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EXHIBIT 4
AMENDED AND RESTATED
REVOLVING CREDIT AGREEMENT
DATED as of March 30, 2000
among
▇▇▇▇ CORPORATION,
ZALE DELAWARE, INC.,
ZALE CANADA CO.
as Borrowers
the LENDERS listed on Schedule 1 hereto,
FLEET NATIONAL BANK
as Agent
CANADIAN IMPERIAL BANK OF COMMERCE
as Canadian Agent
FLEETBOSTON ▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇▇▇▇ INC.
as Arranger
and
BANK ONE, NA
as Syndication Agent
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TABLE OF CONTENTS
1. DEFINITIONS AND RULES OF INTERPRETATION..........................................................1
1.1. Definitions...........................................................................1
1.2. Rules of Interpretation..............................................................19
2. THE U.S. REVOLVING CREDIT FACILITY..............................................................20
2.1. Commitment to Lend...................................................................20
2.2. U.S. Commitment Fee and Utilization Fee..............................................20
2.3. Reduction of U.S. Total Commitment...................................................21
2.4. The Notes............................................................................21
2.5. Interest on U.S. Loans...............................................................21
2.6. Requests for U.S. Loans..............................................................22
2.7. Conversion Options...................................................................23
2.7.1. Conversion to Different Type of Loan......................................23
2.7.2. Continuation of Type of Loan..............................................23
2.7.3. Eurodollar Rate Loans.....................................................24
2.8. Funds for U.S. Loans.................................................................24
2.8.1. Funding Procedures for U.S. Loans to Domestic Borrowers...................24
2.8.2. Advances by Agent for U.S. Loans to Domestic Borrowers....................24
2.9. Settlements; Failure to Make Funds Available.........................................25
3. REPAYMENT OF THE U.S. LOANS.....................................................................26
3.1. Maturity.............................................................................26
3.2. Mandatory Repayments of Loans........................................................26
3.3. Optional Repayments of U.S. Loans....................................................26
4. THE CANADIAN REVOLVING CREDIT FACILITY..........................................................27
4.1. Commitment to Lend...................................................................27
4.2. Canadian Commitment Fee and Utilization Fee..........................................28
4.3. Reduction of Canadian Total Commitment...............................................28
4.4. The Canadian Loan Account............................................................28
4.5. Interest on Canadian Loans...........................................................28
4.6. Requests for Loans...................................................................29
4.7. Continuation of Canadian Loan........................................................30
4.8. Funds for Canadian Base Rate Loans...................................................30
4.8.1. Funding Procedures for Canadian Base Rate Loans to Zale Canada............30
4.8.2. Advances by Canadian Agent for Canadian Loans to Zale Canada..............30
4.9. Settlements; Failure to Make Funds Available.........................................31
4.10. Bankers' Acceptances.................................................................32
4.11. Conversions and Rollovers under Canadian Commitments.................................35
4.12. Fees for Bankers' Acceptances........................................................36
4.13. Proceeds of Bankers Acceptances......................................................36
5. REPAYMENT OF THE CANADIAN LOANS.................................................................36
5.1. Maturity.............................................................................36
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5.2. Mandatory Repayments of Canadian Loans...............................................36
5.3. Optional Repayments of Canadian Loans................................................37
6. LETTERS OF CREDIT...............................................................................37
6.1. Letter of Credit Commitments.........................................................37
6.1.1. Commitment to Issue Letters of Credit.....................................37
6.1.2. Letter of Credit Applications.............................................38
6.1.3. Terms of Letters of Credit................................................38
6.1.4. Reimbursement Obligations of U.S. Lenders.................................38
6.1.5. Participations of U.S. Lenders............................................38
6.2. Reimbursement Obligation of the Domestic Borrowers...................................38
6.3. Letter of Credit Payments............................................................39
6.4. Obligations Absolute.................................................................40
6.5. Reliance by Issuer...................................................................40
6.6. Letter of Credit Fees................................................................41
6.7. Cash Collateral for Letters of Credit................................................41
7. CERTAIN GENERAL PROVISIONS......................................................................41
7.1. Fee Letter...........................................................................41
7.2. Agent's and Arranger's Fee...........................................................42
7.3. Funds for Payments...................................................................42
7.3.1. Payments to Agent.........................................................42
7.3.2. No Offset, etc............................................................42
7.3.3. Foreign Lenders...........................................................43
7.3.4. Applicable Lending Office.................................................44
7.4. Computations.........................................................................44
7.5. Inability to Determine Eurodollar Rate...............................................44
7.6. Illegality...........................................................................45
7.7. Additional Costs, etc................................................................45
7.8. Capital Adequacy.....................................................................47
7.9. Certificate..........................................................................48
7.10. Assignment of Commitments Under Certain Circumstances................................48
7.11. Indemnity............................................................................48
7.12. Interest After Default...............................................................49
7.13. Interest Limitation..................................................................49
7.14. Performance Adjustments..............................................................49
7.15. Concerning Joint and Several Liability of the Domestic Borrowers.....................51
8. GUARANTIES......................................................................................54
8.1. Guaranty by the Domestic Borrowers of the Obligations................................54
8.1.1. Guaranty..................................................................54
8.1.2. Guaranty Absolute.........................................................54
8.1.3. Effectiveness; Enforcement................................................56
8.1.4. Waiver....................................................................56
8.1.5. Subordination; Subrogation................................................57
8.1.6. Payments..................................................................57
8.1.7. Receipt of Information....................................................58
9. REPRESENTATIONS AND WARRANTIES..................................................................58
9.1. Corporate Authority..................................................................58
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9.1.1. Incorporation; Good Standing..............................................58
9.1.2. Authorization.............................................................58
9.1.3. Enforceability............................................................58
9.2. Governmental Approvals...............................................................59
9.3. Title to Properties; Leases..........................................................59
9.4. Financial Statements and Projections.................................................59
9.4.1. Financial Statements......................................................59
9.4.2. Projections...............................................................59
9.5. No Material Changes, etc.............................................................60
9.6. Franchises, Patents, Copyrights, etc.................................................60
9.7. Litigation...........................................................................60
9.8. No Materially Adverse Contracts, etc.................................................60
9.9. Compliance with Other Instruments, Laws, etc.........................................61
9.10. Tax Status...........................................................................61
9.11. No Event of Default..................................................................61
9.12. Holding Company and Investment Company Acts..........................................61
9.13. Absence of Liens.....................................................................61
9.14. Certain Transactions.................................................................61
9.15. Employee Benefit Plans...............................................................62
9.15.1. In General................................................................62
9.15.2. Terminability of Welfare Plans............................................62
9.15.3. Guaranteed Pension Plans..................................................62
9.15.4. Multiemployer Plans.......................................................63
9.16. Regulations U and X..................................................................63
9.17. Environmental Compliance.............................................................63
9.18. Subsidiaries, etc....................................................................65
10. AFFIRMATIVE COVENANTS OF THE BORROWERS.........................................................66
10.1. Punctual Payment.....................................................................66
10.2. Maintenance of Office................................................................66
10.3. Records and Accounts.................................................................66
10.4. Financial Statements, Certificates and Information...................................66
10.5. Notices..............................................................................68
10.5.1. Defaults..................................................................68
10.5.2. Environmental Events......................................................68
10.5.3. Notice of Litigation and Judgments........................................68
10.6. Corporate Existence; Maintenance of Properties.......................................69
10.7. Insurance............................................................................69
10.8. Taxes................................................................................70
10.9. Inspection of Properties and Books, etc..............................................70
10.9.1. General...................................................................70
10.9.2. Communications with Accountants...........................................70
10.10. Compliance with Laws, Contracts, Licenses, and Permits...............................70
10.11. Employee Benefit Plans...............................................................71
10.12. Use of Proceeds......................................................................71
10.13. Further Assurances...................................................................71
11. CERTAIN NEGATIVE COVENANTS OF THE BORROWERS....................................................71
11.1. Restrictions on Indebtedness.........................................................71
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11.2. Restrictions on Liens................................................................73
11.3. Restrictions on Investments..........................................................75
11.4. Distributions........................................................................78
11.5. Merger, Consolidation and Disposition of Assets......................................79
11.5.1. Mergers and Acquisitions..................................................79
11.5.2. Disposition of Assets.....................................................80
11.6. Derivative Transactions..............................................................80
11.7. Compliance with Environmental Laws...................................................81
11.8. Employee Benefit Plans...............................................................81
11.9. Transactions with Affiliates.........................................................81
11.10. Receivables Facility Documents.......................................................82
11.11. ▇▇▇▇ Puerto Rico.....................................................................82
11.12. Negative Pledges.....................................................................82
11.13. Compliance with Certain Note Indenture Covenants.....................................83
12. FINANCIAL COVENANTS OF THE BORROWERS...........................................................84
12.1. Consolidated Funded Debt to Consolidated Adjusted EBITDA.............................84
12.2. Debt Service.........................................................................84
12.3. Consolidated Tangible Net Worth......................................................84
12.4. Consolidated Capital Expenditures....................................................84
13. CLOSING CONDITIONS.............................................................................85
13.1. Loan Documents.......................................................................85
13.2. Certified Copies of Charter Documents and Other Documents............................85
13.3. Corporate Action.....................................................................85
13.4. Incumbency Certificate...............................................................86
13.5. Settlement Statement.................................................................86
13.6. Opinion of Counsel...................................................................86
13.7. Payment of Fees......................................................................86
13.8. Financial Statements, Etc............................................................86
13.9. Materially Adverse Changes...........................................................86
13.10. Proceedings and Documents............................................................86
13.11. Further Assurances...................................................................86
14. CONDITIONS TO ALL BORROWINGS...................................................................87
14.1. Representations True; No Event of Default............................................87
14.2. No Legal Impediment..................................................................87
14.3. Governmental Regulation..............................................................87
14.4. Payment of Fees......................................................................87
15. EVENTS OF DEFAULT; ACCELERATION; ETC...........................................................87
15.1. Events of Default and Acceleration...................................................87
15.2. Termination of Commitments...........................................................90
15.3. Remedies.............................................................................91
15.4. Cash Collateral to Secure Outstanding Letters of Credit..............................91
15.5. Repayments of Loans and Distribution of Proceeds After Event of Default..............91
16. SETOFF.........................................................................................92
17. THE AGENT......................................................................................93
17.1. Authorization........................................................................93
17.2. Employees and Agents.................................................................94
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17.3. No Liability.........................................................................94
17.4. No Representations...................................................................94
17.5. Payments.............................................................................94
17.5.1. Payments to Agent and Canadian Agent......................................95
17.5.2. Distribution by Agent and Canadian Agent..................................95
17.5.3. Delinquent Lenders........................................................95
17.6. Holders of Notes.....................................................................96
17.7. Indemnity............................................................................96
17.8. Agent and Canadian Agent as Lenders..................................................96
17.9. Resignation; Removal.................................................................96
17.10. Notification of Defaults and Events of Default.......................................97
18. EXPENSES.......................................................................................97
19. INDEMNIFICATION................................................................................98
20. SURVIVAL OF COVENANTS, ETC.....................................................................99
21. TREATMENT OF CERTAIN CONFIDENTIAL INFORMATION..................................................99
21.1. Sharing of Information with Section 20 Subsidiary....................................99
21.2. Confidentiality.....................................................................100
21.3. Prior Notification..................................................................100
21.4. Other...............................................................................100
22. ASSIGNMENT AND PARTICIPATION..................................................................100
22.1. Conditions to Assignment by Lenders.................................................100
22.2. Accession...........................................................................101
22.3. Certain Representations and Warranties; Limitations; Covenants......................102
22.4. Register............................................................................103
22.5. New Notes...........................................................................103
22.6. Participations......................................................................104
22.7. Disclosure..........................................................................104
22.8. Assignee or Participant Affiliated with the Borrowers...............................104
22.9. Miscellaneous Assignment Provisions.................................................105
22.10. Assignment by Borrowers.............................................................105
23. NOTICES, ETC..................................................................................105
24. GOVERNING LAW.................................................................................106
25. HEADINGS......................................................................................106
26. COUNTERPARTS..................................................................................106
27. ENTIRE AGREEMENT, ETC.........................................................................106
28. WAIVER OF JURY TRIAL..........................................................................106
29. CONSENTS, AMENDMENTS, WAIVERS, ETC............................................................107
30. SEVERABILITY..................................................................................108
31. TRANSITIONAL ARRANGEMENTS.....................................................................108
31.1. Prior Credit Agreement Superseded...................................................108
31.2. Return and Cancellation of Notes....................................................108
31.3. Interest and Fees Under Prior Credit Agreement......................................108
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EXHIBITS AND SCHEDULES
Exhibit A Form of Note
Exhibit B Form of Loan Request
Exhibit B-1 Form of Canadian Loan Request
Exhibit C Form of Cash Collateral Agreement
Exhibit D Form of Compliance Certificate
Exhibit E Form of Assignment and Acceptance
Exhibit F Form of Instrument of Accession
Schedule 1 Lenders and Commitments
Schedule 6.1.1 Letters of Credit
Schedule 9.3 Titles to Properties; Leases
Schedule 9.7 Litigation
Schedule 9.10 Tax Status
Schedule 9.14 Certain Transactions
Schedule 9.17 Environmental Compliance
Schedule 9.18 Subsidiaries; etc.
Schedule 11.1 Existing Indebtedness
Schedule 11.2 Existing Liens
Schedule 11.3 Existing Investments
Schedule 11.5(e) Surplus Assets
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AMENDED AND RESTATED
REVOLVING CREDIT AGREEMENT
This AMENDED AND RESTATED REVOLVING CREDIT AGREEMENT is made as of
March 30, 2000 by and among ▇▇▇▇ CORPORATION, a Delaware corporation having its
principal place of business at ▇▇▇ ▇. ▇▇▇▇▇▇ ▇▇▇▇ ▇▇▇▇, ▇▇▇▇▇▇, ▇▇▇▇▇ ▇▇▇▇▇-▇▇▇▇
("Zale"), ▇▇▇▇ DELAWARE, INC., a Delaware corporation having its principal place
of business at ▇▇▇ ▇. ▇▇▇▇▇▇ ▇▇▇▇ ▇▇▇▇, ▇▇▇▇▇▇, ▇▇▇▇▇ ▇▇▇▇▇-▇▇▇▇ ("Zale
Delaware" and together with Zale, the "Domestic Borrowers"), ZALE CANADA CO., a
corporation organized under the laws of the province of Nova Scotia having its
principal place of business at ▇▇▇ ▇. ▇▇▇▇▇▇ ▇▇▇▇ ▇▇▇▇, ▇▇▇▇▇▇, ▇▇▇▇▇ ▇▇▇▇▇-▇▇▇▇
("Zale Canada" and together with the Domestic Borrowers, the "Borrowers"), FLEET
NATIONAL BANK, a national banking association, and the other lending
institutions from time to time parties hereto (collectively, the "Lenders"),
FLEET NATIONAL BANK, as agent for itself and the Lenders, CANADIAN IMPERIAL BANK
OF COMMERCE, a Canadian chartered bank, as agent for itself and the Lenders,
FLEETBOSTON ▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇▇▇▇ INC., as arranger for the Lenders, and BANK ONE,
NA, as syndication agent for the Lenders.
WHEREAS, pursuant to a Revolving Credit Agreement dated as of March 31,
1997 (as amended from time to time and in effect as of the date hereof, the
"Prior Credit Agreement") among (a) the Domestic Borrowers, (b) Fleet National
Bank (f/k/a BankBoston, N.A.) and certain of the Lenders, and (c) Fleet National
Bank (f/k/a BankBoston, N.A.), as agent, the Lenders parties thereto made loans
and other extensions of credit available to the Domestic Borrowers for, among
other things, general corporate and working capital purposes; and
WHEREAS, the Borrowers have requested, among other things, to amend and
restate the Prior Credit Agreement and to provide additional financing, and the
Lenders are willing to amend and restate the Prior Credit Agreement and to
provide such additional financing on the terms and conditions set forth herein;
NOW THEREFORE, the Borrowers, the Lenders and the Agent agree that on
and as of the Closing Date (as hereinafter defined) the Prior Credit Agreement
is hereby amended and restated in its entirety and shall remain in full force
and effect only as expressly set forth herein.
1. DEFINITIONS AND RULES OF INTERPRETATION.
1.1. DEFINITIONS. The following terms shall have the meanings set forth
in this Section 1 or elsewhere in the provisions of this Credit Agreement
referred to below:
Acceding Bank. See Section 22.2.
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Acceptance Rate. With respect to any Canadian Lender at the time of any
Canadian Loan Request for a Canadian Loan by way of Bankers' Acceptance, the
rate per annum equal to the then prevailing Eurodollar Applicable Margin.
Affiliate. Any Person directly or indirectly controlling, controlled by
or under direct or indirect common control with Zale (or another specified
Person) and shall include (a) any Person who is an officer, director or
beneficial holder of at least ten percent (10%) of the outstanding capital stock
of Zale (or another specified Person) and (b) any Person of which Zale (or
another specified Person) or an Affiliate (as defined in clause (a) above) of
Zale (or another specified Person) shall, directly or indirectly beneficially
own at least ten percent (10%) of the outstanding equity securities or
constitute at least a ten percent (10%) equity participant, and (c) in the case
of a specified Person who is an individual, the mother, father, spouse or child
of such Person.
Agent. Fleet National Bank (and its respective successors and assigns)
acting as agent for the Lenders.
Agent's Fee Letter. See Section 7.2.
Agent's Office. The Agent's Office located at ▇▇▇ ▇▇▇▇▇▇▇ ▇▇▇▇▇▇,
▇▇▇▇▇▇, ▇▇▇▇▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇, or at such other location in the Boston,
Massachusetts area as the Agent may designate from time to time.
Agent's Special Counsel. ▇▇▇▇▇▇▇ ▇▇▇▇ LLP or such other counsel as may
be approved by the Agent.
Amortization Commencement Date. As defined in the Receivables Facility
Documents.
Applicable Lending Office. With respect to each Lender, its Domestic
Lending Office in the case of a U.S. Loan that is a Base Rate Loan, its
Eurodollar Lending Office in the case of a Eurodollar Rate Loan, and its
Canadian Lending Office in the case of a Canadian Loan.
Arranger. FleetBoston ▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇▇▇▇ Inc., in its capacity as
arranger of the credit facilities provided by the Lenders under the Loan
Documents.
Assignment and Acceptance. See Section 22.1.
Balance Sheet Date. January 31, 2000.
BA Discount Proceeds. With respect to any Bankers' Acceptance, an
amount calculated on the applicable Drawdown Date which is (rounded to the
nearest full cent) equal to the face amount of such Bankers' Acceptance divided
by the sum of one plus the product of (i) the BA Discount Rate applicable
thereto multiplied by (ii) a fraction, the numerator of which is the term of
such Bankers' Acceptance and the denominator of which is 365.
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BA Discount Rate. With respect to any Bankers' Acceptances to be
purchased by the Canadian Lenders on any Drawdown Date, (i) for each Canadian
Lender that is not a bank named in Schedule 1 or Schedule II to the Bank Act
(Canada), the arithmetic average (rounded upward to the nearest 1/100 of 1%) of
the respective annual discount rates notified to the Agent by the BA Reference
Lenders as of 10:00 a.m. on such Drawdown Date as the discount rate of interest
at which each BA Reference Lender is then offering to purchase bankers'
acceptances accepted by it having an identical maturity date and comparable
aggregate face amount to the maturity date and aggregate face amount of such
Bankers' Acceptances, (ii) for each Canadian Lender that is a bank named in
Schedule II to the Bank Act (Canada), the lesser of (A) the average discount
rate referred to in clause (i) above plus 1/10 of 1% and (B) the discount rate
of interest at which such Canadian Lender is offering as of 10:00 a.m. on such
Drawdown Date to purchase bankers' acceptances accepted by it having an
identical maturity date and comparable aggregate face amount to the maturity
date and aggregate face amount of such Banker's Acceptances, and (iii) for each
Canadian Lender that is a bank named in Schedule I to the Bank Act (Canada), the
discount rate of interest at which such Canadian Lender is offering as of 10:00
a.m. on such Drawdown Date to purchase bankers' acceptances accepted by it
having an identical maturity date and comparable aggregate face amount to the
maturity date and aggregate face amount of such Bankers' Acceptances.
BA Reference Lenders. Canadian Imperial Bank of Commerce, Royal Bank of
Canada and Bank of Montreal.
Bankers' Acceptance. A Draft which has been accepted by a Canadian
Lender.
Base Rate. The higher of (i) the annual rate of interest announced from
time to time by FNB at its head office in Boston, Massachusetts, as its "base
rate" and (ii) one-half of one percent (1/2%) plus the Federal Funds Effective
Rate. For the purposes of this definition, "Federal Funds Effective Rate" shall
mean for any day, the rate per annum 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, as published for such day (or, if such
day is not a Business Day, for the next preceding Business Day) by the Federal
Reserve Bank of New York, or, if such rate is not so published for any day that
is a Business Day, the average of the quotations for such day on such
transactions received by the Agent from three federal funds brokers of
recognized standing selected by the Agent.
Base Rate Loans. Loans to the Domestic Borrowers denominated in Dollars
bearing interest calculated by reference to the Base Rate.
Borrower(s). As defined in the preamble hereto.
Business Day. Any day on which banking institutions in Boston,
Massachusetts, Dallas, Texas and New York, New York are open for the transaction
of banking business and, (a) if Eurodollar Rate Loans denominated in Dollars are
involved, also a day which is a Eurodollar Business Day, and (b) if Canadian
Loans denominated in Canadian Dollars are involved, also a day on which banking
institutions in Toronto, Canada are open for the transaction of banking
business.
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Canadian Agent. Canadian Imperial Bank of Commerce acting as agent for
the Canadian Lenders.
Canadian Agent's Office. The Canadian Agent's office located at ▇▇▇ ▇▇▇
▇▇▇▇▇▇, ▇▇▇ ▇▇▇▇▇, ▇▇▇▇▇▇▇, ▇▇▇▇▇▇▇ ▇▇▇ ▇▇▇, or at such other location in the
Toronto, Ontario area as the Canadian Agent may designate from time to time.
Canadian Base Rate. On any day, the annual rate of interest announced
from time to time by the Canadian Agent as its "prime rate" for commercial loans
in Canadian Dollars to borrowers in Canada (it being understood that such rate
is a reference rate and not necessarily the lowest rate of interest charged by
the Canadian Agent).
Canadian Base Rate Loans. Loans to ▇▇▇▇ Canada denominated in Canadian
Dollars bearing interest calculated by reference to the Canadian Base Rate.
Canadian Commitment. With respect to each Canadian Lender, (a) the
amount set forth on Schedule 1 hereto as the amount of such Canadian Lender's
commitment to make Canadian Loans to ▇▇▇▇ Canada, as the same may be changed
from time to time in accordance with the provisions of this Credit Agreement; or
if such commitment is terminated pursuant to the provisions hereof, zero or (b)
if such Canadian Lender has entered into one or more Assignments and
Acceptances, then the amount set forth for such Canadian Lender in the Register
maintained by the Agent and Canadian Agent as the amount of such Canadian
Lender's commitment to make Canadian Loans to ▇▇▇▇ Canada, as the same may be
changed from time to time in accordance with the provisions of this Credit
Agreement; or if such commitment is terminated pursuant to the provisions
hereof, zero.
Canadian Commitment Percentage. With respect to each Canadian Lender,
the applicable percentage set forth on Schedule 1, as the same may be amended
from time to time in accordance with the provisions hereof, as such Canadian
Lender's percentage of the aggregate Canadian Commitments of all of the Canadian
Lenders.
Canadian Dollar Equivalent. On any date, with respect to any amount
denominated in Dollars, the amount (as conclusively ascertained by the Agent
absent manifest error) of Canadian Dollars which could be purchased by the Agent
or Canadian Agent (in accordance with their normal banking practices) in the
Toronto foreign currency deposit markets with such amount of Dollars at the spot
rate of exchange prevailing at or about 11:00 a.m. (Toronto time) on such date.
Canadian Dollars or C$. Dollars designated as lawful currency in
Canada.
Canadian Lenders. Canadian Imperial Bank of Commerce and the other
lending institutions designated as such on Schedule 1 hereto and any other
Person who becomes an assignee of any rights and obligations of a Canadian
Lender pursuant to Section 22.
Canadian Lending Office. Initially, the office of each Canadian Lender
designated as such in Schedule 1 hereto; thereafter, such other office of such
Canadian Lender, if any, located within Canada that will be making or
maintaining Canadian Loans.
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Canadian Loan Request. See Section 4.6(a).
Canadian Loans. Revolving credit loans and accommodations by way of
Bankers' Acceptances made or to be made by the Canadian Lenders to ▇▇▇▇ Canada
pursuant to Section 4.
Canadian Settlement. The making of, or receiving of payments, in
immediately available funds, by the Canadian Lenders, to the extent necessary to
cause each Canadian Lender's actual share of the outstanding amount of Canadian
Loans (after giving effect to any Canadian Loan Request) to be equal to such
Canadian Lender's Canadian Commitment Percentage of the outstanding amount of
such Canadian Loans (after giving effect to any Canadian Loan Request), in any
case where, prior to such event or action, the actual share is not so equal.
Canadian Settlement Amount. See Section 4.9(a).
Canadian Settlement Date. (a) The Business Day immediately following
the Canadian Agent's becoming aware of the existence of an Event of Default, (b)
the Business Day immediately following written notice given by the Canadian
Agent to the Canadian Lenders of the Canadian Agent's desire to effect a
Canadian Settlement, or (c) any Business Day on which (i) the amount of
outstanding Canadian Loans decreases and (ii) the amount of the Canadian Agent's
Canadian Loans outstanding equals Zero Canadian Dollars.
Canadian Settling Lender. See Section 4.9(a).
Canadian Total Commitment. The sum of the Canadian Commitments of the
Canadian Lenders, as in effect from time to time (which shall be C$_______, the
Canadian Dollar Equivalent of $10,000,000 as of the Closing Date).
Capital Assets. Fixed assets, both tangible (such as land, buildings,
fixtures, machinery and equipment) and intangible (such as patents, copyrights,
trademarks, franchises and good will); provided that Capital Assets shall not
include any item customarily charged directly to expense or depreciated over a
useful life of twelve (12) months or less in accordance with generally accepted
accounting principles.
Capitalized Leases. Leases under which ▇▇▇▇ or any of its Subsidiaries
is the lessee or obligor, the discounted future rental payment obligations under
which are required to be capitalized on the balance sheet of the lessee or
obligor in accordance with generally accepted accounting principles.
Cash Collateral Agreement. See Section 6.7.
CERCLA. See Section 9.17.
Change of Control. As set forth in the Note Indenture.
Closing Date. The first date on which the conditions set forth in
Section 13 have been satisfied.
Code. The Internal Revenue Code of 1986, as amended.
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Commitment Fee Rate. The applicable rate per annum set forth in the
chart contained in Section 7.14 hereof under the heading "Commitment Fee Rate".
Consolidated or consolidated. With reference to any term defined
herein, shall mean that term as applied to the accounts of ▇▇▇▇ and its
Subsidiaries, consolidated in accordance with generally accepted accounting
principles.
Consolidated Adjusted EBITDA. Consolidated EBITDA for any period, but
excluding the "net credit income" (consisting of income from proprietary credit
cards net of all expenses associated with the management of such proprietary
credit cards (which expenses shall exclude the bad debt reserve provision)) of
▇▇▇▇ and its Subsidiaries, as determined in a manner consistent with that used
for the audited consolidated statement of income for the fiscal year ended as of
the Balance Sheet Date.
Consolidated Capital Expenditures. Amounts paid or indebtedness
incurred by ▇▇▇▇ or any of its Subsidiaries in connection with the purchase or
lease by Zale or any of its Subsidiaries of Capital Assets that would be
required to be capitalized and shown on the balance sheet of such Person in
accordance with generally accepted accounting principles.
Consolidated EBITDA. Consolidated Net Income for any period in
accordance with generally accepted accounting principles plus (a) without
duplication, the sum of the following expenses of Zale and its Subsidiaries for
such period, in each case to the extent included in determining said
Consolidated Net Income: (i) depreciation expenses, (ii) amortization expense,
(iii) interest expense, (iv) total U.S. and foreign federal, state, provincial
and local income tax expense, and (v) charges relating to the valuation of
inventory by the application of the LIFO (last in/first out) method of inventory
valuation less (b) without duplication, the sum of (i) amortization of fresh
start credit for such period, (ii) income earned during such period relating to
the valuation of inventory by the application of the LIFO method of inventory
valuation, (iii) interest income for such period (other than interest income of
ZFT or a replacement Receivables Subsidiary), and (iv) total U.S. and foreign
federal, state, provincial and local income tax benefits provided during such
period.
Consolidated Funded Debt. As at any date of determination, an amount
(without duplication) equal to the aggregate amount of all Indebtedness relating
to the borrowing of money of ▇▇▇▇ and its Subsidiaries, on a consolidated basis,
whether absolute or contingent, including, to the extent not included in such
Indebtedness, all Capitalized Leases and all Indebtedness relating to the
borrowing of money guaranteed by any of ▇▇▇▇ or its Subsidiaries, but excluding,
to the extent otherwise included in such Indebtedness, all Indebtedness incurred
in respect of the Receivables Facility Documents.
Consolidated Net Income. The consolidated net income (or loss) of Zale
and its Subsidiaries, after deduction of all expenses, taxes, and other proper
charges, determined in accordance with generally accepted accounting principles,
after eliminating therefrom all extraordinary items of income or loss.
Consolidated Rental Obligations. All present or future obligations of
▇▇▇▇ or any of its Subsidiaries under any rental agreements or leases of real or
personal property, other
14
-7-
than (a) obligations that can be terminated by the giving of notice without
liability to ▇▇▇▇ or such Subsidiary in excess of the liability for rent due as
of the date on which such notice is given and under which no penalty or premium
is paid as a result of any such termination, and (b) obligations of Zale or such
Subsidiary in respect of Capitalized Leases.
Consolidated Tangible Net Assets. Consolidated Total Assets, excluding
those assets properly classified as intangible assets under generally accepted
accounting principles.
Consolidated Tangible Net Worth. The excess of Consolidated Total
Assets over Consolidated Total Liabilities, and less the sum of:
(a) the total book value of all assets of Zale and its Subsidiaries
properly classified as intangible assets under generally accepted accounting
principles, including such items as goodwill, the purchase price of acquired
assets in excess of the fair market value thereof, trademarks, trade names,
service marks, brand names, copyrights, patents and licenses, and rights with
respect to the foregoing; plus
(b) all amounts representing any write-up in the book value of any
assets of Zale or its Subsidiaries resulting from a revaluation thereof
subsequent to the Balance Sheet Date; plus
(c) all amounts representing the deferred fresh start credit as of the
date of determination.
Consolidated Total Assets. All assets of Zale and its Subsidiaries
determined on a consolidated basis in accordance with generally accepted
accounting principles.
Consolidated Total Debt Service. With respect to any period, an amount
equal to the sum of all payments on Indebtedness that were required to be paid
or accrued during such period (including interest but excluding any amounts
accrued during a prior period) pursuant to any agreement or instrument to which
▇▇▇▇ or any of its Subsidiaries is a party relating to the borrowing of money or
the obtaining of credit or in respect of Capitalized Leases. Demand obligations
shall be deemed to be due and payable during any fiscal year during which such
obligations are outstanding.
Consolidated Total Liabilities. All liabilities of ▇▇▇▇ and its
Subsidiaries determined on a consolidated basis in accordance with generally
accepted accounting principles, including without duplication, all liabilities
of ▇▇▇▇ and its Subsidiaries, whether or not so classified, under the
Receivables Facility Documents; provided, however, that any deferred fresh start
credit as of the date of determination shall not be considered to be a
liability.
Conversion Request. A notice given by the Domestic Borrowers or ▇▇▇▇
Canada to the Agent or the Canadian Agent of such Borrower's election to convert
or continue a U.S. Loan in accordance with Section 2.7 or a Canadian Loan in
accordance with Section 4.11.
Credit Agreement. This Revolving Credit Agreement, including the
Schedules and Exhibits hereto.
15
-8-
Default. See Section 15.1.
Delinquent Lender. See Section 17.5.3.
Derivative Transactions. Every obligation of any Person under any
forward contract, futures contract, swap, option or other financing agreement or
arrangement (including, without limitation, caps, floors, collars and similar
agreements), the value of which is dependent upon interest rates, currency
exchange rates, commodities or other indices.
Designated Subsidiaries. ▇▇▇▇ Puerto Rico and any other Subsidiary
which becomes a Designated Subsidiary pursuant to the provisions hereof at any
time after the Closing Date.
Distribution. The declaration or payment of any dividend on or in
respect of any shares of any class of capital stock of ▇▇▇▇ (or other specified
Person), other than dividends payable solely in shares of common stock of ▇▇▇▇
(or other specified Person); the purchase, redemption, or other retirement of
any shares of any class of capital stock of ▇▇▇▇ (or other specified Person),
directly or indirectly through a Subsidiary of ▇▇▇▇ (or other specified Person)
or otherwise; the return of capital by ▇▇▇▇ (or other specified Person) to its
shareholders as such; or any other distribution on or in respect of any shares
of any class of capital stock of ▇▇▇▇ (or other specified Person).
▇▇▇▇▇▇▇. ▇▇▇▇▇▇▇ Jewelers, Inc., a Guam corporation.
Documentary Letter of Credit Applicable Margin. The applicable rate per
annum set forth in the chart contained in Section 7.14 hereof under the heading
"Documentary Letter of Credit Applicable Margin".
Dollar Equivalent. On any particular date, with respect to any amount
denominated in Dollars, such amount of Dollars, and with respect to any amount
denominated in a currency other than Dollars, the amount (as conclusively
ascertained by the Agent absent manifest error) of Dollars which could be
purchased by the Agent (in accordance with its normal banking practices) in the
London foreign currency deposit markets with such amount of such currency at the
spot rate of exchange prevailing at or about 11:00 a.m. (London time) on such
date.
Dollars or $. Dollars in lawful currency of the United States of
America.
Domestic Borrower(s). As defined in the preamble hereto.
Domestic Lending Office. Initially, the office of each U.S. Lender
designated as such in Schedule 1 hereto; thereafter, such other office of such
U.S. Lender, if any, located within the United States that will be making or
maintaining Base Rate Loans.
Draft. See Section 4.10(a).
16
-9-
Drawdown Date. The date on which any Loan is made or is to be made, and
the date on which any Loan is converted or continued in accordance with
Sections 2.7 or 4.7, as the case may be.
Eligible Assignee. (i) With respect to any U.S. Lender assigning its
rights hereunder, any of the following which has an office or branch located in
the United States of America: (a) a commercial bank or commercial finance
company organized under the laws of the United States, or any state thereof or
the District of Columbia, and having total assets in excess of $1,000,000,000;
(b) a savings and loan association or savings bank organized under the laws of
the United States, or any State thereof or the District of Columbia, and having
a net worth of at least $100,000,000, calculated in accordance with generally
accepted accounting principles; (c) a commercial bank organized under the laws
of any other country which is a member of the Organization for Economic
Cooperation and Development (the "OECD"), or a political subdivision of any such
country, and having total assets in excess of $1,000,000,000, provided that such
bank is acting through a branch or agency located in the country in which it is
organized or another country which is also a member of the OECD; (d) the central
bank of any country which is a member of the OECD; and (e) if, but only if, any
Event of Default has occurred and is continuing, any other bank, insurance
company, commercial finance company or other financial institution or other
Person which other Person is not a competitor of the Borrowers and the
Designated Subsidiaries, or any of them, in each case approved by the Agent,
such approval not to be unreasonably withheld or delayed, and (ii) with respect
to any Canadian Lender assigning its rights hereunder, any of the following
which has an office or branch located in Canada: (a) a Schedule I or Schedule II
chartered bank; (b) any loan or trust corporation or other financial institution
organized under the laws of Canada or any province thereof and having total
assets in excess of C$2,000,000,000; and (c) if, but only if, any Event of
Default has occurred and is continuing, any other bank, insurance company,
commercial finance company or other financial institution or other Person which
is not a competitor of the Borrowers and the Designated Subsidiaries, or any of
them, in each case approved by the Canadian Agent, such approval not be
unreasonably withheld or delayed.
Employee Benefit Plan. Any employee benefit plan within the meaning of
Section 3(3) of ERISA maintained or contributed to by either of the Borrowers or
any ERISA Affiliate, other than a Multiemployer Plan, and with respect to ▇▇▇▇
Canada, all employee benefit programs relating to employees of ▇▇▇▇ Canada other
than pension plans, but including profit sharing, deferred compensation,
incentive, severance, change of control, phantom stock, stock option, stock
purchase, bonus, health or insurance plans and arrangements (in each case, oral
or written).
Environmental Laws. See Section 9.17(a).
ERISA. The Employee Retirement Income Security Act of 1974, as amended.
ERISA Affiliate. Any Person which is treated as a single employer with
either of the Domestic Borrowers under Section 414 of the Code.
17
-10-
ERISA Reportable Event. A reportable event with respect to a Guaranteed
Pension Plan within the meaning of Section 4043 of ERISA and the regulations
promulgated thereunder as to which the requirement of notice has not been
waived.
Eurocurrency Reserve Rate. For any day with respect to a Eurodollar
Rate Loan, the maximum rate (expressed as a decimal) at which any Lender subject
thereto would be required to maintain reserves under Regulation D of the Board
of Governors of the Federal Reserve System (or any successor or similar
regulations relating to such reserve requirements) against "Eurocurrency
Liabilities" (as that term is used in said Regulation D), if such liabilities
were outstanding. The Eurocurrency Reserve Rate shall be adjusted automatically
on and as of the effective date of any change in the Eurocurrency Reserve Rate.
Eurodollar Applicable Margin. The applicable rate per annum set forth
in the chart contained in Section 7.14 hereof under the heading "Eurodollar
Applicable Margin".
Eurodollar Business Day. Any day on which commercial banks are open for
international business (including dealings in Dollar deposits) in such
eurodollar interbank market as may be selected by the Agent in its sole
discretion acting in good faith.
Eurodollar Lending Office. Initially, the office of each U.S. Lender
designated as such in Schedule 1 hereto; thereafter, such other office of such
U.S. Lender, if any, that shall be making or maintaining Eurodollar Rate Loans.
Eurodollar Rate. For any Interest Period with respect to a Eurodollar
Rate Loan, the rate of interest equal to (i) the rate per annum for FNB (rounded
upwards to the nearest 1/100 of one percent) of the rate at which FNB's
Eurodollar Lending Office is offered Dollar deposits two Eurodollar Business
Days prior to the beginning of such Interest Period in the interbank eurodollar
market where the eurodollar and foreign currency and exchange operations of such
Eurodollar Lending Office are customarily conducted, for delivery on the first
day of such Interest Period for the number of days comprised therein and in an
amount comparable to the amount of the Eurodollar Rate Loan of FNB to which such
Interest Period applies, divided by (ii) a number equal to 1.00 minus the
Eurocurrency Reserve Rate, if applicable.
Eurodollar Rate Loans. Loans bearing interest calculated by reference
to the Eurodollar Rate.
Event of Default. See Section 15.1.
Excluded Assignee. Any otherwise Eligible Assignee which at the time of
any proposed assignment is:
(i) subject to any unrescinded finding of any court, agency or
supervisory authority of competent jurisdiction, or has made any
unrevoked admission in writing, that any of the following conditions
exist: (A) such institution's assets are less than its obligations to
others, (B) such institution's assets or earnings are substantially
dissipated due to violations of law, rules or regulations or to unsafe
or
18
-11-
unsound practices, (C) such institution is in an unsafe or
unsound condition to transact business, (D) such institution has
concealed its records or assets or refuses to submit its records or
affairs for inspection to an examiner or lawful agent of any agency of
supervisory authority of competent jurisdiction, or (E) such
institution is insolvent;
(ii) under or in conservatorship, receivership, trusteeship or
similar supervision by a Person appointed by a court, agency or
supervisory authority of competent jurisdiction in connection with any
insolvency, readjustment of debt, marshalling of assets, bankruptcy,
reorganization or similar proceeding of or relating to all, or
substantially all, of its property, or for the winding-up or
liquidation of its affairs;
(iii) the subject of proceedings under any law relating to
bankruptcy, insolvency or the reorganization or relief of debtors;
(iv) subject to a plan for dissolution authorized or ratified
(and not revoked) by a majority vote of its Board of Directors; or
(v) if such otherwise Eligible Assignee is of a type described
in clause (c) of the definition of Eligible Assignee, without a license
to conduct banking business from the applicable foreign agency or
supervisory authority of competent jurisdiction.
Excluded Subsidiaries. Zale Life Insurance Company, Zale Indemnity
Company, ▇▇▇, ▇▇▇, ▇▇▇, ▇▇▇▇ ▇▇▇▇▇▇▇▇▇▇▇▇▇, ▇▇▇., ▇▇▇▇ ▇▇▇▇▇▇ Finance, Inc.,
▇▇▇▇▇▇▇, ▇▇▇▇▇ Re-Insurance, Ltd., Zale Employees' Child Care Association, Inc.,
ZFT or any other Receivables Subsidiary.
Extension Request Date. See Section 2.1(b).
Fee Letter. See Section 7.1.
FNB. Fleet National Bank, a national banking association, (and its
respective successors and assigns) in its individual capacity.
generally accepted accounting principles. (a) When used in Section 12,
whether directly or indirectly through reference to a capitalized term used
therein, means (i) principles that are consistent with the principles
promulgated or adopted by the Financial Accounting Standards Board ("FASB") and
its predecessors or, to the extent not inconsistent with the principles
promulgated by FASB, by the American Institute of Certified Public Accountants
("AICPA") or other nationally recognized organization composed of expert
accountants, in effect for the fiscal year ended on the Balance Sheet Date, and
(ii) to the extent consistent with such principles, the accounting practice of
▇▇▇▇ reflected in its financial statements for the period ended on the Balance
Sheet Date, and (b) when used in general, other than as provided above, means
principles that (i) are consistent with the principles promulgated or adopted by
FASB and its predecessors or, to the extent not inconsistent with the principles
promulgated by FASB, by the AICPA or other nationally recognized organization
19
-12-
composed of expert accountants, as in effect from time to time, and (ii) are
consistently applied with past financial statements of ▇▇▇▇ and its consolidated
Subsidiaries adopting the same principles, provided that in each case referred
to in this definition of "generally accepted accounting principles" a certified
public accountant would, insofar as the use of such accounting principles is
pertinent, be in a position to deliver an unqualified opinion (other than a
qualification regarding changes in generally accepted accounting principles) as
to financial statements in which such principles have been properly applied.
Guarantee. (a) Any obligation, contingent or otherwise, of any Person
guaranteeing or having the economic effect of guaranteeing any Indebtedness of
any other Person (the "primary obligor") in any manner, whether directly or
indirectly, and including, without duplication, any obligation of such Person,
direct or indirect, (i) to purchase or pay (or advance or supply funds for the
purchase or payment of) such Indebtedness (whether arising by virtue of
partnership arrangements, by agreements to keep well, to purchase assets, goods,
securities or services, to take-or-pay or otherwise) or to purchase (or to
advance or supply funds for the purchase of) any security for the payment of
such Indebtedness, (ii) to purchase or lease property, securities or services
for the purpose of assuring the owner of such Indebtedness of the payment of
such Indebtedness, (iii) to maintain working capital, equity capital or any
other financial statement condition or liquidity of the primary obligor so as to
enable the primary obligor to pay such Indebtedness or (iv) entered into for the
purpose of assuring in any other manner the holders of such Indebtedness of the
payment thereof, or (b) any mortgage, pledge, security interest, lien, charge or
other encumbrance on any assets of such Person securing any Indebtedness of any
other Person, whether or not such Indebtedness is assumed by such Person;
provided, however, that the term "Guarantee" shall not include endorsements for
collection or deposit, in either case in the ordinary course of business, or
customary and reasonable indemnity obligations in effect on the Closing Date or
entered into in connection with any acquisition or disposition of assets
permitted under this Credit Agreement.
Guaranteed Obligations. See Section 8.1.1.
Guaranteed Pension Plan. Any employee pension benefit plan within the
meaning of Section 3(2) of ERISA maintained or contributed to by either of the
Borrowers or any ERISA Affiliate the benefits of which are guaranteed on
termination in full or in part by the PBGC pursuant to Title IV of ERISA, other
than a Multiemployer Plan, and with respect to ▇▇▇▇ Canada, all pension and
retirement plans relating to the current and former employees of ▇▇▇▇ Canada,
whether registered or unregistered, funded or unfunded and written or oral.
Hazardous Substances. See Section 9.17(b).
Indebtedness. Without duplication, with respect to any Person (a) all
obligations of such Person for borrowed money, (b) all obligations of such
Person evidenced by bonds, debentures, notes or similar instruments, (c) all
Guarantees by such Person of Indebtedness of others, (d) all obligations in
respect of Capitalized Leases of such Person, and (e) all obligations
(contingent or otherwise) of such Person as an account party or applicant in
respect of letters of credit and bankers' acceptances.
20
-13-
Instrument of Accession. See Section 22.2
Interest Payment Date. (i) As to any Base Rate Loan, the first Business
Day of the calendar quarter following the calendar quarter which includes the
Drawdown Date thereof; and (ii) as to any Eurodollar Rate Loan in respect of
which the Interest Period is (A) three (3) months or less, the last day of such
Interest Period and (B) more than three (3) months, the date that is three (3)
months from the first day of such Interest Period, and, in addition, the last
day of such Interest Period.
Interest Period. With respect to each Loan, (i) initially, the period
commencing on the Drawdown Date of such Loan and ending on the last day of one
of the periods set forth below, as selected by the Borrowers in a Loan Request
(A) for any Base Rate Loan, the last day of the calendar quarter in which such
Drawdown Date occurs; and (B) for any Eurodollar Rate Loan, 1, 2, 3 or 6 months;
and (ii) thereafter, each period commencing on the last day of the next
preceding Interest Period applicable to such Loan and ending on the last day of
one of the periods set forth above, as selected by the Borrowers in a Conversion
Request; provided that all of the foregoing provisions relating to Interest
Periods are subject to the following:
(a) if any Interest Period with respect to a Eurodollar Rate
Loan would otherwise end on a day that is not a Eurodollar Business
Day, that Interest Period shall be extended to the next succeeding
Eurodollar Business Day unless the result of such extension would be to
carry such Interest Period into another calendar month, in which event
such Interest Period shall end on the immediately preceding Eurodollar
Business Day;
(b) if any Interest Period with respect to a Base Rate Loan
would end on a day that is not a Business Day, that Interest Period
shall end on the next succeeding Business Day;
(c) if the Borrowers shall fail to give notice as provided in
Section 2.7, the Borrower shall be deemed to have requested a
conversion of the affected Eurodollar Rate Loan to a Base Rate Loan and
the continuance of all Base Rate Loans as Base Rate Loans on the last
day of the then current Interest Period with respect thereto;
(d) any Interest Period relating to any Eurodollar Rate Loan
that begins on the last Eurodollar Business Day of a calendar month (or
on a day for which there is no numerically corresponding day in the
calendar month at the end of such Interest Period) shall end on the
last Eurodollar Business Day of a calendar month; and
(e) any Interest Period relating to any Loan that would
otherwise extend beyond the Maturity Date shall end on the Maturity
Date.
Investments. All expenditures made and all liabilities incurred
(contingent or otherwise) for the acquisition of stock or Indebtedness of, or
for loans, advances, capital contributions or contributions of property to, or
in respect of any Guarantees (or other commitments as described under
Indebtedness) or obligations of, any Person. In determining the aggregate amount
of Investments outstanding at any particular time: (i)
21
-14-
the amount of any Investment represented by a Guarantee shall be taken at not
less than the principal amount of the obligations guaranteed and still
outstanding; (ii) there shall be included as an Investment all interest accrued
with respect to Indebtedness constituting an Investment unless and until such
interest is paid; (iii) there shall be deducted in respect of each such
Investment any amount received as a return of capital (but only by repurchase,
redemption, retirement, repayment, liquidating dividend or liquidating
distribution); (iv) there shall not be deducted in respect of any Investment any
amounts received as earnings on such Investment, whether as dividends, interest
or otherwise, except that accrued interest included as provided in the foregoing
clause (ii) may be deducted when paid; and (v) there shall not be deducted from
the aggregate amount of Investments any decrease in the value thereof.
JCC. Jewelers Credit Corporation, a Delaware corporation.
JFS. Jewelers Financial Services, Inc., a Delaware corporation.
JNB. Jewelers National Bank, a national banking association.
Lenders. Collectively, (i) the U.S. Lenders and (ii) the Canadian
Lenders.
Letter of Credit. See Section 6.1.1.
Letter of Credit Application. See Section 6.1.1.
Letter of Credit Cash Collateral Account. See Section 6.7.
Letter of Credit Fee. See Section 6.6.
Letter of Credit Participation. See Section 6.1.4.
Loan Documents. This Credit Agreement, the Notes, the Fee Letter, the
Agent's Fee Letter, the Letter of Credit Applications, the Letters of Credit,
and the Cash Collateral Agreement.
Loan Request. See Section 2.6(a).
Loans. Collectively, (i) the U.S. Loans and (ii) the Canadian Loans.
Majority Lenders. As of any date, the Lenders holding at least
fifty-one percent (51%) of the Total Commitment.
Maturity Date. March 30, 2005.
Maximum Drawing Amount. The maximum aggregate amount that the
beneficiaries may at any time draw under outstanding Letters of Credit, as such
aggregate amount may be reduced from time to time pursuant to the terms of the
Letters of Credit.
Maximum Rate. See Section 7.13.
22
-15-
Merchant Agreement. That certain Merchant Agreement, dated as of August
18, 1997, by and between ▇▇▇▇ Delaware and JNB, as the same has been, and as the
same may be further, amended, restated, supplemented or otherwise modified from
time to time.
Multiemployer Plan. Any multiemployer plan within the meaning
of Section 3(37) of ERISA maintained or contributed to by any Borrower or any
ERISA Affiliate.
Notes. See Section 2.4.
Note Indenture. The Indenture dated as of September 30, 1997 for
$100,000,000 of 8.50% Senior Notes due 2007 among ▇▇▇▇ Corporation, as Issuer,
▇▇▇▇ Delaware, Inc. as Guarantor and Bank One, NA, as trustee, as in effect on
September 30, 1997 and without giving effect to any subsequent amendment thereof
unless consented to by the Agent and the Majority Leaders, such consent not to
be unreasonably conditioned, delayed or withheld.
Obligations. All indebtedness, obligations and liabilities of the
Borrowers to any of the Lenders and the Agent or Canadian Agent, individually or
collectively, existing on the date of this Credit Agreement or arising
thereafter, direct or indirect, joint or several, absolute or contingent,
matured or unmatured, liquidated or unliquidated, secured or unsecured, arising
by contract, operation of law or otherwise, arising or incurred under this
Credit Agreement or any of the other Loan Documents or in respect of any of the
Loans made or Reimbursement Obligations incurred or any of the Notes, Letter of
Credit Applications, Letters of Credit or other instruments at any time
evidencing any thereof.
outstanding. With respect to the Loans, the aggregate unpaid principal
thereof as of any date of determination.
PBGC. The Pension Benefit Guaranty Corporation created by Section 4002
of ERISA and any successor entity or entities having similar responsibilities.
Performance Adjustment. See Section 7.14.
Performance Adjustment Date. See Section 7.14.
Permitted Liens. Liens, security interests and other encumbrances
permitted by Section 11.2.
Person. Any individual, corporation, partnership, trust, limited
liability company, unincorporated association, business, or other legal entity,
and any government or any governmental agency or political subdivision thereof.
Prior Credit Agreement. As defined in the preamble hereto.
Rabbi Trust. Any trust established for the satisfaction of obligations
of any of Zale or its Subsidiaries for deferred compensation, the terms of which
trust will not, at any time, result in such obligations being treated as funded
under applicable Department of Labor and Internal Revenue Service guidelines as
of the date hereof.
23
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Rated Debt. The Indebtedness of the Domestic Borrowers to the Agent and
the U.S. Lenders under this Credit Agreement.
Real Estate. All real property owned or leased (as lessee or sublessee)
by Zale or any of its Subsidiaries.
Receivables Facility Documents. (a)(i) The Receivables Purchase
Agreement and (ii) the Transaction Documents, as defined therein, as any of the
same may be from time to time amended and/or modified; (b)(i) any other
agreement or agreements governing Indebtedness incurred by any Receivables
Subsidiary to facilitate the provision of funds for working capital or other
general corporate purposes through the sale or pledge of receivables created by
▇▇▇▇, ▇▇▇▇ Delaware or their Subsidiaries (or of instruments received in
consideration of receivables transferred pursuant to the Receivables Facility
Documents), and (ii) any agreement or agreements governing Indebtedness incurred
to refund, refinance, replace, supplement or increase all or any portion of the
Indebtedness incurred under clauses (a) or (b)(i).
Receivables Purchase Agreement. The Purchase and Servicing Agreement
dated as of July 15, 1999 among ZFT, ▇▇▇▇ Delaware, and JNB, and their
respective successors and assigns, as the same may be from time to time amended
or modified.
Receivables Subsidiary. ZFT or any other Subsidiary of Zale, the
principal purpose of which is to provide funds for working capital or other
general corporate purposes to ▇▇▇▇ Delaware and its Subsidiaries through the
transfer of receivables created by ▇▇▇▇, ▇▇▇▇ Delaware or their Subsidiaries (or
of instruments received in consideration of receivables transferred pursuant to
the Receivables Facility Documents).
Record. The grid attached to a Note, or the continuation of such grid,
or any other similar record, including computer records, maintained by any
Lender with respect to any Loan, whether referred to in such Note or otherwise.
Reference Date. See Section 7.3.2.
Register. See Section 22.3.
Reimbursement Obligation. The Domestic Borrowers' obligation to
reimburse the Agent and the U.S. Lenders on account of any drawing under any
Letter of Credit as provided in Section 6.2.
Response Date. See Section 2.1(b).
Second Look Receivables. Accounts receivable, other than ZFT
Receivables, of any of the Borrowers or the Designated Subsidiaries originated
through the sale of inventory in the ordinary course of business, sold on a
non-recourse basis by any of the Borrowers or the Designated Subsidiaries to one
or more finance companies pursuant to the Borrowers' so-called "Second Look
Credit" program solely to the extent such sales are permitted by Section
11.5.2(f) hereof.
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Senior Officer. The Chairman, the Chief Executive Officer, the
President, the Chief Financial Officer, the Chief Operating Officer, or the
Treasurer of the Borrowers.
Settlement Statement. See Section 10.4(e).
Standby Letter of Credit Applicable Margin. The applicable rate per
annum set forth in the chart contained in Section 7.14 hereof under the heading
"Standby Letter of Credit Applicable Margin".
Subordinated Note. As defined in the Receivables Facility Documents.
Subsidiary. Any corporation, association, trust, partnership, limited
liability company, or other business entity of which the designated parent shall
at any time own directly or indirectly through a Subsidiary or Subsidiaries at
least a majority (by number of votes) of the outstanding Voting Stock.
Taxes. See Section 7.3.2.
Total Commitment. The sum of the U.S. Commitment and the Dollar
Equivalent of the Canadian Commitment of the Lenders, as in effect from time to
time.
Trust Certificates. As defined in the Receivables Facility Documents as
in the form delivered to the Agent on the date hereof.
Trust Interest. An interest in ZFT pursuant to and in accordance with
the Receivables Facility Documents.
Type. As to any Loan, its nature as a Base Rate Loan or a Eurodollar
Rate Loan.
Uniform Customs. With respect to any Letter of Credit, the Uniform
Customs and Practice for Documentary Credits (1993 Revision), International
Chamber of Commerce Publication No. 500 or any successor version thereto adopted
by the Agent in the ordinary course of its business as a letter of credit issuer
and in effect at the time of issuance of such Letter of Credit.
Unpaid Reimbursement Obligation. Any Reimbursement Obligation for which
the Domestic Borrowers do not reimburse the Agent and the U.S. Lenders in
accordance with Section 6.2 and which has not been repaid by the making of a
U.S. Loan pursuant to the provisions of Sections 2.6(b) and 6.2(a) hereof.
U.S. Commitment. With respect to each U.S. Lender, (a) the amount set
forth on Schedule 1 hereto as the amount of such U.S. Lender's commitment to
make U.S. Loans to the Domestic Borrowers, and to participate in the issuance,
extension and renewal of Letters of Credit for the account of, the Domestic
Borrowers, as the same may be changed from time to time in accordance with the
provisions of this Credit Agreement; or if such commitment is terminated
pursuant to the provisions hereof, zero, or, (b) if such U.S. Lender has entered
into one or more Assignment and Acceptances, then the amount set forth for such
U.S. Lender in the Register maintained by the Agent as the amount of such U.S.
Lender's commitment to make U.S. Loans to, and to participate in the issuance,
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extension and renewal of Letters of Credit for the account of, the Domestic
Borrowers, as the same may be changed from time to time in accordance with the
provisions of this Credit Agreement; or if such commitment is terminated
pursuant to the provisions hereof, zero.
U.S. Commitment Percentage. With respect to each U.S. Lender, the
applicable percentage set forth on Schedule 1, as the same may be amended from
time to time in accordance with the provisions hereof, as such U.S. Lender's
percentage of the aggregate U.S. Commitments of all of the U.S. Lenders.
U.S. Lenders. FNB and the other lending institutions designated as such
on Schedule 1 hereto and any other Person who becomes an assignee of any rights
and obligations of a U.S. Lender pursuant to Section 22.
U.S. Loans. Revolving credit loans made or to be made by the U.S.
Lenders to the Domestic Borrowers pursuant to Section 2.
U.S. Settlement. The making of, or receiving of payments, in
immediately available funds, by the U.S. Lenders, to the extent necessary to
cause each U.S. Lender's actual share of the outstanding amount of U.S. Loans
(after giving effect to any Loan Request) to be equal to such U.S. Lender's U.S.
Commitment Percentage of the outstanding amount of such U.S. Loans (after giving
effect to any Loan Request), in any case where, prior to such event or action,
the actual share is not so equal.
U.S. Settlement Amount. See Section 2.9(a).
U.S. Settlement Date. (a) The Business Day immediately following the
Agent's becoming aware of the existence of an Event of Default, (b) any Business
Day on which the amount of U.S. Loans outstanding from FNB plus FNB's U.S.
Commitment Percentage of the sum of the Maximum Drawing Amount and any Unpaid
Reimbursement Obligations is equal to or greater than FNB's U.S. Commitment
Percentage of the U.S. Total Commitment, (c) any Business Day on which the
amount of U.S. Loans outstanding from FNB plus FNB's U.S. Commitment Percentage
of the sum of the Maximum Drawing Amount and any Unpaid Reimbursement
Obligations exceeds FNB's U.S. Commitment Percentage of the amount of U.S. Loans
outstanding plus FNB's U.S. Commitment Percentage of the sum of the Maximum
Drawing Amount and any Unpaid Reimbursement Obligations by more than
$10,000,000, (d) the Business Day immediately following written notice given by
the Agent to the U.S. Lenders of the Agent's desire to effect a U.S. Settlement,
or (e) any Business Day on which (i) the amount of outstanding U.S. Loans
decreases and (ii) the amount of the Agent's U.S. Loans outstanding equals Zero
Dollars ($0).
U.S. Settling Lender. See Section 2.9(a).
U.S. Total Commitment. The sum of the U.S. Commitments of the U.S.
Lenders, as in effect from time to time (which as of the Closing Date shall be
$215,000,000).
Voting Stock. Stock or similar interests, of any class or classes
(however designated), the holders of which are at the time entitled, as such
holders, to vote for the
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election of a majority of the directors (or persons performing similar
functions) of the corporation, association, trust, partnership, limited
liability company or other business entity involved, whether or not the right so
to vote exists by reason of the happening of a contingency.
Zale. As defined in the preamble hereto.
Zale Canada. As defined in the preamble hereto.
▇▇▇▇ Delaware. As defined in the preamble hereto.
▇▇▇▇ Puerto Rico. ▇▇▇▇ Puerto Rico, Inc., a Puerto Rican corporation.
ZFT. ▇▇▇▇ Funding Trust, a Delaware business trust.
ZFT Receivables. Any Receivables (as defined in the Receivables
Facility Documents), all monies due or to become due thereon and all collateral
security therefor, all proceeds of the foregoing, including Insurance Proceeds
(as defined in the Receivables Facility Documents) relating thereto, all
Recoveries (as defined in the Receivables Facility Documents) and all other
interests, rights and assets that have been transferred by any of the Borrowers,
JNB, JCC or any other Subsidiary of Zale to ZFT or any other Receivables
Subsidiary pursuant to the Receivables Facility Documents; provided, however,
that "ZFT Receivables" shall not include any of ▇▇▇▇'▇, ▇▇▇▇ Delaware's or any
other Subsidiary of Zale's rights under the Receivables Facility Documents.
1.2. RULES OF INTERPRETATION.
(a) Unless otherwise indicated, reference to any document or
agreement shall include such document or agreement as amended, modified
or supplemented from time to time in accordance with its terms and the
terms of this Credit Agreement.
(b) The singular includes the plural and the plural includes
the singular.
(c) A reference to any law includes any amendment or
modification to such law.
(d) A reference to any Person includes its permitted
successors and permitted assigns.
(e) Accounting terms not otherwise defined herein have the
meanings assigned to them by generally accepted accounting principles
applied on a consistent basis by the accounting entity to which they
refer.
(f) The words "include", "includes" and "including" are not
limiting.
(g) All terms not specifically defined herein or by generally
accepted accounting principles, which terms are defined in the Uniform
Commercial Code as in effect in the Commonwealth of Massachusetts, have
the meanings assigned to
27
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them therein, with the term "instrument" being that defined under
Article 9 of said Uniform Commercial Code.
(h) Reference to a particular "Section" refers to that
section of this Credit Agreement unless otherwise indicated.
(i) The words "herein", "hereof", "hereunder" and words of
like import shall refer to this Credit Agreement as a whole and not to
any particular section or subdivision of this Credit Agreement.
2. THE U.S. REVOLVING CREDIT FACILITY.
2.1. COMMITMENT TO LEND. Subject to the terms and conditions set forth
in this Credit Agreement, each of the U.S. Lenders severally agrees to lend to
the Domestic Borrowers, or either of them, and the Domestic Borrowers, or either
of them, may borrow, repay, and reborrow from time to time between the Closing
Date and the Maturity Date upon notice by the Domestic Borrowers, or either of
them, to the Agent given in accordance with Section 2.6, such sums as are
requested by the Domestic Borrowers, or either of them, up to a maximum
aggregate amount outstanding (after giving effect to all amounts requested) at
any one time equal to such U.S. Lender's U.S. Commitment minus such U.S.
Lender's U.S. Commitment Percentage of the sum of the Maximum Drawing Amount and
all Unpaid Reimbursement Obligations, provided that the sum of the outstanding
amount of the U.S. Loans (after giving effect to all amounts requested) plus the
Maximum Drawing Amount and all Unpaid Reimbursement Obligations shall not at any
time exceed the U.S. Total Commitment. The U.S. Loans shall be made pro rata in
accordance with each U.S. Lender's U.S. Commitment Percentage. Each request for
a U.S. Loan hereunder shall constitute a representation and warranty by the
Domestic Borrowers that the conditions set forth in Section 13 and Section 14,
in the case of the initial U.S. Loans to be made on the Closing Date, and
Section 14, in the case of all other U.S. Loans, have been satisfied on the date
of such request.
2.2. U.S. COMMITMENT FEE AND UTILIZATION FEE.
(a) The Domestic Borrowers, jointly and severally, agree to pay to the
Agent for the accounts of the U.S. Lenders in accordance with their respective
U.S. Commitment Percentages a commitment fee calculated at the Commitment Fee
Rate per annum on the average daily amount during each calendar quarter or
portion thereof from the Closing Date to the Maturity Date by which the U.S.
Total Commitment exceeds the sum of the Maximum Drawing Amount and all Unpaid
Reimbursement Obligations plus the outstanding amount of U.S. Loans during such
calendar quarter. The commitment fee shall be payable quarterly in arrears on
the first Business Day of each calendar quarter for the immediately preceding
calendar quarter commencing on the first such date following the date hereof,
and on the date of any reduction in the U.S. Commitments pursuant to Section 2.3
on the amount of such reduction, and with a final payment on the Maturity Date
or any earlier date on which the U.S. Commitments shall terminate.
(b) The Domestic Borrowers, jointly and severally, agree to pay to the
Agent for the accounts of the U.S. Lenders in accordance with their respective
U.S. Commitment Percentages a utilization fee equal to .125% per annum on the
average daily amount during
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each calendar quarter or portion thereof from the Closing Date to the Maturity
Date by which the outstanding amount of U.S. Loans during such calendar quarter
exceeds fifty percent (50%) of the U.S. Total Commitment. The utilization fee
shall be payable quarterly in arrears on the first Business Day of each calendar
quarter for the immediately preceding calendar quarter commending on the first
such date following the date hereof, and on the date of any reduction in the
U.S. Commitments pursuant to Section 2.3, and with a final payment on the
Maturity Date or any earlier date on which the U.S. Commitments shall terminate.
2.3. REDUCTION OF U.S. TOTAL COMMITMENT. The Domestic Borrowers shall
have the right at any time and from time to time upon three (3) Business Days
prior written notice to the Agent to reduce by $5,000,000 or an integral
multiple of $1,000,000 in excess thereof or terminate entirely the U.S. Total
Commitment whereupon the U.S. Commitments of the U.S. Lenders shall be reduced
pro rata in accordance with their respective U.S. Commitment Percentages of the
amount specified in such notice or, as the case may be, terminated. Promptly
after receiving any notice of the Domestic Borrowers delivered pursuant to this
Section 2.3, the Agent will notify the U.S. Lenders of the substance thereof.
Upon the effective date of any such reduction or termination, the Domestic
Borrowers shall pay to the Agent for the respective accounts of the U.S. Lenders
the full amount of any commitment fee then accrued on the amount of the
reduction. No reduction or termination of the U.S. Commitments may be
reinstated.
2.4. THE NOTES. The U.S. Loans shall be evidenced by separate
promissory notes of the Domestic Borrowers in substantially the form of Exhibit
A hereto (each a "Note"), dated as of the Closing Date and completed with
appropriate insertions. A Note shall be payable to the order of each U.S. Lender
in a principal amount equal to such U.S. Lender's U.S. Commitment or, if less,
the outstanding amount of all U.S. Loans made by such U.S. Lender, plus interest
accrued thereon, as set forth below. Each of the Domestic Borrowers irrevocably
authorizes each U.S. Lender to make or cause to be made, at or about the time of
the Drawdown Date of any U.S. Loan or at the time of receipt of any payment of
principal on such U.S. Lender's Note, an appropriate notation on such U.S.
Lender's Record reflecting the making of such U.S. Loan or (as the case may be)
the receipt of such payment. The outstanding amount of the U.S. Loans set forth
on such U.S. Lender's Record shall be prima facie evidence of the principal
amount thereof owing and unpaid to such U.S. Lender, but the failure to record,
or any error in so recording, any such amount on such U.S. Lender's Record shall
not limit or otherwise affect the obligations of the Domestic Borrowers
hereunder or under any Note to make payments of principal of or interest on any
Note when due.
2.5. INTEREST ON U.S. LOANS. Except as otherwise provided in Section
7.12,
(a) Each U.S. Loan that is a Base Rate Loan shall bear
interest for the period commencing with the Drawdown Date thereof and
ending on the last day of the Interest Period with respect thereto at a
rate per annum equal to the Base Rate.
(b) Each U.S. Loan that is a Eurodollar Rate Loan shall bear
interest for the period commencing with the Drawdown Date thereof and
ending on the last day of the Interest Period with respect thereto at a
rate per annum equal to the Eurodollar Applicable Margin plus the
Eurodollar Rate determined for such Interest Period.
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(c) The Domestic Borrowers, jointly and severally, promise to
pay interest on each U.S. Loan in arrears on each Interest Payment Date
with respect thereto.
2.6. REQUESTS FOR U.S. LOANS.
(a) The Domestic Borrowers, or either of them, shall give to
the Agent written notice in the form of Exhibit B hereto (or telephonic
notice confirmed in a writing in the form of Exhibit B hereto) of each
U.S. Loan requested hereunder (a "Loan Request") no later than (i)
11:30 a.m. (Boston time) on the proposed Drawdown Date of any Base Rate
Loan and (ii) 10:00 a.m. (Boston time) at least three (3) Eurodollar
Business Days prior to the proposed Drawdown Date of any Eurodollar
Rate Loan. Each such notice shall specify (A) the principal amount of
the U.S. Loan requested, (B) the proposed Drawdown Date of such U.S.
Loan, (C) the Interest Period for such U.S. Loan and (D) the Type of
such U.S. Loan. Promptly upon receipt of any such notice, the Agent
shall notify each of the U.S. Lenders thereof. Each Loan Request shall
be irrevocable and binding on the Domestic Borrowers and shall obligate
the Domestic Borrower requesting the U.S. Loan to accept the U.S. Loan
requested from the U.S. Lenders on the proposed Drawdown Date. Each
U.S. Loan Request for a Base Rate Loan shall be in a minimum aggregate
amount of $100,000, and each Loan Request for a Eurodollar Rate Loan
shall be in a minimum aggregate amount of $1,000,000 or an integral
multiple of $500,000 in excess thereof.
(b) Notwithstanding the notice and minimum amount requirements
set forth in Section 2.6(a) but otherwise in accordance with the terms
and conditions of this Credit Agreement, the Agent may, in its sole
discretion and without conferring with the U.S. Lenders, make U.S.
Loans to the Domestic Borrowers (i) by entry of credits to ▇▇▇▇
Delaware's operating account (No. 551-49011) or other account(s) with
the Agent to cover checks or other charges which ▇▇▇▇ Delaware has
drawn or made against such account, (ii) to reimburse the Agent in
respect of any Reimbursement Obligations not repaid by the Domestic
Borrowers pursuant to the provisions of Section 6.2(a) hereof, or (iii)
in an amount as otherwise requested by the Domestic Borrowers;
provided, however, that the aggregate amount of all advances made
pursuant to this Section 2.6(b) shall not exceed $10,000,000 at any
time outstanding. Each Domestic Borrower hereby requests and authorizes
the Agent to make from time to time such U.S. Loans by means of
appropriate entries of such credits sufficient to cover checks and
other charges then presented. Each Domestic Borrower acknowledges and
agrees that the making of such U.S. Loans shall, in each case, be
subject in all respects to the provisions of this Credit Agreement as
if they were U.S. Loans covered by a Loan Request including, without
limitation, the limitations set forth in Section 2.1 and the
requirements that the applicable provisions of Sections 13 and 14, in
the case of U.S. Loans made on the Closing Date, and Section 14 only,
in the case of all other U.S. Loans, be satisfied. All actions taken by
the Agent pursuant to the provisions of this Section 2.6(b) shall be
conclusive and binding on the Domestic Borrowers absent the Agent's
gross negligence or willful misconduct. U.S. Loans made pursuant to
this Section 2.6(b) shall be Base Rate Loans until converted in
accordance with the provisions of the Credit Agreement and, prior to a
U.S. Settlement, such interest shall be for the account of the Agent.
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2.7. CONVERSION OPTIONS.
2.7.1. CONVERSION TO DIFFERENT TYPE OF LOAN. The Domestic
Borrowers may elect from time to time to convert any outstanding U.S.
Loan to a U.S. Loan of another Type, provided that (i) with respect to
any such conversion of a U.S. Loan to a Base Rate Loan, the Domestic
Borrowers shall give the Agent, no later than 2:00 p.m. (Boston time)
on the proposed date of such conversion, prior written notice of such
election (the Agent agreeing to notify the U.S. Lenders promptly of the
giving of any such notice by the Domestic Borrowers); (ii) with respect
to any such conversion of a Base Rate Loan to a Eurodollar Rate Loan,
the Domestic Borrowers shall give the Agent, no later than 10:00 a.m.
(Boston time) at least three (3) Eurodollar Business Days prior to the
proposed date of such conversion, written notice of such election (the
Agent agreeing to notify the U.S. Lenders promptly of the giving of any
such notice by the Domestic Borrowers); (iii) with respect to any such
conversion of a Eurodollar Rate Loan into a U.S. Loan of another Type,
any such conversion which is made on a day other than the last day of
the Interest Period with respect thereto shall obligate the Domestic
Borrowers to indemnify the U.S. Lenders for any loss, cost or expense
associated therewith in accordance with the provisions of Section 7.11
hereof, and (iv) no U.S. Loan may be converted into a Eurodollar Rate
Loan when any Default or Event of Default has occurred and is
continuing. On the date on which such conversion is being made each
U.S. Lender shall take such action as is necessary to transfer its U.S.
Commitment Percentage of such U.S. Loans to its Domestic Lending Office
or its Eurodollar Lending Office, as the case may be. All or any part
of outstanding U.S. Loans of any Type may be converted into a U.S. Loan
of another Type as provided herein, provided that any partial
conversion of a Eurodollar Rate Loan to a Base Rate Loan shall be in an
aggregate principal amount of at least $100,000, and any partial
conversion of a Base Rate Loan to a Eurodollar Rate Loan shall be in an
aggregate principal amount of at least $1,000,000 or an integral
multiple of $500,000 in excess thereof. Each Conversion Request
relating to the conversion of a U.S. Loan to a Eurodollar Rate Loan
shall be irrevocable by the Domestic Borrowers.
2.7.2. CONTINUATION OF TYPE OF LOAN. Any U.S. Loan of any Type
may be continued as a U.S. Loan of the same Type upon the expiration of
an Interest Period with respect thereto by compliance by the Domestic
Borrowers with the notice provisions contained in Section 2.7.1;
provided that no Eurodollar Rate Loan may be continued as such when any
Default or Event of Default has occurred and is continuing, but shall
be automatically converted to a Base Rate Loan on the last day of the
first Interest Period relating thereto ending during the continuance of
any Default or Event of Default of which officers of the Agent active
upon the Domestic Borrowers' account have actual knowledge. In the
event that the Domestic Borrowers fail to provide any such notice with
respect to the continuation of any Eurodollar Rate Loan as such, then
such Eurodollar Rate Loan shall be automatically converted to a Base
Rate Loan on the last day of the first Interest Period relating
thereto. The Agent shall notify the U.S. Lenders promptly when any such
automatic conversion contemplated by this Section 2.7 is scheduled to
occur.
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2.7.3. EURODOLLAR RATE LOANS. Any conversion to or from
Eurodollar Rate Loans shall be in such amounts and be made pursuant to
such elections so that, after giving effect thereto, the aggregate
principal amount of all Eurodollar Rate Loans having the same Interest
Period shall not be less than $1,000,000 or a whole multiple of
$500,000 in excess thereof. The Domestic Borrowers may not have more
than six (6) Eurodollar Rate Loans outstanding at any time.
2.8. FUNDS FOR U.S. LOANS.
2.8.1. FUNDING PROCEDURES FOR U.S. LOANS TO DOMESTIC
BORROWERS. Not later than 1:30 p.m. (Boston time) on the proposed
Drawdown Date of any U.S. Loan, each of the U.S. Lenders will make
available to the Agent, at the Agent's Office, in immediately available
funds, the amount of such U.S. Lender's U.S. Commitment Percentage of
the amount of the requested U.S. Loans. Upon receipt from each U.S.
Lender of such amount, and upon receipt of the documents required by
Sections 13 (with respect to the initial Loan only) and 14 and the
satisfaction of the other conditions set forth therein, to the extent
applicable, the Agent will make available to the Domestic Borrowers the
aggregate amount of such U.S. Loans made available to the Agent by the
U.S. Lenders. The failure or refusal of any U.S. Lender to make
available to the Agent at the aforesaid time and place on any Drawdown
Date the amount of its U.S. Commitment Percentage of the requested U.S.
Loans (i) shall not relieve any other U.S. Lender from its several
obligation hereunder to make available to the Agent the amount of such
other U.S. Lender's U.S. Commitment Percentage of any requested U.S.
Loans and (ii) shall not impose upon such other U.S. Lender any
liability with respect to such failure or refusal or otherwise increase
the U.S. Commitment of such other U.S. Lender.
2.8.2. ADVANCES BY AGENT FOR U.S. LOANS TO DOMESTIC BORROWERS.
The Agent may, unless notified to the contrary by any U.S. Lender on or
prior to a Drawdown Date, assume that such U.S. Lender has made
available to the Agent on such Drawdown Date the amount of such U.S.
Lender's U.S. Commitment Percentage of the U.S. Loans to be made on
such Drawdown Date, and the Agent may (but it shall not be required
to), in reliance upon such assumption, make available to the Domestic
Borrowers a corresponding amount. If any U.S. Lender makes available to
the Agent such amount on a date after such Drawdown Date, such U.S.
Lender shall pay to the Agent on demand an amount equal to the product
of (i) the average computed for the period referred to in clause (iii)
below, of the weighted average interest rate paid by the Agent for
federal funds acquired by the Agent during each day included in such
period, times (ii) the amount of such U.S. Lender's U.S. Commitment
Percentage of such U.S. Loans, times (iii) a fraction, the numerator of
which is the number of days that elapse from and including such
Drawdown Date to the date on which the amount of such U.S. Lender's
U.S. Commitment Percentage of such U.S. Loans shall become immediately
available to the Agent, and the denominator of which is 360. A
statement of the Agent submitted to such U.S. Lender with respect to
any amounts owing under this paragraph shall be prima facie evidence of
the amount due and owing to the Agent by such U.S. Lender. If the
amount of such U.S. Lender's U.S. Commitment Percentage of such U.S.
Loans is not made available to the Agent by such U.S. Lender
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within three (3) Business Days following such Drawdown Date, the Agent
shall be entitled to recover such amount from the Domestic Borrowers on
demand, with interest thereon at the rate per annum applicable to the
U.S. Loans made on such Drawdown Date.
2.9. SETTLEMENTS; FAILURE TO MAKE FUNDS AVAILABLE.
(a) On each U.S. Settlement Date, the Agent shall, not later
than 10:00 a.m. (Boston time), give telephonic or facsimile notice (i)
to the U.S. Lenders and the Domestic Borrowers of the respective
outstanding amount of U.S. Loans made by the Agent on behalf of the
U.S. Lenders from the immediately preceding Settlement Date through the
close of business on the prior day and the amount of any Eurodollar
Rate Loans to be made (following the giving of notice pursuant to
Section 2.6(a)(ii)) on such date pursuant to a Loan Request and (ii) to
the U.S. Lenders of the amount (a "U.S. Settlement Amount") that each
U.S. Lender (the "U.S. Settling Lender") shall pay to effect a U.S.
Settlement of any U.S. Loan. A statement of the Agent submitted to the
U.S. Lenders and the Domestic Borrowers with respect to any amounts
owing under this Section 2.9 shall be prima facie evidence of the
amount due and owing. Each U.S. Settling Lender shall, not later than
3:00 p.m. (Boston time) on such U.S. Settlement Date, effect a wire
transfer of immediately available funds to the Agent in the amount of
its U.S. Settlement Amount. All funds advanced by any U.S. Lender as a
U.S. Settling Lender pursuant to this Section 2.9 shall for all
purposes be treated as a U.S. Loan made by such U.S. Settling Lender to
the Domestic Borrowers and all funds received by any U.S. Lender
pursuant to this Section 2.9 shall for all purposes be treated as
repayment of amounts owed with respect to U.S. Loans made by such U.S.
Lender. In the event that any bankruptcy, reorganization, liquidation,
receivership or similar cases or proceedings in which either of the
Domestic Borrowers is a debtor prevent a U.S. Settling Lender from
making any U.S. Loan to effect a U.S. Settlement as contemplated
hereby, such U.S. Settling Lender will make such disposition and
arrangements with the other U.S. Lenders with respect to such U.S.
Loans, either by way of purchase of participations, distribution, pro
tanto assignment of claims, subrogation or otherwise as shall result in
each U.S. Lender's share of the outstanding U.S. Loans being equal, as
nearly as may be, to such U.S. Lender's U.S. Commitment Percentage of
the outstanding amount of the U.S. Loans.
(b) The Agent may, unless notified to the contrary by any U.S.
Lender prior to a U.S. Settlement Date, assume that such U.S. Lender
has made or will make available to the Agent on such U.S. Settlement
Date the amount of such U.S. Lender's U.S. Settlement Amount, and the
Agent may (but it shall not be required to), in reliance upon such
assumption, make available to the Domestic Borrowers a corresponding
amount. If any U.S. Lender makes available to the Agent such amount on
a date after such U.S. Settlement Date, such U.S. Lender shall pay to
the Agent on demand an amount equal to the product of (i) the average
computed for the period referred to in clause (iii) below, of the
weighted average interest rate paid by the Agent for federal funds
acquired by such Agent during each day included in such period, times
(ii) the amount of such U.S. Settlement Amount, times (iii) a fraction,
the numerator of which is the number of days that elapse from
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and including such U.S. Settlement Date to the date on which the amount
of such U.S. Settlement Amount shall become immediately available to
such Agent, and the denominator of which is 360. A statement of the
Agent submitted to such U.S. Lender with respect to any amounts owing
under this paragraph shall be prima facie evidence of the amount due
and owing to the Agent by such U.S. Lender. If such U.S. Lender's U.S.
Settlement Amount is not made available to the Agent by such U.S.
Lender within three (3) Business Days following such U.S. Settlement
Date, the Agent shall be entitled to recover such amount from the
Domestic Borrowers on demand, with interest thereon at the rate per
annum applicable to the U.S. Loans as of such U.S. Settlement Date.
(c) The failure or refusal of any U.S. Lender to make
available to the Agent at the aforesaid time and place on any U.S.
Settlement Date the amount of its U.S. Settlement Amount (i) shall not
relieve any other U.S. Lender from its several obligations hereunder to
make available to the Agent the amount of such other U.S. Lender's U.S.
Settlement Amount and (ii) shall not impose upon such other U.S. Lender
any liability with respect to such failure or refusal or otherwise
increase the U.S. Commitment of such other U.S. Lender.
3. REPAYMENT OF THE U.S. LOANS.
3.1. MATURITY. The Domestic Borrowers jointly and severally promise to
pay on the Maturity Date, and there shall become absolutely due and payable on
the Maturity Date, all of the U.S. Loans outstanding on such date, together with
any and all accrued and unpaid interest thereon.
3.2. MANDATORY REPAYMENTS OF LOANS. If at any time the sum of the
outstanding amount of the U.S. Loans, the Maximum Drawing Amount and all Unpaid
Reimbursement Obligations exceeds the U.S. Total Commitment, then the Domestic
Borrowers shall, upon demand or immediately upon discovery by the Domestic
Borrowers of such excess, pay the amount of such excess to the Agent for the
respective accounts of the U.S. Lenders for application: first, to any Unpaid
Reimbursement Obligations; second, to the U.S. Loans; and third, to provide to
the Agent cash collateral for Reimbursement Obligations as contemplated by
Section 6.2(b) and (c). Each payment of any Unpaid Reimbursement Obligations or
prepayment of U.S. Loans shall be allocated among the U.S. Lenders, in
proportion to each Reimbursement Obligation or (as the case may be) the
respective unpaid principal amount of each U.S. Lender's Note, with adjustments
to the extent practicable to equalize any prior payments or repayments not
exactly in proportion.
3.3. OPTIONAL REPAYMENTS OF U.S. LOANS. The Domestic Borrowers shall
have the right, at their election, to repay the outstanding amount of the U.S.
Loans, as a whole or in part, at any time and from time to time without penalty
or premium, provided that any full or partial prepayment of the outstanding
amount of any Eurodollar Rate Loans pursuant to this Section 3.3 which is made
on a day other than the last day of the Interest Period relating thereto shall
obligate the Domestic Borrowers to indemnify the U.S. Lenders for any loss, cost
or expense associated therewith in accordance with the provisions of Section
7.11 hereof. The Domestic Borrowers shall give the Agent written notice of any
proposed prepayment no later than (i) 2:00 p.m., Boston time, on the date of any
proposed prepayment pursuant to
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this Section 3.3 of Base Rate Loans, and (ii) 10:00 a.m., Boston time, at least
three (3) Eurodollar Business Days prior to any proposed prepayment pursuant to
this Section 3.3 of Eurodollar Rate Loans, in each case specifying the proposed
date of prepayment of U.S. Loans and the principal amount to be prepaid (the
Agent agreeing to notify the U.S. Lenders promptly of the giving of any such
notice by the Domestic Borrowers). Each such partial prepayment of Base Rate
Loans shall be in a minimum amount of $100,000, and each such partial prepayment
of Eurodollar Rate Loans shall be in a minimum amount of $1,000,000 or an
integral multiple of $500,000 in excess thereof and shall be accompanied by the
payment of accrued interest on the principal prepaid to the date of prepayment.
In the absence of instruction by the Domestic Borrowers, each such partial
prepayment of the U.S. Loans shall be applied first to the principal of Base
Rate Loans and then to the principal of Eurodollar Rate Loans. Each partial
prepayment shall be allocated among the U.S. Lenders, in proportion, to the
respective unpaid principal amount of each U.S. Lender's Note, with adjustments
to the extent practicable to equalize any prior repayments not exactly in
proportion. Notwithstanding the notice and minimum requirements set forth in
this Section 3.3, the Agent may, in its sole discretion, allow the Domestic
Borrowers to repay Base Rate Loans made by the Agent in amounts as otherwise
requested by the Domestic Borrowers.
4. THE CANADIAN REVOLVING CREDIT FACILITY.
4.1. COMMITMENT TO LEND.
(a) Subject to the terms and conditions set forth in this Credit
Agreement, each of the Canadian Lenders severally agrees to lend and make
available to ▇▇▇▇ Canada by way of Canadian Base Rate Loans and Bankers'
Acceptances, and ▇▇▇▇ Canada, may borrow, repay, and reborrow from time to time
between the Closing Date and the Maturity Date upon notice by ▇▇▇▇ Canada to the
Canadian Agent given in accordance with Section 4.6, such sums as are requested
by ▇▇▇▇ Canada, up to a maximum aggregate amount outstanding (after giving
effect to all amounts requested) at any one time equal to such Canadian Lender's
Canadian Commitment, provided that the sum of the outstanding amount of the
Canadian Loans, including the face amount of Canadian Loans by way of Bankers'
Acceptances (after giving effect to all amounts requested) shall not at any time
exceed the Canadian Total Commitment. The Canadian Loans shall be made pro rata
in accordance with each Canadian Lender's Canadian Commitment Percentage. Each
request for a Canadian Loan hereunder shall constitute a representation and
warranty by ▇▇▇▇ Canada that the conditions set forth in Section 13 and Section
14, in the case of the initial Canadian Loans to be made on the Closing Date,
and Section 14, in the case of all other Canadian Loans, have been satisfied on
the date of such request.
(b) Unless terminated earlier pursuant to the provisions of Sections
4.3 or 15.2 hereof, the Canadian Commitment of each Canadian Lender shall be in
effect between the Closing Date and the Maturity Date. On the Maturity Date, no
Canadian Lender shall have any further commitment to make Canadian Loans to ▇▇▇▇
Canada.
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4.2. CANADIAN COMMITMENT FEE AND UTILIZATION FEE.
(a) ▇▇▇▇ Canada agrees to pay to the Canadian Agent for the accounts of
the Canadian Lenders in accordance with their respective Canadian Commitment
Percentages a commitment fee calculated at the Commitment Fee Rate per annum on
the average daily amount during each calendar quarter or portion thereof from
the Closing Date to the Maturity Date by which the Canadian Total Commitment
exceeds the outstanding amount of Canadian Loans during such calendar quarter.
The commitment fee shall be payable quarterly in arrears on the first day of
each calendar quarter for the immediately preceding calendar quarter commencing
on the first such date following the date hereof, and on the date of any
reduction in the Canadian Commitments pursuant to Section 4.3 on the amount of
such reduction, and with a final payment on the Maturity Date or any earlier
date on which the Canadian Commitments shall terminate.
(b) ▇▇▇▇ Canada agrees to pay to the Canadian Agent for the accounts of
the Canadian Lenders in accordance with their respective Canadian Commitment
Percentages a utilization fee equal to .125% per annum on the average daily
amount during each calendar quarter or portion thereof from the Closing Date to
the Maturity Date by which the outstanding amount of Canadian Loans, including
the face amount of Canadian Loans by way of Bankers' Acceptances during such
calendar quarter exceeds fifty percent (50%) of the Canadian Total Commitment.
The utilization fee shall be payable quarterly in arrears on the first Business
Day of each calendar quarter for the immediately preceding calendar quarter
commencing July 1, 2000, and on the date of any reduction in the Canadian
Commitments pursuant to Section 4.3, and with a final payment on the Maturity
Date or any earlier date on which the Canadian Commitments shall terminate.
4.3. REDUCTION OF CANADIAN TOTAL COMMITMENT. ▇▇▇▇ Canada shall have the
right at any time and from time to time upon three (3) Business Days prior
written notice to the Canadian Agent to reduce by C$1,000,000 or an integral
multiple of C$500,000 in excess thereof, or terminate entirely, the Canadian
Total Commitment, whereupon the Canadian Commitments of the Canadian Lenders
shall be reduced pro rata in accordance with their respective Canadian
Commitment Percentages of the amount specified in such notice or, as the case
may be, terminated. Promptly after receiving any notice from ▇▇▇▇ Canada
delivered pursuant to this Section 4.3, the Canadian Agent will notify the
Canadian Lenders of the substance thereof. Upon the effective date of any such
reduction or termination, ▇▇▇▇ Canada shall pay to the Canadian Agent for the
respective accounts of the Canadian Lenders the full amount of any commitment
fee then accrued on the amount of the reduction. No reduction or termination of
the Canadian Commitments may be reinstated. Notwithstanding the foregoing in
this Section 4.3, ▇▇▇▇ Canada may not reduce the Canadian Total Commitment in
respect of any portion of the Canadian Loans outstanding by way of Bankers'
Acceptances other than on the maturity date of such Bankers' Acceptances.
4.4. THE CANADIAN LOAN ACCOUNT. The obligations of ▇▇▇▇ Canada to repay
all amounts borrowed by it as Canadian Loans, all interest thereon, and all
other amounts payable by it in respect thereof shall be evidenced by this Credit
Agreement, it being the intention of the parties hereto that ▇▇▇▇ Canada's
obligations with respect to the Canadian Loans owed by it is evidenced only as
stated herein and not by separate promissory notes or other instruments.
4.5. INTEREST ON CANADIAN LOANS. Except as otherwise provided
in Section 7.12,
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(a) Each Canadian Loan (other than one by way of Bankers'
Acceptance) shall bear interest for the period commencing with the
Drawdown Date thereof and ending on the last day of the Interest Period
with respect thereto at a rate per annum equal to the Canadian Base
Rate.
(b) ▇▇▇▇ Canada promises to pay interest on each Canadian Loan
(other than one by way of Bankers' Acceptance) in arrears on each
Interest Payment Date with respect thereto.
(c) For the purposes of this Credit Agreement, whenever any
interest or other amount in the nature thereof or in the nature of a
fee is, in respect of a Canadian Loan, to be calculated on the basis of
a year of 360 days or a period other than 365 or 366 days, as the case
may be, the rate of interest or fee in respect of such Canadian Loan
expressed as an annual rate, for the purposes of the Interest Act
(Canada), is equivalent to the rate set out herein in respect of such
Loan multiplied by the actual number of days in the calendar year in
which such rate is to be ascertained and divided by 360 days or such
other period other than 365 or 366 days, as above-mentioned, as the
case may be.
4.6. REQUESTS FOR LOANS.
(a) ▇▇▇▇ Canada shall give to the Canadian Agent written
notice in the form of Exhibit B1 hereto (or telephonic notice confirmed
in a writing in the form of Exhibit B1 hereto) of each Canadian Loan
requested hereunder (a "Canadian Loan Request") no later than (i) 11:30
a.m. (Toronto time) on the proposed Drawdown Date of such Canadian Loan
if by way of Canadian Base Rate Loan, and (ii) 11:30 a.m. (Toronto
time) on the second Business Day prior to the proposed Drawdown Date of
such Canadian Loan if by way of Bankers' Acceptance. Each such notice
shall specify (A) the principal amount of the Canadian Loan requested,
(B) the proposed Drawdown Date of such Canadian Loan, (C) whether the
Canadian Loan will be by way of Canadian Base Rate Loans or Bankers'
Acceptances, and (D) the term to maturity if by way of Bankers'
Acceptances. Promptly upon receipt of any such notice, the Canadian
Agent shall notify each of the Canadian Lenders thereof. Each Canadian
Loan Request shall be irrevocable and binding on ▇▇▇▇ Canada and shall
obligate ▇▇▇▇ Canada to accept the Canadian Loan requested from the
Canadian Lenders on the proposed Drawdown Date. Each Canadian Loan
Request for a Canadian Loan shall be in a minimum aggregate amount of
C$100,000.
(b) Notwithstanding the notice and minimum amount requirements
set forth in Section 4.6(a) but otherwise in accordance with the terms
and conditions of this Credit Agreement, the Canadian Agent may, in its
sole discretion and without conferring with the Canadian Lenders, make
Canadian Loans hereunder (i) by entry of credits to ▇▇▇▇ Canada's
operating account 73-39410 (Canadian Dollar Account) or 03-00705 (U.S.
Dollar Account) or other account(s) with the Canadian Agent to cover
checks or other charges which ▇▇▇▇ Canada has drawn or made against
such account, and/or (ii) in an amount as otherwise requested by ▇▇▇▇
Canada. ▇▇▇▇ Canada hereby requests and authorizes the Canadian Agent
to make from time to time such Canadian Loans by means of appropriate
entries of such credits sufficient to cover
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checks and other charges then presented. ▇▇▇▇ Canada acknowledges and
agrees that the making of such Canadian Loans shall, in each case, be
subject in all respects to the provisions of this Credit Agreement as
if they were Canadian Loans covered by a Canadian Loan Request
including, without limitation, the limitations set forth in Section 4.1
and the requirements that the applicable provisions of Sections 13 and
14, in the case of Canadian Loans made on the Closing Date, and Section
14 only, in the case of all other Canadian Loans, be satisfied. All
actions taken by the Canadian Agent pursuant to the provisions of this
Section 4.6(b) shall be conclusive and binding on ▇▇▇▇ Canada absent
the Canadian Agent's gross negligence or willful misconduct. Prior to a
Canadian Settlement, interest on Canadian Loans made pursuant to this
Section 4.6(b) shall be for the account of the Canadian Agent.
4.7. CONTINUATION OF CANADIAN LOAN. Any Canadian Loan outstanding by
way of Canadian Base Rate Loan shall automatically be continued as a Canadian
Loan outstanding by way of Canadian Base Rate Loan upon the expiration of an
Interest Period with respect thereto unless repaid. Any Canadian Loan
outstanding by way of Bankers' Acceptance shall be continued upon maturity of
such Bankers' Acceptance as a Canadian Base Rate Loan unless it is continued as
a Canadian Loan by way of Bankers' Acceptance in accordance with Section 4.11.
4.8. FUNDS FOR CANADIAN BASE RATE LOANS.
4.8.1. FUNDING PROCEDURES FOR CANADIAN BASE RATE LOANS TO ▇▇▇▇
CANADA. Not later than 1:30 p.m. (Toronto time) on the proposed
Drawdown Date of any Canadian Base Rate Loan, each of the Canadian
Lenders will make available to the Canadian Agent, at the Canadian
Agent's Office, in immediately available funds, the amount of such
Canadian Lender's Canadian Commitment Percentage of the amount of the
requested Canadian Base Rate Loans. Upon receipt from each Canadian
Lender of such amount, and upon receipt of the documents required by
Sections 13 (with respect to the initial Canadian Loan only) and 14 and
the satisfaction of the other conditions set forth therein, to the
extent applicable, the Canadian Agent will make available to ▇▇▇▇
Canada the aggregate amount of such Canadian Base Rate Loans made
available to the Canadian Agent by the Canadian Lenders. The failure or
refusal of any Canadian Lender to make available to the Canadian Agent
at the aforesaid time and place on any Drawdown Date the amount of its
Canadian Commitment Percentage of the requested Canadian Base Rate
Loans (i) shall not relieve any other Canadian Lender from its several
obligation hereunder to make available to the Canadian Agent the amount
of such other Canadian Lender's Canadian Commitment Percentage of any
requested Canadian Base Rate Loans and (ii) shall not impose upon such
other Canadian Lender any liability with respect to such failure or
refusal or otherwise increase the Canadian Commitment of such other
Canadian Lender.
4.8.2. ADVANCES BY CANADIAN AGENT FOR CANADIAN LOANS TO ▇▇▇▇
CANADA. The Canadian Agent may, unless notified to the contrary by any
Canadian Lender on or prior to a Drawdown Date, assume that such
Canadian Lender has made available to the Canadian Agent on such
Drawdown Date the amount of such Canadian Lender's Canadian Commitment
Percentage of the Canadian Base Rate
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Loans to be made on such Drawdown Date, and the Canadian Agent may (but
it shall not be required to), in reliance upon such assumption, make
available to ▇▇▇▇ Canada a corresponding amount. If any Canadian Lender
makes available to the Canadian Agent such amount on a date after such
Drawdown Date, such Canadian Lender shall pay to the Canadian Agent on
demand an amount equal to the product of (i) the average computed for
the period referred to in clause (iii) below, of the weighted average
interest rate paid by the Canadian Agent for overnight funds acquired
by the Canadian Agent during each day included in such period, times
(ii) the amount of such Canadian Lender's Canadian Commitment
Percentage of such Canadian Base Rate Loans, times (iii) a fraction,
the numerator of which is the number of days that elapse from and
including such Drawdown Date to the date on which the amount of such
Canadian Lender's Canadian Commitment Percentage of such Canadian Base
Rate Loans shall become immediately available to the Canadian Agent,
and the denominator of which is 360. A statement of the Canadian Agent
submitted to such Canadian Lender with respect to any amounts owing
under this paragraph shall be prima facie evidence of the amount due
and owing to the Canadian Agent by such Canadian Lender. If the amount
of such Canadian Lender's Canadian Commitment Percentage of such
Canadian Loans is not made available to the Canadian Agent by such
Canadian Lender within three (3) Business Days following such Drawdown
Date, the Canadian Agent shall be entitled to recover such amount from
▇▇▇▇ Canada on demand, with interest thereon at the rate per annum
applicable to the Canadian Base Rate Loans made on such Drawdown Date.
4.9. SETTLEMENTS; FAILURE TO MAKE FUNDS AVAILABLE.
(a) On each Settlement Date, the Canadian Agent shall, not
later than 10:00 a.m. (Toronto time), give telephonic or facsimile
notice (i) to the Canadian Lenders and ▇▇▇▇ Canada of the respective
outstanding amount of Canadian Loans, whether as Canadian Base Rate
Loans or as Bankers' Acceptances, made by the Canadian Agent on behalf
of the Canadian Lenders from the immediately preceding Canadian
Settlement Date through the close of business on the prior day and (ii)
to the Canadian Lenders of the amount (a "Canadian Settlement Amount")
that each Canadian Lender (the "Canadian Settling Lender") shall pay to
effect a Canadian Settlement of any Canadian Loan. A statement of the
Canadian Agent submitted to the Canadian Lenders and ▇▇▇▇ Canada with
respect to any amounts owing under this Section 4.9 shall be prima
facie evidence of the amount due and owing. Each Canadian Settling
Lender shall, not later than 3:00 p.m. (Toronto time) on such Canadian
Settlement Date, effect a wire transfer of immediately available funds
to the Canadian Agent in the amount of its Canadian Settlement Amount.
All funds advanced by any Canadian Lender as a Canadian Settling Lender
pursuant to this Section 4.9 shall for all purposes be treated as a
Canadian Base Rate Loan made by such Canadian Settling Lender to ▇▇▇▇
Canada, and all funds received by any Canadian Lender pursuant to this
Section 4.9 shall for all purposes be treated as repayment of amounts
owed with respect to Canadian Base Rate Loans made by such Canadian
Lender. In the event that any bankruptcy, reorganization, liquidation,
receivership or similar cases or proceedings in which ▇▇▇▇ Canada is a
debtor prevent a Canadian Settling Lender from making any Canadian Base
Rate Loan to effect a
39
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Canadian Settlement as contemplated hereby, such Canadian Settling
Lender will make such disposition and arrangements with the other
Canadian Lenders with respect to such Canadian Loans, either by way of
purchase of participations, distribution, pro tanto assignment of
claims, subrogation or otherwise as shall result in each Canadian
Lender's share of the outstanding Canadian Loans being equal, as nearly
as may be, to such Canadian Lender's Commitment Percentage of the
outstanding amount of the Canadian Loans.
(b) The Canadian Agent may, unless notified to the contrary by
any Canadian Lender prior to a Canadian Settlement Date, assume that
such Canadian Lender has made or will make available to the Canadian
Agent on such Canadian Settlement Date the amount of such Canadian
Lender's Canadian Settlement Amount, and the Canadian Agent may (but it
shall not be required to), in reliance upon such assumption, make
available to ▇▇▇▇ Canada a corresponding amount. If any Canadian Lender
makes available to the Canadian Agent such amount on a date after such
Canadian Settlement Date, such Canadian Lender shall pay to the
Canadian Agent on demand an amount equal to the product of (i) the
average computed for the period referred to in clause (iii) below, of
the weighted average interest rate paid by the Canadian Agent for
overnight funds acquired by such Canadian Agent during each day
included in such period, times (ii) the amount of such Canadian
Settlement Amount, times (iii) a fraction, the numerator of which is
the number of days that elapse from and including such Canadian
Settlement Date to the date on which the amount of such Canadian
Settlement Amount shall become immediately available to such Canadian
Agent, and the denominator of which is 360. A statement of the Canadian
Agent submitted to such Canadian Lender with respect to any amounts
owing under this paragraph shall be prima facie evidence of the amount
due and owing to the Canadian Agent by such Canadian Lender. If such
Canadian Lender's Canadian Settlement Amount is not made available to
the Canadian Agent by such Canadian Lender within three (3) Business
Days following such Canadian Settlement Date, the Canadian Agent shall
be entitled to recover such amount from ▇▇▇▇ Canada on demand, with
interest thereon at the rate per annum applicable to the Canadian Loans
as of such Canadian Settlement Date.
(c) The failure or refusal of any Canadian Lender to make
available to the Canadian Agent at the aforesaid time and place on any
Canadian Settlement Date the amount of its Canadian Settlement Amount
(i) shall not relieve any other Canadian Lender from its several
obligations hereunder to make available to the Canadian Agent the
amount of such other Canadian Lender's Canadian Settlement Amount and
(ii) shall not impose upon such other Canadian Lender any liability
with respect to such failure or refusal or otherwise increase the
Canadian Commitment of such other Canadian Lender.
4.10. BANKERS' ACCEPTANCES.
(a) To facilitate the procedures contemplated herein, ▇▇▇▇
Canada shall from time to time as required by the Canadian Agent
provide to the Canadian Agent, which shall then distribute to the
Canadian Lenders as applicable, an appropriate number of executed
drafts drawn by ▇▇▇▇ Canada upon each Canadian Lender and
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endorsed by ▇▇▇▇ Canada as payee, in the form prescribed by such
Canadian Lender for Bankers' Acceptances denominated in Canadian
Dollars (each such executed draft which has not yet been accepted by a
Canadian Lender is referred to herein as a "Draft"). The dates,
maturity dates and principal amounts of all Drafts delivered by ▇▇▇▇
Canada shall be left blank, to be completed by the Canadian Lenders as
required hereby. The Drafts shall be held by each Canadian Lender
subject to the same degree of care as if they were such Lender's own
property kept at the place at which the Drafts are ordinarily kept by
such Lender. No Canadian Lender shall be liable for its failure to
accept a Draft as required hereby if the cause of such failure is, in
whole or in part, due to the failure of ▇▇▇▇ Canada to provide Drafts
to the Canadian Agent on a timely basis.
(b) The Canadian Agent, promptly following receipt of a
Canadian Loan Request requesting Bankers' Acceptances, shall (i) advise
each Canadian Lender of the face amount and term of each Draft to be
accepted by it, and (ii) advise each Canadian Lender whether the
Canadian Lenders are required by such Canadian Loan Request to purchase
the Bankers' Acceptances accepted by them. The face amount of each
Bankers' Acceptance shall be C$100,000 or any whole multiple thereof,
and the aggregate face amount of Bankers' Acceptances issued pursuant
to any Canadian Loan Request shall not be less than C$1,000,000. Each
Bankers' Acceptance shall be dated the Drawdown Date on which it is
issued, and shall be for a term of 30, 60, 90 or 180 days. The
aggregate face amount of the Drafts to be accepted at any time by a
Canadian Lender, shall be determined by the Canadian Agent based upon
the amounts of the respective Commitments, except that, if the face
amount of any Draft to be accepted by a Canadian Lender determined as
aforesaid, would not be C$100,000 or a whole multiple thereof, the
Canadian Agent in its sole discretion may increase such face amount to
the nearest whole multiple of C$100,000 or may reduce such face amount
to the nearest whole multiple of C$100,000.
(c) Each Canadian Lender shall complete and accept on the
applicable Drawdown Date Drafts having the face amounts and term
advised by the Canadian Agent pursuant to Section 4.10(b). If the
Canadian Lenders have been required in the applicable Canadian Loan
Request to purchase the Bankers' Acceptances accepted by them, each
Canadian Lender shall purchase on the applicable Drawdown Date the
Bankers' Acceptances for a price equal to the BA Discount Proceeds
thereof. In all other cases, it shall be the responsibility of ▇▇▇▇
Canada to arrange in accordance with normal market practice for the
sale on each Drawdown Date of the Bankers' Acceptances issued by it on
such Drawdown Date, and for such purpose ▇▇▇▇ Canada shall advise the
Canadian Agent (which shall promptly give the relevant particulars to
each Canadian Lender) as soon as possible and in any event not later
than 10:00 a.m. (Toronto time) on such Drawdown Date of the price for
each Bankers' Acceptance payable by the purchaser thereof and the
identity of the person who will pay such price to and take delivery of
such Bankers' Acceptance from the applicable Canadian Lender, and such
Canadian Lender is hereby authorized to release such Bankers'
Acceptance to such person on receipt of a certified check or bank draft
in an amount equal to such price.
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(d) A Canadian Loan Request requesting a Canadian Loan by way
of Bankers' Acceptance shall be given not later than 10:00 a.m.
(Toronto time) on the second Business Day preceding the applicable
Drawdown Date.
(e) Upon acceptance of each Draft ▇▇▇▇ Canada shall pay to the
applicable Canadian Lender the related fee specified in Section 4.12
and to facilitate payments, such Lender shall be entitled to deduct and
retain for its own account the amount of such fee from the amount to be
transferred by such Lender to the Canadian Agent for the account of
▇▇▇▇ Canada in respect of the sale of the related Bankers' Acceptance.
(f) If the Canadian Agent determines in good faith, which
determination shall be final, conclusive and binding upon ▇▇▇▇ Canada,
and so notifies ▇▇▇▇ Canada that there does not exist at the applicable
time a normal market in Canada for the purchase and sale of Bankers'
Acceptances, any right of ▇▇▇▇ Canada to require the Canadian Lenders
to purchase Bankers' Acceptances hereunder shall be suspended until the
Canadian Agent determines that such market does exist and gives notice
thereof to ▇▇▇▇ Canada, and any Canadian Loan Request requesting
Bankers' Acceptances shall be deemed to be a Canadian Loan Request
requesting Canadian Base Rate Loans in a similar aggregate principal
amount.
(g) On the date of maturity of each Bankers' Acceptance, ▇▇▇▇
Canada shall pay to the Canadian Agent, for the account of the holder
of such Bankers' Acceptance, Canadian Dollars in an amount equal to the
face amount of such Bankers' Acceptance. The obligation of ▇▇▇▇ Canada
to make such payment shall not be prejudiced by the fact that the
holder of any such Bankers' Acceptance is the Canadian Lender that
accepted such Bankers' Acceptance. No days of grace shall be claimed by
▇▇▇▇ Canada for the payment at maturity of any Bankers' Acceptance. If
▇▇▇▇ Canada does not make such payment, from the proceeds of Canadian
Loans obtained hereunder or otherwise, the Canadian Lender that
accepted such Bankers' Acceptance may (but shall not be obliged to),
without receipt of a Canadian Loan Request and irrespective of whether
any other applicable conditions precedent specified herein have been
satisfied, and without waiver of the Default constituted by ▇▇▇▇
Canada's failure to make such payment, make a Canadian Base Rate Loan
to ▇▇▇▇ Canada in the face amount of such Bankers' Acceptance, and
shall forthwith give notice thereof to ▇▇▇▇ Canada and the Canadian
Agent (which shall promptly give similar notice to the other Canadian
Lenders). ▇▇▇▇ Canada agrees to accept each such Canadian Base Rate
Loan and hereby irrevocably authorizes and directs the applicable
Canadian Lender to apply the proceeds thereof in payment of the
liability of ▇▇▇▇ Canada with respect to the related Bankers'
Acceptance. Notwithstanding any other provisions hereof, all Canadian
Base Rate Loans made as contemplated by this Section 4.10(g) shall be
payable on demand by the Canadian Agent or the applicable Lender.
(h) If any Bankers' Acceptance is outstanding at any time that
an Event of Default occurs, ▇▇▇▇ Canada shall forthwith upon demand by
the Canadian Agent pay to the Canadian Agent, for the account of the
holder of such Bankers' Acceptance, Canadian Dollars in an amount equal
to the face amount thereof. Such funds (together with interest thereon)
shall be held by the Canadian Agent, subject
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to Section 15.5 for payment of the liability of ▇▇▇▇ Canada in respect
of such Bankers' Acceptance and shall bear interest for such terms as
are selected from time to time by the Canadian Agent at the wholesale
money market rate of the Canadian Agent for deposits of similar amounts
and maturities. Any balance of such funds and interest shall be held by
the Canadian Agent as security for the remaining liabilities of ▇▇▇▇
Canada under the Loan Documents.
(i) The signature of any Senior Officer of ▇▇▇▇ Canada on a
Draft may be mechanically reproduced in facsimile, and all Drafts
bearing such facsimile signature shall be binding upon ▇▇▇▇ Canada as
if they had been manually signed by such Senior Officer,
notwithstanding that such person whose manual or facsimile signature
appears on such Draft may no longer hold office at the date thereof or
at the date of acceptance of such Draft by a Canadian Lender or at any
time thereafter.
(j) For the purpose of calculating the undisbursed Canadian
Commitments and for any other relevant provision of this Agreement, the
amount of Canadian Loans constituted by any Bankers' Acceptance shall
be the face amount thereof.
(k) In no event shall a Bankers' Acceptance be issued for a
term that would extend beyond the Maturity Date
4.11. CONVERSIONS AND ROLLOVERS UNDER CANADIAN COMMITMENTS. ▇▇▇▇ Canada
shall have the option at any time:
(a) To convert from time to time any Canadian Loans then
outstanding under the Canadian Commitment into Canadian Loans of
another type in an aggregate Canadian Dollar Amount equal to the
aggregate Canadian Dollar Amount of such outstanding Canadian Loans
provided that the proceeds of such new Canadian Loans together with
such additional funds as may be required are made available by ▇▇▇▇
Canada to the Lenders under the Canadian Commitment to repay such
outstanding Canadian Loans, and provided further that such outstanding
Canadian Loans are repaid in accordance with Section 5, and such new
Canadian Loan is obtained in accordance with Section 4 and any other
applicable provisions hereof; and
(b) Contemporaneously with the maturity of any Bankers'
Acceptances outstanding under the Canadian Commitment, to obtain new
Bankers' Acceptances or Canadian Base Rate Loans under the Canadian
Commitment in an aggregate Canadian Dollar Amount equal to the
aggregate Canadian Dollar Amount of such maturing Bankers' Acceptances
provided that the proceeds of such new Canadian Loans together with
such additional funds as may be required are made available by ▇▇▇▇
Canada to the Canadian Lenders under the Canadian Commitment to repay
such outstanding Bankers' Acceptances, and provided further that such
new Canadian Loan is obtained in accordance with Section 4 and any
other applicable provisions hereof.
For the purposes hereof, the term "Canadian Dollar Amount" means the
principal amount of any Canadian Base Rate Loan and the face amount of any
Bankers' Acceptance.
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4.12. FEES FOR BANKERS' ACCEPTANCES. ▇▇▇▇ Canada shall pay to each
Canadian Lender in respect of each Draft tendered by ▇▇▇▇ Canada to and accepted
by such Canadian Lender pursuant to the Canadian Commitment as a condition of
such acceptance a fee in Canadian Dollars calculated on the basis of the face
amount and the term of such Bankers' Acceptance and at a rate per annum equal to
such Canadian Lender's Acceptance Rate.
4.13. PROCEEDS OF BANKERS ACCEPTANCES. Each Canadian Lender shall
transfer for value on each applicable Drawdown Date immediately available
Canadian Dollars in an aggregate amount equal to the amount of all BA Discount
Proceeds in respect of any Bankers' Acceptance purchased by it on such Drawdown
Date and the amount of all proceeds received by it as contemplated by Section
4.10(c) in respect of any Bankers' Acceptance accepted by it and purchased by a
third party on such Drawdown Date, in each case net of the related fee payable
to such Lender pursuant to Section 4.12 to the Canadian Agent's Canadian Dollar
Account, Account No. 73-39410. Provided that no costs in excess of costs
associated with a transfer to the accounts specified in the preceding sentence
would be incurred by ▇▇▇▇ Canada or any of the Canadian Lenders, the Canadian
Agent may designate such other accounts and offices as it may see fit for the
purposes referred to in the preceding sentence. Subject to any direction given
to the Canadian Agent by ▇▇▇▇ Canada, the Canadian Agent shall make all such
amounts received by it from the Canadian Lenders as aforesaid available to ▇▇▇▇
Canada by depositing the same for value on the applicable Drawdown Date to such
account in the name of ▇▇▇▇ Canada as ▇▇▇▇ Canada shall have previously
designated by timely notice in writing to the Canadian Agent. Notwithstanding
any other provision hereof, for the purpose of determining the amount to be
transferred by a Canadian Lender named in Schedule II to the Bank Act (Canada)
to the Canadian Agent for the account of ▇▇▇▇ Canada pursuant to this Section
4.13 in respect of the sale of any Bankers' Acceptance accepted by such Canadian
Lender and purchased by a third party, the proceeds of sale thereof shall be
deemed to be an amount equal to the BA Discount Proceeds calculated with respect
thereto. Accordingly, in respect of any particular Bankers' Acceptance accepted
by it and purchased by a third party, such Canadian Lender (i) shall be entitled
to retain for its own account the amount, if any, by which the actual proceeds
of sale thereof exceeds the BA Discount Proceeds calculated with respect
thereto, and (ii) shall be required to pay from its own account to ▇▇▇▇ Canada
the amount, if any, by which the actual proceeds of sale thereof is less than
the BA Discount Proceeds calculated with respect thereto.
5. REPAYMENT OF THE CANADIAN LOANS.
5.1. MATURITY. ▇▇▇▇ Canada promises to pay on the Maturity Date, and
there shall become absolutely due and payable on the Maturity Date, all of the
Canadian Loans outstanding on such date, together with any and all accrued and
unpaid interest thereon.
5.2. MANDATORY REPAYMENTS OF CANADIAN LOANS. If at any time the sum of
the outstanding amount of the Canadian Loans exceeds the Canadian Total
Commitment, then ▇▇▇▇ Canada shall, upon demand or immediately upon discovery by
▇▇▇▇ Canada of such excess, pay the amount of such excess to the Canadian Agent
for the respective accounts of the Canadian Lenders for application to the
Canadian Loans. Each prepayment of Canadian Loans shall be allocated among the
Canadian Lenders in proportion to the respective unpaid principal amount of each
Canadian Lender's Canadian Loans, with
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adjustments to the extent practicable to equalize any prior payments or
repayments not exactly in proportion.
5.3. OPTIONAL REPAYMENTS OF CANADIAN LOANS. ▇▇▇▇ Canada shall have the
right, at its election, to repay the outstanding amount of the Canadian Loans,
in whole or in part, at any time and from time to time without penalty or
premium; provided that ▇▇▇▇ Canada shall not have the right to prepay any amount
outstanding by way of Bankers' Acceptance other than on the maturity date of
such Bankers' Acceptance. ▇▇▇▇ Canada shall give the Canadian Agent written
notice of any proposed prepayment no later than (i) 2:00 p.m., Toronto time, on
the date of any proposed prepayment pursuant to this Section 5.3 of Canadian
Loans, in each case specifying the proposed date of prepayment of Canadian Loans
and the principal amount to be prepaid (the Canadian Agent agreeing to notify
the Canadian Lenders promptly of the giving of any such notice by ▇▇▇▇ Canada).
Each such partial prepayment of Canadian Loans shall be in a minimum amount of
C$100,000, and shall be accompanied by the payment of accrued interest on the
principal prepaid to the date of prepayment. Each partial prepayment shall be
allocated among the Canadian Lenders, in proportion to the respective unpaid
principal amount of each Canadian Lender's Loan, with adjustments to the extent
practicable to equalize any prior repayments not exactly in proportion.
Notwithstanding the notice and minimum requirements set forth in this Section
5.3, the Canadian Agent may, in its sole discretion, allow ▇▇▇▇ Canada to repay
Canadian Loans made by the Canadian Agent in amounts as otherwise requested by
▇▇▇▇ Canada.
6. LETTERS OF CREDIT.
6.1. LETTER OF CREDIT COMMITMENTS.
6.1.1. COMMITMENT TO ISSUE LETTERS OF CREDIT. Subject to the
terms and conditions hereof and to the execution and delivery by the
Domestic Borrowers, or either of them, of a letter of credit
application on the Agent's customary form (a "Letter of Credit
Application"), the Agent on behalf of the U.S. Lenders and in reliance
upon the agreement of the U.S. Lenders set forth in Section 6.1.4 and
upon the representations and warranties of the Domestic Borrowers
contained herein, agrees, in its individual capacity, to issue, extend
and renew from time to time from the date hereof until but not
including the then scheduled Maturity Date, for the account of the
Domestic Borrowers, one or more standby or documentary letters of
credit (individually, a "Letter of Credit"), in such form as may be
requested from time to time by the Domestic Borrowers and agreed to by
the Agent; provided, however, that, after giving effect to such
request, (a) the sum of the aggregate Maximum Drawing Amount and all
Unpaid Reimbursement Obligations shall not exceed $5,000,000 at any one
time and (b) the sum of (i) the Maximum Drawing Amount on all Letters
of Credit, (ii) all Unpaid Reimbursement Obligations, and (iii) the
amount of all U.S. Loans outstanding shall not exceed the U.S. Total
Commitment. The letters of credit, if any, issued by the Prior Agent
for the account of the Domestic Borrowers pursuant to the Prior Credit
Agreement and listed on Schedule 6.1.1 hereto, shall, from and after
the Closing Date, constitute Letters of Credit for all purposes of this
Credit Agreement. No Letter of Credit shall be issued, extended or
renewed with an expiration date occurring after the date which
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is 180 days following the then scheduled Maturity Date or which
provides for drafts which may be paid after the date which is 180 days
following the then scheduled Maturity Date.
6.1.2. LETTER OF CREDIT APPLICATIONS. Each Letter of Credit
Application shall be completed to the reasonable satisfaction of the
Agent. In the event that any provision of any Letter of Credit
Application shall be inconsistent with any provision of this Credit
Agreement, then the provisions of this Credit Agreement shall, to the
extent of any such inconsistency, govern.
6.1.3. TERMS OF LETTERS OF CREDIT. Each Letter of Credit
issued, extended or renewed hereunder shall, among other things, be
denominated in Dollars and shall provide for the payment of sight
drafts for honor thereunder when presented in accordance with the terms
thereof and when accompanied by the documents described therein. Each
Letter of Credit issued, extended or renewed hereunder shall have an
expiry date no more than three hundred sixty-five (365) days from the
issue date thereof. Each Letter of Credit so issued, extended or
renewed shall be subject to the Uniform Customs.
6.1.4. REIMBURSEMENT OBLIGATIONS OF U.S. LENDERS. Each U.S.
Lender severally agrees that it shall be absolutely liable, without
regard to the occurrence of any Default or Event of Default or any
other condition precedent whatsoever, to the extent of such U.S.
Lender's U.S. Commitment Percentage, to reimburse the Agent on demand
for the amount of each draft paid by the Agent under each Letter of
Credit to the extent that such amount is not reimbursed by the Domestic
Borrowers or repaid by the making of a Loan by the Agent, in each case
pursuant to Section 6.2 (such agreement for a U.S. Lender being called
herein the "Letter of Credit Participation" of such U.S. Lender). The
provisions for U.S. Settlements in Section 2.9 shall apply to any U.S.
Loans made by the Agent in its discretion under Section 2.6(b) and
Section 6.2(a).
6.1.5. PARTICIPATIONS OF U.S. LENDERS. Each such payment made
by a U.S. Lender shall be treated as the purchase by such U.S. Lender
of a participating interest in the Domestic Borrowers' Reimbursement
Obligation under Section 6.2 in an amount equal to such payment. Each
U.S. Lender shall share in accordance with its participating interest
in any interest which accrues pursuant to Section 6.2.
6.2. REIMBURSEMENT OBLIGATION OF THE DOMESTIC BORROWERS. In order to
induce the Agent to issue, extend and renew each Letter of Credit and the U.S.
Lenders to participate therein, each of the Domestic Borrowers hereby jointly
and severally agrees to reimburse or pay to the Agent, for the account of the
Agent or (as the case may be) the U.S. Lenders, with respect to each Letter of
Credit issued, extended or renewed by the Agent hereunder,
(a) except as otherwise expressly provided in Section 6.2(b)
and (c), no later than the Business Day following each date that any
draft presented under such Letter of Credit is honored by the Agent
(or, if later, one day after the Agent has notified the Domestic
Borrowers of its intention to honor such draft), or the Agent otherwise
makes a payment with respect thereto, (i) the amount paid by the Agent
under or
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with respect to such Letter of Credit, and (ii) the amount of any
taxes, fees, charges or other reasonable costs and expenses whatsoever
incurred by the Agent or any U.S. Lender in connection with any payment
made by the Agent or any U.S. Lender under, or with respect to, such
Letter of Credit, provided that subject to all of the conditions to the
making of U.S. Loans pursuant to a Loan Request hereunder including,
without limitation, the provisions of Section 14 hereof, such
Reimbursement Obligations, if not so paid by the Domestic Borrowers
may, at the Agent's sole discretion, so long as all such applicable
conditions to the making of U.S. Loans hereunder are met (and subject
to the applicable provisions of Section 2.6(b) and Section 2.9 hereof),
be treated for all purposes as Base Rate Loans made by the Agent
pursuant to the provisions of Section 2.6(b) hereof.
(b) upon the reduction (but not termination) of the U.S. Total
Commitment to an amount less than the Maximum Drawing Amount, an amount
equal to such difference, which amount shall be held by the Agent for
the benefit of the U.S. Lenders and the Agent as cash collateral,
pursuant to a Cash Collateral Agreement, for all Reimbursement
Obligations, and
(c) upon the termination of the U.S. Total Commitment, or the
acceleration of the Reimbursement Obligations with respect to all
Letters of Credit in accordance with Section 15, an amount equal to the
then Maximum Drawing Amount on all Letters of Credit, which amount
shall be held by the Agent for the benefit of the U.S. Lenders and the
Agent as cash collateral, pursuant to a Cash Collateral Agreement, for
all Reimbursement Obligations.
Each such payment shall be made to the Agent at the Agent's Office in
immediately available funds. Interest on any and all amounts remaining unpaid by
the Domestic Borrowers under this Section 6.2 at any time from the date such
amounts become due and payable (whether as stated in this Section 6.2, by
acceleration or otherwise) until payment in full (whether before or after
judgment) shall be payable to the Agent on demand at the rate specified in
Section 7.12 for overdue principal on the U.S. Loans.
6.3. LETTER OF CREDIT PAYMENTS. If any draft shall be presented or
other demand for payment shall be made under any Letter of Credit, the Agent
shall promptly notify the Domestic Borrowers of the date and amount of the draft
presented or demand for payment and of the date and time when it expects to pay
such draft or honor such demand for payment. If the Domestic Borrowers fail to
reimburse the Agent as provided in Section 6.2 on or before the Business Day
following the date that such draft is paid or other payment is made by the
Agent, and such Reimbursement Obligation is not funded by the making of a Base
Rate Loan by the Agent pursuant to Section 6.2, the Agent may at any time
thereafter notify the U.S. Lenders of the amount of any such Unpaid
Reimbursement Obligation. To the extent that a Base Rate Loan has not been made
pursuant to Section 6.2, no later than 3:00 p.m. (Boston time) on the Business
Day next following the receipt of such notice, each U.S. Lender shall make
available to the Agent, at the Agent's Office, in immediately available funds,
such U.S. Lender's U.S. Commitment Percentage of such Unpaid Reimbursement
Obligation, together with an amount equal to the product of (i) the average,
computed for the period referred to in clause (iii) below, of the weighted
average interest rate paid by the Agent for federal funds acquired by the Agent
during each day included in such period,
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times (ii) the amount equal to such U.S. Lender's U.S. Commitment Percentage of
such Unpaid Reimbursement Obligation, times (iii) a fraction, the numerator of
which is the number of days that elapse from and including the date the Agent
paid the draft presented for honor or otherwise made payment to the date on
which such U.S. Lender's U.S. Commitment Percentage of such Unpaid Reimbursement
obligation shall become immediately available to the Agent, and the denominator
of which is 360. The responsibility of the Agent to the Domestic Borrowers and
the U.S. Lenders shall be only to determine that the documents (including each
draft) delivered under each Letter of Credit in connection with such presentment
shall be in conformity in all material respects with such Letter of Credit.
6.4. OBLIGATIONS ABSOLUTE. The Domestic Borrowers' obligations under
this Section 6 shall be absolute and unconditional under any and all
circumstances and irrespective of the occurrence of any Default or Event of
Default or any condition precedent whatsoever or any setoff, counterclaim or
defense to payment which the Domestic Borrowers may have or have had against the
Agent, any U.S. Lender or any beneficiary of a Letter of Credit. Each of the
Domestic Borrowers further agrees with the Agent and the U.S. Lenders that the
Agent and the U.S. Lenders shall not be responsible for, and the Domestic
Borrowers' Reimbursement Obligations under Section 6.2 shall not be affected by,
among other things, the validity or genuineness of documents or of any
endorsements thereon, even if such documents should in fact prove to be in any
or all respects invalid, fraudulent or forged, or any dispute between or among
the Domestic Borrowers, the beneficiary of any Letter of Credit or any financial
institution or other party to which any Letter of Credit may be transferred or
any claims or defenses whatsoever of the Domestic Borrowers against the
beneficiary of any Letter of Credit or any such transferee. The Agent and the
U.S. Lenders shall not be liable for, and the Domestic Borrowers' Reimbursement
Obligations under Section 6.2 shall not be affected by, any error, omission,
interruption or delay in transmission, dispatch or delivery of any message or
advice, however transmitted, in connection with any Letter of Credit. Each of
the Domestic Borrowers agrees that any action taken or omitted by the Agent or
any U.S. Lender under or in connection with each Letter of Credit and the
related drafts and documents, if done in good faith and without gross
negligence, shall be binding upon the Domestic Borrowers and shall not result in
any liability on the part of the Agent or any U.S. Lender to the Domestic
Borrowers, and the Domestic Borrowers' Reimbursement Obligations under Section
6.2 shall not be affected thereby.
6.5. RELIANCE BY ISSUER. To the extent not inconsistent with Section
6.4, the Agent shall be entitled to rely, and shall be fully protected in
relying upon, any Letter of Credit, draft, writing, resolution, notice, consent,
certificate, affidavit, letter, cablegram, telegram, telecopy, telex or teletype
message, statement, order or other document believed by it in good faith to be
genuine and correct and to have been signed, sent or made by the proper Person
or Persons and upon advice and statements of legal counsel, independent
accountants and other experts selected by the Agent. The Agent shall be fully
justified in failing or refusing to take any action under this Agreement unless
it shall first have received such advice or concurrence of the Majority Lenders
(or, if so required by this Credit Agreement, all of the Lenders) as it
reasonably deems appropriate or it shall first be indemnified to its reasonable
satisfaction by the U.S. Lenders against any and all liability and expense which
may be incurred by it by reason of taking or continuing to take any such action.
The Agent shall in all cases be fully protected in acting, or in refraining from
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acting, under this Agreement in accordance with a request of the Majority
Lenders (or, if so required by this Credit Agreement, all of the Lenders), and
such request and any action taken or failure to act pursuant thereto shall be
binding upon the Lenders and all future holders of the Notes or of a Letter of
Credit Participation.
6.6. LETTER OF CREDIT FEES. The Domestic Borrowers requesting a Letter
of Credit shall pay to the Agent (in each case, a "Letter of Credit Fee") (a)
for the accounts of the U.S. Lenders in accordance with their respective U.S.
Commitment Percentages, a commission on the average daily face amount of each
outstanding Letter of Credit (i) with respect to each documentary Letter of
Credit, at the Documentary Letter of Credit Applicable Margin per annum, and
(ii) with respect to each standby Letter of Credit, at the Standby Letter of
Credit Applicable Margin per annum, payable in either such case quarterly in
arrears on the first Business Day of each quarter for the immediately preceding
quarter in which any Letters of Credit shall have been or remain outstanding,
and on the Maturity Date (including Letter of Credit Fees relating to Letters of
Credit expiring after the Maturity Date), and (b) for the Agent's own account,
such customary commissions, issuance fees, transfer fees and other fees and
charges in connection with the issuance or administration of each Letter of
Credit as the Domestic Borrowers and the Agent shall agree.
6.7. CASH COLLATERAL FOR LETTERS OF CREDIT. Prior to the then scheduled
Maturity Date, the Domestic Borrowers shall, with respect to each Letter of
Credit then outstanding and pursuant to a cash collateral agreement (the "Cash
Collateral Agreement") in substantially the form of Exhibit C, (a) pay to the
Agent in cash for deposit into an interest bearing cash collateral account
established with the Agent (the "Letter of Credit Cash Collateral Account") an
amount equal to one hundred percent (100%) of the Maximum Drawing Amount of such
Letter of Credit as of such date, which amount shall be held by the Agent as
cash collateral for any Reimbursement Obligations or other obligations incurred
with respect to such Letter of Credit, or (b) deliver to the Agent a
"back-to-back" letter of credit, in form and substance reasonably satisfactory
to the Agent, issued by a financial institution reasonably satisfactory to the
Agent and naming the Agent as beneficiary in an amount equal to one hundred
percent (100%) of the Maximum Drawing Amount of such Letter of Credit as of such
date. Any cash sums deposited into the Letter of Credit Cash Collateral Account
pursuant to clause (a) and naming the Agent as beneficiary of this Section 6.7
shall be promptly (but in any event within one (1) Business Day) reduced or
released, and any back-to-back letter of credit issued pursuant to clause (b)
and naming the Agent as beneficiary of this Section 6.7 shall be promptly (but
in any event within one (1) Business Day) reduced in amount or returned, if and
to the extent that the Maximum Drawing Amount with respect to the applicable
Letter of Credit has been reduced or such Letter of Credit has expired or been
cancelled and all Unpaid Reimbursement Obligations and other amounts due or to
become due with respect thereto have been paid.
7. CERTAIN GENERAL PROVISIONS.
7.1. FEE LETTER. The Borrowers agree to pay all fees in accordance with
the terms of the fee letter, dated as of March 30, 2000 (the "Fee Letter"),
which are payable on the Closing Date in accordance with the terms of the Fee
Letter.
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7.2. AGENT'S AND ARRANGER'S FEE. The Borrowers agree to pay to each of
the Agent and the Arranger the fees referred to in the agent's fee letter, dated
as of March 30, 2000 (the "Agent's Fee Letter"), in accordance with the terms of
the Agent's Fee Letter.
7.3. FUNDS FOR PAYMENTS.
7.3.1. PAYMENTS TO AGENT. All payments of principal, interest,
Reimbursement Obligations, commitment fees, Letter of Credit Fees and
any other amounts due hereunder or under any of the other Loan
Documents shall be made to the Agent, for the respective accounts of
the Lenders and the Agent, at the Agent's Office or at such other
location in the Boston, Massachusetts, area that the Agent may from
time to time designate, in each case in immediately available funds in
Dollars; provided, however, notwithstanding the foregoing, payments of
principal and interest and any other amounts due hereunder or any of
the other Loan Documents with respect to Canadian Loans that are, in
accordance with the terms hereof, to be paid to the Canadian Agent,
shall be paid to the Canadian Agent, at the Canadian Agent's Office or
at such other location in the metropolitan Toronto area that the
Canadian Agent may from time to time designate, in each case in
immediately available funds in Canadian Dollars.
7.3.2. NO OFFSET, ETC. All payments by the Borrowers hereunder
and under any of the other Loan Documents shall be made without setoff
or counterclaim and free and clear of and without deduction for any
taxes, levies, imposts, duties, charges, fees, deductions,
withholdings, compulsory loans, restrictions or conditions of any
nature now or hereafter imposed or levied by any jurisdiction or any
political subdivision thereof or taxing or other authority therein
unless the Borrowers are compelled by law to make such deduction or
withholding, excluding, (i) in the case of each Lender and the Agent
and Canadian Agent, taxes imposed on its gross or net income, and
franchise taxes imposed on it by the jurisdiction under the laws of
which such Lender or the Agent or Canadian Agent (as the case may be)
is organized or by any political subdivision thereof or, in the case of
each Lender, taxes imposed on its gross or net income, and franchise
taxes imposed on it by the jurisdiction of such Lender's Applicable
Lending Office, or any political subdivision thereof and (ii) in the
case of each Lender, United States income tax or withholding (a
"withholding tax") payable with respect to payments hereunder or under
the other Loan Documents under laws (including, without limitation, any
statute, treaty, ruling, court decision, determination or regulation)
in effect and being applied on the Reference Date (as hereinafter
defined); provided, however, that any United States withholding tax
payable as a result of any change in such laws occurring after the
Reference Date shall not be so excluded; and provided further that if
any payment by the Borrowers to the Agent, or the Lenders is charged
with any United States withholding tax not in effect on the Reference
Date or if such withholding tax is increased subsequent to the
Reference Date, such withholding tax or increased withholding tax shall
not be deemed to result from a change in law within the meaning of the
preceding proviso if such payment is effectively connected with a
United States trade or business of the recipient subject to United
States income taxes thereon (all such non-excluded taxes, levies,
imposts, duties, charges, fees, deductions, withholdings and
liabilities being hereinafter referred to
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as "Taxes"). For purposes of this Section 7.3.2, the term "Reference
Date" shall mean, in the case of each Lender on the Closing Date, the
Closing Date and, in the case of each party who subsequently becomes a
Lender, the effective date of the Assignment and Acceptance pursuant to
which it became a Lender and, in the case of any Lender that at any
time changes its Applicable Lending Office for Base Rate Loans or
Eurodollar Rate Loans to a different nation from the nation in which
the Applicable Lending Office from which such Loans were made prior to
such time is located, the date of such change. If any Taxes shall be
required by law to be deducted from any amount payable hereunder or
under any other Loan Document, the Borrowers will pay to the Agent for
the account of the U.S. Lenders or ▇▇▇▇ Canada shall pay to the
Canadian Agent for the account of the Canadian Lenders, as the case may
be, on the date on which such amount is due and payable hereunder or
under such other Loan Document, such additional amount in Dollars or
Canadian Dollars (as the case may be) as shall be necessary to enable
such U.S. Lenders or the Agent or the Canadian Lenders or the Canadian
Agent, as the case may be, to receive the same net amount which such
U.S. Lenders or the Agent or the Canadian Lenders or the Canadian
Agent, as the case may be, would have received on such due date had no
such deduction been imposed upon the Borrowers or ▇▇▇▇ Canada, as the
case may be; provided, however, that the Borrowers shall not be
required to pay any amounts pursuant to the preceding sentence to the
Agent with respect to any Lender organized under the laws of a
jurisdiction outside of the United States, if such deductions are
caused by the failure of such Lender to execute and deliver to the
Borrowers any certificates, forms or other documents reasonably
requested by the Borrowers, which can be furnished consistent with the
facts and which are reasonably necessary to assist the Borrowers in
applying for refunds of taxes remitted hereunder or determining amounts
payable by the Borrowers under this Section 7.3.2. If the Borrowers
have paid any increased amounts to any Lender pursuant to this Section
7.3.2, each Lender agrees that to the extent such Lender receives a
refund or tax credit attributed to the additional amounts remitted by
the Borrowers hereunder, such Lender shall forward such refund or the
amount of such tax credit to the Borrowers within thirty (30) days
after receipt by the Lender. The Borrowers will deliver promptly to the
Agent and the Canadian Agent certificates or other valid vouchers for
all taxes or other charges deducted from or paid with respect to
payments made by the Borrowers hereunder or under such other Loan
Document.
7.3.3. FOREIGN LENDERS. (a) Each U.S. Lender that is a party
to this Credit Agreement on the date hereof and that is not
incorporated under the laws of the United States of America or a state
thereof agrees that it will deliver to each of the Domestic Borrowers
and the Agent, within seven (7) Business Days after the Closing Date
or, in the case of each U.S. Lender which becomes a U.S. Lender
pursuant to an Assignment and Acceptance, on the date which such
Assignment and Acceptance becomes effective, and only if it can do so
consistent with the facts, two duly completed copies of United States
Internal Revenue Service Form 1001 or 4224 (or other applicable form
prescribed by the United States Internal Revenue Service), in each case
certifying whether such U.S. Lender is entitled to receive payments
under this Credit Agreement and the Notes without deduction or
withholding of any United States federal income taxes or at reduced
withholding
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rates, as applicable. Each such U.S. Lender which so delivers a Form
1001 or 4224 (or other applicable form prescribed by the United States
Internal Revenue Service), and any U.S. Lender that hereafter becomes a
party to this Credit Agreement, further undertakes to deliver to each
of the Domestic Borrowers and the Agent two additional copies of such
form (or a successor form) on or before the date that such form expires
or becomes obsolete or as soon as practicable after the occurrence of
any event requiring a change in the most recent form so delivered by
it, and such amendments thereto or extensions or renewals thereof as
may be reasonably requested by the Domestic Borrowers or the Agent, in
each case certifying whether such U.S. Lender is entitled to receive
payments under this Credit Agreement and the Notes without deduction or
withholding of any United States federal income taxes, unless an event
(including without limitation any change in treaty, law or regulation)
has occurred prior to the date on which any such delivery would
otherwise be required which renders all such forms inapplicable or
which would prevent such U.S. Lender from duly completing and
delivering any such form with respect to it and such U.S. Lender
advises the Domestic Borrowers and the Agent that it is not capable of
receiving payments without any deduction or withholding of United
States federal income tax. Unless the Domestic Borrowers and the Agent
have received forms or other documents satisfactory to them indicating
that payments hereunder or under any of the other Loan Documents are
not subject to United States withholding tax or are subject to such tax
at a rate reduced by an applicable tax treaty, the Domestic Borrowers
or the Agent shall withhold taxes from such payments at the applicable
statutory rate in the case of payments to or for any U.S. Lender
organized under the laws of a jurisdiction outside the United States.
If the Domestic Borrowers or the Agent have received such forms or
other documents satisfactory to the Domestic Borrowers and the Agent,
the Domestic Borrowers or the Agent shall withhold United States
withholding taxes from such payments to such U.S. Lender only to the
extent appropriate.
(b) Each Lender which is not incorporated under the laws of
the United States of America or a state thereof shall deliver to the
Borrowers on the Closing Date and prior to the last day of each
calendar year thereafter a duly executed Internal Revenue Service Form
W-8 or W-9 or other appropriate Internal Revenue Service form,
effective for the succeeding calendar year.
7.3.4. APPLICABLE LENDING OFFICE. Any Lender claiming any
additional amounts payable pursuant to this Section 7.3 shall, to the
extent it can do so without incurring material additional costs,
endeavor (consistent with legal and regulatory restrictions) to change
the jurisdiction of its Applicable Lending Office if the making of such
a change would avoid the need for, or reduce the amount of, any such
additional amounts which may thereafter accrue.
7.4. COMPUTATIONS. All computations of interest on the Loans and of
commitment fees, Letter of Credit Fees or other fees shall, unless otherwise
expressly provided herein, be based on a 365 or 366 day year and paid for the
actual number of days elapsed; provided, however, that computations of interest
on Eurodollar Rate Loans shall be based on a 360 day year and paid for the
actual number of days elapsed. Except as otherwise provided in the definition of
the term "Interest Period" with respect to Eurodollar Rate
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Loans, whenever a payment hereunder or under any of the other Loan Documents
becomes due on a day that is not a Business Day, the due date for such payment
shall be extended to the next succeeding Business Day, and interest shall accrue
during such extension. The outstanding amount of the Loans as reflected on the
Records of the Agent and Canadian Agent, as the case may be, from time to time
shall be considered prima facie evidence of the outstanding amount of the Loans
owing by the Borrowers to the Lenders.
7.5. INABILITY TO DETERMINE EURODOLLAR RATE. In the event, prior to the
commencement of any Interest Period relating to any Eurodollar Rate Loan, the
Agent shall determine that adequate and reasonable methods do not exist for
ascertaining the Eurodollar Rate that would otherwise determine the rate of
interest to be applicable to any Eurodollar Rate Loan during any Interest
Period, the Agent shall forthwith give notice of such determination (which shall
be conclusive and binding on the Domestic Borrowers and the U.S. Lenders) to the
Domestic Borrowers and the U.S. Lenders. In such event (i) any Loan Request or
Conversion Request with respect to Eurodollar Rate Loans shall be automatically
withdrawn and shall be deemed a request for Base Rate Loans, (ii) each
Eurodollar Rate Loan will automatically, on the last day of the then current
Interest Period relating thereto, become a Base Rate Loan, and (iii) the
obligations of the U.S. Lenders to make Eurodollar Rate Loans shall be suspended
until the Agent determines that the circumstances giving rise to such suspension
no longer exist, whereupon the Agent shall so notify the Domestic Borrowers and
the U.S. Lenders and the Domestic Borrowers shall thereafter have the right to
elect Eurodollar Rate Loans hereunder.
7.6. ILLEGALITY. Notwithstanding any other provisions herein, if any
present or future law, regulation, treaty or directive or the interpretation or
application thereof shall make it unlawful for any U.S. Lender to make or
maintain Eurodollar Rate Loans, such U.S. Lender shall forthwith give notice of
such circumstances to the Domestic Borrowers and the other U.S. Lenders and
thereupon (i) the commitment of such U.S. Lender to make Eurodollar Rate Loans
or convert U.S. Loans of another Type to Eurodollar Rate Loans shall forthwith
be suspended and (ii) such U.S. Lender's Loans then outstanding as Eurodollar
Rate Loans, if any, shall be converted automatically to Base Rate Loans on the
last day of each Interest Period applicable to such Eurodollar Rate Loans or
within such earlier period as may be required by law. Each of the Domestic
Borrowers hereby agrees promptly to pay the Agent for the account of such U.S.
Lender, upon demand by such U.S. Lender, any additional amounts necessary to
compensate such U.S. Lender for any costs reasonably incurred by such U.S.
Lender in making any conversion in accordance with this Section 7.6, including
any interest or fees payable by such U.S. Lender to lenders of funds obtained by
it in order to make or maintain its Eurodollar Rate Loans hereunder; provided,
however, that the Domestic Borrowers shall have no obligation to pay any portion
of such costs incurred by the Agent or (as the case may be) such U.S. Lender
more than sixty (60) days prior to any notice, given by the Agent or (as the
case may be) such U.S. Lender to the U.S. Borrowers, of the incurrence of such
costs.
7.7. ADDITIONAL COSTS, ETC. If any present or future applicable law,
which expression, as used herein, includes statutes, rules and regulations
thereunder and interpretations thereof by any competent court or by any
governmental or other regulatory body or official charged with the
administration or the interpretation thereof and requests, directives,
instructions and notices at any time or from time to time hereafter made upon or
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otherwise issued to any Lender or the Agent by any central bank or other fiscal,
monetary or other authority (whether or not having the force of law), shall:
(a) subject any Lender or Agent or Canadian Agent to any tax,
levy, impost, duty, charge, fee, deduction or withholding of any nature
with respect to this Credit Agreement, any Letters of Credit, the other
Loan Documents, such Lender's U.S. Commitment, Canadian Commitment or
the Loans (other than taxes based upon or measured by the income or
profits of such Lender or the Agent or Canadian Agent or franchise
taxes), or
(b) materially change the basis of taxation (except for
changes in taxes on income or profits or franchise taxes) of payments
to any Lender of the principal of or the interest on any Loans or any
other amounts payable to any Lender or the Agent or Canadian Agent
under this Credit Agreement or any of the other Loan Documents, or
(c) impose or increase or render applicable (other than to the
extent specifically provided for elsewhere in this Credit Agreement)
any special deposit, reserve, assessment, liquidity, capital adequacy
or other similar requirements (whether or not having the force of law)
against assets held by, or deposits in or for the account of, or loans
by, or letters of credit issued or participated in by, or commitments
of an office of any Lender, or
(d) impose on any Lender or the Agent or Canadian Agent any
other conditions or requirements with respect to this Credit Agreement,
any Letters of Credit, the other Loan Documents, the Loans, such
Lender's U.S. Commitment or Canadian Commitment, or any class of loans,
letters of credit or commitments of which any of the Loans or such
Lender's U.S. Commitment or Canadian Commitment forms a part,
and the result of any of the foregoing is:
(i) to increase the cost to any Lender of making,
funding, issuing, renewing, extending, participating in or
maintaining any of the Loans or such Lender's U.S. Commitment
or Canadian Commitment or any Letter of Credit, or
(ii) to reduce the amount of principal, interest,
Reimbursement Obligation or other amounts payable to such
Lender or the Agent or Canadian Agent hereunder on account of
such Lender's U.S. Commitment or Canadian Commitment, any
Letter of Credit, or any of the Loans, or
(iii) to require such Lender or the Agent or Canadian
Agent to make any payment or to forego any interest or
Reimbursement Obligation or other sum payable hereunder, the
amount of which payment or foregone interest or Reimbursement
Obligation or other sum is calculated by reference to the
gross amount of any sum receivable or deemed received by such
Lender or the Agent or the Canadian Agent from the Borrowers
hereunder,
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then such Lender or the Agent or Canadian Agent, as the case may be, shall so
notify the Borrowers or ▇▇▇▇ Canada, as the case may be, (which notice shall
include a brief statement of the basis for the determination thereof), and, to
the extent that the costs of such change are material and are not reflected in
the Base Rate, Canadian Base Rate or Eurodollar Rate, or other amounts charged
to the Borrowers or ▇▇▇▇ Canada, as the case may be, hereunder, the Borrowers or
▇▇▇▇ Canada, as the case may be, and such Lender or the Agent or Canadian Agent,
as the case may be, shall thereafter attempt to negotiate an adjustment to the
compensation payable hereunder which will adequately compensate such Lender or
the Agent or Canadian Agent, as the case may be, for such additional cost,
reduction, payment or foregone interest or Reimbursement Obligation or other
sum. If the Borrowers or ▇▇▇▇ Canada, as the case may be, and such Lender or the
Agent or the Canadian Agent, as the case may be, are unable to agree to such
adjustment within forty-five (45) days following the day on which the Borrowers
or ▇▇▇▇ Canada, as the case may be, receive such notice (but not earlier than
the effective date of any such change), then commencing on the date of such
notice, the amounts payable by the Borrowers or ▇▇▇▇ Canada, as the case may be,
hereunder shall increase by an amount which will, in such Lender's or the
Agent's or the Canadian Agent's, as the case may be, reasonable determination,
provide adequate compensation for such additional cost, reduction, payment or
foregone interest or Reimbursement Obligation or other sum. In making any
determinations contemplated by this Section 7.7, any Lender or the Agent or the
Canadian Agent may make such reasonable estimates, assumptions, allocations and
the like as such Lender or the Agent or the Canadian Agent in good faith
determines to be appropriate, and such Lender's or the Agent's or the Canadian
Agent's selection thereof and the determination made by it on the basis thereof,
shall be final, binding and conclusive on the Borrowers, except, in the case of
such determination, for manifest errors in computations or transmission.
7.8. CAPITAL ADEQUACY. If after the date hereof (i) the adoption of or
change in any law, governmental rule, regulation, policy, guideline or directive
(whether or not having the force of law) regarding capital requirements for
banks, bank holding companies or other financial institutions relevant to any
Lender or any change in the interpretation or application thereof by a court or
governmental authority with appropriate jurisdiction, or (ii) compliance by such
Lender or the Agent or the Canadian Agent or any corporation controlling such
Lender or the Agent or the Canadian Agent with any law, governmental rule,
regulation, policy, guideline or directive (whether or not having the force of
law) of any such entity regarding capital adequacy, has the effect of reducing
the return on such Lender's or the Agent's or the Canadian Agent's commitment
with respect to any Loans or Letters of Credit to a level below that which such
Lender or the Agent or the Canadian Agent could have achieved but for such
adoption, change or compliance (taking into consideration such Lender's or the
Agent's or Canadian Agent's then existing policies with respect to capital
adequacy and assuming full utilization of such entity's capital) by any amount
deemed by such Lender or the Agent or the Canadian Agent, as the case may be, to
be material, then such Lender or the Agent or the Canadian Agent, as the case
may be, may notify the Borrowers or ▇▇▇▇ Canada, as the case may be, of such
fact. To the extent that the amount of such reduction in the return on capital
is not reflected in the Base Rate, Canadian Base Rate or Eurodollar Rate or in
other amounts payable hereunder, the Borrowers or ▇▇▇▇ Canada, as the case may
be, agree to pay such Lender or the Agent or the Canadian Agent, as the case may
be, for the amount of such reduction in the return on
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capital as and when such reduction is determined upon presentation by such
Lender or (as the case may be) the Agent or the Canadian Agent, as the case may
be, of a certificate in accordance with Section 7.9 hereof (but not earlier than
the effective date of any reduction). Nothing contained in this Section 7.8
shall be deemed to require the Borrowers or ▇▇▇▇ Canada, as the case may be, to
pay the amount of any reduction in the return on capital to the extent that the
Borrowers or ▇▇▇▇ Canada, as the case may be, have compensated such Lender or
the Agent or the Canadian Agent, as the case may be, for such reduction by
paying additional costs pursuant to Section 7.7; provided, that the Borrowers or
▇▇▇▇ Canada, as the case may be, shall have no obligation to pay any portion of
the amount of any reduction in the return on capital incurred by such Lender or
the Agent or the Canadian Agent, as the case may be, more than sixty (60) days
prior to any notice, given by such Lender or the Agent or the Canadian Agent, as
the case may be, to the Borrowers or ▇▇▇▇ Canada, as the case may be, of the
incurrence of such reduction in the return on capital.
7.9. CERTIFICATE. A certificate setting forth any additional amounts
payable pursuant to Sections 7.7 or 7.8 and a brief explanation of such amounts
which are due, submitted by any Lender or the Agent or the Canadian Agent to the
Borrowers or ▇▇▇▇ Canada, as the case may be, shall be conclusive, absent
manifest error, that such amounts are due and owing.
7.10. ASSIGNMENT OF COMMITMENTS UNDER CERTAIN CIRCUMSTANCES. In the
event that any Lender shall have delivered a notice or certificate pursuant to
Section 7.9, or the Borrowers or ▇▇▇▇ Canada, as the case may be, shall be
required to make additional payments to any Lender under Sections 7.3.2, 7.7 or
7.8, the Borrowers or ▇▇▇▇ Canada, as the case may be, shall have the right, at
their own expense, upon notice to such Lender and the Agent to require such
Lender to transfer and assign without recourse (in accordance with and subject
to the restrictions contained in Section 22) all its interests, rights and
obligations under this Credit Agreement to another financial institution which
shall assume such obligations; provided that (i) no such assignment shall
conflict with any law, rule or regulation or order of any governmental authority
and (ii) the assignee shall pay to the affected Lender in immediately available
funds on the date of such termination or assignment the principal of and
interest accrued to the date of payment on the Loans made by it hereunder and
all other amounts accrued for its account or owed to it hereunder.
7.11. INDEMNITY. Each Borrower agrees to indemnify each Lender and to
hold each Lender harmless from and against any loss, cost or expense (including
loss of anticipated profits) that such Lender may sustain or incur as a
consequence of (i) default by such Borrower in payment of the principal amount
of or any interest on any Eurodollar Rate Loans as and when due and payable,
including any such loss or expense arising from interest or fees payable by such
Lender to lenders of funds obtained by it in order to maintain its Eurodollar
Rate Loans, (ii) default by such Borrower in making a borrowing or conversion or
continuation after such Borrower has given (or is deemed to have given) a Loan
Request or a Canadian Loan Request or a Conversion Request relating thereto in
accordance with the terms of the Credit Agreement or (iii) the making of any
payment of a Eurodollar Rate Loan or the making of any conversion of any such
Loan to a Base Rate Loan on a day that is not the last day of the applicable
Interest Period with respect thereto, including interest or fees payable by such
Lender to lenders of funds obtained by it in order to maintain any such Loans.
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7.12. INTEREST AFTER DEFAULT. During the continuance of an Event of
Default, upon notice by the Agent to the Borrowers, overdue principal on the
Loans, (to the extent permitted by applicable law) interest on the Loans, other
overdue amounts payable hereunder, and principal of the Loans not overdue shall,
until such Event of Default has been cured or remedied or such Event of Default
has been waived by the Majority Lenders pursuant to Section 29, bear interest at
a rate per annum equal to two percent (2%) plus the rate of interest otherwise
applicable thereto, or, in the case of any such amounts not otherwise subject to
accrual of interest prior to their being overdue, at a rate per annum equal to
(i) two percent (2%) plus the Base Rate with respect to U.S. Loans, and (ii) two
percent (2%) plus the Canadian Base Rate with respect to Canadian Loans.
7.13. INTEREST LIMITATION. Notwithstanding any other term of this
Credit Agreement, any Note or any other Loan Documents, the maximum amount of
interest which may be charged to or collected from any Person liable hereunder
or under any Note by the Lenders shall be absolutely limited to, and shall in no
event exceed, the maximum amount of interest (the "Maximum Rate") which could
lawfully be charged or collected under applicable law (including, to the extent
applicable, the provisions of Section 5197 of the Revised Statutes of the United
States of America, as amended, 12 U.S.C. Section 85, as amended and Section 347
of the Criminal Code of Canada), so that the maximum of all amounts constituting
interest under applicable law, howsoever computed, shall never exceed as to any
Person liable therefor the Maximum Rate, and any term of this Credit Agreement,
any Note or any other Loan Document which could be construed as providing for
interest in excess of such lawful maximum shall be and hereby is made expressly
subject to and modified by the provisions of this paragraph. In the event that a
court of competent jurisdiction shall, notwithstanding the provisions of this
Section 5.13, determine that the Lenders have received interest hereunder or
under any of the other Loan Documents in excess of the Maximum Rate, such excess
shall, to the extent permitted by applicable law, be applied first to any
interest not in excess of the Maximum Rate then due and not yet paid, then to
the outstanding principal of the Loans (without premium or penalty), then to
fees and any other unpaid Obligations and thereafter shall be refunded to the
Borrowers or as a court of competent jurisdiction may otherwise order.
7.14. PERFORMANCE ADJUSTMENTS. Based upon, and following receipt by the
Lenders of (a) beginning with the Borrowers' financial statements as hereafter
described for the fiscal quarter of the Borrowers ending closest to January 31,
2000, (i) with respect to the first three fiscal quarters of each fiscal year,
the Borrowers' quarterly unaudited consolidated financial statements pursuant to
Section 10.4(b) and (ii) with respect to the last fiscal quarter of each fiscal
year, the Borrowers' annual audited consolidated financial statements pursuant
to Section 10.4(a)(i), and (b) a certificate of the Borrowers setting forth
calculations of the financial information set forth below (the Borrowers also
hereby agreeing to provide to the Agent, simultaneously with the delivery of
such certificate, telephonic notice of any Performance Adjustments based upon
such calculations), the Eurodollar Applicable Margin, the Documentary Letter of
Credit Applicable Margin, the Standby Letter of Credit Applicable Margin and the
Commitment Fee Rate shall be subject to adjustment in accordance with the
provisions of this paragraph (each such adjustment, a "Performance Adjustment").
Performance Adjustments shall become effective (the date of the effectiveness of
any Performance Adjustment, a "Performance Adjustment Date") two (2) Business
Days following receipt by the Agent of (x) (i) with respect to the first three
fiscal
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quarters of each fiscal year, the Borrowers' quarterly unaudited consolidated
financial statements pursuant to Section 10.4(b) and (ii) with respect to the
last fiscal quarter of each fiscal year, the Borrowers' annual audited
consolidated financial statements pursuant to Section 10.4(b)(i), and (y) a
certificate of the Borrowers setting forth calculations of the financial
information set forth below (the Borrowers also hereby agreeing to provide to
the Agent, simultaneously with the delivery of such certificate, telephonic
notice of any Performance Adjustments based upon such calculations). The
Eurodollar Applicable Margin, the Documentary Letter of Credit Applicable
Margin, the Standby Letter of Credit Applicable Margin and the Commitment Fee
Rate (the "Pricing") with respect to any period following any Performance
Adjustment Date until the next succeeding Performance Adjustment Date shall be
as set forth in the table below on the line farthest down in such table with
respect to which the Borrowers shall have (a) equaled or exceeded the minimum
ratio of Consolidated EBITDA to Consolidated Total Debt Service for the period
of four consecutive fiscal quarters most recently ended set forth on such line
in such table, or (b) Rated Debt shall have a rating as set forth in such table;
provided, however, that if the level established by reference to the Rated Debt
rating rated by ▇▇▇▇▇'▇ Investors Services, Inc. and the level established by
reference to the Rated Debt rating rated by Standard & Poor's Corporation are
different, the level shall be the level that is numerically higher of the two
levels so established; except that the level established by reference to the
Rated Debt rating rated by ▇▇▇▇▇'▇ Investors Service, Inc. and the level
established by reference to the Rated Debt rating rated by Standard & Poor's
Corporation are more than one level apart, the level shall be the level that is
numerically one below the numerically higher of the two levels so established
(e.g. if the level established by reference to the Rated Debt rating rated by
▇▇▇▇▇'▇ Investors Service, Inc. is at level 6 and the level established by the
reference to the Rated Debt rating rated by Standard & Poor's Corporation is at
level 4, the Pricing shall be at level 5). In the event the Borrowers do not
have a Rated Debt rating as set forth in the table below, the Pricing shall be
as set forth in the table below on the line farthest down in such table with
respect to which the Borrowers shall have equaled or exceeded the minimum ratio
of Consolidated EBITDA to Consolidated Total Debt Service for the period of four
consecutive fiscal quarters most recently ended set forth on such line in such
table:
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CONSOLIDATED
EBITDA TO
CONSOLIDATED EURODOLLAR DOCUMENTARY STANDBY
TOTAL DEBT APPLICABLE LETTER OF LETTER OF
SERVICE BASE RATE MARGIN/ CREDIT CREDIT
RATIO/RATED APPLICABLE ACCEPTANCE APPLICABLE APPLICABLE COMMITMENT
LEVEL DEBT MARGIN RATE MARGIN MARGIN FEE RATE
----- -------------- ---------- ---------- ----------- ---------- ----------
1 >=3.5:1 0.00% 1.375% 0.75% 1.125% 0.35%
2 >=4.5:1 0.00% 1.125% 0.625% 1.00% 0.25%
3 >=6.0:1 0.00% 0.875% 0.50% 0.75% 0.25%
4 >=7.25:1 or 0.00% 0.75% 0.50% 0.75% 0.25%
BBB- or Baa3
5 >=8.5:1 or BBB 0.00% 0.625% 0.50% 0.625% 0.20%
or Baa2
6 >=10.0:1 or 0.00% 0.50% 0.45% 0.50% 0.15%
BBB+ or Baa1
7 >=12.0:1 and 0.00% 0.375% 0.35% 0.375% 0.12%
A- or A3
7.15. CONCERNING JOINT AND SEVERAL LIABILITY OF THE DOMESTIC BORROWERS.
(a) Each of the Domestic Borrowers is accepting joint and
several liability hereunder and under the other Loan Documents in
consideration of the financial accommodations to be provided by the
Lenders and the Agent under this Credit Agreement, for the mutual
benefit, directly and indirectly, of each of the Domestic Borrowers and
in consideration of the undertakings of the Domestic Borrower to accept
joint and several liability for the Obligations.
(b) Each of the Domestic Borrowers, jointly and severally,
hereby irrevocably and unconditionally accepts, not merely as a surety
but also as a co-debtor, joint and several liability with the other
Domestic Borrower, with respect to the payment and performance of all
of the Obligations (including, without limitation, any Obligations
arising under this Section 7.15), it being the intention of the parties
hereto that all the Obligations shall be the joint and several
obligations of each of the Domestic Borrowers without preferences or
distinction among them.
(c) If and to the extent that either of the Domestic Borrowers
shall fail to make any payment with respect to any of the Obligations
as and when due or to perform any of the Obligations in accordance with
the terms thereof, then in each such event the other Domestic Borrower
will make such payment with respect to, or perform, such Obligation.
(d) The Obligations of each of the Domestic Borrowers under
the provisions of this Section 7.15 constitute the full recourse
Obligations of each of the Domestic Borrowers enforceable against each
such corporation to the full extent of its properties and assets,
irrespective of the validity, regularity or enforceability of this
Credit Agreement or the other Loan Documents or any other circumstance
whatsoever as to the other Domestic Borrower or ▇▇▇▇ Canada.
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(e) Except as otherwise expressly provided herein, each
Domestic Borrower hereby waives promptness, diligence, presentment,
demand, protest, notice of acceptance of its joint and several
liability, notice of any and all advances of the Loans made under this
Credit Agreement and the Notes, notice of the occurrence of any Default
or Event of Default, or of any demand for any payment under this Credit
Agreement, and notice of any action at any time taken or omitted by the
Agent or the Lenders under or in respect of any of the Obligations
hereunder (in each case, except to the extent any such notice is
expressly required to be given pursuant to the terms of this Credit
Agreement or any of the other Loan Documents). Each Domestic Borrower
hereby waives all defenses which may be available by virtue of any
valuation, stay, moratorium law or other similar law now or hereafter
in effect, any right to require the marshaling of assets of the
Domestic Borrowers and any other entity or Person primarily or
secondarily liable with respect to any of the Obligations, and all
suretyship defenses generally. Each Domestic Borrower hereby assents
to, and waives notice of, any extension or postponement of the time for
the payment, or place or manner for payment, compromise, refinancing,
consolidation or renewals of any of the Obligations hereunder, the
acceptance of any partial payment thereon, any waiver, consent or other
action or acquiescence by the Agent and the Lenders at any time or
times in respect of any default by either Domestic Borrower or ▇▇▇▇
Canada in the performance or satisfaction of any term, covenant,
condition or provision of this Credit Agreement and the other Loan
Documents, any and all other indulgences whatsoever by the Agent and
the Lenders in respect of any of the Obligations hereunder, and the
taking, addition, substitution or release, in whole or in part, at any
time or times, of any security for any of such Obligations or the
addition, substitution or release, in whole or in part, of any Domestic
Borrower or any other entity or Person primarily or secondarily liable
for any Obligation. The Domestic Borrowers further agree that its
Obligations shall not be released or discharged, in whole or in part,
or otherwise affected by the adequacy of any rights which the Agent or
any Lender may have against any collateral security or other means of
obtaining repayment of any of the Obligations, the impairment of any
collateral security securing the Obligations, including, without
limitation, the failure to protect or preserve any rights which the
Agent or any Lender may have in such collateral security or the
substitution, exchange, surrender, release, loss or destruction of any
such collateral security, any other act or omission which might in any
manner or to any extent vary the risk of such Domestic Borrower, or
otherwise operate as a release or discharge of such Domestic Borrower,
all of which may be done without notice to such Domestic Borrower;
provided, however, that the foregoing shall in no way be deemed to
create commercially unreasonable standards as to the Agent's
performance of its duties under the Loan Documents (as such rights and
duties are set forth therein). If for any reason either of the Domestic
Borrowers has no legal existence or is under no legal obligation to
discharge any of the Obligations, or if any of the Obligations have
become irrecoverable from either of the Domestic Borrowers by reason of
such Domestic Borrower's insolvency, bankruptcy or reorganization or by
other operation of law or for any reason, this Credit Agreement and the
other Loan Documents to which it is a party shall nevertheless be
binding on the other Domestic Borrower to the same extent as if
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such Domestic Borrower at all times had been the sole obligor on such
Obligations. Without limiting the generality of the foregoing, each
Domestic Borrower assents to any other action or delay in acting or
failure to act on the part of the Agent and the Lenders, including,
without limitation, any failure strictly or diligently to assert any
right or to pursue any remedy or to comply fully with applicable laws
or regulations thereunder which might, but for the provisions of this
Section 7.15, afford grounds for terminating, discharging or relieving
such Domestic Borrower, in whole or in part, from any of its
obligations under this Section 7.15, it being the intention of each
Domestic Borrower that, so long as any of the Obligations hereunder
remain unsatisfied, the obligations of such Domestic Borrower under
this Section 7.15 shall not be discharged except by performance and
then only to the extent of such performance. The Obligations of each
Domestic Borrower under this Section 7.15 shall not be diminished or
rendered unenforceable by any winding up, reorganization, arrangement,
liquidation, reconstruction or similar proceeding with respect to
either Domestic Borrower, or any of the Lenders. The joint and several
liability of the Domestic Borrowers hereunder shall continue in full
force and effect notwithstanding any absorption, merger, amalgamation
or any other change whatsoever in the name, ownership, membership,
constitution or place of formation of either Domestic Borrower or the
Lenders. Each of the Domestic Borrowers acknowledges and confirms that
it has itself established its own adequate means of obtaining from the
other Domestic Borrower on a continuing basis all information desired
by such Domestic Borrower concerning the financial condition of the
other Domestic Borrower and that each Domestic Borrower will look to
the other Domestic Borrower and not to the Agent or any Lender in order
for such Domestic Borrower to keep adequately informed of changes in
the other Domestic Borrower's financial condition.
(f) The provisions of this Section 7.15 are made for the
benefit of the Lenders and the Agent and their respective successors
and assigns, and may be enforced by it or them from time to time
against either or both of the Domestic Borrowers as often as occasion
therefor may arise and without requirement on the part of the Lenders
or the Agent or such successor or assign first to marshal any of its or
their claims or to exercise any of its or their rights against the
other Domestic Borrower or to exhaust any remedies available to it or
them against the other Domestic Borrower or to resort to any other
source or means of obtaining payment of any of the Obligations
hereunder or to elect any other remedy. The provisions of this Section
7.15 shall (subject to the provisions of the immediately succeeding
sentence) remain in effect until all of the Obligations shall have been
paid in full or otherwise fully satisfied. If at any time, any payment,
or any part thereof, made in respect of any of the Obligations, is
rescinded or must otherwise be restored or returned by any Lender or
the Agent upon the insolvency, bankruptcy or reorganization of either
of the Domestic Borrowers, or otherwise, the provisions of this Section
7.15 will forthwith be reinstated in effect, as though such payment had
not been made.
(g) Each of the Domestic Borrowers hereby agrees that it will
not enforce any of its rights of reimbursement, contribution,
subrogation or the like against the other Domestic Borrower with
respect to any liability incurred by it hereunder or under any of the
other Loan Documents, any payments made by it to any of the
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Lenders or the Agent with respect to any of the Obligations or any
collateral security therefor until such time as all of the Obligations
have been irrevocably paid in full in cash. Any claim which either
Domestic Borrower may have against the other Domestic Borrower with
respect to any payments to the Lenders or the Agent hereunder or under
any other Loan Documents are hereby expressly made subordinate and
junior in right of payment, without limitation as to any increases in
the Obligations arising hereunder or thereunder, to the prior payment
in full of the Obligations and, in the event of any insolvency,
bankruptcy, receivership, liquidation, reorganization or other similar
proceeding under the laws of any jurisdiction relating to either
Domestic Borrower, its debts or its assets, whether voluntary or
involuntary, all such Obligations shall be paid in full before any
payment or distribution of any character, whether in cash, securities
or other property, shall be made to the other Domestic Borrower
therefor.
(h) Each of the Domestic Borrowers hereby agrees that the
payment of any amounts due with respect to the indebtedness owing by
either Domestic Borrower to the other Domestic Borrower is hereby
subordinated to the prior payment in full in cash of the Obligations.
Each Domestic Borrower hereby agrees that after the occurrence and
during the continuance of any Default or Event of Default, such
Domestic Borrower will not demand, ▇▇▇ for or otherwise attempt to
collect any indebtedness of the other Domestic Borrower owing to such
Domestic Borrower until the Obligations shall have been paid in full in
cash. If, notwithstanding the foregoing sentence, such Domestic
Borrower shall collect, enforce or receive any amounts in respect of
such indebtedness, such amounts shall be collected, enforced and
received by such Domestic Borrower as trustee for the Agent, for the
benefit of the Lenders and the Agent, and be paid over to the Agent for
the pro rata accounts of the Lenders to be applied to repay the
Obligations.
8. GUARANTIES.
8.1. GUARANTY BY THE DOMESTIC BORROWERS OF THE OBLIGATIONS.
8.1.1. GUARANTY. For value received and hereby acknowledged
and as an inducement to the Lenders and the Agent and the Canadian
Agent to make the Loans and Letters of Credit available to the
Borrowers, the Domestic Borrowers hereby unconditionally and
irrevocably guarantee (a) the full punctual payment when due, whether
at stated maturity, by acceleration or otherwise, of all Obligations of
▇▇▇▇ Canada now or hereafter existing whether for principal, interest,
fees, expenses or otherwise, and (b) the strict performance and
observance by ▇▇▇▇ Canada of all agreements, warranties and covenants
applicable to ▇▇▇▇ Canada in the Loan Documents and (c) the obligations
of ▇▇▇▇ Canada under the Loan Documents (such Obligations collectively
being hereafter referred to as the "Guaranteed Obligations").
8.1.2. GUARANTY ABSOLUTE. The Domestic Borrowers guarantee
that the Guaranteed Obligations will be paid strictly in accordance
with the terms hereof, regardless of any law, regulation or order now
or hereafter in effect in any jurisdiction affecting any of such terms
or the rights of the Lenders with respect
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thereto. The joint and several liability of the Domestic Borrowers
under this guaranty with regard to the Guaranteed Obligations of ▇▇▇▇
Canada shall be absolute and unconditional irrespective of:
(a) ▇▇▇▇ Canada's lack of authorization, execution, validity
or enforceability of this Credit Agreement and any amendment hereof
(with regard to such Guaranteed Obligations), or any other obligation,
agreement or instrument relating thereto (it being agreed by the
Domestic Borrowers that the Guaranteed Obligations shall not be
discharged prior to the final and complete satisfaction of all of the
Obligations of ▇▇▇▇ Canada) or any failure to obtain any necessary
governmental consent or approvals or necessary third party consents or
approvals;
(b) the Agent's or Canadian Agent's or any Lender's exercise
or enforcement of, or failure or delay in exercising or enforcing,
legal proceedings to collect the Obligations or the Guaranteed
Obligations or any power, right or remedy with respect to any of the
Obligations or the Guaranteed Obligations, including (i) any suspension
of the Agent's or Canadian Agent's or any Lender's right to enforce the
Guaranteed Obligations against ▇▇▇▇ Canada, or (ii) any change in the
time, manner or place of payment of, or in any other term of, all or
any of the Guaranteed Obligations of ▇▇▇▇ Canada or any other amendment
or waiver of or any consent to departure from this Credit Agreement or
the other Loan Documents (with regard to such Guaranteed Obligations)
or any other agreement or instrument governing or evidencing any of the
Guaranteed Obligations;
(c) any exchange, release or non-perfection of any collateral,
or any release or amendment or waiver of or consent to departure from
any other guaranty, for all or any of the Guaranteed Obligations of
▇▇▇▇ Canada;
(d) any change in ownership of ▇▇▇▇ Canada;
(e) any acceptance of any partial payment(s) from ▇▇▇▇ Canada;
(f) any insolvency, bankruptcy, reorganization, arrangement,
adjustment, composition, assignment for the benefit of creditors,
appointment of a receiver or trustee for all or any part of ▇▇▇▇
Canada's assets;
(g) any assignment, participation or other transfer or
reallocation, in whole or in part (whether or not subject to a
conversion of a loan of one Type into a loan of another Type or a
conversion from one currency to another), of the Agent's or any
Lender's interest in and rights under this Credit Agreement or any
other Loan Document, or of the Agent or Canadian Agent or any Lender's
interest in the Obligations or the Guaranteed Obligations;
(h) any cancellation, renunciation or surrender of any pledge,
guaranty or any debt instrument evidencing the Obligations or the
Guaranteed Obligations;
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(i) the Agent's or Canadian Agent's or any Lender's vote,
claim, distribution, election, acceptance, action or inaction in any
bankruptcy or reorganization case related to the Obligations or the
Guaranteed Obligations; or
(j) any other action or circumstance, other than payment,
which might otherwise constitute a defense available to, or a discharge
of, ▇▇▇▇ Canada or the Domestic Borrowers in respect of the Guaranteed
Obligations (other than the defense of payment in full in cash).
This guaranty shall continue to be effective or be reinstated,
as the case may be, if at any time any payment of any Guaranteed
Obligation is rescinded or must otherwise be returned by the Agent or
Canadian Agent or any Lender upon the insolvency, bankruptcy or
reorganization of ▇▇▇▇ Canada or otherwise, all as though such payment
had not been made.
8.1.3. EFFECTIVENESS; ENFORCEMENT. The guaranty hereunder
shall be effective and shall be deemed to be made with respect to each
Canadian Loan, as of the time it is made or accepted, as applicable. No
invalidity, irregularity or unenforceability by reason of any
bankruptcy or similar law, or any law or order of any government or
agency thereof purporting to reduce, amend or otherwise affect any
liability of ▇▇▇▇ Canada, and no defect in or insufficiency or want of
powers of ▇▇▇▇ Canada or irregular or improperly recorded exercise
thereof, shall impair, affect, be a defense to or claim against such
guaranty. The guaranty hereunder is a continuing guaranty and shall (a)
survive any termination of this Credit Agreement, and (b) remain in
full force and effect until payment in full of, and performance of, all
Guaranteed Obligations and all other amounts payable under the guaranty
hereunder, the Total Commitment and the Canadian Total Commitment shall
have expired and been terminated, and all lending and other credit
commitments of ▇▇▇▇ Canada in respect thereof have terminated. The
guaranty under this Credit Agreement is made for the benefit of the
Agent, the Canadian Agent and the Lenders and their successors and
assigns, and may be enforced from time to time as often as occasion
therefor may arise and without requirement on the part of the Agent or
the Lenders first to exercise any rights against ▇▇▇▇ Canada, or to
resort to any other source or means of obtaining payment of any of the
said Obligations or to elect any other remedy.
8.1.4. WAIVER. The Domestic Borrowers hereby waive promptness,
diligence, protest, notice of protest, all suretyship defenses, notice
of acceptance and any other notice with respect to any of the
Guaranteed Obligations and this guaranty and any requirement that the
Agent, the Canadian Agent or any Lender secure, perfect or protect any
security interest or lien on any property subject thereto or exhaust
any right or take any action against ▇▇▇▇ Canada or any other person or
any collateral. The Domestic Borrowers also irrevocably waive, to the
fullest extent permitted by law, all defenses which at any time may be
available to them in respect of the Guaranteed Obligations by virtue of
any statute of limitations, valuation, stay, moratorium law or similar
law now or hereinafter in effect and all suretyship defenses generally.
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8.1.5. SUBORDINATION; SUBROGATION. Until the payment and
performance in full of all the Obligations, the Domestic Borrowers
shall not exercise and hereby waive any rights against ▇▇▇▇ Canada as a
result of payment by the Domestic Borrowers hereunder, by way of
subrogation, reimbursement, restitution, contribution or otherwise, and
the Domestic Borrowers will not prove any claim in competition with the
Agent, the Canadian Agent or any Lender in respect of any payment
hereunder in bankruptcy, insolvency, or reorganization proceedings of
any nature; the Domestic Borrowers will not claim any set-off,
recoupment or counterclaim against ▇▇▇▇ Canada in respect of any
liability of the Domestic Borrowers to ▇▇▇▇ Canada; and the Domestic
Borrowers waive any benefit of and any right to participate in any
collateral which may be held by any Lender, the Canadian Agent or the
Agent. The Domestic Borrowers agree that, after the occurrence and
during the continuance of any Default or Event of Default, the Domestic
Borrowers will not demand, ▇▇▇ for or otherwise attempt to collect any
Indebtedness of ▇▇▇▇ Canada to the Domestic Borrowers until all of the
Obligations of ▇▇▇▇ Canada shall have been paid in full. If,
notwithstanding the foregoing sentence, the Domestic Borrowers shall
collect, enforce or receive any amounts in respect of such indebtedness
in violation of the foregoing sentence while any Obligations of ▇▇▇▇
Canada are still outstanding, such amounts shall be collected, enforced
and received by the Domestic Borrowers as trustee for the Lenders, the
Canadian Agent and the Agent and be paid over to the Agent or Canadian
Agent, as the case may be, for the benefit of the Lenders, the Canadian
Agent and the Agent on account of the Obligations of ▇▇▇▇ Canada
without affecting in any manner the liability of the Domestic Borrowers
under the other provisions hereof. The provisions of this section shall
survive the expiration or termination of the Credit Agreement and the
other Loan Documents.
8.1.6. PAYMENTS. The Domestic Borrowers shall pay the
Guaranteed Obligations in the currency in which such Obligation is
payable by ▇▇▇▇ Canada and all payments by the Domestic Borrowers
hereunder shall be made without setoff or counterclaim and shall be
free and clear of and without deduction for any foreign or domestic
taxes, levies, imposts, duties, charges, fees, deductions,
withholdings, compulsory loans, restrictions or conditions of any
nature now or hereafter imposed or levied by any jurisdiction or any
political subdivision thereof or taxing or other authority therein
unless ▇▇▇▇ Canada is required by law to make such deduction or
withholding. Except as otherwise expressly provided in this Section
8.1.6, if any such obligation is imposed upon the Domestic Borrowers or
▇▇▇▇ Canada with respect to any amounts payable by them hereunder or
under any of the Loan Documents, the Domestic Borrowers will pay to the
Agent for the account of the Lenders or, as the case may be the
Canadian Agent for the account of the Canadian Lender, on the date on
which such amount is due and payable hereunder or under such other Loan
Documents, such additional amount in the same currency as aforesaid as
shall be necessary to enable the Lenders or the Agent or Canadian Agent
to receive the same net amount which the Lenders or the Agent or
Canadian Agent would have received on such due date had not such
obligation been imposed on the Domestic Borrowers or ▇▇▇▇ Canada.
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8.1.7. RECEIPT OF INFORMATION. The Domestic Borrowers
acknowledge and confirm that the Domestic Borrowers themselves have
established their own adequate means of obtaining from ▇▇▇▇ Canada on a
continuing basis all information desired by the Domestic Borrowers
concerning the financial condition of ▇▇▇▇ Canada and that the Domestic
Borrowers will look to ▇▇▇▇ Canada and not to the Agent, Canadian Agent
or any Lender in order for the Domestic Borrowers to keep adequately
informed of changes in ▇▇▇▇ Canada's financial condition.
9. REPRESENTATIONS AND WARRANTIES.
The Borrowers represent and warrant to the Lenders, Canadian Agent and
the Agent as follows:
9.1. CORPORATE AUTHORITY.
9.1.1. INCORPORATION; GOOD STANDING. Each of the Borrowers and
the Designated Subsidiaries (i) is a corporation (or similar business
entity) duly organized, validly existing and in good standing (or the
equivalent status) under the laws of its state, jurisdiction of
incorporation, province or country of incorporation or formation, (ii)
has all requisite corporate or similar power to own its property and
conduct its business as now conducted, and (iii) is in good standing as
a foreign corporation (or similar business entity) and is duly
authorized to do business in each jurisdiction where such qualification
is necessary except where a failure to be so qualified would not have a
materially adverse effect on the business, assets or financial
condition of the Borrowers and the Designated Subsidiaries considered
as a whole.
9.1.2. AUTHORIZATION. The execution, delivery and performance
of this Credit Agreement and the other Loan Documents to which the
Borrowers are a party and the transactions contemplated hereby and
thereby (i) are within the corporate (or similar) authority of such
Person, (ii) have been duly authorized by all necessary corporate (or
similar organization) proceedings, (iii) do not violate or result in
any breach or contravention of any provision of law, statute, rule or
regulation to which the Borrowers are subject or any judgment, order,
writ, injunction, license or permit applicable to the Borrowers, or any
agreement or other instrument binding upon the Borrowers, in each case
where such violation, breach or contravention would reasonably be
expected to have a materially adverse effect on the business or
financial condition of the Borrowers and the Designated Subsidiaries,
considered as a whole, or on the ability of the Borrowers to perform
their respective obligations hereunder or under any of the other Loan
Documents, and (iv) do not violate any provision of the corporate
charter or bylaws of the Borrowers.
9.1.3. ENFORCEABILITY. The execution and delivery of this
Credit Agreement and the other Loan Documents to which any of the
Borrowers is or is to become a party will result in valid and legally
binding obligations of such Person enforceable against it in accordance
with the respective terms and provisions hereof and thereof, except as
enforceability is limited by bankruptcy, insolvency,
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reorganization, moratorium or other laws relating to or affecting
generally the enforcement of creditors' rights and except to the extent
that availability of the remedy of specific performance or injunctive
relief is subject to the discretion of the court before which any
proceeding therefor may be brought.
9.2. GOVERNMENTAL APPROVALS. The execution, delivery and performance by
any Borrower of this Credit Agreement and the other Loan Documents to which such
Borrower is a party and the transactions contemplated hereby and thereby do not
require the approval or consent of, or filing with, any governmental agency or
authority other than those already obtained, unless if failure to obtain would
not have a materially adverse effect on the properties, assets, financial
condition or business of the Borrowers and the Designated Subsidiaries,
considered as a whole.
9.3. TITLE TO PROPERTIES; LEASES. Except as indicated on Schedule 9.3
hereto, the Borrowers and the Designated Subsidiaries own all of the material
assets reflected in the consolidated balance sheet of ▇▇▇▇ and its Subsidiaries
as at the Balance Sheet Date or acquired since that date (except property and
assets sold or otherwise disposed of in the ordinary course of business and
other property sold as permitted by Section 11.5.2 hereof since that date),
subject to no rights of others, including any mortgages, leases, conditional
sales agreements, title retention agreements, liens or other encumbrances except
Permitted Liens.
9.4. FINANCIAL STATEMENTS AND PROJECTIONS.
9.4.1. FINANCIAL STATEMENTS. There have been furnished to each
of the Lenders (a) a consolidated balance sheet of ▇▇▇▇ and its
Subsidiaries as of July 31, 1999, and a consolidated statement of
income and consolidated statement of cash flow of ▇▇▇▇ and its
Subsidiaries for the fiscal year then ended, certified by ▇▇▇▇▇▇
▇▇▇▇▇▇▇▇ LLP and (b) an unaudited consolidated balance sheet of ▇▇▇▇
and its Subsidiaries as of the Balance Sheet Date, and an unaudited
consolidated statement of income and consolidated statement of cash
flow of ▇▇▇▇ and its Subsidiaries for the period of two fiscal quarters
then ended. Such balance sheets, statements of income and statements of
cash flow have been prepared in accordance with generally accepted
accounting principles and fairly present in all material respects the
financial condition of ▇▇▇▇ and its Subsidiaries as at the close of
business on the dates thereof and the results of operations for the
periods then ended, subject, in the case of such unaudited consolidated
balance sheet, unaudited consolidated statement of income and unaudited
consolidated statement of cash flow, to year-end adjustments, and
except that there are no notes to such financial statements. There are
no contingent liabilities that are likely to become fixed obligations
of ▇▇▇▇ or any of its Subsidiaries as of such dates involving material
amounts, known to the Senior Officers of the Borrowers, which were not
disclosed in such balance sheets and the notes related thereto.
9.4.2. PROJECTIONS. The projections of the annual operating
budgets of ▇▇▇▇ and its Subsidiaries on a consolidated basis, balance
sheets and cash flow statements for the 2000 to 2004 fiscal years,
copies of which have been delivered to each Lender, have been prepared
in good faith, are based upon estimates and
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assumptions which the Borrowers deem reasonable as of the date hereof,
have been prepared on the basis of the assumptions stated therein and
reflect the reasonable estimates of ▇▇▇▇ and its Subsidiaries of the
results of operations and other information projected therein.
9.5. NO MATERIAL CHANGES, ETC. Since the Balance Sheet Date there has
occurred no materially adverse change in the financial condition or business of
the Borrowers and the Designated Subsidiaries, considered as a whole, as shown
on or reflected in the consolidated balance sheet of ▇▇▇▇ and its Subsidiaries
as at the Balance Sheet Date, or the consolidated statement of income for the
fiscal year then ended, other than changes in the ordinary course of business
that have not had any materially adverse effect on the business or financial
condition of the Borrowers and the Designated Subsidiaries considered as a
whole. Since the Balance Sheet Date, none of the Borrowers or the Designated
Subsidiaries has made any Distribution other than Distributions permitted by the
Prior Credit Agreement or by Section 11.4 hereof.
9.6. FRANCHISES, PATENTS, COPYRIGHTS, ETC. Each of the Borrowers and
the Designated Subsidiaries possesses all franchises, patents, copyrights,
trademarks, trade names, service marks, licenses and permits, and rights in
respect of the foregoing, adequate for the conduct of its business substantially
as now conducted without known conflict with any rights of others except where
the failure to possess any such franchise, patent, copyright, trademark, trade
name, service marks, license, permit or right, or where such conflict, would not
reasonably be expected to have a materially adverse effect on the business or
financial condition of the Borrowers and the Designated Subsidiaries considered
as a whole.
9.7. LITIGATION. Except as set forth in Schedule 9.7 hereto, there are
no actions, suits, proceedings or investigations of any kind pending or, to the
knowledge of any Senior Officer of the Borrowers, threatened, against any of the
Borrowers or the Designated Subsidiaries before any court, tribunal or
administrative agency or board that are reasonably likely to be adversely
determined and, if adversely determined, (i) would reasonably be expected to,
either in any case or in the aggregate, have a materially adverse effect on the
properties, assets, financial condition or business of the Borrowers and the
Designated Subsidiaries, considered as a whole, or on the ability of the
Borrowers to perform their obligations hereunder, or (ii) which question the
validity or enforceability of this Credit Agreement or any of the other Loan
Documents, or any action taken or to be taken pursuant hereto or thereto.
9.8. NO MATERIALLY ADVERSE CONTRACTS, ETC. None of the Borrowers or any
Designated Subsidiary is subject to any charter, corporate or other legal
restriction, or any judgment, decree, order, rule or regulation that has or is
expected in the future to have a materially adverse effect on the business,
assets or financial condition of the Borrowers and the Designated Subsidiaries,
considered as a whole. None of the Borrowers or any Designated Subsidiary is a
party to any contract or agreement that has or is expected, in the judgment of
the Borrowers' officers, to have any materially adverse effect on the business
of the Borrowers and the Designated Subsidiaries considered as a whole.
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9.9. COMPLIANCE WITH OTHER INSTRUMENTS, LAWS, ETC. None of the
Borrowers or any Designated Subsidiary is in violation of any provision of its
charter documents, bylaws, or any agreement or instrument to which it may be
subject or by which it or any of its properties may be bound or any decree,
order, judgment, statute, license, rule or regulation, in any of the foregoing
cases in a manner that would reasonably be expected to materially and adversely
affect the financial condition, properties or business of the Borrowers and the
Designated Subsidiaries considered as a whole.
9.10. TAX STATUS. Except as set forth on Schedule 9.10 hereto, each of
the Borrowers and the Designated Subsidiaries (i) has made or filed all U.S. and
foreign federal, provincial and state income and all other tax returns, reports
and declarations required by any jurisdiction to which any of them is subject,
except where the failure to so file would not reasonably be expected to have a
materially adverse effect on the business or financial condition of the
Borrowers and the Designated Subsidiaries considered as a whole, (ii) has paid
all taxes and other governmental assessments and charges shown or determined to
be due on such returns, reports and declarations, except those being contested
in good faith and by appropriate proceedings and (iii) has set aside on its
books provisions reasonably adequate for the payment of all unpaid taxes for
periods subsequent to the periods to which such returns, reports or declarations
apply. Except as set forth on Schedule 9.10 hereto, and except for those being
contested in good faith by appropriate proceedings for which adequate reserves
(in accordance with generally accepted accounting principles) have been taken,
there are no unpaid taxes in any material amount claimed to be due by the taxing
authority of any jurisdiction, and none of the Senior Officers of the Borrowers
knows of any basis for any such claim.
9.11. NO EVENT OF DEFAULT. No Default or Event of Default has occurred
and is continuing.
9.12. HOLDING COMPANY AND INVESTMENT COMPANY ACTS. None of the
Borrowers or any Designated Subsidiary is a "holding company", or a "subsidiary
company" of a "holding company", or an affiliate" of a "holding company", as
such terms are defined in the Public Utility Holding Company Act of 1935; nor is
it an "investment company", or an "affiliated company" or a "principal
underwriter" of an "investment company", as such terms are defined in the
Investment Company Act of 1940.
9.13. ABSENCE OF LIENS. Except with respect to Permitted Liens, there
are no Liens covering any property or assets of any of the Borrowers or the
Designated Subsidiaries.
9.14. CERTAIN TRANSACTIONS. Except for transactions set forth on
Schedule 9.14 hereto and other arm's length transactions pursuant to which any
of the Borrowers or the Designated Subsidiaries or any officers, directors or
employees thereof, make payments in the ordinary course of business upon terms
no less favorable than such Borrower or such Designated Subsidiary, or as the
case may be, such officers, directors or employees thereof, could obtain from
third parties, none of the officers, directors, or employees of any of the
Borrowers or the Designated Subsidiaries is presently a party to any material
transaction with any of the Borrowers or the Designated Subsidiaries (other than
for services as employees, officers and directors), including any contract,
agreement or other arrangement providing for the furnishing of services to or
by, providing for rental of real or personal
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property to or from, or otherwise requiring payments to or from, any such
officer, director or such employee or, to the knowledge of any Senior Officer of
the Borrowers, any corporation, partnership, trust or other entity in which any
officer, director, or any such employee has a substantial interest or is an
officer, director, trustee or partner.
9.15. EMPLOYEE BENEFIT PLANS.
9.15.1. IN GENERAL. Each Employee Benefit Plan and each
Guaranteed Pension Plan has been maintained and operated in compliance
in all material respects with the provisions of ERISA and, to the
extent applicable, the Code, including but not limited to the
provisions thereunder respecting prohibited transactions and the
bonding of fiduciaries and other persons handling plan funds as
required by Section 412 of ERISA. The Borrowers have heretofore
delivered to the Agent the most recently completed, prior to the date
hereof, annual report, Form 5500, with all required attachments, and
actuarial statement required to be submitted under Section 103(d) of
ERISA, with respect to each Guaranteed Pension Plan.
9.15.2. TERMINABILITY OF WELFARE PLANS. Under each Employee
Benefit Plan which is an employee welfare benefit plan within the
meaning of Section 3(1) or Section 3(2)(B) of ERISA, no benefits are
due unless the event giving rise to the benefit entitlement occurs
prior to plan termination (except as required by Title I, Part 6 of
ERISA). One of the Borrowers or an ERISA Affiliate, as appropriate, may
terminate each such Employee Benefit Plan at any time (or at any time
subsequent to the expiration of any applicable bargaining agreement) in
the discretion of such Borrower or such ERISA Affiliate without
liability to any Person, except for benefit entitlements which have
accrued prior to such termination.
9.15.3. GUARANTEED PENSION PLANS. Each contribution required
to be made to a Guaranteed Pension Plan, whether required to be made to
avoid the incurrence of an accumulated funding deficiency, the notice
or lien provisions of Section 302(f) of ERISA, or otherwise, has been
timely made. No waiver of an accumulated funding deficiency or
extension of amortization periods has been received with respect to any
Guaranteed Pension Plan, and neither the Borrowers nor any ERISA
Affiliate is obligated to or has posted security in connection with an
amendment to a Guaranteed Pension Plan pursuant to Section 307 of ERISA
or Section 401(a)(29) of the Code. No liability to the PBGC (other than
required insurance premiums, all of which have been paid) has been
incurred by the Borrowers or any ERISA Affiliate with respect to any
Guaranteed Pension Plan and there has not been any ERISA Reportable
Event (other than an ERISA Reportable Event as to which the requirement
of thirty (30) days notice has been waived), or any other event or
condition which presents a material risk of termination of any
Guaranteed Pension Plan by the PBGC. Based on the latest valuation of
each Guaranteed Pension Plan (which in each case occurred within twelve
months of the date of this representation), and on the actuarial
methods and assumptions employed for that valuation, the aggregate
benefit liabilities of all such Guaranteed Pension Plans within the
meaning of Section 4001 of ERISA did not exceed the aggregate value of
the assets of all such Guaranteed Pension Plans, disregarding for this
purpose the benefit liabilities and assets of any
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Guaranteed Pension Plan with assets in excess of benefit liabilities,
by more than $1,000,000.
With respect to ▇▇▇▇ Canada, all pension plans are duly
registered where required by, and are in good standing under, all
applicable laws including the Income Tax Act (Canada) and there are no
actions, claims or proceedings pending or threatened (other than
routine claims for benefits) relating to any of the pension plans. All
required employer and employee contributions and premiums under the
pension plans have been made, the pension plans are fully funded on an
ongoing and wind-up basis in accordance with applicable laws and with
the actuarial methods and assumptions used in the most recent actuarial
reports therefor, and there have been no surplus withdrawals or
contribution holidays except as permitted by law and the terms of the
pension plans.
9.15.4. MULTIEMPLOYER PLANS. Neither the Borrowers nor any
ERISA Affiliate has incurred any material liability (including
secondary liability) to any Multiemployer Plan as a result of a
complete or partial withdrawal from such Multiemployer Plan under
Section 4201 of ERISA or as a result of a sale of assets described in
Section 4204 of ERISA. Neither the Borrowers nor any ERISA Affiliate
has been notified that any Multiemployer Plan is in reorganization or
insolvent under and within the meaning of Section 4241 or Section 4245
of ERISA or is at risk of entering reorganization or becoming
insolvent, or that any Multiemployer Plan intends to terminate or has
been terminated under Section 4041A of ERISA.
9.16. REGULATIONS U AND X. The proceeds of the Loans shall be used to
refinance the Borrowers' obligations under the Prior Credit Agreement and for
working capital and other general corporate purposes. The Domestic Borrowers
will obtain Letters of Credit solely for working capital and general corporate
purposes. No portion of any Loan is to be used, and no portion of any Letter of
Credit is to be obtained, for the purpose of purchasing or carrying any "margin
security" or "margin stock" as such terms are used in Regulations U and X of the
Board of Governors of the Federal Reserve System, 12 C.F.R. Parts 221 and 224.
9.17. ENVIRONMENTAL COMPLIANCE. The Borrowers have taken all steps
considered reasonable by the Borrowers to investigate the condition and usage of
the Real Estate and the operations thereon and, based upon such diligent
investigation, have determined that:
(a) none of the Borrowers, the Designated Subsidiaries or any
operator of the Real Estate or any operations thereon is in material
violation, or alleged material violation, of any judgment, decree,
order, law, license, rule or regulation pertaining to environmental
matters, including without limitation, those arising under the Resource
Conservation and Recovery Act ("RCRA"), the Comprehensive Environmental
Response, Compensation and Liability Act of 1980 as amended ("CERCLA"),
the Superfund Amendments and Reauthorization Act of 1986 ("▇▇▇▇"), the
Federal Clean Water Act, the Federal Clean Air Act, the Toxic
Substances Control Act, or any applicable U.S. and foreign federal,
state, or local statute, regulation, ordinance, order or decree
relating to human health, safety or the environment (hereinafter
"Environmental Laws"), which violation would
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reasonably be expected to have a materially adverse effect on the
business or financial condition of the Borrowers and the Designated
Subsidiaries considered as a whole;
(b) except as set forth on Schedule 9.17 attached hereto or in
the financial reports delivered to the Securities and Exchange
Commission and also provided to the Agent and the Lenders, none of the
Borrowers or the Designated Subsidiaries has received written notice
from any third party including, without limitation, any U.S. and
foreign federal, state, provincial or local governmental authority, (i)
that any one of them has been identified by the United States
Environmental Protection Agency ("EPA") as a potentially responsible
party under CERCLA with respect to a site listed on the National
Priorities List, 40 C.F.R. Part ▇▇▇ ▇▇▇▇▇▇▇▇ ▇; (ii) that any hazardous
waste, as defined by 42 U.S.C. Section 6903(5), any hazardous
substances as defined by 42 U.S.C. Section 9601(14), any pollutant or
contaminant as defined by 42 U.S.C. Section 9601(33) or any toxic
substances, oil or hazardous materials or other chemicals or substances
regulated by any Environmental Laws ("Hazardous Substances") which any
one of them has generated, transported or disposed of has been found at
any site at which a U.S. and foreign federal, state, provincial or
local agency or other third party has conducted or has ordered that any
of the Borrowers or the Designated Subsidiaries conduct a remedial
investigation, removal or other response action pursuant to any
Environmental Law; or (iii) that it is or shall be a named party to any
claim, action, cause of action, complaint, or legal or administrative
proceeding (in each case, contingent or otherwise) arising out of any
third party's incurrence of costs, expenses, losses or damages of any
kind whatsoever in connection with the release of Hazardous Substances
except, in each such case, where the implications of the receipt of
such notice would not reasonably be expected to have a materially
adverse effect on the business or financial condition of the Borrowers
and the Designated Subsidiaries considered as a whole;
(c) except as set forth on Schedule 9.17 attached hereto or in
the financial reports delivered to the Securities and Exchange
Commission and also provided to the Agent, Canadian Agent and the
Lenders: (i) no portion of the Real Estate has been used, by any
Borrower or any Designated Subsidiary, or, to the best knowledge of any
Senior Officers of the Borrowers after due inquiry, any other Person,
for the handling, processing, storage or disposal of Hazardous
Substances in violation of applicable Environmental Laws which
violation would reasonably be expected to have a materially adverse
effect on the business or financial condition of the Borrowers and the
Designated Subsidiaries considered as a whole; and, to the best
knowledge of any Senior Officers of the Borrowers after due inquiry, no
underground tank or other underground storage receptacle for Hazardous
Substances is located on any portion of the Real Estate; (ii) in the
course of any activities conducted by the Borrowers, the Designated
Subsidiaries or operators of any of the Borrowers or the Designated
Subsidiaries' properties, no Hazardous Substances have been generated
or are being used on the Real Estate in violation of applicable
Environmental Laws which violation would reasonably be expected to have
a materially adverse effect on the business or financial condition of
the Borrowers and the Designated Subsidiaries considered as a whole;
(iii) there have been no releases (i.e. any past or present releasing,
spilling, leaking, pumping,
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pouring, emitting, emptying, discharging, injecting, escaping,
disposing or dumping) or threatened releases of Hazardous Substances
on, upon, into or from the properties of any of the Borrowers or the
Designated Subsidiaries, which releases would reasonably be expected to
have a materially adverse effect on the business or financial condition
of the Borrowers and the Designated Subsidiaries considered as a whole;
(iv) to the best knowledge of any Senior Officers of the Borrowers
after due inquiry, there have been no releases on, upon, from or into
any real property in the vicinity of any of the Real Estate which,
through soil or groundwater contamination, may have come to be located
on the Real Estate, and which would reasonably be expected to have a
materially adverse effect on the business or financial condition of the
Borrowers and the Designated Subsidiaries considered as a whole; and
(v) in addition, any Hazardous Substances that have been generated on
any of the Real Estate have, to the extent required by applicable law,
been transported offsite only by carriers having an identification
number issued by the EPA, treated or disposed of only by treatment or
disposal facilities maintaining valid permits as required under
applicable Environmental Laws, which transporters and facilities have
been and are, to the best of the Borrowers' knowledge, operating in
compliance with such permits and applicable Environmental Laws except,
in each such case, where the failure to have such identification number
or maintain such permits or operate in compliance with such permits and
applicable Environmental Laws would not reasonably be expected to have
a materially adverse effect on the business or financial condition of
the Borrowers and the Designated Subsidiaries considered as a whole;
and
(d) Except as disclosed to the Agent, Canadian Agent and the
Lenders in writing, based upon current or currently anticipated use of
any Real Estate, none of the Borrowers or the Designated Subsidiaries
is required under any applicable environmental law to perform Hazardous
Substances site assessments, or to undertake the removal or remediation
of Hazardous Substances at the Real Estate, or to give notice to any
governmental agency or undertake the recording or delivery to other
Persons of an environmental disclosure document or statement by virtue
of the transactions set forth herein and contemplated hereby, or as a
condition to the effectiveness of any other transactions contemplated
hereby.
9.18. SUBSIDIARIES, ETC. Schedule 9.18 hereto (as the same may be
supplemented from time to time pursuant to the provisions of this Credit
Agreement) sets forth a true and accurate description of the corporate structure
and ownership of Zale and its Subsidiaries. The Subsidiaries set forth on
Schedule 9.18 hereto (as the same may be supplemented from time to time pursuant
to the provisions of this Credit Agreement) are the only Subsidiaries of ▇▇▇▇,
▇▇▇▇ Delaware and Zale Canada. Except as set forth on Schedule 9.18 hereto, no
Borrower nor any Subsidiary of any Borrower is engaged in any joint venture or
partnership with any other Person, except as permitted pursuant to the terms of
this Credit Agreement.
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10. AFFIRMATIVE COVENANTS OF THE BORROWERS.
Each of the Borrowers covenants and agrees that, so long as any Loan,
Unpaid Reimbursement Obligation, Letter of Credit or Note is outstanding or any
Lender has any obligation to make any Loans or the Agent has any obligation to
issue, extend or renew any Letters of Credit:
10.1. PUNCTUAL PAYMENT. Each Borrower will duly and punctually pay,
within any applicable grace periods, or cause to be paid, within any applicable
grace periods, the principal and interest on the Loans, all Reimbursement
Obligations, the Letter of Credit Fees, the commitment fees, the Agent's and
Canadian Agent's fees and all other amounts provided for in this Credit
Agreement and the other Loan Documents to which any Borrower is a party, all in
accordance with the terms of this Credit Agreement and such other Loan
Documents.
10.2. MAINTENANCE OF OFFICE. Each of the Domestic Borrowers will
maintain its chief executive office at ▇▇▇ ▇. ▇▇▇▇▇▇ ▇▇▇▇ ▇▇▇▇, ▇▇▇▇▇▇, ▇▇▇▇▇
▇▇▇▇▇-▇▇▇▇, or at such other place in the United States of America as the
Domestic Borrowers shall designate upon prior written notice to the Agent, where
notices, presentations and demands to or upon the Domestic Borrowers in respect
of the Loan Documents to which either of the Domestic Borrowers is a party may
be given or made. Zale Canada will maintain its chief executive office at ▇▇▇ ▇.
▇▇▇▇▇▇ ▇▇▇▇ ▇▇▇▇, ▇▇▇▇▇▇, ▇▇▇▇▇ ▇▇▇▇▇-▇▇▇▇, or at such other place in Canada as
Zale Canada shall designate upon prior written notice to the Agent and Canadian
Agent, where notices, presentations and demands to or upon Zale Canada in
respect of the Loan Documents to which Zale Canada is a party may be given or
made.
10.3. RECORDS AND ACCOUNTS. Each of the Borrowers will (i) keep, and
cause each of the Designated Subsidiaries to keep, true and accurate records and
books of account in which full, true and correct entries in all material
respects will be made in accordance with generally accepted accounting
principles and (ii) maintain accounts and reserves considered adequate by the
Borrowers for all taxes (including income taxes), depreciation, depletion,
obsolescence and amortization of its properties and the properties of the
Designated Subsidiaries, and contingencies.
10.4. FINANCIAL STATEMENTS, CERTIFICATES AND INFORMATION. The Borrowers
will deliver to each of the Agent, Canadian Agent and the Lenders:
(a) as soon as practicable, but in any event not later than
ninety-five (95) days after the end of each fiscal year of Zale, (i)
the consolidated balance sheet of Zale and its Subsidiaries as at the
end of such year, and the related consolidated statement of income and
consolidated statement of cash flow for such year, each setting forth
in comparative form the figures as of the end of and for the previous
fiscal year, all such consolidated statements to be in reasonable
detail, prepared in accordance with generally accepted accounting
principles, and each of such financial statements certified without
qualification by ▇▇▇▇▇▇ ▇▇▇▇▇▇▇▇ LLP or by other independent certified
public accountants reasonably satisfactory to the Agent, and (ii) the
annual 10-K reports of Zale filed with the Securities and Exchange
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Commission; and (iii) a certification by a Senior Officer of Zale
setting forth the rating of the Rated Debt;
(b) as soon as practicable, but in any event not later than
fifty (50) days after the end of each of the first three fiscal
quarters of each fiscal year of Zale, (i) copies of the unaudited
consolidated balance sheet of Zale and its Subsidiaries as at the end
of such quarter, and the related consolidated statement of income for
such quarter and for the portion of Zale's fiscal year then elapsed,
and the related consolidated statement of cash flow for the portion of
Zale's fiscal year then elapsed, all in reasonable detail and prepared
in accordance with generally accepted accounting principles (subject to
year-end adjustments and except for the absence of notes), (ii) a
certification by a Senior Officer of each of the Borrowers that the
information contained in such management financial statements fairly
presents in all material respect the financial position of Zale and its
Subsidiaries on the date thereof (subject to year-end adjustments),
(iii) a narrative discussion of the operating results of the Borrowers
and each of their divisions for the fiscal quarter most recently ended
and the year to date, as compared with the comparable period of the
previous year, and of the Borrowers' liquidity and capital resources at
the end of such period, and (iv) the quarterly 10-Q reports of Zale
filed with the Securities and Exchange Commission;
(c) (i) simultaneously with the delivery of the management
prepared financial statements referred to in subsection (b) above, a
variance report comparing, for each period (including the portion of
the fiscal year to date) covered by such financial statements, such
financial statements with (A) the annual budget of the Borrowers, and
(B) the financial statements of the Borrowers for the comparable date
or period during the prior fiscal year of the Borrowers, and (ii)
simultaneously with the delivery of the financial statements referred
to in subsections (a) and (b) above, a statement certified by a Senior
Officer of each of the Borrowers in substantially the form of Exhibit D
hereto and setting forth in reasonable detail computations evidencing
compliance with the covenants contained in Section 12 (and including
calculations with respect to the financial information required by
Section 7.14 in connection with possible Performance Adjustments) and
(if applicable) reconciliations to reflect material changes in
generally accepted accounting principles since the Balance Sheet Date;
(d) within ten (10) Business Days after the filing or mailing
thereof, copies of all material reports of a financial nature filed by
the Borrowers with the Securities and Exchange Commission or sent to
the stockholders of Zale (other than the annual 10-K reports and the
quarterly 10-Q reports of Zale delivered pursuant to Sections 10.4(a)
and (b), respectively);
(e) to the Agent within thirty (30) days after the end of each
fiscal quarter (except that the Settlement Statement for the last
fiscal quarter of a fiscal year of the Borrowers may be delivered
simultaneously with the delivery of the financial statements referred
to in subsections (a) and (b) above), the monthly "Settlement
Statements" of ZFT (the "Settlement Statement") for the immediately
preceding fiscal quarter, prepared in accordance with the requirements
of the Receivables
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Facility Documents and such other information with respect to the
purchase and sale of ZFT Receivables pursuant to the Receivables
Facility Documents as the Agent shall request in the exercise of its
reasonable discretion;
(f) as soon as is practicable and in no event less frequently
than on an annual basis no later than sixty (60) days following the end
of each fiscal year of the Borrowers, the Borrowers shall deliver their
business plan, including the income statements, cash flow and balance
sheet and the assumptions used in the preparation of such business
plan; and
(g) from time to time such other financial data and
information (including accountants and management letters) as the
Agent, Canadian Agent or any Lender may reasonably request.
10.5. NOTICES.
10.5.1. DEFAULTS. Each of the Borrowers will promptly notify
the Agent, Canadian Agent and each of the Lenders in writing of the
occurrence of any Default or Event of Default of which an officer of
such Borrower has knowledge. If any Person shall give any notice or
take any other action in respect of a claimed default (whether or not
constituting an Event of Default) under this Credit Agreement or under
any other note, evidence of indebtedness, indenture or other obligation
to which or with respect to which the Borrowers or any of the
Designated Subsidiaries is a party or obligor, whether as principal,
guarantor, surety or otherwise, and, in the case of any such other
note, evidence of indebtedness, indenture or other obligation, such
claimed default involves the payment of $2,500,000 or more, the
Borrowers shall forthwith give written notice thereof to the Agent,
Canadian Agent and each of the Lenders, describing the notice or action
and the nature of the claimed default.
10.5.2. ENVIRONMENTAL EVENTS. Each of the Borrowers will give
notice to the Agent, Canadian Agent and each of the Lenders, within
thirty (30) days (i) of any material violation of any applicable
Environmental Law that any of the Borrowers or the Designated
Subsidiaries reports in writing or is reportable by such Person in
writing (or for which any written report supplemental to any oral
report is made) to any U.S. and foreign federal, state, or local
environmental agency which violation would reasonably be expected to
have a materially adverse effect on the business or financial condition
of the Borrowers and the Designated Subsidiaries considered as a whole
and (ii) after an officer of the Borrowers receives notice thereof, of
any inquiry, proceeding, investigation, or other action, including a
notice from any agency of potential environmental liability, of any
U.S. and foreign federal, state, provincial or local environmental
agency or board, that would reasonably be expected to have a materially
adverse effect on the business or financial condition of the Borrowers
and the Designated Subsidiaries considered as a whole.
10.5.3. NOTICE OF LITIGATION AND JUDGMENTS. Each of the
Borrowers will, and will cause each of the Designated Subsidiaries to,
give notice to the Agent, Canadian Agent and each of the Lenders in
writing within fifteen (15) days after a
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Senior Officer of such Borrower becomes aware of any litigation or
proceedings threatened in writing or any pending litigation and
proceedings affecting any of the Borrowers or the Designated
Subsidiaries or to which any of the Borrowers or the Designated
Subsidiaries is or becomes a party involving an uninsured claim against
any of the Borrowers or the Designated Subsidiaries that could
reasonably be expected to have a materially adverse effect on the
Borrowers and the Designated Subsidiaries, considered as a whole, and
stating the nature and status of such litigation or proceedings. Each
of the Borrowers will, and will cause each of the Designated
Subsidiaries to, give notice to the Agent, Canadian Agent and each of
the Lenders, in writing, in form and detail reasonably satisfactory to
the Agent, within ten (10) days of any judgment not covered by
insurance, final or otherwise, against any of the Borrowers or the
Designated Subsidiaries in an amount in excess of $2,500,000.
10.6. CORPORATE EXISTENCE; MAINTENANCE OF PROPERTIES. Each of the
Borrowers will do or cause to be done all things necessary to preserve and keep
in full force and effect its (except as otherwise permitted by Section 11.5
hereof) corporate or similar existence, and its material rights and franchises
necessary for the conduct of its business and those of the Designated
Subsidiaries and will not, and will not cause or permit any of the Designated
Subsidiaries to, convert to a limited liability company. Each of the Borrowers
(i) will cause all of its material properties and those of the Designated
Subsidiaries necessary in the conduct of its business or the business of its
Designated Subsidiaries to be maintained and kept in good condition, repair and
working order and supplied with all necessary equipment, unless failure to do so
would not have a materially adverse effect on the property, assets, financial
condition or business of the Borrowers and the Designated Subsidiaries,
considered as a whole, (ii) will, within thirty (30) days of any need therefor,
cause to be made or, if not practicable to be completed within such thirty (30)
day period, commenced (so long as such Borrower or Designated Subsidiary
diligently causes and continues to cause to be made) all necessary repairs,
renewals, replacements, betterments and improvements thereof, all as in the
judgment of the Borrowers may be necessary so that the business carried on in
connection therewith may be properly and advantageously conducted at all times,
and (iii) will, and will cause each of the Designated Subsidiaries to, continue
to engage primarily in the businesses now conducted by them and in related
businesses; provided that nothing in this Section 10.6 shall prevent the
Borrowers from discontinuing the operation and maintenance of any of its
properties or any of those of the Designated Subsidiaries if such discontinuance
is, in the judgment of any of the boards of directors of the Borrowers,
desirable in the conduct of its or their business and that do not in the
aggregate materially adversely affect the business of the Borrowers and the
Designated Subsidiaries on a consolidated basis.
10.7. INSURANCE. Each of the Borrowers will, and will cause each of the
Designated Subsidiaries to, maintain with financially sound and reputable
insurers insurance with respect to its properties and business against such
casualties and contingencies as shall be in accordance with the general
practices of businesses engaged in similar activities in similar geographic
areas and in amounts, containing such terms, in such forms and for such periods
as may be reasonable and prudent.
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10.8. TAXES. Except as to amounts which, in the aggregate, are not
material in amount, each of the Borrowers will, and will cause each of the
Designated Subsidiaries to, duly pay and discharge, or cause to be paid and
discharged, before the same shall become overdue, all U.S. and foreign federal,
state, provincial and local taxes, levies, assessments and other governmental
charges imposed upon it and its real properties, sales and activities, or any
part thereof, or upon the income or profits therefrom, as well as all claims for
labor, materials, or supplies that if unpaid might by law become a lien or
charge upon any of its property; provided that any such tax, assessment, charge,
levy or claim need not be paid if the validity or amount thereof shall currently
be contested in good faith by appropriate proceedings and if such Borrower or
such Designated Subsidiary shall have set aside on its books adequate reserves
(in accordance with generally accepted accounting principles) with respect
thereto; and provided further that, unless a stay is in effect, each of the
Borrowers and each Designated Subsidiary will pay all such taxes, assessments,
charges, levies or claims forthwith upon the commencement of proceedings to
foreclose any lien that may have attached as security therefor.
10.9. INSPECTION OF PROPERTIES AND BOOKS, ETC.
10.9.1. GENERAL. From time to time (but in no event more
frequently than annually unless an Event of Default has occurred and is
continuing), each of the Borrowers will permit the Agent and its agents
(including consultants), upon reasonable notice and during regular
business hours, to visit the premises of any of the Borrowers or the
Designated Subsidiaries, confer with officers of any of the Borrowers
or the Designated Subsidiaries and, upon reasonable notice to the
Borrowers, representatives of any of the Borrowers or the Designated
Subsidiaries, review all of the books and records of any of the
Borrowers or the Designated Subsidiaries (to the extent not privileged
or prohibited by law to disclose, and if any materials are privileged
or prohibited by law to disclose, subject to the Agent's ability to
discuss with any of the Borrowers or the Designated Subsidiaries and
their professional advisors the matters covered by such privileged
materials); provided, that Agent and such agents will not substantially
interfere with the conduct of business of the Borrowers or the
Designated Subsidiaries.
10.9.2. COMMUNICATIONS WITH ACCOUNTANTS. Each of the Borrowers
authorizes the Agent and, if accompanied by the Agent, the Lenders to
communicate directly with the Borrowers' independent certified public
accountants and authorizes such accountants to disclose to the Agent
and the Lenders any and all financial statements and other supporting
financial documents and schedules including copies of any management
letter with respect to the business and financial condition of any of
the Borrowers or the Designated Subsidiaries. At the request of the
Agent, the Borrowers shall deliver a letter addressed to such
accountants instructing them to comply with the provisions of this
Section 10.9.2.
10.10. COMPLIANCE WITH LAWS, CONTRACTS, LICENSES, AND PERMITS. Each of
the Borrowers will, and will cause each of the Designated Subsidiaries to, (a)
comply with (unless failure to so comply would not have a materially adverse
effect on the business or financial condition of the Borrowers and the
Designated Subsidiaries considered as a whole) (i) the applicable laws and
regulations wherever its business is conducted,
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including all applicable Environmental Laws, (ii) all agreements and instruments
by which it or any of its properties may be bound and (iii) all applicable
decrees, orders, and judgments, and (b) comply with the provisions of its
charter documents and by-laws. If any applicable authorization, consent,
approval, permit or license from any officer, agency or instrumentality of any
government shall become necessary or required in order that any Borrower may
fulfill any of its obligations hereunder or under any of the other Loan
Documents to which any Borrower is a party, the Borrowers will promptly take or
cause to be taken all reasonable steps within the power of the Borrowers to
obtain such authorization, consent, approval, permit or license and furnish the
Agent, the Canadian Agent and the Lenders with evidence thereof.
10.11. EMPLOYEE BENEFIT PLANS. The Borrowers will (i) promptly upon any
request of the Agent therefor, furnish to the Agent a copy of the most recent
actuarial statement required to be submitted under Section 103(d) of ERISA and
Annual Report, Form 5500, with all required attachments, in respect of each
Guaranteed Pension Plan and (ii) within ten (10) days of receipt or dispatch,
furnish to the Agent any notice, report or demand sent or received in respect of
a Guaranteed Pension Plan under Sections 302, 4041, 4042, 4043, 4063, 4065, 4066
and 4068 of ERISA, or in respect of a Multiemployer Plan, under Sections.4041A,
4202, 4219, 4242, or 4245 of ERISA.
10.12. USE OF PROCEEDS. The Borrowers will use the proceeds of the
Loans solely for refinancing the Borrowers' obligations under the Prior Credit
Agreement and for working capital and other general corporate purposes. The
Domestic Borrowers will obtain Letters of Credit solely for working capital and
general corporate purposes.
10.13. FURTHER ASSURANCES. Each of the Borrowers will cooperate with
the Lenders, the Canadian Agent and the Agent and execute such further
instruments and documents as the Lenders, the Canadian Agent or the Agent shall
reasonably request to carry out to their reasonable satisfaction the
transactions contemplated by this Credit Agreement and the other Loan Documents.
11. CERTAIN NEGATIVE COVENANTS OF THE BORROWERS.
Each of the Borrowers covenants and agrees that, so long as any Loan,
Unpaid Reimbursement Obligation, Letter of Credit or Note is outstanding or any
Lender has any obligation to make any Loans or the Agent has any obligation to
issue, extend or renew any Letters of Credit:
11.1. RESTRICTIONS ON INDEBTEDNESS. The Borrowers will not, and will
not permit any of the Designated Subsidiaries to, create, incur, assume,
guarantee or be or remain liable, contingently or otherwise, with respect to any
Indebtedness other than the following (to the extent the following constitute
Indebtedness):
(a) Indebtedness to the Lenders, Canadian Agent and the Agent
arising under any of the Loan Documents;
(b) obligations under Capitalized Leases and guaranties
thereof by the Borrowers, or any of them; provided, however, the
principal amount of such
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Indebtedness plus Indebtedness incurred pursuant to Section 11.1(d)
hereof shall not exceed $75,000,000;
(c) Consolidated Rental Obligations and guaranties by the
Borrowers, or any of them, of any of the foregoing or of any other
operating leases;
(d) Indebtedness incurred in connection with the acquisition
after the date hereof of any personal property by any of the Borrowers
or the Designated Subsidiaries, provided that (i) such Indebtedness
shall be without recourse to any of the Borrowers or the Designated
Subsidiaries, (ii) the aggregate principal amount of such Indebtedness
of the Borrowers and the Designated Subsidiaries shall not exceed one
hundred percent (100%) of the cost to such Borrower or such Designated
Subsidiary of the personal property so acquired, (iii) the aggregate
principal amount of the cost to the Borrowers and the Designated
Subsidiaries of the personal property so acquired during any period
shall not exceed $75,000,000 minus the principal amount of Indebtedness
incurred pursuant to Section 11.1(b) hereof;
(e) Indebtedness of any Domestic Borrower owing to any other
Domestic Borrower, provided that any Person to whom such Indebtedness
permitted under this Section 11.1(e) is owing may transfer such
Indebtedness to a Subsidiary of such Person so long as such
Indebtedness is subordinated to the Obligations on terms and conditions
reasonably satisfactory to the Agent;
(f) Indebtedness of (i) any of the Domestic Borrowers to any
Designated Subsidiary or Zale Canada in an aggregate amount not to
exceed $50,000,000, (ii) any of the Designated Subsidiaries or Zale
Canada to the Domestic Borrowers in an aggregate amount not to exceed
$50,000,000 and (iii) any of the Borrowers or the Designated
Subsidiaries, owing by any of the Borrowers or the Designated
Subsidiaries to any of the Excluded Subsidiaries in an aggregate amount
not to exceed $10,000,000, provided that any Person to whom such
Indebtedness permitted under this Section 11.1(f) is owing may transfer
such Indebtedness to a Subsidiary of such Person so long as such
Indebtedness owing by a Borrower is subordinated to the Obligations on
terms and conditions reasonably satisfactory to the Agent;
(g) other Indebtedness existing as of the Closing Date and
described on Schedule 11.1(g);
(h) Indebtedness incurred pursuant to the Receivables Facility
Documents;
(i) Indebtedness of the Domestic Borrowers or any Designated
Subsidiary who has agreed to guaranty the full payment and performance
by the Borrowers of all of the Obligations pursuant to a guaranty
agreement in form and substance reasonably satisfactory to the Agent,
in an aggregate principal amount not to exceed $100,000,000 with
respect to the senior notes issued pursuant to the Note Indenture; and
(j) other Indebtedness of the Borrowers or any Designated
Subsidiary who has agreed to guaranty the full payment and performance
by the Borrowers of all of
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the Obligations pursuant to a guaranty agreement in form and substance
reasonably satisfactory to the Agent, to the extent not otherwise
included in subparagraphs (a) through (i) of this Section 11.1, in an
aggregate principal amount not to exceed ten percent (10%) of
Consolidated Tangible Net Assets at the time such additional
Indebtedness is incurred.
11.2. RESTRICTIONS ON LIENS. The Borrowers will not, and will not
permit any of the Designated Subsidiaries to, create or incur or suffer to be
created or incurred or to exist any lien, encumbrance, mortgage, pledge, charge
or other security interest of any kind upon any of its property or assets of any
character whether now owned or hereafter acquired, or upon the income or profits
therefrom; provided that any of the Borrowers and the Designated Subsidiaries
may create or incur or suffer to be created or incurred or to exist:
(a) liens in favor of either Domestic Borrower on all or part
of the assets of any of the Designated Subsidiaries or Zale Canada
securing Indebtedness owing by any of the Designated Subsidiaries or
Zale Canada to any Borrower;
(b) liens to secure taxes, assessments and other government
charges, or liens to secure claims for labor, material or supplies, in
each case in respect of obligations (i) not overdue or (ii) contested
in good faith, and with respect to which adequate reserves (in
accordance with generally accepted accounting principles) have been set
aside for the payment thereof on the books and records of such Borrower
or such Designated Subsidiary, so long as proceedings to enforce such
liens have not been commenced and are unstayed;
(c) deposits or pledges made in connection with, or to secure
payment of, workmen's compensation, unemployment insurance, old age
pensions or other social security obligations;
(d) liens on properties in respect of judgments or awards;
(e) liens of carriers, warehousemen, mechanics and
materialmen, and other like liens on properties, in existence less than
120 days from the date of creation thereof in respect of obligations
not overdue or contested in good faith, and with respect to which
adequate reserves (in accordance with generally accepted accounting
principles) have been set aside for the payment thereof on the books
and records of such Borrower or such Designated Subsidiary, so long as
proceedings to enforce such liens have not been commenced and are
unstayed;
(f) encumbrances on Real Estate consisting of easements,
rights of way, zoning restrictions, restrictions on the use of real
property and defects and irregularities in the title thereto, statutory
and contractual landlord's or lessor's liens under leases to which such
Borrower or such Designated Subsidiary is a party, and other liens or
encumbrances none of which in the reasonable opinion of the Borrowers
interferes materially with the use of the property affected in the
ordinary conduct of the business of any of the Borrowers and the
Designated Subsidiaries, which defects do not individually or in the
aggregate have a materially adverse
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effect on the business of the Borrowers and the Designated Subsidiaries
considered as a whole;
(g) liens and encumbrances existing on the date hereof and
listed on Schedule 11.2 hereto;
(h) liens securing the Indebtedness permitted under Section
11.1(b) and (d); provided, however, such security interests or
mortgages shall cover only the real or personal property so acquired;
(i) liens on inventory and proceeds thereof (up to the cost to
such Borrower or such Designated Subsidiary of such inventory) held on
consignment from trade vendors securing obligations to return or pay
the purchase price of such inventory;
(j) deposits to secure the performance, by any of the
Borrowers and the Designated Subsidiaries, of tenders, bids and other
contracts, other than for the payment of borrowed money, arising in the
ordinary course of such Borrower's or such Designated Subsidiary's
business (including, without limitation, deposits made in connection
with any promotions, contests, sweepstakes or similar games or
competitions conducted by or on behalf of any of the Borrowers and the
Designated Subsidiaries or any of their respective Subsidiaries, which
deposits described in this parenthetical, but not those other deposits
contemplated by this clause (j), do not exceed $5,000,000 in the
aggregate);
(k) (1) liens on ZFT Receivables, (2) liens on ZFT Receivables
following repurchase thereof for the recovery of state sales taxes by
any of the Borrowers and the Designated Subsidiaries, which liens
secure an interest in such repurchased ZFT Receivables, the proceeds
therefrom and any recoveries therefrom pursuant to the Receivables
Facility Documents and (3) a lien on the Trust Certificates and Trust
Interest or replacement thereof, in connection with the Receivables
Facility documents;
(l) voluntary options in favor of any of the Borrowers and the
Designated Subsidiaries to purchase real property subject to operating
leases;
(m) transfers to any Rabbi Trust, or other similar trust or
similar arrangement or to any account, established for the benefit of
the employees of any of ▇▇▇▇ and its Subsidiaries in an aggregate
amount not to exceed $10,000,000 at any time outstanding;
(n) solely to the extent consented to in advance in writing by
the Agent, liens on assets existing at the time of acquisition from
another Person (provided that such acquisition is permitted by Section
11.5.1 hereof) and not incurred in anticipation of such acquisition;
(o) sales, assignments or transfers of assets to the extent
permitted by Section 11.5.2 hereof; and
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(p) other liens on assets of the Borrowers and the Designated
Subsidiaries, to the extent not otherwise included in subparagraphs (a)
through (o) of this Section 11.2, securing Indebtedness or other
liabilities in an aggregate amount not to exceed $3,500,000 at any time
outstanding.
11.3. RESTRICTIONS ON INVESTMENTS. The Borrowers will not, and will not
permit any of the Designated Subsidiaries to, make or permit to exist or to
remain outstanding any Investment except Investments in:
(a) marketable direct or guaranteed obligations of the United
States of America that mature within two (2) years from the date of
purchase by such Borrower or such Designated Subsidiary;
(b) demand deposits, certificates of deposit, Eurodollar
deposits, time deposits and bankers acceptances issued by banking
institutions provided that such banks have a long-term credit rating of
at least "AA" (or its then equivalent) if rated by Standard & Poor's
Corporation or any successor service thereto having a substantially
similar rating system or "Aa" (or its then equivalent) if rated by
▇▇▇▇▇'▇ Investors Services, Inc. or any successor service thereto
having a substantially similar rating system, or an equivalent rating
from either Dominion Bond Rating Services Limited or CBRS, Inc.;
provided, however, the Borrowers' investment in any one bank shall not
exceed 5% of the primary capital of such bank;
(c) securities commonly known as "commercial paper" issued by
the Agent, or a corporation or any other financial institution that at
the time of purchase have been rated and the ratings for which are not
less than "P 1" (or its then equivalent) if rated by ▇▇▇▇▇'▇ Investors
Service, Inc. or any successor service thereto having a substantially
similar rating system, or not less than "A 1" (or its then equivalent)
if rated by Standard & Poor's Corporation or any successor service
thereto having a substantially similar rating system, or an equivalent
rating from either Dominion Bond Rating Services Limited or CBRS, Inc.;
provided, however, the Borrowers may invest up to 20% of their
Investments measured at the time of Investment made pursuant to
paragraphs (a)-(f) and (v)-(x) hereof in commercial paper with a
combined rating of "A-2/P-2" (or its then equivalent);
(d) demand notes issued by a corporation organized and
existing under the laws of the United States of America or any state
thereof that at that time of purchase have a rating of at least "AA"
(or its then equivalent) if rated by Standard & Poor's Corporation or
any successor service thereto having a substantially similar rating
system, or its equivalent by at least two (2) nationally recognized
rating services, or an equivalent rating from either Dominion Bond
Rating Services Limited or CBRS, Inc., and have a maturity date that
does not exceed one (1) year beyond the date of purchase; provided,
however, such Investments will be limited to the greater of $20 million
per obligor or 20% of Investments made pursuant to paragraphs (a)-(f)
and (v)-(x) hereof measured at the time of Investment.
(e) repurchase agreements, purchased through the Agent, or a
corporation organized and existing under the laws of the United States
of America or any state
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thereof that at the time of purchase have been rated and the ratings
for which are not less than "P 1" (or its then equivalent) if rated by
▇▇▇▇▇'▇ Investors Service, Inc. or any successor service thereto having
a substantially similar rating system, or not less than "A 1" (or its
then equivalent) if rated by Standard & Poor's Corporation or any
successor service thereto having a substantially similar rating system,
or an equivalent rating from either Dominion Bond Rating Services
Limited or CBRS, Inc., which repurchase agreements are collateralized
by securities of the United States of America or any agency thereof in
an amount equal to at least 102% of the amount of such Investment;
(f) shares of any so-called "money market fund" advised,
serviced or sold by any of the Lenders or by any other financial
institution provided that such fund is registered under the Investment
Company Act of 1940, has net assets of at least $250,000,000, has an
investment portfolio with an average maturity of 365 days or less and
is not considered to be a "high-yield" fund;
(g) Investments existing on the date hereof and listed on
Schedule 11.3 hereto;
(h) Investments by either Domestic Borrower in any Designated
Subsidiary, ▇▇▇▇ Canada or the other Domestic Borrower or by any
Designated Subsidiary or ▇▇▇▇ Canada in any Borrower or any other
Designated Subsidiary, existing as of the Closing Date;
(i) Investments after the date hereof by (i) any of the
Borrowers and the Designated Subsidiaries in any of the Excluded
Subsidiaries, not to exceed $5,000,000 in the aggregate, and in order
to enable such Subsidiaries to maintain their corporate existence and
good standing or for other similar purposes, in an aggregate amount not
to exceed $100,000, (ii) either of the Domestic Borrowers in ▇▇▇▇
Canada or any of the Designated Subsidiaries in an aggregate amount not
to exceed $25,000,000, (iii) any of the Designated Subsidiaries or ▇▇▇▇
Canada in either of the Domestic Borrowers in an aggregate amount not
to exceed $25,000,000, (iv) either of the Domestic Borrowers in JFS,
solely in respect of operating expenses of JFS and capital expenditures
of JFS, in an aggregate amount not to exceed $2,500,000 during any
fiscal year of the Domestic Borrowers, and (v) either of the Domestic
Borrowers in JNB, solely in respect of operating expenses of JNB and
capital expenditures of JNB, in an aggregate amount not to exceed
$20,000,000 during any fiscal year of the Domestic Borrowers;
(j) Investments existing on the Closing Date by ▇▇▇▇ in
Subsidiaries of ▇▇▇▇;
(k) Investments consisting of promissory notes received as
proceeds of asset dispositions permitted by Section 11.5.2;
(l) Investments consisting of loans and advances to employees
for moving, entertainment, travel and other similar expenses in the
ordinary course of business not to exceed $2,000,000 in the aggregate
at any time outstanding;
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(m) Investments (including, without limitation, contributions
to capital) in ZFT, the Trust Certificates, the Trust Interest or
similar Investments in any other Receivables Subsidiary and Investments
in the Subordinated Note or similar Indebtedness under any Receivables
Facility. Prior to making Investments in any newly formed Receivables
Subsidiary, the Borrowers shall provide the Agent with any information
necessary to supplement Schedule 9.18 hereto and such supplemental
information, together with such schedule or prior supplements, shall
thereupon be deemed to constitute Schedule 9.18 for purposes of this
Credit Agreement;
(n) [Intentionally Omitted];
(o) Investments (i) in JNB consisting of obligations of JNB to
▇▇▇▇ Delaware pursuant to the Merchant Agreement (ii) in a Subsidiary
of any of the Borrowers which engages solely in the business of
purchasing receivables from JNB and selling them to ▇▇▇▇ Delaware and
matters incidental thereto, in an aggregate amount not to exceed
$1,000,000, (iii) consisting of loans to JCC or other Subsidiary
described in clause (i) above which are simultaneously used to purchase
receivables from JNB and such loans are similarly simultaneously
repaid, and (iv) in receivables of any Subsidiary of any Borrower
solely for the purpose of selling such receivables pursuant to the
Receivables Facility Documents. Prior to making the Investments
described in (i) of this paragraph (o), the Borrowers shall provide the
Agent with any information necessary to supplement Schedule 9.18 hereto
and such supplemental information, together with such schedule or prior
supplements, shall thereupon be deemed to constitute Schedule 9.18 for
purposes of this Credit Agreement;
(p) Investments in registered investment companies which
invest solely in Investments otherwise permitted by this Section 11.3;
(q) Investments consisting of acquisitions of stock or assets
to the extent permitted by Section 11.5.1;
(r) Investments in an amount up to the amount of funds under
any Rabbi Trust, similar trust arrangement or account established or
maintained by any of ▇▇▇▇ and its Subsidiaries as permitted by Section
11.2(m), but in no event in excess of $10,000,000 in the aggregate;
(s) Investments in ▇▇▇▇ stock, whether or not permitted under
Section 11.4, in connection with the satisfaction of the Borrowers' or
a Designated Subsidiary's obligations under the 401(k) plan and/or the
▇▇▇▇ Omnibus Stock Incentive Plan or similar employee benefit plans
maintained by the Borrowers and the Designated Subsidiaries, or any of
them;
(t) Investments consisting of (i) Indebtedness permitted by
Sections 11.1(e), (f), and (j), and (ii) guaranties of Indebtedness
permitted by Sections 11.1(b) and (c);
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(u) Marketable direct obligations of the State of Texas or its
agencies and instrumentalities that at the time of purchase have been
rated and the ratings for which are not less than "P" (or its then
equivalent) if rated by ▇▇▇▇▇'▇ Investors Service, Inc., or any
successor service thereto having a substantially similar rating system
or not less than "A" (or its then equivalent) if rated by Standard &
Poor's Corporation or any successor service thereto having a
substantially similar rating system;
(v) Municipal fixed and variable rate short-term securities
that mature within one (1) year from the date of purchase by such
Borrower or such Designated Subsidiary that at the time of purchase
have been rated and the ratings for which are not less than
"MIG-1/VMIG-1" (or its then equivalent) if rated by ▇▇▇▇▇'▇ Investors
Service, Inc. or any successor service thereto having a substantially
similar rating system or not less than "SP-1+/A-1" (or its then
equivalent) if rated by Standard & Poor's Corporation or any successor
service thereto having a substantially similar rating system, or an
equivalent rating from either Dominion Bond Rating Services Limited or
CBRS, Inc.;
(w) Municipal fixed and variable rate medium-term securities
that mature between one (1) and two (2) years from the date of purchase
by such Borrower or such Designated Subsidiary that at the time of
purchase have been rated and the ratings for which are not less than
"Aa" (or its then equivalent) if rated by ▇▇▇▇▇'▇ Investors Service,
Inc. or any successor service thereto having a substantially similar
rating system or not less than "AA" (or its then equivalent) if rated
by Standard & Poor's Corporation or any successor service thereto
having a substantially similar rating system, or an equivalent rating
from either Dominion Bond Rating Services Limited or CBRS, Inc.; and
(x) other Investments not to exceed five percent (5%) of
Consolidated Tangible Net Worth at the time any such Investment is
made.
11.4. DISTRIBUTIONS. The Borrowers will not, and will not
permit any of the Designated Subsidiaries to, make any Distributions;
provided, however, that so long as no Default or Event of Default shall
exist and be continuing, and none would exist after giving effect
thereto (a) the Designated Subsidiaries and ▇▇▇▇ Canada may make
Distributions to either of the Domestic Borrowers and either of the
Domestic Borrowers may make Distributions to the other Domestic
Borrower, (b) the Borrowers and the Designated Subsidiaries, or any of
them, may make Distributions permitted pursuant to Section 11.3(s), and
(c) the Borrowers and the Designated Subsidiaries may make
Distributions in an aggregate amount during any fiscal quarter not to
exceed the sum of (i) 50% of the Consolidated Net Income of ▇▇▇▇ and
its Subsidiaries for the fiscal year of ▇▇▇▇ ended as of July 31, 1999
plus (ii) 50% of the aggregate cumulative Consolidated Net Income of
▇▇▇▇ and its Subsidiaries for each fiscal quarter of ▇▇▇▇ ending on or
after October 31, 1999 and prior to the date of such Distribution;
provided, however, that the aggregate amount of such Distributions
pursuant to this clause (c) during any fiscal year of ▇▇▇▇ shall not
exceed, (A) for the fiscal year of ▇▇▇▇ ending prior to the first
anniversary of the Closing Date, $60,000,000 (B) for the fiscal year of
▇▇▇▇ ending after the first anniversary of the Closing Date but prior
to the second anniversary of the Closing Date, $60,000,000, (C) for the
fiscal year of ▇▇▇▇ ending
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after the second anniversary of the Closing Date but prior to the third
anniversary of the Closing Date, $80,000,000, (D) for the fiscal year of ▇▇▇▇
ending after the third anniversary of the Closing Date but prior to the fourth
anniversary of the Closing Date, $80,000,000 and (E) for each fiscal year of
▇▇▇▇ ending after the fourth anniversary of the Closing Date, $100,000,000;
provided, further, that if the aggregate amount of Distributions made pursuant
to this clause (c) during any fiscal year of ▇▇▇▇ shall be less than the
applicable permitted amount set forth in the foregoing proviso for such fiscal
year, then up to $5,000,000 of such unutilized amount may be utilized in the
next succeeding fiscal year (but not any other succeeding fiscal year) so long
as the limitations set forth in the foregoing clauses (i) and (ii) of this
paragraph are not exceeded.
11.5. MERGER, CONSOLIDATION AND DISPOSITION OF ASSETS.
11.5.1. MERGERS AND ACQUISITIONS. The Borrowers will not, and
will not permit or suffer any of the Designated Subsidiaries to, become
a party to any merger or consolidation, or agree to or effect any asset
acquisition or stock acquisition (other than (x) the acquisition of
assets in the ordinary course of business consistent with past
practices, (y) acquisitions of assets consisting of Investments which
are permitted by Sections 11.3(a), (b), (c), (d), (e), (f), (k), (m),
(p), (r), (s) (u), (v) or (w) hereof, and (z) the formation of a newly
formed Subsidiary pursuant to, and to the extent permitted by, Sections
11.3(m) or 11.3(o) hereof) except:
(a) so long as no Default or Event of Default would
result therefrom, the merger or consolidation of (i) one or
more of the Designated Subsidiaries with and into one of the
Borrowers, (ii) one or more of the other Subsidiaries of the
Borrowers with and into one of the Borrowers or a Designated
Subsidiary, (iii) two or more of the Designated Subsidiaries
or (iv) a Borrower with and into the other Borrower; provided,
that the surviving entity in any such merger permitted by this
clause (a) shall be a Borrower or a Designated Subsidiary;
(b) acquisitions (exclusive of Consolidated Capital
Expenditures permitted by Section 12.4) of assets or stock so
long as (i) the cash consideration for such acquisition does
not exceed ten percent (10%) of Consolidated Tangible Net
Assets at the time a definitive agreement for such acquisition
is executed for any fiscal year, (ii) with respect to any such
acquisitions of assets, the Domestic Borrowers, or either of
them, take title to the assets so acquired, (iii) such assets
or stock acquired are related to the business of one of the
Borrowers or their Subsidiaries, and (iv) with respect to any
such acquisitions of stock (A) simultaneously with the
occurrence of such acquisition, the entity so acquired shall
either be merged or consolidated with and into one of the
Domestic Borrowers or shall transfer all of its assets (other
than those required to satisfy liabilities) to the Domestic
Borrowers, or either of them, or (B) the Agent shall have
consented to such acquisition in writing in its sole
discretion; provided, however, that with respect to any stock
acquisition referred to in clause (B) above (1) upon the
effectiveness of any such acquisition, the newly acquired
Subsidiary shall become a Designated Subsidiary for all
purposes under this Credit Agreement and
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each of the other Loan Documents (except for any provisions of
this Credit Agreement relating to events, circumstances or
agreements relating specifically to dates or periods prior to
such newly acquired Subsidiary's having become a Designated
Subsidiary under the Loan Documents), (2) prior to the
effectiveness of any such acquisition, the Borrowers shall
have provided the Agent with any information necessary to
supplement Schedule 9.18 hereto and such supplemental
information, together with such schedule and any prior
supplements, shall thereupon be deemed to constitute Schedule
9.18 for all purposes of this Credit Agreement, (3) within one
calendar year following the closing date of such acquisition,
(y) the newly acquired Subsidiary shall have either been
merged or consolidated with and into either of the Domestic
Borrowers or transferred all of its assets (other than those
required to satisfy liabilities) to the Domestic Borrowers, or
either of them, or (z) the Borrowers shall have caused such
newly acquired Subsidiary to agree to guaranty the full
payment and performance by the Borrowers of all of the
Obligations pursuant to a guaranty agreement in form and
substance reasonably satisfactory to the Agent and the
Lenders; and
(c) acquisitions of ▇▇▇▇ stock permitted by Section
11.3(s) or repurchases of ▇▇▇▇ stock otherwise permitted by
Section 11.4.
11.5.2. DISPOSITION OF ASSETS. The Borrowers will not, nor
will the Borrowers permit or suffer any of the Designated Subsidiaries
to, become a party to or agree to or effect any disposition of assets,
except for (a) sales of inventory (including in connection with the
closing of stores) in the ordinary course of such Borrower's or such
Designated Subsidiary's business; (b) sales of fixtures and equipment
and other property no longer used or useful in such Borrower's or such
Designated Subsidiary's business; (c) (i) transfers of ZFT Receivables
to ZFT or any other Receivables Subsidiary pursuant to the Receivables
Facility Documents, and (ii) solely with the consent of the Majority
Banks, other sales, transfers or other dispositions of ZFT Receivables
pursuant to and in accordance with any of the Receivables Facility
Documents; (d) the natural expiration of intellectual property licenses
in accordance with the terms thereof; (e) so long as no Event of
Default has occurred and is continuing, sales of surplus assets listed
on Schedule 11.5(e) hereto; (f) sales of Second Look Receivables on a
non-recourse basis by any of the Borrowers or the Designated
Subsidiaries to one or more finance companies so long as no such Second
Look Receivables are sold at a discount in excess of 20% of the book
value of such Second Look Receivables; and (g) so long as no Event of
Default has occurred and is continuing, other sales or dispositions of
assets (including sale and leaseback transactions entered into in
accordance with Section 11.6) that are deemed appropriate by the
Borrowers for fair market value not to exceed $15,000,000 in the
aggregate during any fiscal year.
11.6. DERIVATIVE TRANSACTIONS. The Borrowers will not, and will not
permit any of the Designated Subsidiaries to, incur or permit to exist any
Derivative Transactions, except in connection with the management of interest
rate fluctuation risks, currency risks and metals commodities risks of the
Borrowers or the Designated Subsidiaries and in no event shall any Derivative
Transactions be incurred solely for speculative purposes.
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11.7. COMPLIANCE WITH ENVIRONMENTAL LAWS. The Borrowers will not, and
will not permit any of the Designated Subsidiaries to, (i) use any of the Real
Estate or any portion thereof for the handling, processing, storage or disposal
of Hazardous Substances in violation of any applicable Environmental Law, (ii)
cause or permit to be located on any of the Real Estate any underground tank or
other underground storage receptacle for Hazardous Substances which is in
violation of any applicable Environmental Law, (iii) generate any Hazardous
Substances on any of the Real Estate in violation of any applicable
Environmental Law, (iv) conduct any activity at any Real Estate or use any Real
Estate in any manner so as to cause a release (i.e. releasing, spilling,
leaking, pumping, pouring, emitting, emptying, discharging, injecting, escaping,
leaching, disposing or dumping) or threat of release of Hazardous Substances on,
upon or into the Real Estate or (v) otherwise conduct any activity at any Real
Estate or use any Real Estate in any manner that would violate any applicable
Environmental Law or bring such Real Estate in violation of any applicable
Environmental Law, which, in the case of any of clauses (i) through (v), would
reasonably be expected to have a materially adverse effect on the business,
financial condition or assets of the Borrowers and the Designated Subsidiaries
taken as a whole.
11.8. EMPLOYEE BENEFIT PLANS. Neither the Borrowers nor any ERISA
Affiliate will:
(a) engage in any "prohibited transaction" within the meaning
of Section 406 of ERISA or Section 4975 of the Code which could
reasonably be expected to result in a material liability for the
Borrowers and the Designated Subsidiaries taken as a whole; or
(b) permit any Guaranteed Pension Plan to incur an
"accumulated funding deficiency", as such term is defined in Section
302 of ERISA, whether or not such deficiency is or may be waived; or
(c) fail to contribute to any Guaranteed Pension Plan to an
extent which, or terminate any Guaranteed Pension Plan in a manner
which, could reasonably be expected to result in the imposition of a
lien or encumbrance on the assets of any of the Borrowers or the
Designated Subsidiaries pursuant to Section 302(f) or Section 4068 of
ERISA; or
(d) permit or take any action which would result in the
aggregate benefit liabilities (within the meaning of Section 4001 of
ERISA) of all Guaranteed Pension Plans exceeding the value of the
aggregate assets of such Guaranteed Pension Plans, disregarding for
this purpose the benefit liabilities and assets of any such Guaranteed
Pension Plan with assets in excess of benefit liabilities, by more than
the amount set forth in Section 9.15.3.
11.9. TRANSACTIONS WITH AFFILIATES. Except as set forth on Schedule
9.14, the Borrowers will not, nor will the Borrowers permit or suffer any of the
Designated Subsidiaries to, conduct any transactions among themselves or with
any Affiliates of the Borrowers, other than (a) transactions in the ordinary
course of such Borrower's or such Designated Subsidiary's business, consistent
with past practices, and upon terms not materially less favorable to such
Borrower or Designated Subsidiary than it could obtain in a comparable
arm's-length transaction with a party other than such Borrower, such
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Designated Subsidiary or such Affiliate, (b) transactions with ZFT or any other
Receivables Subsidiary pursuant to the Receivables Facility Documents, (c)
transactions described on Schedule 9.14; provided, however that such
transactions shall in no event include any Investments which are not permitted
by Section 11.3, and (d) Distributions made by the Borrowers and the Designated
Subsidiaries to the extent otherwise permitted by Sections 11.4 hereof.
11.10. RECEIVABLES FACILITY DOCUMENTS. The Borrowers will not, nor will
the Borrowers permit or suffer any of the Designated Subsidiaries to, amend,
supplement, restate or otherwise modify, or renew or extend, the terms of any of
the Receivables Facility Documents as in effect as of the Closing Date without
the prior written consent (which consent shall not be unreasonably withheld) of,
and in form and substance reasonably satisfactory to, the Agent; provided,
however, that nothing herein shall restrict or be deemed to restrict the
issuance by the Borrowers or the Designated Subsidiaries, or any of them, of
additional tranches of Indebtedness under the Receivables Facility Documents as
in the form delivered to the Agent on the date hereof; and provided, further,
that so long as no Default or Event of Default shall exist and be continuing,
and so long as none would result therefrom, with prior written notice given to
the Agent, the Borrowers and the Designated Subsidiaries may enter into such
amendments, restatements, replacements, refinancings, supplements or other
modifications to the Receivables Facility Documents which are not materially
less favorable to the Borrowers and the Designated Subsidiaries so long as
recourse to the assets of the Borrowers and the Designated Subsidiaries under
the Receivables Facility Documents remains limited to claims against ZFT
Receivables and collateral incidental thereto generally consistent with the
Receivables Facility Documents as in effect on the Closing Date. For purposes of
this Section 11.10, a replacement or refinancing shall not be deemed to be
materially less favorable to the Borrowers and the Designated Subsidiaries
solely because the interest rate applicable to notes or other evidences of
indebtedness issued by the Receivables Subsidiary thereunder is higher than on
those issued by ZFT or because of other increased costs associated with such
replacement or refinancing or an increase in the amount of reserves required to
be maintained in respect thereof or any similar such increased costs.
11.11. ▇▇▇▇ PUERTO RICO. Notwithstanding anything contained herein to
the contrary, the Borrowers will not permit the aggregate amount of Indebtedness
owed by ▇▇▇▇ Puerto Rico to Persons other than the Lenders, the Agent, or the
Borrowers at any time to exceed $250,000; provided, however, that ▇▇▇▇ Puerto
Rico may incur Indebtedness permitted by Section 11.1(b).
11.12. NEGATIVE PLEDGES. Except as provided in Section 1012 of the Note
Indenture, and except pursuant to the provisions of any agreement or instrument
creating any Permitted Lien on property or assets other than inventory (and
which provisions restrict only the property or assets subject to such Permitted
Lien) and except pursuant to any provision of the Receivables Purchase Agreement
or any substantially similar provisions under any other Receivables Facility
Documents, the Borrowers will not, and will not permit any of the Designated
Subsidiaries to, enter into any agreement or instrument which shall prohibit any
of the Borrowers or the Designated Subsidiaries from granting security
interests, mortgages, pledges or liens on, or otherwise encumbering, any of its
property or assets to secure the Borrowers' obligations under this Credit
Agreement or any
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refinancing, replacement, restatement, modification, supplement or amendment of
this Credit Agreement.
11.13. COMPLIANCE WITH CERTAIN NOTE INDENTURE COVENANTS. So long as the
senior notes issued pursuant to the Note Indenture are outstanding and
thereafter if any of the Indebtedness in respect of such senior notes has been
repaid with the proceeds of any Loans made hereunder, the Borrowers will comply
with each of the covenants listed below contained in the Note Indenture
(including the defined terms therein), such covenants and definitions being
incorporated by reference into this Section as if they were set forth in their
entirety herein:
Section 1008. Limitation on Indebtedness
Section 1009. Limitation on Restricted Payments
Section 1011. Disposition of Proceeds of Asset Sales
Section 1012. Limitation on Liens
Section 1013. Limitation on Guarantees by Restricted Subsidiaries
Section 1015. Restrictions on Preferred Stock of Restricted
Subsidiaries
Section 1016. Limitation on Dividend and Other Payment Restrictions
Affecting Restricted Subsidiaries
Section 1017. Limitation on Designation of Unrestricted Subsidiaries
For purposes of this Section 11.13, each of the parties hereto agrees
that the Obligations shall constitute "Pari Passu Indebtedness" for purposes of
Section 1011 of the Note Indenture and that the requirement in paragraph (c) of
such Section 1011 that ▇▇▇▇ make a "Pari Passu Offer" shall mean, for purposes
of this Section 11.13, that ▇▇▇▇ shall be required to reduce the Total
Commitment and prepay the Obligations hereunder by the "Pari Passu Debt Amount"
referred to therein in accordance with the provisions thereof.
For purposes of this Section 11.13, the phrase in clause (i) of Section
1012 of the Note Indenture "the Securities, in the case of the Company, and the
Guarantees, in the case of a Restricted Subsidiary that is a Guarantor" and the
phrase in clause (ii) of Section 1012 of the Note Indenture "the Securities and
Guarantees in the case of a Restricted Subsidiary that is a Guarantor," shall
each be replaced by "the Obligations."
For purposes of this Section 11.13, the requirement in paragraph (a) of
Section 1013 of the Note Indenture that a "Restricted Subsidiary" become a
"Guarantor" under certain circumstances shall be a requirement that such
"Restricted Subsidiary" deliver to the Agent a guarantee of the Obligations
under such circumstances in form and substance reasonably satisfactory to the
Agent and the Lenders.
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The incorporation by reference of certain covenants in this Section
11.13 shall include the incorporation herein of any provisions of such covenants
in the Note Indenture which by their terms expressly provide that ▇▇▇▇ and its
Subsidiaries shall not be subject to such covenants upon the occurrence of
certain events. The incorporation by reference of certain covenants in this
Section 11.13 shall also include the incorporation herein of the grace period
provided for certain of such incorporated covenants contained in Section 501(d)
of the Note Indenture, the failure to comply with any of such covenants not
constituting an Event of Default under this Credit Agreement until 45 days after
written notice of such failure has been given to the Borrowers by the Agent.
12. FINANCIAL COVENANTS OF THE BORROWERS.
Each of the Borrowers covenants and agrees that, so long as any Loan,
Unpaid Reimbursement Obligation, Letter of Credit, or Note is outstanding or any
Lender has any obligation to make any Loans or the Agent has any obligation to
issue, extend or renew any Letters of Credit:
12.1. CONSOLIDATED FUNDED DEBT TO CONSOLIDATED ADJUSTED EBITDA. As of
the end of any period of four consecutive fiscal quarters the Borrowers will not
permit the ratio of (a) Consolidated Funded Debt as of the end of such period to
(b) Consolidated Adjusted EBITDA for such period to be greater than 2.00:1.00.
12.2. DEBT SERVICE. As of the end of any period of four consecutive
fiscal quarters, the Borrowers will not permit the ratio of (a) the difference
of (i) Consolidated EBITDA for such period of four consecutive fiscal quarters
minus (ii) the aggregate amount of all federal income taxes paid in cash by ▇▇▇▇
and its Subsidiaries during such period of four consecutive fiscal quarters to
(b) Consolidated Total Debt Service for such period of four consecutive fiscal
quarters, to be less than 3.50:1.00.
12.3. CONSOLIDATED TANGIBLE NET WORTH. As of the end of each fiscal
quarter, the Borrowers will not permit Consolidated Tangible Net Worth, to be
less than $600,000,000.
12.4. CONSOLIDATED CAPITAL EXPENDITURES. The Borrowers will not make,
or permit any Subsidiary of the Borrowers to make, Consolidated Capital
Expenditures (excluding Consolidated Capital Expenditures incurred in connection
with acquisitions of stock or assets permitted by Section 11.5.1 hereof) in any
fiscal year covering the period set forth in the table below that, when added
(without duplication) to the aggregate principal amount of Indebtedness incurred
by the Borrowers and the Designated Subsidiaries in connection with the
acquisition of personal property pursuant to Section 11.1(d) hereof during such
fiscal year, exceed, in the aggregate, the amount set forth opposite such period
in such table:
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FISCAL YEAR: AMOUNT:
----------- ------
2000 $100,000,000
2001 $110,000,000
2002 $125,000,000
2003 $135,000,000
2004 $135,000,000
2005 $140,000,000
provided, however, that, if during any fiscal year the amount of Consolidated
Capital Expenditures permitted for that fiscal year is not so utilized, up to
$10,000,000 of such unutilized amount may be utilized in the next succeeding
fiscal year but not in any subsequent fiscal year; provided, further, that in
any fiscal year, any unutilized amounts carried forward from the immediately
preceding fiscal year shall be available as permitted Consolidated Capital
Expenditures first, prior to counting the actual Consolidated Capital
Expenditures for such fiscal year against the permitted amount for such fiscal
year.
13. CLOSING CONDITIONS.
The obligations of the Lenders to make the initial Loans and of the
Agent to issue any initial Letters of Credit shall be subject to the
satisfaction of the following conditions precedent on or prior to March 30,
2000:
13.1. LOAN DOCUMENTS. Each of the Loan Documents shall have been duly
executed and delivered by the respective parties thereto, shall be in full force
and effect and shall be in form and substance satisfactory to each of the
Lenders. Each Lender shall have received a fully executed copy of each such
document and, in the case of U.S. Lenders, the original Note payable to such
U.S. Lender.
13.2. CERTIFIED COPIES OF CHARTER DOCUMENTS AND OTHER DOCUMENTS. The
Agent shall have received from each of the Borrowers a copy, certified by a duly
authorized officer of such Person to be true and complete on the Closing Date,
of each of (i) its charter or other incorporation documents as in effect on such
date of certification, (ii) its by-laws as in effect on such date, and (iii) the
Receivables Facility Documents as in effect on the Closing Date.
13.3. CORPORATE ACTION. All corporate action necessary for the valid
execution, delivery and performance by each of the Borrowers of this Credit
Agreement and the other Loan Documents to which each is or is to become a party
shall have been duly and effectively taken, and evidence thereof satisfactory to
the Lenders shall have been provided to each of the Lenders.
13.4. INCUMBENCY CERTIFICATE. Each of the Lenders shall have received
from each of the Borrowers an incumbency certificate, dated as of the Closing
Date, signed by a duly authorized officer of such Borrower, and giving the name
and bearing a specimen signature of each individual who shall be authorized: (i)
to sign, in the name and on behalf of such Borrower, each of the Loan Documents
to which such Borrower is or is to become a party; (ii) to make Loan Requests
and Conversion Requests and to apply for Letters of
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Credit; and (iii) to give notices and to take other action on its behalf under
the Loan Documents.
13.5. SETTLEMENT STATEMENT. The Agent shall have received from the
Borrowers the most recent Settlement Statement.
13.6. OPINION OF COUNSEL. Each of the Lenders, Canadian Agent and the
Agent shall have received (a) a favorable legal opinion addressed to the Lenders
and the Agent, dated as of the Closing Date, in form and substance reasonably
satisfactory to the Lenders and the Agent, from ▇▇▇▇▇▇▇▇ ▇▇▇▇▇▇▇ LLP, counsel to
the Domestic Borrowers and their Subsidiaries, (b) a favorable legal opinion
addressed to the Lenders and the Canadian Agent, dated as of the Closing Date,
in form and substance reasonably satisfactory to the Lenders, the Agent and the
Canadian Agent, from Gowling, Strathy & ▇▇▇▇▇▇▇▇▇, counsel to ▇▇▇▇ Canada, and
(c) such other legal opinions as the Agent, Canadian Agent and the Lenders may
reasonably request.
13.7. PAYMENT OF FEES. The Borrowers shall have paid to the Lenders or
the Agent, as appropriate, all fees, including the Agent's fee, due pursuant to
Sections.7.1 and 7.2 and the terms of the Fee Letter and the Agent's Fee Letter,
and the reasonable fees of counsel to the Agent and Canadian Agent incurred
through and including the Closing Date.
13.8. FINANCIAL STATEMENTS, ETC. The Agent and Canadian Agent shall
have received (a) the consolidated balance sheet of ▇▇▇▇ and its Subsidiaries as
of the Balance Sheet Date, (b) the unaudited consolidated statement of income
and consolidated statement of cash flow for ▇▇▇▇ and its Subsidiaries, each for
the fiscal quarter ended January 31, 2000, and (c) such other financial and
other information as may be reasonably requested by the Agent and the Canadian
Agent.
13.9. MATERIALLY ADVERSE CHANGES. There shall not have occurred any
materially adverse change in the financial condition, operations or assets of
the Borrowers and the Designated Subsidiaries, taken as a whole, since the
Balance Sheet Date.
13.10. PROCEEDINGS AND DOCUMENTS. All proceedings in connection with
the transactions contemplated by this Credit Agreement, the other Loan Documents
and all other documents incident thereto shall be reasonably satisfactory in
substance and in form to the Lenders, Canadian Agent, Agent and the Agent's
Special Counsel, and the Lenders, the Agent, the Canadian Agent and the Agent's
Special Counsel shall have received all information and such counterpart
originals or certified or other copies of such documents as the Agent and
Canadian Agent may reasonably request.
13.11. FURTHER ASSURANCES. All corporate and judicial proceedings and
all instruments and agreements to be executed and/or delivered in connection
with the transactions among the Borrowers, the Agent, the Canadian Agent and the
Lenders contemplated by the Loan Documents shall be reasonably satisfactory in
form and substance to the Agent, Canadian Agent and the Lenders, and the Agent,
Canadian Agent and the Lenders shall have received all such information and
documents or papers reasonably requested by the Agent, Canadian Agent and the
Lenders (it being understood that certain accountants' work papers and certain
litigation-related materials may be
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privileged and not disclosable to the Agent, Canadian Agent and the Lenders, but
that the Agent, Canadian Agent and the Lenders and their professional advisors
shall be able to discuss with the Borrowers and their professional advisors the
matters covered by such privileged materials in a manner sufficient to enable
the Lenders to complete their due diligence).
14. CONDITIONS TO ALL BORROWINGS.
The obligations of the Lenders to make any Loan, including the initial
Loan, and of the Agent to issue, extend or renew any Letter of Credit, in each
case whether on or after the Closing Date, shall also be subject to the
satisfaction of the following conditions precedent:
14.1. REPRESENTATIONS TRUE; NO EVENT OF DEFAULT. Each of the
representations and warranties of any of the Borrowers and the Designated
Subsidiaries contained in this Credit Agreement, the other Loan Documents or in
any document or instrument required to be delivered pursuant to or in connection
with this Credit Agreement shall be true as of the date as of which they were
made and shall also be true at and as of the time of the making of such Loan or
the issuance, extension or renewal of such Letter of Credit, with the same
effect as if made at and as of that time (except to the extent of changes
resulting from transactions contemplated or permitted by this Credit Agreement
and the other Loan Documents and changes occurring in the ordinary course of
business that singly or in the aggregate are not materially adverse, and to the
extent that such representations and warranties relate expressly to an earlier
date) and no Default or Event of Default shall have occurred and be continuing.
14.2. NO LEGAL IMPEDIMENT. No change shall have occurred in any
material law or regulations thereunder or interpretations thereof that in the
reasonable opinion of any Lender would make it illegal for such Lender to make
such Loan, or to participate in the issuance, extension or renewal of such
Letter of Credit or in the reasonable opinion of the Agent would make it illegal
for the Agent to issue, extend or renew such Letter of Credit.
14.3. GOVERNMENTAL REGULATION. Each Lender shall have received such
statements in substance and form reasonably satisfactory to such Lender as such
Lender shall require for the purpose of compliance with any applicable
regulations of the Comptroller of the Currency or the Board of Governors of the
Federal Reserve System.
14.4. PAYMENT OF FEES. The Borrowers shall have paid all fees then due
and payable by them under this Credit Agreement, the Fee Letter, the Agent's Fee
Letter or any other Loan Document including, the Letter of Credit Fees and the
commitment fees.
15. EVENTS OF DEFAULT; ACCELERATION; ETC.
15.1. EVENTS OF DEFAULT AND ACCELERATION. If any of the following
events ("Events of Default" or, if the giving of notice or the lapse of time or
both is required, then, prior to such notice or lapse of time, "Defaults") shall
occur:
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(a) the Borrowers shall fail to pay any principal of the Loans
or any Reimbursement Obligation when the same shall become due and
payable, whether at the stated date of maturity or any accelerated date
of maturity or at any other date fixed for payment;
(b) the Borrowers shall fail to pay any interest on the Loans,
the commitment fee, any Letter of Credit Fees, the Agent's fee, or
other sums due hereunder or under any of the other Loan Documents,
within three (3) Business Days of the date when the same shall become
due and payable, whether at the stated date of maturity or any
accelerated date of maturity or at any other date fixed for payment;
(c) the Borrowers shall fail to comply with (i) any of their
covenants contained in Section 10 (other than Sections 10.2, 10.3, 10.7
or 10.13), Section 11 (other than Sections 11.1, 11.2, 11.3, 11.4(c),
11.7, 11.8 or 11.11) or 12; or (ii) any of their covenants contained in
Sections 11.1, 11.2, 11.3 or 11.8 for more than five (5) days after the
occurrence of such failure to comply;
(d) the Borrowers shall fail to perform any term, covenant or
agreement contained herein or in any of the other Loan Documents (other
than those specified elsewhere in this Section 15.1) for thirty (30)
days after written notice of such failure has been given to the
Borrowers by the Agent;
(e) any representation or warranty of the Borrowers in this
Credit Agreement or any of the other Loan Documents or in any other
document or instrument delivered pursuant to or in connection with this
Credit Agreement shall prove to have been false in any material respect
upon the date when made or deemed to have been made or repeated and
shall continue to be false;
(f) any of the Borrowers or the Designated Subsidiaries shall
fail to pay at maturity, or within any applicable period of grace, any
obligation for borrowed money or credit received in excess of
$10,000,000 in the aggregate, including, without limitation, in respect
of any Capitalized Leases, or fail to observe or perform any material
term, covenant or agreement contained in any agreement by which it is
bound, evidencing or securing borrowed money or credit received in
excess of $10,000,000 in the aggregate, including, without limitation,
in respect of any Capitalized Leases, for such period of time as would
permit (assuming the giving of appropriate notice if required) the
holder or holders thereof or of any obligations issued thereunder to
accelerate the maturity thereof;
(g) any of the Borrowers or any Subsidiary of ▇▇▇▇ shall make
an assignment for the benefit of creditors, or admit in writing its
inability to pay or generally fail to pay its debts as they mature or
become due, or shall petition or apply for the appointment of a trustee
or other custodian, liquidator or receiver of such Borrower or such
Subsidiary of ▇▇▇▇, or of any substantial part of the assets of such
Borrower or such Subsidiary of ▇▇▇▇, or shall commence any case or
other proceeding relating to such Borrower or such Subsidiary of ▇▇▇▇
under any bankruptcy, reorganization, arrangement, insolvency,
readjustment of debt, dissolution or liquidation or similar
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law of any jurisdiction, now or hereafter in effect, or shall take any
action to authorize or in furtherance of any of the foregoing, or any
such petition or application shall be filed or any such case or other
proceeding shall be commenced against such Borrower or such Subsidiary
of ▇▇▇▇ and such Borrower or such Subsidiary of ▇▇▇▇ shall indicate its
written approval thereof, written consent thereto or formal
acquiescence therein;
(h) a decree or order is entered appointing any such trustee,
custodian, liquidator or receiver or adjudicating any of the Borrowers
or any Subsidiary of ▇▇▇▇ bankrupt or insolvent, or approving a
petition in any such case or other proceeding, or a decree or order for
relief is entered in respect of any of the Borrowers or any Subsidiary
of ▇▇▇▇ in any involuntary case under any U.S. or foreign bankruptcy
laws as now or hereafter constituted or, if earlier, sixty (60) days
shall pass from the date of filing of such involuntary case without the
dismissal thereof;
(i) there shall remain in force, undischarged, unsatisfied and
unstayed, for more than sixty (60) days, whether or not consecutive,
any final judgment against any Borrower or any Subsidiary of ▇▇▇▇ that,
with other outstanding final, non-appealable, judgments, undischarged,
against the Borrowers or any Subsidiary of ▇▇▇▇ exceeds in the
aggregate $5,000,000;
(j) any of the Loan Documents shall be canceled, terminated,
revoked or rescinded other than with the express prior written
agreement, consent or approval of the requisite Lenders in accordance
with Section 29, or any action at law, suit or in equity or other legal
proceeding to cancel, revoke or rescind any of the Loan Documents shall
be commenced by or on behalf of any Borrower party thereto or any of
their respective stockholders, or any court or any other governmental
or regulatory authority or agency of competent jurisdiction shall make
a determination that, or issue a judgment, order, decree or ruling to
the effect that, any material provision of one or more of the Loan
Documents is illegal, invalid or unenforceable in accordance with the
terms thereof;
(k) with respect to any Guaranteed Pension Plan, an ERISA
Reportable Event shall have occurred and such event would reasonably be
expected to result in liability of any Borrower or any Designated
Subsidiary to the PBGC or such Guaranteed Pension Plan in an aggregate
amount exceeding $1,000,000 and such event in the circumstances
occurring reasonably would constitute grounds for the termination of
such Guaranteed Pension Plan by the PBGC or for the appointment by the
appropriate United States District Court of a trustee to administer
such Guaranteed Pension Plan; or a trustee shall have been appointed by
the United States District Court to administer such Guaranteed Pension
Plan; or the PBGC shall have instituted proceedings to terminate such
Guaranteed Pension Plan;
(l) any Borrower or any Designated Subsidiary shall be
enjoined, restrained or in any way prevented by the order of any court
or any administrative or regulatory agency from conducting any
significant part of its domestic business in the continental United
States and such order shall continue in effect for more than thirty
(30) days;
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(m) there shall occur any strike, lockout, labor dispute,
embargo, condemnation, act of God or public enemy, or other casualty,
which in any such case causes, for more than fifteen (15) consecutive
days, the cessation or substantial curtailment of revenue producing
activities at any facility of any Borrower or any Designated Subsidiary
if such event or circumstance is not covered by business interruption
insurance and would have a materially adverse effect on the business or
financial condition of the Borrowers and the Designated Subsidiaries
taken as a whole;
(n) ▇▇▇▇ shall, at any time, legally or beneficially own less
than one hundred percent (100%) of the issued and outstanding shares of
the capital stock of ▇▇▇▇ Delaware (unless ▇▇▇▇ and ▇▇▇▇ Delaware are
merged or consolidated as permitted by Section 11.5.1 hereof);
(o) there shall occur any event which would allow any
purchaser to cease to purchase receivables pursuant to the Receivables
Facility Documents or begin to amortize (other than scheduled
amortization contemplated by the Receivables Facility Documents) the
underlying Indebtedness used to finance the purchase of receivables, in
either case, prior to a date scheduled (or a date elected by the
Borrowers) under such Receivables Facility Documents;
(p) any of the Borrowers or the Designated Subsidiaries shall
make Distributions during any fiscal year in excess of the limitations
set forth in Section 11.4(c), whether or not such Distributions were
permitted by the terms of such clause at the time when made; provided,
however, that any Distribution with respect to any fiscal year shall
not be an Event of Default because of losses occurring after the end of
the fiscal year in which such Distribution was made; or
(q) there shall occur any Change of Control;
then, in any such event, so long as the same may be continuing, the Agent may,
and upon the request of the Majority Lenders shall, by notice in writing to the
Borrowers, declare all amounts owing with respect to this Credit Agreement, the
Notes and the other Loan Documents and all Reimbursement Obligations to be, and
they shall thereupon forthwith become, immediately due and payable without
presentment, demand, protest or other notice of any kind, all of which are
hereby expressly waived by each of the Borrowers; provided that in the event of
any Event of Default specified in Sections 15.1(g) or 15.1(h), all such amounts
shall become immediately due and payable automatically, without any requirement
of notice from the Agent or any Lender, and without presentment, demand, protest
or other notice of any kind, all of which are hereby expressly waived. In
addition, the Agent may make one or more claims against one or more of the
Domestic Borrowers under Sections 7.15 and 8.
15.2. TERMINATION OF COMMITMENTS. If any one or more of the Events of
Default specified in Section 15.1(g) or Section 15.1(h) shall occur, any unused
portion of the credit hereunder shall forthwith terminate and each of the
Lenders shall be relieved of all further obligations to make Loans to the
Borrowers and the Agent shall be relieved of all further obligations to issue,
extend or renew Letters of Credit. If any other Event of Default shall have
occurred
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and be continuing, the Agent and Canadian Agent may and, upon the request of the
Majority Lenders shall, by notice to the Borrowers specifying the applicable
Event of Default or Events of Default, terminate the unused portion of the
credit hereunder, and upon such notice being given such unused portion of the
credit hereunder shall terminate immediately and each of the Lenders shall be
relieved of all further obligations to make Loans and the Agent shall be
relieved of all further obligations to issue, extend or renew Letters of Credit.
No termination of the credit hereunder shall relieve the Borrowers of any of the
Obligations or, without in any way limiting any rights of any of the Agent and
the Canadian Agent or the Lenders to exercise any remedies available to them
hereunder or under any of the other Loan Documents or at law or in equity, or
relieve the Agent, the Canadian Agent or any Lender of common law, if any, or
contractual confidentiality obligations to the Borrowers.
15.3. REMEDIES. In case any one or more of the Events of Default shall
have occurred and be continuing, and whether or not the Lenders shall have
accelerated the maturity of the Loans pursuant to Section 15.1, each Lender, if
owed any amount with respect to the Loans, or the Reimbursement Obligations, may
proceed to protect and enforce its rights by suit in equity, action at law or
other appropriate proceeding, whether for the specific performance of any
covenant or agreement contained in this Credit Agreement and the other Loan
Documents or any instrument pursuant to which the Obligations to such Lender are
evidenced, including as permitted by applicable law the obtaining of the ex
parte appointment of a receiver, and, if such amount shall have become due, by
declaration or otherwise, proceed to enforce the payment thereof or any other
legal or equitable right of such Lender. No remedy herein conferred upon any
Lender or the Agent or Canadian Agent or the holder of any Note or the purchaser
of any Letter of Credit Participation is intended to be exclusive of any other
remedy, and each and every remedy shall be cumulative and shall be in addition
to every other remedy given hereunder or now or hereafter existing at law or in
equity or by statute or any other provision of law.
15.4. CASH COLLATERAL TO SECURE OUTSTANDING LETTERS OF CREDIT. In case
any one or more Events of Default shall have occurred and be continuing, and
whether or not the Lenders shall have accelerated the maturity of the Loans
pursuant to Section 15.1, the Agent may, or at the request of the Majority
Lenders shall, require the Borrowers to furnish upon one day's notice cash
collateral to secure the Borrowers' Obligations with respect to any Letters of
Credit at the time outstanding in an amount equal to one hundred percent (100%)
of the Maximum Drawing Amount of each such Letter of Credit as of such date and
according to a Cash Collateral Agreement.
15.5. REPAYMENTS OF LOANS AND DISTRIBUTION OF PROCEEDS AFTER EVENT OF
DEFAULT. In the event that following the occurrence and during the continuance
of an Event of Default, the Agent, Canadian Agent or any Lender, as the case may
be, receives any monies in connection with the enforcement of any of the Loan
Documents, such monies shall be distributed for application as follows:
(a) First, to the payment of, or (as the case may be) the
reimbursement of the Agent or Canadian Agent for or in respect of, all
reasonable costs, expenses, disbursements and losses which shall have
been incurred or sustained by the Agent or
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Canadian Agent in connection with the collection of such monies by the
Agent or Canadian Agent, for the exercise, protection or enforcement by
the Agent or Canadian Agent of all or any of the rights, remedies,
powers and privileges of the Agent or Canadian Agent, for the benefit
of the Lenders, under this Credit Agreement or any of the other Loan
Documents or in support of any provision of adequate indemnity to the
Agent or Canadian Agent against any taxes or liens which by law shall
have, or may have, priority over the rights of the Agent or Canadian
Agent to such monies;
(b) Second, to all other Obligations in such order or
preference as the Majority Lenders may determine; provided, however,
that (i) distributions in respect of such obligations shall be made
pari passu among Obligations with respect to the Agent's fees payable
pursuant to Section 7.2 and the Fee Letter and all other Obligations
and (ii) Obligations owing to the Lenders with respect to each type of
Obligation such as interest, principal, fees and expenses, shall be
made among the Lenders pro rata in accordance with each Lender's
relative interest in such type of Obligation (taking into account for
purposes of this subsection (b)(ii), on a Dollar Equivalent basis, each
Lender's interest in the Total Commitment); and provided, further, that
the Agent may in its discretion make proper allowance to take into
account any Obligations not then due and payable; and
(c) Third, the excess, if any, shall be returned to the
Borrowers or to such other Persons as are entitled thereto.
In the event that any Lender receives money pursuant to Section
15.5(b)(ii) above which exceeds, in aggregate, such Lender's pro rata share of
the Dollar Equivalent of the Total Commitment, or following an Event of Default
any Lender has an unfunded U.S. Commitment or an unfunded Canadian Commitment
which on a proportionate basis vis-a-vis the Total Commitment is greater than
the unfunded U.S. Commitment or the unfunded Canadian Commitment of the other
Lenders, such Lender shall, if requested by the Agent or the Canadian Agent,
immediately make such disposition and arrangements with the other Lenders with
respect to the amount of excess, either by way of purchase of participations,
distribution, pro tanto assignment or claims, subrogation or otherwise, as shall
result in each Lender receiving its pro rata share of such monies based upon the
sum of the Dollar Equivalent of the Total Commitment.
16. SETOFF.
Regardless of the adequacy of any collateral, during the continuance of
any Event of Default, any deposits or other sums credited by or due from any of
the Lenders or the Agent or the Canadian Agent to the Borrowers may be applied
to or set off by such Lender or the Agent or Canadian Agent on behalf of such
Lender against the payment of Obligations then due and payable and any and all
other liabilities, direct or indirect, absolute or contingent, now due or to
become due, now existing or hereafter arising, of the Borrowers to such Lender.
Each of the Lenders agrees with each other Lender that (a) if an amount to be
set off is to be applied to Indebtedness of the Borrowers to such Lender, other
than Indebtedness evidenced by the Notes held by such Lender or, as the case may
be, constituting Reimbursement Obligations owed to such Lender, such amount
shall be applied ratably to such other Indebtedness and to the Indebtedness
evidenced by all such
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Notes held by such Lender or, as the case may be, constituting Reimbursement
Obligations owed to such Lender, and (b) if such Lender shall receive from any
Borrower, whether by voluntary payment, exercise of the right of setoff,
counterclaim, cross action, enforcement of the claim evidenced by the Notes,
held by, or, as the case may be, constituting Reimbursement Obligations owed to,
such Lender, by proceedings against the Borrowers at law or in equity in
accordance with the terms of this Credit Agreement, or by proof thereof in
bankruptcy, reorganization, liquidation, receivership or similar proceedings, or
otherwise, and shall retain and apply to the payment of the Note or Notes held
by, or, as the case may be, Reimbursement Obligations owed to, such Lender any
amount in excess of its ratable portion of the payments received by all of the
Lenders with respect to the Notes held by or, as the case may be, Reimbursement
Obligations owed to, all of the Lenders, such Lender will make such disposition
and arrangements with the other Lenders with respect to such excess, either by
way of distribution, pro tanto assignment of claims, subrogation or otherwise as
shall result in each Lender receiving in respect of the Notes held by it or, as
the case may be, Reimbursement Obligations owed it, its proportionate payment as
contemplated by this Credit Agreement; provided that if all or any part of such
excess payment is thereafter recovered from such Lender, such disposition and
arrangements shall be promptly rescinded and the amount promptly restored to the
extent of such recovery, but without interest.
17. THE AGENT.
17.1. AUTHORIZATION.
(a) Each of the Agent and Canadian Agent is authorized to take
such action on behalf of each of the Lenders and to exercise all such
powers as are hereunder and under any of the other Loan Documents and
any related documents delegated to the Agent or Canadian Agent,
together with such powers as are reasonably incident thereto, provided
that no duties or responsibilities not expressly assumed herein or
therein shall be implied to have been assumed by the Agent or Canadian
Agent.
(b) The relationship between the Agent, Canadian Agent and
each of the Lenders is that of an independent contractor. The use of
the term "Agent" is for convenience only and is used to describe, as a
form of convention, the independent contractual relationship between
the Agent, Canadian Agent and each of the Lenders. Nothing contained in
this Credit Agreement nor the other Loan Documents shall be construed
to create an agency, trust or other fiduciary relationship between the
Agent, Canadian Agent and any of the Lenders.
(c) As an independent contractor empowered by the Lenders to
exercise certain rights and perform certain duties and responsibilities
hereunder and under the other Loan Documents, the Agent is nevertheless
a "representative" of the Lenders, as that term is defined in Article 1
of the Uniform Commercial Code, for purposes of actions for the benefit
of the Lenders and the Agent and Canadian Agent with respect to all
collateral security and guaranties contemplated by the Loan Documents.
Such actions include the designation of the Agent and Canadian Agent as
"secured party", "mortgagee" or the like on all financing statements
and
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other documents and instruments, whether recorded or otherwise,
relating to the attachment, perfection, priority or enforcement of any
security interests, mortgages or deeds of trust in collateral security
intended to secure the payment or performance of any of the
Obligations, all for the benefit of the Lenders and the Agent and
Canadian Agent.
17.2. EMPLOYEES AND AGENTS. The Agent and Canadian Agent may exercise
their powers and execute their duties by or through employees or agents and
shall be entitled to take, and to rely on, advice of counsel concerning all
matters pertaining to their rights and duties under this Credit Agreement and
the other Loan Documents. The Agent and Canadian Agent may utilize the services
of such Persons as the Agent and Canadian Agent in their sole discretion may
reasonably determine, and all reasonable fees and expenses of any such Persons
shall be paid by the Borrowers.
17.3. NO LIABILITY. Neither the Agent, the Canadian Agent nor any of
their respective shareholders, directors, officers or employees nor any other
Person assisting them in their duties nor any agent or employee thereof, shall
be liable for any waiver, consent or approval given or any action taken, or
omitted to be taken, in good faith by it or them hereunder or under any of the
other Loan Documents, or in connection herewith or therewith, or be responsible
for the consequences of any oversight or error of judgment whatsoever, except
that the Agent, Canadian Agent or such other Person, as the case may be, shall
be liable for losses due to its willful misconduct or gross negligence.
17.4. NO REPRESENTATIONS. The Agent and Canadian Agent shall not be
responsible for the execution or validity or enforceability of this Credit
Agreement, the Notes, the Letters of Credit, any of the other Loan Documents or
any instrument at any time constituting, or intended to constitute, collateral
security for the Notes, or for the value of any such collateral security or for
the validity, enforceability or collectability of any such amounts owing with
respect to the Notes, or for any recitals or statements, warranties or
representations made herein or in any of the other Loan Documents or in any
certificate or instrument hereafter furnished to it by or on behalf of the
Borrowers, or be bound to ascertain or inquire as to the performance or
observance of any of the terms, conditions, covenants or agreements herein or in
any instrument at any time constituting, or intended to constitute, collateral
security for the Notes or to inspect any of the properties, books or records of
the Borrowers or any of their Subsidiaries. The Agent and Canadian Agent shall
not be bound to ascertain whether any notice, consent, waiver or request
delivered to it by the Borrowers or any holder of any of the Notes shall have
been duly authorized or is true, accurate and complete. Neither the Agent nor
the Canadian Agent have made nor do they now make any representations or
warranties, express or implied, nor do they assume any liability to the Lenders,
with respect to the creditworthiness or financial condition of the Borrowers or
any of their Subsidiaries. Each Lender acknowledges that it has, independently
and without reliance upon the Agent, the Canadian Agent or any other Lender, and
based upon such information and documents as it has deemed appropriate, made its
own credit analysis and decision to enter into this Credit Agreement.
17.5. PAYMENTS.
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17.5.1. PAYMENTS TO AGENT AND CANADIAN AGENT. A payment by the
Borrowers to the Agent or Canadian Agent hereunder or under any of the
other Loan Documents for the account of any Lender shall constitute a
payment to such Lender. The Agent and Canadian Agent agree promptly to
distribute to each Lender such Lender's pro rata share of payments
received by the Agent or the Canadian Agent, as the case may be, for
the account of the U.S. Lenders or Canadian Lenders, as the case may
be, except as otherwise expressly provided herein or in any of the
other Loan Documents.
17.5.2. DISTRIBUTION BY AGENT AND CANADIAN AGENT. If in the
opinion of the Agent or Canadian Agent the distribution of any amount
received by it in such capacity hereunder, under the Notes or under any
of the other Loan Documents might involve it in liability, it may
refrain from making distribution until its right to make distribution
shall have been adjudicated by a court of competent jurisdiction. If a
court of competent jurisdiction shall adjudge that any amount received
and distributed by the Agent or the Canadian Agent is to be repaid,
each Person to whom any such distribution shall have been made shall
either repay to the Agent or the Canadian Agent, as the case may be,
its proportionate share of the amount so adjudged to be repaid or shall
pay over the same in such manner and to such Persons as shall be
determined by such court.
17.5.3. DELINQUENT LENDERS. Notwithstanding anything to the
contrary contained in this Credit Agreement or any of the other Loan
Documents, any Lender that fails (i) to make available to the Agent or
the Canadian Agent, as the case may be, its pro rata share of any Loan
or to purchase any Letter of Credit Participation or (ii) to comply
with the provisions of Section 16 with respect to making dispositions
and arrangements with the other Lenders, where such Lender's share of
any payment received, whether by setoff or otherwise, is in excess of
its pro rata share of such payments due and payable to all of the
Lenders, in each case as, when and to the full extent required by the
provisions of this Credit Agreement, shall be deemed delinquent (a
"Delinquent Lender") and shall be deemed a Delinquent Lender until such
time as such delinquency is satisfied. A Delinquent Lender shall be
deemed to have assigned any and all payments due to it from the
Borrowers, whether on account of outstanding Loans, Unpaid
Reimbursement Obligations, interest, fees or otherwise, to the
remaining nondelinquent Lenders for application to, and reduction of,
their respective pro rata shares of all outstanding Loans, and Unpaid
Reimbursement Obligations. The Delinquent Lender hereby authorizes the
Agent, as the case may be, or the Canadian Agent to distribute such
payments to the nondelinquent Lenders in proportion to their respective
pro rata shares of all outstanding Loans and Unpaid Reimbursement
Obligations. A Delinquent Lender shall be deemed to have satisfied in
full a delinquency when and if, as a result of application of the
assigned payments to all outstanding Loans and Unpaid Reimbursement
Obligations of the nondelinquent Lenders the Lenders' respective pro
rata shares of all outstanding Loans, and Unpaid Reimbursement
Obligations have returned to those in effect immediately prior to such
delinquency and without giving effect to the nonpayment causing such
delinquency.
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17.6. HOLDERS OF NOTES. The Agent and the Canadian Agent may deem and
treat the payee of any Note or the purchaser of any Letter of Credit
Participation or other transfer of any interest in a Canadian Loan as the
absolute owner or purchaser thereof for all purposes hereof until it shall have
been furnished in writing with a different name by such payee or by a subsequent
holder, assignee or transferee.
17.7. INDEMNITY. The U.S. Lenders ratably agree hereby to indemnify and
hold harmless the Agent and the Canadian Lenders ratably agree hereby to
indemnify and hold harmless the Canadian Agent from and against any and all
claims, actions and suits (whether groundless or otherwise), losses, damages,
costs, expenses (including any expenses for which the Agent or Canadian Agent,
as the case may be, has not been reimbursed by the Borrowers as required by
Section 18), and liabilities of every nature and character arising out of or
related to this Credit Agreement, the Notes, or any of the other Loan Documents
or the transactions contemplated or evidenced hereby or thereby, or the Agent's
or the Canadian Agent's, as the case may be, actions taken hereunder or
thereunder, except to the extent that any of the same shall be directly caused
by the Agent's or the Canadian Agent's, as the case may be, willful misconduct
or gross negligence.
17.8. AGENT AND CANADIAN AGENT AS LENDERS. In its individual capacity,
FNB shall have the same obligations and the same rights, powers and privileges
in respect to its Commitment and the Loans made by it, and as the holder of any
of the Notes, and as the purchaser of any Letter of Credit Participations, as it
would have were it not also the Agent. In its individual capacity, Canadian
Imperial Bank of Commerce shall have the same obligations and the same rights,
powers and privileges in respect to its Commitment and the Loans made by it, and
as the holder of any of the Notes, as it would have were it not also the
Canadian Agent.
17.9. RESIGNATION; REMOVAL. The Agent or Canadian Agent may resign at
any time by giving sixty (60) days prior written notice thereof to the Lenders
and the Borrowers. The Agent shall resign, at the request of the Borrowers, if
its U.S. Commitment is reduced to an amount less than $25,000,000. Upon any such
resignation, the Majority Lenders shall have the right to appoint a successor
Agent or Canadian Agent, as the case may be. In the case of the resignation by
the Agent, unless an Event of Default shall have occurred and be continuing,
such successor Agent or Canadian Agent, as the case may be, shall be reasonably
acceptable to the Borrowers, and in the case of a successor Agent, shall have a
U.S. Commitment of not less than $25,000,000 (after giving effect to such
appointment). If no successor Agent or Canadian Agent, as the case may be, shall
have been so appointed by the Majority Lenders and shall have accepted such
appointment within thirty (30) days after the retiring Agent's or Canadian
Agent's, as the case may be, giving of notice of resignation, then the retiring
Agent or Canadian Agent, as the case may be, may, on behalf of the Lenders,
appoint a successor Agent or Canadian Agent, as the case may be, which shall be
a financial institution having a rating of not less than A or its equivalent by
Standard & Poor's Corporation and which, unless an Event of Default shall have
occurred and be continuing, shall be reasonably acceptable to the Borrowers.
Upon the acceptance of any appointment as Agent hereunder by a successor Agent,
as the case may be, such successor Agent or Canadian Agent, as the case may be,
shall thereupon succeed to and become vested with all the rights, powers,
privileges and duties of the retiring Agent, or Canadian Agent, as the case may
be, and the retiring Agent, or Canadian Agent, as the case
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may be, shall be discharged from its duties and obligations hereunder. After any
retiring Agent's or Canadian Agent's, as the case may be, resignation, the
provisions of this Credit Agreement and the other Loan Documents 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 Agent or Canadian Agent, as the case may be. The
Agent or Canadian Agent may be removed by a vote of the Majority Lenders for
cause or in the event that FNB or any successor Agent shall have entered into
assignments of its interest under this Credit Agreement resulting in its U.S.
Commitment being reduced to an amount less than $25,000,000 or Canadian Imperial
Bank of Commerce or any successor Canadian Agent shall have entered into
assignments of its interest under this Credit Agreement resulting in its
Canadian Commitment being reduced to an amount less than C$10,000,000. In the
event of any such removal of the Agent or Canadian Agent pursuant to the
foregoing, the provisions of this Section 17.9 shall apply to the appointment of
a successor.
17.10. NOTIFICATION OF DEFAULTS AND EVENTS OF DEFAULT. Each Lender
hereby agrees that, upon learning of the existence of a Default or an Event of
Default, it shall promptly notify the Agent and the Canadian Agent thereof, but
it shall have no liability for failure to do so. The Agent and the Canadian
Agent hereby agrees that upon receipt of any notice under this Section 17.10 it
shall promptly notify the other Lenders of the existence of such Default or
Event of Default.
18. EXPENSES.
The Borrowers agree to pay (i) the reasonable costs of the Agent or the
Arranger, of producing and reproducing this Credit Agreement, the other Loan
Documents and the other agreements and instruments mentioned herein; (ii) any
taxes (including any interest and penalties in respect thereof) payable by the
Agent, the Arranger or any of the Lenders (other than franchise taxes or taxes
based upon the Agent's, the Arranger's, or any Lender's net income) on or with
respect to the transactions contemplated by this Credit Agreement (the Borrowers
hereby agreeing to indemnify the Agent, the Arranger and each Lender with
respect thereto); (iii) the reasonable fees, expenses and disbursements of the
Agent's Special Counsel incurred in connection with the preparation,
administration or interpretation of the Loan Documents and other instruments
mentioned herein, each closing hereunder, and amendments, modifications,
approvals, consents or waivers hereto or hereunder; (iv) the reasonable fees,
expenses and disbursements of the Agent and the Arranger incurred by the Agent
or the Arranger in connection with the preparation, administration or
interpretation of the Loan Documents and other instruments mentioned herein; (v)
all reasonable out-of-pocket expenses incurred by the Agent in connection with
monitoring the transactions contemplated hereby, in each case in accordance with
the terms of this Credit Agreement; and (vi) all reasonable out-of-pocket
expenses (including without limitation reasonable attorneys' fees and costs,
which attorneys may be employees of any Lender, the Agent, the Canadian Agent or
the Arranger) incurred by any Lender, the Agent, the Canadian Agent or the
Arranger in connection with (A) the enforcement of or preservation of rights
under any of the Loan Documents (including without limitation, in connection
with any workout or restructuring) against the Borrowers or the administration
thereof after the occurrence of a Default or Event of Default and (B) any
litigation, proceeding or dispute whether arising hereunder or otherwise, in any
way related to any Lender's, the Agent's, the Canadian Agent's or the Arranger's
relationship
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with the Borrowers or any of their Subsidiaries. Notwithstanding the foregoing,
the Borrowers shall not in any event be obligated to reimburse the Agent, the
Arranger or any Lender, for any expenses that arise (i) out of such Person's own
gross negligence or willful misconduct or for breach of its own obligations
under this Agreement; (ii) in connection with any final, non-appealable judgment
in any Borrower's favor against any such Person by a court of competent
jurisdiction; (iii) out of any settlement with a party other than a Borrower or
an Affiliate thereof which was entered into by such Person without the prior
written consent of such Borrower, unless such Borrower has been notified of such
proposed settlement and has not assumed responsibility for defense of such claim
and has not prosecuted such claim within ninety (90) days of such notice; or
(iv) in the case of ▇▇▇▇ Canada, in connection with any other Person. The
covenants of this Section 18 shall survive payment or satisfaction of all other
Obligations.
19. INDEMNIFICATION.
The Borrowers agree to indemnify and hold harmless the Agent, the
Arranger and the Lenders from and against any and all claims, actions and suits
whether groundless or otherwise, and from and against any and all liabilities,
losses, damages and expenses of every nature and character, arising out of (a)
this Credit Agreement or any of the other Loan Documents or the transactions
contemplated hereby or any actual or proposed use by the Borrowers of the
proceeds of any of the Loans or Letters of Credit, (b) the Borrowers entering
into or performing this Credit Agreement or any of the other Loan Documents, (c)
with respect to the Borrowers, the Designated Subsidiaries and their respective
properties and assets, the violation of any Environmental Law, the presence,
disposal, escape, seepage, leakage, spillage, discharge, emission, release or
threatened release of any Hazardous Substances or any action, suit, proceeding
or investigation brought or threatened with respect to any Hazardous Substances
(including, but not limited to, claims with respect to wrongful death, personal
injury or damage to property), or (d) any sales, use, transfer, documentary and
stamp taxes (but excluding any taxes based upon or measured by the income or
profits of any Lender, the Arranger, the Canadian Agent or the Agent) and any
recording and filing fees paid by the Agent, the Canadian Agent, the Arranger or
the Lenders and which arise by reason of the transactions contemplated hereby or
by any of the other Loan Documents, in each case including, without limitation,
the reasonable fees and disbursements of counsel and allocated costs of internal
counsel incurred in connection with any such investigation, litigation or other
proceeding; provided, however, that such indemnity shall not apply to the
portion, if any, of any such losses, claims, damages, liabilities or related
expenses of any Person seeking indemnification (i) that is determined by a court
of competent jurisdiction by final and nonappealable judgment to have resulted
from the willful misconduct or gross negligence of the Person seeking
indemnification; (ii) that results solely and directly from any breach by such
Person seeking indemnification of its obligations under this Credit Agreement;
(iii) that arise out of any settlement with a party other than a Borrower or an
Affiliate thereof which was entered into by such Person without the prior
written consent of such Borrower, unless such Borrower has been notified of such
proposed settlement and has not assumed responsibility for defense of such
claims and has not prosecuted such claim within ninety (90) days of such notice;
or (iv) that is for reimbursement of amounts paid or payable by any such Person
pursuant to any final, nonappealable judgment in any Borrower's favor against
such Person by a court of competent jurisdiction. In litigation, or the
preparation
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therefor, the Lenders, the Arranger, and the Agent shall be entitled to select
counsel to act on behalf of the Lenders, the Arranger, the Canadian Agent and
the Agent and, in addition to the foregoing indemnity, the Borrowers agree to
pay promptly the reasonable fees and expenses of such counsel; provided,
however, that in the event of any conflict of interest between or among any
Lender, the Arranger, and the Agent, the Person or Persons with such conflict of
interest shall be entitled to select its or their own counsel (which counsel may
be the employee of such Person or Persons), and, in addition to the foregoing
indemnity, the Borrowers also jointly and severally agree to pay promptly the
reasonable fees and expenses of such counsel; provided, further, that
notwithstanding anything contained herein to the contrary, ▇▇▇▇ Canada shall be
obligated to indemnify any Lender, the Arranger and/or the Agent for any claims,
actions, suits, liabilities, losses, damages and expenses under this Section 19
only to the extent that the same relate directly to ▇▇▇▇ Canada, and not to any
other Borrower or any other Person. Prior to the settlement of any claim
hereunder, the Agent, the Canadian Agent, the Lender and the Arranger agree to
notify the Borrowers of such proposed settlement. If, and to the extent that,
the obligations of the Borrowers under this Section 19 are unenforceable for any
reason, each of the Borrowers hereby agrees to make the maximum contribution to
the payment in satisfaction of such obligations which is permissible under
applicable law. The covenants contained in this Section 19 shall survive payment
or satisfaction in full of all other Obligations.
20. SURVIVAL OF COVENANTS, ETC.
All covenants, agreements, representations and warranties made herein,
in the Notes, in any of the other Loan Documents or in any documents or other
papers delivered by or on behalf of the Borrowers or any of the Designated
Subsidiaries pursuant hereto shall be deemed to have been relied upon by the
Lenders, the Canadian Agent and the Agent, notwithstanding any investigation
heretofore or hereafter made by any of them, and shall survive the making by the
Lenders of any of the Loans and the issuance, extension or renewal of any
Letters of Credit, as herein contemplated, and shall continue in full force and
effect so long as any Letter of Credit or any amount due under this Credit
Agreement or the Notes or any of the other Loan Documents remains outstanding or
any Lender has any obligation to make any Loans or the Agent has any obligation
to issue, extend or renew any Letter of Credit, and for such further time as may
be otherwise expressly specified in this Credit Agreement.
21. TREATMENT OF CERTAIN CONFIDENTIAL INFORMATION.
21.1. SHARING OF INFORMATION WITH SECTION 20 SUBSIDIARY. The Borrowers
acknowledge that from time to time financial advisory, investment banking and
other services may be offered or provided to the Borrowers or one or more of its
Designated Subsidiaries, in connection with this Credit Agreement or otherwise,
by a Section 20 Subsidiary. The Borrowers, for itself and each of its
Subsidiaries, hereby authorizes (a) such Section 20 Subsidiary to share with the
Agent any information delivered to such Section 20 Subsidiary by the Borrowers
or any of its Designated Subsidiaries, and (b) the Agent to share with such
Section 20 Subsidiary any information delivered to the Agent by the Borrowers or
any of its Designated Subsidiaries pursuant to this Credit Agreement, or in
connection with the decision of the Agent to enter into this Credit Agreement;
it being understood, in each case, that any such Section 20 Subsidiary receiving
such information
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shall be bound by the confidentiality provisions of this Credit Agreement and
shall use such information only in connection with this Credit Agreement or any
participation, replacement, substitution or other financing. Such authorization
shall survive the payment and satisfaction in full of all of Obligations.
21.2. CONFIDENTIALITY. Each of the Lenders and the Agent agrees, on
behalf of itself and each of its affiliates, directors, officers, employees and
representatives, to use reasonable precautions to keep confidential, in
accordance with their customary procedures for handling confidential information
of the same nature and in accordance with safe and sound practices, any
non-public information supplied to it by the Borrowers or any of the Designated
Subsidiaries pursuant to this Credit Agreement that is identified by such Person
as being confidential at the time the same is delivered to the Lender, or the
Agent, provided that nothing herein shall limit the disclosure of any such
information (a) after such information shall have become public other than
through a violation of this Section 21, (b) to the extent required by statute,
rule, regulation or judicial process, (c) to counsel for any of the Lenders, or
the Agent, (d) to bank examiners, the National Association of Insurance
Commissioners or any other U.S. federal or foreign regulatory authority having
jurisdiction over any Lender, or the Agent, or to auditors or accountants, (e)
to the Agent, any Lender or any Section 20 Subsidiary, (f) in connection with
any litigation to which the Agent or any Section 20 Subsidiary is a party, or in
connection with the enforcement of rights or remedies hereunder or under any
other Loan Document, (g) to a Designated Subsidiary or affiliate of such Lender
as provided in Section 21.1 or (h) to any assignee or participant (or
prospective assignee or participant) so long as such assignee or participant
agrees to be bound by the provisions of Section 22.
21.3. PRIOR NOTIFICATION. Unless specifically prohibited by applicable
law or court order, each of the Lenders, and the Agent shall, prior to
disclosure thereof, notify the Borrowers of any request for disclosure of any
such non-public information by any governmental agency or representative thereof
(other than any such request in connection with a routine examination of such
Lender by such governmental agency) or pursuant to legal process.
21.4. OTHER. In no event shall any Lender or the Agent be obligated or
required to return any materials furnished to it or any Section 20 Subsidiary by
the Borrowers or any of the Designated Subsidiaries. The obligations of each
Lender under this Section 21 shall supersede and replace the obligations of such
Lender under any confidentiality letter in respect of this financing signed and
delivered by such Lender to the Borrowers prior to the date hereof and shall be
binding upon any assignee of, or purchaser of any participation in, any interest
in any of the Loans or Reimbursement Obligations from any Lender.
22. ASSIGNMENT AND PARTICIPATION.
22.1. CONDITIONS TO ASSIGNMENT BY LENDERS. Except as provided herein,
each Lender may assign to one or more Eligible Assignees all or a portion of its
interests, rights and obligations under this Credit Agreement (including all or
a portion of its U.S. Commitment and/or Canadian Commitment and the same portion
of the Loans at the time owing to it, the Notes held by it and its participating
interest in the risk relating to any Letters of Credit); provided that (a) the
Agent shall have given its prior written consent to
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such assignment, (b)(i) so long as no Default or Event of Default has
occurred and is continuing, the Borrowers shall have given their prior written
consent to such assignment, which consent will not be unreasonably withheld or
delayed, and (ii) during the continuance of any Default or Event of Default, the
Borrowers shall have given their prior written consent in the case of any such
assignment to an Excluded Assignee, (c) each such assignment shall be of a
constant, and not a varying, percentage of all the assigning Lender's rights and
obligations under this Credit Agreement, (d) each assignment shall be in an
amount that is at least equal to (i) with respect to U.S. Loans, $5,000,000, and
(ii) with respect to Canadian Loans, the Dollar Equivalent of $2,500,000, (e) no
Lender shall enter into an assignment which would result in such Lender's
aggregate U.S. Commitment and Canadian Commitment being reduced to less than a
Dollar Equivalent of $10,000,000, except that any Lender may assign all of its
rights and obligations under this Credit Agreement and reduce its aggregate U.S.
Commitment and Canadian Commitment to $0, and (f) the parties to such assignment
shall execute and deliver to the Agent, for recording in the Register (as
hereinafter defined), an Assignment and Acceptance, substantially in the form of
Exhibit E hereto (an "Assignment and Acceptance"), together with any Notes
subject to such assignment. Upon such execution, delivery, acceptance and
recording, from and after the effective date specified in each Assignment and
Acceptance, which effective date shall be at least five (5) Business Days after
the execution thereof, (i) the assignee thereunder shall be a party hereto and,
to the extent provided in such Assignment and Acceptance, have the rights and
obligations of a Lender hereunder, and (ii) the assigning Lender shall, to the
extent provided in such assignment and upon payment to the Agent of the
registration fee referred to in Section 22.4, if applicable, be released from
its obligations under this Credit Agreement. Notwithstanding the foregoing, any
assigning Lender shall retain its rights to be indemnified pursuant to Section
19 hereof with respect to claims, actions and suits arising from events or
circumstances occurring prior to the date of such assignment.
22.2. ACCESSION. Except as otherwise provided herein, Eligible
Assignees (each such Eligible Assignee, an "Acceding Bank") may, at the request
of the Borrowers and with the consent of the Agent, become party to this Credit
Agreement by entering into an Instrument of Accession in substantially the form
of Exhibit F hereto (an "Instrument of Accession") with the Borrowers, the
Canadian Agent and the Agent and assuming thereunder a U.S. Commitment and/or a
Canadian Commitment, in an amount to be agreed upon by the Borrowers, such
Acceding Bank, the Canadian Agent or the Agent, as the case may be, to make U.S.
Loans and/or Canadian Loans, as the case may be, and participate in the risk
relating to the Letters of Credit pursuant to the terms hereof, and the U.S.
Total Commitment and/or the Canadian Total Commitment shall thereupon be
increased by the amount of such Acceding Bank's U.S. Commitment and/or Canadian
Commitment; provided, however, that (a) the Agent or the Canadian Agent, as the
case may be, shall have given its prior written consent to such accession, which
consent shall not be unreasonably conditioned, delayed or withheld and (b) in no
event shall (i) the U.S. Total Commitment be increased under any one or more of
such Instruments of Accession so as to exceed, in the aggregate, $285,000,000
(ii) the Canadian Total Commitment be increased under any one or more of such
Instruments of Accession so as to exceed, in the aggregate, a Dollar Equivalent
of $25,000,000 (measured on the date of such increase), and (iii) the Total
Commitment be increased under any one or more of such Instruments of Accession
so as to exceed, in the aggregate, a Dollar Equivalent of $300,000,000 (measured
on the date of such increase). On the effective date specified in any Instrument
of
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Accession, Schedule 1 hereto shall be deemed to be amended to reflect (a) the
name, address, U.S. Commitment and/or Canadian Commitment and U.S. Commitment
Percentage and/or Canadian Commitment Percentage of such Acceding Bank, (b) the
U.S. Total Commitment and/or the Canadian Total Commitment as increased by such
Acceding Bank's U.S. Commitment and/or Canadian Commitment, and (c) the changes
to the other Lenders' respective U.S. Commitment Percentages and/or Canadian
Commitment Percentages, and any changes to the other Lenders' respective U.S.
Commitments and/or Canadian Commitments (in the event such Lender is also the
Acceding Bank) resulting from such assumption and such increased Total
Commitment.
22.3. CERTAIN REPRESENTATIONS AND WARRANTIES; LIMITATIONS; COVENANTS.
By executing and delivering an Assignment and Acceptance, the parties to the
assignment thereunder confirm to and agree with each other and the other parties
hereto as follows:
(a) other than the representation and warranty that it is the
legal and beneficial owner of the interest being assigned thereby free
and clear of any adverse claim, the assigning Lender makes no
representation or warranty, express or implied, and assumes no
responsibility with respect to any statements, warranties or
representations made in or in connection with this Credit Agreement,
the other Loan Documents or any other instrument or document furnished
pursuant hereto or the execution, legality, validity, enforceability,
genuineness, sufficiency or value of this Credit Agreement, the other
Loan Documents or any other instrument or document furnished pursuant
hereto or the attachment, perfection or priority of any security
interest or mortgage,
(b) the assigning Lender makes no representation or warranty
and assumes no responsibility with respect to the financial condition
of the Borrowers and their Subsidiaries or any other Person primarily
or secondarily liable in respect of any of the Obligations, or the
performance or observance by the Borrowers or any other Person
primarily or secondarily liable in respect of any of the Obligations of
any of their obligations under this Credit Agreement or any of the
other Loan Documents or any other instrument or document furnished
pursuant hereto or thereto;
(c) such assignee confirms that it has received a copy of this
Credit Agreement, together with copies of the most recent financial
statements referred to in Section 9.4 and Section 10.4 and such other
documents and information as it has deemed appropriate to make its own
credit analysis and decision to enter into such Assignment and
Acceptance;
(d) such assignee will, independently and without reliance
upon the assigning Lender, the Agent, the Canadian Agent or any other
Lender and based on such documents and information as it shall deem
appropriate at the time, continue to make its own credit decisions in
taking or not taking action under this Credit Agreement;
(e) such assignee represents and warrants that it is an
Eligible Assignee;
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(f) such assignee appoints and authorizes the Agent and the
Canadian Agent (in the case of Canadian Loans) to take such action as
agent on its behalf and to exercise such powers under this Credit
Agreement and the other Loan Documents as are delegated to the Agent
and/or the Canadian Agent by the terms hereof or thereof, together with
such powers as are reasonably incidental thereto;
(g) such assignee agrees that it will perform in accordance
with their terms all of the obligations that by the terms of this
Credit Agreement are required to be performed by it as a Lender;
(h) such assignee represents and warrants that it is legally
authorized to enter into such Assignment and Acceptance; and
(i) such assignee acknowledges that it has made arrangements
with the assigning Lender satisfactory to such assignee with respect to
its pro rata share of Letter of Credit Fees in respect of outstanding
Letters of Credit.
22.4. REGISTER. The Agent shall maintain a copy of each Assignment and
Acceptance delivered to it and a register or similar list (the "Register") for
the recordation of the names and addresses of the Lenders and the Commitment
Percentage of, and principal amount of the Loans owing to and Letter of Credit
Participations purchased by, the Lenders from time to time. The entries in the
Register shall be conclusive, in the absence of manifest error, and the
Borrowers, the Agent, the Canadian Agent and the Lenders may treat each Person
whose name is recorded in the Register as a Lender hereunder for all purposes of
this Credit Agreement. The Register shall be available for inspection by the
Borrowers and the Lenders at any reasonable time and from time to time upon
reasonable prior notice. Upon each such recordation, the assigning Lender agrees
to pay to the Agent a registration fee in the sum of $3,500, except in the case
of any such assignment being made by any Lender to any of its affiliates.
22.5. NEW NOTES. Upon its receipt of an Assignment and Acceptance
executed by the parties to such assignment, together with each Note subject to
such assignment, the Agent shall (i) record the information contained therein in
the Register, and (ii) give prompt notice thereof to the Borrowers, and the
Lenders (other than the assigning Lender). Within five (5) Business Days after
receipt of such notice, the Borrowers, at their own expense, shall, in respect
of U.S. Loans only, execute and deliver to the Agent, in exchange for each
surrendered Note, a new Note to the order of such Eligible Assignee in an amount
equal to the amount assumed by such Eligible Assignee pursuant to such
Assignment and Acceptance and, if the assigning Lender has retained some portion
of its obligations hereunder, a new Note to the order of the assigning Lender in
an amount equal to the amount retained by it hereunder. Such new Notes shall
provide that they are replacements for the surrendered Notes, shall be in an
aggregate principal amount equal to the aggregate principal amount of the
surrendered Notes, shall be dated the effective date of such Assignment and
Acceptance and shall otherwise be substantially in the form of the assigned
Notes. Within five (5) days of issuance of any new Notes pursuant to this
Section 22.5, the Borrowers shall deliver an opinion of counsel, addressed to
the Lenders, and the Agent, relating to the due authorization, execution and
delivery of such new Notes and the
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legality, validity and binding effect thereof, in form and substance
satisfactory to the Lenders. The surrendered Notes shall be canceled and
returned to the Borrowers.
22.6. PARTICIPATIONS. Each Lender may sell participations to one or
more banks or other entities in all or a portion of such Lender's rights and
obligations under this Credit Agreement and the other Loan Documents; provided
that (i) each such participation shall be in an amount of not less than
$1,000,000, (ii) any such sale or participation shall not affect the rights and
duties of the selling Lender hereunder to the Borrowers, (iii) such participants
shall not be entitled to the benefits of the yield protection and
indemnification provisions contained in Sections.7.3, 7.7, 7.8 and 7.11 hereof,
and (iv) the only rights granted to the participant pursuant to such
participation arrangements with respect to waivers, amendments or modifications
of the Loan Documents shall be the rights to approve waivers, amendments or
modifications that would reduce the principal of or the interest rate on any
Loans, extend the term or increase the amount of the Commitment of such Lender
as it relates to such participant, reduce the amount of any commitment fees or
Letter of Credit Fees to which such participant is entitled or extend any
regularly scheduled payment date for principal or interest.
22.7. DISCLOSURE. Each of the Borrowers agrees that in addition to
disclosures made in accordance with standard and customary banking practices,
any Lender may disclose information obtained by such Lender pursuant to this
Credit Agreement to assignees or participants and potential assignees or
participants hereunder; provided that such assignees or participants or
potential assignees or participants shall agree (a) to treat in confidence such
information unless such information otherwise becomes public knowledge, (b) not
to disclose such information to a third party, except as required by law or
legal process and (c) not to make use of such information for purposes of
transactions unrelated to such contemplated assignment or participation.
22.8. ASSIGNEE OR PARTICIPANT AFFILIATED WITH THE BORROWERS. If any
assignee Lender is an Affiliate of any Borrower, then any such assignee Lender
shall have no right to vote as a Lender hereunder or under any of the other Loan
Documents for purposes of granting consents or waivers or for purposes of
agreeing to amendments or other modifications to any of the Loan Documents or
for purposes of making requests to the Agent or the Canadian Agent pursuant to
Section 15.1 or Section 15.2, and the determination of the Majority Lenders
shall for all purposes of this Agreement and the other Loan Documents be made
without regard to such assignee Lender's interest in any of the Loans. If any
Lender sells a participating interest in any of the Loans or Reimbursement
Obligations to a participant, and such participant is a Borrower or an Affiliate
of a Borrower, then such transferor Lender shall promptly notify the Agent and
the Canadian Agent of the sale of such participation. A transferor Lender shall
have no right to vote as a Lender hereunder or under any of the other Loan
Documents for purposes of granting consents or waivers or for purposes of
agreeing to amendments or modifications to any of the Loan Documents or for
purposes of making requests to the Agent or the Canadian Agent pursuant to
Section 15.1 or Section 15.2 to the extent that such participation is
beneficially owned by a Borrower or any Affiliate of a Borrower, and the
determination of the Majority Lenders shall for all purposes of this Agreement
and the other Loan Documents be made without regard to the interest of such
transferor Lender in the Loans to the extent of such participation.
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22.9. MISCELLANEOUS ASSIGNMENT PROVISIONS. Any assigning Lender shall
retain its rights to be indemnified pursuant to Section 19 with respect to any
claims or actions arising prior to the date of such assignment. Anything
contained in this Section 22 to the contrary notwithstanding, any Lender may at
any time pledge all or any portion of its interest and rights under this Credit
Agreement (including all or any portion of its Notes) to any of the twelve
Federal Reserve Banks organized under Section 4 of the Federal Reserve Act, 12
U.S.C. Section 341. No such pledge or the enforcement thereof shall release the
pledgor Lender from its obligations hereunder or under any of the other Loan
Documents.
22.10. ASSIGNMENT BY BORROWERS. The Borrowers shall not assign or
transfer any of their rights or obligations under any of the Loan Documents
without the prior written consent of each of the Lenders.
23. NOTICES, ETC.
Except as otherwise expressly provided in this Credit Agreement, all
notices and other communications made or required to be given pursuant to this
Credit Agreement or the Notes or any Letter of Credit Applications shall be in
writing and shall be delivered in hand, mailed by United States or Canadian
registered or certified first class mail, postage prepaid, sent by overnight
courier, or sent by telegraph, telecopy, facsimile or telex and confirmed by
delivery via courier or postal service, addressed as follows:
(a) if to the Borrowers, at ▇▇▇ ▇. ▇▇▇▇▇▇ ▇▇▇▇ ▇▇▇▇, ▇▇▇▇▇▇,
▇▇▇▇▇ ▇▇▇▇▇-▇▇▇▇, Attention: ▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇▇▇▇, Senior Vice
President and Treasurer, with a copy to Zale General Counsel or at such
other address for notice as the Borrowers shall last have furnished in
writing to the Person giving the notice with a copy to ▇▇▇▇ ▇. ▇▇▇▇▇,
▇▇▇▇▇▇▇▇ ▇▇▇▇▇▇▇ LLP, ▇▇▇ ▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇▇, ▇.▇., ▇▇▇▇▇ ▇▇▇▇, ▇▇▇▇▇▇▇,
▇▇ ▇▇▇▇▇-▇▇▇▇;
(b) if to the Agent, at ▇▇▇ ▇▇▇▇▇▇▇ ▇▇▇▇▇▇, ▇▇▇▇▇▇,
▇▇▇▇▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇, ▇▇▇, Attention: ▇▇▇▇▇▇ ▇.▇. ▇▇▇▇▇, Vice President,
or such other address for notice as the Agent shall last have furnished
in writing to the Person giving the notice with a copy to ▇▇▇▇▇▇ ▇.▇.
▇▇▇▇▇, ▇▇., ▇▇▇▇▇▇▇ ▇▇▇▇ LLP, ▇▇▇ ▇▇▇▇▇▇▇ ▇▇▇▇▇▇, ▇▇▇▇▇▇, ▇▇ ▇▇▇▇▇;
(c) if to the Canadian Agent, at ▇▇▇ ▇▇▇ ▇▇▇▇▇▇, ▇▇▇ ▇▇▇▇▇,
▇▇▇▇▇▇▇, ▇▇▇▇▇▇▇ ▇▇▇ ▇▇▇ Attention: ▇▇▇▇▇▇▇ ▇▇▇▇▇▇▇, or such other
address for notice as the Canadian Agent shall last have furnished in
writing to the Person giving the notice; and
(d) if to any Lender, at such Lender's address set forth on
Schedule 1 hereto, or such other address for notice as such Lender
shall have last furnished in writing to the Person giving the notice.
Any such notice or demand shall be deemed to have been duly given or
made and to have become effective (i) if delivered by hand, overnight courier or
facsimile to a responsible officer of the party to which it is directed, at the
time of the receipt thereof by
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such officer or the sending of such facsimile and (ii) if sent by registered or
certified first-class mail, postage prepaid, on the third Business Day following
the mailing thereof.
24. GOVERNING LAW.
THIS CREDIT AGREEMENT AND, EXCEPT AS OTHERWISE SPECIFICALLY PROVIDED
THEREIN, EACH OF THE OTHER LOAN DOCUMENTS ARE CONTRACTS UNDER THE LAWS OF THE
COMMONWEALTH OF MASSACHUSETTS AND SHALL FOR ALL PURPOSES BE CONSTRUED IN
ACCORDANCE WITH AND GOVERNED BY THE LAWS OF SAID COMMONWEALTH OF MASSACHUSETTS
(EXCLUDING THE LAWS APPLICABLE TO CONFLICTS OR CHOICE OF LAW). EACH OF THE
BORROWERS AGREES THAT ANY SUIT FOR THE ENFORCEMENT OF THIS CREDIT AGREEMENT OR
ANY OF THE OTHER LOAN DOCUMENTS MAY BE BROUGHT IN THE COURTS OF THE COMMONWEALTH
OF MASSACHUSETTS OR ANY FEDERAL COURT SITTING THEREIN AND CONSENTS TO THE
NONEXCLUSIVE JURISDICTION OF SUCH COURT. EACH OF THE BORROWERS HEREBY WAIVES ANY
OBJECTION THAT IT MAY NOW OR HEREAFTER HAVE TO THE VENUE OF ANY SUCH SUIT OR ANY
SUCH COURT OR THAT SUCH SUIT IS BROUGHT IN AN INCONVENIENT COURT.
25. HEADINGS.
The captions in this Credit Agreement and in the table of contents
hereto are for convenience of reference only and shall not define or limit the
provisions hereof.
26. COUNTERPARTS.
This Credit Agreement and any amendment hereof may be executed in
several counterparts and by each party on a separate counterpart, each of which
when executed and delivered shall be an original, and all of which together
shall constitute one instrument. In proving this Credit Agreement it shall not
be necessary to produce or account for more than one such counterpart signed by
the party against whom enforcement is sought.
27. ENTIRE AGREEMENT, ETC.
The Loan Documents and any other documents executed in connection
herewith or therewith express the entire understanding of the parties with
respect to the transactions contemplated hereby. Neither this Credit Agreement
nor any term hereof may be changed, waived, discharged or terminated, except as
provided in Section 29.
28. WAIVER OF JURY TRIAL.
THE PARTIES HERETO HEREBY WAIVE THEIR RIGHT TO A JURY TRIAL WITH
RESPECT TO ANY ACTION OR CLAIM ARISING OUT OF ANY DISPUTE IN CONNECTION WITH
THIS CREDIT AGREEMENT, THE NOTES OR ANY OF THE OTHER LOAN DOCUMENTS, ANY RIGHTS
OR OBLIGATIONS HEREUNDER OR THEREUNDER OR THE PERFORMANCE OF SUCH RIGHTS AND
OBLIGATIONS. EXCEPT AS PROHIBITED BY LAW, EACH OF THE BORROWERS HEREBY WAIVES
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ANY RIGHT IT MAY HAVE TO CLAIM OR RECOVER IN ANY LITIGATION REFERRED TO IN THE
PRECEDING SENTENCE ANY SPECIAL, EXEMPLARY, PUNITIVE OR CONSEQUENTIAL DAMAGES OR
ANY DAMAGES OTHER THAN, OR IN ADDITION TO, ACTUAL DAMAGES. EACH OF THE BORROWERS
(A) CERTIFIES THAT NO REPRESENTATIVE, AGENT OR ATTORNEY OF ANY LENDER OR THE
AGENT OR CANADIAN AGENT HAS REPRESENTED, EXPRESSLY OR OTHERWISE, THAT SUCH
LENDER OR THE AGENT OR CANADIAN AGENT WOULD NOT, IN THE EVENT OF LITIGATION,
SEEK TO ENFORCE THE FOREGOING WAIVERS AND (B) ACKNOWLEDGES THAT THE AGENT, THE
CANADIAN AGENT AND THE LENDERS HAVE BEEN INDUCED TO ENTER INTO THIS CREDIT
AGREEMENT AND THE OTHER LOAN DOCUMENTS TO WHICH THEY ARE PARTIES BY, AMONG OTHER
THINGS, THE WAIVERS AND CERTIFICATIONS CONTAINED HEREIN.
29. CONSENTS, AMENDMENTS, WAIVERS, ETC.
Any consent or approval required or permitted by this Credit Agreement
to be given by all of the Lenders may be given, and any term of this Credit
Agreement, the other Loan Documents or any other instrument related hereto or
mentioned herein may be amended, and the performance or observance by the
Borrowers of any terms of this Credit Agreement, the other Loan Documents or
such other instrument or the continuance of any Default or Event of Default may
be waived (either generally or in a particular instance and either retroactively
or prospectively) with, but only with, the written consent of each of the
Borrowers and the written consent of the Majority Lenders. Notwithstanding the
foregoing, the rate of interest and dates for payment on the Loans (other than
interest accruing pursuant to Section 7.12 following the effective date of any
waiver by the Majority Lenders of the Default or Event of Default relating
thereto and except with respect to any automatic Performance Adjustments), the
definition of Maturity Date, all rates of interest (except with respect to any
automatic Performance Adjustments), the amount of the U.S. Commitments of the
U.S. Lenders (except as contemplated by Section 2.3 and 22.2), the amount of
Canadian Commitments of the Canadian Lenders (except as contemplated by Section
4.3 and 22.2) and, except with respect to any automatic Performance Adjustments,
the amount and dates for payment of commitment fees or Letter of Credit Fees
hereunder may not be changed without the written consent of each of the
Borrowers and the written consent of all of the Lenders affected thereby; the
definition of Majority Lenders may not be amended without the written consent of
all of the Lenders; this Section 29 and Sections.22.10 and 13 may not be amended
without the written consent of all of the Lenders; no Borrower may be released
from any joint and several obligations as a Borrower hereunder, and no Borrower
may be released from any Guaranteed Obligations hereunder, in each case without
the written consent of all of the Lenders; no other provision of this Credit
Agreement or the other Loan Documents specifically requiring the consent or
approval of each of the Lenders may be amended without the written consent of
each of the Lenders; and the amount of the Agent's fee or any Letter of Credit
Fees payable for the Agent's account and Section 17 may not be amended without
the written consent of the Agent. No waiver shall extend to or affect any
obligation not expressly waived or impair any right consequent thereon. No
course of dealing or delay or omission on the part of the Agent, Canadian Agent
or any Lender in exercising any right shall operate as a waiver thereof or
otherwise be prejudicial thereto.
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No notice to or demand upon the Borrowers shall entitle the Borrowers to other
or further notice or demand in similar or other circumstances.
30. SEVERABILITY.
The provisions of this Credit Agreement are severable and if any one
clause or provision hereof shall be held invalid or unenforceable in whole or in
part in any jurisdiction, then such invalidity or unenforceability shall affect
only such clause or provision, or part thereof, in such jurisdiction, and shall
not in any manner affect such clause or provision in any other jurisdiction, or
any other clause or provision of this Credit Agreement in any jurisdiction.
31. TRANSITIONAL ARRANGEMENTS.
31.1. PRIOR CREDIT AGREEMENT SUPERSEDED This Credit Agreement shall on
the Closing Date supersede the Prior Credit Agreement in its entirety, except as
provided in this Section 31. On the Closing Date, the rights and obligations of
the parties evidenced by the Prior Credit Agreement shall be evidenced by this
Credit Agreement and the other Loan Documents, the "Loans" as defined in the
Prior Credit Agreement shall be converted to U.S. Loans as defined herein. The
Lenders shall make such payments, if any, as may be required among them such
that their respective interests in the converted U.S. Loans hereunder are in
accordance with their respective U.S. Commitment Percentages.
31.2. RETURN AND CANCELLATION OF NOTES. As soon as reasonably
practicable after its receipt of its Notes hereunder on the Closing Date, the
Lenders will promptly return to the Borrowers, marked "Substituted" or
"Canceled," as the case may be, any promissory notes of the Borrowers held by
the Lenders pursuant to the Prior Credit Agreement.
31.3. INTEREST AND FEES UNDER PRIOR CREDIT AGREEMENT. All interest and
fees and expenses, if any, owing or accruing under or in respect of the Prior
Credit Agreement through the Closing Date shall be calculated as of the Closing
Date (prorated in the case of any fractional periods), and shall be paid on the
Closing Date.
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IN WITNESS WHEREOF, the undersigned have duly executed this Credit
Agreement as a sealed instrument as of the date first set forth above.
▇▇▇▇ CORPORATION
By:
--------------------------------------
Name: ▇▇▇ ▇▇▇▇
Title: Executive Vice President & Chief
Financial Officer
By:
--------------------------------------
Name: ▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇▇▇▇
Title: Senior Vice President &
Treasurer
▇▇▇▇ DELAWARE, INC.
By:
--------------------------------------
Name: ▇▇▇ ▇▇▇▇
Title: Executive Vice President & Chief
Financial Officer
By:
--------------------------------------
Name: ▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇▇▇▇
Title: Senior Vice President &
Treasurer
▇▇▇▇ CANADA CO.
By:
--------------------------------------
Name: ▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇▇▇▇
Title: Senior Vice President &
Treasurer
FLEET NATIONAL BANK, in its individual
capacity and as Agent
By:
--------------------------------------
Name: ▇▇▇▇▇▇ ▇.▇. ▇▇▇▇▇
Title: Vice President
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CANADIAN IMPERIAL BANK OF COMMERCE, in its
individual capacity and as Canadian Agent
By:
--------------------------------------
Name:
Title:
BANK ONE, NA, in its individual capacity
and as Syndication Agent
By:
--------------------------------------
Name: ▇▇▇▇ ▇▇▇▇▇▇
Title: Managing Director
FIRST UNION NATIONAL BANK
By:
--------------------------------------
Name:
Title:
THE BANK OF TOKYO-MITSUBISHI, LTD.
By:
--------------------------------------
Name:
Title:
THE BANK OF NEW YORK
By:
--------------------------------------
Name:
Title:
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HIBERNIA NATIONAL BANK
By:
--------------------------------------
Name:
Title:
STATE STREET BANK AND TRUST COMPANY
By:
--------------------------------------
Name: C. ▇▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇
Title: Loan Officer
COMERICA BANK
By:
--------------------------------------
Name:
Title:
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CIBC, INC.
By:
--------------------------------------
Name:
Title: