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BOWATER INCORPORATED
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364-DAY CREDIT AGREEMENT
Dated as of June 24, 1998
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THE CHASE MANHATTAN BANK
as Administrative Agent
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TABLE OF CONTENTS
This Table of Contents is not part of the Agreement to which it
is attached but is inserted for convenience of reference only.
Section 1. Definitions and Accounting Matters................................1
1.01 Certain Defined Terms..........................................1
1.02 Accounting Terms and Determinations...........................15
1.03 Classes and Types of Loans....................................16
Section 2. Commitments, Loans and Prepayments...............................17
2.01 Syndicated Loans..............................................17
2.02 Borrowings of Syndicated Loans................................17
2.03 Money Market Loans............................................17
2.04 Changes of Commitments........................................22
2.05 Facility Fee..................................................22
2.06 Lending Offices...............................................23
2.07 Several Obligations; Remedies Independent.....................23
2.08 Loan Accounts; Promissory Notes...............................23
2.09 Optional Prepayments and Conversions
or Continuations of Loans....................................24
2.10 Extension of Commitment Termination Date......................24
Section 3. Payments of Principal and Interest...............................26
3.01 Repayment of Loans............................................26
3.02 Interest......................................................26
Section 4. Payments; Pro Rata Treatment; Computations; Etc..................27
4.01 Payments......................................................27
4.02 Pro Rata Treatment............................................28
4.03 Computations..................................................28
4.04 Minimum Amounts...............................................29
4.05 Certain Notices...............................................29
4.06 Non-Receipt of Funds by the Administrative Agent..............30
4.07 Sharing of Payments, Etc......................................31
Section 5. Yield Protection, Etc............................................32
5.01 Additional Costs..............................................32
(1)
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5.02 Limitation on Types of Loans..................................36
5.03 Illegality....................................................37
5.04 Treatment of Affected Loans...................................37
5.05 Compensation..................................................38
5.06 U.S. Taxes....................................................39
5.07 Foreign Taxes.................................................40
Section 6. Guarantee by the Company.........................................41
6.01 The Guarantee.................................................41
6.02 Obligations Unconditional.....................................42
6.03 Reinstatement.................................................43
6.04 Subrogation...................................................43
6.05 Remedies......................................................43
6.06 Instrument for the Payment of Money...........................43
6.07 Continuing Guarantee..........................................43
Section 7. Conditions Precedent.............................................44
7.01 Initial Loan..................................................44
7.02 Initial Loans to Subsidiary Borrowers.........................45
7.03 Initial and Subsequent Loans..................................46
Section 8. Representations and Warranties...................................47
8.01 Corporate Existence...........................................47
8.02 Financial Condition; Year 2000 Issues.........................47
8.03 Litigation....................................................49
8.04 No Breach.....................................................49
8.05 Action........................................................49
8.06 Approvals.....................................................50
8.07 Use of Credit.................................................50
8.08 ERISA; Canadian Plans.........................................50
8.09 Taxes.........................................................50
8.10 Investment Company Act........................................51
8.11 Public Utility Holding Company Act............................51
8.12 Material Agreements and Liens.................................51
8.13 Environmental Matters.........................................52
8.14 Subsidiaries, Etc.............................................52
8.15 True and Complete Disclosure..................................52
8.16 Arrangement Agreement; Joint Proxy Circular; Etc..............53
Section 9. Covenants of the Company.........................................53
9.01 Financial Statements Etc......................................53
(2)
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9.02 Litigation....................................................56
9.03 Existence, Etc................................................57
9.04 Insurance.....................................................58
9.05 Prohibition of Fundamental Changes............................58
9.06 Limitation on Liens...........................................59
9.07 Consolidated Net Worth........................................60
9.08 Total Debt to Total Capital Ratio.............................61
9.09 Transactions with Affiliates..................................61
9.10 Use of Proceeds...............................................61
9.11 Indebtedness..................................................61
9.12 Restrictive Agreements........................................62
9.13 Limitation on Lines of Business...............................62
Section 10. Events of Default...............................................63
Section 11. The Administrative Agent........................................66
11.01 Appointment, Powers and Immunities...........................66
11.02 Reliance by Administrative Agent.............................67
11.03 Defaults.....................................................67
11.04 Rights as a Bank.............................................67
11.05 Indemnification..............................................68
11.06 Non-Reliance on Administrative Agent and Other Banks.........68
11.07 Failure to Act...............................................68
11.08 Resignation or Removal of Administrative Agent...............69
Section 12. Miscellaneous...................................................69
12.01 Waiver.......................................................69
12.02 Notices......................................................69
12.03 Expenses, Etc................................................70
12.04 Amendments, Etc..............................................71
12.05 Successors and Assigns.......................................72
12.06 Assignments and Participations...............................72
12.07 Survival.....................................................74
12.08 Captions.....................................................74
12.09 Counterparts.................................................74
12.10 Governing Law; Submission to Jurisdiction....................75
12.11 Waiver of Jury Trial.........................................75
12.12 No Immunity..................................................75
12.13 Judgment Currency............................................75
12.14 Use of English Language......................................76
12.15 Treatment of Certain Information.............................76
(3)
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SCHEDULE I Commitments
SCHEDULE II Material Agreements and Liens
SCHEDULE III Subsidiaries
SCHEDULE IV Litigation
SCHEDULE V Permitted Dispositions
EXHIBIT A Form of Assignment and Acceptance
EXHIBIT B Form of Opinion of Counsel to the Company
EXHIBIT C Form of Opinion of Special
New York Counsel to Chase
EXHIBIT D Form of Money Market Quote Request
EXHIBIT E Form of Money Market Quote
EXHIBIT F Form of Confidentiality Agreement
EXHIBIT G Form of Subsidiary Borrower Designation Letter
(4)
364-DAY CREDIT AGREEMENT dated as of June 24, 1998, among:
BOWATER INCORPORATED, a corporation duly organized and validly existing
under the laws of the State of Delaware (the "Company"); each of the
Subsidiaries of the Company from time to time designated as "Subsidiary
Borrowers" hereunder pursuant to Section 7.02(a) hereof (each, a
"Subsidiary Borrower" and, together with the Company, the "Borrowers");
each of the lenders that is a signatory hereto identified under the caption
"BANKS" on the signature pages hereto or that, pursuant to Section 12.06(b)
hereof, shall become a "Bank" hereunder (individually, a "Bank" and,
collectively, the "Banks"); and THE CHASE MANHATTAN BANK, as administrative
agent for the Banks (in such capacity, together with its successors in such
capacity, the "Administrative Agent").
The Company has requested that the Banks make loans to it and to
the Subsidiary Borrowers in an aggregate principal amount not exceeding
$650,000,000 at any one time outstanding to finance the Arrangement (as
hereinafter defined), to refinance existing indebtedness of the Company,
and to pay fees and expenses relating thereto, and for the general
corporate purposes of the Borrowers and their respective subsidiaries. The
Banks are prepared to make such loans upon the terms and conditions hereof.
Accordingly, the parties hereto agree as follows:
Section 1. Definitions and Accounting Matters.
1.01 Certain Defined Terms. As used herein, the following terms
shall have the following meanings (all terms defined in this Section 1.01
or in other provisions of this Agreement in the singular to have the same
meanings when used in the plural and vice versa):
"Administrative Questionnaire" shall mean an Administrative
Questionnaire in a form supplied by the Administrative Agent.
"Affiliate" shall mean any Person that directly or indirectly
controls, or is under common control with, or is controlled by, the Company
and, if such Person is an individual, any member of the immediate family
(including parents, spouse, children and siblings) of such individual and
any trust whose principal beneficiary is such individual or one or more
members of such immediate family and any Person who is controlled by any
such member or trust. As used in this definition, "control" (including,
with its correlative meanings, "controlled by" and "under common control
with") shall mean possession, directly or indirectly, of power to direct or
cause the direction of management or policies (whether through ownership of
securities or partnership or other ownership interests, by contract or
otherwise); provided that, in any event, any Person that owns directly or
indirectly securities having 10% or more of the voting power for the
election of directors or other governing body of a corporation or 10% or
more of the partnership or other ownership interests of any other Person
(other than as a limited partner of such other Person) will be deemed to
control such corporation or other Person. Notwithstanding
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the foregoing, (a) no individual shall be an Affiliate solely by reason of
his or her being a director, officer or employee of the Company or any of
its Subsidiaries and (b) none of the Subsidiaries of the Company shall be
Affiliates.
"Applicable Lending Office" shall mean, for each Bank and for
each Type of Loan, the "Lending Office" of such Bank (or of an affiliate of
such Bank) as such Bank may from time to time specify to the Administrative
Agent and the Borrowers as the office by which its Loans of such Type are
to be made and maintained.
"Applicable Margin" shall mean: (a) with respect to Base Rate
Loans, 0.00% per annum, except that during any Level V period the rate
shall be 0.2500%; and (b) with respect to Eurodollar Loans, the rate for
such Loan for each rating level period set forth in the schedule below,
provided that during the period from the Closing Date through but excluding
the first anniversary thereof, such rate shall be equal to 0.4000%
(irrespective of rating level):
Rating Eurodollar Loans
Level I Period 0.3150%
Level II Period 0.3450%
Level III Period 0.4000%
Level IV Period 0.5000%
Level V Period 0.6750%
Any change in the Applicable Margin for any Eurodollar Loan by reason of a
change in the Standard & Poor's Rating or the ▇▇▇▇▇'▇ Rating shall become
effective on the date two Business Days after the announcement or
publication by the respective rating agencies of a change in such rating
or, in the absence of such announcement or publication, two Business Days
after the effective date of such changed rating.
"Arrangement" shall mean the arrangement in respect of Avenor and
its shareholders under the provisions of Section 192 of the Canada Business
Corporations Act, R.S.C. 1985, c. C-44, as amended, on the terms and
conditions set forth in the Plan of Arrangement under and as defined in the
Arrangement Agreement.
"Arrangement Agreement" shall mean the Amended and Restated
Arrangement Agreement dated as of March 9, 1998 between and among the
Company and Avenor.
"Avenor" shall mean Avenor Inc., a corporation existing under the
laws of
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Canada.
"Bankruptcy Code" shall mean the Bankruptcy Reform Act of 1978,
as amended from time to time, presently codified as Title 11 of the United
States Code.
"Base Rate" shall mean, for any day, a rate per annum equal to
the higher of (a) the Federal Funds Rate for such day plus 1/2 of 1% and
(b) the Prime Rate for such day. Each change in any interest rate provided
for herein based upon the Base Rate resulting from a change in the Base
Rate shall take effect at the time of such change in the Base Rate.
"Base Rate Loans" shall mean Syndicated Loans that bear interest
at rates based upon the Base Rate.
"Business Day" shall mean (a) any day on which commercial banks
are not authorized or required to close in New York City and (b) if such
day relates to the giving of notices or quotes in connection with a LIBOR
Auction or to a borrowing of, a payment or prepayment of principal of or
interest on, a Conversion of or into, or an Interest Period for, a
Eurodollar Loan or a LIBOR Market Loan or a notice by any Borrower with
respect to any such borrowing, payment, prepayment, Conversion or Interest
Period, any day on which dealings in Dollar deposits are carried out in the
London interbank market.
"Canadian Plan" shall mean any plan, program, practice,
arrangement or policy, whether registered or unregistered, written or
unwritten, funded or unfunded, insured or uninsured, that is maintained,
administered or contributed to by the Company or any of its Subsidiaries
(or under which the Company or any Subsidiary has or may have any
obligation) in respect of employees or former employees in Canada (or their
spouses, beneficiaries or dependents), and relating to: pensions,
supplemental pensions, retirement or retirement savings, profit sharing or
deferred profit sharing, deferred or incentive compensation, bonuses, death
benefits, life or disability insurance, medical or dental insurance or
benefits or other similar employee benefits.
"Capital Lease Obligations" shall mean, for any Person, all
obligations of such Person to pay rent or other amounts under a lease of
(or other agreement conveying the right to use) Property to the extent such
obligations are required to be classified and accounted for as a capital
lease on a balance sheet of such Person under GAAP (including Statement of
Financial Accounting Standards No. 13 of the Financial Accounting Standards
Board), and, for purposes of this Agreement, the amount of such obligations
shall be the capitalized amount thereof, determined in accordance with GAAP
(including such Statement No. 13).
"Casualty Event" shall mean, with respect to any Property of any
Person, any loss of or damage to, or any condemnation or other taking of,
such Property for which such Person or any of its Subsidiaries receives
insurance proceeds, or proceeds of a condemnation award or
364-Day Credit Agreement
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other compensation.
"Chase" shall mean The Chase Manhattan Bank.
"Class" shall have the meaning assigned to such term in Section
1.03 hereof.
"Closing Date" shall mean the date on which this Agreement shall
have been executed and delivered by all parties hereto.
"Code" shall mean the Internal Revenue Code of 1986, as amended
from time to time.
"Commitment" shall mean, for each Bank, the obligation of such
Bank to make Syndicated Loans in an aggregate amount at any one time
outstanding up to but not exceeding (a) in the case of a Bank that is a
party to this Agreement on the date hereof, the amount set opposite the
name of such Bank on Schedule I hereto under the caption "Commitment" or
(b) in the case of any other Bank, the aggregate amount of the Commitments
of other Banks acquired by it pursuant to Section 12.06(b) hereof (in each
case, as the same may be reduced from time to time pursuant to Section 2.04
hereof or increased or reduced pursuant to said Section 12.06(b)). The
original aggregate principal amount of the Commitments is $650,000,000.
"Consolidated Subsidiary" shall mean, for any Person, each
Subsidiary of such Person (whether now existing or hereafter created or
acquired) the financial statements of which shall be (or should have been)
consolidated with the financial statements of such Person in accordance
with GAAP.
"Consolidated Net Worth" shall mean, as at any date, the sum, for
the Company and its Consolidated Subsidiaries (determined on a consolidated
basis without duplication in accordance with GAAP), of the following:
(a) the amount of common stock, plus
(b) the amount of any Preferred Stock, plus
(c) the amount of additional paid-in capital and retained
earnings (or, in the case of an additional paid-in capital or retained
earnings deficit, minus the amount of such deficit), plus
(d) equity adjustments from foreign currency translations (or, in
the case of negative adjustments, minus the amount of such
adjustments), it being understood that such adjustments are to be
recharacterized in accordance with FASB Statement No. 130 as
accumulated other comprehensive income (or deficit), minus
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(e) the unpaid principal amount of the loan to the Company's
Employee Stock Ownership Plan (ESOP), minus
(f) the cost of treasury stock.
"Continue", "Continuation" and "Continued" shall refer to the
continuation pursuant to Section 2.09 hereof of a Fixed Rate Loan of one
Type as a Fixed Rate Loan of the same Type from one Interest Period to the
next Interest Period.
"Convert", "Conversion" and "Converted" shall refer to a
conversion pursuant to Section 2.09 hereof of one Type of Syndicated Loans
into another Type of Syndicated Loans, which may be accompanied by the
transfer by a Bank (at its sole discretion) of a Loan from one Applicable
Lending Office to another.
"Default" shall mean an Event of Default or an event that with
notice or lapse of time or both would become an Event of Default.
"Disposition" shall mean any sale, assignment, transfer or other
disposition of any Property (whether now owned or hereafter acquired) by
the Company or any of its Subsidiaries to any other Person excluding any
sale, assignment, transfer or other disposition of any Property sold or
disposed of in the ordinary course of business and on ordinary business
terms.
"Dollars" and "$" shall mean lawful money of the United States of
America.
"Environmental Laws" shall mean any and all present and future
Federal, state, local and foreign laws, rules and regulations, and any
orders or decrees, in each case as now or hereafter in effect, relating to
the regulation or protection of human health, safety or the environment or
to emissions, discharges, releases or threatened releases of pollutants,
contaminants, chemicals or toxic or hazardous substances or wastes into the
indoor or outdoor environment, including, without limitation, ambient air,
soil, surface water, ground water, wetlands, land or subsurface strata, or
otherwise relating to the manufacture, processing, distribution, use,
treatment, storage, disposal, transport or handling of pollutants,
contaminants, chemicals or toxic or hazardous substances or wastes.
"Equity Rights" shall mean, with respect to any Person, any
outstanding subscriptions, options, warrants, commitments, preemptive
rights or agreements of any kind (including, without limitation, any
stockholders' or voting trust agreements) for the issuance, sale,
registration or voting of, or outstanding securities convertible into, any
additional shares of capital stock of any class, or partnership or other
ownership interests of any type in, such Person.
"ERISA" shall mean the Employee Retirement Income Security Act of
1974, as
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amended from time to time.
"ERISA Affiliate" shall mean any corporation or trade or business
that is a member of any group of organizations (i) described in Section
414(b) or (c) of the Code of which the Company is a member and (ii) solely
for purposes of potential liability under Section 302(c)(11) of ERISA and
Section 412(c)(11) of the Code and the lien created under Section 302(f) of
ERISA and Section 412(n) of the Code, described in Section 414(m) or (o) of
the Code of which the Company is a member.
"Eurodollar Loans" shall mean Syndicated Loans the interest rates
on which are determined on the basis of rates referred to in the definition
of "Fixed Base Rate" in this Section 1.01.
"Event of Default" shall have the meaning assigned to such term
in Section 10 hereof.
"Existing Credit Agreement" shall mean the Credit Agreement dated
as of September 26, 1995 among the Company, each of the lenders party
thereto and Chase as agent for such lenders, as supplemented and amended
from time to time and in effect on the date hereof.
"Federal Funds Rate" shall mean, for any day, the rate per annum
(rounded upwards, if necessary, to the nearest 1/100 of 1%) equal to the
weighted average of the rates on overnight Federal funds transactions with
members of the Federal Reserve System arranged by Federal funds brokers on
such day, as published by the Federal Reserve Bank of New York on the
Business Day next succeeding such day, provided that (a) if the day for
which such rate is to be determined is not a Business Day, the Federal
Funds Rate for such day shall be such rate on such transactions on the next
preceding Business Day as so published on the next succeeding Business Day
and (b) if such rate is not so published for any Business Day, the Federal
Funds Rate for such Business Day shall be the average rate charged to Chase
on such Business Day on such transactions as determined by the
Administrative Agent.
"Fixed Base Rate" shall mean, with respect to any Fixed Rate Loan
for any Interest Period therefor, the rate per annum appearing on Page 3750
of the Dow ▇▇▇▇▇ Markets 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 in the London interbank market) at
approximately 11:00 a.m. London time on the date two Business Days prior to
the first day of such Interest Period as the rate for Dollar deposits
having a term comparable to such Interest Period, provided that if such
rate does not appear on such page, or if such page shall cease to be
publicly available, or if the information contained on such page, in the
reasonable
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judgment of the Majority Banks, shall cease accurately to reflect the rate
offered by leading banks in the London interbank market as reported by any
publicly available source of similar market data selected by the Majority
Banks, the Eurodollar Base Rate shall mean, for any Interest Period, the
rate per annum (rounded upwards, if necessary, to the nearest 1/16 of 1%)
quoted by Chase at approximately 11:00 a.m. London time (or as soon
thereafter as practicable) two Business Days prior to the first day of such
Interest Period for the offering by Chase to leading banks in the London
interbank market of Dollar deposits having a term comparable to such
Interest Period and in the amount of the Eurodollar Loan to be made by
Chase for such Interest Period. If Chase is not participating in any
Eurodollar Loan during any Interest Period therefor, the Eurodollar Base
Rate for such Interest Period shall be determined by reference to the
amount of such Loan that Chase would have made or had outstanding during
such Interest Period had it been participating in such Loan during such
Interest Period.
"Fixed Rate Loans" shall mean Eurodollar Loans and, for the
purposes of the definition of "Fixed Base Rate" in this Section 1.01 and
for the purposes of Section 5 hereof, LIBOR Market Loans.
"Foreign Borrower" shall have the meaning assigned to such term
in Section 5.07(a) hereof.
"Foreign Taxes" shall mean, with respect to any Foreign Borrower,
all present and future income, stamp, registration and other taxes and
levies, imposts, deductions, charges, compulsory loans and withholdings
whatsoever, and all interest, penalties or similar amounts with respect
thereto, now or hereafter imposed, assessed, levied or collected by any
foreign jurisdiction, or any political subdivision or taxing authority
thereof or therein, or by any federal or other association of or with which
any foreign jurisdiction may be a member or associated, on or in respect of
this Agreement, the Loans made to such Foreign Borrower, the recording,
registration, notarization or other formalization of any thereof, the
enforcement thereof or the introduction thereof in any judicial
proceedings, or on or in respect of any payments of principal, interest,
premiums, charges, fees or other amounts made on, under or in respect of
any thereof, excluding, however (in the case of any particular foreign
jurisdiction) income taxes imposed upon the overall net income of any Bank
organized under the laws of such foreign jurisdiction and having an
Applicable Lending Office in such foreign jurisdiction.
"GAAP" shall mean generally accepted accounting principles of the
United States of America applied on a basis consistent with those which, in
accordance with the last sentence of Section 1.02(a) hereof, are to be used
in making the calculations for purposes of determining compliance with this
Agreement.
"Guarantee" shall mean a guarantee, an endorsement, a contingent
agreement to purchase or to furnish funds for the payment or maintenance
of, or otherwise to be or become contingently liable under or with respect
to, the Indebtedness, other obligations, net worth,
364-Day Credit Agreement
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working capital or earnings of any Person, or a guarantee of the payment of
dividends or other distributions upon the stock or equity interests of any
Person, or an agreement to purchase, sell or lease (as lessee or lessor)
Property, products, materials, supplies or services primarily for the
purpose of enabling a debtor to make payment of such debtor's obligations
or an agreement to assure a creditor against loss, and including, without
limitation, causing a bank or other financial institution to issue a letter
of credit or other similar instrument for the benefit of another Person,
but excluding endorsements for collection or deposit in the ordinary course
of business. The terms "Guarantee" and "Guaranteed" used as a verb shall
have a correlative meaning.
"Indebtedness" shall mean, for any Person: (a) obligations
created, issued or incurred by such Person for borrowed money (whether by
loan, the issuance and sale of debt securities or the sale of Property to
another Person subject to an understanding or agreement, contingent or
otherwise, to repurchase such Property from such Person); (b) obligations
of such Person to pay the deferred purchase or acquisition price of
Property or services, other than trade accounts payable (other than for
borrowed money) arising, and accrued expenses incurred, in the ordinary
course of business, so long as such trade accounts payable are payable
within 90 days of the date the respective goods are delivered or the
respective services are rendered; (c) Indebtedness of others secured by a
Lien on the Property of such Person, whether or not the respective
Indebtedness so secured has been assumed by such Person; (d) obligations
(contingent or otherwise) of such Person in respect of letters of credit or
similar instruments issued or accepted by banks and other financial
institutions for account of such Person; (e) Capital Lease Obligations of
such Person; and (f) Indebtedness of others Guaranteed by such Person.
"Interest Period" shall mean:
(a) with respect to any Eurodollar Loan, each period commencing
on the date such Eurodollar Loan is made or Converted from a Loan of
another Type or the last day of the next preceding Interest Period for
such Loan and ending on the numerically corresponding day in the
first, second, third or sixth calendar month thereafter, as the
applicable Borrower may select as provided in Section 4.05 hereof,
except that each Interest Period that commences on the last Business
Day of a calendar month (or on any day for which there is no
numerically corresponding day in the appropriate subsequent calendar
month) shall end on the last Business Day of the appropriate
subsequent calendar month;
(b) with respect to any Set Rate Loan, the period commencing on
the date such Set Rate Loan is made and ending on any Business Day at
least 7 and up to 360 days thereafter, as the applicable Borrower may
select as provided in Section 2.03(b) hereof; and
(c) with respect to any LIBOR Market Loan, the period commencing
on the date such LIBOR Market Loan is made and ending on the
numerically corresponding day in
364-Day Credit Agreement
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the first, second, third or sixth calendar month thereafter, as the
applicable Borrower may select as provided in Section 2.03(b) hereof,
except that each Interest Period that commences on the last Business
Day of a calendar month (or any day for which there is no numerically
corresponding day in the appropriate subsequent calendar month) shall
end on the last Business Day of the appropriate subsequent calendar
month.
Notwithstanding the foregoing: (i) if any Interest Period for any
Eurodollar Loan or Money Market Loan would otherwise end after the
Revolving Credit Termination Date, such Interest Period shall end on the
Revolving Credit Termination Date; (ii) each Interest Period that would
otherwise end on a day that is not a Business Day shall end on the next
succeeding Business Day (or, in the case of an Interest Period for a
Eurodollar Loan or a LIBOR Market Loan, if such next succeeding Business
Day falls in the next succeeding calendar month, on the next preceding
Business Day); and (iii) notwithstanding clause (i) above, no Interest
Period for any Loan (other than a Set Rate Loan) shall have a duration of
less than one month and, if the Interest Period for any Eurodollar or LIBOR
Market Loan would otherwise be a shorter period, such Loan shall not be
available hereunder for such period.
"Interest Rate Protection Agreement" shall mean, for any Person,
an interest rate swap, cap or collar agreement or similar arrangement
between such Person and one or more financial institutions providing for
the transfer or mitigation of interest risks either generally or under
specific contingencies.
"Investment" shall mean, for any Person: (a) the acquisition
(whether for cash, Property, services or securities or otherwise) of
capital stock, bonds, notes, debentures, partnership or other ownership
interests or other securities of any other Person or any agreement to make
any such acquisition (including, without limitation, any "short sale" or
any sale of any securities at a time when such securities are not owned by
the Person entering into such short sale); (b) the making of any deposit
with, or advance, loan or other extension of credit to, any other Person
(including the purchase of Property from another Person subject to an
understanding or agreement, contingent or otherwise, to resell such
Property to such Person, but excluding any such advance, loan or extension
of credit having a term not exceeding 90 days representing the purchase
price of inventory or supplies sold by such Person in the ordinary course
of business); (c) the entering into of any Guarantee of, or other
contingent obligation with respect to, Indebtedness or other liability of
any other Person and (without duplication) any amount committed to be
advanced, lent or extended to such Person; or (d) the entering into of any
Interest Rate Protection Agreement.
"Joint Proxy Circular" shall mean the Joint Management
Information Circular and Proxy Statement set forth in the Company's
Schedule 14A Amendment No. 2 filed with the Securities and Exchange
Commission on June 12, 1998, including all exhibits thereto, in each case
as originally in effect and without giving effect to any modifications
thereof after the date hereof.
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"Level I Period" shall mean any period during which (a) no Event
of Default has occurred and is continuing and (b) the Standard & Poor's
Rating is at or above A- (or any successor rating) or the ▇▇▇▇▇'▇ Rating is
at or above A3 (or any successor rating).
"Level II Period" shall mean any period, other than a Level I
Period, during which (a) no Event of Default has occurred and is continuing
and (b) the Standard & Poor's Rating is at or above BBB+ (or any successor
rating) or the ▇▇▇▇▇'▇ Rating is at or above Baa1 (or any successor
rating).
"Level III Period" shall mean any period, other than a Level I
Period or a Level II Period, during which (a) no Event of Default has
occurred and is continuing and (b) the Standard & Poor's Rating is at or
above BBB (or any successor rating) or the ▇▇▇▇▇'▇ Rating is at or above
Baa2 (or any successor rating).
"Level IV Period" shall mean any period, other than a Level I
Period, a Level II Period or a Level III Period, during which (a) no Event
of Default has occurred and is continuing and (b) the Standard & Poor's
Rating is at or above BBB- (or any successor rating) or the ▇▇▇▇▇'▇ Rating
is at or above Baa3 (or any successor rating).
"Level V Period" shall mean any period that is not a Level I
Period, a Level II Period, a Level III Period or a Level IV Period.
"LIBO Margin" shall have the meaning assigned to such term in
Section 2.03(c)(ii)(C) hereof.
"LIBO Rate" shall mean, for any LIBOR Market Loan, a rate per
annum (rounded upwards, if necessary, to the nearest 1/100 of 1%)
determined by the Administrative Agent to be equal to the rate of interest
specified in the definition of "Fixed Base Rate" in this Section 1.01 for
the Interest Period for such Loan.
"LIBOR Auction" shall mean a solicitation of Money Market Quotes
setting forth LIBO Margins based on the LIBO Rate pursuant to Section 2.03
hereof.
"LIBOR Market Loans" shall mean Money Market Loans the interest
rates on which are determined on the basis of LIBO Rates pursuant to a
LIBOR Auction.
"Lien" shall mean, with respect to any Property, any mortgage,
lien, pledge, charge, security interest or encumbrance of any kind in
respect of such Property. For purposes of this Agreement, a Person shall be
deemed to own subject to a Lien any Property that it has acquired or holds
subject to the interest of a vendor or lessor under any conditional sale
agreement, capital lease or other title retention agreement (other than an
operating lease) relating to such Property.
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"Loans" shall mean Syndicated Loans and Money Market Loans.
"Majority Banks" shall mean Banks having more than 50% of the
aggregate amount of the Commitments or, if the Commitments shall have
terminated, Banks holding more than 50% of the aggregate unpaid principal
amount of the Loans.
"Margin Stock" shall mean "margin stock" within the meaning of
Regulations U and X.
"Material Adverse Effect" shall mean a material adverse effect on
(a) the Property, business, operations, financial condition, liabilities or
capitalization of the Company and its Subsidiaries taken as a whole, (b)
the ability of the Company to perform its obligations hereunder, (c) the
validity or enforceability of this Agreement, (d) the rights and remedies
of the Banks and the Administrative Agent hereunder or (e) the timely
payment of the principal of or interest on the Loans or other amounts
payable in connection therewith.
"Material Indebtedness" shall mean Indebtedness (other than the
Loans), or obligations in respect of one or more Interest Rate Protection
Agreements, of the Company and its Subsidiaries in an aggregate principal
amount exceeding $50,000,000. For purposes of determining Material
Indebtedness, the "principal amount" of the obligations of any Person in
respect of any Interest Rate Protection Agreement at any time shall be the
maximum aggregate amount (giving effect to any netting requirements) that
such Person would be required to pay if such Interest Rate Protection
Agreement were terminated at such time.
"Money Market Borrowing" shall have the meaning assigned to such
term in Section 2.03(b) hereof.
"Money Market Loans" shall mean the loans provided for by Section
2.03 hereof.
"Money Market Quote" shall mean an offer in accordance with
Section 2.03(c) hereof by a Bank to make a Money Market Loan with one
single specified interest rate.
"Money Market Quote Request" shall have the meaning assigned to
such term in Section 2.03(b) hereof.
"Moody's" shall mean ▇▇▇▇▇'▇ Investors Service, Inc. or any
successor corporation thereto.
"▇▇▇▇▇'▇ Rating" shall mean, at any time, the then current rating
(including the failure to rate) by Moody's of the Company's senior
unsecured long term public debt.
"Multiemployer Plan" shall mean a multiemployer plan defined as
such in
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Section 3(37) of ERISA to which contributions have been made by the Company
or any ERISA Affiliate and which is covered by Title IV of ERISA.
"Net Cash Proceeds" shall mean:
(a) in the case of any Disposition, the aggregate amount of all
cash payments, and the fair market value of any non-cash
consideration, received by the Company and its Subsidiaries directly
or indirectly in connection with such Disposition; provided that (i)
Net Cash Proceeds shall be net of (x) the amount of any legal, title
and recording tax expenses, commissions and other fees and expenses
paid by the Company and its Subsidiaries in connection with such
Disposition and (y) any Federal, state, local and foreign income or
other taxes estimated to be payable by the Company and its
Subsidiaries as a result of such Disposition (but only to the extent
that such estimated taxes are in fact paid to the relevant Federal,
state, local or foreign governmental authority within three months of
the date of such Disposition) and (ii) Net Cash Payments shall be net
of any repayments by the Company or any of its Subsidiaries of
Indebtedness to the extent that (x) such Indebtedness is secured by a
Lien on the Property that is the subject of such Disposition and (y)
the transferee of (or holder of a Lien on) such Property requires that
such Indebtedness be repaid as a condition to the purchase of such
Property; and
(b) in the case of any Casualty Event, the aggregate amount of
proceeds of insurance, condemnation awards and other compensation
received by the Company and its Subsidiaries in respect of such
Casualty Event net of (i) reasonable expenses incurred by the Company
and its Subsidiaries in connection therewith and (ii) contractually
required repayments of Indebtedness to the extent secured by a Lien on
such Property and any income and transfer taxes payable by the Company
or any of its Subsidiaries in respect of such Casualty Event.
"PBGC" shall mean the Pension Benefit Guaranty Corporation or any
entity succeeding to any or all of its functions under ERISA.
"Person" shall mean any individual, corporation, company,
voluntary association, partnership, joint venture, trust, unincorporated
organization or government (or any agency, instrumentality or political
subdivision thereof).
"Plan" shall mean an employee benefit or other plan established
or maintained by the Company or any ERISA Affiliate and that is covered by
Title IV of ERISA, other than a Multiemployer Plan.
"Post-Default Rate" shall mean, in respect of any principal of
any Loan or any other amount under this Agreement that is not paid when due
(whether at stated maturity, by
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acceleration or otherwise), a rate per annum during the period from and
including the due date to but excluding the date on which such amount is
paid in full equal to 2% plus the Base Rate as in effect from time to time
plus the Applicable Margin (if any) for Base Rate Loans (provided that, if
the amount so in default is principal of a Eurodollar Loan or a Money
Market Loan and the due date thereof is a day other than the last day of
the Interest Period therefor, the "Post-Default Rate" for such principal
shall be, for the period from and including such due date to but excluding
the last day of such Interest Period, 2% plus the interest rate for such
Loan as provided in Section 3.02 hereof and, thereafter, the rate provided
for above in this definition).
"Preferred Stock" shall mean (a) the Series C Cumulative
Preferred Stock and (b) any other preferred stock hereafter issued by the
Company that does not have any requirement for the Company to purchase,
redeem, retire or otherwise acquire the same on or before the Revolving
Credit Termination Date.
"Prime Rate" shall mean the rate of interest from time to time
announced by Chase at its principal office as its prime commercial lending
rate.
"Property" shall mean any right or interest in or to property of
any kind whatsoever, whether real, personal or mixed and whether tangible
or intangible.
"Quarterly Dates" shall mean the quarterly anniversaries of the
Closing Date; provided that, if any such date is not a Business Day, the
respective Quarterly Date shall be the next preceding Business Day.
"Regulations A, D, U and X" shall mean, respectively, Regulations
A, D, U and X of the Board of Governors of the Federal Reserve System (or
any successor), as the same may be modified and supplemented and in effect
from time to time.
"Regulatory Change" shall mean, with respect to any Bank, any
change after the date of this Agreement in Federal, state or foreign law or
regulations (including, without limitation, Regulation D) or the adoption
or making after such date of any interpretation, directive or request
applying to a class of banks including such Bank of or under any Federal,
state or foreign law or regulations (whether or not having the force of law
and whether or not failure to comply therewith would be unlawful) by any
court or governmental or monetary authority charged with the interpretation
or administration thereof.
"Reserve Requirement" shall mean, for any Interest Period for any
Eurodollar Loan or LIBOR Market Loan, the average maximum rate at which
reserves (including, without limitation, any marginal, supplemental or
emergency reserves) are required to be maintained during such Interest
Period under Regulation D by member banks of the Federal Reserve System in
New York City with deposits exceeding one billion Dollars against
"Eurocurrency liabilities" (as such term is used in Regulation D). Without
limiting the effect of the foregoing, the Reserve
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Requirement shall include any other reserves required to be maintained by
such member banks by reason of any Regulatory Change with respect to (i)
any category of liabilities that includes deposits by reference to which
the Fixed Base Rate for Eurodollar Loans or LIBOR Market Loans (as the case
may be) is to be determined as provided in the definition of "Fixed Base
Rate" in this Section 1.01 or (ii) any category of extensions of credit or
other assets that includes Eurodollar Loans or LIBOR Market Loans.
"Revolving Credit Termination Date" shall mean June 23, 1999, as
such date may from time to time be extended as provided in Section 2.10
hereof.
"Set Rate" shall have the meaning assigned to such term in
Section 2.03(c)(ii)(D) hereof.
"Set Rate Auction" shall mean a solicitation of Money Market
Quotes setting forth Set Rates pursuant to Section 2.03 hereof.
"Set Rate Loans" shall mean Money Market Loans the interest rates
on which are determined on the basis of Set Rates pursuant to a Set Rate
Auction.
"Standard & Poor's" shall mean Standard & Poor's Ratings Group, a
division of McGraw Hill, Inc., or any successor corporation thereto.
"Standard & Poor's Rating" shall mean, at any time, the then
current rating (including the failure to rate) by Standard & Poor's of the
Company's senior unsecured long term public debt.
"Subsidiary" shall mean, for any Person, any corporation,
partnership or other entity of which at least a majority of the securities
or other ownership interests having by the terms thereof ordinary voting
power to elect a majority of the board of directors or other persons
performing similar functions of such corporation, partnership or other
entity (irrespective of whether or not at the time securities or other
ownership interests of any other class or classes of such corporation,
partnership or other entity shall have or might have voting power by reason
of the happening of any contingency) is at the time directly or indirectly
owned or controlled by such Person or one or more Subsidiaries of such
Person or by such Person and one or more Subsidiaries of such Person.
"Wholly Owned Subsidiary" shall mean any such corporation, partnership or
other entity of which all of the equity securities or other ownership
interests (other than, in the case of a corporation, directors' qualifying
shares) are so owned or controlled.
"Syndicated Loans" shall mean the loans provided for by Section
2.01 hereof, which may be Base Rate Loans and/or Eurodollar Loans.
"Total Assets" shall mean, at any time, the aggregate book value
of all of the
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assets of the Company and its Consolidated Subsidiaries at such time
determined on a consolidated basis (without duplication) in accordance with
GAAP.
"Total Capital" shall mean, at any time, Consolidated Net Worth
plus Total Debt.
"Total Debt" shall mean, at any time, the aggregate outstanding
principal amount of all Indebtedness of the Company and its Consolidated
Subsidiaries at such time determined on a consolidated basis (without
duplication) in accordance with GAAP to the extent required to be reflected
on a balance sheet of the Company and its Subsidiaries prepared in
accordance with GAAP; provided that the term "Total Debt" shall include any
preferred stock that does not qualify as Preferred Stock, but shall not
include Indebtedness in respect of commercial documentary letters of
credit.
"Type" shall have the meaning assigned to such term in Section
1.03 hereof.
1.02 Accounting Terms and Determinations.
(a) Accounting Principles. Except as otherwise expressly provided
herein, all accounting terms used herein shall be interpreted, and all
financial statements and certificates and reports as to financial matters
required to be delivered to the Banks hereunder shall (unless otherwise
disclosed to the Banks in writing at the time of delivery thereof in the
manner described in subsection (b) below) be prepared, in accordance with
generally accepted accounting principles of the United States of America
applied on a basis consistent with those used in the preparation of the
latest financial statements furnished to the Banks hereunder (which, prior
to the delivery of the first financial statements under Section 9.01
hereof, shall mean the audited financial statements as at December 31, 1997
referred to in Section 8.02 hereof). All calculations made for the purposes
of determining compliance with this Agreement shall (except as otherwise
expressly provided herein) be made by application of generally accepted
accounting principles of the United States of America applied on a basis
consistent with those used in the preparation of the latest annual or
quarterly financial statements furnished to the Banks pursuant to Section
9.01 hereof (or, prior to the delivery of the first financial statements
under Section 9.01 hereof, used in the preparation of the audited financial
statements as at December 31, 1997 referred to in Section 8.02 hereof)
unless (i) the Company shall have objected to determining such compliance
on such basis at the time of delivery of such financial statements or (ii)
the Majority Banks shall so object in writing within 30 days after delivery
of such financial statements, in either of which events such calculations
shall be made on a basis consistent with those used in the preparation of
the latest financial statements as to which such objection shall not have
been made (which, if objection is made in respect of the first financial
statements delivered under Section 9.01 hereof, shall mean the audited
financial statements as at December 31, 1997 referred to in Section 8.02
hereof).
(b) Statement of Variations in Accounting Principles. The Company
shall deliver
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to the Banks at the same time as the delivery of any annual or quarterly
financial statement under Section 9.01 hereof (i) a description in
reasonable detail of any material variation between the application of
accounting principles employed in the preparation of such statement and the
application of accounting principles employed in the preparation of the
next preceding annual or quarterly financial statements as to which no
objection has been made in accordance with the last sentence of subsection
(a) above and (ii) reasonable estimates of the difference between such
statements arising as a consequence thereof.
(c) Changes in Fiscal Year. To enable the ready and consistent
determination of compliance with the covenants set forth in Section 9
hereof, the Company will not change the last day of its fiscal year from
December 31 of each year, or the last days of the first three fiscal
quarters in each of its fiscal years from March 31, June 30 and September
30 of each year, respectively without the consent of the Majority Banks,
such consent not to be unreasonably withheld.
1.03 Classes and Types of Loans. Loans hereunder are
distinguished by "Class" and by "Type". The "Class" of a Loan refers to
whether such Loan is a Money Market Loan or a Syndicated Loan, each of
which constitutes a Class. The "Type" of a Loan refers to whether such Loan
is a Base Rate Loan, a Eurodollar Loan, a Set Rate Loan or a LIBOR Market
Loan, each of which constitutes a Type. Loans may be identified by both
Class and Type.
Section 2. Commitments, Loans and Prepayments.
2.01 Syndicated Loans. Each Bank severally agrees, on the terms
and conditions of this Agreement, to make loans to the Borrowers in Dollars
during the period from and including the Closing Date to but not including
the Revolving Credit Termination Date in an aggregate principal amount at
any one time outstanding up to but not exceeding the amount of the
Commitment of such Bank as in effect from time to time. Subject to the
terms and conditions of this Agreement, during such period the Borrowers
may borrow, repay and reborrow the amount of the Commitments by means of
Base Rate Loans and Eurodollar Loans and during such period and thereafter
the Borrowers may Convert Loans of one Type into Loans of another Type (as
provided in Section 2.09 hereof) or Continue Loans of one Type as Loans of
the same Type (as provided in Section 2.09 hereof); provided that (a) the
aggregate principal amount of all Syndicated Loans of all Borrowers,
together with the aggregate principal amount of all Money Market Loans of
all Borrowers, at any one time outstanding shall not exceed the aggregate
amount of the Commitments; and (b) no more than fifteen different Interest
Periods for both Syndicated Loans and Money Market Loans of all Borrowers
may be outstanding at the same time (for which purpose Interest Periods
described in different lettered clauses of the definition of the term
"Interest Period" shall be deemed to be different Interest Periods even if
they are coterminous).
2.02 Borrowings of Syndicated Loans. A Borrower shall give the
Administrative
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Agent (which shall promptly notify the Banks) notice of each borrowing
hereunder to be made to such Borrower as provided in Section 4.05 hereof.
Not later than 1:00 p.m. New York time on the date specified for each
borrowing of Syndicated Loans hereunder, each Bank shall make available the
amount of the Syndicated Loan or Loans to be made by it on such date to the
Administrative Agent, at an account designated by the Administrative Agent
to the Banks, in immediately available funds, for account of the applicable
Borrower. The amount so received by the Administrative Agent shall, subject
to the terms and conditions of this Agreement, be made available to such
Borrower, in immediately available funds, to such account as it shall
specify to the Administrative Agent.
2.03 Money Market Loans.
(a) Money Market Loans. In addition to borrowings of Syndicated
Loans, during any Level I Period, Level II Period, Level III Period or
Level IV Period prior to the Revolving Credit Termination Date any Borrower
may, as set forth in this Section 2.03, request the Banks to make offers to
make Money Market Loans to such Borrower in Dollars. The Banks may, but
shall have no obligation to, make such offers and such Borrower may, but
shall have no obligation to, accept any such offers in the manner set forth
in this Section 2.03. Money Market Loans may be LIBOR Market Loans or Set
Rate Loans (each a "Type" of Money Market Loan), provided that:
(i) there may be no more than fifteen different Interest Periods
for both Syndicated Loans and Money Market Loans of all Borrowers
outstanding at the same time (for which purpose Interest Periods
described in different lettered clauses of the definition of the term
"Interest Period" shall be deemed to be different Interest Periods
even if they are coterminous); and
(ii) the aggregate principal amount of all Money Market Loans of
all Borrowers, together with the aggregate principal amount of all
Syndicated Loans of all Borrowers, at any one time outstanding shall
not exceed the aggregate amount of the Commitments at such time.
(b) Quote Request. When a Borrower wishes to request offers to
make Money Market Loans, it shall give the Administrative Agent (which
shall promptly notify the Banks) notice (a "Money Market Quote Request") so
as to be received no later than 11:00 a.m. New York time on (x) the fourth
Business Day prior to the date of borrowing proposed therein, in the case
of a LIBOR Auction or (y) the Business Day next preceding the date of
borrowing proposed therein, in the case of a Set Rate Auction (or, in any
such case, such other time and date as such Borrower and the Administrative
Agent, with the consent of the Majority Banks, may agree). A Borrower may
request offers to make Money Market Loans for up to three different
Interest Periods in a single notice (for which purpose Interest Periods in
different lettered clauses of the definition of the term "Interest Period"
shall be deemed to be different Interest Periods even if
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they are coterminous); provided that the request for each separate Interest
Period shall be deemed to be a separate Money Market Quote Request for a
separate borrowing (a "Money Market Borrowing"). Each such notice shall be
substantially in the form of Exhibit D hereto and shall specify as to each
Money Market Borrowing:
(i) the proposed date of such borrowing, which shall be a
Business Day;
(ii) the aggregate amount of such Money Market Borrowing, which
shall be at least $5,000,000 (or a larger integral multiple of
$1,000,000) but shall not cause the limits specified in Section
2.03(a) hereof to be violated;
(iii) the duration of the Interest Period applicable thereto;
(iv) whether the Money Market Quotes requested for a particular
Interest Period are for LIBOR Market Loans or Set Rate Loans; and
(v) if the Money Market Quotes requested are for Set Rate Loans,
the date on which the Money Market Quotes are to be submitted if it is
before the proposed date of borrowing (the date on which such Money
Market Quotes are to be submitted is called the "Quotation Date").
Except as otherwise provided in this Section 2.03(b), no Money Market Quote
Request shall be given within five Business Days (or such other number of
days as the Company and the Administrative Agent, with the consent of the
Majority Banks, may agree) of any other Money Market Quote Request.
(c) Money Market Quotes.
(i) Each Bank may submit one or more Money Market Quotes, each
containing an offer to make a Money Market Loan in response to any
Money Market Quote Request; provided that, if a Borrower's request
under Section 2.03(b) hereof specified more than one Interest Period,
such Bank may make a single submission containing one or more Money
Market Quotes for each such Interest Period. Each Money Market Quote
must be submitted to the Administrative Agent not later than (x) 2:00
p.m. New York time on the fourth Business Day prior to the proposed
date of borrowing, in the case of a LIBOR Auction or (y) 10:00 a.m.
New York time on the Quotation Date, in the case of a Set Rate Auction
(or, in any such case, such other time and date as the applicable
Borrower and the Administrative Agent, with the consent of the
Majority Banks, may agree); provided that any Money Market Quote may
be submitted by Chase (or its Applicable Lending Office) only if Chase
(or such Applicable Lending Office) notifies the applicable Borrower
of the terms of the offer contained therein not later than (x) 1:00
p.m. New York time on the fourth Business Day prior to the proposed
date of borrowing, in the case
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of a LIBOR Auction or (y) 9:45 a.m. New York time on the Quotation
Date, in the case of a Set Rate Auction. Subject to Sections 5.02(b),
5.03, 7.02 and 10 hereof, any Money Market Quote so made shall be
irrevocable except with the consent of the Administrative Agent given
on the instructions of the applicable Borrower.
(ii) Each Money Market Quote shall be substantially in the form
of Exhibit E hereto and shall specify:
(A) the proposed date of borrowing and the Interest Period
therefor;
(B) the principal amount of the Money Market Loan for which
each such offer is being made, which principal amount shall be at
least $5,000,000 (or a larger integral multiple of $1,000,000);
provided that the aggregate principal amount of all Money Market
Loans for which a Bank submits Money Market Quotes (x) may be
greater or less than the Commitment of such Bank but (y) may not
exceed the principal amount of the Money Market Borrowing for a
particular Interest Period for which offers were requested;
(C) in the case of a LIBOR Auction, the margin above or
below the applicable LIBO Rate (the "LIBO Margin") offered for
each such Money Market Loan, expressed as a percentage (rounded
upwards, if necessary, to the nearest 1/10,000th of 1%) to be
added to or subtracted from the applicable LIBO Rate;
(D) in the case of a Set Rate Auction, the rate of interest
per annum (rounded upwards, if necessary, to the nearest
1/10,000th of 1%) offered for each such Money Market Loan (the
"Set Rate"); and
(E) the identity of the quoting Bank.
Unless otherwise agreed by the Administrative Agent and the applicable
Borrower, no Money Market Quote shall contain qualifying, conditional
or similar language or propose terms other than or in addition to
those set forth in the applicable Money Market Quote Request and, in
particular, no Money Market Quote may be conditioned upon acceptance
by such Borrower of all (or some specified minimum) of the principal
amount of the Money Market Loan for which such Money Market Quote is
being made.
(d) Notice of Administrative Agent. The Administrative Agent
shall (x) in the case of a Set Rate Auction, as promptly as practicable
after the Money Market Quote is submitted (but in any event not later than
10:15 a.m. New York time on the Quotation Date) or (y) in the case of a
LIBOR Auction, by 4:00 p.m. New York time on the day a Money Market Quote
is submitted, notify the applicable Borrower of the terms (i) of any Money
Market Quote submitted by a Bank that is in accordance with Section 2.03(c)
hereof and (ii) of any Money
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Market Quote that amends, modifies or is otherwise inconsistent with a
previous Money Market Quote submitted by such Bank with respect to the same
Money Market Quote Request. Any such subsequent Money Market Quote shall be
disregarded by the Administrative Agent unless such subsequent Money Market
Quote is submitted solely to correct a manifest error in such former Money
Market Quote. The Administrative Agent's notice to the applicable Borrower
shall specify (A) the aggregate principal amount of the Money Market
Borrowing for which offers have been received and (B) the respective
principal amounts and LIBO Margins or Set Rates, as the case may be, so
offered by each Bank (identifying the Bank that made each Money Market
Quote).
(e) Acceptance of Quotes. Not later than 11:00 a.m. New York time
on (x) the third Business Day prior to the proposed date of borrowing, in
the case of a LIBOR Auction or (y) the Quotation Date, in the case of a Set
Rate Auction (or, in any such case, such other time and date as such
Borrower and the Administrative Agent, with the consent of the Majority
Banks, may agree), the applicable Borrower shall notify the Administrative
Agent of its acceptance or nonacceptance, which acceptance or nonacceptance
shall be irrevocable, of the offers so notified to it pursuant to Section
2.03(d) hereof (and the failure of such Borrower to give such notice by
such time shall constitute nonacceptance) and the Administrative Agent
shall promptly notify each affected Bank. In the case of acceptance, such
notice shall specify the aggregate principal amount of offers for each
Interest Period that is accepted. The applicable Borrower may accept any
Money Market Quote in whole or in part (provided that any Money Market
Quote accepted in part shall be at least $1,000,000 or an integral
thereof); provided that:
(i) the aggregate principal amount of each Money Market Borrowing
may not exceed the applicable amount set forth in the related Money
Market Quote Request;
(ii) the aggregate principal amount of each Money Market
Borrowing shall be at least $5,000,000 (or a larger integral multiple
of $1,000,000) but shall not cause the limits specified in Section
2.03(a) hereof to be violated;
(iii) acceptance of offers may be made only in ascending order of
LIBO Margins or Set Rates, as the case may be, in each case beginning
with the lowest rate so offered; and
(iv) such Borrower may not accept any offer where the
Administrative Agent has advised such Borrower that such offer fails
to comply with Section 2.03(c)(ii) hereof or otherwise fails to comply
with the requirements of this Agreement (including, without
limitation, Section 2.03(a) hereof).
If offers are made by two or more Banks with the same LIBO Margins or Set
Rates, as the case may be, for a greater aggregate principal amount than
the amount in respect of which offers are permitted to be accepted for the
related Interest Period pursuant to the foregoing provisions of
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this Section 2.03(e), the principal amount of Money Market Loans in respect
of which such offers are accepted shall be allocated by the applicable
Borrower among such Banks as nearly as possible (in amounts of at least
$1,000,000 or integral multiples thereof) in proportion to the aggregate
principal amount of such offers. Determinations by such Borrower of the
amounts of Money Market Loans shall be conclusive in the absence of
manifest error.
(f) Funding. Any Bank whose offer to make any Money Market Loan
has been accepted shall, not later than 1:00 p.m. New York time on the date
specified for the making of such Loan, make the amount of such Loan
available to the Administrative Agent at an account designated by the
Administrative Agent in immediately available funds, for account of the
applicable Borrower. The amount so received by the Administrative Agent
shall, subject to the terms and conditions of this Agreement, be made
available to such Borrower, in immediately available funds, to such account
as it shall specify to the Administrative Agent.
(g) Fee. The applicable Borrower shall pay to the Administrative
Agent a fee of $1,250 each time such Borrower gives a Money Market Quote
Request to the Administrative Agent.
2.04 Changes of Commitments.
(a) Reduction of Commitments. The aggregate amount of the
Commitments shall be automatically reduced to zero at the close of business
on the Revolving Credit Termination Date.
(b) Notice; Minimum Amount. The Company shall have the right at
any time or from time to time (i) so long as no Syndicated Loans or Money
Market Loans are outstanding, to terminate the Commitments and (ii) to
reduce the aggregate unused amount of the Commitments (for which purpose
use of the Commitments shall be deemed to include the aggregate principal
amount of all Money Market Loans); provided that (x) the Company shall give
notice of each such termination or reduction as provided in Section 4.05
hereof and (y) each partial reduction shall be in an aggregate amount at
least equal to $5,000,000 and in integral multiples of $5,000,000 in excess
thereof.
(c) Termination or Reduction Irrevocable. The Commitments once
terminated or reduced may not be reinstated.
2.05 Facility Fee. The Company shall pay to the Administrative
Agent for account of each Bank a facility fee on the amount of such Bank's
Commitment as then in effect, for the period from and including the date of
this Agreement to but not including the earlier of the date such Commitment
is terminated and the Revolving Credit Termination Date, at a rate per
annum equal to (a) 0.0600% during any Level I Period, (b) 0.0800% during
any Level II Period, (c) 0.1000% during any Level III Period, (d) 0.1250%
during any Level IV Period and (e)
364-Day Credit Agreement
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0.2000% during any Level V Period, provided that during the period from the
Closing Date through but excluding the first anniversary thereof, such rate
shall be equal to 0.1000% (irrespective of rating level). Accrued facility
fee shall be payable on each Quarterly Date and on the earlier of the date
the Commitments are terminated and the Revolving Credit Termination Date.
Any change in a facility fee by reason of a change in the Standard & Poor's
Rating or the ▇▇▇▇▇'▇ Rating shall become effective on the date two
Business Days after the date of announcement or publication by the
respective rating agencies of a change in such rating or, in the absence of
such announcement or publication, on the date two Business Days after the
effective date of such changed rating.
2.06 Lending Offices. The Loans of each Type made by each Bank
shall be made and maintained at such Bank's Applicable Lending Office for
Loans of such Type.
2.07 Several Obligations; Remedies Independent. The failure of
any Bank to make any Loan to be made by it on the date specified therefor
shall not relieve any other Bank of its obligation to make its Loan on such
date, but neither any Bank nor the Administrative Agent shall be
responsible for the failure of any other Bank to make a Loan to be made by
such other Bank, and no Bank shall have any obligation to the
Administrative Agent or any other Bank for the failure by such Bank to make
any Loan required to be made by such Bank. The amounts payable by each
Borrower at any time hereunder to each Bank shall be a separate and
independent debt and each Bank shall be entitled to protect and enforce its
rights arising out of this Agreement, and it shall not be necessary for any
other Bank or the Administrative Agent to consent to, or be joined as an
additional party in, any proceedings for such purposes.
2.08 Loan Accounts; Promissory Notes.
(a) Maintenance of Loan Accounts by Banks. Each Bank shall
maintain in accordance with its usual practice an account or accounts
evidencing the indebtedness of each Borrower to such Bank resulting from
each Loan made by such Bank to such Borrower, including the amounts of
principal and interest payable and paid to such Bank by such Borrower from
time to time hereunder.
(b) Maintenance of Loan Accounts by Administrative Agent. The
Administrative Agent shall maintain accounts in which it shall record (i)
the amount of each Loan made hereunder to each Borrower, the Class and Type
thereof and, in the case of a Eurodollar Loan, the Interest Period
applicable thereto, (ii) the amount of any principal or interest due and
payable or to become due and payable to each Bank from each Borrower
hereunder and (iii) the amount of any sum received by the Administrative
Agent hereunder from each Borrower for the account of the Banks and each
Bank's share thereof.
(c) Effect of Entries. The entries made in the accounts
maintained pursuant to paragraph (a) or (b) of this Section shall be prima
facie evidence of the existence and amounts of
364-Day Credit Agreement
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the obligations recorded therein absent any manifest arithmetical error in
such accounts; provided that the failure of any Bank or the Administrative
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.
(d) Promissory Notes. Any Bank may request that Loans of any
Class made by it to any Borrower be evidenced by a promissory note of such
Borrower. In such event, the respective Borrower shall prepare, execute and
deliver to such Bank a promissory note payable to the order of such Bank
(or, if requested by such Bank, such Bank and its registered assigns) and
in a form approved by the Administrative Agent. Thereafter, the Loans of
such Borrower evidenced by such promissory note and interest thereon shall
at all times (including after assignment pursuant to Section 12.06 hereof)
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).
2.09 Optional Prepayments and Conversions or Continuations of
Loans. Subject to Sections 4.04 and 5 hereof, each Borrower shall have the
right to prepay Syndicated Loans, or to Convert Syndicated Loans of one
Type into Syndicated Loans of another Type or Continue Syndicated Loans of
one Type as Syndicated Loans of the same Type, at any time or from time to
time, provided that such Borrower shall give the Administrative Agent
notice of each such prepayment, Conversion or Continuation as provided in
Section 4.05 hereof (and, upon the date specified in any such notice of
prepayment, the amount to be prepaid shall become due and payable
hereunder). No Money Market Loan may be prepaid without the prior consent
of the Bank holding such Loan. Notwithstanding the foregoing, and without
limiting the rights and remedies of the Banks under Section 10 hereof, in
the event that any Event of Default shall have occurred and be continuing,
the Administrative Agent may (and at the request of the Majority Banks
shall) suspend the right of any Borrower to Convert any Loan into a Fixed
Rate Loan, or to Continue any Loan as a Fixed Rate Loan, in which event all
Loans shall be Converted (on the last day(s) of the respective Interest
Periods therefor) or Continued, as the case may be, as Base Rate Loans.
2.10 Extension of Commitment Termination Date.
(a) Request for Extension. The Company may, by notice to the
Administrative Agent, which shall promptly notify the Banks, not less than
45 days and not more than 60 days prior to the Revolving Credit Termination
Date then in effect hereunder (the "Existing Revolving Credit Termination
Date"), request that the Banks extend the Revolving Credit Termination Date
for an additional 364 days from the Consent Date (as defined below);
provided that the Company may request only four extensions pursuant to this
Section 2.10. Each Bank, acting in its sole discretion, shall, by notice to
the Company and the Administrative Agent given on the date and only the
date (herein, the "Consent Date") that is 30 days prior to the Existing
Revolving Credit Termination Date (except that, if such date is not a
Business Day, such notice shall be given on
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the next succeeding Business Day), advise the Company whether or not such
Bank agrees to such extension; provided that each Bank that determines not
to extend the Revolving Credit Termination Date (a "Non-extending Bank")
shall notify the Administrative Agent (which shall notify the Banks) of
such fact promptly after such determination (but in any event no later than
the Consent Date) and any Bank that does not advise the Company on or
before the Consent Date shall be deemed to be a Non-extending Bank. The
election of any Bank to agree to such extension shall not obligate any
other Bank to so agree.
(b) Replacement of Non-extending Banks. The Company shall have
the right on or before the Existing Revolving Credit Termination Date to
replace each Non-extending Bank with, and otherwise add to this Agreement,
one or more other banks (which may include any Bank, each prior to the
Existing Revolving Credit Termination Date an "Additional Commitment Bank")
with the approval of the Administrative Agent (which approval shall not be
unreasonably withheld), each of which Additional Commitment Banks shall
have entered into an agreement in form and substance satisfactory to the
Company and the Administrative Agent pursuant to which such Additional
Commitment Bank shall, effective as of the Existing Revolving Credit
Termination Date, undertake a Commitment (and, if any such Additional
Commitment Bank is already a Bank, its Commitment shall be in addition to
such Bank's Commitment hereunder on such date).
(c) Effectiveness of Extension. If (and only if) the total of the
Commitments of the Banks that have agreed so to extend the Revolving Credit
Termination Date and the additional Commitments of the Additional
Commitment Banks shall be more than 50% of the aggregate amount of the
Commitments in effect immediately prior to the Consent Date, then,
effective as of the Existing Revolving Credit Termination Date, the
Existing Revolving Credit Termination Date shall be extended to the date
falling 364 days after the Consent Date (except that, if such date is not a
Business Day, such Revolving Credit Termination Date as so extended shall
be the next preceding Business Day) and each Additional Commitment Bank
shall thereupon become a "Bank" for all purposes of this Agreement.
Notwithstanding the foregoing, the extension of the Existing
Revolving Credit Termination Date shall not be effective with respect to
any Bank unless:
(i) no Default shall have occurred and be continuing on each of
the date of the notice requesting such extension, on the Consent Date
and on the Existing Revolving Credit Termination Date;
(ii) each of the representations and warranties made by the
Company in Section 8 hereof, and by each Subsidiary Borrower in its
respective Subsidiary Borrower Designation Letter, shall be true and
complete on and as of each of the date of the notice requesting such
extension, the Consent Date and the Existing Revolving Credit
Termination Date with the same force and effect as if made on and as
of such date (or, if any such representation or warranty is expressly
stated to have been made as of a specific date, as of such specific
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date); and
(iii) each Non-extending Bank shall have been paid in full by
each Borrower all amounts owing to such Bank hereunder on or before
the Existing Revolving Credit Termination Date.
Even if the Existing Revolving Credit Termination Date is extended as
aforesaid, the Commitment of each Non-extending Bank shall terminate on the
Existing Revolving Credit Termination Date.
Section 3. Payments of Principal and Interest.
3.01 Repayment of Loans.
(a) Repayment of Money Market Loans. Each Borrower hereby
promises to pay to the Administrative Agent for account of each Bank that
makes any Money Market Loan to such Borrower the principal amount of such
Money Market Loan, and such Money Market Loan shall mature, on the last day
of the Interest Period for such Money Market Loan.
(b) Repayment of Syndicated Loans. Each Borrower hereby promises
to pay to the Administrative Agent for account of each Bank the principal
of such Bank's Syndicated Loans to such Borrower on the Revolving Credit
Termination Date.
3.02 Interest. Each Borrower hereby promises to pay to the
Administrative Agent for account of each Bank interest on the unpaid
principal amount of each Loan made by such Bank to such Borrower for the
period from and including the date of such Loan to but excluding the date
such Loan shall be paid in full, at the following rates per annum:
(a) during such periods as such Loan is a Base Rate Loan, the
Base Rate (as in effect from time to time) plus the Applicable Margin
(if any);
(b) during such periods as such Loan is a Eurodollar Loan, for
each Interest Period relating thereto, the Fixed Base Rate for such
Loan for such Interest Period plus the Applicable Margin;
(c) if such Loan is a LIBOR Market Loan, the LIBO Rate for such
Loan for the Interest Period therefor plus (or minus) the LIBO Margin
quoted by the Bank making such Loan in accordance with Section 2.03
hereof; and
(d) if such Loan is a Set Rate Loan, the Set Rate for such Loan
for the Interest Period therefor quoted by the Bank making such Loan
in accordance with Section 2.03 hereof.
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Notwithstanding the foregoing, each Borrower hereby promises to pay to the
Administrative Agent for account of each Bank interest at the applicable
Post-Default Rate on any principal of any Loan made by such Bank to such
Borrower and on any other amount payable by such Borrower hereunder held by
such Bank to or for account of such Bank, which shall not be paid in full
when due (whether at stated maturity, by acceleration or otherwise), for
the period from and including the due date thereof to but excluding the
date the same is paid in full. Accrued interest on each Loan shall be
payable (i) in the case of a Base Rate Loan, quarterly on the Quarterly
Dates, (ii) in the case of a Fixed Rate Loan or a Money Market Loan, on the
last day of each Interest Period therefor and, if such Interest Period is
longer than 90 days (in the case of a Set Rate Loan) or three months (in
the case of a Eurodollar Loan or a LIBOR Market Loan), at 90-day or
three-month intervals, respectively, following the first day of such
Interest Period, and (iii) in the case of any Loan, upon the payment or
prepayment thereof or the Conversion of such Loan to a Loan of another Type
(but only on the principal amount so paid, prepaid or Converted), except
that interest payable at the Post-Default Rate shall be payable from time
to time on demand of the Bank for whose account such interest is payable.
Promptly after the determination of any interest rate provided for herein
or any change therein, the Administrative Agent shall give notice thereof
to the Banks to which such interest is payable and to the applicable
Borrower.
Section 4. Payments; Pro Rata Treatment; Computations; Etc.
4.01 Payments.
(a) Payment to the Administrative Agent. Except to the extent
otherwise provided herein, all payments of principal, interest and other
amounts to be made by any Borrower under this Agreement shall be made in
Dollars, in immediately available funds, without deduction, set-off or
counterclaim, to the Administrative Agent at an account designated by the
Administrative Agent to the Borrowers, not later than 1:00 p.m. New York
time on the date on which such payment shall become due (each such payment
made after such time on such due date to be deemed to have been made on the
next succeeding Business Day).
(b) Designation of Payee. Each Borrower shall, at the time of
making each payment under this Agreement for account of any Bank, specify
to the Administrative Agent (which shall so notify the intended
recipient(s) thereof) the Loans or other amounts payable by such Borrower
hereunder to which such payment is to be applied (and in the event that
such Borrower fails to so specify, or if an Event of Default has occurred
and is continuing, the Administrative Agent may distribute such payment to
the Banks for application in such manner as the Majority Banks, subject to
Section 4.02 hereof, may determine to be appropriate).
(c) Payment of Banks. Each payment received by the Administrative
Agent under this Agreement for account of any Bank shall be paid by the
Administrative Agent promptly to such Bank, in immediately available funds,
for account of such Bank's Applicable
364-Day Credit Agreement
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Lending Office for the Loan or other obligation in respect of which such
payment is made.
(d) Due Date. If the due date of any payment under this Agreement
would otherwise fall on a day that is not a Business Day, such date shall
be extended to the next succeeding Business Day, and interest shall be
payable on any principal so extended for the period of such extension.
4.02 Pro Rata Treatment. Except to the extent otherwise provided
herein: (a) each borrowing of Syndicated Loans under Section 2.01 hereof
shall be made from the Banks, each payment of facility fee under Section
2.05 hereof shall be made for account of the Banks, and each termination or
reduction of the amount of the Commitments under Section 2.04 hereof shall
be applied to the respective Commitments of the Banks, pro rata according
to the amounts of their respective Commitments; (b) the making, Conversion
and Continuation of Syndicated Loans of a particular Type (other than
Conversions provided for by Section 5.04 hereof) shall be made pro rata
among the Banks according to the amounts of their respective Commitments
(in the case of making of Loans) or their respective Loans (in the case of
Conversions and Continuations of Loans), and the then current Interest
Period for each Loan of such Type shall be coterminous; (c) each payment or
prepayment of principal of Syndicated Loans by a Borrower shall be made for
account of the Banks pro rata in accordance with the respective unpaid
principal amounts of the Syndicated Loans held by them; and (d) each
payment of interest on Syndicated Loans by a Borrower shall be made for
account of the Banks pro rata in accordance with the amounts of interest on
such Loans then due and payable to the respective Banks.
4.03 Computations. Interest on Money Market Loans and Eurodollar
Loans and facility fee shall be computed on the basis of a year of 360 days
and actual days elapsed (including the first day but excluding the last
day) occurring in the period for which payable and interest on Base Rate
Loans shall be computed on the basis of a year of 365 or 366 days, as the
case may be, and actual days elapsed (including the first day but excluding
the last day) occurring in the period for which payable. Notwithstanding
the foregoing, for each day that the Base Rate is calculated by reference
to the Federal Funds Rate, interest on Base Rate Loans shall be computed on
the basis of a year of 360 days and actual days elapsed.
4.04 Minimum Amounts. Except for Conversions or prepayments made
pursuant to Section 5.04 hereof, each borrowing, Conversion and partial
prepayment of principal of Loans shall be in an aggregate amount at least
equal to $5,000,000 or in integral multiples of $1,000,000 in excess
thereof (borrowings, Conversions or prepayments of or into Loans of
different Types or, in the case of Eurodollar Loans, having different
Interest Periods at the same time hereunder to be deemed separate
borrowings, Conversions and prepayments for purposes of the foregoing, one
for each Type or Interest Period). Anything in this Agreement to the
contrary notwithstanding, the aggregate principal amount of Eurodollar
Loans having the same Interest Period shall be in an amount at least equal
to $5,000,000 or in integral multiples of $1,000,000 in excess thereof and,
if any Eurodollar Loans would otherwise be in a lesser principal amount for
364-Day Credit Agreement
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any period, such Loans shall be Base Rate Loans during such period.
4.05 Certain Notices. Except as otherwise provided in Section
2.03 hereof with respect to Money Market Loans, notices to the
Administrative Agent by the Company of terminations or reductions of the
Commitments, and by any Borrower of borrowings, Conversions, Continuations
and optional prepayments of Loans, of Types of Loans and of the duration of
Interest Periods, shall be irrevocable and shall be effective only if
received by the Administrative Agent not later than 11:00 a.m. New York
time on the number of Business Days prior to the date of the relevant
termination, reduction, borrowing, Conversion, Continuation or prepayment
or the first day of such Interest Period specified below:
Number of
Business
Notice Days Prior
Termination or reduction
of Commitments 3
Borrowing or prepayment of,
or Conversions into,
Base Rate Loans same day
Borrowing or prepayment of,
Conversions into, Continuations
as, or duration of Interest
Period for, Eurodollar Loans 3
Each such notice of termination or reduction shall specify the amount of
the Commitments to be terminated or reduced. Each such notice of borrowing,
Conversion, Continuation or optional prepayment shall specify the Loans to
be borrowed, Converted, Continued or prepaid and the amount (subject to
Section 4.04 hereof) and Type of each Loan to be borrowed, Converted,
Continued or prepaid (and, in the case of a Conversion, the Type of Loan to
result from such Conversion) and the date of borrowing, Conversion,
Continuation or optional prepayment (which shall be a Business Day). Each
such notice of the duration of an Interest Period shall specify the Loans
to which such Interest Period is to relate. The Administrative Agent shall
promptly notify the Banks of the contents of each such notice. In the event
that a Borrower fails to select the Type of Loan, or the duration of any
Interest Period for any Fixed Rate Loan, within the time period and
otherwise as provided in this Section 4.05, such Loan (if outstanding as a
Fixed Rate Loan) will be automatically Converted into a Base Rate Loan on
the last day of the then current Interest Period for such Loan or (if
outstanding as a Base Rate Loan) will remain as, or (if not then
outstanding) will be made as, a Base Rate Loan.
364-Day Credit Agreement
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4.06 Non-Receipt of Funds by the Administrative Agent. Unless the
Administrative Agent shall have been notified by a Bank or a Borrower (each
a "Payor") prior to the date on which the Payor is to make payment to the
Administrative Agent of (in the case of a Bank) the proceeds of a Loan to
be made by such Bank hereunder or (in the case of a Borrower) a payment to
the Administrative Agent for account of one or more of the Banks hereunder
(such payment being herein called the "Required Payment"), which notice
shall be effective upon receipt, that the Payor does not intend to make the
Required Payment to the Administrative Agent, the Administrative Agent may
assume that the Required Payment has been made and may, in reliance upon
such assumption (but shall not be required to), make the amount thereof
available to the intended recipient(s) on such date; and, if the Payor has
not in fact made the Required Payment to the Administrative Agent, the
recipient(s) of such payment shall, on demand, repay to the Administrative
Agent the amount so made available together with interest thereon in
respect of each day during the period commencing on the date (the "Advance
Date") such amount was so made available by the Administrative Agent until
the date the Administrative Agent recovers such amount at a rate per annum
equal to the Federal Funds Rate for such day and, if such recipient(s)
shall fail promptly to make such payment, the Administrative Agent shall be
entitled to recover such amount, on demand, from the Payor, together with
interest as aforesaid, provided that if the recipient(s) shall fail to
return, and the Payor shall fail to make, the Required Payment to the
Administrative Agent within three Business Days of the Advance Date, then,
retroactively to the Advance Date, the Payor and the recipient(s) shall
each be obligated to pay interest on the Required Payment as follows:
(i) if the Required Payment shall represent a payment to be made
by a Borrower to the Banks, such Borrower and the recipient(s) shall
each be obligated retroactively to the Advance Date to pay interest in
respect of the Required Payment at the Post-Default Rate (and, in case
the recipient(s) shall return the Required Payment to the
Administrative Agent, without limiting the obligation of such Borrower
under Section 3.02 hereof to pay interest to such recipient(s) at the
Post-Default Rate in respect of the Required Payment); and
(ii) if the Required Payment shall represent proceeds of a Loan
to be made by the Banks to a Borrower, the Payor and such Borrower
shall each be obligated retroactively to the Advance Date to pay
interest in respect of the Required Payment at the rate of interest
provided for such Required Payment pursuant to Section 3.02 hereof
(and, in case such Borrower shall return the Required Payment to the
Administrative Agent, without limiting any claim such Borrower may
have against the Payor in respect of the Required Payment).
4.07 Sharing of Payments, Etc.
(a) Offset. Each Borrower agrees that, if a Default hereunder
shall have occurred and is continuing, then in addition to (and without
limitation of) any right of set-off, banker's
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- 30 -
lien or counterclaim a Bank may otherwise have, each Bank shall be
entitled, at its option, to offset balances held by it for account of such
Borrower at any of its offices, in Dollars or in any other currency,
against any principal of or interest on any of such Bank's Loans to such
Borrower or any other amount payable to such Bank by such Borrower
hereunder, that is not paid when due (regardless of whether such balances
are then due to such Borrower), in which case it shall promptly notify such
Borrower and the Administrative Agent thereof, provided that such Bank's
failure to give such notice shall not affect the validity thereof.
(b) Sharing of Payments. If any Bank shall obtain from any
Borrower payment of any principal of or interest on any Loan of any Class
owing to it or payment of any other amount under this Agreement through the
exercise of any right of set-off, banker's lien or counterclaim or similar
right or otherwise (other than from the Administrative Agent as provided
herein), and, as a result of such payment, such Bank shall have received a
greater percentage of the principal of or interest on the Loans of such
Class or such other amounts then due hereunder by such Borrower to such
Bank than the percentage received by any other Bank, it shall promptly
purchase from such other Banks participations in (or, if and to the extent
specified by such Bank, direct interests in) the Loans of such Class or
such other amounts, respectively, owing to such other Banks (or in interest
due thereon, as the case may be) in such amounts, and make such other
adjustments from time to time as shall be equitable, to the end that all
the Banks shall share the benefit of such excess payment (net of any
expenses that may be incurred by such Bank in obtaining or preserving such
excess payment) pro rata in accordance with the unpaid principal of and/or
interest on the Loans of such Class or such other amounts, respectively,
owing to each of the Banks. To such end all the Banks shall make
appropriate adjustments among themselves (by the resale of participations
sold or otherwise) if such payment is rescinded or must otherwise be
restored.
(c) Indirect Holders. Each Borrower agrees that, if a Default
hereunder shall have occurred and is continuing, then any Bank so
purchasing such a participation (or direct interest) may exercise all
rights of set-off, banker's lien, counterclaim or similar rights with
respect to such participation as fully as if such Bank were a direct holder
of Loans or other amounts (as the case may be) owing to such Bank in the
amount of such participation.
(d) Other Indebtedness. Nothing contained herein shall require
any Bank to exercise any such right or shall affect the right of any Bank
to exercise, and retain the benefits of exercising, any such right with
respect to any other indebtedness or obligation of any Borrower. If, under
any applicable bankruptcy, insolvency or other similar law, any Bank
receives a secured claim in lieu of a set-off to which this Section 4.07
applies, such Bank shall, to the extent practicable, exercise its rights in
respect of such secured claim in a manner consistent with the rights of the
Banks entitled under this Section 4.07 to share in the benefits of any
recovery on such secured claim.
Section 5. Yield Protection, Etc.
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5.01 Additional Costs.
(a) Additional Costs. Each Borrower shall pay directly to each
Bank from time to time such amounts as such Bank may reasonably determine
to be necessary to compensate such Bank for any costs that such Bank
determines are attributable to its making or maintaining of any Fixed Rate
Loans or its obligation to make any Fixed Rate Loans to such Borrower
hereunder, or any reduction in any amount receivable by such Bank hereunder
in respect of any of such Loans or such obligation (such increases in costs
and reductions in amounts receivable being herein called "Additional
Costs"), resulting from any Regulatory Change that:
(i) changes the basis of taxation of any amounts payable to such
Bank under this Agreement in respect of any of such Loans (other than
taxes imposed on or measured by the overall net income of such Bank or
of its Applicable Lending Office for any of such Loans by the
jurisdiction in which such Bank has its principal office or such
Applicable Lending Office); or
(ii) imposes or modifies any reserve, special deposit or similar
requirements (other than the Reserve Requirement utilized in the
determination of the Fixed Base Rate for such Loan) relating to any
extensions of credit or other assets of, or any deposits with or other
liabilities of, such Bank (including, without limitation, any of such
Loans or any deposits referred to in the definition of "Fixed Base
Rate" in Section 1.01 hereof), or any commitment of such Bank
(including, without limitation, the Commitment of such Bank
hereunder); or
(iii) imposes any other condition affecting this Agreement (or
any of such extensions of credit or liabilities) or its Commitment.
If any Bank requests compensation from a Borrower under this Section
5.01(a), the Company may, by notice to such Bank (with a copy to the
Administrative Agent), suspend the obligation of such Bank thereafter to
make or Continue Loans of the Type with respect to which such compensation
is requested, or to Convert Loans of any other Type into Loans of such
Type, until the Regulatory Change giving rise to such request ceases to be
in effect (in which case the provisions of Section 5.04 hereof shall be
applicable), provided that such suspension shall not affect the right of
such Bank to receive the compensation so requested.
(b) Regulatory Changes. Without limiting the effect of the
provisions of paragraph (a) of this Section 5.01, in the event that, by
reason of any Regulatory Change, any Bank either (i) incurs Additional
Costs based on or measured by the excess above a specified level of the
amount of a category of deposits or other liabilities of such Bank that
includes deposits by reference to which the interest rate on Eurodollar
Loans is determined as provided in this Agreement or a category of
extensions of credit or other assets of such Bank that includes Eurodollar
Loans or (ii) becomes subject to restrictions on the amount of such a
category of
364-Day Credit Agreement
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liabilities or assets that it may hold, then, if such Bank so elects by
notice to the Borrowers (with a copy to the Administrative Agent), the
obligation of such Bank to make or Continue, or to Convert Loans of any
other Type into, Loans of such Type hereunder shall be suspended until such
Regulatory Change ceases to be in effect (in which case the provisions of
Section 5.04 hereof shall be applicable).
(c) Compensation. Without limiting the effect of the foregoing
provisions of this Section 5.01 (but without duplication), each Borrower
shall pay directly to each Bank from time to time on request such amounts
as such Bank may reasonably determine to be necessary to compensate such
Bank (or, without duplication, the bank holding company of which such Bank
is a subsidiary) for any costs that it determines are attributable to the
maintenance by such Bank (or any Applicable Lending Office or such bank
holding company), pursuant to any law or regulation or any interpretation,
directive or request (whether or not having the force of law and whether or
not failure to comply therewith would be unlawful) of any court or
governmental or monetary authority (i) following any Regulatory Change or
(ii) implementing any risk-based capital guideline or other requirement
(whether or not having the force of law and whether or not the failure to
comply therewith would be unlawful) hereafter issued by any government or
governmental or supervisory authority implementing at the national level
the Basle Accord (including, without limitation, the Final Risk-Based
Capital Guidelines of the Board of Governors of the Federal Reserve System
(12 C.F.R. Part 208, Appendix A; ▇▇ ▇.▇.▇. ▇▇▇▇ ▇▇▇, ▇▇▇▇▇▇▇▇ ▇) and the
Final Risk-Based Capital Guidelines of the Office of the Comptroller of the
Currency (12 C.F.R. Part 3, Appendix A)), of capital in respect of its
Commitment or Loans (such compensation to include, without limitation, an
amount equal to any reduction of the rate of return on assets or equity of
such Bank (or any Applicable Lending Office or such bank holding company)
to a level below that which such Bank (or any Applicable Lending Office or
such bank holding company) could have achieved but for such law,
regulation, interpretation, directive or request). For purposes of this
Section 5.01(c), "Basle Accord" shall mean the proposals for risk-based
capital framework described by the Basle Committee on Banking Regulations
and Supervisory Practices in its paper entitled "International Convergence
of Capital Measurement and Capital Standards" dated July 1988, as amended,
modified and supplemented and in effect from time to time or any
replacement thereof.
(d) Notification. Each Bank shall notify the Borrowers of any
event occurring after the date of this Agreement entitling such Bank to
compensation under paragraph (a) or (c) of this Section 5.01 as promptly as
practicable, but in any event within 45 days, after such Bank obtains
actual knowledge thereof; provided that (i) if any Bank fails to give such
notice within 45 days after it obtains actual knowledge of such an event,
such Bank shall, with respect to compensation payable pursuant to this
Section 5.01 in respect of any costs resulting from such event, be entitled
to payment under this Section 5.01 only for costs incurred from and after
the date 45 days prior to the date that such Bank does give such notice and
(ii) each Bank will designate a different Applicable Lending Office for the
Loans of such Bank affected by such event if such designation will avoid
the need for, or reduce the amount of, such compensation
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and will not, in the sole opinion of such Bank, be disadvantageous to such
Bank, except that such Bank shall have no obligation to designate an
Applicable Lending Office located in the United States of America. Each
Bank will furnish to the relevant Borrower a certificate setting forth in
reasonable detail the basis and amount of each request by such Bank for
compensation under paragraph (a) or (c) of this Section 5.01.
Determinations and allocations by any Bank for purposes of this Section
5.01 of the effect of any Regulatory Change pursuant to paragraph (a) or
(b) of this Section 5.01, or of the effect of capital maintained pursuant
to paragraph (c) of this Section 5.01, on its costs or rate of return of
maintaining Loans or its obligation to make Loans, or on amounts receivable
by it in respect of Loans, and of the amounts required to compensate such
Bank under this Section 5.01, shall be conclusive, provided that such
determinations and allocations are made on a reasonable basis.
(e) Eurodollar Loans. Without limiting the effect of the
foregoing, each Borrower shall pay to each Bank on the last day of each
Interest Period for each Syndicated Loan made by such Bank to such Borrower
so long as such Bank is maintaining reserves against "Eurocurrency
liabilities" under Regulation D (or, unless the provisions of paragraph (b)
above are applicable, so long as such Bank is, by reason of any Regulatory
Change, maintaining reserves against any other category of liabilities
which includes deposits by reference to which the interest rate on
Eurodollar Loans is determined as provided in this Agreement or against any
category of extensions of credit or other assets of such Bank which
includes any Eurodollar Loans) an additional amount (determined by such
Bank and notified to such Borrower by such Bank with a copy to the
Administrative Agent) equal to the product of the following for each
Eurodollar Loan for each day during such Interest Period:
(i) the principal amount of such Eurodollar Loan outstanding on
such day; and
(ii) the remainder of (x) a fraction the numerator of which is
the rate (expressed as a decimal) at which interest accrues on such
Eurodollar Loan for such Interest Period as provided in this Agreement
(less the Applicable Margin) and the denominator of which is one minus
the effective rate (expressed as a decimal) at which such reserve
requirements are imposed on such Bank on such day minus (y) such
numerator; and
(iii) 1/360.
(f) LIBOR Money Market Loan. Without limiting the effect of the
foregoing, if, at any time after any Bank shall submit a Money Market Quote
that is the basis for the interest rate payable under this Agreement on any
LIBOR Market Loan made by such Bank, any Regulatory Change occurs that
results in such Bank maintaining reserves against any category of
liabilities which includes deposits by reference to which the interest rate
on LIBOR Market Loans is determined as provided in this Agreement or
against any category of extensions of credit or other assets of such Bank
which includes any LIBOR Market Loans, then such Borrower shall pay to such
Bank an additional amount (determined by such Bank and notified to
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such Borrower by such Bank with a copy to the Administrative Agent), for
each day during the Interest Period for the LIBOR Market Loan to which such
Money Market Quote relates that occurs on or after the date of such
Regulatory Change, equal to the product of the following:
(i) the principal amount of such LIBOR Market Loan outstanding on
such day; and
(ii) the remainder of (x) a fraction the numerator of which is
the rate (expressed as a decimal) at which interest accrues on such
LIBOR Market Loan for such Interest Period as provided in this
Agreement (without giving effect to the LIBO Margin) and the
denominator of which is one minus the effective rate (expressed as a
decimal) at which such reserve requirements are imposed on such Bank
on such day minus (y) such numerator; and
(iii) 1/360.
Each Borrower shall pay any additional amount required to be paid pursuant
to this Section 5.01(f) in respect of any LIBOR Market Loan of such
Borrower on the last day of the Interest Period for such LIBOR Market Loan.
5.02 Limitation on Types of Loans. Anything herein to the
contrary notwithstanding, if, on or prior to the determination of any Fixed
Base Rate for any Interest Period:
(a) the Administrative Agent determines, which determination
shall be conclusive, that quotations of interest rates for the
relevant deposits referred to in the definition of "Fixed Base Rate"
in Section 1.01 hereof are not being provided in the relevant amounts
or for the relevant maturities for purposes of determining rates of
interest for either Type of Fixed Rate Loans as provided herein; or
(b) the Majority Banks determine (or any Bank that has
outstanding a Money Market Quote with respect to a LIBOR Market Loan
determines), which determination shall be conclusive, and notify (or
notifies, as the case may be) the Administrative Agent that the
relevant rates of interest referred to in the definition of "Fixed
Base Rate" in Section 1.01 hereof upon the basis of which the rate of
interest for Eurodollar Loans (or LIBOR Market Loans, as the case may
be) for such Interest Period is to be determined are not likely
adequately to cover the cost to such Banks (or to such quoting Bank)
of making or maintaining such Type of Loans for such Interest Period;
then the Administrative Agent shall give the Borrowers and each Bank prompt
notice thereof and, so long as such condition remains in effect, the Banks
(or such quoting Bank) shall be under no obligation to make additional
Loans of such Type, to Continue Loans of such Type or to
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Convert Loans of any other Type into Loans of such Type, and each Borrower
shall, on the last day(s) of the then current Interest Period(s) for the
outstanding Loans of such Type, either prepay such Loans or Convert such
Loans into another Type of Loan in accordance with Section 2.09 hereof.
5.03 Illegality. Notwithstanding any other provision of this
Agreement, in the event that it becomes unlawful for any Bank or its
Applicable Lending Office to honor its obligation to make or maintain
Eurodollar Loans or LIBOR Market Loans hereunder to any Borrower, then such
Bank shall promptly notify such Borrower thereof (with a copy to the
Administrative Agent) and such Bank's obligation to such Borrower to make
or Continue, or to Convert Loans of any other Type into, Eurodollar Loans
shall be suspended until such time as such Bank may again make and maintain
Eurodollar Loans to such Borrower (in which case the provisions of Section
5.04 hereof shall be applicable), and such Bank shall no longer be
obligated to make any LIBOR Market Loan to such Borrower that it has
offered to make.
5.04 Treatment of Affected Loans. If the obligation of any Bank
to make a particular Type of Fixed Rate Loans or to Continue, or to Convert
Loans of any other Type into, Loans of a particular Type shall be suspended
pursuant to Section 5.01 or 5.03 hereof (Loans of such Type being herein
called "Affected Loans" and such Type being herein called the "Affected
Type"), such Bank's Affected Loans shall be automatically Converted into
Base Rate Loans on the last day(s) of the then current Interest Period(s)
for Affected Loans (or, in the case of a Conversion as a result of Section
5.01(b) or 5.03 hereof, on such earlier date as such Bank may specify to
the respective Borrower of such Affected Loans with a copy to the
Administrative Agent) and, unless and until such Bank gives notice as
provided below that the circumstances specified in Section 5.01 or 5.03
hereof that gave rise to such Conversion no longer exist:
(a) to the extent that such Bank's Affected Loans have been so
Converted, all payments and prepayments of principal that would
otherwise be applied to such Bank's Affected Loans shall be applied
instead to its Base Rate Loans;
(b) all Loans that would otherwise be made or Continued by such
Bank as Loans of the Affected Type shall be made or Continued instead
as Base Rate Loans, and all Loans of such Bank that would otherwise be
Converted into Loans of the Affected Type shall be Converted instead
into (or shall remain as) Base Rate Loans; and
(c) if Loans of other Banks of the Affected Type are subsequently
Converted into Loans of another Type (other than Base Rate Loans),
such Bank's Base Rate Loans shall be automatically Converted on the
Conversion date for such Loans of the other Banks into Loans of such
other Type to the extent necessary so that, after giving effect
thereto, all Loans held by such Bank and the Banks whose Loans are so
Converted are held pro rata (as to principal amounts, Types and
Interest Periods) in accordance with their respective Commitments.
364-Day Credit Agreement
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If such Bank gives notice to the affected Borrower(s) with a copy to the
Administrative Agent that the circumstances specified in Section 5.01 or
5.03 hereof that gave rise to the Conversion of such Bank's Affected Loans
pursuant to this Section 5.04 no longer exist (which such Bank agrees to do
promptly upon such circumstances ceasing to exist) at a time when Loans of
the Affected Type made by other Banks are outstanding, such Bank's Base
Rate Loans shall be automatically Converted, on the first day(s) of the
next succeeding Interest Period(s) for such outstanding Loans of the
Affected Type, to the extent necessary so that, after giving effect
thereto, all Loans held by the Banks holding Loans of the Affected Type and
by such Bank are held pro rata (as to principal amounts, Types and Interest
Periods) in accordance with their respective Commitments.
5.05 Compensation. Each Borrower shall pay to the Administrative
Agent for account of each Bank, upon the request of such Bank through the
Administrative Agent, such amount or amounts as shall be sufficient (in the
reasonable opinion of such Bank) to compensate it for any loss, cost or
expense that such Bank determines is attributable to:
(a) any payment, prepayment or Conversion of a Fixed Rate Loan or
a Set Rate Loan made by such Bank to such Borrower for any reason
(including, without limitation, the acceleration of the Loans pursuant
to Section 10 hereof) on a date other than the last day of the
Interest Period for such Loan;
(b) any failure by such Borrower for any reason (including,
without limitation, the failure of any of the conditions precedent
specified in Section 7 hereof to be satisfied) to borrow a Fixed Rate
Loan or a Set Rate Loan (with respect to which, in the case of a Money
Market Loan, such Borrower has accepted a Money Market Quote) from
such Bank on the date for such borrowing specified in the relevant
notice of borrowing given pursuant to Section 2.02 or 2.03(b) hereof;
or
(c) any failure for any reason (including, without limitation, as
provided in Section 5.02 or 5.03 hereof) of a Loan of such Bank to
such Borrower to be Continued as or Converted into a Fixed Rate Loan
on the date for such Continuation or Conversion specified in the
relevant notice given pursuant to Section 2.09 hereof.
Without limiting the effect of the preceding sentence, such compensation
shall include an amount equal to the excess, if any, of (i) the amount of
interest that otherwise would have accrued on the principal amount so paid,
prepaid or Converted or not borrowed, Continued or Converted for the period
from the date of such payment, prepayment, Conversion or failure to borrow,
Continue or Convert to the last day of the then current Interest Period for
such Loan (or, in the case of a failure to borrow, Continue or Convert, the
Interest Period for such Loan that would have commenced on the date
specified for such borrowing, Continuation or Conversion) at the applicable
rate of interest for such Loan provided for herein over (ii) the amount of
interest that otherwise would have accrued on such principal amount at a
rate per annum equal to the interest
364-Day Credit Agreement
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component of the amount such Bank would have bid in the London interbank
market (if such Loan is a Eurodollar Loan or a LIBOR Market Loan) or the
United States secondary certificate of deposit market (if such Loan is a
Set Rate Loan) for Dollar deposits of leading banks in amounts comparable
to such principal amount and with maturities comparable to such period (as
reasonably determined by such Bank), or if such Bank shall cease to make
such bids, the equivalent rate, as reasonably determined by such Bank,
derived from Page 3750 of the Dow ▇▇▇▇▇ Markets Telerate Service or other
publicly available source as described in the definition of "Fixed Base
Rate" in Section 1.01.
5.06 U.S. Taxes.
(a) Non U.S. Persons. Each Borrower agrees to pay to each Bank
that is not a U.S. Person such additional amounts as are necessary in order
that the net payment of any amount due by such Borrower to such non-U.S.
Person hereunder after deduction for or withholding in respect of any U.S.
Tax imposed with respect to such payment (or in lieu thereof, payment of
such U.S. Tax by such non-U.S. Person), will not be less than the amount
stated herein to be then due and payable, provided that the foregoing
obligation to pay such additional amounts shall not apply:
(i) to any payment to a Bank hereunder unless such Bank is, on
the date hereof (or on the date it becomes a Bank as provided in
Section 12.06(b) hereof) and on the date of any change in the
Applicable Lending Office of such Bank, either entitled to submit a
Form 1001 (relating to such Bank and entitling it to a complete
exemption from withholding on all interest to be received by it
hereunder in respect of the Loans) or Form 4224 (relating to all
interest to be received by such Bank hereunder in respect of the
Loans), or
(ii) to any U.S. Tax imposed solely by reason of the failure by
such non-U.S. Person to comply with applicable certification,
information, documentation or other reporting requirements concerning
the nationality, residence, identity or connections with the United
States of America of such non-U.S. Person if such compliance is
required by statute or regulation of the United States of America as a
precondition to relief or exemption from such U.S. Tax.
For the purposes of this Section 5.06(a), (w) "Form 1001" shall mean Form
1001 (Ownership, Exemption, or Reduced Rate Certificate) of the Department
of the Treasury of the United States of America, (x) "Form 4224" shall mean
Form 4224 (Exemption from Withholding of Tax on Income Effectively
Connected with the Conduct of a Trade or Business in the United States) of
the Department of the Treasury of the United States of America (or in
relation to either such Form such successor and related forms as may from
time to time be adopted by the relevant taxing authorities of the United
States of America to document a claim to which such Form relates), (y)
"U.S. Person" shall mean a citizen, national or resident of the United
States of
364-Day Credit Agreement
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America, a corporation, partnership or other entity created or organized in
or under any laws of the United States of America, or any estate or trust
that is subject to Federal income taxation regardless of the source of its
income and (z) "U.S. Taxes" shall mean any present or future tax,
assessment or other charge or levy imposed by or on behalf of the United
States of America or any taxing authority thereof or therein.
(b) Evidence or Deduction or Withholding. Within 30 days after
paying any amount to the Administrative Agent or any Bank from which it is
required by law to make any deduction or withholding, and within 30 days
after it is required by law to remit such deduction or withholding to any
relevant taxing or other authority, the applicable Borrower shall deliver
to the Administrative Agent for delivery to such non-U.S. Person evidence
satisfactory to such Person of such deduction, withholding or payment (as
the case may be).
5.07 Foreign Taxes.
(a) Payments Free and Clear of Foreign Taxes. All payments on
account of the principal of and interest on the Loans, fees and all other
amounts payable hereunder by any Borrower organized in any jurisdiction
other than the United States of America or a State thereof (any such
Borrower being herein called a "Foreign Borrower") to or for the account of
the Administrative Agent or any Bank, including, without limitation,
amounts payable under paragraph (b) of this Section 5.07, shall be made
free and clear of and without reduction or liability for Foreign Taxes.
Each Foreign Borrower will pay all Foreign Taxes applicable to it, without
charge to or offset against any amount due to the Administrative Agent or
any Bank, prior to the date on which penalties attach thereto, except for
any such Foreign Taxes (other than Foreign Taxes imposed on or in respect
of any amount payable by such Foreign Borrower hereunder) the payment of
which is being contested in good faith and by proper proceedings and
against which adequate reserves are being maintained, so long as no claim
for such Foreign Taxes is made on the Administrative Agent or any Bank.
(b) Indemnification for Foreign Taxes. Each Foreign Borrower
shall indemnify the Administrative Agent and each Bank against, and
reimburse the Administrative Agent and each Bank on demand for, any Foreign
Taxes applicable to it and any loss, liability, claim or expense, including
interest, penalties and legal fees, that the Administrative Agent or such
Bank may incur at any time arising out of or in connection with any failure
of such Foreign Borrower to make any payment of Foreign Taxes when due.
(c) Gross-Up for Foreign Taxes. In the event that a Foreign
Borrower is required by applicable law, decree or regulation to deduct or
withhold Foreign Taxes from any amounts payable on, under or in respect of
this Agreement or the Loans made to such Foreign Borrower, such Foreign
Borrower shall (to the fullest extent permitted by applicable law) promptly
pay the Person entitled to such amount such additional amounts as may be
required, after the deduction or withholding of Foreign Taxes, to enable
such Person to receive from such Foreign Borrower
364-Day Credit Agreement
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on the due date thereof, an amount equal to the full amount stated to be
payable to such Person under this Agreement. Each Bank shall provide to a
Foreign Borrower such forms or certificates as the Foreign Borrower may
reasonably request to establish such Bank's entitlement to an exemption
from or reduction of Foreign Taxes, but no Bank shall be required to
provide any form or certificate if it determines in its discretion that the
provision of such form or certificate could adversely affect it or it is
not legally entitled to provide such form or certificate.
(d) Tax Receipts, Etc. Each Foreign Borrower shall furnish to the
Administrative Agent, upon the request of any Bank (through the
Administrative Agent), together with sufficient certified copies for
distribution to each Bank requesting the same (identifying the Banks that
have so requested), original official tax receipts (or certified copies
thereof) in respect of each payment of Foreign Taxes required under this
Section 5.07 made by such Foreign Borrower or such other information,
documents and receipts that the Administrative Agent or such Bank may
reasonably require to establish to its satisfaction that full and timely
payment has been made of all Foreign Taxes required to be paid under this
Section 5.07 within 30 days after the date such payment is made.
Section 6. Guarantee by the Company.
6.01 The Guarantee. The Company hereby guarantees to each Bank
and the Administrative Agent and their respective successors and assigns
the prompt payment in full when due (whether at stated maturity, by
acceleration or otherwise) of the principal of and interest on the Loans
made by the Banks to each Subsidiary Borrower, and all other amounts from
time to time owing to the Banks or the Administrative Agent by each
Subsidiary Borrower under this Agreement, in each case strictly in
accordance with the terms hereof (such obligations being herein
collectively called the "Guaranteed Obligations"). The Company hereby
further agrees that if any Subsidiary Borrower shall fail to pay in full
when due (whether at stated maturity, by acceleration or otherwise) any of
the Guaranteed Obligations, the Company will promptly pay the same, without
any demand or notice whatsoever, and that in the case of any extension of
time of payment or renewal of any of the Guaranteed Obligations, the same
will be promptly paid in full when due (whether at extended maturity, by
acceleration or otherwise) in accordance with the terms of such extension
or renewal.
6.02 Obligations Unconditional. The obligations of the Company
under Section 6.01 hereof are absolute and unconditional, irrespective of
the value, genuineness, validity, regularity or enforceability of the
obligations of any Subsidiary Borrower under this Agreement or any other
agreement or instrument referred to herein, or any substitution, release or
exchange of any other guarantee of or security for any of the Guaranteed
Obligations, and, to the fullest extent permitted by applicable law,
irrespective of any other circumstance whatsoever that might otherwise
constitute a legal or equitable discharge or defense of a surety or
guarantor, it being the intent of this Section 6.02 that the obligations of
the Company hereunder shall be absolute and unconditional under any and all
circumstances. Without limiting the generality of
364-Day Credit Agreement
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the foregoing, it is agreed that the occurrence of any one or more of the
following shall not alter or impair the liability of the Company hereunder,
which shall remain absolute and unconditional as described above:
(i) at any time or from time to time, without notice to the
Company, the time for any performance of or compliance with any of the
Guaranteed Obligations shall be extended, or such performance or
compliance shall be waived;
(ii) any of the acts mentioned in any of the provisions of this
Agreement or any other agreement or instrument referred to herein
shall be done or omitted;
(iii) the maturity of any of the Guaranteed Obligations shall be
accelerated, or any of the Guaranteed Obligations shall be modified,
supplemented or amended in any respect, or any right under this
Agreement or any other agreement or instrument referred to herein
shall be waived or any other guarantee of any of the Guaranteed
Obligations or any security therefor shall be released or exchanged in
whole or in part or otherwise dealt with; or
(iv) any lien or security interest granted to, or in favor of,
the Administrative Agent or any Bank or Banks as security for any of
the Guaranteed Obligations shall fail to be perfected.
The Company hereby expressly waives diligence, presentment, demand of
payment, protest and all notices whatsoever, and any requirement that the
Administrative Agent or any Bank exhaust any right, power or remedy or
proceed against any Subsidiary Borrower under this Agreement or any other
agreement or instrument referred to herein, or against any other Person
under any other guarantee of, or security for, any of the Guaranteed
Obligations.
6.03 Reinstatement. The obligations of the Company under this
Section 6 shall be automatically reinstated if and to the extent that for
any reason any payment by or on behalf of any Subsidiary Borrower in
respect of the Guaranteed Obligations is rescinded or must be otherwise
restored by Bank, the Administrative Agent or any other holder of any of
the Guaranteed Obligations, whether as a result of any proceedings in
bankruptcy or reorganization or otherwise, and the Company agrees that it
will indemnify the Administrative Agent and each Bank on demand for all
reasonable costs and expenses (including, without limitation, fees of
counsel) incurred by the Administrative Agent or such Bank in connection
with such rescission or restoration, including any such costs and expenses
incurred in defending against any claim alleging that such payment
constituted a preference, fraudulent transfer or similar payment under any
bankruptcy, insolvency or similar law.
6.04 Subrogation. The Company hereby agrees that, until the
payment and satisfaction in full of all Guaranteed Obligations and the
expiration and termination of the
364-Day Credit Agreement
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Commitments of the Banks under this Agreement, it shall not exercise any
right or remedy arising by reason of any performance by it of its guarantee
in Section 6.01 hereof, whether by subrogation or otherwise, against any
Subsidiary Borrower or any security for any of the Guaranteed Obligations.
6.05 Remedies. The Company agrees that, as between the Company
and the Banks, the obligations of the Subsidiary Borrowers under this
Agreement may be declared to be forthwith due and payable as provided in
Section 10 hereof (and shall be deemed to have become automatically due and
payable in the circumstances provided in said Section 10) for purposes of
Section 6.01 hereof notwithstanding any stay, injunction or other
prohibition preventing such declaration (or such obligations from becoming
automatically due and payable) as against the Subsidiary Borrowers and
that, in the event of such declaration (or such obligations being deemed to
have become automatically due and payable), such obligations (whether or
not due and payable by the Subsidiary Borrowers) shall forthwith become due
and payable by the Subsidiary Borrowers for purposes of said Section 6.01.
6.06 Instrument for the Payment of Money. The Company hereby
acknowledges that the guarantee in this Section 6 constitutes an instrument
for the payment of money, and consents and agrees that any Bank or the
Administrative Agent, at its sole option, in the event of a dispute by the
Company in the payment of any moneys due hereunder, shall have the right to
bring motion-action under New York CPLR Section 3213.
6.07 Continuing Guarantee. The guarantee in this Section 6 is a
continuing guarantee, and shall apply to all Guaranteed Obligations
whenever arising.
Section 7. Conditions Precedent.
7.01 Initial Loan. The obligation of any Bank to make its initial
Loan hereunder is subject to the receipt, on or before September 30, 1998,
by the Administrative Agent (with sufficient copies for each Bank that
requests a copy) of the following documents, each of which shall be
satisfactory to the Administrative Agent (and to the extent specified
below, to each Bank) in form and substance:
(a) Corporate Documents. Certified copies of the charter and
by-laws of the Company and of all corporate authority for the Company
(including, without limitation, board of director resolutions and
evidence of the incumbency, including specimen signatures, of
officers) with respect to the execution, delivery and performance of
this Agreement and the Loans to be made to the Company hereunder (and
the Administrative Agent and each Bank may conclusively rely on such
certificate until it receives notice in writing from the Company to
the contrary).
(b) Officer's Certificate. A certificate of a financial officer
of the Company, to
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the effect set forth in the first sentence of Section 7.03 hereof.
(c) Consummation of the Arrangement. Evidence that (i) a Final
Order (as such term is defined in the Arrangement Agreement) shall
have been issued by the Ontario Court of Justice (General Division) in
a form in all material respects identical to that which shall have
been previously approved by the Administrative Agent, (ii) neither
Avenor nor any of its Subsidiaries shall be in default in any material
respects of any of the provisions of the Arrangement Agreement, or of
such Final Order, (iii) except for the deposit with the Depositary
under the Arrangement Agreement of the funds necessary to consummate
the Arrangement and except for the exchange of shares certificates by
the holders of shares of stock of Avenor, the Arrangement shall have
been duly consummated in all material respects in accordance with the
terms of the Arrangement Agreement as originally in effect (other than
any modifications or supplements thereto that shall be satisfactory to
the Majority Banks), (iv) no condition to the consummation of the
Arrangement thereunder shall have been waived, amended, supplemented
or otherwise modified in any material respect without the prior
written consent of the Majority Banks and (v) the Majority Banks shall
be satisfied with all determinations by the Company as to the
satisfaction of conditions set forth in the Arrangement Agreement, and
the Administrative Agent shall have received a certificate of a
financial officer of the Company to the effect of the foregoing
clauses (i) through (v) and to the effect that attached thereto are
true and complete copies of each document and other agreement or
instruments delivered in connection with the consummation of the
Arrangement.
(d) Opinion of Counsel to the Company. An opinion of ▇▇▇▇▇ ▇.
▇▇▇▇▇, Esq., Vice President, Secretary and Assistant General Counsel
of the Company, substantially in the form of Exhibit B hereto and
covering such other matters as the Administrative Agent or any Bank
may reasonably request (and the Company hereby instructs such counsel
to deliver such opinion to the Banks and the Administrative Agent).
(e) Opinion of Special New York Counsel to Chase. An opinion of
Milbank, Tweed, ▇▇▇▇▇▇ & ▇▇▇▇▇▇, special New York counsel to Chase,
substantially in the form of Exhibit C hereto (and Chase hereby
instructs such counsel to deliver such opinion to the Banks).
(f) Termination of the Existing Credit Agreement. Evidence that
all commitments of the lenders to extend credit under the Existing
Credit Agreement shall have been terminated, and all principal of and
interest on the loans thereunder, and all fees and any other amounts
payable by the Company thereunder, shall have been paid in full.
(g) Other Documents. Such other documents as the Administrative
Agent or any Bank or special New York counsel to Chase may reasonably
request.
364-Day Credit Agreement
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The obligation of any Bank to make its initial extension of credit
hereunder is also subject to the payment or delivery by the Company of such
fees and other consideration as the Company shall have agreed to pay or
deliver to any Bank or an affiliate thereof or the Administrative Agent in
connection herewith.
7.02 Initial Loans to Subsidiary Borrowers. The obligation of any
Bank to make its initial Loan to any Subsidiary Borrower hereunder is
subject to the receipt by the Administrative Agent (with sufficient copies
for each Bank that requests a copy) of the following documents, each of
which shall be satisfactory to the Administrative Agent (and to the extent
specified below, to each Bank) in form and substance:
(a) Subsidiary Borrower Designation Letter. A completed
Subsidiary Borrower Designation Letter for such Subsidiary Borrower,
substantially in the form of Exhibit G hereto, executed by the Company
and such Subsidiary Borrower, it being understood that the Majority
Banks shall have first consented to the respective Subsidiary of the
Company being so designated as a "Subsidiary Borrower" hereunder
(provided that it is understood that, effective upon the consummation
of the Arrangement, each of Bowater Canadian Holdings Incorporated,
Bowater Canada Inc. and Avenor shall be satisfactory for these
purposes).
(b) Corporate Documents. Certified copies of the charter and
by-laws of such Subsidiary Borrower and of all corporate authority for
such Subsidiary Borrower (including, without limitation, board of
director resolutions and evidence of the incumbency, including
specimen signatures, of officers) with respect to the execution and
delivery by such Subsidiary Borrower of such Subsidiary Borrower
Designation Letter, and the performance of this Agreement and the
Loans to be made to such Subsidiary Borrower hereunder (and the
Administrative Agent and each Bank may conclusively rely on such
certificate until it receives notice in writing from such Subsidiary
Borrower to the contrary).
(c) Opinion of Counsel to the Company. An opinion with respect to
such Subsidiary Borrower from counsel satisfactory to the
Administrative Agent, and covering the matters set forth in the form
of opinion of counsel for the Company set forth in Exhibit B hereto
and such other matters as the Administrative Agent or any Bank may
reasonably request (and such Subsidiary Borrower hereby instructs such
counsel to deliver such opinion to the Banks and the Administrative
Agent).
(d) Process Agent Acceptance. To the extent that such Subsidiary
Borrower is a Foreign Borrower, an acceptance from the "Process Agent"
under and as defined in such Subsidiary Borrower Designation Letter,
duly executed and delivered by such Process Agent.
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(e) Other Documents. Such other documents as the Administrative
Agent or any Bank or special New York counsel to Chase may reasonably
request.
7.03 Initial and Subsequent Loans. The obligation of any Bank to
make any Loan (including any Money Market Loan and such Bank's initial
Syndicated Loan) to any Borrower upon the occasion of each borrowing
hereunder is subject to the further conditions precedent that, both
immediately prior to the making of such Loan and also after giving effect
thereto and to the intended use thereof:
(a) no Default shall have occurred and be continuing; and
(b) the representations and warranties made by the Company in
Section 8.01 hereof shall be true and complete on and as of the date
of the making of such Loan with the same force and effect as if made
on and as of such date (or, if any such representation or warranty is
expressly stated to have been made as of a specific date, as of such
specific date) and, in addition, in the case of a Loan to any
Subsidiary Borrower, the representations and warranties made by such
Subsidiary Borrower in its Subsidiary Borrower Designation Letter
shall be true and complete on and as of the date of the making of such
Loan with the same force and effect as if made on and as of such date.
Each notice of borrowing hereunder shall constitute a certification by the
Company (and, in the case of a Loan to a Subsidiary Borrower, by such
Subsidiary Borrower) to the effect set forth in the preceding sentence
(both as of the date of such notice and, unless the Company (or applicable
Subsidiary Borrower) otherwise notifies the Administrative Agent prior to
the date of such borrowing, as of the date of such borrowing).
Section 8. Representations and Warranties. The Company represents
and warrants to the Administrative Agent and the Banks that:
8.01 Corporate Existence. Each of the Company and its
Subsidiaries: (a) is a corporation, partnership or other entity duly
organized, validly existing and in good standing under the laws of the
jurisdiction of its organization; (b) has all requisite corporate or other
power, and has all material governmental licenses, authorizations, consents
and approvals necessary to own its assets and carry on its business as now
being or as proposed to be conducted; and (c) is qualified to do business
and is in good standing in all jurisdictions in which the nature of the
business conducted by it makes such qualification necessary and where
failure so to qualify could have a Material Adverse Effect.
8.02 Financial Condition; Year 2000 Issues.
(a) Financial Statements. The Company has heretofore furnished to
each of the Banks the following financial statements:
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(i) the audited consolidated balance sheets of the Company and
its Consolidated Subsidiaries as at December 31, 1996 and December 31,
1997, respectively, and the related audited consolidated statements of
operations, capital accounts and cash flows of the Company and its
Consolidated Subsidiaries for the fiscal years ended on said
respective dates, with the opinion thereon of KPMG Peat Marwick LLP;
(ii) the unaudited consolidated balance sheets of the Company and
its Consolidated Subsidiaries as at March 31, 1998 and the related
unaudited consolidated statements of operations, capital accounts and
cash flows of the Company and its Consolidated Subsidiaries for the
three month period ended on said date; and
(iii) a pro forma condensed combined unaudited balance sheet of
the Company and its Consolidated Subsidiaries as at March 31, 1998,
and the related pro forma condensed combined unaudited statements of
operations, capital accounts and cash flows of the Company and its
Consolidated Subsidiaries for the fiscal year ended on said date, as
set forth in the Joint Proxy Circular, certified by a financial
officer of the Company and prepared under the assumption that the
Arrangement, and the borrowings contemplated hereunder had each been
consummated on January 1, 1997, and demonstrating the solvency of the
Company and its Consolidated Subsidiaries on a pro forma basis after
giving effect to the Arrangement.
Such financial statements are complete and correct and fairly present the
respective consolidated actual or pro forma (as the case may be) financial
condition of the Company and its Consolidated Subsidiaries, as at said date
and the actual or pro forma (as applicable) consolidated results of their
operations for the fiscal year ended on said date, all in accordance with
generally accepted accounting principles and practices of the United States
of America applied on a consistent basis; and neither the Company nor any
of its Subsidiaries had on the date thereof any material contingent
liabilities, liabilities for taxes, unusual forward or long-term
commitments or unrealized or anticipated losses from any unfavorable
commitments, except as referred to or reflected or provided for in said
balance sheets as at said date. There has been no material adverse change
in the Property, business, operations, financial condition, liabilities or
capitalization of the Company and its Consolidated Subsidiaries taken as a
whole since the last day of the fiscal year of the Company as to which
financial statements have most recently been delivered pursuant to Section
9.01(b) hereof (or, if no such financial statements have yet been
delivered, since December 31, 1997).
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(b) Year 2000 Issues. Since 1990, the Company has reengineered
its major internally-developed software programs. During this effort, the
Company examined potential problems arising from the inability of certain
application software programs to recognize the year 2000. A formal review
of all internally-developed software was completed in 1997. No major
problems were encountered. In addition, all major third-party licensed
application software programs have been reviewed and are either compliant
or have released a compliant version to which the Company will migrate in
1998. The costs associated with these projects are currently expected to be
less than $1,000,000. The Company continues to review all other
manufacturing equipment systems. Although the results of this review are
not yet complete, the Company does not expect the costs associated with
issues raised by this review to have a Material Adverse Effect.
Avenor has completed an inventory, and has assessed the risk of
each of its systems (including process control computer systems used in its
manufacturing facilities), with respect to potential year 2000 issues. The
aggregate costs associated with this project remaining to be expended are
currently expected to be less than Cdn. $16,000,000.
The Company does not believe that the failure to remedy any
remaining unresolved year 2000 issues prior to January 1, 2000 will result
in a Material Adverse Effect.
8.03 Litigation. Except as disclosed to the Banks in Schedule IV
hereto, there are no legal or arbitral proceedings, or any proceedings by
or before any governmental or regulatory authority or agency, or any labor
disputes, now pending or (to the knowledge of the Company) threatened
against the Company or any of its Subsidiaries (or Avenor or any of its
Subsidiaries) that, if adversely determined, would have a Material Adverse
Effect. Without limiting the generality of the foregoing, there are no
legal or arbitral proceedings, or any proceedings by or before any
governmental or regulatory authority or agency, now pending or (to the
knowledge of the Company) threatened against the Company or any of its
Subsidiaries (or Avenor or any of its Subsidiaries) affecting or relating
to the Arrangement (except in connection with the Arrangement, each of
which shall have been completed with all appeal periods expired without any
appeal having been taken, prior to the consummation of the Arrangement).
8.04 No Breach. None of the execution and delivery of this
Agreement, the consummation of the transactions herein contemplated or
compliance with the terms and provisions hereof will conflict with or
result in a breach of, or require any consent under, the charter or by-laws
of the Company, or any applicable law or regulation in any material
respect, or any order, writ, injunction or decree of any court or
governmental authority or agency, or any agreement or instrument in any
material respect to which the Company or any of its Subsidiaries is a party
or by which any of them or any of their Property is bound or to which any
of them is subject, or constitute a default under any such agreement or
instrument, or result in the creation or imposition of any Lien upon any
Property of the Company or any of its Subsidiaries pursuant
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to the terms of any such agreement or instrument.
8.05 Action. The Company has all necessary corporate power,
authority and legal right to execute, deliver and perform its obligations
under this Agreement and to borrow under this Agreement; the execution,
delivery and performance by the Company of this Agreement and the
borrowings by the Company under this Agreement have been duly authorized by
all necessary corporate action on its part (including, without limitation,
any required shareholder approvals); and this Agreement has been duly and
validly executed and delivered by the Company and constitutes, its legal,
valid and binding obligation, enforceable against the Company in accordance
with its terms, except as such enforceability may be limited by (a)
bankruptcy, insolvency, reorganization, moratorium or similar laws of
general applicability affecting the enforcement of creditors' rights and
(b) the application of general principles of equity (regardless of whether
such enforceability is considered in a proceeding in equity or at law).
8.06 Approvals. No authorizations, approvals or consents of, and
no filings or registrations with, any governmental or regulatory authority
or agency, or any securities exchange, are necessary for the execution,
delivery or performance by the Company of this Agreement or for the
legality, validity or enforceability hereof or thereof, or for any
borrowing by the Company under this Agreement (except in connection with
the Arrangement, each of which shall have been obtained and be in full
force and effect prior to the consummation thereof, with all waiting
periods having expired).
8.07 Use of Credit. Neither the Company nor any of its
Subsidiaries is engaged principally, or as one of its important activities,
in the business of extending credit for the purpose, whether immediate,
incidental or ultimate, of buying or carrying Margin Stock, and no part of
the proceeds of any extension of credit hereunder will be used to buy or
carry any Margin Stock. Not more than 25% of the value of the Properties of
the Company and its Subsidiaries subject to the provisions of Section 9.05
or Section 9.06 hereof is represented by Property constituting Margin
Stock.
8.08 ERISA; Canadian Plans. Each Plan, and, to the knowledge of
the Company, each Multiemployer Plan, is in compliance in all material
respects with, and has been administered in all material respects in
compliance with, the applicable provisions of ERISA, the Code and any other
Federal or state law, and no event or condition has occurred and is
continuing as to which the Company would be under an obligation to furnish
a report to the Banks under Section 9.01(e) hereof. Each Canadian Plan is
and has been in all material respects, established, qualified, registered,
administered and invested in compliance with all applicable federal and
provincial laws (including, without limitation, the Income Tax Act (Canada)
and the Supplemental Pension Plans Act (Quebec)) and any applicable
collective bargaining agreements, and no event or condition has occurred
and is continuing as to which the Company would be under an obligation to
furnish a report to the Banks under Section 9.01(f) hereof. All material
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obligations of the Company and its Subsidiaries under each Canadian Plan,
including contribution obligations, have been satisfied and there are no
outstanding defaults or violations in respect thereof.
8.09 Taxes. The Company and its domestic Subsidiaries (within the
meaning of Section 7701(a)(4) of the Code) are members of an affiliated
group of corporations filing consolidated returns for Federal income tax
purposes, of which the Company is the "common parent" (within the meaning
of Section 1504 of the Code) of such group. The Company and its
Subsidiaries have filed all Federal income tax returns and all other
material tax returns that are required to be filed by them and have paid
all taxes due pursuant to such returns or pursuant to any assessment
received by the Company or any of its Subsidiaries. The charges, accruals
and reserves on the books of the Company and its Subsidiaries in respect of
taxes and other governmental charges are, in the opinion of the Company,
adequate.
8.10 Investment Company Act. Neither the Company nor any of its
Subsidiaries is an "investment company", or a company "controlled" by an
"investment company", within the meaning of the Investment Company Act of
1940, as amended.
8.11 Public Utility Holding Company Act. Neither the Company nor
any of its Subsidiaries is a "holding company", or an "affiliate" of a
"holding company" or a "subsidiary company" of a "holding company", within
the meaning of the Public Utility Holding Company Act of 1935, as amended.
8.12 Material Agreements and Liens.
(a) Material Agreements. Part A of Schedule II hereto is a
complete and correct list, as of the date of this Agreement, of each
credit agreement, loan agreement, indenture, guarantee, letter of
credit or other arrangement providing for or otherwise relating to any
Indebtedness or any extension of credit (or commitment for any
extension of credit) to, or guarantee by, the Company or any of its
Subsidiaries (or by Avenor or any of its Subsidiaries) the aggregate
principal or face amount of which equals or exceeds (or may equal or
exceed) $50,000,000, and the aggregate principal or face amount
outstanding or that may become outstanding under each such arrangement
is correctly described in Part A of said Schedule II.
On the date hereof, the maximum aggregate principal or face
amount of all Indebtedness and all other extensions of credit outstanding
(or that may become outstanding) under each credit agreement, loan
agreement, indenture, guarantee, letter of credit or other arrangement to
which the Company or any of its Subsidiaries (or Avenor or any of its
Subsidiaries) is a party, or guarantee by the Company or any of its
Subsidiaries (or by Avenor or any of its Subsidiaries), that is not listed
in Part A of Schedule II hereto does not exceed an amount equal to
$25,000,000.
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(b) Material Liens. Part B of Schedule II hereto is a complete
and correct list, as of the date of this Agreement, of each Lien securing
Indebtedness of any Person the aggregate principal or face amount of which
equals or exceeds (or may equal or exceed) $50,000,000 and covering any
Property of the Company or any of its Subsidiaries (or Avenor or any of its
Subsidiaries), and the aggregate Indebtedness secured (or which may be
secured) by each such Lien and the Property covered by each such Lien is
correctly described in Part B of said Schedule II.
8.13 Environmental Matters. Each of the Company and its
Subsidiaries has obtained all environmental, health and safety permits,
licenses and other authorizations required under all Environmental Laws to
carry on its business as now being or as proposed to be conducted, except
to the extent failure to have any such permit, license or authorization
would not have a Material Adverse Effect. Each of such permits, licenses
and authorizations is in full force and effect and each of the Company and
its Subsidiaries is in compliance with the terms and conditions thereof,
and is also in compliance with all other limitations, restrictions,
conditions, standards, prohibitions, requirements, obligations, schedules
and timetables contained in any applicable Environmental Law or in any
regulation, code, plan, order, decree, judgment, injunction, notice or
demand letter issued, entered, promulgated or approved thereunder, except
to the extent failure to comply therewith would not have a Material Adverse
Effect.
8.14 Subsidiaries, Etc. Set forth in Part A of Schedule III
hereto is a complete and correct list, as of the date of this Agreement, of
all of the Subsidiaries of the Company (or of Avenor) together with, for
each such Subsidiary, (i) the jurisdiction of organization of such
Subsidiary, (ii) each Person holding ownership interests in such Subsidiary
and (iii) the nature of the ownership interests held by each such Person
and the percentage of ownership of such Subsidiary represented by such
ownership interests. Except as disclosed in Part A of Schedule III hereto,
(x) each of the Company and its Subsidiaries (and Avenor and its
Subsidiaries) owns, free and clear of Liens, and has the unencumbered right
to vote, all outstanding ownership interests in each Person shown to be
held by it in said Part A or Schedule III hereto, (y) all of the issued and
outstanding capital stock of each such Person organized as a corporation is
validly issued, fully paid and nonassessable and (z) there are no
outstanding Equity Rights with respect to such Person.
Except as disclosed in Part B of Schedule III hereto (and except
for restrictions and conditions imposed by law), none of Avenor or any of
its Subsidiaries is, on the date hereof (or on the date on which the
Arrangement shall be consummated), subject to any indenture, agreement,
instrument or other arrangement that (a) prohibits, restricts or imposes
any condition upon the ability of Avenor or any or its Subsidiaries 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 (b) that will restrict in any material respect the ability of
the Company and its Subsidiaries from integrating their business and
operations with that of Avenor and its Subsidiaries.
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After giving effect to the consummation of the Arrangement,
Avenor and its Subsidiaries will be Consolidated Subsidiaries hereunder.
8.15 True and Complete Disclosure. The information, reports,
financial statements, exhibits and schedules furnished in writing by or on
behalf of the Company to the Administrative Agent or any Bank (including,
without limitation, the Joint Proxy Circular) in connection with the
negotiation, preparation or delivery of this Agreement or included herein
or delivered pursuant hereto, when taken as a whole do not contain any
untrue statement of material fact or omit to state any material fact
necessary to make the statements herein or therein, in light of the
circumstances under which they were made, not misleading. All written
information furnished after the date hereof by the Company and its
Subsidiaries to the Administrative Agent and the Banks in connection with
this Agreement and the transactions contemplated hereby will be true,
complete and accurate in every material respect, or (in the case of
projections) based on reasonable estimates, on the date as of which such
information is stated or certified. There is no fact known to the Company
that could have a Material Adverse Effect that has not been disclosed
herein or in a report, financial statement, exhibit, schedule, disclosure
letter or other writing furnished to the Banks for use in connection with
the transactions contemplated hereby.
8.16 Arrangement Agreement; Joint Proxy Circular; Etc. The
Company has heretofore delivered to the Administrative Agent a true and
complete copy of the Joint Proxy Circular and the Arrangement Agreement (in
each case including any modifications or supplements thereto, or any
waivers thereunder) as in effect on the date hereof.
Section 9. Covenants of the Company. The Company covenants and
agrees with the Banks and the Administrative Agent that, so long as any
Commitment or any Loan by any Borrower is outstanding and until payment in
full of all amounts payable by each Borrower hereunder:
9.01 Financial Statements Etc. The Company shall deliver to the
Administrative Agent (with sufficient copies for each Bank, which the
Administrative Agent shall promptly furnish to such Bank):
(a) as soon as available and in any event within 60 days after
the end of each of the quarterly fiscal periods of each fiscal year of
the Company, consolidated statements of operations, capital accounts
and cash flows of the Company and its Consolidated Subsidiaries for
such period and for the period from the beginning of the respective
fiscal year to the end of such period, and the related consolidated
balance sheet of the Company and its Consolidated Subsidiaries as at
the end of such period, setting forth in each case in comparative form
the corresponding consolidated figures for the corresponding period in
the preceding fiscal year;
(b) as soon as available and in any event within 120 days after
the end of each
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fiscal year of the Company, consolidated statements of operations,
capital accounts and cash flows of the Company and its Consolidated
Subsidiaries for such fiscal year and the related consolidated balance
sheet of the Company and its Consolidated Subsidiaries as at the end
of such fiscal year, setting forth in each case in comparative form
the corresponding consolidated figures for the preceding fiscal year,
and accompanied by an opinion thereon of independent certified public
accountants of recognized national standing, which opinion shall state
that said consolidated financial statements fairly present the
consolidated financial condition and results of operations of the
Company and its Consolidated Subsidiaries as at the end of, and for,
such fiscal year in accordance with generally accepted accounting
principles of the United States of America;
(c) promptly upon their becoming available, copies of all
registration statements (other than on Form S-8) and regular periodic
reports on Forms 10-K, 10-Q and 8-K that the Company or any of its
Subsidiaries shall have filed with the Securities and Exchange
Commission (or any governmental agency substituted therefor), or any
similar periodic reports filed with the comparable agency in Canada;
(d) promptly upon the mailing thereof to the shareholders of the
Company generally, copies of all financial statements, reports and
proxy statements so mailed;
(e) as soon as possible, and in any event within ten days after
the Company knows or has reason to believe that any of the events or
conditions specified below with respect to any Plan or Multiemployer
Plan has occurred or exists, a statement signed by a financial officer
of the Company setting forth details respecting such event or
condition and the action, if any, that the Company or its ERISA
Affiliate proposes to take with respect thereto (and a copy of any
report or notice required to be filed with or given to PBGC by the
Company or an ERISA Affiliate with respect to such event or
condition):
(i) any reportable event, as defined in Section 4043(b) of
ERISA and the regulations issued thereunder, with respect to a
Plan, as to which PBGC has not by regulation waived the
requirement of Section 4043(a) of ERISA that it be notified
within 30 days of the occurrence of such event (provided that a
failure to meet the minimum funding standard of Section 412 of
the Code or Section 302 of ERISA, including, without limitation,
the failure to make on or before its due date a required
installment under Section 412(m) of the Code or Section 302(e) of
ERISA, shall be a reportable event regardless of the issuance of
any waivers in accordance with Section 412(d) of the Code); and
any request for a waiver under Section 412(d) of the Code for any
Plan;
(ii) the distribution under Section 4041 of ERISA of a
notice of intent to terminate any Plan or any action taken by the
Company or an ERISA Affiliate to terminate any Plan;
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(iii) the institution by PBGC of proceedings under Section
4042 of ERISA for the termination of, or the appointment of a
trustee to administer, any Plan, or the receipt by the Company or
any ERISA Affiliate of a notice from a Multiemployer Plan that
such action has been taken by PBGC with respect to such
Multiemployer Plan;
(iv) the complete or partial withdrawal from a Multiemployer
Plan by the Company or any ERISA Affiliate that results in
liability under Section 4201 or 4204 of ERISA (including the
obligation to satisfy secondary liability as a result of a
purchaser default) or the receipt by the Company or any ERISA
Affiliate of notice from a Multiemployer Plan that it is in
reorganization or insolvency pursuant to Section 4241 or 4245 of
ERISA or that it intends to terminate or has terminated under
Section 4041A of ERISA;
(v) the institution of a proceeding by a fiduciary of any
Multiemployer Plan against the Company or any ERISA Affiliate to
enforce Section 515 of ERISA, which proceeding is not dismissed
within 30 days; and
(vi) the adoption of an amendment to any Plan that, pursuant
to Section 401(a)(29) of the Code or Section 307 of ERISA, would
result in the loss of tax-exempt status of the trust of which
such Plan is a part if the Company or an ERISA Affiliate fails to
timely provide security to the Plan in accordance with the
provisions of said Sections;
(f) as soon as possible, and in any event within ten days after
the Company or any of its Subsidiaries knows or has reason to believe
that any of the events or conditions specified below with respect to
any Canadian Plan has occurred or exists, a statement signed by a
financial officer of the Company setting forth details respecting such
event or condition and the action, if any, that the Company or its
Subsidiary proposes to take with respect thereto (and a copy of any
notice required to be filed with or given to any governmental
authority in Canada by the Company or any Subsidiary with respect to
such event or condition):
(i) the Company or any of its subsidiaries declares, or any
governmental authority orders, or proposes to order, a full or
partial termination or wind up of a Canadian Plan;
(ii) a failure by the Company or any Subsidiary to make a
contribution to a Canadian Plan in accordance with the terms
thereof, any collective bargaining agreement or under applicable
federal or provincial laws, which failure has not been remedied
within 30 days after the Company or the Subsidiary is notified of
such event and which failure could result in a Material Adverse
Effect;
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(iii) the adoption of any amendment to any Canadian Plan
that would result in a loss of tax exempt status of the Plan or
the trust or other funding medium maintained in respect of such
Plan, or that increases the funding obligations under any
Canadian Plan, which increase could reasonably be expected to
result in a Material Adverse Effect;
(iv) the institution of any proceeding, action, suit or
claim)(other than routine claims for payment of benefits)
involving any Canadian Plan or its assets; or
(v) any event occurring or condition existing with respect
to any Canadian Plan that has resulted or could result in any
Canadian Plan having its registration revoked or refused or being
placed under the administration of any governmental or regulatory
authority (or their representatives).
(g) promptly after the Company knows or has reason to believe
that any Default has occurred, a notice of such Default stating that
such notice is a "Notice of Default" and describing the same in
reasonable detail and, together with such notice or as soon thereafter
as possible, a description of the action that the Company has taken or
proposes to take with respect thereto; and
(h) from time to time such other information regarding the
financial condition, operations, business or prospects of the Company
or any of its Subsidiaries (including, without limitation, any
accountants letters delivered to management, and any Plan or
Multiemployer Plan and any reports or other information required to be
filed under ERISA) as any Bank or the Administrative Agent may
reasonably request.
The Company will furnish to the Administrative Agent (with sufficient
copies for each Bank, which the Administrative Agent shall promptly furnish
to such Bank), at the time it furnishes each set of financial statements
pursuant to paragraph (a) or (b) above, a certificate of a financial
officer of the Company (i) to the effect that no Default has occurred and
is continuing (or, if any Default has occurred and is continuing,
describing the same in reasonable detail and describing the action that the
Company has taken or proposes to take with respect thereto) and (ii)
setting forth in reasonable detail the computations necessary to determine
whether the Company is in compliance with Sections 9.07 and 9.08 hereof as
of the end of the respective quarterly fiscal period or fiscal year.
9.02 Litigation. The Company will promptly give to the
Administrative Agent (which shall promptly furnish the same to each Bank)
notice of all legal or arbitral proceedings, and of all proceedings by or
before any governmental or regulatory authority or agency, and of all labor
disputes, and any material development in respect of such legal or other
proceedings or
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disputes, affecting the Company or any of its Subsidiaries, except
proceedings or disputes that, if adversely determined, would not have a
Material Adverse Effect. Without limiting the generality of the foregoing,
the Company will give to the Administrative Agent (which shall promptly
furnish the same to each Bank) notice of the assertion of any environmental
claim by any Person against, or with respect to the activities of, the
Company or any of its Subsidiaries and notice of any alleged violation of
or non-compliance with any Environmental Laws or any permits, licenses or
authorizations, other than any environmental claim or alleged violation
that, if adversely determined, would not have a Material Adverse Effect.
9.03 Existence, Etc. The Company will, and will cause each of its
Subsidiaries to:
(a) preserve and maintain its legal existence and all of its
material rights, privileges, licenses and franchises (provided that
nothing in this Section 9.03 shall prohibit any transaction expressly
permitted under Section 9.05 hereof);
(b) comply with the requirements of all applicable laws, rules,
regulations and orders of governmental or regulatory authorities
(including, without limitation, any of the foregoing relating to
environmental matters) if failure to comply with such requirements
could have a Material Adverse Effect;
(c) pay and discharge all taxes, assessments and governmental
charges or levies imposed on it or on its income or profits or on any
of its Property prior to the date on which penalties attach thereto,
except for any such tax, assessment, charge or levy the payment of
which is being contested in good faith and by proper proceedings and
against which adequate reserves are being maintained in accordance
with generally accepted accounting principles of the United States of
America;
(d) maintain all of its Properties used or useful in its business
in good working order and condition, ordinary wear and tear excepted;
(e) keep adequate records and books of account, in which complete
entries will be made in accordance with generally accepted accounting
principles of the United States of America consistently applied; and
(f) permit representatives of any Bank or the Administrative
Agent, during normal business hours, to examine, copy and make
extracts from its books and records, to inspect any of its Properties,
and to discuss its business and affairs with its officers, all to the
extent reasonably requested by such Bank or the Administrative Agent
(as the case may be).
9.04 Insurance. The Company will, and will cause each of its
Subsidiaries to,
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keep insured by financially sound and reputable insurers all Property of a
character usually insured by corporations engaged in the same or similar
business similarly situated against loss or damage of the kinds and in the
amounts customarily insured against by such corporations and carry such
other insurance as is usually carried by such corporations.
9.05 Prohibition of Fundamental Changes. The Company will not,
nor will it permit any of its Subsidiaries to, enter into any transaction
of merger or consolidation or amalgamation, or liquidate, wind up or
dissolve itself (or suffer any liquidation or dissolution). The Company
will not, nor will it permit any of its Subsidiaries to, convey, sell,
lease, transfer or otherwise dispose of, in one transaction or a series of
transactions, all or a substantial part of its business or Property,
whether now owned or hereafter acquired (including, without limitation,
receivables and leasehold interests, but excluding any inventory or other
Property sold or disposed of in the ordinary course of business and on
ordinary business terms). Notwithstanding the foregoing provisions of this
Section 9.05:
(a) the Company may consummate the Arrangement as contemplated by
Section 7.01(c) hereof;
(b) any Subsidiary of the Company may be merged, amalgamated or
consolidated with or into: (i) the Company if the Company shall be the
continuing or surviving corporation or (ii) any other such Subsidiary;
provided that if any such transaction shall be between a Subsidiary
and a Wholly Owned Subsidiary, the Wholly Owned Subsidiary (or in the
case of an amalgamation, a new Wholly Owned Subsidiary formed thereby)
shall be the continuing or surviving corporation;
(c) any Subsidiary of the Company may sell, lease, transfer or
otherwise dispose of any or all of its Property (upon voluntary
liquidation or otherwise) to the Company or a Wholly Owned Subsidiary
of the Company;
(d) the Company or any Subsidiary of the Company may merge or
consolidate (and any such Subsidiary may amalgamate) with any other
Person if (i) in the case of a merger or consolidation of the Company,
the Company is the surviving corporation and, in any other case, the
surviving corporation is a Wholly-Owned Subsidiary of the Company and
(ii) after giving effect thereto no Default would exist;
(e) any Wholly Owned Subsidiary of the Company or Avenor may be
dissolved or liquidated, so long as any assets of such Wholly Owned
Subsidiary (after settlement of all claims against such Wholly Owned
Subsidiary) shall be transferred in such dissolution or liquidation to
the Company or Avenor or to another Wholly Owned Subsidiary of the
Company or Avenor; and
(f) in addition to the dispositions permitted pursuant to clauses
(b) through (e) of
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this Section 8.05, the Company or any Subsidiary of the Company may
sell or otherwise dispose of Property (including, without limitation,
by merger or consolidation) if, after giving effect to any such sale
or disposition, the book value of such Property, together with the
aggregate book value of the Property so sold or disposed of since
December 31, 1997 does not exceed 20% of Total Assets at the date of
(and before giving effect to) such sale or disposition, provided that
in any event the dispositions set forth in Schedule V hereto shall in
any event be permitted and shall not be included in the calculation of
aggregate dispositions otherwise permitted under the foregoing
provisions of this clause (f).
9.06 Limitation on Liens. The Company will not, nor will it
permit any of its Subsidiaries to, create, incur, assume or suffer to exist
any Lien upon any of its Property, whether now owned or hereafter acquired,
except:
(a) Liens in existence on the date hereof and listed in Part B of
Schedule II hereto;
(b) Liens imposed by any governmental authority for taxes,
assessments or charges not yet due or which are being contested in
good faith and by appropriate proceedings if adequate reserves with
respect thereto are maintained on the books of the Company or the
affected Subsidiaries, as the case may be, in accordance with GAAP;
(c) carriers', warehousemen's, mechanics', materialmen's,
repairmen's or other like Liens arising in the ordinary course of
business which are not overdue for a period of more than 30 days or
which are being contested in good faith and by appropriate proceedings
and Liens securing judgments but only to the extent for an amount and
for a period not resulting in an Event of Default under Section 10(i)
hereof;
(d) pledges or deposits under worker's compensation, unemployment
insurance and other social security legislation;
(e) deposits to secure the performance of bids, trade contracts
(other than for borrowed money), leases, statutory obligations, surety
and appeal bonds, performance bonds and other obligations of a like
nature incurred in the ordinary course of business;
(f) easements, rights-of-way, restrictions and other similar
encumbrances incurred in the ordinary course of business and
encumbrances consisting of zoning restrictions, easements, licenses,
restrictions on the use of Property or minor imperfections in title
thereto which, in the aggregate, are not material in amount, and which
do not in any case materially detract from the value of the Property
subject thereto or interfere with the ordinary conduct of the business
of the Company or any of its Subsidiaries;
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(g) Liens on Property of any corporation that becomes a
Subsidiary of the Company after the date of this Agreement; provided
that such Liens are in existence at the time such corporation becomes
a Subsidiary of the Company and were not created in anticipation
thereof;
(h) Liens upon real and/or tangible personal Property acquired
after the date hereof (by purchase, construction or otherwise) by the
Company or any of its Subsidiaries, each of which Liens either (A)
existed on such Property before the time of its acquisition and was
not created in anticipation thereof, or (B) was created solely for the
purpose of securing Indebtedness representing, or incurred to finance,
refinance or refund, the cost (including the cost of construction) of
such Property; provided that no such Lien shall extend to or cover any
Property of the Company or such Subsidiary other than the Property so
acquired and improvements thereon;
(i) Liens securing obligations of the Company or any of its
Subsidiaries incurred in conjunction with industrial revenue bonds or
pollution control bonds of any facilities used by the Company or any
of its Subsidiaries;
(j) additional Liens upon real and/or personal Property created
after the date hereof, provided that the aggregate outstanding
principal amount of Indebtedness secured by such Liens, together with
the aggregate principal amount of Indebtedness permitted under Section
9.11(f) hereof, shall not at any time exceed 10% of Total Assets at
such time; and
(k) any extension, renewal or replacement of the foregoing;
provided that the Liens permitted hereunder shall not be spread to
cover any additional Indebtedness or Property (other than a
substitution of like Property).
9.07 Consolidated Net Worth. The Company will not permit
Consolidated Net Worth at any time to be less than (a) $1,500,000,000 plus
(b) 50% of the consolidated net income of the Company and its Consolidated
Subsidiaries for each fiscal quarter of the Company from and including the
first fiscal quarter in 1998 to and including the fiscal quarter ending on
(or most recently ended prior to) such time; provided that, if there is a
consolidated net loss for any such fiscal quarter, consolidated net income
for such fiscal quarter shall, for the purposes of clause (b) of this
Section 9.07, be deemed to be zero.
9.08 Total Debt to Total Capital Ratio. The Company will not
permit the ratio of (a) Total Debt to (b) Total Capital to exceed 0.65 to 1
at any time during the period commencing on the date hereof through and
including March 30, 1999, and 0.60 to 1 at any time thereafter.
9.09 Transactions with Affiliates. Except as expressly permitted
by this Agreement, the Company will not, nor will it permit any of its
Subsidiaries to, directly or
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indirectly: (a) make any Investment in an Affiliate; (b) transfer, sell,
lease, assign or otherwise dispose of any Property to an Affiliate; (c)
merge into or consolidate with or purchase or acquire Property from an
Affiliate; or (d) enter into any other transaction directly or indirectly
with or for the benefit of an Affiliate (including, without limitation,
guarantees and assumptions of obligations of an Affiliate); provided that
(x) any Affiliate who is an individual may serve as a director, officer or
employee of the Company or any of its Subsidiaries and receive reasonable
compensation for his or her services in such capacity and (y) the Company
and its Subsidiaries may enter into transactions (other than extensions of
credit by the Company or any of its Subsidiaries to an Affiliate) so long
as the monetary or business consideration arising therefrom would be
substantially as advantageous to the Company and its Subsidiaries as the
monetary or business consideration which would obtain in a comparable
transaction with a Person not an Affiliate.
9.10 Use of Proceeds. The Company will use the proceeds of the
Loans hereunder to finance the Arrangement, to refinance existing
indebtedness of the Company, and to pay fees and expenses relating thereto,
and for the general corporate purposes of the Company and its subsidiaries;
provided that neither the Administrative Agent nor any Bank shall have any
responsibility as to the use of any of such proceeds.
9.11 Indebtedness. The Company will not permit any of its
Subsidiaries to, create, incur, assume or permit to exist any Indebtedness
(including any Indebtedness incurred pursuant to a sale or leaseback
transaction), except:
(a) Indebtedness of Subsidiaries of the Company (or of Avenor and
its Subsidiaries) existing on the date hereof and (to the extent
exceeding the minimum threshold requirements set forth in Section
8.12(a)) set forth in Part A of Schedule II hereto, any assumption or
Guarantee thereof by any other Subsidiary, and any extensions,
renewals and replacements thereof, so long as (i) the weighted average
life of the maturity of such Indebtedness as so extended, renewed or
refinanced, taken as a whole, is not materially different than such
weighted average life prior to such extension, renewal or refinancing,
(ii) any terms of subordination set forth in such Indebtedness are not
adversely affected thereby in any material respect and (iii) the terms
generally of such Indebtedness as so extended, renewed or refinanced
are not made more restrictive (from the standpoint of the Company) in
any material respect;
(b) Indebtedness of Subsidiary Borrowers hereunder;
(c) Indebtedness of any Subsidiary to the Company or any other
Subsidiary;
(d) Indebtedness of any Subsidiary as an account party in respect
of trade letters of credit;
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(e) Guarantees by Subsidiaries of Indebtedness of other
Subsidiaries; and
(f) other unsecured Indebtedness, provided that the aggregate
outstanding principal amount of such Indebtedness, together with the
aggregate amount of Indebtedness secured by Liens permitted under
Section 9.06(j) hereof, shall not at any time exceed 10% of Total
Assets at such time.
9.12 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 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 the foregoing shall not apply to (x) restrictions
and conditions imposed by law or by this Agreement, (y) restrictions and
conditions existing on the date hereof identified on Part A of Schedule II
(but shall apply to any extension or renewal of, or any amendment or
modification expanding the scope of, any such restriction or condition) and
(z) 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.
9.13 Limitation on Lines of Business. The Company will not enter
into any business, either directly or through any Subsidiary, to any
substantial extent other than those businesses in which the Company, Avenor
and their respective Subsidiaries are engaged on the date of this Agreement
and, in each case, activities directly related thereto or ancillary,
complementary or reasonably related thereto as reasonably determined by the
Company in its sole judgment.
Section 10. Events of Default. If one or more of the following
events (herein called "Events of Default") shall occur and be continuing:
(a) Any Borrower shall default in the payment when due (whether
at stated maturity or upon optional prepayment) of any principal of
any Loan payable by it hereunder, or shall default for three or more
Business Days in the payment when due (whether at stated maturity or
upon optional prepayment) of any interest on any Loan or any fee or
any other amount payable under this Agreement; or
(b) Any representation, warranty or certification made or deemed
made herein (or in any modification or supplement hereto) by the
Company, or by any Subsidiary Borrower in its Subsidiary Borrower
Designation Letter, or in any certificate furnished to any Bank or the
Administrative Agent pursuant to the provisions hereof, shall prove to
have been false or misleading as of the time made or deemed made or
furnished in any
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material respect; or
(c) The Company or any of its Subsidiaries 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; or
(d) any event or condition occurs that results in any Material
Indebtedness becoming due prior to its scheduled maturity or that
enables or permits (with or without the giving of notice, the lapse of
time or both) the holder or holders of any Material Indebtedness or
any trustee or agent on its or their behalf to cause any Material
Indebtedness to become due, or to require the prepayment, repurchase,
redemption or defeasance thereof, prior to its scheduled maturity;
provided that this clause (d) 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;
(e) The Company shall default in the performance of any of its
obligations under any of Sections 9.01(g), 9.05, 9.06, 9.07 or 9.08
hereof; or any Borrower shall default in the performance of any of its
other obligations in this Agreement and such default shall continue
unremedied for a period of 30 days after notice thereof to the
Borrowers by the Administrative Agent or any Bank (through the
Administrative Agent); or
(f) The Company or any of its Subsidiaries shall admit in writing
its inability to, or be generally unable to, pay its debts as such
debts become due; or
(g) The Company or any of its Subsidiaries shall (i) apply for or
consent to the appointment of, or the taking of possession by, a
receiver, custodian, trustee, examiner or liquidator of itself or of
all or a substantial part of its Property, (ii) make a general
assignment for the benefit of its creditors, (iii) commence a
voluntary case under the Bankruptcy Code, (iv) file a petition seeking
to take advantage of any other law relating to bankruptcy, insolvency,
reorganization, liquidation, dissolution, arrangement or winding-up,
or composition or readjustment of debts, (v) fail to controvert in a
timely and appropriate manner, or acquiesce in writing to, any
petition filed against it in an involuntary case under the Bankruptcy
Code, (vi) take any corporate action for the purpose of effecting any
of the foregoing or (vii) do the equivalent of any of the foregoing
under the laws of any non-U.S. jurisdiction (including, in the case of
Canada, the Bankruptcy and Insolvency Act (Canada), the Companies
Creditors Arrangement Act (Canada) or the Winding Up Act (Canada)); or
(h) A proceeding or case shall be commenced, without the
application or consent of the Company or any of its Subsidiaries, in
any court of competent jurisdiction, seeking (i) its reorganization,
liquidation, dissolution, arrangement or winding-up, or the
composition or readjustment of its debts, (ii) the appointment of a
receiver, custodian,
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trustee, examiner, liquidator or the like of the Company or such
Subsidiary or of all or any substantial part of its Property, or (iii)
similar relief in respect of the Company or such Subsidiary under any
law relating to bankruptcy, insolvency, reorganization, winding-up, or
composition or adjustment of debts, and such proceeding or case shall
continue undismissed for a period of 60 or more days or (iv) the
equivalent of any of the foregoing under any non-U.S. jurisdiction
(including, in the case of Canada, the Bankruptcy and Insolvency Act
(Canada), the Companies Creditors Arrangement Act (Canada) or the
Winding Up Act (Canada)); or an order, judgment or decree approving or
ordering any of the foregoing shall be entered against the Company or
such Subsidiary in an involuntary case under the Bankruptcy Code; or
(i) A final judgment or judgments for the payment of money in
excess of $10,000,000 in the aggregate (exclusive of judgment amounts
fully covered by insurance where the insurer has admitted liability in
respect of such judgment) or in excess of $50,000,000 in the aggregate
(regardless of insurance coverage) shall be rendered by one or more
courts, administrative tribunals or other bodies having jurisdiction
against the Company or any of its Subsidiaries and the same shall not
be discharged (or provision shall not be made for such discharge), or
a stay of execution thereof shall not be procured, within 30 days from
the date of entry thereof and the Company or the relevant Subsidiary
shall not, within said period of 30 days, or such longer period during
which execution of the same shall have been stayed, appeal therefrom
and cause the execution thereof to be stayed during such appeal; or
(j) An event or condition specified in Section 9.01(e) hereof
shall occur or exist with respect to any Plan or Multiemployer Plan
and, as a result of such event or condition, together with all other
such events or conditions, the Company or any ERISA Affiliate shall
incur or in the opinion of the Majority Banks shall be reasonably
likely to incur a liability to a Plan, a Multiemployer Plan or PBGC
(or any combination of the foregoing) which would constitute, in the
determination of the Majority Banks, a Material Adverse Effect; or
(k) A reasonable basis shall exist for the assertion against the
Company or any of its Subsidiaries of (or there shall have been
asserted against the Company or any of its Subsidiaries) claims or
liabilities, whether accrued, absolute or contingent, based on or
arising from the generation, storage, transport, handling or disposal
of hazardous materials (within the meaning of any Environmental Law)
by the Company or any of its Subsidiaries, or any predecessor in
interest of the Company or any of its Subsidiaries, or relating to any
site or facility owned, operated or leased by the Company or any of
its Subsidiaries, which claims or liabilities (insofar as they are
payable by the Company or any of its Subsidiaries but after deducting
any portion thereof which is reasonably expected to be paid by other
creditworthy Persons jointly and severally liable therefor), in the
judgment of the Majority Banks are reasonably likely to be determined
adversely to
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the Company or any of its Subsidiaries, and the amount thereof is,
singly or in the aggregate, reasonably likely to have a Material
Adverse Effect; or
(l) During any period of 25 consecutive calendar months, a
majority of the Board of Directors of the Company shall no longer be
composed of individuals (i) who were members of said Board on the
first day of such period, (ii) whose election or nomination to said
Board was approved by individuals referred to in clause (i) above
constituting at the time of such election or nomination at least a
majority of said Board or (iii) whose election or nomination to said
Board was approved by individuals referred to in clauses (i) and (ii)
above constituting at the time of such election or nomination at least
a majority of said Board;
THEREUPON: (1) in the case of an Event of Default other than one referred
to in clause (g) or (h) of this Section 10 with respect to any Borrower,
(A) the Administrative Agent may and, upon request of the Majority Banks,
shall, by notice to the Borrowers, terminate the Commitments and they shall
thereupon terminate, and (B) the Administrative Agent may and, upon request
of Banks having more than 50% of the aggregate unpaid principal amount of
the Loans shall, by notice to the Borrowers declare the principal amount
then outstanding of, and the accrued interest on, the Loans and all other
amounts payable by the Borrowers hereunder (including, without limitation,
any amounts payable under Section 5.05 hereof) to be forthwith due and
payable, whereupon such amounts shall be immediately due and payable
without presentment, demand, protest or other formalities of any kind, all
of which are hereby expressly waived by the Borrowers; and (2) in the case
of the occurrence of an Event of Default referred to in clause (g) or (h)
of this Section 10 with respect to any Borrower, the Commitments shall
automatically be terminated and the principal amount then outstanding of,
and the accrued interest on, the Loans and all other amounts payable by the
Borrowers hereunder (including, without limitation, any amounts payable
under Section 5.05 hereof) shall automatically become immediately due and
payable without presentment, demand, protest or other formalities of any
kind, all of which are hereby expressly waived by the Borrowers.
Section 11. The Administrative Agent.
11.01 Appointment, Powers and Immunities. Each Bank hereby
irrevocably appoints and authorizes the Administrative Agent to act as its
agent hereunder with such powers as are specifically delegated to the
Administrative Agent by the terms of this Agreement, together with such
other powers as are reasonably incidental thereto. The Administrative Agent
(which term as used in this sentence and in Section 11.05 and the first
sentence of Section 11.06 hereof shall include reference to its affiliates
and its own and its affiliates' officers, directors, employees and agents):
(a) shall have no duties or responsibilities except those
expressly set forth in this Agreement, and shall not by reason of this
Agreement be a trustee for any Bank;
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(b) shall not be responsible to the Banks for any recitals,
statements, representations or warranties contained in this Agreement,
or in any certificate or other document referred to or provided for
in, or received by any of them under, this Agreement, or for the
value, validity, effectiveness, genuineness, enforceability or
sufficiency of this Agreement, or any other document referred to or
provided for herein or for any failure by any Borrower or any other
Person to perform any of its obligations hereunder or thereunder;
(c) shall not be required to initiate or conduct any litigation
or collection proceedings hereunder; and
(d) shall not be responsible for any action taken or omitted to
be taken by it hereunder or under any other document or instrument
referred to or provided for herein or in connection herewith, except
for its own gross negligence or willful misconduct.
The Administrative Agent may employ agents and attorneys-in-fact and shall
not be responsible for the negligence or misconduct of any such agents or
attorneys-in-fact selected by it in good faith.
11.02 Reliance by Administrative Agent. The Administrative Agent
shall be entitled to rely upon any certification, notice or other
communication (including, without limitation, any thereof by telephone,
telecopy, telegram or cable) reasonably believed by it to be genuine and
correct and to have been signed or sent by or on behalf of the proper
Person or Persons, and upon advice and statements of legal counsel,
independent accountants and other experts selected by the Administrative
Agent. As to any matters not expressly provided for by this Agreement, the
Administrative Agent shall in all cases be fully protected in acting, or in
refraining from acting, hereunder in accordance with instructions given by
the Majority Banks, and such instructions of the Majority Banks and any
action taken or failure to act pursuant thereto shall be binding on all of
the Banks.
11.03 Defaults. The Administrative Agent shall not be deemed to
have knowledge or notice of the occurrence of a Default (other than the
non-payment of principal of or interest on Loans or of facility fee) unless
the Administrative Agent has received notice from a Bank or any Borrower
specifying such Default and stating that such notice is a "Notice of
Default". In the event that the Administrative Agent receives such a notice
of the occurrence of a Default, the Administrative Agent shall give prompt
notice thereof to the Banks (and shall give each Bank prompt notice of each
such non-payment). The Administrative Agent shall (subject to Sections
11.01, 11.07 and 12.04 hereof) take such action with respect to such
Default as shall be directed by the Majority Banks, provided that, unless
and until the Administrative Agent shall have received such directions, the
Administrative Agent may (but shall not be obligated to) take such action,
or refrain from taking such action, with respect to such Default as it
shall deem advisable in the best interest of the Banks except to the extent
that this Agreement expressly
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requires that such action be taken, or not be taken, only with the consent
or upon the authorization of the Majority Banks or all of the Banks.
11.04 Rights as a Bank. With respect to its Commitment and the
Loans made by it, Chase (and any successor acting as Administrative Agent)
in its capacity as a Bank hereunder shall have the same rights and powers
hereunder as any other Bank and may exercise the same as though it were not
acting as the Administrative Agent, and the term "Bank" or "Banks" shall,
unless the context otherwise indicates, include the Administrative Agent in
its individual capacity. Chase (and any successor acting as Administrative
Agent) and its affiliates may (without having to account therefor to any
Bank) accept deposits from, lend money to, make investments in and
generally engage in any kind of banking, trust or other business with the
Company (and any of its Subsidiaries or Affiliates) as if it were not
acting as the Administrative Agent, and Chase (and any such successor) and
its affiliates may accept fees and other consideration from any Borrower
for services in connection with this Agreement or otherwise without having
to account for the same to the Banks.
11.05 Indemnification. The Banks agree to indemnify the
Administrative Agent (to the extent not reimbursed under Section 12.03
hereof, but without limiting the obligations of the Company under said
Section 12.03) ratably in accordance with the aggregate principal amount of
the Loans held by the Banks (or, if no Loans shall be outstanding, ratably
in accordance with their respective Commitments), for any and all
liabilities, obligations, losses, damages, penalties, actions, judgments,
suits, costs, expenses or disbursements of any kind and nature whatsoever
that may be imposed on, incurred by or asserted against the Administrative
Agent (including by any Bank) arising out of or by reason of any
investigation in or in any way relating to or arising out of this Agreement
or any other documents contemplated by or referred to herein or the
transactions contemplated hereby (including, without limitation, the costs
and expenses that any Borrower is obligated to pay under Section 12.03
hereof but excluding, unless a Default has occurred and is continuing,
normal administrative costs and expenses incident to the performance of its
agency duties hereunder) or the enforcement of any of the terms hereof or
of any such other documents, provided that no Bank shall be liable for any
of the foregoing to the extent they arise from the gross negligence or
willful misconduct of the party to be indemnified.
11.06 Non-Reliance on Administrative Agent and Other Banks. Each
Bank agrees that it has, independently and without reliance on the
Administrative Agent or any other Bank, and based on such documents and
information as it has deemed appropriate, made its own credit analysis of
the Company and its Subsidiaries and decision to enter into this Agreement
and that it will, independently and without reliance upon the
Administrative Agent or any other Bank, and based on such documents and
information as it shall deem appropriate at the time, continue to make its
own analysis and decisions in taking or not taking action under this
Agreement. The Administrative Agent shall not be required to keep itself
informed as to the performance or observance by any Borrower of this
Agreement or any other document referred to or provided for herein or to
inspect the Properties or books of the Company or any of its
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Subsidiaries. Except for notices, reports and other documents and
information expressly required to be furnished to the Banks by the
Administrative Agent hereunder, the Administrative Agent shall not have any
duty or responsibility to provide any Bank with any credit or other
information concerning the affairs, financial condition or business of the
Company or any of its Subsidiaries (or any of their affiliates) that may
come into the possession of the Administrative Agent or any of its
affiliates.
11.07 Failure to Act. Except for action expressly required of the
Administrative Agent hereunder, the Administrative Agent shall in all cases
be fully justified in failing or refusing to act hereunder unless it shall
receive further assurances to its satisfaction from the Banks of their
indemnification obligations under Section 11.05 hereof against any and all
liability and expense that may be incurred by it by reason of taking or
continuing to take any such action.
11.08 Resignation or Removal of Administrative Agent. Subject to
the appointment and acceptance of a successor Administrative Agent as
provided below, the Administrative Agent may resign at any time by giving
notice thereof to the Banks and the Borrowers, and the Administrative Agent
may be removed at any time with or without cause by the Majority Banks.
Upon any such resignation or removal, the Majority Banks shall have the
right to appoint a successor Administrative Agent. If no successor
Administrative Agent shall have been so appointed by the Majority Banks and
shall have accepted such appointment within 30 days after the retiring
Administrative Agent's giving of notice of resignation or the Majority
Banks' removal of the retiring Administrative Agent, then the retiring
Administrative Agent may, on behalf of the Banks, appoint a successor
Administrative Agent, that shall be a bank which has an office in New York,
New York and which has a combined capital and surplus of at least
$500,000,000. Upon the acceptance of any appointment as Administrative
Agent hereunder by a successor Administrative Agent, such successor
Administrative Agent shall thereupon succeed to and become vested with all
the rights, powers, privileges and duties of the retiring Administrative
Agent, and the retiring Administrative Agent shall be discharged from its
duties and obligations hereunder. After any retiring Administrative Agent's
resignation or removal hereunder as Administrative Agent, the provisions of
this Section 11 shall continue in effect for its benefit in respect of any
actions taken or omitted to be taken by it while it was acting as the
Administrative Agent.
Section 12. Miscellaneous.
12.01 Waiver. No failure on the part of the Administrative Agent
or any Bank to exercise and no delay in exercising, and no course of
dealing with respect to, any right, power or privilege under this Agreement
shall operate as a waiver thereof, nor shall any single or partial exercise
of any right, power or privilege under this Agreement preclude any other or
further exercise thereof or the exercise of any other right, power or
privilege. The remedies provided herein are cumulative and not exclusive of
any remedies provided by law.
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12.02 Notices. All notices, requests and other communications
provided for herein (including, without limitation, any modifications of,
or waivers or consents under, this Agreement) shall be given or made in
writing (including, without limitation, by telecopy), or, with respect to
notices given pursuant to Section 2.03 hereof, by telephone, confirmed in
writing by telecopier by the close of business on the day the notice is
given, delivered (or telephoned, as the case may be) to the intended
recipient as follows:
(a) if to the Company or any of the Subsidiary Borrowers, to
Bowater Incorporated at ▇▇ ▇▇▇▇ ▇▇▇▇▇▇▇▇▇▇ ▇▇▇, ▇▇▇▇▇▇▇▇▇▇, ▇▇▇▇▇
▇▇▇▇▇▇▇▇ ▇▇▇▇▇, Attention of Treasurer (Telecopy No. ▇▇▇-▇▇▇-▇▇▇▇;
Telephone No. ▇▇▇-▇▇▇-▇▇▇▇);
(b) if to the Administrative Agent, to it at The Chase Manhattan
Bank, ▇ ▇▇▇▇▇ ▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇, ▇▇▇ ▇▇▇▇, ▇▇▇ ▇▇▇▇ ▇▇▇▇▇, Attention of
Agency Services Group (Telecopy No. ▇▇▇-▇▇▇-▇▇▇▇; Telephone No.
▇▇▇-▇▇▇-▇▇▇▇); and
(c) if to a Bank, to it at its address (or telecopy number) set
forth in its Administrative Questionnaire.
Any party hereto may change its address, telecopier number or telephone
number for notices and other communications hereunder by notice to the
other parties hereto (which notice, in the case of any such change by a
Bank, shall be given by such Bank to the Borrowers and the Administrative
Agent), provided that notwithstanding the foregoing, all notices to any
Borrower by the Administrative Agent or any Bank may be given to the
Company, and the Administrative Agent and each Bank is authorized to rely
on any notice (including notices of borrowing) given by the Company with
respect to matters relating to any Borrower (and shall not be required to
receive a notice from the respective Borrower to which such matter
relates). Except as otherwise provided in this Agreement, all such
communications shall be deemed to have been duly given when transmitted by
telecopier or personally delivered or, in the case of a mailed notice, upon
receipt, in each case given or addressed as aforesaid.
12.03 Expenses, Etc. The Company (and, in the case of clauses (b)
and (c) below, each Subsidiary Borrower) agrees to pay or reimburse: (a)
the Administrative Agent for paying all reasonable out-of-pocket costs and
expenses of the Administrative Agent (including, without limitation, the
reasonable fees and expenses of Milbank, Tweed, ▇▇▇▇▇▇ & ▇▇▇▇▇▇, special
New York counsel to Chase) in connection with (i) the negotiation,
preparation, execution and delivery of this Agreement and the making of the
Loans hereunder and (ii) the negotiation and preparation of any
modification, supplement or waiver of any of the terms of this Agreement
(whether or not consummated); (b) each Bank and the Administrative Agent
for paying its reasonable out-of-pocket costs and expenses (including,
without limitation, the reasonable fees and expenses of its legal counsel)
in connection with (i) any Default and any enforcement or collection
proceedings resulting therefrom, (ii) the negotiation of any restructuring
or "work-out" (whether or not consummated) of the obligations of any
Borrower
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hereunder and (iii) the enforcement of this Section 12.03; and (c) each
Bank and the Administrative Agent for paying all transfer, stamp,
documentary or other similar taxes, assessments or charges levied by any
governmental or revenue authority in respect of this Agreement or any other
document referred to herein.
Each Borrower hereby agrees to indemnify the Administrative Agent
and each Bank and their respective directors, officers, employees,
attorneys and agents from, and hold each of them harmless against, any and
all losses, liabilities, claims, damages and expenses incurred by any of
them (including, without limitation, any and all losses, liabilities,
claims, damages and expenses incurred by the Administrative Agent to any
Bank, whether or not the Administrative Agent or any Bank is a party
thereto) arising out of or by reason of any investigation or litigation or
other proceedings (including any threatened investigation or litigation or
other proceedings) relating to the extensions of credit hereunder or any
actual or proposed use by the Company or any of its Subsidiaries of the
proceeds of any of the extensions of credit hereunder, including, without
limitation, the reasonable fees and disbursements of counsel incurred in
connection with any such investigation or litigation or other proceedings
(but excluding any such losses, liabilities, claims, damages or expenses
incurred by reason of the gross negligence or willful misconduct of the
Person to be indemnified). Without limiting the generality of the
foregoing, each Borrower will indemnify the Administrative Agent and each
Bank from, and hold the Administrative Agent and each Bank harmless
against, any losses, liabilities, claims, damages or expenses described in
the preceding sentence (but excluding, as provided in the preceding
sentence, any loss, liability, claim, damage or expense incurred by reason
of the gross negligence or willful misconduct of the Person to be
indemnified) arising under any Environmental Law as a result of the past,
present or future operations of the Company or any of its Subsidiaries (or
any predecessor in interest to the Company or any of its Subsidiaries), or
the past, present or future condition of any site or facility owned,
operated or leased by the Company or any of its Subsidiaries (or any such
predecessor in interest), or any release (within the meaning of any
Environmental Law) or threatened release of any hazardous materials (within
the meaning of any Environmental Law) from any such site or facility,
including any such release or threatened release which shall occur during
any period when the Administrative Agent or any Bank shall be in possession
of any such site or facility following the exercise by the Administrative
Agent or any Bank of any of its rights and remedies hereunder.
12.04 Amendments, Etc. Except as otherwise expressly provided in
this Agreement, any provision of this Agreement may be modified or
supplemented only by an instrument in writing signed by the Company, each
Subsidiary Borrower, the Administrative Agent and the Majority Banks, or by
the Company, each such Subsidiary Borrower, and the Administrative Agent
acting with the consent of the Majority Banks, and any provision of this
Agreement may be waived by the Majority Banks or by the Administrative
Agent acting with the consent of the Majority Banks; provided that:
(a) no modification, supplement or waiver shall, unless by an
instrument signed
364-Day Credit Agreement
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by all of the Banks or by the Administrative Agent acting with the
consent of all of the Banks: (i) increase or extend the term of the
Commitments, or extend the time or waive any requirement for the
reduction or termination of the Commitments, (ii) extend any date
fixed for the payment of principal of or interest on any Loan or any
fee hereunder, (iii) reduce the amount of any such payment of
principal, (iv) reduce the rate at which interest is payable thereon
or any fee is payable hereunder, (v) alter the rights or obligations
of any Borrower to prepay Loans, (vi) alter the terms of any of
Sections 2.07, 4.07, 5 and 12.03 hereof or this Section 12.04, (vii)
modify the definition of the term "Majority Banks" or modify in any
other manner the number or percentage of the Banks required to make
any determinations or waive any rights hereunder or to modify any
provision hereof, or (viii) waive any of the conditions precedent set
forth in Section 6 hereof; and
(b) any modification or supplement of Section 11 hereof, or of
any of the rights or duties of the Administrative Agent hereunder,
shall require the consent of the Administrative Agent.
12.05 Successors and Assigns. This Agreement shall be binding
upon and inure to the benefit of the parties hereto and their respective
successors and permitted assigns.
12.06 Assignments and Participations.
(a) Assignment by the Company. None of the Borrowers may assign
all or any portion of its rights or obligations hereunder without the prior
consent of all of the Banks and the Administrative Agent.
(b) Assignment by the Banks. Each Bank may assign all or any
portion of its Loans and its Commitment (but only with the consent of the
Company and the Administrative Agent, which consent may not be unreasonably
withheld or delayed); provided that
(i) no such consent by the Company or the Administrative Agent
shall be required in the case of any assignment to another Bank;
(ii) except to the extent the Company and the Administrative
Agent shall otherwise consent, any such partial assignment shall be in
an amount at least equal to $10,000,000;
(iii) each such assignment by a Bank of its Loans or Commitment
shall be made in such manner so that the same portion of its Loans and
Commitment is assigned to the respective assignee; and
(iv) upon each such assignment, the assignor and assignee shall
deliver to the
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Company and the Administrative Agent an Assignment and Acceptance in
the form of Exhibit A hereto.
Upon each such assignment the assigning Bank shall pay the Administrative
Agent an assignment fee of $3,500.
(c) Participations. A Bank may sell or agree to sell to one or
more other Persons (each a "Participant") a participation in all or any
part of any Loans held by it, or in its Commitment, provided that such
Participant shall not have any other rights or obligations under this
Agreement (the Participant's rights against such Bank in respect of such
participation to be those set forth in the agreements executed by such Bank
in favor of the Participant). All amounts payable by any Borrower to any
Bank under Section 5 hereof in respect of Loans held by it, and its
Commitment, shall be determined as if such Bank had not sold or agreed to
sell any participations in such Loans and Commitment, and as if such Bank
were funding each of such Loan and Commitment in the same way that it is
funding the portion of such Loan and Commitment in which no participations
have been sold. In no event shall a Bank that sells a participation agree
with the Participant to take or refrain from taking any action hereunder
except that such Bank may agree with the Participant that it will not,
without the consent of the Participant, agree to (i) increase or extend the
term of such Bank's Commitment, (ii) extend any date fixed for the payment
of principal of or interest on the related Loan or Loans or any portion of
any fee hereunder payable to the Participant, (iii) reduce the amount of
any such payment of principal, (iv) reduce the rate at which interest is
payable thereon, or any fee hereunder payable to the Participant, to a
level below the rate at which the Participant is entitled to receive such
interest or fee, or (v) consent to any modification, supplement or waiver
hereof to the extent that the same, under Section 12.04 hereof, requires
the consent of each Bank.
(d) Federal Reserve Banks. In addition to the assignments and
participations permitted under the foregoing provisions of this Section
12.06, any Bank may assign and pledge all or any portion of its Loans to
any Federal Reserve Bank as collateral security pursuant to Regulation A
and any Operating Circular issued by such Federal Reserve Bank. No such
assignment shall release the assigning Bank from its obligations hereunder.
(e) Information. A Bank may furnish any information concerning
the Company or any of its Subsidiaries in the possession of such Bank from
time to time to assignees and participants (including prospective assignees
and participants), subject, however, to the provisions of Section 12.12(b)
hereof.
(f) Assignment to the Company. Anything in this Section 12.06 to
the contrary notwithstanding, the Company shall not, and shall not permit
any of its Subsidiaries to, acquire (whether by assignment, participation
or otherwise), and no Bank may assign or participate to the Company or any
of its Subsidiaries or Affiliates, any interest in any Loan without the
prior consent of each Bank.
364-Day Credit Agreement
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(g) Register. 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 Banks,
and the Commitments of, and principal amount of the Loans owing to, each
Bank pursuant to the terms hereof from time to time (the "Register"). The
entries in the Register shall be conclusive, and the Borrowers, the
Administrative Agent and the Banks may treat each Person whose name is
recorded in the Register pursuant to the terms hereof as a Bank hereunder
for all purposes of this Agreement, notwithstanding notice to the contrary.
The Register shall be available for inspection by any Borrower or any Bank,
at any reasonable time and from time to time upon reasonable prior notice.
(h) Effectiveness of Assignments. Upon its receipt of a duly
completed Assignment and Acceptance executed by an assigning Bank and an
assignee, the assignee's completed Administrative Questionnaire (unless the
assignee shall already be a Bank hereunder), the processing and recordation
fee referred to in paragraph (b) of this Section 12.06 and any written
consent to such assignment required by paragraph (b) of this Section 12.06,
the Administrative Agent 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.
12.07 Survival. The obligations of the Borrowers under Sections
5.01, 5.05, 5.06, 5.07 and 12.03 hereof and the obligations of the Banks
under Section 11.05 hereof shall survive the repayment of the Loans and the
termination of the Commitments. In addition, each representation and
warranty made, or deemed to be made by a notice of any Loan, herein or
pursuant hereto shall survive the making of such representation and
warranty, and no Bank shall be deemed to have waived, by reason of making
any Loan, any Default which may arise by reason of such representation or
warranty proving to have been false or misleading, notwithstanding that
such Bank or the Administrative Agent may have had notice or knowledge or
reason to believe that such representation or warranty was false or
misleading at the time such Loan was made.
12.08 Captions. The table of contents and captions and section
headings appearing herein are included solely for convenience of reference
and are not intended to affect the interpretation of any provision of this
Agreement.
12.09 Counterparts. This Agreement may be executed in any number
of counterparts, all of which taken together shall constitute one and the
same instrument and any of the parties hereto may execute this Agreement by
signing any such counterpart.
12.10 Governing Law; Submission to Jurisdiction. This Agreement
shall be governed by, and construed in accordance with, the law of the
State of New York. The Company hereby submits to the nonexclusive
jurisdiction of the United States District Court for the
364-Day Credit Agreement
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▇▇▇▇▇▇▇▇ ▇▇▇▇▇▇▇▇ ▇▇ ▇▇▇ ▇▇▇▇ and of any New York state court sitting in
New York City for the purposes of all legal proceedings arising out of or
relating to this Agreement or the transactions contemplated hereby. The
Company irrevocably waives, to the fullest extent permitted by applicable
law, any objection which it may now or hereafter have to the laying of the
venue of any such proceeding brought in such a court and any claim that any
such proceeding brought in such a court has been brought in an inconvenient
forum.
12.11 Waiver of Jury Trial. EACH OF THE COMPANY, THE SUBSIDIARY
BORROWERS, THE ADMINISTRATIVE AGENT AND THE BANKS HEREBY IRREVOCABLY
WAIVES, TO THE FULLEST EXTENT PERMITTED BY APPLICABLE LAW, ANY AND ALL
RIGHT TO TRIAL BY JURY IN ANY LEGAL PROCEEDING ARISING OUT OF OR RELATING
TO THIS AGREEMENT OR THE TRANSACTIONS CONTEMPLATED HEREBY.
12.12 No Immunity. To the extent that any Foreign Borrower may be
or become entitled, in any jurisdiction in which judicial proceedings may
at any time be commenced with respect to this Agreement, to claim for
itself or its Properties or revenues any immunity from suit, court
jurisdiction, attachment prior to judgment, attachment in aid of execution
of a judgment, execution of a judgment or from any other legal process or
remedy relating to its obligations under this Agreement, and to the extent
that in any such jurisdiction there may be attributed such an immunity
(whether or not claimed), such Foreign Borrower hereby irrevocably agrees
not to claim and hereby irrevocably waives such immunity to the fullest
extent permitted by the laws of such jurisdiction.
12.13 Judgment Currency. This is an international loan
transaction in which the specification of U.S. Dollars and payment in New
York City is of the essence, and the obligations of each Foreign Borrower
under this Agreement to make payment to (or for the account of) a Bank in
U.S. Dollars shall not be discharged or satisfied by any tender or recovery
pursuant to any judgment expressed in or converted into any other currency
or in another place except to the extent that such tender or recovery
results in the effective receipt by such Bank in New York City of the full
amount of U.S. Dollars payable to such Bank under this Agreement. If for
the purpose of obtaining judgment in any court it is necessary to convert a
sum due hereunder in U.S. Dollars into another currency (in this Section
12.13 called the "judgment currency"), the rate of exchange that shall be
applied shall be that at which in accordance with normal banking procedures
the Administrative Agent could purchase U.S. Dollars at its principal
office in New York City with the judgment currency on the Business Day next
preceding the day on which such judgment is rendered. The obligation of
each Foreign Borrower in respect of any such sum due from it to the
Administrative Agent or any Bank hereunder (in this Section 12.13 called an
"Entitled Person") shall, notwithstanding the rate of exchange actually
applied in rendering such judgment, be discharged only to the extent that
on the Business Day following receipt by such Entitled Person of any sum
adjudged to be due hereunder in the judgment currency such Entitled Person
may in accordance with normal banking procedures purchase and
364-Day Credit Agreement
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transfer U.S. Dollars to New York City with the amount of the judgment
currency so adjudged to be due; and each Foreign Borrower hereby,
notwithstanding any such judgment, agrees to indemnify such Entitled Person
against, and to pay such Entitled Person on demand, in U.S. Dollars, the
amount (if any) by which the sum originally due to such Entitled Person in
U.S. Dollars hereunder exceeds the amount of U.S. Dollars so purchased and
transferred.
12.14 Use of English Language. This Agreement has been negotiated
and executed in the English language. All certificates, reports, notices
and other documents and communications given or delivered pursuant to this
Agreement (including, without limitation, any modifications or supplements
hereto) shall be in the English language, or accompanied by a certified
English translation thereof. Except in the case of laws or official
communications of the Netherlands, in the case of any document originally
issued in a language other than English, the English language version of
any such document shall for purposes of this Agreement, and absent manifest
error, control the meaning of the matters set forth therein.
12.15 Treatment of Certain Information.
(a) Use of Information. The Borrowers acknowledge that from time
to time financial advisory, investment banking and other services may be
offered or provided to the Company, any of the Subsidiary Borrowers or one
or more of their respective Subsidiaries (in connection with this Agreement
or otherwise) by any Bank or by one or more subsidiaries or affiliates of
such Bank and the Borrowers hereby authorize each Bank to share any
information delivered to such Bank by the Company, any Subsidiary Borrower
or any of their respective Subsidiaries pursuant to this Agreement, or in
connection with the decision of such Bank to enter into this Agreement, to
any such subsidiary or affiliate of such Bank, it being understood that any
such subsidiary or affiliate receiving such information shall be bound by
the provisions of paragraph (b) below as if it were a Bank hereunder. Such
authorization shall survive the repayment of the Loans and the termination
of the Commitments.
(b) Confidentiality. Each of the Banks and the Administrative
Agent will, and will cause its affiliates, directors, officers, employees
and representatives to, keep confidential, and not publish, disclose or
otherwise divulge and use only in connection with this Agreement any
non-public information furnished by the Company to it in respect of this
Agreement that the Company identifies as being confidential at the time it
furnishes the same, directly or indirectly (including through Chase
Securities Inc.), including a Confidential Information Memorandum relating
to the Company and information relating to Avenor or its Subsidiaries
(collectively, the "Information"), provided that nothing herein shall limit
the disclosure of the Information (i) after the Information shall have
become public (other than through a violation of this Section 12.12), (ii)
to the extent required by statute, rule, regulation or judicial process,
(iii) to counsel for any of the Banks or the Administrative Agent, (iv) to
bank examiners (or any other regulatory authority having jurisdiction over
any Bank or the Administrative Agent), or to auditors or accountants, (v)
to the Administrative Agent or any other Bank (or to Chase Securities
Inc.), (vi) in
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connection with any litigation to which any one or more of the Banks or the
Administrative Agent is a party, or in connection with the enforcement of
rights or remedies hereunder, (vii) to a subsidiary or affiliate of such
Bank as provided in paragraph (a) above or (viii) after Chase Securities
Inc. has advised the Administrative Agent in writing that it has completed
its syndication efforts in respect of this Agreement, to any assignee or
participant (or prospective assignee or participant) so long as such
assignee or participant (or prospective assignee or participant) first
executes and delivers to the respective Bank a Confidentiality Agreement
substantially in the form of Exhibit F hereto (or executes and delivers to
such Bank an acknowledgement to the effect that it is bound by the
provisions of this Section 12.12(b), which acknowledgement may be included
as part of the respective assignment or participation agreement pursuant to
which such assignee or participant acquires an interest in the Loans
hereunder); provided, further, that (x) unless specifically prohibited by
applicable law or court order, each Bank and the Administrative Agent
shall, prior to disclosure thereof, notify the Company of any request for
disclosure of the Information (A) by any governmental agency or
representative thereof (other than any such request in connection with an
examination of the financial condition of such Bank by such governmental
agency) or (B) pursuant to legal process and (y) in no event shall any Bank
or the Administrative Agent be obligated or required to return the
Information furnished by the Company. The obligations of each Bank under
this Section 12.12 shall supersede and replace the obligations of such Bank
under the confidentiality letter in respect of this financing signed and
delivered by such Bank to the Company prior to the date hereof; in
addition, the obligations of any assignee that has executed a
Confidentiality Agreement in the form of Exhibit F hereto shall be
superseded by this Section 12.12 upon the date upon which such assignee
becomes a Bank hereunder pursuant to Section 12.06(b) hereof.
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IN WITNESS WHEREOF, the parties hereto have caused this Agreement
to be duly executed and delivered as of the day and year first above
written.
BOWATER INCORPORATED
Witness: /s/ ▇▇▇▇▇▇ Allozan By: /s/ ▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇▇
Name: ▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇▇
Title: Senior Vice President and
Chief Financial Officer
THE CHASE MANHATTAN BANK,
as Administrative Agent and a Bank
By: /s/ ▇▇▇▇▇▇▇▇ ▇▇▇▇▇▇▇▇
Name: ▇▇▇▇▇▇▇▇ ▇▇▇▇▇▇▇▇
Title: Vice President
364-Day Credit Agreement
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THE BANK OF NEW YORK TORONTO DOMINION (TEXAS), INC.
By: /s/ ▇▇▇ ▇▇▇▇▇ ▇▇▇▇▇▇ By: /s/ ▇▇▇▇▇ ▇. ▇▇▇▇▇▇
Name: ▇▇▇ ▇▇▇▇▇ ▇▇▇▇▇▇ Name: ▇▇▇▇▇ ▇. ▇▇▇▇▇▇
Title: Vice President Title: Vice President
NATIONSBANK, N.A WACHOVIA BANK N.A.
By: /s/ ▇▇▇▇▇▇▇ ▇. Short By: /s/ ▇▇▇▇▇▇▇ ▇▇▇▇▇▇▇▇
Name: ▇▇▇▇▇▇▇ ▇. Short Name: ▇▇▇▇▇▇▇ ▇▇▇▇▇▇▇▇
Title: Senior Vice President Title: Assistant Vice President
ABN AMRO BANK THE BANK OF NOVA SCOTIA
By: /s/ ▇▇▇▇▇ ▇▇▇▇▇▇▇▇▇ /s/ ▇▇▇▇▇▇ ▇▇▇▇▇▇ By: /s/ ▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇
Name: ▇▇▇▇▇ ▇▇▇▇▇▇▇▇▇/▇▇▇▇▇▇ ▇▇▇▇▇▇ Name: ▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇
Title:Vice President/Assistant Title: Senior Relationship
Vice-President Manager
FIRST UNION NATIONAL BANK SUNTRUST BANK, NASHVILLE, N.A.
By: /s/ ▇▇▇▇▇ Santa ▇▇▇▇ By: /s/ J. ▇▇▇ ▇▇▇▇▇▇▇▇▇
Name: ▇▇▇▇▇ Santa ▇▇▇▇ Name: J. ▇▇▇ ▇▇▇▇▇▇▇▇▇
Title: Vice President Title: Senior Vice President
▇▇▇▇▇▇ GUARANTY TRUST
COMPANY OF NEW YORK BANK OF MONTREAL
By: /s/ ▇▇▇▇▇▇ ▇▇▇▇▇▇▇▇▇ By: /s/ ▇▇▇▇▇ ▇. ▇▇▇▇▇
Name: ▇▇▇▇▇▇ ▇▇▇▇▇▇▇▇▇ Name: ▇▇▇▇▇ ▇. ▇▇▇▇▇
Title: Vice President Title: Director
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NATIONAL BANK OF CANADA PNC BANK, NATIONAL ASSOCIATION
By: /s/ ▇▇▇▇▇ Drum By: /s/ ▇▇▇▇ ▇. ▇▇▇▇▇
Name: ▇▇▇▇▇ Drum Name: ▇▇▇▇ ▇. ▇▇▇▇▇
Title: Vice President Title: Vice President
By: /s/ ▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇
Name: ▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇
Title: Vice President
WESTDEUTSCHE LANDESBANK, DG BANK, DEUTSCHE
GIROZENTRALE, GENOSSENSCHAFTSBANK,
NEW YORK BRANCH CAYMAN ISLANDS BRANCH
By: /s/ ▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇▇ By: /s/ ▇▇▇▇ ▇. ▇▇▇▇▇▇
Name: ▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇▇ Name: ▇▇▇▇ ▇. ▇▇▇▇▇▇
Title: Director Title: Vice President
By: /s/ ▇▇▇▇▇▇ ▇. ▇▇▇▇▇ III By: /s/ ▇▇▇▇ ▇. ▇▇▇▇▇▇▇▇▇
Name: ▇▇▇▇▇▇ ▇. ▇▇▇▇▇ III Name: ▇▇▇▇ ▇. ▇▇▇▇▇▇▇▇▇
Title: Associate Title: Assistant Treasurer
364-Day Credit Agreement
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SCHEDULE I
Commitments
[See definition of "Commitment" in Sections 1.01]
Bank Commitment
The Chase Manhattan Bank $56,550,000
The Bank of New York $54,925,000
Toronto Dominion (Texas), Inc. $54,925,000
NationsBank, N.A. $54,925,000
Wachovia Bank N.A. $54,925,000
ABN Amro Bank $45,500,000
The Bank of Nova Scotia $45,500,000
First Union National Bank $45,500,000
SunTrust Bank, Nashville, N.A. $45,500,000
▇▇▇▇▇▇ Guaranty Trust Company of New York $45,500,000
Bank of Montreal $29,250,000
National Bank of Canada $29,250,000
PNC Bank, National Association $29,250,000
Westdeutsche Landesbank Girozentrale, $29,250,000
New York Branch
DG Bank, Deutsche Genossenschaftsbank, $29,250,000
Cayman Islands Branch
Schedule I
- 1 -
SCHEDULE II
Material Agreements and Liens
[See Sections 8.12 and 9.06(a)]
Part A - Material Agreements
Part B - Liens
Schedule II
- 1 -
SCHEDULE III
Subsidiaries
[See Section 8.14]
Part A
Part B
Schedule III
- 1 -
SCHEDULE IV
Litigation
[See Section 8.03]
Schedule IV
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SCHEDULE V
Permitted Dispositions
[See Section 9.05(f)]
Schedule V
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EXHIBIT A
[Form of Assignment and Acceptance]
ASSIGNMENT AND ACCEPTANCE
Reference is made to the 364-Day Credit Agreement dated as of June 24,
1998 (as amended and in effect on the date hereof, the "Credit Agreement"),
among Bowater Incorporated, the Subsidiary Borrowers party thereto and the
banks party thereto and The Chase Manhattan Bank, as Administrative Agent
for said banks. Terms defined in the Credit Agreement are used herein with
the same meanings.
The Assignor named on the reverse hereof hereby sells and
assigns, without recourse, to the Assignee named on the reverse hereof, and
the Assignee hereby purchases and assumes, without recourse, from the
Assignor, effective as of the Assignment Date set forth on the reverse
hereof, the interests set forth on the reverse hereof (the "Assigned
Interest") in the Assignor's rights and obligations under the Credit
Agreement, including the interests set forth on the reverse hereof in the
Commitment of the Assignor on the Assignment Date and Loans owing to the
Assignor which are outstanding on the Assignment Date, together with unpaid
interest accrued on the assigned Loans to the Assignment Date, and the
amount, if any, set forth on the reverse hereof of the fees accrued to the
Assignment Date for the account of the Assignor. The Assignee hereby
acknowledges receipt of a copy of the Credit Agreement. From and after the
Assignment Date (i) the Assignee shall be a party to and be bound by the
provisions of the Credit Agreement and, to the extent of the interests
assigned by this Assignment and Acceptance, have the rights and obligations
of a Bank thereunder and (ii) the Assignor shall, to the extent of the
interests assigned by this Assignment and Acceptance, relinquish its rights
and be released from its obligations under the Credit Agreement.
This Assignment and Acceptance is being delivered to the
Administrative Agent together with if the Assignee is not already a Bank
under the Credit Agreement, an Administrative Questionnaire in the form
supplied by the Administrative Agent, duly completed by the Assignee. The
[Assignee/Assignor] shall pay the fee payable to the Administrative Agent
pursuant to Section 12.06(b) of the Credit Agreement.
This Assignment and Acceptance shall be governed by and construed
in accordance with the laws of the State of New York.
Assignment and Acceptance
- 2 -
Date of Assignment:
Legal Name of Assignor:
Legal Name of Assignee:
Assignee's Address for Notices:
Effective Date of Assignment
("Assignment Date")1:
---------------------
Percentage Assigned of
Facility/Commitment
(set forth, to at
least 8 decimals, as a
percentage of the
Facility and the
Principal Amount aggregate Commitments
Facility Assigned Assigned of all Banks thereunder)
----------------- ---------------- ------------------------
Commitment Assigned: $ %
Loans:
Fees Assigned (if any):
The terms set forth above and on the reverse side hereof are hereby agreed
to:
[NAME OF ASSIGN], as Assignor
By:____________________________
Name:
Title:
--------------------
1 Must be at least five Business Days after execution hereof by all
required parties.
Assignment and Acceptance
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[NAME OF ASSIGNEE] , as Assignee
By:_________________________________
Name:
Title:
Assignment and Acceptance
- 4 -
The undersigned hereby consent to the within assignment:2
BOWATER INCORPORATED
By:_________________________
Name:
Title:
THE CHASE MANHATTAN BANK,
as Administrative Agent
By:_________________________
Name:
Title:
---------------
2 Consents to be included to the extent required by Section 10.04(b)
of the Credit Agreement.
Assignment and Acceptance
- 1 -
EXHIBIT B
[Form of Opinion of Counsel to the Company]
__________ __, 1998
Each of the Banks party to the
364-Day Credit Agreement referred to
below and The Chase Manhattan Bank, as
Administrative Agent for said Banks
▇ ▇▇▇▇▇ ▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇
▇▇▇ ▇▇▇▇, ▇▇▇ ▇▇▇▇ ▇▇▇▇▇
Ladies and Gentlemen:
I am the Vice President, Secretary and Assistant General Counsel
of Bowater Incorporated, a corporation organized under the laws of Delaware
(the "Company") and I am delivering this opinion pursuant to Section
7.01(d) of the 364-Day Credit Agreement (the "Credit Agreement") dated as
of June 24, 1998, between the Company, the Subsidiary Borrowers party
thereto and the banks party thereto (the "Banks") and The Chase Manhattan
Bank, as Administrative Agent, providing for loans to be made by said Banks
to the Company in an aggregate principal amount not exceeding $650,000,000.
All capitalized terms used but not defined herein have the respective
meanings given to such terms in the Credit Agreement.
In rendering the opinions expressed below, I have examined:
(i) the Credit Agreement; and
(ii) such corporate records, agreements and instruments of the
Company and such other documents and records as I have deemed
necessary as a basis for the opinions expressed below.
In my examination, I have assumed the genuineness of all
signatures, the authenticity of all documents submitted to me as originals
and the conformity with authentic original documents of all documents
submitted to me as copies. When relevant facts were not independently
established, I have relied upon statements of governmental officials and
upon representations made in or pursuant to the Credit Agreement and
certificates of appropriate representatives of the Company.
In rendering the opinions expressed below, I have assumed, with
respect to all of the documents referred to in this opinion letter, that
(except, to the extent set forth in the opinions expressed below, as to the
Company):
Opinion of Counsel to the Company
- 2 -
(i) such documents have been duly authorized by, have been duly
executed and delivered by, and constitute legal, valid, binding and
enforceable obligations of, all of the parties to such documents;
(ii) all signatories to such documents have been duly authorized;
and
(iii) all of the parties to such documents are duly organized and
validly existing and have the power and authority (corporate or other)
to execute, deliver and perform such documents.
Based upon and subject to the foregoing and subject also to the
comments and qualifications set forth below, and having considered such
questions of law as I have deemed necessary as a basis for the opinions
expressed below, I am of the opinion that:
1. The Company is a corporation duly organized, validly existing
and in good standing under the laws of the State of Delaware.
2. The Company has all requisite corporate power to execute and
deliver, and to perform its obligations under the Credit Agreement and
has all requisite corporate power to borrow under the Credit
Agreement.
3. The execution, delivery and performance by the Company of the
Credit Agreement and the borrowings by the Company under the Credit
Agreement have been duly authorized by all necessary corporate action
on the part of the Company.
4. The Credit Agreement has been duly executed and delivered by
the Company.
5. The Credit Agreement constitutes the legal, valid and binding
obligation of the Company, enforceable against the Company in
accordance with its terms, except as may be limited by bankruptcy,
insolvency, reorganization, moratorium, fraudulent conveyance or other
similar laws relating to or affecting the rights of creditors
generally and except as the enforceability of the Credit Agreement is
subject to the application of general principles of equity (regardless
of whether considered in a proceeding in equity or at law), including,
without limitation, (a) the possible unavailability of specific
performance, injunctive relief or any other equitable remedy and (b)
concepts of materiality, reasonableness, good faith and fair dealing.
6. No authorization, approval or consent of, and no filing or
registration with, any governmental or regulatory authority or agency
is required on the part of the Company for the execution, delivery or
performance by the Company of, or for the legality, validity or
enforceability of, the Credit Agreement or for any borrowing by the
Company under
Opinion of Counsel to the Company
- 3 -
the Credit Agreement.
7. The execution, delivery and performance by the Company of, and
the consummation by the Company of the transactions contemplated by,
the Credit Agreement do not and will not (a) violate any provision of
the charter or by-laws of the Company, (b) violate any applicable law,
rule or regulation in any material respect, (c) violate any order,
writ, injunction or decree of any court or governmental authority or
agency or any arbitral award applicable to the Company of which I have
knowledge (after due inquiry) or (d) result in a breach of, constitute
a default under, require any consent under, or result in the
acceleration or required prepayment of any indebtedness pursuant to
the terms of, any agreement or instrument of which I have knowledge
(after due inquiry) to which the Company is a party or by which the
Company is bound or to which the Company is subject or result in the
creation or imposition of any Lien upon any Property of the Company or
any of its Subsidiaries pursuant to the terms of any such agreement or
instrument.
8. Except as set forth in Schedule IV to the Credit Agreement, I
have no knowledge (after due inquiry) of any legal or arbitral
proceedings, or any proceedings by or before any governmental or
regulatory authority or agency, now pending or threatened against the
Company or any of its Subsidiaries or any of their respective
Properties that, if adversely determined, could have a Material
Adverse Effect.
The foregoing opinions are subject to the following comments and
qualifications:
A. The enforceability of Section 12.03 of the Credit Agreement
may be limited by (i) laws rendering unenforceable indemnification
contrary to Federal or state securities laws and the public policy
underlying such laws and (ii) laws limiting the enforceability of
provisions exculpating or exempting a party, or requiring
indemnification of a party for, liability for its own action or
inaction, to the extent the action or inaction involves gross
negligence, recklessness, willful misconduct or unlawful conduct.
B. Clause (iii) of the second sentence of Section 6.02 of the
Credit Agreement may not be enforceable to the extent that the
Guaranteed Obligations are materially altered.
C. The enforceability of provisions in the Credit Documents to
the effect that terms may not be waived or modified except in writing
may be limited under certain circumstances.
D. I express no opinion as to (i) the effect of the laws of any
jurisdiction in which any Bank is located (other than the State of New
York) that limit the interest, fees or other charges such Bank may
impose, (ii) Section 4.07(c) or 6.06 of the Credit
Opinion of Counsel to the Company
- 4 -
Agreement, (iii) the second sentence of Section 12.10 of the Credit
Agreement, insofar as such sentence relates to the subject matter
jurisdiction of the United States District Court for the Southern
District of New York to adjudicate any controversy related to the
Credit Documents, (iv) any purported waiver of the right to trial by
jury and (v) Section 12.12 of the Credit Agreement, insofar as it
purports to be a waiver of immunity granted after the execution and
delivery of the Credit Agreement.
E. I express no opinion as to the obligations of any Subsidiary
Borrower under the Credit Agreement.
The foregoing opinions are limited to matters involving the
Federal laws of the United States of America, the Delaware General
Corporation Law and the law of the State of New York and I do not express
any opinion as to the laws of any other jurisdiction.
At the request of my client, this opinion letter is, pursuant to
Section 7.01(d) of the Credit Agreement, provided to you by me in my
capacity as Vice President, Secretary and Assistant General Counsel of the
Company and may not be relied upon, used, published or communicated by any
Person for any purpose other than in connection with the transactions
contemplated by the Credit Agreement without, in each instance, my prior
written consent.
Very truly yours,
Opinion of Counsel to the Company
- 1 -
EXHIBIT C
[Form of Opinion of Special New York
Counsel to Chase]
___________ __, 1998
Each of the Banks party to the
364-Day Credit Agreement referred to
below and The Chase Manhattan Bank, as
Administrative Agent for said Banks
▇ ▇▇▇▇▇ ▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇
▇▇▇ ▇▇▇▇, ▇▇▇ ▇▇▇▇ ▇▇▇▇▇
Ladies and Gentlemen:
We have acted as special New York counsel to The Chase Manhattan
Bank ("Chase") in connection with the 364-Day Credit Agreement dated as
of June 24, 1998 (the "Credit Agreement") between Bowater Incorporated (the
"Company"), the Subsidiary Borrowers party thereto and the banks party
thereto (the "Banks") and Chase, as Administrative Agent, providing for
loans to be made by said Banks to the Company in an aggregate principal
amount not exceeding $650,000,000. All capitalized terms used but not
defined herein have the respective meanings given to such terms in the
Credit Agreement. This opinion letter is being delivered pursuant to
Section 7.01(e) of the Credit Agreement.
In rendering the opinion expressed below, we have examined:
(i) the Credit Agreement; and
Opinion of Special New York Counsel to Chase
- 2 -
(ii) such corporate records of the Company and such other
documents as we have deemed necessary as a basis for the opinion
expressed below.
In our examination, we have assumed the genuineness of all
signatures, the authenticity of all documents submitted to us as originals
and the conformity with authentic original documents of all documents
submitted to us as copies. When relevant facts were not independently
established, we have relied upon statements of governmental officials and
upon representations made in or pursuant to the Credit Agreement and
certificates of appropriate representatives of the Company.
In rendering the opinion expressed below, we have assumed, with
respect to all of the documents referred to in this opinion letter, that:
(i) such documents have been duly authorized by, have been duly
executed and delivered by, and (except to the extent set forth in the
opinion below as to the Company) constitute legal, valid, binding and
enforceable obligations of, all of the parties to such documents;
(ii) all signatories to such documents have been duly authorized;
and
(iii) all of the parties to such documents are duly organized and
validly existing and have the power and authority (corporate or other)
to execute, deliver and perform such documents.
Based upon and subject to the foregoing and subject also to the
comments and qualifications set forth below, and having considered such
questions of law as we have deemed necessary as a basis for the opinion
expressed below, we are of the opinion that the Credit Agreement
constitutes the legal, valid and binding obligation of the Company,
enforceable against the Company in accordance with its terms, except as may
be limited by bankruptcy, insolvency, reorganization, moratorium,
fraudulent conveyance or other similar laws relating to or affecting the
rights of creditors generally and except as the enforceability of the
Credit Agreement is subject to the application of general principles of
equity (regardless of whether considered in a proceeding in equity or at
law), including, without limitation, (a) the possible unavailability of
specific performance, injunctive relief or any other equitable remedy and
(b) concepts of materiality, reasonableness, good faith and fair dealing.
The foregoing opinion is subject to the following comments and
qualifications:
A. The enforceability of Section 12.03 of the Credit Agreement
may be limited by (i) laws rendering unenforceable indemnification
contrary to Federal or state securities laws and the public policy
underlying such laws and (ii) laws limiting the enforceability of
provisions exculpating or exempting a party, or requiring
indemnification of a party
Opinion of Special New York Counsel to Chase
- 3 -
for, liability for its own action or inaction, to the extent the
action or inaction involves gross negligence, recklessness, willful
misconduct or unlawful conduct.
B. Clause (iii) of the second sentence of Section 6.02 of the
Credit Agreement may not be enforceable to the extent that the
Guaranteed Obligations are materially altered.
C. The enforceability of provisions in the Credit Documents to
the effect that terms may not be waived or modified except in writing
may be limited under certain circumstances.
D. We express no opinion as to (i) the effect of the laws of any
jurisdiction in which any Bank is located (other than the State of New
York) that limit the interest, fees or other charges such Bank may
impose, (ii) Section 4.07(c) or 6.06 of the Credit Agreement, (iii)
the second sentence of Section 12.10 of the Credit Agreement, insofar
as such sentence relates to the subject matter jurisdiction of the
United States District Court for the Southern District of New York to
adjudicate any controversy related to the Credit Agreement and (iv)
Section 12.12 of the Credit Agreement, insofar as it purports to be a
waiver of immunity granted after the execution and delivery of the
Credit Agreement.
E. We express no opinion as to the obligations of any Subsidiary
Borrower under the Credit Agreement.
The foregoing opinion is limited to matters involving the Federal
laws of the United States of America and the law of the State of New York,
and we do not express any opinion as to the laws of any other jurisdiction.
At the request of our client, this opinion letter is, pursuant to
Section 7.01(e) of the Credit Agreement, provided to you by us in our
capacity as special New York counsel to Chase and may not be relied upon by
any Person for any purpose other than in connection with the transactions
contemplated by the Credit Agreement without, in each instance, our prior
written consent.
Very truly yours,
RJW/CDP
Opinion of Special New York Counsel to Chase
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EXHIBIT D
[Form of Money Market Quote Request]
[Date]
To: The Chase Manhattan Bank, as Administrative Agent
From: ___________________________________________
[Name of Applicable Borrower]
Re: Money Market Quote Request
Pursuant to Section 2.03 of the 364-Day Credit Agreement dated
as of June 24, 1998 (as modified and supplemented and in effect from time
to time, the "Credit Agreement") among Bowater Incorporated, the Subsidiary
Borrowers party thereto and the banks party thereto and The Chase Manhattan
Bank, as Administrative Agent, we hereby give notice that we request Money
Market Quotes for the following proposed Money Market Borrowing(s):
Borrowing Quotation Interest
Date Date[*1] Amount[*2] Type[*3] Period[*4]
--------- -------- ---------- -------- ----------
--------------------------
* All numbered footnotes appear on the last page of this Exhibit.
Terms used herein have the meanings assigned to them in the
Credit Agreement.
[NAME OF APPLICABLE BORROWER]
By_____________________________
Title:
Form of Money Market Quote Request
- 2 -
[1] For use if a Set Rate in a Set Rate Auction is requested to be submitted
before the Borrowing Date.
[2] Each amount must be $5,000,000 or a larger integral multiple of
$1,000,000.
[3] Insert either "LIBO Margin" (in the case of LIBOR Market Loans) or "Set
Rate" (in the case of Set Rate Loans).
[4] One, two, three or six months, in the case of a LIBOR Market Loan or,
in the case of a Set Rate Loan, a period of up to 360 days after the
making of such Set Rate Loan and ending on a Business Day.
Form of Money Market Quote Request
- 1 -
EXHIBIT E
[Form of Money Market Quote]
To: The Chase Manhattan Bank,
as Administrative Agent
Attention:
Re: Money Market Quote to
[Name of Applicable Borrower] (the "Requesting Borrower")
This Money Market Quote is given in accordance with Section
2.03(c) of the Credit Agreement dated as of June 24, 1998 (as modified and
supplemented and in effect from time to time, the "Credit Agreement") among
Bowater Incorporated, the Subsidiary Borrowers party thereto and the banks
party thereto and The Chase Manhattan Bank, as Administrative Agent. Terms
defined in the Credit Agreement are used herein as defined therein.
In response to the Requesting Borrower's invitation dated
__________, 199_, we hereby make the following Money Market Quote(s) on the
following terms:
1. Quoting Bank:
2. Person to contact at Quoting Bank:
3. We hereby offer to make Money Market Loan(s) in the following
principal amount[s], for the following Interest Period(s) and at the
following rate(s):
Borrowing Quotation Interest
Date Date[*1] Amount[*2] Type[*3] Period[*4] Rate[*5]
--------- -------- ---------- -------- ---------- --------
--------------------------
* All numbered footnotes appear on the last page of this Exhibit.
Form of Money Market Quote
- 2 -
We understand and agree that the offer(s) set forth above,
subject to the satisfaction of the applicable conditions set forth in the
Credit Agreement, irrevocably obligate[s] us to make the Money Market
Loan(s) for which any offer(s) (is/are) accepted, in whole or in part
(subject to the third sentence of Section 2.03(e) of the Credit Agreement).
Very truly yours,
[NAME OF BANK]
By_________________________
Authorized Officer
Dated: __________, ____
--------------------------------------------------------------
[1] As specified in the related Money Market Quote Request.
[2] The principal amount bid for each Interest Period may not exceed the
principal amount requested. Bids must be made for at least $5,000,000
(or a larger integral multiple of $1,000,000).
[3] Indicate "LIBO Margin" (in the case of LIBOR Market Loans) or "Set
Rate" (in the case of Set Rate Loans).
[4] One, two, three or six months, in the case of a LIBOR Market Loan or,
in the case of a Set Rate Loan, a period of up to 360 days after the
making of such Set Rate Loan and ending on a Business Day, as
specified in the related Money Market Quote Request.
[5] For a LIBOR Market Loan, specify margin over or under the LIBO Rate
determined for the applicable Interest Period. Specify percentage
(rounded to the nearest 1/10,000 of 1%) and specify whether "PLUS" or
"MINUS". For a Set Rate Loan, specify rate of interest per annum
(rounded to the nearest 1/10,000 of 1%).
Form of Money Market Quote
- 1 -
EXHIBIT F
[Form of Confidentiality Agreement]
CONFIDENTIALITY AGREEMENT
[Date]
[Insert Name and
Address of Prospective
Participant or Assignee]
Re: 364-Day Credit Agreement dated as of June 24, 1998 (as modified
and supplemented and in effect from time to time, the "Credit
Agreement"), among Bowater Incorporated (the "Company"), the
Subsidiary Borrowers party thereto and the banks party thereto
and The Chase Manhattan Bank, as Administrative Agent.
Dear Ladies and Gentlemen:
As a Bank party to the Credit Agreement, we have agreed with the
Company pursuant to Section 12.12 of the Credit Agreement to use reasonable
precautions to keep confidential, except as otherwise provided therein, all
non-public information identified by the Company as being confidential at
the time the same is delivered to us pursuant to the Credit Agreement,
including a Confidential Information Memorandum relating to the Company and
information relating to Avenor Inc. and its subsidiaries (collectively, the
"Information").
As provided in said Section 12.12, we are permitted to provide
you, as a prospective [holder of a participation in the Loans (as defined
in the Credit Agreement)] [assignee Bank], with the Information subject to
the execution and delivery by you, prior to receiving the Information, of a
Confidentiality Agreement in this form. The Information will not be made
available to you until your execution and return to us of this
Confidentiality Agreement.
Accordingly, in consideration of the foregoing, you agree for the
benefit of the Company and us to keep confidential, and to not publish,
disclose or otherwise divulge, the Information (and to cause your officers,
directors, employees, agents and representatives to keep confidential, and
to not publish, disclose or otherwise divulge, the Information) and, at the
Company's request (except as provided below), promptly to return to the
Company or destroy the Information and all copies thereof, extracts
therefrom and analyses or other materials based
Confidentiality Agreement
- 2 -
thereon, except that you shall be permitted to disclose Information (i) to
such of your officers, directors, employees, agents and representatives as
need to know such Information in connection with the proposed
[participation] [assignment] mentioned above; (ii) to the extent required
by applicable laws or regulations or by any subpoena or similar legal
process, or requested by any bank regulatory authority, provided that,
unless specifically prohibited by applicable law or court order, you agree,
prior to disclosure thereof, to notify the Company of any request for
disclosure of any Information (A) by any governmental agency or
representative thereof (other than any such request in connection with an
examination of your financial condition by a governmental agency) or (B)
pursuant to legal process; (iii) to the extent such Information (A) becomes
publicly available other than as a result of a breach of this
Confidentiality Agreement, (B) becomes available to you on a
non-confidential basis from a source other than the Administrative Agent,
any Bank or us (C) was available to you on a non-confidential basis prior
to its disclosure to you by us; (iv) to the extent the Company shall have
consented to such disclosure in writing; or (v) pursuant to the immediately
succeeding paragraph of this Confidentiality Agreement. You further agree
that you will use the Information (except to the extent the conditions
referred to in subclauses (A), (B) and (C) of clause (iii) above have been
met and as otherwise provided in this paragraph) only to evaluate the
proposed [participation] [assignment] in respect of the Credit Agreement.
Notwithstanding anything to the contrary contained above, if you
become [a holder of a participation in the Loans under the Credit
Agreement, you will be entitled (subject to the requirements hereof) to
retain all Information and to use it in monitoring and servicing such
participation and in exercising your rights with respect thereto] [an
assignee Bank pursuant to Section 12.06(b) of the Credit Agreement, you
will be able to retain all Information pursuant and subject to Section
12.12 of the Credit Agreement, which shall supersede your obligations under
this Confidentiality Agreement on the date upon which you become such a
Bank].
This Agreement shall be governed by the laws of the State of New
York.
Confidentiality Agreement
- 3 -
Please indicate your agreement to the foregoing by signing as
provided below the enclosed copy of this Confidentiality Agreement and
returning the same to us.
Very truly yours,
[INSERT NAME OF BANK]
By_________________________
The foregoing is agreed to
as of the date of this letter.
[INSERT NAME OF PROSPECTIVE
PARTICIPANT OR ASSIGNEE]
By_________________________
Confidentiality Agreement
- 1 -
EXHIBIT G
[Form of Subsidiary Borrower Designation Letter]
SUBSIDIARY BORROWER DESIGNATION LETTER
[Date]
To: The Chase Manhattan Bank,
as Administrative Agent
Attention:
Re: 364-Day Credit Agreement dated as of June 24, 1998 (as
modified and supplemented and in effect from time to time,
the "Credit Agreement"), among Bowater Incorporated (the
"Company"), the Subsidiary Borrowers and the banks party
thereto and The Chase Manhattan Bank, as Administrative
Agent.
Dear Ladies and Gentlemen:
This letter is a "Subsidiary Borrower Designation Letter" being
delivered to you pursuant to the above-referenced Credit Agreement. Except
as otherwise provided herein, terms defined in the Credit Agreement are
used herein as defined therein.
By its signature below, the Company hereby designates
_________________ (the "New Subsidiary Borrower") as a "Subsidiary
Borrower" under the Credit Agreement. By its signature below, the New
Subsidiary Borrower hereby agrees to be bound by all of the provisions of
the Credit Agreement applicable to it in its capacity as a "Subsidiary
Borrower" thereunder. In addition, the New Subsidiary Borrower hereby
represents and warrants to the Administrative Agent and the Banks that:
(a) it is a ______________ duly organized, validly existing and
in good standing under the laws of _____________;
(b) none of the execution and delivery of this Subsidiary
Borrower Designation Letter, the consummation of the transactions
herein or in the Credit Agreement
Subsidiary Borrower Designation Letter
- 2 -
contemplated or compliance with the terms and provisions hereof or
thereof will conflict with or result in a breach of, or require any
consent under, the charter or by-laws or other organizational
documents of the New Subsidiary Borrower, or any applicable law or
regulation in any material respect, or any order, writ, injunction or
decree of any court or governmental authority or agency, or any
agreement or instrument in any material respect to which the New
Subsidiary Borrower or any of its Subsidiaries is a party or by which
any of them or any of their Property is bound or to which any of them
is subject, or constitute a default under any such agreement or
instrument, or result in the creation or imposition of any Lien upon
any Property of the New Subsidiary Borrower or any of its Subsidiaries
pursuant to the terms of any such agreement or instrument;
(c) the New Subsidiary Borrower has all necessary corporate (or,
if the New Subsidiary Borrower is not a corporation, other) power,
authority and legal right to execute and deliver this Subsidiary
Borrower Designation Letter, to perform its obligations under the
Credit Agreement and to borrow under the Credit Agreement; the
execution and delivery by the New Subsidiary Borrower of this
Subsidiary Borrower Designation Letter, and performance by the New
Subsidiary Borrower of the Credit Agreement and the borrowings by the
New Subsidiary Borrower under the Credit Agreement have been duly
authorized by all necessary corporate (or, if the New Subsidiary
Borrower is not a corporation, other) action on its part (including,
without limitation, any required shareholder approvals); and this
Subsidiary Borrower Designation Letter has been duly and validly
executed and delivered by the New Subsidiary Borrower and, together
with the Credit Agreement, constitutes, its legal, valid and binding
obligation, enforceable against the New Subsidiary Borrower in
accordance with its terms, except as such enforceability may be
limited by (a) bankruptcy, insolvency, reorganization, moratorium or
similar laws of general applicability affecting the enforcement of
creditors' rights and (b) the application of general principles of
equity (regardless of whether such enforceability is considered in a
proceeding in equity or at law);
(d) no authorizations, approvals or consents of, and no filings
or registrations with, any governmental or regulatory authority or
agency, or any securities exchange, are necessary for the execution
and delivery by the New Subsidiary Borrower of this Subsidiary
Borrower Designation Letter, or for the performance by the New
Subsidiary Borrower of the Credit Agreement, or for the legality,
validity or enforceability hereof or thereof, or for any borrowing by
the New Subsidiary Borrower under the Credit Agreement; and
(e) to the extent the New Subsidiary Borrower is a Foreign
Borrower, on and as of the date hereof, none of this Subsidiary
Borrower Designation Letter, the Credit Agreement or the execution or
delivery by the New Subsidiary Borrower of this Subsidiary Borrower
Designation letter, is subject to any Foreign Taxes, and no payment
Subsidiary Borrower Designation Letter
- 3 -
to be made by the New Subsidiary Borrower under the Credit Agreement
is subject to any Foreign Taxes, except for _________________.
The New Subsidiary Borrower hereby submits to the nonexclusive
jurisdiction of the United States District Court for the Southern District
of New York and of any New York state court sitting in New York City for
the purposes of all legal proceedings arising out of or relating to this
Agreement or the transactions contemplated hereby. The New Subsidiary
Borrower irrevocably waives, to the fullest extent permitted by applicable
law, any objection which it may now or hereafter have to the laying of the
venue of any such proceeding brought in such a court and any claim that any
such proceeding brought in such a court has been brought in an inconvenient
forum.
To the extent the New Subsidiary Borrower is a Foreign Borrower,
the New Subsidiary Borrower hereby agrees that service of all writs,
process and summonses in any such suit, action or proceeding brought
hereunder may be made upon CT Corporation, presently located at ▇▇▇▇
▇▇▇▇▇▇▇▇, ▇▇▇ ▇▇▇▇, ▇▇▇ ▇▇▇▇ ▇▇▇▇▇, ▇.▇.▇. (the "Process Agent"), and the
New Subsidiary Borrower hereby confirms and agrees that the Process Agent
has been duly and irrevocably appointed as its agent and true and lawful
attorney-in-fact in its name, place and stead to accept such service of any
and all such writs, process and summonses, and agrees that the failure of
the Process Agent to give any notice of any such service of process to the
New Subsidiary Borrower shall not impair or affect the validity of such
service or of any judgment based thereon. The New Subsidiary Borrower
hereby further irrevocably consents to the service of process in any suit,
action or proceeding in said courts by the mailing thereof by the
Administrative Agent or any Bank by registered or certified mail, postage
prepaid, at its address set forth beneath its signature hereto.
Nothing herein shall in any way be deemed to limit the ability of
the Administrative Agent or any Bank to serve any such writs, process or
summonses in any other manner permitted by applicable law or to obtain
jurisdiction over the New Subsidiary Borrower in such other jurisdictions,
and in such manner, as may be permitted by applicable law.
This Subsidiary Borrower Designation Letter shall be governed by
and construed in accordance with the law of the State of New York.
Subsidiary Borrower Designation Letter
- 4 -
IN WITNESS WHEREOF, the Company and the New Subsidiary Borrower
have caused this Agreement to be duly executed and delivered as of the day
and year first above written.
BOWATER INCORPORATED
By:
Name:
Title:
[NAME OF NEW SUBSIDIARY BORROWER]
By:
Name:
Title:
Accepted and Agreed:
THE CHASE MANHATTAN BANK,
as Administrative Agent
By:
Name:
Title:
Subsidiary Borrower Designation Letter
