan Guarantor hereunder are not discharged or impaired or otherwise affected by:  (i) the failure of any Agent, the Issuing Bank, any Lender, the Export-Related Lender and any Other Secured Parties to assert any claim or demand or to enforce any remedy with respect to all or any part of the Guaranteed Obligations; (ii) any waiver or modification of or supplement to any provision of any agreement relating to the Guaranteed Obligations; (iii) any release, non-perfection, or invalidity of any indirect or direct security for the obligations of any Borrower for all or any part of the Guaranteed Obligations or any obligations of any other guarantor of or other person liable for any of the Guaranteed Obligations; (iv) any action or failure to act by any Agent, the Issuing Bank, any Lender, the Export-Related Lender and any Other Secured Parties with respect to any collateral securing any part of the Guaranteed Obligations; or (v) any default, failure or delay, willful or otherwise, in the payment or performance of any of the Guaranteed Obligations, or any other circumstance, act, omission or delay that might in any manner or to any extent vary the risk of such Loan Guarantor or that would otherwise operate as a discharge of any Loan Guarantor as a matter of law or equity (other than the indefeasible payment in full in cash of the Guaranteed Obligations).

 

Section 10.5         Defenses Waived.  To the fullest extent permitted by applicable law, each Loan Guarantor hereby waives any defense based on or arising out of any defense of any Borrower or any Loan Guarantor or the unenforceability of all or any part of the Guaranteed Obligations from any cause, or the cessation from any cause of the liability of any Borrower or any Loan Guarantor, other than the indefeasible payment in full in cash of the Guaranteed Obligations.  Without limiting the generality of the foregoing, each Loan Guarantor irrevocably waives acceptance hereof, presentment, demand, protest and, to the fullest extent permitted by law, any notice not provided for herein, as well as any requirement that at any time any action be taken by any person against any Obligated Party, or any other person.  The US Collateral Agent and the Canadian Collateral Agent may, at their election, foreclose on any Collateral held by it by one or more judicial or nonjudicial sales, accept an assignment of any such Collateral in lieu of foreclosure or otherwise act or fail to act with respect to any collateral securing all or a part of the Guaranteed Obligations, compromise or adjust any part of the Guaranteed Obligations, make any other accommodation with any Obligated Party or exercise any other right or remedy available to it against any Obligated Party, without affecting or impairing in any way the liability of such Loan Guarantor under this Loan Guaranty except to the extent the Guaranteed Obligations have been fully and indefeasibly paid in cash.  To the fullest extent permitted by applicable law, each Loan Guarantor waives any defense arising out of any such election even though that election may operate, pursuant to applicable law, to impair or extinguish any right of reimbursement or subrogation or other right or remedy of any Loan Guarantor against any Obligated Party or any security.

 

Section 10.6         Rights of Subrogation.  No Loan Guarantor will assert any right, claim or cause of action, including, without limitation, a claim of subrogation, contribution or indemnification that it has against any Obligated Party, or any collateral, until the Loan Parties and the Loan Guarantors have fully performed all their obligations to the Agents, the Issuing Bank, the Lenders, the Export-Related Lender and any Other Secured Parties.

 

Section 10.7         Reinstatement; Stay of Acceleration.  If at any time any payment of any portion of the Guaranteed Obligations is rescinded or must otherwise be restored or returned

 

155

 

upon the insolvency, bankruptcy, or reorganization of any Borrower or otherwise, each Loan Guarantor’s obligations under this Loan Guaranty with respect to that payment shall be reinstated at such time as though the payment had not been made and whether or not the Agents, the Issuing Bank, the Lenders, the Export-Related Lender and any Other Secured Parties are in possession of this Loan Guaranty.  If acceleration of the time for payment of any of the Guaranteed Obligations is stayed upon the insolvency, bankruptcy or reorganization of any Borrower, all such amounts otherwise subject to acceleration under the terms of any agreement relating to the Guaranteed Obligations shall nonetheless be payable by the Loan Guarantors forthwith on demand by the Lender, the Export-Related Lender, any Other Secured Parties and the Issuing Bank.

 

Section 10.8         Information.  Each Loan Guarantor assumes all responsibility for being and keeping itself informed of the Borrowers’ financial condition and assets, and of all other circumstances bearing upon the risk of nonpayment of the Guaranteed Obligations and the nature, scope and extent of the risks that each Loan Guarantor assumes and incurs under this Loan Guaranty, and agrees that neither any Agent, the Issuing Bank nor any Lender or the Export-Related Lender shall have any duty to advise any Loan Guarantor of information known to it regarding those circumstances or risks.

 

Section 10.9         Termination.  Each Loan Guarantor acknowledges and agrees that this Loan Guaranty is irrevocable until the Guaranteed Obligations have been paid in full and the Commitments have been terminated.  The Lenders and the Export-Related Lender may continue to make loans or extend credit to the Borrowers based on this Loan Guaranty.  Each Loan Guarantor will continue to be liable to the Lenders and the Export-Related Lender for any Guaranteed Obligations created, assumed or committed from time to time, and all subsequent renewals, extensions, modifications and amendments with respect to, or substitutions for, all or any part of that Guaranteed Obligations.

 

Section 10.10       Taxes.  All payments of the Guaranteed Obligations will be made by each Loan Guarantor free and clear of and without deduction for any Indemnified Taxes; provided that if any Loan Guarantor shall be required to deduct any Indemnified Taxes from such payments, then (a) 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 Administrative Agent, the Canadian Administrative Agent, each Lender, the Issuing Bank, the Export-Related Lender and any Other Secured Parties (as the case may be) receives an amount equal to the sum it would have received had no such deductions been made, (b) such Loan Guarantor shall make such deductions and (c) such Loan Guarantor shall pay the full amount deducted to the relevant Governmental Authority in accordance with applicable law.

 

Section 10.11       Maximum Liability.  The provisions of this Loan Guaranty are severable, and in any action or proceeding involving any state corporate law, or any state, federal or foreign bankruptcy, insolvency, reorganization or other law affecting the rights of creditors generally, if the obligations of any Loan Guarantor under this Loan Guaranty would otherwise be held or determined to be avoidable, invalid or unenforceable on account of the amount of such Loan Guarantor’s liability under this Loan Guaranty, then, notwithstanding any other provision of this Loan Guaranty to the contrary, the amount of such liability shall, without any further action by the Loan Guarantors, the Lenders, the Export-Related Lender or any Other Secured Parties, be

 

156

 

automatically limited and reduced to the highest amount that is valid and enforceable as determined in such action or proceeding (such highest amount determined hereunder being the relevant Loan Guarantor’s “Maximum Liability”).  This Section with respect to the Maximum Liability of each Loan Guarantor is intended solely to preserve the rights of the Lenders and the Export-Related Lender to the maximum extent not subject to avoidance under applicable law, and no Loan Guarantor nor any other person or entity shall have any right or claim under this Section with respect to such Maximum Liability, except to the extent necessary so that the obligations of any Loan Guarantor hereunder shall not be rendered voidable under applicable law.  Each Loan Guarantor agrees that the Guaranteed Obligations may at any time and from time to time exceed the Maximum Liability of each Loan Guarantor without impairing this Loan Guaranty or affecting the rights and remedies of the Lenders, the Export-Related Lender or any Other Secured Parties hereunder, provided that, nothing in this sentence shall be construed to increase any Loan Guarantor’s obligations hereunder beyond its Maximum Liability.

 

Section 10.12       Contribution.  In the event any Loan Guarantor (a “Paying Guarantor”) shall make any payment or payments under this Loan Guaranty or shall suffer any loss as a result of any realization upon any collateral granted by it to secure its obligations under this Loan Guaranty, each other Loan Guarantor (each a “Non-Paying Guarantor”) shall contribute to such Paying Guarantor an amount equal to such Non-Paying Guarantor’s applicable percentage of such payment or payments made, or losses suffered, by such Paying Guarantor.  For purposes of this Article X, each Non-Paying Guarantor’s applicable percentage with respect to any such payment or loss by a Paying Guarantor shall be determined as of the date on which such payment or loss was made by reference to the ratio of (a) such Non-Paying Guarantor’s Maximum Liability as of such date (without giving effect to any right to receive, or obligation to make, any contribution hereunder) or, if such Non-Paying Guarantor’s Maximum Liability has not been determined, the aggregate amount of all monies received by such Non-Paying Guarantor from the Borrowers after the date hereof (whether by loan, capital infusion or by other means) to (b) the aggregate Maximum Liability of all Loan Guarantors hereunder (including such Paying Guarantor) as of such date (without giving effect to any right to receive, or obligation to make, any contribution hereunder), or to the extent that a Maximum Liability has not been determined for any Loan Guarantor, the aggregate amount of all monies received by such Loan Guarantors from the Borrowers after the date hereof (whether by loan, capital infusion or by other means).  Nothing in this provision shall affect any Loan Guarantor’s several liability for the entire amount of the Guaranteed Obligations (up to such Loan Guarantor’s Maximum Liability).  Each of the Loan Guarantors covenants and agrees that its right to receive any contribution under this Loan Guaranty from a Non-Paying Guarantor shall be subordinate and junior in right of payment to the payment in full in cash of the Guaranteed Obligations.  This provision is for the benefit of all of the Agents, the Issuing Bank, the Lenders, the Export-Related Lender, any Other Secured Parties and the Loan Guarantors and may be enforced by any one, or more, or all of them in accordance with the terms hereof.

 

Section 10.13       Liability Cumulative.  The liability of each Loan Party as a Loan Guarantor under this Article X is in addition to and shall be cumulative with all liabilities of each Loan Party to the Agents, the Issuing Bank, the Export-Related Lender, any Other Secured Parties and the Lenders under this Agreement and the other Loan Documents to which such Loan Party is a party or in respect of any obligations or liabilities of the other Loan Parties, without

 

157

 

any limitation as to amount, unless the instrument or agreement evidencing or creating such other liability specifically provides to the contrary.

 

ARTICLE XI
 THE BORROWER REPRESENTATIVES

 

Section 11.1         Appointment; Nature of Relationship.  The Company is hereby appointed by (a) each of the US Borrowers as its contractual representative (herein referred to as the “Borrower Representative US”) hereunder and under each other Loan Document, and each of the US Borrowers irrevocably authorizes the Borrower Representative US to act as the contractual representative of such US Borrower with the rights and duties expressly set forth herein and in the other Loan Documents, and (b) each of the Canadian Borrowers as its contractual representative (herein referred to as the “Borrower Representative Canada”) hereunder and under each other Loan Document, and each of the Canadian Borrowers irrevocably authorizes the Borrower Representative Canada to act as the contractual representative of such Canadian Borrower with the rights and duties expressly set forth herein and in the other Loan Documents.  Each of the Borrowers further irrevocably authorizes both Borrower Representatives to act as the contractual representative of such Borrower with the rights and duties expressly set forth herein and in the other Loan Documents. The Borrower Representatives agree to act as such contractual representative upon the express conditions contained in this Article XI.  Additionally, the Borrowers hereby appoint the Borrower Representatives, as applicable, as their agent to receive all of the proceeds of the Loans in the Canadian Funding Account(s) and the US Funding Account(s) (as applicable), at which time the Borrower Representatives shall promptly disburse such Loans to the appropriate Borrower.  The Agents and the Lenders, and their respective officers, directors, agents or employees, shall not be liable to the Borrower Representatives or any Borrower for any action taken or omitted to be taken by the Borrower Representatives or the Borrowers pursuant to this Section 11.1.

 

Section 11.2         Powers.  The Borrower Representatives shall have and may exercise such powers under the Loan Documents as are specifically delegated to the Borrower Representatives by the terms of each thereof, together with such powers as are reasonably incidental thereto.  The Borrower Representatives shall have no implied duties to the Borrowers, or any obligation to the Lenders to take any action thereunder except any action specifically provided by the Loan Documents to be taken by the Borrower Representatives.

 

Section 11.3         Employment of Agents.  The Borrower Representatives may execute any of their duties as the Borrower Representatives hereunder and under any other Loan Document by or through authorized officers.

 

Section 11.4         Notices.  Each Borrower shall immediately notify its Borrower Representative of the occurrence of any Default or Event of Default hereunder referring to this Agreement describing such Default or Event of Default and stating that such notice is a “notice of default.”  In the event that a Borrower Representative receives such a notice, such Borrower Representative shall give prompt notice thereof to the Administrative Agent and the Lenders.  Any notice provided to a Borrower Representative hereunder shall constitute notice to each Borrower on the date received by such Borrower Representative.

 

158

 

Section 11.5         Successor Borrower Representative.  Upon the prior written consent of the Administrative Agent, a Borrower Representative may resign at any time, such resignation to be effective upon the appointment of a successor Borrower Representative; provided that any such successor Borrower Representative must be a Canadian Borrower, in the case of the Borrower Representative Canadian, and a US Borrower, in the case of the Borrower Representative US.  The Administrative Agent shall give prompt written notice of such resignation and appointment of a successor to the Lenders.

 

Section 11.6         Execution of Loan Documents; Borrowing Base Certificates.  The Borrowers hereby empower and authorize the Borrower Representatives, on behalf of the Borrowers (as applicable), to execute and deliver to the Administrative Agent and the Lenders the Loan Documents and all related agreements, certificates, documents, or instruments as shall be necessary or appropriate to effect the purposes of the Loan Documents, including without limitation, the Canadian Borrowing Base Certificates, the Export-Related Borrowing Base Certificates, the US Borrowing Base Certificates and the Compliance Certificates.  Each Borrower agrees that any action taken by the Borrower Representatives or the Borrowers in accordance with the terms of this Agreement or the other Loan Documents, and the exercise by the Borrower Representatives of their powers set forth therein or herein, together with such other powers that are reasonably incidental thereto, shall be binding upon all of the Borrowers.

 

Section 11.7         Reporting.  Each Borrower hereby agrees that such Borrower shall furnish promptly after each fiscal month to its Borrower Representative a copy of its borrowing base certificate and any other certificate or report required hereunder or requested by its Borrower Representative on which the Borrower Representative shall rely to prepare the Canadian Borrowing Base Certificates, the Export-Related Borrowing Base Certificates, the US Borrowing Base Certificates and the Compliance Certificates required pursuant to the provisions of this Agreement.

 

[Signature Pages Follow]

 

159

 

IN WITNESS WHEREOF, the parties hereto have caused this Agreement to be duly executed by their respective authorized officers as of the day and year first above written.

 

 

	
 
    	
STEWART &   STEVENSON LLC, a Delaware limited liability company
    
	
 
    	
 
    
	
 
    	
 
    
	
 
    	
By:
    	
/s/   John B. Simmons
    
	
 
    	
Name:   
    	
John   B. Simmons
    
	
 
    	
Title:
    	
Chief   Financial Officer
    
	
 
    	
 
    
	
 
    	
STEWART &   STEVENSON DISTRIBUTOR HOLDINGS LLC, a Delaware limited   liability company
    
	
 
    	
 
    
	
 
    	
By:  Stewart & Stevenson LLC, its sole   member
    
	
 
    	
 
    
	
 
    	
 
    
	
 
    	
 
    	
By:
    	
/s/   John B. Simmons
    
	
 
    	
 
    	
Name:
    	
John   B. Simmons
    
	
 
    	
 
    	
Title:
    	
Chief   Financial Officer
    
	
 
    	
 
    
	
 
    	
STEWART &   STEVENSON POWER PRODUCTS LLC, a Delaware limited   liability company
    
	
 
    	
 
    
	
 
    	
By:  Stewart & Stevenson LLC, its sole   member
    
	
 
    	
 
    
	
 
    	
 
    
	
 
    	
 
    	
By:
    	
/s/   John B. Simmons
    
	
 
    	
 
    	
Name:
    	
John   B. Simmons
    
	
 
    	
 
    	
Title:
    	
Chief   Financial Officer
    
	
 
    	
 
    
	
 
    	
STEWART &   STEVENSON PETROLEUM SERVICES LLC, a Delaware limited   liability company
    
	
 
    	
 
    
	
 
    	
By:  Stewart & Stevenson LLC, its sole   member
    
	
 
    	
 
    
	
 
    	
 
    
	
 
    	
 
    	
By:
    	
/s/   John B. Simmons
    
	
 
    	
 
    	
Name:
    	
John   B. Simmons
    
	
 
    	
 
    	
Title:
    	
Chief   Financial Officer
    

 

[SIGNATURE PAGE TO THIRD AMENDED AND RESTATED CREDIT AGREEMENT —

STEWART & STEVENSON]

 

 

	
 
    	
STEWART &   STEVENSON FUNDING CORP., a Delaware corporation
    
	
 
    	
 
    
	
 
    	
By:
    	
/s/   John B. Simmons
    
	
 
    	
Name:   
    	
John   B. Simmons
    
	
 
    	
Title:
    	
Treasurer
    
	
 
    	
 
    	
 
    
	
 
    	
STEWART &   STEVENSON MATERIAL HANDLING LLC, a Delaware limited   liability company
    
	
 
    	
 
    
	
 
    	
By:  Stewart & Stevenson LLC, its sole   member
    
	
 
    	
 
    
	
 
    	
 
    
	
 
    	
 
    	
By:
    	
/s/   John B. Simmons
    
	
 
    	
 
    	
Name:
    	
John   B. Simmons
    
	
 
    	
 
    	
Title:
    	
Chief   Financial Officer
    
	
 
    	
 
    
	
 
    	
 
    
	
 
    	
STEWART & STEVENSON   MANUFACTURING TECHNOLOGIES LLC,   a Delaware limited liability company
    
	
 
    	
 
    
	
 
    	
By:  Stewart & Stevenson LLC, its sole   member
    
	
 
    	
 
    
	
 
    	
 
    
	
 
    	
 
    	
By:
    	
/s/   John B. Simmons
    
	
 
    	
 
    	
Name:
    	
John   B. Simmons
    
	
 
    	
 
    	
Title:
    	
Chief   Financial Officer
    
	
 
    	
 
    
	
 
    	
 
    
	
 
    	
EMDSI-HUNT POWER, L.L.C., a Delaware limited liability company
    
	
 
    	
 
    
	
 
    	
By:  Stewart & Stevenson LLC, its sole   member
    
	
 
    	
 
    
	
 
    	
 
    
	
 
    	
 
    	
By:
    	
/s/   John B. Simmons
    
	
 
    	
 
    	
Name:
    	
John   B. Simmons
    
	
 
    	
 
    	
Title:
    	
Chief   Financial Officer
    

 

[SIGNATURE PAGE TO THIRD AMENDED AND RESTATED CREDIT AGREEMENT —

STEWART & STEVENSON]

 

 

	
 
    	
STEWART &   STEVENSON CANADA INC., a New Brunswick corporation
    
	
 
    	
 
    
	
 
    	
 
    
	
 
    	
By:
    	
/s/   Robert L. Hargrave
    
	
 
    	
Name:   
    	
Robert   L. Hargrave
    
	
 
    	
Title:
    	
President
    

 

[SIGNATURE PAGE TO THIRD AMENDED AND RESTATED CREDIT AGREEMENT —

STEWART & STEVENSON]

 

 

	
 
    	
JPMORGAN   CHASE BANK, N.A., individually as a US Lender, as the   Administrative Agent, the US Collateral Agent, the Issuing Bank and the   Swingline Lender
    
	
 
    	
 
    
	
 
    	
 
    
	
 
    	
By:
    	
/s/   Christy L. West
    
	
 
    	
Name:
    	
Christy   L. West
    
	
 
    	
Title:
    	
Authorized   Officer
    
	
 
    	
 
    
	
 
    	
 
    
	
 
    	
JPMORGAN   CHASE BANK, N.A., TORONTO BRANCH, individually as a   Canadian Lender, as the Canadian Administrative Agent and the Canadian   Collateral Agent
    
	
 
    	
 
    
	
 
    	
 
    
	
 
    	
By:
    	
/s/   Michael N. Tam
    
	
 
    	
Name:
    	
Michael   N. Tam
    
	
 
    	
Title:
    	
Senior   Vice President
    
	
 
    	
 
    
	
 
    	
 
    
	
 
    	
JPMORGAN   CHASE BANK, N.A., as the Export-Related Lender
    
	
 
    	
 
    
	
 
    	
 
    
	
 
    	
By:
    	
/s/   Randall Mascorro
    
	
 
    	
Name:
    	
Randall   Mascorro
    
	
 
    	
Title:
    	
Authorized   Officer
    

 

[SIGNATURE PAGE TO THIRD AMENDED AND RESTATED CREDIT AGREEMENT —

STEWART & STEVENSON]

 

 

	
 
    	
WELLS   FARGO BANK, NATIONAL ASSOCIATION, as the Syndication Agent   and a US Lender
    
	
 
    	
 
    	
 
    
	
 
    	
 
    	
 
    
	
 
    	
By:
    	
/s/   Thomas Forbath
    
	
 
    	
Name:
    	
Thomas   Forbath
    
	
 
    	
Title:
    	
Vice   President
    
	
 
    	
 
    
	
 
    	
 
    
	
 
    	
WELLS   FARGO CAPITAL FINANCE CORPORATION CANADA, as a Canadian Lender
    
	
 
    	
 
    	
 
    
	
 
    	
 
    	
 
    
	
 
    	
By:
    	
/s/   Domenic Cosentino
    
	
 
    	
Name:
    	
Domenic   Cosentino
    
	
 
    	
Title:
    	
Vice   President
    

 

[SIGNATURE PAGE TO THIRD AMENDED AND RESTATED CREDIT AGREEMENT —

STEWART & STEVENSON]

 

 

	
 
    	
SUNTRUST   BANK, as a US Lender
    
	
 
    	
 
    
	
 
    	
 
    
	
 
    	
By:
    	
/s/   David Holland
    
	
 
    	
Name:
    	
David   Holland
    
	
 
    	
Title:
    	
VP,   Portfolio Manager
    
	
 
    	
 
    
	
 
    	
 
    
	
 
    	
SUNTRUST   BANK, as a Canadian Lender
    
	
 
    	
 
    
	
 
    	
 
    
	
 
    	
By:
    	
/s/ David Holland
    
	
 
    	
Name:
    	
David Holland
    
	
 
    	
Title:
    	
VP, Portfolio Manager
    

 

[SIGNATURE PAGE TO THIRD AMENDED AND RESTATED CREDIT AGREEMENT —

STEWART & STEVENSON]

 

 

	
 
    	
PNC   BANK, NATIONAL ASSOCIATION, as a US Lender
    
	
 
    	
 
    
	
 
    	
 
    
	
 
    	
By:
    	
/s/   Brad Higgins
    
	
 
    	
Name:
    	
Brad   Higgins
    
	
 
    	
Title:
    	
Vice   President
    
	
 
    	
 
    
	
 
    	
 
    
	
 
    	
PNC   BANK CANADA BRANCH, as a Canadian Lender
    
	
 
    	
 
    
	
 
    	
 
    
	
 
    	
By:
    	
/s/   Mike Danby 
    
	
 
    	
Name:
    	
Mike   Danby 
    
	
 
    	
Title:
    	
Assistant   Vice President
    

 

[SIGNATURE PAGE TO THIRD AMENDED AND RESTATED CREDIT AGREEMENT —

STEWART & STEVENSON]

 

 

	
 
    	
U.S.   BANK NATIONAL ASSOCIATION, as a US Lender
    
	
 
    	
 
    
	
 
    	
 
    
	
 
    	
By:
    	
/s/   Matthew Kasper
    
	
 
    	
Name:
    	
Matthew   Kasper
    
	
 
    	
Title:
    	
Portfolio   Manager
    
	
 
    	
 
    
	
 
    	
 
    
	
 
    	
U.S.   BANK NATIONAL ASSOCIATION CANADA BRANCH, as a Canadian Lender
    
	
 
    	
 
    
	
 
    	
 
    
	
 
    	
By:
    	
/s/   Joseph Rauhala 
    
	
 
    	
Name:
    	
Joseph   Rauhala 
    
	
 
    	
Title:
    	
Principal   Officer
    

 

[SIGNATURE PAGE TO THIRD AMENDED AND RESTATED CREDIT AGREEMENT —

STEWART & STEVENSON]

 

 

	
 
    	
 
    
	
 
    	
CITY   NATIONAL BANK, as a US Lender
    
	
 
    	
 
    
	
 
    	
 
    
	
 
    	
By:
    	
/s/   Robert Yasuda
    
	
 
    	
Name:
    	
Robert   Yasuda
    
	
 
    	
Title:
    	
Vice   President
    
	
 
    	
 
    
	
 
    	
 
    
	
 
    	
CITY   NATIONAL BANK, as a Canadian Lender
    
	
 
    	
 
    
	
 
    	
 
    
	
 
    	
By:
    	
/s/ Robert Yasuda
    
	
 
    	
Name:
    	
Robert Yasuda
    
	
 
    	
Title:
    	
Vice President
    

 

[SIGNATURE PAGE TO THIRD AMENDED AND RESTATED CREDIT AGREEMENT —

STEWART & STEVENSON]

 

 

	
 
    	
FROST   NATIONAL BANK, as a US Lender
    
	
 
    	
 
    
	
 
    	
 
    
	
 
    	
By:
    	
/s/   Richard Mann III
    
	
 
    	
Name:
    	
Richard   Mann III
    
	
 
    	
Title:
    	
Market   President
    
	
 
    	
 
    
	
 
    	
 
    
	
 
    	
FROST   NATIONAL BANK, as a Canadian Lender
    
	
 
    	
 
    
	
 
    	
 
    
	
 
    	
By:
    	
/s/ Richard Mann III
    
	
 
    	
Name:
    	
Richard Mann III
    
	
 
    	
Title:
    	
Market President
    

 

[SIGNATURE PAGE TO THIRD AMENDED AND RESTATED CREDIT AGREEMENT —

STEWART & STEVENSON]

 

 

COMMITMENT SCHEDULE

 

	
Lender
    	
 
    	
US Revolving
   Commitment(1)(2)
    	
 
    	
Canadian Revolving
   Commitment
    	
 
    	
Commitment(3)
    	
 
    
	
JPMorgan Chase Bank, N.A.
    	
 
    	
$
    	
75,000,000.00
    	
 
    	
$
    	
0.00
    	
 
    	
$
    	
75,000,000.00
    	
 
    
	
JPMorgan Chase Bank, N.A., Toronto Branch
    	
 
    	
$
    	
0.00
    	
 
    	
$
    	
7,500,000.00
    	
 
    	
$
    	
7,500,000.00
    	
 
    
	
Wells Fargo Bank, National Association
    	
 
    	
$
    	
60,000,000.00
    	
 
    	
$
    	
0.00
    	
 
    	
$
    	
60,000,000.00
    	
 
    
	
Wells Fargo Capital Finance Corporation Canada
    	
 
    	
$
    	
0.00
    	
 
    	
$
    	
6,000,000.00
    	
 
    	
$
    	
6,000,000.00
    	
 
    
	
SunTrust Bank
    	
 
    	
$
    	
40,000,000.00
    	
 
    	
$
    	
4,000,000.00
    	
 
    	
$
    	
40,000,000.00
    	
 
    
	
PNC Bank, National Association
    	
 
    	
$
    	
30,000,000.00
    	
 
    	
$
    	
0.00
    	
 
    	
$
    	
30,000,000.00
    	
 
    
	
PNC Bank Canada Branch
    	
 
    	
$
    	
0.00
    	
 
    	
$
    	
3,000,000.00
    	
 
    	
$
    	
3,000,000.00
    	
 
    
	
U.S. Bank National Association
    	
 
    	
$
    	
17,500,000.00
    	
 
    	
$
    	
0.00
    	
 
    	
$
    	
17,500,000.00
    	
 
    
	
U.S. Bank National Association Canada Branch
    	
 
    	
$
    	
0.00
    	
 
    	
$
    	
1,750,000.00
    	
 
    	
$
    	
1,750,000.00
    	
 
    
	
City National Bank
    	
 
    	
$
    	
15,000,000.00
    	
 
    	
$
    	
1,500,000.00
    	
 
    	
$
    	
15,000,000.00
    	
 
    
	
Frost National Bank
    	
 
    	
$
    	
12,500,000.00
    	
 
    	
$
    	
1,250,000.00
    	
 
    	
$
    	
12,500,000.00
    	
 
    
	
Total
    	
 
    	
$
    	
250,000,000.00
    	
 
    	
$
    	
25,000,000.00
    	
 
    	
$
    	
250,000,000.00
    	
 
    

 

(1)  The US Revolving Commitment will be reduced by the principal amount of the Obligations owing with respect to Canadian Revolving  Loans at any time.

(2)  The US Revolving Commitment will be reduced by the principal amount of the Export-Related Obligations owing at any time.

(3)  The Canadian Revolving Commitment is a sub-facility of the US Revolving Commitment and therefore does not increase the total Commitments of the Lenders above the total US Revolving Commitments.EXHIBIT 4.11

 

 

 

ANACOR PHARMACEUTICALS, INC.

ISSUER

AND

[TRUSTEE],

TRUSTEE

 

INDENTURE

 

DATED AS OF [            ], 20

SENIOR DEBT SECURITIES

 

 

 

 

TABLE OF CONTENTS(1)

 

	
 
    	
 
    	
Page
    
	
ARTICLE 1 DEFINITIONS
    	
1
    
	
Section 1.01
    	
Definitions   Of Terms
    	
1
    
	
 
    	
 
    	
 
    
	
ARTICLE 2 ISSUE,   DESCRIPTION, TERMS, EXECUTION, REGISTRATION AND EXCHANGE OF SECURITIES
    	
3
    
	
Section 2.01
    	
Designation   And Terms Of Securities
    	
3
    
	
Section 2.02
    	
Form Of   Securities And Trustee’s Certificate
    	
5
    
	
Section 2.03
    	
Denominations:   Provisions For Payment
    	
5
    
	
Section 2.04
    	
Execution   And Authentications
    	
7
    
	
Section 2.05
    	
Registration   Of Transfer And Exchange
    	
7
    
	
Section 2.06
    	
Temporary   Securities
    	
8
    
	
Section 2.07
    	
Mutilated,   Destroyed, Lost Or Stolen Securities
    	
8
    
	
Section 2.08
    	
Cancellation
    	
9
    
	
Section 2.09
    	
Benefits   Of Indenture
    	
9
    
	
Section 2.10
    	
Authenticating   Agent
    	
9
    
	
Section 2.11
    	
Global   Securities
    	
9
    
	
 
    	
 
    	
 
    
	
ARTICLE 3 REDEMPTION   OF SECURITIES AND SINKING FUND PROVISIONS
    	
10
    
	
Section 3.01
    	
Redemption
    	
10
    
	
Section 3.02
    	
Notice   Of Redemption
    	
10
    
	
Section 3.03
    	
Payment   Upon Redemption
    	
11
    
	
Section 3.04
    	
Sinking   Fund
    	
11
    
	
Section 3.05
    	
Satisfaction   Of Sinking Fund Payments With Securities
    	
12
    
	
Section 3.06
    	
Redemption   Of Securities For Sinking Fund
    	
12
    
	
 
    	
 
    	
 
    
	
ARTICLE 4 COVENANTS
    	
12
    
	
Section 4.01
    	
Payment   Of Principal, Premium And Interest
    	
12
    
	
Section 4.02
    	
Maintenance   Of Office Or Agency
    	
12
    
	
Section 4.03
    	
Paying   Agents
    	
13
    
	
Section 4.04
    	
Appointment   To Fill Vacancy In Office Of Trustee
    	
13
    
	
Section 4.05
    	
Compliance   With Consolidation Provisions
    	
13
    
	
 
    	
 
    	
 
    
	
ARTICLE 5   SECURITYHOLDERS’ LISTS AND REPORTS BY THE COMPANY AND THE TRUSTEE
    	
14
    
	
Section 5.01
    	
Company   To Furnish Trustee Names And Addresses Of Securityholders
    	
14
    
	
Section 5.02
    	
Preservation   Of Information; Communications With Securityholders
    	
14
    
	
Section 5.03
    	
Reports   By The Company
    	
14
    
	
Section 5.04
    	
Reports   By The Trustee
    	
14
    
	
 
    	
 
    	
 
    
	
ARTICLE 6 REMEDIES   OF THE TRUSTEE AND SECURITYHOLDERS ON EVENT OF DEFAULT
    	
15
    
	
Section 6.01
    	
Events   Of Default
    	
15
    
	
Section 6.02
    	
Collection   Of Indebtedness And Suits For Enforcement By Trustee
    	
16
    
	
Section 6.03
    	
Application   Of Moneys Collected
    	
17
    
	
Section 6.04
    	
Limitation   On Suits
    	
17
    

 

i

 

	
 
    	
 
    	
Page
    
	
Section 6.05
    	
Rights   And Remedies Cumulative; Delay Or Omission Not Waiver
    	
18
    
	
Section 6.06
    	
Control   By Securityholders
    	
18
    
	
Section 6.07
    	
Undertaking   To Pay Costs
    	
18
    
	
 
    	
 
    	
 
    
	
ARTICLE 7 CONCERNING   THE TRUSTEE
    	
19
    
	
Section 7.01
    	
Certain   Duties And Responsibilities Of Trustee
    	
19
    
	
Section 7.02
    	
Certain   Rights Of Trustee
    	
19
    
	
Section 7.03
    	
Trustee   Not Responsible For Recitals Or Issuance Or Securities
    	
21
    
	
Section 7.04
    	
May Hold   Securities
    	
21
    
	
Section 7.05
    	
Moneys   Held In Trust
    	
21
    
	
Section 7.06
    	
Compensation   And Reimbursement
    	
21
    
	
Section 7.07
    	
Reliance   On Officers’ Certificate
    	
22
    
	
Section 7.08
    	
Disqualification;   Conflicting Interests
    	
22
    
	
Section 7.09
    	
Corporate   Trustee Required; Eligibility
    	
22
    
	
Section 7.10
    	
Resignation   And Removal; Appointment Of Successor
    	
22
    
	
Section 7.11
    	
Acceptance   Of Appointment By Successor
    	
23
    
	
Section 7.12
    	
Merger,   Conversion, Consolidation Or Succession To Business
    	
24
    
	
Section 7.13
    	
Preferential   Collection Of Claims Against The Company
    	
24
    
	
Section 7.14
    	
Notice   Of Default
    	
24
    
	
 
    	
 
    	
 
    
	
ARTICLE 8 CONCERNING   THE SECURITYHOLDERS
    	
24
    
	
Section 8.01
    	
Evidence   Of Action By Securityholders
    	
24
    
	
Section 8.02
    	
Proof   Of Execution By Securityholders
    	
25
    
	
Section 8.03
    	
Who   May Be Deemed Owners
    	
25
    
	
Section 8.04
    	
Certain   Securities Owned By Company Disregarded
    	
25
    
	
Section 8.05
    	
Actions   Binding On Future Securityholders
    	
25
    
	
 
    	
 
    	
 
    
	
ARTICLE 9 SUPPLEMENTAL   INDENTURES
    	
26
    
	
Section 9.01
    	
Supplemental   Indentures Without The Consent Of Securityholders
    	
26
    
	
Section 9.02
    	
Supplemental   Indentures With Consent Of Securityholders
    	
27
    
	
Section 9.03
    	
Effect   Of Supplemental Indentures
    	
27
    
	
Section 9.04
    	
Securities   Affected By Supplemental Indentures
    	
27
    
	
Section 9.05
    	
Execution   Of Supplemental Indentures
    	
27
    
	
 
    	
 
    	
 
    
	
ARTICLE 10 SUCCESSOR   ENTITY
    	
28
    
	
Section 10.01
    	
Company   May Consolidate, Etc.
    	
28
    
	
Section 10.02
    	
Successor   Entity Substituted
    	
28
    
	
 
    	
 
    	
 
    
	
ARTICLE 11 SATISFACTION   AND DISCHARGE
    	
28
    
	
Section 11.01
    	
Satisfaction   And Discharge Of Indenture
    	
28
    
	
Section 11.02
    	
Discharge   Of Obligations
    	
29
    
	
Section 11.03
    	
Deposited   Moneys To Be Held In Trust
    	
29
    
	
Section 11.04
    	
Payment   Of Moneys Held By Paying Agents
    	
29
    
	
Section 11.05
    	
Repayment   To Company
    	
29
    
	
 
    	
 
    	
 
    
	
ARTICLE 12 IMMUNITY   OF INCORPORATORS, STOCKHOLDERS, OFFICERS AND DIRECTORS
    	
30
    
	
Section 12.01
    	
No   Recourse
    	
30
    
	
 
    	
 
    	
 
    
	
ARTICLE 13 MISCELLANEOUS   PROVISIONS
    	
30
    
	
Section 13.01
    	
Effect   On Successors And Assigns
    	
30
    
	
Section 13.02
    	
Actions   By Successor
    	
30
    
	
Section 13.03
    	
Surrender   Of Company Powers
    	
30
    
	
Section 13.04
    	
Notices
    	
30
    
	
Section 13.05
    	
Governing   Law
    	
31
    
	
Section 13.06
    	
Treatment   Of Securities As Debt
    	
31
    
	
Section 13.07
    	
Certificates   And Opinions As To Conditions Precedent
    	
31
    
	
Section 13.08
    	
Payments   On Business Days
    	
31
    
	
Section 13.09
    	
Conflict   With Trust Indenture Act
    	
31
    
	
Section 13.10
    	
Counterparts
    	
31
    
	
Section 13.11
    	
Separability
    	
31
    
	
Section 13.12
    	
Compliance   Certificates
    	
32
    

 

	
(1)
    	
 
    	
The   Table of Contents does not constitute part of the Indenture and shall not   have any bearing on the interpretation of any of its terms or provisions.
    

