June 30, 2024
false
June 30, 2024
2024
Q2
0001320461
--12-31
0.001
0.001
190,000,000
190,000,000
19,384,716
19,263,288
17,318,907
17,197,479
xbrli:shares
iso4217:USD
iso4217:USD
xbrli:shares
xbrli:pure
0001320461
2024-01-01
2024-06-30
0001320461
us-gaap:CommonStockMember
2024-01-01
2024-06-30
0001320461
us-gaap:PreferredStockMember
2024-01-01
2024-06-30
0001320461
2024-07-26
0001320461
2024-04-01
2024-06-30
0001320461
2023-04-01
2023-06-30
0001320461
2023-01-01
2023-06-30
0001320461
2024-06-30
0001320461
2023-12-31
0001320461
us-gaap:CommonStockMember
2023-12-31
0001320461
us-gaap:AdditionalPaidInCapitalMember
2023-12-31
0001320461
us-gaap:RetainedEarningsMember
2023-12-31
0001320461
us-gaap:AccumulatedOtherComprehensiveIncomeMember
2023-12-31
0001320461
cps:CooperStandardHoldingsIncEquityMember
2023-12-31
0001320461
us-gaap:NoncontrollingInterestMember
2023-12-31
0001320461
us-gaap:CommonStockMember
2024-01-01
2024-03-31
0001320461
us-gaap:AdditionalPaidInCapitalMember
2024-01-01
2024-03-31
0001320461
us-gaap:RetainedEarningsMember
2024-04-01
2024-06-30
0001320461
cps:CooperStandardHoldingsIncEquityMember
2024-01-01
2024-03-31
0001320461
2024-01-01
2024-03-31
0001320461
us-gaap:RetainedEarningsMember
2024-01-01
2024-03-31
0001320461
us-gaap:NoncontrollingInterestMember
2024-01-01
2024-03-31
0001320461
us-gaap:AccumulatedOtherComprehensiveIncomeMember
2024-01-01
2024-03-31
0001320461
us-gaap:CommonStockMember
2024-03-31
0001320461
us-gaap:AdditionalPaidInCapitalMember
2024-03-31
0001320461
us-gaap:RetainedEarningsMember
2024-03-31
0001320461
us-gaap:AccumulatedOtherComprehensiveIncomeMember
2024-03-31
0001320461
cps:CooperStandardHoldingsIncEquityMember
2024-03-31
0001320461
us-gaap:NoncontrollingInterestMember
2024-03-31
0001320461
2024-03-31
0001320461
us-gaap:CommonStockMember
2024-04-01
2024-06-30
0001320461
us-gaap:AdditionalPaidInCapitalMember
2024-04-01
2024-06-30
0001320461
cps:CooperStandardHoldingsIncEquityMember
2024-04-01
2024-06-30
0001320461
us-gaap:NoncontrollingInterestMember
2024-04-01
2024-06-30
0001320461
us-gaap:AccumulatedOtherComprehensiveIncomeMember
2024-04-01
2024-06-30
0001320461
us-gaap:CommonStockMember
2024-06-30
0001320461
us-gaap:AdditionalPaidInCapitalMember
2024-06-30
0001320461
us-gaap:RetainedEarningsMember
2024-06-30
0001320461
us-gaap:AccumulatedOtherComprehensiveIncomeMember
2024-06-30
0001320461
cps:CooperStandardHoldingsIncEquityMember
2024-06-30
0001320461
us-gaap:NoncontrollingInterestMember
2024-06-30
0001320461
us-gaap:CommonStockMember
2022-12-31
0001320461
us-gaap:AdditionalPaidInCapitalMember
2022-12-31
0001320461
us-gaap:RetainedEarningsMember
2022-12-31
0001320461
us-gaap:AccumulatedOtherComprehensiveIncomeMember
2022-12-31
0001320461
cps:CooperStandardHoldingsIncEquityMember
2022-12-31
0001320461
us-gaap:NoncontrollingInterestMember
2022-12-31
0001320461
2022-12-31
0001320461
us-gaap:CommonStockMember
2023-01-01
2023-03-31
0001320461
us-gaap:AdditionalPaidInCapitalMember
2023-01-01
2023-03-31
0001320461
us-gaap:RetainedEarningsMember
2023-04-01
2023-06-30
0001320461
cps:CooperStandardHoldingsIncEquityMember
2023-01-01
2023-03-31
0001320461
2023-01-01
2023-03-31
0001320461
us-gaap:RetainedEarningsMember
2023-01-01
2023-03-31
0001320461
us-gaap:NoncontrollingInterestMember
2023-01-01
2023-03-31
0001320461
us-gaap:AccumulatedOtherComprehensiveIncomeMember
2023-01-01
2023-03-31
0001320461
us-gaap:CommonStockMember
2023-03-31
0001320461
us-gaap:AdditionalPaidInCapitalMember
2023-03-31
0001320461
us-gaap:RetainedEarningsMember
2023-03-31
0001320461
us-gaap:AccumulatedOtherComprehensiveIncomeMember
2023-03-31
0001320461
cps:CooperStandardHoldingsIncEquityMember
2023-03-31
0001320461
us-gaap:NoncontrollingInterestMember
2023-03-31
0001320461
2023-03-31
0001320461
us-gaap:CommonStockMember
2023-04-01
2023-06-30
0001320461
us-gaap:AdditionalPaidInCapitalMember
2023-04-01
2023-06-30
0001320461
cps:CooperStandardHoldingsIncEquityMember
2023-04-01
2023-06-30
0001320461
us-gaap:NoncontrollingInterestMember
2023-04-01
2023-06-30
0001320461
us-gaap:AccumulatedOtherComprehensiveIncomeMember
2023-04-01
2023-06-30
0001320461
us-gaap:CommonStockMember
2023-06-30
0001320461
us-gaap:AdditionalPaidInCapitalMember
2023-06-30
0001320461
us-gaap:RetainedEarningsMember
2023-06-30
0001320461
us-gaap:AccumulatedOtherComprehensiveIncomeMember
2023-06-30
0001320461
cps:CooperStandardHoldingsIncEquityMember
2023-06-30
0001320461
us-gaap:NoncontrollingInterestMember
2023-06-30
0001320461
2023-06-30
0001320461
cps:AutomotiveMember
cps:SealingsystemsMember
2024-04-01
2024-06-30
0001320461
cps:AutomotiveMember
cps:TotalFluidHandlingMember
2024-04-01
2024-06-30
0001320461
cps:AutomotiveMember
us-gaap:CorporateAndOtherMember
2024-04-01
2024-06-30
0001320461
cps:AutomotiveMember
2024-04-01
2024-06-30
0001320461
cps:CommercialMember
cps:SealingsystemsMember
2024-04-01
2024-06-30
0001320461
cps:TotalFluidHandlingMember
cps:CommercialMember
2024-04-01
2024-06-30
0001320461
cps:CommercialMember
us-gaap:CorporateAndOtherMember
2024-04-01
2024-06-30
0001320461
cps:CommercialMember
2024-04-01
2024-06-30
0001320461
cps:OtherCustomersMember
cps:SealingsystemsMember
2024-04-01
2024-06-30
0001320461
cps:TotalFluidHandlingMember
cps:OtherCustomersMember
2024-04-01
2024-06-30
0001320461
cps:OtherCustomersMember
us-gaap:CorporateAndOtherMember
2024-04-01
2024-06-30
0001320461
cps:OtherCustomersMember
2024-04-01
2024-06-30
0001320461
cps:SealingsystemsMember
2024-04-01
2024-06-30
0001320461
cps:TotalFluidHandlingMember
2024-04-01
2024-06-30
0001320461
us-gaap:CorporateAndOtherMember
2024-04-01
2024-06-30
0001320461
cps:AutomotiveMember
cps:SealingsystemsMember
2024-01-01
2024-06-30
0001320461
cps:AutomotiveMember
cps:TotalFluidHandlingMember
2024-01-01
2024-06-30
0001320461
cps:AutomotiveMember
us-gaap:CorporateAndOtherMember
2024-01-01
2024-06-30
0001320461
cps:AutomotiveMember
2024-01-01
2024-06-30
0001320461
cps:CommercialMember
cps:SealingsystemsMember
2024-01-01
2024-06-30
0001320461
cps:TotalFluidHandlingMember
cps:CommercialMember
2024-01-01
2024-06-30
0001320461
cps:CommercialMember
us-gaap:CorporateAndOtherMember
2024-01-01
2024-06-30
0001320461
cps:CommercialMember
2024-01-01
2024-06-30
0001320461
cps:OtherCustomersMember
cps:SealingsystemsMember
2024-01-01
2024-06-30
0001320461
cps:TotalFluidHandlingMember
cps:OtherCustomersMember
2024-01-01
2024-06-30
0001320461
cps:OtherCustomersMember
us-gaap:CorporateAndOtherMember
2024-01-01
2024-06-30
0001320461
cps:OtherCustomersMember
2024-01-01
2024-06-30
0001320461
cps:SealingsystemsMember
2024-01-01
2024-06-30
0001320461
cps:TotalFluidHandlingMember
2024-01-01
2024-06-30
0001320461
us-gaap:CorporateAndOtherMember
2024-01-01
2024-06-30
0001320461
cps:AutomotiveMember
cps:SealingsystemsMember
2023-04-01
2023-06-30
0001320461
cps:AutomotiveMember
cps:TotalFluidHandlingMember
2023-04-01
2023-06-30
0001320461
cps:AutomotiveMember
us-gaap:CorporateAndOtherMember
2023-04-01
2023-06-30
0001320461
cps:AutomotiveMember
2023-04-01
2023-06-30
0001320461
cps:CommercialMember
cps:SealingsystemsMember
2023-04-01
2023-06-30
0001320461
cps:TotalFluidHandlingMember
cps:CommercialMember
2023-04-01
2023-06-30
0001320461
cps:CommercialMember
us-gaap:CorporateAndOtherMember
2023-04-01
2023-06-30
0001320461
cps:CommercialMember
2023-04-01
2023-06-30
0001320461
cps:OtherCustomersMember
cps:SealingsystemsMember
2023-04-01
2023-06-30
0001320461
cps:TotalFluidHandlingMember
cps:OtherCustomersMember
2023-04-01
2023-06-30
0001320461
cps:OtherCustomersMember
us-gaap:CorporateAndOtherMember
2023-04-01
2023-06-30
0001320461
cps:OtherCustomersMember
2023-04-01
2023-06-30
0001320461
cps:SealingsystemsMember
2023-04-01
2023-06-30
0001320461
cps:TotalFluidHandlingMember
2023-04-01
2023-06-30
0001320461
us-gaap:CorporateAndOtherMember
2023-04-01
2023-06-30
0001320461
cps:AutomotiveMember
cps:SealingsystemsMember
2023-01-01
2023-06-30
0001320461
cps:AutomotiveMember
cps:TotalFluidHandlingMember
2023-01-01
2023-06-30
0001320461
cps:AutomotiveMember
us-gaap:CorporateAndOtherMember
2023-01-01
2023-06-30
0001320461
cps:AutomotiveMember
2023-01-01
2023-06-30
0001320461
cps:CommercialMember
cps:SealingsystemsMember
2023-01-01
2023-06-30
0001320461
cps:TotalFluidHandlingMember
cps:CommercialMember
2023-01-01
2023-06-30
0001320461
cps:CommercialMember
us-gaap:CorporateAndOtherMember
2023-01-01
2023-06-30
0001320461
cps:CommercialMember
2023-01-01
2023-06-30
0001320461
cps:OtherCustomersMember
cps:SealingsystemsMember
2023-01-01
2023-06-30
0001320461
cps:TotalFluidHandlingMember
cps:OtherCustomersMember
2023-01-01
2023-06-30
0001320461
cps:OtherCustomersMember
us-gaap:CorporateAndOtherMember
2023-01-01
2023-06-30
0001320461
cps:OtherCustomersMember
2023-01-01
2023-06-30
0001320461
cps:SealingsystemsMember
2023-01-01
2023-06-30
0001320461
cps:TotalFluidHandlingMember
2023-01-01
2023-06-30
0001320461
us-gaap:CorporateAndOtherMember
2023-01-01
2023-06-30
0001320461
cps:SealingsystemsMember
srt:NorthAmericaMember
2024-04-01
2024-06-30
0001320461
cps:TotalFluidHandlingMember
srt:NorthAmericaMember
2024-04-01
2024-06-30
0001320461
srt:NorthAmericaMember
cps:OtherproductsMember
2024-04-01
2024-06-30
0001320461
srt:NorthAmericaMember
2024-04-01
2024-06-30
0001320461
srt:EuropeMember
cps:SealingsystemsMember
2024-04-01
2024-06-30
0001320461
cps:TotalFluidHandlingMember
srt:EuropeMember
2024-04-01
2024-06-30
0001320461
srt:EuropeMember
cps:OtherproductsMember
2024-04-01
2024-06-30
0001320461
srt:EuropeMember
2024-04-01
2024-06-30
0001320461
cps:SealingsystemsMember
srt:AsiaPacificMember
2024-04-01
2024-06-30
0001320461
cps:TotalFluidHandlingMember
srt:AsiaPacificMember
2024-04-01
2024-06-30
0001320461
srt:AsiaPacificMember
cps:OtherproductsMember
2024-04-01
2024-06-30
0001320461
srt:AsiaPacificMember
2024-04-01
2024-06-30
0001320461
cps:SealingsystemsMember
srt:SouthAmericaMember
2024-04-01
2024-06-30
0001320461
cps:TotalFluidHandlingMember
srt:SouthAmericaMember
2024-04-01
2024-06-30
0001320461
srt:SouthAmericaMember
cps:OtherproductsMember
2024-04-01
2024-06-30
0001320461
srt:SouthAmericaMember
2024-04-01
2024-06-30
0001320461
us-gaap:CorporateAndOtherMember
cps:SealingsystemsMember
2024-04-01
2024-06-30
0001320461
cps:TotalFluidHandlingMember
us-gaap:CorporateAndOtherMember
2024-04-01
2024-06-30
0001320461
us-gaap:CorporateAndOtherMember
cps:OtherproductsMember
2024-04-01
2024-06-30
0001320461
us-gaap:CorporateAndOtherMember
2024-04-01
2024-06-30
0001320461
cps:SealingsystemsMember
2024-04-01
2024-06-30
0001320461
cps:TotalFluidHandlingMember
2024-04-01
2024-06-30
0001320461
cps:OtherproductsMember
2024-04-01
2024-06-30
0001320461
cps:SealingsystemsMember
srt:NorthAmericaMember
2024-01-01
2024-06-30
0001320461
cps:TotalFluidHandlingMember
srt:NorthAmericaMember
2024-01-01
2024-06-30
0001320461
srt:NorthAmericaMember
cps:OtherproductsMember
2024-01-01
2024-06-30
0001320461
srt:NorthAmericaMember
2024-01-01
2024-06-30
0001320461
srt:EuropeMember
cps:SealingsystemsMember
2024-01-01
2024-06-30
0001320461
cps:TotalFluidHandlingMember
srt:EuropeMember
2024-01-01
2024-06-30
0001320461
srt:EuropeMember
cps:OtherproductsMember
2024-01-01
2024-06-30
0001320461
srt:EuropeMember
2024-01-01
2024-06-30
0001320461
cps:SealingsystemsMember
srt:AsiaPacificMember
2024-01-01
2024-06-30
0001320461
cps:TotalFluidHandlingMember
srt:AsiaPacificMember
2024-01-01
2024-06-30
0001320461
srt:AsiaPacificMember
cps:OtherproductsMember
2024-01-01
2024-06-30
0001320461
srt:AsiaPacificMember
2024-01-01
2024-06-30
0001320461
cps:SealingsystemsMember
srt:SouthAmericaMember
2024-01-01
2024-06-30
0001320461
cps:TotalFluidHandlingMember
srt:SouthAmericaMember
2024-01-01
2024-06-30
0001320461
srt:SouthAmericaMember
cps:OtherproductsMember
2024-01-01
2024-06-30
0001320461
srt:SouthAmericaMember
2024-01-01
2024-06-30
0001320461
us-gaap:CorporateAndOtherMember
cps:SealingsystemsMember
2024-01-01
2024-06-30
0001320461
cps:TotalFluidHandlingMember
us-gaap:CorporateAndOtherMember
2024-01-01
2024-06-30
0001320461
us-gaap:CorporateAndOtherMember
cps:OtherproductsMember
2024-01-01
2024-06-30
0001320461
us-gaap:CorporateAndOtherMember
2024-01-01
2024-06-30
0001320461
cps:SealingsystemsMember
2024-01-01
2024-06-30
0001320461
cps:TotalFluidHandlingMember
2024-01-01
2024-06-30
0001320461
cps:OtherproductsMember
2024-01-01
2024-06-30
0001320461
cps:SealingsystemsMember
srt:NorthAmericaMember
2023-04-01
2023-06-30
0001320461
cps:TotalFluidHandlingMember
srt:NorthAmericaMember
2023-04-01
2023-06-30
0001320461
srt:NorthAmericaMember
cps:OtherproductsMember
2023-04-01
2023-06-30
0001320461
srt:NorthAmericaMember
2023-04-01
2023-06-30
0001320461
srt:EuropeMember
cps:SealingsystemsMember
2023-04-01
2023-06-30
0001320461
cps:TotalFluidHandlingMember
srt:EuropeMember
2023-04-01
2023-06-30
0001320461
srt:EuropeMember
cps:OtherproductsMember
2023-04-01
2023-06-30
0001320461
srt:EuropeMember
2023-04-01
2023-06-30
0001320461
cps:SealingsystemsMember
srt:AsiaPacificMember
2023-04-01
2023-06-30
0001320461
cps:TotalFluidHandlingMember
srt:AsiaPacificMember
2023-04-01
2023-06-30
0001320461
srt:AsiaPacificMember
cps:OtherproductsMember
2023-04-01
2023-06-30
0001320461
srt:AsiaPacificMember
2023-04-01
2023-06-30
0001320461
cps:SealingsystemsMember
srt:SouthAmericaMember
2023-04-01
2023-06-30
0001320461
cps:TotalFluidHandlingMember
srt:SouthAmericaMember
2023-04-01
2023-06-30
0001320461
srt:SouthAmericaMember
cps:OtherproductsMember
2023-04-01
2023-06-30
0001320461
srt:SouthAmericaMember
2023-04-01
2023-06-30
0001320461
us-gaap:CorporateAndOtherMember
cps:SealingsystemsMember
2023-04-01
2023-06-30
0001320461
cps:TotalFluidHandlingMember
us-gaap:CorporateAndOtherMember
2023-04-01
2023-06-30
0001320461
us-gaap:CorporateAndOtherMember
cps:OtherproductsMember
2023-04-01
2023-06-30
0001320461
us-gaap:CorporateAndOtherMember
2023-04-01
2023-06-30
0001320461
cps:SealingsystemsMember
2023-04-01
2023-06-30
0001320461
cps:TotalFluidHandlingMember
2023-04-01
2023-06-30
0001320461
cps:OtherproductsMember
2023-04-01
2023-06-30
0001320461
cps:SealingsystemsMember
srt:NorthAmericaMember
2023-01-01
2023-06-30
0001320461
cps:TotalFluidHandlingMember
srt:NorthAmericaMember
2023-01-01
2023-06-30
0001320461
srt:NorthAmericaMember
cps:OtherproductsMember
2023-01-01
2023-06-30
0001320461
srt:NorthAmericaMember
2023-01-01
2023-06-30
0001320461
srt:EuropeMember
cps:SealingsystemsMember
2023-01-01
2023-06-30
0001320461
cps:TotalFluidHandlingMember
srt:EuropeMember
2023-01-01
2023-06-30
0001320461
srt:EuropeMember
cps:OtherproductsMember
2023-01-01
2023-06-30
0001320461
srt:EuropeMember
2023-01-01
2023-06-30
0001320461
cps:SealingsystemsMember
srt:AsiaPacificMember
2023-01-01
2023-06-30
0001320461
cps:TotalFluidHandlingMember
srt:AsiaPacificMember
2023-01-01
2023-06-30
0001320461
srt:AsiaPacificMember
cps:OtherproductsMember
2023-01-01
2023-06-30
0001320461
srt:AsiaPacificMember
2023-01-01
2023-06-30
0001320461
cps:SealingsystemsMember
srt:SouthAmericaMember
2023-01-01
2023-06-30
0001320461
cps:TotalFluidHandlingMember
srt:SouthAmericaMember
2023-01-01
2023-06-30
0001320461
srt:SouthAmericaMember
cps:OtherproductsMember
2023-01-01
2023-06-30
0001320461
srt:SouthAmericaMember
2023-01-01
2023-06-30
0001320461
us-gaap:CorporateAndOtherMember
cps:SealingsystemsMember
2023-01-01
2023-06-30
0001320461
cps:TotalFluidHandlingMember
us-gaap:CorporateAndOtherMember
2023-01-01
2023-06-30
0001320461
us-gaap:CorporateAndOtherMember
cps:OtherproductsMember
2023-01-01
2023-06-30
0001320461
us-gaap:CorporateAndOtherMember
2023-01-01
2023-06-30
0001320461
cps:SealingsystemsMember
2023-01-01
2023-06-30
0001320461
cps:TotalFluidHandlingMember
2023-01-01
2023-06-30
0001320461
cps:OtherproductsMember
2023-01-01
2023-06-30
0001320461
us-gaap:ShortTermContractWithCustomerMember
2024-06-30
0001320461
us-gaap:ShortTermContractWithCustomerMember
2023-12-31
0001320461
us-gaap:LongTermContractWithCustomerMember
2024-06-30
0001320461
us-gaap:LongTermContractWithCustomerMember
2023-12-31
0001320461
us-gaap:EmployeeSeveranceMember
2023-12-31
0001320461
us-gaap:OtherRestructuringMember
2023-12-31
0001320461
us-gaap:EmployeeSeveranceMember
2024-01-01
2024-06-30
0001320461
us-gaap:OtherRestructuringMember
2024-01-01
2024-06-30
0001320461
us-gaap:EmployeeSeveranceMember
2024-06-30
0001320461
us-gaap:OtherRestructuringMember
2024-06-30
0001320461
cps:SealingsystemsMember
2023-12-31
0001320461
cps:TotalFluidHandlingMember
2023-12-31
0001320461
cps:IndustrialSpecialtyGroupMember
2023-12-31
0001320461
cps:IndustrialSpecialtyGroupMember
2024-01-01
2024-06-30
0001320461
cps:SealingsystemsMember
2024-06-30
0001320461
cps:TotalFluidHandlingMember
2024-06-30
0001320461
cps:IndustrialSpecialtyGroupMember
2024-06-30
0001320461
us-gaap:CustomerRelationshipsMember
2024-06-30
0001320461
us-gaap:OtherIntangibleAssetsMember
2024-06-30
0001320461
us-gaap:CustomerRelationshipsMember
2023-12-31
0001320461
us-gaap:OtherIntangibleAssetsMember
2023-12-31
0001320461
us-gaap:SeniorLoansMember
2024-01-01
2024-06-30
0001320461
us-gaap:SeniorLienMember
2024-06-30
0001320461
us-gaap:SeniorLienMember
2023-12-31
0001320461
us-gaap:SeniorLoansMember
2024-06-30
0001320461
us-gaap:SeniorLoansMember
2023-12-31
0001320461
us-gaap:SeniorNotesMember
2024-06-30
0001320461
us-gaap:SeniorNotesMember
2023-12-31
0001320461
us-gaap:SeniorNotesMember
2016-11-02
0001320461
us-gaap:SeniorLoansMember
2023-01-27
0001320461
us-gaap:SeniorNotesMember
2023-01-27
0001320461
cps:AmendedSeniorAblFacilityMember
2022-03-31
0001320461
cps:AmendedSeniorAblFacilityMember
2024-06-30
0001320461
cps:AmendedSeniorAblFacilityMember
2016-11-02
0001320461
us-gaap:RevolvingCreditFacilityMember
2024-06-30
0001320461
us-gaap:RevolvingCreditFacilityMember
2023-12-31
0001320461
us-gaap:OtherDebtSecuritiesMember
2024-01-01
2024-06-30
0001320461
us-gaap:OtherCurrentAssetsMember
us-gaap:FairValueInputsLevel2Member
2024-06-30
0001320461
us-gaap:OtherCurrentAssetsMember
us-gaap:FairValueInputsLevel2Member
2023-12-31
0001320461
us-gaap:FairValueInputsLevel2Member
us-gaap:AccruedLiabilitiesMember
2024-06-30
0001320461
us-gaap:FairValueInputsLevel2Member
us-gaap:AccruedLiabilitiesMember
2023-12-31
0001320461
us-gaap:CashFlowHedgingMember
us-gaap:ForeignExchangeContractMember
2024-06-30
0001320461
us-gaap:CashFlowHedgingMember
us-gaap:ForeignExchangeContractMember
2023-12-31
0001320461
us-gaap:PensionPlansDefinedBenefitMember
country:US
2024-04-01
2024-06-30
0001320461
cps:NonUnitedStatesMember
us-gaap:PensionPlansDefinedBenefitMember
2024-04-01
2024-06-30
0001320461
us-gaap:PensionPlansDefinedBenefitMember
country:US
2023-04-01
2023-06-30
0001320461
cps:NonUnitedStatesMember
us-gaap:PensionPlansDefinedBenefitMember
2023-04-01
2023-06-30
0001320461
us-gaap:PensionPlansDefinedBenefitMember
country:US
2024-01-01
2024-06-30
0001320461
cps:NonUnitedStatesMember
us-gaap:PensionPlansDefinedBenefitMember
2024-01-01
2024-06-30
0001320461
us-gaap:PensionPlansDefinedBenefitMember
country:US
2023-01-01
2023-06-30
0001320461
cps:NonUnitedStatesMember
us-gaap:PensionPlansDefinedBenefitMember
2023-01-01
2023-06-30
0001320461
us-gaap:OtherPostretirementBenefitPlansDefinedBenefitMember
country:US
2024-04-01
2024-06-30
0001320461
us-gaap:OtherPostretirementBenefitPlansDefinedBenefitMember
cps:NonUnitedStatesMember
2024-04-01
2024-06-30
0001320461
us-gaap:OtherPostretirementBenefitPlansDefinedBenefitMember
country:US
2023-04-01
2023-06-30
0001320461
us-gaap:OtherPostretirementBenefitPlansDefinedBenefitMember
cps:NonUnitedStatesMember
2023-04-01
2023-06-30
0001320461
us-gaap:OtherPostretirementBenefitPlansDefinedBenefitMember
country:US
2024-01-01
2024-06-30
0001320461
us-gaap:OtherPostretirementBenefitPlansDefinedBenefitMember
cps:NonUnitedStatesMember
2024-01-01
2024-06-30
0001320461
us-gaap:OtherPostretirementBenefitPlansDefinedBenefitMember
country:US
2023-01-01
2023-06-30
0001320461
us-gaap:OtherPostretirementBenefitPlansDefinedBenefitMember
cps:NonUnitedStatesMember
2023-01-01
2023-06-30
0001320461
us-gaap:AccumulatedTranslationAdjustmentMember
2024-03-31
0001320461
us-gaap:AccumulatedTranslationAdjustmentMember
2023-03-31
0001320461
us-gaap:AccumulatedTranslationAdjustmentMember
2023-12-31
0001320461
us-gaap:AccumulatedTranslationAdjustmentMember
2022-12-31
0001320461
us-gaap:AccumulatedTranslationAdjustmentMember
2024-04-01
2024-06-30
0001320461
us-gaap:AccumulatedTranslationAdjustmentMember
2023-04-01
2023-06-30
0001320461
us-gaap:AccumulatedTranslationAdjustmentMember
2024-01-01
2024-06-30
0001320461
us-gaap:AccumulatedTranslationAdjustmentMember
2023-01-01
2023-06-30
0001320461
us-gaap:AccumulatedTranslationAdjustmentMember
2024-06-30
0001320461
us-gaap:AccumulatedTranslationAdjustmentMember
2023-06-30
0001320461
us-gaap:AccumulatedDefinedBenefitPlansAdjustmentMember
2024-03-31
0001320461
us-gaap:AccumulatedDefinedBenefitPlansAdjustmentMember
2023-03-31
0001320461
us-gaap:AccumulatedDefinedBenefitPlansAdjustmentMember
2023-12-31
0001320461
us-gaap:AccumulatedDefinedBenefitPlansAdjustmentMember
2022-12-31
0001320461
us-gaap:AccumulatedDefinedBenefitPlansAdjustmentMember
2024-04-01
2024-06-30
0001320461
us-gaap:AccumulatedDefinedBenefitPlansAdjustmentMember
2023-04-01
2023-06-30
0001320461
us-gaap:AccumulatedDefinedBenefitPlansAdjustmentMember
2024-01-01
2024-06-30
0001320461
us-gaap:AccumulatedDefinedBenefitPlansAdjustmentMember
2023-01-01
2023-06-30
0001320461
us-gaap:AccumulatedDefinedBenefitPlansAdjustmentMember
2024-06-30
0001320461
us-gaap:AccumulatedDefinedBenefitPlansAdjustmentMember
2023-06-30
0001320461
us-gaap:AccumulatedNetGainLossFromDesignatedOrQualifyingCashFlowHedgesMember
2024-03-31
0001320461
us-gaap:AccumulatedNetGainLossFromDesignatedOrQualifyingCashFlowHedgesMember
2023-03-31
0001320461
us-gaap:AccumulatedNetGainLossFromDesignatedOrQualifyingCashFlowHedgesMember
2023-12-31
0001320461
us-gaap:AccumulatedNetGainLossFromDesignatedOrQualifyingCashFlowHedgesMember
2022-12-31
0001320461
us-gaap:AccumulatedNetGainLossFromDesignatedOrQualifyingCashFlowHedgesMember
2024-04-01
2024-06-30
0001320461
us-gaap:AccumulatedNetGainLossFromDesignatedOrQualifyingCashFlowHedgesMember
2023-04-01
2023-06-30
0001320461
us-gaap:AccumulatedNetGainLossFromDesignatedOrQualifyingCashFlowHedgesMember
2024-01-01
2024-06-30
0001320461
us-gaap:AccumulatedNetGainLossFromDesignatedOrQualifyingCashFlowHedgesMember
2023-01-01
2023-06-30
0001320461
us-gaap:AccumulatedNetGainLossFromDesignatedOrQualifyingCashFlowHedgesMember
2024-06-30
0001320461
us-gaap:AccumulatedNetGainLossFromDesignatedOrQualifyingCashFlowHedgesMember
2023-06-30
0001320461
cps:A2018ProgramMember
2024-06-30
0001320461
us-gaap:ReportableSubsegmentsMember
2024-04-01
2024-06-30
0001320461
us-gaap:ReportableSubsegmentsMember
2023-04-01
2023-06-30
0001320461
us-gaap:ReportableSubsegmentsMember
2024-01-01
2024-06-30
0001320461
us-gaap:ReportableSubsegmentsMember
2023-01-01
2023-06-30
0001320461
us-gaap:ReportableSubsegmentsMember
2024-06-30
0001320461
us-gaap:ReportableSubsegmentsMember
2023-12-31
0001320461
us-gaap:CorporateAndOtherMember
2024-06-30
0001320461
us-gaap:CorporateAndOtherMember
2023-12-31
UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
___________________________________
FORM
10-Q
___________________________________
(Mark One)
QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934
For the quarterly period ended June 30, 2024
or
TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934
For the transition period from __________ to __________.
Commission File Number:
001-36127
________________________________________________________________________________
_________________
COOPER-STANDARD HOLDINGS INC.
(Exact name of registrant as specified in its charter)
________________________________________________________________________________
_________________
Delaware 20-1945088
(State or other jurisdiction of incorporation or organization) (I.R.S. Employer Identification No.)
40300 Traditions Drive
Northville
,
Michigan
48168
(Address of principal executive offices) (Zip Code)
(
248
)
596-5900
(Registrant's telephone number, including area code)
_______________________________________________________
Securities registered pursuant to Section 12(b) of the Act:
Title of each class Trading Symbol(s) Name of each exchange on which registered
Common Stock, par value $0.001 per share CPS New York Stock Exchange
Preferred Stock Purchase Rights - New York Stock Exchange
Indicate by check mark whether the registrant (1) has filed all reports
required to be filed by Section 13 or 15(d) of the Securities Exchange Act of
1934 during the preceding 12 months (or for such shorter period that the
registrant was required to file such reports), and (2) has been subject to
such filing requirements for the past 90 days.
Yes
No
Indicate by check mark whether the registrant has submitted electronically
every Interactive Data File required to be submitted pursuant to Rule 405 of
Regulation S-T ((s)232.405 of this chapter) during the preceding 12 months (or
for such shorter period that the registrant was required to submit such files).
Yes
No
Indicate by check mark whether the registrant is a large accelerated filer, an
accelerated filer, a non-accelerated filer, a smaller reporting company, or
emerging growth company. See definitions of "large accelerated filer,"
"accelerated filer," "smaller reporting company," and "emerging growth
company" in Rule 12b-2 of the Exchange Act.
Large accelerated filer Accelerated filer
Non-accelerated filer Smaller reporting company
Emerging growth company
If an emerging growth company, indicate by check mark if the registrant has
elected not to use the extended transition period for complying with any new
or revised financial accounting standards provided pursuant to Section 13(a)
of the Exchange Act.
Indicate by check mark whether the registrant is a shell company (as defined
in Rule 12b-2 of the Exchange Act). Yes
No
As of July 26, 2024, there were
17,318,907
shares of the registrant's common stock, $0.001 par value, outstanding.
1
-------------------------------------------------------------------------------
COOPER-STANDARD HOLDINGS INC.
Form 10-Q
For the period ended June 30, 2024
Page
PART I. FINANCIAL INFORMATION
Item 1. Financial Statements (
u
naudited)
Condensed Consolidated Statements of Operations 3
Condensed Consolidated Statements of Comprehensive Loss 4
Condensed Consolidated Balance Sheets 5
Condensed Consolidated Statements of Changes in Equity 6
Condensed Consolidated Statements of Cash Flows 7
Notes to Condensed Consolidated Financial Statements 8
Item 2. Management's Discussion and Analysis of 25
Financial Condition and Results of Operations
Item 3. Quantitative and Qualitative 35
Disclosures About Market Risk
Item 4. Controls and Procedures 36
PART II. OTHER INFORMATION
Item 2. Unregistered Sales of Equity 37
Securities and Use of Proceeds
Item 5. Other Information 38
Item 6. Exhibits 39
SIGNATURES 40
2
-------------------------------------------------------------------------------
PART I - FINANCIAL INFORMATION
Item 1. Financial Statements
COOPER-STANDARD HOLDINGS INC.
CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS
(Unaudited)
(Dollar amounts in thousands except per share amounts)
Three Months Ended June 30, Six Months Ended June 30,
2024 2023 2024 2023
Sales $ 708,362 $ 723,740 $ 1,384,787 $ 1,406,198
Cost of products sold 625,422 646,026 1,240,204 1,286,656
Gross profit 82,940 77,714 144,583 119,542
Selling, administration 52,408 54,605 107,774 106,694
& engineering expenses
Amortization 1,605 1,672 3,266 3,479
of intangibles
Restructuring charges 17,781 8,499 18,914 10,878
Impairment charges - 654 - 654
Operating income (loss) 11,146 12,284 14,629 (
2,163
)
Interest expense, net ( ( ( (
of interest income 28,635 34,034 57,916 64,254
) ) ) )
Equity in earnings 1,302 656 3,572 458
of affiliates
Loss on refinancing and - - - (
extinguishment of debt 81,885
)
Pension settlement charge ( - ( -
46,787 46,787
) )
Other expense, net ( ( ( (
5,129 2,561 8,778 6,565
) ) ) )
Loss before income taxes ( ( ( (
68,103 23,655 95,280 154,409
) ) ) )
Income tax expense 8,080 4,765 12,211 5,123
Net loss ( ( ( (
76,183 28,420 107,491 159,532
) ) ) )
Net (income) loss attributable ( 591 ( 1,336
to noncontrolling interests 60 412
) )
Net loss attributable to $ ( $ ( $ ( $ (
Cooper-Standard Holdings Inc. 76,243 27,829 107,903 158,196
) ) ) )
Loss per share:
Basic $ ( $ ( $ ( $ (
4.34 1.61 6.16 9.15
) ) ) )
Diluted $ ( $ ( $ ( $ (
4.34 1.61 6.16 9.15
) ) ) )
The accompanying notes are an integral part of these financial statements.
3
-------------------------------------------------------------------------------
COOPER-STANDARD HOLDINGS INC.
CONDENSED CONSOLIDATED STATEMENTS OF COMPREHENSIVE LOSS
(Unaudited)
(Dollar amounts in thousands)
Three Months Ended June 30, Six Months Ended June 30,
2024 2023 2024 2023
Net loss $ ( $ ( $ ( $ (
76,183 28,420 107,491 159,532
) ) ) )
Other comprehensive income (loss):
Currency translation adjustment ( ( ( (
7,674 6,889 14,782 6,982
) ) ) )
Benefit plan liabilities adjustment, net of tax 2,889 142 3,042 242
Pension settlement, net of tax 48,190 - 48,190 -
Fair value change of derivatives, net of tax ( ( ( 1,769
6,413 574 2,872
) ) )
Other comprehensive income (loss), net of tax 36,992 ( 33,578 (
7,321 4,971
) )
Comprehensive loss ( ( ( (
39,191 35,741 73,913 164,503
) ) ) )
Comprehensive (income) loss attributable to noncontrolling interests ( 185 ( 953
112 601
) )
Comprehensive loss attributable to Cooper-Standard Holdings Inc. $ ( $ ( $ ( $ (
39,303 35,556 74,514 163,550
) ) ) )
The accompanying notes are an integral part of these financial statements.
4
-------------------------------------------------------------------------------
COOPER-STANDARD HOLDINGS INC.
CONDENSED CONSOLIDATED BALANCE SHEETS
(Dollar amounts in thousands except share amounts)
June 30, 2024 December 31, 2023
(unaudited)
Assets
Current assets:
Cash and cash equivalents $ 93,793 $ 154,801
Accounts receivable, net 367,132 380,562
Tooling receivable, net 72,197 80,225
Inventories 171,851 146,846
Prepaid expenses 27,125 28,328
Value added tax receivable 61,507 69,684
Other current assets 42,964 40,140
Total current assets 836,569 900,586
Property, plant and equipment, net 568,381 608,431
Operating lease right-of-use assets, net 92,184 91,126
Goodwill 140,688 140,814
Intangible assets, net 37,089 40,568
Other assets 92,039 90,774
Total assets $ 1,766,950 $ 1,872,299
Liabilities and Equity
Current liabilities:
Debt payable $ 49,551 $ 50,712
within one year
Accounts payable 333,555 334,578
Payroll liabilities 100,939 132,422
Accrued liabilities 113,952 116,954
Current operating lease liabilities 19,623 18,577
Total current liabilities 617,620 653,243
Long-term debt 1,057,322 1,044,736
Pension benefits 97,715 100,578
Postretirement benefits other than pensions 27,959 28,940
Long-term operating lease liabilities 76,203 76,482
Other liabilities 51,036 58,053
Total liabilities 1,927,855 1,962,032
Equity:
Common stock, $0.001 par value, 190,000,000 shares 17 17
authorized; 19,384,716 shares issued and 17,318,907 shares
outstanding as of June 30, 2024, and 19,263,288 shares issued
and 17,197,479 shares outstanding as of December 31, 2023
Additional paid-in capital 514,905 512,164
Retained deficit ( (
499,719 391,816
) )
Accumulated other comprehensive loss ( (
168,276 201,665
) )
Total Cooper-Standard Holdings Inc. equity ( (
153,073 81,300
) )
Noncontrolling interests ( (
7,832 8,433
) )
Total equity ( (
160,905 89,733
) )
Total liabilities $ 1,766,950 $ 1,872,299
and equity
The accompanying notes are an integral part of these financial statements.
5
-------------------------------------------------------------------------------
COOPER-STANDARD HOLDINGS INC.
CONDENSED CONSOLIDATED STATEMENTS OF CHANGES IN EQUITY
(Unaudited)
(Dollar amounts in thousands except share amounts)
Total Equity
Common Shares Common Stock Additional Retained Accumulated Cooper-Standard Noncontrolling To
Paid-In Deficit Other Holdings Interests
Capital Comprehensive Inc. Equity
(Loss) Income
Balance 17,197,479 $ 17 $ 512,164 $ ( $ ( $ ( $ ( $ (
as of 391,816 201,665 81,300 8,433 89,733
December ) ) ) ) )
31, 2023
Share-based 92,666 - 668 - - 668 - 668
compensation,
net
Net (loss) - - - ( - ( 352 (
income 31,660 31,660 31,308
) ) )
Other - - - - ( ( 137 (
comprehensive 3,551 3,551 3,414
(loss) income ) ) )
Balance 17,290,145 $ 17 $ 512,832 $ ( $ ( $ ( $ ( $ (
as of 423,476 205,216 115,843 7,944 123,787
March ) ) ) ) )
31,
2024
Share-based 28,762 - 2,073 - - 2,073 - 2,073
compensation,
net
Net (loss) - - - ( - ( 60 (
income 76,243 76,243 76,183
) ) )
Other - - - - 36,940 36,940 52 36,992
comprehensive
income
Balance 17,318,907 $ 17 $ 514,905 $ ( $ ( $ ( $ ( $ (
as of 499,719 168,276 153,073 7,832 160,905
June 30, ) ) ) ) )
2024
tal Equity
Total Equity
Common Shares Common Stock Additional Retained Accumulated Cooper-Standard Noncontrolling To
Paid-In Deficit Other Holdings Interests
Capital Comprehensive Inc. Equity
(Loss) Income
Balance 17,108,029 $ 17 $ 507,498 $ ( $ ( $ 107,713 $ ( $ 101,192
as of 189,831 209,971 6,521
December ) ) )
31, 2022
Share-based 30,489 - 740 - - 740 - 740
compensation,
net
Net loss - - - ( - ( ( (
130,367 130,367 745 131,112
) ) ) )
Other - - - - 2,373 2,373 ( 2,350
comprehensive 23
income (loss) )
Balance 17,138,518 $ 17 $ 508,238 $ ( $ ( $ ( $ ( $ (
as of 320,198 207,598 19,541 7,289 26,830
March ) ) ) ) )
31,
2023
Share-based 58,035 - 868 - - 868 - 868
compensation,
net
Net loss - - - ( - ( ( (
27,829 27,829 591 28,420
) ) ) )
Other - - - - ( ( 406 (
comprehensive 7,727 7,727 7,321
(loss) income ) ) )
Balance 17,196,553 $ 17 $ 509,106 $ ( $ ( $ ( $ ( $ (
as of 348,027 215,325 54,229 7,474 61,703
June 30, ) ) ) ) )
2023
tal Equity
The accompanying notes are an integral part of these financial statements.
6
-------------------------------------------------------------------------------
COOPER-STANDARD HOLDINGS INC.
CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS
(Unaudited)
(Dollar amounts in thousands)
Six Months Ended June 30,
2024 2023
Operating activities:
Net loss $ ( $ (
107,491 159,532
) )
Adjustments to reconcile net loss to net cash (used in) provided by operating activities:
Depreciation 49,070 52,319
Amortization of intangibles 3,266 3,479
Impairment charges - 654
Pension settlement charge 46,787 -
Share-based compensation expense 4,862 2,705
Equity in (earnings) losses of affiliates, net of dividends related to earnings ( 720
1,995
)
Loss on refinancing and extinguishment of debt - 81,885
Payment-in-kind interest 12,367 27,500
Deferred income taxes 915 20
Other 2,601 2,376
Changes in operating assets and liabilities ( 5,024
36,594
)
Net cash (used in) provided by operating activities ( 17,150
26,212
)
Investing activities:
Capital expenditures ( (
28,077 46,760
) )
Other 242 1,638
Net cash used in investing activities ( (
27,835 45,122
) )
Financing activities:
Proceeds from issuance of long-term debt, net of debt issuance costs - 925,020
Repayment and refinancing of long-term debt - (
927,046
)
Principal payments on long-term debt ( (
1,255 949
) )
Decrease in short-term debt, net ( (
264 1,240
) )
Debt issuance costs and other fees ( (
1,403 74,376
) )
Taxes withheld and paid on employees' share-based payment awards ( (
571 209
) )
Other - (
238
)
Net cash used in financing activities ( (
3,493 79,038
) )
Effects of exchange rate changes on cash, cash equivalents and restricted cash ( (
4,580 4,565
) )
Changes in cash, cash equivalents and restricted cash ( (
62,120 111,575
) )
Cash, cash equivalents and restricted cash at beginning of period 163,061 192,807
Cash, cash equivalents and restricted cash at end of period $ 100,941 $ 81,232
Reconciliation of cash, cash equivalents and restricted cash to the condensed consolidated balance sheets:
Balance as of
June 30, 2024 December 31, 2023
Cash and cash equivalents $ 93,793 $ 154,801
Restricted cash included in other current assets 5,267 7,244
Restricted cash included in other assets 1,881 1,016
Total cash, cash equivalents and restricted cash $ 100,941 $ 163,061
The accompanying notes are an integral part of these financial statements.
7
-------------------------------------------------------------------------------
NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS
(Unaudited)
(Dollar amounts in thousands except per share and share amounts)
1.
Overview
Basis of Presentation
Cooper-Standard Holdings Inc. (together with its consolidated subsidiaries,
the "Company" or "Cooper Standard"), through its wholly-owned subsidiary,
Cooper-Standard Automotive Inc. ("CSA U.S."), is a leading manufacturer of
sealing and fluid handling systems (consisting of fuel and brake delivery
systems and fluid transfer systems). The Company's products are primarily for
use in passenger vehicles and light trucks that are manufactured by global
automotive original equipment manufacturers ("OEMs") and replacement markets.
The Company conducts substantially all of its activities through its
subsidiaries.
The accompanying unaudited condensed consolidated financial statements have
been prepared pursuant to the rules and regulations of the U.S. Securities and
Exchange Commission (the "SEC") for interim financial information and should
be read in conjunction with the consolidated financial statements and notes
thereto included in the Company's Annual Report on Form 10-K for the year
ended December 31, 2023 (the "2023 Annual Report"), as filed with the SEC.
Accordingly, they do not include all of the information and footnotes required
by accounting principles generally accepted in the United States ("U.S. GAAP")
for complete financial statements. These financial statements include all
adjustments (consisting of normal, recurring adjustments) considered necessary
for a fair presentation of the financial position and results of operations of
the Company. The operating results for the interim period ended June 30, 2024
are not necessarily indicative of results for the full year. In preparing
these financial statements, the Company has evaluated events and transactions
for potential recognition or disclosure through the date the financial
statements were issued.
As disclosed in its 2023 Annual Report, effective January 1, 2024, the Company
changed its management reporting structure with the launch of global product
line-focused business segments. This resulted in the realignment of its
reportable segments, which are determined based on how the chief operating
decision maker ("CODM") manages the business, allocates resources, makes
operating decisions and evaluates operating performance. As a result, the
Company established two reportable segments: Sealing Systems and Fluid
Handling Systems. All other business activities are reported in Corporate,
eliminations and other. The segment realignment had no impact on the Company's
consolidated financial position, results of operations, or cash flows. All
segment information included in this Form 10-Q is reflective of this new
structure and prior period information has been revised to conform to the
Company's current period presentation. Refer to Note 15. "Segment Reporting"
for additional information on the Company's reportable segments and to Note 5.
"Goodwill and Intangible Assets" for the impact thereof to the evaluation of
recorded goodwill balances.
Recently Adopted Accounting Pronouncements
The Company adopted the following Accounting Standard Update ("ASU") during
the six months ended June 30, 2024, which did not have a material impact on
its condensed consolidated financial statements:
Standard Description Effective Date
ASU 2023-07, Requires disclosure of significant segment expenses that are January 1, 2024
Segment Reporting (Topic 280): Improvements regularly provided to the CODM and included within each reported
to Reportable Segment Disclosures measure of segment profit or loss, an amount and description
of its composition for other segment items to reconcile
to segment profit or loss, and the title and position of the
entity's CODM beginning with annual disclosures in 2024. The
amendments in this update also require all annual segment
disclosures to be included in interim periods beginning in 2025.
8
-------------------------------------------------------------------------------
NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS (Continued)
(Unaudited)
(Dollar amounts in thousands except per share and share amounts)
Recently Issued Accounting Pronouncements
The Company considered the recently issued accounting pronouncements
summarized as follows, which could have a material impact on its consolidated
financial statements or disclosures:
Standard Description Impact Effective Date
ASU 2023-09, Requires disaggregated The Company is January 1, 2025
Income Taxes (Topic information currently evaluating
740): Improvements about a reporting the impact of this update
to Income Tax Disclosures entity's effective on its consolidated financial
tax rate reconciliation statements and disclosures.
as well as
information on income taxes paid.
ASU 2023-05, Requires joint ventures to apply The Company is January 1, 2025
Business Combinations - a new basis of accounting upon currently evaluating
Joint Venture Formations formation, and as a result, the impact of this update
(Subtopic 805-60): Recognition initially measure all assets and on its consolidated financial
and Initial Measurement liabilities at fair value (with statements and disclosures.
exceptions to fair value measurement
that are consistent with the
business combinations guidance).
2.
Revenue
Revenue is recognized for manufactured parts at a point in time, generally
when products are shipped or delivered. The Company usually enters into
agreements with customers to produce products at the beginning of a vehicle's
life. Blanket purchase orders received from customers and related documents
generally establish the annual terms, including pricing, related to a vehicle
model. Customers typically pay for parts based on customary business practices
with payment terms generally between 30 and 90 days.
Consistent with the Company's change in reportable segments as described in
Note 1. "Overview", the Company has changed its revenue disaggregation
presentation to align with the new reportable segment structure. Revenue by
customer group for the three months ended June 30, 2024 was as follows:
Sealing Systems Fluid Handling Systems Other Consolidated
Passenger and Light Duty $ 356,326 $ 315,871 $ - $ 672,197
Commercial 7,986 2,925 2,319 13,230
Other 634 3,946 18,355 22,935
Revenue $ 364,946 $ 322,742 $ 20,674 $ 708,362
Revenue by customer group for the six months ended June 30, 2024 was as follows:
Sealing Systems Fluid Handling Systems Other Consolidated
Passenger and Light Duty $ 699,847 $ 615,051 $ - $ 1,314,898
Commercial 15,351 5,851 4,218 25,420
Other 1,027 7,355 36,087 44,469
Revenue $ 716,225 $ 628,257 $ 40,305 $ 1,384,787
Revenue by customer group for the three months ended June 30, 2023 was as
follows:
Sealing Systems Fluid Handling Systems Other Consolidated
Passenger and Light Duty $ 364,849 $ 309,719 $ 1,154 $ 675,722
Commercial 7,913 3,137 2,042 13,092
Other 215 4,311 30,400 34,926
Revenue $ 372,977 $ 317,167 $ 33,596 $ 723,740
9
-------------------------------------------------------------------------------
NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS (Continued)
(Unaudited)
(Dollar amounts in thousands except per share and share amounts)
Revenue by customer group for the six months ended June 30, 2023 was as follows:
Sealing Systems Fluid Handling Systems Other Consolidated
Passenger and Light Duty $ 706,129 $ 603,312 $ 2,053 $ 1,311,494
Commercial 15,383 6,336 3,955 25,674
Other 445 8,117 60,468 69,030
Revenue $ 721,957 $ 617,765 $ 66,476 $ 1,406,198
The passenger and light duty group consists of sales to automotive OEMs and
automotive suppliers, while the commercial group represents sales to OEMs of
on- and off-highway commercial equipment and vehicles. The other customer
group includes sales related to specialty and adjacent markets.
Substantially all of the Company's revenues were generated from sealing and
fluid handling systems (consisting of fuel and brake delivery systems and
fluid transfer systems) for use in passenger vehicles and light trucks
manufactured by global OEMs.
A summary of the Company's products is as follows:
Product Line Description
Sealing Systems Protect vehicle interiors from weather, dust and noise intrusion for an improved driving
experience; provide aesthetic and functional class-A exterior surface treatment.
Fuel and Brake Delivery Systems Sense, deliver and control fluids to fuel and brake systems.
Fluid Transfer Systems Sense, deliver and control fluids and vapors
for optimal powertrain & HVAC operation.
Revenue by geographical region for the three months ended June 30, 2024 was as
follows:
Sealing Systems Fluid Handling Systems Other Consolidated
North America $ 158,020 $ 240,220 $ - $ 398,240
Europe 123,095 31,475 - 154,570
Asia Pacific 60,923 42,160 - 103,083
South America 22,908 8,887 - 31,795
Corporate, eliminations and other - - 20,674 20,674
Revenue $ 364,946 $ 322,742 $ 20,674 $ 708,362
Revenue by geographical region for the six months ended June 30, 2024 was as
follows:
Sealing Systems Fluid Handling Systems Other Consolidated
North America $ 308,871 $ 465,588 $ - $ 774,459
Europe 248,814 66,337 - 315,151
Asia Pacific 115,204 80,041 - 195,245
South America 43,336 16,291 - 59,627
Corporate, eliminations and other - - 40,305 40,305
Revenue $ 716,225 $ 628,257 $ 40,305 $ 1,384,787
10
-------------------------------------------------------------------------------
NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS (Continued)
(Unaudited)
(Dollar amounts in thousands except per share and share amounts)
Revenue by geographical region for the three months ended June 30, 2023 was as
follows:
Sealing Systems Fluid Handling Systems Other Consolidated
North America $ 138,158 $ 230,651 $ - $ 368,809
Europe 141,656 36,241 - 177,897
Asia Pacific 68,250 41,674 - 109,924
South America 24,913 8,601 - 33,514
Corporate, eliminations and other - - 33,596 33,596
Revenue $ 372,977 $ 317,167 $ 33,596 $ 723,740
Revenue by geographical region for the six months ended June 30, 2023 was as
follows:
Sealing Systems Fluid Handling Systems Other Consolidated
North America $ 276,270 $ 457,657 $ - $ 733,927
Europe 272,771 66,980 - 339,751
Asia Pacific 125,362 78,327 - 203,689
South America 47,554 14,801 - 62,355
Corporate, eliminations and other - - 66,476 66,476
Revenue $ 721,957 $ 617,765 $ 66,476 $ 1,406,198
Contract Estimates
The amount of revenue recognized is usually based on the purchase order price
and adjusted for variable consideration, including pricing concessions. The
Company accrues for pricing concessions by reducing revenue as products are
shipped or delivered. The accruals are based on historical experience,
anticipated performance and management's best judgment. The Company also
generally has ongoing adjustments to customer pricing arrangements based on
the content and cost of its products. Such pricing accruals are adjusted as
they are settled with customers. Customer returns, which are infrequent, are
usually related to quality or shipment issues and are recorded as a reduction
of revenue. The Company generally does not recognize significant return
obligations due to their infrequent nature.
Contract Balances
The Company's contract assets consist of unbilled amounts associated with
variable pricing arrangements in the Asia Pacific region. Once pricing is
finalized, contract assets are transferred to accounts receivable. As a
result, the timing of revenue recognition and billings, as well as changes in
foreign exchange rates, will impact contract assets on an ongoing basis.
Contract assets were not materially impacted by any other factors during the
six months ended June 30, 2024.
The Company's contract liabilities consist of advance payments received and
due from customers. Net contract assets (liabilities) consisted of the
following:
June 30, 2024 December 31, 2023 Change
Contract assets $ 607 $ 437 $ 170
Contract liabilities ( ( -
15 15
) )
Net contract assets $ 592 $ 422 $ 170
Other
The Company, at times, enters into agreements that provide for lump sum
payments to customers. These payment agreements are recorded as a reduction of
revenue during the period in which the commitment is made, unless the payment
is contractually recoverable. Amounts related to commitments of future
payments to customers in the condensed consolidated balance sheets as of June
30, 2024 and December 31, 2023 were current liabilities of $
10,796
and $
10,164
, respectively, and long-term liabilities of $
2,485
and $
4,293
, respectively.
The Company provides assurance-type warranties to its customers. Such
warranties provide customers with assurance that the related product will
function as intended and complies with any agreed-upon specifications, and are
recognized in cost of products sold.
11
-------------------------------------------------------------------------------
NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS (Continued)
(Unaudited)
(Dollar amounts in thousands except per share and share amounts)
3.
Restructuring
On an ongoing basis, the Company evaluates its business and objectives to
ensure that it is properly configured and sized based on changing market
conditions. Accordingly, the Company has implemented several restructuring
initiatives, including closure or consolidation of facilities throughout the
world and the reorganization of its operating structure.
In May 2024, the Board of Directors of the Company approved a restructuring
plan that will eliminate up to 400 salaried, contract and open positions based
on the Company's recently announced product line organizational structure and
current and anticipated market demands. The restructuring effort aims to
further improve and maximize the Company's operational efficiency by
streamlining business practices and deployed resources, and improving the
organization's overall cost structure.
During the three and six months ended June 30, 2024, the Company recognized
total restructuring expenses of $
17,781
and $
18,914
, respectively, $16,700 of which related to the restructuring plan approved in
May 2024. The Company anticipates total expense related to the restructuring
plan approved in May 2024 of approximately $17,000 to $20,000 to be primarily
recognized in 2024. The cash expenditures include severance and other related
costs directly attributable to the restructuring activities which will be paid
in 2024 and 2025. The Company anticipates these restructuring activities to
provide approximately $40,000 in annualized savings upon completion.
The Company's restructuring charges consist of severance, retention and
outplacement services, and severance-related postemployment benefits
(collectively, "employee separation costs"), along with other related exit
costs and asset impairments related to restructuring activities (collectively,
"other exit costs"). Employee separation costs are recorded based on existing
union and employee contracts, statutory requirements, completed negotiations
and Company policy.
As further described in Note 15. "Segment Reporting", effective January 1,
2024, the Company changed its management reporting structure with the launch
of global product line-focused business segments. As a result, the Company
established two reportable segments: Sealing Systems and Fluid Handling
Systems. Accordingly, prior period restructuring charges have been revised to
conform to the Company's current period presentation.
Restructuring charges by segment were as follows:
Three Months Ended June 30, Six Months Ended June 30,
2024 2023 2024 2023
Sealing systems $ 10,526 $ 3,292 $ 11,174 $ 4,265
Fluid handling systems 2,500 5,137 2,825 6,241
Corporate and other 4,755 70 4,915 372
Total $ 17,781 $ 8,499 $ 18,914 $ 10,878
Restructuring activity for the six months ended June 30, 2024 was as follows:
Employee Separation Costs Other Exit Costs Total
Balance as of December 31, 2023 $ 18,960 $ 5,333 $ 24,293
Expense 17,719 1,195 18,914
Cash payments ( ( (
8,614 4,117 12,731
) ) )
Foreign exchange translation and other ( ( (
428 259 687
) ) )
Balance as of June 30, 2024 $ 27,637 $ 2,152 $ 29,789
4.
Inventories
Inventories consist of the following:
June 30, 2024 December 31, 2023
Finished goods $ 45,935 $ 38,022
Work in process 43,439 38,284
Raw materials and supplies 82,477 70,540
Total $ 171,851 $ 146,846
12
-------------------------------------------------------------------------------
NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS (Continued)
(Unaudited)
(Dollar amounts in thousands except per share and share amounts)
5.
Goodwill and Intangible Assets
Goodwill
As further described in Note 15. "Segment Reporting", effective January 1,
2024, the Company changed its management reporting structure with the launch
of global product line-focused business segments. Based on this change, the
Company established two reportable segments: Sealing Systems and Fluid
Handling Systems. The two reportable segments, along with the Industrial
Specialty Group business, are the applicable reporting units for purposes of
goodwill assignment and evaluation.
As a result of the segment realignment, the Company allocated goodwill to the
reporting units existing under the new organizational structure on a relative
fair value basis. The Company estimated the fair values of the reporting units
based upon the present value of their anticipated future cash flows. The
Company's determination of fair value involved judgment and the use of
estimates and assumptions. In conjunction with the goodwill allocation, the
Company performed a quantitative impairment assessment of goodwill immediately
before and after the segment realignment. The quantitative analyses did not
result in any impairment charges as the fair value of each reporting unit
exceeded its respective carrying value.
Changes in the carrying amount of goodwill by reporting unit for the six
months ended June 30, 2024 were as follows:
Sealing Systems Fluid Handling Systems Industrial Specialty Group Total
Balance as of December 31, 2023 $ 47,775 $ 80,303 $ 12,736 $ 140,814
Foreign exchange translation ( - - (
126 126
) )
Balance as of June 30, 2024 $ 47,649 $ 80,303 $ 12,736 $ 140,688
Goodwill is tested for impairment by reporting unit annually or more
frequently if events or circumstances indicate that an impairment may exist.
There were no indicators of potential impairment during the six months ended
June 30, 2024.
Intangible Assets
Definite-lived i
ntangible assets and accumulated amortization balances as of June 30, 2024 and
December 31, 2023 were as follows:
Gross Carrying Amount Accumulated Net Carrying Amount
Amortization
Customer relationships $ 152,161 $ ( $ 16,518
135,643
)
Other 37,798 ( 20,571
17,227
)
Balance as of June 30, 2024 $ 189,959 $ ( $ 37,089
152,870
)
Customer relationships $ 152,403 $ ( $ 18,705
133,698
)
Other 38,090 ( 21,863
16,227
)
Balance as of December 31, 2023 $ 190,493 $ ( $ 40,568
149,925
)
6.
Debt and Other Financing
A summary of outstanding debt as of June 30, 2024 and December 31, 2023 is as
follows:
June 30, 2024 December 31, 2023
First Lien Notes $ 609,644 $ 595,966
Third Lien Notes 387,425 386,681
2026 Senior Notes 42,377 42,338
Finance leases 20,566 22,243
Other borrowings 46,861 48,220
Total debt 1,106,873 1,095,448
Less: current portion ( (
49,551 50,712
) )
Total long-term debt $ 1,057,322 $ 1,044,736
13
-------------------------------------------------------------------------------
NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS (Continued)
(Unaudited)
(Dollar amounts in thousands except per share and share amounts)
First Lien Notes
On January 27, 2023, the Company issued $
580,000
aggregate principal amount of its 13.50% Cash Pay / PIK Toggle Senior Secured
First Lien Notes due 2027 (the "First Lien Notes"). The First Lien Notes
mature on March 31, 2027 and bear interest at the rate of 13.50% per annum,
which is payable in cash semi-annually on June 15 and December 15 of each
year. Interest payments commenced on June 15, 2023. However, for the first
four interest periods the Company has the option, in its sole discretion, to
pay up to 4.50% of such interest by increasing the principal amount of the
outstanding First Lien Notes or, in limited circumstances, by issuing
additional First Lien Notes. As of June 30, 2024 and December 31, 2023, the
aggregate principal amount of the First Lien Notes of $
609,644
and $
595,966
, respectively, recognized in the condensed consolidated balance sheets
reflect the election to pay 4.50% of the first three interest payments as
payment-in-kind. The Company has elected to pay the fourth interest payment,
due December 15, 2024, on the First Lien Notes in cash.
As of June 30, 2024 and December 31, 2023, the Company had $
6,925
and $
8,184
, respectively, of unamortized debt issuance costs, and $
285
and $
337
, respectively, of unamortized original issue discount related to the First
Lien Notes, which are presented as direct deductions from the principal
balance in the condensed consolidated balance sheets. Both the debt issuance
costs and the original issue discount are amortized into interest expense over
the term of the First Lien Notes.
Third Lien Notes
On January 27, 2023, the Company issued $
357,446
aggregate principal amount of its 5.625% Cash Pay / 10.625% PIK Toggle Senior
Secured Third Lien Notes due 2027 (the "Third Lien Notes"). The Third Lien
Notes mature on May 15, 2027 and bear interest at the rate of 5.625% per
annum, which is payable in cash semi-annually on June 15 and December 15 of
each year. Interest payments commenced on June 15, 2023. However, for the
first four interest periods the Company has the option, in its sole
discretion, to pay such interest at 10.625% per annum either by increasing the
principal amount of the outstanding Third Lien Notes or, in limited
circumstances, by issuing additional Third Lien Notes. As of June 30, 2024 and
December 31, 2023, the aggregate principal amount of the Third Lien Notes of $
387,425
and $
386,681
, respectively, recognized in the condensed consolidated balance sheets
reflect the election to fully pay the first two interest payments as
payment-in-kind. The Company elected to pay the third and fourth interest
payments, due June 15, 2024 and December 15, 2024, respectively, on the Third
Lien Notes in cash.
Debt issuance costs related to the Third Lien Notes are amortized into
interest expense over the term of the Third Lien Notes. As of June 30, 2024
and December 31, 2023, the Company had $
4,342
and $
5,087
, respectively, of unamortized debt issuance costs related to the Third Lien
Notes, which are presented as a direct deduction from the principal balance in
the condensed consolidated balance sheets.
2026 Senior Notes
On November 2, 2016, the Company issued $
400,000
aggregate principal amount of its 5.625% Senior Notes due 2026 (the "2026
Senior Notes"). As part of certain refinancing transactions that were
completed on January 27, 2023, the Company exchanged $
357,446
aggregate principal amount of its 2026 Senior Notes for $357,446 aggregate
principal amount of its newly issued Third Lien Notes. Following the
completion of the exchange, $
42,554
aggregate principal amount of the 2026 Senior Notes remain outstanding. The
2026 Senior Notes mature on November 15, 2026 and bear interest at the rate of
5.625% per annum, which is payable in cash semi-annually on May 15 and
November 15 of each year.
Debt issuance costs are being amortized into interest expense over the term of
the 2026 Senior Notes. As of June 30, 2024 and December 31, 2023, the Company
had $
177
and $
216
, respectively, of unamortized debt issuance costs related to the 2026 Senior
Notes, which is presented as a direct deduction from the principal balance in
the condensed consolidated balance sheets.
ABL Facility
On November 2, 2016, the Company entered into a third amendment and
restatement of the ABL Facility. In March 2020, the Company entered into
Amendment No. 1 to the Third Amended and Restated Loan Agreement ("the First
Amendment"). As a result of the First Amendment, the ABL Facility maturity was
extended to March 2025 and the aggregate revolving loan commitment was reduced
to $
180,000
. In May 2020, the Company entered into Amendment No. 2 to the Third Amended
and Restated Loan Agreement (the "Second Amendment"), which modified certain
covenants under the ABL Facility. In December 2022, the Company entered into
Amendment No. 3 to the Third Amended and Restated Loan Agreement (the "Third
Amendment"), which became effective on January 27, 2023. In May 2024, the
Company entered into Amendment No. 4 to the Third Amended and Restated Loan
Agreement (the "Fourth Amendment"), which, among other things, (1) extended
the termination date for revolving commitments totaling $150,000 from March
24, 2025 ( "Existing Termination Date") to May 6, 2029; (2) provided for
leverage-based interest rate margin and commitment fee step-downs; and (3)
replaced the Canadian BA Rate with Term CORRA as the applicable benchmark rate
for all purposes under the ABL Facility for
14
-------------------------------------------------------------------------------
NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS (Continued)
(Unaudited)
(Dollar amounts in thousands except per share and share amounts)
revolving loans denominated in Canadian Dollars. Revolving commitments
totaling $30,000 will terminate on the Existing Termination Date.
The aggregate revolving loan availability includes a $
100,000
letter of credit sub-facility and a $
25,000
swing line sub-facility. The ABL Facility also provides for an uncommitted $
100,000
incremental loan facility, for a potential total ABL Facility of $
280,000
(if requested by the Borrowers and the lenders agree to fund such increase).
No consent of any lender (other than those participating in the increase) is
required to effect any such increase.
The Company's borrowing base as of June 30, 2024 was
$
180,000
and the monthly fixed charge coverage ratio was at a level that provided the
Company full access to the borrowing base. Net of
$
7,264
of outstanding letters of credit, the Company effectively had
$
172,736
available for borrowing under its ABL Facility as of June 30, 2024.
As of June 30, 2024 and December 31, 2023, there were no borrowings under the
ABL Facility.
As of June 30, 2024 and December 31, 2023, the Company had $
2,125
and $
862
, respectively, of unamortized debt issuance costs related to the ABL Facility
recorded in other long-term assets in the condensed consolidated balance
sheets.
Debt Covenants
The Company was in compliance with all applicable covenants of the First Lien
Notes, Third Lien Notes, 2026 Senior Notes, and ABL Facility as of June 30,
2024.
Other Financing
Finance leases and other.
Other borrowings as of June 30, 2024 and December 31, 2023 reflect finance
leases and other borrowings under local bank lines classified in debt payable
within
one year
in the condensed consolidated balance sheets.
Receivable factoring.
As a part of its working capital management, the Company sells certain
receivables through a single third-party financial institution (the "Factor")
in a pan-European program. The amount sold varies each month based on the
amount of underlying receivables and cash flow needs of the Company. These are
permitted transactions under the Company's credit agreements governing the ABL
Facility and the indentures governing the First Lien Notes, Third Lien Notes,
and 2026 Secured Notes. The European factoring facility allows the Company to
factor up to 70,000 of its Euro-denominated accounts receivable, accelerating
access to cash and reducing credit risk.
The factoring facility expires on December 31, 2026.
Costs incurred on the sale of receivables are recorded in other expense, net
in the condensed consolidated statements of operations. The sale of
receivables under this contract is considered an off-balance sheet arrangement
to the Company and is accounted for as a true sale and is excluded from
accounts receivable in the condensed consolidated balance sheets.
Amounts outstanding under receivable transfer agreements entered into by
various locations as of the period end were as follows:
June 30, 2024 December 31, 2023
Off-balance sheet arrangements $ 62,471 $ 47,903
Accounts receivable factored and related costs throughout the period were as
follows:
Off-Balance Sheet Arrangements
Three Months Ended June 30, Six Months Ended June 30,
2024 2023 2024 2023
Accounts receivable factored $ 124,171 $ 114,260 $ 245,287 $ 217,305
Costs 767 636 1,420 1,073
As of June 30, 2024 and December 31, 2023, cash collections on behalf of the
Factor that have yet to be remitted were $
4,327
and $
6,466
, respectively, and are reflected in other current assets as restricted cash
in the condensed consolidated balance sheets.
15
-------------------------------------------------------------------------------
NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS (Continued)
(Unaudited)
(Dollar amounts in thousands except per share and share amounts)
7.
Fair Value Measurements and Financial Instruments
Fair Value Measurements
Fair value is defined as an exit price, representing the amount that would be
received to sell an asset or paid to transfer a liability in an orderly
transaction between market participants. As such, fair value is a market-based
measurement that should be determined based upon assumptions that market
participants would use in pricing an asset or liability. As a basis for
considering such assumptions, a three-tier fair value hierarchy is utilized,
which prioritizes the inputs used in measuring fair value as follows:
Level 1: Observable inputs such as quoted prices in active markets;
Level 2: Inputs, other than quoted prices in active markets,
that are observable either directly or indirectly; and
Level 3: Unobservable inputs in which there is little or no market data,
which require the reporting entity to develop its own assumptions.
Items Measured at Fair Value on a Recurring Basis
Estimates of the fair value of foreign currency derivative instruments are
determined using exchange traded prices and rates. The Company also considers
the risk of non-performance in the estimation of fair value and includes an
adjustment for non-performance risk in the measure of fair value of derivative
instruments. In certain instances where market data is not available, the
Company uses management judgment to develop assumptions that are used to
determine fair value.
Fair value measurements and the fair value hierarchy level for the Company's
assets and liabilities measured or disclosed at fair value on a recurring
basis as of June 30, 2024 and December 31, 2023 were as follows:
June 30, 2024 December 31, 2023 Input
Forward foreign exchange contracts - other current assets $ 216 $ 1,285 Level 2
Forward foreign exchange contracts - accrued liabilities $ ( $ ( Level 2
2,796 998
) )
Items Measured at Fair Value on a Nonrecurring Basis
In addition to items that are measured at fair value on a recurring basis, the
Company measures certain assets and liabilities at fair value on a
nonrecurring basis, which are not included in the table above. As these
nonrecurring fair value measurements are generally determined using
unobservable inputs, these fair value measurements are classified within Level
3 of the fair value hierarchy.
Items Not Carried at Fair Value
Fair values of the Company's First Lien Notes, Third Lien Notes, and 2026
Senior Notes were as follows:
June 30, 2024 December 31, 2023
Aggregate fair value $ 997,262 $ 984,448
Aggregate carrying value $ 1,051,175 $ 1,038,808
(1)
(1)
Excludes unamortized debt issuance costs and unamortized original issue
discount.
Fair values were based on quoted market prices and are classified within Level
1 of the fair value hierarchy.
Derivative Instruments and Hedging Activities
The Company is exposed to fluctuations in foreign currency exchange rates,
interest rates and commodity prices. The Company enters into derivative
instruments primarily to hedge portions of its forecasted foreign currency
denominated cash flows and designates these derivative instruments as cash
flow hedges in order to qualify for hedge accounting.
The Company formally documents its hedge relationships, including the
identification of the hedging instruments and the hedged items, as well as its
risk management objectives and strategies for undertaking the cash flow
hedges. The Company also formally assesses whether a cash flow hedge is highly
effective in offsetting changes in the cash flows of the hedged item.
Derivatives are recorded at fair value in other current assets, other assets,
accrued liabilities and other long-term liabilities. For a cash flow hedge,
the change in fair value of the derivative is recorded in accumulated other
comprehensive income (loss) ("AOCI") in the condensed consolidated balance
sheets, to the extent that the hedges are effective, and reclassified into
earnings when the underlying hedged transaction is realized. The realized
gains and losses are recorded on the same line as the hedged transaction in
the condensed consolidated statements of operations. Cash flows from
derivatives used to manage foreign
16
-------------------------------------------------------------------------------
NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS (Continued)
(Unaudited)
(Dollar amounts in thousands except per share and share amounts)
exchange risks designated as cash flow hedges are classified as operating
activities within the consolidated statements of cash flows.
The Company is exposed to credit risk in the event of nonperformance by its
counterparties on its derivative financial instruments. The Company mitigates
this credit risk exposure by entering into agreements directly with major
financial institutions with high credit standards that are expected to fully
satisfy their obligations under the contracts.
Cash Flow Hedges
Forward Foreign Exchange Contracts.
The Company uses forward contracts to mitigate the potential volatility to
earnings and cash flows arising from changes in currency exchange rates that
impact the Company's foreign currency transactions. The principal currencies
hedged by the Company include various European currencies, the Canadian
Dollar, and the Mexican Peso. As of June 30, 2024 and December 31, 2023, the
notional amount of these contracts was $
119,063
and $
207,131
, respectively, and consisted of hedges of cash flow transactions extending
out to December 2024.
Pretax amounts related to the Company's cash flow hedges that were recognized
in other comprehensive income (loss) ("OCI") were as follows:
(Loss) Gain Recognized in OCI
Three Months Ended June 30, Six Months Ended June 30,
2024 2023 2024 2023
Forward foreign exchange contracts $ ( $ 4,689 $ ( $ 10,242
5,906 1,698
) )
Pretax amounts related to the Company's cash flow hedges that were
reclassified from AOCI and recognized in cost of products sold were as follows:
Gain Reclassified from AOCI to Income
Three Months Ended June 30, Six Months Ended June 30,
2024 2023 2024 2023
Forward foreign exchange contracts $ 506 $ 5,245 $ 1,168 $ 8,579
17
-------------------------------------------------------------------------------
NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS (Continued)
(Unaudited)
(Dollar amounts in thousands except per share and share amounts)
8.
Pension and Postretirement Benefits Other Than Pensions
The components of net periodic benefit cost (income) for the Company's defined
benefit plans and other postretirement benefit plans were as follows:
Pension Benefits
Three Months Ended June 30,
2024 2023
U.S. Non-U.S. U.S. Non-U.S.
Service cost $ - $ 591 $ - $ 543
Interest cost 126 1,199 2,314 1,315
Expected return on plan assets - ( ( (
330 2,113 308
) ) )
Amortization of prior service cost and actuarial loss 36 53 778 6
Pension settlement charge 46,787 - - -
Net periodic benefit cost $ 46,949 $ 1,513 $ 979 $ 1,556
Pension Benefits
Six Months Ended June 30,
2024 2023
U.S. Non-U.S. U.S. Non-U.S.
Service cost $ - $ 1,189 $ - $ 1,078
Interest cost 1,945 2,411 4,628 2,610
Expected return on plan assets ( ( ( (
1,647 666 4,226 615
) ) ) )
Amortization of prior service cost and actuarial loss 591 106 1,556 12
Pension settlement charge 46,787 - - -
Net periodic benefit cost $ 47,676 $ 3,040 $ 1,958 $ 3,085
Other Postretirement Benefits
Three Months Ended June 30,
2024 2023
U.S. Non-U.S. U.S. Non-U.S.
Service cost $ 6 $ 44 $ 13 $ 37
Interest cost 142 191 205 198
Amortization of prior service credit and actuarial (gain) loss ( 3 ( (
730 609 21
) ) )
Net periodic benefit (income) cost $ ( $ 238 $ ( $ 214
582 391
) )
Other Postretirement Benefits
Six Months Ended June 30,
2024 2023
U.S. Non-U.S. U.S. Non-U.S.
Service cost $ 12 $ 89 $ 26 $ 75
Interest cost 284 385 410 395
Amortization of prior service credit and actuarial (gain) loss ( 7 ( (
1,460 1,218 42
) ) )
Net periodic benefit (income) cost $ ( $ 481 $ ( $ 428
1,164 782
) )
The service cost component of net periodic benefit cost (income) is included
in cost of products sold and selling, administrative and engineering expenses
in the condensed consolidated statements of operations. The pension settlement
charge is separately presented in the condensed consolidated statement of
operations. All other components of net periodic benefit cost (income) are
included in other expense, net in the condensed consolidated statements of
operations for all periods presented.
18
-------------------------------------------------------------------------------
NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS (Continued)
(Unaudited)
(Dollar amounts in thousands except per share and share amounts)
Pension Plan Termination
On October 11, 2022, the Company's Board of Directors approved a resolution to
merge certain of the Company's U.S. defined benefit pension plans and
terminate the resulting merged plan ("U.S. Pension Plan") effective December
31, 2022. In the fourth quarter of 2023, the Company completed the transfer of
all lump sum payments to eligible plan participants who elected such lump sums
or otherwise met the criteria for lump sum payments as part of the termination
process.
On April 3, 2024, the Company irrevocably transferred approximately $137,000
of remaining pension benefit obligations and associated plan assets related to
the U.S. Pension Plan to a highly rated insurance company, thereby reducing
the Company's pension obligations and assets by the same amount. As a result,
the Company recognized a one-time, non-cash pension settlement charge of $
46,787
($48,190 net of tax) for both the three and six months ended June 30, 2024,
primarily related to the accelerated recognition of accumulated actuarial
losses included within AOCI in the condensed consolidated balance sheets. This
transaction further de-risks the Company's retirement-related plans by
eliminating the potential for the Company to make future cash contributions to
fund the remaining pension benefit obligations being transferred to the
insurer. Beginning in June 2024, the insurance company began paying plan
benefits to eligible plan participants through a group annuity contract. The
termination of the U.S. Pension Plan is expected to be completed during the
year ended December 31, 2024.
9.
Other Expense, Net
The components of other expense, net were as follows:
Three Months Ended June 30, Six Months Ended June 30,
2024 2023 2024 2023
Foreign currency losses $ ( $ ( $ ( $ (
3,695 534 5,666 2,451
) ) ) )
Components of net periodic cost other than service cost ( ( ( (
690 1,765 1,956 3,510
) ) ) )
Factoring costs ( ( ( (
767 636 1,420 1,073
) ) ) )
Miscellaneous income 23 374 264 469
Other expense, net $ ( $ ( $ ( $ (
5,129 2,561 8,778 6,565
) ) ) )
10.
Income Taxes
The Company determines its effective tax rate each quarter based upon its
estimated annual effective tax rate. The Company records the tax impact of
certain unusual or infrequently occurring items, including changes in judgment
about valuation allowances and effects of changes in tax laws or rates, in the
interim period in which they occur. In addition, jurisdictions with a
projected loss for the year where no tax benefit can be recognized are
excluded from the estimated annual effective tax rate.
Income tax expense, loss before income taxes and the corresponding effective
tax rate for the three and six months ended June 30, 2024 and 2023 were as
follows:
Three Months Ended June 30, Six Months Ended June 30,
2024 2023 2024 2023
Income tax expense $ 8,080 $ 4,765 $ 12,211 $ 5,123
Loss before income taxes ( ( ( (
68,103 23,655 95,280 154,409
) ) ) )
Effective tax rate ( % ( % ( % ( %
12 20 13 3
) ) ) )
The effective tax rate for the three and six months ended June 30, 2024 varied
from the effective tax rate for the three and six months ended June 30, 2023
primarily due to the geographic mix of pre-tax income and losses, and the
inability to record a tax expense for pre-tax income and a benefit for pre-tax
losses in the U.S. and certain foreign jurisdictions due to valuation
allowances, adjustments to uncertain tax positions, and other permanent items.
The income tax rate for the three and six months ended June 30, 2024 and 2023
varied from the U.S. statutory rate primarily due to the inability to record a
tax expense for pre-tax income and a tax benefit for pre-tax losses in the
U.S. and certain foreign jurisdictions due to valuation allowances, tax
credits, the impact of income taxes on foreign earnings taxed at rates varying
from the U.S. statutory rate, adjustments to uncertain tax positions, and
other permanent items.
The Company's current and future provision for income taxes is impacted by
changes in valuation allowances in the U.S. and certain foreign jurisdictions.
The Company's future provision for income taxes will include no tax benefit
with respect
19
-------------------------------------------------------------------------------
NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS (Continued)
(Unaudited)
(Dollar amounts in thousands except per share and share amounts)
to losses incurred and, except for certain jurisdictions, no tax expense with
respect to income generated in these countries until the respective valuation
allowances are eliminated. Accordingly, income taxes are impacted by changes
in valuation allowances and the mix of earnings among jurisdictions. The
Company evaluates the realizability of its deferred tax assets on a quarterly
basis. In completing this evaluation, the Company considers all available
evidence in order to determine, based on the weight of the evidence, if a
valuation allowance for its deferred tax assets is necessary. Such evidence
includes historical results, future reversals of existing taxable temporary
differences and expectations for future taxable income (exclusive of the
reversal of temporary differences and carryforwards), as well as the
implementation of feasible and prudent tax planning strategies. If, based on
the weight of the evidence, it is more likely than not that all or a portion
of the Company's deferred tax assets will not be realized, a valuation
allowance is recorded. If operating results improve or decline on a continual
basis in a particular jurisdiction, the Company's decision regarding the need
for a valuation allowance could change, resulting in either the initial
recognition or reversal of a valuation allowance in that jurisdiction, which
could have a significant impact on income tax expense in the period recognized
and subsequent periods. In determining the provision for income taxes for
financial statement purposes, the Company makes certain estimates and
judgments, which affect its evaluation of the carrying value of its deferred
tax assets, as well as its calculation of certain tax liabilities.
The Company, or one of its subsidiaries, files income tax returns in the
United States and other foreign jurisdictions. During the examination of the
Company's 2015-2018 U.S. federal income tax filings, the IRS asserted that
income earned by a Netherlands subsidiary from its Mexican branch operations
should be categorized as foreign based company sales income under Section
954(d) of the Internal Revenue Code and should be recognized currently as
taxable income on the Company's 2015-2018 U.S. federal income tax filings. As
a result of this assertion, the IRS issued a Notice of Proposed Adjustment
("NOPA"). The Company believes the proposed adjustment is without merit and is
in the process of contesting the matter. Currently, the protest with the IRS
for the 2015-2018 tax years is with the IRS's administrative appeals office,
and the Company is having continuing discussion about the issue. The Company
believes, after consultation with tax and legal counsel, that it is more
likely than not that it will ultimately be successful in defending its
position. As such, the Company has not recorded any impact of the IRS's
proposed adjustment in its condensed consolidated financial statements as of
and for both the three and six months ended June 30, 2024. In the event the
Company is not successful in defending its position, the potential income tax
expense impact, including interest, related to tax years 2015 through June 30,
2024 is less than $10,000. The Company intends to vigorously contest the
conclusions reached in the NOPA through the IRS's administrative appeals
process, and, if necessary, through litigation.
On August 16, 2022, the U.S. enacted the Inflation Reduction Action of 2022,
which, among other things, implements a 15% minimum tax on financial statement
income of certain large corporations, a 1% excise tax on net stock repurchases
and several tax incentives to promote clean energy. The provisions were
effective in the first quarter of 2023 and did not have a significant impact
on the Company's condensed consolidated financial statements.
Numerous countries have agreed to a statement in support of the Organization
for Economic Co-operation and Development ("OECD") model rules that propose a
global minimum tax rate of 15%, and European Union member states have agreed
to implement the global minimum tax. Certain countries, including European
Union member states, have enacted or are expected to enact legislation to be
effective as early as 2024, with widespread implementation of a global minimum
tax expected by 2025. The Company has recorded the impact of the global
minimum tax as currently enacted in the condensed consolidated financial
statements as of June 30, 2024 and for the three and six months ended June 30,
2024. As further legislation becomes effective in countries in which the
Company does business, the Company's provision for income taxes could be
impacted. The Company will continue to monitor pending legislation and
implementation by individual countries and adjust its calculations accordingly.
11.
Net Loss Per Share Attributable to Cooper-Standard Holdings Inc.
Basic net loss per share attributable to Cooper-Standard Holdings Inc. was
computed by dividing net loss attributable to Cooper-Standard Holdings Inc. by
the weighted average number of shares of common stock outstanding during the
period. Diluted net loss per share attributable to Cooper-Standard Holdings
Inc. was computed using the treasury stock method by dividing diluted net loss
available to Cooper-Standard Holdings Inc. by the weighted average number of
shares of common stock outstanding, including the dilutive effect of common
stock equivalents, using the average share price during the period.
20
-------------------------------------------------------------------------------
NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS (Continued)
(Unaudited)
(Dollar amounts in thousands except per share and share amounts)
Information used to compute basic and diluted net loss per share attributable
to Cooper-Standard Holdings Inc. was as follows:
Three Months Ended June 30, Six Months Ended June 30,
2024 2023 2024 2023
Net loss available to Cooper-Standard $ ( $ ( $ ( $ (
Holdings Inc. common stockholders 76,243 27,829 107,903 158,196
) ) ) )
Basic weighted average shares 17,564,015 17,334,918 17,513,076 17,282,462
of common stock outstanding
Dilutive effect of - - - -
common stock equivalents
Diluted weighted average shares 17,564,015 17,334,918 17,513,076 17,282,462
of common stock outstanding
Basic net loss per share attributable $ ( $ ( $ ( $ (
to Cooper-Standard Holdings Inc. 4.34 1.61 6.16 9.15
) ) ) )
Diluted net loss per share attributable $ ( $ ( $ ( $ (
to Cooper-Standard Holdings Inc. 4.34 1.61 6.16 9.15
) ) ) )
Securities excluded from the calculation of diluted loss per share were
approximately
239,000
and
44,000
for the three months ended June 30, 2024 and 2023, respectively, and
232,000
and
42,000
for the six months ended June 30, 2024 and 2023, respectively, because the
inclusion of such securities in the calculation would have been anti-dilutive.
21
-------------------------------------------------------------------------------
NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS (Continued)
(Unaudited)
(Dollar amounts in thousands except per share and share amounts)
12.
Accumulated Other Comprehensive Loss
Changes in accumulated other comprehensive loss by component, net of related
tax, were as follows:
Three Months Ended June 30, Six Months Ended June 30,
2024 2023 2024 2023
Foreign currency translation adjustment
Balance at beginning $ ( $ ( $ ( $ (
of period 164,901 158,093 157,656 158,023
) ) ) )
Other comprehensive loss ( (1) ( (1) ( (1) ( (1)
before reclassifications 7,726 7,295 14,971 7,365
) ) ) )
Amounts reclassified from accumulated - - - -
other comprehensive loss
Balance at end $ ( $ ( $ ( $ (
of period 172,627 165,388 172,627 165,388
) ) ) )
Benefit plan liabilities
Balance at beginning $ ( $ ( $ ( $ (
of period 43,996 60,151 44,149 60,251
) ) ) )
Other comprehensive income (loss) before 3,972 ( 4,242 (
reclassifications (net of tax expense (benefit) of $ 16 74
23 ) )
, $(
94
), $
45
, and $(
29
), respectively)
Amounts reclassified from accumulated 47,107 (2) 158 (3) 46,990 (4) 316 (5)
other comprehensive income
Balance at end $ 7,083 $ ( $ 7,083 $ (
of period 60,009 60,009
) )
Fair value change of derivatives
Balance at beginning $ 3,681 $ 10,646 $ 140 $ 8,303
of period
Other comprehensive (loss) income before ( 3,270 ( 8,053
reclassifications (net of tax expense of $ 5,907 1,704
1 ) )
, $
1,419
, $
6
, and $
2,189
, respectively)
Amounts reclassified from accumulated ( ( ( (
other comprehensive loss (net of 506 3,844 1,168 6,284
no ) ) ) )
tax expense, $
1,401
,
no
tax expense, and $
2,295
, respectively)
Balance at end $ ( $ 10,072 $ ( $ 10,072
of period 2,732 2,732
) )
Accumulated other comprehensive $ ( $ ( $ ( $ (
loss, ending balance 168,276 215,325 168,276 215,325
) ) ) )
(1)
Includes other comprehensive (loss) income related to intra-entity foreign
currency balances that are of a long-term investment nature of $(
7,341
) and $
1,979
for the three months ended June 30, 2024 and 2023, respectively, and $(
15,784
) and $(
1,844
) for the six months ended June 30, 2024 and 2023, respectively.
(2)
Includes the effect of the amortization of actuarial gains of $(
252
) and amortization of prior service cost of $
3
, net of tax of $
1,403
, and the impact of a one-time, non-cash pension settlement charge of $46,342
reclassified to net earnings. See Note 8. "Pension and Postretirement Benefits
Other Than Pensions" for additional information.
(3)
Includes the effect of the amortization of actuarial losses of $
147
and amortization of prior service cost of $
6
, net of tax of $
5
.
(4)
Includes the effect of the amortization of actuarial gains of $(
764
) and amortization of prior service cost of $
7
, net of tax of $
1,405
, and the impact of a one-time, non-cash pension settlement charge of $46,342
reclassified to net earnings. See Note 8. "Pension and Postretirement Benefits
Other Than Pensions" for additional information.
(5)
Includes the effect of the amortization of actuarial losses of $
294
and amortization of prior service cost of $
12
, net of tax of $
10
.
22
-------------------------------------------------------------------------------
NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS (Continued)
(Unaudited)
(Dollar amounts in thousands except per share and share amounts)
13.
Common Stock
Share Repurchase Program
In June 2018, the Company's Board of Directors approved a common stock
repurchase program (the "2018 Program") authorizing the Company to repurchase,
in the aggregate, up to $
150,000
of its outstanding common stock. Under the 2018 Program, repurchases may be
made on the open market, through private transactions, accelerated share
repurchases, round lot or block transactions on the New York Stock Exchange or
otherwise, as determined by management and in accordance with prevailing
market conditions and federal securities laws and regulations. The Company
expects to fund any future repurchases from cash on hand and future cash flows
from operations. The Company is not obligated to acquire a particular amount
of securities, and the 2018 Program may be discontinued at any time at the
Company's discretion. The 2018 Program became effective in November 2018. As
of June 30, 2024, the Company had approximately $
98,720
of repurchase authorization remaining under the 2018 Program. The Company did
not make any repurchases under the 2018 Program during the six months ended
June 30, 2024 or 2023.
14.
Commitments and Contingencies
The Company is periodically involved in claims, litigation and various legal
matters that arise in the ordinary course of business. The Company accrues for
litigation exposure when it is probable that future costs will be incurred and
such costs can be reasonably estimated. Any resulting adjustments, which could
be material, are recorded in the period the adjustments are identified. As of
June 30, 2024, the Company does not believe that there is a reasonable
possibility that any material loss exceeding the amounts already recognized
for claims, litigation and various legal matters, if any, has been incurred.
However, the ultimate resolutions of these proceedings and matters are
inherently unpredictable. As such, the Company's financial condition, results
of operations or cash flows could be adversely affected in any particular
period by the unfavorable resolution of one or more of these proceedings or
matters.
In addition, the Company conducts and monitors environmental investigations
and remedial actions at certain locations. As of June 30, 2024 and December
31, 2023, the Company had approximately $
9,676
and $
11,354
, respectively, reserved in accrued liabilities and other liabilities in the
condensed consolidated balance sheets on an undiscounted basis. While the
Company's costs to defend and settle known claims arising under environmental
laws have not been material in the past and are not currently estimated to
have a material adverse effect on the Company's financial condition, such
costs may be material to the Company's financial statements in the future.
15.
Segment Reporting
The Company had historically managed its automotive business in four
reportable segments: North America, Europe, Asia Pacific and South America.
All other business activities were reported in Corporate, eliminations and
other. As disclosed in its 2023 Annual Report, effective January 1, 2024, the
Company changed its management reporting structure with the launch of global
product line-focused business segments. This resulted in the realignment of
the Company's reportable segments, which are based on how the CODM manages the
business, allocates resources, makes operating decisions, and evaluates
operating performance. Based on this change, the Company established two
reportable automotive segments: Sealing Systems and Fluid Handling Systems.
All other business activities are reported in Corporate, eliminations and
other. Additional information related to the composition of each reportable
segment is included below:
.
Sealing Systems:
The Sealing Systems segment is comprised of products that are designed and
manufactured to protect vehicle interiors from weather, dust and noise
intrusion for an improved driving experience. Its products also provide
aesthetic and functional class-A exterior surface treatment. As disclosed in
its 2023 Annual Report, the Company believes it is the largest global producer
of sealing systems.
.
Fluid Handling Systems:
The Fluid Handling Systems segment is comprised of products that help convey,
connect, control and communicate throughout fluid systems for superior
performance across diverse powertrains. The Company leverages its innovation
expertise and vertically integrated manufacturing process with strong global
standardization to support customers throughout the world.
The new structure is expected to optimize asset and resource allocation,
enhance operating efficiency and aid in accelerating growth. The segment
realignment had no impact on the Company's consolidated financial position,
results of operations, or cash flows. All segment information is reflective of
this new structure, and prior period information has been revised to conform
to the Company's current period presentation.
The Company uses segment adjusted EBITDA as the measure of earnings to assess
the performance of each segment and determine the resources to be allocated to
the segments. The results of each segment include certain allocations for
general,
23
-------------------------------------------------------------------------------
NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS (Continued)
(Unaudited)
(Dollar amounts in thousands except per share and share amounts)
administrative and other shared costs. Segment adjusted EBITDA may not be
comparable to similarly titled measures reported by other companies.
Certain financial information on the Company's reportable segments was as
follows:
Three Months Ended June 30,
2024 2023
External Sales Intersegment Sales Adjusted EBITDA External Sales Intersegment Sales Adjusted EBITDA
Sealing $ 364,946 $ 11,886 $ 35,035 $ 372,977 $ 14,981 $ 35,562
systems
Fluid handling 322,742 5,366 16,282 317,167 7,319 13,641
systems
Total for $ 687,688 $ 17,252 $ 51,317 $ 690,144 $ 22,300 $ 49,203
reportable segments
Six Months Ended June 30,
2024 2023
External Sales Intersegment Sales Adjusted EBITDA External Sales Intersegment Sales Adjusted EBITDA
Sealing $ 716,225 $ 23,795 $ 56,406 $ 721,957 $ 30,204 $ 47,278
systems
Fluid handling 628,257 10,196 27,264 617,765 12,442 17,844
systems
Total for $ 1,344,482 $ 33,991 $ 83,670 $ 1,339,722 $ 42,646 $ 65,122
reportable segments
Three Months Ended June 30, Six Months Ended June 30,
2024 2023 2024 2023
Total reportable segments adjusted EBITDA $ 51,317 $ 49,203 $ 83,670 $ 65,122
Restructuring charges ( ( ( (
17,781 8,499 18,914 10,878
) ) ) )
Impairment charges - ( - (
654 654
) )
Pension settlement charge ( - ( -
46,787 46,787
) )
Loss on refinancing and extinguishment of debt - - - (
81,885
)
Income tax expense ( ( ( (
8,080 4,765 12,211 5,123
) ) ) )
Interest expense, net of interest income ( ( ( (
28,635 34,034 57,916 64,254
) ) ) )
Depreciation and amortization ( ( ( (
25,873 27,816 52,336 55,798
) ) ) )
Corporate, eliminations and other ( ( ( (
(1) 404 1,264 3,409 4,726
) ) ) )
Net loss attributable to Cooper-Standard Holdings Inc. $ ( $ ( $ ( $ (
76,243 27,829 107,903 158,196
) ) ) )
(1)
Includes revenue and expenses from the ISG business, which is an operating
segment that does not meet the quantitative thresholds for determining
reportable segments, and corporate-related costs including deferred
compensation arrangements and advanced engineering spending.
June 30, 2024 December 31, 2023
Segment assets:
Sealing systems $ 832,569 $ 906,022
Fluid handling systems 705,262 735,465
Total segment assets $ 1,537,831 $ 1,641,487
Corporate, eliminations and other 229,119 230,812
Consolidated $ 1,766,950 $ 1,872,299
24
-------------------------------------------------------------------------------
Item 2. Management's Discussion and Analysis of Financial Condition and
Results of Operations
This management's discussion and analysis of financial condition and results
of operations is intended to assist in understanding and assessing the trends
and significant changes in our results of operations and financial condition.
Our historical results may not indicate, and should not be relied upon as an
indication of, our future performance. Our forward-looking statements reflect
our current views about future events, are based on assumptions and are
subject to known and unknown risks and uncertainties that could cause actual
results to differ materially from those contemplated by these statements. See
"Forward-Looking Statements" below for a discussion of risks associated with
reliance on forward-looking statements. Factors that may cause differences
between actual results and those contemplated by forward-looking statements
include, but are not limited to, those discussed below and in our Annual
Report on Form 10-K for the fiscal year ended December 31, 2023 filed with the
U.S. Securities and Exchange Commission ("2023 Annual Report"), including Item
1A. "Risk Factors." The following should be read in conjunction with our 2023
Annual Report and the other information included herein. Our discussion of
trends and conditions supplements and updates such discussion included in our
2023 Annual Report. References in this quarterly report on Form 10-Q (the
"Report") to "we," "our," or the "Company" refer to Cooper-Standard Holdings
Inc., together with its consolidated subsidiaries.
Executive Overview
Our Business
We design, manufacture and sell sealing and fluid handling systems (consisting
of fuel and brake delivery and fluid transfer systems) for use primarily in
passenger vehicles and light trucks manufactured by global automotive original
equipment manufacturers ("OEMs"). We are primarily a "Tier 1" supplier, with
approximately 84% of our sales in 2023 made directly to major OEMs.
Recent Trends and Conditions
General Economic Conditions and Outlook
The global automotive industry is susceptible to uncertain economic conditions
that could adversely impact new vehicle demand and production. Business
conditions may vary significantly from period to period or region to region.
In 2022, global automotive production was negatively impacted by broad supply
chain challenges, labor market disruptions and other lingering impacts of the
COVID-19 pandemic. In 2023, light vehicle production showed resilience and
strong growth, supported by sustained consumer demand and OEM efforts to
replenish depleted inventory levels. This resilience and growth was despite
continued uncertainty in the global economy created by continued inflation,
rising interest rates and increased geopolitical tension in key regions of the
world. In 2024, we expect production growth will moderate as inventory levels
ramp slowly higher, interest rates remain relatively high, and the
geopolitical tensions driving global economic uncertainty persist.
In North America, U.S. consumer confidence has increased from 2023 levels but
remains well below pre-pandemic historical averages. Slowing inflation and the
Federal Reserve Board's pause on policy rate actions have been key drivers of
improved consumer sentiment. Uncertainty regarding the upcoming elections and
the timing of potential interest rate cuts by the Federal Reserve have served
to soften consumer sentiment. Economists at the International Monetary Fund
(IMF) are expecting the economies of the United States, Canada and Mexico to
grow by 2.6 percent, 1.3 percent and 2.2 percent, respectively, in 2024.
In Europe, lower inflation and more stable energy costs are supporting
stronger household consumption. Momentum in the services sector and the
economy has slowly increased in the first half of the year. Uncertainty
related to ongoing geopolitical tension and the war in Ukraine continues,
however, and remain a constraining factor to overall economic activity. In the
current uncertain environment, economists at the IMF are expecting the economy
in the Eurozone region to grow by approximately 0.9 percent in 2024.
In the Asia Pacific region, China's post-COVID-19 economy has been burdened by
a protracted property crisis, weak consumer and business confidence, and
mounting local government debts. In the first half of 2024, however, China's
economy has been buoyed by a rebound in private consumption and strong
exports. As a result, economists at the IMF are expecting the Chinese economy
to grow at a more modest 5.0 percent in 2024.
