Exhibit 10.18
PRIORITY SECURED CREDIT AGREEMENT
Dated as of March 21, 2002
among
LOEWS CINEPLEX ENTERTAINMENT CORPORATION,
and
CINEPLEX ODEON CORPORATION,
as Borrowers,
THE LENDERS LISTED HEREIN,
as Lenders,
BANKERS TRUST COMPANY,
as ▇▇ ▇▇▇▇▇▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇,
▇▇▇▇▇▇▇▇ ▇▇▇▇ ▇▇, ▇▇▇▇▇▇ BRANCH,
as CN Administrative Agent,
GENERAL ELECTRIC CAPITAL CORPORATION,
as Syndication Agent,
and
DEUTSCHE BANC ALEX. ▇▇▇▇▇ INC.,
as Sole and Exclusive Arranger
TABLE OF CONTENTS
PAGE
SECTION 1. DEFINITIONS........................................................2
1.1 Certain Defined Terms..............................................2
1.2 Accounting Terms; Utilization of GAAP for Purposes
of Calculations Under Agreement...................................40
1.3 Other Definitional Provisions.....................................40
SECTION 2. AMOUNTS AND TERMS OF COMMITMENTS AND LOANS........................40
2.1 Commitments; Making of Loans; the Register; Notes.................40
2.2 Interest on the Loans.............................................46
2.3 Fees..............................................................50
2.4 Repayments, Prepayments and Reductions in Revolving
Loan Commitments; General Provisions Regarding
Payments; Application of Proceeds of Collateral
and Payments under Guaranties.....................................51
2.5 Use of Proceeds...................................................61
2.6 Special Provisions Governing Eurodollar Rate Loans................62
2.7 Increased Costs; Taxes; Capital Adequacy..........................64
2.8 Obligation of Lenders and Issuing Lenders to Mitigate.............69
SECTION 3. LETTERS OF CREDIT.................................................70
3.1 Issuance of Letters of Credit and Lenders'
Purchase of Participations Therein................................70
3.2 Letter of Credit Fees.............................................74
3.3 Drawings and Reimbursement of Amounts Paid
Under Letters of Credit...........................................74
3.4 Obligations Absolute..............................................77
3.5 Indemnification; Nature of Issuing Lenders' Duties................78
3.6 Increased Costs and Taxes Relating to Letters of Credit...........79
3.7 Existing Letters of Credit........................................80
SECTION 4. CONDITIONS TO LOANS AND LETTERS OF CREDIT.........................81
4.1 Conditions to Initial Loans.......................................81
4.2 Conditions to All Loans...........................................89
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4.3 Conditions to Issuance of Letters of Credit.......................90
SECTION 5. BORROWERS' REPRESENTATIONS AND WARRANTIES.........................90
5.1 Organization, Powers, Qualification, Good Standing,
Business and Subsidiaries.........................................90
5.2 Authorization of Borrowing, etc...................................91
5.3 Financial Condition...............................................92
5.4 No Material Adverse Effect; No Restricted Junior Payments.........93
5.5 Title to Properties; Liens........................................93
5.6 Litigation; Adverse Facts.........................................93
5.7 Payment of Taxes..................................................93
5.8 Performance of Agreements; Materially Adverse
Agreements; Material Contracts....................................94
5.9 Governmental Regulation...........................................94
5.10 Securities Activities.............................................94
5.11 Employee Benefit Plans............................................94
5.12 Certain Fees......................................................95
5.13 Environmental Protection..........................................95
5.14 Employee Matters..................................................97
5.15 Solvency..........................................................97
5.16 Disclosure........................................................97
5.17 Matters Relating to Bankruptcy Proceedings........................98
5.18 Insurance.........................................................98
5.19 Intellectual Property.............................................98
5.20 Cash Management System............................................98
5.21 Merged Subsidiaries...............................................99
SECTION 6. BORROWERS' AFFIRMATIVE COVENANTS..................................99
6.1 Financial Statements and Other Reports............................99
6.2 Corporate and Limited Liability Company Existence, Etc...........104
6.3 Payment of Taxes and Claims; Tax Consolidation...................104
6.4 Maintenance of Properties; Insurance.............................105
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6.5 Inspection; Lender Meeting.......................................105
6.6 Compliance with Laws, etc........................................106
6.7 Environmental Disclosure and Inspection..........................106
6.8 Company's Remedial Action Regarding Hazardous Materials..........108
6.9 Execution of Subsidiary Guaranty and Collateral
Documents by Future Subsidiaries.................................108
6.10 Matters Relating to Additional Real Property Collateral..........109
6.11 Cash Management System...........................................110
6.12 Unsecured Settlement Distribution................................111
6.13 Ratings..........................................................111
6.14 Employee Benefit Plans...........................................111
6.15 Dissolved or Disposed Subsidiaries...............................111
SECTION 7. BORROWERS' NEGATIVE COVENANTS....................................111
7.1 Indebtedness.....................................................112
7.2 Liens and Related Matters........................................113
7.3 Investments; Joint Ventures......................................116
7.4 Contingent Obligations...........................................118
7.5 Restricted Junior Payments; Certain Other Payments...............119
7.6 Financial Performance Covenants..................................119
7.7 Restriction on Fundamental Changes;
Asset Sales and Acquisitions.....................................121
7.8 Fiscal Year......................................................122
7.9 Sale or Discount of Receivables..................................122
7.10 Transactions with Shareholders and Affiliates....................122
7.11 Disposal of Subsidiary Stock.....................................123
7.12 Conduct of Business..............................................123
7.13 Capital Expenditures.............................................124
7.14 Amendments of Documents Relating to Subordinated
Indebtedness and Organizational Documents........................125
7.15 CCAA Plan of Arrangement.........................................126
SECTION 8. EVENTS OF DEFAULT................................................126
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(CONTINUED)
PAGE
8.1 Failure to Make Payments When Due................................126
8.2 Default in Other Agreements......................................126
8.3 Breach of Certain Covenants......................................126
8.4 Breach of Warranty...............................................126
8.5 Other Defaults Under Priority Secured Loan Documents.............127
8.6 Involuntary Bankruptcy; Appointment of Receiver, Etc.............127
8.7 Voluntary Bankruptcy; Appointment of Receiver, etc...............127
8.8 Judgments and Attachments........................................128
8.9 Dissolution......................................................128
8.10 Employee Benefit Plans...........................................128
8.11 Change in Control................................................128
8.12 Invalidity of Guaranties.........................................128
8.13 Failure of Security..............................................128
SECTION 9. ADMINISTRATIVE AGENTS............................................130
9.1 Appointment......................................................130
9.2 Powers and Duties; General Immunity..............................130
9.3 Representations and Warranties; No Responsibility
For Appraisal of Creditworthiness................................132
9.4 Right to Indemnity...............................................132
9.5 Successor Administrative Agent...................................132
9.6 Intercreditor Agreement; Collateral Documents
and Subsidiary Guaranties........................................133
SECTION 10. MISCELLANEOUS....................................................133
10.1 Assignments and Participations in Loans
and Letters of Credit............................................133
10.2 Expenses.........................................................136
10.3 Indemnity........................................................137
10.4 Set-Off; Security Interest in Deposit Accounts...................138
10.5 Ratable Sharing..................................................139
10.6 Amendments and Waivers...........................................140
10.7 Independence of Covenants........................................141
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10.8 Notices..........................................................142
10.9 Survival of Representations, Warranties and Agreements...........142
10.10 Failure or Indulgence Not Waiver; Remedies Cumulative............142
10.11 Marshalling; Payments Set Aside..................................142
10.12 Severability.....................................................143
10.13 Obligations Several; Independent Nature of Lenders' Rights.......143
10.14 Judgment Currency................................................143
10.15 Headings.........................................................144
10.16 Applicable Law...................................................144
10.17 Successors and Assigns...........................................144
10.18 Consent to Jurisdiction and Service of Process...................144
10.19 Waiver of Jury Trial.............................................145
10.20 Confidentiality..................................................145
10.21 Counterparts; Effectiveness......................................146
Signature pages.....................................................S-1
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SCHEDULES
1.1C CERTAIN ASSETS TO BE SOLD
1.1E REORGANIZATION COSTS
1.1L EXISTING LETTERS OF CREDIT
1.1W CERTAIN OPERATING LEASES
1.1WH WHOLLY-OWNED TOTAL DEBT
2.1 LENDERS' COMMITMENTS AND PRO RATA SHARES
4.1A(i) CERTAIN GOOD STANDING CERTIFICATES
4.1B(i) CAPITAL AND OWNERSHIP STRUCTURE
4.1B(ii) MANAGEMENT AND EMPLOYMENT CONTRACTS
4.1G CLOSING DATE MORTGAGED PROPERTIES
4.1U FINANCIAL INFORMATION METHODOLOGY
5.1A LOAN PARTIES NOT IN GOOD STANDING
5.1D SUBSIDIARIES OF COMPANY
5.4 CERTAIN RESTRICTED JUNIOR PAYMENTS
5.6 LITIGATION
5.11(c) CERTAIN EMPLOYEE BENEFIT PLANS
5.12 CERTAIN FEES
5.13 ENVIRONMENTAL MATTERS
5.14 CERTAIN EMPLOYEE MATTERS
5.18 INSURANCE
5.21 MERGED SUBSIDIARIES
6.11 CASH MANAGEMENT SYSTEM
6.15 DISSOLVED SUBSIDIARIES
7.1(vi) CERTAIN EXISTING INDEBTEDNESS
7.2A(v) CERTAIN EXISTING LIENS
7.3A(v) CERTAIN EXISTING INVESTMENTS
7.3B PROHIBITED INVESTMENTS
7.4(v) CERTAIN EXISTING CONTINGENT OBLIGATIONS
7.9 CERTAIN DISCOUNTED RECEIVABLES
7.10(v) AFFILIATE TRANSACTIONS
7.13B SCHEDULED 2003 NEW BUILD CAPITAL EXPENDITURES
EXHIBITS
I FORM OF NOTICE OF BORROWING
II FORM OF NOTICE OF CONVERSION/CONTINUATION
III FORM OF REQUEST FOR ISSUANCE
IV FORM OF US TRANCHE TERM NOTE
V FORM OF CN TRANCHE TERM NOTE
VI FORM OF US TRANCHE REVOLVING NOTE
VII FORM OF CN TRANCHE REVOLVING NOTE
VIII FORM OF COMPLIANCE CERTIFICATE
IX FORM OF INTERCOMPANY NOTE
X-A FORM OF OPINION OF FRIED, FRANK, HARRIS, ▇▇▇▇▇▇▇ & ▇▇▇▇▇▇▇▇
X-B FORM OF OPINION OF DAVIES, WARD, ▇▇▇▇▇▇▇ & VINEBERG
XI FORM OF OPINION OF O'MELVENY & ▇▇▇▇▇
XII-A FORM OF ASSIGNMENT AGREEMENT
XII-B FORM OF ASSIGNMENT AGREEMENT (RELATED FUND)
XIII FORM OF CERTIFICATE RE NON-BANK STATUS
XIV FORM OF COLLATERAL ACCOUNT AGREEMENT
XV FORM OF SECURITY AGREEMENT
XVI FORM OF GUARANTY
XVII FORM OF COMPANY GUARANTY
XVIII FORM OF INTERCREDITOR AGREEMENT
XIX-A FORM OF CANADIAN MORTGAGE
XIX-B FORM OF UNITED STATES MORTGAGE
EXECUTION
PRIORITY SECURED CREDIT AGREEMENT
This
PRIORITY SECURED CREDIT AGREEMENT is dated as of March 21, 2002
and entered into by and among
LOEWS CINEPLEX ENTERTAINMENT CORPORATION, a
Delaware corporation ("COMPANY"), CINEPLEX ODEON CORPORATION, an Ontario
corporation ("CANADIAN BORROWER"; Company and Canadian Borrower are each
referred to herein as a "BORROWER" and, collectively, as "BORROWERS"), THE
FINANCIAL INSTITUTIONS LISTED ON SCHEDULE 2.1 HERETO (each individually referred
to herein as a "LENDER" and, collectively, as "LENDERS"), BANKERS TRUST COMPANY
("BTCO"), as administrative agent for US Lenders (in such capacity, "US
ADMINISTRATIVE AGENT"), DEUTSCHE BANK AG, CANADA BRANCH, as administrative agent
for CN Lenders ("CN ADMINISTRATIVE AGENT"), GENERAL ELECTRIC CAPITAL
CORPORATION, as syndication agent ("SYNDICATION AGENT") and DEUTSCHE BANC ALEX.
▇▇▇▇▇ INC., as sole and exclusive arranger ("ARRANGER").
R E C I T A L S
WHEREAS, on February 15, 2001, Company and Subsidiary Debtors (such
terms and other capitalized terms used in these recitals being used as defined
in subsection 1.1) filed voluntary petitions for relief under the Bankruptcy
Code with the Bankruptcy Court (such proceedings are hereinafter referred to as
the "CHAPTER 11 CASES"), and Company and the Subsidiary Debtors have continued
to operate their businesses and manage their properties as debtors-in-possession
pursuant to Sections 1107 and 1108 of the Bankruptcy Code.
WHEREAS, on February 15, 2001, Canadian Borrower and certain of its
subsidiaries applied to the Superior Court of Justice of Ontario for an order
declaring the Canadian Borrower and other applicants to be companies to which
the CCAA applies.
WHEREAS, Company, the Subsidiary Debtors, the DIP Lenders and BTCo, as
administrative agent, are parties to the DIP Credit Agreement.
WHEREAS, Company, as lender, Canadian Borrower, as borrower, and
Deutsche Bank AG, Canada Branch, as agent, are parties to the Canadian CCAA
Credit Agreement.
WHEREAS, Company and the Subsidiary Debtors have proposed, their
creditors have approved and the Bankruptcy Court has confirmed the Plan of
Reorganization;
WHEREAS, Canadian Borrower and other applicants have proposed, their
creditors have approved and the Canadian Court has sanctioned the CCAA Plan of
Arrangement;
WHEREAS, in connection with the Plan of Reorganization and the CCAA
Plan of Arrangement, Company and Canadian Borrower have requested that the
Lenders provide priority secured credit facilities (with a separate sublimit
available for the issuance of letters of credit) on a post-bankruptcy or
post-arrangement basis, as applicable, on the terms and conditions set forth
herein; and
WHEREAS, pursuant to the Plan of Reorganization and the CCAA Plan of
Arrangement, loans made under the Post-Petition Incremental US Sublimit and the
Post-Petition Incremental Canadian Sublimit under the DIP Credit Agreement and
Existing Letters of Credit shall be refinanced in full under this Agreement;
NOW, THEREFORE, in consideration of the premises and the agreements,
provisions and covenants herein contained, Company, Canadian Borrower, Lenders
and Administrative Agents agree as follows:
SECTION 1. DEFINITIONS
1.1 CERTAIN DEFINED TERMS.
The following terms used in this Agreement shall have the following
meanings:
"ACQUISITION EXPENDITURE AMOUNT" has the meaning assigned that term in
subsection 7.3A(viii).
"ADDITIONAL MORTGAGE" has the meaning assigned to that term in
subsection 6.10B.
"ADDITIONAL MORTGAGED PROPERTY" has the meaning assigned to that term
in subsection 6.10B.
"ADJUSTED EURODOLLAR RATE" means, for any Interest Rate Determination
Date with respect to a Eurodollar Rate Loan, the rate per annum obtained by
dividing (i) the offered quotation (rounded upward to the nearest 1/16 of one
percent) to first class banks in the interbank Eurodollar market by BTCo for US
Dollar deposits of amounts in same day funds comparable to the principal amount
of the Eurodollar Rate Loan of BTCo for which the Adjusted Eurodollar Rate is
then being determined with maturities comparable to the Interest Period for
which such Adjusted Eurodollar Rate will apply as of approximately 10:00 a.m.
(
New York time) on such Interest Rate Determination Date by (ii) a percentage
equal to 100% minus the stated maximum rate of all reserve requirements
(including, without limitation, any marginal, emergency, supplemental, special
or other reserves) applicable on such Interest Rate Determination Date to any
member bank of the Federal Reserve System in respect of "Eurocurrency
liabilities" as defined in Regulation D (or any successor category of
liabilities under Regulation D).
"ADMINISTRATIVE AGENTS" means the US Administrative Agent and the CN
Administrative Agent and "ADMINISTRATIVE AGENT" means either one of them.
"AFFECTED LENDER" has the meaning assigned to that term in subsection
2.6C.
"AFFECTED LOANS" has the meaning assigned to that term in subsection
2.6C.
"AFFILIATE," as applied to any Person, means any other Person directly
or indirectly controlling, controlled by, or under common control with, that
Person. For the purposes of this definition, "control" (including, with
correlative meanings, the terms "controlling," "controlled by" and "under common
control with"), as applied to any Person, means the possession, directly
2
or indirectly, of the power to direct or cause the direction of the management
and policies of that Person, whether through the ownership of voting securities
or by contract or otherwise.
"AFFILIATED FUND" means, with respect to any Lender, a fund that
invests in commercial loans and is administered or managed by the same
investment advisor or manager as such Lender, an Affiliate of such Lender or by
an Affiliate of the same investment advisor or manager as such Lender.
"AGGREGATE AMOUNTS DUE FROM BORROWERS" has the meaning set forth in
subsection 10.5.
"AGGREGATE CAPITAL EXPENDITURE LIMIT" has the meaning set forth in
subsection 7.13D.
"AGREEMENT" means this
Priority Secured Credit Agreement dated as of
March 21, 2002, as it may be amended, restated, supplemented or otherwise
modified from time to time.
"ALTERNATIVE PRIVATE EQUITY PREPAYMENT AMOUNT" has the meaning set
forth in subsection 2.4B(iii)(d)(2)(B).
"APPLICABLE LEVERAGE RATIO" means the Leverage Ratio calculated as of
the date for which an Officer's Certificate or Compliance Certificate has been
delivered pursuant to subsection 4.1F or subsection 6.1(iv) and such Applicable
Leverage Ratio shall remain in effect until the next date of delivery of a
Compliance Certificate (and related financial information required at such time
pursuant to subsection 6.1) pursuant to subsection 6.1(iv); provided that
without limiting any Event of Default or Potential Event of Default that may
result therefrom, if Company does not deliver any Compliance Certificate
required pursuant to subsection 6.1(iv) by the date specified therefor, then the
Applicable Leverage Ratio shall not be decreased until and following the actual
date of delivery thereof, and if the Applicable Leverage Ratio is required to be
increased as a result of the information in such Compliance Certificate, then
such increase shall be retroactive to the date such Compliance Certificate was
originally required to be delivered hereunder.
"ASSET SALE" means the sale by Company or any of its Subsidiaries to
any Person other than Company or any of its Wholly-Owned Subsidiaries of (i) any
of the stock of any of Company's Subsidiaries, (ii) substantially all of the
assets of any division or line of business of Company or any of its
Subsidiaries, or (iii) any other assets (whether tangible or intangible) of
Company or any of its Subsidiaries (other than (a) inventory sold in the
ordinary course of business, (b) obsolete equipment and (c) any such other
assets to the extent that the aggregate value of such assets sold in any single
transaction or related series of transactions is equal to US$500,000 or less).
"ASSET SWAP" means the exchange by Company or any of its Wholly-Owned
North American Subsidiaries with any Person other than Company or any of its
Subsidiaries, of any theater assets of Company or any of its Wholly-Owned North
American Subsidiaries for like assets of such Person.
"ASSIGNMENT AGREEMENT" means, an Assignment Agreement in substantially
the form of Exhibit XII-A annexed hereto, or in the case of a simultaneous
assignment to Eligible Assignees
3
that are Affiliated Funds an Assignment Agreement in substantially the form of
Exhibit XII_B annexed hereto.
"BA RATE" means with respect to a BA Rate Loan, (a) for a CN Lender
which is a Schedule I Lender, (i) the average BA Rate for the appropriate term
as quoted on Reuters Screen CDOR Page determined at or about 10:00 a.m. (Toronto
time) on that day or, (ii) if the BA Rate for a particular term is not quoted on
Reuters Screen CDOR Page, the arithmetic average of the actual discount rates
for bankers' acceptances for such term accepted by the Schedule I Reference
Banks but not to exceed the actual rate of discount applicable to bankers'
acceptances accepted by the CN Administrative Agent (as a CN Lender) from the
same bankers' acceptance issue and (b) for a CN Lender which is a Schedule II
Lender, the arithmetic average of the actual discount rates for bankers'
acceptances for such term accepted by the Schedule I Reference Banks but not to
exceed the actual rate of discount applicable to bankers' acceptances accepted
by the CN Administrative Agent (as a CN Lender) from the same bankers'
acceptance issue plus 10 basis points per annum; and (c) for a CN Lender which
is a Schedule III Lender, the arithmetic average of the actual discount rates
for bankers' acceptances for such term accepted by the Schedule I Reference
Banks but not to exceed the actual rate of discount applicable to bankers'
acceptances accepted by the CN Administrative Agent (as a CN Lender) from the
same bankers' acceptance issue plus 10 basis points per annum.
"BA RATE LOANS" means Loans bearing interest at rates determined by
reference to the BA Rate as provided in subsection 2.2A.
"BANKRUPTCY CODE" means Title 11 of the United States Code entitled
"Bankruptcy," as now and hereafter in effect, or any successor statute.
"BANKRUPTCY COURT" means the United States Bankruptcy Court for the
Southern District of
New York.
"BASE RATE" means, at any time, the higher of (x) the US Prime Rate or
(y) the rate which is 1/2 of 1% in excess of the Federal Funds Effective Rate.
"BASE RATE LOANS" means Loans bearing interest at rates determined by
reference to the Base Rate as provided in subsection 2.2A.
"BTCO" means Bankers Trust Company.
"BUSINESS DAY" means (i) with respect to all notices, determinations,
fundings and payments in connection with CN Prime Rate Loans and BA Rate Loans,
any day excluding Saturday, Sunday and any day which is a legal holiday under
the laws of the Province of Ontario or is a day on which banking institutions
located in such province are authorized or required by law or other governmental
action to close, (ii) with respect to all notices, determinations, fundings and
payments in connection with Base Rate Loans, any day excluding Saturday, Sunday
and any day which is a legal holiday under the laws of the State of
New York or
is a day on which banking institutions located in such state are authorized or
required by law or other governmental action to close, and (iii) with respect to
all notices, determinations, fundings and payments in connection with the
Adjusted Eurodollar Rate or any Eurodollar Rate Loans, any day that is a
Business Day described in clause (i) above for Adjusted Eurodollar Rate or any
4
Eurodollar Rate Loans requested by Canadian Borrower or (ii) above for Adjusted
Eurodollar Rate or any Eurodollar Rate Loans requested by Company and, in each
case, that is also a day for trading by and between banks in US Dollar deposits
in the applicable interbank Eurodollar market.
"CANADIAN BENEFIT PLANS" means all material employee benefit plans of
any nature or kind whatsoever that are not Canadian Pension Plans and are
maintained or contributed to by Company, Canadian Borrower or any of Company's
Subsidiaries having employees in Canada.
"CANADIAN BORROWER" has the meaning assigned to that term in the
introduction to this Agreement.
"CANADIAN CCAA CREDIT AGREEMENT" means that certain Canadian Liquidity
Credit Agreement dated as of February 28, 2001 by and among Canadian Borrower,
as borrower, Company, as lender thereunder, and Deutsche Bank AG, Canada Branch,
as administrative agent for the lender thereunder, as it may be amended,
restated, supplemented or otherwise modified from time to time.
"CANADIAN COURT" means the Superior Court of Justice of Ontario.
"CANADIAN DOLLARS" or "CN$" means the lawful money of Canada.
"CANADIAN PENSION PLANS" means 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
Company, Canadian Borrower or any of Company's other Subsidiaries for their
employees or former employees in Canada.
"CAPEX REFERENCED LEVERAGE RATIO" means the Leverage Ratio as at
February 28 or 29, as the case may be, of the Fiscal Year immediately preceding
the Fiscal Year for which limitations of Consolidated New Build Capital
Expenditures or Off-Balance Sheet New Build Capital Expenditures, as the case
may be, are measured.
"CAPITAL EXPENDITURES" means, for any period, the sum of (i) the
aggregate of all expenditures (whether paid in cash or other consideration or
accrued as a liability and including that portion of Capital Leases which is
capitalized on the balance sheet of Company and its Subsidiaries) by Company and
its Subsidiaries during that period that, in conformity with GAAP, are included
in "additions to property, plant or equipment" or comparable items reflected in
the consolidated statement of cash flows of Company and its Subsidiaries plus
(ii) to the extent not covered by clause (i) of this definition, the aggregate
of all expenditures by Company and its Subsidiaries during that period to
acquire (by purchase or otherwise) the business, property or fixed assets of
Company and its Subsidiaries, or the stock or other evidence of beneficial
ownership of, any Person other than Company or any of its Subsidiaries; provided
that Capital Expenditures shall not include expenditures for Permitted
Investments and Permitted Acquisitions made in compliance with subsections
7.3A(viii) and 7.7(iii) and the non-cash portion of Asset Swaps made in
compliance with subsection 7.7(vii). For the avoidance of doubt, landlord
allowances to the extent received by Company and its Wholly-Owned Subsidiaries
in cash in connection with leased properties shall be counted as reductions of
Capital Expenditures.
5
"CAPITAL LEASE," as applied to any Person, means any lease of any
property (whether real, personal or mixed) by that Person as lessee that, in
conformity with GAAP, is accounted for as a capital lease on the balance sheet
of that Person; provided that, with respect to Company and its Subsidiaries,
"Capital Lease" shall also include any lease that Company or any of its
Subsidiaries is a party to with respect to a theatre which has been closed by
Company or such Subsidiary, as the case may be, and for which Company or such
Subsidiary, as the case may be, has established a liability on its balance sheet
in accordance with GAAP.
"CASH" means money, currency or a credit balance in a Deposit Account.
"CASH EQUIVALENTS" means, as at any date of determination, (a)
marketable securities (1) issued or directly and unconditionally guaranteed as
to interest and principal by the United States Government or (2) issued by any
agency of the United States the obligations of which are backed by the full
faith and credit of the United States, in each case maturing within one year
after such date; (b) marketable direct obligations issued by any state of the
United States of America or any political subdivision of any such state or any
public instrumentality thereof, in each case maturing within one year after such
date and having, at the time of the acquisition thereof, the highest rating
obtainable from either S&P or ▇▇▇▇▇'▇; (c) commercial paper maturing no more
than one year from the date of creation thereof and having, at the time of the
acquisition thereof, a rating of at least A-1 from S&P or at least P-1 from
▇▇▇▇▇'▇; (d) certificates of deposit or bankers' acceptances maturing within one
year after such date and issued or accepted by any Lender or by any commercial
bank organized under the laws of the United States of America or any state
thereof or the District of Columbia that (1) is at least "adequately
capitalized" (as defined in the regulations of its primary Federal banking
regulator) and (2) has Tier 1 capital (as defined in such regulations) of not
less than US$100,000,000; and (e) shares of any money market mutual fund that
(1) has at least 95% of its assets invested continuously in the types of
investments referred to in clauses (a) and (b) above, (2) has net assets of not
less than US$500,000,000, and (3) has the highest rating obtainable from either
S&P or ▇▇▇▇▇'▇.
"CASH MANAGEMENT SYSTEM" means the cash management system of Company
and Subsidiary Guarantors described in Schedule 6.11.
"CCAA" means the Companies' Creditors Arrangement Act, R?S?C 1985, C.
C-36, as amended.
"CCAA PLAN OF ARRANGEMENT" means the Plan of Compromise and Arrangement
of Canadian Borrower and certain of its Wholly-Owned Subsidiaries under the CCAA
Proceedings, dated February 22, 2002.
"CCAA PROCEEDINGS" means the proceedings commenced on February 15, 2001
by Canadian Borrower and certain of its Wholly-Owned Subsidiaries under the CCAA
in the Superior Court of Justice of Ontario and having court file no.
01-CL-4024.
"CDOR RATE" means, on any day, the annual rate of interest which is the
arithmetic average of the "BA 1 month" rates applicable to CN$ bankers'
acceptances identified as such on the Reuters Screen CDOR Page at approximately
10:00 a.m. on such day (as adjusted by the CN Administrative Agent after 10:00
a.m. (Toronto time) to reflect any error in any posted rate or in
6
the posted average annual rate). If the rate does not appear on the Reuters
Screen CDOR Page as contemplated above, then the CDOR Rate on any day shall be
calculated as the arithmetic average of the discount rates applicable to one
month CN$ bankers' acceptances of, and as quoted by, any two of the Schedule I
Lenders, chosen by the CN Administrative Agent in its discretion, as of 10:00
a.m. (Toronto time) on the day, or if the day is not a Business Day, then on the
immediately preceding Business Day. If less than two Schedule I Lenders quote
the aforementioned rate, the CDOR Rate shall be the rate quoted by the CN
Administrative Agent.
"CERTIFICATE RE NON-BANK STATUS" means a certificate substantially in
the form of Exhibit XIII annexed hereto delivered by a Lender to US
Administrative Agent pursuant to subsection 2.7B(iii).
"CHANGE OF CONTROL" means (A) with respect to Company, (x) prior to an
Initial Public Offering, Sponsors and Sponsor Affiliates shall cease to own or
manage at least 51% of Company's total voting securities and (y) after an
Initial Public Offering either (i) Sponsors and the Sponsor Affiliates shall
cease to own or manage at least 35% of Company's total voting securities or (ii)
any other Person or two or more Persons acting in concert as a group (within the
meaning of Rule 13d-3 under the Exchange Act) shall beneficially own a greater
percentage of Company's total voting securities than Sponsors beneficially own
and (B) with respect to Canadian Borrower, Company shall cease to directly own
at least 51% of the equity interests of Canadian Borrower.
"CHANGE IN LAW" means the enactment, promulgation, execution or
ratification of, or any change in, modification of, or amendment to, any
applicable law, treaty or governmental rule, regulation or order, or any change
in the interpretation, administration or application thereof.
"CHAPTER 11 CASES" has the meaning assigned to that term in the
Recitals hereto.
"CLASS" means, as applied to Lenders, each of the following two classes
of Lenders: (i) Lenders making Term Loans and (ii) Lenders making Revolving
Loans.
"CLOSING DATE" means the date on or before March 31, 2002, on which the
conditions set forth in subsection 4.1 have been satisfied by Borrowers or have
been waived in writing by Requisite Lenders.
"CLOSING DATE MORTGAGED PROPERTY" has the meaning set forth in
subsection 4.1G(i).
"CLOSING DATE MORTGAGE" AND "CLOSING DATE MORTGAGES" have the meanings
set forth in subsection 4.1G(i).
"CN ADMINISTRATIVE AGENT" has the meaning assigned to that term in the
introduction to this Agreement and also means and includes any successor CN
Administrative Agent appointed pursuant to subsection 9.5.
"CN DOLLAR EQUIVALENT AMOUNT" of any amount on any day means the
aggregate of:
(a) the part, if any, of the amount denominated in Canadian
Dollars; and
7
(b) the Equivalent Amount in Canadian Dollars (determined on that
day unless otherwise specified in this Agreement) of the part,
if any, of the amount denominated in a currency other than
Canadian Dollars.
"CN LENDERS" means the persons identified as "CN Lenders" and listed on
Schedule 2.1 of this Agreement, together with their successors and permitted
assigns pursuant to subsection 10.1; provided that the term "CN Lenders," when
used in the context of a particular Commitment, shall mean CN Lenders having
that Commitment.
"CN LOANS" means the Loans made by US Lenders or CN Lenders, as the
case may be, to Canadian Borrower pursuant to subsection 2.1(A)(ii) and
2.1(A)(iv).
"CN PRIME RATE" means, with respect to a CN Prime Rate Loan, on any day
the greater of:
(a) the annual rate of interest announced from time to time by
the CN Administrative Agent as being its reference rate then in effect
for determining interest rates on Canadian Dollar denominated
commercial loans made by it in Canada; and
(b) the CDOR Rate in effect from time to time plus 50 basis
points per annum.
Any change in the CN Prime Rate shall be effective on the date the
change becomes effective generally.
"CN PRIME RATE LOAN" means a Loan which is denominated in Canadian
Dollars and in respect of which Canadian Borrower is obligated to pay interest
at the CN Prime Rate in accordance with subsection 2.2A(ii)(a).
"CN REGISTER" means, with respect to CN Administrative Agent, a
register for recordation of the names and addresses of CN Lenders and the
Commitments and Loans of each CN Lender from time to time, maintained at its
address referred to in subsection 10.8.
"CN TRANCHE REVOLVING LOAN COMMITMENT" means the commitment of a CN
Lender to make a Loan to Canadian Borrower pursuant to subsection 2.1A(iv), and
"CN TRANCHE REVOLVING LOAN COMMITMENTS" means such commitments of all CN Lenders
in the aggregate.
"CN TRANCHE REVOLVING LOAN EXPOSURE" means, with respect to any CN
Lender as of any date of determination, (i) prior to the termination of the CN
Tranche Revolving Loan Commitments, that CN Lender's CN Tranche Revolving Loan
Commitment and (ii) after the termination of the CN Tranche Revolving Loan
Commitment, the aggregate outstanding principal amount of the CN Tranche
Revolving Loans of that CN Lender.
"CN TRANCHE REVOLVING LOANS" means the Loans made by CN Lenders to
Canadian Borrower pursuant to subsection 2.1A(iv).
"CN TRANCHE REVOLVING NOTE" means the promissory notes of Canadian
Borrower issued pursuant to subsection 2.1E(ii)(b), and any promissory notes
issued by Canadian
8
Borrower pursuant to the last sentence of subsection 10.1B(i) in connection with
assignments of the CN Tranche Revolving Loan Commitments or CN Tranche Revolving
Loans of any CN Lender, in each case substantially in the form of Exhibit VII
annexed hereto, as they may be amended, restated supplemented or otherwise
modified from time to time.
"CN TRANCHE TERM LOAN COMMITMENT" means the commitment of a US Lender
to make a Loan to Canadian Borrower pursuant to subsection 2.1A(ii), and "CN
TRANCHE TERM LOAN COMMITMENTS" means such commitments of all US Lenders in the
aggregate.
"CN TRANCHE TERM LOAN EXPOSURE" means, with respect to any US Lender as
of any date of determination, (i) prior to the funding of the CN Tranche Term
Loans on the Closing Date, that US Lender's CN Tranche Term Loan Commitment and
(ii) after the funding of the CN Tranche Term Loans on the Closing Date, the
outstanding principal amount of the CN Tranche Term Loans of that US Lender.
"CN TRANCHE TERM LOANS" means the Loans made by US Lenders to Canadian
Borrower pursuant to subsection 2.1A(ii).
"CN TRANCHE TERM NOTE" means the promissory notes of Canadian Borrower
issued pursuant to subsection 2.1E(ii)(a), and any promissory notes issued by
Canadian Borrower pursuant to the last sentence of subsection 10.1B(i) in
connection with assignments of the CN Tranche Term Loans Commitments or CN
Tranche Term Loans of any US Lender, in each case substantially in the form of
Exhibit V annexed hereto, as they may be amended, restated, supplemented or
otherwise modified from time to time.
"COLLATERAL" means, collectively, all of the personal property
(including capital stock) in which Liens are purported to be granted by the
Collateral Documents.
"COLLATERAL ACCOUNT" has the meaning assigned to "Collateral Account"
in the Collateral Account Agreement.
"COLLATERAL ACCOUNT AGREEMENT" means the Collateral Account Agreement
executed and delivered by Company and Collateral Agent on the Closing Date,
substantially in the form of Exhibit XIV annexed hereto, as such Collateral
Account Agreement may hereafter be amended, supplemented or otherwise modified
from time to time.
"COLLATERAL AGENT" means BTCo acting in the capacity of collateral
agent on behalf of the Lenders, the Administrative Agents, the Term Loan Lenders
and the Term Loan Administrative Agent and other Persons that may become parties
to the Intercreditor Agreement, in each case under the Collateral Documents.
"COLLATERAL DOCUMENTS" means the Collateral Account Agreement, Security
Agreement, the Mortgages and all other instruments or documents delivered by any
Loan Party pursuant to this Agreement or any of the other Priority Secured Loan
Documents to grant to Collateral Agent, on behalf of the Lenders and/or the Term
Loan Lenders, a Lien on any real, personal, immovable, movable or mixed property
of that Loan Party as security for the Obligations.
9
"COMMERCIAL LETTER OF CREDIT" means any letter of credit or similar
instrument issued for the purpose of providing the primary payment mechanism in
connection with the purchase of any materials, goods or services by Company or
any of its Subsidiaries in the ordinary course of business of Company or such
Wholly-Owned Subsidiary.
"COMMITMENT" means, with respect to any Lender, the US Tranche Term
Loan Commitment, the CN Tranche Term Loan Commitment, the US Tranche Revolving
Loan Commitment or the CN Tranche Revolving Loan Commitment of such Lender and
"COMMITMENTS" means such commitments of all Lenders in the aggregate.
"COMMITMENT FEE PERCENTAGE" has the meaning set forth in subsection
2.3A.
"COMMITMENT TERMINATION DATE" means February 28, 2007.
"COMPANY" has the meaning assigned to that term in the introduction to
this Agreement.
"COMPANY-FUNDED UNSECURED SETTLEMENT AMOUNT" means the difference
between (1) the lesser of (x) US$20,000,000 and (y) the difference between (i)
US$50 million and (ii) the sum of (a) the aggregate amount of loans under the
Post-Petition Incremental US Sublimit and the Post-Petition Incremental Canadian
Sublimit of the DIP Credit Agreement outstanding on the Closing Date, (b) all
unpaid reasonable and customary closing expenses, fees and bankruptcy-related
expenses, in each case whether incurred or to be incurred before, on or after
the Closing Date (provided that the fees due to the Term Loan Lenders under the
Term Loan Agreement shall be excluded from this amount), (c) all incurred but
unpaid Capital Expenditures related to Designated Projects (provided that
amounts due with respect to the ▇▇▇▇ ▇▇▇▇ ▇▇▇▇▇▇ Project shall be excluded in an
amount equal to US$7,392,244.00), and (d) normal working capital levels, as
agreed between US Administrative Agent and Company and (2) US$5,000,000.
"COMPANY GUARANTY" means the Company Guaranty executed and delivered by
Company on the Closing Date, substantially in the form of Exhibit XVII annexed
hereto, as such Company Guaranty may be amended, supplemented or otherwise
modified from time to time.
"COMPETITOR" means any Person engaged directly or indirectly, or having
any Affiliate engaged directly or indirectly, in the production, distribution or
exhibition of motion pictures.
"COMPLIANCE CERTIFICATE" means a certificate substantially in the form
of Exhibit VIII annexed hereto delivered to US Administrative Agent and Lenders
by Company pursuant to subsection 6.1(iv).
"CONFIRMATION ORDER" means that certain Order Confirming Plan of
Reorganization entered by the Bankruptcy Court on March 1, 2002, without
modification, revision or amendment.
"CONSOLIDATED NEW BUILD CAPITAL EXPENDITURE ALLOWANCE" has the meaning
set forth in subsection 7.13B(i).
10
"CONSOLIDATED NEW BUILD CAPITAL EXPENDITURES" means, for any period,
New Build Capital Expenditures other than Off-Balance Sheet New Build Capital
Expenditures during such period.
"CONTINGENT OBLIGATION," as applied to any Person, means any direct or
indirect liability, contingent or otherwise, of that Person (i) with respect to
any Indebtedness, lease, dividend or other obligation of another if the primary
purpose or intent thereof by the Person incurring the Contingent Obligation is
to provide assurance to the obligee of such obligation of another that such
obligation of another will be paid or discharged, or that any agreements
relating thereto will be complied with, or that the holders of such obligation
will be protected (in whole or in part) against loss in respect thereof, (ii)
with respect to any letter of credit issued for the account of that Person or as
to which that Person is otherwise liable for reimbursement of drawings, or (iii)
under Interest Rate Agreements and Currency Agreements. Contingent Obligations
shall include, without limitation, (a) the direct or indirect guaranty,
endorsement (otherwise than for collection or deposit in the ordinary course of
business), co-making, discounting with recourse or sale with recourse by such
Person of the obligation of another, (b) the obligation to make take-or-pay or
similar payments if required regardless of non-performance by any other party or
parties to an agreement, and (c) any liability of such Person for the obligation
of another through any agreement (contingent or otherwise) (X) to purchase,
repurchase or otherwise acquire such obligation or any security therefor, or to
provide funds for the payment or discharge of such obligation (whether in the
form of loans, advances, stock purchases, capital contributions or otherwise) or
(Y) to maintain the solvency or any balance sheet item, level of income or
financial condition of another if, in the case of any agreement described under
subclauses (X) or (Y) of this sentence, the primary purpose or intent thereof is
as described in the preceding sentence. The amount of any Contingent Obligation
shall be equal to the amount of the obligation so guaranteed or otherwise
supported or, if less, the amount to which such Contingent Obligation is
specifically limited.
"CONTRACTUAL OBLIGATION," as applied to any Person, means any provision
of any Security issued by that Person or of any material indenture, mortgage,
deed of trust, contract, undertaking, agreement or other instrument to which
that Person is a party or by which it or any of its properties is bound or to
which it or any of its properties is subject.
"COVERED TAX" or "COVERED TAXES" means all Tax or Taxes other than any
Excluded Tax or Excluded Taxes.
"CURE AMOUNT" means the amount of cash received by Company pursuant to
the exercise by Company of its Cure Rights.
"CURE RIGHTS" means the rights of Company pursuant to subsection 7.6C
to sell Permitted Cure Securities to Sponsors for cash and apply the proceeds of
such sale to cause compliance with the Financial Performance Covenants in the
manner specified in such subsection.
"CURE RIGHTS PROHIBITION PERIOD" means, if Cure Rights are exercised in
any two consecutive Fiscal Quarters, the four consecutive Fiscal Quarters
following the latest date of such exercise during which no Cure Rights may be
exercised.
11
"CURRENCY AGREEMENT" means any foreign exchange contract, currency swap
agreement, futures contract, option contract, synthetic cap or other similar
agreement or arrangement.
"DEBT SECURITIES PREPAYMENT AMOUNT" has the meaning set forth in
subsection 2.4B(iii)(c).
"DEBT SERVICE COVERAGE RATIO" means, as of any date of determination,
the ratio of (i) Wholly-Owned EBITDAR for the most recently ended four Fiscal
Quarter period to (ii) the sum of (a) Wholly-Owned Total Debt Interest Expense
for such four Fiscal Quarter period plus (b) Wholly-Owned Rent Expense for such
four Fiscal Quarter period plus (c) scheduled principal payments on the Loans
required to be made under subsection 2.4A during such four Fiscal Quarter period
plus (d) scheduled principal payments on the Junior Term Loans required to be
made under subsection 2.4A of the Term Loan Agreement during such four Fiscal
Quarter period plus (e) scheduled payments of Indebtedness other than the Loans,
the Junior Term Loans and Indebtedness under the ▇▇▇▇ ▇▇▇▇ ▇▇▇▇▇▇ Loan Agreement
and ▇▇▇▇ ▇▇▇▇ ▇▇▇▇▇▇ Note required to be made during such four Fiscal Quarter
period; provided that, solely for purposes of calculating the Debt Service
Coverage Ratio, (i) Wholly-Owned Total Debt Interest Expense for the four-Fiscal
Quarter period ending on the last day of the Fiscal Quarter including the
Closing Date shall equal Wholly-Owned Total Debt Interest Expense for such
Fiscal Quarter multiplied by four, (ii) Wholly-Owned Total Debt Interest Expense
for the four-Fiscal Quarter period ending on the last day of the first full
Fiscal Quarter occurring after the Fiscal Quarter including the Closing Date
shall equal the aggregate amount of Wholly-Owned Total Debt Interest Expense for
such Fiscal Quarter and the Fiscal Quarter including the Closing Date multiplied
by two, (iii) Wholly-Owned Total Debt Interest Expense for the four-Fiscal
Quarter period ending on the last day of the second full Fiscal Quarter
occurring after the Fiscal Quarter including the Closing Date shall equal the
aggregate amount of Wholly-Owned Total Debt Interest Expense for such Fiscal
Quarter, the immediately preceding Fiscal Quarter and the Fiscal Quarter
including the Closing Date multiplied by four-thirds; and (iv) principal
payments under clauses (ii)(c), (d) and (e) above shall be annualized in the
manner that Wholly-Owned Total Debt Interest Expense is annualized in clauses
(i), (ii) and (iii) of this proviso; provided further that, solely for purposes
of calculating the Debt Service Coverage Ratio for any four-Fiscal Quarter
period including the Closing Date, Wholly-Owned Total Debt Interest Expense
shall not include any Interest Expense from the first day of the Fiscal Quarter
including the Closing Date to and including the Closing Date with respect to the
Sponsor Conversion Amount.
"DEEMED MAJOR ASSET SALE PROCEEDS" means Net Asset Sale Proceeds in
excess of US$20,000,000 of Net Asset Sale Proceeds in respect of Minor Asset
Sales made in any Fiscal Year.
"DEPOSIT ACCOUNT" means a demand, time, savings, passbook or like
account with a bank, savings and loan association, credit union or like
organization, other than an account evidenced by a negotiable certificate of
deposit.
"DESIGNATED PROJECTS" has the meaning assigned to that term in the DIP
Credit Agreement.
12
"DIP CREDIT AGREEMENT" means that certain Debtor-In-Possession Credit
Agreement dated as of February 15, 2001, as amended, among Company, the
Subsidiary Borrowers named therein, the DIP Lenders, and Bankers Trust Company,
as administrative agent.
"DIP LENDERS" means the parties identified as lenders and indemnifying
lenders under the DIP Credit Agreement in their capacities as lenders under the
DIP Credit Agreement, together with their successors and assigns.
"DISCLOSURE STATEMENTS" means the Disclosure Statements for Debtors'
First Amended Chapter 11 Plan dated January 14, 2001 approved by the Bankruptcy
Court and soliciting approval of the Plan of Reorganization of the creditors of
Company and Subsidiary Debtors by Company and the Sponsors and the Notice of
Meeting of Creditors and Information Circular dated January 28, 2002 soliciting
approval of the Plan of Compromise and Arrangement of Canadian Borrower and
certain of its Subsidiaries.
"EBITDA" means, for any period, for any Person the sum of the amounts,
without duplication of component amounts, for such period of (i) Net Income,
(ii) Interest Expense, (iii) any amounts payable under subsection 2.3 of this
Agreement or subsection 2.3 of the Term Loan Agreement through the Closing Date
to the extent such amounts have been deducted from Net Income and excluded from
Interest Expense, (iv) provisions for taxes based on income or equity, (v) total
depreciation expense, (vi) total amortization expense, (vii) all extraordinary
losses reducing Net Income, including losses arising from the sale or
disposition of assets, less all extraordinary gains increasing Net Income,
(viii) any amounts representing the amortization of deferred financing expense
(to the extent not already included in (a) Interest Expense or (b) clause (iii)
above), (ix) other non-cash items reducing Net Income (including Operating Lease
adjustments required under GAAP) less other non-cash items increasing Net Income
(including Operating Lease adjustments required under GAAP), (x) one-time costs
and expenses, whether cash or non-cash, associated with the restructuring and
reorganization of Company and its Subsidiaries pursuant to the Plan of
Reorganization and CCAA Plan of Arrangement incurred during the applicable
measurement period, including the costs and expenses described on Schedule 1.1E
(to the extent not already included in clause (iii) above); provided that to the
extent the aggregate actual amount of the costs and expenses described on
Schedule 1.1E, together with any other restructuring and reorganization costs
and expenses paid in cash after the Closing Date, exceeds the aggregate amount
of the costs and expenses set forth on Schedule 1.1E, such excess shall be
deemed to be, and shall be treated as, non-operating expenses under clause (xii)
of this definition of "EBITDA," (xi) non-cash non-recurring and other one-time
non-operating expenses (unless subsequently paid in cash in the applicable
measurement period), (xii) non-recurring and other one-time non-operating
expenses to be paid in cash; provided that, in the case of Company and its
Subsidiaries, to the extent that such expenses are paid in cash during the
applicable measurement period and exceed US$15,000,000 in the Fiscal Year ending
February 28, 2003 or US$7,500,000 in any Fiscal Year thereafter, the excess will
not be added back in the applicable measurement period; provided further that if
such expenses are less than US15,000,000 in the Fiscal Year ending February 28,
2003 or US$7,500,000 in any Fiscal Year thereafter, the applicable limit set
forth in the preceding proviso for the immediately succeeding Fiscal Year shall
be increased by such difference or such greater amount as the US Administrative
Agent may approve, in its sole discretion, based on such financial information,
projections and detail as the Company may provide, (xiii) the effect of
accounting changes
13
pursuant to opinion No. 20 of the Accounting Principles Board and (xiv)
Management Fees incurred during such period, all of the foregoing as determined
on a consolidated basis for such Person and its Subsidiaries in conformity with
GAAP.
"ELIGIBLE ASSIGNEE" means (A) in respect of any Lender with a US
Tranche Term Loan Commitment, a US Tranche Revolving Loan Commitment or a CN
Tranche Term Loan Commitment (i) a commercial bank organized under the laws of
the United States or any state thereof having a combined capital and surplus of
at least US$250,000,000; (ii) a savings and loan association or savings bank
organized under the laws of the United States or any state thereof having a
combined capital and surplus of at least US$250,000,000; (iii) a commercial bank
organized under the laws of any other country or a political subdivision thereof
having a combined capital and surplus of at least US$250,000,000; provided that
(x) such bank is acting through a branch or agency located in the United States
or (y) such bank is organized under the laws of a country that is a member of
the Organization for Economic Cooperation and Development or a political
subdivision of such country; and (iv) any other entity which is an "accredited
investor" (as defined in Regulation D under the Securities Act) which extends
credit or buys loans in the ordinary course of its businesses including, but not
limited to, insurance companies, mutual funds and lease financing companies; (B)
in respect of any Lender with a CN Tranche Revolving Loan Commitment, (i) a bank
organized under the laws of the Canada having a combined capital and surplus of
at least US$250,000,000 or the CN Dollar Equivalent Amount thereof; (ii) a trust
company organized under the laws of Canada or any province thereof having a
combined capital and surplus of at least US$250,000,000 or the CN Dollar
Equivalent Amount thereof; (iii) a commercial bank organized under the laws of
any other country or a political subdivision thereof having a combined capital
and surplus of at least US$250,000,000 or the Equivalent Amount thereof in any
other currency; provided that (x) such bank is acting through a branch or agency
located in Canada and (y) such bank is organized under the laws of a country
that is a member of the Organization for Economic Cooperation and Development or
a political subdivision of such country; and (C) any Lender and any Affiliate of
any Lender and any Affiliated Fund of any Lender; provided that no Competitor
other than the Sponsors and Sponsor Affiliates shall be an Eligible Assignee,
and in respect of the CN Tranche Revolving Loan Commitment and the CN Tranche
Revolving Loans any such assignee is resident in Canada for the purposes of the
Income Tax Act (Canada).
"EMPLOYEE BENEFIT PLAN" means any "employee benefit plan" as defined in
Section 3(3) of ERISA which is, or was at any time, maintained or contributed to
by Company or any of its ERISA Affiliates.
"ENVIRONMENTAL CLAIM" means any accusation, allegation, notice of
violation, claim, demand, abatement order or other order or direction
(conditional or otherwise) by any Governmental Authority or any Person for any
damage, including, without limitation, personal injury (including sickness,
disease or death), tangible or intangible property damage, contribution,
indemnity, indirect or consequential damages, damage to the environment,
nuisance, pollution, contamination or other adverse effects on the environment,
or for fines, penalties or restrictions, in each case relating to, resulting
from or in connection with Hazardous Materials and relating to Company, any of
its Subsidiaries, any of their respective Affiliates or any Facility.
14
"ENVIRONMENTAL LAWS" means all applicable statutes, ordinances, orders,
rules, regulations, plans, policies or decrees and requirements having the force
of law relating to (i) environmental matters, including, without limitation,
those relating to fines, injunctions, penalties, damages, contribution, cost
recovery compensation, losses or injuries resulting from the Release or
threatened Release of Hazardous Materials, (ii) the generation, use, storage,
transportation or disposal of Hazardous Materials, or (iii) occupational safety
and health, industrial hygiene, land use or the protection of human, plant or
animal health or welfare from environmental hazards, in any manner applicable to
Company or any of its Subsidiaries or any of their respective properties,
including, without limitation, the Comprehensive Environmental Response,
Compensation, and Liability Act (42 U.S.C. Section 9601 et seq.) ("CERCLA"), the
Hazardous Materials Transportation Act (49 U.S.C. Section 1801 et seq.), the
Resource Conservation and Recovery Act (42 U.S.C. Section 6901 et seq.), the
Federal Water Pollution Control Act (33 U.S.C. Section 1251 et seq.), the Clean
Air Act (42 U.S.C. Section 7401 et seq.), the Toxic Substances Control Act (15
U.S.C. Section 2601 et seq.), the Federal Insecticide, Fungicide and Rodenticide
Act (7 U.S.C. Section 136 et seq.), the Occupational Safety and Health Act (29
U.S.C. Section 651 et seq.) and the Emergency Planning and Community
Right-to-Know Act (42 U.S.C. Section 11001 et seq.), each as amended or
supplemented, and any analogous future or present local, state, provincial and
federal statutes and regulations promulgated pursuant thereto, each as in effect
as of the date of determination.
"EQUIVALENT AMOUNT" in one currency on any day means the amount of that
currency into which a specified amount of another currency can be converted at
the Bank of Canada's noon spot rate of exchange for such currency or CN
Administrative Agent's or US Administrative Agent's noon spot rate of exchange
for such currency if such amount is being determined by CN Administrative Agent
or US Administrative Agent, respectively (or at any other rate of exchange for
such currency to which the Borrowers and the Administrative Agents agree) and if
that day is not a Business Day, on the immediately preceding Business Day.
"ERISA" means the Employee Retirement Income Security Act of 1974, as
amended from time to time, and any successor statute.
