Revolving Credit CUSIP Number:
dated as of May 31, 2006
as Borrower,
as Guarantor,
as Administrative Agent
and Issuing Lender,
as Syndication Agent and Swingline Lender,
as Syndication Agent
as Documentation Agent
as Sole Book Manager
as Lead Arranger
Page | ||||||
ARTICLE I DEFINITIONS | 1 | |||||
SECTION 1.1 | Definitions | 1 | ||||
SECTION 1.2 | Other Definitions and Provisions | 32 | ||||
SECTION 1.3 | Accounting Terms | 33 | ||||
SECTION 1.4 | PPSA and CCQ Terms | 33 | ||||
SECTION 1.5 | Rounding | 33 | ||||
SECTION 1.6 | References to Agreement and Laws | 33 | ||||
SECTION 1.7 | Times of Day | 34 | ||||
SECTION 1.8 | Letter of Credit Amounts | 34 | ||||
SECTION 1.9 | Amount of Obligations | 34 | ||||
ARTICLE II REVOLVING CREDIT FACILITY | 34 | |||||
SECTION 2.1 | Revolving Credit Loans | 34 | ||||
SECTION 2.2 | Swingline Loans | 34 | ||||
SECTION 2.3 | Procedure for Advances of Revolving Credit Loans and Swingline Loans | 37 | ||||
SECTION 2.4 | Repayment and Prepayment of Revolving Credit Loans and Swingline Loans | 38 | ||||
SECTION 2.5 | Permanent Reduction of the Commitment | 41 | ||||
SECTION 2.6 | Termination of Credit Facility | 41 | ||||
SECTION 2.7 | Terms Applicable to BA Loans | 42 | ||||
ARTICLE III LETTER OF CREDIT FACILITY | 47 | |||||
SECTION 3.1 | L/C Commitment | 47 | ||||
SECTION 3.2 | Procedure for Issuance of Letters of Credit | 48 | ||||
SECTION 3.3 | Commissions and Other Charges | 48 | ||||
SECTION 3.4 | L/C Participations | 49 | ||||
SECTION 3.5 | Reimbursement Obligation of the Borrower | 50 | ||||
SECTION 3.6 | Obligations Absolute | 51 | ||||
SECTION 3.7 | Effect of Letter of Credit Application | 51 | ||||
ARTICLE IV GENERAL LOAN PROVISIONS | 51 | |||||
SECTION 4.1 | Interest | 51 | ||||
SECTION 4.2 | Notice and Manner of Conversion or Continuation of Loans | 54 | ||||
SECTION 4.3 | Fees | 56 | ||||
SECTION 4.4 | Manner of Payment | 56 | ||||
SECTION 4.5 | Evidence of Indebtedness | 57 | ||||
SECTION 4.6 | Adjustments | 57 | ||||
SECTION 4.7 | Nature of Obligations of Lenders Regarding Extensions of Credit; Assumption | |||||
by the Administrative Agent | 58 | |||||
SECTION 4.8 | Changed Circumstances | 59 |
i
Page | ||||||
SECTION 4.9 | Indemnity | 60 | ||||
SECTION 4.10 | Increased Costs | 60 | ||||
SECTION 4.11 | Taxes | 62 | ||||
SECTION 4.12 | Mitigation Obligations; Replacement of Lenders | 64 | ||||
SECTION 4.13 | Security | 65 | ||||
SECTION 4.14 | Additional Subsidiary Borrowers | 65 | ||||
ARTICLE V CLOSING; CONDITIONS OF CLOSING AND BORROWING | 67 | |||||
SECTION 5.1 | Closing | 67 | ||||
SECTION 5.2 | Conditions to Closing and Initial Extensions of Credit | 67 | ||||
SECTION 5.3 | Conditions to All Extensions of Credit | 70 | ||||
ARTICLE VI REPRESENTATIONS AND WARRANTIES OF THE BORROWER | 72 | |||||
SECTION 6.1 | Representations and Warranties | 72 | ||||
SECTION 6.2 | Survival of Representations and Warranties, Etc | 79 | ||||
ARTICLE VII FINANCIAL INFORMATION AND NOTICES | 79 | |||||
SECTION 7.1 | Financial Statements and Projections | 79 | ||||
SECTION 7.2 | Officer's Compliance Certificate | 82 | ||||
SECTION 7.3 | Accountants' Certificate | 82 | ||||
SECTION 7.4 | Other Reports | 82 | ||||
SECTION 7.5 | Notice of Litigation and Other Matters | 82 | ||||
SECTION 7.6 | Accuracy of Information | 83 | ||||
ARTICLE VIII AFFIRMATIVE COVENANTS | 84 | |||||
SECTION 8.1 | Preservation of Corporate Existence and Related Matters | 84 | ||||
SECTION 8.2 | Maintenance of Property; Reinvestment | 84 | ||||
SECTION 8.3 | Insurance | 85 | ||||
SECTION 8.4 | Accounting Methods and Financial Records | 85 | ||||
SECTION 8.5 | Payment of Taxes | 85 | ||||
SECTION 8.6 | Compliance With Laws and Approvals | 85 | ||||
SECTION 8.7 | Environmental Laws | 85 | ||||
SECTION 8.8 | Compliance with ERISA | 86 | ||||
SECTION 8.9 | Visits and Inspections | 86 | ||||
SECTION 8.10 | Additional Subsidiary Guarantors and Parent Guarantors | 86 | ||||
SECTION 8.11 | Use of Proceeds | 87 | ||||
SECTION 8.12 | Further Assurances | 87 | ||||
ARTICLE IX FINANCIAL COVENANTS | 88 | |||||
SECTION 9.1 | Consolidated Senior Secured Leverage Ratio | 88 | ||||
SECTION 9.2 | Interest Coverage Ratio | 88 | ||||
ARTICLE X NEGATIVE COVENANTS | 88 | |||||
SECTION 10.1 | Limitations on Indebtedness | 88 | ||||
SECTION 10.2 | Limitations on Liens | 91 |
ii
Page | ||||||
SECTION 10.3 | Limitations on Loans, Advances, Investments and Acquisitions | 92 | ||||
SECTION 10.4 | Limitations on Mergers and Liquidation | 93 | ||||
SECTION 10.5 | Limitations on Asset Dispositions | 94 | ||||
SECTION 10.6 | Limitations on Dividends and Distributions | 95 | ||||
SECTION 10.7 | Limitations on Exchange and Issuance of Capital Stock | 96 | ||||
SECTION 10.8 | Transactions with Affiliates | 96 | ||||
SECTION 10.9 | Certain Accounting Changes; Organizational Documents | 96 | ||||
SECTION 10.10 | Amendments; Payments and Prepayments of Indebtedness | 97 | ||||
SECTION 10.11 | Restrictive Agreements | 98 | ||||
SECTION 10.12 | Nature of Business | 98 | ||||
SECTION 10.13 | Impairment of Security Interests | 99 | ||||
ARTICLE XI UNCONDITIONAL U.S. BORROWER GUARANTY | 99 | |||||
SECTION 11.1 | Guaranty of Obligations | 99 | ||||
SECTION 11.2 | Nature of Guaranty | 99 | ||||
SECTION 11.3 | Waivers | 100 | ||||
SECTION 11.4 | Modification of Loan Documents, Etc. | 101 | ||||
SECTION 11.5 | Demand by the Administrative Agent | 102 | ||||
SECTION 11.6 | Termination; Reinstatement | 102 | ||||
SECTION 11.7 | No Subrogation | 103 | ||||
SECTION 11.8 | Payments | 103 | ||||
ARTICLE XII DEFAULT AND REMEDIES | 104 | |||||
SECTION 12.1 | Events of Default | 104 | ||||
SECTION 12.2 | Remedies | 106 | ||||
SECTION 12.3 | Rights and Remedies Cumulative; Non-Waiver; etc | 107 | ||||
SECTION 12.4 | Crediting of Payments and Proceeds | 107 | ||||
SECTION 12.5 | Administrative Agent May File Proofs of Claim | 108 | ||||
ARTICLE XIII THE ADMINISTRATIVE AGENT | 109 | |||||
SECTION 13.1 | Appointment and Authority | 109 | ||||
SECTION 13.2 | Rights as a Lender | 110 | ||||
SECTION 13.3 | Exculpatory Provisions | 111 | ||||
SECTION 13.4 | Reliance by the Administrative Agent | 111 | ||||
SECTION 13.5 | Delegation of Duties | 112 | ||||
SECTION 13.6 | Resignation of Administrative Agent | 112 | ||||
SECTION 13.7 | Non-Reliance on Administrative Agent, the Arranger and Other Lenders | 113 | ||||
SECTION 13.8 | No Other Duties, etc | 113 | ||||
SECTION 13.9 | Collateral and Guaranty Matters | 114 | ||||
SECTION 13.10 | Swingline Lender | 114 | ||||
ARTICLE XIV MISCELLANEOUS | 115 | |||||
SECTION 14.1 | Notices | 115 | ||||
SECTION 14.2 | Amendments, Waivers and Consents | 116 |
iii
Page | ||||||
SECTION 14.3 | Expenses; Indemnity | 118 | ||||
SECTION 14.4 | Right of Setoff | 120 | ||||
SECTION 14.5 | Governing Law | 121 | ||||
SECTION 14.6 | Waiver of Jury Trial | 121 | ||||
SECTION 14.7 | Reversal of Payments | 122 | ||||
SECTION 14.8 | Injunctive Relief; Punitive Damages | 122 | ||||
SECTION 14.9 | Accounting Matters | 122 | ||||
SECTION 14.10 | Successors and Assigns; Participations | 122 | ||||
SECTION 14.11 | Confidentiality | 125 | ||||
SECTION 14.12 | Performance of Duties | 126 | ||||
SECTION 14.13 | All Powers Coupled with Interest | 126 | ||||
SECTION 14.14 | Survival of Indemnities | 126 | ||||
SECTION 14.15 | Titles and Captions | 126 | ||||
SECTION 14.16 | Severability of Provisions | 126 | ||||
SECTION 14.17 | Counterparts | 127 | ||||
SECTION 14.18 | Integration | 127 | ||||
SECTION 14.19 | Term of Agreement | 127 | ||||
SECTION 14.20 | Advice of Counsel, No Strict Construction | 127 | ||||
SECTION 14.21 | Inconsistencies with Other Documents; Independent Effect of Covenants | 127 |
iv
Exhibit A-1 | — | Form of Revolving Credit Note | ||
Exhibit A-2 | — | Form of Swingline Note | ||
Exhibit B | — | Form of Notice of Borrowing | ||
Exhibit C | — | Form of Notice of Account Designation | ||
Exhibit D | — | Form of Notice of Prepayment | ||
Exhibit E | — | Form of Notice of Conversion/Continuation | ||
Exhibit F | — | Form of Officer's Compliance Certificate | ||
Exhibit G | — | Form of Assignment and Assumption | ||
Exhibit H | — | Form of Subsidiary Guaranty Agreement | ||
Exhibit I | — | Form of Collateral Agreement | ||
Exhibit J | — | Form of Intercompany Subordination Agreement |
Schedule 1.1(a) | — | Existing Letters of Credit | ||
Schedule 1.1(b) | — | Specified Existing Notes | ||
Schedule 6.1(b) | — | Subsidiaries and Capitalization | ||
Schedule 6.1(i-1) | — | ERISA Plans | ||
Schedule 6.1(i-2) | — | Canadian Plans | ||
Schedule 6.1(l) | — | Significant Indebtedness | ||
Schedule 6.1(n) | — | Burdensome Provisions | ||
Schedule 6.1(t) | — | Litigation | ||
Schedule 10.1 | — | Permitted Indebtedness | ||
Schedule 10.2 | — | Existing Liens | ||
Schedule 10.3 | — | Existing Loans, Advances and Investments | ||
Schedule 10.8 | — | Transactions with Affiliates |
v
1
Pricing | Canadian Prime Rate | |||||||||
Level | Average Utilization Percentage | LIBOR + | or Base Rate + | |||||||
I | Greater than 75% | 2.00 | % | 0.75 | % | |||||
II | Greater than 35%, but less than or equal to 75% | 1.75 | % | 0.50 | % | |||||
III | Less than or equal to 35% | 1.50 | % | 0.25 | % |
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(a) | the face amount of such Bankers' Acceptance | ||
by | |||
(b) | the sum of oneplus the product of: |
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If to the U.S. Borrower | ||||
or the Borrower: | Bowater Incorporated | |||
55 East Camperdown Way | ||||
Greenville, SC 29602-1028 | ||||
Attention: Treasurer | ||||
Telephone No.: (864) 282-9413 | ||||
Telecopy No.: (864) 282-9219 | ||||
With copies to: | Pepper Hamilton LLP | |||
3000 Two Logan Square | ||||
Philadelphia, Pennsylvania 19103 | ||||
Attention: J. Bradley Boericke | ||||
Telephone No.: (215) 981-4790 | ||||
Telecopy No.: (215) 689-4615 | ||||
If to The Bank of | ||||
Nova Scotia as | ||||
Administrative Agent: | The Bank of Nova Scotia | |||
40 King Street West | ||||
Scotia Plaza, 62nd Floor | ||||
Toronto, Ontario M5W 2X6 | ||||
Attention: Corporate Banking Loan Syndication | ||||
Telephone No.: | ||||
Telecopy No.: (416) 866-3329 | ||||
If to any Lender: | To the address set forth on the Register |
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BOWATER CANADIAN FOREST PRODUCTS INC., as Borrower | ||||
By: | /s/ William G. Harvey | |||
William G. Harvey | ||||
Vice President and Treasurer | ||||
BOWATER INCORPORATED, as Guarantor | ||||
By: | /s/ William G. Harvey | |||
William G. Harvey | ||||
Senior Vice President and Chief Financial Officer | ||||
AGENTS AND LENDERS: THE BANK OF NOVA SCOTIA, as Administrative Agent, Issuing Lender and Lender | ||||
By: | /s/ David Angel | |||
Name: | David Angel | |||
Title: | Director, Paper For Forest Products | |||
/s/ Mark Nomaghan | ||||
Mark Monaghan | ||||
Associate | ||||
WACHOVIA BANK, NATIONAL ASSOCIATION, as Documentation Agent | ||||
By: | /s/ Scott Joyce | |||
Name: | Scott Joyce | |||
Title: | Vice President | |||
BANK OF MONTREAL,as Swingline Lender and Lender | ||||
By: | /s/ Bruno Jarry | |||
Name: | Bruno Jarry | |||
Title: | Director | |||
THE TORONTO DOMINION BANK, as Lender | ||||
By: | /s/ Parin Karnj | |||
Name: | Parn Karnj | |||
Title: | Manager | |||
Credit Agreement
40 King Street West
Scotia Plaza, 62nd Floor
Toronto, Ontario M5W 2X6
Attention: Corporate Banking Loan Syndication
Re: | Credit Agreement dated as of May 31, 2006 (as amended, the "Credit Agreement") by and among Bowater Canadian Forest Products Inc., as borrower (the "Borrower"), Bowater Incorporated, as guarantor (the "U.S. Borrower"), the banks and financial institutions party thereto, as lenders (the "Lenders"), and The Bank of Nova Scotia, as administrative agent (the "Administrative Agent") |
[Insert name of applicable financial institution] | ||||||
By: | ||||||
Name: | ||||||
Title: | ||||||
EXHIBIT 10.34
EXHIBIT A-I
to
Credit Agreement
dated as of May 31, 2006
by and among
Bowater Canadian Forest Products Inc.,
as Borrower,
Bowater Incorporated,
as Guarantor
the Lenders party thereto,
as Lenders,
The Bank of Nova Scotia
As Administrative Agent and Issuing Lender,
and
Bank of Montreal,
as Syndication Agent and Swingline Lender
FORM OF REVOLVING CREDIT NOTE
REVOLVING CREDIT NOTE
$ (or any higher amount based on the Dollar Amount of Revolving Credit Loans denominated in Canadian Dollars made by the Lender to the Borrower) | .200 |
FOR VALUE RECEIVED, the undersigned, BOWAER CANADIAN FOREST PRODUCTS INC., a Canadian corporation (the “Borrower”), promises to pay to the order of (the “Lender”), at the place and times provided in the Credit Agreement referred to below, the principal sum of DOLLARS ($ ) (or any higher amount based on the Dollar Amount of any Revolving Credit Loans (other than made BA Loans) denominated in Canadian Dollars made by the Lender to the Borrower under this Revolving Credit Note) or, if less, the principal amount of all Revolving Credit Loans (other than BA Loans) made by the Lender from time to time pursuant to that certain Credit Agreement dated as of May 31, 2006 (as amended, restated, supplemented or otherwise modified from time to time, the “Credit Agreement”) by and among the Borrower, as Borrower, Bowater Incorporated, as Guarantor, the Lenders who are or may become a party thereto, as Lenders, the Bank of Nova Scotia, as Administrative Agent and Issuing Lender, and Bank of Montreal, as Syndication Agent and Swingline Lender. Capitalized terms used herein and not defined herein shall have the meanings assigned thereto in the Credit Agreement.
The unpaid principal amount of this Revolving Credit Note from time to time outstanding is subject to mandatory repayment from time to time as provided in the Credit Agreement and shall bear interest as provided inSection 4.1 of the Credit Agreement. All payments of principal and interest on this Revolving Credit Note shall be payable in applicable permitted currency in immediately available funds to the account designated in the Credit Agreement.
This Revolving Credit Note is entitled to the benefits of, and evidences Obligations incurred under, the Credit Agreement, to which reference is made for a description of the security for this Revolving Credit Note and for a statement of the terms and conditions on which the Borrower is permitted and required to make prepayments and repayments of principal of the Obligations evidenced by this Revolving Credit Note and on which such Obligations may be declared to be immediately due and payable.
THIS REVOLVING CREDIT NOTE SHALL BE GOVERNED BY, AND CONSTRUED IN ACCORDANCE WITH, THE LAW OF THE STATE OF NEW YORK, WITHOUT REFERENCE TO THE CONFLICTS OF LAW PRINCIPLES THEREOF.
The Indebtedness evidenced by this Revolving Credit Note is senior in right of payment to all Subordinated Indebtedness referred to in the Credit Agreement.
The Borrower hereby waives all requirements as to diligence, presentment, demand of payment, protest and (except as required by the Credit Agreement) notice of any kind with respect to this Revolving Credit Note.
[Signature Page Follows]
IN WITNESS WHEREOF, the undersigned has executed this Revolving Credit Note under seal as of the day and year first above written.
BOWATER CANADIAN FOREST PRODUCTS INC. | ||||
By: |
| |||
Name: |
| |||
Title: |
|
EXHIBIT A-2
to
Credit Agreement
dated as of May 31, 2006
by and among
Bowater Canadian Forest Products Inc.,
as Borrower,
Bowater Incorporated,
as Guarantor
the Lenders party thereto,
as Lenders,
The Bank of Nova Scotia
as Administrative Agent
Bank of Montreal
as Syndication Agent and Swingline Lender
FORM OF SWINGLINE NOTE
SWINGLINE NOTE
$10,000,000 (or any higher amount based on the Dollar Amount of Swingline Loans denominated in Canadian Dollars made by the Lender to the Borrower) | 200 |
FOR VALUE RECEIVED, the undersigned, Bowater Canadian Forest Products Inc., a Canadian corporation (the “Borrower”), promises to pay to the order of (the “Lender”), at the place and times provided in the Credit Agreement referred to below, the principal sum of TEN MILLION DOLLARS ($10,000,000) (or any higher amount based on the Dollar Amount of any Swingline Loans denominated in Canadian Dollars made by the Lender to the Borrower under this Swingline Note) or, if less, the principal amount of all Swingline Loans made by the Lender from time to time pursuant to that certain Credit Agreement dated as of May 31, 2006 (as amended, restated, supplemented or otherwise modified from time to time, the “Credit Agreement”) by and among the Borrower, as Borrower, Bowater Incorporated, as Guarantor, the Lenders who are or may become a party thereto, as Lenders, the Bank of Nova Scotia, as Administrative Agent and Issuing Lender, and Bank of Montreal Syndication Agent and Swingline Lender. Capitalized terms used herein and not defined herein shall have the meanings assigned thereto in the Credit Agreement.
The unpaid principal amount of this Swingline Note from time to time outstanding is subject to mandatory repayment from time to time as provided in the Credit Agreement and shall bear interest as provided inSection 4.1 of the Credit Agreement. Swingline Loans refunded as Revolving Credit Loans in accordance withSection 2.2(b) of the Credit Agreement shall be payable by the Borrower as Revolving Credit Loans pursuant to the Revolving Credit Notes, and shall not be payable under this Swingline Note as Swingline Loans. All payments of principal and interest on this Swingline Note shall be payable in the applicable permitted currency in immediately available funds to the account designated in the Credit Agreement.
This Swingline Note is entitled to the benefits of, and evidences Obligations incurred under, the Credit Agreement, to which reference is made for a description of the security for this Swingline Note and for a statement of the terms and conditions on which the Borrower is permitted and required to make prepayments and repayments of principal of the Obligations evidenced by this Swingline Note and on which such Obligations may be declared to be immediately due and payable.
THIS SWINGLINE NOTE SHALL BE GOVERNED BY, AND CONSTRUED IN ACCORDANCE WITH, THE LAW OF THE STATE OF NEW YORK, WITHOUT REFERENCE TO THE CONFLICTS OF LAW PRINCIPLES THEREOF.
The Indebtedness evidenced by this Swingline Note is senior in right of payment to all Subordinated Indebtedness referred to in the Credit Agreement.
The Borrower hereby waives all requirements as to diligence, presentment, demand of payment, protest and (except as required by the Credit Agreement) notice of any kind with respect to this Swingline Note.
[Signature Page Follows]
IN WITNESS WHEREOF, the undersigned has executed this Swingline Note under seal as of the day and year first above written.
BOWATER CANADIAN FOREST PRODUCST INC. | ||||
By: |
| |||
Name: |
| |||
Title: |
|
EXHIBIT B
to
Credit Agreement
dated as of May 31, 2006
by and among
Bowater Canadian Forest Products Inc.,
as Borrower,
Bowater Incorporated
as Guarantor
the Lenders party thereto,
as Lenders,
The Bank of Nova Scotia
as Administrative Agent and Issuing Lender
and
Bank of Montreal
as Syndication Agent and Swingline Lender
FORM OF NOTICE OF BORROWING
NOTICE OF BORROWING
Dated as of:
The Bank of Nova Scotia,
As Administrative Agent
40 King Street West
Scotia Plaza, 62nd Floor
Toronto, Ontario M5W 2X6
Attention: Corporate Banking Loan Syndication
Ladies and Gentlemen:
This irrevocable Notice of Borrowing is delivered to you pursuant toSection 2.3 of the Credit Agreement dated as of May 31, 2006 (as amended, restated, supplemented or otherwise modified, the “Credit Agreement”) by and among Bowater Canadian Forest Products Inc., a Canadian corporation, as Borrower, Bowater Incorporated, a Delaware corporation, as Guarantor, the lenders who are or may become party thereto, as Lenders, The Bank of Nova Scotia, as Administrative Agent and Issuing Lender, and Bank of Montreal, as Syndication Agent and Swingline Lender.
1. The Borrower hereby requests that the [Lenders] [Swingline Lender] make a [Revolving Credit Loan] [Swingline Loan] to the Borrower in the aggregate principal amount of [$/C$] . (Complete with an amount and permitted currency in accordance with Section 2.3(a) of the Credit Agreement.)
2. The Borrower hereby requests that such Loan be made on the following Business Day: . (Complete with a Business Day in accordance withSection 2.3(a) of the Credit Agreement).
3. The Borrower hereby requests that such Loan bear interest at the following interest rate, plus the Applicable Margin, as set forth below:
Component of Loan | Interest Rate | Interest Period (LIBOR Rate Loan and BA Loan only) | Termination Date for Interest Period (if applicable) | |||
[Insert applicable Canadian Prime Rate, Base Rate BA Discount Rate or LIBOR Rate]l |
1 | Complete with (i) the Canadian Prime Rate, the Base Rate, the BA Discount Rate or the LIBOR Rate for Revolving Credit Loans (provided that the LlBOR Rate and the BA Discount Rate shall not be available until three (3) Business Days after the Closing Date unless the Borrower has delivered to the Administrative Agent a letter in form and substance satisfactory to the Administrative Agent indemnifying the Lenders in the manner set forth inSection 4.9 of this Agreement) or (ii) the Canadina Prime Rate or the Base Rate for Swingline Loans. |
4. The aggregate principal amount of all outstanding Loans (including the Loan requested herein) and all outstanding L/C Obligations does not exceed the maximum amount permitted to be outstanding pursuant to the terms of the Credit Agreement.
5. All of the conditions applicable to the Loan requested herein as set forth in the Credit Agreement have been satisfied as of the date hereof and will remain satisfied to the date of such Loan.
6. Capitalized terms used herein and not defined herein shall have the meanings assigned thereto in the Credit Agreement.
[Signature Page Follows]
2
3
EXHIBIT C
to
Credit Agreement
dated as of May 31, 2006
by and among
Bowater Canadian Forest Products Inc.,
as Borrower
Bowater Incorporated,
as Guarantor,
the Lenders party thereto,
as Lenders,
The Bank of Nova Scotia
as Administrative Agent and Issuing Lender
and
Bank of Montreal,
as Syndication Agent and Swingline Lender
FORM OF NOTICE OF ACCOUNT DESIGNATION
NOTICE OF ACCOUNT DESIGNATION
Dated as of:
The Bank of Nova Scotia
As Administrative Agent
40 King Street West
Scotia Plaza, 62nd Floor
Toronto, Ontario M5W 2X6
Attention: Corporate Banking Loan Syndication
Ladies and Gentlemen:
This Notice of Account Designation is delivered to you pursuant toSection 2.3 of the Credit Agreement dated as of May 31, 2006 (as amended, restated, supplemented or otherwise modified, the “Credit Agreement”) by and among Bowater Canadian Forest Produts Inc., a Canadian corporation, as Borrower, Bowater Incorporated, a Delaware corporation, as Guarantor, the Lenders who are or may become party thereto, as Lenders, and The Bank of Nova Scotia, as Administrative Agent and Issuing Lender, and Bank of Montreal, Syndication Agent and Swingline Lender.
1. The Administrative Agent is hereby authorized to disburse all Loan proceeds into the following account(s):
| ||||
Swift: | ||||
Branch: | ||||
Transit | ||||
Account Number: |
2. This authorization shall remain in effect until revoked or until a subsequent Notice of Account Designation is provided to the Administrative Agent.
3. Capitalized terms used herein and not defined herein shall have the meanings assigned thereto in the Credit Agreement.
[Signature Page Follows]
IN WITNESS WHEREOF, the undersigned has executed this Notice of Account Designation as of the day and year first written above.
BOWATER CANADIAN FOREST PRODUCTS INC. | ||||
By: |
| |||
Name: |
| |||
Title: |
|
EXHIBIT D
to
Credit Agreement
dated as of May 31, 2006
by and among
Bowater Canadian Forest Products Inc.,
as Borrower
Bowater Incorporated,
as Guarantor,
the Lenders party thereto,
as Lenders,
The Bank of Nova Scotia
as Administrative Agent and Issuing Lender
and
Bank of Montreal
as Syndication Agent and Swingline Lender
FORM OF NOTICE OF PREPAYMENT
NOTICE OF PREPAYMENT
Dated as of:
The Bank of Nova Scotia
As Administrative Agent
40 King Street West
Scotia Plaza, 62nd Floor
Toronto, Ontario M5W 2X6
Attention: Corporate Banking Loan Syndication Ladies and Gentlemen:
This irrevocable Notice of Prepayment is delivered to you pursuant toSection 2.4(c) of the Credit Agreement dated as of May 31, 2006 (as amended, restated, supplemented or otherwise modified, the“Credit Agreement”) by and among Bowater Canadian Forest Products Inc., a Canadian Corporation, as Borrower, Bowater Incorporated, a Delaware corporation, as Guarantor, the Lenders who are or may become party thereto, as Lenders, and The Bank of Nova Scotia as Administrative Agent and Issuing Lender , and Bank of Montreal, as Syndication Agent and Swingline Lender.
1. The Borrower hereby provides notice to the Administrative Agent that it shall repay the following [Canadian Prime Rate Loans] and/or [BA Loans] and/or [Base Rate Loans] and/or [LIBOR Rate Loans]: [$/C$] . (Complete with an amount or amounts in accordance with Section 2.4(c) of the Credit Agreement.)
2. The Loan to be prepaid is a [check each applicable box]
¨ | Swingline Loan |
¨ | Revolving Credit Loan |
3. The Borrower shall repay the above-referenced Loans on the following Business Day: . (Complete with (i) Business Day in accordance with Section 2.4(c) fo the Credit Agreement.
4. Capitalized terms used herein and not defined herein shall have the meanings assigned thereto in the Credit Agreement.
[Signature Page Follows]
IN WITNESS WHEREOF, the undersigned has executed this Notice of Prepayment as of the day and year first written above.
BOWATER CANADIAN FOREST PRODUCTS INC. | ||||
By: |
| |||
Name: |
| |||
Title: |
|
EXHIBIT E
to
Credit Agreement
dated as of May 31, 2006
by and among
Bowater Canadian Forest Products Inc.,
as Borrower
Bowater Incorporated,
as Guarantor,
the Lenders party thereto,
as Lenders,
The Bank of Nova Scotia
as Administrative Agent and Issuing Lender
and
Bank of Montreal
as Syndication Agent and Swingline Lender
FORM OF NOTICE OF CONVERSION/CONTINUATION
NOTICE OF CONVERSION/CONTINUATION
Dated as of:
The Bank of Nova Scotia
As Administrative Agent
40 King Street West
Scotia Plaza, 62nd Floor
Toronto, Ontario M5W 2X6
Attention: Corporate Banking Loan Syndication
Ladies and Gentlemen:
This irrevocable Notice of Conversion/Continuation (this “Notice”) is delivered to you pursuant toSection 4.2 of the Credit Agreement dated as of May 31, 2006 (as amended, restated, supplemented or otherwise modified, the “Credit Agreement”) by and among Bowater Canadian Forest Products, as Borrower, Bowater Incorporated, a Delaware corporation, as Guarantor, the Lenders who are or may become party thereto, as Lenders, the Bank of Nova Scotia, as Administrative Agent and Issuing Lender, and Bank of Montreal, as Syndication Agent and Swingline Lender.