 

ii

 

INDENTURE

 

INDENTURE, dated as of             , 20    , among ANACOR PHARMACEUTICALS, INC., a Delaware corporation (the “Company”), and [TRUSTEE], as trustee (the “Trustee”):

 

WHEREAS, for its lawful corporate purposes, the Company has duly authorized the execution and delivery of this Indenture to provide for the issuance of senior debt securities (hereinafter referred to as the “Securities”), in an unlimited aggregate principal amount to be issued from time to time in one or more series as in this Indenture provided, as registered Securities without coupons, to be authenticated by the certificate of the Trustee;

 

WHEREAS, to provide the terms and conditions upon which the Securities are to be authenticated, issued and delivered, the Company has duly authorized the execution of this Indenture; and

 

WHEREAS, all things necessary to make this Indenture a valid agreement of the Company, in accordance with its terms, have been done.

 

NOW, THEREFORE, in consideration of the premises and the purchase of the Securities by the holders thereof, it is mutually covenanted and agreed as follows for the equal and ratable benefit of the holders of Securities:

 

ARTICLE 1

DEFINITIONS

 

Section 1.01 Definitions Of Terms.

 

The terms defined in this Section (except as in this Indenture or any indenture supplemental hereto otherwise expressly provided or unless the context otherwise requires) for all purposes of this Indenture and of any indenture supplemental hereto shall have the respective meanings specified in this Section and shall include the plural as well as the singular. All other terms used in this Indenture that are defined in the Trust Indenture Act of 1939, as amended, or that are by reference in such Act defined in the Securities Act of 1933, as amended (except as herein or any indenture supplemental hereto otherwise expressly provided or unless the context otherwise requires), shall have the meanings assigned to such terms in said Trust Indenture Act and in said Securities Act as in force at the date of the execution of this instrument.

 

“Authenticating Agent” means an authenticating agent with respect to all or any of the series of Securities appointed by the Trustee pursuant to Section 2.10.

 

“Bankruptcy Law” means Title 11, U.S. Code, or any similar federal or state law for the relief of debtors.

 

“Board of Directors” means the Board of Directors of the Company or any duly authorized committee of such Board.

 

“Board Resolution” means a copy of a resolution certified by the Secretary or an Assistant Secretary of the Company to have been duly adopted by the Board of Directors and to be in full force and effect on the date of such certification.

 

“Business Day” means, with respect to any series of Securities, any day other than a day on which federal or state banking institutions in the Borough of Manhattan, the City of New York, or in the city of the Corporate Trust Office of the Trustee, are authorized or obligated by law, executive order or regulation to close.

 

“Certificate” means a certificate signed by any Officer. The Certificate need not comply with the provisions of Section 13.07.

 

“Company” means Anacor Pharmaceuticals, Inc., a corporation duly organized and existing under the laws of the State of Delaware, and, subject to the provisions of Article Ten, shall also include its successors and assigns.

 

“Corporate Trust Office” means the office of the Trustee at which, at any particular time, its corporate trust business shall be principally administered, which office at the date hereof is located at .

 

“Custodian” means any receiver, trustee, assignee, liquidator or similar official under any Bankruptcy Law.

 

1

 

“Depositary” means, with respect to Securities of any series for which the Company shall determine that such Securities will be issued as a Global Security, The Depository Trust Company, New York, New York, another clearing agency, or any successor registered as a clearing agency under the Securities and Exchange Act of 1934, as amended (the “Exchange Act”), or other applicable statute or regulation, which, in each case, shall be designated by the Company pursuant to either Section 2.01 or 2.11.

 

“Event of Default” means, with respect to Securities of a particular series, any event specified in Section 6.01, continued for the period of time, if any, therein designated.

 

“Exchange Act” means the United States Securities and Exchange Act of 1934, as amended.

 

“Global Security” means, with respect to any series of Securities, a Security executed by the Company and delivered by the Trustee to the Depositary or pursuant to the Depositary’s instruction, all in accordance with the Indenture, which shall be registered in the name of the Depositary or its nominee.

 

“Governmental Obligations” means securities that are (a) direct obligations of the United States of America for the payment of which its full faith and credit is pledged or (b) obligations of a Person controlled or supervised by and acting as an agency or instrumentality of the United States of America, the payment of which is unconditionally guaranteed as a full faith and credit obligation by the United States of America that, in either case, are not callable or redeemable at the option of the issuer thereof at any time prior to the stated maturity of the Securities, and shall also include a depositary receipt issued by a bank or trust company as custodian with respect to any such Governmental Obligation or a specific payment of principal of or interest on any such Governmental Obligation held by such custodian for the account of the holder of such depositary receipt; provided, however, that (except as required by law) such custodian is not authorized to make any deduction from the amount payable to the holder of such depositary receipt from any amount received by the custodian in respect of the Governmental Obligation or the specific payment of principal of or interest on the Governmental Obligation evidenced by such depositary receipt.

 

“Herein”, “Hereof” and “Hereunder”, and other words of similar import, refer to this Indenture as a whole and not to any particular Article, Section or other subdivision.

 

“Indenture” means this instrument as originally executed or as it may from time to time be supplemented or amended by one or more indentures supplemental hereto entered into in accordance with the terms hereof and shall include the terms of particular series of Securities established as contemplated by Section 2.01.

 

“Interest Payment Date”, when used with respect to any installment of interest on a Security of a particular series, means the date specified in such Security or in a Board Resolution or in an indenture supplemental hereto with respect to such series as the fixed date on which an installment of interest with respect to Securities of that series is due and payable.

 

“Officer” means, with respect to the Company, the chairman of the Board of Directors, a chief executive officer, a president, a chief financial officer, a chief operating officer, any executive vice president, any senior vice president, any vice president, the treasurer or any assistant treasurer, the controller or any assistant controller or the secretary or any assistant secretary.

 

“Officer’s Certificate” means a certificate signed by any Officer. Each such certificate shall include the statements provided for in Section 13.07, if and to the extent required by the provisions thereof.

 

“Opinion Of Counsel” means an opinion in writing subject to customary exceptions of legal counsel, who may be an employee of or counsel for the Company, that is delivered to the Trustee in accordance with the terms hereof. Each such opinion shall include the statements provided for in Section 13.07, if and to the extent required by the provisions thereof.

 

“Outstanding”, when used with reference to Securities of any series, means, subject to the provisions of Section 8.04, as of any particular time, all Securities of that series theretofore authenticated and delivered by the Trustee under this Indenture, except (a) Securities theretofore canceled by the Trustee or any paying agent, or delivered to the Trustee or any paying agent for cancellation or that have previously been canceled; (b) Securities or portions thereof for the payment or redemption of which moneys or Governmental Obligations in the necessary amount shall have been deposited in trust with the Trustee or with any paying agent (other than the Company) or 

 

2

 

shall have been set aside and segregated in trust by the Company (if the Company shall act as its own paying agent); provided, however, that if such Securities or portions of such Securities are to be redeemed prior to the maturity thereof, notice of such redemption shall have been given as provided in Article Three, or provision satisfactory to the Trustee shall have been made for giving such notice; and (c) Securities in lieu of or in substitution for which other Securities shall have been authenticated and delivered pursuant to the terms of Section 2.07.

 

“Person” means any individual, corporation, partnership, joint venture, joint-stock company, limited liability company, association, trust, unincorporated organization, any other entity or organization, including a government or political subdivision or an agency or instrumentality thereof.

 

“Predecessor Security” of any particular Security means every previous Security evidencing all or a portion of the same debt as that evidenced by such particular Security; and, for the purposes of this definition, any Security authenticated and delivered under Section 2.07 in lieu of a lost, destroyed or stolen Security shall be deemed to evidence the same debt as the lost, destroyed or stolen Security.

 

“Responsible Officer” when used with respect to the Trustee means the chairman of its board of directors, the chief executive officer, the president, any vice president, the secretary, the treasurer, any trust officer, any corporate trust officer or any other officer or assistant officer of the Trustee customarily performing functions similar to those performed by the Persons who at the time shall be such officers, respectively, or to whom any corporate trust matter is referred because of his or her knowledge of and familiarity with the particular subject.

 

“Securities” has the meaning stated in the first recital of this Indenture and more particularly means any Securities authenticated and delivered under this Indenture.

 

“Securityholder”, “holder of Securities”, “registered holder”, or other similar term, means the Person or Persons in whose name or names a particular Security is registered on the Security Register kept for that purpose in accordance with the terms of this Indenture.

 

“Security Register” and “Security Registrar” shall have the meanings as set forth in Section 2.05.

 

“Subsidiary” means, with respect to any Person, (i) any corporation at least a majority of whose outstanding Voting Stock shall at the time be owned, directly or indirectly, by such Person or by one or more of its Subsidiaries or by such Person and one or more of its Subsidiaries, (ii) any general partnership, joint venture or similar entity, at least a majority of whose outstanding partnership or similar interests shall at the time be owned by such Person, or by one or more of its Subsidiaries, or by such Person and one or more of its Subsidiaries and (iii) any limited partnership of which such Person or any of its Subsidiaries is a general partner.

 

“Trustee” means                      , and, subject to the provisions of Article Seven, shall also include its successors and assigns, and, if at any time there is more than one Person acting in such capacity hereunder, “Trustee” shall mean each such Person. The term “Trustee” as used with respect to a particular series of the Securities shall mean the trustee with respect to that series.

 

“Trust Indenture Act” means the Trust Indenture Act of 1939, as amended.

 

“Voting Stock”, as applied to stock of any Person, means shares, interests, participations or other equivalents in the equity interest (however designated) in such Person having ordinary voting power for the election of a majority of the directors (or the equivalent) of such Person, other than shares, interests, participations or other equivalents having such power only by reason of the occurrence of a contingency.

 

ARTICLE 2

 

ISSUE, DESCRIPTION, TERMS, EXECUTION, REGISTRATION AND EXCHANGE OF SECURITIES

 

Section 2.01 Designation And Terms Of Securities.

 

(a) The aggregate principal amount of Securities that may be authenticated and delivered under this Indenture is unlimited. The Securities may be issued in one or more series up to the aggregate principal amount of Securities of that series from time to time authorized by or pursuant to a Board Resolution or pursuant to one or more indentures supplemental hereto. Prior to the initial issuance of Securities of any series, there shall be 

 

3

 

established in or pursuant to a Board Resolution, and set forth in an Officer’s Certificate, or established in one or more indentures supplemental hereto:

 

(1) the title of the Securities of the series (which shall distinguish the Securities of that series from all other Securities);

 

(2) any limit upon the aggregate principal amount of the Securities of that series that may be authenticated and delivered under this Indenture (except for Securities authenticated and delivered upon registration of transfer of, or in exchange for, or in lieu of, other Securities of that series);

 

(3) the date or dates on which the principal of the Securities of the series is payable, any original issue discount that may apply to the Securities of that series upon their issuance, the principal amount due at maturity, and the place(s) of payment;

 

(4) the rate or rates at which the Securities of the series shall bear interest or the manner of calculation of such rate or rates, if any;

 

(5) the date or dates from which such interest shall accrue, the Interest Payment Dates on which such interest will be payable or the manner of determination of such Interest Payment Dates, the place(s) of payment, and the record date for the determination of holders to whom interest is payable on any such Interest Payment Dates or the manner of determination of such record dates;

 

(6) the right, if any, to extend the interest payment periods and the duration of such extension;

 

(7) the period or periods within which, the price or prices at which and the terms and conditions upon which Securities of the series may be redeemed, converted or exchanged, in whole or in part, at the option of the Company;

 

(8) the obligation, if any, of the Company to redeem or purchase Securities of the series pursuant to any sinking fund, mandatory redemption, or analogous provisions (including payments made in cash in satisfaction of future sinking fund obligations) or at the option of a holder thereof and the period or periods within which, the price or prices at which, and the terms and conditions upon which, Securities of the series shall be redeemed or purchased, in whole or in part, pursuant to such obligation;

 

(9) the form of the Securities of the series including the form of the Certificate of Authentication for such series;

 

(10) if other than denominations of one thousand U.S. dollars ($1,000) or any integral multiple thereof, the denominations in which the Securities of the series shall be issuable;

 

(11) any and all other terms (including terms, to the extent applicable, relating to any auction or remarketing of the Securities of that series and any security for the obligations of the Company with respect to such Securities) with respect to such series (which terms shall not be inconsistent with the terms of this Indenture, as amended by any supplemental indenture) including any terms which may be required by or advisable under United States laws or regulations or advisable in connection with the marketing of Securities of that series;

 

(12) whether the Securities of the series shall be issued in whole or in part in the form of a Global Security or Securities; the terms and conditions, if any, upon which such Global Security or Securities may be exchanged in whole or in part for other individual Securities; and the Depositary for such Global Security or Securities;

 

(13) whether the Securities will be convertible into or exchangeable for shares of common stock or other securities of the Company or any other Person and, if so, the terms and conditions upon which such Securities will be so convertible or exchangeable, including the conversion or exchange price, as applicable, or how it will be calculated and may be adjusted, any mandatory or optional (at the Company’s option or the holders’ option) conversion or exchange features, and the applicable conversion or exchange period;

 

4

 

(14) if other than the principal amount thereof, the portion of the principal amount of Securities of the series which shall be payable upon declaration of acceleration of the maturity thereof pursuant to Section 6.01;

 

(15) any additional or different Events of Default or restrictive covenants (which may include, among other restrictions, restrictions on the Company’s ability or the ability of the Company’s Subsidiaries to: incur additional indebtedness; issue additional securities; create liens; pay dividends or make distributions in respect of their capital stock; redeem capital stock; place restrictions on such Subsidiaries placing restrictions on their ability to pay dividends, make distributions or transfer assets; make investments or other restricted payments; sell or otherwise dispose of assets; enter into sale-leaseback transactions; engage in transactions with stockholders and affiliates; issue or sell stock of their Subsidiaries; or effect a consolidation or merger) or financial covenants (which may include, among other financial covenants, financial covenants that require the Company and its Subsidiaries to maintain specified interest coverage, fixed charge, cash flow-based or asset-based ratios) provided for with respect to the Securities of the series;

 

(16) if other than dollars, the coin or currency in which the Securities of the series are denominated (including, but not limited to, foreign currency);

 

(17) whether interest will be payable in cash or additional Securities at the Company’s or the Securityholders’ option and the terms and conditions upon which the election may be made;

 

(18) the terms and conditions, if any, upon which the Company shall pay amounts in addition to the stated interest, premium, if any and principal amounts of the Securities of the series to any Securityholder that is not a “United States person” for federal tax purposes; and

 

(19) any restrictions on transfer, sale or assignment of the Securities of the series.

 

All Securities of any one series shall be substantially identical except as to denomination and except as may otherwise be provided in or pursuant to any such Board Resolution or in any indentures supplemental hereto.

 

If any of the terms of the series are established by action taken pursuant to a Board Resolution of the Company, a copy of an appropriate record of such action shall be certified by the secretary or an assistant secretary of the Company and delivered to the Trustee at or prior to the delivery of the Officer’s Certificate of the Company setting forth the terms of the series.

 

Securities of any particular series may be issued at various times, with different dates on which the principal or any installment of principal is payable, with different rates of interest, if any, or different methods by which rates of interest may be determined, with different dates on which such interest may be payable and with different redemption dates.

 

Section 2.02 Form Of Securities And Trustee’s Certificate.

 

The Securities of any series and the Trustee’s certificate of authentication to be borne by such Securities shall be substantially of the tenor and purport as set forth in one or more indentures supplemental hereto or as provided in a Board Resolution, and set forth in an Officer’s Certificate, and they may have such letters, numbers or other marks of identification or designation and such legends or endorsements printed, lithographed or engraved thereon as the Company may deem appropriate and as are not inconsistent with the provisions of this Indenture, or as may be required to comply with any law or with any rule or regulation made pursuant thereto or with any rule or regulation of any securities exchange on which Securities of that series may be listed, or to conform to usage.

 

Section 2.03 Denominations: Provisions For Payment.

 

The Securities shall be issuable as registered Securities and in the denominations of one thousand U.S. dollars ($1,000) or any integral multiple thereof, subject to Section 2.01(a)(10). The Securities of a particular series shall bear interest payable on the dates and at the rate specified with respect to that series. Subject to Section 2.01(a)(16), the principal of and the interest on the Securities of any series, as well as any premium thereon in case of redemption thereof prior to maturity, shall be payable in the coin or currency of the United States of America that at the time is legal tender for public and private debt, at the office or agency of the Company maintained for that purpose. Each 

 

5

 

Security shall be dated the date of its authentication. Interest on the Securities shall be computed on the basis of a 360-day year composed of twelve 30-day months.

 

The interest installment on any Security that is payable, and is punctually paid or duly provided for, on any Interest Payment Date for Securities of that series shall be paid to the Person in whose name said Security (or one or more Predecessor Securities) is registered at the close of business on the regular record date for such interest installment. In the event that any Security of a particular series or portion thereof is called for redemption and the redemption date is subsequent to a regular record date with respect to any Interest Payment Date and prior to such Interest Payment Date, interest on such Security will be paid upon presentation and surrender of such Security as provided in Section 3.03.

 

Any interest on any Security that is payable, but is not punctually paid or duly provided for, on any Interest Payment Date for Securities of the same series (herein called “Defaulted Interest”) shall forthwith cease to be payable to the registered holder on the relevant regular record date by virtue of having been such holder; and such Defaulted Interest shall be paid by the Company, at its election, as provided in clause (1) or clause (2) below:

 

(1) The Company may make payment of any Defaulted Interest on Securities to the Persons in whose names such Securities (or their respective Predecessor Securities) are registered at the close of business on a special record date for the payment of such Defaulted Interest, which shall be fixed in the following manner: the Company shall notify the Trustee in writing of the amount of Defaulted Interest proposed to be paid on each such Security and the date of the proposed payment, and at the same time the Company shall deposit with the Trustee an amount of money equal to the aggregate amount proposed to be paid in respect of such Defaulted Interest or shall make arrangements satisfactory to the Trustee for such deposit prior to the date of the proposed payment, such money when deposited to be held in trust for the benefit of the Persons entitled to such Defaulted Interest as in this clause provided. Thereupon, the Trustee shall fix a special record date for the payment of such Defaulted Interest which shall not be more than 15 nor less than 10 days prior to the date of the proposed payment and not less than 10 days after the receipt by the Trustee of the notice of the proposed payment. The Trustee shall promptly notify the Company of such special record date and, in the name and at the expense of the Company, shall cause notice of the proposed payment of such Defaulted Interest and the special record date therefor to be mailed, first class postage prepaid, to each Securityholder at his or her address as it appears in the Security Register (as hereinafter defined), not less than 10 days prior to such special record date. Notice of the proposed payment of such Defaulted Interest and the special record date therefor having been mailed as aforesaid, such Defaulted Interest shall be paid to the Persons in whose names such Securities (or their respective Predecessor Securities) are registered on such special record date.