"ERISA AFFILIATE," as applied to any Person, means (i) any corporation
which is, or was at any time, a member of a controlled group of corporations
within the meaning of Section 414(b) of the Internal Revenue Code of which that
Person is a member; (ii) any trade or business (whether or not incorporated)
which is a member of a group of trades or businesses under common control within
the meaning of Section 414(c) of the Internal Revenue Code of which that Person
is a member; and (iii) any member of an affiliated service group within the
meaning of Section 414(m) or (o) of the Internal Revenue Code of which that
Person, any corporation described in clause (i) above or any trade or business
described in clause (ii) above is a member. Any former ERISA Affiliate of a
Person shall continue to be considered an ERISA Affiliate within the meaning of
this definition with respect to the period such entity was an ERISA Affiliate of
the Person and with respect to liabilities arising after such period for which
the Person could be liable under the Internal Revenue Code or ERISA.
"ERISA EVENT" means (i) a "reportable event" within the meaning of
Section 4043 of ERISA and the regulations issued thereunder with respect to any
Pension Plan (excluding those for which the provision for 30-day notice to the
PBGC has been waived by regulation); (ii) the
15
failure to meet the minimum funding standard of Section 412 of the Internal
Revenue Code with respect to any Pension Plan (whether or not waived in
accordance with Section 412(d) of the Internal Revenue Code) or the failure to
make by its due date a required installment under Section 412(m) of the Internal
Revenue Code with respect to any Pension Plan or the failure to make any
required contribution to a Multiemployer Plan; (iii) the provision by the
administrator of any Pension Plan pursuant to Section 4041(a)(2) of ERISA of a
notice of intent to terminate such plan in a distress termination described in
Section 4041(c) of ERISA; (iv) the withdrawal by Company or any of its ERISA
Affiliates from any Pension Plan with two or more contributing sponsors or the
termination of any such Pension Plan resulting in liability pursuant to Sections
4063 or 4064 of ERISA; (v) the institution by the PBGC of proceedings to
terminate any Pension Plan, or the occurrence of any event or condition which is
reasonably likely to result in the termination of, or the appointment of a
trustee to administer, any Pension Plan; (vi) the imposition of liability on
Company or any of its ERISA Affiliates pursuant to Section 4062(e) or 4069 of
ERISA or by reason of the application of Section 4212(c) of ERISA; (vii) the
withdrawal by Company or any of its ERISA Affiliates in a complete or partial
withdrawal (within the meaning of Sections 4203 and 4205 of ERISA) from any
Multiemployer Plan which is reasonably likely to result in the imposition of
withdrawal liability therefor, or the receipt by Company or any of its ERISA
Affiliates of notice from any Multiemployer Plan that it is in reorganization or
insolvency pursuant to Section 4241 or 4245 of ERISA, or that it intends to
terminate or has terminated under Section 4041A or 4042 of ERISA; (viii) the
occurrence of an act or omission which is reasonably likely to result in the
imposition on Company or any of its ERISA Affiliates of fines, penalties, taxes
or related charges under Chapter 43 of the Internal Revenue Code or under
Section 409 or 502(c), (i) or (l) or 4071 of ERISA in respect of any Employee
Benefit Plan; (ix) the assertion of a material claim (other than routine claims
for benefits) against any Employee Benefit Plan other than a Multiemployer Plan
or the assets thereof, or against Company or any of its ERISA Affiliates in
connection with any such Employee Benefit Plan; (x) receipt from the Internal
Revenue Service of notice of the failure of any Pension Plan (or any other
Employee Benefit Plan intended to be qualified under Section 401(a) of the
Internal Revenue Code) to qualify under Section 401(a) of the Internal Revenue
Code, or the failure of any trust forming part of any Pension Plan to qualify
for exemption from taxation under Section 501(a) of the Internal Revenue Code;
or (xi) the imposition of a Lien pursuant to Section 401(a)(29) or 412(n) of the
Internal Revenue Code or pursuant to ERISA with respect to any Pension Plan.
"EURODOLLAR RATE LOANS" means Loans bearing interest at rates
determined by reference to the Adjusted Eurodollar Rate as provided in
subsection 2.2A.
"EVENT OF DEFAULT" means each of the events set forth in Section 8.
"EXCESS CASH FLOW" means, for any period, an amount (if positive),
equal to (i) the amount for such period of Wholly-Owned EBITDA minus (ii) the
sum, without duplication, of the amounts for such period of (a) voluntary and
scheduled repayments of Wholly-Owned Total Debt actually made (excluding (1)
repayments of Revolving Loans to the extent the Revolving Loan Commitments are
not permanently reduced in connection with such repayments and (2) repayments of
Indebtedness under the West ▇▇▇▇ ▇▇▇▇▇▇ Loan Agreement and ▇▇▇▇ ▇▇▇▇ ▇▇▇▇▇▇
Note), (b) Excess Cash Flow Capital Expenditures (net of any proceeds of any
related financings with respect to such expenditures), (c) Wholly-Owned Total
Debt Interest Expense to the extent
16
paid in cash by Company and its Wholly-Owned Subsidiaries, (d) Permitted
Investments and Permitted Acquisitions to the extent made in cash by Company or
any of its Wholly-Owned Subsidiaries (net of any proceeds of any related
financings with respect to such Permitted Investments and Permitted
Acquisitions) (it being acknowledged and agreed that Investments made pursuant
to subsection 7.3A(x) do not constitute Permitted Investments), (e) provisions
for Taxes based on income or equity of Company and its Wholly-Owned Subsidiaries
to the extent paid in cash with respect to such periods, (f) all fees paid in
cash by Company and its Wholly-Owned Subsidiaries to Administrative Agents and
the Lenders under subsection 2.3 of this Agreement and to the Term Loan
Administrative Agent and Term Loan Lenders under subsection 2.3 of Term Loan
Agreement (other than commitment fees payable under subsection 2.3A of this
Agreement) and any fees payable in connection with an amendment, waiver or other
modification to this Agreement or the Term Loan Agreement, and (g) amounts paid
in cash by Company and its Wholly-Owned Subsidiaries to the extent included in
clause (x) through (xiv) of the definition of "EBITDA."
"EXCESS CASH FLOW CAPITAL EXPENDITURES" means, for any period, the
amount of all Capital Expenditures paid in cash (other than Off-Balance Sheet
New Build Capital Expenditures) for such period less the amount of Retained
Proceeds Available for CapEx used to increase the Consolidated New Build Capital
Expenditure Allowance for such period pursuant to subsection 7.13B(i)(b) to the
extent applied as Capital Expenditures, during such period.
"EXCESS CASH FLOW PREPAYMENT AMOUNT" has the meaning set forth in
subsection 2.4B(iii)(e).
"EXCHANGE ACT" means the Securities Exchange Act of 1934, as amended
from time to time, and any successor statute.
"EXCHANGE RATE" means, on any date when an amount expressed in a
currency other than US Dollars is to be determined with respect to any Letter of
Credit, the nominal rate of exchange of the applicable Issuing Lender in the
New
York foreign exchange market for the purchase by such Issuing Lender (by cable
transfer) of such currency in exchange for US Dollars at 12:00 noon (
New York
time) one Business Day prior to such date, expressed as a number of units of
such currency per one US Dollar.
"EXCLUDED TAX" or "EXCLUDED TAXES" means Tax or Taxes imposed on or
measured by a Person's net income, profits or gains (including any franchise or
similar Taxes imposed in lieu thereof and any branch profits Taxes) by the
United States (or any political subdivision or taxing authority thereof or
therein) or by the jurisdiction (or any political subdivision or taxing
authority thereof or therein) under the laws of which the Lender is organized,
has its principal office or has its applicable lending office.
"EXISTING LETTERS OF CREDIT" means letters of credit outstanding on the
Closing Date issued under the Pre-Petition Credit Agreement and the DIP Credit
Agreement and listed on Schedule 1.1L.
"FACILITIES" means all real property (including, without limitation,
all buildings, fixtures or other improvements located thereon) and related
facilities now, hereafter or heretofore owned,
17
leased, operated or used by Company or any of its Subsidiaries or any of their
respective predecessors or Affiliates.
"FEDERAL FUNDS EFFECTIVE RATE" means, for any period, a fluctuating
interest rate equal for each day during such period to the weighted average of
the rates on overnight Federal funds transactions with members of the Federal
Reserve System arranged by Federal funds brokers, as published for such day (or,
if such day is not a Business Day, for the next preceding Business Day) by the
Federal Reserve Bank of
New York, or, if such rate is not so published for any
day which is a Business Day, the average of the quotations for such day on such
transactions received by Administrative Agent from three Federal funds brokers
of recognized standing selected by Administrative Agent.
"FINANCIAL PERFORMANCE COVENANTS" means the covenants of Company set
forth in subsections 7.6A and 7.6B.
"FINANCIAL PLAN" has the meaning assigned to that term in subsection
6.1(xiii).
"FIRST PRIORITY" means, with respect to any Lien purported to be
created on any Collateral pursuant to any Collateral Document, that such Lien
(or any distribution priority thereof) has priority over any other Lien (or
distribution priority) on such Collateral, other than Liens permitted under
subsection 7.2A(i), (iii), (v) and (vi).
"FISCAL QUARTER" means a fiscal quarter of any Fiscal Year.
"FISCAL YEAR" means the fiscal year of Company and its Subsidiaries
ending on February 28 or February 29, as the case may be, of each calendar year.
"FLOOD HAZARD PROPERTY" means a Closing Date Mortgaged Property or an
Additional Mortgaged Property located in an area designated by the Federal
Emergency Management Agency as having special flood or mud slide hazards.
"FOREIGN SUBSIDIARY" means (a) any Subsidiary of Company which is
organized under the laws of any jurisdiction outside of the United States of
America or Canada or (b) any Subsidiary whose sole assets consist of either (i)
stock of a Subsidiary, (ii) equity Securities in a Joint Venture or (iii) an
Investment in a Person, in each case that is organized under the laws of any
jurisdiction outside of the United States of America or Canada.
"FUNDING AND PAYMENT OFFICE" means (i) in respect of fundings and
payments by or to any US Lender, US Administrative Agent or Company, the office
of US Administrative Agent located at ▇▇ ▇▇▇▇ ▇▇▇▇ ▇▇▇▇▇▇, ▇▇▇ ▇▇▇▇, ▇▇▇ ▇▇▇▇,
▇▇▇▇▇, (ii) in respect of fundings and payments by or to any CN Lender, CN
Administrative Agent or Canadian Borrower, the office of CN Administrative Agent
located at ▇▇▇ ▇▇▇ ▇▇▇▇▇▇, ▇▇▇▇▇ ▇▇▇▇, P.O. Box 196 Toronto, Ontario M5K IH6 or
(iii) such other office of an Administrative Agent as may from time to time
hereafter be designated as such in a written notice delivered by such
Administrative Agent to Company, Canadian Borrower and each Lender.
"FUNDING DATE" means the date of the funding of a Loan.
18
"GAAP" means, subject to the limitations on the application thereof set
forth in subsection 1.2, generally accepted accounting principles set forth in
opinions and pronouncements of the Accounting Principles Board of the American
Institute of Certified Public Accountants and statements and pronouncements of
the Financial Accounting Standards Board or in such other statements by such
other entity as may be approved by a significant segment of the accounting
profession, in each case as the same are applicable to the circumstances as of
the date of determination.
"GOVERNMENTAL ACTS" has the meaning assigned to that term in Section
3.5A.
"GOVERNMENTAL AUTHORITY" means any domestic or foreign government
including any federal, provincial, state, territorial or municipal government
and any government agency, tribunal, commission or other authority exercising or
purporting to exercise executive, legislative, judicial, regulatory or
administrative functions of, or pertaining to, government.
"GOVERNMENTAL AUTHORIZATION" means any permit, license, authorization,
plan, directive, consent order or consent decree of or from any Governmental
Authority, agency or court.
"GUARANTIES" means, collectively, (i) the Subsidiary Guaranty and (ii)
the Company Guaranty, and "GUARANTY" means any of such guaranties.
"HAZARDOUS MATERIALS" means (i) any chemical, material or substance at
any time defined as or included in the definition of "hazardous substances,"
"hazardous wastes," "hazardous materials," "extremely hazardous waste,"
"restricted hazardous waste," "infectious waste," "toxic substances" or any
other formulations intended to define, list or classify substances by reason of
deleterious properties such as ignitability, corrosivity, reactivity,
carcinogenicity, toxicity, reproductive toxicity, "TCLP toxicity" or "EP
toxicity" or words of similar meaning and regulatory effect import under any
applicable Environmental Laws; (ii) any oil, petroleum, petroleum fraction or
petroleum derived substance; (iii) any drilling fluids, produced waters and
other wastes associated with the exploration, development or production of crude
oil, natural gas or geothermal resources; (iv) any flammable substances or
explosives; (v) any radioactive materials; (vi) asbestos in any form; (vii) urea
formaldehyde foam insulation; (viii) electrical equipment which contains any oil
or dielectric fluid containing levels of polychlorinated biphenyls in excess of
fifty parts per million; (ix) pesticides; and (x) any other chemical, material
or substance, exposure to which is prohibited, limited or regulated by any
Governmental Authority.
"INDEBTEDNESS," as applied to any Person, means (i) all indebtedness
for borrowed money, (ii) that portion of obligations with respect to Capital
Leases that is properly classified as a liability on a balance sheet in
conformity with GAAP, (iii) notes payable and drafts accepted representing
extensions of credit whether or not representing obligations for borrowed money,
(iv) any obligation owed for all or any part of the deferred purchase price of
property or services (excluding any such obligations incurred under ERISA),
which purchase price is (a) due more than six months from the date of incurrence
of the obligation in respect thereof or (b) evidenced by a note or similar
written instrument, and (v) all indebtedness secured by any Lien on any property
or asset owned or held by that Person regardless of whether the indebtedness
secured
19
thereby shall have been assumed by that Person or is nonrecourse to the credit
of that Person. Obligations under Interest Rate Agreements and Currency
Agreements constitute Contingent Obligations and not Indebtedness. For the
avoidance of doubt, "Indebtedness" shall not include (i) obligations in respect
of Operating Leases including, without limitation, Contingent Obligations in
respect of Operating Leases, or (ii) landlord allowances in connection with
leased properties.
"INDEMNIFIED ENVIRONMENTAL LIABILITIES" has the meaning set forth in
subsection 10.3.
"INDEMNIFIED LIABILITIES" has the meaning set forth in subsection 10.3.
"INDEMNITEES" has the meaning assigned to that term in subsection 10.3.
"INITIAL PUBLIC OFFERING" means a widely dispersed initial public
offering of Company's common stock made after the Closing Date and resulting in
gross proceeds to Company of at least US$75,000,000.
"INSOLVENCY EVENT" means, with respect to any Person, the occurrence of
any of the events described in subsection 8.6 or 8.7; provided that, solely for
purposes of this definition, any references to Company or any of its
Subsidiaries in subsection 8.6 or 8.7 shall be deemed to be a reference to such
Person.
"INSOLVENCY LAWS" means the Bankruptcy Code, the Bankruptcy and
Insolvency Act, R.S.C. 1992, C.27, the CCAA or any other applicable bankruptcy,
insolvency or similar law now or hereafter in effect in the United States of
America or any state thereof or Canada or any province thereof.
"INSURANCE/CONDEMNATION PREPAYMENT AMOUNT" has the meaning set forth in
subsection 2.4B(iii)(b).
"INTELLECTUAL PROPERTY" means all patents, trademarks, designs, trade
names, copyrights, technology, know-how and processes used in or necessary for
the conduct of the business of Company and its Subsidiaries as currently
conducted that are material to the condition (financial or otherwise), business
or operations of Company and its Subsidiaries, taken as a whole.
"INTERCOMPANY NOTE" means a promissory note issued by a Wholly-Owned
North American Subsidiary of Company to Company or any other Wholly-Owned North
American Subsidiary of Company or by Company to a Wholly-Owned North American
Subsidiary of Company to evidence intercompany debt in the form of Exhibit IX
annexed hereto, as such Intercompany Note may be amended, supplemented or
otherwise modified in accordance with subsection 7.14A.
"INTERCREDITOR AGREEMENT" means the Intercreditor Agreement to be
executed and delivered on the Closing Date among Collateral Agent, BTCo, as US
Administrative Agent and Deutsche Bank AG, Canada Branch, as CN Administrative
Agent hereunder, BTCo, as administrative agent under the Term Loan Agreement
and, upon execution of counterparts to the Intercreditor Agreement by any other
Persons who may become parties to the Intercreditor Agreement in accordance with
the terms thereof, such other Persons, in substantially the form of
20
Exhibit XVIII annexed hereto, as such Intercreditor Agreement may thereafter be
amended, restated, supplemented or modified from time to time.
"INTEREST EXPENSE" for any Person means, for any period, the difference
between (i) total interest expense (including that portion attributable to
Capital Leases in accordance with GAAP, capitalized interest and letter of
credit fees and commitment fees payable under this Agreement) of such Person and
its Subsidiaries with respect to all outstanding Indebtedness of such Person and
its Subsidiaries, including, without limitation, all commissions, discounts, and
other fees and charges owed with respect to letters of credit and bankers'
acceptance financing and net costs under Interest Rate Agreements, but
excluding, however, in the case of Company, any fees payable under subsection
2.3 of this Agreement and any fees payable under subsection 2.3 of the Term Loan
Agreement other than commitment fees (payable under subsection 2.3A of this
Agreement) and any fees payable in connection with an amendment, waiver or other
modification to this Agreement or the Term Loan Agreement (including any
non-cash amortization of such fees in accordance with GAAP) and (ii) total
interest income of such Person and its Subsidiaries during such period.
"INTEREST PAYMENT DATE" means (i) with respect to any Base Rate Loan
and CN Prime Rate Loan, each January 15, April 15, July 15, and October 15 of
each year, commencing on the first such date to occur after the Closing Date and
(ii) with respect to any Eurodollar Rate Loan and BA Rate Loan, the last day of
each Interest Period applicable to such Loan; provided that in the case of each
Interest Period of longer than three months "Interest Payment Date" shall also
include the date that is three months after the commencement of such Interest
Period or an integral multiple thereof.
"INTEREST PERIOD" has the meaning assigned to that term in subsection
2.2B.
"INTEREST RATE AGREEMENT" means any interest rate swap agreement,
interest rate cap agreement, interest rate collar agreement or other similar
agreement or arrangement.
"INTEREST RATE DETERMINATION DATE" means, with respect to any Interest
Period, the second Business Day prior to the first day of such Interest Period.
"INTERNAL REVENUE CODE" means the Internal Revenue Code of 1986, as
amended to the date hereof and from time to time hereafter.
"INVESTMENT" means (i) any direct or indirect purchase or other
acquisition by Company or any of its Subsidiaries of, or of a beneficial
interest in, stock or other Securities of any other Person (other than a Person
that prior to such purchase or acquisition was a Wholly-Owned North American
Subsidiary of Company and a party to the Subsidiary Guaranty and the Security
Agreement), (ii) any direct or indirect redemption, retirement, purchase or
other acquisition for value, by any Subsidiary of Company from any Person other
than Company or any of its Wholly-Owned North American Subsidiaries that is a
party to the Subsidiary Guaranty and the Security Agreement, of any equity
Securities of such Subsidiary, or (iii) any direct or indirect loan, advance or
capital contribution by Company or any of its Subsidiaries to any other Person
other than a Wholly-Owned North American Subsidiary of Company which is a party
to the Subsidiary Guaranty and the Security Agreement, including all
indebtedness and accounts
21
receivable from that other Person that are not current assets or did not arise
from sales to that other Person in the ordinary course of 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.
"INVESTMENT EXPENDITURE AMOUNT" has the meaning set forth in subsection
7.3A(viii).
"INVESTMENT/ACQUISITION EXPENDITURE AMOUNT" has the meaning set forth
in subsection 7.3A(viii).
"ISSUING LENDER" means, (i) with respect to the Existing Letters of
Credit, BTCo and (ii) with respect to any other Letter of Credit, the Lender
that agrees or is otherwise obligated to issue such Letter of Credit, determined
as provided in subsection 3.1B(ii).
"JOINT VENTURE" means a joint venture, partnership or other similar
arrangement, whether in corporate, limited liability company, partnership or
other legal form; provided that in no event shall any corporate or limited
liability company Subsidiary of any Person be considered to be a Joint Venture
to which such Person is a party.
"JUNIOR TERM LOANS" means loans made under the Term Loan Agreement.
"LEASEHOLD PROPERTY" means any leasehold interest of any Loan Party as
lessee under any lease of real or immovable property, other than any such
leasehold interest designated from time to time by US Administrative Agent in
its reasonable discretion as not being required to be included in the
Collateral.
"LENDER" means a US Lender or a CN Lender and "LENDERS" means one or
more US Lenders and CN Lenders.
"LETTER OF CREDIT" or "LETTERS OF CREDIT" means (i) the Commercial
Letters of Credit and (ii) the Standby Letters of Credit issued or to be issued
by Issuing Lenders for the account of Company pursuant to subsection 3.1.
"LETTER OF CREDIT USAGE" means, as at any date of determination, the
sum of (i) the maximum aggregate amount that is or at any time thereafter may
become available for drawing under all Letters of Credit then outstanding plus
(ii) the aggregate amount of all drawings under Letters of Credit honored by
Issuing Lenders and not theretofore reimbursed out of the proceeds of US Tranche
Revolving Loans pursuant to subsection 3.3B or otherwise reimbursed by Company.
For purposes of this definition, any amount described in clause (i) or (ii) of
the preceding sentence that is denominated in a currency other than US Dollars
shall be valued based on the applicable Exchange Rate for such currency as of
the applicable date of determination.
"LEVERAGE RATIO" means as of any date of determination, the ratio of
(a) Wholly-Owned Total Debt on the last day of the most recently ended four
Fiscal Quarter period to (b) Wholly-Owned EBITDA for such four Fiscal Quarter
period.
22
"LIEN" means any lien, mortgage, deed of trust, pledge, assignment,
security interest, charge or encumbrance of any kind (including any conditional
sale or other title retention agreement, any lease in the nature thereof, and
any agreement to give any security interest) and any option, trust or other
preferential arrangement having the practical effect of any of the foregoing.
"LOAN" or "LOANS" means one or more of the US Loans or CN Loans made by
the Lenders to Company or Canadian Borrower, respectively, pursuant to
subsection 2.1A.
"LOAN PARTY" means any of Company, Canadian Borrower or any other
Subsidiary of Company executing the Subsidiary Guaranty and "LOAN PARTIES" mean
all such persons, collectively.
"MAINTENANCE CAPITAL EXPENDITURES" means Capital Expenditures other
than New Build Capital Expenditures.
"MAJOR ASSET SALE" means any Asset Sale which is not a Minor Asset
Sale.
"MAJOR ASSET SALE PREPAYMENT AMOUNT" has the meaning set forth in
subsection 2.4B(iii)(a)(2).
"MANAGEMENT FEES" means fees payable to Sponsors or Affiliates of
Sponsors, subject to the provisions of subsection 7.10, for services in advising
on the management of the business of Company and its Subsidiaries.
"MARGIN STOCK" has the meaning assigned to that term in Regulation U of
the Board of Governors of the Federal Reserve System as in effect from time to
time.
"MATERIAL ADVERSE EFFECT" means (i) a material adverse effect on the
business, operations, properties, assets, liabilities, condition (financial or
otherwise) or prospects of the Company and its Wholly-Owned Subsidiaries taken
as a whole, or (ii) the impairment in any material respect of the ability of any
Loan Party to perform, or of any Administrative Agent, Collateral Agent or
Lenders to enforce, the Obligations.
"MATERIAL CONTRACT" means any contract or other arrangement to which
Company or any of its Subsidiaries is a party (other than the Priority Secured
Loan Documents and the Term Loan Documents (as defined in the Term Loan
Agreement)) which would be required to be filed as an exhibit to an SEC Report
under Item 601(b)(10) of Regulation S-K.
"MERGED SUBSIDIARY" and "MERGED SUBSIDIARIES" have the meanings set
forth in subsection 5.21.
"MINOR ASSET SALE" means an Asset Sale producing Net Asset Sale
Proceeds of less than US$10,000,000.
"MINOR ASSET SALE PREPAYMENT AMOUNT" has the meaning set forth in
subsection 2.4B(iii)(a)(1).
23
"MOODY'S" means ▇▇▇▇▇'▇ Investors Services, Inc.
"MORTGAGE" means (i) a security instrument (whether designated as a
deed of trust, a debenture, a hypothec or a mortgage or by any similar title)
executed and delivered by any Loan Party, substantially in the form of Exhibit
XIX-A annexed hereto with respect to Canadian real property and in the form of
Exhibit XIX-B annexed hereto with respect to United States real property, in
each case with such changes thereto as may be recommended by Collateral Agent's
local counsel based on local laws or customary local mortgage or deed of trust
practices, or (ii) at Collateral Agent's option, in the case of an Additional
Mortgaged Property, an amendment to an existing Mortgage, in form reasonably
satisfactory to Collateral Agent, adding such Additional Mortgaged Property to
the Real Property Assets encumbered by such existing Mortgage, in either case as
such security instrument or amendment may be amended, restated, supplemented or
otherwise modified from time to time. "Mortgages" means all such instruments,
including the Closing Date Mortgages and any Additional Mortgages, collectively.
"MORTGAGED PROPERTIES" means, collectively, the Closing Date Mortgaged
Properties and the Additional Mortgaged Properties.
"MULTIEMPLOYER PLAN" means a "multiemployer plan," as defined in
Section 3(37) of ERISA, to which Company or any of its ERISA Affiliates is
contributing, or ever has contributed, or to which Company or any of its ERISA
Affiliates has, or ever has had, an obligation to contribute.
"NET ASSET SALE PROCEEDS" means, with respect to any Asset Sale, Cash
payments (including any Cash received by way of deferred payment pursuant to, or
by monetization of, a note receivable or otherwise, but only as and when so
received) received by Company or any of its Subsidiaries from such Asset Sale,
net of any bona fide direct costs incurred in connection with such Asset Sale,
including, without limitation, (i) real property transfer Tax, recording
charges, brokers' fees, investment banking fees and income Taxes reasonably
estimated to be actually payable within two years of the date of such Asset Sale
as a result of any gain recognized in connection with such Asset Sale and (ii)
payment of the outstanding principal amount of, premium or penalty, if any, and
interest on any Indebtedness (other than the Junior Term Loans and the Loans)
that is secured by a Lien on the equity Securities or assets in question and
that is required to be repaid under the terms thereof as a result of such Asset
Sale.
"NET DEBT SECURITIES PROCEEDS" mean Cash proceeds net of underwriting
discounts, fees and commissions and other reasonable costs and expenses
associated therewith, including reasonable legal fees and expenses, from the
issuance of Indebtedness of Company or any of its Subsidiaries after the Closing
Date (other than the proceeds of Indebtedness permitted pursuant to subsection
7.1).
"NET EQUITY SECURITIES PROCEEDS" means Cash proceeds net of
underwriting discounts, fees and commissions and other reasonable costs and
expenses associated therewith, including reasonable legal fees and expenses,
from the issuance of equity securities of Company or any of its Subsidiaries
after the Closing Date (other than the proceeds of Permitted Cure Securities to
the extent Company elects to use such proceeds to increase Wholly-Owned EBITDA
pursuant to subsection 7.6C(i)(a)).
24
"NET INCOME" of a Person means, for any period, the net income (or
loss) of such Person and its Subsidiaries on a consolidated basis for such
period taken as a single accounting period determined in conformity with GAAP;
provided that there shall be excluded any after-tax gains or losses attributable
to Asset Sales or returned surplus assets of any Pension Plan or Canadian
Pension Plan.
"NET INSURANCE/CONDEMNATION PROCEEDS" means any Cash payments or
proceeds received by Company or any of its Subsidiaries (i) under any business
interruption or casualty insurance policy in respect of a covered loss
thereunder or (ii) as a result of the taking of any assets of Company or any of
its Subsidiaries by any Person pursuant to the power of eminent domain,
condemnation, expropriation or otherwise, or pursuant to a sale of any such
assets to a purchaser with such power under threat of such a taking, in each
case net of any actual and reasonable documented costs incurred by Company or
such Subsidiary in connection with the adjustment or settlement of any claims of
Company or such Subsidiary in respect thereof and, in the case of any such
taking, net of (X) income Taxes reasonably estimated to be actually payable
within two years of the date of such taking as a result of any gain recognized
in connection therewith and (Y) payment of the outstanding principal amount of,
premium or penalty, if any, and interest on any Indebtedness (other than the
Junior Term Loans and the Loans) that is secured by a Lien on the assets taken
that is required to be repaid under the terms thereof as a result of such
taking.
"NET PROCEEDS AMOUNT" has the meaning set forth in subsection
2.4B(iii)(g).
"NEW BUILD CAPITAL EXPENDITURES" means Capital Expenditures for the
development and/or construction of theatres to be operated by Company and its
Subsidiaries (other than Capital Expenditures incurred in the ordinary course of
business for the maintenance or refurbishment of theatres).
"NON-US LENDER" has the meaning set forth in subsection 2.7B(iii)(a).
"NORTH AMERICAN SUBSIDIARY" means any Subsidiary of Company other than
a Foreign Subsidiary or an Off-Balance Sheet Subsidiary.
"NOTES" means one or more of (i) the US Tranche Term Notes, (ii) the CN
Tranche Term Notes, (iii) the US Tranche Revolving Notes and (iv) the CN Tranche
Revolving Notes, or any combination thereof.
"NOTICE OF BORROWING" means a notice substantially in the form of
Exhibit I annexed hereto delivered by Company or Canadian Borrower, as the case
may be, to the applicable Administrative Agent pursuant to subsection 2.1B with
respect to a proposed borrowing.
"NOTICE OF CONVERSION/CONTINUATION" means a notice substantially in the
form of Exhibit II annexed hereto delivered by Company or Canadian Borrower, as
the case may be, to the applicable Administrative Agent pursuant to subsection
2.2D with respect to a proposed conversion or continuation of the applicable
basis for determining the interest rate with respect to the Loans specified
therein.
25
"OAKTREE" means Oaktree Capital Management, LLC, as general partner
and/or investment manager of certain funds and accounts managed by it.
"OBLIGATIONS" means all obligations of every nature of each Loan Party
from time to time owed to Administrative Agents, Collateral Agent, Lenders or
any of them under the Priority Secured Loan Documents, whether for principal,
interest (including interest accruing on or after the occurrence of an
Insolvency Event), reimbursement of amounts drawn under Letters of Credit, fees,
expenses, indemnification or otherwise.
"OFF-BALANCE SHEET NEW BUILD CAPITAL EXPENDITURES" means New Build
Capital Expenditures made by an Off-Balance Sheet Subsidiary and financed by
equity contributions and/or Indebtedness (including Capital Leases) not included
on the consolidated balance sheet of Company and its Subsidiaries and not
guaranteed by Company or any of its Subsidiaries.
"OFF-BALANCE SHEET SUBSIDIARY" means any Subsidiary of Company (i) that
engages in no activities other than the financing and making of Off-Balance
Sheet New Build Capital Expenditures and operating theatres built with
Off-Balance Sheet New Build Capital Expenditures and (ii) no portion of the
Indebtedness or any other obligations (contingent or otherwise) of which is
guaranteed by Company or any other Subsidiary of Company, is recourse to or in
any way obligates Company or any other Subsidiary of Company, or subjects any
property or asset of Company or any other Subsidiary of Company to the
satisfaction thereof.
"OFFICERS' CERTIFICATE" means, as applied to any corporation, a
certificate executed on behalf of such corporation by its chairman of the board
(if an officer) or its president or one of its vice presidents and by its chief
financial officer, its treasurer or controller; provided that every Officers'
Certificate with respect to the compliance with a condition precedent to the
making of any Loans hereunder shall include (i) a statement that the officer or
officers making or giving such Officers' Certificate have read such condition
and any definitions or other provisions contained in this Agreement relating
thereto, (ii) a statement that, in the opinion of the signers, they have made or
have caused to be made such examination or investigation as is necessary to
enable them to express an informed opinion as to whether or not such condition
has been complied with, and (iii) a statement as to whether, in the opinion of
the signers, such condition has been complied with; and provided, further, that
with respect to any certificate required to be delivered pursuant to subsection
4.1, such certificate may be executed by any one such officer approved by US
Administrative Agent.
"ONEX" means Onex Corporation, an Ontario corporation.
"OPERATING LEASE" means, as applied to any Person, any lease
(including, without limitation, leases that may be terminated by the lessee at
any time) of any property (whether real, personal, immovable, movable or mixed)
that is not a Capital Lease other than any such lease under which that Person is
the lessor.
"PBGC" means the Pension Benefit Guaranty Corporation (or any successor
thereto).
"PENSION PLAN" means any Employee Benefit Plan, other than a
Multiemployer Plan, which is subject to Section 412 of the Internal Revenue Code
or Section 302 of ERISA.
26
"PERMITTED ACQUISITION" means an acquisition (whether pursuant to an
acquisition of stock, assets or otherwise) by Company or any of its Wholly-Owned
North American Subsidiaries from any Person of a business or an interest in a
business in which all of the following requirements are satisfied:
(i) such business is permitted by subsection 7.12;
(ii) immediately after giving effect to such acquisition no
Potential Event of Default or Event of Default shall have occurred and be
continuing or would result therefrom;
(iii) Company can demonstrate in form and substance
satisfactory to Administrative Agent immediately after giving effect to such
acquisition that Company is in compliance on a Pro Forma Basis with the
covenants set forth in Section 7 of this Agreement; and
(iv) immediately after giving effect to such acquisition, such
business or interest in a business (a) is 100% owned by Company or one of its
Wholly-Owned North American Subsidiaries and (b) does not include an Investment
in a Joint Venture or a non-Wholly-Owned Subsidiary.
"PERMITTED CURE SECURITIES" means (i) an equity security of Company (a)
having no mandatory redemption, repurchase, retirement, sinking fund or similar
requirements prior to August 31, 2008, (b) upon which all dividends, at the
election of Company, may be payable in additional shares of that equity security
and (c) the terms and conditions of which are otherwise satisfactory to
Administrative Agent or (ii) Subordinated Indebtedness of Company which shall
(a) have no mandatory redemption, principal payment, retirement, sinking fund or
similar requirement prior to ▇▇▇▇▇▇ ▇▇, ▇▇▇▇, (▇) permit, at the election of
Company, the payment of interest by the issuance of additional amounts of that
debt security, (c) be subordinated in right of payment to all other Indebtedness
of Company and its Subsidiaries that is designated as senior to such
Subordinated Indebtedness and (d) contain terms and conditions otherwise
satisfactory to Administrative Agent.
"PERMITTED ENCUMBRANCES" means the following types of Liens (other than
any such Lien imposed pursuant to Section 401(a)(29) or 412(n) of the Internal
Revenue Code or by ERISA):
(i) Liens for taxes, assessments or governmental charges or
claims the payment of which is not, at the time, required by subsection 6.3;
(ii) statutory Liens of landlords, statutory Liens of banks
and rights of set off, statutory Liens of carriers, warehousemen, mechanics and
materialmen, and other Liens imposed by law, in each case incurred in the
ordinary course of business for sums not yet delinquent or being contested in
good faith by appropriate proceedings, if (1) such reserve or other appropriate
provision, if any, as shall be required by GAAP shall have been made therefor
and (2) in the case of a Lien with respect to any portion of the Collateral,
such contest proceedings conclusively operate to stay the sale of any material
portion of the Collateral on account of such Lien;
27
(iii) Liens incurred or deposits made in the ordinary course
of business in connection with workers' compensation, unemployment insurance,
employment insurance and other types of social security, or to secure the
performance of tenders, statutory obligations, surety and appeal bonds, bids,
leases, government contracts, trade contracts, performance and return-of-money
bonds and other similar obligations (exclusive of obligations for the payment of
borrowed money), so long as no foreclosure, sale or similar proceedings have
been commenced with respect to any material portion of the Collateral on account
thereof;
(iv) any attachment or judgment Lien not constituting an Event
of Default under subsection 8.8;
(v) leases or subleases granted to others not interfering in
any material respect with the ordinary conduct of the business of Company or any
of its Subsidiaries;
(vi) easements, rights-of-way, restrictions, encroachments,
minor defects or irregularities in title, and other similar charges or
encumbrances not interfering in any material respect with the ordinary conduct
of the business of Company or any of its Subsidiaries;
(vii) any (a) interest or title of a lessor or sublessor under
any lease permitted under this Agreement, (b) restriction or encumbrance that
the interest or title of such lessor or sublessor may be subject to, or (c)
subordination of the interest of the lessee or sublessee under such lease to any
restriction or encumbrance referred to in the preceding clause (b);
(viii) Liens arising from filing UCC or other applicable
personal property financing statements relating solely to leases permitted by
this Agreement;
(ix) Liens in favor of customs and revenue authorities arising
as a matter of law to secure payment of customs duties in connection with the
importation of goods; and
(x) licenses of patents, trademarks and other intellectual
property rights granted by Company or any of its Subsidiaries in the ordinary
course of business and not interfering in any material respect with the ordinary
conduct of the business of Company or such Subsidiary.
"PERMITTED INVESTMENT" means a direct Investment by Company or a
Wholly-Owned North American Subsidiary of Company in a Joint Venture or
non-Wholly-Owned Subsidiary or Off-Balance Sheet Subsidiary, in each case which
is principally engaged in a business that Company and its Subsidiaries are
permitted to engage in under subsection 7.12. The value of any Permitted
Investment made by Company or a Wholly-Owned North American Subsidiary of
Company with an asset other than cash shall be equal to the fair market value of
such asset at the time such Permitted Investment is made, as determined in good
faith by the Board of Directors of Company or such Wholly-Owned North American
Subsidiary, as the case may be.
"PERSON" means and includes natural persons, corporations, limited
partnerships, general partnerships, limited liability companies, limited
liability partnerships, joint stock companies, Joint Ventures, associations,
companies, trusts, banks, trust companies, land trusts, business trusts or other
organizations, whether or not legal entities, and governments and agencies and
political subdivisions thereof.
28
"PLAN OF REORGANIZATION" means the First Amended Chapter 11 Plan of
Company and Subsidiary Debtors under Chapter 11 of the Bankruptcy Code dated
January 14, 2002.
"POST-DEFAULT ADVANCES SUBLIMIT" has the meaning assigned that term in
the DIP Credit Agreement.
"POST-CLOSING LETTER" means that certain post-closing letter agreement
of even date herewith among Company, Canadian Borrower, US Administrative Agent,
CN Administrative Agent and Term Loan Administrative Agent.
"POST-PETITION INCREMENTAL US SUBLIMIT" has the meaning assigned to
that term in the DIP Credit Agreement.
"POST-PETITION INCREMENTAL CANADIAN SUBLIMIT" has the meaning assigned
to that term in the DIP Credit Agreement.
"POTENTIAL EVENT OF DEFAULT" means a condition or event that, after
notice or lapse of time or both, would constitute an Event of Default.
"PPSA" means the Personal Property Security Act (Ontario) and any
regulations thereunder or any similar personal property security legislation in
any other Canadian jurisdiction, as amended from time to time.
"PRE-PETITION CREDIT AGREEMENT" means that certain Credit Agreement
dated as of May 14, 1998, as amended, among Company, the Pre-Petition Lenders,
BTCo, as administrative agent and as co-syndication agent, Bank of America,
N.A., as a co-syndication agent, The Bank of
New York, as a co-syndication
agent, and Credit Suisse First Boston, as a co- syndication agent.
"PRE-PETITION LENDERS" means the parties identified as lenders and
indemnifying lenders under the Pre-Petition Credit Agreement in their capacities
as lenders under the Pre-Petition Credit Agreement, together with their
successors and assigns.
"PRIORITY SECURED LOAN DOCUMENTS" means this Agreement, the Notes, the
Letters of Credit (and any applications for, or reimbursement agreements or
other documents or certificates executed by Company in favor of an Issuing
Lender relating to the Letters of Credit), the Guaranties, the Intercreditor
Agreement, the Post-Closing Letter and the Collateral Documents.
"PRIVATE NON-SPONSOR EQUITY OFFERING" means any offering of equity
securities of Company or any of its Subsidiaries not registered under the
Securities Act (except offerings made in reliance on Rule 144A thereunder and
subject to exchange rights for registered securities) and placed entirely with
Persons other than the Sponsors and their respective Sponsor Affiliates.
"PRIVATE SPONSOR EQUITY OFFERING" means any offering of equity
securities of Company or any of its Subsidiaries not registered under the
Securities Act and placed entirely with the Sponsors or their respective Sponsor
Affiliates.
29
"PRO FORMA BASIS" means, as of any date of determination, the
compliance of Company with the Financial Performance Covenants as of the last
day of the four Fiscal Quarter period most recently ended prior to such date of
determination for which the relevant financial information is available (the
"COMPLIANCE PERIOD"), after giving effect on a pro forma basis to any Permitted
Acquisitions with a purchase price in excess of US$5,000,000 individually or in
the aggregate made during such Compliance Period and any dispositions or theatre
closings with EBITDA during the four Fiscal Quarters immediately preceding the
date of such disposition or theatre closing in excess of US$2,000,000
individually or US$5,000,000 in the aggregate made during such Compliance
Period, other than sales of inventory in the ordinary course of business and
dispositions of obsolete equipment during such Compliance Period, on the
following basis:
(i) any Indebtedness incurred or assumed by Company or any of
its Wholly-Owned Subsidiaries in connection with such Permitted Acquisitions and
any Indebtedness of Company or any of its Wholly-Owned Subsidiaries repaid in
connection with such Permitted Acquisitions, dispositions or theatre closings
shall be deemed to have been incurred or repaid, respectively, as of the first
day of the Compliance Period;
(ii) if such Indebtedness incurred or assumed by Company or
any of its Wholly-Owned Subsidiaries in connection with such Permitted
Acquisitions has a floating or formula rate, then the rate of interest for such
Indebtedness for the applicable period shall be computed as if the rate in
effect for such Indebtedness on the relevant measurement date had been the
applicable rate for the entire applicable period;
(iii) income statement items (whether positive or negative)
attributable to the property or business acquired, disposed of or closed in such
Permitted Acquisitions, dispositions or theatre closings shall be included as if
such acquisitions, dispositions or theatre closings took place on the first day
of such Compliance Period on a pro forma basis; and
(iv) any historical, extraordinary, non-recurring costs or
expenses or other verifiable costs or expenses that will not continue after the
acquisition, disposition or closing date may be eliminated and other expenses
and cost reductions may be reflected on a basis consistent with Regulation S-X
promulgated by the Securities and Exchange Commission; provided that all pro
forma adjustments shall be subject to the reasonable approval of the
Administrative Agent.
"PRO RATA SHARE" means (i) with respect to all payments, computations
and other matters relating to the US Tranche Term Loan Commitment or the US
Tranche Term Loan of any US Lender, the percentage obtained by dividing (x) the
US Tranche Term Loan Exposure of that US Lender by (y) the aggregate US Tranche
Term Loan Exposure of all US Lenders, (ii) with respect to all payments,
computations and other matters relating to the CN Tranche Term Loan Commitment
or the CN Tranche Term Loan of any US Lender, the percentage obtained by
dividing (x) the CN Tranche Term Loan Exposure of that US Lender by (y) the
aggregate CN Tranche Term Loan Exposure of all US Lenders, (iii) with respect to
all payments, computations and other matters relating to the US Tranche
Revolving Loan Commitment or the US Tranche Revolving Loans of any US Lender or
any Letters of Credit issued (in the case of an Issuing Lender) or
participations therein purchased by any US Lender, the percentage obtained by
dividing (x) the US Tranche Revolving Loan Exposure of that US Lender by (y) the
aggregate
30
US Tranche Revolving Loan Exposure of all US Lenders, (iv) with respect to all
payments, computations and other matters relating to the CN Tranche Revolving
Loan Commitment or the CN Tranche Revolving Loans of any CN Lender, the
percentage obtained by dividing (x) the CN Tranche Revolving Loan Exposure of
that CN Lender by (y) the aggregate CN Tranche Revolving Loan Exposure of all CN
Lenders and (v) for all other purposes with respect to each Lender, the
percentage obtained by dividing (x) the sum of the US Tranche Term Loan Exposure
of that Lender plus the CN Term Loan Exposure of that Lender plus the US Tranche
Revolving Loan Exposure of that Lender plus the CN Tranche Revolving Loan
Exposure of that Lender by (y) the sum of the aggregate US Tranche Term Loan
Exposure of all Lenders plus the aggregate CN Tranche Term Loan Exposure of all
Lenders plus the aggregate US Revolving Loan Exposure of all Lenders plus the
aggregate CN Tranche Revolving Loan Exposure of all Lenders, in any such case as
the applicable percentage may be adjusted by assignments permitted pursuant to
subsection 10.1. The initial Pro Rata Share of each Lender for purposes of each
of clauses (i), (ii), (iii), (iv) and (v) of the preceding sentence is set forth
opposite the name of that Lender in Schedule 2.1 annexed hereto; provided that
Schedule 2.1 shall be amended and each Lender's Pro Rata Share for purposes of
each of clauses (i), (ii), (iii), (iv) and (v) of the preceding sentence shall
be adjusted from time to time to give effect to any assignments pursuant to
subsection 10.1B.
"PROCEEDINGS" has the meaning assigned to that term in subsection
6.1(x).
"PUBLIC EQUITY OFFERINGS" means an Initial Public Offering and any
other offering of equity securities of Company or any of its Subsidiaries
registered under the Securities Act (except offerings on Form S-8).
"PUBLIC EQUITY PREPAYMENT AMOUNT" has the meaning assigned in
subsection 2.4B(iii)(d)(1).
"PURCHASE MONEY MORTGAGE" has the meaning assigned to that term in
subsection 7.2A(iii).
"PURCHASE MONEY SECURITY INTEREST" has the meaning assigned to that
term in subsection 7.2A(iii).
"REAL PROPERTY ASSET" means, at any time of determination, any interest
then owned by Company or any Subsidiary Guarantor in any real property.
"RECORDED LEASEHOLD INTEREST" means a Leasehold Property with respect
to which a Record Document (as hereinafter defined) has been recorded in all
places necessary or desirable, in Collateral Agent's reasonable judgment, to
give constructive notice of such Leasehold Property to third-party purchasers
and encumbrancers of the affected real property. For purposes of this
definition, the term "Record Document" means, with respect to any Leasehold
Property, (a) the lease or notice thereof evidencing such Leasehold Property or
a memorandum thereof, executed and acknowledged by the owner of the affected
real property, as lessor, or (b) if such Leasehold Property was acquired or
subleased from the holder of a Recorded Leasehold Interest, the applicable
assignment or sublease document, executed and acknowledged by such holder, or
31
notice thereof, in each case in form sufficient to give such constructive notice
upon recordation and otherwise in form reasonably satisfactory to Collateral
Agent.
"REGISTER" means (i) with respect to US Administrative Agent, the US
Register and, (ii) with respect to CN Administrative Agent, the CN Register; and
"REGISTERS" means the US Register and the CN Register, collectively.
"REGULATION D" means Regulation D of the Board of Governors of the
Federal Reserve System, as in effect from time to time.
"REIMBURSEMENT DATE" has the meaning assigned to that term in
subsection 3.3B.
"RELEASE" means any release, spill, emission, leaking, pumping,
pouring, injection, escaping, deposit, disposal, discharge, dispersal, dumping,
leaching or migration of Hazardous Materials into the indoor or outdoor
environment (including, without limitation, the abandonment or disposal of any
barrels, containers or other closed receptacles containing any Hazardous
Materials), or into or out of any Facility, including the movement of any
Hazardous Material through the air, soil, surface water, groundwater or
property.
"REPLACEMENT LENDER" has the meaning set forth in subsection
10.1B(iii).
"REQUEST FOR ISSUANCE" means a request substantially in the form of
Exhibit III annexed hereto.
"REQUISITE CLASS LENDERS" means, at any time of determination, (i) for
Lenders holding Term Loans, Lenders holding more than 50% of the aggregate Term
Loan Exposure of all Lenders; and (ii) for Lenders holding Revolving Loans,
Lenders holding more than 50% of the aggregate Revolving Loan Exposure of all
Lenders; provided that, so long as Sponsors and Sponsor Affiliates own or manage
at least 35% of Company's total voting securities, all Loans owned or managed by
Sponsors and Sponsor Affiliates shall be disregarded for purposes of determining
Requisite Class Lenders except for any amendment, waiver, consent, supplement or
other modification to this Agreement that would relatively diminish payment
rights of the Sponsors or Sponsor Affiliates or the Loans owned by them from
other Lenders holding the same Class of Loans.
"REQUISITE LENDERS" means Lenders having or holding a majority of the
sum of the aggregate Term Loan Exposure of all Lenders plus the aggregate
Revolving Loan Exposure of all Lenders.
"RESPONSIBLE OFFICER" means the chief executive officer, president,
vice president, chief financial officer, principal accounting officer or
treasurer of Company or any of its Subsidiaries.
"RESTRICTED JUNIOR PAYMENT" means (i) any dividend or other
distribution, direct or indirect, on account of any shares of any class of stock
of Company now or hereafter outstanding, except a dividend payable solely in
shares of that class of stock to the holders of that class, (ii) any redemption,
retirement, sinking fund or similar payment, purchase or other acquisition for
value, direct or indirect, of any shares of any class of stock of Company now or
hereafter outstanding, (iii) any payment made to retire, or to obtain the
surrender of, any
32
outstanding warrants, options or other rights to acquire shares of any class of
stock of Company now or hereafter outstanding, and (iv) any payment or
prepayment of principal of, premium, if any, or interest on, or redemption,
purchase, retirement, defeasance (including in-substance or legal defeasance),
sinking fund or similar payment with respect to, any Subordinated Indebtedness.
"RESTRUCTURED TERM LOANS" means loans made as restructured term loans
pursuant to subsection 2.1A(i) of the Term Loan Agreement.
"RETAINED PROCEEDS AVAILABLE FOR CAPEX" means, for any Fiscal Year of
Company, the sum of (x) the amount of Net Asset Sale Proceeds realized
subsequent to the Closing Date in respect of all Minor Asset Sales (other than
Deemed Major Asset Sale Proceeds), Net Equity Securities Proceeds from Public
Equity Offerings and Net Equity Securities Proceeds from Private Non-Sponsor
Equity Offerings received during such Fiscal Year or retained during the
immediately preceding Fiscal Year and not required to be applied as mandatory
prepayments of Loans and/or reductions in the Commitments pursuant to
subsections 2.4B(iii)(a)(1), 2.4B(iii)(d)(1) and 2.4B(iii)(d)(2), respectively,
(y) the amount of Net Equity Securities Proceeds from Private Sponsor Equity
Offerings during such Fiscal Year plus (z) the amount of Excess Cash Flow for
the immediately preceding Fiscal Year not required to be applied as a mandatory
prepayment of the Loans pursuant to subsection 2.4B(iii)(e); provided that Net
Asset Sale Proceeds from Asset Sales of the assets listed on Schedule 1.1C shall
not be included in Retained Proceeds Available for CapEx to the extent such Net
Asset Sale Proceeds do not exceed the West 34th Loan Amount.
"REUTERS SCREEN CDOR PAGE" means the display designated as page CDOR on
the Reuters Monitor Money Rates Service or other page as may, from time to time,
replace that page on that service for the purpose of displaying bid quotations
for bankers' acceptances accepted by leading Canadian banks.
"REVOLVING LOAN" or "REVOLVING LOANS" means one or more of the US
Tranche Revolving Loans or the CN Tranche Revolving Loans or any combination
thereof.
"REVOLVING LOAN COMMITMENT" means, with respect to any Lender, that
Lender's US Tranche Revolving Loan Commitment and CN Tranche Revolving Loan
Commitment, and "REVOLVING LOAN COMMITMENTS" means such commitments of all
Lenders in the aggregate.
"REVOLVING LOAN EXPOSURE" means the US Tranche Revolving Loan Exposure
and the CN Tranche Revolving Loan Exposure.
"S&P" means Standard & Poor's Ratings Services.
"SCHEDULE I LENDER" means any CN Lender named on Schedule I to the Bank
Act (Canada).
"SCHEDULE I REFERENCE BANKS" means at least one but no more than two
banks named on Schedule I to the Bank Act (Canada) as agreed by the CN
Administrative Agent and Canadian Borrower.
33
"SCHEDULE II LENDER" means any CN Lender named on Schedule II to the
Bank Act (Canada).
"SCHEDULE III LENDER" means any CN Lender named on Schedule III to the
Bank Act (Canada).
"SCHEDULED 2003 NEW BUILD CAPITAL EXPENDITURES" means New Build Capital
Expenditures during the Fiscal Year ending February 28, 2003 relating to the new
theatres listed on, and in amounts not exceeding the amounts set forth on,
Schedule 7.13B.
"SEC" means the Securities and Exchange Commission.
"SEC REPORT" means any annual, quarterly and current report filed by
Company with the SEC under Section 13(a) of the Exchange Act and proxy
statements mailed by Company to its shareholders.
"SECOND PRIORITY" means, with respect to any Lien purported to be
created in any Collateral pursuant to any Collateral Document, that such Lien
(or distribution priority relating to such Lien) has priority over any other
Liens (or distribution priority) on such Collateral, other than Liens permitted
under subsection 7.2A(i), (iii), (v), (vi) and (ix).
"SECURITIES" means any stock, shares, partnership interests, voting
trust certificates, certificates of interest or participation in any
profit-sharing agreement or arrangement, options, warrants, bonds, debentures,
notes, or other evidences of indebtedness, secured or unsecured, convertible,
subordinated or otherwise, or in general any instruments commonly known as
"securities" or any certificates of interest, shares or participations in
temporary or interim certificates for the purchase or acquisition of, or any
right to subscribe to, purchase or acquire, any of the foregoing.
"SECURITIES ACT" means the Securities Act of 1933, as amended from time
to time, and any successor statute.
"SECURITY AGREEMENT" means the Security Agreement executed and
delivered by Company, Canadian Borrower and the Subsidiary Guarantors on the
Closing Date, substantially in the form of Exhibit XV annexed hereto, as such
Security Agreement may be amended, restated, supplemented or otherwise modified
from time to time.
"SIGNIFICANT SUBSIDIARY" has the meaning set forth in Rule 1-02(w) of
Regulation S-X under the Exchange Act, substituting 5 percent whenever 10
percent appears in such Rule.