In South America, the Brazilian economy has started the first half of the year
strong with an increase in the minimum wage and a continuing strong labor
market contributing to consumer demand. Despite these drivers, inflation has
stabilized slightly above target levels set by the Brazilian central bank. As
a result, economists at the IMF are now estimating the Brazilian economy will
grow 2.1 percent in 2024.
25
-------------------------------------------------------------------------------
Production Levels
Our business is directly affected by the automotive vehicle production rates
in North America, Europe, Asia Pacific and South America. These production
rates can be impacted periodically by changing macro and micro-economic
conditions, geopolitical actions, regional consumer sentiment, labor
disruptions and changing regulatory requirements, among other factors.
Light vehicle production by region for the three and six months ended June 30,
2024 and 2023 was as follows:
Three Months Ended June 30, Six Months Ended June 30,
(in millions of units) 2024 2023 % Change 2024 2023 % Change
(1) (1) (1) (1)
North America 4.2 4.1 1.7% 8.1 8.0 1.8%
Europe 4.4 4.7 (6.1)% 9.0 9.4 (3.5)%
Asia Pacific 12.3 12.1 1.4% 24.0 23.8 0.7%
Greater China 7.0 6.7 4.5% 13.3 12.7 5.1%
South America 0.7 0.8 (9.2)% 1.3 1.4 (8.0)%
(1)
Production data based on S&P Global, July 2024.
Despite improved production in 2023 and the first half of 2024, overall
vehicle inventory and expected production levels remain below pre-pandemic
historical averages, with the exception of higher inventories of battery
electric vehicles. Current industry forecasts suggest global light vehicle
production in 2024 will be slightly lower than full year 2023, followed by
modest growth in 2025 and 2026. Actual production volumes have varied and may
further vary from forecasted levels due to a number of factors including, but
not limited to, consumer demand, the regulatory environment, incentives
offered and industry competitiveness. The electric vehicle segment has been
particularly challenged with regard to production volumes meeting forecasted
levels.
Raw Materials
Our business is susceptible to inflationary pressures with respect to raw
materials. Abrupt changes in the market prices or availability of certain key
raw materials may result in operational and profitability challenges for the
Company and the industry as a whole. Since 2020, market prices for key raw
materials, such as steel, aluminum, and oil-derived commodities, experienced a
period of extreme volatility, which led to significant cost increases for our
business. In response, we worked with our customers to implement or expand
index-based commercial agreements that have enabled us to partially recover
incremental material costs incurred and significantly reduce our exposure and
risk related to commodity price fluctuations going forward. Global commodity
markets and pricing have stabilized to a large degree in 2024, and material
cost impacts on our results for the six months ended June 30, 2024 were
relatively small.
General Inflation and Recovery Strategy
We continue to experience inflationary cost pressures and diligently work to
address these costs both internally and with our customers. As such, we
continue to actively pursue pricing adjustments on current business and
consider the impact of inflationary and other costs in our quotes for new
business. The majority of our customers recognized these costs and customer
negotiations for inflation recovery and sustainable pricing were initiated in
2023.
26
-------------------------------------------------------------------------------
Results of Operations
Three Months Ended June 30, Six Months Ended June 30,
2024 2023 Change 2024 2023 Change
(dollar amounts in thousands)
Sales $ 708,362 $ 723,740 $ (15,378) $ 1,384,787 $ 1,406,198 $ (21,411)
Cost of 625,422 646,026 (20,604) 1,240,204 1,286,656 (46,452)
products sold
Gross profit 82,940 77,714 5,226 144,583 119,542 25,041
Selling, 52,408 54,605 (2,197) 107,774 106,694 1,080
administration
& engineering
expenses
Amortization 1,605 1,672 (67) 3,266 3,479 (213)
of intangibles
Restructuring 17,781 8,499 9,282 18,914 10,878 8,036
charges
Impairment charges - 654 (654) - 654 (654)
Operating 11,146 12,284 (1,138) 14,629 (2,163) 16,792
income (loss)
Interest (28,635) (34,034) 5,399 (57,916) (64,254) 6,338
expense, net
of interest income
Equity in earnings 1,302 656 646 3,572 458 3,114
of affiliates
Loss on - - - - (81,885) 81,885
refinancing and
extinguishment
of debt
Pension (46,787) - (46,787) (46,787) - (46,787)
settlement charge
Other expense, net (5,129) (2,561) (2,568) (8,778) (6,565) (2,213)
Loss before (68,103) (23,655) (44,448) (95,280) (154,409) 59,129
income taxes
Income tax expense 8,080 4,765 3,315 12,211 5,123 7,088
Net loss (76,183) (28,420) (47,763) (107,491) (159,532) 52,041
Net (income) loss (60) 591 (651) (412) 1,336 (1,748)
attributable
to noncontrolling
interests
Net loss $ (76,243) $ (27,829) $ (48,414) $ (107,903) $ (158,196) $ 50,293
attributable
to
Cooper-Standard
Holdings
Inc.
Three Months Ended June 30, 2024 Compared with Three Months Ended June 30, 2023
Sales
Three Months Ended June 30, Variance Due To:
2024 2023 Change Volume / Mix* Foreign Exchange Divestitures
(dollar amounts in thousands)
Total sales $ 708,362 $ 723,740 $ (15,378) $ 7,236 $ (7,988) $ (14,626)
* Net of customer price adjustments, including recoveries.
Sales for the three months ended June 30, 2024 decreased 2.1% compared to the
three months ended June 30, 2023. The decrease in sales was driven by the
divestitures of our European technical rubber products business and a joint
venture in the Asia Pacific region in the prior year, and the negative impact
of foreign exchange. The decrease was partially offset by favorable volume and
mix, net of customer price adjustments including recoveries.
27
-------------------------------------------------------------------------------
Gross Profit
Three Months Ended June 30, Variance Due To:
2024 2023 Change Volume / Mix* Foreign Exchange Cost
(Decreases)/Increases**
(dollar amounts in thousands)
Cost of $ 625,422 $ 646,026 $ (20,604) $ (2,198) $ 3,312 $ (21,718)
products sold
Gross profit 82,940 77,714 5,226 9,434 (11,300) 7,092
Gross profit 11.7 % 10.7 %
percentage of sales
* Net of customer price adjustments, including recoveries.
** Net of divestitures and restructuring savings.
Cost of products sold is primarily comprised of materials, labor,
manufacturing overhead, freight, depreciation and other direct operating
expenses. Materials comprise the largest component of our cost of products
sold and represented approxim
ately 51% and
52%
of
total cost of products sold for the three months ended June 30, 2024 and 2023,
respectively. The change in cost of products sold was impacted by favorable
volume and mix, manufacturing and purchasing savings through lean initiatives
and lower energy costs, partially offset by higher inflation of labor and
overhead, and unfavorable foreign exchange.
Gross profit for the three months ended June 30, 2024 increased $5.2 million
compared to the three months ended June 30, 2023. The change was driven by
favorable volume and mix, net of customer price adjustments including
recoveries, manufacturing and purchasing savings through lean initiatives and
lower energy costs, partially offset by higher inflation of labor and
overhead, and unfavorable foreign exchange.
Selling, Administration and Engineering Expenses.
Selling, administration and engineering expenses include administrative
expenses as well as product engineering and design and development costs.
Selling, administration and engineering expenses for the three months ended
June 30, 2024 were $52.4 million, or 7.4% of sales, compared to $54.6 million,
or 7.5% of sales, for the three months ended June 30, 2023. The decrease was
primarily due to lower compensation-related costs and foreign exchange.
Amortization of Intangibles.
Intangibles amortization for the three months ended June 30, 2024 was
relatively consistent compared to the three months ended June 30, 2023.
Restructuring Charges.
Restructuring charges for the three months ended June 30, 2024 increased $9.3
million compared to the three months ended June 30, 2023. The increase was
primarily driven by a cost optimization restructuring plan that was
implemented in the second quarter of 2024. See Note 3. "Restructuring" to the
unaudited condensed consolidated financial statements included in Part I, Item
1 of this Report for additional information.
Impairment Charges.
Non-cash impairment charges for the three months ended June 30, 2023 primarily
related to nonrecurring impairments of certain assets in Asia Pacific in the
prior year.
Interest Expense, Net.
Net interest expense for the three months ended June 30, 2024 decreased $5.4
million compared to the three months ended June 30, 2023, primarily due to a
decrease in payment-in-kind interest on our Third Lien Notes. We elected to
pay the third and fourth interest payments, due June 15, 2024 and December 15,
2024, respectively, in cash at the lower 5.625% Cash Pay interest rate as
opposed to accruing for interest at the higher 10.625% PIK rate.
Pension Settlement Charge.
A one-time, non-cash pension settlement charge of $46.8 million was incurred
in the three months ended June 30, 2024 related to the termination of the
aforementioned U.S. pension plan. See Note 8. "Pension and Postretirement
Benefits Other Than Pensions" to the unaudited condensed consolidated
financial statements included in Part I, Item 1 of this Report for additional
information.
Other Expense, Net.
Other expense, net, for the three months ended June 30, 2024 increased $2.6
million compared to the three months ended June 30, 2023, primarily due to the
unfavorable impact of foreign currency exchange, partially offset by a
decrease in periodic benefit cost other than service cost.
Income Tax Expense.
Income tax expense for the three months ended June 30, 2024 was $8.1 million
on losses before income taxes of $68.1 million compared to an income tax
expense of $4.8 million on losses before income taxes of $23.7 million for the
three months ended June 30, 2023. The effective tax rate for the three months
ended June 30, 2024 differed from the effective tax rate for the three months
ended June 30, 2023 primarily due to the geographic mix of pre-tax losses, the
28
-------------------------------------------------------------------------------
inability to record a tax benefit for pre-tax losses in the U.S. and certain
foreign jurisdictions due to valuation allowances, adjustments to uncertain
tax positions, and other permanent items.
Six Months Ended June 30, 2024 Compared with Six Months Ended June 30, 2023
Sales
Six Months Ended June 30, Variance Due To:
2024 2023 Change Volume / Mix* Foreign Exchange Divestitures
(dollar amounts in thousands)
Total sales $ 1,384,787 $ 1,406,198 $ (21,411) $ 15,138 $ (9,083) $ (27,466)
* Net of customer price adjustments, including recoveries.
Sales for the six months ended June 30, 2024 decreased 1.5%, compared to the
six months ended June 30, 2023. The decrease in sales was driven by the
divestitures of our European technical rubber products business and a joint
venture in the Asia Pacific region in the prior year, and the negative impact
of foreign exchange. The decrease was partially offset by favorable volume and
mix, net of customer price adjustments including recoveries.
Six Months Ended June 30, Variance Due To:
2024 2023 Change Volume / Mix* Foreign Exchange Cost
Increases/(Decreases)**
(dollar amounts in thousands)
Cost of $ 1,240,204 $ 1,286,656 $ (46,452) $ (8,876) $ 10,957 $ (48,533)
products sold
Gross profit 144,583 119,542 25,041 24,014 (20,040) 21,067
Gross profit 10.4 % 8.5 %
percentage of sales
* Net of customer price adjustments, including recoveries.
** Net of divestitures and restructuring savings.
The Company's material portion of cost of products sold was approximately 51%
and 52% of total cost of products sold for the six months ended June 30, 2024
and 2023, respectively. The change in cost of products sold was impacted by
favorable volume and mix, manufacturing and purchasing savings through lean
initiatives and lower energy costs, partially offset by higher inflation of
labor and overhead, and unfavorable foreign exchange.
Gross profit for the six months ended June 30, 2024 increased 20.9% compared
to the six months ended June 30, 2023. The change was driven by favorable
volume and mix, net of customer price adjustments including recoveries,
manufacturing and purchasing savings through lean initiatives and lower energy
costs, partially offset by higher inflation of labor and overhead, and
unfavorable foreign exchange.
Selling, Administration and Engineering Expenses.
Selling, administration and engineering expenses for the six months ended June
30, 2024 were $107.8 million, or 7.8% of sales, compared to $106.7 million, or
7.6% of sales for the six months ended June 30, 2023. The increase was
primarily due to higher compensation-related costs, partially offset by
foreign exchange.
Amortization of Intangibles.
Intangibles amortization for the six months ended June 30, 2024 was comparable
to the six months ended June 30, 2023.
Restructuring Charges.
Restructuring charges for the six months ended June 30, 2024 increased $8.0
million compared to the six months ended June 30, 2023. The increase was
primarily driven by a cost optimization restructuring plan that was
implemented in the second quarter of 2024. See Note 3. "Restructuring" to the
unaudited condensed consolidated financial statements included in Part I, Item
1 of this Report for additional information.
Impairment Charges.
Impairment charges for the six months ended June 30, 2023, primarily related
to nonrecurring impairments of certain assets in Asia Pacific in the prior
year.
Interest Expense, Net.
Net interest expense for the six months ended June 30, 2024 decreased $6.3
million compared to the six months ended June 30, 2023, primarily due to a
decrease in payment-in-kind interest on our Third Lien Notes. We elected to
pay the third and fourth interest payments, due June 15, 2024 and December 15,
2024, respectively, in cash at the lower 5.625% Cash Pay interest rate as
opposed to accruing for interest at the higher 10.625% PIK rate.
29
-------------------------------------------------------------------------------
Loss on Refinancing and Extinguishment of Debt.
Loss on refinancing and extinguishment of debt for the six months ended June
30, 2023 was $81.9 million which resulted from certain fees and the partial
write off of new and unamortized debt issuance costs and unamortized original
issue discount related to refinancing transactions that occurred in 2023.
Pension Settlement Charge.
A one-time, non-cash pension settlement charge of $46.8 million was incurred
in the six months ended June 30, 2024 related to the termination of the
aforementioned U.S. pension plan. See Note 8. "Pension and Postretirement
Benefits Other Than Pensions" to the unaudited condensed consolidated
financial statements included in Part I, Item 1 of this Report for additional
information.
Other Expense, Net.
Other expense, net for the six months ended June 30, 2024 increased $2.2
million compared to the six months ended June 30, 2023, primarily due to the
unfavorable impact of foreign currency exchange, partially offset by a
decrease in periodic benefit cost other than service cost.
Income Tax Expense.
Income tax expense for the six months ended June 30, 2024 was $12.2 million on
losses before income taxes of $95.3 million compared to income tax expense of
$5.1 million on losses before income taxes of $154.4 million for the six
months ended June 30, 2023. The effective tax rate for the six months ended
June 30, 2024 differed primarily from the effective tax rate for the six
months ended June 30, 2023 due to the geographic mix of pre-tax losses, the
inability to record a tax benefit for pre-tax losses in the U.S. and certain
foreign jurisdictions due to valuation allowances, adjustment to uncertain tax
positions, and other permanent items.
Segment Results of Operations
Effective January 1, 2024, the Company changed its management reporting
structure with the launch of global product line-focused business segments.
This resulted in the realignment of its reportable segments, which are
determined based on how the CODM manages the business, allocates resources,
makes operating decisions, and evaluates operating performance. As a result,
the Company established two reportable segments: Sealing Systems and Fluid
Handling Systems. All other business activities are reported in Corporate,
eliminations and other. The segment realignment had no impact on the Company's
consolidated financial position, results of operations, or cash flows. All
reportable segment information included in this Form 10-Q is reflective of
this new structure and prior period information has been revised to conform to
the Company's current period segment presentation.
The Company uses segment adjusted EBITDA as the measure of earnings to assess
the performance of each segment and determine the resources to be allocated to
the segments. We have defined adjusted EBITDA as net income before interest,
taxes, depreciation, amortization, restructuring expense, and special items.
The following tables present sales and segment adjusted EBITDA for each of the
reportable segments.
Three Months Ended June 30, 2024 Compared with Three Months Ended June 30, 2023
Sales
Three Months Ended June 30, Variance Due To:
2024 2023 Change Volume/ Mix Foreign Exchange
(dollar amounts in thousands)
Sales to external customers
Sealing systems $ 364,946 $ 372,977 $ (8,031) $ (2,485) $ (5,546)
Fluid handling systems 322,742 317,167 5,575 8,017 (2,442)
Total for reportable segments $ 687,688 $ 690,144 $ (2,456) $ 5,532 $ (7,988)
Sealing systems.
The variance due to volume and mix, including customer price adjustments, was
driven by lower customer volumes and lower customer recoveries. The
unfavorable foreign currency exchange impact was driven by a $1.8 million
impact of the Chinese Renminbi, $1.4 million impact of the Euro, $1.3 million
impact of the Brazilian Real, and $1.0 million unfavorable impact of all other
currencies.
Fluid handling systems.
The variance due to volume and mix, including customer price adjustments, was
driven by improved customer recoveries, partially offset by lower customer
volumes. The unfavorable foreign currency exchange impact was primarily driven
by the Korean Won and Chinese Renminbi.
30
-------------------------------------------------------------------------------
Segment adjusted EBITDA
Three Months Ended June 30, Variance Due To:
2024 2023 Change Volume/ Mix Foreign Exchange Cost
Decreases/(Increases)*
(dollar amounts in thousands)
Segment adjusted EBITDA
Sealing $ 35,035 $ 35,562 $ (527) $ (3,004) $ (4,995) $ 7,472
systems
Fluid handling 16,282 13,641 2,641 10,858 (9,761) 1,544
systems
Total for $ 51,317 $ 49,203 $ 2,114 $ 7,854 $ (14,756) $ 9,016
reportable segments
* Net of divestitures and restructuring savings.
Sealing systems.
The variance due to volume and mix, including customer price adjustments, was
driven by lower customer recoveries and lower customer volumes. The
unfavorable foreign currency exchange impact was driven by a $2.1 million
impact of the Brazilian Real, $0.9 million impact of the Mexican Peso, $0.6
million impact of the Chinese Renminbi, and $1.4 million unfavorable impact of
all other currencies. The cost decreases were primarily driven by $12.5
million of favorable manufacturing and purchasing savings through lean
initiatives, partially offset by $4.1 million of general inflation costs
(including salary, transportation, and other costs), and $0.9 million of all
other operational costs.
Fluid handling systems.
The variance due to volume and mix, including customer price adjustments, was
driven by improved customer recoveries and higher customer volumes. The
unfavorable foreign currency exchange impact was driven by a $6.7 million
impact of the Mexican Peso, $1.4 million impact of the Costa Rican Colon, $1.0
million impact of the Brazilian Real, and $0.7 million unfavorable impact of
all other currencies. The cost decreases were primarily driven by $6.1 million
of favorable manufacturing and purchasing savings through lean initiatives,
and $0.6 million of all other operational costs, partially offset by $5.2
million of general inflation costs (including salary, transportation, and
other costs).
Six Months Ended June 30, 2024 Compared with Six Months Ended June 30, 2023
Sales
Six Months Ended June 30, Variance Due To:
2024 2023 Change Volume/ Mix Foreign Exchange
(dollar amounts in thousands)
Sales to external customers
Sealing systems $ 716,225 $ 721,957 $ (5,732) $ (52) $ (5,680)
Fluid handling systems 628,257 617,765 10,492 13,895 (3,403)
Total for reportable segments $ 1,344,482 $ 1,339,722 $ 4,760 $ 13,843 $ (9,083)
Sealing systems.
The variance due to volume and mix, including customer price adjustments, was
driven by lower customer recoveries, partially offset by higher customer
volumes. The unfavorable foreign currency exchange impact was driven by a $4.1
million impact of the Chinese Renminbi and $1.6 million unfavorable impact of
all other currencies.
Fluid handling systems.
The variance due to volume and mix, including customer price adjustments, was
driven by improved customer recoveries, partially offset by lower customer
volumes. The unfavorable foreign currency exchange impact was driven by a $1.7
million impact of the Korean Won, $1.6 million impact of the Chinese Renminbi,
and $0.1 million unfavorable impact of all other currencies.
31
-------------------------------------------------------------------------------
Segment adjusted EBITDA
Six Months Ended June 30, Variance Due To:
2024 2023 Change Volume/ Mix Foreign Exchange Cost (Increases)/
Decreases*
(dollar amounts in thousands)
Segment adjusted EBITDA
Sealing $ 56,406 $ 47,278 $ 9,128 $ 1,504 $ (7,860) $ 15,484
systems
Fluid handling 27,264 17,844 9,420 20,590 (16,175) 5,005
systems
Total for $ 83,670 $ 65,122 $ 18,548 $ 22,094 $ (24,035) $ 20,489
reportable segments
* Net of divestitures and restructuring savings.
Sealing systems.
The variance due to volume and mix, including customer price adjustments, was
driven by higher customer volumes, partially offset by lower customer
recoveries. The unfavorable foreign currency exchange impact was driven by a
$3.0 million impact of the Brazilian Real, $2.5 million impact of the Mexican
Peso, $1.6 million impact of the Polish Zloty, and $0.8 million unfavorable
impact of all other currencies. The cost decreases were primarily driven by
$24.2 million of favorable manufacturing and purchasing savings through lean
initiatives, partially offset by $6.9 million of general inflation costs
(including salary, transportation, and other costs), and $1.8 million of all
other operational costs.
Fluid handling systems.
The variance due to volume and mix, including customer price adjustments, was
driven by improved customer recoveries, partially offset by lower customer
volumes. The unfavorable foreign currency exchange impact was driven by a
$11.5 million impact of the Mexican Peso, $3.1 million impact of the Costa
Rican Colon, $1.2 million impact of the Brazilian Real and $0.4 million
unfavorable impact of all other currencies. The cost decreases were primarily
driven by $14.7 million of favorable manufacturing and purchasing savings
through lean initiatives, partially offset by $9.5 million of general
inflation costs (including salary, transportation, and other costs), and $0.2
million of all other operational costs.
Liquidity and Capital Resources
Short and Long-Term Liquidity Considerations and Risks
The sources to fund our ongoing working capital, capital expenditures, debt
service and other funding requirements are a combination of cash flows from
operations, cash on hand, borrowings under our senior asset-based revolving
credit facility ("ABL Facility") and receivables factoring. We utilize
intercompany loans and equity contributions to fund our worldwide operations.
There may be country-specific regulations which may restrict or result in
increased costs in the repatriation of these funds. See Note 6. "Debt and
Other Financing" to the unaudited condensed consolidated financial statements
included in Part I, Item 1 of this Report for additional information.
We continue to actively preserve cash and enhance liquidity, including
proactively managing our capital expenditures. We continuously monitor and
forecast our liquidity situation in light of automotive industry, customer and
economic factors, and take the necessary actions to preserve our liquidity and
evaluate other financial alternatives that may be available to us should the
need arise. Our ability to fund our working capital needs, debt payments and
other obligations, and to comply with the financial covenants, including
borrowing base limitations under our ABL Facility, depend on our future
operating performance and cash flows and many factors outside of our control,
including industry production levels, the costs of raw materials, the state of
the overall automotive industry and financial and economic conditions,
including work stoppages and the continued impact of public health events, and
other factors. Based on those actions and current projections of light vehicle
production and customer demand for our products, we believe that our cash
flows from operations, cash on hand, availability under our ABL Facility and
receivables factoring will enable us to meet our ongoing working capital
requirements, capital expenditures, debt service and other funding
requirements for the foreseeable future, despite the challenges facing the
industry
.
Cash Flows
Operating Activities.
Net cash used in operations was $26.2 million for the six months ended June
30, 2024, compared to net cash provided by operations of $17.2 million for the
six months ended June 30, 2023. The net change was primarily due to changes in
net working capital balances, partially offset by higher cash earnings.
Investing Activities.
Net cash used in investing activities was $27.8 million for the six months
ended June 30, 2024, compared to net cash used in investing activities of
$45.1 million for the six months ended June 30, 2023. The net change was
primarily due to lower capital expenditures. We expect to continue initiatives
to reduce overall capital spending and anticipate that we will spend
approximately $50.0 to $60.0 million on capital expenditures in 2024.
32
-------------------------------------------------------------------------------
Financing Activities.
Net cash used in financing activities totaled $3.5 million for the six months
ended June 30, 2024, compared to net cash used in financing activities of
$79.0 million for the six months ended June 30, 2023. The net change was
primarily due to the impact of refinancing transactions that occurred in 2023.
Share Repurchase Program
In June 2018, our Board of Directors approved a common stock repurchase
program (the "2018 Program") authorizing us to repurchase, in the aggregate,
up to $150.0 million of our outstanding common stock. Under the 2018 Program,
repurchases may be made on the open market, through private transactions,
accelerated share repurchases, round lot or block transactions on the New York
Stock Exchange or otherwise, as determined by us and in accordance with
prevailing market conditions and federal securities laws and regulations. We
expect to fund any future repurchases from cash on hand and future cash flows
from operations. The specific timing and amount of any future repurchase will
vary based on market and business conditions, changes in tax laws and other
factors. We are not obligated to acquire a particular amount of securities,
and the 2018 Program may be discontinued at any time at our discretion. The
2018 Program became effective in November 2018. As of June 30, 2024, we had
approximately $98.7 million of repurchase authorization remaining under the
2018 Program. We did not make any repurchases under the 2018 Program during
the six months ended June 30, 2024 or 2023.
Other Matters
We may, from time to time, seek to purchase our outstanding debt securities or
loans, including the First Lien Notes, Third Lien Notes and 2026 Senior Notes.
Such transactions could be privately negotiated or open market transactions,
pursuant to tender offers or otherwise. Any such purchases will be made in our
sole discretion in light of market conditions, applicable limitations
contained in the agreements governing our indebtedness and other relevant
factors. The amounts involved in any such purchase transactions, individually
or in the aggregate, may be material. Any such purchases may equate to a
substantial amount of a particular class or series of debt, which may reduce
the trading liquidity of such class or series.
In the third quarter of 2023, we designated Liveline Technologies, Inc.
("Liveline") an unrestricted subsidiary under the terms of certain of its debt
agreements, but Liveline remains a wholly-owned subsidiary of Cooper-Standard
Automotive Inc. Liveline incurred a net loss of $0.7 million and $0.4 million
during the three months and six months ended June 30, 2024, respectively. As
of June 30, 2024, Liveline had less than $0.1 million of gross assets, and
will rely on Cooper Standard for necessary funding until it is able to sustain
itself through sales of its products and services.
Non-GAAP Financial Measures
In evaluating our business, management considers EBITDA and Adjusted EBITDA to
be key indicators of our operating performance. Our management also uses
EBITDA and Adjusted EBITDA:
.
because similar measures are utilized in the calculation of the financial
covenants and ratios contained in our financing arrangements;
.
in developing our internal budgets and forecasts;
.
as a significant factor in evaluating our management for compensation purposes;
.
in evaluating potential acquisitions;
.
in comparing our current operating results with corresponding historical
periods and with the operational performance of other companies in our
industry; and
.
in presentations to the members of our board of directors to enable our board
of directors to have the same measurement basis of operating performance as is
used by management in their assessments of performance and in forecasting and
budgeting for our company.
In addition, we believe EBITDA and Adjusted EBITDA and similar measures are
widely used by investors, securities analysts and other interested parties in
evaluating our performance. We define Adjusted EBITDA as net income (loss)
plus income tax expense (benefit), interest expense, net of interest income,
depreciation and amortization or EBITDA, as adjusted for items that management
does not consider to be reflective of our core operating performance. These
adjustments include, but are not limited to, restructuring costs, certain
impairment charges, non-cash fair value adjustments and acquisition-related
costs.
EBITDA and Adjusted EBITDA are not financial measurements recognized under
U.S. GAAP, and when analyzing our operating performance, investors should use
EBITDA and Adjusted EBITDA as a supplement to, and not as alternatives for,
net income (loss), operating income, or any other performance measure derived
in accordance with U.S. GAAP, nor as an alternative to cash flow from
operating activities as a measure of our liquidity. EBITDA and Adjusted EBITDA
have
33
-------------------------------------------------------------------------------
limitations as analytical tools, and they should not be considered in
isolation or as substitutes for analysis of our results of operations as
reported under U.S. GAAP. These limitations include the following:
.
they do not reflect our cash expenditures or future requirements for capital
expenditure or contractual commitments;
.
they do not reflect changes in, or cash requirements for, our working capital
needs;
.
they do not reflect interest expense or cash requirements necessary to service
interest or principal payments under our ABL Facility, First Lien Notes, Third
Lien Notes, and 2026 Senior Notes;
.
they do not reflect certain tax payments that may represent a reduction in
cash available to us;
.
although depreciation and amortization are non-cash charges, the assets being
depreciated or amortized may have to be replaced in the future, and EBITDA and
Adjusted EBITDA do not reflect cash requirements for such replacements; and
.
other companies, including companies in our industry, may calculate these
measures differently and, as the number of differences in the way companies
calculate these measures increases, the degree of their usefulness as a
comparative measure correspondingly decreases.
In addition, in evaluating Adjusted EBITDA, it should be noted that in the
future, we may incur expenses similar to the adjustments in the below
presentation. Our presentation of Adjusted EBITDA should not be construed as
an inference that our future results will be unaffected by special items.
The following table provides a reconciliation of EBITDA and Adjusted EBITDA
from net loss, which is the most comparable financial measure in accordance
with U.S. GAAP:
Three Months Ended June 30, Six Months Ended June 30,
2024 2023 2024 2023
(dollar amounts in thousands)
Net loss attributable to Cooper-Standard Holdings Inc. $ (76,243) $ (27,829) $ (107,903) $ (158,196)
Income tax expense 8,080 4,765 12,211 5,123
Interest expense, net of interest income 28,635 34,034 57,916 64,254
Depreciation and amortization 25,873 27,816 52,336 55,798
EBITDA $ (13,655) $ 38,786 $ 14,560 $ (33,021)
Restructuring charges 17,781 8,499 18,914 10,878
Impairment charges - 654 - 654
(1)
Loss on refinancing and extinguishment of debt - - - 81,885
(2)
Pension settlement charge 46,787 - 46,787 -
(3)
Adjusted EBITDA $ 50,913 $ 47,939 $ 80,261 $ 60,396
(1)
Non-cash impairment charges in 2023 related to certain assets in Asia Pacific.
(2)
Loss on refinancing and extinguishment of debt relating to refinancing
transactions in 2023.
(3)
One-time, non-cash pension settlement charge and administrative fees incurred
related to the termination of our U.S. Pension Plan.
34
-------------------------------------------------------------------------------
Contingencies and Environmental Matters
The information concerning contingencies, including environmental
contingencies and the amount currently held in reserve for environmental
matters, contained in Note 14. "Commitments and Contingencies" to the
unaudited condensed consolidated financial statements included in Part I, Item
1 of this Report, is incorporated herein by reference.
Critical Accounting Estimates
There have been no significant changes in our critical accounting estimates
during the six months ended June 30, 2024.
Forward-Looking Statements
This quarterly report on Form 10-Q includes "forward-looking statements"
within the meaning of U.S. federal securities laws, and we intend that such
forward-looking statements be subject to the safe harbor created thereby. Our
use of words "estimate," "expect," "anticipate," "project," "plan," "intend,"
"believe," "outlook," "guidance," "forecast," or future or conditional verbs,
such as "will," "should," "could," "would," or "may," and variations of such
words or similar expressions are intended to identify forward-looking
statements. All forward-looking statements are based upon our current
expectations and various assumptions. Our expectations, beliefs, and
projections are expressed in good faith and we believe there is a reasonable
basis for them. However, we cannot assure you that these expectations, beliefs
and projections will be achieved. Forward-looking statements are not
guarantees of future performance and are subject to significant risks and
uncertainties that may cause actual results or achievements to be materially
different from the future results or achievements expressed or implied by the
forward-looking statements. Among other items, such factors may include:
volatility or decline of the Company's stock price, or absence of stock price
appreciation; impacts and disruptions related to the wars in Ukraine and the
Middle East; our ability to achieve commercial recoveries and to offset the
adverse impact of higher commodity and other costs through pricing and other
negotiations with our customers; work stoppages or other labor disruptions
with our employees or our customers' employees; prolonged or material
contractions in automotive sales and production volumes; our inability to
realize sales represented by awarded business; escalating pricing pressures;
loss of large customers or significant platforms; our ability to successfully
compete in the automotive parts industry; availability and increasing
volatility in costs of manufactured components and raw materials; disruption
in our supply base; competitive threats and commercial risks associated with
our diversification strategy; possible variability of our working capital
requirements; risks associated with our international operations, including
changes in laws, regulations, and policies governing the terms of foreign
trade such as increased trade restrictions and tariffs; foreign currency
exchange rate fluctuations; our ability to control the operations of our joint
ventures for our sole benefit; our substantial amount of indebtedness and
variable rates of interest; our ability to obtain adequate financing sources
in the future; operating and financial restrictions imposed on us under our
debt instruments; the underfunding of our pension plans; significant changes
in discount rates and the actual return on pension assets; effectiveness of
continuous improvement programs and other cost savings plans; significant
costs related to manufacturing facility closings or consolidation; our ability
to execute new program launches; our ability to meet customers' needs for new
and improved products; the possibility that our acquisitions and divestitures
may not be successful; product liability, warranty and recall claims brought
against us; laws and regulations, including environmental, health and safety
laws and regulations; legal and regulatory proceedings, claims or
investigations against us; the potential impact of any future public health
events on our financial condition and results of operations; the ability of
our intellectual property to withstand legal challenges; cyber-attacks, data
privacy concerns, other disruptions in, or the inability to implement upgrades
to, our information technology systems; the possible volatility of our annual
effective tax rate; the possibility of a failure to maintain effective
controls and procedures; the possibility of future impairment charges to our
goodwill and long-lived assets; our ability to identify, attract, develop and
retain a skilled, engaged and diverse workforce; our ability to procure
insurance at reasonable rates; and our dependence on our subsidiaries for cash
to satisfy our obligations.
You should not place undue reliance on these forward-looking statements. Our
forward-looking statements speak only as of the date of this quarterly report
on Form 10-Q, and we undertake no obligation to publicly update or otherwise
revise any forward-looking statement, whether as a result of new information,
future events or otherwise, except where we are expressly required to do so by
law.
This quarterly report on Form 10-Q also contains estimates and other
information that is based on industry publications, surveys, and forecasts.
This information involves a number of assumptions and limitations, and we have
not independently verified the accuracy or completeness of the information.
Item 3. Quantitative and Qualitative Disclosures About Market Risk
There have been no material changes to the quantitative and qualitative
information about the Company's market risk from those previously disclosed in
the Company's 2023 Annual Report.
35
-------------------------------------------------------------------------------
Item 4. Controls and Procedures
Evaluation of Disclosure Controls and Procedures
The Company has evaluated, under the supervision and with the participation of
the Company's management, including the Company's Chief Executive Officer and
Chief Financial Officer, the effectiveness of the Company's disclosure
controls and procedures (as defined in Rules 13a-15(e) and 15d-15(e) under the
Securities Exchange Act of 1934, as amended) as of the end of the period
covered by this Report. Because of the inherent limitations in all control
systems, no evaluation of controls can provide absolute assurance that all
control issues and instances of fraud, if any, within the Company have been
detected. Based on that evaluation, the Company's Chief Executive Officer
along with the Chief Financial Officer have concluded that the Company's
disclosure controls and procedures were effective at a reasonable assurance
level as of the end of the period covered by this Report.
Changes in Internal Control over Financial Reporting
There have been no changes in the Company's internal control over financial
reporting during the quarter ended June 30, 2024 that have materially
affected, or are reasonably likely to affect, the Company's internal control
over financial reporting.
36
-------------------------------------------------------------------------------
PART II - OTHER INFORMATION
Item 2. Unregistered Sales of Equity Securities and Use of Proceeds
(c) Purchases of Equity Securities By the Issuer and Affiliated Purchasers
The Company is authorized to purchase, in the aggregate, up to $150.0 million
of our outstanding common stock under our common stock repurchase program,
which was effective in November 2018. As of June 30, 2024, we had
approximately $98.7 million of repurchase authorization remaining under our
common stock share repurchase program as discussed in Part I, Item 2,
"Management's Discussion and Analysis of Financial Condition and Results of
Operations - Liquidity and Capital Resources - Share Repurchase Program," and
Note 13. "Common Stock" to the unaudited condensed consolidated financial
statements included in Part I, Item 1 of this Report.
A summary of our shares of common stock repurchased during the three months
ended June 30, 2024 is shown below:
Period Total Number of Average Price Total Number of Shares Approximate Dollar Value
Shares Purchased Paid per Share Purchased as Part of Shares that May Yet
(1) of Publicly Announced be Purchased Under the
Plans or Programs Program (in millions)
April 1, - $ - - $ 98.7
2024 through
April 30, 2024
May 1, 2024 through 1,514 14.55 - 98.7
May 31, 2024
June 1, 2024 through - - - 98.7
June 30, 2024
Total 1,514 -
(1)
Represents shares repurchased by the Company to satisfy employee tax
withholding requirements due upon the vesting of restricted stock awards.
37
-------------------------------------------------------------------------------
Item 5.
Other Information
Rule 10b5-1 Trading Arrangements
During the three months ended June 30, 2024,
none
of the Company's directors or officers (as defined in Rule 16a-1(f) of the
Securities Exchange Act of 1934, as amended), adopted, terminated or modified
a Rule 10b5-1 trading arrangement or non-Rule 10b5-1 trading arrangement (as
such terms are defined in Item 408 of Regulation S-K of the Securities Act of
1933, as amended).
38
-------------------------------------------------------------------------------
Item 6. Exhibits
Exhibit No. Description of Exhibit
10.1* Amendment No. 4 dated May 6, 2024, to the Third Amended and
Restated Loan Agreement by and among Cooper-Standard Automotive
Inc. and Cooper-Standard Automotive Canada Limited, together
as Borrowers, CS Intermediate HoldCo 1 LLC, certain
financial
institu
tions, as
L
enders,
and
Bank of America, N.A., as agent to the Lenders.
31.1* Certification of Principal Executive
Officer Pursuant to Exchange Act
Rule 13a-14(a)/15d-14(a) (Section 302
of the Sarbanes-Oxley Act of 2002).
31.2* Certification of Principal Financial
Officer Pursuant to Exchange Act
Rule 13a-14(a)/15d-14(a) (Section 302
of the Sarbanes-Oxley Act of 2002).
32** Certification Pursuant to 18
U.S.C. Section 1350, As Adopted
Pursuant to Section 906 of the
Sarbanes-Oxley Act of 2002.
101.INS*** Inline XBRL Instance Document - the instance
document does not appear in the Interactive
Data File because its XBRL tags are
embedded within the Inline XBRL document
101.SCH*** Inline XBRL Taxonomy Extension Schema
Document With Embedded Linkbase Documents
104*** Cover Page Interactive Data File, formatted in Inline XBRL
* Filed with this Report.
** Furnished with this Report.
*** Submitted electronically with this Report in accordance with the provisions of Regulation S-T.
Management contract or compensatory plan or arrangement.
39
-------------------------------------------------------------------------------
SIGNATURES
Pursuant to the requirements of the Securities Exchange Act of 1934, the
registrant has duly caused this report to be signed on its behalf by the
undersigned thereunto duly authorized.
COOPER-STANDARD HOLDINGS INC.
August 2, 2024 /S/ JONATHAN P. BANAS
Date Jonathan P. Banas
Executive Vice President and Chief Financial Officer
(Principal Financial Officer and Duly Authorized Officer)
40
EXHIBIT 10.1
EXECUTION VERSION
AMENDMENT NO. 4 TO
THIRD AMENDED AND RESTATED LOAN AGREEMENT
This
AMENDMENT NO. 4 TO THIRD AMENDED AND RESTATED LOAN AGREEMENT
(this "
Agreement
") is entered into as of May 6, 2024, by and among
CS INTERMEDIATE HOLDCO 1 LLC
, a Delaware limited liability company ("
Holdings
"),
COOPER-STANDARD AUTOMOTIVE INC
.
, an Ohio corporation (the "
U.S. Borrower
"),
COOPER-STANDARD AUTOMOTIVE CANADA LIMITED
, an Ontario corporation (the "
Canadian Borrower
" and, together with the U.S. Borrower, the "
Borrowers
"), the other Loan Parties party hereto,
BANK OF AMERICA, N.A.
, individually and as agent ("
Agent
"), and the Lenders signatory hereto.
RECITALS
A. Holdings, the Borrowers, the other Loan Parties party thereto, Agent and
the Lenders are party to that certain Third Amended and Restated Loan
Agreement dated as of November 2, 2016, as amended by Amendment No. 1 to Third
Amended and Restated Loan Agreement and Limited Waiver dated as of March 24,
2020, Amendment No. 2 to Third Amended and Restated Loan Agreement dated as of
May 18, 2020, and Amendment No. 3 to Third Amended and Restated Loan Agreement
dated as of December 19, 2022 (as in effect immediately prior to this
Agreement, the "
Existing Loan Agreement
", and as amended by this Agreement and as further amended, restated, amended
and restated, supplemented or otherwise modified from time to time, the "
Loan Agreement
"), pursuant to which the Lenders make certain revolving loans and other
financial accommodations to the Borrowers. Unless otherwise specified herein,
capitalized terms used in this Agreement shall have the meanings ascribed to
them by the Loan Agreement.
B. Holdings, the Borrowers, the other Loan Parties, Agent and the
undersigned Lenders wish to amend the Existing Loan Agreement on the terms and
conditions set forth below pursuant to
Section 14.1.1
of the Existing Loan Agreement, to among other things, extend the maturity
date thereof with respect to certain Lenders to be five years from the date
hereof.
Now, therefore, in consideration of the mutual execution hereof and other good
and valuable consideration, the parties hereto agree as follows:
1.
Amendments
Upon the Fourth Amendment Effective Date (as defined below), the Existing Loan
Agreement is hereby amended (a) to delete the stricken text (indicated
textually in substantially the same manner as the following example:
stricken text
) and to add the double-underlined text (indicated textually in substantially
the same manner as the following example:
double-underlined text
) as set forth in the Loan Agreement attached as
Annex A
hereto and (b) to amend and restate
Schedule 1.1(a)
in its entirety as set forth as
Annex B
attached hereto (which such amended
Schedule 1.1(a)
shall set forth the Commitments of each Lender immediately after giving effect
to this Agreement, including the Fourth Amendment Assignments (as defined
below)).
-------------------------------------------------------------------------------
2.
Fourth Amendment Effective Date
. The amendments set forth in
Section 1
of this Agreement shall become effective upon satisfaction of the following
conditions (the "
Fourth Amendment Effective Date
"):
(a) the execution and delivery of this Amendment by the undersigned Loan
Parties, Agent and each Lender as of the date hereof;
(b) Agent shall have received a certificate of a duly authorized officer of
or other person authorized to represent each applicable Loan Party, certifying
(i) except as attached thereto, there have been no changes to the Organization
Documents of each applicable Loan Party previously delivered to Agent, and
such Organization Documents are in full force and effect, without amendment
except as shown; (ii) that an attached copy of resolutions authorizing
execution and delivery of the Loan Documents to which such Loan Party is a
party is true and complete, and that such resolutions are in full force and
effect, were duly adopted, have not been amended, modified or revoked, and
constitute all resolutions adopted with respect to this credit facility; (iii)
all governmental and other third party approvals and consents, if any, with
respect to this Agreement have been obtained and are in effect; and (iv) to
the title, name and signature of each Person authorized to sign the Loan
Documents to which such Loan Party is a party. Agent may conclusively rely on
this certificate until it is otherwise notified by the applicable Loan Party
in writing;
(c) Agent shall have received a certificate, in form and substance
reasonably satisfactory to it, from a Responsible Officer of each Borrower
certifying that, after giving effect to this Amendment and the transactions
hereunder, (i) the Canadian Borrower and its consolidated Restricted
Subsidiaries, taken as a whole, and the U.S. Borrower and its consolidated
Restricted Subsidiaries, taken as a whole, are Solvent; (ii) no Default or
Event of Default exists; and (iii) the representations and warranties set
forth in
Section 9
of the Loan Agreement are true and correct in all material respects as of the
Fourth Amendment Effective Date (or, with respect to representations and
warranties qualified by materiality, in all respects) (except for
representations and warranties that expressly relate to an earlier date, in
which case such representations and warranties shall be true and correct in
all material respects (or, with respect to representations and warranties
qualified by materiality, in all respects) as of such earlier date);
(d) Agent shall have received UCC, PPSA, and Lien searches and other
evidence satisfactory to Agent that its Liens are the only Liens upon the
Collateral, except Permitted Liens;
(e) Agent shall have received executed counterparts of that certain Fee
Letter, dated as of the date hereof, by and between the Borrowers and Agent
(the "
Amendment Fee Letter
");
(f) all accrued fees and expenses of Agent (including the fees and expenses
of counsel (including any local counsel) for Agent) due from the Loan Parties
on or prior to the Fourth Amendment Effective Date pursuant to the Loan
Documents shall have been paid in full in cash, including all fees due and
payable on the Fourth Amendment Effective Date pursuant to the Amendment Fee
Letter;
ii
-------------------------------------------------------------------------------
(g) Agent shall have received satisfactory opinions of counsel to the
applicable Loan Parties, in each case, customary for transactions of this type
(which shall cover, among other things, authority, legality, validity, binding
effect and enforceability of the Loan Documents) and of appropriate local
counsel for Loan Parties organized under the law of Ohio and Ontario; and
(h) to the extent reasonably requested by Agent or any Lender at least 10
Business Days prior to the Fourth Amendment Effective Date, each Borrower
shall have provided all documentation and other information as Agent or any
Lender shall have reasonably requested in connection with applicable "know
your customer" and anti-money-laundering rules and regulations, including the
Patriot Act and Beneficial Ownership Regulation. If any Borrower qualifies as
a "legal entity customer" under the Beneficial Ownership Regulation, it shall
have provided a Beneficial Ownership Certification to Agent and Lenders in
relation to such Borrower.
3.
Fourth Amendment Assignments
. Upon the effectiveness of this Agreement, (i) each Lender signatory hereto
(other than the Non-Extending Lenders) (such Lenders, the "
Extending Lenders
") shall be deemed to have accepted an assignment from the Non-Extending
Lenders, and the Non-Extending Lender shall be deemed to have made an
assignment to each Extending Lender (in each case, on the terms and conditions
set forth in the Assignment and Acceptance) to the extent necessary such that,
upon the effectiveness of this Agreement, each Lender shall hold its
respective Commitments in the amounts set forth in Schedule 1.1(a) to the Loan
Agreement (as amended hereby and as set forth on Annex B attached hereto) (the
foregoing assignments, the "Fourth Amendment Assignments") and (ii) the Total
Revolver Exposure of the Lenders shall be automatically adjusted such that,
after giving effect to such assignments and adjustments, the Total Revolver
Exposure under the Loan Agreement is held ratably by the Lenders in proportion
to their respective Commitments (as determined immediately after giving effect
to the Fourth Amendment Assignments). The Fourth Amendment Assignments
pursuant to the preceding sentence shall be made in exchange for the principal
amount assigned plus accrued and unpaid interest and shall not be subject to
the assignment fee set forth in the Loan Agreement. Each Lender hereby waives
any compensation for "breakage" (i.e., any loss, cost and expense attributable
to the Fourth Amendment Assignments, including any loss, cost or expense
arising from the liquidation or redeployment of funds or from any fees
payable, as contemplated by
Section 3.9
of the Loan Agreement).
4.
Acknowledgment and Reaffirmation
Each of the undersigned Loan Parties hereby (a) unconditionally consents to
the terms of this Agreement, including the amendments in
Section 1
hereof, and fully ratifies and affirms its respective obligations under the
Loan Agreement and the other Loan Documents, taking into account this
Agreement and giving effect to the Fourth Amendment Effective Date and (b)
acknowledges and agrees that the execution, delivery and performance of this
Agreement and the other documents shall not impair the validity, effectiveness
or priority of the Liens granting pursuant to the Security Documents, and such
Liens are ratified and reaffirmed and shall continue unimpaired with the same
priority to serve the applicable Obligations.
5.
Reference to and Effect Upon the Loan Agreement
iii
-------------------------------------------------------------------------------
(a) Except as specifically amended above, the Loan Agreement and the other
Loan Documents shall remain in full force and effect and are hereby ratified
and confirmed. This Agreement and the amendments set forth in
Section 1
hereof do not constitute a novation under the Existing Loan Agreement.
(b) The execution, delivery and effectiveness of this Agreement and the
amendments in
Section 1
hereof shall not operate as a waiver of any right, power or remedy of Agent or
any Lender under the Loan Agreement or any Loan Document, nor constitute a
waiver of any provision of the Loan Agreement or any Loan Document. Upon the
Fourth Amendment Effective Date, each reference in the Loan Agreement to "this
Agreement", "hereunder", "hereof", "herein" or words of similar import shall
mean and be a reference to the Loan Agreement as amended hereby.
(c) This Agreement shall constitute a Loan Document for purposes of the
Loan Agreement and the other Loan Documents.
6.
Costs and Expenses
Each Borrower hereby affirms its obligation under
Section 3.4
of the Loan Agreement to reimburse Agent for all reasonable out-of-pocket
expenses incurred by Agent in connection with the negotiation and preparation
of this Agreement, including but not limited to the reasonable fees, charges
and disbursements of attorneys for Agent with respect thereto.
7.
Governing Law
This Agreement shall be governed by the laws of the State of New York.
8.
Consent to Forum
. EACH LOAN PARTY PARTY HERETO HEREBY CONSENTS TO THE EXCLUSIVE JURISDICTION
OF ANY FEDERAL OR STATE COURT SITTING IN OR WITH JURISDICTION OVER THE STATE
OF NEW YORK, IN ANY PROCEEDING OR DISPUTE RELATING IN ANY WAY TO THIS
AGREEMENT, AND AGREES THAT ANY SUCH PROCEEDING SHALL BE BROUGHT BY IT SOLELY
IN ANY SUCH COURT. EACH LOAN PARTY PARTY HERETO IRREVOCABLY WAIVES ALL CLAIMS,
OBJECTIONS AND DEFENSES THAT IT MAY HAVE REGARDING SUCH COURT'S PERSONAL OR
SUBJECT MATTER JURISDICTION, VENUE OR INCONVENIENT FORUM. EACH PARTY HERETO
IRREVOCABLY CONSENTS TO SERVICE OF PROCESS IN THE MANNER PROVIDED FOR NOTICES
IN
SECTION 14.3.1
OF THE LOAN AGREEMENT.
9.
Headings
Section headings herein are included herein for convenience of reference only
and shall not constitute a part hereof for any other purpose or be given any
substantive effect.
10.
Counterparts; Electronic Execution
Section 14.8
of the Loan Agreement is hereby incorporated by reference herein
mutatis mutandis
.
[signature pages follow]
iv
-------------------------------------------------------------------------------
IN WITNESS WHEREOF
, the parties have executed this Amendment as of the date and year first above
written.
CS INTERMEDIATE HOLDCO 1 LLC,
as a U.S. Facility Guarantor and a Canadian Facility Guarantor
By:
/s/ Jonathan P. Banas
Name: Jonathan P. Banas
Title: President
COOPER-STANDARD AUTOMOTIVE INC.,
as a U.S. Borrower, a U.S. Facility Guarantor and a Canadian Facility Guarantor
By:
/s/ Jonathan P. Banas
Name: Jonathan P. Banas
Title: Executive Vice President and Chief Financial Officer
COOPER-STANDARD INDUSTRIAL AND SPECIALTY GROUP, LLC (f/k/a Lauren Manufacturing, LLC),
as a U.S. Guarantor and a U.S. Guarantor and Canadian Facility Guarantor
By:
/s/ James Zabriskie
Name: James Zabriskie
Title: Treasurer
COOPER-STANDARD AUTOMOTIVE CANADA LIMITED,
as the Canadian Borrower and a Canadian Facility Guarantor
By:
/s/ Jonathan P. Banas
Name: Jonathan P. Banas
Title: Vice President
[Signature Page to Amendment No. 4 to Third Amended and Restated Loan Agreement]
-------------------------------------------------------------------------------
COOPER-STANDARD AUTOMOTIVE FLUID SYSTEMS MEXICO HOLDING LLC,
as a U.S. Facility Guarantor and Canadian Facility Guarantor
By:
/s/ Jonathan P. Banas
Name: Jonathan P. Banas
Title: Vice President
[Signature Page to Amendment No. 4 to Third Amended and Restated Loan Agreement]
-------------------------------------------------------------------------------
CSA SERVICES INC.,
as a U.S. Facility Guarantor and Canadian Facility Guarantor
By:
/s/ Jonathan P. Banas
Name: Jonathan P. Banas
Title: President
NISCO HOLDING COMPANY,
as a U.S. Facility Guarantor and Canadian Facility Guarantor
By:
/s/ Jonathan P. Banas
Name: Jonathan P. Banas
Title: Vice President
COOPER-STANDARD FHS LLC (f/k/a COOPER-STANDARD AUTOMOTIVE FHS INC.),
as a U.S. Facility Guarantor and Canadian Facility Guarantor
By:
/s/ Jonathan P. Banas
Name: Jonathan P. Banas
Title: President
COOPER-STANDARD CANADA HOLDINGS LLC,
as a U.S. Facility Guarantor and Canadian Facility Guarantor
By:
/s/ Jonathan P. Banas
Name: Jonathan P. Banas
Title: President
[Signature Page to Amendment No. 4 to Third Amended and Restated Loan Agreement]
-------------------------------------------------------------------------------
CS AUTOMOTIVE COSTA RICA S.A.,
as Specified Jurisdiction Guarantor
By:
/s/ Juan Jimenez
Name: Juan Jimenez
Title: Authorized Signatory
[Signature Page to Amendment No. 4 to Third Amended and Restated Loan Agreement]
-------------------------------------------------------------------------------
COOPER-STANDARD FRANCE SAS,
COOPER-STANDARD AUTOMOTIVE FRANCE SAS
,
as Specified Jurisdiction Guarantors
By:
/s/ Patrick Clark
Name: Patrick Clark
Title: President
[Signature Page to Amendment No. 4 to Third Amended and Restated Loan Agreement]
-------------------------------------------------------------------------------
COOPER-STANDARD TECHNICAL SERVICES DE MEXICO S. DE R.L. DE C.V.,
COOPER-STANDARD DE MEXICO, S. DE R.L. DE C.V.,
COOPER-STANDARD AUTOMOTIVE DE MEXICO S.A. DE C.V.,
COOPER-STANDARD AUTOMOTIVE SEALING DE MEXICO, S.A. DE C.V.,
CS MEXICO HOLDINGS, S. DE. R.L. C.V.,
COOPER-STANDARD AUTOMOTIVE SERVICES, S. DE R.L. DE C.V.,
COOPER-STANDARD AUTOMOTIVE FLUID SYSTEMS DE MEXICO, S. DE R.L. DE C.V.,
MANUFACTURERA EL JARUDO, S. DE R.L. DE C.V.,
COOPER-STANDARD AUTOMOTIVE FHS, S. DE R.L. DE C.V.
,
as Specified Jurisdiction Guarantors
By:
/s/ James Christian Zabriskie
Name: James Christian Zabriskie
Title: Treasurer and Legal Representative
[Signature Page to Amendment No. 4 to Third Amended and Restated Loan Agreement]
-------------------------------------------------------------------------------
COOPER-STANDARD LATIN AMERICA B.V.
, having its registered office in Amsterdam, the Netherlands and registered
with the trade register of the Chamber of Commerce under number 63256118, as
Specified Jurisdiction Guarantor
By:
/s/ Daniel Shattock
Name: Daniel Shattock
Title: Authorized Representative
[Signature Page to Amendment No. 4 to Third Amended and Restated Loan Agreement]
-------------------------------------------------------------------------------
COOPER STANDARD ROMANIA S.R.L.
, as Specified Jurisdiction Guarantor
By:
/s/ Javier Esparza Herraiz
Name: Javier Esparza Herraiz
Title: Sole Director
[Signature Page to Amendment No. 4 to Third Amended and Restated Loan Agreement]
-------------------------------------------------------------------------------
AGENT AND LENDERS:
BANK OF AMERICA, N.A.
,
as Agent and U.S. Lender
By:
/s/ Karla Ruppert
Name: Karla Ruppert
Title: Senior Vice President
[Signature Page to Amendment No. 4 to Third Amended and Restated Loan Agreement]
-------------------------------------------------------------------------------
BANK OF AMERICA, N.A.
, (acting through its Canada branch), as a Canadian Lender
By:
/s/ Sylwia Durkiewicz
Name: Sylwia Durkiewicz
Title: Vice President
[Signature Page to Amendment No. 4 to Third Amended and Restated Loan Agreement]
-------------------------------------------------------------------------------
DEUTSCHE BANK AG NEW YORK BRANCH
, as a Lender
By:
/s/ Phillip Tancorra
Name: Phillip Tancorra
Title: Director
By:
/s/ Lauren Danbury
Name: Lauren Danbury
Title: Vice President
[Signature Page to Amendment No. 4 to Third Amended and Restated Loan Agreement]
-------------------------------------------------------------------------------
DEUTSCHE BANK AG CANADA BRANCH
, as a Lender
By:
/s/ David Gynn
Name: David Gynn
Title: Chief Country Officer
By:
/s/
Edward Salibian
Name: Edward Salibian
Title: Assistant Vice-President
[Signature Page to Amendment No. 4 to Third Amended and Restated Loan Agreement]
-------------------------------------------------------------------------------
GOLDMAN SACHS BANK USA
, as a Lender
By:
/s/ Jonathan Dworkin
Name: Jonathan Dworkin
Title: Authorized Signatory
[Signature Page to Amendment No. 4 to Third Amended and Restated Loan Agreement]
-------------------------------------------------------------------------------
Annex A
Conformed Through Amendment No. 4
______________________________________________________________________________
$180,000,000
THIRD AMENDED AND RESTATED LOAN AGREEMENT
among
CS INTERMEDIATE HOLDCO 1
LLC,
as a U.S. Facility Guarantor and a Canadian Facility Guarantor
COOPER-STANDARD AUTOMOTIVE INC.,
as the U.S. Borrower, a U.S. Facility Guarantor and a Canadian Facility
Guarantor
COOPER-STANDARD AUTOMOTIVE CANADA LIMITED
,
as the Canadian Borrower and a Canadian Facility Guarantor
THE OTHER GUARANTORS PARTY HERETO
,
CERTAIN FINANCIAL INSTITUTIONS
,
as Lenders
and
BANK OF AMERICA, N.A.
,
as Agent
Dated as of November 2, 2016,
as amended by Amendment No. 1, dated as of March 24, 2020,
as amended by Amendment No. 2, dated as of May 18, 2020,
and
as amended by Amendment No. 3, dated as of December 19, 2022
,
and as amended by Amendment No. 4, dated as of May 6, 2024
B
OF
A
NK
OF AMERICA
SECURITIES, INC.
as Syndication Agent
B
OF
A
NK
OF AMERICA
SECURITIES
,
INC.
and
DEUTSCHE
GOLDMAN SACHS
BANK
SECURITIES INC.
USA
,
as Joint Lead Arrangers and Bookrunners
AmericasActive:19663285.13
-------------------------------------------------------------------------------
TABLE OF CONTENTS
Page
_____________________________________________________________________________
SECTION 1. DEFINITIONS; RULES OF CONSTRUCTION 2
1.1
Definitions 2
1.2
Accounting Terms
72
74
1.3
Uniform Commercial Code/PPSA
72
74
1.4
Certain Matters of Construction
72
74
1.5
Interpretation (Quebec)
73
75
1.6
Term SOFR Successor Rate
73
75
1.7
Canadian BA
Term CORRA Successor
Rate
Amendment
75
77
1.8
Divisions
75
78
1.9
Interest Rates
75
78
SECTION 2. CREDIT FACILITIES
76
78
2.1
Commitment
76
78
2.1.1
Revolver Loans
76
78
2.1.2
Revolver Notes
77
79
2.1.3
Use of Proceeds
77
80
2.1.4
Reduction or Termination of Commitments; Increase of Commitments
77
80
2.1.5
Overadvances
79
82
2.1.6
Protective Advances
80
83
2.1.7
Prepayments
80
83
2.2
U.S. Letter of Credit Facility
81
83
2.2.1
Issuance of Letters of Credit
81
83
2.2.2
U.S
. Letters of Credit: Reimbursement and Participations
83
85
2.2.3
Cash Collateral
84
87
2.2.4
Resignation of U.S
84
87
2.3
Canadian Letter of Credit Facility
84
87
2.3.1
Issuance of Letters of Credit
84
87
2.3.2
Canadian Letters of Credit: Reimbursement and Participations
86
89
2.3.3
Cash Collateral
87
90
2.3.4
Resignation of Canadian Issuing Bank
88
90
2.4
FILO Credit Facility
88
91
SECTION 3. INTEREST, FEES AND CHARGES
90
93
3.1
Interest
90
93
3.1.1
Rates and Payment of Interest
90
93
3.1.2
Application of Term SOFR to Outstanding Loans
91
94
-i-
AmericasActive:19663285.13
-------------------------------------------------------------------------------
3.1.3
Application of
Canadian BA Rate
Term CORRA
to Outstanding Loans
92
95
3.1.4
Interest Periods
92
95
3.1.5
Interest Rate Not Ascertainable
93
96
3.2
Fees
93
96
3.2.1
Unused Line Fee
93
96
3.2.2
U.S.
U
S
LC Facility Fees
93
96
3.2.3
[Reserved]
94
96
3.2.4
Canadian LC Facility Fees
94
96
3.2.5
Other Fees
94
97
3.3
Computation of Interest, Fees, Yield Protection
94
97
3.4
Reimbursement Obligations
94
97
3.5
Illegality
95
98
3.6
Inability to Determine Rates
95
98
3.7
Increased Costs; Capital Adequacy
96
98
3.7.1
Change in Law
96
98
3.7.2
Capital Adequacy
96
99
3.7.3
Compensation
96
99
3.7.4
Term SOFR Loan Reserves
99
3.8
Mitigation
97
100
3.9
Funding Losses
97
100
3.10
Maximum Interest
97
100
SECTION 4. LOAN ADMINISTRATION
98
101
4.1
Manner of Borrowing and Funding Loans
98
101
4.1.1
Notice of Borrowing
98
101
4.1.2
Fundings by Lenders
99
102
4.1.3
Swingline Loans; Settlement; Rescindable Amounts
100
103
4.1.4
Notices
101
104
4.2
Defaulting Lender
102
104
4.2.1
Reallocation of Pro Rata Share; Amendments
102
104
4.2.2
Payments; Fees
102
105
4.2.3
Status; Cure
102
105
4.3
Number and Amount of Interest Period Loans; Determination of Rate
102
105
4.4
Loan Party Agent
103
106
4.5
One Obligation
104
107
4.6
Effect of Termination
104
107
SECTION 5. PAYMENTS
104
107
5.1
General Payment Provisions
104
107
-ii-
AmericasActive:19663285.13
-------------------------------------------------------------------------------
5.2
Repayment of Obligations
105
108
5.3
Payment of Other Obligations
105
108
5.4
Marshaling; Payments Set Aside
105
108
5.5
Post-Default Allocation of Payments
106
108
5.5.1
Allocation
106
108
5.5.2
Erroneous Application
108
111
5.6
Application of Payments
108
111
5.7
Loan Account; Account Stated
108
111
5.7.1
Loan Account
108
111
5.7.2
Entries Binding
109
111
5.8
Taxes
109
111
5.8.1
Payments Free of Taxes
109
112
5.8.2
Other Taxes
109
112
5.8.3
Indemnification by Loan Parties
109
112
5.8.4
Indemnification by Lenders
109
112
5.8.5
Evidence of Payment
110
112
5.8.6
Treatment of Certain Refunds
110
113
5.8.7
Survival
110
113
5.8.8
Defined Terms
111
113
5.9
Lender Tax Information
111
113
5.9.1
Generally
111
113
5.9.2
U.S
111
114
5.9.3
Lender Obligations
112
114
5.10
Guarantee Loan Parties
112
114
5.10.1
Joint and Several Liability
112
115
5.10.2
Waivers
112
115
5.10.3
Extent of Liability; Contribution
114
117
5.10.4
Joint Enterprise
115
118
5.10.5
Subordination
116
118
5.10.6
French Guarantors
118
5.11
Currency Matters
117
120
5.11.3
Each payment of fees by the U.S
120
5.12
Currency Fluctuations
118
121
SECTION 6. CONDITIONS PRECEDENT
119
121
6.1
Conditions Precedent to Initial Loans
119
121
6.2
Conditions Precedent to All Credit Extensions
121
124
SECTION 7. CASH COLLATERAL
122
124
7.1
Cash Collateral
122
124
-iii-
AmericasActive:19663285.13
-------------------------------------------------------------------------------
SECTION 8. COLLATERAL ADMINISTRATION
122
125
8.1
Borrowing Base Certificates
122
125
8.2
Administration of Accounts
123
125
8.2.1
Records and Schedules of Accounts
123
125
8.2.2
Taxes
123
126
8.2.3
Account Verification
123
126
8.2.4
Maintenance of DACA Deposit Accounts and Dominion Accounts
123
126
8.2.5
Proceeds of Collateral; Payment Items Received
124
127
8.3
Administration of Inventory
124
127
8.3.1
Records and Reports of Inventory
124
127
8.3.2
Returns of Inventory
124
127
8.3.3
Acquisition, Sale and Maintenance
125
127
8.4
[Intentionally Omitted]
125
127
8.5
Administration of Deposit Accounts
125
128
8.6
General Provisions
125
128
8.6.1
Location of Collateral
125
128
8.6.2
Insurance of Collateral; Condemnation Proceeds
126
128
8.6.3
Protection of Collateral
127
129
8.6.4
Defense of Title to Collateral
127
129
8.7
Power of Attorney
127
130
SECTION 9. REPRESENTATIONS AND WARRANTIES
128
130
9.1
General Representations and Warranties
128
130
9.1.1
Organization and Qualification
128
130
9.1.2
Power and Authority
128
131
9.1.3
Enforceability
128
131
9.1.4
Corporate Names; Capital Structure
128
131
9.1.5
Locations
129
131
9.1.6
Title to Properties; Priority of Liens
129
131
9.1.7
Accounts and Inventory
129
131
9.1.8
Financial Statements; Solvency; Material Adverse Effect
130
132
9.1.9
Taxes
130
133
9.1.10
[Intentionally Omitted]
130
133
9.1.11
Intellectual Property
131
133
9.1.12
Governmental Approvals
131
134
9.1.13
Compliance with Laws
131
134
9.1.14
Compliance with Environmental Laws
131
134
9.1.15
Burdensome Contracts
132
134
9.1.16
Litigation
132
135
9.1.17
No Defaults
132
135
-iv-
AmericasActive:19663285.13
-------------------------------------------------------------------------------
9.1.18
ERISA
132
135
9.1.19
Trade Relations
134
136
9.1.20
Labor Relations
134
137
9.1.21
Payable Practices
134
137
9.1.22
Not a Regulated Entity
134
137
9.1.23
Margin Stock
134
137
9.1.24
Perfection, Etc
134
137
9.1.25
OFAC; Sanctions
135
138
9.1.26
Affected Financial Institution
135
138
9.1.27
Anti-Corruption Laws
136
138
9.2
Complete Disclosure
136
138
SECTION 10. COVENANTS AND CONTINUING AGREEMENTS
136
139
10.1
Affirmative Covenants
136
139
10.1.1
Financial and Other Information
136
139
10.1.2
Notices
140
143
10.1.3
Landlord and Storage Agreements
141
144
10.1.4
Compliance with Laws
141
144
10.1.5
Taxes
141
144
10.1.6
Preservation of Existence, Etc
142
145
10.1.7
Maintenance of Properties
142
145
10.1.8
Insurance
142
145
10.1.9
Inspections; Appraisals
142
145
10.1.10
Use of Proceeds
143
146
10.1.11
Covenant to Guarantee Obligations and Give Security
143
146
10.1.12
Licenses
147
150
10.1.13
Post-Closing Matters
147
150
10.2
Negative Covenants
147
150
10.2.1
Permitted Liens
147
150
10.2.2
Permitted Indebtedness
147
150
10.2.3
Restricted Payments
156
159
10.2.4
Holdings Activities
.
163
166
10.2.5
[Intentionally Omitted]
163
166
10.2.6
[Intentionally Omitted]
163
166
10.2.7
Fundamental Changes
163
166
10.2.8
[Intentionally Omitted]
166
169
10.2.9
Organization Documents
166
169
10.2.10
Tax Consolidation
166
169
10.2.11
Accounting Changes
166
169
10.2.12
Dividend and Other Payment Restrictions Affecting Subsidiaries
166
169
10.2.13
Hedging Agreements
169
172
10.2.14
Conduct of Business
169
172
-v-
AmericasActive:19663285.13
-------------------------------------------------------------------------------
10.2.15
Affiliate Transactions
169
172
10.2.16
Plans
172
175
10.2.17
Certain Amendments
172
175
10.3
Financial Covenant
172
175
10.3.1
Fixed Charge Coverage Ratio
172
175
SECTION 11. EVENTS OF DEFAULT; REMEDIES ON DEFAULT
173
176
11.1
Events of Default
173
176
11.2
Remedies upon Default
175
178
11.3
License
175
178
11.4
Setoff
176
179
11.5
Remedies Cumulative; No Waiver
176
179
11.5.1
Cumulative Rights
176
179
11.5.2
Waivers
176
179
11.6
Judgment Currency
176
179
SECTION 12. AGENT
177
180
12.1
Appointment, Authority and Duties of Agent
177
180
12.1.1
Appointment and Authority
177
180
12.1.2
Duties
178
181
12.1.3
Agent Professionals
178
181
12.1.4
Instructions of Required Lenders
178
181
12.2
Agreements Regarding Collateral, Borrower Materials and Intercreditor Matters
179
182
12.2.1
Lien Releases; Care of Collateral; Intercreditor Matters
179
182
12.2.2
Possession of Collateral
180
183
12.2.3
Reports
181
184
12.3
Reliance By Agent
181
184
12.4
Action Upon Default
181
184
12.5
Ratable Sharing
181
184
12.6
Indemnification
182
185
12.7
Limitation on Responsibilities of Agent
182
185
12.8
Successor Agent and Co-Agents
183
186
12.8.1
Resignation; Successor Agent
183
186
12.8.2
Co-Collateral Agent
183
186
12.9
Due Diligence and Non-Reliance
183
186
12.10
Replacement of Certain Lenders
184
187
12.11
Remittance of Payments and Collections
184
187
12.11.1
Remittances Generally
184
187
12.11.2
Failure to Pay
184
187
-vi-
AmericasActive:19663285.13
-------------------------------------------------------------------------------
12.11.3
Recovery of Erroneous Payments
184
187
12.12
Individual Capacity
185
188
12.13
Titles
185
188
12.14
Bank Product Providers
185
188
12.15
No Third Party Beneficiaries
185
188
12.16
Certain ERISA Matters
185
188
12.16.1
Lender Representations
185
188
12.16.2
Further Lender Representations
186
189
SECTION 13. BENEFIT OF AGREEMENT; ASSIGNMENTS AND PARTICIPATIONS
186
189
13.1
Successors and Assigns
186
189
13.2
Participations
186
189
13.2.1
Permitted Participants; Effect
186
189
13.2.2
Voting Rights
187
190
13.2.3
Benefit of Set-Off
187
190
13.3
Assignments
187
190
13.3.1
Permitted Assignments
187
190
13.3.2
Register
188
191
13.3.3
Effect; Effective Date
188
191
13.3.4
Certain Assignees
188
191
SECTION 14. MISCELLANEOUS
189
192
14.1
Consents, Amendments and Waivers
189
192
14.1.1
Amendment
189
192
14.1.2
Limitations
190
193
14.1.3
Payment for Consents
190
193
14.2
Indemnity
190
193
14.3
Notices and Communications
191
194
14.3.1
Notice Address
191
194
14.3.2
Electronic Communications
191
194
14.3.3
Platform
191
194
14.3.4
Non-Conforming Communications
192
195
14.4
Performance of the Loan Parties' Obligations
192
195
14.5
Credit Inquiries
192
195
14.6
Severability
192
195
14.7
Cumulative Effect; Conflict of Terms
192
195
14.8
Execution; Electronic Records
193
196
14.9
Entire Agreement
193
196
14.10
Relationship with Lenders
193
196
14.11
No Advisory or Fiduciary Responsibility
193
196
-vii-
AmericasActive:19663285.13
-------------------------------------------------------------------------------
14.12
Confidentiality
194
197
14.13
Acknowledgment Regarding QFCs
194
197
14.13.1
Covered Party
195
198
14.13.2
Definitions
195
198
14.14
GOVERNING LAW
195
198
14.15
Consent to Forum
195
198
14.15.1
Forum
195
198
14.16
Waivers by the Loan Parties
196
199
14.17
Patriot Act Notice
196
199
14.18
Canadian Anti-Money Laundering Legislation
196
199
14.19
Reinstatement
197
200
14.20
Nonliability of Lenders
197
200
14.21
INTERCREDITOR AGREEMENT
197
200
14.22
Amendment and Restatement
198
201
14.23
Acknowledgement and Consent to Bail-In of Affected Financial Institutions
199
202
-viii-
AmericasActive:19663285.13
-------------------------------------------------------------------------------
LIST OF EXHIBITS AND SCHEDULES
Exhibit A-1 Form of Canadian Revolver Note
Exhibit A-2 Form of U.S. Revolver Note
Exhibit B Notice of Borrowing
Exhibit C Notice of Conversion/Continuation
Exhibit D Assignment and Acceptance
Exhibit E Assignment Notice
Exhibit F [Reserved]
Exhibit G Form of Borrowing Base Certificate
Exhibit H Form of Landlord Waiver
Exhibit I Form of Bailee Letter
Exhibit J [Reserved]
Exhibit K Pledge and Security Agreement
Exhibit L Intercompany Subordination Agreement
Schedule 1.1(a) Commitments of Lenders
Schedule 1.1(b) Contingent Obligations
Schedule 1.1(c) Existing Letters of Credit
Schedule 1.1(d) Investments
Schedule 6.1 List of Closing Documents
Schedule 8.5 Deposit Accounts
Schedule 8.6.1 Business Locations
Schedule 9.1.4 Corporate Names and Capital Structure
Schedule 9.1.6(b) Owned Real Property
Schedule 9.1.11 Intellectual Property
Schedule 9.1.14 Environmental Matters
Schedule 9.1.16 Litigation
Schedule 9.1.18(e) Canadian Pension Plan
Schedule 9.1.20 Labor Contracts
Schedule 9.1.24 Filing Offices
Schedule 10.1.13 Post-Closing Matters
Schedule 10.2.1 Liens
Schedule 10.2.2 Existing Indebtedness
-ix-
AmericasActive:19663285.13
-------------------------------------------------------------------------------
THIRD AMENDED AND RESTATED LOAN AGREEMENT
THIS THIRD AMENDED AND RESTATED LOAN AGREEMENT
(this "
Agreement
") is dated as of November 2, 2016, as amended by Amendment No. 1, dated as of
March 24, 2020,
and
amended by Amendment No. 2, dated as of May 18, 2020
, amended by Amendment No. 3, dated as of December 19, 2022, and as amended by
Amendment No. 4, dated as of May 6, 2024
, among
CS INTERMEDIATE HOLDCO 1 LLC
, a Delaware limited liability company ("
Holdings
") as a U.S. Facility Guarantor and a Canadian Facility Guarantor (each as
defined herein),
COOPER-STANDARD AUTOMOTIVE INC
.
,
an Ohio corporation (the "
U.S. Borrower
"),
COOPER-STANDARD AUTOMOTIVE CANADA LIMITED
, an Ontario corporation (together with its permitted successors, the "
Canadian Borrower
" and together with the U.S. Borrower, the "
Borrowers
"), the other U.S. Subsidiaries (as defined herein) of Holdings which are and
may hereafter become party to this Agreement as U.S. Facility Guarantors, the
Canadian Facility Guarantors, the other Canadian Subsidiaries (as defined
herein) of Holdings which are or may hereafter become party to this Agreement
as Canadian Facility Guarantors, the Specified Jurisdiction Guarantors and
other Subsidiaries of Holdings which are or may hereafter become party to this
Agreement as Specified Jurisdiction Guarantors, the financial institutions
party to this Agreement from time to time as lenders (collectively, "
Lenders
"), and
BANK OF AMERICA, N.A.
, a national banking association, in its capacity as collateral agent and
administrative agent for itself and the Secured Parties (as defined herein)
(together with any successor agent appointed pursuant to
Section 12.8
, "
Agent
").
R E C I T A L S:
A. Holdings, the U.S. Borrower, the Canadian Borrower, the other Loan
Parties party thereto, Agent and the financial institutions party thereto are
party to that certain Second Amended and Restated Loan Agreement, dated as of
April 4, 2014 (as amended up to but not including the date hereof, the "
Existing Loan Agreement
").
B. Holdings, the Borrowers, the other Loan Parties, Agent and the Lenders
party hereto wish to amend and restate the Existing Loan Agreement upon and
subject to the terms and conditions hereinafter set forth.
C. Each Subsidiary of Holdings which is or hereafter becomes a party hereto
as a U.S. Facility Guarantor is or will be affiliated, is or will be engaged
in interrelated businesses, and is or will derive substantial direct and
indirect benefit from extensions of credit to the U.S. Borrower.
D. Each Subsidiary of Holdings which is or hereafter becomes a party hereto
as a Canadian Facility Guarantor is or will be affiliated, is or will be
engaged in interrelated businesses, and is or will derive substantial direct
and indirect benefit from extensions of credit to the Canadian Borrower.
E. Each Subsidiary of Holdings which is or hereafter becomes a party hereto
as a Specified Jurisdiction Guarantor is or will be affiliated, is or will be
engaged in interrelated businesses, and is or will derive substantial direct
and indirect benefit from extensions of credit hereunder, which corporate
benefit shall be expressly acknowledged by the competent corporate body or
bodies, as applicable, of any Romanian Guarantor.
-1-
AmericasActive:19663285.13
-------------------------------------------------------------------------------
NOW, THEREFORE
, for valuable consideration hereby acknowledged, the parties agree as follows:
SECTION 1. DEFINITIONS; RULES OF CONSTRUCTION
1.1
Definitions
.
As used herein, the following terms have the meanings set forth below:
"
ABL Priority Collateral
": as defined in the Intercreditor Agreement.
"
Account
": as defined in the UCC and the PPSA, as applicable, including all rights to
payment for goods sold or leased, or for services rendered.
"
Account Debtor
": a Person who is obligated under an Account, Chattel Paper or General
Intangible.
"
Acquired Indebtedness
": with respect to any specified Person:
(1) Indebtedness of any other Person existing at the time such other Person
is merged with or into or became a Restricted Subsidiary of such specified
Person, whether or not such Indebtedness is incurred in connection with, or in
contemplation of, such other Person merging with or into, or becoming a
Subsidiary of such specified Person, and
(2) Indebtedness secured by a Lien encumbering any asset acquired by such
specified Person.
"Adjustment Date": as defined in the definition of Applicable Margin.
"
Adverse Proceeding
": any action, suit, proceeding (whether administrative, judicial or
otherwise), governmental investigation or arbitration (whether or not
purportedly on behalf of Holdings or any of its Restricted Subsidiaries) at
law or in equity, or before or by any Governmental Authority, domestic or
foreign (including any Environmental Claims) pending against or affecting
Holdings or any of its Restricted Subsidiaries or any property of Holdings or
any of its Restricted Subsidiaries.
"
Affected Financial Institution
": (a) any EEA Financial Institution, or (b) any UK Financial Institution.
"
Affiliate
": of any specified Person means any other Person directly or indirectly
Controlling or Controlled by or under direct or indirect common Control with
such specified Person. For purposes of this definition, "
Control
" (including, with correlative meanings, the terms "
Controlling
," "
Controlled by
" and "
under common Control with
"), as used with respect to any Person, means the possession, directly or
indirectly, of the power to direct or cause the direction of the management or
policies of such Person, whether through the ownership of voting securities,
by agreement or otherwise.
"
Agent
": as defined in the preamble to this Agreement.
"
Agent Fee Letter
": the agent fee letter agreement among Agent, Bank of America Securities,
Inc. and Loan Party Agent dated March 11, 2020.
-2-
AmericasActive:19663285.13
-------------------------------------------------------------------------------
"
Agent Indemnitees
": Agent and its officers, directors, employees, Affiliates, agents and
attorneys.
"
Agent Professionals
": attorneys, accountants, appraisers, auditors, business valuation experts,
environmental engineers or consultants, turnaround consultants, and other
professionals and experts retained by Agent.
"
Allocable Amount
": as defined in
Section 5.10.3
.
"
Anti-Terrorism Laws
": any laws relating to terrorism or money laundering, including the Patriot
Act and the Proceeds of Crime Act.
"
Applicable Lenders
": (i) with respect to the U.S. Borrower, the U.S. Lenders, and (ii) with
respect to the Canadian Borrower, the Canadian Lenders.
"
Applicable Loan Party Group
": (i) with respect to the U.S. Borrower, the U.S. Facility Loan Parties and
(ii) with respect to the Canadian Borrower, the Canadian Facility Loan Parties
that are domiciled in Canada.
"
Applicable Margin
": with respect to any Type of Loan and such other Obligations specified
below, (x) for any day prior to the
Third
Fourth
Amendment Effective Date, such margin set forth in this Agreement as in effect
on such day and (y) as of the
Third
Fourth
Amendment Effective Date and each day thereafter, the respective margin set
forth below, as determined by reference to the Average Quarterly Availability
and the Consolidated Total Debt Ratio
:
(A)
Pricing Table A: to the extent a Pricing/Fee Reduction Period is not then effect
Average Quarterly Availability Term SOFR Loans, U.S. Base Rate Loans,
Level Canadian BA Canadian Base Rate
Term CORRA Loans and Canadian
Rate Loans, Letter of Credit Fees Prime Rate Loans
I Greater than or equal to 2.00% 1.00%
45% of the Borrowing Base
II Greater than or equal 2.25% 1.25%
to 20% of the Borrowing
Base but less than 45%
of the Borrowing Base
III Less than 20% of 2.50% 1.50%
the Borrowing Base
(B)
Pricing Table B: to the extent a Pricing/Fee Reduction Period is then effect:
-3-
AmericasActive:19663285.13
-------------------------------------------------------------------------------
Average Quarterly Availability Term SOFR Loans, Term CORRA Rate U.S. Base Rate Loans,
Level Loans, Letter of Credit Fees Canadian Base Rate
Loans and Canadian
Prime Rate Loans
I Greater than or equal to 1.75% 0.75%
45% of the Borrowing Base
II Greater than or equal 2.00% 1.00%
to 20% of the Borrowing
Base but less than 45%
of the Borrowing Base
III Less than 20% of 2.25% 1.25%
the Borrowing Base
The Applicable Margin shall be adjusted quarterly as of the first (1
st
) day of each calendar quarter
(each such date, an "Adjustment Date")
, based upon the Average Quarterly Availability for the immediately preceding
calendar quarter
. As of the First
and with respect to the then in effect foregoing Pricing Table (i.e., if a
Pricing/Fee Reduction Period is then in effect, pricing will be determined
based on Pricing Table B, otherwise pricing will be determined based on
Pricing Table A). In addition, (x) if a Pricing/Fee Reduction Period commences
after any Adjustment Date, then the Applicable Margin shall be further
adjusted as of the first (1
st
) day of the next calendar month to move from Pricing Table A to Pricing Table
B based on the then in effect pricing Level and (y) if a Pricing/Fee Reduction
Period terminates after any Adjustment Date, then the Applicable Margin shall
be further adjusted as of the first (1
st
) day of the next calendar month to move from Pricing Table B to Pricing Table
A based on the then in effect pricing Level. As of the Fourth
Amendment Effective Date and until
April
June
1,
2020
2024
, the Applicable Margin shall be the rates corresponding to Level I
I
in the foregoing
Pricing
t
T
able
A
.
"
Approved Fund
": any Person (other than a natural person) that is engaged in making,
purchasing, holding or otherwise investing in commercial loans and similar
extensions of credit in its ordinary course of activities, has the capacity to
fund Revolver Loans hereunder and is administered or managed by a Lender, an
entity that administers or manages a Lender, or an Affiliate of either.
"
Asset Review and Approval Conditions
": with respect to any acquisition, amalgamation or merger in respect of which
the Accounts or Inventory acquired therein or thereby are requested to be
included in the Canadian Borrowing Base or U.S. Borrowing Base, Agent shall
have completed its review of such assets, including, without limitation, field
examinations, audits, appraisals and other due diligence as Agent shall in its
Permitted Discretion require; it being acknowledged and agreed that, (1) such
additional assets, if any, to be included in the Canadian Borrowing Base or
U.S. Borrowing Base may be subject to different advance rates or eligibility
criteria or may require the imposition of additional reserves with respect
thereto and (2) prior to the inclusion of any additional assets in the
Canadian Borrowing Base or U.S. Borrowing Base, all actions shall have been
taken to ensure that
-4-
AmericasActive:19663285.13
-------------------------------------------------------------------------------
Agent has a perfected and continuing first priority security interest in and
Lien on such assets (to the extent otherwise required herein).
"
Asset Sale
": as defined in the term loan credit agreement, an indenture or another
document governing the Fixed Asset Facility as such agreement is in effect on
the date hereof, or if entered into after the date hereof, on the date such
agreement is entered into in accordance with the terms hereof.
"
Assignment and Acceptance
": an assignment agreement between a Lender and Eligible Assignee, in the form
of
Exhibit D
.
"
Assignment of Claims Act
": Assignment of Claims Act of 1940, 31 U.S.C. (s) 3727, 41 U.S.C. (s) 15, as
amended.
"
Audit Trigger Period
": the period (a) commencing on the day that an Event of Default occurs, or
Average Period Availability (for a one-day period) is less than the greater of
(i) $25,000,000 and (ii) 17.5% of the Borrowing Base at such time; and (b)
continuing until, during the preceding thirty (30) consecutive days, no Event
of Default has existed and Average Period Availability has been greater than
the greater of (i) $25,000,000 and (ii) 17.5% of the Borrowing Base at such
time.
"
Availability
": at any time, the sum of the Canadian Availability and the U.S.
Availability, in each case, at such time.
"
Average Availability Test Trigger
": with respect to the Specified Transaction Conditions, any time that Average
Period Availability is (for a one-day period) less than the greater of (i)
$45,000,000 and (ii) 30% of the Commitments on the date of such action or
proposed action.
"
Average Period Availability
": for any period, an amount equal to the sum of the Availability for each day
of such period (determined as of the close of business of each such day)
divided by the actual number of days in such period, as determined by Agent,
which determination shall be conclusive absent manifest error.
"
Average Quarterly Availability
": for any calendar quarter, an amount equal to the sum of the Availability
for each day of such calendar quarter (determined as of the close of business
of each such day) divided by the actual number of days in such calendar
quarter, as determined by Agent, which determination shall be conclusive
absent manifest error.
"
Bail-In Action
": the exercise of any Write-Down and Conversion Powers by the applicable
Resolution Authority in respect of any liability of an Affected Financial
Institution.
"
Bail-In Legislation
": means, (a) with respect to any EEA Member Country implementing Article 55
of Directive 2014/59/EU of the European Parliament and of the Council of the
European Union, the implementing law, rule, regulation or requirement for such
EEA Member Country from time to time which is described in the EU Bail-In
Legislation Schedule, and (b) with respect to the United Kingdom, Part I of
the United Kingdom Banking Act 2009 (as amended from time to time) and any
other law, regulation or rule applicable in the United Kingdom relating to the
resolution of unsound or failing banks, investment firms or other financial
institutions or their affiliates (other than through liquidation,
administration or other insolvency proceedings).
-5-
AmericasActive:19663285.13
-------------------------------------------------------------------------------
"
Bank of America
": Bank of America, N.A., a national banking association, and its successors
and assigns.
"
Bank of America (Canada)
": Bank of America, N.A. (acting through its Canada branch).
"
Bank of America Indemnitees
": Bank of America and its officers, directors, employees, Affiliates, agents
and attorneys.
"
Bank Product
": any of the following products, services or facilities extended to any Loan
Party or Restricted Subsidiary (or any other Affiliate thereof requested by a
Borrower and approved by Agent) by a Lender or any of its Affiliates: (a) Cash
Management Services; (b) products under Hedging Agreements; and (c) commercial
credit card and merchant card services;
provided
,
however
, that for any of the foregoing to be included as an "Obligation" for purposes
of a distribution under
Section 5.5.1
, the Lender or Affiliate providing such Bank Product and Loan Party Agent
must have previously provided written notice to Agent of (i) the existence of
such Bank Product, (ii) the maximum dollar amount of obligations arising
thereunder to be included as a Canadian Bank Product Reserve or U.S. Bank
Product Reserve, as applicable ("
Bank Product Amount
"), (iii) the methodology to be used by such parties in determining the
Secured Bank Product Obligations owing from time to time and if Agent has
received no such notice with respect to any such Bank Product, then Agent
shall be permitted to assume that no such Bank Product is outstanding in
connection with making distributions under
Section 5.5.1
and
(iv) its agreement to be bound by
Section 12.14
;
provided
,
however
, that no such notice from Loan Party Agent shall be required with respect to
any Bank Products provided by Bank of America or its Affiliates. The Bank
Product Amount may be changed from time to time by Agent (with respect to Bank
Products provided by Bank of America or its Affiliates) in its Permitted
Discretion or upon written notice to Agent by the Lender or Affiliate
providing the related Bank Product and Loan Party Agent. No additional Bank
Product Amount may be voluntarily established or increased by the Loan Parties
at any time that a Default or Event of Default exists, or if a reserve in such
amount would cause an Overadvance.
"
Bank Product Amount
": as defined in the definition of Bank Product.
"
Beneficial Ownership Certification
": a certification regarding beneficial ownership as required by the
Beneficial Ownership Regulation, in form and substance satisfactory to Agent.
"
Beneficial Ownership Regulation
": 31 C.F.R. (s)1010.230.
"
Benefit Plan
": any (a) employee benefit plan (as defined in ERISA) subject to Title I of
ERISA, (b) plan (as defined in and subject to Section 4975 of the Code), or
(c) Person whose assets include (for purposes of ERISA Section 3(42) or
otherwise for purposes of Title I of ERISA or Section 4975 of the Code) the
assets of any such employee benefit plan or plan.
"
Board of Directors
": as to any Person, the board of directors or managers, sole member or
managing member, as applicable, of such Person (or, if such Person is a
partnership, the board of directors or other governing body of the general
partner of such Person) or any duly authorized committee thereof.
-6-
AmericasActive:19663285.13
-------------------------------------------------------------------------------
"
Borrowed Money
": with respect to any Person, any (a) obligation that (i) arises from the
borrowing of money by such Person (including, for the avoidance of doubt,
arising from any Permitted Receivables Financing of such Person), (ii) is
evidenced by notes, drafts, bonds, debentures, credit documents or similar
instruments, (iii) accrues interest or is a type upon which interest charges
are customarily paid (excluding trade payables or administrative or general
expenses owing in the ordinary course of business) or (iv) was issued or
assumed as full or partial payment for property (excluding trade payables
owing in the ordinary course of business); (b) capitalized amount in respect
of Capital Leases of such Person; (c) reimbursement obligations by such Person
with respect to letters of credit issued for the account of such Person; and
(d) guarantees by such Person of any of the foregoing owing by another Person.
"
Borrower Materials
": Borrowing Base Certificates, Compliance Certificates and other information,
reports, financial statements and other materials delivered by Borrowers
hereunder, as well as the Reports provided by Agent to Lenders.
"
Borrowers
": as defined in the preamble to this Agreement. For the avoidance of doubt,
as of the Third Amendment Effective Date, "Borrower" or "Borrowers" shall not
include the European Borrower (as defined in this Agreement immediately prior
to the Third Amendment Effective Date) for any purposes under the Loan
Documents. For the avoidance of doubt, as of the Third Amendment Effective
Date, the European Borrower shall not be a Guarantor under the Loan Documents.
"
Borrowing
": a group of Loans of one Type that are made on the same day or are converted
into Loans of one Type on the same day.
"
Borrowing Base
": the Canadian Borrowing Base and/or the U.S. Borrowing Base, as the context
requires.
"
Borrowing Base Certificate
": a certificate, substantially in the form attached as
Exhibit G
or otherwise in form and substance satisfactory to Agent, by which Loan Party
Agent certifies calculation of any Borrowing Base.
"
Business Day
": any day excluding Saturday, Sunday and any other day that is a legal
holiday under the laws of the State of North Carolina or the State of New York
or is a day on which banking institutions located in such States are closed;
and when used with reference to (i) a Term SOFR Loan, the term shall also
exclude any day that is not a U.S. Government Securities Business Day, and
(ii) a Canadian Revolver Loan, the term shall also exclude a day on which
banks in Toronto, Ontario, Canada are not open for the transaction of banking
business.
"
Canadian Auto-Extension Letter of Credit
": as defined in
Section 2.3.1(e)
.
"
Canadian Availability
": as of any date of determination, the Canadian Borrowing Base as of such
date of determination
plus
solely for purposes of calculating "Availability" in connection with the
satisfaction of any Specified Transaction Conditions, the Canadian Suppressed
Amount on such date of determination
plus
the Canadian Designated Cash Amount on such date of determination
minus
the Canadian Revolver Exposure (calculated without duplication of any amounts
reserved under the Canadian LC Reserve) on such date of determination.
-7-
AmericasActive:19663285.13
-------------------------------------------------------------------------------
"
Canadian Availability Reserve
": the sum (without duplication) of (a) the Inventory Reserve with respect to
the Canadian Domiciled Loan Parties' Inventory; (b) the Canadian Rent and
Charges Reserve; (c) the Canadian LC Reserve; (d) the Canadian Bank Product
Reserve; (e) the aggregate amount of liabilities secured by Liens upon any
Canadian Facility Collateral that are senior to Agent's Liens (but imposition
of any such reserve shall not waive an Event of Default arising therefrom);
(f) the Canadian Priority Payables Reserve; (g) the Wage Earner Protection Act
Reserve; (h) the Canadian Designated Foreign Guaranty Reserve; (i) the
Canadian Tooling Vendor Reserve and (j) such additional reserves (including,
without limitation, dilution reserves), in such amounts and with respect to
such matters, as Agent in its Permitted Discretion may establish.
"
Canadian BA Rate
": with respect to each Interest Period for a Canadian BA Rate Loan, the rate
of interest
per annum equal to the
average rate applicable to Canadian Dollar Bankers' Acceptances having an
identical or comparable term as the proposed Canadian BA Rate Loan displayed
and identified as such on the display referred to as the "CDOR Page" (or any
display substituted therefor) of Reuter Monitor Money Rates Service as at
approximately 10:00 a.m. Toronto time on such day (or, if
such day is not a Business Day,
as of 10:00 a.m. Toronto time
on the immediately preceding Business Day)
; provided that if such rate does not appear on the CDOR Page at such time on
such date, the rate for such date will be the annual discount rate (rounded
upward to the nearest whole multiple of 1/100 of 1%) as of 10:00 a.m. Eastern
time on such day at which a Canadian chartered bank listed on Schedule 1 of
the Bank Act (Canada) as selected by Agent is then offering to purchase
Canadian Dollar Bankers' Acceptances accepted by it having such specified term
(or a term as closely as possible comparable to such specified term); provided
that if the Canadian BA Rate determined pursuant to the foregoing method is
less than one percent (1.00%), then
such rate shall be deemed
one percent (1.00%)
for purposes of this Agreement.
"
Canadian BA
Rate Loan
": a Canadian Revolver Loan
, or portion thereof, funded in Canadian Dollars and bearing interest
calculated by reference to the Canadian BA Rate.
"
Canadian Bank Product Reserve
": the aggregate amount of reserves, as established by Agent from time to time
in its Permitted Discretion to reflect the reasonably anticipated liabilities
in respect of the then outstanding Secured Bank Product Obligations of the
Canadian Domiciled Loan Parties and their Subsidiaries (or any other Affiliate
thereof requested by the Canadian Borrower and approved by Agent).
"
Canadian Base Rate
": for any day, a fluctuating rate of interest per annum equal to the higher
of (a) the rate of interest in effect for such day as publicly announced from
time to time by Bank of America (Canada) as its "base rate", (b) the Federal
Funds Rate plus 0.50%, and (c) Term SOFR for a one month interest period as of
such day, plus 1.0%; provided that if the Canadian Base Rate shall be less
than zero, such rate shall be deemed zero for purposes of this Agreement. The
"base rate" being a rate set by Bank of America (Canada) based on various
factors including costs and desired return of Bank of America (Canada),
general economic conditions and other factors, and used as a reference point
for pricing loans in Dollars made at its "base rate", which may be priced at,
above or below such announced rate). Any change in the "base rate" announced
by Bank of America (Canada) shall take effect at the opening of business on
the day specified in the public announcement of such change. Each interest
rate based upon the Canadian Base Rate shall be adjusted simultaneously with
any change in the "base rate". In the event that Bank of America (Canada)
(including any successor or assignee) does not
-8-
AmericasActive:19663285.13
-------------------------------------------------------------------------------
at any time publicly announce a "base rate", then "Canadian Base Rate" shall
mean the "base rate" publicly announced by a Schedule 1 chartered bank in
Canada selected by Agent.
"
Canadian Base Rate Loan
": a Canadian Revolver Loan, or portion thereof, funded in Dollars and bearing
interest calculated by reference to the Canadian Base Rate.
"
Canadian Borrower
": as defined in the preamble to this Agreement.
"
Canadian Borrowing Base
": on any date of determination, an amount equal to the lesser of (a) the
Maximum Canadian Facility Amount
minus
(x) the Canadian Priority Payables Reserve
minus
(y) the Wage Earner Protection Act Reserve
minus
(z) the Canadian LC Reserve; and (b) (1) the sum of (x) 85% of the Value of
Eligible Accounts of the Canadian Domiciled Loan Parties;
plus
(y) the lesser of (i) 70% of the Value of Eligible Inventory of the Canadian
Domiciled Loan Parties; and (ii) 85% of the NOLV Percentage of the Value of
Eligible Inventory of the Canadian Domiciled Loan Parties;
plus
(z) 85% of the Value of Eligible Tooling Accounts of the Canadian Domiciled
Loan Parties
minus
(2) the Canadian Availability Reserve. Notwithstanding the foregoing, in no
event may the maximum amount of availability under the Canadian Borrowing Base
and the U.S. Borrowing Base resulting from the inclusion of Eligible Tooling
Accounts exceed $30,000,000 in the aggregate.
"
Canadian Cash Collateral Account
": a demand deposit, money market or other account established by Agent at
Bank of America (Canada) or such other financial institution as Agent may
select in its discretion, which account shall be for the benefit of the
Canadian Facility Secured Parties and shall be subject to Agent's Liens
securing the Canadian Facility Obligations.
"
Canadian Designated Cash Amount
": the aggregate amount of cash of the Canadian Domiciled Loan Parties
deposited in segregated DACA Deposit Accounts with Agent.
"
Canadian Designated Foreign Guaranty Reserve
": the aggregate amount of reserves established by Agent from time to time in
its Permitted Discretion in respect of any Designated Foreign Guaranty
established in favor of a Canadian Lender and/or an Affiliate of a Canadian
Lender.
"
Canadian Dollars
" or "
Cdn$
": the lawful currency of Canada.
"
Canadian Domiciled Loan Party
": each Canadian Subsidiary of Holdings now or hereafter party hereto as a
Loan Party, and "
Canadian Domiciled Loan Parties
" means all such Persons, collectively.
"
Canadian Dominion Account
": a special account established by the Canadian Domiciled Loan Parties at
Bank of America (Canada) or another bank reasonably acceptable to Agent, over
which Agent has exclusive control for withdrawal purposes.
"
Canadian Facility Collateral
": Collateral that now or hereafter secures (or is intended to secure) any of
the Canadian Facility Obligations, including property of the U.S. Domiciled
Loan Parties pledged to secure their Obligations under their guarantee of the
Canadian Facility Obligations.
"
Canadian Facility Guarantee
": each guarantee agreement (including this Agreement) at any time executed by
a Canadian Facility Guarantor in favor of Agent guaranteeing all or any
portion of the Canadian Facility Obligations.
-9-
AmericasActive:19663285.13
-------------------------------------------------------------------------------
"
Canadian Facility Guarantor
": Holdings, each Canadian Subsidiary of Holdings, each other U.S. Subsidiary
of Holdings, and each other Person (if any) who guarantees payment and
performance of any Canadian Facility Obligations.
"
Canadian Facility Loan Party
": the Canadian Borrower or a Canadian Facility Guarantor.
"
Canadian Facility Obligations
": all applicable Obligations of the Canadian Facility Loan Parties
(excluding, for the avoidance of doubt, all U.S. Facility Obligations).
"
Canadian Facility Secured Parties
": Agent, Canadian Issuing Bank, Canadian Lenders, Secured Bank Product
Providers of Bank Products to Canadian Facility Loan Parties, and the Lead
Arrangers.
"
Canadian Issuing Bank
": (a) Bank of America (Canada) or an Affiliate of Bank of America (Canada),
as an issuer of Letters of Credit under this Agreement and (b) Deutsche Bank
AG Canada Branch or an Affiliate of Deutsche Bank AG Canada Branch, as an
issuer of Letters of Credit under this Agreement.
"
Canadian LC Obligations
": the sum (without duplication) of (a) all amounts owing by the Canadian
Borrower for any drawings under Letters of Credit; (b) the stated amount of
all outstanding Letters of Credit issued for the account of the Canadian
Borrower; and (c) all fees and other amounts owing with respect to Letters of
Credit issued for the account of the Canadian Borrower.
"
Canadian LC Reserve
": the aggregate of all Canadian LC Obligations, other than (a) those that
have been Cash Collateralized; and (b) if no Default or Event of Default
exists, amounts specified in
clause (c)
of the definition of Canadian LC Obligations.
"
Canadian Lenders
": Bank of America (Canada) and each other Lender that has issued a Canadian
Revolver Commitment (provided that such Person or an Affiliate of such Person
also has a U.S. Revolver Commitment), including Bank of America (Canada) in
its capacity as a provider of Canadian Swingline Loans. Each Canadian Lender
shall be a Canadian Qualified Lender.
"
Canadian Letter of Credit Sublimit
": $1,000,000.
"
Canadian Letters of Credit
": as defined in
Section 2.3.1
hereof.
"
Canadian Multi-Employer Plan
": each multi-employer plan, within the meaning of the Regulations under the
Income Tax Act (Canada), but excluding, for greater certainty, any
Multi-Employer Plan.
"
Canadian Non-Extension Notice Date
": as defined in
Section 2.3.1(e)
.
"
Canadian Overadvance
": as defined in
Section 2.1.5
hereof.
"
Canadian Overadvance Loan
": a Loan made to the Canadian Borrower when a Canadian Overadvance exists or
is caused by the funding thereof.
"
Canadian Overadvance Loan Balance
": on any date, the amount by which the aggregate Canadian Revolver Exposure
exceeds the amount of the Canadian Borrowing Base on such date.
-10-
AmericasActive:19663285.13
-------------------------------------------------------------------------------
"
Canadian Pension Plan
": a "registered pension plan" as defined in the Income Tax Act (Canada), and
any other pension plan maintained or contributed to by, or to which there is
or may be an obligation to contribute by, any Loan Party in respect of its
Canadian employees or former Canadian employees, excluding, for greater
certainty, a Canadian Multi-Employer Plan.
"
Canadian Prime Rate
": on any date, a fluctuating rate of interest per annum equal to the higher
of (a) the
per annum rate of interest quoted or established as the "prime rate" of the
Agent which it quotes or establishes for such day as its reference
rate of interest in
effect for such day as publicly announced from time to time by Bank of America (
order to determine interest rates for commercial loans in Canadian Dollars in
Canada
) as
to
its
"
Canadian
Prime rate" and (b) the Canadian BA Rate for a thirty (30) day Interest Period
as determined on such day plus 1.00%
borrowers; and (b) Term CORRA for a one (1) month term that is two (2)
Business Days prior to such date
plus
the Term CORRA Adjustment
plus
1% per annum, adjusted automatically with each quoted or established change in
such rate, all without the necessity of any notice to any Borrower or any
other Person
; provided that if
the Canadian Prime Rate
any of the above rates
shall be less than zero, such rate shall be deemed zero for purposes of this
Agreement.
The "
Such
Canadian Prime Rate
"
is
a rate set by Bank of America (Canada)
based upon various factors including
Bank of America (Canada)'s
costs and desired return, general economic conditions and other factors, and
is used as a reference point for pricing some loans, which may be priced at,
above, or below such announced rate. Any change in
such rate announced by Bank of America (
the
Canad
i
a
n
)
Prime Rate
shall take effect at the opening of business on the day specified in the
public announcement of such change.
"
Canadian Prime Rate Loan
": a Canadian Revolver Loan, or portion thereof, funded in Canadian Dollars
and bearing interest calculated by reference to the Canadian Prime Rate.
"
Canadian Priority Payables Reserve
": on any date of determination, a reserve in such amount as Agent may
reasonably determine in its Permitted Discretion, which reflects the unpaid
(when due) or un-remitted (when due) payroll tax deductions, employment
insurance premiums, amounts deducted for vacation pay, wages, workers'
compensation and other unpaid (when due) or unremitted (when due) amounts by
any Canadian Domiciled Loan Party which would give rise to a Lien with
priority under applicable Law over the Lien of Agent and if any Loan Party
issues a notice of intended wind up of the Canadian Pension Plan, the
Superintendent, FSCO or other Governmental Authority issues a notice of the
intended decision to wind up a Canadian Pension Plan or Agent reasonably
determines in its Permitted Discretion that it is probable that a Canadian
Pension Plan will be wound up and there is Canadian Unfunded Pension Liability
at such time, a reserve, which Agent may assess and apply, in its Permitted
Discretion, up to an amount that reflects the Canadian Unfunded Pension
Liability of such Canadian Pension Plan.
"
Canadian Qualified Lender
": a financial institution that is listed on Schedule I, II, or III of the
Bank Act
(Canada) or is not a foreign bank for purposes of the
Bank Act
(Canada), or if such financial institution is not resident in Canada and is
not deemed to be resident in Canada with respect to any amounts received
pursuant to this Agreement for purposes of Part XIII of the
Income Tax Act
(Canada), that financial institution deals at arm's length with the Canadian
Borrower for purposes of the
Income Tax Act
(Canada).
"
Canadian Reimbursement Date
": as defined in
Section 2.3.2(a)
.
-11-
AmericasActive:19663285.13
-------------------------------------------------------------------------------
"
Canadian Rent and Charges Reserve
": the aggregate of (a) all past due rent and other past due amounts owing by
any Canadian Domiciled Loan Party
to any landlord, warehouseman, processor, repairman, mechanic, shipper,
freight forwarder, broker or other Person who possesses any Canadian Facility
Collateral of any Canadian Domiciled Loan Party or could assert a Lien on such
Canadian Facility Collateral under applicable Law;
plus
(b) a reserve at least equal to three (3) months (or such shorter period as
Agent determines in its Permitted Discretion as it will take to liquidate the
ABL Priority Collateral at such location) rent and other charges that could
reasonably be expected to be payable to any such Person who possesses any
Canadian Facility Collateral of any Canadian Domiciled Loan Party and could
reasonably be expected to assert a Lien on such Canadian Facility Collateral
under applicable Law, unless, in any such case, such Person has executed a
Collateral Access Agreement.
"
Canadian Revolver Commitment
": for any Canadian Lender, its obligation to make Canadian Revolver Loans and
to issue Canadian Letters of Credit, in the case of Canadian Issuing Bank, or
participate in Canadian LC Obligations (excluding amounts specified in
clause (c)
of such definition), in the case of the other Canadian Lenders, to the
Canadian Borrower up to the maximum principal amount shown on
Schedule 1.1(a)
, or as hereafter determined pursuant to each Assignment and Acceptance to
which it is a party, as such Canadian Revolver Commitment may be adjusted from
time to time in accordance with the provisions of
Sections 2.1.4
or
11.2
. "
Canadian Revolver Commitments
" means the aggregate amount of such commitments of all Canadian Lenders.
"
Canadian Revolver Commitment Termination Date
": the earliest of (a) the U.S. Revolver Commitment Termination Date (without
regard to the reason therefor), (b) the date on which Loan Party Agent
terminates or reduces to zero (0) all of the Canadian Revolver Commitments
pursuant to
Section 2.1.4
, and (c) the date on which the Canadian Revolver Commitments are terminated
pursuant to
Section 11.2
.
"
Canadian Revolver Exposure
": on any date, an amount equal to the sum of the Dollar Equivalent of the
Canadian Revolver Loans outstanding on such date plus the Canadian LC
Obligations (excluding amounts specified in
clause (c)
of such definition) on such date.
"
Canadian Revolver Loan
": a Revolver Loan made by Canadian Lenders to the Canadian Borrower pursuant to
Section 2.1.1(b)
, and any Canadian Swingline Loan, which Revolver Loan shall, if denominated
in Canadian Dollars, be either a
Canadian BA
Term CORRA
Rate Loan or a Canadian Prime Rate Loan and, if denominated in Dollars, shall
be either a Canadian Base Rate Loan or a Term SOFR Loan, in each case as
selected by the Canadian Borrower or Loan Party Agent.
"
Canadian Revolver Notes
": collectively, each promissory note, if any, executed by the Canadian
Borrower in favor of a Canadian Lender to evidence the Canadian Revolver Loans
funded from time to time by such Canadian Lender, which shall be in the form of
Exhibit A-1
to this Agreement, together with any replacement or successor notes therefor.
"
Canadian Security Agreement
": each general security agreement or deed of hypothec among any Canadian
Domiciled Loan Party and Agent and each Section 427
Bank Act
(Canada) security document among the Canadian Borrower and any Canadian
Lender, as may be amended and/or restated from time to time.
-12-
AmericasActive:19663285.13
-------------------------------------------------------------------------------
"
Canadian Subsidiary
": a Subsidiary of Holdings incorporated or organized under the laws of Canada
or any province or territory of Canada.
"Canadian
Successor Rate": as defined in Section
1.7.2.
"Canadian
Successor Rate Conforming Changes": with respect to any proposed
Canadian Successor
Rate, any conforming changes to this Agreement, including changes to
Canadian Prime Rate, CORRA, Term CORRA
, Interest Period, timing and frequency of determining rates and payments of
interest and other administrative matters as may be appropriate, in
Agent's discretion (in consultation with Loan Party Agent)
, to reflect the adoption of such
Canadian Successor
Rate and to permit its administration by Agent in a manner substantially
consistent with market practice (or, if Agent determines that adoption of any
portion of such market practice is not administratively feasible or that no
market practice for the administration of such
Canadian
Successor Rate exists, in such other manner of administration as Agent
determines in consultation with Loan Party Agent). Such changes shall provide
that the
Canadian
Successor Rate cannot be less than
zero percent (0.00
%) for purposes of this Agreement.
"
Canadian Suppressed Amount
": to the extent that the amount calculated pursuant to clause (b) of the
Canadian Borrowing Base definition exceeds the then-current Canadian Revolver
Commitment as of any date of determination, the amount of any such excess
designated in writing by Loan Party Agent to Agent as "Canadian Suppressed
Amount" under this Agreement; provided, that in no event shall the Canadian
Suppressed Amount exceed $5,000,000
less
the U.S. Suppressed Amount as of such date of determination.
"
Canadian Swingline Loan
": any Borrowing of Canadian Prime Rate Loans made pursuant to
Section 4.1.3(c)
.
"
Canadian Tooling Vendor Reserve
": the aggregate amount of reserves, as established by Agent from time to time
in its Permitted Discretion to reflect the reasonably anticipated liabilities
in respect of the then outstanding amounts owing to all tooling vendors with
respect to the tooling giving rise to Eligible Tooling Accounts of the
Canadian Domiciled Loan Parties.
"
Canadian Unfunded Pension Liability
": any unfunded wind up deficiency as identified in (a) the most recent
actuarial valuation report for the purposes of the PBA, or (b) any wind up
report for the purposes of the PBA, and filed or required to be filed with any
applicable Governmental Authority in respect of any Canadian Pension Plan.
"
Canadian Unused Line Fee Rate
": at any date of determination, (x) for any day prior to the
Third
Fourth
Amendment Effective Date, such rate set forth in this Agreement as in effect
on such day and (y) as of the
Third
Fourth
Amendment Effective Date and each day thereafter, a rate per annum equal to
0.50%
.
; provided that, notwithstanding the foregoing, with respect to any day
occurring during the existence of a Pricing/Fee Reduction Period (commencing
as of the first (1
st
) day of the next calendar month after the date the Pricing/Fee Reduction
Period first went into effect and continuing so long as such Pricing/Fee
Reduction Period remains in effect), the Canadian Unused Line Fee Rate shall
equal a rate per annum equal to 0.375%.
-13-
AmericasActive:19663285.13
-------------------------------------------------------------------------------
"
Capital Expenditures
": all liabilities incurred or expenditures made by a Loan Party or Restricted
Subsidiary for the acquisition of any fixed assets, or any improvements,
replacements, substitutions or additions thereto with a useful life of more
than one (1) year that would, in any case, in accordance with GAAP, be
included as additions to property, plant and equipment, but excluding (to the
extent that they would otherwise be included): including, for the avoidance of
doubt, any amount included in the calculation of the Fixed Charge Coverage
Ratio (i) any expenditures during such period made for the replacement or
restoration of assets with assets of the same or similar type to the extent
paid for by any identifiable proceeds of casualty insurance or condemnation
awards; (ii) the purchase price of assets purchased during such period to the
extent the consideration therefor consists of the proceeds of a substantially
concurrent sale of assets; (iii) any expenditures for the purchase price of
assets acquired in an acquisition during such period; (iv) liabilities
incurred or expenditures made to the extent such Loan Party or Restricted
Subsidiary has received reimbursement in cash from a third party during such
period; (v) the non-cash book value of any asset owned by any Loan Party or
Restricted Subsidiary which is included as an addition to property, plant and
equipment as a result of the reuse of such asset during such period without a
corresponding expenditure actually having been made or liability incurred in
such period; (vi) the non-cash purchase price of equipment purchased during
such period to the extent the consideration therefor consists of used or
surplus equipment traded in at the time of such purchase; (vii) the non-cash
purchase price of equipment that is purchased during such period and
substantially contemporaneously with the trade-in of existing equipment to the
extent that the gross amount of such purchase price is reduced by the credit
granted by the seller of such equipment for the equipment being traded in at
such time; and (viii) any expenditures during such period made with the
proceeds of an issuance of Equity Interests by Holdings with respect to which:
(a) such proceeds shall have been received by Holdings within one-hundred
eighty days (180) of such expenditure, and (b) Agent shall have received a
certificate of a Responsible Officer of Loan Party Agent certifying in
reasonable detail as to compliance with preceding clause (a).
"
Capital Stock
":
(1) in the case of a corporation, corporate stock;
(2) in the case of an association or business entity, any and all shares,
interests, participations, rights or other equivalents (however designated) of
corporate stock;
(3) in the case of a partnership or limited liability company, partnership
or membership interests (whether general or limited); and
(4) any other interest or participation that confers on a Person the right
to receive a share of the profits and losses of, or distributions of assets
of, the issuing Person.
"
Capitalized Lease Obligation
": at the time any determination thereof is to be made, the amount of the
liability in respect of a capital lease that would at such time be required to
be capitalized and reflected as a liability on a balance sheet (excluding the
footnotes thereto) in accordance with GAAP; provided that any obligation in
respect of operating leases of Holdings or its Restricted Subsidiaries,
whether entered into before or after the Third Restatement Date, that are
subsequently recharacterized as capital lease obligations of Holdings and its
Restricted Subsidiaries on a consolidated basis due to the effects of
Accounting Standards Codification 842 or a change in accounting treatment or
otherwise after
-14-
AmericasActive:19663285.13
-------------------------------------------------------------------------------
the Third Restatement Date will be deemed not to be treated as a Capitalized
Lease Obligation or Indebtedness.
"
Cash Collateral
": cash or Cash Equivalents, and any interest or other income earned thereon,
that is delivered to Agent to Cash Collateralize any Obligations.
"
Cash Collateralize
": the delivery of cash to Agent, as security for the payment of Obligations,
in an amount equal to (a) with respect to LC Obligations, 105% of the
aggregate amount of such LC Obligations, and (b) with respect to any inchoate,
contingent or other Obligations (including Secured Bank Product Obligations),
Agent's good faith estimate of the amount due or to become due, including all
fees and other amounts relating to such Obligations.
"
Cash Collateralization
" and "
Cash Collateralized
" have correlative meanings. For the avoidance of doubt, it is understood and
agreed that the Loan Parties shall not Cash Collateralize Obligations
hereunder with Cash Equivalents issued or guaranteed by the government of any
Participating Member State.
"
Cash Collateral Account
": the Canadian Cash Collateral Account and/or the U.S. Cash Collateral
Account, as the context may require.
"
Cash Contribution Amount
": the aggregate amount of cash contributions made to the capital of any U.S.
Domiciled Loan Party.
"
Cash Dominion Trigger Period
": the period (a) commencing on the day that an Event of Default occurs, or
Average Period Availability is for a five (5) consecutive Business Day period,
less than the greater of (i) $15,000,000 and (ii) 10% of the Borrowing Base at
such time; and (b) continuing until, during the preceding thirty (30)
consecutive day period, no Event of Default has existed and Average Period
Availability has been greater than the greater of (i) $15,000,000 and (ii) 10%
of the Borrowing Base at such time.
"
Cash Equivalents
": (1) U.S. Dollars, Canadian dollars, pounds sterling, euros or the national
currency of any participating member state of the European Union or the
national currency of any Specified Jurisdiction Guarantor;
(2) securities issued or directly and fully guaranteed or insured by the
government of the United States, Canada or any country that is a member of the
European Union or any agency or instrumentality thereof in each case with
maturities not exceeding two years from the date of acquisition;
(3) certificates of deposit, time deposits and eurodollar time deposits
with maturities of one year or less from the date of acquisition, bankers'
acceptances, in each case with maturities not exceeding one year, and
overnight bank deposits, in each case with any commercial bank having capital
and surplus in excess of $500,000,000, or the foreign currency equivalent
thereof, and whose long-term debt is rated "A" or higher or the equivalent
thereof by Moody's or S&P (or reasonably equivalent ratings of another
internationally recognized ratings agency);
-15-
AmericasActive:19663285.13
-------------------------------------------------------------------------------
(4) repurchase obligations for underlying securities of the types described
in
clauses (2)
and
(3)
above entered into with any financial institution meeting the qualifications
specified in clause
(3)
above;
(5) commercial paper issued by a corporation (other than an Affiliate of
Holdings) rated at least "A-1" or the equivalent thereof by Moody's or S&P (or
reasonably equivalent ratings of another internationally recognized ratings
agency) and in each case maturing within one year after the date of
acquisition;
(6) readily marketable direct obligations issued by any state of the United
States of America or any municipal or political subdivision thereof with a
rating of
"AA-" from S&P or "Aa3" from Moody's or guaranteed by a financial institution
with a rating of "AA-" from S&P or "Aa3" from Moody's (or reasonably
equivalent ratings of another internationally recognized ratings agency) in
each case with maturities not exceeding two years from the date of acquisition;
(7) Indebtedness issued by Persons with a rating of "A" or higher from S&P
or "A-2" or higher from Moody's in each case with maturities not exceeding two
years from the date of acquisition;
(8) investment funds investing at least 90% of their assets in securities
of the types described in
clauses (1)
through
(7)
above; and
(9) in the case of Investments by any Restricted Subsidiary that is a
Foreign Subsidiary, (x) such local currencies in those countries in which such
Foreign Subsidiary transacts business from time to time in the ordinary course
of business and (y) Investments of comparable tenor and credit quality to
those described in the foregoing
clauses (1)
through
(8)
customarily utilized in countries in which such Foreign Subsidiary operates
for short-term cash management purposes.
"
Cash Management Services
": any services provided from time to time by any Lender or any of its
Affiliates to any Loan Party or Subsidiary in connection with operating,
collections, payroll, trust, or other depository or disbursement accounts,
including automated clearinghouse, e-payable, electronic funds transfer, wire
transfer, controlled disbursement, overdraft, depository, information
reporting, lockbox and stop payment services.
"
Casualty Event
": any involuntary loss of title, any involuntary loss of, damage to or any
destruction of, or any condemnation or other taking (including by any
Governmental Authority) of, any property of any Loan Party or any of its
Restricted Subsidiaries. "Casualty Event" shall include but not be limited to
any taking of all or any part of any real property of any Person or any part
thereof, in or by condemnation or other eminent domain proceedings, or by
reason of the temporary requisition of the use or occupancy of all or any part
of any real property of any Person or any part thereof by any Governmental
Authority, civil or military, or any settlement in lieu thereof.
"
CCAA
": Canada's Companies' Creditors Arrangement Act, R.S.C. 1985, c. C-36.
"
CDOR Scheduled Unavailability Date
": June 28, 2024, or such other date that all tenors of CDOR have either
permanently or indefinitely ceased to be administered and provided by
Refinitiv Benchmark Services (UK) Limited (or any successor person).
-16-
AmericasActive:19663285.13
-------------------------------------------------------------------------------
"
CDOR Screen Rate
": as defined in
Section 1.7
.
"
CDOR
Successor Rate
": as defined in
Section
1.7
.
"
CDOR
Successor Rate Conforming Changes
": with respect to any proposed
CDOR Successor
Rate, any conforming changes to this Agreement, including changes to
the Canadian BA Rate
, Interest Period, timing and frequency of determining rates and payments of
interest and other administrative matters as may be appropriate, in
Agent's discretion
, to reflect the adoption of such
CDOR Successor
Rate and to permit its administration by Agent in a manner substantially
consistent with market practice (or, if Agent determines that adoption of any
portion of such market practice is not administratively feasible or that no
market practice for the administration of such
CDOR
Successor Rate exists, in such other manner of administration as Agent
determines in consultation with Loan Party Agent). Such changes shall provide
that the
CDOR
Successor Rate cannot be less than
one percent (1.00
%) for purposes of this Agreement.
"
CFC
": a "controlled foreign corporation" within the meaning of Section 957 of the
Code.
"
Change in Law
": the occurrence, after the First Amendment Effective Date, of (a) the
adoption, taking effect or phasing in of any law, rule, regulation or treaty;
(b) any change in any law, rule, regulation or treaty or in the administration,
interpretation or application thereof; or (c) the making, issuance or
application of any request, guideline, requirement or directive (whether or
not having the force of law) by any Governmental Authority;
provided
,
however
, that "Change in Law" shall include, regardless of the date enacted, adopted
or issued, all requests, rules, guidelines, requirements or directives (i)
under or relating to the Dodd-Frank Wall Street Reform and Consumer Protection
Act, or (ii) promulgated pursuant to Basel III by the Bank for International
Settlements, the Basel Committee on Banking Supervision (or any similar
authority) or any other Governmental Authority.
"
Change of Control
": means at any time, Holdings becomes aware of (by way of a report or any
other filing pursuant to Section 13(d) of the Exchange Act, proxy, vote, or
written notice) the acquisition by any "person" or "group" (within the meaning
of Section 13(d)(3) or Section 14(d)(2) of the Exchange Act, or any successor
provision), including any group acting for the purpose of acquiring, holding
or disposing of securities (within the meaning of Rule 13d-5(b)(1) under the
Exchange Act, or any successor provision), other than a Permitted Holder, in a
single transaction or in a related series of transactions, by way of merger,
consolidation or other business combination or purchase of beneficial
ownership (within the meaning of Rule 13d-3 under the Exchange Act, or any
successor provision) of 35% or more of the total voting power of the Voting
Stock of Holdings or any Parent Entity unless (i) the Permitted Holders have,
at such time, the right or the ability, directly or indirectly, by voting
power, contract or otherwise, to elect or designate for election at least a
majority of the Board of Directors of Holdings or (ii) during any period of
twelve (12) consecutive months, a majority of the seats (other than vacant
seats) on the Board of Directors of Holdings shall be occupied by persons who
were (x) members of the Board of Directors of Holdings nominated, or whose
nomination or election was approved, by one or more Permitted Holders or (y)
appointed by directors so approved or nominated;
provided
that so long as Holdings is a Subsidiary of a Parent Entity, no Person shall
be deemed to be or become a beneficial owner of more than 50% of the total
voting power of the Voting Stock of Holdings unless such Person shall be or
become a beneficial owner of more than 50% of the total voting power of the
Voting Stock of such Parent Entity.
-17-
AmericasActive:19663285.13
-------------------------------------------------------------------------------
"
Claims
": all liabilities, obligations, losses, damages, penalties, judgments,
proceedings, interest, costs and expenses of any kind (including remedial
response costs, reasonable attorneys' fees and Extraordinary Expenses) at any
time (including after Full Payment of the Obligations, resignation or
replacement of Agent, or replacement of any Lender) incurred by or asserted
against any Indemnitee in any way relating to (a) any Loans, Letters of
Credit, Loan Documents, Borrower Materials or the use thereof or transactions
relating thereto, (b) any action taken or omitted to be taken by any
Indemnitee in connection with any Loan Documents, (c) the existence or
perfection of any Liens, or realization upon any Collateral, (d) exercise of
any rights or remedies under any Loan Documents or applicable Law, (e) failure
by any Loan Party to perform or observe any terms of any Loan Document, or (f)
any actual or alleged presence or Release or threatened Release of Hazardous
Materials on, at, under or from any real property owned, leased or operated by
any Loan Party or Restricted Subsidiary of any Loan Party at any time (other
than any such presence, Release or threatened Release resulting solely from
acts or omissions by Persons other than Holdings or any of its Restricted
Subsidiaries after Agent sells the applicable Real Estate pursuant to a
foreclosure or has accepted a deed in lieu of foreclosure), or any
Environmental Claim related in any way to any Loan Party or Restricted
Subsidiary, in each case, including all costs and expenses relating to any
investigation, litigation, arbitration or other proceeding (including an
Insolvency Proceeding or appellate proceedings), whether or not the applicable
Indemnitee is a party thereto.
"
CME
": CME Group Benchmark Administration Limited.
"
Code
": the Internal Revenue Code of 1986.
"
Collateral
": all of each Loan Party's right, title and interest in all property of such
Loan Party, subject to a Lien under, or purported to be subject to a Lien
under, the Security Documents, that, in each case, now or hereafter secures
(or is intended to secure) any of the Obligations.
"
Collateral Access Agreement
": an agreement, in form and substance satisfactory to Agent, by which (a) for
any Collateral located on premises leased by a Loan Party, the lessor waives
or subordinates any Lien it may have on the Collateral, and agrees to permit
Agent to enter upon the premises and remove the Collateral or to use the
premises to store or dispose of the Collateral; (b) for any Collateral held by
a warehouseman, processor, shipper, customs broker or freight forwarder, such
Person waives or subordinates any Lien it may have on the Collateral, agrees
to hold any Documents in its possession relating to the Collateral as agent
for Agent, and agrees to deliver the Collateral to Agent upon request; (c) for
any Collateral held by a repairman, mechanic or bailee, such Person
acknowledges Agent's Lien, waives or subordinates any Lien it may have on the
Collateral, and agrees to deliver the Collateral to Agent upon request; and
(d) for any Collateral subject to a Licensor's Intellectual Property rights,
the Licensor grants to Agent the right, vis-a-vis such Licensor, to enforce
Agent's Liens with respect to the Collateral, including the right to dispose
of it with the benefit of the Intellectual Property, whether or not a default
exists under any applicable License; it being understood that any "Landlord
Waiver" in substantially the form of
Exhibit H
and
any "Bailee Letter" in substantially the form of
Exhibit I
, in any case obtained by or on behalf of any Loan Party, shall be
satisfactory to Agent as a Collateral Access Agreement.
-18-
AmericasActive:19663285.13
-------------------------------------------------------------------------------
"
Commitment
": for any Lender, the aggregate amount of such Lender's Facility Commitments. "
Commitments
" means the aggregate amount of all Facility Commitments, which amount shall
be $180,000,000 on the First Amendment Effective Date.
"
Commodity Exchange Act
": the Commodity Exchange Act (7 U.S.C. (s) 1
et seq.
).
"
Communication
": any notice, request, election, representation, certificate, report,
disclosure, statement, authorization, approval, consent, waiver, document,
amendment or transmittal of information of any kind in connection with a Loan
Document, including any Borrower Materials.
"
Compliance Certificate
": a certificate of Loan Party Agent, in form and substance consistent with
past practices (and which shall, for the avoidance of doubt, list all
outstanding Designated Foreign Guaranties), given at the times specified in
Section 10.1.1(d)
.
"
Conforming Changes
": with respect to use, administration of or conventions associated with SOFR,
Term SOFR or any proposed Term SOFR Successor Rate, as applicable, any
conforming changes to the definitions of U.S. Base Rate, Canadian Base Rate,
SOFR, Term SOFR and Interest Period, timing and frequency of determining rates
and making payments of interest and other technical, administrative or
operational matters (including, for the avoidance of doubt, the definitions of
Business Day and U.S. Government Securities Business Day, timing of borrowing
requests or prepayment, conversion or continuation notices, and length of
lookback periods) as may be appropriate, in Agent's discretion (in
consultation with Loan Party Agent), to reflect the adoption and implementation
of such applicable rate(s) and to permit the administration thereof by Agent
in a manner substantially consistent with market practice (or, if Agent
determines that adoption of any portion of such market practice is not
administratively feasible or that no market practice for the administration of
such rate exists, in such other manner of administration as Agent determines
(in consultation with Loan Party Agent) is reasonably necessary in connection
with administration of any Loan Document.
"
Connection Income Taxes
": Other Connection Taxes that are imposed on or measured by net income
(however denominated) or that are franchise Taxes or branch profits Taxes.
"
Consolidated Net Income
": as defined in the term loan credit agreement, an indenture or another
document governing the Fixed Asset Facility as such agreement is in effect on
the date hereof, or if entered into after the date hereof, on the date such
agreement is entered into in accordance with the terms hereof.
"
Consolidated Senior Secured Net Debt Ratio
": as defined in the term loan credit agreement, an indenture or another
document governing the Fixed Asset Facility as such agreement is in effect on
the date hereof, or if entered into after the date hereof, on the date such
agreement is entered into in accordance with the terms hereof.
"
Consolidated Total Assets
": the consolidated total assets of Parent and its Restricted Subsidiaries as
set forth on the consolidated balance sheet of Parent as of the most recent
period for which financial statements were required to have been delivered
pursuant to
Sections 10.1.1(a)
and
(b)
.
"Consolidated Total Debt Ratio": as of any date of determination, the ratio of
(a) (i) consolidated Indebtedness of Parent and its Restricted Subsidiaries as
of such date minus (ii) the lesser of (x) the
-19-
AmericasActive:19663285.13
-------------------------------------------------------------------------------
aggregate amount of unrestricted cash and Cash Equivalents of Parent and its
Restricted Subsidiaries as of such date and (y) $25,000,000, to (b) EBITDA of
Parent and its Restricted Subsidiaries calculated on a consolidated basis for
the most recently completed four fiscal quarter period for which financial
statements are available.
"
Consolidated Total Net Debt Ratio
": as defined in the term loan credit agreement, an indenture or another
document governing the Fixed Asset Facility as such agreement is in effect on
the date hereof, or if entered into after the date hereof, on the date such
agreement is entered into in accordance with the terms hereof.
"
Contingent Obligations
": with respect to any Person, any obligation of such Person Guaranteeing any
leases, dividends or other obligations that do not constitute Indebtedness
("primary obligations") of any other Person (the "primary obligor") in any
manner, whether directly or indirectly, including, without limitation, any
obligation of such Person, whether or not contingent:
(1) to purchase any such primary obligation or any property constituting
direct or indirect security therefor,
(2) to advance or supply funds:
(a) for the purchase or payment of any such primary obligation; or
(b) to maintain working capital or equity capital of the primary obligor or
otherwise to maintain the net worth or solvency of the primary obligor; or
(3) to purchase property, securities or services primarily for the purpose
of assuring the owner of any such primary obligation of the ability of the
primary obligor to make payment of such primary obligation against loss in
respect thereof.
"
Contractual Obligation
": as to any Person, any provision of any security issued by such Person or of
any agreement, instrument or other undertaking to which such Person is a party
or by which it or any of its property is bound.
"CORRA": the Canadian Overnight Repo Rate Average administered and published
by the Bank of Canada (or any successor administrator).
"
Covenant Party
": each Loan Party other than Holdings.
"
Covered Entity
": (a) a "covered entity," as defined and interpreted in accordance with 12
C.F.R. (s)252.82(b); (b) a "covered bank," as defined in and interpreted in
accordance with 12 C.F.R. (s)47.3(b); or (c) a "covered FSI," as defined in
and interpreted in accordance with 12 C.F.R. (s)382.2(b).
"
Creditor Representative
": under any applicable Law, a receiver, interim receiver, receiver and
manager, trustee (including any trustee in bankruptcy), custodian,
conservator, administrator, examiner, sheriff, monitor, assignee, liquidator,
provisional liquidator, sequestrator or similar officer or fiduciary.
-20-
AmericasActive:19663285.13
-------------------------------------------------------------------------------
"
CRR
": the Council Regulation (EU) No 575/2013 of the European Parliament and of
the Council of 26 June 2013 on prudential requirements for credit institutions
and investment firms and amending Regulation (EU) No 648/2012.
"
DACA Deposit Account
": a Deposit Account subject to a Deposit Account Control Agreement.
"
Daily Simple SOFR
": with respect to any applicable determination date, the secured overnight
financing rate published on the
Federal Reserve Bank of New York
FRBNY
website (or any successor source reasonably satisfactory to Agent).
"
Declined Amounts
": as defined in the term loan credit agreement, an indenture or another
document governing the Fixed Asset Facility as such agreement is in effect on
the date hereof, or if entered into after the date hereof, on the date such
agreement is entered into in accordance with the terms hereof.
"
Default
": an event or condition that, with the lapse of time or giving of notice,
would constitute an Event of Default.
"
Default Rate
": for any Obligation (including, to the extent permitted by law, interest not
paid when due), 2.00% per annum plus the interest rate otherwise applicable
thereto or if such Obligation does not bear interest, a rate equal to the U.S.
Base Rate, plus 2.00% per annum.
"
Defaulting Lender
": any Lender that, as determined by Agent, (a) has failed to comply with its
funding obligations hereunder, and such failure is not cured within two
Business Days unless such Lender notifies Agent and Loan Party Agent in
writing that such failure is the result of such Lender's determination that
one or more conditions precedent to funding (each of which conditions
precedent, together with any applicable default, shall be specifically
identified in such writing) has not been satisfied; (b) has notified Agent or
Loan Party Agent that such Lender does not intend to comply with its funding
obligations hereunder or under any other credit facility, or has made a public
statement to that effect (unless such writing or public statement relates to
such Lender's obligation to fund a Loan hereunder and states that such
position is based on such Lender's determination that a condition precedent to
funding (which condition precedent, together with any applicable default,
shall be specifically identified in such writing or public statement) cannot
be satisfied); (c) has failed, within three Business Days following request by
Agent or Loan Party Agent, to confirm in a manner satisfactory to Agent and
Loan Party Agent that such Lender will comply with its funding obligations
hereunder (provided that such Lender shall cease to be a Defaulting Lender
pursuant to this
clause (c)
upon receipt of such written confirmation by Agent and Loan Party Agent); or
(d) has, or has a direct or indirect parent company that has, (i) become the
subject of an Insolvency Proceeding (including reorganization, liquidation, or
appointment of a receiver, custodian, administrator or similar Person by the
Federal Deposit Insurance Corporation or any other regulatory authority) or
(ii) become the subject of a Bail-In Action; provided, however, that a Lender
shall not be a Defaulting Lender solely by virtue of a Governmental
Authority's ownership of an equity interest in such Lender or parent company
unless the ownership provides immunity for such Lender from jurisdiction of
courts within the United States or from enforcement of judgments or writs of
attachment on its assets, or permits such Lender or Governmental Authority to
repudiate or otherwise to reject such Lender's agreements.
-21-
AmericasActive:19663285.13
-------------------------------------------------------------------------------
"
Deposit Account
": as defined in the UCC (and/or with respect to any Deposit Account located
in Canada, any bank account with a deposit function).
"
Deposit Account Control Agreements
": the deposit account control agreements in form and substance satisfactory
to Agent executed by each lockbox servicer and financial institution
maintaining a lockbox and/or Deposit Account (other than an Excluded Deposit
Account) for a Loan Party, in favor of Agent and meeting the requirements set
forth in
Section 8.2.4
.
"
Designation Date
": the first (1st) date after the Third Restatement Date on which there shall
occur (a) any event described in
Section 11.1(i)
with respect to any Borrower, or (b) an acceleration of Loans and termination
of the Commitments pursuant to
Section 11.2
.
"
Designated Foreign Guaranty
": a guaranty established by a Borrower in favor of any Lender and/or
Affiliate of a Lender with respect to a monetary or financial obligation of a
Foreign Subsidiary of Holdings (other than a Canadian Facility Loan Party);
provided that (x) the aggregate outstanding amount of Indebtedness of the
Foreign Subsidiaries secured by the ABL Priority Collateral shall not exceed
$30,000,000 in the aggregate at any time and (y) for any of the foregoing to
be included as an "Obligation" for purposes of a distribution under
Section 5.5.1
, the Lender or Affiliate providing such Designated Foreign Guaranty and Loan
Party Agent must have previously provided written notice to Agent of (i) the
existence of such Designated Foreign Guaranty, (ii) the maximum dollar amount
of obligations arising thereunder which may be included as a Canadian
Designated Foreign Guaranty Reserve or U.S. Designated Foreign Guaranty
Reserve, as applicable ("Designated Foreign Guaranty Amount"), in Agent's
Permitted Discretion, and (iii) the methodology to be used by such parties in
determining the Designated Foreign Guaranty Amount owing from time to time and
if Agent has received no such notice with respect to any such Designated
Foreign Guaranty Reserve, then Agent shall be permitted to assume that no such
Designated Foreign Guaranty Reserve is outstanding in connection with making
distributions under
Section 5.5.1
; provided, however, that no such notice from Loan Party Agent shall be
required with respect to any Designated Foreign Guaranty Reserve provided by
Bank of America or its Affiliates. The Designated Foreign Guaranty Amount may
be changed from time to time by Agent (with respect to Designated Foreign
Guaranties provided by Bank of America or its Affiliates) in its Permitted
Discretion or upon written notice to Agent by the Lender or Affiliate that is
the beneficiary of the related Designated Foreign Guaranty and Loan Party
Agent. No additional Designated Foreign Guaranty Amount may be voluntarily
established or increased by the Loan Parties at any time that a Default or
Event of Default exists, or if a reserve in such amount would cause an
Overadvance.
"
Designated Jurisdiction
": any country or territory that is the subject of any Sanction.
"
Designated Preferred Stock
": Preferred Stock of Holdings or any other Parent Entity, as applicable
(other than Excluded Equity), that is issued after April 4, 2014 for cash and
is so designated as Designated Preferred Stock, pursuant to an Officer's
Certificate, on the issuance date thereof, the cash proceeds of which are
contributed to the capital of Holdings (if issued by Holdings or any Parent
Entity) and excluded from the calculation set forth in
Section 10.2.3(a)(3)
.
"Designation Date": the first (1st) date after the Third Restatement Date on
which there shall occur (a) any event described in
Section 11.1(i)
with respect to any Borrower, or (b) an acceleration of Loans and termination
of the Commitments pursuant to
Section 11.2
.
-22-
AmericasActive:19663285.13
-------------------------------------------------------------------------------
"
Disqualified Stock
": with respect to any Person, any Capital Stock of such Person that, by its
terms (or by the terms of any security into which it is convertible or for
which it is redeemable or exchangeable), in each case, at the option of the
holder thereof or upon the happening of any event:
(1) matures or is mandatorily redeemable, pursuant to a sinking fund
obligation or otherwise (other than as a result of a change of control or
asset sale so long as any rights of the holders thereof upon the occurrence of
a change of control or asset sale event shall be subject to the prior
repayment in full of the Fixed Asset Facility and all other Obligations that
are accrued and payable and the termination of any Commitments),
(2) is convertible or exchangeable for Indebtedness or Disqualified Stock, or
(3) is redeemable at the option of the holder thereof, in whole or in part,
in each case prior to 91 days after the Facility Termination Date;
provided
,
however
, that only the portion of Capital Stock that so matures or is mandatorily
redeemable, is so convertible or exchangeable or is so redeemable at the
option of the holder thereof prior to such date shall be deemed to be
Disqualified Stock;
provided
,
further
,
however
, that if such Capital Stock is issued to any employee or to any plan for the
benefit of employees of Holdings or its Subsidiaries or by any such plan to
such employees, such Capital Stock shall not constitute Disqualified Stock
solely because it may be required to be repurchased by Holdings in order to
satisfy applicable statutory or regulatory obligations or as a result of such
employee's termination, death or disability;
provided
,
further
, that any class of Capital Stock of such Person that by its terms authorizes
such Person to satisfy its obligations thereunder by delivery of Capital Stock
that is not Disqualified Stock shall not be deemed to be Disqualified Stock.
"
Distribution
": any declaration or payment of a distribution, interest or dividend on any
Equity Interest (other than payment-in-kind); any distribution, advance or
repayment of Indebtedness to a holder of Equity Interests; or any purchase,
redemption, or other acquisition or retirement for value of any Equity
Interest (other than by issuance of Equity Interests which are not
Disqualified Stock).
"
Document
": as defined in the UCC (and/or with respect to any Document of a Canadian
Domiciled Loan Party, a "document of title" as defined in the PPSA).
"
Dollar Equivalent
": on any date, with respect to any amount denominated in Dollars, such amount
in Dollars, and with respect to any stated amount in a currency other than
Dollars, the amount of Dollars that Agent determines using the Exchange Rate
(which determination shall be conclusive and binding absent manifest error)
would be necessary to be sold on such date at the applicable Exchange Rate to
obtain the stated amount of the other currency.
"
Dollars
" or "
$
": lawful money of the United States.
"
Dominion Account
": with respect to the Canadian Domiciled Loan Parties, the Canadian Dominion
Account, and with respect to the U.S. Facility Loan Parties, the U.S. Dominion
Account.
"
EBITDA
": determined on a consolidated basis for Parent and its Restricted
Subsidiaries, net income
plus
(a) without duplication and to the extent deducted in determining net income,
the sum of (i) interest expense, (ii) Receivables Fees, (iii) provision for
income taxes, (iv) depreciation and
-23-
AmericasActive:19663285.13
-------------------------------------------------------------------------------
amortization expense, (v) non-cash charges, fees, losses or expenses (but
excluding any non-cash charge, fee, loss or expense that was included in net
income in a prior period and any non-cash charge, fee, loss or expense that
relates to the write-down or write-off of Inventory, other than any write-down
or write-off of Inventory as a result of purchase accounting adjustments in
respect of any acquisition), (vi) cash and non-cash expenses in connection
with facility closures, severance, relocation, restructuring, integration and
other similar adjustments ("
Facility Closings and Severance Expenses
") in any period, (vii) any losses on the sale of discontinued operations,
(viii) any losses on business dispositions or asset dispositions, (ix) any
extraordinary charges or losses during such period (calculated on an
"after-tax" basis and in accordance with GAAP), (x) earnings of Joint Ventures
to the extent received in cash in any period, (xi) non-recurring fees,
expenses and charges made or incurred in respect of professional or financial
advisory, investment banking, underwriting and similar services (including
legal, accounting and consulting costs) to the extent relating to any offering
of debt, Equity Interests, Investments, acquisitions, divestitures or
discontinuations, in each case permitted hereunder (including, for the
avoidance of doubt, fees, expenses and charges in connection with the
Transactions), in each case, whether or not consummated and (xii) intellectual
property royalties to the extent received in cash
,
minus
(b)
without duplication and to the extent included in determining net income, the
sum of (i) any cash payments for Facility Closings and Severance Expenses paid
after April 4, 2014 in excess of 20% of EBITDA (calculated without giving
effect to this
clause
(b)(i)
for such period) for the most recent twelve (12) calendar month period then
ended on such date of determination, (ii) any extraordinary gains and non-cash
items of income during such period (calculated on an "after-tax" basis and in
accordance with GAAP), (iii) any gains for the sale of discontinued
operations, (iv) any gains on business dispositions or asset dispositions
(other than sales of inventory in the ordinary course of business) and (v) any
cash payments made in respect of non-cash charges described in
clause (a)(v)
taken in a prior period; in each case of
clauses (a)
and
(b)
, determined on a consolidated basis in accordance with GAAP. For purposes of
the computation of the Fixed Charge Coverage Ratio, EBITDA for any period
shall be calculated on a Pro Forma Basis to give effect to (i) any Person or
business acquired during such period pursuant to an acquisition permitted
hereby and not subsequently sold or otherwise disposed of by Holdings or any
of its Restricted Subsidiaries during such period and (ii) any Subsidiary or
business disposed of during such period by Holdings or any of its Restricted
Subsidiaries.
"
EEA Financial Institution
": (a) any credit institution or investment firm established in any EEA Member
Country which is subject to the supervision of an EEA Resolution Authority,
(b) any entity established in an EEA Member Country which is a parent of an
institution described in clause (a) of this definition, or (c) any financial
institution established in an EEA Member Country which is a subsidiary of an
institution described in clauses (a) or (b) of this definition and is subject
to consolidated supervision with its parent.
"
EEA Member Country
": any of the member states of the European Union, Iceland, Liechtenstein, and
Norway.
"
EEA Resolution Authority
": any public administrative authority or any Person entrusted with public
administrative authority of any EEA Member Country (including any delegee)
having responsibility for the resolution of any EEA Financial Institution.
"Electronic Copy": as defined in
Section 14.8
.
-24-
AmericasActive:19663285.13
-------------------------------------------------------------------------------
"Electronic Record" and "Electronic Signature": as defined in 15 U.S.C. (s)7006.
"
Eligible Account
": as determined separately for (x) the Canadian Borrower and (y) the U.S.
Borrower, an Account owing to the U.S. Borrower or the Canadian Borrower (or a
member of its respective Applicable Loan Party Group) that arises in the
ordinary course of business of such Borrower (or a member of its respective
Applicable Loan Party Group) from the sale of goods or rendition of services,
is payable in Dollars, Canadian Dollars or Mexican Pesos, and that is deemed
by Agent in its Permitted Discretion to be an Eligible Account. Without
limiting the foregoing, no Account shall be an Eligible Account if:
(a) it is unpaid for more than sixty (60) days after the original due date,
or more than ninety (90) days after the original invoice date;
(b) fifty percent (50%) or more of the Dollar Equivalent amount of all
Accounts owing to such Borrower (or a member of its Applicable Loan Party
Group) by the Account Debtor are not Eligible Accounts under the foregoing
clause (a);
(c) except as set forth in clause (d) below, when aggregated with other
Accounts owing to such Borrower (or a member of its Applicable Loan Party
Group) by the Account Debtor, it exceeds ten percent (10%)
of the aggregate Eligible Accounts (or such higher percentage as Agent may
establish for the Account Debtor from time to time) of each such Borrower (or
a member of its Applicable Loan Party Group);
(d) when aggregated with other Accounts owing to the Loan Parties by the
relevant Account Debtor or any of its respective Affiliates, it exceeds (i)
twenty percent (20%) in the case of Chrysler Group, LLC, (ii) 40% in the case
of General Motors Corporation and (iii) forty percent (40%) in the case of
Ford Motor Company, in each case, of the aggregate Eligible Accounts (or such
higher percentage as the Required Lenders may establish for the Account Debtor
from time to time) of the Loan Parties;
(e) it does not conform in any material respect with a covenant or
representation herein;
(f) it is owing by a creditor or supplier who has not entered into an
agreement reasonably satisfactory to Agent waiving applicable rights of
set-off, or is otherwise reasonably determined to be subject to a potential
offset, counterclaim, dispute, deduction, discount, recoupment, reserve,
defense, chargeback, credit or allowance (but ineligibility shall be limited
to the amount thereof), including, without limitation, liabilities related to
the "Ford Electronic Raw Material Acquisition Program" and allowances for long
term agreements;
(g) an Insolvency Proceeding has been commenced by or against the Account
Debtor; or the Account Debtor has failed, has suspended or ceased doing
business, is liquidating, dissolving or winding up its affairs, is not
Solvent, or is subject to Sanctions or any specially designated nationals list
maintained by OFAC; or such Borrower (or a member of its Applicable Loan Party
Group) is not able to bring suit or enforce remedies against the Account
Debtor through judicial process (unless such Account is guaranteed or
supported by a guarantor or support provider reasonably acceptable to Agent,
on such terms as are reasonably acceptable to Agent);
-25-
AmericasActive:19663285.13
-------------------------------------------------------------------------------
(h) the Account Debtor is organized or has its principal offices outside
the United States or Canada, unless (i) such Account is contracted with the
United States or Canada (as applicable) operations of such entity or (ii) the
United States or Canada (as applicable) operations of such entity are
responsible for payment thereof;
(i) it is owing by a Governmental Authority, unless in the case of the
Accounts of the U.S. Borrower or any other U.S. Facility Loan Party, the
Account Debtor is the United States or any department, agency or instrumentality
thereof and the Account has been assigned to Agent in compliance with the
Assignment of Claims Act or, in the case of any Canadian Domiciled Loan Party,
the Account Debtor is the federal government of Canada or any Crown
corporation, department, agency or instrumentality of Canada and the
applicable Canadian Domiciled Loan Party
has complied, to the satisfaction of Agent, with the Financial Administration
Act;
(j) it is not subject to a duly perfected, first priority Lien in favor of
Agent, or is subject to any other Lien except a Permitted Collateral Lien;
(k) the goods giving rise to it have not been delivered to and accepted by
the Account Debtor, the services giving rise to it have not been accepted by
the Account Debtor, or it otherwise does not represent a final sale;
(l) it is evidenced by Chattel Paper or an Instrument of any kind, or has
been reduced to judgment;
(m) its payment has been extended beyond the periods specified in clause
(a) above, the Account Debtor has made a partial payment, or it arises from a
sale on a cash-on-delivery basis;
(n) it arises from a sale to an Affiliate, from a sale on a bill-and-hold,
guaranteed sale, sale-or-return, sale-on-approval, consignment, or other
repurchase or return basis, or from a sale to a Person for personal, family or
household purposes;
(o) (A) the agreements evidencing such Accounts, in the case of Accounts of
the U.S. Borrower or any other U.S. Facility Loan Party, are not governed by
the laws of any state of the United States or the District of Columbia or
Canada or any province or territory of Canada and (B) the agreements
evidencing such Accounts, in the case of Accounts of any Canadian Domiciled
Loan Party, are not governed by the laws of Canada or any province or
territory of Canada, any state of the United States or the District of
Columbia, or the laws of such other jurisdictions acceptable to Agent;
(p) it represents a progress billing or retainage, or relates to services
for which a performance, surety or completion bond or similar assurance has
been issued;
(q) it includes a billing for interest, fees or late charges, but
ineligibility shall be limited to the extent thereof. In calculating
delinquent portions of Accounts under
clauses (a)
and
(b)
, credit balances more than ninety (90) days old will be excluded;
(r) it arises from sales of tooling (other than Eligible Tooling Accounts);
-26-
AmericasActive:19663285.13
-------------------------------------------------------------------------------
(s) it is owing by NISCO or Nishikawa Rubber Company and the aggregate
amount of all such Eligible Accounts do not exceed $5,000,000; or
(t) it is otherwise unacceptable to Agent in its Permitted Discretion.
"
Eligible Assignee
": a Person that is (i) a Lender or a U.S. based Affiliate of a U.S. Lender,
(ii) if such Person is to hold U.S. Facility Obligations, an Approved Fund;
(iii) if such Person is to hold Canadian Facility Obligations, a Canadian
Qualified Lender and a U.S. Lender or an Affiliate of a U.S. Lender; (iv) a
financial institution approved by (x) Agent and Issuing Bank in their
reasonable discretion and (y) Loan Party Agent (which approval by Loan Party
Agent shall not be unreasonably withheld or delayed, and shall be deemed given
if no objection is made within five (5) Business Days after notice of the
proposed assignment), that has total assets in excess of $5,000,000,000 and
whose becoming an assignee would not constitute a prohibited transaction under
Section 4975 of the Code or any other applicable Law; and (v) during the
continuance of an Event of Default, any Person acceptable to Agent in its
discretion (excluding any Loan Party or Affiliate thereof).
"
Eligible Inventory
": as determined separately for (x) the Canadian Borrower and (y) the U.S.
Borrower, Inventory owned by the U.S. Borrower or the Canadian Borrower (or a
member of its respective Applicable Loan Party Group) that Agent, in its
Permitted Discretion deems to be Eligible Inventory. Without limiting the
foregoing, no Inventory shall be Eligible Inventory unless it:
(a) is not packaging or shipping materials, labels, samples, display items,
bags, replacement parts or manufacturing supplies;
(b) is not held on consignment, nor subject to any deposit or downpayment;
(c) is in new and saleable condition and is not damaged, defective,
shopworn or otherwise unfit for sale;
(d) is not slow-moving, obsolete or unmerchantable, and does not constitute
returned or repossessed goods;
(e) meets all standards imposed by any Governmental Authority in all
material respects and has not been acquired from an entity subject to
Sanctions or any specifically designated nationals list maintained by OFAC;
(f) conforms in all material respects with the covenants and representations
herein;
(g) is subject to Agent's duly perfected, first priority Lien, and no other
Lien except a Permitted Collateral Lien;
(h) is located within the continental United States, in the case of
Inventory of the U.S. Borrower or any other U.S. Facility Loan Party, or
within Canada, in the case of Inventory of any Canadian Domiciled Loan Party,
and is not consigned to any Person;
(i) is not in transit (other than, in the case of Inventory of the U.S.
Borrower or any other U.S. Facility Loan Party, in transit between facilities
of the U.S. Facility Loan Parties or from facilities
-27-
AmericasActive:19663285.13
-------------------------------------------------------------------------------
of the Canadian Domiciled Loan Parties or, in the case of Inventory of any
Canadian Domiciled Loan Party in transit between facilities of the Canadian
Domiciled Loan Parties or from facilities of U.S. Facility Loan Parties);
(j) is not subject to any (i) warehouse receipt unless the warehouseman has
delivered a Collateral Access Agreement or with respect to which an
appropriate U.S. Rent and Charges Reserve or Canadian Rent and Charges Reserve
has been established or (ii) negotiable Document;
(k) is not subject to any License or other arrangement that restricts such
Borrower's or Agent's right to dispose of such Inventory, unless Agent has
received an appropriate Collateral Access Agreement;
(l) is not located on leased premises or in the possession of a
warehouseman, repairman, mechanic, shipper, freight forwarder or other Person,
unless the lessor or such Person has delivered a Collateral Access Agreement
or with respect to which an appropriate U.S. Rent and Charges Reserve or
Canadian Rent and Charges Reserve has been established;
(m) is not located on leased premises (unless a Collateral Access Agreement
has been obtained with respect to such premises) or in the possession of a
processor;
(n) is reflected in the details of a current perpetual inventory report;
(o) does not constitute the portion of the cost of such Inventory which is
attributable to intercompany profit; and
(p) does not constitute lower cost, market adjustment or reserves.
"
Eligible Tooling Account
": as determined separately for (x) the Canadian Borrower and (y) the U.S.
Borrower, an Account (a) that would qualify as an Eligible Account but for the
fact that it arose from the sale of tooling; (b) that has been billed for
fully completed tooling in accordance with the underlying purchase order for
the tooling and consistent with the applicable Borrower's customary billing
practices; (c) for which all tooling related to those Accounts has met all
Production Part Approval Process requirements and all other required
approvals, in each case in all material respects; (d) for which there are no
conditions to payment of the Accounts; (e) that has not been sold pursuant to
a Permitted Receivables Financing, and (f) for which there are no Liens on any
of the tooling to which the Accounts relate (other than (x) in Agent's favor
and (y) second priority Liens in Fixed Asset Facility Collateral Agent's favor
or other Permitted Collateral Liens).
"
EMU Legislation
": the legislative measures of the European Union for the introduction of,
changeover to or operation of the Euro in one or more member states of the
European Union.
"
Enforcement Action
": any action to enforce any Obligations (other than Secured Bank Product
Obligations) or Loan Documents or to realize upon any Collateral (whether by
judicial action, self-help, notification of Account Debtors, exercise of
setoff or recoupment, or otherwise).
"
Environment
": ambient air, indoor air, surface water, groundwater, drinking water, land
surface and subsurface strata and natural resources such as wetlands, flora
and fauna.
-28-
AmericasActive:19663285.13
-------------------------------------------------------------------------------
"
Environmental Claim
": any investigation, notice, notice of violation or of potential
responsibility, claim, action, suit, proceeding, demand, abatement order or
other order or directive (conditional or otherwise), by any Governmental
Authority or any other Person, arising (i) pursuant to or in connection with
any actual or alleged violation of any Environmental Law; (ii) in connection
with any Hazardous Material; or (iii) in connection with any actual or alleged
damage, injury, threat or harm to health, safety, natural resources or the
environment.
"
Environmental Laws
": any and all applicable current or future federal, state, provincial,
territorial, local and foreign statutes, laws, including common law,
regulations or ordinances, rules, judgments, orders, decrees, permits licenses
or restrictions imposed by a Governmental Authority relating to pollution, the
protection of the Environment and the protection of human health (to the
extent relating to exposure to Hazardous Materials), including those relating
to the generation, use, handling, storage, transportation, treatment or
Release or threat of Release of Hazardous Materials.
"
Environmental Liability
": any liability, contingent or otherwise (including any liability for
damages, costs of investigation or remediation, fines, penalties or
indemnities), of Holdings, any other Loan Party or any of their respective
Subsidiaries 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 or (e) any contract, agreement or other binding consensual
arrangement pursuant to which liability is assumed or imposed with respect to
any of the foregoing.
"
Environmental Permit
": any permit, approval, identification number, license or other authorization
required under any Environmental Law.
"
Equity Interests
": Capital Stock and all warrants, options or other rights to acquire Capital
Stock (but excluding any debt security that is convertible into, or
exchangeable for, Capital Stock).
"
Equity Offering
": any public or private sale after April 4, 2014 of capital stock or
Preferred Stock of Holdings or any Parent Entity or any direct or indirect
parent of Holdings, as applicable (other than Disqualified Stock), other than:
(1) public offerings with respect to Holdings' or such Parent Entity's
common stock registered on Form S-8; and
(2) any such public or private sale that constitutes an Excluded
Contribution or Refunding Capital Stock.
"
ERISA
": the Employee Retirement Income Security Act of 1974, and the rules and
regulations thereunder, each as amended or modified from time to time.
"
ERISA Affiliate
": as applied to any Person, (i) any corporation which is a member of a
controlled group of corporations within the meaning of Section 414(b) of the
Code of which that Person is a member; (ii) any trade or business (whether or
not incorporated) which is a member of a group of trades or businesses under
common control within the meaning of Section 414(c) of the Code of which that
Person is a member; and (iii) any member of an affiliated service group within
the meaning of
-29-
AmericasActive:19663285.13
-------------------------------------------------------------------------------
Section 414(m) or (o) of the Code of which that Person, any corporation
described in clause (i) above or any trade or business described in clause
(ii) above is a member.
"
ERISA Event
": (a) a Reportable Event with respect to a Pension Plan; (b) a withdrawal by
Holdings, any Subsidiary or any ERISA Affiliate from a Pension Plan subject to
Section 4063 of ERISA during a plan year in which it was a substantial
employer (as defined in Section 4001(a)(2) of ERISA) or a cessation of
operations that is treated as such a withdrawal under Section 4062(e) of
ERISA; (c) a complete or partial withdrawal by Holdings, any Subsidiary or any
ERISA Affiliate from a Multiemployer Plan or notification that a Multiemployer
Plan is insolvent (within the meaning of Title IV of ERISA) or in "endangered"
or "critical" status (within the meaning of Section 432 of the Code or Section
305 of ERISA); (d) the filing of a notice of intent to terminate, or the
commencement of proceedings by the PBGC to terminate, a Pension Plan or
Multiemployer Plan; (e) an event or condition which constitutes grounds under
Section 4042 of ERISA for the termination of, or the appointment of a trustee
to administer, any Pension Plan or Multiemployer Plan; (f) with respect to a
Pension Plan, the failure to satisfy the minimum funding standard of Section
412 of the Code or Section 302 of ERISA, whether or not waived; (g) the
failure to make by its due date a required contribution under Section 430(j)
of the Code with respect to any Pension Plan or the failure to make any
required contribution to a Multiemployer Plan; (h) the imposition of any
liability under Title IV of ERISA, other than for PBGC premiums due but not
delinquent, upon Holdings, any Subsidiary or any ERISA Affiliate or (i) the
occurrence of a nonexempt prohibited transaction (within the meaning of
Section 4975 of the Code or Section 406 of ERISA) which could result in
liability to Holdings or any Subsidiary.
"
EU Bail-In Legislation Schedule
": the EU Bail-In Legislation Schedule published by the Loan Market
Association (or any successor person), as in effect from time to time.
"
Euro
" or "
": the single lawful currency of the European Union as constituted by the
treaty establishing the European Community being the Treaty of Rome, as
amended from time to time and as referred to in the EMU Legislation.
"
Event of Default
": as defined in
Section 11
.
"
Excess Amount
": as defined in
Section 5.12
.
"
Exchange Rate
": on any date, (i) with respect to Canadian Dollars in relation to Dollars,
the spot rate as quoted by Bank of America as its noon spot rate at which
Dollars are offered on such date for Canadian Dollars, (ii) with respect to
Dollars in relation to Canadian Dollars, the spot rate as quoted by Bank of
America as its noon spot rate at which Canadian Dollars are offered on such
date for Dollars, (iii) with respect to Euros in relation to Dollars, the spot
rate as quoted by Bank of America as its noon spot rate at which Dollars are
offered on such date for Euros, (iv) with respect to Dollars in relation to
Euros, the spot rate as quoted by Bank of America as its noon spot rate at
which Euros are offered on such date for Dollars, (v) with respect to Sterling
in relation to Dollars, the spot rate as quoted by Bank of America as its noon
spot rate at which Dollars are offered on such date for Sterling and (vi) with
respect to Dollars in relation to Sterling, the spot rate as quoted by Bank of
America as its noon spot rate at which Sterling are offered on such date for
Dollars.
"
Excluded Contributions
": means the net cash proceeds and Cash Equivalents received by Holdings after
April 4, 2014 from:
-30-
AmericasActive:19663285.13
-------------------------------------------------------------------------------
(1) contributions to its common equity capital, and
(2) the sale of Capital Stock (other than Excluded Equity) of Holdings,
in each case designated as Excluded Contributions pursuant to an Officer's
Certificate executed by an Officer of Holdings, the proceeds of which are
excluded from the calculation set forth in
Section 10.2.3(a)(3)
.
"
Excluded Deposit Accounts
": as defined in the Pledge and Security Agreement and the Canadian Security
Agreement.
"
Excluded Equity
": (i) Disqualified Stock, (ii) any Equity Interests issued or sold to a
Restricted Subsidiary of Holdings or any employee stock ownership plan or
trust established by Holdings or any of its Subsidiaries (to the extent such
employee stock ownership plan or trust has been funded by Holdings or any
Restricted Subsidiary) and (iii) any Equity Interest that has already been
used or designated as (or the proceeds of which have been used or designated
as) Cash Contribution Amount, Designated Preferred Stock, Excluded
Contribution or Refunding Capital Stock, to increase the amount available under
Section 10.2.3(b)(vi)(A)
or
clause (14)
of the definition of "Permitted Investments."
"
Excluded Subsidiary
": any Subsidiary that is (a) a Foreign Subsidiary, other than a Canadian
Subsidiary (with respect to any Guarantee of Obligations of the Canadian
Borrower) or a Specified Jurisdiction Guarantor, that is a CFC or any
Subsidiary of a CFC, (b) an Unrestricted Subsidiary, (c) not wholly owned
directly by Holdings or one or more of its wholly owned Restricted
Subsidiaries, (d) an Immaterial Subsidiary, (e) a charitable Subsidiary, (f)
any Subsidiary that is prohibited by applicable law, rule or regulation or by
any Contractual Obligation existing on the First Amendment Effective Date and
not entered into in contemplation hereof from guaranteeing the Obligations or
which would require governmental and/or regulatory consent, approval, license
or authorization to provide such guarantee, unless such consent, approval,
license or authorization has been received, or which would result in adverse
tax consequences to Holdings and/or any of its Subsidiaries as reasonably
determined by Holdings, (g) any Receivables Subsidiary, (h) any Subsidiary
that is created solely for the purpose of consummating a transaction pursuant
to an acquisition permitted hereunder, if such new Subsidiary at no time holds
any assets or liabilities other than any merger consideration contributed to
it contemporaneously with the closing of such transactions,
provided
that such Subsidiary shall only be an Excluded Subsidiary for the period
immediately prior to such acquisition and (i) any Subsidiary that has no
material assets other than the Capital Stock of CFCs. Notwithstanding anything
to the contrary herein, no Subsidiary shall be an Excluded Subsidiary if such
Subsidiary provides a guaranty or security interest as credit support for the
First Lien Notes, Senior Secured Notes or any other Fixed Asset Facility.
"
Excluded Swap Obligation
": with respect to any Loan Party, each Swap Obligation as to which, and only
to the extent that, a Loan Party's guaranty of or grant of a Lien as security
for such Swap Obligation is or becomes illegal under the Commodity Exchange
Act because such Loan Party does not constitute an "eligible contract
participant" as defined in the act (determined after giving effect to
Section 5.10
and any other keepwell, support or other agreement for the benefit of such
Loan Party, and all guarantees of Swap Obligations by other Loan Parties) when
such guaranty or grant of Lien becomes effective with respect to the Swap
Obligation. If a Hedging Agreement governs more than one Swap
-31-
AmericasActive:19663285.13
-------------------------------------------------------------------------------
Obligation, only the Swap Obligation(s) or portions thereof described in the
foregoing sentence shall be Excluded Swap Obligation(s).
"
Excluded Tax
": any of the following Taxes imposed on or with respect to a Recipient or
required to be withheld or deducted from a payment to a Recipient, (a) Taxes
imposed on or measured by net income or net profits (however denominated),
franchise Taxes, and branch profits Taxes, in each case, (i) imposed as a
result of such Recipient being organized under the laws of, or having its
principal office or, in the case of any Lender, its applicable lending office
located in, the jurisdiction imposing such Tax (or any political subdivision
thereof) or (ii) that are Other Connection Taxes, (b) in the case of a Lender,
U.S. federal withholding Taxes imposed on amounts payable to or for the
account of such Lender with respect to an applicable interest in a Loan or
Commitment pursuant to a law in effect on the date on which (i) such Lender
acquires such interest in the Loan or Commitment (other than pursuant to an
assignment request by the Borrowers under
Section 12.10
) or (ii) such Lender changes its lending office, except in each case to the
extent that, pursuant to
Section 5.8
, amounts with respect to such Taxes were payable either to such Lender's
assignor immediately before such Lender became a party hereto or to such
Lender immediately before it changed its lending office, (c) Taxes
attributable to such Recipient's failure to comply with
Section 5.9
, (d) any U.S. federal withholding Taxes imposed under FATCA and (e) any Tax
that is imposed pursuant to Dutch Withholding Tax Act 2021 (
Wet bronbelasting 2021
) as in effect on the date hereof. Notwithstanding the foregoing, United
States withholding Taxes shall not be "Excluded Taxes" if such withholding
Taxes arise on or after the implementation of the transactions contemplated by
the Reallocation Agreement.
"
Existing Letters of Credit
": means the letters of credit set forth on
Schedule 1.1(c)
.
"
Existing Loan Agreement
": as defined in the Recitals to this Agreement.
"
Extraordinary Expenses
": all costs, expenses or advances that Agent may incur during a Default or
Event of Default, or during the pendency of an Insolvency Proceeding of a Loan
Party, including those relating to (a) any audit, inspection, repossession,
storage, repair, appraisal, insurance, manufacture, preparation or advertising
for sale, sale, collection, or other preservation of or realization upon any
Collateral; (b) any action, arbitration or other proceeding (whether
instituted by or against Agent, any Lender, any Loan Party, any representative
of creditors of a Loan Party or any other Person) in any way relating to any
Collateral (including the validity, perfection, priority or avoidability of
Agent's Liens with respect to any Collateral), Loan Documents, Letters of
Credit or Obligations, including any lender liability or other Claims; (c) the
exercise, protection or enforcement of any rights or remedies of Agent in, or
the monitoring of, any Insolvency Proceeding; (d) settlement or satisfaction
of any taxes, charges or Liens with respect to any Collateral; (e) any
Enforcement Action; (f) negotiation and documentation of any modification,
waiver, workout, restructuring or forbearance with respect to any Loan
Documents or Obligations; and (g) Protective Advances. Such costs, expenses
and advances include transfer fees, Other Taxes, storage fees, insurance
costs, permit fees, utility reservation and standby fees, legal fees,
appraisal fees, brokers' fees and commissions, auctioneers' fees and
commissions, accountants' fees, environmental consultants' fees, wages and
salaries paid to employees of any Loan Party or independent contractors in
liquidating any Collateral, and travel expenses.
"
Facility Commitment
": with respect to the commitment of a U.S. Lender, its U.S. Revolver
Commitment and, with respect to a Canadian Lender, its Canadian Revolver
Commitment; and the term
-32-
AmericasActive:19663285.13
-------------------------------------------------------------------------------
"
Facility Commitments
" means, collectively, the Facility Commitments of U.S. Lenders and the
Facility Commitments of Canadian Lenders. To the extent any Lender has both a
U.S. Revolver Commitment and a Canadian Revolver Commitment, such Commitments
shall be considered as separate Commitments for purposes of this definition.
"
Facility Commitment Increase Effective Date
": as defined in
Section 2.1.4(f)
.
"
Facility Termination Date
":
(a) solely with respect to the Non-Extending Lender,
the earlier of (
a
i
) March 24, 2025 and (
b
ii) the date 91 days prior to the maturity date of the Fixed Asset Facility
and (b) with respect to each Lender other than the Non-Extending Lender (but,
for the avoidance of doubt, this clause (b) shall include any Lender that is
assigned the Commitments of such Non-Extending Lender in accordance with the
terms hereof, including without limitation pursuant to
Section 12.10
), the earlier of (i) May 6, 2029 and (ii
) the date 91 days prior to the maturity date of the Fixed Asset Facility.
"
Fair Market Value
": with respect to any asset or property, the price which could be negotiated
in an arm's-length, free market transaction, for cash, between a willing
seller and a willing and able buyer, neither of whom is under undue pressure
or compulsion to complete the transaction (as determined in good faith by the
Loan Party Agent).
"
FATCA
": Sections 1471 through 1474 of the Code (including any agreements entered
into pursuant to Section 1474(b)(1) 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), any current or
future regulations or official interpretations thereof, any current or future
regulations or official interpretations thereof, any intergovernmental
agreements between a non-U.S. jurisdiction and the United States with respect
to the foregoing, and any related laws, rules or regulations adopted pursuant
to or to implement any of the foregoing.
"
Federal Funds Rate
":
(a)
for any day,
the
weighted average
per annum
interest
rate
on overnight
calculated by FRBNY based on such day's
federal funds transactions
with members of the Federal Reserve System on the applicable day (or the
preceding Business Day, if the applicable day is not a Business Day), as
published by the Federal Reserve Bank of New York
by depository institutions (as determined in such manner as FRBNY shall set
forth on its public website from time to time) and published
on the next Business Day
; or (b)
if the rate is not
so published, the average per annum rate (rounded up to the nearest 1/8 of 1%)
charged to Bank of America on the applicable day on such transactions, as
determined by Agent
by FRBNY as the federal funds effective rate
;
provided
, that in no event shall the Federal Funds Rate be less than zero.
"
FILO Credit Facility
": as defined in
Section 2.4(a)
.
"
FILO Credit Facility Amendment
": as defined in
Section 2.4(c)
.
"
FILO Credit Facility Loan
": as defined in
Section 2.4(a)
.
"
FILO Lenders
": as defined in
Section 2.4(a).
"
Financial Administration Act
": Financial Administration Act (
Canada
) and all regulations and schedules thereunder.
-33-
AmericasActive:19663285.13
-------------------------------------------------------------------------------
"
Financial Covenant Trigger Period
": the period (a) commencing on the day that an Event of Default occurs, or
Average Period Availability (for a one-day period) is less than the greater of
(i) $15,000,000 and (ii) 10% of the Borrowing Base; and (b) continuing until,
during the preceding thirty (30) consecutive days, no Event of Default has
existed and Average Period Availability has been greater than the greater of
(i) $15,000,000 and (ii) 10% of the Borrowing Base.
"
First Amendment
": that certain Amendment No. 1 to Third Amended and Restated Loan Agreement
dated as of the First Amendment Effective Date by and among the Loan Parties
party thereto, Agent and the Lenders party thereto.
"
First Amendment Effective Date
": March 24, 2020.
"
First Lien Notes
": the 13.50% Cash Pay / PIK Toggle Senior Secured First Lien Notes due 2027,
to be issued on the Third Amendment Effective Date in an initial aggregate
principal amount of $580,000,000 pursuant to the First Lien Notes Indenture.
"
First Lien Notes Indenture
": that certain indenture, dated as of the Third Amendment Effective Date, by
and among the U.S. Borrower, as issuer, the guarantors party thereto and U.S.
Bank Trust Company, National Association, as trustee and collateral agent,
with respect to the First Lien Notes.
"
Fixed Asset Fixed Charge Coverage Ratio
": the "Fixed Charge Coverage Ratio" as defined in the agreement governing the
Fixed Asset Facility as such agreement is in effect on the date hereof, or if
entered into after the date hereof, on the date such agreement is entered into
in accordance with the terms hereof.
"
Fixed Asset Facility Pro Forma Basis
: with respect to the incurrence of any applicable Indebtedness under this
Agreement, the incurrence of such Indebtedness on a "pro forma basis" as
described in the applicable agreement governing the Fixed Asset Facility as
such agreement is in effect on the date hereof, or if entered into after the
date hereof, on the date such agreement is entered into in accordance with the
terms hereof.
"
Fixed Asset Facility
": (i) the First Lien Notes issued under the First Lien Notes Indenture, as
amended, restated, supplemented, waived, replaced (whether or not upon
termination, and whether with the original lenders or otherwise),
restructured, repaid, refunded, refinanced or otherwise modified from time to
time, including any agreement or indenture extending the maturity thereof,
refinancing, replacing or otherwise restructuring all or any portion of the
Indebtedness thereunder or agreements or indenture or indentures or any
successor or replacement facility or indenture or indentures or increasing the
amount loaned or issued thereunder or altering the maturity thereof, and (ii)
whether or not the First Lien Notes referred to in clause (i) remain
outstanding, if designated by Holdings to be included in the definition of
"Fixed Asset Facility," one or more (A) debt facilities, indentures or
commercial paper facilities providing for revolving credit loans, term loans,
notes, debentures, receivables financing (including through the sale of
receivables to lenders or to special purpose entities formed to borrow from
lenders against such receivables) or letters of credit, (B) debt securities,
indentures or other forms of debt financing (including convertible or
exchangeable debt instruments or bank guarantees or bankers' acceptances), or
(C) instruments or agreements evidencing any other Indebtedness, in each case,
with the same or different issuers or borrowers and, in each case, as amended,
supplemented, modified, extended, restructured, renewed, refinanced, restated,
increased, replaced or refunded in whole or in part from time
-34-
AmericasActive:19663285.13
-------------------------------------------------------------------------------
to time; provided, that any Fixed Asset Facility shall be subject to the
Intercreditor Agreement, and any amendment, supplement, modification,
extension, restructuring, renewal, refinancing, restatement, increase,
replacement or refunding thereto shall be permitted by the Intercreditor
Agreement.
"
Fixed Asset Facility Collateral Agent
": the collateral agent (or the administrative agent in similar capacity) with
respect to the Fixed Asset Facility.
"Fixed Asset Facility Pro Forma Basis
"
: with respect to the incurrence of any applicable Indebtedness under this
Agreement, the incurrence of such Indebtedness on a "pro forma basis" as
described in the applicable agreement governing the Fixed Asset Facility as
such agreement is in effect on the date hereof, or if entered into after the
date hereof, on the date such agreement is entered into in accordance with the
terms hereof.
"
Fixed Asset Priority Collateral
": as defined in the Intercreditor Agreement.
"
Fixed Charge Coverage Ratio
": for Parent and its Restricted Subsidiaries on any date of determination,
the ratio, determined on a consolidated basis for the most recent twelve (12)
calendar month period then ended on such date of determination, of (a) EBITDA
minus
Capital Expenditures (except those financed with Borrowed Money other than
Revolver Loans), and cash taxes paid (net of cash tax refunds received during
such period), in each case during such period to (b) Fixed Charges during such
period.
"
Fixed Charge Coverage Ratio Test Period
": with respect to each calendar month, the immediately preceding twelve (12)
calendar month period ending on the last day of the prior calendar month.
"
Fixed Charges
": for any period and for Parent and its Restricted Subsidiaries on a
consolidated basis included in any applicable calculation of Fixed Charge
Coverage Ratio, the sum of (calculated on a consolidated basis solely with
respect to those Persons specified to be included in such calculation),
without duplication:
(a) cash interest expense (net of any interest income);
(b) Receivables Fees;
(c) scheduled principal payments in respect of Borrowed Money, as
determined on the first day of the applicable period (or if such Indebtedness
was incurred on a subsequent date, on such date); but excluding, for the
avoidance of doubt, (i) payments made on Revolver Loans and Swingline Loans
during such period and (ii) voluntary and mandatory prepayments of other
Indebtedness permitted by this Agreement;
(d) all regularly scheduled Distributions made by Holdings in cash
(including without limitation any regularly scheduled Distributions to a
Parent Entity to meet the debt service obligations of such Parent Entity); and
-35-
AmericasActive:19663285.13
-------------------------------------------------------------------------------
(e) mandatory cash contributions made to any Pension Plan
less
(without duplication) the profit and loss statement charge (or benefit with
respect to such pension funding obligations for such period).
"
Floating Rate Loan
": a U.S. Base Rate Loan, a Canadian Prime Rate Loan or a Canadian Base Rate
Loan, as the context requires.
"
FLSA
": the Fair Labor Standards Act of 1938.
"
Foreign Collateral
": the ABL Priority Collateral of any Loan Party that is a Foreign Subsidiary.
"
Foreign Government Scheme or Arrangement
": as defined in
Section 9.1.18(d).
"
Foreign Plan
": as defined in
Section 9.1.18(d)
.
"
Foreign Plan Event
": (i) the failure of Holdings or any of its Restricted Subsidiaries to make
its required contributions in respect of any Foreign Plan; (ii) the failure of
Holdings or any of its Restricted Subsidiaries to administer any Foreign Plan
in accordance with its terms and all applicable laws; (iii) the occurrence of
an act or omission in respect of any Foreign Plan which could give rise to the
imposition on Holdings or any of its Restricted Subsidiaries of fines,
penalties or related charges under applicable laws; (iv) the assertion of a
material claim (other than a routine claim for benefits) against Holdings or
any of its Restricted Subsidiaries in respect of a Foreign Plan; (v) the
imposition of a Lien in respect of any Foreign Plan; or (vi) any event or
condition which might constitute grounds for termination, in whole or in part,
of any Foreign Plan or the appointment of a trustee to administer any Foreign
Plan.
"
Foreign Subsidiary
": a Restricted Subsidiary not organized or existing under the laws of the
United States of America, any state thereof or the District of Columbia
thereof and any direct or indirect Subsidiary of such Restricted Subsidiary.
"Fourth Amendment": that certain Amendment No. 4 to Third Amended and Restated
Loan Agreement dated as of May 6, 2024, by and among the Loan Parties party
thereto, Agent and the Lenders party thereto.
"Fourth Amendment Effective Date": as defined in the Fourth Amendment.
"
FRB
": the Board of Governors of the Federal Reserve System of the United States.
"FRBNY": the
Federal Reserve Bank of New York
.
"
Fronting Exposure
": a Defaulting Lender's interest in LC Obligations, Swingline Loans and
Protective Advances, except to the extent allocated to other Lenders under
Section 4.2
or, in the case of LC Obligations, Cash Collateralized by the Defaulting Lender.
"
FSCO
": The Financial Services Commission of Ontario or like body in any other
province of Canada with whom a Canadian Pension Plan is registered in
accordance with applicable Law and any other Governmental Authority succeeding
to the functions thereof.
-36-
AmericasActive:19663285.13
-------------------------------------------------------------------------------
"
Full Payment
": with respect to any Obligations (other than indemnity obligations that are
not currently due and payable): (a) the full and indefeasible cash payment
thereof in the applicable currency required hereunder, including any interest,
fees and other charges accruing during an Insolvency Proceeding (whether or
not allowed in the proceeding) and (b) if such Obligations are LC Obligations
consisting of undrawn Letters of Credit, Cash Collateralization thereof (or
delivery of a standby letter of credit acceptable to Agent in its discretion,
in the amount of required Cash Collateral). No Loans shall be deemed to have
been paid in full until all Commitments related to such Loans have expired or
been terminated.
"
GAAP
": generally accepted accounting principles in effect in the United States,
from time to time, applied consistently. Notwithstanding any other provision
contained herein, the amount of any Indebtedness under GAAP with respect to
Capitalized Lease Obligations shall be determined in accordance with the
definition of Capitalized Lease Obligations.
"
General Intangibles
": as defined in the UCC (and/or with respect to any General Intangible of a
Canadian Facility Loan Party, an "intangible" as defined in the PPSA).
"
Governmental Approvals
": all authorizations, consents, approvals, licenses and exemptions of,
registrations and filings with, all Governmental Authorities.
"
Governmental Authority
": any federal, state, providence, local, foreign or other agency, authority,
body, commission, court, instrumentality, political subdivision, central bank,
or other entity or officer exercising executive, legislative, judicial,
taxing, regulatory or administrative powers or functions for any governmental,
judicial, investigative, regulatory or self-regulatory authority (including
the Financial Conduct Authority, the Prudential Regulation Authority and any
supra-national bodies such as the European Union or European Central Bank), in
each case whether it is or is not associated with the United States, a state,
district or territory thereof, Canada, a province or territory thereof, or the
Netherlands.
"
Government Scheme or Arrangement
": as defined in
Section 9.1.18(d)
.
"
Guarantee
": each guarantee agreement (including this Agreement and the Canadian
Facility Guarantee) executed by a Guarantor in favor of Agent guaranteeing all
or any portion of any Canadian Facility Obligation or U.S. Facility
Obligation. Unless otherwise indicated in the Loan Documents, the Guarantee
with respect to any Guarantor will commence upon the execution date of such
Person of a guaranty, guaranty supplement or similar joinder agreement
providing for its guaranteeing of the Obligations.
"Guarantor Payment": as defined in
Section 5.10.3
.
"
Guarantors
": Canadian Facility Guarantors, U.S. Facility Guarantors, the Specified
Jurisdiction Guarantors, and each other Person (if any) who guarantees payment
or performance of any Obligations.
"
Guarantor Payment
": as defined in
Section 5.10.3
.
-37-
AmericasActive:19663285.13
-------------------------------------------------------------------------------
"
Hazardous Materials
": petroleum or petroleum distillates, asbestos or asbestos-containing
materials or any other chemical, material, substance, waste, pollutant or
contaminant or compound which is regulated pursuant to any Environmental Law.
"
Hedging Agreement
": an agreement relating to any swap, cap, floor, collar, option, forward
(excluding contracts for the acquisition of raw materials in the ordinary
course of business), cross right or obligation, or combination thereof or
similar transaction, with respect to interest rate, foreign exchange,
currency, commodity, credit or equity risk.
"
Hedging Obligations
": with respect to any Person, the obligations of such Person under any
Hedging Agreement.
"
Holdings
": as defined in the Recitals to this Agreement.
"
Hypothecary Representative
": as defined in Section
12.1.1(c)
.
"
Immaterial Subsidiary
": any Subsidiary of Holdings that, as of the date of the most recent
financial statements required to be delivered pursuant to
Section 10.1.1(a)
and
(c)
, does not have assets (together with the assets of all other Immaterial
Subsidiaries) in excess of 1.5% of Consolidated Total Assets or annual
revenues of Holdings and its consolidated Subsidiaries.
"
Incremental Equivalent Debt
": has the meaning set forth in
Section 10.2.2(b)(xxxi)
.
"
Incur
": with respect to any Indebtedness or Capital Stock, issue, assume,
Guarantee, incur or otherwise become liable for such Indebtedness or Capital
Stock, as applicable;
provided
,
however
, that any Indebtedness or Capital Stock of a Person existing at the time such
Person becomes a Subsidiary (whether by merger, consolidation, acquisition or
otherwise) shall be deemed to be Incurred by such Person at the time it
becomes a Subsidiary.
"
Indebtedness
": with respect to any Person:
(1) the principal and premium (if any) of any Indebtedness of such Person,
whether or not contingent, (a) in respect of borrowed money, (b) evidenced by
bonds, notes, debentures or similar instruments or letters of credit or
bankers' acceptances (or, without duplication, reimbursement agreements in
respect thereof), (c) representing the deferred and unpaid purchase price of
any property, except (i) any such balance that constitutes a trade payable,
accrued expense or similar obligation to a trade creditor, in each case
Incurred in the ordinary course of business and (ii) any earn-out obligations
until such obligation becomes a liability on the balance sheet of such Person
in accordance with GAAP, (d) in respect of Capitalized Lease Obligations, (e)
representing any Hedging Obligations or (f) under or in respect of Permitted
Receivables Financings, if and to the extent that any of the foregoing
Indebtedness (other than letters of credit and Hedging Obligations) would
appear as a liability on a balance sheet (excluding the footnotes thereto) of
such Person prepared in accordance with GAAP;
(2) to the extent not otherwise included, any obligation of such Person to
be liable for, or to pay, as obligor, guarantor or otherwise, on the
Indebtedness of another Person (other than by endorsement of negotiable
instruments for collection in the ordinary course of business); and
-38-
AmericasActive:19663285.13
-------------------------------------------------------------------------------
(3) to the extent not otherwise included, Indebtedness of another Person
secured by a Lien on any asset owned by such Person (whether or not such
Indebtedness is assumed by such Person);
provided
,
however
, that the amount of such Indebtedness will be the lesser of: (a) the Fair
Market Value of such asset at such date of determination, and (b) the amount
of such Indebtedness of such other Person;
provided
that (i) Contingent Obligations Incurred in the ordinary course of business
and (ii) cash pooling arrangements in the ordinary course of business
consistent with past practice shall not be deemed to constitute Indebtedness.
"
Indemnified Taxes
": (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) to the extent not otherwise described in
clause (a)
, Other Taxes.
"
Indemnitees
": Agent Indemnitees, Lender Indemnitees, Issuing Bank Indemnitees and Bank of
America Indemnitees.
"
Insolvency Proceeding
": any case or proceeding or proposal commenced by or against a Person under
any state, provincial, federal or foreign law for, or any agreement of such
Person to, (a) the entry of an order for relief under the U.S. Bankruptcy
Code, or any other insolvency, debtor relief, bankruptcy, receivership, debt
adjustment law or other similar law (whether state, provincial, federal or
foreign), including the Bankruptcy and Insolvency Act (Canada) and the CCAA;
(b) the appointment of a Creditor Representative or other custodian for such
Person or any part of (i) the ABL Priority Collateral or (ii) any material
potion of its property not constituting ABL Priority Collateral; or (c) an
assignment or trust mortgage for the benefit of creditors.
"
Insurance Assignment
": each collateral assignment of insurance pursuant to which a Loan Party
assigns to Agent such Loan Party's rights under any insurance policies as
Agent deems appropriate, as security for the Obligations.
"
Intellectual Property
": all intellectual property rights and similar property of a Person,
including inventions, designs, patents, copyrights, trademarks, service marks,
trade names, domain names, trade secrets, confidential or proprietary
information, customer lists, know-how, software and databases, all embodiments
or fixations of any of the foregoing; all related documentation; all
applications and registrations thereof; and all licenses or other rights to
use, or otherwise relating to, any of the foregoing; and all books and records
relating to any of the foregoing.
"
Intellectual Property Claim
": any claim or assertion (whether in writing, by suit or otherwise) that (i)
a Loan Party's or Restricted Subsidiary's ownership, use, marketing, sale or
distribution of any Intellectual Property or other property infringes,
misappropriates, dilutes or otherwise violates another Person's Intellectual
Property or (ii) any Intellectual Property owned by a Loan Party or a
Restricted Subsidiary is invalid or unenforceable, in whole or in part.
"
Intellectual Property Security Agreement
": collectively, the patent security agreement, substantially in the form of
Exhibit C
to the Pledge and Security Agreement, the copyright security agreement,
substantially in the form of
Exhibit D
to the Pledge and Security Agreement and the trademark security agreement,
substantially in the form of
Exhibit E
to the Pledge and Security
-39-
AmericasActive:19663285.13
-------------------------------------------------------------------------------
Agreement, in each case dated as of the Third Restatement Date, together with
each intellectual property security agreement supplement executed and
delivered pursuant to Section 4.8(x) of the Pledge and Security Agreement.
"
Intercompany Subordination Agreement
": means an intercompany subordination agreement, in substantially the form of
Exhibit L
hereto, or otherwise in form and substance reasonably satisfactory to Agent.
"
Intercreditor Agreement
": means that certain intercreditor agreement, dated as of the Third Amendment
Effective Date, by and between the Agent, the Fixed Asset Facility Collateral
Agent, the collateral agent under the Senior Secured Notes Indenture,
Holdings, the U.S. Borrower, and the other grantors and parties from time to
time party thereto, providing the relative priority of the Liens in favor of
the Agent and the Fixed Asset Facility Collateral Agent in respect of ABL
Priority Collateral and Fixed Asset Priority Collateral, respectively, and
that the Liens securing the Senior Secured Notes shall be secured on a junior
priority basis to the Liens securing the Obligations and the First Lien Notes,
as may be amended, restated, supplemented or replaced, in whole or in part,
from time to time.
"
Interest Period
": as defined in
Section 3.1.4
.
"
Interest Period Loan
": a Term SOFR Loan or a
Canadian BA
Term CORRA
Rate Loan.
"
Inventory
": as defined in the UCC and the PPSA, as applicable, including all goods
intended for sale, lease, display or demonstration; all work in process; and
all raw materials, and other materials and supplies of any kind that are or
could be used in connection with the manufacture, printing, packing, shipping,
advertising, sale, lease or furnishing of such goods, or otherwise used or
consumed in a Borrower's business (but excluding equipment).
"
Inventory Reserve
": reserves established by Agent in its Permitted Discretion, to reflect
factors that may negatively impact the Value of Inventory, including change in
salability, obsolescence, seasonality, theft, shrinkage, imbalance, change in
composition or mix, markdowns and vendor chargebacks.
"
Investment Grade Securities
":
(1) securities issued or directly and fully guaranteed or insured by the
U.S. or Canadian government or any agency or instrumentality thereof (other
than Cash Equivalents) and in each case with maturities not exceeding two
years from the date of acquisition,
(2) securities that have a rating equal to or higher than Baa3 (or the
equivalent) by Moody's or BBB (or the equivalent) by S&P, or an equivalent
rating by any other nationally recognized rating agency,
(3) investments in any fund that invests at least 95% of its assets in
investments of the type described in
clauses (1)
and
(2)
which fund may also hold immaterial amounts of cash pending investment and/or
distribution, and
-40-
AmericasActive:19663285.13
-------------------------------------------------------------------------------
(4) corresponding instruments in countries other than the United States or
Canada customarily utilized for high quality investments and in each case with
maturities not exceeding two years from the date of acquisition.
"
Investments
": with respect to any Person, all investments by such Person in other Persons
(including Affiliates) in the form of loans (including Guarantees), advances
or capital contributions (excluding accounts receivable, trade credit and
advances to customers and commission, travel and similar advances to officers,
employees and consultants made in the ordinary course of business), purchases
or other acquisitions for consideration of Indebtedness, Equity Interests or
other securities issued by any other Person and investments that are required
by GAAP to be classified on the balance sheet of Holdings in the same manner
as the other investments included in this definition to the extent such
transactions involve the transfer of cash or other property. If Holdings or
any Restricted Subsidiary sells or otherwise disposes of any Equity Interests
of any Restricted Subsidiary, or any Restricted Subsidiary issues any Equity
Interests, in either case, such that, after giving effect to any such sale or
disposition, such Person is no longer a Subsidiary of Holdings shall be deemed
to have made an Investment on the date of any such sale or other disposition
equal to the Fair Market Value of the Equity Interests of and all other
Investments in such Person retained. In no event shall (i) a Guarantee of an
operating lease of Holdings or any Restricted Subsidiary or (ii) draws from
any cash pooling arrangements in the ordinary course of business consistent
with past practice be deemed an Investment. For purposes of the definition of
"Unrestricted Subsidiary" and
Section 10.2.3
:
(1) "Investments" shall include the portion (proportionate to Holdings'
equity interest in such Subsidiary) of the Fair Market Value of the net assets
of a Subsidiary of Holdings at the time that such Subsidiary is designated an
Unrestricted Subsidiary;
provided
,
however
, that upon a redesignation of such Subsidiary as a Restricted Subsidiary,
Holdings shall be deemed to continue to have a permanent "Investment" in an
Unrestricted Subsidiary equal to an amount (if positive) equal to:
(a) Holdings' "Investment" in such Subsidiary at the time of such
redesignation
less
(b) the portion (proportionate to Holdings' equity interest in such
Subsidiary) of the Fair Market Value of the net assets of such Subsidiary at
the time of such redesignation; and
(2) any property transferred to or from an Unrestricted Subsidiary shall be
valued at its Fair Market Value at the time of such transfer, in each case as
determined in good faith by the Board of Directors of Holdings.
The amount of an Investment will be determined at the time the Investment is
made and without giving effect to subsequent changes in value (determined, in
the case of any Investment made with assets of Holdings or any Restricted
Subsidiary, based on the Fair Market Value of the assets invested).
"
Investors
": any funds or accounts managed by Silver Point Capital, L.P.
"
IRS
": the United States Internal Revenue Service.
"
Issuing Bank Indemnitees
": Issuing Banks and their officers, directors, employees, Affiliates, agents
and attorneys.
-41-
AmericasActive:19663285.13
-------------------------------------------------------------------------------
"
Issuing Banks
": U.S. Issuing Bank and Canadian Issuing Bank.
"
Joint Venture
": (a) any Person which would constitute an "equity method investee" of
Holdings or any of its Subsidiaries, and (b) any Person in whom Holdings or
any of its Subsidiaries beneficially owns any Equity Interest that is not a
Subsidiary.
"
Junior Indebtedness
": Indebtedness that is either (i) unsecured and expressly subordinated to the
Obligations or (ii) secured solely by Collateral with a Lien having Junior
Lien Priority on the Collateral relative to the Obligations. For the avoidance
of doubt, Permitted Secured Debt shall not constitute Junior Indebtedness.
"
Junior Lien Priority
": relative to specified Indebtedness, having a junior Lien priority on
specified Collateral and either subject to the Intercreditor Agreement on a
basis that is no more favorable than the provisions applicable to the holders
of Permitted Secured Debt (in the case of ABL Priority Collateral) or subject
to intercreditor agreements providing holders of Indebtedness with Junior Lien
Priority at least the same rights and obligations as the holders of Permitted
Secured Debt (in the case of the ABL Priority Collateral) have pursuant to the
Intercreditor Agreement as to the specified Collateral.
"
Laws
": collectively, all applicable international, foreign, federal, state,
provincial, territorial and local statutes, statutory instruments, acts,
treaties, rules, guidelines, regulations, directives, ordinances, codes and
administrative or judicial precedents or authorities, including the
interpretation or administration thereof by any Governmental Authority charged
with the enforcement, interpretation or administration thereof, and all
applicable administrative orders, directed duties, requests, licenses,
authorizations and permits of, and agreements with, any Governmental Authority.
"
LC Application
": an application by Loan Party Agent on behalf of a Borrower to an Issuing
Bank for issuance of a Letter of Credit, in form and substance satisfactory to
such Issuing Bank.
"
LC Conditions
": the following conditions necessary for the issuance of a Letter of Credit:
(a) each of the conditions set forth in
Section 6.2
(or with respect to
Letters of Credit issued on the Third Restatement Date, in
Section 6.1)
; (b) after giving effect to the issuance of a Letter of Credit for the
account of the U.S. Borrower,
(x)
total U.S. LC Obligations (excluding amounts specified in
clause (c)
of each such definition) do not exceed the U.S. Letter of Credit Sublimit and
no U.S. Overadvance exists or would result therefrom
and (y) the outstanding U.S. Revolver Loans and U.S. LC Obligations of each
Lender do not exceed such Lender's U.S. Revolver Commitments
; (c) after giving effect to the issuance of a Letter of Credit for the
account of the Canadian Borrower,
(x)
total Canadian LC Obligations (excluding amounts specified in
clause (c)
of such definition) do not exceed the Canadian Letter of Credit Sublimit and
no Canadian Overadvance exists or would result therefrom
and (y) the outstanding Canadian Revolver Loans and Canadian LC Obligations of
each Lender do not exceed such Lender's Canadian Revolver Commitment
; (d) the expiration date of such Letter of Credit is (i) no more than three
hundred sixty five (365) days from issuance, in the case of standby Letters of
Credit;
provided
that such Letters of Credit may contain automatic extension provisions in
accordance with
Section 2.2.1(e)
or
Section 2.3.1(e)
, as applicable, (ii) no more than one hundred twenty (120) days from
issuance, in the case of documentary Letters of Credit, and (iii) at least
fifteen (15) Business Days prior to the Facility Termination Date; (e) with
respect the issuance of Letters of Credit for the account of the U.S.
Borrower, the Letter of Credit and payments thereunder are denominated in
Dollars, Euros or Sterling; (f)
-42-
AmericasActive:19663285.13
-------------------------------------------------------------------------------
[reserved]; (g) with respect to the issuance of Letters of Credit for the
account of the Canadian Borrower, the Letter of Credit and payments thereunder
are denominated in Dollars or Canadian Dollars; (h) [reserved], and (i) the
form of the proposed Letter of Credit is reasonably satisfactory to Agent and
the applicable Issuing Bank in their discretion.
"
LC Documents
": all documents, instruments and agreements (including LC Requests and LC
Applications) delivered by Loan Party Agent on behalf of a Borrower or by any
other Person to an Issuing Bank or Agent in connection with issuance,
amendment or renewal of, or payment under, any Letter of Credit.
"
LC Obligations
": U.S. LC Obligations and Canadian LC Obligations.
"
LC Request
": a request for issuance of a Letter of Credit, to be provided by Loan Party
Agent on behalf of a Borrower to an Issuing Bank, in form satisfactory to
Agent and such Issuing Bank.
"
Lead Arrangers
":
Merrill Lynch, Pierce, Fenner & Smith Incorporated
BofA Securities, Inc.
(or any other registered broker-dealer wholly-owned by Bank of America
Corporation to which all or substantially all of Bank of America Corporation's
or any of its subsidiaries' investment banking, commercial lending services or
related businesses may be transferred following the date of this Agreement)
, Deutsche Bank Securities Inc., and JPMorgan Chase Bank, N.
and Goldman Sachs Bank
US
A.
"
Lender Indemnitees
": Lenders and their officers, directors, employees, Affiliates, agents and
attorneys (for the avoidance of doubt, such definition includes any such
Person acting in its capacity as "arranger", "bookrunner" and/or "syndication
agent").
"
Lenders
": as defined in the preamble to this Agreement and shall include Agent in its
capacity as a provider of Swingline Loans, U.S. Lenders and Canadian Lenders
and their respective permitted successors and assigns and, where applicable,
Issuing Banks, and any other Person who hereafter becomes a "Lender" pursuant
to an Assignment and Acceptance or a joinder agreement entered into pursuant to
Section 2.1.4
.
"
Lending Office
": the office (including any domestic or foreign Affiliate or branch)
designated as such by the applicable Lender at the time it becomes party to
this Agreement or thereafter by notice to Agent and Loan Party Agent.
"
Letter of Credit
": any U.S. Letters of Credit or Canadian Letters of Credit; and each Existing
Letter of Credit shall be deemed to be a "Letter of Credit" for all purposes
of this Agreement.
"
License
": any license or agreement under which a Loan Party or Restricted Subsidiary
is authorized to use Intellectual Property in connection with any manufacture,
marketing, distribution or disposition of Collateral, any use of property or
any other conduct of its business.
"
Licensor
": any Person from whom a Loan Party or Restricted Subsidiary obtains the
right to use any Intellectual Property.
-43-
AmericasActive:19663285.13
-------------------------------------------------------------------------------
"
Lien
": any Person's interest in property securing an obligation owed to, or a
claim by, such Person, whether such interest is based on common law, statute
or contract, including liens, security interests, pledges, security transfers,
security assignments, hypothecations, secured claims, statutory trusts, deemed
trusts, reservations of title, exceptions, encroachments, easements,
servitudes, rights-of-way, covenants, conditions, restrictions, leases, and
other title exceptions and encumbrances affecting property, but excluding for
the avoidance of doubt, any licenses granted with respect to Intellectual
Property.
"
List of Closing Documents
": the List of Closing Documents attached hereto as
Schedule 6.1
.
"
Loan
": a Revolver Loan or a FILO Credit Facility Loan.
"
Loan Account
": the loan account established by each Lender on its books pursuant to
Section 5.7
.
"
Loan Documents
": this Agreement, the Other Agreements and the Security Documents.
"
Loan Parties
": the Canadian Facility Loan Parties, the U.S. Facility Loan Parties and the
Specified Jurisdiction Guarantors, collectively and "
Loan Party
" means any of the Loan Parties, individually.
"
Loan Party Agent
": as defined in
Section 4.4
.
"
Loan Party Group
": a group consisting of (i) Canadian Facility Loan Parties or (ii) U.S.
Facility Loan Parties and the Specified Jurisdiction Guarantors.