 

(2) The Company may make payment of any Defaulted Interest on any Securities in any other lawful manner not inconsistent with the requirements of any securities exchange on which such Securities may be listed, and upon such notice as may be required by such exchange, if, after notice given by the Company to the Trustee of the proposed payment pursuant to this clause, such manner of payment shall be deemed practicable by the Trustee.

 

Unless otherwise set forth in a Board Resolution or one or more indentures supplemental hereto establishing the terms of any series of Securities pursuant to Section 2.01 hereof, the term “regular record date” as used in this Section with respect to a series of Securities and any Interest Payment Date for such series shall mean either the fifteenth day of the month immediately preceding the month in which an Interest Payment Date established for such series pursuant to Section 2.01 hereof shall occur, if such Interest Payment Date is the first day of a month, or the first day of the month in which an Interest Payment Date established for such series pursuant to Section 2.01 hereof shall occur, if such Interest Payment Date is the fifteenth day of a month, whether or not such date is a Business Day.

 

Subject to the foregoing provisions of this Section, each Security of a series delivered under this Indenture upon transfer of or in exchange for or in lieu of any other Security of such series shall carry the rights to interest accrued and unpaid, and to accrue, that were carried by such other Security.

 

6

 

 

 

Section 2.04 Execution And Authentications.

 

The Securities shall be signed on behalf of the Company by one of its Officers. Signatures may be in the form of a manual or facsimile signature.

 

The Company may use the facsimile signature of any Person who shall have been an Officer, notwithstanding the fact that at the time the Securities shall be authenticated and delivered or disposed of such Person shall have ceased to be such an officer of the Company. The Securities may contain such notations, legends or endorsements required by law, stock exchange rule or usage. Each Security shall be dated the date of its authentication by the Trustee.

 

A Security shall not be valid until authenticated manually by an authorized signatory of the Trustee, or by an Authenticating Agent. Such signature shall be conclusive evidence that the Security so authenticated has been duly authenticated and delivered hereunder and that the holder is entitled to the benefits of this Indenture. At any time and from time to time after the execution and delivery of this Indenture, the Company may deliver Securities of any series executed by the Company to the Trustee for authentication, together with a written order of the Company for the authentication and delivery of such Securities, signed by an Officer, and the Trustee in accordance with such written order shall authenticate and deliver such Securities.

 

In authenticating such Securities and accepting the additional responsibilities under this Indenture in relation to such Securities, the Trustee shall be entitled to receive, and (subject to Section 7.01) shall be fully protected in relying upon, an Opinion of Counsel stating that the form and terms thereof have been established in conformity with the provisions of this Indenture.

 

The Trustee shall not be required to authenticate such Securities if the issue of such Securities pursuant to this Indenture will affect the Trustee’s own rights, duties or immunities under the Securities and this Indenture or otherwise in a manner that is not reasonably acceptable to the Trustee.

 

Section 2.05 Registration Of Transfer And Exchange.

 

(a) Securities of any series may be exchanged upon presentation thereof at the office or agency of the Company designated for such purpose, for other Securities of such series of authorized denominations, and for a like aggregate principal amount, upon payment of a sum sufficient to cover any tax or other governmental charge in relation thereto, all as provided in this Section. In respect of any Securities so surrendered for exchange, the Company shall execute, the Trustee shall authenticate and such office or agency shall deliver in exchange therefor the Security or Securities of the same series that the Securityholder making the exchange shall be entitled to receive, bearing numbers not contemporaneously outstanding.

 

(b) The Company shall keep, or cause to be kept, at its office or agency designated for such purpose, or such other location designated by the Company, a register or registers (herein referred to as the “Security Register”) in which, subject to such reasonable regulations as it may prescribe, the Company shall register the Securities and the transfers of Securities as in this Article provided and which at all reasonable times shall be open for inspection by the Trustee. The registrar for the purpose of registering Securities and transfer of Securities as herein provided shall be appointed as authorized by Board Resolution (the “Security Registrar”).

 

Upon surrender for transfer of any Security at the office or agency of the Company designated for such purpose, the Company shall execute, the Trustee shall authenticate and such office or agency shall deliver in the name of the transferee or transferees a new Security or Securities of the same series as the Security presented for a like aggregate principal amount.

 

All Securities presented or surrendered for exchange or registration of transfer, as provided in this Section, shall be accompanied (if so required by the Company or the Security Registrar) by a written instrument or instruments of transfer, in form satisfactory to the Company or the Security Registrar, duly executed by the registered holder or by such holder’s duly authorized attorney in writing.

 

(c) Except as provided pursuant to Section 2.01 pursuant to a Board Resolution, and set forth in an Officer’s Certificate, or established in one or more indentures supplemental to this Indenture, no service charge shall be made for any exchange or registration of transfer of Securities, or issue of new Securities in case of partial redemption of any series, but the Company may require payment of a sum sufficient to cover any tax or other 

 

7

 

governmental charge in relation thereto, other than exchanges pursuant to Section 2.06, Section 3.03(b) and Section 9.04 not involving any transfer.

 

(d) The Company shall not be required (i) to issue, exchange or register the transfer of any Securities during a period beginning at the opening of business 15 days before the day of the mailing of a notice of redemption of less than all the Outstanding Securities of the same series and ending at the close of business on the day of such mailing, nor (ii) to register the transfer of or exchange any Securities of any series or portions thereof called for redemption, other than the unredeemed portion of any such Securities being redeemed in part. The provisions of this Section 2.05 are, with respect to any Global Security, subject to Section 2.11 hereof.

 

The Trustee shall have no obligation or duty to monitor, determine or inquire as to compliance with any restrictions on transfer imposed under this Indenture or under applicable law with respect to any transfer of any interest in any Security (including any transfers between or among depositary participants or beneficial owners of interests in any Global Security) other than to require delivery of such certificates and other documentation or evidence as are expressly required by, and to do so if and when expressly required by the terms of, this Indenture, and to examine the same to determine substantial compliance as to form with the express requirements hereof.

 

Section 2.06 Temporary Securities.

 

Pending the preparation of definitive Securities of any series, the Company may execute, and the Trustee shall authenticate and deliver, temporary Securities (printed, lithographed or typewritten) of any authorized denomination. Such temporary Securities shall be substantially in the form of the definitive Securities in lieu of which they are issued, but with such omissions, insertions and variations as may be appropriate for temporary Securities, all as may be determined by the Company. Every temporary Security of any series shall be executed by the Company and be authenticated by the Trustee upon the same conditions and in substantially the same manner, and with like effect, as the definitive Securities of such series. Without unnecessary delay, the Company will execute and will furnish definitive Securities of such series and thereupon any or all temporary Securities of such series may be surrendered in exchange therefor (without charge to the holders), at the office or agency of the Company designated for the purpose, and the Trustee shall authenticate and such office or agency shall deliver in exchange for such temporary Securities an equal aggregate principal amount of definitive Securities of such series, unless the Company advises the Trustee to the effect that definitive Securities need not be executed and furnished until further notice from the Company. Until so exchanged, the temporary Securities of such series shall be entitled to the same benefits under this Indenture as definitive Securities of such series authenticated and delivered hereunder.

 

Section 2.07 Mutilated, Destroyed, Lost Or Stolen Securities.

 

In case any temporary or definitive Security shall become mutilated or be destroyed, lost or stolen, the Company (subject to the next succeeding sentence) shall execute, and upon the Company’s request the Trustee (subject as aforesaid) shall authenticate and deliver, a new Security of the same series, bearing a number not contemporaneously outstanding, in exchange and substitution for the mutilated Security, or in lieu of and in substitution for the Security so destroyed, lost or stolen. In every case the applicant for a substituted Security shall furnish to the Company and the Trustee such security or indemnity as may be required by them to save each of them harmless, and, in every case of destruction, loss or theft, the applicant shall also furnish to the Company and the Trustee evidence to their satisfaction of the destruction, loss or theft of the applicant’s Security and of the ownership thereof. The Trustee may authenticate any such substituted Security and deliver the same upon the written request or authorization of any officer of the Company. Upon the issuance of any substituted Security, the Company may require the payment of a sum sufficient to cover any tax or other governmental charge that may be imposed in relation thereto and any other expenses (including the fees and expenses of the Trustee) connected therewith.

 

In case any Security that has matured or is about to mature shall become mutilated or be destroyed, lost or stolen, the Company may, instead of issuing a substitute Security, pay or authorize the payment of the same (without surrender thereof except in the case of a mutilated Security) if the applicant for such payment shall furnish to the Company and the Trustee such security or indemnity as they may require to save them harmless, and, in case of destruction, loss or theft, evidence to the satisfaction of the Company and the Trustee of the destruction, loss or theft of such Security and of the ownership thereof.

 

8

 

Every replacement Security issued pursuant to the provisions of this Section shall constitute an additional contractual obligation of the Company whether or not the mutilated, destroyed, lost or stolen Security shall be found at any time, or be enforceable by anyone, and shall be entitled to all the benefits of this Indenture equally and proportionately with any and all other Securities of the same series duly issued hereunder. All Securities shall be held and owned upon the express condition that the foregoing provisions are exclusive with respect to the replacement or payment of mutilated, destroyed, lost or stolen Securities, and shall preclude (to the extent lawful) any and all other rights or remedies, notwithstanding any law or statute existing or hereafter enacted to the contrary with respect to the replacement or payment of negotiable instruments or other securities without their surrender.

 

Section 2.08 Cancellation.

 

All Securities surrendered for the purpose of payment, redemption, exchange or registration of transfer shall, if surrendered to the Company or any paying agent, be delivered to the Trustee for cancellation, or, if surrendered to the Trustee, shall be cancelled by it, and no Securities shall be issued in lieu thereof except as expressly required or permitted by any of the provisions of this Indenture. On request of the Company at the time of such surrender, the Trustee shall deliver to the Company canceled Securities held by the Trustee. In the absence of such request the Trustee may dispose of canceled Securities in accordance with its standard procedures and deliver a certificate of disposition to the Company. If the Company shall otherwise acquire any of the Securities, however, such acquisition shall not operate as a redemption or satisfaction of the indebtedness represented by such Securities unless and until the same are delivered to the Trustee for cancellation.

 

Section 2.09 Benefits Of Indenture.

 

Nothing in this Indenture or in the Securities, express or implied, shall give or be construed to give to any Person, other than the parties hereto and the holders of the Securities any legal or equitable right, remedy or claim under or in respect of this Indenture, or under any covenant, condition or provision herein contained; all such covenants, conditions and provisions being for the sole benefit of the parties hereto and of the holders of the Securities.

 

Section 2.10 Authenticating Agent.

 

So long as any of the Securities of any series remain Outstanding there may be an Authenticating Agent for any or all such series of Securities which the Trustee shall have the right to appoint. Said Authenticating Agent shall be authorized to act on behalf of the Trustee to authenticate Securities of such series issued upon exchange, transfer or partial redemption thereof, and Securities so authenticated shall be entitled to the benefits of this Indenture and shall be valid and obligatory for all purposes as if authenticated by the Trustee hereunder. All references in this Indenture to the authentication of Securities by the Trustee shall be deemed to include authentication by an Authenticating Agent for such series. Each Authenticating Agent shall be acceptable to the Company and shall be a corporation that has a combined capital and surplus, as most recently reported or determined by it, sufficient under the laws of any jurisdiction under which it is organized or in which it is doing business to conduct a trust business, and that is otherwise authorized under such laws to conduct such business and is subject to supervision or examination by federal or state authorities. If at any time any Authenticating Agent shall cease to be eligible in accordance with these provisions, it shall resign immediately.

 

Any Authenticating Agent may at any time resign by giving written notice of resignation to the Trustee and to the Company. The Trustee may at any time (and upon request by the Company shall) terminate the agency of any Authenticating Agent by giving written notice of termination to such Authenticating Agent and to the Company. Upon resignation, termination or cessation of eligibility of any Authenticating Agent, the Trustee may appoint an eligible successor Authenticating Agent acceptable to the Company. Any successor Authenticating Agent, upon acceptance of its appointment hereunder, shall become vested with all the rights, powers and duties of its predecessor hereunder as if originally named as an Authenticating Agent pursuant hereto.

 

Section 2.11 Global Securities.

 

(a) If the Company shall establish pursuant to Section 2.01 that the Securities of a particular series are to be issued as a Global Security, then the Company shall execute and the Trustee shall, in accordance with Section 2.04, authenticate and deliver, a Global Security that (i) shall represent, and shall be denominated in an amount equal to the aggregate principal amount of, all of the Outstanding Securities of such series, (ii) shall be

 

9

 

registered in the name of the Depositary or its nominee, (iii) shall be delivered by the Trustee to the Depositary or pursuant to the Depositary’s instruction and (iv) shall bear a legend substantially to the following effect: “Except as otherwise provided in Section 2.11 of the Indenture, this Security may be transferred, in whole but not in part, only to another nominee of the Depositary or to a successor Depositary or to a nominee of such successor Depositary.”

 

(b) Notwithstanding the provisions of Section 2.05, the Global Security of a series may be transferred, in whole but not in part and in the manner provided in Section 2.05, only to another nominee of the Depositary for such series, or to a successor Depositary for such series selected or approved by the Company or to a nominee of such successor Depositary.

 

(c) If at any time the Depositary for a series of the Securities notifies the Company that it is unwilling or unable to continue as Depositary for such series or if at any time the Depositary for such series shall no longer be registered or in good standing under the Exchange Act, or other applicable statute or regulation, and a successor Depositary for such series is not appointed by the Company within 90 days after the Company receives such notice or becomes aware of such condition, as the case may be, or if an Event of Default has occurred and is continuing and the Company has received a request from the Depositary or from the Trustee, this Section 2.11 shall no longer be applicable to the Securities of such series and the Company will execute, and subject to Section 2.04, the Trustee will authenticate and deliver the Securities of such series in definitive registered form without coupons, in authorized denominations, and in an aggregate principal amount equal to the principal amount of the Global Security of such series in exchange for such Global Security. In addition, the Company may at any time determine that the Securities of any series shall no longer be represented by a Global Security and that the provisions of this Section 2.11 shall no longer apply to the Securities of such series. In such event the Company will execute and, subject to Section 2.04, the Trustee, upon receipt of an Officer’s Certificate evidencing such determination by the Company, will authenticate and deliver the Securities of such series in definitive registered form without coupons, in authorized denominations, and in an aggregate principal amount equal to the principal amount of the Global Security of such series in exchange for such Global Security. Upon the exchange of the Global Security for such Securities in definitive registered form without coupons, in authorized denominations, the Global Security shall be canceled by the Trustee. Such Securities in definitive registered form issued in exchange for the Global Security pursuant to this Section 2.11(c) shall be registered in such names and in such authorized denominations as the Depositary, pursuant to instructions from its direct or indirect participants or otherwise, shall instruct the Trustee. The Trustee shall deliver such Securities to the Depositary for delivery to the Persons in whose names such Securities are so registered.

 

ARTICLE 3

 

REDEMPTION OF SECURITIES AND SINKING FUND PROVISIONS

 

Section 3.01 Redemption.

 

The Company may redeem the Securities of any series issued hereunder on and after the dates and in accordance with the terms established for such series pursuant to Section 2.01 hereof.

 

Section 3.02 Notice Of Redemption.

 

(a) In case the Company shall desire to exercise such right to redeem all or, as the case may be, a portion of the Securities of any series in accordance with any right the Company reserved for itself to do so pursuant to Section 2.01 hereof, the Company shall, or shall cause the Trustee to, give notice of such redemption to holders of the Securities of such series to be redeemed by mailing, first class postage prepaid, a notice of such redemption not less than 30 days and not more than 90 days before the date fixed for redemption of that series to such holders at their last addresses as they shall appear upon the Security Register, unless a shorter period is specified in the Securities to be redeemed. Any notice that is mailed in the manner herein provided shall be conclusively presumed to have been duly given, whether or not the registered holder receives the notice. In any case, failure duly to give such notice to the holder of any Security of any series designated for redemption in whole or in part, or any defect in the notice, shall not affect the validity of the proceedings for the redemption of any other Securities of such series or any other series. In the case of any redemption of Securities prior to the expiration of any restriction on such redemption provided in the terms of such Securities or elsewhere in this Indenture, the Company shall furnish the Trustee with an Officer’s Certificate evidencing compliance with any such restriction.

 

10

 

Each such notice of redemption shall specify the date fixed for redemption and the redemption price at which Securities of that series are to be redeemed, and shall state that payment of the redemption price of such Securities to be redeemed will be made at the office or agency of the Company designated for such purpose, upon presentation and surrender of such Securities, that interest accrued to the date fixed for redemption will be paid as specified in said notice, that from and after said date interest will cease to accrue and that the redemption is for a sinking fund, if such is the case. If less than all the Securities of a series are to be redeemed, the notice to the holders of Securities of that series to be redeemed in part shall specify the particular Securities to be so redeemed.

 

In case any Security is to be redeemed in part only, the notice that relates to such Security shall state the portion of the principal amount thereof to be redeemed, and shall state that on and after the redemption date, upon surrender of such Security, a new Security or Securities of such series in principal amount equal to the unredeemed portion thereof will be issued.

 

(b) If less than all the Securities of a series are to be redeemed, the Company shall give the Trustee at least 45 days’ notice (unless a shorter notice shall be satisfactory to the Trustee) in advance of the date fixed for redemption as to the aggregate principal amount of Securities of the series to be redeemed, and thereupon the Trustee shall select, by lot or in such other manner as it shall deem appropriate and fair in its discretion and that may provide for the selection of a portion or portions (equal to one thousand U.S. dollars ($1,000) or any integral multiple thereof) of the principal amount of such Securities of a denomination larger than $1,000, the Securities to be redeemed and shall thereafter promptly notify the Company in writing of the numbers of the Securities to be redeemed, in whole or in part. The Company may, if and whenever it shall so elect, by delivery of instructions signed on its behalf by an Officer, instruct the Trustee or any paying agent to call all or any part of the Securities of a particular series for redemption and to give notice of redemption in the manner set forth in this Section, such notice to be in the name of the Company or its own name as the Trustee or such paying agent may deem advisable. In any case in which notice of redemption is to be given by the Trustee or any such paying agent, the Company shall deliver or cause to be delivered to, or permit to remain with, the Trustee or such paying agent, as the case may be, such Security Register, transfer books or other records, or suitable copies or extracts therefrom, sufficient to enable the Trustee or such paying agent to give any notice by mail that may be required under the provisions of this Section.

 

Section 3.03 Payment Upon Redemption.

 

(a) If the giving of notice of redemption shall have been completed as above provided, the Securities or portions of Securities of the series to be redeemed specified in such notice shall become due and payable on the date and at the place stated in such notice at the applicable redemption price, together with interest accrued to the date fixed for redemption and interest on such Securities or portions of Securities shall cease to accrue on and after the date fixed for redemption, unless the Company shall default in the payment of such redemption price and accrued interest with respect to any such Security or portion thereof. On presentation and surrender of such Securities on or after the date fixed for redemption at the place of payment specified in the notice, said Securities shall be paid and redeemed at the applicable redemption price for such series, together with interest accrued thereon to the date fixed for redemption (but if the date fixed for redemption is an interest payment date, the interest installment payable on such date shall be payable to the registered holder at the close of business on the applicable record date pursuant to Section 2.03).