"SOLVENT" means, with respect to any Person, that as of the date of
determination both (A) (i) the then fair saleable value of the property of such
Person is (y) greater than the total amount of liabilities (including contingent
liabilities) of such Person and (z) not less than the amount that will be
required to pay the probable liabilities on such Person's then existing debts as
they become absolute and matured considering all financing alternatives and
potential asset sales reasonably available to such Person; (ii) such Person's
capital is not unreasonably small in relation to its business or any
contemplated or undertaken transaction; and (iii) such Person does not intend to
incur, or believe (nor should it reasonably believe) that it will incur, debts
beyond
34
its ability to pay such debts as they become due; and (B) such Person is
"solvent" within the meaning given that term and similar terms under applicable
laws relating to fraudulent transfers and conveyances. For purposes of this
definition, the amount of any contingent liability at any time shall be computed
as the amount that, in light of all of the facts and circumstances existing at
such time, represents the amount that can reasonably be expected to become an
actual or matured liability.
"SPECIFIED PRIORITY SECURED LOAN DEFAULT" has the meaning assigned to
the term "First Lien Debt Default" in the Intercreditor Agreement.
"SPONSORS" means Onex and Oaktree.
"SPONSOR AFFILIATES" means Affiliates of the Sponsors and any Person
that would be an Affiliated Fund of the Sponsors if they were Lenders.
"SPONSOR CONVERSION AMOUNT" has the meaning assigned to that term in
the Term Loan Agreement.
"STANDBY LETTER OF CREDIT" means any standby letter of credit or
similar instrument issued for the purpose of supporting (i) Indebtedness of
Company or any of its Wholly-Owned Subsidiaries in respect of industrial revenue
or development bonds or financings, (ii) workers' compensation liabilities of
Company or any of its Wholly-Owned Subsidiaries, (iii) the obligations of third
party insurers of Company or any of its Wholly-Owned Subsidiaries arising by
virtue of the laws of any jurisdiction requiring third party insurers, (iv)
obligations with respect to Capital Leases or Operating Leases of Company or any
of its Wholly-Owned Subsidiaries, and (v) performance, payment, deposit or
surety obligations of Company or any of its Wholly-Owned Subsidiaries, in any
case if required by law or governmental rule or regulation or in accordance with
custom and practice in the industry.
"SUBORDINATED INDEBTEDNESS" means Indebtedness of Company (other than
Indebtedness to any of its Subsidiaries) that is subordinated in right of
payment to the Obligations pursuant to documentation containing maturities,
amortization schedules, covenants, defaults, remedies, subordination provisions
and other material terms in form and substance satisfactory to US Administrative
Agent.
"SUBSIDIARY" means, with respect to any Person, any corporation,
partnership, limited liability company, association, joint venture or other
business entity of which more than 50% of the total voting power of shares of
stock or other ownership interests entitled (without regard to the occurrence of
any contingency) to vote in the election of the Person or Persons (whether
directors, managers, trustees or other Persons performing similar functions)
having the power to direct or cause the direction of the management and policies
thereof is at the time owned or controlled, directly or indirectly, by that
Person or one or more of the other Subsidiaries of that Person or a combination
thereof.
"SUBSIDIARY DEBTORS" means the Subsidiaries of Company that are the
subject of the Chapter 11 Cases.
35
"SUBSIDIARY GUARANTOR" means, at any time, any of Company's
Wholly-Owned North American Subsidiaries that are then a party to a Subsidiary
Guaranty.
"SUBSIDIARY GUARANTY" means the Subsidiary Guaranty executed and
delivered by Company's Wholly-Owned North American Subsidiaries on the Closing
Date and to be executed and delivered by Company's Wholly-Owned North American
Subsidiaries from time to time thereafter in accordance with subsection 6.9,
substantially in the form of Exhibit XVI annexed hereto, as such Subsidiary
Guaranty may be amended, supplemented or otherwise modified from time to time.
"TAX" or "TAXES" means any present or future tax, levy, impost, duty,
charge, fee, deduction or withholding of any nature and whatever called,
including interest, penalties, additions to tax and similar liabilities with
respect thereto, by whomsoever, on whomsoever and wherever imposed, levied,
collected, withheld or assessed.
"TERM LOAN" or "TERM LOANS" means one or more of the US Tranche Term
Loans or the CN Tranche Term Loans or any combination thereof.
"TERM LOAN ADMINISTRATIVE AGENT" has the meaning assigned to
"Administrative Agent" in the Term Loan Agreement.
"TERM LOAN AGREEMENT" means that certain Term Loan Agreement dated as
of March 21, 2002 among Company, the Term Loan Lenders and BTCo, as
administrative agent.
"TERM LOAN COMMITMENT" means, with respect to any Lender, that Lender's
US Tranche Term Loan Commitment and CN Tranche Term Loan Commitment, and "Term
Loan Commitments" means such commitments of all Lenders in the aggregate.
"TERM LOAN EXPOSURE" means, with respect to any Lender as of any date
of determination, that Lender's US Tranche Term Loan Exposure and that Lender's
CN Tranche Term Loan Exposure.
"TERM LOAN LENDERS" means the parties identified as lenders under the
Term Loan Agreement in their capacities as lenders under the Term Loan
Agreement.
"TERM LOAN TERMINATION DATE" means the first Business Day after the
fifth anniversary of the Closing Date, but in no event later than March 31,
2007.
"THIRD PRIORITY" means, with respect to any Lien purported to be
created on any Collateral, that such Lien (or any distribution priority thereof)
has priority over any other Liens (or distribution priority) on such Collateral,
other than Liens permitted under subsection 7.2A(i), (iii), (v), (vi) and (ix)
and Second Priority Liens.
"TOTAL UTILIZATION OF CN TRANCHE REVOLVING LOAN COMMITMENTS" means, as
of any date of determination, the aggregate principal amount of all outstanding
CN Tranche Revolving Loans.
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"TOTAL UTILIZATION OF US TRANCHE REVOLVING LOAN COMMITMENTS" means, as
of any date of determination, the sum of (i) the aggregate principal amount of
all outstanding US Tranche Revolving Loans plus (ii) the Letter of Credit Usage.
"US ADMINISTRATIVE AGENT" has the meaning assigned to that term in the
introduction to this Agreement and also means and includes any successor US
Administrative Agent appointed pursuant to subsection 9.5.
"US DOLLARS" and the sign "US$" mean the lawful money of the United
States of America.
"US LENDER" means the persons identified as "US Lenders" and listed on
the signature pages of this Agreement, together with their successors and
permitted assigns pursuant to subsection 10.1; provided that the term "US
Lenders" when used in the context of a particular Commitment, shall mean US
Lenders having that Commitment.
"US LOANS" means the Loans made by US Lenders to Company pursuant to
subsections 2.1(A)(i) and 2.1(A)(iii).
"US PRIME RATE" means the rate of interest per annum publicly announced
from time to time by BTCo as its prime commercial lending rate in effect at its
principal office in
New York City. The US Prime Rate is a reference rate and
does not necessarily represent the lowest or best rate actually charged to any
customer. BTCo or any other Lender may make commercial loans or other loans at
rates of interest at, above or below the US Prime Rate.
"US REGISTER" means, with respect to US Administrative Agent, a
register for recordation of the names and addresses of US Lenders and the
Commitments and Loans of each US Lender from time to time, maintained at its
address referred to in subsection 10.8.
"US TRANCHE REVOLVING LOAN COMMITMENT" means the Commitment of a Lender
to make a Loan to Company pursuant to subsection 2.1A(iii), and "US TRANCHE
REVOLVING LOAN COMMITMENTS" means such commitments of all Lenders in the
aggregate.
"US TRANCHE REVOLVING LOAN EXPOSURE" means, with respect to any Lender
as of any date of determination (i) prior to the termination of the US Tranche
Revolving Loan Commitments, that Lender's US Tranche Revolving Loan Commitment
and (ii) after the termination of the US Tranche Revolving Loan Commitments, the
sum of (a) the aggregate outstanding principal amount of the US Tranche
Revolving Loans of that Lender plus (b) in the event that Lender is an Issuing
Lender, the aggregate Letter of Credit Usage in respect of all Letters of Credit
issued by that Issuing Lender (in each case net of any participations purchased
by other Lenders in such Letters of Credit or any unreimbursed drawings
thereunder) plus (c) the aggregate amount, without duplication, of all
participations purchased by that Lender in any outstanding Letters of Credit or
any unreimbursed drawings under any Letter of Credit.
"US TRANCHE REVOLVING LOANS" means the Loans made by Lenders to Company
pursuant to subsection 2.1A(iii).
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"US TRANCHE REVOLVING NOTE" means the promissory notes of Company
issued pursuant to subsection 2.1E(i)(b), and any promissory notes issued by
Company pursuant to the last sentence of subsection 10.1B(i) in connection with
assignments of the US Tranche Revolving Loans Commitments or US Tranche
Revolving Loans of any Lender, in each case substantially in the form of Exhibit
VI annexed hereto, as they may be amended, restated, supplemented or otherwise
modified from time to time.
"US TRANCHE TERM LOAN COMMITMENT" means the commitment of a Lender to
make a Loan to Company pursuant to subsection 2.1A(i), and "US TRANCHE TERM LOAN
COMMITMENTS" means such commitments of all Lenders in the aggregate.
"US TRANCHE TERM LOAN EXPOSURE" means, with respect to any Lender as of
any date of determination, (i) prior to the funding of the US Tranche Term Loans
on the Closing Date, that Lender's US Tranche Term Loan Commitment and (ii)
after the funding of the US Tranche Term Loans on the Closing Date, the
outstanding principal amount of the US Tranche Term Loan of that Lender.
"US TRANCHE TERM LOANS" means the Loans made by Lenders to Company
pursuant to subsection 2.1A(i).
"US TRANCHE TERM NOTE" means the promissory notes of Company issued
pursuant to subsection 2.1E(i)(a), and any promissory notes issued by Company
pursuant to the last sentence of subsection 10.1B(i) in connection with
assignments of the US Tranche Term Loans Commitments or US Tranche Term Loans of
any Lender, in each case substantially in the form of Exhibit IV annexed hereto,
as they may be amended, restated, supplemented or otherwise modified from time
to time.
"WEST ▇▇▇▇ ▇▇▇▇▇▇ LOAN AGREEMENT" has the meaning assigned to that term
in the DIP Credit Agreement.
"WEST 34TH STREET LOAN AMOUNT" means the amount of Indebtedness
outstanding under the West ▇▇▇▇ ▇▇▇▇▇▇ Loan Agreement and ▇▇▇▇ ▇▇▇▇ ▇▇▇▇▇▇ Note
at 11:59 p.m. on the day immediately preceding the Closing Date.
"▇▇▇▇ ▇▇▇▇ ▇▇▇▇▇▇ NOTE" has the meaning assigned to that term in the
DIP Credit Agreement.
"▇▇▇▇ ▇▇▇▇ ▇▇▇▇▇▇ PROJECT" has the meaning assigned to that term in the
DIP Credit Agreement.
"WHOLLY-OWNED" means, with respect to any Subsidiary of any Person,
that all of the capital stock or other equity interests, as the case may be, in
such Subsidiary (other than directors' or nominees' qualifying shares to the
extent such qualifying shares are required by applicable law) are owned directly
or indirectly by such Person.
"WHOLLY-OWNED EBITDA" means, for any period, the sum of the amounts for
such period of EBITDA of Company and its Subsidiaries (other than Off-Balance
Sheet Subsidiaries); provided that there shall be excluded (i) EBITDA and/or the
income (or loss) of
38
any Person in which any other Person (other than Company or any of its
Wholly-Owned Subsidiaries) has a joint interest, except to the extent of the
amount of dividends or other distributions actually paid to Company or any of
its Wholly-Owned Subsidiaries by such Person during such period, (ii) EBITDA
and/or the income (or loss) of any Person accrued prior to the date it becomes a
Wholly- Owned Subsidiary of Company or is merged into or consolidated with
Company or any of its Wholly-Owned Subsidiaries or that Person's assets are
acquired by Company or any of its Wholly-Owned Subsidiaries, and (iii) EBITDA
and/or the income of any Subsidiary of Company to the extent that the
declaration or payment of dividends or similar distributions by that Subsidiary
of that income is not at the time permitted by operation of the terms of its
charter or any agreement, instrument, judgment, decree, order, statute, rule or
governmental regulation applicable to that Subsidiary.
"WHOLLY-OWNED EBITDAR" means, for any period, the sum of the amounts
for such period of (a) Wholly-Owned EBITDA plus (b) Wholly-Owned Rent Expense.
"WHOLLY-OWNED RENT EXPENSE" means, for any period, the aggregate amount
of all rents paid or payable by Company and its Subsidiaries on a consolidated
basis (and not included in Interest Expense) during that period under all
Capital Leases and Operating Leases to which Company or any of its Subsidiaries
is a party as lessee excluding, however, an amount equal to the amount of all
rents paid or payable by any non-Wholly-Owned Subsidiary of Company or any
Off-Balance Sheet Subsidiaries (to the extent otherwise included in the
aggregate amount of all rents paid or payable by Company and its Subsidiaries)
but including, however, an amount equal to the aggregate maximum liability of
Company and its Wholly-Owned Subsidiaries (other than Off-Balance Sheet
Subsidiaries) for such period in respect of Contingent Obligations of Company or
such Wholly-Owned Subsidiary in respect of rent paid under Operating Leases of
any non-Wholly-Owned Subsidiary of Company or any Joint Venture of Company or
any of its Subsidiaries or any Off-Balance Sheet Subsidiary (other than
Contingent Obligations of Company existing on the Closing Date in respect of
rent paid under the Operating Leases set forth on Schedule 1.1W). For the
avoidance of doubt, amortization of landlord allowances received by Company and
its Wholly-Owned Subsidiaries in connection with leased properties shall not be
counted as reductions of Wholly-Owned Rent Expense to the extent such landlord
allowances are counted as reductions of Capital Expenditures.
"WHOLLY-OWNED TOTAL DEBT" means, as at any date of determination, the
aggregate stated balance sheet amount of all Indebtedness of Company and its
Wholly-Owned Subsidiaries (other than Off-Balance Sheet Subsidiaries) less cash
of Company and its Wholly-Owned Subsidiaries (other than Off-Balance Sheet
Subsidiaries), all as determined on a consolidated basis in accordance with
GAAP, plus the aggregate maximum liability of Company and its Wholly-Owned
Subsidiaries (other than Off-Balance Sheet Subsidiaries) in respect of
Contingent Obligations in respect of any Indebtedness of any Joint Venture of
Company or any of its Subsidiaries or any non-Wholly-Owned Subsidiary of Company
or any of its Subsidiaries (other than Contingent Obligations of Company
existing on the Closing Date in respect of the Indebtedness set forth on
Schedule 1.1WH) or any Off-Balance Sheet Subsidiary.
"WHOLLY-OWNED TOTAL DEBT INTEREST EXPENSE" means, for any period, total
Interest Expense of Company and its Subsidiaries with respect to Wholly-Owned
Total Debt.
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1.2 ACCOUNTING TERMS; UTILIZATION OF GAAP FOR PURPOSES OF CALCULATIONS
UNDER AGREEMENT.
Except as otherwise expressly provided in this Agreement, all
accounting terms not otherwise defined herein shall have the meanings assigned
to them in conformity with GAAP. Financial statements and other information
required to be delivered by Company to Lenders pursuant to clauses (i), (ii),
(iii) and (xiii) of subsection 6.1 shall be prepared in accordance with GAAP as
in effect at the time of such preparation (and delivered together with the
reconciliation statements provided for in subsection 6.1(v)). Calculations in
connection with the definitions, covenants and other provisions of this
Agreement shall utilize accounting principles and policies in conformity with
those used to prepare the financial statements referred to in subsection 5.3.
Whenever this Agreement refers to the calculation of amounts in a currency other
than US Dollars, the maintenance of any Indebtedness, Lien, Contingent
Obligation or Investment in such currency shall be permitted, regardless of
subsequent fluctuations in exchange rates, if such Indebtedness, Lien,
Contingent Obligation or Investment was permitted under this Agreement at the
date on which it was incurred.
1.3 OTHER DEFINITIONAL PROVISIONS.
References to "Sections" and "subsections" shall be to Sections and
subsections, respectively, of this Agreement unless otherwise specifically
provided. Any of the terms defined in subsection 1.1 may, unless the context
otherwise requires, be used in the singular or the plural, depending on the
reference. An Event of Default shall "continue" or be "continuing" until such
Event of Default has been waived in accordance with subsection 10.6 hereof or
cured as provided herein.
SECTION 2. AMOUNTS AND TERMS OF COMMITMENTS AND LOANS
2.1 COMMITMENTS; MAKING OF LOANS; THE REGISTER; NOTES.
A. COMMITMENTS. Subject to the terms and conditions of this
Agreement and in reliance upon the representations and warranties of each
Borrower herein set forth and subject to the limitations set forth below with
respect to the maximum amount of Loans permitted to be outstanding from time to
time, each Lender hereby severally agrees to make the Loans described in
subsections 2.1A(i), 2.1A(ii), 2.1A(iii) and 2.1A(iv), as applicable; provided
that each Lender's Commitments described in each such subsection -------- shall
expire immediately and without further action on March 31, 2002 if (i) the
Restructured Term Loans are not made on or before that date and (ii) the Plan of
Reorganization and the CCAA Plan of Arrangement have not become simultaneously
effective in accordance with their respective terms on or before that date.
(i) US Tranche Term Loans. Each US Lender having a US Tranche
Term Loan Commitment severally agrees to lend to Company on the
Closing Date an amount not exceeding its Pro Rata Share of the
aggregate amount of the US Tranche Term Loan Commitments to be used
for the purposes identified in subsection 2.5A. The amount of each US
Lender's US Tranche Term Loan Commitment is set forth opposite its
name on Schedule 2.1 and the aggregate amount of the US Tranche Term
Loan Commitments is US$35,000,000; provided that the US Tranche Term
Loan
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Commitments of US Lenders shall be adjusted to give effect to any
assignments of the US Tranche Term Loan Commitments pursuant to
subsection 10.1B. Amounts borrowed under this subsection 2.1A(i) and
subsequently repaid or prepaid may not be reborrowed. The US Tranche
Term Loans shall be made as a single drawing on the Closing Date. US
Tranche Term Loans and all other amounts owed hereunder with respect to
the US Tranche Term Loan shall be repaid in full no later than the Term
Loan Termination Date.
(ii) CN Tranche Term Loans. Each US Lender having a CN Tranche
Term Loan Commitment severally agrees to lend to Canadian Borrower on
the Closing Date an amount not exceeding its Pro Rata Share of the
aggregate amount of the CN Tranche Term Loan Commitments to be used for
the purposes identified in subsection 2.5B. The amount of each US
Lender's CN Tranche Term Loan Commitment is set forth opposite its name
on Schedule 2.1 and the aggregate amount of the CN Tranche Term Loan
Commitments is US$20,000,000; provided that the CN Tranche Term Loan
Commitments of US Lenders shall be adjusted to give effect to any
assignments of the CN Tranche Term Loan Commitments pursuant to
subsection 10.1B. Amounts borrowed under this subsection 2.1A(ii) and
subsequently repaid or prepaid may not be reborrowed. The CN Tranche
Term Loans shall be made as a single drawing on the Closing Date. CN
Tranche Term Loans and all other amounts owed hereunder with respect to
the CN Tranche Term Loan shall be repaid in full no later than the Term
Loan Termination Date.
(iii) US Tranche Revolving Loans. Each US Lender having a US
Tranche Revolving Loan Commitment severally agrees to lend to Company
from time to time during the period from the Closing Date to but
excluding the Commitment Termination Date an aggregate amount not
exceeding its Pro Rata Share of the aggregate amount of the US Tranche
Revolving Loan Commitments then in effect to be used for the purposes
identified in subsection 2.5A. The original amount of each US Lender's
US Tranche Revolving Loan Commitment is set forth opposite its name on
Schedule 2.1 annexed hereto, and the aggregate original amount of the
US Tranche Revolving Loan Commitments is US$75,000,000; provided that
the US Tranche Revolving Loan Commitments of US Lenders shall be
adjusted to give effect to any assignments of the US Tranche Revolving
Loan Commitments pursuant to subsection 10.1B; provided, further, that
the amount of the US Tranche Revolving Loan Commitments shall be
reduced from time to time by the amount of any reductions thereto made
pursuant to subsection 2.4. Each US Lender's US Tranche Revolving Loan
Commitment shall expire on the Commitment Termination Date, and all US
Tranche Revolving Loans and all other amounts owed hereunder with
respect to the US Tranche Revolving Loans and the US Tranche Revolving
Loan Commitments shall be paid in full no later than the Commitment
Termination Date. Amounts borrowed under this subsection 2.1A(iii) may
be repaid and reborrowed to but excluding the Commitment Termination
Date.
Notwithstanding anything contained in this Agreement to the
contrary, the US Tranche Revolving Loans and the US Tranche Revolving
Loan Commitments shall be subject to the limitation that in no event
shall the Total Utilization of US Tranche Revolving Loan Commitments at
any time exceed the US Tranche Revolving Loan Commitments then in
effect.
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(iv) CN Tranche Revolving Loans. Each CN Lender having a CN
Tranche Revolving Loan Commitment severally agrees to lend to Canadian
Borrower from time to time during the period from the Closing Date to
but excluding the Commitment Termination Date an aggregate amount not
exceeding its Pro Rata Share of the aggregate amount of the CN Tranche
Revolving Loan Commitments then in effect to be used for the purposes
identified in subsection 2.5B. The original amount of each CN Lender's
CN Tranche Revolving Loan Commitment is set forth opposite its name on
Schedule 2.1 annexed hereto, and the aggregate original amount of the
CN Tranche Revolving Loan Commitments is the CN Dollar Equivalent
Amount of US$10,000,000; provided that the CN Tranche Revolving Loan
Commitments of CN Lenders shall be adjusted to give effect to any
assignments of the CN Tranche Revolving Loan Commitments pursuant to
subsection 10.1B; provided, further, that the amount of the CN Tranche
Revolving Loan Commitments shall be reduced from time to time by the
amount of any reductions thereto made pursuant to subsection 2.4. Each
CN Lender's CN Tranche Revolving Loan Commitment shall expire on the
Commitment Termination Date, and all Loans and all other amounts owed
hereunder with respect to the CN Tranche Revolving Loans and the CN
Tranche Revolving Loan Commitments shall be paid in full no later than
the Commitment Termination Date. Amounts borrowed under this subsection
2.1A(vi) may be repaid and reborrowed to but excluding the Commitment
Termination Date.
Notwithstanding anything contained in this Agreement to the
contrary, the CN Tranche Revolving Loans and the CN Tranche Revolving
Loan Commitments shall be subject to the limitation that in no event
shall the Total Utilization of CN Tranche Revolving Loan Commitments at
any time exceed the CN Tranche Revolving Loan Commitments then in
effect.
B. BORROWING MECHANICS.
(i) US Loans and CN Tranche Term Loans. US Tranche Term Loans,
CN Tranche Term Loans or US Tranche Revolving Loans made on any Funding
Date as Base Rate Loans shall not be subject to any minimum amounts.
Loans made on any Funding Date as Eurodollar Rate Loans shall be in an
aggregate minimum amount of US$1,000,000 and integral multiples of
US$500,000 in excess of that amount. Whenever the applicable Borrower
desires that Lenders make Loans, it shall deliver to US Administrative
Agent a Notice of Borrowing no later than 11:00 A.M. (
New York time) at
least three Business Days in advance of the proposed Funding Date (in
the case of a Eurodollar Rate Loan) or at least one Business Day in
advance of the proposed Funding Date (in the case of a Base Rate Loan).
The Notice of Borrowing shall specify (i) the proposed Funding Date
(which shall be a Business Day), (ii) the amount and type of Loans
requested, (iii) in the case of Loans made on the Closing Date, that
such Loans shall be Base Rate Loans, (iv) in the case of Loans not made
on the Closing Date, whether such Loans shall be Base Rate Loans or
Eurodollar Rate Loans, and (v) in the case of any Loans requested to be
made as Eurodollar Rate Loans, the initial Interest Period requested
therefor.
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(ii) CN Tranche Revolving Loans. CN Tranche Revolving Loans
made on any Funding Date as CN Prime Rate Loans, shall not be subject
to any minimum amounts. BA Rate Loans shall be in an aggregate minimum
amount of CN$500,000 and integral multiples of CN$500,000 in excess of
that amount. Whenever Canadian Borrower desires that CN Lenders make CN
Tranche Revolving Loans, it shall deliver to CN Administrative Agent a
Notice of Borrowing no later than 11:00 A.M. (
New York time) at least
three Business Days in advance of the proposed Funding Date (in the
case of a BA Rate Loan) or at least one Business Day in advance of the
proposed Funding Date (in the case of a CN Prime Rate Loan). The Notice
of Borrowing shall specify (i) the proposed Funding Date (which shall
be a Business Day), (ii) the amount of CN Tranche Revolving Loans
requested, (iii) in the case of Loans made on the Closing Date, that
such CN Tranche Revolving Loans shall be CN Prime Rate Loans, (iv) in
the case of CN Tranche Revolving Loans not made on the Closing Date,
whether such Loans shall be CN Prime Rate Loans or BA Rate Loans, and
(v) in the case of any CN Loans requested to be made as BA Rate Loans,
the initial Interest Period requested therefor.
(iii) Telephonic Notice. In lieu of delivering a Notice of
Borrowing, the applicable Borrower may give the applicable
Administrative Agent telephonic notice by the required time of any
proposed borrowing under this subsection 2.1B; provided that such
notice shall be promptly confirmed in writing by delivery of a Notice
of Borrowing to the applicable Administrative Agent on or before the
applicable Funding Date.
None of any Administrative Agent or any Lender shall incur any
liability to Company in acting upon any telephonic notice referred to
above that any Administrative Agent believes in good faith to have been
given by a duly authorized officer or other person authorized to borrow
on behalf of such Borrower or for otherwise acting in good faith under
this subsection 2.1B, and upon funding of Loans by Lenders in
accordance with this Agreement pursuant to any such telephonic notice
such Borrower shall have effected Loans hereunder.
(iv) Change in Notice of Borrowing. Each Borrower shall notify
Administrative Agent prior to the funding of any Loans if any of the
matters to which such Borrower is required to certify in the applicable
Notice of Borrowing is no longer true and correct as of the applicable
Funding Date, and the acceptance by such Borrower of the proceeds of
any Loans shall constitute a re-certification by such Borrower, as of
the applicable Funding Date, as to the matters to which such Borrower
is required to certify in the applicable Notice of Borrowing.
(v) Notice Irrevocable. Except as otherwise provided in
subsections 2.6B, 2.6C and 2.6G, a Borrower's Notice of Borrowing for a
Eurodollar Rate Loan (or telephonic notice in lieu thereof) shall be
irrevocable on and after the related Interest Rate Determination Date,
and such Borrower shall be bound to either (i) make a borrowing in
accordance therewith or (ii) pay all amounts due under subsection 2.6D.
C. DISBURSEMENT OF FUNDS. All Loans under this Agreement shall
be made by Lenders simultaneously and proportionately to their respective Pro
Rata Shares, it being understood that no Lender shall be responsible for any
default by any other Lender in that other
43
Lender's obligation to make a Loan requested hereunder nor shall the Commitment
of any Lender to make the particular type of Loan requested be increased or
decreased as a result of a default by any other Lender in that other Lender's
obligation to make a Loan requested hereunder. Promptly after receipt by an
Administrative Agent of a Notice of Borrowing pursuant to subsection 2.1B (or
telephonic notice in lieu thereof), such Administrative Agent shall promptly
notify each Lender of the proposed borrowing. Each Lender shall make the amount
of its Loan available to such Administrative Agent, in same day funds in US
Dollars or Canadian Dollars, as applicable, at the applicable Funding and
Payment Office, not later than 11:00 A.M. (New York time) on the applicable
Funding Date. Except as provided in subsection 3.3B with respect to Loans used
to reimburse any Issuing Lender for the amount of a drawing under a Letter of
Credit issued by it, upon satisfaction or waiver of the conditions precedent
specified in subsections 4.1 (in the case of the initial Loans) and 4.2 (in the
case of all Loans), US Administrative Agent shall make the proceeds of such US
Loans and CN Administrative Agent shall make the proceeds of such CN Loans,
available to the applicable Borrower on the applicable Funding Date by causing
an amount of same day funds in US Dollars or Canadian Dollars, as applicable,
equal to the proceeds of all such Loans received by the applicable
Administrative Agent from Lenders to be credited only to the account of the
applicable Borrower at the Funding and Payment Office.
Unless the applicable Administrative Agent shall have been notified by
any Lender prior to the Funding Date for any Loans that such Lender does not
intend to make available to such Administrative Agent the amount of such
Lender's Loan requested on such Funding Date, such Administrative Agent may
assume that such Lender has made such amount available to such Administrative
Agent on such Funding Date and such Administrative Agent may, in its sole
discretion, but shall not be obligated to, make available to the applicable
Borrower a corresponding amount on such Funding Date. If such corresponding
amount is not in fact made available to the applicable Administrative Agent by
such Lender, such Administrative Agent shall be entitled to recover such
corresponding amount on demand from such Lender together with interest thereon,
for each day from such Funding Date until the date such amount is paid to such
Administrative Agent, at the customary rate set by such Administrative Agent for
the correction of errors among banks for three Business Days and thereafter at
the Base Rate. If such Lender does not pay such corresponding amount forthwith
upon such Administrative Agent's demand therefor, such Administrative Agent
shall promptly notify the applicable Borrower and such Borrower shall
immediately pay such corresponding amount to such Administrative Agent together
with interest thereon, for each day from such Funding Date until the date such
amount is paid to such Administrative Agent, at the rate payable under this
Agreement for Base Rate Loans, in the case of Loans made in US Dollars, and for
CN Prime Rate Loans in the case of Loans made in Canadian Dollars. Nothing in
this subsection 2.1C shall be deemed to relieve any Lender from its obligation
to fulfill its Commitment hereunder or to prejudice any rights that any Borrower
may have against any Lender as a result of any default by such Lender hereunder.
Notwithstanding anything contained herein to the contrary, any funding
of the CN Tranche Term Loans shall be credited only to the Collateral Account in
accordance with the terms of the Collateral Account Agreement and shall not be
released until such time as (i) Canadian Borrower is required to pay claims of
creditors of Canadian Borrower and certain of its Subsidiaries under the CCAA
Plan of Arrangement and (ii) US Administrative Agent is
44
satisfied in its sole discretion with each Loan Parties' compliance with its
obligations under the Post-Closing Letter.
D. THE REGISTER.
(i) Each Administrative Agent shall maintain a Register. The
Registers shall be available for inspection by any Borrower or any
Lender at any reasonable time and from time to time upon reasonable
prior notice.
(ii) US Administrative Agent shall record in the US Register
the US Tranche Term Loan Commitment, CN Tranche Term Loan Commitment;
US Tranche Revolving Loan Commitment, US Tranche Term Loans, CN Tranche
Term Loans and US Tranche Revolving Loans from time to time of each
Lender and each repayment or prepayment in respect of the principal
amount of the Loans of each Lender. CN Administrative Agent shall
record in the CN Register the CN Tranche Revolving Loan Commitment and
CN Tranche Revolving Loans from time to time of each CN Lender and each
repayment or prepayment in respect of the principal amount of the Loans
of each CN Lender. Any such recordation shall be conclusive and binding
on each Borrower and each Lender, absent manifest error; provided that
failure to make any such recordation, or any error in such recordation,
shall not affect any Borrower's Obligations in respect of the
applicable Loans.
(iii) Each Lender shall record on its internal records
(including, without limitation, the Notes held by such Lender) the
amount of each Loan made by it and each payment in respect thereof. Any
such recordation shall be conclusive and binding on Company, absent
manifest error; provided that failure to make any such recordation, or
any error in such recordation, shall not affect any Lender's Commitment
or any Borrower's Obligations in respect of the applicable Loans; and
provided, further, that in the event of any inconsistency between the
Register and any Lender's records, the recordations in the Register
shall govern.
(iv) Borrowers, Administrative Agents and Lenders shall deem
and treat the Persons listed as Lenders in the Registers as the holders
and owners of the corresponding Commitments and Loans listed therein
for all purposes hereof, and no assignment or transfer of any such
Commitment or Loan shall be effective, in each case unless and until an
Assignment Agreement effecting the assignment or transfer thereof shall
have been accepted by US Administrative Agent in respect of an
assignment of any US Loans and by CN Administrative Agent in respect of
an assignment of any CN Loans and recorded in the Register as provided
in subsection 10.1B(ii). Prior to such recordation, all amounts owed
with respect to the applicable Commitment or Loan shall be owed to the
Lender listed in the Register as the owner thereof, and any request,
authority or consent of any Person who, at the time of making such
request or giving such authority or consent, is listed in a Register as
a Lender shall be conclusive and binding on any subsequent holder,
assignee or transferee of the corresponding Commitments or Loans.
45
(v) Company hereby designates US Administrative Agent and
Canadian Borrower hereby designates CN Administrative Agent, to serve
as such Borrower's agent solely for purposes of maintaining the
Registers as provided in this subsection 2.1D, and each Borrower hereby
agrees that, to the extent such Administrative Agent serves in such
capacity, such Administrative Agent and its officers, directors,
employees and affiliates shall constitute Indemnitees for all purposes
under subsection 10.3.
E. NOTES. On the Closing Date, (i) Company shall execute and
deliver to each applicable US Lender (or to US Administrative Agent for that
Lender) (a) a US Tranche Term Note substantially in the form of Exhibit IV
annexed hereto to evidence that US Lender's US Tranche Term Loan, in the
principal amount of that US Lender's US Tranche Term Loan Commitment and with
other appropriate insertions and (b) a US Tranche Revolving Note substantially
in the form of Exhibit VI annexed hereto to evidence that US Lender's US Tranche
Revolving Loans, in the principal amount of that US Lender's Revolving Loan
Commitment and with other appropriate insertions, and (ii) Canadian Borrower
shall execute and deliver (a) to each US Lender (or to US Administrative Agent
for that Lender), a CN Tranche Term Note substantially in the form of Exhibit V
annexed hereto and with appropriate insertions to evidence that US Lender's CN
Tranche Term Loan and (b) to each CN Lender (or CN Administrative Agent for that
Lender), a CN Tranche Revolving Note in the form of Exhibit VII, in the
principal amount of that CN Lender's CN Tranche Revolving Loan Commitment and
with other appropriate insertions.
2.2 INTEREST ON THE LOANS.
A. RATE OF INTEREST. Subject to the provisions of subsections
2.6 and 2.7, (i) each Loan in US Dollars shall bear interest on the unpaid
principal amount thereof from the date made through maturity (whether by
acceleration or otherwise) at a rate determined by reference to the Base Rate or
the Adjusted Eurodollar Rate and (ii) each Loan in Canadian Dollars shall bear
interest in the unpaid principal amount thereof from the date made through
maturity at a rate determined by reference to the CN Prime Rate or BA Rate. The
applicable basis for determining the rate of interest with respect to any Loan
shall be selected by the applicable Borrower initially at the time a Notice of
Borrowing is given with respect to such Loan pursuant to subsection 2.1B, and
the basis for determining the interest rate with respect to any Loan may be
changed from time to time pursuant to and in accordance with subsection 2.2D. If
on any day a Loan is outstanding with respect to which notice has not been
delivered to the applicable Administrative Agent in accordance with the terms of
this Agreement specifying the applicable basis for determining the rate of
interest, then for that day that Loan shall bear interest determined by
reference to the Base Rate for US Dollar Loans and to the CN Prime Rate for
Canadian Dollar Loans.
Subject to the provisions of subsections 2.2E and 2.7,
(i) the US Loans and the CN Tranche Term Loans shall bear
interest through maturity as follows:
46
(a) if a Base Rate Loan, then at the sum of the Base
Rate then in effect plus 2.75%; or
(b) if a Eurodollar Rate Loan, then at the sum of the
Adjusted Eurodollar Rate then in effect plus 3.75%.
and
(ii) the CN Tranche Revolving Loans shall bear interest
through maturity as follows:
(a) if a CN Prime Rate Loan, then at the sum of the
CN Prime Rate then in effect plus 2.75%; or
(b) if a BA Rate Loan, then at the sum of the BA Rate
then in effect plus 3.75%
B. INTEREST PERIODS. In connection with each Eurodollar Rate
Loan, any Borrower may, pursuant to the applicable Notice of Borrowing or Notice
of Conversion/Continuation, as the case may be, select an interest period (each
an "INTEREST PERIOD") to be applicable to such Loan, which Interest Period shall
be, at such Borrower's option, either a one, two, three, six or, if available to
all Lenders, twelve month period and, in connection with each BA Rate Loan,
Canadian Borrower may, pursuant to the applicable Notice of Borrowing or Notice
of Conversion/Continuation, as the case may be, select an interest period (each
an "INTEREST PERIOD") to be applicable to such Loan, which Interest Period shall
be, at Canadian Borrower's option, either a one, two, three, four or six month
period; provided that:
(i) the initial Interest Period for any such Loan shall
commence on the Funding Date of such Loan, in the case of a Loan
initially made as a Eurodollar Rate Loan or a BA Rate Loan, or on the
date specified in the applicable Notice of Conversion/Continuation, in
the case of a Loan converted to a Eurodollar Rate Loan or a BA Rate
Loan;
(ii) in the case of immediately successive Interest Periods
applicable to a Eurodollar Rate Loan or a BA Rate Loan continued as
such pursuant to a Notice of Conversion/Continuation, each successive
Interest Period shall commence on the day on which the next preceding
Interest Period expires;
(iii) if an Interest Period would otherwise expire on a day
that is not a Business Day, such Interest Period shall expire on the
next succeeding Business Day; provided that, if any Interest Period
would otherwise expire on a day that is not a Business Day but is a day
of the month after which no further Business Day occurs in such month,
such Interest Period shall expire on the next preceding Business Day;
(iv) any Interest Period that begins on the last Business Day
of a calendar month (or on a day for which there is no numerically
corresponding day in the calendar month at the end of such Interest
Period) shall, subject to clause (v) of this subsection 2.2B, end on
the last Business Day of a calendar month;
47
(v) no Interest Period shall extend beyond the scheduled
maturity date of the applicable Loans;
(vi) there shall be no more than 10 Interest Periods in
respect of Eurodollar Loans outstanding at any time and no more than 10
Interest Periods outstanding at any time in respect of BA Rate Loans;
and
(vii) in the event a Borrower fails to specify an Interest
Period for any Eurodollar Rate Loan or BA Rate Loan, in the applicable
Notice of Borrowing or Notice of Conversion/Continuation, such Borrower
shall be deemed to have selected an Interest Period of one month.
C. INTEREST PAYMENTS. Subject to the provisions of subsection
2.2E, interest on each Loan shall be payable in arrears on and to each Interest
Payment Date applicable to that Loan, upon any prepayment of that Loan (to the
extent accrued on the amount being prepaid) and at maturity (including final
maturity).
D. CONVERSION OR CONTINUATION. Subject to the provisions of
subsection 2.6, each Borrower shall have the option (A)(i) to convert at any
time all or any part of its outstanding US Loans or CN Tranche Term Loans, as
the case may be, equal to US$1,000,000 and integral multiples of US$1,000,000 in
excess of that amount from Base Rate Loans to Eurodollar Rate Loans; (ii) upon
the expiration of any Interest Period applicable to a Eurodollar Rate Loan, to
continue all or any portion of such Loan equal to US$1,000,000 and integral
multiples of US$1,000,000 in excess of that amount as a Eurodollar Rate Loan; or
(iii) subject to the payment of all amounts due under subsection 2.6D, to
convert a Eurodollar Rate Loan into a Base Rate Loan at any time or (B)(i) to
convert at any time all or any part of its outstanding CN Tranche Revolving
Loans equal to CN$500,000 and integral multiples of CN$500,000 in excess of that
amount from CN Prime Rate Loans to BA Rate Loans; or (ii) upon the expiration of
any Interest Period applicable to a BA Rate Loan, to continue all or any portion
of such Loan equal to CN$500,000 and integral multiples of CN$500,000 in excess
of that amount as a BA Rate Loan; or (iii) subject to the payment of all amounts
due under subsection 2.6D, to convert a BA Rate Loan into a CN Prime Rate Loan
at any time.
The applicable Borrower shall deliver a Notice of
Conversion/Continuation to the applicable Administrative Agent no later than
11:00 A.M. (New York time) on the proposed conversion date (in the case of a
conversion to a Base Rate Loan or a CN Prime Rate Loan) or at least three
Business Days in advance of the proposed conversion/continuation date (in the
case of a conversion to, or a continuation of, a Eurodollar Rate Loan or a BA
Rate Loan). A Notice of Conversion/Continuation shall specify (i) the proposed
conversion/continuation date (which shall be a Business Day), (ii) the amount
and type of the Loan to be converted/continued, (iii) the nature of the proposed
conversion/continuation, (iv) in the case of a conversion to, or a continuation
of, a Eurodollar Rate Loan or a BA Rate Loan, the requested Interest Period, and
(v) in the case of a conversion to, or a continuation of, a Eurodollar Rate Loan
or a BA Rate Loan, that no Potential Event of Default or Event of Default has
occurred and is continuing. In lieu of delivering the above-described Notice of
Conversion/Continuation, the applicable Borrower may give the applicable
Administrative Agent telephonic notice by the required time of any proposed
conversion or continuation under this subsection 2.2D; provided that such notice
48
shall be promptly confirmed in writing by delivery of a Notice of
Conversion/Continuation to such Administrative Agent on or before the proposed
conversion or continuation date.
None of any Administrative Agent or any Lender shall incur any
liability to any Borrower in acting upon any telephonic notice referred to above
that any Administrative Agent believes in good faith to have been given by a
duly authorized officer or other person authorized to act on behalf of such
Borrower or for otherwise acting in good faith under this subsection 2.2D, and
upon conversion or continuation of the applicable basis for determining the
interest rate with respect to any Loans in accordance with this Agreement
pursuant to any such telephonic notice such Borrower shall have effected a
conversion or continuation, as the case may be, hereunder.
Except as otherwise provided in subsections 2.6B, 2.6C and 2.6G, a
Notice of Conversion/Continuation for conversion to, or continuation of, a
Eurodollar Rate Loan or a BA Rate Loan (or telephonic notice in lieu thereof)
shall be irrevocable on and after the related Interest Rate Determination Date,
and such Borrower shall be bound to effect a conversion or continuation in
accordance therewith.
E. DEFAULT RATE. Upon the occurrence and during the
continuation of any Event of Default, the outstanding principal amount of all
Loans and, to the extent permitted by applicable law, any interest payments
thereon not paid when due and any fees and other amounts then due and payable
hereunder, shall thereafter bear interest (including post-petition interest in
any proceeding under the Bankruptcy Code or other applicable Insolvency Laws)
payable upon demand at a rate that is 2% per annum in excess of the interest
rate otherwise payable under this Agreement with respect to Base Rate Loans for
US Dollar Loans and 2% per annum in excess of the interest rate otherwise
payable under this Agreement with respect to CN Prime Rate Loans for Canadian
Dollar Loans. Payment or acceptance of the increased rates of interest provided
for in this subsection 2.2E is not a permitted alternative to timely payment and
shall not constitute a waiver of any Event of Default or otherwise prejudice or
limit any rights or remedies of either Administrative Agent or any Lender.
F. COMPUTATION OF INTEREST. Interest on the Loans shall be
computed (i) in the case of Base Rate Loans, BA Rate loans and CN Prime Rate
Loans on the basis of a 365-day or 366-day year, as the case may be, and (ii) in
the case of Eurodollar Rate Loans, on the basis of a 360-day year, in each case
for the actual number of days elapsed in the period during which it accrues. In
computing interest on any Loan, (i) the date of the making of such Loan or the
first day of an Interest Period applicable to such Loan or, with respect to a
Base Rate Loan being converted from a Eurodollar Rate Loan and a CN Prime Rate
Loan being converted from a BA Rate Loan, the date of conversion shall be
included, and (ii) the date of payment of such Loan or the expiration date of an
Interest Period applicable to such Loan or, with respect to a Base Rate Loan
being converted to a Eurodollar Rate Loan and a CN Prime Rate Loan being
converted to a BA Rate Loan, the date of conversion shall be excluded; provided
that if a Loan is repaid on the same day on which it is made, one day's interest
shall be paid on that Loan. For purposes of the Interest Act (Canada), where in
this Agreement a rate of interest is to be calculated on the basis of a year of
360, 365 or 366 days, the yearly rate of interest to which the rate is
equivalent is the rate multiplied by the number of days in the year for which
the calculation is made and divided by 360, 365 or 366, as applicable.
49
2.3 FEES.
A. COMMITMENT FEE. (a) Company agrees to pay to US
Administrative Agent, for distribution to each US Lender in proportion to that
Lender's Pro Rata Share, commitment fees for the period from and including the
Closing Date to and excluding the Commitment Termination Date equal to (i) the
average of the daily excess of the US Tranche Revolving Loan Commitments over
the Total Utilization of US Tranche Revolving Loan Commitments multiplied by
(ii) 1.00% per annum (the "US COMMITMENT FEE PERCENTAGE"); provided that if the
daily average of the Total Utilization of US Tranche Revolving Loan Commitments
is greater than 33% but not greater than 66% of the aggregate amount of the US
Tranche Revolving Loan Commitments, the US Commitment Fee Percentage shall be
reduced to 0.75% per annum; and provided, further, that if the daily average of
the Total Utilization of US Tranche Revolving Loan Commitments is greater than
66% of the aggregate amount of the US Tranche Revolving Loan Commitments, the US
Commitment Fee Percentage shall be reduced to 0.50% per annum.
(b) Canadian Borrower agrees to pay to CN Administrative Agent for
distribution to each CN Lender in proportion to that Lender's Pro Rata Share,
commitment fees for the period from and including the Closing Date to and
excluding the Commitment Termination Date equal to (i) the average of the daily
excess of the CN Tranche Revolving Loan Commitments over the Total Utilization
of CN Tranche Revolving Loan Commitments multiplied by (ii) 1.00% per annum (the
"CN COMMITMENT FEE PERCENTAGE"); provided that if the daily average of the Total
Utilization of CN Tranche Revolving Loan Commitments is greater than 33% but not
greater than 66% of the aggregate amount of the CN Tranche Revolving Loan
Commitments, the CN Commitment Fee Percentage shall be reduced to 0.75% per
annum; and provided, further, that if the daily average of the Total Utilization
of CN Tranche Revolving Loan Commitments is greater than 66% of the aggregate
amount of the CN Tranche Revolving Loan Commitments, the CN Commitment Fee
Percentage shall be reduced to 0.50% per annum.
(c) Such commitment fees shall be calculated on the basis of a 365-day
or 366-day year and the actual number of days elapsed and shall be payable
quarterly in arrears on January 15, April 15, July 15 and October 15 of each
year, commencing on the first such date to occur after the Closing Date, and on
the Commitment Termination Date. The amount of fees payable pursuant to this
subsection 2.3A shall be calculated without regard to any limitation on the
availability of the Commitments under the last paragraphs of subsection
2.1A(iii) and (iv), respectively.
B. ADMINISTRATIVE AGENT'S FEES. Each Borrower agrees to pay to
the applicable Administrative Agent such other fees in the amounts and at the
times separately agreed upon between such Borrower and such Administrative
Agent.
50
2.4 REPAYMENTS, PREPAYMENTS AND REDUCTIONS IN REVOLVING LOAN
COMMITMENTS; GENERAL PROVISIONS REGARDING PAYMENTS; APPLICATION OF PROCEEDS OF
COLLATERAL AND PAYMENTS UNDER GUARANTIES.
A. SCHEDULED PAYMENTS OF TERM LOANS.
(i) Scheduled Payments of US Tranche Term Loans.
Company shall make principal payments on the US Tranche Term Loans in
installments on the dates and in the amounts set forth below:
--------------------------------------------------------------
DATE SCHEDULED REPAYMENT OF US
TRANCHE TERM LOANS
--------------------------------------------------------------
May 31, 2002 US$87,500
--------------------------------------------------------------
August 31, 2002 US$87,500
--------------------------------------------------------------
November 30, 2002 US$87,500
--------------------------------------------------------------
February 28, 2003 US$87,500
--------------------------------------------------------------
May 31, 2003 US$1,200,000
--------------------------------------------------------------
August 31, 2003 US$1,200,000
--------------------------------------------------------------
November 30, 2003 US$1,200,000
--------------------------------------------------------------
February 29, 2004 US$1,200,000
--------------------------------------------------------------
May 31, 2004 US$1,200,000
--------------------------------------------------------------
August 31, 2004 US$1,200,000
--------------------------------------------------------------
November 30, 2004 US$1,200,000
--------------------------------------------------------------
February 28, 2005 US$1,200,000
--------------------------------------------------------------
May 31, 2005 US$1,200,000
--------------------------------------------------------------
August 31, 2005 US$1,200,000
--------------------------------------------------------------
November 30, 2005 US$1,200,000
--------------------------------------------------------------
February 28, 2006 US$1,200,000
--------------------------------------------------------------
May 31, 2006 US$1,200,000
--------------------------------------------------------------
August 31, 2006 US$1,200,000
--------------------------------------------------------------
November 30, 2006 US$1,200,000
--------------------------------------------------------------
February 28, 2007 US$1,200,000
--------------------------------------------------------------
Term Loan Termination Date US$15,450,000
--------------------------------------------------------------
Total US$35,000,000
--------------------------------------------------------------
; provided that the scheduled installments of principal of the US
Tranche Term Loans set forth above shall be reduced in connection with
any voluntary or mandatory prepayments of the US Tranche Term Loans in
accordance with subsection 2.4B(iv); and provided, further, that the US
Tranche Term Loans and all other amounts owed hereunder with respect to
the US Tranche Term Loans shall be paid in full no later than the Term
Loan Termination Date and the final installment payable by Company in
respect of the US Tranche Term Loans on such date shall be in an
amount, if such amount is different from
51
that specified above, sufficient to repay all amounts owing by Company
under this Agreement with respect to the US Tranche Term Loans.
(ii) Scheduled Payments of CN Tranche Term Loans.
Canadian Borrower shall make principal payments on the CN Tranche Term Loans in
installments on the dates and in the amounts set forth below:
----------------------------------------------------------
DATE SCHEDULED REPAYMENT OF CN
TRANCHE TERM LOANS
----------------------------------------------------------
May 31, 2002 US$50,000
----------------------------------------------------------
August 31, 2002 US$50,000
----------------------------------------------------------
November 30, 2002 US$50,000
----------------------------------------------------------
February 28, 2003 US$50,000
----------------------------------------------------------
May 31, 2003 US$50,000
----------------------------------------------------------
August 31, 2003 US$50,000
----------------------------------------------------------
November 30, 2003 US$50,000
----------------------------------------------------------
February 29, 2004 US$50,000
----------------------------------------------------------
May 31, 2004 US$50,000
----------------------------------------------------------
August 31, 2004 US$50,000
----------------------------------------------------------
November 30, 2004 US$50,000
----------------------------------------------------------
February 28, 2005 US$50,000
----------------------------------------------------------
May 31, 2005 US$50,000
----------------------------------------------------------
August 31, 2005 US$50,000
----------------------------------------------------------
November 30, 2005 US$50,000
----------------------------------------------------------
February 28, 2006 US$50,000
----------------------------------------------------------
May 31, 2006 US$50,000
----------------------------------------------------------
August 31, 2006 US$50,000
----------------------------------------------------------
November 30, 2006 US$50,000
----------------------------------------------------------
February 28, 2007 US$50,000
----------------------------------------------------------
Term Loan Termination Date US$19,000,000
----------------------------------------------------------
Total US$20,000,000
----------------------------------------------------------
; provided that the scheduled installments of principal of the CN
Tranche Term Loans set forth above shall be reduced in connection with
any voluntary or mandatory prepayments of the CN Tranche Term Loans in
accordance with subsection 2.4B(iv); and provided, further, that the CN
Tranche Term Loans and all other amounts owed hereunder with respect to
the CN Tranche Term Loans shall be paid in full no later than the Term
Loan Termination Date and the final installment payable by Canadian
Borrower in respect of the CN Tranche Term Loans on such date shall be
in an amount, if such amount is different from that specified above,
sufficient to repay all amounts owing by Canadian Borrower under this
Agreement with respect to the CN Tranche Term Loans.
52
B. PREPAYMENTS AND UNSCHEDULED REDUCTIONS IN COMMITMENTS.
(i) Voluntary Prepayments. Any Borrower may, upon not less
than one Business Day's prior written or telephonic notice, in the case
of Base Rate Loans and CN Prime Rate Loans, and three Business Days'
prior written or telephonic notice, in the case of Eurodollar Rate
Loans and BA Rate Loans, in each case given to the applicable
Administrative Agent by 11:00 A.M. (New York City time) on the date
required and, if given by telephone, promptly confirmed in writing to
such Administrative Agent (which original written or telephonic notice
such Administrative Agent will promptly transmit by telefacsimile or
telephone to each affected Lender), at any time and from time to time
prepay any Loans on any Business Day without premium or penalty in
whole or in part in an aggregate minimum amount of (a) for US Loans,
US$1,000,000 and integral multiples of US$1,000,000 in excess of that
amount and (b) for CN Tranche Revolving Loans, CN$500,000 and integral
multiples of CN$500,000 in excess of that amount; provided, however,
that a Eurodollar Rate Loan and a BA Rate Loan may only be prepaid on
the expiration of the Interest Period applicable thereto unless such
Borrower complies with subsection 2.6D with respect to any breakage
costs resulting from such prepayment being made on a date prior to the
expiration of the applicable Interest Period. Notice of prepayment
having been given as aforesaid, the principal amount of the Loans
specified in such notice shall become due and payable on the prepayment
date specified therein. Any such voluntary prepayment shall be applied
as specified in subsection 2.4B(iv).
(ii) Voluntary Reductions of Revolving Loan Commitments. Any
Borrower may, upon not less than three Business Days' prior written or
telephonic notice confirmed in writing to the applicable Administrative
Agent (which original written or telephonic notice the applicable
Administrative Agent will promptly transmit by telefacsimile or
telephone to each affected Lender), at any time and from time to time
terminate in whole or permanently reduce in part, without premium or
penalty, the US Tranche Revolving Loan Commitments or the CN Tranche
Revolving Loan Commitments, as applicable, in an amount up to the
amount by which such US Tranche Revolving Loan Commitments or CN
Tranche Revolving Loan Commitments, as applicable, exceeds the Total
Utilization of US Tranche Revolving Loan Commitments or Total
Utilization of CN Tranche Revolving Loan Commitments, respectively, at
the time of such proposed termination or reduction after giving effect
to any payments or prepayments made on the date of such termination or
reduction; provided that any such partial reduction of the Commitments
shall be in an aggregate minimum amount of US$1,000,000 or CN$500,000
as applicable, and integral multiples of US$1,000,000 or CN$500,000 as
applicable, in excess of that amount. Company's or Canadian Borrower's
notice to US Administrative Agent or CN Administrative Agent,
respectively, shall designate the date (which shall be a Business Day)
of such termination or reduction and the amount of any partial
reduction, and such termination or reduction of the applicable
Revolving Loan Commitments shall be effective on the date specified in
applicable Borrower's notice and shall reduce the applicable Revolving
Loan Commitment of each Lender proportionately to its Pro Rata Share.
(iii) Mandatory Prepayments and Mandatory Reductions of
Revolving Loan Commitments. Subject to subsection 2.4B(iv)(g) regarding
the prepayment of the
53
Loans and the Junior Term Loans upon the occurrence and during the
continuation of a Specified Priority Secured Loan Default, the Loans
shall be prepaid and/or the Revolving Loan Commitments shall be
permanently reduced in the amounts and under the circumstances set
forth below, all such prepayments and/or reductions to be applied as
set forth below or as more specifically provided in subsection
2.4B(iv):
(a) Prepayments and Reductions from Net Asset Sale
Proceeds.
(1) Minor Asset Sale Proceeds. No
later than the third Business Day following the date of
receipt by Company or any of its Subsidiaries of any Net Asset
Sale Proceeds in respect of any Minor Asset Sale (other than
Deemed Major Asset Sale Proceeds), (A) the applicable Borrower
shall prepay the Junior Term Loans in an amount equal to 75%
of such Net Asset Sale Proceeds (the "MINOR ASSET SALE
PREPAYMENT AMOUNT") in accordance with the Term Loan Agreement
and (B) to the extent the Minor Asset Sale Prepayment Amount
exceeds the aggregate outstanding principal amount of the
Junior Term Loans, Company shall prepay the Loans, and/or the
Revolving Loan Commitments shall be permanently reduced, in an
amount equal to such excess; provided, however, that so long
as no Event of Default or Potential Event of Default has
occurred and is continuing at the time of such sale, Company
may retain, and the Revolving Loan Commitments shall not be
reduced by, the first US$10,000,000 of Net Asset Sale Proceeds
in respect of Minor Asset Sales in each Fiscal Year (in
addition to the 25% of such proceeds not required to be
applied to prepay the Loans or reduce the Revolving Loan
Commitments) and any unused amount of such US$10,000,000
retention amount for any Fiscal Year shall be added to the
retention amount provided in this subsection for the next
succeeding Fiscal Year.
(2) Major Asset Sale Proceeds. No
later than the third Business Day following the date of
receipt by Company or any of its Subsidiaries of any Net Asset
Sale Proceeds in respect of any Major Asset Sale or Deemed
Major Asset Sale Proceeds, (A) the applicable Borrower shall
prepay the Junior Term Loans in an amount equal to 100% of
such Net Asset Sale Proceeds or Deemed Major Asset Sale
Proceeds (the "MAJOR ASSET SALE PREPAYMENT AMOUNT") in
accordance with the Term Loan Agreement and (B) to the extent
the Major Asset Sale Prepayment Amount exceeds the aggregate
outstanding principal amount of the Junior Term Loans, the
applicable Borrower shall prepay the Loans and/or the
Revolving Loan Commitments shall be permanently reduced, in an
amount equal to such excess.
(3) Notwithstanding anything to the
contrary contained in subsections 2.4B(iii)(a)(1) and (2),
Company shall not be required to use Net Asset Sale Proceeds
from Asset Sales of assets listed on Schedule 1.1C to prepay
the Loans to the extent such Net Asset Sale Proceeds (A) do
not exceed the West 34th Street Loan Amount and (B) are
applied in accordance with subsection 7.7(iv).
54
(b) Prepayments and Reductions from Net Insurance/
Condemnation Proceeds. No later than the third Business Day
following the date of receipt by Administrative Agent or by
Company or any of its Subsidiaries of any Net
Insurance/Condemnation Proceeds in excess of US$500,000
(determined with respect to each occurrence or event giving
rise to such Net Insurance/Condemnation Proceeds), (A) the
applicable Borrower shall prepay the Junior Term Loans in an
amount equal to 100% of such Net Insurance/Condemnation
Proceeds (the "INSURANCE/CONDEMNATION PREPAYMENT AMOUNT") in
accordance with the Term Loan Agreement and (B) to the extent
the Insurance/Condemnation Prepayment Amount exceeds the
aggregate outstanding principal amount of the Junior Term
Loans, the applicable Borrower shall prepay the Loans and/or
the Revolving Loan Commitments shall be permanently reduced,
in an amount equal to such excess; provided, however, that so
long as no Event of Default or Potential Event of Default has
occurred and is continuing, no such prepayment or reduction
shall be required to the extent such Borrower determines to
utilize such Net Insurance/Condemnation Proceeds to repair,
restore or replace the assets in respect of which such Net
Insurance/Condemnation Proceeds were received and such
Borrower so utilizes or contractually commits to utilize such
Net Insurance/Condemnation Proceeds within 360 days of the
receipt thereof; provided, further, however, that, unless
otherwise required by the terms of the lease for a Leasehold
Property with respect to which such Net Insurance/Condemnation
Proceeds were received, pending such utilization, such
proceeds shall be applied to repay the Revolving Loans (but
not reduce the Revolving Loan Commitments) and, after payment
in full thereof, deposited into the Collateral Account.
(c) Prepayments and Reductions Due to Issuance of
Debt. No later than the third Business Day following the date
of receipt by Company or any of its Subsidiaries of any Net
Debt Securities Proceeds, (A) the applicable Borrower shall
prepay the Junior Term Loans in an amount equal to 100% of
such Net Debt Securities Proceeds (the "DEBT SECURITIES
PREPAYMENT AMOUNT") in accordance with the Term Loan Agreement
and (B) to the extent the Debt Securities Prepayment Amount
exceeds the aggregate outstanding principal amount of the
Junior Term Loans, such Borrower shall prepay the Loans and/or
the Revolving Loan Commitments shall be permanently reduced,
in an amount equal to such excess.
(d) Prepayments and Reductions Due to Issuance of
Equity Securities.
(1) Proceeds of Public Equity
Offerings. No later than the third Business Day following the
date of receipt by Company or any of its Subsidiaries of Net
Equity Securities Proceeds from a Public Equity Offering, (A)
the applicable Borrower shall prepay the Junior Term Loans in
an amount equal to 75% of such Net Equity Securities Proceeds
(the "PUBLIC EQUITY PREPAYMENT AMOUNT") in accordance with the
Term Loan Agreement and (B) to the extent the Public Equity
Prepayment Amount exceeds the aggregate outstanding principal
55
amount of the Junior Term Loans, such Borrower shall prepay
the Loans and/or the Revolving Loan Commitments shall be
permanently reduced, in an amount equal to such excess;
provided, however, that so long as no Event of Default or
Potential Event of Default has occurred and is continuing at
the time Company or any of its Subsidiaries receives such Net
Equity Securities Proceeds (y) if the Applicable Leverage
Ratio is less than 3.50:1.00 but greater than or equal to
3.00:1.00 at the time of such issuance (after giving pro forma
effect to the application of such Net Equity Securities
Proceeds), the Public Equity Prepayment Amount shall be 50% of
such Net Equity Securities Proceeds, and (z) if the Applicable
Leverage Ratio is less than 3.00:1.00 at the time of such
issuance (after giving such pro forma effect), no portion of
such Net Equity Securities Proceeds shall be required to be so
applied.
(2) Proceeds of Private Non-Sponsor
Equity Offerings. No later than the third Business Day
following the date of receipt by Company or any of its
Subsidiaries of Net Equity Securities Proceeds from a Private
Non-Sponsor Equity Offering,
(A) if, on the date of receipt of
such Net Equity Securities Proceeds,
Sponsors own or manage 51% or more of the
common equity of Company, (x) Company shall
be entitled to retain the first
US$25,000,000 of such Net Equity Securities
Proceeds and (y) (i) Company shall prepay
the Junior Term Loans in an amount equal to
75% of the cumulative amount of such Net
Equity Securities Proceeds in excess of
US$25,000,000 (the "PRIVATE EQUITY
PREPAYMENT AMOUNT") in accordance with the
Term Loan Agreement and (ii) to the extent
the Private Equity Prepayment Amount exceeds
the aggregate outstanding principal amount
of the Junior Term Loans, Company shall use
such excess to prepay the Loans and/or
permanently reduce the Revolving Loan
Commitments; provided, however, that so long
as no Event of Default or Potential Event of
Default has occurred and is continuing at
the time Company or any of its Subsidiaries
receives such Net Equity Securities Proceeds
(a) if the Applicable Leverage Ratio is less
than 3.50:1.00 but greater than or equal to
3.00:1.00 at the time of such issuance
(after giving pro forma effect to the
application of such Net Equity Securities
Proceeds), the Private Equity Prepayment
Amount shall be 50% of the cumulative amount
of such Net Equity Securities Proceeds in
excess of US$25,000,000, and (b) if the
Applicable Leverage Ratio is less than
3.00:1.00 at the time of such issuance
(after giving such pro forma effect), no
portion of such Net Equity Securities
Proceeds shall be required to be so applied;
and
(B) if, on the date of receipt of
such Net Equity Securities Proceeds,
Sponsors own or manage less than 51% of the
common equity of Company, (x) Company shall
prepay the Junior
56
Term Loans in an amount equal to 75% of such
Net Equity Securities Proceeds (the
"ALTERNATIVE PRIVATE EQUITY PREPAYMENT
AMOUNT") in accordance with the Term Loan
Agreement and (y) to the extent the
Alternative Private Equity Prepayment Amount
exceeds the aggregate outstanding principal
amount of the Junior Term Loans, Company
shall use such excess to prepay the Loans
and/or permanently reduce the Revolving Loan
Commitments; provided, however, that so long
as no Event of Default or Potential Event of
Default has occurred and is continuing at
the time Company or any of its Subsidiaries
receives such Net Equity Securities Proceeds
(a) if the Applicable Leverage Ratio is less
than 3.50:1.00 but greater than or equal to
3.00:1.00 at the time of such issuance
(after giving pro forma effect to the
application of such Net Equity Securities
Proceeds), the Alternative Private Equity
Prepayment Amount shall be 50% of such Net
Equity Securities Proceeds, and (b) if the
Applicable Leverage Ratio is less than
3.00:1.00 at the time of such issuance
(after giving such pro forma effect), no
portion of such Net Equity Securities
Proceeds shall be required to be so applied.
(e) Prepayments and Reductions from Excess Cash Flow.
If there shall be Excess Cash Flow of Company and its
Subsidiaries for any Fiscal Year (commencing with the Fiscal
Year ending February 28, 2003), no later than 90 days after
the end of such Fiscal Year, (A) Company shall prepay the
Junior Term Loans in an amount equal to the sum of (x) 100% of
the first US$25,000,000 of Excess Cash Flow of that Fiscal
Year plus (y) 75% of such Excess Cash Flow in excess of
US$25,000,000 (the "EXCESS CASH FLOW PREPAYMENT AMOUNT") in
accordance with the Term Loan Agreement and (B) to the extent
the Excess Cash Flow Prepayment Amount exceeds the aggregate
outstanding principal amount of the Junior Term Loans, Company
shall prepay the Loans and/or the Revolving Loan Commitments
shall be permanently reduced, in an amount equal to such
excess; provided that such mandatory prepayments and/or
reduction in the Revolving Loan Commitments for the Fiscal
Year ending February 28, 2003, if any, shall be apportioned to
relate solely to the period from the Closing Date until
February 28, 2003; and provided, further, that so long as no
Event of Default or Potential Event of Default has occurred
and is continuing Company may retain all Excess Cash Flow with
respect to any Fiscal Year, and the Revolving Loan Commitments
shall not be permanently reduced, if (1) the Leverage Ratio at
the last day of such Fiscal Year is 3.50:1.00 or less and (2)
the Leverage Ratio at the last day of the immediately
preceding Fiscal Year was 3.50:1.00 or less.
(f) Prepayments and Reductions from Permitted Cure
Securities. If Company issues Permitted Cure Securities and
the proceeds thereof are required to be applied to reduce
Wholly-Owned Total Debt pursuant to subsection 7.6C, on the
date of receipt of such proceeds, Company shall use 100% of
the proceeds of such Permitted Cure Securities first to prepay
the Term Loans to the full extent thereof; second, to the
extent of any remaining proceeds, to prepay the
57
Revolving Loans to the full extent thereof (but not reduce the
Revolving Loan Commitments) and third to the extent of any
remaining proceeds, to prepay the Junior Term Loans in
accordance with the Term Loan Agreement.
(g) Calculations of Net Proceeds Amounts; Additional
Prepayments and Reductions Based on Subsequent Calculations.
Concurrently with any prepayment of the Loans and/or reduction
of the Revolving Loan Commitments pursuant to subsections
2.4B(iii)(a)-(f), Company shall deliver to US Administrative
Agent an Officer's Certificate demonstrating the calculation
of (1) the amount (the "NET PROCEEDS AMOUNT") of the
applicable Net Asset Sale Proceeds, the applicable Net
Insurance/Condemnation Proceeds, the applicable Net Equity
Securities Proceeds, the applicable Net Debt Securities
Proceeds, the applicable Excess Cash Flow or the required
reduction of Wholly-Owned Total Debt that gave rise to such
prepayment and/or reduction (2) in the case of a prepayment
under subsection 2.4B(iii)(a), the amount of Net Asset Sale
Proceeds in respect of any Minor Asset Sale, the amount of Net
Asset Sale Proceeds in respect of any Major Asset Sale, and
the amount of any Deemed Major Asset Sale Proceeds, and (3) in
the case of a prepayment under subsection 2.4B(ii)(d), the
amount of Net Equity Securities Proceeds from a Public Equity
Offering and the amount of Net Equity Securities Proceeds from
a Private Non-Sponsor Equity Offering. If Company shall
subsequently determine that the actual Net Proceeds Amount was
greater than the amount set forth in such Officer's
Certificate, the applicable Borrower shall promptly make an
additional prepayment of the Loans (and/or the Revolving Loan
Commitments shall be permanently reduced) in an amount equal
to the amount of such excess, and Company shall concurrently
therewith deliver to Administrative Agent an Officer's
Certificate demonstrating the derivation of the additional Net
Proceeds Amount resulting in such excess.
(h) Prepayments Due to Reductions or Restrictions of
Revolving Loan Commitments. Each Borrower shall from time to
time prepay the Revolving Loans to the extent necessary so
that the Total Utilization of US Tranche Revolving Loan
Commitments or Total Utilization of CN Tranche Revolving Loan
Commitments, as applicable, shall not at any time exceed the
US Tranche Revolving Loan Commitments or CN Tranche Revolving
Loan Commitments, respectively, then in effect.
(iv) Application of Prepayments and Unscheduled Reductions of
Commitments.
(a) Application of Voluntary Prepayments. Any
voluntary prepayments pursuant to subsection 2.4B(i) shall be
applied first to repay outstanding Loans as specified by the
relevant Borrower to the full extent thereof and second to the
Collateral Account to cash collateralize any outstanding
Letters of Credit.
(b) Application of Prepayments to Base Rate Loans, CN
Prime Rate Loans, Eurodollar Rate Loans and BA Rate Loans. Any
prepayment of the
58
US Loans or the CN Tranche Term Loans shall be applied first
to Base Rate Loans to the full extent thereof before
application to Eurodollar Rate Loans, and any prepayment of CN
Tranche Revolving Loans shall be applied to CN Prime Rate
Loans to the full extent thereof before application to BA Rate
Loans, in each case in a manner that minimizes the amount of
any payments required to be made by Company and/or Canadian
Borrower, as the case may be, pursuant to subsection 2.6D.
(c) Application of Mandatory Prepayments by Type of
Loans. Subject to subsection 2.4B(iv)(g), any amount required
to be applied as a mandatory prepayment of the Loans and/or a
reduction of the Revolving Loan Commitments pursuant to
subsections 2.4B(iii)(a)-(f) shall be applied first to prepay
the Junior Term Loans in accordance with the Term Loan
Agreement; second to prepay the Term Loans to the full extent
thereof; third to prepay the Revolving Loans to the full
extent thereof and to further permanently reduce the Revolving
Loan Commitments by the amount of such prepayments; fourth to
the extent of any remaining portion, to further reduce the
Revolving Loan Commitments to the full extent thereof; and
fifth to the Collateral Account to cash collateralize any
outstanding Letters of Credit.
(d) Application of Mandatory Prepayments of Term
Loans to US Tranche Term Loans and CN Tranche Term Loans and
the Scheduled Installments of Principal thereof. Subject to
subsection 2.4B(iv)(c), any mandatory prepayments of the Term
Loans pursuant to subsection 2.4B(iii) shall be applied first
to prepay the US Tranche Term Loans to the full extent thereof
and thereafter to prepay the CN Tranche Term Loans to the full
extent thereof, and shall be applied on a pro rata basis to
each scheduled installment of principal of the US Tranche Term
Loans and the CN Tranche Term Loans, as the case may be, set
forth in subsection 2.4A(i) or 2.4A(ii), respectively, that is
unpaid at the time of such prepayment.
(e) Application of Mandatory Prepayments of Revolving
Loans to US Tranche Revolving Loans and CN Tranche Revolving
Loans and Reduction of Revolving Loan Commitments. Subject to
subsection 2.4B(iv)(c), any mandatory prepayment of the
Revolving Loans pursuant to subsection 2.4B(iii) shall be
applied to prepay the US Tranche Revolving Loans and the CN
Tranche Revolving Loans on a pro rata basis in accordance with
the respective outstanding principal amounts thereof. Any
mandatory reductions of Revolving Loan Commitments pursuant to
subsection 2.4B(iii) shall be applied to permanently reduce
the US Tranche Revolving Loan Commitments and the CN Tranche
Revolving Loan Commitments on a pro rata basis in accordance
with the respective amounts thereof.
(f) Application of Mandatory Prepayments of CN
Tranche Term Loans to the Collateral Account. Notwithstanding
anything to the contrary in clause 2.4B(iii) and so long as no
Potential Event of Default or Event of Default has occurred
and is continuing, Canadian Borrower shall not be required to
repay
59
or prepay any amount or to hold any amount for or permit any
amount to be held by or for the benefit of any Lender such
that such amount would be actually or constructively paid or
repaid for purposes of paragraph 212(1)(b)(vii) of the Income
Tax Act (Canada) on or prior to the Term Loan Termination Date
if thereafter the total of all amounts actually or
constructively paid or repaid in respect of the CN Tranche
Term Loans would exceed 25% of the amount of the CN Tranche
Term Loan Commitments (such excess being the "EXCESS REPAYMENT
AMOUNT"). Where an Excess Repayment Amount exists, the
Canadian Borrower shall deposit cash in the amount of such
Excess Repayment Amount to the Collateral Account to cash
collateralize (but not prepay) the CN Tranche Term Loans.
(g) Application of Mandatory Prepayments upon
Specified Priority Secured Loan Default. Notwithstanding
anything to the contrary contained herein, upon the occurrence
and during the continuation of a Specified Priority Secured
Loan Default, any amount required to be applied first as a
mandatory prepayment of the Junior Term Loans under any of
subsections 2.4B(iii)(a)-(f) shall instead be applied first to
prepay the Loans (without a permanent reduction of the
Revolving Loan Commitments) and second to the extent such
amount exceeds the aggregate outstanding principal amount of
the Loans and the Revolving Loan Commitments, to prepay the
Junior Term Loans.
C. GENERAL PROVISIONS REGARDING PAYMENTS.
(i) Manner and Time of Payment. All payments by
Company to US Administrative Agent and by Canadian Borrower to CN Administrative
Agent of principal, interest, fees and other Obligations hereunder and under the
Notes shall be made in US Dollars in the case of US Dollar Loans and in Canadian
Dollars in the case of Canadian Dollar Loans in same day funds, without defense,
setoff or counterclaim, free of any restriction or condition, and delivered not
later than 12:00 Noon (New York time) on the date due at the Funding and Payment
Office for such Administrative Agent for the account of the applicable Lenders.
Funds received by either Administrative Agent after that time on such due date
shall be deemed to have been paid by such Borrower on the next succeeding
Business Day. In order to effect timely payment of any interest, fees,
commissions or other amounts due hereunder, such Borrower hereby authorizes each
Administrative Agent to charge its accounts with such Administrative Agent to
make Loans for its own account.
(ii) Application of Payments to Principal and
Interest. Except as provided in subsection 2.2C, all payments in respect of the
principal amount of any Loan shall include payment of accrued interest on the
principal amount being repaid or prepaid, and all such payments (and, in any
event, any payments in respect of any Loan on a date when interest is due and
payable with respect to such Loan) shall be applied to the payment of interest
before application to principal.
(iii) Apportionment of Payments. Aggregate principal
and interest payments shall be apportioned among all outstanding Loans to which
such payments relate, in each case proportionately to Lenders' respective Pro
Rata Shares of such Loans; provided that
60
payments of interest in respect of Loans which are Base Rate Loans or CN Prime
Rate Loans, as applicable, shall be apportioned ratably among Lenders in
proportion to the average daily amount of such Base Rate Loans or CN Prime Rate
Loans, as applicable, of each Lender outstanding during the period in which such
interest shall have accrued. Each Administrative Agent shall promptly distribute
to each Lender, at its primary address set forth below its name on the
appropriate signature page hereof or at such other address as such Lender may
request, its Pro Rata Share of all such payments received by such Administrative
Agent in respect of Loans and the commitment fees of such Lender when received
by such Administrative Agent pursuant to subsection 2.3. Notwithstanding the
foregoing provisions of this subsection 2.4C(iii), if, pursuant to the
provisions of subsection 2.6C, any Notice of Conversion/Continuation is
withdrawn as to any Affected Lender or if any Affected Lender makes Base Rate
Loans or CN Prime Rate Loans in lieu of its Pro Rata Share of any Eurodollar
Rate Loans or BA Rate Loans, each Administrative Agent shall give effect thereto
in apportioning payments received thereafter.
(iv) Payments on Business Days. Whenever any payment
to be made hereunder shall be stated to be due on a day that is not a Business
Day for the type of Loan in respect of which such payment is made, such payment
shall be made on the next succeeding Business Day and such extension of time
shall be included in the computation of the payment of interest hereunder or of
the commitment fees hereunder, as the case may be.
(v) Notation of Payment. Each Lender agrees that
before disposing of any Note held by it, or any part thereof (other than by
granting participations therein), Lender will make a notation thereon of all
Loans evidenced by that Note and all principal payments previously made thereon
and of the date to which interest thereon has been paid; provided that the
failure to make (or any error in the making of) a notation of any Loan made
under such Note shall not limit or otherwise affect the obligations of any
Borrower hereunder or under such Note with respect to any Loan or any payments
of principal or interest on such Note.
D. APPLICATION OF PROCEEDS OF COLLATERAL AND PAYMENTS UNDER
GUARANTIES.
(i) Application of Proceeds of Collateral. Except as
provided in subsection 2.4B(iii)(a) with respect to prepayments from Net Asset
Sale Proceeds, all proceeds received by Collateral Agent in respect of any sale
of, collection from, or other realization upon all or any part of the Collateral
under any Collateral Document upon the occurrence and during the continuation of
an Event of Default or Potential Event of Default, may, in the discretion of
Collateral Agent, be held by Collateral Agent as Collateral for, and/or (then or
at any time thereafter) applied in full or in part by Collateral Agent against,
the applicable Secured Obligations (as defined in such Collateral Document) as
provided in the Intercreditor Agreement.
(ii) Application of Payments Under Guaranties. All
payments received by Collateral Agent under the Guaranties shall be applied
promptly from time to time by Collateral Agent as provided in the Intercreditor
Agreement.
2.5 USE OF PROCEEDS.
A. US LOANS. The proceeds of the US Loans shall be applied by
Company to (i) repay loans made under the Post-Petition Incremental US Sublimit
and the Post-Petition
61
Incremental Canadian Sublimit of the DIP Credit Agreement, (ii) provide for the
working capital requirements and general corporate purposes of Company and its
Subsidiaries, which may include the making of intercompany loans to any of
Company's Wholly-Owned North American Subsidiaries, in accordance with
subsection 7.1(iv), for their own working capital requirements and general
corporate purposes and (iii) pay fees payable by Company in connection with this
Agreement and the Term Loan Agreement. In addition, Company may use the proceeds
of any US Loans to fund the Unsecured Settlement Distribution (as defined in the
Plan of Reorganization) in accordance with the Plan of Reorganization in an
aggregate amount not to exceed the Company-Funded Unsecured Settlement Amount.
B. CN LOANS. The proceeds of the CN Loans shall be applied by
Canadian Borrower to (i) refinance outstanding obligations of Canadian Borrower
to Company and pay fees under the Canadian CCAA Credit Agreement, (ii) pay
claims of creditors of Canadian Borrower and certain of its Subsidiaries under
the CCAA Plan of Arrangement and (iii) provide for the working capital
requirements and general corporate purposes of Canadian Borrower and its
Subsidiaries.
C. MARGIN REGULATIONS. No portion of the proceeds of any
borrowing under this Agreement shall be used by Company or any of its
Subsidiaries in any manner that might cause the borrowing or the application of
such proceeds to violate Regulation U, Regulation T or Regulation X of the Board
of Governors of the Federal Reserve System or any other regulation of such Board
or to violate the Exchange Act, in each case as in effect on the date or dates
of such borrowing and such use of proceeds.
2.6 SPECIAL PROVISIONS GOVERNING EURODOLLAR RATE LOANS.
Notwithstanding any other provision of this Agreement to the contrary,
the following provisions shall govern with respect to Eurodollar Rate Loans as
to the matters covered:
A. DETERMINATION OF APPLICABLE INTEREST RATE. As soon as
practicable after 10:00 A.M. (New York time) on each Interest Rate Determination
Date, US Administrative Agent shall determine (which determination shall, absent
manifest error, be final, conclusive and binding upon all parties) the interest
rate that shall apply to the Eurodollar Rate Loans for which an interest rate is
then being determined for the applicable Interest Period and shall promptly give
notice thereof (in writing or by telephone confirmed in writing) to Company and
each US Lender for Eurodollar Rate Loans to Company and to Canadian Borrower and
each CN Lender for Eurodollar Rate Loans to Canadian Borrower.
B. INABILITY TO DETERMINE APPLICABLE INTEREST RATE. If US
Administrative Agent shall have determined (which determination shall be final
and conclusive and binding upon all parties hereto), on any Interest Rate
Determination Date with respect to any Eurodollar Rate Loans, that by reason of
circumstances affecting the interbank Eurodollar market adequate and fair means
do not exist for ascertaining the interest rate applicable to such Loans on the
basis provided for in the definition of Adjusted Eurodollar Rate, US
Administrative Agent shall on such date give notice (by telefacsimile or by
telephone confirmed in writing) to each Borrower and each Lender of such
determination, whereupon (i) no Loans may be made as, or converted to,
Eurodollar Rate Loans until such time as US Administrative Agent notifies
Borrowers and
62
such Lenders that the circumstances giving rise to such notice no longer exist
and (ii) any Notice of Borrowing or Notice of Conversion/Continuation given by
any Borrower with respect to the Loans in respect of which such determination
was made shall be deemed to be rescinded by such Borrower.
C. ILLEGALITY OR IMPRACTICABILITY OF EURODOLLAR RATE LOANS. In
the event that on any date any Lender shall have determined (which determination
shall be final and conclusive and binding upon all parties hereto but shall be
made only after consultation with Borrowers and US Administrative Agent) that
the making, maintaining or continuation of its Eurodollar Rate Loans (i) has
become unlawful as a result of compliance by such Lender in good faith with any
law, treaty, governmental rule, regulation, guideline or order (or would
conflict with any such treaty, governmental rule, regulation, guideline or order
not having the force of law even though the failure to comply therewith would
not be unlawful) or (ii) has become impracticable, or would cause such Lender
material hardship, as a result of contingencies occurring after the date of this
Agreement which materially and adversely affect the interbank Eurodollar market
or the position of such Lender in that market, then, and in any such event, such
Lender shall be an "AFFECTED LENDER" and it shall on that day give notice (by
telefacsimile or by telephone confirmed in writing) to Borrowers and US
Administrative Agents of such determination (which notice US Administrative
Agent shall promptly transmit to each other US Lender and CN Administrative
Agent shall promptly transmit to each other CN Lender). Thereafter (a) the
obligation of the Affected Lender to make Loans as, or to convert Loans to,
Eurodollar Rate Loans shall be suspended until such notice shall be withdrawn by
the Affected Lender, (b) to the extent such determination by the Affected Lender
relates to a Eurodollar Rate Loan then being requested by a Borrower pursuant to
a Notice of Borrowing or a Notice of Conversion/Continuation, the Affected
Lender shall make such Loan as (or convert such Loan to, as the case may be) a
Base Rate Loan (c) the Affected Lender's obligation to maintain its outstanding
Eurodollar Rate Loans (the "AFFECTED LOANS"), shall be terminated at the earlier
to occur of the expiration of the Interest Period then in effect with respect to
the Affected Loans or when required by law, and (d) the Affected Loans shall
automatically convert into Base Rate Loans on the date of such termination.
Notwithstanding the foregoing, to the extent a determination by an Affected
Lender as described above relates to a Eurodollar Rate Loan then being requested
by a Borrower pursuant to a Notice of Borrowing or a Notice of
Conversion/Continuation, such Borrower shall have the option, subject to the
provisions of subsection 2.6D, to rescind such Notice of Borrowing or Notice of
Conversion/Continuation as to all Lenders by giving notice (by telefacsimile or
by telephone confirmed in writing) to the US Administrative Agent of such
rescission on the date on which the Affected Lender gives notice of its
determination as described above (which notice of rescission the US
Administrative Agent shall promptly transmit to each other Lender). Except as
provided in the immediately preceding sentence, nothing in this subsection 2.6C
shall affect the obligation of any Lender other than an Affected Lender to make
or maintain Loans as, or to convert Loans to, Eurodollar Rate Loans in
accordance with the terms of this Agreement.
D. COMPENSATION FOR BREAKAGE OR NON-COMMENCEMENT OF INTEREST
PERIODS. The applicable Borrower shall compensate each US Lender, upon written
request by that Lender (which request shall set forth the basis for requesting
such amounts), for all reasonable losses, expenses and liabilities (including,
without limitation, any interest paid by that Lender to lenders of funds
borrowed by it to make or carry its Eurodollar Rate Loans and any loss, expense
or
63
liability sustained by that Lender in connection with the liquidation or
re-employment of such funds) which that Lender may sustain: (i) if for any
reason (other than a default by that Lender) a borrowing of any Eurodollar Rate
Loan does not occur on a date specified therefor in a Notice of Borrowing or a
telephonic request for borrowing, or a conversion to or continuation of any
Eurodollar Rate Loan does not occur on a date specified therefor in a Notice of
Conversion/Continuation or a telephonic request for conversion or continuation,
(ii) if any prepayment or other principal payment or any conversion of any of
its Eurodollar Rate Loans occurs on a date prior to the last day of an Interest
Period applicable to that Loan, (iii) if any prepayment of any of its Eurodollar
Rate Loans is not made on any date specified in a notice of prepayment given by
a Borrower, or (iv) as a consequence of any other default by a Borrower in the
repayment of its Eurodollar Rate Loans when required by the terms of this
Agreement.
E. BOOKING OF EURODOLLAR RATE LOANS. Any Lender may make,
carry or transfer Eurodollar Rate Loans at, to, or for the account of any of its
branch offices or the office of an Affiliate of that Lender.
F. ASSUMPTIONS CONCERNING FUNDING OF EURODOLLAR RATE LOANS.
Calculation of all amounts payable to a Lender under this subsection 2.6 and
under subsection 2.7A shall be made as though that Lender had actually funded
each of its relevant Eurodollar Rate Loans through the purchase of a Eurodollar
deposit bearing interest at the rate obtained pursuant to clause (i) of the
definition of Adjusted Eurodollar Rate in an amount equal to the amount of such
Eurodollar Rate Loan and having a maturity comparable to the relevant Interest
Period and through the transfer of such Eurodollar deposit from an offshore
office of that Lender to a domestic office of that Lender in the United States
of America; provided, however, that each Lender may fund each of its Eurodollar
Rate Loans in any manner it sees fit and the foregoing assumptions shall be
utilized only for the purposes of calculating amounts payable under this
subsection 2.6 and under subsection 2.7A.
G. EURODOLLAR RATE LOANS AFTER DEFAULT. After the occurrence
of and during the continuation of a Potential Event of Default or an Event of
Default, (i) no Borrower may elect to have a Loan be made or maintained as, or
converted to, a Eurodollar Rate Loan after the expiration of any Interest Period
then in effect for that Loan and (ii) subject to the provisions of subsection
2.6D, any Notice of Borrowing or Notice of Conversion/Continuation given by any
Borrower with respect to a requested borrowing or conversion/continuation that
has not yet occurred shall be deemed to be rescinded by such Borrower.
2.7 INCREASED COSTS; TAXES; CAPITAL ADEQUACY.
A. COMPENSATION FOR INCREASED COSTS AND TAXES. Subject to the
provisions of subsection 2.7B, if any Lender shall determine (which
determination shall, absent manifest error, be final and conclusive and binding
upon all parties hereto) that any law, treaty or governmental rule, regulation
or order, or any change therein or in the interpretation, administration or
application thereof (including the introduction of any new law, treaty or
governmental rule, regulation or order), or any determination of a court or
Governmental Authority, in each case that becomes effective after the date
hereof, or compliance by such Lender with any guideline, request or directive
issued or made after the date hereof by any central bank or other governmental
or quasi-Governmental Authority (whether or not having the force of law):
64
(i) subjects such Lender (or its applicable lending
office) to any Covered Tax with respect to this Agreement or any of its
obligations hereunder or any payments to such Lender (or its applicable lending
office) of principal, interest, fees or any other amount payable hereunder;
(ii) imposes, modifies or holds applicable any
reserve (including without limitation any marginal, emergency, supplemental,
special or other reserve), special deposit, compulsory loan, FDIC insurance or
similar requirement against assets held by, or deposits or other liabilities in
or for the account of, or advances or loans by, or other credit extended by, or
any other acquisition of funds by, any office of such Lender (other than any
such reserve or other requirements with respect to Eurodollar Rate Loans that
are reflected in the definition of Adjusted Eurodollar Rate); or
(iii) imposes any other condition (other than with
respect to a Tax matter) on or affecting such Lender (or its applicable lending
office) or its obligations hereunder or the interbank Eurodollar market;
and the result of any of the foregoing is to increase the cost to such Lender of
agreeing to make, making or maintaining Loans or Commitments hereunder or to
reduce any amount received or receivable by such Lender (or its applicable
lending office) with respect thereto; then, in any such case, Borrowers shall
promptly pay to such Lender, upon receipt of the statement referred to in the
next sentence, such additional amount or amounts (in the form of an increased
rate of, or a different method of calculating, interest or otherwise as such
Lender in its sole discretion shall determine) as may be necessary to compensate
such Lender for any such increased cost or reduction in amounts received or
receivable hereunder; provided that a Lender shall not be entitled to avail
itself of the benefit of this subsection 2.7A to the extent that any such
increased cost or reduction in amounts was incurred more than twenty-four months
prior to the time it gives notice to Borrowers (as provided in the next
sentence) of the relevant circumstance, unless such circumstance arose or became
applicable retrospectively, in which case such Lender shall not be limited to
such twenty-four month period so long as such Lender has given such notice to
Borrowers no later than twenty-four months from the time circumstance became
applicable to such Lender. Such Lender shall deliver to Borrowers (with a copy
to Administrative Agent) a written statement, setting forth in reasonable detail
the basis for calculating the additional amounts owed to such Lender under this
subsection 2.7A, which statement shall be conclusive and binding upon all
parties hereto absent manifest error.
B. WITHHOLDING OF TAXES.
(i) Payments to Be Free and Clear. All sums payable
by any Borrower under this Agreement and the other Priority Secured Loan
Documents shall (except to the extent required by law) be paid free and clear
of, and without any deduction or withholding on account of, any Covered Tax
imposed, levied, collected, withheld or assessed by or within any country,
province, territory, state or any political subdivision of any of them or any
other jurisdiction from or to which a payment is made by or on behalf of such
Borrower or by any federation or organization of which the United States of
America or Canada or any such jurisdiction is a member at the time of payment.
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(ii) Grossing-up of Payments. If any Borrower or any
other Person is required by law to make any deduction or withholding on account
of any Covered Tax from any sum paid or payable by such Borrower to
Administrative Agent or any Lender under any of the Priority Secured Loan
Documents:
(a) such Borrower shall notify US
Administrative Agent, in the case of Company, or CN Administrative
Agent, in the case of Canadian Borrower, of any such requirement or any
change in any such requirement as soon as such Borrower becomes aware
of it;
(b) such Borrower shall pay any such Covered
Tax before the date on which penalties attach thereto, such payment to
be made (if the liability to pay is imposed on such Borrower) for its
own account or (if that liability is imposed on an Administrative Agent
or such Lender, as the case may be) on behalf of and in the name of
such Administrative Agent or such Lender;
(c) the sum payable by such Borrower in
respect of which the relevant deduction or withholding with respect to
such Covered Tax is required shall be increased to the extent necessary
to ensure that, after the making of that deduction or withholding, such
Administrative Agent or such Lender, as the case may be, receives on
the due date a net sum equal to what it would have received had no such
deduction or withholding been required or made; and
(d) within 30 days after the due date of
payment of any such Covered Tax which it is required by clause (b)
above to pay, such Borrower shall deliver to such Administrative Agent
evidence reasonably satisfactory to such Administrative Agent of such
deduction, withholding or payment and of the remittance of such Covered
Tax to the relevant taxing or other authority;
provided that, in respect of the US Loans and the CN Tranche Revolving
Loans, no Borrower will be required to pay any additional amount to any
Administrative Agent or any Lender under clause (c) above with respect
to the deduction, withholding or payment of any Covered Tax or under
clause (i) of subsection 2.7A or clause (i) of subsection 3.6 in
respect of any Covered Tax unless, after the date hereof (in the case
of each Lender listed on Schedule 2.1) or after the date of the
Assignment Agreement pursuant to which such Lender became a Lender (in
the case of each other Lender) there has been a Change in Law, which
shall result in a required increase in the rate of such deduction,
withholding or payment with respect to such Covered Tax from that in
effect at the date of this Agreement or at the date of such Assignment
Agreement, as the case may be, in respect of payments to such Lender or
its applicable lending office on such date.
(iii) Evidence of Exemption from Withholding Taxes.
(a) Each US Lender that is not a United
States Person within the meaning of Section 7701(a)(30) of the Internal
Revenue Code (for purposes of this subsection 2.7B(iii), a "NON-US
LENDER") shall deliver to US Administrative Agent and Company, on or
prior to the Closing Date (in the case of each US Lender listed on the
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signature pages hereof) or on or prior to the date of the Assignment
Agreement pursuant to which it becomes a US Lender (in the case of each
other US Lender), and at such other times as may be necessary in the
determination of Company or US Administrative Agent (each in the
reasonable exercise of its discretion), (X) two original copies of
Internal Revenue Service Form W-8BEN or W-8ECI (or any successor
forms), properly completed and duly executed by such US Lender,
together with any other form, certificate or statement of exemption
required under the Internal Revenue Code or the regulations issued
thereunder, in each case establishing that such US Lender is not
subject to any deduction or withholding of United States federal income
tax with respect to any payments to such US Lender of principal,
interest, fees or other amounts payable under any of the Priority
Secured Loan Documents or (Y) if such US Lender is not a "bank" or
other Person described in Section 881(c)(3) of the Internal Revenue
Code and cannot deliver either Internal Revenue Service Form W-8BEN or
W-8ECI pursuant to clause (X) above, a Certificate re Non-Bank Status
together with two original copies of the appropriate Internal Revenue
Service Form W-8 (or any successor form), properly completed and duly
executed by such US Lender, together with any other form, certificate
or statement of exemption required under the Internal Revenue Code or
the regulations issued thereunder, in each case establishing that such
US Lender is not subject to any deduction or withholding of United
States federal income tax with respect to any payments to such Lender
of interest payable under any of the Priority Secured Loan Documents;
provided, however, that in the event that a Non-U.S. Lender is an
entity that is not a corporation of U.S. federal income tax purposes,
such Non-U.S. Lender agrees, for purposes of clause (X) or (Y) of this
subsection 2.7B(iii)(a), to take any actions necessary, and to deliver
all additional (or alternative) Internal Revenue Service forms
necessary to establish in accordance with the Internal Revenue Code and
the Treasury Regulations promulgated thereunder that such Non-U.S.
Lender is not subject to any deduction or withholding of United States
federal income tax with respect to any payments to such Lender of
principal, interest, fees or other amounts payable under any of the
Loan Documents (including causing its partners, members, beneficiaries
or owners, and their beneficial owners, to take any actions and deliver
any forms necessary to establish such exemption).
(b) Each US Lender required to deliver any
forms, certificates or other evidence with respect to United States
federal income tax withholding matters pursuant to subsection
2.7B(iii)(a) hereby agrees, from time to time after the initial
delivery by such US Lender of such forms, certificates or other
evidence, whenever a lapse in time or change in circumstances renders
such forms, certificates or other evidence obsolete or inaccurate in
any material respect, that such US Lender shall (1) promptly deliver to
Administrative Agent and Company, two new original copies of Internal
Revenue Service Form W-8BEN or W-8ECI, or a Certificate re Non-Bank
Status and two original copies of the appropriate Internal Revenue
Service Form W-8, as the case may be, and any such other or additional
Internal Revenue Service form required to be delivered pursuant to the
provision of subsection 2.7B(iii)(a) properly completed and duly
executed by such US Lender, together with any other form, certificate
or statement of exemption confirming or establishing that such US
Lender is not subject to any deduction or withholding of United States
federal income tax with respect to payments to such US Lender under the
Priority Secured Loan Documents (provided that in the case of
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a new form or certificate to be provided under this section
2.7B(iii)(b)(1) due to a lapse in time, Company shall have first
notified US Lender and US Administrative Agent in writing at least 60
days prior to the expiration of such obsolete form or certificate that
such US Lender will be required to comply with such requirements) or
(2) notify US Administrative Agent and Company of its inability to
deliver any such forms, certificates or other evidence.
(c) Company shall not be required to pay any
additional amount to any US Lender in respect of any Covered Tax under
clause (c) of subsection 2.7B(ii) or clause (i) of subsection 2.7A,
clause (i) of subsection 3.6 or make any payments pursuant to section
2.7C, (x) in the case of a Non-US Lender, if (1) such US Lender shall
have failed to satisfy the requirements of clause (a) or (b) of this
subsection 2.7B(iii) and such Covered Tax would not have been required
to be imposed, deducted or withheld but for such failure or (2) to the
extent such amount results from any US Lender being treated as a
"conduit entity" within the meaning of Treasury Regulation Section
1.881-3 or any successor provision thereto or (y) in the case of any US
Lender, to the extent that such Covered Tax would not have been
required to be imposed, deducted or withheld but for the failure of
such US Lender to comply with any certification, information or other
reporting requirement as to nationality, residence or identity of such
US Lender which requirement such US Lender would otherwise be able to
comply with on the date requested by Company, provided that at least 60
days prior to the first payment date with respect to which Company
shall apply this clause (y), Company shall have notified such US
Lender, in writing, that such US Lender will be required to comply with
such certification, information or other reporting requirement and
provided, further, that such compliance is expressly required by law,
statute, treaty, ruling regulation or administrative practice of
jurisdiction imposing such Covered Tax as a necessary precondition to
reduction in the rate of, or exemption from, such Covered Tax; provided
that, if any US Lender shall have satisfied the requirements of
subsection 2.7B(iii) on the Closing Date (in the case of each US Lender
listed on the signature pages hereof) or on the date of the Assignment
Agreement pursuant to which it became a US Lender or date of request by
Company (in the case of each other US Lender) and thereafter the
requirements of subsection 2.7B(iii)(b), nothing in this subsection
2.7B(iii)(c) shall relieve Company of its obligation to pay any
additional amounts pursuant to clause (c) of subsection 2.7B(ii) in the
event that, as a result of any Change in Law occurring after the date
hereof (in the case of each US Lender listed on the signature pages
hereof) or after the date of the Assignment Agreement pursuant to which
such US Lender becomes a US Lender (in the case of each other US
Lender), such US Lender is no longer properly entitled to deliver any
forms, certificates, statements or other evidence at a subsequent date
establishing the fact that such US Lender is not subject to withholding
as described in subsection 2.7B(iii)(a) or clause (i) of subsection
3.6.
C. INDEMNIFICATION BY BORROWERS. Subject to subsection
2.7B(iii)(c), Company shall indemnify US Administrative Agent and each US Lender
and Canadian Borrower shall indemnify CN Administrative Agent and each CN
Lender, within 10 days after written demand therefor, for the full amount of any
Covered Taxes imposed with respect to this Agreement or any obligations of such
Lender or such Administrative Agent hereunder or any payments to such Lender (or
its applicable lending office) or such Administrative Agent hereunder (including
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Covered Taxes imposed or asserted on or attributable to amounts payable under
this Section) that are paid by such Administrative Agent or such Lender, as the
case may be, and any penalties, interest and reasonable expenses arising
therefrom or with respect thereto, whether or not such Covered Taxes were
correctly or legally imposed or asserted by the relevant Governmental Authority.
A certificate as to the amount of such payment or liability delivered to
Borrowers by a Lender, or by Administrative Agent on its own behalf or on behalf
of a Lender, shall be conclusive absent manifest error.
D. INCORRECTLY ASSESSED TAXES. Upon the reasonable request of
any Borrower, each Lender shall use reasonable efforts to cooperate with such
Borrower with a view to obtain a refund of any indemnified taxes or other taxes
which were not correctly or legally imposed or asserted by the relevant
Governmental Authority and for which such Borrower has indemnified such Lender
under this subsection 2.7 and, to the extent any such refund is paid to or to
the account of such Lender, such Lender shall promptly refund such amount to
such Borrower.
E. CAPITAL ADEQUACY ADJUSTMENT. If any Lender shall have
reasonably determined that the adoption, effectiveness, phase-in or
applicability after the date hereof of any law, rule or regulation (or any
provision thereof) regarding capital adequacy, or any change therein or in the
interpretation or administration thereof by any Governmental Authority, central
bank or comparable agency charged with the interpretation or administration
thereof, or compliance by any Lender (or its applicable lending office) with any
guideline, request or directive regarding capital adequacy (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 the capital of such Lender or any corporation controlling such Lender as a
consequence of, or with reference to, such Lender's Loans or Commitments or
Letters of Credit or participations therein or other obligations hereunder with
respect to the Loans or the Letters of Credit to a level below which such Lender
or such controlling corporation could have achieved but for such adoption,
effectiveness, phase-in, applicability, change or compliance (taking into
consideration the policies of such Lender or such controlling corporation with
regard to capital adequacy), then from time to time, within five Business Days
after receipt by Company and/or Canadian Borrower from such Lender of the
officer's certificate referred to in the next sentence, Company shall pay to any
such US Lender and Canadian Borrower shall pay to such CN Lender, such
additional amount or amounts as will compensate such Lender or such controlling
corporation on an after-tax basis for such reduction. Such Lender shall deliver
to the applicable Borrower (with a copy to the applicable Administrative Agent)
an officer's certificate, setting forth in reasonable detail the basis of the
calculation of such additional amounts, which statement shall be conclusive and
binding upon all parties hereto absent manifest error.
2.8 OBLIGATION OF LENDERS AND ISSUING LENDERS TO MITIGATE.
Each Lender and Issuing Lender agrees that, as promptly as practicable
after the officer of such Lender or Issuing Lender responsible for administering
the Loans or Letters of Credit of such Lender or Issuing Lender, as the case may
be, becomes aware of the occurrence of an event or the existence of a condition
that would cause such Lender to become an Affected Lender or that would entitle
such Lender or Issuing Lender to receive any payments under subsection 2.7 or
subsection 3.6, it will, to the extent not inconsistent with the internal
policies of such Lender or
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Issuing Lender and any applicable legal or regulatory restrictions, use
reasonable efforts (i) to make, issue, fund or maintain the Commitments of such
Lender or the affected Loans or Letters of Credit of such Lender or Issuing
Lender through another lending office or letter of credit office of such Lender
or Issuing Lender, or (ii) take such other measures as such Lender or Issuing
Lender may deem reasonable, if as a result thereof the circumstances that would
cause such Lender or Issuing Lender to be an Affected Lender would cease to
exist or the additional amounts that would otherwise be required to be paid to
such Lender or Issuing Lender pursuant to subsection 2.7 or subsection 3.6 would
be materially reduced and if, as determined by such Lender or Issuing Lender in
its sole discretion, the making, issuing, funding or maintaining of such
Commitments, Loans or Letters of Credit through such other lending or letter of
credit office or in accordance with such other measures, as the case may be,
would not otherwise materially adversely affect such Commitments or Loans or
Letters of Credit or the interests of such Lender or Issuing Lender; provided
that such Lender or Issuing Lender will not be obligated to utilize such other
lending office or letter of credit office pursuant to this subsection 2.8 unless
Company agrees to pay to any US Lender and Canadian Borrower agrees to pay to
any CN Lender all incremental expenses incurred by such Lender or Issuing Lender
as a result of utilizing such other lending or letter of credit office as
described in clause (i) above. An officer's certificate as to the amount of any
such expenses payable by Company or Canadian Borrower, as the case may be,
pursuant to this subsection 2.8 (setting forth in reasonable detail the basis
for requesting such amount) submitted by such Lender or Issuing Lender to
Company or Canadian Borrower (with a copy to Administrative Agent) shall be
conclusive absent manifest error.
If any such Lender does not make, issue, fund or maintain such
Commitments, Loans or Letters of Credit through such other lending office or
letter of credit office or take such other measures, as the case may be, then
Company or Canadian Borrower, as the case may be, shall have the right, but not
the obligation, upon notice to such Lender and the applicable Administrative
Agent, either to terminate such Lender's Commitments and prepay (without premium
or penalty) the then outstanding Loans and Letters of Credit, together with all
unpaid interest and fees in respect thereof, and all other Obligations owed to
such Lender or to cause such Lender to transfer and assign (without
representation or warranty) the then outstanding Commitments, Loans, Letters of
Credit and other Obligations owed to such Lender at a purchase price that is no
less than the aggregate amount of such Lender's Loans and its Pro Rata Share of
outstanding Letters of Credit, together with all accrued and unpaid interest and
fees in respect thereof, plus all other Obligations owing to such Lender, to an
Eligible Assignee, in accordance with the provisions of subsection 10.1B(i) and
(ii), that is able to make, issue, fund and maintain such Commitments, Loans or
Letters of Credit through a lending office or letter of credit office that will
avoid the need for, or minimize the amount of, additional amounts or other
payments which would otherwise be required to be paid by Company or Canadian
Borrower, as the case may be, under subsection 2.7 or subsection 3.6.
SECTION 3. LETTERS OF CREDIT
3.1 ISSUANCE OF LETTERS OF CREDIT AND LENDERS' PURCHASE OF
PARTICIPATIONS THEREIN.
A. LETTERS OF CREDIT. In addition to Borrowers requesting that
Lenders make Loans pursuant to subsection 2.1A, Company may request, in
accordance with the provisions of
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this subsection 3.1, from time to time during the period from the Closing Date
to but excluding the 30th day prior to the Commitment Termination Date, that one
or more Lenders having a US Tranche Revolving Loan Commitment issue Letters of
Credit for the account of Company for the purposes specified in the definitions
of Commercial Letters of Credit and Standby Letters of Credit. Subject to the
terms and conditions of this Agreement and in reliance upon the representations
and warranties of each Borrower herein set forth, any one or more Lenders having
a US Tranche Revolving Loan Commitment may, but (except as provided in
subsection 3.1B(ii)) shall not be obligated to, issue such Letters of Credit in
accordance with the provisions of this subsection 3.1; provided that Company
shall not request that any Lender having a US Tranche Revolving Loan Commitment
issue (and no Lender having a US Tranche Revolving Loan Commitment shall issue):
(i) any Letter of Credit if, after giving effect to
such issuance, the Total Utilization of US Tranche Revolving Loan Commitments
would exceed the US Tranche Revolving Loan Commitments then in effect;
(ii) any Letter of Credit if, after giving effect to
such issuance, the Letter of Credit Usage would exceed US$25,000,000;
(iii) [Intentionally Omitted];
(iv) [Intentionally Omitted];
(v) [Intentionally Omitted];
(vi) [Intentionally Omitted];
(vii) any Standby Letter of Credit having an
expiration date later than the earlier of (a) the Commitment Termination Date
and (b) the date that is one year from the date of issuance of such Standby
Letter of Credit; provided that the immediately preceding clause (b) shall not
prevent any Issuing Lender from agreeing that a Standby Letter of Credit will
automatically be extended for one or more successive periods not to exceed one
year each unless such Issuing Lender elects not to extend for any such
additional period; and provided, further, that such Issuing Lender shall elect
not to extend such Standby Letter of Credit if it has knowledge that an Event of
Default has occurred and is continuing (and has not been waived in accordance
with subsection 10.6) at the time such Issuing Lender must elect whether or not
to allow such extension;
(viii) [Intentionally Omitted];
(ix) any Standby Letter of Credit issued for the
purpose of supporting (a) trade payables if the aggregate maximum amount under
all Standby Letters of Credit issued for the payment of trade payables would
exceed US$750,000 or (b) any Indebtedness constituting "antecedent debt" (as
that term is used in Section 547 of the Bankruptcy Code);
(x) any Commercial Letter of Credit having an
expiration date (a) later than the earlier of (1) the date that is 30 days prior
to the Commitment Termination Date and (2)
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the date that is 180 days from the date of issuance of such Commercial Letter of
Credit or (b) that is otherwise unacceptable to the applicable Issuing Lender in
its reasonable discretion;
(xi) any Letter of Credit denominated in a currency
other than US Dollars or Canadian Dollars; or
(xii) any Letter of Credit to be issued at a tenor
other than on a sight basis.
B. MECHANICS OF ISSUANCE.
(i) Request for Issuance. Whenever Company desires
the issuance of a Letter of Credit, it shall deliver to US Administrative Agent
a Request for Issuance substantially in the form of Exhibit III annexed hereto
no later than 11:00 A.M. (New York City time) at least three Business Days (in
the case of Standby Letters of Credit) or five Business Days (in the case of
Commercial Letters of Credit), or in each case such shorter period as may be
agreed to by the Issuing Lender in any particular instance, in advance of the
proposed date of issuance. The Request for Issuance shall specify (a) the
proposed date of issuance (which shall be a Business Day), (b) whether the
Letter of Credit is to be a Standby Letter of Credit or a Commercial Letter of
Credit (c) the face amount of the Letter of Credit, (d) the expiration date of
the Letter of Credit, (e) the name and address of the beneficiary, (f) that,
after giving effect to the requested Letter of Credit, the Total Utilization of
US Tranche Revolving Commitments will not exceed the US Tranche Revolving
Commitments then in effect, (g) in the case of a Letter of Credit that Company
requests to be denominated in a currency other than US Dollars, the currency in
which Company requests such Letter of Credit to be issued and (h) either the
verbatim text of the proposed Letter of Credit or the proposed terms and
conditions thereof, including a precise description of any documents to be
presented by the beneficiary which, if presented by the beneficiary in
conformity with the terms and conditions of the Letter of Credit prior to the
expiration date of the Letter of Credit, would require the Issuing Lender to
make payment under the Letter of Credit; provided that the Issuing Lender, in
its reasonable discretion, may require changes in the text of the proposed
Letter of Credit or any documents described in or attached to the Request for
Issuance. No Letter of Credit shall require payment against a conforming demand
for payment to be made thereunder on the same Business Day (under the laws of
the jurisdiction in which the office of the Issuing Lender to which such demand
for payment is required to be presented is located) that such demand for payment
is presented if such presentation is made after 10:00 A.M. (in the time zone of
such office of the Issuing Lender) on such Business Day.
Company shall notify the applicable Issuing Lender
(and Administrative Agent, if US Administrative Agent is not such Issuing
Lender) prior to the issuance of any Letter of Credit if any of the matters to
which Company is required to certify in the applicable Request for Issuance is
no longer true and correct as of the proposed date of issuance of such Letter of
Credit, and upon the issuance of any Letter of Credit Company shall be deemed to
have re-certified, as of the date of such issuance, as to the matters to which
Company is required to certify in the applicable Request for Issuance.
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(ii) Determination of Issuing Lender. Upon receipt by
US Administrative Agent of a Request for Issuance pursuant to subsection 3.1B(i)
requesting the issuance of a Letter of Credit, if US Administrative Agent elects
to issue such Letter of Credit, US Administrative Agent shall promptly so notify
Company, and US Administrative Agent shall be the Issuing Lender with respect
thereto. If US Administrative Agent, in its sole discretion, elects not to issue
such Letter of Credit, US Administrative Agent shall promptly so notify Company,
whereupon Company may request any other Lender having a US Tranche Revolving
Loan Commitment to issue such Letter of Credit by delivering to such Lender a
copy of the applicable Request for Issuance. Any Lender having a US Tranche
Revolving Loan Commitment so requested to issue such Letter of Credit shall
promptly notify Company and US Administrative Agent whether or not, in its sole
discretion, it has elected to issue such Letter of Credit, and any such Lender
that so elects to issue such Letter of Credit shall be the Issuing Lender with
respect thereto. If all other Lenders having a US Tranche Revolving Loan
Commitment shall have declined to issue such Letter of Credit, notwithstanding
the prior election of US Administrative Agent not to issue such Letter of
Credit, US Administrative Agent shall be obligated to issue such Letter of
Credit and shall be the Issuing Lender with respect thereto, notwithstanding the
fact that the Letter of Credit Usage with respect to such Letter of Credit and
with respect to all other Letters of Credit issued by US Administrative Agent,
when aggregated with US Administrative Agent's outstanding Loans may exceed US
Administrative Agent's Commitment then in effect; provided that Administrative
Agent shall not be obligated to issue any Letter of Credit denominated in a
foreign currency (other than Canadian Dollars) which in the judgment of US
Administrative Agent is not readily and freely available.
(iii) Issuance of Letter of Credit. Upon satisfaction
or waiver (in accordance with subsection 10.6) of the conditions set forth in
subsection 4.3, the Issuing Lender shall issue the requested Letter of Credit in
accordance with the Issuing Lender's standard operating procedures.
(iv) Notification to Lenders. Upon the issuance of or
amendment to any Standby Letter of Credit the applicable Issuing Lender shall
promptly notify US Administrative Agent and Company of such issuance or
amendment, which notice shall be accompanied by a copy of such Standby Letter of
Credit or amendment. Upon receipt of such notice (or, if US Administrative Agent
is the Issuing Lender, together with such notice), US Administrative Agent shall
notify each Lender having a US Tranche Revolving Loan Commitment in writing of
such issuance or amendment and the amount of such Lender's respective
participation in such Standby Letter of Credit or amendment. If the Issuing
Lender of a Commercial Letter of Credit is other than US Administrative Agent,
such Issuing Lender will send by facsimile transmission to US Administrative
Agent, promptly on the first Business Day of each week, a report of its daily
aggregate maximum amount available for drawing under such Commercial Letter of
Credit for the previous week. Upon receipt of such report, US Administrative
Agent shall notify each Lender having a US Tranche Revolving Loan Commitment in
writing of the contents thereof.
C. LENDERS' PURCHASE OF PARTICIPATIONS IN LETTERS OF CREDIT.
Immediately upon the issuance of each Letter of Credit, each Lender having a US
Tranche Revolving Loan Commitment shall be deemed to, and hereby agrees to, have
irrevocably purchased from the Issuing Lender a participation in such Letter of
Credit and drawings thereunder in an amount
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equal to such Lender's Pro Rata Share of the maximum amount that is or at any
time may become available to be drawn thereunder.
3.2 LETTER OF CREDIT FEES.
Company agrees to pay the following fees with respect to Letters of
Credit issued hereunder:
(i) to the applicable Issuing Lender, for its own
account with respect to each Standby Letter of Credit, a fronting fee equal to
the greater of US$500 per year per Letter of Credit and 0.25% per annum of the
daily maximum amount available to be drawn under each such Letter of Credit, and
with respect to each Commercial Letter of Credit a fronting fee equal to 0.25%
per annum of the daily maximum amount available to be drawn under each such
Letter of Credit. Fronting fees are payable from and including the issue date,
in arrears, on and to (but excluding) each January 15, April 15, July 15, and
October 15 of each year and will be computed on the basis of a 360-day year for
the actual number of days elapsed;
(ii) to US Administrative Agent, for the account of
the participating Lenders having a US Tranche Revolving Loan Commitment, with
respect to each Standby Letter of Credit and Commercial Letter of Credit, a per
annum letter of credit fee equal to 3.75% per annum, computed on the daily
maximum amount available to be drawn under such Letters of Credit. Such fee is
payable from and including the issue date, in arrears, on and to (but excluding)
each January 15, April 15, July 15 and October 15 of each year and will be
computed on the basis of a 360-day year for the actual number of days elapsed;
and
(iii) with respect to the issuance, amendment or
transfer of each Letter of Credit and each payment of a drawing made thereunder
(without duplication of the fees payable under clauses (i) and (ii) above),
documentary and processing charges in accordance with such Issuing Lender's
standard schedule for such charges in effect at the time of such issuance,
amendment, transfer or payment, as the case may be.
For purposes of calculating any fees payable under
clauses (i) and (ii) of this subsection 3.2, (1) the daily amount available to
be drawn under any Letter of Credit as of any date of determination shall be
determined as of the close of business on such date and (2) any amount described
in such clauses which is denominated in a currency other than US Dollars shall
be valued based on the applicable Exchange Rate for such currency as of the
applicable date of determination. Promptly upon receipt of any amount described
in clause (i) of this subsection 3.2, US Administrative Agent shall distribute
to each Lender having a US Tranche Revolving Loan Commitment its Pro Rata Share
of such amount. Notwithstanding the currency the Letter of Credit is denominated
in, fees payable under clauses (i) and (ii) of this subsection 3.2 shall be paid
in US Dollars.
3.3 DRAWINGS AND REIMBURSEMENT OF AMOUNTS PAID UNDER LETTERS OF CREDIT.
A. RESPONSIBILITY OF ISSUING LENDER WITH RESPECT TO DRAWINGS.
In determining whether to honor any drawing under any Letter of Credit by the
beneficiary thereof, the Issuing Lender shall be responsible only to exercise
reasonable care to determine that the
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documents required to be delivered under such Letter of Credit have been
delivered and that they substantially comply on their face with the requirements
of such Letter of Credit.
B. REIMBURSEMENT BY COMPANY OF AMOUNTS PAID UNDER LETTERS OF
CREDIT. If an Issuing Lender has determined to honor a drawing under a Letter of
Credit issued by it, such Issuing Lender shall immediately notify Company and US
Administrative Agent, and Company shall reimburse such Issuing Lender on or
before the Business Day immediately following the date on which such drawing is
honored (the "REIMBURSEMENT DATE") in an amount in US Dollars and in same day
funds equal to the amount of such drawing (which amount, in the case of a
drawing under a Letter of Credit which is denominated in a currency other than
US Dollars, shall be calculated by reference to the applicable Exchange Rate on
the date such drawing is honored); provided that, notwithstanding anything
contained in this Agreement to the contrary, (i) unless Company shall have
notified US Administrative Agent and such Issuing Lender prior to 11:00 A.M.
(New York City time) on the date such drawing is honored that Company intends to
reimburse such Issuing Lender for the amount of such drawing with funds other
than the proceeds of US Tranche Revolving Loans, Company shall be deemed to have
given a timely Notice of Borrowing to US Administrative Agent requesting Lenders
to make US Tranche Revolving Loans that are Base Rate Loans on the Reimbursement
Date in an amount in US Dollars equal to the amount of such drawing (which
amount, in the case of a payment under a Letter of Credit which is denominated
in a currency other than US Dollars, shall be calculated by reference to the
applicable Exchange Rate on the date such drawing is honored) and (ii) subject
to satisfaction or waiver of the conditions specified in subsection 4.2B,
Lenders having a US Tranche Revolving Loan Commitment shall, on the
Reimbursement Date, make US Tranche Revolving Loans that are Base Rate Loans in
the amount of such drawing, the proceeds of which shall be applied directly by
US Administrative Agent to reimburse such Issuing Lender for the amount of such
drawing; and provided, further, that if for any reason proceeds of US Tranche
Revolving Loans are not received by such Issuing Lender on the Reimbursement
Date in an amount equal to the amount of such drawing, Company shall reimburse
such Issuing Lender, on demand, in an amount in same day funds equal to the
excess of the amount of such drawing over the aggregate amount of such US
Tranche Revolving Loans, if any, that are so received. Nothing in this
subsection 3.3B shall be deemed to relieve any Lender having a US Tranche
Revolving Loan Commitment from its obligation to make US Tranche Revolving Loans
on the terms and conditions set forth in this Agreement, and Company shall
retain any and all rights it may have against any Lender having a US Tranche
Revolving Loan Commitment resulting from the failure of such Lender to make such
US Tranche Revolving Loans under this subsection 3.3B.
C. PAYMENT BY LENDERS HAVING A US TRANCHE REVOLVING LOAN
COMMITMENT OF UNREIMBURSED AMOUNTS PAID UNDER LETTERS OF CREDIT.
(i) Payment by Lenders having a US Tranche Revolving
Loan Commitment. If Company shall fail for any reason to reimburse any Issuing
Lender as provided in subsection 3.3B in an amount in US Dollars (calculated, in
the case of a drawing under a Letter of Credit denominated in a currency other
than US Dollars, by reference to the applicable Exchange Rate on the date such
drawing is honored) equal to the amount of any drawing honored by such Issuing
Lender under a Letter of Credit issued by it, such Issuing Lender shall promptly
notify US Administrative Agent and US Administrative Agent shall thereafter
notify
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each other Lender having a US Tranche Revolving Loan Commitment of the
unreimbursed amount of such drawing and of such other Lender's respective
participation therein based on such Lender's Pro Rata Share. Each Lender having
a US Tranche Revolving Loan Commitment shall make available to such Issuing
Lender an amount equal to its respective participation, in US Dollars and in
same day funds, at the office of such Issuing Lender specified in such notice,
not later than 11:30 A.M. (New York City time) on the first business day (under
the laws of the jurisdiction in which such office of such Issuing Lender is
located) after the date notified by such Issuing Lender. If any Lender having a
US Tranche Revolving Loan Commitment fails to make available to such Issuing
Lender on such business day the amount of such Lender's participation in such
Letter of Credit as provided in this subsection 3.3C, such Issuing Lender shall
be entitled to recover such amount on demand from such Lender together with
interest thereon at the rate customarily used by such Issuing Lender for the
correction of errors among banks for three Business Days and thereafter at the
Base Rate. Nothing in this subsection 3.3C shall be deemed to prejudice the
right of any Lender having a US Tranche Revolving Loan Commitment to recover
from any Issuing Lender any amounts made available by such Lender to such
Issuing Lender pursuant to this subsection 3.3C if it is determined by the final
judgment of a court of competent jurisdiction that the payment with respect to a
Letter of Credit by such Issuing Lender in respect of which payment was made by
such Lender constituted gross negligence or willful misconduct as determined by
a final judgment of a court of competent jurisdiction on the part of such
Issuing Lender.
(ii) Distribution to Lenders having a US Tranche
Revolving Loan Commitment of Reimbursements Received From Company. If any
Issuing Lender shall have been reimbursed by other Lenders having a US Tranche
Revolving Loan Commitment pursuant to subsection 3.3C(i) for all or any portion
of any drawing honored by such Issuing Lender under a Letter of Credit issued by
it, such Issuing Lender shall distribute to each other Lender having a US
Tranche Revolving Loan Commitment that has paid all amounts payable by it under
subsection 3.3C(i) with respect to such drawing such other Lender's Pro Rata
Share of all payments subsequently received by such Issuing Lender from Company
in reimbursement of such drawing when such payments are received. Any such
distribution shall be made to a Lender having a US Tranche Revolving Loan
Commitment at its primary address set forth below its name on the appropriate
signature page hereof or at such other address as such Lender may request.
D. INTEREST ON AMOUNTS PAID UNDER LETTERS OF CREDIT.
(i) Payment of Interest by Company. Company agrees to
pay to each Issuing Lender, with respect to drawings made under any Letters of
Credit issued by it, interest on the amount paid by such Issuing Lender in
respect of each such drawing from the date of such drawing to but excluding the
date such amount is reimbursed by Company (including any such reimbursement out
of the proceeds of the US Tranche Revolving Loans pursuant to subsection 3.3B)
at a rate equal to (a) for the period from the date of such drawing to but
excluding the Reimbursement Date, the rate then in effect under this Agreement
with respect to US Tranche Revolving Loans that are Base Rate Loans and (b)
thereafter, a rate which is 2% per annum in excess of the rate of interest
otherwise payable under this Agreement with respect to US Tranche Revolving
Loans that are Base Rate Loans. Interest payable pursuant to this subsection
3.3D(i) shall be computed on the basis of a 365-day or 366-day year, as the case
may be, for the actual
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number of days elapsed in the period during which it accrues and shall be
payable on demand or, if no demand is made, on the date on which the related
drawing under a Letter of Credit is reimbursed in full.
(ii) Distribution of Interest Payments by Issuing
Lender. Promptly upon receipt by any Issuing Lender of any payment of interest
pursuant to subsection 3.3D(i) with respect to a drawing under a Letter of
Credit issued by it, (a) such Issuing Lender shall distribute to each other
Lender having a US Tranche Revolving Loan Commitment, out of the interest
received by such Issuing Lender in respect of the period from the date of such
drawing to but excluding the date on which such Issuing Lender is reimbursed for
the amount of such drawing (including any such reimbursement out of the proceeds
of US Tranche Revolving Loans pursuant to subsection 3.3B), the amount that such
other Lender having a US Tranche Revolving Loan Commitment would have been
entitled to receive in respect of the letter of credit fee that would have been
payable in respect of such Letter of Credit for such period pursuant to
subsection 3.2 if no drawing had been made under such Letter of Credit, and (b)
if such Issuing Lender shall have been reimbursed by other Lenders having a US
Tranche Revolving Loan Commitment pursuant to subsection 3.3C(i) for all or any
portion of such drawing, such Issuing Lender shall distribute to each other
Lender having a US Tranche Revolving Loan Commitment that has paid all amounts
payable by it under subsection 3.3C(i) with respect to such drawing such other
Lender's Pro Rata Share of any interest received by such Issuing Lender in
respect of that portion of such drawing so reimbursed by other Lenders having a
US Tranche Revolving Loan Commitment for the period from the date on which such
Issuing Lender was so reimbursed by other Lenders having a US Tranche Revolving
Loan Commitment to but excluding the date on which such portion of such drawing
is reimbursed by Company. Any such distribution shall be made to a Lender having
a US Tranche Revolving Loan Commitment at its primary address set forth below
its name on the appropriate signature page hereof or at such other address as
such Lender may request.
3.4 OBLIGATIONS ABSOLUTE.
The obligation of Company to reimburse each Issuing Lender for drawings
made under the Letters of Credit issued by it and to repay any US Tranche
Revolving Loans made by Lenders having a US Tranche Revolving Loan Commitment
pursuant to subsection 3.3B and the obligations of Lenders having a US Tranche
Revolving Loan Commitment under subsection 3.3C(i) shall be unconditional and
irrevocable and shall be paid strictly in accordance with the terms of this
Agreement under all circumstances including, without limitation, any of the
following circumstances:
(i) any lack of validity or enforceability of any
Letter of Credit;
(ii) the existence of any claim, set-off, defense or
other right which Company or any Lender may have at any time against a
beneficiary or any transferee of any Letter of Credit (or any Persons for whom
any such transferee may be acting), any Issuing Lender or other Lender or any
other Person or, in the case of a Lender, against Company, whether in connection
with this Agreement, the transactions contemplated herein or any unrelated
transaction (including any underlying transaction between Company or one of its
Subsidiaries and the beneficiary for which any Letter of Credit was procured);
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(iii) any draft or other document presented under any
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;
(iv) payment by the applicable Issuing Lender under
any Letter of Credit against presentation of a draft or other document that does
not substantially comply with the terms of such Letter of Credit;
(v) any adverse change in the business, operations,
properties, assets, condition (financial or otherwise) or prospects of Company
or any of its Subsidiaries;
(vi) any breach of this Agreement or any other
Priority Secured Loan Document by any party thereto;
(vii) any other circumstance or happening whatsoever,
whether or not similar to any of the foregoing; or
(viii) the fact that an Event of Default or a
Potential Event of Default shall have occurred and be continuing;
provided, in each case, that payment by the applicable Issuing Lender under the
applicable Letter of Credit shall not have constituted gross negligence or
willful misconduct of such Issuing Lender under the circumstances in question
(as determined by a final judgment of a court of competent jurisdiction).
3.5 INDEMNIFICATION; NATURE OF ISSUING LENDERS' DUTIES.
A. INDEMNIFICATION. In addition to amounts payable as provided
in subsection 3.6, each Borrower hereby agrees to protect, indemnify, pay and
save harmless each Issuing Lender from and against any and all claims, demands,
liabilities, damages, losses, costs, charges and expenses (including reasonable
fees, expenses and disbursements of outside counsel and allocated costs of
internal counsel) which such Issuing Lender may incur or be subject to as a
consequence, direct or indirect, of (i) the issuance of any Letter of Credit by
such Issuing Lender, other than as a result of (a) the gross negligence or
willful misconduct of such Issuing Lender as determined by a final judgment of a
court of competent jurisdiction or (b) subject to the following clause (ii), the
wrongful dishonor by such Issuing Lender of a proper demand for payment made
under any Letter of Credit issued by it or (ii) the failure of such Issuing
Lender to honor a drawing under any such Letter of Credit as a result of any act
or omission, whether rightful or wrongful, of any present or future de jure or
de facto government or Governmental Authority (all such acts or omissions herein
called "GOVERNMENTAL ACTS").
B. NATURE OF ISSUING LENDERS' DUTIES. As between Company on
the one hand and any Issuing Lender on the other hand, Company assumes all risks
of the acts and omissions of, or misuse of the Letters of Credit issued by such
Issuing Lender by, the respective beneficiaries of such Letters of Credit. In
furtherance and not in limitation of the foregoing, such Issuing Lender shall
not be responsible for: (i) the form, validity, sufficiency, accuracy,
genuineness or legal effect of any document submitted by any party in connection
with the application for and issuance of any such Letter of Credit, even if it
should in fact prove to be in
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any or all respects invalid, insufficient, inaccurate, fraudulent or forged;
(ii) the validity or sufficiency of any instrument transferring or assigning or
purporting to transfer or assign any such Letter of Credit or the rights or
benefits thereunder or proceeds thereof, in whole or in part, which may prove to
be invalid or ineffective for any reason; (iii) failure of the beneficiary of
any such Letter of Credit to comply fully with any conditions required in order
to draw upon such Letter of Credit; (iv) errors, omissions, interruptions or
delays in transmission or delivery of any messages, by mail, cable, telegraph,
telex or otherwise, whether or not they be in cipher; (v) errors in
interpretation of technical terms; (vi) any loss or delay in the transmission or
otherwise of any document required in order to make a drawing under any such
Letter of Credit or of the proceeds thereof; (vii) the misapplication by the
beneficiary of any such Letter of Credit of the proceeds of any drawing under
such Letter of Credit; or (viii) any consequences arising from causes beyond the
control of such Issuing Lender, including, without limitation, any Governmental
Acts, and none of the above shall affect or impair, or prevent the vesting of,
any of such Issuing Lender's rights or powers hereunder.
In furtherance and extension and not in limitation of the specific
provisions set forth in the first paragraph of this subsection 3.5B, any action
taken or omitted by any Issuing Lender under or in connection with the Letters
of Credit issued by it or any documents and certificates delivered thereunder,
if taken or omitted without gross negligence or willful misconduct, shall not
put such Issuing Lender under any resulting liability to Company.
Notwithstanding anything to the contrary contained in this subsection
3.5, Company shall retain any and all rights it may have against any Issuing
Lender for any liability arising solely out of the gross negligence or willful
misconduct of such Issuing Lender, as determined by a final judgment of a court
of competent jurisdiction.
3.6 INCREASED COSTS AND TAXES RELATING TO LETTERS OF CREDIT.
Subject to subsection 2.7B, in the event that any Issuing
Lender or Lender having a US Tranche Revolving Loan Commitment shall determine
(which determination shall, absent manifest error, be final and conclusive and
binding upon all parties hereto) that any law, treaty or governmental rule,
regulation or order, or any change therein or in the interpretation,
administration or application thereof (including the introduction of any new
law, treaty or governmental rule, regulation or order), or any determination of
a court or Governmental Authority, in each case that becomes effective after the
date hereof, or compliance by any Issuing Lender or Lender having a US Tranche
Revolving Loan Commitment with any guideline, request or directive issued or
made after the date hereof by any central bank or other governmental or
quasi-Governmental Authority (whether or not having the force of law):
(i) subjects such Issuing Lender or Lender (or its
applicable lending or letter of credit office) to any Covered Tax with respect
to the issuing or maintaining of any Letters of Credit or the purchasing or
maintaining of any participations therein or any other obligations under this
Section 3, whether directly or by such being imposed on or suffered by any
particular Issuing Lender;
(ii) imposes, modifies or holds applicable any
reserve (including, without limitation, any marginal, emergency, supplemental,
special or other reserve), special
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deposit, compulsory loan, FDIC insurance or similar requirement in respect of
any Letters of Credit issued by any Issuing Lender or participations therein
purchased by any Lender having a US Tranche Revolving Loan Commitment; or
(iii) imposes any other condition (other than with
respect to a Tax matter) on or affecting such Issuing Lender or Lender having a
US Tranche Revolving Loan Commitment (or its applicable lending or letter of
credit office) regarding this Section 3 or any Letter of Credit or any
participation therein;
and the result of any of the foregoing is to increase the cost to such Issuing
Lender or Lender having a US Tranche Revolving Loan Commitment of agreeing to
issue, issuing or maintaining any Letter of Credit or agreeing to purchase,
purchasing or maintaining any participation therein or to reduce any amount
received or receivable by such Issuing Lender or Lender (or its applicable
lending or letter of credit office) with respect thereto; then, in any case,
Company shall promptly pay to such Issuing Lender or Lender, upon receipt of the
statement referred to in the next sentence, such additional amount or amounts as
may be necessary to compensate such Issuing Lender or Lender for any such
increased cost or reduction in amounts received or receivable hereunder. Such
Issuing Lender or Lender shall deliver to Company a written statement, setting
forth in reasonable detail the basis for calculating the additional amounts owed
to such Issuing Lender or Lender under this subsection 3.6, which statement
shall be conclusive and binding upon all parties hereto absent manifest error.
3.7 EXISTING LETTERS OF CREDIT.
Notwithstanding anything to the contrary herein, as of the
Closing Date, all of the Existing Letters of Credit shall be deemed to be
Letters of Credit issued hereunder and shall be subject to all of the terms and
provisions of this Agreement and the other Priority Secured Loan Documents,
including all terms and provisions of this Agreement and the other Priority
Secured Loan Documents applicable to Letters of Credit issued hereunder, and
each person liable as an account party thereunder shall be automatically
released and Company shall be deemed to be the account party for all purposes
thereunder and hereunder. Each Lender agrees that its obligations with respect
to Letters of Credit pursuant to this Section 3 shall include the Existing
Letters of Credit and Company hereby (a) represents, warrants, agrees, covenants
and reaffirms that it has no (and it permanently and irrevocably waives and
releases Administrative Agent and Lenders from any, to the extent arising on or
prior to the Closing Date) defense, set off, claim or counterclaim against
Administrative Agent or any Lender in regard to its Obligations in respect of
such Existing Letters of Credit and (b) reaffirms its obligation to reimburse
Issuing Lender for honored drawings under such Existing Letters of Credit in
accordance with the terms and provisions of this Agreement and the other
Priority Secured Loan Documents applicable to Letters of Credit issued
hereunder. With respect to each Existing Letter of Credit, for the period
commencing on the Closing Date to and including the expiration date of any such
Existing Letter of Credit, Company shall pay all fees and commissions set forth
in subsection 3.2 at the times and in the manner set forth therein. Except to
the extent otherwise set forth in this Section 3, BTCo, as Issuing Lender for
the Existing Letters of Credit, shall not have any obligation to extend or renew
any Existing Letter of Credit.
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SECTION 4. CONDITIONS TO LOANS AND LETTERS OF CREDIT
The obligations of Lenders to make Loans and issue Letters of Credit
hereunder are subject to the satisfaction of the following conditions.
4.1 CONDITIONS TO INITIAL LOANS.
The obligations of Lenders to make the initial Loans are, in addition
to the conditions precedent specified in subsection 4.2, subject to prior or
concurrent satisfaction of the following conditions:
A. LOAN PARTY DOCUMENTS. On or before the Closing Date,
Company shall have delivered and shall have caused each other Loan Party to
deliver to Lenders (or to US Administrative Agent for Lenders with sufficient
originally executed copies, where appropriate, for CN Administrative Agent, each
Lender and their counsel) the following with respect to Company or such Loan
Party, as the case may be, each, unless otherwise noted, dated the Closing Date:
(i) Certified copies of the constating documents of
such Person, together, except as set forth on Schedule 4.1A(i), with a good
standing certificate (or equivalent thereto) from its jurisdiction of
organization and, except where failure to be in good standing, individually or
in the aggregate, could not reasonably be expected to result in a Material
Adverse Effect, each other state or province in which it is qualified as a
foreign organization to do business and, except where failure to be in good
standing, individually or in the aggregate, could not reasonably be expected to
result in a Material Adverse Effect, a certificate or other evidence of good
standing as to payment of any applicable franchise or similar taxes from the
appropriate taxing authority of each of such jurisdictions, each dated a recent
date prior to the Closing Date;
(ii) Copies of the Bylaws or limited liability
company agreement of such Person, as applicable, certified as of the Closing
Date by its secretary or an assistant secretary;
(iii) Resolutions of the Board of Directors or
members of such Person approving and authorizing the execution, delivery and
performance of the Priority Secured Loan Documents to which it is a party,
certified as of the Closing Date by its secretary or an assistant secretary as
being in full force and effect without modification or amendment;
(iv) Signature and incumbency certificates of the
officers of such Person executing this Agreement and the other Priority Secured
Loan Documents to which it is a party;
(v) Executed originals of this Agreement, the Notes
(duly executed in accordance with subsection 2.1E, drawn to the order of each
applicable Lender and with appropriate insertions) and the other Priority
Secured Loan Documents to which such Person is a party; and
(vi) Such other documents as US Administrative Agent
may reasonably request.
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B. ORGANIZATIONAL AND CAPITAL STRUCTURE, OWNERSHIP,
MANAGEMENT, ETC.
(i) Capital Structure and Ownership. The capital and
tax structure and ownership of Company and its Subsidiaries, before and after
giving effect to the effectiveness of the Plan of Reorganization and the CCAA
Plan of Arrangement, shall be as set forth on Schedule 4.1B(i) annexed hereto.
After giving effect to the effectiveness of the Plan of Reorganization and the
CCAA Plan of Arrangement, (a) the Sponsors shall beneficially own 100% of the
voting stock of the Company and (b) on the Closing Date Company shall
beneficially own 100% of the equity interests of Canadian Borrower.
(ii) Management; Employment Contracts. The management
structure of Company after giving effect to the effectiveness of the Plan of
Reorganization shall be as set forth on Schedule 4.1B(ii) annexed hereto (except
to the extent that any members of senior management voluntarily decide not to
continue their employment with Company), and US Administrative Agent shall have
received copies of, and shall be reasonably satisfied with the form and
substance of, any and all employment contracts with senior management of each of
Company and its Subsidiaries.
C. NECESSARY CONSENTS. Each Borrower shall have obtained all
Governmental Authorizations and consents of other Persons, in each case that are
necessary or advisable in connection with the effectiveness of the Plan of
Reorganization or the CCAA Plan of Arrangement, as the case may be, the
transactions contemplated by the Priority Secured Loan Documents and the
continued operation of the business conducted by Company and its Subsidiaries in
substantially the same manner as conducted prior to the effectiveness of either
of the Plan of Reorganization and the CCAA Plan of Arrangement, and each of the
foregoing shall be in full force and effect. All applicable waiting periods
shall have expired without any action being taken or threatened by any competent
authority which would restrain, prevent or otherwise impose adverse conditions
on the effectiveness of the Plan of Reorganization or the CCAA Plan of
Arrangement, as the case may be, or the financing thereof, and no action,
request for stay, petition for review or rehearing, reconsideration or appeal
with respect to any of the foregoing shall be pending, and the time for any
applicable agency to take action to set aside its consent on its own motion
shall have expired. Each Borrower shall have delivered an Officer's Certificate
in form and substance reasonably satisfactory to US Administrative Agent
confirming the foregoing matters and any other evidence requested by US
Administrative Agent in support thereof.
D. PLAN OF REORGANIZATION; CONFIRMATION ORDER; DISCHARGE OF
PRE-PETITION CREDIT AGREEMENT AND DIP CREDIT AGREEMENT AND INTERCOMPANY DEBT.
(i) The Plan of Reorganization shall have been
approved by the creditors of Company and the Subsidiary Debtors and confirmed by
the Bankruptcy Court pursuant to the Confirmation Order. The Confirmation Order
shall (a) have been entered by the Bankruptcy Court and (b) grant First Priority
Liens in the Collateral and the Closing Date Mortgaged Properties securing the
Obligations in favor of the Collateral Agent for the benefit of the Lenders.
There shall have been no determination that Company, the Subsidiary Debtors or
Sponsors did not solicit approvals of the Plan of Reorganization in good faith
pursuant to Section 1125(e) of the Bankruptcy Code. The Confirmation Order shall
be in full force and effect and
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shall not have been reversed, modified, amended or stayed pending any appeal,
and at least eleven days shall have elapsed since the entry of the Confirmation
Order.
(ii) The Plan of Reorganization and the CCAA Plan of
Arrangement shall have become simultaneously effective in accordance with their
respective terms no later than March 31, 2002 and shall have been substantially
consummated.
(iii) (a) Indebtedness under the Pre-Petition Credit
Agreement shall be satisfied by application of the Restructured Term Loans under
the Term Loan Agreement and the issuance of equity of Company to Sponsors, (b)
all Existing Letters of Credit issued thereunder shall be deemed issued under
this Agreement, (c) commitments to lend and make other extensions of credit
thereunder shall be terminated, (d) Liens securing Indebtedness and the other
obligations thereunder shall be terminated, and (e) all documents or instruments
necessary to release and evidence the release of all Liens thereunder shall be
delivered to Collateral Agent.
(iv) (a) Indebtedness under the Post-Default Advances
Sublimit under the DIP Credit Agreement shall be satisfied by application of
Restructured Term Loans under the Term Loan Agreement and the issuance of equity
to the Sponsors, (b) all Existing Letters of Credit issued under the DIP Credit
Agreement shall be deemed issued under this Agreement, (c) all other
Indebtedness under the DIP Credit Agreement shall have been repaid in full in
cash, (d) commitments to lend and make other extensions of credit under the DIP
Credit Agreement shall be terminated and (e) all documents or instruments
necessary to release and evidence the release of all Liens under the DIP Credit
Agreement shall be delivered to Collateral Agent.
(v) All Indebtedness of Company to any of its
Wholly-Owned Subsidiaries and all Indebtedness of each Wholly-Owned Subsidiary
of Company to Company or any other Wholly-Owned Subsidiary of Company shall have
been cancelled pursuant to the Plan of Reorganization, and such cancellation
shall be further evidenced by a payoff letter in form and substance satisfactory
to Administrative Agent.
E. CCAA PROCEEDINGS; CANADIAN CCAA CREDIT AGREEMENT.
(i) The CCAA Plan of Arrangement shall (a) have been
approved by the creditors of Canadian Borrower and sanctioned by the Canadian
Court and (b) consummated to the satisfaction of each Administrative Agent. The
aggregate amount of Cash used to pay allowed claims of Persons that are not
Affiliates of Canadian Borrower under the CCAA Plan of Arrangement shall not
exceed US$30,000,000.
(ii) Canadian Borrower shall have (a) repaid in full
all Indebtedness outstanding under the Canadian CCAA Credit Agreement, (b)
terminated any commitments to lend or make other extensions of credit thereunder
and delivered to each Administrative Agent all documents and instruments
necessary or advisable to evidence such termination, in form and substance
satisfactory to each Administrative Agent, (c) released all Liens securing
Indebtedness or other obligations of Canadian Borrower and its Subsidiaries
thereunder and delivered to each Administrative Agent all documents and
instruments necessary or advisable to evidence such release, in form and
substance satisfactory to each Administrative Agent, and (d) made arrangements
satisfactory to each Administrative Agent with respect to the cancellation of
any
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letters of credit outstanding thereunder or the issuance of letters of
credit to support the obligations of Company and its Subsidiaries with respect
thereto.
F. CLOSING DATE LEVERAGE RATIO. US Administrative Agent shall
have received an Officer's Certificate reasonably satisfactory to it setting
forth the Leverage Ratio as of the Closing Date, based on the preliminary
February 28, 2002 financial statements and after giving effect to the
effectiveness of the Plan of Reorganization and the CCAA Plan of Arrangement.
G. CLOSING DATE MORTGAGES; CLOSING DATE MORTGAGE POLICIES;
ETC. Collateral Agent shall have received from Company and each applicable
Subsidiary Guarantor:
(i) Closing Date Mortgages. Fully executed and
notarized Mortgages (each a "CLOSING DATE MORTGAGE" and, collectively, the
"CLOSING DATE MORTGAGES"), duly recorded in all appropriate places in all
applicable jurisdictions, encumbering each fee or leasehold Real Property Asset
listed in Schedule 4.1G annexed hereto (each of the foregoing a "CLOSING DATE
MORTGAGED PROPERTY" and, collectively, the "CLOSING DATE MORTGAGED PROPERTIES");
(ii) Opinions of Local Counsel. An opinion of counsel
(which counsel shall be reasonably satisfactory to Collateral Agent) in each
jurisdiction in which a Closing Date Mortgaged Property is located with respect
to the enforceability of the form(s) of Closing Date Mortgages to be recorded in
such jurisdiction and such other matters as Collateral Agent may reasonably
request, in each case in form and substance reasonably satisfactory to
Collateral Agent;
(iii) Landlord Consents and Estoppels; Recorded
Leasehold Interests. In the case of each Closing Date Mortgaged Property
consisting of a Leasehold Property located in the United States, the lessor of
which has filed an objection to the confirmation of the Plan of Reorganization
and in the case of each Closing Date Mortgaged Property consisting of a
Leasehold Property located in Canada, a landlord consent and estoppel with
respect thereto in form and substance satisfactory to the applicable
Administrative Agent and evidence that such Leasehold Property is a Recorded
Leasehold Interest;
(iv) Matters Relating to Flood Hazard Properties. (a)
Evidence, which may be in the form of a letter from an insurance broker or a
municipal engineer, as to whether (1) any Closing Date Mortgaged Property is a
Flood Hazard Property located in the United States and (2) the community in
which any such Flood Hazard Property is located is participating in the National
Flood Insurance Program, (b) if there are any such Flood Hazard Properties, such
Loan Party's written acknowledgement of receipt of written notification from
Collateral Agent (1) as to the existence of each such Flood Hazard Property and
(2) as to whether the community in which each such Flood Hazard Property is
located is participating in the National Flood Insurance Program, and (c) in the
event any such Flood Hazard Property is located in a community that participates
in the National Flood Insurance Program, evidence that such Loan Party has
obtained flood insurance in respect of such Flood Hazard Property to the extent
required under the applicable regulations of the Board of Governors of the
Federal Reserve System; and
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(v) Environmental Indemnity. An environmental
indemnity agreement, satisfactory in form and substance to Collateral Agent and
its counsel, with respect to the indemnification of Collateral Agent and Lenders
for any liabilities that may be imposed on or incurred by any of them as a
result of any Hazardous Materials.
H. SECURITY INTERESTS IN PERSONAL PROPERTY. Collateral Agent
shall have received evidence satisfactory to it that Company, Canadian Borrower
and Subsidiary Guarantors have taken or caused to be taken all such actions,
executed and delivered or caused to be executed and delivered all such
agreements, documents and instruments, and made or caused to be made all such
filings and recordings (other than the filing or recording of items described in
clauses (iii) and (iv) below) that may be necessary or, in the opinion of
Collateral Agent, desirable to create in favor of Collateral Agent, for the
benefit of Lenders, a valid and (upon such filing and recording) perfected First
Priority security interest in the entire personal and mixed property Collateral.
Such actions shall include the following:
(i) Schedules to Collateral Documents. Delivery to
Collateral Agent of accurate and complete schedules to all of the applicable
Collateral Documents;
(ii) Stock Certificates and Instruments. Delivery to
Collateral Agent of (a) certificates, if any, (which certificates shall be
accompanied by irrevocable undated stock powers, duly endorsed in blank and
otherwise satisfactory in form and substance to Collateral Agent) representing
all of the capital stock pledged pursuant to the Security Agreement and (b) all
promissory notes or other instruments (duly endorsed, where appropriate, in a
manner satisfactory to Collateral Agent) evidencing any Collateral;
(iii) Lien Searches; UCC and PPSA Termination
Statements. Delivery to Collateral Agent of (a) the results of a recent search,
by a Person satisfactory to Collateral Agent, of all effective UCC financing
statements and fixture filings, PPSA registrations and all other similar
filings, recordings and registrations and all judgment and Tax lien filings
which may have been made with respect to any personal or mixed property of any
Loan Party, together with copies of all such filings disclosed by such search
and (b) UCC termination statements duly executed by all applicable Persons and
financing change statements or other similar releases and discharges for filing
in all applicable jurisdictions as may be necessary to terminate any effective
UCC financing statements or fixture filings, PPSA registrations and all other
similar filings, recordings and registrations disclosed in such search (other
than any such financing statements or fixture filings in respect of Liens
permitted to remain outstanding pursuant to the terms of this Agreement);
(iv) UCC and PPSA Financing Statements and Fixture
Filings. (a) Delivery to Collateral Agent of UCC financing statements and, where
appropriate, fixture filings with respect to all personal and mixed property
Collateral of such Loan Party, for filing in all jurisdictions as may be
necessary or, in the opinion of Collateral Agent, desirable to perfect the
security interests created in such Collateral pursuant to the Collateral
Documents and (b) registration of personal property financing statements and all
similar filings, recordings and registrations in each jurisdiction in Canada in
which any Borrower or any of their respective Subsidiaries carries on business
or in which any assets of such Person are located with respect to all personal
property of such Person as may be necessary or, in the opinion of Collateral
Agent,
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desirable to perfect the security interests created in such Collateral pursuant
to the Collateral Documents;
(v) PTO Cover Sheets, Etc. (a) Delivery to Collateral
Agent of all cover sheets or other documents or instruments required to be filed
with the United States Patent and Trademark Office to create or perfect Liens in
respect of any Intellectual Property Collateral and (b) delivery to Collateral
Agent of such information as may be necessary to create or perfect Liens in
Canada in respect of any Intellectual Property Collateral with the Canadian
Intellectual Property Office; and
(vi) Opinions of Counsel. Delivery to Collateral
Agent of an opinion of counsel (which counsel shall be reasonably satisfactory
to Collateral Agent) under the laws of each jurisdiction in which any Loan Party
is organized with respect to the creation and perfection of the security
interests in favor of Collateral Agent in such Collateral and such other matters
governed by the laws of such jurisdiction regarding such security interests as
Collateral Agent may reasonably request, in each case in form and substance
reasonably satisfactory to Collateral Agent.
I. OPINIONS OF BORROWERS' COUNSEL. Lenders shall have received
originally executed copies of one or more favorable written opinions of (i)
Fried, Frank, Harris, ▇▇▇▇▇▇▇ & ▇▇▇▇▇▇▇▇, counsel for the Loan Parties, in form
and substance reasonably satisfactory to US Administrative Agent and its
counsel, dated as of the Closing Date and setting forth substantially the
matters in the opinions designated in Exhibit X-A annexed hereto and as to such
other matters as US Administrative Agent acting on behalf of Lenders may
reasonably request, and (ii) Davies, Ward, ▇▇▇▇▇▇▇ & Vineberg LLP, Canadian
counsel for the Canadian Borrower, in form and substance reasonably satisfactory
to CN Administrative Agent and its counsel, dated as of the Closing Date and
setting forth substantially the matters in the opinions designated in Exhibit
X-B annexed hereto and as to such other matters as CN Administrative Agent
acting on behalf of Lenders may reasonably request.
J. OPINIONS OF O'MELVENY & ▇▇▇▇▇ LLP. Lenders shall have
received originally executed copies of one or more favorable written opinions of
O'Melveny & ▇▇▇▇▇ LLP, dated as of the Closing Date, substantially in the form
of Exhibit XI annexed hereto and as to such other matters as Administrative
Agent acting on behalf of Lenders may reasonably request.
K. EVIDENCE OF INSURANCE. Company shall have delivered to US
Administrative Agent an Officer's Certificate in form and substance reasonably
satisfactory to US Administrative Agent certifying as to an attached schedule
setting forth each casualty, liability and business interruption insurance
policy maintained by Company and its Subsidiaries, the expiration date of each
such insurance policy, the amount of insurance coverage provided pursuant to
each such policy, any applicable deductibles and any other information
reasonably requested by US Administrative Agent with respect to such insurance
policies. Collateral Agent shall have received a certificate from Company's
insurance broker or other evidence satisfactory to it that all insurance
required to be maintained pursuant to subsection 6.4 is in full force and effect
and that Collateral Agent on behalf of the Lenders and the Term Loan Lenders,
has been
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named as additional insured and/or loss payee thereunder to the extent required
under subsection 6.4.
L. FEES. Company shall have paid to US Administrative Agent,
for distribution (as appropriate) to US Administrative Agent and US Lenders and
Canadian Borrower shall have paid to CN Administrative Agent, for distribution
(as appropriate) to CN Administrative Agent and CN Lenders, the fees payable on
the Closing Date referred to in subsection 2.3.
M. TERM LOAN AGREEMENT. All conditions to the making of the
initial Restructured Term Loans under the Term Loan Agreement shall have been
satisfied or waived and such initial Restructured Term Loans shall have been
made.
N. PAYMENT OF CERTAIN AMOUNTS. Company shall have paid
(i) all adequate protection payments to which Lenders
are entitled pursuant to the final borrowing order entered by the Bankruptcy
Court on April 4, 2001 for the period ending on the Closing Date; and
(ii) all accrued but unpaid administrative agent's
fees and letter of credit fees under the Pre-Petition Credit Agreement and the
DIP Credit Agreement.
O. REPRESENTATIONS AND WARRANTIES; PERFORMANCE OF AGREEMENTS.
Company shall have delivered to US Administrative Agent an Officers'
Certificate, in form and substance satisfactory to US Administrative Agent, to
the effect that the representations and warranties in Section 5 hereof are true,
correct and complete on and as of the Closing Date (after giving effect to the
effectiveness of the Plan of Reorganization and the CCAA Plan of Arrangement) to
the same extent as though made on and as of that date (or, to the extent such
representations and warranties specifically relate to an earlier date, that such
representations and warranties were true, correct and complete on and as of such
earlier date) and that each Borrower shall have performed in all material
respects all agreements and satisfied all conditions that this Agreement
provides shall be performed or satisfied by it on or before the Closing Date
except as otherwise disclosed to and agreed to in writing by each Administrative
Agent.
P. COMPLETION OF PROCEEDINGS. All corporate and other
proceedings taken or to be taken in connection with the transactions
contemplated hereby and all documents incidental thereto not previously found
acceptable by either Administrative Agent, acting on behalf of Lenders, and
their counsel shall be satisfactory in form and substance to such Administrative
Agent and such counsel, and such Administrative Agent and such counsel shall
have received all such counterpart originals or certified copies of such
documents as such Administrative Agent may reasonably request.
Q. ESTIMATE OF COMPANY-FUNDED UNSECURED SETTLEMENT AMOUNT.
Company shall have delivered to US Administrative Agent on the Closing Date an
Officer's Certificate setting forth a good faith estimate of the Company-Funded
Unsecured Settlement Amount and each amount described in the definition of
Company-Funded Unsecured Settlement Amount, all in a level of detail and
otherwise in form and substance satisfactory to US Administrative Agent.
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R. CASH CONTRIBUTION; UNSECURED SETTLEMENT DISTRIBUTION.
(i) [Intentionally Omitted].
(ii) The Sponsors shall have purchased for cash
common equity of Company, to fund the Unsecured Settlement Distribution (as
defined in the Plan of Reorganization) in accordance with the Plan of
Reorganization, in an amount not less than the difference between (a)
US$45,000,000 and (b) the Company-Funded Unsecured Settlement Amount; provided
that, notwithstanding anything to the contrary contained herein, the
Company-Funded Unsecured Settlement Amount shall not exceed 80% of the amount of
cash common equity contributed by the Sponsors to Company to fund the Unsecured
Settlement Distribution.
(iii) Company shall have paid the Unsecured
Settlement Distribution (as defined in the Plan of Reorganization) in accordance
with the Plan of Reorganization.
(iv) Company shall have delivered to US
Administrative Agent on the Closing Date an Officer's Certificate certifying
that the conditions in subsections 4.1R(ii) and (iii) have been satisfied.
S. NO MATERIAL ADVERSE CHANGE. Since August 31, 2001, there
shall have occurred no material adverse change in the business, operations,
properties, assets, liabilities, condition (financial or otherwise) or prospects
of Company and its Subsidiaries, taken as a whole, other than as set forth in
the Plan of Reorganization or the CCAA Plan of Arrangement, determined by each
Administrative Agent in its sole discretion.
T. NO LITIGATION. On the Closing Date, there shall not be any
action, suit, investigation, litigation or proceeding pending or threatened in
any court or before any arbitrator or governmental instrumentality that purports
to affect the Plan of Reorganization or the CCAA Plan of Arrangement, any of the
Term Loan Documents (as defined in the Term Loan Agreement) or any of the
Priority Secured Loan Documents that could reasonably be expected to have a
material adverse effect on the Plan of Reorganization or the CCAA Plan of
Arrangement, any of the Term Loan Documents, any of the Priority Secured Loan
Documents or any of the other transactions contemplated hereby or on the
business, assets, liabilities, results of operations, condition (financial or
otherwise), properties or prospects of Company and its Subsidiaries, taken as a
whole.
U. DELIVERY OF FINANCIAL INFORMATION. Company shall have
delivered financial information, budgets and projections regarding the
confirmation of the Plan of Reorganization and the CCAA Plan of Arrangement and
the reorganization of Company and Canadian Borrower in form and substance
satisfactory to US Administrative Agent; provided that US Administrative Agent
acknowledges and agrees that such financial information, budgets and projections
shall be prepared consistent with the methodology set forth on Schedule 4.1U.
V. MERGER OF MERGED SUBSIDIARIES. Company shall have filed or
caused to be filed with the appropriate office of each applicable state all
documents and certificates necessary to cause the merger of each Merged
Subsidiary with and into the Wholly-Owned North American Subsidiary of Company
shown opposite its name on Schedule 5.21.
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4.2 CONDITIONS TO ALL LOANS.
The obligations of Lenders to make Loans on each Funding Date are
subject to the following further conditions precedent:
A. The applicable Administrative Agent shall have received
before that Funding Date, in accordance with the provisions of subsection 2.1B,
an originally executed Notice of Borrowing, in each case signed by the chief
executive officer, the chief financial officer or the treasurer of the
applicable Borrower or by any executive officer of the applicable Borrower
designated by any of the above-described officers on behalf of the applicable
Borrower in a writing delivered to the applicable Administrative Agent.
B. As of that Funding Date:
(i) The representations and warranties contained
herein and in the other Priority Secured Loan Documents shall be true, correct
and complete in all material respects on and as of that Funding Date to the same
extent as though made on and as of that date, except to the extent such
representations and warranties specifically relate to an earlier date, in which
case such representations and warranties shall have been true, correct and
complete in all material respects on and as of such earlier date;
(ii) No event shall have occurred and be continuing
or would result from the consummation of the borrowing contemplated by such
Notice of Borrowing that would constitute an Event of Default or a Potential
Event of Default;
(iii) Each Borrower shall have performed in all
material respects all agreements and satisfied all conditions which this
Agreement provides shall be performed or satisfied by it on or before that
Funding Date;
(iv) No order, judgment or decree of any court,
arbitrator or Governmental Authority shall purport to enjoin or restrain any
Lender from making the Loans to be made by it on that Funding Date;
(v) The making of the Loans requested on such Funding
Date shall not violate any law including, without limitation, Regulation T,
Regulation U or Regulation X of the Board of Governors of the Federal Reserve
System; and
(vi) After giving effect to the Loans requested, (a)
the aggregate amount of Cash held by Company and its Wholly-Owned North American
Subsidiaries (determined in accordance with GAAP as would be shown on the
consolidated balance sheet of the Company and its Wholly-Owned Subsidiaries as
of that Funding Date) shall not exceed US$30,000,000 (the "ALLOWED CASH AMOUNT")
or such greater amount as may be approved by US Administrative Agent; provided,
however that during the period from the Closing Date to and including the 90th
day after the Closing Date, the Allowed Cash Amount shall be increased by an
amount equal to the difference between (i) US$20,000,000 and (ii) any proceeds
of the CN Tranche Term Loans used by Canadian Borrower or any of its
Subsidiaries to pay claims of creditors of Canadian Borrower and/or any of its
Subsidiaries under the CCAA Plan of Arrangement and for other purposes permitted
hereunder prior to such Funding Date, and (b) the
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Total Utilization of CN Tranche Revolving Loans shall not exceed the CN Dollar
Equivalent Amount of US$10,000,000.
4.3 CONDITIONS TO ISSUANCE OF LETTERS OF CREDIT.
The issuance of any Letter of Credit hereunder (whether or not
the applicable Issuing Lender is obligated to issue such Letter of Credit) is
subject to the following conditions precedent:
A. On or before the date of issuance of the initial Letter of
Credit pursuant to this Agreement, the conditions to the making of Loans on the
Closing Date set forth in subsection 4.1 shall have been satisfied or waived.
B. On or before the date of issuance of such Letter of Credit,
US Administrative Agent shall have received, in accordance with the provisions
of subsection 3.1B(i), an originally executed Request for Issuance, in each case
signed by the chief executive officer, the chief financial officer or the
treasurer of Company or by any executive officer of Company designated by any of
the above-described officers on behalf of Company in a writing delivered to US
Administrative Agent, together with all other information specified in
subsection 3.1B(i) and such other documents or information as the applicable
Issuing Lender may reasonably require in connection with the issuance of such
Letter of Credit.
C. On the date of issuance of such Letter of Credit, all
conditions precedent described in subsection 4.2B shall be satisfied to the same
extent as if the issuance of such Letter of Credit were the making of a Loan and
the date of issuance of such Letter of Credit were a Funding Date.
SECTION 5. BORROWERS' REPRESENTATIONS AND WARRANTIES
In order to induce Lenders to enter into this Agreement and to make the
Loans, to induce Issuing Lenders to issue Letters of Credit, each of Company
and, in addition, with respect to matters relating to Canadian Borrower or any
of its Subsidiaries, Canadian Borrower, represents and warrants to each Lender,
on the date of this Agreement and, except as otherwise provided, on each Funding
Date and on the date of issuance of each Letter of Credit, that the following
statements are true, correct and complete:
5.1 ORGANIZATION, POWERS, QUALIFICATION, GOOD STANDING, BUSINESS AND
SUBSIDIARIES.