"
Loan Party Group Obligations
": (i) with respect to the Canadian Borrower and the other Canadian Facility
Loan Parties, the Canadian Facility Obligations and (ii) with respect to the
U.S. Borrower, the other U.S. Facility Loan Parties and the Specified
Jurisdiction Guarantors, the U.S. Facility Obligations.
"
Loan Year
": each twelve (12) month period commencing on the Third Restatement Date and
on each anniversary of the Third Restatement Date.
"
Margin Stock
": as defined in Regulation U of the FRB.
"
Material Adverse Effect
": (a) a material adverse effect on the business, assets, liabilities (actual
or contingent), financial condition, or results of operations of Holdings and
its Restricted Subsidiaries, taken as a whole, (b) a material adverse effect
on the ability of the Loan Parties (taken as a whole) to perform their
respective obligations under the Loan Documents to which Holdings or any of
the Loan Parties is a party or (c) a material adverse effect on the rights and
remedies of the Lenders under the Loan Documents.
"
Material Contract
": any agreement or arrangement to which a Loan Party or Restricted Subsidiary
is party (other than the Loan Documents) (a) that is deemed to be a material
contract in respect of Holdings and its Restricted Subsidiaries, taken as a
whole, under any securities law applicable to such Loan Party or Restricted
Subsidiary, including the Securities Act of 1933; or (b) for which
-44-
AmericasActive:19663285.13
-------------------------------------------------------------------------------
breach, termination, nonperformance or failure to renew could reasonably be
expected to have a Material Adverse Effect.
"
Maximum Canadian Facility Amount
": on any date of determination, the lesser of (i) the Canadian Revolver
Commitments on such date and (ii) $20,000,000 (or such greater or lesser
amount after giving effect to any increases or reductions in the Commitments
pursuant to
Section 2.1.4
); it being acknowledged and agreed that at no time can the sum of the Maximum
Canadian Facility Amount
plus
the Maximum U.S. Facility Amount exceed the Maximum Facility Amount in effect
at such time.
"
Maximum Facility Amount
": $180,000,000, or such greater or lesser amount as shall then be in effect
after giving effect to any increase or reduction in the Commitments pursuant to
Section 2.1.4
.
"
Maximum Incremental Amount
": as defined in Section 10.2.2(b)(i).
"
Maximum U.S. Facility Amount
": on any date of determination, the lesser of (i) the U.S. Revolver
Commitments on such date and (ii) $160,000,000 (or such greater or lesser
amount after giving effect to any increases or reductions in the Commitments
pursuant to
Section 2.1.4
); it being acknowledged and agreed that at no time can the sum of the Maximum
U.S. Facility Amount
plus
the Maximum Canadian Facility Amount exceed the Maximum Facility Amount in
effect at such time.
"
Mexican Guarantor
" as defined in
Section 4.4
.
"
Mexico
" means the United Mexican States.
"
Moody's
": Moody's Investors Service, Inc. or any successor acceptable to Agent.
"
Multiemployer Plan
": any employee benefit plan of the type described in Section 4001(a)(3) of
ERISA and subject to Title IV of ERISA, to which a Loan Party or ERISA
Affiliate makes or is obligated to make contributions, or during the preceding
five plan years, has made or been obligated to make contributions, but
excluding, for greater certainty, any Canadian Multiemployer Plan.
"
Net Proceeds
": with respect to an Asset Sale, proceeds (including, when received, any
deferred or escrowed payments) received by a Loan Party or Restricted
Subsidiary in cash from such disposition, net of (a) reasonable and customary
costs and expenses actually incurred in connection therewith, including legal
fees and sales commissions; (b) amounts applied to repayment of Indebtedness
secured by a Permitted Lien senior to Agent's Liens on Collateral sold; (c)
transfer or similar taxes; and (d) reserves and escrows for indemnities and
any other contingent liabilities, until such reserves are no longer needed
(after which, any such amounts previously held as reserves or escrows shall
become Net Proceeds when received).
"
New Revolving Facility
": a "New Revolving Facility" as defined in the term loan credit agreement, an
indenture or another document governing the Fixed Asset Facility as such
agreement is in effect on the date hereof, or if entered into after the date
hereof, on the date such agreement is entered into in accordance with the
terms hereof.
"
New Term Facility
": a "New Term Facility" as defined in the term loan credit agreement, an
indenture or another document governing the Fixed Asset Facility as such
agreement is in effect on the
-45-
AmericasActive:19663285.13
-------------------------------------------------------------------------------
date hereof, or if entered into after the date hereof, on the date such
agreement is entered into in accordance with the terms hereof.
"
New Term Loan
": a "New Term Loan" as defined in the term loan credit agreement, an
indenture or another document governing the Fixed Asset Facility as such
agreement is in effect on the date hereof, or if entered into after the date
hereof, on the date such agreement is entered into in accordance with the
terms hereof.
"
NOLV Percentage
": the net orderly liquidation value of Inventory, expressed as a percentage
of the Value of Inventory expected to be realized at an orderly, negotiated
sale held within a reasonable period of time, net of all liquidation expenses,
as determined from the most recent appraisal of the Loan Parties' Inventory
performed by an appraiser and on terms reasonably satisfactory to Agent; it
being acknowledged that there may be different NOLV Percentages for different
segments of Inventory (e.g., raw materials, intermediate goods, finished
goods).
"Non-Extending Lender": Deutsche Bank AG New York Branch and Deutsche Bank AG,
Canada Branch (but, for the avoidance of doubt, shall not include any Lender
that is assigned the Commitments of such Non-Extending Lender in accordance
with the terms hereof, including without limitation pursuant to
Section 12.10
).
"
Notes
": each Revolver Note or other promissory note executed by a Borrower to
evidence any Obligations.
"
Notice of Borrowing
": a Notice of Borrowing to be provided by Loan Party Agent to request a
Borrowing of Loans, in the form attached hereto as
Exhibit B
or otherwise in form satisfactory to Agent.
"
Notice of Conversion/Continuation
": a Notice of Conversion/Continuation to be provided by Loan Party Agent to
request a conversion or continuation of any Loans as Term SOFR Loans or
Canadian BA
Term CORRA
Rate Loans, in the form attached hereto as
Exhibit C
or otherwise in form satisfactory to Agent.
"
Obligations
": all (a) principal of and premium, if any, on the Loans, (b) U.S. LC
Obligations and other obligations of the U.S. Facility Loan Parties with
respect to Letters of Credit issued for the account of the U.S. Borrower, (c)
[reserved], (d) Canadian LC Obligations and other obligations of the Canadian
Facility Loan Parties with respect to Letters of Credit issued for the account
of the Canadian Borrower, (e) interest, expenses, fees (including
post-petition interest, expenses, and fees) and other sums payable by the Loan
Parties under the Loan Documents and whether allowed in any Insolvency
Proceeding, (f) obligations of the Loan Parties under any indemnity for
Claims, (g) Extraordinary Expenses, (h) Secured Bank Product Obligations, (i)
Indebtedness, obligations and liabilities of any kind owing by the Loan
Parties with respect to any Designated Foreign Guaranty and (j) other
Indebtedness, obligations and liabilities of any kind owing by the Loan
Parties pursuant to the Loan Documents, whether now existing or hereafter
arising, whether evidenced by a note or other writing, whether allowed in any
Insolvency Proceeding, whether arising from an extension of credit, issuance
of a letter of credit, acceptance, loan, guarantee, indemnification or
otherwise, and whether direct or indirect, absolute or contingent, due or to
become due, primary or secondary, or joint or several;
provided
, that Obligations of a Loan Party shall not include its Excluded Swap
Obligations.
-46-
AmericasActive:19663285.13
-------------------------------------------------------------------------------
"
OFAC
": Office of Foreign Assets Control of the U.S. Treasury Department.
"
Officer's Certificate
": a certificate signed on behalf of Holdings by an Officer of Holdings.
"
Organization Documents
": (a) with respect to any corporation, the certificate or articles of
incorporation and the bylaws (or equivalent or comparable constitutive
documents with respect to any non-U.S. jurisdiction); (b) with respect to any
limited liability company, the certificate or articles of formation or
organization and operating agreement; and (c) with respect to any partnership,
joint venture, trust, unlimited liability company or other form of business
entity, the partnership, joint venture or other applicable agreement of
formation or organization and any agreement, memorandum of association,
instrument, filing or notice with respect thereto filed in connection with its
formation or organization with the applicable Governmental Authority in the
jurisdiction of its formation or organization and, if applicable, any
certificate or articles of formation or organization of such entity.
"
OSHA
": the Occupational Safety and Hazard Act of 1970.
"
Other Agreements
": each: Note; LC Document; Agent Fee Letter; Collateral Access Agreement; the
Intercreditor Agreement; the Intercompany Subordination Agreement; Borrowing
Base Certificate, Compliance Certificate; or other document or agreement
(other than this Agreement or a Security Document) now or hereafter delivered
by or on behalf of a Loan Party or other Person to Agent or a Lender in
connection with any transactions relating hereto.
"
Other Connection Taxes
": with respect to any Recipient, Taxes imposed as a result of a present or
former connection between such Recipient and the jurisdiction imposing such
Tax (other than connections arising from such Recipient having executed,
delivered, become a party to, performed its obligations under, received
payments under, received or perfected a Lien under, engaged in any other
transaction pursuant to or enforced any Loan Document, or sold or assigned an
interest in any Loan or Loan Document).
"
Other Pari Passu Lien Obligations
": any Indebtedness or other obligations (including Hedging Obligations)
having Pari Passu Lien Priority relative to the applicable Loans with respect
to the applicable Collateral and not secured by any other assets and, in the
case of Indebtedness for borrowed money, having a stated maturity that is not
prior to the Facility Termination Date;
provided
that an authorized representative of the holders of such Indebtedness shall
have entered into an intercreditor agreement in a form customary for
intercreditor agreements or collateral trust agreements in light of then
prevailing market conditions.
"
Other Taxes
": all present or future stamp, court or documentary, intangible, recording,
filing or similar Taxes that arise from any payment made under, from the
execution, delivery, performance, enforcement or registration of, from the
receipt or perfection of a security interest under, or otherwise with respect
to, any Loan Document, except any Taxes that are Other Connection Taxes
imposed with respect to an assignment (other than an assignment made pursuant
to
Section 12.10
).
"
Overadvance
": a Canadian Overadvance or U.S. Overadvance, as the context requires.
"
Overadvance Loan
": a Canadian Overadvance Loan and/or a U.S. Overadvance Loan, as the context
requires.
-47-
AmericasActive:19663285.13
-------------------------------------------------------------------------------
"
Parent
": Cooper Standard Holdings, Inc.
"
Parent Entity
": means the meaning specified in the definition of Permitted Parent.
"
Pari Passu Lien Priority
":
means, relative to specified Indebtedness, having equal Lien priority on
specified Collateral and either subject to the Intercreditor Agreement on a
substantially identical basis as the holders of such specified Indebtedness or
subject to intercreditor agreements providing holders of the Indebtedness
intended to have Pari Passu Lien Priority with substantially the same rights
and obligations that the holders of such specified Indebtedness have pursuant
to the Intercreditor Agreement as to the specified Collateral.
"
Participant
": as defined in
Section 13.2.1
.
"
Participating Member State
": each state so described in any EMU Legislation.
"
Patriot Act
": the Uniting and Strengthening America by Providing Appropriate Tools
Required to Intercept and Obstruct Terrorism Act of 2001, Pub. L. No. 107-56,
115 Stat. 272 (2001), as amended.
"
Payment Item
": each check, draft or other item of payment payable to a Loan Party,
including those constituting proceeds of any Collateral.
"
PBA
": the Pensions Benefits Act (Ontario) or any other Canadian federal or
provincial pension benefit standards legislation pursuant to which any
Canadian Pension Plan is registered.
"
PBGC
": the Pension Benefit Guaranty Corporation.
"
Pension Plan
": any "employee pension benefit plan" (as such term is defined in Section
3(2) of ERISA), other than a Multiemployer Plan, that is subject to Title IV
of ERISA or Section 412 of the Code and is sponsored or maintained by
Holdings, any Subsidiary or any ERISA Affiliate or to which Holdings, any
Subsidiary or any ERISA Affiliate contributes or has an obligation to
contribute (or in the case of a multiple employer or other plan described in
Section 4064(a) of ERISA, has made contributions at any time during the
immediately preceding five plan years), and, for greater certainty, excludes
any Canadian Pension Plan or any Canadian Multi-Employer Plan.
"
Permitted Collateral Lien
": the Liens described in
clause (1)
, (
2)
,
(3)
,
(6)
,
(13)
,
(14)
,
(20)
,
(23)
,
(28)
,
(30)
,
(31), (32)
and
(33)
of the definition of Permitted Liens.
"
Permitted Discretion
": a determination made in good faith and in the exercise of reasonable (from
the perspective of a secured asset-based lender) business judgment, following
either (x) consultation with the Loan Party Agent or (y) two (2) Business
Days' advance notice to the Loan Party Agent.
"
Permitted Holders
": means each of (i)(a)(x) the Investors and (y) members of management of
Holdings (or any Parent Entity) who are holders of Equity Interests of
Holdings (or any Parent Entity) on the Third Restatement Date representing not
more than 10% of the total voting power of the Voting Stock of Holdings and
(b) any group (within the meaning of Section 13(d)(3) or Section 14(d)(2) of
the Exchange Act or any successor provision) of which any of the foregoing are
members;
provided
that in
-48-
AmericasActive:19663285.13
-------------------------------------------------------------------------------
the case of such group, without giving effect to such group, Persons specified
in clause (i)(a) must collectively beneficially own a greater amount of the
total voting power of the Voting Stock of the Parent than the amount of the
total voting power of the Voting Stock of the Parent beneficially owned by any
other member of such group and (ii) any Permitted Parent.
"
Permitted Investments
":
(1) any Investment in cash, Cash Equivalents or Investment Grade Securities;
(2) any Investment in Holdings or any Restricted Subsidiary (including
guarantees of obligations of Restricted Subsidiaries), so long as, in the case
of any such Investment made by a Guarantor in a Restricted Subsidiary that is
not a Guarantor, Holdings shall be able to Incur at least $1.00 of additional
Indebtedness pursuant to
Section 10.2.2(a)
after giving effect to such Investment;
(3) any Investment by Subsidiaries of Holdings that are not Restricted
Subsidiaries in other Subsidiaries of Holdings that are not Restricted
Subsidiaries;
(4) (i) any Investment by Holdings or any Restricted Subsidiary of Holdings
in a Person that is engaged in a Similar Business if as a result of such
Investment (a) such Person becomes a Restricted Subsidiary of Holdings, or (b)
such Person, in one transaction or a series of related transactions, is
merged, consolidated or amalgamated with or into, or transfers or conveys all
or substantially all of its assets to, or is liquidated into, Holdings or a
Restricted Subsidiary of Holdings, so long as, in the case of any such
acquisition by a Guarantor of a Restricted Subsidiary that is not a Guarantor
or any merger, consolidation or amalgamation of any such Person into a
Restricted Subsidiary that is not a Guarantor, Holdings shall be able to Incur
at least $1.00 of additional Indebtedness pursuant to
Section 10.2.3(a)
after giving effect to such Investment, and (ii) in each case, any Investment
held by such Person;
provided
,
that such Investment was not acquired by such Person in contemplation of such
acquisition, merger, consolidation or transfer;
(5) any Investment in securities or other assets not constituting cash,
Cash Equivalents or Investment Grade Securities and received in connection
with a disposition of assets;
(6) any Investment (x) existing on the First Amendment Effective Date and
listed on
Schedule 1.1(d)
hereto, (y) made pursuant to binding commitments in effect on the First
Amendment Effective Date and (z) that replaces, modifies, refinances, refunds,
renews or extends any Investment described under either of the immediately
preceding clauses (x) or (y);
provided
that the amount of any such Investment may be increased in such replacement,
modification, refinancing, refunding, renewal, reinvestment or extension only
(A) as required by the terms of such Investment or binding commitment as in
existence on the First Amendment Effective Date (including as a result of the
accrual or accretion of interest or original issue discount or the issuance of
pay-in-kind securities) or (B) as otherwise permitted hereunder;
(7) advances to, or guarantees of Indebtedness of, employees not in excess
of $5,000,000 outstanding at any one time in the aggregate;
(8) loans and advances to officers, directors, managers and employees for
business-related travel expenses, moving and relocation expenses, payroll
advances and other similar expenses, in each
-49-
AmericasActive:19663285.13
-------------------------------------------------------------------------------
case Incurred in the ordinary course of business or consistent with past
practices or to fund such Person's purchase of Equity Interests of Holdings or
any Parent Entity;
(9) any Investment (including debt obligations and Capital Stock) (x)
acquired by Holdings or any Restricted Subsidiaries (a) in exchange for any
other Investment or accounts receivable held by Holdings or any such
Restricted Subsidiary in connection with or as a result of a bankruptcy,
workout, reorganization or recapitalization of the issuer of such other
Investment or accounts receivable, including trade creditors, customers and
suppliers or (b) as a result of a foreclosure by Holdings or any Restricted
Subsidiaries with respect to any secured Investment or other transfer of title
with respect to any secured Investment in default and (y) received in
compromise or resolution of (a) obligations of trade creditors, customers or
suppliers that were incurred in the ordinary course of business of Holdings or
any Restricted Subsidiary, including pursuant to any plan of reorganization or
similar arrangement upon the bankruptcy or insolvency of any trade creditor,
customer or supplier, or (b) litigation, arbitration or other disputes;
(10) Hedging Obligations permitted under
Section 10.2.13
;
(11) any Investment by Holdings or any Restricted Subsidiaries in a Similar
Business having an aggregate Fair Market Value, taken together with all other
Investments made pursuant to this
clause (11)
that are at the time outstanding, not to exceed the greater of (x) $65,000,000
and (y) 2.5% of Consolidated Total Assets at the time of such Investment (with
the Fair Market Value of each Investment being measured at the time made and
without giving effect to subsequent changes in value) at any one time
outstanding;
provided
,
however
, that if any Investment pursuant to this
clause (11)
is made in any Person that is not a Restricted Subsidiary of Holdings at the
date of the making of such Investment and such Person becomes a Restricted
Subsidiary of Holdings after such date, such Investment shall thereafter be
deemed to have been made pursuant to
clause (2)
above and shall cease to have been made pursuant to this
clause (11)
for so long as such Person continues to be a Restricted Subsidiary;
(12) [Intentionally Omitted];
(13) additional Investments by Holdings or any Restricted Subsidiaries
having an aggregate Fair Market Value, taken together with all other
Investments made pursuant to this
clause (13)
that are at the time outstanding, not to exceed the greater of (x)
$155,000,000 and (y) 6.25% of Consolidated Total Assets, at the time of such
Investment (with the Fair Market Value of each Investment being measured at
the time made and without giving effect to subsequent changes in value), at
any one time outstanding;
provided
,
however
, that if any Investment pursuant to this
clause (13)
is made in any Person that is not a Restricted Subsidiary of Holdings at the
date of the making of such Investment and such Person becomes a Restricted
Subsidiary of Holdings after such date, such Investment shall thereafter be
deemed to have been made pursuant to clause (2) above and shall cease to have
been made pursuant to this
clause (13)
for so long as such Person continues to be a Restricted Subsidiary;
provided
,
further
,
however
, that if any Investment pursuant to this
clause (13)
is made in any Person that is not a Guarantor at the date of the making of
such Investment and such Person becomes a Guarantor after such date, such
Investment shall thereafter be deemed to have been made pursuant to clause (2)
above and shall cease to have been made pursuant to this
clause (13)
;
-50-
AmericasActive:19663285.13
-------------------------------------------------------------------------------
(14) [Intentionally Omitted];
(15) Investments the payment for which consists of Equity Interests (other
than Excluded Equity) of Holdings or any Parent Entity, as applicable;
provided
,
however
, that such Equity Interests will not increase the amount available for
Restricted Payments under
Section 10.2.3(a)(3)
;
(16) Investments consisting of the licensing or contribution of
intellectual property pursuant to joint marketing arrangements with other
Persons;
(17) Investments consisting of purchases and acquisitions of inventory,
supplies, materials, equipment or other similar assets or purchases of
contract rights or licenses or leases of intellectual property, in each case
in the ordinary course of business;
(18) any Investment in a Receivables Subsidiary or any Investment in any
other Person in connection with a Permitted Receivables Financing or any
repurchases in connection therewith, including Investments of funds held in
accounts permitted or required by the arrangements governing such Permitted
Receivables Financing or any related Indebtedness;
(19) Investments of a Restricted Subsidiary of Holdings acquired after
April 4, 2014 or of an entity merged into or consolidated with a Restricted
Subsidiary of Holdings in a transaction that is not prohibited by
Section 10.2.7
after April 4, 2014 to the extent that such Investments were not made in
contemplation of such acquisition, merger or consolidation and were in
existence on the date of such acquisition, merger or consolidation;
(20) Guarantees of Indebtedness permitted to be incurred under
Section 10.2.2
and performance Guarantees in the ordinary course of business;
(21) [Intentionally Omitted];
(22) any transaction to the extent it constitutes an Investment that is
permitted and made in accordance with
Section 10.2.15(b)
(except transactions described in
clauses
(i)
,
(ii)
,
(iv)
,
(v)
,
(vi)
,
(viii)
,
(ix)
,
(xi)
,
(xiii)
,
(xiv)
,
(xv)
,
(xxi)
and
(xxiii)
thereof);
(23) advances, loans or extensions of trade credit in the ordinary course
of business by Holdings or any of the Restricted Subsidiaries;
(24) intercompany current liabilities owed to Unrestricted Subsidiaries or
joint ventures incurred in the ordinary course of business in connection with
the cash management operations of Holdings and its Subsidiaries;
(25) Investments consisting of purchases and acquisitions of assets or
services in the ordinary course of business;
(26) Investments in the ordinary course of business consisting of Article 3
endorsements for collection or deposit and Article 4 customary trade
arrangements with customers consistent with past practices;
(27) [Reserved]; and
-51-
AmericasActive:19663285.13
-------------------------------------------------------------------------------
(28) Any Investment; provided that (x) no Default or Event of Default has
occurred and is continuing or would result from such Investment and (y) on a
pro forma basis after giving effect to such Investment, the Consolidated Total
Net Debt Ratio would be equal to or less than 2.50:1.00.
Notwithstanding the foregoing provisions of this definition, if assets
acquired in any acquisition are intended to be included in the U.S. Borrowing
Base or the Canadian Borrowing Base, prior to any such inclusion, (1) Agent
and the Applicable Lenders shall be provided with such information as they
shall reasonably request to complete their evaluation of any such Collateral
and (2) the Asset Review and Approval Conditions shall have been satisfied.
"
Permitted Joint Venture
": with respect to any specified Person, a joint venture in any other Person
engaged in a Similar Business in respect of which Holdings or a Restricted
Subsidiary beneficially owns at least 10% of the shares of Equity Interests of
such Person.
"
Permitted Liens
": with respect to any Person:
(1) pledges or deposits by such Person under workers' compensation laws,
unemployment insurance laws or similar legislation, or good faith deposits in
connection with bids, tenders, contracts (other than for the payment of
Indebtedness) or leases to which such Person is a party, or deposits to secure
public or statutory obligations of such Person or deposits of cash or U.S.
government bonds to secure surety or appeal bonds to which such Person is a
party, or deposits as security for contested taxes or import duties or for the
payment of rent, in each case incurred in the ordinary course of business;
(2) Liens imposed by law constituting carriers', warehousemen's and
mechanics' Liens, in each case for sums that are not overdue by more than 60
days or are being Properly Contested;
(3) Liens for taxes, assessments or other governmental charges (i) which
are not yet due or payable or (ii) which are being Properly Contested;
(4) Liens in favor of issuers of performance and surety bonds or bid bonds
or with respect to other regulatory requirements or letters of credit issued
pursuant to the request of and for the account of such Person in the ordinary
course of its business;
(5) minor survey exceptions, minor encumbrances, easements or reservations
of, or rights of others for, licenses, rights-of-way, sewers, electric lines,
telegraph and telephone lines and other similar purposes, or zoning or other
restrictions as to the use of real properties or Liens incidental to the
conduct of the business of such Person or to the ownership of its properties
which were not Incurred in connection with Indebtedness and which do not
materially impair their use in the operation of the business of such Person;
(6) Liens Incurred to secure obligations in respect of Indebtedness
permitted to be Incurred pursuant to
clause (b)(i), (iv), (xvii)
,
(xx), (xxx) or (xxxi)
of
Section 10.2.2
;
provided
that, (i) in the case of
clause (b)(i)
, such Lien is subject to the Intercreditor Agreement; (ii) in the case of
clause (b)(iv)
, such Lien extends only to the assets and/or Capital Stock, the acquisition,
lease, construction, repair, replacement or improvement of which is financed
thereby and any income or profits thereof; (iii) in the case of
clause (b)(xx)
, such Lien does not extend to the property or assets (or income or profits
therefrom) of any Restricted Subsidiary other than assets of a Foreign
Subsidiary not constituting ABL
-52-
AmericasActive:19663285.13
-------------------------------------------------------------------------------
Priority Collateral, (iv) in the case of
clause (b)(xxxi)
, such Lien is subject to the applicable intercreditor agreement and (v) in
the case of
clause (b)(xxx)
such Lien is subject to the Intercreditor Agreement;
(7) Liens existing on the First Amendment Effective Date and listed on
Schedule 10.2.1
;
(8) Liens on assets of, or Equity Interest in, a Person at the time such
Person becomes a Subsidiary;
provided
,
however
, that such Liens are not created or Incurred in connection with, or in
contemplation of, such other Person becoming such a Subsidiary;
provided
,
further
,
however
, that such Liens may not extend to any other assets of Holdings or any
Restricted Subsidiary of Holdings;
(9) Liens on assets at the time Holdings or a Restricted Subsidiary of
Holdings acquired the assets, including any acquisition by means of a merger
or consolidation with or into Holdings or any Restricted Subsidiary of
Holdings;
provided
,
however
, that such Liens are not created or Incurred in connection with, or in
contemplation of, such acquisition;
provided
,
further
,
however
, that the Liens may not extend to any other assets owned by Holdings or any
Restricted Subsidiary of Holdings;
(10) Liens securing Indebtedness or other obligations of a Restricted
Subsidiary owing to Holdings or another Restricted Subsidiary of Holdings
permitted to be Incurred in accordance with
Section 10.2.2
;
(11) Liens securing Hedging Obligations so long as the related Indebtedness
is, and is permitted to be under this Agreement, secured by a Lien on the same
property securing such Hedging Obligations;
(12) Liens on specific items of inventory or other goods and proceeds of
any Person securing such Person's obligations in respect of bankers'
acceptances issued or created for the account of such Person to facilitate the
purchase, shipment or storage of such inventory or other goods;
(13) leases and subleases of real property which do not materially
interfere with the ordinary conduct of the business of Holdings or any of its
Restricted Subsidiaries;
(14) Liens arising from Uniform Commercial Code financing statement filings
regarding operating leases entered into by Holdings and its Restricted
Subsidiaries in the ordinary course of business;
(15) Liens in favor of Holdings or any Guarantor;
(16) Liens on accounts receivable and Receivables Assets Incurred in
connection with a Permitted Receivables Financing;
(17) deposits made in the ordinary course of business to secure liability
to insurance carriers;
(18) Liens on the Equity Interests of Unrestricted Subsidiaries;
(19) grants of software and other technology licenses in the ordinary
course of business;
(20) judgment and attachment Liens not giving rise to an Event of Default
and notices of lis pendens and associated rights related to litigation being
Properly Contested;
-53-
AmericasActive:19663285.13
-------------------------------------------------------------------------------
(21) Liens arising out of conditional sale, title retention, consignment or
similar arrangements for the sale of goods entered into in the ordinary course
of business;
(22) Liens Incurred to secure Bank Products owed to a Lender or an
Affiliate thereof in the ordinary course of business;
(23) Liens to secure any refinancing, refunding, extension, renewal or
replacement (or successive refinancings, refundings, extensions, renewals or
replacements) as a whole, or in part, of any Indebtedness secured by any Lien
referred to in the foregoing
clauses (6), (7), (8), (9), (10) and (11)
;
provided
,
however, that (x) such new Lien shall be limited to all or part of the same
property that secured the original Lien (plus improvements on such property),
and (y) the Indebtedness secured by such Lien at such time is not increased to
any amount greater than the sum of (A) the outstanding principal amount or, if
greater, committed amount of the Indebtedness described under
clauses (6), (7), (8), (9), (10)
and
(11)
at the time the original Lien became a Permitted Lien under this Agreement,
and (B) an amount necessary to pay any fees and expenses, including premiums,
related to such refinancing, refunding, extension, renewal or replacement;
(24) Liens in respect of Junior Indebtedness of Holdings or any Guarantor,
subject to the applicable intercreditor agreement;
provided
that the Consolidated Senior Secured Net Debt Ratio, on a pro forma basis
after giving effect thereto, does not exceed 3.50 to 1.00;
(25) other Liens on assets (other than ABL Priority Collateral) securing
obligations Incurred in the ordinary course of business that do not exceed the
greater of (x) $100,000,000 and (y) 3.75% of Consolidated Total Assets at the
time of Incurrence of such obligation, at any one time outstanding;
(26) Liens on the assets of a Joint Venture to secure Indebtedness of such
Joint Venture Incurred pursuant to
clause (xxi)
of
Section 10.2.2(b)
;
(27) Liens on equipment of Holdings or any Restricted Subsidiary of
Holdings granted in the ordinary course of business to Holdings' or such
Restricted Subsidiary's client at which such equipment is located;
(28) Liens created solely for the benefit of (or to secure) all of the
Obligations;
(29) Liens on property or assets used to defease or to satisfy and
discharge Indebtedness;
provided
that such defeasance or satisfaction and discharge is not prohibited hereby;
(30) Liens in favor of customs and revenue authorities arising as a matter
of law to secure payment of customs duties in connection with the importation
and exportation of goods in the ordinary course of business;
(31) Liens (i) of a collection bank arising under Section 4-210 of the
Uniform Commercial Code on items in the course of collection; (ii) attaching
to commodity trading accounts or other commodity brokerage accounts incurred
in the ordinary course of business; and (iii) in favor of banking institutions
arising as a matter of law encumbering deposits (including the right of
set-off) and which are within the general parameters customary in the banking
industry;
-54-
AmericasActive:19663285.13
-------------------------------------------------------------------------------
(32) 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; (ii) relating to pooled deposit or sweep
accounts of Holdings or any Restricted Subsidiary to permit satisfaction of
overdraft or similar obligations incurred in the ordinary course of business
of Holdings and its Restricted Subsidiaries; or (iii) relating to purchase
orders and other agreements entered into with customers of Holdings or any of
its Restricted Subsidiaries in the ordinary course of business; and
(33) statutory Liens arising under the PBA, other than statutory liens that
could reasonably be expected to result in a Material Adverse Effect.
"
Permitted Parent
": (a) any Person (other than a Person formed in connection with, or in
contemplation of, a Change of Control transaction that results in a
modification of the beneficial ownership of Holdings) that beneficially owns,
directly or indirectly, 100% of the issued and outstanding Voting Stock of
Holdings;
provided
that the ultimate beneficial ownership of Holdings has not been modified by
the transaction by which such Person became the beneficial owner of, directly
or indirectly, 100% of the Voting Stock of the U.S. Borrower (such Person, a "
Parent Entity
") and (b) the Parent (or direct Wholly-Owned Subsidiary of the Parent that
owns no material assets other than the Equity Interest of Holdings) to the
extent and until such time as any Person or group is deemed to be or become a
beneficial owner of Voting Stock of the Parent representing 50% or more of the
total voting power of the Voting Stock of the Parent.
"
Permitted Receivables Financing
": any transaction or series of transactions that may be entered into by
Holdings or any of its Subsidiaries pursuant to which it may sell, convey,
contribute to capital or otherwise transfer (which sale, conveyance,
contribution to capital or transfer may include or be supported by the grant
of a security interest) accounts receivable or interests therein and all
collateral securing such receivables, all contracts and contract rights,
purchase orders, security interests, financing statements or other
documentation in respect of such receivables, any guarantees, indemnities,
warranties or other obligations in respect of such receivables, any other
assets that are customarily transferred or in respect of which security
interests are customarily granted in connection with asset securitization
transactions involving receivables similar to such receivables and any
collections or proceeds of any of the foregoing (collectively, the "
Receivables Assets
"); and including for the avoidance of doubt, receivables arising from the
sale of equipment, tooling and related services) (i) to a trust, partnership,
corporation or other Person (other than Holdings or any of its Subsidiary,
other than a Subsidiary formed solely for the purpose of, and that engages
only in, Permitted Receivables Financing, a "
Receivables Subsidiary
"), which transfer is funded in whole or in part, directly or indirectly, by
the incurrence or issuance by the transferee or any successor transferee of
Indebtedness, fractional undivided interests or other securities that are to
receive payments from, or that represent interests in, the cash flow derived
from such receivables and Receivables Assets or interests in such receivables
and Receivables Assets, or (ii) directly to one or more investors or other
purchasers (other than Holdings or any of its Subsidiary), it being understood
that a Permitted Receivables Financing may involve (A) one or more sequential
transfers or pledges of the same receivables and Receivables Assets, or
interests therein (such as a sale, conveyance or other transfer to an
Receivables Subsidiary followed by a pledge of the transferred receivables and
Receivables Assets to secure Indebtedness incurred by the Receivables
Subsidiary), and all such transfers, pledges and Indebtedness incurrences
shall be part of and constitute a single Permitted Receivables Financing, and
(B) periodic transfers or pledges of receivables and/or revolving transactions
in which new receivables and Receivables Assets, or interests therein, are
transferred or pledged upon
-55-
AmericasActive:19663285.13
-------------------------------------------------------------------------------
collection of previously transferred or pledged receivables and Receivables
Assets, or interests therein;
provided
that any such transactions shall provide for recourse to Holdings or any of
its Subsidiaries (other than any Receivables Subsidiary) only in respect of
the cash flows in respect of such receivables and Receivables Assets and to
the extent of other customary securitization undertakings (as determined in
good faith by the Board of Directors of the appropriate Receivables
Subsidiary) in the jurisdiction relevant to such transactions (such
undertakings, "
Standard Securitization Undertakings
");
provided
that, for the avoidance of doubt, (1) no portion of the Indebtedness or any
other obligations (contingent or otherwise) of Holdings or any of its
Subsidiaries or Receivables Subsidiary is guaranteed by any Loan Party, is
recourse to or obligates any Loan Party, or subjects any property or asset of
any Loan Party, directly or indirectly (other than with respect to its equity
ownership interest in any Subsidiary), contingently or otherwise, to the
satisfaction of obligations incurred in such transactions; (2) no Loan Party
has any obligation to maintain or preserve the financial condition of a
Receivables Subsidiary or cause such entity to achieve certain levels of
operating results, and (3) the aggregate "amount" or "principal amount" (as
defined below) of all Permitted Receivables Financings (other than those of
one or more Foreign Subsidiaries) shall not exceed $50,000,000 at any time
outstanding. The "amount" or "principal amount" of any Permitted Receivables
Financing shall be deemed at any time to be (1) the aggregate principal or
stated amount of the Indebtedness, fractional undivided interests (which
stated amount may be described as a "net investment" or similar term
reflecting the amount invested in such undivided interest) or other securities
incurred or issued pursuant to such Permitted Receivables Financing, in each
case outstanding at such time, or (2) in the case of any Permitted Receivables
Financing in respect of which no such Indebtedness, fractional undivided
interests or securities are incurred or issued, the cash purchase price paid
by the buyer in connection with its purchase of receivables less the amount of
collections received in respect of such receivables and paid to such buyer,
excluding any amounts applied to purchase fees or discount or in the nature of
interest.
"
Permitted Secured Debt
": the Indebtedness and other obligations under any Fixed Asset Facility.
"
Permitted Secured Debt Collateral Agent
": (i) with respect to the Fixed Asset Facility, the Fixed Asset Facility
Collateral Agent and (ii) with respect to any other Permitted Secured Debt,
any collateral agent, collateral trustee, or similar representative of holders
of Permitted Secured Debt under and pursuant to the applicable Permitted
Secured Debt Document.
"
Permitted Secured Debt Documents
": all agreements and documents entered into and evidencing Permitted Secured
Debt.
"
Person
": any individual, corporation, partnership, limited liability company,
unlimited liability company, joint venture, association, joint stock company,
trust, unincorporated organization, government or any agency or political
subdivision thereof or any other entity.
"
Plan
": any material "employee benefit plan" (as defined in Section 3(3) of ERISA),
and any material payroll practice and other material employee benefit plan,
policy, program, agreement or arrangement, including retirement, pension,
profit sharing, employment, individual consulting or other compensation
agreement, collective bargaining agreement, bonus or other incentive
compensation, retention, stock purchase, equity or equity-based compensation,
deferred compensation, change of control, severance, sick leave, vacation,
loans, salary continuation, hospitalization, health, life insurance,
educational assistance, or other fringe benefit or perquisite plan, policy,
agreement which is or was
-56-
AmericasActive:19663285.13
-------------------------------------------------------------------------------
sponsored, maintained or contributed to by, or required to be contributed to
by, any Loan Party or Affiliate thereof or with respect to which a Loan Party
or ERISA Affiliate has or could have any obligation or liability, contingent
or otherwise, in any case, that is subject to U.S. law (and not other foreign
jurisdictions) and excluding, for greater certainty, Canadian Pension Plans
and Foreign Plans.
"
Platform
": as defined in
Section 14.3.3
.
"
Pledge and Security Agreement
": collectively, Revolving Credit Facility Pledge and Security Agreement dated
as of the Third Restatement Date and executed by Holdings, the U.S. Borrower
and each U.S. Facility Guarantor, substantially in the form of
Exhibit K
, together with any security agreement and security agreement supplement
executed and delivered pursuant to the Pledge and Security Agreement.
"
Pledge and Security Agreement Collateral
": collectively, all property pledged or granted (or purported to be pledged
or granted) as collateral pursuant to the Pledge and Security Agreement (a) on
the Third Restatement Date or (b) thereafter pursuant to the terms thereof.
"
Pledge Supplement
": has the meaning specified in the Pledge and Security Agreement.
"
Pledged Debt
": has the meaning specified in the Pledge and Security Agreement.
"
Pledged Equity Interests
": has the meaning specified in the Pledge and Security Agreement.
"
PPSA
": the Personal Property Security Act (Ontario) and the regulations
thereunder; provided, however, if validity, perfection and effect of
perfection and non-perfection of Agent's security interest in and Lien on any
Collateral of any Canadian Domiciled Loan Party are governed by the personal
property security laws of any jurisdiction other than Ontario, PPSA shall mean
those personal property security laws (including the Civil Code of Quebec) in
such other jurisdiction for the purposes of the provisions hereof relating to
such validity, perfection, and effect of perfection and non-perfection and for
the definitions related to such provisions, as from time to time in effect.
"
Preferred Stock
": any Equity Interest with preferential right of payment of dividends or upon
liquidation, dissolution or winding up.
"Pricing/Fee Reduction Period": any period occurring from time to time after
the Fourth Amendment Effective Date, (a) commencing on the date, if any, that
no Event of Default exists and Agent receives a certificate delivered pursuant
to, and in accordance, with
Section 10.1.1
evidencing, in reasonable detail, a Consolidated Total Debt Ratio equal to or
less than 3.50 to 1.00 for the most recently ended four fiscal quarter period
and (b) continuing until the earliest to occur of the date (i) Agent receives
a Compliance Certificate delivered pursuant to, and in accordance with,
Section 10.1.1
stating that the Consolidated Total Debt Ratio is greater than 3.50 to 1.00
for the most recently ended four fiscal quarter period, (ii) Agent fails to
receive a Compliance Certificate pursuant to and in accordance with
Section 10.1.1(d)
or (iii) an Event of Default occurs. For the avoidance of doubt, it is
understood and agreed that (i) no "Pricing/Fee Reduction Period" shall exist
during the occurrence and continuance of an Event of Default and (ii) if a
"Pricing/Fee Reduction Period" would exist but for the occurrence and
continuance of an Event of Default, a "Pricing/Fee Reduction Period" shall
exist immediately upon any such Event of Default no longer continuing;
provided that any corresponding adjustment to the (x)
-57-
AmericasActive:19663285.13
-------------------------------------------------------------------------------
Applicable Margin or (y) fees due pursuant to Section 3.2.1, in each case, due
to the Pricing/Fee Reduction Period being then in effect shall not occur until
the first (1
st
) day of the next calendar month as set forth in the definitions of Applicable
Margin, Canadian Unused Line Fee Rate and U.S. Unused Line Fee Rate, as
applicable.
"
Pro Forma Basis
": in connection with any calculation of compliance with any financial
covenant or financial term under this Agreement, (a) such compliance with the
Fixed Charge Coverage Ratio shall be calculated giving effect to any
acquisition, investment or other pro forma event as if such transaction (and
all other such transactions consummated or made since the first (1st) day of
the Fixed Charge Coverage Ratio Test Period most recently ended) happened on
the first (1st) day of the Fixed Charge Coverage Ratio Test Period most
recently ended, including (i) the incurrence of any Indebtedness by any Loan
Party or any of their Restricted Subsidiaries in connection with any such
transaction, (ii) any repayment or redemption of other Indebtedness of any
Loan Party or any of their Restricted Subsidiaries in connection with any such
transaction and (iii) the making of any Distribution by any Loan Party or any
of their Restricted Subsidiaries in connection with any such transaction, (b)
determinations of EBITDA shall be made giving pro forma effect to any
acquisition consummated since the first (1st) day of the Fixed Charge Coverage
Ratio Test Period most recently ended, with such EBITDA to be determined as if
such acquisition was consummated on the first (1st) day of the Fixed Charge
Coverage Ratio Test Period most recently ended, and (c) maintenance of
Availability shall be calculated giving effect to such transaction, including
(i) any disposition of Collateral in any such transaction and (ii) the
acquisition of any additional Collateral in any such transaction which is
approved by Agent for inclusion in the calculation of the Canadian Borrowing
Base or the U.S. Borrowing Base, to the extent applicable. In calculating
interest expense on Indebtedness incurred under clause (a) (i) of the
immediately preceding sentence, such Indebtedness shall be deemed to have
borne interest (a) in the case of fixed rate Indebtedness, at the rate
applicable thereto or (b) in the case of floating rate Indebtedness, at the
rates which were or would have been applicable thereto during the period when
such Indebtedness was or was deemed to be outstanding, in each case as
reasonably calculated by Loan Party Agent.
"
Pro Rata
": (a) when used with reference to a Lender's (i) share on any date of (A) the
total Facility Commitments to a Borrower or (B) Loans to be made to a
Borrower, (ii) participating interests in LC Obligations (excluding amounts
specified in
clause (c)
of such definition) to such Borrower, (iii) share of payments made by such
Borrower with respect to such Borrower's Obligations, (iv) increases or
reductions to the Canadian Revolver Commitments or the U.S. Revolver
Commitments pursuant to
Section 2.1.4
, and (v) obligation to pay or reimburse Agent for Extraordinary Expenses owed
by or in respect of such Borrower or to indemnify any Indemnitees for Claims
relating to such Borrower, a percentage (expressed as a decimal, rounded to
the ninth decimal place) derived by dividing the amount of the Facility
Commitment of such Lender to such Borrower on such date by the aggregate
amount of the Facility Commitments of all Lenders to such Borrower on such
date (or if such Facility Commitments have been terminated, by reference to
the respective Facility Commitments as in effect immediately prior to the
termination thereof) or (b) when used for any other reason, a percentage
(expressed as a decimal, rounded to the ninth (9th) decimal place) derived by
dividing the aggregate amount of Lender's Commitments on such date by the
aggregate amount of the Commitments of all Lenders on such date (or if any
such Commitments have been terminated, such Commitments as in effect
immediately prior to the termination thereof).
-58-
AmericasActive:19663285.13
-------------------------------------------------------------------------------
"
Proceeds of Crime Act
": the Proceeds of Crime (Money Laundering) and Terrorist Financing Act
(Canada) (or any successor statute), as amended from time to time, and
includes all regulations thereunder.
"
Production Part Approval Process
": all customer engineering design record and specification requirements that
have been agreed between the applicable Borrower and customer related to the
subject tooling design and/or manufacture.
"
Properly Contested
": with respect to any obligation of any Person, (a) the obligation is subject
to a bona fide dispute regarding amount or such Person's liability to pay; (b)
the obligation is being properly contested in good faith by appropriate
proceedings promptly instituted and diligently pursued; (c) appropriate
reserves have been established in accordance with GAAP; and (d) if the
obligation results from entry of a judgment or other order, such judgment or
order is stayed pending appeal or other judicial review or covered by
insurance.
"
Protective Advances
": as defined in
Section 2.1.6
.
"
PTE
": a prohibited transaction class exemption issued by the U.S. Department of
Labor, as amended from time to time.
"
Qualified ECP
": a Loan Party with total assets exceeding $10,000,000, or that constitutes
an "eligible contract participant" under the Commodity Exchange Act and can
cause another Person to qualify as an "eligible contract participant" under
Section 1a(18)(A)(v)(II) of such act.
"
RCRA
": the Resource Conservation and Recovery Act, as amended, (42 U.S.C. (s)(s)
6991-6991i).
"
RDPRM
": Quebec Register of Personal and Movable Real Rights or Registre des droits
personnels et reels mobiliers du Quebec.
"
Reaffirmed Agreement
or
Reaffirmed Agreements
": each Loan Document executed in connection with the Existing Loan Agreement
that has not been amended and restated in connection with this Agreement.
"
Real Estate
": all right, title and interest (whether as owner, lessor or lessee) in any
real property or any buildings, structures, parking areas or other
improvements thereon.
"
Reallocation Agreement
": the Second Amended and Restated Reallocation Agreement dated as the Third
Restatement Date, among Agent, the Lenders and each Issuing Bank transferring
ownership of debt among the Lenders after a Designation Date, as amended,
modified or supplemented from time to time.
"
Receivables Assets
": has the meaning set forth in the definition of "Permitted Receivables
Financing".
"
Receivables Fees
": distributions or payments made directly or by means of discounts with
respect to any participation interest issued or sold in connection with, and
other fees paid to a Person that is not a Restricted Subsidiary in connection
with, any Permitted Receivables Financing.
-59-
AmericasActive:19663285.13
-------------------------------------------------------------------------------
"
Receivables Subsidiary
": has the meaning set forth in the definition of "Permitted Receivables
Financing".
"
Recipient
": means (a) Agent, (b) any Lender, (c) any Issuing Bank and (d) any other
recipient of any payment made by or on account of any Loan Party under any
Loan Document.
"
Refinance
": in respect of any Indebtedness, Disqualified Stock or Preferred Stock, to
refinance, extend, renew, refund, repay, prepay, purchase, redeem, defease or
retire, or to issue other Indebtedness, Disqualified Stock or Preferred Stock
in exchange or replacement for, such Indebtedness, Disqualified Stock or
Preferred Stock, in whole or in part. "Refinanced" and "Refinancing" shall
have correlative meanings.
"
Regulation S-X
": Regulation S-X under the Securities Act of 1933, as amended.
"
Release
": any release, spill, emission, leaking, pumping, pouring, injection,
escaping, deposit, disposal, discharge, dispersal, dumping, leaching or
migration of any Hazardous Material (including the abandonment or disposal of
any barrels, containers or other closed receptacles containing any Hazardous
Material) into, onto, under, from or through the Environment or into, onto,
under, from or through any building or structure subject to human occupation.
"
Report
": as defined in
Section 12.2.3
.
"
Reportable Event
": any of the events set forth in Section 4043(c) of ERISA, other than events
for which the 30-day notice period has been waived.
"
Required Facility Lenders
": at any date of determination thereof,
unless there are only two (2) Lenders that are not Affiliates of one another,
Lenders having Facility Commitments to a Borrower representing more than 50%
of the aggregate Facility Commitments to such Borrower at such time;
provided
,
however
, that if and for so long as any such Lender shall be a Defaulting Lender, the
term "
Required Facility Lenders
" shall mean Lenders (excluding each Defaulting Lender) having Facility
Commitments to such Borrower representing more than 50% of the aggregate
Facility Commitments to such Borrower (excluding the Facility Commitments of
each Defaulting Lender) at such time;
provided
further
,
however
, that if all of the Facility Commitments to such Borrower have been
terminated, the term "
Required Facility Lenders
" shall mean Lenders to such Borrower holding Revolver Loans to, and
participating interest in LC Obligations (excluding amounts specified in
clause (c)
of such definition) owing by, such Borrower representing more than 50% of the
aggregate outstanding principal amount of Revolver Loans and LC Obligations
(excluding amounts specified in
clause (c)
of such definition) owing by such Borrower at such time. Notwithstanding
anything to the contrary set forth herein, (x) if there are only two (2)
Lenders that are not Affiliates of one another, "Required Facility Lenders"
shall be both Lenders and (y) at any time there are two (2) or more Lenders
that are not Affiliates of one another, "Required Facility Lenders" shall
consist of not less than two (2) Lenders who are not Affiliates of one
another. Notwithstanding
the foregoing, for purposes of this definition, any Fronting Exposure related
to a Defaulting Lender shall be deemed held as a Loan or LC Commitment by the
Lender that funded or issued the applicable Loan or Letter of Credit.
"
Required Lenders
": at any date of determination thereof,
unless there are only two (2) Lenders that are not Affiliates of one another,
Lenders having Facility Commitments representing more than 50%
-60-
AmericasActive:19663285.13
-------------------------------------------------------------------------------
of the aggregate Facility Commitments at such time;
provided
,
however
, that for so long as any Lender shall be a Defaulting Lender, the term "
Required Lenders
" shall mean Lenders (excluding such Defaulting Lender) having Commitments
representing more than 50% of the aggregate Commitments (excluding the
Commitments of each Defaulting Lender) at such time;
provided
further
,
however
, that if any of the Facility Commitments have been terminated, the term "
Required Lenders
" shall be calculated using (x) in lieu of such Lender's terminated Facility
Commitment, the outstanding principal amount of the Revolver Loans by such
Lender to, and participation interests in LC Obligations (excluding amounts
specified in
clause (c)
of such definition) owing by, such Borrower and (y) in lieu of the aggregate
Commitments under such terminated Facility Commitment, the aggregate
outstanding Revolver Loans to, and LC Obligations (excluding amounts specified
in
clause (c)
of such definition) owing by such Borrower. Notwithstanding
anything to the contrary set forth herein, (x) if there are only two (2)
Lenders that are not Affiliates of one another, "Required Lenders" shall be
both Lenders and (y) at any time there are two (2) or more Lenders that are
not Affiliates of one another, "Required Lenders" shall consist of not less
than two (2) Lenders who are not Affiliates of one another. Notwithstanding
the foregoing, for purposes of this definition, any Fronting Exposure related
to a Defaulting Lender shall be deemed held as a Loan or LC Commitment by the
Lender that funded or issued the applicable Loan or Letter of Credit.
"
Rescindable Amount
": as defined in
Section 4.1.3(e)
.
"
Resolution Authority
": an EEA Resolution Authority or, with respect to any UK Financial
Institution, a UK Resolution Authority.
"
Responsible Officer
": the chief executive officer, president, any vice president, chief financial
officer, treasurer or assistant treasurer, secretary or assistant secretary or
other similar officer of a Loan Party. Any document delivered hereunder that
is signed by a Responsible Officer of a Loan Party shall be conclusively
presumed to have been authorized by all necessary corporate, partnership
and/or other action on the part of such Loan Party and such Responsible
Officer shall be conclusively presumed to have acted on behalf of such Loan
Party.
"
Restricted Investment
": an Investment other than a Permitted Investment.
"
Restricted Subsidiary
": any Subsidiary of a Person other than an Unrestricted Subsidiary of such
Person. Unless otherwise indicated, all references to Restricted Subsidiaries
shall mean Restricted Subsidiaries of Holdings.
"
Restrictive Agreement
": an agreement that conditions or restricts the right of any Loan Party or
Restricted Subsidiary to grant Liens on any assets securing the Obligations or
to declare or make dividends or similar distributions.
"
Revolver Loan
": a loan made pursuant to
Section 2.1
, and any Swingline Loan, Overadvance Loan or Protective Advance.
"
Revolver Notes
": collectively, the U.S. Revolver Notes and the Canadian Revolver Notes.
"
Romanian Civil Code
" means the Romanian Civil Code as republished in the Official Gazette of
Romania No. 505 of 15 July 2011, approved by Law No. 287 of 17 July 2009
regarding the Civil Code
-61-
AmericasActive:19663285.13
-------------------------------------------------------------------------------
and Law No. 71 of 3 June 2011 regarding the application of the Civil Code, as
such may be amended from time to time.
"
Romanian Guarantee
" as defined in
Section 10.1.11(d)
.
"
Romanian Guarantor
" as defined in
Section 10.1.11(c)
.
"
Romanian Suretyship
" as defined in
Section 10.1.11(c)
.
"
Royalties
": all royalties, fees, expense reimbursement and other amounts payable by a
Loan Party or a Restricted Subsidiary under a License.
"
S&P
": Standard & Poor
'
'
s Financial Services LLC, a subsidiary of The McGraw-Hill Companies, Inc., or
any successor acceptable to Agent.
"
Sanction
": any
country-wide
country wide
international economic sanction administered or enforced by the United States
Government (including OFAC), the Canadian Federal Government, the United
Nations Security Council, the European Union,
Her
His
Majesty's Treasury or other
relevant
applicable
sanctions authority.
"
Scheduled Unavailability Date
": as defined in
Section 1.6.2
.
"
SEC
": the Securities and Exchange Commission, or any Governmental Authority
succeeding to any of its principal functions.
"
Secured Bank Product Obligations
": Indebtedness, obligations and other liabilities with respect to Bank
Products owing by a Borrower or Affiliate of a Borrower to a Secured Bank
Product Provider;
provided
, that Secured Bank Product Obligations of a Loan Party shall not include its
Excluded Swap Obligations.
"
Secured Bank Product Provider
": (a) Bank of America or any of its Affiliates; and (b) any other Lender or
Affiliate of a Lender that is providing a Bank Product.
"
Secured Incremental Equivalent Debt
": Incremental Equivalent Debt that is secured.
"
Secured Incremental Equivalent Debt Documents
": any agreements and documents entered into and evidencing Secured
Incremental Equivalent Debt.
"
Secured Parties
": Canadian Facility Secured Parties and/or U.S. Facility Secured Parties, as
the context requires.
"
Security Documents
": this Agreement, the Pledge and Security Agreement, the Guarantees,
Insurance Assignments, Canadian Security Agreements, Deposit Account Control
Agreements, the Intellectual Property Security Agreements, the Pledge
Supplements, security agreements, pledge agreements or other similar
agreements delivered to Agent pursuant to the Pledge and Security Agreement
and all other documents, instruments and agreements now or hereafter securing
(or given with the intent to secure) any Obligations.
-62-
AmericasActive:19663285.13
-------------------------------------------------------------------------------
"
Senior Secured Notes
": the 5.625% cash pay/10.625% PIK toggle senior secured notes due 2027,
issued on the Third Amendment Effective Date in an initial aggregate principal
amount not to exceed $400,000,000 pursuant to the Senior Secured Notes
Indenture.
"
Senior Secured Notes Indenture
": that certain indenture dated as of the Third Amendment Effective Date, by
and among the U.S. Borrower, as issuer, the guarantors party thereto and U.S.
Bank Trust Company, National Association, as trustee and collateral agent,
with respect to the Senior Secured Notes.
"
Senior Unsecured Notes
": Cooper-Standard Auto's 5.625% Senior Notes due 2026 in the initial
principal amount of $400,000,000.
"
Senior Unsecured Notes Issuance
": the issuance by the U.S. Borrower of the Senior Unsecured Notes.
"
Settlement Report
": a report delivered by Agent to the Applicable Lenders summarizing the Loans
and, if applicable, participations in U.S. LC Obligations (excluding amounts
specified in
clause (c)
of such definition) of the U.S. Borrower and Canadian LC Obligations
(excluding amounts specified in
clause (c)
of such definition) of the Canadian Borrower outstanding as of a given
settlement date, allocated to the Applicable Lenders on a Pro Rata basis in
accordance with their Commitments.
"
Similar Business
": any business engaged in by Holdings or any Restricted Subsidiaries on April
4, 2014 and any business or other activities that are reasonably similar,
ancillary, complementary or related to, or a reasonable extension, development
or expansion of, the businesses in which Holdings and its Restricted
Subsidiaries are engaged on April 4, 2014.
"
SOFR
": the secured overnight financing rate as administered by the
Federal Reserve Bank of New York
FRBNY
(or a successor administrator).
"
SOFR Adjustment
": (a) with respect to Daily Simple SOFR and Term SOFR for a one-month
Interest Period, 0.11448%; and (b) with respect to Term SOFR for a three-month
Interest Period, 0.26161%.
"
Solvent
": as to any Person, such Person (a) owns property whose fair salable value is
greater than the amount required to pay all of its debts (including
contingent, subordinated, unmatured and unliquidated liabilities); (b) owns
property whose present fair salable value (as defined below) is greater than
the probable total liabilities (including contingent, subordinated, unmatured
and unliquidated liabilities) of such Person as they become absolute and
matured; (c) is able to pay all of its debts as they mature; (d) has capital
that is not unreasonably small for the business in which it is engaged or
about to engage; (e) is not "insolvent" within the meaning of Section 101(32)
of the U.S. Bankruptcy Code; (f) has not incurred (by way of assumption or
otherwise) any obligations or liabilities (contingent or otherwise) or made
any conveyance in connection therewith, with actual intent to hinder, delay or
defraud either present or future creditors of such Person or any of its
Affiliates; (g) as to any Person incorporated or organized under the laws of
Canada or any province or territory of Canada, is not an "insolvent person" as
defined in the Bankruptcy and Insolvency Act (
Canada
). "
Fair salable value
" means the amount that could be obtained for assets within a reasonable time,
either through collection or through sale under ordinary selling conditions by
a capable and diligent seller to an interested buyer who
-63-
AmericasActive:19663285.13
-------------------------------------------------------------------------------
is willing (but under no compulsion) to purchase; and (h) with respect to the
Mexican Guarantor, that such Person is not insolvent pursuant to Article 2166
of the Mexican Federal Civil Code (
Codigo Civil Federal
) or its correlative provisions of the Civil Codes of the States that comprise
Mexico or that of the Federal District of Mexico or Articles 9, 10 and 11 of
the Mexican Bankruptcy Law (
Ley de Concursos Mercantiles
) (or any successor provision).
"
Specified Jurisdictions
": Costa Rica, France, Mexico, the Netherlands, Romania and any other country,
territory or political jurisdiction specified by a Borrower to the Agent from
time to time.
"
Specified Jurisdiction Guarantors
": each Subsidiary of Holdings organized in a Specified Jurisdiction who
guarantees the payment and performance of the Obligations.
"
Specified Loan Party
": a Loan Party that is not then an "eligible contract participant" under the
Commodity Exchange Act (determined prior to giving effect to
Section 5.10
).
"
Specified Transaction
": any Restricted Payment described in
Section 10.2.3(a)(i)
,
(a)(ii)
,
(b)(vi)
or
(b)(x)
.
"
Specified Transaction Conditions
": with respect to the permissibility hereunder of any Specified Transaction,
the satisfaction of the following conditions (except as indicated): (a) no
Default or Event of Default exists at the time of or would result from the
making of such Specified Transaction, (b) immediately after giving effect to
such Specified Transaction, Parent and its Restricted Subsidiaries shall, on a
consolidated basis, have a Fixed Charge Coverage Ratio of not less than
1.00:1.00 as calculated on a Pro Forma Basis for the Fixed Charge Coverage
Ratio Test Period then most recently ended and (c) immediately after giving
effect to such Specified Transaction, Availability (on the date of such action
or proposed action) and, if an Average Availability Test Trigger exists at the
time of such Specified Transaction, Average Period Availability (for the
30-day period ending on the date of such action or proposed action) as
calculated on a Pro Forma Basis, shall not be less than the greater of (i)
$27,000,000 and (ii) 15%
of the Commitments at such time
;
provided
,
further
, that such Specified Transaction shall be permitted irrespective of
clause (b)
of this definition so long as Availability (on the date of such action or
proposed action) and, if an Average Availability Test Trigger exists at the
time of such Specified Transaction, Average Period Availability (for the
30-day period ending on the date of such action or proposed action) as
calculated on a Pro Forma Basis, shall not be less than the greater of (i)
$36,000,000 and (ii) 20% of the Commitments at such time.
"
Standard Securitization Undertakings
": has the meaning set forth in the definition of "Permitted Receivables
Financing".
"
Stated Maturity
": with respect to any installment of interest or principal on any series of
Indebtedness, the date on which such payment of interest or principal was
scheduled to be paid in the documentation governing such Indebtedness, and
shall not include any contingent obligations to repay, redeem or repurchase
any such interest or principal prior to the date originally scheduled for the
payment thereof.
"
Sterling
" or "
": the lawful currency of the United Kingdom of Great Britain and Northern
Ireland.
-64-
AmericasActive:19663285.13
-------------------------------------------------------------------------------
"
Superintendent
": as defined in the PBA.
"
Subsidiary
": any entity more than 50% of whose voting securities or Equity Interests is
owned by any Loan Party or any combination of the Loan Parties (including
indirect ownership by any Loan Party through other entities in which any Loan
Party directly or indirectly owns 50% of the voting securities or Equity
Interests). Unless the context otherwise requires, each reference to
Subsidiaries herein shall be a reference to Subsidiaries of Holdings.
"Superintendent": as defined in the PBA.
"
Supermajority Required Facility Lenders
": at any date of determination thereof, Lenders having Facility Commitments
to a Borrower representing more than 66 2/3% of the aggregate Facility
Commitments to such Borrower at such time;
provided
,
however
, that if and for so long as any such Lender shall be a Defaulting Lender, the
term "
Supermajority Required Facility Lenders
" shall mean Lenders (excluding each Defaulting Lender) having Facility
Commitments to such Borrower representing more than 66 2/3% of the aggregate
Facility Commitments to such Borrower (excluding the Facility Commitments of
each Defaulting Lender) at such time;
provided
further
,
however
, that if all of the Facility Commitments to such Borrower have been
terminated, the term "
Supermajority Required Facility Lenders
" shall mean Lenders to such Borrower holding Revolver Loans to, and
participating interest in LC Obligations (excluding amounts specified in
clause (c)
of such definition) owing by, such Borrower representing at least 66 2/3% of
the aggregate outstanding principal amount of Revolver Loans and LC
Obligations (excluding amounts specified in
clause (c)
of such definition) owing by such Borrower at such time. Notwithstanding the
foregoing, for purposes of this definition, any Fronting Exposure related to a
Defaulting Lender shall be deemed held as a Loan or LC Commitment by the
Lender that funded or issued the applicable Loan or Letter of Credit.
"
Swap Obligations
": with respect to any Loan party, its obligations under a Hedging Agreement
that constitutes a "swap" within the meaning of Section 1a(47) of the
Commodity Exchange Act.
"
Swingline Loan
": a U.S. Swingline Loan or a Canadian Swingline Loan, as applicable.
"
Taxes
": all present or future taxes, levies, imposts, duties, deductions,
withholdings (including backup withholding), assessments, fees or other
charges imposed by any Governmental Authority, including any interest,
additions to tax or penalties applicable thereto.
"
Termination Event
": (a) the wind up, or the filing of a notice of intended wind up with the
Superintendent, of a Canadian Pension Plan by a Canadian Facility Loan Party;
(b) the wind up of a Canadian Pension Plan by the Superintendent, FSCO or
other Governmental Authority; or (c) the institution of proceedings by any
Governmental Authority to terminate in whole or in part or have a trustee or
an administrator appointed to administer a Canadian Pension Plan.
"Term CORRA": for any Interest Period relating to a Loan denominated in
Canadian dollars, (a) the rate
per annum equal to the
forward-looking term rate based on CORRA, as published on the applicable
Reuters screen page (or other commercially available source providing such
quotations as may be designated by the Agent from time to time) on the day
that is two (2) Business Days prior to the first day of such Interest Period
(or if
such day is not a Business Day,
then
on the immediately preceding Business Day)
with a term equivalent to such Interest Period,
plus
(b) the Term CORRA Adjustment for
-65-
AmericasActive:19663285.13
-------------------------------------------------------------------------------
such Interest Period; provided, that, if Term CORRA shall be less than zero,
such rate shall be deemed
zero
for purposes of this Agreement.
"Term CORRA Adjustment": (a) 0.29547% (29.547 basis points) for an Interest
Period of one-month's duration and (b) 0.32138% (32.138 basis points) for an
Interest Period of three-months' duration.
"Term CORRA
Rate Loan": a Canadian Revolver Loan
that bears interest based on Term CORRA.
"Term CORRA Scheduled Unavailability Date": as defined in Section 1.7.2.
"
Term SOFR
": (a) for any Interest Period relating to a Term SOFR Loan,
a
the rate
per annum
rate
equal to the Term SOFR Screen Rate two U.S. Government Securities Business
Days prior to
the commencement of
such Interest Period
,
with a term equivalent to such Interest Period
(or
, provided that
if such rate is not published prior to 11:00 a.m. on
the
such
determination date,
then
the
applicable
Term SOFR means the
Term SOFR Screen Rate on the
first
U.S. Government Securities Business Day immediately prior thereto
)
, in each case
,
plus
the SOFR Adjustment for such Interest Period; and (b) for any interest
calculation relating to a U.S. Base Rate Loan
or a Canadian Base Rate Loan
on any day,
a fluctuating
the
rate
of interest
per annum
equal to the Term SOFR Screen Rate
two U.S. Government Securities Business Days prior to such date
with a term of one month commencing that day
, provided that
if the rate is not
published prior to 11:00 a.m. on such determination date, then Term SOFR means
the Term SOFR Screen Rate on the first U.S. Government Securities Business Day
immediately prior thereto, in each case, plus the SOFR Adjustment for such term
;
provided
, that
in no event shall
if
Term SOFR
determined in accordance with either of the foregoing provisions (a) or (b)
would otherwise
be less than zero
, Term SOFR shall be deemed zero for purposes of this Agreement
.
"
Term SOFR Loan
": a Loan that bears interest based on clause (a) of the definition of Term
SOFR.
"
Term SOFR Replacement Date
": as defined in
Section 1.6
.
"
Term SOFR Screen Rate
": the forward-looking SOFR term rate administered by CME (or any successor
administrator reasonably satisfactory to Agent) and published on the
applicable Reuters screen page (or such other commercially available source
providing such quotations as may be designated by Agent from time to time).
"
Term SOFR Successor Rate
": as defined in
Section 1.6
.
"
Third Amendment
": that certain Amendment No. 3 to Third Amended and Restated Loan Agreement
dated as of December 19, 2022, by and among the Loan Parties party thereto,
Agent and the Lenders party thereto.
"
Third Amendment Effective Date
": as defined in the Third Amendment.
"
Third Restatement Date
": November 2, 2016.
-66-
AmericasActive:19663285.13
-------------------------------------------------------------------------------
"
Tooling A/R
": as defined in
Section 12.2.1(e)
.
"
Tooling A/R Removal Notice
": as defined in
Section 12.2.1(e)
.
"
Total Revolver Exposure
": as of any date of determination the sum of the Canadian Revolver Exposure
and the U.S. Revolver Exposure on such date of determination.
"
Transactions
": collectively, (a) the entering into by the Loan Parties of the Loan
Documents to which they are or are intended to be a party, and the borrowings
hereunder and thereunder on the Third Restatement Date and application of the
proceeds as contemplated hereby and thereby, (b) the closing of the Fixed
Asset Facility (as defined prior to the Third Amendment Effective Date) and
the issuance of the Term B-1 Loans thereunder (c) the Senior Unsecured Notes
Issuance and (d) the payment of the fees and expenses incurred in connection
with the consummation of the foregoing that are required to be paid on or
around the Third Restatement Date.
"
Transferee
": any actual or potential Eligible Assignee, Participant or other Person
acquiring an interest in any Obligations.
"
Type
": any type of a Loan (i.e., U.S. Base Rate Loan, Term SOFR Loan,
Canadian BA
Term CORRA
Rate Loan, Canadian Base Rate Loan, or Canadian Prime Rate Loan).
"
UK Financial Institution
": any BRRD Undertaking (as
such term is
defined under the PRA Rulebook (as amended f
r
o
r
m time to time) promulgated by the United Kingdom Prudential Regulation
Authority) or any
p
P
erson subject to IFPRU 11.6 of the FCA Handbook (as amended from time to time)
promulgated by the United Kingdom Financial Conduct Authority, which includes
certain credit institutions and investment firms, and certain affiliates of
such credit institutions or investment firms.
"
UK Resolution Authority
": means the Bank of England or any other public administrative authority
having responsibility for the resolution of any UK Financial Institution.
"
Unfunded Pension Liability
": means the excess of the present value of a Pension Plan's benefit
liabilities under Section 4001(a)(16) of ERISA or a Canadian Pension Plan's
benefit liability under the PBA (or other equivalent pension legislation),
over the current value of the assets of that Pension Plan or Canadian Pension
Plan, as applicable, determined in accordance with the assumptions used for
funding the Pension Plan pursuant to Section 412 of the Code or the Canadian
Pension Plan pursuant to the PBA (or other equivalent pension legislation) for
the applicable plan year and an `Unfunded Pension Liability' also includes any
unfunded going concern deficit or solvency deficiency as identified in the
valuations prepared in respect of a Pension Plan or Canadian Pension Plan, as
applicable.
"
Uniform Commercial Code
" or "
UCC
": the Uniform Commercial Code as the same may from time to time be in effect
in the State of New York or the Uniform Commercial Code (or similar code or
statute) of another jurisdiction, to the extent it may be required to apply to
any item or items of Collateral.
"
Unrestricted Subsidiary
": (a) any Subsidiary of Holdings that at the time of determination shall be
designated an Unrestricted Subsidiary by the Board of Directors of such Person
in the manner provided below; and (b) any Subsidiary of an Unrestricted
Subsidiary. The Board of Directors of
-67-
AmericasActive:19663285.13
-------------------------------------------------------------------------------
Holdings may designate any Subsidiary of Holdings (including any newly
acquired or newly formed Subsidiary of Holdings but excluding any Borrower) to
be an Unrestricted Subsidiary unless such Subsidiary or any of its
Subsidiaries owns any Equity Interests or Indebtedness of, or owns or holds
any Lien on any property of, Holdings or any other Subsidiary of Holdings that
is not a Subsidiary of the Subsidiary to be so designated;
provided
that the Subsidiary to be so designated and its Subsidiaries do not at the
time of designation have and do not thereafter Incur any Indebtedness pursuant
to which the lender has recourse to any of the assets of Holdings or any of
its Restricted Subsidiaries;
provided
further
that either:
(i) the Subsidiary to be so designated has total consolidated assets of
$1,000 or less; or
(ii) if such Subsidiary has consolidated assets greater than $1,000, then
such designation would be permitted under
Section 10.2.3(a)(iv)
.
The Board of Directors of Holdings may designate any Unrestricted Subsidiary
to be a Restricted Subsidiary;
provided
,
however
, that immediately after giving effect to such designation:
(x) (1) Holdings could Incur $1.00 of additional Indebtedness pursuant to
Section 10.2.2
, or
(2) the Fixed Asset Fixed Charge Coverage Ratio for Parent and its
Restricted Subsidiaries on a consolidated basis would be equal to or greater
than the Fixed Asset Fixed Charge Coverage Ratio for Parent and its Restricted
Subsidiaries on a consolidated basis immediately prior to such designation, and
(y) no Event of Default shall have occurred and be continuing.
Any such designation by the Board of Directors of Holdings shall be evidenced
to Agent by promptly delivering to Agent a copy of the resolution of the Board
of Directors of Holdings giving effect to such designation and an Officer's
Certificate certifying that such designation complied with the foregoing
provisions.
"
U.S. Auto-Extension Letter of Credit
": as defined in
Section 2.2.1(e)
.
"
U.S. Availability
": as of any date of determination, the U.S. Borrowing Base as of such date of
determination
plus
solely for purposes of calculating "Availability" in connection with the
satisfaction of any Specified Transaction Conditions, the U.S. Suppressed
Amount on such date of determination
plus
the U.S. Designated Cash Amount on such date of determination
minus
the U.S. Revolver Exposure (calculated without duplication of any amounts
reserved under the U.S. LC Reserve) on such date of determination.
"
U.S. Availability Reserve
": the sum (without duplication) of (a) the Inventory Reserve with respect to
the U.S. Borrower's Inventory; (b) the U.S. Rent and Charges Reserve; (c) the
U.S. LC Reserve; (d) the U.S. Bank Product Reserve; (e) the aggregate amount
of liabilities secured by Liens upon the U.S. Facility Collateral that are
senior to Agent's Liens (but imposition of any such reserve
-68-
AmericasActive:19663285.13
-------------------------------------------------------------------------------
shall not waive an Event of Default arising therefrom); (f) the Canadian
Overadvance Loan Balance, if any, outstanding on such date; (g) the U.S.
Designated Foreign Guaranty Reserve; (h) [reserved]; (i) the U.S. Tooling
Vendor Reserve
and
,
(j)
the U.S. Non-Extending Lender Reserve and (k)
such additional reserves (including, without limitation, dilution reserves),
in such amounts and with respect to such matters, as Agent in its Permitted
Discretion may establish.
"
U.S. Bank Product Reserve
": the aggregate amount of reserves, as established by Agent from time to time
in its Permitted Discretion to reflect the reasonably anticipated liabilities
in respect of the then outstanding Secured Bank Product Obligations of the
U.S. Facility Loan Parties and their Restricted Subsidiaries (or any other
Affiliate thereof requested by the U.S. Borrower and approved by Agent).
"
U.S. Bankruptcy Code
": Chapter 11 of the United States Bankruptcy Code (11 U.S.C. (s)(s)101-1532,
as amended.
"
U.S. Base Rate
": for any day, a per annum rate equal to the greater of (a) the U.S. Prime
Rate for such day; (b) the Federal Funds Rate for such day, plus 0.50%; or (c)
Term SOFR for a one month interest period as of such day, plus 1.0%; provided
that if the U.S. Base Rate shall be less than zero, such rate shall be deemed
zero for purposes of this Agreement.
"
U.S. Base Rate Loan
": any Loan that bears interest based on the U.S. Base Rate.
"
U.S. Borrower
": as defined in the preamble to this Agreement.
"
U.S. Borrowing Base
": on any date of determination, an amount equal to the lesser of (a) the
Maximum U.S. Facility Amount minus (x) the Canadian Overadvance Loan Balance,
if any, outstanding on such date minus (y) the U.S. LC Reserve; and (b) (1)
the sum of (x) 85% of the Value of Eligible Accounts of the U.S. Borrower;
plus (y) the lesser of (i) 70% of the Value of Eligible Inventory of the U.S.
Borrower; and (ii) 85% of the NOLV Percentage of the Value of Eligible
Inventory of the U.S. Borrower; plus (z) 85% of the Value of Eligible Tooling
Accounts of the U.S. Borrower, minus (2) the U.S. Availability Reserve.
Notwithstanding the foregoing, in no event may the maximum amount of
availability under the U.S. Borrowing Base and the Canadian Borrowing Base
resulting from the inclusion of Eligible Tooling Accounts exceed $30,000,000
in the aggregate.
"
U.S. Collateral
": all of the Collateral other than the Foreign Collateral.
"
U.S. Cash Collateral Account
": a demand deposit, money market or other account established by Agent at
Bank of America or such other financial institution as Agent may select in its
discretion, which account shall be for the benefit of the Secured Parties and
shall be subject to Agent's Liens securing the Obligations.
"
U.S. Designated Cash Amount
": the aggregate amount of cash of the U.S. Domiciled Loan Parties deposited
in segregated DACA Deposit Accounts with Agent (excluding any portion thereof
which is subject to a Lien in favor of a Person other than Agent or is
otherwise restricted).
"
U.S. Designated Foreign Guaranty Reserve
": the aggregate amount of reserves established by Agent from time to time in
its Permitted Discretion in respect of any Designated Foreign Guaranty
established in favor of a U.S. Lender and/or an Affiliate of a U.S. Lender.
-69-
AmericasActive:19663285.13
-------------------------------------------------------------------------------
"
U.S. Domiciled Loan Party
": Holdings and each U.S. Subsidiary of Holdings (other than the Excluded
Subsidiaries), in each case, now or hereafter party hereto as a Loan Party;
and "
U.S. Domiciled Loan Parties
" means all such Persons, collectively.
"
U.S. Dominion Account
": a special account established by the U.S. Facility Loan Parties at Bank of
America or another bank reasonably acceptable to Agent, over which Agent has
exclusive control for withdrawal purposes.
"
U.S. Facility Collateral
": Collateral that now or hereafter secures (or is intended to secure) any of
the U.S. Facility Obligations.
"
U.S. Facility Guarantee
": each guarantee agreement (including this Agreement) at any time executed by
a U.S. Facility Guarantor in favor of Agent guaranteeing all or any portion of
the U.S. Facility Obligations.
"
U.S. Facility Guarantor
": each U.S. Domiciled Loan Party and each other Person (if any) who
guarantees payment and performance of any U.S. Facility Obligations.
"
U.S. Facility Loan Party
": the U.S. Borrower and each U.S. Facility Guarantor.
"
U.S. Facility Obligations
": all applicable Obligations of the U.S. Facility Loan Parties (including,
for the avoidance of doubt, the Obligations of the U.S. Domiciled Loan Parties
as guarantors of the Canadian Facility Obligations).
"
U.S. Facility Secured Parties
": Agent, U.S.
Issuing Bank, U.S. Lenders and Secured Bank Product Providers of Bank Products
to U.S. Facility Loan Parties and the Lead Arrangers.
"
U.S. Government Securities Business Day
": any
Business D
d
ay
,
except
any
for (a) a Saturday, (b) a Sunday or (c) a
day on which the Securities Industry and Financial Markets Association
, New York Stock Exchange or Federal Reserve Bank of New York is not open for
business because the day is a legal holiday under New York law or U.S. federal
law.
recommends that the fixed income departments of its members be closed for the
entire day for purposes of trading in United States government securities.
"
U.S. Issuing Bank
": (a) Bank of America or an Affiliate of Bank of America, as an issuer of
Letters of Credit under this Agreement and (b) Deutsche Bank AG New York
Branch or an Affiliate of Deutsche Bank AG New York Branch, as an issuer of
Letters of Credit under this Agreement. With respect to any Letter of Credit,
"U.S. Issuing Bank" shall mean the issuer thereof.
"
U.S. LC Obligations
": the sum (without duplication) of (a) all amounts owing by the U.S. Borrower
for any drawings under Letters of Credit; (b) the stated amount of all
outstanding Letters of Credit issued for the account of the U.S. Borrower; and
(c) all fees and other amounts owing with respect to Letters of Credit issued
for the account of the U.S. Borrower.
"
U.S. LC Reserve
": the aggregate of all U.S. LC Obligations, other than (a) those that have
been Cash Collateralized; and (b) if no Default or Event of Default exists,
amounts specified in
clause (c)
of the definition of U.S. LC Obligations.
-70-
AmericasActive:19663285.13
-------------------------------------------------------------------------------
"
U.S. Lenders
": Bank of America and each other Lender (other than the Canadian Lenders)
party hereto, including Agent in its capacity as a provider of U.S. Swingline
Loans.
"
U.S. Letter of Credit Sublimit
": $99,000,000.
"
U.S. Letters of Credit
": as defined in
Section 2.2.1
hereof.
"
U.S. Non-Extension Notice Date
": as defined in
Section 2.2.1(e)
.
"U.S. Non-Extending Lender Reserve": the aggregate amount of reserves, as
established by Agent from time to time in its Permitted Discretion at any time
after the date that is 91 days prior to the Facility Termination Date set
forth in
clause (a)
of the definition thereof, in an amount not to exceed the aggregate
Commitments then held by the Non-Extending Lender as of such date of
determination (it being understood and agreed that to the extent any such
reserve is implemented it shall be reduced on a dollar-for-dollar basis by the
amount of any such Commitments that are either terminated or assigned in
accordance with the terms hereof).
"
U.S. Overadvance
": as defined in
Section 2.1.5
hereof.
"
U.S. Overadvance Loan
": a U.S. Base Rate Loan made to the U.S. Borrower when a U.S. Overadvance
exists or is caused by the funding thereof.
"
U.S. Prime Rate
": the rate of interest announced by Bank of America from time to time as its
U.S. prime rate. Such rate is set by Bank of America on the basis of various
factors, including its costs and desired return, general economic conditions
and other factors, and is used as a reference point for pricing some loans,
which may be priced at, above or below such rate. Any change in such rate
publicly announced by Bank of America shall take effect at the opening of
business on the day specified in the announcement.
"
U.S. Reimbursement Date
": as defined in
Section 2.2.2(a)
.
"
U.S. Rent and Charges Reserve
": the aggregate of (a) all past due rent and other past due amounts owing by
any U.S. Facility Loan Party to any landlord, warehouseman, processor,
repairman, mechanic, shipper, freight forwarder, broker or other Person who
possesses any U.S. Facility Collateral or could assert a Lien on any such U.S.
Facility Collateral;
plus
(b) a reserve at least equal to three (3) months (or such shorter period as
Agent determines in its Permitted Discretion as it will take to liquidate the
ABL Priority Collateral at such location) rent and other charges that could
reasonably be expected to be payable to any such Person who possesses any U.S.
Facility Collateral or could reasonably be expected to assert a Lien thereon
under applicable Law, unless, in any such case, such Person has executed a
Collateral Access Agreement.
"
U.S. Revolver Commitment
": for any U.S. Lender, its obligation to make U.S. Revolver Loans and to
issue U.S. Letters of Credit, in the case of U.S. Issuing Bank, or participate
in U.S. LC Obligations (excluding amounts specified in
clause (c)
of such definition), in the case of the other U.S. Lenders, to the U.S.
Borrower up to the maximum principal amount, in each case, shown on
Schedule 1.1(a)
, or as hereafter determined pursuant to each Assignment and Acceptance to
which it is a party, as such U.S. Revolver Commitment may be adjusted from
time to time in accordance with the provisions of
-71-
AmericasActive:19663285.13
-------------------------------------------------------------------------------
Section 2.1.4,
or
11.2
. "
U.S. Revolver Commitments
" means the aggregate amount of such commitments of all U.S. Lenders.
"
U.S. Revolver Commitment Termination Date
": the earliest of (a) the Facility Termination Date, (b) the date on which
Loan Party Agent terminates or reduces to zero (0) the U.S. Revolver
Commitments pursuant to
Section 2.1.4
, and (c) the date on which the U.S. Revolver Commitments are terminated
pursuant to
Section 11.2
.
"
U.S. Revolver Exposure
": on any date, an amount equal to the sum of the Dollar Equivalent of the
U.S. Revolver Loans outstanding on such date plus the U.S. LC Obligations
(excluding amounts specified in
clause (c)
of such definition) on such date.
"
U.S. Revolver Loan
": a Revolver Loan made by a U.S. Lender to the U.S. Borrower pursuant to
Section 2.1.1(a)
, and any U.S. Swingline Loan, which Loan shall be denominated in Dollars and
shall be either a U.S. Base Rate Loan or a Term SOFR Loan, in each case as
selected by Agent or Loan Party Agent.
"
U.S. Revolver Notes
": collectively, each promissory note, if any, executed by the U.S. Borrower
in favor of a U.S. Lender to evidence the U.S. Revolver Loans funded from time
to time by such U.S. Lender, which shall be in the form of
Exhibit A-2
to this Agreement, together with any replacement or successor notes therefor.
"
U.S. Subsidiary
": a Subsidiary of Holdings that is organized under the laws of a state of the
United States or the District of Columbia.
"
U.S. Suppressed Amount
": to the extent that the amount calculated pursuant to clause (b) of the U.S.
Borrowing Base definition exceeds the then-current U.S. Revolver Commitment as
of any date of determination, the amount of any such excess designated in
writing by Loan Party Agent to Agent as "U.S. Suppressed Amount" under this
Agreement; provided, that in no event shall the U.S. Suppressed Amount exceed
$5,000,000
less
the Canadian Suppressed Amount as of such date of determination.
"
U.S. Swingline Loan
": any Borrowing of Base Rate U.S. Revolver Loans made to the U.S. Borrower
pursuant to
Section 4.1.3(a)
.
"
U.S. Tooling Vendor Reserve
": the aggregate amount of reserves, as established by Agent from time to time
in its Permitted Discretion to reflect the reasonably anticipated liabilities
in respect of the then outstanding amounts owing to all tooling vendors with
respect to the tooling giving rise to Eligible Tooling Accounts of the U.S.
Facility Loan Parties.
"
U.S. Unused Line Fee Rate
": at any date of determination, (x) for any day prior to the
Third
Fourth
Amendment Effective Date, such rate set forth in this Agreement as in effect
on such day and (y) as of the
Third
Fourth
Amendment Effective Date and each day thereafter, a rate per annum equal to
0.50%
; provided that, notwithstanding the foregoing, with respect to any day
occurring during the existence of a Pricing/Fee Reduction Period, the U.S.
Unused Line Fee Rate shall equal a rate per annum equal to 0.375%
.
-72-
AmericasActive:19663285.13
-------------------------------------------------------------------------------
"
Value
": without duplication of any item enumerated in the definition of Eligible
Inventory or Eligible Account: (a) for Inventory, its Dollar Equivalent value
determined on the basis of the lower of cost or market, calculated on a
first-in, first-out basis, and excluding any portion of cost attributable to
intercompany profit among the Borrowers, the other Loan Parties and their
Affiliates; and (b) for an Account, its Dollar Equivalent face amount, net of
any returns, rebates, discounts (calculated on the shortest terms), credits,
allowances or Taxes (including sales, excise or other taxes) that have been or
could be claimed by the Account Debtor or any other Person.
"
Voting Stock
": of any Person as of any date means the Capital Stock of such Person that is
at the time entitled to vote (without regard to the occurrence of any
contingency) in the election of the Board of Directors of such Person.
"
Wage Earner Protection Act Reserve
": on any date of determination, a reserve established from time to time by
Agent in its Permitted Discretion in such amount as Agent determines reflects
the amounts that may become due under the
Wage Earner Protection Program Act
with respect to the employees of any Loan Party employed in Canada which would
give rise to a Lien with priority under applicable Law over the Lien of Agent.
"
Weighted Average Life to Maturity
": when applied to any Indebtedness or Disqualified Stock, as the case may be,
at any date, the quotient obtained by dividing (1) the sum of the products of
the number of years from the date of determination to the date of each
successive scheduled principal payment of such Indebtedness or redemption or
similar payment with respect to such Disqualified Stock multiplied by the
amount of such payment, by (2) the sum of all such payments.
"
Wholly-Owned Restricted Subsidiary
": any Wholly Owned Subsidiary that is a Restricted Subsidiary.
"
Wholly Owned Subsidiary
": of any Person means a Subsidiary of such Person 100% of the outstanding
Capital Stock or other ownership interests of which (other than directors'
qualifying shares or shares or interests required to be held by foreign
nationals or other third parties to the extent required by applicable law)
shall at the time be owned by such Person or by one or more Wholly Owned
Subsidiaries of such Person and one or more Wholly Owned Subsidiaries of such
Person.
"
Withholding Agent
": means Agent and any Loan Party.
"
Write-Down and Conversion Powers
": means, (a) with respect to any EEA Resolution Authority, the write-down and
conversion powers of such EEA Resolution Authority from time to time under the
Bail-In Legislation for the applicable EEA Member Country, which write-down
and conversion powers are described in the EU Bail-In Legislation Schedule,
and (b) with respect to the United Kingdom, any powers of the applicable
Resolution Authority under the Bail-In Legislation to cancel, reduce, modify
or change the form of a liability of any UK Financial Institution or any
contract or instrument under which that liability arises, to convert all or
part of that liability into shares, securities or obligations of that
p
P
erson or any other
p
P
erson, to provide that any such contract or instrument is to have effect as if
a right had been exercised under it or to suspend any obligation in respect of
that liability or any of the powers under that Bail-In Legislation that are
related to or ancillary to any of those powers.
-73-
AmericasActive:19663285.13
-------------------------------------------------------------------------------
1.2
Accounting Terms
. Under the Loan Documents (except as otherwise specified herein), all
accounting terms shall be interpreted, all accounting determinations shall be
made, and all financial statements shall be prepared, in accordance with GAAP
applied on a basis consistent with the most recent audited financial
statements of the Loan Parties delivered to Agent before the Third Restatement
Date and using the same inventory valuation method as used in such financial
statements, except for any change required or permitted by GAAP if the Loan
Parties' certified public accountants concur in such change and the change is
disclosed to Agent. The Loan Party Agent, Lenders and Agent shall negotiate in
good faith to amend
Section 10.3
to preserve the original intent in light of such change in GAAP;
provided
, that until so amended
Section 10.3
shall continue to be computed in accordance with GAAP prior to such change
therein.
1.3
Uniform Commercial Code/PPSA
. As used herein, the following terms are defined in accordance with the UCC
in effect in the State of New York from time to time: "Chattel Paper,"
"Commercial Tort Claim," "Equipment," "Goods," "Instrument," "Investment
Property," "Letter-of-Credit Right" and "Supporting Obligation" and, as such
terms relate to any such property of any Canadian Domiciled Loan Party, such
terms shall refer to such property as defined in the PPSA. In addition, other
terms relating to Collateral used and not otherwise defined herein that are
defined in the UCC and/or the PPSA shall have the meanings set forth in the
UCC and/or the PPSA, as applicable
.
1.4
Certain Matters of Construction
. The terms "herein," "hereof," "hereunder" and other words of similar import
refer to this Agreement as a whole and not to any particular section,
paragraph or subdivision. Any pronoun used shall be deemed to cover all
genders. In the computation of periods of time from a specified date to a
later specified date, "from" means "from and including," and "to" and "until"
each mean "to but excluding." The terms "including" and "include" shall mean
"including, without limitation" and, for purposes of each Loan Document, the
parties agree that the rule of
ejusdem generis
shall not be applicable to limit any provision. Section titles appear as a
matter of convenience only and shall not affect the interpretation of any Loan
Document. All references to (a) laws or statutes include, unless otherwise
specified, all related rules, regulations, interpretations, amendments and
successor provisions; (b) any document, instrument or agreement includes any
amendments, waivers and other modifications, extensions or renewals (to the
extent not prohibited by the Loan Documents); (c) any section means, unless
the context otherwise requires, a section of this Agreement; (d) any exhibits
or schedules mean, unless the context otherwise requires, exhibits and
schedules attached hereto, which are hereby incorporated by reference; (e) any
Person includes its successors and assigns; (f) time of day means time of day
at Agent's notice address under
Section 14.3.1
; or (g) except as expressly provided, discretion of Agent, Issuing Bank or
any Lender means the sole and absolute discretion of such Person. All
calculations of Value, fundings of Loans, issuances of Letters of Credit and
payments of Obligations shall be in Dollars (except as otherwise expressly
provided herein) and, unless the context otherwise requires, all determinations
(including calculations of Borrowing Base and financial covenants) made from
time to time under the Loan Documents shall be made in light of the
circumstances existing at such time. Borrowing Base calculations shall be
consistent with historical methods of valuation and calculation, and otherwise
satisfactory to Agent (and not necessarily calculated in accordance with
GAAP). The Loan Parties shall have the burden of establishing any alleged
negligence, misconduct or lack of good faith by Agent, any Issuing Bank or any
Lender under any Loan Documents. No provision of any Loan Documents shall be
construed against any party by reason of such party having, or being deemed to
have, drafted the provision. Whenever the phrase "to the best of a Loan
Parties' knowledge" or words of similar import are used in any Loan Documents,
it means actual knowledge of a Responsible
-74-
AmericasActive:19663285.13
-------------------------------------------------------------------------------
Officer of a Loan Party. Whenever any payment, certificate, notice or other
delivery shall be stated to be due on a day other than a Business Day, the due
date for such payment or delivery shall be extended to the next succeeding
Business Day, and such extension of time shall in such case be included in the
computation of interest or fees, as the case may be;
provided
,
however
, that if such extension would cause payment of interest on or principal of
any Term SOFR Loan
or Term CORRA Rate Loan
to be made in the next calendar month, such payment shall be made on the
immediately preceding Business Day.
1.5
Interpretation (Quebec).
For purposes of any Collateral located in the Province of Quebec or charged by
any deed of hypothec (or any other Loan Document) and for all other purposes
pursuant to which the interpretation or construction of a Loan Document may be
subject to the laws of the Province of Quebec or a court or tribunal
exercising jurisdiction in the Province of Quebec, (1) "personal property"
shall be deemed to include "movable property", (2) "real property" shall be
deemed to include "immovable property", (3) "tangible property" shall be
deemed to include "corporeal property", (4) "intangible property" shall be
deemed to include "incorporeal property", (5)
"
"
security interest
"
"
,
"
"
mortgage
"
"
and
"
"
lien
"
"
shall be deemed to include a
"
"
hypothec
"
"
,
"
"
prior claim
"
"
and a
"
"
resolutory clause
"
"
, (6) all references to filing, registering or recording under the UCC or the
PPSA shall be deemed to include publication under the Civil Code of Quebec,
(7) all references to "perfection" of or "perfected" Liens shall be deemed to
include a reference to the "opposability" of such Liens to third parties, (8)
any "right of offset", "right of setoff" or similar expression shall be deemed
to include a "right of compensation", (9) "goods" shall be deemed to include
"corporeal movable property" other than chattel paper, documents of title,
instruments, money and securities, (10) an "agent" shall be deemed to include
a "mandatary", (11) "construction liens" shall be deemed to include "legal
hypothecs", (12) "joint and several" shall be deemed to include "solidary",
(13) "gross negligence or willful misconduct" shall be deemed to be
"intentional or gross fault", (14) "beneficial ownership" shall be deemed to
include "ownership on behalf of another as mandatary", (15) "servitude" shall
be deemed to include "easement", (16) "priority" shall be deemed to include
"prior claim", (17) "survey" shall be deemed to include "certificate of
location and plan", (18) "fee simple title" shall be deemed to include
"absolute ownership", and (19) "foreclosure" shall be deemed to include the
"exercise of a hypothecary right".
1.6
Term SOFR Successor Rate
.
Notwithstanding anything to the contrary in this Agreement or any other Loan
Documents, if Agent determines (which determination shall be conclusive absent
manifest error), or Loan Party Agent or Required Lenders notify Agent (with,
in the case of the Required Lenders, a copy to Loan Party Agent) that Loan
Party Agent or Required Lenders (as applicable) have determined, that:
1.6.1 adequate and reasonable means do not exist for ascertaining one or
three month interest periods of Term SOFR, including because the Term SOFR
Screen Rate is not available or published on a current basis, and such
circumstances are unlikely to be temporary; or
1.6.2 CME or any successor administrator of the Term SOFR Screen Rate or a
Governmental Authority having jurisdiction over Agent, CME or such
administrator with respect to its publication of Term SOFR, in each case
acting in such capacity, has made a public statement identifying a specific
date after which Term SOFR or the Term SOFR Screen Rate shall or will no
longer be made available or permitted to be used for determining the interest
rate of U.S. dollar denominated syndicated
-75-
AmericasActive:19663285.13
-------------------------------------------------------------------------------
loans, or shall or will otherwise cease, provided, that at the time of such
statement, there is no successor administrator satisfactory to Agent that will
continue to provide Term SOFR after such specific date (the latest date on
which Term SOFR or the Term SOFR Screen Rate are no longer available
permanently or indefinitely, "
Scheduled Unavailability Date
");
then, on a date and time determined by Agent (any such date, "
Term SOFR Replacement Date
"), which date shall be at the end of an Interest Period or on the relevant
interest payment date, as applicable, for interest calculated and, solely with
respect to
clause (b)
subsection 1.6.2
above, no later than the Scheduled Unavailability Date, Term SOFR will be
replaced hereunder and under any other applicable Loan Document with Daily
Simple SOFR plus the SOFR Adjustment, for any payment period for interest
calculated that can be determined by Agent, in each case, without any
amendment to, or further action or consent of any other party to, any Loan
Document ("
Term SOFR Successor Rate
"). If the Term SOFR Successor Rate is Daily Simple SOFR plus the SOFR
Adjustment, all interest will be payable on a monthly basis.
Notwithstanding anything to the contrary herein, (x) if Agent determines that
Daily Simple SOFR is not available on or prior to the Term SOFR Replacement
Date or (y) if the events or circumstances of the type described in clauses
(a) or (b) above have occurred with respect to the Term SOFR Successor Rate
then in effect, then in each case, Agent and Loan Party Agent may amend this
Agreement solely for the purpose of replacing Term SOFR or any then current
Term SOFR Successor Rate in accordance with this
Section 1.6
at the end of any Interest Period, relevant interest payment date or payment
period for interest calculated, as applicable, with an alternative benchmark
rate giving due consideration to any evolving or then existing convention for
such alternative benchmarks in similar U.S. dollar denominated syndicated
credit facilities syndicated and agented in the United States and, in each
case, including any mathematical or other adjustments to such benchmark giving
due consideration to any evolving or then existing convention for such
benchmarks in similar U.S. dollar denominated credit facilities syndicated and
agented in the United States. For the avoidance of doubt, any such proposed
rate and adjustments shall constitute a Term SOFR Successor Rate. Any such
amendment shall become effective at 5:00 p.m. on the fifth Business Day after
Agent posts such proposed amendment to all Lenders and Loan Party Agent
unless, prior to such time, Required Lenders deliver to Agent written notice
that Required Lenders object to the amendment.
Agent will promptly (in one or more notices) notify Loan Party Agent and
Lenders of implementation of any Term SOFR Successor Rate. A Term SOFR
Successor Rate shall be applied in a manner consistent with market practice;
provided, that to the extent market practice is not administratively feasible
for Agent, the Term SOFR Successor Rate shall be applied in a manner as
otherwise reasonably determined by Agent. Notwithstanding anything else
herein, if at any time any Term SOFR Successor Rate as so determined would
otherwise be less than zero, the Term SOFR Successor Rate will be deemed to be
zero for all purposes of the Loan Documents.
In connection with the implementation of a Term SOFR Successor Rate, the Agent
may make Conforming Changes from time to time with respect to SOFR, Term SOFR,
Canadian Base Rate or any Term SOFR Successor Rate. Notwithstanding anything
to the contrary in any Loan Document, any amendment implementing such changes
shall be effective without further action or consent of any party to any Loan
Document. The Agent shall post or provide each such amendment to Lenders and
the Loan Party Agent reasonably promptly after it becomes effective.
-76-
AmericasActive:19663285.13
-------------------------------------------------------------------------------
1.7
Canadian BA
Term CORRA Successor
Rate
Amendment
. Notwithstanding anything to the contrary in this Agreement or any other Loan
Documents, if Agent determines (which determination shall be conclusive absent
manifest error), or Loan Party Agent or Required Lenders notify Agent (with,
in the case of the Required Lenders, a copy to Loan Party Agent) that Loan
Party Agent or Required Lenders (as applicable) have determined, that:
1.7.1 adequate and reasonable means do not exist for ascertaining
the Canadian BA Rate
Term CORRA
for any applicable
one or three month
interest period, because the applicable
Canadian Dollar Bankers' Acceptances rate quote on the CDOR Page used by Agent
to determine the Canadian BA Rate ("
CDOR Screen Rate
")
screen rate
is not available or published on a current basis and such circumstances are
unlikely to be temporary; or
1.7.2
the CDOR Scheduled Unavailability Date has occurred;
1.7.2
the administrator of CORRA or Term CORRA, or a Governmental Authority having
jurisdiction over the Agent or such administrator has made a public statement
identifying a specific date after which one and three month interest periods
of Term CORRA shall or will no longer be made available or permitted to be
used for determining the interest rate of syndicated loans denominated in
Canadian Dollars, or shall or will otherwise cease, provided, that at the time
of such statement, there is no successor administrator satisfactory to Agent
that will continue to provide such interest periods of Term CORRA (the latest
date on which one and three month interests periods of Term CORRA are no
longer available permanently or indefinitely, the "Term CORRA Scheduled
Unavailability Date");
then, reasonably promptly after such determination or receipt of notice by
Agent,
on a date and time determined by Agent, which date shall be at the end of an
Interest Period or on the relevant interest payment date, as applicable, for
interest calculated and, solely with respect to subsection 1.7.2 above, no
later than the Term CORRA Scheduled Unavailability Date,
Agent and the Loan Party Agent may amend this Agreement to replace
the CDOR Screen Rate or
Term CORRA or any
the
n
current
Canadian
BA
Successor
Rate (if necessary)
in accordance with this Section at the end of any Interest Period, relevant
interest payment date or payment period for interest calculated, as applicable,
with an alternate benchmark rate (including any mathematical or other
adjustments to the benchmark (if any) incorporated therein), giving due
consideration to any evolving or then existing convention for similar
Canadian Dollar denominated
syndicated credit facilities
providing for Canadian Dollar-denominated loans which are syndicated and
agented in the United States
for such alternative benchmarks ("
CDOR
Canadian
Successor Rate
")
, together with any
. For the avoidance of doubt, any such
proposed
CDOR
rate and adjustments shall constitute a Canadian
Successor Rate
Conforming Changes and the
. Any such
amendment shall
be
become
effective at 5:00 p.m. on the fifth Business Day after Agent posts
the
such proposed
amendment to all Lenders and
Canadian Borrower
Loan Party Agent
unless, prior to such time, Required Lenders
notify
deliver to
Agent
written notice
that
Required Lenders object to
the
y
do not accept it
amendment
.
If no CDOR Successor Rate has been determined and the circumstances under
clause 1.7.1 above exist or the CDOR Scheduled Unavailability Date has
occurred, Agent will promptly notify Canadian Borrower and Lenders.
Thereafter, the obligation of Lenders to make or maintain Canadian BA Rate
Loans shall be suspended (to the extent of the affected Canadian BA Rate Loans
or Interest Periods). Upon receipt of such notice, Canadian Borrower may
revoke any pending request for funding,
-77-
AmericasActive:19663285.13
-------------------------------------------------------------------------------
conversion or continuation of a Canadian BA Rate Loan (to the extent of the
affected Canadian BA Rate Loans or Interest Periods) or, failing that, will be
deemed to have requested a Canadian Prime Rate Loan.
Agent will promptly (in one or more notices) notify Loan Party Agent and
Lenders of implementation of any Canadian Successor Rate. A Canadian Successor
Rate shall be applied in a manner consistent with market practice; provided,
that to the extent market practice is not administratively feasible for Agent,
the Canadian Successor Rate shall be applied in a manner as otherwise
reasonably determined by Agent. Notwithstanding anything else herein, if at
any time any Canadian Successor Rate as so determined would otherwise be less
than zero, the Canadian Successor Rate will be deemed to be zero for all
purposes of the Loan Documents.
In connection with the implementation of a Canadian Successor Rate, the Agent
may make Canadian Successor Rate
Conforming Changes from time to time with respect to CORRA, Term CORRA,
Canadian Prime Rate or any Canadian Successor Rate. Notwithstanding anything
to the contrary in any Loan Document, any amendment implementing such changes
shall be effective without further action or consent of any party to any Loan
Document. The Agent shall post or provide each such amendment to Lenders and
the Loan Party Agent reasonably promptly after it becomes effective.
1.8
Divisions
. For all purposes under the Loan Documents, in connection with any division
or plan of division under Delaware law (or any comparable event under a
different jurisdiction's laws): (a) if any asset, right, obligation or
liability of any Person becomes the asset, right, obligation or liability of a
different Person, then it shall be deemed to have been transferred from the
original Person to the subsequent Person, and (b) if any new Person comes into
existence, such new Person shall be deemed to have been organized on the first
date of its existence by the holders of its Equity Interests at such time.
1.9
Interest Rates
. The Agent does not warrant, nor accept responsibility, nor shall the Agent
have any liability with respect to the administration, submission or any other
matter related to the rates in the definition of "Term SOFR"
or
, "Term CORRA",
"Canadian Base
Rate" or "Canadian Prime
Rate" or with respect to any rate that is an alternative or replacement or
successor to any of such rate (including, without limitation, any Term SOFR
Successor Rate
or any Canadian Successor Rate
) or the effect of any of the foregoing, or of any Conforming Changes
or Canadian Successor Rate Conforming Changes
.
SECTION 2. CREDIT FACILITIES
2.1
Commitment
.
2.1.1
Revolver Loans
.
(a)
U.S. Revolver Loans to the U.S. Borrower
. Each U.S. Lender agrees, severally and not jointly with the other U.S.
Lenders, upon the terms and subject to the conditions set forth herein, to
make U.S. Revolver Loans in Dollars to the U.S. Borrower on any Business Day
during the period from the Third Restatement Date to the U.S. Revolver
Commitment Termination Date, not to exceed in aggregate principal amount
outstanding at any time, such U.S. Lender's U.S. Revolver Commitment at such
time, which U.S. Revolver Loans may be repaid and reborrowed in accordance
with the provisions of this Agreement;
provided
, however, that such U.S. Lenders shall have no obligation to the U.S. Borrower
-78-
AmericasActive:19663285.13
-------------------------------------------------------------------------------
whatsoever to honor any request for a U.S. Revolver Loan (x) on or after the
U.S. Revolver Commitment Termination Date or (y) if the amount of the proposed
U.S. Revolver Loan exceeds U.S. Availability on the proposed funding date for
such U.S. Revolver Loan. Each Borrowing of U.S. Revolver Loans shall be funded
by U.S. Lenders on a Pro Rata basis. The U.S. Revolver Loans shall bear
interest as set forth in
Section 3.1
. Each U.S. Revolver Loan shall, at the option of the U.S. Borrower, be made
or continued as, or converted into, part of one or more Borrowings that,
unless specifically provided herein, shall consist entirely of U.S. Base Rate
Loans or Term SOFR Loans. The U.S. Revolver Loans shall be repaid in
accordance with the terms of this Agreement and shall be secured by all of the
U.S. Facility Collateral. Each U.S. Revolver Loan shall be funded in Dollars.
(b)
Canadian Revolver Loans to Canadian Borrower
. Each Canadian Lender agrees, severally and not jointly with the other
Canadian Lenders, upon the terms and subject to the conditions set forth
herein, to make Canadian Revolver Loans to the Canadian Borrower on any
Business Day during the period from the Third Restatement Date to the Canadian
Revolver Commitment Termination Date, not to exceed in aggregate principal
amount outstanding at any time, such Canadian Lender's Canadian Revolver
Commitment at such time, which Canadian Revolver Loans may be repaid and
reborrowed in accordance with the provisions of this Agreement;
provided
, however, that Canadian Lenders shall have no obligation to the Canadian
Borrower whatsoever to honor any request for a Canadian Revolver Loan on or
after the Canadian Revolver Commitment Termination Date or if the amount of
the proposed Canadian Revolver Loan exceeds Canadian Availability on the
proposed funding date for such Canadian Revolver Loan. Each Borrowing of
Canadian Revolver Loans shall be funded by Canadian Lenders on a Pro Rata
basis. The Canadian Revolver Loans shall bear interest as set forth in
Section 3.1
. Each Canadian Revolver Loan shall, at the option of the Canadian Borrower,
be made or continued as, or converted into, part of one or more Borrowings
that, unless specifically provided herein, shall consist entirely of Canadian
Prime Rate Loans or
Canadian BA
Term CORRA
Rate Loans if denominated in Canadian Dollars
,
or Canadian Base Rate Loans or Term SOFR Loans if denominated in Dollars. The
Canadian Revolver Loans shall be repaid in accordance with the terms of this
Agreement and shall be secured by all of the Canadian Facility Collateral.
Each Canadian Revolver Loan shall be funded in Canadian Dollars or, at the
option of the Canadian Borrower, Dollars and repaid in the same currency as
the underlying Canadian Revolver Loan was made.
(c)
Cap on Total Revolver Exposure
. Notwithstanding anything to the contrary contained in this
Section 2.1.1
, in no event shall any Borrower be entitled to receive a Revolver Loan if at
the time of the proposed funding of such Loan (and after giving effect thereto
and the application of the proceeds thereof and all pending requests for
Loans), the Total Revolver Exposure exceeds (or would exceed) the lesser of
the Maximum Facility Amount and the Commitments.
2.1.2
Revolver Notes
. The Revolver Loans made by each Lender and interest accruing thereon shall
be evidenced by the records of Agent and such Lender. At the request of any
Lender, the Borrower to which such Lender has extended Commitments shall
deliver a Revolver Note to such Lender in the amount of such Lender's
aggregate U.S. Revolver Commitment or Canadian Revolver Commitment, as
applicable.
-79-
AmericasActive:19663285.13
-------------------------------------------------------------------------------
2.1.3
Use of Proceeds
. The proceeds of Revolver Loans shall be used by the Borrowers solely (a) to
issue standby or commercial letters of credit, and (b) to finance ongoing
working capital needs and other lawful general corporate purposes of the
Borrowers and their Restricted Subsidiaries. No part of the proceeds of any
Loan shall, nor shall any Letter of Credit, in any case, be used directly or
indirectly in violation of any Anti-Terrorism Laws or Sanctions.
2.1.4
Reduction or Termination of Commitments; Increase of Commitments
.
(a) The Canadian Revolver Commitments shall terminate on the Canadian
Revolver Commitment Termination Date and the U.S. Revolver Commitments shall
terminate on the U.S. Revolver Commitment Termination Date, in each case,
unless sooner terminated in accordance with this Agreement. Upon at least
three (3) Business Days' prior written notice to Agent from Loan Party Agent,
(i) the U.S. Borrower may, at its option, terminate the U.S. Revolver
Commitments and this credit facility
and/or
,
(ii) the Canadian Borrower may, at its option, terminate the Canadian Revolver
Commitment
and/or (iii) the Borrowers may, at their option, terminate the Commitments of
the Non-Extending Lender on a non-ratable basis at any time after the Fourth
Amendment Effective Date
, in each case, without premium or penalty (other than funding losses payable
pursuant to
Section 3.9
). If the U.S. Borrower elects to reduce to zero (0) or terminate the U.S.
Revolver Commitments pursuant to the previous sentence, the Canadian Revolver
Commitments shall automatically terminate concurrently with the termination of
the U.S. Revolver Commitments. Any notice of termination given by the Loan
Party Agent pursuant to this
Section 2.1.4
shall be irrevocable;
provided
,
however
, that notice may be contingent on the occurrence of a refinancing or the
consummation of a sale, transfer, lease or other disposition of assets and may
be revoked or the termination date deferred if the refinancing or sale,
transfer, lease or other disposition of assets does not occur. On the Canadian
Revolver Commitment Termination Date, the Canadian Borrower (and other
Canadian Facility Loan Parties, if applicable) shall make Full Payment of all
Canadian Facility Obligations. On the U.S. Revolver Commitment Termination
Date, the U.S. Borrower (and other U.S. Facility Loan Parties, if applicable)
shall make Full Payment of all U.S. Facility Obligations.
(b) So long as (i) no Default or Event of Default then exists or would
result therefrom, (ii) no U.S. Overadvance or Canadian Overadvance then exists
or would result therefrom, and (iii) after giving effect thereto, U.S.
Availability would exceed $10,000,000, Loan Party Agent may permanently and
irrevocably reduce the Maximum Facility Amount by giving Agent at least three
(3) Business Days' prior irrevocable written notice thereof from a Responsible
Officer of Loan Party Agent, which notice shall (1) specify the date (which
shall be a Business Day) and amount of such reduction (which shall be in a
minimum amount of $5,000,000 and increments of $1,000,000 in excess thereof),
(2) specify the allocation of such reduction to, and the corresponding
reductions of, each of the Maximum Canadian Facility Amount and/or the Maximum
U.S. Facility Amount (and the respective Canadian Revolver Commitments and the
U.S. Revolver Commitments in respect thereof, each of which shall be allocated
to Lenders among the Borrowers on a Pro Rata basis at the time of such
reduction) and (3) certify the satisfaction of the conditions specified in the
foregoing
clauses (i)
and
(ii)
and this
clause (iii)
(including calculations thereof in reasonable detail) as of the effective date
of any such proposed reduction;
provided
,
however
, that such notice may be contingent on the occurrence of a refinancing or
incurrence of Indebtedness permitted under
Section 10.2.2
or consummation of a sale, transfer, lease or other
-80-
AmericasActive:19663285.13
-------------------------------------------------------------------------------
disposition of assets and may be revoked or the reduction date deferred if the
refinancing, incurrence or sale, transfer, lease or other disposition of
assets does not occur. Without limiting the foregoing, (A) each reduction in
the Maximum Canadian Facility Amount and the Canadian Revolver Commitments
shall in no event exceed Canadian Availability and be in a minimum amount of
$5,000,000, and (B) each reduction in the Maximum U.S. Facility Amount and the
U.S. Revolver Commitments shall in no event exceed U.S. Availability and be in
a minimum amount of $5,000,000.
(c) Provided no Default or Event of Default then exists or would result
therefrom after the Third Restatement Date, upon notice to Agent (which shall
promptly notify all Applicable Lenders), the Loan Party Agent may from time to
time, request an increase in the U.S. Revolver Commitments or the Canadian
Revolver Commitments, as applicable, by an amount not exceeding $100,000,000
(less the amount of any FILO Credit Facility) in the aggregate (resulting in
maximum total Facility Commitments of $280,000,000) during the term of this
Agreement; provided that (i) any such request for an increase shall be in a
minimum amount of $5,000,000 and (ii) the Loan Party Agent may make a maximum
of two (2) such requests in the aggregate (resulting in a maximum of two (2)
total increases) during the term of this Agreement. At the time of sending
such notice, a requesting Borrower (in consultation with Agent) shall specify
the time period within which the Applicable Lenders are requested to respond
(which shall in no event be less than ten (10) Business Days from the date of
delivery of such notice to such Lenders (or such lesser period as is
acceptable to such Lenders)).
(d) Each Applicable Lender shall notify Agent within such time period
whether or not it agrees to increase its Facility Commitment to the Loan Party
Agent and, if so, whether by an amount equal to, greater than, or less than
its Pro Rata share of such requested increase. Any Applicable Lender not
responding within such time period shall be deemed to have declined to
increase its Facility Commitment.
(e) Agent shall notify the Loan Party Agent and each Applicable Lender of
such Applicable Lenders' responses to each request made hereunder. To achieve
the full amount of a requested increase, and subject to the approval of Agent
and the applicable Issuing Bank (which approvals, so long as no Event of
Default shall have occurred and be continuing, shall not be unreasonably
withheld), the Loan Party Agent may also invite additional Eligible Assignees
to become Lenders pursuant to a joinder agreement in form and substance
reasonably satisfactory to Agent and its counsel.
(f) If the U.S. Revolver Commitments or the Canadian Revolver Commitments
are increased in accordance with this Section, Agent and the Loan Party Agent
shall determine the effective date (the "
Facility Commitment Increase Effective Date
") and the final allocation of such increase. Agent shall promptly notify the
Loan Party Agent and the Applicable Lenders (and any additional Lender added
pursuant to
Section 2.1.4(e)
) of the final allocation of such increase and the Facility Commitment
Increase Effective Date.
(g) As a condition precedent to such increase, the Loan Party Agent shall
deliver to Agent a certificate of each Loan Party dated as of the Facility
Commitment Increase Effective Date (in sufficient copies for each Lender)
signed by a Responsible Officer of such Loan Party (i) certifying and
attaching the resolutions adopted by such Loan Party approving or consenting
to such increase, and (ii) in the case of the Borrowers, certifying that,
before and after giving effect to such increase, (A) the representations and
warranties contained in
Section 9
and the other Loan Documents are true and correct in all material
-81-
AmericasActive:19663285.13
-------------------------------------------------------------------------------
respects (or, with respect to representations and warranties qualified by
materiality, in all respects) on and as of the Facility Commitment Increase
Effective Date (except for representations and warranties that expressly
relate to an earlier date, in which case such representations and warranties
shall be true and correct in all material respects (or, with respect to
representations and warranties qualified by materiality, in all respects) as
of such earlier date), and except that for purposes of this
Section 2.1.4
, the representations and warranties contained in
Section 9.1.8(a)
shall be deemed to refer to the most recent statements furnished pursuant to
clauses (a)
and
(c)
of
Section 10.1.1
, and (B) no Default exists. The requesting Borrower shall prepay any Revolver
Loans of such Borrower outstanding on the Facility Commitment Increase
Effective Date (and pay any additional amounts required pursuant to
Section 3.9
) to the extent necessary to keep the outstanding Revolver Loans of such
Borrower ratable with any revised Pro Rata share arising from any nonratable
increase in the Facility Commitments under this Section.
(h) No consent shall be required of any Lender not increasing its Facility
Commitments in connection with an increase of the Facility Commitments in
accordance with this
Section 2.1.4
, and the Borrowers, Agent and each Lender shall enter into such amendments to
the Loan Documents as may be reasonably requested by the Loan Party Agent and
Agent to make conforming changes consistent with this
Section 2.1.4
.
(i) This Section shall supersede any provisions in
Section 14.1
to the contrary.
2.1.5
Overadvances
.
(a) If at any time (a) the Canadian Revolver Exposure exceeds the Canadian
Borrowing Base (a "
Canadian Overadvance
") or (b) the sum of the U.S. Revolver Exposure exceeds the U.S. Borrowing
Base (a "
U.S. Overadvance
"), the excess amount shall, subject to
Section 5.2
and this
Section 2.1.5
, be immediately due and payable by the Canadian Borrower or the U.S.
Borrower, as applicable
on demand
by Agent. Agent may require the Applicable Lenders to honor requests for
Overadvance Loans and to forbear from requiring the applicable Borrower to
cure an Overadvance, (a) when no Event of Default is known to Agent, as long
as (i) the Overadvance does not continue for more than thirty (30) consecutive
days (and no Overadvance may exist for at least five (5) consecutive days
thereafter before further Overadvance Loans are required), and (ii) the
Overadvance is not known by Agent to exceed $2,500,000, with respect to the
Canadian Borrower, or $5,000,000 in the aggregate, with respect to the U.S.
Borrower; and (b) regardless of whether an Event of Default exists, if Agent
discovers an Overadvance not previously known by it to exist, as long as from
the date of such discovery the Overadvance (i) is not increased by more than
$2,500,000, with respect to the Canadian Borrower or $5,000,000 in the
aggregate, with respect to the U.S. Borrower, and (ii) does not continue for
more than thirty (30) consecutive days. In no event shall Overadvance Loans be
required that would cause (i) the Canadian Revolver Exposure to exceed the
aggregate Canadian Revolver Commitments or (ii) the U.S. Revolver Exposure to
exceed the aggregate U.S. Revolver Commitments. All Canadian Overadvance Loans
shall constitute Canadian Facility Obligations secured by the Canadian
Facility Collateral and shall be entitled to all benefits of the Loan
Documents. All U.S. Overadvance Loans shall constitute U.S. Facility
Obligations secured by the U.S. Facility Collateral and shall be entitled to
all benefits of the Loan Documents. No Overadvance shall result in an Event of
Default due to a Borrower's failure to comply with
Section 2.1.1
for so long as such Overadvance remains outstanding in accordance with the
terms of this paragraph, but solely with respect to the amount of such
Overadvance. In no event shall
-82-
AmericasActive:19663285.13
-------------------------------------------------------------------------------
any Borrower or other Loan Party be deemed a beneficiary of this Section nor
authorized to enforce any of its terms. Agent agrees to use its commercially
reasonable best efforts to promptly notify the Lenders of the issuance of an
Overadvance Loan;
provided
, that Agent shall have no liability for any failure to provide any such notice.
2.1.6
Protective Advances
. Agent shall be authorized, in its discretion, at any time that any
conditions in Section 6 are not satisfied, to make U.S. Base Rate Loans and
Canadian Prime Rate Loans, as applicable (each a "Protective Advance") (a) up
to an aggregate amount of $2,500,000, with respect to the Canadian Borrower,
or $5,000,000, with respect to the U.S. Borrower, outstanding at any time, if
Agent deems such Loans necessary or desirable to preserve or protect
Collateral, or to enhance the collectability or repayment of Obligations; or
(b) to pay any other amounts chargeable to the Loan Parties under any Loan
Documents, including costs, fees and expenses. Each Applicable Lender shall
participate in each Protective Advance on a Pro Rata basis. In no event shall
Protective Advances be required that would cause (x) the outstanding U.S.
Revolver Loans and U.S. LC Obligations to exceed the aggregate U.S. Revolver
Commitments or (y) the outstanding Canadian Revolver Loans and Canadian LC
Obligations to exceed the aggregate Canadian Revolver Commitments. Required
Facility Lenders may at any time revoke Agent's authority to make further
Protective Advances to the applicable Borrower by written notice to Agent.
Absent such revocation, Agent's determination that funding of a Protective
Advance is appropriate shall be conclusive. All Protective Advances made by
Agent with respect to U.S. Facility Loan Parties shall be U.S. Facility
Obligations, secured by the U.S. Facility Collateral and shall be treated for
all purposes as Extraordinary Expenses and all Protective Advances made by
Agent with respect to Canadian Facility Loan Parties shall be Canadian
Facility Obligations, secured by the Canadian Facility Collateral and shall be
treated for all purposes as Extraordinary Expenses. Agent agrees to use its
commercially reasonable best efforts to promptly notify the Lenders of the
extension of a Protective Advance; provided, that Agent shall have no
liability for any failure to provide any such notice.
2.1.7
Prepayments
. If Holdings or any Restricted Subsidiary consummates one or more Asset Sales
of Fixed Asset Priority Collateral which result in realization or receipt by
Holdings or such Restricted Subsidiary of aggregate Net Proceeds in excess of
$20,000,000 in any fiscal year, Holdings shall (1) give written notice to
Agent thereof promptly after the date of the realization or receipt of such
Net Proceeds and (2) except to the extent Holdings is required to repay the
Fixed Asset Facility with such Net Proceeds or is permitted under the Fixed
Asset Facility to reinvest such Net Proceeds in assets used or useful in the
business, prepay an aggregate principal amount of Loans in an amount equal to
100% of all Net Proceeds received from such Asset Sale within five (5)
Business Days of receipt thereof by Holdings or such Restricted Subsidiary or
the end of such reinvestment period, whichever is later.
2.2
U.S. Letter of Credit Facility
.
2.2.1
Issuance of Letters of Credit
. U.S. Issuing Bank agrees to issue Letters of Credit for the account of the
U.S. Borrower or any of its Subsidiaries ("
U.S. Letters of Credit
") (provided that if the applicant is a Person other than the U.S. Borrower,
the U.S. Borrower shall be a co-applicant) from time to time until fifteen
(15) days prior to the Facility Termination Date (or until the U.S. Revolver
Commitment Termination Date, if earlier), on the terms set forth herein,
including the following:
-83-
AmericasActive:19663285.13
-------------------------------------------------------------------------------
(a) The U.S. Borrower acknowledges that U.S. Issuing Bank's willingness to
issue any U.S. Letter of Credit is conditioned upon U.S. Issuing Bank's
receipt of an LC Application with respect to the requested U.S. Letter of
Credit, as well as such other instruments and agreements as U.S. Issuing Bank
may customarily require for issuance of a letter of credit of similar type and
amount. U.S. Issuing Bank shall have no obligation to issue any U.S. Letter of
Credit unless (i) U.S. Issuing Bank receives an LC Request and LC Application
at least three (3) Business Days prior to the requested date of issuance; (ii)
each LC Condition is satisfied; and (iii) if a Defaulting Lender that is a
U.S. Lender exists, such Defaulting Lender or the U.S. Borrower, as
applicable, have entered into arrangements satisfactory to Agent and U.S.
Issuing Bank to eliminate any Fronting Exposure associated with such Lender
(it being understood that Cash Collateralization of a Defaulting Lender's Pro
Rata share of the requested U.S. Letter of Credit is satisfactory to Agent and
U.S. Issuing Bank). If, in sufficient time to act, U.S. Issuing Bank receives
written notice from the Required Facility Lenders that a LC Condition has not
been satisfied, U.S. Issuing Bank shall not issue the requested U.S. Letter of
Credit. Prior to receipt of any such notice, U.S. Issuing Bank shall not be
deemed to have knowledge of any failure of LC Conditions.
(b) Letters of Credit may be requested by the U.S. Borrower to support
obligations of any Loan Party or any Subsidiary incurred in the ordinary
course of business, or as otherwise approved by Agent. The renewal or
extension of any U.S. Letter of Credit shall be treated as the issuance of a
new U.S. Letter of Credit, except that delivery of a new LC Application may be
required at the discretion of U.S. Issuing Bank.
(c) The U.S. Borrower assumes all risks of the acts, omissions or misuses
by the beneficiary of any U.S. Letter of Credit. In connection with issuance
of any U.S. Letter of Credit, none of Agent, U.S. Issuing Bank or any U.S.
Lender shall be responsible for the existence, character, quality, quantity,
condition, packing, value or delivery of any goods purported to be represented
by any Documents; any differences or variation in the character, quality,
quantity, condition, packing, value or delivery of any goods from that
expressed in any Documents; the form, validity, sufficiency, accuracy,
genuineness or legal effect of any Documents or of any endorsements thereon;
the time, place, manner or order in which shipment of goods is made; partial
or incomplete shipment of, or failure to ship, any goods referred to in a U.S.
Letter of Credit or Documents; any deviation from instructions, delay, default
or fraud by any shipper or other Person in connection with any goods, shipment
or delivery; any breach of contract between a shipper or vendor and the U.S.
Borrower; errors, omissions, interruptions or delays in transmission or
delivery of any messages, by mail, cable, telegraph, telex, telecopy, e-mail,
telephone or otherwise; errors in interpretation of technical terms; the
misapplication by a beneficiary of any U.S. Letter of Credit, or the proceeds
thereof; or any consequences arising from causes beyond the control of U.S.
Issuing Bank, Agent or any U.S. Lender, including any act or omission of a
Governmental Authority. The rights and remedies of U.S. Issuing Bank under the
Loan Documents shall be cumulative. U.S. Issuing Bank shall be fully
subrogated to the rights and remedies of each beneficiary whose claims against
the U.S. Borrower are discharged with proceeds of any U.S. Letter of Credit
issued for the account of the U.S. Borrower.
(d) In connection with its administration of and enforcement of rights or
remedies under any Letters of Credit or LC Documents, U.S. Issuing Bank shall
be entitled to act, and shall be fully protected in acting, upon any
certification, documentation or communication in whatever form believed by
U.S. Issuing Bank, in good faith, to be genuine and correct and to have been
signed, sent or made by a proper Person. U.S. Issuing Bank may consult with
and employ legal counsel, accountants and other
-84-
AmericasActive:19663285.13
-------------------------------------------------------------------------------
experts to advise it concerning its obligations, rights and remedies, and
shall be entitled to act upon, and shall be fully protected in any action
taken in good faith reliance upon, any advice given by such experts. U.S.
Issuing Bank may employ agents and attorneys-in-fact in connection with any
matter relating to Letters of Credit or LC Documents, and shall not be liable
for the negligence or misconduct of agents and attorneys-in-fact selected with
reasonable care.
(e) If the U.S. Borrower so requests in any applicable Letter of Credit
application, U.S. Issuing Bank may, in its discretion, agree to issue a Letter
of Credit that has automatic extension provisions (each, a "
U.S. Auto-Extension Letter of Credit
");
provided
that any such U.S. Auto-Extension Letter of Credit must permit U.S. Issuing
Bank to prevent any such extension at least once in each twelve-month period
(commencing with the date of issuance of such Letter of Credit) by giving
prior notice to the beneficiary thereof not later than a day (the "
U.S. Non-Extension Notice Date
") in each such twelve-month period to be agreed upon at the time such Letter
of Credit is issued. Unless otherwise directed by U.S. Issuing Bank, the U.S.
Borrower shall not be required to make a specific request to the Issuing Bank
for any such extension. Once a U.S. Auto-Extension Letter of Credit has been
issued, the U.S. Lenders shall be deemed to have authorized (but may not
require) U.S. Issuing Bank to permit the extension of such Letter of Credit at
any time to an expiry date at least 15 Business Days prior to the Facility
Termination Date;
provided
,
however
, that U.S. Issuing Bank shall not permit any such extension if (A) U.S.
Issuing Bank has determined that it would not be permitted, or would have no
obligation at such time to issue such Letter of Credit in its revised form (as
extended) under the terms hereof, or (B) it has received notice (which may be
by telephone or in writing) on or before the day that is seven Business Days
before the U.S. Non-Extension Notice Date (1) from Agent that the Required
Lenders have elected not to permit such extension or (2) from Agent, any
Lender or the U.S. Borrower, as applicable, that one or more of the applicable
conditions specified in
Section 6.2
is not then satisfied, and in each such case directing U.S. Issuing Bank not
to permit such extension.
(f) By their execution of this Agreement, the parties hereto agree that on
the Third Restatement Date (without any further action by any Person), the
Existing Letters of Credit as listed on
Schedule 1.1(c)
shall be deemed to have been issued by U.S. Issuing Bank under this Agreement
and the rights and obligations of U.S. Issuing Bank and the account party
thereunder shall be subject to the terms hereof.
2.2.2
U.S
. Letters of Credit: Reimbursement and Participations.
(a) If U.S. Issuing Bank honors any request for payment under a U.S. Letter
of Credit, the U.S. Borrower shall pay to U.S. Issuing Bank, on the same day ("
U.S. Reimbursement Date
"), the amount paid by U.S. Issuing Bank under such U.S. Letter of Credit,
together with interest at the interest rate for U.S. Base Rate Loans, in each
case, from the U.S. Reimbursement Date until payment by the U.S. Borrower. The
obligation of the U.S. Borrower to reimburse U.S. Issuing Bank for any payment
made under a U.S. Letter of Credit shall be absolute, unconditional and
irrevocable, and shall be paid without regard to any lack of validity or
enforceability of any such U.S. Letter of Credit or the existence of any
claim, setoff, defense or other right that the U.S. Borrower or any other U.S.
Domiciled Loan Parties may have at any time against the beneficiary, as
applicable. Whether or not Loan Party Agent submits a Notice of Borrowing, the
U.S. Borrower shall be deemed to have requested a Borrowing of U.S. Base Rate
Loans, in each case, in an amount necessary to pay all amounts due U.S.
Issuing Bank on any U.S. Reimbursement Date and each U.S. Lender agrees to
fund its Pro Rata share of such Borrowing
-85-
AmericasActive:19663285.13
-------------------------------------------------------------------------------
whether or not the U.S. Revolver Commitments have terminated, any U.S.
Overadvance exists or is created thereby, or the conditions in
Section 6
are satisfied.
(b) Upon issuance of a U.S. Letter of Credit, or in the case of the
Existing Letters of Credit, on the Third Restatement Date, each U.S. Lender
shall be deemed to have irrevocably and unconditionally purchased from U.S.
Issuing Bank, without recourse or warranty, an undivided Pro Rata interest and
participation in all U.S. LC Obligations, as applicable, (in each case,
excluding amounts specified in
clause (c)
of such definition) relating to such U.S. Letter of Credit. If U.S. Issuing
Bank makes any payment under a U.S. Letter of Credit for the account of the
U.S. Borrower, and the U.S. Borrower does not reimburse such payment on the
U.S. Reimbursement Date, Agent shall promptly notify U.S. Lenders and each
U.S. Lender shall promptly (within one (1) Business Day) and unconditionally
pay to Agent, for the benefit of U.S. Issuing Bank, such U.S. Lender's Pro
Rata share of such payment. Upon request by a U.S. Lender, U.S. Issuing Bank
shall furnish copies of any Letters of Credit and LC Documents in its
possession at such time.
(c) The obligation of each U.S. Lender to make payments to Agent for the
account of U.S. Issuing Bank in connection with U.S. Issuing Bank's payment
under a U.S. Letter of Credit shall be absolute, unconditional and
irrevocable, not subject to any counterclaim, setoff, qualification or
exception whatsoever, and shall be made in accordance with this Agreement
under all circumstances, irrespective of any lack of validity or unenforceabilit
y of any Loan Documents; any draft, certificate or other document presented
under a U.S. Letter of Credit having been determined to be forged, fraudulent,
invalid or insufficient in any respect or any statement therein being untrue
or inaccurate in any respect; or the existence of any setoff or defense that
any Loan Party may have with respect to any Obligations. U.S. Issuing Bank
does not assume any responsibility for any failure or delay in performance or
any breach by the U.S. Borrower or any other Person of any obligations under
any LC Documents. U.S. Issuing Bank does not make to U.S. Lenders any express
or implied warranty, representation or guarantee with respect to the U.S.
Facility Collateral, LC Documents or any U.S. Facility Loan Party. U.S.
Issuing Bank shall not be responsible to any U.S. Lender for any recitals,
statements, information, representations or warranties contained in, or for
the execution, validity, genuineness, effectiveness or enforceability of any
LC Documents; the validity, genuineness, enforceability, collectability, value
or sufficiency of any U.S. Facility Collateral or the perfection of any Lien
therein; or the assets, liabilities, financial condition, results of
operations, business, creditworthiness or legal status of any U.S. Facility
Loan Party.
(d) No Issuing Bank Indemnitee shall be liable to any Loan Party or other
Person for any action taken or omitted to be taken in connection with any U.S.
Letter of Credit or LC Document except as a result of U.S. Issuing Bank's
gross negligence or willful misconduct, as determined by a final,
non-appealable judgment of a court of competent jurisdiction. U.S. Issuing
Bank may refrain from taking any action with respect to a U.S. Letter of
Credit until it receives written instructions from Required Facility Lenders
of the U.S. Borrower.
-86-
AmericasActive:19663285.13
-------------------------------------------------------------------------------
2.2.3
Cash Collateral
. If any U.S. LC Obligations, whether or not then due or payable, shall for
any reason be outstanding at any time (a) that an Event of Default exists, (b)
that a U.S. Overadvance exists, (c) after the U.S. Revolver Commitment
Termination Date, or (d) within twenty (20) Business Days prior to the
Facility Termination Date, then the U.S. Borrower shall, at U.S. Issuing
Bank's or Agent's request, Cash Collateralize the stated amount of all
outstanding Letters of Credit issued for the account of the U.S. Borrower, and
pay to U.S. Issuing Bank the amount of all other U.S. LC Obligations. The U.S.
Borrower shall, on demand by U.S. Issuing Bank or Agent from time to time,
Cash Collateralize the Fronting Exposure of any Defaulting Lender that is a
U.S. Lender. If the U.S. Borrower fails to provide any Cash Collateral as
required hereunder, U.S. Lenders may (and shall upon direction of Agent)
advance, as U.S. Revolver Loans, the amount of the Cash Collateral required
(whether or not the U.S. Revolver Commitments have terminated, any U.S.
Overadvance exists or is created thereby or the conditions in Section 6 are
satisfied).
2.2.4
Resignation of U.S
. Issuing Bank. U.S. Issuing Bank may resign at any time upon notice to Agent
and Loan Party Agent. On and after the effective date of such resignation,
U.S. Issuing Bank shall have no obligation to issue, amend, renew, extend or
otherwise modify any U.S. Letter of Credit, but shall continue to have all
rights and other obligations of an U.S. Issuing Bank hereunder relating to any
U.S. Letter of Credit issued by it prior to such date. Agent shall promptly
appoint a replacement U.S. Issuing Bank, which, as long as no Default or Event
of Default exists, shall be reasonably acceptable to Loan Party Agent.
2.3
Canadian Letter of Credit Facility
.
2.3.1
Issuance of Letters of Credit
. Canadian Issuing Bank agrees to issue Letters of Credit for the account of
the Canadian Borrower ("
Canadian Letters of Credit
") from time to time until fifteen (15) days prior to the Facility Termination
Date (or until the Canadian Revolver Commitment Termination Date, if earlier),
on the terms set forth herein, including the following:
(a) The Canadian Borrower acknowledges that Canadian Issuing Bank's
willingness to issue any Canadian Letter of Credit is conditioned upon
Canadian Issuing Bank's receipt of an LC Application with respect to the
requested Canadian Letter of Credit, as well as such other instruments and
agreements as Canadian Issuing Bank may customarily require for issuance of a
letter of credit of similar type and amount. Canadian Issuing Bank shall have
no obligation to issue any Canadian Letter of Credit unless (i) Canadian
Issuing Bank receives an LC Request and LC Application at least three (3)
Business Days prior to the requested date of issuance; (ii) each LC Condition
is satisfied; and (iii) if a Defaulting Lender that is a Canadian Lender
exists, such Defaulting Lender or the Canadian Borrower have entered into
arrangements satisfactory to Agent and Canadian Issuing Bank to eliminate any
Fronting Exposure associated with such Lender (it being understood that Cash
Collateralization of a Defaulting Lender's Pro Rata share of the requested
Canadian Letter of Credit is satisfactory to Agent and Canadian Issuing Bank).
If, in sufficient time to act, Canadian Issuing Bank receives written notice
from Required Facility Lenders that a LC Condition has not been satisfied,
Canadian Issuing Bank shall not issue the requested Canadian Letter of Credit.
Prior to receipt of any such notice, Canadian Issuing Bank shall not be deemed
to have knowledge of any failure of LC Conditions.
(b) Letters of Credit may be requested by Loan Party Agent for the account
of Canadian Borrower to support obligations incurred in the ordinary course of
business, or as otherwise approved by
-87-
AmericasActive:19663285.13
-------------------------------------------------------------------------------
Agent. The renewal or extension of any Canadian Letter of Credit shall be
treated as the issuance of a new Canadian Letter of Credit, except that
delivery of a new LC Application may be required at the discretion of Canadian
Issuing Bank.
(c) The Canadian Borrower assumes all risks of the acts, omissions or
misuses by the beneficiary of any Canadian Letter of Credit. In connection
with issuance of any Canadian Letter of Credit, none of Agent, Canadian
Issuing Bank or any Canadian Lender shall be responsible for the existence,
character, quality, quantity, condition, packing, value or delivery of any
goods purported to be represented by any Documents; any differences or
variation in the character, quality, quantity, condition, packing, value or
delivery of any goods from that expressed in any Documents; the form,
validity, sufficiency, accuracy, genuineness or legal effect of any Documents
or of any endorsements thereon; the time, place, manner or order in which
shipment of goods is made; partial or incomplete shipment of, or failure to
ship, any goods referred to in a Canadian Letter of Credit or Documents; any
deviation from instructions, delay, default or fraud by any shipper or other
Person in connection with any goods, shipment or delivery; any breach of
contract between a shipper or vendor and the Canadian Borrower; errors,
omissions, interruptions or delays in transmission or delivery of any
messages, by mail, cable, telegraph, telex, telecopy, e-mail, telephone or
otherwise; errors in interpretation of technical terms; the misapplication by
a beneficiary of any Canadian Letter of Credit or the proceeds thereof; or any
consequences arising from causes beyond the control of Canadian Issuing Bank,
Agent or any Canadian Lender, including any act or omission of a Governmental
Authority. The rights and remedies of Canadian Issuing Bank under the Loan
Documents shall be cumulative. Canadian Issuing Bank shall be fully subrogated
to the rights and remedies of each beneficiary whose claims against the
Canadian Borrower are discharged with proceeds of any Canadian Letter of
Credit issued for the account of the Canadian Borrower.
(d) In connection with its administration of and enforcement of rights or
remedies under any Letters of Credit or LC Documents, Canadian Issuing Bank
shall be entitled to act, and shall be fully protected in acting, upon any
certification, documentation or communication in whatever form believed by
Canadian Issuing Bank, in good faith, to be genuine and correct and to have
been signed, sent or made by a proper Person. Canadian Issuing Bank may
consult with and employ legal counsel, accountants and other experts to advise
it concerning its obligations, rights and remedies, and shall be entitled to
act upon, and shall be fully protected in any action taken in good faith
reliance upon, any advice given by such experts. Canadian Issuing Bank may
employ agents and attorneys-in-fact in connection with any matter relating to
Letters of Credit or LC Documents, and shall not be liable for the negligence
or misconduct of agents and attorneys-in-fact selected with reasonable care.
(e) If the Canadian Borrower so requests in any applicable Letter of Credit
application, Canadian Issuing Bank may, in its discretion, agree to issue a
Letter of Credit that has automatic extension provisions (each, a "
Canadian Auto-Extension Letter of Credit
");
provided
that any such Canadian Auto-Extension Letter of Credit must permit Canadian
Issuing Bank to prevent any such extension at least once in each twelve-month
period (commencing with the date of issuance of such Letter of Credit) by
giving prior notice to the beneficiary thereof not later than a day (the "
Canadian Non-Extension Notice Date
") in each such twelve-month period to be agreed upon at the time such Letter
of Credit is issued. Unless otherwise directed by Canadian Issuing Bank, the
Canadian Borrower shall not be required to make a specific request to the
Issuing Bank for any such extension. Once a Canadian Auto-Extension Letter of
Credit has been issued, the Canadian Lenders shall be deemed to
-88-
AmericasActive:19663285.13
-------------------------------------------------------------------------------
have authorized (but may not require) Canadian Issuing Bank to permit the
extension of such Letter of Credit at any time to an expiry date at least 15
Business Days prior to the Facility Termination Date;
provided
,
however
, that Canadian Issuing Bank shall not permit any such extension if (A)
Canadian Issuing Bank has determined that it would not be permitted, or would
have no obligation at such time to issue such Letter of Credit in its revised
form (as extended) under the terms hereof, or (B) it has received notice
(which may be by telephone or in writing) on or before the day that is seven
Business Days before the Canadian Non-Extension Notice Date (1) from Agent
that the Required Lenders have elected not to permit such extension or (2)
from Agent, any Lender or the Canadian Borrower that one or more of the
applicable conditions specified in
Section 6.2
is not then satisfied, and in each such case directing Canadian Issuing Bank
not to permit such extension.
2.3.2
Canadian Letters of Credit: Reimbursement and Participations
.
(a) If Canadian Issuing Bank honors any request for payment under a
Canadian Letter of Credit, the Canadian Borrower shall pay to Canadian Issuing
Bank, on the same day ("
Canadian Reimbursement Date
"), the amount paid by Canadian Issuing Bank under such Canadian Letter of
Credit, together with interest at the interest rate for Canadian Base Rate
Loans from the Canadian Reimbursement Date until payment by the Canadian
Borrower. The obligation of the Canadian Borrower to reimburse Canadian
Issuing Bank for any payment made under a Canadian Letter of Credit shall be
absolute, unconditional and irrevocable, and shall be paid without regard to
any lack of validity or enforceability of any Canadian Letter of Credit or the
existence of any claim, setoff, defense or other right that the Canadian
Borrower or the Canadian Domiciled Loan Parties may have at any time against
the beneficiary. Whether or not Loan Party Agent submits a Notice of
Borrowing, the Canadian Borrower shall be deemed to have requested a Borrowing
of Canadian Base Rate Loans in an amount necessary to pay all amounts due
Canadian Issuing Bank on any Canadian Reimbursement Date and each Canadian
Lender agrees to fund its Pro Rata share of such Borrowing whether or not the
Canadian Revolver Commitments have terminated, any Canadian Overadvance exists
or is created thereby, or the conditions in
Section 6
are satisfied.
(b) Upon issuance of a Canadian Letter of Credit, each Canadian Lender
shall be deemed to have irrevocably and unconditionally purchased from
Canadian Issuing Bank, without recourse or warranty, an undivided Pro Rata
interest and participation in all Canadian LC Obligations (excluding amounts
specified in
clause (c)
of such definition) relating to such Canadian Letter of Credit. If Canadian
Issuing Bank makes any payment under a Canadian Letter of Credit for the
account of the Canadian Borrower and the Canadian Borrower does not reimburse
such payment on the Canadian Reimbursement Date, Agent shall promptly notify
Canadian Lenders and each Canadian Lender shall promptly (within one (1)
Business Day) and unconditionally pay to Agent, for the benefit of Canadian
Issuing Bank, such Canadian Lender's Pro Rata share of such payment. Upon
request by a Canadian Lender, Canadian Issuing Bank shall furnish copies of
any Letters of Credit and LC Documents in its possession at such time.
(c) The obligation of each Canadian Lender to make payments to Agent for
the account of Canadian Issuing Bank in connection with Canadian Issuing
Bank's payment under a Canadian Letter of Credit shall be absolute,
unconditional and irrevocable, not subject to any counterclaim, setoff,
qualification or exception whatsoever, and shall be made in accordance with
this Agreement under all circumstances, irrespective of any lack of validity
or unenforceability of any Loan Documents; any draft,
-89-
AmericasActive:19663285.13
-------------------------------------------------------------------------------
certificate or other document presented under a Canadian Letter of Credit
having been determined to be forged, fraudulent, invalid or insufficient in
any respect or any statement therein being untrue or inaccurate in any
respect; or the existence of any setoff or defense that any Loan Party may
have with respect to any Obligations. Canadian Issuing Bank does not assume
any responsibility for any failure or delay in performance or any breach by
the Canadian Borrower or any other Person of any obligations under any LC
Documents. Canadian Issuing Bank does not make to Canadian Lenders any express
or implied warranty, representation or guarantee with respect to the Canadian
Facility Collateral, LC Documents or any Canadian Facility Loan Party.
Canadian Issuing Bank shall not be responsible to any Canadian Lender for any
recitals, statements, information, representations or warranties contained in,
or for the execution, validity, genuineness, effectiveness or enforceability
of any LC Documents; the validity, genuineness, enforceability, collectability,
value or sufficiency of any Canadian Facility Collateral or the perfection of
any Lien therein; or the assets, liabilities, financial condition, results of
operations, business, creditworthiness or legal status of any Canadian
Facility Loan Party.
(d) No Issuing Bank Indemnitee shall be liable to any Loan Party or other
Person for any action taken or omitted to be taken in connection with any
Canadian Letter of Credit or LC Documents except as a result of Canadian
Issuing Bank's gross negligence or willful misconduct, as determined by a
final, non-appealable judgment of a court of competent jurisdiction. Canadian
Issuing Bank may refrain from taking any action with respect to a Canadian
Letter of Credit until it receives written instructions from Required Facility
Lenders of the Canadian Borrower.
2.3.3
Cash Collateral
. If any Canadian LC Obligations, whether or not then due or payable, shall
for any reason be outstanding at any time (a) that an Event of Default exists,
(b) that a Canadian Overadvance exists, (c) after the Canadian Revolver
Commitment Termination Date, or (d) within 20 Business Days prior to the
Facility Termination Date, then the Canadian Borrower shall, at Canadian
Issuing Bank's or Agent's request, Cash Collateralize the stated amount of all
outstanding Letters of Credit issued for the account of Canadian Borrower and
pay to Canadian Issuing Bank the amount of all other Canadian LC Obligations.
The Canadian Borrower shall, on demand by Canadian Issuing Bank or Agent from
time to time, Cash Collateralize the Fronting Exposure of any Defaulting
Lender that is a Canadian Lender. If the Canadian Borrower fails to provide
any Cash Collateral as required hereunder, Canadian Lenders may (and shall
upon direction of Agent) advance, as Canadian Revolver Loans, the amount of
the Cash Collateral required (whether or not the Canadian Revolver Commitments
have terminated, any Canadian Overadvance exists or is created thereby or the
conditions in Section 6 are satisfied).
2.3.4
Resignation of Canadian Issuing Bank
. Canadian Issuing Bank may resign at any time upon notice to Agent and Loan
Party Agent. On and after the effective date of such resignation, Canadian
Issuing Bank shall have no obligation to issue, amend, renew, extend or
otherwise modify any Canadian Letter of Credit, but shall continue to have all
rights and other obligations of a Canadian Issuing Bank hereunder relating to
any Canadian Letter of Credit issued by it prior to such date. Agent shall
promptly appoint a replacement Canadian Issuing Bank, which, as long as no
Default or Event of Default exists, shall be reasonably acceptable to Loan
Party Agent.
-90-
AmericasActive:19663285.13
-------------------------------------------------------------------------------
2.4
FILO Credit Facility
(a)
Notwithstanding anything to the contrary contained in this Agreement, so long
as no Default or Event of Default exists or would immediately result
therefrom, at any time after the Third Restatement Date, the Loan Party Agent
may request a separate "first-in, last out" credit facility provided by one or
more Lenders or other Eligible Assignees as agree to hold "first-in, last out"
commitments (the "
FILO Lenders
") that are subject to a separate "first-in, last out" incremental borrowing
base (collectively, the "
FILO Credit Facility
" and any loans made pursuant to such FILO Credit Facility, the "
FILO Credit Facility Loans
"), which FILO Credit Facility, subject to
Section
5.5
(as amended in accordance with
Section 2.4(b)(i))
, shall constitute U
.S. Facility Obligations
(and Obligations) for all purposes under the Loan Documents (including for the
purposes of being secured by the applicable Collateral and being guaranteed by
the
U.S. Facility Loan Parties
). The Agent shall promptly notify the Lenders of each such request and the
Lenders shall respond thereto in the same manner specified for any Commitment
increase requests in
Section 2.1.4
. The Agent shall notify Lenders and Loan Party Agent of the responses to such
request and any actions to arrange for other Eligible Assignees to serve as
FILO Lenders in the same manner specified for commitment increases in
Section 2.1.4
. Any FILO Lender participating in the FILO Credit Facility which is not then
a Lender (or an Affiliate of such Lender engaged in the ordinary course of its
business in extending commercial loans)
s
hall be subject to the prior approval of the Agent and the Loan Party Agent
(such consent not to be unreasonably withheld or delayed).
(b)
Notwithstanding anything herein to the contrary, the FILO Credit Facility
shall be established in accordance with the following terms and conditions:
(i) the establishment thereof shall result in an amendment of the payment
waterfall in
Section 5.5.1(a)
(without the requirement of the consent of the Lenders under
Section 14.1.1
) to include payment of accrued and unpaid interest of U.S. Facility
Obligations under the FILO Credit Facility as a new clause "seventh" and
unpaid payment of principal of U.S. Facility Obligations under the FILO Credit
Facility as a new clause "eighth", and renumbering the existing clauses
"seventh", "eighth", "ninth", "tenth" and "eleventh" as clauses "ninth",
"tenth", "eleventh", "twelfth" and "thirteenth", respectively;
(ii) subject to other express limitations set forth in this
Section 2.4
the establishment of the FILO Credit Facility shall be subject to the Agent's
prior written consent in its sole discretion, and shall otherwise be on terms
and conditions as determined by the Loan Party Agent, the Agent and the FILO
Lenders, it being understood and agreed that such terms and conditions may
include, without limitation, FILO Credit Facility-specific borrowing base,
advance rate (including seasonal or fluctuating advance rates), eligibility
criteria, availability reserves (including reserves implemented against the
Borrowing Base with respect to obligations owing to the FILO Lenders),
representations, warranties, covenants and Events of Default, interest rates,
fees, final maturity date, amortization, mandatory and voluntary prepayment
and commitment termination provision as to the FILO Credit Facility and
Section 8.2
or any other provision of the Loan Documents related to cash dominion, and
amendment and waiver provisions (including modifications to
Section 14.1.1
to provide for customary or market provisions in favor of the FILO Lenders,
which may include voting rights in favor of the FILO Lenders relating to
modifications of the Borrowing Base that would affect the FILO Credit
-91-
AmericasActive:19663285.13
-------------------------------------------------------------------------------
Facility or the FILO Lenders) in respect of or relating to the FILO Credit
Facility and other customary or market terms and conditions for asset-based
"first in, last out" credit facilities of this nature. Further, i
f the Loan Party Agent requests that some or all of the FILO Credit Facility
constitute Canadian Facility Obligations supported by Canadian Borrowing Base
assets, the Agent agrees to consult with the Loan Party Agent as to whether
such structure could be documented and arranged without unreasonable cost or
delay, and in such case, the parties agree that the Agent, Loan Party Agent
and Canadian Borrower may agree to any necessary implementing amendment or
other modification to the applicable Loan Documents as may be necessary for
such structure including without limitation, amendments to the payment
waterfall set forth in
Section 5.5.1(b)
consistent with those contemplated by clause (i) above;
(iii)
the advance rates in respect of the incremental borrowing base under the FILO
Credit Facility shall not exceed (a) five percent (5.0%) on Eligible Accounts;
(b) ten percent (10%) on Eligible Inventory; and (c) zero percent (0%) on
Eligible Tooling Accounts;
(iv)
the arrangement of the FILO Credit Facility, and any upfront, underwriting,
arrangement or similar fees in respect of the FILO Credit Facility, shall be
agreed to by Loan Party Agent, Agent, and the FILO Lenders;
(v)
the FILO Credit Facility shall be subject to terms and closing conditions as
may be determined by the Agent and the Collateral Agent, the FILO Lenders and
the Loan Party Agent, which in any event shall include a post-closing covenant
requiring delivery of an Inventory appraisal within twelve (12) months of the
closing date of the FILO Credit Facility to the extent that Eligible Inventory
is to be included in the borrowing base under such FILO Credit Facility;
(vi)
the FILO Credit Facility shall be subject to the condition precedent that (i)
no Event of Default shall have occurred and be continuing immediately before
or after giving effect thereto and (ii)
the FILO Lenders not party to the Reallocation Agreement as of the Third
Restatement Date shall have executed a joinder to the Reallocation Agreement
in form and substance acceptable to Agent
;
(vii)
the aggregate amount of the FILO Credit Facility commitments under the FILO
Credit Facility (x) shall not exceed $20,000,000 and (y) (i) the aggregate
amount of the FILO Credit Facility commitments under the FILO Credit Facility,
plus
(ii) the aggregate amount of increased commitments provided from time to time
in accordance with
Section 2.1.4
, shall not exceed, at any time outstanding, $100,000,000;
(viii)
all documentation in respect of the FILO Credit Facility shall be consistent
with the foregoing and in form and substance reasonably satisfactory to the
Agent and the FILO Credit Facility Lenders, and the FILO Credit Facility
Amendment shall have been approved by the Agent; and
(ix)
Borrowers shall not be required to offer any Lender an opportunity to join the
FILO Credit Facility as a FILO Lender.
-92-
AmericasActive:19663285.13
-------------------------------------------------------------------------------
(c)
Notwithstanding anything in
Section 14.1.1
or any other provision of the Loan Documents to the contrary, the Lenders
hereby irrevocably authorize the Agent and Collateral Agent to enter into
amendments, restatements or other supplements or modifications to this
Agreement and the other Loan Documents with the
U.S. Facility Loan Parties
and the FILO Lenders as may be necessary or desirable in order to establish
the FILO Credit Facility, in each case on terms consistent with this
Section 2.4
("
FILO Credit Facility Amendment
") without the consent or approval of any Lenders (other than the Lenders
participating in the FILO Credit Facility). The Lenders hereby consent to the
FILO Credit Facility and other transactions contemplated by this
Section 2.4
(including, for the avoidance of doubt, the terms and condition illustrated in
clause (b) above) and hereby waive the requirements of any provision of this
Agreement (including, without limitation, any pro rata payment section or
amendment or waiver section) or any other Loan Document that may otherwise
prohibit or restrict the FILO Credit Facility, the FILO Credit Facility
Amendment or any other transaction contemplated by this
Section 2.4
. Each of the Agent and the Collateral Agent shall have the right (but not the
obligation) to consult with the Required Lenders with respect to the FILO
Credit Facility and any matter contemplated by this
Section 2.4
;
provided
,
however
, that whether or not there has been any consultation with the Required
Lenders by the Agent or the Collateral Agent with respect to a FILO Credit
Facility, any such FILO Credit Facility Amendment entered into by the Agent
and/or the Collateral Agent pursuant to this
Section 2.4
shall be binding and conclusive on the Lenders in all respects.
SECTION 3. INTEREST, FEES AND CHARGES
3.1
Interest
.
3.1.1
Rates and Payment of Interest
.
(a) The Obligations (excluding Obligations of the type specified in clause
(g) of such definition) shall bear interest (i) if a U.S. Base Rate Loan, at
the U.S. Base Rate in effect from time to time, plus the Applicable Margin;
(ii) if a Term SOFR Loan, at Term SOFR for the applicable Interest Period,
plus the Applicable Margin; (iii) if a Canadian Prime Rate Loan, at the
Canadian Prime Rate in effect from time to time, plus the Applicable Margin,
(iv) if a Canadian Base Rate Loan, at the Canadian Base Rate in effect from
time to time, plus the Applicable Margin, (v) if a
Canadian BA
Term CORRA
Rate Loan, at
the Canadian BA Rate
Term CORRA
for the applicable Interest Period, plus the Applicable Margin, (vi) if any
other U.S. Facility Obligation that is then due and payable (including, to the
extent permitted by law, interest not paid when due), at the U.S. Base Rate in
effect from time to time, plus the Applicable Margin for U.S. Base Rate Loans;
and
(vii)
[reserved]; and (viii)
if any other Canadian Facility Obligation that is then due and payable
(including, to the extent permitted by law, interest not paid when due), at
the Canadian Prime Rate in effect from time to time, plus the Applicable
Margin for Canadian Prime Rate Loans. Interest shall accrue from the date the
Loan is advanced or the Obligation is incurred or payable, until paid by the
applicable Borrower. If a Loan is repaid on the same day made, one (1) day's
interest shall accrue.
(b) Interest on the Revolver Loans shall be payable in the currency (i.e.,
Dollars or Canadian Dollars, as the case may be) of the underlying Revolver
Loan.
(c) Overdue principal, interest and other amounts not paid when due shall
bear interest at the Default Rate;
provided
, however, that during the continuation of any Event of Default, if Required
-93-
AmericasActive:19663285.13
-------------------------------------------------------------------------------
Lenders in their discretion so elect, all Obligations shall bear interest at
the Default Rate (whether before or after any judgment);
provided
further
, however, that upon the occurrence and during the continuance of an Event of
Default under
Section 11.1(a)
or
11.1(i)
, the Default Rate shall become immediately applicable to all Obligations
without any election of the Required Lenders. Each Loan Party acknowledges
that the cost and expense to Agent and Lenders due to an Event of Default are
difficult to ascertain and that the Default Rate is a fair and reasonable
estimate to compensate Agent and Lenders therefor.
(d) Interest accrued on the Loans shall be due and payable in arrears, (i)
for any U.S. Base Rate Loan, Canadian Base Rate Loan or Canadian Prime Rate
Loan, on the first (1st) day of each month; (ii) for any Term SOFR Loan or
Canadian BA
Term CORRA
Rate Loan, on the last day of its Interest Period and (iii) on any date of
prepayment, with respect to the principal amount of Loans being prepaid. In
addition, interest accrued on the Canadian Revolver Loans shall be due and
payable in arrears on the Canadian Revolver Commitment Termination Date and
interest accrued on the U.S. Revolver Loans shall be due and payable in
arrears on the U.S. Revolver Commitment Termination Date. Interest accrued on
any other Obligations shall be due and payable as provided in the Loan
Documents and, if no payment date is specified, shall be due and payable
on demand
. Notwithstanding the foregoing, interest accrued at the Default Rate shall be
due and payable
on demand
.
3.1.2
Application of Term SOFR to Outstanding Loans
.
(a) Each Borrower may on any Business Day, subject to delivery of a Notice
of Conversion/Continuation and the other terms hereof, elect to convert any
portion of the U.S. Base Rate Loans or the Canadian Base Rate Loans, as
applicable to, or to continue any Term SOFR Loan at the end of its Interest
Period as, a Term SOFR Loan. During the continuance of any Event of Default,
Agent may (and shall at the direction of Required Facility Lenders of the
applicable Borrower) declare that no Loan may be made, converted or continued
as a Term SOFR Loan.
(b) Whenever a Borrower shall desire to convert or continue Loans as Term
SOFR Loans, Loan Party Agent shall give Agent a Notice of Conversion/Continuatio
n, no later than 11:00 a.m. at least three (3) Business Days prior to the
requested conversion or continuation date. Promptly after receiving any such
notice, Agent shall notify each Applicable Lender thereof. Each Notice of
Conversion/Continuation shall be irrevocable, and shall specify the amount of
Loans to be converted or continued, the conversion or continuation date (which
shall be a Business Day), and the duration of the Interest Period (which shall
be deemed to be one (1) month if not specified). If, upon the expiration of
any Interest Period in respect of any Term SOFR Loans, Loan Party Agent shall
have failed to deliver a Notice of Conversion/Continuation with respect
thereto as required above, the applicable Borrower shall be deemed to have
elected to convert such Loans into U.S. Base Rate Loans (if owing by the U.S.
Borrower) or Canadian Base Rate Loans (if owing by the Canadian Borrower).
-94-
AmericasActive:19663285.13
-------------------------------------------------------------------------------
3.1.3
Application of
Canadian BA Rate
Term CORRA
to Outstanding Loans
.
(a) The Canadian Borrower may on any Business Day, subject to delivery of a
Notice of Conversion/Continuation and the other terms hereof, elect to convert
any portion of the Canadian Prime Rate Loans, or to continue any
Canadian BA
Term CORRA
Rate Loan at the end of its Interest Period as a
Canadian BA
Term CORRA
Rate Loan;
provided
, however that such
Canadian BA
Term CORRA
Rate Loans may only be so converted at the end of the Interest Period
applicable thereto. During the continuance of any Default or Event of Default,
Agent may (and shall at the direction of Required Facility Lenders of the
Canadian Borrower) declare that no Loan may be made, converted or continued as
a
Canadian BA
Term CORRA
Rate Loan.
(b) Whenever the Canadian Borrower desires to convert or continue Loans as
Canadian BA
Term CORRA
Rate Loans, Loan Party Agent shall give Agent a Notice of Conversion/Continuatio
n, no later than 11:00 a.m. at least three (3) Business Days prior to the
requested conversion or continuation date. Promptly after receiving any such
notice, Agent shall notify each Canadian Lender thereof. Each Notice of
Conversion/Continuation shall be irrevocable, and shall specify the amount of
Loans to be converted or continued, the conversion or continuation date (which
shall be a Business Day), and the duration of the Interest Period (which shall
be deemed to be one (1) month if not specified). If, upon the expiration of
any Interest Period in respect of any
Canadian BA
Term CORRA
Rate Loans, Loan Party Agent shall have failed to deliver a Notice of
Conversion/Continuation with respect thereto as required above, the Canadian
Borrower shall be deemed to have elected to convert such Loans into Canadian
Prime Rate Loans.
3.1.4
Interest Periods
. In connection with the making, conversion or continuation of any Term SOFR
Loans or
Canadian BA
Term CORRA
Rate Loans, Loan Party Agent, on behalf of the applicable Borrower, shall
select an interest period to apply (the "Interest Period"), which interest
period shall be one or three months; provided, however, that:
(a) the Interest Period shall commence on the date the Loan is made or
continued as, or converted into, a Term SOFR Loan or
Canadian BA
Term CORRA
Rate Loan, and shall expire one or three months thereafter, as applicable;
(b) if any Interest Period commences on a day for which there is no
corresponding day in the calendar month at its end or if such corresponding
day falls after the last Business Day of such month, then the Interest Period
shall expire on the last Business Day of such month;
(c) if any Interest Period would expire on a day that is not a Business
Day, the period shall expire on the next Business Day; and
(d) no Interest Period shall extend beyond the Facility Termination Date
(or, in the case of any Loan owing by the Canadian Borrower, the Canadian
Revolver Commitment Termination Date, if earlier).
-95-
AmericasActive:19663285.13
-------------------------------------------------------------------------------
3.1.5
Interest Rate Not Ascertainable
. If Agent shall determine that on any date for determining Term SOFR
or Term CORRA
, due to any circumstance affecting any applicable interbank market, adequate
and fair means do not exist for ascertaining such rate on the basis provided
herein, then Agent shall immediately notify Borrower of such determination.
Until Agent notifies Borrower that such circumstance no longer exists, the
obligation of Lenders to make Term SOFR Loans
or Term CORRA Rate Loans
shall be suspended, and no further Loans may be converted into or continued as
Term SOFR Loans
or Term CORRA Rate Loans
.
3.2
Fees
.
3.2.1
Unused Line Fee
.
(a) The Canadian Borrower shall pay to Agent, for the Pro Rata benefit of
Canadian Lenders, a fee equal to the Canadian Unused Line Fee Rate times the
average daily amount by which the Canadian Revolver Commitments exceed the
Canadian Revolver Exposure during any month. Such fee shall be payable in
arrears, on the first (1st) day of each month and on the Canadian Revolver
Commitment Termination Date.
(b) The U.S. Borrower shall pay to Agent, for the Pro Rata benefit of U.S.
Lenders, an aggregate fee equal to the U.S. Unused Line Fee Rate times the
average daily amount by which the U.S. Revolver Commitments exceed the U.S.
Revolver Exposure during any month. Such fee shall be payable in arrears, on
the first (1st) day of each month and on the U.S. Revolver Commitment
Termination Date.
3.2.2
U.S. LC Facility Fees
. The U.S. Borrower shall pay (a) to Agent, for the Pro Rata benefit of U.S.
Lenders, a fee equal to the per annum rate of the Applicable Margin in effect
for Term SOFR Loans times the average daily outstanding amount of U.S. Letters
of Credit, which fee shall be payable monthly in arrears, on the first (1st)
day of each month; (b) to the applicable U.S. Issuing Bank, for its own
account, a fronting fee equal to .125% per annum on the outstanding amount of
each U.S. Letter of Credit issued by such U.S. Issuing Bank, which fee shall
be payable monthly in arrears, on the first (1st) day of each month; and (c)
to the applicable U.S. Issuing Bank, for its own account, all customary
charges associated with the issuance, amending, negotiating, payment,
processing, transfer and administration of U.S. Letters of Credit, which
charges shall be paid as and when incurred; provided that, for the avoidance
of doubt, all amounts payable pursuant to this
clause (c)
with respect to the Existing Letters of Credit shall be determined in
accordance with the applicable documentation thereto. During an Event of
Default, if the Required Lenders so elect (pursuant to
Section 3.1.1(c)
) the fee payable under clause (a) shall be increased by 2% per annum.
3.2.3
[Reserved]
.
3.2.4
Canadian LC Facility Fees
. The Canadian Borrower shall pay (a) to Agent, for the Pro Rata benefit of
Canadian Lenders, a fee equal to the per annum rate of the Applicable Margin
in effect for Term SOFR Loans times the average daily outstanding amount of
Canadian Letters of Credit, which fee shall be payable monthly in arrears, on
the first (1st) day of each month; (b) to the applicable Canadian Issuing
Bank, for its own account, a fronting fee equal to 0.125% per annum on the
outstanding amount of each Canadian Letter of Credit issued by such Canadian
Issuing Bank, which fee shall be payable monthly in arrears, on the first
(1st) day of each month; and (c) to the applicable
-96-
AmericasActive:19663285.13
-------------------------------------------------------------------------------
Canadian Issuing Bank, for its own account, all customary charges associated
with the issuance, amending, negotiating, payment, processing, transfer and
administration of Canadian Letters of Credit, which charges shall be paid as
and when incurred. During an Event of Default if the Required Lenders so elect
(pursuant to
Section 3.1.1(c)
), the fee payable under clause (a) shall be increased by 2% per annum.
3.2.5
Other Fees
. The Borrowers shall pay such other fees as described in the Agent Fee Letter.
3.3
Computation of Interest, Fees, Yield Protection
.
All interest, as well as fees and other charges calculated on a per annum
basis, shall be computed for the actual days elapsed, based on a year of three
hundred sixty (360) days,
or, in the case of
other than (i)
interest based on
the Canadian Prime Rate, Canadian Base Rate or Canadian BA Rate, on the basis of
Term CORRA which shall be based on
a three hundred sixty-five (365) day year
, and (ii) interest based on the Canadian Prime Rate and Canadian Base Rate
which shall be based on a three hundred sixty-five (365) or three hundred and
sixty-six (366) day year, as applicable
. Each determination by Agent of any interest, fees or interest rate hereunder
shall be final, conclusive and binding for all purposes, absent manifest
error. All fees shall be fully earned when due and shall not be subject to
rebate, refund or proration. All fees payable under
Section 3.2
are compensation for services and are not, and shall not be deemed to be,
interest or any other charge for the use, forbearance or detention of money. A
certificate setting forth in reasonable detail amounts payable by any Borrower
under
Section 3.4,
3.7, 3.9, 5.8.2, 5.8.3
or
10.1.9(b),
submitted to Loan Party Agent by Agent or the affected Lender or affected
Issuing Bank, as applicable, shall be final, conclusive and binding for all
purposes, absent manifest error, and the applicable Borrower shall pay such
amounts to the appropriate party within ten (10) days following receipt of the
certificate. For the purposes of the
Interest Act
(Canada), the yearly rate of interest to which any rate calculated on the
basis of a period of time different from the actual number of days in the year
(three hundred sixty (360) days, for example) is equivalent is the stated rate
multiplied by the actual number of days in the year (three hundred sixty five
(365) or three hundred sixty six (366), as applicable) and divided by the
number of days in the shorter period (three hundred sixty (360) days, in the
example), and the parties hereto acknowledge that there is a material
distinction between the nominal and effective rates of interest and that they
are capable of making the calculations necessary to compare such rates and
that the calculations herein are to be made using the nominal rate method and
not on any basis that gives effect to the principle of deemed reinvestment of
interest.
3.4
Reimbursement Obligations
.
Each Borrower shall reimburse Agent for all Extraordinary Expenses incurred by
Agent in reference to such Borrower or its related Loan Party Group
Obligations or Collateral of its related Loan Party Group. In addition to such
Extraordinary Expenses, each Borrower shall also reimburse Agent for all
invoiced out-of-pocket legal, accounting, appraisal, consulting, and other
fees, costs and expenses incurred by it in connection with (a) negotiation and
preparation of any Loan Documents, including any amendment or other
modification thereof; (b) administration of and actions relating to any
Collateral for its Obligations, Loan Documents and transactions contemplated
thereby, including any actions taken to perfect or maintain priority of
Agent's Liens on any such Collateral, to maintain any insurance required
hereunder or to verify such Collateral; and (c) each inspection, audit or
appraisal with respect to any Loan Party within such Borrower's related Loan
Party Group or Collateral securing such Loan Party Group's Obligations,
whether prepared by Agent's personnel or a third party (subject to
Section 10.1.9(b)
). If, for any reason (including inaccurate
-97-
AmericasActive:19663285.13
-------------------------------------------------------------------------------
reporting on financial statements
, a Borrowing Base Certificate
or a Compliance Certificate), it is determined that a higher Applicable Margin
should have applied to a period than was actually applied, then the proper
margin shall be applied retroactively and the Borrowers shall pay to Agent,
for the Pro Rata benefit of Lenders, an amount equal to the difference between
the amount of interest and fees that would have accrued using the proper
margin and the amount actually paid. All amounts payable by the Borrowers
under this
Section 3.4
shall be due and payable promptly upon demand, or to the extent applicable to
interest and fees, in accordance with
Section 3.3.
3.5
Illegality
.
If any Lender determines that any applicable Law has made it unlawful, or that
any Governmental Authority has asserted that it is unlawful, for any Lender or
its applicable Lending Office to make, maintain or fund Interest Period Loans,
or to determine or charge interest rates based upon Term SOFR or
the Canadian BA Rate
Term CORRA
, or any Governmental Authority has imposed material restrictions on the
authority of such Lender to purchase or sell, or to take deposits of, Dollars
in the applicable interbank market, or Canadian Dollars through bankers'
acceptances then, on notice thereof by such Lender to Agent, any obligation of
such Lender to make or continue Interest Period Loans or to convert Floating
Rate Loans to Interest Period Loans shall be suspended until such Lender
notifies Agent that the circumstances giving rise to such determination no
longer exist. Upon delivery of such notice, the affected Borrower shall prepay
or, if applicable, convert all Interest Period Loans of such Lender to
Floating Rate Loans, either on the last day of the Interest Period therefor,
if such Lender may lawfully continue to maintain such Interest Period Loans to
such day, or immediately, if such Lender may not lawfully continue to maintain
such Interest Period Loans. Upon any such prepayment or conversion, the
affected Borrower shall also pay accrued interest on the amount so prepaid or
converted.
3.6
Inability to Determine Rates
.
If Required Lenders notify Agent for any reason in connection with a request
for a Borrowing of, or conversion to or continuation of, an Interest Period
Loan that (a) Dollar deposits or bankers' acceptances are not being offered
to, as regards Term SOFR, banks in the applicable interbank market or, as
regards
Canadian BA Rate
Term CORRA
, Persons in Canada, for the applicable amount and Interest Period of such
Loan, (b) adequate and reasonable means do not exist for determining Term SOFR
or
the Canadian BA Rate
Term CORRA
for the requested Interest Period, or (c) Term SOFR or
the Canadian BA Rate
Term CORRA
for the requested Interest Period does not adequately and fairly reflect the
cost to such Lenders of funding such Loan, then Agent will promptly so notify
Loan Party Agent and each Applicable Lender. Thereafter, the obligation of the
Applicable Lenders to make or maintain affected Interest Period Loans, shall
be suspended until Agent (upon instruction by Required Lenders) revokes such
notice. Upon receipt of such notice, Loan Party Agent may revoke any pending
request for a Borrowing of, conversion to or continuation of an Interest
Period Loan or, failing that, will be deemed to have submitted a request for a
Floating Rate Loan.
3.7
Increased Costs; Capital Adequacy
.
3.7.1
Change in Law
. If any Change in Law shall:
(a) impose modify or deem applicable any reserve, liquidity, special
deposit, compulsory loan, insurance charge or similar requirement against
assets of, deposits with or for the account of, or credit extended or
participated in by, any Lender (except any reserve requirement reflected in
Term SOFR or
the Canadian BA Rate
Term CORRA
) or any Issuing Bank;
-98-
AmericasActive:19663285.13
-------------------------------------------------------------------------------
(b) subject any Recipient to any Taxes (other than (A) Indemnified Taxes,
(B) Taxes described in the definition of Excluded Taxes and (C) Connection
Income Taxes) with respect to or on its loans, loan principal, letters of
credit, commitments, or other obligations, or its deposits, reserves, other
liabilities or capital attributable thereto; or
(c) impose on any Lender, any Issuing Bank or interbank market any other
condition, cost or expense affecting any Loan, Loan Document, Letter of
Credit, participation in LC Obligations, or Commitment;
and the result thereof shall be to increase the cost to such Lender of making
or maintaining any Loan or Commitment, or to increase the cost to such Lender
or such Issuing Bank of participating in, issuing or maintaining any Letter of
Credit, or to reduce the amount of any sum received or receivable by such
Lender or such Issuing Bank hereunder (whether of principal, interest or any
other amount) then, upon request of such Lender or such Issuing Bank, the
Borrower to which such Lenders or such Issuing Bank has a Commitment shall pay
to such Lender or such Issuing Bank, as applicable, such additional amount or
amounts as will compensate such Lender or such Issuing Bank, as applicable,
for such additional costs incurred or reduction suffered, in each case, in
accordance with
Section 3.3
.
3.7.2
Capital Adequacy
. If any Lender or any Issuing Bank determines that any Change in Law
affecting such Lender or such Issuing Bank or any Lending Office of such
Lender or such Lender's or such Issuing Bank's holding company, if any,
regarding capital or liquidity requirements has or would have the effect of
reducing the rate of return on such Lender's, such Issuing Bank's or holding
company's capital as a consequence of this Agreement, or such Lender's or such
Issuing Bank's Commitments, Loans, Letters of Credit or participations in LC
Obligations, to a level below that which such Lender, such Issuing Bank or
holding company could have achieved but for such Change in Law (taking into
consideration such Lender's, such Issuing Bank's and holding company's
policies with respect to capital adequacy or liquidity), then from time to
time the Borrower to which such Lenders or such Issuing Bank has a Commitment
will pay to such Lender or such Issuing Bank, as the case may be, such
additional amount or amounts as will compensate it or its holding company for
any such reduction suffered, in each case, in accordance with
Section 3.3
.
3.7.3
Compensation
. Failure or delay on the part of any Lender or any Issuing Bank to demand
compensation pursuant to this
Section 3.7
shall not constitute a waiver of its right to demand such compensation, but a
Borrower shall not be required to compensate a Lender to such Borrower or
Issuing Bank to such Borrower for any increased costs incurred or reductions
suffered more than nine (9) months prior to the date that such Lender or
Issuing Bank notifies Loan Party Agent of the Change in Law giving rise to
such increased costs or reductions and of such Lender's or such Issuing Bank's
intention to claim compensation therefor (except that, if the Change in Law
giving rise to such increased costs or reductions is retroactive, then the
nine (9) month period referred to above shall be extended to include the
period of retroactive effect thereof).
3.7.4
Term SOFR Loan Reserves
. If any Lender is required by rules or regulations from any applicable
Governmental Authority to maintain reserve requirements for Term SOFR
liabilities or deposits, Borrowers shall pay additional interest to such
Lender on each Term SOFR Loan equal to the costs of such reserves allocated to
the Loan by the Lender (as determined by it in good faith, which determination
shall be conclusive). At the request of the Borrowers, a certificate of such
Lender setting
-99-
AmericasActive:19663285.13
-------------------------------------------------------------------------------
forth the amount or amounts necessary to compensate such Lender for such
reserves shall be delivered to the Borrower, which certificate shall be
conclusive and binding on all parties, absent manifest error. The additional
interest shall be due and payable on each interest payment date for the Loan;
provided
, that if the Lender notifies Borrowers (with a copy to Agent) of the
additional interest less than 10 days prior to the interest payment date, then
such interest shall be payable 10 days after Borrowers' receipt of the notice.
3.8
Mitigation
. If any Lender gives a notice under
Section 3.5
or requests compensation under
Section 3.7
, or if a Borrower is required to pay additional amounts or make indemnity
payments with respect to a Lender under
Section 5.8
, then such Lender shall use reasonable efforts to designate a different
Lending Office 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 (a) would eliminate the need for such notice or
reduce amounts payable or to be withheld in the future, as applicable; and (b)
in each case, would not subject such Lender to any unreimbursed cost or
expense and would not otherwise be materially disadvantageous to such Lender
or unlawful. The affected Borrower shall pay all reasonable costs and expenses
(including all Indemnified Taxes and Other Taxes) incurred by any Lender that
has issued a Commitment to such Borrower in connection with any such
designation or assignment.
3.9
Funding Losses
.
If for any reason (other than default by a Lender) (a) any Borrowing of, or
conversion to or continuation of, an Interest Period Loan does not occur on
the date specified therefor in a Notice of Borrowing or Notice of
Conversion/Continuation (whether or not withdrawn), (b) any repayment or
conversion of an Interest Period Loan occurs on a day other than the end of
its Interest Period, (c) any Borrower fails to repay an Interest Period Loan
when required hereunder, or (d) a Lender (other than a Defaulting Lender) is
required to assign an Interest Period Loan prior to the end of its Interest
Period pursuant to
Section 13.4,
then such Borrower shall pay to Agent its customary administrative charge and
to each Lender all resulting losses and expenses, including loss of
anticipated profits and any loss or expense arising from liquidation or
redeployment of funds or from fees payable to terminate deposits of matching
funds. All amounts payable by the Borrowers under this
Section 3.9
shall be due and payable in accordance with
Section 3.3.
3.10
Maximum Interest
.
Notwithstanding anything to the contrary contained in any Loan Document, the
interest paid or agreed to be paid under the Loan Documents shall not exceed
the maximum rate of non-usurious interest permitted by applicable Law ("
maximum rate
"). If Agent or any Lender shall receive interest in an amount that exceeds
the maximum rate, the excess interest shall be applied to the principal of the
Obligations of the Borrower to which such excess interest relates or, if it
exceeds such unpaid principal, refunded to such Borrower. In determining
whether the interest contracted for, charged or received by Agent or a Lender
exceeds the maximum rate, such Person may, to the extent permitted by
applicable Law, (a) characterize any payment that is not principal as an
expense, fee or premium rather than interest; (b) exclude voluntary
prepayments and the effects thereof; and (c) amortize, prorate, allocate and
spread in equal or unequal parts the total amount of interest throughout the
contemplated term of the Obligations hereunder. Without limiting the
generality of the foregoing provisions of this
Section 3.10
, if any provision of any of the Loan Documents would obligate any Canadian
Domiciled Loan Party to make any payment of interest with respect to the
Canadian Facility Obligations in an amount or calculated at a rate which would
be prohibited by applicable Law or would result in the receipt of interest
with respect to the Canadian Facility Obligations at a criminal rate
-100-
AmericasActive:19663285.13
-------------------------------------------------------------------------------
(as such terms are construed under the Criminal Code (Canada)), then
notwithstanding such provision, such amount or rates shall be deemed to have
been adjusted with retroactive effect to the maximum amount or rate of
interest, as the case may be, as would not be so prohibited by law or so
result in a receipt by the applicable recipient of interest with respect to
the Canadian Facility Obligations at a criminal rate, such adjustment to be
effected, to the extent necessary, as follows: (i) first, by reducing the
amount or rates of interest required to be paid by the Canadian Facility Loan
Parties to the applicable recipient under the Loan Documents; and (ii)
thereafter, by reducing any fees, commissions, premiums and other amounts
required to be paid by the Canadian Facility Loan Parties to the applicable
recipient which would constitute interest with respect to the Canadian
Facility Obligations for purposes of Section 347 of the Criminal Code
(Canada). Notwithstanding the foregoing, and after giving effect to all
adjustments contemplated thereby, if the applicable recipient shall have
received an amount in excess of the maximum permitted by that section of the
Criminal Code (Canada), then Canadian Facility Loan Parties shall be entitled,
by notice in writing to Agent, to obtain reimbursement from the applicable
recipient in an amount equal to such excess, and pending such reimbursement,
such amount shall be deemed to be an amount payable by the applicable
recipient to the applicable Canadian Facility Loan Party. Any amount or rate
of interest with respect to the Canadian Facility Obligations referred to in
this
Section 3.10
shall be determined in accordance with generally accepted actuarial practices
and principles as an effective annual rate of interest over the term that any
Canadian Revolver Loans to the Canadian Borrower remains outstanding on the
assumption that any charges, fees or expenses that fall within the meaning of
"interest" (as defined in the Criminal Code (Canada)) shall, if they relate to
a specific period of time, be pro rated over that period of time and otherwise
be pro rated over the period from the Third Restatement Date to the date of
Full Payment of the Canadian Facility Obligations, and, in the event of a
dispute, a certificate of a Fellow of the Canadian Institute of Actuaries
appointed by Agent shall be conclusive for the purposes of such determination.
SECTION 4. LOAN ADMINISTRATION
4.1
Manner of Borrowing and Funding Loans
.
4.1.1
Notice of Borrowing
.
(a) Whenever a Borrower desires funding of a Borrowing of Revolver Loans,
Loan Party Agent shall give Agent a Notice of Borrowing. Such notice must be
received by Agent (i) on the Business Day of the requested funding date, in
the case of Floating Rate Loans to the U.S. Borrower, (ii) at least one (1)
Business Day prior to the requested funding date, in the case of Floating Rate
Loans to the Canadian Borrower, (iii) at least three (3) Business Days prior
to the requested funding date, in the case of Term SOFR Loans, and (iv) at
least three (3) Business Days prior to the requested funding date, in the case
of
Canadian BA
Term CORRA
Rate Loans. Notices received after 11:00 a.m. shall be deemed received on the
next Business Day. Each Notice of Borrowing shall be irrevocable and shall
specify (A) the Borrower, and the amount of the Borrowing, (B) the requested
funding date (which must be a Business Day), (C) whether the Borrowing is to
be made as (x) a U.S. Base Rate Loan or a Term SOFR Loan, in the case of the
U.S. Borrower and (y) a Canadian Base Rate Loan, Term SOFR Loan, Canadian
Prime Rate Loan
or Canadian BA
, Term CORRA
Rate Loan, in the case of the Canadian Borrower, (D) in the case of Interest
Period Loans, the duration of the applicable Interest Period (which shall be
deemed to be one month if not specified), (E) [reserved] and (F) if such
Borrowing is requested for the Canadian Borrower, whether such Loan is to be
denominated in Dollars or Canadian Dollars.
-101-
AmericasActive:19663285.13
-------------------------------------------------------------------------------
(b) Unless payment is otherwise timely made by a Borrower, the becoming due
of any amount required to be paid with respect to any of the Obligations of
the Loan Party Group to which such Borrower belongs (whether principal,
interest, fees or other charges, including Extraordinary Expenses, LC
Obligations, Cash Collateral and Secured Bank Product Obligations) shall be
deemed to be a request for Revolver Loans by such Borrower on the due date, in
the amount of such Obligations and shall bear interest at the per annum rate
applicable hereunder (i) to U.S. Base Rate Loans, in the case of such
Obligations owing by any U.S. Facility Loan Party or (ii) to Canadian Prime
Rate Loans, in the case of such Obligations owing by a Canadian Domiciled Loan
Party. The proceeds of such Revolver Loans shall be disbursed as direct
payment of the relevant Obligation. In addition, Agent may, at its option,
charge such Obligations of a Loan Party Group against any operating,
investment or other account of a Loan Party within such Loan Party Group
maintained with Agent or any of its Affiliates.
(c) If a Borrower establishes a controlled disbursement account with Bank
of America or any branch or Affiliate of Bank of America, then the
presentation for payment of any check or other item of payment drawn on such
account at a time when there are insufficient funds to cover it shall be
deemed to be a request for Revolver Loans by such Borrower on the date of such
presentation, in the amount of the check and items presented for payment, and
shall bear interest at the per annum rate applicable hereunder (i) to U.S.
Base Rate Loans, in the case of insufficient funds owing by any U.S. Facility
Loan Party or (ii) to Canadian Prime Rate Loans, in the case of insufficient
funds owing by a Canadian Facility Loan Party. The proceeds of such Revolver
Loans may be disbursed directly to the controlled disbursement account or
other appropriate account.
4.1.2
Fundings by Lenders
. Each Applicable Lender shall timely honor its Facility Commitment by funding
its Pro Rata share of each Borrowing of Revolver Loans under such Facility
Commitment that is properly requested hereunder; provided, however that,
except as set forth in
Section 2.1.5
, no Lender shall be required to honor its Facility Commitment by funding its
Pro Rata share of any Borrowing that would cause the U.S. Revolver Exposure to
exceed the U.S. Borrowing Base or the Canadian Revolver Exposure to exceed the
Canadian Borrowing Base, as applicable,. Except for Borrowings to be made as
Swingline Loans, Agent shall use its commercially reasonable best efforts to
notify the Applicable Lenders of each Notice of Borrowing (or deemed request
for a Borrowing) by 12:00 noon on the proposed funding date for Floating Rate
Loans or by 11:00 a.m. at least two (2) Business Days before any proposed
funding of Interest Period Loans. Each Applicable Lender shall fund to Agent
such Lender's Pro Rata share of the Borrowing to the account specified by
Agent in immediately available funds not later than 2:00 p.m. on the requested
funding date, unless Agent's notice is received after the times provided
above, in which event each Applicable Lender shall fund its Pro Rata share by
11:00 a.m. on the next Business Day. Subject to its receipt of such amounts
from the Applicable Lenders, Agent shall disburse the proceeds of the Revolver
Loans as directed by Loan Party Agent. Unless Agent shall have received (in
sufficient time to act) written notice from an Applicable Lender that it does
not intend to fund its Pro Rata share of a Borrowing or of any settlement
pursuant to
Section 4.1.3(b)
, Agent may assume that such Applicable Lender has deposited or promptly will
deposit its share with Agent, and Agent may disburse a corresponding amount to
such Borrower. If an Applicable Lender's share of any Borrowing is not
received by Agent, then such Borrower agrees to repay to Agent on demand the
amount of such share, together with interest thereon from the date disbursed
until repaid, at the rate applicable to such Borrowing.
4.1.3
Swingline Loans; Settlement; Rescindable Amounts
.
-102-
AmericasActive:19663285.13
-------------------------------------------------------------------------------
(a) Agent may, but shall not be obligated to, advance U.S. Swingline Loans
to the U.S. Borrower up to an aggregate outstanding amount of $21,875,000,
unless the funding is specifically required to be made by all U.S. Lenders
hereunder. Each U.S. Swingline Loan shall constitute a U.S. Revolver Loan for
all purposes, except that payments thereon shall be made to Agent for its own
account. The obligation of the U.S. Borrower to repay U.S. Swingline Loans
shall be evidenced by the records of Agent and need not be evidenced by any
promissory note. All U.S. Swingline Loans shall be denominated in Dollars and
shall be U.S. Base Rate Loans.
(b) Settlement of U.S. Swingline Loans and other U.S. Revolver Loans among
the U.S. Lenders and Agent shall take place on a date determined from time to
time by Agent (but at least weekly). On each settlement date, settlement shall
be made with each U.S. Lender in accordance with the Settlement Report
delivered by Agent to U.S. Lenders. Between settlement dates, Agent may in its
discretion apply payments on U.S. Revolver Loans to U.S. Swingline Loans
regardless of any designation by the U.S. Borrower or any provision herein to
the contrary. Each U.S. Lender's obligation to make settlements with Agent is
absolute and unconditional, without offset, counterclaim or other defense, and
whether or not the U.S. Revolver Commitments have terminated, a U.S.
Overadvance exists or the conditions in
Section 6
are satisfied. If, due to an Insolvency Proceeding with respect to the U.S.
Borrower or otherwise, any U.S. Swingline Loan may not be settled among U.S.
Lenders hereunder, then each U.S. Lender shall be deemed to have purchased
from Agent a Pro Rata participation in each unpaid U.S. Swingline Loan and
shall transfer the amount of such participation to Agent, in immediately
available funds, within one (1) Business Day after Agent's request therefor.
(c) Agent may, but shall not be obligated to, request that Bank of America
(Canada) advance Canadian Swingline Loans to the Canadian Borrower, up to an
aggregate outstanding amount of the Dollar Equivalent of $3,125,000, unless
the funding is specifically required to be made by all Canadian Lenders
hereunder. Each Canadian Swingline Loan shall constitute a Canadian Revolver
Loan for all purposes, except that payments thereon shall be made to Agent for
Bank of America (Canada)'s account. The obligation of the Canadian Borrower to
repay Canadian Swingline Loans shall be evidenced by the records of Agent and
need not be evidenced by any promissory note. All Canadian Swingline Loans
shall be denominated in Canadian Dollars and shall be a Canadian Prime Rate
Loan.
(d) Settlement of Canadian Swingline Loans and other Canadian Revolver
Loans among the Canadian Lenders and Agent, on behalf of Bank of America
(Canada) shall take place on a date determined from time to time by Agent (but
at least weekly). On each settlement date, settlement shall be made with each
Canadian Lender in accordance with the Settlement Report delivered by Agent to
Canadian Lenders. Between settlement dates, Agent may in its discretion apply
payments on Canadian Revolver Loans to Canadian Swingline Loans, regardless of
any designation by the Canadian Borrower or any provision herein to the
contrary. Each Canadian Lender's obligation to make settlements with Agent, on
behalf of Bank of America (Canada), is absolute and unconditional, without
offset, counterclaim or other defense, and whether or not the Canadian
Revolver Commitments have terminated, a Canadian Overadvance exists or the
conditions in
Section 6
are satisfied. If, due to an Insolvency Proceeding with respect to the
Canadian Borrower or otherwise, any Canadian Swingline Loan may not be settled
among Canadian Lenders hereunder, then each Canadian Lender shall be deemed to
have purchased from Agent a Pro Rata participation in each unpaid Canadian
Swingline Loan and shall transfer the amount of such participation to Agent,
in immediately available funds, within one (1) Business Day after Agent's
request therefor.
-103-
AmericasActive:19663285.13
-------------------------------------------------------------------------------
(e) Unless Agent receives notice from Borrowers or Loan Party Agent prior
to the date on which a payment is due to Agent for the account of Lenders or
Issuing Bank hereunder that Borrowers will not make such payment, Agent may
assume that Borrowers have made such payment on such date in accordance
herewith and may, in reliance on such assumption, distribute to Lenders or
Issuing Bank, as applicable, the amount due. With respect to any payment that
Agent makes for the account of Lenders or Issuing Bank hereunder as to which
Agent determines (which determination shall be conclusive absent manifest
error) that any of the following applies (such payment, a "
Rescindable Amount
"): (1) Borrowers have not in fact made such payment, (2) Agent has made a
payment in excess of the amount so paid by Borrowers (whether or not then
owed), or (3) Agent has for any reason otherwise erroneously made such
payment, then each Lender or Issuing Bank, as applicable, severally agrees to
repay to Agent forthwith on demand the Rescindable Amount so distributed to or
otherwise made for the account of such Lender or Issuing Bank, in immediately
available funds 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
Agent, at the greater of the Federal Funds Rate and a rate determined by Agent
in accordance with banking industry rules on interbank compensation. A notice
by Agent to Issuing Bank or any Lender with respect to any amount owing under
this clause (c) shall be conclusive, absent manifest error.
4.1.4
Notices
. Each Borrower authorizes Agent and Lenders to extend, convert or continue
Loans, effect selections of interest rates, and transfer funds to or on behalf
of applicable Borrowers based on telephonic or e-mailed instructions by Loan
Party Agent to Agent. Loan Party Agent shall confirm each such request by
prompt delivery to Agent of a Notice of Borrowing or Notice of Conversion/Contin
uation, if applicable, but if it differs in any material respect from the
action taken by Agent or Lenders, the records of Agent and Lenders shall
govern. Neither Agent nor any Lender shall have any liability for any loss
suffered by a Borrower as a result of Agent or any Lender acting upon its
understanding of telephonic or e-mailed instructions from a person believed in
good faith by Agent or any Lender to be a person authorized to give such
instructions on Loan Party Agent's behalf.
4.2
Defaulting Lender
.
Notwithstanding anything herein to the contrary:
4.2.1
Reallocation of Pro Rata Share; Amendments
. For purposes of determining Lenders' obligations or rights to fund,
participate in or receive collections with respect to Loans and Letters of
Credit (including existing Swingline Loans, Protective Advances and LC
Obligations), Agent may in its discretion reallocate Pro Rata shares by
excluding the Commitments and Loans of a Defaulting Lender from the
calculation of Pro Rata shares. A Defaulting Lender shall have no right to
vote on any amendment, waiver or other modification of a Loan Document, except
as provided in
Section 14.1.1(c)
.
4.2.2
Payments; Fees
. Agent may, in its discretion, receive and retain any amounts payable to a
Defaulting Lender under the Loan Documents, and a Defaulting Lender shall be
deemed to have assigned to Agent such amounts until all Obligations owing to
Agent, non-Defaulting Lenders and other Secured Parties have been paid in
full. Agent may use such amounts to cover the Defaulting Lender's defaulted
obligations, to Cash Collateralize such Lender's Fronting Exposure, to
readvance the amounts to Borrowers or to repay other Obligations. A Lender
shall not be entitled to receive any fees
-104-
AmericasActive:19663285.13
-------------------------------------------------------------------------------
accruing hereunder during the period in which it is a Defaulting Lender, and
the unfunded portion of its Commitment shall be disregarded for purposes of
calculating the unused line fee under
Section 3.2.1
and
Section 3.2.2
. If any LC Obligations owing to a Defaulted Lender are reallocated to other
Lenders, fees attributable to such LC Obligations under
Section 3.2.3
and
Section 3.2.4
shall be paid to such Lenders. Agent shall be paid all fees attributable to LC
Obligations that are not reallocated.
4.2.3
Status; Cure
. Agent may determine in its discretion that a Lender constitutes a Defaulting
Lender and the effective date of such status shall be conclusive and binding
on all parties, absent manifest error. Borrowers, Agent and Issuing Bank may
agree in writing that a Lender has ceased to be a Defaulting Lender, whereupon
Pro Rata shares shall be reallocated without exclusion of the reinstated
Lender's Commitments and Loans, and all outstanding Revolver Loans, LC
Obligations and other exposures under the Facility Commitments shall be
reallocated among Lenders and settled by Agent (with appropriate payments by
the reinstated Lender, including its payment of breakage costs for reallocated
Term SOFR Loans
or Term CORRA Rate Loans
) in accordance with the readjusted Pro Rata shares. Unless expressly agreed
by Borrowers, Agent and Issuing Bank or as expressly provided herein with
respect to Bail-In Actions and related matters, no reallocation of Commitments
and Loans to non-Defaulting Lenders or reinstatement of a Defaulting Lender
shall constitute a waiver or release of claims against such Lender. The
failure of any Lender to fund a Loan, to make a payment in respect of LC
Obligations or otherwise to perform obligations hereunder shall not relieve
any other Lender of its obligations under any Loan Document, and no Lender
shall be responsible for default by another Lender.
4.3
Number and Amount of Interest Period Loans; Determination of Rate
. For ease of administration, all Interest Period Loans of the same Type to a
Borrower having the same length and beginning date of their Interest Periods
and the same currency shall be aggregated together, and such Loans shall be
allocated among the Applicable Lenders on a Pro Rata basis. With respect to
the U.S. Borrower, no more than six (6) Borrowings of Term SOFR Loans may be
outstanding at any time, and each Borrowing of Term SOFR Loans when made,
continued or converted shall be in a minimum amount of the Dollar Equivalent
of $1,000,000 or an increment of the Dollar Equivalent of $500,000, in excess
thereof. With respect to the Canadian Borrower, no more than four (4)
Borrowings of Interest Period Loans may be outstanding at any time, and each
Borrowing of Interest Period Loans when made, continued or converted shall be
in a minimum amount of $1,000,000 (or, in the case of
Canadian BA
Term CORRA
Rate Loans, Cdn$1,000,000) or an increment of $500,000 (or, in the case of
Canadian BA
Term CORRA
Rate Loans, Cdn$500,000), in excess thereof. Upon determining Term SOFR or
the Canadian BA Rate
Term CORRA
for any Interest Period requested by a Borrower, Agent shall promptly notify
Loan Party Agent thereof by telephone or electronically and, if requested by
Loan Party Agent, shall confirm any telephonic notice in writing.
-105-
AmericasActive:19663285.13
-------------------------------------------------------------------------------
4.4
Loan Party Agent
.
Each Loan Party hereby designates Cooper-Standard Automotive Inc. ("
Loan Party Agent
") as its representative and agent for all purposes under the Loan Documents,
including requests for Loans and Letters of Credit, designation of interest
rates, delivery or receipt of communications, preparation and delivery of
Borrower Materials, receipt and payment of Obligations, requests for waivers,
amendments or other accommodations, actions under the Loan Documents
(including in respect of compliance with covenants), and all other dealings
with Agent, any Issuing Bank or any Lender. Loan Party Agent hereby accepts
such appointment. Agent and Lenders shall be entitled to rely upon, and shall
be fully protected in relying upon, any notice or communication (including any
Notice of Borrowing) delivered by Loan Party Agent on behalf of any Loan
Party. Agent and Lenders may give any notice or communication with a Loan
Party hereunder to Loan Party Agent on behalf of such Loan Party. Each of
Agent, Issuing Banks and Lenders shall have the right, in its discretion, to
deal exclusively with Loan Party Agent for any or all purposes under the Loan
Documents. Each Loan Party agrees that any notice, election, communication,
representation, agreement or undertaking made on its behalf by Loan Party
Agent shall be binding upon and enforceable against it.
With respect to each Specified Jurisdiction Guarantor that is organized under
the laws of Mexico (a
"Mexican Guarantor"
), hereby irrevocably designates and appoints the Loan Party Agent (also
referred to as the "Process Agent"), with an office at 40300 Traditions Drive
Northville, Michigan 48168, United States of America as its agent and true and
lawful attorney-in-fact in its name, place and stead (i) to accept on its
behalf service of copies of the summons and complaint and any other process
that may be served in any such suit, action or proceeding brought in any
court, (ii) as its conventional address the address of the Loan Party Agent
referred above or any other address notified in writing in the future by the
Loan Party Agent to such Mexican Guarantor, to receive on its behalf service
of all process in any proceedings brought pursuant to the Loan Documents in
any court, such service being hereby acknowledged by such Mexican Guarantor to
be effective and binding service in every respect, and agrees that the failure
of the Loan Party Agent to give any notice of any such service of process to
it shall not impair or affect the validity of such service or, to the extent
permitted by applicable law, the enforcement of any judgment based thereon,
and (iii) conduct each of the actions referred to in the first paragraph of
this Section 4.4. Each Mexican Guarantor shall maintain such appointment and
faculties until the satisfaction in full of all Obligations, except that if
for any reason the Loan Party Agent appointed hereby ceases to be able to act
as such, then each Mexican Guarantor shall, by an instrument reasonably
satisfactory to the Agent, appoint another Person as such Loan Party Agent
subject to the reasonable approval of the Agent. Each Mexican Guarantor
covenants and agrees that it shall take any and all reasonable action,
including the execution and filing of any and all documents that may be
necessary to continue the designation and faculties of the Loan Party Agent as
Process Agent and true and lawful attorney-in-fact pursuant to this paragraph
in full force and effect and to cause the Loan Party Agent to act as such.
The Mexican Guarantor, no later than twenty (20) Business Days after the date
on which the Mexican Guarantor becomes a Guarantor under this Agreement (or
such later date as the Agent may agree to in its reasonable discretion), shall
deliver (A) evidence of the acceptance by the Loan Party Agent to act as agent
for the service of process for such Person in accordance with the terms of
this Agreement, and as its true and lawful attorney-in-fact and (B) copy of
the irrevocable special power of attorney for lawsuits and collections (
poder para pleitos y cobranzas
) and acts of administration (poder para actos de administracion) in terms of
the first, second and fourth paragraphs of Article 2554 and Article 2596 of
the Federal Civil Code and their correlative articles in the Civil Codes of
the Federal
-106-
AmericasActive:19663285.13
-------------------------------------------------------------------------------
entities of Mexico, in each case before a Mexican notary public, appointing
the Loan Party Agent, as its agent for service of process in relation to any
action or proceeding arising out of or relating to this Agreement and any
other Loan Document (or the transactions contemplated hereby or thereby), as
its true and lawful attorney-in-fact, and designating the Loan Party Agent's
domicile as the Mexican Guarantor's contractual domicile (
domicilio convencional
) for writs, processes and summonses (
avisos, notificaciones, emplazamientos, resoluciones y comunicaciones
).
4.5
One Obligation
.
Without in any way limiting the Obligations of any U.S. Facility Loan Party
with respect to its Guarantee of the Obligations of the Canadian Facility Loan
Parties, the Loan Party Group Obligations owing by each Loan Party Group shall
constitute one (1) general obligation of the Loan Parties within such Loan
Party Group and (unless otherwise expressly provided in any Loan Document)
shall be secured by Agent's Lien upon all Collateral of each member of such
Loan Party Group;
provided
, however, that each Secured Party shall be deemed to be a creditor of, and
the holder of a separate claim against, each Loan Party to the extent of any
Obligations owed by such Loan Party to such Secured Party.
4.6
Effect of Termination
.
On the effective date of the termination of all Commitments, the Obligations
shall be immediately due and payable. Until Full Payment of the Obligations,
all undertakings of Borrowers contained in the Loan Documents shall continue,
and Agent shall retain its Liens in the Collateral and all of its rights and
remedies under the Loan Documents.
Sections 2.2, 2.3, 3.4, 3.6, 3.7, 3.9, 5.4,
5.8, 5.9
,
12, 14.2
and this
Section 4.6
, and the obligation of each Loan Party and Lender with respect to each
indemnity given by it in any Loan Document, shall survive Full Payment of the
Obligations and any release relating to this credit facility.
SECTION 5. PAYMENTS
5.1
General Payment Provisions
.
All payments of Obligations shall be made without offset, counterclaim or
defense of any kind, and in immediately available funds, not later than 12:00
noon on the due date. Any payment after such time shall be deemed made on the
next Business Day. If any payment under the Loan Documents shall be stated to
be due on a day other than a Business Day, the due date shall be extended to
the next Business Day and such extension of time shall be included in any
computation of interest and fees. Any payment of an Interest Period Loan prior
to the end of its Interest Period shall be accompanied by all amounts due under
Section 3.9
. Any prepayment of Loans by a Borrower shall be applied first to Floating
Rate Loans of such Borrower and then to Interest Period Loans of such Borrower.
All payments with respect to any U.S. Facility Obligations shall be made in
Dollars or, if any portion of such U.S. Facility Obligations is denominated in
Euros, then in Euros or, if any portion of such U.S. Facility Obligations is
denominated in Sterling, then in Sterling. All payments with respect to any
Canadian Facility Obligations shall be made in Canadian Dollars or, if any
portion of such Canadian Facility Obligations is denominated in Dollars, then
in Dollars.
-107-
AmericasActive:19663285.13
-------------------------------------------------------------------------------
5.2
Repayment of Obligations
.
All Canadian Facility Obligations shall be immediately due and payable in full
on the Canadian Revolver Commitment Termination Date and all U.S. Facility
Obligations shall be immediately due and payable in full on the U.S. Revolver
Commitment Termination Date, in each case, unless payment of such Obligations
is sooner required hereunder. Revolver Loans may be prepaid from time to time,
without penalty or premium, subject to, in the case of Interest Period Loans,
the payment of costs set forth in
Section 3.9
. If any Asset Sale (other than sales of Inventory in the ordinary course of
business) by any Loan Party constitutes the disposition of ABL Priority
Collateral resulting in Net Proceeds received in any single transaction of
greater than $10,000,000, then Net Proceeds equal to the greater of (a) the
net book value of the applicable Accounts and Inventory, or (b) the reduction
in the Borrowing Base of the applicable Borrower upon giving effect to such
Asset Sale, shall be applied to the Revolver Loans of such Borrower;
provided
, that, at the election of the applicable Loan Party (as notified by the Loan
Party Agent to Agent on or prior to the date of the receipt of such Net
Proceeds), and so long as no Default shall have occurred and be continuing,
the applicable Loan Party may reinvest all or any portion of such Net Proceeds
in operating assets so long as within 360 days after the receipt of such Net
Proceeds, such purchase shall have been consummated (as certified by the Loan
Party Agent in writing to Agent); and
provided
further
,
however
, that any Net Proceeds not so reinvested shall be immediately applied as
otherwise set forth in this
Section 5.2
. Notwithstanding anything herein to the contrary, if an Overadvance exists
(including as the result of any Asset Sale as specified in the preceding
sentence), the Borrower owing such Overadvance shall, on the sooner of Agent's
demand or the first (1
st
) Business Day after such Borrower has knowledge thereof, repay the
outstanding Loans in an amount sufficient to reduce the principal balance of
the related Overadvance Loan to zero
.
5.3
Payment of Other Obligations
.
Obligations shall be paid by the Borrowers as provided in the Loan Documents
or, if no payment date or time for payment is specified,
on demand
.
5.4
Marshaling; Payments Set Aside
.
None of Agent or Lenders shall be under any obligation to marshal any assets
in favor of any Loan Party or against any Obligations. If any payment by or on
behalf of the Borrowers is made to Agent, any Issuing Bank or any Lender, or
Agent, any Issuing Bank or any Lender exercises a right of setoff, and such
payment or the proceeds of such setoff or any part thereof is subsequently
invalidated, declared to be fraudulent or preferential, set aside or required
(including pursuant to any settlement entered into by Agent, such Issuing Bank
or such Lender in its discretion) to be repaid to a Creditor Representative or
any other Person, then to the extent of such recovery, the Obligation
originally intended to be satisfied, and all Liens, rights and remedies
relating thereto, shall be revived and continued in full force and effect as
if such payment had not been made or such setoff had not occurred.
5.5
Post-Default Allocation of Payments
.
5.5.1
Allocation
. Notwithstanding anything herein to the contrary, during the continuance of
an Event of Default, Agent shall apply and allocate monies to the Obligations,
whether arising from payments by or on behalf of any Loan Party, realization
on Collateral, setoff or otherwise, as follows:
(a) with respect to monies, payments, property or Collateral of or from any
U.S. Facility Loan Parties, and subject to
Section 2.4
:
-108-
AmericasActive:19663285.13
-------------------------------------------------------------------------------
(i) first, to all U.S. Facility Obligations consisting of costs and
expenses, including Extraordinary Expenses, owing to Agent;
(ii) second, to all amounts owing to Agent on U.S. Swingline Loans;
(iii) third, to all amounts (excluding the undrawn stated amount of all
U.S. Letters of Credit) owing to U.S. Issuing Bank on U.S. LC Obligations;
(iv) fourth, to all U.S. Facility Obligations constituting fees (excluding
amounts relating to Secured Bank Product Obligations) owing by the U.S.
Facility Loan Parties (exclusive of any amounts guaranteed by the U.S.
Domiciled Loan Parties in respect of Canadian Facility Obligations);
(v) fifth, to all U.S. Facility Obligations constituting interest
(excluding amounts relating to Secured Bank Product Obligations) owing by the
U.S. Facility Loan Parties (exclusive of any amounts guaranteed by the U.S.
Domiciled Loan Parties in respect of Canadian Facility Obligations);
(vi) sixth, to provide Cash Collateral for outstanding U.S. Letters of
Credit;
(vii) seventh, to all other U.S. Facility Obligations (exclusive of any
amounts guaranteed by the U.S. Domiciled Loan Parties in respect of Canadian
Facility Obligations), including Secured Bank Product Obligations; provided,
that amounts constituting Secured Bank Product Obligations shall only be
repayed to the extent (x) if applicable, proper notice of such amounts has
been provided pursuant to the definition of Bank Product and (y) an
appropriate U.S. Availability Reserve shall have been established with respect
thereto;
(viii) eighth, to all other Secured Bank Product Obligations not included
in clause (vii) above;
(ix) ninth, to be applied in accordance with clause (b) below, to the
extent there are insufficient funds for the Full Payment of all Obligations
owing by the Canadian Domiciled Loan Parties;
(x) tenth, to amounts outstanding under Designated Foreign Guaranties on a
pro rata basis; provided, that such amounts shall only be repayed to the
extent (x) proper notice of such amounts has been provided pursuant to
clause (y)
of the definition of Designated Foreign Guaranty and (y) an appropriate U.S.
Availability Reserve shall have been established with respect thereto; and
(xi) eleventh, after Full Payment of all Obligations, the remainder to Loan
Party Agent for the benefit of the U.S. Domiciled Loan Parties or such other
Person(s) as shall be legally entitled thereto.
(b) with respect to monies, payments, property or Collateral of or from any
Canadian Domiciled Loan Parties, together with any allocations pursuant to
subclause (viii) of clause (a) above and subject to
Section 2.4
:
-109-
AmericasActive:19663285.13
-------------------------------------------------------------------------------
(i) first, to all Canadian Facility Obligations consisting of costs and
expenses, including Extraordinary Expenses, owing to Agent, to the extent
owing by any Canadian Domiciled Loan Party;
(ii) second, to all amounts owing to Agent on Canadian Swingline Loans;
(iii) third, to all amounts (excluding the undrawn stated amount of all
Canadian Letters of Credit) owing to Canadian Issuing Bank on Canadian LC
Obligations;
(iv) fourth, to all Canadian Facility Obligations constituting fees
(excluding amounts relating to Secured Bank Product Obligations);
(v) fifth, to all Canadian Facility Obligations constituting interest
(excluding amounts relating to Secured Bank Product Obligations);
(vi) sixth, to provide Cash Collateral for outstanding Canadian Letters of
Credit;
(vii) seventh, to all other Canadian Facility Obligations, including
Secured Bank Product Obligations; provided, that amounts constituting Secured
Bank Product Obligations shall only be repaid to the extent (x) proper notice
of such amounts has been provided pursuant to the definition of Bank Product
and (y) an appropriate Canadian Availability Reserve shall have been
established with respect thereto;
(viii) eighth, to amounts outstanding under Designated Foreign Guaranties
on a pro rata basis; provided, that such amounts shall only be repaid to the
extent (x) proper notice of such amounts has been provided pursuant to
clause (y)
of the definition of Designated Foreign Guaranty and (y) an appropriate
Canadian Availability Reserve shall have been established with respect
thereto; and
(ix) ninth, after Full Payment of all Canadian Facility Obligations, the
remainder to Loan Party Agent for the benefit of the Canadian Domiciled Loan
Parties or such other Person(s) as shall be legally entitled thereto.
Amounts shall be applied to each category of Obligations set forth above until
Full Payment thereof and then to the next category. If amounts are
insufficient to satisfy a category, they shall be applied on a pro rata basis
among the Obligations in the category. Monies and proceeds obtained from a
Loan Party shall not be applied to its Excluded Swap Obligations, but
appropriate adjustments shall be made with respect to amounts obtained from
other Loan Parties to preserve the allocation specified above. Amounts
distributed with respect to any Secured Bank Product Obligations shall be the
actual Secured Bank Product Obligations as calculated using the methodology
reported to Agent for such Obligation (but no greater than the maximum amount
reported to Agent). Agent shall have no obligation to calculate the amount of
any Secured Bank Product Obligation and may request a reasonably detailed
calculation thereof from the applicable Secured Bank Product Provider. If the
provider fails to deliver the calculation within five days following request,
Agent may assume the amount is zero. The allocations set forth in this
Section 5.5.1
are solely to determine the rights and priorities of Agent and Lenders as
among themselves, and may be changed by agreement among them without the
consent of any Loan Party. This Section is not for the benefit of or
enforceable by any Borrower.
-110-
AmericasActive:19663285.13
-------------------------------------------------------------------------------
5.5.2
Erroneous Application
. Agent shall not be liable for any application of amounts made by it in good
faith and, if any such application is subsequently determined to have been
made in error, the sole recourse of any Lender or other Person to which such
amount should have been made shall be to recover the amount from the Person
that actually received it (and, if such amount was received by any Lender,
such Lender hereby agrees to return it).
5.6
Application of Payments
. The ledger balance in the main Dominion Account of each applicable Borrower
as of the end of a Business Day shall be applied to the Loan Party Group
Obligations of such Borrower at the beginning of the next Business Day during
any Cash Dominion Trigger Period. If, as a result of such application, a
credit balance exists, the balance shall not accrue interest in favor of the
applicable Borrower and shall be made available to such Borrower as long as no
Event of Default exists. Each Borrower irrevocably waives the right to direct
the application of any payments or Collateral proceeds made pursuant to
Section 5.5
, and agrees that Agent shall have the continuing, exclusive right to apply
and reapply same against the Obligations, in such manner as Agent deems
advisable. The amounts in the U.S. Dominion Account will go to the U.S.
Facility Obligations as determined by Agent. Notwithstanding anything to the
contrary in any of the Loan Documents, no monies, payments, property or
Collateral of or from any Canadian Domiciled Loan Parties shall be used to
satisfy, or support, directly or indirectly, any Obligations owing by any U.S.
Domiciled Loan Party (other than monies, payments, property or Collateral that
is not Cash Collateral which is used to satisfy amounts outstanding under
Designated Foreign Guaranties pursuant to Section 5.5.1(b)(viii)).
5.7
Loan Account; Account Stated
.
5.7.1
Loan Account
. Agent shall maintain in accordance with its usual and customary practices an
account or accounts ("Loan Account") evidencing the obligations of each
Borrower resulting from each Loan made to such Borrower or issuance of a
Letter of Credit for the account of such Borrower from time to time. Any
failure of Agent to record anything in the Loan Account, or any error in doing
so, shall not limit or otherwise affect the obligation of the Borrowers to pay
any amount owing hereunder. Agent may maintain a single Loan Account in the
name of Loan Party Agent, and each Borrower confirms that such arrangement
shall have no effect on the joint and several character of its liability for
the Obligations of its Loan Party Group or, in the case of the U.S. Borrower,
its guarantee of the Obligations of the Canadian Borrower.
5.7.2
Entries Binding
. Entries made in the Loan Account shall constitute presumptive evidence of
the information contained therein. If any information contained in the Loan
Account is provided to or inspected by any Person, then such information shall
be conclusive and binding on such Person for all purposes absent manifest
error, except to the extent such Person notifies Agent in writing within
thirty (30) days after receipt or inspection that specific information is
subject to dispute.
5.8
Taxes
.
-111-
AmericasActive:19663285.13
-------------------------------------------------------------------------------
5.8.1
Payments Free of Taxes
. Any and all payments by or on account of any Obligation of any Loan Party
under any Loan Document shall be made without deduction or withholding for any
Taxes, except as required by applicable law. If any applicable law (as
determined in the good faith discretion of an applicable Withholding Agent)
requires the deduction or withholding of any Tax from any such payment by a
Withholding Agent, then the applicable Withholding Agent shall be entitled to
make such deduction or withholding and shall timely pay the full amount
deducted or withheld to the relevant Governmental Authority in accordance with
applicable law and, if such Tax is an Indemnified Tax, then the sum payable by
the applicable Loan Party shall be increased as necessary so that after such
deduction or withholding has been made (including such deductions and
withholdings applicable to additional sums payable under this Section) the
applicable Recipient receives an amount equal to the sum it would have
received had no such deduction or withholding been made.
5.8.2
Other Taxes
. The Loan Parties shall timely pay to the relevant Governmental Authority in
accordance with applicable law, or at the option of Agent timely reimburse it
for the payment of, any Other Taxes.
5.8.3
Indemnification by Loan Parties
. The Loan Parties shall indemnify each Recipient, within 10 days after demand
therefor, for the full amount of any Indemnified Taxes (including Indemnified
Taxes imposed or asserted on or attributable to amounts payable under this
Section) payable or paid by such Recipient or required to be withheld or
deducted from a payment to such Recipient 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. A certificate as to the amount of such payment or liability
delivered to the Loan Party Agent by a Lender (with a copy to Agent), or by
Agent on its own behalf or on behalf of a Lender, shall be conclusive absent
manifest error.
5.8.4
Indemnification by Lenders
. Each Lender shall severally indemnify Agent, within 10 days after demand
therefor, for (i) any Indemnified Taxes attributable to such Lender (but only
to the extent that any Loan Party has not already indemnified Agent for such
Indemnified Taxes and without limiting the obligation of the Loan Parties to
do so), (ii) any Taxes attributable to such Lender's failure to comply with
the provisions of
Section 13.2.1
relating to the maintenance of a participant register and (iii) any Excluded
Taxes attributable to such Lender, in each case, that are payable or paid by
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. A certificate as to the amount of such payment or liability
delivered to any Lender by Agent shall be conclusive absent manifest error.
Each Lender hereby authorizes Agent to set off and apply any and all amounts
at any time owing to such Lender under any Loan Document or otherwise payable
by Agent to the Lender from any other source against any amount due to Agent
under this
Section 5.8.4
.
5.8.5
Evidence of Payment
. As soon as practicable after any payment of Taxes by any Loan Party to a
Governmental Authority pursuant to this
Section 5.8
, such Loan Party shall deliver to Agent the original or a certified copy of a
receipt issued by such Governmental Authority evidencing such payment, a copy
of the return reporting such payment or other evidence of such payment
reasonably satisfactory to Agent.
-112-
AmericasActive:19663285.13
-------------------------------------------------------------------------------
5.8.6
Treatment of Certain Refunds
. If a Loan Party makes a payment of Indemnified Taxes to a Recipient and
either (i) the applicable Loan Party determines that there is a reasonable
basis for asserting that such Indemnified Taxes were not correctly or legally
imposed or asserted by the relevant Governmental Authority, unless the
relevant Recipient reasonably disagrees with such determination or (ii) the
applicable Recipient has actual knowledge that such Indemnified Taxes are
refundable to such Recipient by the relevant Governmental Authority (in which
case such Recipient shall within a reasonable period of time provide written
notice to the applicable Loan Party of such refundable Indemnified Taxes)
then, in each case, at the applicable Loan Party's written request and at the
applicable Loan Party's cost and expense, such Recipient shall make a claim
for refund of such Indemnified Taxes (and any interest and penalties arising
therefrom or with respect thereto) to such Governmental Authority in the
manner prescribed by applicable Law and shall take such other reasonable
necessary actions as required by the applicable Loan Party in pursuit of such
refund claim. To the extent a Recipient actually realizes a refund of any
Taxes as to which it has been indemnified pursuant to this
Section 5.8
(including by the payment of additional amounts pursuant to this
Section 5.8
), 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 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 over pursuant to this
Section 5.8.6
(plus any penalties, interest or other charges imposed by the relevant
Governmental Authority) in the event that such indemnified party is required
to repay such refund to such Governmental Authority. Notwithstanding anything
to the contrary in this
Section 5.8.6
, in no event will the indemnified party be required to pay any amount to an
indemnifying party pursuant to this
Section 5.8.6
the payment of which would place the indemnified party in a less favorable net
after-Tax position than the indemnified party would have been in if the Tax
subject to indemnification and giving rise to such refund had not been
deducted, withheld or otherwise imposed and the indemnification payments or
additional amounts giving rise to such refund had never been paid. This
paragraph shall not be construed to require any indemnified party to make
available its Tax returns (or any other information relating to its Taxes that
it deems confidential) to the indemnifying party or any other Person.
5.8.7
Survival
. Each party's obligations under this
Section 5.8
shall survive the resignation or replacement of Agent or any assignment of
rights by, or the replacement of, a Lender, the termination of the Commitments
and the repayment, satisfaction or discharge of all obligations under any Loan
Document.
5.8.8
Defined Terms
. For purposes of this
Section 5.8
and
Section 5.9
, the term "Lender" includes any Issuing Bank and the term "applicable Law"
includes FATCA.
5.9
Lender Tax Information
.
5.9.1
Generally
. Any Lender that is entitled to an exemption from or reduction of withholding
from Tax with respect to payments made under any Loan Document shall deliver
to the Loan Party Agent and Agent, at the time or times reasonably requested
by the Loan Party Agent or Agent, such properly completed and executed
documentation reasonably requested by the Loan Party Agent or Agent as will
permit such payments to be made without withholding or at a reduced rate of
-113-
AmericasActive:19663285.13
-------------------------------------------------------------------------------
withholding. In addition, any Lender, if reasonably requested by the Loan
Party Agent or Agent, shall deliver such other documentation prescribed by
applicable law or reasonably requested by the Loan Party Agent or Agent as
will enable the Loan Party Agent or Agent to determine whether or not such
Lender is subject to 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 5.9.2(i)
,
(ii)(a)
,
(ii)(b)
,
(ii)(c)
,
(ii)(d)
and
(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 the legal or
commercial position of such Lender.
5.9.2
U.S
.
Borrower
. Without limiting the generality of the foregoing, if a Borrower is resident
for tax purposes in the United States, (i) any Recipient that is a "United
States person" within the meaning of section 7701(a)(30) of the Code shall
deliver to Agent and Loan Party Agent IRS Form W-9 or such other documentation
or information prescribed by applicable Law or reasonably requested by Agent
or Loan Party Agent certifying that such Recipient is exempt from United
States backup withholding and information reporting requirements, (ii) any
Recipient that is not a "United States person" within the meaning of section
7701(a)(30) of the Code, shall deliver to Agent and Loan Party Agent, on or
prior to the date on which it becomes a party hereunder (and from time to time
thereafter upon reasonable request by Agent or Loan Party Agent, but only if
such Lender is entitled to do so under applicable Law), (a) IRS Form W-8BEN or
IRS Form W-8BEN-E, as applicable, claiming eligibility for benefits of an
income tax treaty to which the United States is a party; (b) IRS Form W-8ECI;
(c) IRS Form W-8IMY and all required supporting documentation; or (d) in the
case of a Lender claiming the benefits of the exemption for portfolio interest
under section 881(c) of the Code, IRS Form W-8BEN or IRS Form W-8BEN-E, as
applicable, and a certificate showing such Lender is not (x) a "bank" within
the meaning of section 881(c)(3)(A) of the Code, (y) a "10 percent
shareholder" of any Loan Party within the meaning of section 881(c)(3)(B) of
the Code, or (z) a "controlled foreign corporation" described in section
881(c)(3)(C) of the Code; and (iii) if a payment made to a Recipient under any
Loan Document would be subject to U.S. federal withholding Tax imposed by
FATCA if such Recipient 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 Recipient shall deliver to the U.S. Borrower
and Agent at the time or times prescribed by law and at such time or times
reasonably requested by the U.S. Borrower or 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
U.S. Borrower or Agent as may be necessary for the U.S. Borrower and Agent to
comply with their obligations under FATCA and to determine that such Recipient
has complied with such Lender's obligations under FATCA or to determine the
amount to deduct and withhold from such payment. Solely for purposes of the
foregoing clause (iii), "FATCA" shall include any amendments made to FATCA
after the date of this Agreement.
5.9.3
Lender Obligations
. 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 certification or promptly notify the Loan Party Agent and Agent in
writing of its legal inability to do so.
5.10
Guarantee Loan Parties
.
-114-
AmericasActive:19663285.13
-------------------------------------------------------------------------------
5.10.1
Joint and Several Liability
. Each U.S. Domiciled Loan Party and each Specified Jurisdiction Guarantor
agrees that it is jointly and severally liable for, and absolutely and
unconditionally guarantees to Agent and Lenders the prompt payment and
performance of, all Obligations and all agreements of each other Loan Party
under the Loan Documents. Each U.S. Domiciled Loan Party which is a U.S.
Facility Guarantor agrees that its guarantee obligations as a U.S. Facility
Guarantor and as a Canadian Facility Guarantor hereunder, and each Specified
Jurisdiction Guarantor agrees that its guarantee of the Obligations, in each
case constitute a continuing guarantee of payment and not of collection, that
such guarantee obligations shall not be discharged until Full Payment of the
Obligations, and that such guarantee obligations are absolute and
unconditional, in each case irrespective of (a) the genuineness, validity,
regularity, enforceability, subordination or any future modification of, or
change in, any Obligations or Loan Document, or any other document, instrument
or agreement to which any Loan Party is or may become a party or be bound; (b)
the absence of any action to enforce this Agreement (including this
Section 5.10
) or any other Loan Document, or any waiver, consent or indulgence of any kind
by Agent or any Lender with respect thereto; (c) the existence, value or
condition of, or failure to perfect a Lien or to preserve rights against, any
security or guarantee for the Obligations or any action, or the absence of any
action, by Agent or any Lender in respect thereof (including the release of
any security or guarantee); (d) the insolvency of any Loan Party; (e) any
election by Agent or any Lender in an Insolvency Proceeding for the
application of Section 1111(b)(2) of the U.S. Bankruptcy Code, or the
applicable legislation of each Specified Jurisdiction Guarantor; (f) any
borrowing or grant of a Lien by any other Loan Party, as debtor-in-possession
under Section 364 of the U.S. Bankruptcy Code or otherwise, or the applicable
legislation of each Specified Jurisdiction Guarantor; (g) the disallowance of
any claims of Agent or any Lender against any Loan Party for the repayment of
any Obligations under Section 502 of the U.S. Bankruptcy Code or otherwise; or
(h) any other action or circumstances that might otherwise constitute a legal
or equitable discharge or defense of a surety or guarantor, except Full
Payment of all Obligations.
5.10.2
Waivers
.
(a) Each U.S. Domiciled Loan Party and each Specified Jurisdiction
Guarantor hereby expressly waives all rights (including under the principles
of Romanian law, the right of "
beneficiul de diviziune i discuiune
") that it may have now or in the future under any statute, at common law, in
equity or otherwise, to compel Agent or Lenders to marshal assets or to
proceed against any Loan Party, other Person or security for the payment or
performance of any Obligations before, or as a condition to, proceeding
against such Loan Party. Each U.S. Domiciled Loan Party and each Specified
Jurisdiction Guarantor, in all matters permitted by law, waives all defenses
available to a surety, guarantor or accommodation co-obligor other than Full
Payment of all Obligations. It is agreed among each U.S. Domiciled Loan Party,
each Specified Jurisdiction Guarantor, Agent and Lenders that the provisions
of this
Section 5.10
are of the essence of the transaction contemplated by the Loan Documents and
that, but for such provisions, Agent and Lenders would decline to make Loans
and issue Letters of Credit. Each U.S. Domiciled Loan Party and each Specified
Jurisdiction Guarantor acknowledges that its guarantee pursuant to this
Section is necessary to the conduct and promotion of its business, and can be
expected to benefit such business.
(b) Agent and Lenders may, in their discretion, pursue such rights and
remedies as they deem appropriate, prior to judicial process if applicable,
including realization upon the Collateral by judicial foreclosure or
non-judicial sale or enforcement without affecting any rights and remedies
under this
-115-
AmericasActive:19663285.13
-------------------------------------------------------------------------------
Section 5.10
. If, in taking any action in connection with the exercise of any rights or
remedies, Agent or any Lender shall forfeit any other rights or remedies,
including the right to enter a deficiency judgment against any U.S. Domiciled
Party or other Person, whether because of any applicable Laws pertaining to
"election of remedies" or otherwise, each U.S. Domiciled Loan Party and each
Specified Jurisdiction Guarantor consents to such action and waives any claim
based upon it, even if the action may result in loss of any rights of
subrogation that any U.S. Domiciled Loan Party or any Specified Jurisdiction
Guarantor might otherwise have had. Any election of remedies that results in
denial or impairment of the right of Agent or any Lender to seek a deficiency
judgment against any U.S. Domiciled Loan Party or any Specified Jurisdiction
Guarantor shall not impair any other U.S. Domiciled Loan Party's or any
Specified Jurisdiction Guarantor's obligation to pay the full amount of the
Obligations. Each U.S. Domiciled Loan Party waives to the maximum extent
permitted by the law all rights and defenses arising out of an election of
remedies, such as nonjudicial foreclosure with respect to any security for the
Obligations, even though that election of remedies destroys such U.S.
Domiciled Loan Party's rights of subrogation against any other Person. Agent
may bid all or a portion of the Obligations at any foreclosure or trustee's
sale or at any private sale, and the amount of such bid need not be paid by
Agent but shall be credited against the Obligations. The amount of the
successful bid at any such sale, whether Agent or any other Person is the
successful bidder, shall be conclusively deemed to be the fair market value of
the Collateral, and the difference between such bid amount and the remaining
balance of the Obligations shall be conclusively deemed to be the amount of
the Obligations guaranteed under this
Section 5.10
, notwithstanding that any present or future law or court decision may have
the effect of reducing the amount of any deficiency claim to which Agent or
any Lender might otherwise be entitled but for such bidding at any such sale.
(c) The Mexican Guarantor hereby irrevocably and unconditionally waives, to
the fullest extent permitted by applicable law: (i) notice of acceptance of
the guaranty contained herein and notice of any liability to which the
guaranty contained herein may apply, (ii) all notices that may be required by
applicable law or otherwise to preserve intact any rights of the Agent or any
Lender against the Mexican Guarantor or any Loan Party, including, without
limitation, any demand, presentment, protest, notice of default or non-payment
or dishonor, the filing of claims with a court in the event of a bankruptcy or
similar event with respect to the Mexican Guarantor or any Loan Party, notice
of any failure on the part of the Mexican Guarantor or any Loan Party to
perform or comply with any covenant, agreement, term, condition or provision
of the Mexican Guarantor or any Loan Document or any other agreement, and any
other notice to any other party that may be liable in respect of the
obligations guaranteed hereby (including any Loan Party), (iii) any right to
require the enforcement, assertion or exercise by the Agent or any Lender of
any right, power, privilege or remedy conferred upon such Person, including,
without limitation, any such rights, powers, privileges and remedies under the
Loan Documents or otherwise, (iv) any requirement for diligence on the part of
the Agent or any Lender, (v) to the fullest extent permitted by law, any right
and/or privilege to which it may be entitled (A) to the extent applicable, and
with respect solely to any party to this Agreement organized, existing and/or
incorporated under the laws of Mexico, any benefit of
orden
,
excusin
,
divisin
,
quita, novacin
,
espera
and/or
modificacin
that it might otherwise have pursuant to Articles 2813, 2814, 2815, 2816,
2817, 2818, 2819, 2820, 2821, 2822, 2823, 2824, 2826, 2827, 2832, 2836, 2837,
2838, 2839, 2840, 2842, 2844, 2845, 2846, 2847, 2848 and 2849 of the Federal
Civil Code (
Codigo Civil Federal
) and other related Articles of the Federal Civil Code, and the corresponding
provisions of the Civil Codes of the states of Mexico and the Federal District
(currently Mexico City), which are not reproduced herein because the Mexican
Guarantor is organized, existing and/or incorporated under the laws of Mexico,
hereby expressly acknowledges that it
-116-
AmericasActive:19663285.13
-------------------------------------------------------------------------------
is familiar with, and fully understands, such provisions and that these
waivers do not imply that the guaranty contained herein shall be deemed to be
governed by Mexican law; and (B) to require that any Borrower be sued and all
claims against such Borrower be completed prior to an action or proceeding
being initiated against the Mexican Guarantor, (vi) any requirement that the
Agent or any Lender exhaust any right, power, privilege or remedy, or mitigate
any damages resulting from a default, under any Loan Document, or proceed to
take any action against any collateral security or against any Loan Party or
any other Person under or in respect of any Loan Document or otherwise, and
(vii) any other act or omission or thing or delay in doing any other act or
thing which might in any manner or to any extent vary the risk of such Mexican
Guarantor or otherwise operate as a discharge of such Mexican Guarantor or in
any manner lessen the obligations of such Mexican Guarantor hereunder. The
Mexican Guarantor hereby expressly and irrevocably represents that it has full
knowledge about the content of such Articles described above, and therefore,
such Articles are not required to be transcribed herein.
Furthermore, and only with respect to the Mexican Guarantor organized,
existing and/or incorporated under the laws of Mexico, hereby expressly waives
all rights of subrogation provided in Article 2830 of the Federal Civil Code (
Codigo Civil Federal
) and the correlative articles of the civil code of each political subdivision
of Mexico (including Mexico City).
5.10.3
Extent of Liability; Contribution
.
(a) Notwithstanding anything herein to the contrary (other than as
specified in
Section 5.10.6
), each U.S. Domiciled Loan Party's liability under this
Section 5.10
shall be limited to the greater of (i) all amounts for which such U.S.
Domiciled Loan Party is primarily liable, as described below, and (ii) such
U.S. Domiciled Loan Party's Allocable Amount.
(b) If any U.S. Domiciled Loan Party makes a payment under this
Section 5.10
of any Obligations (other than amounts for which such U.S. Domiciled Loan
Party is primarily liable) (a "
Guarantor Payment
") that, taking into account all other Guarantor Payments previously or
concurrently made by any other U.S. Domiciled Loan Party, exceeds the amount
that such U.S. Domiciled Loan Party would otherwise have paid if each U.S.
Domiciled Loan Party had paid the aggregate Obligations satisfied by such
Guarantor Payments in the same proportion that such U.S. Domiciled Loan
Party's Allocable Amount bore to the total Allocable Amounts of all U.S.
Domiciled Loan Parties, then such U.S. Domiciled Loan Party shall be entitled
to receive contribution and indemnification payments from, and to be
reimbursed by, each other U.S. Domiciled Loan Party for the amount of such
excess, pro rata based upon their respective Allocable Amounts in effect
immediately prior to such Guarantor Payment. The "
Allocable Amount
" for any U.S. Domiciled Loan Party shall be the maximum amount that could
then be recovered from such U.S. Domiciled Loan Party under this
Section 5.10
without rendering such payment voidable under Section 548 of the U.S.
Bankruptcy Code or under any applicable state fraudulent transfer or
conveyance act, or similar statute or common law.
(c) Nothing contained in this
Section 5.10
(other than as specified in
Section 5.10.6
) shall limit the liability of any Loan Party to pay Loans made directly or
indirectly to that Loan Party (including Loans advanced to any other Loan
Party and then re-loaned or otherwise transferred to, or for the benefit of,
such Loan Party), LC Obligations relating to Letters of Credit issued to
support such Loan Party's business, and all accrued interest, fees, expenses
and other related Obligations with respect thereto, for which such Loan Party
shall be primarily liable for all purposes hereunder.
-117-
AmericasActive:19663285.13
-------------------------------------------------------------------------------
(d) Each U.S. Domiciled Loan Party that is a Qualified ECP when its
guaranty of or grant of a Lien as security for a Swap Obligation becomes
effective hereby jointly and severally, absolutely, unconditionally and
irrevocably undertakes to provide such funds or other support to each
Specified Loan Party with respect to such Swap Obligation as may be needed by
such Specified Loan Party from time to time to honor all of its obligations
under the Loan Documents in respect of such Swap Obligation (but, in each
case, only up to the maximum amount of such liability that can be hereby
incurred without rendering such Qualified ECP's obligations and undertakings
under this
Section 5.10
voidable under any applicable fraudulent transfer or conveyance act). The
obligations and undertakings of each Qualified ECP under this Section shall
remain in full force and effect until Full Payment of the Obligations. Each
Loan Party intends this Section to constitute, and this Section shall be
deemed to constitute, a guarantee of the obligations of, and a "keepwell,
support or other agreement" for the benefit of, each Loan Party for all
purposes of the Commodity Exchange Act.
5.10.4
Joint Enterprise
. Each Borrower has requested that Agent and Lenders make this credit facility
available to the Borrowers in order to finance the Borrowers' business most
efficiently and economically. The Borrowers and Guarantors make up a related
organization of various entities constituting a single economic and business
enterprise so that the Borrowers and Guarantors share an identity of interests
such that any benefit received by any one of them benefits the others. The
Borrowers and Guarantors render services to or for the benefit of the other
Borrowers and/or Guarantors, as the case may be, purchase or sell and supply
goods to or from or for the benefit of the others, make loans, advances and
provide other financial accommodations to or for the benefit of the other
Borrowers and Guarantors (including inter alia, the payment by the Borrowers
and Guarantors of creditors of the other Borrowers or Guarantors and
guarantees by the Borrowers and Guarantors of indebtedness of the other
Borrowers and Guarantors and provide administrative, marketing, payroll and
management services to or for the benefit of the other Borrowers and
Guarantors). The Borrowers and Guarantors have centralized accounting and
legal services and certain common officers and directors. The Borrowers
acknowledge and agree that Agent's and Lenders' willingness to extend credit
to the Borrowers and to administer the Collateral, as set forth herein, is
done solely as an accommodation to the Borrowers and at the Borrowers' request.
5.10.5
Subordination
. Each Loan Party hereby subordinates any claims, including any rights at law
or in equity to payment, subrogation, reimbursement, exoneration,
contribution, indemnification or set off, that it may have at any time against
any other Loan Party, howsoever arising, to the Full Payment of all
Obligations.
5.10.6
French Guarantors
.
(a) For the purposes of this
Section 5.10.
(i)
"
"
French Guarantor
"
"
shall mean any Specified Jurisdiction Guarantor incorporated in France;
(ii)
"
"
Guarantee Obligations
"
"
means the obligations and liabilities of the relevant French Guarantor under
the Guarantee;
(iii) a reference to
"
"
Indirect Borrowings
"
"
of a French Guarantor means the amount of Loan drawn by a particular Borrower
under a Loan Document to the extent of the aggregate
-118-
AmericasActive:19663285.13
-------------------------------------------------------------------------------
amounts on-lent or otherwise made available to the relevant French Guarantor
(or, without double counting, any of its Subsidiaries), plus any accrued and
unpaid interest (including any default interest), compounded interest costs
and fees in respect of or attributable to that on-lending, outstanding as at
the Guarantee Demand Date;
(iv)
"
"
Guarantee Demand Date
"
"
means the first date upon which a Secured Party makes written demand upon the
relevant French Guarantor to make payment in respect of its Guarantee
Obligations; and
(v) in relation to a French Guarantor, "Subsidiary" means a Group Company
controlled by that French Guarantor within the meaning of article L.233-3 of
the French Commercial Code
(b) A French Guarantor shall not incur Guarantee Obligations other than in
respect of:
(i) that French Guarantor's Subsidiaries' obligations and liabilities under
the Loans; and
(ii) that French Guarantor's Indirect Borrowings under the Loans as at the
Guarantee Demand Date.
(c) Notwithstanding any provision (other than in this Section 5.10.6) to
the contrary, to the extent that any provision of this Agreement or any
certificate, notice or other document delivered under or in connection with
this Agreement is a guarantee by a French Guarantor of the obligations of any
other person, or an undertaking, covenant, obligation, representation or
warranty for any other person, then that French Guarantor shall not be bound
by any such guarantee, undertaking, covenant, obligation, representation or
warranty, unless made in respect of a Subsidiary of it.
(d) Without limiting the generality of the foregoing:
(i) the representations made in Section 9 (Representations and Warranties)
of this Agreement and in any other Loan Document by each French Guarantor
shall be made for itself and, if relevant, for each of its Subsidiaries only;
(ii) the covenants made in Section 10.1 (Affirmative Covenants) and in
Section 10.2 (Negative Covenants) of this Agreement and in any other Loan
Document by each French Guarantor shall be made for itself and, if relevant,
for each of its Subsidiaries only;
(iii) the obligations of any French Guarantor under the Loan Documents will
not extend beyond a point where they would infringe article L. 225-216 of the
French Commercial Code and/or would constitute a misuse of corporate assets
within the meaning of article L. 242-6 of the French Commercial Code (or any
other law or regulation having the same effect as interpreted by French
courts); and
(iv) the obligations of any French Guarantor under the Credit Documents
will not extend beyond a point where they would infringe article L. 511-7
3degree of the French Monetary and Financial Code.
-119-
AmericasActive:19663285.13
-------------------------------------------------------------------------------
Any repayment of any inter-company loans due by a French Guarantor under the
on-lending referred to in the definition of "Indirect Borrowings" above shall
reduce pro tanto the amount payable under the Guarantee.
Notwithstanding any provision (other than in this Section 5.10.6) to the
contrary, no French Guarantor is acting as a
"
"
co-debiteur solidaire
"
"
within the meaning of article 1318 of the French Civil Code as to its
obligations towards the Borrowers or the other Guarantors pursuant to the
Guarantee.
In the event of any conflict between the provisions of this Section 5.10.6 and
any other provisions of this Agreement or any other Loan Document, this
Section 5.10.6 shall prevail and govern.
5.11
Currency Matters
. Dollars are the currency of account and payment for each and every sum at
any time due from the Borrowers hereunder unless otherwise specifically
provided in this Agreement, any other Loan Document or otherwise agreed to by
Agent.
5.11.1 Each repayment of a Revolver Loan or LC Obligation or a part thereof
shall be made in the currency in which such Revolver Loan or LC Obligation is
denominated at the time of that repayment;
5.11.2 Each payment of interest shall be made in the currency in which the
principal or other sum in respect of which such interest is denominated;
5.11.4
5.11.3
Each payment of fees by the U.S
. Borrower pursuant to
Section 3.2
shall be in Dollars;
5.11.4 Each payment of fees by the Canadian Borrower pursuant to
Section 3.2
shall be in Dollars;
5.11.5 [Reserved];
5.11.6 Each payment in respect of Extraordinary Expenses and any other
costs, expenses and indemnities shall be made in the currency in which the
same were incurred by the party to whom payment is to be made;
5.11.7 Any amount expressed to be payable in Canadian Dollars shall be paid
in Canadian Dollars;
5.11.8 Any amount expressed to be payable in Euros shall be paid in Euros;
and
5.11.9 Any amount expressed to be payable in Sterling shall be paid in
Sterling.
No payment to any Secured Party (whether under any judgment or court order or
otherwise) shall discharge the obligation or liability of the Loan Party in
respect of which it was made unless and until such Secured Party shall have
received Full Payment in the currency in which such obligation or liability is
payable pursuant to the above provisions of this
Section 5.11
. To the extent that the amount of any such payment shall, on actual
conversion into such currency, fall short of such obligation or liability
-120-
AmericasActive:19663285.13
-------------------------------------------------------------------------------
actual or contingent expressed in that currency, such Loan Party (together
with the other Loan Parties within its Loan Party Group or other obligors
pursuant to any Guarantee of the Obligations of such Loan Party Group) agrees
to indemnify and hold harmless such Secured Party, with respect to the amount
of the shortfall with respect to amounts payable by such Loan Party hereunder,
with such indemnity surviving the termination of this Agreement and any legal
proceeding, judgment or court order pursuant to which the original payment was
made which resulted in the shortfall. To the extent that the amount of any
such payment to a Secured Party shall, upon an actual conversion into such
currency, exceed such obligation or liability, actual or contingent, expressed
in that currency, such Secured Party shall return such excess to the affected
Loan Party.
5.12
Currency Fluctuations
. On each Business Day or such other date determined by Agent, Agent shall
determine the Exchange Rate as of such date. The Exchange Rate so determined
shall become effective on the first (1st) Business Day immediately following
such determination (a "
Reset Date
") and shall remain effective until the next succeeding Reset Date. On each
Reset Date, Agent shall determine the Dollar Equivalent of the Canadian
Revolver Exposure and the U.S. Revolver Exposure, including in respect of the
stated amount of any outstanding Letters of Credit issued in Euros or
Sterling. If, on any Reset Date, (w) the Total Revolver Exposure exceeds the
total amount of the Commitments on such date or (x) the Canadian Revolver
Exposure on such date exceeds the Canadian Borrowing Base on such date or (y)
the U.S. Revolver Exposure on such date exceeds the U.S. Borrowing Base on
such date (the amount of any such excess referred to herein as the "
Excess Amount
") then (i) Agent shall give notice thereof to the applicable Borrower and
Applicable Lenders and (ii) within two (2) Business Days thereafter, the
applicable Borrower shall cause such excess to be eliminated, either by
repayment of Revolver Loans or depositing of Cash Collateral with Agent with
respect to LC Obligations and until such Excess Amount is repaid, the
Applicable Lenders shall not have any obligation to make any Loans.
SECTION 6. CONDITIONS PRECEDENT
6.1
Conditions Precedent to Initial Loans
. In addition to the conditions set forth in Section 6.2, Lenders shall not be
required to fund any requested Loan, issue any Letter of Credit, or otherwise
extend credit to the Borrowers hereunder, until the date ("
Third Restatement Date
") that each of the following conditions has been satisfied (and with respect
to deliveries of Loan Documents, each such delivery shall be fully-executed
(where applicable) and in form and substance satisfactory to Agent and its
counsel) (subject to
Section 10.1.13
):
(a) Notes shall have been executed by each Borrower and delivered to each
Applicable Lender that requests issuance of a Note. Each other Loan Document
set forth on the List of Closing Documents shall have been duly executed
(where applicable) by each of the signatories thereto and delivered to Agent,
and each Loan Party shall be in compliance with all terms thereof. Each other
instrument, document or agreement set forth on the List of Closing Documents
shall have been executed (where applicable) and delivered to Agent.
(b) Agent shall have received satisfactory evidence that Agent shall have a
valid and perfected security interest in the Collateral (including delivery to
Agent of all instruments needed for filings or recordations necessary to
perfect its Liens in the Collateral).
-121-
AmericasActive:19663285.13
-------------------------------------------------------------------------------
(c) Agent shall have received UCC, PPSA, and Lien searches and other
evidence satisfactory to Agent that its Liens are the only Liens upon the ABL
Priority Collateral, except Permitted Liens.
(d) All filing and recording fees and taxes shall have been duly paid or
arrangements satisfactory to Agent shall have been made for the payment
thereof.
(e) Agent shall have received certificates, in form and substance
satisfactory to it, from a Responsible Officer of each Loan Party certifying
that, after giving effect to the Transactions and the initial Loans and
transactions hereunder, (i) the Canadian Borrower and its consolidated
Restricted Subsidiaries, taken as a whole, and the U.S. Borrower and its
consolidated Restricted Subsidiaries, taken as a whole, are Solvent; (ii) no
Default or Event of Default exists; (iii) the representations and warranties
set forth in
Section 9
with respect to such Loan Party are true and correct in all material respects
(or, with respect to representations and warranties qualified by materiality,
in all respects) (except for representations and warranties that expressly
relate to an earlier date, in which case such representations and warranties
shall be true and correct in all material respects (or, with respect to
representations and warranties qualified by materiality, in all respects) as
of such earlier date); and (iv) such Loan Party has complied with all
agreements and conditions to be satisfied by it under the Loan Documents.
(f) Agent shall have received a certificate of a duly authorized officer of
or other person authorized to represent each Loan Party, certifying (i) that
attached copies of such Loan Party's Organization Documents are true and
complete, and in full force and effect, without amendment except as shown;
(ii) that an attached copy of resolutions authorizing execution and delivery
of the Loan Documents to which such Loan Party is a party is true and
complete, and that such resolutions are in full force and effect, were duly
adopted, have not been amended, modified or revoked, and constitute all
resolutions adopted with respect to this credit facility; (iii) all
governmental and other third party approvals and consents, if any, with
respect to this Agreement, the other Transactions and each other Loan Document
have been obtained and are in effect; and (iv) to the title, name and
signature of each Person authorized to sign the Loan Documents to which such
Loan Party is a party. Agent may conclusively rely on this certificate until
it is otherwise notified by the applicable Loan Party in writing.
(g) Agent shall have received satisfactory opinions of counsel to the Loan
Parties, in each case, customary for transactions of this type (which shall
cover, among other things, authority, legality, validity, binding effect and
enforceability of the Loan Documents) and of appropriate local counsel
(including Ontario and Netherlands counsel).
(h) Agent shall have received copies of the charter documents of each Loan
Party, certified by the Secretary of State or other appropriate official of
such Loan Party's jurisdiction of organization.
(i) Agent shall have received good standing certificates for each Loan
Party, issued by the Secretary of State or other appropriate official of such
Loan Party's jurisdiction of organization.
(j) Since December 31, 2015 no change, occurrence or development shall have
occurred or become known to the Lead Arrangers that could reasonably be
expected to have a Material Adverse Effect.
(k) Agent shall be satisfied with the amount, types and terms and
conditions of all insurance maintained by the Loan Parties and their
Restricted Subsidiaries; and Agent shall have received short
-122-
AmericasActive:19663285.13
-------------------------------------------------------------------------------
form (if available) (i) certificates of insurance with respect to each Loan
Parties' property and liability insurance, and (ii) endorsements naming Agent
as lender's loss payee or mortgagee, as the case may be and as its interests
may appear,
under all casualty and business interruption insurance policies to be
maintained with respect to the properties of the Loan Parties forming part of
the Collateral, in each case, in form and substance reasonably satisfactory to
Agent.
(l) No action, suit, investigation, litigation or proceeding pending or
threatened in any court or before any arbitrator or Governmental Authority
that in the Lenders' judgment (a) could reasonably be expected to have a
Material Adverse Effect or (b) could reasonably be expected to materially and
adversely affect the credit facilities or transactions contemplated hereby.
(m) All accrued fees and expenses of the Secured Parties and Lead Arrangers
(including the fees and expenses of counsel (including any local counsel) for
such Secured Parties and Lead Arrangers) due from the Loan Parties on or prior
to the Third Restatement Date, including all fees payable to Agent under the
Agent Fee Letter, shall have been paid in full in cash.
(n) All conditions precedent to the closing of the Fixed Asset Facility
shall have been satisfied in accordance with the Permitted Secured Debt
Documents to be executed on the Third Restatement Date. Agent shall have
received a certificate of a Responsible Officer of Loan Party Agent certifying
copies of the material Permitted Secured Debt Documents to be executed on the
Third Restatement Date attached thereto to be true, correct and complete
copies thereof.
(o) The Senior Unsecured Notes Issuance shall have been consummated
substantially concurrently with the Third Restatement Date.
(p) Each Lender shall have received all Patriot Act, anti-money laundering
and "know your client" documentation required in connection with this
Agreement from the Loan Parties.
(q) Agent shall have received executed releases with respect to all
outstanding mortgages in favor of the Agent under the Existing Credit
Agreement.
(r) Each of the Lenders shall have entered the Reallocation Agreement.
-123-
AmericasActive:19663285.13
-------------------------------------------------------------------------------
6.2
Conditions Precedent to All Credit Extensions
. Agent, Issuing Banks and Lenders shall not be required to fund any Loans or
arrange for issuance of any Letters of Credit to or for the benefit of the
Borrowers (including the initial Loans and Letters of Credit on the Third
Restatement Date), unless the following conditions are satisfied:
(a) No Default or Event of Default shall exist at the time of, or result
from, such funding or issuance;
(b) The representations and warranties of each Loan Party in the Loan
Documents shall be true and correct in all material respects (or, with respect
to representations and warranties qualified by materiality, in all respects)
on the date of, and upon giving effect to, such funding, issuance or grant
(except for representations and warranties that expressly relate to an earlier
date, in which case such representations and warranties shall be true and
correct in all material respects (or, with respect to representations and
warranties qualified by materiality, in all respects) as of such earlier date);
(c) Both immediately before and immediately after giving effect thereto, no
Canadian Overadvance or U.S. Overadvance shall exist or would result therefrom
and the Total Revolver Exposure would not exceed the Maximum Facility Amount;
and
(d) With respect to issuance of a Letter of Credit, the LC Conditions shall
be satisfied.
Each request (or deemed request, except a deemed request in connection with an
Overadvance or a Protective Advance or pursuant to
Section 2.2.2(a)
or
Section 2.3.2(a)
) by Loan Party Agent or any Borrower for funding of a Loan or issuance of a
Letter of Credit shall constitute a representation by all Borrowers that the
foregoing conditions are satisfied on the date of such request and on the date
of such funding or issuance.
SECTION 7. CASH COLLATERAL
7.1
Cash Collateral
.
Any Cash Collateral may be invested, at Agent's discretion, in Cash
Equivalents, but Agent shall have no duty to do so, regardless of any
agreement or course of dealing with any Loan Party, and shall have no
responsibility for any investment or loss. To further secure the prompt
payment and performance of all of its Obligations (including, without
limitation, all Obligations of the Guarantors), each U.S. Domiciled Loan Party
hereby grants to Agent, for the benefit of the Secured Parties, and to further
secure the prompt payment and performance of all Canadian Facility
Obligations, each Canadian Domiciled Loan Party hereby grants to Agent, for
the benefit of the Canadian Facility Secured Parties, in each case, a
continuing security interest in and Lien on all Cash Collateral held by such
Loan Party from time to time and all proceeds thereof, whether such Cash
Collateral is held in a Cash Collateral Account or elsewhere. Subject to
Section 5.6
,
Agent may apply Cash Collateral of a U.S. Domiciled Loan Party to the payment
of any Obligations, and may apply Cash Collateral of a Canadian Domiciled Loan
Party to the payment of any Canadian Facility Obligations, in each case, in
such order as Agent may elect, as they become due and payable. Each Cash
Collateral Account and all Cash Collateral shall be under the sole dominion
and control of Agent. No U.S. Domiciled Loan Party or other Person claiming
through or on behalf of any U.S. Domiciled Loan Party shall have any right to
any Cash Collateral, until Full Payment of all Obligations, unless if the
condition
-124-
AmericasActive:19663285.13
-------------------------------------------------------------------------------
for establishing Cash Collateral hereunder or under any other Loan Document is
in any manner satisfied or the amount of required Cash Collateral reduced, the
applicable Cash Collateral (or portion thereof) relating to such condition
shall at such time be paid by Agent to the Loan Party Agent. No Canadian
Domiciled Loan Party or other Person claiming through or on behalf of any
Canadian Domiciled Loan Party shall have any right to any Cash Collateral,
until Full Payment of all Canadian Facility Obligations, unless if the
condition for establishing Cash Collateral hereunder or under any other Loan
Document is in any manner satisfied or the amount of required Cash Collateral
reduced, the applicable Cash Collateral (or portion thereof) relating to such
condition shall at such time be paid by Agent to the Loan Party Agent.
SECTION 8. COLLATERAL ADMINISTRATION
8.1
Borrowing Base Certificates
.
By the twentieth (20th) day of each month (or, during the Cash Dominion
Trigger Period, by Wednesday of each week), or in any such case if such day is
not a Business Day, on the next succeeding Business Day, Loan Party Agent
shall deliver to Agent (and Agent shall promptly deliver same to Lenders) a
Borrowing Base Certificate with respect to the U.S. Borrower and Canadian
Borrower, in each case, prepared as of the close of business of the previous
month (or, if applicable, previous week), and, if a Default or an Event of
Default has occurred and is continuing, at more frequent times as Agent may
request. All calculations of the applicable Borrowing Base in any Borrowing
Base Certificate shall originally be made by Loan Party Agent and certified by
a Responsible Officer of Loan Party Agent, provided that Agent may from time
to time in its Permitted Discretion, review and adjust any such calculation
(a) to reflect its reasonable estimate of declines in value of any Collateral,
due to collections received in the Dominion Account or otherwise; (b) to
adjust advance rates to reflect changes in dilution, quality, mix and other
factors affecting Collateral; and (c) to the extent the calculation is not
made in accordance with this Agreement or does not accurately reflect the U.S.
Availability Reserve and/or the Canadian Availability Reserve. Each Borrowing
Base Certificate shall set forth the calculation of the U.S. Borrowing Base in
Dollars and of the Canadian Borrowing Base in the Dollar Equivalent.
8.2
Administration of Accounts
.
8.2.1
Records and Schedules of Accounts
. Each Loan Party shall keep accurate and complete records, in all material
respects, of its Accounts, including all payments and collections thereon, and
shall submit to Agent sales, collection, reconciliation and other reports in
form satisfactory to Agent, on such periodic basis as Agent may reasonably
request. Loan Party Agent shall also provide to Agent, on or before the
twentieth (20th) day of each month and, if a Default or an Event of Default
has occurred and is continuing, at more frequent times as Agent may request, a
detailed aged trial balance of all Accounts of each Borrower as of the end of
the preceding month (or shorter applicable period), specifying, to the extent
requested by Agent, each Account's Account Debtor name and address, amount,
invoice date and due date, showing any discount, allowance, credit, authorized
return or dispute, and including such proof of delivery, copies of invoices
and invoice registers, copies of related documents, repayment histories,
status reports and other information as Agent may reasonably request. If,
during an Audit Trigger Period, Accounts of the U.S. Borrower or the Canadian
Borrower in an aggregate face amount of $6,000,000 or more cease to be
Eligible Accounts (other than as a result of the payment thereof), Loan Party
Agent shall notify Agent of such occurrence promptly after any Loan Party has
knowledge thereof.
-125-
AmericasActive:19663285.13
-------------------------------------------------------------------------------
8.2.2
Taxes
. If an Account of any Loan Party includes a charge for any Taxes, Agent is
authorized, in its discretion, after a Default or an Event of Default has
occurred and is continuing, to pay the amount thereof to the proper
Governmental Authority for the account of such Loan Party and to charge the
Loan Party Agent therefor; provided, however, that neither Agent nor Lenders
shall be liable for any Taxes that may be due from the Loan Parties or with
respect to any Collateral.
8.2.3
Account Verification
. Agent shall have the right during normal business hours and with reasonable
frequency, in coordination and together with the Loan Party Agent to verify
the validity, amount or any other matter relating to any material Accounts of
the Loan Parties by mail, telephone or otherwise, and the Loan Party Agent
shall cooperate fully with Agent in an effort to facilitate and promptly
conclude any such verification process. If a Default or Event of Default has
occurred and is continuing, Agent shall have the right at any time to conduct
such verifications, in the name of Agent, Loan Party Agent or any Loan Party.
8.2.4
Maintenance of DACA Deposit Accounts and Dominion Accounts
. The Canadian Domiciled Loan Parties shall establish a Canadian Dominion
Account (including by designating an existing Deposit Account as a "
Canadian Dominion Account
"). The U.S. Facility Loan Parties shall establish the U.S. Dominion Account
(including by designating an existing Deposit Account as a "
U.S. Dominion Account
"). The Loan Parties shall (i) require each lockbox servicer of each of any
Loan Party's lockboxes (if any) in the United States or Canada to deposit all
Payment Items received therein directly to a Deposit Account (other than an
Excluded Deposit Account) at the related financial institution, and (ii)
maintain each such Deposit Account, together with all other Deposit Accounts
of the Loan Parties (other than Excluded Deposit Accounts) as DACA Deposit
Accounts by obtaining an executed Deposit Account Control Agreement from each
such lockbox servicer and each financial institution which maintains Deposit
Accounts (other than any Excluded Deposit Accounts) for any Loan Party, which
Deposit Account Control Agreement (a) establishes Agent's dominion and control
over the subject lockbox(es), if any, and/or DACA Deposit Account(s) of the
Loan Parties maintained with such servicer or institution, which may be
exercised by Agent during any Cash Dominion Trigger Period, (b) requires daily
application of amounts on deposit in the subject DACA Deposit Account to a
Dominion Account at Bank of America as directed by Agent during any Cash
Dominion Trigger Period, and (c) waives offset rights of such servicer or
bank, except for customary administrative charges; it being understood that,
with respect to any Deposit Account which does not at any time comply with the
foregoing requirements specified in this sentence (other than those required
to be delivered on the Third Restatement Date), no funds contained therein
shall be treated as either Canadian Designated Cash Amount or U.S. Designated
Cash Amount for purposes of this Agreement and the Loan Party Agent shall, at
Agent's request, within thirty (30) days, in coordination with Agent, cause
replacement arrangements to be implemented with respect to the applicable
accounts which are reasonably satisfactory to Agent. Neither Agent nor Lenders
assume any responsibility to the Loan Parties for any lockbox arrangement,
DACA Deposit Account or Dominion Account, including any claim of accord and
satisfaction or release with respect to any Payment Items accepted by any bank.
-126-
AmericasActive:19663285.13
-------------------------------------------------------------------------------
8.2.5
Proceeds of Collateral; Payment Items Received
. Loan Party Agent shall take all commercially reasonable steps to ensure that
all payments on Accounts included in the ABL Priority Collateral or otherwise
relating to ABL Priority Collateral are made directly to a DACA Deposit
Account (or a lockbox relating to a DACA Deposit Account) or, during a Cash
Dominion Trigger Period, a Dominion Account. If any Loan Party or Restricted
Subsidiary receives cash or Payment Items with respect to any ABL Priority
Collateral or any Payment Item not properly deposited by a lockbox servicer in
accordance with the requirements set forth in
Section 8.2.4
, it shall hold same in trust for Agent and promptly deposit same into a DACA
Deposit Account or, during a Cash Dominion Trigger Period, a Dominion Account
for application to the Obligations in accordance with
Section 5.5
or
5.6
, as applicable.
8.3
Administration of Inventory
.
8.3.1
Records and Reports of Inventory
. Each Loan Party shall keep accurate and complete records of its Inventory in
the United States and Canada consistent in all material respects with
historical practices, and shall submit to Agent inventory and reconciliation
reports (which reports shall set forth the Inventory information by location)
in form reasonably satisfactory to Agent, on such periodic basis as Agent may
reasonably request. Subject to
Section 10.1.9
, Loan Party Agent shall conduct (or shall cause to be conducted) a physical
inventory in the United States and Canada at least once per calendar year (and
on a more frequent basis if requested by Agent when an Event of Default
exists) and periodic cycle counts consistent with historical practices, and
shall provide to Agent a report based on each such inventory and count
promptly upon completion thereof, together with such supporting information as
Agent may reasonably request. Agent may participate in and observe each
physical count.
8.3.2
Returns of Inventory
. No Loan Party shall return any Inventory to a supplier, vendor or other
Person, whether for cash, credit or otherwise, unless (a) such return is in
the ordinary course of business; (b) no Default, Event of Default or
Overadvance exists or would result therefrom; (c) Agent is promptly notified
if the aggregate Value of all Inventory returned in any month exceeds
$10,000,000, in aggregate; and (d) any payment received by a Loan Party for a
return is promptly deposited to a DACA Deposit Account or a Dominion Account.
8.3.3
Acquisition, Sale and Maintenance
. With respect to Inventory that has been included in the calculation of the
U.S. Borrowing Base or Canadian Borrowing Base, no Loan Party shall acquire or
accept any such Inventory on consignment or approval and the Loan Parties
shall take all commercially reasonable steps to assure that all Inventory is
produced in accordance with applicable Law, including the FLSA; except in any
such case where the failure to do so could not reasonably be expected to
result in a Material Adverse Effect. The Loan Parties shall use, store and
maintain all Inventory with reasonable care and caution, in accordance with
historical practices and in conformity in all material respects with all
applicable Law, and shall make current rent payments (within applicable grace
periods provided for in leases) at all locations where any ABL Priority
Collateral is located; except in any such case where the failure to do so
could not reasonably be expected to result in a Material Adverse Effect.
8.4
[Intentionally Omitted]
.
-127-
AmericasActive:19663285.13
-------------------------------------------------------------------------------
8.5
Administration of Deposit Accounts
.
Schedule 8.5
sets forth all lockbox arrangements and Deposit Accounts (including Dominion
Accounts) maintained by the Loan Parties in the United States and Canada as of
the First Amendment Effective Date. Each Loan Party shall take all
commercially reasonable actions necessary to establish Agent's control of each
such Deposit Account (other than Excluded Deposit Accounts) by causing the
related deposit account bank to enter into a Deposit Account Control
Agreement; it being understood that, with respect to any Deposit Account which
does not at any time comply with the foregoing requirements specified in this
sentence (other than those required to be delivered on the First Amendment
Effective Date), the applicable Borrower shall provide notice of the same to
Agent, and no funds contained therein shall be treated as either Canadian
Designated Cash Amount or U.S. Designated Cash Amount for purposes of this
Agreement and the Loan Party Agent shall within thirty (30) days, at Agent's
request and in coordination with Agent, cause replacement arrangements to be
implemented with respect to the applicable accounts which are reasonably
satisfactory to Agent.
The sole account holder of each Deposit Account shall be a single Loan Party
and the Loan Parties shall not allow any other Person (other than Agent and,
subject to the Intercreditor Agreement, the agent specified therein) to have
control (as contemplated by the UCC and the PPSA) over a DACA Deposit Account
or any property deposited therein. Each Loan Party shall promptly notify Agent
of any opening or closing of a Deposit Account in the United States or Canada,
as applicable, and, concurrently with the opening thereof, shall ensure such
account (other than accounts excluded from the operation of this paragraph
above) is subject to a fully executed Deposit Account Control Agreement, an
original copy of which has been delivered to Agent.
8.6
General Provisions
.
8.6.1
Location of Collateral
. All material amounts of tangible items of ABL Priority Collateral, other
than Inventory in transit, shall at all times be kept by the Loan Parties at
the Borrowers' business locations set forth in
Schedule 8.6.1
, except that the Loan Parties may (a) make sales or other dispositions of
Collateral in the ordinary course of business; (b) in the case of any U.S.
Facility Loan Party, move Collateral to another location in the continental
United States (so long as notice of such move is provided to Agent
concurrently with delivery of the applicable financial information required
pursuant to
Sections 10.1.2(a)
,
(b)
or
(c)
, as applicable) or Canada (upon thirty (30) days' (or such lesser time as
Agent shall agree in writing) prior written notice to Agent), so long as all
actions shall have been taken prior to such move to ensure that Agent has a
perfected first priority Lien upon all the ABL Priority Collateral and (c) in
the case of a Canadian Domiciled Loan Party, move Collateral to another
location in Canada (upon thirty (30) days' (or such lesser time as Agent shall
agree in writing) prior written notice to Agent) or the United States (so long
as notice of such move is provided to Agent concurrently with delivery of the
applicable financial information required pursuant to Sections 10.1.2(a), (b)
or (c), as applicable), so long as all actions shall have been taken prior to
such move to ensure that Agent has a perfected first priority security
interest in and Lien upon all the ABL Priority Collateral, provided, however,
that with respect to the foregoing clauses (b) and (c), if such Collateral is
to be in the possession of a third party at a location not set forth on
Schedule 8.6.1
, the applicable Loan Party having rights in such Collateral shall use
commercially reasonable efforts to obtain a Collateral Access Agreement with
respect thereto.
8.6.2
Insurance of Collateral; Condemnation Proceeds
.
-128-
AmericasActive:19663285.13
-------------------------------------------------------------------------------
(a) (1) Each Loan Party shall maintain insurance with respect to the
Collateral, covering casualty, hazard, theft, malicious mischief, flood and
other risks, in amounts, with endorsements and with insurers (with a Best's
Financial Strength Rating of at least A+, unless otherwise approved by Agent)
consistent with past practices. Proceeds under each policy in excess of
$10,000,000 per claim, to the extent arising out of the ABL Priority
Collateral, shall be payable to Agent (for application by Agent (i) in
accordance with
Section 5.5
or
5.6
, if applicable, (ii) if a Default has occurred and is continuing, to payment
of the Revolver Loans of the applicable Borrower or (iii) so long as no
Default or Event of Default has occurred and is continuing, for payment to
Loan Party Agent). (2) From time to time upon request, Loan Party Agent shall
deliver to Agent the originals or certified copies of its insurance policies.
Unless Agent shall agree otherwise, each policy shall include satisfactory
endorsements (i) showing Agent and its successors as lender's loss payee, as
its interests may appear; (ii) requiring at least thirty (30) days prior
written notice to Agent in the event of cancellation of the policy for any
reason whatsoever; and (iii) specifying that the interest of Agent shall not
be impaired or invalidated by any act or neglect of any Loan Party or the
owner of the property, nor by the occupation of the premises for purposes more
hazardous than are permitted by the policy. If any Loan Party fails to provide
and pay for any insurance, Agent may in consultation with the Loan Party
Agent, but shall not be required to, procure the insurance and charge the Loan
Parties therefor. Loan Party Agent agrees to deliver to Agent, promptly as
rendered, copies of all material reports made to insurance companies. While no
Event of Default exists, the Loan Parties may settle, adjust or compromise any
insurance claim relating to the ABL Priority Collateral, as long as the
proceeds in excess of $10,000,000 per claim are delivered to Agent (for
application by Agent as specified in the first sentence of this
clause (a)(1
)). If an Event of Default exists, only Agent shall be authorized to settle,
adjust and compromise claims in excess of $500,000 in the aggregate related to
the ABL Priority Collateral.
(b) Any proceeds of insurance (other than proceeds from workers'
compensation or D&O insurance) and any awards arising from condemnation of, in
each case, any ABL Priority Collateral, or any proceeds or awards that relate
to Inventory included in the ABL Priority Collateral, in any such case in
excess of $10,000,000 per claim, to the extent received by any Loan Party,
shall be paid to Agent (for application by Agent as specified in the first
sentence of the foregoing
clause (a)(1)
).
8.6.3
Protection of Collateral
. All expenses of protecting, storing, warehousing, insuring, handling,
maintaining and shipping any Collateral of a Loan Party Group, all Taxes
payable with respect to any Collateral of a Loan Party Group (including any
sale thereof), and all other payments required to be made by Agent to any
Person to realize upon any Collateral of a Loan Party Group, shall be borne
and paid by the Loan Parties of such Loan Party Group. Agent shall not be
liable or responsible in any way for the safekeeping of any Collateral, for
any loss or damage thereto (except for reasonable care in its custody while
Collateral is in Agent's actual possession), for any diminution in the value
thereof, or for any act or default of any warehouseman, carrier, forwarding
agency or other Person whatsoever, but the same shall be at the Loan Parties'
sole risk.
8.6.4
Defense of Title to Collateral
. Each Loan Party shall at all times defend in a manner consistent with past
practices its title to any material Collateral and Agent's Liens therein
against all Persons, claims and demands whatsoever, except Permitted Liens.
-129-
AmericasActive:19663285.13
-------------------------------------------------------------------------------
8.7
Power of Attorney
. Each Loan Party hereby irrevocably constitutes and appoints Agent (and all
Persons designated by Agent) as such Loan Party's true and lawful attorney
(and agent-in-fact), coupled with an interest, for the purposes and during the
times provided in this Section. Upon Agent's reasonable request, each Mexican
Guarantor shall execute and deliver any instrument, document or agreement that
Agent may reasonably request to effect such appointment. Agent, or Agent's
designee, may, without notice and in either its or a Loan Party's name, but at
the cost and expense of the Loan Parties within such Loan Party's Loan Party
Group:
(a) Endorse a Loan Party's name on any Payment Item or other proceeds of
Collateral (including proceeds of insurance) that come into Agent's possession
or control; and
(b) After an Event of Default has occurred and is continuing, (i) notify
any Account Debtors of the assignment of their Accounts, demand and enforce
payment of Accounts by legal proceedings or otherwise, and generally exercise
any rights and remedies with respect to Accounts; (ii) settle, adjust, modify,
compromise, discharge or release any Accounts or other Collateral, or any
legal proceedings brought to collect Accounts or Collateral; (iii) sell or
assign any Accounts and other Collateral upon such terms, for such amounts and
at such times as Agent deems advisable; (iv) collect, liquidate and receive
balances in DACA Deposit Accounts or investment accounts, and take control, in
any manner, of proceeds of Collateral; (v) prepare, file and sign a Loan
Party's name to a proof of claim or other document in a bankruptcy of an
Account Debtor, or to any notice, assignment or satisfaction of Lien or
similar document; (vi) receive, open and dispose of mail addressed to a Loan
Party, and notify postal authorities to deliver any such mail to an address
designated by Agent; (vii) endorse any Chattel Paper, Document, Instrument,
bill of lading, or other document or agreement relating to any Accounts,
Inventory or other Collateral; (viii) use a Loan Party's stationery and sign
its name to verifications of Accounts and notices to Account Debtors; (ix) use
information contained in any data processing, electronic or information
systems relating to Collateral; (x) make and adjust claims under insurance
policies; (xi) take any action as may be necessary or appropriate to obtain
payment under any letter of credit, banker's acceptance or other instrument
constituting Collateral for which a Loan Party is a beneficiary; and (xii)
take all other actions as Agent deems appropriate to fulfill any Loan Party's
obligations under the Loan Documents.
SECTION 9. REPRESENTATIONS AND WARRANTIES
9.1
General Representations and Warranties
.
To induce Agent and Lenders to enter into this Agreement and to make available
the Commitments, Loans and Letters of Credit, each Loan Party hereby jointly
and severally with the other Loan Parties represents and warrants that:
9.1.1
Organization and Qualification
. Each Loan Party and each of the Restricted Subsidiaries is duly organized,
validly existing and in good standing (or equivalent) under the laws of the
jurisdiction of its organization, except, other than Holdings or any Borrower,
where failure to be so could not reasonably be expected to result in a
Material Adverse Effect. Each Loan Party and each of the Restricted
Subsidiaries is duly qualified, authorized to do business and in good standing
as a foreign or extra provincial, as the case may be, corporation, limited
liability company, exempted company or other entity in each jurisdiction,
except where failure to be so qualified, authorized or in good standing could
not reasonably be expected to result in a Material Adverse Effect. The
information included in the
-130-
AmericasActive:19663285.13
-------------------------------------------------------------------------------
Beneficial Ownership Certification most recently provided to Agent and each
Lender is true and complete in all respects.
9.1.2
Power and Authority
. Each Loan Party is duly authorized to execute, deliver and perform the Loan
Documents to which it is a party. The execution, delivery and performance by
each Loan Party of the Loan Documents to which it is a party have been duly
authorized by all necessary corporate (or equivalent) action of such Loan
Party, and do not (a) require any consent or approval of any holders of Equity
Interests of such Loan Party or any Governmental Authority, in each case,
other than those already obtained; (b) contravene the Organization Documents
of such Loan Party; (c) violate or cause a default under any material
applicable Law binding on such Loan Party or Material Contract of such Loan
Party, except, with respect to Material Contracts, which could not reasonably
be expected to result in a Material Adverse Effect; (d) require any
registration or filing with, or any other action by, any Governmental
Authority, except (i) such as have been obtained or made and are in full force
and effect, (ii) filings necessary to perfect Liens created by the Loan
Documents and (iii) consents, approvals, registrations, filings, permits or
actions the failure to obtain or perform which could not reasonably be
expected to result in a Material Adverse Effect; or (e) result in or require
the imposition of any Lien (other than Permitted Liens) on any asset or
property of any Loan Party or Restricted Subsidiary.
9.1.3
Enforceability
. Each Loan Document is a legal, valid and binding obligation of each Loan
Party party thereto, enforceable against such Loan Party in accordance with
its terms, subject to bankruptcy, insolvency or similar laws affecting the
enforcement of creditors' rights generally and general principles of equity,
regardless of whether considered in a proceeding in law or in equity.
9.1.4
Corporate Names; Capital Structure
.
Schedule 9.1.4
shows, for Holdings and each Restricted Subsidiary, its name, its jurisdiction
of organization, its issued Equity Interests, the holders of its Equity
Interests, in each case, as of the First Amendment Effective Date.
9.1.5
Locations
. As of the First Amendment Effective Date, the chief executive offices and
other places of business of the Loan Parties are shown on
Schedule 8.6.1
.
9.1.6
Title to Properties; Priority of Liens
.
(a) Each Loan Party and each of the Restricted Subsidiaries has good and
marketable title to (or valid leasehold interests in) all of its Real Estate,
and good title to, or rights in, all of its personal tangible property, in
each case with respect to such Real Estate and personal property which is
material to its business, including all property reflected in any financial
statements delivered to Agent or the Lenders, in each case free of Liens
except Permitted Liens.
(b) [
Reserved
].
9.1.7
Accounts and Inventory
. (a) Agent may rely, in determining which Accounts are Eligible Accounts, on
all statements and representations made by or on behalf of the Borrowers with
respect thereto. All Accounts included in the calculation of Eligible Accounts
in any Borrowing Base Certificate are Eligible Accounts as of the date of such
Borrowing Base Certificate. Borrowers warrant, with respect to each Account at
the time it is shown as an Eligible Account in a Borrowing Base Certificate,
that:
-131-
AmericasActive:19663285.13
-------------------------------------------------------------------------------
(i) it is genuine and in all respects what it purports to be, and is not
evidenced by a judgment;
(ii) it arises out of a completed, bona fide sale and delivery of goods or
rendition of services in the ordinary course of business, and substantially in
accordance with any purchase order, contract or other document relating
thereto;
(iii) it is for a sum certain, maturing as stated in the invoice covering
such sale or rendition of services, a copy of which has been furnished or is
available to Agent on request;
(iv) it is not subject to any offset, Lien (other than Permitted Liens),
deduction, ongoing defense, dispute or counterclaim, except as arising in the
ordinary course of business or otherwise disclosed to Agent; and it is
absolutely owing by the Account Debtor, without contingency in any respect;
(v) no purchase order, agreement, document or applicable Law restricts
assignment of the Account to Agent (regardless of whether, under the UCC or
the PPSA, the restriction is ineffective), and the applicable Borrower is the
sole payee or remittance party shown on the invoice;
(vi) no extension, compromise, settlement, modification, credit, deduction
or return has been authorized with respect to the Account, except (i)
discounts or allowances granted in the ordinary course of business for prompt
payment that are reflected on the face of the invoice related thereto and in
the reports submitted to Agent hereunder or (ii) other discounts or allowances
reflected in the Value of such Account; and
(vii) to the best of the applicable Borrower's knowledge, (A) there are no
facts or circumstances that are reasonably likely to impair the enforceability
or collectability of such Account, (B) the Account Debtor had the capacity to
contract when the Account arose, continues to meet the applicable Borrower's
customary credit standards, is Solvent, is not contemplating or subject to an
Insolvency Proceeding, and has not failed, or suspended or ceased doing
business; and (C) there are no proceedings or actions threatened or pending
against any Account Debtor that could reasonably be expected to have a
material adverse effect on the Account Debtor's financial condition.
(b) Agent may rely, in determining which Inventory is Eligible Inventory,
on all statements and representations made by or on behalf of the Borrowers
with respect thereto. All Inventory included in the calculation of Eligible
Inventory in any Borrowing Base Certificate is Eligible Inventory as of the
date of such Borrowing Base Certificate.
9.1.8
Financial Statements; Solvency; Material Adverse Effect
.
(a) The consolidated balance sheets, and related statements of income, cash
flow and shareholder's equity, of Parent and its Subsidiaries that have been
and are hereafter delivered to Agent and Lenders, in each case, are and will
be prepared in accordance with GAAP, and fairly present the financial
positions and results of operations of such Persons at the dates and for the
periods indicated, subject to year-end audit adjustments and the absence of
footnotes in the case of statements prepared
-132-
AmericasActive:19663285.13
-------------------------------------------------------------------------------
other than at year-end. All projections delivered from time to time to Agent
and Lenders by or on behalf of the Loan Parties and Restricted Subsidiaries
have been prepared in good faith, based on assumptions believed by Holdings to
be reasonable at the time delivered to Agent, in light of the circumstances at
such time.
(b) Since December 31, 2015, there has been no change in the condition,
financial or otherwise, of Holdings and its Restricted Subsidiaries, taken as
a whole, that could reasonably be expected to have a Material Adverse Effect.
(c) No financial statement delivered to Agent or Lenders by or on behalf of
any of the Loan Parties and the Restricted Subsidiaries at any time contains
any untrue statement of a material fact or omits any material fact required to
be stated therein or necessary to make the statements made therein, in light
of the circumstances under which they are made, not misleading as of the time
when made or delivered.
(d) After giving effect to the Transactions, on the Third Restatement Date,
the Canadian Borrower and its consolidated Restricted Subsidiaries and the
U.S. Borrower and its consolidated Restricted Subsidiaries, in each case taken
as a whole, are Solvent.
9.1.9
Taxes
. Except to the extent it could reasonably be expected to not have a Material
Adverse Effect, Holdings and each Restricted Subsidiary has timely filed all
federal and state income tax returns, and all local and provincial income tax
returns and other reports that it is required by law to file, and has timely
paid, or made provision for the payment of, all federal and state Taxes upon
it and all local and provincial and other Taxes upon it, and its income and
its Properties that are due and payable, except to the extent being Properly
Contested.
9.1.10
[Intentionally Omitted]
9.1.11
Intellectual Property
. Except as could not reasonably be expected to have a Material Adverse
Effect, each Loan Party and each of the Restricted Subsidiaries owns or has
the lawful right to use all Intellectual Property used, held for use or
otherwise necessary in the conduct of its business, without conflict with any
rights of others. No Intellectual Property owned or used by a Loan Party or
any Restricted Subsidiary that is material to the operations or business of
any Loan Party has been adjudged invalid or unenforceable by a court of
competent jurisdiction or applicable intellectual property registry or been
cancelled, in whole or in part, except where such judgment, decree, ruling or
cancellation could not reasonably be expected to have a Material Adverse
Effect. There is no pending or, to any Loan Party's knowledge, threatened
Intellectual Property Claim with respect to any Loan Party, any Restricted
Subsidiary or any of their property (including any Intellectual Property), and
the operation of the businesses of each Loan Party and Restricted Subsidiary
does not infringe upon, misappropriate, dilute or otherwise violate the
proprietary rights of any third party, except as could not reasonably be
expected to have a Material Adverse Effect. All material U.S. Intellectual
Property owned, used, held for use or licensed by, or otherwise subject to any
interests of, any Loan Party or Restricted Subsidiary on the First Amendment
Effective Date is shown on
Schedule 9.1.11
.
-133-
AmericasActive:19663285.13
-------------------------------------------------------------------------------
9.1.12
Governmental Approvals
. Each Loan Party and each of the Restricted Subsidiaries has, is in
compliance with, and is in good standing with respect to, all Governmental
Approvals necessary to conduct its business and to own, lease and operate its
Properties, except as could not reasonably be expected to have a Material
Adverse Effect. All necessary import, export or other licenses, permits or
certificates for the import or handling of any goods or other Collateral have
been procured and are in effect, and the Loan Parties and Restricted
Subsidiaries have complied with all foreign and domestic laws with respect to
the shipment and importation of any goods or Collateral, except where such
noncompliance could not reasonably be expected to have a Material Adverse
Effect.
9.1.13
Compliance with Laws
. Each Loan Party and each of the Restricted Subsidiaries has duly complied,
and its properties and business operations are in compliance, in each case in
all respects, with all applicable Laws (including Environmental Laws and with
respect to Environmental Permits), except where noncompliance could not
reasonably be expected to have a Material Adverse Effect. There have been no
citations, notices or orders relating to noncompliance issued to any Loan
Party or Restricted Subsidiary under any applicable Law, except where such
noncompliance would not reasonably be expected to have a Material Adverse
Effect. No Inventory has been produced in violation of the FLSA, except where
such violation could not reasonably be expected to have a Material Adverse
Effect.
9.1.14
Compliance with Environmental Laws
. Except as disclosed on
Schedule 9.1.14
or would not reasonably be expected to have a Material Adverse Effect, (i) no
Loan Party's or Restricted Subsidiary's present or, to its knowledge, former
operations, Real Estate or other properties are subject to any federal, state,
provincial, territorial or local investigation to determine whether any
remedial action is required under Environmental Law to address any
environmental pollution, Hazardous Material or environmental clean-up, (ii) no
Hazardous Materials are present and there has been no Release or threat of
Release of Hazardous Materials at any current facility, or to the knowledge of
any Loan Party or Restricted Subsidiary, at any former facility, in a manner
or condition that would reasonably be expected to result in Environmental
Liability, (iii) no Loan Party or Restricted Subsidiary has received any
Environmental Claim and (iv) no Loan Party or Restricted Subsidiary knows of
any facts, conditions or circumstances which would reasonably be expected to
give rise to any Environmental Liability.
9.1.15
Burdensome Contracts
. No Loan Party or Restricted Subsidiary is a party or subject to any
contract, agreement or charter restriction that has resulted in or could
reasonably be expected to have a Material Adverse Effect. No Loan Party or
Restricted Subsidiary is party or subject to any Restrictive Agreement other
than, (v) the Loan Documents, (w) the Permitted Secured Debt Documents, (x)
customary non-assignment provisions with respect to leases or licensing
agreements entered into by the Loan Parties or any of their Restricted
Subsidiaries in the ordinary course of business, (y) any restriction or
encumbrance with respect to any asset of the Loan Parties or any of their
Restricted Subsidiaries imposed pursuant to an agreement which has been
entered into for the sale or disposition of such assets otherwise permitted
under this Agreement, (z) customary provisions in joint venture agreements and
other similar agreements entered into in the ordinary course of business, (aa)
customary restrictions in connection with a Permitted Receivables Financing,
if any, (bb) Restrictive Agreements relating to Incremental Equivalent Debt
otherwise permitted hereunder, (cc) agreements to which a Foreign Subsidiary
that is not a Loan Party is party to the extent that the restrictions or
conditions therein are imposed only on such Foreign Subsidiary and other
Subsidiaries that are not Loan Parties and (dd) Restrictive Agreements
relating to Refinancing Indebtedness otherwise permitted hereunder. No
-134-
AmericasActive:19663285.13
-------------------------------------------------------------------------------
Restrictive Agreement prohibits the execution, delivery or performance of any
Loan Document by a Loan Party or Restricted Subsidiary.
9.1.16
Litigation
. Except as shown on
Schedule 9.1.16
, there are no proceedings or investigations pending or, to any Loan Party's
knowledge, threatened against any Loan Party or Restricted Subsidiary, or any
of their businesses, operations, properties or conditions, that (a) relate to
any Loan Document or the Transactions; or (b) have resulted in or could
reasonably be expected to have a Material Adverse Effect. Except as shown on
Schedule 9.1.16
, no Loan Party has a commercial tort claim (other than commercial tort claims
for less than $10,000,000). No Loan Party or Restricted Subsidiary is in
default with respect to any order, injunction or judgment of any Governmental
Authority that could reasonably be expected to have a Material Adverse Effect.
9.1.17
No Defaults
. No event or circumstance has occurred or exists that constitutes a Default
or Event of Default. No Loan Party or Restricted Subsidiary is in default, and
no event or circumstance has occurred or exists that with the passage of time
or giving of notice would constitute a default by any Loan Party or Restricted
Subsidiary, under any Material Contract that could reasonably be expected to
have a Material Adverse Effect.
9.1.18
ERISA
.
(a) Except as could not reasonably be expected, individually or in the
aggregate, to result in a Material Adverse Effect, each Pension Plan is in
compliance with the applicable provisions of ERISA, the Code and other federal
or state Laws.
(b) There are no pending or, to the knowledge of any Loan Party, threatened
claims, actions or lawsuits, or action by any Governmental Authority, with
respect to any Pension Plan that could reasonably be expected to have a
Material Adverse Effect.
(c) (i) No ERISA Event has occurred and no Loan Party is aware of any fact,
event or circumstance that could reasonably be expected to constitute or
result in an ERISA Event with respect to any Pension Plan or Multiemployer
Plan; (ii) no Pension Plan has any Unfunded Pension Liability as of the
Pension Plan's most recent valuation date; (iii) neither any Loan Party nor
any ERISA Affiliate has incurred, or reasonably expects to incur any liability
(and no event has occurred which, with the giving of notice under Section 4219
of ERISA, would result in such liability) under Section 4201 or 4243 of ERISA
with respect to a Multiemployer Plan; (iv) neither any Loan Party nor any
ERISA Affiliate has engaged in a transaction that could be subject to Sections
4069 or 4212(c) of ERISA, except with respect to each of the foregoing clauses
of this
Section 9.1.18(c)
, as could not reasonably be expected, individually or in the aggregate, to
have a Material Adverse Effect.
(d) With respect to each scheme or arrangement related to retirement or
pension obligations mandated by a government other than the United States or
Canada (a "
Foreign Government Scheme or Arrangement
") and with respect to each retirement or pension plan maintained or
contributed to by Holdings or any of its Restricted Subsidiaries that is not
subject to United States or Canadian law (a "
Foreign Plan
"):
(i) any employer and employee contributions required by law or by the terms
of any Foreign Government Scheme or Arrangement or any Foreign Plan have been
made, or, if
-135-
AmericasActive:19663285.13
-------------------------------------------------------------------------------
applicable, accrued, in accordance with normal accounting practices, except
for any failure that could not reasonably be expected to have a Material
Adverse Effect;
(ii) the fair market value of the assets of each funded Foreign Plan, the
liability of each insurer for any Foreign Plan funded through insurance or the
book reserve established for any Foreign Plan, together with any accrued
contributions, is sufficient to procure or provide for the accrued benefit
obligations, as of the Third Restatement Date, with respect to all current and
former participants in such Foreign Plan according to the actuarial
assumptions and valuations most recently used to account for such obligations
in accordance with applicable generally accepted accounting principles except
for any underfunding that could not reasonably be expected to have a Material
Adverse Effect; and
(iii) each Foreign Plan required to be registered has been registered and
has been maintained in compliance with its terms and with the requirements of
any and all applicable laws, statutes, rules, regulations and orders and has
been maintained, where required, in good standing with applicable regulatory
authorities, except as could not reasonably be expected to have a Material
Adverse Effect.
(e) Except as could not reasonably be expected to result in a Material
Adverse Effect in the case of clauses (i), (ii) or (v), (i) the Canadian
Domiciled Loan Parties are in compliance with the requirements of the PBA with
respect to each Canadian Pension Plan and in compliance with any FSCO order
directed specifically at a Canadian Pension Plan; (ii) except as disclosed on
Schedule 9.1.18(e)
, no Canadian Pension Plan has any Unfunded Pension Liability as of the First
Amendment Effective Date with respect to the Retirement Benefit Agreement
between Cooper-Standard Automotive Canada Limited and the National Automobile,
Aerospace, Transportation and General Workers Union of Canada (C.A.W.) Local
876 and as of the First Amendment Effective Date with respect to the Pension
Plan for Salaried Employees of Cooper-Standard Automotive Canada Limited;
(iii) no fact or situation that may reasonably be expected to result in a
Material Adverse Effect exists in connection with any Canadian Pension Plan;
(iv) no Termination Event has occurred, except where prior written notice of
such Termination Event has been given to Agent in accordance with
Section 10.2.16
; (v) all contributions required to be made by any Canadian Domiciled Loan
Party or Subsidiary to any Canadian Pension Plan have been made in a timely
fashion in accordance with the terms of such Canadian Pension Plan and the
PBA; (vi) no Lien has arisen, choate or inchoate, in respect of any Canadian
Domiciled Loan Party or their property in connection with any Canadian Pension
Plan (save for contribution amounts not yet due), other than Permitted Liens
and (vii) as of the First Amendment Effective Date the FSCO or the
Superintendent has not issued any notices of wind up in respect of any
Canadian Pension Plan.
9.1.19
Trade Relations
. There exists no actual or, to the knowledge of any Loan Party, threatened
termination, limitation or modification of any business relationship between
any Loan Party or Restricted Subsidiary, on the one hand, and any customer or
supplier, or any group of customers or suppliers, on the other hand, which
individually or in the aggregate could reasonably be expected to result in a
Material Adverse Effect. There exists no condition or circumstance that has
materially impaired or could reasonably be expected to materially impair the
ability of any Loan Party or Restricted Subsidiary to conduct its business at
any time hereafter in substantially the same manner as conducted on the First
Amendment Effective Date.
-136-
AmericasActive:19663285.13
-------------------------------------------------------------------------------
9.1.20
Labor Relations
. Except as described on
Schedule 9.1.20
, on the First Amendment Effective Date no Loan Party or Restricted Subsidiary
is party to or bound by any collective bargaining agreement, management
agreement, consulting agreement or Multiemployer Plan. Except as could not
reasonably be expected to have a Material Adverse Effect, there are no
material grievances, unfair labor practices complaints or other disputes with
any union or other organization of any Loan Party's or Restricted Subsidiary's
employees or consultants, or, to any Loan Party's knowledge, any asserted or
to the knowledge of any Loan Party, threatened strikes, walkouts or work
stoppages.
9.1.21
Payable Practices
. No Loan Party or Restricted Subsidiary has made any material change in its
historical accounts payable practices from those in effect on the First
Amendment Effective Date.
9.1.22
Not a Regulated Entity
. No Loan Party or Restricted Subsidiary is (a) an "investment company" within
the meaning of the Investment Company Act of 1940; or (b) subject to
regulation under the Federal Power Act, any public utilities code or any other
applicable Law regarding its authority to incur Indebtedness.
9.1.23
Margin Stock
. No Loan Party or Restricted Subsidiary is engaged, principally or as one of
its important activities, in the business of extending credit for the purpose
of purchasing or carrying margin stock (within the meaning of Regulation U of
the FRB). No Loan proceeds or Letters of Credit will be used to purchase or
carry, or to reduce or refinance any Indebtedness incurred to purchase or
carry, any margin stock or for any related purpose governed by Regulations T,
U or X of the FRB.
9.1.24
Perfection, Etc
.
(a) The Pledge and Security Agreement and the Canadian Security Agreements
are effective to create in favor of Agent for the benefit of the Secured
Parties, legal, valid and enforceable Liens on, and security interest in, the
Pledge and Security Agreement Collateral and Collateral, as applicable, and,
(i) when financing statements and other filings in appropriate form are filed
in the offices specified on
Schedule 9.1.24
, and (ii) upon the taking of possession or control by Agent of the Pledge and
Security Agreement Collateral and Collateral, as applicable, with respect to
which a security interest may be perfected only by possession or control
(which possession or control shall be given to Agent to the extent possession
or control by Agent is required by the Pledge and Security Agreement or the
Canadian Security Agreements), the Liens created by the Pledge and Security
Agreement and the Canadian Security Agreements shall constitute fully
perfected Liens on, and security interests in, all right, title and interest
of the grantors in the Pledge and Security Agreement Collateral and the
Collateral to the extent perfection is required in accordance with the terms
of the Pledge and Security Agreement or the Canadian Security Agreement (other
than such Pledge and Security Agreement Collateral or Collateral in which a
security interest cannot be perfected under the UCC or the PPSA as in effect
at the relevant time in the relevant jurisdiction by the filing of a financing
statement or possession or control by the secured party), in each case subject
to (i) no Liens other than Liens permitted under the Loan Documents and (ii)
the terms of the Intercreditor Agreement.
(b) The Liens created by each Intellectual Property Security Agreement
constitute fully perfected Liens on, and security interests in, all right,
title and interest of the grantors thereunder in such of the Intellectual
Property as consists of Patents and Trademarks (each as defined in the Pledge
and
-137-
AmericasActive:19663285.13
-------------------------------------------------------------------------------
Security Agreement) registered or applied for with the United States Patent
and Trademark Office or Copyrights (as defined in the Pledge and Security
Agreement) registered or applied for with the United States Copyright Office,
as the case may be, in each case to the extent perfection is required in
accordance with the terms of the Pledge and Security Agreement and in each
case subject to no Liens other than Liens permitted under the Loan Documents.
(c) [Reserved].
(d) Each Security Document delivered pursuant to S
ection 10.1.11
creates, when delivered in favor of Agent, for the benefit of the Secured
Parties, legal, valid and enforceable Liens on, and security interests in, all
of the Loan Parties' right, title and interest in and to the Collateral
described thereunder, and such Security Document constitutes fully perfected
Liens on, and security interests in, all right, title and interest of the Loan
Parties in such Collateral (to the extent intended to be created thereby and
required to be perfected under the Loan Documents), in each case subject to no
Liens other than the Liens permitted under the Loan Documents.
9.1.25
OFAC; Sanctions
. No Borrower or Subsidiary, nor to the knowledge of any Borrower or
Subsidiary, any director, officer, employee, agent, affiliate or representative
thereof, is an individual or entity currently the subject of any Sanctions. No
Borrower or Subsidiary is located, organized or resident in a Designated
Jurisdiction. No part of the proceeds of any Loan shall, nor shall any Letter
of Credit, in any case, be used directly or indirectly in violation of any
Anti-Terrorism Laws or Sanctions.
9.1.26
Affected Financial Institution
. No Loan Party is an Affected Financial Institution
or Covered Entity
.
9.1.27
Anti-Corruption Laws
. No Borrower or Subsidiary, nor to the knowledge of the Borrower or any
Subsidiary, any director, officer, employee, agent, controlled affiliate or
representative thereof has (i) used any corporate funds for any unlawful
contribution, gift, entertainment or other unlawful expense relating to
political activity; (ii) made any direct or indirect unlawful payment to any
foreign or domestic government official or employee from corporate funds;
(iii) violated or is in violation of any provision of the Foreign Corrupt
Practices Act of 1977; (iv) violated or is in violation of any provision of
the Bribery Act 2010 of the United Kingdom; or (v) made any bribe, rebate,
payoff, influence payment, kickback or other unlawful payment. Each Borrower
and its Subsidiaries have instituted, maintain and enforce, and will continue
to maintain and enforce, policies and procedures designed to promote and
ensure compliance with all applicable anti-bribery and anti-corruption laws.
9.2
Complete Disclosure
.
None of the representations or warranties made by any Loan Party in the Loan
Documents as of the date such representations and warranties are made or
deemed made, and none of the statements contained in each exhibit, report,
statement or certificate furnished by or on behalf of any Loan Party in
connection with the Loan Documents, contains any untrue statement of a
material fact or omits any material fact required to be stated therein or
necessary to make the statements made therein, in light of the circumstances
under which they are made, taken as a whole, not materially misleading in any
material respect as of the time when made or delivered. There is no fact or
circumstance that any Loan Party has failed to disclose to Agent in writing
that has resulted in or could reasonably be expected to have a Material
Adverse Effect.
-138-
AmericasActive:19663285.13
-------------------------------------------------------------------------------
SECTION 10. COVENANTS AND CONTINUING AGREEMENTS
10.1
Affirmative Covenants
.
As long as any Commitments or Obligations (other than indemnity obligations
that are not currently due and payable) are outstanding, each Loan Party,
jointly and severally with the other Loan Parties, agrees that it shall, and
shall cause each Subsidiary to:
10.1.1
Financial and Other Information
. Keep adequate records and books of account with respect to its business
activities, in which proper entries are made in accordance with GAAP
reflecting all financial transactions; and to furnish to Agent (on behalf of
the Lenders):
(a) as soon as available, but in any event within ninety (90) days after
the end of each fiscal year of Parent, a consolidated balance sheet of Parent
and its Subsidiaries as at the end of such fiscal year, and the related
consolidated statements of income or operations, shareholders' equity and cash
flows for such fiscal year, in each case with all consolidating information
regarding Parent and its Restricted Subsidiaries required to reflect the
adjustments necessary to eliminate the accounts of any Unrestricted
Subsidiaries from such consolidated financial statements
(it being understood and agreed that such requirement with respect to
Unrestricted Subsidiaries may be satisfied in the form of a reasonably
detailed presentation, either on the face of the financial statements or in
the footnotes thereto, or in "Management's Discussion and Analysis of
Financial Condition and Results of Operations," of the financial condition and
results of operations of Parent and its Restricted Subsidiaries separate from
the financial condition and results of operations of the Unrestricted
Subsidiaries of Parent)
,
setting forth in each case in comparative form the figures for the previous
fiscal year, all in reasonable detail and prepared in accordance with GAAP,
audited and accompanied by a report and opinion of Ernst & Young LLP or any
other independent certified public accountant of nationally recognized
standing, which report and opinion shall be prepared in accordance with
generally accepted auditing standards and shall not be subject to any "going
concern" or like qualification, exception or explanatory paragraph or any
qualification, exception or explanatory paragraph as to the scope of such
audit;
(b) for each month ending during any Financial Covenant Trigger Period or
on the date of occurrence of the trigger for any Financial Covenant Trigger
Period, as soon as available, and in any event within thirty (30) days after
the end of any such month and within five (5) days after the occurrence of the
trigger for any Financial Covenant Trigger Period, unaudited balance sheets as
of the end of such month and the related statements of income for such month
and for the portion of the fiscal year then elapsed, on a consolidated basis
(for Holdings and its Restricted Subsidiaries), in an internal management
reporting format, consistent with past practices, setting forth in comparative
form corresponding figures for the preceding fiscal year and certified by a
Responsible Officer of Loan Party Agent as being prepared in accordance with
GAAP and fairly presenting the financial position and results of operations
for such month and period, subject to normal year-end adjustments and the
absence of footnotes;
(c) as soon as available, but in any event within forty-five (45) days
after the end of each of the first three (3) fiscal quarters of each fiscal
year of Holdings, a consolidated balance sheet of Parent and its Subsidiaries
as at the end of such fiscal quarter, and the related consolidated statements
of income or operations and cash flows for such fiscal quarter and for the
portion of the fiscal year then ended, in each case with all consolidating
information regarding Parent and its Restricted Subsidiaries required to
reflect the adjustments necessary to eliminate the accounts of any
Unrestricted Subsidiaries from such
-139-
AmericasActive:19663285.13
-------------------------------------------------------------------------------
consolidated financial statements
(it being understood and agreed that such requirement with respect to
Unrestricted Subsidiaries may be satisfied in the form of a reasonably
detailed presentation, either on the face of the financial statements or in
the footnotes thereto, or in "Management's Discussion and Analysis of
Financial Condition and Results of Operations," of the financial condition and
results of operations of Parent and its Restricted Subsidiaries separate from
the financial condition and results of operations of the Unrestricted
Subsidiaries of Parent)
, setting forth in each case in comparative form the figures for the
corresponding fiscal quarter of the previous fiscal year and the corresponding
portion of the previous fiscal year, all in reasonable detail and certified by
a Responsible Officer of Parent as fairly presenting in all material respects
the financial condition, results of operations and cash flows of Holdings and
its Subsidiaries in accordance with GAAP, subject only to normal year-end
audit adjustments and the absence of footnotes;
(d) concurrently with delivery of financial statements under
clauses (a)
and
(c)
above (or concurrently with delivery of financial statements under
clause (b)
above during a Financial Covenant Trigger Period), and more frequently if
requested by Agent while an Event of Default has occurred and is continuing, a
Compliance Certificate executed by a Responsible Officer of Holdings
;
, which shall state whether a Pricing/Fee Reduction Period is in effect and,
if so, evidence in reasonable detail that the Consolidated Total Debt Ratio is
equal to or less than 3.50 to 1.00 for the most recently ended four fiscal
quarter period;
(e) not later than the earlier of seventy-five (75) days after the end of
each fiscal year of the Parent or thirty (30) days after the approval of the
Board of Directors thereof, concurrently with delivery of financial statements
under clause (a) above, reasonably detailed forecasts prepared by management
of Holdings (including projected consolidated balance sheets, income
statements, and EBITDA, cash flow statements and Availability of the Borrowers
and their Restricted Subsidiaries) on a quarterly basis for the fiscal year
following such fiscal year then ended;
(f) at Agent's request (but in no event more frequently than once each
calendar quarter, so long as no Default or Event of Default has occurred and
is continuing), a listing of each Loan Party's trade payables, specifying the
trade creditor and balance due, and a detailed trade payable aging, all in
form reasonably satisfactory to Agent;
(g) promptly after the sending or filing thereof, copies of any final proxy
statements, financial statements or reports that Parent has generally made
publicly available to its shareholders; copies of any regular, periodic and
special reports (including reports on Form 8-K and 10-Q) or registration
statements (other than registration statements on Form S-8) or prospectuses
that any Loan Party files with the SEC; and copies of any press releases or
other statements made available by a Loan Party to the public concerning
material changes to or developments in the business of such Loan Party;
(h) at Agent's request, after the filing thereof, copies of any annual
information report or return (including all actuarial reports and other
schedules and attachments thereto), required to be filed with a Governmental
Authority, or the filing of any request for funding relief with the
Superintendent in connection with each Pension Plan or any Canadian Pension
Plan; promptly upon receipt, copies of any notice, demand, inquiry or subpoena
received in connection with any Plan or Canadian Pension Plan from a
Governmental Authority (including FSCO and the Superintendent) (other than
routine inquiries in the course of application for a favorable IRS
determination letter); at Agent's request, copies of any
-140-
AmericasActive:19663285.13
-------------------------------------------------------------------------------
annual return required to be filed with a Governmental Authority in connection
with any other Plan or Canadian Pension Plan;
(i) promptly, after receipt thereof by any Loan Party or any Subsidiary
thereof, copies of each notice or other correspondence received from the SEC
(or comparable agency in any applicable non-U.S. jurisdiction) concerning any
material investigation or other material inquiry by such agency regarding
financial or other operational results of any Loan Party or any Subsidiary
thereof;
(j) (i) promptly upon becoming aware of the occurrence of any ERISA Event
(or Foreign Plan Event) that, alone or together with any other ERISA Events
(or Foreign Plan Events) that have occurred, could reasonably be expected to
result in liability of Holdings or its Restricted Subsidiaries in an amount
that would reasonably be expected to have a Material Adverse Effect, a written
notice specifying the nature thereof, what action Holdings or any of its
Restricted Subsidiaries has taken, are taking or propose to take with respect
thereto and, when known, any action taken or threatened by the IRS, the
Department of Labor, the PBGC or any other Governmental Authority or
Multiemployer Plan sponsor with respect thereto; and (ii) with reasonable
promptness, upon request by Agent, copies of (1) each Schedule B (Actuarial
Information) to the annual report (Form 5500 Series) filed by Borrower or any
of its Restricted Subsidiaries with the IRS with respect to each Pension Plan;
(2) the most recent actuarial valuation report for each Pension Plan that is
sponsored or contributed to by Holdings or its Restricted Subsidiaries; (3)
all notices received by Holdings or its Restricted Subsidiaries from a
Multiemployer Plan sponsor or any Governmental Authority concerning an ERISA
Event or Foreign Plan Event; and (4) such other documents or governmental
reports or filings relating to any Person Plan, Multiemployer Plan or Foreign
Plan as Agent shall reasonably request;
(k) together with the delivery of each Compliance Certificate pursuant to
Section 10.1.1(d)
, a report supplementing
Schedules
9.1.4
,
9.1.6(b)
and
9.1.11
;
(l) as soon as practicable and in any event by the last day of each fiscal
year, a report in form reasonably satisfactory to Agent outlining all material
insurance coverage maintained as of the date of such report by Holdings and
its Subsidiaries and all material insurance coverage planned to be maintained
by Holdings and its Subsidiaries in the immediately succeeding fiscal year;
(m) such other reports and information (financial or otherwise) as Agent
may reasonably request from time to time in connection with any Collateral or
any Loan Party's or Restricted Subsidiary's financial condition or business;
and
(n) upon receipt or delivery thereof by or to Holdings or any Restricted
Subsidiary, any notice of "Default" or "Event of Default" (under and as
defined in the Permitted Secured Debt Documents or the Secured Incremental
Equivalent Debt Documents) and, without duplication of any report required to
be provided hereunder, each material report required to be provided pursuant
to the Permitted Secured Debt Documents or the Secured Incremental Equivalent
Debt Documents and, upon execution thereof, any waiver, amendment or other
modification to the Permitted Secured Debt Documents or the Secured
Incremental Equivalent Debt Documents.
Notwithstanding the foregoing, (i) in the event that Holdings delivers to
Agent an Annual Report for the Parent on Form 10-K for such fiscal year, as
filed with the SEC, within 90 days after the end of such fiscal year, such
Form 10-K shall satisfy all requirements of paragraph (a) of this Section
10.1.1 to the
-141-
AmericasActive:19663285.13
-------------------------------------------------------------------------------
extent that it contains the information required by such paragraph (a) and
does not contain any "going concern" or like qualification, exception or
explanatory paragraph or qualification or any exception or explanatory
paragraph as to the scope of such audit and (ii) in the event that Holdings
delivers to Agent a Quarterly Report for the Parent on Form 10-Q for such
fiscal quarter, as filed with the SEC, within 45 days after the end of such
fiscal quarter, such Form 10-Q shall satisfy all requirements of paragraph (b)
of this Section 10.1.1 to the extent that it contains the information required
by such paragraph (b); in each case to the extent that information contained
in such 10-K or 10-Q satisfies the requirements of paragraph (a) or (b) of
this Section 10.1.1, as the case may be.
So long as (i) the Parent is a registrant for purposes of U.S. federal
securities laws or (ii) the Parent or any of its Restricted Subsidiaries has
Indebtedness outstanding (other than the Facility Commitments and the
Obligations hereunder) with respect to which it must prepare financial
statements in accordance with Regulation S-X, in each case with respect to any
fiscal period covered by or included in any financial statements delivered by
Holdings pursuant to
Section 10.1.1(a)
or
(b)
, such financial statements delivered by Holdings pursuant to
Section 10.1.1(a)
or (b) shall be in such form as shall meet the requirements of Regulation S-X,
and all other accounting rules and regulations of the SEC promulgated
thereunder, required of a registrant.
Holdings will be permitted to satisfy its obligations with respect to
financial information relating to Parent described in
clauses (a)
and
(b)
above by furnishing financial information relating to any Parent Entity;
provided
that the same is accompanied by consolidating information that explains in
reasonable detail the differences between the information relating to any
Parent Entity and any of its Subsidiaries other than Holdings and its
Subsidiaries, on the one hand, and the information relating to Holdings, the
other Loan Parties and the other Restricted Subsidiaries of Holdings on a
standalone basis, on the other hand.
Documents required to be delivered pursuant to this
Section 10.1.1
may be delivered electronically and if so delivered, shall be deemed to have
been delivered on the date (i) on which Holdings posts such documents, or
provides a link thereto to any Parent Entity's website on the internet at the
website address "cooperstandard.com"; or (ii) on which such documents are
posted on Holdings' behalf on an internet or intranet website, if any, to
which each Lender and Agent have access (whether a commercial, third-party
website or whether sponsored by Agent);
provided
that: (i) upon written request by Agent, Holdings shall deliver paper copies
of such documents to Agent for further distribution to each Lender until a
written request to cease delivering paper copies is given by Agent or such
Lender and (ii) Holdings shall notify (which may be facsimile or electronic
mail) Agent of the posting of any such documents and provide to Agent by
electronic mail electronic versions (i.e., soft copies) of such documents.
Agent shall have no obligation to request the delivery of or to maintain or
deliver to Lenders paper copies of the documents referred to above, and in any
event shall have no responsibility to monitor compliance by Holdings with any
such request for delivery, and each Lender shall be solely responsible for
timely accessing posted documents or requesting delivery and maintaining its
copies of such documents.
Holdings hereby acknowledges that (a) Agent will make available to the Lenders
materials and/or information provided by or on behalf of Holdings hereunder
(collectively, "
Borrower Materials
") by posting the Borrower Materials on IntraLinks or another similar
electronic system (the "
Platform
") and (b) certain of the Lenders (each, a "
Public Lender
") may have personnel who do not wish to receive
-142-
AmericasActive:19663285.13
-------------------------------------------------------------------------------
material non-public information with respect to the Parent or its
Subsidiaries, or the respective securities of any of the foregoing, and who
may be engaged in investment and other market-related activities with respect
to such Persons' securities. Holdings hereby agrees that it will use
commercially reasonable efforts to identify that portion of the Borrower
Materials that may be distributed to the Public Lenders and that (w) all such
Borrower Materials shall be clearly and conspicuously marked "PUBLIC" which,
at a minimum, shall mean that the word "PUBLIC" shall appear prominently on
the first page thereof; (x) by marking Borrower Materials "PUBLIC," Holdings
shall be deemed to have authorized Agent, the Lead Arrangers, and the Lenders
to treat such Borrower Materials as not containing any material non-public
information (although it may be sensitive and proprietary) with respect to
Holdings or its securities for purposes of United States federal and state
securities laws (
provided
,
however
, that to the extent such Borrower Materials constitute Information, they
shall be treated as set forth in
Section 14.12
); (y) all Borrower Materials marked "PUBLIC" are permitted to be made
available through a portion of the Platform designated "Public Side
Information;" and (z) Agent and the Lead Arrangers shall be entitled to treat
any Borrower Materials that are not marked "PUBLIC" as being suitable only for
posting on a portion of the Platform not designated "Public Side Information."
10.1.2
Notices
. Notify Agent in writing, promptly after a Responsible Officer of the Loan
Party's obtaining knowledge thereof, of any of the following that affects any
Loan Party or Restricted Subsidiary:
(a) any matter that has resulted or could reasonably be expected to result
in a Material Adverse Effect;
(b) the existence of any Default or Event of Default;
(c) the discharge of or any withdrawal or resignation by any of the Loan
Parties' independent accountants and any material change in accounting
policies or financial reporting practices;
(d) any (i) material breach by a plan sponsor of the terms of a Canadian
Pension Plan, or (ii) action or inaction of a plan sponsor or administrator,
in each case, provided that it could reasonably be expected to result in a
Termination Event.
(e) any Casualty Event that affects, in aggregate, Collateral with a book
value in excess of the Dollar Equivalent of $6,000,000;
(f) without duplication of any notice required to be provided hereunder,
each material notice required to be provided pursuant to the Permitted Secured
Debt Documents or the Secured Incremental Equivalent Debt Documents;
(g) promptly upon any Loan Party obtaining knowledge of (i) the institution
of any Adverse Proceeding not previously disclosed in writing by Holdings to
Agent, or (ii) any material development in any Adverse Proceeding that, in the
case of clause (i) could reasonably be expected to have a Material Adverse
Effect, or seeks to enjoin or otherwise prevent the consummation of the
Transactions, written notice thereof together with such other information as
may be reasonably available to Holdings to enable Agent and its counsel to
evaluate such matters;
-143-
AmericasActive:19663285.13
-------------------------------------------------------------------------------
(h) any rent disputes involving a Loan Party with respect to a location
where any material Collateral is located.
Each notice pursuant to this
Section 10.1.2
shall be accompanied by a statement of a Responsible Officer of Holdings
setting forth details of the occurrence referred to therein and stating what
action Holdings has taken and proposes to take with respect thereto. Each
notice pursuant to
Section 10.1.2(b)
shall describe with particularity any and all provisions of this Agreement and
any other Loan Document that have been breached.
10.1.3
Landlord and Storage Agreements
. Upon Agent's commercially reasonable request, provide Agent with copies of
all existing agreements, and promptly after execution thereof provide Agent
with copies of all future agreements, in each case, between a Loan Party
and/or a Restricted Subsidiary and any landlord, warehouseman, processor,
shipper, bailee or other Person that owns any premises at which any material
Collateral may be kept or that otherwise may possess or handle any material
Collateral.
10.1.4
Compliance with Laws
. Comply with all applicable Laws, including ERISA (and analogous foreign
legislation), Environmental Laws, FLSA, OSHA, Anti-Terrorism Laws and laws
regarding collection and payment of Taxes, and maintain all Governmental
Approvals necessary to the ownership of its Properties or conduct of its
business, unless such failure to so comply (other than failure to comply with
Anti-Terrorism Laws) or to so maintain would not reasonably be expected to
have a Material Adverse Effect. Without limiting the generality of the
foregoing, if any environmental Release of Hazardous Materials occurs at, on,
under or from any Real Estate of any Loan Party or Restricted Subsidiary that
could reasonably be expected to have a Material Adverse Effect, it shall, to
the extent required of it by Environmental Law, reasonably conduct
investigation and remediation of such Release.
10.1.5
Taxes
. Pay and discharge all Taxes prior to the date on which they become
delinquent or penalties attach, unless such Taxes are being Properly Contested
or where the failure to pay could not reasonably be expected to have a
Material Adverse Effect.
-144-
AmericasActive:19663285.13
-------------------------------------------------------------------------------
10.1.6
Preservation of Existence, Etc
. (a) Preserve, renew and maintain in full force and effect its legal
existence under the Laws of the jurisdiction of its organization except in a
transaction permitted by
Section 10.2.7
, (b) take all reasonable action to maintain all material rights, privileges
(including its good standing), permits, licenses and franchises necessary or
desirable in the normal conduct of its business, and (c) maintain all of its
material Intellectual Property, except, in each case (other than the Loan
Parties with respect to
clause (a)
), as would not have a Material Adverse Effect.
10.1.7
Maintenance of Properties
. Maintain, preserve and protect all of its assets or property necessary in
the operation of its business in good working order and condition, ordinary
wear and tear excepted and casualty or condemnation excepted, and make all
necessary repairs thereto and renewals and replacement thereof, in each case,
except as would not reasonably be expected to have a Material Adverse Effect.
10.1.8
Insurance
.
(a) Maintain with financially sound and reputable insurance companies,
insurance with respect to its property and business against loss or damage of
the kinds customarily insured against by Persons engaged in similar businesses
(including business interruption insurance in amount customarily maintained by
similarly situated companies engaged in the same or similar business in the
same or similar locations), in each case in such amounts (giving effect to
self-insurance), with such deductibles, covering such risks and otherwise on
such terms and conditions as shall be customary for such Persons. Each such
policy of insurance (other than worker's compensation, directors and officers
liability or other insurance where endorsements, such Insurance Assignments or
additions are not customarily available) shall (i) name Agent, on behalf of
the Secured Parties as a lender's loss payee thereunder as its interests may
appear and (ii) in the case of each casualty insurance policy, contain a loss
payable clause or endorsement, reasonably satisfactory in form and substance
to Agent, that names Agent, on behalf of the Secured Parties, as the first
loss payee/mortgagee thereunder and provides for at least thirty days' prior
written notice to Agent of any modification or cancellation of such policy, in
each case, to the extent acceptable to the insurer.
(b) [Reserved].
10.1.9
Inspections; Appraisals
.
(a) Permit Agent from time to time, subject to reasonable notice and during
normal business hours (except when an Event of Default exists), to visit and
inspect the Properties of any Loan Party or Restricted Subsidiary in the
United States and Canada, including, without limitation, inspect, audit and
make extracts from any Loan Party's or Restricted Subsidiary's books and
records, and discuss with its officers, employees, agents, advisors and
independent accountants such Loan Party's or Restricted Subsidiary's business,
financial condition, assets, prospects and results of operations. Neither
Agent nor any Lender shall have any duty to any Loan Party to make any
inspection, nor to share any results of any inspection, appraisal or report
with any Loan Party (provided that, except when an Event of Default exists, a
representative of Loan Party Agent is given the opportunity to be present
during any discussion with any such agent, adviser or independent accountant).
The Loan Parties acknowledge that all inspections, appraisals and reports are
prepared by Agent and Lenders for their purposes, and the Loan Parties shall
not be entitled to rely upon them.
-145-
AmericasActive:19663285.13
-------------------------------------------------------------------------------
(b) Reimburse Agent in accordance with
Section 3.4
for all charges, costs and expenses of Agent in connection with (i)
examinations of any Loan Party's books and records or any other financial or
Collateral matters as Agent deems appropriate, up to one (1) time (or, during
any Audit Trigger Period, two (2) times) per Loan Year; and (ii) appraisals of
Inventory up to one (1) time (or, during any Audit Trigger Period, two (2)
times) per Loan Year;
provided
,
however
, that if an examination or appraisal is initiated during an Event of Default,
all charges, costs and expenses therefor shall be reimbursed by the Loan
Parties without regard to such limits. Subject to and without limiting the
foregoing, the Loan Parties specifically agree to pay Agent's then standard
charges for each day that an employee of Agent or its Affiliates is engaged in
any examination activities, and shall pay the standard charges of Agent's
internal appraisal group. Subject to the restrictions set forth in
clause (a)
above and this
clause (b)
, Agent agrees, for the benefit of the Lenders, to commence examinations as
referenced in this
Section 10.1.9
on at least an annual basis. In addition to the foregoing, during an Event of
Default, at its discretion, Agent shall be permitted to request appraisals of
Fixed Asset Priority Collateral up to two (2) times per Loan Year.
10.1.10
Use of Proceeds
. Use the proceeds of any Loans for working capital and general corporate
purposes of Holdings and its Subsidiaries, including acquisitions and
investments and payment of fees and expenses in connection therewith.
10.1.11
Covenant to Guarantee Obligations and Give Security
.
(a) Upon the formation or acquisition of any new U.S. Subsidiary or
Canadian Subsidiary of Holdings, or any Subsidiary organized under the laws of
a Specified Jurisdiction (other than an Excluded Subsidiary) (
provided,
that each of (i) any redesignation resulting in an Unrestricted Subsidiary
becoming a Restricted Subsidiary and (ii) any Excluded Subsidiary ceasing to
be an Excluded Subsidiary but remaining a Restricted Subsidiary shall be
deemed to constitute the acquisition of a Restricted Subsidiary for all
purposes of this
Section 10.1.11
), or upon the acquisition of any personal property, including Intellectual
Property (other than "Excluded Property" as defined in the Pledge and Security
Agreement) by any U.S. Subsidiary or Canadian Subsidiary, then Holdings shall,
in each case at Holdings' expense:
(i) in connection with (x) the formation or acquisition of a U.S.
Subsidiary, within ninety (90) days after such formation or acquisition or
such longer period as Agent may agree, (A) cause each such Subsidiary that is
not an Excluded Subsidiary to duly execute and deliver to Agent a guaranty or
guaranty supplement, in form and substance reasonably satisfactory to Agent,
guaranteeing U.S. Facility Obligations, and (B) (if not already so delivered)
deliver certificates representing the Pledged Equity Interests of each such
Subsidiary (other than any Unrestricted Subsidiary) accompanied by undated
stock powers or other appropriate instruments of transfer executed in blank
and instruments evidencing the Pledged Debt of such Subsidiary indorsed in
blank to Agent, together with, if requested by Agent, Pledge Supplements or
other pledge or security agreements with respect to the pledge of any Equity
Interests or Indebtedness;
provided
, that only 65% of voting Equity Interests of any Foreign Subsidiary that is a
CFC (or any U.S. Subsidiary described in clause (i) of the definition of
Excluded Subsidiary) held by a Loan Party shall be required to be pledged as
Collateral for the U.S. Facility Obligations and no such restriction shall
apply to non-voting Equity Interests of such Subsidiaries;
provided
,
further
, that notwithstanding anything to the contrary in this Agreement, no assets
owned by any Foreign
-146-
AmericasActive:19663285.13
-------------------------------------------------------------------------------
Subsidiary that is a CFC (including stock owned by such Foreign Subsidiary in
a U.S. Subsidiary) or any Subsidiary described in clause (i) of the definition
of Excluded Subsidiary shall be required to be pledged as Collateral for the
U.S. Facility Obligations, (y) the formation or acquisition of a Canadian
Subsidiary, within ninety (90) days after such formation or acquisition or
such longer period as Agent may agree, cause such Subsidiary that is not an
Excluded Subsidiary to duly execute and deliver to Agent a guaranty
supplement, in form and substance reasonably satisfactory to Agent,
guaranteeing the Canadian Facility Obligations, and (z) the formation or
acquisition of a Subsidiary organized under the laws of a Specified
Jurisdiction, within ninety (90) days after such formation or acquisition or
such longer period as Agent may agree, cause each such Subsidiary that is not
an Excluded Subsidiary to become a Specified Jurisdiction Guarantor by duly
executing and delivering to Agent a guaranty or guaranty supplement, in form
and substance reasonably satisfactory to Agent, guaranteeing the Obligations;
provided
, that notwithstanding anything to the contrary in this Agreement or any other
Loan Document, no assets owned by any Subsidiary organized under the laws of a
Specified Jurisdiction shall be required to be pledged as Collateral. For the
avoidance of doubt, and notwithstanding anything to the contrary in any other
Loan Document, no entity shall have any obligation to become a Specified
Jurisdiction Guarantor prior to the date that is ninety (90) days after the
Third Amendment Effective Date or such longer period as Agent may agree.
(ii) (x) within ninety (90) days after such formation or acquisition of a
U.S. Subsidiary (or such longer period, as Agent may agree), furnish to Agent
a description of the real and personal properties of the U.S. Subsidiaries
(other than Excluded Subsidiaries) in detail reasonably satisfactory to Agent;
provided
that any such information provided pursuant to this clause (ii)(x) shall
consist solely of information of the type that would be set forth on
Schedules
8.6.1
,
9.1.4
,
9.1.6(b)
and
9.1.11
, and (y) within ninety (90) days after such formation or acquisition of a
Canadian Subsidiary (or such longer period, as Agent may agree), furnish to
Agent a description of the personal properties of the Canadian Subsidiaries
(other than Excluded Subsidiaries) in detail reasonably satisfactory to Agent;
(iii) (x) within ninety (90) days after such formation or acquisition of a
U.S. Subsidiary, or such longer period, as Agent may agree, duly execute and
deliver, and cause each such U.S. Subsidiary that is not an Excluded
Subsidiary to duly execute and deliver, to Agent Pledge Supplements, security
agreement supplements and other security agreements, as specified by and in
form and substance reasonably satisfactory to Agent (consistent with the
Pledge and Security Agreement and Intellectual Property Security Agreement (and
Section 10.1.11
)), securing payment of all the U.S. Facility Obligations and constituting
Liens on all such properties, and (y) within ninety (90) days after such
formation or acquisition of a Canadian Subsidiary, or such longer period, as
Agent may agree in its sole discretion, duly execute and deliver, and cause
each such Canadian Subsidiary that is not an Excluded Subsidiary to (aa) duly
execute and deliver, to Agent security agreements (including Canadian Security
Agreements), as specified by and in form and substance reasonably satisfactory
to Agent, securing payment of all the Canadian Facility Obligations, (bb) take
whatever action may be necessary or advisable (including the filing of PPSA
financing statements) in the reasonable opinion of the Agent to vest in Agent
(or in any representative of Agent designated by it) valid, subsisting and
perfected Liens on the properties purported to be subject to the Canadian
Security Agreements and other security
-147-
AmericasActive:19663285.13
-------------------------------------------------------------------------------
agreements delivered pursuant to this
Section 10.1.11
, in each case, to the extent required under the Loan Documents and
enforceable against all third parties in accordance with their terms;
(iv) within ninety (90) days after such formation or acquisition of a U.S.
Subsidiary, or such longer period, as Agent may agree in its sole discretion,
take, and cause such Subsidiary that is not an Excluded Subsidiary to take,
whatever action (including, without limitation, the filing of UCC financing
statements, the giving of notices and delivery of stock and membership
interest certificates) may be necessary or advisable in the reasonable opinion
of Agent to vest in Agent (or in any representative of Agent designated by it)
valid and subsisting Liens on the properties purported to be subject to the
Pledge Supplements and security agreements delivered pursuant to this
Section 10.1.11
, in each case, to the extent required under the Loan Documents and subject to
the perfection exceptions (as provided in the Pledge and Security Agreement),
enforceable against all third parties in accordance with their terms;
(v) within thirty (30) days after the request of Agent, or such longer
period as such Agent may agree, deliver to such Agent, a signed copy of one or
more opinions, addressed to such Agent and the other Secured Parties, of
counsel for the Loan Parties reasonably acceptable to such Agent as to such
matters as Agent may reasonably request;
(vi) notwithstanding anything to the contrary herein, if any Subsidiary
shall provide a guaranty or security interest as credit support for the First
Lien Notes, Senior Secured Notes or any other Fixed Asset Facility, such
Subsidiary shall become a Guarantor pursuant to this
Section 10.1.11
; and
(vii) at any time and from time to time, promptly execute and deliver any
and all further instruments and documents and take all such other action as
Agent in its reasonable judgment may deem necessary in obtaining the full
benefits of, or in perfecting and preserving the Liens of, such guaranties,
Pledge Supplements and security agreements.
(b) Notwithstanding the foregoing, (i) Agent shall not take a security
interest in assets of any Specified Jurisdiction Guarantor or those assets as
to which Agent shall determine, in its reasonable discretion, that the cost of
obtaining such Lien (including any mortgage, stamp, intangibles or other tax)
are excessive in relation to the benefit to the applicable Lenders of the
security afforded thereby, (ii) neither Holdings nor any of its Subsidiaries
shall be required to take any actions in order to perfect the security
interests granted to Agent for the ratable benefit of the Secured Parties
under the law of any jurisdiction outside the United States or Canada or with
respect to any real property, and (iii) any security interest or Lien on the
assets of any U.S. Domiciled Loan Party, and any obligation of any U.S.
Domiciled Loan Party, shall be subject to the relevant requirements of the
Intercreditor Agreement.
(c) Notwithstanding the joint and several liability envisaged in
Section 5.10.1
above, subject to the provisions of
Section 5.10.2
above and notwithstanding the provisions on governing law contained in
Section 14.14
, each Specified Jurisdiction Guarantor that is incorporated under the laws of
Romania (each a
"Romanian Guarantor"
), hereby irrevocably and unconditionally guarantees to Agent and the Lenders
the prompt payment and performance of all Obligations and agreements of each
other Loan Party under the Loan Documents, with this guarantee having the
legal nature of a
fideiusiune
-148-
AmericasActive:19663285.13
-------------------------------------------------------------------------------
within the meaning of the Article 2280 and the following of the Romanian Civil
Code (the
"Romanian Suretyship"
).
(d) Notwithstanding the foregoing, in respect any Romanian Guarantor, any
guarantee constituted or purportedly constituted by a Romanian Guarantor
through the present Agreement and/or other Loan Documents in relation to the
Third Amendment Transactions (as defined in the Third Amendment) and any
related Refinancing, including the Romanian Suretyship constituted as per
Section 10.1.11(c)
above (collectively, the
"Romanian Guarantee"
), shall be subject to the following:
(i) It is expressly accepted that the Romanian Guarantee is to be
constituted through the present Agreement and/or other Loan Documents;
(ii) Each Romanian Guarantor's cumulative liability under the Romanian
Guarantee is limited to any amount that would not cause the Romanian Guarantor
to breach any of its legal or statutory obligations, including the breach of
the covenants undertaken under this
Section 10.1.11(d)
;
(iii) The Romanian Guarantee shall not be binding on any Romanian Guarantor
to the extent to which the constituting of the Romanian Guarantee would result
in a breach of the provisions of art. 272 para (1) let. (b) of the Romanian
Companies Law no. 31/1990, subject to the provisions of para (2) of the same
article;
(iv) The Romanian Guarantee shall not be binding on a Romanian Guarantor to
the extent to which the constituting of the Romanian Guarantee would result in
a breach of the provisions of art. 272 para (1) let. (c) of the Romanian
Companies Law no. 31/1990, as corroborated by the provisions of art. 144
4
of the same law;
(v) The Romanian Guarantee shall not include the assumption by any Romanian
Guarantor of any liability which would result in a misuse of such Romanian
Guarantor's assets or credit and that would accordingly trigger the liability
of any of a Romanian Guarantor's management, shareholders or any other person
that contributed to the situation of insolvency, in terms of art. 169 of the
Romanian Insolvency Law no. 85/2014, as corroborated by art. 117 of the same
law; and
(vi) The Romanian Guarantee shall be limited in such an amount as is
necessary to ensure the compliance of each Romanian Guarantor with the
Romanian legal requirements relating to the legal concept of "corporate
benefit", as understood by the relevant Romanian legislation, case law and
doctrine. In this regard, each Romanian Guarantor will only constitute the
Romanian Guarantee in the event that such Romanian Guarantor will derive
substantial direct and indirect corporate benefit from the credit commitments
issued under this Agreement, which corporate benefit must have been expressly
acknowledged by the competent corporate body or bodies of such Romanian
Guarantor, as applicable, prior to the entry of such Romanian Guarantor into
this Agreement.
-149-
AmericasActive:19663285.13
-------------------------------------------------------------------------------
10.1.12
Licenses
. Keep each material License necessary to make, use or sell any Collateral
(including the manufacture, distribution or disposition of Inventory) in full
force and effect (other than any forfeiture, abandonment or dedication to the
public taken in the ordinary course of business).
10.1.13
Post-Closing Matters
. Holdings shall, and shall cause each of its Restricted Subsidiaries to,
satisfy the requirements set forth on
Schedule 10.1.13
on or before the date thereon specified for such requirement, in each case as
such date may be extended by Agent in its sole discretion, so long as Holdings
is working diligently in good faith to complete, or cause its Restricted
Subsidiaries to complete, the applicable requirement as determined by Agent in
its sole discretion.
10.2
Negative Covenants
. As long as any Commitments or Obligations (other than indemnity obligations
that are not currently due and payable) are outstanding, each Covenant Party
jointly and severally with the other Covenant Parties hereby agrees not to, or
to permit any Restricted Subsidiary to, and solely with respect to
Sections 10.2.1
and
10.2.4
, Holdings agrees not to:
10.2.1
Permitted Liens
. (a) Create, incur, assume or suffer to exist any Lien upon any of its
property, assets or revenues, whether owned on the Third Restatement Date or
thereafter acquired (except Permitted Liens) (each, a "
Subject Lien
") that secures obligations under any Indebtedness on any asset or property of
Holdings or any Loan Party, unless:
(i) in the case of Subject Liens on any Collateral, any Subject Lien if
such Subject Lien is a Permitted Lien; and
(ii) in the case of any other asset or property any Subject Lien if (i) the
applicable Obligations are equally and ratably secured with (or on a senior
basis to, in the case such Subject Lien secures any Junior Indebtedness) the
obligations secured by such Subject Lien or (ii) such Subject Lien is a
Permitted Lien.
(b) Any Lien created for the benefit of the Secured Parties pursuant to the
preceding
clause (ii)
shall provide by its terms that such Lien shall be automatically and
unconditionally be released and discharged upon the release and discharge of
the Subject Lien that gave rise to the obligation to so secure the applicable
Obligations.
10.2.2
Permitted Indebtedness
. (a) Directly or indirectly, Incur any Indebtedness (including Acquired
Indebtedness) or issue any shares of Disqualified Stock and Holdings will not
permit any of its Restricted Subsidiaries to issue any shares of Preferred
Stock; provided, however, that Holdings and any Restricted Subsidiary may
Incur Indebtedness (including Acquired Indebtedness) or issue shares of
Disqualified Stock and any Restricted Subsidiary may issue shares of Preferred
Stock, in each case if the Fixed Asset Fixed Charge Coverage Ratio of Parent
and its Restricted Subsidiaries on a consolidated basis for the most recently
ended four full fiscal quarters for which internal financial statements are
available immediately preceding the date on which such additional Indebtedness
is Incurred or such Disqualified Stock or Preferred Stock is issued would have
at least 2.00 to 1.00 determined on a pro forma basis (including a pro forma
application of the net proceeds therefrom), as if the additional Indebtedness
had been Incurred, or the Disqualified Stock or Preferred Stock had been
issued, as the case may be, and the application of proceeds therefrom had
occurred at the beginning of such four-quarter period;
provided
,
further
, that the aggregate amount of Indebtedness (including
-150-
AmericasActive:19663285.13
-------------------------------------------------------------------------------
Acquired Indebtedness) that may be Incurred and Disqualified Stock or
Preferred Stock that may be issued pursuant to the foregoing by Restricted
Subsidiaries that are U.S. Domiciled Loan Parties shall not exceed the greater
of (x) $130,000,000 and (y) 5.0% of Consolidated Total Assets at the time of
Incurrence, at any one time outstanding.
(b) In addition, the following shall be permitted:
(i) the Incurrence by Holdings or its Restricted Subsidiaries (including
for the avoidance of doubt, any Wholly-Owned Restricted Subsidiary that is a
Foreign Subsidiary designated under
Section 2.18
of the term loan credit agreement governing the Fixed Asset Facility as such
agreement is in effect on the First Amendment Effective Date (or any
comparable section of any other Fixed Asset Facility)) of
(1) the Obligations under this Agreement and the other Loan Documents, (2)
Indebtedness in respect of the Fixed Asset Facility described in the
definition thereof in an aggregate principal amount not to exceed at any one
time outstanding $580,000,000 plus the amount of any payment-in-kind (PIK)
interest payments with respect to the First Lien Notes and (3) additional
Indebtedness under the Fixed Asset Facility up to an aggregate principal
amount of Indebtedness outstanding in reliance of this subclause (3) not to
exceed the sum of (i) the maximum positive amount of Indebtedness at such time
that could be Incurred without causing the Consolidated Senior Secured Net
Debt Ratio to exceed 2.25 to 1.00 (in each case, on a pro forma basis, after
giving effect to (x) any New Term Loans or New Revolving Facility issued
pursuant to
Section 2.17
of the term loan credit agreement governing the Fixed Asset Facility Incurred
on or prior to the date of determination as such agreement is in effect on the
First Amendment Effective Date (or any comparable section of any other Fixed
Asset Facility), (y) any increased Loans (as defined in the term loan credit
agreement governing the Fixed Asset Facility as such agreement is in effect on
the First Amendment Effective Date (or any comparable section of any other
Fixed Asset Facility)) Incurred on or prior to the date of determination, or
(z) any Incremental Equivalent Debt Incurred on or prior to the date of
determination, and, in each case, the use of the proceeds therefrom, but
excluding any amounts Incurred simultaneously pursuant to the immediately
following
clause (ii)
and, in the case of an increase to a New Revolving Facility, assuming that the
amount of such increase is fully drawn), (ii) $400,000,000 and (iii) the
aggregate principal amount of all voluntary prepayments (or voluntary
redemptions) after the Third Restatement Date of (a) Term Loans (or notes
issued under an indenture for the Fixed Asset Facility) and New Term Loans
prior to such date and (including pursuant to a Dutch Auction pursuant to
Section 2.05(c)
of the term loan credit agreement governing the Fixed Asset Facility as such
agreement is in effect on the First Amendment Effective Date (or any
comparable section of any other Fixed Asset Facility)) and (b) loans under any
New Revolving Facility and loans under this Agreement in each case solely to
the extent accompanied by a dollar-for-dollar permanent reduction of New
Revolving Commitments or commitments under this Agreement, as applicable,
prior to such date, in each case for this clause (iii) other than to the
extent any such prepayment is funded from the proceeds of long-term
Indebtedness (the sum of clause (b)(i)(3), the "
Maximum Incremental Amount
");
(ii) Contingent Obligations existing on the First Amendment Effective Date
and listed on
Schedule 1.1(b)
;
-151-
AmericasActive:19663285.13
-------------------------------------------------------------------------------
(iii) Indebtedness existing on the First Amendment Effective Date and
listed on
Schedule 10.2.2
;
(iv) Indebtedness (including, without limitation, Capitalized Lease
Obligations and mortgage financings as purchase money obligations) Incurred by
Holdings or any of its Restricted Subsidiaries, Disqualified Stock issued by
Holdings or any of its Restricted Subsidiaries and Preferred Stock issued by
any Restricted Subsidiaries of Holdings to finance all or any part of the
purchase, lease, construction, installation, replacement, repair or
improvement of property (real or personal), plant or equipment or other fixed
or capital assets used or useful in the business of Holdings or its Restricted
Subsidiaries or in a Similar Business (whether through the direct purchase of
assets or the Capital Stock of any Person owning such assets) in an aggregate
principal amount or liquidation preference, including all Indebtedness
Incurred and Disqualified Stock or Preferred Stock issued to renew, refund,
refinance, replace, defease or discharge any Indebtedness Incurred and
Disqualified Stock or Preferred Stock issued pursuant to this
clause (iv)
, not to exceed at any one time outstanding the greater of (x) $100,000,000
and (y) 3.75% of Consolidated Total Assets at the time of Incurrence;
(v) Indebtedness Incurred by Holdings or any of its Restricted Subsidiaries
constituting reimbursement obligations with respect to letters of credit,
bankers' acceptances, bank guarantees, warehouse receipts or similar
facilities entered into, or relating to obligations or liabilities incurred,
in the ordinary course of business, including without limitation letters of
credit in respect of workers' compensation claims, performance, completion or
surety bonds, health, disability or other employee benefits (whether current
or former) or property, casualty or liability insurance or self-insurance, or
other Indebtedness with respect to reimbursement-type obligations regarding
workers' compensation claims, performance, completion or surety bonds, health,
disability or other employee benefits or property, casualty or liability
insurance or self-insurance;
provided
,
however
, that upon the drawing of such letters of credit or the incurrence of such
Indebtedness, such obligations are reimbursed within 30 days following such
drawing or incurrence;
(vi) Indebtedness arising from agreements of Holdings or any of its
Restricted Subsidiaries related to indemnification, adjustment of purchase
price, earn out or similar obligations, in each case, Incurred or assumed in
connection with the acquisition or disposition of any business, assets or a
Subsidiary of Holdings not exceeding the proceeds of such disposition, other
than Guarantees of Indebtedness Incurred by any Person acquiring all or any
portion of such business, assets or a Subsidiary for the purpose of financing
such acquisition;
(vii) Indebtedness of Holdings to a Restricted Subsidiary;
provided
that (x) such Indebtedness owing to a Restricted Subsidiary that is not a U.S.
Domiciled Loan Party, excluding any Indebtedness in respect of accounts
payable incurred in connection with goods and services rendered in the
ordinary course of business (and not in connection with the borrowing of
money), is expressly subordinated in right of payment to the Obligations and
(y) any subsequent issuance or transfer of any Capital Stock or any other
event that results in any such Restricted Subsidiary ceasing to be a
Restricted Subsidiary or any other subsequent transfer of any such
Indebtedness (except to Holdings or another Restricted Subsidiary or any
pledge of such Indebtedness
-152-
AmericasActive:19663285.13
-------------------------------------------------------------------------------
constituting a Permitted Lien (but not foreclosure thereon)) shall be deemed,
in each case, to be an Incurrence of such Indebtedness not permitted by this
clause (vii)
;
(viii) shares of Preferred Stock or Disqualified Stock of a Restricted
Subsidiary issued to Holdings or another Restricted Subsidiary;
provided
that any subsequent issuance or transfer of any Capital Stock or any other
event that results in any Restricted Subsidiary that holds such shares of
Preferred Stock or Disqualified Stock of another Restricted Subsidiary ceasing
to be a Restricted Subsidiary or any other subsequent transfer of any such
shares of Preferred Stock (except to Holdings or another Restricted
Subsidiary) shall be deemed, in each case, to be an issuance of shares of
Preferred Stock not permitted by this
clause (viii)
;
(ix) Indebtedness of a Restricted Subsidiary to Holdings or another
Restricted Subsidiary;
provided
that (x) if a Guarantor Incurs such Indebtedness to a Restricted Subsidiary
that is not a Guarantor, excluding any Indebtedness in respect of accounts
payable incurred in connection with goods and services rendered in the
ordinary course of business (and not in connection with the borrowing of
money), such Indebtedness is unsecured and subordinated in right of payment to
the Guarantee of such Guarantor and (y) any subsequent issuance or transfer of
any Capital Stock or any other event that results in any Restricted Subsidiary
lending such Indebtedness ceasing to be a Restricted Subsidiary or any other
subsequent transfer of any such Indebtedness (except to Holdings or another
Restricted Subsidiary or any pledge of such Indebtedness constituting a
Permitted Lien (but not foreclosure thereon)) shall be deemed, in each case,
to be an Incurrence of such Indebtedness not permitted by this
clause (ix)
;
(x) Hedging Obligations that are Incurred in the ordinary course of
business (and not for speculative purposes);
(xi) obligations (including reimbursement obligations with respect to
letters of credit and bank guarantees) in respect of performance, bid, appeal
and surety bonds, bankers' acceptance facilities and completion guarantees,
customs, VAT or other tax guarantees and similar obligations provided by
Holdings or any Restricted Subsidiary or obligations in respect of letters of
credit, bank guarantees or similar instruments related thereto, in each case
in the ordinary course of business;
(xii) (a) Indebtedness or Disqualified Stock of Holdings or any Restricted
Subsidiary of Holdings and Preferred Stock of any Restricted Subsidiary of
Holdings in an aggregate principal amount or liquidation preference up to
100.0% of the net cash proceeds received by Holdings since immediately after
April 4, 2014 from the issue or sale of Equity Interests of Holdings or cash
contributed to the capital of Holdings or any Parent Entity (to the extent the
net cash proceeds are contributed to Holdings) (in each case, other than
Excluded Contributions or proceeds of Disqualified Stock or proceeds of
Designated Preferred Stock or sales of Equity Interests to Holdings or any of
its Subsidiaries) as determined in accordance with
Section 10.2.3(a)(3)(B)
and
(C)
to the extent such net cash proceeds or cash have not been applied pursuant to
such clauses to make Restricted Payments or to make Investments, payments or
exchanges pursuant to
Section 10.2.3(b)
or to make Permitted Investments (other than Permitted Investments specified in
clauses (1)
,
(2)
and
(3)
of the definition thereof) and (b) Indebtedness or Disqualified Stock of
Holdings or any Restricted Subsidiary of Holdings and Preferred Stock of
-153-
AmericasActive:19663285.13
-------------------------------------------------------------------------------
any Restricted Subsidiary of Holdings in an aggregate principal amount or
liquidation preference that, when aggregated with the principal amount or
liquidation preference of all other Indebtedness, Disqualified Stock and
Preferred Stock then outstanding and Incurred pursuant to this
clause (xii)(b)
, does not exceed at any one time outstanding the greater of (x) $155,000,000
and (y) 6.0% of Consolidated Total Assets at the time of any incurrence
pursuant to this
clause (xii)(b)
(it being understood that any Indebtedness, Disqualified Stock or Preferred
Stock incurred pursuant to this
clause (xii)(b)
shall cease to be deemed incurred or outstanding for purposes of this
clause (xii)(b)
but shall be deemed incurred pursuant to the first paragraph of this covenant
from and after the first date on which Holdings or such Restricted Subsidiary
could have incurred such Indebtedness, Disqualified Stock or Preferred Stock
under
Section 10.2.2(a)
);
(xiii) any Guarantee by Holdings or a Restricted Subsidiary of Indebtedness
or other obligations of Holdings or any of its Restricted Subsidiaries so long
as the Incurrence of such Indebtedness or other obligations by Holdings or
such Restricted Subsidiary is permitted hereunder;
provided
that if such Indebtedness is by its express terms subordinated in right of
payment to the Obligations, any such Guarantee of any of the Guarantor with
respect to such Indebtedness shall be subordinated in right of payment to such
Guarantor's Guarantee of any of the Obligations hereunder substantially to the
same extent as such Indebtedness is subordinated to such Obligations;
(xiv) the Incurrence or issuance by Holdings or any of its Restricted
Subsidiaries of Indebtedness or Disqualified Stock or Preferred Stock of a
Restricted Subsidiary of Holdings that serves to Refinance any Indebtedness,
Disqualified Stock or Preferred Stock Incurred as permitted under
Section 10.2.2(a)
and
10.2.2(b)(iii)
,
(xii)(a)
,
this clause (xiv)
,
(xv)
,
(xviii)
,
(xx)
, and
(xxx)
or any Indebtedness, Disqualified Stock or Preferred Stock Incurred to so
Refinance such Indebtedness, Disqualified Stock or Preferred Stock, including
any additional Indebtedness, Disqualified Stock or Preferred Stock Incurred to
pay accrued and unpaid interest and dividends and premiums (including
reasonable tender premiums), defeasance costs and fees and expenses in
connection with such Refinancing (subject to the following proviso, "
Refinancing Indebtedness
") on or prior to its respective maturity;
provided
,
however
, that such Refinancing Indebtedness:
(A) has a Weighted Average Life to Maturity at the time such Refinancing
Indebtedness is Incurred that is not less than the remaining Weighted Average
Life to Maturity of the Indebtedness, Disqualified Stock or Preferred Stock
being Refinanced;
(B) has a Stated Maturity which is no earlier than the Stated Maturity of
the Indebtedness being Refinanced;
(C) to the extent such Refinancing Indebtedness Refinances Junior
Indebtedness, such Refinancing Indebtedness is Junior Indebtedness and to the
extent such Refinancing Indebtedness Refinances unsecured Indebtedness, such
Refinancing Indebtedness is unsecured Indebtedness; and
(D) shall not include (x) Indebtedness, Disqualified Stock or Preferred
Stock of Holdings or a Guarantor that Refinances Indebtedness of a Restricted
Subsidiary of
-154-
AmericasActive:19663285.13
-------------------------------------------------------------------------------
Holdings that is not a Guarantor or (y) Indebtedness of Holdings or a
Restricted Subsidiary that refinances Indebtedness of an Unrestricted
Subsidiary;
(xv) Indebtedness, Disqualified Stock or Preferred Stock of (i) Holdings
or any of its Restricted Subsidiaries Incurred or issued to finance an
acquisition or (ii) Persons that are acquired by Holdings or any of its
Restricted Subsidiaries or merged into, amalgamated with or consolidated with
Holdings or a Restricted Subsidiary in accordance with the terms hereof
(including designating an Unrestricted Subsidiary as a Restricted Subsidiary);
provided
,
however
, that after giving effect to such acquisition, merger, amalgamation or
consolidation and the Incurrence of such Indebtedness, Disqualified Stock or
Preferred Stock, either:
(A) Holdings would be permitted to Incur at least $1.00 of additional
Indebtedness pursuant to the Fixed Asset Fixed Charge Coverage Ratio test set
forth in
Section 10.2.2(a)
; or
(B) the Fixed Asset Fixed Charge Coverage Ratio of the Parent and its
Restricted Subsidiaries on a consolidated basis is equal to or greater than
immediately prior to such acquisition, merger, amalgamation or consolidation;
(xvi) Indebtedness arising from the honoring by a bank or other financial
institution of a check, draft or similar instrument drawn against insufficient
funds in the ordinary course of business;
(xvii) Indebtedness of Holdings or any Restricted Subsidiary supported by a
letter of credit or bank guarantee issued pursuant to this Agreement, in a
principal amount not in excess of the stated amount of such letter of credit
or bank guarantee;
(xviii) [Intentionally Omitted];
(xix) Indebtedness of Holdings or any Restricted Subsidiary consisting of
(x) the financing of insurance premiums or (y) take-or-pay obligations
contained in supply arrangements, in each case, in the ordinary course of
business, not to exceed $5,000,000 at any one time outstanding;
(xx) Indebtedness of Foreign Subsidiaries of Holdings in an amount not to
exceed at any one time outstanding the greater of (x) $100,000,000 and (y)
3.75% of Consolidated Total Assets at the time of such incurrence;
(xxi) Indebtedness of a Joint Venture to Holdings or any Guarantor and to
the other holders of Equity Interests of such Joint Venture, so long as the
percentage of the aggregate amount of such Indebtedness of such Joint Venture
owed to such other holders of its Equity Interests does not exceed the
percentage of the aggregate outstanding amount of the Equity Interests of such
joint venture held by such other holders;
(xxii) Indebtedness Incurred in a Permitted Receivables Financing;
-155-
AmericasActive:19663285.13
-------------------------------------------------------------------------------
(xxiii) Indebtedness owed on a short-term basis to banks and other
financial institutions Incurred in the ordinary course of business of Holdings
and the Restricted Subsidiaries with such banks or financial institutions that
arises in connection with ordinary banking arrangements to manage cash
balances of Holdings and the Restricted Subsidiaries;
(xxiv) Indebtedness consisting of Indebtedness issued by Holdings or any
Restricted Subsidiary to future, current or former officers, directors,
employees, managers, service providers or consultants thereof or any direct or
indirect parent thereof, their respective estates, spouses or former spouses,
in each case to finance the purchase or redemption of Equity Interests of
Holdings or any Parent Entity to the extent permitted under
Section 10.2.3(b)(iv)
;
(xxv) customer deposits and advance payments received in the ordinary
course of business from customers for goods purchased in the ordinary course
of business;
(xxvi) Indebtedness incurred by a Restricted Subsidiary in connection with
bankers' acceptances, discounted bills of exchange or the discounting or
factoring of receivables for credit management purposes, in each case incurred
or undertaken in the ordinary course of business on arm's-length commercial
terms;
(xxvii) Indebtedness incurred by Holdings or any Restricted Subsidiary to
the extent that the net proceeds thereof are promptly deposited with a trustee
to satisfy and discharge Indebtedness in connection with the indenture
therefor;
(xxviii) (i) Guarantees incurred in the ordinary course of business in
respect of obligations to suppliers, customers, franchisees, lessors and
licensees that, in each case, are non-Affiliates and (ii) any Designated
Foreign Guaranty;
(xxix) the incurrence by Holdings or any Restricted Subsidiary of
Indebtedness consisting of Guarantees of Indebtedness incurred by Permitted
Joint Ventures;
provided
that the aggregate principal amount of Indebtedness Guaranteed pursuant to this
clause (xxix)
does not at any one time outstanding exceed the greater of (x) $120,000,000
and (y) 5.0% of Consolidated Total Assets at the time of incurrence;
(xxx) Indebtedness evidenced by the Senior Unsecured Notes and the Senior
Secured Notes, and in each case the guarantees with respect thereto, in an
aggregate principal amount not to exceed at any one time outstanding
$400,000,000 plus the amount of any payment-in-kind (PIK) interest payments
with respect to the Senior Secured Notes; and
(xxxi) Indebtedness of any U.S. Domiciled Loan Party or any Wholly-Owned
Restricted Subsidiary that is a Foreign Subsidiary designated under
Section 2.18
of the term loan credit agreement governing the Fixed Asset Facility as such
agreement is in effect on the First Amendment Effective Date (or any
comparable section of any other Fixed Asset Facility) in respect of one or
more series of senior unsecured notes, senior secured first lien or junior
lien notes, junior lien or unsecured loans that, in each case, if secured,
will be secured by the U.S. Facility Collateral on a pari passu or junior
basis with the U.S. Facility Obligations, that are issued or made in lieu of
(A) increases in the Fixed Asset Facility pursuant to
Section 2.16
of the term loan credit agreement governing the Fixed Asset Facility as such
agreement is in effect on
-156-
AmericasActive:19663285.13
-------------------------------------------------------------------------------
the First Amendment Effective Date (or any comparable section of any other
Fixed Asset Facility) or (B) a New Term Facility, pursuant to an indenture,
note purchase agreement, loan or credit agreement or otherwise (the "
Incremental Equivalent Debt
");
provided
that (i) Incremental Equivalent Debt that is secured on a pari passu basis
with the U.S. Facility Obligations may not be in the form of term or revolving
loans (but may be in the form of notes), (ii) for the purposes of calculating
the Consolidated Senior Secured Net Debt Ratio, any Incremental Equivalent
Debt that is unsecured shall be deemed to be Indebtedness secured by a Lien on
Collateral on a pari passu basis with the U.S. Facility Obligations, and (iii)
the aggregate principal amount of all Incremental Equivalent Debt issued or
incurred pursuant to this
Section 10.2.2(b)(xxxi)
shall not, (together with all requests for (A) increases to a Term Loan
Facility (as defined in the term loan credit agreement governing the Fixed
Asset Facility as such agreement is in effect immediately prior to the Third
Amendment Effective Date (or any comparable section of any other Fixed Asset
Facility)), a New Term Facility and New Revolving Facility pursuant to
Section 2.16
of the term loan credit agreement governing the Fixed Asset Facility as such
agreement is in effect on the First Amendment Effective Date (or any
comparable section of any other Fixed Asset Facility) and (B) New Term
Facilities or New Revolving Facilities pursuant to
Section 2.17
of the term loan credit agreement governing the Fixed Asset Facility as such
agreement is in effect immediately prior to the Third Amendment Effective Date
(or any comparable section of any other Fixed Asset Facility)), exceed the
Maximum Incremental Amount;
provided
,
further
, (i) subject to
Section 2.18
of the term loan credit agreement governing the Fixed Asset Facility as such
agreement is in effect on the First Amendment Effective Date (or any
comparable section of any other Fixed Asset Facility) such Incremental
Equivalent Debt shall not be subject to any guarantee by any person other than
a U.S. Domiciled Loan Party, (ii) subject to
Section 2.18
of the term loan credit agreement governing the Fixed Asset Facility as such
agreement is in effect on the First Amendment Effective Date (or any
comparable section of any other Fixed Asset Facility), in the case of
Incremental Equivalent Debt that is secured, the obligations in respect
thereof shall not be secured by any Lien on any asset of Holdings or any
Restricted Subsidiary other than any asset constituting U.S. Facility
Collateral, (iii) no Default shall have occurred and be continuing or would
exist immediately after giving effect to such incurrence, (iv) if such
Incremental Equivalent Debt is secured, the security agreements relating to
such Incremental Equivalent Debt shall be substantially the same as the
Security Documents (with such differences as are reasonably satisfactory to
Agent), (v) if such Incremental Equivalent Debt is secured, such Incremental
Equivalent Debt shall be subject to a customary intercreditor agreement
reasonably acceptable to Agent, and (vi) the documentation with respect to any
Incremental Equivalent Debt shall contain no mandatory prepayment, repurchase
or redemption provisions prior to the Facility Termination Date at the time of
incurrence, issuance or obtainment of such Incremental Equivalent Debt, other
than customary prepayments, repurchases or redemptions of or offers to prepay,
redeem or repurchase upon a change of control, asset sale event or casualty or
condemnation event, customary prepayments, redemptions or repurchases or
offers to prepay, redeem or repurchase based on excess cash flow (in the case
of loans) and customary acceleration rights upon an event of default, and (b)
any Refinancing Indebtedness thereof.
(c) For purposes of determining compliance with this covenant, in the event
that an item of Indebtedness, Disqualified Stock or Preferred Stock (or any
portion thereof) meets the criteria of more than one of the categories of
Indebtedness, Disqualified Stock or Preferred Stock permitted under one of
-157-
AmericasActive:19663285.13
-------------------------------------------------------------------------------
the clauses of
Section 10.2.2(b)
or is entitled to be Incurred pursuant to
Section 10.2.2(a)
, Holdings shall, in its sole discretion, at the time of Incurrence, divide,
classify or reclassify, or at any later time divide, classify or reclassify,
such item of Indebtedness, Disqualified Stock or Preferred Stock (or any
portion thereof) in any manner that complies with this
Section 10.2.2
and shall only be required to include the amount and type of such
Indebtedness, Disqualified Stock or Preferred Stock (or portion thereof) in
Section 10.2.2(a)
or one of the clauses or subsections of
10.2.2(b)
;
provided
that all Indebtedness under this Agreement and the Fixed Asset Facility
outstanding on the Third Amendment Effective Date shall be deemed to have been
Incurred pursuant to
Section 10.2.2(b)(i)
and Holdings shall not be permitted to reclassify all or any portion of such
Indebtedness. Accrual of interest or dividends, the accretion of accreted
value, the accretion of the amortization of original issue discount, the
payment of interest or dividends in the form of additional Indebtedness with
the same terms, the payment of dividends on Disqualified Stock or Preferred
Stock in the form of additional shares of Disqualified Stock or Preferred
Stock of the same class, the accretion of liquidation preference and increases
in the amount of Indebtedness outstanding solely as a result of fluctuations
in the exchange rate of currencies will not be deemed to be an Incurrence of
Indebtedness, Disqualified Stock or Preferred Stock for purposes of this
covenant. Guarantees of, or obligations in respect of letters of credit
relating to, Indebtedness that are otherwise included in the determination of
a particular amount of Indebtedness shall not be included in the determination
of such amount of Indebtedness,
provided
that the Incurrence of the Indebtedness represented by such Guarantee or
letter of credit, as the case may be, was in compliance with this covenant.
Indebtedness Incurred to Refinance Indebtedness incurred pursuant to
clauses (i)
,
(iv)
and
(xii)
of
Section 10.2.2(b)
shall be permitted to include additional Indebtedness, Disqualified Stock or
Preferred Stock incurred to pay accrued but unpaid interest and dividends and
premiums (including reasonable tender premiums), defeasance costs and fees and
expenses incurred in connection with such Refinancing Indebtedness if such
Indebtedness, Disqualified Stock, or Preferred Stock in the aggregate does not
exceed (i) the principal amount of such Indebtedness being Refinanced plus
(ii) the aggregate amount of fees, defeasance costs, underwriting discounts,
accrued and unpaid interest, premiums and other costs and expenses incurred in
connection with such Refinancing.
(d) For purposes of determining compliance with any U.S. dollar-denominated
restriction on the Incurrence of Indebtedness, the Dollar Equivalent principal
amount of Indebtedness denominated in a foreign currency shall be calculated
based on the relevant currency exchange rate in effect on the date such
Indebtedness was Incurred, in the case of term debt, or first committed or
first Incurred (whichever yields the lower Dollar Equivalent), in the case of
revolving credit debt;
provided
that if such Indebtedness is Incurred to Refinance other Indebtedness
denominated in a foreign currency, and such Refinancing would cause the
applicable U.S. dollar-denominated restriction to be exceeded if calculated at
the relevant currency exchange rate in effect on the date of such Refinancing,
such U.S. dollar-denominated restriction shall be deemed not to have been
exceeded so long as the principal amount of such Refinancing Indebtedness does
not exceed (i) the principal amount of such Indebtedness being Refinanced
plus
(ii) the aggregate amount of fees, defeasance costs, underwriting discounts,
accrued and unpaid interest, premiums and other costs and expenses incurred in
connection with such Refinancing.
-158-
AmericasActive:19663285.13
-------------------------------------------------------------------------------
10.2.3
Restricted Payments
. (a)(i) Declare or pay any dividend or make any distribution on account of
Holdings' or any of its Restricted Subsidiaries' Equity Interests, including
any dividend, payment or distribution payable in connection with any merger or
consolidation involving Holdings (other than (A) dividends, payments or
distributions by Holdings payable solely in Equity Interests (other than
Disqualified Stock) of any Intermediate Holdings or in options, warrants or
other rights to purchase such Equity Interests; or (B) dividends, payments or
distributions by a Restricted Subsidiary so long as, in the case of any
dividend, payment or distribution payable on or in respect of any class or
series of securities issued by a Restricted Subsidiary other than a Wholly
Owned Restricted Subsidiary, Holdings or a Restricted Subsidiary receives at
least its pro rata share of such dividend, payment or distribution in
accordance with its Equity Interests in such class or series of securities);
(ii) purchase, redeem, defease or otherwise acquire or retire for value any
Equity Interests of Holdings or any other Parent Entity, including in
connection with any merger or consolidation, in each case held by a Person
other than Holdings or a Restricted Subsidiary; (iii) make any principal
payment on, or redeem, repurchase, defease or otherwise acquire or retire for
value in each case, or give any irrevocable notice of redemption, in each case
prior to any scheduled repayment or scheduled maturity, any Junior
Indebtedness (other than (i) the payment, redemption, repurchase, defeasance,
acquisition or retirement of (A) Junior Indebtedness in anticipation of
satisfying a sinking fund obligation, principal installment or final maturity,
in each case due within one year of the date of such payment, redemption,
repurchase, defeasance, acquisition or retirement and (B) Indebtedness
permitted under
Section 10.2.2(b)(vii)
and
(ix)
and (ii) the giving of an irrevocable notice of redemption with respect to the
transaction permitted under clause
(b)(ii) or (iii
) of this
Section 10.2.3
); or (iv) make any Restricted Investment (all such payments and other actions
set forth in
clauses (a)(i)
through
(a)(iv)
above (other than any exception thereto) being collectively referred to as "
Restricted Payments
"), unless, at the time of such Restricted Payment:
(1) no Event of Default shall have occurred and be continuing or would
occur as a consequence thereof;
(2) immediately after giving effect to such transaction on a pro forma
basis, Holdings could Incur $1.00 of additional Indebtedness under
Section 10.2.2
; and
(3) such Restricted Payment, together with the aggregate amount of all
other Restricted Payments made by Holdings and its Restricted Subsidiaries
after the Third Restatement Date (including Restricted Payments permitted by
Section 10.2.3(b)(i)
and
(vii)
, but excluding all other Restricted Payments permitted by
Section 10.2.3(b)
), is less than the sum of, without duplication,
(A) the sum of (x) $300,000,000 and (y) 50% of the Consolidated Net Income
of Holdings for the period (taken as one accounting period) from October 1,
2016 to the end of Holdings' most recently ended fiscal quarter for which
internal financial statements are available at the time of such Restricted
Payment (or, in the case such Consolidated Net Income for such period is a
deficit, minus 100% of such deficit),
plus
(B) 100% of the aggregate net proceeds and the Fair Market Value of
marketable securities or other property received by Holdings since immediately
after the Third Restatement Date from the issue or sale of:
-159-
AmericasActive:19663285.13
-------------------------------------------------------------------------------
(I) Equity Interests of Holdings, including Treasury Capital Stock (as
defined below), but excluding cash proceeds and the Fair Market Value of
marketable securities or other property received from the sale of Equity
Interests to any future, present or former employees, directors, managers,
service providers or consultants of Holdings, its Subsidiaries or any Parent
Entity after the Third Restatement Date to the extent such amounts have been
applied to Restricted Payments made in accordance with
Section 10.2.3(b)(iv)
and Designated Preferred Stock; and
(II) any Indebtedness of Holdings or any of its Restricted Subsidiaries
that have been converted into or exchanged for such Equity Interests (other
than Disqualified Stock) of Holdings or a Parent Entity;
provided
,
however
, that this
clause (B)
shall not include Excluded Equity,
plus
(C) 100% of the aggregate amount of cash and the Fair Market Value of
marketable securities or other property contributed to the capital of
Holdings, or that became part of the capital of Holdings through consolidation
or merger, following the Third Restatement Date (other than Excluded Equity),
plus
(D) 100% of the aggregate amount received by Holdings or any Restricted
Subsidiary in cash and the Fair Market Value of marketable securities or other
property received by Holdings or any Restricted Subsidiary from:
(x) the sale or other disposition (other than to Holdings or a Subsidiary
of Holdings) of Restricted Investments made by Holdings and its Restricted
Subsidiaries and from repurchases and redemptions of, or cash distributions or
cash interest received in respect thereof, such Restricted Investments from
Holdings and its Restricted Subsidiaries by any Person (other than Holdings or
any of its Subsidiaries) and from repayments of loans or advances, and
releases of guarantees, which constituted Restricted Investments made by
Holdings or its Restricted Subsidiaries in each case after the Third
Restatement Date,
(y) the sale (other than to Holdings or a Restricted Subsidiary or an
employee stock ownership plan or trust established by Holdings or any
Restricted Subsidiary (other than to the extent such employee stock ownership
plan or trust has been funded by Holdings or any Restricted Subsidiary or to
the extent that such Investment constituted a Permitted Investment)) of the
Capital Stock of an Unrestricted Subsidiary, or
(z) any distribution or dividend from an Unrestricted Subsidiary (to the
extent such distribution or dividend is not already included in the
calculation of Consolidated Net Income),
plus
(E) in the event any Unrestricted Subsidiary of Holdings has been
redesignated as a Restricted Subsidiary or has been merged or consolidated
with or into, or transfers or conveys its assets to, or is liquidated into,
Holdings or a Restricted Subsidiary of Holdings, in each case after the Third
Restatement Date, the Fair Market Value of the Investment of Holdings in such
Unrestricted Subsidiary at the time of such redesignation, combination or
transfer (or of the assets transferred or conveyed, as applicable), (other
than in
-160-
AmericasActive:19663285.13
-------------------------------------------------------------------------------
each case to the extent that the designation of such Subsidiary as an
Unrestricted Subsidiary constituted a Permitted Investment),
plus
(F) the aggregate amount of Declined Amounts.
(b) Notwithstanding the foregoing,
Section 10.2.3(a)(i)-(iv)
will not prohibit:
(i) the payment of any dividend or distribution or consummation of any
irrevocable redemption within 60 days after the date of declaration thereof or
the giving of a redemption notice related thereto, if at the date of
declaration or notice such payment would have complied with the provisions of
this Agreement;
(ii) (x) the redemption, repurchase, defeasance, discharge, retirement or
other acquisition of any Equity Interests ("
Retired Capital Stock
") of Holdings or any other Parent Entity ("
Treasury Capital Stock
"), or Junior Indebtedness of Holdings or any Guarantor, in exchange for, or
out of the proceeds of the substantially concurrent sale of, Equity Interests
of Holdings or any other Parent Entity or contributions to the equity capital
of Holdings (other than Excluded Equity) (collectively, including any such
contributions, "
Refunding Capital Stock
");
(y) the declaration and payment of accrued dividends on the Retired Capital
Stock out of the proceeds of the substantially concurrent sale (other than to
a Subsidiary of Holdings or to an employee stock ownership plan or any trust
established by Holdings or any of its Subsidiaries) of Refunding Capital
Stock; and
(z) if immediately prior to the retirement of the Retired Capital Stock,
the declaration and payment of dividends thereon was permitted under
Section 10.2.3(b)(vi)
and has not been made as of such time (the "
Unpaid Amount
"), the declaration and payment of dividends on the Refunding Capital Stock
(other than Refunding Capital Stock the proceeds of which were used to redeem,
repurchase, retire or otherwise acquire any Equity Interests of Holdings or
any Parent Entity) in an aggregate amount no greater than the Unpaid Amount;
(iii) the prepayment, redemption, defeasance, repurchase, exchange or other
acquisition or retirement of Junior Indebtedness of Holdings or any Guarantor
made by exchange for, or out of the proceeds of the substantially concurrent
sale of, Refinancing Indebtedness thereof;
(iv) the purchase, retirement, redemption or other acquisition (or
dividends to Holdings or any other Parent Entity to finance any such purchase,
retirement, redemption or other acquisition) for value of Equity Interests of
Holdings or any other Parent Entity held by any future, present or former
employee, director, manager, service provider or consultant of Holdings or any
other Parent Entity or any Subsidiary of Holdings (or their permitted
transferees) pursuant to any management equity plan or stock option plan or
any other management or employee benefit plan or other agreement or any equity
subscription or equityholder agreement (including, for the avoidance of doubt,
any principal and interest payable on any Indebtedness issued by Holdings or
any Parent Entity in connection with such repurchase, retirement or other
acquisition);
provided
,
however
, that the aggregate amounts paid under this
clause (iv)
shall not
-161-
AmericasActive:19663285.13
-------------------------------------------------------------------------------
exceed in any calendar year $7,500,000 (with unused amounts in any calendar
year being carried over to succeeding calendar years up to a maximum of
$15,000,000 in the aggregate in any calendar year);
provided
,
further
,
however
, that such amount in any fiscal year may be increased by an amount not to
exceed:
(A) the cash proceeds received by Holdings or any of its Restricted
Subsidiaries from the sale of Equity Interests (other than Excluded Equity) of
Holdings or any other Parent Entity (to the extent contributed to the
Borrower) to members of management, directors or consultants of Holdings and
its Restricted Subsidiaries or Holdings or any other Parent Entity that occurs
after April 4, 2014 to the extent the cash proceeds from the sale of such
Equity Interests have not otherwise been applied to the payment of Restricted
Payments by virtue of
(
Section 10.2.3(a)(3)
);
plus
(B) the cash proceeds of key man life insurance policies received by
Holdings or any other Parent Entity (to the extent contributed to Holdings)
and its Restricted Subsidiaries after the April 4, 2014;
minus
(C) the amount of any Restricted Payments previously made with the cash
proceeds described in
clauses (A)
and
(B)
of this
clause (iv)
,
(
provided
that the cancellation of Indebtedness owing to Holdings from any current or
former officer, director, employee, manager, service provider or consultant
(or any permitted transferees thereof) of Holdings or any of its Restricted
Subsidiaries (or any Parent Entity), in connection with a repurchase of Equity
Interests of Holdings or any Parent Entity from such Persons will not be
deemed to constitute a Restricted Payment for purposes of this
Section 10.2.3
or any other provision of this Agreement);
(v) the declaration and payment of dividends or distributions to holders of
any class or series of Disqualified Stock of Holdings or any of its Restricted
Subsidiaries and any Preferred Stock of any Restricted Subsidiaries issued or
Incurred in accordance with
Section 10.2.2
;
(vi) the declaration and payment of dividends or distributions to holders
of any class or series of Designated Preferred Stock and the declaration and
payment of dividends to Holdings or any other Parent Entity, the proceeds of
which will be used to fund the payment of dividends to holders of any class or
series of Designated Preferred Stock of Holdings or any other Parent Entity
issued after April 4, 2014;
provided
,
however
, that (A) for the most recently ended four full fiscal quarters for which
internal financial statements are available immediately preceding the date of
issuance of such Designated Preferred Stock, after giving effect to such
issuance (and the payment of dividends or distributions) on a pro forma basis,
the Fixed Charge Coverage Ratio of the Parent and its Restricted Subsidiaries
on a consolidated basis would have been at least 2.00 to 1.00 and (B) the
aggregate amount of dividends declared and paid pursuant to this
clause (vi)
does not exceed the net cash proceeds actually received by Holdings from the
sale (or the contribution of the net cash proceeds from the sale) of
Designated Preferred Stock;
(vii) [Intentionally Omitted];
(viii) [Intentionally Omitted];
-162-
AmericasActive:19663285.13
-------------------------------------------------------------------------------
(ix) Restricted Payments in an aggregate amount that does not exceed the
aggregate amount of Excluded Contributions received since April 4, 2014;
(x) any Restricted Payment;
provided
that (x) no Default or Event of Default has occurred and is continuing or
would result from such Restricted Payment and (y) on a pro forma basis after
giving effect to such Restricted Payment and any related incurrence of
Indebtedness, the proceeds of which are used to make such Restricted Payment,
the Consolidated Total Net Debt Ratio would be equal to or less than 2.00:1.00;
(xi) [Intentionally Omitted];
(xii) for so long as Holdings is a member of a group filing a consolidated,
combined or similar income tax return with Holdings or any other Parent Entity
(or a disregarded entity for tax purposes with respect to Holdings or such
other direct or indirect parent), the payment of dividends or other
distributions to Holdings or such other Parent Entity in amounts required for
Holdings or such other parent company to pay income taxes imposed on such
entity to the extent such income taxes are attributable to the income of
Holdings and its Subsidiaries;
provided
,
however
, that the amount of such payments in respect of any tax year does not, in the
aggregate, exceed the amount that Holdings and its Subsidiaries would have
been required to pay in respect of such income taxes in respect of such year
if the Borrower and its Subsidiaries paid such income taxes directly as a
stand-alone income tax group (reduced by any such taxes paid directly by
Holdings or any Subsidiary);
provided, further
, the permitted payment pursuant to this
clause
(xii)
with respect to any taxes attributable to income of any Unrestricted
Subsidiary for any taxable period shall be limited to the amount actually paid
with respect to such period by such Unrestricted Subsidiary to Holdings or any
Restricted Subsidiary for the purposes of paying such income taxes;
(xiii) the payment of dividends, other distributions or other amounts to,
or the making of loans to Holdings or any Parent Entity, in the amount
required for such entity to, if applicable:
(A) pay amounts equal to the amounts required for Holdings or any other
Parent Entity to pay fees and expenses (including franchise or similar taxes)
required to maintain its corporate existence, customary salary, bonus and
other benefits payable to, and indemnities provided on behalf of, officers,
employees, directors, managers, service providers and consultants of Holdings
or any other Parent Entity, if applicable, and general corporate operating and
overhead expenses of Holdings or any other Parent Entity, if applicable, in
each case to the extent such fees, expenses, salaries, bonuses, benefits and
indemnities are attributable to the ownership or operation of Holdings and its
Subsidiaries;
(B) pay, if applicable, amounts required for Holdings, any Parent Entity to
pay interest and/or principal on Indebtedness the proceeds of which have been
contributed to Holdings (other than as Excluded Equity) and that has been
guaranteed by, and is otherwise considered Indebtedness of, Holdings or any
Restricted Subsidiary Incurred in accordance with
Section 10.2.2
; and
-163-
AmericasActive:19663285.13
-------------------------------------------------------------------------------
(C) pay fees and expenses incurred by Holdings or any Parent Entity, other
than to Affiliates of Holdings, related to any unsuccessful equity or debt
offering of such Parent Entity;
(xiv) the payment of cash dividends or other distributions on Holdings's
Capital Stock used to, or the making of loans to Holdings or any other Parent
Entity to, fund the payment of fees and expenses owed by Holdings or any other
Parent Entity, as the case may be, or Restricted Subsidiaries of Holdings to
Affiliates, in each case to the extent permitted by
Section 10.2.15
;
(xv) (i) repurchases of Equity Interests deemed to occur upon exercise of
stock options or warrants if such Equity Interests represent a portion of the
exercise price of such options or warrants and (ii) in connection with the
withholding of a portion of the Equity Interests granted or awarded to a
current or former director or employee to pay for the taxes payable by such
director or employee upon such grant or award;
(xvi) purchases of receivables in connection with a Permitted Receivables
Financing and the payment or distribution of Receivables Fees;
(xvii) payments or distributions to satisfy dissenters' rights, pursuant to
or in connection with a consolidation, merger, amalgamation or transfer of
assets that complies with the provisions of this Agreement applicable to
mergers, consolidations and transfers of all or substantially all the property
and assets of Holdings;
(xviii) the distribution, as a dividend or otherwise, of shares of Capital
Stock of, or Indebtedness owed to Holdings or a Restricted Subsidiary of
Holdings by, Unrestricted Subsidiaries (other than Unrestricted Subsidiaries
the primary assets of which are cash and/or cash equivalents); and
(xix) the repurchase, redemption, or other acquisition for value of Equity
Interests of Holdings or any of its Restricted Subsidiaries deemed to occur in
connection with the payment of cash in lieu of the issuance of fractional
shares of Equity Interests in connection with a share dividend, distribution,
share split, reverse share split, merger, consolidation, amalgamation or other
business combination of Holdings or a Restricted Subsidiary, in each case, as
permitted under this Agreement;
provided
,
however
, that at the time of, and after giving effect to, any Restricted Payment
permitted under
clause (x)
, no Event of Default shall have occurred and be continuing or would occur as
a consequence thereof.
(c) Holdings will not permit any Unrestricted Subsidiary to become a
Restricted Subsidiary except pursuant to the definition of "Unrestricted
Subsidiary." For purposes of designating any Restricted Subsidiary as an
Unrestricted Subsidiary, all outstanding Investments by Holdings and its
Restricted Subsidiaries (except to the extent repaid) in the Subsidiary so
designated will be deemed to be Restricted Payments or Permitted Investments
in an amount determined as set forth in the last sentence of the definition of
"Investments." Such designation will only be permitted if a Restricted Payment
or Permitted Investment in such amount would be permitted at such time and if
such Subsidiary otherwise meets the definition of an Unrestricted Subsidiary.
-164-
AmericasActive:19663285.13
-------------------------------------------------------------------------------
(d) For purposes of compliance with
Section 10.2.3
, if any Investment or Restricted Payment would be permitted pursuant to one
or more provisions of
Section 10.2.3
and/or one or more of the exceptions contained in the definition of "Permitted
Investments," Holdings may divide and classify such Investment or Restricted
Payment in any manner that complies with this covenant and may later divide
and reclassify any such Investment or Restricted Payment so long as the
Investment or Restricted Payment (as so divided and/or reclassified) would be
permitted to be made in reliance on the applicable exception as of the date of
such reclassification.
(e) The amount of all Restricted Payments (other than cash) will be the
Fair Market Value on the date of the Restricted Payment of the assets or
securities proposed to be transferred or issued by Holdings or any of its
Restricted Subsidiaries, as the case may be, pursuant to the Restricted
Payment.
Notwithstanding the foregoing provisions of this
Section 10.2.3
, (i) the Restricted Payments described in preceding clauses
(a)(i)
,
(a)(ii)
,
(b)(vi)
and
(b)(x)
shall only be permitted to the extent that, in addition to the other
conditions set forth in this
Section 10.2.3
applicable thereto, the Specified Transaction Conditions shall have been
satisfied in connection therewith and (ii) with respect to this
Section 10.2.3
and the definition of "Permitted Investments", for purposes of determining the
permissibility of any Investment or Restricted Payment consisting of a sale,
assignment, transfer, lease, conveyance or other disposition of ABL Priority
Collateral, each Specified Jurisdiction Guarantor shall be deemed to be a
Restricted Subsidiary that is not a Guarantor or a Loan Party (and, for the
avoidance of doubt, shall not be deemed to be a Guarantor or a Loan Party).
-165-
AmericasActive:19663285.13
-------------------------------------------------------------------------------
10.2.4
Holdings Activities
. Holdings shall not conduct, transact or otherwise engage in any business or
operations other than (i) the ownership and/or acquisition of the Capital
Stock of the U.S. Borrower and activities incidental thereto, (ii) the
maintenance of its legal existence, including the ability to incur fees, costs
and expenses relating to such maintenance, (iii) participating in tax,
accounting and other administrative matters as owner of the Capital Stock of
the U.S. Borrower and reporting related to such matters, (iv) the performance
of its obligations under and in connection with the Loan Documents, the Senior
Unsecured Notes, any documentation governing the Fixed Asset Facility and any
documentation governing other Indebtedness permitted hereunder, any
refinancing thereof and the other agreements contemplated hereby and thereby,
(v) incurring fees, costs and expenses relating to overhead and general
operating including professional fees for legal, tax and accounting matters,
(vi) providing indemnification to officers and directors and as otherwise
permitted hereunder, (vii) activities incidental to the consummation of the
Transactions, (viii) financing activities, including the issuance of
securities, incurrence of debt, payment of dividends, making contributions to
the capital of the U.S. Borrower and guaranteeing the obligations of the U.S.
Borrower and its Subsidiaries, (ix) any other transaction permitted pursuant to
Section 10.2.1
(it being understood and agreed that notwithstanding anything herein to the
contrary, the only negative covenants in Section 10.2 Holdings is subject to
are
Section 10.2.1
and this
Section 10.2.4
), (x) providing indemnification to its directors and officers and (xi)
activities incidental to the businesses or activities described in clauses (i)
through (x) of this
Section 10.2.4
.
10.2.5
[Intentionally Omitted]
10.2.6
[Intentionally Omitted]
10.2.7
Fundamental Changes
.
(a) Allow any Borrower to Consolidate, merge or amalgamate with or into or
wind up into (whether or not such Borrower is the surviving Person), or sell,
assign, transfer, lease, convey or otherwise dispose of all or substantially
all of its properties or assets in one or more related transactions, to any
Person unless:
(i) such Borrower is the surviving Person or the Person formed by or
surviving any such consolidation, merger or amalgamation with a Person from
the same country of domicile (if other than such Borrower) or to which such
sale, assignment, transfer, lease, conveyance or other disposition will have
been made is a Person organized or existing under the laws of the United
States, any state thereof, the District of Columbia, or any territory thereof
or Canada, or any province thereof, as applicable (such Borrower or such
Person, as the case may be, being herein called the "
Successor Company
");
(ii) the Successor Company (if other than such Borrower) expressly assumes
all the obligations of such Borrower under each Loan Document to which such
Borrower is a party pursuant to joinder documentation reasonably satisfactory
to Agent;
(iii) immediately after giving effect to such transaction, no Default exists;
(iv) immediately after giving pro forma effect to such transaction, as if
such transaction had occurred at the beginning of the applicable four-quarter
period, either;
-166-
AmericasActive:19663285.13
-------------------------------------------------------------------------------
(A) the Successor Company would be permitted to Incur at least $1.00 of
additional Indebtedness pursuant to the Fixed Asset Fixed Charge Coverage
Ratio test set forth in
Section 10.2.2(a)
; or
(B) the Fixed Asset Fixed Charge Coverage Ratio for the Successor Company
and its Restricted Subsidiaries would be equal to or greater than such ratio
for Holdings and its Restricted Subsidiaries immediately prior to such
transaction;
(v) if the Successor Company is other than such Borrower, each Guarantor
with respect to such Borrower's obligations, unless it is the other party to
the transactions described above, shall have confirmed that its Guarantee and
grant of security shall apply to such Person's obligations under the Loan
Documents;
(vi) to the extent any assets of the Person which is merged, amalgamated or
consolidated with or into the Successor Company are assets of the type which
would constitute Collateral under the Security Documents, the Successor
Company will take such action as may be reasonably requested by Agent to the
extent necessary to cause such property and assets to be made subject to the
Lien of the Security Documents in the manner and to the extent required by
Section 10.1.11
hereof or any of the Security Documents and shall take all reasonably
necessary action so that such Lien is perfected to the extent required by the
Security Documents; and
(vii) the Collateral owned by or transferred to the Successor Company
shall: (A) continue to constitute Collateral under this Agreement and the
Security Documents, (B) be subject to the Lien in favor of Agent for the
benefit of the applicable Secured Parties, and (C) not be subject to any Lien
other than Permitted Liens or Liens otherwise permitted hereunder.
The Successor Company (if other than such Borrower) will succeed to, and be
substituted for, such Borrower under the Loan Documents, and such Borrower
will automatically be released and discharged from its Obligations.
Notwithstanding the foregoing
clauses (iii)
and
(iv)
, (a) any Restricted Subsidiary that is not a Guarantor may consolidate,
amalgamate or merge with or into or sell, assign, transfer, lease, convey or
otherwise dispose of all or part of its properties and assets to any Borrower
or any Restricted Subsidiary, (b) any Restricted Subsidiary that is a
Guarantor may consolidate, amalgamate or merge with or into or sell, assign,
transfer, lease, convey or otherwise dispose of all or part of its properties
and assets to any Borrower, any Guarantor or any Restricted Subsidiary that
becomes a Guarantor in connection with such consolidation, amalgamation,
merger, sale, assignment, transfer, lease, conveyance or disposal and (c) any
Borrower may merge, amalgamate or consolidate with an Affiliate incorporated
or organized in the same country of domicile and solely for the purpose of
reincorporating or reorganizing the Borrowers in another state of the United
States, the District of Columbia, any territory of the United States or Canada
or any province thereof, as applicable, so long as the amount of Indebtedness
of such Borrower and its Restricted Subsidiaries is not increased thereby and
all Lien perfection steps have been satisfied, as required by the Agent.
(b) Each Guarantor will not, and Holdings will not permit any Guarantor to,
consolidate, amalgamate or merge with or into or wind up into (whether or not
such Guarantor is the surviving Person), or sell, assign, transfer, lease,
convey or otherwise dispose of all or substantially all of its properties or
assets in one or more related transactions to, any Person unless:
-167-
AmericasActive:19663285.13
-------------------------------------------------------------------------------
(i) either (a) such Guarantor is the surviving Person or the Person formed
by or surviving any such consolidation, amalgamation or merger (if other than
such Guarantor) or to which such sale, assignment, transfer, lease, conveyance
or other disposition will have been made is a Person organized or existing
under the laws of the jurisdiction of organization of such Guarantor, as the
case may be, or (provided it is the same country of domicile) the laws of the
United States, any state thereof, the District of Columbia or any territory
thereof, or Canada or any province thereof, as applicable (such Guarantor or
such Person, as the case may be, being herein called the "
Successor Guarantor
") and the Successor Guarantor (if other than such Guarantor) expressly
assumes all the obligations of such Guarantor under the Loan Documents to
which such Guarantor is a party pursuant to joinder documentation reasonably
satisfactory to the Agent or (b) such sale or disposition or consolidation or
merger is not in violation of
Section 10.2.3
;
(A) immediately after giving effect to such transaction, no Default exists;
(B) to the extent any assets of the Guarantor which is merged, amalgamated
or consolidated with or into the Successor Company are assets of the type
which would constitute Collateral under the Security Documents, the Successor
Company will take such action as may be reasonably requested by the Agent to
the extent necessary to cause such property and assets to be made subject to
the Lien of the Security Documents in the manner and to the extent required by
Section 10.1.11
hereof or any of the Security Documents and shall take all reasonably
necessary action so that such Lien is perfected to the extent required by the
Security Documents; and
(C) the Collateral (if any) owned by or transferred to the Successor
Company shall: (i) continue to constitute Collateral under the Loan Documents,
(ii) be subject to the Lien in favor of Agent for the benefit of the
applicable Secured Parties, and (iii) not be subject to any Lien other than
Permitted Liens.
(ii) The Successor Guarantor will succeed to, and be substituted for, such
Guarantor under the Loan Documents and such Guarantor's Guarantee, and such
Guarantor will automatically be released and discharged from its obligations
under the Loan Documents. Notwithstanding the foregoing, (a) a Guarantor may
merge, amalgamate or consolidate with an Affiliate incorporated or organized
in the same country of domicile and solely for the purpose of reincorporating
or reorganizing such Guarantor in another state of the United States, the
District of Columbia, any territory of the United States or Canada or any
province thereof, as applicable, so long as the amount of Indebtedness of the
Guarantor is not increased thereby and all Lien perfection steps have been
satisfied, as required by the Agent, (b) a Guarantor may merge, amalgamate or
consolidate with another Guarantor or Holdings and (c) a Guarantor may convert
into a Person organized or existing under the laws of the jurisdiction of
organization of such Guarantor or a jurisdiction in the United States or
Canada or any province thereof, as applicable, and all Lien perfection steps
have been satisfied, as required by the Agent.
(iii) [Intentionally Omitted
]
.
-168-
AmericasActive:19663285.13
-------------------------------------------------------------------------------
Notwithstanding the foregoing provisions of this
Section 10.2.7
, for purposes of determining the permissibility of any sale, assignment,
transfer, lease, conveyance or other disposition of ABL Priority Collateral
under this
Section 10.2.7
, each Specified Jurisdiction Guarantor shall be deemed to be a Restricted
Subsidiary that is not a Guarantor or a Loan Party (and, for the avoidance of
doubt, shall not be deemed to be a Guarantor or a Loan Party).
10.2.8
[Intentionally Omitted]
10.2.9
Organization Documents
. Amend, modify or otherwise change any of its Organization Documents as in
effect on the First Amendment Effective Date in any manner materially adverse
to the Lenders.
10.2.10
Tax Consolidation
. File or consent to the filing of any consolidated income tax return with any
Person other than the Covenant Parties and Restricted Subsidiaries.
10.2.11
Accounting Changes
. (a) Make any material change in accounting treatment or reporting practices,
except as required by GAAP and in accordance with Section 1.2; or change its
fiscal year or (b) be included in a fiscal unity (
fiscal eenheid
) for Dutch tax purposes with any Person other than the Covenant Parties and
Restricted Subsidiaries.
10.2.12
Dividend and Other Payment Restrictions Affecting Subsidiaries
. Directly or indirectly, create or otherwise cause or suffer to exist or
become effective any consensual encumbrance or consensual restriction on the
ability of any Restricted Subsidiary that is not a Guarantor to:
(a) (i) pay dividends or make any other distributions to Holdings or any of
its Restricted Subsidiaries (1) on its Capital Stock or (2) with respect to
any other interest or participation in, or measured by, its profits; or (ii)
pay any Indebtedness owed to Holdings or any of its Restricted Subsidiaries;
(b) make loans or advances to Holdings or any of its Restricted
Subsidiaries; or
(c) sell, lease or transfer any of its properties or assets to Holdings or
any of its Restricted Subsidiaries;
except in each case for such encumbrances or restrictions existing under or by
reason of:
(i) contractual encumbrances or restrictions in effect or entered into on
the Third Restatement Date, including pursuant to this Agreement, the Loan
Documents and the other documents relating to this Agreement and related
Hedging Obligations, the related documentation, the Fixed Asset Facility
Indenture incurred on the date hereof and related Hedging Obligations and the
related documentation and any documents relating to the Senior Unsecured Notes;
(ii) [Intentionally Omitted];
(iii) applicable law or any applicable rule, regulation or order;
-169-
AmericasActive:19663285.13
-------------------------------------------------------------------------------
(iv) any agreement or other instrument of a Person, or relating to
Indebtedness or capital stock of a Person, which Person is acquired by or
merged, consolidated or amalgamated with or into Holdings or any Restricted
Subsidiary, or any other transaction entered into in connection with such
acquisition, merger, consolidation or amalgamation, which was in existence at
the time of such acquisition or at the time it mergers, consolidates or
amalgamates with or into Holdings or any of its Restricted Subsidiaries (but,
in each case, not created in contemplation thereof), which encumbrance or
restriction is not applicable to any Person, or the properties or assets of
any Person, other than the Person and its Subsidiaries, or the property or
assets of the Person and its Subsidiaries, so acquired;
(v) contracts for the sale or disposition of assets, including customary
encumbrances or restrictions with respect to a Subsidiary of (i) Holdings or
(ii) any of its Restricted Subsidiaries imposed pursuant to an agreement
entered into for the sale or disposition of all or substantially all the
Capital Stock or assets of such Subsidiary;
(vi) restrictions on cash or other deposits or net worth imposed by
customers under contracts entered into in the ordinary course of business;
(vii) customary provisions in (x) joint venture agreements entered into in
the ordinary course of business with respect to the Equity Interests subject
to the joint venture and (y) operating or other similar agreements, asset sale
agreements, stock sale agreements entered into in connection with the entering
into of such transaction, which limitation is applicable only to the assets
that are the subject of those agreements;
(viii) purchase money obligations for property acquired in the ordinary
course of business and Capitalized Lease Obligations to the extent imposing
restrictions of the nature discussed in clause (c) above on the property so
acquired;
(ix) customary provisions contained in leases, subleases, licenses,
sublicenses, contracts and other similar agreements, including with respect to
intellectual property and other agreements;
(x) any encumbrance or restriction contained in any documentation relating
to a Permitted Receivables Financing;
(xi) other Indebtedness, Disqualified Stock or Preferred Stock of any
Restricted Subsidiary of the Borrower that is Incurred subsequent to April 4,
2014 pursuant to
Section 10.2.2
;
provided
that such encumbrances and restrictions contained in any agreement or
instrument will not materially affect Holdings' ability to make anticipated
principal or interest payment on the Loans (as determined by Holdings in good
faith);
(xii) any encumbrance or restriction contained in Secured Indebtedness
otherwise permitted to be Incurred pursuant to
Sections 10.2.1
and
10.2.2
to the extent limiting the right of the debtor to dispose of the assets
securing such Indebtedness;
(xiii) encumbrances or restrictions arising or agreed to in the ordinary
course of business, not relating to any Indebtedness, and that do not,
individually or in the aggregate,
-170-
AmericasActive:19663285.13
-------------------------------------------------------------------------------
(x) detract from the value of the property or assets of Holdings or any
Restricted Subsidiary in any manner material to Holdings or any Restricted
Subsidiary or (y) materially affect Holdings' ability to make anticipated
principal or interest payment on the Loans (as determined by Holdings in good
faith);
(xiv) encumbrances or restrictions existing under, by reason of or with
respect to Refinancing Indebtedness;
provided
that the encumbrances and restrictions contained in the agreements governing
that Refinancing Indebtedness are not materially more restrictive, taken as a
whole, than those contained in the agreements governing the Indebtedness being
refinanced;
(xv) any encumbrance or restriction with respect to a Subsidiary which was
previously an Unrestricted Subsidiary pursuant to or by reason of an agreement
that such Subsidiary is a party to or entered into before the date on which
such Subsidiary became a Restricted Subsidiary;
provided
that such agreement was not entered into in anticipation of an Unrestricted
Subsidiary becoming a Restricted Subsidiary and any such encumbrance or
restriction does not extend to any assets or property of Holdings or any other
Restricted Subsidiary other than the assets and property of such Subsidiary;
(xvi) restrictions or conditions contained in any trading, netting,
operating, construction, service, supply, purchase, sale or other agreement to
which Holdings or any of its Restricted Subsidiaries is a party entered into
in the ordinary course of business;
provided
that such agreement prohibits the encumbrance of solely the property or assets
of Holdings or such Restricted Subsidiary that are the subject to such
agreement, the payment rights arising thereunder or the proceeds thereof and
does not extend to any other asset or property of Holdings or such Restricted
Subsidiary or the assets or property of another Restricted Subsidiary; and
(xvii) any encumbrances or restrictions imposed by any amendments,
modifications, restatements, renewals, increases, supplements, refundings,
replacements or Refinancings of the contracts, instruments or obligations
referred to in
clauses (i)
through
(xvi)
above;
provided
that such amendments, modifications, restatements, renewals, increases,
supplements, refundings, replacements or Refinancings are, in the good faith
judgment of Holdings, not materially more restrictive with respect to such
encumbrances and other restrictions taken as a whole than prior to such
amendment, modification, restatement, renewal, increase, supplement,
refunding, replacement or refinancing.
For purposes of determining compliance with this
Section 10.2.12
, (i) the priority of any Preferred Stock in receiving dividends or
liquidating distributions prior to dividends or liquidating distributions
being paid on common stock shall not be deemed a restriction on the ability to
make distributions on Capital Stock and (ii) the subordination of loans or
advances made to Holdings or a Restricted Subsidiary of Holdings to other
Indebtedness Incurred by Holdings or any such Restricted Subsidiary shall not
be deemed a restriction on the ability to make loans or advances.
-171-
AmericasActive:19663285.13
-------------------------------------------------------------------------------
10.2.13
Hedging Agreements
. Enter into any Hedging Agreement, except to hedge risks arising under the
Loan Documents, the Permitted Secured Debt Documents, the Secured Incremental
Equivalent Debt Documents or in the ordinary course of business and, in any
case, not for speculative purposes.
10.2.14
Conduct of Business
. Engage in any business, other than its business as conducted on the First
Amendment Effective Date or reasonable extensions thereof and other businesses
reasonably incidental or related thereto (including relating to manufacturing
processes), and any activities incidental thereto.
10.2.15
Affiliate Transactions
. (a) Directly or indirectly, make any payment to, or sell, lease, transfer or
otherwise dispose of any of its properties or assets to, or purchase any
property or assets from, or enter into or make or amend any transaction or
series of transactions, contract, agreement, understanding, loan, advance or
Guarantee with, or for the benefit of, any Affiliate of Holdings (each of the
foregoing, an "
Affiliate Transaction
") involving aggregate consideration in excess of $10,000,000, unless:
(i) such Affiliate Transaction is on terms that are not materially less
favorable to Holdings or the relevant Restricted Subsidiary than those that
could have been obtained in a comparable transaction by Holdings or such
Restricted Subsidiary with an unrelated Person;
(ii) with respect to any Affiliate Transaction or series of related
Affiliate Transactions involving aggregate consideration in excess of
$25,000,000, Holdings delivers to Agent a resolution adopted in good faith by
the majority of the Board of Directors of Holdings, approving such Affiliate
Transaction and set forth in an Officer's Certificate certifying that such
Affiliate Transaction complies with
clause (i)
above.
(b) Notwithstanding the foregoing,
Section 10.2.15
will not apply to the following:
(i) (A) transactions between or among Holdings and/or any of its Restricted
Subsidiaries (or an entity that becomes a Restricted Subsidiary as a result of
such transaction) and (B) any merger, amalgamation or consolidation of
Holdings or any other Parent Entity,
provided
that such parent company shall have no material liabilities and no material
assets other than cash, Cash Equivalents and the Capital Stock of Holdings and
such merger, amalgamation or consolidation is otherwise in compliance with the
terms of this Agreement;
(ii) (A) Restricted Payments permitted by
Section 10.2.3
and (B) Permitted Investments;
(iii) any employment and severance agreements entered into by Holdings or
any of its Restricted Subsidiaries in the ordinary course of business and the
payment of reasonable and customary fees and compensation paid to, and
indemnity and similar arrangements provided on behalf of, officers, directors,
employees, managers, service providers or consultants of Holdings or any
Restricted Subsidiary or Holdings or (to the extent relating to the business
of Holdings and its Subsidiaries) Holdings or any other Parent Entity;
-172-
AmericasActive:19663285.13
-------------------------------------------------------------------------------
(iv) transactions in which Holdings or any of its Restricted Subsidiaries,
as the case may be, delivers to Agent a letter from an Independent Financial
Advisor stating that such transaction is fair to Holdings or such Restricted
Subsidiary from a financial point of view or meets the requirements of
Section 10.2.15(a)(i)
;
(v) payments or loans (or cancellation of loans, advances or Guarantees) or
advances to employees or consultants or Guarantees in respect thereof for bona
fide business purposes in the ordinary course of business;
(vi) any agreement or arrangement as in effect or contemplated as of the
First Amendment Effective Date or as thereafter amended, supplemented or
replaced (so long as such amended, supplemented or replaced agreement is not
more disadvantageous to the Lenders in any material respect than the original
agreement or arrangement as in effect on the First Amendment Effective Date)
or any transaction or payments contemplated thereby;
(vii) [Intentionally Omitted];
(viii) the existence of, or the performance by Holdings or any of its
Restricted Subsidiaries of its obligations under the terms of, any
stockholders or similar agreement (including any registration rights agreement
or purchase agreement related thereto) to which it is a party as of the First
Amendment Effective Date and any amendment thereto or similar transactions,
arrangements or agreements which it may enter into thereafter;
provided
,
however
, that the existence of, or the performance by Holdings or any of its
Restricted Subsidiaries of its obligations under, any future amendment to any
such existing transaction, arrangement or agreement or under any similar
transaction, arrangement or agreement entered into after the First Amendment
Effective Date shall only be permitted by this
clause (viii)
to the extent that the terms of any such existing transaction, arrangement or
agreement together with all amendments thereto, taken as a whole, or new
agreement are not otherwise more disadvantageous to the Lenders in any
material respect than the original transaction, arrangement or agreement as in
effect on the First Amendment Effective Date;
(ix) (A) transactions with customers, clients, suppliers or purchasers or
sellers of goods or services, in each case in the ordinary course of business
and otherwise in compliance with the terms of this Agreement, which are fair
to Holdings and its Restricted Subsidiaries in the reasonable determination of
the Board of Directors or the senior management of Holdings, and are on terms
at least as favorable as might reasonably have been obtained at such time from
an unaffiliated party or (B) transactions with Unrestricted Subsidiaries in
the ordinary course of business;
(x) any transaction effected as part of a Permitted Receivables Financing;
(xi) the sale or issuance or transfer of Equity Interests (other than
Disqualified Stock) of Holdings and the granting and performing of reasonable
and customary registration rights;
(xii) payments by Holdings or any of its Restricted Subsidiaries to any of
the Investors made for any financial advisory, financing, underwriting or
placement services or in respect of other investment banking activities,
including, without limitation, in connection with acquisitions
-173-
AmericasActive:19663285.13
-------------------------------------------------------------------------------
or divestitures which payments are approved by a majority of the Board of
Directors of Holdings in good faith;
(xiii) any contribution to the capital of Holdings (other than Disqualified
Stock);
(xiv) any transaction with a Person (other than an Unrestricted Subsidiary
or a joint venture) which would constitute an Affiliate Transaction solely
because Holdings or a Restricted Subsidiary owns an Equity Interest in or
otherwise controls such Person;
(xv) transactions between Holdings or any of its Restricted Subsidiaries
and any Person that would constitute an Affiliate Transaction solely because a
director of which is also a director of Holdings or any other Parent Entity;
provided
,
however
, that such director abstains from voting as a director of Holdings or such
other Parent Entity, as the case may be, on any matter involving such other
Person;
(xvi) the entering into of any tax sharing agreement or arrangement and any
payments permitted by
Section 10.2.3(b)(xii)
;
(xvii) transactions to effect the Transactions and the payment of all
transaction, underwriting, commitment and other fees and expenses related to
the Transactions;
(xviii) pledges of Equity Interests of Unrestricted Subsidiaries;
(xix) the issuances of securities or other payments, loans, advances or
guarantees (or cancellation of loans, advances or guarantees) to employees,
directors, managers, service providers or consultants of Holdings, any of its
Restricted Subsidiaries or any Parent Entity and employment agreements, stock
option and stock ownership plans or similar employee benefit plans which, in
each case, are approved by Holdings in good faith;
(xx) any employment, consulting, service or termination agreement, or
customary indemnification arrangements, entered into by Holdings or any of its
Restricted Subsidiaries with current, former or future officers and employees
of Holdings or any of its respective Restricted Subsidiaries and the payment
of compensation to officers and employees of Holdings or any of their
respective Restricted Subsidiaries (including amounts paid pursuant to
employee benefit plans, employee stock option or similar plans), in each case
in the ordinary course of business;
(xxi) transactions with Affiliates solely in their capacity as holders of
Indebtedness or Equity Interests of Holdings or any of its Subsidiaries, so
long as such transaction is with all holders of such class (and there are such
non-Affiliate holders) and such Affiliates are treated no more favorably than
all other holders of such class generally; and
(xxii) the existence of, or the performance by Holdings or any of its
Restricted Subsidiaries of their obligations under the terms of, any customary
registration rights agreement to which they are a party or become a party in
the future.
