Exhibit 10.1
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CREDIT AGREEMENT
Dated as of May 31, 2000,
among
STONE CONTAINER CORPORATION,
ST. LAURENT PAPERBOARD INC.,
THE LENDERS NAMED HEREIN,
THE CHASE MANHATTAN BANK, as an Agent,
BANKERS TRUST COMPANY,
as Administrative Agent,
and
DEUTSCHE BANK CANADA
as Canadian Administrative Agent
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CHASE SECURITIES INC.,
as Syndication Agent, Co-Lead Arranger and Joint Book Manager,
DB ALEX. ▇▇▇▇▇ LLC,
as Co-Lead Arranger and Joint Book Manager,
and
THE BANK OF NOVA SCOTIA,
as Canadian Syndication Agent
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TABLE OF CONTENTS
Page
ARTICLE IDefinitions
SECTION 1.01. Defined Terms...................................................................... 2
SECTION 1.02. Terms Generally.................................................................... 32
SECTION 1.03. Classification of Loans and Borrowings............................................. 32
SECTION 1.04. Exchange Rate Calculations......................................................... 32
ARTICLE IIThe Credits
SECTION 2.01. Commitments and Loans.............................................................. 33
SECTION 2.02. Loans.............................................................................. 33
SECTION 2.03. Notice of Borrowings............................................................... 35
SECTION 2.04. Repayment of Loans; Evidence of Debt............................................... 36
SECTION 2.05. Fees............................................................................... 37
SECTION 2.06. Interest on Loans.................................................................. 38
SECTION 2.07. Default Interest................................................................... 39
SECTION 2.08. Alternate Rate of Interest......................................................... 39
SECTION 2.09. Termination and Reduction of Commitments........................................... 39
SECTION 2.10. Conversion and Continuation of Borrowings.......................................... 40
SECTION 2.11. Repayment of Term Borrowings....................................................... 42
SECTION 2.12. Optional Prepayments............................................................... 43
SECTION 2.13. Mandatory Prepayments.............................................................. 43
SECTION 2.14. Reserve Requirements; Change in Circumstances; Increased Costs..................... 47
SECTION 2.15. Change in Legality................................................................. 49
SECTION 2.16. Indemnity.......................................................................... 50
SECTION 2.17. Pro Rata Treatment................................................................. 51
SECTION 2.18. Sharing of Setoffs................................................................. 51
SECTION 2.19. Payments........................................................................... 52
SECTION 2.20. Taxes.............................................................................. 52
SECTION 2.21. Duty to Mitigate; Assignment of Commitments under Certain Circumstances............ 56
SECTION 2.22 Bankers' Acceptances............................................................... 57
SECTION 2.23. Pro Rata Treatment of Loans and Existing Stone Credit Agreement.................... 59
ARTICLE IIILetters of Credit...................................................................... 60
ARTICLE IVRepresentations and Warranties
SECTION 4.01. Organization; Powers............................................................... 64
SECTION 4.02. Authorization...................................................................... 65
SECTION 4.03. Enforceability..................................................................... 65
SECTION 4.04. Governmental Approvals............................................................. 65
SECTION 4.05. Financial Statements............................................................... 66
SECTION 4.06. No Material Adverse Change......................................................... 66
SECTION 4.07. Title to Properties; Possession Under Leases....................................... 66
SECTION 4.08. Subsidiaries....................................................................... 67
SECTION 4.09. Litigation; Compliance with Laws................................................... 67
SECTION 4.10. Agreements......................................................................... 67
SECTION 4.11. Federal Reserve Regulations........................................................ 67
SECTION 4.12. Investment Company Act; Public Utility Holding Company Act......................... 68
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SECTION 4.13. Tax Returns........................................................................ 68
SECTION 4.14. No Material Misstatements.......................................................... 68
SECTION 4.15. Employee Benefit Plans............................................................. 68
SECTION 4.16. Environmental and Safety Matters................................................... 69
SECTION 4.17. Solvency........................................................................... 71
SECTION 4.18. Security Documents................................................................. 71
SECTION 4.19. Labor Matters...................................................................... 73
SECTION 4.20. Location of Real Property.......................................................... 73
SECTION 4.21. Patents, Trademarks, etc........................................................... 73
SECTION 4.22. Survival of Warranties............................................................. 74
ARTICLE VConditions
SECTION 5.01. All Credit Events.................................................................. 74
SECTION 5.02. First Credit Event................................................................. 74
ARTICLE VIAffirmative Covenants
SECTION 6.01. Existence; Businesses and Properties............................................... 78
SECTION 6.02. Insurance.......................................................................... 78
SECTION 6.03. Obligations and Taxes.............................................................. 78
SECTION 6.04. Financial Statements, Reports, etc................................................. 79
SECTION 6.05. Litigation and Other Notices....................................................... 80
SECTION 6.06. Benefit Plans...................................................................... 81
SECTION 6.07. Maintaining Records; Access to Properties and Inspections.......................... 81
SECTION 6.08. Use of Proceeds.................................................................... 82
SECTION 6.09. Compliance with Law................................................................ 82
SECTION 6.10. Further Assurances................................................................. 82
SECTION 6.11. Material Contracts................................................................. 83
SECTION 6.12. Environmental Matters.............................................................. 83
SECTION 6.13 Surveys............................................................................. 84
ARTICLE VIINegative Covenants
SECTION 7.01. Indebtedness....................................................................... 84
SECTION 7.02. Liens.............................................................................. 87
SECTION 7.03. Sale/Leaseback Transactions........................................................ 88
SECTION 7.04. Investments, Loans and Advances.................................................... 88
SECTION 7.05. Mergers, Consolidations, Sales of Assets and Acquisitions.......................... 91
SECTION 7.06. Restricted Payments................................................................ 92
SECTION 7.07. Transactions with Stockholders and Affiliates...................................... 92
SECTION 7.08. Business........................................................................... 93
SECTION 7.09. Limitations on Debt Prepayments.................................................... 93
SECTION 7.10. Amendment of Certain Documents..................................................... 94
SECTION 7.11. Limitation on Dispositions of Stock of Subsidiaries................................ 94
SECTION 7.12. Restrictions on Ability of Subsidiaries to Pay Dividends........................... 95
SECTION 7.13. Capital Expenditures............................................................... 95
SECTION 7.14. Consolidated EBITDA................................................................ 95
SECTION 7.15. Interest Coverage Ratio............................................................ 96
SECTION 7.16. Disposition of Collateral and Other Assets......................................... 96
SECTION 7.17. Fiscal Year........................................................................ 96
ARTICLE VIIIEvents of Default..................................................................... 96
ARTICLE IXThe Agents, the Administrative Agents and the Facing Agent.............................. 101
ARTICLE XCollection Allocation Mechanism
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SECTION 10.01. Implementation of CAM............................................................. 104
SECTION 10.02. Letters of Credit................................................................. 104
SECTION 10.03. Conversion........................................................................ 106
ARTICLE XIMiscellaneous
SECTION 11.01. Notices........................................................................... 106
SECTION 11.02. Survival of Agreement............................................................. 107
SECTION 11.03. Binding Effect.................................................................... 107
SECTION 11.04. Successors and Assigns............................................................ 108
SECTION 11.05. Expenses; Indemnity............................................................... 111
SECTION 11.06. Right of Setoff................................................................... 112
SECTION 11.07. Applicable Law.................................................................... 112
SECTION 11.08. Waivers; Amendment................................................................ 112
SECTION 11.09. Release of Collateral............................................................. 114
SECTION 11.10. Interest Rate Limitation.......................................................... 114
SECTION 11.11. Entire Agreement.................................................................. 114
SECTION 11.12. Waiver of Jury Trial.............................................................. 115
SECTION 11.13. Severability...................................................................... 115
SECTION 11.14. Headings.......................................................................... 115
SECTION 11.15. Confidentiality................................................................... 115
SECTION 11.16. Jurisdiction; Consent to Service of Process....................................... 116
SECTION 11.17. Judgment Currency................................................................. 116
SECTION 11.18. Certain Relationships............................................................. 117
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SCHEDULES
Schedule 1.01(b) Guarantors....................................
Schedule 1.01(c) Material Subsidiaries.........................
Schedule 1.01(d) Mortgaged Properties..........................
Schedule 1.01(e) Mortgages.....................................
Schedule 1.01(f) Receivables Program Document..................
Schedule 1.01(g) Liability Management Transactions.............
Schedule 2.01 Commitments...................................
Schedule 4.07 Certain Title Matters.........................
Schedule 4.08 Subsidiaries..................................
Schedule 4.09 Litigation....................................
Schedule 4.16 Environmental.................................
Schedule 4.18(b) Filing Offices................................
Schedule 4.18(c) Mortgage Recording Offices....................
Schedule 4.19 Labor Matters.................................
Schedule 4.20 Locations of Real Properties..................
Schedule 6.13 Surveys.......................................
Schedule 7.01 Existing Indebtedness.........................
Schedule 7.02 Existing Liens................................
Schedule 7.04 Existing Investments..........................
Schedule 7.12 Certain Agreements............................
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EXHIBITS
Exhibit A Administrative Questionnaire
Exhibit B Form of Assignment and Acceptance
Exhibit C-1 Form of Canco Subsidiary Guarantee Agreement
Exhibit C-2 Form of Stone Guarantee Agreement
Exhibit C-3 Form of Stone Subsidiary Guarantee Agreement
Exhibit C-4 Maryland Subsidiary Guarantee Agreement
Exhibit D Form of Mortgage
Exhibit E-1 Form of Canadian Pledge Agreement
Exhibit E-2 Form of U.S. Pledge Agreement
Exhibit F-1 Form of Canadian Security Agreement
Exhibit F-2 Form of U.S. Security Agreement
Exhibit G-1 Form of Opinion of Winston & ▇▇▇▇▇▇
Exhibit G-2-A Form of Ontario Opinion of Stikeman Elliott
Exhibit G-2-B Form of Quebec Opinion of Stikeman Elliott
Exhibit G-2-C Form of Tax Opinion of Stikeman Elliott
Exhibit G-3 Form of Opinion of Local Counsel
Exhibit H Reorganization Agreement
Exhibit I-1 Form of Term Note
Exhibit I-2 Form of Revolving Note
CREDIT AGREEMENT dated as of May 31, 2000 (as
amended, restated, supplemented or otherwise modified from
time to time, this "Agreement"), among STONE CONTAINER
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CORPORATION, a Delaware corporation ("Stone"), ST. LAURENT
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PAPERBOARD INC., a corporation amalgamated under the Canada
Business Corporations Act and a wholly owned subsidiary of
Stone ("Canco" and, together with Stone, the "Borrowers"),
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the Lenders (as defined in Article I), THE CHASE MANHATTAN
BANK, a New York banking corporation ("Chase") as an Agent,
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BANKERS TRUST COMPANY, a New York banking corporation
("BTCo"), as administrative agent for the Lenders (the
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"Administrative Agent"), and as collateral agent for the
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Lenders (the "Collateral Agent"), the Facing Agent (as
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defined in Article I), and DEUTSCHE BANK CANADA, a
Chartered Bank, pursuant to Schedule II of the Bank Act, as
Canadian administrative agent (the "Canadian Administrative
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Agent") for the Revolving Lenders (as defined in Article
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I).
Pursuant to, or in connection with the transactions contemplated by, the
Amended and Restated Pre-Merger Agreement dated as of April 13, 2000 (the "Pre-
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Merger Agreement"), among Smurfit-Stone Container Corporation, a Delaware
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corporation ("SSCC"), Stone, 3038727 Canada Inc., a corporation existing under
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the laws of Canada, 3038727 Nova Scotia Company, an unlimited liability company
existing under the laws of the Province of Nova Scotia, Canada, and Canco, Stone
will acquire Canco through a series of transactions pursuant to which, among
other things, the existing shareholders of Canco will receive (a) cash
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consideration of U.S.$12.50 per share of common stock of Canco (such cash
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consideration aggregating approximately U.S.$625,000,000) (the "Cash
Consideration") and (b) 1/2 share of common stock of SSCC per share of common
stock of Canco.
The Borrowers have requested (a) the Tranche G Lenders (such term and each
other capitalized term used but not defined in this preamble having the meaning
assigned to it in Article I) to extend credit to Stone in the form of Tranche G
Loans in an initial aggregate principal amount of U.S.$450,000,000, (b) the
Tranche H Lenders to extend credit to Canco in the form of Tranche H Loans in an
initial aggregate principal amount of U.S.$500,000,000, (c) the Revolving
Lenders to extend credit to Canco in the form of Revolving Loans in aggregate
principal amount at any time outstanding not in excess of U.S.$100,000,000 (or
the Canadian Dollar Equivalent thereof) and (d) the Facing Agent to issue
Letters of Credit for the account of Canco in an aggregate principal amount at
any time outstanding not in excess of U.S.$50,000,000 (or the Canadian Dollar
Equivalent thereof).
The Lenders are willing to extend such credit to the Borrowers, and the
Facing Agent is willing to issue Letters of Credit for the account of Canco, in
each case on the terms and subject to the conditions set forth herein.
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Accordingly, the parties hereto agree as follows:
ARTICLE I
Definitions
SECTION 1.01. Defined Terms. As used in this Agreement, the following terms
shall have the meanings specified below:
"2849 Bond Pledge Agreement" shall mean the bond pledge agreement dated as
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of May 31, 2000, entered into between ▇▇▇▇-▇▇▇▇ ▇▇▇▇▇▇ Inc. and the Collateral
Agent, providing the terms pursuant to which the 2849 Bonds are to be held by
the Collateral Agent, in its capacity as collateral agent and depositary of the
2849 Bonds for the benefit of the Tranche H Lenders, the Revolving Lenders, the
Agents and the Facing Agent.
"2849 Bonds" shall mean any or all of the Bonds issued from time to
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time by ▇▇▇▇-▇▇▇▇ ▇▇▇▇▇▇ Inc. pursuant to the 2849 Hypothec.
"2849 Hypothec" shall mean the Indenture and Deed of Hypothec and Issue of
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Bonds executed on May 23, 2000, and entered into between 2849-8954 Quebec Inc.
and the Trustee, pursuant to the terms of which ▇▇▇▇-▇▇▇▇ ▇▇▇▇▇▇ Inc. has
created, issued and secured Bonds in the maximum aggregate amount of
Cdn$1,500,000,000.00.
"ABR", when used in reference to any Loan or Borrowing, refers to whether
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such Loan, or the Loans comprising such Borrowing, are bearing interest at a
rate determined by reference to the Alternate Base Rate.
"Acceptance Fee" shall mean a fee payable in Canadian Dollars by Canco to
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the Canadian Administrative Agent for the account of a Revolving Lender with
respect to the acceptance of a B/A or the making of a B/A Equivalent Loan on the
date of such acceptance or loan, calculated on the face amount of the B/A or the
B/A Equivalent Loan at the rate per annum applicable on such date as set forth
in the row labeled "Eurodollar Revolving/ B/A Spread" in the definition of the
term "Applicable Rate" set forth herein on the basis of the number of days in
the applicable Contract Period (including the date of acceptance and excluding
the date of maturity) and a year of 365 days (it being agreed that the rate per
annum applicable to the B/A Equivalent Loan is equivalent to the rate per annum
otherwise applicable to the Bankers' Acceptance which has been replaced by the
making of such B/A Equivalent Loan pursuant to Section 2.22).
"Acquired Indebtedness" is defined in Section 7.01(m).
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"Acquisition" shall mean the acquisition by Stone of Canco, pursuant to,
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and as described in, the Pre-Merger Agreement and the Reorganization Agreement.
3
"Adjusted LIBO Rate" shall mean, with respect to any Eurodollar Borrowing
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for any Interest Period, an interest rate per annum (rounded upwards, if
necessary, to the next 1/16 of 1%) equal to the product of (a) the LIBO Rate in
effect for such Interest Period and (b) Statutory Reserves. For purposes hereof,
the term "LIBO Rate" shall mean, with respect to any Eurodollar Borrowing for
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any Interest Period, the rate appearing on Page 3750 of the Dow ▇▇▇▇▇ Service
(or on any successor or substitute page of such Service, or any successor to or
substitute for such Service, providing rate quotations comparable to those
currently provided on such page of such Service, as determined by the
Administrative Agent from time to time for purposes of providing quotations of
interest rates applicable to U.S. Dollar deposits in the London interbank
market) at approximately 11:00 a.m., London time, two Business Days prior to the
commencement of such Interest Period, as the rate for dollar deposits with a
maturity comparable to such Interest Period. In the event that such rate is not
available at such time for any reason, then the "LIBO Rate" with respect to such
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Eurodollar Borrowing for such Interest Period shall be the average of the
respective rates per annum at which dollar deposits approximately equal in
principal amount to the Administrative Agent's portion of such Eurodollar
Borrowing and for a maturity comparable to such Interest Period are offered to
the principal London office of the Administrative Agent in immediately available
funds in the London interbank market at approximately 10:00 a.m., Standard Time,
two Business Days prior to the commencement of such Interest Period.
"Administrative Agent" is defined in the preamble to this Agreement;
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provided that, unless the context otherwise requires, when used in respect of
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payments and notices pertaining to Revolving Loans and Letters of Credit, the
term "Administrative Agent" shall mean the Canadian Administrative Agent.
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"Administrative Questionnaire" shall mean an Administrative Questionnaire
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in the form of Exhibit A, or any other form supplied from time to time by the
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Administrative Agent.
"Affiliate" shall mean, when used with respect to a specified Person,
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another Person that directly, or indirectly through one or more intermediaries,
Controls or is Controlled by or is under common Control with the Person
specified. For purposes of this definition, neither any Lender nor any Affiliate
of a Lender shall be deemed to be an Affiliate of either Borrower or any of the
Subsidiaries solely by reason of its ownership of or right to vote any
Indebtedness of the Borrowers or any of the Subsidiaries.
"Agents" shall mean Chase, BTCo and the Canadian Administrative Agent.
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"Agreement" shall mean this Credit Agreement.
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"Alternate Base Rate" shall mean, for any day, a rate per annum (rounded
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upwards, if necessary, to the next 1/16 of 1%) equal to the greater of (a) the
Prime Rate (or, with respect to any ABR Revolving Loan, the U.S. Base Rate) in
effect on such day and (b) the Federal Funds Effective Rate in effect on such
day plus 0.50%. Any change in the Alternate Base Rate due to a change in the
----
Prime Rate, the U.S. Base Rate or the Federal Funds Effective Rate shall be
effective on the effective
4
date of such change in the Prime Rate, the U.S. Base Rate or the Federal Funds
Effective Rate, respectively.
"Applicable Percentage" of any Revolving Lender shall mean the percentage
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of the aggregate Revolving Credit Commitments represented by such Revolving
Lender's Revolving Credit Commitment. If the Revolving Credit Commitments shall
have terminated or expired, the Applicable Percentages shall be determined based
upon the Revolving Credit Commitments most recently in effect, giving effect to
any assignments.
"Applicable Rate" shall mean, for any day, (a) with respect to any (i)
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Eurodollar Term Loan or (ii) ABR Term Loan, as the case may be, the applicable
percentage set forth below under the caption (A) "Eurodollar Term Loan Spread"
or (B) "ABR Term Loan Spread", as the case may be, based upon the Consolidated
Leverage Ratio as of the relevant date of determination:
Term Loans
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Consolidated
Leverage Ratio Eurodollar Term Loan Spread ABR Term Loan Spread
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Greater than or equal to 3.00 to 1.00 3.50% 2.50%
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Greater than or equal to 2.00 to 1.00 but 3.25% 2.25%
less than 3.00 to 1.00
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Less than 2.00 to 1.00 3.00% 2.00%
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and (b) with respect to any (i) Eurodollar Revolving Loan or B/A
Loan, (ii) ABR Revolving Loan or Canadian Prime Rate Loan or (iii)
Commitment Fee in respect of unused Commitments, as the case may be,
the applicable percentage set forth below under the caption (A)
"Eurodollar Revolving/B/A Spread", (B) "ABR Revolving/ Canadian Prime
Rate Spread" and (C) "Commitment Fee", as the case may be, based upon
the Consolidated Leverage Ratio as of the relevant date of
determination:
Revolving Loans and Revolving Commitments
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ABR
Eurodollar Revolving/
Consolidated Revolving/ Canadian Commitment Fee
Leverage Ratio B/A Spread Prime Rate
Spread
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5
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Greater than or equal to 4.00 to 1.00 3.00% 2.00% 0.500%
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Greater than or equal to 3.50 to 1.00 but less 2.75% 1.75% 0.500%
than 4.00 to 1.00
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Greater than or equal to 3.00 to 1.00 but less 2.50% 1.50% 0.500%
than 3.50 to 1.00
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Greater than or equal to 2.50 to 1.00 but less 2.25% 1.25% 0.375%
than 3.00 to 1.00
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Less than 2.50 to 1.00 2.00% 1.00% 0.375%
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Each change in the Applicable Rate resulting from a change in the Consolidated
Leverage Ratio shall be effective with respect to all Loans, Commitments and
Letters of Credit on the date of delivery to the Administrative Agent of the
financial statements and certificates required by Section 6.04(a) or (b) and
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(c), respectively, based upon the Consolidated Leverage Ratio as of the end of
---
the most recent fiscal quarter included in such financial statements so
delivered, and shall remain in effect until the date immediately preceding the
next date of delivery of such financial statements and certificates indicating
another such change. Notwithstanding the foregoing, (x) until delivery to the
Administrative Agent of the financial statements and certificates required by
Sections 6.04(b) and (c), respectively for the period ending March 31, 2001, the
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Consolidated Leverage Ratio shall be deemed to be not less than 4.00 to 1.00 for
purposes of determining the Applicable Rate and (y) at any time after the
occurrence and during the continuance of an Event of Default, the Consolidated
Leverage Ratio shall be deemed greater than or equal to 4.00 to 1.00 for
purposes of determining the Applicable Rate.
"Asset Sale" shall mean the sale, transfer or other disposition (including
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any casualty or condemnation) by either Borrower or any Subsidiary to any Person
other than a wholly owned Subsidiary of (i) any capital stock in any Person
(excluding capital stock in Stone issued or otherwise transferred to SSCC), (ii)
substantially all the assets of any geographic or other division or line of
business of such Borrower or any of the Subsidiaries or (iii) any Real Property
or a portion of any Real Property or any other asset or assets (excluding any
assets manufactured, constructed or otherwise produced or purchased for sale to
others in the ordinary course of business, the sale or liquidation of any
Permitted Investments and any Program Receivables) of such Borrower or any
Subsidiary, provided that (i) any asset sale or series of related asset sales
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described in clause (iii) above having a value not in excess of $2,000,000 shall
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not be deemed an "Asset Sale" for purposes of this Agreement and (ii) the sale
of assets (other than Collateral) securing any Indebtedness permitted hereunder
(other than the Loans) shall not be deemed to be an "Asset Sale" unless such
Indebtedness shall be repaid, redeemed or repurchased in full with the proceeds
of such Asset Sale (or any other payment made contemporaneously therewith).
"Assignment and Acceptance" shall mean an assignment and acceptance entered
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into by a Lender and an assignee and, to the extent required by Section
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11.04(b), approved by the Borrowers,
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an Agent and the Facing Agent, in the form of Exhibit B or such other form as
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shall be approved by the Administrative Agent.
"B/A Equivalent Loan" has the meaning specified in Section 2.22.
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"B/A Loan" shall mean a Borrowing comprised of one or more Bankers'
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Acceptances or, as applicable, B/A Equivalent Loans. For greater certainty, all
provisions of this Agreement which are applicable to Bankers' Acceptances are
also applicable, mutatis mutandis, to B/A Equivalent Loans.
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"Bankers' Acceptance" and "B/A" shall mean a non-interest bearing
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instrument denominated in Canadian Dollars, drawn by Canco, and accepted by a
Revolving Lender in accordance with this Agreement, and shall include a
depository note within the meaning of the Depository Bills and Notes Act
(Canada) and a ▇▇▇▇ of exchange within the meaning of the Bills of Exchange Act
(Canada).
"Board" shall mean the Board of Governors of the Federal Reserve System of
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the United States.
"Bondholders" shall mean any or all holders of the Bonds.
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"Bond Pledge Agreements" shall mean, collectively, the Canco Bond Pledge
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Agreement, the Francobec Bond Pledge Agreement and the ▇▇▇▇ ▇▇▇▇ ▇▇▇▇▇▇
▇▇▇▇▇▇▇▇▇.
"Bonds" shall mean any or all of the Canco Bonds, the Francobec Bonds or
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the 2849 Bonds.
"Borrowers" is defined in the preamble to this Agreement.
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"Borrowing" shall mean a group of Loans of a single Type made, converted or
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continued by the Lenders on a single date and as to which a single Interest
Period is in effect.
"BTCo" is defined in the preamble to this Agreement. Any reference to
----
"BTCo, as Administrative Agent" or "BTCo, as Collateral Agent" herein shall be
deemed a reference to BTCo in its capacity as Administrative Agent or Collateral
Agent, respectively, hereunder unless and until such time that a replacement
Administrative Agent or Collateral Agent, respectively, is named pursuant to the
provisions of Article IX.
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"Business Day" shall mean any day (other than a Saturday, Sunday or legal
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holiday in the State of New York) on which banks are open for business in New
York City and Chicago; provided, however, that (a) when used in connection with
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a Eurodollar Loan or Eurodollar Borrowing, the term "Business Day" shall also
exclude any day on which banks are not open for dealings in dollar deposits in
the London interbank market, and (b) when used in connection with a Borrowing by
Canco, a Borrowing denominated in Canadian Dollars or a Letter of Credit, the
term "Business Day" shall also exclude any day on which banks are not open for
business in Toronto or Montreal.
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"Calculation Date" shall mean (a) the last Business Day of each month, (b)
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the date of each notice of borrowing and (c) the Business Day preceding the
issuance, amendment, extension or renewal of each Letter of Credit denominated
in Canadian Dollars.
"CAM" shall mean the mechanism for the allocation and exchange of interests
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in the Credit Facilities and collections thereunder established under Article X.
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"CAM Exchange" shall mean the exchange of the Lenders' interests provided
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for in Section 10.01.
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"CAM Exchange Date" shall mean the first date after the Closing Date on
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which there shall occur (a) any event described in paragraph (g) or (h) of
Article VIII with respect to either Borrower or (b) an acceleration of the
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maturity of Loans pursuant to Article VIII.
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"CAM Percentage" shall mean, as to each Lender, a fraction, expressed as a
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decimal, of which (a) the numerator shall be the sum of (i) the aggregate
Designated Obligations owed to such Lender and (ii) the L/C Exposure, if any, of
such Lender, in each case immediately prior to the CAM Exchange Date, and (b)
the denominator shall be the sum of (i) the aggregate Designated Obligations
owed to all the Lenders and (ii) the aggregate L/C Exposure of all the Lenders,
in each case immediately prior to such CAM Exchange Date. For purposes of
computing each Lender's CAM Percentage, all Designated Obligations which shall
be denominated in Canadian Dollars shall be translated into U.S. Dollars at the
Exchange Rate in effect on the CAM Exchange Date.
"Cameo" shall mean Cameo Container Corporation, an Illinois corporation.
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"Cameo Note" shall mean a promissory note in the principal amount up to
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$50,000,000 issued by Cameo in favor of Stone.
"Canadian Administrative Agent" is defined in the preamble to this
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Agreement.
"Canadian Amalgamations" shall mean the amalgamations to be consummated
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pursuant to Sections 2.2(i)(iii) and 2.3(d)(i) and (iv) of the Reorganization
-------------------- --------- ----
Agreement, including the amalgamation of Canco and Stone Container (Canada) Inc.
"Canadian Benefit Plans" shall mean all employee benefit plans of any
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nature or kind whatsoever that are not Canadian Pension Plans and are maintained
or contributed to by Canco or any of its Subsidiaries.
"Canadian Dollars" and "Cdn.$" shall mean lawful currency of Canada.
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"Canadian Dollar Equivalent" shall mean, on any date of determination, with
--------------------------
respect to any amount in U.S. Dollars, the equivalent in Canadian Dollars of
such amount determined by the Administrative Agent using the Exchange Rate then
in effect.
8
"Canadian GAAP" shall mean generally accepted accounting principles in
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Canada, as recommended from time to time by the Canadian Institute of Chartered
Accountants, applied on a consistent basis.
"Canadian Pension Plans" shall mean each plan which is considered to be a
----------------------
pension plan for the purposes of any applicable pension benefits standards
statute and/or regulation in Canada established, maintained or contributed to by
Canco or any of its Subsidiaries for its employees or former employees.
"Canadian Pledge Agreements" shall mean (a) the Pledge Agreement dated May
--------------------------
31, 2000, substantially in the form of Exhibit E-1, between Canco and BTCo, as
-----------
Collateral Agent; and (b) any other pledge agreement pursuant to which Canco or
any of the Canadian Subsidiaries pledges shares of capital stock owned by it to
BTCo, as Collateral Agent, as security for all or any portion of the Obligations
of Canco.
"Canadian Prime Rate" shall mean, for each day in any period, a fluctuating
-------------------
interest rate per annum as shall be in effect from time to time, which rate per
annum shall at all times for such day be equal to the higher of (a) the annual
rate of interest announced publicly by the Canadian Administrative Agent and in
effect as its prime rate at its principal office in Toronto, Ontario on such day
for determining interest rates on Canadian Dollar-denominated commercial loans
made in Canada and (b) 0.75% per annum above the CDOR Rate in effect on such
date.
"Canadian Security Agreement" shall mean (i) the Canadian Security
---------------------------
Agreement in substantially the form of Exhibit F-1 dated as of the date hereof
-----------
between Canco and certain of the Canadian Subsidiaries, as grantors, and BTCo,
as Collateral Agent, and (ii) any other security agreements executed by Canco or
any Canadian Subsidiary to secure all or any portion of the Obligations of Canco
after the Closing Date.
"Canadian Subsidiaries" shall mean the Subsidiaries organized under the
---------------------
laws of Canada or any province or other political subdivision thereof.
"Canco" is defined in the preamble to this Agreement. Upon consummation of
-----
the Canadian Amalgamations, Canco shall mean Smurfit-Stone Container Canada
Inc., a corporation amalgamated pursuant to the Canada Business Corporations
Act. The Agents and the Lenders acknowledge and agree that Canco may in the
future be continued as a corporation under the laws of New Brunswick.
"Canco Bond Pledge Agreement" shall mean the bond pledge agreement dated as
---------------------------
of May 31, 2000, entered into between Canco and the Collateral Agent, providing
the terms pursuant to which the Canco Bonds are to be held by the Collateral
Agent, in its capacity as collateral agent and depositary of the Canco Bonds for
the benefit of the Tranche H Lenders, the Revolving Lenders, the Agents and the
Facing Agent.
"Canco Bonds" shall mean any or all of the Bonds issued from time to time
-----------
by Canco pursuant to the Canco Hypothec.
9
"Canco Credit Parties" shall mean Canco and its Subsidiaries.
--------------------
"Canco Hypothec" shall mean the Indenture and Deed of Hypothec and Issue of
--------------
Bonds executed on May 23, 2000, and entered into between Canco and the Trustee,
pursuant to the terms of which Canco has created, issued and secured Bonds in
the maximum aggregate amount of Cdn$1,500,000,000.00.
"Canco Subsidiary Guarantees" shall mean the guarantee agreements dated as
---------------------------
of the date hereof substantially in the form of Exhibit C-1 in favor of BTCo, as
-----------
Collateral Agent, by each wholly owned Subsidiary of Canco.
"Cash Consideration" is defined in the preamble to this Agreement.
------------------
"Capital Lease" is defined in the definition of the term "Capital Lease
-------------
Obligations".
"Capital Lease Obligations" of any Person shall mean the obligations of
-------------------------
such Person to pay rent or other amounts under any lease of (or other
arrangement conveying the right to use) real or personal property, or a
combination thereof (each, a "Capital Lease"), which obligations are required to
-------------
be classified and accounted for as capital leases on a balance sheet of such
Person under U.S. GAAP, and, for the purposes of this Agreement, the amount of
such obligations at any time shall be the capitalized amount thereof at such
time determined in accordance with U.S. GAAP.
"Cash Proceeds" shall mean, with respect to any Asset Sale, cash, cash
-------------
equivalents or marketable securities received from such Asset Sale, including
any insurance or condemnation proceeds and proceeds received by way of deferred
payment pursuant to a note receivable or otherwise (other than the portion of
such deferred payment constituting interest, which shall be deemed not to
constitute Cash Proceeds).
"CDOR Rate" shall mean, for each day in any period, the annual rate of
---------
interest that is the rate based on an average rate applicable to Canadian Dollar
bankers' acceptances for a term equal to the term of the relevant Contract
Period (or for a term of 30 days for purposes of determining the Canadian Prime
Rate) appearing on the Reuters Screen CDOR Page at approximately 10:00 a.m.
(Standard Time), on such date, or if such date is not a Business Day, on the
immediately preceding Business Day, provided that if such rate does not appear
--------
on the Reuters Screen CDOR Page on such date as contemplated, then the CDOR Rate
on such date shall be the arithmetic average of the Discount Rate quoted by each
Schedule I Reference Bank (determined by the Canadian Administrative Agent as of
10:00 a.m. Standard Time on such date) which would be applicable to Canadian
Dollar bankers' acceptances quoted by the banks listed in Schedule I of the Bank
Act (Canada) as of 10:00 a.m. (Standard Time) on such date or, if such date is
not a Business Day, on the immediately preceding Business Day.
"CERCLA" is defined in Section 4.16(b).
------ ---------------
10
A "Change in Control" shall be deemed to have occurred if (a) JSG and its
-----------------
Affiliates shall cease to own or control shares representing at least 27-1/2% of
the aggregate ordinary voting power represented by the issued and outstanding
capital stock of SSCC; (b) any person or group (within the meaning of Rule 13d-5
of the Securities and Exchange Act of 1934, as in effect on the Closing Date)
other than JSG and its Affiliates shall own, directly or indirectly,
beneficially or of record, shares representing more than 20% of the aggregate
ordinary voting power represented by the issued and outstanding capital stock of
SSCC; (c) SSCC shall cease to own, directly or indirectly, beneficially and of
record, 100% of the issued and outstanding capital stock of Stone, other than
the Series E Preferred Stock; or (d) Stone shall cease to own or control,
directly or indirectly, shares representing 100% of the aggregate ordinary
voting power represented by the issued and outstanding capital stock of Canco.
"Change of Law" is defined in Section 2.20(f).
------------- ---------------
"Charges" is defined in Section 11.10.
------- -------------
"Chase" is defined in the preamble to this Agreement.
-----
"Class", when used in reference to any Loan or Borrowing, refers to whether
-----
such Loan, or the Loans comprising such Borrowing, are Revolving Loans, Tranche
G Loans or Tranche H Loans, and, when used in reference to any Commitment,
refers to whether such Commitment is a Revolving Credit Commitment or Term Loan
Commitment.
"Closing Date" shall mean May 31, 2000.
------------
"Cluster Expenditures" shall mean capital expenditures that are mandated
--------------------
pursuant to, or made to comply with, the final adopted version, if any, of the
proposed rules promulgated by the Environmental Protection Agency, 58 Fed. Reg.
66078 (Dec. 17, 1993) with respect to "Effluent Limitations Guidelines,
Pretreatment Standards, and New Source Performance Standards: Pulp, Paper, and
Paperboard Category" or "National Emission Standards for Hazardous Air
Pollutants for Source Category: Pulp and Paper Production".
"Code" shall mean the Internal Revenue Code of 1986, or any successor
----
statute thereto, as the same may be amended from time to time.
"Collateral" shall mean all the "Collateral" as defined in any Security
----------
Document and shall also include the Mortgaged Properties.
"Collateral Agent" is defined in the preamble to this Agreement.
----------------
"Commitment" shall mean, with respect to each Lender, such Lender's
----------
Revolving Credit Commitment and Term Loan Commitments, and "Commitments" shall
mean, collectively, the Commitments of all the Lenders.
11
"Commitment Fee" is defined in Section 2.05(a).
-------------- ---------------
"Confidential Information Memorandum" shall mean the Confidential
-----------------------------------
Information Memorandum of SSCC dated March 2000, as supplemented by the letter
to Lenders, dated May 2, 2000.
"Consolidated Capital Expenditures" shall mean, for any period, all amounts
---------------------------------
that would be included as additions to property, plant and equipment and other
capital expenditures on a consolidated statement of cash flows for Stone and its
Subsidiaries during such period in accordance with U.S. GAAP (excluding
capitalized interest but including the amount of assets leased under any Capital
Lease); provided, however, that in no event shall Consolidated Capital
-------- -------
Expenditures include amounts (i) expended (in compliance with the provisions of
any Mortgage, if applicable) in the replacement, repair or reconstruction of any
fixed or capital asset which was destroyed, damaged or condemned, in whole or in
part, to the extent insurance or condemnation proceeds are receivable or have
been received by Stone or any of its Subsidiaries in respect of such
destruction, damage or condemnation and (ii) expended in the replacement of any
fixed or capital asset securing the First Mortgage Notes within the time
permitted for redeployment of the proceeds of the replaced fixed or capital
asset pursuant to Section 1015 of the indenture for the First Mortgage Notes, to
the extent of any cash or cash equivalent proceeds received by Stone or any of
its Subsidiaries in connection with such sale or other disposition of the fixed
or capital asset replaced.
"Consolidated Current Assets" shall mean, as at any date of determination,
---------------------------
the total assets (other than cash and cash equivalents) of Stone and its
Subsidiaries on a consolidated basis that may properly be classified as current
assets in conformity with U.S. GAAP.
"Consolidated Current Liabilities" shall mean, as at any date of
--------------------------------
determination, the total liabilities of Stone and its Subsidiaries on a
consolidated basis that may properly be classified as current liabilities in
conformity with U.S. GAAP, provided that the current maturities of long-term
--------
Indebtedness for money borrowed of Stone and its Subsidiaries, any Indebtedness
permitted under Section 7.01 that is classified as a current liability in
------------
conformity with U.S. GAAP and any taxes payable solely as a result of Asset
Sales shall be excluded from the definition of Consolidated Current Liabilities.
"Consolidated EBITDA" for any period shall mean (a) the sum of (i)
-------------------
Consolidated Net Income for such period, (ii) all Federal, state, local and
foreign taxes deducted in determining such Consolidated Net Income, (iii)
Consolidated Interest Expense deducted in determining such Consolidated Net
Income and (iv) depreciation, depletion, amortization of intangibles and other
non-cash charges or non-cash losses deducted in determining such Consolidated
Net Income minus (b) any non-cash income or non-cash gains included in
-----
determining such Consolidated Net Income. For the purposes of determining
compliance with Section 7.14 and determining, on any date, the Consolidated
------------
Leverage Ratio, Consolidated EBITDA shall be calculated as if the Acquisition
had occurred on the first day of such period.
12
"Consolidated Interest Expense" shall mean, for any period, the interest
-----------------------------
expense (net of interest income on Permitted Investments) of Stone and its
Subsidiaries for such period determined on a consolidated basis in accordance
with U.S. GAAP, excluding any fees and expenses payable or amortized during such
period by Stone and its consolidated Subsidiaries in connection with the
amortization of deferred debt issuance costs. For purposes of the foregoing,
interest expense shall be determined after giving effect to any net payments
made or received by Stone and its consolidated Subsidiaries with respect to Rate
Protection Agreements.
"Consolidated Leverage Ratio" shall mean, on any date of determination, the
---------------------------
ratio obtained by dividing (a) Indebtedness of Stone and its consolidated
--------
Subsidiaries on such date by (b) Consolidated EBITDA for the period of four
consecutive fiscal quarters ending on or immediately prior to such date.
"Consolidated Net Income" shall mean, for any period, the net income (or
-----------------------
loss) of Stone and its Subsidiaries on a consolidated basis for such period
taken as a single accounting period determined in conformity with U.S. GAAP,
provided that there shall be excluded from such calculation (i) the net income
--------
(or loss) of any Person acquired in a pooling of interests transaction for any
period prior to the date of such acquisition and (ii) the net gains (or losses)
associated with the sale of any asset not in the ordinary course of business.
"Contract Period" shall mean the term of a B/A Loan selected by Canco in
---------------
accordance with Section 2.22 commencing on the date of such B/A Loan and
expiring on a Business Day which shall be either 30 days, 60 days, 90 days or
180 days thereafter, provided that (a) subject to clause (b) below, each such
--------
period shall be subject to such extensions or reductions as may be determined by
the Canadian Administrative Agent to ensure that each Contract Period shall
expire on a Business Day, and (b) no Contract Period shall extend beyond the
Revolving Credit Maturity Date.
"Control" of a Person shall mean the possession, directly or indirectly, of
-------
the power to direct or cause the direction of the management or policies of such
Person, whether through the ownership of voting securities, by contract or
otherwise, and the terms "Controlling" and "Controlled" shall have meanings
----------- ----------
correlative thereto.
"Credit Event" is defined in Article V.
------------ ---------
"Credit Facility" shall mean a Class of Commitments and extensions of
---------------
credit thereunder. For purposes hereof, each of the following comprises a
separate Credit Facility: (a) the Tranche G Loans, (b) the Tranche H Loans and
(c) the Revolving Loans.
"Currency Agreement" shall mean any foreign exchange contract, currency
------------------
swap agreement or other similar agreement or arrangement entered into in the
ordinary course of business by Stone or any Subsidiary designed to protect the
Borrowers or any of their Subsidiaries against fluctuations in currency values.
13
"Default" shall mean any event or condition that upon notice, lapse of time
-------
or both would constitute an Event of Default.
"Default Rate" is defined in Section 2.07.
------------ ------------
"Designated Obligations" shall mean all Obligations of the Loan Parties in
----------------------
respect of (a) principal of and interest on the Loans (including B/A's, B/A
Equivalent Loans and Acceptance Fees with respect thereto) and (b) Fees, whether
or not the same shall at the time of any determination be due and payable under
the terms of the Loan Documents.
"Discount Proceeds" shall mean, for any B/A (or, as applicable, any B/A
-----------------
Equivalent Loan), an amount (rounded to the nearest whole cent, and with one-
half of one cent being rounded upwards) calculated on the applicable date of the
Revolving Credit Borrowing of which such B/A or B/A Equivalent Loan is a part or
any rollover date for such Revolving Credit Borrowing by multiplying:
(a) the face amount of the B/A (or, as applicable, the B/A
Equivalent Loan); by
(b) the quotient of one divided by the sum of one plus the product
of:
(i) the Discount Rate (expressed as a decimal) applicable to
such B/A (or as applicable, such B/A Equivalent Loan),
and
(ii) a fraction, the numerator of which is the Contract Period
of the B/A (or, as applicable, the B/A Equivalent Loan)
and the denominator of which is 365 days,
with such quotient being rounded up or down to the fifth decimal
place, and .000005 being rounded up.