A. ORGANIZATION AND POWERS. Each Loan Party is an organization
duly organized, validly existing and, except as set forth on Schedule 5.1A, in
good standing under the laws of its jurisdiction of organization. Each Loan
Party has all requisite corporate or limited liability company power and
authority to own and operate its properties, to carry on its business as now
conducted and as proposed to be conducted, to enter into the Priority Secured
Loan Documents to which it is a party and to carry out the transactions
contemplated hereby and thereby and, in the case of Borrowers, to issue and pay
the Notes.
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B. QUALIFICATION AND GOOD STANDING. Each Loan Party is
qualified to do business and in good standing in every jurisdiction where its
assets are located and wherever necessary to carry out its business and
operations, except in jurisdictions where the failure to be so qualified or in
good standing has not had and will not have a Material Adverse Effect.
C. CONDUCT OF BUSINESS. Company and its Subsidiaries are
engaged only in the businesses permitted to be engaged in pursuant to subsection
7.12.
D. SUBSIDIARIES. All of the Subsidiaries of Company are
identified in Schedule 5.1D annexed hereto, as said Schedule 5.1D may be
supplemented from time to time pursuant to the provisions of subsection
6.1(xvii). The capital stock or limited liability company interests of Company
and of each of the Subsidiaries of Company identified in Schedule 5.1D annexed
hereto (as so supplemented) is duly authorized, validly issued, fully paid and
nonassessable and none of such capital stock or limited liability company
interests constitutes Margin Stock. Each of the Subsidiaries of Company
identified in Schedule 5.1D annexed hereto (as so supplemented) is a corporation
or limited liability company duly organized, validly existing and, except as set
forth in Schedule 5.1D annexed hereto, in good standing under the laws of its
respective jurisdiction of organization set forth therein, has all requisite
corporate or limited liability company power and authority to own and operate
its properties and to carry on its business as now conducted and as proposed to
be conducted, and is qualified to do business and in good standing in every
jurisdiction where its assets are located and wherever necessary to carry out
its business and operations, in each case except where failure to be so
qualified or in good standing or a lack of such corporate or limited liability
company power and authority has not had and will not have a Material Adverse
Effect. Schedule 5.1D annexed hereto (as so supplemented) correctly sets forth
the ownership interest of each of Company and each of its Subsidiaries in each
of the Subsidiaries of Company identified therein. The capital and ownership
structure of Company and its Subsidiaries, both before and after giving effect
to the effectiveness of the Plan of Reorganization and the CCAA Plan of
Arrangement and the related transactions contemplated in connection therewith,
are as set forth on Schedule 4.1B(i) annexed hereto.
5.2 AUTHORIZATION OF BORROWING, ETC.
A. AUTHORIZATION OF BORROWING. The execution, delivery and
performance of each Priority Secured Loan Document have been duly authorized by
all necessary corporate action on the part of each Loan Party that is a party
thereto.
B. NO CONFLICT. The execution, delivery and performance by any
Loan Party of the Priority Secured Loan Documents to which it is a party and the
consummation of the transactions contemplated by the Priority Secured Loan
Documents do not and will not (i) violate any provision of any law or any
governmental rule or regulation applicable to any Loan Party, the constating
documents, bylaws or any shareholders agreement of any Loan Party or any order,
judgment or decree of any court or other agency of government binding on any
Loan Party, (ii) conflict with, result in a breach of or constitute (with due
notice or lapse of time or both) a default under any Contractual Obligation of
any Loan Party, except for such conflicts, breaches or defaults that could not,
individually or in the aggregate, reasonably be expected to result in a Material
Adverse Effect, (iii) result in or require the creation or imposition of any
Lien upon any
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of the properties or assets of any Loan Party (other than any Liens created
under any of the Priority Secured Loan Documents in favor of Collateral Agent on
behalf of Lenders), or (iv) require any approval of stockholders or any approval
or consent of any Person under any Contractual Obligation of any Loan Party,
except for such approvals or consents that will be obtained on or before the
Closing Date and such approvals or consents the failure of which to obtain,
individually or in the aggregate, could not reasonably be expected to result in
a Material Adverse Effect.
C. GOVERNMENTAL CONSENTS. The execution, delivery and
performance by any Loan Party of the Priority Secured Loan Documents to which it
is a party, the issuance, delivery and payment of the Notes and the consummation
of the transactions contemplated by the Priority Secured Loan Documents do not
and will not require any registration with, consent or approval of, or notice
to, or other action to, with or by, any federal, state, provincial or other
Governmental Authority or regulatory body, except for (i) filings required by
federal or state securities laws, (ii) such other registrations, consents,
approvals, notices or other actions which have been made, obtained, given or
taken on or before the Closing Date and (iii) such other filings the failure of
which to make, individually or in the aggregate, could not reasonably be
expected to result in a Material Adverse Effect.
D. BINDING OBLIGATION. Each of the Priority Secured Loan
Documents has been duly executed and delivered by each Loan Party that is a
party thereto and is the legally valid and binding obligation of such Loan
Party, enforceable against such Loan Party in accordance with its respective
terms, except as may be limited by bankruptcy, insolvency, reorganization,
moratorium or similar laws relating to or limiting creditors' rights generally
or by equitable principles relating to enforceability.
5.3 FINANCIAL CONDITION.
Company has heretofore delivered to Lenders, at Lenders' request, (i)
audited financial statements of Company and its Subsidiaries for Fiscal Year
ending February 28, 2001, consisting of a balance sheet and the related
consolidated statements of operations, stockholders' equity and cash flows for
such Fiscal Year, and (ii) unaudited, condensed, combined, consolidated
financial statements of Company and its Subsidiaries for the eleven months ended
January 31, 2002, consisting of a balance sheet and related statements of
operations and cash flow. All such statements were prepared in conformity with
GAAP and fairly present, in all material respects, the financial position (on a
consolidated basis) of the entities described in such financial statements as at
the respective dates thereof and the results of operations and cash flows (on a
consolidated basis) of the entities described therein for each of the periods
then ended, subject, in the case of any such unaudited financial statements, to
the changes resulting from audit and normal year-end adjustments and absence of
footnotes. None of the Loan Parties has (and none of the Loan Parties will have
following the funding of the initial Loans) any Contingent Obligation,
contingent liability or liability for taxes, long-term lease or unusual forward
or long-term commitment that is required by GAAP to be, but is not, or to the
extent not required by GAAP which is known to or reasonably should be known to
Company, but is not, reflected in the foregoing financial statements or the most
recent financial statements delivered pursuant to subsection 6.1 or the notes
thereto and which in any such case is material in relation to the
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business, operations, properties, assets, condition (financial or otherwise) or
prospects of Company and its Subsidiaries, taken as a whole.
5.4 NO MATERIAL ADVERSE EFFECT; NO RESTRICTED JUNIOR PAYMENTS.
Since February 28, 2001, no event or change has occurred that has
caused or evidences, either in any case or in the aggregate, a Material Adverse
Effect. Except as set forth on Schedule 5.4, since February 28, 2001, neither
Company nor any of its Subsidiaries has directly or indirectly declared,
ordered, paid or made, or set apart any sum or property for, any Restricted
Junior Payment or agreed to do so except as permitted by subsection 7.5.
5.5 TITLE TO PROPERTIES; LIENS.
Company and each of its Subsidiaries has (i) good and indefeasible
title to (in the case of fee interests in real property), (ii) valid leasehold
interests in (in the case of leasehold interests in real or personal property),
or (iii) good title to (in the case of all other personal property), all of
their respective properties and assets reflected in the financial statements
referred to in subsection 5.3 or in the most recent financial statements
delivered pursuant to subsection 6.1, in each case except for assets disposed of
since the date of such financial statements in the ordinary course of business
or as otherwise permitted under subsection 7.7. All such properties and assets
are free and clear of Liens other than Liens permitted under subsection 7.2A.
5.6 LITIGATION; ADVERSE FACTS.
Except as described in Schedule 5.6, there are no actions, suits,
proceedings, arbitrations or governmental investigations (whether or not
purportedly on behalf of Company or any of Company's Subsidiaries) at law or in
equity or before or by any federal, state, provincial, municipal or other
governmental department, commission, board, bureau, agency or instrumentality,
domestic or foreign, pending or, to the knowledge of Company, threatened against
or affecting Company or any of Company's Subsidiaries or any property of Company
or any of Company's Subsidiaries that, individually or in the aggregate, could
reasonably be expected to result in a Material Adverse Effect. Neither Company
nor any of Company's Subsidiaries is (i) in violation of any applicable laws
that, individually or in the aggregate, could reasonably be expected to result
in a Material Adverse Effect or (ii) subject to or in default with respect to
any final judgments, writs, injunctions, decrees, rules or regulations of any
court or any federal, state, provincial, municipal or other governmental
department, commission, board, bureau, agency or instrumentality, domestic or
foreign, that, individually or in the aggregate, could reasonably be expected to
result in a Material Adverse Effect.
5.7 PAYMENT OF TAXES.
Except to the extent permitted by subsection 6.3, all material Tax
returns and reports of Company and its Subsidiaries required to be filed by any
of them have been timely filed, and all material Taxes, assessments, fees and
other governmental charges upon Company and its Subsidiaries and upon their
respective properties, assets, income, businesses and franchises which are due
and payable have been paid when due and payable. Company does not know of any
proposed material Tax assessment against Company or any of its Subsidiaries
which is not being actively contested by Company or such Subsidiary in good
faith and by appropriate
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proceedings; provided that such reserves or other appropriate provisions, if
any, as shall be required in conformity with GAAP shall have been made or
provided therefor.
5.8 PERFORMANCE OF AGREEMENTS; MATERIALLY ADVERSE AGREEMENTS; MATERIAL
CONTRACTS.
A. Neither Company nor any of its Subsidiaries is in default
in the performance, observance or fulfillment of any of the obligations,
covenants or conditions contained in any of its Contractual Obligations, and no
condition exists that, with the giving of notice or the lapse of time or both,
would constitute such a default, except where the consequences, direct or
indirect, of such default or defaults, if any, would not have a Material Adverse
Effect.
B. Neither Company nor any of its Subsidiaries is a party to
or is otherwise subject to any agreements or instruments or any charter or other
internal restrictions which, individually or in the aggregate, could reasonably
be expected to result in a Material Adverse Effect.
C. All Material Contracts of each of Company and each of its
Subsidiaries are in full force and effect and no defaults currently exist
thereunder, except where the consequences, direct or indirect, of such default
or defaults, if any, would not have a Material Adverse Effect.
5.9 GOVERNMENTAL REGULATION.
Neither Company nor any of its Subsidiaries is subject to regulation
under the Public Utility Holding Company Act of 1935, the Federal Power Act, the
Interstate Commerce Act or the Investment Company Act of 1940 or under any other
federal or state statute or regulation which may limit its ability to incur
Indebtedness or which may otherwise render all or any portion of the Obligations
unenforceable.
5.10 SECURITIES ACTIVITIES.
A. Neither Company nor any of its Subsidiaries is engaged
principally, or as one of its important activities, in the business of extending
credit for the purpose of purchasing or carrying any Margin Stock.
B. Following application of the proceeds of each Loan, not
more than 25% of the value of the assets (either of Company only or of Company
and its Subsidiaries on a consolidated basis) subject to the provisions of
subsection 7.2 or 7.7 or subject to any restriction contained in any agreement
or instrument between Company and any Lender or any Affiliate of any Lender
relating to Indebtedness and within the scope of subsection 8.2, will be Margin
Stock.
5.11 EMPLOYEE BENEFIT PLANS.
A. Company and each of its ERISA Affiliates are in compliance
in all material respects with all applicable provisions and requirements of
ERISA and the regulations and published interpretations thereunder and the terms
of each Employee Benefit Plan, and have performed all their material obligations
under each Employee Benefit Plan, except where such
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noncompliance or nonperformance would not reasonably be expected to have a
Material Adverse Effect.
B. No ERISA Event has occurred or is reasonably expected to
occur which would reasonably be expected to have a Material Adverse Effect.
C. Except to the extent required under Section 4980B of the
Internal Revenue Code or as disclosed on Schedule 5.11(c) annexed hereto, no
Employee Benefit Plan provides health or welfare benefits (through the purchase
of insurance or otherwise) for any retired or former employees of Company or any
of its ERISA Affiliates.
D. In accordance with the most recent actuarial valuation for
any Pension Plan, the amount of unfunded benefit liabilities (as defined in
Section 4001(a)(18) of ERISA), individually or in the aggregate for all Pension
Plans (excluding for purposes of such computation any Pension Plans with respect
to which assets exceed benefit liabilities), does not exceed US$15,000,000.
E. The Canadian Pension Plans are duly registered under the
Income Tax Act (Canada), as amended, and any successor thereto, and any
regulations promulgated thereunder, as in effect on the Closing Date and all
other applicable laws which require registration and no event has occurred which
is reasonably likely to cause the loss of such registered status. All material
obligations of the Canadian Borrower, Company and its Subsidiaries (including
fiduciary, funding, investment and administration obligations) required to be
performed in connection with the Canadian Pension Plans and the funding
agreements therefor have been performed in a timely fashion. There have been no
improper withdrawals or applications of the assets of the Canadian Pension Plans
or the Canadian Benefit Plans. There are no outstanding disputes concerning the
assets of the Canadian Pension Plans or the Canadian Benefit Plans. Each of the
Canadian Pension Plans is fully funded both on an ongoing basis and on a
solvency basis (using actuarial methods and assumptions which are consistent
with the valuations last filed with the applicable governmental authorities and
which are consistent with generally accepted actuarial principles).
5.12 CERTAIN FEES.
Except as set forth in Schedule 5.12 annexed hereto, no broker's or
finder's fee or commission will be payable with respect to this Agreement or any
of the transactions contemplated hereby, and Borrowers jointly and severally
hereby indemnify Lenders against, and agree that they will hold Lenders harmless
from, any claim, demand or liability for any such broker's or finder's fees
alleged to have been incurred in connection herewith or therewith and any
expenses (including reasonable fees, expenses and disbursements of counsel)
arising in connection with any such claim, demand or liability.
5.13 ENVIRONMENTAL PROTECTION.
Except as set forth in Schedule 5.13 annexed hereto:
(i) the operations of Company and each of its
Subsidiaries (including, without limitation, all operations and conditions at or
in the Facilities) comply with all
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Environmental Laws except for any such noncompliance which would not reasonably
be expected to have a Material Adverse Effect;
(ii) Company and each of its Subsidiaries have
obtained all Governmental Authorizations under Environmental Laws necessary to
conduct their respective operations, and all such Governmental Authorizations
are being maintained in good standing, and Company and each of its Subsidiaries
are in compliance with such Governmental Authorizations except for any such
failure to obtain, maintain or comply which would not reasonably be expected to
have a Material Adverse Effect;
(iii) neither Company nor any of its Subsidiaries has
received (a) any notice or claim to the effect that it is or may be liable to
any Person as a result of or in connection with any Hazardous Materials or (b)
any letter or request for information under Section 104 of the Comprehensive
Environmental Response, Compensation, and Liability Act (42 U.S.C. Section 9604)
or comparable state laws, and, to the best of Company's knowledge, none of the
operations of Company or any of its Subsidiaries is the subject of any federal
or state investigation relating to or in connection with any Hazardous Materials
at any Facility or at any other location except for such of the foregoing which
would not reasonably be expected to have a Material Adverse Effect;
(iv) none of the operations of Company or any of its
Subsidiaries is subject to any judicial or administrative proceeding alleging
the violation of or liability under any Environmental Laws which if adversely
determined could reasonably be expected to have a Material Adverse Effect;
(v) neither Company nor any of its Subsidiaries nor
any of their respective Facilities or operations are subject to any outstanding
written order or agreement with any Governmental Authority or private party
relating to (a) any actual or potential violation of or liability under
Environmental Laws or (b) any Environmental Claims except for such of the
foregoing which would not reasonably be expected to have a Material Adverse
Effect;
(vi) neither Company nor any of its Subsidiaries has
any contingent liability in connection with any Release of any Hazardous
Materials by Company or any of its Subsidiaries except for such of the foregoing
which would not reasonably be expected to have a Material Adverse Effect;
(vii) neither Company nor any of its Subsidiaries
nor, to the best knowledge of Company, any predecessor of Company or any of its
Subsidiaries has filed any notice under any Environmental Law indicating past or
present treatment, storage or disposal of hazardous waste, as defined under 40
C.F.R. Parts 260-270 or any state equivalent, except for such of the foregoing
which could not, either individually or in the aggregate, reasonably be expected
to have a Material Adverse Effect;
(viii) no Hazardous Materials exist on, under or
about any Facility in a manner that would reasonably be expected to give rise to
an Environmental Claim having a Material Adverse Effect, and neither Company nor
any of its Subsidiaries has filed any notice or
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report of a Release of any Hazardous Materials that would reasonably be expected
to give rise to an Environmental Claim having a Material Adverse Effect;
(ix) neither Company nor any of its Subsidiaries nor,
to the best knowledge of Company, any of their respective predecessors has
disposed of any Hazardous Materials in a manner that would reasonably be
expected to give rise to an Environmental Claim having a Material Adverse
Effect;
(x) to the best knowledge of Company, no underground
storage tanks or surface impoundments are on or at any Facility, except which
underground storage tanks or surface impoundments could not reasonably be
expected to result in a Material Adverse Effect; and
(xi) no Lien in favor of any Person relating to or in
connection with any Environmental Claim has been filed or has been attached to
any Facility except for any such Lien which would not reasonably be expected to
have a Material Adverse Effect.
5.14 EMPLOYEE MATTERS.
Except as set forth in Schedule 5.14 annexed hereto, there is no strike
or work stoppage in existence or, to the knowledge of Company or any of its
Subsidiaries, threatened involving Company or any of its Subsidiaries that could
reasonably be expected to have a Material Adverse Effect.
5.15 SOLVENCY.
Each Loan Party is and, upon the incurrence of any Obligations by such
Loan Party on any date on which this representation is made, will be, Solvent.
5.16 DISCLOSURE.
No representation or warranty of Company or any of its Subsidiaries
contained in the Plan of Reorganization, the Disclosure Statements, the CCAA
Plan of Arrangement, any Priority Secured Loan Document or in any other
document, certificate or written statement furnished to Lenders by or on behalf
of Company or any of its Subsidiaries for use in connection with the
transactions contemplated by this Agreement contains any untrue statement of a
material fact or omits to state a material fact (known to Company, in the case
of any document not furnished by it) necessary in order to make the statements
contained herein or therein not misleading in light of the circumstances in
which the same were made. Any projections and pro forma financial information
contained in such materials are based upon good faith estimates and assumptions
believed by Company to be reasonable at the time made, it being recognized by
Lenders that such projections as to future events are not to be viewed as facts
and that actual results during the period or periods covered by any such
projections may differ from the projected results and that such projections are
subject to significant uncertainties and contingencies, many of which are beyond
Company's control, and that no assurance can be given that such projections will
be realized. There are no facts known (or which should upon the reasonable
exercise of diligence be known) to Company (other than matters of a general
economic nature) that, individually or in the aggregate, could reasonably be
expected to result in a Material Adverse Effect and that have
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not been disclosed herein or in such other documents, certificates and
statements furnished to Lenders for use in connection with the transactions
contemplated hereby.
5.17 MATTERS RELATING TO BANKRUPTCY PROCEEDINGS.
A. PLAN OF REORGANIZATION; CONFIRMATION ORDER. There have been
no material modifications, amendments, revisions or restatements of the Plan of
Reorganization. All representations and warranties made by Company or any
Subsidiary Debtor in the Plan of Reorganization are accurate, true, correct and
complete in all material respects as of the Closing Date (or, to the extent such
representations and warranties specifically relate to an earlier date, that such
representations and warranties were accurate, true, correct and complete in all
material respects as of such earlier date). The Confirmation Order has been
entered by the Bankruptcy Court and has not been stayed pending any appeal.
B. CCAA PLAN OF ARRANGEMENT; SANCTIONING. (i) There have been
no material modifications, amendments, revisions or restatements of the CCAA
Plan of Arrangement and (ii) the CCAA Plan of Arrangement has been sanctioned by
order of the Canadian Court and such order has not been stayed, varied or
overturned, is not subject to any appeal and remains in full force and effect.
5.18 INSURANCE.
Company and its Subsidiaries maintain, with financially sound and
reputable insurers, insurance with respect to its properties and business and
the properties and business of its Subsidiaries, against loss or damage of the
kinds customarily insured against by corporations of established reputation
engaged in the same or similar business of such types and in such amounts as are
customarily carried under similar circumstances by such other corporations all
as determined by the officers of the Company in their reasonable discretion.
Attached as Schedule 5.18 hereto is a complete and accurate description of all
policies of insurance that are in effect for Company and its Subsidiaries.
5.19 INTELLECTUAL PROPERTY.
Company and its Subsidiaries possess all of the trademarks, tradenames,
designs, copyrights, patents and licenses reasonably necessary for the conduct
of their respective businesses. Company and its Subsidiaries own, or are
licensed to use, the Intellectual Property and all such Intellectual Property is
fully protected and duly and properly registered, filed or issued in the
appropriate office and jurisdictions for such registrations, filing or
issuances, except for such filings the failure of which to make, individually or
in the aggregate, could not reasonably be expected to result in a Material
Adverse Effect.
5.20 CASH MANAGEMENT SYSTEM.
The summary of the Cash Management System set forth in Schedule 6.11 is
accurate and complete in all material respects as of the Closing Date and does
not omit to state any material fact necessary to make the statements set forth
therein not misleading. Neither Company nor any of the Subsidiary Guarantors
owns any Deposit Account that is not subject to the Liens granted under the
Security Agreement or the Collateral Account Agreement. There has been no
material
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change to the Cash Management System since the Closing Date except such changes
as have been disclosed to and approved by US Administrative Agent in writing.
5.21 MERGED SUBSIDIARIES.
On or before the Closing Date, Company has caused each of the
Subsidiaries of Company listed on Schedule 5.21 (each a "MERGED SUBSIDIARY" and
collectively, the "MERGED SUBSIDIARIES") to be merged with and into the
Wholly-Owned North American Subsidiary of Company set forth on Schedule 5.21.
The total value of each Merged Subsidiary's assets immediately prior to the
effectiveness of the merger of such Merged Subsidiary with and into the
applicable Wholly-Owned North American Subsidiary of Company did not exceed
US$5,000.
SECTION 6. BORROWERS' AFFIRMATIVE COVENANTS
Company covenants and agrees that, so long as any of the Commitments
hereunder shall remain in effect and until payment in full of all of the Loans
and other Obligations and the cancellation or expiration of all Letters of
Credit, unless Requisite Lenders shall otherwise give prior written consent,
Company shall perform, and shall cause each of its Subsidiaries to perform, all
covenants in this Section 6 (it being understood that Canadian Borrower
covenants and agrees to (i) perform all covenants applicable to it as a
Subsidiary of Company and (ii) cause each of its Subsidiaries to perform all
applicable covenants).
6.1 FINANCIAL STATEMENTS AND OTHER REPORTS.
Company will maintain, and cause each of its Subsidiaries to maintain,
a system of accounting established and administered in accordance with sound
business practices to permit preparation of financial statements in conformity
with GAAP. Company will deliver to US Administrative Agent:
(i) Monthly Financials: as soon as possible and in
any event within 45 days after the end of each month, (a) the consolidated
balance sheet as at the end of such month and the related consolidated
statements of income and cash flows of (x) Company and its Subsidiaries and (y)
Company and its Wholly-Owned Subsidiaries for such month, setting forth in each
case in comparative form the corresponding figures for the corresponding periods
of the previous Fiscal Year and the corresponding figure from the Financial Plan
for such Fiscal Year;
(ii) Quarterly Financials: as soon as available and
in any event within 45 days after the end of each of the first three Fiscal
Quarters, the consolidated balance sheets of (x) Company and its Subsidiaries
and (y) Company and its Wholly-Owned Subsidiaries as at the end of such Fiscal
Quarter and the related consolidated statements of income, stockholders' equity
and cash flows of (x) Company and its Subsidiaries and (y) Company and its
Wholly-Owned Subsidiaries for such Fiscal Quarter, and for the period from the
beginning of the then current Fiscal Year to the end of such Fiscal Quarter
(including segment information regarding Company's Canadian and international
operations in accordance with GAAP), setting forth in each case in comparative
form the corresponding figures for the corresponding periods of the previous
Fiscal Year and the corresponding figures from the Financial Plan for the
current Fiscal Year, all in reasonable detail and certified by the chief
financial officer of Company that they fairly present, in all material respects,
the financial condition of Company and its Subsidiaries as
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at the dates indicated and the results of their operations and their cash flows
for the periods indicated, subject to changes resulting from audit and normal
year-end adjustments and the absence of footnotes, and (b) a narrative report
describing the operations of Company and its Subsidiaries in the form prepared
for presentation to senior management for such Fiscal Quarter and for the period
from the beginning of the then current Fiscal Year to the end of such Fiscal
Quarter;
(iii) Year-End Financials: as soon as available and
in any event within 90 days after the end of each Fiscal Year, (a) the
consolidated balance sheets of (x) Company and its Subsidiaries and (y) Company
and its Wholly-Owned Subsidiaries as at the end of such Fiscal Year and the
related consolidated statements of income, stockholders' equity and cash flows
of (x) Company and its Subsidiaries and (y) Company and its Wholly-Owned
Subsidiaries for such Fiscal Year (including segment information regarding
Company's Canadian and international operations in accordance with GAAP),
setting forth in each case in comparative form the corresponding figures for the
previous Fiscal Year and the corresponding figures from the Financial Plan for
the Fiscal Year covered by such financial statements, all in reasonable detail
and certified by the chief financial officer of Company that they fairly
present, in all material respects, the financial condition of Company and its
Subsidiaries as at the dates indicated and the results of their operations and
their cash flows for the periods indicated, (b) a narrative report describing
the operations of Company and its Subsidiaries in the form prepared for
presentation to senior management for such Fiscal Year, and (c) in the case of
such consolidated financial statements of Company and its Subsidiaries, a report
thereon of a nationally recognized independent accounting firm, which report
shall be unqualified as to scope of audit, shall express no doubts about the
ability of Company and its Subsidiaries to continue as a going concern, and
shall state that such consolidated financial statements fairly present, in all
material respects, the consolidated financial position of Company and its
Subsidiaries as at the dates indicated and the results of their operations and
their cash flows for the periods indicated in conformity with GAAP applied on a
basis consistent with prior years (except as otherwise disclosed in such
financial statements) and that the examination by such accountants in connection
with such consolidated financial statements has been made in accordance with
generally accepted auditing standards;
(iv) Officers' and Compliance Certificates: together
with each delivery of financial statements of Company and its Subsidiaries
pursuant to subdivisions (ii) and (iii) above, (a) an Officers' Certificate of
Company stating that the signers have reviewed the terms of this Agreement and
have made, or caused to be made under their supervision, a review in reasonable
detail of the transactions and condition of Company and its Subsidiaries during
the accounting period covered by such financial statements and that such review
has not disclosed the existence during or at the end of such accounting period,
and that the signers do not have knowledge of the existence as at the date of
such Officers' Certificate, of any condition or event that constitutes an Event
of Default or Potential Event of Default, or, if any such condition or event
existed or exists, specifying the nature and period of existence thereof and
what action Company has taken, is taking and proposes to take with respect
thereto; and (b) a Compliance Certificate demonstrating in reasonable detail
compliance during and at the end of the applicable accounting periods with the
restrictions contained in Section 7, in each case to the extent compliance with
such restrictions is required to be tested at the end of the applicable
accounting period;
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(v) Reconciliation Statements: if, as a result of any
change in accounting principles and policies from those used in the preparation
of the audited financial statements referred to in subsection 5.3, the
consolidated financial statements of Company and its Subsidiaries delivered
pursuant to subdivisions (i), (ii), (iii) or (xiii) of this subsection 6.1 will
differ in any material respect from the consolidated financial statements that
would have been delivered pursuant to such subdivisions had no such change in
accounting principles and policies been made, then (a) together with the first
delivery of financial statements pursuant to subdivision (i), (ii), (iii) or
(xiii) of this subsection 6.1 following such change, consolidated financial
statements of Company and its Subsidiaries for (y) the current Fiscal Year to
the effective date of such change and (z) the two full Fiscal Years immediately
preceding the Fiscal Year in which such change is made, in each case prepared on
a pro forma basis as if such change had been in effect during such periods, and
(b) together with each delivery of financial statements pursuant to subdivision
(i), (ii), (iii) or (xiii) of this subsection 6.1 following such change, a
written statement of the chief accounting officer or chief financial officer of
Company setting forth the differences (including without limitation any
differences that would affect any calculations relating to the financial
covenants set forth in subsection 7.6) which would have resulted if such
financial statements had been prepared without giving effect to such change;
(vi) Accountants' Certification: together with each
delivery of consolidated financial statements of Company and its Subsidiaries
pursuant to subdivision (iii) above, a written statement by the independent
certified public accountants giving the report thereon (a) stating that their
audit examination has included a review of the terms of this Agreement and the
other Priority Secured Loan Documents as they relate to accounting matters, (b)
stating whether, in connection with their audit examination, any condition or
event that constitutes an Event of Default or Potential Event of Default with
respect to the covenants set forth in Section 7, has come to their attention
and, if such a condition or event has come to their attention, specifying the
nature and period of existence thereof; provided that such accountants shall not
be liable by reason of any failure to obtain knowledge of any such Event of
Default or Potential Event of Default that would not be disclosed in the course
of their audit examination, and (c) stating that based on their audit
examination nothing has come to their attention that causes them to believe
either or both that the information contained in the certificates delivered
therewith pursuant to subdivision (iv) above is not correct or that the matters
set forth in the Compliance Certificates delivered therewith pursuant to clause
(b) of subdivision (iv) above for the applicable Fiscal Year are not stated in
accordance with the terms of this Agreement;
(vii) Accountants' Reports: promptly upon receipt
thereof (unless restricted by applicable professional standards), copies of all
reports submitted to Company by independent certified public accountants in
connection with each annual, interim or special audit of the financial
statements of Company and its Subsidiaries made by such accountants, including,
without limitation, any comment letter submitted by such accountants to
management in connection with their annual audit;
(viii) SEC Filings and Press Releases: promptly upon
their becoming available, copies of (a) all financial statements, reports,
notices and proxy statements sent or made available generally by Company to its
security holders or by any Subsidiary of Company to its security holders other
than Company or another Subsidiary of Company, (b) all regular and periodic
reports and all registration statements (other than on Form S-8 or a similar
form) and
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prospectuses, if any, filed by Company or any of its Subsidiaries with any
securities exchange or with the Securities and Exchange Commission or any
governmental or private regulatory authority, and (c) all press releases and
other statements made available generally by Company or any of its Subsidiaries
to the public concerning material developments in the business of Company or any
of its Subsidiaries;
(ix) Events of Default, etc.: promptly upon any
Responsible Officer of Company or Canadian Borrower obtaining knowledge (a) of
any condition or event that constitutes an Event of Default or Potential Event
of Default, or becoming aware that any Lender has given any notice (other than
to an Administrative Agent) or taken any other action with respect to a claimed
Event of Default or Potential Event of Default, (b) that any Person has given
any notice to Canadian Borrower, Company or any of its other Subsidiaries or
taken any other action with respect to a claimed default or event or condition
of the type referred to in subsection 8.2, (c) of any condition or event that
would be required to be disclosed in a current report filed by Company with the
Securities and Exchange Commission on Form 8-K (Items 1, 2, 4, 5 and 6 of such
Form as in effect on the date hereof) if Company were required to file such
reports under the Exchange Act, or (d) of the occurrence of any event or change
that has caused or evidences, either in any case or in the aggregate, a Material
Adverse Effect, an Officers' Certificate specifying the nature and period of
existence of such condition, event or change, or specifying the notice given or
action taken by any such Person and the nature of such claimed Event of Default,
Potential Event of Default, default, event or condition, and what action Company
or Canadian Borrower has taken, are taking and propose to take with respect
thereto;
(x) Litigation or Other Proceedings: (a) promptly
upon any Responsible Officer of Company or Canadian Borrower obtaining knowledge
of (1) the institution of, or non-frivolous threat of, any non-frivolous action,
suit, proceeding (whether administrative, judicial or otherwise), governmental
investigation or arbitration against or affecting Company or any of its
Subsidiaries or any property of Company or any of its Subsidiaries
(collectively, "PROCEEDINGS") not previously disclosed in writing by Company or
Canadian Borrower, as the case may be, to Lenders or (2) any material
development in any Proceeding that, in any case:
(x) if adversely determined, has a
reasonable possibility of giving rise to a Material Adverse
Effect; or
(y) seeks to enjoin or otherwise prevent the
consummation of, or to recover any damages or obtain relief as
a result of, the transactions contemplated hereby;
written notice thereof together with such other information as may be reasonably
available to Company to enable Lenders and their counsel to evaluate such
matters; and (b) within twenty days after the end of each Fiscal Quarter, a
schedule of all Proceedings involving an alleged liability of, or claims against
or affecting, Company or any of its Subsidiaries equal to or greater than
US$5,000,000, the CN Dollar Equivalent Amount or the Equivalent Amount in any
other currency, and promptly after request by US Administrative Agent such other
information as may be reasonably requested by US Administrative Agent to enable
US Administrative Agent and its counsel to evaluate any of such Proceedings;
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(xi) ERISA Events: promptly upon becoming aware of
the occurrence of or forthcoming occurrence of any ERISA Event, a written notice
specifying the nature thereof, what action Company or any of its ERISA
Affiliates has taken, is taking or proposes to take with respect thereto and,
when known, any action taken or threatened by the Internal Revenue Service, the
Department of Labor or the PBGC with respect thereto;
(xii) ERISA and Pension Notices: with reasonable
promptness, copies of (a) each Schedule B (Actuarial Information) to the annual
report (Form 5500 Series) filed by Company or any of its ERISA Affiliates with
the Internal Revenue Service with respect to each Pension Plan; (b) all material
notices received by Company or any of its ERISA Affiliates from a Multiemployer
Plan sponsor concerning an ERISA Event; (c) a copy of any notice received by
Company or any of its Subsidiaries that it has failed to deliver to the funding
agent of any Canadian Pension Plan a summary of contributions or that any
contributions have not been paid when due; and (d) such other documents or
governmental reports or filings relating to any Employee Benefit Plan as US
Administrative Agent shall reasonably request;
(xiii) Financial Plans: as soon as practicable and in
any event no later than 30 days prior to the first day of each Fiscal Year, a
consolidated plan and financial forecast for such Fiscal Year (the "FINANCIAL
PLAN" for such Fiscal Year), including without limitation (a) a forecasted
consolidated balance sheet and forecasted consolidated statements of income and
cash flows of Company and its Subsidiaries for such Fiscal Year, together with a
pro forma Compliance Certificate for such Fiscal Year and an explanation of the
assumptions on which such forecasts are based, and (b) budgeted consolidated
statements of income and cash flows of Company and its Subsidiaries for each
month of such Fiscal Year, together with an explanation of the assumptions on
which such forecasts are based;
(xiv) Insurance: as soon as practicable and in any
event by the last day of each Fiscal Year, an Officer's Certificate of Company
attaching a schedule in form and substance reasonably satisfactory to US
Administrative Agent outlining all material insurance coverage maintained as of
the date of such Officer's Certificate by Company and its Subsidiaries and all
material insurance coverage planned to be maintained by Company and its
Subsidiaries in the immediately succeeding Fiscal Year;
(xv) Environmental Audits and Reports: as soon as
practicable following receipt thereof, copies of all environmental audits and
reports, whether prepared by personnel of Company or any of its Subsidiaries or
by independent consultants, with respect to significant environmental matters at
any Facility or which relate to an Environmental Claim in either case which
could reasonably be expected to result in a Material Adverse Effect; provided
that the delivery of such reports would not in the opinion of counsel to Company
adversely affect the availability of any privilege to which it may be entitled
in respect of such audits or reports; provided, further, that Company shall give
US Administrative Agent prompt written notice of any audits or reports not
delivered in accordance with the preceding proviso.
(xvi) Board of Directors: with reasonable promptness,
written notice of any change in the Board of Directors of Company or Canadian
Borrower; provided that delivery of a current SEC Report (to the extent that
Company is an SEC registrant) containing a
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disclosure of such change in the Board of Directors of Company shall be deemed
to satisfy the requirements of this subsection 6.1(xvi).
(xvii) New Subsidiaries: promptly upon any Person
becoming a Subsidiary of Company, a written notice setting forth with respect to
such Person (a) the date on which such Person became a Subsidiary of Company and
(b) all of the data required to be set forth in Schedule 5.1D annexed hereto
with respect to all Subsidiaries of Company (it being understood that such
written notice shall be deemed to supplement Schedule 5.1D annexed hereto for
all purposes of this Agreement);
(xviii) Material Contracts: promptly, and in any
event within 10 Business Days after any Material Contract of Company or any of
its Subsidiaries is terminated or amended in a manner that is materially adverse
to Company or such Subsidiary, as the case may be, or any new Material Contract
is entered into, a written statement describing such event with copies of such
material amendments or new contracts, and an explanation of any actions being
taken with respect thereto; provided that Company shall have no obligation to
deliver such written notice to the extent that disclosure of such event would
not be required to be disclosed in an SEC Report (if Company were an SEC
registrant); and provided, further, that delivery of an SEC Report (to the
extent that Company is an SEC registrant) containing a disclosure of any such
event shall be deemed to satisfy the requirements of this subsection 6.1(xviii);
(xix) Other Information: with reasonable promptness,
such other information and data with respect to Company or any of its
Subsidiaries as from time to time may be reasonably requested by US
Administrative Agent; and
(xx) Joint Venture Financial Statements: within ten
days of Company's receipt thereof, any audited financial statements for any
Joint Venture of Company or any of its Subsidiaries.
6.2 CORPORATE AND LIMITED LIABILITY COMPANY EXISTENCE, ETC.
Except as permitted under subsection 7.7, each of Company and Canadian
Borrower will, and will cause each of its Subsidiaries to, at all times preserve
and keep in full force and effect its corporate or limited liability company
existence and all rights and franchises material to its business; provided,
however, that neither Company nor any of its Subsidiaries shall be required to
preserve any such right or franchise and, solely with respect to Company's
Subsidiaries (other than Canadian Borrower), such existence, if the Board of
Directors or members of Company or such Subsidiary determines in good faith that
the preservation thereof is no longer desirable in the conduct of the business
of Company or such Subsidiary, as the case may be, and that the loss thereof,
individually or in the aggregate, could not reasonably be expected to result in
a Material Adverse Effect.
6.3 PAYMENT OF TAXES AND CLAIMS; TAX CONSOLIDATION.
A. Each of Company and Canadian Borrower will, and will cause
each of its Subsidiaries to, pay all material Taxes, assessments and other
governmental charges imposed upon it or any of its properties or assets or in
respect of any of its income, businesses or franchises before any material
penalty accrues thereon, and all claims (including, without
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limitation, claims for labor, services, materials and supplies) for sums that
have become due and payable and that by law have or may become a Lien upon any
of its properties or assets, prior to the time when any material penalty or fine
shall be incurred with respect thereto; provided that no such charge or claim
need be paid if being contested in good faith by appropriate proceedings
promptly instituted and diligently conducted and if such reserve or other
appropriate provision, if any, as shall be required in conformity with GAAP
shall have been made therefor.
B. Company will not, and will not permit any of its
Subsidiaries to, file or consent to the filing of any consolidated income Tax
return with any Person (other than Company or any of its Subsidiaries).
6.4 MAINTENANCE OF PROPERTIES; INSURANCE.
Each of Company and Canadian Borrower will, and will cause each of its
Subsidiaries to, maintain or cause to be maintained in good repair, working
order and condition, ordinary wear and tear excepted, all of their respective
material properties used or useful in the business of Company and its
Subsidiaries (including, without limitation, Intellectual Property) and from
time to time will make or cause to be made all appropriate repairs, renewals and
replacements thereof; provided, however, that (A) Company and its Subsidiaries
may dispose of obsolete equipment in the ordinary course of business, and (B)
Company and its Subsidiaries may (i) close, terminate, surrender, reject in
bankruptcy or reduce the term of leases, (ii) amend or otherwise modify leases
in a manner that does not materially and adversely affect Company, any of its
Subsidiaries, Administrative Agents or Lenders or (iii) otherwise cease to
operate theatres and remove fixtures and personalty therefrom upon the
expiration or other termination of the applicable lease if, in the case of
clause (i) and (iii) (other than upon expiration), the Board of Directors of
Company or such Subsidiary, as the case may be, determines in good faith that
the maintenance and continued operation thereof is no longer desirable in the
conduct of the business of Company or such Subsidiary, as the case may be, and
that the loss thereof, individually or in the aggregate, could not reasonably be
expected to result in a Material Adverse Effect. Company will maintain or cause
to be maintained, with financially sound and reputable insurers, insurance with
respect to its properties and business and the properties and businesses of its
Subsidiaries against loss or damage of the kinds customarily carried or
maintained under similar circumstances by corporations of established reputation
engaged in similar businesses. Each such policy of insurance shall (a) name
Collateral Agent for the benefit of Lenders and Term Loan Lenders as an
additional insured thereunder as its interest may appear and (b) in the case of
each casualty insurance policy, except as otherwise provided for in this
Agreement, contain a loss payable clause or endorsement, satisfactory in form
and substance to Collateral Agent, that names Collateral Agent for the benefit
of Lenders and Term Loan Lenders as the loss payee thereunder for any covered
loss in excess of US$500,000 and (c) provide for at least 30 days prior written
notice to Collateral Agent of any modification or cancellation of such policy.
6.5 INSPECTION; LENDER MEETING.
Each of Company and Canadian Borrower shall, and shall cause each of
its Subsidiaries to, permit any authorized representatives designated by any
Lender to visit and inspect any of the properties of Company or any of its
Subsidiaries once during each Fiscal Year, including its and their financial and
accounting records, and to make copies and take extracts therefrom, and to
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discuss its and their affairs, finances and accounts with its and their officers
and independent public accountants (provided that each of Company or Canadian
Borrower may, if it so chooses, be present at or participate in any such
discussion) upon reasonable notice and at such reasonable times during normal
business hours as may be reasonably requested; provided that, at any time after
the occurrence and during the continuance of an Event of Default, each of
Company and Canadian Borrower shall, and shall cause each of its Subsidiaries to
permit such additional audits as either Administrative Agent may deem necessary
or advisable, upon reasonable notice and at such reasonable times during normal
business hours as may be reasonably requested. Without in any way limiting the
foregoing, each of Company and Canadian Borrower will, upon the request of
either Administrative Agent or Requisite Lenders, participate in a meeting of
Administrative Agents and Lenders once during each Fiscal Year to be held at
Company's corporate offices (or such other location as may be agreed to by
Company and Administrative Agents) at such time as may be agreed to by Company
and Administrative Agents.
6.6 COMPLIANCE WITH LAWS, ETC.
Each of Company shall, and shall cause each of its Subsidiaries to,
comply with the requirements of all applicable laws, rules, regulations and
orders of any Governmental Authority, noncompliance with which could reasonably
be expected to cause, individually or in the aggregate at any time, a Material
Adverse Effect.
6.7 ENVIRONMENTAL DISCLOSURE AND INSPECTION.
A. Each of Company and Canadian Borrower shall, and shall
cause each of its Subsidiaries to, exercise commercially reasonable due
diligence in order to comply in all material respects, and cause (i) all tenants
under any leases or occupancy agreements affecting any portion of the Facilities
and (ii) all other Persons on or occupying such property to comply in all
material respects, with all Environmental Laws, except where failure to comply,
individually or in the aggregate, could not reasonably be expected to result in
a Material Adverse Effect.
B. Each of Company and Canadian Borrower agrees that an
Administrative Agent may, upon a reasonable belief that Company or Canadian
Borrower has breached any covenant or representation with respect to
environmental matters set forth herein or that there has been a violation of
Environmental Laws at any Facility or by Company or Canadian Borrower which
breach or violation could reasonably be expected to have a Material Adverse
Effect, retain, at Company's reasonable expense, an independent professional
consultant (the selection of which shall be subject to Company's reasonable
consent) to review any report relating to Hazardous Materials prepared by or for
Company in connection with such potential breach or violation and to conduct its
own reasonable investigation of such matter at such Facility currently owned,
leased, operated or used by Company or any of its Subsidiaries which is the
subject of such potential breach or violation, and each of Company and Canadian
Borrower agrees to use its commercially reasonable efforts to obtain permission
for such Administrative Agent's professional consultant to conduct its own
investigation of any such matter at any Facility previously owned, leased,
operated or used by Company or any of its Subsidiaries which is the subject of
such potential breach or violation. Each of Company and Canadian Borrower hereby
grants to each Administrative Agent and its agents, employees, consultants and
contractors the right to enter into or onto the aforementioned Facilities
currently owned, leased, operated or used
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by Company or any of its Subsidiaries upon reasonable notice to Company to
perform such assessments on such property as are reasonably necessary to conduct
such a review and/or investigation. Any such investigation of any such Facility
shall be conducted, unless otherwise agreed to by Company or Canadian Borrower
and the applicable Administrative Agent, during normal business hours and, to
the extent reasonably practicable, shall be conducted so as not to interfere
with the ongoing operations at any such Facility or to cause any damage or loss
to any property at such Facility. Company, Canadian Borrower and each
Administrative Agent hereby acknowledge and agree that any report of any
investigation conducted at the request of an Administrative Agent pursuant to
this subsection 6.7B may be obtained and may be used by Administrative Agents
and Lenders only for the purposes of Lenders' internal credit decisions, to
monitor and police the Loans and to protect Lenders' security interests, if any,
created by the Priority Secured Loan Documents. US Administrative Agent agrees
to deliver a copy of any such report to Company with the understanding that each
of Company and Canadian Borrower acknowledges and agrees that (i) it will
indemnify and hold harmless each Administrative Agent and each Lender from any
reasonable costs, losses or liabilities relating to Company's use of or reliance
on such report, (ii) none of either Administrative Agent or any Lender makes any
representation or warranty with respect to such report, and (iii) by delivering
such report to Company, none of either Administrative Agent or any Lender is
requiring or recommending the implementation of any suggestions or
recommendations contained in such report. In addition to, and without limiting
the generality of the foregoing, Company shall, at US Administrative Agent's
reasonable request and at Company's expense, conduct such investigation of the
Facility located at ▇▇▇-▇▇ ▇▇▇▇▇▇ ▇▇▇▇▇▇▇ ▇▇▇▇., ▇▇▇▇▇ ▇▇▇▇▇▇▇, ▇▇▇ ▇▇▇▇ as is
reasonably necessary to determine whether Hazardous Materials may exist in soil
or ground water in the vicinity. US Administrative Agent shall have the right to
reasonably approve consultants to be engaged by Company, and the scope of
investigation proposed by such consultant. Company agrees US Administrative
Agent shall be deemed reasonable in disapproving any consultant who is not
member of a nationally-recognized environmental consulting firm or who does not
have five or more years experience with remediation of Hazardous Materials
contamination.
C. Each of Company and Canadian Borrower shall promptly advise
Lenders in writing and in reasonable detail of (i) any Release of any Hazardous
Materials required to be reported to any federal, state, provincial or local
governmental or regulatory agency under any applicable Environmental Laws, which
Release has a reasonable possibility of giving rise to a Material Adverse
Effect, (ii) any and all written communications with respect to any
Environmental Claims that have a reasonable possibility of giving rise to a
Material Adverse Effect or with respect to any Release of Hazardous Materials
required to be reported to any federal, state, provincial or local governmental
or regulatory agency which Release has a reasonable possibility of giving rise
to a Material Adverse Effect, (iii) any remedial action taken by Company or any
other Person in response to (x) any Hazardous Materials on, under or about any
Facility, the existence of which has a reasonable possibility of resulting in an
Environmental Claim having a Material Adverse Effect, or (y) any Environmental
Claim that has a reasonable possibility of having a Material Adverse Effect,
(iv) Company's or Canadian Borrower's discovery of any occurrence or condition
on any real property adjoining or in the vicinity of any Facility that could
reasonably be expected to cause such Facility or any part thereof to be subject
to any material restrictions on the ownership, occupancy, transferability or use
thereof under any Environmental Laws which restriction would have a reasonable
possibility of having a Material Adverse Effect, and (v) any request for
information from any governmental agency that suggests
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such agency is investigating whether Company or any of its Subsidiaries may be
potentially responsible for a Release of Hazardous Materials, which Release has
a reasonably possibility of giving rise to a Material Adverse Effect. In
addition to, and without limiting the generality of the foregoing, Company
shall, within 120 days after the Closing Date, deliver to US Administrative
Agent either (i) confirmation reasonably satisfactory to US Administrative Agent
that all underground storage tanks owned or operated by Company and its
Subsidiaries are in material compliance with all Environmental Laws or (ii) with
respect to any underground storage tanks owned or operated by Company or any of
its Subsidiaries that are not in material compliance with all Environmental
Laws, Company shall use its commercially reasonable best efforts to cause such
underground storage tanks to be in material compliance with all Environmental
Laws.
D. Each of Company and Canadian Borrower shall promptly notify
US Administrative Agent of any proposed acquisition of stock, assets, or
property by Company or any of its Subsidiaries that could reasonably be expected
to expose Company or any of its Subsidiaries to, or result in, Environmental
Claims that could reasonably be expected to have a Material Adverse Effect.
E. Each of Company and Canadian Borrower shall, at its own
expense, provide copies of such documents or information as either
Administrative Agent may reasonably request in relation to any matters disclosed
pursuant to this subsection 6.7.
6.8 COMPANY'S REMEDIAL ACTION REGARDING HAZARDOUS MATERIALS.
Each of Company and Canadian Borrower shall promptly take, and shall
cause each of its Subsidiaries promptly to take, any and all remedial action in
connection with the presence, storage, use, disposal, transportation or Release
of any Hazardous Materials on, under or about any Facility to the extent
required under all applicable Environmental Laws and Governmental Authorizations
except where failure to comply, individually or in the aggregate, could not
reasonably be expected to result in a Material Adverse Effect. In the event
Company or any of its Subsidiaries undertakes any remedial action with respect
to any Hazardous Materials on, under or about any Facility, Company or such
Subsidiary shall conduct and complete such remedial action in compliance with
applicable Environmental Laws, except where failure to comply, individually or
in the aggregate, could not reasonably be expected to result in a Material
Adverse Effect.
6.9 EXECUTION OF SUBSIDIARY GUARANTY AND COLLATERAL DOCUMENTS BY FUTURE
SUBSIDIARIES.
A. EXECUTION OF SUBSIDIARY GUARANTY AND COLLATERAL DOCUMENTS.
If any Person becomes a Wholly-Owned North American Subsidiary of Company after
the date hereof, or if any Merged Subsidiary fails to be merged with and into
the Wholly-Owned North American Subsidiary of Company set forth opposite its
name on Schedule 5.21 within three Business Days after the Closing Date, Company
will promptly notify Collateral Agent of that fact and cause such Subsidiary or
Merged Subsidiary, as the case may be, to execute and deliver to Collateral
Agent a counterpart of the Subsidiary Guaranty and the Security Agreement and to
take all such further action and execute all such further documents and
instruments as may be reasonably required to grant and perfect in favor of
Collateral Agent, for the benefit of Lenders, a First
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Priority security interest in all of the personal property assets of such
Subsidiary or Merged Subsidiary described in the applicable Collateral
Documents. With respect to (i) any Person that becomes a Subsidiary of Company
or a Joint Venture of Company or any of its Wholly-Owned North American
Subsidiaries after the date hereof and (ii) any Merged Subsidiary that fails to
be merged with and into the Wholly Owned North American Subsidiary of Company
set forth opposite its name on Schedule 5.21 within three Business Days after
the Closing Date, Company or Canadian Borrower shall also deliver to Collateral
Agent a pledge amendment to the Security Agreement, granting to Collateral Agent
on behalf of Lenders a First Priority security interest in one hundred percent
(100%) of the equity interests in such Subsidiary or Merged Subsidiary, as the
case may be (sixty-five percent (65%) of such equity interests if such
Subsidiary is a Foreign Subsidiary) or one hundred percent (100%) of the equity
interests owned by Company or any of its Wholly-Owned North American
Subsidiaries in such Joint Venture, as the case may be, and Company shall take,
or cause to be taken, all such other actions as Collateral Agent shall deem
necessary or desirable to perfect such security interest.
B. SUBSIDIARY CHARTER DOCUMENTS, LEGAL OPINIONS, ETC. Each of
Company and Canadian Borrower shall deliver to Collateral Agent, together with
the counterpart to the Subsidiary Guaranty and such Collateral Documents to
which it is a party, (i) certified copies of such Subsidiary's or Merged
Subsidiary's constating documents, together with a good standing certificate (or
equivalent thereof) from the jurisdiction of its organization, each to be dated
a recent date prior to their delivery to Collateral Agent, (ii) a copy of such
Subsidiary's or Merged Subsidiary's Bylaws or limited liability company
agreement, as applicable, certified by its secretary or an assistant secretary
as of a recent date prior to their delivery to Collateral Agent, (iii) a
certificate executed by the secretary or an assistant secretary of such
Subsidiary or Merged Subsidiary as to (a) the incumbency and signatures of the
officers of such Subsidiary or Merged Subsidiary executing the Subsidiary
Guaranty and the Collateral Documents to which such Subsidiary or Merged
Subsidiary is a party and (b) the fact that the attached resolutions of the
Board of Directors of such Subsidiary or Merged Subsidiary authorizing the
execution, delivery and performance of the Subsidiary Guaranty and such
Collateral Documents are in full force and effect and have not been modified or
rescinded, (iv) an Intercompany Note executed and delivered by such Subsidiary
or Merged Subsidiary evidencing all intercompany Indebtedness permitted with
respect to such Subsidiary or Merged Subsidiary pursuant to subsection 7.1(iv)
and cause such Intercompany Note to be pledged to Collateral Agent on behalf of
Lenders under the applicable Collateral Document, and (v) a favorable opinion of
counsel to such Subsidiary or Merged Subsidiary, in form and substance
satisfactory to Collateral Agent and its counsel, as to (a) the due organization
and good standing of such Subsidiary or Merged Subsidiary, (b) the due
authorization, execution and delivery by such Subsidiary or Merged Subsidiary of
the Subsidiary Guaranty, and such Collateral Documents, (c) the enforceability
of the Subsidiary Guaranty and such Collateral Documents against such Subsidiary
or Merged Subsidiary, and (d) such other matters as Collateral Agent may
reasonably request, all of the foregoing to be satisfactory in form and
substance to Collateral Agent and its counsel.
6.10 MATTERS RELATING TO ADDITIONAL REAL PROPERTY COLLATERAL.
A. RECORDED LEASEHOLD INTERESTS. To the extent Company or
Canadian Borrower shall not have delivered to Collateral Agent a fully executed
and notarized Mortgage on the Closing Date with respect to any Leasehold
Property designated as a Closing Date
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Mortgaged Property, Company and Canadian Borrower shall continue to use its
reasonable best efforts to obtain a Mortgage on such Leasehold Property. If
Company or any of its Subsidiaries acquires any Leasehold Property, Company
shall, or shall cause such Subsidiary to, cause such Leasehold Property to be a
Recorded Leasehold Interest (unless otherwise permitted by Collateral Agent in
its reasonable discretion).
B. ADDITIONAL MORTGAGES, ETC. From and after the Closing Date,
in the event that (i) any Loan Party acquires any fee or leasehold interest in
real property or any Leasehold Property (unless otherwise permitted by
Collateral Agent in its reasonable discretion) or (ii) at the time any Person
becomes a Loan Party, such Person owns or holds any fee or leasehold interest in
real property or any Leasehold Property, in the case of clause (ii) above,
excluding any such Real Property Asset the encumbrancing of which requires the
consent of any applicable lessor or then-existing senior lienholder, where
Company and its Subsidiaries are unable to obtain such lessor's or senior
lienholder's consent (any such non-excluded Real Property Asset described in the
foregoing clauses (i) or (ii) being an "ADDITIONAL MORTGAGED PROPERTY"), such
Loan Party shall deliver to Collateral Agent, as soon as practicable after such
Person acquires such Additional Mortgaged Property or becomes a Loan Party, as
the case may be, a fully executed and notarized Mortgage (an "ADDITIONAL
MORTGAGE"), in proper form to be duly recorded in all appropriate places in all
applicable jurisdictions, encumbering the interest of such Loan Party in such
Additional Mortgaged Property; and such opinions, appraisal, documents, title
insurance, environmental reports that may be reasonably required by Collateral
Agent that would have been delivered on the Closing Date if such Additional
Mortgaged Property were a Closing Date Mortgaged Property.
C. REAL ESTATE APPRAISALS. Each of Company and Canadian
Borrower shall, and shall cause each of its Subsidiaries to, permit an
independent real estate appraiser satisfactory to Collateral Agent, upon
reasonable notice, to visit and inspect any Additional Mortgaged Property for
the purpose of preparing an appraisal of such Additional Mortgaged Property
satisfying the requirements of any applicable laws and regulations (in each case
to the extent such appraisal is required under such laws and regulations as
determined by Collateral Agent in its discretion).
6.11 CASH MANAGEMENT SYSTEM.
Company and Subsidiary Guarantors shall maintain the Cash Management
System (including through timely compliance with their obligations to pay
returned items and other Obligations arising in the ordinary course of operation
of the Cash Management System) as described in Schedule 6.11 annexed hereto.
Company shall, and shall cause each Subsidiary Guarantor to, (i) use and
maintain its Deposit Accounts and cash management systems in a manner reasonably
satisfactory to US Administrative Agent and (ii) obtain and maintain a deposit
account control agreement in form and substance reasonably satisfactory to US
Administrative Agent for each Deposit Account of Company and Subsidiary
Guarantors. Upon US Administrative Agent's request, Company shall, and shall
cause each Subsidiary Guarantor to, make such modifications to the Cash
Management System as US Administrative Agent shall reasonably request,
including, without limitation, moving any Deposit Account to a different bank,
savings and loan association, credit union or like organization on terms and
conditions, and subject to arrangements, reasonably satisfactory to US
Administrative Agent.
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Company shall not permit the aggregate amount of money or currency held by its
Foreign Subsidiaries in a Deposit Account or otherwise at any time to exceed the
equivalent of US$50,000.
6.12 UNSECURED SETTLEMENT DISTRIBUTION.
Company shall pay the Unsecured Settlement Distribution (as defined in
the Plan of Reorganization) in accordance with the Plan of Reorganization and
shall apply the proceeds of common equity contributions made by the Sponsors to
Company and Company's own cash-on-hand to the payment of the Unsecured
Settlement Distribution prior to applying the proceeds of any Loans to such
payment. Within 90 days after the Closing Date, Company shall deliver to US
Administrative Agent an Officer's Certificate setting forth the final
calculation of the Company-Funded Unsecured Settlement Amount, and each amount
described in the definition of the Company-Funded Unsecured Settlement Amount
all in a level of detail and otherwise in form and substance satisfactory to US
Administrative Agent. In no event shall Company permit the Company-Funded
Unsecured Settlement Amount to exceed 80% of the amount of common equity
contributed by the Sponsors to Company to fund the Unsecured Settlement
Distribution.
6.13 RATINGS.
Upon the request of US Administrative Agent, Company shall obtain
ratings of the Restructured Term Loans from S&P and/or ▇▇▇▇▇'▇.
6.14 EMPLOYEE BENEFIT PLANS.
Company and Canadian Borrower shall and shall cause each of their
respective Subsidiaries to ensure that each Canadian Pension Plan and Canadian
Benefit Plan is administered in a timely manner in all respects in accordance
with the applicable pension plan text, funding agreement, the Income Tax Act
(Canada) and all other applicable laws.
6.15 Dissolved or Disposed Subsidiaries.
With respect to each Person listed on Schedule 6.15, Company shall have
either caused such Person to be dissolved, liquidated, or merged out of
existence or sold, transferred, rejected or otherwise disposed of all equity
interests of such Person owned by Company or any of its Subsidiaries, in each
case within 45 days after the Closing Date.
SECTION 7. BORROWERS' NEGATIVE COVENANTS
Company covenants and agrees that, so long as any of the Commitments
hereunder shall remain in effect and until payment in full of all of the Loans
and other Obligations and the cancellation or expiration of all Letters of
Credit, unless Requisite Lenders shall otherwise give prior written consent,
Company shall perform, and shall cause each of its Subsidiaries to perform, all
covenants in this Section 7 (it being understood that (i) Canadian Borrower
covenants and agrees to perform all covenants applicable to it as a Subsidiary
of Company and (ii) cause each of its Subsidiaries to perform all applicable
covenants).
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7.1 INDEBTEDNESS.
Company shall not, and shall not permit any of its Subsidiaries to,
directly or indirectly, create, incur, assume or guaranty, or otherwise become
or remain directly or indirectly liable with respect to, any Indebtedness,
except:
(i) Company may become and remain liable with respect
to the Obligations;
(ii) Company and its Subsidiaries may become and
remain liable with respect to Contingent Obligations permitted by subsection 7.4
and, upon any matured obligations actually arising pursuant thereto, the
Indebtedness corresponding to the Contingent Obligations so extinguished;
(iii) Company and its Subsidiaries may become and
remain liable with respect to Indebtedness in respect of Capital Leases;
(iv) Company may become and remain liable with
respect to Indebtedness to any of its Wholly-Owned North American Subsidiaries,
and any Wholly-Owned North American Subsidiary of Company may become and remain
liable with respect to Indebtedness to Company or any other Wholly-Owned North
American Subsidiary of Company; provided that (a) all such intercompany
Indebtedness shall be evidenced by an Intercompany Note that is pledged to
Collateral Agent pursuant to the terms of the applicable Collateral Document;
(b) all such intercompany Indebtedness shall be subordinated in right of payment
to the payment in full of the Obligations pursuant to the terms of the
Intercompany Notes; (c) any payment by any Wholly-Owned North American
Subsidiary of Company under any guaranty of the Obligations shall result in a
pro tanto reduction of the amount of any intercompany Indebtedness owed by such
Wholly-Owned North American Subsidiary to Company or to any of its Wholly-Owned
North American Subsidiaries for whose benefit such payment is made; and (d) in
the case of Indebtedness of Canadian Borrower and/or any of its Wholly-Owned
North American Subsidiaries to Company or any of its Wholly-Owned North American
Subsidiaries (other than Canadian Borrower and its North American Subsidiaries),
such intercompany Indebtedness is secured by Third Priority Liens on all of the
assets of Canadian Borrower and its Wholly-Owned Subsidiaries, which Third
Priority Liens are (1) granted pursuant to documentation reasonably satisfactory
in form and substance to Collateral Agent and its counsel and (2) collaterally
assigned to Collateral Agent for the benefit of Lenders pursuant to the
applicable Collateral Document.
(v) Company and its Subsidiaries may become and
remain liable with respect to Indebtedness secured by Liens permitted under
subsection 7.2A(iii); provided that the aggregate amount of Indebtedness
permitted under this subsection 7.1(v) outstanding at any time shall not exceed
US$20,000,000 or the Equivalent Amount in any other currency;
(vi) Company and its Subsidiaries may remain liable
with respect to Indebtedness existing on the Closing Date set forth in Schedule
7.1(vi);
(vii) Company and its Wholly-Owned North American
Subsidiaries may become and remain liable with respect to Indebtedness of a
Person existing at the time such
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Person is merged into or consolidated with Company or any Wholly-Owned North
American Subsidiary of Company or becomes a Wholly-Owned North American
Subsidiary of Company; provided that such Indebtedness was not incurred in
connection with, in contemplation of, or with the purpose of financing such
merger, consolidation or acquisition; provided, further, that Company can
demonstrate in form and substance satisfactory to US Administrative Agent that,
immediately before and after giving effect to the incurrence of such
Indebtedness, (a) Company is in compliance on a pro forma basis with all
covenants set forth in Section 7 of this Agreement and (b) there is no Potential
Event of Default or Event of Default; provided, still further, that the
aggregate amount of Indebtedness permitted under this subsection 7.1(vii)
outstanding at any time shall not exceed US$20,000,000 or the Equivalent Amount
in any other currency;
(viii) Company and its Subsidiaries may become and
remain liable with respect to other Indebtedness in an aggregate principal
amount not to exceed US$5,000,000 at any time outstanding;
(ix) non-Wholly-Owned Subsidiaries of Company may
become and remain liable with respect to Investments by the Company and its
Wholly-Owned Subsidiaries in such non-Wholly-Owned Subsidiaries of Company to
the extent permitted by subsection 7.3A(viii)(a);
(x) Company and its Subsidiaries may become and
remain liable with respect to the Restructured Term Loans in the original
principal amount of US$679,932,498.68 owing under the Term Loan Agreement;
(xi) if Company exercises its Cure Rights pursuant to
subsection 7.6C, Company may become and remain liable with respect to
Indebtedness under Permitted Cure Securities; and
(xii) Off-Balance Sheet Subsidiaries may become and
remain liable with respect to Indebtedness used solely to finance Off-Balance
Sheet Capital Expenditures.
(xiii) Company may issue Subordinated Indebtedness;
provided that the proceeds of such Subordinated Indebtedness are used as a
mandatory prepayment and/or mandatory reduction of the Revolving Loan
Commitments pursuant to subsection 2.4B(iii).
7.2 LIENS AND RELATED MATTERS.
A. PROHIBITION ON LIENS. Company shall not, and shall not
permit any of its Subsidiaries to, directly or indirectly, create, incur, assume
or permit to exist any Lien on or with respect to any property or asset of any
kind (including any document or instrument in respect of goods or accounts
receivable) of Company or any of its Subsidiaries, whether now owned or
hereafter acquired, or any income or profits therefrom, or file or permit the
filing of, or permit to remain in effect, any financing statement or other
similar notice of any Lien with respect to any such property, asset, income or
profits under the Uniform Commercial Code of any State, the PPSA of any province
or territory in Canada or under any similar filing, recording or notice statute,
except:
(i) Permitted Encumbrances;
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(ii) Liens granted pursuant to the Collateral
Documents;
(iii) (A) Liens securing Indebtedness incurred to
finance the acquisition, construction or improvement of any real property assets
acquired or held by Company or any of its Subsidiaries in the ordinary course of
business (hereinafter referred to individually as a "PURCHASE MONEY MORTGAGE")
and (B) purchase money mortgages or security interests, conditional sale
arrangements and other similar security interests on motor vehicles and
equipment acquired by Company or any Subsidiary (hereinafter referred to
individually as a "PURCHASE MONEY SECURITY INTEREST"); provided, however, that:
(a) the aggregate amount of Indebtedness
outstanding at any time secured by Purchase Money Mortgages
and Purchase Money Security Interests shall not exceed
US$20,000,000 or the Equivalent Amount in any other currency;
(b) the transaction in which any Purchase
Money Mortgage or Purchase Money Security Interest is proposed
to be created is not then prohibited by this Agreement;
(c) any Purchase Money Mortgage or Purchase
Money Security Interest shall attach only to the property or
asset acquired, constructed or improved (in the case of a
Purchase Money Mortgage) or acquired (in the case of a
Purchase Money Security Interest) in such transaction and, in
each case, shall not extend to or cover any other assets or
properties of Company, or, as the case may be, a Subsidiary;
(d) the Indebtedness secured or covered by
any Purchase Money Mortgage or Purchase Money Security
Interest shall not exceed the lesser of the cost or fair
market value of the property or asset acquired and shall not
be renewed, extended or prepaid from the proceeds of any
borrowing by Company or any Subsidiary;
(iv) Other Liens securing Indebtedness in an
aggregate amount not to exceed US$10,000,000 or the Equivalent Amount in any
other currency at any time outstanding;
(v) Liens existing on the Closing Date set forth on
Schedule 7.2A(v) or extending (without increasing the amount of Indebtedness
secured by such Lien at the time of such extension) any of the Liens set forth
on Schedule 7.2A(v);
(vi) Liens securing Indebtedness permitted by
subsection 7.1(vii) on property or assets of a Person existing at the time such
Person is merged into or consolidated with Company or any Wholly-Owned North
American Subsidiary of Company or becomes a Wholly-Owned North American
Subsidiary of Company; provided that such Liens were not incurred in connection
with, in contemplation of, or for the purpose of facilitating the financing of,
such merger, consolidation or acquisition;
(vii) Liens securing payment of Currency Agreements
or Interest Rate Agreements, in each case to the extent the counterparty to any
such agreement is (or at the time such agreement was entered into, was) a Lender
or an Affiliate of a Lender; and
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(viii) Third Priority Liens securing Indebtedness of
Canadian Borrower and/or any of its Wholly-Owned North American Subsidiaries due
and owing to Company; provided that (a) such Indebtedness is permitted by
subsection 7.1(iv), (b)(1) such Indebtedness is pledged to Collateral Agent for
the benefit of Lenders pursuant to the applicable Collateral Document and (2)
such Third Priority Liens are collaterally assigned to Collateral Agent for the
benefit of Lenders pursuant to the applicable Collateral Document and (c) such
Liens are granted pursuant to documentation reasonably satisfactory in form and
substance to Collateral Agent and its counsel;
(ix) Second Priority Liens on assets of (a) Company
and its Subsidiaries, and (b) Subsidiary Guarantors under the US Subsidiary
Guaranty securing Indebtedness of Company under the Term Loan Agreement; and
(x) Liens on assets of any Off-Balance Sheet
Subsidiary securing Indebtedness of such Off-Balance Sheet Subsidiary used
solely to finance Off-Balance Sheet New Build Capital Expenditures of such
Off-Balance Sheet Subsidiary.
B. EQUITABLE LIEN IN FAVOR OF LENDERS. If Company or any of
its Subsidiaries shall create or assume any Lien upon any of its properties or
assets, whether now owned or hereafter acquired, other than Liens excepted by
the provisions of subsection 7.2A, it shall make or cause to be made effective
provision whereby the Obligations will be secured by such Lien equally and
ratably with any and all other Indebtedness secured thereby as long as any such
Indebtedness shall be so secured; provided that, notwithstanding the foregoing,
this covenant shall not be construed as a consent by Requisite Lenders to the
creation or assumption of any such Lien not permitted by the provisions of
subsection 7.2A.
C. NO FURTHER NEGATIVE PLEDGES. Except with respect to (i)
specific property encumbered to secure payment of particular Indebtedness or to
be sold pursuant to an executed agreement with respect to an Asset Sale and (ii)
Liens on properties leased in the ordinary course of business with respect to
the property so leased, none of Company or any of its Subsidiaries (other than
any Off-Balance Sheet Subsidiary) shall enter into any agreement prohibiting the
creation or assumption of any Lien for the benefit of the Lenders upon any of
its properties or assets, whether now owned or hereafter acquired.
D. NO RESTRICTIONS ON SUBSIDIARY DISTRIBUTIONS TO COMPANY OR
OTHER SUBSIDIARIES. Except (i) as provided herein and in the Term Loan
Agreement, (ii) as provided in any loan agreement or other document evidencing
Indebtedness of (x) any of Company's Wholly-Owned North American Subsidiaries
permitted under subsection 7.1(vi) or (vii) or (y) any Off-Balance Sheet
Subsidiary used solely to finance Off-Balance Sheet New Build Capital
Expenditures, (iii) for any agreement that has been entered into for the sale or
disposition of all or substantially all of the equity ownership interests or
assets of such Subsidiary (provided that (x) the consummation of such sale or
disposition is permitted by this Agreement, (y) such restriction only applies to
the equity ownership interests or assets to be sold pursuant to such agreement
and (z) such restriction terminates upon consummation or abandonment of such
disposition and upon termination of such agreement), (iv) for any security
agreement or other similar document creating or evidencing a Lien permitted by
subsection 7.2A(iii), (iv), (v), (vi), (vii), (viii), (ix) or (x) securing
Indebtedness permitted to be incurred under subsection 7.1, in
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each case to the extent that such security agreement or other document imposes
restrictions of the nature described in clause (d) below on the property subject
to such Lien, (v) for restrictions on non-Wholly-Owned Subsidiaries, (vi) for
customary provisions restricting subletting or assignment of leases, licenses
and other contractual rights and obligations, and (vii) by reason of applicable
law, Company will not, and will not permit any of its Subsidiaries to, create or
otherwise cause or suffer to exist or become effective any consensual
encumbrance or restriction of any kind on the ability of any such Subsidiary to
(a) pay dividends or make any other distributions on any of such Subsidiary's
capital stock owned by Company or any other Subsidiary of Company, (b) repay or
prepay any Indebtedness owed by such Subsidiary to Company or any other
Subsidiary of Company, (c) make loans or advances to Company or any other
Subsidiary of Company, or (d) transfer any of its property or assets to Company
or any other Subsidiary of Company.
7.3 INVESTMENTS; JOINT VENTURES.
A. Company shall not, and shall not permit any of its
Subsidiaries to, directly or indirectly, make or own any Investment in any
Person, including any Joint Venture, except:
(i) Company and its Subsidiaries may make and own
Investments in Cash Equivalents;
(ii) Company and its Subsidiaries may continue to own
the Investments owned by them as of the Closing Date in any Subsidiaries of
Company;
(iii) Company and its Wholly-Owned North American
Subsidiaries may make intercompany loans to the extent permitted under
subsection 7.1(iv);
(iv) Company and its Wholly-Owned North American
Subsidiaries may make and continue to own equity Investments in any Person
which, prior to the making of such Investments, is a Wholly-Owned North American
Subsidiary of Company;
(v) Company and its Subsidiaries may continue to own
the Investments owned by them and described in Schedule 7.3 annexed hereto;
(vi) Company and its Subsidiaries may make
Investments constituting (a) accounts receivable arising in the ordinary course
of business, (b) prepaid film rentals, (c) deposits made in connection with the
purchase price of goods or services, in each case in the ordinary course of
business or (d) refundable construction advances made with respect to the
construction of properties that are to be used in the business of Company or its
Wholly-Owned North American Subsidiaries and that are not outstanding more than
one year from the date made; provided that any Investments made pursuant to the
preceding clause (d) that are not repaid within one year of being made shall be
deemed to be Permitted Investments for the purpose of calculating compliance
with subsection 7.3A(viii) and subsection 7.7(iii);
(vii) Company and its Subsidiaries may make
Investments constituting (a) payroll advances, (b) travel and entertainment
advances and (c) relocation loans to officers and employees of Company or any of
its Subsidiaries in the ordinary course of business;
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provided that the aggregate amount of Investments permitted under this clause
shall not exceed US $2,500,000 or the Equivalent Amount in any other currency at
any time outstanding;
(viii) Company and its Wholly-Owned North American
Subsidiaries may make and continue to own Permitted Investments and Permitted
Acquisitions; provided that (i) Company and its Wholly-Owned North American
Subsidiaries shall not (a) make Permitted Investments in an aggregate amount
(net of the amount of loans, advances and Contingent Obligations constituting
Permitted Investments that are repaid, released or cancelled, as the case may
be, during the term of this Agreement) in excess of US$8,000,000 or the
Equivalent Amount in any other currency in any Fiscal Year (the amount of such
Permitted Investments made in such Fiscal Year being the "INVESTMENT EXPENDITURE
AMOUNT") and (b) make Permitted Acquisitions in any Fiscal Year in an aggregate
amount in excess of the difference between (1) US$25,000,000 or the Equivalent
Amount in any currency and (2) the sum of (A) the Investment Expenditure Amount
for such Fiscal Year plus (B) the amount of Consolidated New Build Capital
Expenditures for such Fiscal Year (the amount of such Permitted Acquisitions
made in such Fiscal Year being the "ACQUISITION EXPENDITURE AMOUNT," and
together with the Investment Expenditure Amount, the "INVESTMENT/ACQUISITION
EXPENDITURE AMOUNT"); and
(ix) Company and its Wholly-Owned Subsidiaries may
make Investments constituting loans and/or advances to Joint Ventures directly
owned by any of them in an aggregate amount not to exceed at any time
US$2,000,000 for the operating needs in the ordinary course of business of such
Joint Ventures;
(x) Company and its Wholly-Owned North American
Subsidiaries may make and continue to own Investments in Megabox Cineplex, Inc.;
provided that (a) the aggregate amount of such Investments does not exceed
US$25,000,000, and (b) the sole source of funds for such Investments is Cash
common equity contributions to Company by Sponsors; and
(xi) any Off-Balance Sheet Subsidiary may make and
continue to own Investments in other Off-Balance Sheet Subsidiaries.
provided that the foregoing shall not prohibit any Subsidiary of Company from
making dividends or distributions to Company or any Wholly-Owned North American
Subsidiary of Company; and provided, further, that any Investment which when
made complies with the requirements of the definition of the term Cash
Equivalent may continue to be held notwithstanding that such Investment if made
thereafter would not comply with such requirements.
B. Notwithstanding anything to the contrary contained in
subsection 7.3A, Company and its Subsidiaries shall not (i) make any Investment
in any Joint Venture if, upon the making of such Investment, such Joint Venture
is or becomes a Subsidiary of Company or any of its Subsidiaries or (ii) make
any Investment in any Person listed on Schedule 7.3B.
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7.4 CONTINGENT OBLIGATIONS.
Company shall not, and shall not permit any of its Subsidiaries to,
directly or indirectly, create or become or remain liable with respect to any
Contingent Obligation, except:
(i) Company and its Subsidiaries may become and
remain liable with respect to Contingent Obligations in respect of Letters of
Credit;
(ii) Company may become and remain liable with
respect to Contingent Obligations arising under the Company Guaranty, and each
Subsidiary Guarantor may become and remain liable with respect to Contingent
Obligations arising under the Subsidiary Guaranty;
(iii) Company and its Subsidiaries may become and
remain liable with respect to Contingent Obligations in respect of customary
indemnification and purchase price adjustment obligations incurred in connection
with Asset Sales or other sales of assets;
(iv) (A) Company and its Subsidiaries may become and
remain liable with respect to Contingent Obligations in respect of any
Indebtedness of Company or any of its Wholly-Owned North American Subsidiaries
and (B) Company and its Subsidiaries may become and remain liable with respect
to Contingent Obligations in respect of any Indebtedness, Operating Leases or
other obligations of any Joint Venture or non-Wholly-Owned Subsidiary (other
than an Off-Balance Sheet Subsidiary); provided that the aggregate maximum
liability of Company and its Subsidiaries with respect to the Contingent
Obligations permitted under the preceding clause (B) shall not exceed
US$8,000,000 or the Equivalent Amount in any other currency at any time;
provided, further, that the aggregate maximum liability of Company and its
Subsidiaries with respect to the Contingent Obligations permitted under the
preceding clause (B) shall be deemed to be a "Permitted Investment" for purposes
of calculating compliance with subsection 7.3A(viii) and subsection 7.7(iii) but
shall cease to be included in such calculation upon the permanent release or
cancellation of such Contingent Obligations.
(v) Company and its Subsidiaries may remain liable
with respect to the Contingent Obligations existing on the Closing Date set
forth in Schedule 7.4(v);
(vi) Company and its Subsidiaries may become and
remain liable with respect to other Contingent Obligations (other than
Contingent Obligations in respect of any Indebtedness or other obligation of any
Off-Balance Sheet Subsidiary); provided that the maximum aggregate liability,
contingent or otherwise, of Company and its Subsidiaries in respect of all such
Contingent Obligations shall at no time exceed US$20,000,000 or the Equivalent
Amount in any other currency;
(vii) Company and its Subsidiaries may become and
remain liable with respect to guarantees of Operating Leases, construction
contracts and other contracts and agreements of Company and its Wholly-Owned
North American Subsidiaries entered into the ordinary course of business of
Company and its Wholly-Owned North American Subsidiaries;
(viii) Company and its Subsidiaries may become and
remain liable with respect to Contingent Obligations in respect of Currency
Agreements and Interest Rate
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Agreements (other than Currency Agreements and Interest Rate Agreements of any
Off-Balance Sheet Subsidiary), in each case to the extent the counterparty to
any such Currency Agreements and Interest Rate Agreements is (or at the time
such Currency Agreement or Interest Rate Agreement was entered into, was) a
Lender or an Affiliate of a Lender;
(ix) Company and its Subsidiaries may become and
remain liable with respect to Contingent Obligations in respect of leases
assumed by other Persons (other than Off-Balance Sheet Subsidiaries) in
connection with theatres that are sold or closed by Company or any of its
Subsidiaries, in each case to the extent Company or any of its Subsidiaries
remains liable for any deficiencies thereunder; and
(x) Company's Subsidiaries may become and remain
liable with respect to Contingent Obligations, on a subordinated basis, with
respect to Subordinated Indebtedness incurred by Company pursuant to subsection
7.1(xiii).
7.5 RESTRICTED JUNIOR PAYMENTS; CERTAIN OTHER PAYMENTS.
Company shall not, and shall not permit any of its Subsidiaries to,
directly or indirectly, declare, order, pay, make or set apart any sum for any
Restricted Junior Payment; provided that so long as no Potential Event of
Default or Event of Default has occurred and is continuing or would result
therefrom, Company may purchase, redeem, acquire, cancel or otherwise retire for
value shares of capital stock of Company, or warrants or options on any such
shares or related stock appreciation rights, phantom shares or similar
securities, in each case that are owned by officers or employees (or their
estates or beneficiaries under their estates), upon the death, disability,
retirement, termination of employment or pursuant to the terms of the stock
option plan or any other agreement under which such shares of capital stock,
warrants, options, related rights, phantom shares or similar securities were
issued or under which they may be put or called; provided further that the
aggregate cash consideration paid for such purchase, redemption, acquisition,
cancellation or other retirement for value of such shares of capital stock,
options, related rights or similar securities shall not exceed US$10,000,000
during the term of this Agreement.
7.6 FINANCIAL PERFORMANCE COVENANTS.
A. MAXIMUM LEVERAGE RATIO. Company shall not permit the
Leverage Ratio, calculated on a Pro Forma Basis, for any four Fiscal Quarter
period ending during any of the periods set forth below to exceed the
correlative ratio indicated:
------------------------------------------------------------
Maximum
Period Leverage Ratio
------------------------------------------------------------
Closing Date-August 31, 2003 5.15 : 1.00
------------------------------------------------------------
September 1, 2003-August 31, 2004 4.50 : 1.00
------------------------------------------------------------
September 1, 2004-August 31, 2005 4.00 : 1.00
------------------------------------------------------------
September 1, 2005-August 31, 2006 3.25 : 1.00
------------------------------------------------------------
September 1, 2006 and thereafter 2.75 : 1.00
------------------------------------------------------------
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B. MINIMUM DEBT SERVICE COVERAGE RATIO. Company shall not
permit the Debt Service Coverage Ratio, calculated on a Pro Forma Basis, for any
four-Fiscal Quarter period ending during any of the periods set forth below to
be less than the correlative ratio indicated.
---------------------------------------------------------------
Minimum Debt
Period Service Coverage Ratio
---------------------------------------------------------------
Closing Date- February 28, 2006 1.25 : 1.00
---------------------------------------------------------------
March 1, 2006 and thereafter 1.10 : 1.00
---------------------------------------------------------------
C. COMPANY'S RIGHTS TO CURE.
(i) Financial Performance Covenants. If Company fails
to comply with the requirements of a Financial Performance Covenant, until the
expiration of the 10th day subsequent to the date the Compliance Certificate
calculating such covenant is due pursuant to subsection 6.1(iv) and so long as
no Cure Rights Prohibition Period shall be in effect, Company shall have Cure
Rights, and upon the receipt by Company of Cash following the exercise of such
Cure Rights the Financial Performance Covenants shall be recalculated giving
effect to one of the following pro forma adjustments specified by Company:
(a) Wholly-Owned EBITDA shall be increased
by the lesser of (1) the Cure Amount and (2) an amount equal to 10% of
Wholly-Owned EBITDA for the four Fiscal Quarter period utilized in
determining compliance with the Financial Performance Covenant (before
giving effect to the increase in Wholly-Owned EBITDA made by the
addition of the Cure Amount);
(b) provided that the Cure Amount is applied
to prepay the Loans in accordance with subsection 2.4B(iii)(f),
Wholly-Owned Total Debt shall be reduced by the amount of the Cure
Amount.
If, after giving effect to the foregoing
recalculations, Company shall then be in compliance with the requirements of all
Financial Performance Covenants, Company shall be deemed to have satisfied the
requirements of the Financial Performance Covenants as of the relevant date of
determination with the same effect as though there was no failure to comply
therewith at such date, and any breach or default of the Financial Performance
Covenants theretofore occurring as of the relevant date of determination (but
not with respect to any preceding date of determination) shall be deemed cured
for all purposes of this Agreement. If Company shall have satisfied the
requirements of the Financial Performance Covenants by deeming the Cure Amount
to increase Wholly-Owned EBITDA pursuant to subsection 7.6C(i)(a), until such
time as Company is in compliance with the Financial Performance Covenants
without the making of any Cure Contribution, Company may not borrow US Tranche
Revolving Loans or CN Tranche Revolving Loans during the period from the date of
the making of such Cure Contribution through the time of such compliance in
excess of an aggregate amount (determined without giving effect to any
repayments or prepayments) equal to two times such Cure Contribution.
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(ii) Limitation on Exercise of Cure Rights. Company
shall have the right to exercise Cure Rights during up to two consecutive Fiscal
Quarters and not again thereafter until the expiration of the Cure Rights
Prohibition Period; provided that in no event shall Company be entitled to
exercise Cure Rights more than four times during the term of this Agreement.
7.7 RESTRICTION ON FUNDAMENTAL CHANGES; ASSET SALES AND ACQUISITIONS.
Company shall not, and shall not permit any of its Subsidiaries to,
alter the corporate, capital or legal structure of Company or any of its
Subsidiaries, or enter into any transaction of merger or consolidation, or
liquidate, wind-up or dissolve itself (or suffer any liquidation or
dissolution), or convey, sell, lease or sub-lease (as lessor or sub-lessor),
transfer or otherwise dispose of, in one transaction or a series of
transactions, all or any portion of its business, property or fixed assets,
whether now owned or hereafter acquired, or acquire by purchase or otherwise all
or any portion of the business, property or fixed assets of, or stock or other
evidence of beneficial ownership of, any Person or any division or line of
business of any Person, except:
(i) any Wholly-Owned North American Subsidiary of
Company may be merged with or into Company or any Wholly-Owned North American
Subsidiary of Company, or may be liquidated, wound up or dissolved, or all or
any part of its business, property or assets may be conveyed, sold, leased,
transferred or otherwise disposed of, in one transaction or a series of
transactions, to Company or any Wholly-Owned North American Subsidiary of
Company; provided that, in the case of such a merger , Company or such
Wholly-Owned North American Subsidiary shall be the continuing or surviving
corporation;
(ii) Company and its Subsidiaries may sell or
otherwise dispose of assets in transactions that do not constitute Asset Sales;
provided that the consideration received for such assets shall be in an amount
at least equal to the fair market value thereof;
(iii) Company and its Subsidiaries may make Permitted
Acquisitions and Permitted Investments; to the extent permitted by subsection
7.3A(viii);
(iv) Company and its Subsidiaries may make Asset
Sales of the assets listed on Schedule 1.1C; provided that (a) until the
aggregate, cumulative amount of Net Asset Sale Proceeds from such Asset Sales
exceeds the West 34th Street Loan Amount, (1) Company shall use such Net Asset
Sale Proceeds to repay Revolving Loans (but not reduce the Revolving Loan
Commitments) and (2) to the extent such Net Asset Sale Proceeds exceed the
amount of Revolving Loans outstanding at the time Company receives such Net
Asset Sale Proceeds, Company may retain such excess, and (b) the aggregate,
cumulative amount of Net Asset Sale Proceeds from such Asset Sales in excess of
the West 34th Street Loan Amount shall be applied as a mandatory prepayment in
accordance with subsection 2.4B(III)(A);
(v) Company and its Subsidiaries may make Asset Sales
of assets having a fair market value not in excess of US$10,000,000 in any
individual case or US$30,000,000 in the aggregate, in each case in compliance
with subsection 2.4B(iii)(a); provided that (a) the consideration received for
such assets shall be in an amount at least equal to
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the fair market value thereof, (b) at least 90% of the consideration received
shall be cash and (c) the proceeds of such Asset Sales shall be applied as
required by subsection 2.4B(iii)(a);
(vi) Company may cause the dissolution of any
Subsidiary to the extent permitted by subsection 6.2; and
(vii) Company and its Wholly-Owned North American
Subsidiaries may make Asset Swaps provided that each of the following conditions
is satisfied: (a) the aggregate fair market value (as determined in good faith
by the Board of Directors of Company) of such Asset Swap shall not exceed
US $25,000,000 in any Fiscal Year or US$75,000,000 during the life of this
Agreement; (b) the fair market value of the assets received (including cash not
exceeding 5% of such value) pursuant to such Asset Swap (the "ACQUIRED ASSETS")
shall be equal to at least the fair market value (as determined in good faith by
the Board of Directors of Company) of the assets transferred pursuant to such
Asset Swap (the "TRANSFERRED ASSETS"); (c) the cash portion of any consideration
received by Company or any of its Subsidiaries shall be used to make a mandatory
prepayment in accordance with subsection 2.4B(iii)(a); (d) the Acquired Assets
shall at all times be subject to a First Priority Lien of Lenders pursuant to
the Collateral Documents; and (e) immediately prior to the consummation of such
Asset Swap, Company shall certify to US Administrative Agent and US
Administrative Agent shall be satisfied in its sole discretion, that, after
giving effect to such Asset Swap, on a pro forma basis, Company and its
Wholly-Owned North American Subsidiaries will be Solvent; and (f) both before
and immediately after consummation of such Asset Swap, no Default or Potential
Event of Default shall have occurred and be continuing.
7.8 FISCAL YEAR.
Company shall not change its Fiscal Year-end from February 28 or
February 29, as the case may be, of each calendar year.
7.9 SALE OR DISCOUNT OF RECEIVABLES.
Except as set forth on Schedule 7.9, Company shall not, and shall not
permit any of its Subsidiaries to, directly or indirectly, sell with recourse,
or discount or otherwise sell for less than the face value thereof, any of its
notes or accounts receivable other than (A) sales for collection of defaulted
receivables over 120 days past due, (B) fees and expenses incurred in the
ordinary course of business in connection with the processing of credit card
transactions and (C) the monetization of receivables received by Company or any
of its Subsidiaries in connection with any Asset Sale.
7.10 TRANSACTIONS WITH SHAREHOLDERS AND AFFILIATES.
Except for the transactions described on Schedule 7.10, Company shall
not, and shall not permit any of its Subsidiaries to, directly or indirectly,
enter into or permit to exist any material transaction (including, without
limitation, 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 Company, any Affiliate of Company or of any such holder or any of
Company's Off-Balance Sheet Subsidiaries or Joint Ventures, on terms that are
less favorable to Company or that Subsidiary, as the case may be, than those
that might be obtained at the time in a comparable
122
arms-length transaction from Persons who are not such a holder, Affiliate,
Off-Balance Sheet Subsidiary or Joint Venture; provided that the foregoing
restriction shall not apply to (i) any transaction between Company and any of
its Wholly-Owned North American Subsidiaries or between any of its Wholly-Owned
North American Subsidiaries; (ii) reasonable and customary fees paid to members
of the Boards of Directors of Company and its Subsidiaries to Persons not
employed by or associated with the Sponsors or their respective Affiliates;
(iii) Restricted Junior Payments permitted by subsection 7.5, or (iv) the
issuance of Permitted Cure Securities upon the exercise of Cure Rights pursuant
to subsection 7.6C and the payment of non-cash pay-in-kind dividends and
interest on such Permitted Cure Securities. Notwithstanding the foregoing
sentence, provided that the Applicable Leverage Ratio is less than 3.50:1.00 and
no Event of Default or Potential Event of Default has occurred and is continuing
or would be caused thereby, Company may pay Management Fees in an aggregate
amount of up to US$5,000,000 in any Fiscal Year, and any Management Fees not
paid in cash because of the foregoing restrictions or otherwise may accrue
pursuant to provisions approved by US Administrative Agent subordinating such
Management Fees to the prior payment in full of the Obligations and the
obligations relating to the Term Loan Agreement and such accrued Management Fees
may thereafter be paid in Cash so long as (x) after paying such Management Fees
and giving pro forma effect thereto, Company is in compliance with all covenants
under this Agreement, (y) the Applicable Leverage Ratio after giving pro forma
effect to such payment does not exceed 3.50:1.00, and (z) Company shall deliver
to US Administrative Agent an Officer's Certificate executed by its chief
financial officer certifying as to the matters in clauses (x) and (y) above and
further stating that, after giving effect to the Cash payment of such Management
Fees, Company shall be able to make the scheduled payments of principal and
interest hereunder and under the Term Loan Agreement.
7.11 DISPOSAL OF SUBSIDIARY STOCK.
Except pursuant to the Collateral Documents and except for any sale (x)
of 100% of the capital stock or other equity Securities of any of its
Subsidiaries in compliance with the provisions of subsections 2.4B(iii) and 7.7
and (y) in connection with the formation or sale of interests in Joint Ventures
and non-Wholly-Owned Subsidiaries in compliance with subsection 2.4B(iii) and
7.7, Company shall not:
(i) directly or indirectly sell, assign, pledge or
otherwise encumber or dispose of any shares of capital stock or other equity
Securities of any of its Subsidiaries, except to qualify directors if required
by applicable law; or
(ii) permit any of its Subsidiaries directly or
indirectly to sell, assign, pledge or otherwise encumber or dispose of any
shares of capital stock or other equity Securities of any of its Subsidiaries
(including such Subsidiary), except to Company, to a Wholly-Owned North American
Subsidiary of Company, or to qualify directors if required by applicable law.
7.12 CONDUCT OF BUSINESS.
From and after the Closing Date, Company shall not, and shall not
permit any of its Subsidiaries to, engage in any business other than (i) the
business of operating movie theatres
123
and similar or related businesses and (ii) such other lines of business as may
be consented to in writing by Requisite Lenders.
7.13 CAPITAL EXPENDITURES.
A. MAXIMUM MAINTENANCE CAPITAL EXPENDITURES. Company shall
not, and shall not permit any of its Subsidiaries to, make Maintenance Capital
Expenditures in any Fiscal Year in excess of US$10,000,000; provided that if the
aggregate amount of Maintenance Capital Expenditures made by Company and its
Subsidiaries in any Fiscal Year is less than US$10,000,000, the amount of
Maintenance Capital Expenditures Company and its Subsidiaries shall be permitted
to make in the immediately succeeding Fiscal Year shall be increased by such
difference.
B. MAXIMUM CONSOLIDATED NEW BUILD CAPITAL EXPENDITURES.
(i) Company shall not, and shall not permit any of
its Subsidiaries to, make Consolidated New Build Capital Expenditures in any
Fiscal Year in excess of the difference between (x) US$25,000,000 (the
"CONSOLIDATED NEW BUILD CAPITAL EXPENDITURE ALLOWANCE") and (y) the sum of the
Investment/Acquisition Expenditure Amount for such Fiscal Year and the aggregate
amount of Investments made by Company and its Subsidiaries pursuant to clause
(d) of subsection 7.3A(vi); provided that:
(a) the Consolidated New Build Capital
Expenditure Allowance for any particular Fiscal Year shall be increased
to (1) if the CapEx Referenced Leverage Ratio is less than 3.50:1.00
but greater than or equal to 3.00:1.00, US$40,000,000, (2) if the CapEx
Referenced Leverage Ratio is less than 3.00:1.00 but greater than or
equal to 2.50:1.00, US$60,000,000 and (3) if the CapEx Referenced
Leverage Ratio is less than 2.50:1.00, US$75,000,000; and
(b) the Consolidated New Build Capital
Expenditure Allowance for any particular Fiscal Year shall be increased
by an amount equal to (1) if the CapEx Referenced Leverage Ratio is
greater than or equal to 3.50:1.00, the first US$25,000,000 of Retained
Proceeds Available for CapEx or (2) if the CapEx Referenced Leverage
Ratio is less than 3.50:1.00, 100% of Retained Proceeds Available for
CapEx;
(ii) Notwithstanding subsection 7.13B(i), Company and
its Subsidiaries may make, during the Fiscal Year ending February 28, 2003, the
Scheduled 2003 New Build Capital Expenditures.
C. MAXIMUM OFF-BALANCE SHEET NEW BUILD CAPITAL EXPENDITURES.
Company shall not permit any of its Off-Balance Sheet Subsidiaries to incur
Off-Balance Sheet New Build Capital Expenditures in any Fiscal Year in an amount
exceeding 150% of the Consolidated New Build Capital Expenditure Allowance for
such Fiscal Year.
D. MAXIMUM AGGREGATE NEW BUILD CAPITAL EXPENDITURES.
Notwithstanding anything in subsection 7.13B or 7.13C to the contrary, Company
shall not, and shall not permit any of its Subsidiaries to, incur New Build
Capital Expenditures during any Fiscal Year in an aggregate amount in excess of
(i) if the CapEx Referenced Leverage Ratio is equal to or greater
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than 3.50:1.00, the difference between (x) US$75,000,000 and (y) the sum of the
Investment/Acquisition Expenditure Amount for such Fiscal Year and the aggregate
amount of Investments made by Company and its Subsidiaries pursuant to clause
(d) of subsection 7.3(A)(vi) or (ii) if the CapEx Referenced Leverage Ratio is
less than 3.50:1.00, the difference between (x) US$100,000,000 and (y) the sum
of the Investment/Acquisition Expenditure Amount for such Fiscal Year and the
aggregate amount of Investments made by Company and its Subsidiaries pursuant to
clause (d) of subsection 7.3(A)(vi) (the maximum amount permitted in the
foregoing clause (i) or (ii), the "AGGREGATE CAPITAL EXPENDITURE LIMIT");
provided that if the aggregate amount of New Build Capital Expenditures made in
any Fiscal Year is less than the amount set forth in the forgoing clause (i) or
(ii), as applicable, then the Aggregate Capital Expenditure Limit for the
immediately succeeding Fiscal Year shall be increased (a) if the CapEx
Referenced Leverage Ratio for such succeeding Fiscal Year is equal to or greater
than 3.50:1.00, the first US$25,000,000 of such difference or (b) if such CapEx
Referenced Leverage Ratio is less than 3.50:1.00, by the first US$40,000,000 of
such difference.
7.14 AMENDMENTS OF DOCUMENTS RELATING TO SUBORDINATED INDEBTEDNESS AND
ORGANIZATIONAL DOCUMENTS.
A. Company shall not, nor shall it permit any of its
Subsidiaries to, amend or otherwise change the terms of any Subordinated
Indebtedness (or any documents, instruments or agreements pursuant to which such
Subordinated Indebtedness is issued) or make any payment consistent with an
amendment thereof or change thereto if the effect of such amendment or change is
to increase the interest rate on such Subordinated Indebtedness, change (to
earlier dates) any dates upon which payments of principal or interest are due
thereon, change any event of default or condition to an event of default with
respect thereto (other than to eliminate any such event of default or increase
any grace period related thereto), change the redemption, prepayment or
defeasance provisions thereof, change the subordination provisions thereof (or
of any guaranty thereof), or change any collateral therefor (other than to
release such collateral), or if the effect of such amendment or change, together
with all other amendments or changes made, is to increase materially the
obligations of the obligor thereunder or to confer any additional rights on the
holders of such Subordinated Indebtedness (or a trustee or other representative
on their behalf) which would be adverse to any Loan Party, either Administrative
Agent or any Lender.
B. Company shall not, and shall not permit any of its
Subsidiaries to, agree to any material amendment to, or waive any of its
material rights under, its Certificate or Articles of Incorporation, Certificate
of Formation, Bylaws, Operating Agreement, Limited Liability Company Agreement,
Certificate of Limited Partnership, Agreement of Limited Partnership or other
organizational documents (other than amendments or waivers that individually, or
together with all other amendments and waivers made, would not be adverse to any
Loan Party, either Administrative Agent or any Lender) without, in each case,
obtaining the written consent of Administrative Agent and Requisite Lenders to
such amendment or waiver.
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7.15 CCAA PLAN OF ARRANGEMENT.
Company shall not permit the aggregate amount of Cash used to pay
allowed claims of Persons that are not Affiliates of Canadian Borrower under the
CCAA Plan of Arrangement to exceed $30,000,000.
SECTION 8. EVENTS OF DEFAULT
If any of the following conditions or events ("EVENTS OF DEFAULT")
shall occur:
8.1 FAILURE TO MAKE PAYMENTS WHEN DUE.
Failure by any Borrower to pay any installment of principal on any Loan
when due, whether at stated maturity, by acceleration, by notice of voluntary
prepayment, by mandatory prepayment or otherwise; failure by Company to pay when
due any amount payable to an Issuing Lender in reimbursement of any drawing
under a Letter of Credit; or failure by any Borrower to pay any interest on any
Loan or any fee or any other amount due under this Agreement within five days
after the date due; or
8.2 DEFAULT IN OTHER AGREEMENTS.
(i) Failure of Company or any of its Subsidiaries to pay when due any
principal of or interest on one or more items of Indebtedness (other than
Indebtedness referred to in subsection 8.1) or Contingent Obligations in an
individual principal amount of US$5,000,000 or the Equivalent Amount in any
other currency or more or with an aggregate principal amount of US$10,000,000 or
the Equivalent Amount in any other currency or more, in each case beyond the end
of any grace period provided therefor; or (ii) breach or default by Company or
any of its Subsidiaries with respect to any other material term of (a) one or
more items of Indebtedness or Contingent Obligations in the individual or
aggregate principal amounts referred to in clause (i) above or (b) any loan
agreement, mortgage, indenture or other agreement relating to such item(s) of
Indebtedness or Contingent Obligation(s), if the effect of such breach or
default is to cause, or to permit the holder or holders of that Indebtedness or
Contingent Obligation(s) (or a trustee on behalf of such holder or holders) to
cause, that Indebtedness or Contingent Obligation(s) to become or be declared
due and payable prior to its stated maturity or the stated maturity of any
underlying obligation, as the case may be (upon the giving or receiving of
notice, lapse of time, both, or otherwise); or
8.3 BREACH OF CERTAIN COVENANTS.
Failure of any Borrower to perform or comply with any term or condition
contained in subsection 2.4, 2.5, 6.2, 6.11, 6.15 or Section 7 of this
Agreement; or
8.4 BREACH OF WARRANTY.
Any representation, warranty, certification or other statement made by
Company or any of its Subsidiaries in any Priority Secured Loan Document or in
any statement or certificate at any time given by Company or any of its
Subsidiaries in writing pursuant hereto or thereto or in
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connection herewith or therewith shall be false in any material respect on the
date as of which made; or
8.5 OTHER DEFAULTS UNDER PRIORITY SECURED LOAN DOCUMENTS.
Any Loan Party shall default in the performance of or compliance with
any term contained in this Agreement or any of the other Priority Secured Loan
Documents, other than any such term referred to in any other subsection of this
Section 8, and such default shall not have been remedied or waived within 30
days after the earlier of (i) an officer of such Loan Party becoming aware of
such default or (ii) receipt by Company or such Loan Party of notice from any
Administrative Agent or any Lender of such default; or
8.6 INVOLUNTARY BANKRUPTCY; APPOINTMENT OF RECEIVER, ETC.
(i) A court having jurisdiction in the premises shall enter a decree or
order for relief in respect of Company or any of its Significant Subsidiaries in
an involuntary case or similar proceeding under the Bankruptcy Code or under any
other Insolvency Laws which decree or order is not stayed; or any other similar
relief shall be granted under any applicable Insolvency Laws; or (ii) an
involuntary case or similar proceeding shall be commenced against Company or any
of its Significant Subsidiaries under the Bankruptcy Code or under any other
Insolvency Laws; or a decree or order of a court having jurisdiction in the
premises for the appointment of a receiver, liquidator, sequestrator, trustee,
custodian or other officer having similar powers over Company or any of its
Significant Subsidiaries, or over all or a substantial part of its property,
shall have been entered; or there shall have occurred the involuntary
appointment or similar proceeding of an interim receiver, trustee or other
custodian of Company or any of its Significant Subsidiaries for all or a
substantial part of its property; or a warrant of attachment, execution or
similar process shall have been issued against any substantial part of the
property of Company or any of its Significant Subsidiaries, and any such event
described in this clause (ii) shall continue for 60 days without being
dismissed, bonded or discharged; or
8.7 VOLUNTARY BANKRUPTCY; APPOINTMENT OF RECEIVER, ETC.
(i) Company or any of its Significant Subsidiaries shall have an order
for relief entered with respect to it or commence a voluntary case or similar
proceeding under the Bankruptcy Code or under any other Insolvency Laws, or
shall consent to the entry of an order for relief in an involuntary case or
similar proceeding, or to the conversion of an involuntary case or similar
proceeding to a voluntary case or similar proceeding, under any such law, or
shall consent to the appointment of or taking possession by a receiver, trustee
or other custodian for all or a substantial part of its property; or Company or
any of its Significant Subsidiaries shall make any assignment for the benefit of
creditors; or (ii) Company or any of its Significant Subsidiaries shall be
unable, or shall fail generally, or shall admit in writing its inability, to pay
its debts as such debts become due; or the Board of Directors of Company or any
of its Significant Subsidiaries (or any committee thereof) shall adopt any
resolution or otherwise authorize any action to approve any of the actions
referred to in clause (i) above or this clause (ii); or
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8.8 JUDGMENTS AND ATTACHMENTS.
Any money judgment, writ or warrant of attachment or similar process
involving (i) in any individual case an amount in excess of US$5,000,000 or the
Equivalent Amount in any other currency or (ii) in the aggregate at any time an
amount in excess of US$10,000,000 or the Equivalent Amount in any other currency
(in either case not adequately covered by insurance as to which a solvent and
unaffiliated insurance company has acknowledged coverage) shall be entered or
filed against Company or any of its Significant Subsidiaries or any of their
respective assets and shall remain undischarged, unvacated, unbonded or unstayed
for a period of 60 days (or in any event later than five days prior to the date
of any proposed sale thereunder); or
8.9 DISSOLUTION.
Any order, judgment or decree shall be entered against Company or any
of its Significant Subsidiaries decreeing the dissolution or split up or similar
proceeding of Company or that Significant Subsidiary and such order shall remain
undischarged or unstayed for a period in excess of 30 days; or
8.10 EMPLOYEE BENEFIT PLANS.
There shall occur one or more ERISA Events which individually or in the
aggregate results in or would reasonably be expected to result in liability of
Company, any of its Subsidiaries or any of their respective ERISA Affiliates in
excess of US$15,000,000 or the Equivalent Amount in any other currency during
the term of this Agreement; or there shall exist an amount of unfunded benefit
liabilities (as defined in Section 4001(a)(18) of ERISA), individually or in the
aggregate for all Pension Plans (excluding for purposes of such computation any
Pension Plans with respect to which assets exceed benefit liabilities), which
exceeds US$20,000,000 or the Equivalent Amount in any other currency; or
8.11 CHANGE IN CONTROL.
There shall have occurred a Change of Control; or
8.12 INVALIDITY OF GUARANTIES.
Any Guaranty for any reason, other than the satisfaction in full of all
Obligations or the release of such Guaranty in accordance with its terms and the
terms of this Agreement, ceases to be in full force and effect (other than in
accordance with its terms) or is declared to be null and void, or any Loan Party
denies that it has any further liability, including, without limitation, with
respect to future advances by Lenders, under any Priority Secured Loan Document
to which it is a party, or gives notice to such effect; or
8.13 FAILURE OF SECURITY.
Any Collateral Document shall, at any time, cease to be in full force
and effect (other than by reason of a release of Collateral in accordance with
the terms thereof) or shall be declared null and void, or the validity or
enforceability thereof shall be contested by any Loan Party, or Collateral Agent
shall not have or cease to have a valid and perfected First Priority
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security interest in the Collateral securing the Obligations (other than as a
result of a failure by the relevant recording office to record or to register
any material Closing Date Mortgage or Additional Mortgage (such materiality to
be determined individually and in the aggregate):
THEN (i) upon the occurrence of any Event of Default described in
subsection 8.6 or 8.7, each of (a) the unpaid principal amount of and accrued
interest on the Loans, (b) an amount equal to the maximum amount that may at any
time be drawn under all Letters of Credit then outstanding (whether or not any
beneficiary under any such Letter of Credit shall have presented, or shall be
entitled at such time to present, the drafts or other documents or certificates
required to draw under such Letter of Credit) and (c) all other Obligations
shall automatically become immediately due and payable, without presentment,
demand, protest or other requirements of any kind, all of which are hereby
expressly waived by Company, and the obligation of each Lender to make any Loan,
the obligation of US Administrative Agent to issue any Letter of Credit and the
right of any Lender having a US Tranche Revolving Loan Commitment to issue any
Letter of Credit hereunder shall thereupon terminate, and (ii) upon the
occurrence and during the continuation of any other Event of Default, US
Administrative Agent shall, upon the written request or with the written consent
of Requisite Lenders, by written notice to Company and Canadian Borrower,
declare all or any portion of the amounts described in clauses (a) through (c)
above to be, and the same shall forthwith become, immediately due and payable,
and the obligation of each Lender to make any Loan, the obligation of US
Administrative Agent to issue any Letter of Credit and the right of any Lender
having a US Tranche Revolving Loan Commitment to issue any Letter of Credit
hereunder shall thereupon terminate; provided that the foregoing shall not
affect in any way the obligations of Lenders having a US Tranche Revolving Loan
Commitment under Subsection 3.3C(i).
Any amounts described in clause (b) of the preceding paragraph, when
received by US Administrative Agent, shall be held by US Administrative Agent
pursuant to the terms of the Collateral Account Agreement and shall be applied
as therein provided.
Notwithstanding anything contained in the second preceding paragraph,
if at any time within 60 days after an acceleration of the Loans pursuant to
such paragraph Borrowers shall pay all arrears of interest and all payments on
account of principal which shall have become due otherwise than as a result of
such acceleration (with interest on principal and, to the extent permitted by
law, on overdue interest, at the rates specified in this Agreement) and all
Events of Default and Potential Events of Default (other than non-payment of the
principal of and accrued interest on the Loans, in each case which is due and
payable solely by virtue of acceleration) shall be remedied or waived pursuant
to subsection 10.6, then Requisite Lenders, by written notice to Company and
Canadian Borrower, may at their option rescind and annul such acceleration and
its consequences; but such action shall not affect any subsequent Event of
Default or Potential Event of Default or impair any right consequent thereon.
The provisions of this paragraph are intended merely to bind Lenders to a
decision which may be made at the election of Requisite Lenders and are not
intended to benefit Company or Canadian Borrower and do not grant Company or
Canadian Borrower the right to require Lenders to rescind or annul any
acceleration hereunder, even if the conditions set forth herein are met.
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SECTION 9. ADMINISTRATIVE AGENTS
9.1 APPOINTMENT.
BTCo is hereby appointed US Administrative Agent hereunder and
Collateral Agent, and Deutsche Bank AG, Canada Branch is hereby appointed CN
Administrative Agent hereunder by each Lender and each Lender hereby authorizes
each Administrative Agent to act hereunder and under the other Priority Secured
Loan Documents (including, without limitation, the Guaranties, the Collateral
Documents and the Intercreditor Agreement) and authorizes Collateral Agent to
act under the Priority Secured Loan Documents including, without limitation, the
Guaranties, the Collateral Documents and the Intercreditor Agreement. Each
Administrative Agent agrees to act upon the express conditions contained in this
Agreement and the other Priority Secured Loan Documents, as applicable. The
provisions of this Section 9 are solely for the benefit of Administrative Agents
and Lenders, and neither Company nor Canadian Borrower shall have any rights as
a third party beneficiary of any of the provisions hereof. In performing its
functions and duties as Administrative Agent under this Agreement, each
Administrative Agent shall act solely as an agent of Lenders and does not assume
and shall not be deemed to have assumed any obligation towards or relationship
of agency or trust with or for Company or any of its Subsidiaries. For the
purposes of holding any security granted by any of Company or its Subsidiaries
pursuant to the laws of the Province of Quebec, Collateral Agent is hereby
appointed by each Lender, as the holder of an irrevocable power of attorney or
fonde de pouvoir (within the meaning of Article 2692 of the Civil Code of
Quebec) for all present and future Lenders and Collateral Agent hereby accepts
such appointment. By executing an Assignment Agreement, any future Lender shall
be deemed to ratify the power of attorney or fonde de pouvoir (within the
meaning of Article 2692 of the Civil Code of Quebec) granted to Collateral Agent
hereunder. Each of Deutsche Banc Alex. ▇▇▇▇▇ Inc., in its capacity as sole and
exclusive arranger, and General Electric Capital Corporation, in its capacity as
syndication agent, shall have no obligations hereunder.
9.2 POWERS AND DUTIES; GENERAL IMMUNITY.
▇. ▇▇▇▇▇▇; DUTIES SPECIFIED. Each Lender irrevocably
authorizes each Administrative Agent to take such action on such Lender's behalf
and to exercise such powers, rights and remedies hereunder and under the other
Priority Secured Loan Documents as are specifically delegated or granted to such
Administrative Agent by the terms hereof and thereof, together with such powers,
rights and remedies as are reasonably incidental thereto. Each Administrative
Agent shall have only those duties and responsibilities that are expressly
specified in this Agreement and the other Priority Secured Loan Documents to
which it is a party. Each Administrative Agent may exercise such powers, rights
and remedies and perform such duties by or through its agents or employees,
including, without limitation, appointing an agent to act as collateral agent in
any jurisdiction where such appointment is necessary or desirable to comply with
local law. No Administrative Agent shall have, by reason of this Agreement or
any of the other Priority Secured Loan Documents to which it is a party, a
fiduciary relationship in respect of any Lender; and nothing in this Agreement
or any of the other Priority Secured Loan Documents, expressed or implied, is
intended to or shall be so construed as to impose upon any Administrative Agent
any obligations in respect of this Agreement or any of the other Priority
Secured Loan Documents except as expressly set forth herein or therein.
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B. NO RESPONSIBILITY FOR CERTAIN MATTERS. No Administrative
Agent shall be responsible to any Lender for the execution, effectiveness,
genuineness, validity, enforceability, collectibility or sufficiency of this
Agreement or any other Priority Secured Loan Document or for any
representations, warranties, recitals or statements made herein or therein or
made in any written or oral statements or in any financial or other statements,
instruments, reports or certificates or any other documents furnished or made by
either Administrative Agent to Lenders or by or on behalf of any Borrower to
either Administrative Agent or any Lender in connection with the Priority
Secured Loan Documents and the transactions contemplated thereby or for the
financial condition or business affairs of any Borrower or any other Person
liable for the payment of any Obligations, nor shall either Administrative Agent
be required to ascertain or inquire as to the performance or observance of any
of the terms, conditions, provisions, covenants or agreements contained in any
of the Priority Secured Loan Documents or as to the use of the proceeds of the
Loans or the use of the Letters of Credit or as to the existence or possible
existence of any Event of Default or Potential Event of Default. Anything
contained in this Agreement to the contrary notwithstanding, no Administrative
Agent shall have any liability arising from confirmations of the amount of
outstanding Loans or the Letter of Credit Usage or the component amounts
thereof.
C. EXCULPATORY PROVISIONS. Neither Administrative Agent nor
any of their officers, directors, employees or agents shall be liable to Lenders
for any action taken or omitted by such Administrative Agent or any other agent
under or in connection with any of the Priority Secured Loan Documents except to
the extent caused by Administrative Agent's gross negligence or willful
misconduct. If an Administrative Agent shall request instructions from Lenders
with respect to any act or action (including the failure to take an action) in
connection with this Agreement or any of the other Priority Secured Loan
Documents, such Administrative Agent shall be entitled to refrain from such act
or taking such action unless and until such Administrative Agent shall have
received instructions from Requisite Lenders. Without prejudice to the
generality of the foregoing, (i) each Administrative Agent shall be entitled to
rely, and shall be fully protected in relying, upon any communication,
instrument or document believed by it to be genuine and correct and to have been
signed or sent by the proper person or persons, and shall be entitled to rely
and shall be protected in relying on opinions and judgments of attorneys (who
may be attorneys for Company and its Subsidiaries), accountants, experts and
other professional advisors selected by it; and (ii) no Lender shall have any
right of action whatsoever against either Administrative Agent as a result of
such Administrative Agent acting or (where so instructed) refraining from acting
under this Agreement or any of the other Priority Secured Loan Documents in
accordance with the instructions of Requisite Lenders. Each Administrative Agent
shall be entitled to refrain from exercising any power, discretion or authority
vested in it under this Agreement or any of the other Priority Secured Loan
Documents unless and until it has obtained the instructions of Requisite
Lenders.
D. ADMINISTRATIVE AGENTS ENTITLED TO ACT AS LENDERS. The
agencies hereby created shall in no way impair or affect any of the rights and
powers of, or impose any duties or obligations upon, either Administrative Agent
in its individual capacity as a Lender hereunder. With respect to its
participation in the Loans and the Letters of Credit, each Administrative Agent
shall have the same rights and powers hereunder as any other Lender and may
exercise the same as though it were not performing the duties and functions
delegated to it hereunder, and the term "LENDER" or "LENDERS" or any similar
term shall, unless the context clearly otherwise
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indicates, include an Administrative Agent in its individual capacity. Any
Administrative Agent and its Affiliates may accept deposits from, lend money to
and generally engage in any kind of banking, trust, financial advisory or other
business with any Borrower or any of their respective Affiliates as if it were
not performing the duties specified herein, and may accept fees and other
consideration from Company or any of its Subsidiaries for services in connection
with this Agreement and otherwise without having to account for the same to
Lenders.
9.3 REPRESENTATIONS AND WARRANTIES; NO RESPONSIBILITY FOR APPRAISAL OF
CREDITWORTHINESS.
Each Lender represents and warrants that it has made its own
independent investigation of the financial condition and affairs of Company and
its Subsidiaries in connection with the making of the Loans and the issuance of
Letters of Credit hereunder and that it has made and shall continue to make its
own appraisal of the creditworthiness of Company and its Subsidiaries. No
Administrative Agent shall have any duty or responsibility, either initially or
on a continuing basis, to make any such investigation or any such appraisal on
behalf of Lenders or to provide any Lender with any credit or other information
with respect thereto, whether coming into its possession before the making of
the Loans or at any time or times thereafter, and no Administrative Agent shall
have any responsibility with respect to the accuracy of or the completeness of
any information provided to Lenders.
9.4 RIGHT TO INDEMNITY.
Each Lender, in proportion to its Pro Rata Share, severally agrees to
indemnify each Administrative Agent, to the extent that such Administrative
Agent shall not have been reimbursed by Borrowers, for and against any and all
liabilities, obligations, losses, damages, penalties, actions, judgments, suits,
costs, expenses (including, without limitation, counsel fees and disbursements)
or disbursements of any kind or nature whatsoever which may be imposed on,
incurred by or asserted against such Administrative Agent in exercising its
powers, rights and remedies or performing its duties hereunder or under the
other Priority Secured Loan Documents or otherwise in its capacity as an
Administrative Agent in any way relating to or arising out of this Agreement or
the other Priority Secured Loan Documents; provided that no Lender shall be
liable for any portion of such liabilities, obligations, losses, damages,
penalties, actions, judgments, suits, costs, expenses or disbursements resulting
from such Administrative Agent's gross negligence or willful misconduct. If any
indemnity furnished to an Administrative Agent for any purpose shall, in the
opinion of such Administrative Agent, be insufficient or become impaired, such
Administrative Agent may call for additional indemnity and cease, or not
commence, to do the acts indemnified against until such additional indemnity is
furnished.
9.5 SUCCESSOR ADMINISTRATIVE AGENT.
Any Administrative Agent may resign at any time by giving 30 days'
prior written notice thereof to Lenders and Borrowers, and any Administrative
Agent may be removed at any time with cause by an instrument or concurrent
instruments in writing delivered to Borrowers and such Administrative Agent and
signed by Requisite Lenders. Upon any such notice of resignation or any such
removal, Requisite Lenders shall have the right, upon five Business Days' notice
to Borrowers, to appoint a successor Administrative Agent to the retiring or
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removed Administrative Agent. Upon the acceptance of any appointment as
Administrative Agent hereunder by a successor Administrative Agent to the
retiring or removed Administrative Agent, that successor Administrative Agent
shall thereupon succeed to and become vested with all the rights, powers,
privileges and duties of the retiring or removed Administrative Agent and the
retiring or removed Administrative Agent shall be discharged from its duties and
obligations under this Agreement. After any retiring or removed Administrative
Agent's resignation or removal hereunder as an Administrative Agent, the
provisions of this Section 9 shall inure to its benefit as to any actions taken
or omitted to be taken by it while it was an Administrative Agent under this
Agreement.
9.6 INTERCREDITOR AGREEMENT; COLLATERAL DOCUMENTS AND SUBSIDIARY
GUARANTIES.
Each Lender hereby authorizes Administrative Agents and Collateral
Agent to enter into the Intercreditor Agreement on behalf of and for the benefit
of that Lender, and agrees to be bound by the terms of the Intercreditor
Agreement. Administrative Agents shall be entitled to all limitations on the
liability and indemnification provisions set forth in the Intercreditor
Agreement, and each Lender hereby acknowledges that it has provided such
benefits to the Collateral Agent to the extent that such Lender is a "Secured
Party" under the Intercreditor Agreement. Each Lender hereby further authorizes
Collateral Agent to enter into each Collateral Document as secured party on
behalf of and for the benefit of Lenders and agrees to be bound by the terms of
each Collateral Document; provided that, subject to any provision of subsection
10.6 requiring the consent of any additional Lenders, Collateral Agent shall not
enter into or consent to any amendment, modification, termination or waiver of
any provision contained in any Collateral Document, the Intercreditor Agreement
or any Guaranty without the prior consent of US Administrative Agent (acting on
behalf of Requisite Lenders), but Collateral Agent may (i) release any Lien
covering any items of Collateral that are the subject of a sale or other
disposition of assets permitted by this Agreement or to which Requisite Lenders
have consented and (ii) release any Subsidiary Guarantor from the Subsidiary
Guaranty if all of the capital stock of such Subsidiary Guarantor is sold to a
Person that is not an Affiliate of Company pursuant to a sale or other
disposition permitted hereunder or to which Requisite Lenders have consented.
Anything contained in any of the Priority Secured Loan Documents to the contrary
notwithstanding, each Lender agrees that no Lender shall have any right
individually to realize upon any of the Collateral under any Collateral Document
or to enforce any Guaranty, it being understood and agreed that all rights and
remedies under the Collateral Documents and the Guaranties may be exercised
solely by Collateral Agent for the benefit of Lenders in accordance with the
terms of the Collateral Documents and the Intercreditor Agreement.
SECTION 10. MISCELLANEOUS
10.1 ASSIGNMENTS AND PARTICIPATIONS IN LOANS AND LETTERS OF CREDIT.
A. GENERAL. Subject to subsection 10.1B, each Lender shall
have the right at any time to (i) sell, assign or transfer to any Eligible
Assignee, or (ii) sell participations to any Person in, all or any part of its
Commitments or any Loan or Loans made by it or its Letters of Credit or
participations therein or any other interest herein or in any other Obligations
owed to it; provided that no such sale, assignment, transfer or participation
shall, without the consent of Company, require Company to file a registration
statement with the Securities and Exchange Commission
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or apply to qualify such sale, assignment, transfer or participation under the
securities laws of any state; provided, further, that no such sale, assignment
or transfer described in clause (i) above shall be effective unless and until an
appropriate Assignment Agreement effecting such sale, assignment or transfer
shall have been accepted by an Administrative Agent and recorded in the
applicable Register as provided in subsection 10.1B(ii); provided, still
further, that no such sale, assignment, transfer or participation of any Letter
of Credit or any participation therein may be made separately from a sale,
assignment, transfer or participation of a corresponding interest in the
Commitment and the Loans of the Lender effecting such sale, assignment, transfer
or participation; and provided, further, that no US Lender shall sell any
participation to a Person that is unable to comply with the requirements of
subsection 2.7B(iii)(a). Except as otherwise provided in this subsection 10.1,
no Lender shall, as between any Borrower and such Lender, be relieved of any of
its obligations hereunder as a result of any sale, assignment or transfer of, or
any granting of participations in, all or any part of its Commitments, the
Loans, the Letters of Credit or participations therein or the other Obligations
owed to such Lender.
B. ASSIGNMENTS.
(i) Amounts and Terms of Assignments. Each
Commitment, Loan, Letter of Credit or participation therein or other Obligation
may (a) be assigned in any amount to an Eligible Assignee that is another
Lender, an Affiliate or Affiliated Fund of the assigning Lender or another
Lender, with the giving of notice to Company and US Administrative Agent or (b)
be assigned in an aggregate amount of not less than US$1,000,000 (or such lesser
amount as shall constitute the aggregate amount of the Commitments, Loans,
Letters of Credit and participations therein and other Obligations of the
assigning Lender) to any other Eligible Assignee with the consent of US
Administrative Agent (which consent shall not be unreasonably withheld) and, so
long as no Event of Default shall have occurred and be continuing, Company
(which consent shall not be unreasonably withheld) and, in the case of an
assignment of the Revolving Loan Commitment, the Issuing Lender (which consent
shall not be unreasonably withheld); provided that it is hereby acknowledged and
agreed that Company's right to consent to a proposed assignment shall be limited
to whether or not the proposed assignee is an Eligible Assignee; provided,
further, that no Lender may assign all or any part of its US Tranche Term Loans
without assigning at the same time a proportionate part of its CN Tranche Term
Loans to the same assignee nor may any Lender assign all or any part of its CN
Tranche Term Loans without assigning at the same time a proportionate part of
its US Tranche Term Loan to the same assignee. To the extent of any such
assignment in accordance with either clause (a) or (b) above, the assigning
Lender shall be relieved of its obligations with respect to its Commitments,
Loans, Letter of Credit or participation therein or other Obligations or the
portion thereof so assigned. The parties to each such assignment shall execute
and deliver to US Administrative Agent, for its acceptance and recording in the
applicable Register, an Assignment Agreement, together with a processing and
recordation fee of US$3,500 and such forms, certificates or other evidence, if
any, with respect to Tax withholding matters as the assignee under such
Assignment Agreement may be required to deliver to US Administrative Agent and
Company pursuant to subsection 2.7B(iii)(a). Upon such execution, delivery,
acceptance and recordation, from and after the effective date specified in such
Assignment Agreement, (y) the assignee thereunder shall be a party hereto and,
to the extent that rights and obligations hereunder have been assigned to it
pursuant to such Assignment Agreement, shall have the rights and obligations of
a Lender hereunder and (z) the assigning Lender thereunder shall, to the extent
that rights and obligations
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hereunder have been assigned by it pursuant to such Assignment Agreement,
relinquish its rights and be released from its obligations under this Agreement,
subject to subsection 10.9B (and, in the case of an Assignment Agreement
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;
provided that, notwithstanding anything contained in any of the Priority Secured
Loan Documents to the contrary, if such Lender is the Issuing Lender with
respect to any outstanding Letters of Credit, such Lender shall continue to have
all rights and obligations of an Issuing Lender with respect to such Letters of
Credit until the cancellation or expiration of such Letters of Credit and the
reimbursement of any amounts drawn thereunder). The Commitments hereunder shall
be modified to reflect the Commitment of such assignee and any remaining
Commitment of such assigning Lender and, if any such assignment occurs after the
issuance of the Notes hereunder, the assigning Lender shall, upon the
effectiveness of such assignment or as promptly thereafter as practicable,
surrender its applicable Notes to US Administrative Agent for cancellation, and
thereupon new Notes shall be issued to the assignee and/or to the assigning
Lender, substantially in the form of Exhibit IV, Exhibit V, Exhibit VI or
Exhibit VII annexed hereto with appropriate insertions, to reflect the new
Commitments, of the assignee and/or, as the case may be, with appropriate
insertions, to reflect the Loans, of the assignee and/or the assigning Lender.
(ii) Acceptance by US Administrative Agent;
Recordation in Register. Upon its receipt of an Assignment Agreement executed by
an assigning Lender and an assignee representing that it is an Eligible
Assignee, together with the processing and recordation fee referred to in
subsection 10.1B(i) and any forms, certificates or other evidence with respect
to Tax withholding matters that such assignee may be required to deliver to US
Administrative Agent pursuant to subsection 2.7B(iii)(a), US Administrative
Agent shall, if US Administrative Agent and Company have consented to the
assignment evidenced thereby (in each case to the extent such consent is
required pursuant to subsection 10.1B(i)), (a) accept such Assignment Agreement
by executing a counterpart thereof as provided therein (which acceptance shall
evidence any required consent of US Administrative Agent to such assignment),
(b) record or cause the recordation of the information contained therein in the
applicable Register, and (c) give prompt notice thereof to Company. Each
Administrative Agent shall maintain a copy of each Assignment Agreement
delivered to and accepted by it as provided in this subsection 10.1B(ii).
(iii) If any Lender shall be or become a Competitor,
then Company shall have the right but not the obligation, upon notice to such
Lender and the Administrative Agent, to replace such Lender with an Eligible
Assignee (a "REPLACEMENT LENDER") acceptable to Company and US Administrative
Agent (such consent not to be unreasonably withheld or delayed; provided that no
such consent shall be required if the Replacement Lender is an existing Lender).
Subject to the preceding sentence, each such Lender which is a Competitor hereby
agrees to transfer and assign all of its Commitments, Loans, Letters of Credit
or participations therein or other Obligations owed to it to such Replacement
Lender in accordance with subsection 10.1B(i) and (ii); provided, however, that
(a) such assignment shall be without recourse, representation or warranty (other
than to the effect that such Lender owns the Commitments, Loans, and Letters of
Credit or participations therein or other Obligations being assigned, free and
clear of any Liens) and (b) the purchase price paid by the Replacement Lender
shall be in the aggregate amount of such Lender's Loans and its Pro Rata Share
of outstanding Letters of Credit, together with all accrued and unpaid interest
and fees in respect thereof, plus
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all other amounts, owing to such Lender hereunder. Upon any such termination or
assignment, such Lender shall cease to be a party hereto but shall continue to
be entitled to the benefits of any provisions of this Agreement which by their
terms survive the termination of this Agreement.
(iv) Upon the effective date of an assignment
described in clause (iii), the applicable Borrower shall issue a replacement
Note or Notes, as the case may be, to such Replacement Lender, and such
Replacement Lender shall become a "Lender" for all purposes under this Agreement
and the other Priority Secured Loan Documents.
C. PARTICIPATIONS. The holder of any participation, other than
an Affiliate of the Lender granting such participation, shall not be entitled to
require such Lender to take or omit to take any action hereunder except action
directly affecting (i) the extension of the scheduled final maturity date of any
Loan allocated to such participation or (ii) a reduction of the principal amount
of or the rate of interest payable on any Loan allocated to such participation,
and all amounts payable by any Borrower hereunder (including, without
limitation, amounts payable to such Lender pursuant to subsections 2.6D, 2.7 and
3.6) shall be determined as if such Lender had not sold such participation. Each
Borrower and each Lender hereby acknowledges and agrees that, solely for
purposes of subsections 10.4 and 10.5, (a) any participation will give rise to a
direct obligation of Borrowers to the participant and (b) the participant shall
be considered to be a "Lender."
D. ASSIGNMENTS TO FEDERAL RESERVE BANKS. In addition to the
assignments and participations permitted under the foregoing provisions of this
subsection 10.1, any Lender may assign and pledge all or any portion of its
Loans, the other Obligations owed to such Lender, and its Notes to (i) any
Federal Reserve Bank as collateral security pursuant to Regulation A of the
Board of Governors of the Federal Reserve System and any operating circular
issued by such Federal Reserve Bank; and (ii) if such Lender is a fund, (A) to
the trustee of such Lender as collateral security for the benefit of such
Lender's investors or (B) to a collateral agent providing credit or credit
support to such Lender; provided that (x) no Lender shall, as between any
Borrower and such Lender, be relieved of any of its obligations hereunder as a
result of any such assignment and pledge and (y) in no event shall such Federal
Reserve Bank or trustee be considered to be a "Lender" or be entitled to require
the assigning Lender to take or omit to take any action hereunder.
E. INFORMATION. Each Lender may furnish any information
concerning Company and its Subsidiaries in the possession of that Lender from
time to time to assignees and participants (including prospective assignees and
participants), subject to subsection 10.20.
10.2 EXPENSES.
Whether or not the transactions contemplated hereby shall be
consummated, each Borrower agrees to pay promptly (i) all the actual and
reasonable costs and expenses of preparation of the Priority Secured Loan
Documents and any consents, amendments, waivers or other modifications thereto;
(ii) all the reasonable costs of furnishing all opinions by counsel for any
Borrower (including, without limitation, any opinions requested by Lenders as to
any legal matters arising hereunder) and of such Borrower's performance of and
compliance with all agreements and conditions on its part to be performed or
complied with under this Agreement
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and the other Priority Secured Loan Documents including, without limitation,
with respect to confirming compliance with environmental and insurance
requirements; (iii) the reasonable fees, expenses and disbursements of counsel
to Administrative Agents and Collateral Agent (including allocated costs of
internal counsel) in connection with the negotiation, preparation, execution and
administration of the Priority Secured Loan Documents and any consents,
amendments, waivers or other modifications thereto and any other documents or
matters requested by any Borrower; (iv) all the actual costs and reasonable
expenses of creating and perfecting Liens in favor of Collateral Agent on behalf
of Lenders pursuant to the Priority Secured Loan Documents, including, without
limitation, costs of conducting record searches, examining Collateral, opening
bank accounts and lockboxes, depositing checks, receiving and transferring funds
(including charges for checks for which there are insufficient funds), and fees
and Taxes in connection with the filing of financing statements, costs of
preparing and recording Priority Secured Loan Documents, fees and expenses of
counsel for providing such opinions as Administrative Agents, Collateral Agent
or Requisite Lenders may reasonably request, and fees and expenses of legal
counsel to Administrative Agents; (v) all other actual and reasonable costs and
expenses incurred by Administrative Agents and Collateral Agent in connection
with the syndication of the Commitments and the negotiation, preparation and
execution of the Priority Secured Loan Documents and any consents, amendments,
waivers or other modifications thereto and the transactions contemplated
thereby; and (vi) after the occurrence of an Event of Default, all costs and
expenses, including reasonable attorneys' fees (including allocated costs of
internal counsel) and costs of settlement, incurred by any of Administrative
Agents, Collateral Agent and Lenders in enforcing any Obligations of or in
collecting any payments due from any Loan Party hereunder or under the other
Priority Secured Loan Documents by reason of such Event of Default or in
connection with any refinancing or restructuring of the credit arrangements
provided under this Agreement in the nature of a "work-out" or pursuant to any
insolvency or bankruptcy proceedings.
10.3 INDEMNITY.
In addition to the payment of expenses pursuant to subsection 10.2,
whether or not the transactions contemplated hereby shall be consummated,
Borrowers, jointly and severally, agree to defend, indemnify, pay and hold
harmless each Administrative Agent, Collateral Agent, Syndication Agent,
Arranger and each Lender, and the officers, directors, employees, agents and
affiliates of each Administrative Agent, Collateral Agent, Syndication Agent,
Arranger and each Lender (collectively called the "INDEMNITEES") from and
against any and all other liabilities, obligations, losses, damages, penalties,
actions, judgments, suits, claims, costs, expenses and disbursements of any kind
or nature whatsoever (including, without limitation, the reasonable fees and
disbursements of counsel for such Indemnitees in connection with any
investigative, administrative or judicial proceeding commenced or threatened by
any Person, whether or not any such Indemnitee shall be designated as a party or
a potential party thereto), whether direct, indirect or consequential and
whether based on any federal, state or foreign laws, statutes, rules or
regulations (including, without limitation, securities and commercial laws,
statutes, rules or regulations and Environmental Laws), on common law or
equitable cause or on contract or otherwise, that may be imposed on, incurred
by, or asserted against any such Indemnitee, in any manner relating to or
arising out of this Agreement or the other Priority Secured Loan Documents or
the transactions contemplated hereby or thereby (including, without limitation,
Lenders' agreement to make the Loans hereunder or the use or intended use of the
proceeds of
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any of the Loans or the issuance of Letters of Credit hereunder or the use or
intended use of any of the Letters of Credit) or the statements contained in the
commitment letter delivered by any Lender to any Borrower with respect thereto
(collectively called the "INDEMNIFIED LIABILITIES"); provided, however, that no
Borrower shall have any obligation to any Indemnitee hereunder with respect to
any Indemnified Liabilities to the extent such Indemnified Liabilities arise
from the gross negligence or willful misconduct of that Indemnitee as determined
by a final judgment of a court of competent jurisdiction. To the extent that the
undertaking to defend, indemnify, pay and hold harmless set forth in the
preceding sentence may be unenforceable because it is violative of any law or
public policy, each Borrower shall contribute the maximum portion that it is
permitted to pay and satisfy under applicable law to the payment and
satisfaction of all Indemnified Liabilities incurred by the Indemnitees or any
of them.
Without limiting the generality of the foregoing, Borrowers jointly and
severally further agree to fully and promptly pay, perform, discharge, defend
(subject to Indemnitee's selection of counsel), indemnify and hold harmless each
Indemnitee from and against any Indemnified Environmental Liabilities; provided
that no Borrower shall have any obligation to any Indemnitee hereunder with
respect to any Indemnified Environmental Liabilities to the extent such
Indemnified Environmental Liabilities arise from the gross negligence or willful
misconduct of that Indemnitee as determined by a final judgment of a court of
competent jurisdiction. To the extent that the undertaking to defend, indemnify,
pay and hold harmless set forth in the preceding sentence may be unenforceable
because it is violative of any law or public policy, each Borrower shall
contribute the maximum portion that it is permitted to pay and satisfy under
applicable law to the payment and satisfaction of all Indemnified Environmental
Liabilities incurred by the Indemnitees or any of them. As used herein,
"INDEMNIFIED ENVIRONMENTAL LIABILITIES" means any liabilities, obligations,
losses, damages (including, without limitation, natural resource damages),
penalties, actions, judgments, suits, claims (including Environmental Claims),
costs (including, without limitation, the costs of any investigation, study,
sampling, testing, abatement, cleanup, removal, remediation, or other response
action necessary to remove, remediate, clean up, or ▇▇▇▇▇ any Hazardous
Materials or any activity relating to Hazardous Materials that is in violation
of any Environmental Laws or that presents a material risk of giving rise to an
Environmental Claim), expenses and disbursements of any kind or nature
whatsoever, whether direct, indirect or consequential and whether based on any
federal, state or foreign laws, statutes, rules or regulations (including,
without limitation, securities and commercial laws, statutes, rules or
regulations and Environmental Laws), on common law or equitable cause or on
contract or otherwise, that may be imposed on, incurred by, or asserted against
any such Indemnitee, in any manner relating to or arising out of: (i) any
Release, threatened Release or disposal of any Hazardous Materials at any of the
Facilities; (ii) the Release, threatened Release, or disposal at any location of
any Hazardous Materials generated at or originating from any of the Facilities
by or at the direction of Company or any of its Subsidiaries; (iii) any
Environmental Claim in connection with any of the Facilities; or (iv) the
operation of or violation of any Environmental Law at any of the Facilities.
10.4 SET-OFF; SECURITY INTEREST IN DEPOSIT ACCOUNTS.
In addition to any rights now or hereafter granted under applicable law
and not by way of limitation of any such rights, upon the occurrence and during
the continuance of any Event of
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Default and after consultation with US Administrative Agent each US Lender is
hereby authorized by each Borrower at any time or from time to time, without
prior notice to such Borrower or to any other Person, any such prior notice
being hereby expressly waived, to set off and to appropriate and to apply any
and all deposits (general or special, including, but not limited to,
Indebtedness evidenced by certificates of deposit, whether matured or unmatured,
but not including trust accounts) and any other Indebtedness at any time held or
owing by that US Lender to or for the credit or the account of any Borrower
against and on account of the obligations and liabilities of any Borrower to
that Lender under this Agreement, the Letters of Credit and participations
therein and the other Priority Secured Loan Documents, including, but not
limited to, all claims of any nature or description arising out of or connected
with this Agreement, the Letters of Credit and participations therein or any
other Priority Secured Loan Document, irrespective of whether or not (i) that
Lender shall have made any demand hereunder or (ii) the principal of or the
interest on the Loans or any amounts in respect of the Letters of Credit or any
other amounts due hereunder shall have become due and payable pursuant to
Section 8 and although said obligations and liabilities, or any of them, may be
contingent or unmatured. Company and Canadian Borrower hereby further grants to
US Administrative Agent and Canadian Administrative Agent, respectively, and
each Lender a security interest in all deposits and accounts maintained with
such Administrative Agent or such Lender as security for the Obligations.
10.5 RATABLE SHARING.
Lenders hereby agree among themselves that if any of them shall,
whether by voluntary payment, by realization upon security, through the exercise
of any right of set-off or banker's lien, by counterclaim or cross action or by
the enforcement of any right under the Priority Secured Loan Documents or
otherwise, or as adequate protection of a deposit treated as cash collateral
under the Bankruptcy Code or under any other Insolvency Laws, receive payment or
reduction of a proportion of the aggregate amount of principal, interest,
amounts payable in respect of Letters of Credit, fees and other amounts then due
and owing to that Lender from Borrowers hereunder or under the other Priority
Secured Loan Documents (collectively, the "AGGREGATE AMOUNTS DUE FROM BORROWERS"
to such Lender) which is greater than the proportion received by any other
Lender in respect of the Aggregate Amounts Due From Borrowers to such other
Lender, then the Lender receiving such proportionately greater payment shall (i)
notify the applicable Administrative Agent and each other Lender of the receipt
of such payment and (ii) apply a portion of such payment to purchase
participations (which it shall be deemed to have purchased from each seller of a
participation simultaneously upon the receipt by such seller of its portion of
such payment) in the Aggregate Amounts Due From Borrowers to the other Lenders
so that all such recoveries of Aggregate Amounts Due From Borrowers shall be
shared by all Lenders in proportion to the Aggregate Amounts Due From Borrowers
to them; provided that if all or part of such proportionately greater payment
received by such purchasing Lender is thereafter recovered from such Lender upon
the bankruptcy or reorganization of any Borrower or otherwise, those purchases
shall be rescinded and the purchase prices paid for such participations shall be
returned to such purchasing Lender ratably to the extent of such recovery, but
without interest. Each Borrower expressly consents to the foregoing arrangement
and agrees that any holder of a participation so purchased may exercise any and
all rights of banker's lien, set-off or counterclaim with respect to any and all
monies owing by any Borrower to that holder
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with respect thereto as fully as if that holder were owed the amount of the
participation held by that holder.
10.6 AMENDMENTS AND WAIVERS.
A. AMENDMENTS AND WAIVERS. No amendment, modification,
termination or waiver of any provision of this Agreement or of the Notes, and no
consent to any departure by Company or any of its Subsidiaries therefrom, shall
in any event be effective without the written concurrence of Company, Canadian
Borrower and Requisite Lenders; provided that any such amendment, modification,
termination, waiver or consent which: increases the amount of any of the
Commitments or reduces the principal amount of any of the Loans; changes in any
manner the definitions of "Pro Rata Share" or "Requisite Lenders" or Requisite
Class Lender (it being understood that, with the consent of Requisite Lenders,
additional extensions of credit pursuant to this Agreement may be included in
the determination of Pro Rata Share, Requisite Lenders and Requisite Class
Lenders on substantially the same basis as the extensions of credit set forth in
this Agreement on the date hereof); changes in any manner any provision of this
Agreement which, by its terms, expressly requires the approval or concurrence of
all Lenders; waives, reduces or postpones any scheduled installment of principal
of any of the Loans, or extends the stated expiration date of any Letter of
Credit beyond the Commitment Termination Date; postpones the date on which any
interest or any fees are payable to Lenders or decreases the interest rate borne
by any of the Loans (other than any waiver of any increase in the interest rate
applicable to any of the Loans pursuant to subsection 2.2E) or the amount of any
fees payable to Lenders hereunder; increases the maximum duration of Interest
Periods permitted hereunder; reduces the amounts or postpones the due date of
any amount payable in respect of, or extends the required expiration date beyond
the Commitment Termination Date of, any Letter of Credit; changes in any manner
the obligations of Lenders relating to the purchase of participations in Letters
of Credit; releases any Lien granted in favor of Collateral Agent with respect
to all or substantially all of the Collateral (except as expressly provided in
the Priority Secured Loan Documents); or releases any Loan Party from its
obligations (or releases Canadian Borrower from or expressly and directly limits
the obligations of Canadian Borrower under the Subsidiary Guaranty or releases
Company from or expressly and directly limits the obligations of Company under
the Company Guaranty, in each case other than in accordance with the terms of
the Priority Secured Loan Documents); or changes in any manner the provisions
contained in subsection 8.1 or this subsection 10.6 shall be effective only if
evidenced by a writing signed by or on behalf of all Lenders affected thereby;
provided, however, that no such amendment, modification, termination, waiver or
consent shall increase the Commitments of a Lender over the amount hereof then
in effect without the consent of such Lender. In addition, (i) any amendment,
modification, termination or waiver of any of the provisions contained in
Section 4 shall be effective only if evidenced by a writing signed by or on
behalf of each Administrative Agent, Requisite Lenders and Borrowers, (ii) no
amendment, modification, termination or waiver of any provision of any Note
shall be effective without the concurrence of the Lender which is the holder of
that Note; (iii) no amendment, modification, termination or waiver of any
provision of Section 9 or of any other provision of this Agreement which, by its
terms, expressly requires the approval or concurrence of each Administrative
Agent shall be effective without the written concurrence of each Administrative
Agent; and (iv) no amendment, modification, termination or waiver of any
provision of subsection 2.4 which has the effect of (x) extending or reducing
any interim scheduled payments applicable to either Class or (y) changing any
interim
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scheduled payments or voluntary and mandatory prepayments, applicable to either
Class (the "AFFECTED CLASS") in a manner that disproportionately disadvantages
such Class relative to the other Class, shall be effective without the written
concurrence of Requisite Class Lenders of such Class or such Affected Class (it
being understood and agreed that any amendment, modification, termination or
waiver of voluntary or mandatory prepayment, from those set forth in subsection
2.4 with respect to one Class but not the other Class shall be deemed to
disadvantage such one Class but not to disproportionately disadvantage such
other Class for purposes of this clause (iv)). Each Administrative Agent may,
but shall have no obligation to, with the concurrence of any Lender, execute
amendments, modifications, waivers or consents on behalf of that Lender. Any
waiver or consent shall be effective only in the specific instance and for the
specific purpose for which it was given. No notice to or demand on any Borrower
in any case shall entitle any Borrower to any other or further notice or demand
in similar or other circumstances. Any amendment, modification, termination,
waiver or consent effected in accordance with this subsection 10.6 shall be
binding upon each Lender at the time outstanding, each future Lender and, if
signed by any Borrower, on such Borrower.
B. REPLACEMENT OF LENDER. If, in connection with any proposed
change, waiver, discharge or termination to any of the provisions of this
Agreement as contemplated by the first proviso to subsection 10.6A, the consent
of the Requisite Lenders is obtained but the consent of one or more of such
other Lenders whose consent is required is not obtained, then Company shall have
the right, so long as all non-consenting Lenders whose individual consent is
required are treated as described in either clauses (A) or (B) below, to either
(A) replace each such non-consenting Lender or Lenders with one or more Persons
satisfying the requirements of the definition of Eligible Assignee (each such
Person being a "REPLACEMENT LENDER") so long as at the time of such replacement
each outstanding Loan, Letter of Credit and other Obligation owed to each such
Lender being replaced is repaid in full and so long as each such Replacement
Lender consents to the proposed change, waiver, discharge or termination or (B)
terminate such non-consenting Lender's Commitments and/or repay in full each
outstanding Loan, Letter of Credit and other Obligations owed to such Lender;
provided that, unless the Commitments that are terminated, and Loans, Letters of
Credit and other Obligations repaid, pursuant to preceding clause (B) are
immediately replaced in full at such time through the addition of new Lenders or
the increase of the Commitments and/or outstanding Loans of existing Lenders
(who in each case must specifically consent thereto), then in the case of any
action pursuant to preceding clause (B) the Requisite Lenders (determined after
giving effect to the proposed action) shall specifically consent thereto;
provided, further, that in any event Borrowers shall not have the right to
replace a Lender, terminate its Commitments or repay its Loans, Letters of
Credit and other Obligations owed to such Lender solely as a result of the
exercise of such Lender's rights (and the withholding of any required consent by
such Lender) pursuant to clause (ii) of the second proviso to subsection 10.6A.
10.7 INDEPENDENCE OF COVENANTS.
All covenants hereunder shall be given independent effect so that if a
particular action or condition is not permitted by any of such covenants, the
fact that it would be permitted by an exception to, or would otherwise be within
the limitations of, another covenant shall not avoid the occurrence of an Event
of Default or Potential Event of Default if such action is taken or condition
exists.
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10.8 NOTICES.
Unless otherwise specifically provided herein, any notice or other
communication herein required or permitted to be given shall be in writing and
may be personally served, telexed or sent by telefacsimile or United States or
Canadian mail or courier service and shall be deemed to have been given when
delivered in person or by courier service, upon receipt of telefacsimile or
telex, or three Business Days after depositing it in the United States or
Canadian mail with postage prepaid and properly addressed; provided that notices
to an Administrative Agent shall not be effective until received. For the
purposes hereof, the address of each party hereto shall be as set forth under
such party's name on Schedule 2.1 hereof or (i) as to each Borrower and each
Administrative Agent, such other address as shall be designated by such Person
in a written notice delivered to the other parties hereto and (ii) as to each
other party, such other address as shall be designated by such party in a
written notice delivered to US Administrative Agent.
10.9 SURVIVAL OF REPRESENTATIONS, WARRANTIES AND AGREEMENTS.
A. All representations, warranties and agreements made herein
shall survive the execution and delivery of this Agreement and the making of the
Loans and the issuance of the Letters of Credit hereunder.
B. Notwithstanding anything in this Agreement or implied by
law to the contrary, the agreements of Borrowers set forth in subsections 2.6D,
2.7, 3.5A, 3.6, 10.2, 10.3 and 10.4 and the agreements of Lenders set forth in
subsections 9.2C, 9.4, 10.5 and 10.19 shall survive the payment of the Loans,
the cancellation or expiration of the Letters of Credit and the reimbursement of
any amounts drawn thereunder and the termination of this Agreement.
10.10 FAILURE OR INDULGENCE NOT WAIVER; REMEDIES CUMULATIVE.
No failure or delay on the part of any Administrative Agent or any
Lender in the exercise of any power, right or privilege hereunder or under any
other Priority Secured Loan Document shall impair such power, right or privilege
or be construed to be a waiver of any default or acquiescence therein, nor shall
any single or partial exercise of any such power, right or privilege preclude
other or further exercise thereof or of any other power, right or privilege. All
rights and remedies existing under this Agreement and the other Priority Secured
Loan Documents are cumulative to, and not exclusive of, any rights or remedies
otherwise available.
10.11 MARSHALLING; PAYMENTS SET ASIDE.
Neither any Administrative Agent nor any Lender shall be under any
obligation to marshal any assets in favor of any Borrower or any other party or
against or in payment of any or all of the Obligations. To the extent that any
Borrower makes a payment or payments to Collateral Agent, any Administrative
Agent or Lenders (or to Collateral Agent or any Administrative Agent for the
benefit of Lenders), or Collateral Agent or any Administrative Agent or Lenders
enforce any security interests or exercise their rights of setoff, and such
payment or payments or the proceeds of such enforcement or setoff or any part
thereof are subsequently invalidated, declared to be fraudulent or preferential,
set aside and/or required to be repaid to a trustee, receiver or any other party
under any bankruptcy law, any other state or federal law, common law or any
equitable cause, then, to the extent of such recovery, the
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obligation or part thereof originally intended to be satisfied, and all Liens,
rights and remedies therefor or related thereto, shall be revived and continued
in full force and effect as if such payment or payments had not been made or
such enforcement or setoff had not occurred.
10.12 SEVERABILITY.
In case any provision in or obligation under this Agreement or the
Notes shall be invalid, illegal or unenforceable in any jurisdiction, the
validity, legality and enforceability of the remaining provisions or
obligations, or of such provision or obligation in any other jurisdiction, shall
not in any way be affected or impaired thereby.
10.13 OBLIGATIONS SEVERAL; INDEPENDENT NATURE OF LENDERS' RIGHTS.
The obligations of Lenders hereunder are several, and no Lender shall
be responsible for the obligations or Commitments of any other Lender hereunder.
Nothing contained herein or in any other Priority Secured Loan Document, and no
action taken by Lenders pursuant hereto or thereto, shall be deemed to
constitute Lenders as a partnership, an association, a joint venture or any
other kind of entity. The amounts payable at any time hereunder to each Lender
shall be a separate and independent debt, and each Lender shall be entitled to
protect and enforce its rights arising out of this Agreement and it shall not be
necessary for any other Lender to be joined as an additional party in any
proceeding for such purpose.
10.14 JUDGMENT CURRENCY.
A. If, for the purposes of obtaining judgment in any court, it
is necessary to convert a sum due hereunder in any currency (the "ORIGINAL
CURRENCY") into another currency (the "OTHER CURRENCY"), the parties hereto
agree, to the fullest extent permitted by law, that the rate of exchange used
shall be that at which in accordance with normal banking procedures an
Administrative Agent or a Lender could purchase the Original Currency with such
Other Currency in New York, New York on the Business Day immediately preceding
the day on which any such judgment, or any relevant part thereof, is given.
B. The obligations of each Borrower in respect of any sum due
from it to any Administrative Agent or Lender hereunder shall, notwithstanding
any judgment in such Other Currency, be discharged only to the extent that on
the Business Day following receipt by such Administrative Agent or Lender of any
sum adjudged to be so due in such Other Currency such Administrative Agent or
Lender may in accordance with normal banking procedures purchase the Original
Currency with such Other Currency; if the Original Currency so purchased is less
than the sum originally due such Administrative Agent or Lender in the Original
Currency, such Borrower agrees, as a separate obligation and notwithstanding any
such judgment, to indemnify such Administrative Agent or Lender against such
loss, and if the Original Currency so purchased exceeds the sum originally due
to such Administrative Agent or Lender in the Original Currency, such
Administrative Agent or Lender shall remit such excess to such Borrower.
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10.15 HEADINGS.
Section and subsection headings in this Agreement are included herein
for convenience of reference only and shall not constitute a part of this
Agreement for any other purpose or be given any substantive effect.
10.16 APPLICABLE LAW.
THIS AGREEMENT AND THE RIGHTS AND OBLIGATIONS OF THE PARTIES HEREUNDER
SHALL BE GOVERNED BY, AND SHALL BE CONSTRUED AND ENFORCED IN ACCORDANCE WITH,
THE INTERNAL LAWS OF THE STATE OF NEW YORK (INCLUDING, WITHOUT LIMITATION
SECTION 5-1401 OF THE GENERAL OBLIGATIONS LAW OF THE STATE OF NEW YORK), WITHOUT
REGARD TO CONFLICTS OF LAWS PRINCIPLES.
10.17 SUCCESSORS AND ASSIGNS.
This Agreement shall be binding upon the parties hereto and their
respective successors and assigns and shall inure to the benefit of the parties
hereto and the permitted successors and permitted assigns of Lenders (it being
understood that Lenders' rights of assignment are subject to subsection 10.1).
Neither Borrower's rights or obligations hereunder nor any interest therein may
be assigned or delegated by such Borrower without the prior written consent of
all Lenders.
10.18 CONSENT TO JURISDICTION AND SERVICE OF PROCESS.
ALL JUDICIAL PROCEEDINGS BROUGHT AGAINST COMPANY OR CANADIAN BORROWER
ARISING OUT OF OR RELATING TO THIS AGREEMENT OR ANY OTHER PRIORITY SECURED LOAN
DOCUMENT OR ANY OBLIGATION MAY BE BROUGHT IN ANY STATE OR FEDERAL COURT OF
COMPETENT JURISDICTION IN THE STATE, COUNTY AND CITY OF NEW YORK, AND BY
EXECUTION AND DELIVERY OF THIS AGREEMENT EACH BORROWER ACCEPTS FOR ITSELF AND IN
CONNECTION WITH ITS PROPERTIES, GENERALLY AND UNCONDITIONALLY, THE NONEXCLUSIVE
JURISDICTION OF THE AFORESAID COURTS AND WAIVES ANY DEFENSE OF FORUM NON
CONVENIENS AND IRREVOCABLY AGREES TO BE BOUND BY ANY JUDGMENT RENDERED THEREBY
IN CONNECTION WITH THIS AGREEMENT, SUCH OTHER PRIORITY SECURED LOAN DOCUMENT OR
SUCH OBLIGATION. Each Borrower hereby agrees that service of all process in any
such proceeding in any such court may be made by registered or certified mail,
return receipt requested, to such Borrower at its address provided in subsection
10.8, such service being hereby acknowledged by such Borrower to be sufficient
for personal jurisdiction in any action against such Borrower in any such court
and to be otherwise effective and binding service in every respect. Nothing
herein shall affect the right to serve process in any other manner permitted by
law or shall limit the right of any Lender to bring proceedings against any
Borrower in the courts of any other jurisdiction.
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10.19 WAIVER OF JURY TRIAL.
EACH OF THE PARTIES TO THIS AGREEMENT HEREBY AGREES TO WAIVE ITS
RESPECTIVE RIGHTS TO A JURY TRIAL OF ANY CLAIM OR CAUSE OF ACTION BASED UPON OR
ARISING OUT OF THIS AGREEMENT OR ANY OF THE OTHER PRIORITY SECURED LOAN
DOCUMENTS OR ANY DEALINGS BETWEEN THEM RELATING TO THE SUBJECT MATTER OF THIS
LOAN TRANSACTION OR THE LENDER/BORROWERS RELATIONSHIP THAT IS BEING ESTABLISHED.
The scope of this waiver is intended to be all-encompassing of any and all
disputes that may be filed in any court and that relate to the subject matter of
this transaction, including without limitation contract claims, tort claims,
breach of duty claims and all other common law and statutory claims. Each party
hereto acknowledges that this waiver is a material inducement to enter into a
business relationship, that each has already relied on this waiver in entering
into this Agreement, and that each will continue to rely on this waiver in their
related future dealings. Each party hereto further warrants and represents that
it has reviewed this waiver with its legal counsel and that it knowingly and
voluntarily waives its jury trial rights following consultation with legal
counsel. THIS WAIVER IS IRREVOCABLE, MEANING THAT IT MAY NOT BE MODIFIED EITHER
ORALLY OR IN WRITING (OTHER THAN BY A MUTUAL WRITTEN WAIVER SPECIFICALLY
REFERRING TO THIS SUBSECTION 10.19 AND EXECUTED BY EACH OF THE PARTIES HERETO),
AND THIS WAIVER SHALL APPLY TO ANY SUBSEQUENT AMENDMENTS, RENEWALS, SUPPLEMENTS
OR MODIFICATIONS TO THIS AGREEMENT OR ANY OF THE OTHER PRIORITY SECURED LOAN
DOCUMENTS OR TO ANY OTHER DOCUMENTS OR AGREEMENTS RELATING TO THE LOANS MADE
HEREUNDER. In the event of litigation, this Agreement may be filed as a written
consent to a trial by the court.
10.20 CONFIDENTIALITY.
Each Lender shall hold all non-public information obtained pursuant to
the requirements of this Agreement in accordance with such Lender's customary
procedures for handling confidential information of this nature and in
accordance with safe and sound banking practices, it being understood and agreed
by each Borrower that in any event a Lender may after the proposed recipient of
such information has agreed in writing to be bound by this subsection 10.20,
make disclosures to Affiliates (other than any Affiliate that is a Competitor)
of such Lender or disclosures reasonably required by any bona fide assignee,
transferee or participant in connection with the contemplated assignment or
transfer by such Lender of any Loans or any participations therein or
disclosures required or requested by any governmental agency or representative
thereof or pursuant to legal process; provided that, unless specifically
prohibited by applicable law or court order, each Lender shall notify Company of
any request by any governmental agency or representative thereof (other than any
such request in connection with any examination of the financial condition of
such Lender by such governmental agency) for disclosure of any such non-public
information prior to disclosure of such information; and provided, further, that
in no event shall any Lender be obligated or required to return any materials
furnished by Company or any of its Subsidiaries.
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10.21 COUNTERPARTS; EFFECTIVENESS.
This Agreement and any amendments, waivers, consents or supplements
hereto or in connection herewith may be executed in any number of counterparts
and by different parties hereto in separate counterparts, each of which when so
executed and delivered shall be deemed an original, but all such counterparts
together shall constitute but one and the same instrument; signature pages may
be detached from multiple separate counterparts and attached to a single
counterpart so that all signature pages are physically attached to the same
document. This Agreement shall become effective upon the execution of a
counterpart hereof by each of the parties hereto and receipt by each Borrower
and each Administrative Agent of written or telephonic notification of such
execution and authorization of delivery thereof.
[Remainder of page intentionally left blank]
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IN WITNESS WHEREOF, the parties hereto have caused this Agreement to be
duly executed and delivered by their respective officers thereunto duly
authorized as of the date first written above.
COMPANY:
LOEWS CINEPLEX ENTERTAINMENT CORPORATION
By: /s/
------------------------------------
Name:
Title:
Notice Address:
▇▇▇ ▇▇▇▇▇ ▇▇▇▇▇▇, ▇▇▇▇ ▇▇▇▇▇
▇▇▇ ▇▇▇▇, ▇▇▇ ▇▇▇▇ ▇▇▇▇▇
Attention: ▇▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇, President and
Chief Executive Officer
With a copy to:
Loews Cineplex Entertainment Corporation
▇▇▇ ▇▇▇▇▇ ▇▇▇▇▇▇, ▇▇▇▇ ▇▇▇▇▇
▇▇▇ ▇▇▇▇, ▇▇▇ ▇▇▇▇ ▇▇▇▇▇
Attention: ▇▇▇▇ ▇. ▇▇▇▇▇▇▇, ▇▇. General Counsel
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LENDERS:
BANKERS TRUST COMPANY,
as US Administrative Agent and as a Lender
By: /s/
--------------------------------------------
Name:
Title:
By: /s/
--------------------------------------------
Name:
Title:
Notice Address:
____________________________
____________________________
Attention: ________________
Telephone: (212) ___________
Facsimile: (212) ____________
DEUTSCHE BANK AG, CANADA BRANCH,
as CN Administrative Agent and as a Lender
By: /s/
--------------------------------------------
Name:
Title:
By: /s/
--------------------------------------------
Name:
Title:
Notice Address:
____________________________
____________________________
Attention: ________________
Telephone: (212) ___________
Facsimile: (212) ____________
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