(xxiii) investments by any of the Investors in securities of Holdings or
any of its Restricted Subsidiaries (and any payment of out-of-pocket expenses
incurred by such Investors in
-174-
AmericasActive:19663285.13
-------------------------------------------------------------------------------
connection therewith) so long as the investment is being offered generally to
other investors on the same or more favorable terms;
(xxiv) transactions with joint ventures entered into in the ordinary course
of business (including any cash management activities related thereto);
(xxv) any lease entered into between Holdings or any of its Restricted
Subsidiaries, as lessee and any Affiliate of Holdings, as lessor, in the
ordinary course of business; and
(xxvi) intellectual property licenses in the ordinary course of business.
10.2.16
Plans
. Establish or become party to any Pension Plan, Canadian Pension Plan,
Multiemployer Plan, Canadian Multi-Employer Plan or any Plan providing for
medical or life insurance benefits with respect to terminated or retired
employees, other than any in existence on the First Amendment Effective Date
to which any Covenant Party or its Affiliate or ERISA Affiliate is a party, or
amend any Pension Plan, Canadian Pension Plan, Multi-Employer Plan, Canadian
Multi-Employer Plan, or any rights or entitlements, or the actuarial
assumptions used thereunder, in a manner that would or would reasonably be
expected to cause a material increase in any Covenant Party's or its
Affiliate's or ERISA Affiliate's liabilities thereunder (contingent or
otherwise), except and to the extent (i) required by applicable Laws or a
collective bargaining agreement, (ii) as the direct result of the consummation
of any acquisition or (iii) if consented to in writing by Required Lenders or
any such event could not reasonably be expected to materially and adversely
affect the Lenders. No Covenant Party, as a Canadian Pension Plan sponsor or
otherwise, shall, nor shall it permit, the wind up and/or termination of any
Canadian Pension Plan unless it gives Agent 30 days prior written notice of
such wind up or termination.
10.2.17
Certain Amendments
. Amend, supplement or otherwise modify any document, instrument or agreement
relating to the (a) Fixed Asset Facility if such modification is prohibited by
the Intercreditor Agreement or (b) Secured Equivalent Investment Equivalent
Debt Document if such modification is prohibited by the applicable
intercreditor agreement, if such modification is materially adverse to the
interests of any of (i) the Loan Parties, (ii) the Agent or (iii) the Lenders,
including, any amendments that would affect the non-recourse nature thereof.
10.3
Financial Covenant
. As long as any Commitments or Obligations (other than indemnity obligations
that are not currently due and payable) are outstanding:
10.3.1
Fixed Charge Coverage Ratio
. Parent and its Restricted Subsidiaries on a consolidated basis shall
maintain a Fixed Charge Coverage Ratio (as calculated on a consolidated basis)
of at least 1.0 to 1.0 for each Fixed Charge Coverage Ratio Test Period ending
during any Financial Covenant Trigger Period and on the date of the occurrence
of the trigger for the applicable Financial Covenant Trigger Period measured
for the most recent period for which financial statements were delivered
hereunder prior to the Financial Covenant Trigger Period.
-175-
AmericasActive:19663285.13
-------------------------------------------------------------------------------
SECTION 11. EVENTS OF DEFAULT; REMEDIES ON DEFAULT
11.1
Events of Default
.
Each of the following shall be an "
Event of Default
" hereunder, if the same shall occur for any reason whatsoever, whether
voluntary or involuntary, by operation of law or otherwise:
(a) A Loan Party fails to (i) pay when and as required to be paid herein,
any amount of principal of any Loan or any reimbursement obligation under any
drawn Letter of Credit or deposit any funds as Cash Collateral in respect of
LC Obligations, or (ii) pay within three Business Days after the same becomes
due, any interest on any Loan or on any reimbursement obligation under any
drawn Letter of Credit, or (iii) pay within five Business Days after the same
becomes due, any other amount payable hereunder or under any other Loan
Document;
(b) Any representation, warranty or other written statement of a Loan Party
made in connection with any Loan Documents or transactions contemplated
thereby is incorrect or misleading in any material respect when given;
(c) (x) A Loan Party breaches or fails to perform any covenant contained in
Sections 8.1, 10.1.3(d), 10.2
or
10.3
, or (y) a Loan Party breaches or fails to perform any covenant contained in
Sections 8.2.4, 8.6.2(a)(1)
or
(b)
or
10.1.1(a)
, and such breach or failure as referenced in this clause (y) is not cured
within five (5) days after a Responsible Officer of such Loan Party has
knowledge thereof or receives notice thereof from Agent, whichever is sooner;
(d) A Loan Party breaches or fails to perform any other covenant contained
in any Loan Documents, and such breach or failure is not cured within thirty
(30) days after a Responsible Officer of such Loan Party has knowledge thereof
or receives notice thereof from Agent, whichever is sooner;
(e) A Guarantor repudiates, revokes or attempts to revoke, in writing, its
Guarantee; a Loan Party contests the validity or enforceability of any Loan
Document or any Obligations; or the perfection or priority of any Lien on any
material portion of the Collateral granted or purported to be granted to Agent
or any Loan Document ceases to be in full force or effect for any reason
(other than a waiver or release by Agent and Lenders (or Required Lenders, if
applicable), or on any Collateral for which perfection is not required
hereunder or under any Loan Document, or any action solely in the control of
Agent);
(f) Any breach or default of a Loan Party occurs under any document,
instrument or agreement to which it is a party or by which it or any of its
Properties is bound, relating to any Indebtedness (other than the Obligations)
in excess of the Dollar Equivalent of $35,000,000, if the effect of such
breach or default is to permit the holder or holders of such Indebtedness to
cause the maturity of such Indebtedness to be accelerated or demanded, or
required to be repurchased or redeemed due to such breach;
(g) Any judgment or order for the payment of money is entered against a
Loan Party in an amount that exceeds, individually or cumulatively with all
unsatisfied judgments or orders against all Loan Parties, the Dollar
Equivalent of $35,000,000 (in each case, net of any insurance coverage
therefor which has not been denied in writing), unless a stay of enforcement
of such judgment or order is in
-176-
AmericasActive:19663285.13
-------------------------------------------------------------------------------
effect, by reason of a pending appeal (and, where applicable, the posting of
any necessary bond) or otherwise;
(h) A loss, theft, damage or destruction occurs with respect to any
Collateral if the amount not covered by insurance exceeds the Dollar
Equivalent of $35,000,000;
(i) Any Loan Party generally fails to pay or admits in writing its
inability or refusal to pay, in each case, its debts as they become due; an
Insolvency Proceeding is commenced by a Loan Party; a Loan Party agrees to,
commences or is subject to any liquidation, dissolution or winding up of its
affairs (except as permitted pursuant to
Section 10.2.8
); the Canadian Facility Loan Parties (excluding the U.S. Facility Loan
Parties), taken as a whole, or the U.S. Facility Loan Parties, in each case
taken as a whole, are not Solvent; a Loan Party makes an offer of settlement,
extension or composition to its unsecured creditors generally; a trustee is
appointed to take possession of any substantial property of or to operate any
material portion of the business of a Loan Party; or an Insolvency Proceeding
is commenced against a Loan Party and either (1) such Loan Party consents to
institution of the proceeding, (2) the petition commencing the proceeding is
not timely contested by such Loan Party, (3) the petition is not dismissed
within sixty (60) days after filing, or (4) an order for relief is entered in
the proceeding;
(j) (i) (A) An ERISA Event occurs with respect to a Pension Plan or
Multiemployer Plan that has resulted or could reasonably be expected to result
in liability of a Loan Party or ERISA Affiliate to a Pension Plan,
Multiemployer Plan, the PBGC or IRS, or which would constitute or could
reasonably be expected to constitute grounds for appointment of a trustee for
or termination by the PBGC of any Pension Plan or Multiemployer Plan; (B) a
Loan Party or ERISA Affiliate fails to pay when due any installment payment
with respect to its withdrawal liability under Section 4201 of ERISA under a
Multiemployer Plan; (C) the "funding target attainment percentage" (within the
meaning of Code Section 430) ("
FTAP
") for any plan year of a Pension Plan falls below the FTAP of such Pension
Plan as of the First Amendment Effective Date; or (D) the amount of unfunded
post-retirement benefit liabilities, determined in accordance with ASC 715-60,
that have resulted or could reasonably be expected to result in liability of a
Loan Party or its Affiliate or ERISA Affiliate increases relative to the
amount of such liabilities as of the First Amendment Effective Date; (ii) a
Termination Event occurs; (iii) any Canadian Domiciled Loan Party is in
default with respect to any required contributions to a Canadian Pension Plan;
or (iv) any Lien arises (save for contribution amounts not yet due) in
connection with any Canadian Pension Plan, provided the events set forth in
clauses (i)
,
(ii)
,
(iii)
and
(iv)
(whether or not in existence as of the First Amendment Effective Date),
individually or in the aggregate, could reasonably be expected to result in a
Material Adverse Effect;
(k) A Change of Control occurs;
(l) Any subordination provision in any Junior Indebtedness in a principal
amount of $35,000,000, or any subordination provision in any Guarantee by any
Loan Party of any Junior Indebtedness, shall cease to be in full force and
effect, or any Loan Party shall contest in any manner the validity, binding
nature or enforceability of any such provision or a proceeding shall be
commenced by any subordinating party or any Governmental Authority having
jurisdiction over any of them, seeking to establish the invalidity or
unenforceability thereof; or
-177-
AmericasActive:19663285.13
-------------------------------------------------------------------------------
(m) At any time that any Permitted Secured Debt or Secured Incremental
Equivalent Debt is outstanding, the Intercreditor Agreement or other
applicable intercreditor agreement shall cease to be in full force or effect
(except in accordance with its terms) or any of the Loan Parties or the
Permitted Secured Debt Collateral Agent shall challenge, deny or disaffirm
their respective obligations thereunder.
11.2
Remedies upon Default
.
If an Event of Default described in
Section 11.1(i)
occurs and is continuing with respect to any Loan Party, then to the extent
permitted by applicable Law, all Obligations (other than Secured Bank Product
Obligations) shall become automatically due and payable and all Commitments
shall terminate, without any action by Agent or notice of any kind. In
addition, or if any other Event of Default exists, Agent may in its discretion
(and shall upon written direction of Required Lenders) do any one or more of
the following from time to time: declare any Obligations (other than Secured
Bank Product Obligations) immediately due and payable, whereupon they shall be
due and payable without diligence, presentment, demand, protest or notice of
any kind, all of which are hereby waived by the Loan Parties to the fullest
extent permitted by law; terminate, reduce or condition any Commitment, or
make any adjustment to the Borrowing Base; require the Loan Parties to Cash
Collateralize LC Obligations and Secured Bank Product Obligations, and, if the
Loan Parties fail promptly to deposit such Cash Collateral, Agent may (and
shall upon the direction of Required Lenders) advance the required Cash
Collateral as Loans (whether or not an Overadvance exists or is created
thereby, or the conditions in
Section 6
are satisfied); and exercise any other rights or remedies afforded under any
agreement, by law, at equity or otherwise, including the rights and remedies
of a secured party under the UCC and the PPSA. Such rights and remedies
include the rights to (i) take possession of any Collateral; (ii) require the
Loan Parties to assemble Collateral, at the Loan Parties' expense, and make it
available to Agent at a place designated by Agent; (iii) enter any premises
where Collateral is located and store Collateral on such premises until sold
(and if the premises are owned or leased by a Loan Party, the Loan Parties
agree not to charge for such storage); and (iv) sell or otherwise dispose of
any Collateral in its then condition, or after any further manufacturing or
processing thereof, at public or private sale, with such notice as may be
required by applicable Law, in lots or in bulk, at such locations, all as
Agent, in its discretion, deems advisable. Each Loan Party agrees that ten
(10) days' notice of any proposed sale or other disposition of Collateral by
Agent shall be reasonable. Agent shall have the right to conduct such sales on
any Loan Party's premises, without charge, and such sales may be adjourned
from time to time in accordance with applicable Law. Agent shall have the
right to sell, lease or otherwise dispose of any Collateral for cash, credit
or any combination thereof, and Agent may purchase any Collateral at public
or, if permitted by law, private sale and, in lieu of actual payment of the
purchase price, may set off the amount of such price against the Obligations.
11.3
License
.
Effective upon the occurrence and during the continuance of an Event of
Default, Agent is hereby granted an irrevocable, worldwide, non-exclusive
right and license, including the right to sub-license (without payment of
Royalty or other compensation to any Person) under any and all Intellectual
Property owned or sublicensable by the Loan Parties, including computer
hardware and software, trade secrets, brochures, customer lists, promotional
and advertising materials, labels, packaging materials and other property, to
use and exercise all other rights under such Intellectual Property in
connection with advertising for sale, marketing, selling, collecting, making,
having made, completing manufacture of, or otherwise exercising any rights or
remedies with respect to, any Collateral. Each Loan Party's rights and
interests under such Intellectual Property, and Agent's use thereof under this
Section, shall inure solely to such Loan Party's benefit. With respect to any
trademarks or similar property included in the license granted hereunder,
Agent shall ensure that the
-178-
AmericasActive:19663285.13
-------------------------------------------------------------------------------
quality of the goods and services with which it uses such trademark or similar
property shall be consistent with the quality of the goods and services as
manufactured, marketed and sold by the Loan Parties. Upon Agent's reasonable
request, each Mexican Guarantor shall execute and deliver any instrument,
document or agreement that Agent may reasonably request to register such
license.
11.4
Setoff
.
At any time after the occurrence and during the continuance of an Event of
Default, Agent, Issuing Banks, Lenders, and any of their Affiliates are
authorized, to the fullest extent permitted by applicable Law, to set off and
apply any and all deposits (general or special, time or demand, provisional or
final, in whatever currency) at any time held and other obligations (in
whatever currency) at any time owing by Agent, such Issuing Bank, such Lender
or such Affiliate to or for the credit or the account of a Loan Party against
any Obligations then due, irrespective of whether or not Agent, such Issuing
Bank, such Lender or such Affiliate shall have made any demand under this
Agreement or any other Loan Document and although such Obligations may be
contingent or unmatured or are owed to a branch or office of Agent, such
Issuing Bank, such Lender or such Affiliate different from the branch or
office holding such deposit or obligated on such indebtedness. The rights of
Agent, each Issuing Bank, each Lender and each such Affiliate under this
Section 11.4
are in addition to other rights and remedies (including other rights of
setoff) that such Person may have.
11.5
Remedies Cumulative; No Waiver
.
11.5.1
Cumulative Rights
. All agreements, warranties, guarantees, indemnities and other undertakings
of the Loan Parties under the Loan Documents are cumulative and not in
derogation of each other. The rights and remedies of Agent and Lenders are
cumulative, may be exercised at any time and from time to time, concurrently
or in any order, and are not exclusive of any other rights or remedies
available by agreement, by law, at equity or otherwise. All such rights and
remedies shall continue in full force and effect until Full Payment of all
Obligations.
11.5.2
Waivers
. No waiver or course of dealing shall be established by (a) the failure or
delay of Agent or any Lender to require strict performance by the Loan Parties
with any terms of the Loan Documents, or to exercise any rights or remedies
with respect to Collateral or otherwise; (b) the making of any Loan or
issuance of any Letter of Credit during a Default, Event of Default or other
failure to satisfy any conditions precedent; or (c) acceptance by Agent or any
Lender of any payment or performance by a Loan Party under any Loan Documents
in a manner other than that specified therein. It is expressly acknowledged by
the Loan Parties that any failure to satisfy a financial covenant on a
measurement date shall not be cured or remedied by satisfaction of such
covenant on a subsequent date.
11.6
Judgment Currency
.
If, for the purpose of obtaining judgment in any court or obtaining an order
enforcing a judgment, it becomes necessary to convert any amount due under
this Agreement in Dollars or in any other currency (hereinafter in this
Section 11.6
called the "first currency") into any other currency (hereinafter in this
Section 11.6
called the "second currency"), then the conversion shall be made at Agent's
spot rate of exchange for buying the first currency with the second currency
prevailing at Agent's close of business on the Business Day next preceding the
day on which the judgment is given or (as the case may be) the order is made.
Any payment made by a Loan Party to any Secured Party pursuant to this
Agreement in the second currency shall constitute a discharge of the
obligations of any applicable Loan Parties to pay to such Secured Party any
amount originally due to the Secured Party in the first currency under this
Agreement only to the extent of the amount of the first
-179-
AmericasActive:19663285.13
-------------------------------------------------------------------------------
currency which such Secured Party is able, on the date of the receipt by it of
such payment in any second currency, to purchase, in accordance with such
Secured Party's normal banking procedures, with the amount of such second
currency so received. If the amount of the first currency falls short of the
amount originally due to such Secured Party in the first currency under this
Agreement, the Loan Parties agree that they will indemnify each Secured Party
against and save such Secured Party harmless from any shortfall so arising.
This indemnity shall constitute an obligation of each such Loan Party separate
and independent from the other obligations contained in this Agreement, shall
give rise to a separate and independent cause of action and shall continue in
full force and effect notwithstanding any judgment or order for a liquidated
sum or sums in respect of amounts due to any Secured Party under any Loan
Documents or under any such judgment or order. Any such shortfall shall be
deemed to constitute a loss suffered by such Secured Party and the Loan
Parties shall not be entitled to require any proof or evidence of any actual
loss. If the amount of the first currency exceeds the amount originally due to
a Secured Party in the first currency under this Agreement, such Secured Party
shall promptly remit such excess to the Loan Parties. The covenants contained
in this
Section 11.6
shall survive the Full Payment of the Obligations under this Agreement.
SECTION 12. AGENT
12.1
Appointment, Authority and Duties of Agent
.
12.1.1
Appointment and Authority
.
(a) Each Secured Party appoints and designates Bank of America as Agent
under all Loan Documents. Agent may, and each Secured Party authorizes Agent
to, enter into all Loan Documents to which Agent is intended to be a party and
accept all Security Documents, for the benefit of Secured Parties. Any action
taken by Agent in accordance with the provisions of the Loan Documents, and
the exercise by Agent of any rights or remedies set forth therein, together
with all other powers reasonably incidental thereto, shall be authorized by
and binding upon all Secured Parties. Without limiting the generality of the
foregoing, Agent shall have the sole and exclusive authority to (a) act as the
disbursing and collecting agent for Secured Parties with respect to all
payments and collections arising in connection with the Loan Documents; (b)
execute and deliver as Agent each Loan Document, including any intercreditor
or subordination agreement, and accept delivery of each Loan Document; (c) act
as collateral agent for Secured Parties for purposes of perfecting and
administering Liens under the Loan Documents, and for all other purposes
stated therein; (d) manage, supervise or otherwise deal with Collateral; and
(e) take any Enforcement Action or otherwise exercise any rights or remedies
with respect to any Collateral or under any Loan Documents, applicable Law or
otherwise. The duties of Agent are ministerial and administrative in nature
only, and Agent shall not have a fiduciary relationship with any Secured
Party, Participant or other Person, by reason of any Loan Document or any
transaction relating thereto. Agent alone shall be authorized to determine (in
accordance with the terms hereof and the other Loan Documents) whether any
Account or Inventory constitutes an Eligible Account or Eligible Inventory,
whether to impose or release any reserve, or whether any conditions to funding
or to issuance of a Letter of Credit have been satisfied, which determinations
and judgments, if exercised in good faith, shall exonerate Agent from
liability to any Secured Party or other Person for any error in judgment.
(b) [Reserved].
-180-
AmericasActive:19663285.13
-------------------------------------------------------------------------------
(c) Without limiting the powers of the Agent, for the purposes of holding
any hypothec granted pursuant to the laws of the Province of Quebec to secure
the payment and performance of any and all Obligations by any Loan Party, each
of the Secured Parties that is a party hereto hereby irrevocably appoints and
authorizes the Agent and ratifies the appointment and authorization of the
Agent, to act as the hypothecary representative, as contemplated under Article
2692 of the Civil Code of Quebec, for all present and future Secured Parties
(in such capacity, the "Hypothecary Representative"), and to enter into, to
take and to hold on their behalf, and for their benefit, any hypothec, and to
exercise such powers and duties that are conferred upon the Hypothecary
Representative under any related deed of hypothec. The Hypothecary
Representative shall: (a) have the sole and exclusive right and authority to
exercise, except as may be otherwise specifically restricted by the terms
hereof, all rights and remedies given to the Hypothecary Representative
pursuant to any such deed of hypothec and applicable law, and (b) benefit from
and be subject to all provisions hereof with respect to the Agent mutatis
mutandis, including, without limitation, all such provisions with respect to
the liability or responsibility to and indemnification by the Secured Parties
and Loan Parties. Any person who becomes a Secured Party shall, by its
execution of an Assignment and Acceptance Agreement, be deemed to have
consented to and confirmed the Hypothecary Representative as the person acting
as hypothecary representative holding the aforesaid hypothecs as aforesaid and
to have ratified, as of the date it becomes a Secured Party, all actions taken
by the Hypothecary Representative in such capacity. The substitution of the
Agent pursuant to the provisions of this Section 12 also constitute the
substitution of the Hypothecary Representative.
12.1.2
Duties
. The title of "Agent" is used solely as a matter of market custom and the
duties of Agent are administrative in nature only. Agent has no duties except
those expressly set forth in the Loan Documents, and in no event does Agent
have any fiduciary or implied duty to or relationship with any Secured Party
or other Person by reason of any Loan Document or related transaction. The
conferral upon Agent of any right shall not imply a duty to exercise such
right, unless instructed to do so by Lenders in accordance with this Agreement.
12.1.3
Agent Professionals
. Agent may perform its duties through agents and employees. Agent may consult
with and employ Agent Professionals, and shall be entitled to act upon, and
shall be fully protected in any action taken in good faith reliance upon, any
advice given by an Agent Professional. Agent shall not be responsible for the
negligence or misconduct of any agents, employees or Agent Professionals
selected by it with reasonable care.
12.1.4
Instructions of Required Lenders
. The rights and remedies conferred upon Agent under the Loan Documents may be
exercised without the necessity of joinder of any other party, unless required
by applicable Law. In determining compliance with a condition for any action
hereunder, including satisfaction of any condition in
Section 6
, Agent may presume that the condition is satisfactory to a Secured Party
unless Agent has received notice to the contrary from such Secured Party
before Agent takes the action. Agent may request instructions from Required
Lenders, Required Facility Lenders or other Secured Parties with respect to
any act (including the failure to act) in connection with any Loan Documents
or Collateral, and may seek assurances to its satisfaction from Secured
Parties of their indemnification obligations against Claims that could be
incurred by Agent. Agent may refrain from any act until it has received such
instructions or assurances, and shall not incur liability to any Person by
reason of so refraining. Instructions of Required Lenders or Required Facility
Lenders shall be binding upon all Secured Parties, and no Secured Party shall
have any right of action whatsoever
-181-
AmericasActive:19663285.13
-------------------------------------------------------------------------------
against Agent as a result of Agent acting or refraining from acting pursuant
to instructions of all Lenders, Required Lenders or Required Facility Lenders,
as applicable. Notwithstanding the foregoing, instructions by and consent of
specific parties shall be required to the extent provided in
Section 14.1.1
. In no event shall Agent be required to take any action that, in its opinion,
is contrary to applicable Law or any Loan Documents or could subject any Agent
Indemnitee to personal liability.
12.2
Agreements Regarding Collateral, Borrower Materials and Intercreditor Matters
.
12.2.1
Lien Releases; Care of Collateral; Intercreditor Matters
.
(a) Canadian Lenders and the applicable Secured Parties (i) authorize Agent
to, and Agent shall, release any Lien or guarantee with respect to any
Canadian Facility Collateral (a) upon Full Payment of the Canadian Facility
Obligations; (b) that is the subject of a disposition, merger, amalgamation or
other combination or transaction, or a Lien which Loan Party Agent certifies
in writing to Agent is not prohibited hereunder (and Agent may rely
conclusively on any such certificate without further inquiry); or (c) with the
written consent of all Canadian Lenders (or such lesser number as may be
required by
Section 14.1
) and (ii) authorize Agent to, and upon Agent's reasonable determination of
the appropriateness to do so, Agent shall, subordinate their Liens to any
purchase money lien permitted hereunder.
(b) U.S. Lenders and the applicable Secured Parties (i) authorize Agent to,
and Agent shall, release any Lien or guarantee with respect to any U.S.
Facility Collateral (a) upon Full Payment of the U.S. Facility Obligations;
(b) that is the subject of a disposition or other transaction which Loan Party
Agent certifies in writing to Agent is not prohibited hereunder (and Agent may
rely conclusively on any such certificate without further inquiry); or (c)
with the written consent of all U.S. Lenders or such lesser number as may be
required by
Section 14.1
) and (ii) authorize Agent to, and upon Agent's reasonable determination of
the appropriateness to do so, Agent shall, subordinate their Liens to any
purchase money lien permitted hereunder.
(c) Agent shall have no obligation to assure that any Collateral exists or
is owned by a Loan Party, or is cared for, protected, insured or encumbered,
nor to assure that Agent's Liens have been properly created, perfected or
enforced, or are entitled to any particular priority, nor to exercise any duty
of care with respect to any Collateral.
(d) (i) U.S. Lenders and the applicable Secured Parties authorize Agent
to enter into the Intercreditor Agreement, (ii) U.S. Lenders and the
applicable Secured Parties authorize Agent to enter into other intercreditor
agreements (in a form not materially less favorable, taken as a whole, to the
U.S. Lenders than the terms of the Intercreditor Agreement, in the case of
Indebtedness with Junior Lien Priority, or in a form customary for
intercreditor agreements or collateral trust agreements in light of then
prevailing market conditions, in the case of Other Pari Passu Lien
Obligations), subordination agreements and amendments to the Security
Documents to reflect arrangements with respect to any obligations (other than
the U.S. Facility Obligations) permitted to be incurred hereunder and secured
by Liens permitted to be incurred hereunder on all or a portion of the
Collateral securing the U.S. Facility Obligations, on terms acceptable to
Agent, and (iii) Canadian Lenders and the applicable Secured Parties authorize
Agent to enter into other intercreditor agreements (in a form not materially
less favorable, taken as a whole, to the Canadian Lenders than the terms of
the Intercreditor Agreement, in the case of
-182-
AmericasActive:19663285.13
-------------------------------------------------------------------------------
Indebtedness with Junior Lien Priority, or in a form customary for
intercreditor agreements or collateral trust agreements in light of then
prevailing market conditions, in the case of Other Pari Passu Lien
Obligations), subordination agreements and amendments to the Security
Documents to reflect arrangements with respect to any obligations (other than
the Canadian Facility Obligations) permitted to be incurred hereunder and
secured by Liens permitted to be incurred hereunder on all or a portion of the
Collateral securing the Canadian Facility Obligations, on terms acceptable to
Agent.
(e) Upon no less than ten (10) Business Days prior written notice (the "
Tooling A/R Removal Notice
") to Agent from a Responsible Officer of the Loan Party Agent, the U.S.
Borrower and the Canadian Borrower may, at their option, request that upon and
after the effective date indicated in such notice that: (i) Eligible Tooling
Accounts no longer be included in either of the U.S. Borrowing Base or the
Canadian Borrowing Base and (ii) the related U.S. Tooling Vendor Reserve and
the Canadian Tooling Vendor Reserve also no longer be included in the U.S.
Borrowing Base or Canadian Borrowing Base, as applicable. Any Tooling A/R
Removal Notice shall be irrevocable when given, and each of the U.S. Borrower
and the Canadian Borrower agree to deliver to Agent, upon request, an updated
Borrowing Base Certificate giving effect to the changes specified in the
Tooling A/R Removal Notice. Upon the requested effective date indicated in
the Tooling A/R Removal Notice, it is agreed that: (A) Eligible Tooling
Accounts shall automatically, and without any further action required by any
Person, no longer be included in either of the U.S. Borrowing Base or the
Canadian Borrowing Base (nor shall the related U.S. Tooling Vendor Reserve nor
the Canadian Tooling Vendor Reserve, as applicable, be thereafter included)
and (B) the Agent shall, at the sole expense of the Loan Party Agent,
terminate its Lien on all Accounts of the U.S. Borrower, the Canadian Borrower
and each of their respective Subsidiaries, which in each case arise from the
sale of tooling ("
Tooling A/R
"), and shall execute and deliver, without recourse, representation or
warranty, all releases and other documents as reasonably requested (including
partial-release UCC-3 financing statements, and comparable instruments under
the PPSA) to evidence such release of Liens on Tooling A/R.
12.2.2
Possession of Collateral
.
(a) Agent, Canadian Lenders and the applicable Secured Parties appoint each
Canadian Lender as agent (for the benefit of Canadian Facility Secured
Parties) for the purpose of perfecting Liens in any Canadian Facility
Collateral held or controlled by such Canadian Lender, to the extent such
Liens are perfected by possession or control.
(b) Agent, the U.S. Lenders and the applicable Secured Parties appoint each
U.S. Lender as agent (for the benefit of U.S. Facility Secured Parties) for
the purpose of perfecting Liens in any U.S. Facility Collateral held or
controlled by such U.S. Lender, to the extent such Liens are perfected by
possession or control.
(c) If any Lender obtains possession or control of any Collateral, it shall
notify Agent thereof and, promptly upon Agent's request, deliver such
Collateral to Agent or otherwise deal with it in accordance with Agent's
instructions.
-183-
AmericasActive:19663285.13
-------------------------------------------------------------------------------
12.2.3
Reports
. Agent shall promptly provide to Lenders, when complete, any field audit,
examination or appraisal report prepared for Agent with respect to any Loan
Party or Collateral ("Report"). Reports and other Borrower Materials may be
made available to Lenders by providing access to them on the Platform, but
Agent shall not be responsible for system failures or access issues that may
occur from time to time. Each Lender agrees (a) that Reports are not intended
to be comprehensive audits or examinations, and that Agent or any other Person
performing an audit or examination will inspect only specific information
regarding the Obligations or Collateral and will rely significantly upon
Borrowers' books, records and representations; (b) that Agent makes no
representation or warranty as to the accuracy or completeness of any Borrower
Materials and shall not be liable for any information contained in or omitted
from any Borrower Materials, including any Report; and (c) to keep all
Borrower Materials confidential and strictly for such Lender's internal use,
not to distribute any Report or other Borrower Materials (or the contents
thereof) to any Person (except to such Lender's Participants, attorneys and
accountants), and to use all Borrower Materials solely for administration of
the Obligations. Each Lender shall indemnify and hold harmless Agent and any
other Person preparing a Report from any action such Lender may take as a
result of or any conclusion it may draw from any Borrower Materials, as well
as from any Claims arising as a direct or indirect result of Agent furnishing
same to such Lender, via the Platform or otherwise.
12.3
Reliance By Agent
.
Agent shall be entitled to rely, and shall be fully protected in relying, upon
any certification, notice or other communication (including those by
telephone, telex, telegram, telecopy or e-mail) believed by it to be genuine
and correct and to have been signed, sent or made by the proper Person. Agent
shall have a reasonable and practicable amount of time to act upon any
instruction, notice or other communication under any Loan Document, and shall
not be liable for any delay in acting.
12.4
Action Upon Default
.
Agent shall not be deemed to have knowledge of any Default or Event of
Default, or of any failure to satisfy any conditions in Section 6, unless it
has received written notice from a Borrower or Required Lenders specifying the
occurrence and nature thereof. If any Lender acquires knowledge of a Default,
Event of Default or failure of such conditions, it shall promptly notify Agent
thereof in writing. Each Secured Party agrees that, except as otherwise
provided in any Loan Documents or with the written consent of Agent and
Required Lenders, it will not take any Enforcement Action, accelerate
Obligations (other than Secured Bank Product Obligations), or exercise any
right that it might otherwise have under applicable Law to credit bid at
foreclosure sales, UCC or PPSA sales or other dispositions of Collateral, or
to assert any rights relating to any Collateral.
12.5
Ratable Sharing
.
If any Lender obtains any payment or reduction of any Obligation, whether
through set-off, lien enforcement or otherwise, in excess of its share of such
Obligation, determined on a Pro Rata basis or in accordance with
Section 5.5.1
, as applicable, such Lender shall forthwith purchase from Agent, the
applicable Issuing Bank and the other Applicable Lenders such participations
in the affected Obligation as are necessary to share the excess payment or
reduction on a Pro Rata basis or in accordance with
Section 5.5.1
, as applicable. If any of such payment or reduction is thereafter recovered
from the purchasing Lender, the purchase shall be rescinded and the purchase
price restored to the extent of such recovery, but without interest. No Lender
shall set off against any DACA Deposit Account or Dominion Account without the
prior consent of Agent. Notwithstanding the foregoing, if a Defaulting Lender
obtains a payment or reduction of any Obligation, it shall immediately turn
over the amount thereof to Agent for application under
Section 4.2.2
and it shall provide a written
-184-
AmericasActive:19663285.13
-------------------------------------------------------------------------------
statement to Agent describing the Obligation affected by such payment or
reduction. No Lender shall set off against any Dominion Account without
Agent's prior consent.
For the avoidance of doubt, this
Section 12.5
shall not restrict (x) the repayment in full of the Obligations due and
payable to the Non-Extending Lender on the Facility Termination Date
applicable to such Non-Extending Lender and/or (y) the non-ratable termination
of the Non-Extending Lender's Commitments on the Facility Termination Date (or
on an earlier date pursuant to and in accordance with
Section 2.1.4(a)
).
12.6
Indemnification
. EXCEPT FOR LOSSES DETERMINED IN A FINAL, NON-APPEALABLE JUDGMENT BY A COURT
OF COMPETENT JURISDICTION TO RESULT FROM AN AGENT INDEMNITEE'S OR ISSUING BANK
INDEMNITEE'S ACTUAL GROSS NEGLIGENCE OR WILLFUL MISCONDUCT, AS DETERMINED BY A
FINAL, NON-APPEALABLE JUDGMENT OF A COURT OF COMPETENT JURISDICTION, EACH
LENDER SHALL INDEMNIFY AND HOLD HARMLESS AGENT INDEMNITEES AND ISSUING BANK
INDEMNITEES, TO THE EXTENT NOT REIMBURSED BY THE LOAN PARTIES, ON A PRO RATA
BASIS, AGAINST ALL CLAIMS THAT MAY BE INCURRED BY OR ASSERTED AGAINST ANY SUCH
INDEMNITEE, PROVIDED THAT ANY CLAIM AGAINST AN AGENT INDEMNITEE RELATES TO OR
ARISES FROM ITS ACTING AS OR FOR AGENT (IN THE CAPACITY OF AGENT). In Agent's
discretion, it may reserve for any Claims made against an Agent Indemnitee or
Issuing Bank Indemnitee, and may satisfy any judgment, order or settlement
relating thereto, from proceeds of Collateral prior to making any distribution
of Collateral proceeds to Secured Parties. If Agent is sued by any Creditor
Representative, debtor-in-possession or other Person for any alleged
preference or fraudulent transfer, then any monies paid by Agent in settlement
or satisfaction of such proceeding, together with all interest, costs and
expenses (including attorneys' fees) incurred in the defense of same, shall be
promptly reimbursed to Agent by each Lender to the extent of its Pro Rata
share.
12.7
Limitation on Responsibilities of Agent
.
Agent shall not be liable to any Secured Party for any action taken or omitted
to be taken under the Loan Documents, except for losses determined in a final,
non-appealable judgment by a court of competent jurisdiction to result from
Agent's actual gross negligence or willful misconduct. Agent does not assume
any responsibility for any failure or delay in performance or any breach by
any Loan Party, Lender or other Secured Party of any obligations under the
Loan Documents. Agent does not make any express or implied warranty,
representation or guarantee to Secured Parties with respect to any
Obligations, Collateral, Loan Documents or Loan Party. No Agent Indemnitee
shall be responsible to Secured Parties for any recitals, statements,
information, representations or warranties contained in any Loan Documents or
Borrower Materials; the execution, validity, genuineness, effectiveness or
enforceability of any Loan Documents; the genuineness, enforceability,
collectability, value, sufficiency, location or existence of any Collateral,
or the validity, extent, perfection or priority of any Lien therein; the
validity, enforceability or collectability of any Obligations; or the assets,
liabilities, financial condition, results of operations, business,
creditworthiness or legal status of any Loan Party or Account Debtor. No Agent
Indemnitee shall have any obligation to any Secured Party to ascertain or
inquire into the existence of any Default or Event of Default, the observance
by any Loan Party of any terms of the Loan Documents, or the satisfaction of
any conditions precedent contained in any Loan Documents.
-185-
AmericasActive:19663285.13
-------------------------------------------------------------------------------
12.8
Successor Agent and Co-Agents
.
12.8.1
Resignation; Successor Agent
. Subject to the appointment and acceptance of a successor Agent as provided
below, Agent may resign at any time by giving at least thirty (30) days
written notice thereof to Lenders and Loan Party Agent Upon receipt of such
notice, Required Lenders shall have the right to appoint a successor Agent
which shall be (a) a U.S. Lender or an Affiliate of a U.S. Lender; or (b) a
financial institution reasonably acceptable to Required Lenders and (provided
no Default or Event of Default exists) Borrowers. If no successor agent is
appointed prior to the effective date of Agent's resignation, then Agent may
appoint a successor agent that is a financial institution acceptable to it,
which shall be a Lender unless no Lender accepts the role. Upon acceptance by
a successor Agent of its appointment hereunder, such successor Agent shall
thereupon succeed to and become vested with all the powers and duties of the
retiring Agent without further act, and the retiring Agent shall be discharged
from its duties and obligations hereunder but shall continue to have the
benefits of the indemnification set forth in
Sections 12.6
and
14.2
. Notwithstanding any Agent's resignation, the provisions of this
Section 12
shall continue in effect for its benefit with respect to any actions taken or
omitted to be taken by it while Agent. Any successor to Bank of America by
merger or acquisition of stock or this loan shall continue to be Agent
hereunder without further act on the part of any Secured Party or Loan Party.
12.8.2
Co-Collateral Agent
. If necessary or appropriate under applicable Law, Agent may appoint a Person
to serve as a co-collateral agent or separate collateral agent under any Loan
Document. Each right and remedy intended to be available to Agent under the
Loan Document shall also be vested in such agent. Secured Parties shall
execute and deliver any instrument, document or agreement that Agent may
request to effect such appointment. If the agent shall die, dissolve, become
incapable of acting, resign or be removed, then all the rights and remedies of
such agent, to the extent permitted by applicable Law, shall vest in and be
exercised by Agent until appointment of a new agent.
12.9
Due Diligence and Non-Reliance
.
Each Lender acknowledges and agrees that it has, independently and without
reliance upon Agent or any other Lenders, and based upon such documents,
information and analyses as it has deemed appropriate, made its own credit
analysis of each Loan Party and its own decision to enter into this Agreement
and to fund Loans and participate in LC Obligations hereunder. Each Secured
Party has made such inquiries as it feels necessary concerning the Loan
Documents, Collateral and Loan Parties. Each Secured Party acknowledges and
agrees that the other Secured Parties have made no representations or
warranties concerning any Loan Party, any Collateral or the legality,
validity, sufficiency or enforceability of any Loan Documents or Obligations.
Each Secured Party will, independently and without reliance upon any other
Secured Party, and based upon such financial statements, documents and
information as it deems appropriate at the time, continue to make and rely
upon its own credit decisions in making Loans and participating in LC
Obligations, and in taking or refraining from any action under any Loan
Documents. Except for notices, reports and other information expressly
requested by a Lender, Agent shall have no duty or responsibility to provide
any Secured Party with any notices, reports or certificates furnished to Agent
by any Loan Party or any credit or other information concerning the affairs,
financial condition, business or Properties of any Loan Party (or any of its
Affiliates) which may come into possession of Agent or its Affiliates.
-186-
AmericasActive:19663285.13
-------------------------------------------------------------------------------
12.10
Replacement of Certain Lenders
.
If a Lender (a) is a Defaulting Lender, (b) fails to give its consent to any
amendment, waiver or action for which consent of all Lenders or the
Supermajority Required Facility Lenders was required, and Required Lenders, or
Required Facility Lenders, as applicable, have consented, or (c) gives notice
under
Section 3.5
or requests compensation under
Section 3.7
, or if either Borrower is required to pay additional amounts or indemnity
payments with respect to a Lender under
Section 5.8
, then, in addition to any other rights and remedies that any Person may have,
Agent or Loan Party Agent may, by notice to such Lender within one hundred
twenty (120) days after such event (or within one hundred twenty (120) days
after receipt of a notice from such Lender claiming indemnity payments under
Section 5.8
), require such Lender to assign all of its rights and obligations under the
Loan Documents to Eligible Assignee(s) specified by Agent or Loan Party Agent,
pursuant to appropriate Assignment and Acceptance(s) and within twenty (20)
days after Agent's or Loan Party Agent's notice, as applicable;
provided
that, in the case of an assignment resulting from a claim for compensation or
indemnity payments under
Section 3.7
or
Section 5.8
, such assignment will result in a reduction of claims for compensation or
indemnity payments thereafter. Agent is irrevocably appointed as attorney-in-fac
t to execute any such Assignment and Acceptance if Lender fails to execute
same. Such Lender shall be entitled to receive, in cash, concurrently with
such assignment, all amounts owed to it under the Loan Documents, including
all principal, interest and fees through the date of assignment but excluding
any prepayment charge.
With respect to the Non-Extending Lender, Loan Party Agent may, by notice to
such Non-Extending Lender and Agent, require the Non-Extending Lender to
assign all of its rights and obligations under the Loan Documents (with
respect to all or a portion of its Loans and Commitments) to Eligible
Assignee(s) specified by Loan Party Agent, pursuant to appropriate Assignment
and Acceptance(s) in accordance with
Section 13.3
(and subject to the terms of this
Section 12.10
) and upon execution and delivery of such Assignment and Acceptance(s)
(subject to the following proviso), such Eligible Assignee(s) shall constitute
Lenders for all purposes of this Agreement and the other Loan Documents (and
not, for the avoidance of doubt, Non-Extending Lenders); provided, that any
such Assignment and Acceptance shall be conditioned upon the Non-Extending
Lender receiving, in cash, concurrently with the execution and delivery
thereof, all amounts owed to it under the Loan Documents (with respect to the
interests so assigned) at par, including all principal, interest and fees
through the date of assignment. Agent is irrevocably appointed as
attorney-in-fact to execute any such Assignment and Acceptance if the
Non-Extending Lender fails to execute the same within ten (10) Business Days
of Notice thereof. For the avoidance of doubt and notwithstanding anything to
the contrary set forth herein, any Commitments (and related Revolver Loans)
assigned from the Non-Extending Lender pursuant to this
Section 12.10
or otherwise shall, immediately upon such assignment and without any further
action of any Person, be subject to the Facility Termination Date set forth in
clause (b)
of the definition thereof.
12.11
Remittance of Payments and Collections
.
12.11.1
Remittances Generally
. All payments by any Lender to Agent shall be made by the time and on the day
set forth in this Agreement, in immediately available funds. If no time for
payment is specified or if payment is due on demand by Agent and request for
payment is made by Agent by 11:00 a.m. on a Business Day, payment shall be
made by Lender not later than 2:00 p.m. on such day, and if request is made
after 11:00 a.m., then payment shall be made by 11:00 a.m. on the next
Business Day. Payment by Agent to any Secured Party shall be made by wire
transfer, in the type of funds received by Agent. Any such payment shall be
subject to Agent's right of offset for any amounts due from such payee under
the Loan Documents.
-187-
AmericasActive:19663285.13
-------------------------------------------------------------------------------
12.11.2
Failure to Pay
. If any Secured Party fails to pay any amount when due by it to Agent
pursuant to the terms hereof, such amount shall bear interest, from the due
date until paid in full, at the rate determined by Agent as customary for
interbank compensation for two Business Days and thereafter at the Default
Rate for Floating Rate Loans. In no event shall Borrowers be entitled to
receive credit for any interest paid by a Secured Party to Agent, nor shall
any Defaulting Lender be entitled to interest on any amounts held by Agent
pursuant to
Section 4.2
.
12.11.3
Recovery of Erroneous Payments
. Without limitation of any other provision herein, if at any time Agent makes
a payment hereunder in error to any Secured Party, whether or not in respect
of an Obligation due and owing by Borrowers at such time, where such payment
is a Rescindable Amount, then in any such event each Secured Party receiving a
Rescindable Amount severally agrees to repay to Agent forthwith on demand the
Rescindable Amount received by such Secured Party in immediately available
funds in the currency so received, with interest thereon for each day from and
including the date such Rescindable Amount is received by it to but excluding
the date of repayment to Agent, at the greater of the Federal Funds Rate and a
rate determined by Agent in accordance with banking industry rules on
interbank compensation. Each Secured Party irrevocably waives any and all
defenses, including any defense of discharge for value (under which a creditor
might otherwise claim a right to retain funds mistakenly paid by a third party
in respect of a debt owed by another) or similar defense to its obligation to
return any Rescindable Amount. Agent shall inform each Secured Party promptly
upon determining that any payment made to such Secured Party was comprised, in
whole or in part, of a Rescindable Amount.
12.12
Individual Capacity
.
As a Lender, Bank of America shall have the same rights and remedies under the
Loan Documents as any other Lender, and the terms "Lenders," "Required
Lenders", "Required Facility Lenders" or any similar term shall include Bank
of America in its capacity as a Lender. Agent, Lenders and their Affiliates
may accept deposits from, lend money to, provide Bank Products to, act as
financial or other advisor to, and generally engage in any kind of business
with, Loan Parties and their Affiliates, as if they were not Agent or Lenders
hereunder, without any duty to account therefor to any Secured Party. In their
individual capacities, Agent, Lenders and their Affiliates may receive
information regarding Loan Parties, their Affiliates and their Account Debtors
(including information subject to confidentiality obligations), and shall have
no obligation to provide such information to any Secured Party.
12.13
Titles
. Each Lender, other than Bank of America, that is designated (on the cover
page of this Agreement or otherwise) by Bank of America as an "Agent,"
"Arranger" or "Bookrunner" of any type shall have no right, power or duty
under any Loan Documents other than those applicable to all Lenders, and shall
in no event have any fiduciary duty to any Secured Party.
12.14
Bank Product Providers
. Each Secured Bank Product Provider, by delivery of a notice to Agent of a
Bank Product, agrees to be bound by
Section 5.5
and this
Section 12
. Each Secured Bank Product Provider shall indemnify and hold harmless Agent
Indemnitees, to the extent not reimbursed by Loan Parties, against all Claims
that may be incurred by or asserted against any Agent Indemnitee in connection
with such provider's Secured Bank Product Obligations.
12.15
No Third Party Beneficiaries
.
This
Section 12
(other than
Section 12.2.1
,
12.8
and
12.10
) is an agreement solely among Lenders (and to the extent expressly
contemplated hereby, Lenders
-188-
AmericasActive:19663285.13
-------------------------------------------------------------------------------
and their Affiliates in their capacities as Secured Bank Product Providers)
and Agent, and shall survive Full Payment of the Obligations. This
Section 12
(other than
Section 12.2.1
,
12.8
and
12.10
) does not confer any rights or benefits upon the Loan Parties or any other
Person. As between the Loan Parties and Agent, any action that Agent may take
under any Loan Documents or with respect to any Obligations shall be
conclusively presumed to have been authorized and directed by Secured Parties.
12.16
Certain ERISA Matters
.
12.16.1
Lender Representations
. Each Lender represents and warrants, as of the date it became a Lender party
hereto, and covenants, from the date it became a Lender party hereto to the
date it ceases being a Lender party hereto, for the benefit of, Agent and not,
for the avoidance of doubt, to or for the benefit of the Loan Parties, that at
least one of the following is and will be true: (a) Lender is not using "plan
assets" (within the meaning of ERISA Section 3(42) or otherwise) of one or
more Benefit Plans with respect to Lender
'
'
s entrance into, participation in, administration of and performance of the
Loans, Letters of Credit, Commitments or Loan Documents; (b) the transaction
exemption set forth in one or more PTEs, such as PTE 84-14 (a class exemption
for certain transactions determined by independent qualified professional
asset managers), PTE 95-60 (a class exemption for certain transactions
involving insurance company general accounts), PTE 90-1 (a class exemption for
certain transactions involving insurance company pooled separate accounts),
PTE 91-38 (a class exemption for certain transactions involving bank
collective investment funds) or PTE 96-23 (a class exemption for certain
transactions determined by in-house asset managers), is applicable with
respect to Lender's entrance into, participation in, administration of and
performance of the Loans, Letters of Credit, Commitments and Loan Documents;
(c) (i) Lender is an investment fund managed by a "Qualified Professional
Asset Manager" (within the meaning of Part VI of PTE 84-14), (ii) such
Qualified Professional Asset Manager made the investment decision on behalf of
Lender to enter into, participate in, administer and perform the Loans,
Letters of Credit, Commitments and Loan Documents, (iii) the entrance into,
participation in, administration of and performance of the Loans, Letters of
Credit, Commitments and Loan Documents satisfies the requirements of
sub-sections (b) through (g) of Part I of PTE 84-14, and (iv) to the best
knowledge of Lender, the requirements of subsection (a) of Part I of PTE 84-14
are satisfied with respect to Lender's entrance into, participation in,
administration of and performance of the Loans, Letters of Credit, Commitments
and Loan Documents; or (d) such other representation, warranty and covenant as
may be agreed in writing between Agent, in its discretion, and Lender.
12.16.2
Further Lender Representations
. Unless
Section 12.16.1(a)
or
(d)
is true with respect to a Lender, such Lender further represents and warrants,
as of the date it became a Lender hereunder, and covenants, from the date it
became a Lender to the date it ceases to be a Lender hereunder, for the
benefit of, Agent and not, for the avoidance of doubt, to or for the benefit
of any Loan Party, that Agent is not a fiduciary with respect to the assets of
such Lender involved in its entrance into, participation in, administration of
and performance of the Loans, Letters of Credit, Commitments and Loan
Documents (including in connection with the reservation or exercise of any
rights by Agent under any Loan Document.
-189-
AmericasActive:19663285.13
-------------------------------------------------------------------------------
SECTION 13. BENEFIT OF AGREEMENT; ASSIGNMENTS AND PARTICIPATIONS
13.1
Successors and Assigns
.
This Agreement shall be binding upon and inure to the benefit of the Loan
Parties, Agent, Lenders, and their respective successors and assigns, except
that (a) no Loan Party (other than pursuant to a transaction permitted under
Section 10.2.7
) shall have the right to assign its rights or delegate its obligations under
any Loan Documents; and (b) any assignment by a Lender must be made in
compliance with
Section 13.3
. Agent may treat the Person which made any Loan as the owner thereof for all
purposes until such Person makes an assignment in accordance with
Section 13.3
. Any authorization or consent of a Lender shall be conclusive and binding on
any subsequent transferee or assignee of such Lender.
13.2
Participations
.
13.2.1
Permitted Participants; Effect
. Any Lender may, in the ordinary course of its business and in accordance
with applicable Law, at any time sell to a financial institution ("Participant")
a participating interest in the rights and obligations of such Lender under
any Loan Documents. Despite any sale by a Lender of participating interests to
a Participant, such Lender's obligations under the Loan Documents shall remain
unchanged, such Lender shall remain solely responsible to the other parties
hereto for performance of such obligations, such Lender shall remain the
holder of its Loans and Facility Commitments for all purposes, all amounts
payable by the Loan Parties within the applicable Loan Party Group shall be
determined as if such Lender had not sold such participating interests, and
the Loan Parties within the applicable Loan Party Group and Agent shall
continue to deal solely and directly with such Lender in connection with the
Loan Documents. Each Lender shall be solely responsible for notifying its
Participants of any matters under the Loan Documents, and Agent and the other
Lenders shall not have any obligation or liability to any such Participant. A
Participant shall be entitled to the benefits of
Section 5.8
in the same manner as if the Participant acquired its interest by assignment,
provided the Participant complies with the requirements of
Section 5.9
as if it were a Lender. Each Lender that sells participations to a
Participant, acting solely for this purpose as a non-fiduciary agent of the
Borrowers, shall maintain a register of all such Participants, 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 or its other obligations under any Loan Document) except to the extent
that such disclosure is necessary to establish that such Commitment, Loan or
other obligation is in registered form under Section 5f.103-1(c) of the
Treasury regulations. The entries in the participant register shall be
conclusive (absent manifest error), and the Borrowers and the Lenders shall
treat each Person whose name is recorded in the participant register pursuant
to the terms hereof as a participant for all purposes of this Agreement,
notwithstanding notice to the contrary. For the avoidance of doubt, Agent (in
its capacity as Agent) shall have no responsibility for maintaining a
participant register.
13.2.2
Voting Rights
. Each Lender shall retain the sole right to approve, without the consent of
any Participant, any amendment, waiver or other modification of any Loan
Documents other than that which forgives principal, interest or fees, reduces
the stated interest rate or fees payable with respect to the applicable Loan
or Facility Commitment in which such Participant has an interest, postpones
the Canadian Revolver Commitment Termination Date or U.S. Revolver Commitment
Termination Date, as applicable, or any date fixed for any regularly scheduled
payment of principal, interest or fees on such Loan or Commitment in which
such Participant has an interest, or releases the
-190-
AmericasActive:19663285.13
-------------------------------------------------------------------------------
applicable Borrower, or all or substantially all of the benefits of the
applicable Guarantee, or all or substantially all of the applicable Collateral.
13.2.3
Benefit of Set-Off
. The Loan Parties agree that each Participant shall have a right of set-off
in respect of its participating interest to the same extent as if such
interest were owing directly to a Lender, and each Lender shall also retain
the right of set-off with respect to any participating interests sold by it.
By exercising any right of set-off, a Participant agrees to share with Lenders
all amounts received through its set-off, in accordance with
Section 12.5
as if such Participant were a Lender.
13.3
Assignments
.
13.3.1
Permitted Assignments
. A Lender may assign to an Eligible Assignee any of its rights and
obligations under the Loan Documents, as long as (a) each assignment is of a
constant, and not a varying, percentage of the transferor Lender's rights and
obligations under the Loan Documents and, in the case of a partial assignment,
is in a minimum principal amount of $5,000,000 (unless otherwise agreed by
Agent and Loan Party Agent, each in its discretion) and integral multiples of
$1,000,000 in excess of that amount; (b) except in the case of an assignment
in whole of a Lender's rights and obligations, the aggregate amount of the
Commitments retained by the transferor Lender is at least $5,000,000 (unless
otherwise agreed by Agent and Loan Party Agent, each in its discretion); (c)
the parties to each such assignment shall execute and deliver to Agent, for
its acceptance and recording, an Assignment and Acceptance; and (d) the
transferee Lender shall have executed a joinder to the Reallocation Agreement
in form and substance acceptable to Agent. Nothing herein shall limit the
right of a Lender to pledge or assign any rights under the Loan Documents to
(i) any Federal Reserve Bank or the United States Treasury as collateral
security pursuant to Regulation A of the FRB and any Operating Circular issued
by such Federal Reserve Bank, or (ii) counterparties to swap agreements
relating to any Loans;
provided
,
however
, (i) such Lender shall remain the holder of its Loans and owner of its
interest in any Letter of Credit for all purposes hereunder, (ii) the
Borrowers, Agent, the other Lenders and Issuing Banks shall continue to deal
solely and directly with such Lender in connection with such Lender's rights
and obligations under this Agreement, (iii) any payment by the Loan Parties to
the assigning Lender in respect of any Obligations assigned as described in
this sentence shall satisfy the Loan Parties' obligations hereunder to the
extent of such payment, and no such assignment shall release the assigning
Lender from its obligations hereunder. Notwithstanding the foregoing, nothing
herein shall limit the right of a Lender to pledge or assign any rights under
the Loan Documents to another Lender following an acceleration of Loans and
termination of Commitments pursuant to
Section 11.2
in connection with implementation of the Reallocation Agreement following a
Designation Date.
13.3.2
Register
. Agent, acting solely for this purpose as a non-fiduciary agent of the
Borrowers, shall maintain at one of its offices a copy of each Assignment and
Acceptance delivered to it and a register for the recordation of the names and
addresses of the Lenders, and the Commitments of, and principal amounts (and
stated interest) of the Loans owing to, each Lender pursuant to the terms
hereof from time to time (the "
Register
"). The entries in the Register shall be conclusive absent manifest error, and
the Borrowers, Agent and the Lenders shall 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. The Register shall be available for
inspection by the Borrowers and any Lender, at any reasonable time and from
time to time upon reasonable prior notice.
-191-
AmericasActive:19663285.13
-------------------------------------------------------------------------------
13.3.3
Effect; Effective Date
. Upon delivery to Agent of an assignment notice in the form of
Exhibit E
and a processing fee of $3,500 (unless otherwise agreed by Agent in its
discretion), the assignment shall become effective as specified in the notice,
if it complies with this
Section 13.3
. From such effective date, the Eligible Assignee shall for all purposes be a
Lender under the Loan Documents, and shall have all rights and obligations of
a Lender thereunder. Upon consummation of an assignment, the transferor
Lender, Agent and the Loan Parties shall upon request by the transferring or
transferee Lender make appropriate arrangements for issuance of replacement
and/or new Notes, as applicable. The transferee Lender shall comply with
Section 5.9
and deliver, upon request, an administrative questionnaire satisfactory to
Agent.
13.3.4
Certain Assignees
. No assignment or participation may be made to a Borrower, Affiliate of a
Borrower, Defaulting Lender or natural person. Any assignment by a Defaulting
Lender shall be effective only upon payment by the Eligible Assignee or
Defaulting Lender to Agent of an aggregate amount sufficient, upon
distribution (through direct payment, purchases of participations or other
compensating actions as Agent deems appropriate), to satisfy all funding and
payment liabilities then owing by the Defaulting Lender hereunder. If an
assignment by a Defaulting Lender shall become effective under applicable Law
for any reason without compliance with the foregoing sentence, then the
assignee shall be deemed a Defaulting Lender for all purposes until such
compliance occurs.
SECTION 14. MISCELLANEOUS
14.1
Consents, Amendments and Waivers
.
14.1.1
Amendment
. No modification of any Loan Document, including any extension or amendment
of a Loan Document or any waiver of a Default or Event of Default, shall be
effective without the prior written agreement of Agent (with the consent of
Required Lenders) and each Loan Party party to such Loan Document; provided,
however, that:
(a) without the prior written consent of Agent, no modification shall be
effective with respect to any provision in a Loan Document that relates to any
rights, duties or discretion of Agent;
(b) without the prior written consent of each affected Issuing Bank, no
modification shall be effective with respect to any LC Obligations,
Section 2.2
or
Section 2.3
or any other provision in a Loan Document that relates to any rights, duties
or discretion of such affected Issuing Bank;
(c) without the prior written consent of each affected Lender, including a
Defaulting Lender, no modification shall be effective that would (i) increase
the Facility Commitment of such Lender; (ii) reduce the amount of, or waive or
delay payment of, any principal, interest or fees payable to such Lender
(except as provided in
Section 4.2
); (iii) increase the aggregate amount of all Commitments (except as set forth
in
Section 2.1.4
) or (iv) extend the U.S. Revolver Commitment Termination Date, the Canadian
Revolver Commitment Termination Date or Facility Termination Date;
(d) without the prior written consent of all Lenders (except any Defaulting
Lender), no modification shall be effective that would (i) alter
Section 5.5, 7.1
(except to add Collateral) or
14.1.1
; (ii
i
) amend the definitions of Pro Rata, Required Lenders, Required Facility
Lenders or Supermajority Required Facility Lenders; (
iv
iii
) amend this
Section 14.1.1
; or (
v
iv
) increase the Maximum Facility Amount (except as set forth in
Section 2.1.4
);
-192-
AmericasActive:19663285.13
-------------------------------------------------------------------------------
(e) without the prior written consent of the Supermajority Required
Facility Lenders having Commitments to a Borrower (except a Defaulting Lender
as and to the extent provided in
Section 4.2
), no amendment or waiver shall be effective that would (x) with respect to
Lenders having Facility Commitments to the Canadian Borrower, amend the
definition of Canadian Borrowing Base (or, for purposes of such definition,
any defined term used in such definition) or (y) with respect to Lenders
having Facility Commitments to the U.S. Borrower, amend the definition of U.S.
Borrowing Base (or, for purposes of such definition, any defined term used in
such definition);
(f) without the prior written consent of all Lenders having Commitments to
a Borrower (except a Defaulting Lender as and to the extent provided in
Section 4.2
), no amendment or waiver shall be effective that would (x) with respect to
Lenders having Facility Commitments to the Canadian Borrower, (i) increase the
advance rates applicable to the Canadian Borrower, (ii) release all or
substantially all of the Canadian Facility Collateral, except as currently
contemplated by
Section 12.2.1
, or (iii) release any Canadian Facility Loan Party from liability for any
Canadian Facility Obligations, except as currently contemplated by
Section 12.2.1
; or (y) with respect to Lenders having Facility Commitments to the U.S.
Borrower, (i) increase the advance rates applicable to the U.S. Borrower, (ii)
release all or substantially all of the U.S. Facility Collateral, except as
currently contemplated by
Section 12.2.1
, or (iii) release any U.S. Facility Loan Party from liability for any U.S.
Facility Obligations, except as currentlycontemplated by
Section 12.2.1
; and
(g) without the prior written consent of a Secured Bank Product Provider,
no modification shall be effective that affects its relative payment priority
under
Section 5.5.1
.
Notwithstanding any other provision contained herein, it is understood and
agreed that (x) Agent and the Loan Party Agent may amend or modify this
Agreement and any other Loan Document to cure any ambiguity, omission, defect
or inconsistency therein and (y) this Agreement and the other Loan Documents
may be amended and converted into an accounts receivables facility with the
prior written agreement of Agent (with the consent of Required Lenders) and
each Loan Party party hereto.
14.1.2
Limitations
. The agreement of the Loan Parties shall not be necessary to the
effectiveness of any modification of a Loan Document that deals solely with
the rights and duties of Lenders, Agent and/or Issuing Banks as among
themselves. Only the consent of the parties to any Collateral Access
Agreement, Deposit Account Control Agreement or any agreement relating to fees
or a Bank Product shall be required for modification of such agreement, and no
Bank Product provider (in such capacity) shall have any right to consent to
modification of any Loan Document other than its Bank Product agreement. The
making of any Loans during the existence of a Default or Event of Default
shall not be deemed to constitute a waiver of such Default or Event of
Default, nor to establish a course of dealing. Any waiver or consent granted
by Agent or Lenders hereunder shall be effective only if in writing, and then
only in the specific instance and for the specific purpose for which it is
given.
14.1.3
Payment for Consents
. No Loan Party will, directly or indirectly, pay any remuneration or other
thing of value, whether by way of additional interest, fee or otherwise, to
any Lender (in its capacity as a Lender hereunder) as consideration for
agreement by such Lender with any modification of any Loan Documents, unless
such remuneration or value is concurrently paid, on the same terms, on a Pro
Rata basis to all Lenders providing their consent.
-193-
AmericasActive:19663285.13
-------------------------------------------------------------------------------
14.2
Indemnity
. EACH LOAN PARTY SHALL INDEMNIFY AND HOLD HARMLESS THE INDEMNITEES AGAINST
ANY CLAIMS THAT MAY BE INCURRED BY OR ASSERTED AGAINST ANY INDEMNITEE,
INCLUDING CLAIMS ASSERTED BY ANY LOAN PARTY OR OTHER PERSON OR ARISING FROM
THE NEGLIGENCE OF AN INDEMNITEE;
provided
that, in no event shall any Loan Party have any obligation hereunder to
indemnify or hold harmless an Indemnitee with respect to a Claim that is
determined in a final, non-appealable judgment by a court of competent
jurisdiction to result from its actual gross negligence or willful misconduct.
In the case of an investigation, litigation or proceeding to which the
indemnity in this paragraph applies, such indemnity shall be effective whether
or not such investigation, litigation or proceeding is brought by the Loan
Parties, their equity holders or creditors, partners, a third party or an
Indemnitee and whether or not an Indemnitee is otherwise a party thereto and,
except for losses determined in a final, non-appealable judgment by a court of
competent jurisdiction to result from an Indemnitee's actual gross negligence
or willful misconduct.
14.3
Notices and Communications
.
14.3.1
Notice Address
. Subject to
Section 4.1.4
, all notices and other communications by or to a party hereto shall be in
writing and shall be given to any Loan Party, at Loan Party Agent's address
shown on the signature pages hereof, and to any other Person at its address
shown on the signature pages hereof (or, in the case of a Person who becomes a
Lender after the Third Restatement Date, at the address shown on its
Assignment and Acceptance), or at such other address as a party may hereafter
specify by notice in accordance with this
Section 14.3
. Each such notice or other communication shall be effective only (a) if given
by facsimile transmission, when transmitted to the applicable facsimile
number, if confirmation of receipt is received; (b) if given by mail, three
(3) Business Days after deposit in the U.S. mail (or, in the case of a
Canadian Domiciled Loan Party, the Canadian mail system), with first-class
postage pre-paid, addressed to the applicable address; (c) if given by
personal delivery, when duly delivered to the notice address with receipt
acknowledged; (d) if given by electronic mail or any other telecommunications
device, when transmitted to an electronic mail address (or by another means of
electronic delivery). Notwithstanding the foregoing, no notice to Agent
pursuant to
Section 2.1.4
,
2.2
,
2.3
,
3.1.2
,
3.1.3
or
4.1.1
shall be effective until actually received by the individual or department to
whose attention at Agent such notice is required to be sent. Any written
notice or other communication that is not sent in conformity with the
foregoing provisions shall nevertheless be effective on the date actually
received by the noticed party. Any notice received by Loan Party Agent shall
be deemed received by all Loan Parties.
14.3.2
Electronic Communications
. Electronic and telephonic communications (including e-mail, messaging, voice
mail and websites) may be used only in a manner acceptable to Agent. Secured
Parties make no assurance as to the privacy or security of electronic or
telephonic communications. E-mail and voice mail shall not be effective
notices under the Loan Documents.
14.3.3
Platform
. Borrower Materials shall be delivered pursuant to procedures approved by
Agent, including electronic delivery (if possible) upon request by Agent to an
electronic system maintained by Agent ("
Platform
"). Borrowers shall notify Agent of each posting of Borrower Materials on the
Platform and the materials shall be deemed received by Agent only upon its
receipt of such notice. Borrower Materials and other information relating to
this credit facility may be made available to Lenders on the Platform. The
Platform is provided "as is" and "as available." Agent does not warrant
-194-
AmericasActive:19663285.13
-------------------------------------------------------------------------------
the accuracy or completeness of any information on the Platform nor the
adequacy or functioning of the Platform, and expressly disclaims liability for
any errors or omissions in the Borrower Materials or any issues involving the
Platform. NO WARRANTY OF ANY KIND, EXPRESS, IMPLIED OR STATUTORY, INCLUDING
ANY WARRANTY OF MERCHANTABILITY, FITNESS FOR A PARTICULAR PURPOSE,
NON-INFRINGEMENT OF THIRD PARTY RIGHTS, OR FREEDOM FROM VIRUSES OR OTHER CODE
DEFECTS, IS MADE BY AGENT WITH RESPECT TO BORROWER MATERIALS OR THE PLATFORM.
Lenders acknowledge that Borrower Materials may include material non-public
information of Loan Parties and should not be made available to any personnel
who do not wish to receive such information or who may be engaged in
investment or other market-related activities with respect to any Loan Party's
securities. No Agent Indemnitee shall have any liability to Borrowers, Lenders
or any other Person for losses, claims, damages, liabilities or expenses of
any kind (whether in tort, contract or otherwise) relating to use by any
Person of the Platform or delivery of Borrower Materials and other information
through the Platform.
14.3.4
Non-Conforming Communications
. Agent and Lenders may rely upon any communications purportedly given by or
on behalf of any Loan Party even if they were not made in a manner specified
herein, were incomplete or were not confirmed, or if the terms thereof, as
understood by the recipient, varied from a later confirmation. Each Loan Party
shall indemnify and hold harmless each Indemnitee from any liabilities,
losses, costs and expenses arising from any non-conforming communication
(including telephonic and electronic communications) purportedly given by or
on behalf of a Loan Party.
14.4
Performance of the Loan Parties' Obligations
.
Agent may, in its discretion at any time and from time to time, at the expense
of the Loan Parties of the applicable Loan Party Group, pay any amount or do
any act required of a Loan Party under any Loan Documents to (a) enforce any
Loan Documents or collect any Obligations; (b) protect, insure, maintain or
realize upon any Collateral; or (c) defend or maintain the validity or
priority of Agent's Liens in any Collateral, including any payment of a
judgment, insurance premium, warehouse charge, finishing or processing charge,
or landlord claim, or any discharge of a Lien. All payments, costs and
expenses (including Extraordinary Expenses) of Agent under this
Section
14.4
shall be reimbursed to Agent by the Loan Parties,
on demand
, with interest from the date incurred to the date of payment thereof at the
rate applicable to U.S. Base Rate Loans. Any payment made or action taken by
Agent under this
Section
14.4
shall be without prejudice to any right to assert an Event of Default or to
exercise any other rights or remedies under the Loan Documents.
14.5
Credit Inquiries
.
Agent and Lenders may (but shall have no obligation) to respond to usual and
customary credit inquiries from third parties concerning any Loan Party or
Subsidiary.
14.6
Severability
.
Wherever possible, each provision of the Loan Documents shall be interpreted
in such manner as to be valid under applicable Law. If any provision is found
to be invalid under applicable Law, it shall be ineffective only to the extent
of such invalidity and the remaining provisions of the Loan Documents shall
remain in full force and effect.
14.7
Cumulative Effect; Conflict of Terms
.
The provisions of the Loan Documents are cumulative. The parties acknowledge
that the Loan Documents may use several limitations, tests or measurements to
regulate similar matters, and they agree that these are cumulative and that
each must be performed as provided. Except as otherwise provided in another
Loan Document (by specific reference
-195-
AmericasActive:19663285.13
-------------------------------------------------------------------------------
to the applicable provision of this Agreement), if any provision contained
herein is in direct conflict with any provision in another Loan Document, the
provision herein shall govern and control.
14.8
Execution; Electronic Records
.
Any Loan Document, including any required to be in writing, may (if agreed by
Agent) be in the form of an Electronic Record and may be executed using
Electronic Signatures. An Electronic Signature on or associated with any
Communication shall be valid and binding on each Loan Party and other party
thereto to the same extent as a manual, original signature, and any
Communication entered into by Electronic Signature shall constitute the legal,
valid and binding obligation of each party, enforceable to the same extent as
if a manually executed original signature were delivered. A Communication may
be executed in as many counterparts as necessary or convenient, including both
paper and electronic counterparts, but all such counterparts are one and the
same Communication. The parties may use or accept manually signed paper
Communications converted into electronic form (such as scanned into pdf), or
electronically signed Communications converted into other formats, for
transmission, delivery and/or retention. Agent and Lenders may, at their
option, create one or more copies of a Communication in the form of an imaged
Electronic Record ("
Electronic Copy
"), which shall be deemed created in the ordinary course of the Person
'
'
s business, and may destroy the original paper document. Any Communication in
the form or format of an Electronic Record, including an Electronic Copy,
shall be considered an original for all purposes, and shall have the same
legal effect, validity and enforceability as a paper record. Notwithstanding
anything herein, (a) Agent is under no obligation to accept an Electronic
Signature in any form unless expressly agreed by it pursuant to procedures
approved by it; (b) each Secured Party shall be entitled to rely on any
Electronic Signature purportedly given by or on behalf of a Loan Party without
further verification and regardless of the appearance or form of such
Electronic Signature; and (c) upon request by Agent, any Loan Document using
an Electronic Signature shall be promptly followed by a manually executed,
original counterpart.
14.9
Entire Agreement
.
Time is of the essence with respect to all Loan Documents and Obligations. The
Loan Documents constitute the entire agreement, and supersede all prior
understandings and agreements, among the parties relating to the subject
matter thereof.
14.10
Relationship with Lenders
.
The obligations of each Lender hereunder are several, and no Lender shall be
responsible for the obligations or Commitments of any other Lender. Amounts
payable hereunder to each Lender shall be a separate and independent debt. It
shall not be necessary for Agent or any other Lender to be joined as an
additional party in any proceeding for such purposes. Nothing in this
Agreement and no action of Agent, Lenders or any other Secured Party pursuant
to the Loan Documents or otherwise shall be deemed to constitute Agent and any
Secured Party to be a partnership, joint venture or similar arrangement, nor
to constitute control of any Loan Party.
14.11
No Advisory or Fiduciary Responsibility
.
In connection with all aspects of each transaction contemplated by any Loan
Document, the Loan Parties acknowledge and agree that (a)(i) this credit
facility and any related arranging or other services by Agent, any Lender, any
of their Affiliates or any arranger are arm's-length commercial transactions
between the Loan Parties and such Person; (ii) the Loan Parties have consulted
their own legal, accounting, regulatory and tax advisors to the extent they
have deemed appropriate; and (iii) the Loan Parties are capable of evaluating,
and understand and accept, the terms, risks and conditions of the transactions
contemplated by the Loan Documents; (b) each of Agent, Lenders, their
Affiliates and any arranger is and has been acting solely as a principal and,
except as expressly agreed in writing by the relevant parties, has not been,
is not, and will not be acting as an
-196-
AmericasActive:19663285.13
-------------------------------------------------------------------------------
advisor, agent or fiduciary for the Loan Parties, any of their Affiliates or
any other Person (except as expressly set forth in
Section 13.3.2
), and has no obligation with respect to the transactions contemplated by the
Loan Documents except as expressly set forth therein; and (c) Agent, Lenders,
their Affiliates and any arranger may be engaged in a broad range of
transactions that involve interests that differ from those of the Loan Parties
and their Affiliates, and have no obligation to disclose any of such interests
to the Loan Parties or their Affiliates. Each Loan Party hereby agrees that it
will not claim that any of the Agent, Lenders and their respective Affiliates
has rendered advisory services of any nature or respect or owes a fiduciary
duty or similar duty to it in connection with any transaction contemplated by
a Loan Document.
.
14.12
Confidentiality
. Each of Agent, Lenders and Issuing Banks shall maintain the confidentiality
of all Information (as defined below), except that Information may be
disclosed (a) to its Affiliates, and to its and their partners, directors,
officers, employees, agents, advisors and representatives (provided such
Persons are informed of the confidential nature of the Information and
instructed to keep it confidential); (b) to the extent requested by any
governmental, regulatory or self-regulatory authority purporting to have
jurisdiction over it or its Affiliates; (c) to the extent required by
applicable Law or by any subpoena or other legal process; (d) to any other
party hereto; (e) in connection with any action or proceeding relating to any
Loan Documents or Obligations; (f) subject to an agreement containing
provisions substantially the same as this
Section
14.12
, to any Transferee or any actual or prospective party (or its advisors) to
any Bank Product; (g) to any direct or indirect contractual counterparty in
Hedging Agreements or such contractual counterparty's professional advisor,
(h) with the consent of Loan Party Agent; or (i) to the extent such
Information (i) becomes publicly available other than as a result of a breach
of this
Section
14.12
or (ii) is available to Agent, any Lender, any Issuing Bank or any of their
Affiliates on a nonconfidential basis from a source other than the Loan
Parties. Notwithstanding the foregoing, Agent and Lenders may publish or
disseminate general information concerning this credit facility for league
table, tombstone and advertising purposes, and may use the Loan Parties'
logos, trademarks or product photographs in advertising materials. As used
herein, "
Information
" means all information received from a Loan Party or Subsidiary relating to
it or its business that is identified as confidential when delivered. Any
Person required to maintain the confidentiality of Information pursuant to this
Section
14.12
shall be deemed to have complied if it exercises a degree of care similar to
that which it accords its own confidential information. Each of Agent, Lenders
and Issuing Banks acknowledges that (i) Information may include material
non-public information; (ii) it has developed compliance procedures regarding
the use of material non-public information; and (iii) it will handle such
material non-public information in accordance with applicable Law.
14.13
Acknowledgment Regarding QFCs
. To the extent that the Loan Documents provide support, through a guarantee
or otherwise, for any Swap or any other agreement or instrument that is a QFC
(such support, "
QFC Credit Support
", and each such QFC, a "
Supported QFC
"), the parties acknowledge and agree as follows with respect to the
resolution power of the Federal Deposit Insurance Corporation under the
Federal Deposit Insurance Act and Title II of the Dodd-Frank Wall Street
Reform and Consumer Protection Act (together with the regulations promulgated
thereunder, the "
U.S. Special Resolution Regimes
") in respect of such Supported QFC and QFC Credit Support (with the
provisions below applicable notwithstanding that the Loan Documents and any
Supported QFC may in fact be stated to be governed by the laws of the State of
New York and/or of the United States or any other state of the United States):
-197-
AmericasActive:19663285.13
-------------------------------------------------------------------------------
14.13.1
Covered Party
. If a Covered Entity that is party to a Supported QFC (each, a "
Covered Party
") becomes subject to a proceeding under a U.S. Special Resolution Regime,
transfer of such Supported QFC and the benefit of such QFC Credit Support (and
any interest and obligation in or under such Supported QFC and such QFC Credit
Support, and any rights in property securing such Supported QFC or such QFC
Credit Support) from such Covered Party will be effective to the same extent
as the transfer would be effective under the U.S. Special Resolution Regimes
if the Supported QFC and such QFC Credit Support (and any such interest,
obligation and rights in property) were governed by the laws of the United
States or a state of the United States. If a Covered Party or BHC Act
Affiliate of a Covered Party becomes subject to a proceeding under a U.S.
Special Resolution Regime, Default Rights under the Loan Documents that might
otherwise apply to such Supported QFC or any QFC Credit Support that may be
exercised against such Covered Party are permitted to be exercised to no
greater extent than such Default Rights could be exercised under the U.S.
Special Resolution Regimes if the Supported QFC and Loan Documents were
governed by the laws of the United States or a state of the United States.
Without limitation of the foregoing, it is understood and agreed that rights
and remedies of the parties with respect to a Defaulting Lender shall in no
event affect the rights of any Covered Party with respect to a Supported QFC
or any QFC Credit Support.
14.13.2
Definitions
. As used in this Section, (a) "BHC Act Affiliate" means an "affiliate," as
defined in and interpreted in accordance with 12 U.S.C. (s)1841(k); (b)
"Default Right" has the meaning assigned in and interpreted in accordance with
12 C.F.R. (s)(s)252.81, 47.2 or 382.1, as applicable; and (c) "QFC" means a
"qualified financial contract," as defined in and interpreted in accordance
with 12 U.S.C. (s)5390(c)(8)(D).
14.14
GOVERNING LAW
. THIS AGREEMENT AND THE OTHER LOAN DOCUMENTS, UNLESS OTHERWISE SPECIFIED,
SHALL BE GOVERNED BY THE LAWS OF THE STATE OF NEW YORK, WITHOUT GIVING EFFECT
TO ANY CONFLICT OF LAW PRINCIPLES (BUT GIVING EFFECT TO FEDERAL LAWS RELATING
TO NATIONAL BANKS).
14.15
Consent to Forum
.
14.15.1
Forum
. EACH LOAN PARTY HEREBY CONSENTS TO THE EXCLUSIVE JURISDICTION OF ANY FEDERAL
OR STATE COURT SITTING IN OR WITH JURISDICTION OVER THE STATE OF NEW YORK, IN
ANY PROCEEDING OR DISPUTE RELATING IN ANY WAY TO ANY LOAN DOCUMENTS, AND
AGREES THAT ANY SUCH PROCEEDING SHALL BE BROUGHT BY IT SOLELY IN ANY SUCH
COURT. EACH LOAN PARTY IRREVOCABLY WAIVES ALL CLAIMS, OBJECTIONS AND DEFENSES
THAT IT MAY HAVE REGARDING SUCH COURT'S PERSONAL OR SUBJECT MATTER
JURISDICTION, VENUE OR INCONVENIENT FORUM. EACH PARTY HERETO IRREVOCABLY
CONSENTS TO SERVICE OF PROCESS IN THE MANNER PROVIDED FOR NOTICES IN
SECTION 14.3.1
. Nothing herein shall limit the right of Agent or any Lender to bring
proceedings against any Loan Party in any other court, nor limit the right of
any party to serve process in any other manner permitted by applicable Law.
Nothing in this Agreement shall be deemed to preclude enforcement by Agent of
any judgment or order obtained in any forum or jurisdiction.
14.16
Waivers by the Loan Parties
. To the fullest extent permitted by applicable Law, each Loan Party waives
(a) the right to trial by jury (which Agent and each Lender hereby also
waives) in any
-198-
AmericasActive:19663285.13
-------------------------------------------------------------------------------
proceeding or dispute of any kind relating in any way to any Loan Documents,
Obligations or Collateral; (b) presentment, demand, protest, notice of
presentment, default, non-payment, maturity, release, compromise, settlement,
extension or renewal of any accounts, documents, instruments, chattel paper
and guarantees at any time held by Agent on which a Loan Party may in any way
be liable, and hereby ratifies anything Agent may do in this regard; (c)
notice prior to taking possession or control of any Collateral; (d) any bond
or security that might be required by a court prior to allowing Agent to
exercise any rights or remedies; (e) the benefit of all valuation,
appraisement and exemption laws; (f) any claim against Agent, any Issuing Bank
or any Lender, on any theory of liability, for special, indirect,
consequential, exemplary or punitive damages (as opposed to direct or actual
damages) in any way relating to any Enforcement Action, Obligations, Loan
Documents or transactions relating thereto; and (g) notice of acceptance
hereof. Each Loan Party acknowledges that the foregoing waivers are a material
inducement to Agent, Issuing Banks and Lenders entering into this Agreement
and that they are relying upon the foregoing in their dealings with the Loan
Parties. Each Loan Party has reviewed the foregoing waivers with its legal
counsel and has knowingly and voluntarily waived its jury trial and other
rights following consultation with legal counsel. In the event of litigation,
this Agreement may be filed as a written consent to a trial by the court.
14.17
Patriot Act Notice
. Agent and Lenders hereby notify the Loan Parties that pursuant to the
Patriot Act, the Proceeds of Crime Act and other applicable anti-money
laundering, anti-terrorist financing, government sanction and "know your
client" policies, regulations, laws or rules (the Proceeds of Crime Act and
such other applicable policies, regulations, laws or rules, collectively,
including any guidelines or orders thereunder, "
AML Legislation
"), Agent and Lenders are required to obtain, verify and record information
that identifies each Loan Party, including its legal name, address, tax ID
number and other information that will allow Agent and Lenders to identify it
in accordance with the Patriot Act and the AML Legislation. Agent and Lenders
will also require information regarding each personal guarantor, if any, and
may require information regarding the Loan Parties' management and owners,
such as legal name, address, social security number and date of birth. Each
Loan Party shall promptly provide all such information, including supporting
documentation and other evidence, as may be reasonably requested by any Lender
or any prospective assignee or participant of a Lender, in order to comply
with the Patriot Act and/or the applicable AML Legislation, whether now or
hereafter in existence. Loan Parties shall, promptly upon request, provide all
documentation and other information as Agent, Issuing Bank or any Lender may
request from time to time in order to comply with any obligations under any
"know your customer," anti-money laundering or other requirements of
applicable Law.
14.18
Canadian Anti-Money Laundering Legislation
.
(a) If Agent has ascertained the identity of any Canadian Facility Loan
Party or any authorized signatories of any Canadian Facility Loan Party for
the purposes of applicable AML Legislation, then Agent:
(i) shall be deemed to have done so as an agent for each Canadian Lender,
and this Agreement shall constitute a "written agreement" in such regard
between each Canadian Lender and Agent within the meaning of the applicable
AML Legislation; and
-199-
AmericasActive:19663285.13
-------------------------------------------------------------------------------
(ii) shall provide to each Canadian Lender copies of all information
obtained in such regard without any representation or warranty as to its
accuracy or completeness.
Notwithstanding the preceding sentence and except as may otherwise be agreed
in writing, each Canadian Lender agrees that Agent has no obligation to
ascertain the identity of the Canadian Loan Parties or any authorized
signatories of the Canadian Loan Parties on behalf of any Canadian Lender, or
to confirm the completeness or accuracy of any information it obtains from any
Canadian Facility Loan Party or any such authorized signatory in doing so.
14.19
Reinstatement
. This Agreement shall remain in full force and effect and continue to be
effective should any petition be filed by or against any Loan Party for
liquidation or reorganization, should any Loan Party become insolvent or make
an assignment for the benefit of creditors or should a receiver or trustee be
appointed for all or any significant part of such Loan Party's assets, and
shall continue to be effective or be reinstated, as the case may be, if at any
time payment and performance of the Obligations, or any part thereof, is,
pursuant to applicable Law, rescinded or reduced in amount, or must otherwise
be restored or returned by any obligee of the Obligations, whether as a
"voidable preference", "fraudulent conveyance", or otherwise, all as though
such payment or performance had not been made. In the event that any payment,
or any part thereof, is rescinded, reduced, restored or returned, the
Obligations shall be reinstated and deemed reduced only by such amount paid
and not so rescinded, reduced, restored or returned.
14.20
Nonliability of Lenders
. Neither Agent, any Issuing Bank nor any Lender undertakes any responsibility
to any Loan Party to review or inform any Loan Party of any matter in
connection with any phase of any Loan Party's business or operations. Each
Loan Party agrees, on behalf of itself and each other Loan Party, that neither
Agent, any Issuing Bank nor any Lender shall have liability to any Loan Party
(whether sounding in tort, contract or otherwise) for losses suffered by any
Loan Party in connection with, arising out of, or in any way related to the
transactions contemplated and the relationship established by the Loan
Documents, or any act, omission or event occurring in connection therewith,
unless it is determined in a final non-appealable judgment by a court of
competent jurisdiction that such losses resulted from the actual gross
negligence or willful misconduct of the party from which recovery is sought.
NO LENDER SHALL BE LIABLE FOR ANY DAMAGES ARISING FROM THE USE BY OTHERS OF
ANY INFORMATION OR OTHER MATERIALS OBTAINED THROUGH INTRALINKS OR OTHER
SIMILAR INFORMATION TRANSMISSION SYSTEMS IN CONNECTION WITH THIS AGREEMENT.
14.21
INTERCREDITOR AGREEMENT
.
NOTWITHSTANDING ANYTHING HEREIN TO THE CONTRARY, THE LIEN AND PRIORITY GRANTED
TO AGENT PURSUANT TO ANY LOAN DOCUMENT AND THE EXERCISE OF ANY RIGHT OR REMEDY
IN RESPECT OF THE COLLATERAL BY AGENT HEREUNDER OR UNDER ANY OTHER LOAN
DOCUMENT ARE SUBJECT TO THE PROVISIONS OF THE INTERCREDITOR AGREEMENT. IN THE
EVENT OF ANY CONFLICT BETWEEN THE TERMS OF THE INTERCREDITOR AGREEMENT, THIS
AGREEMENT AND ANY OTHER LOAN DOCUMENT, THE TERMS OF THE INTERCREDITOR
AGREEMENT SHALL GOVERN AND CONTROL WITH RESPECT TO ANY RIGHT OR REMEDY.
WITHOUT LIMITING THE GENERALITY OF THE FOREGOING, AND NOTWITHSTANDING ANYTHING
HEREIN TO THE CONTRARY, ALL RIGHTS AND REMEDIES WITH RESPECT TO THE COLLATERAL
OF AGENT (AND THE SECURED
-200-
AmericasActive:19663285.13
-------------------------------------------------------------------------------
PARTIES) SHALL BE SUBJECT TO THE TERMS OF THE INTERCREDITOR AGREEMENT, AND NO
LOAN PARTY SHALL BE REQUIRED HEREUNDER OR UNDER ANY LOAN DOCUMENT TO TAKE ANY
ACTION WITH RESPECT TO THE COLLATERAL THAT IS INCONSISTENT WITH SUCH LOAN
PARTIES' OBLIGATIONS UNDER THE FIXED ASSET FACILITY. AGENT MAY NOT REQUIRE ANY
LOAN PARTY TO TAKE ANY ACTION WITH RESPECT TO THE CREATION, PERFECTION OR
PRIORITY OF ITS LIEN, WHETHER PURSUANT TO THE EXPRESS TERMS HEREOF OR OF ANY
OTHER LOAN DOCUMENT OR PURSUANT TO THE FURTHER ASSURANCE PROVISIONS HEREOF OR
ANY OTHER LOAN DOCUMENT, TO THE EXTENT THAT SUCH ACTION WOULD BE VIOLATIVE OF
THE INTERCREDITOR AGREEMENT, OR SUCH LOAN PARTY'S OBLIGATIONS UNDER THE FIXED
ASSET FACILITY. THE DELIVERY OF ANY COLLATERAL TO AGENT UNDER THE FIXED ASSET
FACILITY PURSUANT TO THE FIXED ASSET FACILITY SHALL SATISFY ANY DELIVERY
REQUIREMENT HEREUNDER OR UNDER ANY OTHER LOAN DOCUMENT TO THE EXTENT THAT SUCH
DELIVERY IS CONSISTENT WITH THE TERMS OF THE INTERCREDITOR AGREEMENT.
14.22
Amendment and Restatement
.
(a) On the Third Restatement Date, the Existing Loan Agreement shall be
amended, restated and superseded in its entirety. The parties hereto
acknowledge and agree that (a) this Agreement and the other Loan Documents
executed and delivered in connection herewith do not constitute a novation,
payment and reborrowing, or termination of the Obligations under the Existing
Loan Agreement as in effect prior to the Third Restatement Date and (b) such
Obligations are in all respects continuing with only the terms thereof being
modified as provided in this Agreement.
(b) Notwithstanding the modifications effected by this Agreement of the
representations, warranties and covenants of the Loan Parties contained in the
Existing Loan Agreement, the Loan Parties acknowledge and agree that (1) any
causes of action or other rights created prior to the Third Restatement Date
in favor of any Lender and its successors arising out of the representations
and warranties of the Loan Parties contained in or delivered (including
representations and warranties delivered in connection with the making of the
loans or other extensions of credit thereunder) in connection with the
Existing Loan Agreement shall survive the execution and delivery of this
Agreement;
provided
, however, that it is understood and agreed that the Borrowers' monetary
obligations under the Existing Loan Agreement in respect of the loans and
letters of credit thereunder are evidenced by this Agreement as provided
herein and (2) the execution, delivery and performance of this Agreement and
the other Loan Documents on the Third Restatement Date shall not impair the
validity, effectiveness or priority of the Liens granted in favor of the Agent
prior to the date hereof, or the Notes issued by the Borrowers prior to the
date hereof, as applicable, and such Liens and obligations in respect of the
Notes are ratified and reaffirmed and shall continue unimpaired with the same
priority to secure the applicable Obligations.
(c) All indemnification obligations of the Loan Parties pursuant to the
Existing Loan Agreement (including any arising from a breach of the
representations thereunder) shall survive the amendment and restatement of the
Existing Loan Agreement pursuant to this Agreement.
(d) [
Reserved
].
-201-
AmericasActive:19663285.13
-------------------------------------------------------------------------------
(e) Each Loan Party hereby (a) ratifies and reaffirms all of its payment
and performance obligations, contingent or otherwise, and each grant of
security interests and liens in favor of the Agent, under each Reaffirmed
Agreement to which it is a party, (b) agrees and acknowledges that such
ratification and reaffirmation is not a condition to the continued
effectiveness of such Reaffirmed Agreements and (c) agrees that neither such
ratification and reaffirmation, nor the Agent's, or any Lender's solicitation
of such ratification and reaffirmation, constitutes a course of dealing giving
rise to any obligation or condition requiring a similar or any other
ratification or reaffirmation from any Loan Party with respect to any
subsequent modifications to the Reaffirmed Agreements. The Reaffirmed
Agreements shall remain in full force and effect and are hereby ratified and
confirmed.
14.23
Acknowledgement and Consent to Bail-In of Affected Financial Institutions
. Notwithstanding anything to the contrary in any Loan Document or in any
other agreement, arrangement or understanding among any such parties, each
party hereto acknowledges that any liability of any Lender that is an Affected
Financial Institution arising under any Loan Document, to the extent such
liability is unsecured, may be subject to the write-down and conversion powers
of the applicable Resolution Authority and agrees and consents to, and
acknowledges and agrees to be bound by:
(a) the application of any Write-Down and Conversion Powers by the
applicable Resolution Authority to any such liabilities arising hereunder
which may be payable to it by any Lender that is an Affected Financial
Institution; and
(b) the effects of any Bail-in Action on any such liability, including, if
applicable:
(i) a reduction in full or in part or cancellation of any such liability;
(ii) a conversion of all, or a portion of, such liability into shares or
other instruments of ownership in such Affected Financial Institution, its
parent undertaking, or a bridge institution that may be issued to it or
otherwise conferred on it, and that such shares or other instruments of
ownership will be accepted by it in lieu of any rights with respect to any
such liability under this Agreement or any other Loan Document; or
(iii) the variation of the terms of such liability in connection with the
exercise of the write-down and conversion powers of the applicable Resolution
Authority.
[Remainder of page intentionally left blank; signatures begin on following page]
-202-
AmericasActive:19663285.13
-------------------------------------------------------------------------------
ANNEX B
SCHEDULE 1.1(A)
to
Loan and Security Agreement
COMMITMENTS OF LENDERS
Lender U.S. Revolver Commitment Canadian Revolver Total Commitments:
Commitment:
Bank of America, N.A. $74,444,444.44 $0 $74,444,444.44
Bank of America, N.A. (acting through its Canada branch) $0 $9,305,555.56 $9,305,555.56
Deutsche Bank AG New York Branch $26,666,666.67 $0 $26,666,666.67
Deutsche Bank AG, Canada Branch $0 $3,333,333.33 $3,333,333.33
Goldman Sachs Bank USA $58,888,888.89 $7,361,111.11 66,250,000.00
TOTAL $160,000,000 $20,000,000 $180,000,000
Exhibit 31.1
CERTIFICATION OF PRINCIPAL EXECUTIVE OFFICER, PURSUANT TO EXCHANGE ACT RULE
13a-14(a)/15d-14(a)
(SECTION 302 OF THE SARBANES-OXLEY ACT OF 2002)
I, Jeffrey S. Edwards, certify that:
1. I have reviewed this Quarterly Report on Form 10-Q of Cooper-Standard Holdings Inc.;
2. Based on my knowledge, this report does not contain any untrue statement
of a material fact or omit to state a material fact necessary to make the
statements made, in light of the circumstances under which such statements
were made, not misleading with respect to the period covered by this report;
3. Based on my knowledge, the financial statements, and other financial
information included in this report, fairly present in all material
respects the financial condition, results of operations and cash flows
of the registrant as of, and for, the periods presented in this report;
4. The registrant's other certifying officer and I are responsible for establishing and
maintaining disclosure controls and procedures (as defined in Exchange Act Rules
13a-15(e) and 15d-15(e)) and internal control over financial reporting (as defined
in Exchange Act Rules 13a-15(f) and 15d-15(f)) for the registrant and have:
(a) Designed such disclosure controls and procedures, or caused such disclosure controls and
procedures to be designed under our supervision, to ensure that material information relating
to the registrant, including its consolidated subsidiaries, is made known to us by others
within those entities, particularly during the period in which this report is being prepared;
(b) Designed such internal control over financial reporting, or caused such internal control over
financial reporting to be designed under our supervision, to provide reasonable assurance
regarding the reliability of financial reporting and the preparation of financial statements
for external purposes in accordance with generally accepted accounting principles;
(c) Evaluated the effectiveness of the registrant's disclosure controls
and procedures and presented in this report our conclusions about the
effectiveness of the disclosure controls and procedures, as of the end
of the period covered by this report based on such evaluation; and
(d) Disclosed in this report any change in the registrant's internal control over financial reporting
that occurred during the registrant's most recent fiscal quarter (the registrant's fourth
fiscal quarter in the case of an annual report) that has materially affected, or is reasonably
likely to materially affect, the registrant's internal control over financial reporting; and
5. The registrant's other certifying officer and I have disclosed, based on
our most recent evaluation of internal control over financial reporting,
to the registrant's auditors and the audit committee of the registrant's
board of directors (or persons performing the equivalent functions):
(a) All significant deficiencies and material weaknesses in the design
or operation of internal control over financial reporting which are
reasonably likely to adversely affect the registrant's ability to
record, process, summarize and report financial information; and
(b) Any fraud, whether or not material, that involves management or other employees who
have a significant role in the registrant's internal control over financial reporting.
Date: August 2, 2024 By: /S/ JEFFREY S. EDWARDS
Jeffrey S. Edwards
Chairman and Chief Executive Officer
(Principal Executive Officer)
Exhibit 31.2
CERTIFICATION OF PRINCIPAL FINANCIAL OFFICER, PURSUANT TO EXCHANGE ACT RULE
13a-14(a)/15d-14(a)
(SECTION 302 OF THE SARBANES-OXLEY ACT OF 2002)
I, Jonathan P. Banas, certify that:
1. I have reviewed this Quarterly Report on Form 10-Q of Cooper-Standard Holdings Inc.;
2. Based on my knowledge, this report does not contain any untrue statement
of a material fact or omit to state a material fact necessary to make the
statements made, in light of the circumstances under which such statements
were made, not misleading with respect to the period covered by this report;
3. Based on my knowledge, the financial statements, and other financial
information included in this report, fairly present in all material
respects the financial condition, results of operations and cash flows
of the registrant as of, and for, the periods presented in this report;
4. The registrant's other certifying officer and I are responsible for establishing and
maintaining disclosure controls and procedures (as defined in Exchange Act Rules
13a-15(e) and 15d-15(e)) and internal control over financial reporting (as defined
in Exchange Act Rules 13a-15(f) and 15d-15(f)) for the registrant and have:
(a) Designed such disclosure controls and procedures, or caused such disclosure controls and
procedures to be designed under our supervision, to ensure that material information relating
to the registrant, including its consolidated subsidiaries, is made known to us by others
within those entities, particularly during the period in which this report is being prepared;
(b) Designed such internal control over financial reporting, or caused such internal control over
financial reporting to be designed under our supervision, to provide reasonable assurance
regarding the reliability of financial reporting and the preparation of financial statements
for external purposes in accordance with generally accepted accounting principles;
(c) Evaluated the effectiveness of the registrant's disclosure controls
and procedures and presented in this report our conclusions about the
effectiveness of the disclosure controls and procedures, as of the end
of the period covered by this report based on such evaluation; and
(d) Disclosed in this report any change in the registrant's internal control over financial reporting
that occurred during the registrant's most recent fiscal quarter (the registrant's fourth
fiscal quarter in the case of an annual report) that has materially affected, or is reasonably
likely to materially affect, the registrant's internal control over financial reporting; and
5. The registrant's other certifying officer and I have disclosed, based on
our most recent evaluation of internal control over financial reporting,
to the registrant's auditors and the audit committee of the registrant's
board of directors (or persons performing the equivalent functions):
(a) All significant deficiencies and material weaknesses in the design
or operation of internal control over financial reporting which are
reasonably likely to adversely affect the registrant's ability to
record, process, summarize and report financial information; and
(b) Any fraud, whether or not material, that involves management or other employees who
have a significant role in the registrant's internal control over financial reporting.
Date: August 2, 2024 By: /S/ JONATHAN P. BANAS
Jonathan P. Banas
Executive Vice President and Chief Financial Officer
(Principal Financial Officer)
Exhibit 32
CERTIFICATION PURSUANT TO 18 U.S.C. SECTION 1350 AS ADOPTED PURSUANT TO
SECTION 906 OF THE SARBANES-OXLEY ACT OF 2002
In connection with the filing of this quarterly report of Cooper-Standard
Holdings Inc. (the "Company") on Form 10-Q for the period ended June 30, 2024,
with the Securities and Exchange Commission on the date hereof (the "Report"),
each of the undersigned officers certifies, pursuant to 18 U.S.C. section
1350, as adopted pursuant to section 906 of the Sarbanes-Oxley Act of 2002,
that, to such officer's knowledge:
1. The Report fully complies with the requirements of section 13(a) or 15(d) of the Securities Exchange Act of 1934; and
2. The information contained in the Report fairly presents, in all material
respects, the financial condition and results of operations of the Company.
Date: August 2, 2024 By: /S/ JEFFREY S. EDWARDS
Jeffrey S. Edwards
Chairman and Chief Executive Officer
(Principal Executive Officer)
/S/ JONATHAN P. BANAS
Jonathan P. Banas
Executive Vice President and Chief Financial Officer
(Principal Financial Officer)
{graphic omitted}
{graphic omitted}