"Discount Rate" shall mean:
-------------
(a) with respect to any Revolving Lender that is a Schedule I
Bank, as applicable to a B/A being purchased by such Lender on any day, the
CDOR Rate; and
(b) with respect to any Revolving Lender that is not a Schedule
I Bank, as applicable to a B/A being purchased by such Lender on any day,
the lesser of (A) the CDOR Rate plus 10 basis points (0.10%), and (B) the
average (as determined by the Canadian Administrative Agent in good faith)
of the respective percentage discount rates (expressed to two decimal
places and rounded upward, if not in an increment of 1/100th of 1%, to the
nearest 0.01%) quoted by the Schedule II Reference Banks as the percentage
discount rates at which the Schedule II Reference Banks would, in
accordance with their normal market practices, at or about 10:00 a.m.
(Standard Time) on such date, be prepared to purchase bankers' acceptances
accepted by the Schedule II Reference Banks having a face amount and term
comparable to the face amount and term of such B/A.
14
"Domestic Subsidiary" shall mean any Subsidiary organized under the
-------------------
laws of the United States or any political subdivision thereof.
"Environmental Laws" shall mean all current and future federal, state,
------------------
provincial, local and foreign laws, rules or regulations, codes, ordinances,
orders, decrees, judgments or injunctions issued, promulgated, approved or
entered thereunder or other requirements of Governmental Authorities or the
common law, relating to health, safety, or pollution or protection of the
environment, including laws relating to emissions, discharges, releases or
threatened releases of pollutants, contaminants, chemicals or industrial, toxic
or hazardous substances, or wastes into the environment (including ambient air,
surface water, groundwater, land surface or subsurface strata) or otherwise
relating to the manufacture, processing, distribution, use, generation,
treatment, storage, disposal, transport or handling of pollutants, contaminants,
chemicals, or industrial, toxic or hazardous substances, or wastes, or
underground storage tanks and emissions therefrom.
"ERISA" shall mean the Employee Retirement Income Security Act of 1974,
-----
or any successor statute, as the same may be amended from time to time.
"ERISA Affiliate" shall mean any trade or business (whether or not
---------------
incorporated) that (a) is a member of a group of which either Borrower is a
member and (b) is treated as a single employer under Section 414 of the Code.
"Eurodollar", when used in reference to any Loan or Borrowing, refers
----------
to whether such Loan, or the Loans comprising such Borrowing, are bearing
interest at a rate determined by reference to the Adjusted LIBO Rate.
"Event of Default" shall have the meaning assigned to such term in
----------------
Article VIII.
------------
"Event of Failure" shall have the meaning assigned to such term in
----------------
Section 2.13(b).
---------------
"Excess Cash Flow" shall mean, for any period, (a) the sum, without
----------------
duplication, of (i) Consolidated Net Income during such period, (ii) the amount
of depreciation, depletion, amortization of intangibles, deferred taxes,
accreted and zero coupon bond interest and other non-cash expenses, losses or
other charges that, pursuant to U.S. GAAP, were deducted in determining such
Consolidated Net Income, (iii) the proceeds of any Capital Leases of Stone and
its Subsidiaries on a consolidated basis, (iv) reductions, other than reductions
attributable solely to Asset Sales, to working capital for such period (i.e.,
----
the decrease in Consolidated Current Assets minus Consolidated Current
-----
Liabilities from the beginning to the end of such period) and (v) Indebtedness
of Stone and its consolidated Subsidiaries created, incurred or assumed in
respect of the purchase or construction of property minus (b) the sum, without
-----
duplication, of (i) the amount of all non-cash gains, income or other credits
included in determining Consolidated Net Income, (ii) additions to working
capital for such period (i.e., the increase in Consolidated Current Assets minus
---- -----
Consolidated Current Liabilities from the beginning to the end of such period),
(iii) the Term Loan Repayment Amounts paid during such period, (iv) optional
prepayments of Term Loans described in Section 2.12(b) during
---------------
15
such period, (v) scheduled and optional payments or prepayments of the principal
amount of permitted Indebtedness other than the Loans, but only to the extent
that such payments or prepayments cannot by their terms be reborrowed or redrawn
and do not occur in connection with a refinancing of all or any portion of such
permitted Indebtedness and are otherwise permitted hereby, (vi) Consolidated
Capital Expenditures for such period and (vii) Restricted Payments not
prohibited hereunder made during such period; provided, however, that none of
-------- -------
the following shall be included in a determination of Excess Cash Flow: (x)
amounts expended for any Investment permitted under Section 7.04 and any
------------
proceeds from the subsequent sale or other disposition of any such Investment,
(y) the proceeds of any issuance of debt or equity securities not otherwise
prohibited hereunder and (z) the proceeds from the sale of assets of either
Borrower or any Subsidiary to the extent such proceeds would be required (before
giving effect to any waiver) to mandatorily prepay any permitted Indebtedness
(including the Loans).
"Exchange Rate" shall mean, on any day, (a) for purposes of determining
-------------
the U.S. Dollar Equivalent, the rate at which Canadian Dollars may be exchanged
into U.S. Dollars and (b) for purposes of determining the Canadian Dollar
Equivalent, the rate at which U.S. Dollars may be exchanged into Canadian
Dollars, in each case as set forth on the Reuters World Currency Page for
Canadian Dollars (or, if not so quoted, the spot rate of exchange quoted for
wholesale transactions made by the Canadian Administrative Agent in Toronto,
Ontario) at 12:00 noon, Standard Time, on such day; provided, that if at the
--------
time of any such determination, for any reason, no such spot rate is being
quoted, the Canadian Administrative Agent may use any reasonable method it deems
applicable to determine such rate, and such determination shall be conclusive
absent manifest error.
"Existing SLP Credit Agreements" shall mean the Credit Agreement by and
------------------------------
among Canco., St. Laurent Paperboard (U.S.) Inc. and The Toronto-Dominion Bank
dated as of February 25, 1998, as supplemented by the First Supplemental Credit
Agreement dated as of September 7, 1999, and the Amended and Restated Credit
Agreement dated as of December 23, 1999 by and among Eastern Container
Corporation and Toronto Dominion (Texas), Inc. and The Toronto-Dominion Bank.
"Existing Stone Collateral" shall mean all or any portion of the assets
-------------------------
(whether now owned or hereafter acquired) of Stone or its Subsidiaries that
secures the obligations of Stone or any Subsidiary under the Existing Stone
Credit Agreement from time to time.
"Existing Stone Credit Agreement" shall mean the Amended and Restated
-------------------------------
Credit Agreement, dated as of March 31, 2000 (as amended, restated, supplemented
or otherwise modified from time to time), among Stone, the Existing Stone
Lenders, Chase, as agent for such lenders, and Bankers Trust Company, as agent,
administrative agent and facing agent for such lenders and as swingline lender.
"Existing SLP Indebtedness" shall mean the Existing SLP Credit
-------------------------
Agreements and the Existing SLP Notes.
"Existing SLP Notes" shall mean the Series A Notes, the Series B Notes
------------------
and the Series C Notes issued pursuant to the Amended and Restated Note
Agreement dated as of February 1, 1998,
16
as amended by the First Amendment Agreement dated as of September 7, 1999, among
Canco and the financial institutions party thereto as holders.
"Existing Stone Lenders" shall mean the "Lenders" under, and as defined
----------------------
in, the Existing Stone Credit Agreement.
"Existing Stone Loan Documents" shall have the meaning assigned to the
-----------------------------
term "Loan Documents" in the Existing Stone Credit Agreement.
"Existing Stone Term Facilities" shall mean the Tranche C Loans, the
------------------------------
Tranche D Loans, the Tranche E Loans and the Tranche F Loans, all as defined and
outstanding under the Existing Stone Credit Agreement.
"Facing Agent" shall mean Deutsche Bank Canada or any of its affiliates
------------
that is a resident of Canada or any other Person that becomes a Facing Agent in
accordance with Article III.
"Federal Funds Effective Rate" shall mean, for any day, 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 on the
next succeeding Business Day by the Federal Reserve Bank of New York or, if such
rate is not so published for any day that is a Business Day, the average of the
quotations for the day of such transactions received by the Administrative Agent
from three Federal funds brokers of recognized standing selected by it.
"Fees" shall mean the fees described in Section 2.05.
---- ------------
"Final Transaction Steps" shall mean the Canadian Amalgamations and
-----------------------
other distributions, liquidations and other transactions to be consummated
following the Closing Date pursuant to the Reorganization Agreement.
"Financial Officer" of any Person shall mean the chief financial
-----------------
officer, principal accounting officer, treasurer, controller or assistant
treasurer of such Person.
"FinSub" shall mean Stone Receivables Corporation, a Delaware
------
corporation.
"First Mortgage Note Indenture" shall mean the Indenture dated as of
-----------------------------
October 12, 1994, between Stone and Norwest Bank, Minnesota, National
Association, as trustee, pursuant to which Stone issued its First Mortgage
Notes.
"First Mortgage Notes" shall mean Stone's 10-3/4% First Mortgage Notes
--------------------
due 2002.
"Foreign Subsidiary" shall mean any Subsidiary that is not a Domestic
-------------------
Subsidiary.
"Francobec Bond Pledge Agreement" shall mean the bond pledge agreement
-------------------------------
dated as of May 31, 2000, entered into between Usine Francobec Inc. and the
Collateral Agent, providing the
17
terms pursuant to which the Francobec Bonds are to be held by the Collateral
Agent, in its capacity as collateral agent and depositary of the Francobec Bonds
for the benefit of the Tranche H Lenders, the Revolving Lenders, the Agents and
the Facing Agent.
"Francobec Bonds" shall mean any or all of the Bonds issued from time
----------------
to time by Usine Francobec Inc. pursuant to the Francobec Hypothec.
"Francobec Hypothec" shall mean the Indenture and Deed of Hypothec and
-------------------
Issue of Bonds executed on May 23, 2000, and entered into between Usine
Francobec Inc. and the Trustee, pursuant to the terms of which Usine Francobec
Inc. has created, issued and secured Bonds in the maximum aggregate amount of
Cdn$1,500,000,000.00.
"Governmental Authority" shall mean any Federal, state, local or
-----------------------
foreign court or governmental agency, authority, instrumentality or regulatory
body.
"Guarantee" of or by any Person shall mean any obligation, contingent
---------
or otherwise (whether or not denominated as a guarantee), of such Person
guaranteeing any Indebtedness or any other obligation of any other Person (the
"primary obligor") in any manner, whether directly or indirectly, and including
---------------
any obligation of such Person, direct or indirect, (a) to purchase or pay (or
advance or supply funds for the purchase or payment of) such Indebtedness (or
other obligation) or to purchase (or to advance or supply funds for the purchase
of) any security for the payment of such Indebtedness (or other obligation), (b)
to purchase property, securities or services for the purpose of assuring the
owner of such Indebtedness (or other obligation) of the payment of such
Indebtedness (or other obligation) or (c) to maintain working capital, equity
capital or other financial statement condition or liquidity of the primary
obligor so as to enable the primary obligor to pay such Indebtedness (or other
obligation); provided, however, that the term "Guarantee" shall not include
-------- -------
endorsements for collection or deposit in the ordinary course of business. The
amount of any Guarantee at any time shall be deemed to be an amount equal to the
lesser at such time of (x) the stated or determinable amount of the primary
obligation in respect of which such Guarantee is made or (y) the maximum amount
for which such Person may be liable pursuant to the terms of the instrument
embodying such Guarantee (or, if not stated or determinable, the maximum
reasonably anticipated liability in respect thereof).
"Guarantee Agreements" shall mean the Canco Subsidiary Guarantee
--------------------
Agreements, the Stone Guarantee Agreement, the Stone Subsidiary Guarantee
Agreements, and the Maryland Subsidiary Guarantee Agreement, made by each
Guarantor in favor of BTCo, as Collateral Agent, for the benefit of the
beneficiaries named therein.
"Guarantors" shall mean Stone, and each Subsidiary that executes a
----------
Guarantee Agreement, including each Subsidiary listed on Schedule 1.01(b).
----------------
"Hazardous Materials" is defined in Section 4.16(d).
------------------- ---------------
18
"Hypothecs" shall mean (a) each of the Canco Hypothec, the Francobec
---------
Hypothec and the 2849 Hypothec and (b) any other such agreement entered into
thereafter by a Canadian Subsidiary and the Trustee.
"Inactive Subsidiary" shall mean any Subsidiary that (a) has assets
-------------------
with a total market value not in excess of $1,000 and (b) has not conducted any
business or other operations during the prior 12-month period.
"Indebtedness" of any Person shall mean, without duplication, (a) all
------------
obligations of such Person for borrowed money or with respect to deposits or
advances of any kind, other than deposits or advances in the ordinary course of
business, (b) all obligations of such Person evidenced by bonds, debentures,
notes or similar instruments, (c) all obligations of such Person under
conditional sale or other title retention agreements relating to assets
purchased by such Person, (d) all obligations of such Person issued or assumed
as the deferred purchase price of property or services (excluding trade accounts
payable and accrued expenses arising in the ordinary course of business), (e)
all Indebtedness of others secured by (or for which the holder of such
Indebtedness has an existing right, contingent or otherwise, to be secured by)
any Lien on property owned or acquired by such Person, whether or not the
obligations secured thereby have been assumed by such Person, (f) all Guarantees
by such Person, (g) all Capital Lease Obligations of such Person, (h) all net
obligations of such Person in respect of Rate Protection Agreements, Currency
Agreements or other interest or exchange rate hedging arrangements (such net
obligations to be equal at any time to the termination value of such Agreements
or other arrangements that would be payable by or to such Person at such time)
and (i) all obligations of such Person as an account party to reimburse any bank
or any other Person in respect of letters of credit. The Indebtedness of any
Person shall include the Indebtedness of any partnership in which such Person is
a general partner, except to the extent such Indebtedness is expressly non-
recourse to such Person.
"Indemnitee" is defined in Section 11.05(b).
---------- ----------------
"Information" is defined in Section 11.15(a).
----------- ----------------
"Insolvency Law" shall mean, to the extent applicable, (a) Title 11 of
--------------
the United States Code, (b) the Bankruptcy and Insolvency Act (Canada), (c) the
Companies' Creditors Arrangement Act (Canada) and (d) any similar federal,
provincial, state, local or foreign bankruptcy or insolvency law, in each case
as now constituted or hereafter amended or enacted.
"Interest Payment Date" shall mean (a) with respect to any Loan, the
---------------------
last day of the Interest Period applicable to the Borrowing of which such Loan
is a part and (b) with respect to any Eurodollar Borrowing with an Interest
Period of more than three months' duration, each day that would have been an
Interest Payment Date had successive Interest Periods of three months' duration
been applicable to such Borrowing.
"Interest Period" shall mean (a) as to any Eurodollar Borrowing, the
---------------
period commencing on the date of such Borrowing or on the last day of the
immediately preceding Interest Period applicable
19
to such Borrowing, as the case may be, and ending on the numerically
corresponding day (or, if there is no numerically corresponding day, on the last
day) in the calendar month that is 1, 2, 3 or 6 months thereafter (or, if
consented to by all affected Lenders, 9 or 12 months thereafter), as the
Borrower thereof may elect and (b) as to any ABR Borrowing or Canadian Prime
Rate Borrowing, the period commencing on the date of such Borrowing or on the
last day of the immediately preceding Interest Period applicable to such
Borrowing, as the case may be, and ending on the earlier of (i) the next
succeeding March 31, June 30, September 30 or December 31, and (ii) the Term
Loan Maturity Date or the Revolving Credit Maturity Date, as applicable;
provided, however, that, if any Interest Period would end on a day other than a
-------- -------
Business Day, such Interest Period shall be extended to the next succeeding
Business Day unless, in the case of a Eurodollar Borrowing only, such next
succeeding Business Day would fall in the next calendar month, in which case
such Interest Period shall end on the next preceding Business Day. Interest
shall accrue from and including the first day of an Interest Period to but
excluding the last day of such Interest Period.
"Investment" shall mean, as applied to any Person (the "investor"), any
---------- --------
direct or indirect purchase or other acquisition by the investor of, or a
beneficial interest in, stock or other securities of any other Person, including
any exchange of equity securities for Indebtedness, or any direct or indirect
loan, advance (other than advances to employees for moving and travel expenses,
drawing accounts and similar expenditures in the ordinary course of business) or
capital contribution by the investor to any other Person, including all
Indebtedness and accounts receivable owing to the investor from such other
Person that did not arise from sales or services rendered to such other Person
in the ordinary course of the investor's business. The amount of any Investment
shall be the original cost of such Investment plus the cost of all additions
----
thereto, without any adjustments for increases or decreases in value, or write-
ups, write-downs or write-offs with respect to such Investment minus any amounts
-----
(a) realized upon the disposition of assets comprising an Investment (including
the value of any liabilities assumed by any Person other than the Borrowers or
any Subsidiary in connection with such disposition), (b) constituting repayments
of Investments that are loans or advances or (c) constituting cash returns of
principal or capital thereon (including any dividend, redemption or repurchase
of equity that is accounted for, in accordance with U.S. GAAP, as a return of
principal or capital).
"ITA" shall mean the Income Tax Act (Canada), as amended, and any
---
successor thereto, and any regulations promulgated thereunder.
"JSG" shall mean Jefferson Smurfit Group plc, a corporation organized
---
and existing under the laws of the Republic of Ireland.
"Judgment Currency" is defined in Section 11.17.
----------------- -------------
"LC Disbursement" shall mean any payment or disbursement made by the
---------------
Facing Agent under or pursuant to a Letter of Credit.
"LC Exposure" shall mean, at any time of determination, the sum of (a)
-----------
the aggregate undrawn amount of all outstanding Letters of Credit at such time
that are denominated in U.S.
20
Dollars, plus the U.S. Dollar Equivalent at such time of the aggregate undrawn
----
amount of all Letters of Credit that are denominated in Canadian Dollars and (b)
the aggregate amount of all LC Disbursements in respect of Letters of Credit
denominated in U.S. Dollars that have not been reimbursed by Canco at such time,
plus the U. S. Dollar Equivalent at such time of the aggregate amount of all LC
----
Disbursements in respect of Letters of Credit denominated in Canadian Dollars
that have not been reimbursed by Canco at such time.
"LC Participation Fee" is defined in Section 2.05(c).
-------------------- ---------------
"LC Reserve Account" is defined in Section 10.02.
------------------ -------------
"Lenders" shall mean the Persons listed on Schedule 2.01 and (and their
------- -------------
respective successors which shall include any entity resulting from a merger or
consolidation) any other Person that shall have become a party hereto pursuant
to an Assignment and Acceptance other than any such Person that ceases to be a
party hereto pursuant to an Assignment and Acceptance.
"Letters of Credit" shall mean the letters of credit issued pursuant to
-----------------
the terms and conditions of Article III.
-----------
"Liability Management Transactions" shall mean the series of
---------------------------------
transactions described on Schedule 1.01(g) hereto.
----------------
"Lien" shall mean, with respect to any asset, (a) any mortgage, deed of
----
trust, lien, pledge, assignment for security (whether collateral or otherwise),
hypothecation, prior claim (within the meaning of the Civil Code of Quebec),
encumbrance, charge or security interest in or on such asset, (b) the interest
of a vendor or a lessor under any conditional sale agreement, Capital Lease or
title retention agreement relating to such asset and (c) in the case of
securities, any purchase option, call or similar right of a third party with
respect to such securities.
"Loan Documents" shall mean this Agreement, the Letters of Credit, the
--------------
Security Documents and the Guarantee Agreements.
"Loan Parties" shall mean the Borrowers and the Guarantors.
------------
"Loans" shall mean the Revolving Loans and the Term Loans.
-----
"Majority Vote" shall mean, as of the date of determination thereof,
-------------
with respect to Lenders holding Loans or Commitments in respect of any
particular Credit Facility hereunder, Lenders having greater than 50% of the sum
of (i) the aggregate principal amount of Loans outstanding under such Credit
Facility and other extensions of credit then outstanding under any of the Loan
Documents relating to such Credit Facility plus (ii) the aggregate amount of the
----
remaining available Commitments of the Lenders with respect to such Credit
Facility under any of the Loan Documents; provided, however, that for purposes
-------- -------
of determining the amount of a Revolving Lender's Loans, each Revolving Lender
shall be deemed to hold the amount of LC Exposure equal to its Applicable
Percentage of LC Exposure then outstanding.
21
"Margin Stock" shall have the meaning given such term under Regulation
------------
U.
"Maryland Subsidiary Guarantee Agreement" shall mean the guarantee
---------------------------------------
agreement dated as of the date hereof substantially in the form of Exhibit C-4
-----------
by the subsidiaries of Stone party thereto in favor of BTCo, as Collateral
Agent.
"Material Adverse Effect" shall mean (a) a materially adverse effect on
-----------------------
the business, operations, properties or condition (financial or otherwise) of
Stone and its Subsidiaries, taken as a whole, (b) material impairment of the
ability of any Loan Party to perform any of its obligations under any Loan
Document to which it is or will be a party or (c) material impairment of the
rights of or benefits available to the Agents, the Administrative Agent, the
Facing Agent or the Lenders under any Loan Document.
"Material Contract" shall mean any contract to which either Borrower or
-----------------
any of the Subsidiaries is or becomes a party providing for payments by or to
either Borrower or any of the Subsidiaries in excess of $50,000,000 per year and
the duration of which shall be in excess of twelve months.
"Material Subsidiary" shall mean each Subsidiary now existing or
-------------------
hereafter acquired or formed and each successor thereto that (a) for the most
recent fiscal year of Stone accounted for more than 5% of the consolidated
revenues of Stone, (b) as at the end of such fiscal year, was the owner of more
than 5% of the consolidated assets of Stone, as shown on the consolidated
financial statements of Stone for such fiscal year or (c) is designated as a
Material Subsidiary on Schedule 1.01(c) or is otherwise irrevocably designated
----------------
as a Material Subsidiary in a writing by a Loan Party to the Administrative
Agent.
"Maximum Rate" is defined in Section 11.10.
------------ -------------
"MBI Transaction" shall mean the acquisition of the remaining 50% of
---------------
the equity interests of MBI Limited by SSCC with a contribution of such equity
interests to Stone and its Subsidiaries, or the acquisition of such equity
interests by Stone or any Subsidiary solely using proceeds of an Investment made
by SSCC to Stone.
"Mortgaged Properties" shall mean the real properties of Canco, SLP US
--------------------
and their respective subsidiaries specified on Schedule 1.01(d).
----------------
"Mortgages" shall mean (i) the mortgages each substantially in the form
---------
of Exhibit D and (ii) the deeds of trust, hypothecs, debentures, leasehold
---------
mortgages, assignments of leases and rents, modifications and other security
documents listed on Schedule 1.01(e) and each such document delivered pursuant
----------------
to Section 6.10.
------------
"Multiemployer Plan" shall mean a multiemployer plan as defined in
------------------
Section 4001(a)(3) of ERISA to which either Borrower or any ERISA Affiliate
(other than one considered an ERISA Affiliate only pursuant to subsection (m) or
(o) of Section 414 of the Code) is making or accruing
22
an obligation to make contributions, or has within any of the preceding five
plan years made or accrued an obligation to make contributions.
"Net Cash Proceeds" shall mean (a) with respect to any Asset Sale, the
-----------------
Cash Proceeds, net of (i) costs of sale (including payment of the outstanding
principal amount of, premium or penalty, if any, and interest on any
Indebtedness (other than Loans) required to be repaid under the terms thereof as
a result of such Asset Sale), (ii) taxes paid or reasonably estimated to be paid
in the year such Asset Sale occurs or in the following year as a result thereof
and (iii) amounts provided as a reserve, in accordance with U.S. GAAP against
any liabilities under any indemnification obligations and any purchase price
adjustments associated with such Asset Sale (provided that, to the extent and at
--------
the time any such amounts are released from such reserve, such amounts shall
constitute Net Cash Proceeds); and (b) with respect to any issuance of debt or
equity securities or any capital contribution, the cash proceeds thereof, net of
underwriting commissions or placement fees and expenses directly incurred in
connection therewith; provided, however, that the definition of the term "Net
-------- -------
Cash Proceeds" shall not include any Cash Proceeds resulting from a casualty or
condemnation that are used (or contractually committed to being used) for the
replacement of the assets subject to such casualty or condemnation within 270
days of the receipt by either Borrower or any Subsidiary of such Cash Proceeds.
"Non-U.S. Person" is defined in Section 2.20(f).
--------------- ---------------
"Obligations" shall mean all obligations of every nature, including
-----------
amounts drawn under outstanding Letters of Credit, of Loan Parties from time to
time owed to the Agents, the Administrative Agent, the Facing Agent and the
Lenders, or any of them, under the Loan Documents.
"Other Taxes" is defined in Section 2.20(b).
----------- ---------------
"Participating Subsidiary" shall mean any Subsidiary that participates
------------------------
or is permitted to participate in the Receivables Program pursuant to the
Receivable Program Documents.
"PBGC" shall mean the Pension Benefit Guaranty Corporation referred to
----
and defined in ERISA or any successor thereto.
"Permitted Investments" shall mean any of the following:
---------------------
(a) any evidence of Indebtedness, maturing not more than one
year after the acquisition thereof, issued by the United States of
America or the federal government of Canada, or any instrumentality or
agency thereof and guaranteed fully as to principal, interest and
premium, if any, by the United States of America or the federal
government of Canada;
(b) any certificate of deposit, maturing not more than one year
after the date of purchase, issued by a commercial banking institution
that has long-term debt rated "A" or higher by ▇▇▇▇▇'▇ Investors
Service, Inc. or Standard & Poor's Ratings Services and which has a
combined capital and surplus and undivided profits of not less than
$500,000,000;
23
(c) commercial paper (i) maturing not more than 270 days after
the date of purchase and (ii) issued by (x) a corporation (other than a
Loan Party or any Affiliate of a Loan Party) with a rating, at the time
as of which any determination thereof is to be made, of "P-1" or higher
by ▇▇▇▇▇'▇ Investors Service, Inc. or "A-1" or higher by Standard &
Poor's Ratings Services (or equivalent rating in the case of a
Permitted Investment made by a Foreign Subsidiary) or (y) any Agent;
(d) demand deposits with any bank or trust company;
(e) repurchase agreements with a term of not more than seven
days with respect to Indebtedness issued by the United States of
America, or any instrumentality or agency thereof and guaranteed fully
as to principal, interest and premium, if any, by the United States of
America; and
(f) in the case of the Foreign Subsidiaries, short-term
investments comparable to the foregoing.
"Permitted Liens" shall mean:
---------------
(a) Liens for taxes, assessments or other governmental charges
or levies not yet due and payable or which are being contested in good
faith by appropriate proceedings diligently pursued, provided that (i)
--------
any proceedings commenced for the enforcement of such Liens shall have
been duly suspended and (ii) full provision for the payment of all such
taxes known to such Person has been made on the books of such Person if
and to the extent required by U.S. GAAP;
(b) mechanics', materialmen's, carriers', warehousemen's,
landlord's and similar Liens arising by operation of law and in the
ordinary course of business and securing obligations of such Person
that are not overdue for a period of more than 60 days or are being
contested in good faith by appropriate proceedings diligently pursued,
provided that in the case of any such contest (i) any proceedings
--------
commenced for the enforcement of such Liens shall have been duly
suspended and (ii) full provision for the payment of such Liens has
been made on the books of such Person if and to the extent required by
U.S. GAAP;
(c) Liens arising in connection with worker's compensation,
unemployment insurance, old age pensions and social security benefits
that are not overdue or are being contested in good faith by
appropriate proceedings diligently pursued, provided that in the case
--------
of any such contest (i) any proceedings commenced for the enforcement
of such Liens shall have been duly suspended and (ii) full provision
for the payment of such Liens has been made on the books of such Person
if and to the extent required by U.S. GAAP;
(d) (i) Liens incurred or deposits made in the ordinary course
of business to secure the performance of bids, tenders, statutory
obligations, fee and expense arrangements with
24
trustees and fiscal agents (exclusive of obligations incurred in
connection with the borrowing of money or the payment of the deferred
purchase price of property) and (ii) Liens securing surety, indemnity,
performance, appeal and release bonds, in the case of either clause (i)
----------
or (ii), securing such bonds in an amount not to exceed individually or
----
in the aggregate $25,000,000 at any time outstanding, provided that
--------
full provision for the payment of all such obligations has been made on
the books of such Person if and to the extent required by U.S. GAAP;
(e) imperfections of title, covenants, restrictions, rights of
way, easements, servitudes, mineral interest reservations, reservations
made in the grant from the Crown, municipal and zoning ordinances,
general real estate taxes and assessments not yet delinquent and other
encumbrances on real property that (i) do not arise out of the
incurrence of any Indebtedness for money borrowed and (ii) do not
interfere with or impair in any material respect the utility,
operation, value or marketability of the real property on which such
Lien is imposed;
(f) the rights of collecting banks or other financial
institutions having a right of setoff, revocation, refund or chargeback
with respect to money or instruments on deposit with or in the
possession of such financial institution;
(g) any Lien specifically permitted to be suffered or
incurred under any applicable Security Document;
(h) leases or subleases granted to others not interfering in
any material respect with the business of either Borrower or any
Subsidiary and any interest or title of a lessor under any lease
(whether a Capital Lease or an operating lease) permitted by this
Agreement or the Security Documents;
(i) Liens on accounts receivable for which attempts at
collection have been undertaken by a third party authorized by the
Person owning such accounts receivable;
(j) Liens arising from the granting of a license to enter into
or use any asset of either Borrower or any Subsidiary to any Person in
the ordinary course of business of either Borrower or any Subsidiary
that does not interfere in any material respect with the use or
application by such Borrower or any Subsidiary of the asset subject to
such license;
(k) Liens attaching solely to ▇▇▇▇ ▇▇▇▇▇▇▇ money deposits made
by either Borrower or any Subsidiary in connection with any letter of
intent or purchase agreement entered into it in connection with an
acquisition permitted hereunder;
(l) Liens arising from precautionary UCC financing statements
(or analogous personal property security filings in other
jurisdictions) regarding operating leases; and
25
(m) Liens arising by operation of law on insurance policies
and proceeds thereof to secure premiums thereunder.
For the purposes of the Security Documents and Section 4.18, "Permitted Liens"
------------
shall also be deemed to include the Liens permitted by Sections 7.02(ii), (vi),
------------------------
(vii), (ix), (xi), (xii) and (xiii). Any reference in any of the Loan Documents
----------------------------------
to a Permitted Lien is not intended to and shall not be interpreted as
subordinating or postponing, or as any agreement to subordinate or postpone, any
Lien created by any of the Loan Documents to any Permitted Lien.
"Person" shall mean any natural person, corporation, legal person,
------
business trust, joint venture, association, company, limited liability company,
partnership or government, or any agency or political subdivision thereof.
"Plan" shall mean any pension plan (other than a Multiemployer Plan)
----
subject to the provisions of Title IV of ERISA or Section 412 of the Code that
is maintained for employees of either Borrower or any ERISA Affiliate.
"Pledge Agreements" shall mean the U.S. Pledge Agreement and the
-----------------
Canadian Pledge Agreements.
"Post Closing Distributions" shall mean the distributions to be made
--------------------------
pursuant to Section 2.3 of the Reorganization Agreement.
-----------
"Pre-Merger Agreement" is defined in the preamble to this Agreement.
--------------------
"Prepayment Account" is defined in Section 2.13(h).
------------------ ---------------
"Prime Rate" shall mean the rate of interest per annum publicly
----------
announced from time to time by the Administrative Agent as its prime rate in
effect at its principal office in New York City; each change in the Prime Rate
shall be effective on the date such change is publicly announced as being
effective.
"Program Receivables" shall mean all trade receivables and related
-------------------
contract and other rights and property (including all general intangibles,
collections and other proceeds relating thereto, all security therefor and any
goods that have been repossessed in connection with any thereof) sold or
contributed by Stone or any Subsidiary to FinSub pursuant to the Receivables
Program Documents.
"Rate Protection Agreements" shall mean interest rate cap agreements,
--------------------------
interest rate swap agreements and other agreements or arrangements entered into
in the ordinary course of business by either Borrower or any Subsidiary and
designed to protect such Borrower or such Subsidiary against fluctuations in
interest rates or to obtain the benefit of floating interest rates.
"Real Properties" shall mean each parcel of real property identified on
---------------
Schedule 4.20, together with all fixtures thereon.
-------------
26
"Receivables Program" shall mean that certain trade receivables
---------------------
securitization program conducted pursuant to the Receivables Program Documents.
"Receivables Program Documents" shall mean the documents identified on
-----------------------------
Schedule 1.01(f) and all other documentation entered into pursuant to the
----------------
Receivables Program.
"Register" is defined in Section 11.04(d).
-------- ----------------
"Regulation T" shall mean Regulation T of the Board as from time to
------------
time in effect and all official rulings and interpretations thereunder or
thereof.
"Regulation U" shall mean Regulation U of the Board as from time to
------------
time in effect and all official rulings and interpretations thereunder or
thereof.
"Regulation X" shall mean Regulation X of the Board as from time to
------------
time in effect and all official rulings and interpretations thereunder or
thereof.
"Reorganization Agreement" shall mean the Reorganization Agreement
------------------------
dated as of May 31, 2000, by and among SSCC, Stone, Stone Container
Corporation-Canada, Canco and the other Subsidiaries signatory thereto, attached
hereto as Exhibit H.
---------
"Reportable Event" shall mean any reportable event as defined in
----------------
Section 4043 of ERISA or the regulations issued thereunder with respect to a
Plan (other than a Plan maintained by an ERISA Affiliate that is considered an
ERISA Affiliate only pursuant to subsection (m) or (o) of Section 414 of the
Code).
"Required Lenders" shall mean, as of the date of determination thereof,
----------------
the Lenders having greater than 50% of the sum of (i) the aggregate principal
amount of Loans and other extensions of credit then outstanding under any of the
Loan Documents plus (ii) the aggregate amount of the remaining available
----
Commitments of the Lenders under any of the Loan Documents; provided, however,
-------- -------
that for purposes of determining the amount of a Revolving Lender's Loans, each
Revolving Lender shall be deemed to hold the amount of LC Exposure equal to its
Applicable Percentage of the LC Exposure then outstanding.
"Reset Date" is defined in Section 1.04.
---------- ------------
"Responsible Officer" of any Person shall mean any executive officer or
-------------------
Financial Officer of such Person and any other officer or similar official
thereof responsible for the administration of the obligations of such Person in
respect of this Agreement.
"Restricted Payment" shall mean (a) any dividend or other distribution,
------------------
direct or indirect, on account of any shares of any class of stock of either
Borrower or any of the Subsidiaries, now or hereafter outstanding, except (i)
any dividend payable solely in shares of such class of stock to the
27
holders of such class and (ii) any dividend or distribution made by any
Subsidiary ratably to the holders of the common stock of such Subsidiary, and
(b) any redemption, retirement, sinking fund or similar payment, purchase,
exchange or other acquisition for value, direct or indirect, of any shares of
any class of stock of either Borrower or any of the Subsidiaries, now or
hereafter outstanding, except for any such redemption, retirement, sinking fund
or similar payment payable only to a Loan Party or payable from a Foreign
Subsidiary to another Foreign Subsidiary.
"Revolving Credit Availability Period" shall mean the period commencing
------------------------------------
with the Closing Date and ending on the Revolving Credit Maturity Date.
"Revolving Credit Borrowing" shall mean a Borrowing comprised of
--------------------------
Revolving Loans.
"Revolving Credit Commitment" shall mean, with respect to each
---------------------------
Revolving Lender, the commitment of such Revolving Lender to make Revolving
Loans and acquire participations in Letters of Credit hereunder as set forth on
Schedule 2.01 or in the Assignment and Acceptance pursuant to which such
-------------
Revolving Lender assumed its Revolving Credit Commitment, as applicable, as the
same may be (a) reduced from time to time pursuant to Section 2.09 and (b)
------------
reduced or increased from time to time pursuant to assignments by or to such
Revolving Lender pursuant to Section 11.04. The initial aggregate amount of the
-------------
Lenders' Revolving Credit Commitments is U.S.$100,000,000.
"Revolving Credit Maturity Date" shall mean December 31, 2005.
------------------------------
"Revolving Credit Utilization" shall mean, at any time of
----------------------------
determination, the sum of (a) the aggregate principal amount of Revolving Loans
outstanding at such time and denominated in U.S. Dollars, plus the U.S. Dollar
Equivalent of the aggregate principal amount of Revolving Loans outstanding at
such time and denominated in Canadian Dollars and (b) the LC Exposure at such
time.
"Revolving Lenders" shall mean the Lenders having Revolving Credit
-----------------
Commitments or holding Revolving Loans, which, prior to any CAM Exchange, shall
be resident in Canada for purposes of the ITA.
"Revolving Loans" shall mean the revolving loans made by the Revolving
---------------
Lenders to Canco, including by way of Bankers' Acceptances and B/A Equivalent
Loans, pursuant to Section 2.01(b) or Section 2.22.
-------------- ------------
"SCC AMMI" shall mean SCC Active Medical Management, Inc.
--------
"SCC ▇▇▇▇▇" shall mean SCC ▇▇▇▇▇, Inc., a Delaware corporation.
---------
"SCC ▇▇▇▇▇ Note" shall mean a promissory note issued by SCC ▇▇▇▇▇ to
---------
Stone in a principal amount up to U.S.$330,000,000.
"SCC RMMI" shall mean SCC Retiree Medical Management, Inc.
--------
28
"Schedule I Bank" shall mean a bank that is a Canadian chartered bank
---------------
listed on Schedule I under the Bank Act (Canada).
"Schedule II Bank" shall mean a bank that is a Canadian chartered bank
----------------
listed on Schedule II under the Bank Act (Canada).
"Schedule II Reference Banks" shall mean each of Deutsche Bank Canada
----------------------------
and The Chase Manhattan Bank of Canada and such other Schedule II Banks as are
agreed to from time to time by Canco and the Canadian Administrative Agent;
provided that there shall be no more than three Schedule II Reference Banks at
--------
any one time.
"Security Agreements" shall mean the U.S. Security Agreement and the
-------------------
Canadian Security Agreement.
"Security Documents" shall mean the Mortgages, the Security Agreements,
------------------
the Hypothecs, the Bond Pledge Agreements, the Bonds and the Pledge Agreements.
"Senior Notes" shall mean the Senior Notes due 2004, the Senior Notes
------------
due 2006 and the Senior Notes due 2016.
"Senior Notes due 2004" shall mean Stone's 11-1/2% Senior Notes due
---------------------
2004.
"Senior Notes due 2006" shall mean Stone's 11-1/2% Senior Notes due
---------------------
2006.
"Senior Notes due 2016" shall mean Stone's Adjustable Rate Senior Notes
---------------------
due 2016.
"Senior Subordinated Notes due 2002" shall mean Stone's 10-3/4% Senior
-------------------------
Subordinated Debentures due 2002 and Stone's 12-1/4% Senior Subordinated
Debentures due 2002.
"Series E Preferred Stock" shall mean the Series E Preferred Stock of
------------------------
Stone outstanding as of the Closing Date.
"SLP Acquisition Documents" shall mean the Pre-Merger Agreement, the
-------------------------
Reorganization Agreement and any other material agreements, instruments or other
documents entered into, or delivered by, between or among the parties to the
Pre-Merger Agreement and any of their respective Affiliates in connection with
the Acquisition.
"SLP Credit Parties" shall mean SLP US and its Subsidiaries.
------------------
"SLP US" shall mean St. Laurent Paperboard (U.S.) Inc., a Delaware
------
corporation, which, upon completion of the Final Transaction Steps, will be a
direct, wholly owned subsidiary of Stone and which will hold, directly or
indirectly, substantially all the U.S. assets and operations of Canco as of the
Closing Date.
29
"Specified Senior Indentures" shall mean each of the indentures and
---------------------------
supplemental indentures relating to the Senior Notes and the First Mortgage
Notes and any other similar indenture, agreement or instrument entered into at
any time by either Borrower or any Subsidiary.
"SSCC" is defined in the preamble to this Agreement.
----
"Standard Time" shall mean eastern standard time or eastern daylight
--------------
savings time, as applicable on the relevant date.
"Statutory Reserves" shall mean a fraction (expressed as a decimal),
------------------
the numerator of which is the number one and the denominator of which is the
number one minus the aggregate of the maximum applicable reserve percentages,
-----
including any marginal, special, emergency or supplemental reserves (expressed
as a decimal) established by the Board and any other banking authority to which
the Administrative Agent is subject for Eurocurrency Liabilities (as defined in
Regulation D of the Board). Eurodollar Loans shall be deemed to constitute
Eurocurrency Liabilities and to be subject to such reserve requirements without
benefit of or credit for proration, exemptions or offsets that may be available
from time to time to any Lender under such Regulation D. Statutory Reserves
shall be adjusted automatically on and as of the effective date of any change in
any reserve percentage.
"Stone" is defined in the preamble to this Agreement.
-----
"Stone Guarantee Agreement" shall mean the guarantee agreement dated as
-------------------------
of the date hereof substantially in the form of Exhibit C-2 by Stone in favor of
-----------
BTCo, as Collateral Agent.
"Stone Subsidiary Guarantee Agreement" shall mean the guarantee
------------------------------------
agreement dated as of the date hereof substantially in the form of Exhibit C-3
-----------
in favor of BTCo, as Collateral Agent, by SLP US and each existing or
subsequently acquired or organized direct or indirect wholly owned Domestic
Subsidiary of SLP US required to become a party thereto pursuant to Section
-------
6.10.
----
"Subordinated Notes" shall mean the Senior Subordinated Notes due 2002
------------------
and the Subordinated Notes due 2007.
"Subordinated Notes due 2007" shall mean Stone's 6-3/4% Convertible
---------------------------
Subordinated Debentures due 2007.
"subsidiary" shall mean, with respect to any Person (herein referred to
----------
as the "parent"), any corporation, partnership, association or other business
------
entity of which securities or other ownership interests representing more than
50% of the equity or more than 50% of the ordinary voting power or more than 50%
of the general partnership or membership interests are, at the time any
determination is being made, owned, controlled or held by, or otherwise
Controlled by, the parent or one or more subsidiaries of the parent or by the
parent and one or more subsidiaries of the parent.
"Subsidiary" shall mean any subsidiary of either Borrower; provided,
---------- --------
however, that the term "Subsidiary" shall not include (a) any Inactive
-------
Subsidiary and (b) Stone Venepal (Celgar) Pulp, Inc.
30
"Term Borrowing" shall mean a Borrowing comprised of Tranche G Loans
--------------
and Tranche H Loans.
"Term Loan Commitments" shall mean the Tranche G Commitments and the
---------------------
Tranche H Commitments.
"Term Loan Maturity Date" shall mean December 31, 2006.
-----------------------
"Term Loan Repayment Amounts" shall mean, for any period, the aggregate
---------------------------
of all Tranche G Repayment Amounts and Tranche H Repayment Amounts payable
during such period.
"Term Loan Repayment Dates" shall mean the Tranche G Loan Repayment
-------------------------
Dates and the Tranche H Loan Repayment Dates.
"Term Loans" shall mean the Tranche G Loans and the Tranche H Loans.
----------
"Tranche F Loans" means the Tranche F Loans outstanding under, and as
---------------
defined in, the Existing Stone Credit Agreement.
"Tranche G Commitments" shall mean, with respect to each Tranche G
---------------------
Lender, the commitment of such Lender to make Tranche G Loans hereunder to Stone
as set forth in Schedule 2.01, as the same may be reduced from time to time
-------------
pursuant to Section 2.09. The initial aggregate principal amount of the Tranche
G Commitments is U.S.$450,000,000.
"Tranche G Lenders" means Lenders with Tranche G Commitments or
-----------------
outstanding Tranche G Loans.
"Tranche G Loans" shall mean the term loans made by the Tranche G
---------------
Lenders to Stone pursuant to Section 2.01(a)(i).
"Tranche G Loan Repayment Amounts" is defined in Section 2.11(a)(i).
--------------------------------
"Tranche G Loan Repayment Dates" is defined in Section 2.11(a)(i).
------------------------------
"Tranche H Commitment" shall mean with respect to each Tranche H
--------------------
Lender, the commitment of such Tranche H Lender to make Tranche H Loans
hereunder to Canco as set forth in Schedule 2.01, as the same may be reduced
-------------
from time to time pursuant to Section 2.09. The initial aggregate principal
amount of the Tranche H Commitments is U.S.$500,000,000.
"Tranche H Lenders" shall mean Lenders with Tranche H Commitments or
-----------------
outstanding Tranche H Loans.
"Tranche H Loans" shall mean the term loans made by Tranche H Lenders
---------------
to Canco pursuant to Section 2.01(a)(ii).
31
"Tranche H Loan Repayment Amounts" is defined in Section 2.11(a)(ii).
--------------------------------
"Tranche H Loan Repayment Dates" is defined in Section 2.11(a)(ii).
------------------------------
"Transactions" shall have the meaning assigned to such term in Section
------------ -------
4.02.
----
"Trustee" shall mean General Trust of Canada, a trust company
-------
constituted under An Act Respecting Trust Companies and Savings Companies
(Quebec) and Part 1 of the Companies Act (Quebec), in its capacity as "fonde de
pouvoir" (person holding the power of attorney) for the holders of the Bonds.
"Type", when used in respect of any Loan or Borrowing, shall refer to
----
the Rate by reference to which interest on such Loan or on the Loans comprising
such Borrowing is determined. For purposes hereof, the term "Rate" shall include
the Adjusted LIBO Rate, the Alternate Base Rate, the Canadian Prime Rate and the
Discount Rate applicable to B/A and B/A Equivalent Loans.
"U.S. Base Rate" shall mean the rate of interest per annum publicly
--------------
announced from time to time by the Canadian Administrative Agent as its base
rate in effect at its principal office in Toronto, Ontario for determining
interest rates on U.S. Dollar-denominated commercial loans made in Canada; each
change in the U.S. Base Rate shall be effective on the date such change is
publicly announced as being effective.
"U.S. Dollars" or "U.S. $" shall mean lawful currency of the United
------------ ------
States.
"U.S. Dollar Equivalent" shall mean, on any date of determination, with
----------------------
respect to any amount in Canadian Dollars, the equivalent in U.S. Dollars of
such amount determined by the Administrative Agent using the Exchange Rate then
in effect.
"U.S. GAAP" shall mean generally accepted accounting principles in the
---------
United States, applied on a consistent basis.
"U.S. Pledge Agreement" shall mean the Pledge Agreement, substantially
---------------------
in the form of Exhibit E-2, among Stone, SLP US, the wholly owned Subsidiaries
-----------
of SLP US party thereto as pledgors and BTCo, as Collateral Agent.
"U.S. Security Agreement" shall mean the Security Agreement,
-----------------------
substantially in the form of Exhibit F-2, among SLP US, the wholly owned
-----------
subsidiaries of SLP US party thereto as grantors and BTCo, as Collateral Agent.
"wholly owned Canadian Subsidiary" shall mean each wholly owned
--------------------------------
subsidiary of either Borrower that is a Canadian Subsidiary.
32
"wholly owned Domestic Subsidiary" shall mean any wholly owned
--------------------------------
subsidiary of either Borrower that is a Domestic Subsidiary.
"wholly owned subsidiary" of a Person shall mean any subsidiary of such
-----------------------
Person of which securities (except for directors' qualifying shares) or other
ownership interests representing 100% of the equity or 100% of the ordinary
voting power or 100% of the general partnership or membership interests are, at
the time any determination is being made, owned, controlled or held by such
Person or one or more subsidiaries of such Person or by such Person and one or
more subsidiaries of such Person.
"Withdrawal Liability" shall mean liability to a Multiemployer Plan as
--------------------
a result of a complete or partial withdrawal from such Multiemployer Plan, as
such terms are defined in Part I of Subtitle E of Title IV of ERISA.
SECTION 1.02. Terms Generally. The definitions in Section 1.01 shall
------------
apply equally to both the singular and plural forms of the terms defined.
Whenever the context may require, any pronoun shall include the corresponding
masculine, feminine and neuter forms. The words "include", "includes" and
"including" shall be deemed to be followed by the phrase "without limitation".
All references herein to Articles, Sections, Exhibits and Schedules shall be
deemed to be references to Articles and Sections of, and Exhibits and Schedules
to, this Agreement unless the context shall otherwise require. Each reference to
any Loan Document or any other document or agreement shall be deemed to be a
reference to such Loan Document, document or agreement as amended, restated,
waived, supplemented or otherwise modified from time to time in accordance with
the provisions hereof and thereof. Unless otherwise specified herein, all
accounting terms used herein shall be interpreted, all accounting determinations
hereunder shall be made and all financial statements required to be delivered
hereunder shall be prepared in accordance with U.S. GAAP as in effect from time
to time, applied on a basis consistent with the application used in the
financial statements referred to in Section 4.05; provided, however, that for
------------ -------- -------
purposes of making any determination required by the definition of "Applicable
----------
Rate", Section 2.13(c) or Article VII, all accounting terms used herein shall be
---- --------------- -----------
interpreted and all accounting determinations hereunder shall be made in
accordance with U.S. GAAP as in effect on the Closing Date applied on a basis
consistent with the application used in the financial statements referred to in
Section 4.05(a).
---------------
SECTION 1.03. Classification of Loans and Borrowings. For the purposes
of this Agreement, Loans may be classified and referred to by Class (e.g., a
----
"Revolving Loan") or by Type (e.g., a "Eurodollar Loan") or by Class and Type
----
(e.g., a "Eurodollar Revolving Loan"). Borrowings may also be classified and
----
referred to by Class (e.g., a "Revolving Borrowing") or by Type (e.g., a
---- ----
"Eurodollar Borrowing") or by Class and Type (e.g., a "Eurodollar Revolving
----
Borrowing").
SECTION 1.04. Exchange Rate Calculations. On each Calculation Date, the
Administrative Agent shall (a) determine the Exchange Rate as of such
Calculation Date and (b) give notice thereof to the Borrowers and to each Lender
that shall have requested such information. The Exchange Rates so determined
shall become effective on the first Business Day immediately following the
relevant Calculation Date (each, a "Reset Date") and shall remain effective
----------
until the next succeeding
33
Reset Date, and shall for all purposes of this Agreement (other than Section
-------
2.02(e), Section 10.03, Section 11.17 and any other provision expressly
------- ------------- -------------
requiring the use of a current Exchange Rate) be the Exchange Rate employed in
converting amounts between U.S. Dollars and Canadian Dollars.
ARTICLE II
The Credits
SECTION 2.01. Commitments and Loans. (a) Subject to the terms and
conditions and relying on the representations and warranties of the Borrowers
set forth herein, (i) each Tranche G Lender agrees, severally and not jointly,
to make a Tranche G Loan in U.S. Dollars to Stone on the Closing Date in a
principal amount not to exceed its Tranche G Commitment, and (ii) each Tranche H
Lender agrees, severally and not jointly, to make a Tranche H Loan in U.S.
Dollars to Canco on the Closing Date in a principal amount not to exceed its
Tranche H Commitment. Amounts paid or repaid in respect of Term Loans may not be
reborrowed.
(b) Subject to the terms and conditions and relying on the
representations and warranties of the Borrowers set forth herein, each Revolving
Lender agrees, severally and not jointly, to make Revolving Loans, including by
means of a B/A or B/A Equivalent Loan, to Canco from time to time during the
Revolving Credit Availability Period, in U.S. Dollars or Canadian Dollars (as
requested by Canco), in an aggregate principal amount that will not result in
(i) such Revolving Lender's Applicable Percentage of the Revolving Credit
Utilization exceeding such Revolving Lender's Revolving Credit Commitment or
(ii) the aggregate Revolving Credit Utilization exceeding the aggregate
Revolving Credit Commitments. Within the limits set forth in the preceding
sentence, Canco may borrow, pay or prepay and reborrow Revolving Loans.
SECTION 2.02. Loans. (a) Each Loan shall be made as part of a Borrowing
consisting of Loans made by the Lenders ratably in accordance with their
respective applicable Tranche G Commitments, Tranche H Commitments, or Revolving
Credit Commitments, as the case may be; provided, however, that the failure of
-------- -------
any Lender to make any Loan shall not in itself relieve any other Lender of its
obligation to lend hereunder (it being understood, however, that no Lender shall
be responsible for the failure of any other Lender to make any Loan required to
be made by such other Lender). Loans comprising any Borrowing shall, subject to
Section 2.22(e) in the case of B/A Borrowings, be in an aggregate principal
---------------
amount that is (i) an integral multiple of U.S.$500,000 (or the Canadian Dollar
Equivalent thereof) and, in the case of a Eurodollar Borrowing, not less than
U.S.$1,000,000 or (ii) an aggregate principal amount equal to the remaining
available balance of the applicable Commitments.
(b) Subject to Section 2.08 and 2.15, (i) each Term Borrowing and
---------------------
Revolving Credit Borrowing denominated in U.S. Dollars shall be comprised
entirely of ABR Loans or Eurodollar Loans, and (ii) each Revolving Credit
Borrowing denominated in Canadian Dollars shall be comprised entirely of B/A
Loans or Canadian Prime Rate Loans, in each case as the Borrower may request
pursuant to Section 2.03. Each Lender may at its option fulfill its Commitment
-------------
with respect to any Eurodollar Loan or any Loan denominated in Canadian Dollars
by causing any domestic or foreign
34
branch or Affiliate of such Lender to make such Loan, provided that any exercise
--------
of such option shall not (A) affect the obligation of the applicable Borrower to
repay such Loan in accordance with the terms of this Agreement or (B) require
any reimbursement or other payment to be made to such Lender or its Affiliates
pursuant to Section 2.20 in an amount in excess of the amounts that would have
------------
been payable thereunder to such Lender had such Lender not exercised such
option. Borrowings of more than one Type may be outstanding at the same time;
provided, however, that the Borrowers shall not be entitled to request any
-------- -------
Borrowing that, if made, would result in an aggregate of more than fifteen
separate Eurodollar Loans and five B/A Borrowings of any Lender being
outstanding hereunder at any one time. For purposes of the foregoing, Loans
having different Interest Periods or Contract Periods or denominated in
different currencies, regardless of whether they commence on the same date,
shall be considered separate Loans.
(c) Subject to paragraph (e) below, each Lender shall make a Loan in the
amount of its pro rata portion, as determined under Section 2.17, of each
------------
Borrowing hereunder on the proposed date thereof by wire transfer of immediately
available funds to the Administrative Agent in New York, New York (or to the
Canadian Administrative Agent in ▇▇▇▇▇▇▇, ▇▇▇▇▇▇▇, in the case of any Loan
denominated in Canadian Dollars), not later than 2:00 p.m., Standard Time, and
the Administrative Agent shall promptly credit the amounts so received to the
general deposit account of the Borrower or, if a Borrowing shall not occur on
such date because any condition precedent specified herein shall not have been
met, return the amounts so received to the respective Lenders. Unless the
Administrative Agent shall have received notice from a Lender prior to the date
of any Borrowing (or, in the case of an ABR Revolving Borrowing or Canadian
Prime Rate Borrowing, prior to 2:00 p.m., Standard Time, on the date of such
Borrowing) that such Lender will not make available to the Administrative Agent
such Lender's portion of such Borrowing, the Administrative Agent may assume
that such Lender has made such portion available to the Administrative Agent on
the date of such Borrowing in accordance with this paragraph (c) and the
-------------
Administrative Agent may, in reliance upon such assumption, make available to
the applicable Borrower on such date a corresponding amount. If and to the
extent that such Lender shall not have made such portion available to the
Administrative Agent, such Lender and such Borrower severally agree to repay to
the Administrative Agent forthwith on demand such corresponding amount together
with interest thereon, for each day from the date such amount is made available
to such Borrower until the date such amount is repaid to the Administrative
Agent at (i) in the case of such Borrower, the interest rate applicable at the
time to the Loans comprising such Borrowing and (ii) in the case of such Lender,
the Federal Funds Effective Rate or, in the case of a Revolving Credit Borrowing
denominated in Canadian Dollars, the rate determined by the Administrative Agent
to represent its cost of obtaining overnight Canadian Dollars. If such Lender
shall repay to the Administrative Agent such corresponding amount, such amount
shall be deemed to constitute such Lender's Loan as part of such Borrowing for
purposes of this Agreement.
(d) Notwithstanding any other provision of this Agreement, the Borrower
shall not be entitled to request any Interest Period (or Contract Period in the
case of a B/A Borrowing) with respect to any Revolving Credit Borrowing that
would end after the Revolving Credit Maturity Date.
(e) If the Facing Agent has not received from Canco the payment
required by paragraph (d) of Article III within two hours after Canco shall have
received notice from the Facing Agent that
35
payment of a drawing presented under any Letter of Credit will be made or, if
Canco shall have received such notice later than 10:00 a.m., Standard Time, on
any Business Day, not later than 10:00 a.m., Standard Time, on the immediately
following Business Day, as provided in paragraph (a) of Article III, the Facing
Agent will promptly notify the Canadian Administrative Agent of the LC
Disbursement and the Administrative Agent will promptly notify each Revolving
Lender of such LC Disbursement and its Applicable Percentage thereof. Each
Revolving Lender will pay to the Canadian Administrative Agent not later than
4:00 p.m., Standard Time on such date (or, if the Revolving Lenders shall have
received such notice later than 2:00 p.m., Standard Time, on any day, not later
than 10:00 a.m., Standard Time, on the immediately following Business Day) an
amount equal to such Revolving Lender's Applicable Percentage of such LC
Disbursement (it being understood that such amount shall be deemed to constitute
an ABR Revolving Loan or Canadian Prime Rate Revolving Loan, as the case may be,
of such Revolving Lender), and the Canadian Administrative Agent will promptly
pay such amount to the Facing Agent. The Canadian Administrative Agent will
promptly remit to each Revolving Lender its Applicable Percentage of any amounts
subsequently received by the Canadian Administrative Agent from the Borrower in
respect of such LC Disbursement. If any Lender shall not have made its
Applicable Percentage of such LC Disbursement available to the Facing Agent as
provided above, such Lender agrees to pay interest on such amount, for each day
from and including the date such amount is required to be paid in accordance
with this subsection to but excluding the date an amount equal to such amount is
paid to the Canadian Administrative Agent for prompt payment to the Facing Agent
at, for the first such day, the overnight Canadian interbank rate for U.S.
Dollars or Canadian Dollars, as the case may be, and for each day thereafter,
the Alternate Base Rate or the Canadian Prime Rate, as the case may be.
SECTION 2.03. Notice of Borrowings. The applicable Borrower shall give the
Administrative Agent written or telecopy notice (or telephone notice promptly
confirmed in writing or by telecopy) (a) in the case of a Eurodollar Borrowing,
not later than 11:00 a.m., Standard Time, three Business Days before a proposed
borrowing, (b) in the case of an ABR Borrowing or a Canadian Prime Rate
Borrowing, not later than 11:00 a.m., Standard Time, on the day of a proposed
borrowing, and (c) in the case of a B/A Borrowing, not later than 11:00 a.m.,
Standard Time, one Business Day before a proposed Borrowing. Such notice shall
be irrevocable and shall in each case refer to this Agreement and specify the
following information:
(i) the Borrower requesting such Borrowing;
(ii) the Type (e.g., Eurodollar, ABR, B/A or Canadian Prime Rate) and
-----
Class (e.g., Revolving, Tranche G or Tranche H) of such Borrowing;
----
(iii) the aggregate amount and currency of such Borrowing;
(iv) the date of such Borrowing (which shall be a Business Day);
(v) in the case of a Eurodollar Borrowing, the Interest Period with
respect thereto;
36
(vi) in the case of a B/A Borrowing, the Contract Period and maturity
date with respect thereto; and
(vii) the number and location of the account to which funds are to be
disbursed;
provided, however, that, notwithstanding any contrary specification in any such
-------- -------
notice, each requested Borrowing shall comply with the requirements set forth in
Section 2.02. If no election as to the Type of Borrowing is specified in any
-------------
such notice, then the requested Borrowing shall be an ABR Borrowing if
denominated in U.S. Dollars and a Canadian Prime Rate Borrowing if denominated
in Canadian Dollars. If no Interest Period with respect to any Eurodollar
Borrowing (or Contract Period, with respect to a B/A Borrowing) is specified in
any such notice, then the Borrower shall be deemed to have selected an Interest
Period (or Contract Period in the case of a B/A Borrowing) of one month's (or 30
days', in the case of a B/A Borrowing) duration. The Administrative Agent shall
promptly advise the Lenders of any notice given pursuant to this Section, and of
each Lender's portion of the requested Borrowing, but in any event prior to
12:00 noon, Standard Time, for same day Borrowings.
SECTION 2.04. Repayment of Loans; Evidence of Debt. (a) Canco hereby
unconditionally promises to pay (i) to the Canadian Administrative Agent for the
account of each Revolving Lender the then unpaid principal amount of each
Revolving Loan of such Lender on the Revolving Credit Maturity Date and (ii) to
the Canadian Administrative Agent for the account of each Tranche H Lender the
then unpaid principal amount of each Tranche H Loan of such Lender in such
amounts and on such dates as provided in Section 2.11(a)(ii). Stone hereby
-------------------
unconditionally promises to pay to the Administrative Agent for the account of
each Tranche G Lender the then unpaid principal amount of each Tranche G Loan of
such Lender in such amounts and on such dates as provided in Section 2.11(a)(i).
------------------
Except for any B/A Loan (the compensation for which is set forth in Section
-------
2.22), each Loan shall bear interest from and including the date made on the
-----
outstanding principal balance thereof as set forth in Section 2.06.
------------
(b) Each Lender shall maintain in accordance with its usual practice an
account or accounts evidencing the Indebtedness to such Lender resulting from
each Loan from time to time, including the amounts of principal and interest
payable and paid such Lender from time to time under this Agreement.
(c) The Administrative Agent shall maintain accounts in which it will
record (i) the amount of each Loan made hereunder, the Type of each Loan and the
Interest Period applicable thereto, (ii) the amount of any principal or interest
due and payable or to become due and payable from each Borrower to each Lender
hereunder and (iii) the amount of any sum received by the Administrative Agent
hereunder from each Borrower or any Guarantor and each Lender's share thereof.
(d) The entries made in the accounts maintained pursuant to paragraphs (b)
--------------
and (c) of this Section 2.04 shall, to the extent permitted by applicable laws
---
be prima facie evidence of the existence and amounts of the obligations therein
recorded; provided, however, that the failure of any Lender
-------- -------
36
or the Administrative Agent to maintain such accounts or any error therein shall
not in any manner affect the obligation of either Borrower to repay the Loans in
accordance with their terms.
(e) Any Lender may request from time to time that its Revolving Loans,
Tranche G Loans or Tranche H Loans be evidenced by a promissory note. In
response to any such request, the applicable Borrower shall prepare, execute and
deliver to such Lender a promissory note payable to such Lender and its
registered assigns, substantially in the form of Exhibit I-1, in the case of a
-----------
Term Loan, and Exhibit I-2, in the case of Revolving Loans, with the blanks
-----------
appropriately filled in. Notwithstanding any other provision of this Agreement,
in the event that any Lender shall request and receive such a promissory note,
the Loans evidenced by such promissory note and interest payable on such Loans
shall at all times (including after assignment pursuant to Section 11.04) be
--------------
represented by one or more promissory notes payable to the payee named therein
and its registered assigns.
SECTION 2.05. Fees. (a) Canco agrees to pay to each Revolving Lender, in
respect of the Revolving Credit Commitments of such Lender to such Borrower,
through the Canadian Administrative Agent, on each March 31, June 30, September
30 and December 31 and on each date on which Revolving Credit Commitments of
such Lender shall expire or be terminated as provided herein, a commitment fee
(a "Commitment Fee") equal to the Applicable Rate per annum in effect for such
--------------
Revolving Credit Commitments from time to time on the daily unused amount of the
Commitments of such Lender during the preceding quarter (or other period
commencing on the Closing Date or ending with the Revolving Credit Maturity Date
or the date on which any of such Commitments of such Lender shall expire or be
terminated). The Commitment Fee due to each Lender shall commence to accrue on
and including the Closing Date and shall cease to accrue on, but excluding, the
date on which such Commitments of such Lender shall expire or be terminated as
provided herein. All Commitment Fees shall be computed on the basis of the
actual number of days elapsed in a year of 360 days.
(b) The Borrowers agree to pay to the Administrative Agent or the
Canadian Administrative Agent, for their own accounts, the administration fees
at the times and in the amounts agreed upon between the Borrowers and the
Administrative Agent and the Canadian Administrative Agent.
(c) Canco agrees to pay (i) to each Revolving Lender, through the Canadian
Administrative Agent, in U.S. Dollars on each March 31, June 30, September 30
and December 31 and on each date on which the Revolving Credit Commitment of
such Lender shall expire or be terminated as provided herein, a participation
fee (a "LC Participation Fee") calculated on such Lender's Applicable Percentage
--------------------
of the daily aggregate LC Exposure (excluding the portion thereof attributable
to unreimbursed LC Disbursements) during the preceding quarter (or shorter
period commencing with the Closing Date or ending with the Revolving Credit
Maturity Date or the date on which all Letters of Credit have been canceled or
have expired and the Revolving Credit Commitments of all Lenders shall have been
terminated) at a rate equal to the greater of (x) the Applicable Rate from time
to time used to determine the interest rate on Eurodollar Revolving Credit
Borrowings pursuant to Section 2.06 minus 0.50% and (y) 1.00%, (ii) to the
------------ -----
Facing Agent on each March 31, June 30, September 30 and December 31 and on the
date on which the Revolving Credit Commitments shall expire or be terminated as
set forth herein, with respect to each Letter of Credit issued by it a fronting
38
fee as separately agreed to between the Borrowers and the Facing Agent and (iii)
to the Facing Agent with respect to the issuance, amendment or transfer of any
such Letter of Credit and each drawing made thereunder, documentary and
processing charges in accordance with the Facing Agent's standard schedule for
such charges in effect at the time of such issuance, amendment, transfer or
drawing, as the case may be. All LC Participation Fees shall be computed on the
basis of the actual number of days elapsed in a year of 360 days and shall be
payable in dollars.
(d) All Fees (other than the fees payable to the Facing Agent under
paragraph (c)(ii) or (iii) above) shall be paid on the dates due, in immediately
----------------- -----
available funds, to the Administrative Agent or the Canadian Administrative
Agent, as applicable, for distribution, if and as appropriate, among the
Lenders. Once paid, none of the Fees shall be refundable under any circumstances
(other than corrections of errors in payment).
SECTION 2.06. Interest on Loans. (a) Subject to the provisions of Section
-------
2.07, the Loans comprising each ABR Borrowing shall bear interest (computed on
----
the basis of the actual number of days elapsed over a year of 365 or 366 days,
as the case may be, when the Alternate Base Rate is determined by reference to
the Prime Rate or the U.S. Base Rate and over a year of 360 days at all other
times) at a rate per annum equal to the Alternate Base Rate plus the Applicable
Rate in effect at such time with respect to such Loans.
(b) Subject to the provisions of Section 2.07, the Loans comprising each
------------
Eurodollar Borrowing shall bear interest (computed on the basis of the actual
number of days elapsed over a year of 360 days) at a rate per annum equal to the
Adjusted LIBO Rate for the Interest Period in effect for such Borrowing plus the
----
Applicable Rate in effect at such time with respect to such Loans.
(c) Subject to the provisions of Section 2.07, the Loans comprising each
------------
Canadian Prime Rate Borrowing shall bear interest (computed on the basis of the
actual number of days elapsed over a year of 365 or 366 days, as the case may
be) at a rate per annum equal to the Canadian Prime Rate plus the Applicable
Rate in effect at such time with respect to such Loans.
(d) Subject to the provisions of Section 2.07, the Loans comprising each
------------
B/A Borrowing shall be subject to an Acceptance Fee, payable by Canco on the
date of acceptance of the relevant B/A and calculated as set forth in the
definition of the term "Acceptance Fee" in Section 1.01.
------------
(e) Interest on each Loan (other than pursuant to a B/A Borrowing) shall be
payable on the Interest Payment Dates applicable to such Loan, except as
otherwise provided in this Agreement. The Applicable Rate for each Interest
Period or day within an Interest Period, as the case may be, shall be determined
by the Administrative Agent or the Canadian Administrative Agent, as applicable,
and such determination shall be presumptively correct absent manifest error.
(f) For the purposes of the Interest Act (Canada) and disclosure
thereunder, whenever any interest or fee to be paid hereunder or in connection
herewith is to be calculated on the basis of any period of time that is less
than a calendar year, the yearly rate of interest to which the rate used in such
calculation is equivalent is the rate so used multiplied by the actual number of
days in the
39
calendar year in which the same is to be ascertained and divided by 360, 365 or
366, as applicable. The rates of interest under this Agreement are nominal
rates, and not effective rates or yields. The principle of deemed reinvestment
of interest does not apply to any interest calculation under this Agreement.
SECTION 2.07. Default Interest. If either Borrower shall default in the
payment of the principal of or interest on any Loan or any other amount becoming
due hereunder or under any Loan Document, by acceleration or otherwise, the
applicable Borrower shall on demand from time to time pay interest, to the
extent permitted by law, on such defaulted amount to but excluding the date of
actual payment (after as well as before judgment or bankruptcy) at a rate per
annum (the "Default Rate") equal to (a) in the case of any Loan, the rate that
------------
would be applicable under Section 2.06 to such Loan plus 2.00% per annum and (b)
------------ ----
in the case of any other amount, the rate that would be applicable under Section
-------
2.06 to an ABR Revolving Loan plus 2.00% per annum.
----
SECTION 2.08. Alternate Rate of Interest. In the event, and on each
occasion, that on the day two Business Days prior to the commencement of any
Interest Period for a Eurodollar Borrowing the Administrative Agent shall have
determined that dollar deposits in the principal amounts of the Loans comprising
such Borrowing are not generally available in the London interbank market, or
that the rates at which such dollar deposits are being offered will not
adequately and fairly reflect the cost to Lenders having outstanding Loans and
unused Commitments representing at least 20% of the aggregate outstanding Loans
and unused Commitments in respect of the affected Credit Facility of making or
maintaining their Eurodollar Loans during such Interest Period, or that
reasonable means do not exist for ascertaining the Adjusted LIBO Rate, the
Administrative Agent shall, as soon as practicable thereafter, give written or
telecopy notice of such determination to each Borrower and the Lenders. In the
event of any such determination, any request by either Borrower for a Eurodollar
Borrowing pursuant to Section 2.03 or 2.10 shall, until the Administrative Agent
------------ ----
shall have advised the Borrowers and the Lenders that the circumstances giving
rise to such notice no longer exist, be deemed to be a request for an ABR
Borrowing. Each determination by the Administrative Agent hereunder shall be
conclusive absent manifest error.
SECTION 2.09. Termination and Reduction of Commitments. (a) The Term Loan
Commitments shall terminate at 5:00 p.m., Standard Time, on the Closing Date.
The Revolving Credit Commitments shall terminate at 5:00 p.m., Standard Time, on
the Revolving Credit Maturity Date.
(b) Upon at least three Business Days' prior irrevocable written or
telecopy notice to the Administrative Agent, (x) Stone may at any time in whole
permanently terminate, or from time to time in part permanently reduce, the
Tranche G Commitments and (y) Canco may at any time in whole permanently
terminate, or from time to time in part permanently reduce, the Tranche H
Commitments and/or the Revolving Credit Commitments; provided, however, that (i)
-------- -------
each partial reduction of such Commitments shall be in an integral multiple of
U.S.$1,000,000 and in a minimum principal amount of U.S.$5,000,000 and (ii)
Canco shall not be permitted to terminate or reduce the Revolving Credit
Commitments if, as the result of such termination or reduction, the Revolving
Credit Utilization would exceed the aggregate remaining Revolving Credit
Commitments.
40
(c) The Revolving Credit Commitments shall be permanently reduced by the
amount of any mandatory prepayments applied to Revolving Credit Borrowings
pursuant to Section 2.13(f).
---------------
(d) Each reduction in the Commitments hereunder shall be made ratably among
the applicable Lenders in accordance with their respective applicable
Commitments.
(e) The applicable Borrower shall pay to the Administrative Agent for
account of the applicable Lenders, on the date of each termination or reduction,
the Commitment Fees on the amount of the Commitments so terminated or reduced
accrued to, but excluding, the date of such termination or reduction.
(f) Nothing in this Section 2.09 shall prejudice any rights that either
------------
Borrower may have against any Lender that fails to lend as required hereunder
prior to the date of termination of any Commitment.
SECTION 2.10. Conversion and Continuation of Borrowings. Each Borrower
shall have the right at any time upon prior irrevocable notice to the
Administrative Agent (i) not later than 11:00 a.m., Standard Time, on the day of
the proposed conversion, to convert any Eurodollar Borrowing into an ABR
Borrowing or to convert any B/A Borrowing to a Canadian Prime Rate Borrowing,
(ii) not later than 11:00 a.m., Standard Time, three Business Days prior to
conversion or continuation, to convert any ABR Borrowing into a Eurodollar
Borrowing or to continue any Eurodollar Borrowing as a Eurodollar Borrowing for
an additional Interest Period, (iii) not later than 11:00 a.m., Standard Time,
three Business Days prior to conversion, to convert the Interest Period with
respect to any Eurodollar Borrowing to another permissible Interest Period and
(iv) not later than 11:00 a.m., Standard Time, one Business Day prior to
conversion or continuation, to convert any Canadian Prime Rate Borrowing to a
B/A Borrowing or to continue any B/A Borrowing as a B/A Borrowing for an
additional Contract Period, subject in each case to the following:
(a) each conversion or continuation shall be made pro rata among the
Lenders in accordance with the respective principal amounts of the Loans
comprising the converted or continued Borrowing;
(b) if less than all the outstanding principal amount of any Borrowing
shall be converted or continued, then each resulting Borrowing shall
satisfy the limitations specified in Sections 2.02(a) and (b) and, if
---------------- ---
applicable, Section 2.22, regarding the principal amount and maximum number
------------
of Borrowings of the relevant Type;
(c) each conversion shall be effected by each Lender and the
Administrative Agent by recording the particulars thereof in their
respective records, and no new Loan shall be considered to have been made
as a result thereof; accrued interest on any Eurodollar Loan (or portion
thereof) being converted shall be paid by the applicable Borrower at the
time of the conversion;
41
(d) if any Eurodollar Borrowing or B/A Loan is converted at a time
other than the end of the Interest Period applicable thereto, the
applicable Borrower shall pay, upon demand, any amounts due to the Lenders
pursuant to Section 2.16;
------------
(e) any portion of a Borrowing maturing or required to be repaid in
less than one month may not be converted into or continued as a Eurodollar
Borrowing or a B/A Borrowing;
(f) any portion of a Eurodollar Borrowing or a B/A Borrowing that
cannot be converted into or continued as a Eurodollar Borrowing or a B/A
Borrowing by reason of paragraph (e) above shall be automatically converted
at the end of the Interest Period or Contract Period in effect for such
Borrowing into an ABR Borrowing or a Canadian Prime Rate Borrowing, as the
case may be; and
(g) no Interest Period may be selected for any Eurodollar Term
Borrowing that would end later than any applicable Term Loan Repayment Date
occurring on or after the first day of such Interest Period if, after
giving effect to such selection, the aggregate outstanding amount of (i)
the Eurodollar Term Borrowings with Interest Periods ending on or prior to
such Term Loan Repayment Date and (ii) the ABR Term Borrowings would not be
at least equal to the principal amount of Term Borrowings to be paid on
such Term Loan Repayment Date.
Each notice pursuant to this Section 2.10 shall be irrevocable and
------------
shall refer to this Agreement and specify (i) the identity, amount and Class of
the Borrowing that the Borrower requests be converted or continued, (ii) whether
such Borrowing is to be converted to or continued as a Eurodollar Borrowing, an
ABR Borrowing, a B/A Borrowing or a Canadian Prime Rate Borrowing, (iii) if such
notice requests a conversion, the date of such conversion (which shall be a
Business Day) and (iv) if such Borrowing is to be converted to or continued as a
Eurodollar Borrowing or a B/A Borrowing, the Interest Period or Contract Period,
respectively, with respect thereto. If no Interest Period or Contract Period is
specified in any such notice with respect to any conversion to or continuation
as a Eurodollar Borrowing or B/A Borrowing, respectively, the applicable
Borrower shall be deemed to have selected an Interest Period or Contract Period
of one month's or 30 days', as the case may be, duration. The Administrative
Agent shall advise the other Lenders of any notice given pursuant to this
Section 2.10 and of each Lender's portion of any converted or continued
------------
Borrowing. If the applicable Borrower shall not have given notice in accordance
with this Section 2.10 to continue any Borrowing into a subsequent Interest
------------
Period or Contract Period (and shall not otherwise have given notice in
accordance with this Section 2.10 to convert such Borrowing), such Borrowing
------------
shall, at the end of the Interest Period applicable thereto (unless repaid
pursuant to the terms hereof), automatically be continued into a new Interest
Period as an ABR Borrowing or a Canadian Prime Rate Borrowing, as applicable.
42
SECTION 2.11. Repayment of Term Borrowings. (a)(i) Stone shall pay to the
Administrative Agent, for the account of the Tranche G Lenders, on the dates set
forth below, or if any such date is not a Business Day, on the next succeeding
Business Day (each such date being a "Tranche G Loan Repayment Date"), a
-----------------------------
principal amount of Tranche G Loans (such amount, as adjusted from time to time
pursuant to Sections 2.12 and 2.13(f), being called the "Tranche G Loan
------------- ------- --------------
Repayment Amount") equal to the amount set forth below for such date, together
----------------
in each case with accrued and unpaid interest on the principal amount to be paid
to but excluding the date of such payment:
Date Amount
----- ------
December 31, 2000 U.S.$ 2,250,000
June 30, 2001 2,250,000
December 31, 2001 2,250,000
June 30, 2002 2,250,000
December 31, 2002 2,250,000
June 30, 2003 2,250,000
December 31, 2003 2,250,000
June 30, 2004 2,250,000
December 31, 2004 2,250,000
June 30, 2005 2,250,000
December 31, 2005 2,250,000
June 30, 2006 212,625,000
December 31, 2006 212,625,000
On each Tranche G Loan Repayment Date, the Administrative Agent shall apply the
Tranche G Loan Repayment Amount paid to the Administrative Agent to pay the
Tranche G Term Loans in accordance with Section 2.19(a).
---------------
43
(ii) Subject to Section 2.13(j), Canco shall pay to the Canadian
---------------
Administrative Agent, for the account of the Tranche H Lenders, on the dates set
forth below, or if any such date is not a Business Day, on the next succeeding
Business Day (each such date being a "Tranche H Loan Repayment Date"), a
-----------------------------
principal amount of Tranche H Loans (such amount, as adjusted from time to time
pursuant to Sections 2.12 and 2.13(f), being called the "Tranche H Loan
------------- ------- --------------
Repayment Amount") equal to the amount set forth below for such date, together
----------------
in each case with accrued and unpaid interest on the principal amount to be paid
to but excluding the date of such payment:
Date Amount
----- ------
December 31, 2000 U.S$ 2,500,000
June 30, 2001 2,500,000
December 31, 2001 2,500,000
June 30, 2002 2,500,000
December 31, 2002 2,500,000
June 30, 2003 2,500,000
December 31, 2003 2,500,000
June 30, 2004 2,500,000
December 31, 2004 2,500,000
June 30, 2005 2,500,000
December 31, 2005 2,500,000
June 30, 2006 236,250,000
December 31, 2006 236,250,000
On each Tranche H Loan Repayment Date, the Canadian Administrative Agent shall
apply the Tranche H Loan Repayment Amount paid to the Canadian Administrative
Agent to pay the Tranche H Loans in accordance with Section 2.19(a).
---------------
(b) To the extent not previously paid, all Term Loans shall be due and
payable on the Term Loan Maturity Date, together with accrued and unpaid
interest on the principal amount to be paid to but excluding the date of
payment.
(c) All repayments pursuant to this Section 2.11 shall be subject to
------------
Section 2.16, but shall otherwise be without premium or penalty.
------------
SECTION 2.12. Optional Prepayments. (a) Each Borrower shall have the right
at any time and from time to time to prepay any Borrowing (other than Bankers'
Acceptances or B/A Equivalent Loans, which may, however, be defeased as provided
below), in whole or in part, upon written or telecopy notice (or telephone
notice promptly confirmed by written or telecopy notice) delivered to the
Administrative Agent or the Canadian Administrative Agent, as applicable, (i) by
11:00 a.m., Standard Time, at least three Business Days prior to the date
designated for such prepayment, in the case of any prepayment of a Eurodollar
Borrowing, or (ii) by 11:00 a.m., Standard Time, on the date designated for such
prepayment in the case of any prepayment of an ABR Borrowing or a Canadian Prime
Rate Borrowing; provided, however, that each partial payment shall be in an
-------- -------
amount that is an
44
integral multiple of U.S.$1,000,000 (or Cdn.$1,000,000 in the case of Borrowings
denominated in Canadian Dollars) and, in the case of a Eurodollar Borrowing, not
less than U.S.$5,000,000 (or, in each case, the entire amount of the Borrowing
being prepaid); and provided further that Canco may defease any B/A or B/A
-------- -------
Equivalent Loan by depositing with the Canadian Administrative Agent an amount
that, together with interest accruing on such amount to the end of the Contract
Period for such B/A or B/A Equivalent Loan is sufficient to pay such maturing
Bankers' Acceptances or B/A Equivalent Loans when due.
(b) Optional prepayments of Term Loans made by the Borrowers pursuant
to paragraph (a) above shall be allocated among the Term Loans (and to the
-------------
remaining scheduled installments of principal with respect to any such Term
Loans) in a manner determined at the discretion of the Borrowers.
(c) Each notice of prepayment shall specify (i) the amount to be
prepaid, (ii) the prepayment date, (iii) the Class of Loans to be repaid and
(iv) the allocation of the amount to be prepaid among the Credit Facilities and,
with respect to a prepayment of any Term Loan, the application thereof to the
scheduled installments of principal thereof. Each notice of prepayment shall be
irrevocable and shall commit the applicable Borrower to prepay such obligations
by the amount specified therein on the date specified therein. All prepayments
pursuant to this Section 2.12 shall be subject to Section 2.16, but shall
------------- -------------
otherwise be without premium or penalty.
(d) No optional prepayment of Term Loans made by either Borrower
pursuant to this Section 2.12 shall reduce the applicable Borrower's obligation
------------
to make mandatory prepayments pursuant to Section 2.13(b), (c) or (d).
--------------- --- ---
SECTION 2.13. Mandatory Prepayments. (a) On the date of any termination
or reduction of the Revolving Credit Commitments pursuant to Section 2.09, Canco
------------
shall pay or prepay so much of the then-outstanding Revolving Credit Borrowings
(and/or shall cash-collateralize outstanding Letters of Credit and B/A and B/A
Equivalent Loans) as shall be necessary in order that the aggregate Revolving
Credit Utilization at such time will not exceed the aggregate Revolving Credit
Commitments (after giving effect to such termination or reduction).
(b) With respect to any Asset Sale, except as expressly provided below
in this Section 2.13(b), it shall constitute an "Event of Failure" if the
---------------- ----------------
Borrowers shall fail to apply not later than the third Business Day following
the determination of the amount of Net Cash Proceeds received in respect thereof
(but in no event later than 60 days (or 270 days in the event of a casualty or
condemnation) after the initial receipt by a Borrower or any Subsidiary of such
Net Cash Proceeds) an amount equal to 100% of the Net Cash Proceeds received
therefrom to prepay outstanding Loans in accordance with Section 2.13(f);
---------------
provided, however, that the Borrowers may elect, by written notice to the
-------- -------
Administrative Agent on or prior to the date that such failure would become an
Event of Failure, to use up to $200,000,000 in the aggregate of such Net Cash
Proceeds (other than proceeds from sale of the Collateral) to redeem, repurchase
or otherwise extinguish certain of their existing Indebtedness pursuant to
Section 7.09(a) (provided that any such redemption takes place within 45 days of
--------------- --------
such notice). Notwithstanding the foregoing sentence, the Borrowers shall be
45
entitled to retain, and apply in any manner not otherwise prohibited hereunder,
up to U.S.$10,000,000, in the aggregate, of Net Cash Proceeds received from
Asset Sales following the Closing Date. In the event that the Net Cash Proceeds
from any Asset Sale involving a condemnation or casualty exceed
U.S.$100,000,000, the Borrowers shall cause such Net Cash Proceeds to be
deposited into an account under the exclusive dominion and control of the
Administrative Agent until such time that such Net Cash Proceeds are (i)
released to, or for the account of, the Borrowers or any Subsidiary in respect
of a permitted reinvestment or (ii) used to prepay outstanding Loans in
accordance with Section 2.13(f).
(c) Subject to Section 2.13(j), no later than the earlier of (i) 90
---------------
days after the end of each fiscal year of Stone, commencing with the fiscal year
ending on December 31, 2000, and (ii) the date on which the financial statements
with respect to such period are delivered pursuant to Section 6.04(a), the
---------------
Borrowers shall prepay outstanding Loans in accordance with Section 2.13(f) in
---------------
an aggregate principal amount equal to 50% of the amount of such Excess Cash
Flow that is in excess of U.S.$100,000,000 for the fiscal year then ended.
(d) Subject to Section 2.13(j), in the event that either Borrower or
---------------
any Subsidiary shall receive Net Cash Proceeds from the issuance or other
disposition of Indebtedness for money borrowed of either Borrower or any
Subsidiary (other than Indebtedness for money borrowed permitted pursuant to
Section 7.01), the Borrowers shall substantially simultaneously with (and in any
event not later than the third Business Day next following) the receipt of such
Net Cash Proceeds by either Borrower or any Subsidiary, apply an amount equal to
100% of such Net Cash Proceeds to prepay outstanding Loans in accordance with
Section 2.13(f).
---------------
(e) If on any date, as a result of fluctuations in the Exchange Rate,
the Administrative Agent determines that the aggregate Revolving Credit
Utilization shall have exceeded for more than three consecutive Business Days an
amount equal to 105% of the total Revolving Credit Commitments, the
Administrative Agent shall notify Canco of such occurrence and Canco shall on
the next succeeding Business Day prepay Revolving Credit Loans is an amount
sufficient to eliminate such excess.
(f) Subject to Section 2.13(j) and Section 2.23, mandatory prepayments
--------------- ------------
of outstanding obligations under this Agreement made by the Borrowers pursuant
to paragraphs (b), (c) and (d) above first, shall be allocated pro rata among
-------------- --- --- -----
the then-outstanding Term Loans and, subject to paragraph (i) below, applied pro
-------------
rata against the remaining scheduled installments of principal due in respect of
such Term Loans under Section 2.11(a) and second, if the Term Loans shall have
--------------- ------
been repaid in full, shall be applied pro rata to permanently reduce existing
Revolving Credit Commitments; provided, however, that (i) the Borrowers may
-------- -------
elect, subject to the requirements of Section 2.17 and Section 2.23, to apply up
------------ ------------
to $50,000,000 of Excess Cash Flow to the prepayment of Term Loans or the
Existing Stone Term Facilities without regard to this paragraph (f) (i.e., the
------------- ----
Borrowers may select the Class or Classes of Term Loans or Existing Stone Term
Facilities to receive such prepayment and the allocation of such amount to the
amortization of the Term Loans or Existing Stone Term Facilities within such
Class or Classes) and (ii) the Borrowers may elect, subject to the requirements
of Section 2.17, to apply any mandatory prepayment of the Term Loans from Excess
------------
Cash Flow to
46
scheduled installments of principal required to be paid pursuant to
Section 2.11(a) within 24 months of the date of such prepayment.
------------
(g) The applicable Borrower shall deliver to the Administrative Agent,
(i) at the time of each prepayment by such Borrower required under paragraph
---------
(b), (c) or (d) above, a certificate signed by a Financial Officer of such
--- --- ---
Borrower setting forth in reasonable detail the calculation of the amount of
such prepayment and (ii) at least three Business Days prior to the time of each
prepayment required under this Section 2.13, a notice of such prepayment. Each
------------
notice of prepayment shall specify the prepayment date, the Class and Type of
each Loan being prepaid and the principal amount of each Loan (or portion
thereof) to be prepaid. All prepayments of Borrowings under this Section shall
be subject to Section 2.16, but shall otherwise be without premium or penalty.
------------
(h) To the extent possible consistent with paragraph (f) above, amounts
-------------
to be applied pursuant to this Section 2.13 to the prepayment of Loans shall be
------------
applied first to reduce outstanding ABR Loans and, if applicable, Canadian Prime
Rate Loans. Any amounts remaining after each such application shall, at the
option of the applicable Borrower, be applied to prepay Eurodollar Loans
immediately and/or shall be deposited in the Prepayment Account (as defined
below). The Administrative Agent shall apply any cash deposited in the
Prepayment Account (i) allocable to Term Loans to prepay Eurodollar Term Loans
and (ii) allocable to Revolving Loans to prepay Eurodollar Revolving Loans, in
each case on the last day of their respective Interest Periods (or, at the
direction of the applicable Borrower, on any earlier date) until all outstanding
Term Loans or Revolving Loans, as the case may be, have been prepaid or until
all the allocable cash on deposit with respect to such Loans has been exhausted.
For purposes of this Agreement, the term "Prepayment Account" shall mean an
------------------
account established by the applicable Borrower with the Administrative Agent and
over which the Administrative Agent shall have exclusive dominion and control,
including the exclusive right of withdrawal for application in accordance with
this paragraph (h). The Administrative Agent will, at the request of the
-------------
Borrowers, invest amounts on deposit in the Prepayment Account in Permitted
Investments that mature prior to the last day of the applicable Interest Periods
of the Eurodollar Borrowings to be prepaid; provided, however, that (i) the
-------- -------
Administrative Agent shall not be required to make any investment that, in its
sole judgment, would require or cause the Administrative Agent to be in, or
would result in any, violation of any law, statute, rule or regulation and (ii)
the Administrative Agent shall have no obligation to invest amounts on deposit
in the Prepayment Account if a Default or Event of Default shall have occurred
and be continuing. The Borrowers shall indemnify the Administrative Agent for
any losses relating to the investments so that the amount available to prepay
Eurodollar Borrowings on the last day of the applicable Interest Period is not
less than the amount that would have been available had no investments been made
pursuant thereto. Other than any interest earned on such investments, the
Prepayment Account shall not bear interest. Interest or profits, if any, on such
investments shall be deposited in the Prepayment Account and reinvested and
disbursed as specified above. If the maturity of the Loans has been accelerated
pursuant to Article VIII, the Administrative Agent may, in its sole discretion,
------------
apply all amounts on deposit in the Prepayment Account to satisfy any of the
Obligations. Each Borrower hereby grants to the Administrative Agent, for its
benefit and the benefit of the Facing Agent and the Lenders, a security interest
in the Prepayment Account to secure the Obligations.
47
(i) Notwithstanding the requirements of paragraph (f) above and
-------------
provided that no Default or Event of Default shall have occurred and be
continuing, with respect to the amount of any mandatory prepayment required
under this Agreement that is allocated to the then-outstanding Term Loans (such
amounts, the "Prepayment Amount"), the Borrowers may, not less than 10 nor more
-----------------
than 20 Business Days prior to the date specified therein for such prepayment
(the "Mandatory Prepayment Date"), provide to each Lender a written notice
-------------------------
(each, a "Prepayment Option Notice"), which shall refer to this Section 2.13(i)
------------------------ ---------------
and shall (i) set forth the Prepayment Amount and the portion thereof that the
applicable Lender (each, a "Prepayment Lender") will be entitled to receive if
-----------------
it accepts such mandatory prepayment in accordance with this paragraph (i), (ii)
-------------
request such Prepayment Lender to notify the Borrowers and the Administrative
Agent in writing no later than the Business Day prior to the Mandatory
Prepayment Date of such Prepayment Lender's acceptance or rejection (in each
case, in whole and not in part) of its share of the Prepayment Amount and (iii)
inform such Prepayment Lender that failure by such Prepayment Lender to accept
in writing its share of the Prepayment Amount on or before the Business Day
prior to the Mandatory Prepayment Date shall be deemed a rejection of such
amount. On the Mandatory Prepayment Date, the Borrowers shall apply the
aggregate amount necessary to prepay that portion of the Prepayment Amount in
respect of which such Prepayment Lenders have accepted prepayment as described
above (such Prepayment Lenders, the "Accepting Lenders") pro rata against the
-----------------
remaining installments of principal due in respect of the Term Loans of the
Accepting Lenders under Section 2.11(a). So long as no Default or Event of
---------------
Default shall have occurred and be continuing, the Borrowers shall apply any
remaining portion of the Prepayment Amount to the repayment of Indebtedness
maturing prior to the Term Loan Maturity Date. In the event that any provision
of this Section 2.13 requires prepayment of the Term Loans prior to the selected
------------
Mandatory Prepayment Date, the Borrowers shall deposit the entire amount of the
Prepayment Amount into an account under the exclusive control and dominion of
the Administrative Agent.
(j) Notwithstanding anything to the contrary contained in this
Agreement, no prepayments are required to be made with respect to the Tranche H
Loans under Section 2.11(a)(ii) or Section 2.13(c) or (d) to the extent that
------------------ -------------- ---
such prepayment or the obligation to make such prepayment would result in Canco
under any circumstances being obliged to pay more than 25% of the original
principal amount of the Tranche H Loans (the "Threshold Amount") prior to the
----------------
fifth anniversary of the Closing Date. The amount of such prepayments in excess
of the Threshold Amount (the "Excess Amount") will be allocated to the further
-------------
prepayment of the Tranche G Loans and allocated pro rata against the remaining
scheduled installments of principal due in respect of the Tranche G Loans under
Section 2.11(a)(i) until the Tranche G Loans have been paid in full. On the
------------------
Business Day immediately after the fifth anniversary of the Closing Date, the
Excess Amount not allocated to the further payment of the Tranche G Loans will
be paid to the Tranche H Lenders and allocated pro rata against the remaining
scheduled installments of principal due in respect of the Tranche H Loans under
Section 2.11(a)(ii).
SECTION 2.14. Reserve Requirements; Change in Circumstances; Increased
Costs. (a) Notwithstanding any other provision herein, if after the Closing Date
any change in applicable law or regulation or in the interpretation or
administration thereof by any Governmental Authority charged with the
interpretation or administration thereof (whether or not having the force of
law)
48
shall change the basis of taxation of payments to any Lender or the Facing
Agent of the principal of or interest on any Loan made by such Lender or any
Letter of Credit obligations, Fees or other amounts payable hereunder (other
than changes in respect of income and franchise taxes imposed on such Lender or
the Facing Agent by the jurisdiction in which such Lender or the Facing Agent is
organized or has its principal or lending office or by any political subdivision
or taxing authority thereof or therein), or shall impose, modify or deem
applicable any reserve, special deposit or similar requirement against assets
of, deposits with or for the account of or credit extended by such Lender or the
Facing Agent (except any such reserve requirement that is reflected in the
Adjusted LIBO Rate, the Alternate Base Rate or the Canadian Prime Rate) or shall
impose on such Lender or the Facing Agent or the London or Canadian interbank
market any other condition affecting this Agreement or Loans made by such
Lender, and the result of any of the foregoing shall be to increase the cost to
such Lender of making or maintaining any Loan or to reduce the amount of any sum
received or receivable by such Lender or the Facing Agent hereunder (whether of
principal, interest or otherwise) by an amount deemed by such Lender or the
Facing Agent to be material, then the applicable Borrower will pay to such
Lender or the Facing Agent following receipt by such Borrower of a certificate
of such Lender or the Facing Agent to such effect in accordance with Section
-------
2.14(c) such additional amount or amounts as will compensate such Lender or the
-------
Facing Agent on an after-tax basis for such additional costs incurred or
reduction suffered; provided, however, that no Lender or the Facing Agent shall
-------- -------
be entitled to demand compensation pursuant to this paragraph (a) if it shall
-------------
not be the general practice of such Lender or the Facing Agent, as applicable,
to demand such compensation in similar circumstances under comparable provisions
of other comparable credit agreements.
(b) If any Lender or the Facing Agent shall have determined that the
adoption after the Closing Date of any law, rule, regulation, agreement or
guideline regarding capital adequacy, or any change in any of the foregoing or
in the interpretation or administration of any of the foregoing by any
Governmental Authority, central bank or comparable agency charged with the
interpretation or administration thereof, or compliance by any Lender (or any
lending office of such Lender) or the Facing Agent or any Lender's or the Facing
Agent's holding company, if any, with any request or directive regarding capital
adequacy issued under any law, rule, regulation or guideline (whether or not
having the force of law) of any such Governmental Authority, central bank or
comparable agency, has or would have the effect of reducing the rate of return
on such Lender's or the Facing Agent's capital or on the capital of such
Lender's or the Facing Agent's holding company, if any, as a consequence of this
Agreement or the Loans made by such Lender or the Letters of Credit issued by
the Facing Agent pursuant hereto to a level below that which such Lender or the
Facing Agent or such Lender's or the Facing Agent's holding company, if any,
could have achieved but for such applicability, adoption, change or compliance
(taking into consideration such Lender's or the Facing Agent's policies and the
policies of such Lender's or the Facing Agent's holding company, if any, with
respect to capital adequacy) by an amount deemed by such Lender or the Facing
Agent to be material, then from time to time the applicable Borrower shall pay
to such Lender or the Facing Agent following receipt by such Borrower of a
certificate of such Lender or the Facing Agent to such effect in accordance with
Section 2.14(c) such additional amount or amounts as will compensate such Lender
---------------
or the Facing Agent or such Lender's or the Facing Agent's holding company, if
any, on an after-tax basis for any such reduction suffered; provided, however,
-------- -------
that no Lender or the Facing
49
Agent shall be entitled to demand compensation pursuant to this paragraph (b) if
---------
it shall not be the general practice of such Lender or the Facing Agent, as
applicable, to demand such compensation in similar circumstances under
comparable provisions of other comparable credit agreements.
(c) A certificate of each Lender or the Facing Agent setting forth such
amount or amounts as shall be necessary to compensate such Lender or the Facing
Agent or its holding company, if any, as specified in paragraph (a) or (b)
------------- ---
above, as the case may be, and setting forth in reasonable detail an explanation
of the basis of requesting such compensation in accordance with paragraph (a) or
-------------
(b) above, including calculations in reasonable detail, shall be delivered to
---
the applicable Borrower and shall be conclusive absent manifest error. The
applicable Borrower shall pay each Lender or the Facing Agent the amount shown
as due on any such certificate delivered by it within 10 days after its receipt
of the same.
(d) Failure on the part of any Lender or the Facing Agent to demand
compensation for any increased costs or reduction in amounts received or
receivable or reduction in return on capital with respect to any period shall
not constitute a waiver of such Lender's or the Facing Agent's right to demand
compensation with respect to such period or any other period, except that no
Lender or the Facing Agent shall be entitled to compensation under this Section
-------
2.14 for any costs incurred or reduction suffered with respect to any date
----
unless such Lender or the Facing Agent, as applicable, shall have notified the
applicable Borrower that it will demand compensation for such costs or
reductions under paragraph (c) above, not more than six months after the later
-------------
of (i) such date and (ii) the date on which such Lender or the Facing Agent, as
applicable, shall have become aware of such costs or reductions. The protection
of this Section 2.14 shall be available to each Lender or the Facing Agent
------------
regardless of any possible contention of the invalidity or inapplicability of
the law, rule, regulation, guideline or other change or condition that shall
have occurred or been imposed.
SECTION 2.15. Change in Legality. (a) Notwithstanding any other
provision herein, if after the Closing Date any change in any law or regulation
or in the interpretation thereof by any Governmental Authority charged with the
administration or interpretation thereof shall make it unlawful for any Lender
to make or maintain any Eurodollar Loan or Revolving Loan denominated in U.S.
Dollars or to give effect to its obligations as contemplated hereby with respect
to any Eurodollar Loan or Revolving Loan denominated in U.S. Dollars, then, by
written notice to the applicable Borrower and to the Administrative Agent, such
Lender may:
(i) declare that Eurodollar Loans or Revolving Loans
denominated in U.S. Dollars will not thereafter be made by such Lender
hereunder, whereupon any request by the applicable Borrower for a
Eurodollar Revolving Credit Borrowing or a Borrowing denominated in
U.S. Dollars shall, as to such Lender only, be deemed a request for an
ABR Loan or a Revolving Loan denominated in Canadian Dollars,
respectively, unless such declaration shall be subsequently withdrawn;
and
(ii) require that all outstanding Eurodollar Loans or
Revolving Loans denominated in U.S. Dollars made by it be converted to
ABR Loans or Revolving Loans denominated in Canadian Dollars,
respectively, in which event all such Eurodollar Loans or Revolving
Loans
50
denominated in U.S. Dollars, as the case may be, shall be automatically
converted to ABR Loans and Revolving Loans denominated in Canadian
Dollars, respectively, as of the effective date of such notice as
provided in paragraph (b) below.
-------------
In the event any Lender shall exercise its rights under clause (i) or (ii)
---------- ----
above, all payments and prepayments of principal that would otherwise have been
applied to repay the Eurodollar Loans or the Revolving Loans denominated in U.S.
Dollars that would have been made by such Lender or the converted Eurodollar
Loans or Revolving Loans denominated in U.S. Dollars of such Lender shall
instead be applied to repay the ABR Loans or Revolving Loans denominated in
Canadian Dollars made by such Lender in lieu of, or resulting from the
conversion of, such Eurodollar Loans or Revolving Loans denominated in U.S.
Dollars, as the case may be.
(b) For purposes of this Section 2.15, a notice to the applicable
-------------
Borrower by any Lender shall be effective as to each Eurodollar Loan or
Revolving Loan denominated in U. S. Dollars if lawful, on the last day of the
Interest Period currently applicable to such Eurodollar Loan or Revolving Loan
denominated in U. S. Dollars, as the case may be; in all other cases, such
notice shall be effective on the date of receipt by such Borrower.
SECTION 2.16. Indemnity. Each Borrower shall indemnify each Lender
against any loss or expense that such Lender may sustain or incur with respect
to Eurodollar Loans as a consequence of (a) any failure by any Borrower to
fulfill on the date of any Borrowing hereunder the applicable conditions set
forth in Article V, (b) any failure by such Borrower to borrow or to refinance,
---------
convert or continue any Loan hereunder after irrevocable notice of such
borrowing, refinancing, conversion or continuation has been given pursuant to
Section 2.03 or 2.10, (c) any payment, prepayment or conversion of a Eurodollar
------------ ----
Loan or B/A Loan required or permitted by any other provision of this Agreement
or otherwise, or any assignment of a Eurodollar Loan or B/A Loan required by
Section 2.21(b), in each case made or deemed made on a date other than the last
---------------
day of the Interest Period or Contract Period, as the case may be, applicable
thereto, (d) any purchase of a participation pursuant to Article X of a
----------
Eurodollar Loan or a B/A Loan of such Borrower otherwise made or deemed made on
a date other than the last day of the Interest Period or Contract Period
therefor, or (e) any default in payment or prepayment of the principal amount of
any Loan or any part thereof or interest accrued thereon, as and when due and
payable (at the due date thereof, whether at scheduled maturity, by
acceleration, irrevocable notice of prepayment or otherwise), including, in each
such case, any loss or reasonable expense sustained or incurred or to be
sustained or incurred in liquidating or employing deposits from third parties
acquired to effect or maintain such Loan or any part thereof as a Eurodollar
Loan or B/A Loan, as the case may be. Such loss or reasonable expense shall be
equal to the sum of (a) such Lender's actual costs and expenses incurred (other
than any lost profits) in connection with, or by reason of, any of the foregoing
events and (b) an amount equal to the excess, if any, as reasonably determined
by such Lender of (i) its cost of obtaining the funds for the Loan being paid,
prepaid, converted or not borrowed, converted or continued (assumed to be the
Adjusted LIBO Rate or the Discount Rate, as applicable, applicable thereto) for
the period from and including the date of such payment, prepayment, conversion
or failure to borrow, convert or continue to but excluding the last day of the
Interest Period or Contract Period, as the case may be for such Loan (or, in the
case of a failure to borrow, convert or continue, the Interest Period for such
Loan
51
that would have commenced on the date of such failure) over (ii) the amount of
interest (as reasonably determined by such Lender) that would be realized by
such Lender in reemploying the funds so paid, prepaid, converted or not
borrowed, converted or continued for such period, Interest Period or Contract
Period, as the case may be. A certificate of any Lender setting forth any amount
or amounts, including calculations in reasonable detail, that such Lender is
entitled to receive pursuant to this Section 2.16 shall be delivered to the
------------
applicable Borrower and shall be conclusive absent manifest error.
SECTION 2.17. Pro Rata Treatment. Except as required under Section 2.15
------------
or permitted under Section 2.13(h), each Borrowing, each payment or prepayment
---------------
of principal of any Borrowing, each payment of interest on the Loans, each
payment of the Commitment Fees, each payment of the LC Participation Fees, each
reduction of the Commitments and each refinancing of any Borrowing with,
conversion of any Borrowing to or continuation of any Borrowing as a Borrowing
of any Type shall be allocated pro rata among the Lenders in accordance with
their respective applicable Commitments (provided that in the event that such
--------
Commitments shall have expired or been terminated, such pro rata allocation
shall be based on the respective principal amounts of the outstanding Loans).
Each Lender agrees that in computing such Lender's portion of any Borrowing to
be made hereunder, the Administrative Agent may, in its discretion, round each
Lender's percentage of such Borrowing, computed in accordance with Section 2.01,
------------
to the next higher or lower whole U.S. Dollar or Canadian Dollar amount, as
applicable. In addition, each Lender agrees that the Administrative Agent may,
in its sole discretion, increase or reduce any Revolving Lender's portion of a
B/A Loan to the extent provided in Section 2.22(e).
SECTION 2.18. Sharing of Setoffs. Each Lender agrees that if it shall,
through the exercise of a right of banker's lien, setoff or counterclaim against
any Loan Party, or pursuant to a secured claim under any applicable Insolvency
Law or other security or interest arising from, or in lieu of, such secured
claim, received by such Lender under any applicable Insolvency Law or otherwise,
or by any other means, obtain payment (voluntary or involuntary) in respect of
any Loan or Loans or LC Exposure as a result of which the unpaid principal
portion of its Loans or its LC Exposure shall be proportionately less than the
unpaid principal portion of the Loans of any other Lender or any other Lender's
LC Exposure, such Lender shall be deemed simultaneously to have purchased from
such other Lender at face value, and shall promptly pay to such other Lender the
purchase price for, a participation in the Loans of such other Lender or the LC
Exposure of such other Lender, so that the aggregate unpaid principal amount of
the Loans, LC Exposure and participation in Loans and LC Exposure held by each
Lender shall be in the same proportion to the aggregate unpaid principal amount
of all Loans and LC Exposure then outstanding as the principal amount of such
Lender's Loans and LC Exposure prior to such exercise of banker's lien, setoff
or counterclaim or other event was to the principal amount of all Loans and LC
Exposure outstanding prior to such exercise of banker's lien, setoff or
counterclaim or other event; provided, however, that if any such purchase or
-------- -------
purchases or adjustments shall be made pursuant to this Section 2.18 and the
------------
payment giving rise thereto shall thereafter be recovered, such purchase or
purchases or adjustments shall be rescinded to the extent of such recovery and
the purchase price or prices or adjustment restored without interest. Each
Borrower expressly consents to the foregoing arrangements and agrees that any
Lender holding a participation in a Loan or LC Exposure deemed to have been so
purchased may
52
exercise any and all rights of banker's lien, setoff or counterclaim with
respect to any and all moneys owing by the Loan Parties to such Lender by reason
thereof as fully as if such Lender had made a Loan directly to the applicable
Borrower in the amount of such participation.
SECTION 2.19. Payments. (a) Each Borrower shall make each payment
(including principal of or interest on any Loan or any Fees or other amounts)
hereunder and under any other Loan Document not later than 12:00 noon, Standard
Time, on the date when due in immediately available U.S. Dollars or Canadian
Dollars, as applicable, without defense, setoff or counterclaim. Each such
payment (other than (i) the payments specified in Sections 2.05(c)(ii) and (iii)
-------------------- -----
and paragraph (d) of Article III, which shall be paid directly to the Facing
------------- -----------
Agent) shall be made to such account of the Administrative Agent or the Canadian
Administrative Agent, as applicable, as such Agent shall specify by notice to
the applicable Borrower. Payments made directly to the Facing Agent shall be
made to such account of the Facing Agent as the Facing Agent shall specify by
notice to Canco. Any payments received by the Administrative Agent, the Canadian
Administrative Agent or the Facing Agent after the specified time for receipt of
such payment on any day shall be deemed to have been received on the next
Business Day. The Administrative Agent or the Canadian Administrative Agent, as
applicable, shall distribute to the applicable Lenders all payments received by
it for their respective accounts, promptly following receipt thereof.
(b) Whenever any payment (including principal of or interest on any
Borrowing or any Fees or other amounts) hereunder or under any other Loan
Document shall become due, or otherwise would occur, on a day that is not a
Business Day, such payment may be made on the next succeeding Business Day, and
such extension of time shall in such case be included in the computation of
interest or Fees, if applicable.
SECTION 2.20. Taxes. (a) Any and all payments by the Loan Parties
hereunder shall be made, in accordance with Section 2.19, free and clear of and
------------
without deduction for any and all current or future taxes, levies, imposts,
deductions, charges or withholdings, and all liabilities with respect thereto,
excluding taxes imposed on the net income of the Administrative Agent or the
---------
Facing Agent or any Lender (or any transferee or assignee thereof, including a
participation holder (any such entity being called a "Transferee")), and
----------
franchise taxes imposed on the Administrative Agent or the Facing Agent or any
Lender (or Transferee), by the United States, Canada or any jurisdiction under
the laws of which the Administrative Agent or the Facing Agent or any such
Lender (or Transferee) is organized or in which the Administrative Agent or the
Facing Agent or any such Lender (or Transferee) has its principal office or
lending office or any political subdivision or taxing authority thereof or
therein (all such nonexcluded taxes, levies, imposts, deductions, charges,
withholdings and liabilities being hereinafter referred to as "Taxes"). If any
-----
Taxes are required to be deducted from or in respect of any sum payable
hereunder to any Lender (or any Transferee), the Administrative Agent or the
Facing Agent, (i) the sum payable shall be increased by the amount necessary so
that after making all required deductions (including deductions applicable to
additional sums payable under this Section 2.20) such Lender (or Transferee),
------------
the Administrative Agent or the Facing Agent (as the case may be) shall receive
an amount equal to the sum it would have received had no such deductions been
made, (ii) the Borrowers shall make such deductions and (iii) the Borrowers
shall pay the full amount deducted to the relevant taxing authority or other
Governmental Authority in
53
accordance with applicable law; provided, however, that no Transferee of any
-------- -------
Lender shall be entitled to receive any greater payment under this paragraph (a)
-------------
than such Lender would have been entitled to receive with respect to the rights
assigned, participated or otherwise transferred unless (x) such assignment,
participation or transfer shall have been made at a time when the circumstances
(including a Change of Law) giving rise to such greater payment did not exist or
had not yet occurred, (y) such assignment, participation or transfer shall have
been at the request of the Borrowers or (z) such assignment, participation or
transfer shall have been made pursuant to Section 2.18 or Article X.
------------ ---------
(b) Each Borrower agrees to pay any current or future stamp, intangible
or documentary taxes or any other excise or property taxes, charges or similar
levies (including, without limitation, mortgage recording taxes and similar
fees) that arise from any payment made hereunder or from the execution, delivery
or registration of, or otherwise with respect to, this Agreement, any Assignment
and Acceptance entered into at the request of either Borrower or any other Loan
Document (hereinafter referred to as "Other Taxes").
-----------
(c) Each Borrower will indemnify each Lender (or Transferee), the
Administrative Agent and the Facing Agent for the full amount of Taxes and Other
Taxes (including any Taxes or Other Taxes on amounts payable under this Section
-------
2.20) paid by such Lender (or Transferee), the Administrative Agent or the
----
Facing Agent, as the case may be, and any liability (including penalties,
interest and reasonable expenses) arising therefrom or with respect thereto,
whether or not such Taxes or Other Taxes were correctly or legally asserted by
the relevant taxing authority or other Governmental Authority. Such
indemnification shall be made within 30 days after the date any Lender (or
Transferee), the Administrative Agent or the Facing Agent, as the case may be,
makes written demand therefor (which demand shall identify the nature and amount
of Taxes and Other Taxes for which indemnification is being sought and shall
include a copy of the relevant portion of any written assessment from the
relevant taxing authority demanding payment of such Taxes or Other Taxes, unless
the Lender (or Transferee), the Administrative Agent or the Facing Agent, as the
case may be, determines, in its sole discretion, that such portion of any such
assessment is confidential). If a Lender (or Transferee), the Administrative
Agent or the Facing Agent shall become aware that it is entitled to receive a
refund in respect of Taxes or Other Taxes as to which it has been indemnified by
the applicable Borrower pursuant to this Section 2.20, it shall promptly notify
------------
such Borrower of the availability of such refund and shall, within 30 days after
receipt of a request by the applicable Borrower, apply for such refund at such
Borrower's expense. If any Lender (or Transferee), the Administrative Agent or
the Facing Agent receives a refund in respect of any Taxes or Other Taxes as to
which it has been indemnified by either Borrower pursuant to this Section 2.20,
------------
it shall promptly notify such Borrower of such refund and shall, within 30 days
of receipt, repay such refund (to the extent of amounts that have been paid by
such Borrower under this Section 2.20 with respect to such refund and not
------------
previously reimbursed) to such Borrower, net of all reasonable out-of-pocket
expenses of such Lender, the Administrative Agent or the Facing Agent and
without interest (other than the interest, if any, included in such refund net
of any Taxes payable with respect to receipt of such refund), provided that such
--------
Borrower, upon the request of such Lender (or Transferee), the Administrative
Agent or the Facing Agent, agrees to return such refund (plus penalties,
----
interest or other charges) to such Lender (or Transferee), the Administrative
Agent or the Facing Agent in the
54
event such Lender (or Transferee), the Administrative Agent or the Facing Agent
is required to repay such refund.
(d) Within 30 days after the date of any payment of Taxes or Other Taxes
withheld by either Borrower in respect of any payment to any Lender (or
Transferee), the Administrative Agent or the Facing Agent, such Borrower will
furnish to the Administrative Agent, at the addresses referred to in Section
-------
11.01, the original or a certified copy of a receipt evidencing payment thereof
-----
or other evidence reasonably satisfactory to such Lender (or Transferee), the
Administrative Agent or the Facing Agent, as the case may be.
(e) Without prejudice to the survival of any other agreement contained
herein, the agreements and obligations contained in this Section 2.20 shall
------------
survive the payment in full of the principal of and interest on all Loans made
hereunder.
(f) Each of the Administrative Agent, the Facing Agent and any Tranche G
Lender (or Transferee thereof) that is not incorporated or otherwise formed
under the laws of the United States of America or a state thereof (a "Non-U.S.
--------
Person") agrees that it shall on the date it becomes a Lender (or Transferee),
------
the Administrative Agent or the Facing Agent hereunder, deliver to Stone and the
Administrative Agent (x) one duly completed copy of United States Internal
Revenue Service Form 1001 or 4224 (or replacement or successor forms thereto),
or (y) in the case of Tranche G Lenders (or Transferees thereof) exempt from
United States Federal withholding tax pursuant to Sections 871(h) or 881(c) of
the Code, one duly completed copy of a United States Internal Revenue Service
Form W-8 (or successor form) (including Form W-8BEN (Certificate of Foreign
Status of Beneficial Owner for United States Tax Withholding) and Form W-8ECI
(Certificate of Foreign Person's Claim for Exemption From Withholding or Income
Effectively Connected with the Conduct of a Trade or Business in the United
States)) and a certificate representing that such Non-U.S. Person is not a bank
for purposes of Section 881(c) of the Code, or any successor applicable form of
any thereof, certifying in each case that such Tranche G Lender (or Transferee
thereof), the Administrative Agent or the Facing Agent is entitled to receive
payments hereunder payable to it without deduction or withholding of any United
States Federal income taxes, or subject to a reduced rate thereof. Each of the
Administrative Agent or the Facing Agent or any Tranche G Lender (or Transferee
thereof) that delivers to Stone and the Administrative Agent any such form or
certification further undertakes to deliver to Stone and the Administrative
Agent further copies of any such form or certification or other manner of
certification reasonably satisfactory to Stone on or before the date that any
such form or certification expires or becomes obsolete or of the occurrence of
any event requiring a change in the most recent forms or certifications
previously delivered by it to Stone or the Administrative Agent, and such
extensions or renewals thereof as may reasonably be requested by Stone or the
Administrative Agent, certifying that the Administrative Agent, Facing Agent or
such Tranche G Lender (or Transferee thereof), as the case may be, is entitled
to receive payments hereunder without deduction or withholding of any United
States Federal income taxes, or subject to a reduced rate thereof. If at any
time there has occurred, on or prior to the date on which any delivery of any
such form or certification would otherwise be required, any change in law, rule,
regulation, treaty, convention or directive, or any change in the interpretation
or application of any thereof ("Change of Law"), that renders all such forms or
-------------
certification inapplicable or which would
55
prevent the Administrative Agent, Facing Agent or such Tranche G Lender (or
Transferee thereof), as the case may be, from duly completing and delivering any
such form or certification with respect to it, the Administrative Agent, Facing
Agent or such Tranche G Lender (or Transferee thereof), as the case may be,
shall advise Stone that under applicable law it shall be subject to withholding
of United States Federal income tax at the full statutory rate, a reduced rate
of withholding or without deduction or withholding. A Non-U.S. Person shall be
required to furnish any such form or certification only if it is entitled to
claim an exemption from, or a reduced rate of, withholding. Each of the
Administrative Agent, the Facing Agent and any Tranche G Lender that is a Non-
U.S. Person and that is a party hereto as of the Closing Date hereby represents
and warrants that, as of the Closing Date, all payments made to it hereunder are
exempt from withholding of United States Federal income taxes (x) because such
payments are effectively connected with a United States trade or business
conducted by such Non-U.S. Person; (y) pursuant to the terms of an income tax
treaty between the United States and such Non-U.S. Person's country of
residence; or (z) because such payments are portfolio interest exempt pursuant
to Section 871(h) or 881(c) of the Code. Notwithstanding any provision of
paragraph (a) above to the contrary, Stone shall not have any obligation to pay
-------------
any Taxes or Other Taxes or to indemnify any Tranche G Lender (or Transferee
thereof), the Administrative Agent or the Facing Agent for such Taxes or Other
Taxes pursuant to this Section 2.20 to the extent that such Taxes or Other Taxes
------------
result from (x) the failure of any Tranche G Lender (or Transferee thereof), the
Administrative Agent or the Facing Agent to comply with its obligations pursuant
to this paragraph (f) or (y) any representation made on any such form or
-------------
certification (or successor applicable form or certification) by the Tranche G
Lender (or Transferee thereof), the Administrative Agent or the Facing Agent
incurring such Taxes or Other Taxes proving to have been incorrect, false or
misleading in any material respect when so made or deemed to be made. Nothing
contained herein shall require the Administrative Agent, the Facing Agent or any
Tranche G Lender (or Transferee thereof) to make its tax returns (or any other
information relating to its taxes which it deems confidential) available to
Stone or any other person.
(g) Each of the Administrative Agent, the Facing Agent, and any Tranche H
Lender (or Transferee thereof) that is entitled to an exemption from or
reduction of withholding tax under the laws of Canada, or any treaty to which
Canada is a party, with respect to payment in connection with the Tranche H
Loans under this Agreement shall, upon request by the Administrative Agent,
deliver to Canco (with a copy to the Administrative Agent), such properly
completed and executed documentation prescribed by applicable law or reasonably
requested by Canco as will permit such payments to be made without withholding
or at a reduced rate. Notwithstanding any provision of paragraph (a) above to
-------------
the contrary, Canco shall have no obligation to pay any Taxes or Other Taxes or
to indemnify any Tranche H Lender or Revolving Lender (or Transferee thereof),
the Administrative Agent or the Facing Agent for such Taxes or Other Taxes
pursuant to this Section 2.20 to the extent that such Taxes or Other Taxes
------------
result from (x) the failure of any Tranche H Lender or Revolving Lender, the
Administrative Agent or the Facing Agent to comply with its obligations pursuant
to this paragraph (g) (provided, however, that no Tranche H Lender shall be
------------- -------- -------
required to provide any documentation that it is not legally able to provide) or
(y) any representation made in any such documentation by the Tranche H Lender,
Revolving Lender, the Administrative Agent or the Facing Agent incurring such
Taxes or Other Taxes proving to have been incorrect, false or misleading in any
material respect when so made or deemed to be made. Nothing contained herein
56
shall require the Administrative Agent, the Facing Agent or any Tranche H Lender
or Revolving Lender (or Transferee thereof) to make its tax returns (or any
other information relating to its taxes which it deems confidential) available
to Canco or any other Person.
SECTION 2.21. Duty to Mitigate; Assignment of Commitments under Certain
Circumstances. (a) Any of the Administrative Agent, the Facing Agent or any
Lender (or Transferee) claiming any additional amounts payable pursuant to
Section 2.14 or Section 2.20 or exercising its rights under Section 2.15 shall
------------ ------------ ------------
use reasonable efforts (consistent with legal and regulatory restrictions) to
file any certificate or document requested by either Borrower or to change the
jurisdiction of its applicable lending office if the making of such filing or
change would avoid the need for or reduce the amount of any such additional
amounts that may thereafter accrue or avoid the circumstances giving rise to
such exercise and would not, in the sole determination of such Lender (or
Transferee), the Administrative Agent or the Facing Agent, as the case may be,
require it to incur additional costs or be otherwise disadvantageous to such
Lender (or Transferee), the Administrative Agent or the Facing Agent.
(b) In the event that any Lender shall have delivered a notice or
certificate pursuant to Section 2.14 or 2.15, or either Borrower shall be
------------ ----
required to make additional payments to any Lender under Section 2.20, the
------------
applicable Borrower shall have the right, but not the obligation, at its own
expense (including with respect to the processing and recordation fee referred
to in Section 11.04(b)), upon notice to such Lender and the Administrative
-----------------
Agent, to replace such Lender with an assignee (in accordance with and subject
to the restrictions contained in Section 11.04(b)) approved by the
Administrative Agent (which approval shall not be unreasonably withheld), and
such Lender hereby agrees to transfer and assign without recourse (in accordance
with and subject to the restrictions contained in Section 11.04(b)) all its
-----------------
interests, rights and obligations under this Agreement to such assignee;
provided, however, that no Lender shall be obligated to make any such assignment
-------- -------
unless (i) such assignment shall not conflict with any law or any rule,
regulation or order of any Governmental Authority, (ii) such assignee shall pay
to the affected Lender in immediately available funds on the date of such
assignment the principal of the Loans made by such Lender hereunder and (iii)
the applicable Borrower shall pay to the affected Lender in immediately
available funds on the date of such assignment the interest accrued to the date
of payment on the Loans made by such Lender hereunder and all other amounts
accrued for such Lender's account or owed to it hereunder.
(c) If, in connection with any proposed amendment, modification, change,
waiver, discharge or termination to any of the provisions of this Agreement as
contemplated by Section 11.08(b), the consent of the Required Lenders is
----------------
obtained but the consent of one or more of such other Lenders whose consent is
required is not obtained, then the Borrower shall have the right, but not the
obligation, at its own expense (including with respect to the processing and
recordation fee referred to in Section 11.04(b)) upon notice to such Lender and
-----------------
the Administrative Agent, so long as all non-consenting Lenders whose individual
consent is required are treated as described below, to replace each such non-
consenting Lender or Lenders (or, at the option of the Borrower if the
respective Lender's consent is required with respect to less than all Loans, to
replace only the respective Loans of the respective non-consenting Lender which
gave rise to the need to obtain such Lender's individual consent) with an
assignee (in accordance with and subject to the restrictions contained in
57
Section 11.04(b)) approved by the Administrative Agent (which approval shall not
be unreasonably withheld) so long as at the time of such replacement, each such
assignee consents to the proposed amendment, modification, change, waiver,
discharge or termination; provided, however, that no Lender shall be obligated
to make any such assignment unless (i) such assignment shall not conflict with
any law or any rule, regulation or order of any Governmental Authority, (ii)
such assignee shall pay to the non-consenting Lender in immediately available
funds on the date of such assignment the principal of the Loans made by such
Lender hereunder and subject to such assignment and (iii) the Borrower shall pay
to the non-consenting Lender in immediately available funds on the date of such
assignment the interest accrued to the date of payment on the Loans made by such
Lender hereunder and subject to such assignment and all other amounts accrued
for such Lender's account or owed to it hereunder with respect to such Loans.
SECTION 2.22. Bankers' Acceptances. (a) Subject to the terms and
conditions of this Agreement, Canco may request a Revolving Credit Borrowing
denominated in Canadian Dollars by presenting drafts for acceptance and, if
applicable, purchase as B/A's by the Revolving Lenders.
(b) No Contract Period with respect to a B/A to be accepted and, if
applicable, purchased as a Revolving Loan shall extend beyond the Revolving
Credit Maturity Date. All B/A's and B/A Loans shall be denominated in Canadian
Dollars.
(c) To facilitate availment of B/A Loans, Canco hereby appoints each
Revolving Lender as its attorney to sign and endorse on its behalf (in
accordance with a notice of Borrowing relating to a B/A Loan pursuant to Section
2.03 or Section 2.10), in handwriting or by facsimile or mechanical signature as
and when deemed necessary by such Revolving Lender, blank forms of B/A's in the
form requested by such Revolving Lender. In this respect, it is each Revolving
Lender's responsibility to maintain an adequate supply of blank forms of B/A's
for acceptance under this Agreement. Canco recognizes and agrees that all B/A's
signed and/or endorsed by a Revolving Lender on behalf of Canco shall bind Canco
as fully and effectually as if signed in the handwriting of and duly issued by
the proper signing officers of Canco. Each Revolving Lender is hereby authorized
(in accordance with a notice of Borrowing relating to a B/A Loan) to issue such
B/A's endorsed in blank in such face amounts as may be determined by such
Revolving Lender; provided that the aggregate amount thereof is equal to the
aggregate amount of B/A's required to be accepted and purchased by such
Revolving Lender. No Revolving Lender shall be liable for any damage, loss or
other claim arising by reason of any loss or improper use of any such instrument
except for the gross negligence or wilful misconduct of the Revolving Lender or
its officers, employees, agents or representatives. Each Revolving Lender shall
maintain a record, which shall be made available to Canco upon its request, with
respect to B/A's (i) received by it in blank hereunder, (ii) voided by it for
any reason, (iii) accepted and purchased by it hereunder, and (iv) canceled at
their respective maturities. On request by or on behalf of Canco, a Revolving
Lender shall cancel all forms of B/A's which have been pre-signed or pre-
endorsed on behalf of Canco and that are held by such Revolving Lender and are
not required to be issued in accordance with Canco's irrevocable notice.
Alternatively, Canco agrees that, at the request of the Canadian Administrative
Agent, Canco shall deliver to the Canadian Administrative Agent a "depository
note" which complies with the requirements of the Depository Bills and Notes Act
(Canada), and consents to the deposit of any such depository note in the book-
based debt clearance system maintained by the Canadian Depository for
Securities.
58
(d) Drafts of Canco to be accepted as B/A's hereunder shall be signed as
set forth in this Section 2.22. Notwithstanding that any Person whose signature
------------
appears on any B/A may no longer be an authorized signatory for any Lender or
Canco at the date of issuance of a B/A, such signature shall nevertheless be
valid and sufficient for all purposes as if such authority had remained in force
at the time of such issuance and any such B/A so signed shall be binding on
Canco.
(e) Promptly following the receipt of a notice of borrowing specifying a
Revolving Credit Borrowing by way of B/A's, the Canadian Administrative Agent
shall so advise the Revolving Lenders and shall advise each Revolving Lender of
the aggregate face amount of the B/A's to be accepted by it and the applicable
Contract Period (which shall be identical for all Revolving Lenders). In the
case of Revolving Loans comprised of B/A Loans, the aggregate face amount of the
B/A's to be accepted by a Revolving Lender shall be in a minimum aggregate
amount of Cdn.$100,000 and shall be a whole multiple of Cdn.$100,000, and such
face amount shall be in the Revolving Lenders' pro rata portions of such
Revolving Borrowing, provided that the Administrative Agent may in its sole
--------
discretion increase or reduce any Revolving Lender's portion of such B/A Loan to
the nearest Cdn.$100,000 without reducing the aggregate Revolving Credit
Commitments.
(f) Canco may specify in a notice of borrowing pursuant to Section 2.03 or
------------
Section 2.10 that it desires that any B/A's requested by such notice of
------------
borrowing be purchased by the Revolving Lenders, in which case the Revolving
Lenders shall, upon acceptance of a B/A by a Revolving Lender, purchase, or
arrange for the purchase of, each B/A from Canco at the Discount Rate for such
Revolving Lender applicable to such B/A accepted by it and provide to the
Canadian Administrative Agent the Discount Proceeds for the account of Canco.
The Acceptance Fee payable by Canco to a Revolving Lender under Section 2.06(d)
---------------
in respect of each B/A accepted by such Revolving Lender shall be set off
against the Discount Proceeds payable by such Revolving Lender under this
Section 2.22.
------------
(g) Each Revolving Lender may at any time and from time to time hold, sell,
rediscount or otherwise dispose of any or all B/A's accepted and purchased by
it.
(h) If a Revolving Lender is not a chartered bank under the Bank Act
(Canada) or if a Revolving Lender notifies the Canadian Administrative Agent in
writing that it is otherwise unable to accept Bankers' Acceptances, such
Revolving Lender will, instead of accepting and, if applicable, purchasing
Bankers' Acceptances, make an advance (a "B/A Equivalent Loan") to Canco in the
-------------------
amount and for the same term as the draft that such Revolving Lender would
otherwise have been required to accept and purchase hereunder. Each such
Revolving Lender will provide to the Canadian Administrative Agent the Discount
Proceeds of such B/A Equivalent Loan for the account of Canco. Each such B/A
Equivalent Loan will bear interest at the same rate that would result if such
Lender had accepted (and been paid an Acceptance Fee) and purchased (on a
discounted basis at the Discount Rate) a Bankers' Acceptance for the relevant
Contract Period (it being the intention of the parties that each such B/A
Equivalent Loan shall have the same economic consequences for the Lenders and
Canco as the Bankers' Acceptance which such B/A Equivalent Loan replaces). All
such interest shall be paid in advance on the date such B/A Equivalent Loan is
made, and will be deducted
59
from the principal amount of such B/A Equivalent Loan in the same manner in
which the Discount Proceeds of a Bankers' Acceptance would be deducted from the
face amount of the Bankers' Acceptance.
(i) Canco waives presentment for payment and any other defense to payment
of any amounts due to a Revolving Lender in respect of a B/A accepted and
purchased by it pursuant to this Agreement which might exist solely by reason of
such B/A being held, at the maturity thereof, by such Revolving Lender in its
own right, and Canco agrees not to claim any days of grace if such Revolving
Lender, as holder, sues Canco on the B/A for payment of the amount payable by
Canco thereunder. On the last day of the Contract Period of a B/A, or such
earlier date as may be required or permitted pursuant to the provisions of this
Agreement, Canco shall pay the Revolving Lender that has accepted and purchased
such B/A the full face amount of such B/A and, after such payment, Canco shall
have no further liability in respect of such B/A and such Revolving Lender shall
be entitled to all benefits of, and be responsible for all payments due to third
parties under, such B/A.
(j) Except as required by any Revolving Lender upon the occurrence of an
Event of Default, no B/A Loan may be repaid by Canco prior to the expiry date of
the Contract Period applicable to such B/A Loan; provided, however, that any B/A
-------- -------
Loan may be defeased as provided in the proviso to Section 2.12(a).
---------------
SECTION 2.23. Pro Rata Treatment of Loans and Existing Stone Credit
Agreement. Notwithstanding any other provision herein, any funds to be used to
prepay Loans or reduce Revolving Credit Commitments pursuant to Section 2.13(b),
---------------
(c) or (d) shall be allocated pro rata between (a) the Term Loans and Revolving
--- ---
Credit Commitments, on the one hand, and (b) the loans under the Existing Stone
Credit Agreement and commitments in respect thereof, on the other hand, based
upon the aggregate outstanding amount of (i) the Loans, LC Exposure and unused
Commitments, on the one hand, and (ii) the loans, letter of credit exposure and
unused commitments under the Existing Stone Credit Agreement, on the other hand,
on the date of prepayment; provided, however, that (i) any Asset Sale of
-------- -------
Collateral or Existing Stone Collateral shall not be subject to such pro rata
allocation and (ii) any such allocation shall be subject to the proviso
contained in Section 2.13(f). The pro rata amount allocated to Loans in
---------------
accordance with this Section 2.23 shall be applied as otherwise required by this
------------
Agreement.
60
ARTICLE III
Letters of Credit
Subject to the terms and conditions set forth herein, Canco may request the
issuance of Letters of Credit denominated in U.S. Dollars or Canadian Dollars
for its own account, in a form reasonably acceptable to the Administrative Agent
and the Facing Agent, at any time and from time to time prior to the date that
is 30 days before the Revolving Credit Maturity Date. In the event of any
inconsistency between the terms and conditions of this Agreement and the terms
and conditions of any form of letter of credit application or other agreement
submitted by Canco to, or entered into by Canco with, the Facing Agent relating
to any Letter of Credit, the terms and conditions of this Agreement shall
control. Each Letter of Credit is subject to the following terms and conditions:
(a) Notice of Issuance, Amendment, Renewal, Extension; Certain Conditions.
To request the issuance of a Letter of Credit (or the amendment, renewal or
extension of an outstanding Letter of Credit), Canco shall hand deliver or
telecopy (or transmit by electronic communication, if arrangements for doing so
have been approved by the Facing Agent) to the Facing Agent, the Administrative
Agent and the Canadian Administrative Agent (reasonably in advance of the
requested date of issuance, amendment, renewal or extension) a notice requesting
the issuance of a Letter of Credit, or identifying the Letter of Credit to be
amended, renewed or extended, and specifying the date of issuance, amendment,
renewal or extension (which shall be a Business Day), the date on which such
Letter of Credit is to expire (which shall comply with paragraph (b) of this
-------------
Article III), the amount and currency of such Letter of Credit, the name and
------------
address of the beneficiary thereof and such other information as shall be
necessary to prepare, amend, renew or extend such Letter of Credit. If requested
by the Facing Agent, Canco also shall submit a letter of credit application on
the Facing Agent's standard form in connection with any request for a Letter of
Credit. A Letter of Credit shall be issued, amended, renewed or extended only if
(and upon issuance, amendment, renewal or extension of each Letter of Credit
Canco shall be deemed to represent and warrant that), after giving effect to
such issuance, amendment, renewal or extension (i) the LC Exposure shall not
exceed U.S.$50,000,000 and (ii) the Revolving Credit Utilization shall not
exceed the aggregate Revolving Credit Commitments.
(b) Expiration Date. Each Letter of Credit shall expire at or prior to the
close of business on the earliest of (i) the date one year after the date of the
issuance of such Letter of Credit (or, in the case of any renewal or extension
thereof, one year after such renewal or extension) and (ii) the date that is 30
days prior to the Revolving Maturity Date.
(c) Participations. By the issuance of a Letter of Credit (or an amendment
to a Letter of Credit increasing the amount thereof) and without any further
action on the part of the Facing Agent or the Lenders, the Facing Agent hereby
grants to each Revolving Lender, and each Revolving Lender hereby acquires from
the Facing Agent, a participation in such Letter of Credit equal to such
Lender's Applicable Percentage of the aggregate amount available to be drawn
under such Letter of Credit. In consideration and in furtherance of the
foregoing, each Revolving Lender hereby absolutely and unconditionally agrees to
pay to the Canadian Administrative Agent, for the account of the
61
Facing Agent, such Lender's Applicable Percentage of each LC Disbursement made
by the Facing Agent and not reimbursed by Canco on the date due as provided in
paragraph (d) of this Article III, or of any reimbursement payment required to
------------- -----------
be refunded to Canco for any reason. Each Lender acknowledges and agrees that
its obligation to acquire participations pursuant to this paragraph (c) in
-------------
respect of Letters of Credit is absolute and unconditional and shall not be
affected by any circumstance whatsoever, including any amendment, renewal or
extension of any Letter of Credit or the occurrence and continuance of a Default
or reduction or termination of the Revolving Credit Commitments, and that each
such payment shall be made without any offset, abatement, withholding or
reduction whatsoever.
(d) Reimbursement. If the Facing Agent shall pay any drawing presented
under a Letter of Credit, Canco shall pay to the Facing Agent an amount equal to
the amount of such drawing not later than two hours after Canco shall have
received notice from the Facing Agent that payment of such drawing will be made
or, if Canco shall have received such notice later than 10:00 a.m., Standard
Time, on any Business Day, not later than 10:00 a.m., Standard Time on the
immediately following Business Day, provided that Canco may, subject to the
--------
conditions to borrowing set forth herein, request in accordance with Section
-------
2.03 that such payment be financed with an ABR Revolving Borrowing or, if such
----
LC Disbursement is denominated in Canadian Dollars, a Canadian Prime Rate
Borrowing (or failing such request, such LC Disbursement may be financed as an
ABR Revolving Borrowing or a Canadian Prime Rate Borrowing, as the case may be,
pursuant to Section 2.02(e)) in an equivalent amount and, to the extent so
----------------
financed, Canco's obligation to make such payment shall be discharged and
replaced by the resulting ABR Revolving Borrowing or Canadian Prime Rate
Borrowing, as the case may be. If Canco fails to make such payment when due, the
Facing Agent shall notify the Canadian Administrative Agent, which shall in turn
notify each Revolving Lender of the applicable LC Disbursement, the payment then
due from Canco in respect thereof and such Lender's Applicable Percentage
thereof. Promptly following receipt of such notice, each Revolving Lender shall
pay to the Canadian Administrative Agent its Applicable Percentage of the
payment then due from Canco, in the same manner as provided in Section 2.02(c)
---------------
with respect to Loans made by such Lender, and the Canadian Administrative Agent
shall promptly pay to the Facing Agent the amounts so received by it from the
Revolving Lenders. Promptly following receipt by the Canadian Administrative
Agent of any payment from Canco pursuant to this paragraph (d), the Canadian
-------------
Administrative Agent shall distribute such payment to the Facing Agent or, to
the extent that Revolving Lenders have made payments pursuant to this paragraph
---------
(d) to reimburse the Facing Agent, then to such Lenders and the Facing Agent as
---
their interests may appear. Any payment made by a Revolving Lender pursuant to
this paragraph (d) to reimburse the Facing Agent for any LC Disbursement (other
-------------
than the funding of ABR Revolving Loans or Canadian Prime Rate Loan as
contemplated above) shall not constitute a Loan and shall not relieve Canco of
its obligation to reimburse such LC Disbursement.
(e) Obligations Absolute. Canco's obligation to repay the Facing Agent for
LC Disbursements made by the Facing Agent under the outstanding Letters of
Credit for the account of Canco shall be absolute, unconditional and irrevocable
under any and all circumstances and irrespective of:
(i) any lack of validity or enforceability of any Letter of Credit;
(ii) the existence of any claim, setoff, defense or other right that
Canco or any other Person may at any time have against the beneficiary or
any transferee under any Letter of Credit, the Facing Agent, the
Administrative Agent, any Lender or any other Person (other than the
defense of payment in accordance with the terms of this Agreement or a
defense based on the gross negligence or wilful misconduct of the Facing
Agent) in connection with this Agreement or any other agreement or
transaction;
(iii) any draft or other document presented under a Letter of Credit
proving to be forged, fraudulent, invalid or insufficient in any respect or
any statement therein being untrue or inaccurate in any respect, provided
that payment by the Facing Agent under such Letter of Credit against
presentation of such draft or document shall not have constituted gross
negligence or wilful misconduct of the Facing Agent;
(iv) payment by the Facing Agent under a Letter of Credit against
presentation of a draft or other document that does not comply with the
terms of such Letter of Credit, provided that such payment shall not have
constituted gross negligence or wilful misconduct of the Facing Agent; and
(v) any other circumstance or event whatsoever, whether or not
similar to any of the foregoing, provided that such circumstance or event
shall not have been the result of gross negligence or wilful misconduct of
the Facing Agent.
It is understood that in making any payment under a Letter of Credit (i)
the Facing Agent's exclusive reliance on the documents presented to it under
such Letter of Credit as to any and all matters set forth therein, including
reliance on the amount of any draft presented under such Letter of Credit,
whether or not the amount due to the beneficiary equals the amount of such draft
and whether or not any document presented pursuant to such Letter of Credit
proves to be insufficient in any respect, if such document on its face appears
to be in order, and whether or not any other statement or any other document
presented pursuant to such Letter of Credit proves to be forged or invalid or
any statement therein proves to be inaccurate or untrue in any respect
whatsoever, and (ii) any noncompliance in any immaterial respect of the
documents presented under a Letter of Credit with the terms thereof shall, in
each case, not be deemed wilful misconduct or gross negligence of the Facing
Agent.
(f) Disbursement Procedures. The Facing Agent shall, promptly following
its receipt thereof, examine all documents purporting to represent a demand for
payment under a Letter of Credit. The Facing Agent shall promptly notify the
Canadian Administrative Agent and Canco by telephone
63
(confirmed by telecopy) of such demand for payment and whether the Facing Agent
has made or will make a LC Disbursement thereunder, provided that any failure to
give or delay in giving such notice shall not relieve Canco of its obligation to
reimburse the Facing Agent and the Revolving Lenders with respect to any such LC
Disbursement.
(g) Interim Interest. If the Facing Agent shall make any LC Disbursement,
then, unless Canco shall reimburse such LC Disbursement in full on the date such
LC Disbursement is made, the unpaid amount thereof shall bear interest, for each
day from and including the date such LC Disbursement is made to but excluding
the date that Canco reimburses such LC Disbursement, at the rate per annum then
applicable to ABR Revolving Loans or, if such LC Disbursement is denominated in
Canadian Dollars, Canadian Prime Rate Loans, provided that, if Canco fails to
--------
reimburse such LC Disbursement when due pursuant to paragraph (d) of this
-------------
Article III, then Section 2.07 shall apply. Interest accrued pursuant to this
----------- ------------
paragraph (g) shall be for the account of the Facing Agent, except that interest
-------------
accrued on and after the date of payment by any Revolving Lender pursuant to
paragraph (d) of this Article III to reimburse the Facing Agent shall be for the
------------- -----------
account of such Lender to the extent of such payment.
(h) Cash Collateralization. If any Event of Default shall occur and be
continuing, on the Business Day that Canco receives notice from the
Administrative Agent or the Required Lenders (or, if the maturity of the Loans
has been accelerated, Revolving Lenders with LC Exposure representing greater
than 50% of the total LC Exposure) demanding the deposit of cash collateral
pursuant to this paragraph (h), Canco shall deposit in an account with the
-------------
Canadian Administrative Agent, in the name of the Canadian Administrative Agent
and for the benefit of the Lenders, an amount in cash equal to the LC Exposure
as of such date plus any accrued and unpaid fees and interest thereon, provided
---- --------
that the obligation to deposit such cash collateral shall become effective
immediately, and such deposit shall become immediately due and payable, without
demand or other notice of any kind, upon the occurrence of any Event of Default
with respect to Canco described in paragraph (g) or (h) of Article VIII. Each
------------- --- ------------
such deposit shall be held by the Canadian Administrative Agent as collateral
for the payment and performance of the obligations of Canco under this
Agreement. The Canadian Administrative Agent shall have exclusive dominion and
control, including the exclusive right of withdrawal, over such account. Other
than any interest earned on the investment of such deposits, which investments
shall be made at the option and sole discretion of the Canadian Administrative
Agent and at Canco's risk and expense, such deposits shall not bear interest.
Interest or profits, if any, on such investments shall accumulate in such
account. Moneys in such account shall be applied by the Canadian Administrative
Agent to reimburse the Facing Agent for LC Disbursements for which it has not
been reimbursed and, to the extent not so applied, shall be held for the
satisfaction of the reimbursement obligations of Canco for the LC Exposure at
such time or, if the maturity of the Loans has been accelerated (but subject to
the consent of Revolving Lenders with LC Exposure representing greater than 50%
of the total LC Exposure), be applied to satisfy other obligations of Canco
under this Agreement. If Canco is required to provide an amount of cash
collateral hereunder as a result of the occurrence of an Event of Default, such
amount (to the extent not applied as aforesaid) shall be returned to Canco
within three Business Days after all Events of Default have been cured or
waived.
64
(i) Replacement of the Facing Agent. The Facing Agent may be replaced at
any time by written agreement among Canco, each Agent, the Administrative Agent,
the replaced Facing Agent and the successor Facing Agent. Any such successor
Facing Agent shall be resident in Canada for purposes of the ITA. The
Administrative Agent shall notify the Lenders of any such replacement of the
Facing Agent. At the time any such replacement shall become effective, Canco
shall pay all unpaid fees accrued for the account of the replaced Facing Agent
pursuant to Section 2.05(c). From and after the effective date of any such
---------------
replacement, (i) the successor Facing Agent shall have all the rights and
obligations of the Facing Agent under this Agreement with respect to Letters of
Credit to be issued thereafter and (ii) references herein to the term "Facing
Agent" shall be deemed to refer to such successor or to any previous Facing
Agent, or to such successor and all previous Facing Agents, as the context shall
require. After the replacement of a Facing Agent hereunder, the replaced Facing
Agent shall remain a party hereto and shall continue to have all the rights and
obligations of a Facing Agent under this Agreement with respect to Letters of
Credit issued by it prior to such replacement, but shall not be required to
issue additional Letters of Credit.
(j) Additional Facing Agents. Canco may, at any time and from time to time
with the consent of the Agents (which consent shall not be unreasonably
withheld) and such Lender, designate one or more additional Revolving Lenders to
act as a Facing Agent under the terms of this Agreement. Any Revolving Lender
designated as a Facing Agent pursuant to this paragraph (j) of Article III shall
be deemed to be the "Facing Agent" (in addition to being a Lender) in respect of
Letters of Credit issued or to be issued by such Lender, and, with respect to
such Letters of Credit, such term shall thereafter apply to the Facing Agent and
such Lender.
(k) Notification by Facing Agents. On the first Business Day of each week,
each Facing Agent shall report to the Administrative Agent and the Canadian
Administrative Agent the aggregate face amount of Letters of Credit issued by it
and outstanding as of the last Business Day of the preceding week. The Canadian
Administrative Agent shall promptly notify the Revolving Lenders, in writing, of
the issuance of or any amendment to a Standby Letter of Credit, and if any
Revolving Lender so requests, the Canadian Administrative Agent shall provide
such Revolving Lender with copies of any such issuance or amendment.
ARTICLE IV
Representations and Warranties
Each of Stone and Canco represents and warrants to each of the Lenders, the
Agents, the Administrative Agent and the Facing Agent that:
SECTION 4.01. Organization; Powers. Each of the Loan Parties (a) is a
corporation duly organized, validly existing and in good standing under the laws
of the jurisdiction of its organization, (b) has all requisite power and
authority to own its property and assets and to carry on its business as now
conducted, (c) is qualified to do business in every jurisdiction where such
qualification is required by the nature of its business, the character and
location of its property, business or
65
customers, or the ownership or leasing of its properties, except for such
jurisdictions in which the failure so to qualify, in the aggregate, could not
reasonably be expected to result in a Material Adverse Effect, and (d) has the
corporate power and authority to execute, deliver and perform its obligations
under each of the Loan Documents and each other agreement or instrument
contemplated thereby to which it is or will be a party and, in the case of the
Borrowers, to borrow hereunder.
SECTION 4.02. Authorization. The execution, delivery and performance by
each of the Loan Parties of each of the Loan Documents to which it is a party,
the Borrowings hereunder, the issuance of the Letters of Credit, the use of the
proceeds of the Loans and the Letters of Credit, the creation of the security
interests contemplated by the Security Documents, the consummation of the
Acquisition and the other transactions contemplated by the Loan Documents and
the SLP Acquisition Documents (all the foregoing, collectively, the
"Transactions") (a) have been duly authorized by all requisite corporate and, if
------------
required, stockholder action and (b) will not (i) violate (A) any provision of
law, statute, rule or regulation, other than any law, statute, rule or
regulation the violation of which could not reasonably be expected to result in
a Material Adverse Effect, or of the certificate of incorporation or other
constitutive documents or by-laws of any Loan Party or any of their respective
Subsidiaries, (B) any order of any Governmental Authority, the violation of
which, solely with respect to the consummation of the Acquisition and the
transactions contemplated by the SLP Acquisition Documents, could not reasonably
be expected to result in a Material Adverse Effect, or (C) any provision of any
indenture or other material agreement or other material instrument to which any
Loan Party or any of their respective Subsidiaries is a party or by which any of
them or any of their property is or may be bound, the violation of which, solely
with respect to the consummation of the Acquisition and the transactions
contemplated by the SLP Acquisition Documents, could not reasonably be expected
to result in a Material Adverse Effect, (ii) constitute (alone or with notice or
lapse of time or both) a default under any such indenture, agreement or other
instrument where such default, solely with respect to the consummation of the
Acquisition and the transactions contemplated by the SLP Acquisition Documents,
could reasonably be expected to result in a Material Adverse Effect, or (iii)
result in the creation or imposition of any Lien (other than any Lien created
hereunder or under the Security Documents) upon or with respect to any property
or assets now owned or hereafter acquired by any Loan Party or any of their
respective Subsidiaries.
SECTION 4.03. Enforceability. This Agreement has been duly executed and
delivered by each Borrower and constitutes, and each other Loan Document when
executed and delivered by each Loan Party thereto will constitute, a legal,
valid and binding obligation of each Borrower and the Loan Parties, as
applicable, enforceable against each of them in accordance with its terms (a)
except as the enforceability thereof may be limited by bankruptcy, insolvency or
similar laws affecting creditors' rights generally and (b) subject to general
principles of equity.
SECTION 4.04. Governmental Approvals. No action, consent or approval of,
registration or filing with or any other action by any Governmental Authority is
or will be required in connection with the Transactions, except for (a) the
filing of Uniform Commercial Code financing statements, and similar security or
collateral filings and registrations under applicable laws in other
jurisdictions, (b) recordation of the Mortgages and ship mortgages on any
vessels, (c) filings with the United States Patent and Trademark Office, the
United States Copyright Office, the Canadian Intellectual Property
66
Office and the Ministry of Natural Resources under the Forest Act (Quebec) (in
respect of the Canco Hypothec only) and (d) such actions, consents, approvals,
registrations and filings as have been made or obtained and are in full force
and effect or the failure of which to make or obtain, solely with respect to the
consummation of the Acquisition and the transactions contemplated by the SLP
Acquisition Documents, could not reasonably be expected to result in a Material
Adverse Effect.
SECTION 4.05. Financial Statements. (a) Stone has delivered to the Lenders
(i) its audited financial statements and the audited financial statements of
Canco for the fiscal year ended December 31, 1999, together with its annual
report on Form 10-K and Canco's annual report on Form 20-F filed with the
Securities and Exchange Commission with respect to such fiscal year, and (ii)
its unaudited financial statements and the unaudited financial statements of
Canco for the fiscal quarter ended March 31, 2000, together with its quarterly
report on Form 10-Q filed with the Securities and Exchange Commission with
respect to such fiscal quarter. All financial statements set forth or referred
to in the materials specified in the preceding sentence were prepared in
conformity with U.S. GAAP or Canadian GAAP, as applicable, except with respect
to unaudited financial statements for the absence of footnote disclosure and for
year-end audit adjustments. All such financial statements fairly present in all
material respects the consolidated financial position of Stone and its
subsidiaries or Canco and its subsidiaries, as the case may be, as at the date
thereof and the consolidated results of operations and changes in financial
position of Stone and its subsidiaries or Canco and its subsidiaries, as the
case may be, for each of the periods covered thereby. Except as disclosed in
such financial statements, neither Stone nor Canco nor any of their respective
subsidiaries had, at the date of such financial statements or on the Closing
Date, as the case may be, any material contingent obligation, material
contingent liability or material liability for taxes, long-term lease or unusual
forward or long-term commitment or obligations to retired employees for medical
or other employee benefits that is not reflected in the foregoing financial
statements or the notes thereto.
(b) Stone has delivered to the Lenders its unaudited pro forma
consolidated balance sheet and statements of income as of December 31, 1999,
prepared giving effect to the Transactions as if they had occurred, with respect
to such balance sheet, on such date and, with respect to such other financial
statements, on the first day of the 12-month period ending on such date. Such
pro forma financial statements have been prepared in good faith by Stone, based
on the assumptions used to prepare the pro forma financial information contained
in the Confidential Information Memorandum (which assumptions are believed by
Stone on the Closing Date to be reasonable), present fairly on a pro forma basis
the estimated consolidated financial position of Stone and its consolidated
Subsidiaries as of such date and for such period, assuming that the Transactions
had actually occurred at such date or at the beginning of such period, as the
case may be.
SECTION 4.06. No Material Adverse Change. There has been no material
adverse change in the business, assets, operations, properties, prospects or
condition (financial or otherwise) of Stone and its consolidated Subsidiaries,
taken as a whole, since December 31, 1999.
SECTION 4.07. Title to Properties; Possession Under Leases. (a) Except as
set forth on Schedule 4.07, each Borrower and the Subsidiaries have good and
-------------
marketable title to, or valid leasehold interests in, all their respective
material properties and assets, except for minor defects in
67
title that do not interfere in any material respect with its ability to conduct
its business as currently conducted. All such title to, or leasehold interest
in, material properties and assets are free and clear of Liens, other than Liens
expressly permitted by Section 7.02 and Liens with respect to which BTCo, as
------------
Collateral Agent, has received on or prior to the Closing Date duly executed
releases and termination statements in connection therewith.
(b) Each Borrower and the Subsidiaries have complied with all obligations
under all material leases to which it is a party and enjoys peaceful and
undisturbed possession under all such material leases necessary in any material
respect for the operation of their respective properties and assets.
SECTION 4.08. Subsidiaries. Schedule 4.08 sets forth as of the Closing Date
-------------
a list of all the Subsidiaries of each Borrower, their jurisdiction of
organization and the percentage ownership interest of each of them and any other
Subsidiary therein. The capital stock of each of the Subsidiaries is duly
authorized, validly issued, fully paid and nonassessable and, except as set
forth on Schedule 4.08, is owned free and clear of all Liens other than
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nonconsensual Permitted Liens arising other than as a result of a voluntary act
of the Borrowers. No authorized but unissued treasury shares of capital stock of
either Borrower or any such Subsidiary are subject to any option, warrant, right
to call or commitment of any kind or character except as set forth on Schedule
--------
4.08.
----
SECTION 4.09. Litigation; Compliance with Laws. (a) Except as set forth in
Schedule 4.09, there are not any actions, suits or proceedings at law or in
-------------
equity or by or before any Governmental Authority now pending or, to the
knowledge of either Borrower, threatened against or affecting either Borrower or
any of the Subsidiaries or any business or property of any such Person that (i)
involve any Loan Document or the Transactions or (ii) could reasonably be
expected to, individually or in the aggregate, result in a Material Adverse
Effect.
(b) Neither Borrower nor any of the Subsidiaries nor any of their
respective properties or assets is (i) in violation of, nor will the continued
operation of their properties and assets as currently conducted violate, any
law, rule, regulation, statute (including any zoning, building, environmental
and safety law; ordinance, code or approval or any building permits) or any
restrictions of record or agreements affecting the Mortgaged Properties, where
such violations could reasonably be expected to have a Material Adverse Effect
or (ii) in default with respect to any judgment, writ, injunction, decree or
order of any Governmental Authority, where such defaults, individually or in the
aggregate, could reasonably be expected to result in a Material Adverse Effect.
SECTION 4.10. Agreements. Neither Borrower nor any of the Subsidiaries is
in default under any provision of any indenture or other agreement or instrument
evidencing Indebtedness, or any other agreement or instrument to which it is a
party or by which it or any of its properties or assets are or may be bound,
where such default could reasonably be expected to result in a Material Adverse
Effect.
SECTION 4.11. Federal Reserve Regulations. (a) Neither Borrower nor any of
the Subsidiaries is engaged principally, or as one of its important activities,
in the business of extending credit for the purpose of purchasing or carrying
Margin Stock.
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(b) No part of the proceeds of any Letter of Credit or Loan has been used,
whether directly or indirectly, and whether immediately, incidentally or
ultimately, (i) to purchase or carry Margin Stock or to extend credit to others
for the purpose of purchasing or carrying Margin Stock or to refund indebtedness
originally incurred for such purpose or (ii) for any purpose that entails a
violation of, or is inconsistent with, the provisions of the Regulations of the
Board, including Regulation T, U or X.
SECTION 4.12. Investment Company Act; Public Utility Holding Company Act.
Neither Borrower nor any of the Subsidiaries (a) is an "investment company" as
defined in, or is subject to regulation under, the Investment Company Act of
1940 or (b) is a "holding company" as defined in, or is subject to regulation
under, the Public Utility Holding Company Act of 1935.
SECTION 4.13. Tax Returns. Each of the Borrowers and the Subsidiaries has
filed or caused to be filed all Federal, foreign, state and local income and
other material tax returns required to have been filed by it or with respect to
it and has paid or caused to be paid all taxes shown to be due and payable on
such returns or on any assessments received by it or with respect to it, except
taxes that are being contested in good faith by appropriate proceedings and for
which it has set aside on its books adequate reserves in accordance with U.S. or
Canadian GAAP, as applicable.
SECTION 4.14. No Material Misstatements. The information provided by or on
behalf of the Borrowers and contained in the Confidential Information Memorandum
(including all attachments and exhibits thereto), as supplemented, and as
supplemented further by information heretofore provided in writing by or on
behalf of the Borrowers to the Lenders and any other materials, documents and
information that the Borrowers or any of their Affiliates may have furnished to
the Lenders, was as of the date of such Confidential Information Memorandum, the
dates otherwise specified therein or the dates upon which such information was
provided, when taken as a whole, accurate in all material respects and does not
contain any untrue statement of a material fact or omit to state any material
fact necessary to make the statements therein, in light of the circumstances
under which they were made, when taken as a whole, not materially misleading,
provided that to the extent any such information therein was based upon or
constitutes a forecast or projection, each Borrower represents only that it
acted in good faith and utilized reasonable assumptions, due and careful
consideration and the information actually known to Responsible Officers of each
Borrower at the time in the preparation of such information.
SECTION 4.15. Employee Benefit Plans. (a) Each Borrower and their
respective ERISA Affiliates is in compliance in all material respects with the
applicable provisions of ERISA and the Code and the regulations and published
interpretations thereunder. No Reportable Event has occurred in respect of any
Plan of either Borrower or any ERISA Affiliate. The present value of all
actuarial accrued liabilities under each Plan (based on those assumptions used
to fund such Plan) did not, as of the last annual valuation date applicable
thereto, exceed by more than U.S.$25,000,000 the value of the assets of such
Plan, and the present value of all actuarial accrued liabilities of all
underfunded Plans (based on those assumptions used to fund each such Plan) did
not, as of the last annual valuation dates applicable thereto, exceed by more
than U.S.$25,000,000 the value of the
69
assets of all such underfunded Plans. Neither Borrower nor any ERISA Affiliate
has incurred any Withdrawal Liability that could result in a Material Adverse
Effect. Neither Borrower nor any ERISA Affiliate has received any notification
that any Multiemployer Plan is in reorganization or has been terminated within
the meaning of Title IV of ERISA and no Multiemployer Plan is reasonably
expected to be in reorganization or to be terminated where such reorganization
or termination has resulted or could reasonably be expected to result, through
increases in the contributions required to be made to such Plan or otherwise, in
a Material Adverse Effect.
(b) The Canadian Pension Plans are duly registered under the ITA and any
other applicable laws which require registration, have been administered in all
material respects in accordance with the ITA and such other applicable laws and
no event has occurred which could reasonably be expected to cause the loss of
such registered status. All material obligations of Canco and each of its
Subsidiaries required to be performed by Canco or its Subsidiaries in connection
with the Canadian Pension Plans and the funding agreements therefor have been
performed on a timely basis. As of the Closing Date, there are no outstanding
disputes concerning the assets of the Canadian Pension Plans or the Canadian
Benefit Plans. No promises of benefit improvements under the Canadian Pension
Plans or the Canadian Benefit Plans have been made except where such improvement
could not reasonably be expected to have a Material Adverse Effect. All
contributions or premiums required to be made or paid by Canco and each of its
Subsidiaries to the Canadian Pension Plans or the Canadian Benefit Plans have
been made on a timely basis in accordance with the terms of such plans and all
applicable laws. There have been no improper withdrawals or applications of the
assets of the Canadian Pension Plans or the Canadian Benefit Plans. None of the
Canadian Pension Plans or the Canadian Benefit Plans has any unfunded actuarial
liabilities or solvency deficiencies (within the meaning of the Quebec
Supplemental Pension Plans Act) in an aggregate amount in excess of
U.S.$25,000,000.
SECTION 4.16. Environmental and Safety Matters. Except as set forth on
Schedule 4.16,
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(a) Each Borrower and each of the Subsidiaries has obtained all
permits, licenses and other authorizations that are required and material
with respect to the operation of the business of each Borrower and the
Subsidiaries, taken as a whole, under any Environmental Law, and each such
permit, license and authorization is in full force and effect.
(b) Each Borrower and each of the Subsidiaries is in compliance with
all material terms and conditions of the permits, licenses and
authorizations specified in Section 4.16(a), and are also in compliance
---------------
with all other limitations, restrictions, conditions, standards,
prohibitions, requirements, obligations, schedules and timetables contained
in any Environmental Law applicable to it and its business, assets,
operations and properties, including those arising under the Resource
Conservation and Recovery Act of 1976, as amended, the Comprehensive
Environmental Response, Compensation and Liability Act of 1980, as amended
("CERCLA"), the Federal Water Pollution Control Act, the Federal Clean Air
------
Act, and the Toxic Substances Control Act and any analogous or comparable
Canadian, state or provincial laws and regulations, except for such
instances of noncompliance that could not reasonably be expected to result
in a Material Adverse Effect.
70
(c) There is no civil, criminal or administrative action, suit,
demand, claim, hearing, notice of violation, investigation, proceeding,
notice or demand letter or request for information pending or, to the
knowledge of either Borrower or any of the Subsidiaries, after inquiry,
threatened against either Borrower or any of the Subsidiaries under any
Environmental Law that could reasonably be expected to result in a Material
Adverse Effect.
(d) Neither Borrower nor any of the Subsidiaries has received notice
that it has been identified as a potentially responsible party under CERCLA
or any comparable state law, nor has either Borrower or any of the
Subsidiaries received any notification that any hazardous substances or any
pollutant or contaminant, as defined in CERCLA and its implementing
regulations, or any toxic substance, hazardous waste, hazardous
constituents, hazardous materials, asbestos or asbestos containing
material, polychlorinated biphenyls, petroleum, including crude oil and any
fractions thereof, or other wastes, chemicals, substances or materials
regulated by any Environmental Laws (collectively, "Hazardous Materials")
-------------------
that it or any of their respective predecessors in interest has used,
generated, stored, tested, handled, transported or disposed of, has been
found at any site at which any Governmental Authority or private party is
conducting a remedial investigation or other action pursuant to any
Environmental Law, except in each case for any such notices that,
individually or in the aggregate, could not reasonably be expected to
result in a Material Adverse Effect.
(e) There have been no releases or threatened releases (in each case
as defined in CERCLA) of Hazardous Materials by either Borrower or any of
the Subsidiaries on, upon, into or from any of the Real Properties, which
releases or threatened releases could reasonably be expected to result in a
Material Adverse Effect. To the best knowledge of each Borrower and each of
the Subsidiaries, there have been no such releases or threatened releases
on, upon, under or into any real property in the vicinity of any of the
Real Properties that, through soil, surface water or groundwater migration
or contamination, may be located on, in or under such Real Properties and
which could reasonably be expected to result in a Material Adverse Effect.
(f) To the best knowledge of each Borrower and each of the
Subsidiaries, there is no asbestos in, on, or at any Real Properties or any
facility or equipment of either Borrower or any of the Subsidiaries except
to the extent that the presence of such material could not reasonably be
expected to result in a Material Adverse Effect.
(g) None of the Mortgaged Properties and, to the best knowledge of
each Borrower and each of the Subsidiaries after due inquiry, none of the
other Real Properties of either Borrower or any of the Subsidiaries are (i)
listed or proposed for listing on the National Priorities List under CERCLA
or (ii) listed in the Comprehensive Environmental Response, Compensation,
Liability Information System List promulgated pursuant to CERCLA, or on any
comparable list maintained by any Governmental Authority.
71
(h) There are no past or current events, conditions, circumstances,
activities, practices, incidents, actions or plans that could reasonably be
anticipated to interfere with or prevent compliance with any Environmental
Law, or which may give rise to liability under any Environmental Law, or
otherwise form the basis of any claim, action, demand, suit, proceeding,
hearing or notice of violation, study or investigation, based on or related
to the manufacture, processing, distribution, use, generation, treatment,
storage, disposal, transport, shipping or handling, or the emission,
discharge, release or threatened release into the environment, of any
Hazardous Material that could reasonably be expected to result in a
Material Adverse Effect.
SECTION 4.17. Solvency. After giving effect to the Transactions to occur
on the Closing Date, (a) the fair salable value of the assets of Stone and the
Subsidiaries, on a consolidated basis, will exceed the amount that will be
required to be paid on or in respect of the existing debts and other liabilities
(including contingent liabilities) of Stone and the Subsidiaries, on a
consolidated basis, as they mature, (b) the assets of Stone and the
Subsidiaries, on a consolidated basis, will not constitute unreasonably small
capital to carry out their businesses as conducted or as proposed to be
conducted, including the capital needs of Stone and its Subsidiaries, on a
consolidated basis (taking into account the particular capital requirements of
the businesses conducted by such entities and the projected capital requirements
and capital availability of such businesses) and (c) neither Borrower intends
to, nor does it intend to permit any of the Subsidiaries to, and does not
believe that it or any such Subsidiary will, incur debts beyond its ability to
pay such debts as they mature (taking into account the timing and amounts of
cash to be received by each of them or any such Subsidiary and the amounts to be
payable on or in respect of its obligations).
SECTION 4.18. Security Documents. (a) (i) The U.S. Pledge Agreement
creates in favor of BTCo, as Collateral Agent, for the ratable benefit of the
beneficiaries named therein, a legal, valid and enforceable security interest in
the Collateral (as defined in the U.S. Pledge Agreement) and proceeds thereof
and, when the portion of the Collateral constituting certificated securities (as
defined in the Uniform Commercial Code as in effect in the State of New York) is
delivered to the Collateral Agent, the U.S. Pledge Agreement will constitute a
fully perfected first priority Lien on, and security interest in, all right,
title and interest of the Loan Parties party thereto, in such Collateral and the
proceeds thereof, in each case prior and superior in right to any other Person.
(ii) The Canadian Pledge Agreement and Hypothec create in favor of BTCo, as
Collateral Agent, and the Trustee, respectively, for the ratable benefit of the
beneficiaries named therein, a legal, valid and enforceable security interest or
hypothec in the portion of the Collateral described therein and proceeds thereof
and constitute, when the proper filings, recordings and registrations specified
on Schedule 4.18(a)(ii) are made, a fully perfected or published first-priority
--------------------
or first-ranking Lien on, and security interest or hypothec in, all right, title
and interest in such Collateral and the proceeds thereof, in each case prior and
superior in right to any other Person other than with respect to Permitted
Liens. When each Hypothec is filed in the Canadian Intellectual Property Office,
the hypothec created thereunder shall constitute a fully perfected Lien on, and
hypothec in, all right, title and interest of the Loan Parties in the registered
intellectual property charged under each Hypothec and in which a hypothec may be
perfected by filing, recording or registering a security agreement,
72
financing statement or analogous document in the Canadian Intellectual Property
Office, prior and superior in right to any other Person other than with respect
to the rights of Persons pursuant to Permitted Liens (it being understood that
subsequent recordings in the Canadian Intellectual Property Office may be
necessary to perfect a Lien on registered trademarks, trademark applications and
copyrights acquired by the Loan Parties after date hereof).
(b) (i) The U.S. Security Agreement creates in favor of BTCo, as Collateral
Agent, for the ratable benefit of the beneficiaries named therein, a legal,
valid and enforceable security interest in the Collateral (as defined in the
U.S. Security Agreement) (other than vessels) and proceeds thereof, and, when
financing statements in appropriate form are filed in the offices specified on
Schedule 10 to the Perfection Certificate (as defined in the U.S. Security
-----------
Agreement), the U.S. Security Agreement shall constitute a fully perfected Lien
on, and security interest in, all right, title and interest of the grantors
thereunder in such Collateral, other than the Intellectual Property (as defined
in the U.S. Security Agreement), to the extent perfection can be obtained by
filing Uniform Commercial Code financing statements, prior and superior in right
to any other Person other than with respect to Permitted Liens. When the U.S.
Security Agreement is filed in the United States Patent and Trademark Office and
the United States Copyright Office, the security interest created thereunder
shall constitute a fully perfected Lien on, and security interest in, all right,
title and interest of the Loan Parties in the registered Intellectual Property
in which a security interest may be perfected by filing, recording or
registering a security agreement, financing statement or analogous document in
the United States Patent and Trademark Office or the United States Copyright
Office, as applicable, in each case prior and superior in right to any other
Person, other than with respect to the rights of Persons pursuant to Permitted
Liens (it being understood that subsequent recordings in the United States
Patent and Trademark Office and the United States Copyright Office may be
necessary to perfect a lien on registered trademarks, trademark applications and
copyrights acquired by the Loan Parties after the date hereof).
(ii) The Canadian Security Agreement creates in favor of BTCo, as
Collateral Agent, for the ratable benefit of the beneficiaries named therein, a
legal, valid and enforceable security interest in the Collateral (as defined in
the Canadian Security Agreement) and proceeds thereof, and when financing
statements in appropriate form have been filed in the offices specified on
Schedule 4.18(b), the Canadian Security Agreement will constitute a fully
----------------
perfected Lien on, and security interest in, all right, title and interest of
the Loan Parties in such Collateral in which a Lien may be perfected by the
filing of financing statements and the proceeds thereof, in each case prior and
superior in right to any other Person other than with respect to Permitted
Liens. When the Canadian Security Agreement is filed in the Canadian
Intellectual Property Office, the security interest created thereunder shall
constitute a fully perfected Lien on, and security interest in, all right, title
and interest of the Loan Parties in the registered Intellectual Property (as
defined in the Canadian Security Agreement) in which a security interest may be
perfected by filing, recording or registering a security agreement, financing
statement or analogous document in the Canadian Intellectual Property Office,
prior and superior in right to any other Person other than with respect to the
rights of Persons pursuant to Permitted Liens (it being understood that
subsequent recordings in the Canadian Intellectual Property Office may be
necessary to perfect a lien on registered trademarks, trademark applications and
copyrights acquired by the Loan Parties after date hereof).
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(c) The Mortgages create in favor of BTCo, as Collateral Agent, for the
ratable benefit of the beneficiaries named therein, a legal, valid and
enforceable Lien on each Loan Party's right, title and interest in and to the
Mortgaged Properties thereunder and the proceeds thereof, and when the Mortgages
are properly filed and recorded in the offices specified on Schedule 4.18(c),
----------------
the Mortgages will constitute a fully perfected Lien on, and security interest
in, all right, title and interest of each Loan Party in such Mortgaged
Properties and the proceeds thereof, in each case prior and superior in right to
any other Person other than Permitted Liens.
SECTION 4.19. Labor Matters. As of the Closing Date, there are no strikes,
lockouts or slowdowns against either Borrower or any of the Subsidiaries pending
or, to the knowledge of either Borrower, threatened, except as set forth on
Schedule 4.19. The hours worked by and payment made to employees of the
-------------
Borrowers have not been in violation of the Fair Labor Standards Act or any
other applicable Federal, state, local or foreign law dealing with such matters,
where such violations could reasonably be expected, individually or in the
aggregate, to result in a Material Adverse Effect. The consummation of the
Transactions will not give rise to a right of termination or right of
renegotiation on the part of any union under any collective bargaining agreement
to which either Borrower or any of the Subsidiaries is a party or by which
either Borrower or any of the Subsidiaries is bound on the Closing Date.
SECTION 4.20. Location of Real Property. (a) Schedule 4.20 sets forth
-------------
completely and correctly as of the Closing Date all material real property owned
by each Borrower or any of the Subsidiaries in the United States and, solely
with respect to Canco and its Subsidiaries, Canada, and the addresses thereof.
All the real property set forth on Schedule 4.20 is owned in fee by a Borrower
-------------
or a Subsidiary or, where such real property is located in the Province of
Quebec, such real property is owned under the tenure of free and common soccage
or under the tenure of franc alleu roturier by a Borrower or a Subsidiary.
(b) Schedule 4.20 sets forth completely and correctly as of the Closing
-------------
Date all material real property leased by the Borrowers or any of the
Subsidiaries in the United States and, solely with respect to Canco and its
Subsidiaries, Canada, and the addresses thereof. A Borrower or one of the
Subsidiaries has a valid lease in all the leased Real Property set forth on
Schedule 4.20.
-------------
SECTION 4.21. Patents, Trademarks, etc. Each Borrower and each of the
Subsidiaries owns, or is licensed to use, all patents, trademarks, trade names,
copyrights, technology, know-how and processes, service marks and rights with
respect to the foregoing that are (a) used in or necessary for the conduct of
their respective businesses as currently conducted and (b) material to the
business, assets, operations, properties, prospects or condition (financial or
otherwise) of the Borrowers and the Subsidiaries taken as a whole. The use of
such patents, trademarks, trade names, copyrights, technology, know-how,
processes and rights with respect to the foregoing by the Borrowers and the
Subsidiaries does not infringe on the rights of any Person, subject to such
claims and infringements as do not, in the aggregate, give rise to any liability
on the part of either Borrower and the Subsidiaries that is material to the
Borrowers and the Subsidiaries, taken as a whole. To the best knowledge of each
Borrower, its rights and the rights of the Subsidiaries to sell, franchise or
license
74
under such brand names then being used may be transferred in connection with any
sale of assets or stock of the related business by the Borrowers or any of the
Subsidiaries with only such exceptions as would not be material to the Borrowers
and the Subsidiaries, in each case, taken as a whole.
SECTION 4.22. Survival of Warranties. All representations and warranties
contained in this Agreement and the other Loan Documents shall survive the
effectiveness of this Agreement and such other Loan Documents as the case may
be, and the termination hereof and thereof.
ARTICLE V
Conditions
The obligation of each Lender to make Loans hereunder and the obligation of
the Facing Agent to issue, amend, extend or renew any Letter of Credit hereunder
(each, a "Credit Event") is subject to the satisfaction of the following
------------
conditions:
SECTION 5.01. All Credit Events. On the date of each Credit Event:
(a) The Administrative Agent and, where applicable, the Facing Agent
shall have received a notice of such Credit Event as required by Section
2.03 and paragraph (a) of Article III, respectively.
-----------
(b) The representations and warranties set forth in Article IV hereof
----------
and in the other Loan Documents shall be true and correct in all material
respects on and as of the date of such Credit Event with the same effect as
though made on and as of such date, except to the extent that such
representations and warranties expressly relate to an earlier date (it
being understood that on the Closing Date such representations and
warranties shall be true and correct in all material respects both before
and after giving effect to the Acquisition and the other Transactions to
occur on the Closing Date).
(c) At the time of and immediately after such Credit Event, no Default
or Event of Default shall have occurred and be continuing.
Each Credit Event shall be deemed to constitute a representation and warranty by
the Borrowers on the date of such Credit Event, as to the matters specified in
paragraphs (b) and (c) of this Section 5.01.
SECTION 5.02. First Credit Event. On the Closing Date:
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(a) The Administrative Agent shall have received, on behalf of itself,
the Lenders and the Facing Agent, a favorable customary written opinion of
(i) Winston & ▇▇▇▇▇▇, U.S. counsel for the Borrowers, substantially to the
effect set forth in Exhibit G-1, (ii) Stikeman Elliott, Ontario counsel for
-----------
the Borrowers, substantially to the effect set forth in Exhibit G-2-A,
-------------
(iii) Stikeman Elliott, Quebec counsel for the Borrowers, substantially to
the effect set forth in Exhibit G-2-B, (iv) Stikeman Elliott, Canadian tax
-------------
counsel for the Borrowers, substantially to the effect set forth in Exhibit
-------
G-2-C and (v) each local counsel set forth on Schedule 5.02(a),
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substantially to the effect set forth in Exhibit G-3, in each case (A)
-----------
dated the Closing Date, (B) addressed to the Facing Agent, the Agents and
the Lenders, and (C) covering such other matters relating to the Loan
Documents as the Agents shall reasonably request and with such other
changes as are reasonably acceptable to the Agents, and the Borrowers
hereby instruct their counsel to deliver such opinions.
(b) All legal matters incident to this Agreement, the Borrowings and
extensions of credit hereunder and the other Loan Documents shall be
reasonably satisfactory to the Agents, the Lenders and the Facing Agent.
(c) The Administrative Agent shall have received each of the items
referred to in clauses (A), (B) and (C) below with respect to each Loan
Party: (A) a copy of the certificate or articles of incorporation,
including all amendments thereto, of each Loan Party, certified as of a
recent date by the Secretary of State or other relevant Governmental
Authority of the jurisdiction of its organization, and a certificate as to
the good standing of each Loan Party as of a recent date from such
Secretary of State or other Governmental Authority; (B) a certificate of
the Secretary or Assistant Secretary of each Loan Party dated the Closing
Date and certifying (w) that attached thereto is a true and complete copy
of the by-laws of such Loan Party as in effect on the Closing Date, (x)
that attached thereto is a true and complete copy of resolutions duly
adopted by the Board of Directors of such Loan Party authorizing the
Transactions, and that such resolutions have not been modified, rescinded
or amended and are in full force and effect, (y) that the certificate or
articles of incorporation of such Loan Party have not been amended since
the date of the last amendment thereto shown on the certificate of good
standing furnished pursuant to clause (A) above, and (z) as to the
incumbency and specimen signature of each officer executing any Loan
Document on behalf of such Loan Party; (C) a certificate of another officer
as to the incumbency and specimen signature of the Secretary or Assistant
Secretary executing the certificate pursuant to (B) above; and such other
documents as the Agents may reasonably request.
(d) The Administrative Agent shall have received a certificate of
Stone, dated the Closing Date and signed by a Financial Officer of and on
behalf of Stone, confirming compliance with the conditions precedent set
forth in paragraphs (b) and (c) of Section 5.01.
(e) The Administrative Agent shall have received all Fees and other
amounts due and payable on or prior to the Closing Date, including, to the
extent invoiced, reimbursement or payment of all out-of-pocket expenses
required to be reimbursed or paid by either Borrower hereunder or under any
other Loan Document.
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(f) Each of the Guarantee Agreements shall have been duly executed by the
parties thereto and delivered to the Collateral Agent and shall be in full force
and effect.
(g) (i) The Pledge Agreements and the Bond Pledge Agreements shall have
been duly executed by the parties thereto and delivered to the Collateral Agent
and shall be in full force and effect, and (i) all the outstanding capital stock
of SLP US and its Domestic Subsidiaries owned, directly or indirectly, by Stone
and all the outstanding capital stock of each Subsidiary of Canco shall have
been duly and validly pledged thereunder to the Collateral Agent and
certificates representing such shares, accompanied in the case of certificated
shares by stock powers endorsed in blank, shall be in the actual possession of
the Collateral Agent; and (ii) the Security Agreements and the Hypothecs shall
have been duly executed by the Loan Parties party thereto and shall have been
delivered to the Collateral Agent and shall be in full force and effect on such
date and each document (including each Uniform Commercial Code financing
statement) reasonably requested by the Agents to be filed, registered or
recorded in order to create in favor of the Collateral Agent a valid, legal and
perfected or published first-priority or first ranking security interest in and
lien on the Collateral described in each such agreement (subject to any Lien
expressly permitted by Section 7.02) shall have been delivered to the Collateral
------------
Agent or the Trustee, as the case may be.
(h) The Collateral Agent shall have received (i) the results of a search
of the Uniform Commercial Code filings made with respect to the Loan Parties in
the states in which the chief executive office of each such person is located
and the other jurisdictions in which Uniform Commercial Code filings are to be
made pursuant to the preceding paragraph, together with copies of the financing
statements disclosed by such search and (ii) the results of equivalent searches
made in each other jurisdiction reasonably requested by the Agents, in each case
accompanied by evidence reasonably satisfactory to the Agents that the Liens
indicated in any such financing statement (or similar document) or otherwise
disclosed in such searches would be permitted under Section 7.02 or have been
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released.
(i) (i) Each of the Mortgages, relating to each of the Mortgaged
Properties shall have been duly executed by the parties thereto and delivered to
the Collateral Agent and shall be in full force and effect, (ii) each of such
Mortgaged Properties shall not be subject to any Lien other than those expressly
permitted under Section 7.02, (iii) a lender's title insurance policy or, in the
------------
case of Mortgaged Property located in Canada, except as otherwise agreed to by
the Agents, a written legal opinion, together with such surveys reasonably
requested by the Agents, paid for by the Borrowers, in form and substance
reasonably acceptable to the Agents, insuring or opining, as the case may be,
that such Mortgage constitutes a first lien on such Mortgaged Property (subject
to any Lien expressly permitted by Section 7.02 or otherwise agreed to by the
------------
Agents) shall have been received by the Agents and (iv) the Collateral Agent
shall have received such other documents as reasonably requested in writing by
the Agents.
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(j) The Administrative Agent shall have received copies of, or an
insurance broker's or agent's certificate as to coverage under, the insurance
policies required by Section 6.02 and the applicable provisions of the Security
------------
Documents, each of which policies shall be endorsed or otherwise amended to
include a lender's loss payable endorsement and to name the Collateral Agent as
additional insured, in form and substance reasonably satisfactory to the
Administrative Agent.
(k) Except with respect to the Final Transaction Steps, the Acquisition
shall have been consummated substantially simultaneously with the initial Credit
Event hereunder in accordance (i) in all material respects with applicable law
and (ii) in all material respects with the terms of the Reorganization
Agreement; and the conditions to Stone's obligations set forth in the Pre-Merger
Agreement shall have been satisfied without giving effect to any waiver or
amendment in any manner materially adverse to the Lenders that was not approved
by the Agents.
(l) All principal, premium (if any), interest, fees and other amounts due
and owing under the Existing SLP Indebtedness shall have been paid in full, the
commitments thereunder terminated and all guarantees thereof and security
therefor released and discharged, and the Agents shall have received reasonably
satisfactory evidence thereof. After giving effect to the Acquisition and the
other Transactions, SLP US, Canco and their respective subsidiaries shall have
outstanding no Indebtedness other than Loans hereunder and Indebtedness set
forth on Schedule 7.01.
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(m) The Administrative Agent shall have received the financial statements
referred to in Section 4.05, which financial statements shall not be materially
------------
inconsistent with the information, projections and financial models delivered
prior to the date hereof.
(n) All requisite material approvals and consents to the Acquisition and
the other Transactions of or from Governmental Authorities and all material
third parties shall have been received to the extent required and all applicable
appeal periods shall have expired and there shall be no governmental or judicial
action, actual or threatened, that has or could have a reasonable likelihood of
restraining, preventing or imposing materially burdensome conditions on the
Acquisition (including the Final Transaction Steps) and the other Transactions,
or the consummation of the other transactions contemplated hereby or that would
require any divestiture of a material portion of the assets of Canco.
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ARTICLE VI
Affirmative Covenants
Each Borrower covenants and agrees with each Lender, each Agent, the
Administrative Agent and the Facing Agent that, so long as this Agreement shall
remain in effect, the LC Exposure shall not equal zero or the principal of or
interest on any Loan or any LC Disbursement, Fees or any other expenses or
amounts payable under any Loan Document shall remain unpaid, unless the Required
Lenders shall otherwise consent in writing, it will, and will cause each of the
Subsidiaries to:
SECTION 6.01. Existence; Businesses and Properties. (a) Do or cause to be
done all things necessary to preserve, renew and keep in full force and effect
its legal existence, except as otherwise permitted under Section 7.05.
------------
(b) Do or cause to be done all things necessary to preserve, renew and
keep in full force and effect the rights, licenses, permits, trademarks, trade
names, privileges and franchises necessary or desirable in the normal conduct of
its business, except for any trademarks, trade names or franchises that are not
material to the business of Stone and the Subsidiaries taken as a whole;
maintain and operate such business in substantially the manner in which it is
currently conducted and operated; and at all times keep all property useful and
necessary in its business in good working order and condition to the extent
required by sound business practices.
SECTION 6.02. Insurance. Keep its insurable properties adequately insured
at all times by financially sound and reputable insurers; maintain such other
insurance, to such extent and against such risks, including fire and other risks
insured against by extended coverage, as is customary with companies of
established repute in the same general area engaged in the same or similar
businesses, including public liability insurance against claims for personal
injury or death or property damage occurring upon, in, about or in connection
with the use of any properties owned, occupied or controlled by it or the use of
any products sold by it; and maintain such other insurance as may be required by
law and, with respect to the Mortgaged Properties, as is required by the
Mortgages.
SECTION 6.03. Obligations and Taxes. Pay and discharge promptly when due
all taxes, assessments and governmental charges or levies imposed upon it or
upon or in respect of its property or assets, as well as all claims for labor,
materials and supplies or otherwise that, if unpaid, might give rise to a Lien
upon such properties or any part thereof; provided, however, that such payment
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and discharge shall not be required with respect to any such obligation, tax,
assessment, charge, levy or claim so long as the validity or amount thereof
shall be contested in good faith by appropriate proceedings and it shall have
set aside on its books, in accordance with U.S. GAAP, adequate reserves with
respect thereto and such contest operates to suspend enforcement of a Lien and,
in the case of a Mortgaged Property or other material property or asset, there
is no material risk of forfeiture of such property.
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SECTION 6.04. Financial Statements, Reports, etc. Furnish to the Agents,
the Administrative Agent, the Facing Agent and each Lender:
(a) in the case of Stone, within 90 days after the end of each fiscal
year, its consolidated balance sheet and related statements of operations,
stockholders' equity and cash flows, showing the financial condition of
Stone and the consolidated Subsidiaries as of the close of such fiscal year
and the results of its operations and the operations of such Subsidiaries
during such year, all audited by Ernst & Young LLP or other independent
auditors of recognized national standing acceptable to the Required Lenders
and accompanied by an opinion of such accountants (which shall not be
qualified in any material respect) to the effect that such consolidated
financial statements fairly present the financial condition and results of
operations of Stone on a consolidated basis in accordance with U.S. GAAP;
(b) in the case of Stone, within 45 days after the end of each of the
first three fiscal quarters of each fiscal year, (i) its consolidated
balance sheet and related statements of operations, stockholders' equity
and cash flows, showing the financial condition of Stone and the
consolidated Subsidiaries as of the close of such fiscal quarter and the
results of its operations and the operations of such Subsidiaries during
such fiscal quarter and the then-elapsed portion of the fiscal year and
(ii) a narrative discussion of the results of operations of Stone and its
consolidated Subsidiaries in a form reasonably satisfactory to the Agents
(it being understood that, in the case of clause (i) above, such
----------
information shall be in reasonable detail and certified by a Financial
Officer of Stone, as fairly presenting the financial condition and results
of operations of Stone on a consolidated basis in accordance with U.S.
GAAP, subject to normal year-end audit adjustments);
(c) concurrently with any delivery of financial statements of Stone
under paragraph (a) or (b) above, a certificate of a Financial Officer of
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Stone (i) certifying that, after due investigation and reasonable inquiry,
no Default or Event of Default has occurred or, if such a Default or Event
of Default has occurred, specifying the nature and extent thereof and any
corrective action taken or proposed to be taken with respect thereto and
(ii) setting forth computations in reasonable detail satisfactory to the
Administrative Agent of the ratios contemplated by the definition of the
term "Applicable Rate" and demonstrating compliance with the covenants
contained in Sections 7.01, 7.02, 7.03, 7.04, 7.06, 7.13, 7.14 and 7.15;
------------- ---- ---- ---- ---- ---- ---- ----
(d) concurrently with any delivery of financial statements under
paragraph (a) above, a certificate of the accounting firm opining on such
statements (which certificate may be limited to accounting matters and
disclaim responsibility for legal interpretations) certifying (i) whether
in connection with its audit examination any Default or Event of Default
has come to its attention and, if such event has come to its attention, the
nature and extent thereof and (ii) that based on its audit examination,
nothing has come to its attention that leads it to believe that the
information contained in the certificate delivered therewith pursuant to
paragraph (c) above is not correct;
-------------
80
(e) promptly after the same become publicly available, copies of all
periodic and other reports, proxy statements and other materials (other
than (i) the exhibits to registration statements and (ii) any registration
statements on Form S-8 or its equivalent) filed by SSCC, either Borrower or
any of the Subsidiaries with the Securities and Exchange Commission, or any
Governmental Authority succeeding to any of or all the functions of such
Commission, or with any securities commission of any Canadian province, or
with any Canadian or U.S. securities exchange, or distributed to any such
Person's shareholders (other than to SSCC, the Borrowers or any of the
Subsidiaries), as the case may be;
(f) in the case of Stone, as soon as available, and in any event no
later than 90 days after each fiscal year, a consolidated annual plan,
prepared in accordance with Stone's normal accounting procedures applied on
a consistent basis, for the next fiscal year of Stone;
(g) upon the earlier of (i) 90 days after the end of each fiscal year
of Stone and (ii) the date on which the financial statements of Stone are
delivered pursuant to paragraph (a) above, a certificate of a Financial
-------------
Officer of Stone setting forth, in detail reasonably satisfactory to the
Agents, the amount of Excess Cash Flow, if any, for such fiscal year;
(h) promptly from time to time, such other information regarding the
operations, business affairs and financial condition of the Borrowers, or
compliance with the terms of any Loan Document, as the Agents, the
Administrative Agent, the Facing Agent or any Lender may reasonably
request; and
(i) a copy of all notices (other than notices regarding any scheduled
or mandatory repayments), certificates, financial statements and reports,
as and when delivered by or on behalf of Stone to the holders of any
Subordinated Notes, Senior Notes or First Mortgage Notes.
SECTION 6.05. Litigation and Other Notices. Furnish to the Agents, the
Administrative Agent, the Facing Agent and each Lender prompt written notice of
the following:
(a) any Event of Default or Default, specifying the nature and extent
thereof and the corrective action (if any) proposed to be taken with
respect thereto;
(b) the filing or commencement of, or any notice to either Borrower
or any Subsidiary of the intention of any Person to file or commence, any
action, suit or proceeding (whether at law or in equity or by or before any
Governmental Authority or any arbitrator, against either Borrower or any
Affiliate thereof) that, if adversely determined, could reasonably be
expected to result in a Material Adverse Effect; and
(c) any development that has resulted in, or could reasonably be
anticipated to result in, a Material Adverse Effect.
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SECTION 6.06. Benefit Plans. Comply in all material respects with the
applicable provisions of ERISA and, with respect to any Canadian Pension Plan,
the ITA and any applicable provincial pension legislation, and furnish to the
Agents, the Administrative Agent, the Facing Agent and each Lender (i) as soon
as possible after, and in any event within 30 days after any Responsible Officer
of either Borrower or any ERISA Affiliate either knows or has reason to know
that any Reportable Event has occurred that alone or together with any other
Reportable Event could reasonably be expected to result in liability of either
Borrower or any of the Subsidiaries to the PBGC in an aggregate amount exceeding
U.S.$25,000,000, a copy of the notice of such event required to be given to the
PBGC or, if notice is not so required, a statement of a Financial Officer of
each Borrower, as the case may be, setting forth in reasonable detail the nature
of such event and the action proposed to be taken with respect thereto, (ii)
promptly after receipt thereof, a copy of any notice either Borrower or any
ERISA Affiliate may receive from the PBGC relating to the intention of the PBGC
to terminate any Plan or Plans (other than a Plan maintained by an ERISA
Affiliate that is considered an ERISA Affiliate only pursuant to subsection (m)
or (o) of Section 414 of the Code) or to appoint a trustee to administer any
Plan or Plans, (iii) within 10 days after the due date for filing with the PBGC
pursuant to Section 412(n) of the Code of a notice of failure to make a required
installment or other payment with respect to a Plan, a copy of such notice and a
statement of a Financial Officer of the applicable Borrower setting forth in
reasonable detail the nature of such failure and the action proposed to be taken
with respect thereto, (iv) promptly and in any event within 30 days after
receipt thereof by either Borrower or any ERISA Affiliate from the sponsor of a
Multiemployer Plan, a copy of each notice received by such Borrower or any ERISA
Affiliate concerning (A) the imposition of Withdrawal Liability or (B) a
determination that a Multiemployer Plan is, or is expected to be, terminated or
in reorganization, in each case within the meaning of Title IV of ERISA, (v)
promptly and in any event within 30 days after receipt thereof by either
Borrower or any Subsidiary, a copy of any material notice, ruling or opinion
that either Borrower or any Subsidiary may receive from any applicable
Governmental Authority with respect to any Canadian Pension Plan; and (vi)
notification within 30 days of any material increases in the benefits to be
provided under any existing Canadian Pension Plan or Canadian Benefit Plan, or
the establishment of any new Canadian Pension Plan or Canadian Benefit Plan, or
the commencement of contributions to any such plan to which Canco or any of its
Subsidiaries was not previously contributing.
SECTION 6.07. Maintaining Records; Access to Properties and Inspections.
Maintain all financial records in accordance with U.S. GAAP or Canadian GAAP, as
applicable, and permit any representatives designated by the Agents, the
Administrative Agent, the Facing Agent or any Lender to visit and inspect the
properties and financial records of each Borrower and any Subsidiary during
normal business hours and upon reasonable notice and as often as reasonably
requested and to make extracts from and copies of such financial records, and
permit any representatives designated by the Agents, the Administrative Agent,
the Facing Agent or any Lender to discuss at such reasonable times and at such
reasonable intervals as may be reasonably requested the affairs, finances and
condition of the Borrowers or any Subsidiary or any properties of the Borrowers
or any Subsidiary with the officers thereof and independent accountants
therefor, provided that all such visits, inspections and inquiries shall be
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coordinated through the Agents.
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SECTION 6.08. Use of Proceeds. The proceeds of the Term Loans will be
used on the Closing Date only (i) to directly or indirectly pay the Cash
Consideration, (ii) to refinance the Existing SLP Indebtedness and repay certain
other outstanding indebtedness of Canco and (iii) to pay the fees, costs and
expenses incurred in connection with the Transactions. The proceeds of the
Revolving Loans will be used only for general corporate purposes. No part of the
proceeds of any Loan will be used, whether directly or indirectly, for any
purpose that entails a violation of any of the Regulations of the Board,
including Regulations T, U and X. Letters of Credit will be issued only for
general corporate purposes of Canco and its Subsidiaries.
SECTION 6.09. Compliance with Law. Comply with the requirements of all
applicable laws (including Environmental Laws), rules, regulations, court orders
and decrees, and orders of any Governmental Authority, that are applicable to it
or to any of its properties, except where noncompliance could not reasonably be
expected to result in a Material Adverse Effect.
SECTION 6.10. Further Assurances. (a) Execute any and all further
documents, financing statements, agreements and instruments, and take all
further action (including filing Uniform Commercial Code and other financing
statements, mortgages, hypothecs and deeds of trust), that may be required under
applicable law or which the Required Lenders, any Agent or the Administrative
Agent may reasonably request, in order to effectuate the transactions
contemplated by the Loan Documents and in order to grant, preserve, protect and
perfect the validity and first priority of the security interests created or
intended to be created by the Security Documents.
(b) Cause (i) each Subsidiary that is or becomes a Material Subsidiary and
(ii) each Domestic Subsidiary of SLP US or Canadian Subsidiary of Canco (in each
case, other than any Inactive Subsidiary) to undertake the obligation of, and to
become a Guarantor pursuant to, a Canco Subsidiary Guarantee Agreement or a
Stone Subsidiary Guarantee Agreement, as applicable; provided, however, that no
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(x) Foreign Subsidiary shall be required to guarantee the Obligations of Stone
hereunder and (y) each such Subsidiary that owns real or personal property in
the State of Maryland shall undertake the obligation of, and become a Guarantor
pursuant to, a Maryland Subsidiary Guarantee Agreement.
(c) From time to time, to the extent not prohibited by any Specified
Senior Indenture, the Borrowers will, at their cost and expense, promptly secure
the Obligations by pledging or creating, or causing to be pledged or created,
perfected (or, in the case of assets or properties located in the Province of
Quebec, published) security interests with respect to such of the assets and
properties of SLP US and its wholly owned Domestic Subsidiaries and of Canco and
its wholly owned Canadian Subsidiaries as either Agent or the Required Lenders
shall reasonably request (it being understood that it is the intent of the
parties that to the extent not prohibited by any Specified Senior Indenture, (x)
the Obligations of Stone shall be secured by substantially all of the assets of
SLP US and its wholly owned Domestic Subsidiaries and (y) the Obligations of
Canco shall be secured by substantially all of the assets of SLP US and its
wholly owned Domestic Subsidiaries and by substantially all of the assets of
Canco and all wholly owned Canadian Subsidiaries of Canco (other than assets
owned directly or indirectly by Stone prior to the Acquisition)). Such security
interests and Liens will be created under the Security Documents and other
security agreements, mortgages,
83
deeds of trust and other instruments and documents in form and substance
reasonably satisfactory to the Collateral Agent, and the Borrowers shall deliver
or cause to be delivered to the Lenders all such instruments and documents
(including customary legal opinions, title insurance policies or title opinions
and lien searches) as the Collateral Agent shall reasonably request to evidence
compliance with this Section. The Borrowers agree to provide such evidence as
the Collateral Agent shall reasonably request as to the perfection and priority
status of each such security interest and Lien. Notwithstanding the foregoing,
no after-acquired real property having a value of less than U.S.$500,000 shall
be required to be mortgaged or pledged to secure all or any part of the
Obligations. To the extent that the assets and/or properties of any Subsidiary
of SLP US or Canco existing on the date hereof are not pledged because (x) of a
legal or other restriction impeding such pledge or (y) such Subsidiary is not
wholly owned, if such restriction subsequently becomes inapplicable or such
Subsidiary subsequently becomes wholly owned, the Borrowers will, at their cost
and expense, promptly cause the assets and/or properties of such Subsidiary to
be pledged and the security interest therein perfected or published, as
applicable.
(d) In the event that any survey of Mortgaged Property discloses any
matter (including any encroachment or violation of an existing servitude, right
of way, reservation made in the grant from the Crown easement or restrictive
covenant) the effect of which is to detract materially from the value of the
property subject thereto or to interfere in any material respect with the
ordinary conduct of the business of either Borrower or any of the Subsidiaries,
the applicable Borrower shall, reasonable upon request by any Agent or the
Administrative Agent, use reasonable efforts (or cause the Subsidiary that is
the user or owner of the Mortgaged Property in question to use reasonable
efforts) to cause such matter to be corrected or otherwise resolved to the
reasonable satisfaction of the Agents.
(e) Cause the Canadian Amalgamations and the Post Closing Distributions to
occur as promptly as practicable (and in any event within 10 days) following the
Closing Date, and provide reasonably satisfactory evidence thereof to the
Agents.
SECTION 6.11. Material Contracts. Maintain in full force and effect
(including exercising any available renewal option), and without amendment or
modification, each Material Contract, unless the failure so to maintain any such
Material Contract (or any amendment or modification thereto) could not,
individually or in the aggregate, reasonably be expected to have a Material
Adverse Effect.
SECTION 6.12. Environmental Matters. (a) Promptly give notice to the
Administrative Agent upon becoming aware of (i) any violation of any
Environmental Law, (ii) any claim, inquiry, proceeding, investigation or other
action, including a request for information or a notice of potential
environmental liability, by or from any Governmental Authority or any third
party claimant or (iii) the discovery of the release of any Hazardous Material
at, on, under or from any of the Real Properties or any facility or equipment
thereat in excess of reportable or allowable standards or levels under any
Environmental Law, or in a manner or amount that could reasonably be expected to
result in liability under any Environmental Law, in each case that could
reasonably be expected to result in a Material Adverse Effect.
84
(b) Upon discovery of the presence on any of the Real Properties of any
Hazardous Material that is in violation of, or that could reasonably be expected
to result in liability under, any Environmental Law, in each case that could
result in a Material Adverse Effect, take all necessary steps to initiate and
expeditiously complete all remedial, corrective and other action to eliminate
any such adverse effect, and keep the Administrative Agent informed of such
actions and the results thereof.
SECTION 6.13 Surveys. Within 120 days after the Closing Date, for
each Mortgaged Property identified on Schedule 6.13 attached hereto having a
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fair market value of U.S.$1,000,000 or more, deliver or cause to be delivered
(i) an A.L.T.A. survey or (ii) a perimeter survey as indicated on such Schedule,
all such surveys to be in form and substance reasonably satisfactory to the
Administrative Agent and endorsements to the title policies required by Section
-------
5.02(i) providing for survey-related coverage reasonably satisfactory to the
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Administrative Agent.
ARTICLE VII
Negative Covenants
Each Borrower covenants and agrees with each Lender, each Agent, the
Administrative Agent, and the Facing Agent that, so long as this Agreement shall
remain in effect, the LC Exposure shall not equal zero or the principal of or
interest on any Loan or any LC Disbursement, Fees or any other expenses or
amounts payable under any Loan Document shall remain unpaid, unless the Required
Lenders shall otherwise consent in writing, it will not, and will not cause or
permit any of the Subsidiaries to:
SECTION 7.01. Indebtedness. Create, incur, assume or permit to exist any
Indebtedness, except, without duplication:
(a) the Indebtedness created hereunder and under the other Loan
Documents;
(b) Indebtedness under the Existing Stone Credit Agreement and under
the Existing Stone Loan Documents, the Subordinated Notes, the Senior Notes
and the First Mortgage Notes and any Guarantees thereof as in effect on the
Closing Date;
(c) the Indebtedness existing on the Closing Date listed on Schedule
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7.01;
----
(d) Indebtedness of any Foreign Subsidiary (other than a Canadian
Subsidiary) and any Guarantees thereof, provided that such Indebtedness
shall not be Guaranteed by or otherwise recourse to either Borrower or any
Domestic Subsidiary or Canadian Subsidiary except as permitted by Section
7.01(o) or Section 7.04(c);
85
(e) Indebtedness of either Borrower and Guarantees thereof the net
proceeds of which are used substantially concurrently to refinance
Indebtedness described in paragraph (b) or (c) above so long as (i) no SLP
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Credit Party or Canco Credit Party shall become an obligor with respect to
such refinancing Indebtedness unless and to the extent it was an obligor
with respect to the Indebtedness being refinanced, (ii) such refinancing
Indebtedness is in an aggregate principal amount not greater than the
aggregate principal amount of the Indebtedness being refinanced plus the
----
amount of any premium required to be paid thereon and any interest, fees
and costs incurred in such refinancing, (iii) such Indebtedness has a final
maturity more than 90 days later than the Term Loan Maturity Date and a
weighted average life greater than the Term Loans and (iv) each of the
covenants, events of default and other provisions thereof (including any
Guarantees thereof) shall be no more materially adverse, when taken as a
whole, to the Lenders than those contained in the Indebtedness being
refinanced, provided that (A) if the proceeds of revolving loans under the
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Existing Stone Credit Agreement are used to repurchase or redeem any Senior
Notes, Subordinated Notes or First Mortgage Notes, Stone may incur
Indebtedness otherwise meeting the requirements of this paragraph (e) (as
-------------
if such Indebtedness were used to refinance such Senior Notes, Subordinated
Notes or First Mortgage Notes) to repay such revolving loans, (B) the First
Mortgage Notes may be refinanced as senior secured bank indebtedness and
may include such covenants, events of defaults and other terms and
conditions no more materially adverse to Stone or the Lenders when taken as
a whole than the terms contained in this Agreement and (C) the Subordinated
Notes, Senior Notes and the First Mortgage Notes may be refinanced to
include covenants, events of default and other terms and conditions that
are no more restrictive to Stone or the Subsidiaries than is customary, at
the time of such refinancing, for senior unsecured (or secured, in the case
of the First Mortgage Notes) notes for issuers with a debt-rating similar
to Stone;
(f)(i) Capital Lease Obligations, (ii) Indebtedness created, incurred
or assumed in respect of the purchase, improvement or construction of
property, provided such Indebtedness is created, incurred or assumed
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substantially contemporaneously with such purchase or construction (and in
any event not later than 120 days after the earlier of (x) the placement in
service of or (y) the final payment on such property) and (iii)
Indebtedness consisting of industrial revenue bonds or pollution control
bonds, and Guarantees of such Indebtedness, such that the sum of the
Indebtedness created, incurred or assumed pursuant to this clause (f) shall
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not exceed, in the aggregate U.S.$300,000,000 at any time outstanding,
provided that any Indebtedness incurred by the SLP Credit Parties and the
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Canco Credit Parties pursuant to this clause (f) shall be limited to
U.S.$100,000,000 in aggregate principal amount at any time outstanding;
(g) Indebtedness created pursuant to any Rate Protection Agreement
or Currency Agreement;
(h) intercompany loans and advances permitted by Section 7.04,
------------
provided that any such intercompany loans or advances from SLP Credit
--------
Parties or Canco Credit Parties to a Borrower or any other Subsidiary shall
be evidenced by an intercompany note pledged to
86
BTCo, as Collateral Agent, to secure the Obligations, pursuant to a Pledge
Agreement; provided further that no such intercompany notes shall be
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pledged by any Canco Credit Party to secure any Obligations of Stone or any
SLP Credit Party;
(i) Indebtedness of Stone or any Participating Subsidiary created
pursuant to the Receivables Program Documents (including any Indebtedness
of Stone or any Participating Subsidiary to FinSub arising because any sale
or purported sale of Program Receivables to FinSub is required to be
recharacterized as a loan);
(j) Indebtedness of FinSub to Stone or any other Participating
Subsidiary, when combined with any capital contributions pursuant to
Section 7.04(g), not exceeding U.S.$50,000,000 in an aggregate amount at
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any time outstanding;
(k) Indebtedness incurred to pay annual premiums for property and
casualty insurance policies maintained by either Borrower or any Subsidiary
and other prepaid amounts in respect of goods or services purchased by the
Borrowers or the Subsidiaries in the ordinary course of business not
exceeding U.S.$40,000,000 in an aggregate amount at any time outstanding;
(l) Indebtedness of the Borrowers and their Subsidiaries and
Guarantees thereof in respect of letters of credit that are not secured and
do not exceed U.S.$25,000,000 in an aggregate amount at any time
outstanding;
(m) Indebtedness of any Person acquired by a Borrower or any
Subsidiary in an acquisition permitted hereunder and assumed by a Borrower
or any Subsidiary pursuant to such acquisition (including any refinancing,
renewal or replacement, in whole or in part, thereof from time to time),
provided that (i) such Indebtedness was not incurred in contemplation of
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such acquisition and (ii) the aggregate principal amount of such
Indebtedness shall not exceed U.S.$25,000,000 at any time outstanding
("Acquired Indebtedness");
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(n) Guarantees with respect to bonds issued to support workers'
compensation and other similar obligations (other than Indebtedness)
incurred by a Borrower or any Subsidiary in the ordinary course of
business;
(o) Indebtedness of a Borrower or any Subsidiary and Guarantees
thereof incurred in the ordinary course of business that does not exceed
U.S.$100,000,000 in the aggregate at any time outstanding, provided that
--------
any Indebtedness incurred by the SLP Credit Parties and the Canco Credit
Parties pursuant to this clause (o) shall be limited to U.S.$50,000,000 in
----------
an aggregate amount at any time outstanding; and
(p) Indebtedness of MBI Limited following the MBI Transaction that is
unsecured in an aggregate amount not to exceed U.S.$55,000,000 at any time
outstanding.
87
SECTION 7.02. Liens. (a) Create, incur, assume or permit to exist any Lien
on any property or assets (including stock or other securities of any Person)
now owned or hereafter acquired by it or on any income or revenues or rights in
respect of any thereof, except:
(i) Permitted Liens;
(ii) Liens created under the Loan Documents;
(iii) Liens on the Existing Stone Collateral that secure the
obligations (including the guarantees thereof) of Stone under the Existing
Stone Loan Documents;
(iv) Liens on Program Receivables granted pursuant to the
Receivables Program Documents;
(v) Liens existing on the Closing Date that secure the First
Mortgage Notes or any refinancing thereof pursuant to Section 7.01(e),
---------------
provided that such Liens shall apply only to the property that is the
--------
subject of such Liens as of the Closing Date, or any replacement or
substitution of such property on the terms and conditions contained in the
First Mortgage Note Indenture as in effect on the Closing Date;
(vi) Liens existing as of the Closing Date and listed on Schedule
--------
7.02;
----
(vii) Liens securing Indebtedness permitted by Section 7.01(f),
provided that any such Lien shall apply only to the property that is the
--------
subject of such Indebtedness and, if applicable, the principal amount of
Indebtedness secured by any such Lien shall at no time exceed 100% of the
fair market value (as determined in good faith by the Board of Directors of
the applicable Borrower or Subsidiary) of the respective property at the
time it was so acquired;
(viii) Liens for Indebtedness permitted by Section 7.01(k), provided
--------------- --------
that such Liens attach only to unearned and return premiums, dividends and
loss payments which reduce the unearned premiums under insurance policies
the premiums of which have been financed with such Indebtedness;
(ix) Liens securing any Acquired Indebtedness assumed in connection
with any acquisition permitted hereunder, provided that such Liens attach
--------
only to property or assets acquired in connection with such acquisition and
were not created in contemplation thereof;
(x) Liens on property or assets owned by Foreign Subsidiaries
securing Indebtedness permitted under Section 7.01(d);
---------------
(xi) Liens created under any agreement relating to the sale,
transfer or other disposition of assets permitted hereunder, provided that
--------
such Liens relate solely to the assets to be sold, transferred or otherwise
disposed;
88
(xii) any Lien consisting of a lease of personal property of a Person
to customers of such Person, if such lease constitutes an Investment
permitted under Section 7.04(i);
---------------
(xiii) Liens deemed to exist in connection with any Permitted
Investment, provided such Liens only apply to the assets constituting such
--------
Permitted Investment;
(xiv) Liens on assets of a Borrower or any Subsidiary securing
Indebtedness permitted by Section 7.01(o) not exceeding U.S.$100,000,000 in
---------------
an aggregate amount outstanding at any time, provided that not more than
--------
U.S.$25,000,000 of such Indebtedness incurred by the SLP Credit Parties and
the Canco Credit Parties may be secured at any time, and provided further
-------- -------
that no such Lien shall apply to any assets constituting Collateral; and
(xv) extensions, renewals or replacements of any Lien referred to
above, provided that such extension, renewal or replacement is limited to
--------
the Indebtedness and property originally encumbered thereby.
(b) Enter into any agreement prohibiting the creation or assumption of any
Lien upon properties or assets, whether now owned or hereafter acquired, except
any such restriction that exists under (i) this Agreement, (ii) the indentures
governing the Subordinated Notes, the Senior Notes or the First Mortgage Notes
(or any refinancing thereof pursuant to Section 7.01(e)), (iii) with respect to
FinSub, the Receivables Program, (iv) the Existing Stone Loan Documents, (v)
agreements governing any Indebtedness of Foreign Subsidiaries (other than Canco
and the other Canadian Subsidiaries) permitted hereunder and (vi) any documents
governing secured Indebtedness permitted hereunder, provided that such
--------
restrictions only relate to the assets securing such Indebtedness.
SECTION 7.03. Sale/Leaseback Transactions. Enter into any arrangement,
direct or indirect, whereby either Borrower or any of the Subsidiaries shall
sell or transfer any property, real or personal, used or useful in its business,
hereafter acquired, and thereafter rent or lease such property or other property
that it intends to use for substantially the same purpose or purposes as the
property sold or transferred, provided that the Borrowers and the Subsidiaries
--------
may enter into any such arrangement to the extent that the Capital Lease
Obligations and Liens associated therewith would be permitted by Sections
--------
7.01(f)(i) and 7.02(a)(vii), respectively, and, provided further that, if either
---------- ------------ ----------------
Borrower or any of the Subsidiaries enter into such an arrangement with respect
to any property owned by such Borrower or any Subsidiary more than 120 days
prior to such transaction, such arrangement shall be treated as an Asset Sale
and shall also be subject to the restrictions of Section 7.16.
------------
SECTION 7.04. Investments, Loans and Advances. Have outstanding or make
any loan or advance to or have or make any Investment in any other Person or
suffer to exist any such loan or advance or Investment or any obligation to make
such advance or Investment, except as set forth on Schedule 7.04 and except:
-------------
(a) Permitted Investments;
89
(b) loans, advances or other Investments made by (i) either Borrower
or any Subsidiary to either Borrower, any wholly owned Canadian Subsidiary,
any Guarantor or any wholly owned Domestic Subsidiary (provided that any
--------
Loan Party complies with the requirements of Section 7.16) and (ii) any
------------
Foreign Subsidiary (other than a Canadian Subsidiary) to any other Foreign
Subsidiary;
(c) loans, advances or other Investments made to or in any Subsidiary
(other than a Guarantor, a wholly owned Domestic Subsidiary or a wholly
owned Canadian Subsidiary) and Guarantees of obligations of any such
Subsidiary in an aggregate amount not to exceed U.S.$100,000,000
outstanding at any time;
(d) Investments consisting of non-cash consideration received in
connection with a sale of assets permitted under Section 7.16;
------------
(e) Investments by either Borrower or any Subsidiary in the capital
stock of their respective subsidiaries in existence on the Closing Date;
(f) Investments consisting of securities or notes received in
settlement of accounts receivable incurred in the ordinary course of
business from a customer which either Borrower or any Subsidiary has
reasonably determined is unable to make cash payments in accordance with
the terms of such account receivable;
(g) Investments by Stone or any Participating Subsidiary in FinSub,
when combined with any Indebtedness outstanding pursuant to Section
-------
7.01(j), in an aggregate amount not to exceed U.S.$50,000,000 at any time
-------
outstanding;
(h) prepaid expenses or accounts receivable created or acquired in
the ordinary course of business;
(i) any Investments consisting of (i) any contract pursuant to which
a Borrower or any Subsidiary obtains the right to cut, harvest or otherwise
acquire timber on property owned by any other Person, whether or not such
Borrower's or the Subsidiary's obligations under such contract are
evidenced by a note or other instrument, or (ii) loans or advances to
customers of a Borrower or any Subsidiary, including leases of personal
property of such Borrower or such Subsidiary to such customers, provided
--------
that the contracts, loans and advances constituting permitted Investments
pursuant to this clause (i) shall not exceed U.S.$10,000,000 at any time
----------
outstanding;
(j) deposits made in the ordinary course of business to secure
performance of operating leases;
(k) loans to officers and employees not to exceed U.S.$5,000,000 at
any time outstanding;
90
(l) Investments, loans and advances made in connection with the
Acquisition and as contemplated by the Reorganization Agreement (as in
effect on the Closing Date);
(m) other Investments in an aggregate amount not exceeding
U.S.$100,000,000 at any time outstanding;
(n) (i) intercompany loans evidenced by the Cameo Note and the SCC
▇▇▇▇▇ Note pursuant to Liability Management Transactions; provided that
--------
such notes are unsecured and otherwise in form and substance satisfactory
to the Administrative Agent, and it being agreed that the Cameo Note and
SCC ▇▇▇▇▇ Note will not be required to be pledged as Collateral; and (ii)
intercompany loans made by Stone to SCC RMMI and SCC AMMI on a revolving
credit basis pursuant to a revolving credit agreement, notes and other
documentation in form and substance satisfactory to the Administrative
Agent;
(o) Stone may make additional capital contributions to SCC RMMI and
SCC AMMI pursuant to the stockholders' agreements contemplated by the
Liability Management Transactions, provided that such stockholders'
--------
agreements are in form and substance satisfactory to the Administrative
Agent; and
(p) Investments made in any Subsidiary with the proceeds of any
Investment received from SSCC.
Notwithstanding the foregoing, neither Stone nor Canco shall permit more than
15% of its consolidated revenues or 15% of its consolidated assets for any
fiscal year to be generated or held by any Domestic Subsidiaries or Canadian
Subsidiaries, respectively, in the aggregate, that are not Loan Parties.
91
SECTION 7.05. Mergers, Consolidations, Sales of Assets and Acquisitions.
Merge into or amalgamate or consolidate with any other Person, or permit any
other Person to merge into or amalgamate or consolidate with it, or sell,
transfer, assign, lease, sublease or otherwise dispose of (in one transaction or
in a series of transactions) all or substantially all of its assets (when taken
as a whole in combination with the other assets and properties of the Borrowers
and the Subsidiaries), or purchase, lease or otherwise acquire (in one
transaction or a series of transactions) all or any substantial part of the
assets of any other Person except:
(a) if at the time thereof and immediately after giving effect
thereto no Default or Event of Default shall have occurred and be
continuing, (i) any wholly owned Domestic Subsidiary (other than FinSub and
SLP US and its subsidiaries) may merge into or consolidate with, liquidate
or dissolve into, or sell, transfer, assign, lease, sublease or otherwise
dispose of all or substantially all of its assets to, Stone in a
transaction in which Stone is the surviving corporation, (ii) any wholly
owned Domestic Subsidiary (other than FinSub) may merge into or consolidate
with, liquidate or dissolve into, or sell, transfer, assign, lease,
sublease or otherwise dispose of all or substantially all of its assets to,
SLP US or any other wholly owned Domestic Subsidiary in a transaction in
which the surviving entity is SLP US or a wholly owned Domestic Subsidiary
(provided that SLP US shall be the surviving entity if it is a party to
--------
such transaction), and (iii) any wholly owned Canadian Subsidiary may merge
into or consolidate or amalgamate with, liquidate or dissolve into, or
sell, transfer, assign, lease, sublease or otherwise dispose of all or
substantially all of its assets to, Canco or any other wholly owned
Canadian Subsidiary in a transaction in which a Canco Credit Party is the
surviving corporation (provided that Canco shall be the surviving entity if
--------
it is a party to such transaction), provided that, in each case, (x) no
--------
Person other than Stone or Canco, as the case may be, or a wholly owned
Domestic Subsidiary or Canadian Subsidiary, as the case may be, receives
any consideration and (y) in the event that the surviving entity would
become a wholly owned Domestic Subsidiary of SLP US or a wholly owned
Canadian Subsidiary of Canco and has not previously become a Guarantor, the
surviving entity shall, simultaneously with such merger or consolidation,
comply with the requirements of Section 6.10(b) to the extent required by
---------------
such Section 6.10(b);
---------------
(b) if at the time thereof and immediately after giving effect
thereto no Default or Event of Default shall have occurred and be
continuing, any wholly owned Foreign Subsidiary (other than a Canadian
Subsidiary) may merge into or consolidate with, liquidate or dissolve into,
or sell, transfer, assign, lease, sublease or otherwise dispose of all or
substantially all of its assets to, any other wholly owned Foreign
Subsidiary in a transaction in which the surviving entity is a wholly owned
Foreign Subsidiary, provided that no Person other than Stone, an SLP Credit
--------
Party or a wholly owned Foreign Subsidiary receives any consideration;
(c) purchases of inventory, equipment and real property in the
ordinary course of business;
(d) acquisitions constituting Consolidated Capital Expenditures
permitted by Section 7.13;
------------
92
(e) acquisitions, mergers and other transfers constituting
Investments permitted by Section 7.04, provided (i) that Stone or Canco, as
------------ --------
the case may be, shall be the surviving corporation in any merger or
consolidation between it and any other Person and that in any merger or
consolidation involving a Subsidiary that is a Loan Party, the surviving
entity is a Loan Party and (ii) this clause (e) shall not permit the merger
----------
or consolidation of SLP US and Stone; and
(f) the Acquisition (including amalgamations, mergers and
liquidations of various Subsidiaries in connection therewith as
contemplated by the Reorganization Agreement) and the continuation of Canco
as a New Brunswick corporation.
SECTION 7.06. Restricted Payments. (a) Declare or make, directly or
indirectly, any Restricted Payment or set aside any amount for any such purpose.
(b) Notwithstanding the provisions of Section 7.06(a), each Borrower or
---------------
any Subsidiary may make Restricted Payments, provided that (i) such Restricted
--------
Payment is in compliance with applicable law, (ii) at the time of such payment
and immediately after giving effect thereto, no Default or Event of Default
shall have occurred and be continuing and (iii) the aggregate amount of such
Restricted Payment, together with the aggregate amount of all other Restricted
Payments paid by the Borrowers and the Subsidiaries in the fiscal year in which
the Restricted Payment is proposed to be paid, shall not exceed the lesser of
(A) 25% of Consolidated Net Income for the fiscal year preceding the year in
which the Restricted Payment is proposed to be paid, (B) Stone's portion of
Excess Cash Flow for the fiscal year preceding the year in which the Restricted
Payment is proposed to be paid and (C) $25,000,000.
SECTION 7.07. Transactions with Stockholders and Affiliates. Except to the
extent specifically permitted by the terms of this Agreement, directly or
indirectly enter into or permit to exist any transaction (including the
purchase, sale, lease or exchange of any property or the rendering of any
service) with any holder of 5% or more of any class of equity securities of such
Person or with any Affiliate of such Person or of any such holder, on terms that
are less favorable to such Person than those that could be obtained at the time
from Persons that are not such a holder or Affiliate, provided that the
--------
foregoing restriction shall not apply to (a) any transaction between or among
the Loan Parties or any transaction between or among Foreign Subsidiaries that
are not Loan Parties, (b) any transaction or series of transactions between or
among Stone and/or any Subsidiary on a basis that is not systematically
disadvantageous to Stone or any other Loan Party, (c) customary fees paid to
members of the Boards of Directors of the Borrowers or any of the Subsidiaries,
(d) customary compensation (including salaries and bonuses) paid to officers and
employees of the Borrowers or any Subsidiary, (e) management and financial
services provided by a Borrower to the Subsidiaries and other entities in which
such Borrower has Investments to the extent that such services are provided by
such Borrower in the ordinary course of its business and senior management of
such Borrower has determined that the providing of such services is in the best
interests of such Borrower, (f) the transactions contemplated by the Receivables
Program Documents, (g) the Acquisition and any other
93
transactions contemplated by the Pre-Merger Agreement, the SLP Acquisition
Documents or the Reorganization Agreement and (h) the MBI Transaction.
SECTION 7.08. Business. Engage at any time in any business or business
activity other than the business conducted by the Borrowers and the Subsidiaries
on the Closing Date and business activities reasonably related thereto.
SECTION 7.09. Limitations on Debt Prepayments. (a) Optionally prepay,
repurchase or redeem or otherwise defease or segregate funds (collectively,
"repay") with respect to any Indebtedness for borrowed money of either Borrower
-----
or any of the Subsidiaries; provided, however, that (i) each Borrower and any
-------- -------
Subsidiary shall be permitted (x) to make any payment permitted or required
pursuant to any Loan Document or any Existing Stone Loan Document, (y) so long
as no Default or Event of Default shall have occurred and be continuing, to
repay any intercompany Indebtedness permitted pursuant to Section 7.01, and (z)
to refinance or replace any Indebtedness as otherwise permitted hereunder and
(ii) Stone shall be permitted to repay, on a voluntary basis, all or any portion
of the Subordinated Notes, the Senior Notes or the First Mortgage Notes, in each
case, having a final maturity prior to December 31, 2002 (or if all such
Indebtedness has been repaid or refinanced pursuant to Section 7.01(e) or
---------------
Section 7.04, the Senior Notes due 2004) in an aggregate amount, including any
------------
premium paid in connection therewith, not in excess of the sum of (A)
U.S.$400,000,000, provided that such amount shall increase to U.S.$800,000,000
--------
so long as, according to the most recent quarterly financial statement delivered
pursuant to Section 6.04(b) of this Agreement, the Consolidated Leverage Ratio,
---------------
before and after giving effect to such repayment, is less than 3.00 to 1.00, (B)
the Net Cash Proceeds from the issuance of capital stock to, or the contribution
of capital from, SSCC after the Closing Date, (C) the Net Cash Proceeds of any
Asset Sale that the applicable Borrower has elected to apply to the prepayment
of such Indebtedness pursuant to the second sentence of Section 2.13(b) and (D)
---------------
any Prepayment Amount which either Borrower is entitled to use to prepay
Indebtedness pursuant to Section 2.13(h), provided further that at the time of
--------------- -------- -------
any such redemption, after giving effect to such redemption, no Default or Event
of Default shall have occurred and be continuing.
(b) Permit any amendment, waiver or modification to the terms of the
Existing Stone Loan Documents or the indentures or agreements governing the
Subordinated Notes, the Senior Notes or the First Mortgage Notes or any
indenture or agreement entered into in connection with the foregoing (or any
refinancing thereof pursuant to Section 7.01(e)) if the effect of such
----------------
amendment, waiver or modification is to impose additional or increased scheduled
or mandatory repayment, retirement, repurchase or redemption obligations in
respect of such Indebtedness or to require any scheduled or mandatory payment to
be made in respect of such Indebtedness prior to the date that such payment
would otherwise be due.
(c) Make any offer to purchase, or redeem or purchase, any Indebtedness
created pursuant to or evidenced by the Specified Senior Indentures pursuant to
a "Deficiency Offer" made in accordance with Article Eleven (or any other
similar Article or provision) of such indenture.
94
SECTION 7.10. Amendment of Certain Documents. (a) Amend, modify, cancel or
grant any waiver with respect to any indenture, note or any other instrument
evidencing Indebtedness of either Borrower or any Subsidiary in an aggregate
principal amount in excess of U.S.$50,000,000 or issue any securities in
exchange for such Indebtedness if such amendment, modification, cancelation,
grant or issuance has the effect of (i) increasing the amounts due in respect of
any such indenture, note or other instrument or any interest rate thereunder,
provided that any such increase in amount would be permitted under Section 7.01,
-------- ------------
(ii) subjecting any property of either Borrower or any Subsidiary to any Lien
other than Liens permitted under Section 7.02, (iii) shortening the maturity or
------------
weighted average life of any such Indebtedness or (iv) creating or changing any
covenant or similar restriction or event of default if such covenant or similar
restriction becomes materially more restrictive to either Borrower or any
Subsidiary, when taken as a whole, as a result of such amendment, modification,
cancelation, grant or issuance.
(b) Cause or suffer to exist any amendment, restatement, supplement or
other modification to the certificate of incorporation or by-laws of either
Borrower or any Subsidiary without the prior written consent of the Required
Lenders, unless such amendment, restatement, supplement or modification is not
materially adverse to the interests of the Lenders hereunder or under the other
Loan Documents.
(c) Permit, cause or suffer to exist any direct or indirect amendment,
restatement, supplement, waiver or other modification to any of the Receivables
Program Documents unless such amendment, restatement, supplement, waiver or
modification is not materially adverse to the interests of the Lenders under the
Loan Documents, provided that (i) Stone may amend, refinance or replace such
--------
Receivables Program so long as the new Receivables Program Documents are not
materially more restrictive, taken as a whole, on Stone, any Subsidiary or
FinSub than the Receivables Program Documents being refinanced or replaced, (ii)
such new Receivables Program shall continue to be non-recourse to Stone and the
Subsidiaries, (iii) the fair market value of accounts receivable (net of
collections) transferred by Canco and SLP US and their respective subsidiaries
to the Receivables Program shall not exceed U.S.$60,000,000, (iv) the aggregate
size of the Receivables Program shall not exceed the sum of (A) U.S.$355,000,000
and (B) any increase solely associated with any accounts receivable of SSCC and
its subsidiaries (other than Stone and its Subsidiaries) transferred to the
Receivables Program and (v) any Liens on the assets of Stone and the
Subsidiaries pursuant to the new Receivables Program are limited to the accounts
receivable and any returned inventory and intangible assets related to such
accounts.
SECTION 7.11. Limitation on Dispositions of Stock of Subsidiaries.
Directly or indirectly sell, assign, pledge or otherwise encumber or dispose of,
or permit any of the Subsidiaries to issue to any other Person (other than, in
the case of a Loan Party, to any other Loan Party, and in the case of a
Subsidiary that is not a Loan Party, to either Borrower or to any wholly owned
Subsidiary), any shares of capital stock or other equity securities of (or
warrants, rights or options to acquire shares or other equity securities of) any
of the Subsidiaries, except (i) pledges pursuant to (A) any Loan Document or (B)
any Existing Stone Loan Document and (ii) issuance to qualified directors if and
to the extent required by applicable law, provided that nothing in this Section
-------- -------
7.11 shall prohibit any
----
95
disposition permitted by Sections 7.05 and 7.16 if such sale is structured as
------------- ----
the sale of stock or other equity interests.
SECTION 7.12. Restrictions on Ability of Subsidiaries to Pay Dividends.
Permit any Subsidiary to, directly or indirectly, voluntarily create or
otherwise voluntarily cause or suffer to exist or become effective any
encumbrance or restriction on the ability of any Subsidiary to (a) pay dividends
or make any other distributions on its capital stock or any other interest or
(b) make or repay loans or advances to any Loan Party or any Canadian Subsidiary
except for encumbrances or restrictions under (i) this Agreement and the other
Loan Documents, (ii) the Existing Stone Loan Documents, (iii) the indentures
governing the Subordinated Notes, the Senior Notes or the First Mortgage Notes
(or any refinancing thereof pursuant to Section 7.01(e)), (iv) with respect to
----------------
FinSub, the Receivables Program Documents, (v) documentation governing the
Indebtedness (including Indebtedness incurred after the date hereof) of Stone
Container GmbH and its subsidiaries and (vi) any agreements identified on
Schedule 7.12.
-------------
SECTION 7.13. Capital Expenditures. Incur Consolidated Capital
Expenditures, provided that the Borrowers and the Subsidiaries may incur
--------
Consolidated Capital Expenditures in any fiscal year in an aggregate amount not
in excess of U.S.$275,000,000; provided, however, that such amount in respect of
-------- -------
any fiscal year shall be increased by the sum of (i) an amount equal to Stone's
portion of Excess Cash Flow for the prior fiscal year and (ii) the amount (if
greater than zero) equal to (x) $275,000,000 minus (y) the amount of
-----
Consolidated Capital Expenditures actually made in the immediately preceding
fiscal year. Notwithstanding the foregoing limitations on Consolidated Capital
Expenditures, (i) the Borrowers and the Subsidiaries may make Cluster
Expenditures and (ii) the Borrowers and the Subsidiaries may consummate the
Acquisition.
SECTION 7.14. Consolidated EBITDA. Permit Consolidated EBITDA for any four
fiscal quarter period ending on a date set forth below to be less than the
amount set forth opposite such date:
Date Amount
---- ------
June 30, 2000 U.S.$350,000,000
September 30, 2000 U.S.$375,000,000
December 31, 2000 U.S.$500,000,000
March 31, 2001 and thereafter U.S.$550,000,000
96
SECTION 7.15. Interest Coverage Ratio. Permit the ratio of (i)
Consolidated EBITDA to (ii) Consolidated Interest Expense for any four fiscal
quarter period ending on a date set forth below to be less than the ratio set
forth opposite such date:
Date Ratio
---- -----
June 30, 2000 1.25 to 1.00
September 30, 2000 1.25 to 1.00
December 31, 2000 and thereafter 1.50 to 1.00
SECTION 7.16. Disposition of Collateral and Other Assets. (a) Except for
the sale of Program Receivables as permitted by Section 7.10(c) and the
---------------
Receivables Program Documents and except for any disposition permitted by
paragraph (b) below, sell, lease, assign, transfer or otherwise dispose of any
-------------
asset or assets, in a single transaction or a series of related transactions
having a fair market value in excess of U.S.$10,000,000, unless (i) fair market
value is received for such asset (such fair market value to be determined by the
Board of Directors of the applicable Borrower or any applicable Subsidiary in
the exercise of its reasonable judgment in the case of any asset or assets with
a fair market value in excess of U.S.$50,000,000), (ii) at least 75% of the
consideration received by the Borrowers and the Subsidiaries in connection
therewith shall be in cash, cash equivalents and readily marketable securities
and (iii) any non-cash consideration shall consist of debt obligations of the
purchaser, provided that the foregoing shall not restrict either Borrower or any
--------
Subsidiary from receiving debt obligations of the purchaser in an aggregate
principal amount not in excess of U.S.$30,000,000 in connection with any single
transaction or series of related transactions.
(b) Neither Borrower shall transfer any of its assets to any Subsidiary
and none of the Subsidiaries shall transfer any of its assets to any other
Subsidiary unless (i) in the case of any asset or assets constituting
Collateral, such asset or assets is transferred to a Loan Party and BTCo, as
Collateral Agent, is satisfied that the Liens created under the Security
Documents on such asset or assets shall continue in full force and effect, or
(ii) in the case of any asset or assets not constituting Collateral, such
transfer is permitted as an Investment under Section 7.04.
SECTION 7.17. Fiscal Year. Cause its fiscal year to end on a date other
than December 31.
ARTICLE VIII
Events of Default
In case of the happening of any of the following events (each, an "Event of
--------
Default"):
-------
(a) any representation or warranty made or deemed made in any Loan
Document, or any representation, warranty, statement or information
contained in any report, certificate, financial statement or other
instrument furnished pursuant to any Loan Document, shall prove
97
to have been false or misleading in any material respect when so made,
deemed made or furnished;
(b) default shall be made in the payment of any principal of any Loan
or LC Disbursement when and as the same shall become due and payable,
whether at the due date thereof or at a date fixed for prepayment thereof
or by acceleration thereof or otherwise;
(c) default shall be made in the payment of any interest on any Loan
or any Fee or any other amount (other than an amount referred to in
paragraph (b) above) due under any Loan Document, when and as the same
-------------
shall become due and payable, and such default shall continue unremedied
for a period of three Business Days;
(d) default shall be made in the due observance or performance by
either Borrower of any covenant, condition or agreement contained in
Section 6.01, 6.05(a), 6.08, 6.10(e) or in Article VII;.
------------ ------- ---- ------- -----------
(e) default shall be made in the due observance or performance by any
Loan Party or any of their respective Subsidiaries of any covenant,
condition or agreement contained in any Loan Document (other than those
defaults specified in paragraph (b), (c) or (d) above) and such default
------------- --- ---
shall continue unremedied for a period of 30 days after written notice
thereof from the Administrative Agent or any Lender to the Borrowers;
(f) either Borrower or any Subsidiary shall (i) fail to pay any
principal or interest, regardless of amount, due in respect of any
Indebtedness in a principal amount in excess of U.S.$10,000,000, when and
as the same shall become due and payable (after giving effect to any
applicable grace period), or (ii) fail to observe or perform any other
term, covenant, condition or agreement contained in any agreement or
instrument evidencing or governing any such Indebtedness (after giving
effect to any applicable grace period), if the effect of any failure
referred to in this clause (ii) is to cause, or to permit the holder or
-----------
holders of such Indebtedness or a trustee on its or their behalf to cause,
such Indebtedness to become due prior to its stated maturity;
(g) an involuntary proceeding shall be commenced or an involuntary
petition shall be filed in a court of competent jurisdiction seeking (i)
relief in respect of either Borrower, any Material Subsidiary or any
Canadian Subsidiary, or of a substantial part of the property or assets of
any such Person, under any Insolvency Law, (ii) the appointment of a
receiver, trustee, custodian, sequestrator, conservator or similar official
for any such Person or for a substantial part of the property or assets of
any such Person or (iii) the winding-up or liquidation of any such Person;
and such proceeding or petition shall continue undismissed for 60 days or
an order or decree approving or ordering any of the foregoing shall be
entered;
(h) either Borrower, any Material Subsidiary or any Canadian
Subsidiary shall (i) voluntarily commence any proceeding or file any
petition seeking relief under any Insolvency Law, (ii) consent to the
institution of, or fail to contest in a timely and appropriate
98
manner, any proceeding or the filing of any petition described in paragraph
---------
(g) above, (iii) apply for or consent to the appointment of a receiver,
---
trustee, custodian, sequestrator, conservator or similar official for any
such Person or for a substantial part of the property or assets of any such
Person, (iv) file an answer admitting the material allegations of a
petition filed against it in any such proceeding, (v) make a general
assignment for the benefit of creditors, (vi) become unable, admit in
writing its inability or fail generally to pay its debts as they become due
or (vii) take any action for the purpose of effecting any of the foregoing;
(i) one or more judgments for the payment of money, individually or
in the aggregate, in an amount in excess of U.S.$10,000,000 in any one case
or U.S.$15,000,000 in the aggregate in all such cases (in each case to the
extent not adequately covered by insurance proceeds as to which the
insurance company has acknowledged coverage pursuant to a writing
reasonably satisfactory to the Administrative Agent) shall be rendered
against either Borrower or any of the Subsidiaries or any combination
thereof and the same shall remain undischarged for a period of 30
consecutive days during which execution shall not be effectively stayed,
vacated, discharged or satisfied or any action shall be legally taken by a
judgment creditor to levy upon assets or properties of either Borrower or
any Subsidiary to enforce any such judgment;
(j) a Reportable Event or Reportable Events, or a failure to make a
required installment or other payment (within the meaning of Section
412(n)(l) of the Code), shall have occurred with respect to any Plan or
Plans that reasonably could be expected to result in liability of either
Borrower or any of the Subsidiaries to the PBGC or to a Plan in an
aggregate amount exceeding U.S.$25,000,000 and, within 30 days after the
reporting of any such Reportable Event to the Administrative Agent pursuant
to Section 6.06(b)(i)(A) or after the receipt by the Administrative Agent
---------------------
of the statement required pursuant to Section 6.06(b)(iii), any Agent or
--------------------
the Administrative Agent shall have notified either Borrower in writing
that (i) the Required Lenders have reasonably determined that, on the basis
of such Reportable Event or Reportable Events or the failure to make a
required payment, there are reasonable grounds (A) for the termination of
such Plan or Plans by the PBGC, (B) for the appointment by the appropriate
United States District Court of a trustee to administer such Plan or Plans
or (C) for the imposition of a lien in favor of a Plan and (ii) as a result
thereof an Event of Default exists hereunder; or a trustee shall be
appointed by a United States District Court to administer any such Plan or
Plans; or the PBGC shall institute proceedings to terminate any Plan or
Plans;
(k)(i) either Borrower or any ERISA Affiliate shall have been
notified by the sponsor of a Multiemployer Plan that it has incurred
Withdrawal Liability to such Multiemployer Plan, (ii) such Borrower or such
ERISA Affiliate does not have reasonable grounds for contesting such
Withdrawal Liability or is not in fact contesting such Withdrawal Liability
in a timely and appropriate manner and (iii) the amount of the Withdrawal
Liability specified in such notice, when aggregated with all other amounts
required to be paid to Multiemployer Plans in connection with Withdrawal
Liabilities (determined as of the date or dates of such notification),
exceeds U.S.$25,000,000;
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(l) either Borrower or any ERISA Affiliate shall have been notified
by the sponsor of a Multiemployer Plan that such Multiemployer Plan is in
reorganization or is being terminated, within the meaning of Title IV of
ERISA, if solely as a result of such reorganization or termination the
aggregate contributions of such Borrower and its ERISA Affiliates to all
Multiemployer Plans that are then in reorganization or have been or are
being terminated have been or will be increased over the amounts required
to be contributed to such Multiemployer Plans for their most recently
completed plan years by an amount exceeding U.S.$25,000,000;
(m) there shall have occurred a Change in Control or either Borrower
or any Subsidiary shall make any mandatory prepayment, repurchase or
redemption or make any offer to make any such mandatory prepayment,
repurchase or redemption of any Indebtedness governed by any Specified
Senior Indebtedness on account of any "Change of Control" (as such term is
defined in any such Specified Senior Indenture) or any other event relating
to change of control of either Borrower;
(n) any security interest purported to be created by any Security
Document shall cease to be, or shall be asserted by either Borrower not to
be, a valid, perfected (or, in the case of any security interest in assets
located in the Province of Quebec, published), first priority (or, in the
case of any security interest in assets located in the Province of Quebec,
first-ranking) (except as otherwise expressly provided in this Agreement or
such Security Document) security interest in Collateral with a fair market
value or book value (whichever is greater) in excess, individually or in
the aggregate, of U.S.$50,000,000, except to the extent that any such loss
of perfection or priority results from the failure of BTCo, as Collateral
Agent, to maintain possession of certificates representing securities
pledged under the Pledge Agreements or otherwise take any action within its
control (including the filing of Uniform Commercial Code continuation
statements or similar filings under the applicable laws of any other
jurisdiction);
(o) any Loan Document shall not be for any reason, or shall be
asserted by the Loan Party (except as otherwise expressly provided in this
Agreement or such Loan Document) not to be, in full force and effect and
enforceable in all material respects in accordance with its terms;
(p) the Obligations and the Guarantees thereof pursuant to any
Guarantee Agreement shall cease to constitute, or shall be asserted by any
Loan Party (except as otherwise expressly provided in this Agreement or
such Loan Document) not to constitute, senior indebtedness under the
subordination provisions of any subordinated Indebtedness, or any such
subordination provisions shall be invalidated or otherwise cease to be a
legal, valid and binding obligation of the parties thereto, enforceable in
accordance with its terms; or
(q) an Event of Failure under Section 2.13(b) has occurred;
---------------
100
then, and in every such event (other than an event with respect to either
Borrower described in paragraph (g) or (h) above), and at any time thereafter
------------- ---
during the continuance of such event, the Administrative Agent may and, at the
request of the Required Lenders, shall, by notice to the Borrowers, take any of
or all the following actions, at the same or different times: (i) terminate
forthwith the Commitments, (ii) declare the Loans then outstanding to be
forthwith due and payable in whole or in part, whereupon the principal of the
Loans so declared to be due and payable, together with accrued interest thereon
and any unpaid accrued Fees and all other liabilities of the Loan Parties
accrued hereunder and under any other Loan Document, shall become forthwith due
and payable, without presentment, demand, protest or any other notice of any
kind, all of which are hereby expressly waived by each Borrower, anything
contained herein or in any other Loan Document to the contrary notwithstanding
and (iii) exercise any remedies available under any Loan Document or otherwise;
and in any event with respect to either Borrower described in paragraph (g) or
-------------
(h) above, the Commitments shall automatically terminate and the principal of
---
the Loans then outstanding, together with accrued interest thereon and any
unpaid accrued Fees and all other liabilities of the Loan Parties accrued
hereunder and under any other Loan Document, shall automatically become due and
payable, without presentment, demand, protest or any other notice of any kind,
all of which are hereby expressly waived by each Borrower, anything contained
herein or in any other Loan Document to the contrary notwithstanding.
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ARTICLE IX
The Agents, the Administrative Agents and the Facing Agent
In order to expedite the transactions contemplated by this Agreement, (a)
each of The Chase Manhattan Bank and Bankers Trust Company is hereby appointed
to act as Agent on behalf of the Facing Agent and the Lenders, (b) Bankers Trust
Company is hereby appointed to act as Administrative Agent and Collateral Agent
for the Facing Agent and the Lenders and (c) Deutsche Bank Canada is hereby
appointed to act as Canadian Administrative Agent for the Facing Agent and the
Revolving Lenders (the Agents, the Administrative Agent, the Collateral Agent
and the Canadian Administrative Agent for purposes of this Article IX are
----------
collectively referred to as the "Agents"). Each of the Lenders and the Facing
------
Agent hereby irrevocably authorizes each Agent to take such actions on its
behalf and to exercise such powers as are specifically delegated to such Agent
by the terms and provisions hereof and of the other Loan Documents, together
with such actions and powers as are reasonably incidental thereto. Each of the
Agents is expressly authorized by the Lenders and the Facing Agent, without
limiting any implied authority, to receive all Loan Documents on the Closing
Date. The Administrative Agent is expressly authorized by the Lenders and the
Facing Agent, without limiting any implied authority, (a) to receive on behalf
of the Lenders and the Facing Agent all payments of principal of and interest on
the Loans, all payments in respect of LC Disbursements and all other amounts due
to the Lenders and the Facing Agent hereunder, and promptly to distribute to
each Lender and the Facing Agent its proper share of each payment so received,
(b) to give notice on behalf of each of the Lenders to the Borrowers of any
Event of Default specified in this Agreement of which the Administrative Agent
has actual knowledge acquired in connection with its agency hereunder and (c) to
distribute to each Lender and the Facing Agent copies of all notices, financial
statements and other materials delivered by the Loan Parties pursuant to this
Agreement as received by the Administrative Agent (including notices of an
occurrence of any Event of Default). BTCo, as Collateral Agent, is expressly
authorized to execute any and all documents (including releases) with respect to
the Collateral and the Program Receivables and the rights of the Lenders with
respect thereto and to act as Collateral Agent on behalf of the Lenders, in each
case as contemplated by and in accordance with the terms and provisions of this
Agreement and the Security Documents, including the right to be the sole
bondholder of the Bonds and to hold them as pledgee for the benefit of the
Tranche H Lenders, the Revolving Lenders, the Agents, and the Facing Agent.
For greater certainty and without limiting the powers of the Collateral
Agent herein and for purposes of constituting security on any of the Collateral,
present or future, of any of Canco or any of its Subsidiaries located or deemed
located in the Province of Quebec, as security for the due payment of the Bonds,
Canco and its Subsidiaries, the Tranche H Lenders, the Revolving Lenders, the
Agents and the Facing Agent hereby acknowledge and agree that the Trustee is,
for the purposes of holding any security granted by any of Canco or any of its
Subsidiaries pursuant to the laws of the Province of Quebec, the holder of an
irrevocable power of attorney for all present and future Bondholders. By the
execution of any Assignment and Acceptance, any future Tranche H Lender or
Revolving Lender shall be deemed to ratify the power of attorney granted to the
Trustee hereunder. Furthermore, the Collateral Agent hereby agrees to act in
the capacity of the collateral
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agent and depositary of the Bonds for the benefit of all present and future
Tranche H Lenders, Revolving Lenders, Agents and Facing Agent. Any future
Tranche H Lenders or Revolving Lenders shall be deemed to reconfirm the above
mandate of the Collateral Agent. Canco and its Subsidiaries, the Agent, the
Facing Agent, the Tranche H Lenders and the Revolving Lenders agree that (a)
notwithstanding the provisions of Section 32 of the Act Respecting Special
Powers of Legal Persons (Quebec), the Trustee may acquire any title or
indebtedness secured by the Hypothecs, and that (b) the Bonds constitute "titles
of indebtedness" within the meaning of such term in Article 2692 of the Civil
Code of Quebec.
None of the Agents or the Facing Agent or any of their respective
directors, officers, employees or agents shall be liable as such for any action
taken or omitted by any of them except for its, his or her own gross negligence
or wilful misconduct, or be responsible for any statement, warranty or
representation herein or the contents of any document delivered in connection
herewith, or be required to ascertain or to make any inquiry concerning the
performance or observance by the Loan Parties of any of the terms, conditions,
covenants or agreements contained in any Loan Document. None of the Agents
shall be responsible to the Lenders or the Facing Agent for the due execution,
genuineness, validity, enforceability or effectiveness of this Agreement, any
other Loan Document or any other instruments or agreements. Each Agent shall in
all cases be fully protected in acting, or refraining from acting, in accordance
with written instructions signed by the Required Lenders (and the Facing Agent,
with respect to Letters of Credit) and, except as otherwise specifically
provided herein, such instructions and any action or inaction pursuant thereto
shall be binding on all the Lenders and the Facing Agent. Each Agent shall, in
the absence of knowledge to the contrary, be entitled to rely on any instrument
or document believed by them in good faith to be genuine and correct and to have
been signed or sent by the proper Person or Persons. None of the Agents or the
Facing Agent or any of their respective directors, officers, employees or agents
shall have any responsibility to the Loan Parties on account of the failure of
or delay in performance or breach by any Lender (or, in the case of the Agents,
by the Facing Agent) of any of its obligations hereunder or to any Lender (or,
in the case of the Agents, the Facing Agent) on account of the failure of or
delay in performance or breach by any other Lender (or, in the case of the
Agents, the Facing Agent) or the Loan Parties or any Guarantor of any of their
respective obligations hereunder or under any other Loan Document or in
connection herewith or therewith. Each Agent and the Facing Agent may execute
any and all duties hereunder by or through agents or employees and shall be
entitled to rely upon the advice of legal counsel selected by any of them with
respect to all matters arising hereunder and shall not be liable for any action
taken or suffered in good faith by any of them in accordance with the advice of
such counsel.
The Lenders and the Facing Agent hereby acknowledge that none of the Agents
or the Facing Agent shall be under any duty to take any discretionary action
permitted to be taken by it pursuant to the provisions of this Agreement unless
it shall be requested in writing to do so by the Required Lenders.
Subject to the appointment and acceptance of a successor Agent as provided
below, any Agent may resign at any time by notifying the other Agents, the
Lenders, the Facing Agent and the Borrowers. Upon any such resignation, the
Required Lenders (or, in the case of the resignation of
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the Canadian Administrative Agent, a majority in interest of the Revolving
Lenders) shall have the right to appoint a Lender as the successor. If no
successor shall have been so appointed by the Required Lenders or the Revolving
Lenders, as the case may be, and shall have accepted such appointment within 30
days after the retiring Agent gives notice of its resignation, then the retiring
Agent may, on behalf of the Lenders and the Facing Agent, appoint a successor
Agent, which shall be a bank with an office in New York, New York (or, in the
case of the Canadian Administrative Agent, Toronto, Ontario), having a combined
capital and surplus of at least U.S.$500,000,000 or an Affiliate of any such
bank. Upon the acceptance of any appointment as Agent hereunder by a successor
bank, such successor shall succeed to and become vested with all the rights,
powers, privileges and duties of the retiring Agent and the retiring Agent shall
be discharged from its duties and obligations hereunder. After any Agent's
resignation hereunder, the provisions of this Article IX and Section 11.05 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.
With respect to the Loans made by it hereunder, each Agent and the Facing
Agent, in its individual capacity and not as Agent or Facing Agent, as the case
may be, shall have the same rights and powers as any other Lender and may
exercise the same as though it were not an Agent or the Facing Agent, as the
case may be, and each Agent and its Affiliates and the Facing Agent and its
Affiliates may accept deposits from, lend money to and generally engage in any
kind of business with the Loan Parties or any of their respective Subsidiaries
or other Affiliates as if it were not an Agent or the Facing Agent, as the case
may be.
Each Lender agrees (a) to reimburse each Agent and the Facing Agent, on
demand, in the amount of such Lender's pro rata share (based on its Commitments
hereunder (provided that (x) in the case of the Tranche G Loans or Tranche H
--------
Loans or (y) in the event that such Commitments shall have expired or been
terminated, such pro rata share shall be based on the respective principal
amounts of the outstanding Loans)) of any expenses incurred for the benefit of
the Lenders by such Agent or the Facing Agent, including fees, disbursements and
other charges of counsel and compensation of agents paid for services rendered
on behalf of the Lenders, that shall not have been reimbursed by the Loan
Parties and (b) to indemnify and hold harmless each Agent and the Facing Agent
and any of their respective directors, officers, employees or agents, on demand,
in the amount of such pro rata share, from and against any and all liabilities,
taxes, obligations, losses, damages, penalties, actions, judgments, suits,
costs, expenses or disbursements of any kind or nature whatsoever that may be
imposed on, incurred by or asserted against it in its capacity as an Agent or
the Facing Agent, as the case may be, or any of them in any way relating to or
arising out of this Agreement or any other Loan Document or any action taken or
omitted by it or any of them under this Agreement or any other Loan Document, to
the extent the same shall not have been reimbursed by the Loan Parties;
provided, however, that (i) no Lender shall be liable to any Agent or the Facing
-------- -------
Agent for any portion of such liabilities, obligations, losses, damages,
penalties, actions, judgments, suits, costs, expenses or disbursements resulting
from the gross negligence or wilful misconduct of such Agent or the Facing
Agent, as the case may be, or any of their respective directors, officers,
employees or agents and (ii) each Lender that does not have a Revolving Credit
Commitment (other than through the expiration or termination thereof) shall be
under no obligation to reimburse or indemnify the Facing Agent under clauses (a)
-----------
and (b) above.
---
104
Each Lender acknowledges that it has, independently and without reliance
upon any Agent, any other Lender or the Facing Agent and based on such documents
and information as it has deemed appropriate, made its own credit analysis and
decision to enter into this Agreement. Each Lender also acknowledges that it
will, independently and without reliance upon any Agent, any other Lender or the
Facing Agent based on such documents and information as it shall from time to
time deem appropriate, continue to make its own decisions in taking or not
taking action under or based upon this Agreement or any other Loan Document, any
related agreement or any document furnished hereunder or thereunder.
ARTICLE X
Collection Allocation Mechanism
SECTION 10.01. Implementation of CAM. (a) On the CAM Exchange Date, the
Lenders shall automatically and without further act (and without regard to the
provisions of Section 11.04) be deemed to have exchanged interests in the Credit
-------------
Facilities such that in lieu of the interest of each Lender in each Credit
Facility in which it shall participate as of such date (including such Lender's
interest in the Designated Obligations of each Loan Party in respect of each
such Credit Facility), such Lender shall hold an interest in every one of the
Credit Facilities (including the Designated Obligations of each Loan Party in
respect of each such Credit Facility and each LC Reserve Account established
pursuant to Section 10.02 below), whether or not such Lender shall previously
-------------
have participated therein, equal to such Lender's CAM Percentage thereof. Each
Lender and each Borrower hereby consents and agrees to the CAM Exchange, and
each Lender agrees that the CAM Exchange shall be binding upon its successors
and assigns and any person that acquires a participation in its interests in any
Credit Facility. Each Borrower agrees from time to time to execute and deliver
to the Agents all instruments and documents as either Agent shall reasonably
request to evidence and confirm the respective interests of the Lenders after
giving effect to the CAM Exchange.
(b) As a result of the CAM Exchange, upon and after the CAM Exchange Date,
each payment received by the Administrative Agent or the Collateral Agent
pursuant to any Loan Document in respect of the Designated Obligations, and each
distribution made by the Collateral Agent pursuant to any Security Document in
respect of the Designated Obligations, shall be distributed to the Lenders pro
rata in accordance with their respective CAM Percentages. Any direct payment
received by a Lender upon or after the CAM Exchange Date, including by way of
setoff, in respect of a Designated Obligation shall be paid over to the
Administrative Agent for distribution to the Lenders in accordance herewith.
SECTION 10.02. Letters of Credit. (a) In the event that on the CAM
Exchange Date any Letter of Credit shall be outstanding and undrawn in whole or
in part, or any amount drawn under a Letter of Credit shall not have been
reimbursed either by Canco or with the proceeds of a Revolving Credit Borrowing,
each Revolving Lender shall promptly pay over to the Administrative Agent, in
immediately available funds in the same currency as such Letter of Credit, in
the case of any undrawn amount, and in U.S. Dollars, in the case of any
unreimbursed amount, an amount equal to such
105
Revolving Lender's Applicable Percentage of such undrawn face amount or (to the
extent it has not already done so) such unreimbursed drawing, as the case may
be, together with interest thereon from the CAM Exchange Date to the date on
which such amount shall be paid to the Administrative Agent at the rate that
would be applicable at the time to an ABR Revolving Loan or Canadian Prime Rate
Loan, as the case may be, in a principal amount equal to such amount. The
Administrative Agent shall establish a separate account or accounts for each
Lender (each, an "LC Reserve Account") for the amounts received with respect to
------------------
each such Letter of Credit pursuant to the preceding sentence. The
Administrative Agent shall deposit in each Lender's LC Reserve Account such
Lender's CAM Percentage of the amounts received from the Revolving Lenders as
provided above. The Administrative Agent shall have sole dominion and control
over each LC Reserve Account, and the amounts deposited in each LC Reserve
Account shall be held in such L/C Reserve Account until withdrawn as provided in
paragraph (b), (c), (d) or (e) below. The Administrative Agent shall maintain
--- --- --- ---
records enabling it to determine the amounts paid over to it and deposited in
the LC Reserve Accounts in respect of each Letter of Credit and the amounts on
deposit in respect of each Letter of Credit attributable to each Lender's CAM
Percentage. The amounts held in each Lender's LC Reserve Account shall be held
as a reserve against the outstanding L/C Exposure, shall be the property of such
Lender, shall not constitute Loans to or give rise to any claim of or against
any Loan Party and shall not give rise to any obligation on the part of either
Borrower to pay interest to such Lender, it being agreed that the reimbursement
obligations in respect of Letters of Credit shall arise only at such times as
drawings are made thereunder, as provided in Article III.
-----------
(b) In the event that after the CAM Exchange Date any drawing shall be
made in respect of a Letter of Credit, the Administrative Agent shall, at the
request of the Facing Agent, withdraw from the LC Reserve Account of each Lender
any amounts, up to the amount of such Lender's CAM Percentage of such drawing,
deposited in respect of such Letter of Credit and remaining on deposit and
deliver such amounts to the Facing Agent in satisfaction of the reimbursement
obligations of the Revolving Lenders under subsection (c) of Article III (but
--- -----------
not of Canco under subsection (d) of Article III). In the event any Revolving
--- ------------
Lender shall default on its obligation to pay over any amount to the
Administrative Agent in respect of any Letter of Credit as provided in this
Section 10.02, the Facing Agent shall, in the event of a drawing thereunder,
-------------
have a claim against such Revolving Lender to the same extent as if such Lender
had defaulted on its obligations under subsection (c) of Article III, but shall
--- -----------
have no claim against any other Lender in respect of such defaulted amount,
notwithstanding the exchange of interests in Canco's reimbursement obligations
pursuant Section 10.01. Each other Lender shall have a claim against such
-------------
defaulting Revolving Lender for any damages sustained by it as a result of such
default, including, in the event such Letter of Credit shall expire undrawn, its
CAM Percentage of the defaulted amount.
(c) In the event that after the CAM Exchange Date any Letter of Credit
shall expire undrawn, the Administrative Agent shall withdraw from the LC
Reserve Account of each Lender the amount remaining on deposit therein in
respect of such Letter of Credit and distribute such amount to such Lender.
(d) With the prior written approval of the Administrative Agent and the
Facing Agent (not to be unreasonably withheld), any Lender may withdraw the
amount held in its LC Reserve Account
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in respect of the undrawn amount of any Letter of Credit. Any Lender making such
a withdrawal shall be unconditionally obligated, in the event there shall
subsequently be a drawing under such Letter of Credit, to pay over to the
Administrative Agent, for the account of the Facing Agent, on demand, its CAM
Percentage of such drawing.
(e) Pending the withdrawal by any Lender of any amounts from its LC
Reserve Account as contemplated by the above paragraphs, the Administrative
Agent will, at the direction of such Lender and subject to such rules as the
Administrative Agent may prescribe for the avoidance of inconvenience, invest
such amounts in Permitted Investments. Each Lender which has not withdrawn its
CAM Percentage of amounts in its LC Reserve Account as provided in paragraph (d)
above shall have the right, at intervals reasonably specified by the
Administrative Agent, to withdraw the earnings on investments so made by the
Administrative Agent with amounts in its LC Reserve Account and to retain such
earnings for its own account.
SECTION 10.03. Conversion. In the event the CAM Exchange Date shall occur,
Obligations owed by the Loan Parties denominated in any currency other than U.S.
Dollars (other than, for the avoidance of doubt, obligations in respect of
undrawn Letters of Credit denominated in Canadian Dollars) shall, automatically
and with no further act required, be converted to obligations of the same Loan
Parties denominated in U.S. Dollars. Such conversion shall be effected based
upon the Exchange Rates in effect with respect to the relevant currencies on the
CAM Exchange Date. On and after any such conversion, all amounts accruing and
owed to any Lender in respect of its Obligations shall accrue and be payable in
U.S. Dollars at the rates otherwise applicable hereunder (and, in the case of
interest on Loans, at the default rate applicable to ABR Loans hereunder).
Notwithstanding the foregoing provisions of this Section 10.03, any Lender may,
-------------
by notice to the Borrowers and the Administrative Agent prior to the CAM
Exchange Date, elect not to have the provisions of this Section 10.03 apply with
-------------
respect to all Obligations owed to such Lender immediately following the CAM
Exchange Date, and, if such notice is given, all Obligations owed to such Lender
immediately following the CAM Exchange Date shall remain designated in their
original currencies.
ARTICLE XI
Miscellaneous
SECTION 11.01. Notices. Except as otherwise expressly permitted herein,
notices and other communications provided for herein shall be in writing and
shall be delivered by hand or overnight courier service, mailed or sent by
telecopy, as follows:
(a) if to Stone or Canco, to it at ▇▇▇▇ ▇▇▇▇▇▇▇▇ ▇▇▇▇▇▇, ▇▇. ▇▇▇▇▇,
▇▇ ▇▇▇▇▇, Attention of Treasurer (Telecopy No. (▇▇▇) ▇▇▇-▇▇▇▇);
(b) if to Chase, as Lender or Agent, to it at ▇▇ ▇▇▇▇▇ ▇▇▇▇▇▇▇ ▇▇▇▇▇▇
(▇▇▇▇ ▇▇▇▇▇), ▇▇▇▇▇▇▇, ▇▇ ▇▇▇▇▇-▇▇▇▇, Attention of ▇▇▇▇▇▇▇▇ ▇▇▇▇▇▇▇▇
(Telecopy No. (▇▇▇) ▇▇▇-▇▇▇▇);
107
(c) if to BTCo, as Lender, Agent or Administrative Agent, to it at
▇▇▇ ▇▇▇▇▇ ▇▇▇▇▇▇ ▇▇▇▇▇ (▇▇▇▇ ▇▇▇▇▇), ▇▇▇▇▇▇▇, ▇▇ ▇▇▇▇▇, Attention of
▇▇▇▇▇▇▇ ▇▇▇▇▇▇▇ and ▇▇▇▇▇▇ ▇▇▇▇▇ (Telecopy No. (▇▇▇) ▇▇▇-▇▇▇▇);
(d) if to Deutsche Bank Canada, as Lender, Canadian Administrative
Agent or Facing Agent, to it at ▇▇▇ ▇▇▇ ▇▇▇▇▇▇, ▇▇▇▇▇ ▇▇▇▇, ▇▇▇▇▇▇▇,
▇▇▇▇▇▇▇, ▇▇▇▇▇▇ ▇▇▇ ▇▇▇, Attention of ▇▇▇▇▇ ▇▇▇▇▇▇ (Telecopy No. (416) 682-
8444); and
(e) if to any other Lender, at its address (or telecopy number) set
forth on Schedule 2.01 or in the Assignment and Acceptance pursuant to
-------------
which such Lender shall have become a party hereto.
All notices and other communications given to any party hereto in accordance
with the provisions of this Agreement shall be deemed to have been given on the
date of receipt if delivered by hand or overnight courier service or sent by
telecopy, or on the date five Business Days after dispatch by certified or
registered mail if mailed, in each case delivered, sent or mailed (properly
addressed) to such party as provided in this Section 11.01 or in accordance with
-------------
the latest unrevoked direction from such party given in accordance with this
Section 11.01. The Administrative Agent shall deliver to the Borrower and
--------------
Chase, as Agent, a copy of each Administrative Questionnaire received by it.
SECTION 11.02. Survival of Agreement. All covenants, agreements,
representations and warranties made by the Borrowers herein and by the Loan
Parties in the certificates or other instruments prepared or delivered in
connection with or pursuant to this Agreement or any other Loan Document shall
be considered to have been relied upon by the Lenders and the Facing Agent and
shall survive the making by the Lenders of the Loans and the issuance of Letters
of Credit by the Facing Agent, regardless of any investigation made by the
Lenders or the Facing Agent or on their behalf, and shall continue in full force
and effect as long as the principal of or any accrued interest on any Loan or
any Fee or any other amount payable under this Agreement or any other Loan
Document is outstanding and unpaid or any Letter of Credit is outstanding and so
long as the Commitments have not been terminated.
SECTION 11.03. Binding Effect. This Agreement shall become effective when
it shall have been executed by the Borrowers and the Agents and when the
Administrative Agent shall have received copies hereof which, when taken
together, bear the signatures of each of the other parties hereto, and
thereafter shall be binding upon and inure to the benefit of the Borrowers, the
Agents, the Administrative Agent, the Facing Agent and the Lenders and their
respective successors and assigns, except that neither Borrower shall have the
right to assign its rights or duties hereunder or any interest herein without
the prior consent of all the Lenders, and any attempted assignment by any such
Person shall be void (it being understood that a merger of either Borrower into
or with any other Person in which the other Person is the surviving entity shall
not be considered an assignment of such Borrower's duties hereunder and would
instead be subject to the restrictions of Section 7.05).
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108
SECTION 11.04. Successors and Assigns. (a) Subject to Section 11.03,
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whenever in this Agreement any of the parties hereto is referred to, such
reference shall be deemed to include the successors and assigns of such party,
and all covenants, promises and agreements by or on behalf of the Borrowers, the
Agents, the Administrative Agent, the Facing Agent or the Lenders that are
contained in this Agreement shall bind and inure to the benefit of their
respective successors and assigns.
(b) Each Lender may assign to one or more assignees (treating "Related
-------
Funds," as defined below, as a single assignee), including an Affiliate thereof,
-----
all or a portion of its interests, rights and/or obligations under this
Agreement (including all or a portion of its Commitments, the outstanding
Letters of Credit and the Loans at the time owing to it); provided, however,
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that (i) except in the case of an assignment to any other Lender, an Affiliate
of any other Lender or, in the case of any Lender that is a fund that invests in
bank loans, any other fund that invests in bank loans and is managed or advised
by the same investment advisor or by an Affiliate of such investment advisor,
each of the Administrative Agent and Stone (and, in the case of an assignment of
a Lender's Revolving Credit Commitment, the Facing Agent) must give its prior
written consent to such assignment (which consent shall not be unreasonably
withheld), provided that (x) Stone shall be deemed to have consented to any
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assignment of Tranche G Loans or Tranche H loans made within 15 Business Days
after the Closing Date as part of the primary syndication of such Loans in
accordance with, and to accomplish in whole or in part, the allocations thereof
to the financial institutions and other persons previously agreed upon in
writing by Stone and the Agents and (y) the consent of Stone shall not be
required if a Default or an Event of Default under paragraph (b), (c), (g) or
------------- --- ---
(h) of Article VIII has occurred and is continuing on the date of the Assignment
--- ------------
and Acceptance, (ii) the Administrative Agent will give notice to the other
Agent promptly, and in any case within one week, of any assignment (including an
assignment to a Lender or an Affiliate of a Lender), provided that the failure
--------
of the Administrative Agent to give notice to the other Agent of any such
assignment shall not affect the validity of such assignment, (iii) except in the
case of an assignment to any other Lender, an Affiliate of any other Lender or,
in the case of any Lender that is a fund that invests in bank loans, any other
fund that invests in bank loans and is managed or advised by the same investment
advisor of any such other Lender or an Affiliate of such investment advisor (a
"Related Fund"), the amount of the Commitments and Loans of the assigning Lender
subject to each such assignment (determined as of the date the Assignment and
Acceptance with respect to such assignment is delivered to the Administrative
Agent) shall not be less than U.S.$1,000,000 (or an amount equal to the
remaining balance of any of such Lender's Commitments and Loans), (iv) the
parties to each such assignment shall execute and deliver to the Administrative
Agent an Assignment and Acceptance, and a processing and recordation fee of
U.S.$3,500 and (v) the assignee, if it shall not be a Lender, shall deliver to
the Administrative Agent an Administrative Questionnaire, provided further that,
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notwithstanding the foregoing, the sale or assignment by any assignor (which
acquired an interest in the Commitments and Loans of a Lender in an amount less
than U.S.$1,000,000 pursuant to an exception to clause (iii) of the immediately
------------
preceding proviso) to any Person who is not a Lender, an Affiliate of any other
Lender, or a Related Fund of any Lender shall be subjected to the minimum
assignment requirement of U.S.$1,000,000 if all the Affiliates of such Lender
have interests in Commitments and Loans in the aggregate of U.S.$1,000,000 or
more. Upon acceptance and recording pursuant to Section 11.04(e), from and
----------------
after the effective date
109
specified in each Assignment and Acceptance, (i) the assignee thereunder shall
be a party hereto and, to the extent of the interest assigned by such Assignment
and Acceptance, shall have the rights and obligations of a Lender under this
Agreement and (ii) the assigning Lender thereunder shall, to the extent of the
interest assigned by such Assignment and Acceptance, be released from its
obligations under this Agreement (and, in the case of an Assignment and
Acceptance covering all or the remaining portion of an assigning Lender's rights
and obligations under this Agreement, such Lender shall cease to be a party
hereto, but shall continue to be entitled to the benefits of Sections 2.14,
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2.16, 2.20 and 11.05, as well as to any Fees accrued for its account and not yet
---- ---- -----
paid).
(c) By executing and delivering an Assignment and Acceptance, the
assigning Lender thereunder and the assignee thereunder shall be deemed to
confirm to and agree with each other and the other parties hereto as follows:
(i) such assigning Lender warrants that it is the legal and beneficial owner of
the interest being assigned thereby free and clear of any adverse claim and that
its Commitments, and the outstanding balances of its Loans, in each case without
giving effect to assignments thereof that have not become effective, are as set
forth in such Assignment and Acceptance; (ii) except as set forth in clause (i)
----------
above, such assigning Lender makes no representation or warranty and assumes no
responsibility with respect to any statements, warranties or representations
made in or in connection with this Agreement, or the execution, legality,
validity, enforceability, genuineness, sufficiency or value of this Agreement,
any other Loan Document or any other instrument or document furnished pursuant
hereto, or the financial condition of the Loan Parties or the performance or
observance by the Loan Parties of any of their obligations under this Agreement
or under any other Loan Document or any other instrument or document furnished
pursuant hereto; (iii) such assignee represents and warrants that it is legally
authorized to enter into such Assignment and Acceptance; (iv) such assignee
confirms that it has received a copy of this Agreement, together with copies of
any amendments or consents entered into prior to the date of such Assignment and
Acceptance and copies of the most recent financial statements delivered pursuant
to Section 6.04 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; (v) such assignee will independently and without
reliance upon any Agent, the Administrative Agent, the Facing Agent, such
assigning Lender 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 Agreement; (vi) such
assignee appoints and authorizes each of the Agents, the Administrative Agent
and the Facing Agent to take such action as agent on its behalf and to exercise
such powers under this Agreement as are delegated to such Agent, the
Administrative Agent and the Facing Agent by the terms hereof, together with
such powers as are reasonably incidental thereto; and (vii) such assignee agrees
that it will perform in accordance with their terms all the obligations that by
the terms of this Agreement are required to be performed by it as a Lender.
(d) The Administrative Agent, acting for this purpose as agent of the
Borrowers, shall maintain at one of its offices in The City of New York a copy
of each Assignment and Acceptance delivered to it and a register for the
recordation of the names and addresses of the Lenders, and the Commitments of,
and principal amount of the Loans owing to, each Lender pursuant to the terms
hereof from time to time (the "Register"). The entries in the Register shall be
--------
conclusive in the absence of manifest error and the Borrowers, the Agents, the
Administrative Agent, the Facing Agent
110
and the Lenders shall treat each Person whose name is recorded in the Register
pursuant to the terms hereof as a Lender hereunder for all purposes of this
Agreement, notwithstanding notice to the contrary. The Register shall be
available for inspection by the Borrowers, any Agent, the Facing Agent and any
Lender, at any reasonable time and from time to time upon reasonable prior
notice.
(e) Upon its receipt of a duly completed Assignment and Acceptance
executed by an assigning Lender and an assignee, together with an Administrative
Questionnaire completed in respect of the assignee (unless the assignee shall
already be a Lender hereunder), the processing and recordation fee referred to
in paragraph (b) above and the written consent (to the extent required under
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paragraph (b) above), of the Administrative Agent, the Borrowers and the Facing
-------------
Agent to such assignment, the Administrative Agent shall (i) accept such
Assignment and Acceptance and (ii) record the information contained therein in
the Register. No assignment shall be effective unless it has been recorded in
the Register as provided in this paragraph (e).
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(f) Each Lender may, without the consent of either Borrower, either Agent
or the Facing Agent, sell participations to one or more banks or other entities
in all or a portion of its rights and obligations under this Agreement
(including all or a portion of its Commitment and the Loans owing to it);
provided, however, that (i) such Lender's obligations under this Agreement shall
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remain unchanged, (ii) such Lender shall remain solely responsible to the other
parties hereto for the performance of such obligations, (iii) the participating
banks or other entities shall be entitled to the benefit of the cost protection
provisions contained in Sections 2.14, 2.16, 2.20 and 11.05 to the same extent
------------- ---- ---- -----
as if they were Lenders, provided that, except as expressly provided in Section
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2.20(a), the Borrowers shall not be required to reimburse the participating
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lenders or other entities pursuant to Section 2.14, 2.16, 2.20 or 11.05 in an
------------ ---- ---- -----
amount in excess of the amount that would have been payable thereunder to such
Lender had such Lender not sold such participation, and (iv) the Borrowers, the
Agents, the Administrative Agent, the Facing Agent and the other Lenders shall
continue to deal solely and directly with such Lender in connection with such
Lender's rights and obligations under this Agreement, and such Lender shall
retain the sole right to enforce the obligations of the Loan Parties under the
Loan Documents and to approve any amendment, modification or waiver of any
provision of this Agreement (provided that the participating bank or other
--------
entity may be provided with the right to approve amendments, modifications or
waivers affecting it with respect to (w) any decrease in the Fees payable
hereunder with respect to Loans in which the participating bank or other entity
has purchased a participation, (x) any change in the amount of principal of, or
decrease in the rate at which interest is payable on, the Loans in which the
participating bank or other entity has purchased a participation, (y) any
extension of the final scheduled maturity of any Loan in which the participating
bank or other entity has purchased a participation or (z) any release of a
Borrower or any Guarantor (except as expressly contemplated by any Loan
Document) or all or any substantial part of the Collateral (except as expressly
contemplated by any Loan Document).
(g) Notwithstanding the limitations set forth in paragraph (b) above, (i)
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any Lender may at any time assign all or any portion of its rights under this
Agreement to a Federal Reserve Bank without the prior written consent of either
Borrower, either Agent or the Facing Agent and (ii) any Lender which is a fund
may pledge all or any portion of its rights under this Agreement (A) to its
trustee in support of its obligations to its trustee or (B) in connection with
any securitization of any
111
portfolio loans of such Lender, in each case without the prior written consent
of either Borrower, either Agent or the Facing Agent, provided that no such
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assignment pursuant to clause (i) or (ii) shall release a Lender from any of its
---------- ----
obligations hereunder or substitute any such Bank, trustee or assignee for such
Lender as a party hereto.
(h) Except as provided in Article III the Facing Agent may not assign or
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delegate any of its respective rights and duties hereunder without the prior
written consent of Canco, each Agent and the Administrative Agent.
SECTION 11.05. Expenses; Indemnity. (a) The Borrowers agree, jointly
and severally, to pay all out-of-pocket expenses incurred by the Agents, the
Administrative Agent and the Facing Agent in connection with the preparation of
this Agreement and the other Loan Documents (including all costs relating to
due diligence) or in connection with any amendments, modifications or waivers of
the provisions hereof or thereof (whether or not the transactions hereby
contemplated shall be consummated) or incurred by the Agents, the Administrative
Agent, the Facing Agent or any Lender in connection with the enforcement or
protection of their rights in connection with this Agreement and the other Loan
Documents or in connection with the Loans made or the Letters of Credit issued
hereunder, including the reasonable fees, disbursements and other charges of
Cravath, Swaine & Moore, Blake, ▇▇▇▇▇▇▇ & ▇▇▇▇▇▇▇ LLP and ▇▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇▇▇▇
▇▇▇▇▇ ▇▇▇▇▇▇, counsel for Chase and BTCo, and, in connection with any such
enforcement or protection, the reasonable fees, disbursements and other charges
of any other counsel (including allocated costs of internal counsel) for the
Agents, the Administrative Agent, the Canadian Administrative Agent, the
Collateral Agent, the Facing Agent or any Lender. The Borrowers further agree
to indemnify the Agents, the Administrative Agent, the Facing Agent and the
Lenders from, and hold them harmless against, any documentary taxes, assessments
or similar charges made by any Governmental Authority by reason of the execution
and delivery of this Agreement or any of the other Loan Documents.
(b) The Borrowers agree, jointly and severally, to indemnify each Agent,
the Arrangers, the Syndication Agent, the Facing Agent and each Lender and each
of their respective directors, officers, employees and agents (each such person
being called an "Indemnitee") against, and to hold each Indemnitee harmless
----------
from, any and all losses, claims, damages, liabilities and related expenses,
including reasonable counsel fees, disbursements and other charges, incurred by
or asserted against any Indemnitee arising out of, in any way connected with, or
as a result of (i) the execution or delivery of this Agreement, any other Loan
Document or any agreement or instrument contemplated hereby or thereby, the
performance by the parties hereto or thereto of their respective obligations
hereunder or thereunder or the consummation of the Transactions and the other
transactions contemplated hereby or thereby, (ii) the use of the Letters of
Credit or the proceeds of the Loans, (iii) any claim, litigation, investigation
or proceeding relating to any of the foregoing, whether or not any Indemnitee is
a party thereto or (iv) any actual or alleged presence or release of Hazardous
Materials on or from any property currently or formerly owned or operated by
either Borrower or any of the Subsidiaries or any of their respective
predecessors or any liability under any Environmental Law related in any way to
either Borrower or any of the Subsidiaries, provided that such indemnity shall
--------
not, as to any Indemnitee, be available to the extent that such losses, claims,
damages, liabilities or related expenses have resulted from the gross negligence
or wilful misconduct of such Indemnitee.
112
(c) The provisions of this Section 11.05 shall remain operative and in
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full force and effect regardless of the expiration of the term of this
Agreement, the consummation of the transactions contemplated hereby, the
repayment of any of the Loans, the invalidity or unenforceability of any term or
provision of this Agreement or any other Loan Document, or any investigation
made by or on behalf of the Agents, the Administrative Agent, the Facing Agent
or any Lender. All amounts due under this Section 11.05 shall be payable on
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written demand therefor.
SECTION 11.06. Right of Setoff. If an Event of Default shall have
occurred and be continuing, each Lender is hereby authorized, in addition to any
other right or remedy that any Lender may have by operation of law or otherwise,
at any time and from time to time, without notice to either Borrower (any such
notice being expressly waived by each Borrower), to exercise its banker's lien
or right of setoff and apply any and all deposits (general or special, time or
demand, provisional or final) at any time held and other Indebtedness at any
time owing by such Lender to or for the credit or the account of any Loan Party
against any of and all the obligations of the Borrowers now or hereafter
existing under this Agreement and other Loan Documents held by such Lender,
irrespective of whether such Lender shall have made any demand under this
Agreement or such other Loan Document and although such obligations may be
unmatured.
SECTION 11.07. Applicable Law. THIS AGREEMENT AND THE OTHER LOAN
DOCUMENTS (OTHER THAN THE MORTGAGES, THE CANADIAN SECURITY AGREEMENTS, THE
HYPOTHECS AND THE CANADIAN PLEDGE AGREEMENTS) SHALL BE GOVERNED BY, AND
CONSTRUED IN ACCORDANCE WITH, THE LAWS OF THE STATE OF NEW YORK, INCLUDING
SECTIONS 5-1401 AND 5-1402 OF TITLE 14 OF THE NEW YORK GENERAL OBLIGATIONS LAW
BUT EXCLUDING ALL OTHER CHOICE OF LAW AND CONFLICTS OF LAWS RULES THEREOF.
SECTION 11.08. Waivers; Amendment. (a) No failure or delay on the part
of any Agent, the Administrative Agent, the Facing Agent or any Lender in
exercising any power or right hereunder shall operate as a waiver thereof, nor
shall any single or partial exercise of any such right or power, or any
abandonment or discontinuation of steps to enforce such a right or power,
preclude any other or further exercise thereof or the exercise of any other
right or power. The rights and remedies of the Agents, the Administrative
Agent, the Facing Agent and the Lenders hereunder and under the other Loan
Documents are cumulative and are not exclusive of any rights or remedies that
they would otherwise have. No waiver of any provision of this Agreement or any
other Loan Document or consent to any departure by the Loan Parties therefrom
shall in any event be effective unless the same shall be permitted by paragraph
---------
(b) below, and then such waiver or consent shall be effective only in the
---
specific instance and for the purpose for which given. No notice or demand on
the Loan Parties in any case shall entitle the Loan Parties to any other or
further notice or demand in similar or other circumstances.
(b) Neither this Agreement or any of the other Loan Documents nor any
provision hereof or thereof may be waived, amended or modified except (i) in the
case of this Agreement, pursuant to
113
an agreement or agreements in writing entered into by each Borrower and the
Required Lenders and (ii) in the case of any other Loan Document, pursuant to an
agreement or agreements entered into by the parties to such Loan Document, in
each case with the consent of the Required Lenders; provided, however, that no
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such agreement shall (i) decrease the principal amount of, or extend the final
scheduled maturity of or date for the payment of any interest on any Loan, or
waive or excuse any such payment or any part thereof, or decrease the rate of
interest on any Loan, without the prior written consent of each Lender affected
thereby, (ii) increase the amount of or extend the termination date of the
Commitment or decrease or extend the date for payment of any Fee owing to any
Lender without the prior written consent of such Lender, (iii) amend or modify
the pro rata sharing provisions of Section 2.17 or the provisions of Section
------------ -------
11.03 concerning the assignment of either Borrower's obligations hereunder, the
-----
provisions of this Section 11.08, the percentage in the definition of the term
-------------
"Required Lenders" or the percentage in the definition of the term "Majority
Vote" or release either Borrower or any Guarantor (except as expressly
contemplated by any Loan Document) or all or substantially all of the Collateral
(except as expressly contemplated by any Loan Document), without the prior
written consent of each Lender, (iv) with respect to the Term Loans, modify the
pro rata sharing requirements of Section 2.13(f), change the application of any
---------------
prepayments or scheduled repayments of the Term Loans, reduce the amount of or
waive any prepayments or scheduled repayments of the Term Loans or extend the
time of payment for prepayments or scheduled repayments of Term Loans without a
Majority Vote, by Class, of the Lenders holding Loans adversely affected thereby
(other than any such agreement that merely adds an additional tranche of Term
Loans entitled to the benefits of such pro rata provisions) or (v) reduce the
amount of or waive any prepayments of the Revolving Loans or extend the time of
payment for prepayments of Revolving Loans without a Majority Vote of the
Revolving Lenders; provided, further, however, that no such agreement shall
-------- ------- -------
amend, modify or otherwise affect the rights or duties of any Agent, the
Administrative Agent or the Facing Agent hereunder or under any other Loan
Document without the prior written consent of such Agent, the Administrative
Agent or the Facing Agent, as the case may be.
(c) Without the consent of Existing Stone Lenders holding more than 50%
of the sum of (i) outstanding loans under the Existing Stone Credit Agreement,
(ii) unused commitments in respect thereof and (iii) letter of credit exposure
under the Existing Stone Credit Agreement, the Borrowers and the Lenders shall
not enter into, consent to or approve of any amendment, modification or waiver
of any provision of this Agreement or any other Loan Document if, as a result of
such amendment, waiver or modification, the Existing Stone Lenders would no
longer be entitled to the pro rata sharing requirements of Section 2.23, and any
------------
such attempted amendment, modification or waiver shall be null and void. Each
Existing Stone Lender shall be entitled to enforce the provisions of this
Section 11.08(c).
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114
SECTION 11.09. Release of Collateral. Each Lender hereby directs BTCo,
as Collateral Agent, to release, or to cause the Trustee to release, any Lien
held by it under the Security Documents under the following circumstances:
(a) upon final and indefeasible payment in full in cash of the Loans
and Obligations (other than unasserted contingent and indemnification
obligations which expressly survive termination) and termination of all
Commitments and termination hereof, BTCo, as Collateral Agent, is
authorized to release, or to cause the Trustee to release, all of the Liens
created under the Loan Documents;
(b) upon any sale or other disposition of Collateral permitted
hereunder, BTCo, as Collateral Agent, is authorized to release, or to cause
the Trustee to release, such Liens that relate solely to the Collateral
sold or otherwise disposed; and
(c) upon consent by the Required Lenders, BTCo, as Collateral Agent,
is authorized to release, or to cause the Trustee to release, such Liens on
any part of the Collateral which release does not require the consent of
all of the Lenders as set forth in Section 11.08;
-------------
provided, however, that (i) the Collateral Agent shall not be required to
-------- -------
execute any such document on terms which, in its opinion, would expose it to
liability or create any obligation or entail any consequence other than the
release of such Liens without recourse or warranty, and (ii) such release shall
not in any manner discharge, affect or impair the Obligations or any Liens upon
(or obligations of either Borrower or any of the Subsidiaries in respect of) all
interests retained by the Borrowers or any of the Subsidiaries.
SECTION 11.10. Interest Rate Limitation. Notwithstanding anything herein
to the contrary, if at any time the applicable interest rate, together with all
fees and charges that are treated as interest under applicable law
(collectively, the "Charges"), as provided for herein or in any other document
-------
executed in connection herewith, or otherwise contracted for, charged, received,
taken or reserved by any Lender, shall exceed the maximum lawful rate (the
"Maximum Rate") that may be contracted for, charged, taken, received or reserved
-------------
by such Lender in accordance with applicable law, the rate of interest payable
to such Lender hereunder, together with all Charges payable to such Lender,
shall be limited to the Maximum Rate.
SECTION 11.11. Entire Agreement. This Agreement, the other Loan
Documents and any separate letter agreements with respect to fees payable to any
Agent, the Administrative Agent or the Facing Agent constitute the entire
contract between the parties relative to the subject matter hereof. Any
previous agreement among the parties with respect to the subject matter hereof
is superseded by this Agreement and the other Loan Documents. Nothing in this
Agreement or in the other Loan Documents, expressed or implied, is intended to
confer upon any party other than the parties hereto and thereto any rights,
remedies, obligations or liabilities under or by reason of this Agreement or the
other Loan Documents.
115
SECTION 11.12. Waiver of Jury Trial. Each party hereto hereby waives, to
the fullest extent permitted by applicable law, any right it may have to a trial
by jury in respect of any litigation directly or indirectly arising out of,
under or in connection with this Agreement or any of the other Loan Documents.
Each party hereto (a) certifies that no representative, agent or attorney of any
other party has represented, expressly or otherwise, that such other party would
not, in the event of litigation, seek to enforce the foregoing waiver and (b)
acknowledges that it and the other parties hereto have been induced to enter
into this Agreement and the other Loan Documents, as applicable, by, among other
things, the mutual waivers and certifications in this Section 11.12.
-------------
SECTION 11.13. Severability. In the event any one or more of the
provisions contained in this Agreement or in any other Loan Document should be
held invalid, illegal or unenforceable in any respect, the validity, legality
and enforceability of the remaining provisions contained herein and therein
shall not in any way be affected or impaired thereby. The parties shall
endeavor in good-faith negotiations to replace the invalid, illegal or
unenforceable provisions with valid provisions, the economic effect of which
comes as close as possible to that of the invalid, illegal or unenforceable
provisions.
SECTION 11.14. Headings. Article and Section headings and the Table of
Contents used herein are for convenience of reference only, are not part of this
Agreement and are not to affect the construction of, or to be taken into
consideration in interpreting, this Agreement.
SECTION 11.15. Confidentiality. (a) Each Lender agrees not to disclose
to any Person the Information (as defined below) in accordance with such
Lender's customary procedures for non-disclosure of confidential information of
third parties of this nature and in accordance with safe and sound lending
practices without the prior written consent of the Borrowers, which consent
shall not be unreasonably withheld, except that any Lender shall be permitted to
disclose Information (i) to its and its Affiliates' officers, directors,
employees, agents and representatives (including its auditors and counsel) or to
any direct or indirect contractual counterparty in swap agreements or such
contractual counterparty's professional advisor (so long as such contractual
counterparty or professional advisor to such contractual counterparty agrees in
writing to be bound by the provisions of this Section 11.15); (ii) to the extent
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(A) required by applicable laws and regulations or by any subpoena or similar
legal process or (B) requested or required by any regulatory authority or The
National Association of Insurance Commissioners or any similar organization, or
any nationally recognized rating agency that requires access to information
about a Lender's investment portfolio; (iii) to the extent such Information (A)
becomes publicly available other than as a result of a breach of this Agreement,
(B) becomes available to such Lender on a non-confidential basis from a source
other than a Loan Party or its Affiliates or (C) was available to such Lender on
a non-confidential basis prior to its disclosure to such Lender by a Loan Party
or its Affiliates; (iv) to any actual or prospective assignee of, or prospective
purchaser of a participation in, the rights of such Lender hereunder, in each
case subject to paragraph (c) below; or (v) in connection with any suit, action
-------------
or proceeding relating to the enforcement of rights hereunder or under any other
Loan Document or in connection with the transactions contemplated hereby. As
used in this Section 11.15, as to any Lender, the term "Information" shall mean
------------- -----------
the Confidential Information Memorandum and any other
116
materials, documents and information that either Borrower or any of its
Affiliates may have furnished or may hereafter furnish to any Lender in
connection with this Agreement.
(b) Each Lender agrees that it will use the Information only for purposes
related to the transactions contemplated hereby and by the other Loan Documents,
provided that (i) if the conditions referred to in any of subclauses (A) through
-------- --------------
(C) of clause (iii) of paragraph (a) above are met, such Lender may otherwise
--- ------------ -------------
use the Information and (ii) if such Lender or any of its Affiliates is
otherwise a creditor of a Loan Party, such Lender or any such Affiliate may use
the Information in connection with its other credits to such Loan Party.
(c) Each Lender agrees that it will not disclose any of the Information to
any actual or prospective assignee of such Lender or participant in any rights
of such Lender under this Agreement unless such actual or prospective assignee
or participant first executes and delivers to such Lender or the Borrowers a
confidentiality letter containing substantially the undertakings set forth in
this Section 11.15.
-------------
SECTION 11.16. Jurisdiction; Consent to Service of Process. (a) Each
Borrower hereby irrevocably and unconditionally submits, for itself and its
property, to the nonexclusive jurisdiction of any New York State court or
Federal court of the United States of America sitting in New York City, and any
appellate court from any thereof, in any action or proceeding arising out of or
relating to this Agreement or the other Loan Documents, or for recognition or
enforcement of any judgment, and each of the parties hereto hereby irrevocably
and unconditionally agrees that all claims in respect of any such action or
proceeding may be heard and determined in such New York State or, to the extent
permitted by law, in such Federal court. Each of the parties hereto agrees that
a final judgment in any such action or proceeding shall be conclusive and may be
enforced in other jurisdictions by suit on the judgment or in any other manner
provided by law. Nothing in this Agreement shall affect any right that any
Lender may otherwise have to bring any action or proceeding relating to this
Agreement or the other Loan Documents against any Loan Party or its properties
in the courts of any jurisdiction.
(b) Each Borrower hereby irrevocably and unconditionally waives, to the
fullest extent it may legally and effectively do so, any objection that it may
now or hereafter have to the laying of venue of any suit, action or proceeding
arising out of or relating to this agreement or the other Loan Documents in any
New York State or Federal court. Each of the parties hereto hereby irrevocably
waives, to the fullest extent permitted by law, the defense of an inconvenient
forum to the maintenance of such action or proceeding in any such court.
(c) Each party to this Agreement irrevocably consents to service of
process in the manner provided for notices in Section 11.01. Nothing in this
-------------
Agreement will affect the right of any party to this Agreement to serve process
in any other manner permitted by law.
SECTION 11.17. Judgment Currency. (a) Except as otherwise provided in
Section 10.03, the Borrowers' obligations hereunder and the Borrowers' and the
--------------
other Loan Parties' obligations under the other Loan Documents to make payments
in U.S. Dollars or in Canadian Dollars (the
117
"Obligation Currency") shall not be discharged or satisfied by any tender or
-------------------
recovery pursuant to any judgment expressed in or converted into any currency
other than the Obligation Currency, except to the extent that such tender or
recovery results in the effective receipt by the applicable Administrative
Agent, the Collateral Agent or a Lender of the full amount of the Obligation
Currency expressed to be payable to the applicable Administrative Agent, the
Collateral Agent or such Lender under this Agreement or the other Loan
Documents. If, for the purpose of obtaining or enforcing judgment against either
Borrower or any other Loan Party in any court or in any jurisdiction, it becomes
necessary to convert into or from any currency other than the Obligation
Currency (such other currency being hereinafter referred to as the "Judgment
--------
Currency") an amount due in the Obligation Currency, the conversion shall be
--------
made, at the Exchange Rate, in the case of Canadian Dollars or U.S. Dollars,
and, in the case of other currencies, the rate of exchange (as quoted by the
Administrative Agent or if the Administrative Agent does not quote a rate of
exchange on such currency, by a known dealer in such currency designated by the
Administrative Agent) determined, in each case, as of the date immediately
preceding the day on which the judgment is given (such Business Day being
hereinafter referred to as the "Judgment Currency Conversion Date").
---------------------------------
(b) If there is a change in the rate of exchange prevailing between the
Judgment Currency Conversion Date and the date of actual payment of the amount
due, the Borrowers covenant and agree to pay, or cause to be paid, such
additional amounts, if any (but in any event not a lesser amount), as may be
necessary to ensure that the amount paid in the Judgment Currency, when
converted at the rate of exchange prevailing on the date of payment, will
produce the amount of the Obligation Currency which could have been purchased
with the amount of Judgment Currency stipulated in the judgment or judicial
award at the rate of exchange prevailing on the Judgment Currency Conversion
Date.
(c) For purposes of determining the amount of any payment in the
Obligation Currency under this Section, the rate of exchange used shall take
into account any premium and costs payable in connection with the purchase of
the Obligation Currency.
SECTION 11.18. Certain Relationships. Nothing contained in this
Agreement and no action taken by any Agent, the Administrative Agent or any
Lender pursuant hereto shall be deemed to constitute the Agents, the
Administrative Agent or the Lenders a partnership, an association, a joint
venture or other entity. None of the Agents, the Administrative Agent or the
Lenders has any fiduciary relationship with or any fiduciary duty to either
Borrower arising out of or in connection with this Agreement or any of the other
Loan Documents, and the relationship between the Agents, the Administrative
Agent and the Lenders, on the one hand, and the Borrowers, on the other hand, in
connection herewith or therewith is solely that of debtor and creditor.
IN WITNESS WHEREOF, the parties hereto have caused this Agreement to
be duly executed by their respective authorized officers or attorneys as of the
day and year first above written.
STONE CONTAINER CORPORATION,
by
_________________________________________
Name:
Title:
ST LAURENT PAPERBOARD INC.,
by
_________________________________________
Name:
Title:
BANKERS TRUST COMPANY, individually, and as
Administrative Agent and Collateral Agent,
by
_________________________________________
Name:
Title:
DEUTSCHE BANK CANADA, as Canadian
Administrative Agent and Facing Agent,
by
_________________________________________
Name:
Title:
THE CHASE MANHATTAN BANK,
individually, and as an Agent,
by
_________________________________________
Name:
Title:
[OTHER LENDERS],
by
_________________________________________
Name:
Title: