Exhibit 10.12
EXECUTION COPY
===============================================================================
CREDIT AGREEMENT
dated as of
November 22, 1996
among
Unisource Worldwide, Inc.
Unisource Capital Corporation
Unisource Canada, Inc.
The Lenders Party Hereto
THE CHASE MANHATTAN BANK,
as Administrative Agent
and
THE TORONTO-DOMINION BANK,
as Canadian Agent
TORONTO DOMINION (TEXAS), INC.,
as Documentation Agent
---------------------------
CHASE SECURITIES INC.,
as Arranger
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TABLE OF CONTENTS
Page
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ARTICLE I
Definitions
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SECTION 1.01. Defined Terms............................................. 1
SECTION 1.02. Classification of Loans and
Borrowings.............................................. 25
SECTION 1.03. Terms Generally........................................... 25
SECTION 1.04. Accounting Terms; GAAP.................................... 26
SECTION 1.05. Exchange Rates............................................ 26
ARTICLE II
The Credits
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SECTION 2.01. Commitments............................................... 27
SECTION 2.02. Loans and Borrowings...................................... 28
SECTION 2.03. Requests for Revolving Borrowings......................... 30
SECTION 2.04. Competitive Bid Procedure................................. 31
SECTION 2.05. Swingline Loans........................................... 34
SECTION 2.06. Funding of Borrowings..................................... 36
SECTION 2.07. Interest Elections........................................ 38
SECTION 2.08. Termination and Reduction of
Commitments............................................. 41
SECTION 2.09. Repayment of Loans; Evidence of Debt...................... 42
SECTION 2.10. Prepayment of Loans....................................... 43
SECTION 2.11. Fees...................................................... 45
SECTION 2.12. Interest.................................................. 47
SECTION 2.13. Alternate Rate of Interest................................ 49
SECTION 2.14. Increased Costs; Illegality............................... 50
SECTION 2.15. Break Funding Payments.................................... 53
SECTION 2.16. Taxes..................................................... 54
SECTION 2.17. Payments Generally; Pro Rata Treatment;
Sharing of Set-offs..................................... 56
SECTION 2.18. Mitigation Obligations; Replacement of
Lenders................................................. 59
SECTION 2.19. Acceptances............................................... 61
2
ARTICLE III
Representations and Warranties
------------------------------
SECTION 3.01. Organization; Powers................................... 66
SECTION 3.02. Authorization; Enforceability.......................... 66
SECTION 3.03. Governmental Approvals; No Conflicts................... 66
SECTION 3.04. Financial Condition; No Material
Adverse Change........................................ 67
SECTION 3.05. Properties............................................. 67
SECTION 3.06. Litigation and Environmental Matters................... 68
SECTION 3.07. Compliance with Laws and Agreements.................... 68
SECTION 3.08. Investment and Holding Company Status.................. 68
SECTION 3.09. Taxes.................................................. 69
SECTION 3.10. ERISA.................................................. 69
SECTION 3.11. Disclosure............................................. 69
SECTION 3.12. Subsidiaries........................................... 69
SECTION 3.13 Solvency............................................... 70
SECTION 3.14. Federal Reserve Requirements........................... 70
ARTICLE IV
Conditions
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SECTION 4.01. Effective Date......................................... 70
SECTION 4.02. Each Credit Event...................................... 72
SECTION 4.03. First Credit Event..................................... 73
SECTION 4.04. First Credit Event after Spin-Off...................... 74
ARTICLE V
Affirmative Covenants
---------------------
SECTION 5.01. Financial Statements and Other
Information........................................... 74
SECTION 5.02. Notices of Material Events............................. 76
SECTION 5.03. Existence; Conduct of Business......................... 76
SECTION 5.04. Payment of Obligations................................. 77
SECTION 5.05. Maintenance of Properties; Insurance................... 77
SECTION 5.06. Books and Records; Inspection Rights................... 77
SECTION 5.07. Compliance with Laws................................... 78
SECTION 5.08. Use of Proceeds........................................ 78
SECTION 5.09. Ownership of Delaware Borrower and
Canadian Borrower..................................... 78
3
SECTION 5.10. Further Assurances...................................... 78
ARTICLE VI
Negative Covenants
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SECTION 6.01. Indebtedness............................................ 79
SECTION 6.02. Liens................................................... 80
SECTION 6.03. Sale and Lease-Back Transactions........................ 82
SECTION 6.04. Fundamental Changes..................................... 82
SECTION 6.05. Leases.................................................. 82
SECTION 6.06. Transactions with Affiliates............................ 83
SECTION 6.07. Restrictive Agreements.................................. 83
SECTION 6.08. Leverage Ratio.......................................... 84
SECTION 6.09. Minimum Consolidated Net Worth.......................... 84
ARTICLE VII
Events of Default....................................... 84
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ARTICLE VIII
The Agents.............................................. 87
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ARTICLE IX
Guarantee............................................... 90
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ARTICLE X
Miscellaneous
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SECTION 10.01. Notices................................................. 92
SECTION 10.02. Waivers; Amendments..................................... 93
SECTION 10.03. Expenses; Indemnity; Damage Waiver...................... 95
SECTION 10.04. Successors and Assigns.................................. 96
SECTION 10.05. Survival................................................ 100
SECTION 10.06. Counterparts; Integration;
Effectiveness......................................... 101
SECTION 10.07. Severability............................................ 101
SECTION 10.08. Right of Setoff......................................... 102
SECTION 10.09. Governing Law; Jurisdiction; Consent
to Service of Process................................. 102
4
SECTION 10.10. WAIVER OF JURY TRIAL..................... 103
SECTION 10.11. Headings................................. 103
SECTION 10.12. Confidentiality.......................... 103
SECTION 10.13. Conversion of Currencies................. 104
SCHEDULES:
- - ---------
Schedule 1.01(a) -- Alternate Procedures
Schedule 1.01(b) -- Subsidiary Guarantors
Schedule 2.01 -- Commitments
Schedule 3.06 -- Disclosed Matters
Schedule 3.12 -- Subsidiaries, Material Subsidiaries and
Ownership Interests
Schedule 6.01 -- Existing Indebtedness
Schedule 6.02 -- Existing Liens
Schedule 6.07 -- Existing Restrictions
EXHIBITS:
- - --------
Exhibit A -- Form of Assignment and Acceptance
Exhibit B-1 -- Form of Opinion of U.S. Counsel
Exhibit B-2 -- Form of Opinion of Canadian Counsel
Exhibit C -- Form of Discount Note
Exhibit D -- Form of Subsidiary Guarantee Agreement
Exhibit E -- Form of Indemnity, Subrogation and
Contribution Agreement
CREDIT AGREEMENT dated as of November 22, 1996
among UNISOURCE WORLDWIDE, INC., a Delaware
corporation (the "Company"), UNISOURCE CAPITAL
CORPORATION, a Delaware corporation (the "Delaware
Borrower" and, together with the Company, the "U.S.
Borrowers"), UNISOURCE CANADA, INC., a Canadian
corporation (the "Canadian Borrower" and, together
with the U.S. Borrowers, the "Borrowers"), the
LENDERS party hereto, THE CHASE MANHATTAN BANK, as
Administrative Agent, THE TORONTO-DOMINION BANK, as
Canadian Agent, and TORONTO DOMINION (TEXAS) INC., as
Documentation Agent.
The parties hereto agree as follows:
ARTICLE I
Definitions
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SECTION 1.01. Defined Terms. As used in this Agreement, the
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following terms have the meanings specified below:
"ABR", when used in reference to any Loan or Borrowing, refers to
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whether such Loan, or the Loans comprising such Borrowing, are bearing
interest at a rate determined by reference to the Alternate Base Rate.
"Acceptance" means a Draft drawn by the Canadian Borrower on a
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Canadian Lender conforming to the requirements of Section 2.19 and accepted by
such Canadian Lender in accordance with Section 2.19(c). As the context shall
require, "Acceptance" has also the meaning assigned to it in Section 2.19(i).
"Acceptance Borrowing" means a group of Acceptances accepted by the
--------------------
Canadian Lenders that are created on the same date and have the same maturity
date.
"Acceptance Equivalent Loans" means an advance made under this
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Agreement by a Canadian Lender evidenced by a Discount Note.
"Acceptance Obligation" means, with respect to each Acceptance, the
---------------------
obligations of the Canadian Borrower to
2
pay to the Canadian Lender that accepted such Acceptance the face amount
thereof as required by Section 2.19.
"Administrative Agent" means The Chase Manhattan Bank, in its
--------------------
capacity as administrative agent for the Lenders hereunder.
"Administrative Questionnaire" means an Administrative Questionnaire
----------------------------
in a form supplied by the Administrative Agent or the Canadian Agent, as
applicable.
"Affiliate" means, with respect to a specified Person, another
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Person that directly, or indirectly through one or more intermediaries,
Controls or is Controlled by or is under common Control with the Person
specified.
"Agreement Currency" has the meaning assigned to such term in
------------------
Section 10.13.
"ALCO" means ALCO Standard Corporation, an Ohio corporation.
----
"Alternate Base Rate" means, for any day, a rate per annum equal to
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the greatest of (a) the Prime Rate in effect on such day, (b) the Base CD Rate
in effect on such day plus 1% and (c) the Federal Funds Effective Rate in
effect on such day plus 1/2 of 1%. Any change in the Alternate Base Rate due
to a change in the Prime Rate, the Base CD Rate or the Federal Funds Effective
Rate shall be effective from and including the effective date of such change
in the Prime Rate, the Base CD Rate or the Federal Funds Effective Rate,
respectively.
"Alternate Procedures" means, with respect to the Committed Currency
--------------------
Loans in a specified Committed Currency, any alternate exchange rate, notice,
funding or payment procedures approved by the Administrative Agent, the
applicable Borrower and the Lenders and set forth in Schedule 1.01(a) or in
one or more supplements thereto.
"Applicable Percentage" means, with respect to any Lender, the
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percentage of the total Commitments represented by such Lender's Commitment.
If the Commitments have terminated or expired, the Applicable Percentages
shall be determined based upon the Commitments most recently in effect, giving
effect to any assignments.
3
"Applicable Rate" means, with respect to any Eurocurrency Revolving
---------------
Loan or Acceptance, or with respect to the facility fees payable hereunder, as
the case may be, the applicable rate per annum set forth below under the
caption "Eurocurrency Spread/Stamping Fee Rate" or "Facility Fee Rate", as the
case may be, (a) for any day on or prior to May 22, 1997, based upon Category
2 and (b) for any day thereafter, based upon (i) initially, the Company's
Leverage Ratio as in effect as of the last day of the most recently completed
fiscal quarter of the Company in respect of which financial statements have
been delivered pursuant to Section 5.01 and (ii) after both Moody's and S&P
have rated the Index Debt,the ratings by Moody's and S&P, respectively,
applicable on such date to the Index Debt:
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Index Debt Eurocurrency Facility Fee
---------- ------------ ------------
Leverage Ratings Spread/ Rate
-------- ------- ------- ----
Ratio Stamping
----- --------
Fee Rate
--------
- - ------------------------------------------------------------------------------------------
Category 1 Less A3 or better
than or from
equal to Moody's/A-or
30% better from
S&P .145% .080%
- - ------------------------------------------------------------------------------------------
Category 2 Greater Baa1 from
- - ---------- than 30% Moody's/BBB
but less + from S&P
than or
equal to
45% .185% .090%
- - ------------------------------------------------------------------------------------------
Category 3 Greater Baa2 from
- - ---------- than 45% Moody's/BBB
but less from S&P
than or
equal to
50% .240% .110%
- - ------------------------------------------------------------------------------------------
Category 4 Greater Less than
- - ---------- than 50% Baa2 from
Moody's/
less than
BBB from S&P .300% .150%
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4
For purposes of the foregoing, (i) if either Moody's or S&P shall
not have in effect a rating for the Index Debt, then the "Applicable Rate"
shall be based upon the Company's Leverage Ratio as in effect as of the last
day of the most recently completed fiscal quarter of the Company in respect of
which financial statements have been delivered pursuant to Section 5.01; (ii)
if the ratings established or deemed to have been established by Moody's and
S&P for the Index Debt shall fall within different Categories, the Applicable
Rate shall be based on the higher of the two ratings unless one of the two
ratings is two or more Categories lower than the other, in which case the
Applicable Rate shall be determined by reference to the Category next below
that of the higher of the two ratings; (iii) if the ratings established or
deemed to have been established by Moody's and S&P for the Index Debt shall be
changed (other than as a result of a change in the rating system of Moody's or
S&P), such change shall be effective as of the date on which it is first
announced by the applicable rating agency and (iv) in the event the financial
statements required to be delivered under Section 5.01 are not delivered on or
prior to the date due, the Leverage Ratio shall be deemed to be greater than
50% during the period from the applicable due date to the date when such
financial statements are delivered. Each change in the Applicable Rate shall
apply during the period commencing on the effective date of such change and
ending on the date immediately preceding the effective date of the next such
change.
"Assessment Rate" means, for any day, the annual assessment rate in
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effect on such day that is payable by a member of the Bank Insurance Fund
classified as "well-capitalized" and within supervisory subgroup "B" (or a
comparable successor risk classification) within the meaning of 12 C.F.R. Part
327 (or any successor provision) to the Federal Deposit Insurance Corporation
for insurance by such Corporation of time deposits made in dollars at the
offices of such member in the United States; provided that if, as a result of
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any change in any law, rule or regulation after the date hereof, it is no
longer possible to determine the Assessment Rate as aforesaid, then the
Assessment Rate shall be such annual rate as shall be determined in a
commercially reasonable manner by the Administrative Agent to be
representative of the cost of such insurance to the Lenders.
"Assignment and Acceptance" means an assignment and acceptance
-------------------------
entered into by a Lender and an assignee
5
(with the consent of any party whose consent is required by Section 10.04) and
accepted by the Administrative Agent or the Canadian Agent, as applicable, in
the form of Exhibit A or any other form approved by the Administrative Agent.
"Availability Period" means the period from and including the
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Effective Date to but excluding the earlier of the Maturity Date and the date
of termination of the Commitments.
"Bank Act (Canada)" means the Bank Act (Canada), as amended from
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time to time.
"Base CD Rate" means the sum of (a) the Three-Month Secondary CD
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Rate multiplied by the Statutory Reserve Rate plus (b) the Assessment Rate.
"Board" means the Board of Governors of the Federal Reserve System
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of the United States of America.
"Borrowers" has the meaning assigned to such term in the preamble.
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"Borrowing" means (a) Revolving Loans of the same Type and currency,
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made, converted or continued on the same date and, in the case of Eurocurrency
Loans or Acceptances, as to which a single Interest Period is in effect, (b) a
Competitive Loan or group of Competitive Loans of the same Type made on the
same date and as to which a single Interest Period is in effect or (c) a
Swingline Loan.
"Borrowing Request" means (a) a request by a U.S. Borrower for a
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Revolving Loan Borrowing (other than a Canadian Loan) in accordance with
Section 2.03 or (b) a request by the Canadian Borrower for a Canadian Loan in
accordance with Section 2.03 or 2.19.
"Business Day" means any day that is not a Saturday, Sunday or other
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day on which commercial banks in New York City are authorized or required by
law to remain closed; provided that, when used in connection with a
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Eurocurrency Loan, the term "Business Day" shall also exclude any day on which
------------
banks are not open for dealings in deposits in the applicable Committed
Currency in the London interbank market.
6
"Calculation Date" means the last Business Day or Canadian Business
----------------
Day, as applicable, of each calendar month.
"Canadian Agent" means Toronto Dominion Bank, in its capacity as
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agent for the Canadian Lenders hereunder.
"Canadian Borrower" has the meaning assigned to such term in the
-----------------
preamble.
"Canadian Business Day" means any Business Day other than a Business
---------------------
Day on which commercial banks in Toronto or Montreal are authorized or
required by law to remain closed.
"Canadian Commitment" means, with respect to each Canadian Lender,
-------------------
the commitment of such Canadian Lender to make Canadian Loans hereunder. The
initial amount of each Canadian Lender's Canadian Commitment is set forth on
Schedule 2.01, or in the Assignment and Acceptance pursuant to which such
Canadian Lender shall have assumed its Canadian Commitment, as applicable.
The initial aggregate amount of the Canadian Lenders' Canadian Commitments is
$100,000,000.
"Canadian Dollar Equivalent" means, on any date of determination,
--------------------------
with respect to any amount in Canadian Dollars, the equivalent in dollars of
such amount, determined by the Canadian Agent pursuant to Section 1.05(a)
using the Canadian Exchange Rate with respect to Canadian Dollars then in
effect.
"Canadian Dollars" or "Cdn.$" refers to lawful money of Canada.
---------------- -----
"Canadian Exchange Rate" means, on any day, with respect to Canadian
----------------------
Dollars, the spot rate at which Canadian Dollars may be exchanged into dollars
(and, for purposes of clause (e) of Section 2.07 and clause (i) of Section
2.13, the rate at which dollars may be exchanged into Canadian Dollars), as
quoted by the Bank of Canada at approximately 12:00 Noon, Toronto time, on
such day (or if such day is not a Canadian Business Day, on the immediately
preceding Canadian Business Day). In the event that such spot rate is not
quoted by the Bank of Canada, the Canadian Exchange Rate shall be determined
by reference to such other publicly available service for displaying exchange
rates as may be agreed upon by the Canadian Agent and the Company, or, in
7
the absence of such agreement, such Canadian Exchange Rate shall instead be
the arithmetic average of the spot rates of exchange of the Canadian Agent in
the market where its foreign currency exchange operations in respect of
dollars are then being conducted, at or about 12:00 Noon, Toronto time, on
such date for the purchase of Canadian Dollars for delivery two Business Days
later; provided that if at the time of any such determination, for any reason,
--------
no such spot rate is being quoted, the Canadian Agent may use any reasonable
method it deems appropriate to determine such rate, and such determination
shall be conclusive absent manifest error.
"Canadian Lenders" means the Persons listed on Schedule 2.01 and any
----------------
other Person that shall have become a party hereto and assumed a Canadian
Commitment pursuant to an Assignment and Acceptance, other than any such
Person that ceases to be a party hereto pursuant to an Assignment and
Acceptance. A Canadian Lender shall be a Lender hereunder and shall be a bank
chartered under the Bank Act (Canada) that stamps and accepts Acceptances.
"Canadian Loans" means the Loans made by the Canadian Lenders to the
--------------
Canadian Borrower and the Acceptances pursuant to this Agreement.
"Canadian Prime Rate" means, for any day, a rate per annum equal to
-------------------
the greater of (a) the rate per annum publicly announced from time to time by
Toronto Dominion Bank as its prime rate (being the rate it will charge for
commercial loans in Canadian Dollars in Canada) in effect at its principal
office in Toronto and (b) the CDOR Rate plus .625%. Each change in the
Canadian Prime Rate shall be effective on the date such change is publicly
announced.
"Canadian Prime Rate Loan" means a Canadian Loan to the Canadian
------------------------
Borrower bearing interest at the Canadian Prime Rate.
"Capital Lease Obligations" of any Person means the obligations of
-------------------------
such Person to pay rent or other amounts under any lease of (or other
arrangement conveying the right to use) real or personal property, or a
combination thereof, which obligations are required to be classified and
accounted for as capital leases on a balance sheet of such Person under GAAP,
and the amount of such obligations shall be the capitalized amount thereof
determined in accordance with GAAP.
8
"CDOR Rate" means the annual rate of interest which is the rate
---------
determined as being the arithmetic average of the "BA 1 month" rates
applicable to Canadian Dollar bankers' acceptances displayed and identified as
such on the "Reuters' Screen CDOR Page" at approximately 10:00 a.m., Toronto
time, on such day for Schedule I chartered banks, or if such day is not a
Canadian Business Day then on the immediately preceding Canadian Business Day
(as adjusted by a Canadian Lender after 10:00 a.m., Toronto time, to reflect
any error in a posted rate of interest or in the posted average annual rate of
interest).
"Change in Control" means (a) the acquisition of ownership, directly
-----------------
or indirectly, beneficially or of record, by any Person or group (within the
meaning of the Securities Exchange Act of 1934 and the rules of the Securities
and Exchange Commission thereunder as in effect on the date hereof) of shares
representing more than 20% of the aggregate ordinary voting power represented
by the issued and outstanding capital stock of the Company; or (b) occupation
of a majority of the seats (other than vacant seats) on the board of directors
of the Company by Persons who were neither (i) nominated by the board of
directors of the Company nor (ii) appointed by directors so nominated.
"Change in Law" means (a) the adoption of any applicable law, rule
-------------
or regulation after the date of this Agreement, (b) any change in any
applicable law, rule or regulation or in the interpretation or application
thereof by any Governmental Authority after the date of this Agreement or (c)
compliance by any Lender (or, for purposes of Section 2.14(b), by any lending
office of such Lender or by such Lender's holding company, if any) with any
applicable request, guideline or directive (whether or not having the force of
law) of any Governmental Authority made or issued after the date of this
Agreement.
"Class", when used in reference to any Loan or Borrowing, refers to
-----
whether such Loan, or the Loans comprising such Borrowing, are Revolving
Loans, Competitive Loans or Swingline Loans.
"Code" means the Internal Revenue Code of 1986, as amended from time
----
to time.
"Commitment" means, with respect to each Lender, the commitment of
----------
such Lender to make Revolving Loans and to acquire participations in Swingline
Loans hereunder,
9
expressed as an amount representing the maximum aggregate amount of such
Lender's Revolving Credit Exposure hereunder,as such commitment may be (a)
reduced from time to time pursuant to Section 2.08 and (b) reduced or
increased from time to time pursuant to assignments by or to such Lender
pursuant to Section 10.04. The initial amount of each Lender's Commitment is
set forth on Schedule 2.01, or in the Assignment and Acceptance pursuant to
which such Lender shall have assumed its Commitment, as applicable. The
initial aggregate amount of the Lenders' Commitments is $1,000,000,000.
"Committed Currencies" means French Francs, Deutschemarks and Pounds
--------------------
Sterling.
"Committed Currency Borrowing" means a Borrowing comprised of
----------------------------
Committed Currency Loans.
"Committed Currency Loan" means a Revolving Loan denominated in a
-----------------------
Committed Currency.
"Company" has the meaning assigned to such term in the preamble.
-------
"Competitive Bid" means an offer by a Lender to make a Competitive
---------------
Loan in accordance with Section 2.04.
"Competitive Bid Rate" means, with respect to any Competitive Bid,
--------------------
the Margin or the Fixed Rate, as applicable, offered by the Lender making such
Competitive Bid.
"Competitive Bid Request" means a request by a U.S. Borrower for
-----------------------
Competitive Bids in accordance with Section 2.04.
"Competitive Loan" means a Loan in dollars made pursuant to Section
----------------
2.04.
"Competitive Loan Exposure" means, with respect to any Lender at any
-------------------------
time, the sum of the outstanding principal amount of such Lender's Competitive
Loans at such time.
"Consolidated Total Capitalization" means, on any date, the sum of
---------------------------------
(a) Consolidated Total Debt at such date and (b) the Consolidated Net Worth at
such date.
10
"Consolidated Total Debt" means, on any date, the aggregate
-----------------------
principal amount of the Indebtedness of the Company and Subsidiaries that
would be reflected as liabilities on a consolidated balance sheet of the
Company and Subsidiaries as of such date prepared in accordance with GAAP.
"Consolidated Net Income" means, for any period, the net income of
-----------------------
the Company and consolidated Subsidiaries, determined on a consolidated basis
in accordance with GAAP for such period.
"Consolidated Net Worth" means, at any date, all amounts which, in
----------------------
conformity with GAAP, would be included under stockholders' equity on a
consolidated balance sheet of the Company and Subsidiaries at such date.
"Control" means the possession, directly or indirectly, of the power
-------
to direct or cause the direction of the management or policies of a Person,
whether through the ability to exercise voting power, by contract or
otherwise. "Controlling" and "Controlled" have meanings correlative thereto.
----------- ----------
"Default" means any event or condition which constitutes an Event of
-------
Default or which upon notice, lapse of time or both would, unless cured or
waived, become an Event of Default.
"Disclosed Matters" means the actions, suits and proceedings and the
-----------------
environmental matters disclosed in Schedule 3.06.
"Discount Note" means a non-interest bearing, non-negotiable
-------------
promissory note of the Canadian Borrower denominated in Canadian Dollars,
issued by the Canadian Borrower to a Canadian Lender, substantially in the
form of Exhibit C.
"Dollar Equivalent" means, on any date of determination, with
-----------------
respect to any amount in any Committed Currency, the equivalent in dollars of
such amount, determined by the Administrative Agent pursuant to Section
1.05(a) using the Exchange Rate with respect to such Committed Currency then
in effect.
"dollars" or "$" refers to lawful money of the United States of
------- -
America.
11
"Draft" shall mean a draft or bill of exchange, payable in Canadian
-----
Dollars, in the form used from time to time by each Canadian Lender,
respectively, in connection with the creation of bankers' acceptances in
accordance with the provisions of Section 2.19.
"Effective Date" means the date on which the conditions specified in
--------------
Section 4.01 are satisfied (or waived in accordance with Section 10.02).
"Environmental Laws" means all final and effective laws, rules,
------------------
regulations, codes, ordinances, orders, decrees, judgments, injunctions or
binding agreements issued, promulgated or entered into by any Governmental
Authority, relating in any way to the environment, preservation or reclamation
of natural resources, the management, release or threatened release of any
Hazardous Material or to health and safety matters.
"Environmental Liability" means any liability, contingent or
-----------------------
otherwise (including any liability for damages, costs of environmental
remediation, fines, penalties or indemnities), of the Company or any
Subsidiary resulting from or based upon (a) violation of any Environmental
Law, (b) the generation, use, handling, transportation, storage, treatment or
disposal of any Hazardous Materials, (c) exposure to any Hazardous Materials,
(d) the release or imminent threat of release of any Hazardous Materials into
the environment or (e) any contract, agreement or other consensual arrangement
pursuant to which liability is assumed or imposed with respect to any of the
foregoing.
"ERISA" means the Employee Retirement Income Security Act of 1974,
-----
as amended from time to time.
"ERISA Affiliate" means any trade or business (whether or not
---------------
incorporated) that, together with the Company, is treated as a single employer
under Section 414(b) or (c) of the Code or, solely for purposes of Section 302
of ERISA and Section 412 of the Code, is treated as a single employer under
Section 414 of the Code.
"ERISA Event" means (a) any "reportable event", as defined in
-----------
Section 4043 of ERISA or the regulations issued thereunder with respect to a
Plan (other than an event for which the 30-day notice period is waived); (b)
the existence with respect to any Plan of an "accumulated funding
12
deficiency" (as defined in Section 412 of the Code or Section 302 of ERISA),
whether or not waived; (c) the filing pursuant to Section 412(d) of the Code
or Section 303(d) of ERISA of an application for a waiver of the minimum
funding standard with respect to any Plan; (d) the incurrence by the Company
or any of its ERISA Affiliates of any liability under Title IV of ERISA with
respect to the termination of any Plan; (e) the receipt by the Company or any
ERISA Affiliate from the PBGC or a plan administrator of any notice relating
to an intention to terminate any Plan or Plans or to appoint a trustee to
administer any Plan under Title IV of ERISA; (f) the incurrence by the Company
or any of its ERISA Affiliates of any liability with respect to the withdrawal
or partial withdrawal from any Plan or Multiemployer Plan; or (g) the receipt
or tendering to a Multiemployer Plan by the Company or any ERISA Affiliate of
any notice concerning the imposition of Withdrawal Liability or a
determination that a Multiemployer Plan is, or is expected to be, insolvent or
in reorganization, within the meaning of Title IV of ERISA.
"Eurocurrency", when used in reference to any Loan or Borrowing,
------------
refers to whether such Loan, or the Loans comprising such Borrowing, are
bearing interest at a rate determined by reference to the LIBO Rate.
"Event of Default" has the meaning assigned to such term in Article
----------------
VII.
"Exchange Rate" means, on any day, with respect to any Committed
-------------
Currency, the rate at which such Committed Currency may be exchanged into
dollars (and, for purposes of Section 2.07(e) and Section 2.13(i), the rate at
which dollars may be exchanged into such Committed Currency or as otherwise
determined in accordance with the Alternate Procedures), as set forth at
approximately 11:00 a.m., London time, on such day on the Reuters World
currency page for such Committed Currency. In the event that such rate does
not appear on any Reuters World currency page, the Exchange Rate shall be
determined by reference to such other publicly available service for
displaying exchange rates as may be agreed upon by the Administrative Agent
and the Company, or, in the absence of such agreement, such Exchange Rate
shall instead be the arithmetic average of the spot rates of exchange of the
Administrative Agent in the market where its foreign currency exchange
operations in respect of such Committed Currency are then being conducted, at
or about 10:00 a.m., local time, on such date for the purchase
13
of dollars (or such Committed Currency, as the case may be) for delivery two
Business Days later; provided that if at the time of any such determination,
--------
for any reason, no such spot rate is being quoted, the Administrative Agent
may use any reasonable method it deems appropriate to determine such
rate, and such determination shall be conclusive absent manifest error.
"Excluded Taxes" means, with respect to the Administrative Agent,
--------------
the Canadian Agent, any Lender or any other recipient of any payment to be
made by or on account of any obligation of any Borrower hereunder, (a) any
income or franchise taxes imposed on (or measured by) its net income by the
United States of America or Canada (or any political subdivision or taxing
authority thereof) or by the jurisdiction under the laws of which such
recipient is organized or in which its principal office is located or, in the
case of any Lender, in which its applicable lending office is located, managed
or controlled, (b) any branch profits taxes imposed by the United States of
America or any similar tax imposed by any other jurisdiction in which any
Borrower is located, (c) any tax imposed by reason of any connection between
the jurisdiction imposing such tax and the Administrative Agent, the Canadian
Agent, such Lender or such other recipient other than a connection arising
from this Agreement, or any transaction hereunder or any enforcement of rights
hereunder and (d) in the case of a Foreign Lender, any withholding tax that
(i) is imposed on amounts payable to such Foreign Lender (other than an
assignee pursuant to a request by a Borrower under Section 2.18(b)) at the
time such Foreign Lender becomes a party to this Agreement (or designates a
new lending office), except to the extent that such Foreign Lender (or its
assignor, if any) was entitled, at the time of designation of a new lending
office (or assignment), to receive additional amounts from the applicable
Borrower with respect to such withholding tax pursuant to Section 2.16(a), or
(ii) is attributable to such Foreign Lender's failure to comply with Section
2.16(e).
"Federal Funds Effective Rate" means, for any day, the weighted
----------------------------
average (rounded upwards, if necessary, to the next 1/100 of 1%) of the rates
on overnight Federal funds transactions with members of the Federal Reserve
System arranged by Federal funds brokers, as published on the next succeeding
Business Day by the Federal Reserve Bank of New York, or, if such rate is not
so published for any day that is a Business Day, the average (rounded upwards,
if
14
necessary, to the next 1/100 of 1%) of the quotations for such day for such
transactions received by the Administrative Agent from three Federal funds
brokers of recognized standing selected by it.
"Financed Portion" means at any time, with respect to receivables
----------------
subject to a Securitization (other than the Canadian Securitization referred
to in Section 6.02(e)(i)), an amount of such receivables equal to the
aggregate amount of then outstanding debt or equity instruments or securities
(other than any seller's interest retained by any Borrower or a subsidiary of
the Borrower) issued in connection with such Securitization, in each case
determined in accordance with GAAP.