 

(b) Upon presentation of any Security of such series that is to be redeemed in part only, the Company shall execute and the Trustee shall authenticate and the office or agency where the Security is presented shall deliver to the holder thereof, at the expense of the Company, a new Security of the same series of authorized denominations in principal amount equal to the unredeemed portion of the Security so presented.

 

Section 3.04 Sinking Fund.

 

The provisions of Sections 3.04, 3.05 and 3.06 shall be applicable to any sinking fund for the retirement of Securities of a series, except as otherwise specified as contemplated by Section 2.01 for Securities of such series.

 

The minimum amount of any sinking fund payment provided for by the terms of Securities of any series is herein referred to as a “mandatory sinking fund payment,” and any payment in excess of such minimum amount provided for by the terms of Securities of any series is herein referred to as an “optional sinking fund payment”. If 

 

11

 

provided for by the terms of Securities of any series, the cash amount of any sinking fund payment may be subject to reduction as provided in Section 3.05. Each sinking fund payment shall be applied to the redemption of Securities of any series as provided for by the terms of Securities of such series.

 

Section 3.05 Satisfaction Of Sinking Fund Payments With Securities.

 

The Company (i) may deliver Outstanding Securities of a series and (ii) may apply as a credit Securities of a series that have been redeemed either at the election of the Company pursuant to the terms of such Securities or through the application of permitted optional sinking fund payments pursuant to the terms of such Securities, in each case in satisfaction of all or any part of any sinking fund payment with respect to the Securities of such series required to be made pursuant to the terms of such Securities as provided for by the terms of such series, provided that such Securities have not been previously so credited. Such Securities shall be received and credited for such purpose by the Trustee at the redemption price specified in such Securities for redemption through operation of the sinking fund and the amount of such sinking fund payment shall be reduced accordingly.

 

Section 3.06 Redemption Of Securities For Sinking Fund.

 

Not less than 45 days prior to each sinking fund payment date for any series of Securities (unless a shorter period shall be satisfactory to the Trustee), the Company will deliver to the Trustee an Officer’s Certificate specifying the amount of the next ensuing sinking fund payment for that series pursuant to the terms of the series, the portion thereof, if any, that is to be satisfied by delivering and crediting Securities of that series pursuant to Section 3.05 and the basis for such credit and will, together with such Officer’s Certificate, deliver to the Trustee any Securities to be so delivered. Not less than 30 days before each such sinking fund payment date the Trustee shall select the Securities to be redeemed upon such sinking fund payment date in the manner specified in Section 3.02 and cause notice of the redemption thereof to be given in the name of and at the expense of the Company in the manner provided in Section 3.02. Such notice having been duly given, the redemption of such Securities shall be made upon the terms and in the manner stated in Section 3.03.

 

ARTICLE 4

 

COVENANTS

 

Section 4.01 Payment Of Principal, Premium And Interest.

 

The Company will duly and punctually pay or cause to be paid the principal of (and premium, if any) and interest on the Securities of that series at the time and place and in the manner provided herein and established with respect to such Securities. Payments of principal on the Securities may be made at the time provided herein and established with respect to such Securities by U.S. dollar check drawn on and mailed to the address of the Securityholder entitled thereto as such address shall appear in the Security Register, or U.S. dollar wire transfer to, a U.S. dollar account if such Securityholder shall have furnished wire instructions in writing to the Trustee no later than 15 days prior to the relevant payment date. Payments of interest on the Securities may be made at the time provided herein and established with respect to such Securities by U.S. dollar check mailed to the address of the Securityholder entitled thereto as such address shall appear in the Security Register, or U.S. dollar wire transfer to, a U.S. dollar account if such Securityholder shall have furnished wire instructions in writing to the Security Registrar and the Trustee no later than 15 days prior to the relevant payment date.

 

Section 4.02 Maintenance Of Office Or Agency.

 

So long as any series of the Securities remain Outstanding, the Company agrees to maintain an office or agency, with respect to each such series and at such other location or locations as may be designated as provided in this Section 4.02, where (i) Securities of that series may be presented for payment, (ii) Securities of that series may be presented as herein above authorized for registration of transfer and exchange, and (iii) notices and demands to or upon the Company in respect of the Securities of that series and this Indenture may be given or served, such designation to continue with respect to such office or agency until the Company shall, by written notice signed by any officer authorized to sign an Officer’s Certificate and delivered to the Trustee, designate some other office or agency for such purposes or any of them. If at any time the Company shall fail to maintain any such required office or agency or shall fail to furnish the Trustee with the address thereof, such presentations, notices and demands may be made or served at the Corporate Trust Office of the Trustee, and the Company hereby appoints the Trustee as its 

 

12

 

agent to receive all such presentations, notices and demands. The Company initially appoints the Corporate Trust Office of the Trustee as its paying agent with respect to the Securities.

 

Section 4.03 Paying Agents.

 

(a) If the Company shall appoint one or more paying agents for all or any series of the Securities, other than the Trustee, the Company will cause each such paying agent to execute and deliver to the Trustee an instrument in which such agent shall agree with the Trustee, subject to the provisions of this Section:

 

(1) that it will hold all sums held by it as such agent for the payment of the principal of (and premium, if any) or interest on the Securities of that series (whether such sums have been paid to it by the Company or by any other obligor of such Securities) in trust for the benefit of the Persons entitled thereto;

 

(2) that it will give the Trustee notice of any failure by the Company (or by any other obligor of such Securities) to make any payment of the principal of (and premium, if any) or interest on the Securities of that series when the same shall be due and payable;

 

(3) that it will, at any time during the continuance of any failure referred to in the preceding paragraph (a)(2) above, upon the written request of the Trustee, forthwith pay to the Trustee all sums so held in trust by such paying agent; and

 

(4) that it will perform all other duties of paying agent as set forth in this Indenture.

 

(b) If the Company shall act as its own paying agent with respect to any series of the Securities, it will on or before each due date of the principal of (and premium, if any) or interest on Securities of that series, set aside, segregate and hold in trust for the benefit of the Persons entitled thereto a sum sufficient to pay such principal (and premium, if any) or interest so becoming due on Securities of that series until such sums shall be paid to such Persons or otherwise disposed of as herein provided and will promptly notify the Trustee of such action, or any failure (by it or any other obligor on such Securities) to take such action. Whenever the Company shall have one or more paying agents for any series of Securities, it will, prior to each due date of the principal of (and premium, if any) or interest on any Securities of that series, deposit with the paying agent a sum sufficient to pay the principal (and premium, if any) or interest so becoming due, such sum to be held in trust for the benefit of the Persons entitled to such principal, premium or interest, and (unless such paying agent is the Trustee) the Company will promptly notify the Trustee of this action or failure so to act.

 

(c) Notwithstanding anything in this Section to the contrary, (i) the agreement to hold sums in trust as provided in this Section is subject to the provisions of Section 11.05, and (ii) the Company may at any time, for the purpose of obtaining the satisfaction and discharge of this Indenture or for any other purpose, pay, or direct any paying agent to pay, to the Trustee all sums held in trust by the Company or such paying agent, such sums to be held by the Trustee upon the same terms and conditions as those upon which such sums were held by the Company or such paying agent; and, upon such payment by the Company or any paying agent to the Trustee, the Company or such paying agent shall be released from all further liability with respect to such money.

 

Section 4.04 Appointment To Fill Vacancy In Office Of Trustee.

 

The Company, whenever necessary to avoid or fill a vacancy in the office of Trustee, will appoint, in the manner provided in Section 7.10, a Trustee, so that there shall at all times be a Trustee hereunder.

 

Section 4.05 Compliance With Consolidation Provisions.

 

The Company will not, while any of the Securities remain Outstanding, consolidate with or merge into any other Person, in either case where the Company is not the survivor of such transaction, or sell or convey all or substantially all of its property to any other Person unless the provisions of Article Ten hereof are complied with.

 

13

 

ARTICLE 5

 

SECURITYHOLDERS’ LISTS AND REPORTS BY THE COMPANY AND THE TRUSTEE

 

Section 5.01 Company To Furnish Trustee Names And Addresses Of Securityholders.

 

The Company will furnish or cause to be furnished to the Trustee (a) within 15 days after each regular record date (as defined in Section 2.03) a list, in such form as the Trustee may reasonably require, of the names and addresses of the holders of each series of Securities as of such regular record date, provided that the Company shall not be obligated to furnish or cause to furnish such list at any time that the list shall not differ in any respect from the most recent list furnished to the Trustee by the Company and (b) at such other times as the Trustee may request in writing within 30 days after the receipt by the Company of any such request, a list of similar form and content as of a date not more than 15 days prior to the time such list is furnished; provided, however, that, in either case, no such list need be furnished for any series for which the Trustee shall be the Security Registrar.

 

Section 5.02 Preservation Of Information; Communications With Securityholders.

 

(a) The Trustee shall preserve, in as current a form as is reasonably practicable, all information as to the names and addresses of the holders of Securities contained in the most recent list furnished to it as provided in Section 5.01 and as to the names and addresses of holders of Securities received by the Trustee in its capacity as Security Registrar (if acting in such capacity).

 

(b) The Trustee may destroy any list furnished to it as provided in Section 5.01 upon receipt of a new list so furnished.

 

(c) Securityholders may communicate as provided in Section 312(b) of the Trust Indenture Act with other Securityholders with respect to their rights under this Indenture or under the Securities, and, in connection with any such communications, the Trustee shall satisfy its obligations under Section 312(b) of the Trust Indenture Act in accordance with the provisions of Section 312(b) of the Trust Indenture Act.

 

Section 5.03 Reports By The Company.

 

The Company covenants and agrees to provide a copy to the Trustee, after the Company files the same with the Securities and Exchange Commission, copies of the annual reports and of the information, documents and other reports (or copies of such portions of any of the foregoing as the Securities and Exchange Commission may from time to time by rules and regulations prescribe) that the Company files with the Securities and Exchange Commission pursuant to Section 13 or Section 15(d) of the Exchange Act; provided, however, the Company shall not be required to deliver to the Trustee any materials for which the Company has sought and received confidential treatment by the Securities and Exchange Commission; and provided further, that so long as such filings by the Company are available on the Securities and Exchange Commission’s Electronic Data Gathering, Analysis and Retrieval System (EDGAR), or Interactive Data Electronic Applications (IDEA), or any successor system, such filings shall be deemed to have been filed with the Trustee for purposes hereof without any further action required by the Company; provided that an electronic link to such filing, together with an electronic notice of such filing have been sent to the Trustee. For the avoidance of doubt, a failure by the Company to file annual reports, information and other reports with the Securities and Exchange Commission within the time period prescribed thereof by the Securities and Exchange Commission shall not be deemed a breach of this Section 5.03.

 

Section 5.04 Reports By The Trustee.

 

(a) If required by Section 313(a) of the Trust Indenture Act, the Trustee, within sixty (60) days after each May 1, shall transmit by mail, first class postage prepaid, to the Securityholders, as their names and addresses appear upon the Security Register, a brief report dated as of such May 1, which complies with Section 313(a) of the Trust Indenture Act.

 

(b) The Trustee shall comply with Section 313(b) and 313(c) of the Trust Indenture Act.

 

(c) A copy of each such report shall, at the time of such transmission to Securityholders, be filed by the Trustee with the Company, with each securities exchange upon which any Securities are listed (if so listed) and also 

 

14

 

with the Securities and Exchange Commission. The Company agrees to notify the Trustee when any Securities become listed on any securities exchange.

 

ARTICLE 6

 

REMEDIES OF THE TRUSTEE AND SECURITYHOLDERS ON EVENT OF DEFAULT

 

Section 6.01 Events Of Default.

 

(a) Whenever used herein with respect to Securities of a particular series, “Event of Default” means any one or more of the following events that has occurred and is continuing:

 

(1) the Company defaults in the payment of any installment of interest upon any of the Securities of that series, as and when the same shall become due and payable, and such default continues for a period of 90 days; provided, however, that a valid extension of an interest payment period by the Company in accordance with the terms of any indenture supplemental hereto shall not constitute a default in the payment of interest for this purpose;

 

(2) the Company defaults in the payment of the principal of (or premium, if any, on) any of the Securities of that series as and when the same shall become due and payable whether at maturity, upon redemption, by declaration or otherwise, or in any payment required by any sinking or analogous fund established with respect to that series; provided, however, that a valid extension of the maturity of such Securities in accordance with the terms of any indenture supplemental hereto shall not constitute a default in the payment of principal or premium, if any;

 

(3) the Company fails to observe or perform any other of its covenants or agreements with respect to that series contained in this Indenture or otherwise established with respect to that series of Securities pursuant to Section 2.01 hereof (other than a covenant or agreement that has been expressly included in this Indenture solely for the benefit of one or more series of Securities other than such series) for a period of 90 days after the date on which written notice of such failure, requiring the same to be remedied and stating that such notice is a “Notice of Default” hereunder, shall have been given to the Company by the Trustee, by registered or certified mail, or to the Company and the Trustee by the holders of at least a majority in aggregate principal amount of the Securities of that series at the time Outstanding;

 

(4) the Company pursuant to or within the meaning of any Bankruptcy Law (i) commences a voluntary case, (ii) consents to the entry of an order for relief against it in an involuntary case, (iii) consents to the appointment of a Custodian of it or for all or substantially all of its property or (iv) makes a general assignment for the benefit of its creditors; or

 

 (5) a court of competent jurisdiction enters an order under any Bankruptcy Law that (i) is for relief against the Company in an involuntary case, (ii) appoints a Custodian of the Company for all or substantially all of its property or (iii) orders the liquidation of the Company, and the order or decree remains unstayed and in effect for 90 days.

 

(b) In each and every such case (other than an Event of Default specified in clause (4) or clause (5) above), unless the principal of all the Securities of that series shall have already become due and payable, either the Trustee or the holders of not less than a majority in aggregate principal amount of the Securities of that series then Outstanding hereunder, by notice in writing to the Company (and to the Trustee if given by such Securityholders), may declare the principal of (and premium, if any, on) and accrued and unpaid interest on all the Securities of that series to be due and payable immediately, and upon any such declaration the same shall become and shall be immediately due and payable. If an Event of Default specified in clause (4) or clause (5) above occurs, the principal of and accrued and unpaid interest on all the Securities of that series shall automatically be immediately due and payable without any declaration or other act on the part of the Trustee or the holders of the Securities.

 

(c) At any time after the principal of (and premium, if any, on) and accrued and unpaid interest on the Securities of that series shall have been so declared due and payable, and before any judgment or decree for the payment of the moneys due shall have been obtained or entered as hereinafter provided, the holders of a majority in aggregate principal amount of the Securities of that series then Outstanding hereunder, by written notice to the 

 

15

 

Company and the Trustee, may rescind and annul such declaration and its consequences if: (i) the Company has paid or deposited with the Trustee a sum sufficient to pay all matured installments of interest upon all the Securities of that series and the principal of (and premium, if any, on) any and all Securities of that series that shall have become due otherwise than by acceleration (with interest upon such principal and premium, if any, and, to the extent that such payment is enforceable under applicable law, upon overdue installments of interest, at the rate per annum expressed in the Securities of that series to the date of such payment or deposit) and the amount payable to the Trustee under Section 7.06, and (ii) any and all Events of Default under the Indenture with respect to such series, other than the nonpayment of principal on (and premium, if any, on) and accrued and unpaid interest on Securities of that series that shall not have become due by their terms, shall have been remedied or waived as provided in Section 6.06.

 

No such rescission and annulment shall extend to or shall affect any subsequent default or impair any right consequent thereon.

 

(d) In case the Trustee shall have proceeded to enforce any right with respect to Securities of that series under this Indenture and such proceedings shall have been discontinued or abandoned because of such rescission or annulment or for any other reason or shall have been determined adversely to the Trustee, then and in every such case, subject to any determination in such proceedings, the Company and the Trustee shall be restored respectively to their former positions and rights hereunder, and all rights, remedies and powers of the Company and the Trustee shall continue as though no such proceedings had been taken.

 

Section 6.02 Collection Of Indebtedness And Suits For Enforcement By Trustee.

 

(a) The Company covenants that (i) in case it shall default in the payment of any installment of interest on any of the Securities of a series, or in any payment required by any sinking or analogous fund established with respect to that series as and when the same shall have become due and payable, and such default shall have continued for a period of 90 Business Days, or (ii) in case it shall default in the payment of the principal of (or premium, if any, on) any of the Securities of a series when the same shall have become due and payable, whether upon maturity of the Securities of a series or upon redemption or upon declaration or otherwise then, upon demand of the Trustee, the Company will pay to the Trustee, for the benefit of the holders of the Securities of that series, the whole amount that then shall have been become due and payable on all such Securities for principal (and premium, if any) or interest, or both, as the case may be, with interest upon the overdue principal (and premium, if any) and (to the extent that payment of such interest is enforceable under applicable law) upon overdue installments of interest at the rate per annum expressed in the Securities of that series; and, in addition thereto, such further amount as shall be sufficient to cover the costs and expenses of collection, and the amount payable to the Trustee under Section 7.06.

 

 (b) If the Company shall fail to pay such amounts forthwith upon such demand, the Trustee, in its own name and as trustee of an express trust, shall be entitled and empowered to institute any action or proceedings at law or in equity for the collection of the sums so due and unpaid, and may prosecute any such action or proceeding to judgment or final decree, and may enforce any such judgment or final decree against the Company or other obligor upon the Securities of that series and collect the moneys adjudged or decreed to be payable in the manner provided by law or equity out of the property of the Company or other obligor upon the Securities of that series, wherever situated.

 

(c) In case of any receivership, insolvency, liquidation, bankruptcy, reorganization, readjustment, arrangement, composition or judicial proceedings affecting the Company, or its creditors or property, the Trustee shall have power to intervene in such proceedings and take any action therein that may be permitted by the court and shall (except as may be otherwise provided by law) be entitled to file such proofs of claim and other papers and documents as may be necessary or advisable in order to have the claims of the Trustee and of the holders of Securities of such series allowed for the entire amount due and payable by the Company under the Indenture at the date of institution of such proceedings and for any additional amount that may become due and payable by the Company after such date, and to collect and receive any moneys or other property payable or deliverable on any such claim, and to distribute the same after the deduction of the amount payable to the Trustee under Section 7.06; and any receiver, assignee or trustee in bankruptcy or reorganization is hereby authorized by each of the holders of Securities of such series to make such payments to the Trustee, and, in the event that the Trustee shall consent to the making of such payments directly to such Securityholders, to pay to the Trustee any amount due it under Section 7.06.