1. The Loan to which this Notice relates is a Revolving Credit Loan.
2. This Notice is submitted for the purpose of: (Check one and complete applicable information in accordance with the Credit Agreement.)
¨ | Converting all or a portion of a Canadian Prime Rate Loan into a LIBOR Rate Loan denominated in Canadian Dollars |
(a) | The aggregate outstanding principal balance of such Loan is C$ . |
(b) | The principal amount of such Loan to be converted is C$ . |
(c) | The requested effective date of the conversion of such Loan is the following Business Day: . |
(d) | The requested Interest Period applicable to the converted Loan id is . |
¨ | Converting all or a portion of a Canadian Prime Rate Loan into a BA Loan |
(a) | The aggregate outstanding principal balance of such Loan is C$ |
(b) | The principal amount of such Loan to be converted is C$ . |
(c) | The requested effective date of the conversion of such Loan is the following Business day . |
(d) | The requested Interest Period applicable to the converted Loan is . |
¨ | Converting all or a portion of a LIBOR Rate Loan denominated in Canadian Dollars into a Canadian Prime Rate Loan |
(a) | The aggregate outstanding principal balance of such Loan is C$ . |
(b) | The last day of the current Interest Period for such Loan is . |
(c) | The principal amount of such Loan to be converted is C$ . |
(d) | The requested effective date of the conversion of such Loan is: . |
¨ | Converting all or a portion of a LIBOR Rate Loan denominated in Canadian Dollars into a BA Loan |
(a) | The aggregate outstanding principal balance of such Loan is C$ . |
(b) | The last day of the current Interest Period for such a Loan is . |
(c) | The principal amount of such Loan to be converted is C$: . |
(d) | The requested effective date of the conversion of such Loan is |
(e) | The requested Interest Period applicable to the converted Loan is |
¨ | Continuing all or a portion of a LIBOR Rate Loan denominated in Dollars as a LIBOR Rate Loan denominated in Dollars |
(a) | The aggregate outstanding principal balance of such Loan is $ . |
(b) | The last day of the current Interest Period for such a Loan is . |
(c) | The principal amount of such Loan to be continued is $: . |
(d) | The requested effective date of the continuation of such Loan is the following Business Day |
(e) | The requested Interest Period applicable to the continued Loan is |
¨ | Continuing all or a portion of a LIBOR Rate Loan denominated in Canadian Dollars as a LIBOR Rate Loan denominated in Canadina Dollars |
(a) | The aggregate outstanding principal balance of such Loan is C$ . |
(b) | The last day of the current Interest Period for such a Loan is . |
(c) | The principal amount of such Loan to be continued is C$: . |
(d) | The requested effective date of the continuation of such Loan is the following Business Day |
(e) | The requested Interest Period applicable to the continued Loan is |
¨ | Converting all or a portion of a BA Loan into a Canadian Prime Rate Loan |
(a) | The aggregate outstanding principal balance of such Loan is C$ . |
(b) | The last day of the current Interest Period for such a Loan is . |
(c) | The principal amount of such Loan to be converted is C$: . |
(d) | The requested effective date of the conversion of such Loan is |
¨ | Converting all or a portion of a BA Loan into a LIBOR Rate Loan denominated in Canadian Dollars |
(a) | The aggregate outstanding principal balance of such Loan is C$ . |
(b) | The last day of the current Interest Period for such a Loan is . |
(c) | The principal amount of such Loan to be converted is C$: . |
(d) | The requested effective date of the conversion of such Loan is the following Business Day |
(e) | The requested Interest Period applicable to the converted Loan is |
¨ | Continuing all or a portion of a BA Loan as a BA Loan |
(a) | The aggregate outstanding principal balance of such Loan is C$ . |
(b) | The last day of the current Interest Period for such a Loan is . |
(c) | The principal amount of such Loan to be converted is C$: . |
(d) | The requested effective date of the conversion of such Loan is the following Business Day |
(e) | The requested Interest Period applicable to the converted Loan is |
¨ | Converting all or a portion of a base Rate Loan into a LIBOR Rate Loan denominated in Dollars |
(a) | The aggregate outstanding principal balance of such Loan is $ . |
(b) | The principal amount of such Loan to be converted is $: . |
(c) | The requested effective date of the conversion of such Loan is the following Business Day |
(d) | The requested Interest Period applicable to the converted Loan is |
¨ | Converting all or a portion of a LIBOR Rate Loan denominated in Dollars into a Base Rate Loan |
(a) | The aggregate outstanding principal balance of such Loan is $ . |
(b) | The last day of the current Interest Period for such a Loan is . |
(c) | The principal amount of such Loan to be converted is $: . |
(d) | The requested Interest Period applicable to the converted Loan is the following Business Day |
¨ | Continuing all or a portion of a LIBOR Rate Loan denominated in Dollars as a LIBOR Rate Loan |
(a) | The aggregate outstanding principal balance of such Loan is $ . |
(b) | The last day of the current Interest Period for such a Loan is . |
(c) | The principal amount of such Loan to be converted is $: . |
(d) | The requested effective date of the conversion of such Loan is the following Business Day |
(e) | The requested Interest Period applicable to the continued Loan is |
3. The aggregate principal amount of all outstanding Loans (including the Loan requested herein) and all outstanding L/C Obligations as of the date hereof does not exceed the maximum amount permitted to be outstanding pursuant to the terms of the Credit Agreement.
4. All of the conditions applicable to the conversion or continuation of the Loan requested herein as set forth in the Credit Agreement have been satisfied or waived as of the date hereof and will remain satisfied or waived to the date of such Loan.
5. Capitalized terms used herein and not defined herein shall have the meanings assigned thereto in the Credit Agreement.
[Signature Page Follows]
2
IN WITNESS WHEREOF, the undersigned has executed this Notice of Conversion/Continuation as of the day and year first written above.
BOWATER CANADIAN FOREST PRODUCTS INC. | ||||
By: |
| |||
Name: |
| |||
Title: |
|
3
EXHIBIT F
to
Credit Agreement
dated as of May 31, 2006
by and among
Bowater Canadian Forest Products Inc.,
as Borrower
Bowater Incorporated,
as Guarantor,
the Lenders party thereto,
as Lenders,
The Bank of Nova Scotia
as Administrative Agent and Issuing Lender
and
Bank of Montreal
as Syndication Agent and Swingline Lender
FORM OF OFFICER’S COMPLIANCE CERTIFICATE
OFFICER’S COMPLIANCE CERTIFICATE
The undersigned, on behalf of Bowater Incorporated, a Delaware corporation, as Borrower, hereby certifies to the Administrative Agent and the Lenders, each as defined in the Credit Agreement referred to below, as follows:
1. This Officer’s Compliance Certificate is delivered to you pursuant toSection 7.2 of the Credit Agreement dated as of May 31, 2006 (as amended, restated, supplemented or otherwise modified, the “Credit Agreement”) by and among Bowater Incorporated, a Delaware corporation, as Borrower, the Lenders who are or may become party thereto, as Lenders, and Wachovia Bank, National Association, as Administrative Agent. Capitalized terms used herein and not defined herein shall have the meanings assigned thereto in the Credit Agreement.
2. (a) I have reviewed the financial statements of the Borrower and its Subsidiaries dated as of and for the period[s] then ended and such statements fairly present in all material respects the financial condition of the Borrower and its Subsidiaries on a Consolidated basis as of the dates indicated and the results of their operations for the period[s] indicated.
(b) I have reviewed the financial statements of the U.S. Borrower and its Subsidiaries dated as of the Test Date and for the period [s] then ended and such statements fairly present in all material respects the financial condition of the U.S. Borrower and its Subsidiaries as of the dates indicated and the results of their operations and cash flows for the period[s] indicated.
3. I have reviewed the terms of the Credit Agreement, and the related Loan Documents and have made, or caused to be made under my supervision, a review in reasonable detail of the transactions and the condition of the Borrower and its Subsidiaries and the U.S. borrower and its subsidiaries, respectively, during the accounting period covered by the financial statements referred to in Paragraph 2 above. Such review has not disclosed the existence during or at the end of such accounting period of any condition or event that constitutes a Default or an Event of Default, nor do I have any knowledge of the existence of any such condition or event as at the date of this Certificate [except, if such condition or event existed or exists, describe the nature and period of existence thereof and what action the Borrower or the U.S. Borrower has taken, is taking and proposes to take with respect thereto].
4. The Asset Coverage Amount and the Borrowing Limit and the calculations determining such figures are set forth on the attachedSchedule 1; the U.S. Borrower and its Subsidiaries are in compliance with the financial covenants contained inArticle IX of the Credit Agreement as shown on suchSchedule 1; and the U.S. Borrower and its Subsidiaries are in compliance with the other covenants and restrictions contained in the Credit Agreement.
5. Each Subsidiary that is designated an Immaterial Subsidiary, along with calculations of the book value of the assets owned by each such Immaterial Subsidiary and the percentage of the total assets of the U.S. Borrower and its Subsidiaries that is owned by each such Immaterial Subsidiary, is listed onSchedule 2.
6. Attached hereto asSchedule 3 is a list of each warehouse where inventory owned by the Credit Parties exceeds in value $1,000,000 in the aggregate (as determined on the most recent fiscal quarter end).Schedule 3 shall include (A) the specific location of such warehouse, (B) the name of the applicable consignee, warehouseman, bailee or other similar party and (C) the value of the applicable inventory located at such warehouse).
7. Attached hereto asSchedule 4 is a list of each Deposit Account (other than each Excluded Deposit Accounts) owned by the Credit Parties with respect to which a control agreement has not been executed.
[Signature Page Follows]
2
WITNESS the following signature as of the day and year first written above.
BOWATER CANADIAN FOREST PRODUCTS INC. | ||||
By: |
| |||
Name: |
| |||
Title: |
| |||
BOWATER INCORPORATED | ||||
By: |
| |||
Name: |
| |||
Title: |
|
3
Schedule 1
to
Officer’s Compliance Certificate
For the Fiscal Quarter Ending
Asset Coverage Amount and Borrowing Limit
A. | All Canadian Extensions of Credit as of such date $ | ||||||
B. | Asset Coverage Amount as of the such date2 | $ | |||||
(1) | All accounts receivable (excluding any intercompany accounts receivable) and all inventory of the Borrower and its Consolidated Subsidiaries | $ | |||||
(2) | Sixty-five Percent (65%) of Line B.(1) | $ | |||||
C. | Borrowing Limit (Line B.(4)minus Line A) | $ |
2 | To be calculated as the net book value of the applicable Coverage Assets as set forth on the Consolidated balance sheet of the Canadian Borrower and its Consolidated Subsidiaries. |
Pro Forma Covenant Compliance
A. | Section 9.1 Consolidated Senior Secured Leverage Ratio. |
(1) | Consolidated Total Senior Secured Indebtedness on such date | $ | |||||||
(2) | Consolidated EBITDA for the period of four (4) consecutive fiscal quarters ending on or immediately prior to such date3 | ||||||||
(A) | Consolidated Net Income for such period | $ | |||||||
(B) | The sum of the following to the extent deducted in determining Consolidated Net Income for such period: | ||||||||
(i) | income taxes for such period (orminus, to the extent added in determining Consolidated Net Income for such period, income tax benefit for such period) | $ | |||||||
(ii) | amortization, depreciation, depletion and other non-cash charges for such period | $ | |||||||
(iii) | Consolidated Interest Expense for such period | $ | |||||||
(iv) | any extraordinary charges for such period | $ |
3 | Consolidated EBITDA shall be adjusted on aproforma basis, in a manner consistent with Regulation S-X of the SEC or otherwise reasonably acceptable to the Administrative Agent, to include or exclude, as applicable, as of the first day of any applicable period, (A) any Permitted Acquisition closed during such period or (B) any permitted Asset Disposition closed during such period (other than Asset Dispositions permitted pursuant to Section 10.5(a)-(g)) of assets having an aggregate fair market value (at the time of the closing of such Asset Disposition) in excess of $50,000,000. |
2
(v) | any unusual or non-recurring charges for such period up to an amount not to exceed five percent (5%) of the Consolidated EBITDA of the U.S. Borrower and its Subsidiaries (as calculated without giving effect to this clause (v) or clause (vi) below) | $ | ||||||
(vi) | any cost savings and synergies associated with a Permitted Acquisition not to exceed five percent (5%) of the Consolidated EBITDA of the U.S. Borrower and its Subsidiaries (as calculated without giving effect to this clause (vi) or clause (v) above) | $ | ||||||
(vii) | any net loss on any Asset Disposition during such period | $ | ||||||
(viii) | Clause (i) plus (or minus) Clause (ii) plus Clause (iii) plus Clause (iv)plus Clause (v)plus Clause (vi)plus Clause (vii) | $ | ||||||
(C) | The sum of the following to the extent included in determining Consolidated Net Income for such period | |||||||
(i) | the aggregate amount of interest income for such period | $ | ||||||
(ii) | any extraordinary gains during such period | $ | ||||||
(iii) | any unusual or non-recurring gains during such period | $ | ||||||
(iv) | any net gain on any Asset Disposition during such period | $ | ||||||
(v) | Clause (i)plus Clause (ii)plus Clause (iii) plus Clause (iv) | $ |
3
(D) | Clause (A)plus (B)(viii)less Clause (C)(v) | $ | |||||||||
(3) | Line A.(l)dividedby Line A.(2)(D) | to 1.0 | |||||||||
Maximum Consolidated Senior Secured Leverage Ratio | 1.25 to 1.0 | ||||||||||
In Compliance? | YES/NO |
4
B. | Section 9.2 Interest Coverage Ratio. | ||||||||
(l) | Consolidated Adjusted EBITDA for the period of four (4) consecutive fiscal quarters ending on or immediately prior to such date4 | ||||||||
(A) | Consolidated EBITDA such period (Per Line A.(2)(D) above) | $ | |||||||
(B) | any net gain on any Asset Disposition during such period | $ | |||||||
(C) | any net loss on any Asset Disposition during such period | $ | |||||||
(D) | Clause (A) plus Clause (B)less Clause (C) | $ | |||||||
(2) | Consolidated Interest Expense paid or payable in cash for such period | ||||||||
(3) | Line B.(l )(D) divided Qy Line B.(2) | $ | to 1.0 | ||||||
Minimum Interest Coverage Ratio | 2.00 to 1.0 |
In Compliance? | YES/NO |
4 | Consolidated Adjusted EBITDA shall be adjusted on aPro forma basis, in a manner consistent with Regulation S-X of the SEC or otherwise reasonably acceptable to the Administrative Agent, to include or exclude, as applicable, as of the first day of any applicable period, (A) any Permitted Acquisition closed during such period or (B) any permitted Asset Disposition closed during such period (other than Asset Dispositions permitted pursuant toSection10.5(a)-(g))of assets having an aggregate fair market value (at the time of the closing of such Asset Disposition) in excess of $50,000,000 |
5
Schedule 2
to
Officer’s Compliance Certificate
IMMATERIAL SUBSIDIARIES
Immaterial Subsidiaries | Book Value of the assets Owned Thereby | Percentage of the total assets of the Borrower and its Subs |
6
Schedule 3
to
Officer’s Compliance Certificate
WAREHOUSE INVENTORYREPORT
[TO BE ATTACHED BY THE BORROWER]
7
Schedule 4
to
Officer’s Compliance Certificate
DEPOSIT ACCOUNTS (OTHER THAN EXCLUDED DEPOSIT ACCOUNTS)
WITH RESPECTTO WHICH A CONTROL AGREEMENT HAS NOT BEEN EXECUTED
[TO BE ATTACHED BY THE BORROWER]
8
EXHIBIT G
to
Credit Agreement
dated as of May 31, 2006
by and among
Bowater Canadian Forest Products Inc.,
as Borrower
Bowater Incorporated,
as Guarantor,
the Lenders party thereto,
as Lenders,
The Bank of Nova Scotia
as Administrative Agent and Issuing Lender
and
Bank of Montreal
as Syndication Agent and Swingline Lender
FORM OF ASSIGNMENT AND ASSUMPTION
ASSIGNMENT AND ASSUMPTION
This Assignment and Assumption (the “Assignment and Assumption”) is dated as of the Effective Date set forth below and is entered into by and between [Insert name of Assignor] (the “Assignor”) and each of the parties identified on the Schedules hereto as an “Assignee” (collectively, the “Assignees” and each, an “Assignee”). Capitalized terms used but not defined herein shall have the meanings given to them in the Credit Agreement identified below, receipt of a copy of which is hereby acknowledged by each Assignee. The Standard Terms and Conditions set forth in Annex 1 attached hereto are hereby agreed to and incorporated herein by reference and made a part of this Assignment and Assumption as if set forth herein in full.
For an agreed consideration, the Assignor hereby irrevocably sells and assigns to each Assignee, and each Assignee hereby irrevocably purchases and assumes from the Assignor, subject to and in accordance with the Standard Terms and Conditions and the Credit Agreement, as of the Effective Date inserted by the Administrative Agent as contemplated below:
(i) all of the Assignor’s rights and obligations in its capacity as a Lender under the Credit Agreement and any other documents or instruments delivered pursuant thereto to the extent related to the amount and percentage interest identified below of all of such outstanding rights and obligations of the Assignor under the respective facilities identified below (including any letters of credit, guarantees, and swingline loans included in such facilities); and
(ii) to the extent permitted to be assigned under Applicable Law, all claims, suits, causes of action and any other right of the Assignor (in its capacity as a Lender) against any Person, whether known or unknown, arising under or in connection with the Credit Agreement, any other documents or instruments delivered pursuant thereto or the loan transactions governed thereby or in any way based on or related to any of the foregoing, including, but not limited to, contract claims, tort claims, malpractice claims, statutory claims and all other claims at law or in equity related to the rights and obligations sold and assigned pursuant to clause (i) above;
(the rights and obligations sold and assigned pursuant to clauses (i) and (ii) above being referred to herein collectively as, the “Assigned Interests”). Such sale and assignment is without recourse to the Assignor and, except as expressly provided in this Assignment and Assumption, without representation or warranty by the Assignor. Each Assignee will, as of the Effective Date be bound by and entitled to the full benefit of the Credit Agreement and the other Loan Documents (including the Security Documents) to the extent of the Assinged Interests as if it were an original party thereto.
1. | Assignor: |
| ||||
2. | Assignee(s): | See Schedules attached hereto | ||||
3. | Borrower: | Bowater Canadian Forest Products Inc., a Canadian corporation | ||||
4. | Guarantor: | Bowater Incorporated, a Delaware corporation | ||||
5. | Administrative Agent: | The Bank of Nova Scotia, as the administrative agent under the Credit Agreement |
6. | Credit Agreement: | The Credit Agreement dated as of May 31, 2006 by and among Bowater Canadian Forest Products, as Borrower, Bowater Incorporated, as Guarantor, the Lenders parties thereto, the Bank of Nova Scotia, as Administrative Agent and Issuing Lender, and Bank of Montreal, as Syndication Agent and Swingline Lender (as amended, restated, supplemented or otherwise modified) | ||
7. | Assigned Interest: | See Schedules attached hereto | ||
[8. Trade Date: | ]5 | |||
Effective Date: | , 20 [TO BE INSERTED BY ADMINISTRATIVE AGENT AND WHICH SHALL BE THE EFFECTIVE DATE OF RECORDATION OF TRANSFER IN THE REGISTER THEREFOR.] |
[Remainder of Page Intentionally Left Blank]
5 | To be completed if the Assignor and the Assignee intend that the minimum assignment amount is to be determined as of the Trade Date. |
The terms set forth in this Assignment and Assumption are hereby agreed to:
ASSIGNOR | ||||
[NAME OF ASSIGNOR] | ||||
By: |
| |||
Name: |
| |||
Title: |
| |||
ASSIGNEES | ||||
See Schedules attached hereto |
SCHEDULE 1
To Assignment and Assumption
By its execution of this Schedule, the Assignee agrees to the terms set forth in the attached Assignment and Assumption.
Assigned Interest:
Facility Assigned6 | Aggregate Amount of Commitment/ Loans for all Lenders4 | Amount of Commitment/Loans Assigned7 | Percentage Assigned of Commitment/ Loans8 | CUSIP Number | ||||||
$ | $ | % | ||||||||
$ | $ | % | ||||||||
$ | $ | % |
[NAME OF ASSIGNEE] | ||||
[and is an Affiliate/Approved Fund of [identify Lender]9] | ||||
By: |
| |||
Name: |
| |||
Title: |
|
6 | Fill in the appropriate terminology for the types of facilities under the Credit Agreement that are being assigned under this Assignment (e.g. “Commitment,”) |
7 | Amount to be adjusted by the counterparties to take into account any payments, commitment reductions or prepayments made between the Trade Date and the Effective Date. |
8 | Set forth, to at least 9 decimals, as a percentage of the Commitment/Loans of all Lenders thereunder. |
9 | Select as applicable. |
[Consented to and]10 Accepted: | ||||
THE BANK OF NOVA SCOTIA, as Administrative Agent [and Swingline Lender] | ||||
By: |
| |||
Name: |
| |||
Title: |
| |||
BOWATER CANADIAN FOREST PRODUCTS, as Borrower | ||||
By: |
| |||
Name: |
| |||
Title: |
| |||
[Consented to:]11 | ||||
[ISSUING LENDER] | ||||
By: |
| |||
Name: |
| |||
Title: |
| |||
[Consented to:]12 | ||||
[ISSUING LENDER] | ||||
By: |
| |||
Name: |
| |||
Title: |
|
10 | To be added only if the consent of the Administrative Agent and/or the Borrower is required by the terms of the Credit Agreement. |
11 | To be added only if the consent of any Issuing Lender is required by the terms of the Credit Agreement. Include signature blocks for other Issuing Lenders, as applicable. |
12. | To be added only if the consent of the Swingline Lender is required by the terms of the Credit Agreement. |
ANNEX 1
to Assignment and Assumption
STANDARD TERMS AND CONDITIONS FOR
ASSIGNMENT AND ASSUMPTION
1.Representations and Warranties.
1.1Assignor. The Assignor (a) represents and warrants that (i) it is the legal and beneficial owner of the Assigned Interests, (ii) the Assigned Interests are free and clear of any lien, encumbrance or other adverse claim and (iii) it has full power and authority, and has taken all action necessary, to execute and deliver this Assignment and Assumption and to consummate the transactions contemplated hereby; and (b) assumes no responsibility with respect to (i) any statements, warranties or representations made in or in connection with the Credit Agreement or any other Loan Document, (ii) the execution, legality, validity, enforceability, genuineness, sufficiency or value of the Loan Documents or any collateral thereunder, (iii) the financial condition of the Borrower, any of its Subsidiaries or Affiliates or any other Person obligated in respect of any Loan Document or (iv) the performance or observance by the Borrower, any of its Subsidiaries or Affiliates or any other Person of any of their respective obligations under any Loan Document.
1.2.Assignees. Each Assignee (a) represents and warrants that (i) it has full power and authority, and has taken all action necessary, to execute and deliver this Assignment and Assumption and to consummate the transactions contemplated hereby and to become a Lender under the Credit Agreement, (ii) it meets all requirements of an Eligible Assignee under the Credit Agreement (subject to receipt of such consents as may be required under the Credit Agreement), (iii) from and after the Effective Date, it shall be bound by the provisions of the Credit Agreement as a Lender thereunder and, to the extent of the Assigned Interests, shall have the obligations of a Lender thereunder, (iv) it has received a copy of the Credit Agreement, together with copies of the most recent financial statements delivered pursuant toSection 7.1 thereof, as applicable, and such other documents and information as it has deemed appropriate to make its own individual credit analysis and decision to enter into this Assignment and Assumption and to purchase the Assigned Interests on the basis of which it has made such analysis and decision independently and without reliance on the Administrative Agent or any other Lender, and (v) if it is a Foreign Lender, attached to the Assignment and Assumption is any documentation required to be delivered by it pursuant to the terms of the Credit Agreement, duly completed and executed by the Assignee; and (b) agrees that (i) it will, independently and without reliance on the Administrative Agent, the Assignor or any other Lender, and based on such documents and information as it shall deem appropriate at the time, continue to make its own credit decisions in taking or not taking action under the Loan Documents, and (ii) it will perform in accordance with their terms all of the obligations that by the terms of the Loan Documents are required to be performed by it as a Lender.
2.Payments. From and after the Effective Date, the Administrative Agent shall make all payments in respect of the Assigned Interests (including payments of principal, interest, fees and other amounts) to the Assignor for amounts that have accrued to but excluding
the Effective Date and to the Assignees for amounts that have accrued from and after the Effective Date. The Assignor and each Assignee will make directly between themselves their own arrangements relating to the payment by the related Assignee to the Assignor of the consideration (or the payment of adjustments (if any)) on account of interest of fees accrued prior to or after the Effective Date.
3.General Provisions. This Assignment and Assumption shall be binding upon, and inure to the benefit of, the parties hereto and their respective successors and assigns. This Assignment and Assumption may be executed in any number of counterparts, which together shall constitute one instrument. Delivery of an executed counterpart of a signature page of this Assignment and Assumption by telecopy shall be effective as delivery of a manually executed counterpart of this Assignment and Assumption. This Assignment and Assumption shall be governed by, and construed in accordance with, the law of the State of New York.
EXHIBIT H
to
Credit Agreement
dated as of May 31, 2006
by and among
Bowater Canadian Forest Products Inc.,
as Borrower
Bowater Incorporated,
as Guarantor,
the Lenders party thereto,
as Lenders,
The Bank of Nova Scotia
as Administrative Agent and Issuing Lender
and
Bank of Montreal
as Syndication Agent and Swingline Lender
FORM OF SUBSIDIARY GUARANTY AGREEMENT
SUBSIDIARY GUARANTY AGREEMENT
dated as of May 31, 2006
by and among
Certain Subsidiaries of
BOWATER CANADIAN FOREST PRODUCTS INC.,
as Subsidiary Guarantors,
in favor of
THE BANK OF NOVA SCOTIA,
as Administrative Agent
TABLE OF CONTENTS
Page | ||||||
ARTICLE I DEFINED TERMS | 1 | |||||
SECTION 1.1 | Definitions | 1 | ||||
SECTION 1.2 | Other Definitional Provisions | 2 | ||||
ARTICLE II SUBSIDIARY GUARANTY | 2 | |||||
SECTION 2.1 | Subsidiary Guaranty | 2 | ||||
SECTION 2.2 | Bankruptcy Limitations on Subsidiary Guarantors | 2 | ||||
SECTION 2.3 | Agreements for Contribution | 3 | ||||
SECTION 2.4 | Nature of Subsidiary Guaranty | 5 | ||||
SECTION 2.5 | Waivers | 6 | ||||
SECTION 2.6 | Modification of Loan Documents, etc | 7 | ||||
SECTION 2.7 | Demand by the Administrative Agent | 8 | ||||
SECTION 2.8 | Remedies | 8 | ||||
SECTION 2.9 | Benefits of Subsidiary Guaranty | 8 | ||||
SECTION 2.10 | Termination; Reinstatement | 8 | ||||
SECTION 2.11 | Payments | 9 | ||||
ARTICLE III REPRESENTATIONS AND WARRANTIES | 9 | |||||
ARTICLE IV MISCELLANEOUS | 9 | |||||
SECTION 4.1 | Notices | 9 | ||||
SECTION 4.2 | Amendments, Waivers and Consents | 9 | ||||
SECTION 4.3 | Expenses, Indemnification, Waiver of Consequential Damages, etc. | 10 | ||||
SECTION 4.4 | Right of Set-off | 10 | ||||
SECTION 4.5 | Governing Law; Jurisdiction; Venue; Service of Process | 11 | ||||
SECTION 4.6 | Waiver of Jury Trial | 11 | ||||
SECTION 4.7 | Injunctive Relief; Punitive Damages | 12 | ||||
SECTION 4.8 | No Waiver by Course of Conduct, Cumulative Remedies | 12 | ||||
SECTION 4.9 | Successors and Assigns | 13 | ||||
SECTION 4.10 | Survival of Indemnities | 13 | ||||
SECTION 4.11 | Titles and Captions | 13 | ||||
SECTION 4.12 | Severability of Provisions | 13 | ||||
SECTION 4.13 | Counterparts | 13 | ||||
SECTION 4.14 | Integration | 13 | ||||
SECTION 4.15 | Advice of Counsel, No Strict Construction | 13 | ||||
SECTION 4.16 | Acknowledgements | 14 | ||||
SECTION 4.17 | Releases | 14 | ||||
SECTION 4.18 | Additional Subsidiary Guarantors | 14 | ||||
SECTION 4.19 | All Powers Coupled With Interest | 14 |
EXECUTION COPY
SUBSIDIARY GUARANTY AGREEMENT (as amended, restated, supplemented or otherwise modified from time to time, this “Subsidiary Guaranty”), dated as of , 2006, is made by certain Subsidiaries of BOWATER CANADIAN FOREST PRODUCTS INC., a Canadian corporation (such Subsidiaries, collectively, the “Subsidiary Guarantors”, each, a “Subsidiary Guarantor”), in favor of THE BANK OF NOVA SCOTIA, as Administrative Agent (in such capacity, the “Administrative Agent”) for the ratable benefit of the Secured Parties.
STATEMENT OF PURPOSE
Pursuant to the Credit Agreement dated as of by and among Bowater Canadian Forest Products Inc., (the “Parent Borrower” and, together with any Subsidiary that is designated as a Subsidiary Borrower pursuant toSection 4.14 of the Credit Agreement, the “Borrower”), Bowater Incorporated, as a parent guarantor (together with any other parent guarantor designated as such pursuant tosection 8.10 of the Credit Agreement, the “Parent Guarantor”), the banks and other financial institutions from time to time party thereto (the “Lenders”) and the Administrative Agent (as amended, restated, supplemented or otherwise modified from time to time, the “Credit Agreement”), the Lenders have agreed to make Extensions of Credit to the Borrower upon the terms and subject to the conditions set forth therein.