"Financial Officer" means the chief financial officer, principal
-----------------
accounting officer, treasurer or controller of the Company.
"Fixed Rate" means, with respect to any Competitive Loan (other than
----------
a Eurocurrency Competitive Loan), the fixed rate of interest per annum
specified by the Lender making such Competitive Loan in its related
Competitive Bid.
"Fixed Rate Loan" means a Competitive Loan bearing interest at a
---------------
Fixed Rate.
"Foreign Lender" means any Lender that is organized under the laws
--------------
of a jurisdiction other than that in which the applicable Borrower is located.
For purposes of this definition, the United States of America, each State
thereof and the District of Columbia shall be deemed to constitute a single
jurisdiction.
"GAAP" means generally accepted accounting principles in the United
----
States of America.
"Governmental Authority" means the government of the United States
----------------------
of America, any other nation or any political subdivision thereof, whether
state or local, and any agency, authority, instrumentality, regulatory body,
court, central bank or other entity exercising executive, legislative,
judicial, taxing, regulatory or administrative powers or functions of or
pertaining to government.
"Guarantee" of or by any Person (the "guarantor") means any
---------- ---------
obligation, contingent or otherwise, of the
15
guarantor guaranteeing or having the economic effect of guaranteeing any
Indebtedness or other obligation of any other Person (the "primary obligor")
---------------
in any manner, whether directly or indirectly, and including any obligation of
the guarantor, direct or indirect, (a) to purchase or pay (or advance or
supply funds for the purchase or payment of) such Indebtedness or other
obligation or to purchase (or to advance or supply funds for the purchase of)
any security for the payment thereof, (b) to purchase or lease property,
securities or services for the purpose of assuring the owner of such
Indebtedness or other obligation of the payment thereof or (c) to maintain
working capital, equity capital or any other financial statement condition or
liquidity of the primary obligor so as to enable the primary obligor to pay
such Indebtedness or other obligation; provided, that the term Guarantee shall
--------
not include endorsements for collection or deposit in the ordinary course of
business. The amount of any Guarantee shall be deemed to be an amount equal
to the stated or determinable amount of the primary obligation in respect of
which such Guarantee is made or, if not stated or determinable, the maximum
reasonably anticipated liability in respect thereof determined in good faith
by the guarantor (assuming the guarantor is required to perform thereunder).
"Hazardous Materials" means all explosive or radioactive substances
-------------------
or wastes and all hazardous or toxic substances, wastes or other pollutants,
including petroleum or petroleum distillates, asbestos or asbestos containing
materials, polychlorinated biphenyls, radon gas, infectious or medical wastes
and all other substances or wastes of any nature regulated pursuant to any
Environmental Law.
"Hedging Agreement" means any interest rate protection agreement,
-----------------
foreign currency exchange agreement, commodity price protection agreement or
other interest or currency exchange rate or commodity price hedging
arrangement.
"Indebtedness" of any Person means, without duplication, (a) all
------------
obligations of such Person for borrowed money, (b) all obligations of such
Person evidenced by bonds, debentures, notes or similar instruments, (c) all
obligations of such Person under conditional sale or other title retention
agreements relating to property acquired by such Person, (d) all obligations
of such Person in respect of the deferred purchase price of property or
services (excluding accounts payable incurred in the ordinary course
16
of business), (e) all Indebtedness of others secured by (or for which the
holder of such Indebtedness has an existing right, contingent or otherwise, to
be secured by) any Lien on property owned or acquired by such Person, whether
or not the Indebtedness secured thereby has been assumed, (f) all Guarantees
by such Person of Indebtedness of others, (g) all Capital Lease Obligations of
such Person, (h) all obligations, contingent or otherwise, of such Person as
an account party in respect of letters of credit and letters of guaranty and
(i) all obligations, contingent or otherwise, of such Person in respect of
bankers' acceptances. The Indebtedness of any Person shall include the
Indebtedness of any other entity (including any partnership in which such
Person is a general partner) to the extent such Person is liable therefor as a
result of such Person's ownership interest in or other relationship with such
entity, except to the extent the terms of such Indebtedness provide that such
Person is not liable therefor.
"Indemnified Taxes" means Taxes other than Excluded Taxes and Other
-----------------
Taxes.
"Indemnity, Subrogation and Contribution Agreement" means the
-------------------------------------------------
Indemnity, Subrogation and Contribution Agreement, in the form of Exhibit E,
among the Company, the Subsidiary Guarantors and the Administrative Agent.
"Index Debt" means senior, unsecured, long-term indebtedness for
----------
borrowed money of the Company that is not guaranteed by any other Person or
subject to any other credit enhancement.
"Interest Election Request" means a request by the relevant Borrower
-------------------------
to convert or continue a Revolving Borrowing in accordance with Section 2.07.
"Interest Payment Date" means (a) with respect to any ABR Loan
---------------------
(other than a Swingline Loan), the last day of each March, June, September and
December, (b) with respect to any Eurocurrency Loan or any Canadian Prime Rate
Loan, the last day of the Interest Period applicable to the Borrowing of which
such Loan is a part and, in the case of a Eurocurrency Loan with an Interest
Period of more than three months' duration, each day prior to the last day of
such Interest Period that occurs at intervals of three months' duration after
the first day of such Interest Period, (c) with respect to any Fixed Rate
Loan, the last day of the Interest Period applicable to the Borrowing of which
such
17
Loan is a part and, in the case of a Fixed Rate Loan with an Interest
Period of more than 90 days' duration (unless otherwise specified in the
applicable Competitive Bid Request), each day prior to the last day of such
Interest Period that occurs at intervals of 90 days' duration after the first
day of such Interest Period, and any other dates that are specified in the
applicable Competitive Bid Request as Interest Payment Dates with respect to
such Borrowing and (d) with respect to any Swingline Loan, the day that such
Loan is required to be repaid.
"Interest Period" means (a) with respect to any Eurocurrency
---------------
Borrowing, the period commencing on the date of such Borrowing and ending on
the numerically corresponding day in the calendar month that is one, two,
three or six months (or, with the consent of each Lender, nine or twelve
months) thereafter, as the relevant U.S. Borrower may elect, (b) with respect
to any Canadian Prime Rate Borrowing, the period commencing on the date of
such Borrowing and ending on the numerically corresponding day in the calendar
month that is one month thereafter, and (c) with respect to any Fixed Rate
Borrowing, the period (which shall not be less than seven days or more than
360 days) commencing on the date of such Borrowing and ending on the date
specified in the applicable Competitive Bid Request; provided, that (i) if any
--------
Interest Period would end on a day other than a Business Day, such Interest
Period shall be extended to the next succeeding Business Day unless, in the
case of a Eurocurrency Borrowing only, such next succeeding Business Day would
fall in the next calendar month, in which case such Interest Period shall end
on the next preceding Business Day and (ii) any Interest Period pertaining to
a Eurocurrency Borrowing that commences on the last Business Day of a calendar
month (or on a day for which there is no numerically corresponding day in the
last calendar month of such Interest Period) shall end on the last Business
Day of the last calendar month of such Interest Period. For purposes hereof,
the date of a Borrowing initially shall be the date on which such Borrowing is
made and, in the case of a Revolving Borrowing, thereafter shall be the
effective date of the most recent conversion or continuation of such
Borrowing.
"Judgment Currency" has the meaning assigned to such term in Section
-----------------
10.13.
"Lenders" means the Persons listed on Schedule 2.01 and any other
-------
Person that shall have become a
18
party hereto pursuant to an Assignment and Acceptance, other than any such
Person that ceases to be a party hereto pursuant to an Assignment and
Acceptance. Unless the context otherwise requires, the term "Lenders" includes
the Canadian Lenders and the Swingline Lenders.
"Leverage Ratio" means, for any day, the ratio of (i) Consolidated
--------------
Total Debt plus the Financed Portion at such day to (ii) Consolidated Total
Capitalization plus the Financed Portion at such day.
"LIBO Rate" means, with respect to any Eurocurrency Borrowing for
---------
any Interest Period, the rate appearing on Page 3750 (or in the case of a
Committed Currency Borrowing, the rate appearing on the Page for the
applicable Committed Currency) of the Telerate Service (or on any successor or
substitute page of such Service, or any successor to or substitute for such
Service, providing rate quotations comparable to those currently provided on
such page of such Service, as determined by the Administrative Agent from time
to time for purposes of providing quotations of interest rates applicable to
dollar deposits (or, in the case of a Committed Currency Borrowing, deposits
in the applicable Committed Currency) in the London interbank market) at
approximately 11:00 a.m., London time, two Business Days prior to the
commencement of such Interest Period, as the rate for dollar deposits (or the
applicable Committed Currency) with a maturity comparable to such Interest
Period. In the event that such rate is not available at such time for any
reason, then the "LIBO Rate" with respect to such Eurocurrency Borrowing for
---------
such Interest Period shall be the rate at which dollar deposits of $5,000,000
(or, in the case of a Committed Currency Borrowing, deposits in the applicable
Committed Currency in an amount the Dollar Equivalent of which is
approximately equal to $5,000,000) and for a maturity comparable to such
Interest Period are offered by the principal London office of the
Administrative Agent in immediately available funds in the London interbank
market at approximately 11:00 a.m., London time, two Business Days prior to
the commencement of such Interest Period.
"Lien" means, with respect to any asset, (a) any mortgage, deed of
----
trust, lien, pledge, hypothecation, encumbrance, charge or security interest
in, on or of such asset, (b) the interest of a vendor or a lessor under any
conditional sale agreement, capital lease or title retention agreement (or any
financing lease having substantially the
19
same economic effect as any of the foregoing) relating to such asset and (c)
in the case of securities, any purchase option, call or similar right of a
third party with respect to such securities.
"Loan Documents" means this Agreement, the Subsidiary Guarantee
--------------
Agreement, the Indemnity, Subrogation and Contribution Agreement and each
Acceptance, promissory note or Discount Note delivered pursuant to this
Agreement.
"Loan Parties" means the Borrowers and the Subsidiary Guarantors.
------------
"Loans" means (a) the loans made by the Lenders to the U.S.
-----
Borrowers pursuant to this Agreement and (b) the Canadian Loans.
"Margin" means, with respect to any Competitive Loan bearing
------
interest at a rate based on the LIBO Rate, the marginal rate of interest, if
any, to be added to or subtracted from the LIBO Rate to determine the rate of
interest applicable to such Loan, as specified by the Lender making such Loan
in its related Competitive Bid.
"Material Adverse Effect" means a material adverse effect on (a) the
-----------------------
business, assets, operations or financial condition of the Company and the
Subsidiaries taken as a whole, (b) the ability of any Loan Party to perform
any of its obligations under this Agreement or any other Loan Document or (c)
the rights of or benefits available to the Lenders under this Agreement or any
other Loan Document.
"Material Indebtedness" means Indebtedness (other than the Loans),
---------------------
or obligations in respect of one or more Hedging Agreements, of any one or
more of the Company and its Subsidiaries in an aggregate principal amount
exceeding $20,000,000. For purposes of determining Material Indebtedness, the
"principal amount" of the obligations of the Company or any Subsidiary in
respect of any Hedging Agreement at any time shall be the maximum aggregate
amount (giving effect to any netting agreements) that the Company or such
Subsidiary would be required to pay if such Hedging Agreement were terminated
at such time.
"Material Subsidiary" means the Delaware Borrower, the Canadian
-------------------
Borrower and each domestic Subsidiary that would be a "Significant Subsidiary"
of the Company within the meaning of Rule 1-02 under Regulation S-X
promulgated by
20
the Securities and Exchange Commission as in effect on the date hereof.
"Maturity Date" means November 22, 2001.
-------------
"Moody's" means Moody's Investors Service, Inc.
-------
"Multiemployer Plan" means a multiemployer plan as defined in
------------------
Section 4001(a)(3) of ERISA.
"Obligations" means the obligations of each of the Delaware Borrower
-----------
and the Canadian Borrower under this Agreement or any other Loan Document with
respect to the payment of (i) the principal of and interest on the Loans to
each such Borrower when and as due, whether at maturity, by acceleration, upon
one or more dates set for prepayment or otherwise, and (ii) all other monetary
obligations of each of the Delaware Borrower and the Canadian Borrower
hereunder.
"Other Taxes" means any and all present or future stamp or
-----------
documentary taxes or any other excise or property taxes, charges or similar
levies arising from any payment made hereunder or from the execution, delivery
or enforcement of, or otherwise with respect to, this Agreement or any other
Loan Documents.
"Payment Location" means an office, branch or other place of
----------------
business of any Borrower.
"PBGC" means the Pension Benefit Guaranty Corporation referred to
----
and defined in ERISA and any successor entity performing similar functions.
"Permitted Encumbrances" means:
----------------------
(a) Liens imposed by law for Taxes that are not yet due or are being
contested in compliance with Section 5.04;
(b) landlords', vendors', carriers', warehousemen's, mechanics',
materialmen's, repairmen's and other like Liens imposed by law, arising
in the ordinary course of business and securing obligations that are not
overdue by more than 30 days or are being contested in compliance with
Section 5.04;
21
(c) pledges and deposits made in the ordinary course of business in
compliance with workers' compensation, unemployment insurance and other
social security laws or regulations;
(d) deposits to secure (or to obtain letters of credit that secure)
the performance of bids, trade contracts, leases, statutory obligations,
surety and appeal bonds, performance bonds and other obligations of a
like nature, in each case in the ordinary course of business;
(e) easements, zoning restrictions, rights-of-way and similar
encumbrances on real property imposed by law or arising in the ordinary
course of business that do not secure any monetary obligations and do not
materially detract from the value of the affected property or interfere
with the ordinary conduct of business of the Company or any Subsidiary;
and
(f) leases or subleases granted to others in the ordinary course of
business that do not in the aggregate involve annual rental payments in
excess of $10,000,000;
provided that the term "Permitted Encumbrances" shall not include any Lien
--------
securing Indebtedness.
"Person" means any natural person, corporation, limited liability
------
company, trust, joint venture, association, company, partnership, Governmental
Authority or other entity.
"Plan" means any employee pension benefit plan (other than a
----
Multiemployer Plan) subject to the provisions of Title IV of ERISA or Section
412 or 401(a) of the Code or Section 302 of ERISA, and in respect of which the
Company or any ERISA Affiliate is (or, if such plan were terminated, would
under Section 4069 of ERISA be deemed to be) an "employer" as defined in
Section 3(5) of ERISA.
"Preliminary Form 10" means the draft Form 10 of Unisource Worldwide
-------------------
Holdings, Inc. submitted to the Securities and Exchange Commission on
September 23, 1996.
"Prime Rate" means the rate of interest per annum publicly announced
----------
from time to time by The Chase Manhattan Bank as its prime rate in effect at
its principal office in
22
New York City; each change in the Prime Rate shall be effective from and
including the date such change is publicly announced as being effective.
"Reference Lenders" shall mean Toronto Dominion Bank and The Chase
-----------------
Manhattan Bank of Canada.
"Reference Rate" means, with respect to any Acceptance to be
--------------
accepted by the Canadian Lenders on any date, the average of the discount
rates applicable to Acceptances to be accepted by the Reference Lenders on
such date, as determined by the Canadian Agent in accordance with Section
2.19(c).
"Register" has the meaning set forth in Section 10.04.
--------
"Related Parties" means, with respect to any specified Person, such
---------------
Person's Affiliates and the respective directors, officers, employees, agents
and advisors of such Person and such Person's Affiliates.
"Required Lenders" means, at any time, Lenders having Revolving
----------------
Credit Exposures and Unused Commitments representing at least 51% of the sum
of the total Revolving Credit Exposures and Unused Commitments at such time;
provided that, for purposes of declaring the Loans to be due and payable
--------
pursuant to Article VII, and for all purposes after the Loans become due and
payable pursuant to Article VII or the Commitments expire or terminate, the
outstanding Competitive Loans of the Lenders shall be included in their
respective Revolving Credit Exposures in determining the Required Lenders.
"Reset Date" has the meaning assigned to such term in Section
----------
1.05(a).
"Revolving Credit Exposure" means, with respect to any Lender at any
-------------------------
time, the sum of the outstanding principal amount of such Lender's Revolving
Loans (or the Dollar Equivalent thereof, in the case of Committed Currency
Loans and Canadian Loans) and Swingline Exposure at such time.
"Revolving Loan" means a Loan made pursuant to Section 2.01 or 2.19.
--------------
"Securitization" means the transfer or pledge of assets or interests
--------------
in assets to a trust, partnership,
23
corporation or other entity, which transfer or pledge is funded by such entity
in whole or in part by the issuance of instruments or securities that are paid
principally from the cash flow derived from such assets or interests in
assets.
"S&P" means Standard & Poor's Ratings Services.
---
"Spin-Off" means the distribution by ALCO to the holders of its
--------
common stock of all outstanding shares of common stock of the Company and all
related transactions contemplated by the Preliminary Form 10, including
execution and delivery of any agreements between ALCO or any of its
subsidiaries, on the one hand, and the Company or any Subsidiary, on the
other.
"Spin-Off Information" means the Preliminary Form 10 and the pro
--------------------
forma financial statements of the Company after the Spin-Off, both of which
have been delivered to the Lenders prior to the date hereof.
"Statutory Reserve Rate" means, with respect to any currency, a
----------------------
fraction (expressed as a decimal), the numerator of which is the number one
and the denominator of which is the number one minus the aggregate of the
maximum reserve, liquid asset or similar percentages (including any marginal,
special, emergency or supplemental reserves) expressed as a decimal
established any Governmental Authority of the jurisdiction of such currency to
which banks in such jurisdiction are subject for any category of deposits or
liabilities customarily used to fund loans in such currency or by reference to
which interest rates applicable to Loans in such currency are determined.
Such reserve, liquid asset or similar percentages shall, in the case of
dollars, include those imposed pursuant to Regulation D of the Board.
Eurocurrency Loans shall be deemed to be subject to such reserve requirements
without benefit of or credit for proration, exemptions or offsets that may be
available from time to time to any Lender under Regulation D or any other
applicable law, rule or regulation. The Statutory Reserve Rate shall be
adjusted automatically on and as of the effective date of any change in any
reserve percentage.
"subsidiary" means, with respect to any Person (the "parent") at any
---------- ------
date, any corporation, limited liability company, partnership, association or
other entity the accounts of which would be consolidated with those of the
parent in the parent's consolidated financial statements
24
if such financial statements were prepared in accordance with GAAP as of such
date, as well as any other corporation, limited liability company,
partnership, association or other entity (a) of which securities or other
ownership interests representing more than 50% of the equity or more than 50%
of the ordinary voting power or, in the case of a partnership, more than 50%
of the general partnership interests are, as of such date, owned, controlled
or held, or (b) that is, as of such date, otherwise Controlled, by the parent
or one or more subsidiaries of the parent or by the parent and one or more
subsidiaries of the parent.
"Subsidiary" means any subsidiary of the Company.
----------
"Subsidiary Guarantee Agreement" means the Subsidiary Guarantee
------------------------------
Agreement in the form of Exhibit D, made by one or more of the Subsidiary
Guarantors in favor of the Administrative Agent for the benefit of the
Lenders.
"Subsidiary Guarantors" means each Person listed on Schedule 1.01(b)
---------------------
and each other Person that becomes party to a Subsidiary Guarantee Agreement
as a Subsidiary Guarantor, and the permitted successors and assigns of each
such Person.
"Swingline Commitment" means, with respect to each Swingline Lender,
--------------------
the commitment of such Swingline Lender to make Swingline Loans hereunder.
The initial amount of each Swingline Lender's Swingline Commitment is set
forth on Schedule 2.01, or in the Assignment and Acceptance pursuant to which
such Swingline Lender shall have assumed its Swingline Commitment, as
applicable.
"Swingline Exposure" means, at any time, the aggregate principal
------------------
amount of all Swingline Loans outstanding at such time. The Swingline
Exposure of any Lender at any time shall be its pro rata percentage based on
the Unused Commitments of the total Swingline Loans at such time.
"Swingline Lenders" means The Chase Manhattan Bank, Bank of America
-----------------
Illinois, CoreStates Bank, N.A., First Union National Bank, PNC Bank, N.A. and
Toronto Dominion Bank, each in its capacity as lender of Swingline Loans
hereunder.
"Swingline Loan" means a Loan in dollars made pursuant to Section
--------------
2.05.
25
"Swingline Rate" means, for any day, the overnight money market rate
--------------
determined by the relevant Swingline Lender in good faith.
"Taxes" means any and all present or future taxes, levies, imposts,
-----
duties, deductions, charges or withholdings imposed by any Governmental
Authority.
"Three-Month Secondary CD Rate" means, for any day, the secondary
-----------------------------
market rate for three-month certificates of deposit reported as being in
effect on such day (or, if such day is not a Business Day, the next preceding
Business Day) by the Board through the public information telephone line of
the Federal Reserve Bank of New York (which rate will, under the current
practices of the Board, be published in Federal Reserve Statistical Release
H.15(519) during the week following such day) or, if such rate is not so
reported on such day or such next preceding Business Day, the average of the
secondary market quotations for three-month certificates of deposit of major
money center banks in New York City received at approximately 10:00 a.m., New
York City time, on such day (or, if such day is not a Business Day, on the
next preceding Business Day) by the Administrative Agent from three negotiable
certificate of deposit dealers of recognized standing selected by it.
"Transactions" means the execution, delivery and performance by the
------------
Loan Parties of the Loan Documents, the borrowing of Loans and the use of the
proceeds thereof.
"Type", when used in reference to any Loan or Borrowing, refers to
----
whether the rate of interest on such Loan, or on the Loans comprising such
Borrowing, is determined by reference to the LIBO Rate, the Alternate Base
Rate, the Canadian Prime Rate, the discount rate applicable to Acceptances or,
in the case of a Competitive Loan or Borrowing, the LIBO Rate or a Fixed Rate.
"Unused Commitments" means that portion of the Commitments that has
------------------
not been drawn in the form of Revolving Loans, and shall be determined based
on the assumption that no Lender has defaulted in making any Revolving Loan
required to be made by it hereunder. The Unused Commitment of any Lender at
any time shall be the amount of such Lender's Commitment less the amount of
such Lender's Revolving Loans.
26
"U.S. Borrowers" has the meaning assigned to such term in the
--------------
preamble.
"Withdrawal Liability" means liability to a Multiemployer Plan as a
--------------------
result of a complete or partial withdrawal from such Multiemployer Plan, as
such terms are defined in Part I of Subtitle E of Title IV of ERISA.
SECTION 1.02. Classification of Loans and Borrowings. For purposes
---------------------------------------
of this Agreement, Loans may be classified and referred to by Class (e.g., a
----
"Revolving Loan") or by Type (e.g., a "Eurocurrency Loan") or by Class and
----
Type (e.g., a "Eurocurrency Revolving Loan"). Borrowings also may be
----
classified and referred to by Class (e.g., a "Revolving Borrowing") or by Type
----
(e.g., a "Eurocurrency Borrowing") or by Class and Type (e.g., a "Eurocurrency
---- ----
Revolving Borrowing").
SECTION 1.03. Terms Generally. The definitions of terms herein
----------------
shall apply equally to the singular and plural forms of the terms defined.
Whenever the context may require, any pronoun shall include the corresponding
masculine, feminine and neuter forms. The words "include", "includes" and
"including" shall be deemed to be followed by the phrase "without limitation".
The word "will" shall be construed to have the same meaning and effect as the
word "shall". Unless the context requires otherwise (a) any definition of or
reference to any agreement, instrument or other document herein shall be
construed as referring to such agreement, instrument or other document as from
time to time amended, supplemented or otherwise modified (subject to any
restrictions on such amendments, supplements or modifications set forth
herein), (b) any reference herein to any Person shall be construed to include
such Person's successors and assigns, (c) the words "herein", "hereof" and
"hereunder", and words of similar import, shall be construed to refer to this
Agreement in its entirety and not to any particular provision hereof, (d) all
references herein to Articles, Sections, Exhibits and Schedules shall be
construed to refer to Articles and Sections of, and Exhibits and Schedules to,
this Agreement and (e) the words "asset" and "property" shall be construed to
have the same meaning and effect and to refer to any and all tangible and
intangible assets and properties, including cash, securities, accounts and
contract rights.
SECTION 1.04. Accounting Terms; GAAP. Except as otherwise
-----------------------
expressly provided herein, all terms of an
27
accounting or financial nature shall be construed in accordance with GAAP, as
in effect from time to time; provided that, if the Company notifies the
--------
Administrative Agent that the Company requests an amendment to any provision
hereof to eliminate the effect of any change occurring after the date hereof
in GAAP or in the application thereof on the operation of such provision (or
if the Administrative Agent notifies the Company that the Required Lenders
request an amendment to any provision hereof for such purpose), regardless of
whether any such notice is given before or after such change in GAAP or in the
application thereof, then such provision shall be interpreted on the basis of
GAAP as in effect and applied immediately before such change shall have become
effective until such notice shall have been withdrawn or such provision
amended in accordance herewith.
SECTION 1.05. Exchange Rates. (a) Not later than 1:00 p.m., New
---------------
York City time, on each Calculation Date, (i) if any Committed Currency Loan
is outstanding, the Administrative Agent shall determine the Exchange Rate as
of such Calculation Date with respect to each Committed Currency and shall
give notice thereof to the Lenders and the Company, and (ii) if any Canadian
Loan is outstanding, the Canadian Agent shall determine the Canadian Exchange
Rate as of such Calculation Date with respect to Canadian Dollars and shall
give notice thereof to the Administrative Agent, the Lenders and the Company.
The Exchange Rates and Canadian Exchange Rates so determined shall become
effective on the first Business Day or Canadian Business Day, as applicable,
immediately following the relevant Calculation Date (a "Reset Date"), shall
remain effective until the next succeeding Reset Date, and shall for all
purposes of this Agreement (other than Section 2.07(e), Section 2.13(i),
Section 10.13 or any other provision expressly requiring the use of a current
Exchange Rate or Canadian Exchange Rate, as applicable) be the Exchange Rates
or Canadian Exchange Rate, as applicable employed in converting any amounts
between dollars and Committed Currencies or Canadian Dollars, as applicable.
(b) Not later than 5:00 p.m., New York City time, on each Reset
Date and each borrowing date with respect to Committed Currency Loans, the
Administrative Agent shall (i) determine the Dollar Equivalent of the
aggregate principal amount of the Committed Currency Loans then outstanding
(after giving effect to any Committed Currency Loans made or repaid on such
date) and (ii) notify the
28
Lenders and the Company of the results of such determination.
(c) Not later than 5:00 p.m., New York City time, on each Reset
Date and each borrowing date with respect to Canadian Loans, the Canadian
Agent shall (i) determine the Canadian Dollar Equivalent of the aggregate
principal amount of the Canadian Loans then outstanding (after giving effect
to any Canadian Loans to be made or repaid on such date) and (ii) notify the
Administrative Agent, the Lenders and the Company of the results of such
determination.
ARTICLE II
The Credits
-----------
SECTION 2.01. Commitments. (a) Subject to the terms and conditions
------------
set forth herein, each Lender agrees to make Revolving Loans denominated in
dollars or in any Committed Currency to any U.S. Borrower from time to time
during the Availability Period in an aggregate principal amount that will not
result in (i) such Lender's Revolving Credit Exposure exceeding such Lender's
Commitment, (ii) the sum of the total Revolving Credit Exposures plus the
aggregate principal amount of outstanding Competitive Loans exceeding the
total Commitments or (iii) the Dollar Equivalent of the aggregate principal
amount of all outstanding Committed Currency Loans exceeding $100,000,000.
Notwithstanding any other provision contained herein, in the event that any
Lender gives notice to the Administrative Agent that it is unable to fund
Committed Currency Loans at a reasonable cost to it, the Administrative Agent
shall, until such notice is withdrawn and to the extent necessary in order to
excuse such Lender from making any Committed Currency Loans and to continue to
make available to the U.S. Borrowers the full aggregate amount of the
Commitments, reallocate from time to time among the Lenders the outstanding
Loans denominated in dollars and the Committed Currency Loans; provided that,
--------
in the event that the Lenders the Commitments of which aggregate at least 66-
2/3% give such notice to the Administrative Agent, the Lenders shall not be
required to make any Committed Currency Loans until any such notice have been
withdrawn so that the Lenders the Commitments of which aggregate at least 66-
2/3% have either not given any such notice or have withdrawn any such notice.
29
(b) Subject to the terms and conditions set forth herein, each
Canadian Lender agrees to make Canadian Loans denominated in Canadian Dollars
to the Canadian Borrower from time to time during the Availability Period in
an aggregate principal amount that will not result in (i) the aggregate
principal amount of outstanding Canadian Loan made by such Canadian Lender
exceeding such Canadian Lender's Canadian Commitment, (ii) such Lender's
Revolving Credit Exposure exceeding such Lender's Commitment, (iii) the sum of
the total Revolving Credit Exposures exceeding the total Commitments or (iv)
the Dollar Equivalent of the aggregate principal amount of all Canadian Loans
exceeding $100,000,000. Utilization of a Canadian Lender's Canadian Commitment
shall constitute utilization of such Canadian Lender's Commitment for purposes
hereof.
(c) Within the foregoing limits and subject to the terms and
conditions set forth herein, the Borrowers may borrow, prepay and reborrow
Revolving Loans.
SECTION 2.02. Loans and Borrowings. (a) Each Revolving Loan
---------------------
(other than Canadian Loans) shall be made as part of a Borrowing consisting of
Revolving Loans denominated in the same currency and made by the Lenders
ratably in accordance with their respective Unused Commitments. Each Canadian
Loan shall be made as part of a Borrowing consisting of Canadian Loans made by
the Canadian Lenders ratably in accordance with their Canadian Commitments.
Each Acceptance shall be drawn in accordance with the procedures set forth in
Section 2.19. Each Competitive Loan shall be made in accordance with the
procedures set forth in Section 2.04. The failure of any Lender to make any
Loan required to be made by it shall not relieve any other Lender of its
obligations hereunder; provided that the Commitments, the Canadian Commitments
--------
and Competitive Bids of the Lenders are several and no Lender shall be
responsible for any other Lender's failure to make Loans as required.
(b) Subject to Section 2.13, (i) each Revolving Borrowing shall be
comprised entirely of ABR Loans, Eurocurrency Loans in a single currency,
Acceptances or Canadian Prime Rate Loans as the applicable Borrower may
request in accordance herewith, and (ii) each Competitive Borrowing shall be
comprised entirely of Eurocurrency Loans in a single currency or Fixed Rate
Loans as the applicable U.S. Borrower may request in accordance herewith.
Each Swingline Borrowing shall be a Swingline Rate Loan. Each
30
Lender at its option may make any Eurocurrency Loan by causing any domestic or
foreign branch or Affiliate of such Lender to make such Loan; provided that
--------
any exercise of such option shall not affect the obligation of any Borrower to
repay such Loan in accordance with the terms of this Agreement.
(c) At the commencement of each Interest Period for any
Eurocurrency Revolving Borrowing, such Borrowing shall be in an aggregate
amount that is an integral multiple of $1,000,000 and not less than
$10,000,000 (or the Dollar Equivalent thereof). At the time that each ABR
Revolving Borrowing is made, such Borrowing shall be in an aggregate amount
that is an integral multiple of $1,000,000 and not less than $10,000,000;
provided that an ABR Revolving Borrowing may be in an aggregate amount that is
--------
equal to the entire unused balance of the total Commitments. Each Canadian
Prime Rate Loan shall be in an aggregate amount that is an integral multiple
of Cdn.$1,000,000 and not less than Cdn.$5,000,000. Each Competitive
Borrowing shall be in an aggregate amount that is an integral multiple of
$1,000,000 and not less than $20,000,000. Each Swingline Loan shall be in an
amount that is an integral multiple of $1,000,000 and not less than
$5,000,000. Borrowings of more than one Type and Class may be outstanding at
the same time; provided that there shall not at any time be more than a total
--------
of 15 Eurocurrency Revolving Borrowings outstanding.
(d) Notwithstanding any other provision of this Agreement, no
Borrower shall be entitled to request, or to elect to convert or continue, any
Borrowing if the Interest Period requested with respect thereto would end
after the Maturity Date.
SECTION 2.03. Requests for Revolving Borrowings. (a) To request a
----------------------------------
Revolving Borrowing (other than a Canadian Borrowing), a U.S. Borrower shall
notify the Administrative Agent of such request by telephone (a) in the case
of a Eurocurrency Revolving Borrowing (other than a Committed Currency
Borrowing), not later than 11:00 a.m., New York City time, three Business Days
before the date of the proposed Borrowing, (b) in the case of a Committed
Currency Borrowing, not later than 10:00 a.m., London time, three Business
Days before the date of the proposed Borrowing (or at such other time as shall
be specified in the Alternate Procedures), or (c) in the case of an ABR
Borrowing, not later than 10:30 a.m., New York City time, on the same Business
Day of the proposed Borrowing. To request
31
Acceptances, the Canadian Borrower shall follow the procedures set forth in
Section 2.19.
(b) To request a Canadian Prime Rate Borrowing, the Canadian
Borrower shall notify the Canadian Agent of such request by telephone not
later than 11:00 a.m., Toronto time, on the same Canadian Business Day of the
proposed Borrowing.
(c) Each such telephonic Borrowing Request shall be irrevocable and
shall be confirmed promptly by hand delivery or telecopy to the Administrative
Agent, or the Canadian Agent, as applicable, of a written Borrowing Request in
a form approved by the Administrative Agent or the Canadian Agent, as
applicable, and signed by the applicable Borrower. Each such telephonic and
written Borrowing Request shall specify the following information in
compliance with Section 2.02:
(i) the aggregate amount of the requested Borrowing;
(ii) the date of such Borrowing, which shall be a Business Day or a
Canadian Business Day, as applicable;
(iii) whether such Borrowing is to be an ABR Borrowing, a
Eurocurrency Revolving Borrowing or a Canadian Prime Rate Borrowing;
(iv) in the case of a Eurocurrency Revolving Borrowing, the initial
Interest Period to be applicable thereto, which shall be a period
contemplated by the definition of the term "Interest Period", and the
currency of such Borrowing, which shall be dollars or a Committed
Currency; and
(v) the location and number of the relevant Borrower's account to
which funds are to be disbursed, which shall comply with the requirements
of Section 2.07.
If no election as to the Type of Revolving Borrowing is specified, then the
requested Revolving Borrowing shall be an ABR Borrowing. If no currency is
specified with respect to any requested Eurocurrency Revolving Borrowing, then
the relevant U.S. Borrower shall be deemed to have selected dollars. If no
Interest Period is specified with respect to any requested Eurocurrency
Revolving Borrowing, then the
32
relevant Borrower shall be deemed to have selected an Interest Period of one
month's duration. Promptly following receipt of a Borrowing Request for a
Revolving Borrowing (other than a Canadian Borrowing) in accordance with this
Section, the Administrative Agent shall advise each Lender of the details
thereof and of the amount of such Lender's Loan to be made as part of the
requested Borrowing. Promptly following receipt of a Borrowing Request for a
Canadian Prime Rate Borrowing in accordance with this Section, the Canadian
Agent shall advise the Administrative Agent and each Canadian Lender of the
details thereof and of the amount of such Canadian Lender's Canadian Prime
Rate Loan to be made as part of the requested Borrowing.
SECTION 2.04. Competitive Bid Procedure. (a) Subject to the terms
-------------------------
and conditions set forth herein, from time to time during the Availability
Period any U.S. Borrower may request Competitive Bids for Competitive Loans
denominated in dollars and may (but shall not have any obligation to) accept
Competitive Bids and borrow Competitive Loans; provided that the sum of the
--------
total Revolving Credit Exposures plus the aggregate principal amount of
outstanding Competitive Loans at any time shall not exceed the total
Commitments. To request Competitive Bids, a U.S. Borrower shall notify the
Administrative Agent of such request by telephone, in the case of a
Eurocurrency Borrowing, not later than 11:00 a.m., New York City time, four
Business Days before the date of the proposed Borrowing and, in the case of a
Fixed Rate Borrowing, not later than 10:00 a.m., New York City time, one
Business Day before the date of the proposed Borrowing; provided that the U.S.
--------
Borrowers may submit in the aggregate up to (but not more than) four
Competitive Bid Requests on the same day, but a Competitive Bid Request shall
not be made within five Business Days after the date of any previous
Competitive Bid Request, unless any and all such previous Competitive Bid
Requests shall have been withdrawn or all Competitive Bids received in
response thereto rejected. Each such telephonic Competitive Bid Request shall
be confirmed promptly by hand delivery or telecopy to the Administrative Agent
of a written Competitive Bid Request in a form approved by the Administrative
Agent and signed by the applicable U.S. Borrower. Each such telephonic and
written Competitive Bid Request shall specify the following information in
compliance with Section 2.02:
(i) the aggregate amount of the requested Borrowing;
33
(ii) the date of such Borrowing, which shall be a Business Day;
(iii) whether such Borrowing is to be a Eurocurrency Borrowing or a
Fixed Rate Borrowing;
(iv) the Interest Period to be applicable to such Borrowing, which
shall be a period contemplated by the definition of the term "Interest
Period"; and
(v) the location and number of the relevant U.S. Borrower's
account to which funds are to be disbursed, which shall comply with the
requirements of Section 2.07.
Promptly following receipt of a Competitive Bid Request in accordance with
this Section, the Administrative Agent shall notify the Lenders of the details
thereof by telecopy, inviting the Lenders to submit Competitive Bids.
(b) Each Lender may (but shall not have any obligation to) make
one or more Competitive Bids to any U.S. Borrower in response to a Competitive
Bid Request. Each Competitive Bid by a Lender must be in a form approved by
the Administrative Agent and must be received by the Administrative Agent by
telecopy, in the case of a Eurocurrency Competitive Borrowing, not later than
9:30 a.m., New York City time, three Business Days before the proposed date of
such Competitive Borrowing, and in the case of a Fixed Rate Borrowing, not
later than 9:30 a.m., New York City time, on the proposed date of such
Competitive Borrowing. Competitive Bids that do not conform substantially to
the form approved by the Administrative Agent may be rejected by the
Administrative Agent, and the Administrative Agent shall notify the applicable
Lender as promptly as practicable. Each Competitive Bid shall specify (i) the
principal amount (which shall be a minimum of $5,000,000 and an integral
multiple of $1,000,000 and which may equal the entire principal amount of the
Competitive Borrowing requested by the applicable U.S. Borrower) of the
Competitive Loan or Loans that the Lender is willing to make, (ii) the
Competitive Bid Rate or Rates at which the Lender is prepared to make such
Loan or Loans (expressed as a percentage rate per annum in the form of a
decimal to no more than four decimal places) and (iii) the Interest Period
applicable to each such Loan and the last day thereof.
34
(c) The Administrative Agent shall promptly notify the applicable
U.S. Borrower by telecopy of the Competitive Bid Rate and the principal amount
specified in each Competitive Bid and the identity of the Lender that shall
have made such Competitive Bid.
(d) Subject only to the provisions of this paragraph, a U.S.
Borrower may in its sole and absolute discretion accept or reject any
Competitive Bid. The relevant U.S. Borrower shall notify the Administrative
Agent by telephone, confirmed by telecopy in a form approved by the
Administrative Agent, whether and to what extent it has decided to accept or
reject each Competitive Bid, in the case of a Eurocurrency Competitive
Borrowing, not later than 10:30 a.m., New York City time, three Business Days
before the date of the proposed Competitive Borrowing, and in the case of a
Fixed Rate Borrowing, not later than 10:30 a.m., New York City time, on the
proposed date of the Competitive Borrowing; provided that (i) the failure of
--------
such U.S. Borrower to give such notice shall be deemed to be a rejection of
each Competitive Bid, (ii) such U.S. Borrower shall not accept a Competitive
Bid made at a particular Competitive Bid Rate if such U.S. Borrower rejects a
Competitive Bid made at a lower Competitive Bid Rate, (iii) the aggregate
amount of the Competitive Bids accepted by such U.S. Borrower shall not exceed
the aggregate amount of the requested Competitive Borrowing specified in the
related Competitive Bid Request, (iv) to the extent necessary to comply with
clause (iii) above, such U.S. Borrower may accept Competitive Bids at the same
Competitive Bid Rate in part, which acceptance, in the case of multiple
Competitive Bids at such Competitive Bid Rate, shall be made pro rata in
accordance with the amount of each such Competitive Bid, and (v) except
pursuant to clause (iv) above, no Competitive Bid shall be accepted for a
Competitive Loan unless such Competitive Loan is in a minimum principal amount
of $5,000,000 and an integral multiple of $1,000,000; provided further that
----------------
if a Competitive Loan must be in an amount less than $5,000,000 because of the
provisions of clause (iv) above, such Competitive Loan may be for a minimum of
$1,000,000 or any integral multiple thereof, and in calculating the pro rata
allocation of acceptances of portions of multiple Competitive Bids at a
particular Competitive Bid Rate pursuant to clause (iv) the amounts shall be
rounded to integral multiples of $1,000,000 in a manner determined by such
U.S. Borrower. A notice given by any U.S. Borrower pursuant to this paragraph
shall be irrevocable.
35
(e) The Administrative Agent shall promptly notify each bidding
Lender by telecopy whether or not its Competitive Bid has been accepted (and,
if so, the amount and Competitive Bid Rate so accepted), and each successful
bidder will thereupon become bound, subject to the terms and conditions
hereof, to make the Competitive Loan in respect of which its Competitive Bid
has been accepted.
(f) If the Administrative Agent shall elect to submit a Competitive
Bid in its capacity as a Lender, it shall submit such Competitive Bid directly
to the relevant U.S. Borrower at least one quarter of an hour earlier than the
time by which the other Lenders are required to submit their Competitive Bids
to the Administrative Agent pursuant to paragraph (b) of this Section.
SECTION 2.05. Swingline Loans. (a) Subject to the terms and
----------------
conditions set forth herein, each Swingline Lender agrees to make Swingline
Loans in dollars to any U.S. Borrower from time to time during the
Availability Period, in an aggregate principal amount at any time outstanding
that will not result in (i) such Swingline Lender's Swingline Exposure
exceeding such Swingline Lender's Swingline Commitment, (ii) the aggregate
principal amount of outstanding Swingline Loans exceeding $100,000,000 or
(iii) the sum of the total Revolving Credit Exposures plus the aggregate
principal amount of outstanding Competitive Loans exceeding the total
Commitments; provided that no Swingline Lender shall be required to make a
--------
Swingline Loan to refinance an outstanding Swingline Loan. Within the
foregoing limits and subject to the terms and conditions set forth herein, any
U.S. Borrower may borrow, prepay and reborrow Swingline Loans.
(b) To request a Swingline Loan, a U.S. Borrower shall notify the
Administrative Agent of such request by telephone (confirmed by telecopy), not
later than 12:00 noon, New York City time, on the day of a proposed relevant
Swingline Loan. Each such notice shall be irrevocable and shall specify the
requested date (which shall be a Business Day) and amount of the requested
Swingline Loan. The Administrative Agent will promptly advise the relevant
Swingline Lender of any such notice received from any U.S. Borrower. The
relevant Swingline Lender shall make such Swingline Loan available to such
U.S. Borrower by means of a credit by 3:00 p.m., New York City time, on the
requested date of such Swingline Loan, to a dollar account designated
36
in writing by the Borrower not less than one Business Day prior to such Loan.
(c) The relevant Swingline Lender may by written notice given to
the Administrative Agent not later than 10:00 a.m., New York City time, on any
Business Day require the Lenders to acquire participations on such Business
Day in all or a portion of the Swingline Loans outstanding. Such notice shall
specify the aggregate amount of Swingline Loans in which Lenders will
participate. Promptly upon receipt of such notice, the Administrative Agent
will give notice thereof to each Lender, specifying in such notice such
Lender's pro rata percentage of Unused Commitments of such Swingline Loan or
Loans. Each Lender hereby absolutely and unconditionally agrees, upon receipt
of notice as provided above, to pay to the Administrative Agent, for the
account of the relevant Swingline Lender, such Lender's pro rata percentage of
Unused Commitments of such Swingline Loan or Loans. Each Lender acknowledges
and agrees that its obligation to acquire participations in Swingline Loans
pursuant to this paragraph is absolute and unconditional and shall not be
affected by any circumstance whatsoever, including the occurrence and
continuance of a Default or reduction or termination of the Commitments, and
that each such payment shall be made without any offset, abatement,
withholding or reduction whatsoever. Each Lender shall comply with its
obligation under this paragraph by wire transfer of immediately available
funds, in the same manner as provided in Section 2.06 with respect to Loans
made by such Lender (and Section 2.06 shall apply, mutatis mutandis, to the
------- --------
payment obligations of the Lenders), and the Administrative Agent shall
promptly pay to the relevant Swingline Lender the amounts so received by it
from the Lenders. The Administrative Agent shall notify the relevant Borrower
of any participations in any Swingline Loan acquired pursuant to this
paragraph, and thereafter payments in respect of such Swingline Loan shall be
made to the Administrative Agent and not to the relevant Swingline Lender. Any
amounts received by any Swingline Lender from a Borrower (or other party on
behalf of a Borrower) in respect of a Swingline Loan after receipt by the
relevant Swingline Lender of the proceeds of a sale of participations therein
shall be promptly remitted to the Administrative Agent; any such amounts
received by the Administrative Agent shall be promptly remitted by the
Administrative Agent to the Lenders that shall have made their payments
pursuant to this paragraph and to the relevant Swingline Lender, as their
interests may appear. The purchase of participations in a
37
Swingline Loan pursuant to this paragraph shall not relieve the relevant
Borrower of any default in the payment thereof.
SECTION 2.06. Funding of Borrowings. (a) Each Lender shall make
----------------------
each Loan (other than a Committed Currency Loan and a Canadian Loan) to be
made by it hereunder on the proposed date thereof by wire transfer of
immediately available funds by 12:00 noon, New York City time, to the account
of the Administrative Agent most recently designated by it for such purpose by
notice to the Lenders; provided that Swingline Loans shall be made as provided
--------
in Section 2.05. The Administrative Agent will make such Loans available to
the relevant U.S. Borrower by promptly crediting the amounts so received, in
like funds, to an account of the Company maintained with the Administrative
Agent in New York City and designated by the relevant U.S. Borrower in the
applicable Borrowing Request or Competitive Bid Request. Each Lender shall
make each Committed Currency Loan to be made by it hereunder on the proposed
date thereof by wire transfer of such immediately available funds as may then
be customary for the settlement of international transactions in the
applicable Committed Currency, by 11:00 a.m., London time, to the account of
the Administrative Agent most recently designated by it for such purpose by
notice to the Lenders (or by such other time and to such other account as
shall be specified in the Alternate Procedures). The Administrative Agent will
make such Committed Currency Loans available to the relevant U.S. Borrower by
promptly crediting the amounts so received, in like funds, to an account of
the Company maintained with the Administrative Agent in London (or in such
other city as shall be designated in the Alternate Procedures) and designated
by such U.S. Borrower in the applicable Borrowing Request. Each Canadian
Lender shall make each Canadian Prime Rate Loan to be made by it hereunder on
the proposed date thereof by wire transfer of immediately available funds by
2:00 p.m., Toronto time, to the account of the Canadian Agent most recently
designated by it for such purpose by notice to the Canadian Lenders. The
Canadian Agent will make such Canadian Prime Rate Loans available to the
Canadian Borrower by promptly crediting the amounts so received, in like
funds, to an account of the Canadian Borrower maintained with the Canadian
Agent in Toronto and designated by the Canadian Borrower in the applicable
Borrowing Request.
(b) Unless the Administrative Agent or the Canadian Agent, as
applicable, shall have received notice
38
from a Lender prior to the proposed date of any Borrowing that such Lender
will not make available to the Administrative Agent or the Canadian Agent, as
applicable, such Lender's share of such Borrowing, the Administrative Agent or
the Canadian Agent, as applicable, may assume that such Lender has made such
share available on such date in accordance with paragraph (a) of this Section
and may, in reliance upon such assumption, make available to the relevant
Borrower a corresponding amount. In such event, if a Lender has not in fact
made its share of the applicable Borrowing available to the Administrative
Agent or the Canadian Agent, as applicable, then the applicable Lender and the
relevant Borrower severally agree to pay to the Administrative Agent or the
Canadian Agent, as applicable, forthwith on demand such corresponding amount
with interest thereon, for each day from and including the date such amount is
made available to the applicable Borrower to but excluding the date of payment
to the Administrative Agent, at (i) in the case of such Lender, (x) the
Federal Funds Effective Rate (in the case of a Borrowing in dollars) and (y)
the rate reasonably determined by the Administrative Agent or Canadian Agent,
as applicable, to be the cost to it of funding such amount (in the case of a
Borrowing in Canadian Dollars or a Committed Currency) or (ii) in the case of
such Borrower, the interest rate applicable to the subject Loan. If such
Lender pays such amount to the Administrative Agent, then such amount shall
constitute such Lender's Loan included in such Borrowing.
SECTION 2.07. Interest Elections. (a) Each Revolving Borrowing
-------------------
(other than Canadian Loans) initially shall be of the Type specified in the
applicable Borrowing Request and, in the case of a Eurocurrency Revolving
Borrowing, shall have an initial Interest Period as specified in such
Borrowing Request. Thereafter, the relevant Borrower may elect to convert
such Borrowing to a different Type or to continue such Borrowing and, in the
case of a Eurocurrency Revolving Borrowing, may elect Interest Periods
therefor, all as provided in this Section. A Borrower may elect different
options with respect to different portions of the affected Borrowing, in which
case each such portion shall be allocated ratably among the Lenders holding
the Loans comprising such Borrowing, and the Loans comprising each such
portion shall be considered a separate Borrowing. This Section shall not
apply to Competitive Borrowings or Swingline Borrowings, which may not be
converted or continued. Notwithstanding any contrary provision herein, this
Section shall not be construed to
39
permit any U.S. Borrower to change the currency of any Borrowing or to convert
any Committed Currency Borrowing to an ABR Borrowing.
(b) To make an election pursuant to this Section, a Borrower shall
notify the Administrative Agent of such election by telephone by the time that
a Borrowing Request would be required under Section 2.03 if such Borrower were
requesting a Revolving Borrowing of the Type resulting from such election to
be made on the effective date of such election. Each such telephonic Interest
Election Request shall be irrevocable and shall be confirmed promptly by hand
delivery or telecopy to the Administrative Agent or the Canadian Agent, as
applicable, of a written Interest Election Request in a form approved by the
Administrative Agent or the Canadian Agent, as applicable, and signed by the
relevant Borrower.
(c) Each telephonic and written Interest Election Request shall
specify the following information in compliance with Section 2.02:
(i) the Borrowing to which such Interest Election Request applies
and, if different options are being elected with respect to different
portions thereof, the portions thereof to be allocated to each resulting
Borrowing (in which case the information to be specified pursuant to
clauses (iii) and (iv) below shall be specified for each resulting
Borrowing);
(ii) the effective date of the election made pursuant to such
Interest Election Request, which shall be a Business Day;
(iii) whether the resulting Borrowing is to be an ABR Borrowing or a
Eurocurrency Borrowing; and
(iv) if the resulting Borrowing is a Eurocurrency Borrowing, the
Interest Period to be applicable thereto after giving effect to such
election, which shall be a period contemplated by the definition of the
term "Interest Period".
If any such Interest Election Request requests a Eurocurrency Borrowing but
does not specify an Interest Period, then such Borrower shall be deemed to
have selected an Interest Period of one month's duration.
40
(d) Promptly following receipt of an Interest Election Request, the
Administrative Agent shall advise each Lender of the details thereof and of
such Lender's portion of each resulting Borrowing.
(e) If the relevant Borrower fails to deliver a timely Interest
Election Request with respect to a Eurocurrency Revolving Borrowing prior to
the end of the Interest Period applicable thereto, then, unless such Borrowing
is repaid as provided herein, at the end of such Interest Period such
Borrowing shall be converted to an ABR Borrowing (unless such Borrowing is a
Committed Currency Borrowing, in which case such Borrowing shall become due
and payable on the last day of such Interest Period). Notwithstanding any
contrary provision hereof, if an Event of Default has occurred and is
continuing and the Administrative Agent, at the request of the Required
Lenders, so notifies the Company, then, so long as an Event of Default is
continuing (i) no outstanding Revolving Borrowing may be converted to or
continued as a Eurocurrency Borrowing, (ii) unless repaid, each Eurocurrency
Revolving Borrowing in dollars shall be converted to an ABR Borrowing at the
end of the Interest Period applicable thereto and (iii) each Committed
Currency Borrowing shall be converted into an ABR Loan at the Exchange Rate
determined by the Administrative Agent on the last day of the Interest Period
applicable thereto.
(f) Each Canadian Loan initially shall be of the Type specified in
the applicable Borrowing Request and, in the case of a Eurocurrency Revolving
Borrowing, shall have an initial Interest Period as specified in such
Borrowing Request. Thereafter, the Canadian Borrower may elect to convert
such Borrowing to a different Type or to continue such Borrowing and, in the
case of an Acceptance, may elect Interest Periods therefor, all as provided in
this Section. The Canadian Borrower may elect different options with respect
to different portions of the affected Borrowing, in which case each such
portion shall be allocated ratably among the Canadian Lenders holding the
Loans comprising such Borrowing, and the Loans comprising each such portion
shall be considered a separate Borrowing.
(g) To make an election pursuant to this Section, the Canadian
Borrower shall notify the Canadian Agent of such election by telephone by the
time that a Borrowing Request would be required under Section 2.03 if such
Borrower were requesting a Borrowing of the Type resulting
41
from such election to be made on the effective date of such election. Each
such telephonic Interest Election Request shall be irrevocable and shall be
confirmed promptly by hand delivery or telecopy to the Canadian Agent of a
written Interest Election Request in a form approved by the Canadian Agent and
signed by the Canadian Borrower.
(h) Each telephonic and written Interest Election Request shall
specify the following information in compliance with Section 2.02:
(i) the Borrowing to which such Interest Election Request applies
and, if different options are being elected with respect to different
portions thereof, the portions thereof to be allocated to each resulting
Borrowing (in which case the information to be specified pursuant to
clauses (iii) and (iv) below shall be specified for each resulting
Borrowing);
(ii) the effective date of the election made pursuant to such
Interest Election Request, which shall be a Canadian Business Day;
(iii) whether the resulting Borrowing is to be a Canadian Prime Rate
Borrowing or an Acceptance; and
(iv) if the resulting Borrowing is an Acceptance, the Interest
Period to be applicable thereto after giving effect to such election,
which shall be a period contemplated by the definition of the term
"Interest Period".
If any such Interest Election Request requests a Eurocurrency Borrowing but
does not specify an Interest Period, then such Borrower shall be deemed to
have selected an Interest Period of 30 days' duration.
(i) Promptly following receipt of an Interest Election Request, the
Canadian Agent shall advise each Canadian Lender of the details thereof and of
such Lender's portion of each resulting Borrowing.
(j) If the Borrower fails to deliver a timely Interest Election
Request with respect to a Canadian Borrowing prior to the end of the Interest
Period applicable thereto, then, unless such Borrowing is repaid as provided
herein, at the end of such Interest Period such Borrowing shall be converted
to a Canadian Prime Rate Borrowing.
42
SECTION 2.08. Termination and Reduction of Commitments. (a)
-----------------------------------------
Unless previously terminated, the Commitments shall terminate on the Maturity
Date.
(b) The Company may at any time terminate, or from time to time
reduce, the Commitments; provided that (i) each reduction of the Commitments
--------
shall be in an amount that is an integral multiple of $5,000,000 and not less
than $25,000,000 and (ii) the Company shall not terminate or reduce the
Commitments if, after giving effect to any concurrent prepayment of the Loans
in accordance with Section 2.10, the sum of the Revolving Credit Exposures
plus the aggregate principal amount of outstanding Competitive Loans would
exceed the total Commitments. To the extent necessary, the Canadian
Commitments of the Canadian Lenders shall be automatically reduced to ensure
that such Canadian Commitments do not exceed the Commitments of such Lenders.
(c) The Company shall notify the Administrative Agent of any
election to terminate or reduce the Commitments under paragraph (b) of this
Section at least three Business Days prior to the effective date of such
termination or reduction, specifying such election and the effective date
thereof. Promptly following receipt of any such notice, the Administrative
Agent shall advise the Lenders of the contents thereof. Each notice delivered
by the Company pursuant to this Section shall be irrevocable; provided that a
--------
notice of termination of the Commitments delivered by the Company may state
that such notice is conditioned upon the effectiveness of other credit
facilities, in which case such notice may be revoked by the Company (by notice
to the Administrative Agent on or prior to the specified effective date) if
such condition is not satisfied. Any termination or reduction of the
Commitments shall be permanent. Each reduction of the Commitments shall be
made ratably among the Lenders in accordance with their respective
Commitments.
SECTION 2.09. Repayment of Loans; Evidence of Debt. (a) Each U.S.
-------------------------------------
Borrower hereby unconditionally promises to pay (i) to the Administrative
Agent for the account of each Lender the then unpaid principal amount of each
Revolving Loan of such Borrower on the Maturity Date, (ii) to the
Administrative Agent for the account of each Lender the then unpaid principal
amount of each Competitive Loan of such Borrower on the last day of the
Interest Period applicable to such Loan and (iii) to the relevant Swingline
Lender the then unpaid principal amount of each Swingline Loan made by such
Swingline Lender on the earlier of the
43
Maturity Date and the fifth day after such Swingline Loan of such Borrower is
made; provided that on each date that a Revolving Borrowing or Competitive
--------
Borrowing is made by a Borrower, such Borrower shall repay all Swingline Loans
then outstanding. The Canadian Borrower hereby unconditionally promises to pay
to the Canadian Agent for the account of each Canadian Lender the then unpaid
principal amount of each Canadian Prime Rate Loan on the last day of each
Interest Period or the Maturity Date, if earlier.
(b) Each Lender shall maintain in accordance with its usual
practice an account or accounts evidencing the indebtedness of each Borrower
to such Lender resulting from each Loan made by such Lender, including the
amounts of principal and interest payable and paid to such Lender from time to
time hereunder.
(c) The Administrative Agent shall maintain accounts in which it
shall record (i) the amount of each Loan made hereunder, the Class and Type
thereof and the Interest Period applicable thereto, (ii) the amount of any
principal or interest due and payable or to become due and payable from each
U.S. Borrower to each Lender hereunder and (iii) the amount of any sum
received by the Administrative Agent hereunder for the account of the Lenders
and each Lender's share thereof.
(d) The Canadian Agent shall maintain accounts in which it shall
record (i) the amount of each Canadian Loan made hereunder, the Class and Type
thereof and the Interest Period applicable thereto, (ii) the amount of any
principal or interest due and payable or to become due and payable from each
Canadian Borrower to each Canadian Lender hereunder and (iii) the amount of
any sum received by the Canadian Agent hereunder for the account of the
Canadian Lenders and each Canadian Lender's share thereof.
(e) The entries made in the accounts maintained pursuant to
paragraph (b), (c) or (d) of this Section shall be prima facie evidence of the
----- -----
existence and amounts of the obligations recorded therein; provided that the
--------
failure of any Lender, the Administrative Agent or the Canadian Agent to
maintain such accounts or any error therein shall not in any manner affect the
obligation of any Borrower to repay the Loans in accordance with the terms of
this Agreement.
(f) Any Lender may request that Loans made by it be evidenced by a
promissory note. In such event, the
44
relevant Borrower shall prepare, execute and deliver to such Lender a
promissory note payable to the order of such Lender (or, if requested by such
Lender, to such Lender and its registered assigns) and in a form approved by
the Administrative Agent. Thereafter, the Loans evidenced by such promissory
note and interest thereon shall at all times (including after assignment
pursuant to Section 10.04) be represented by one or more promissory notes in
such form payable to the order of the payee named therein (or, if such
promissory note is a registered note, to such payee and its registered
assigns).
SECTION 2.10. Prepayment of Loans. (a) Subject to Section 2.15,
--------------------
any Borrower shall have the right at any time and from time to time to prepay
any Borrowing in whole or in part, subject to prior notice in accordance with
paragraph (d) of this Section; provided that (i) the Canadian Borrower shall
--------
not have the right to prepay any Acceptance and (ii) no Borrower shall have
the right to prepay any Competitive Loan without the prior consent of the
Lender thereof.
(b) The relevant U.S. Borrower shall notify the Administrative
Agent (and, in the case of prepayment of a Swingline Loan, the Swingline
Lender) by telephone (confirmed by telecopy) of any prepayment hereunder (i)
in the case of prepayment of a Eurocurrency Revolving Borrowing (other than a
Committed Currency Borrowing), not later than 11:00 a.m., New York City time,
three Business Days before the date of prepayment, (ii) in the case of a
prepayment of a Committed Currency Borrowing, not later than 10:00 a.m.,
London Time, three Business Days before the date of prepayment (or such other
applicable time as shall be set forth in the Applicable Procedures), (iii) in
the case of prepayment of an ABR Revolving Borrowing, not later than 10:30
a.m., New York City time, on the date of prepayment or (iv) in the case of
prepayment of a Swingline Loan, not later than 12:00 noon, New York City time,
on the date of prepayment. The Canadian Borrower shall notify the Canadian
Agent by telephone (confirmed by telecopy) of any prepayment hereunder of a
Canadian Prime Rate Borrowing not later than 10:00 a.m., Toronto time, on the
date of prepayment. Each such notice shall be irrevocable and shall specify
the prepayment date and the principal amount of each Borrowing or portion
thereof to be prepaid; provided that, if a notice of prepayment is given in
--------
connection with a conditional notice of termination of the Commitments as
contemplated by Section 2.08, then such notice of prepayment may be revoked
45
if such notice of termination is revoked in accordance with Section 2.08.
Promptly following receipt of any such notice relating to a Revolving
Borrowing, the Administrative Agent or the Canadian Agent, as applicable,
shall advise the Lenders of the contents thereof. Each partial prepayment of
any Revolving Borrowing shall be in an amount that would be permitted in the
case of an advance of a Revolving Borrowing of the same Type as provided in
Section 2.02. Each prepayment of a Revolving Borrowing shall be applied
ratably to the Loans included in the prepaid Borrowing. Prepayments shall be
accompanied by accrued interest to the extent required by Section 2.12.
(c) If, on the last day of any Interest Period for any Borrowing,
the sum of the total Revolving Credit Exposures plus the total Competitive
Loan Exposures exceeds the total Commitments, the relevant Borrower shall, on
such day, prepay Revolving Loans in an amount equal to the lesser of (i) such
excess and (ii) the amount of such Borrowing. If, on any Reset Date, the sum
of the total Revolving Credit Exposures plus the total Competitive Loan
Exposures exceeds 105% of the total Commitments, then the Borrowers shall, not
later than the next Business Day, prepay one or more Revolving Borrowings in
an aggregate principal amount equal to the excess, if any, of the sum of the
total Revolving Credit Exposures plus the total Competitive Loan Exposures (in
each case as of such Reset Date) over the total Commitments.
(d) If, on the last day of any Interest Period for any Committed
Currency Borrowing, the Dollar Equivalent of the aggregate principal amount of
outstanding Committed Currency Loans exceeds $100,000,000 (or such other
amount after giving effect to any reduction or increase thereof pursuant to
this Agreement), the relevant Borrower shall, on such day, prepay such
Committed Currency Borrowing in an amount equal to the lesser of (i) such
excess and (ii) the amount of such Borrowing. If, on any Reset Date, the
Dollar Equivalent of the aggregate principal amount of outstanding Committed
Currency Loans exceeds 105% of $100,000,000 (or such other amount after giving
effect to any reduction or increase thereof pursuant to this Agreement), then
the Borrowers shall, not later than the next Business Day, prepay one or more
Committed Currency Borrowings in an aggregate principal amount equal to the
excess, if any, of the Dollar Equivalent of the aggregate principal amount of
outstanding Committed Currency Loans (as of such next Reset Date) over
$100,000,000 (or such other amount after giving
46
effect to any reduction or increase thereof pursuant to this Agreement).
(e) If, on the last day of any Interest Period for any Canadian
Borrowing, the Dollar Equivalent of the aggregate principal amount of
outstanding Canadian Loans exceeds $100,000,000 (or such other amount after
giving effect to any reduction or increase thereof pursuant to this
Agreement), the Canadian Borrower shall, on such day, prepay such Canadian
Borrowing in an amount equal to the lesser of (i) such excess and (ii) the
amount of such Borrowing. If, on any Reset Date, the Dollar Equivalent of the
aggregate principal amount of outstanding Canadian Loans exceeds 105% of
$100,000,000 (or such other amount after giving effect to any reduction or
increase thereof pursuant to this Agreement), then the Canadian Borrower
shall, not later than the next Canadian Business Day, prepay one or more
Canadian Borrowings in an aggregate principal amount equal to the excess, if
any, of the Dollar Equivalent of the aggregate principal amount of outstanding
Canadian Loans (as of such next Reset Date) over $100,000,000 (or such other
amount after giving effect to any reduction or increase thereof pursuant to
this Agreement). Any amounts prepaid in respect of Acceptances shall be
deposited by the Canadian Borrower in a cash collateral account with the
Canadian Lender and invested by the Canadian Agent in short-term high-quality
instruments or securities which investments shall be made at the option and
sole discretion of the Canadian Agent and all amounts therein shall be used to
repay Acceptances at their maturity dates.
SECTION 2.11. Fees. (a) The Company agrees to pay to the
-----
Administrative Agent for the account of each Lender a facility fee, which
shall accrue at the Applicable Rate on the daily amount of the Commitment of
such Lender (whether used or unused) during the period from and including the
date hereof to but excluding the date on which such Commitment terminates;
provided that, if such Lender continues to have any Revolving Credit Exposure
--------
after its Commitment terminates, then such facility fee shall continue to
accrue on the daily amount of such Lender's Revolving Credit Exposure from and
including the date on which its Commitment terminates to but excluding the
date on which such Lender ceases to have any Revolving Credit Exposure.
Accrued facility fees shall be payable in arrears on the last day of March,
June, September and December of each year and on the date on which the
Commitments terminate, commencing on the first such date to occur after the
date
47
hereof; provided that any facility fees accruing after the date on which the
--------
Commitments terminate shall be payable on demand. All facility fees shall be
computed on the basis of a year of 360 days and shall be payable for the
actual number of days elapsed (including the first day but excluding the last
day).
(b) The Company agrees to pay to the Administrative Agent for the
account of each Lender a utilization fee which shall accrue at a rate per
annum equal to .050% on (i) the daily amount of the Loans outstanding during
the six-month period commencing on the date of this Agreement and (ii)
thereafter, on the amount of the Loans outstanding hereunder on and in respect
of each day on which the aggregate Loans outstanding (or Dollar Equivalent
thereof) exceed 66 2/3% of the Commitments in effect on such day. The
utilization fee shall be payable in arrears on the last day of March, June,
September and December of each year and on the date on which the Commitments
terminate, commencing on the first such date to occur after the date hereof.
For purposes of computing the utilization fees to each Lender, any principal
amount of Competitive Loans outstanding shall be deemed to have been made by
each Lender on a pro rata basis based on such Lender's Unused Commitment. All
utilization fees shall be computed on the basis of a year of 360 days and
shall be payable for the actual number of days elapsed.
(c) The Canadian Borrower agrees to pay to each Canadian Lender
that accepts an Acceptance on its behalf a stamping fee in advance, at a rate
per annum equal to the Applicable Rate set forth under the caption
"Eurocurrency Spread/Stamping Fee Rate" on the date of acceptance of each
Acceptance issued by the Canadian Borrower. All stamping fees shall be
calculated on the amount of the Acceptance issued and shall be completed on
the basis of a year of 365 days. The stamping fee shall be in addition to any
other fees payable to such Canadian Lender in connection with the issuance or
discounting of such Acceptance. The discount rate for Acceptances shall be
equal to Reference Rate, shall be calculated under terms customary to the
practice of the Canadian Lenders and shall be based upon a year of 365 days.
(d) The Company agrees to pay to the Administrative Agent, for its
own account, fees payable in the amounts and at the times separately agreed
upon between the Company and the Administrative Agent.
48
(e) All fees payable hereunder (except for stamping fees that are
subject to paragraph (c) above) shall be paid on the dates due, in immediately
available funds, to the Administrative Agent for distribution, in the case of
facility fees and utilization fees, to the Lenders. Fees paid shall not be
refundable under any circumstances.
(f) With respect to Canadian Loans and fees relating thereto,
unless otherwise stated herein, wherever reference is made to a rate of
interest "per annum" or a similar expression, such interest shall be
calculated on the basis of a calendar year of 365 days or 366 days, as the
case may be, and using the nominal rate method of calculation, and shall not
be calculated using the effective rate method of calculation or on any other
basis that gives effect to the principle of deemed reinvestment of interest.
(g) For purposes of the Interest Act (Canada) and disclosure
thereunder, whenever interest to be paid with respect to Canadian Loans or
fees relating thereto is to be calculated on the basis of a year of 360 days
or any other period of time that is less than a calendar year, the yearly rate
of interest to which the rate determined pursuant to such calculation is
equivalent is the rate so determined multiplied by the actual number of days
in the calendar year in which the same is to be ascertained and divided by
either 360 or such other period of time, as the case may be.
SECTION 2.12. Interest. (a) The Loans comprising each ABR
---------
Borrowing (other than Swingline Loans) shall bear interest at the Alternate
Base Rate. Each Swingline Loan shall bear interest at the Swingline Rate,
unless a participation is required to be made pursuant to subsection (c) of
Section 2.05, in which case such Loan shall bear interest at the Alternate
Base Rate.
(b) The Loans comprising each Eurocurrency Borrowing shall bear
interest (i) in the case of a Eurocurrency Revolving Loan, at the LIBO Rate
for the Interest Period in effect for such Borrowing plus the Applicable Rate,
or (ii) in the case of a Eurocurrency Competitive Loan, at the LIBO Rate for
the Interest Period in effect for such Borrowing plus (or minus, as
applicable) the Margin applicable to such Loan.
(c) Each Fixed Rate Loan shall bear interest at the Fixed Rate
applicable to such Loan.
49
(d) Each Canadian Prime Rate Loan shall bear interest at the
Canadian Prime Rate.
(e) Each Acceptance Equivalent Loan shall bear interest in
accordance with Section 2.19.
(f) Notwithstanding the foregoing, if any principal of or interest
on any Loan or any fee or other amount payable by any Borrower hereunder is
not paid when due, whether at stated maturity, upon acceleration or otherwise,
such overdue amount shall bear interest, after as well as before judgment, at
a rate per annum equal to (i) in the case of overdue principal payable in
dollars of any Loan, 2% plus the rate otherwise applicable to such Loan as
provided in the preceding paragraphs of this Section, (ii) in the case of any
other amount payable in dollars, 2% plus the rate applicable to ABR Loans as
provided in paragraph (a) of this Section and (iii) in the case of any amounts
payable in Canadian Dollars 2% plus the Canadian Prime Rate.
(g) Accrued interest on each Loan shall be payable in arrears on
each Interest Payment Date for such Loan; provided that (i) interest accrued
--------
pursuant to paragraph (f) of this Section shall be payable on demand, (ii) in
the event of any repayment or prepayment of any Loan (other than a prepayment
of an ABR Revolving Loan prior to the end of the Availability Period), accrued
interest on the principal amount repaid or prepaid shall be payable on the
date of such repayment or prepayment, (iii) in the event of any conversion of
any Eurocurrency Revolving Loan prior to the end of the current Interest
Period therefor, accrued interest on such Loan shall be payable on the
effective date of such conversion and (iv) all accrued interest shall be
payable upon termination of the Commitments.
(h) All interest hereunder shall be computed on the basis of a year
of 360 days, except (i) that interest computed by reference to the Alternate
Base Rate at times when the Alternate Base Rate is based on the Prime Rate and
interest on the Canadian Loans shall be computed on the basis of a year of 365
days (or 366 days in a leap year), and (ii) as otherwise specified in the
Alternate Procedures, and in each case shall be payable for the actual number
of days elapsed (including the first day but excluding the last day). The
applicable Alternate Base Rate or LIBO Rate shall be determined by the
Administrative Agent, and such determination shall be conclusive absent
manifest error. The applicable Canadian Prime Rate shall be determined by
50
the Canadian Agent, and such determination shall be conclusive absent manifest
error.
SECTION 2.13. Alternate Rate of Interest. If prior to the
---------------------------
commencement of any Interest Period for a Eurocurrency Borrowing:
(a) the Administrative Agent determines (which determination shall
be conclusive absent manifest error) that adequate and reasonable means
do not exist for ascertaining the LIBO Rate, as applicable, for such
Interest Period; or
(b) the Administrative Agent is advised by the Required Lenders (or,
in the case of a Eurocurrency Competitive Loan, the Lender that is
required to make such Loan) that the LIBO Rate, as applicable, for such
Interest Period will not adequately and fairly reflect the cost to such
Lenders (or Lender) of making or maintaining their Loans (or its Loan)
included in such Borrowing for such Interest Period; or
(c) in the case of a Committed Currency Borrowing, the
Administrative Agent determines (which determination shall be conclusive
absent manifest error) that deposits in the applicable Committed Currency
are not generally available, or cannot be obtained by certain categories
of financial institutions represented among the Lenders, in the London
interbank market or any other market in which the Lenders shall be
funding such Loans;
then the Administrative Agent shall give notice thereof to the Company and the
Lenders by telephone or telecopy as promptly as practicable thereafter and,
until the Administrative Agent notifies the Company and the Lenders that the
circumstances giving rise to such notice no longer exist, (i) any Interest
Election Request that requests the conversion of any Revolving Borrowing to,
or continuation of any Revolving Borrowing as, a Eurocurrency Borrowing in the
affected currency shall be ineffective, and any Eurocurrency Borrowing so
requested to be continued shall be converted to an ABR Borrowing at the
Exchange Rate determined by the Administrative Agent on the last day of the
then current Interest Period with respect thereto, (ii) if any Borrowing
Request requests a Eurocurrency Revolving Borrowing (other than a Committed
Currency Borrowing), such Borrowing shall be made as an ABR Borrowing, (iii)
if the affected currency
51
is dollars, any request by any Borrower for a Eurocurrency Competitive
Borrowing shall be ineffective and (iv) if any Borrowing Request requests a
Committed Currency Borrowing in the affected currency, such request shall be
ineffective; provided that (A) if the circumstances giving rise to such notice
--------
do not affect all the Lenders, then requests for Eurocurrency Competitive
Borrowings may be made to Lenders that are not affected thereby and (B) if the
circumstances giving rise to such notice affect only one Type of Borrowings,
then the other Type of Borrowings shall be permitted.
SECTION 2.14. Increased Costs; Illegality. (a) If any
----------------------------
Governmental Authority shall have in effect any reserve, liquid asset or
similar requirement with respect to any category of deposits or liabilities
customarily used to fund loans in any currency, or by reference to which
interest rates applicable to Loans in such currency are determined, and the
result of such requirement shall be to increase the cost to any Lender of
making or maintaining any Eurocurrency Loan or Fixed Rate Loan in such
currency, and such Lender shall deliver to the Company a notice requesting
compensation under this paragraph and setting forth the applicable Statutory
Reserve Rate, then the Company will pay or cause the applicable Borrower to
pay to such Lender on each Interest Payment Date with respect to each affected
Loan an amount equal to the difference between (i) the interest payable on
such Loan on such date and (ii) the interest that would have been payable had
such Loan borne interest at a rate equal to (A) the LIBO Rate for the
applicable Interest Period multiplied by the applicable Statutory Reserve Rate
plus (B) the Applicable Rate or Margin applicable to such Loan.
(b) If any Change in Law shall impose on any Lender or the London
interbank market (or any other market in which the funding operations of such
Lender shall be conducted with respect to any Committed Currency) any
condition affecting this Agreement or Eurocurrency Loans, Fixed Rate Loans or
Acceptances made by such Lender (other than any reserve, liquid asset or
similar requirement referred to in paragraph (a) above), and the result
thereof shall be to increase the cost to such Lender of making or maintaining
any Eurocurrency Loan, Fixed Rate Loan or Acceptance (or of maintaining its
obligation to make any such Loan or Acceptance) or to increase the cost to
such Lender or to reduce the amount of any sum received or receivable by such
Lender hereunder (whether of principal,
52
interest or otherwise), then the Company will pay or cause the applicable
Borrower to pay to such Lender such additional amount or amounts as will
compensate such Lender for such additional costs incurred or reduction
suffered. Notwithstanding the foregoing, no additional amount shall be paid by
the Company or any other Borrower to compensate such Lender for any additional
costs incurred or reduction suffered as a result of any Change in Law
affecting Excluded Taxes.
(c) If any Lender determines that any Change in Law regarding
capital requirements has or would have the effect of reducing the rate of
return on such Lender's capital or on the capital of such Lender's holding
company, if any, as a consequence of this Agreement or the Loans made by such
Lender to a level below that which such Lender or such Lender's holding
company could have achieved but for such Change in Law (taking into
consideration such Lender's policies and the policies of such Lender's holding
company with respect to capital adequacy), then from time to time the Company
will pay to such Lender such additional amount or amounts as will compensate
such Lender or such Lender's holding company for any such reduction suffered.
(d) A certificate of a Lender, setting forth (i) the amount or
amounts necessary to compensate such Lender or its holding company, as the
case may be, as specified in paragraph (a), (b) or (c) of this Section and
(ii) a reasonably detailed explanation of the calculation of such amount or
amounts shall be delivered to the Company and shall be conclusive absent
manifest error. The Company shall pay or cause the applicable Borrower to pay
such Lender the amount shown as due on any such certificate within 10 days
after receipt thereof.
(e) Failure or delay on the part of any Lender to demand
compensation pursuant to this Section shall not constitute a waiver of such
Lender's right to demand such compensation; provided that neither the Company
--------
nor any other Borrower shall be required to compensate a Lender pursuant to
this Section for any increased costs or reductions incurred more than 270 days
prior to the date that such Lender notifies the Company of the Change in Law
giving rise to such increased costs or reductions and of such Lender's
intention to claim compensation therefor; provided further that, if the Change
-------- -------
in Law giving rise to such increased costs or reductions is retroactive, then
the
53
270-day period referred to above shall be extended to include the period
of retroactive effect thereof.
(f) Notwithstanding the foregoing provisions of this Section, a
Lender shall not be entitled to compensation pursuant to this Section in
respect of any Competitive Loan if the Change in Law that would otherwise
entitle it to such compensation shall have been publicly announced prior to
submission of the Competitive Bid pursuant to which such Loan was made.
(g) Notwithstanding any other provision of this Agreement, if,
after the date hereof, (i) any Change in Law shall make it unlawful for any
Lender to make or maintain any Eurocurrency Loan or to give effect to its
obligations as contemplated hereby with respect to any Eurocurrency Loan, or
(ii) there shall have occurred any change in national or international
financial, political or economic conditions (including the imposition of or
any change in exchange controls) or currency exchange rates which would make
it impracticable for any Lender to make Loans denominated in the relevant
Committed Currency or to, or for the account of, the applicable Borrower,
then, by written notice to the Company and to the Administrative Agent:
(i) such Lender may declare that Eurocurrency Loans (in the affected
currency or currencies) will not thereafter (for the duration of such
unlawfulness) be made by such Lender hereunder (or be continued for
additional Interest Periods and ABR Loans will not thereafter (for such
duration) be converted into Eurocurrency Loans), whereupon such Lender
shall not submit a Competitive Bid in response to a request for a
Eurocurrency Competitive Loan and any request for a Eurocurrency
Borrowing (in the affected currency or currencies) (or to convert an ABR
Borrowing to a Eurocurrency Borrowing or to continue a Eurocurrency
Borrowing or a Committed Currency Borrowing (in the affected currency or
currencies), as the case may be, for an additional Interest Period)
shall, as to such Lender only, be deemed a request for an ABR Loan or a
Loan denominated in dollars, as the case may be (or a request to continue
an ABR Loan as such for an additional Interest Period or to convert a
Eurocurrency Loan into an ABR Loan, as the case may be), unless such
declaration shall be subsequently withdrawn; and
54
(ii) such Lender may require that all outstanding Eurocurrency Loans
(in the affected currency or currencies) made by it be converted to ABR
Loans or Loans denominated in dollars, as the case may be, in which event
all such Eurocurrency Loans (in the affected currency or currencies)
shall be automatically converted to ABR Loans or Loans denominated in
dollars, as the case may be, as of the effective date of such notice as
provided in paragraph (h) below.
In the event any Lender shall exercise its rights under (i) or (ii) above, all
payments and prepayments of principal that would otherwise have been applied
to repay the Eurocurrency Loans that would have been made by such Lender or
the converted Eurocurrency Loans of such Lender shall instead be applied to
repay the ABR Loans or Loans denominated in dollars, as the case may be, made
by such Lender in lieu of, or resulting from the conversion of, such
Eurocurrency Loans or Loans denominated in dollars, as the case may be.
(h) For purposes of this Section 2.14, a notice to the Company by
any Lender shall be effective as to each Eurocurrency Loan made by such
Lender, if lawful, on the last day of the Interest Period currently applicable
to such Eurocurrency Loan; in all other cases such notice shall be effective
on the date of receipt by the Company.
SECTION 2.15. Break Funding Payments. In the event of (a) the
-----------------------
payment or prepayment (voluntary or otherwise) of any principal of any
Eurocurrency Loan or Fixed Rate Loan other than on the last day of an Interest
Period or maturity date applicable thereto (including as a result of an Event
of Default), (b) the conversion of any Eurocurrency Loan other than on the
last day of the Interest Period applicable thereto, (c) the conversion of any
Committed Currency Loan to an ABR Loan pursuant to this Agreement, (d) the
failure to borrow, convert, continue or prepay any Revolving Loan on the date
specified in any notice delivered pursuant hereto (regardless of whether such
notice may be revoked under Section 2.11(b) and is revoked in accordance
therewith), (e) the failure to borrow any Competitive Loan after accepting the
Competitive Bid to make such Loan, or (f) the assignment of any Eurocurrency
Loan or Fixed Rate Loan other than on the last day of the Interest Period or
maturity date applicable thereto as a result of a request by any Borrower
pursuant to Section 2.18, then, in any such event, such Borrower shall
compensate each Lender
55
for the loss, cost and expense attributable to such event (and in the case of
any conversion of Committed Currency Loans to dollar denominated Loans, such
loss, cost or expense shall also include any loss, cost or expense sustained
by a Lender as a result of its inability to convert dollars received by it
into amounts of the applicable Committed Currency equal to the amount of its
Committed Currency Loans). In the case of a Eurocurrency Loan, such loss, cost
or expense to any Lender shall be deemed to include an amount determined by
such Lender to be the excess, if any, of (i) the amount of interest which
would have accrued on such Loan had such event not occurred, at the LIBO Rate
in the case of a Eurocurrency Loan or discount rate in the case of an
Acceptance that would have been applicable to such Loan or Acceptance, for the
period from the date of such event to the last day of the then current
Interest Period therefor or the maturity date thereof (or, in the case of a
failure to borrow, convert or continue, for the period that would have been
the Interest Period for such Loan), over (ii) the amount of interest which
would accrue on such principal amount for such period at the interest rate
which such Lender would bid were it to bid, at the commencement of such
period, for deposits of a comparable amount and period from other banks. A
certificate of any Lender setting forth any amount or amounts that such Lender
is entitled to receive pursuant to this Section shall be delivered to the
Company and shall be conclusive absent manifest error. The relevant Borrower
shall pay such Lender the amount shown as due on any such certificate within
10 days after receipt thereof.
SECTION 2.16. Taxes. (a) Any and all payments by or on account of
------
any obligation of any Loan Party hereunder and under any other Loan Document
shall be made free and clear of and without deduction for any Indemnified
Taxes or Other Taxes; provided that if any Loan Party shall be required to
--------
deduct any Indemnified Taxes or Other Taxes from such payments, then (i) the
sum payable shall be increased as necessary so that after making all required
deductions (including deductions applicable to additional sums payable under
this Section) the Administrative Agent, the Canadian Agent or the Lender (as
the case may be) receives an amount equal to the sum it would have received
had no such deductions been made, (ii) such Loan Party shall make such
deductions and (iii) such Loan Party shall pay the full amount deducted to the
relevant Governmental Authority in accordance with applicable law.
56
(b) In addition, the Loan Parties shall pay any Other Taxes to the
relevant Governmental Authority in accordance with applicable law.
(c) (i) The relevant Loan Party shall indemnify the Administrative
Agent, the Canadian Agent and each Lender, within 20 days after written demand
therefor, for the full amount of any Indemnified Taxes or Other Taxes paid by
the Administrative Agent, the Canadian Agent or such Lender on or with respect
to any payment by or on account of any obligation of such Borrower hereunder
(including Indemnified Taxes or Other Taxes imposed or asserted on or
attributable to amounts payable under this Section) and any penalties,
interest and reasonable expenses (other than those resulting solely from a
failure by the Administrative Agent, the Canadian Agent or such Lender, as the
case may be, to pay, within a reasonable period of time after receipt of
notice and demand for payment, any Indemnified Taxes or Other Taxes for which
it is entitled to receive an indemnification payment) arising therefrom or
with respect thereto, whether or not such Indemnified Taxes or Other Taxes
were correctly or legally imposed or asserted by the relevant Governmental
Authority. A certificate as to the amount of such payment or liability,
setting forth in reasonable detail the basis and computation thereof,
delivered to the Company by a Lender or by the Administrative Agent or the
Canadian Agent on its own behalf or on behalf of a Lender shall be conclusive
absent manifest error.
(ii) If the Administrative Agent, the Canadian Agent or any Lender
shall become aware that it is entitled to receive a refund of Indemnified
Taxes or Other Taxes, it shall promptly notify the relevant Borrower thereof
and, at such Borrower's request, shall apply for such refund at such
Borrower's expense. If the Administrative Agent, the Canadian Agent or any
Lender receives a refund of any Indemnified Taxes or Other Taxes for which the
Administrative Agent, the Canadian Agent or such Lender has received payment
from the relevant Borrower hereunder, it shall promptly notify such Borrower
thereof and shall promptly repay such refund to such Borrower without
interest, except to the extent interest shall have accompanied such refund.
(iii) Without prejudice to the survival of any other agreement
contained herein, the agreements and
57
obligations contained in this Section 2.16(c) shall survive the payment in
full of principal and interest hereunder.
(d) As soon as practicable after any payment of Indemnified Taxes
or Other Taxes by any Borrower to the relevant Governmental Authority, such
Borrower shall deliver to the Administrative Agent the original or a certified
copy of a receipt issued by such Governmental Authority evidencing such
payment, a copy of the return reporting such payment or other evidence of such
payment reasonably satisfactory to the Administrative Agent.
(e) Any Foreign Lender that is entitled to an exemption from or
reduction of withholding tax under the law of the jurisdiction in which the
relevant Borrower is located, or any treaty to which such jurisdiction is a
party, with respect to payments under any Loan Document shall deliver to the
Company (with a copy to the Administrative Agent), on or before the time such
Foreign Lender (or the assignee thereof) becomes a party to this Agreement (or
designates a new lending office), and at the time or times prescribed by
applicable law, such properly completed and executed documentation prescribed
by applicable law or reasonably requested by the Company as will permit such
payments to be made without withholding or at a reduced rate. In addition,
each Foreign Lender shall deliver such documentation promptly upon the
obsolescence or invalidity of any documentation previously delivered by such
Foreign Lender.
SECTION 2.17. Payments Generally; Pro Rata Treatment; Sharing of
--------------------------------------------------
Set-offs. (a) Each U.S. Borrower and each Subsidiary Guarantor shall make
---------
each payment required to be made by it hereunder or under any other Loan
Document (whether of principal, interest or fees, or of amounts payable under
Section 2.14, 2.15 or 2.16, or otherwise) from a Payment Location in the
United States or in the United Kingdom prior to 12:00 noon, New York City time
(or, in the case of any Committed Currency Loans, from such other Payment
Location or by such other time as shall be specified in the Alternate
Procedures), on the date when due, in immediately available funds, without
set-off or counterclaim. The Canadian Borrower shall make each payment
required to be made by it hereunder or under any other Loan Document (whether
of principal, interest or fees, or of amounts payable under Section 2.14, 2.15
or 2.16, or otherwise) prior to 2:00 p.m., Toronto time, on the date when due,
in immediately available funds, without set-off or
58
counterclaim. Any amounts received after such time on any date may, in the
discretion of the Administrative Agent or the Canadian Agent, as applicable,
be deemed to have been received on the next succeeding Business Day or
Canadian Business Day, as applicable, for purposes of calculating interest
thereon. All such payments shall be made to the Administrative Agent in
dollars at its offices at 270 Park Avenue, New York, New York (or in the
applicable Committed Currency to the Administrative Agent at its office at
Trinity Tower, 9 Thomas Moore Street, London), or at such other offices as
shall be specified in the Alternate Procedures or to the Canadian Agent in
Canadian Dollars at its office at 55 King Street at Bay Street, Toronto, as
applicable, except payments to be made directly to the Swingline Lender as
expressly provided herein and except that payments pursuant to Sections 2.14,
2.15, 2.16 and 10.03 shall be made directly to the Persons entitled thereto.
The Administrative Agent or the Canadian Agent, as applicable, shall
distribute any such payments received by it for the account of any other
Person to the appropriate recipient promptly following receipt thereof. If any
payment hereunder shall be due on a day that is not a Business Day or Canadian
Business Day, as applicable, the date for payment shall be extended to the
next succeeding Business Day or Canadian Business Day, as applicable, and, in
the case of any payment accruing interest, interest thereon shall be payable
for the period of such extension. All Loans, facility fees and utilization
fees hereunder, other than as set forth in the next two succeeding sentences,
shall be denominated and made, and all payments hereunder (whether of
principal, interest or otherwise) shall be made, in dollars. All Eurocurrency
Revolving Loans may be denominated and made in Committed Currencies as
expressly provided herein and principal of and interest on any Eurocurrency
Revolving Loan made in a Committed Currency shall be paid in such Committed
Currency. All Canadian Loans hereunder shall be denominated and made, and all
payments hereunder in respect thereof (whether of principal, interest or
acceptance fees) shall be made, in Canadian Dollars.
(b) If at any time insufficient funds are received by and available
to the Administrative Agent or the Canadian Agent, as applicable, to pay fully
all amounts of principal, interest and fees then due hereunder, such funds
shall be applied (i) first, towards payment of interest and fees then due
hereunder, ratably among the parties entitled thereto in accordance with the
amounts of interest and fees
59
then due to such parties, and (ii) second, towards payment of principal then
due hereunder, ratably among the parties entitled thereto in accordance with
the amounts of principal then due to such parties.
(c) If any Lender shall, by exercising any right of set-off or
counterclaim or otherwise, obtain payment in respect of any principal of or
interest on any of its Revolving Loans (or Canadian Loans, in the case of
Canadian Lenders) or participations in Swingline Loans resulting in such
Lender receiving payment of a greater proportion of the aggregate amount of
its Revolving Loans (or Canadian Loans, in the case of Canadian Lenders) and
participations in Swingline Loans and accrued interest thereon than the
proportion received by any other Lender, then the Lender receiving such
greater proportion shall purchase (for cash at face value) participations in
the Revolving Loans (or Canadian Loans, in the case of Canadian Lenders) and
participations in Swingline Loans of other Lenders (or other Canadian Lenders,
in the case of Canadian Loans) to the extent necessary so that the benefit of
all such payments shall be shared by the Lenders ratably in accordance with
the aggregate amount of principal of and accrued interest on their respective
Revolving Loans (or Canadian Loans, in the case of Canadian Lenders) and
participations in Swingline Loans; provided that (i) if any such
--------
participations are purchased and all or any portion of the payment giving rise
thereto is recovered, such participations shall be rescinded and the purchase
price restored to the extent of such recovery, without interest, and (ii) the
provisions of this paragraph shall not be construed to apply to any payment
made by any Borrower pursuant to and in accordance with the express terms of
this Agreement or any payment obtained by a Lender as consideration for the
assignment of or sale of a participation in any of its Loans to any assignee
or participant, other than to any Borrower or any subsidiary or Affiliate
thereof (as to which the provisions of this paragraph shall apply). Each Loan
Party consents to the foregoing and agrees, to the extent it may effectively
do so under applicable law, that any Lender acquiring a participation pursuant
to the foregoing arrangements may exercise against such Loan Party rights of
set-off and counterclaim with respect to such participation as fully as if
such Lender were a direct creditor of such Loan Party in the amount of such
participation.
(d) Unless the Administrative Agent shall have received notice from
the relevant Loan Party prior to the
60
date on which any payment is due to the Administrative Agent for the account
of the Lenders hereunder that such Loan Party will not make such payment, the
Administrative Agent may assume that such Loan Party has made such payment on
such date in accordance herewith and may, in reliance upon such assumption,
distribute to the Lenders the amount due. In such event, if such Loan Party
has not in fact made such payment, then each of the Lenders severally agrees
to repay to the Administrative Agent forthwith on demand the amount so
distributed to such Lender with interest thereon, for each day from and
including the date such amount is distributed to it to but excluding the date
of payment to the Administrative Agent, (i) in the case of a Borrowing in
dollars, at the Federal Funds Effective Rate, and (ii) in the case of a
Borrowing in a Committed Currency, at the rate reasonably determined by the
Administrative Agent to be the cost of funding such amount.
(e) Unless the Canadian Agent shall have received notice from the
Canadian Borrower prior to the date on which any payment is due to the
Canadian Agent for the account of the Canadian Lenders hereunder that the
Canadian Borrower will not make such payment, the Canadian Agent may assume
that the Canadian Borrower has made such payment on such date in accordance
herewith and may, in reliance upon such assumption, distribute to the Canadian
Lenders the amount due. In such event, if the Canadian Borrower has not in
fact made such payment, then each of the Canadian Lenders severally agrees to
repay to the Canadian Agent forthwith on demand the amount so distributed to
such Canadian Lender with interest thereon, for each day from and including
the date such amount is distributed to it to but excluding the date of payment
to the Canadian Agent, at the rate reasonably determined by the Canadian Agent
to be the cost of funding such amount.
(f) If any Lender shall fail to make any payment required to be
made by it pursuant to Section 2.05(c), 2.06(b) or 2.17(d) or (e), then the
Administrative Agent or the Canadian Agent, as applicable, may, in its
discretion (notwithstanding any contrary provision hereof), apply any amounts
thereafter received by it for the account of such Lender to satisfy such
Lender's obligations under such Sections until all such unsatisfied
obligations are fully paid.
SECTION 2.18. Mitigation Obligations; Replacement of Lenders. (a)
-----------------------------------------------
If any Lender requests compensation under
61
Section 2.14, or if any Borrower is required to pay any additional amount or
indemnification payment to any Lender or any Governmental Authority for the
account of any Lender pursuant to Section 2.16, then such Lender shall use
reasonable efforts to designate a different lending office for funding or
booking its Loans hereunder or to assign its rights and obligations hereunder
to another of its offices, branches or affiliates, if, in the judgment of such
Lender, such designation or assignment (i) would eliminate or reduce amounts
payable pursuant to Section 2.14 or 2.16, as the case may be, in the future
and (ii) would not subject such Lender to any unreimbursed cost or expense and
would not otherwise be disadvantageous to such Lender. The Company hereby
agrees to pay all reasonable costs and expenses incurred by any Lender in
connection with any such designation or assignment.
(b) If any Lender requests compensation under Section 2.14, or if
any Borrower is required to pay any additional amount to any Lender or any
Governmental Authority for the account of any Lender pursuant to Section 2.16,
or if any Lender defaults in its obligation to fund Loans hereunder, then the
Company may, at its sole expense (including the fees referred to in Section
10.04(b)) and effort, upon notice to such Lender and the Administrative Agent
or the Canadian Agent, as applicable, require such Lender to assign and
delegate, without recourse (in accordance with and subject to the restrictions
contained in Section 10.04), all its interests, rights and obligations under
the Loan Documents (other than any outstanding Competitive Loans held by it,
but including its Canadian Commitment, in the case of a Canadian Lender) to an
assignee that shall assume such obligations (which assignee may be another
Lender, if a Lender accepts such assignment); provided that (i) the Company
--------
shall have received the prior written consent of the Administrative Agent or
the Canadian Agent, as applicable (and, if a Commitment is being assigned, the
Swingline Lenders), which consent shall not unreasonably be withheld, (ii)
such Lender shall have received payment of an amount equal to the outstanding
principal of its Loans (other than Competitive Loans) and participations in
Swingline Loans, accrued interest thereon, accrued fees and all other amounts
payable to it hereunder, from the assignee (to the extent of such outstanding
principal and accrued interest and fees) or the Company (in the case of all
other amounts) and (iii) in the case of any such assignment resulting from a
claim for compensation under Section 2.14 or payments required to be made
pursuant
62
to Section 2.16, such assignment will result in a reduction in such
compensation or payments. A Lender shall not be required to make any such
assignment and delegation if, prior thereto, as a result of a waiver by such
Lender or otherwise, the circumstances entitling the Company to require such
assignment and delegation cease to apply.
SECTION 2.19. Acceptances. (a) Acceptance Commitment. Subject to
------------ ----------------------
the terms and conditions hereof, (i) each Canadian Lender severally agrees
that the Canadian Borrower may issue, and such Lender shall accept, Drafts
denominated in Canadian Dollars, in minimum denominations of Cdn.$100,000 or a
whole multiple thereof and in minimum aggregate amounts of Cdn.$5,000,000 or
any greater whole multiple of Cdn.$1,000,000, each in accordance with the
provisions of this Section from time to time until the Maturity Date in an
aggregate face amount at any one time outstanding which, together with the
aggregate outstanding principal amount of such Canadian Lender's Canadian
Prime Rate Loans, shall not exceed such Lender's Canadian Commitment;
provided, however, that the Canadian Borrower shall not be entitled to request
-------- -------
any Acceptance that, if made, would result in more than 10 Acceptance
Borrowings outstanding hereunder at any time. For purposes of this Agreement,
the full face value of an Acceptance, without discount, shall be used when
calculations are made to determine the outstanding amount of a Canadian
Lender's Acceptances.
(b) Terms of Acceptance. Each Draft shall be accepted by a
-------------------
Canadian Lender, upon the written request of the Canadian Borrower, given in
accordance with paragraph (c), by the completion and acceptance by such
Canadian Lender of a Draft (i) payable in Canadian Dollars, drawn by such
Borrower on such Canadian Lender in accordance with this Agreement, to the
order of such Canadian Lender and (ii) maturing prior to the Maturity Date on
a Canadian Business Day that occurs approximately 30, 60 or 90 days (or a
lesser or greater number of days, subject to availability, after the date of
such Draft and on or prior to the Maturity Date) thereafter.
(c) Borrowing Request and Discount of Acceptances.
---------------------------------------------
(i) With respect to each requested acceptance of Drafts, the
Canadian Borrower shall give the Canadian Agent a Borrowing Request
(which shall be irrevocable
63
and may be by telephone confirmed in writing within one Canadian Business
Day) to be received prior to 12:00 (noon), Toronto time, two Canadian
Business Days prior to the date of the requested acceptance, specifying:
(A) the date on which such Drafts are to be accepted;
(B) the aggregate face amount of such Drafts;
(C) the maturity date of such Acceptances; and
(D) such additional information as the Canadian Agent or any
Canadian Lender may reasonably from time to time request to be
included in such notices.
(ii) Upon receipt of a Borrowing Request, the Canadian Agent shall
promptly notify each Canadian Lender of the contents thereof and of such
Canadian Lender's ratable share of the Acceptances requested thereunder.
The aggregate face amount of the Drafts to be accepted by a Canadian
Lender shall be determined by the Canadian Agent by reference to the
respective Canadian Commitments of the Canadian Lenders. Not later than
2:00 p.m., Toronto time, on the date of such notification each Canadian
Lender shall give telegraphic or telex notice to the Canadian Agent's
Lending Office of such Lender's acceptance of such Draft or Drafts
pursuant to the Borrowing Request.
(iii) Not later than 10:00 a.m., Toronto time, on the date of the
acceptance of a Draft, each Reference Lender shall notify the Canadian
Agent of the discount rate at which such Lender will discount the Draft
or Drafts to be accepted by such Canadian Lender hereunder on such date
and the Canadian Agent shall as soon as practicable thereafter advise the
Canadian Borrower and each Canadian Lender of the Reference Rate. Not
later than 2:00 p.m., Toronto time, on such date each Canadian Lender
shall, subject to the fulfillment of the applicable conditions precedent
specified in Section 4.01 and subject to the provisions of paragraph (e)
of this Section, (a) on the basis of the information supplied by the
Canadian Agent, as aforesaid, complete a Draft or Drafts of the Canadian
64
Borrower by filling in the amount, date and maturity date thereof in
accordance with the applicable Borrowing Request, (b) duly accept such
Draft or Drafts, (c) discount the Acceptance or Acceptances created
thereby, (d) give the Canadian Agent telegraphic or telex notice of such
Canadian Lender's acceptance of such Draft or Drafts, confirming the
discount rate at which it discounted the Acceptance or Acceptances (which
discount rate shall be equal to the Reference Rate) and the amount paid
to the Canadian Agent for the account of Canadian Borrower and (e) remit
to the Canadian Agent in Canadian Dollars in immediately available funds
an amount equal to the proceeds of such discount. Upon receipt by the
Canadian Agent of such sums from the Canadian Lenders, the Canadian Agent
shall make the aggregate amount thereof available to the Canadian
Borrower. The stamping fee with respect to any Acceptance of any Canadian
Lender shall be deducted from the discount proceeds payable by such
Lender hereunder.
(iv) Each extension of credit hereunder through the acceptance of
Drafts shall be made simultaneously and pro rata by the Canadian Lenders
in accordance with their respective Canadian Commitments; provided,
--------
however, that the failure of any Lender to accept any Acceptance shall
-------
not relieve any other Lender of its obligation to accept Acceptances
hereunder (it being understood, however, that no Lender shall be
responsible for the failure of any other Lender to accept any Acceptance
required to be accepted by such other Lender).
(d) Acceptance Obligation. The Canadian Borrower is obligated, and
---------------------
hereby unconditionally agrees, to pay to each Canadian Lender the face amount
of each Acceptance created by such Lender in accordance with a Borrowing
Request pursuant to paragraph (c) on the maturity date thereof or on such
earlier date as may be required pursuant to provisions of this Agreement.
With respect to each Acceptance which is outstanding hereunder, the Canadian
Borrower shall notify the Canadian Agent prior to 11:00 a.m., Toronto time,
three Canadian Business Days prior to the maturity date of such Acceptance
(which notice shall be irrevocable) of such Borrower's intention to issue
Acceptances on such maturity date to provide for the payment of such maturing
Acceptance and shall deliver a Borrowing Request to the Canadian Agent. Any
repayment of an
65
Acceptance must be made at or before 2:00 p.m. (Toronto time) on the maturity
date of such Acceptance. If any Acceptance Obligation is not paid when due, it
shall bear interest, payable on demand, at a rate per annum equal to 2% over
the Canadian Prime Rate in effect from time to time, from the due date thereof
to the date of payment thereof. The Canadian Borrower waives presentment for
payment and any other defense to payment of any amounts due to a Canadian
Lender in respect of any Acceptances accepted by such Canadian Lender under
this Agreement which might exist solely by reason of those Acceptances being
held, at the maturity thereof, by that Canadian Lender in its own right and
the Canadian Borrower agrees not to claim any days of grace if that Canadian
Lender, as holder, sues the Canadian Borrower on those Acceptances for payment
of the amounts payable by the Canadian Borrower thereunder.
(e) Supply of Drafts. To enable the Canadian Lenders to accept
----------------
Drafts in the manner specified in this Section, the Canadian Borrower shall
supply to each Canadian Lender upon the execution of this Agreement and
thereafter from time to time forthwith upon request by such Canadian Lender a
sufficient number of blank Drafts conforming with the requirements of this
Agreement and duly executed on behalf of the Canadian Borrower, which such
Canadian Lender shall hold in safekeeping. The Canadian Borrower hereby
authorizes and requests each Canadian Lender in accordance with each Borrowing
Request received from the Canadian Borrower pursuant to paragraph (c) to take
the measures with respect to a Draft or Drafts of the Canadian Borrower then
in possession of such Lender specified in paragraph (c)(iii) and in accordance
with the Borrowing Request. In case any authorized signatory of the Canadian
Borrower whose signature shall appear on any Draft shall cease to have such
authority before the acceptance of a Draft with respect to such Draft, the
obligations of the Canadian Borrower hereunder and under such Acceptance shall
nevertheless be valid for all purposes as if such authority had remained in
force until such creation. The Canadian Agent and each Canadian Lender shall
be fully protected in relying upon any instructions received from the Canadian
Borrower (orally or otherwise) without any duty to make inquiry as to the
genuineness of such instructions. The Canadian Agent and each Canadian Lender
shall be entitled to rely on instructions received from any person identifying
himself (orally or otherwise) as a duly authorized officer of the Canadian
Borrower and shall not be liable for any errors, omissions, delays or
interruptions in the transmission of
66
such instructions, except for those arising by reason of the gross negligence
or wilful misconduct of the Canadian Agent or such Canadian Lender, as the
case may be.
(f) No Canadian Lender shall be responsible or liable for its
failure to accept a Draft if the cause of such failure is, in whole or in
part, due to the failure of the Canadian Borrower to provide the Drafts
described in paragraph (e) above to such Canadian Lender on a timely basis nor
shall any Canadian Lender be liable for any damage, loss or other claim
arising by reason of any loss or improper use of any such Draft except loss or
improper use arising by reason of the gross negligence or wilful misconduct of
such Canadian Lender.
(g) Rights of Canadian Lender as to Acceptances. Neither the
-------------------------------------------
Canadian Agent nor any Canadian Lender shall have any responsibility as to the
application of the proceeds by the Canadian Borrower of any discount of any
Acceptances. For greater certainty, each Canadian Lender may, at any time,
purchase Acceptances issued by the Canadian Borrower and may at any time and
from time to time hold, sell, rediscount or otherwise dispose of any or all
Acceptances accepted and/or purchased by it.
(h) Acceptance Equivalent Loans. Whenever a Canadian Borrower
---------------------------
delivers a Borrowing Request to the Canadian Agent under this Agreement
requesting the Canadian Lenders to accept Drafts, a Canadian Lender may at its
option, in lieu of accepting Drafts, make an Acceptance Equivalent Loan. On
each date on which Drafts are to be accepted, subject to the same terms and
conditions applicable to the acceptance of Drafts, any Canadian Lender that
elects to make an Acceptance Equivalent Loan, upon delivery by the Canadian
Borrower of an executed Discount Note payable to the order of such Canadian
Lender, will remit to the Canadian Agent in immediately available funds for
the account of the Canadian Borrower the Acceptance equivalent discount
proceeds in respect of the Discount Notes issued by the Canadian Borrower to
the Canadian Lender.
(i) Terms Applicable to Discount Notes. The term "Acceptance" when
----------------------------------
used in this Agreement shall be construed to include Discount Notes and all
terms of this Agreement applicable to Acceptances shall apply equally to
Discount Notes evidencing Acceptance Equivalent Loans with such changes as may
in the context be necessary (except that no
67
Discount Note may be sold, rediscounted or otherwise disposed of by the
Canadian Lender making Acceptance Equivalent Loans). For greater certainty:
(i) a Discount Note shall mature and be due and payable on the same
date as the maturity date for Acceptances specified in the applicable
Borrowing Request;
(ii) a stamping fee will be payable in respect of a Discount Note
and shall be calculated at the same rate and in the same manner as the
stamping fee in respect of an Acceptance; and
(iii) an Acceptance Equivalent Loan made by a Canadian Lender will
be considered to be part of a Canadian Lender's outstanding Acceptances
for all purposes of this Agreement.
ARTICLE III
Representations and Warranties
------------------------------
The Company represents and warrants as to itself and its
Subsidiaries (and each other Borrower represents and warrants as to itself and
its subsidiaries, as applicable) to the Lenders that:
SECTION 3.01. Organization; Powers. Each of the Company and its
---------------------
Subsidiaries, including the Delaware Borrower and the Canadian Borrower, is
duly organized, validly existing and in good standing under the laws of the
jurisdiction of its organization, has all requisite power and authority to
carry on its business as now conducted and is qualified to do business in, and
is in good standing in, every jurisdiction where such qualification is
required, except where the failure to do so, individually or in the aggregate,
could not reasonably be expected to result in a Material Adverse Effect.
SECTION 3.02. Authorization; Enforceability. The Transactions are
------------------------------
within each Loan Party's corporate powers and have been duly authorized by all
necessary corporate and, if required, stockholder action. Each Loan Document
has been duly executed and delivered by each Loan Party and constitutes, or
when executed and delivered by such Loan Party will constitute, a legal, valid
and binding obligation
68
of such Loan Party, enforceable in accordance with its terms, subject to
applicable bankruptcy, insolvency, reorganization, moratorium or other laws
affecting creditors' rights generally and subject to general principles of
equity, regardless of whether considered in a proceeding in equity or at law.
SECTION 3.03. Governmental Approvals; No Conflicts. The
-------------------------------------
Transactions (a) do not require any consent or approval of, registration or
filing with, or any other action by, any Governmental Authority, except such
as have been obtained or made and are in full force and effect, (b) will not
violate any applicable law or regulation or the charter, by-laws or other
organizational documents of any Borrower or any of its subsidiaries or any
order of any Governmental Authority, (c) will not violate or result in a
default under any indenture, agreement or other instrument binding upon any
Borrower or any of its subsidiaries or its assets, or give rise to a right
thereunder to require any payment to be made by any Borrower or any of its
subsidiaries, and (d) will not result in the creation or imposition of any
Lien on any asset of any Borrower or any of its subsidiaries.
SECTION 3.04. Financial Condition; No Material Adverse Change.
------------------------------------------------
(a) The Company has heretofore furnished to the Lenders its consolidated
balance sheet and statements of income, stockholders equity and cash flows as
of and for the fiscal year ended September 30, 1996, reported on by Ernst &
Young LLP, independent public accountants. Such financial statements present
fairly, in all material respects, the financial position and results of
operations and cash flows of the Company and its consolidated Subsidiaries as
of such dates and for such periods in accordance with GAAP.
(b) Since September 30, 1996, there has been no material adverse
change in the business, assets, operations, prospects or condition, financial
or otherwise, of the Company and its Subsidiaries, taken as a whole.
SECTION 3.05. Properties. (a) Each of the Borrowers and its
-----------
subsidiaries has good title to, or valid leasehold interests in, all its real
and personal property material to its business, except for Permitted
Encumbrances.
(b) Each of the Borrowers and its subsidiaries owns, or is licensed
to use, all trademarks, trade names,
69
copyrights, patents and other intellectual property material to its business,
and the use thereof by the Borrowers and their subsidiaries does not infringe
upon the rights of any other Person, except for any such infringements that,
individually or in the aggregate, could not reasonably be expected to result
in a Material Adverse Effect.
SECTION 3.06. Litigation and Environmental Matters. (a) There are
-------------------------------------
no actions, suits or proceedings by or before any arbitrator or Governmental
Authority pending against or, to the knowledge of any Borrower, threatened
against or affecting any Borrower or any of its subsidiaries (i) as to which
there is a reasonable possibility of an adverse determination and that, if
adversely determined, could reasonably be expected, individually or in the
aggregate, to result in a Material Adverse Effect (other than the Disclosed
Matters) or (ii) that involve this Agreement, any other Loan Document or the
Transactions.
(b) Except for the Disclosed Matters and except with respect to any
other matters that, individually or in the aggregate, could not reasonably be
expected to result in a Material Adverse Effect, neither the Company, any
other Borrower nor any of their respective subsidiaries (i) has failed to
comply with any Environmental Law or to obtain, maintain or comply with any
permit, license or other approval required under any Environmental Law, (ii)
has become aware that it is subject to any Environmental Liability, (iii) has
received notice of any claim with respect to any Environmental Liability or
(iv) knows of any other basis for any Environmental Liability which is
reasonably expected to be asserted.
(c) Since the date of this Agreement, there has been no change in
the status of the Disclosed Matters that, individually or in the aggregate,
has resulted in, or materially increased the likelihood of, a Material Adverse
Effect.
SECTION 3.07. Compliance with Laws and Agreements. Each of the
------------------------------------
Borrowers and its subsidiaries is in compliance with all laws, regulations and
orders of any Governmental Authority applicable to it or its property and all
indentures, agreements and other instruments binding upon it or its property,
except where the failure to do so, individually or in the aggregate, could not
reasonably be expected to result in a Material Adverse Effect. No Default has
occurred and is continuing.
70
SECTION 3.08. Investment and Holding Company Status. None of the
--------------------------------------
Borrowers nor any of their respective subsidiaries is (a) an "investment
company" as defined in, or subject to regulation under, the Investment Company
Act of 1940 or (b) a "holding company" as defined in, or subject to regulation
under, the Public Utility Holding Company Act of 1935.
SECTION 3.09. Taxes. Each of the Company and its Subsidiaries has
------
timely filed or caused to be filed all material Tax returns and reports
required to have been filed and has paid or caused to be paid all Taxes
required to have been paid by it, except (a) Taxes that are being contested in
good faith by appropriate proceedings and for which the Company or such
Subsidiary, as applicable, has set aside on its books adequate reserves or (b)
to the extent that the failure to do so could not reasonably be expected to
result in a Material Adverse Effect.
SECTION 3.10. ERISA. No ERISA Event has occurred or is reasonably
------
expected to occur that, when taken together with all other such ERISA Events
for which liability is reasonably expected to occur, could reasonably be
expected to result in a Material Adverse Effect. The present value of all
accumulated benefit obligations under each Plan (based on the assumptions used
for purposes of Statement of Financial Accounting Standards No. 87) did not,
as of the date of the most recent financial statements reflecting such
amounts, exceed by more than $5,000,000 the fair market value of the assets of
such Plan, and the present value of all accumulated benefit obligations of all
underfunded Plans (based on the assumptions used for purposes of Statement of
Financial Accounting Standards No. 87) did not, as of the date of the most
recent financial statements reflecting such amounts, exceed by more than
$10,000,000 the fair market value of the assets of all such underfunded Plans.
SECTION 3.11. Disclosure. None of the written reports, financial
-----------
statements, certificates or other information (including the Spin-Off
Information) furnished by or on behalf of the Borrower or any of its
subsidiaries to the Administrative Agent or any Lender in connection with the
negotiation of the Loan Documents or delivered hereunder (as modified or
supplemented by other information so furnished) contains any material
misstatement of fact or omits to state any material fact necessary to make the
statements therein, in the light of the circumstances under which they were
made, not misleading; provided that, with
--------
71
respect to projected financial information, the Company represents only that
such information was prepared in good faith based upon assumptions believed to
be reasonable at the time.
SECTION 3.12. Subsidiaries. Schedule 3.12 sets forth as of the
-------------
Effective Date a list of all Subsidiaries and the percentage ownership
interest of the Company therein. Schedule 3.12 also sets forth as of the
Effective Date all Material Subsidiaries that are incorporated within the
United States of America. As of the Effective Date, the shares of capital
stock of such Subsidiaries will be fully paid and non-assessable and such
shares and other ownership interests so indicated by Schedule 3.12 will be
owned by the Company, directly or indirectly, free and clear of all Liens.
SECTION 3.13. Solvency. On the Effective Date and immediately
---------
after the consummation of the Spin-Off, (a) the fair value of the assets of
the Company, at a fair valuation, will exceed its debts and liabilities,
subordinated, contingent or otherwise; (b) the present fair saleable value of
the property of the Company will be greater than the amount that will be
required to pay the probable liability of its debts and other liabilities,
subordinated, contingent or otherwise, as such debts and other liabilities
become absolute and matured; (c) the Company does not intend to incur and does
not believe it will incur debts and liabilities, subordinated, contingent or
otherwise, beyond its ability to pay such debts and liabilities as they become
absolute and matured; and (d) the Company will not have unreasonably small
capital with which to conduct the business in which it is engaged as such
business is now conducted and is proposed to be conducted following the
Effective Date and the Spin-Off.
SECTION 3.14. Federal Reserve Regulations. (a) None of the
----------------------------
Borrowers is engaged principally, or as one of its important activities, in
the business of extending credit for the purpose of purchasing or carrying
Margin Stock.
(b) No part of the proceeds of the Loans has been or will be used,
whether directly or indirectly, and whether immediately, incidentally or
ultimately, for any purpose which entails a violation of the provisions of the
Regulations of the Board, including, without limitation, Regulation G, U or X
thereof. Not more than 25% of the
72
assets subject to the restrictions of Sections 6.02 and 6.03 will at any time
consist of Margin Stock.
ARTICLE IV
Conditions
----------
SECTION 4.01. Effective Date. The obligations of the Lenders to
---------------
make Loans hereunder shall not become effective until the date on which each
of the following conditions is satisfied (or waived in accordance with
Section 10.02):
(a) The Administrative Agent (or its counsel) shall have received
from each party hereto either (i) a counterpart of this Agreement signed
on behalf of such party or (ii) written evidence satisfactory to the
Administrative Agent (which may include telecopy transmission of a signed
signature page of this Agreement) that such party has signed a
counterpart of this Agreement.
(b) The Administrative Agent shall have received a favorable
written opinion (addressed to the Administrative Agent and the Lenders
and dated the Effective Date) of (i) Morgan, Lewis & Bockius LLP, U.S.
Counsel for the U.S. Borrowers and Subsidiary Guarantors, and Patricia E.
Armstrong, Canadian counsel for the Canadian Borrower, in each case
substantially in the form of Exhibits B-1 and B-2, respectively, and
covering such other matters relating to the Loan Parties, this Agreement,
the other Loan Documents or the Transactions as the Required Lenders
shall reasonably request. Each Borrower hereby requests such counsel to
deliver such opinion.
(c) The Administrative Agent shall have received such documents and
certificates as the Administrative Agent or its counsel may reasonably
request relating to the organization, existence and good standing of the
Loan Parties, the authorization of the Transactions and any other legal
matters relating to the Loan Parties, this Agreement, the other Loan
Documents the Transactions and the Spin-Off, all in form and substance
satisfactory to the Administrative Agent and its counsel.
73
(d) The Administrative Agent shall have received a certificate,
dated the Effective Date and signed by the President, a Vice President or
a Financial Officer of the Company or the relevant Loan Party, confirming
(i) compliance with the conditions set forth in paragraphs (a) and (b) of
Section 4.02 and (ii) that all governmental and third-party approvals
necessary or advisable in connection with the Spin-Off and the
Transactions contemplated hereby and the continuing operations of the
Company and its Subsidiaries after the Spin-Off have been obtained and
are in full force and effect, and all applicable waiting periods have
expired without any action being taken or threatened by any competent
authority which would restrain, prevent or otherwise impose adverse
conditions on the Spin-Off or any of the Transactions contemplated
hereby.
(e) The Administrative Agent shall have received the Subsidiary
Guarantee Agreement duly executed by all parties thereto.
(f) The Administrative Agent shall have received the Indemnity,
Subrogation and Contribution Agreement duly executed by all parties
thereto.
(g) The Administrative Agent shall have received a certificate,
dated the Effective Date and signed by a Financial Officer of the
Company, in form and substance reasonably satisfactory to the Lenders,
confirming the solvency of the Company and its Subsidiaries after giving
effect to the initial Loans hereunder and the use of proceeds thereof.
(h) The Administrative Agent shall have received all fees and other
amounts due and payable on or prior to the Effective Date, including, to
the extent invoiced, reimbursement or payment of all reasonable out-of-
pocket expenses required to be reimbursed or paid by the Borrowers
hereunder.
The Administrative Agent shall notify the Company and the Lenders of the
Effective Date, and such notice shall be conclusive and binding.
Notwithstanding the foregoing, the obligations of the Lenders to make Loans
hereunder shall not become effective unless each of the foregoing conditions
is satisfied (or waived pursuant to Section 10.02) at or prior to 3:00 p.m.,
New York City time, on January 31, 1997 (and,
74
in the event such conditions are not so satisfied or waived, the Commitments
shall terminate at such time).
SECTION 4.02. Each Credit Event. The obligation of each Lender to
------------------
make a Loan on the occasion of any Borrowing is subject to the satisfaction of
the following conditions:
(a) The representations and warranties of each Loan Party set forth
in each Loan Document shall be true and correct on and as of the date of
such Borrowing. Notwithstanding anything contained in this Agreement to
the contrary, the Spin-Off in itself shall not be deemed a material
adverse change to the extent that it is consummated in all material
respects in accordance with the Spin-Off Information.
(b) At the time of and immediately after giving effect to such
Borrowing, no Default shall have occurred and be continuing.
Each Borrowing shall be deemed to constitute a representation and warranty by
the Company on the date thereof as to the matters specified in paragraphs
(a) and (b) of this Section.
SECTION 4.03. First Credit Event. The obligation of each Lender to
-------------------
make a Loan on the occasion of the initial Borrowing is subject to the
satisfaction of the following conditions:
(a) The Administrative Agent shall (i) be satisfied with the
arrangements for the repayment of approximately $600 million of
intercompany debt of the Company to ALCO or any Affiliate of ALCO with
the proceeds of the initial Borrowing; and (ii) have received
satisfactory evidence that the balance of intercompany debt owed by the
Company has been converted to equity;
(b) The Administrative Agent shall have received satisfactory
evidence that all material assets, if any, to be transferred by ALCO to
the Company in connection with the Spin-Off as contemplated by the Spin-
Off Information shall have been transferred on or prior to the date of
the initial Borrowing; and
75
(c) The Administrative Agent and each Lender shall have received
copies of a certificate in form and substance satisfactory to the
Administrative Agent, dated the date of the initial Borrowing and signed
by a Financial Officer of the Company, confirming the solvency of the
Company and the Subsidiaries on a consolidated basis after giving effect
to the initial Borrowings and the use of proceeds thereof.
SECTION 4.04. First Credit Event after the Spin-Off. The
--------------------------------------
obligation of each Lender to make a Loan on the occasion of the first
Borrowing after the Spin-Off is subject to receipt by the Administrative Agent
and each Lender of copies of a certificate in form and substance satisfactory
to the Administrative Agent, dated the date of such Borrowing and signed by a
Financial Officer of the Company, confirming that (i) the Spin-Off has been
consummated in all material respects with respect to the Company in accordance
with the Spin-Off Information and all applicable laws, (ii) immediately prior
to the Spin-Off, no material adverse change in the business, assets,
operations, prospects or condition, financial or otherwise, of the Company and
its Subsidiaries, taken as a whole, shall have occurred and (iii) immediately
after giving effect to the Spin-Off, no Default shall have occurred and be
continuing.
ARTICLE V
Affirmative Covenants
---------------------
Until the Commitments have expired or been terminated and the
principal of and interest on each Loan and all fees and other amounts payable
hereunder shall have been paid in full, the Company covenants and agrees with
the Lenders that:
SECTION 5.01. Financial Statements and Other Information. The
-------------------------------------------
Company will furnish to the Administrative Agent and each Lender:
(a) within 120 days after the end of each fiscal year of the
Company, its audited consolidated balance sheet and related statements of
operations, stockholders' equity and cash flows as of the end of and for
such year, setting forth in each case in comparative form the figures for
the previous fiscal year, all reported on by Ernst & Young LLP or other
76
independent public accountants of recognized national standing (without a
"going concern" or like qualification or exception and without any
qualification or exception as to the scope of such audit) to the effect
that such consolidated financial statements present fairly in all
material respects the financial condition and results of operations of
the Company and its consolidated Subsidiaries on a consolidated basis in
accordance with GAAP consistently applied;
(b) within 60 days after the end of each of the first three fiscal
quarters of each fiscal year of the Company, its consolidated balance
sheet and related statements of operations, stockholders' equity and cash
flows as of the end of and for such fiscal quarter and the then elapsed
portion of the fiscal year, setting forth in each case in comparative
form the figures for the corresponding period or periods of (or, in the
case of the balance sheet, as of the end of) the previous fiscal year,
all certified by one of its Financial Officers as presenting fairly in
all material respects the financial condition and results of operations
of the Company and its consolidated Subsidiaries on a consolidated basis
in accordance with GAAP consistently applied, subject to normal year-end
audit adjustments and the absence of footnotes;
(c) prior to consummation of the Spin-Off, copies of the Form 10
Registration Statement relating to the Spin-Off in the form in which it
is declared effective by the Securities and Exchange Commission;
(d) concurrently with each delivery of financial statements under
clause (a) or (b) above, a certificate of a Financial Officer of the
Company (i) certifying as to whether any Default has occurred and, if a
Default has occurred, specifying the details thereof and any action taken
or proposed to be taken with respect thereto, (ii) setting forth a
computation in reasonable detail of the Leverage Ratio as of the last day
of the fiscal year or fiscal quarter in respect of which financial
statements are being delivered, (iii) setting forth reasonably detailed
calculations demonstrating compliance with Sections 6.08 and 6.09,
(iv) stating whether any change in GAAP or in the application thereof has
occurred since the date of the audited financial statements referred to
in Section 3.04 and,
77
if any such change has occurred, specifying the effect of such change on
the financial statements accompanying such certificate and (v) stating
whether there is any Material Subsidiary that is organized in the United
States of America and that is not a Subsidiary Guarantor;
(e) promptly after the same become publicly available, copies of all
proxy statements and Forms 8-K, 10-K and 10-Q filed by the Company or any
Subsidiary with the Securities and Exchange Commission, or any
Governmental Authority succeeding to any or all of the functions of said
Commission, or with any national securities exchange, or distributed by
the Company to its shareholders generally, as the case may be; and
(f) promptly following any request therefor, such other information
regarding the operations, business affairs and financial condition of the
Company or any Subsidiary, or compliance with the terms of the Loan
Documents, as the Administrative Agent or any Lender may reasonably
request.
SECTION 5.02. Notices of Material Events. The Company will furnish
---------------------------
to the Administrative Agent and each Lender prompt written notice of the
following:
(a) the occurrence of any Default;
(b) the filing or commencement of any action, suit or proceeding by
or before any arbitrator or Governmental Authority against or affecting
the Company or any Affiliate thereof that, if adversely determined, could
reasonably be expected to result in a Material Adverse Effect;
(c) the occurrence of any ERISA Event that, alone or together with
any other ERISA Events that have occurred, could reasonably be expected
to result in liability of the Company and its Subsidiaries in an
aggregate amount exceeding $10,000,000; and
(d) any other development that results in, or could reasonably be
expected to result in, a Material Adverse Effect.
Each notice delivered under this Section shall be accompanied by a statement
of a Financial Officer or other
78
executive officer of the Company setting forth in reasonable detail the event
or development requiring such notice and any action taken or proposed to be
taken with respect thereto.
SECTION 5.03. Existence; Conduct of Business. The Company will,
-------------------------------
and will cause each of its Subsidiaries to, do or cause to be done all things
necessary to preserve, renew and keep in full force and effect its legal
existence and the rights, licenses, permits, privileges and franchises
material to the conduct of its business; provided that the foregoing shall not
--------
prohibit any merger, consolidation, liquidation or dissolution permitted under
Section 6.04.
SECTION 5.04. Payment of Obligations. The Company will, and will
-----------------------
cause each of its Subsidiaries to, pay its obligations, including Tax
liabilities, that, if not paid, could result in a Material Adverse Effect
before the same shall become delinquent or in default, except where (a) the
validity or amount thereof is being contested in good faith by appropriate
proceedings, (b) the Company or such Subsidiary has set aside on its books
adequate reserves with respect thereto in accordance with GAAP and (c) the
failure to make payment pending such contest could not reasonably be expected
to result in a Material Adverse Effect.
SECTION 5.05. Maintenance of Properties; Insurance. The Company
-------------------------------------
will, and will cause each of its Subsidiaries to, (a) keep and maintain all
property material to the conduct of its business in good working order and
condition, ordinary wear and tear excepted, and (b) maintain, with financially
sound and reputable insurance companies, insurance in such amounts and against
such risks as are customarily maintained by companies engaged in the same or
similar businesses operating in the same or similar locations or, in lieu
thereof, the Company or any one or more of its Subsidiaries will maintain or
cause to be maintained a system or systems of self-insurance which will be in
accord with the approved practices of companies owning or operating properties
of a similar character and maintaining such systems, and, in such cases of
self-insurance, maintain or cause to be maintained an insurance reserve in
adequate amounts.
SECTION 5.06. Books and Records; Inspection Rights. The Company
-------------------------------------
will, and will cause each of its Subsidiaries to, keep proper books of record
and account in which full, true and correct entries are made of all
79
dealings and transactions in all material respect in relation to its business
and activities. The Company will, and will cause each of its Subsidiaries to,
permit any representatives designated by the Administrative Agent or any
Lender, upon reasonable prior notice, to visit and inspect its properties, to
examine and make extracts from its books and records, and to discuss its
affairs, finances and condition with its officers and, subject to a
representative of the Company being present, independent accountants, all at
such reasonable times and as often as reasonably requested.
SECTION 5.07. Compliance with Laws. The Company will, and will
---------------------
cause each of its Subsidiaries to, comply with all laws, rules, regulations
and orders of any Governmental Authority applicable to it or its property,
except where the failure to do so, individually or in the aggregate, could not
reasonably be expected to result in a Material Adverse Effect.
SECTION 5.08. Use of Proceeds. The proceeds of the Loans will be
----------------
used only to repay approximately $600 million of intercompany debt of the
Company to ALCO and for general corporate purposes (including acquisitions) of
the Borrowers. No part of the proceeds of any Loan will be used, whether
directly or indirectly, for any purpose that entails a violation of any of the
Regulations of the Board, including Regulations G, U and X.
SECTION 5.09. Ownership of Delaware Borrower and Canadian Borrower.
-----------------------------------------------------
The Company will at all times when such Subsidiary has any outstanding Loan
hereunder maintain ownership of 100% of the capital stock and voting
securities of each of the Delaware Borrower and the Canadian Borrower, other
than qualifying shares held by the directors of such Subsidiary.
SECTION 5.10. Further Assurances. The Company will cause any
-------------------
subsequently acquired or organized Material Subsidiary that is organized
within the United States of America (and any other Subsidiary that hereafter
becomes such a Material Subsidiary) to execute a Subsidiary Guarantee
Agreement and an Indemnity, Subrogation and Contribution Agreement in favor of
the Administrative Agent.
80
ARTICLE VI
Negative Covenants
------------------
Until the Commitments have expired or terminated and the principal
of and interest on each Loan and all fees and other amounts payable hereunder
have been paid in full, the Company covenants and agrees with the Lenders
that:
SECTION 6.01. Indebtedness. The Company will not permit any
-------------
Subsidiary to create, incur, assume or permit to exist any Indebtedness,
except:
(a) Indebtedness created hereunder;
(b) Indebtedness existing on the date hereof and set forth in
Schedule 6.01 and extensions, refundings, refinancings, renewals and
replacements of any such Indebtedness that do not increase the
outstanding principal amount thereof;
(c) Indebtedness of any Subsidiary to the Company or any other
Subsidiary;
(d) Guarantees by any Subsidiary or by the Company of Indebtedness
of the Company or any other Subsidiary;
(e) Indebtedness of any Subsidiary incurred to finance the
acquisition, construction or improvement of any fixed or capital assets,
including Capital Lease Obligations and any Indebtedness assumed in
connection with the acquisition of any such assets or secured by a Lien
on any such assets prior to the acquisition thereof, and extensions,
renewals and replacements of any such Indebtedness that do not increase
the outstanding principal amount thereof; provided that (i) such
--------
Indebtedness is incurred prior to or within 90 days after such
acquisition or the completion of such construction or improvement and
(ii) the aggregate principal amount of Indebtedness permitted by this
clause (e) plus Indebtedness permitted by clauses (f) and (g) of this
Section plus the aggregate sale price of all arrangements permitted by
Section 6.03 shall not exceed at any time outstanding 10% of Consolidated
Net Worth as shown on the most recent consolidated balance sheet of the
Company and its Subsidiaries delivered pursuant to Section 5.01;
81
(f) Indebtedness of any Person that becomes a Subsidiary after the
date hereof; provided that (i) such Indebtedness exists at the time such
--------
Person becomes a Subsidiary and is not created in contemplation of or in
connection with such Person becoming a Subsidiary and (ii) the aggregate
principal amount of Indebtedness permitted by this clause (f) plus
Indebtedness permitted by clauses (e) and (g) of this Section plus the
aggregate sale price of all arrangements permitted by Section 6.03 shall
not exceed at any time outstanding 10% of Consolidated Net Worth as shown
on the most recent consolidated balance sheet of the Company and its
Subsidiaries delivered pursuant to Section 5.01; and
(g) other unsecured Indebtedness of all Subsidiaries; provided that
--------
the aggregate principal amount of Indebtedness permitted by this clause
(g) plus Indebtedness permitted by clauses (e) and (f) of this Section
plus the aggregate sale price of all arrangements permitted by Section
6.03 shall not exceed at any time outstanding 10% of Consolidated Net
Worth as shown on the most recent consolidated balance sheet of the
Company and its Subsidiaries delivered pursuant to Section 5.01.
The Company will not create, incur, assume or permit to exist any
Indebtedness of the Company, other than Indebtedness included in Consolidated
Total Debt, in an aggregate principal amount at any time outstanding in excess
of $25,000,000; provided, however, that such dollar limitation shall not apply
-------- -------
to any Indebtedness or Guarantee described in clauses (c) and (d) of this
Section 6.01.
SECTION 6.02. Liens. The Company will not, and will not permit any
------
Subsidiary to, create, incur, assume or permit to exist any Lien on any
property or asset now owned or hereafter acquired by it, or assign or sell any
income or revenues (including accounts receivable) or rights in respect of any
thereof, except:
(a) Permitted Encumbrances;
(b) any Lien on any property or asset of the Company or any
Subsidiary existing on the date hereof and set forth in Schedule 6.02;
provided that (i) such Lien shall not apply to any other property or
--------
asset of the Company or any Subsidiary and (ii) such Lien shall
82
secure only those obligations which it secures on the date hereof and
extensions, renewals and replacements thereof that do not increase the
outstanding principal amount thereof;
(c) any Lien existing on any property or asset prior to the
acquisition thereof by the Company or any Subsidiary or existing on any
property or asset of any Person that becomes a Subsidiary after the date
hereof prior to the time such Person becomes a Subsidiary; provided that
--------
(i) such Lien is not created in contemplation of or in connection with
such acquisition or such Person becoming a Subsidiary, as the case may
be, (ii) such Lien shall not apply to any other property or assets of the
Company or any Subsidiary and (iii) such Lien shall secure only those
obligations which it secures on the date of such acquisition or the date
such Person becomes a Subsidiary, as the case may be and extensions,
renewals and replacements thereof that do not increase the outstanding
principal amount thereof;
(d) Liens on fixed or capital assets acquired, constructed or
improved by the Company or any Subsidiary; provided that (i) such
--------
security interests secure Indebtedness permitted by clause (e) of
Section 6.02, (ii) such security interests and the Indebtedness secured
thereby are incurred prior to or within 90 days after such acquisition or
the completion of such construction or improvement, (iii) the
Indebtedness secured thereby does not exceed 100% of the cost of
acquiring, constructing or improving such fixed or capital assets and
(iv) such security interests shall not apply to any other property or
assets of the Company or any Subsidiary;
(e) Liens arising in connection with (i) a Securitization in Canada
in an amount not exceeding at any time Cdn. $95,000,000 of sold
receivables outstanding and (ii) any additional Securitizations
(including in Canada) in an amount not exceeding at any time $200,000,000
(including the Canadian Dollar Equivalent of any such Securitization in
Canada) of sold receivables outstanding, limited in each case to the
accounts receivable sold or transferred and interests therein or in any
trust or similar entity utilized to effect such Securitizations;
83
(f) any Lien with respect to other deposits made to secure liability
to insurance carriers under insurance or self-insurance arrangements;
(g) any Lien securing reimbursement obligations under letters of
credit, provided in each case that such Liens cover only the title
--------
documents and related goods (and any proceeds thereof) covered by the
related letter of credit;
(h) any attachment or judgment Lien, unless the judgment it secures
shall not, within 30 days after the entry thereof, have been discharged
or execution thereof stayed pending appeal or review, or shall not have
been discharged within 30 days after expiration of any such stay; and
(i) any Lien on property or assets of any Subsidiary securing
Indebtedness of such Subsidiary owing to the Company or any Subsidiary;
provided that (i) such Lien shall not apply to any other property or
--------
asset of such Subsidiaries and (ii) such Lien shall secure only those
obligations which it secures on the date hereof and extensions, renewals
and replacements thereof that do not increase the outstanding principal
amount thereof.
SECTION 6.03. Sale and Lease-Back Transactions. The Company will
---------------------------------
not, and will not permit any of its Subsidiaries to, directly or indirectly,
enter into any arrangement with any Person (other than a Subsidiary) whereby
it shall sell or transfer any property used or useful in its business, whether
now owned or hereafter acquired, and thereafter rent or lease such property or
other property which it intends to use for substantially the same purpose or
purposes as the property being sold or transferred, except for any such
arrangement or arrangements with an aggregate sale price not exceeding,
together with the aggregate principal amount of Indebtedness permitted by
clauses (e), (f) and (g) of Section 6.01, 10% of Consolidated Net Worth as
shown on the most recent consolidated balance sheet of the Company and its
Subsidiaries delivered pursuant to Section 5.01 (it being understood that this
Section 6.03 shall not apply to any sale of real estate in contemplation of
imminent replacement or relocation of facility and related short-term lease of
such real estate).
84
SECTION 6.04. Fundamental Changes. The Company will not, and will
--------------------
not permit any Material Subsidiary to, merge into or consolidate with any
other Person, or permit any other Person to merge into or consolidate with it,
or sell, transfer, lease or otherwise dispose of (in one transaction or in a
series of transactions) all or substantially all of its assets (whether now
owned or hereafter acquired), or liquidate or dissolve, except that, if at the
time thereof and immediately after giving effect thereto no Default shall have
occurred and be continuing, (i) any Person may merge into the Company in a
transaction in which the Company is the surviving corporation, (ii) any
Subsidiary may merge with or into any other Person in a transaction in which
the surviving entity is a Subsidiary, (iii) any Material Subsidiary (other
than the Delaware Borrower or the Canadian Borrower unless (x) to any Loan
Party or (y) such Borrower first repays all its Obligations hereunder and
agrees in writing not to effect any additional Borrowings hereunder) may sell,
transfer, lease or otherwise dispose of all or substantially all its assets to
any other Person, (iv) any Material Subsidiary (other than the Delaware
Borrower or the Canadian Borrower unless such entity first repays all its
Obligations hereunder and agrees in writing not to effect any additional
Borrowings hereunder) may liquidate or dissolve if the Company determines in
good faith that such liquidation or dissolution is in the best interests of
the Company and is not materially disadvantageous to the Lenders and (v) the
foregoing shall not restrict any Securitization referred to in Section
6.02(e).
SECTION 6.05. Leases. The Company will not, and will not permit
-------
any of its Subsidiaries to, create or suffer to exist any obligations for the
payment or rental for any property under leases or agreements to lease (other
than any arrangement pursuant to which the Company or any of its Subsidiaries
is a lessor), except operating leases in the ordinary course of business in a
manner and to an extent consistent with the historical practices of the
Company or such Subsidiary as of the date hereof; provided that the aggregate
--------
amount of operating lease payments made pursuant hereto does not exceed
$300,000,000 in the aggregate in any fiscal year.
SECTION 6.06. Transactions with Affiliates. The Company will not,
-----------------------------
and will not permit any of its Subsidiaries to, sell, lease or otherwise
transfer any property or assets to, or purchase, lease or otherwise
85
acquire any property or assets from, or otherwise engage in any other
transactions with, any of its Affiliates, except (a) on terms and conditions
not less favorable to the Company or such Subsidiary than could be obtained on
an arm's-length basis from unrelated third parties, (b) transactions between
or among the Company and/or its wholly owned Subsidiaries not involving any
other Affiliate and (c) the transactions described in the Spin-Off
Information.
SECTION 6.07. Restrictive Agreements. The Company will not, and
-----------------------
will not permit any of its Subsidiaries to, directly or indirectly, enter
into, incur or permit to exist any agreement or other arrangement that
prohibits, restricts or imposes any condition upon (a) the ability of the
Company or any Subsidiary to create, incur or permit to exist any Lien upon
any of its material property or assets, or (b) the ability of any Subsidiary
to pay dividends or other distributions with respect to any shares of its
capital stock or to make or repay loans or advances to the Company or any
other Subsidiary or to Guarantee Indebtedness of the Company or any other
Subsidiary; provided that (i) the foregoing shall not apply to restrictions
--------
and conditions imposed by law or by this Agreement, (ii) the foregoing shall
not apply to restrictions and conditions existing on the date hereof
identified on Schedule 6.07 or existing with respect to a Subsidiary at the
time it becomes a Subsidiary and not created in contemplation thereof (but
shall apply to any extension or renewal of, or any amendment or modification
expanding the scope of, any such restriction or condition), (iii) the
foregoing shall not apply to customary restrictions and conditions contained
in agreements relating to the sale of a Subsidiary pending such sale, provided
such restrictions and conditions apply only to the Subsidiary that is to be
sold and such sale is permitted hereunder, (iv) clause (a) of the foregoing
shall not apply to restrictions or conditions imposed by any agreement
relating to secured Indebtedness permitted by this Agreement if such
restrictions or conditions apply only to the property or assets securing such
Indebtedness and (v) clause (a) of the foregoing shall not apply to customary
provisions in leases and other contracts restricting the assignment thereof.
SECTION 6.08. Leverage Ratio. The Leverage Ratio shall not equal
---------------
or exceed .55 to 1.00 at any time.
SECTION 6.09. Minimum Consolidated Net Worth. Consolidated Net
-------------------------------
Worth shall not at any date be less than
86
the sum of (i) $745,000,000 plus (ii) 50% of the Consolidated Net Income, if
positive, for each fiscal year ending after December 31, 1996, plus (iii) if
such date is not the last day of a fiscal year, 50% of Consolidated Net
Income, if positive, for the period consisting of any fiscal quarters of the
then current fiscal year that have ended on or before such date.
ARTICLE VII
Events of Default
-----------------
If any of the following events (each, an "Event of Default") shall
----------------
occur:
(a) any Borrower shall fail to pay any principal of any Loan when
and as the same shall become due and payable, whether at the due date
thereof or at a date fixed for prepayment thereof or otherwise;
(b) any Borrower shall fail to pay any interest on any Loan or any
fee or any other amount (other than an amount referred to in clause
(a) of this Article) payable under this Agreement, when and as the same
shall become due and payable, and such failure shall continue unremedied
for a period of five days;
(c) any representation or warranty made or deemed made by or on
behalf of the Company or any Subsidiary in any Loan Document or any
amendment or modification hereof or waiver hereunder, or in any officer's
certificate or financial statement furnished pursuant to or in connection
with any Loan Document or any amendment or modification hereof or thereof
or waiver hereunder or thereunder, shall prove to have been incorrect in
any material respect when made or deemed made;
(d) the Company shall fail to observe or perform any covenant,
condition or agreement contained in Section 5.02(a), 5.03 (with respect
to any Borrower's existence) or 5.08 or in Article VI;
(e) any Loan Party shall fail to observe or perform any covenant,
condition or agreement contained in any Loan Document (other than those
specified in clause (a), (b), (d) or (m) of this Article), and such
87
failure shall continue unremedied for a period of 30 days after notice
thereof from the Administrative Agent to the Company (which notice will
be given at the request of any Lender);
(f) the Company or any Subsidiary shall fail to make any payment
(whether of principal or interest and regardless of amount) in respect of
any Material Indebtedness, when and as the same shall become due and
payable;
(g) any event or condition occurs that results in any Material
Indebtedness becoming due prior to its scheduled maturity or that enables
or permits the holder or holders of any Material Indebtedness or any
trustee or agent on its or their behalf to cause any Material
Indebtedness to become due, or to require the prepayment, repurchase,
redemption or defeasance thereof, prior to its scheduled maturity;
provided that this clause (g) shall not apply to secured Indebtedness
--------
that becomes due as a result of the voluntary sale or transfer of the
property or assets securing such Indebtedness;
(h) an involuntary proceeding shall be commenced or an involuntary
petition shall be filed seeking (i) liquidation, reorganization or other
relief in respect of the Company, any other Borrower or any Material
Subsidiary or its debts, or of a substantial part of its assets, under
any Federal, state or foreign bankruptcy, insolvency, receivership or
similar law now or hereafter in effect or (ii) the appointment of a
receiver, trustee, custodian, sequestrator, conservator or similar
official for the Company, any other Borrower or any Material Subsidiary
or for a substantial part of its assets, and, in any such case, such
proceeding or petition shall continue undismissed for 60 days or an order
or decree approving or ordering any of the foregoing shall be entered;
(i) the Company, any other Borrower or any Material Subsidiary shall
(i) voluntarily commence any proceeding or file any petition seeking
liquidation, reorganization or other relief under any Federal, state or
foreign bankruptcy, insolvency, receivership or similar law now or
hereafter in effect, (ii) consent to the institution of, or fail to
contest in a timely and appropriate manner, any proceeding or petition
88
described in clause (h) of this Article, (iii) apply for or consent to
the appointment of a receiver, trustee, custodian, sequestrator,
conservator or similar official for the Company, any other Borrower or
any Material Subsidiary or for a substantial part of its assets,
(iv) file an answer admitting the material allegations of a petition
filed against it in any such proceeding, (v) make a general assignment
for the benefit of creditors or (vi) take any affirmative action for the
purpose of effecting any of the foregoing;
(j) the Company, any other Borrower or any Material Subsidiary shall
admit in writing its inability to pay its debts as they become due;
(k) one or more judgments for the payment of money in an aggregate
amount in excess of $20,000,000 (which amount is not fully covered by
insurance) shall be rendered against the Company, any Subsidiary or any
combination thereof and the same shall remain undischarged for a period
of 30 consecutive days during which execution shall not be effectively
stayed, or any action shall be legally taken by a judgment creditor to
attach or levy upon any assets of the Company or any Subsidiary to
enforce any such judgment;
(l) an ERISA Event shall have occurred that, in the reasonable
opinion of the Required Lenders, when taken together with all other ERISA
Events that have occurred, could reasonably be expected to result in
liability of the Company and its Subsidiaries in an aggregate amount
exceeding (i) $10,000,000 in any year or (ii) $20,000,000 for all
periods;
(m) any Loan Party shall fail to observe or perform any covenant,
condition or agreement contained in Article IX or the guarantee of the
Company hereunder or any Subsidiary Guarantee Agreement shall not be (or
shall be claimed by any Person not to be) valid or in full force and
effect; or
(n) a Change in Control shall occur; then, and in every such event
(other than an event with respect to any Borrower described in clause (h) or
(i) of this Article), and at any time thereafter during the continuance of
such event, the Administrative Agent may with
89
the consent of the Required Lenders, and at the request of the Required
Lenders shall, by written notice to the Company, take either or both of the
following actions, at the same or different times: (i) terminate the
Commitments, and thereupon the Commitments shall terminate immediately, and
(ii) declare the Loans then outstanding to be due and payable in whole (or in
part, in which case any principal not so declared to be due and payable may
thereafter be declared to be due and payable), and thereupon the principal of
the Loans so declared to be due and payable, together with accrued interest
thereon and all fees and other obligations of the Borrowers accrued hereunder,
shall become due and payable immediately, without presentment, demand,
protest or other notice of any kind, all of which are hereby waived by each
Borrower; and in case of any event with respect to any Borrower described in
clause (h) or (i) of this Article, the Commitments shall automatically
terminate and the principal of the Loans then outstanding, together with
accrued interest thereon and all fees and other obligations of the Borrowers
accrued hereunder, shall automatically become due and payable, without
presentment, demand, protest or other notice of any kind, all of which are
hereby waived by each Borrower.
ARTICLE VIII
The Agents
----------
Each of the Lenders hereby irrevocably appoints the Administrative
Agent, and each of the Canadian Lenders hereby irrevocably appoints the
Canadian Agent, as its agent and authorizes such Agent to take such actions on
its behalf and to exercise such powers as are delegated to such Agent by the
terms hereof, together with such actions and powers as are reasonably
incidental thereto. For purposes of this Article, the Administrative Agent
and the Canadian Agent are referred to as the Agents.
Each bank serving as an Agent hereunder shall have the same rights
and powers in its capacity as a Lender as any other Lender and may exercise
the same as though it were not the Agent, and such bank and its Affiliates may
accept deposits from, lend money to and generally engage in any kind of
business with the Company or any Subsidiary or other Affiliate thereof as if
it were not an Agent hereunder.
90
The Agents shall not have any duties or obligations except those
expressly set forth herein. Without limiting the generality of the foregoing,
(a) the Agents shall not be subject to any fiduciary or other implied duties,
regardless of whether a Default has occurred and is continuing, (b) the Agents
shall not have any duty to take any discretionary action or exercise any
discretionary powers, except discretionary rights and powers expressly
contemplated hereby that the applicable Agent is required to exercise in
writing by the Required Lenders (or such other number or percentage of the
Lenders as shall be necessary under the circumstances as provided in
Section 10.02), and (c) except as expressly set forth herein, the Agents
shall not have any duty to disclose, and shall not be liable for the failure
to disclose, any information relating to the Company or any of its
Subsidiaries that is communicated to or obtained by any bank serving as Agent
or any of its Affiliates in any capacity. Neither Agent shall be liable for
any action taken or not taken by it with the consent or at the request of the
Required Lenders (or such other number or percentage of the Lenders as shall
be necessary under the circumstances as provided in Section 10.02) or in the
absence of its own gross negligence or wilful misconduct. The Agents shall be
deemed not to have knowledge of any Default unless and until written notice
thereof is given to the Agents by the Company or a Lender, and the Agents
shall not be responsible for or have any duty to ascertain or inquire into
(i) any statement, warranty or representation made in or in connection with
any Loan Document, (ii) the contents of any certificate, report or other
document delivered hereunder or in connection herewith, (iii) the performance
or observance of any of the covenants, agreements or other terms or conditions
set forth herein, (iv) the validity, enforceability, effectiveness or
genuineness of any Loan Document or any other agreement, instrument or
document, or (v) the satisfaction of any condition set forth in Article IV or
elsewhere herein, other than to confirm receipt of items expressly required to
be delivered to the Agents.
Each Agent shall be entitled to rely upon, and shall not incur any
liability for relying upon, any notice, request, certificate, consent,
statement, instrument, document or other writing believed by it to be genuine
and to have been signed or sent by the proper Person. Each Agent also may
rely upon any statement made to it orally or by telephone and believed by it
to be made by the proper Person, and shall not incur any liability for relying
91
thereon. Each Agent may consult with legal counsel (who may be counsel for
the Company), independent accountants and other experts selected by it, and
shall not be liable for any action taken or not taken by it in accordance with
the advice of any such counsel, accountants or experts.
The Agents may perform any and all their duties and exercise their
rights and powers by or through any one or more sub-agents appointed by the
applicable Agent. Each Agent and any such sub-agent may perform any and all
of its duties and exercise its rights and powers through its respective
Related Parties. The exculpatory provisions of the preceding paragraphs shall
apply to any such sub-agent and to the Related Parties of the Agents and any
such sub-agent and shall apply to their respective activities in connection
with the syndication of the credit facilities provided for herein as well as
activities as Agents.
Subject to the appointment and acceptance of a successor Agent as
provided in this paragraph, either Agent may resign at any time by notifying
the Lenders, the other Agent and the Company. Upon any such resignation, the
Required Lenders shall have the right, in consultation with the Company, to
appoint a successor. If no successor shall have been so appointed by the
Required Lenders and shall have accepted such appointment within 30 days after
the retiring Agent gives notice of its resignation, then the retiring Agent
may, on behalf of the Lenders, appoint a successor Agent in consultation with
the Company which shall be a bank with an office in New York, New York, or
Toronto, as applicable, or an Affiliate of any such bank. Upon the acceptance
of its appointment as an Agent hereunder by a successor, such successor shall
succeed to and become vested with all the rights, powers, privileges and
duties of the retiring Agent, and the retiring Agent shall be discharged from
its duties and obligations hereunder. The fees payable by the Company to a
successor Agent shall be the same as those payable to its predecessor unless
otherwise agreed between the Company and such successor. After an Agent's
resignation hereunder, the provisions of this Article and Section 10.03 shall
continue in effect for the benefit of such retiring Agent, its sub-agents and
their respective Related Parties in respect of any actions taken or omitted to
be taken by any of them while it was acting as Agent.
Each Lender acknowledges that it has, independently and without
reliance upon either Agent or any other Lender and based on such documents and
information as
92
it has deemed appropriate, made its own credit analysis and decision to enter
into this Agreement. Each Lender also acknowledges that it will,
independently and without reliance upon either Agent or any other Lender and
based on such documents and information as it shall from time to time deem
appropriate, continue to make its own decisions in taking or not taking action
under or based upon this Agreement, any related agreement or any document
furnished hereunder or thereunder.
ARTICLE IX
Guarantee
---------
In order to induce the Lenders to extend credit hereunder, the
Company hereby irrevocably and unconditionally guarantees, as a primary
obligor and not merely as a surety, the Obligations. The Company further
agrees that the due and punctual payment of the Obligations may be extended or
renewed, in whole or in part, without notice to or further assent from it, and
that it will remain bound upon its Guarantee hereunder notwithstanding any
such extension or renewal of any Obligation.
The Company waives presentment to, demand of payment from and
protest to the Delaware Borrower or the Canadian Borrower of any of the
Obligations, and also waives notice of acceptance of its obligations and
notice of protest for nonpayment. The obligations of the Company hereunder
shall not be affected by (a) the failure of any Lender, the Administrative
Agent or the Canadian Agent to assert any claim or demand or to enforce any
right or remedy against the Delaware Borrower or the Canadian Borrower under
the provisions of any Loan Document or otherwise; (b) any rescission, waiver,
amendment or modification of any of the terms or provisions of any Loan
Document or any other instrument or agreement; or (c) the failure of the
Administrative Agent, the Canadian Agent or any Lender to exercise any right
or remedy against the Delaware Borrower or the Canadian Borrower.
The Company further agrees that its agreement hereunder constitutes
a promise of payment when due (whether or not any bankruptcy or similar
proceeding shall have stayed the accrual or collection of any of the
Obligations or operated as a discharge thereof) and not merely of collection
and waives any right to require that any resort
93
be had by any Lender to any balance of any deposit account or credit on the
books of any Lender in favor of the Delaware Borrower or the Canadian Borrower
or any other Person.
The obligations of the Company hereunder shall not be subject to any
reduction, limitation, impairment or termination for any reason, and shall not
be subject to any defense or setoff, counterclaim, recoupment or termination
whatsoever, by reason of the invalidity, illegality or unenforceability of the
Obligations, any impossibility in the performance of the Obligations or
otherwise. Without limiting the generality of the foregoing, the obligations
of the Company hereunder shall not be discharged or impaired or otherwise
affected by the failure of the Administrative Agent, the Canadian Agent or any
Lender to assert any claim or demand or to enforce any remedy under any Loan
Document or any other agreement, by any waiver or modification in respect of
any thereof, by any default, failure or delay, wilful or otherwise, in the
performance of the Obligations, or by any other act or omission which may or
might in any manner or to any extent vary the risk of the Company or otherwise
operate as a discharge of the Company or any other Borrower as a matter of law
or equity.
The Company further agrees that its obligations hereunder shall
continue to be effective or be reinstated, as the case may be, if at any time
payment, or any part thereof, of any Obligation is rescinded or must otherwise
be restored by the Administrative Agent, the Canadian Agent or any Lender upon
the bankruptcy or reorganization of any Borrower or otherwise.
In furtherance of the foregoing and not in limitation of any other
right which the Administrative Agent, the Canadian Agent or any Lender may
have at law or in equity against the Company by virtue hereof, upon the
failure of the Delaware Borrower or the Canadian Borrower to pay any
Obligation when and as the same shall become due, whether at maturity, by
acceleration, after notice of prepayment or otherwise, the Company hereby
promises to and will, upon receipt of written demand by the Administrative
Agent or the Canadian Agent, as applicable, forthwith pay, or cause to be
paid, in cash the amount of such unpaid Obligation. The Company further
agrees that if payment in respect of any Obligation shall be due in a currency
other than dollars and/or at a place of payment other than New York and if, by
reason of any Change in Law, disruption
94
of currency or foreign exchange markets, war or civil disturbance or similar
event, payment of such Obligation in such currency or at such place of payment
shall be impossible or, in the judgment of any applicable Lender, not
consistent with the protection of its rights or interests, then, at the
election of any applicable Lender, the Company shall make payment of such
Obligation in dollars (based upon the applicable Exchange Rate in effect on
the date of payment) and/or in New York, and shall indemnify such Lender
against any losses or expenses that it shall sustain as a result of such
alternative payment.
Upon payment by the Company of any Obligation, each Lender shall, in
a reasonable manner, assign to the Company the amount of such Obligation owed
to it and so paid, such assignment to be pro tanto to the extent to which the
--- -----
Obligation in question was discharged by the Company, or make such disposition
thereof as the Company shall direct (all without recourse to any Lender and
without any representation or warranty by any Lender).
Upon payment by the Company of any sums as provided above, all
rights of Company against the Delaware Borrower or Canadian Borrower arising
as a result thereof by way of right of subrogation or otherwise shall in all
respects be subordinated and junior in right of payment to the prior
indefeasible payment in full of all the Obligations owed by such Borrower to
the Lenders.
ARTICLE X
Miscellaneous
-------------
SECTION 10.01. Notices. Except in the case of notices and other
--------
communications expressly permitted to be given by telephone, all notices and
other communications provided for herein shall be in writing and shall be
delivered by hand or overnight courier service, mailed by certified or
registered mail or sent by telecopy (and confirmed), as follows:
(a) if to the Borrowers, to or in care of the Company at 825
Duportail Road, Wayne, PA 19087-5589, Attention of Treasury Department
(Telecopy No. (610) 296-3248);
95
(b) if to the Administrative Agent, to The Chase Manhattan Bank,
Agent Bank Services Group, One Chase Manhattan Plaza, 8th Floor, New
York, New York 10081, Attention of Janet Belden (Telecopy No.
(212) 552-5658), with a copy to The Chase Manhattan Bank, One Chase
Manhattan Plaza, New York 10081, Attention of Helene Santo (Telecopy No.
(212) 552-7773) and to any other applicable address specified in the
Alternate Procedures;
(c) if to the Canadian Agent, to it at 9/F TD Bank Tower, TD Center,
Toronto, Ontario M5K 1A2, Attention of Derek Hannon (Telecopy No.
416-982-5535); and
(d) if to any other Lender, to it at its address (or telecopy
number) set forth in its Administrative Questionnaire.
Any party hereto may change its address or telecopy number for notices and
other communications hereunder by notice to the other parties hereto. All
notices and other communications given to any party hereto in accordance with
the provisions of this Agreement shall be deemed to have been given on the
date of receipt.
SECTION 10.02. Waivers; Amendments. (a) No failure or delay by
--------------------
the Administrative Agent, the Canadian Agent or any Lender in exercising any
right or power hereunder shall operate as a waiver thereof, nor shall any
single or partial exercise of any such right or power, or any abandonment or
discontinuance of steps to enforce such a right or power, preclude any other
or further exercise thereof or the exercise of any other right or power. The
rights and remedies of the Administrative Agent, the Canadian Agent and the
Lenders hereunder are cumulative and are not exclusive of any rights or
remedies that they would otherwise have. No waiver of any provision of this
Agreement or consent to any departure by any Borrower therefrom shall in any
event be effective unless the same shall be permitted by paragraph (b) of this
Section, and then such waiver or consent shall be effective only in the
specific instance and for the purpose for which given. Without limiting the
generality of the foregoing, the making of a Loan shall not be construed as a
waiver of any Default, regardless of whether the Administrative Agent, any
Lender or the Canadian Agent may have had notice or knowledge of such Default
at the time.
96
(b) Neither this Agreement nor any provision hereof may be waived,
amended or modified except pursuant to an agreement or agreements in writing
entered into by the Company and the Required Lenders or by the Company and the
Administrative Agent with the consent of the Required Lenders; provided that
--------
no such agreement shall (i) increase the Commitment of any Lender or the
Canadian Commitment of any Canadian Lender without the written consent of such
Lender, (ii) reduce the principal amount of any Loan or reduce the rate of
interest thereon, or reduce any fees payable hereunder, without the written
consent of each Lender affected thereby, (iii) postpone the scheduled date of
payment of the principal amount of any Loan, or any interest thereon, or any
fees payable hereunder, or reduce the amount of, waive or excuse any such
payment, or postpone the scheduled date of expiration of any Commitment,
without the written consent of each Lender affected thereby (or, in the case
of any Canadian Commitment, without the written consent of each Canadian
Lender affected thereby), (iv) change Section 2.17(b) or (c) in a manner that
would alter the pro rata sharing of payments required thereby, without the
written consent of each Lender, (v) release the Company or any Subsidiary
Guarantor from, or limit or condition, its obligations under Article IX, the
Subsidiary Guarantee Agreement or the Indemnity, Subrogation and Contribution
Agreement, respectively, or (vi) change any of the provisions of this Section
or the definition of "Required Lenders" or any other provision hereof
specifying the number or percentage of Lenders required to waive, amend or
modify any rights hereunder or make any determination or grant any consent
hereunder, without the written consent of each Lender; provided further that
----------------
no such agreement shall amend, modify or otherwise affect the rights or duties
of the Administrative Agent, the Canadian Agent or the Swingline Lender
hereunder without the prior written consent of the Administrative Agent, the
Canadian Agent or the Swingline Lender, as the case may be.
SECTION 10.03. Expenses; Indemnity; Damage Waiver. (a) The
-----------------------------------
Company shall pay (i) all reasonable out-of-pocket expenses incurred by the
Administrative Agent and its Affiliates, including the reasonable fees,
charges and disbursements of counsel for the Administrative Agent, in
connection with the syndication of the credit facilities provided for herein,
the preparation and administration of the Loan Documents or any amendments,
modifications or waivers of the provisions hereof or thereof (whether or not
the transactions contemplated hereby or thereby shall be
97
consummated) and (ii) all reasonable out-of-pocket expenses incurred by the
Administrative Agent or any Lender, including the reasonable fees, charges and
disbursements of any counsel for the Administrative Agent or any Lender, in
connection with the enforcement or protection of its rights in connection with
the Loan Documents, including its rights under this Section, or in connection
with the Loans made hereunder, including all such out-of-pocket expenses
incurred during any workout, restructuring or negotiations in respect of such
Loans.
(b) The Company shall indemnify the Administrative Agent, the
Canadian Agent and each Lender, and each Related Party of any of the foregoing
Persons (each such Person being called an "Indemnitee") against, and hold each
----------
Indemnitee harmless from, any and all losses, claims, damages (excluding
special, indirect, consequential or punitive damages), liabilities and related
expenses, including the reasonable fees, charges and disbursements of any
counsel for any Indemnitee, incurred by or asserted against any Indemnitee
arising out of, in connection with, or as a result of (i) the execution or
delivery of this Agreement, any other Loan Document or any agreement or
instrument contemplated hereby or thereby, the performance by the parties
hereto or thereto of their respective obligations hereunder or thereunder or
the consummation of the Transactions or any other transactions contemplated
hereby, (ii) any Loan or the use of the proceeds therefrom, (iii) any actual
or alleged presence or release of Hazardous Materials on or from any property
owned or operated by the Company or any of its Subsidiaries, or any
Environmental Liability related in any way to the Company or any of its
Subsidiaries, or (iv) any actual or prospective claim, litigation,
investigation or proceeding relating to any of the foregoing, whether based on
contract, tort or any other theory and regardless of whether any Indemnitee is
a party thereto; provided that such indemnity shall not, as to any Indemnitee,
--------
be available to the extent that such losses, claims, damages, liabilities or
related expenses are determined by a court of competent jurisdiction by final
and nonappealable judgment to have resulted from the gross negligence or
wilful misconduct of such Indemnitee.
(c) To the extent that the Company fails to pay any amount required
to be paid by it to the Administrative Agent, the Canadian Agent or the
Swingline Lender under paragraph (a) or (b) of this Section, each Lender
severally agrees to pay to the Administrative Agent, the Canadian
98
Agent or the Swingline Lender, as the case may be, such Lender's Applicable
Percentage (determined as of the time that the applicable unreimbursed expense
or indemnity payment is sought) of such unpaid amount; provided that the
--------
unreimbursed expense or indemnified loss, claim, damage, liability or related
expense, as the case may be, was incurred by or asserted against the
Administrative Agent, the Canadian Agent or the Swingline Lender in its
capacity as such.
(d) To the extent permitted by applicable law, the Company and each
other Borrower shall not assert, and hereby waive, any claim against any
Indemnitee, on any theory of liability, for special, indirect, consequential
or punitive damages (as opposed to direct or actual damages) arising out of,
in connection with, or as a result of, this Agreement or any other Loan
Document or any agreement or instrument contemplated hereby or thereby, the
Transactions, any Loan or the use of the proceeds thereof.
(e) All amounts due under this Section shall be payable promptly
but in any event not later than 10 days after written demand therefor.
SECTION 10.04. Successors and Assigns. (a) The provisions of this
-----------------------
Agreement shall be binding upon and inure to the benefit of the parties hereto
and their respective successors and assigns permitted hereby, except that no
Borrower may assign or otherwise transfer any of its rights or obligations
hereunder without the prior written consent of each Lender (and any attempted
assignment or transfer by such Borrower without such consent shall be null and
void). Nothing in this Agreement, expressed or implied, shall be construed to
confer upon any Person (other than the parties hereto, their respective
successors and assigns permitted hereby and, to the extent expressly
contemplated hereby, the Related Parties of each of the Administrative Agent,
the Canadian Agent and the Lenders) any legal or equitable right, remedy or
claim under or by reason of this Agreement.
(b) Any Lender may assign to one or more assignees all or a portion
of its rights and obligations under this Agreement (including all or a portion
of its Commitment or its Canadian Commitment and the Loans at the time owing
to it); provided that (i) except in the case of an assignment to a Lender or
--------
an Affiliate of a Lender, each of the Company and the Administrative Agent
(and, in the case of an assignment of all or a portion of a Commitment or
99
any Lender's obligations in respect of its Swingline Exposure, the Swingline
Lenders and, in the case of an assignment of all or a portion of its Canadian
Commitment, the Canadian Agent) must give its prior written consent to such
assignment (which consent shall not be unreasonably withheld), (ii) except in
the case of an assignment to a Lender or an Affiliate of a Lender or an
assignment of the entire remaining amount of the assigning Lender's Commitment
or Canadian Commitment, the amount of the Commitment or the amount of the
Canadian Commitment (and the associated Commitment) of the assigning Lender
subject to each such assignment (determined as of the date the Assignment and
Acceptance with respect to such assignment is delivered to the Administrative
Agent or the Canadian Agent, as applicable) shall not be less than $10,000,000
unless each of the Company and the Administrative Agent or the Canadian Agent,
as applicable, otherwise consents, (iii) each partial assignment shall be made
as an assignment of a proportionate part (as provided in the preceding clause
(ii)) of all the assigning Lender's rights and obligations under this
Agreement, except that this clause (iii) shall not apply to rights in respect
of outstanding Competitive Loans, (iv) the parties to each assignment shall
execute and deliver to the Administrative Agent or the Canadian Agent, as
applicable, an Assignment and Acceptance, together with a processing and
recordation fee of $3,500 (or Cdn $4,500, as applicable), (v) the assignee, if
it shall not be a Lender, shall deliver to the Administrative Agent or the
Canadian Agent, as applicable, an Administrative Questionnaire, (vi) no
assignment of any portion of a Canadian Commitment may be made unless
accompanied by an assignment to the same assignee of an equal or greater
Commitment amount, and (vii) no Canadian Lender may assign any portion of its
Commitment if after giving effect thereto its Canadian Commitment would exceed
its Commitment; and provided further that any consent of the Company otherwise
----------------
required under this paragraph shall not be required if an Event of Default
under clause (h) or (i) of Article VII has occurred and is continuing.
Subject to acceptance and recording thereof pursuant to paragraph (d) of this
Section, from and after the effective date specified in each Assignment and
Acceptance the assignee thereunder shall be a party hereto and, to the extent
of the interest assigned by such Assignment and Acceptance, have the rights
and obligations of a Lender and, if applicable, a Canadian Lender under this
Agreement, and the assigning Lender thereunder shall, to the extent of the
interest assigned by such Assignment and Acceptance, be released from its
obligations under this
100
Agreement (and, in the case of an Assignment and Acceptance covering all of
the assigning Lender's rights and obligations under this Agreement, such
Lender shall cease to be a party hereto but shall continue to be entitled to
the benefits of Sections 2.14, 2.15, 2.16 and 10.03). Any assignment or
transfer by a Lender of rights or obligations under this Agreement that does
not comply with this paragraph shall be treated for purposes of this Agreement
as a sale by such Lender of a participation in such rights and obligations in
accordance with paragraph (e) of this Section.
(c) The Administrative Agent, acting for this purpose as an agent
of the Borrowers, shall maintain at one of its offices in The City of New York
a copy of each Assignment and Acceptance delivered to it and a register for
the recordation of the names and addresses of the Lenders, and the Commitment
of, and principal amount of the Loans owing to, each Lender pursuant to the
terms hereof from time to time (the "Register"). The entries in the Register
--------
shall be conclusive, and each Borrower, the Administrative Agent and the
Lenders may treat each Person whose name is recorded in the Register pursuant
to the terms hereof as a Lender hereunder for all purposes of this Agreement,
notwithstanding notice to the contrary. The Register shall be available for
inspection by the Borrowers and any Lender, at any reasonable time and from
time to time upon reasonable prior notice.
(d) The Canadian Agent, acting for this purpose on behalf of the
Canadian Borrower, shall maintain at one of its offices in Toronto a copy of
each Assignment and Acceptance delivered to it and a register for the
recordation of the names and addresses of the Canadian Lenders, and the
Canadian Commitment of, and principal amount of the Canadian Loans owing to,
each Canadian Lender pursuant to the terms hereof from time to time (the
"Register"). The entries in the Register shall be conclusive, and the
---------
Canadian Borrower, the Canadian Agent and the Canadian Lenders may treat each
Person whose name is recorded in the Register pursuant to the terms hereof as
a Canadian Lender hereunder for all purposes of this Agreement,
notwithstanding notice to the contrary. The Register shall be available for
inspection by the Canadian Borrower and any Canadian Lender at any reasonable
time and from time to time upon reasonable prior notice. The Canadian Agent
shall furnish to the Administrative Agent copies of each Borrowing Request,
Assignment and Acceptance,
101
notices or any other documents received by it in connection with any Canadian
Loan.
(e) Upon its receipt of a duly completed Assignment and Acceptance
executed by an assigning Lender and an assignee, the assignee's completed
Administrative Questionnaire (unless the assignee shall already be a Lender
hereunder), the processing and recordation fee referred to in paragraph (b) of
this Section and any written consent to such assignment required by paragraph
(b) of this Section, the Administrative Agent or the Canadian Agent, as
applicable, shall accept such Assignment and Acceptance and record the
information contained therein in the Register. No assignment shall be
effective for purposes of this Agreement unless it has been recorded in the
Register as provided in this paragraph.
(f) Any Lender may, without the consent of any Borrower, the
Administrative Agent, the Canadian Agent or the Swingline Lender, sell
participations to one or more banks or other entities (a "Participant") in all
-----------
or a portion of such Lender's rights and obligations under this Agreement
(including all or a portion of its Commitment, Canadian Commitment and the
Loans owing to it); provided that (i) such Lender's obligations under this
--------
Agreement shall remain unchanged, (ii) such Lender shall remain solely
responsible to the other parties hereto for the performance of such
obligations, (iii) the Borrowers, the Administrative Agent, the Canadian Agent
and the other Lenders shall continue to deal solely and directly with such
Lender in connection with such Lender's rights and obligations under this
Agreement and (iv) such Lender shall notify the Company of any such
participation. Any agreement or instrument pursuant to which a Lender sells
such a participation shall provide that such Lender shall retain the sole
right to enforce this Agreement and to approve any amendment, modification or
waiver of any provision of this Agreement; provided that such agreement or
--------
instrument may provide that such Lender will not, without the consent of the
Participant, agree to any amendment, modification or waiver described in the
first proviso to Section 10.02(b) that affects such Participant. Subject to
paragraph (g) of this Section, each Borrower agrees that each Participant
shall be entitled to the benefits of Sections 2.14, 2.15 and 2.16 to the same
extent as if it were a Lender and had acquired its interest by assignment
pursuant to paragraph (b) of this Section (provided that notwithstanding
--------
anything else herein to the contrary, no such participating bank or entity
shall
102
be entitled to receive any greater cost or amount pursuant to such Sections as
to any cost or amount described therein existing or reasonably foreseeable at
the time of the sale of such participation than such Lender would have been
entitled to receive in respect of the amount of the participation sold by such
Lender to such participating bank or entity had such sale not occurred). To
the extent permitted by law, each Participant also shall be entitled to the
benefits of Section 10.08 as though it were a Lender, provided such
Participant agrees to be subject to Section 2.17(c) as though it were a
Lender.
(g) A Participant shall not be entitled to receive any greater
payment under Section 2.14 or 2.16 than the applicable Lender would have been
entitled to receive with respect to the participation sold to such
Participant, unless the sale of the participation to such Participant is made
with the Company's prior written consent. A Participant that would be a
Foreign Lender if it were a Lender shall not be entitled to the benefits of
Section 2.16 unless the Company is notified of the participation sold to such
Participant and such Participant agrees, for the benefit of the Company, to
comply with Section 2.16(e) as though it were a Lender.
(h) Any Lender may at any time pledge or assign a security interest
in all or any portion of its rights under this Agreement to secure obligations
of such Lender, including any pledge or assignment to secure obligations to a
Federal Reserve Bank, and this Section shall not apply to any such pledge or
assignment of a security interest; provided that no such pledge or assignment
--------
of a security interest shall release a Lender from any of its obligations
hereunder or substitute any such pledgee or assignee for such Lender as a
party hereto.
SECTION 10.05. Survival. All covenants, agreements,
---------
representations and warranties made by the Borrowers herein and in the
certificates or other instruments delivered in connection with or pursuant to
this Agreement shall be considered to have been relied upon by the other
parties hereto and shall survive the execution and delivery of this Agreement
and the making of any Loans, regardless of any investigation made by any such
other party or on its behalf and notwithstanding that the Administrative
Agent, the Canadian Bank or any Lender may have had notice or knowledge of any
Default or incorrect representation or warranty at the time any credit is
extended hereunder, and
103
shall continue in full force and effect as long as the principal of or any
accrued interest on any Loan or any fee or any other amount payable under this
Agreement is outstanding and unpaid and so long as the Commitments have not
expired or terminated. The provisions of Sections 2.14, 2.15, 2.16 and 10.03
and Article VIII shall survive and remain in full force and effect regardless
of the consummation of the transactions contemplated hereby, the repayment of
the Loans and the Commitments or the termination of this Agreement or any
provision hereof.
SECTION 10.06. Counterparts; Integration; Effectiveness. This
---------------------------------------------------------
Agreement may be executed in counterparts (and by different parties hereto on
different counterparts), each of which shall constitute an original, but all
of which when taken together shall constitute a single contract. This
Agreement and any separate letter agreements with respect to fees payable to
the Administrative Agent constitute the entire contract among the parties
relating to the subject matter hereof and supersede any and all previous
agreements and understandings, oral or written, relating to the subject matter
hereof. Except as provided in Section 4.01, this Agreement shall become
effective when it shall have been executed by the Administrative Agent and the
Canadian Agent and when the Administrative Agent shall have received
counterparts hereof which, when taken together, bear the signatures of each of
the other parties hereto, and thereafter shall be binding upon and inure to
the benefit of the parties hereto and their respective successors and assigns.
Delivery of an executed counterpart of a signature page of this Agreement by
telecopy shall be effective as delivery of a manually executed counterpart of
this Agreement.
SECTION 10.07. Severability. Any provision of this Agreement held
-------------
to be invalid, illegal or unenforceable in any jurisdiction shall, as to such
jurisdiction, be ineffective to the extent of such invalidity, illegality or
unenforceability without affecting the validity, legality and enforceability
of the remaining provisions hereof; and the invalidity of a particular
provision in a particular jurisdiction shall not invalidate such provision in
any other jurisdiction.
SECTION 10.08. Right of Setoff. If an Event of Default shall have
----------------
occurred and be continuing, each Lender and each of its Affiliates is hereby
authorized at any time
104
and from time to time, to the fullest extent permitted by law, to set off and
apply any and all deposits (general or special, time or demand, provisional or
final) at any time held and other obligations at any time owing by such Lender
or Affiliate to or for the credit or the account of any Borrower against any
of and all the obligations of such Borrower now or hereafter existing under
this Agreement held by such Lender, irrespective of whether or not such Lender
shall have made any demand under this Agreement and although such obligations
may be unmatured. The rights of each Lender under this Section are in
addition to other rights and remedies (including other rights of setoff) which
such Lender may have.
SECTION 10.09. Governing Law; Jurisdiction; Consent to Service of
--------------------------------------------------
Process. (a) This Agreement shall be construed in accordance with and
--------
governed by the law of the State of New York.
(b) Each Borrower hereby irrevocably and unconditionally submits,
for itself and its property, to the nonexclusive personal jurisdiction of the
Supreme Court of the State of New York sitting in New York County and of the
United States District Court of the Southern District of New York, and any
appellate court from any thereof, in any action or proceeding arising out of
or relating to any Loan Document, or for recognition or enforcement of any
judgment, and each of the parties hereto hereby irrevocably and
unconditionally agrees that all claims in respect of any such action or
proceeding may be heard and determined in such New York State or, to the
extent permitted by law, in such Federal court. Each of the parties hereto
agrees that a final judgment in any such action or proceeding shall be
conclusive and may be enforced in other jurisdictions by suit on the judgment
or in any other manner provided by law. Nothing in this Agreement shall
affect any right that the Administrative Agent, the Canadian Agent or any
Lender may otherwise have to bring any action or proceeding relating to this
Agreement against any Borrower or its properties in the courts of any
jurisdiction.
(c) Each Borrower hereby irrevocably and unconditionally waives, to
the fullest extent it may legally and effectively do so, any objection which
it may now or hereafter have to the laying of venue of any suit, action or
proceeding arising out of or relating to any Loan Document in any court
referred to in paragraph (b) of this Section. Each of the parties hereto
hereby irrevocably waives, to the
105
fullest extent permitted by law, the defense of an inconvenient forum to the
maintenance of such action or proceeding in any such court.
(d) Each party to this Agreement irrevocably consents to service of
process in the manner provided for notices in Section 10.01. Nothing in this
Agreement will affect the right of any party to this Agreement to serve
process in any other manner permitted by law.
SECTION 10.10. WAIVER OF JURY TRIAL. EACH PARTY HERETO HEREBY
---------------------
WAIVES, TO THE FULLEST EXTENT PERMITTED BY APPLICABLE LAW, ANY RIGHT IT MAY
HAVE TO A TRIAL BY JURY IN ANY LEGAL PROCEEDING DIRECTLY OR INDIRECTLY
ARISING OUT OF OR RELATING TO THIS AGREEMENT OR THE TRANSACTIONS CONTEMPLATED
HEREBY (WHETHER BASED ON CONTRACT, TORT OR ANY OTHER THEORY). EACH PARTY
HERETO (A) CERTIFIES THAT NO REPRESENTATIVE, AGENT OR ATTORNEY OF ANY OTHER
PARTY HAS REPRESENTED, EXPRESSLY OR OTHERWISE, THAT SUCH OTHER PARTY WOULD
NOT, IN THE EVENT OF LITIGATION, SEEK TO ENFORCE THE FOREGOING WAIVER AND (B)
ACKNOWLEDGES THAT IT AND THE OTHER PARTIES HERETO HAVE BEEN INDUCED TO ENTER
INTO THIS AGREEMENT BY, AMONG OTHER THINGS, THE MUTUAL WAIVERS AND
CERTIFICATIONS IN THIS SECTION.
SECTION 10.11. Headings. Article and Section headings and the
---------
Table of Contents used herein are for convenience of reference only, are not
part of this Agreement and shall not affect the construction of, or be taken
into consideration in interpreting, this Agreement.
SECTION 10.12. Confidentiality. Each of the Administrative Agent,
---------------
the Canadian Agent and the Lenders agrees to maintain the confidentiality of
the Information (as defined below), except that Information may be disclosed
(a) to its and its Affiliates' directors, officers, employees and agents,
including accountants, legal counsel and other advisors (it being understood
that the Persons to whom such disclosure is made will be informed of the
confidential nature of such Information and instructed to keep such
Information confidential), (b) to the extent requested by any regulatory
authority, (c) to the extent required by applicable laws or regulations or by
any subpoena or similar legal process, (d) to any other party to this
Agreement, (e) in connection with the exercise of any remedies hereunder or
any suit, action or proceeding relating to any Loan Document or the
enforcement of rights hereunder or thereunder, (f) subject to an agreement
106
containing provisions substantially the same as those of this Section, to any
assignee of or Participant in, or any prospective assignee of or Participant
in, any of its rights or obligations under this Agreement, (g) with the
consent of the Company or (h) to the extent such Information (i) becomes
publicly available other than as a result of a breach of this Section by such
Person or (ii) becomes available to the Administrative Agent, the Canadian
Bank or any Lender on a nonconfidential basis from a source other than the
Company. For the purposes of this Section, "Information" means all
-----------
information received from the Company or any Related Party thereof in
connection with the Loan Documents relating to the Company or any Subsidiary
or any of their respective businesses, other than any such information that is
available to the Administrative Agent, the Canadian Agent or any Lender on a
nonconfidential basis prior to disclosure by the Company or such Related
Party; provided that, in the case of information received from the Company or
--------
any Subsidiary after the date hereof, such information is clearly identified
at the time of delivery as confidential. Any Person required to maintain the
confidentiality of Information as provided in this Section shall be considered
to have complied with its obligation to do so if such Person has exercised the
same degree of care to maintain the confidentiality of such Information as
such Person would accord to its own confidential information. The
Administrative Agent, the Canadian Agent and any Lender, as the case may be,
shall promptly notify the Company of its receipt of any subpoena of any
regulatory authority as referred to in clause (c) above, unless such notice is
prohibited by such regulatory authority.
SECTION 10.13. Conversion of Currencies. (a) If, for the purpose
-------------------------
of obtaining judgment in any court, it is necessary to convert a sum owing
hereunder in one currency into another currency, each party hereto agrees, to
the fullest extent that it may effectively do so, that the rate of exchange
used shall be that at which in accordance with normal banking procedures in
the relevant jurisdiction the first currency could be purchased with such
other currency on the Business Day or Canadian Business Day, as applicable,
immediately preceding the day on which final judgment is given.
(b) The obligations of each Borrower in respect of any sum due to
any party hereto or any holder of the obligations owing hereunder (the
"Applicable Creditor") shall, notwithstanding any judgment in a currency (the
107
"Judgment Currency") other than the currency in which such sum is stated to be
due hereunder (the "Agreement Currency"), be discharged only to the extent
that, on the Business Day or Canadian Business Day, as applicable, following
receipt by the Applicable Creditor of any sum adjudged to be so due in the
Judgment Currency, the Applicable Creditor may in accordance with normal
banking procedures in the relevant jurisdiction purchase the Agreement
Currency with the Judgment Currency; if the amount of the Agreement Currency
so purchased is less than the sum originally due to the Applicable Creditor in
the Agreement Currency, such Borrower agrees, as a separate obligation and
notwithstanding any such judgment, to indemnify the Applicable Creditor
against such loss. The obligations of the Borrowers contained in this Section
shall survive the termination of this Agreement and the payment of all other
amounts owing hereunder.
IN WITNESS WHEREOF, the parties hereto have caused this Agreement to
be duly executed by their respective authorized officers as of the day and
year first above written.
UNISOURCE WORLDWIDE, INC.,
by
_________________________
Name:
Title:
UNISOURCE CAPITAL CORPORATION,
by
_________________________
Name:
Title:
UNISOURCE CANADA, INC.,
by
_________________________
Name:
Title:
108
THE CHASE MANHATTAN BANK,
individually and as
Administrative Agent,
by
_________________________
Name:
Title:
THE TORONTO-DOMINION BANK,
individually and as Canadian
Agent,
by
_________________________
Name:
Title:
TORONTO DOMINION (TEXAS),
INC., as Documentation Agent,
by
_________________________
Name:
Title:
TORONTO DOMINION (NEW YORK),
INC.,
by
_________________________
Name:
Title:
BANK OF AMERICA ILLINOIS,
by
_________________________
Name:
Title:
109
BANK OF MONTREAL,
by
_________________________
Name:
Title:
THE BANK OF NEW YORK,
by
_________________________
Name:
Title:
THE BANK OF NOVA SCOTIA,
by
_________________________
Name:
Title:
BANK OF TOKYO - MITSUBISHI
TRUST COMPANY,
by
_________________________
Name:
Title:
BANQUE NATIONALE DE PARIS,
by
_________________________
Name:
Title:
by
_________________________
Name:
Title:
110
BARNETT BANK, N.A.,
by
_________________________
Name:
Title:
BAYERISCHE LANDESBANK
GIROZENTRALE, CAYMAN ISLANDS
BRANCH,
by
_________________________
Name:
Title:
by
_________________________
Title:
Name:
CANADIAN IMPERIAL BANK OF
COMMERCE,
by
_________________________
Name:
Title:
CORESTATES BANK, N.A.,
by
_________________________
Name:
Title:
DEN DANSKE BANK AKTIESELSKAB,
CAYMAN ISLANDS BRANCH,
by
_________________________
Name:
Title:
111
DEUTSCHE BANK AG, NEW YORK
BRANCH AND/OR CAYMAN ISLANDS
BRANCH,
by
_________________________
Name:
Title:
by
_________________________
Name:
Title:
FIRST UNION NATIONAL BANK,
by
_________________________
Name:
Title:
FLEET NATIONAL BANK,
by
_________________________
Name:
Title:
THE FUJI BANK, LIMITED, NEW
YORK BRANCH,
by
_________________________
Name:
Title:
THE INDUSTRIAL BANK OF JAPAN
TRUST COMPANY,
by
_________________________
Name:
Title:
112
ISTITUTO BANCARIO SAN PAOLO DI
TORINO, SPA,
by
_________________________
Name:
Title:
by
_________________________
Name:
Title:
MELLON BANK, N.A.,
by
_________________________
Name:
Title:
NATIONSBANK, N.A.,
by
_________________________
Name:
Title:
THE NORTHERN TRUST COMPANY,
by
_________________________
Name:
Title:
PNC BANK, NATIONAL
ASSOCIATION,
by
_________________________
Name:
Title:
113
ROYAL BANK OF CANADA,
by
_________________________
Name:
Title:
THE SANWA BANK LIMITED,
by
_________________________
Name:
Title:
SUNTRUST BANK, ATLANTA,
by
_________________________
Name:
Title:
by
_________________________
Name:
Title:
UNION BANK OF SWITZERLAND, NEW
YORK BRANCH,
by
_________________________
Name:
Title:
by
_________________________
Name:
Title:
114
WELLS FARGO BANK, N.A.,
by
_________________________
Name:
Title:
THE YASUDA TRUST AND BANKING
COMPANY LIMITED, NEW YORK
BRANCH,
by
_________________________
Name:
Title:
THE CHASE MANHATTAN BANK OF
CANADA,
by
_________________________
Name:
Title:
THE CHASE MANHATTAN BANK
270 Park Avenue
New York, NY 10017
CHASE SECURITIES INC.
270 Park Avenue
New York, NY 10017
October 23, 1996
Unisource Worldwide, Inc.
825 Duportail Road
Wayne, PA 19087-5589
Attention of Kathleen M. Burns
Vice President and Treasurer
Unisource Worldwide, Inc.
-------------------------
Competitive Advance/Revolving Credit Facility
---------------------------------------------
Commitment Letter
-----------------
Ladies and Gentlemen:
You have advised The Chase Manhattan Bank ("Chase") and Chase
Securities Inc. ("CSI") that ALCO Standard Corporation, an Ohio corporation
("ALCO"), will distribute to its shareholders all the common stock of Unisource
Worldwide, Inc., a Delaware corporation (the "Company"), in the transactions
described in the Form 10 (the "Form 10") submitted by the Company with the
Securities and Exchange Commission on September 23, 1996. In that connection,
you have requested that CSI agree to structure, arrange and syndicate a
competitive advance and revolving credit facility for the Company in an
aggregate amount of up to $1,000,000,000 (the "Facility"), and that Chase commit
to provide up to $250,000,000 of the principal amount of the Facility and to
serve as administrative agent for the Facility.
Chase is pleased to advise you of its commitment to provide
$250,000,000 of the principal amount of the Facility upon the terms and subject
to successful
2
syndication of the balance of the Facility and the other conditions set forth or
referred to in this commitment letter (the "Commitment Letter") and in the
Summary of Terms and Conditions attached hereto as Exhibit A (the "Term Sheet").
You hereby appoint Chase as Administrative Agent, and CSI as advisor and
arranger, for the Facility, in each case on the terms set forth or referred to
in this Commitment Letter and in the Term Sheet, and Chase and CSI hereby agree
to act in such capacities.
It is agreed that Chase will act as the sole and exclusive
Administrative Agent, and that CSI will act as the sole and exclusive advisor
and arranger, for the Facility, and each will, in such capacities, perform the
duties and exercise the authority customarily performed and exercised by it in
such roles. Except as determined by CSI in consultation with you, no other
agents or co-agents will be appointed, no other titles will be awarded and no
compensation (other than that expressly contemplated by the Term Sheet and the
Fee Letter referred to below) will be paid in connection with the Facility.
Chase reserves the right, prior to or after the execution of
definitive documentation, to syndicate its commitment hereunder to one or more
financial institutions reasonably satisfactory to you that will become parties
to such definitive documentation (the financial institutions becoming parties to
such documentation being collectively called the "Lenders"). You understand that
CSI intends to commence syndication efforts promptly upon the execution of this
Commitment Letter, and you agree actively to assist CSI in completing a
syndication satisfactory to it prior to closing. Such assistance shall include
(a) your using your best efforts to ensure that the syndication efforts benefit
materially from the existing lending relationships of the Company and ALCO, (b)
direct contact between senior management and advisors of the Company and ALCO
and the proposed Lenders, (c) assistance in the preparation of a Confidential
Information Memorandum and other marketing materials to be used in connection
with the syndication and (d) the hosting, with CSI, of one or more meetings of
prospective Lenders.
It is agreed that CSI will manage, in consultation with you, all
aspects of the syndication, including selection of Lenders, determination of
when CSI will approach potential Lenders, any naming rights, the allocations of
the commitments among the Lenders and the
3
amount and distribution of fees among the Lenders. To assist CSI in its
syndication efforts, you agree promptly to prepare and provide to CSI and Chase
all written information with respect to the Company and the other transactions
contemplated hereby, including all financial information and projections (the
"Projections"), as they may reasonably request in connection with the
arrangement and syndication of the Facility. You hereby represent and covenant
that (a) all information, taken as a whole, other than the Projections (the
"Information") that has been or will be made available to Chase or CSI by you or
any of your authorized representatives is or will be, when furnished, complete
and correct in all material respects and does not or will not, when furnished,
contain any untrue statement of a material fact or omit to state a material fact
necessary in order to make the statements contained therein not materially
misleading in light of the circumstances under which such statements are made
and (b) the Projections that have been or will be made available to Chase or CSI
by you or any of your authorized representatives have been or will be prepared
in good faith based upon reasonable assumptions. You agree to supplement the
Information and the Projections from time to time until the closing of the
Facility so that the representations in the preceding sentence remain correct.
In arranging the Facility, including the syndication of the Facility, Chase and
CSI will be using and relying primarily on the Information and the Projections
without independent verification thereof.
As consideration for Chase's commitment hereunder and CSI's agreement
to structure, arrange and syndicate the Facility and to provide advisory
services in connection therewith, you agree to pay to Chase the fees set forth
in Annex I to the Term Sheet and in the Fee Letter dated the date hereof and
delivered herewith (the "Fee Letter"). Once paid, such fees shall not be
refundable under any circumstances.
Chase's commitment hereunder is subject to (a) there not occurring or
becoming known to us any material adverse condition or material adverse change
in or affecting the business, assets, operations, prospects or condition
(financial or otherwise) of the Company and its subsidiaries, taken as a whole,
(b) there not having occurred a material disruption of or material adverse
change in financial, banking or capital market conditions that, in Chase's
judgment, would be likely to impair the syndication of the Facility, (c) Chase's
satisfaction that prior to and
4
during the syndication of the Facility, there shall be no competing offering,
placement or arrangement or any debt securities or bank financing by or on
behalf of the Company, ALCO or any subsidiaries thereof, (d) Chase's continuing
satisfaction in all respects with all legal, tax and accounting matters relating
to the Spin-Off and the proposed capitalization and structure of the Company and
its subsidiaries, (e) the negotiation, execution and delivery of definitive
documentation with respect to the Facility satisfactory to Chase and its counsel
and (f) the other conditions set forth in the Term Sheet. The terms and
conditions of Chase's commitment hereunder and of the Facility are not limited
to those set forth herein and in the Term Sheet. Those matters that are not
covered by or made clear under the provisions hereof and of the Term Sheet are
subject to the approval and agreement of Chase, CSI and the Company.
You agree (a) to indemnify and hold harmless Chase, CSI, their
affiliates and their respective officers, directors, employees, advisors and
agents from and against any and all losses (excluding opportunity costs),
claims, damages, liabilities and expenses, joint or several, to which any such
person may become subject arising out of or in connection with this Commitment
Letter, the Facility or the transaction contemplated hereby or thereby or any
claim, litigation, investigation or proceeding relating to any of the foregoing,
regardless of whether any such indemnified party is a party thereto, and to
reimburse each of such indemnified parties upon demand for any reasonable legal
or other expenses incurred in connection with investigating or defending any of
the foregoing, provided that the foregoing indemnity will not, as to any
indemnified party, apply to losses, claims, damages, liabilities or related
expenses to the extent they are found by a final judgment of a court to have
resulted from the willful misconduct or gross negligence of such indemnified
party, and (b) to reimburse Chase, CSI and their affiliates from time to time
for all reasonable out-of-pocket expenses (including due diligence expenses,
syndication expenses, travel expenses, and fees, charges and disbursements of
counsel incurred in connection with the Facility and any related documentation
(including this Commitment Letter, the Term Sheet, the Fee Letter and the
definitive financing documentation)). No indemnified person shall be liable for
any indirect or consequential damages in connection with its activities related
to the Facility.
5
This Commitment Letter and Chase's commitment shall not be assignable
by you without the prior written consent of Chase and any attempted assignment
without such consent shall be void. This Commitment Letter may not be amended or
any provision hereof waived except by an instrument in writing signed by you,
Chase and CSI. This Commitment Letter may be executed in any number of
counterparts, each of which shall be an original and all of which, when taken
together, shall constitute one agreement. Delivery of an executed counterpart of
a signature page of this Commitment Letter by facsimile transmission shall be
effective as delivery of a manually executed counterpart hereof. This Commitment
Letter is intended to be solely for the benefit of the parties hereto and is not
intended to confer any benefits upon, or create any rights in favor of, any
person other than the parties hereto. This Commitment Letter shall be governed
by, and construed in accordance with, the laws of the State of New York.
If the foregoing correctly sets forth our agreement, please indicate
your acceptance of the terms hereof and of the Term Sheet and the Fee Letter by
signing in the appropriate space below and in the Fee Letter and returning to us
the enclosed duplicate originals of this Commitment Letter and the Fee Letter
not later than 5:00 p.m., New York City time, on October 23, 1996. In the event
that the execution and delivery of definitive documentation for the Facility
shall not occur by January 31, 1997, then this Commitment Letter and Chase's
commitment hereunder shall automatically terminate unless Chase and CSI shall
agree to an extension. The compensation, reimbursement and indemnification
provisions contained herein and in the Fee Letter shall remain in full force and
effect regardless of whether definitive documentation for the Facility shall be
executed and delivered and notwithstanding the termination of this Commitment
Letter or Chase's commitment hereunder.
6
Chase and CSI are pleased to have been given the opportunity to
assist you in connection with this financing.
Very truly yours,
THE CHASE MANHATTAN BANK,
by
---------------------------
Name:
Title:
CHASE SECURITIES INC.,
by
---------------------------
Name:
Title:
Accepted and agreed to
as of the date first
written above by:
UNISOURCE WORLDWIDE, INC.,
by
----------------------------
Name:
Title:
EXHIBIT A
=========
UNISOURCE WORLDWIDE, INC.
Competitive Advance and Revolving Credit Facility
-------------------------------------------------
Summary of Terms
----------------
Borrowers: Unisource Worldwide, Inc. (the "Company"), a wholly-
- - --------- owned subsidiary of the Company to be incorporated in
the State of Delaware ("Delaware Borrower"), and
Unisource Canada, Inc., a Canadian corporation (the
"Canadian Borrower" and, together with the Delaware
Borrower and the Company, the "Borrowers").
Guarantee: All obligations of the Delaware Borrower and the
- - --------- Canadian Borrower will be unconditionally guaranteed by
the Company.
Advisor and Chase Securities Inc ("CSI").
- - -----------
Arranger:
- - --------
Administrative The Chase Manhattan Bank ("Chase") will act as
- - -------------- Administrative Agent for a syndicate of lenders
Agent: arranged by CSI (together with Chase, the "Lenders").
- - -----
Documentation Agent: Toronto Dominion Bank ("Toronto Dominion").
- - --------------------
Canadian Agent: Toronto Dominion (the "Canadian Agent") will act as
- - -------------- administrative agent in connection with the Canadian
Subfacility described below.
Facility: Five-Year Competitive Advance and Revolving Credit
- - -------- Facility in an amount of $1 billion (the "Facility").
The Facility will incorporate two borrowing options:
(i) an unsecured Competitive Advance option (the "CAF")
and (ii) an unsecured Revolving Credit
2
option (the "Revolving Credit"). Availability under
each option will be reduced by usage under the other
option on a dollar-for-dollar basis.
The Revolving Credit will include a multicurrency
option pursuant to which the Company and the Delaware
Borrower may borrow up to $100,000,000 in Pounds
Sterling, Deutsch Marks and French Francs ("Available
Currencies") from all Lenders ("Multicurrency Loans")
The Revolving Credit will include a Canadian Dollar
subfacility (the "Canadian Subfacility") pursuant to
which the Canadian Borrower may borrow up to the
equivalent of U.S. $100,000,000 in Canadian Dollars
("Canadian Loans") from certain of the Lenders
("Canadian Lenders").
Except as otherwise provided herein, Loans under the
Facility will be made by each Lender on a pro rata
basis in accordance with its unutilized commitments.
The CAF will be provided on an uncommitted competitive
advance basis through an auction mechanism. The
Revolving Credit will be provided on a committed basis.
In addition to Revolving Credit loans to be made by all
the Lenders, the Revolving Credit will include a
swingline borrowing option under which Chase, Toronto
Dominion or certain other Lenders to be determined
(each, a "Swingline Lender") will commit to make
swingline loans to the Company and the Delaware
Borrower ("Swingline Loans") in a maximum aggregate
principal amount
3
outstanding at any time not in excess of $100,000,000.
Swingline Loans will be payable no later than the fifth
business day after the borrowing date, will be
denominated in U.S. Dollars only, will be made on short
notice on a same-day basis and may not exceed the
excess of the aggregate commitments of all Lenders over
the aggregate amount of outstanding loans of all
Lenders.
In making Swingline Loans, the Swingline Lender will be
acting on behalf of all Lenders, and upon notice from
the Swingline Lender, each Lender will be
unconditionally obligated to purchase a participation
in each Swingline Loan.
Purpose: To repay approximately $600 million (subject to
- - ------- adjustment) of intercompany debt to ALCO Standard
Corporation ("ALCO") and for general corporate purposes
of the Borrowers.
Commitment The commitment termination and the final maturity of
- - ---------- the Facility will occur five years from the date of
Termination and execution and delivery of the definitive documentation
- - --------------- for the Facility (the "Closing Date").
Final Maturity:
- - ---------------
Availability: Loans under the Facility will be available at any time
- - ------------ prior to the final maturity of such Facility. Amounts
repaid under the Facility may be reborrowed.
Under the CAF option, each of the Company and the
Delaware Borrower will be permitted to borrow in U.S.
Dollars up to the full aggregate amount of the
commitments, less the sum of the aggregate principal
4
amount of loans outstanding under the Revolving Credit
(including Swingline Loans, Multicurrency Loans and
Canadian Loans) and the CAF. CAF bids will be made at
the discretion of the Lenders. Loans under the CAF may
be borrowed, repaid and reborrowed in minimum amounts
of $20 million and in integral multiples of $1 million.
Each of the Company and the Delaware Borrower will be
permitted to borrow up to the full aggregate amount of
the commitments under the Revolving Credit option, less
the sum of the aggregate principal amount of loans
outstanding under the CAF and the Revolving Credit
(including Swingline Loans, Multicurrency Loans and
Canadian Loans). Each of the Company and the Delaware
Borrower will be permitted to borrow up to the
equivalent of U.S. $100,000,000, provided that the
Multicurrency Loans will constitute utilization of the
Revolving Credit commitments to the extent of their
U.S. Dollar equivalent. The Canadian Borrower will be
permitted to borrow up to the equivalent of U.S.
$100,000,000 under the Canadian Subfacility, provided
that Canadian Loans will constitute utilization of the
Revolving Credit commitments to the extent of their
U.S. Dollar equivalent. Loans under the Revolving
Credit option may be borrowed, repaid and reborrowed in
minimum amounts of $10 million and in integral
multiples of $1 million.
Interest Rates and As set forth in the attached Annex I.
- - ------------------
Fees:
- - ----
CAF Mechanics: Pursuant to the CAF, each of the
- - -------------
5
Company and the Delaware Borrower shall have the option
to request that the Lenders bid for CAF loans bearing
interest at an absolute rate with specified maturities
ranging from 7 to 360 days or bearing interest at a
margin over LIBOR (as defined in Annex I) for tenors of
1, 2, 3, 6, 9 or 12 months. Each Lender shall have the
right, but not the obligation, to submit bids at its
discretion. In each request for competitive bids, the
Company or the Delaware Borrower, as the case may be,
shall specify the proposed date of borrowing, the
interest period, the amount of the CAF loan and the
maturity date thereof and the interest rate basis to be
used by the Lenders in bidding. The Administrative
Agent shall promptly advise the Lenders of the terms of
the notice, and, in the event the Company or the
Delaware Borrower, as the case may be, accepts bids,
bids shall be accepted in ascending order from the
lowest bid to the highest bid acceptable to the Company
or the Delaware Borrower, as the case may be.
Repayment: The principal amount of each borrowing under the
- - --------- Revolving Credit will be due and payable at final
maturity of the Facility. Swingline Loans will be due
and payable on the fifth business day after the
borrowing date. CAF loans will be due and payable at
the end of each interest period.
In the event that the U.S. Dollar equivalent of all
outstanding Loans (including Swingline Loans,
Multicurrency Loans and Canadian Loans) at any time
exceeds the total commitments of the Lenders,
6
the Borrowers will prepay Loans to the extent necessary
to eliminate said excess.
In the event that the U.S. Dollar equivalent of the
outstanding Multicurrency Loans at any time exceeds
$100,000,000, the Company and the Delaware Borrower
will promptly prepay Multicurrency Loans to the extent
necessary to eliminate such excess.
In the event the U.S. Dollar equivalent of the
outstanding Canadian Loans at any time exceeds the
amount of the Canadian Subfacility, the Canadian
Borrower will promptly prepay Canadian Loans to the
extent necessary to eliminate such excess.
Prepayment: CAF loans will not be prepayable.
- - ----------
All or a portion of the loans under the Revolving
Credits may be prepaid at any time at the applicable
Borrower's option, subject to reimbursement for
redeployment costs in the case of LIBOR borrowings, if
such prepayment occurs other than at the end of the
applicable interest period. ABR loans, Swingline Loans
and Canadian Prime loans may be prepaid at any time
without penalty.
Optional Commitment At the option of the Company, the Facility may be
- - ------------------- permanently reduced in minimum amounts of $25 million
Reduction: at any time on a pro rata basis with respect to each
- - --------- Lender. The Facility may be reduced to an amount no
less than the sum of the aggregate amount of loans
outstanding under the CAF and the Revolving Credit. The
commitments
7
of the Canadian Lenders to make Canadian Loans will be
automatically reduced to the extent necessary to ensure
that such commitments (expressed in U.S. Dollars) do
not exceed the commitments of such Lenders under the
Facility.
Representations Usual for facilities and transactions of this type and
- - --------------- others to be reasonably specified by Chase, including
and Warranties: but not limited to accuracy of financial statements; no
- - -------------- material adverse change; absence of material
litigation; no conflict with agreements, instruments or
laws; corporate existence, good standing and powers;
authorization, validity and enforceability; third party
and governmental approvals; compliance with laws and
regulations (including ERISA, margin regulations and
environmental laws); taxes; subsidiaries;
inapplicability of the Investment Company Act and
Public Utility Holding Company Act; solvency after
giving effect to the initial borrowing and to ALCO's
spin off of the Company to the stockholders of ALCO
(the "Spin-Off") and related transactions;
effectiveness of regulatory approvals; environmental
matters; absence of default and liens; and accuracy of
information (including with respect to the Form 10
referred to below).
Conditions Precedent Usual for facilities of this type and others to be
- - -------------------- reasonably specified by Chase, including but not
to Initial limited to: execution and delivery of a satisfactory
- - ---------- definitive documentation; evidence of authority;
Borrowing: receipt of financial statements (including pro forma
- - ---------
8
financial statements) and projections; opinions of
counsel; accuracy of representations and warranties;
absence of defaults and events of defaults, absence of
material litigation; absence of material adverse change
in business, assets, operations, prospects or condition
(financial or otherwise), of the Company and its
subsidiaries, taken as a whole, since June 30, 1996.
Proceeds of the initial borrowing shall be applied to
repay approximately $600 million (subject to
adjustment) of intercompany debt of the Company to ALCO
and the balance of intercompany debt owed to ALCO
(approximately $500 million at June 30, 1996) shall
have been converted to equity (other than any amount to
be agreed upon), and the Administrative Agent shall be
satisfied with arrangements for effecting the
foregoing.
All material assets to be transferred by ALCO to the
Company in connection with the Spin-Off shall be
transferred on or before the date of the initial
borrowing.
All governmental and third party approvals necessary or
advisable in connection with the Spin-Off, the
financing contemplated hereby and the continuing
operations of the Company and its subsidiaries shall
have been obtained and be in full force and effect, and
all applicable waiting periods shall have expired
without any action being taken or threatened by any
competent authority which would restrain, prevent or
otherwise impose adverse conditions on the
9
Spin-Off or the financing contemplated hereby.
The Lenders shall have received a certification from an
appropriate officer of the Company, in form and
substance reasonably satisfactory to the Lenders, as to
the solvency of the Company and its subsidiaries on a
consolidated basis after giving effect to the initial
borrowings and the use of the proceeds thereof.
Conditions Precedent Each borrowing under the Facility shall be conditioned
- - -------------------- on the continued accuracy in all material respects of
to Each Borrowing: all representations and warranties (including without
- - ----------------- limitation the material adverse change and litigation
representations) and the absence of defaults and events
of default. The Spin-Off will not in itself be deemed a
material adverse change.
Affirmative Usual for facilities and transactions of this type and
- - ----------- others to be reasonably specified by Chase (to be
Covenants: applicable to the Company and its subsidiaries)
- - --------- including but not limited to maintenance of corporate
existence and material rights, licenses, franchises and
privileges; delivery of audited financial statements,
other financial information, SEC filings and notices of
default, litigation and other material events;
maintenance of reasonably satisfactory insurance;
compliance with laws, including environmental laws;
financial record-keeping and inspection by Lenders of
books and properties; and payment of taxes and other
governmental obligations; use of proceeds; ERISA; and
ownership of the Canadian Borrower.
10
Financial Covenants: The Credit Agreement will contain the following
- - ------------------- financial covenants (with definitions of financial
terms to be agreed upon to the extent not defined
herein):
(a) The consolidated ratio of Funded Debt to
Capitalization shall not equal or exceed .55 to
1.00.
(b) The minimum consolidated Net Worth shall not at
any time be less than the sum of (i) $745,000,000
and (ii) 50% of net income (without deduction for
losses).
Negative Covenants: Usual for facilities and transactions of this type and
- - ------------------ the following (to be applicable to the Company and its
subsidiaries) including but not limited to limitations
on mergers, consolidations and certain asset sales and
dispositions (with an exception for (i) an existing
securitization program in Canada in an amount not
exceeding at any time C$95 million of sold receivables
outstanding and (ii) sales of receivables pursuant to
any additional securitization transactions in an amount
not exceeding at any time $200 million of sold
receivables outstanding), limitations on indebtedness
and guarantees; limitations on liens and sale
leasebacks; limitations on affiliate transactions; and
limitations on subsidiary indebtedness.
Events of Default: To include nonpayment of principal, interest, fees or
- - ----------------- other amounts, violation of covenants (subject to grace
periods to be agreed as to
11
appropriate covenants), material breach of
representations and warranties, cross default and
cross acceleration, certain bankruptcy events,
material judgments, ERISA, invalidity of guarantee
and Change of Control (other than Spin-Off).
Voting: Amendments and waivers with respect to the credit
- - ------ agreement will require the approval of Lenders
holding commitments representing not less than 51%
of the aggregate commitments under the Facility,
except that (a) the consent of each Lender
affected thereby shall be required for amendments
or waivers with respect to (i) reductions in the
amount, or extensions of the scheduled date of
maturity, of any loan amount due, (ii) reductions
in the rate of interest or any fee or extensions
of any due date thereof and (iii) increases in the
amount or extensions of the expiry date of any
Lender's commitment (including commitments in
respect of Canadian Loans) and (b) the consent of
100% of the Lenders shall be required with respect
to modifications to any of the voting percentages.
Assignments and The Lenders shall be permitted to assign and sell
- - --------------- participations in their loans and commitments
Participations: subject, in the case of assignments (other than to
- - -------------- another Lender or to an affiliate of the assigning
Lender), to the consent of the Administrative
Agent and the Company (which consent in each case
shall not be unreasonably withheld). Assignments
shall be made in a minimum amount of $10 million
and shall not result in any Lender's commitment
being less than $10 million. Participants will
have the same benefits as the
12
Lenders with respect to yield protection and
increased cost provisions; provided, however that
-------- -------
(i) the relevant Lender will notify the Company of
any participation and (ii) participants will not
have any additional benefits that cannot be
claimed by the relevant Lender. Voting rights of
participants shall be limited to those matters
with respect to which the affirmative vote of each
affected lender would be required as described
under "Voting" above. Pledges of loans in
accordance with applicable law shall be permitted
without restriction.
Yield Protection: The credit agreement shall contain customary
- - ---------------- provisions (a) protecting the Lenders against
increased costs or reduced returns resulting from
changes in reserve, tax, capital adequacy and
other requirements of law or from the imposition
of or changes in withholding or other taxes and
(b) indemnifying the Lenders for "breakage costs"
incurred in connection with, among other things,
prepayment of a LIBOR loan or Fixed Rate CAF loan
on a day other than the last day of an interest
period with respect thereto.
Expenses and The Company shall pay (a) all reasonable out-of-
- - ------------ pocket expenses of the Administrative Agent and
Indemnification: the Arranger associated with the syndication of
- - --------------- the Facility and the preparation, execution,
delivery and administration of the credit
agreement and any amendment or waiver with respect
thereto (including the reasonable fees,
disbursements and other charges of counsel) and
(b) all reasonable out-of-pocket expenses of the
13
Administrative Agent and the Lenders in connection
with the enforcement of the credit agreement or
preservation of rights thereunder.
The Company will indemnify the Arranger, the
Administrative Agent, the Lenders and their
respective officers, directors, employees,
affiliates, representatives, agents and
controlling persons and hold them harmless from
and against all costs, expenses (including
reasonable fees, disbursements and other charges
of counsel) and liabilities of any such
indemnified person arising out of or relating to
any claim or any litigation or other proceedings
(regardless of whether any such indemnified person
is a party thereto) that relate to the proposed
transactions, including the financing contemplated
hereby or any transactions connected therewith,
provided that no such indemnified person will be
indemnified from any costs, expenses or
liabilities to the extent found by a final
decision of a court to have resulted from its own
gross negligence or willful misconduct.
Counsel for the Cravath, Swaine & Moore.
- - ---------------
Arranger and the
- - ----------------
Agent:
- - -----
Governing Law and New York.
- - -----------------
Forum:
- - -----
ANNEX I
Facility Fee: A Facility Fee shall be payable on the full amount
- - ------------ of the Facility, regardless of usage, quarterly in
arrears, to each of the Lenders pro rata on their
--- ----
respective shares of the Facility. The Facility
Fee will commence to accrue on the Closing Date
and be based (i) initially on Company's
consolidated ratio of Funded Debt to
Capitalization as of the last day of the most
recent fiscal quarter and (ii) after S&P and
Moody's have rated the Company's senior,
unsecured, non-credit enhanced long-term debt (the
"Ratings"), on such Ratings as set forth in the
table below.
Utilization Fee: A Utilization Fee equal to five basis points per
- - --------------- annum, payable quarterly in arrears, will accrue
on the aggregate amount of the outstanding loans
during the initial 6 months and thereafter on any
day when the aggregate outstanding loans
(including CAF loans, Swingline Loans and Canadian
Loans) exceed 2/3 of the aggregate commitments.
For purposes of paying the Utilization Fee,
principal amounts of CAF outstandings will be
deemed to have been borrowed pro rata from each
Lender in accordance with its unutilized
commitments.
Interest Rates: CAF
- - -------------- ---
The rates obtained from bids selected by a
Borrower in accordance with the procedures
outlined in the Term Sheet.
Revolving Credit
----------------
2
The following committed pricing will apply to
loans under the Revolving Credit:
(a) ABR Loans--the Alternate Base Rate
---------
(b) Swingline Loans--the Swingline Rate
---------------
(c) LIBOR Loans--LIBOR plus a spread which will
-----------
be based on Category 2 as set forth in the
table below during the initial six months and
thereafter will be based on the Company's
consolidated ratio of Funded Debt to
Capitalization as of the last day of the most
recent fiscal quarter and, after the Ratings
are in effect, on such Ratings, as set forth
in the table below.
(d) Canadian Loans -- at the option of the
--------------
Canadian Borrower:
(i) Canadian Prime
(ii) Bankers' Acceptances discounted at the
Bankers' Acceptance Discount Rate ("BA") plus
a stamping fee equal to a spread which will
be based on Category 2 as set forth in the
table below during the initial six months and
thereafter will be based on the Company's
consolidated ratio of Funded Debt to
Capitalization as of the last day of the most
recent fiscal quarter and, after the Ratings
are in effect, on such Ratings, in each case
as set forth in the table below.
3
====================================================================================================================================
Facility LIBOR/BA
Funded Debt/ Fee (basis Spread (basis
Capitalization Ratings points) points)
-------------- ------- ---------- -------------
- - ------------------------------------------------------------------------------------------------------------------------------------
Category 1 greater than or equal to 30% greater than or equal to A-/A3 8.0 14.5
- - ------------------------------------------------------------------------------------------------------------------------------------
Category 2 greater than 30% BBB+/
less than or equal to 45% Baa1 9.0 18.5
- - ------------------------------------------------------------------------------------------------------------------------------------
Category 3 greater than 45%
less than or equal to 50% BBB/Baa2 11.0 24.0
- - ------------------------------------------------------------------------------------------------------------------------------------
Category 4 greater than 50% less then BBB/Baa2 15.0 30.0
====================================================================================================================================
If there are two Ratings outstanding which
are split Ratings, the Facility fee and
LIBOR/BA spread will be based upon the higher
Rating, provided that if one of such Ratings
--------
is two or more categories lower than the
other such Rating, then the Facility Fee and
LIBOR/BA spread will be based upon the
Category next below that of the higher
Rating.
As used herein:
"ABR" or "Alternate Base Rate" means the
highest of (i) the rate of interest publicly
announced by Chase as its prime rate in
effect as its principal office in New York
City (the "Prime Rate"), (ii) the secondary
market rate for three-month certificates of
deposit (adjusted for statutory reserve
requirements) plus 1% and (iii) the federal
funds effective rate from time to time plus
0.5%.
"Bankers' Acceptance" means those drafts or
bills of exchange in Canadian Dollars drawn
by the Canadian Borrower and accepted by a
Canadian Lender that is a bank chartered
under the Bank Act
4
(Canada) and that stamps and accepts Bankers'
Acceptances.
"Bankers' Acceptance Discount Rate" or "BA"
means, in respect of a bankers' acceptance of
a draft of the Canadian Borrower having a
maturity of 30, 60 or 90 (or, if available,
120 or 180) days, at the Canadian Borrower's
option, the rate quoted by the Canadian Agent
on the date of acceptance of such bankers'
acceptance (based on a year of 365 days), as
the discount rate at which it would purchase
on such date its own bankers' acceptance
having a maturity similar to the maturity of
such bankers' acceptance.
"Canadian Prime Rate" means the higher of (i)
the rate of interest publicly announced by
the Canadian Agent as its prime rate, being a
reference rate then in effect on that day for
Canadian Dollar denominated commercial loans
in Canada and (ii) the average 30-day
bankers' acceptance rate as quoted on the
Reuters Service CDOR Page determined as of
10:00 a.m. on such day plus 0.625%.
"LIBOR" means the London interbank offered
rate (adjusted for statutory reserve
requirements for eurocurrency liabilities)
for eurodollar deposits of one, two, three or
six (or, if available, nine or twelve) months
determined on the basis of the applicable
Telerate Screen at 11:00 a.m., London time,
two business days prior to the relevant
interest period.
"Swingline Rate" means, on any day, the
overnight money market rate
5
determined by the Swingline Lender in good
faith.
Interest Payment In the case of loans bearing interest based
- - ---------------- upon the ABR or Canadian Prime, quarterly in
Dates: arrears.
- - -----
In the case of loans bearing interest based
upon LIBOR, on the last day of each relevant
interest period and, in the case of any
interest period longer than three months, on
each successive date three months after the
first day of such interest period.
Default Rate: The principal amount of any loans not paid
- - ------------ when due shall bear interest at 2% above the
rate otherwise applicable thereto. Overdue
interest, fees and other amounts shall bear
interest at 2% above the rate applicable to
ABR loans.
Rate and Fee Basis: All per annum rates shall be calculated on
- - ------------------ the basis of a year of 360 days (or 365/366
days, in the case of BA loans, Canadian Price
Rate loans and ABR loans then bearing
interest based on the Prime Rate) and actual
days elapsed.