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Exhibit 10.1
CREDIT AGREEMENT
by and among
SITEL CORPORATION
and
EACH OF ITS SUBSIDIARIES THAT ARE
SIGNATORIES HERETO
THE LENDERS THAT ARE SIGNATORIES
HERETO
WELLS FARGO FOOTHILL, INC.
and
WELLS FARGO FINANCIAL CORPORATION
CANADA,
Dated as of August 19, 2005
TABLE OF CONTENTS
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EXHIBITS AND SCHEDULES
CREDIT AGREEMENT
THIS CREDIT AGREEMENT (this “ Agreement ”), is entered into as of August 19, 2005 by and among the lenders identified on the signature pages hereof (such lenders, together with their respective successors and permitted assigns and the Fronting Lender, are referred to hereinafter each individually as a “ Lender ” and collectively as the “ Lenders ”), and WELLS FARGO FOOTHILL, INC. , a California corporation, as the arranger, administrative agent for the Lenders (in such capacity, together with its successors and assigns in such capacity, “ Administrative Agent ”), European administrative agent for the Lenders (in such capacity, together with its successors and assigns in such capacity, “ European Administrative Agent ”), collateral agent for the Lender Group and the Bank Product Providers (in such capacity, together with its successors and assigns in such capacity, “ Collateral Agent ”) and fronting lender for the Lenders (in such capacity, together with its successors and assigns in such capacity, “ Fronting Lender ”), WELLS FARGO FINANCIAL CORPORATION CANADA , a Nova Scotia unlimited liability company, as Canadian administrative agent for the Lenders (in such capacity, together with its successors and assigns in such capacity, “ Canadian Administrative Agent ”) and SITEL CORPORATION , a Minnesota corporation (“ Parent ”), and each of Parent’s Subsidiaries identified on the signature pages hereof and that from time to time become parties to this Agreement (such Subsidiaries, together with Parent, are referred to hereinafter each individually as a “ Borrower ”, and collectively, as the “ Borrowers ”).
The parties agree as follows:
1. DEFINITIONS AND CONSTRUCTION .1.1. Definitions .Capitalized terms used in this Agreement shall have the meanings specified therefor on Schedule 1.1 .
1.2. Accounting Terms .All accounting terms not specifically defined herein shall be construed in accordance with GAAP; provided, that if at any time any change in GAAP or the application thereof would affect the computation of any financial ratio or financial requirement set forth in any Loan Document and the Administrative Borrower notifies the Administrative Agent that the Administrative Borrower requests an amendment of such provision to eliminate the effect of such change occurring after the date hereof in GAAP or the application thereof (or if the Administrative Agent notifies the Administrative Borrower that the Required Lenders request an amendment of any provision for such purpose), regardless of whether such notice is given before or after such change, the Administrative Agent, the Lenders and Borrowers shall negotiate in good faith to amend such provision to preserve the original intent thereof in light of such change (subject to the approval of the Required Lenders); provided that , until so amended, (i) such ratio or requirement shall continue to be computed in accordance with GAAP as in effect and as applied prior to such change therein and (ii) Borrowers shall
provide to the Administrative Agent and the Lenders financial statements and other documents required under this Agreement which include a reconciliation between calculations of such ratio or requirement made before and after giving effect to such change in GAAP or the application thereof. When used herein, the term “ financial statements ” shall include the notes and schedules thereto. Whenever the term “ Borrowers ” or the term “ Parent ” is used in respect of a financial covenant or a related definition, it shall be understood to mean Parent and its Subsidiaries on a consolidated basis unless the context clearly requires otherwise.
1.3. Code .Any terms used in this Agreement that are defined in the Code shall be construed and defined as set forth in the Code unless otherwise defined herein, provided , however , that to the extent that the Code is used to define any term herein and such term is defined differently in different Articles of the Code, the definition of such term contained in Article 9 of the Code shall govern and when used to describe a category or categories of Collateral owned by a Canadian Borrower, such term shall have the definition provided in the PPSA.
1.4. Construction .Unless the context of this Agreement or any other Loan Document clearly requires otherwise, references to the plural include the singular, references to the singular include the plural, the terms “ includes ” and “ including ” are not limiting, and the term “ or ” has, except where otherwise indicated, the inclusive meaning represented by the phrase “ and/or .” The words “ hereof ,” “ herein ,” “ hereby ,” “ hereunder ,” and similar terms in this Agreement or any other Loan Document refer to this Agreement or such other Loan Document, as the case may be, as a whole and not to any particular provision of this Agreement or such other Loan Document, as the case may be. Section, subsection, clause, schedule, and exhibit references herein are to this Agreement unless otherwise specified. Any reference in this Agreement or in the other Loan Documents to any agreement, instrument, or document shall include all alterations, amendments, changes, extensions, modifications, renewals, replacements, substitutions, joinders, and supplements, thereto and thereof, as applicable (subject to any restrictions on such alterations, amendments, changes, extensions, modifications, renewals, replacements, substitutions, joinders, and supplements set forth herein). Any reference herein to the satisfaction or payment or repayment in full of the Obligations shall mean the payment or repayment in full in cash (or collateralization in accordance with the terms hereof) of all Obligations other than contingent indemnification Obligations and other than any Bank Product Obligations that, at such time, are allowed by the applicable Bank Product Provider to remain outstanding and are not required to be repaid or collateralized pursuant to the provisions of this Agreement. Any reference herein to any Person shall be construed to include such Person’s successors and assigns. Any requirement of a writing contained herein or in the other Loan Documents shall be satisfied by the transmission of a Record and any Record transmitted shall constitute a representation and warranty as to the accuracy and completeness of the information contained therein.
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1.5. Schedules and Exhibits .All of the schedules and exhibits attached to this Agreement shall be deemed incorporated herein by reference.
2. LOAN AND TERMS OF PAYMENT.2.1. Revolver Advances .(a) Subject to the terms and conditions of this Agreement, and during the term of this Agreement, (i) each Lender with a US Revolver Commitment agrees (severally, not jointly or jointly and severally) to make advances (“ US Advances ”) to US Borrowers in an aggregate Dollar Equivalent principal amount at any one time outstanding not to exceed such Lender’s Pro Rata Share of an amount equal to the lesser of (x) the Maximum US Revolver Amount less the US Letter of Credit Usage, or (y) the US Borrowing Base less the US Letter of Credit Usage, (ii) each Lender with a Canadian Revolver Commitment agrees (severally, not jointly or jointly and severally) to make advances (“ Canadian Advances ”) to Canadian Borrowers in an aggregate Dollar Equivalent principal amount at any one time outstanding not to exceed such Lender’s Pro Rata Share of an amount equal to the lesser of (x) the Maximum Canadian Revolver Amount less the Canadian Letter of Credit Usage, or (y) the Canadian Borrowing Base less the Canadian Letter of Credit Usage and (iii) each Lender with a European Revolver Commitment agrees (severally, not jointly or jointly and severally) to make advances (“ European Advances ”) to European Borrowers in an aggregate Dollar Equivalent principal amount at any one time outstanding not to exceed such Lender’s Pro Rata Share of an amount equal to the lesser of (x) the Maximum European Revolver Amount less the European Letter of Credit Usage, or (y) the European Borrowing Base less the European Letter of Credit Usage. Notwithstanding anything to the contrary contained herein, with respect to any Offshore Currency Rate Loan, the Pro Rata Share of each Non-Offshore Currency Lender shall be fronted by the Fronting Lender (with each Non-Offshore Currency Lender hereby agreeing to participate in the risk associated with such Offshore Currency Rate Loan in accordance with Section 2.17 ), with each Non-Offshore Currency Lender having no obligation or commitment to fund in an Approved Offshore Currency, except as provided in Section 2.17 .(b) Anything to the contrary in this Section 2.1 notwithstanding, Administrative Agent shall have the right to establish reserves (without duplication for reserves established pursuant to the definitions of US Borrowing Base and Foreign Borrowing Base) in such amounts, and with respect to such matters, as Administrative Agent in its Permitted Discretion shall deem necessary or appropriate, against the US Borrowing Base or the Foreign Borrowing Base, as the case may be, including reserves (i) with respect to (A) sums that Borrowers are required to pay by any Section of this Agreement or any other Loan Document (such as taxes, assessments, insurance premiums, or, in the case of leased assets, rents or other amounts payable under such leases) and have failed to pay, and (B) amounts owing by Borrowers or their Significant Subsidiaries to any Person to the extent secured by a Lien on, or trust over, any of the Collateral (other than a Permitted Lien), which Lien or trust, in the Permitted Discretion of Administrative Agent likely would have a
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priority superior to the Agent’s Liens (such as Liens or trusts in favor of landlords, warehousemen, carriers, mechanics, materialmen, laborers, or suppliers, or Liens or trusts for ad valorem , income, payroll, excise, sales, pension plan obligations, or other taxes where given priority under Applicable Law) in and to such item of the Collateral and (ii) after the occurrence and during the continuance of an Event of Default, with respect to such other matters as Administrative Agent in its Permitted Discretion shall deem necessary or appropriate.(c) Amounts borrowed pursuant to this Section 2.1 consisting of US Advances or European Advances shall be denominated in Dollars or an Approved Offshore Currency, and amounts borrowed pursuant to this Section 2.1 consisting of Canadian Advances shall be denominated in Dollars or Canadian Dollars.(d) Amounts borrowed pursuant to this Section 2.1 may be repaid and, subject to the terms and conditions of this Agreement, reborrowed at any time during the term of this Agreement.2.2. Term Loan A .(a) Subject to the terms and conditions of Section 3.2 of this Agreement and the prior or contemporaneous funding of the Term B Debt, within 35 days following the Closing Date each Lender with a Term Loan A Commitment agrees (severally, not jointly or jointly and severally) to make in one draw term loans (collectively, the “ Term Loan A ”) to US Borrowers in an amount equal to such Lender’s Pro Rata Share of the Term Loan A Amount. The Term Loan A shall, subject to adjustment as provided below, be repaid on the following dates and in the following amounts:
Except as provided in Section 2.4(c) hereof and except in connection with the repayment of all of the Obligations and the termination of this Agreement, the US Borrowers may, at any time and from time to time, upon at least 5 Business Days’ prior written notice to Administrative Agent, prepay the principal amount of the Term Loan A in whole or in part (each an “ Optional Prepayment ”); provided that any such partial prepayment shall be in an amount equal to $5,000,000 or a higher integral multiple of $1,000,000. The outstanding unpaid principal balance and all accrued and unpaid interest under the Term Loan A shall be due and payable on the date of termination of this Agreement, whether by its terms, by prepayment, or by acceleration. All amounts outstanding under the Term Loan A shall constitute Obligations.
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(b) Each Optional Prepayment of the Term Loan A shall be applied to the remaining installments due on the Term Loan A in inverse order of maturity.(c) Once any portion of the Term Loan A has been paid or prepaid, it may not be reborrowed.(d) Amounts borrowed pursuant to this Section 2.2 shall be denominated in Dollars.2.3. Borrowing Procedures and Settlements .(a) Procedure for Borrowing.(i) Each US Borrowing shall be made by an irrevocable written request by an Authorized Person delivered to Administrative Agent specifying (i) the amount of such US Borrowing, (ii) the currency in which such US Borrowing will be made and (iii) the requested Funding Date, which shall be a Business Day. Unless US Swing Lender is not obligated to make a US Swing Loan pursuant to Section 2.3(b) below or Administrative Borrower elects such US Borrowing to be an Offshore Currency Rate Loan or other LIBOR Rate Loan pursuant to Section 2.13(b) , such notice must be received by Administrative Agent no later than 10:00 a.m. (California time) on the Business Day that is the requested Funding Date; provided , however , that if (x) US Swing Lender is not obligated to make a US Swing Loan as to a requested US Borrowing and Administrative Borrower has not elected such US Borrowing be an Offshore Currency Rate Loan or other LIBOR Rate Loan, such notice must be received by Administrative Agent no later than 10:00 a.m. (California time) on the Business Day prior to the date that is the requested Funding Date, (y) Administrative Borrower requests that such US Borrowing be a LIBOR Rate Loan denominated in Dollars, such notice must be received by Administrative Agent no later than 11:00 a.m. (California time) at least 3 Business Days prior to the requested Funding Date, or (z) Administrative Borrower requests that such US Borrowing be an Offshore Currency Rate Loan, such notice must be received by Administrative Agent no later than 10:00 a.m. (California time) 3 Business Days prior to the date that is the requested Funding Date. At Administrative Agent’s election with respect to US Borrowings denominated in Dollars, in lieu of delivering the above-described written request, any Authorized Person may give Administrative Agent telephonic notice of such request by the required time. In such circumstances, US Borrowers agree that any such telephonic notice will be confirmed in writing within 24 hours of the giving of such telephonic notice, but the failure to provide such written confirmation shall not affect the validity of the request.(ii) Each Canadian Borrowing shall be made by an irrevocable written request by an Authorized Person delivered to Canadian Administrative Agent specifying (i) the amount of such Canadian Borrowing, (ii) the currency in which such Canadian Borrowing will be made and (iii) the requested Funding Date, which shall be a Business Day. Unless Administrative Borrower elects such Canadian Borrowing to be a LIBOR Rate Loan pursuant to Section 2.13(b) , such notice must be received by Canadian Administrative Agent no later than 10:00 a.m. (California time) on the Business Day prior to
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the date that is the requested Funding Date; provided , however , that if Administrative Borrower requests that such Canadian Borrowing be a LIBOR Rate Loan denominated in Dollars or Canadian Dollars, such notice must be received by Canadian Administrative Agent no later than 11:00 a.m. (California time) at least 3 Business Days prior to the requested Funding Date.(iii) Each European Borrowing shall be made by an irrevocable written request by an Authorized Person delivered to European Administrative Agent specifying (i) the amount of such European Borrowing, (ii) the currency in which such European Borrowing will be made and (iii) the requested Funding Date, which shall be a Business Day. Unless European Swing Lender is not obligated to make a European Swing Loan pursuant to Section 2.3(b) below or Administrative Borrower elects such European Borrowing to be an Offshore Currency Rate Loan or other LIBOR Rate Loan pursuant to Section 2.13(b) , such notice must be received by European Administrative Agent no later than 10:00 a.m. (California time) on the Business Day that is the requested Funding Date; provided , however , that if (x) European Swing Lender is not obligated to make a European Swing Loan as to a requested European Borrowing and Administrative Borrower has not elected such European Borrowing be an Offshore Currency Rate Loan or other LIBOR Rate Loan, such notice must be received by European Administrative Agent no later than 10:00 a.m. (California time) on the Business Day prior to the date that is the requested Funding Date, (y) Administrative Borrower requests that such European Borrowing be a LIBOR Rate Loan denominated in Dollars, such notice must be received by European Administrative Agent no later than 11:00 a.m. (California time) at least 3 Business Days prior to the requested Funding Date, or (z) Administrative Borrower requests that such European Borrowing be an Offshore Currency Rate Loan, such notice must be received by European Administrative Agent no later than 10:00 a.m. (California time) 3 Business Days prior to the date that is the requested Funding Date. At European Administrative Agent’s election with respect to European Borrowings denominated in Dollars, in lieu of delivering the above-described written request, any Authorized Person may give European Administrative Agent telephonic notice of such request by the required time. In such circumstances, European Borrowers agree that any such telephonic notice will be confirmed in writing within 24 hours of the giving of such telephonic notice, but the failure to provide such written confirmation shall not affect the validity of the request.(iv) The Borrowing of the Term Loan A shall be made by an irrevocable written request by an Authorized Person delivered to Administrative Agent. Unless Administrative Borrower elects such Borrowing to be a LIBOR Rate Loan pursuant to Section 2.13(b) , such notice must be received by Administrative Agent no later than 10:00 a.m. (California time) on the Business Day prior to the date that is the requested Funding Date specifying the requested Funding Date, which shall be a Business Day; provided , however , that if Administrative Borrower requests that such Borrowing be a LIBOR Rate Loan, such notice must be received by Administrative Agent no later than 11:00 a.m. (California time) at least 3 Business Days prior to the requested Funding Date. At Administrative Agent’s election, in lieu of delivering the above-described written request, any Authorized Person may give Administrative Agent telephonic notice of such request by
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the required time. In such circumstances, US Borrowers agree that any such telephonic notice will be confirmed in writing within 24 hours of the giving of such telephonic notice, but the failure to provide such written confirmation shall not affect the validity of the request.(b) Making of Swing Loans.(i) In the case of a request for a US Advance and so long as (i) such US Advance is to be denominated in Dollars and (ii) either (A) the aggregate amount of US Swing Loans made since the last Settlement Date and not since repaid plus the amount of the requested US Advance does not exceed $5,000,000, or (B) US Swing Lender, in its sole discretion, shall agree to make a US Swing Loan notwithstanding the foregoing limitation, US Swing Lender, as a Lender, shall make a US Advance in the amount of such US Borrowing (any such US Advance made solely by US Swing Lender as a Lender pursuant to this Section 2.3(b)(i) being referred to as a “ US Swing Loan ” and such US Advances being referred to collectively as “ US Swing Loans ”) available to US Borrowers on the Funding Date applicable thereto by transferring immediately available funds to the applicable US Designated Account. Each US Swing Loan shall be deemed to be a US Advance hereunder and shall be subject to all the terms and conditions applicable to other US Advances, except that all payments on any US Swing Loan shall be payable to US Swing Lender as a Lender solely for its own account. Subject to the provisions of Section 2.3(d)(iv) , US Swing Lender as a Lender shall not make and shall not be obligated to make any US Swing Loan if US Swing Lender has actual knowledge that (i) one or more of the applicable conditions precedent set forth in Section 3.1 or 3.2 are required to, but will not, be satisfied on the requested Funding Date for the applicable US Borrowing unless such condition has been waived in accordance with the terms of this Agreement, or (ii) the requested US Borrowing would exceed the US Availability on such Funding Date. US Swing Lender as a Lender shall not otherwise be required to determine whether the applicable conditions precedent set forth in Section 3 have been satisfied on the Funding Date applicable thereto prior to making any US Swing Loan. The US Swing Loans shall be secured by the Agent’s Liens in the US Collateral, constitute US Advances and Obligations hereunder, and bear interest at the rate applicable from time to time to US Advances that are Base Rate Loans.(ii) In the case of a request for a Canadian Advance denominated in Dollars or Canadian Dollars and so long as either (i) the Dollar Equivalent of the aggregate amount of Canadian Swing Loans made since the last Settlement Date and not since repaid plus the Dollar Equivalent amount of the requested Canadian Advance does not exceed $2,500,000, or (ii) Canadian Swing Lender, in its sole discretion, shall agree to make a Canadian Swing Loan notwithstanding the foregoing limitation, Canadian Swing Lender, as a Lender, shall make a Canadian Advance in the amount of such Canadian Borrowing (any such Canadian Advance made solely by Canadian Swing Lender as a Lender pursuant to this Section 2.3(b)(ii) being referred to as a “ Canadian Swing Loan ” and such Canadian Advances being referred to collectively as “ Canadian Swing Loans ”) available to Canadian Borrowers on the Funding Date applicable thereto by transferring immediately available funds to the applicable Canadian Designated Account. Each Canadian Swing Loan shall be deemed to be a Canadian Advance hereunder and shall be subject to all the terms and conditions applicable to other Canadian Advances, except that all payments on any Canadian
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Swing Loan shall be payable to Canadian Swing Lender as a Lender solely for its own account. Subject to the provisions of Section 2.3(d)(iv) , Canadian Swing Lender as a Lender shall not make and shall not be obligated to make any Canadian Swing Loan if Canadian Swing Lender has actual knowledge that (i) one or more of the applicable conditions precedent set forth in Section 3.1 or 3.2 are required to, but will not, be satisfied on the requested Funding Date for the applicable Canadian Borrowing unless such condition has been waived in accordance with the terms of this Agreement, or (ii) the Dollar Equivalent of the requested Canadian Borrowing would exceed the Dollar Equivalent of the Canadian Availability on such Funding Date. Canadian Swing Lender as a Lender shall not otherwise be required to determine whether the applicable conditions precedent set forth in Section 3 have been satisfied on the Funding Date applicable thereto prior to making any Canadian Swing Loan. The Canadian Swing Loans shall be secured by the Agent’s Liens in the Collateral, constitute Canadian Advances and Obligations hereunder, and bear interest at the rate applicable from time to time to Canadian Advances that are Base Rate Loans.(iii) In the case of a request for a European Advance and so long as (i) such European Advance is to be denominated in Dollars and (ii) either (A) the aggregate amount of European Swing Loans made since the last Settlement Date and not since repaid plus the Dollar Equivalent amount of the requested European Advance does not exceed $2,500,000, or (B) European Swing Lender, in its sole discretion, shall agree to make a European Swing Loan notwithstanding the foregoing limitation, European Swing Lender, as a Lender, shall make a European Advance in the amount of such European Borrowing (any such European Advance made solely by European Swing Lender as a Lender pursuant to this Section 2.3(b)(iii) being referred to as a “ European Swing Loan ” and such European Advances being referred to collectively as “ European Swing Loans ”) available to European Borrowers on the Funding Date applicable thereto by transferring immediately available funds to the applicable European Designated Account. Each European Swing Loan shall be deemed to be a European Advance hereunder and shall be subject to all the terms and conditions applicable to other European Advances, except that all payments on any European Swing Loan shall be payable to European Swing Lender as a Lender solely for its own account. Subject to the provisions of Section 2.3(d)(iv) , European Swing Lender as a Lender shall not make and shall not be obligated to make any European Swing Loan if European Swing Lender has actual knowledge that (i) one or more of the applicable conditions precedent set forth in Section 3.1 or 3.2 are required to, but will not, be satisfied on the requested Funding Date for the applicable European Borrowing unless such condition has been waived in accordance with the terms of this Agreement, or (ii) the Dollar Equivalent of the requested European Borrowing would exceed the Dollar Equivalent of the European Availability on such Funding Date. European Swing Lender as a Lender shall not otherwise be required to determine whether the applicable conditions precedent set forth in Section 3 have been satisfied on the Funding Date applicable thereto prior to making any European Swing Loan. The European Swing Loans shall be secured by the Agent’s Liens in the Collateral, constitute European Advances and Obligations hereunder, and bear interest at the rate applicable from time to time to European Advances that are Base Rate Loans.
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(c) Making of Loans.(i) In the event that the US Swing Lender is not obligated to make a US Swing Loan, then promptly after receipt of a request for a US Borrowing pursuant to Section 2.3(a) , (A) in the case of Borrowings other than Offshore Currency Rate Loans, Administrative Agent shall notify the US Lenders, not later than 1:00 p.m. (California time) on the Business Day immediately preceding the Funding Date applicable thereto by telecopy, telephone, or other similar form of transmission, of the requested US Borrowing (provided, that notice of a requested LIBOR Rate Loan shall be provided as set forth in Section 2.13(b)), and (B) in the case of Borrowings consisting of Offshore Currency Rate Loans, Administrative Agent shall notify the US Lenders, not later than 1:00 p.m. (California time) at least 3 Business Days prior to the Funding Date applicable thereto by telecopy, telephone, or other similar form of transmission, of the requested US Borrowing. Each US Lender shall make the amount of such US Lender’s Pro Rata Share of the requested US Borrowing available to Administrative Agent in immediately available funds and in the Applicable Currency, to the applicable Administrative Agent’s Account, not later than 10:00 a.m. (California time) on the Funding Date applicable thereto. After Administrative Agent’s receipt of the proceeds of such US Advances, Administrative Agent shall promptly make the proceeds thereof available to Administrative Borrower, for the benefit of the US Borrowers, on the applicable Funding Date by transferring immediately available funds equal to such proceeds received by Administrative Agent to the applicable US Designated Account; provided , however , that, subject to the provisions of Section 2.3(d)(iv) , Administrative Agent shall not request any US Lender to make, and no US Lender shall have the obligation to make, any US Advance if Administrative Agent shall have actual knowledge that (1) one or more of the applicable conditions precedent set forth in Section 3.1 or 3.2 are required to, but will not, be satisfied on the requested Funding Date for the applicable US Borrowing unless such condition has been waived, or (2) the Dollar Equivalent of the requested US Borrowing would exceed the US Availability on such Funding Date.(ii) In the event that the Canadian Swing Lender is not obligated to make a Canadian Swing Loan, then promptly after receipt of a request for a Canadian Borrowing pursuant to Section 2.3(a) , Canadian Administrative Agent shall notify the Canadian Lenders, not later than 1:00 p.m. (California time) on the Business Day immediately preceding the Funding Date applicable thereto by telecopy, telephone, or other similar form of transmission, of the requested Canadian Borrowing (provided, that notice of a requested LIBOR Rate Loan shall be provided as set forth in Section 2.13(b)). Each Canadian Lender shall make the amount of such Canadian Lender’s Pro Rata Share of the requested Canadian Borrowing available to Canadian Administrative Agent in immediately available funds and in the Applicable Currency, to the applicable Canadian Administrative Agent’s Account, not later than 10:00 a.m. (California time) on the Funding Date applicable thereto. After Canadian Administrative Agent’s receipt of the proceeds of such Canadian Advances, Canadian Administrative Agent shall promptly make the proceeds thereof available to Canadian Administrative Borrower, on the applicable Funding Date by transferring immediately available funds equal to such proceeds received by Canadian Administrative Agent to the applicable Canadian Designated Account; provided , however ,
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that, subject to the provisions of Section 2.3(d)(iv) , Canadian Administrative Agent shall not request any Canadian Lender to make, and no Canadian Lender shall have the obligation to make, any Canadian Advance if Canadian Administrative Agent shall have actual knowledge that (1) one or more of the applicable conditions precedent set forth in Section 3.1 or 3.2 are required to, but will not, be satisfied on the requested Funding Date for the applicable Canadian Borrowing unless such condition has been waived, or (2) the Dollar Equivalent of the requested Canadian Borrowing would exceed the Dollar Equivalent of the Canadian Availability on such Funding Date.(iii) In the event that the European Swing Lender is not obligated to make a European Swing Loan, then promptly after receipt of a request for a European Borrowing pursuant to Section 2.3(a) , (A) in the case of Borrowings other than Offshore Currency Rate Loans, European Administrative Agent shall notify the European Lenders, not later than 1:00 p.m. (California time) on the Business Day immediately preceding the Funding Date applicable thereto by telecopy, telephone, or other similar form of transmission, of the requested European Borrowing (provided, that notice of a requested LIBOR Rate Loan shall be provided as set forth in Section 2.13(b)), and (B) in the case of Borrowings consisting of Offshore Currency Rate Loans, European Administrative Agent shall notify the European Lenders, not later 1:00 p.m. (California time) at least 3 Business Days prior to the Funding Date applicable thereto by telecopy, telephone, or other similar form of transmission, of the requested European Borrowing. Each European Lender shall make the amount of such European Lender’s Pro Rata Share of the requested European Borrowing available to European Administrative Agent in immediately available funds and in the Applicable Currency, to the applicable European Administrative Agent’s Account, not later than 10:00 a.m. (California time) on the Funding Date applicable thereto. After European Administrative Agent’s receipt of the proceeds of such Advances, European Administrative Agent shall promptly make the proceeds thereof available to European Administrative Borrower, on the applicable Funding Date by transferring immediately available funds equal to such proceeds received by European Administrative Agent to the applicable European Designated Account; provided , however , that, subject to the provisions of Section 2.3(d)(iv) , European Administrative Agent shall not request any European Lender to make, and no European Lender shall have the obligation to make, any European Advance if European Administrative Agent shall have actual knowledge that (1) one or more of the applicable conditions precedent set forth in Section 3.1 or 3.2 are required to, but will not, be satisfied on the requested Funding Date for the applicable European Borrowing unless such condition has been waived, or (2) the Dollar Equivalent of the requested European Borrowing would exceed the Dollar Equivalent of the European Availability on such Funding Date.(iv) Unless Administrative Agent or European Administrative Agent, as applicable, receives notice from a Lender prior to 9:00 a.m. (California time) on the date of a Borrowing other than Approved Offshore Rate Loans and prior to 1:00 p.m. (California time) 3 Business Days prior to the date of a Borrowing consisting of Approved Offshore Rate Loans, that such Lender will not make available as and when required hereunder to such Agent for the account of the US Borrowers or the European Borrowers, as
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the case may be, the amount of that Lender’s Pro Rata Share of the Borrowing, such Agent may assume that each Lender has made or will make such amount available to such Agent in immediately available funds and in the Applicable Currency on the Funding Date and such Agent may (but shall not be so required), in reliance upon such assumption, make available on such date, with respect to any US Borrowing, to the US Borrowers or, with respect to any European Borrowing, to the European Borrowers, a corresponding amount. If and to the extent any Lender shall not have made its full amount available to Administrative Agent or European Administrative Agent, as applicable, in immediately available funds and such Agent in such circumstances has made available to US Borrowers or European Borrowers, as the case may be, such amount, that Lender shall on the Business Day following such Funding Date make such amount available to such Agent, together with interest at the Defaulting Lender Rate for each day during such period. A notice submitted by Administrative Agent or European Administrative Agent, as applicable, to any Lender with respect to amounts owing under this subsection shall be conclusive, absent manifest error. If such amount is so made available, such payment to Administrative Agent or European Administrative Agent, as applicable, shall constitute such Lender’s Advance on the date of such Borrowing for all purposes of this Agreement. If such amount is not made available to Administrative Agent or European Administrative Agent, as applicable, on the Business Day following the Funding Date, such Agent will notify Administrative Borrower of such failure to fund and, upon demand by Administrative Agent, with respect to any US Borrowing, US Borrowers shall pay such amount to Administrative Agent for Administrative Agent’s account, and, with respect to any European Borrowing, European Borrowers shall pay such amount to European Administrative Agent for European Administrative Agent’s account, together with interest thereon for each day elapsed since the date of such Borrowing, at a rate per annum equal to the interest rate applicable at the time to the Advances comprising such Borrowing. Unless Canadian Administrative Agent receives notice from a Lender prior to 9:00 a.m. (California time) on the date of a Borrowing, that such Lender will not make available as and when required hereunder to Canadian Administrative Agent for the account of the Canadian Borrowers the amount of that Lender’s Pro Rata Share of the Borrowing, Canadian Administrative Agent may assume that each Lender has made or will make such amount available to Canadian Administrative Agent in immediately available funds and in the Applicable Currency on the Funding Date and Canadian Administrative Agent may (but shall not be so required), in reliance upon such assumption, make available on such date, with respect to any Canadian Borrowing, to the Canadian Borrowers, a corresponding amount. If and to the extent any Canadian Lender shall not have made its full amount available to Canadian Administrative Agent in immediately available funds and Canadian Administrative Agent in such circumstances has made available to Canadian Borrowers such amount, that Lender shall on the Business Day following such Funding Date make such amount available to Canadian Administrative Agent, together with interest at the Defaulting Lender Rate for each day during such period. A notice submitted by Canadian Administrative Agent to any Canadian Lender with respect to amounts owing under this subsection shall be conclusive, absent manifest error. If such amount is so made available, such payment to Canadian Administrative Agent shall constitute such Canadian Lender’s Advance on the date of such Borrowing for all purposes of this Agreement. If such amount is not made available to Canadian Administrative Agent on the Business Day following the Funding Date, such
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Agent will notify Administrative Borrower of such failure to fund and, upon demand by Canadian Administrative Agent, with respect to any Canadian Borrowing, Canadian Borrowers shall pay such amount to Canadian Administrative Agent for Canadian Administrative Agent’s account, together with interest thereon for each day elapsed since the date of such Borrowing, at a rate per annum equal to the interest rate applicable at the time to the Advances comprising such Borrowing. The failure of any Lender to make any Advance on any Funding Date shall not relieve any other Lender of any obligation hereunder to make an Advance on such Funding Date, but no Lender shall be responsible for the failure of any other Lender to make the Advance to be made by such other Lender on any Funding Date.(v) No Agent shall be obligated to transfer to a Defaulting Lender any payments made by US Borrowers, Canadian Borrowers or European Borrowers, as the case may be, to such Agent for the Defaulting Lender’s benefit, and, in the absence of such transfer to the Defaulting Lender, such Agent shall transfer any such payments to each other non-Defaulting Lender member of the Lender Group ratably in accordance with their Commitments (but only to the extent that such Defaulting Lender’s Advance was funded by the other members of the Lender Group) or, if so directed by Administrative Borrower and if no Default or Event of Default had occurred and is continuing (and to the extent such Defaulting Lender’s Advance was not funded by the Lender Group), such Agent shall retain same to be re-advanced to the applicable Borrowers as if such Defaulting Lender had made Advances to such Borrowers. Subject to the foregoing, Administrative Agent, Canadian Administrative Agent or European Administrative Agent, as applicable, may hold and, in its Permitted Discretion, re-lend to the applicable Borrowers for the account of such Defaulting Lender the amount of all such payments received and retained by such Agent for the account of such Defaulting Lender. Solely for the purposes of voting or consenting to matters with respect to the Loan Documents, such Defaulting Lender shall be deemed not to be a “ Lender ” and such Lender’s Commitment shall be deemed to be zero. This Section shall remain effective with respect to such Lender until (x) the Obligations under this Agreement shall have been declared or shall have become immediately due and payable, (y) the non-Defaulting Lenders, Administrative Agent, Canadian Administrative Agent or European Administrative Agent, as applicable, and Administrative Borrower shall have waived such Defaulting Lender’s default in writing, or (z) the Defaulting Lender makes its Pro Rata Share of the applicable Advance and pays to Administrative Agent, Canadian Administrative Agent or European Administrative Agent, as applicable, all amounts owing by Defaulting Lender in respect thereof. The operation of this Section shall not be construed to increase or otherwise affect the Commitment of any Lender, to relieve or excuse the performance by such Defaulting Lender or any other Lender of its duties and obligations hereunder, or to relieve or excuse the performance by Borrowers of their duties and obligations hereunder to Agents or to the Lenders other than such Defaulting Lender. Any such failure to fund by any Defaulting Lender shall constitute a material breach by such Defaulting Lender of this Agreement and shall entitle Administrative Borrower at its option, upon written notice to Administrative Agent, to arrange for a substitute Lender to assume the Advances and Commitment of such Defaulting Lender, such substitute Lender to be acceptable to Administrative Agent. In connection with the arrangement of such a substitute Lender, the Defaulting Lender shall have no right to refuse to be replaced hereunder, and agrees to
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execute and deliver a completed form of Assignment and Acceptance in favor of the substitute Lender (and agrees that it shall be deemed to have executed and delivered such document if it fails to do so) subject only to being repaid its share of the outstanding Obligations (other than Bank Product Obligations, but including an assumption of its Pro Rata Share of the Risk Participation Liability) without any premium or penalty of any kind whatsoever; provided however, that any such assumption of the Commitment of such Defaulting Lender shall not be deemed to constitute a waiver of any of the Lender Groups’ or Borrowers’ rights or remedies against any such Defaulting Lender arising out of or in relation to such failure to fund.(d) Protective Advances and Optional Overadvances .(i) Administrative Agent hereby is authorized by Borrowers and the Lenders, from time to time in Administrative Agent’s sole discretion, (A) after the occurrence and during the continuance of a Default or an Event of Default, or (B) at any time that any of the other applicable conditions precedent set forth in Section 3 are not satisfied, to make US Advances to US Borrowers on behalf of the US Lenders that Administrative Agent, in its Permitted Discretion, deems necessary or desirable (1) to preserve or protect the Collateral, or any portion thereof, (2) to enhance the likelihood of repayment of the Obligations (other than the Bank Product Obligations), or (3) to pay any other amount chargeable to US Borrowers pursuant to the terms of this Agreement, including Lender Group Expenses and the costs, fees, and expenses described in Section 10 (any of the Advances described in this Section 2.3(d)(i) shall be referred to as “ US Protective Advances ”); provided, that the aggregate Dollar Equivalent of the principal amount of US Protective Advances made pursuant to this Section 2.3(d)(i) , when taken together with the Dollar Equivalent of the outstanding principal amount of Overadvances made pursuant to Section 2.3(d)(iv) , Canadian Protective Advances made pursuant to Section 2.3(d)(ii) and European Protective Advances made pursuant to Section 2.3(d)(iii) , shall not exceed at any time an amount equal to the lesser of (x) 10% of the Foreign Borrowing Base (without giving effect to clause (c) of the definition thereof) then in effect and (y) $7,500,000.(ii) Canadian Administrative Agent hereby is authorized by Borrowers and the Lenders, from time to time in Canadian Administrative Agent’s sole discretion, (A) after the occurrence and during the continuance of a Default or an Event of Default, or (B) at any time that any of the other applicable conditions precedent set forth in Section 3 are not satisfied, to make Canadian Advances to Canadian Borrowers on behalf of the Canadian Lenders that Canadian Administrative Agent, in its Permitted Discretion, deems necessary or desirable (1) to preserve or protect the Collateral, or any portion thereof, (2) to enhance the likelihood of repayment of the Obligations (other than the Bank Product Obligations), or (3) to pay any other amount chargeable to Canadian Borrowers pursuant to the terms of this Agreement, including Lender Group Expenses and the costs, fees, and expenses described in Section 10 (any of the Canadian Advances described in this Section 2.3(d)(ii) shall be referred to as “ Canadian Protective Advances ”); provided, that the aggregate Dollar Equivalent of the principal amount of Canadian Protective Advances made pursuant to this Section 2.3(d)(ii) , when taken together with the Dollar Equivalent of the outstanding principal amount of Overadvances made pursuant to Section 2.3(d)(iv) , US
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Protective Advances made pursuant to Section 2.3(d)(i) and European Protective Advances made pursuant to Section 2.3(d)(iii) , shall not exceed at any time an amount equal to the lesser of (x) 10% of the Foreign Borrowing Base (without giving effect to clause (c) of the definition thereof) then in effect and (y) $7,500,000.(iii) European Administrative Agent hereby is authorized by Borrowers and the Lenders, from time to time in European Administrative Agent’s sole discretion, (A) after the occurrence and during the continuance of a Default or an Event of Default, or (B) at any time that any of the other applicable conditions precedent set forth in Section 3 are not satisfied, to make European Advances to European Borrowers on behalf of the European Lenders that European Administrative Agent, in its Permitted Discretion, deems necessary or desirable (1) to preserve or protect the Collateral, or any portion thereof, (2) to enhance the likelihood of repayment of the Obligations (other than the Bank Product Obligations), or (3) to pay any other amount chargeable to European Borrowers pursuant to the terms of this Agreement, including Lender Group Expenses and the costs, fees, and expenses described in Section 10 (any of the European Advances described in this Section 2.3(d)(iii) shall be referred to as “ European Protective Advances ”); provided, that the aggregate Dollar Equivalent of the principal amount of European Protective Advances made pursuant to this Section 2.3(d)(ii) , when taken together with the Dollar Equivalent of the outstanding principal amount of Overadvances made pursuant to Section 2.3(d)(iv) , US Protective Advances made pursuant to Section 2.3(d)(i) and Canadian Protective Advances made pursuant to Section 2.3(d)(ii) , shall not exceed at any time an amount equal to the lesser of (x) 10% of the Foreign Borrowing Base (without giving effect to clause (c) of the definition thereof) then in effect and (y) $7,500,000.(iv) Any contrary provision of this Agreement notwithstanding, the Lenders hereby authorize Administrative Agent, Canadian Administrative Agent, European Administrative Agent, Fronting Lender, US Swing Lender, Canadian Swing Lender, or European Swing Lender, as applicable, and Administrative Agent, Canadian Administrative Agent, European Administrative Agent, Fronting Lender, US Swing Lender, Canadian Swing Lender, or European Swing Lender, as applicable, may, but is not obligated to, knowingly and intentionally, continue to make Advances (including Swing Loans) to Borrowers notwithstanding that an Overadvance exists or thereby would be created, so long as (A) after giving effect to such Advances, (1) the outstanding US Revolver Usage does not exceed the US Borrowing Base by more than $7,500,000 and (2) the outstanding Revolver Usage does not exceed the Foreign Borrowing Base (without giving effect to clause (c) of the definition thereof) by more than the lesser of (x) 10% of the Foreign Borrowing Base (without giving effect to clause (c) of the definition thereof) then in effect and (y) $7,500,000, (B) after giving effect to such Advances, the outstanding Revolver Usage (except for and excluding amounts charged to the Loan Accounts for interest, fees, or Lender Group Expenses) does not exceed the amount equal to the Maximum Revolver Amount less the Availability Reserve, (C) the aggregate Dollar Equivalent of the principal amount of Overadvances made pursuant to this Section 2.3(d)(iv) , when taken together with the Dollar Equivalent of the outstanding principal amount of Protective Advances made pursuant to Sections 2.3(d)(i), (ii) and (iii) , does not exceed at any time an amount equal to the lesser of
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(x) 10% of the Foreign Borrowing Base (without giving effect to clause (c) of the definition thereof) then in effect and (y) $7,500,000 and (D) at the time of the making of such Advance, such Agent does not believe, in good faith, that the Overadvance created by such Advance will be outstanding for more than 90 days. In the event Administrative Agent, Canadian Administrative Agent or European Administrative Agent obtains actual knowledge that the Revolver Usage exceeds the amounts permitted by the immediately foregoing provisions, regardless of the amount of, or reason for, such excess, Administrative Agent shall notify the Lenders as soon as practicable (and prior to making any (or any additional) intentional Overadvances (except for and excluding amounts charged to the Loan Accounts for interest, fees, or Lender Group Expenses) unless such Agent determines that prior notice would result in imminent harm to the Collateral or its value), and the Lenders with Revolver Commitments thereupon shall, together with such Agent, jointly determine the terms of arrangements that shall be implemented with Borrowers intended to reduce, within a reasonable time, the outstanding principal amount of the Advances to Borrowers to an amount permitted by the foregoing provisions. In such circumstances, if any Lender disagrees with the proposed terms of reduction or repayment of any Overadvance, the terms of reduction or repayment thereof shall be implemented according to the determination of the Required Lenders. Each Lender with a Revolver Commitment shall be obligated to settle with Administrative Agent, Canadian Administrative Agent or European Administrative Agent, as applicable, as provided in Section 2.3(e) for the amount of such Lender’s Pro Rata Share of any unintentional Overadvances by such Agent reported to such Lender, any intentional Overadvances made as permitted under this Section 2.3(d)(iv) , and any Overadvances resulting from the charging to a Loan Account of interest, fees, or Lender Group Expenses.(v) Each Protective Advance and each Overadvance shall be deemed to be an Advance hereunder, except that no Protective Advance or Overadvance shall be eligible to be a LIBOR Rate Loan and all payments on the US Protective Advances and European Protective Advances shall be payable to Administrative Agent or European Administrative Agent, as the case may be, solely for its own account (to the extent such Advances have not been settled with Lenders pursuant to clause (e) of this Section) and all payments on the Canadian Protective Advances shall be payable to Canadian Administrative Agent solely for its own account (to the extent such Advances have not been settled with Lenders pursuant to clause (e) of this Section). The Protective Advances and Overadvances shall be repayable on demand, secured by the Agent’s Liens (provided that Protective Advances and Overadvances to US Borrowers shall only be secured by the US Collateral), and shall constitute Obligations hereunder. Protective Advances and Overadvances denominated in Dollars shall bear interest at the rate applicable from time to time to Advances that are Base Rate Loans denominated in Dollars, Protective Advances and Overadvances denominated in an Approved Offshore Currency shall bear interest at the rate applicable from time to time to Advances that are LIBOR Rate Loans denominated in such Approved Offshore Currency with an Interest Period of one month’s duration and Canadian Protective Advances and Canadian Overadvances denominated in Canadian Dollars shall bear interest at the rate applicable from time to time to Canadian Advances that are Base Rate Loans denominated in Canadian Dollars. The provisions of this Section 2.3(d) are for
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the exclusive benefit of Agents, Fronting Lender, Swing Lenders, and the Lenders and are not intended to benefit any Borrower in any way.(e) Settlement. It is agreed, subject to the last sentence of Section 2.1(a) , that each Lender’s funded portion of the Advances is intended by the Lenders to equal, at all times, such Lender’s Pro Rata Share of the outstanding Advances. Such agreement notwithstanding, Agents, Fronting Lender, Swing Lenders, and the other Lenders agree (which agreement shall not be for the benefit of any Borrower) that in order to facilitate the administration of this Agreement and the other Loan Documents, settlement among the Lenders as to the Advances, the Swing Loans, and the Protective Advances shall take place on a periodic basis in accordance with the following provisions:(i) Administrative Agent, Canadian Administrative Agent or European Administrative Agent, as applicable, shall request settlement (“ Settlement ”) with the Lenders on a weekly basis, or on a more frequent basis if so determined by such Agent, (1) on behalf of US Swing Lender, with respect to each outstanding US Swing Loan, (2) on behalf of Canadian Swing Lender, with respect to each outstanding Canadian Swing Loan, (3) on behalf of European Swing Lender, with respect to each outstanding European Swing Loan, (4) for itself, with respect to the outstanding Protective Advances, and (5) with respect to Loan Parties’ Collections received, as to each by notifying the Lenders by telecopy, telephone, or other similar form of transmission, of such requested Settlement, no later than 2:00 p.m. (California time) on the Business Day immediately prior to the date of such requested Settlement (the date of such requested Settlement being the “ Settlement Date ”). Such notice of a Settlement Date shall include a summary statement of the amount of outstanding Advances, Swing Loans, and Protective Advances for the period since the prior Settlement Date. Subject to the terms and conditions contained herein (including Section 2.3(c)(v) ): (u) if a Lender’s balance of the US Advances (including US Swing Loans and US Protective Advances) exceeds such Lender’s Pro Rata Share of the US Advances (including US Swing Loans and US Protective Advances) as of a Settlement Date, then Administrative Agent shall, by no later than 12:00 p.m. (California time) on the Settlement Date, transfer in immediately available funds to a Deposit Account of such Lender (as such Lender may designate), an amount in the Applicable Currency such that each such Lender shall, upon receipt of such amount, have as of the Settlement Date, its Pro Rata Share of the US Advances (including US Swing Loans and US Protective Advances), (v) if a Lender’s balance of the European Advances (including European Swing Loans and European Protective Advances) exceeds such Lender’s Pro Rata Share of the European Advances (including European Swing Loans and European Protective Advances) as of a Settlement Date, then European Administrative Agent shall, by no later than 12:00 p.m. (California time) on the Settlement Date, transfer in immediately available funds to a Deposit Account of such Lender (as such Lender may designate), an amount in the Applicable Currency such that each such Lender shall, upon receipt of such amount, have as of the Settlement Date, its Pro Rata Share of the European Advances (including European Swing Loans and European Protective Advances), (w) if a Canadian Lender’s balance of the Canadian Advances (including Canadian Swing Loans and Canadian Protective Advances) exceeds such Canadian Lender’s Pro Rata Share of the Canadian Advances (including Canadian Swing
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Loans and Canadian Protective Advances) as of a Settlement Date, then Canadian Administrative Agent shall, by no later than 12:00 p.m. (California time) on the Settlement Date, transfer in immediately available funds to a Deposit Account of such Canadian Lender (as such Lender may designate), an amount in the Applicable Currency such that each such Lender shall, upon receipt of such amount, have as of the Settlement Date, its Pro Rata Share of the Canadian Advances (including Canadian Swing Loans and Canadian Protective Advances), (x) if a Lender’s balance of the US Advances (including US Swing Loans and US Protective Advances) is less than such Lender’s Pro Rata Share of the US Advances (including US Swing Loans and US Protective Advances) as of a Settlement Date, such Lender shall no later than 12:00 p.m. (California time) on the Settlement Date transfer in immediately available funds to the applicable Administrative Agent’s Account, an amount in the Applicable Currency such that each such Lender shall, upon transfer of such amount, have as of the Settlement Date, its Pro Rata Share of the US Advances (including US Swing Loans and US Protective Advances), (y) if a Canadian Lender’s balance of the Canadian Advances (including Canadian Swing Loans and Canadian Protective Advances) is less than such Lender’s Pro Rata Share of the Canadian Advances (including Canadian Swing Loans and Canadian Protective Advances) as of a Settlement Date, such Canadian Lender shall no later than 12:00 p.m. (California time) on the Settlement Date transfer in immediately available funds to the applicable Canadian Administrative Agent’s Account, an amount in the Applicable Currency such that each such Canadian Lender shall, upon transfer of such amount, have as of the Settlement Date, its Pro Rata Share of the Canadian Advances (including Canadian Swing Loans and Canadian Protective Advances), and (z) if a Lender’s balance of the European Advances (including European Swing Loans and European Protective Advances) is less than such Lender’s Pro Rata Share of the European Advances (including European Swing Loans and European Protective Advances) as of a Settlement Date, such Lender shall no later than 12:00 p.m. (California time) on the Settlement Date transfer in immediately available funds to the applicable European Administrative Agent’s Account, an amount in the Applicable Currency such that each such Lender shall, upon transfer of such amount, have as of the Settlement Date, its Pro Rata Share of the European Advances (including European Swing Loans and European Protective Advances). Such amounts made available to Administrative Agent under clause (x) of the immediately preceding sentence shall be applied against the amounts of the applicable US Swing Loans or US Protective Advances and, together with the portion of such US Swing Loans or US Protective Advances representing the US Swing Lender’s Pro Rata Share thereof, shall constitute US Advances of such Lenders, such amounts made available to Canadian Administrative Agent under clause (y) of the immediately preceding sentence shall be applied against the amounts of the applicable Canadian Swing Loans or Canadian Protective Advances and, together with the portion of such Canadian Swing Loans or Canadian Protective Advances representing the Canadian Swing Lender’s Pro Rata Share thereof, shall constitute Canadian Advances of such Canadian Lenders, and such amounts made available to European Administrative Agent under clause (z) of the immediately preceding sentence shall be applied against the amounts of the applicable European Swing Loans or European Protective Advances and, together with the portion of such European Swing Loans or European Protective Advances representing the European Swing Lender’s Pro Rata Share thereof, shall constitute European Advances of such Lenders. If any such amount is not
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made available to Administrative Agent, Canadian Administrative Agent or European Administrative Agent, as applicable, by any Lender on the Settlement Date applicable thereto to the extent required by the terms hereof, such Agent shall be entitled to recover for its account such amount on demand from such Lender together with interest thereon at the Defaulting Lender Rate.(ii) In determining whether a Lender’s balance of the Advances, Swing Loans, and Protective Advances is less than, equal to, or greater than such Lender’s Pro Rata Share of the Advances, Swing Loans, and Protective Advances as of a Settlement Date, Administrative Agent, Canadian Administrative Agent or European Administrative Agent, as applicable, shall, as part of the relevant Settlement, apply to such balance the portion of payments actually received in good funds by such Agent with respect to principal, interest, fees payable by Borrowers and allocable to the Lenders hereunder, and proceeds of Collateral; provided, that, payments received from Foreign Borrowers and proceeds of Foreign Collateral shall be applied only to the Foreign Advances. To the extent that a net amount is owed to any such Lender after such application, such net amount shall be distributed by such Agent to that Lender as part of the next Settlement.(iii) Between Settlement Dates, (A) Administrative Agent, to the extent no US Protective Advances or US Swing Loans are outstanding, may pay over to US Swing Lender any payments received by Administrative Agent, that in accordance with the terms of this Agreement would be applied to the reduction of the US Advances, for application to US Swing Lender’s Pro Rata Share of the US Advances, (B) Canadian Administrative Agent, to the extent no Canadian Protective Advances or Canadian Swing Loans are outstanding, may pay over to Canadian Swing Lender any payments received by Canadian Administrative Agent, that in accordance with the terms of this Agreement would be applied to the reduction of the Canadian Advances, for application to Canadian Swing Lender’s Pro Rata Share of the Canadian Advances, and (C) European Administrative Agent, to the extent no European Protective Advances or European Swing Loans are outstanding, may pay over to European Swing Lender any payments received by European Administrative Agent, that in accordance with the terms of this Agreement would be applied to the reduction of the European Advances, for application to European Swing Lender’s Pro Rata Share of the European Advances. If, as of any Settlement Date, Collections of US Loan Parties received since the then immediately preceding Settlement Date have been applied to US Swing Lender’s Pro Rata Share of the Advances other than to US Swing Loans, as provided for in the first sentence of this clause (iii), US Swing Lender shall pay to Administrative Agent for the accounts of the Lenders, and Administrative Agent shall pay to the Lenders, to be applied to the outstanding US Advances of such Lenders, an amount such that each Lender shall, upon receipt of such amount, have, as of such Settlement Date, its Pro Rata Share of the US Advances. If, as of any Settlement Date, Collections of Foreign Loan Parties received since the then immediately preceding Settlement Date have been applied to Canadian Swing Lender’s Pro Rata Share of the Canadian Advances other than to Canadian Swing Loans, as provided for in the first sentence of this clause (iii), Canadian Swing Lender shall pay to Canadian Administrative Agent for the accounts of the Canadian Lenders, and Canadian Administrative Agent shall pay to the Canadian Lenders, to be applied to the outstanding
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Canadian Advances of such Canadian Lenders, an amount such that each Canadian Lender shall, upon receipt of such amount, have, as of such Settlement Date, its Pro Rata Share of the Canadian Advances. If, as of any Settlement Date, Collections of Foreign Loan Parties received since the then immediately preceding Settlement Date have been applied to European Swing Lender’s Pro Rata Share of the Advances other than to European Swing Loans, as provided for in the first sentence of this clause (iii), European Swing Lender shall pay to European Administrative Agent for the accounts of the Lenders, and European Administrative Agent shall pay to the Lenders, to be applied to the outstanding European Advances of such Lenders, an amount such that each Lender shall, upon receipt of such amount, have, as of such Settlement Date, its Pro Rata Share of the European Advances. During the period between Settlement Dates, US Swing Lender with respect to US Swing Loans, Canadian Swing Lender with respect to Canadian Swing Loans, European Swing Lender with respect to European Swing Loans, Administrative Agent with respect to US Protective Advances, Canadian Administrative Agent with respect to Canadian Protective Advances, European Administrative Agent with respect to European Protective Advances, and each Lender (subject to the effect of agreements between such Agent and individual Lenders) with respect to the Advances other than Swing Loans and Protective Advances, shall be entitled to interest at the applicable rate or rates payable under this Agreement on the daily amount of funds employed by Swing Lenders, Agents, or the Lenders, as applicable.(f) Notation. Administrative Agent shall record on its books the principal amount of the US Advances (or portion of the Term Loan A, as applicable) owing to each US Lender, including the US Swing Loans owing to each Swing Lender, and US Protective Advances owing to Administrative Agent, and the interests therein of each US Lender, from time to time and such records shall, absent manifest error, conclusively be presumed to be correct and accurate. Administrative Agent and/or Canadian Administrative Agent shall record on its books the principal amount of the Canadian Advances owing to each Canadian Lender, including the Canadian Swing Loans owing to Canadian Swing Lender, and Canadian Protective Advances owing to Canadian Administrative Agent, and the interests therein of each Canadian Lender, from time to time and such records shall, absent manifest error, conclusively be presumed to be correct and accurate. European Administrative Agent shall record on its books the principal amount of the European Advances owing to each European Lender, including European Protective Advances owing to European Administrative Agent, and the interests therein of each European Lender, from time to time and such records shall, absent manifest error, conclusively be presumed to be correct and accurate. In addition, each Lender is authorized, at such Lender’s option, to note the date and amount of each payment or prepayment of principal of such Lender’s Advances (or portion of the Term Loan A, as applicable) in its books and records, including computer records.(g) Lenders’ Failure to Perform. All Advances (other than Swing Loans and Protective Advances) and Term Loan A shall be made by the Lenders contemporaneously and in accordance with their Pro Rata Shares. It is understood that (i) no Lender shall be responsible for any failure by any other Lender to perform its obligation to make any Advance or Term Loan A (or other extension of credit) hereunder, nor shall any Commitment of any Lender be increased or decreased as a result of any failure by any other
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Lender to perform its obligations hereunder, and (ii) no failure by any Lender to perform its obligations hereunder shall excuse any other Lender from its obligations hereunder.2.4. Payments .(a) Payments by Borrowers.(i) Except as otherwise expressly provided herein, all payments by US Borrowers shall be made in the Applicable Currency to the applicable Administrative Agent’s Account for the account of the Lender Group and shall be made in immediately available funds, no later than 11:00 a.m. (California time) on the date specified herein, all payments by Canadian Borrowers shall be made in the Applicable Currency to the applicable Canadian Administrative Agent’s Account for the account of the Lender Group and shall be made in immediately available funds, no later than 11:00 a.m. (California time) on the date specified herein and all payments by European Borrowers shall be made in the Applicable Currency to the applicable European Administrative Agent’s Account for the account of the Lender Group and shall be made in immediately available funds, no later than 11:00 a.m. (California time) on the date specified herein. Any payment received by the applicable Agent later than 11:00 a.m. (California time) shall be deemed to have been received on the following Business Day and any applicable interest or fee shall continue to accrue until such following Business Day. If any payment hereunder becomes due and payable on a day other than a Business Day, except to the extent the amount thereof is charged to a Loan Account pursuant to the terms of this Agreement on or as of such due date, the due date of such payment shall be extended to the next succeeding Business Day.(ii) Unless the applicable Agent receives notice from Administrative Borrower prior to the date on which any payment is due to the Lenders that the applicable Borrowers will not make such payment in full as and when required, such Agent may assume that such Borrowers have made (or will make) such payment in full to such Agent on such date in immediately available funds in the Applicable Currency and such Agent may (but shall not be so required), in reliance upon such assumption, distribute to each Lender on such due date an amount equal to the amount then due such Lender. If and to the extent the applicable Borrowers do not make such payment in full to the applicable Agent on the date when due, each Lender severally shall repay to such Agent on demand such amount distributed to such Lender, together with interest thereon at the Defaulting Lender Rate for each day from the date such amount is distributed to such Lender until the date repaid.(iii) If, notwithstanding the terms of this Agreement, any Agent receives any payment from or on behalf of any Borrower in a currency other than the Applicable Currency, such Agent may convert the payment (including the monetary proceeds of realization upon any Collateral and any funds then held in a cash collateral account) into the Applicable Currency at the Currency Exchange Rate in the manner contemplated by Section 10.4 . To the extent permitted by law, the obligation shall be satisfied only to the extent of the amount actually received by such Agent upon such conversion.
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(b) Apportionment and Application.(i) Except as otherwise provided with respect to Defaulting Lenders and except as otherwise provided in the Loan Documents, aggregate principal and interest payments shall be apportioned ratably among the Lenders (according to the unpaid principal balance of the Obligations to which such payments relate held by each Lender) and payments of fees and expenses (other than fees or expenses that are for an Agent’s separate account, after giving effect to any agreements between an Agent and individual Lenders) shall be apportioned ratably among the Lenders having a Pro Rata Share of the type of Commitment or Obligation to which a particular fee or expense relates. Except as otherwise specifically provided in paragraph (b)(iv) below or Section 2.4(c) or (d) , all Collections, proceeds of Accounts or other Collateral owned by any US Loan Party and payments by any US Loan Party shall be applied in the order of payment set forth in subsection (A) below and all Collections, proceeds of Accounts or other Collateral owned by any Foreign Borrower or Foreign Guarantor and payments by any Foreign Borrower or Foreign Guarantor shall be applied in the order of payment set forth in subsection (B) below.(A) Except as set forth above and subject to the terms of the Intercreditor Agreement, all Collections, proceeds of Accounts or other Collateral owned by any US Loan Party and payments by any US Loan Party shall be applied in the following order of payment:(1) first , ratably to pay any Lender Group Expenses payable by the US Loan Parties then due to Administrative Agent or Collateral Agent or any of the Lenders under the Loan Documents, until paid in full,
(2) second , ratably to pay any fees or premiums payable by US Loan Parties then due to Administrative Agent or Collateral Agent (for their separate account, after giving effect to any agreements between Administrative Agent or Collateral Agent and individual Lenders) or any of the Lenders under the Loan Documents until paid in full,
(3) third , to pay interest due in respect of all US Protective Advances until paid in full,
(4) fourth , ratably to pay interest due in respect of the US Advances (other than US Protective Advances), the US Swing Loans, and the Term Loan A until paid in full,
(5) fifth , to pay the principal of all US Protective Advances until paid in full,
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(6) sixth , ratably to pay all principal amounts then due and payable (other than as a result of an acceleration thereof) with respect to the Term Loan A until paid in full,
(7) seventh , to pay the principal of all US Swing Loans until paid in full,
(8) eighth , so long as no Event of Default has occurred and is continuing, and at Administrative Agent’s election (which election Administrative Agent agrees will not be made if an Overadvance would be created thereby), to pay amounts then due and owing by US Loan Parties in respect of Bank Products, until paid in full,
(9) ninth , so long as no Event of Default has occurred and is continuing, to pay the principal of all US Advances until paid in full; provided , that payments shall be applied first to US Advances that are Base Rate Loans until paid in full and, second, to US Advances that are LIBOR Rate Loans until paid in full,
(10) tenth , if an Event of Default has occurred and is continuing, ratably (i) to pay the principal of all US Advances until paid in full, (ii) to Collateral Agent, to be held by Collateral Agent, for the ratable benefit of Issuing Lender and those Lenders having a Revolver Commitment, as cash collateral in an amount up to 105% of the US Letter of Credit Usage until collateralized in full, and (iii) to Collateral Agent, to be held by Collateral Agent, for the benefit of the Bank Product Providers, as cash collateral in an amount up to the amount of the Bank Product Reserve in respect of Bank Products provided to any US Loan Party established prior to the occurrence of, and not in contemplation of, the subject Event of Default until US Loan Parties’ obligations in respect of such Bank Products have been paid in full or the cash collateral amount has been exhausted,
(11) eleventh , if an Event of Default has occurred and is continuing, to pay the outstanding principal balance of Term Loan A (in the inverse order of the maturity of the installments due thereunder) until Term Loan A is paid in full,
(12) twelfth , if an Event of Default has occurred and is continuing, to pay any other US Obligations (including the provision of amounts to Collateral Agent, to be held by Collateral Agent, for the benefit of the Bank Product Providers, as cash collateral in an amount up to the amount determined by Collateral Agent in its Permitted Discretion as the amount necessary to secure US Loan Parties’ obligations in respect of Bank Products),
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(13) thirteenth , to the payment of the Foreign Obligations in the order of payment set forth in subsection (B) below, until paid in full; and
(14) fourteenth , to US Borrowers (to be wired to the applicable US Designated Account) or such other Person entitled thereto under Applicable Law.
(B) Except as set forth above, all Collections, proceeds of Accounts or other Collateral owned by any Foreign Borrower or Foreign Guarantor and payments by any Foreign Borrower or Foreign Guarantor shall be applied in the following order of payment:(1) first , ratably to pay any Lender Group Expenses payable by the Foreign Borrowers and Foreign Guarantors then due to Canadian Administrative Agent, the European Administrative Agent or Collateral Agent or any of the Lenders under the Loan Documents, until paid in full,
(2) second , ratably to pay any fees or premiums payable by the Foreign Borrowers and Foreign Guarantors then due to Administrative Agent (for its separate account) or any of the Lenders under the Loan Documents until paid in full,
(3) third , to pay interest due in respect of all Protective Advances to Foreign Borrowers until paid in full,
(4) fourth , ratably to pay interest due in respect of the Foreign Advances (other than Protective Advances to Foreign Borrowers), the European Swing Loans and the Canadian Swing Loans until paid in full,
(5) fifth , to pay the principal of all Protective Advances to Foreign Borrowers until paid in full,
(6) sixth , ratably to pay the principal of all European Swing Loans and Canadian Swing Loans until paid in full,
(7) seventh , so long as no Event of Default has occurred and is continuing, and at Administrative Agent’s election (which election Administrative Agent agrees will not be made if an Overadvance would be created thereby), to pay amounts then due and owing by Foreign Borrowers or Foreign Guarantors in respect of Bank Products, until paid in full,
(8) eighth , so long as no Event of Default has occurred and is continuing, ratably, to pay the principal of all Foreign Advances until
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paid in full; provided , that payments applied to Canadian Advances shall be applied first to Canadian Advances that are Base Rate Loans until paid in full and, second, to Canadian Advances that are LIBOR Rate Loans until paid in full,
(9) ninth , if an Event of Default has occurred and is continuing, ratably (i) to pay the principal of all Foreign Advances until paid in full, and (ii) to Collateral Agent, to be held by Collateral Agent, for the ratable benefit of the Canadian Issuing Lender and those Lenders having a Canadian Revolver Commitment, as cash collateral in an amount up to 105% of the Canadian Letter of Credit Usage until collateralized in full, and (iii) to Collateral Agent, to be held by Collateral Agent, for the ratable benefit of the European Issuing Lender and those Lenders having a European Revolver Commitment, as cash collateral in an amount up to 105% of the European Letter of Credit Usage until collateralized in full, and (iv) to Collateral Agent, to be held by Collateral Agent, for the benefit of the Bank Product Providers, as cash collateral in an amount up to the amount of the Foreign Bank Product Reserve in respect of Bank Products provided to Foreign Loan Parties until Foreign Loan Parties’ and the Significant Subsidiaries’ obligations in respect of such Bank Products have been paid in full or the cash collateral amount has been exhausted,
(10) tenth , if an Event of Default has occurred and is continuing, to pay any other Foreign Obligations (including the provision of amounts to Collateral Agent, to be held by Collateral Agent, for the benefit of the Bank Product Providers, as cash collateral in an amount up to the amount determined by Collateral Agent in its Permitted Discretion as the amount necessary to secure Foreign Loan Parties’ obligations in respect of Bank Products), and
(11) eleventh , to Foreign Borrowers (to be wired to the applicable Canadian Designated Account or European Designated Account) or such other Person entitled thereto under Applicable Law;
(ii) Notwithstanding the foregoing Section 2.4(b)(i)(B) , so long as no Event of Default has occurred and is continuing, except as set forth above, all Collections, proceeds of Accounts or other Collateral owned by (i) Canadian Borrowers shall first be applied only to Foreign Obligations of Canadian Borrowers in accordance with Section 2.4(b)(i)(B) and (ii) European Borrowers shall first be applied only to Foreign Obligations of European Borrowers in accordance with Section 2.4(b)(i)(B) .(iii) The applicable Agent promptly shall distribute to each Lender, pursuant to the applicable wire instructions received from each Lender in writing, such funds as it may be entitled to receive, subject to a Settlement delay as provided in Section 2.3(e) .
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(iv) In each instance, so long as no Event of Default has occurred and is continuing, the order of payment provisions of this Section 2.4(b) shall not apply to any payment made by any Loan Party to Administrative Agent, Canadian Administrative Agent or European Administrative Agent, as applicable, and specified by such Loan Party to be for the payment of specific Obligations then due and payable (or prepayable) under any provision of this Agreement.(v) For purposes of the foregoing, “paid in full” means payment of all amounts owing under the Loan Documents according to the terms thereof, including loan fees, service fees, professional fees, interest (and specifically including interest accrued after the commencement of any Insolvency Proceeding), default interest, interest on interest, and expense reimbursements, whether or not any of the foregoing would be or is allowed or disallowed in whole or in part in any Insolvency Proceeding.(vi) In the event of a direct conflict between the priority provisions of this Section 2.4 and other provisions contained in any other Loan Document, it is the intention of the parties hereto that such priority provisions in such documents shall be read together and construed, to the fullest extent possible, to be in concert with each other. In the event of any actual, irreconcilable conflict that cannot be resolved as aforesaid, the terms and provisions of this Section 2.4 shall control and govern.(c) Mandatory Prepayments.(i) Within 5 days after delivery to Administrative Agent of the audited annual financial statements pursuant to Section 5.3 with respect to any fiscal year, commencing with the delivery to Administrative Agent of the financial statements for the fiscal year ended December 31, 2005 or, if such financial statements are not delivered to Administrative Agent on or prior to the date such statements are required to be delivered pursuant to Section 5.3 , 5 days after the date such statements are required to be delivered to Administrative Agent pursuant to Section 5.3 , US Borrowers shall (unless the obligation to make such payment is waived in writing by the Required Lenders prior to the date on which such payment is required to be made) prepay the outstanding principal of the Term Loan A and, unless the obligation to make such payment is waived under the Term B Debt Documents, Term B Debt, in an aggregate amount equal to 50% of the Excess Cash Flow of Administrative Borrower and its Subsidiaries for such fiscal year (or with respect to the fiscal year ended December 31, 2005, for the period commencing on August 1, 2005 and ending on the last day of such fiscal year), such prepayment to be applied to the outstanding Term Loan A and Term B Debt in accordance with clause (d)(i) below.(ii) Within three Business Days following the consummation of any voluntary or involuntary sale or disposition by any US Loan Party of property or assets (other than sales or dispositions described in clauses (b), (c), (d), (f), (g), (i), (j), (k)(y), (l), or (n) of the definition of “Permitted Dispositions”), US Borrowers shall (unless the obligation to make such payment is waived in writing by the Required Lenders prior to the date on which such payment is required to be made) prepay the outstanding principal of the Obligations and, unless the obligation to make such payment is waived under the Term B
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Debt Documents, Term B Debt in accordance with clause (d)(ii) below in an aggregate amount equal to 100% of the Net Cash Proceeds received by such Person in connection with such sale or disposition but only to the extent that the Dollar Equivalent of the aggregate amount of Net Cash Proceeds received by the US Loan Parties (and not applied as a prepayment of the Obligations or the Term B Debt) for all such sales or dispositions shall exceed $1,000,000 in any fiscal year; provided , that US Borrowers shall not be required to make such prepayment if (A) such sale involves the property described in, and is subject to the terms of, the Pre-approved Asset Disposition Letter, (B) such sale is consummated in accordance with the terms of the Pre-approved Asset Disposition Letter and (C) the Net Cash Proceeds of such sale are used to prepay the Term B Debt. Nothing contained in this subclause (ii) shall permit any US Loan Party to sell or otherwise dispose of any property or assets other than in accordance with Section 6.4 .(iii) Within three Business Days following the receipt by any US Loan Party of any Extraordinary Receipts, US Borrowers shall (unless the obligation to make such payment is waived in writing by the Required Lenders prior to the date on which such payment is required to be made) prepay the outstanding principal of the Obligations and, unless the obligation to make such payment is waived under the Term B Debt Documents, Term B Debt, in accordance with clause (d)(ii) below in an aggregate amount equal to 100% of such Extraordinary Receipts, net of any amounts payable by such Person as a result of such event and of any taxes, fees payable to Persons that are not Affiliates of any US Loan Party or reasonable expenses incurred in collecting such Extraordinary Receipts, but only to the extent that the Dollar Equivalent of the aggregate amount of such net Extraordinary Receipts received by the US Loan Parties (and not applied as a prepayment of the principal of the Obligations or the Term B Debt) for any single or related series of Extraordinary Receipts shall exceed $75,000 or for all such Extraordinary Receipts shall exceed $750,000 in any fiscal year.(iv) Within three Business Days following the sale, issuance or incurrence by any US Loan Party of any Stock or Indebtedness (other than (i) Indebtedness permitted under Section 6.1 (other than Indebtedness in respect of a Convertible Note Offering), (ii) Stock issued by any US Loan Party on or before the Closing Date, (iii) Stock issued pursuant to a stock or option plan to any officer, independent contractor in a manner consistent with historical practices, employee or director of Administrative Borrower or any of its Subsidiaries, (iv) Stock issued upon exercise of any Stock referred to in clause (iii), and (v) Stock issued to any Loan Party), US Borrowers shall (unless the obligation to make such payment is waived in writing by the Required Lenders prior to the date on which such payment is required to be made) prepay the outstanding principal of the Obligations and, unless the obligation to make such payment is waived under the Term B Debt Documents, Term B Debt, in accordance with clause (d)(iii) in an aggregate amount equal to (A) 50% of the Net Cash Proceeds received by such US Loan Party in connection with such sale, issuance, or incurrence until the aggregate amount of Net Cash Proceeds received by US Loan Parties in connection with all such sales, issuances, and incurrences after the Closing Date is greater than $5,000,000 and (B) 100% of the Net Cash Proceeds received by such US Loan Party in connection with such sale, issuance, or incurrence after the aggregate amount
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of Net Cash Proceeds received by US Loan Parties in connection with all such sales, issuances, and incurrences after the Closing Date is greater than $5,000,000; provided, that US Borrowers shall not be required to make such prepayment if (A) the proceeds arise from a Convertible Note Offering permitted hereunder, and (B) the Net Cash Proceeds of such Convertible Note Offering are used to prepay the Term B Debt in full.(v) In the event (A) the sum of the Revolver Usage (after giving effect to any repayment or prepayment of the Loans made on or prior to the applicable date of determination but excluding Letter of Credit Usage cash collateralized in an amount up to 105% of such Letter of Credit Usage) and the outstanding principal balance of the Term Loan A at any time exceeds 2.25 times the amount of EBITDA for the most recently ended 12 month period, (B) the sum of the Revolver Usage (after giving effect to any repayment or prepayment of the Loans made on or prior to the applicable date of determination but excluding Letter of Credit Usage cash collateralized in an amount up to 105% of such Letter of Credit Usage) and the outstanding principal balance of the Term Loan A and the Term B Debt at any time exceeds 2.75 times the amount of EBITDA for the most recently ended 12 month period, or (C) the sum of the Revolver Usage (after giving effect to any repayment or prepayment of the Loans made on or prior to the applicable date of determination but excluding Letter of Credit Usage cash collateralized in an amount up to 105% of such Letter of Credit Usage) and the outstanding principal balance of the Term Loan A and the Term B Debt and the aggregate principal amount of all other Indebtedness (other than cash collateralized letters of credit) of Parent and its Subsidiaries outstanding as of such date in the amount that would be reflected as debt on a balance sheet prepared as of such date on a consolidated basis in accordance with GAAP at any time exceeds 3 times the amount of EBITDA for the most recently ended 12 month period, US Borrowers (unless the obligation to make such payment is waived in writing by the Required Lenders prior to the date on which such payment is required to be made) shall prepay the outstanding Obligations and, unless the obligation to make such payment is waived under the Term B Debt Documents, Term B Debt in accordance with clause (d)(iv) below in an aggregate amount equal to the greater of the excess resulting from Clause (A) above, the excess resulting from Clause (B) above or the excess resulting from Clause (C) above.(d) Application of Payments.(i) Each prepayment pursuant to subclause (c)(i) above (Excess Cash Flow) shall first , be applied to the outstanding principal amount of Term Loan A, until paid in full, and second , unless the prepayment requirement shall have been waived thereunder, paid to Term B Agent for application to the outstanding principal amount of Term B Debt, until paid in full; provided , that if an Event of Default shall have occurred and be continuing, (x) at Administrative Agent’s election, any payment to be paid to Term B Agent for application to the outstanding principal amount of Term B Debt shall be applied in the manner set forth in Section 2.4(b)(i)(A) and (y) at Administrative Agent’s election, any prepayment of the Term Loan A required pursuant to subclause (c)(i) above shall be applied in the manner set forth in Section 2.4(b)(i)(A) . Each such prepayment of the Term Loan A shall be without penalty or premium and shall be applied against the remaining installments of principal of the Term Loan A in the inverse order of maturity.
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(ii) Each prepayment pursuant to subclauses (c)(ii) above (Sales and Dispositions) and (c)(iii) above (Extraordinary Receipts), shall be applied as follows:(1) if the proceeds are from any sale or disposition of any Accounts of a US Loan Party or otherwise constitute proceeds of Accounts of a US Loan Party, such proceeds shall be applied, first , to the outstanding principal amount of the US Advances, until paid in full, second , to cash collateralize the US Letters of Credit in an amount equal to 105% at the then extant US Letter of Credit Usage, until cash collateralized in full, third , to the outstanding principal amount of Term Loan A, until paid in full, and fourth , unless the prepayment requirement shall have been waived under the Term B Debt Documents, paid to Term B Agent for application to the outstanding principal amount of Term B Debt, until paid in full; provided, that, any such proceeds that would be applied to cash collateralize the US Letters of Credit pursuant to clause second above may be retained by Borrowers to the extent US Availability, after giving effect to such sale or disposition, would be greater than $0 notwithstanding the failure to cash collateralize such US Letters of Credit. Each such prepayment of the Term Loan A shall be without penalty or premium and shall be applied against the remaining installments of principal of the Term Loan A in the inverse order of maturity.
(2) subject to clause (3) below, if the proceeds are from the sale or disposition of any other assets of a US Loan Party not described in clause (1) above or any insurance policy or condemnation award of a US Loan Party, such proceeds shall be applied, first , to the outstanding principal amount of Term Loan A, until paid in full, and second , unless the prepayment requirement shall have been waived under the Term B Debt Documents, paid to Term B Agent for application to the outstanding principal amount of Term B Debt, until paid in full. Each such prepayment of the Term Loan A shall be without penalty or premium and shall be applied against the remaining installments of principal of the Term Loan A in the inverse order of maturity. Notwithstanding the foregoing, except during the continuance of an Event of Default, such proceeds shall not be required to be so applied to the extent that such proceeds are used to replace, repair, or restore the properties or assets in respect of which such proceeds were paid or are used to acquire equipment or other tangible fixed assets to be used in the business of the US Loan Parties if (i) the amount of proceeds received in respect of such sales, dispositions, insurance policies, condemnation awards or Extraordinary Receipts, that are used to replace, repair, or restore the properties or assets in respect of which such proceeds were paid or are used to acquire equipment or other tangible fixed assets are less than $2,000,000 in the aggregate during
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any 12 consecutive month period, (ii) Administrative Borrower delivers a certificate to Administrative Agent within 10 days after such sale or loss, destruction, or taking or Extraordinary Receipts event, stating that such proceeds shall be used to replace, repair, or restore such properties or assets or will be used to acquire equipment or other tangible fixed assets to be used in the business of the US Loan Parties within a period specified in such certificate not to exceed the earlier of (x) 180 days after the receipt of such proceeds, and (y) the Maturity Date (which certificate shall set forth estimates of the proceeds to be so expended), and (iii) such proceeds are immediately deposited in a Deposit Account subject to a Control Agreement in favor of Administrative Agent. If all or any portion of such proceeds not so applied to the prepayment of the Obligations or the Term B Debt in accordance with this clause (2) are not used in accordance with the preceding sentence within the period specified in the relevant certificate furnished pursuant hereto, such remaining portion shall be applied to the Obligations and the Term B Debt in accordance with this clause (2) on the last day of such specified period; and
(3) if the proceeds are from a sale or disposition of all or substantially all of the assets or Stock of any Person or any insurance, which sale, disposition, or proceeds of insurance includes both Accounts and other assets of a US Loan Party, such proceeds shall be applied as follows: (x) an amount equal to the net book value of such Accounts of US Loan Parties (determined at the time of such sale or disposition or event resulting in such insurance proceeds) shall be applied first , to the outstanding principal amount of the US Advances, until paid in full, second , to cash collateralize the US Letters of Credit in an amount equal to 105% at the then extant US Letter of Credit Usage, until collateralized in full, third , to the outstanding principal balance of Term Loan A, until paid in full, and fourth , unless such prepayment requirement shall have been waived under the Term B Debt Documents, paid to Term B Agent for application to the outstanding principal amount of Term B Debt, until paid in full; provided, that, any such proceeds that would be applied to cash collateralize the US Letters of Credit pursuant to clause second above may be retained by Borrowers to the extent US Availability, after giving effect to such sale, disposition or casualty, would be greater than $0 notwithstanding the failure to cash collateralize such US Letters of Credit, and (y) the remaining proceeds shall be applied, first , to the outstanding principal amount of Term Loan A, until paid in full and second , unless such prepayment requirement shall have been waived under the Term B Debt Documents, paid to Term B Agent for application to the outstanding principal amount of Term B Debt, until paid in full. Each such prepayment of the Term Loan A shall be
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without penalty or premium and shall be applied against the remaining installments of principal of the Term Loan A in the inverse order of maturity; and
(4) subject to clauses (1), (2) and (3) above, any other prepayment pursuant to subclauses (c)(ii) and (iii) above shall, be applied, first , to the outstanding principal amount of Term Loan A, until paid in full, and second , unless such prepayment requirement shall have been waived under the Term B Debt Documents, paid to Term B Agent for application to the outstanding principal amount of Term B Debt, until paid in full. Each such prepayment of the Term Loan A shall be without penalty or premium and shall be applied against the remaining installments of principal of the Term Loan A in the inverse order of maturity; and
(5) if an Event of Default shall have occurred and be continuing, (x) at Administrative Agent’s election, any payment to be paid to Term B Agent for application to the outstanding principal amount of Term B Debt shall be applied in the manner set forth in Section 2.4(b)(i)(A) and (y) at Administrative Agent’s election, any prepayment of the Obligations required pursuant to subclause (c)(ii) or (c)(iii) above shall be applied in the manner set forth in Section 2.4(b)(i)(A) .
(iii) Each prepayment pursuant to subclause (c)(iv) above (Issuance of Stock or incurrence of Indebtedness) shall first , be applied to the outstanding principal amount of Term Loan A, until paid in full, and second , unless such prepayment requirement shall have been waived under the Term B Debt Documents, paid to Term B Agent for application to the outstanding principal amount of Term B Debt, until paid in full; provided , that if an Event of Default shall have occurred and be continuing, (x) at Administrative Agent’s election, any payment to be paid to Term B Agent for application to the outstanding principal amount of Term B Debt shall be applied in the manner set forth in Section 2.4(b)(i)(A) and (y) at Administrative Agent’s election, any prepayment of the Term Loan A required pursuant to subclause (c)(iv) above shall be applied in the manner set forth in Section 2.4(b)(i)(A) . Each such prepayment of the Term Loan A shall be without penalty or premium and shall be applied against the remaining installments of principal of the Term Loan A in the inverse order of maturity.(iv) Each prepayment pursuant to subclause (c)(v) (Leverage) above shall be applied, first , to outstanding principal amount of the US Advances, second , to cash collateralize the US Letters of Credit in an amount equal to 105% at the then extant US Letter of Credit Usage, until cash collateralized in full, third , to the outstanding principal balance of Term Loan A, until paid in full, and fourth , unless such prepayment requirement shall have been waived under the Term B Debt Documents, paid to Term B Agent for application to the outstanding principal amount of Term B Debt, until paid in full; provided, that if an Event of Default shall have occurred and be continuing, (x) at Administrative
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Agent’s election, any payment to be paid to Term B Agent for application to the outstanding principal amount of Term B Debt shall be applied in the manner set forth in Section 2.4(b)(i)(A) and (y) at Administrative Agent’s election, any prepayment of the Obligations required pursuant to subclause (c)(v) above shall be applied in the manner set forth in Section 2.4(b)(i)(A) . Each prepayment of Term Loan A shall be without penalty or premium. Each prepayment shall be applied against the remaining installments of principal of the Term Loan A in the inverse order of maturity. With respect to any prepayment required under Section 2.4(c)(v) , Administrative Agent shall establish and maintain a reserve against the US Borrowing Base and the Maximum Revolver Amount in an amount equal to such prepayment applied to the principal amount of the Advances (the “ Leverage Reserve ”). Administrative Agent shall maintain the Leverage Reserve until such time as no Event of Default exists and (A) the sum of the Revolver Usage (excluding Letter of Credit Usage cash collateralized in an amount up to 105% of such Letter of Credit Usage), the outstanding principal balance of Term Loan A and the Leverage Reserve is less than 2.25 times the amount of EBITDA for the most recently ended 12 month period, (B) the sum of the Revolver Usage (excluding Letter of Credit Usage cash collateralized in an amount up to 105% of such Letter of Credit Usage) and the outstanding principal balance of Term Loan A and the Term B Debt and the Leverage Reserve is less than 2.75 times the amount of EBITDA for the most recently ended 12 month period and (C) the sum of the Revolver Usage (excluding Letter of Credit Usage cash collateralized in an amount up to 105% of such Letter of Credit Usage), the outstanding principal balance of Term Loan A and the Term B Debt, the aggregate principal amount of all other Indebtedness (other than cash collateralized letters of credit) of Parent and its Subsidiaries outstanding as of such date in the amount that would be reflected as debt on a balance sheet prepared as of such date on a consolidated basis in accordance with GAAP and the Leverage Reserve is less than 3 times the amount of EBITDA for the most recently ended 12 month period.(v) Notwithstanding anything to the contrary contained in this Section 2.4(d) , if the Dollar Equivalent of Excess Availability would be less than or equal to $25,000,000 (or, at any time after the Term Loan A has been repaid in full, $20,000,000) immediately after giving effect to any prepayment that is required to be paid to the Term B Agent pursuant to any provision of this Section 2.4(d) , no such prepayment shall be paid to the Term B Agent and (x) Administrative Agent shall apply such amounts to the payment of the US Advances and, concurrently with such payment of the US Advances, a corresponding reserve shall be established and maintained against the US Borrowing Base and the Maximum US Revolver Amount in an amount equal to the amount that would have otherwise been required to be paid by US Borrowers to the Term B Agent, and (y) the amount that was applied to the US Advances pursuant to subclause (x) shall be paid to the Term B Agent for application to the outstanding principal amount of Term B Debt, and the corresponding reserve against the US Borrowing Base and the Maximum US Revolver Amount shall be released, once the Dollar Equivalent of Excess Availability would be greater than $25,000,000 (or, at any time after the Term Loan A has been repaid in full, $20,000,000) immediately after giving effect to such prepayment of the Term B Debt so long as no Event of Default then exists.
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2.5. Overadvances .If, at any time or for any reason, the amount of US Revolver Usage owed by US Borrowers to the Lender Group pursuant to Section 2.1 or Section 2.12 is greater than any of the limitations set forth in Section 2.1 or Section 2.12 , as applicable (an “ US Overadvance ”), the applicable US Borrowers immediately shall pay to Administrative Agent, in cash, the amount of such excess, which amount shall be used by Administrative Agent to reduce US Revolver Usage in accordance with the priorities set forth in Section 2.4(b) . If, at any time or for any reason, the amount of Canadian Revolver Usage owed by Canadian Borrowers to the Lender Group pursuant to Section 2.1 or Section 2.12 is greater than any of the limitations set forth in Section 2.1 or Section 2.12 , as applicable (a “ Canadian Overadvance ”), the applicable Canadian Borrowers immediately shall pay to Canadian Administrative Agent, in cash, the amount of such excess, which amount shall be used by Canadian Administrative Agent to reduce the Canadian Revolver Usage in accordance with the priorities set forth in Section 2.4(b) . If, at any time or for any reason, the amount of European Revolver Usage owed by European Borrowers to the Lender Group pursuant to Section 2.1 or Section 2.12 is greater than any of the limitations set forth in Section 2.1 or Section 2.12 , as applicable (an “ European Overadvance ”; US Overadvances, Canadian Overadvances and European Overadvances are collectively, the “ Overadvances ”), the applicable European Borrowers immediately shall pay to European Administrative Agent, in cash, the amount of such excess, which amount shall be used by European Administrative Agent to reduce the European Revolver Usage in accordance with the priorities set forth in Section 2.4(b) . In addition, US Borrowers hereby promise to pay the US Obligations (including principal, interest, fees, costs, and expenses) in the Applicable Currency in full and Foreign Borrowers hereby promise to pay the Foreign Obligations (including principal, interest, fees, costs, and expenses) in the Applicable Currency in full, in each case as and when due and payable under the terms of this Agreement and the other Loan Documents.
2.6. Interest Rates and Letter of Credit Fee: Rates, Payments, and Calculations .(a) Interest Rates. Except as provided in clause (c) below, all Obligations (except for undrawn Letters of Credit and except for Bank Product Obligations) whether or not charged to the Loan Accounts pursuant to the terms hereof shall bear interest on the Daily Balance thereof as follows (i) if the relevant Obligation is an Advance (whether a US Advance, Canadian Advance or European Advance) denominated in Dollars that is a LIBOR Rate Loan, at a per annum rate equal to the US LIBOR Rate plus the LIBOR Rate Margin, (ii) if the relevant Obligation is a Canadian Advance denominated in Canadian Dollars that is a LIBOR Rate Loan, subject to Section 2.16 , at a per annum rate equal to the Canadian LIBOR Rate plus the LIBOR Rate Margin, (iii) if the relevant Obligation is an Advance (whether a US Advance or European Advance) that is an Offshore Currency Rate Loan, at a per annum rate equal to the applicable Approved Offshore Currency Rate plus the LIBOR Rate Margin, (iv) if the relevant Obligation is a portion of the Term Loan A that is a LIBOR Rate Loan, at a per annum rate equal to the US LIBOR Rate plus the LIBOR Rate Term Loan A Margin, (v) if the relevant Obligation is a portion of the Term Loan A that is a Base Rate Loan, at a per annum rate equal to the US Base Rate plus the Base Rate Term Loan A
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Margin, (vi) if the relevant Obligation is a Canadian Advance denominated in Canadian Dollars that is a Base Rate Loan, subject to Section 2.16 , at a per annum rate equal to the Canadian Base Rate plus the Base Rate Margin, and (vii) otherwise with respect to Advances and other amounts corresponding to principal, at a per annum rate equal to the US Base Rate plus the Base Rate Margin.The foregoing notwithstanding, at no time shall any portion of the Obligations (other than Bank Product Obligations) bear interest on the Daily Balance thereof at a per annum rate less than 3%. To the extent that interest accrued hereunder at the rate set forth herein would be less than the foregoing minimum daily rate, the interest rate chargeable hereunder for such day automatically shall be deemed increased to the minimum rate.
(b) Letter of Credit Fee.(i) US Borrowers shall pay Administrative Agent (for the ratable benefit of the Lenders with a US Revolver Commitment), a Letter of Credit fee (in addition to the charges, commissions, fees, and costs set forth in Section 2.12(a)(v) ) which shall accrue at a rate equal to 2% per annum times the Daily Balance of the undrawn amount of all outstanding US Letters of Credit.(ii) Canadian Borrowers shall pay Canadian Administrative Agent (for the ratable benefit of the Lenders with a Canadian Revolver Commitment), a Letter of Credit fee (in addition to the charges, commissions, fees, and costs set forth in Section 2.12(b)(v) ) which shall accrue at a rate equal to 2% per annum times the Daily Balance of the undrawn amount of all outstanding Canadian Letters of Credit.(iii) European Borrowers shall pay European Administrative Agent (for the ratable benefit of the Lenders with a European Revolver Commitment), a Letter of Credit fee (in addition to the charges, commissions, fees, and costs set forth in Section 2.12(c)(v) ) which shall accrue at a rate equal to 2% per annum times the Daily Balance of the undrawn amount of all outstanding European Letters of Credit.(c) Default Rate. Upon the occurrence and during the continuation of an Event of Default,(i) at the election of Administrative Agent or the Required Lenders, all Obligations (except for undrawn Letters of Credit and except for Bank Product Obligations) whether or not charged to a Loan Account pursuant to the terms hereof shall bear interest on the Daily Balance thereof at a per annum rate equal to 200 basis points above the per annum rate otherwise applicable hereunder, and(ii) at the election of Administrative Agent or the Required Lenders, the Letter of Credit fee provided for above shall be increased to 200 basis points above the per annum rate otherwise applicable hereunder.(d) Payment. Except as provided to the contrary in Section 2.11 or Section 2.13(a) , interest, Letter of Credit fees, and all other fees payable hereunder shall be
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due and payable, in arrears, on the first Business Day of each month at any time that Obligations or Commitments are outstanding. US Borrowers hereby authorize Administrative Agent, from time to time, without prior notice to Borrowers, to charge all interest and fees (when due and payable), all Lender Group Expenses (as and when incurred), all charges, commissions, fees, and costs provided for in Section 2.12(a)(v) (as and when accrued or incurred), all fees and costs provided for in Section 2.11 (as and when accrued or incurred), and all other payments as and when due and payable under any Loan Document (including the amounts due and payable with respect to the Term Loan A and including any amounts due and payable to the Bank Product Providers in respect of Bank Products up to the amount of the Bank Product Reserve), in each case attributable to the US Borrowers to the US Loan Account, which amounts thereafter shall constitute US Advances hereunder and, to the extent such amounts are denominated in Dollars, shall accrue interest at the rate then applicable to US Advances that are Base Rate Loans denominated in Dollars hereunder and, to the extent such amounts are denominated in an Approved Offshore Currency, shall accrue interest at the rate then applicable to US Advances that are LIBOR Rate Loans denominated in such Approved Offshore Currency with an Interest Period of one month’s duration hereunder. Canadian Borrowers hereby authorize Canadian Administrative Agent, from time to time, without prior notice to Borrowers, to charge all interest and fees (when due and payable) owed by Canadian Borrowers, all Lender Group Expenses (as and when incurred) owed by Canadian Borrowers, all charges, commissions, fees, and costs provided for in Section 2.12(b)(v) (as and when accrued or incurred), all fees and costs provided for in Section 2.11 (as and when accrued or incurred) owed by Canadian Borrowers, and all other payments as and when due and payable under any Loan Document by Canadian Borrowers to the Canadian Loan Account, which amounts thereafter shall constitute Canadian Advances hereunder and shall accrue interest at the rate then applicable to Canadian Advances that are Base Rate Loans denominated in the Applicable Currency hereunder. European Borrowers hereby authorize European Administrative Agent, from time to time, without prior notice to Borrowers, to charge all interest and fees (when due and payable) owed by European Borrowers, all Lender Group Expenses (as and when incurred) owed by European Borrowers, all charges, commissions, fees, and costs provided for in Section 2.12(c)(v) (as and when accrued or incurred), all fees and costs provided for in Section 2.11 (as and when accrued or incurred) owed by European Borrowers, and all other payments as and when due and payable under any Loan Document by European Borrowers to the European Loan Account, which amounts thereafter shall constitute European Advances hereunder and, to the extent such amounts are denominated in Dollars, shall accrue interest at the rate then applicable to European Advances that are Base Rate Loans denominated in Dollars hereunder and, to the extent such amounts are denominated in an Approved Offshore Currency, shall accrue interest at the rate then applicable to European Advances that are LIBOR Rate Loans denominated in such Approved Offshore Currency with an Interest Period of one month’s duration hereunder. To the extent permitted by law, (i) any interest with respect to US Obligations that is not paid when due shall be compounded by being charged to the applicable Borrowers’ Loan Account and shall thereafter constitute US Advances to such Borrowers hereunder and shall accrue interest at the rate then applicable to US Advances that are Base Rate Loans denominated in Dollars hereunder, (ii) any interest with respect to Foreign Obligations owed by Canadian Borrowers that is not paid when due
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shall be compounded by being charged to the applicable Borrowers’ Loan Account and shall thereafter constitute Canadian Advances to such Borrowers hereunder and shall accrue interest at the rate then applicable to Canadian Advances that are Base Rate Loans denominated in the Applicable Currency hereunder and (iii) any interest with respect to Foreign Obligations owed by European Borrowers that is not paid when due shall be compounded by being charged to the applicable Borrowers’ Loan Account and shall thereafter constitute European Advances to such Borrowers hereunder and, to the extent such amounts are denominated in Dollars, shall accrue interest at the rate then applicable to European Advances that are Base Rate Loans denominated in Dollars hereunder and, to the extent such amounts are denominated in an Approved Offshore Currency, shall accrue interest at the rate then applicable to European Advances that are LIBOR Rate Loans denominated in such Approved Offshore Currency with an Interest Period of one month’s duration hereunder.(e) Computation. Subject to the Interest Act (Canada) and Section 2.16 , all interest and fees chargeable under the Loan Documents shall be computed on the basis of a 360 day year for the actual number of days elapsed. In the event the Base Rate is changed from time to time hereafter, the rates of interest hereunder based upon the Base Rate automatically and immediately shall be increased or decreased by an amount equal to such change in the Base Rate.(f) Intent to Limit Charges to Maximum Lawful Rate. In no event shall the interest rate or rates payable under this Agreement, plus any fees, charges, costs and payments construed to be equivalent to interest and any other amounts paid in connection herewith, exceed the highest rate permissible under any Law that a court of competent jurisdiction shall, in a final determination, deem applicable. Borrowers and the Lender Group, in executing and delivering this Agreement, intend legally to agree upon the rate or rates of interest and manner of payment stated within it; provided , however , that, anything contained herein to the contrary notwithstanding, if said rate or rates of interest or manner of payment exceeds the maximum allowable under Applicable Law, then, ipso facto , as of the date of this Agreement, Borrowers are and shall be liable only for the payment of such maximum as allowed by Law, and payment received from Borrowers in excess of such legal maximum, whenever received, shall be applied to reduce the principal balance of the Obligations to the extent of such excess.2.7. Cash Management .(a) Borrowers shall (i) establish and maintain cash management services of a type and on terms reasonably satisfactory to Collateral Agent at one or more of the banks set forth on Schedule 2.7(a) as amended or modified from time to time pursuant to clause (c) below (each a “ Cash Management Bank ”), and shall request in writing and otherwise take such reasonable steps to ensure that all of their Account Debtors forward payment of the amounts owed by them directly to such Cash Management Banks, and (ii) deposit or cause to be deposited promptly, and in any event no later than the first Business Day after the date of receipt thereof, all of their Collections from Account Debtors (including those sent directly
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by their Account Debtors to Borrowers) into a bank account (a “ Cash Management Account ”) at one of the Cash Management Banks.(b) Each Cash Management Bank shall establish and maintain Cash Management Agreements, in form and substance reasonably acceptable to Collateral Agent. Unless the Collateral Agent otherwise agrees, each such Cash Management Agreement shall provide, among other things, that (i) at any time after notice from Collateral Agent and prior to the rescinding of such notice, the Cash Management Bank will comply with any instructions originated by Collateral Agent directing the disposition of the funds in such Cash Management Account without further consent by Borrowers, (ii) the Cash Management Bank has no rights of setoff or recoupment or any other claim against the applicable Cash Management Account, other than for payment of its service fees and other charges directly related to the administration of such Cash Management Account and for returned checks or other items of payment, and (iii) at any time after notice from Collateral Agent and prior to the rescinding of such notice, it will forward by daily sweep all amounts in the applicable Cash Management Account to the applicable Agent’s Account; provided that, unless (y) an Enforcement Event under and as such term is defined in the German account pledge agreements dated on or about the date hereof entered into or to be entered into between each of the German Borrowers and the Collateral Agent in connection with this Agreement has occurred, or (x) an Event of Default of a German Borrower has occurred and is continuing which Event of Default was not caused solely by an act or omission to act of a Borrower other than the German Borrowers through a cross default provision under this Agreement, the Collateral Agent shall not be entitled to provide any notice referred to in clause (i) or clause (iii) above pursuant to any Cash Management Agreement to which such German Borrower is a party if such German Borrower proves to the reasonable satisfaction of the Collateral Agent that such notice would constitute or result in an interference destroying the existence ( existenzvernichtender Eingriff ) of such German Borrower . Collateral Agent agrees that at any time prior to the occurrence of a Cash Management Triggering Event and at any time after the occurrence of a subsequent Cash Management Reinstatement Event (to the extent no subsequent Cash Management Triggering Event has occurred), Collateral Agent shall instruct the Cash Management Banks to direct the funds in the Cash Management Accounts to such Deposit Accounts of Borrowers as Collateral Agent is directed by Administrative Borrower. After the occurrence of a Cash Management Reinstatement Event, Collateral Agent further agrees to promptly notify each Cash Management Bank of the occurrence of such Cash Management Reinstatement Event and that such Cash Management Bank may resume directing the funds in the Cash Management Accounts to such Deposit Accounts of Borrowers as directed by Administrative Borrower.(c) So long as no Event of Default has occurred and is continuing, Administrative Borrower may amend Schedule 2.7(a) to add or replace a Cash Management Bank or Cash Management Account; provided , however , that (i) such prospective Cash Management Bank shall be reasonably satisfactory to Collateral Agent, and (ii) prior to the time of the opening of such Cash Management Account, the applicable Borrower and such prospective Cash Management Bank shall have executed and delivered to Collateral Agent a Cash Management Agreement. Borrowers shall close any of their Cash Management
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Accounts (and establish replacement cash management accounts in accordance with the foregoing sentence) promptly and in any event within 60 days of notice from Collateral Agent (or such longer period as Administrative Borrower and Collateral Agent may agree) that the creditworthiness of any Cash Management Bank is no longer acceptable in Collateral Agent’s reasonable judgment, or as promptly as practicable and in any event within 90 days of notice from Collateral Agent (or such longer period as Administrative Borrower and Administrative Agent may agree) that the operating performance, funds transfer, or availability procedures or performance of the Cash Management Bank with respect to Cash Management Accounts or Collateral Agent’s liability under any Cash Management Agreement with such Cash Management Bank is no longer acceptable in Administrative Agent’s reasonable judgment.(d) The Cash Management Accounts shall be cash collateral accounts subject to Control Agreements.2.8. Crediting Payments; Clearance Charge .The receipt of any payment item by an Agent (whether from transfers to Administrative Agent by the Cash Management Banks pursuant to the Cash Management Agreements or otherwise) shall not be considered a payment on account unless such payment item is in the Applicable Currency and is a wire transfer of immediately available federal funds made to the applicable Agent’s Account or unless and until such payment item is honored when presented for payment. Should any payment item not be honored when presented for payment, then the applicable Borrowers shall be deemed not to have made such payment and interest shall be calculated accordingly. Anything to the contrary contained herein notwithstanding, any payment item shall be deemed received by an Agent only if it is received into such Agent’s Account on a Business Day on or before 11:00 a.m. (California time). If any payment item is received into an Agent’s Account on a non-Business Day or after 11:00 a.m. (California time) on a Business Day, it shall be deemed to have been received by such Agent as of the opening of business on the immediately following Business Day. From and after the Closing Date, the applicable Agent shall be entitled to charge (i) the US Borrowers for 1 Business Day of ‘clearance’ at the rate then applicable under Section 2.6 to US Advances that are Base Rate Loans denominated in Dollars on the Dollar Equivalent of all Collections that are received by Loan Parties other than Foreign Loan Parties (regardless of whether forwarded by the Cash Management Banks to such Agent), (ii) the Canadian Borrowers (A) for 1 Business Day of ‘clearance’ at the rate then applicable under Section 2.6 to Canadian Advances that are Base Rate Loans denominated in Canadian Dollars on all Collections denominated in Canadian Dollars that are received by Canadian Borrowers (regardless of whether forwarded by the Cash Management Banks to such Agent) and (B) for 1 Business Day of ‘clearance’ at the rate then applicable under Section 2.6 to Canadian Advances that are Base Rate Loans denominated in Dollars on the Dollar Equivalent of all Collections denominated in a currency other than Canadian Dollars that are received by Canadian Borrowers (regardless of whether forwarded by the Cash Management Banks to such Agent) and (iii) the European Borrowers for 1 Business Day of ‘clearance’ at the rate then applicable under Section 2.6 to Advances that are Base Rate Loans denominated in Dollars on the Dollar Equivalent of all Collections that are received by European
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Borrowers (regardless of whether forwarded by the Cash Management Banks to such Agent). This across-the-board 1 Business Day clearance charge on all Collections of Borrowers is acknowledged by the parties to constitute an integral aspect of the pricing of the financing of Borrowers and shall apply irrespective of whether or not there are any outstanding monetary Obligations; the effect of such clearance charge being the equivalent of charging interest on such Collections through the completion of a period ending 1 Business Day after the receipt thereof. The parties acknowledge and agree that the economic benefit of the foregoing provisions of this Section 2.8 shall be for the exclusive benefit of Agents.
2.9. Designated Account .Administrative Agent is authorized to make the US Advances and the Term Loan A, and US Issuing Lenders are authorized to issue the US Letters of Credit, under this Agreement based upon telephonic or other instructions received from anyone purporting to be an Authorized Person or, without instructions, if pursuant to Section 2.6(d) . Canadian Administrative Agent is authorized to make the Canadian Advances, and Canadian Issuing Lenders are authorized to issue the Canadian Letters of Credit, under this Agreement based upon telephonic or other instructions received from anyone purporting to be an Authorized Person or, without instructions, if pursuant to Section 2.6(d) . European Administrative Agent is authorized to make the European Advances, and European Issuing Lenders are authorized to issue the European Letters of Credit, under this Agreement based upon telephonic or other instructions received from anyone purporting to be an Authorized Person or, without instructions, if pursuant to Section 2.6(d) . Administrative Borrower agrees to establish and maintain each US Designated Account with the US Designated Account Bank for the purpose of receiving the proceeds of the US Advances requested by US Borrowers and made by Administrative Agent or the US Lenders hereunder. Unless otherwise agreed by Administrative Agent and Administrative Borrower, any US Advance, US Protective Advance, or US Swing Loan requested by US Borrowers and made by Administrative Agent or the US Lenders hereunder shall be made to the applicable US Designated Account. Administrative Borrower further agrees to cause Canadian Administrative Borrower to establish and maintain each Canadian Designated Account with the Canadian Designated Account Bank for the purpose of receiving the proceeds of the Canadian Advances requested by Canadian Borrowers and made by Canadian Administrative Agent or the Canadian Lenders hereunder. Unless otherwise agreed by Canadian Administrative Agent and Administrative Borrower, any Canadian Advance, Canadian Protective Advance, or Canadian Swing Loan requested by Canadian Borrowers and made by Canadian Administrative Agent or the Canadian Lenders hereunder shall be made to the applicable Canadian Designated Account. Administrative Borrower further agrees to cause European Administrative Borrower to establish and maintain each European Designated Account with the European Designated Account Bank for the purpose of receiving the proceeds of the European Advances requested by European Borrowers and made by European Administrative Agent or the European Lenders hereunder. Unless otherwise agreed by European Administrative Agent and Administrative Borrower, any European Advance, European Swing Loan or European Protective Advance requested by European Borrowers
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and made by European Administrative Agent or the European Lenders hereunder shall be made to the applicable European Designated Account.
2.10. Maintenance of Loan Accounts; Statements of Obligations .Administrative Agent shall maintain an account on its books in the name of US Borrowers (the “ US Loan Account ”) on which US Borrowers will be charged with the Term Loan A, all US Advances (including Protective Advances to US Borrowers and US Swing Loans) made by Administrative Agent, US Swing Lender, Fronting Lender, or the US Lenders to US Borrowers or for US Borrowers’ account, the US Letters of Credit issued by a US Issuing Lender for US Borrowers’ account, and with all other payment US Obligations hereunder or under the other Loan Documents (except for Bank Product Obligations), including, accrued interest, fees and expenses, and Lender Group Expenses. Canadian Administrative Agent shall maintain an account on its books in the name of Canadian Borrowers (the “ Canadian Loan Account ”) on which all Canadian Advances (including Protective Advances to Canadian Borrowers and Canadian Swing Loans) made by Canadian Administrative Agent, Canadian Swing Lender, or the Canadian Lenders to Canadian Borrowers or for Canadian Borrowers’ account, the Canadian Letters of Credit issued by a Canadian Issuing Lender for Canadian Borrowers’ account, and with all other payment Foreign Obligations hereunder or under the other Loan Documents (except for Bank Product Obligations), including, accrued interest, fees and expenses, and Lender Group Expenses attributable to the Canadian Borrowers. European Administrative Agent shall maintain an account on its books in the name of European Borrowers (the “ European Loan Account ”; together with the US Loan Account and the Canadian Loan Account, each a “ Loan Account ” and, collectively, the “ Loan Accounts ”) on which European Borrowers will be charged with all European Advances (including Protective Advances to European Borrowers and European Swing Loans) made by European Administrative Agent, or the European Lenders to European Borrowers or for European Borrowers’ account, the European Letters of Credit issued by a European Issuing Lender for European Borrowers’ account, and with all other payment Foreign Obligations hereunder or under the other Loan Documents (except for Bank Product Obligations), including, accrued interest, fees and expenses, and Lender Group Expenses attributable to the European Borrowers. In accordance with Section 2.8 , the US Loan Account will be credited with all payments received by Administrative Agent from US Borrowers or for US Borrowers’ account, including all amounts received in the applicable Administrative Agent’s Account from any Cash Management Bank of any US Borrower, the Canadian Loan Account will be credited with all payments received by Canadian Administrative Agent from Canadian Borrowers or for Canadian Borrowers’ account, including all amounts received in the applicable Canadian Administrative Agent’s Account from any Cash Management Bank of any Canadian Borrower and the European Loan Account will be credited with all payments received by European Administrative Agent from European Borrowers or for European Borrowers’ account, including all amounts received in the applicable European Administrative Agent’s Account from any Cash Management Bank of any European Borrower. Administrative Agent shall render statements regarding the Loan Accounts to Administrative Borrower, including principal, interest, fees, and including an itemization of all charges and expenses constituting Lender Group Expenses owing, and such
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statements, absent manifest error, shall be conclusively presumed to be correct and accurate and constitute an account stated between Borrowers and the Lender Group unless, within 30 days after receipt thereof by Administrative Borrower, Administrative Borrower shall deliver to Administrative Agent written objection thereto describing the error or errors contained in any such statements.
2.11. Fees .Borrowers shall pay to the applicable Agent, as and when due and payable under the terms of the Fee Letter, the fees set forth in the Fee Letter.
2.12. Letters of Credit .(a) US Letters of Credit.(i) Subject to the terms and conditions of this Agreement, the US Issuing Lender agrees to issue letters of credit for the account of US Borrowers (each, a “ US L/C ”) or to purchase participations or execute indemnities or reimbursement obligations (each such undertaking, a “ US L/C Undertaking ”) with respect to letters of credit issued by a US Underlying Issuer (as of the Closing Date, the prospective US Underlying Issuer is to be Wells Fargo) for the account of US Borrowers. Each request for the issuance of a US Letter of Credit or the amendment, renewal, or extension of any outstanding US Letter of Credit shall be made in writing by an Authorized Person and delivered to the applicable US Issuing Lender and Administrative Agent via hand delivery, telefacsimile, or other electronic method of transmission reasonably in advance of the requested date of issuance, amendment, renewal, or extension. Each such request shall be in form and substance satisfactory to the US Issuing Lender in its Permitted Discretion and shall specify (i) the amount of such US Letter of Credit, (ii) the currency in which amounts under such US Letter of Credit shall be payable, (iii) the date of issuance, amendment, renewal, or extension of such US Letter of Credit, (iv) the expiration date of such US Letter of Credit, (v) the name and address of the beneficiary thereof (or the beneficiary of the US Underlying Letter of Credit, as applicable), and (vi) such other information (including, in the case of an amendment, renewal, or extension, identification of the outstanding US Letter of Credit to be so amended, renewed, or extended) as shall be necessary to prepare, amend, renew, or extend such US Letter of Credit. If requested by the US Issuing Lender, US Borrowers also shall be an applicant under the application with respect to any US Underlying Letter of Credit that is to be the subject of a US L/C Undertaking. The US Issuing Lender shall have no obligation to issue a US Letter of Credit if any of the following would result after giving effect to the issuance of such requested US Letter of Credit:(A) the US Letter of Credit Usage would exceed the US Borrowing Base less the Dollar Equivalent of the outstanding principal amount of US Advances, or(B) the US Letter of Credit Usage would exceed $30,000,000 less the sum of the Canadian Letter of Credit Usage and European Letter of Credit Usage, or
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(C) the US Letter of Credit Usage would exceed the Maximum US Revolver Amount less the Dollar Equivalent of the outstanding principal amount of US Advances.US Borrowers and the Lender Group acknowledge and agree that certain US Underlying Letters of Credit may be issued to support letters of credit that already are outstanding as of the Closing Date. Each US Letter of Credit (and corresponding US Underlying Letter of Credit) shall be in form and substance acceptable to the US Issuing Lender (in the exercise of its Permitted Discretion), including the requirement that the amounts payable thereunder must be payable in Dollars or an Approved Offshore Currency. If US Issuing Lender is obligated to advance funds under a US Letter of Credit, US Borrowers immediately shall reimburse such US L/C Disbursement to US Issuing Lender by paying to Administrative Agent an amount equal to such US L/C Disbursement not later than 11:00 a.m., California time, on the date that such US L/C Disbursement is made, if Administrative Borrower shall have received written or telephonic notice of such US L/C Disbursement prior to 10:00 a.m., California time, on such date, or, if such notice has not been received by Administrative Borrower prior to such time on such date, then not later than 11:00 a.m., California time, on (x) the Business Day that Administrative Borrower receives such notice, if such notice is received prior to 10:00 a.m., California time, on the date of receipt of such notice or (y) the next Business Day, if such notice is not received before such time on the date of receipt of such notice, and, in the absence of such reimbursement, the US L/C Disbursement immediately and automatically shall, if the US L/C Disbursement is payable in an Approved Offshore Currency, be converted at the Currency Exchange Rate from the applicable Approved Offshore Currency to Dollars and shall be deemed to be a US Advance hereunder and, thereafter, shall bear interest at the rate then applicable to US Advances that are US Base Rate Loans denominated in Dollars under Section 2.6 . To the extent a US L/C Disbursement is deemed to be a US Advance hereunder, US Borrowers’ obligation to reimburse such US L/C Disbursement shall be discharged and replaced by the resulting US Advance. Promptly following receipt by Administrative Agent of any payment from US Borrowers pursuant to this paragraph, Administrative Agent shall distribute such payment to the US Issuing Lender or, to the extent that Lenders have made payments pursuant to Section 2.12(a)(ii) to reimburse the US Issuing Lender, then to such Lenders and the US Issuing Lender as their interests may appear.
(ii) Promptly following receipt of a notice of a US L/C Disbursement pursuant to Section 2.12(a)(i) , each Lender with a US Revolver Commitment agrees to fund its Pro Rata Share of any US Advance deemed made pursuant to the foregoing subsection on the same terms and conditions as if US Borrowers had requested such US Advance and Administrative Agent shall promptly pay to US Issuing Lender the amounts so received by it from the Lenders. By the issuance of a US Letter of Credit (or an amendment to a US Letter of Credit increasing the amount thereof) and without any further action on the part of the US Issuing Lender or the Lenders with US Revolver Commitments, the US Issuing Lender shall be deemed to have granted to each Lender with a US Revolver Commitment, and each Lender with a US Revolver Commitment shall be deemed to have purchased, a participation in each US Letter of Credit, in an amount equal to its Pro Rata
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Share of the US Risk Participation Liability of such US Letter of Credit, and each such Lender agrees to pay to Administrative Agent, for the account of the US Issuing Lender, such Lender’s Pro Rata Share of any payments made by the US Issuing Lender under such US Letter of Credit. In consideration and in furtherance of the foregoing, each Lender with a US Revolver Commitment hereby absolutely and unconditionally agrees to pay to Administrative Agent, for the account of the US Issuing Lender, such Lender’s Pro Rata Share of each US L/C Disbursement made by the US Issuing Lender and not reimbursed by US Borrowers on the date due as provided in clause (a) of this Section, or of any reimbursement payment required to be refunded to US Borrowers for any reason. Each Lender with a US Revolver Commitment acknowledges and agrees that its obligation to deliver to Administrative Agent, for the account of the US Issuing Lender, an amount equal to its respective Pro Rata Share of each US L/C Disbursement made by the US Issuing Lender pursuant to this Section 2.12(a)(ii) shall be absolute and unconditional and such remittance shall be made notwithstanding the occurrence or continuation of an Event of Default or Default or the failure to satisfy any condition set forth in Section 3 hereof. If any such Lender fails to make available to Administrative Agent the amount of such Lender’s Pro Rata Share of each US L/C Disbursement made by the US Issuing Lender in respect of such US Letter of Credit as provided in this Section, such Lender shall be deemed to be a Defaulting Lender and Administrative Agent (for the account of the US Issuing Lender) shall be entitled to recover such amount on demand from such Lender together with interest thereon at the Defaulting Lender Rate until paid in full.(iii) Each US Borrower hereby agrees to indemnify, save, defend, and hold the Lender Group harmless from any loss, cost, expense, or liability, and reasonable attorneys fees incurred by the Lender Group arising out of or in connection with any US Letter of Credit; provided , however , that no US Borrower shall be obligated hereunder to indemnify for any loss, cost, expense, or liability to the extent that it is caused by the gross negligence or willful misconduct of the US Issuing Lender or any other member of the Lender Group. Each US Borrower agrees to be bound by the US Underlying Issuer’s regulations and interpretations of any US Underlying Letter of Credit or by US Issuing Lender’s interpretations of any US L/C issued by US Issuing Lender to or for such US Borrower’s account, even though this interpretation may be different from such US Borrower’s own, and each US Borrower understands and agrees that the Lender Group shall not be liable for any error, negligence, or mistake, whether of omission or commission, in following US Borrowers’ instructions or those contained in the Letter of Credit or any modifications, amendments, or supplements thereto, other than those resulting from the gross negligence or willful misconduct of the US Issuing Lender or any other member of the Lender Group. Each US Borrower understands that the US L/C Undertakings may require US Issuing Lender to indemnify the US Underlying Issuer for certain costs or liabilities arising out of claims by US Borrowers against such US Underlying Issuer. Each US Borrower hereby agrees to indemnify, save, defend, and hold the Lender Group harmless with respect to any loss, cost, expense (including reasonable attorneys fees), or liability incurred by the Lender Group under any US L/C Undertaking as a result of the Lender Group’s indemnification of any US Underlying Issuer; provided , however , that no US Borrower shall be obligated hereunder to indemnify for any loss, cost, expense, or liability to
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the extent that it is caused by the gross negligence or willful misconduct of the US Issuing Lender or any other member of the Lender Group. Each US Borrower hereby acknowledges and agrees that neither the Lender Group nor the US Issuing Lender shall be responsible for delays, errors, or omissions resulting from the malfunction of equipment in connection with any Letter of Credit.(iv) Each US Borrower hereby authorizes and directs any US Underlying Issuer to deliver to the US Issuing Lender all instruments, documents, and other writings and property received by such US Underlying Issuer pursuant to such US Underlying Letter of Credit and to accept and rely upon the US Issuing Lender’s instructions with respect to all matters arising in connection with such US Underlying Letter of Credit and the related application.(v) Any and all issuance charges, commissions, fees, and costs incurred by the US Issuing Lender relating to US Underlying Letters of Credit shall be Lender Group Expenses for purposes of this Agreement and immediately shall be reimbursable by US Borrowers to Administrative Agent for the account of the US Issuing Lender; it being acknowledged and agreed by each US Borrower that, as of the Closing Date, the issuance charge imposed by the prospective US Underlying Issuer is .825% per annum times the face amount of each US Underlying Letter of Credit, that such issuance charge may be changed from time to time, and that the US Underlying Issuer also imposes a schedule of charges for amendments, extensions, drawings, and renewals.(vi) If by reason of (i) any change after the Closing Date in any Applicable Law, treaty, rule, or regulation or any change in the interpretation or application thereof by any Governmental Authority, or (ii) compliance by the US Underlying Issuer or the Lender Group with any direction, request, or requirement (irrespective of whether having the force of law) of any Governmental Authority or monetary authority including, Regulation D of the Federal Reserve Board as from time to time in effect (and any successor thereto):(A) any reserve, deposit, or similar requirement is or shall be imposed or modified in respect of any US Letter of Credit issued hereunder, or(B) there shall be imposed on the US Underlying Issuer or the Lender Group any other condition regarding any US Underlying Letter of Credit or any US Letter of Credit issued pursuant hereto;and the result of the foregoing is to increase, directly or indirectly, the cost to the Lender Group of issuing, making, guaranteeing, or maintaining any US Letter of Credit or to reduce the amount receivable in respect thereof by the Lender Group, then, and in any such case, Administrative Agent may, at any time within a reasonable period (not exceeding 180 days) after the additional cost is incurred or the amount received is reduced, notify Administrative Borrower, and US Borrowers shall pay on demand such amounts as Administrative Agent may specify to be necessary to compensate the Lender Group for such additional cost or reduced receipt, together with interest on such amount from the date of such demand until payment in full thereof at the rate then applicable to Base Rate Loans denominated in Dollars
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hereunder. The determination by Administrative Agent of any amount due pursuant to this Section, as set forth in a certificate delivered to the Administrative Borrower setting forth the calculation thereof in reasonable detail, shall, in the absence of manifest or demonstrable error, be final and conclusive and binding on all of the parties hereto.
(b) Canadian Letters of Credit.(i) Subject to the terms and conditions of this Agreement, the Canadian Issuing Lender agrees to issue letters of credit for the account of Canadian Borrowers (each, a “ Canadian L/C ”) or to purchase participations or execute indemnities or reimbursement obligations (each such undertaking, a “ Canadian L/C Undertaking ”) with respect to letters of credit issued by a Canadian Underlying Issuer (as of the Closing Date, the prospective Canadian Underlying Issuer is to be Wells Fargo) for the account of Canadian Borrowers. Each request for the issuance of a Canadian Letter of Credit or the amendment, renewal, or extension of any outstanding Canadian Letter of Credit shall be made in writing by an Authorized Person and delivered to the applicable Canadian Issuing Lender and Canadian Administrative Agent via hand delivery, telefacsimile, or other electronic method of transmission reasonably in advance of the requested date of issuance, amendment, renewal, or extension. Each such request shall be in form and substance satisfactory to the Canadian Issuing Lender in its Permitted Discretion and shall specify (i) the amount of such Canadian Letter of Credit, (ii) the currency in which amounts under such Canadian Letter of Credit shall be payable, (iii) the date of issuance, amendment, renewal, or extension of such Canadian Letter of Credit, (iv) the expiration date of such Canadian Letter of Credit, (v) the name and address of the beneficiary thereof (or the beneficiary of the Canadian Underlying Letter of Credit, as applicable), and (vi) such other information (including, in the case of an amendment, renewal, or extension, identification of the outstanding Canadian Letter of Credit to be so amended, renewed, or extended) as shall be necessary to prepare, amend, renew, or extend such Canadian Letter of Credit. If requested by the Canadian Issuing Lender, Canadian Borrowers also shall be an applicant under the application with respect to any Canadian Underlying Letter of Credit that is to be the subject of a Canadian L/C Undertaking. The Canadian Issuing Lender shall have no obligation to issue a Canadian Letter of Credit if any of the following would result after giving effect to the issuance of such requested Canadian Letter of Credit:(A) the Canadian Letter of Credit Usage would exceed the Canadian Borrowing Base less the Dollar Equivalent of the outstanding principal amount of Canadian Advances, or(B) the Canadian Letter of Credit Usage would exceed the lesser of (x) $10,000,000 and (y) $30,000,000 less the sum of the US Letter of Credit Usage and European Letter of Credit Usage, or(C) the Canadian Letter of Credit Usage would exceed the Maximum Canadian Revolver Amount less the Dollar Equivalent of the outstanding principal amount of Canadian Advances.
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Canadian Borrowers and the Lender Group acknowledge and agree that certain Canadian Underlying Letters of Credit may be issued to support letters of credit that already are outstanding as of the Closing Date. Each Canadian Letter of Credit (and corresponding Canadian Underlying Letter of Credit) shall be in form and substance acceptable to the Canadian Issuing Lender (in the exercise of its Permitted Discretion), including the requirement that the amounts payable thereunder must be payable in Dollars or Canadian Dollars. If Canadian Issuing Lender is obligated to advance funds under a Canadian Letter of Credit, Canadian Borrowers immediately shall reimburse such Canadian L/C Disbursement to Canadian Issuing Lender by paying to Canadian Administrative Agent an amount in the Applicable Currency equal to such Canadian L/C Disbursement not later than 11:00 a.m., California time, on the date that such Canadian L/C Disbursement is made, if Administrative Borrower shall have received written or telephonic notice of such Canadian L/C Disbursement prior to 10:00 a.m., California time, on such date, or, if such notice has not been received by Administrative Borrower prior to such time on such date, then not later than 11:00 a.m., California time, on (x) the Business Day that Administrative Borrower receives such notice, if such notice is received prior to 10:00 a.m., California time, on the date of receipt of such notice or (y) the next Business Day, if such notice is not received before such time on the date of receipt of such notice, and, in the absence of such reimbursement, the Canadian L/C Disbursement immediately and automatically shall be deemed to be a Canadian Advance hereunder and, thereafter, shall bear interest at the rate then applicable to Canadian Advances that are Base Rate Loans denominated in the Applicable Currency under Section 2.6 . To the extent a Canadian L/C Disbursement is deemed to be a Canadian Advance hereunder, Canadian Borrowers’ obligation to reimburse such Canadian L/C Disbursement shall be discharged and replaced by the resulting Canadian Advance. Promptly following receipt by Canadian Administrative Agent of any payment from Canadian Borrowers pursuant to this paragraph, Canadian Administrative Agent shall distribute such payment to the Canadian Issuing Lender or, to the extent that Lenders have made payments pursuant to Section 2.12(b)(ii) to reimburse the Canadian Issuing Lender, then to such Lenders and the Canadian Issuing Lender as their interests may appear.
(ii) Promptly following receipt of a notice of a Canadian L/C Disbursement pursuant to Section 2.12(b)(i) , each Lender with a Canadian Revolver Commitment agrees to fund its Pro Rata Share of any Canadian Advance deemed made pursuant to the foregoing subsection on the same terms and conditions as if Canadian Borrowers had requested such Canadian Advance and Canadian Administrative Agent shall promptly pay to Canadian Issuing Lender the amounts so received by it from the Lenders. By the issuance of a Canadian Letter of Credit (or an amendment to a Canadian Letter of Credit increasing the amount thereof) and without any further action on the part of the Canadian Issuing Lender or the Lenders with Canadian Revolver Commitments, the Canadian Issuing Lender shall be deemed to have granted to each Lender with a Canadian Revolver Commitment, and each Lender with a Canadian Revolver Commitment shall be deemed to have purchased, a participation in each Canadian Letter of Credit, in an amount equal to its Pro Rata Share of the Canadian Risk Participation Liability of such Canadian Letter of Credit, and each such Lender agrees to pay in the Applicable Currency to Canadian Administrative Agent, for the account of the Canadian Issuing Lender, such Lender’s Pro
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Rata Share of any payments made by the Canadian Issuing Lender under such Canadian Letter of Credit. In consideration and in furtherance of the foregoing, each Lender with a Canadian Revolver Commitment hereby absolutely and unconditionally agrees to pay to Canadian Administrative Agent, for the account of the Canadian Issuing Lender, such Lender’s Pro Rata Share of each Canadian L/C Disbursement made by the Canadian Issuing Lender and not reimbursed by Canadian Borrowers on the date due as provided in clause (b) of this Section, or of any reimbursement payment required to be refunded to Canadian Borrowers for any reason. Each Lender with a Canadian Revolver Commitment acknowledges and agrees that its obligation to deliver to Canadian Administrative Agent, for the account of the Canadian Issuing Lender, an amount in the Applicable Currency equal to its respective Pro Rata Share of each Canadian L/C Disbursement made by the Canadian Issuing Lender pursuant to this Section 2.12(b)(ii) shall be absolute and unconditional and such remittance shall be made notwithstanding the occurrence or continuation of an Event of Default or Default or the failure to satisfy any condition set forth in Section 3 hereof. If any such Lender fails to make available to Canadian Administrative Agent the amount of such Lender’s Pro Rata Share of each Canadian L/C Disbursement made by the Canadian Issuing Lender in respect of such Canadian Letter of Credit as provided in this Section, such Lender shall be deemed to be a Defaulting Lender and Canadian Administrative Agent (for the account of the Canadian Issuing Lender) shall be entitled to recover such amount on demand from such Lender together with interest thereon at the Defaulting Lender Rate until paid in full.(iii) Each Canadian Borrower hereby agrees to indemnify, save, defend, and hold the Lender Group harmless from any loss, cost, expense, or liability, and reasonable attorneys fees incurred by the Lender Group arising out of or in connection with any Canadian Letter of Credit; provided , however , that no Canadian Borrower shall be obligated hereunder to indemnify for any loss, cost, expense, or liability to the extent that it is caused by the gross negligence or willful misconduct of the Canadian Issuing Lender or any other member of the Lender Group. Each Canadian Borrower agrees to be bound by the Canadian Underlying Issuer’s regulations and interpretations of any Canadian Underlying Letter of Credit or by Canadian Issuing Lender’s interpretations of any Canadian L/C issued by Canadian Issuing Lender to or for such Canadian Borrower’s account, even though this interpretation may be different from such Canadian Borrower’s own, and each Canadian Borrower understands and agrees that the Lender Group shall not be liable for any error, negligence, or mistake, whether of omission or commission, in following Canadian Borrowers’ instructions or those contained in the Canadian Letter of Credit or any modifications, amendments, or supplements thereto; other than those resulting from the gross negligence or willful misconduct of the Canadian Issuing Lender or any other member of the Lender Group. Each Canadian Borrower understands that the Canadian L/C Undertakings may require Canadian Issuing Lender to indemnify the Canadian Underlying Issuer for certain costs or liabilities arising out of claims by Canadian Borrowers against such Canadian Underlying Issuer. Each Canadian Borrower hereby agrees to indemnify, save, defend, and hold the Lender Group harmless with respect to any loss, cost, expense (including reasonable attorneys fees), or liability incurred by the Lender Group under any Canadian L/C Undertaking as a result of the Lender Group’s indemnification of any Canadian Underlying
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Issuer; provided , however , that no Canadian Borrower shall be obligated hereunder to indemnify for any loss, cost, expense, or liability to the extent that it is caused by the gross negligence or willful misconduct of the Canadian Issuing Lender or any other member of the Lender Group. Each Canadian Borrower hereby acknowledges and agrees that neither the Lender Group nor the Canadian Issuing Lender shall be responsible for delays, errors, or omissions resulting from the malfunction of equipment in connection with any Canadian Letter of Credit.(iv) Each Canadian Borrower hereby authorizes and directs any Canadian Underlying Issuer to deliver to the Canadian Issuing Lender all instruments, documents, and other writings and property received by such Canadian Underlying Issuer pursuant to such Canadian Underlying Letter of Credit and to accept and rely upon the Canadian Issuing Lender’s instructions with respect to all matters arising in connection with such Canadian Underlying Letter of Credit and the related application.(v) Any and all issuance charges, commissions, fees, and costs incurred by the Canadian Issuing Lender relating to Canadian Underlying Letters of Credit shall be Lender Group Expenses for purposes of this Agreement and immediately shall be reimbursable by Canadian Borrowers to Canadian Administrative Agent for the account of the Canadian Issuing Lender; it being acknowledged and agreed by each Canadian Borrower that, as of the Closing Date, the issuance charge imposed by the prospective Canadian Underlying Issuer is .825% per annum times the face amount of each Canadian Underlying Letter of Credit, that such issuance charge may be changed from time to time, and that the Canadian Underlying Issuer also imposes a schedule of charges for amendments, extensions, drawings, and renewals.(vi) If by reason of (i) any change after the Closing Date in any Applicable Law, treaty, rule, or regulation or any change in the interpretation or application thereof by any Governmental Authority, or (ii) compliance by the Canadian Underlying Issuer or the Lender Group with any direction, request, or requirement (irrespective of whether having the force of law) of any Governmental Authority or monetary authority including, Regulation D of the Federal Reserve Board as from time to time in effect (and any successor thereto):(A) any reserve, deposit, or similar requirement is or shall be imposed or modified in respect of any Canadian Letter of Credit issued hereunder, or(B) there shall be imposed on the Canadian Underlying Issuer or the Lender Group any other condition regarding any Canadian Underlying Letter of Credit or any Canadian Letter of Credit issued pursuant hereto;and the result of the foregoing is to increase, directly or indirectly, the cost to the Lender Group of issuing, making, guaranteeing, or maintaining any Canadian Letter of Credit or to reduce the amount receivable in respect thereof by the Lender Group, then, and in any such case, Canadian Administrative Agent may, at any time within a reasonable period (not exceeding 180 days) after the additional cost is incurred or the amount received is reduced,
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notify Administrative Borrower, and Canadian Borrowers shall pay on demand such amounts as Canadian Administrative Agent may specify to be necessary to compensate the Lender Group for such additional cost or reduced receipt, together with interest on such amount from the date of such demand until payment in full thereof at the rate then applicable to Base Rate Loans denominated in Dollars hereunder. The determination by Canadian Administrative Agent of any amount due pursuant to this Section, as set forth in a certificate delivered to the Administrative Borrower setting forth the calculation thereof in reasonable detail, shall, in the absence of manifest or demonstrable error, be final and conclusive and binding on all of the parties hereto.
(c) European Letters of Credit.(i) Subject to the terms and conditions of this Agreement, the European Issuing Lender agrees to issue letters of credit for the account of European Borrowers (each, a “ European L/C ”) or to purchase participations or execute indemnities or reimbursement obligations (each such undertaking, a “ European L/C Undertaking ”) with respect to letters of credit issued by a European Underlying Issuer (as of the Closing Date, the prospective European Underlying Issuer is to be Wells Fargo) for the account of European Borrowers. Each request for the issuance of a European Letter of Credit or the amendment, renewal, or extension of any outstanding European Letter of Credit shall be made in writing by an Authorized Person and delivered to the applicable European Issuing Lender and European Administrative Agent via hand delivery, telefacsimile, or other electronic method of transmission reasonably in advance of the requested date of issuance, amendment, renewal, or extension. Each such request shall be in form and substance satisfactory to the European Issuing Lender in its Permitted Discretion and shall specify (i) the amount of such European Letter of Credit, (ii) the currency in which amounts under such European Letter of Credit shall be payable, (iii) the date of issuance, amendment, renewal, or extension of such European Letter of Credit, (iv) the expiration date of such European Letter of Credit, (v) the name and address of the beneficiary thereof (or the beneficiary of the European Underlying Letter of Credit, as applicable), and (vi) such other information (including, in the case of an amendment, renewal, or extension, identification of the outstanding European Letter of Credit to be so amended, renewed, or extended) as shall be necessary to prepare, amend, renew, or extend such European Letter of Credit. If requested by the European Issuing Lender, European Borrowers also shall be an applicant under the application with respect to any European Underlying Letter of Credit that is to be the subject of a European L/C Undertaking. The European Issuing Lender shall have no obligation to issue a European Letter of Credit if any of the following would result after giving effect to the issuance of such requested European Letter of Credit:(A) the European Letter of Credit Usage would exceed the European Borrowing Base less the Dollar Equivalent of the outstanding principal amount of European Advances, or(B) the European Letter of Credit Usage would exceed $30,000,000 less the sum of US Letter of Credit Usage and Canadian Letter of Credit Usage, or
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(C) the European Letter of Credit Usage would exceed the Maximum European Revolver Amount less the Dollar Equivalent of the outstanding principal amount of European Advances.European Borrowers and the Lender Group acknowledge and agree that certain European Underlying Letters of Credit may be issued to support letters of credit that already are outstanding as of the Closing Date. Each European Letter of Credit (and corresponding European Underlying Letter of Credit) shall be in form and substance acceptable to the European Issuing Lender (in the exercise of its Permitted Discretion), including the requirement that the amounts payable thereunder must be payable in Dollars or an Approved Offshore Currency. If European Issuing Lender is obligated to advance funds under a European Letter of Credit, European Borrowers immediately shall reimburse such European L/C Disbursement to European Issuing Lender by paying to European Administrative Agent an amount in the Applicable Currency equal to such European L/C Disbursement not later than 11:00 a.m., California time, on the date that such European L/C Disbursement is made, if Administrative Borrower shall have received written or telephonic notice of such European L/C Disbursement prior to 10:00 a.m., California time, on such date, or, if such notice has not been received by Administrative Borrower prior to such time on such date, then not later than 11:00 a.m., California time, on (x) the Business Day that Administrative Borrower receives such notice, if such notice is received prior to 10:00 a.m., California time, on the date of receipt of such notice or (y) the next Business Day, if such notice is not received before such time on the date of receipt of such notice,, and, in the absence of such reimbursement, the European L/C Disbursement immediately and automatically shall, if the European L/C Disbursement is payable in an Approved Offshore Currency, be converted at the Currency Exchange Rate from the applicable Approved Offshore Currency to Dollars and shall be deemed to be a European Advance hereunder and, thereafter, shall bear interest at the rate then applicable to European Advances that are European Base Rate Loans denominated in Dollars under Section 2.6 . To the extent a European L/C Disbursement is deemed to be a European Advance hereunder, European Borrowers’ obligation to reimburse such European L/C Disbursement shall be discharged and replaced by the resulting European Advance. Promptly following receipt by European Administrative Agent of any payment from European Borrowers pursuant to this paragraph, European Administrative Agent shall distribute such payment to the European Issuing Lender or, to the extent that Lenders have made payments pursuant to Section 2.12(c)(ii) to reimburse the European Issuing Lender, then to such Lenders and the European Issuing Lender as their interests may appear.
(ii) Promptly following receipt of a notice of a European L/C Disbursement pursuant to Section 2.12(c)(i) , each Lender with a European Revolver Commitment agrees to fund its Pro Rata Share of any European Advance deemed made pursuant to the foregoing subsection on the same terms and conditions as if European Borrowers had requested such European Advance and European Administrative Agent shall promptly pay to European Issuing Lender the amounts so received by it from the Lenders. By the issuance of a European Letter of Credit (or an amendment to a European Letter of Credit increasing the amount thereof) and without any further action on the part of the
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European Issuing Lender or the Lenders with European Revolver Commitments, the European Issuing Lender shall be deemed to have granted to each Lender with a European Revolver Commitment, and each Lender with a European Revolver Commitment shall be deemed to have purchased, a participation in each European Letter of Credit, in an amount equal to its Pro Rata Share of the European Risk Participation Liability of such European Letter of Credit, and each such Lender agrees to pay in the Applicable Currency to European Administrative Agent, for the account of the European Issuing Lender, such Lender’s Pro Rata Share of any payments made by the European Issuing Lender under such European Letter of Credit. In consideration and in furtherance of the foregoing, each Lender with a European Revolver Commitment hereby absolutely and unconditionally agrees to pay to European Administrative Agent, for the account of the European Issuing Lender, such Lender’s Pro Rata Share of each European L/C Disbursement made by the European Issuing Lender and not reimbursed by European Borrowers on the date due as provided in clause (c) of this Section, or of any reimbursement payment required to be refunded to European Borrowers for any reason. Each Lender with a European Revolver Commitment acknowledges and agrees that its obligation to deliver to European Administrative Agent, for the account of the European Issuing Lender, an amount in the Applicable Currency equal to its respective Pro Rata Share of each European L/C Disbursement made by the European Issuing Lender pursuant to this Section 2.12(c)(ii) shall be absolute and unconditional and such remittance shall be made notwithstanding the occurrence or continuation of an Event of Default or Default or the failure to satisfy any condition set forth in Section 3 hereof. If any such Lender fails to make available to European Administrative Agent the amount of such Lender’s Pro Rata Share of each European L/C Disbursement made by the European Issuing Lender in respect of such European Letter of Credit as provided in this Section, such Lender shall be deemed to be a Defaulting Lender and European Administrative Agent (for the account of the European Issuing Lender) shall be entitled to recover such amount on demand from such Lender together with interest thereon at the Defaulting Lender Rate until paid in full.(iii) Each European Borrower hereby agrees to indemnify, save, defend, and hold the Lender Group harmless from any loss, cost, expense, or liability, and reasonable attorneys fees incurred by the Lender Group arising out of or in connection with any European Letter of Credit; provided , however , that no European Borrower shall be obligated hereunder to indemnify for any loss, cost, expense, or liability to the extent that it is caused by the gross negligence or willful misconduct of the European Issuing Lender or any other member of the Lender Group. Each European Borrower agrees to be bound by the European Underlying Issuer’s regulations and interpretations of any European Underlying Letter of Credit or by European Issuing Lender’s interpretations of any European L/C issued by European Issuing Lender to or for such European Borrower’s account, even though this interpretation may be different from such European Borrower’s own, and each European Borrower understands and agrees that the Lender Group shall not be liable for any error, negligence, or mistake, whether of omission or commission, in following European Borrowers’ instructions or those contained in the European Letter of Credit or any modifications, amendments, or supplements thereto; other than those resulting from the gross negligence or willful misconduct of the European Issuing Lender or any other member of the
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Lender Group. Each European Borrower understands that the European L/C Undertakings may require European Issuing Lender to indemnify the European Underlying Issuer for certain costs or liabilities arising out of claims by European Borrowers against such European Underlying Issuer. Each European Borrower hereby agrees to indemnify, save, defend, and hold the Lender Group harmless with respect to any loss, cost, expense (including reasonable attorneys fees), or liability incurred by the Lender Group under any European L/C Undertaking as a result of the Lender Group’s indemnification of any European Underlying Issuer; provided , however , that no European Borrower shall be obligated hereunder to indemnify for any loss, cost, expense, or liability to the extent that it is caused by the gross negligence or willful misconduct of the European Issuing Lender or any other member of the Lender Group. Each European Borrower hereby acknowledges and agrees that neither the Lender Group nor the European Issuing Lender shall be responsible for delays, errors, or omissions resulting from the malfunction of equipment in connection with any European Letter of Credit.(iv) Each European Borrower hereby authorizes and directs any European Underlying Issuer to deliver to the European Issuing Lender all instruments, documents, and other writings and property received by such European Underlying Issuer pursuant to such European Underlying Letter of Credit and to accept and rely upon the European Issuing Lender’s instructions with respect to all matters arising in connection with such European Underlying Letter of Credit and the related application.(v) Any and all issuance charges, commissions, fees, and costs incurred by the European Issuing Lender relating to European Underlying Letters of Credit shall be Lender Group Expenses for purposes of this Agreement and immediately shall be reimbursable by European Borrowers to European Administrative Agent for the account of the European Issuing Lender; it being acknowledged and agreed by each European Borrower that, as of the Closing Date, the issuance charge imposed by the prospective European Underlying Issuer is .825% per annum times the face amount of each European Underlying Letter of Credit, that such issuance charge may be changed from time to time, and that the European Underlying Issuer also imposes a schedule of charges for amendments, extensions, drawings, and renewals.(vi) If by reason of (i) any change after the Closing Date in any Applicable Law, treaty, rule, or regulation or any change in the interpretation or application thereof by any Governmental Authority, or (ii) compliance by the European Underlying Issuer or the Lender Group with any direction, request, or requirement (irrespective of whether having the force of law) of any Governmental Authority or monetary authority including, Regulation D of the Federal Reserve Board as from time to time in effect (and any successor thereto):(A) any reserve, deposit, or similar requirement is or shall be imposed or modified in respect of any European Letter of Credit issued hereunder, or
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