The Borrower, the Parent Guarantors and the Subsidiary Guarantors, though separate legal entities, comprise one integrated financial enterprise, and all Extensions of Credit to the Borrower will inure, directly or indirectly, to the benefit of each of the Parent Guarantors and the Subsidiary Guarantors.
It is a condition precedent to the obligation of the Lenders to make their respective Extensions of Credit to the Borrower under the Credit Agreement that the Subsidiary Guarantors shall have executed and delivered this Subsidiary Guaranty to the Administrative Agent, for the ratable benefit of itself and the other Secured Parties.
NOW, THEREFORE, for good and valuable consideration, the receipt and sufficiency of which are hereby acknowledged by the parties hereto, and to induce the Administrative Agent and the Lenders to enter into the Credit Agreement and to induce the Lenders to make their respective Extensions of Credit to the Borrower thereunder, each Subsidiary Guarantor hereby agrees with the Administrative Agent, for the ratable benefit of the Secured Parties, as follows:
ARTICLE I
DEFINED TERMS
SECTION 1.1Definitions. The following terms when used in this Subsidiary Guaranty shall have the meanings assigned to them below:
“Applicable Insolvency Laws” means all Applicable Laws governing bankruptcy, reorganization, arrangement, adjustment of debts, relief of debtors, dissolution, insolvency, fraudulent transfers or conveyances or other similar laws (including, without limitation, 11 U.S.C. Sections 544, 547, 548 and 550 and other “avoidance” provisions of Title 11 of the United States Code, as amended or supplemented, the Bankruptcy and Insolvency Act (Canada) as amended or supplemented, the Companies Creditors Arrangement Act (Canada), as amended or supplemented, and the CCQ).
“CCQ” means theCivil Code of Québec as in effect in the Province of Quebec, as amended or modified from time to time.
“Guaranteed Obligations” has the meaning set forth inSection 2.1.
SECTION 1.2Other Definitional Provisions. Capitalized terms used and not otherwise defined in this Subsidiary Guaranty, including the preambles and recitals hereof, shall have the meanings ascribed to them in the Credit Agreement. In the event of a conflict between capitalized terms defined herein and in the Credit Agreement, the Credit Agreement shall control. The words “hereof,” “herein”, “hereto” and “hereunder” and words of similar import when used in this Subsidiary Guaranty shall refer to this Subsidiary Guaranty as a whole and not to any particular provision of this Subsidiary Guaranty, and Section references are to this Subsidiary Guaranty unless otherwise specified. The meanings given to terms defined herein shall be equally applicable to both the singular and plural forms of such terms. Where the context requires, terms relating to the Collateral or any part thereof, when used in relation to a Subsidiary Guarantor, shall refer to such Subsidiary Guarantor’s Collateral or the relevant part thereof.
ARTICLE II
SUBSIDIARY GUARANTY
SECTION 2.1Subsidiary Guaranty. Each Subsidiary Guarantor hereby, jointly and severally with the other Subsidiary Guarantors, unconditionally guarantees to the Administrative Agent for the ratable benefit of the Secured Parties, and their respective permitted successors, endorsees, transferees and assigns, the prompt payment and performance of all Obligations of the Borrower, whether primary or secondary (whether by way of endorsement or otherwise), whether now existing or hereafter arising, whether or not from time to time reduced or extinguished (except by payment thereof) or hereafter increased or incurred, whether enforceable or unenforceable as against the Borrower, whether or not discharged, stayed or otherwise affected by any Applicable Insolvency Law or proceeding thereunder, whether created directly with the Administrative Agent or any other Secured Party or acquired by the Administrative Agent or any other Secured Party through assignment or endorsement or otherwise, whether matured or unmatured, whether joint or several, as and when the same become due and payable (whether at maturity or earlier, by reason of acceleration, mandatory repayment or otherwise), in accordance with the terms of any such instruments evidencing any such obligations, including all renewals, extensions or modifications thereof (all Obligations of the Borrower, including all of the foregoing being hereafter collectively referred to as the “Guaranteed Obligations”).
SECTION 2.2Bankruptcy Limitations on Subsidiary Guarantors. Notwithstanding anything to the contrary contained inSection 2.1, it is the intention of each Subsidiary Guarantor and the Secured Parties that, in any proceeding involving the bankruptcy, reorganization, arrangement, adjustment of debts, relief of debtors, dissolution or insolvency or any similar proceeding with respect to any Subsidiary Guarantor or its assets, the amount of such Subsidiary Guarantor’s obligations with respect to the Guaranteed Obligations shall be equal to, but not in excess of, the maximum amount thereof not subject to avoidance or recovery by operation of Applicable Insolvency Laws after giving effect toSection 2.3(a). To that end, but only in the event and to the extent that after giving effect toSection 2.3(a) such Subsidiary Guarantor’s obligations with respect to the Guaranteed Obligations or any payment made pursuant to such Guaranteed Obligations would, but for the operation of the first sentence of thisSection 2.2, be
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subject to avoidance or recovery in any such proceeding under Applicable Insolvency Laws after giving effect toSection 2.3(a), the amount of such Subsidiary Guarantor’s obligations with respect to the Guaranteed Obligations shall be limited to the largest amount which, after giving effect thereto, would not, under Applicable Insolvency Laws, render such Subsidiary Guarantor’s obligations with respect to the Guaranteed Obligations unenforceable or avoidable or otherwise subject to recovery under Applicable Insolvency Laws. To the extent any payment actually made pursuant to the Guaranteed Obligations exceeds the limitation of the first sentence of thisSection 2.2and is otherwise subject to avoidance and recovery in any such proceeding under Applicable Insolvency Laws, the amount subject to avoidance shall in all events be limited to the amount by which such actual payment exceeds such limitation and the Guaranteed Obligations as limited by the first sentence of thisSection 2.2 shall in all events remain in full force and effect and be fully enforceable against such Subsidiary Guarantor. The first sentence of thisSection 2.2 is intended solely to preserve the rights of the Administrative Agent hereunder against such Subsidiary Guarantor in such proceeding to the maximum extent permitted by Applicable Insolvency Laws and neither such Subsidiary Guarantor, the Borrower, any other Subsidiary Guarantor nor any other Person shall have any right or claim under such sentence that would not otherwise be available under Applicable Insolvency Laws in such proceeding.
SECTION 2.3Agreements for Contribution.
(a) The Subsidiary Guarantors hereby agree among themselves that, if any Subsidiary Guarantor shall make an Excess Payment (as defined below), such Subsidiary Guarantor shall have a right of contribution from each other Subsidiary Guarantor in an amount equal to such other Subsidiary Guarantor’s Contribution Share (as defined below) of such Excess Payment. The payment obligations of any Subsidiary Guarantor under thisSection 2.3(a) shall be subordinate and subject in right of payment to the Guaranteed Obligations until such time as the Guaranteed Obligations have been paid in full, and none of the Subsidiary Guarantors shall exercise any right or remedy under thisSection 2.3(a) against any other Subsidiary Guarantor until such Guaranteed Obligations have been paid in full. For purposes of thisSection 2.3(a):
(i) “Excess Payment” shall mean the amount paid by any Subsidiary Guarantor in excess of its Ratable Share (as defined below) of any Guaranteed Obligations;
(ii) “Ratable Share” shall mean, for any Subsidiary Guarantor in respect of any payment of Guaranteed Obligations, the ratio (expressed as a percentage) as of the date of such payment of Guaranteed Obligations of (A) the amount by which the aggregate present fair salable value of all of its assets and properties exceeds the amount of all debts and liabilities of such Subsidiary Guarantor (including probable contingent, subordinated, unmatured, and unliquidated liabilities, but excluding the obligations of such Subsidiary Guarantor hereunder) to (B) the amount by which the aggregate present fair salable value of all assets and other properties of all of the Subsidiary Guarantors exceeds the amount of all of the debts and liabilities (including probable contingent, subordinated, unmatured, and unliquidated liabilities, but excluding the obligations of the Subsidiary Guarantors hereunder) of the Subsidiary Guarantors; provided, however, that, for purposes of calculating the Ratable Shares of the Subsidiary Guarantors in respect of any payment of Guaranteed Obligations, any Subsidiary Guarantor that became a
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Subsidiary Guarantor subsequent to the date of any such payment shall be deemed to have been a Subsidiary Guarantor on the date of such payment and the financial information for such Subsidiary Guarantor as of the date such Subsidiary Guarantor became a Subsidiary Guarantor shall be utilized for such Subsidiary Guarantor in connection with such payment; and
(iii) “Contribution Share” shall mean, for any Subsidiary Guarantor in respect of any Excess Payment made by any other Subsidiary Guarantor, the ratio (expressed as a percentage) as of the date of such Excess Payment of (A) the amount by which the aggregate present fair salable value of all of its assets and properties exceeds the amount of all debts and liabilities of such Subsidiary Guarantor (including probable contingent, subordinated, unmatured, and unliquidated liabilities, but excluding the obligations of such Subsidiary Guarantor hereunder) to (B) the amount by which the aggregate present fair salable value of all assets and other properties of the Subsidiary Guarantors other than the maker of such Excess Payment exceeds the amount of all of the debts and liabilities (including probable contingent, subordinated, unmatured, and unliquidated liabilities, but excluding the obligations of the Subsidiary Guarantors) of the Subsidiary Guarantors other than the maker of such Excess Payment;provided,however, that, for purposes of calculating the Contribution Shares of the Subsidiary Guarantors in respect of any Excess Payment, any Subsidiary Guarantor that became a Subsidiary Guarantor subsequent to the date of any such Excess Payment shall be deemed to have been a Subsidiary Guarantor on the date of such Excess Payment and the financial information for such Subsidiary Guarantor as of the date such Subsidiary Guarantor became a Subsidiary Guarantor shall be utilized for such Subsidiary Guarantor in connection with such Excess Payment.
Each of the Subsidiary Guarantors recognizes and acknowledges that the rights to contribution arising hereunder shall constitute an asset in favor of the party entitled to such contribution. ThisSection 2.3 shall not be deemed to affect any right of subrogation, indemnity, reimbursement or contribution that any Subsidiary Guarantor may have under Applicable Law against the Borrower in respect of any payment of Guaranteed Obligations.
(b)No Subrogation. Notwithstanding any payment or payments by any of the Subsidiary Guarantors hereunder, or any set-off or application of funds of any of the Subsidiary Guarantors by the Administrative Agent or any other Secured Party, or the receipt of any amounts by the Administrative Agent or any other Secured Party with respect to any of the Guaranteed Obligations, none of the Subsidiary Guarantors shall be entitled to be subrogated to any of the rights of the Administrative Agent or any other Secured Party against the Borrower, the other Subsidiary Guarantors or any other guarantor or against any collateral security held by the Administrative Agent or any other Secured Party for the payment of the Guaranteed Obligations nor shall any of the Subsidiary Guarantors seek any reimbursement from the Borrower, any of the other Subsidiary Guarantors or any of the other guarantors in respect of payments made by such Subsidiary Guarantor in connection with the Guaranteed Obligations, until all amounts owing to the Administrative Agent and the other Secured Parties on account of the Guaranteed Obligations are paid in full and the Commitments are terminated. If any amount shall be paid to any Subsidiary Guarantor on account of such subrogation rights at any time when all of the Guaranteed Obligations shall not have been paid in full, such amount shall be held by
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such Subsidiary Guarantor in trust for the Administrative Agent, segregated from other funds of such Subsidiary Guarantor, and shall, forthwith upon receipt by such Subsidiary Guarantor, be turned over to the Administrative Agent in the exact form received by such Subsidiary Guarantor (duly endorsed by such Subsidiary Guarantor to the Administrative Agent, if required) to be applied against the Guaranteed Obligations, whether matured or unmatured, in such order as set forth in the Credit Agreement.
SECTION 2.4Nature of Subsidiary Guaranty.
(a) Each Subsidiary Guarantor agrees that this Subsidiary Guaranty is a continuing, unconditional guaranty of payment and performance and not of collection, and that its obligations under this Subsidiary Guaranty shall be primary, absolute and unconditional, irrespective of, and unaffected by:
(i) the genuineness, validity, regularity, enforceability or any future amendment of, or change in, the Credit Agreement or any other Loan Document or any other agreement, document or instrument to which the U.S. Borrower, the Borrower or any Subsidiary Guarantor or any of their respective Subsidiaries or Affiliates is or may become a party;
(ii) the absence of any action to enforce this Subsidiary Guaranty, the Credit Agreement, any other Loan Document or Hedging Agreement, or the waiver or consent by the Administrative Agent or any other Secured Party with respect to any of the provisions of this Subsidiary Guaranty, the Credit Agreement, any other Loan Document or Hedging Agreement;
(iii) the existence, value or condition of, or failure to perfect its Lien against, any security for or other guaranty of the Guaranteed Obligations or any action, or the absence of any action, by the Administrative Agent or any other Secured Party in respect of such security or guaranty (including, without limitation, the release of any such security or guaranty);
(iv) any structural change in, restructuring of or other similar change of the U.S. Borrower, the Borrower, any Subsidiary Guarantor or any of their respective Subsidiaries; or
(v) any other action or circumstances which might otherwise constitute a legal or equitable discharge or defense of a surety or guarantor;
it being agreed by each Subsidiary Guarantor that, subject to the first sentence ofSection 2.2, its obligations under this Subsidiary Guaranty shall not be discharged except as under the terms ofSection 2.10 andSection 4.17 of this Subsidiary Guaranty.
(b) Each Subsidiary Guarantor represents, warrants and agrees that the Guaranteed Obligations and its obligations under this Subsidiary Guaranty are not and shall not be subject to any counterclaims, offsets or defenses of any kind (other than the defense of payment) against the Administrative Agent, the Secured Parties or the Borrower whether now existing or which may arise in the future.
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(c) Each Subsidiary Guarantor hereby agrees and acknowledges that the Guaranteed Obligations, and any of them, shall conclusively be deemed to have been created, contracted or incurred, or renewed, extended, amended or waived, in reliance upon this Subsidiary Guaranty, and all dealings between the Borrower and any of the Subsidiary Guarantors, on the one hand, and the Administrative Agent and any other Secured Party, on the other hand, likewise shall be conclusively presumed to have been had or consummated in reliance upon this Subsidiary Guaranty.
SECTION 2.5Waivers. To the extent permitted by Applicable Law, each Subsidiary Guarantor expressly waives the benefit of all provisions of Applicable Law which are or might be in conflict with this Subsidiary Guaranty and all of the following rights and defenses (and agrees not to take advantage of or assert any such right or defense):
(a) any rights it may now or in the future have under any statute, or at law or in equity, or otherwise, to compel the Administrative Agent or any other Secured Party to proceed in respect of the Guaranteed Obligations against the Borrower or any other Person or against any security for or other guaranty of the payment and performance of the Guaranteed Obligations before proceeding against, or as a condition to proceeding against, such Subsidiary Guarantor;
(b) any defense based upon the failure of the Administrative Agent or any other Secured Party to commence an action in respect of the Guaranteed Obligations against the Borrower, such Subsidiary Guarantor, any other guarantor or any other Person or any security for the payment and performance of the Guaranteed Obligations;
(c) any right to insist upon, plead or in any manner whatever claim or take the benefit or advantage of, any appraisal, valuation, stay, extension, marshalling of assets or redemption laws, or exemption, whether now or at any time hereafter in force, which may delay, prevent or otherwise affect the performance by such Subsidiary Guarantor of its obligations under, or the enforcement by the Administrative Agent or the other Secured Parties of this Subsidiary Guaranty;
(d) any right of diligence, presentment, demand, protest and notice (except as specifically required herein) of whatever kind or nature with respect to any of the Guaranteed Obligations and waives, to the fullest extent permitted by Applicable Laws, the benefit of all provisions of Applicable Law which are or might be in conflict with the terms of this Subsidiary Guaranty; and
(e) any and all right to notice of the creation, renewal, extension or accrual of any of the Guaranteed Obligations and notice of or proof of reliance by the Administrative Agent or any other Secured Party upon, or acceptance of, this Subsidiary Guaranty.
Each Subsidiary Guarantor agrees that any notice or directive given at any time to the Administrative Agent or any other Secured Party which is inconsistent with any of the foregoing waivers shall be null and void and may be ignored by the Administrative Agent or such other Secured Party, and, in addition, may not be pleaded or introduced as evidence in any litigation relating to this Subsidiary Guaranty for the reason that such pleading or introduction would be at variance with the written terms of this Subsidiary Guaranty, unless the Administrative Agent and
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the Required Agreement Lenders have specifically agreed otherwise in writing. The foregoing waivers are of the essence of the transaction contemplated by the Credit Agreement, the other Loan Documents and the Hedging Agreements and, but for this Subsidiary Guaranty and such waivers, the Administrative Agent and other Secured Parties would decline to enter into the Credit Agreement, the other Loan Documents and the Hedging Agreements.
SECTION 2.6Modification of Loan Documents, etc. Neither the Administrative Agent nor any other Secured Party shall incur any liability to any Subsidiary Guarantor as a result of any of the following, and none of the following shall impair or release this Subsidiary Guaranty or any of the obligations of any Subsidiary Guarantor under this Subsidiary Guaranty:
(a) any change or extension of the manner, place or terms of payment of, or renewal or alteration of all or any portion of, the Guaranteed Obligations;
(b) any action under or in respect of the Credit Agreement or the other Loan Documents or Hedging Agreements in the exercise of any remedy, power or privilege contained therein or available to any of them at law, in equity or otherwise, or waiver or refraining from exercising any such remedies, powers or privileges;
(c) any amendment to, or modification of, m any manner whatsoever, the Loan Documents or Hedging Agreements;
(d) any extension or waiver of the time for performance by any Subsidiary Guarantor, any other guarantor, the Borrower or any other Person of, or compliance with, any term, covenant or agreement on its part to be performed or observed under a Loan Document or Hedging Agreement, or waiver of such performance or compliance or consent to a failure of, or departure from, such performance or compliance;
(e) the taking and holding of security or collateral for the payment of the Guaranteed Obligations or the sale, exchange, release, disposal of, or other dealing with, any property pledged, mortgaged or conveyed, or in which the Administrative Agent or the other Secured Parties have been granted a Lien, to secure any Indebtedness of any Subsidiary Guarantor, any other guarantor or the Borrower to the Administrative Agent or the other Secured Parties;
(f) the release of anyone who may be liable in any manner for the payment of any amounts owed by any Subsidiary Guarantor, any other guarantor or the Borrower to the Administrative Agent or any other Secured Party;
(g) any modification or termination of the terms of any intercreditor or subordination agreement pursuant to which claims of other creditors of any Subsidiary Guarantor, any other guarantor or the Borrower are subordinated to the claims of the Administrative Agent or any other Secured Party; or
(h) any application of any sums by whomever paid or however realized to any Guaranteed Obligations owing by any Subsidiary Guarantor, any other guarantor or the Borrower to the Administrative Agent or any other Secured Party in such manner as the Administrative Agent or any other Secured Party shall determine in its reasonable discretion.
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SECTION 2.7Demand by the Administrative Agent. In addition to the terms set forth in this Article II and in no manner imposing any limitation on such terms, if all or any portion of the then outstanding Guaranteed Obligations are declared to be immediately due and payable, then the Subsidiary Guarantors shall, upon demand in writing therefor by the Administrative Agent to the Subsidiary Guarantors, pay all or such portion of the outstanding Guaranteed Obligations due hereunder then declared due and payable.
SECTION 2.8Remedies. Upon the occurrence and during the continuance of any Event of Default, with the consent of the Required Agreement Lenders, the Administrative Agent may, or upon the request of the Required Agreement Lenders, the Administrative Agent shall, enforce against the Subsidiary Guarantors their obligations and liabilities hereunder and exercise such other rights and remedies as may be available to the Administrative Agent hereunder, under the Credit Agreement or the other Loan Documents or otherwise.
SECTION 2.9Benefits of Subsidiary Guaranty. The provisions of this Subsidiary Guaranty are for the benefit of the Administrative Agent and the other Secured Parties and their respective permitted successors, transferees, endorsees and assigns, and nothing herein contained shall impair, as between the Borrower, the Administrative Agent and the other Secured Parties, the obligations of the Borrower under the Loan Documents or Hedging Agreements. In the event all or any part of the Guaranteed Obligations are transferred, endorsed or assigned by the Administrative Agent or any other Secured Party to any Person or Persons as permitted under the Credit Agreement, any reference to an “Administrative Agent”, “Lender” or “Secured Party” herein shall be deemed to refer equally to such Person or Persons.
SECTION 2.10Termination; Reinstatement.
(a) Subject to clause (c) below, this Subsidiary Guaranty shall remain in full force and effect until all the Guaranteed Obligations and all the obligations of the Subsidiary Guarantors under this Subsidiary Guaranty shall have been paid in full and the Commitments terminated.
(b) No payment made by the Borrower, any Subsidiary Guarantor, or any other Person received or collected by the Administrative Agent or any other Secured Party from the Borrower, any Subsidiary Guarantor, or any other Person by virtue of any action or proceeding or any set-off or appropriation or application at any time or from time to time in reduction of or in payment of the Guaranteed Obligations shall be deemed to modify, reduce, release or otherwise affect the liability of any Subsidiary Guarantor hereunder which shall, notwithstanding any such payment (other than any payment made by such Subsidiary Guarantor in respect of the obligations of the Subsidiary Guarantors or any payment received or collected from such Subsidiary Guarantor in respect of the obligations of the Subsidiary Guarantors), remain liable for the obligations of the Subsidiary Guarantors up to the maximum liability of such Subsidiary Guarantor hereunder until the Guaranteed Obligations and all the obligations of the Subsidiary Guarantors shall have been paid in full and the Commitments terminated.
(c) Each Subsidiary Guarantor agrees that, if any payment made by the Borrower or any other Person applied to the Guaranteed Obligations is at any time annulled, set aside, rescinded, invalidated, declared to be fraudulent or preferential or otherwise required to be
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refunded or repaid, or is repaid in whole or in part pursuant to a good faith settlement of a pending or threatened claim, or the proceeds of any Collateral are required to be refunded by the Administrative Agent or any other Secured Party to the Borrower, its estate, trustee, receiver or any other Person, including, without limitation, any Subsidiary Guarantor, under any Applicable Law or equitable cause, then, to the extent of such payment or repayment, each Subsidiary Guarantor’s liability hereunder (and any Lien or Collateral securing such liability) shall be and remain in full force and effect, as fully as if such payment had never been made, and, if prior thereto, this Subsidiary Guaranty shall have been canceled or surrendered (and if any Lien or Collateral securing such Subsidiary Guarantor’s liability hereunder shall have been released or terminated by virtue of such cancellation or surrender), this Subsidiary Guaranty (and such Lien or Collateral) shall be reinstated in full force and effect, and such prior cancellation or surrender shall not diminish, release, discharge, impair or otherwise affect the obligations of such Subsidiary Guarantor in respect of the amount of such payment (or any Lien or Collateral securing such obligation).
SECTION 2.11Payments. Payments by the Subsidiary Guarantors shall be made to the Administrative Agent, to be credited and applied to the Guaranteed Obligations in accordance withSection 11.4 of the Credit Agreement, in immediately available Dollars to an account designated by the Administrative Agent or at the Administrative Agent’s Office or at any other address that may be specified in writing from time to time by the Administrative Agent.
ARTICLE III
REPRESENTATIONS AND WARRANTIES
To induce the Administrative Agent and the Lenders to enter into the Loan Documents and to make any Extensions of Credit, each Subsidiary Guarantor hereby represents and warrants that each representation and warranty contained in Article VI of the Credit Agreement relating to such Subsidiary Guarantor is true and correct as if made by such Subsidiary Guarantor herein.
ARTICLE IV
MISCELLANEOUS
SECTION 4.1Notices. All notices and communications hereunder shall be given to the addresses and otherwise made in accordance with Section 14.1 of the Credit Agreement; provided that notices and communications to the Subsidiary Guarantors shall be directed to the Subsidiary Guarantors at the address of the Borrower set forth in Section 14.1 of the Credit Agreement.
SECTION 4.2Amendments, Waivers and Consents. None of the terms or provisions of this Subsidiary Guaranty may be amended, supplemented or otherwise modified, nor may they be waived, nor may any consent be given, except in accordance withSection 14.2 of the Credit Agreement.
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SECTION 4.3Expenses, Indemnification, Waiver of Consequential Damages, etc.
(a) The Subsidiary Guarantors, jointly and severally, shall pay all out-of-pocket expenses incurred by the Administrative Agent and each other Secured Party to the extent the Borrower would be required to do so pursuant toSection 14.3 of the Credit Agreement.
(b) The Subsidiary Guarantors, jointly and severally, shall pay and shall indemnify the Secured Parties against Indemnified Taxes and Other Taxes to the extent the Borrower would be required to do so pursuant toSection 4.11 of the Credit Agreement.
(c) The Subsidiary Guarantors, jointly and severally, shall indemnify each Indemnitee to the extent the Borrower would be required to do so pursuant toSection 14.3 of the Credit Agreement.
(d) Notwithstanding anything to the contrary contained in this Subsidiary Guaranty, to the fullest extent permitted by Applicable Law, each Subsidiary Guarantor shall not assert, and hereby waives, any claim against any Indemnitee, on any theory of liability, for special, indirect, consequential or punitive damages (as opposed to direct or actual damages) arising out of, in connection with, or as a result of, this Subsidiary Guaranty, any other Loan Document, any Hedging Agreement or any agreement or instrument contemplated hereby, the transactions contemplated hereby or thereby, any Extension of Credit or the use of the proceeds thereof.
(e) No Indemnitee referred to in thisSection 4.3 shall be liable for any damages arising from the use by unintended recipients of any information or other materials distributed by it through telecommunications, electronic or other information transmission systems in connection with this Subsidiary Guaranty, the other Loan Documents or any Hedging Agreements or the transactions contemplated hereby or thereby.
(e) All amounts due under thisSection 4.3 shall be payable promptly after demand therefor.
SECTION 4.4Right of Set-off. If an Event of Default shall have occurred and be continuing, each Secured Party and each of its respective Affiliates is hereby authorized at any time and from time to time, to the fullest extent permitted by Applicable Law, to set off and apply any and all deposits (general or special, time or demand, provisional or final, in whatever currency) at any time held and other obligations (in whatever currency) at any time owing by such Secured Party or any such Affiliate to or for the credit or the account of such Subsidiary Guarantor against any and all of the obligations of such Subsidiary Guarantor now or hereafter existing under this Subsidiary Guaranty or any other Loan Document to such Secured Party, irrespective of whether or not such Secured Party shall have made any demand under this Subsidiary Guaranty or any other Loan Document and although such obligations of such Subsidiary Guarantor may be contingent or unmatured or are owed to a branch or office of such Secured Party different from the branch or office holding such deposit or obligated on such Indebtedness. The rights of each Secured Party and its respective Affiliates under this Section are in addition to other rights and remedies (including other rights of setoff) that such Secured Party or its respective Affiliates may have. Each Secured Party agrees to notify such Subsidiary Guarantor and the Administrative Agent promptly after any such setoff and application;providedthat the failure to give such notice shall not affect the validity of such setoff and application.
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SECTION 4.5Governing Law; Jurisdiction; Venue; Service of Process.
(a)Governing Law. This Subsidiary Guaranty shall be governed by, and construed in accordance with, the law of the State of New York without reference to the conflicts of law principles thereof.
(b)Submission to Jurisdiction. Each Subsidiary Guarantor irrevocably and unconditionally submits, for itself and its property, to the nonexclusive jurisdiction of the courts of the State of New York sitting in New York County and of the United States District Court of the Southern District of New York, and (iii) the Province of Ontario and in each case any appellate court from any thereof, in any action or proceeding arising out of or relating to this Subsidiary Guaranty or any other Loan Document, or for recognition or enforcement of any judgment, and each of the parties hereto irrevocably and unconditionally agrees that all claims in respect of any such action or proceeding may be heard and determined in such New York State or Ontario court or, to the fullest extent permitted by Applicable Law, in such Federal court. Each of the parties hereto agrees that a final judgment in any such action or proceeding shall be conclusive and may be enforced in other jurisdictions by suit on the judgment or in any other manner provided by Applicable Law. Nothing in this Subsidiary Guaranty or in any other Loan Document shall affect any right that the Administrative Agent or any other Secured Party may otherwise have to bring any action or proceeding relating to this Subsidiary Guaranty or any other Loan Document against any Subsidiary Guarantor or its properties in the courts of any jurisdiction.
(c)Waiver of Venue. Each Subsidiary Guarantor irrevocably and unconditionally waives, to the fullest extent permitted by Applicable Law, any objection that it may now or hereafter have to the laying of venue of any action or proceeding arising out of or relating to this Subsidiary Guaranty or any other Loan Document in any court referred to in paragraph (b) of this Section. Each of the parties hereto hereby irrevocably waives, to the fullest extent permitted by Applicable Law, the defense of an inconvenient forum to the maintenance of such action or proceeding in any such court.
(d)Service of Process. Each party hereto irrevocably consents to service of process in the manner provided for notices inSection 14.1 of the Credit Agreement. Nothing in this Subsidiary Guaranty will affect the right of any party hereto to serve process in any other manner permitted by Applicable Law.
(e)Appointment of the Borrower as Agent for the Subsidiary Guarantors. Each Subsidiary Guarantor hereby irrevocably appoints and authorizes the Borrower to act as its agent for service of process and notices required to be delivered under this Subsidiary Guaranty or under the other Loan Documents, it being understood and agreed that receipt by the Borrower of any summons, notice or other similar item shall be deemed effective receipt by each Subsidiary Guarantor and its Subsidiaries.
SECTION 4.6Waiver of Jury Trial. EACH PARTY HERETO HEREBY IRREVOCABLY WAIVES, TO THE FULLEST EXTENT PERMITTED BY APPLICABLE
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LAW, ANY RIGHT IT MAY HAVE TO A TRIAL BY JURY IN ANY LEGAL PROCEEDING DIRECTLY OR INDIRECTLY ARISING OUT OF OR RELATING TO THIS SUBSIDIARY GUARANTY OR ANY OTHER LOAN DOCUMENT OR THE TRANSACTIONS CONTEMPLATED HEREBY OR THEREBY (WHETHER BASED ON CONTRACT, TORT OR ANY OTHER THEORY). EACH PARTY HERETO (A) CERTIFIES THAT NO REPRESENTATIVE, AGENT OR ATTORNEY OF ANY OTHER PERSON HAS REPRESENTED, EXPRESSLY OR OTHERWISE, THAT SUCH OTHER PERSON WOULD NOT, IN THE EVENT OF LITIGATION, SEEK TO ENFORCE THE FOREGOING WAIVER AND (B) ACKNOWLEDGES THAT IT AND THE OTHER PARTIES HERETO HAVE BEEN INDUCED TO ENTER INTO THIS SUBSIDIARY GUARANTY AND THE OTHER LOAN DOCUMENTS BY, AMONG OTHER THINGS, THE MUTUAL WAIVERS AND CERTIFICATIONS IN THIS SECTION.
SECTION 4.7Injunctive Relief; Punitive Damages.
(a) Each Subsidiary Guarantor recognizes that, in the event such Subsidiary Guarantor fails to perform, observe or discharge any of its obligations or liabilities under this Subsidiary Guaranty or any other Loan Document, any remedy of law may prove to be inadequate relief to the Administrative Agent and the other Secured Parties. Therefore, each Subsidiary Guarantor agrees that the Administrative Agent and the other Secured Parties, at the option of the Administrative Agent and the other Secured Parties, shall be entitled to temporary and permanent injunctive relief in any such case without the necessity of proving actual damages.
(b) The Administrative Agent, the other Secured Parties and each Subsidiary Guarantor hereby agree that no such Person shall have a remedy of punitive or exemplary damages against any other party to a Loan Document and each such Person hereby waives any right or claim to punitive or exemplary damages that they may now have or may arise in the future in connection with any Dispute, whether such Dispute is resolved through arbitration or judicially.
SECTION 4.8No Waiver by Course of Conduct, Cumulative Remedies. Neither the Administrative Agent nor any other Secured Party shall by any act, delay, indulgence, omission or otherwise (except by a written instrument pursuant to Section 4.2) be deemed to have waived any right or remedy hereunder or to have acquiesced in any Default or Event of Default. No delay or failure to take action on the part of the Administrative Agent or any other Secured Party in exercising any right, power or privilege hereunder shall operate as a waiver thereof, nor shall any single or partial exercise of any such right, power or privilege hereunder preclude any other or further exercise thereof or the exercise of any other right, power or privilege. A waiver by the Administrative Agent or any other Secured Party of any right or remedy hereunder on anyone occasion shall not be construed as a bar to any right or remedy which the Administrative Agent or such other Secured Party would otherwise have on any future occasion. The enumeration of the rights and remedies of the Administrative Agent and the other Secured Parties set forth in this Subsidiary Guaranty is not intended to be exhaustive and the exercise by the Administrative Agent and the other Secured Parties of any right or remedy shall not preclude the exercise of any other rights or remedies, all of which shall be cumulative, and shall be in addition to any other right or remedy given hereunder or under the other Loan Documents or that may now or hereafter exist at law or in equity or by suit or otherwise.
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SECTION 4.9Successors and Assigns. The provisions of this Subsidiary Guaranty shall be binding upon and inure to the benefit of the parties hereto and their respective successors and assigns; except that no Subsidiary Guarantor may assign or otherwise transfer any of its rights or obligations under this Subsidiary Guaranty without the prior written consent of the Administrative Agent and the Lenders (in accordance with the Credit Agreement).
SECTION 4.10Survival of Indemnities. Notwithstanding any termination of this Subsidiary Guaranty, the indemnities to which the Administrative Agent and the other Secured Parties are entitled under the provisions ofSection 4.3 and any other provision of this Subsidiary Guaranty and the other Loan Documents shall continue in full force and effect and shall protect the Administrative Agent and the other Secured Parties against events arising after such termination as well as before.
SECTION 4.11Titles and Captions. Titles and captions of Articles, Sections and subsections in, and the table of contents of, this Subsidiary Guaranty are for convenience only, and neither limit nor amplify the provisions of this Subsidiary Guaranty.
SECTION 4.12Severability of Provisions. Any provision of this Subsidiary Guaranty or any other Loan Document which is prohibited or unenforceable in any jurisdiction shall, as to such jurisdiction, be ineffective only to the extent of such prohibition or unenforceability without invalidating the remainder of such provision or the remaining provisions hereof or thereof or affecting the validity or enforceability of such provision in any other jurisdiction.
SECTION 4.13Counterparts. This Subsidiary Guaranty may be executed in any number of counterparts and by different parties hereto in separate counterparts, each of which when so executed shall be deemed to be an original and shall be binding upon all parties, their successors and assigns, and all of which taken together shall constitute one and the same agreement. Delivery of an executed counterpart of a signature page to this Subsidiary Guaranty or any document or instrument delivered in connection herewith by facsimile or other electronic transmission shall be effective as delivery of a manually executed counterpart of this Subsidiary Guaranty or such other document or instrument, as applicable.
SECTION 4.14Integration. This Subsidiary Guaranty, together with the other Loan Documents, comprises the complete and integrated agreement of the parties on the subject matter hereof and thereof and supersedes all prior agreements, written or oral, on such subject matter. In the event of any conflict between the provisions of this Subsidiary Guaranty and those of any other Loan Document, the provisions of the Credit Agreement shall control;provided that the inclusion of supplemental rights or remedies in favor of the Administrative Agent or the other Secured Parties in any other Loan Document shall not be deemed a conflict with this Subsidiary Guaranty.
SECTION 4.15Advice of Counsel, No Strict Construction. Each of the parties represents to each other party hereto that it has discussed this Subsidiary Guaranty with its counsel. The parties hereto have participated jointly in the negotiation and drafting of this
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Subsidiary Guaranty. In the event an ambiguity or question of intent or interpretation arises, this Subsidiary Guaranty shall be construed as if drafted jointly by the parties hereto and no presumption or burden of proof shall arise favoring or disfavoring any party by virtue of the authorship of any provisions of this Subsidiary Guaranty.
SECTION 4.16Acknowledgements. Each Subsidiary Guarantor hereby acknowledges that:
(a) it has been advised by counsel in the negotiation, execution and delivery of this Subsidiary Guaranty and the other Loan Documents to which it is a party;
(b) it has received a copy of the Credit Agreement and has reviewed and understands same;
(c) neither the Administrative Agent nor any other Secured Party has any fiduciary relationship with or duty to any Subsidiary Guarantor arising out of or in connection with this Subsidiary Guaranty or any of the other Loan Documents, and the relationship between the Subsidiary Guarantors, on the one hand, and the Administrative Agent and the other Secured Parties, on the other hand, in connection herewith or therewith is solely that of debtor and creditor; and
(d) no joint venture is created hereby or by the other Loan Documents or otherwise exists by virtue of the transactions contemplated hereby among the Secured Parties or among the Subsidiary Guarantors and the Secured Parties.
SECTION 4.17Releases. At such time as the Guaranteed Obligations shall have been paid in full and the Commitments have been terminated, this Subsidiary Guaranty and all obligations (other than those expressly stated to survive such termination) of the Administrative Agent and each Subsidiary Guarantor hereunder shall terminate, all without delivery of any instrument or performance of any act by any party.
SECTION 4.18Additional Subsidiary Guarantors. Each Subsidiary of the Borrower that is required to become a party to this Subsidiary Guaranty pursuant toSection 8.10 of the Credit Agreement shall become a Subsidiary Guarantor for all purposes of this Subsidiary Guaranty upon execution and delivery by such Subsidiary of a supplement in form and substance reasonably satisfactory to the Administrative Agent.
SECTION 4.19All Powers Coupled With Interest. All powers of attorney and other authorizations granted to the Secured Parties, the Administrative Agent and any Persons designated by the Administrative Agent or any other Secured Party pursuant to any provisions of this Subsidiary Guaranty or any of the other Loan Documents shall be deemed coupled with an interest and shall be irrevocable so long as any of the Guaranteed Obligations remain unpaid or unsatisfied, any of the Commitments remain in effect or the Credit Facility has not been terminated.
[Signature Pages Follow]
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IN WITNESS WHEREOF, each of the Subsidiary Guarantors has executed and delivered this Subsidiary Guaranty under seal by its duly authorized officers, all as of the day and year first above written.
as Subsidiary Guarantor | ||||||
By: |
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Name: |
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Title: |
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[Signature Pages Continue]
THE BANK OF NOVA SCOTIA, as Administrative Agent | ||
By: |
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Name: |
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Title: |
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EXHIBIT I
to
Credit Agreement
dated as of May 31, 2006
by and among
Bowater Canadian Forest Products Inc.,
as Borrower
Bowater Incorporated,
as Guarantor,
the Lenders party thereto,
as Lenders,
The Bank of Nova Scotia
as Administrative Agent and Issuing Lender
and
Bank of Montreal
as Syndication Agent and Swingline Lender
COLLATERAL AGREEMENT
COLLATERAL AGREEMENT
dated as of 2006
by and among
BOWATER INCORPORATED,
and certain of its Subsidiaries,
as Grantors,
and acknowledged by
certain of its Subsidiaries,
as Issuers,
in favor of
WACHOVIA BANK, NATIONAL ASSOCIATION,
as Administrative Agent
Table of Contents
Page | ||||||
ARTICLE I DEFINED TERMS | 1 | |||||
SECTION 1.1 | Terms Defined in the Uniform Commercial Code | 1 | ||||
SECTION 1.2 | Definitions | 2 | ||||
SECTION 1.3 | Other Definitional Provisions | 4 | ||||
ARTICLE II SECURITY INTEREST | 5 | |||||
SECTION 2.1 | Grant of Security Interest | 5 | ||||
SECTION 2.2 | Grantors Remain Liable | 6 | ||||
ARTICLE III REPRESENTATIONS AND WARRANTIES | 7 | |||||
SECTION 3.1 | Existence | 7 | ||||
SECTION 3.2 | Authorization of Agreement; No Conflict | 7 | ||||
SECTION 3.3 | Consents | 7 | ||||
SECTION 3.4 | Perfected First Priority Liens | 7 | ||||
SECTION 3.5 | Title, No Other Liens | 8 | ||||
SECTION 3.6 | State of Organization; Location of Inventory; other Information | 8 | ||||
SECTION 3.7 | Accounts | 9 | ||||
SECTION 3.8 | Chattel Paper | 9 | ||||
SECTION 3.9 | Deposit Accounts | 9 | ||||
SECTION 3.10 | Inventory | 9 | ||||
SECTION 3.11 | Investment Property; Partnership/LLC Interests | 9 | ||||
SECTION 3.12 | Instruments | 10 | ||||
SECTION 3.13 | Government Contracts | 10 | ||||
ARTICLE IV COVENANTS | 10 | |||||
SECTION 4.1 | Maintenance of Perfected Security Interest; Further Information | 10 | ||||
SECTION 4.2 | Maintenance of Insurance | 11 | ||||
SECTION 4.3 | Changes in Locations; Changes in Name or Structure | 11 | ||||
SECTION 4.4 | Required Notifications | 12 | ||||
SECTION 4.5 | Delivery Covenants | 12 | ||||
SECTION 4.6 | Control Covenants | 12 | ||||
SECTION 4.7 | Filing Covenants | 13 | ||||
SECTION 4.8 | Accounts | 13 | ||||
SECTION 4.9 | Investment Property; Partnership/LLC Interests | 14 | ||||
SECTION 4.10 | Further Assurances | 15 | ||||
ARTICLE V REMEDIAL PROVISIONS | 15 | |||||
SECTION 5.1 | General Remedies | 15 | ||||
SECTION 5.2 | Specific Remedies | 16 | ||||
SECTION 5.3 | Registration Rights | 18 | ||||
SECTION 5.4 | Application of Proceeds | 19 | ||||
SECTION 5.5 | Waiver, Deficiency | 19 |
ARTICLE VI THE ADMINISTRATIVE AGENT | 19 | |||||
SECTION 6.1 | Administrative Agent’s Appointment as Attorney-In-Fact | 19 | ||||
SECTION 6.2 | Duty of Administrative Agent | 21 | ||||
SECTION 6.3 | Authority of Administrative Agent | 21 | ||||
ARTICLE VII MISCELLANEOUS | 21 | |||||
SECTION 7.1 | Notices | 21 | ||||
SECTION 7.2 | Amendments, Waivers and Consents | 22 | ||||
SECTION 7.3 | Expenses, Indemnification, Waiver of Consequential Damages, etc | 22 | ||||
SECTION 7.4 | Right of Set Off | 22 | ||||
SECTION 7.5 | Governing Law; Jurisdiction; Venue; Service of Process | 23 | ||||
SECTION 7.6 | Waiver of Jury Trial | 24 | ||||
SECTION 7.7 | Injunctive Relief | 24 | ||||
SECTION 7.8 | No Waiver by Course of Conduct, Cumulative Remedies | 24 | ||||
SECTION 7.9 | Successors and Assigns | 25 | ||||
SECTION 7.10 | Survival of Indemnities | 25 | ||||
SECTION 7.11 | Titles and Captions | 25 | ||||
SECTION 7.12 | Severability of Provisions | 25 | ||||
SECTION 7.13 | Counterparts | 25 | ||||
SECTION 7.14 | Integration | 25 | ||||
SECTION 7.15 | Advice of Counsel; No Strict Construction | 25 | ||||
SECTION 7.16 | Acknowledgements | 26 | ||||
SECTION 7.17 | Releases | 26 | ||||
SECTION 7.18 | Additional Grantors | 27 | ||||
SECTION 7.19 | All Powers Coupled with Interest | 27 |
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SCHEDULES:
Schedule 3.6 | Exact Legal Name; Jurisdiction of Organization; Taxpayer Identification Number; Registered Organization Number; Mailing Address; Chief Executive Office and other Locations | |
Schedule 3.9 | Deposit Accounts | |
Schedule 3.11 | Investment Property and Partnership/LLC Interests |
COLLATERAL AGREEMENT (this “Agreement”), dated as of ,2006, by and among BOWATER INCORPORATED, a Delaware corporation (the “Parent Borrower” and together with any Subsidiary designated as a Subsidiary Borrower pursuant toSection 4.14 of the Credit Agreement (defined below), the “Borrower”), certain of its Subsidiaries as identified on the signature pages hereto, as grantors, and any Additional Grantor (as defined below) who may become party to this Agreement (such Subsidiaries and Additional Grantors, collectively, with the Borrower, the “Grantors”) and acknowledged by certain of its Subsidiaries as identified on the signature pages hereto, as issuers, in favor of WACHOVIA BANK, NATIONAL ASSOCIATION, a national banking association, as Administrative Agent (in such capacity, the “Administrative Agent”) for the ratable benefit of the Secured Parties.
STATEMENT OF PURPOSE
Pursuant to the Credit Agreement dated of even date herewith by and among the Borrower, the banks and other financial institutions from time to time party thereto (the “Lenders”) and the Administrative Agent (as amended, restated, supplemented or otherwise modified from time to time, the “Credit Agreement”), the Lenders have agreed to make Extensions of Credit to the Borrower upon the terms and subject to the conditions set forth therein.
Pursuant to the terms of the Subsidiary Guaranty Agreement of even date herewith, certain Subsidiaries of the Borrower who are parties hereto have guaranteed the payment and performance of the Obligations.
It is a condition precedent to the obligation of the Lenders to make their respective Extensions of Credit to the Borrower under the Credit Agreement that the Grantors shall have executed and delivered this Agreement to the Administrative Agent, for the ratable benefit of itself and the other Secured Parties.
NOW, THEREFORE, for good and valuable consideration, the receipt and sufficiency of which are hereby acknowledged by the parties hereto, and to induce the Administrative Agent and the Lenders to enter into the Credit Agreement and to induce the Lenders to make their respective Extensions of Credit to the Borrower thereunder, each Grantor hereby agrees with the Administrative Agent, for the ratable benefit of the Secured Parties, as follows:
ARTICLE I
DEFINED TERMS
SECTION 1.1Terms Defined in the Uniform Commercial Code.
(a) The following terms when used in this Agreement shall have the meanings assigned to them in the UCC (as defined in the Credit Agreement) as in effect from time to time: “Account”, “Account Debtor”, “Authenticate”, “Certificated Security”, “Chattel Paper”, “Deposit Account”, “Documents”, “Electronic Chattel Paper”, “General Intangible”, “Instrument”, “Inventory”, “Investment Company Security”, “Investment Property”, “Letter-of Credit Rights”, “Proceeds”, “Record”, “Registered Organization”, “Securities Entitlement”, “Securities Intermediary”, “Securities Account”, “Security”, “Supporting Obligation”, “Tangible Chattel Paper”, and “Uncertificated Security”.
(b) Terms defined in the UCC and not otherwise defined herein or in the Credit Agreement shall have the meaning assigned in the UCC as in effect from time to time.
SECTION 1.2Definitions. The following terms when used in this Agreement shall have the meanings assigned to them below:
“Additional Grantor” means each Subsidiary of the Borrower which hereafter becomes a Grantor pursuant toSection 7.18 (as required pursuant toSection 8.11 of the Credit Agreement).
“Agreement” means this Collateral Agreement, as amended, restated, supplemented or otherwise modified from time to time.
“Applicable Insolvency Laws” means all Applicable Laws governing bankruptcy, reorganization, arrangement, adjustment of debts, relief of debtors, dissolution, insolvency, fraudulent transfers or conveyances or other similar laws (including, without limitation, 11 U.S.C. Sections 544, 547, 548 and 550 and other “avoidance” provisions of Title 11 of the United States Code).
“Assignment of Claims Act” means the Assignment of Claims Act of 1940 (41 U.S.C. Section 15, 31 U.S.C. Section 3737, and 31 U.S.C. Section 3727), including all amendments thereto and regulations promulgated thereunder.
“Collateral” has the meaning assigned thereto in Section 2.1.
“Collateral Account” means any collateral account established by the Administrative Agent as provided inSection 5.2.
“Control” means the manner in which “control” is achieved under the UCC with respect to any Collateral for which the UCC specifies a method of achieving “control”.
“Controlled Depository” has the meaning assigned thereto inSection 4.6.
“Controlled Intermediary” has the meaning assigned thereto inSection 4.6.
“Effective Endorsement and Assignment” means, with respect to any specific type of Collateral, all such endorsements, assignments and other instruments of transfer reasonably requested by the Administrative Agent with respect to the Security Interest granted in such Collateral, and in each case, in form and substance satisfactory to the Administrative Agent.
“Excluded Deposit Account” means, collectively, (a) Deposit Accounts established solely for the purpose of funding payroll, payroll taxes and other compensation and benefits to employees or other similar items and any other Deposit Account in which a security interest would be unlawful under Applicable Law or in violation of any employee benefit plan or employee benefit agreement and (b) except as otherwise required by the Administrative Agent following the occurrence and during the continuance of a Default or Event of Default, Deposit
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Accounts (other than the Collateral Account) with amounts on deposit that as of the close of business on any day, when aggregated with (i) the amounts on deposit in all other Deposit Accounts for which a control agreement has not been obtained (other than those specified in clause (a)) and (ii) the aggregate fair market value of all Excluded Investment Property, do not exceed $2,000,000; provided that notwithstanding anything to the contrary contained in this Agreement, any Deposit Account of a Grantor which is a concentration account or collection account shall not be deemed to be an Excluded Deposit Account at any time.
“Excluded Investment Property” means, collectively, (a) Investment Property held in a Securities Account established solely for the purpose of funding payroll, payroll taxes and other compensation and benefits to employees or other similar items and any other Investment Property held in a Securities Account in which a security interest would be unlawful under Applicable Law or in violation of any employee benefit plan or employee benefit agreement, and (b) except as otherwise required by the Administrative Agent following the occurrence and during the continuance of a Default or Event of Default, Investment Property with an aggregate fair market value that as of the close of any business day, when aggregated with (a) the fair market value of all other Investment Property held in a Securities Account for which a control agreement has not been obtained and (b) the aggregate amounts on deposit in all Excluded Deposit Accounts, does not exceed $2,000,000 at any time; provided that notwithstanding anything to the contrary contained in this Agreement, any Investment Property held in a Securities Account of a Grantor which is a concentration account or collection account shall not be deemed to be Excluded Investment Property at any time.
“Government Contract” means a contract between any Grantor and an agency, department or instrumentality of the United States or any state, municipal or local Governmental Authority located in the United States or all obligations of any such Governmental Authority arising under any Account now or hereafter owing by any such Governmental Authority, as account debtor, to any Grantor.
“Grantors” has the meaning set forth in the Preamble of this Agreement.
“Issuer” means any issuer of any Investment Property or Partnership/LLC Interests (including, without limitation, any Issuer as defined in the UCC).
“Material Government Contract” means any Government Contract involving monetary liability of an agency, department or instrumentality of the United States or any state, municipal or local Governmental Authority located in the United States in excess of $10,000,000 per annum (calculated based on the portion of the revenues from any such contract that are for the account of the applicable Grantor with any such revenues that have been assigned by such Grantor to a third person being disregarded for the purposes of such calculation).
“Obligations” means with respect to the Borrower, the meaning assigned thereto in the Credit Agreement, and with respect to each Subsidiary Guarantor, the obligations of such Subsidiary Guarantor under the Subsidiary Guaranty Agreement executed by such Subsidiary Guarantor and with respect to all Grantors, all liabilities and obligations of the Grantors hereunder and all liabilities and obligations of the Grantors with respect to overdrafts, returned items and related liabilities and all indemnification obligations under the Loan Documents now
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or hereafter owing by any Grantor to Wachovia Bank, National Association, any Affiliate thereof or the Administrative Agent arising from or in connection with treasury, depositary or cash management services or in connection with any automated clearinghouse transfer of funds for the benefit of such Grantor.
“Partnership/LLC Interests” means, with respect to any Grantor, the entire partnership, membership interest or limited liability company interest, as applicable, of such Grantor in each partnership, limited partnership or limited liability company owned thereby, including, without limitation, such Grantor’s capital account, its interest as a partner or member, as applicable, in the net cash flow, net profit and net loss, and items of income, gain, loss, deduction and credit of any such partnership, limited partnership or limited liability company, as applicable, such Grantor’s interest in all distributions made or to be made by any such partnership, limited partnership or limited liability company, as applicable, to such Grantor and all of the other economic rights, titles and interests of such Grantor as a partner or member, as applicable, of any such partnership, limited partnership or limited liability company, as applicable, whether set forth in the partnership agreement or membership agreement, as applicable, of such partnership, limited partnership or limited liability company, as applicable, by separate agreement or otherwise.
“Restricted Securities Collateral” has the meaning assigned thereto in Section 5.3.
“Securities Act” means the Securities Act of 1933, including all amendments thereto and regulations promulgated thereunder.
“Security Interests” means the security interests granted pursuant to Article II, as well as all other security interests created or assigned as additional security for the Obligations pursuant to the provisions of the Credit Agreement.
“ULC” means an unlimited company under the Companies Act (Nova Scotia).
“ULC Shares” means shares of stock issued by a ULC.
SECTION 1.3Other Definitional Provisions. Terms defined in the Credit Agreement and not otherwise defined herein shall have the meaning assigned thereto in the Credit Agreement. With reference to this Agreement and each other Loan Document, unless otherwise specified herein or in such other Loan Document: (a) the definitions of terms herein shall apply equally to the singular and plural forms of the terms defined, (b) whenever the context may require, any pronoun shall include the corresponding masculine, feminine and neuter forms, (c) the words “include”, “includes” and “including” shall be deemed to be followed by the phrase “without limitation”, (d) the word “will” shall be construed to have the same meaning and effect as the word “shall”, (e) any definition of or reference to any agreement, instrument or other document herein shall be construed as referring to such agreement, instrument or other document, as from time to time amended, supplemented or otherwise modified (subject to any restrictions on such amendments, supplements or modifications set forth herein), (f) any reference herein to any Person shall be construed to include such Person’s permitted successors and assigns, (g) the words “herein”, “hereof” and “hereunder”, and words of similar import, shall be construed to refer to this Agreement in its entirety and not to any
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particular provision hereof, (h) all references herein to Articles, Sections, Exhibits and Schedules shall be construed to refer to Articles and Sections of, and Exhibits and Schedules to, this Agreement, (i) the words “asset” and “property” shall be construed to have the same meaning and effect and to refer to any and all tangible and intangible assets and properties, including cash, securities, accounts and contract rights, G) the term “documents” includes any and all instruments, documents, agreements, certificates, notices, reports, financial statements and other writings, however evidenced, whether in physical or electronic form, (k) in the computation of periods of time from a specified date to a later specified date, the word “from” means “from and including;” the words “to” and “until” each mean “to but excluding;” and the word “through” means “to and including”, (1) Section headings herein and in the other Loan Documents are included for convenience of reference only and shall not affect the interpretation of this Agreement or any other Loan Document and (k) where the context requires, terms relating to the Collateral or any part thereof, when used in relation to a Grantor, shall refer to such Grantor’s Collateral or the relevant part thereof.
ARTICLE II
SECURITY INTEREST
SECTION 2.1Grant of Security Interest. Each Grantor hereby grants, pledges and collaterally assigns to the Administrative Agent, for the ratable benefit of the Secured Parties, a security interest in, all of such Grantor’s right, title and interest in the following property, now owned or at any time hereafter acquired by such Grantor or in which such Grantor now has or at any time in the future may acquire any right, title or interest, and wherever located or deemed located (collectively, the “Collateral”), as collateral security for the prompt and complete payment and performance when due (whether at the stated maturity, by acceleration or otherwise) of the Obligations:
(a) all Accounts;
(b) all cash and currency;
(c) all Chattel Paper;
(d) all Deposit Accounts;
(e) all Documents;
(f) all General Intangibles;
(g) all Instruments;
(h) all Inventory;
(i) all Investment Property;
(j) all Letter-of-Credit Rights;
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(k) all books and records pertaining to the Collateral; and
(1) to the extent not otherwise included, all Proceeds and products of any and all of the foregoing and all collateral security and Supporting Obligations (as now or hereafter defined in the DCC) given by any Person with respect to any of the foregoing;
provided, that (i) the Collateral shall in no event include any shares of “capital stock” or “Debt” of any “Restricted Subsidiary” (as such terms are defined in the Existing Notes), (ii) any Security Interest on any Capital Stock or other ownership interests issued by any Foreign Subsidiary shall be limited to 65% of all issued and outstanding shares of all classes of Capital Stock of such Foreign Subsidiary, and (iii) the Security Interests granted herein shall not extend to, and the term “Collateral” shall not include, any rights under any lease, contract or agreement to the extent that the granting of a security interest therein is specifically prohibited in writing by, or would constitute an event of default under or would grant a party a termination right under any agreement governing such right unless such prohibition is not enforceable or is otherwise ineffective under Applicable Law. Notwithstanding anything in clause (iii) above to the contrary, such proviso shall not affect, limit, restrict or impair the grant by any Grantor of a Security Interest in any Account or any money or other amounts due and payable to any Grantor or to become due and payable to any Grantor under such lease, contract or agreement unless such Security Interest in such Account, money or other amount due and payable is also specifically prohibited by the terms of such lease, contract or agreement or such Security Interest in such Account, money or other amount due and payable or would expressly constitute an event of default under or would expressly grant a party a termination right under any such lease contract or agreement, in each case unless such prohibition is not enforceable or is otherwise ineffective under Applicable Law;provided further that notwithstanding anything to the contrary contained in the foregoing proviso, the Security Interests granted herein shall immediately attach to and the term “Collateral” shall immediately include the rights under any such lease, contract, or agreement and in such Account, money, or other amounts due and payable to any Grantor at such time as such prohibition, event of default or termination right shall terminate or shall be waived.
Notwithstanding the foregoing, the payment and performance of the Obligations shall not be secured by any Hedging Agreement between any Grantor and any Secured Party.
SECTION 2.2Grantors Remain Liable. Anything herein to the contrary notwithstanding: (a) each Grantor shall remain liable to perform all of its duties and obligations under the contracts and agreements included in the Collateral to the same extent as if this Agreement had not been executed, (b) the exercise by the Administrative Agent of any of the rights hereunder shall not release any Grantor from any of its duties or obligations under the contracts and agreements included in the Collateral, (c) neither the Administrative Agent nor any other Secured Party shall have any obligation or liability under the contracts and agreements included in the Collateral by reason of this Agreement, nor shall the Administrative Agent or any other Secured Party be obligated to perform any of the obligations or duties of any Grantor thereunder or to take any action to collect or enforce any claim for payment assigned hereunder, and (d) neither the Administrative Agent nor any other Secured Party shall have any liability in contract or tort for any Grantor’s acts or omissions.
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ARTICLE III
REPRESENTATIONS AND WARRANTIES
To induce the Administrative Agent and the Lenders to enter into the Credit Agreement and to induce the Lenders to make their respective Extensions of Credit to the Borrower thereunder, each Grantor hereby represents and warrants to the Administrative Agent and each other Secured Party that:
SECTION 3.1Existence. Each Grantor is duly organized, validly existing and in good standing under the laws of the jurisdiction of its incorporation or formation, has the power and authority to own its properties and to carry on its business as now being and hereafter proposed to be conducted and is duly qualified and authorized to do business in each jurisdiction in which the character of its properties or the nature of its business requires such qualification and authorization except in jurisdictions where the failure to be so qualified or in good standing could not reasonably be expected to result in a Material Adverse Effect.
SECTION 3.2Authorization of Agreement; No Conflict. Each Grantor has the right, power and authority and has taken all necessary corporate and other action to authorize the execution, delivery and performance of, this Agreement. This Agreement has been duly executed and delivered by the duly authorized officers of each Grantor and this Agreement constitutes the legal, valid and binding obligation of such Grantor, enforceable in accordance with its terms, except as such enforceability may be limited by (i) bankruptcy, insolvency, reorganization, moratorium or similar state or federal laws from time to time in effect which affect the enforcement of creditors’ rights in general and (ii) application of general principles of equity (regardless of whether such enforceability is considered in a proceeding in equity or at law). The execution, delivery and performance by the Grantors of this Agreement does not and will not, by the passage of time, the giving of notice or otherwise, (i) require any Governmental Approval or violate any Applicable Law relating to any Grantor, (ii) conflict with, result in a breach of or constitute a default under the articles of incorporation, bylaws or other organizational documents of any Grantor, (iii) conflict with, result in a breach of or constitute a default under any indenture, agreement or other instrument to which any Grantor is a party or by which any of its properties may be bound or any Governmental Approval relating to such Grantor which could reasonably be expected to result in a Material Adverse Effect or (iv) result in or require the creation or imposition of any Lien upon or with respect to any property now owned or hereafter acquired by any Grantor other than Liens arising under the Loan Documents.
SECTION 3.3Consents. No approval, consent, exemption, authorization or other action by, or notice to, or filing with, any Governmental Authority or any other Person is necessary or required in connection with the execution, delivery or performance by, or enforcement against any Grantor or any Issuer of this Agreement, except (a) as may be required by laws affecting the offering and sale of securities generally and (b) filings under the DCC and/or the Assignment of Claims Act.
SECTION 3.4Perfected First Priority Liens. Each financing statement naming any Grantor as a debtor is in appropriate form for filing in the appropriate filing offices. The Security Interests granted pursuant to this Agreement constitute valid security interests in all of
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the Collateral in favor of the Administrative Agent, for the ratable benefit of the Secured Parties, as collateral security for the Obligations. When DCC financing statements containing an adequate description of the Collateral shall have been filed in the offices specified inSchedule 3.6, the Security Interests will constitute perfected security interests in all right, title and interest of such Grantor in the Collateral to the extent that a security interest therein may be perfected by filing pursuant to the DCC, prior to all other Liens and rights of others therein except for Permitted Liens. When each control agreement has been executed and delivered to the Administrative Agent, the Security Interests will constitute perfected security interests in all right, title and interest of the Grantors in the Deposit Accounts and Securities Accounts, as applicable, subject thereto, prior to all other Liens and rights of others therein except for Permitted Liens.
SECTION 3.5Title, No Other Liens. Except for the Security Interests, each Grantor owns each item of the Collateral free and clear of any and all Liens or claims other than Permitted Liens. No financing statement under the DCC of any state which names a Grantor as debtor or other public notice with respect to all or any part of the Collateral is on file or of record in any public office, except such as have been filed in favor of the Administrative Agent, for the ratable benefit of the Secured Parties, pursuant to this Agreement or in connection with Permitted Liens. No Collateral is in the possession or Control of any Person asserting any claim thereto or security interest therein, except that (a) the Administrative Agent or its designee may have possession or Control of Collateral as contemplated hereby, (b) a depositary bank may have Control of a Deposit Account owned by a Grantor at such depositary bank and a Securities Intermediary may have Control over a Securities Account owned by a Grantor at such Securities Intermediary, in each case subject to the terms of any Deposit Account control agreement or Securities Account control agreement, as applicable and to the extent required bySection 4.6(a), in favor of the Administrative Agent, and (c) a bailee, consignee or other Person may have possession of the Collateral as contemplated by, and so long as the applicable Grantors have complied to the satisfaction of the Administrative Agent with the applicable provisions of Section 4.6(b).
SECTION 3.6State of Organization; Location of Inventory; other Information.
(a) The exact legal name of each Grantor is set forth on Schedule 3.6 (as such schedule may be updated from time to time pursuant toSection 4.3).
(b) Each Grantor is a Registered Organization organized under the laws of the state identified onSchedule 3.6 under such Grantor’s name (as such schedule may be updated from time to time pursuant toSection 4.3). The taxpayer identification number and Registered Organization number of each Grantor is set forth onSchedule 3.6 under such Grantor’s name (as such schedule may be updated from time to time pursuant toSection 4.3).
(c) All Collateral consisting of Inventory (whether now owned or hereafter acquired) is (or will be) located at the locations specified onSchedule 3.6, except as otherwise permitted hereunder.
(d) The mailing address, chief place of business, chief executive office and office where each Grantor keeps its books and records relating to the Accounts, Documents, General
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Intangibles, Instruments and the Investment Property in which it has any interest is located at the locations specified onSchedule 3.6 under such Grantor’s name. No Grantor has any other places of business at which Collateral is located except those separately set forth onSchedule 3.6 under such Grantor’s name. No Grantor does business nor has done business during the past five years under any trade name or fictitious business name except as disclosed onSchedule 3.6 under such Grantor’s name. Except as disclosed onSchedule 3.6 under such Grantor’s name, no Grantor has acquired assets from any Person, other than assets acquired in the ordinary course of such Grantor’s business, during the past five years.
SECTION 3.7Accounts. To the knowledge of each Grantor, (i) each existing Account constitutes, and each hereafter arising Account will constitute, the legally valid and binding obligation of the applicable Account Debtor, (ii) the amount represented by each Grantor to the Administrative Agent as owing by each Account Debtor is, or will be, the correct amount actually and unconditionally owing, except for ordinary course cash discounts and allowances where applicable (such amount to be determined in accordance with GAAP and reported in the financial statements of such Grantor) and (iii) no Account Debtor has any defense, set-off, claim or counterclaim against any Grantor that can be asserted against the Administrative Agent, whether in any proceeding to enforce the Administrative Agent’s rights in the Collateral or otherwise except (A) as are reflected in the reported amounts of such accounts or (B) are not, in the aggregate, material to the value of the Accounts taken as a whole. None of the Accounts is, nor will any hereafter arising Account be, evidenced by a promissory note or other Instrument (other than a check) that has not been pledged to the Administrative Agent in accordance with the terms hereof.
SECTION 3.8Chattel Paper. As of the date hereof, no Grantor holds any Chattel Paper in the ordinary course of its business.
SECTION 3.9Deposit Accounts. As of the date hereof, all Deposit Accounts (including, without limitation, cash management accounts that are Deposit Accounts), securities accounts and lockboxes (including the: (a) owner of such accounts, (b) name and address of financial institution or securities broker where such accounts are located, (c) account numbers and (d) purpose or use of such account) owned by any Grantor are listed onSchedule 3.9.
SECTION 3.10Inventory. Except as could not reasonably be expected to have a Material Adverse Effect, Collateral consisting of Inventory is of good and merchantable quality, free from any material defects. To the knowledge of each Grantor, none of such Inventory is subject to any licensing, patent, trademark, trade name or copyright with any Person that restricts any Grantor’s ability to manufacture and/or sell such Inventory. The completion of the manufacturing process of such Inventory by a Person other than the applicable Grantor would be permitted under any contract to which such Grantor is a party or to which the Inventory is subject.
SECTION 3.11Investment Property; Partnership/LLC Interests.
(a) As of the date hereof, all Investment Property (including, without limitation, Securities Accounts and cash management accounts that are Investment Property) and all Partnership/LLC Interests owned by any Grantor and included in the Collateral are listed onSchedule 3.11 (as such schedule may be updated from time to time pursuant toSection 4.3).
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(b) All Investment Property and all Partnership/LLC Interests issued by any Issuer to any Grantor and included in the Collateral (i) have been duly and validly issued and, if applicable, are fully paid and nonassessable, (ii) are beneficially owned as of record by such Grantor and (iii) constitute all the issued and outstanding shares of all classes of the Capital Stock or all of the Partnership/LLC Interests of such Issuer issued to such Grantor (provided, that the Capital Stock or Partnership/LLC Interests which is issued by any Foreign Subsidiary and which is pledged to the Administrative Agent, for the benefit of the Secured Parties, pursuant to this Agreement constitutes 65% of the issued and outstanding Capital Stock or Partnership/LLC Interests, as applicable, of such Issuer).
(c) Except as set forth on Schedule 3.11, none of the Partnership/LLC Interests (i) are traded on a Securities exchange or in Securities markets, (ii) by their terms expressly provide that they are Securities governed by Article 8 of the UCC, (iii) are Investment Company Securities or (iv) are held in a Securities Account.
SECTION 3.12Instruments. As of the date hereof, no Grantor holds any Instruments constituting Collateral or is named a payee of any promissory note, in either case, having a value in excess of $1,000,000 except as are being delivered to the Administrative Agent (other than the intercompany note payable to the Borrower by Calhoun Newsprint Company pursuant to the Bowater-Calhoun Arrangement).
SECTION 3.13Government Contracts. As of the date hereof, no Grantor is party to any Material Government Contract.
ARTICLE IV
COVENANTS
Until the Obligations shall have been paid in full and the Commitments terminated, unless consent has been obtained in the manner provided for in Section 7.1, each Grantor covenants and agrees that:
SECTION 4.1Maintenance of Perfected Security Interest; Further Information.
(a) Each Grantor shall maintain the Security Interest created by this Agreement as a first priority perfected Security Interest (subject only to Permitted Liens) and shall defend such Security Interest against the claims and demands of all Persons whomsoever (other than holders of Permitted Liens).
(b) Each Grantor will furnish to the Administrative Agent upon the Administrative Agent’s reasonable request statements and schedules further identifying and describing the assets and property of such Grantor and such other reports in connection therewith as the Administrative Agent may reasonably request, all in reasonable detail.
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SECTION 4.2Maintenance of Insurance.
(a) Each Grantor will maintain, with financially sound and reputable companies, insurance policies (i) insuring the Collateral against loss by fire, explosion, theft, fraud and such other casualties, including business interruption, in amounts and with deductibles at least as favorable as those generally maintained by businesses of similar size engaged in similar activities and (ii) insuring such Grantor and the Administrative Agent, for the ratable benefit of the Secured Parties, against liability for hazards, risks and liability to persons and property relating to the Collateral, in amounts and with deductibles at least as favorable as those generally maintained by businesses of similar size engaged in similar activities, such policies to be in such form and having such coverage as may be reasonably satisfactory to the Administrative Agent.
(b) All insurance referred to in subsection (a) above shall (i) name the Administrative Agent, for the ratable benefit of the Secured Parties, as an additional insured as its interests may appear (to the extent covering any other risk) and (ii) provide that no cancellation, material reduction in amount or material change in coverage thereof shall be effective until at least thirty (30) days after receipt by the Administrative Agent of written notice thereof and (iii) be reasonably satisfactory in all other respects to the Administrative Agent.
(c) Upon the reasonable request of the Administrative Agent from time to time, each Grantor shall deliver to the Administrative Agent periodic information (including certificates of insurance) from a reputable insurance broker with respect to the insurance referred to in thisSection 4.2.
SECTION 4.3Changes in Locations; Changes in Name or Structure. No Grantor will, except upon thirty (30) days’ prior written notice to the Administrative Agent and delivery to the Administrative Agent of (a) all additional financing statements (executed if necessary for any particular filing jurisdiction) and other instruments and documents reasonably requested by the Administrative Agent to maintain the validity, perfection and priority of the Security Interests and (b) if applicable, a written supplement to theSchedules of this Agreement:
(i) permit any Deposit Account (other than Excluded Deposit Accounts) to be held by or at a depositary bank other than the depositary bank that held such Deposit Account as of the date hereof as set forth onSchedule 3.8;
(ii) permit any Investment Property (other than (A) Certificated Securities delivered to the Administrative Agent pursuant toSection 4.5 and (B) Excluded Investment Property) to be held by a Securities Intermediary other than the Securities Intermediary that held such Investment Property as of the date hereof as set forth on Schedule3.11;
(iii) change its jurisdiction of organization or the location of its chief executive office from that identified onSchedule 3.6; or
(iv) change its name, identity or corporate or organizational structure to such an extent that any financing statement filed by the Administrative Agent in connection with this Agreement would become misleading.
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SECTION 4.4Required Notifications. Each Grantor shall promptly notify the Administrative Agent, in writing, of: (a) any Lien (other than the Permitted Liens) on any of the Collateral which would adversely affect the ability of the Administrative Agent to exercise any of its remedies hereunder, (b) the occurrence of any other event which could reasonably be expected to have a Material Adverse Effect on the aggregate value of the Collateral or on the Security Interests, (c) any Collateral which, to the knowledge of such Grantor, constitutes a Government Contract, and (d) the acquisition or ownership by such Grantor of any (i) Deposit Account (other than Excluded Deposit Accounts) or (ii) Investment Property (other than Excluded Investment Property) after the date hereof.
SECTION 4.5Delivery Covenants. Each Grantor will deliver and pledge to the Administrative Agent, for the ratable benefit of itself and the Secured Parties, all Certificated Securities, Partnership/LLC Interests evidenced by a certificate, negotiable Documents, Instruments, and Tangible Chattel Paper owned or held by such Grantor, in each case, together with an Effective Endorsement and Assignment and all Supporting Obligations, as applicable, unless such delivery and pledge has been waived in writing by the Administrative Agent.
SECTION 4.6Control Covenants.
(a) Each Grantor shall instruct (and otherwise use its commercially reasonable efforts) to cause (i) each depositary bank (other than the Administrative Agent) holding a Deposit Account (other than Excluded Deposit Accounts) owned by such Grantor and (ii) each Securities Intermediary holding any Investment Property (other than Excluded Investment Property) owned by such Grantor, to execute and deliver a control agreement, sufficient to provide the Administrative Agent with Control of such Deposit Account and otherwise in form and substance satisfactory to the Administrative Agent (any such depositary bank executing and delivering any such control agreement, a “Controlled Depositary”, and any such Securities Intermediary executing and delivering any such control agreement, a “Controlled Intermediary”). In the event any such depositary bank or Securities Intermediary refuses to execute and deliver such control agreement, the Administrative Agent, in its sole discretion, may require the applicable Deposit Account and Investment Property to be transferred to the Administrative Agent or a Controlled Depositary or Controlled Intermediary, as applicable. After the date hereof, all Deposit Accounts (other than Excluded Deposit Accounts) and all Investment Property will be maintained with the Administrative Agent or with a Controlled Depository or a Controlled Intermediary, as applicable.
(b) If any Collateral (other than Collateral specifically subject to the provisions ofSection 4.6(a)) exceeding in value $1,000,000 in the aggregate, as determined on the Closing Date and on each fiscal quarter end thereafter (such Collateral exceeding such amount, the “Excess Collateral”), is at any time in the possession or control of any consignee, warehouseman, bailee (other than a carrier transporting Inventory to a purchaser in the ordinary course of business), processor, or any other third party, such Grantor shall notify in writing such Person of the Security Interests created hereby, shall use its commercially reasonable efforts to obtain such Person’s written agreement in writing to hold all such Collateral for the Administrative Agent’s account subject to the Administrative Agent’s instructions, and shall cause such Person to issue and deliver to the Administrative Agent warehouse receipts, bills of lading or any similar documents relating to such Collateral to the Administrative Agent’s office
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together with an Effective Endorsement and Assignment;provided that if such Grantor is not able to obtain such agreement and cause the delivery of such items, the Administrative Agent, in its sole discretion, may require such Excess Collateral to be moved to another location specified thereby. Further, each Grantor shall perfect and protect such Grantor’s ownership interests in such Inventory stored with a consignee against creditors of the consignee by filing and maintaining financing statements against the consignee reflecting the consignment arrangement filed in all appropriate filing offices, providing any written notices required to notify any prior creditors of the consignee of the consignment arrangement, and taking such other actions as may be appropriate to perfect and protect such Grantor’s interests in such inventory under Section 2326, Section 9-103, Section 9-324 and Section 9-505 of the DCC or otherwise. All such financing statements filed pursuant to thisSection 4.6(b) shall be assigned, on the face thereof, to the Administrative Agent, for the ratable benefit of the Secured Parties.
SECTION 4.7Filing Covenants. Pursuant to Section 9-509 of the DCC and any other Applicable Law, each Grantor authorizes the Administrative Agent to file or record financing statements and other filing or recording documents or instruments with respect to the Collateral without the signature of such Grantor in such form and in such offices as the Administrative Agent determines appropriate to perfect the Security Interests of the Administrative Agent under this Agreement. Such financing statements may describe the Collateral in the same manner as described herein or may contain an indication or description of Collateral that describes such property in any other manner as the Administrative Agent may determine, in its sole discretion, is necessary, advisable or prudent to ensure the perfection of the Security Interest in the Collateral granted herein, including, without limitation, describing such property as “all assets” or “all personal property.” Further, a photographic or other reproduction of this Agreement shall be sufficient as a financing statement or other filing or recording document or instrument for filing or recording in any jurisdiction. Each Grantor hereby authorizes, ratifies and confirms all financing statements and other filing or recording documents or instruments filed by Administrative Agent prior to the date of this Agreement.
SECTION 4.8Accounts.
(a) Other than in the ordinary course of business consistent with its past practice, no Grantor will (i) grant any extension of the time of payment of any Account, (ii) compromise or settle any Account for less than the full amount thereof, (iii) release, wholly or partially, any Account Debtor, (iv) allow any credit or discount whatsoever on any Account or (v) amend, supplement or modify any Account in any manner that could reasonably be likely to adversely affect the value thereof.
(b) Each Grantor will deliver to the Administrative Agent a copy of each material demand, notice or document received by it that questions or calls into doubt the validity or enforceability of any material Account.
(c) The Administrative Agent shall have the right to make test verifications of the Accounts in any manner and through any medium that it reasonably considers advisable, and each Grantor shall furnish all such assistance and information as the Administrative Agent may require in connection with such test verifications. At any time and from time to time, upon the Administrative Agent’s request and at the expense of the relevant Grantor, such Grantor shall
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cause independent public accountants or others satisfactory to the Administrative Agent to furnish to the Administrative Agent reports showing reconciliations, aging and test verifications of, and trial balances for, the Accounts.
SECTION 4.9Investment Property; Partnership/LLC Interests.
(a) Without the prior written consent of the Administrative Agent, no Grantor will (i) vote to enable, or take any other action to permit, any applicable Issuer to issue any Investment Property or Partnership/LLC Interests, except for additional Investment Property or Partnership/LLC Interests that will be subject to the Security Interest granted herein in favor of the Secured Parties, or (ii) enter into any agreement or undertaking restricting the right or ability of such Grantor or the Administrative Agent to sell, assign or transfer any Investment Property or Partnership/LLC Interests or Proceeds thereof. The Grantors will defend the right, title and interest of the Administrative Agent in and to any Investment Property and Partnership/LLC Interests against the claims and demands of all Persons whomsoever.
(b) If any Grantor shall become entitled to receive or shall receive (i) any Certificated Securities (including, without limitation, any certificate representing a stock dividend or a distribution in connection with any reclassification, increase or reduction of capital or any certificate issued in connection with any reorganization), option or rights in respect of the ownership interests of any Issuer, whether in addition to, in substitution of, as a conversion of, or in exchange for, any Investment Property, or otherwise in respect thereof, or (ii) any sums paid upon or in respect of any Investment Property upon the liquidation or dissolution of any Issuer, such Grantor shall accept the same as the agent of the Secured Parties, hold the same in trust for the Secured Parties, segregated from other funds of such Grantor, and promptly deliver the same to the Administrative Agent, on behalf of the Secured Parties, in accordance with the terms hereof.
(c) Anything herein or in any other Loan Document, to the contrary notwithstanding, each Grantor pledging ULC Shares under this Agreement is the sole registered and beneficial owner of all of the Collateral pledged by it which are ULC Shares and will remain so until such time as such ULC Shares are effectively transferred into the name of the Administrative Agent, any other Secured Party or any other Person on the books and records of such ULC. Accordingly, such Grantor shall be entitled to receive and retain for its own account any dividend on or other distribution, if any, in respect of such Collateral (except insofar as such Grantor has granted a Security Interest in such dividend on or other distribution, and any shares which are Collateral shall be delivered to the Administrative Agent to hold as Collateral hereunder) and shall have the right to vote such Collateral and to control the direction, management and policies of the issuer of such ULC Shares to the same extent as such Grantor would if such Collateral were not pledged to the Administrative Agent (for its own benefit and for the benefit of the Secured Parties) pursuant hereto. Nothing in this Agreement or any other document or agreement among all or some of the parties hereto is intended to, and nothing in this Agreement or any other Loan Document, shall, constitute the Administrative Agent, any other Secured Party or any other Person, a member of a ULC for the purposes of the Companies Act (Nova Scotia) until such time as notice is given to such Grantor and further steps are taken pursuant hereto or thereto so as to register the Administrative Agent, any other Secured Party or such other Person as the holder of the ULC Shares. To the extent that any provision hereof
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would have the effect of constituting the Administrative Agent or any other Secured Party as a member of any ULC prior to such time, such provision shall be severed here from and shall be ineffective with respect to the Collateral which are ULC Shares without otherwise invalidating or rendering unenforceable this Agreement or invalidating or rendering unenforceable such provision insofar as it relates to Collateral which are not ULC Shares.
SECTION 4.10Further Assurances. Upon the request of the Administrative Agent and at the sole expense of the Grantors, each Grantor will promptly and duly execute and deliver, and have recorded, such further instruments and documents and take such further actions as the Administrative Agent may reasonably request for the purpose of obtaining or preserving the full benefits of this Agreement and of the rights and powers herein granted, including, without limitation, (i) with respect to Government Contracts, assignment agreements and notices of assignment, in form and substance satisfactory to the Administrative Agent, duly executed by any Grantors party to such Government Contract in compliance with the Assignment of Claims Act (or analogous state Applicable Law), and (ii) all applications, certificates, instruments, registration statements, and all other documents and papers the Administrative Agent may reasonably request and as may be required by law in connection with the obtaining of any consent, approval, registration, qualification, or authorization of any Person deemed necessary or appropriate for the effective exercise of any rights under this Agreement.
ARTICLE V
REMEDIAL PROVISIONS
SECTION 5.1General Remedies. If an Event of Default shall occur and be continuing, the Administrative Agent, on behalf of the Secured Parties, may exercise, in addition to all other rights and remedies granted to them in this Agreement and in any other instrument or agreement securing, evidencing or relating to the Obligations, all rights and remedies of a secured party under the UCC or any other Applicable Law. Without limiting the generality of the foregoing, the Administrative Agent, without demand of performance or other demand, presentment, protest, advertisement or notice of any kind (except any notice required by Applicable Law as referred to below) to or upon any Grantor or any other Person (all and each of which demands, defenses, advertisements and notices are hereby waived), may in such circumstances forthwith collect, receive, appropriate and realize upon the Collateral, or any part thereof, «and/or may forthwith sell, lease, assign, give option or options to purchase, or otherwise dispose of and deliver the Collateral or any part thereof (or contract to do any of the foregoing), in one or more parcels at public or private sale or sales, at any exchange, broker’s board or office of the Administrative Agent or any other Secured Party or elsewhere upon such terms and conditions as it may deem advisable and at such prices as it may deem best, for cash or on credit or for future delivery without assumption of any credit risk. The Administrative Agent may disclaim any warranties in connection with any sale or other disposition of the Collateral, including, without limitation, any warranties of title, possession, quiet enjoyment and the like. The Administrative Agent or any other Secured Party shall have the right upon any such public sale or sales, and, to the extent permitted by law, upon any such private sale or sales, to purchase the whole or any part of the Collateral so sold, free of any right or equity of redemption in any Grantor, which right or equity is hereby waived and released. Each Grantor further agrees, at the Administrative Agent’s request, to assemble the Collateral and make it available to the
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Administrative Agent at places which the Administrative Agent shall reasonably select, whether at such Grantor’s premises or elsewhere. To the extent permitted by Applicable Law, each Grantor waives all claims, damages and demands it may acquire against the Administrative Agent or any other Secured Party arising out of the exercise by them of any rights hereunder except to the extent any such claims, damages, or demands result solely from the gross negligence or willful misconduct of the Administrative Agent or any other Secured Party, in each case against whom such claim is asserted. If any notice of a proposed sale or other disposition of Collateral shall be required by law, such notice shall be deemed reasonable and proper if given at least ten (10) days before such sale or other disposition.
SECTION 5.2 Specific Remedies.
(a) The Administrative Agent hereby authorizes each Grantor to collect such Grantor’s Accounts;provided that, the Administrative Agent may curtail or terminate such authority at any time after the occurrence and during the continuance of an Event of Default.
(b) Upon the occurrence and during the continuance of an Event of Default:
(i) the Administrative Agent may communicate with Account Debtors of any Account subject to a Security Interest and upon the request of the Administrative Agent, each Grantor shall notify (such notice to be in form and substance satisfactory to the Administrative Agent) its Account Debtors that such Accounts have been assigned to the Administrative Agent, for the ratable benefit of the Secured Parties;
(ii) each Grantor shall forward to the Administrative Agent, on the last Business Day of each week, deposit slips related to all cash, money, checks or any other similar items of payment received by the Grantor during such week, and, if requested by the Administrative Agent, copies of such checks or any other similar items of payment, together with a statement showing the application of all payments on the Collateral during such week and a collection report with regard thereto, in form and substance satisfactory to the Administrative Agent;
(iii) whenever any Grantor shall receive any cash, money, checks or any other similar items of payment relating to any Collateral (including any Proceeds of any Collateral), subject to the terms of any Permitted Liens, such Grantor agrees that it will, within one (1) Business Day of such receipt, deposit all such items of payment into the Collateral Account or in a Deposit Account (other than an Excluded Deposit Account) at a Controlled Depositary, until such Grantor shall deposit such cash, money, checks or any other similar items of payment in the Collateral Account or in a Deposit Account (other than an Excluded Deposit Account) at a Controlled Depositary, such Grantor shall hold such cash, money, checks or any other similar items of payment in trust for the Secured Parties and as property of the Secured Parties, separate from the other funds of such Grantor, and the Administrative Agent shall have the right in to transfer or direct the transfer of the balance of each Deposit Account (other than an Excluded Deposit Account) to the Collateral Account. All such Collateral and Proceeds of Collateral received by the Administrative Agent hereunder shall be held by the Administrative Agent in the Collateral Account as collateral security for all the Obligations and shall not constitute payment thereof until applied as provided inSection 5.4;
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(iv) the Administrative Agent shall have the right to receive any and all cash dividends, payments or distributions made in respect of any Investment Property, any Partnership/LLC Interests or any Proceeds paid in respect of any Investment Property, any Partnership/LLC Interests, and any or all of any Investment Property or any Partnership/LLC Interests shall be registered in the name of the Administrative Agent or its nominee, and the Administrative Agent or its nominee may thereafter exercise (A) all voting, corporate and other rights pertaining to such Investment Property or such Partnership/LLC Interests at any meeting of shareholders, partners or members of the relevant Issuers and (B) any and all rights of conversion, exchange and subscription and any other rights, privileges or options pertaining to such Investment Property or such Partnership/LLC Interests as if it were the absolute owner thereof (including, without limitation, the right to exchange at its discretion any and all of the Investment Property or any and all of the Partnership/LLC Interests upon the merger, consolidation, reorganization, recapitalization or other fundamental change in the corporate, partnership or company structure of any Issuer or upon the exercise by any Grantor or the Administrative Agent of any right, privilege or option pertaining to such Investment Property or such Partnership/LLC Interests, and in connection therewith, the right to deposit and deliver any and all of the Investment Property or any and all of the Partnership/LLC Interests with any committee, depositary, transfer agent, registrar or other designated agency upon such terms and conditions as the Administrative Agent may determine), all without liability except to account for property actually received by it; but the Administrative Agent shall have no duty to any Grantor to exercise any such right, privilege or option and the Administrative Agent and the other Secured Parties shall not be responsible for any failure to do so or delay in so doing. In furtherance thereof, each Grantor hereby authorizes and instructs each Issuer with respect to any Collateral consisting of Investment Property and Partnership/LLC Interests to (i) comply with any instruction received by it from the Administrative Agent in writing that (A) states that an Event of Default has occurred and is continuing and (B) is otherwise in accordance with the terms of this Agreement, without any other or further instructions from such Grantor, and each Grantor agrees that each Issuer shall be fully protected in so complying following receipt of such notice and prior to notice that such Event of Default is no longer continuing, and (ii) except as otherwise expressly permitted hereby, pay any dividends, distributions or other payments with respect to any Investment Property or any Partnership/LLC Interests directly to the Administrative Agent.
(c) Unless an Event of Default shall have occurred and be continuing and the Administrative Agent shall have given notice to the relevant Grantor of the Administrative Agent’s intent to exercise its corresponding rights pursuant to Section 5.2(b), each Grantor shall be permitted to receive all cash dividends, payments or other distributions made in respect of any Investment Property and any Partnership/LLC Interests, in each case to the extent permitted in the Credit Agreement, and to exercise all voting and other corporate, company and partnership rights with respect to any Investment Property and any Partnership/LLC Interests; provided that, no vote shall be cast or other corporate, company and partnership right exercised or other action taken which, in the Administrative Agent’s reasonable judgment, would impair the Collateral in any material respect or which would result in a Default or Event of Default under any provision of the Credit Agreement, this Agreement or any other Loan Document.
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SECTION 5.3Registration Rights.
(a) If the Administrative Agent shall determine that in order to exercise its right to sell any or all of the Collateral it is necessary or advisable to have such Collateral registered under the provisions of the Securities Act (any such Collateral, the “Restricted Securities Collateral”), the relevant Grantor will cause each applicable Issuer (and the officers and directors thereof) to (i) execute and deliver all such instruments and documents, and do or cause to be done all such other acts as may be, in the opinion of the Administrative Agent, necessary or advisable to register such Restricted Securities Collateral, or that portion thereof to be sold, under the provisions of the Securities Act, (ii) use its commercially reasonable efforts to cause the registration statement relating thereto to become effective and to remain effective for a period of one year from the date of the first public offering of such Restricted Securities Collateral, or that portion thereof to be sold, and (iii) make all amendments thereto and/or to the related prospectus which, in the opinion of the Administrative Agent, are necessary or advisable, all in conformity with the requirements of the Securities Act and the rules and regulations of the Securities and Exchange Commission applicable thereto. Each Grantor agrees to cause each applicable Issuer (and the officers and directors thereof) to comply with the provisions of the securities or “Blue Sky” laws of any and all jurisdictions which the Administrative Agent shall designate and to make available to its security holders, as soon as practicable, an earnings statement (which need not be audited) which will satisfy the provisions of Section II (a) of the Securities Act.
(b) Each Grantor recognizes that the Administrative Agent may be unable to effect a public sale of any or all the Restricted Securities Collateral, by reason of certain prohibitions contained in the Securities Act and applicable state securities laws or otherwise, and may be compelled to resort to one or more private sales thereof to a restricted group of purchasers which will be obliged to agree, among other things, to acquire such securities for their own account for investment and not with a view to the distribution or resale thereof. Each Grantor acknowledges and agrees that any such private sale may result in prices and other terms less favorable than if such sale were a public sale and, notwithstanding such circumstances, agrees that any such private sale shall be deemed to have been made in a commercially reasonable manner. The Administrative Agent shall be under no obligation to delay a sale of any of the Restricted Securities Collateral for the period of time necessary to permit the Issuer thereof to register such securities for public sale under the Securities Act, or under applicable state securities laws, even if such Issuer would agree to do so.
(c) Each Grantor agrees to use its commercially reasonable efforts to do or cause to be done all such other acts as may be necessary to make such sale or sales of all or any portion of the Restricted Securities Collateral valid and binding and in compliance with any and all other Applicable Laws. Each Grantor further agrees that a breach of any of the covenants contained in thisSection 5.3 will cause irreparable injury to the Administrative Agent and the other Secured Parties, that the Administrative Agent and the other Secured Parties have no adequate remedy at law in respect of such breach and, as a consequence, that each and every covenant contained in thisSection 5.3 shall be specifically enforceable against such Grantor, and such Grantor hereby waives and agrees not to assert any defenses against an action for specific performance of such covenants except for a defense that no Event of Default has occurred under the Credit Agreement.
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SECTION 5.4Application of Proceeds. If an Event of Default shall have occurred and be continuing, at any time at the Administrative Agent’s election, the Administrative Agent may apply all or any part of the Collateral or any Proceeds of the Collateral in payment in whole or in part of the Obligations (after deducting all reasonable costs and expenses of every kind incurred in connection therewith or incidental to the care or safekeeping of any of the Collateral or in any way relating to the Collateral or the rights of the Administrative Agent and the other Secured Parties hereunder, including, without limitation, reasonable attorneys’ fees and disbursements) in accordance withSection 11.4 of the Credit Agreement. Only after (i) the payment by the Administrative Agent of any other amount required by any provision of Applicable Law, including, without limitation, Section 9-610 and Section 9-615 of the DCC and (ii) the payment in full of the Obligations and the termination of the Commitments, shall the Administrative Agent account for the surplus, if any, to any Grantor, or to whomever may be lawfully entitled to receive the same (if such Person is not a Grantor).
SECTION 5.5Waiver, Deficiency. Each Grantor hereby waives, to the extent permitted by Applicable Law, all rights of redemption, appraisement, valuation, stay, extension or moratorium now or hereafter in force under any Applicable Law in order to prevent or delay the enforcement of this Agreement or the absolute sale of the Collateral or any portion thereof. Each Grantor shall remain liable for any deficiency if the proceeds of any sale or other disposition of the Collateral are insufficient to pay its Obligations and the fees and disbursements of any attorneys employed by the Administrative Agent or any other Secured Party to collect such deficiency.
ARTICLE VI
THE ADMINISTRATIVE AGENT
SECTION 6.1Administrative Agent’s Appointment as Attorney-In-Fact.
(a) Each Grantor hereby irrevocably constitutes and appoints the Administrative Agent and any officer or agent thereof, with full power of substitution, as its true and lawful attorney-in-fact with full irrevocable power and authority in the place and stead of such Grantor and in the name of such Grantor or in its own name, for the purpose of carrying out the terms of this Agreement, effective upon the occurrence and during the continuation of an Event of Default, to take any and all appropriate action and to execute any and all documents and instruments which may be necessary or desirable to accomplish the purposes of this Agreement, and, without limiting the generality of the foregoing, each Grantor hereby gives the Administrative Agent the power and right, on behalf of such Grantor, without notice to or assent by such Grantor, to do any or all of the following upon the occurrence and during the continuation of an Event of Default:
(i) in the name of such Grantor or its own name, or otherwise, take possession of and indorse and collect any checks, drafts, notes, acceptances or other
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instruments for the payment of moneys due under any Account subject to a Security Interest or with respect to any other Collateral and file any claim or take any other action or proceeding in any court of law or equity or otherwise deemed appropriate by the Administrative Agent for the purpose of collecting any and all such moneys due under any Account subject to a Security Interest or with respect to any other Collateral whenever payable;
(ii) payor discharge taxes and Liens levied or placed on or threatened against the Collateral, effect any repairs or any insurance called for by the terms of this Agreement and pay all or any part of the premiums therefor and the costs thereof;
(iii) execute, in connection with any sale provided for in this Agreement, any endorsements, assignments or other instruments of conveyance or transfer with respect to the Collateral; and
(iv) (A) direct any party liable for any payment under any of the Collateral to make payment of any and all moneys due or to become due thereunder directly to the Administrative Agent or as the Administrative Agent shall direct; (B) ask or demand for, collect, and receive payment of and receipt for, any and all moneys, claims and other amounts due or to become due at any time in respect of or arising out of any Collateral; (C) sign and indorse any invoices, freight or express bills, bills of lading, storage or warehouse receipts, drafts against debtors, assignments, verifications, notices and other documents in connection with any of the Collateral; (D) commence and prosecute any suits, actions or proceedings at law or in equity in any court of competent jurisdiction to collect the Collateral or any portion thereof and to enforce any other right in respect of any Collateral; (E) defend any suit, action or proceeding brought against such Grantor with respect to any Collateral; (F) settle, compromise or adjust any such suit, action or proceeding and, in connection therewith, give such discharges or releases as the Administrative Agent may deem appropriate; and (G) generally, sell, transfer, pledge and make any agreement with respect to or otherwise deal with any of the Collateral as fully and completely as though the Administrative Agent were the absolute owner thereof for all purposes, and do, at the Administrative Agent’s option and such Grantor’s expense, at any time, or from time to time, all acts and things which the Administrative Agent deems necessary to protect, preserve or realize upon the Collateral and the Security Interests of the Secured Parties therein and to effect the intent of this Agreement, all as fully and effectively as such Grantor might do.
(b) If any Grantor fails to perform or comply with any of its agreements contained herein, the Administrative Agent, at its option, but without any obligation so to do, may perform or comply, or otherwise cause performance or compliance, with such agreement in accordance with the provisions ofSection 6.1 (a).
(c) The expenses of the Administrative Agent incurred in connection with actions taken pursuant to the terms of this Agreement, together with interest thereon at a rate per annum equal to the highest rate per annum at which interest would then be payable on any category of past due Base Rate Loans under the Credit Agreement, from the date of payment by the Administrative Agent to the date reimbursed by the relevant Grantor, shall be payable by such Grantor to the Administrative Agent on demand.
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(d) Each Grantor hereby ratifies all that said attorneys shall lawfully do or cause to be done by virtue hereof in accordance withSection 6.1 (a). All powers, authorizations and agencies contained in this Agreement are coupled with an interest and are irrevocable until this Agreement is terminated and the Security Interests created hereby are released.
SECTION 6.2Duty of Administrative Agent. The Administrative Agent’s sole duty with respect to the custody, safekeeping and physical preservation of the Collateral in its possession, under Section 9-207 of the UCC or otherwise, shall be to deal with it in the same manner as the Administrative Agent deals with similar property for its own account. Neither the Administrative Agent, any other Secured Party nor any of their respective officers, directors, employees or agents shall be liable for failure to demand, collect or realize upon any of the Collateral or for any delay in doing so or shall be under any obligation to sell or otherwise dispose of any Collateral upon the request of any Grantor or any other Person or to take any other action whatsoever with regard to the Collateral or any part thereof. The powers conferred on the Administrative Agent and the other Secured Parties hereunder are solely to protect the interests of the Administrative Agent and the other Secured Parties in the Collateral and shall not impose any duty upon the Administrative Agent or any other Secured Party to exercise any such powers. The Administrative Agent and the other Secured Parties shall be accountable only for amounts that they actually receive as a result of the exercise of such powers, and neither they nor any of their officers, directors, employees or agents shall be responsible to any Grantor for any act or failure to act hereunder, except for their own gross negligence or willful misconduct.
SECTION 6.3Authority of Administrative Agent. Each Grantor acknowledges that the rights and responsibilities of the Administrative Agent under this Agreement with respect to any action taken by the Administrative Agent or the exercise or non-exercise by the Administrative Agent of any option, voting right, request, judgment or other right or remedy provided for herein or resulting or arising out of this Agreement shall, as between the Administrative Agent and the Lenders, be governed by the Credit Agreement and by such other agreements with respect thereto as may exist from time to time among them, but, as between the Administrative Agent and the Grantors, the Administrative Agent shall be conclusively presumed to be acting as agent for the Secured Parties with full and valid authority so to act or refrain from acting, and no Grantor shall be under any obligation, or entitlement to make any inquiry respecting such authority.
ARTICLE VII
MISCELLANEOUS
SECTION 7.1Notices. All notices and communications hereunder shall be given to the addresses and otherwise made in accordance withSection 13.1 of the Credit Agreement; provided that notices and communications to the Grantors shall be directed to the Grantors, at the address of the Borrower set forth inSection 13.1 of the Credit Agreement.
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SECTION 7.2Amendments, Waivers and Consents. None of the terms or provisions of this Agreement may be amended, supplemented or otherwise modified, nor may they be waived, nor may any consent be given, except in accordance with Section 13.2 of the Credit Agreement.
SECTION 7.3Expenses, Indemnification, Waiver of Consequential Damages, etc.
(a) The Grantors, jointly and severally, shall pay all out-of-pocket expenses incurred by the Administrative Agent and each other Secured Party to the extent the Borrower would be required to do so pursuant toSection 13.3 of the Credit Agreement.
(b) The Grantors, jointly and severally, shall pay and shall indemnify the Secured Parties against Indemnified Taxes and Other Taxes to the extent the Borrower would be required to do so pursuant toSection 4.11 of the Credit Agreement.
(c) The Grantors, jointly and severally, shall indemnify each Indemnitee to the extent the Borrower would be required to do so pursuant toSection 13.3 of the Credit Agreement.
(d) Notwithstanding anything to the contrary contained in this Agreement, to the fullest extent permitted by Applicable Law, each Grantor shall not assert, and hereby waives, any claim against any Indemnitee, on any theory of liability, for special, indirect, consequential or punitive damages (as opposed to direct or actual damages) arising out of, in connection with, or as a result of, this Agreement, any other Loan Document, any Hedging Agreement or any agreement or instrument contemplated hereby, the transactions contemplated hereby or thereby, any Extension of Credit or the use of the proceeds thereof.
(e) No Indemnitee referred to in thisSection 7.3 shall be liable for any damages arising from the use by unintended recipients of any information or other materials distributed by it through telecommunications, electronic or other information transmission systems in connection with this Agreement, any other Loan Document, any Hedging Agreement or the transactions contemplated hereby or thereby.
(f) All amounts due under thisSection 7.3 shall be payable promptly after demand therefor.
SECTION 7.4Right of Set Off. If an Event of Default shall have occurred and be continuing, each Secured Party and each of its respective Affiliates is hereby authorized at any time and from time to time, to the fullest extent permitted by Applicable Law, to set off and apply any and all deposits (general or special, time or demand, provisional or final, in whatever currency) at any time held and other obligations (in whatever currency) at any time owing by such Secured Party or any such Affiliate to or for the credit or the account of such Grantor against any and all of the obligations of such Grantor now or hereafter existing under this Agreement or any other Loan Document to such Secured Party irrespective of whether or not such Secured Party shall have made any demand under this Agreement or any other Loan Document and although such obligations of such Grantor may be contingent or unmatured or are owed to a branch or office of such Secured Party different from the branch or office holding such deposit or obligated on such indebtedness. The rights of each Secured Party and its respective
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Affiliates under this Section are in addition to other rights and remedies (including other rights of set off) that such Secured Party or its respective Affiliates may have. Each Secured Party agrees to notify such Grantor and the Administrative Agent promptly after any such set off and application; provided that the failure to give such notice shall not affect the validity of such set off and application.
SECTION 7.5Governing Law; Jurisdiction; Venue; Service of Process.
(a)Governing Law. This Agreement shall be governed by, and construed in accordance with, the laws of the State of New York without reference to the conflicts of law principles thereof.
(b)Submission to Jurisdiction. Each Grantor irrevocably and unconditionally submits, for itself and its property, to the nonexclusive jurisdiction of the state and federal courts of the State of New York sitting in New York County and the United States District Court of the Southern District and any appellate court thereof, in any action or proceeding arising out of or relating to this Agreement or any other Loan Document, or for recognition or enforcement of any judgment, and each of the parties hereto irrevocably and unconditionally agrees that all claims in respect of any such action or proceeding may be heard and determined in such New York State court or, to the fullest extent permitted by Applicable Law, in such Federal court. Each of the parties hereto agrees that a final judgment in any such action or proceeding shall be conclusive and may be enforced in other jurisdictions by suit on the judgment or in any other manner provided by Applicable Law. Nothing in this Agreement or in any other Loan Document shall affect any right that the Administrative Agent or any other Secured Party may otherwise have to bring any action or proceeding relating to this Agreement or any other Loan Document against any Grantor or its properties in the courts of any jurisdiction.
(c)Waiver of Venue. Each Grantor irrevocably and unconditionally waives, to the fullest extent permitted by Applicable Law, any objection that it may now or hereafter have to the laying of venue of any action or proceeding arising out of or relating to this Agreement or any other Loan Document in any court referred to in paragraph (b) of this Section. Each of the parties hereto hereby irrevocably waives, to the fullest extent permitted by Applicable Law, the defense of an inconvenient forum to the maintenance of such action or proceeding in any such court.
(d)Service of Process. Each party hereto irrevocably consents to service of process in the manner provided for notices in Section 13.1 of the Credit Agreement. Nothing in this Agreement will affect the right of any party hereto to serve process in any other manner permitted by Applicable Law.
(e)Appointment of the Borrower as Agent for the Grantors. Each Grantor hereby irrevocably appoints and authorizes the Borrower to act as its agent for service of process and notices required to be delivered under this Agreement or under the other Loan Documents, it being understood and agreed that receipt by the Borrower of any summons, notice or other similar item shall be deemed effective receipt by each Grantor and its Subsidiaries.
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SECTION 7.6Waiver of Jury Trial. EACH PARTY HERETO HEREBY IRREVOCABLY WAIVES, TO THE FULLEST EXTENT PERMITTED BY APPLICABLE LAW, ANY RIGHT IT MAY HAVE TO A TRIAL BY JURY IN ANY LEGAL PROCEEDING DIRECTLY OR INDIRECTLY ARISING OUT OF OR RELATING TO THIS AGREEMENT OR ANY OTHER LOAN DOCUMENT OR THE TRANSACTIONS CONTEMPLATED HEREBY OR THEREBY (WHETHER BASED ON CONTRACT, TORT OR ANY OTHER THEORY). EACH PARTY HERETO (A) CERTIFIES THAT NO REPRESENTATIVE, AGENT OR ATTORNEY OF ANY OTHER PERSON HAS REPRESENTED, EXPRESSLY OR OTHERWISE, THAT SUCH OTHER PERSON WOULD NOT, IN THE EVENT OF LITIGATION, SEEK TO ENFORCE THE FOREGOING WAIVER AND (B) ACKNOWLEDGES THAT IT AND THE OTHER PARTIES HERETO HAVE BEEN INDUCED TO ENTER INTO THIS AGREEMENT AND THE OTHER LOAN DOCUMENTS BY, AMONG OTHER THINGS, THE MUTUAL WAIVERS AND CERTIFICATIONS IN THIS SECTION.
SECTION 7.7Injunctive Relief.
(a) Each Grantor recognizes that, in the event such Grantor fails to perform, observe or discharge any of its obligations or liabilities under this Agreement or any other Loan Document, any remedy of law may prove to be inadequate relief to the Administrative Agent and the other Secured Parties. Therefore, each Grantor agrees that the Administrative Agent and the other Secured Parties, at the option of the Administrative Agent and the other Secured Parties, shall be entitled to temporary and permanent injunctive relief in any such case without the necessity of proving actual damages.
(b) The Administrative Agent, the other Secured Parties and each Grantor hereby agree that no such Person shall have a remedy of punitive or exemplary damages against any other party to a Loan Document and each such Person hereby waives any right or claim to punitive or exemplary damages that they may now have or may arise in the future in connection with any Dispute, whether such Dispute is resolved through arbitration or judicially.
SECTION 7.8No Waiver by Course of Conduct, Cumulative Remedies. Neither the Administrative Agent nor any other Secured Party shall by any act (except by a written instrument pursuant toSection 7.2), delay, indulgence, omission or otherwise be deemed to have waived any right or remedy hereunder or to have acquiesced in any Default or Event of Default. No delay or failure to take action on the part of the Administrative Agent or any other Secured Party in exercising any right, power or privilege hereunder shall operate as a waiver thereof, nor shall any single or partial exercise of any such right, power or privilege hereunder shall preclude any other or further exercise thereof or the exercise of any other right, power or privilege. A waiver by the Administrative Agent or any other Secured Party of any right or remedy hereunder on anyone occasion shall not be construed as a bar to any right or remedy which the Administrative Agent or such other Secured Party would otherwise have on any future occasion. The enumeration of the rights and remedies of the Administrative Agent and the other Secured Parties set forth in this Agreement is not intended to be exhaustive and the exercise by the Administrative Agent and the other Secured Parties of any right or remedy shall not preclude the exercise of any other rights or remedies, all of which shall be cumulative, and shall be in addition to any other right or remedy given hereunder or under the other Loan Documents or that may now or hereafter exist at law or in equity or by suit or otherwise.
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SECTION 7.9Successors and Assigns. The provisions of this Agreement shall be binding upon and inure to the benefit of the parties hereto and their respective successors and permitted assigns; except that no Grantor may assign or otherwise transfer any of its rights or obligations under this Agreement without the prior written consent of the Administrative Agent and the other Lenders (except as otherwise provided by the Credit Agreement).
SECTION 7.10Survival of Indemnities. Notwithstanding any termination of this Agreement, the indemnities to which the Administrative Agent and the other Secured Parties are entitled under the provisions ofSection 7.3 and any other provision of this Agreement and the other Loan Documents shall continue in full force and effect and shall protect the Administrative Agent and the other Secured Parties against events arising after such termination as well as before.
SECTION 7.11Titles and Captions. Titles and captions of Articles, Sections and subsections in, and the table of contents of, this Agreement are for convenience only, and neither limit nor amplify the provisions of this Agreement.
SECTION 7.12Severability of Provisions. Any provision of this Agreement or any other Loan Document which is prohibited or unenforceable in any jurisdiction shall, as to such jurisdiction, be ineffective only to the extent of such prohibition or unenforceability without invalidating the remainder of such provision or the remaining provisions hereof or thereof or affecting the validity or enforceability of such provision in any other jurisdiction.
SECTION 7.13Counterparts. This Agreement may be executed in any number of counterparts and by different parties hereto in separate counterparts, each of which when so executed shall be deemed to be an original and shall be binding upon all parties, their successors and assigns, and all of which taken together shall constitute one and the same agreement. Delivery of an executed counterpart of a signature page to this Agreement or any document or instrument delivered in connection herewith by facsimile or other electronic transmission shall be effective as delivery of a manually executed counterpart of this Agreement or such other document or instrument, as applicable.
SECTION 7.14Integration. This Agreement, together with the other Loan Documents, comprises the complete and integrated agreement of the parties on the subject matter hereof and thereof and supersedes all prior agreements, written or oral, on such subject matter. In the event of any conflict between the provisions of this Agreement and those of any other Loan Document, the provisions of the Credit Agreement shall control; provided that the inclusion of supplemental rights or remedies in favor of the Administrative Agent or the other Secured Parties in any other Loan Document shall not be deemed a conflict with this Agreement.
SECTION 7.15Advice of Counsel; No Strict Construction. Each of the parties represents to each other party hereto that it has discussed this Agreement with its counsel. The parties hereto have participated jointly in the negotiation and drafting of this Agreement. In the event an ambiguity or question of intent or interpretation arises, this Agreement shall be
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construed as if drafted jointly by the parties hereto and no presumption or burden of proof shall arise favoring or disfavoring any party by virtue of the authorship of any provisions of this Agreement.
SECTION 7.16Acknowledgements.
(a) Each Grantor hereby acknowledges that:
(i) it has been advised by counsel in the negotiation, execution and delivery of this Agreement and the other Loan Documents to which it is a party;
(ii) it has received a copy of the Credit Agreement and has reviewed and understands same;
(iii) neither the Administrative Agent nor any other Secured Party has any fiduciary relationship with or duty to any Grantor arising out of or in connection with this Agreement or any of the other Loan Documents, and the relationship between the Grantors, on the one hand, and the Administrative Agent and the other Secured Parties, on the other hand, in connection herewith or therewith is solely that of debtor and creditor; and
(iv) no joint venture is created hereby or by the other Loan Documents or otherwise exists by virtue of the transactions contemplated hereby or thereby among the Secured Parties or among the Grantors and the Secured Parties.
(b) Each Issuer party to this Agreement acknowledges receipt of a copy of this Agreement and agrees to be bound thereby and to comply with the terms thereof insofar as such terms are applicable to it. Each Issuer agrees to provide such notices to the Administrative Agent as may be necessary to give full effect to the provisions of this Agreement.
SECTION 7.17Releases.
(a) At such time as the Obligations shall have been paid in full in cash and the Commitments have been terminated, the Collateral shall be released from the Liens created hereby, and this Agreement and all obligations (other than those expressly stated to survive such termination) of the Administrative Agent and each Grantor hereunder shall terminate, all without delivery of any instrument or performance of any act by any party, and all rights to the Collateral shall revert to the Grantors.
(b) If any of the Collateral shall be sold, transferred or otherwise disposed of by any Grantor in a transaction permitted by the Credit Agreement, then the Administrative Agent, at the request and sole expense of such Grantor, shall execute and deliver to such Grantor all releases or other documents reasonably necessary or desirable to evidence the release of the Liens created hereby on such Collateral. In the event that all the Capital Stock of any Grantor shall be sold, transferred or otherwise disposed of in a transaction permitted by the Credit Agreement, then, at the request of the Borrower and at the expense of the Grantors, such Grantor shall be released from its obligations hereunder; provided that the Borrower shall have delivered to the Administrative Agent, at least ten (l0) Business Days prior to the date of the proposed
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release, a written request for release identifying the relevant Grantor and a description of the sale or other disposition in reasonable detail, together with a certification by the Borrower stating that such transaction is in compliance with the Credit Agreement and the other Loan Documents.
SECTION 7.18Additional Grantors. Each Subsidiary of the Borrower that is required to become a party to this Agreement pursuant to Section 8.11 of the Credit Agreement shall become a Grantor for all purposes of this Agreement upon execution and delivery by such Subsidiary of a joinder agreement in form and substance reasonably satisfactory to the Administrative Agent.
SECTION 7.19All Powers Coupled with Interest. All powers of attorney and other authorizations granted to the Secured Parties, the Administrative Agent and any Persons designated by the Administrative Agent or any other Secured Party pursuant to any provisions of this Agreement or any of the other Loan Documents shall be deemed coupled with an interest and shall be irrevocable so long as any of the Obligations remain unpaid or unsatisfied, any of the Commitments remain in effect or the Credit Facility has not been terminated.
[Signature Pages Follow]
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IN WITNESS WHEREOF, the parties hereto have caused this Collateral Agreement to be executed under seal by their duly authorized officers, all as of the day and year first written above.
BOWATER INCORPORATED, as Grantor | ||||
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BOWATER MISSISSIPPI HOLDINGS INC., as Grantor | ||||
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BOWATER MISSISSIPPI LLC, as Grantor | ||||
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BOWATER AMERICA INC., as Grantor | ||||
By: |
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BOWATER NUWAY INC., as Grantor | ||||
By: |
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BOWATER NUWAY MID-STATES INC., as Grantor | ||||
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BOWATER ALABAMA INC., as Grantor | ||||
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Each of the undersigned Issuers acknowledge receipt of a copy of this Collateral Agreement and agrees to honor any instructions received from the Administrative Agent in accordance withSection 5.2(b)(iv) of this Collateral Agreement.
BOWATER CANADA FINANCE CORPORATION, as Issuer | ||||
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BOWATER CANADIAN HOLDINGS INCORPORATED, as Issuer | ||||
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BOWATER PULP AND PAPER CANADA HOLDINGS LIMITED PARTNERSHIP, as Issuer | ||||
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BOWATER CANADIAN LIMITED, as Issuer | ||||
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[BOWATER-KOREA CO., LTD, as Issuer] | ||||
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BOWATER MISSISSIPPI HOLDINGS INC., as Issuer | ||||
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BOWATER SOUTH AMERICAN HOLDINGS | ||||
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BOWATER NEWSPRINT SOUTH LLC, as Issuer | ||||
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BOWATER AMERICA INC., as Issuer | ||||
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LAKE SUPERIOR FOREST PRODUCTS INC., as Issuer | ||||
By: |
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Title: |
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BOWATER ALABAMA INC., as Issuer | ||||
By: |
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COOSA PINES GOLF CLUB, INCORPORATED, as Issuer | ||||
By: |
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BOWATER VENTURES INC., as Issuer | ||||
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[Signature Pages Continue]
WACHOVIA BANK, NATIONAL ASSOCIATION as Administrative Agent | ||
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SCHEDULE 3.6
to
Collateral Agreement
Exact Legal Name; Jurisdiction of Organization;; Registered Office; Mailing Address; Chief Executive
Office and other Locations
SCHEDULE 3.9
to
Collateral Agreement
Deposit Accounts
Grantor | Financial Institution | Account Number | Address of Financial Institution | Account Purpose | ||||
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EXHIBIT J
to
Credit Agreement
dated as of May 31, 2006
by and among
Bowater Canadian Forest Products Inc.,
as Borrower
Bowater Incorporated,
as Guarantor,
the Lenders party thereto,
as Lenders,
The Bank of Nova Scotia
as Administrative Agent and Issuing Lender
and
Bank of Montreal
as Syndication Agent and Swingline Lender
CANADIAN INTERCOMPANY SUBORDINATION AGREEMENT
EXECUTION COPY
CANADIAN INTERCOMPANY SUBORDINATION AGREEMENT
CANADIAN INTERCOMPANY SUBORDINATION AGREEMENT (this “Agreement”), dated as of , 2006, by and among BOWATER INCORPORATED, a Delaware corporation (the “U.S. Borrower”), BOWATER CANADIAN FOREST PRODUCTS INC., a Canadian corporation (the “Canadian Borrower”), each Canadian Guarantor party hereto by execution of joinder agreement in the form attached hereto asExhibit A (collectively the “Canadian Guarantors” and, together with the U.S. Borrower and the Canadian Borrower and the Canadian Borrower, the “Canadian Credit Parties”), certain Subsidiaries of the U.S. Borrower identified on the signature pages hereto as a U.S. Subsidiary Guarantor (and each U.S. Subsidiary Guarantor party hereto by execution of a joinder agreement in the form attached hereto asExhibit A) (collectively theU.S. Subsidiary Guarantors and, together with the U.S. Borrower, theU.S. Credit Parties), certain subsidiaries of the U.S. Borrower that are not U.S. Credit Parties or Canadian Credit Parties and that are identified on the signature pages hereto as a Non-Credit Party (and each Non-Credit Party party hereto by execution of a joinder agreement in the form attached hereto asExhibit A) (collectively, the “Non-Credit Parties”), THE BANK OF NOVA SCOTIA, as Administrative Agent (in such capacity, the “Administrative Agent”) for the ratable benefit of the Secured Parties.
STATEMENT OF PURPOSE
Pursuant to the Credit Agreement dated of even date herewith by and among the Canadian Borrower, as Guarantor, the Lenders party thereto and the Administrative Agent and Bank of Montreal, as Syndication Agent and Swingline Lender (as amended, restated, supplemented or otherwise modified from time to time, the “Credit Agreement”), the Lenders have agreed to make Extensions of Credit to the Canadian Borrower upon the terms and subject to the conditions set forth therein.
Pursuant to the terms of (i) the Credit Agreement and (ii) any subsidiary Guaranty Agreement which may be made by any of the Canadian Guarantors in favor of the Administrative Agent for the ratable benefit of the Secured Parties (as amended, restated, supplemented or otherwise modified from time to time, the “Subsidiary Guaranty Agreement”), the Canadian Guarantors have guaranteed, or will guarantee the payment and performance of the Obligations of the Canadian Borrower under the Credit Agreement.
It is a condition precedent to the obligation of the Lenders to make their respective Extensions of Credit to the Canadian Borrower under the Credit Agreement that the Canadian Credit Parties, the U.S. Credit Parties and the Non-Credit Parties shall have executed and delivered this Agreement to the Administrative Agent, for the ratable benefit of itself and the other Secured Parties.
NOW, THEREFORE, for good and valuable consideration, the receipt and sufficiency of which are hereby acknowledged by the parties hereto, and to induce the Administrative Agent and the Lenders to enter into the Credit Agreement and to induce the Lenders to make their respective Extensions of Credit to the Canadian Borrower thereunder, each Canadian Credit Party, each U.S. Credit Party and each Non-Credit Party hereby agrees with the Administrative Agent, for the ratable benefit of itself and the other Lenders, as follows:
Section 1.Definitions. Terms defined in the Credit Agreement are used herein as defined therein. In addition, as used herein: All references herein to the Administrative Agent, the Lenders, the U.S. Borrower, the Canadian Borrower, the Canadian Borrower, the U.S. Subsidiary Guarantors, the Canadian Guarantors, the U.S. Credit Parties, the Canadian Credit Parties and the Non Credit Parties shall be deemed to include such Person’s successors or assigns.
“Demand Indebtedness” shall mean, any intercompany indebtedness or intercompany accounts payable or other intercompany obligations of any Non-Credit Party or any U.S. Credit Party owing to any Canadian Credit Party (other than any intercompany indebtedness or intercompany accounts payable or other intercompany obligations described on Schedule A attached hereto).
“Demand Indebtedness Document” shall mean individually and “Demand Indebtedness Documents” shall mean collectively, any credit agreement, promissory note, indenture or other agreement or instrument evidencing any Demand Indebtedness.
“Senior Indebtedness” shall mean the following indebtedness and obligations, whether now in existence or hereafter arising:
(a) the principal of and interest on (including interest accruing after the filing of any bankruptcy or similar petition) the Loans,
(b) the L/C Obligations,
(c) all Hedging Obligations,
(d) all other fees and commissions (including reasonable attorneys’ fees), charges, indebtedness, loans, liabilities, financial accommodations, obligations, covenants and duties owing by the U.S. Borrower or any of its Subsidiaries (including each Canadian Credit Party) to the Lenders or the Administrative Agent, in each case under any Loan Document, with respect to any Loan or Letter of Credit, of every kind, nature and description, direct or indirect, absolute or contingent, due or to become due, contractual or tortious, liquidated or unliquidated, and whether or not evidenced by any note.
(e) all interest accruing after the commencement of any proceedings referred to in Section 2.0lCb) below, whether or not such interest is an allowed claim in such proceeding.
“Subordinated Indebtedness” shall mean any intercompany indebtedness or intercompany accounts payable or other intercompany obligations of any Canadian Credit Party owing to any NonCredit Party other than the intercompany indebtedness or intercompany accounts payable or other intercompany obligations in existence as of the Closing Date and incurred pursuant to the Bowater-Calhoun Arrangement.
“Subordinated Indebtedness Document” shall mean individually and “Subordinated Indebtedness Documents” shall mean collectively, any credit agreement, promissory note, indenture or other agreement or instrument evidencing any Subordinated Indebtedness.
Section 2.Subordination and Demand.
2.01Subordination of Subordinated Indebtedness. Anything in any Subordinated Indebtedness Document to the contrary notwithstanding, each Non-Credit Party covenants and agrees that, to the extent and in the manner hereinafter set forth, all Subordinated Indebtedness held by such Non-Credit Party, and the payment from whatever source of the principal of, and interest and premium (if any) on, such Subordinated Indebtedness, are hereby expressly made subordinate and subject in right of payment to the prior payment in full in cash of all Senior Indebtedness and that:
(a) The holders of Senior Indebtedness shall (i) be entitled to receive permanent payment in full in cash of all amounts constituting Senior Indebtedness and (ii) terminate any obligation to extend credit under any Senior Indebtedness, before any Non-Credit Party is entitled to receive any payment on account of the Subordinated Indebtedness held by it (and unless and until all Senior Indebtedness has been so paid and such obligations terminated, each Non-Credit Party will not (i) ask, demand, sue for, take or receive from any Canadian Credit Party, by set-off or in any other manner, or (ii) seek any other remedy allowed at law or in equity against any Canadian Credit Party for breach of such Canadian Credit Party’s obligations under any Subordinated Indebtedness Document or otherwise); provided that, so long as at the time thereof and after giving effect thereto no Event of Default shall have occurred and be continuing, unremedied and unwaived, under the Credit Agreement, each Canadian Credit Party may make, and each Non-Credit Party shall be entitled to receive and retain, payments in respect of the Subordinated Indebtedness.
(b) In the event of any insolvency or bankruptcy proceedings, and any receivership, liquidation, reorganization or other similar proceedings in connection therewith, relative to any Canadian Credit Party or to its creditors, as such, or to its property, and in the event of any proceedings for voluntary liquidation, dissolution or other winding up of such Canadian Credit Party, whether or not involving insolvency or bankruptcy, then the holders of Senior Indebtedness shall (i) be entitled to receive permanent payment in full of all amounts constituting Senior Indebtedness and (ii) terminate any obligations to extend credit under such Senior Indebtedness, before a Non-Credit Party is entitled to receive, or make any demand for, any payment on account of the Subordinated Indebtedness, and to that end the holders of Senior Indebtedness shall be entitled to receive for application in payment thereof any payment or distribution of any kind or character, whether in cash or property or securities.
(c) If any payment or distribution of any character, whether in cash, securities or other property, in respect of any Subordinated Indebtedness shall (in contravention of these subordination provisions) be received by any Non-Credit Party before (i) all Senior Indebtedness shall have been permanently paid in full in cash and (ii) all obligations to
extend credit under such Senior Indebtedness have been terminated, such payment or distribution shall be held in trust for the benefit of, and shall be paid over or delivered to, the holders of Senior Indebtedness (or their representatives), and to holders of any other Indebtedness to which the Subordinated Indebtedness is similarly subordinated, ratably according to the respective aggregate amounts remaining unpaid thereon, to the extent necessary to pay all Senior Indebtedness, and all such other Indebtedness, in full.
2.02Subrogation. Subject to the permanent payment in full in cash of all Senior Indebtedness and the termination of all obligations to extend credit under such Senior Indebtedness, each Non-Credit Party shall be subrogated to the rights of the holders of such Senior Indebtedness to receive payments and distributions of cash, property and securities applicable to the Senior Indebtedness until the principal of, and interest on, the Subordinated Indebtedness held by such Non-Credit Party shall be paid in full in cash. For purposes of such subrogation, no payments or distributions to the holders of Senior Indebtedness of any cash, property or securities to which any Non-Credit Party would be entitled except for the provisions ofSection 2.01, and no payments over pursuant to the provisions of Section 2.01 to the holders of Senior Indebtedness by any Non-Credit Party, shall, as between any Canadian Credit Party, its creditors other than holders of Senior Indebtedness, and any Non-Credit Party, be deemed to be a payment or distribution by any Canadian Credit Party to or on account of the Senior Indebtedness.
2.03Provisions Solely to Define Relative Rights. The provisions of this Section 2 are and are intended solely for the purpose of defining the relative rights of the Non-Credit Parties on the one hand and the holders of Senior Indebtedness on the other hand. Nothing contained in this Section 2 or elsewhere in this Agreement is intended to or shall:
(a) impair, as among any Canadian Credit Party, its creditors (other than the holders of Senior Indebtedness) and any Non-Credit Party, the obligation of the Canadian Credit Parties to pay to the Non-Credit Parties the principal and interest on the Subordinated Indebtedness as and when the same shall become due and payable in accordance with its terms; or
(b) affect the relative rights against the Canadian Credit Parties of the Non-Credit Parties and creditors of the Canadian Credit Parties (other than the holders of Senior Indebtedness).
2.04No Waiver of Subordination Provisions. No right of the Administrative Agent or any holder of Senior Indebtedness to enforce subordination as herein provided shall at any time in any way be prejudiced or impaired by any act or failure to act on the part of any Canadian Credit Party or by any act or failure to act, in good faith, by the Administrative Agent or any holder of Senior Indebtedness, or by any non-compliance by any Canadian Credit Party with the terms, provisions and covenants of this Agreement, regardless of any knowledge thereof the Administrative Agent or any holder of Senior Indebtedness may have or be otherwise charged with.
Without in any way limiting the generality of the foregoing paragraph, the holders of Senior Indebtedness may, at any time and from time to time, without the consent of or notice to
the Non-Credit Parties, without incurring responsibility to the Non-Credit Parties and without impairing or releasing the subordination provided in thisSection 2 or the obligations hereunder of the Non-Credit Parties to the holders of Senior Indebtedness, do anyone or more of the following: (a) change the time, manner or place of payment of Senior Indebtedness, or otherwise modify or supplement in any respect any of the provisions of the Credit Agreement, any other Loan Document or any other instrument evidencing or relating to any of the Senior Indebtedness; (b) sell, exchange, release or otherwise deal with any property pledged, mortgaged or otherwise securing Senior Indebtedness; (c) release any Person liable in any manner for the collection of Senior Indebtedness; and (d) exercise or refrain from exercising any rights against any Canadian Credit Party and any other Person.
2.05Demand of Demand Indebtedness. Anything in any Demand Indebtedness Document to the contrary notwithstanding, each Canadian Credit Party, each U.S. Credit Party and each Non-Credit Party covenants and agrees that:
(a) upon (i) the occurrence and during the continuance of any Event of Default under clause (a), (b), (g), (i) or j) of Article XI of the Credit Agreement and (ii) the request of the Administrative Agent or the Required Agreement Lenders, each Canadian Credit Party shall demand payment immediately by each Non-Credit Party and each U.S. Credit Party of any Demand Indebtedness owed by such Non-Credit Party or such U.S. Credit Party to any Canadian Credit Party and each Non-Credit Party and each U.S. Credit Party shall pay immediately such Demand Indebtedness owed by such Non-Credit Party or such U.S. Credit Party to any Canadian Credit Party;
(b) if an Event of Default shall have occurred and be continuing, unremedied and unwaived, no Non-Credit Party nor any U.S. Credit Party will, unless and until all Demand Indebtedness has been so paid, (i) ask, demand, sue for, take or receive from any Canadian Credit Party, by set-off or in any other manner, or (ii) seek any other remedy allowed at law or in equity against any Canadian Credit Party for breach of such Canadian Credit Party’s obligations under any Demand Indebtedness Document or otherwise.
Section 3.Representations and Warranties. The U.S. Borrower, as to itself and each of the U.S. Credit Parties, the Canadian Credit Parties and the Non-Credit Parties, the Canadian Borrower, as to itself and each of the Canadina Credit Parties, and each Canadian Credit Party, each U.S. Credit Party and each Non-Credit Party, as to itself, represents and warrants to the Administrative Agent and each holder of Senior Indebtedness that:
3.01Existence. Each U.S. Credit Party, each Canadian Credit Party and each Non-Credit Party is an entity duly organized and validly existing under the laws of the jurisdiction set forth opposite its name onExhibit B hereto.
3.02No Breach. The execution, delivery and performance of this Agreement, and the transactions contemplated hereby, do not and will not, by the passage of time, the giving of notice or otherwise (i) require any Governmental Approval or violate any Applicable Law relating to any U.S. Credit Party, any Canadian Credit Party or any Non-Credit Party, (ii) conflict with, result in a breach of or constitute a default under the articles of incorporation, bylaws or other organizational documents of any U.S. Credit Party, any Canadian Credit Party or any Non-Credit
Party, (iii) conflict with, result in a breach of or constitute a default under any indenture, agreement or other instrument to which such Person is a party or by which any of its properties may be bound or any Governmental Approval relating to such Person, which could reasonably be expected to have a Material Adverse Effect, (iv) result in or require the creation or imposition of any Lien upon or with respect to any property now owned or hereafter acquired by such Person other than Liens arising under the Loan Documents or (v) require any consent or authorization of, filing with, or other act in respect of, an arbitrator or Governmental Authority and no consent of any other Person is required in connection with the execution, delivery, performance, validity or enforceability of this Agreement other than consents, authorizations, filings or other acts or consents for which the failure to obtain or make could not reasonably be expected to have a Material Adverse Effect.
3.03Action. Each U.S. Credit Party, each Canadian Credit Party and each Non-Credit Party has the right, power and authority and has taken all necessary corporate and other action to authorize the execution, delivery and performance of this Agreement in accordance with its terms. This Agreement has been duly executed and delivered by the duly authorized officers of each U.S. Credit Party, each Canadian Credit Party and each Non-Credit Party, and constitutes the legal, valid and binding obligation of such U.S. Credit Party, such Canadian Credit Party and such Non-Credit Party, enforceable in accordance with its terms, except as such enforceability may be limited by (i) bankruptcy, insolvency, reorganization, moratorium or similar state or federal laws from time to time in effect which affect the enforcement of creditors’ rights in general and (ii) the application of general principles of equity (regardless of whether such enforceability is considered in a proceeding in equity or at law).
3.04Approvals. No authorizations, approvals or consents of, and no filings or registrations with, any Governmental Authority are necessary for the execution, delivery or performance by any U.S. Credit Party, any Canadian Credit Party or any Non-Credit Party of this Agreement or for the legality, validity or enforceability hereof.
Section 4.Miscellaneous.
4.01Notices. All notices, requests, consents and demands hereunder shall be given to the addresses and otherwise made in accordance with Section 14.1 of the Credit Agreement; provided that notices and communications to the U.S. Credit Parties, the Canadian Credit Parties and the Non-Credit Parties shall be directed to the Credit Parties, the Canadian Credit Parties and the Non-Credit Parties at the address of the U.S. Borrower set forth in Section 14.1 of the Credit Agreement.
4.02No Waiver By Course of Conduct; Cumulative Remedies. Neither the Administrative Agent nor any holder of Senior Indebtedness shall by any act, delay, indulgence, omission or otherwise (except by a written instrument pursuant to Section 4.03) be deemed to have waived any right or remedy hereunder or to have acquiesced in any Default or Event of Default. No delay or failure to take action on the part of the Administrative Agent or any holder of Senior Indebtedness in exercising any right, power or privilege hereunder shall operate as a waiver thereof, nor shall any single or partial exercise of any such right, power or privilege hereunder preclude any other or further exercise thereof or the exercise of any other right, power or privilege. A waiver by the Administrative Agent or any holder of Senior Indebtedness of any
right or remedy hereunder on anyone occasion shall not be construed as a bar to any right or remedy which the Administrative Agent or such holder of Senior Indebtedness would otherwise have on any future occasion. The enumeration of the rights and remedies of the Administrative Agent and the holders of Senior Indebtedness set forth in this Agreement is not intended to be exhaustive and the exercise by the Administrative Agent and the holders of Senior Indebtedness of any right or remedy shall not preclude the exercise of any other rights or remedies, all of which shall be cumulative, and shall be in addition to any other right or remedy given hereunder or under the other Loan Documents or that may now or hereafter exist at law or in equity or by suit or otherwise
4.02Amendments, Waivers and Consents. None of the terms or provisions of this Agreement may be amended, supplemented or otherwise modified, nor may they be waived, nor may any consent be given, except in accordance withSection 14.2 of the Credit Agreement.
4.04Successors and Assigns. The provisions of this Agreement shall be binding upon and inure to the benefit of the parties hereto and their respective successors and assigns; except that a U.S. Credit Party, a Canadian Credit Party or a Non-Credit Party may not assign or otherwise transfer any of its rights or obligations under this Agreement without the prior written consent of the Administrative Agent and the Lenders (in accordance with the Credit Agreement).
4.05Counterparts. This Agreement may be executed in any number of counterparts and by different parties hereto in separate counterparts, each of which when so executed shall be deemed to be an original and shall be binding upon all parties, their successors and assigns, and all of which taken together shall constitute one and the same agreement. Delivery of an executed counterpart of a signature page to this Agreement or any document or instrument delivered in connection herewith by facsimile or other electronic transmission shall be effective as delivery of a manually executed counterpart of this Agreement or such other document or instrument, as applicable.
4.06Integration. This Agreement, together with the other Loan Documents, comprises the complete and integrated agreement of the parties on the subject matter hereof and thereof and supersedes all prior agreements, written or oral, on such subject matter. In the event of any conflict between the provisions of this Agreement and those of any other Loan Document, the provisions of the Credit Agreement shall control; provided that the inclusion of supplemental rights or remedies in favor of the Administrative Agent or the holders of Senior Indebtedness in any other Loan Document shall not be deemed a conflict with this Agreement.
4.07Governing Law; Jurisdiction; Etc.
(a)Governing Law. This Agreement shall be governed by, and construed in accordance with, the law of the State of New York without reference to the conflicts of law principles thereof.
(b)Submission to Jurisdiction. Each U.S. Credit Party, each Canadian Credit Party and each Non-Credit Party irrevocably and unconditionally submits, for itself and its property, to the nonexclusive jurisdiction of the courts of (i) the State of New York sitting in New York County and of the United States District Court of the Southern District of New York, and (iii) the Province of Ontario
any appellate court from any thereof, in any action or proceeding arising out of or relating to this Agreement or any other Loan Document, or for recognition or enforcement of any judgment, and each of the parties hereto irrevocably and unconditionally agrees that all claims in respect of any such action or proceeding may be heard and determined in such New York State court or Ontario Court, to the fullest extent permitted by Applicable Law, in such Federal court. Each of the parties hereto agrees that a final judgment in any such action or proceeding shall be conclusive and may be enforced in other jurisdictions by suit on the judgment or in any other manner provided by Applicable Law. Nothing in this Agreement or in any other Loan Document shall affect any right that the Administrative Agent or any holder of Senior Indebtedness may otherwise have to bring any action or proceeding relating to this Agreement or any other Loan Document against any U.S. Credit Party, any Canadian Credit Party or any Non-Credit Party or its properties in the courts of any jurisdiction.
(c)Waiver of Venue. Each U.S. Credit Party, each Canadian Credit Party and each Non-Credit Party irrevocably and unconditionally waives, to the fullest extent permitted by Applicable Law, any objection that it may now or hereafter have to the laying of venue of any action or proceeding arising out of or relating to this Agreement or any other Loan Document in any court referred to in paragraph (b) of this Section. Each of the parties hereto hereby irrevocably waives, to the fullest extent permitted by Applicable Law, the defense of an inconvenient forum to the maintenance of such action or proceeding in any such court.
(d)Service of Process. Each party hereto irrevocably consents to service of process in the manner provided for notices in Section 14.1 of the Credit Agreement. Nothing in this Agreement will affect the right of any party hereto to serve process in any other manner permitted by Applicable Law.
(e)Appointment of the U.S. Borrower as Agent for each U.S. Credit Party, each Canadian Credit Party and each Non-Credit Party. Each U.S. Credit Party, each Canadian Credit Party and each Non-Credit Party hereby irrevocably appoints and authorizes the U.S. Borrower to act as its agent for service of process and notices required to be delivered under this Agreement or under the other Loan Documents, it being understood and agreed that receipt by the U.S. Borrower of any summons, notice or other similar item shall be deemed effective receipt by each U.S. Credit Party and its Subsidiaries, each Canadian Credit Party and its Subsidiaries and each Non-Credit Party and its Subsidiaries.
4.09WAIVER OF JURY TRIAL. EACH PARTY HERETO HEREBY IRREVOCABLY WAIVES, TO THE FULLEST EXTENT PERMITTED BY APPLICABLE LAW, ANY RIGHT IT MAY HAVE TO A TRIAL BY JURY IN ANY LEGAL PROCEEDING DIRECTLY OR INDIRECTLY ARISING OUT OF OR RELATING TO THIS AGREEMENT OR ANY OTHER LOAN DOCUMENT OR THE TRANSACTIONS CONTEMPLATED HEREBY OR THEREBY (WHETHER BASED ON CONTRACT, TORT OR ANY OTHER THEORY). EACH PARTY HERETO (A) CERTIFIES THAT NO REPRESENTATIVE, AGENT OR ATTORNEY OF ANY OTHER PERSON HAS
REPRESENTED, EXPRESSLY OR OTHERWISE, THAT SUCH OTHER PERSON WOULD NOT, IN THE EVENT OF LITIGATION, SEEK TO ENFORCE THE FOREGOING WAIVER AND (B) ACKNOWLEDGES THAT IT AND THE OTHER PARTIES HERETO HAVE BEEN INDUCED TO ENTER INTO THIS AGREEMENT AND THE OTHER LOAN DOCUMENTS BY, AMONG OTHER THINGS, THE MUTUAL WAIVERS AND CERTIFICATIONS IN THIS SECTION.
4.10Injunctive Relief; Punitive Damages.
(a) Each U.S. Credit Party, each Canadian Credit Party and each Non-Credit Party recognizes that, in the event such U.S. Credit Party, such Canadian Credit Party or such Non-Credit Party fails to perform, observe or discharge any of its obligations or liabilities under this Agreement or any other Loan Document, any remedy of law may prove to be inadequate relief to the Administrative Agent and the holders of Senior Indebtedness. Therefore, each U.S. Credit Party, each Canadian Credit Party and each Non-Credit Party agrees that the Administrative Agent and the holders of Senior Indebtedness, at the option of the Administrative Agent and the holders of Senior Indebtedness, shall be entitled to temporary and permanent injunctive relief in any such case without the necessity of proving actual damages.
(b) The Administrative Agent, each U.S. Credit Party, each Canadian Credit Party and each Non-Credit Party hereby agree that no such Person shall have a remedy of punitive or exemplary damages against any other party to a Loan Document and each such Person hereby waives any right or claim to punitive or exemplary damages that they may now have or may arise in the future in connection with any Dispute, whether such Dispute is resolved through arbitration or judicially.
4.11Survival of Indemnities. Notwithstanding any termination of this Agreement, the indemnities to which the Administrative Agent and the holders of Senior Indebtedness are entitled under the other Loan Documents shall continue in full force and effect and shall protect the Administrative Agent and the holders of Senior Indebtedness against events arising after such termination as well as before.
4.12Titles and Captions. Titles and captions of Sections and paragraphs in this Agreement are for convenience only, and neither limit nor amplify the provisions of this Agreement.
4.13Severability of Provisions. Any provision of this Agreement or any other Loan Document which is prohibited or unenforceable in any jurisdiction shall, as to such jurisdiction, be ineffective only to the extent of such prohibition or unenforceability without invalidating the remainder of such provision or the remaining provisions hereof or thereof or affecting the validity or enforceability of such provision in any other jurisdiction.
4.14Advice of Counsel, No Strict Construction. Each of the parties represents to each other party hereto that it has discussed this Agreement with its counsel. The parties hereto have participated jointly in the negotiation and drafting of this Agreement. In the event an ambiguity or question of intent or interpretation arises, this Agreement shall be construed as if drafted jointly by the parties hereto and no presumption or burden of proof shall arise favoring or disfavoring any party by virtue of the authorship of any provisions of this Agreement.
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IN WITNESS WHEREOF, the parties hereto have caused this Intercompany Subordination Agreement to be duly executed and delivered as of the day and year first above written.
CANADIAN CREDIT PARTIES: | ||||
BOWATER INCORPORATED, as U.S. Borrower | ||||
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BOWATER CANADIAN FOREST PRODUCTS,as Canadian Borrower | ||||
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BOWATER INCORPORATED, as U.S. Borrower | ||||
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BOWATER MISSISSIPPI HOLDINGS INC., as U.S. Subsidiary Guarantor | ||||
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BOWATER MISSISSIPPI LLC, as U.S. Subsidiary Guarantor | ||||
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BOWATER AMERICA INC., as U.S. Subsidiary Guarantor | ||||
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BOWATER NUWAY INC., as U.S. Subsidiary Guarantor | ||||
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BOWATER NUWAY MIDSTATES INC., as U.S. Subsidiary Guarantor | ||||
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BOWATER ALABAMA INC., as U.S. Subsidiary Guarantor | ||||
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ADMINISTRATIVE AGENT: | ||||
THE BANK OF NOVA SCOTIA, as Administrative Agent | ||||
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Exhibit A
JOINDER AGREEMENT
JOINDER AGREEMENT dated as of ,20 , by , a [corporation] [company] (the “Additional Subsidiary”), in favor of WACHOVIA BANK, NATIONAL ASSOCIATION, a national banking association, as Administrative Agent under the Credit Agreement referred to below (in such capacity together with its successors in such capacity, the “Administrative Agent”).
Pursuant to the Credit Agreement dated as of , 2006 by and among Bowater Canadian Forest Produts Inc., a Canadian Corporation as Borrower, (the “Canadian Borrower”)Bowater Incorporated, a Delaware corporation, as Guarantor (the “U.S. Borrower”), the Lenders who are or may become party thereto (the “Lenders”) and the Administrative Agent, Bank of Montreal as Syndication Agent and Swingline Lender (as amended, restated, supplemented or otherwise modified from time to time, the “Credit Agreement”), the Lenders have agreed to make Extensions of Credit to the U.S. Borrower upon the terms and subject to the conditions set forth therein.
Pursuant to the U.S. Intercompany Subordination Agreement dated as of , 2006 by and among the U.S. Borrower, the Canadian Borrower and the other Canadian Credit Parties party thereto, the U.S. Borrower, the other U.S. Credit Parties party thereto, the Non-Credit Parties party thereto and the Administrative Agent (as amended, restated, supplemented or otherwise modified from time to time, the “Intercompany Subordination Agreement”), the Additional Subsidiary hereby agrees to become [a “Canadian Guarantor” and a “Canadian Credit Party” for all purposes of the Intercompany Subordination Agreement] [a “U.S. Subsidiary” Guarantor] and [a “U.S. Credit Party for all purposes of the Intercompany Subordination Agreement] [a “Non-Credit Party” for all purposes of the Intercompany Subordination Agreement]. The Additional Subsidiary hereby makes the representations and warranties set forth in Section 3 of the Intercompany Subordination Agreement, with respect to itself and its obligations under this Agreement (with any reference in said Section to the Intercompany Subordination Agreement with respect to itself and its obligations under this agreement (with any reference in said section to the Intercompany Subordination Agreement) being deemed to include a reference to this Agreement).
[Signature Page Follows]
IN WITNESS WHEREOF, the Additional Subsidiary has caused this Joinder Agreement to be duly executed and delivered as of the day and year first above written.
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THE BANK OF NOVA SCOTIA, as Administrative Agent | ||||
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Exhibit B
Name | Jurisdiction of Organization |
Schedule A
Excluded Demand Indebtedness
[TO BE COMPLETED BY BOWATER]
SCHEDULE 1.1(a)
Existing Letters of Credit
Purpose | Beneficiary | Issuing Bank | Amount | L/C Number | Expiratio n Date |
SERP | Royal Trust as Trustee | Scotia - Cdn Credit Fac. | C$22,000,000.00 | G18572/237568 | 3/31/2007 |
SERP- Alliance | Royal Trust as Trustee | Scotia - Cdn Credit Fac. | C$999,000.00 | S18572/231694 | 5/3112006 |
Thunder Bay Power | IESO | Scotia - Cdn Credit Fac. | C$9,676,649.00 | S18572/174752 | 4/16/2007 |
Thunder Bay Pipeline | Trans Canada Pipeline | Scotia - Cdn Credit Fac. | C$140,000.00 | S18572/221592 | 3/9/2007 |
Gatineau study | Hydro Quebec | Scotia - Cdn Credit Fac. | C$42,700.00 | ISGL WBD855/5712 | 4/1/2006 |
Gatineau | Hydro-Quebec | Scotia - Cdn Credit Fac. | C$644,228.00 | S51151/238041 | 4/1/2008 |
Mersey | Nova Scotia Power Inc | Scotia - Cdn Credit Fac. | C$69,500.00 |
| 5/17/2007 |
Performance Bond | Al Ahram -Egypt | Scotia - Cdn Credit Fac. | $180.000.00 | G18572/238023 | 7/3112006 |
Performance Bond | AI Ahram -Egypt | Scotia - Cdn Credit Fac. | $180,000.00 | G18572/238428 | 8/31/2006 |
Performance Bond | EI Tahrir -Egypt | Scotia - Cdn Credit Fac. | $72,000.00 | G18572/238445 | 8131/2006 |
Performance Bond | Akhbar EI-Yom Org | Scotia - Cdn Credit Fac. | $107,250.00 | G185721240244 | 9/30/2006 |
| Minister of Environment Ontario | Scotia - Cdn Credit Fac. | C$114,953.00 | [pending] | 5/25/2007 |
SCHEDULE 1.1(B)
Specified Existing Notes
(In USD Thousands)
CUSIP | Description | Interest Rate | Issuance/ Refunding Date | Original Issuance Amount | Date of Final Payment | Principal Balance 12/3l/05 | ||
102183 | AC | 4 | Debentures | 9.000% | 08/09/89 | 300,000 | 08/01/09 | 250,017 |
102183 | AL | 4 | Notes | Various | 03/17/04 | 250,000 | 03/15/10 | 250,000 |
N/A |
|
| Note -Series A | 10.625% | 06/01/90 | 98,000 | 06/15/10 | 98,000 |
SCHEDULE 6.1(b)
Bowater Incorporation U.S. Subsidiaries (Direct and Indirect) and Capitalization
ENTITY | States of Organization | States Qualified To Do Business | Ownership |
Bowater Incorporated | DE | AL, GA, Ml, NC, SC, TN, WA |
|
Bowater Alabama Inc. | AL |
| 100% by Bowater Incorporated |
Bowater America Inc. | DE | CA, CT, FL, GA, IL, MN, NC, NJ, NY,OH,OR, SC, TX, VA, WA, WI | 100% by Bowater Incorporated |
Bowater Finance Company Inc. | DE |
| 100% by Bowater Incorporated |
Bowater Funding Inc. | DE | SC | 100% by Bowater America Inc. |
Bowater Mississippi Holdings Inc. | DE |
| 100% by Bowater Incorporated |
Bowater Mississippi LLC | DE |
| 99% by Bowater Incorporated 1 % by Bowater Mississippi Holdings Inc. |
Bowater Newsprint South Inc. | DE | MS | 100% by Bowater Newsprint South LLC |
Bowater Newsprint South LLC | DE |
| 100% by Bowater Incorporated |
Bowater Nuway Inc. | DE | SC, MI | 100% by Bowater Incorporated |
Bowater Nuway Mid-States Inc. | DE | TN | 100% by Bowater Nuway Inc. |
Bowater South American Holdings Incorporated | DE |
| 100% by Bowater Incorporated |
Bowater Ventures Inc. | DE |
| 100% by Bowater Incorporated |
Coosa Pines Golf Club, Incorporated | AL |
| 100% by Bowater Alabama Inc. |
Calhoun Newsprint Company | DE | NC, SC, TN | 51% by Bowater Nuway Inc. 49% by The Harold Company |
Lake Superior Forest Products Inc. | DE | WA | 100% by Bowater America Inc. |
Rich Timber Holdings, LLC | DE |
| 100% by Bowater Incorporated |
Timber Note Holding Inc. | DE |
| 100% by Rich Timber Holdings, LLC |
Bowater Incorporated | DE |
|
|
SCHEDULE 6.1 (b)
Bowater Incorporation non-U.S. Subsidiaries (Direct and Indirect) and Capitalization
ENTITY | Country of Organization | States Qualified To Do Business | Ownership |
Bowater Asia Pte Ltd | Singapore |
| 100% by Bowater Incorporated |
Bowater-Korea Co. Ltd. | Korea |
| 100% by Bowater Incorporated |
Bowater Canada Finance Corporation | Nova Scotia |
| 100% by Bowater Incorporated |
Bowater Canada Treasury Corporation | Nova Scotia |
| 100% by Bowater Canada Finance Corporation |
Bowater S. America Ltda | Brazil |
| 99.9% by Bowater Incorporated |
Bowater Canada Finance Limited Partnership | New Brunswick |
| 0.1% by Bowater South American Holdings Incorporated |
Bowater Canadian Holdings Incorporated | Nova Scotia |
| 1% by Bowater Canada Treasury Corporation |
Bowater Canada Inc. | Canada |
| 100% by Bowater Incorporated |
Bowater Canadian Forest Products Inc. | Canada |
| 100% by Bowater Canadian Holdings Incorporated |
Bowater Canadian Limited | Canada |
| 100% by Bowater Incorporated |
Bowater Mersey paper Company Limited | Nova Scotia |
| 51% by Bowater Incorporated 49% by The Washington Post |
Bowater Pulp and Paper Canada Holdings Limited Partnership | New Brunswick |
| 99% by Bowater Incorporated 1% by Bowater Ventures Inc. |
CONTINUED ON NEXT PAGE
-2-
Schedule 6.l (b)
Bowater Canadian Forest Products Inc. Subsidiaries (Direct and Indirect) and Capitalization
ENTITY | Country of Organization | States Qualified To Do Business | Ownership |
Bowater Canadian Forest Products Inc. | Canada
| N/A | 100% by Bowater Canada, Inc. |
Bowater Europe Limited | United Kingdom | N/A | 100% by Bowater Canadian Forest Products Inc. |
Bowater Maritimes Inc. | Canada | N/A | 67% by Bowater Canadian Forest Products Inc. 25% by Oji Paper Co. Ltd. 8% Mitsui & Co. Ltd. |
Cascapédia Booming Company Inc. | Quebec | N/A | 25% by Bowater Maritimes Inc. 25% by Bowater Maritimes Inc. 50% by Emballages Smurfit - Stone Inc. |
Bowater Baie-TrinitéInc. | Quebec | N/A | 100% by Bowater Canadian Forest Products Inc. |
The Restigouche Log Driving & Boom Company | Quebec | N/A | 50% by Bowater Maritimes Inc. 50% by Fraser Inc. |
Bowater Mitis Inc. | Quebec | N/A | 100% by Bowater Canadian Forest Products Inc. |
Bowater Guérette Inc. | Quebec | N/A | 100% by Bowater Canadian Forest Products Inc. |
Bowater Couturier Inc. | New Brunswick | N/A | 100% by Bowater Guérette Inc. |
Alliance Forest Products (200l) | Canada
| N/A | 100% by Bowater Canadian Forest Products Inc. |
Bowater Belledune Sawmill Inc. | Canada | N/A | 100% by Bowater Canadian Forest Products Inc. |
Chaleur Sawmills Associate | New Brunswick | N/A | 30% by Bowater Belledune Sawmill Inc. 22.8% by Maltais & Freres Holding Ltee 22.8% by 054022 NB Ltd. 22.8% by Jim Bell Inc. 1.6% by G. E. Woods & Sons Ltd. |
Produits Forestiers Canbo Inc. | Quebec | N/A | 20% Bowater Canadian Forest Products Inc. |
9032-4286 Quebec Inc. | Quebec | N/A | 50% Bowater Canadian Forest Products Inc 50% La Coopérative forestière Girardville |
Planfor Inc. | Quebec | N/A | 15% Bowater Canadian Forest Products Inc 15% Les Industries James Mclaren Inc. 45% Sociétés sylvicoles 20% Syndicates et offices de producteurs de bois |
St Maurice River Drive Company | Canada | N/A | 22% Bowater Canadian Forest Products Inc 78% Abitibi-Consolidated |
-3-
Schedule 6.l (b)
Bowater Canadian Forest Products Inc. Subsidiaries (Direct and Indirect) and Capitalization
ENTITY | Country of Organization | States Qualified To Do Business | Ownership |
ICO Inc. | Canada | N/A | 11 % Bowater Canadian Forest Products Inc 19.7% Consolidated-Bathurst Limited 46.7% E. B . Eddy Forest Products Ltd. 22.6% Stone Container (Canada) |
BowaterTreated Wood Inc. | Quebec | N/A | 100% Bowater Canadian Forest Products Inc |
Canexel Hardboard Inc. | Canada | N/A | 100% Bowater Canadian Forest Products Inc. |
9068-9050 Quebec Inc. | Quebec | N/A | 100% Bowater Canadian Forest Products Inc. |
-4-
SCHEDULE 6.1(i-l)
Bowater Incorporated Retirement Plan
Bowater Incorporated Savings Plan
Bowater Incorporated Benefit Plan
Supplemental Benefit Plan for Designated Employees of Bowater Incorporated
Bowater Incorporated Compensatory Benefit Plan
Bowater Incorporated Benefits Equalization Plan
Executive Supplemental Medical Plan
Schedule 6.1(i-2)
List of Registered Pension Plans with Canada Revenue Agency-2006
Bowater Canadian Forest Products Inc.
Name of Pension Plans | Registration number CRA | Employees covered Union/ Non Union |
Included in the Master Trust |
|
|
Régime de retraite des employés (1988) de Bowater Produits forestiers du Canada inc./Employees Retirement Plan (1988) of Bowater Canadian Forest Products Inc. * | 0982223 | NU |
Régime de retraite des employés (1946) de Bowater Produits forestiers du Canada inc./Employees Retirement Plan (1946) of Bowater Canadian Forest Products Inc. | 0208058 | U |
Régime de retraite des employés (AID) de Bowater Produits forestiers du Canada inc./Employees Retirement Plan (ILA) of Bowater Canadian Forest Products Inc. | 0967349 | U |
Employees Retirement Plan (1972) of Bowater Canadian Forest Products Inc. ** | 0260901 | U |
Supervisory Employees Retirement Plan (1976) of Bowater Canadian Forest Products Inc. | 0575324 | NU |
Executive Staff Retirement Plan (1976) of Bowater Canadian Forest Products Inc. | 0355511 | NU |
Pension Plan for Non-Salaried or Union Employees of Bowater Mersey Paper Company Limited | 0241752 | U |
Pension Plan for Salaried Employees of Bowater Mersey Paper Company Limited | 0241760 | NU |
Régime de retraite des salaries non-syndiqués (1995) de Bowater Produits forestiers du Canada inc. | 1009596 | NU |
Régime de retraite des salaries syndiqués (1994) de Bowater Produits forestiers du Canada inc. | 1009604 | U |
Régime de retraite hybride des employés syndiqués (2006) de Bowater/ translation would be "Hybrid Pension Plan for Unionized Employees (2006) of Bowater"
(DB component of the Hybrid Plan) | Not yet received (New negotiated plan) | U |
Schedule 6.1(i-2)
List of Registered Pension Plans with Canada Revenue Agency-2006
Bowater Canadian Forest Products Inc.
(Continued)
DC Plans and other registered plans not included in the Master Trust
|
|
|
Régime de retraite CD (2003) des employés non syndiqués de Bowater/DC Retirement Plan (2003) for Non-Unionized Employees of Bowater * | 1090976 | NU |
Pension Plan for Thunder Bay Woodlands and Ignace Sawmill Members of Local 1-2693 | 1086644 | U |
Régime de retraite des travailleurs forestiers de Bowater Maritimes Inc.-membres du syndicat canadien des communications, de l'énergie et du papier, Local 146, Forêt/ Pension Plan for Woods Workers of Bowater Maritimes Inc.-Members of the Canadian Communications, Energy and Paper Workers Union, Local 146 Woods | 0968974 | U |
Régime de retraite des employés saisonniers rémunérés localement non-syndiqués/Retirement Plan for Locally Paid Salaried Seasonal Employees*** | 0974311 | NU |
Régime de retraite hybride des employés syndiqués (2006) de Bowater/ translation would be"Hybrid Pension Plan for Unionized Employees (2006) of Bowater"
(DC component of the Hybrid Plan -Same plan as above) | Temporary number TF 1154301 | U |
Deferred Profit Sharing Plan (component of the Savings Plan) | 1053677 | NU |
*Partially terminated due to an asset sale.
**Partially terminated due to the partial closing of a facility.
***Terminated because the participating employees transferred to a different plan.
-2-
Schedule 6.1 (i-2)
List of Registered Pension Plans with Canada Revenue Agency -2006
Bowater Canadian Forest Products Inc.
(CONTINUED)
Group RRSP for participating employees (Employee contributions only-Bowater paying % additional salary) |
| Employees covered Union/Non Union |
REER collectif Exploitations Gaspe translation would be "Group RRSP Gaspe operations" *Nouvelle, Qc (Lacroix freehold) is under process to be sold. After the sale transaction, employees of local 299 will continue to contribute to the Group RRSP when hired with new buyer. | n/a | U |
Fonds FTQ For CEP employees of Maniwaki *union sponsored RRSP | n/a | U |
Fondaction For CSN employees of Maniwaki *union sponsored RRSP | n/a | U |
Fonds FTQ For employees of Price Sawmill *union sponsored RRSP | n/a | U |
May 2006
Claudine Morin-Massicotte
Human Resources - Montreal
-3-
SCHEDULE 6.1(1)
Indebtedness and Guaranty Obligations Over $25 Million
BOWATERINCORPORATED Debt Obligations (In USD Thousands except as otherwise noted) | |||||||||||||||
CUSIP | Trustee | Description | Interest Rate | Issuance/ Refunding Date | Original Issuance Amount | First Call Date | Date of Final Payment | Principal Balance 3/31/06 | |||||||
|
|
| Bowater Incorporated: |
|
|
|
|
|
| ||||||
56041H | AA | 3 | Morgan | FAME PCB's | 7.750% | 11/01/92 | 62,000 | 10/01/02 | 10/01/22 | 62,000 | |||||
582359 | AC | 9 | SunTrust | McMinn County PCB's | 7.625% | 03/01/91 | 30,000 | 03/01/01 | 03/01/16 | 30,000 | |||||
582361 | AA | 9 | SunTrust | McMinn County PCB's | 7.400% | 12/01/92 | 39,500 | 12/01/02 | 12/01/22 | 39,500 | |||||
582361 | AB | 7 | First Citizens | McMinn County PCB's | Various | 06/01/99 | 33,500 | Any time | 06/01/29 | 33,500 | |||||
986476 | AR | 0 | SunTrust | York County PCB's | 7.400% | 03/12/91 | 6,500 | 01/01/01 | 01/01/10 | 5,850 | |||||
102183 | AC | 4 | Morgan | Debentures | 9.000% | 08/09/89 | 300,000 | No call | 08/01/09 | 250,017 | |||||
102183 | AG | 5 | Morgan | Debentures | 9.500% | 11/02/92 | 125,000 | No call | 10/15/12 | 125,000 | |||||
102183 | AE | 0 | HSBC | Debentures | 9.375% | 11/19/91 | 200,000 | No call | 12/15/21 | 200,000 | |||||
102183 | AK | 6 | BONY | Notes | 6.500% | 06/19/03 | 400,000 | Anytime | 06/15/13 | 400,000 | |||||
102183 | AL | 4 | BONY | Notes | Various | 03/17/04 | 250,000 | 3/15/06 | 03/15/10 | 250,000 | |||||
102175 | AB | 2 | BONY | Notes - guaranteed by BI | 7.950% | 11/06/01 | 600,000 | Anytime | 11/15/11 | 600,000 | |||||
|
|
|
| Subtotal Debt Bowater Incorporated |
|
|
| 1,995,867 | |||||||
|
|
|
| Bowater Canadian Forest Products Inc. |
|
|
|
| |||||||
13642N | AA | 4 | Computershare | Indenture | 10.850% | 12/12/89 | C$l25.000 | 01/01/97* | 11/30/14 | 107,508 | |||||
| N/A |
| Computershare | Note» Series A | 10.625% | 06/01/90 | 98,000 | No Call | 06/15/10 | 98,000 | |||||
| N/A |
| Computershare | Note -Series B | 10.500% | 06/01/90 | 102,000 | No Call | 06/15/10 | 51,000 | |||||
| N/A |
| Computershare | Note -Series C | 10.600% | 11/01/90 | 70,000 | No Call | 01/15/11 | 70,000 | |||||
| N/A |
| Computershare | Note -Series D | 10.260% | 11/01/90 | 22,000 | No Call | 01/15/11 | 11,000 | |||||
|
|
|
| Subtotal Bowater Canadian Forest Products Inc. |
|
| 337,508 | ||||||||
|
|
|
|
|
|
|
| ||||||||
|
| Credit Facilities (to be terminated at Closing) |
|
|
|
|
| ||||||||
|
| Bowater Incorporated |
| 400,000 |
| 04/20/07 | 6,000 | ||||||||
|
| Bowater Canadian Forest Products |
| 35,000 |
| 04/20/07 | - | ||||||||
|
| Bowater Funding A/R Securitization |
| 200,000 |
| 11/30/06 | 42,000 | ||||||||
|
| Subtotal Credit Facilities |
|
|
|
| 48,000 | ||||||||
|
| ||||||||||||||
Note: Years with no obligations have been omitted. |
| ||||||||||||||
Canadian Dollar Exchange rate | 1.1627 Balance sheet rate@ 3/31 |
| |||||||||||||
● 10.85 purchase fund repayments are on a "best efforts» basis to repurchase at a discount |
| ||||||||||||||
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
SCHEDULE 6.1(n)
Burdensome Provisions (See Section 6.1(n))
The Bowater Canada Inc. ("BCI") Exchangeable Shares contain certain restrictions designed to assure the payment of dividends on the Exchangeable Shares. Among other things, unless all dividends on the Exchangeable Shares corresponding to dividends declared and paid to date on the Bowater Incorporated Common Shares have been declared and paid in fun on the Exchangeable Shares, BCI shall not, without the prior approval of the holders of the Exchangeable Shares, pay any dividends on the BCI Common Shares or BCI Preferred Shares (or any other shares ranking junior to the Exchangeable Shares), or redeem or purchase or make any capital distribution in respect of such shares or any other shares of BCI ranking equally with the Exchangeable Shares with respect to the payment of dividends or any liquidation distribution.
The Support Agreement between Bowater Incorporated, Bowater Canadian Holdings Inc. ("BCHI") and BCI contains restrictions on the payment of dividends and other restrictions that are designed to ensure that the holders of the Bowater Canada Exchangeable Shares are treated the same as the holders of Bowater Common stock.
The provisions attached to the Preferred Shares of each of Bowater Canadian Forest Products Inc., BCI and BCHI contain restrictions on the payment of dividends in that no dividends may be paid on the respective common shares of those corporations (or other shares ranking junior to the Preferred Shares) unless all dividends are up-to-date on such Preferred Shares.
The following debt instruments of Bowater Canadian Forest Products ("BCFPI"), include provisions granting certain rights to the holders of such debt based in part on the occurrence of certain significant distributions to shareholders:
● Trust Indenture dated as of December 12, 1989 between Canadian Pacific Forest Products Limited (now BCFPI) and Montreal Trust Company in respect of the Cdn $125,000,000 10.85% debentures due November 30,2014.
● Note Agreement dated as of June 1. 1990 by Canadian Pacific Forest Products Limited (now BCFPI) in respect of the US$98,000,000 10.625% Senior Notes, Series A, and the U.S. $102,000,000 10.50% Senior Notes. Series B, each due June 15, 2010.
● Note Agreement dated as of November 1, 1990 by Canadian Pacific Forest Products Limited (now BCFPI) in respect of the U.S. $70,000,000 10.60% Senior Notes, Series C. and the U.S. $22,000,000 10.26% Senior Notes, Series D, each due January 15, 2011.
Under these debt instruments, on the occurrence of certain "Designated Events", together with certain other condi tions being met (either a ratings decline, in the case of the Trust Indenture, or a debt ratio in excess of70%, in the case of the Note Agreements), the holders of
(Schedule 6.1(n) to Credit Agreement)
such debt may acquire the right to require BCFPI to require the Company to purchase the notes and BCFPI may be obligated to adjust the interest rate on the notes. The term "Designated Event" includes distributions on or repurchases of voting shares over a 12-month period in excess of 30% of the fair market value of the outstanding voting shares.
Restrictions requiring that distributions be made pro rata and requiring certain procedures or approvals for distributions and transfers of assets contained in the organizational documents or shareholders or other similar agreements with respect to the following joint ventures: Calhoun Newsprint Company, Bowater Mersey Paper Company Limited, Bowater Maritimes Inc.
SCHEDULE 6.1(t)
Litigation
NONE
SCHEDULE 10.1
Existing Indebtedness
Debt Obligations (In USD Thousands except as otherwise noted) | ||||||||||
CUSIP | Trustee | Description | Interest Rate | Issuance/ Refunding Date | Original Issuance Amount |
| Date of Final Payment | Principal Balance 12/31/05 | ||
|
| Bowater Incorporated: |
|
|
|
|
|
| ||
56041H | AA | 3 | FAME PCB's | 7.750% | 11/01/92 | 62,000 |
| 10/01/22 | 62,000 | |
582359 | AC | 9 | McMinn County PCB's | 7.625% | 03/01/91 | 30,000 |
| 03/01/16 | 30,000 | |
582361 | AA | 9 | McMinn County PCB's | 7.400% | 12/01/92 | 39,500 |
| 12/01/22 | 39,500 | |
582361 | AB | 7 | McMinn County PCB's | Various | 06/01/99 | 33,500 |
| 06/01/29 | 33,500 | |
986476 | AR | 0 | York County PCB's | 7.400% | 03/12/91 | 6,500 |
| 01/01/10 | 5,850 | |
102183 | AC | 4 | Debentures | 9.000% | 08/09/89 | 300,000 |
| 08/01/09 | 250,017 | |
102183 | AG | 5 | Debentures | 9.500% | 11/02/92 | 125,000 |
| 10/15/12 | 125,000 | |
102183 | AE | 0 | Debentures | 9.375% | 11/19/91 | 200,000 |
| 12/15/21 | 200,000 | |
102183 | AK | 6 | Notes | 6.500% | 06/19/03 | 400,000 |
| 06/15/13 | 400,000 | |
102183 | AL | 4 | Notes | Various | 03/17/04 | 250,000 |
| 03/15/10 | 250,000 | |
102175 | AB | 2 | Notes - guaranteed by BI | 7.950% | 11/06/01 | 600,000 |
| 11/15/11 | 600,000 | |
|
|
| Subtotal Debt Bowater Incorporated |
|
|
| 1,995,867 | |||
|
|
| Bowater Canadian Forest Products Inc. |
|
|
|
| |||
|
|
| Miscellaneous |
|
|
|
|
|
| |
|
|
| Govn't to Quebec – Alliance's | 0,000% | 07/10/98 | C$35,800 |
| 04/20/08 | 8,895 | |
|
|
| UDAG – Grenada | 6,500% | 01/01/90 | 8,500 |
| 02/01/10 | 6,612 | |
|
|
| Subtotal Miscellaneous Debt |
|
|
|
|
| 15,507 | |
|
|
|
|
|
|
|
|
|
| |
|
|
| Bowater Canadian Forest Products Inc. |
|
|
|
|
|
| |
13642N | AA | 4 | Indenture | 10.850% | 12/12/89 | C$l25.000 |
| 11/30/14 | 107,508 | |
| N/A |
| Note» Series A | 10.625% | 06/01/90 | 98,000 |
| 06/15/10 | 98,000 | |
| N/A |
| Note -Series B | 10.500% | 06/01/90 | 102,000 |
| 06/15/10 | 51,000 | |
| N/A |
| Note -Series C | 10.600% | 11/01/90 | 70,000 |
| 01/15/11 | 70,000 | |
| N/A |
| Note -Series D | 10.260% | 11/01/90 | 22,000 |
| 01/15/11 | 11,000 | |
|
|
| Subtotal Bowater Canadian Forest Products Inc. |
|
| 337,508 | ||||
Canadian Dollar Exchange rate 1.1627 |
| |||||||||
|
|
|
|
|
|
|
|
|
|
|
SCHEDULE 10.2
Existing Liens
Summary of encumbrances underiue personal propertysecurityact(ontario) (the "ppsatr )
Bowater Canadian Forest Products Inc. Bowater Produits Forestiers du Canada Inc.
Bowater Canadian Forest Products Inc.
Bowater Produits Forestiers du Canada Inc.
Currency Date: May 2, 2006
No. | Secured Party(ies) | Collateral Classification | General Collateral Description | Reference File No. & Registration Number(s) | Comments |
1. | Dow Chemical Canada Inc. | Inventory, Other |
| 614842038- 20050505 1450 1862 8459 (10 years) | Global Debtors Listed:
Bowater Canadian Forest Products Inc.
Bowater Canadian Forest Products Inc./Bowater Produits Forestiers du Canada Inc.
Bowater Produits Forestiers du Canada Inc./Bowater Canadian Forest Products Inc.
Bowater Produits Forestiers du Canada Inc.
|
2. | Hewlett-Packard Financial Services Canada Company | Equipment, Other
No Fixed Maturity Date | Equipment Schedule. Any and all equipment, tangible and intangible, pursuant to Equipment Schedule No. 101032000004, and amendments thereto, under Master Lease Agreement No. 101031, and all amounts owing thereunder.
| 614665962- 20050429 1041 8077 4238 (4 years) | Note this registration is only against the English form of debtor name |
3. | Kinecor Inc | Inventory | Further to a Consignment Agreement, all goods consigned by the seller Kinecor Inc to the Buyer | 613074375- 20050302 1631 1616 | Note this registration is only against the English Form of |
-1-
No. | Secured Party(ies) | Collateral Classification | General Collateral Description | Reference File No. & Registration Number(s) | Comments |
|
|
Maturity Date: 02MAR2012 | Bowater Canadian Forest Products Inc, such as but not restrictively?bearings [sic] products, mechanical drive products, mechanical drive products, fluid power products hydraulics & pneumatics, rubber products, miscellaneous products such as? chains, chucks, ladders, brushes, Saginaw, shim, shelving, bearing analysis tools. Process equipment such as? wilden pump, rotojet pump, netzsch pump, national pump, varisco pump, walchem, alma submersible pump, envirquip mixers, pnr spray nozzle. Above products manufactured by?SKF, NTN, FAG, Garlock Renold, Rexnord, E.P.T., Falk, Eurodrive, Timken, Torrington, Dodge, Gates, Goodyear, Martin Sprockets, SM Cyclo, QM Bearings, AR Thompson, Loctile, Technical Service Canada
| 5091 (7 years) | debtor name |
4. | Kinecor Inc. | Inventory | All goods consigned by the Seller Kinecor Inc to the Buyer Bowater Canadian Forest Products Inc further to a Consignment Contract such as but not restrictively?bearing [sic] products, mechanical drive products, fluid power products hydraulics & pneumatics, rubber products, sealing products, specialty products, industrial supply products, miscellaneous |
|
|
-2-
No. | Secured Party(ies) | Collateral Classification | General Collateral Description | Reference File No. & Registration Number(s) | Comments |
|
|
| products such as? chains, chucks, ladders, brushes, Saginaw, shim, shelving, bearing analysis tools, process equipment such as? wilden pump, rotojet pump, netzsch pump, national pump, varisco pump, walchem, alma submersible pump, envirquip mixers, pnr spray nozzle. Above products are manufactured by the following companies?SKF, NTN, FAG, Garloock Renold, Rexnord, E.P.T., Falk, Eurodrive, Timken, Torrington, Dodge, Gates, Goodyear, Martin Sprockets, SM Cyclo, QM Bearings, AR Thompson, Loctite, Technical Service Canada
|
|
|
5. | AstenJohnson, Inc. | Inventory |
| 871737759- 20010424 1439 1530<5177 (5 years) | Global Debtors Listed:
Bowater
Bowater, Thunder Bay
Bowater Canadian Forest Products Inc.
|
|
|
|
| amended by: 20060306 1530 1590 | Amended to include "Bowater Canadian Forest Products Inc." as an additional debtor
|
|
|
|
| renewed by: 20060306 1721 1590 3054 (5 years)
|
|
-3-
Great Lakes Forest Products Limited
Currency Date : May 2, 2006
No. | Secured Party(ies) | Collateral Classifications | General Collateral Description | Reference File No. & Registration Number(s) | Comments |
1. | Clinton Community Credit Union | Inventory, Equipment, Accounts, Other
No Fixed Maturity Date | General Security Agreements | 855651762- 19991007 1612 1626 2730 (5 years) | Global Debtors Listed:
1344344 Canada inc.
Great Lakes Forests Products
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| renewed by: 20040928 1827 1626 0891 (5 years)
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| amended by: 20050429 1247 1626 2439 | Amended to (i) remove "Robert Hovius" as an additional debtor, (ii) to remove "Consumer Goods" from the collateral classification and (iii) to remove "Guarantee" from the Collateral description
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QUEBEC
Register of Personal and Movable Real Right
Register current as of: April 28, 2006 at 10:29 a.m. against the following names:
Bowater Pulp and Paper Canada Inc. , Bowater Pâtes et Papiers Canada Inc., Avenor Inc., Canadian Pacific Forest Products Limited / Produits Forestiers Canadien Pacifique Limitée. Pacific Forest Products Limited, CIP Inc., CIP Forest Products Inc. , Produits Forestiers CIP Inc., Tahsis Company Ltd., Great Lakes Forest
Products Limited, Alliance Forest Products Inc. , Produits Forestiers Alliance Inc., 3014606 Canada Inc.
Register current as of: May 17, 2006 at 3:00 p.m. against the following names:
The Great Lakes Paper Company, Limited, Pacific Logging Company Limited, Victoria Plywood Ltd., Belize Forest Products Ltd., Ivy Green Marina Ltd., B&M Logging, Ltd., Buckley Bay Towing Ltd., Island Wharves Ltd., L.&M. N. Logging Co. Ltd., Simard Log Sorting (1967) Limited, Saltair Lumber Company Ltd.,
T.W. Mackenzie Logging Ltd.
REGISTRATIONS
Nature of right
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| Information
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Reservation of I. ownership (instalment sale) (Global registration) | March 2, 2005 at 10:30 a.m. 05-0110857-0001 | Vendor: Systèmes de distribution Intégrés, Sociétéen commandite Integrated Distribution Systems Limited Partenership [Wajax Industries Limited] [Wajax Limitée] [Wajax Limited] [Kinecor Inc.] Purchaser: Bowater Canadian Forest Products Inc. | Property: All consigned property relating to a consignment contract, including without limitation bearing products, mechanical drive products, electrical drive products and other products and equipment manufactured by SKF, NTN, FAG, Garlock. Renold, Rexnord, E.P.T., Falk, Eurodrive, Timken and others. Date of the agreement: February 28, 2015 Comments: Change of name registered on August 29, 2005 under number 05-0496634-000l from Kinecor Inc. and Wajax Industries Limited to Wajax Limitée/Wajax Limited. Assignment of a universality of claims registered on August 29, 2005 under number 05-0496634-0002 by Wajax Limited/Wajax Limitée in favour of Systèmes de Distribution Intégrés, Société en commandite/Integrated Distribution Systems Limited Partnership. (Rectification registered on September 15, 2005 under number 05-0531110»0001 of particular registration numbers. Rectification registered on September 15, 2005 under number 05-0531110-0002 of a registration number.) |
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SCHEDULE 10.2
Existing Liens
JURISDICTION SEARCHED | DEBTOR | SECURED PARTY: | TYPE OF LIEN | FILE NO./ FILE DATE |
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DELAWARE: Secretary of State | Bowater Incorporated | Omnova Solutions Inc. | Consignment inventory of Omnova (latex) | 9-27-01 11298087 |
| Bowater Incorporated | Omnova Solutions Inc. | UCC-3 | 10-20-05 53261410 |
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SC-Secretary of State | Bowater Incorporated | Asten/Johnson | Consigned goods, inventory, paper machine clothing of Asten/Johnson | 6-8-01 010608-111552C |
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TN-Department of State | Bowater Incorporated | Asten/Johnson | Consigned goods, inventory, paper machine clothing of Asten/Johnson | 6-8-01 310090455 |
Wa-Department of Licencing | Bowater Incorporated | Asten/Johnson | Consigned goods, inventory, paper machine clothing of Asten/Johnson | 6-8-01 2001-159-0027 |
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MS –Secretary of State | Bowater Newsprint South Inc. | Asten/Johnson, Inc. | Consigned goods, inventory, paper machine clothing supply by Asten/Johnson | 6-8-01 1531226 |
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DE –Secretary of State | Bowater Nuway, Inc. | The Dow Chemical Company | Consigned Inventory of Dow (latex) | 12-04-02 23030362 |
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SCHEDULE 10.3
Existing Loans, Advances and Investments
Company Name | Form of Entity | Subsidiary that Holds Investment |
I. Investments in Minority Joint Ventures |
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Ponderay Newsprint Company | Partnership | Lake Superior Forest Products Inc. (40%) |
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Produits Forestiers Canbo Inc. | Co rporation | Bowater Canadian Forest Products Inc. (20%) |
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9032-4286 Quebec Inc. | Corporation | Bowater Canadian Forest Products Inc. (50% ) |
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ICO Inc. | Corporation | Bowater Canadian Forest Products Inc. (11 %) |
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Cascapedia Booming Company, Inc. | Corporation | Bowater Canadian Forest Products Inc. (25%) Bowater Maritimes Inc. (25%) |
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St. Maurice River Drive Company | Corporation | Bowater Canadian Forest Products Inc. (22%) |
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Restigouche Log Driving & Boom Company | Corporation | Bowater Maritimes Inc. (50%) |
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Planfor Inc. | Corporation | Bowater Canadian Forest Products Inc. (15%) |
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Chaleur Sawmills Associate | Partnership | Bowater Belledune Sawmill Inc. (30%) |
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II. Investments in QSPEs |
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Calhoun Note Holdings AT LLC | Limited Liability Company | Calhoun Newsprint Company (100%) |
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Calhoun Note Holdings II LLC | Limited Liability Company | Calhoun Newsprint Company (100%) |
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Bowater Catawba Note Holdings I LLC | Limited Liability Company | Bowater Incorporated ( 100%) |
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Bowater Catawba Note Holdings II LLC | Limited Liability Company | Bowater Incorporated (100%) |
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Bowater Saluda Note Holdings LLC | Limited Liability Company | Bowater Incorporated (l 00%) |
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Timber Note Holding LLC | Limited Liability Company | Rich Timber Holdings, LLC (100%) |
SCHEDULE 10.8
Transactions with Affiliates
NONE