 

16

 

 

 

(d) All rights of action and of asserting claims under this Indenture, or under any of the terms established with respect to Securities of that series, may be enforced by the Trustee without the possession of any of such Securities, or the production thereof at any trial or other proceeding relative thereto, and any such suit or proceeding instituted by the Trustee shall be brought in its own name as trustee of an express trust, and any recovery of judgment shall, after provision for payment to the Trustee of any amounts due under Section 7.06, be for the ratable benefit of the holders of the Securities of such series.

 

In case of an Event of Default hereunder, the Trustee may in its discretion proceed to protect and enforce the rights vested in it by this Indenture by such appropriate judicial proceedings as the Trustee shall deem most effectual to protect and enforce any of such rights, either at law or in equity or in bankruptcy or otherwise, whether for the specific enforcement of any covenant or agreement contained in the Indenture or in aid of the exercise of any power granted in this Indenture, or to enforce any other legal or equitable right vested in the Trustee by this Indenture or by law.

 

Nothing contained herein shall be deemed to authorize the Trustee to authorize or consent to or accept or adopt on behalf of any Securityholder any plan of reorganization, arrangement, adjustment or composition affecting the Securities of that series or the rights of any holder thereof or to authorize the Trustee to vote in respect of the claim of any Securityholder in any such proceeding.

 

Section 6.03 Application Of Moneys Collected.

 

Any moneys collected by the Trustee pursuant to this Article with respect to a particular series of Securities shall be applied in the following order, at the date or dates fixed by the Trustee and, in case of the distribution of such moneys on account of principal (or premium, if any) or interest, upon presentation of the Securities of that series, and notation thereon of the payment, if only partially paid, and upon surrender thereof if fully paid:

 

FIRST: To the payment of reasonable costs and expenses of collection and of all amounts payable to the Trustee under Section 7.06;

 

SECOND: To the payment of the amounts then due and unpaid upon Securities of such series for principal (and premium, if any) and interest, in respect of which or for the benefit of which such money has been collected, ratably, without preference or priority of any kind, according to the amounts due and payable on such Securities for principal (and premium, if any) and interest, respectively; and

 

THIRD: To the payment of the remainder, if any, to the Company or any other Person lawfully entitled thereto.

 

Section 6.04 Limitation On Suits.

 

No holder of any Security of any series shall have any right by virtue or by availing of any provision of this Indenture to institute any suit, action or proceeding in equity or at law upon or under or with respect to this Indenture or for the appointment of a receiver or trustee, or for any other remedy hereunder, unless (i) such holder previously shall have given to the Trustee written notice of an Event of Default and of the continuance thereof with respect to the Securities of such series specifying such Event of Default, as hereinbefore provided; (ii) the holders of not less than a majority in aggregate principal amount of the Securities of such series then Outstanding shall have made written request upon the Trustee to institute such action, suit or proceeding in its own name as Trustee hereunder; (iii) such holder or holders shall have offered to the Trustee such reasonable indemnity as it may require against the costs, expenses and liabilities to be incurred therein or thereby; (iv) the Trustee for 90 days after its receipt of such notice, request and offer of indemnity, shall have failed to institute any such action, suit or proceeding; and (v) during such 90 day period, the holders of a majority in principal amount of the Securities of that series do not give the Trustee a direction inconsistent with the request.

 

Notwithstanding anything contained herein to the contrary or any other provisions of this Indenture, the right of any holder of any Security to receive payment of the principal of (and premium, if any) and interest on such Security, as therein provided, on or after the respective due dates expressed in such Security (or in the case of redemption, on the redemption date), or to institute suit for the enforcement of any such payment on or after such respective dates or redemption date, shall not be impaired or affected without the consent of such holder and by accepting a Security hereunder it is expressly understood, intended and covenanted by the taker and holder of every 

 

17

 

Security of such series with every other such taker and holder and the Trustee, that no one or more holders of Securities of such series shall have any right in any manner whatsoever by virtue or by availing of any provision of this Indenture to affect, disturb or prejudice the rights of the holders of any other of such Securities, or to obtain or seek to obtain priority over or preference to any other such holder, or to enforce any right under this Indenture, except in the manner herein provided and for the equal, ratable and common benefit of all holders of Securities of such series. For the protection and enforcement of the provisions of this Section, each and every Securityholder and the Trustee shall be entitled to such relief as can be given either at law or in equity.

 

Section 6.05 Rights And Remedies Cumulative; Delay Or Omission Not Waiver.

 

(a) Except as otherwise provided in Section 2.07, all powers and remedies given by this Article to the Trustee or to the Securityholders shall, to the extent permitted by law, be deemed cumulative and not exclusive of any other powers and remedies available to the Trustee or the holders of the Securities, by judicial proceedings or otherwise, to enforce the performance or observance of the covenants and agreements contained in this Indenture or otherwise established with respect to such Securities.

 

(b) No delay or omission of the Trustee or of any holder of any of the Securities to exercise any right or power accruing upon any Event of Default occurring and continuing as aforesaid shall impair any such right or power, or shall be construed to be a waiver of any such default or an acquiescence therein; and, subject to the provisions of Section 6.04, every power and remedy given by this Article or by law to the Trustee or the Securityholders may be exercised from time to time, and as often as shall be deemed expedient, by the Trustee or by the Securityholders.

 

Section 6.06 Control By Securityholders.

 

The holders of a majority in aggregate principal amount of the Securities of any series at the time Outstanding, determined in accordance with Section 8.04, shall have the right to direct the time, method and place of conducting any proceeding for any remedy available to the Trustee, or exercising any trust or power conferred on the Trustee with respect to such series; provided, however, that such direction shall not be in conflict with any rule of law or with this Indenture. Subject to the provisions of Section 7.01, the Trustee shall have the right to decline to follow any such direction if the Trustee in good faith shall, by a Responsible Officer or officers of the Trustee, determine that the proceeding so directed, subject to the Trustee’s duties under the Trust Indenture Act, would involve the Trustee in personal liability or might be unduly prejudicial to the Securityholders not involved in the proceeding. The holders of a majority in aggregate principal amount of the Securities of any series at the time Outstanding affected thereby, determined in accordance with Section 8.04, may on behalf of the holders of all of the Securities of such series waive any past default in the performance of any of the covenants contained herein or established pursuant to Section 2.01 with respect to such series and its consequences, except a default in the payment of the principal of, or premium, if any, or interest on, any of the Securities of that series as and when the same shall become due by the terms of such Securities otherwise than by acceleration (unless such default has been cured and a sum sufficient to pay all matured installments of interest and principal and any premium has been deposited with the Trustee (in accordance with Section 6.01(c)). Upon any such waiver, the default covered thereby shall be deemed to be cured for all purposes of this Indenture and the Company, the Trustee and the holders of the Securities of such series shall be restored to their former positions and rights hereunder, respectively; but no such waiver shall extend to any subsequent or other default or impair any right consequent thereon.

 

Section 6.07 Undertaking To Pay Costs.

 

All parties to this Indenture agree, and each holder of any Securities by such holder’s acceptance thereof shall be deemed to have agreed, that any court may in its discretion require, in any suit for the enforcement of any right or remedy under this Indenture, or in any suit against the Trustee for any action taken or omitted by it as Trustee, the filing by any party litigant in such suit of an undertaking to pay the costs of such suit, and that such court may in its discretion assess reasonable costs, including reasonable attorneys’ fees, against any party litigant in such suit, having due regard to the merits and good faith of the claims or defenses made by such party litigant; but the provisions of this Section shall not apply to any suit instituted by the Trustee, to any suit instituted by any Securityholder, or group of Securityholders, holding more than 10% in aggregate principal amount of the Outstanding Securities of any series, or to any suit instituted by any Securityholder for the enforcement of the payment of the principal of (or 

 

18

 

premium, if any) or interest on any Security of such series, on or after the respective due dates expressed in such Security or established pursuant to this Indenture.

 

ARTICLE 7

 

CONCERNING THE TRUSTEE

 

Section 7.01 Certain Duties And Responsibilities Of Trustee.

 

(a) The Trustee, prior to the occurrence of an Event of Default with respect to the Securities of a series and after the curing of all Events of Default with respect to the Securities of that series that may have occurred, shall undertake to perform with respect to the Securities of such series such duties and only such duties as are specifically set forth in this Indenture, and no implied covenants shall be read into this Indenture against the Trustee. In case an Event of Default with respect to the Securities of a series has occurred (that has not been cured or waived), the Trustee shall exercise with respect to Securities of that series such of the rights and powers vested in it by this Indenture, and use the same degree of care and skill in their exercise, as a prudent man would exercise or use under the circumstances in the conduct of his own affairs.

 

(b) No provision of this Indenture shall be construed to relieve the Trustee from liability for its own negligent action, its own negligent failure to act, or its own willful misconduct, except that:

 

(i) prior to the occurrence of an Event of Default with respect to the Securities of a series and after the curing or waiving of all such Events of Default with respect to that series that may have occurred:

 

(A) the duties and obligations of the Trustee shall with respect to the Securities of such series be determined solely by the express provisions of this Indenture, and the Trustee shall not be liable with respect to the Securities of such series except for the performance of such duties and obligations as are specifically set forth in this Indenture, and no implied covenants or obligations shall be read into this Indenture against the Trustee; and

 

(B) in the absence of bad faith on the part of the Trustee, the Trustee may with respect to the Securities of such series conclusively rely, as to the truth of the statements and the correctness of the opinions expressed therein, upon any certificates or opinions furnished to the Trustee and conforming to the requirements of this Indenture; but in the case of any such certificates or opinions that by any provision hereof are specifically required to be furnished to the Trustee, the Trustee shall be under a duty to examine the same to determine whether or not they conform to the requirements of this Indenture;

 

(ii) the Trustee shall not be liable for any error of judgment made in good faith by a Responsible Officer or Responsible Officers of the Trustee, unless it shall be proved that the Trustee was negligent in ascertaining the pertinent facts;

 

(iii) the Trustee shall not be liable with respect to any action taken or omitted to be taken by it in good faith in accordance with the direction of the holders of not less than a majority in principal amount of the Securities of any series at the time Outstanding relating to the time, method and place of conducting any proceeding for any remedy available to the Trustee, or exercising any trust or power conferred upon the Trustee under this Indenture with respect to the Securities of that series; and

 

(iv) None of the provisions contained in this Indenture shall require the Trustee to expend or risk its own funds or otherwise incur personal financial liability in the performance of any of its duties or in the exercise of any of its rights or powers if there is reasonable ground for believing that the repayment of such funds or liability is not reasonably assured to it under the terms of this Indenture or adequate indemnity against such risk is not reasonably assured to it.

 

Section 7.02 Certain Rights Of Trustee. Except as otherwise provided in Section 7.01:

 

(a) The Trustee may rely and shall be protected in acting or refraining from acting upon any resolution, certificate, statement, instrument, opinion, report, notice, request, consent, order, approval, bond, security or other paper or document believed by it to be genuine and to have been signed or presented by the proper party or parties;

 

19

 

(b) Any request, direction, order or demand of the Company mentioned herein shall be sufficiently evidenced by a Board Resolution or an instrument signed in the name of the Company by any authorized officer of the Company (unless other evidence in respect thereof is specifically prescribed herein);

 

(c) The Trustee may consult with counsel and the written advice of such counsel or any Opinion of Counsel shall be full and complete authorization and protection in respect of any action taken or suffered or omitted hereunder in good faith and in reliance thereon;

 

(d) The Trustee shall be under no obligation to exercise any of the rights or powers vested in it by this Indenture at the request, order or direction of any of the Securityholders pursuant to the provisions of this Indenture, unless such Securityholders shall have offered to the Trustee reasonable security or indemnity against the costs, expenses and liabilities that may be incurred therein or thereby; nothing contained herein shall, however, relieve the Trustee of the obligation, upon the occurrence of an Event of Default with respect to a series of the Securities (that has not been cured or waived), to exercise with respect to Securities of that series such of the rights and powers vested in it by this Indenture, and to use the same degree of care and skill in their exercise, as a prudent man would exercise or use under the circumstances in the conduct of his own affairs;

 

(e) The Trustee shall not be liable for any action taken or omitted to be taken by it in good faith and believed by it to be authorized or within the discretion or rights or powers conferred upon it by this Indenture;

 

(f) The Trustee shall not be bound to make any investigation into the facts or matters stated in any resolution, certificate, statement, instrument, opinion, report, notice, request, consent, order, approval, bond, security, or other papers or documents, unless requested in writing so to do by the holders of not less than a majority in principal amount of the Outstanding Securities of the particular series affected thereby (determined as provided in Section 8.04); provided, however, that if the payment within a reasonable time to the Trustee of the costs, expenses or liabilities likely to be incurred by it in the making of such investigation is, in the opinion of the Trustee, not reasonably assured to the Trustee by the security afforded to it by the terms of this Indenture, the Trustee may require reasonable indemnity against such costs, expenses or liabilities as a condition to so proceeding. The reasonable expense of every such examination shall be paid by the Company or, if paid by the Trustee, shall be repaid by the Company upon demand;

 

(g) The Trustee may execute any of the trusts or powers hereunder or perform any duties hereunder either directly or by or through agents or attorneys and the Trustee shall not be responsible for any misconduct or negligence on the part of any agent or attorney appointed with due care by it hereunder;

 

(h) In no event shall the Trustee be responsible or liable for any failure or delay in the performance of its obligations hereunder arising out of or caused by, directly or indirectly, forces beyond its control, including, without limitation, strikes, work stoppages, accidents, acts of war or terrorism, civil or military disturbances, nuclear or natural catastrophes or acts of God, and interruptions, loss or malfunctions of utilities, communications or computer (software and hardware) services; it being understood that the Trustee shall use reasonable efforts which are consistent with accepted practices in the banking industry to resume performance as soon as practicable under the circumstances;

 

(i) In no event shall the Trustee be responsible or liable for special, indirect, or consequential loss or damage of any kind whatsoever (including, but not limited to, loss of profit) irrespective of whether the Trustee has been advised of the likelihood of such loss or damage and regardless of the form of action; and

 

(j) The Trustee agrees to accept and act upon instructions or directions pursuant to this Indenture sent by unsecured e-mail, facsimile transmission or other similar unsecured electronic methods; provided, however, that (a) the party providing such written instructions, subsequent to such transmission of written instructions, shall provide the originally executed instructions or directions to the Trustee in a timely manner, and (b) such originally executed instructions or directions shall be signed by an authorized representative of the party providing such instructions or directions. If the party elects to give the Trustee e-mail or facsimile instructions (or instructions by a similar electronic method) and the Trustee in its discretion elects to act upon such instructions, the Trustee’s understanding of such instructions shall be deemed controlling. The Trustee shall not be liable for any losses, costs or expenses arising directly or indirectly from the Trustee’s reliance upon and compliance with such instructions notwithstanding such instructions conflict or are inconsistent with a subsequent written instruction. The party 

 

20

 

providing electronic instructions agrees to assume all risks arising out of the use of such electronic methods to submit instructions and directions to the Trustee, including without limitation the risk of the Trustee acting on unauthorized instructions, and the risk or interception and misuse by third parties.

 

In addition, the Trustee shall not be deemed to have knowledge of any Event of Default except (1) any Event of Default occurring pursuant to Sections 6.01(a)(1) and 6.01(a)(2) hereof or (2) any Event of Default of which the Trustee shall have received written notification in the manner set forth in this Indenture or a Responsible Officer of the Trustee shall have obtained actual knowledge.

 

Section 7.03 Trustee Not Responsible For Recitals Or Issuance Or Securities.

 

(a) The recitals contained herein and in the Securities shall be taken as the statements of the Company, and the Trustee assumes no responsibility for the correctness of the same.

 

(b) The Trustee makes no representations as to the validity or sufficiency of this Indenture or of the Securities.

 

(c) The Trustee shall not be accountable for the use or application by the Company of any of the Securities or of the proceeds of such Securities, or for the use or application of any moneys paid over by the Trustee in accordance with any provision of this Indenture or established pursuant to Section 2.01, or for the use or application of any moneys received by any paying agent other than the Trustee.

 

Section 7.04 May Hold Securities.

 

The Trustee or any paying agent or Security Registrar, in its individual or any other capacity, may become the owner or pledgee of Securities with the same rights it would have if it were not Trustee, paying agent or Security Registrar.

 

Section 7.05 Moneys Held In Trust.

 

Subject to the provisions of Section 11.05, all moneys received by the Trustee shall, until used or applied as herein provided, be held in trust for the purposes for which they were received, but need not be segregated from other funds except to the extent required by law. The Trustee shall be under no liability for interest on any moneys received by it hereunder except such as it may agree with the Company to pay thereon.

 

Section 7.06 Compensation And Reimbursement.

 

(a) The Company covenants and agrees to pay to the Trustee, and the Trustee shall be entitled to, such reasonable compensation (which shall not be limited by any provision of law in regard to the compensation of a trustee of an express trust) as the Company and the Trustee may from time to time agree in writing, for all services rendered by it in the execution of the trusts hereby created and in the exercise and performance of any of the powers and duties hereunder of the Trustee, and, except as otherwise expressly provided herein, the Company will pay or reimburse the Trustee upon its request for all reasonable expenses, disbursements and advances incurred or made by the Trustee in accordance with any of the provisions of this Indenture (including the reasonable compensation and the expenses and disbursements of its counsel and of all Persons not regularly in its employ), except any such expense, disbursement or advance as may arise from its negligence or bad faith and except as the Company and Trustee may from time to time agree in writing. The Company also covenants to indemnify the Trustee (and its officers, agents, directors and employees) for, and to hold it harmless against, any loss, liability or expense incurred without negligence or bad faith on the part of the Trustee and arising out of or in connection with the acceptance or administration of this trust, including the reasonable costs and expenses of defending itself against any claim of liability in the premises.

 

(b) The obligations of the Company under this Section to compensate and indemnify the Trustee and to pay or reimburse the Trustee for reasonable expenses, disbursements and advances shall constitute additional indebtedness hereunder. Such additional indebtedness shall be secured by a lien prior to that of the Securities upon all property and funds held or collected by the Trustee as such, except funds held in trust for the benefit of the holders of particular Securities.

 

21

 

Section 7.07 Reliance On Officer’s Certificate.

 

Except as otherwise provided in Section 7.01, whenever in the administration of the provisions of this Indenture the Trustee shall deem it reasonably necessary or desirable that a matter be proved or established prior to taking or suffering or omitting to take any action hereunder, such matter (unless other evidence in respect thereof be herein specifically prescribed) may, in the absence of negligence or bad faith on the part of the Trustee, be deemed to be conclusively proved and established by an Officer’s Certificate delivered to the Trustee and such certificate, in the absence of negligence or bad faith on the part of the Trustee, shall be full warrant to the Trustee for any action taken, suffered or omitted to be taken by it under the provisions of this Indenture upon the faith thereof.

 

Section 7.08 Disqualification; Conflicting Interests.

 

If the Trustee has or shall acquire any “conflicting interest” within the meaning of Section 310(b) of the Trust Indenture Act, the Trustee and the Company shall in all respects comply with the provisions of Section 310(b) of the Trust Indenture Act.

 

Section 7.09 Corporate Trustee Required; Eligibility.

 

There shall at all times be a Trustee with respect to the Securities issued hereunder which shall at all times be a corporation organized and doing business under the laws of the United States of America or any state or territory thereof or of the District of Columbia, or a corporation or other Person permitted to act as trustee by the Securities and Exchange Commission, authorized under such laws to exercise corporate trust powers, having a combined capital and surplus of at least fifty million U.S. dollars ($50,000,000), and subject to supervision or examination by federal, state, territorial, or District of Columbia authority.

 

If such corporation or other Person publishes reports of condition at least annually, pursuant to law or to the requirements of the aforesaid supervising or examining authority, then for the purposes of this Section, the combined capital and surplus of such corporation or other Person shall be deemed to be its combined capital and surplus as set forth in its most recent report of condition so published. The Company may not, nor may any Person directly or indirectly controlling, controlled by, or under common control with the Company, serve as Trustee. In case at any time the Trustee shall cease to be eligible in accordance with the provisions of this Section, the Trustee shall resign immediately in the manner and with the effect specified in Section 7.10.

 

Section 7.10 Resignation And Removal; Appointment Of Successor.

 

(a) The Trustee or any successor hereafter appointed may at any time resign with respect to the Securities of one or more series by giving written notice thereof to the Company and by transmitting notice of resignation by mail, first class postage prepaid, to the Securityholders of such series, as their names and addresses appear upon the Security Register. Upon receiving such notice of resignation, the Company shall promptly appoint a successor trustee with respect to Securities of such series by written instrument, in duplicate, executed by order of the Board of Directors, one copy of which instrument shall be delivered to the resigning Trustee and one copy to the successor trustee. If no successor trustee shall have been so appointed and have accepted appointment within 30 days after the mailing of such notice of resignation, the resigning Trustee may petition any court of competent jurisdiction for the appointment of a successor trustee with respect to Securities of such series, or any Securityholder of that series who has been a bona fide holder of a Security or Securities for at least six months may on behalf of himself and all others similarly situated, petition any such court for the appointment of a successor trustee. Such court may thereupon after such notice, if any, as it may deem proper and prescribe, appoint a successor trustee.

 

(b) In case at any time any one of the following shall occur:

 

(i) the Trustee shall fail to comply with the provisions of Section 7.08 after written request therefor by the Company or by any Securityholder who has been a bona fide holder of a Security or Securities for at least six months; or

 

(ii) the Trustee shall cease to be eligible in accordance with the provisions of Section 7.09 and shall fail to resign after written request therefor by the Company or by any such Securityholder; or

 

(iii) the Trustee shall become incapable of acting, or shall be adjudged a bankrupt or insolvent, or commence a voluntary bankruptcy proceeding, or a receiver of the Trustee or of its property shall be 

 

22

 

appointed or consented to, or any public officer shall take charge or control of the Trustee or of its property or affairs for the purpose of rehabilitation, conservation or liquidation; then, in any such case, the Company may remove the Trustee with respect to all Securities and appoint a successor trustee by written instrument, in duplicate, executed by order of the Board of Directors, one copy of which instrument shall be delivered to the Trustee so removed and one copy to the successor trustee, or any Securityholder who has been a bona fide holder of a Security or Securities for at least six months may, on behalf of that holder and all others similarly situated, petition any court of competent jurisdiction for the removal of the Trustee and the appointment of a successor trustee. Such court may thereupon after such notice, if any, as it may deem proper and prescribe, remove the Trustee and appoint a successor trustee.

 

(c) The holders of a majority in aggregate principal amount of the Securities of any series at the time Outstanding may at any time remove the Trustee with respect to such series by so notifying the Trustee and the Company and may appoint a successor Trustee for such series with the consent of the Company.

 

(d) Any resignation or removal of the Trustee and appointment of a successor trustee with respect to the Securities of a series pursuant to any of the provisions of this Section shall become effective upon acceptance of appointment by the successor trustee as provided in Section 7.11.

 

(e) Any successor trustee appointed pursuant to this Section may be appointed with respect to the Securities of one or more series or all of such series, and at any time there shall be only one Trustee with respect to the Securities of any particular series.

 

Section 7.11 Acceptance Of Appointment By Successor.

 

(a) In case of the appointment hereunder of a successor trustee with respect to all Securities, every such successor trustee so appointed shall execute, acknowledge and deliver to the Company and to the retiring Trustee an instrument accepting such appointment, and thereupon the resignation or removal of the retiring Trustee shall become effective and such successor trustee, without any further act, deed or conveyance, shall become vested with all the rights, powers, trusts and duties of the retiring Trustee; but, on the request of the Company or the successor trustee, such retiring Trustee shall, upon payment of its charges, execute and deliver an instrument transferring to such successor trustee all the rights, powers, and trusts of the retiring Trustee and shall duly assign, transfer and deliver to such successor trustee all property and money held by such retiring Trustee hereunder.

 

(b) In case of the appointment hereunder of a successor trustee with respect to the Securities of one or more (but not all) series, the Company, the retiring Trustee and each successor trustee with respect to the Securities of one or more series shall execute and deliver an indenture supplemental hereto wherein each successor trustee shall accept such appointment and which (i) shall contain such provisions as shall be necessary or desirable to transfer and confirm to, and to vest in, each successor trustee all the rights, powers, trusts and duties of the retiring Trustee with respect to the Securities of that or those series to which the appointment of such successor trustee relates, (ii) shall contain such provisions as shall be deemed necessary or desirable to confirm that all the rights, powers, trusts and duties of the retiring Trustee with respect to the Securities of that or those series as to which the retiring Trustee is not retiring shall continue to be vested in the retiring Trustee, and (iii) shall add to or change any of the provisions of this Indenture as shall be necessary to provide for or facilitate the administration of the trusts hereunder by more than one Trustee, it being understood that nothing herein or in such supplemental indenture shall constitute such Trustees co-trustees of the same trust, that each such Trustee shall be trustee of a trust or trusts hereunder separate and apart from any trust or trusts hereunder administered by any other such Trustee and that no Trustee shall be responsible for any act or failure to act on the part of any other Trustee hereunder; and upon the execution and delivery of such supplemental indenture the resignation or removal of the retiring Trustee shall become effective to the extent provided therein, such retiring Trustee shall with respect to the Securities of that or those series to which the appointment of such successor trustee relates have no further responsibility for the exercise of rights and powers or for the performance of the duties and obligations vested in the Trustee under this Indenture, and each such successor trustee, without any further act, deed or conveyance, shall become vested with all the rights, powers, trusts and duties of the retiring Trustee with respect to the Securities of that or those series to which the appointment of such successor trustee relates; but, on request of the Company or any successor trustee, such retiring Trustee shall duly assign, transfer and deliver to such successor trustee, to the extent contemplated by such supplemental indenture, the property and money held by such retiring Trustee hereunder with respect to the Securities of that or those series to which the appointment of such successor trustee relates.

 

23

 

(c) Upon request of any such successor trustee, the Company shall execute any and all instruments for more fully and certainly vesting in and confirming to such successor trustee all such rights, powers and trusts referred to in paragraph (a) or (b) of this Section, as the case may be.

 

(d) No successor trustee shall accept its appointment unless at the time of such acceptance such successor trustee shall be qualified and eligible under this Article.

 

(e) Upon acceptance of appointment by a successor trustee as provided in this Section, the Company shall transmit notice of the succession of such trustee hereunder by mail, first class postage prepaid, to the Securityholders, as their names and addresses appear upon the Security Register. If the Company fails to transmit such notice within ten days after acceptance of appointment by the successor trustee, the successor trustee shall cause such notice to be transmitted at the expense of the Company.

 

Section 7.12 Merger, Conversion, Consolidation Or Succession To Business.

 

Any corporation into which the Trustee may be merged or converted or with which it may be consolidated, or any corporation resulting from any merger, conversion or consolidation to which the Trustee shall be a party, or any corporation succeeding to the corporate trust business of the Trustee, including the administration of the trust created by this Indenture, shall be the successor of the Trustee hereunder, provided that such corporation shall be qualified under the provisions of Section 7.08 and eligible under the provisions of Section 7.09, without the execution or filing of any paper or any further act on the part of any of the parties hereto, anything herein to the contrary notwithstanding. In case any Securities shall have been authenticated, but not delivered, by the Trustee then in office, any successor by merger, conversion or consolidation to such authenticating Trustee may adopt such authentication and deliver the Securities so authenticated with the same effect as if such successor Trustee had itself authenticated such Securities.

 

Section 7.13 Preferential Collection Of Claims Against The Company.

 

The Trustee shall comply with Section 311(a) of the Trust Indenture Act, excluding any creditor relationship described in Section 311(b) of the Trust Indenture Act. A Trustee who has resigned or been removed shall be subject to Section 311(a) of the Trust Indenture Act to the extent included therein.

 

Section 7.14 Notice Of Default.

 

If any Event of Default occurs and is continuing and if such Event of Default is known to a Responsible Officer of the Trustee, the Trustee shall mail to each Securityholder in the manner and to the extent provided in Section 313(c) of the Trust Indenture Act notice of the Event of Default within 45 days after it occurs and 30 days after it is known to a Responsible Officer of the Trustee or written notice of it is received by the Trustee, unless such Event of Default has been cured; provided, however, that, except in the case of a default in the payment of the principal of (or premium, if any) or interest on any Security, the Trustee shall be protected in withholding such notice if and so long as the board of directors, the executive committee or a trust committee of directors and/or Responsible Officers of the Trustee in good faith determine that the withholding of such notice is in the interest of the Securityholders.

 

ARTICLE 8

 

CONCERNING THE SECURITYHOLDERS

 

Section 8.01 Evidence Of Action By Securityholders.

 

Whenever in this Indenture it is provided that the holders of a majority or specified percentage in aggregate principal amount of the Securities of a particular series may take any action (including the making of any demand or request, the giving of any notice, consent or waiver or the taking of any other action), the fact that at the time of taking any such action the holders of such majority or specified percentage of that series have joined therein may be evidenced by any instrument or any number of instruments of similar tenor executed by such holders of Securities of that series in person or by agent or proxy appointed in writing.

 

24

 

If the Company shall solicit from the Securityholders of any series any request, demand, authorization, direction, notice, consent, waiver or other action, the Company may, at its option, as evidenced by an Officer’s Certificate, fix in advance a record date for such series for the determination of Securityholders entitled to give such request, demand, authorization, direction, notice, consent, waiver or other action, but the Company shall have no obligation to do so. If such a record date is fixed, such request, demand, authorization, direction, notice, consent, waiver or other action may be given before or after the record date, but only the Securityholders of record at the close of business on the record date shall be deemed to be Securityholders for the purposes of determining whether Securityholders of the requisite proportion of Outstanding Securities of that series have authorized or agreed or consented to such request, demand, authorization, direction, notice, consent, waiver or other action, and for that purpose the Outstanding Securities of that series shall be computed as of the record date; provided, however, that no such authorization, agreement or consent by such Securityholders on the record date shall be deemed effective unless it shall become effective pursuant to the provisions of this Indenture not later than six months after the record date.

 

Section 8.02 Proof Of Execution By Securityholders.

 

Subject to the provisions of Section 7.01, proof of the execution of any instrument by a Securityholder (such proof will not require notarization) or his agent or proxy and proof of the holding by any Person of any of the Securities shall be sufficient if made in the following manner:

 

(a) The fact and date of the execution by any such Person of any instrument may be proved in any reasonable manner acceptable to the Trustee.

 

(b) The ownership of Securities shall be proved by the Security Register of such Securities or by a certificate of the Security Registrar thereof.

 

The Trustee may require such additional proof of any matter referred to in this Section as it shall deem necessary.

 

Section 8.03 Who May Be Deemed Owners.

 

Prior to the due presentment for registration of transfer of any Security, the Company, the Trustee, any paying agent and any Security Registrar may deem and treat the Person in whose name such Security shall be registered upon the books of the Company as the absolute owner of such Security (whether or not such Security shall be overdue and notwithstanding any notice of ownership or writing thereon made by anyone other than the Security Registrar) for the purpose of receiving payment of or on account of the principal of, premium, if any, and (subject to Section 2.03) interest on such Security and for all other purposes; and neither the Company nor the Trustee nor any paying agent nor any Security Registrar shall be affected by any notice to the contrary.

 

Section 8.04 Certain Securities Owned By Company Disregarded.

 

In determining whether the holders of the requisite aggregate principal amount of Securities of a particular series have concurred in any direction, consent or waiver under this Indenture, the Securities of that series that are owned by the Company or any other obligor on the Securities of that series or by any Person directly or indirectly controlling or controlled by or under common control with the Company or any other obligor on the Securities of that series shall be disregarded and deemed not to be Outstanding for the purpose of any such determination, except that for the purpose of determining whether the Trustee shall be protected in relying on any such direction, consent or waiver, only Securities of such series that the Trustee actually knows are so owned shall be so disregarded. The Securities so owned that have been pledged in good faith may be regarded as Outstanding for the purposes of this Section, if the pledgee shall establish to the satisfaction of the Trustee the pledgee’s right so to act with respect to such Securities and that the pledgee is not a Person directly or indirectly controlling or controlled by or under direct or indirect common control with the Company or any such other obligor. In case of a dispute as to such right, any decision by the Trustee taken upon the advice of counsel shall be full protection to the Trustee.

 

Section 8.05 Actions Binding On Future Securityholders.

 

At any time prior to (but not after) the evidencing to the Trustee, as provided in Section 8.01, of the taking of any action by the holders of the majority or percentage in aggregate principal amount of the Securities of a particular 

 

25

 

series specified in this Indenture in connection with such action, any holder of a Security of that series that is shown by the evidence to be included in the Securities the holders of which have consented to such action may, by filing written notice with the Trustee, and upon proof of holding as provided in Section 8.02, revoke such action so far as concerns such Security. Except as aforesaid any such action taken by the holder of any Security shall be conclusive and binding upon such holder and upon all future holders and owners of such Security, and of any Security issued in exchange therefor, on registration of transfer thereof or in place thereof, irrespective of whether or not any notation in regard thereto is made upon such Security. Any action taken by the holders of the majority or percentage in aggregate principal amount of the Securities of a particular series specified in this Indenture in connection with such action shall be conclusively binding upon the Company, the Trustee and the holders of all the Securities of that series.

 

ARTICLE 9

 

SUPPLEMENTAL INDENTURES

 

Section 9.01 Supplemental Indentures Without The Consent Of Securityholders.

 

In addition to any supplemental indenture otherwise authorized by this Indenture, the Company and the Trustee may from time to time and at any time enter into an indenture or indentures supplemental hereto (which shall conform to the provisions of the Trust Indenture Act as then in effect), without the consent of the Securityholders, for one or more of the following purposes:

 

(a) to cure any ambiguity, defect, or inconsistency herein or in the Securities of any series;

 

(b) to comply with Article Ten;

 

(c) to provide for uncertificated Securities in addition to or in place of certificated Securities;

 

(d) to add to the covenants, restrictions, conditions or provisions relating to the Company for the benefit of the holders of all or any series of Securities (and if such covenants, restrictions, conditions or provisions are to be for the benefit of less than all series of Securities, stating that such covenants, restrictions, conditions or provisions are expressly being included solely for the benefit of such series), to make the occurrence, or the occurrence and the continuance, of a default in any such additional covenants, restrictions, conditions or provisions an Event of Default, or to surrender any right or power herein conferred upon the Company;

 

(e) to add to, delete from, or revise the conditions, limitations, and restrictions on the authorized amount, terms, or purposes of issue, authentication, and delivery of Securities, as herein set forth;

 

(f) to make any change that does not adversely affect the rights of any Securityholder in any material respect;

 

(g) to provide for the issuance of and establish the form and terms and conditions of the Securities of any series as provided in Section 2.01, to establish the form of any certifications required to be furnished pursuant to the terms of this Indenture or any series of Securities, or to add to the rights of the holders of any series of Securities;

 

(h) to evidence and provide for the acceptance of appointment hereunder by a successor trustee; or

 

(i) to comply with any requirements of the Securities and Exchange Commission or any successor in connection with the qualification of this Indenture under the Trust Indenture Act.

 

The Trustee is hereby authorized to join with the Company in the execution of any such supplemental indenture, and to make any further appropriate agreements and stipulations that may be therein contained, but the Trustee shall not be obligated to enter into any such supplemental indenture that affects the Trustee’s own rights, duties or immunities under this Indenture or otherwise.

 

Any supplemental indenture authorized by the provisions of this Section may be executed by the Company and the Trustee without the consent of the holders of any of the Securities at the time Outstanding, notwithstanding any of the provisions of Section 9.02.

 

26

 

 

 

Section 9.02 Supplemental Indentures With Consent Of Securityholders.

 

With the consent (evidenced as provided in Section 8.01) of the holders of not less than a majority in aggregate principal amount of the Securities of each series affected by such supplemental indenture or indentures at the time Outstanding, the Company, when authorized by a Board Resolution, and the Trustee may from time to time and at any time enter into an indenture or indentures supplemental hereto (which shall conform to the provisions of the Trust Indenture Act as then in effect) for the purpose of adding any provisions to or changing in any manner or eliminating any of the provisions of this Indenture or of any supplemental indenture or of modifying in any manner not covered by Section 9.01 the rights of the holders of the Securities of such series under this Indenture; provided, however, that no such supplemental indenture shall, without the consent of the holders of each Security then Outstanding and affected thereby, (a) extend the fixed maturity of any Securities of any series, or reduce the principal amount thereof, or reduce the rate or extend the time of payment of interest thereon, or reduce any premium payable upon the redemption thereof or (b) reduce the aforesaid percentage of Securities, the holders of which are required to consent to any such supplemental indenture.

 

It shall not be necessary for the consent of the Securityholders of any series affected thereby under this Section to approve the particular form of any proposed supplemental indenture, but it shall be sufficient if such consent shall approve the substance thereof.

 

Section 9.03 Effect Of Supplemental Indentures.

 

Upon the execution of any supplemental indenture pursuant to the provisions of this Article or of Section 10.01, this Indenture shall, with respect to such series, be and be deemed to be modified and amended in accordance therewith and the respective rights, limitations of rights, obligations, duties and immunities under this Indenture of the Trustee, the Company and the holders of Securities of the series affected thereby shall thereafter be determined, exercised and enforced hereunder subject in all respects to such modifications and amendments, and all the terms and conditions of any such supplemental indenture shall be and be deemed to be part of the terms and conditions of this Indenture for any and all purposes.

 

Section 9.04 Securities Affected By Supplemental Indentures.

 

Securities of any series affected by a supplemental indenture, authenticated and delivered after the execution of such supplemental indenture pursuant to the provisions of this Article or of Section 10.01, may bear a notation in form approved by the Company, provided such form meets the requirements of any securities exchange upon which such series may be listed, as to any matter provided for in such supplemental indenture. If the Company shall so determine, new Securities of that series so modified as to conform, in the opinion of the Board of Directors, to any modification of this Indenture contained in any such supplemental indenture may be prepared by the Company, authenticated by the Trustee and delivered in exchange for the Securities of that series then Outstanding.

 

Section 9.05 Execution Of Supplemental Indentures.

 

Upon the request of the Company, accompanied by its Board Resolutions authorizing the execution of any such supplemental indenture, and upon the filing with the Trustee of evidence of the consent of Securityholders required to consent thereto as aforesaid, the Trustee shall join with the Company in the execution of such supplemental indenture unless such supplemental indenture affects the Trustee’s own rights, duties or immunities under this Indenture or otherwise, in which case the Trustee may in its discretion but shall not be obligated to enter into such supplemental indenture. The Trustee, subject to the provisions of Section 7.01, shall receive an Officer’s Certificate or an Opinion of Counsel as conclusive evidence that any supplemental indenture executed pursuant to this Article is authorized or permitted by the terms of this Article and that all conditions precedent to the execution of the supplemental indenture have been complied with; provided, however, that such Officer’s Certificate or Opinion of Counsel need not be provided in connection with the execution of a supplemental indenture that establishes the terms of a series of Securities pursuant to Section 2.01 hereof.

 

Promptly after the execution by the Company and the Trustee of any supplemental indenture pursuant to the provisions of this Section, the Trustee shall transmit by mail, first class postage prepaid, a notice, setting forth in general terms the substance of such supplemental indenture, to the Securityholders of all series affected thereby as their names and addresses appear upon the Security Register. Any failure of the Trustee to mail such notice, or any defect therein, shall not, however, in any way impair or affect the validity of any such supplemental indenture.

 

27

 

ARTICLE 10

 

SUCCESSOR ENTITY

 

Section 10.01 Company May Consolidate, Etc.

 

Nothing contained in this Indenture shall prevent any consolidation or merger of the Company with or into any other Person (whether or not affiliated with the Company) or successive consolidations or mergers in which the Company or its successor or successors shall be a party or parties, or shall prevent any sale, conveyance, transfer or other disposition of the property of the Company or its successor or successors as an entirety, or substantially as an entirety, to any other corporation (whether or not affiliated with the Company or its successor or successors) authorized to acquire and operate the same; provided, however, (a) the Company hereby covenants and agrees that, upon any such consolidation or merger (in each case, if the Company is not the survivor of such transaction), sale, conveyance, transfer or other disposition, the due and punctual payment of the principal of (premium, if any) and interest on all of the Securities of all series in accordance with the terms of each series, according to their tenor, and the due and punctual performance and observance of all the covenants and conditions of this Indenture with respect to each series or established with respect to such series pursuant to Section 2.01 to be kept or performed by the Company shall be expressly assumed, by supplemental indenture (which shall conform to the provisions of the Trust Indenture Act, as then in effect) reasonably satisfactory in form to the Trustee executed and delivered to the Trustee by the entity formed by such consolidation, or into which the Company shall have been merged, or by the entity which shall have acquired such property and (b) in the event that the Securities of any series then Outstanding are convertible into or exchangeable for shares of common stock or other securities of the Company, such entity shall, by such supplemental indenture, make provision so that the Securityholders of Securities of that series shall thereafter be entitled to receive upon conversion or exchange of such Securities the number of securities or property to which a holder of the number of shares of common stock or other securities of the Company deliverable upon conversion or exchange of those Securities would have been entitled had such conversion or exchange occurred immediately prior to such consolidation, merger, sale, conveyance, transfer or other disposition.

 

Section 10.02 Successor Entity Substituted.

 

(a) In case of any such consolidation, merger, sale, conveyance, transfer or other disposition and upon the assumption by the successor entity by supplemental indenture, executed and delivered to the Trustee and satisfactory in form to the Trustee, of the obligations set forth under Section 10.01 on all of the Securities of all series Outstanding, such successor entity shall succeed to and be substituted for the Company with the same effect as if it had been named as the Company herein, and thereupon the predecessor corporation shall be relieved of all obligations and covenants under this Indenture and the Securities.

 

(b) In case of any such consolidation, merger, sale, conveyance, transfer or other disposition, such changes in phraseology and form (but not in substance) may be made in the Securities thereafter to be issued as may be appropriate.

 

(c) Nothing contained in this Article shall require any action by the Company in the case of a consolidation or merger of any Person into the Company where the Company is the survivor of such transaction, or the acquisition by the Company, by purchase or otherwise, of all or any part of the property of any other Person (whether or not affiliated with the Company).

 

ARTICLE 11

 

SATISFACTION AND DISCHARGE

 

Section 11.01 Satisfaction And Discharge Of Indenture.

 

If at any time: (a) the Company shall have delivered to the Trustee for cancellation all Securities of a series theretofore authenticated and not delivered to the Trustee for cancellation (other than any Securities that shall have been destroyed, lost or stolen and that shall have been replaced or paid as provided in Section 2.07 and Securities for whose payment money or Governmental Obligations have theretofore been deposited in trust or segregated and held in trust by the Company and thereupon repaid to the Company or discharged from such trust, as provided in Section 11.05); or (b) all such Securities of a particular series not theretofore delivered to the Trustee for 

 

28

 

cancellation shall have become due and payable, or are by their terms to become due and payable within one year or are to be called for redemption within one year under arrangements satisfactory to the Trustee for the giving of notice of redemption, and the Company shall deposit or cause to be deposited with the Trustee as trust funds the entire amount in moneys or Governmental Obligations or a combination thereof, sufficient in the opinion of a nationally recognized firm of independent public accountants expressed in a written certification thereof delivered to the Trustee, to pay at maturity or upon redemption all Securities of that series not theretofore delivered to the Trustee for cancellation, including principal (and premium, if any) and interest due or to become due to such date of maturity or date fixed for redemption, as the case may be, and if the Company shall also pay or cause to be paid all other sums payable hereunder with respect to such series by the Company then this Indenture shall thereupon cease to be of further effect with respect to such series except for the provisions of Sections 2.03, 2.05, 2.07, 4.01, 4.02, 4.03 and 7.10, that shall survive until the date of maturity or redemption date, as the case may be, and Sections 7.06 and 11.05, that shall survive to such date and thereafter, and the Trustee, on demand of the Company and at the cost and expense of the Company shall execute proper instruments acknowledging satisfaction of and discharging this Indenture with respect to such series.

 

Section 11.02 Discharge Of Obligations.

 

If at any time all such Securities of a particular series not heretofore delivered to the Trustee for cancellation or that have not become due and payable as described in Section 11.01 shall have been paid by the Company by depositing irrevocably with the Trustee as trust funds moneys or an amount of Governmental Obligations sufficient to pay at maturity or upon redemption all such Securities of that series not theretofore delivered to the Trustee for cancellation, including principal (and premium, if any) and interest due or to become due to such date of maturity or date fixed for redemption, as the case may be, and if the Company shall also pay or cause to be paid all other sums payable hereunder by the Company with respect to such series, then after the date such moneys or Governmental Obligations, as the case may be, are deposited with the Trustee the obligations of the Company under this Indenture with respect to such series shall cease to be of further effect except for the provisions of Sections 2.03, 2.05, 2.07, 4,01, 4.02, 4,03, 7.06, 7.10 and 11.05 hereof that shall survive until such Securities shall mature and be paid.

 

Thereafter, Sections 7.06 and 11.05 shall survive.

 

Section 11.03 Deposited Moneys To Be Held In Trust.

 

All moneys or Governmental Obligations deposited with the Trustee pursuant to Sections 11.01 or 11.02 shall be held in trust and shall be available for payment as due, either directly or through any paying agent (including the Company acting as its own paying agent), to the holders of the particular series of Securities for the payment or redemption of which such moneys or Governmental Obligations have been deposited with the Trustee.

 

Section 11.04 Payment Of Moneys Held By Paying Agents.

 

In connection with the satisfaction and discharge of this Indenture all moneys or Governmental Obligations then held by any paying agent under the provisions of this Indenture shall, upon demand of the Company, be paid to the Trustee and thereupon such paying agent shall be released from all further liability with respect to such moneys or Governmental Obligations.

 

Section 11.05 Repayment To Company.

 

Any moneys or Governmental Obligations deposited with any paying agent or the Trustee, or then held by the Company, in trust for payment of principal of or premium, if any, or interest on the Securities of a particular series that are not applied but remain unclaimed by the holders of such Securities for at least two years after the date upon which the principal of (and premium, if any) or interest on such Securities shall have respectively become due and payable, or such other shorter period set forth in applicable escheat or abandoned or unclaimed property law, shall be repaid to the Company on May 31 of each year or upon the Company’s request or (if then held by the Company) shall be discharged from such trust; and thereupon the paying agent and the Trustee shall be released from all further liability with respect to such moneys or Governmental Obligations, and the holder of any of the Securities entitled to receive such payment shall thereafter, as a general creditor, look only to the Company for the payment thereof.

 

29

 

ARTICLE 12

 

IMMUNITY OF INCORPORATORS, STOCKHOLDERS, OFFICERS AND DIRECTORS

 

Section 12.01 No Recourse.

 

No recourse under or upon any obligation, covenant or agreement of this Indenture, or of any Security, or for any claim based thereon or otherwise in respect thereof, shall be had against any incorporator, stockholder, officer or director, past, present or future as such, of the Company or of any predecessor or successor corporation, either directly or through the Company or any such predecessor or successor corporation, whether by virtue of any constitution, statute or rule of law, or by the enforcement of any assessment or penalty or otherwise; it being expressly understood that this Indenture and the obligations issued hereunder are solely corporate obligations, and that no such personal liability whatever shall attach to, or is or shall be incurred by, the incorporators, stockholders, officers or directors as such, of the Company or of any predecessor or successor corporation, or any of them, because of the creation of the indebtedness hereby authorized, or under or by reason of the obligations, covenants or agreements contained in this Indenture or in any of the Securities or implied therefrom; and that any and all such personal liability of every name and nature, either at common law or in equity or by constitution or statute, of, and any and all such rights and claims against, every such incorporator, stockholder, officer or director as such, because of the creation of the indebtedness hereby authorized, or under or by reason of the obligations, covenants or agreements contained in this Indenture or in any of the Securities or implied therefrom, are hereby expressly waived and released as a condition of, and as a consideration for, the execution of this Indenture and the issuance of such Securities.

 

ARTICLE 13

 

MISCELLANEOUS PROVISIONS

 

Section 13.01 Effect On Successors And Assigns.

 

All the covenants, stipulations, promises and agreements in this Indenture made by or on behalf of the Company shall bind its successors and assigns, whether so expressed or not.

 

Section 13.02 Actions By Successor.

 

Any act or proceeding by any provision of this Indenture authorized or required to be done or performed by any board, committee or officer of the Company shall and may be done and performed with like force and effect by the corresponding board, committee or officer of any corporation that shall at the time be the lawful successor of the Company.

 

Section 13.03 Surrender Of Company Powers.

 

The Company by instrument in writing executed by authority of its Board of Directors and delivered to the Trustee may surrender any of the powers reserved to the Company, and thereupon such power so surrendered shall terminate both as to the Company and as to any successor corporation.

 

Section 13.04 Notices.

 

Except as otherwise expressly provided herein, any notice, request or demand that by any provision of this Indenture is required or permitted to be given, made or served by the Trustee or by the holders of Securities or by any other Person pursuant to this Indenture to or on the Company may be given or served by being deposited in first class mail, postage prepaid, addressed (until another address is filed in writing by the Company with the Trustee), as follows: 1020 East Meadow Circle, Palo Alto, California, 94303-4230, Attn: General Counsel. Any notice, election, request or demand by the Company or any Securityholder or by any other Person pursuant to this Indenture to or upon the Trustee shall be deemed to have been sufficiently given or made, for all purposes, if given or made in writing at the Corporate Trust Office of the Trustee.

 

30

 

Section 13.05 Governing Law.

 

This Indenture and each Security shall be deemed to be a contract made under the internal laws of the State of New York, and for all purposes shall be construed in accordance with the laws of said State, except to the extent that the Trust Indenture Act is applicable.

 

Section 13.06 Treatment Of Securities As Debt.

 

It is intended that the Securities will be treated as indebtedness and not as equity for federal income tax purposes. The provisions of this Indenture shall be interpreted to further this intention.

 

Section 13.07 Certificates And Opinions As To Conditions Precedent.

 

(a) Upon any application or demand by the Company to the Trustee to take any action under any of the provisions of this Indenture, the Company shall furnish to the Trustee an Officer’s Certificate stating that all conditions precedent provided for in this Indenture (other than the certificate to be delivered pursuant to Section 13.12) relating to the proposed action have been complied with and, if requested, an Opinion of Counsel stating that in the opinion of such counsel all such conditions precedent have been complied with, except that in the case of any such application or demand as to which the furnishing of such documents is specifically required by any provision of this Indenture relating to such particular application or demand, no additional certificate or opinion need be furnished.

 

(b) Each certificate or opinion provided for in this Indenture and delivered to the Trustee with respect to compliance with a condition or covenant in this Indenture shall include (i) a statement that the Person making such certificate or opinion has read such covenant or condition; (ii) a brief statement as to the nature and scope of the examination or investigation upon which the statements or opinions contained in such certificate or opinion are based; (iii) a statement that, in the opinion of such Person, he has made such examination or investigation as is reasonably necessary to enable him to express an informed opinion as to whether or not such covenant or condition has been complied with; and (iv) a statement as to whether or not, in the opinion of such Person, such condition or covenant has been complied with.

 

Section 13.08 Payments On Business Days.

 

Except as provided pursuant to Section 2.01 pursuant to a Board Resolution, and set forth in an Officer’s Certificate, or established in one or more indentures supplemental to this Indenture, in any case where the date of maturity of interest or principal of any Security or the date of redemption of any Security shall not be a Business Day, then payment of interest or principal (and premium, if any) may be made on the next succeeding Business Day with the same force and effect as if made on the nominal date of maturity or redemption, and no interest shall accrue for the period after such nominal date.

 

Section 13.09 Conflict With Trust Indenture Act.

 

If and to the extent that any provision of this Indenture limits, qualifies or conflicts with the duties imposed by Sections 310 to 317, inclusive, of the Trust Indenture Act, such imposed duties shall control.

 

Section 13.10 Counterparts.

 

This Indenture may be executed in any number of counterparts, each of which shall be an original, but such counterparts shall together constitute but one and the same instrument.

 

Section 13.11 Separability.

 

In case any one or more of the provisions contained in this Indenture or in the Securities of any series shall for any reason be held to be invalid, illegal or unenforceable in any respect, such invalidity, illegality or unenforceability shall not affect any other provisions of this Indenture or of such Securities, but this Indenture and such Securities shall be construed as if such invalid or illegal or unenforceable provision had never been contained herein or therein.

 

31

 

Section 13.12 Compliance Certificates.

 

The Company shall deliver to the Trustee, within 120 days after the end of each fiscal year during which any Securities of any series were outstanding, an officer’s certificate stating whether or not the signers know of any Event of Default that occurred during such fiscal year. Such certificate shall contain a certification from the principal executive officer, principal financial officer or principal accounting officer of the Company that a review has been conducted of the activities of the Company and the Company’s performance under this Indenture and that the Company has complied with all conditions and covenants under this Indenture. For purposes of this Section 13.12, such compliance shall be determined without regard to any period of grace or requirement of notice provided under this Indenture. If the officer of the Company signing such certificate has knowledge of such Event of Default, the certificate shall describe any such Event of Default and its status.

 

IN WITNESS WHEREOF, the parties hereto have caused this Indenture to be duly executed all as of the day and year first above written.

 

	
 
    	
 
    	
ANACOR PHARMACEUTICALS, INC.
    
	
 
    	
 
    	
 
    
	
 
    	
 
    	
By:
    	
 
    
	
 
    	
 
    	
Name:
    	
 
    
	
 
    	
 
    	
Title:
    	
 
    
	
 
    	
 
    	
 
    
	
 
    	
 
    	
[TRUSTEE], as Trustee
    
	
 
    	
 
    	
 
    
	
 
    	
 
    	
By:
    	
 
    
	
 
    	
 
    	
Name:
    	
 
    
	
 
    	
 
    	
Title:
    	
 
    

 

32

 

CROSS-REFERENCE TABLE (1)

 

	
SECTION OF TRUST INDENTURE ACT OF 1939, AS AMENDED
    	
 
    	
SECTION OF INDENTURE
    
	
310(a)
    	
 
    	
7.09
    
	
310(b)
    	
 
    	
7.08
    
	
 
    	
 
    	
7.10
    
	
310(c)
    	
 
    	
Inapplicable
    
	
311(a)
    	
 
    	
7.13
    
	
311(b)
    	
 
    	
7.13
    
	
311(c)
    	
 
    	
Inapplicable
    
	
312(a)
    	
 
    	
5.01
    
	
 
    	
 
    	
5.02(a)
    
	
312(b)
    	
 
    	
5.02(c)
    
	
312(c)
    	
 
    	
5.02(c)
    
	
313(a)
    	
 
    	
5.04(a)
    
	
313(b)
    	
 
    	
5.04(b)
    
	
313(c)
    	
 
    	
5.04(a)
    
	
 
    	
 
    	
5.04(b)
    
	
313(d)
    	
 
    	
5.04(c)
    
	
314(a)
    	
 
    	
5.03
    
	
 
    	
 
    	
13.12
    
	
314(b)
    	
 
    	
Inapplicable
    
	
314(c)
    	
 
    	
13.07(a)
    
	
314(d)
    	
 
    	
Inapplicable
    
	
314(e)
    	
 
    	
13.07(b)
    
	
314(f)
    	
 
    	
Inapplicable
    
	
315(a)
    	
 
    	
7.01(a)
    
	
 
    	
 
    	
7.01(b)
    
	
315(b)
    	
 
    	
7.14
    
	
315(c)
    	
 
    	
7.01
    
	
315(d)
    	
 
    	
7.01(b)
    
	
315(e)
    	
 
    	
6.07
    
	
316(a)
    	
 
    	
6.06
    
	
 
    	
 
    	
8.04
    
	
316(b)
    	
 
    	
6.04
    
	
316(c)
    	
 
    	
8.01
    
	
317(a)
    	
 
    	
6.02
    
	
317(b)
    	
 
    	
4.03
    
	
318(a)
    	
 
    	
13.09
    

 

	
(1)
    	
 
    	
This   Cross-Reference Table does not constitute part of the Indenture and shall not   have any bearing on the interpretation of any of its terms or provisions.
    

 

33

Source: [{"source": "alea-institute/alea-institute/kl3m-data-edgar-agreements/train-00197-of-00352.parquet"}, [{"source": "alea-institute/alea-institute/kl3m-data-edgar-agreements/train-00197-of-00352.parquet"}]]