1
Exhibit 10.01
SECOND AMENDED AND RESTATED CREDIT AGREEMENT
dated as of April 7, 1997
among
▇▇▇▇▇▇▇▇▇ INTERNATIONAL PUBLISHING INC.,
TELEGRAPH GROUP LIMITED,
▇▇▇▇▇▇▇▇▇ CANADIAN PUBLISHING HOLDINGS INC.,
VARIOUS FINANCIAL INSTITUTIONS,
THE TORONTO-DOMINION BANK,
as Issuing Bank,
THE BANK OF NOVA SCOTIA,
as Syndication Agent,
CANADIAN IMPERIAL BANK OF COMMERCE,
as Documentation Agent,
and
TORONTO DOMINION (TEXAS), INC.
as Administrative Agent
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TABLE OF CONTENTS
SECTION 1 DEFINITIONS ..................................................... 2
SECTION 2 COMMITMENTS OF THE LENDERS; TYPES OF LOANS;
LETTERS OF CREDIT; BORROWING PROCEDURES; LOAN ACCOUNTS .................... 42
2.1 Commitments .......................................................... 42
2.2 Lenders Not Permitted or Required To Make Credit Extensions .......... 45
2.3 Various Types of Loans ............................................... 45
2.4 Borrowing Procedures ................................................. 46
2.5 Procedures for Conversion of Type of Loan ............................ 47
2.6 Letter of Credit Procedures .......................................... 47
2.7 Participations in Letters of Credit .................................. 48
2.8 Reimbursement Obligations ............................................ 49
2.9 Limitation on the Issuing Bank's Obligations ......................... 49
2.10 Funding by Lenders to the Issuing Bank ............................... 50
2.11 Warranty ............................................................. 50
2.12 Conditions ........................................................... 51
2.13 Determination of Dollar Equivalents .................................. 51
2.14 Commitments Several .................................................. 51
2.15 Loan Accounts ........................................................ 51
SECTION 3 THE ACCEPTANCES ................................................. 52
3.1 Creation of Acceptances .............................................. 52
3.2 Payment of Acceptances upon Maturity ................................. 54
3.3 Rollover of Acceptances .............................................. 54
3.4 Changes in Distribution .............................................. 54
3.5 Control Accounts ..................................................... 54
3.6 Illegality ........................................................... 55
3.7 Collateralization of Acceptances ..................................... 56
SECTION 4 INTERLENDER AGREEMENTS .......................................... 57
4.1 Affiliate Lenders .................................................... 57
4.2 Allocation of Payments Prior to Acceleration ......................... 58
4.3 Allocation of Payments After Acceleration ............................ 58
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SECTION 5 INTEREST AND FEES ............................................... 59
5.1 Interest Rates ..................................................... 59
5.2 Interest Payment Dates ............................................. 60
5.3 Interest Periods ................................................... 60
5.4 Setting and Notice of Eurocurrency Rates ........................... 61
5.5 Computation of Interest ............................................ 61
5.6 Commitment Fee ..................................................... 62
5.7 Letter of Credit Fees .............................................. 62
5.8 Additional Fees .................................................... 62
SECTION 6 REDUCTION OR TERMINATION OF THE COMMITMENTS; REPAYMENTS ......... 63
6.1 Reduction or Termination of the Commitments ........................ 63
6.1.1 Voluntary Reduction or Termination ................................. 63
6.1.2 Mandatory Commitment Reduction ..................................... 63
6.1.3 Application of Mandatory Commitment
Reductions to Tranches ............................................. 65
6.1.4 All Reductions ..................................................... 65
6.2 Prepayments ........................................................ 65
6.2.1 Mandatory Prepayments due to Commitment Reductions ................. 65
6.2.2 Mandatory Prepayments due to Currency Fluctuations ................. 65
6.2.3 Voluntary Prepayments .............................................. 66
6.2.4 All Prepayments .................................................... 66
6.2.5 Commitment Termination Date ........................................ 66
SECTION 7 MAKING AND PRORATION OF PAYMENTS; SETOFF; TAXES ................. 67
7.1 Making of Payments ................................................. 67
7.2 Application of Certain Payments .................................... 67
7.3 Due Date Extension ................................................. 67
7.4 Setoff ............................................................. 67
7.5 Proration of Payments .............................................. 67
7.6 Net Payments; Tax Exemptions ....................................... 68
SECTION 8 INCREASED COSTS; SPECIAL PROVISIONS FOR EUROCURRENCY LOANS ...... 69
8.1 Increased Costs .................................................... 69
8.2 Basis for Determining Interest Rate Inadequate or Unfair ........... 71
8.3 Changes in Law Rendering Eurocurrency Loans Unlawful ............... 71
8.4 Funding Losses ..................................................... 72
8.5 Right of Lenders to Fund through Other Offices ..................... 72
8.6 Discretion of Lenders as to Manner of Funding ...................... 73
8.7 Mitigation of Circumstances; Replacement of Affected Lender......... 73
8.8 Conclusiveness of Statements; Survival of Provisions ............... 74
SECTION 9 WARRANTIES ...................................................... 74
9.1 Organization, etc .................................................. 74
9.2 Authorization; No Conflict ......................................... 74
9.3 Validity and Binding Nature ........................................ 75
9.4 Financial Information .............................................. 75
9.5 No Material Adverse Change ......................................... 76
9.6 Litigation and Contingent Liabilities .............................. 76
9.7 Ownership of Properties; Liens ..................................... 76
9.8 Subsidiaries ....................................................... 76
9.9 Pension, Welfare and Employee Benefit Plans ........................ 76
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9.10 Investment Company Act ........................................... 77
9.11 Public Utility Holding Company Act ............................... 77
9.12 Regulations G, T, U and X ........................................ 77
9.13 Taxes ............................................................ 78
9.14 Solvency, etc .................................................... 78
9.15 Insurance ........................................................ 78
9.16 Contracts; Labor Matters ......................................... 78
9.17 Environmental and Safety and Health Matters ...................... 79
9.18 Information ...................................................... 80
9.19 Senior Subordinated Indenture .................................... 80
9.20 Financial Assistance ............................................. 80
SECTION 10 COVENANTS ...................................................... 81
10.1 Reports, Certificates and Other Information ...................... 81
10.1.1 Annual Report .................................................... 81
10.1.2 Quarterly Reports ................................................ 81
10.1.3 Certificates ..................................................... 82
10.1.4 Southam Reports .................................................. 82
10.1.5 Reports to SEC and to Shareholders ............................... 82
10.1.6 Notice of Default, Litigation and ERISA Matters .................. 82
10.1.7 Subsidiaries ..................................................... 83
10.1.8 Management Reports ............................................... 83
10.1.9 Insurance Information ............................................ 83
10.1.10 Annual Budget .................................................... 83
10.1.11 Post-Closing Forecasts ........................................... 84
10.1.12 Other Information ................................................ 84
10.2 Books, Records and Inspections ................................... 84
10.3 Insurance ........................................................ 84
10.4 Compliance with Laws; Maintenance of Property; Payment of
Taxes and Liabilities ............................................ 85
10.5 Maintenance of Existence, etc .................................... 85
10.6 Financial Covenants .............................................. 85
10.6.1 Total Leverage Ratio ............................................. 85
10.6.2 Senior Leverage Ratio ............................................ 86
10.6.3 Interest Coverage Ratio .......................................... 87
10.6.4 Fixed Charge Coverage Ratio ...................................... 87
10.6.5 Asset Coverage Ratio ............................................. 87
10.6.6 Computation of Financial Covenants ............................... 87
10.7 Limitations on Debt .............................................. 88
10.8 Liens ............................................................ 89
10.9 Limitation on Restricted Payments ................................ 90
10.10 Investments ...................................................... 93
10.11 Mergers, Consolidations, Sales, Acquisitions ..................... 94
10.12 Use of Proceeds .................................................. 96
10.13 Transactions with Affiliates ..................................... 96
10.14 Employee Benefit Plans ........................................... 97
10.15 Environmental Covenants .......................................... 97
10.15.1 Environmental Response Obligation ................................ 97
10.15.2 Environmental Liabilities ........................................ 97
10.16 Unconditional Purchase Obligations ............................... 97
10.17 Inconsistent Agreements .......................................... 98
10.18 Further Assurances ............................................... 98
10.19 Amendments to Certain Documents .................................. 99
10.20 Conduct of Business .............................................. 99
10.21 Limitations on Sale and Leaseback Transactions .................. 99
10.22 Tax Allocation Agreement ........................................ 99
10.23 Fiscal Year ..................................................... 99
10.24 Holding Company Status .......................................... 100
10.25 Limitation on Dividends and Other Payment Restrictions
Affecting Restricted Subsidiaries ............................... 100
10.26 Designation and Ownership of Subsidiaries ....................... 100
10.27 New Restricted Subsidiaries, Investments and Acquisitions ....... 100
10.28 Additional Collateral ........................................... 101
10.29 Operating Leases ................................................ 101
10.30 AP-91 Further Restricted ........................................ 102
10.31 Capital Expenditures ............................................ 102
10.32 Post Closing Actions ............................................ 102
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SECTION 11 CONDITIONS OF LENDING ......................................... 102
11.1 Documentary Conditions to Amendment Effective Date ............... 102
11.1.1 Resolutions ...................................................... 103
11.1.2 Organic Documents ................................................ 103
11.1.3 Incumbency and Signature Certificates ............................ 103
11.1.4 Consents, etc .................................................... 103
11.1.5 Guaranties ....................................................... 103
11.1.6 Pledge Agreements ................................................ 104
11.1.7 Security Agreements .............................................. 104
11.1.8 AP-91 Agreement .................................................. 105
11.1.9 Financial Statements ............................................. 105
11.1.10 Process Agent Letter ............................................. 105
11.1.11 Compliance Certificate ........................................... 105
11.1.12 Assignment Agreement ............................................. 105
11.1.13 Other ............................................................ 106
11.2 Other Conditions to Amendment Effective Date ..................... 106
11.2.1 Capital Structure ................................................ 106
11.2.2 Due Diligence .................................................... 106
11.2.3 DTH and FDTH Preference Shares ................................... 106
11.2.4 Fairfax Proceeds ................................................. 106
11.2.5 Debt to be Repaid ................................................ 106
11.2.6 No Material Adverse Effect ....................................... 106
11.2.7 Fees ............................................................. 107
11.2.8 U.K. Procedural Requirements ..................................... 107
11.2.9 Southam Market Value ............................................. 107
11.3 Conditions to Canadian Acquisition ............................... 107
11.3.1 Documentary Conditions to Canadian Acquisition Date. ............. 107
11.3.2 Canadian Acquisition ............................................. 108
11.3.3 Insurance ........................................................ 108
11.3.4 Other Legal Opinions ............................................. 109
11.3.5 No Material Adverse Effect ....................................... 109
11.3.6 Capital Structure ................................................ 109
11.3.7 No Litigation Regarding Canadian Acquisition ..................... 109
11.3.8 Debt to be Repaid ................................................ 109
11.3.9 Due Diligence .................................................... 109
11.3.10 Capital Markets .................................................. 109
11.3.11 Compliance Certificate ........................................... 110
11.3.12 Process Agent Letter ............................................. 110
11.3.13 Fees ............................................................. 110
11.3.14 Southam Market Value ............................................. 110
11.3.15 The Funding and Close ............................................ 110
11.3.16 Officers Certificates ............................................ 110
11.3.17 Other ............................................................ 111
11.4 Tranche D Availability ........................................... 112
11.4.1 Documentary Conditions to Tranche D Availability Date ............ 112
11.4.2 Approved Acquisition ............................................. 112
11.4.3 Insurance ........................................................ 113
11.4.4 No Material Adverse Effect ....................................... 113
11.4.5 Capital Structure ................................................ 113
11.4.6 No Litigation Regarding Approved Acquisition ..................... 113
11.4.7 Debt to be Repaid ................................................ 113
11.4.8 Due Diligence .................................................... 113
11.4.9 Capital Markets .................................................. 113
11.4.10 Compliance Certificate ........................................... 114
11.4.11 Process Agent Letter ............................................. 114
11.4.12 Fees ............................................................. 114
11.4.13 The Funding and Close ............................................ 114
11.4.14 Officers Certificates ............................................ 114
11.4.15 Satisfaction Regarding Approved Acquisition ...................... 115
11.4.16 Financial Projections ............................................ 115
11.4.17 Offering Sanction ................................................ 116
11.4.18 Other ............................................................ 116
11.5 All Loans, Letters of Credit and Acceptances ..................... 116
11.5.1 No Default, etc .................................................. 116
11.5.2 Confirmatory Certificate ......................................... 117
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SECTION 12 EVENTS OF DEFAULT AND THEIR EFFECT ............................ 117
12.1 Events of Default ................................................ 117
12.1.1 Non-Payment of the Loans, etc .................................... 117
12.1.2 Default under Other Debt ......................................... 117
12.1.3 Other Material Obligations ....................................... 117
12.1.4 Bankruptcy, Insolvency, etc ...................................... 118
12.1.5 Non-Compliance with Provisions of This Agreement ................. 119
12.1.6 Warranties ....................................................... 119
12.1.7 Pension Plans .................................................... 119
12.1.8 Judgments ........................................................ 119
12.1.9 Invalidity of Guaranty, etc ...................................... 120
12.1.10 Invalidity of Collateral Documents, etc .......................... 120
12.1.11 Change in Control ................................................ 120
12.1.12 Material Adverse Effect .......................................... 120
12.1.13 Ownership of Restricted Subsidiaries ............................. 120
12.1.14 Redemption Date .................................................. 120
12.2 Effect of Event of Default ....................................... 120
SECTION 13 THE ADMINISTRATIVE AGENT ...................................... 121
13.1 Authorization .................................................... 121
13.2 Indemnification .................................................. 121
13.3 Exculpation ...................................................... 122
13.4 Credit Investigation ............................................. 122
13.5 Administrative Agent and Affiliates .............................. 122
13.6 Action on Instructions of the Lenders ............................ 123
13.7 Funding Reliance ................................................. 123
13.8 Collateral Matters ............................................... 124
13.9 Resignation ...................................................... 124
SECTION 14 GENERAL ....................................................... 125
14.1 Waiver; Amendments ............................................... 125
14.2 Confirmations .................................................... 126
14.3 Notices .......................................................... 126
14.4 Computations ..................................................... 126
14.5 Regulations G, T, U and X ........................................ 126
14.6 Costs, Expenses and Taxes ........................................ 126
14.7 Subsidiary References ............................................ 127
14.8 Captions ......................................................... 127
14.9 Assignments; Participations ...................................... 127
14.9.1 Assignments ...................................................... 127
14.9.2 Participations ................................................... 129
14.10 Governing Law .................................................... 130
14.11 Counterparts ..................................................... 130
14.12 Successors and Assigns ........................................... 130
14.13 Indemnification by the Borrowers ................................. 130
14.14 Survival of Indemnities .......................................... 131
14.15 Confidentiality .................................................. 131
14.16 Forum Selection and Consent to Jurisdiction ...................... 132
14.17 Waiver of Jury Trial ............................................. 132
14.18 American Legal Terms ............................................. 132
14.19 Judgment Currency ................................................ 133
14.20 Tranche D Assumption ............................................. 133
SECTION 15 GUARANTY PROVISIONS ........................................... 133
15.1 Guaranty ......................................................... 133
15.2 Acceleration of Guaranty ......................................... 135
15.3 Guaranty Absolute, etc ........................................... 135
15.4 Reinstatement, etc ............................................... 137
15.5 Waiver, etc ...................................................... 137
15.6 Waiver of Subrogation and Contribution ........................... 137
SECTION 16 AMENDMENT EFFECTIVE DATE ASSIGNMENT ........................... 138
16.1 Amendment Effective Date of Assignments .......................... 138
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EXHIBIT A Form of Amendment Effective Date Assignment Agreement
EXHIBIT B Form of Compliance Certificate
EXHIBIT C-1 Form of Company Security Agreement
EXHIBIT C-2 Form of U.K. Security Agreement
EXHIBIT C-3 Form of Canadian Security Agreement (PPSA)
EXHIBIT C-4 Form of Canadian Security Agreement (Quebec)
EXHIBIT D-1 Form of ▇▇▇▇▇▇▇▇▇ International Guaranty
EXHIBIT D-2 Form of U.S. Subsidiary Guaranty
EXHIBIT D-3 Form of U.K. Subsidiary Guaranty
EXHIBIT D-4 Form of Canadian Guaranty
EXHIBIT E-1 Form of ▇▇▇▇▇▇▇▇▇ International Pledge Agreement
EXHIBIT E-2 Form of Company Pledge Agreement
EXHIBIT E-3 Form of Telegraph Pledge Agreement
EXHIBIT E-4 Form of Canada Holdings Pledge Agreement
EXHIBIT E-5 Form of Limited/Eastern Pledge Agreement
EXHIBIT E-6 Form of Canada Holdings/Eastern Pledge Agreement
EXHIBIT E-7 Form of U.K. Pledge Agreement
EXHIBIT E-8 Form of U.K. Subsidiary Pledge Agreement
EXHIBIT E-9 Form of Southam Pledge Agreement
EXHIBIT E-10 Form of Canadian Pledge Agreement (PPSA)
EXHIBIT E-11 Form of Canadian Pledge Agreement (Quebec)
EXHIBIT F Form of AP-91 Agreement
EXHIBIT G Form of Assignment Agreement
EXHIBIT H Form of Notice of Tranche C and Tranche D Credit Extension Request
EXHIBIT I Form of Tax Allocation Agreement
EXHIBIT J Form of Acceptance Power of Attorney
SCHEDULE 1.1 Commitments and Percentages
SCHEDULE 1.2 Pricing Grid
SCHEDULE 2.6 Existing Letters of Credit
SCHEDULE 6.1.2 Scheduled Mandatory Commitment Reductions
SCHEDULE 9.5 Recent Developments
SCHEDULE 9.6 Litigation and Contingent Liabilities
SCHEDULE 9.8 Subsidiaries
SCHEDULE 9.9 Welfare Plans
SCHEDULE 9.15 Insurance
SCHEDULE 9.16 Contracts; Labor Matters
SCHEDULE 9.17 Environmental and Safety and Health Matters
SCHEDULE 10.7 Debt
SCHEDULE 10.8 Liens
SCHEDULE 10.10 Investments
SCHEDULE 14.3 Addresses for Notices
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SECOND AMENDED AND RESTATED CREDIT AGREEMENT
This SECOND AMENDED AND RESTATED CREDIT AGREEMENT, dated as of April 7,
1997 (as amended, supplemented or otherwise modified from time to time, this
"Agreement"), is entered into among ▇▇▇▇▇▇▇▇▇ INTERNATIONAL PUBLISHING INC., a
Delaware corporation (the "Company"), TELEGRAPH GROUP LIMITED, a limited
liability company incorporated under the laws of England and Wales (the "U.K.
Borrower"), ▇▇▇▇▇▇▇▇▇ CANADIAN PUBLISHING HOLDINGS INC., a New Brunswick
corporation (the "Canadian Borrower"), the undersigned financial institutions
(together with their respective successors and assigns, collectively the
"Lenders" and individually each a "Lender"), THE TORONTO-DOMINION BANK (in its
individual capacity, "Toronto-Dominion") as issuing bank and TORONTO DOMINION
(TEXAS), INC. (in its individual capacity, "TD- Texas") as administrative agent
for the Lenders.
WHEREAS, the Company, TD-Texas, as Administrative Agent, and
Toronto-Dominion, as Issuing Bank, entered into that certain Amended and
Restated Credit Agreement dated as of May 30, 1996 (as amended or modified and
in effect immediately prior to the Amendment Effective Date the "Existing
Credit Agreement"), whereunder certain financial institutions (the "Original
Lenders") agreed to make revolving loans and to issue letters of credit in the
maximum amount of $160,000,000;
WHEREAS, pursuant to the FDTH Credit Agreement, The Toronto- Dominion
Bank, London Branch issued that certain guaranty on August 8, 1996 for the
benefit of FDTH in connection with the Scheme and the U.K. Borrower guaranteed
the obligations of FDTH in connection therewith;
WHEREAS, the Company desires to refinance the Existing Credit
Extensions, the U.K. Borrower desires to refinance the FDTH Loan Note Guaranty
and the Borrowers desire to obtain a revolving loan commitment (to include
availability for revolving loans; in the case of the Canadian Borrower, bankers
acceptances; and, in the case of the Company and the U.K. Borrower, the
issuance of letters of credit) pursuant to which borrowings of revolving loans
and issuance of letters of credit in the maximum aggregate amount not to exceed
$900,000,000 would be made to the Company, borrowings of revolving loans and
issuance of letters of credit in the maximum aggregate principal amount not to
exceed $150,000,000 would be made to the U.K. Borrower, and borrowings of
revolving loans and issuance of bankers acceptances in the maximum aggregate
principal amount not to exceed $250,000,000 would be made to the Canadian
Borrower, and borrowings of revolving loans and issuance of bankers acceptances
in the maximum aggregate principal amount not to exceed $700,000,000 would be
made to the Canadian Borrower or its assignee; provided that the aggregate of
all loans, bankers acceptances and letters of credit outstanding to all
Borrowers would not exceed $900,000,000;
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WHEREAS, the Company has requested the Lenders to amend and restate the
Existing Credit Agreement on the terms and conditions set forth in this
Agreement, to set forth, among other things, the terms and conditions under
which the Lenders hereafter will make credit extensions to the Borrowers; it
being the intention of the Company, the Lenders and the Administrative Agent
that this Agreement and the Loan Documents executed in connection herewith
shall not effect the novation of the obligations of the Company under the
Existing Credit Agreement but be merely a restatement and, where applicable, an
amendment of and substitution for the terms governing such obligations
hereafter; and
WHEREAS, the U.K. Borrower has requested the issuing bank and the
Lenders to refinance the FDTH Loan Note Guaranty on the terms and conditions
set forth in this Agreement as if such FDTH Loan Note Guaranty had been issued
hereunder on the Amendment Effective Date;
WHEREAS, the Existing Credit Extensions outstanding immediately prior
to the Amendment Effective Date pursuant to the Existing Credit Agreement shall
be deemed to be issued and outstanding under the Tranche A Commitment for all
purposes hereof and of the Loan Documents after giving effect to the Amendment
Effective Date and the FDTH Loan Note Guaranty shall be deemed to be a Letter
of Credit requested by the U.K. Borrower and issued and outstanding under the
Tranche B Commitment for all purposes hereof and of the Loan Documents after
giving effect to the Amendment Effective Date;
NOW, THEREFORE, in consideration of the promises and the mutual
agreements herein contained, and for other good and valuable consideration, the
receipt and sufficiency of which are hereby acknowledged, the parties hereto
agree as follows:
SECTION 1 DEFINITIONS.
When used herein the following terms shall have the following meaning
(such definitions to be applicable to both the singular and plural forms of
such terms);
Acceleration Right means a right, which at the time is immediately
exercisable (without further notice or lapse of time), by the holders or a
trustee to cause the acceleration of the maturity of Debt of the Company or a
Restricted Subsidiary having an aggregate principal amount outstanding of at
least $5,000,000.
Acceptance means Tranche C Acceptances and Tranche D Acceptances.
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Acceptance Collateral Amount - see Section 3.7.
Acceptance Collateral Loans - see Section 3.7.
Acceptance Obligation - see Section 3.2.
Acceptance Power of Attorney - see Section 3.1(c).
Acceptance Proceeds means the cash proceeds realized on creation of an
Acceptance by a Canadian Lender on the date of creation of such Acceptance.
Acquisition means (a) any acquisition or merger by the Company or any
Restricted Subsidiary in the Financial Group of or with any other Person which
owns or operates newspapers or other similar publication businesses or printing
businesses, which acquisition or merger has been approved and recommended in
writing by the Board of Directors of the Person to be acquired or, if such
Board approval is not required or practicable, which merger or acquisition
otherwise has been made and consummated without any hostile or antagonistic
measures, which Person shall then become consolidated with the Company or any
such Restricted Subsidiary in accordance with GAAP, or (b) any acquisition by
the Company or any Restricted Subsidiary in the Financial Group of the assets
of any Newspaper Business which acquisition has been approved and recommended
in writing by the Board of Directors of the business whose assets are being
acquired or, if such Board approval is not practicable, which acquisition
otherwise has been made and approved without any hostile or antagonistic
measures; provided, however, with respect to both clause (a) and clause (b),
that the requirement for Board of Director approval and lack of hostile and
antagonistic measures shall not apply to the Approved Acquisition.
Acquisition Assumption - see Section 14.20.
Acquisition Borrower means, initially ▇▇▇▇▇▇▇▇▇ Canadian Publishing
Holdings Inc., a New Brunswick corporation, or thereafter a wholly owned
Subsidiary thereof that (a) is acceptable to the Lenders and (b) executes the
Assumption Agreement.
Acquisition Debt means any Debt of the Company or any Restricted
Subsidiary in the Financial Group to any Person other than the Company or any
Restricted Subsidiary in the Financial Group (a) at any time or from time to
time incurred, created or assumed in connection with any Acquisition or (b)
existing at the time any Person (including an Unrestricted Subsidiary) becomes
a Restricted Subsidiary but excluding in case of clauses (a) and (b) any Debt
of the Borrowers to the Administrative Agent and the Lenders, or any of them,
under this Agreement or under any other Loan Document.
Acquisition Documents means the documents relating to any proposed
Approved Acquisition.
Additional Commitment means an amount equal to the Total Commitment
minus the Original Commitment.
Additional Investments - see Section 10.10.
Additional Restricted Payments - see Section 10.9.
Adjusted Operating Cash Flow means Operating Cash Flow plus Management
Fees (a) excluding (i) any gains or losses on Asset Sales and (ii) net income
attributable to dividends or other distributions received from any Unrestricted
Subsidiary or Southam and its Subsidiaries and (b) adjusted to reflect
permitted Acquisitions, Asset Swaps and designations of Unrestricted
Subsidiaries as Restricted Subsidiaries. In the case of an Acquisition or Asset
Swap permitted hereunder, Operating Cash Flow of the Company and its Restricted
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Subsidiaries in the Financial Group on a consolidated basis, for purposes of
any calculation of Adjusted Operating Cash Flow for a period prior to the date
of such Acquisition or Asset Swap, shall be adjusted to give effect to such
Acquisition or Asset Swap by adding or subtracting, as the case may be, the
actual Operating Cash Flow for such Acquisition or Asset Swap. If the actual
Operating Cash Flow for such Acquisition or Asset Swap for all or any portion
of such period shall not be available, the Company shall estimate Operating
Cash Flow for all or any portion of such period, as applicable, which estimate
shall be approved in advance by the Administrative Agent. In the case of an
Asset Swap, the actual Operating Cash Flow of the Traded-For Newspaper Assets
shall be reduced by an amount equal to the actual Operating Cash Flow of the
Traded Newspaper Assets. For purposes of this Agreement, "Adjusted Operating
Cash Flow" shall not include any portion of the Operating Cash Flow of any
Person other than Restricted Subsidiaries in the Financial Group.
Administrative Agent means TD-Texas in its capacity as administrative
agent for the Lenders hereunder, any sub-agents which TD-Texas may appoint from
time to time under any Tranche and any successor thereto in such capacity. The
Toronto-Dominion Bank, Toronto, shall serve as the Administrative Agent's
subagent with respect to Tranche C and Tranche D.
Affected Lender means any Lender that has given notice to the Company
(which has not been rescinded) of (a) any obligation by the Company to pay any
amount pursuant to Section 7.6 or 8.1 or (b) the occurrence of any
circumstances of the nature described in Section 8.2 or 8.3.
Affected Loan - see Section 8.3.
Affiliate means, with respect to any specified Person, (a) any other
Person directly or indirectly controlling or controlled by or under direct or
indirect common control with such specified Person or (b) any other Person that
owns, directly or indirectly, 10% or more of such Person's equity ownership or
Voting Stock or any officer or director of any such Person or other Person or
with respect to any natural Person, any Person having a relationship with such
Person by blood, marriage or adoption not more remote than first cousin. For
the purposes of this definition, "control" when used with respect to any
specified Person means the power to direct the management and policies of such
Person directly or indirectly, whether through ownership of voting securities,
by contract or otherwise; and the terms "controlling" and "controlled" have
meanings correlative to the foregoing.
Agreement - see the Preamble.
Alternate Base Rate means, at any time, the greater of (a) the Federal
Funds Rate plus 1/2 of 1% and (b) the U.S. Base Rate.
Alternate Currencies means Sterling and Canadian Dollars.
Amendment Effective Date - see Section 11.1.
Amortization Expense of any Person means, for any period, amounts
recognized during such period as (a) amortization of goodwill or (b)
amortization of any other intangible assets with an original life of ten years
or more, in each case in accordance with GAAP and to the extent reflected in
the Consolidated Net Income (Loss) of the Company and the Restricted
Subsidiaries.
AP-91 means American Publishing (1991) Inc., a Delaware corporation.
AP-91 Agreement - see Section 11.1.8.
AP-91 Senior Notes means those certain 10.34% Series B Senior Secured
Notes due September 1, 1997, 10.44% Series C
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Senior Secured Notes due September 1, 1998, 10.49% Series D Senior Secured
Notes due September 1, 1999 and 10.53% Series E Senior Secured Notes due
September 1, 2000 issued by AP-91 pursuant to those certain Note Purchase
Agreements, each dated as of September 12, 1990, pursuant to which such Notes
were issued by AP-91 to those purchasers identified therein, as such Senior
Secured Notes and Note Purchase Agreements are amended and in effect on the
Amendment Effective Date.
APAC-90 means APAC-90 Inc., a Delaware corporation.
APAC-90 8% Preferred Stock means the 8% First Series Preferred Shares
issued by APAC-90.
APAC-90 Preferred Stock means collectively the APAC-90 8% Preferred
Stock and the Second Series Preferred Stock issued by APAC-90.
APAC 95 means APAC-95 Inc., a Delaware corporation.
APHI means American Publishing Holdings Inc., a Delaware corporation.
Applicable Commitment Fee Rate means the rate set forth beneath
"Commitment Fee Rate" on the Pricing Grid for the applicable Total Leverage
Ratio.
Applicable Margin means (a) in the case of Eurocurrency Loans and
Acceptances the rate set forth beneath "Eurocurrency Rate/Acceptance Fee" on
the Pricing Grid and (b) in the case of Floating Rate Loans, the rate set forth
beneath "Base Rate" on the Pricing Grid.
Approved Acquisition means any Acquisition by the Acquisition Borrower
financed under Tranche D on terms and conditions satisfactory to the Lenders in
their sole and absolute discretion.
Argsub means Argsub Limited, a limited liability company incorporated
under the laws of England and Wales.
Argsub Preference Shares means (a) the 600 Second Preference Shares of
Argsub issued to and held by FDTH and (b) the 140 Series A preference shares
and 140 Series B Preference Shares of Argsub issued to and held by DTH.
Asset Coverage Ratio means the ratio of the Southam Market Value on any
date to the Southam Market Value on the Amendment Effective Date.
Asset Reduction Date - see Section 6.1.2.
Asset Sale means (a) any sale, lease, transfer or other disposition
(including by way of merger or consolidation or Asset Swap) by the Company or
any Restricted Subsidiary in the Financial Group of any asset (including the
sale of the Capital Stock of any Restricted Subsidiary in the Financial Group
other than the sale of New Preference Shares pursuant to the Purchase Option)
outside the ordinary course of business to a Person other than the Company or a
Restricted Subsidiary in the Financial Group, or (b) any sale or assignment
with or without recourse of accounts receivable of the Company or any
Restricted Subsidiary in the Financial Group. For purposes of this definition,
the term "Asset Sale" shall not include any transfer of property and assets (i)
having a market value of less than $1,000,000 (it being understood that if the
market value of the properties or assets being transferred exceeds $1,000,000,
the entire value and not just the portion in excess of $1,000,000 shall be
deemed to have been the subject of an Asset Sale), (ii) which are obsolete (in
the case of equipment) to the Company's and such Restricted Subsidiaries'
businesses and (iii) consisting of any transfer of common shares of Southam to
▇▇▇▇▇▇▇▇▇ Inc. pursuant to the
13
provisions of the HTH/FDTH Share Exchange Agreement.
Asset Swap means the exchange of the assets of any Newspaper Business
owned by the Company or any Restricted Subsidiary in the Financial Group
("Traded Newspaper Assets") as an entirety or substantially as an entirety for
all or substantially all of the assets of another Newspaper Business
("Traded-For Newspaper Assets") owned by the Person (or an Affiliate of the
Person) to whom such Traded Newspaper Assets shall be transferred in such
exchange.
Assignee - see Section 14.9.1.
Assignment Agreement - see Section 14.9.1.
Assumed Obligations - see Section 14.20.
Assumption Agreement - see Section 14.20.
BenHoldco means HTH BenHoldco Inc., a Delaware corporation.
Board of Directors means the board of directors of a Person or any duly
authorized committee of such board.
Borrower means each of the Company, the U.K. Borrower, the Canadian
Borrower and the Acquisition Borrower (referred to collectively as the
"Borrowers").
Business Day means any day on which commercial banks are open for
commercial banking business in Chicago and New York and, in the case of a
Business Day which relates to a Tranche C or Tranche D Credit Extension, on
which commercial banks are open for commercial banking business in Toronto and,
in the case of a Business Day which relates to a Eurocurrency Loan, on which
dealings in Dollars and Alternate Currencies are carried on in the London
interbank market.
Canada Holdings means ▇▇▇▇▇▇▇▇▇ International (Canada) Holdings Co., a
Nova Scotia unlimited liability company.
Canada Holdings Pledge Agreement - see Section 11.1.6.
Canada Holdings/Eastern Pledge Agreement - see Section 11.1.6.
Canadian Acceptance Rate means either (a) with respect to any
Acceptance accepted by a Canadian Lender listed on Schedule 1 of the Bank Act
(Canada), the rate per annum (rounded upwards if necessary to the nearest
0.01%, calculated on the basis of 365 days and determined in accordance with
normal market practice) quoted by Toronto-Dominion in Toronto not later than
10:00 a.m. (Toronto time) on the Business Day of the proposed creation of such
Acceptances as its discount rate for banker's acceptances having a comparable
face amount and identical maturity date to the face amount and maturity date of
the Acceptances to be created by Toronto-Dominion or (b) with respect to any
Acceptance accepted by a Canadian Lender listed on Schedule 2 of the Bank Act
(Canada), a rate equal to the rate determined under clause (a) plus 0.07% per
annum.
Canadian Acquisition means the acquisition by the Canadian Borrower of
certain assets located in Canada from ▇▇▇▇▇▇▇▇▇ Inc. and its Subsidiaries,
pursuant to the Purchase Agreements.
Canadian Acquisition Date - see Section 11.3.
Canadian Base Rate means, on any day, the greater of (a) the Canadian
Prime Rate and (b) the rate per annum which is 0.75% above the one-month
acceptance rate quoted by Toronto-Dominion at 10:00 a.m. (Toronto time) which
appears on the ▇▇▇▇▇▇'▇ Screen CDOR Page as its rate for acceptances in Canada.
Canadian Borrower - see the Preamble.
14
Canadian Dollar and C$ mean the lawful currency of Canada.
Canadian Guaranty means any guaranty substantially in the form of
Exhibit D-4 (with such changes therein as are acceptable to the Administrative
Agent) which may be executed from time to time by any Restricted Subsidiary
organized under the laws of Canada or any Province thereof, as such guaranties
may be amended, supplemented or otherwise modified from time to time.
Canadian Lender means each Lender designated as a "Canadian Lender" on
Schedule 1.1 hereto or pursuant to an Assignment Agreement.
Canadian Office means, relative to any Canadian Lender, the office of
such Canadian Lender designated as such on Schedule 14.3 hereto or designated
in an Assignment Agreement or such other office of a Canadian Lender (or any
successor or assign of such Lender) within Canada as may be designated from
time to time by notice from such Canadian Lender, as the case may be, to the
Administrative Agent.
Canadian Percentage means, relative to any Canadian Lender, the
percentage set forth under the caption "Canadian Percentage" on Schedule 1.1
hereto or set forth in an Assignment Agreement, as such percentage may be
adjusted from time to time pursuant to Assignment Agreement(s) executed by such
Canadian Lender and its Assignee and delivered pursuant to Section 14.9.1.
Canadian Pledge Agreement means any pledge agreement substantially in
the form of Exhibit E-10 or E-11 (with such changes therein as are acceptable
to the Administrative Agent) which may be executed from time to time by any
Restricted Subsidiary organized under the laws of Canada or any Province
thereof, as such Canadian Pledge Agreements may be amended, supplemented or
otherwise modified from time to time.
Canadian Prime Rate means the rate of interest for commercial loans in
Canadian Dollars established and publicly announced by Toronto-Dominion in
Toronto from time to time as its prime rate for demand extensions of credit in
Canadian Dollars. The Canadian Prime Rate may not necessarily be the lowest
rate of interest quoted by Toronto-Dominion with respect to extensions of
credit in Canadian Dollars. Changes in the rate of interest on any Tranche C
Loans or Tranche D Loans maintained as Canadian Prime Rate Loans will take
effect as of the opening of business on the effective date of each change in
the Canadian Prime Rate.
Canadian Prime Rate Loan means a Tranche C Loan or a Tranche D Loan
bearing interest at a fluctuating rate determined by reference to the Canadian
Prime Rate.
Canadian Security Agreement means any security agreement substantially
in the form of Exhibit C-3 or C-4 (with such changes therein as are acceptable
to the Administrative Agent) which may be executed from time to time by any
Restricted Subsidiary organized under the laws of Canada or any Province
thereof, as such Canadian Security Agreements may be amended, supplemented or
otherwise modified from time to time.
Canadian Subordination Agreement means the subordination agreement
dated as of the Canadian Acquisition Date, among the Sterling Newspapers
Company, UniMedia Groupe Inc., the Canadian Borrower and the Administrative
Agent.
Capital Expenditures means all expenditures which, in accordance with
GAAP, would be required to be capitalized and shown on the consolidated balance
sheet of the Company and the Financial Group, but excluding expenditures made
in connection with the replacement, substitution or restoration of assets to
the extent financed (a) from insurance proceeds (or other similar recoveries)
paid on account of the loss of or damage to the assets being replaced or
restored or (b) with awards of
15
compensation arising from the taking by seizure, compulsory purchase, eminent
domain or condemnation of the assets being replaced.
Capital Lease means, with respect to any Person, any lease of (or other
agreement conveying the right to use) any real or personal property by such
Person which, in conformity with GAAP, is accounted for as a capital lease on
the balance sheet of such Person.
Capital Stock of any Person means any and all shares, interests,
participations or other equivalents (however designated) of such Person's
capital stock.
Cash Equivalent Investment means, at any time:
(a) any evidence of Debt, maturing not more than one year after such
time, issued or guaranteed by the United States Government;
(b) securities issued or fully guaranteed or insured by the government
of a country which is a member of the Organization for Economic Cooperation and
Development or any agency thereof having maturities of six months or less form
the date of acquisition;
(c) commercial paper, Euro-commercial paper and any other marketable
securities, in each case maturing not more than one year from the date of
issue, which is issued by
(i) a corporation (except an Affiliate) after the relevant date of
determination rated at least A-1 by S&P or P-1 by ▇▇▇▇▇'▇, at the time of
investment, or
(ii) any Lender (or its holding company);
(d) any certificate of deposit or bankers' acceptance or eurocurrency
time deposit, maturing not more than one year after the date of issue, which is
issued by either
(i) a financial institution authorized to issue such investments whose
short-term debt securities are rated at least A-1 by S&P or P-1 by Mood's at
the time of investment, or
(ii) any Lender;
(e) any repurchase agreement with a term of one year or less which
(i) is entered into with
(A) any Lender, or
(B) any other commercial banking institution of the stature referred
to in clause (c)(i),
(ii) is secured by a fully perfected Lien on any obligation of the
type described in any of clauses (a) through (c), and
(iii) has a market value at the time such repurchase agreement is
entered into of not less than 100% of the repurchase obligation of such Lender
(or other commercial banking institution) thereunder;
(f) investments in money market funds that invest solely in Cash
Equivalent Investments described in clauses (a) through (d); or
(g) investments in short-term asset management accounts offered by any
Lender for the purpose of investing
16
in loans to any corporation (other than an Affiliate) organized under the laws
of any state of the United States or of the District of Columbia and rated at
least A-1 by S&P or P-1 by ▇▇▇▇▇'▇.
Change in Control means the occurrence of any of the following after
the Amendment Effective Date:
(a) there is a report filed on Schedule 13D, 14D-1 or 14D- 1F (or any
successor schedule, form or report) pursuant to the Exchange Act, disclosing
that any person (for purposes of this definition, as the term "person" is used
in Section 13(d)(3) or Section 14(d)(2) of the Exchange Act or any successor
provision to either of the foregoing), other than any person consisting solely
of ▇▇▇▇▇▇ ▇. ▇▇▇▇▇ (or his heirs, executors or legal representatives) and his
Affiliates, has become the beneficial owner (as the term "beneficial owner" is
defined under Rule 13d-3 or any successor rule or regulation promulgated under
the Exchange Act) of Voting Stock representing 50% or more of the total voting
power attached to all Voting Stock of ▇▇▇▇▇▇▇▇▇ Inc. or ▇▇▇▇▇▇▇▇▇ International
then outstanding; provided, however, that a person shall not be deemed to be
the beneficial owner of, or to own beneficially, (i) any securities tendered
pursuant to a tender or exchange offer made by or on behalf of such person or
any of such person's Affiliates until such tendered securities are accepted for
purchase or exchange thereunder, or (ii) any securities if such beneficial
ownership (A) arises solely as a result of a revocable proxy delivered in
response to a proxy or consent solicitation made pursuant to applicable law,
and (B) is not also then reportable on Schedule 13D (or any successor schedule)
under the Exchange Act;
(b) there is a report filed or required to be filed with any securities
commission or securities regulatory authority in Canada, disclosing that any
offeror (as the term "offeror" is defined in Section 89(1) of Securities Act
(Ontario) for the purpose of Section 101 of such Securities Act or any
successor provision of the foregoing) other than any person consisting solely
of ▇▇▇▇▇▇ ▇. ▇▇▇▇▇ (or his heirs, executors or legal representatives) and his
Affiliates, has acquired beneficial ownership (within the meaning of the
Securities Act (Ontario)) of, or the power to exercise control or direction
over, or securities convertible into, any voting or equity shares of ▇▇▇▇▇▇▇▇▇
Inc. that together with such offeror's securities (as the term "offeror's
securities" is defined in Section 89(1) of the Securities Act (Ontario) or any
successor provision thereto in relation to the voting or equity shares of
▇▇▇▇▇▇▇▇▇ Inc.) would constitute Voting Stock of ▇▇▇▇▇▇▇▇▇ Inc. representing
50% or more of the total voting power attached to all Voting Stock of ▇▇▇▇▇▇▇▇▇
Inc. then outstanding;
(c) ▇▇▇▇▇▇▇▇▇ International shall cease to own, directly or indirectly,
100% of the Voting Stock of the Company, the U.K. Borrower (other than (x)
prior to the Redemption Date, the DTH Preference Shares and the FDTH Preference
Shares owned by third parties and Argsub as of the Amendment Effective Date and
(y) any New Preference Shares issued pursuant to the Purchase Option) or Canada
Holdings;
(d) ▇▇▇▇▇▇▇▇▇ International shall cease to own, directly or indirectly,
50% of the Voting Stock and 100% of the non-Voting Stock of the Canadian
Borrower or ▇▇▇▇▇▇▇▇▇ Inc. shall cease to own, directly or indirectly, 50% of
the Voting Stock of the Canadian Borrower; or
(e) ▇▇▇▇▇▇ ▇. ▇▇▇▇▇ (or his heirs, executors and legal representatives)
and his Affiliates cease to beneficially own and control the voting of,
directly or indirectly, Voting Stock of ▇▇▇▇▇▇▇▇▇ International representing a
greater percentage of the total voting power attached to the Voting Stock of
▇▇▇▇▇▇▇▇▇ International than the percentage beneficially owned and controlled,
directly or indirectly, by any other single
17
shareholder of ▇▇▇▇▇▇▇▇▇ International together with its Affiliates.
Closing Price means with respect to a Common Share of Southam, the
closing price per share of Common Shares of Southam on such day as reported by
The Toronto Stock Exchange.
Code means the Internal Revenue Code of 1986, as amended.
Collateral means, collectively, all of the property and assets that are
from time to time subject to the Collateral Documents.
Collateral Document means each Security Agreement, each Pledge
Agreement, each Subsidiary Note, each Subsidiary Security Agreement, and any
other document executed from time to time pursuant to which a Lien is granted
in favor of the Administrative Agent to secure the obligations of any Borrower
under the Loan Documents or the obligations of any other Obligor under any Loan
Document to which it is party, including, without limitation, any documents
executed pursuant to Section 10.19, 10.27 or 10.28.
Commitment Termination Date means March 15, 2004 or such other date on
which the Commitments shall terminate pursuant to Section 12.
Commitments means the Tranche A Commitment, the Tranche B Commitment,
the Tranche C Commitment, and the Tranche D Commitment.
Company - see the Preamble.
Company Pledge Agreement - see Section 11.1.6.
Company Security Agreement - see Section 11.1.7.
Computation Period means, for each Fiscal Quarter, the four consecutive
Fiscal Quarters ending on the last day of such Fiscal Quarter.
Consolidated Net Income (Loss) of the Company and the Restricted
Subsidiaries in the Financial Group means, for any period, the consolidated net
income (or loss (and treating loss as a negative number)) of the Company and
the Restricted Subsidiaries in the Financial Group for such period as
determined in accordance with GAAP, adjusted by excluding, without duplication,
to the extent included in calculating such Consolidated Net Income (or Loss),
(a) all extraordinary gains and losses, (b) the portion of consolidated net
income (or loss) of the Company and such Restricted Subsidiaries allocable to
Investments in unconsolidated Persons (other than Unrestricted Subsidiaries) to
the extent that cash dividends or distributions have not actually been received
by such Person or one of its consolidated Restricted Subsidiaries, (c) the
portion of consolidated net income (or loss) of the Company and such Restricted
Subsidiaries allocable to the Company's Unrestricted Subsidiaries (or to
payments received therefrom), (d) net income (or loss) of a Person combined
with the Company or any of its Subsidiaries on a "pooling of interests" basis
attributable to any period prior to the date of combination, (e) any gain or
loss, net of taxes, realized upon the termination of any employee pension
benefit plan, (f) aggregate net gains and losses (less all fees and expenses
relating thereto) in respect of dispositions of assets (including without
limitation sales of shares of Unrestricted Subsidiaries or unconsolidated
Persons and non-cash writeoffs of assets (provided that there are no continuing
cash expenses related to such write-offs)) other than in the ordinary course of
business, (g) any income, gain or loss resulting from the issuance, sale or
redemption of Argsub Preference Shares, (h) the net income of any Restricted
Subsidiary in the Financial Group to the extent that the declaration of
dividends or similar distributions by that Restricted Subsidiary of that income
is not at the time
18
permitted, directly or indirectly, by operation of the terms of its charter or
any agreement, instrument, judgment, decree, order, statute, rule or
governmental regulations applicable to that Restricted Subsidiary or its
stockholders other than this Agreement; provided, however, that the foregoing
shall not apply to the net income of AP-91 relating to the business of AP-91 as
conducted as of the Amendment Effective Date on account of restrictions on
AP-91 in the AP-91 Senior Notes, (i) any restoration to income of any
contingency reserve, except to the extent that provision for such reserve was
made out of income accrued at any time following the date of this Agreement,
(j) any net gain from the collection of proceeds of life insurance policies,
(k) any gain arising from the acquisition of any securities, or the
extinguishment, under GAAP, of any Debt of the Company or one of its Restricted
Subsidiaries in the Financial Group, (l) aggregate net gains or losses relating
to foreign currency transactions or translations or (m) redundancy costs
relating to the elimination of jobs provided that the amount of such expenses
are certified by the Company's independent accountants.
Contributed Cash Flow means on any date of any assets sold or proposed
to be sold (or deemed disposed of) in any Asset Sale, or of any assets
consisting of Traded Newspaper Assets or Traded- For Newspaper Assets included
or proposed to be included in any Asset Swap, the Operating Cash Flow generated
by such assets for the period of four Fiscal Quarters ended on or (if such date
shall not be the last day of a Fiscal Quarter) most recently prior to such
date.
Credit Extension means making any Loan, issuing any Letter of Credit,
extending the stated expiry date of any existing Letter of Credit, or creating
any Acceptance, as the case may be.
Debt of any Person means, without duplication, (a) all indebtedness of
such Person for borrowed money (including Intercompany Debt and the FDTH Loan
Notes), whether or not evidenced by bonds, debentures, notes or similar
instruments, (b) all obligations of such Person as lessee under Capital Leases
which have been recorded as liabilities on a balance sheet of such Person, (c)
all obligations of such Person to pay the deferred purchase price of property
or services (other than current accounts payable in the ordinary course of
business), (d) all indebtedness secured by a Lien on the property of such
Person, whether or not such indebtedness shall have been assumed by such Person
(it being understood that if such Person has not assumed or otherwise become
personally liable for any such indebtedness, the amount of the Debt of such
Person in connection therewith shall be limited to the lesser of the face
amount of such indebtedness or the fair market value of all property of such
Person securing such indebtedness), (e) (i) all obligations, contingent or
otherwise, with respect to the face amount of all letters of credit (whether or
not drawn) and bankers' acceptances issued for the account of such Person
(including, without limitation, the Letters of Credit) and (ii) in connection
with any agreement to purchase, redeem, exchange, convert or otherwise acquire
for value any Capital Stock of such Person, or any warrants, rights or options
to acquire such Capital Stock now or hereafter outstanding, (f) all liabilities
of such Person in respect of Hedging Agreements, (g) all Debt referred to in
clauses (a) through (d) above of other Persons and all dividends of other
Persons, the payment of which is secured by (or for which the holder of such
Debt has an existing right, contingent or otherwise, to be secured by) any Lien
(other than the Southam- Linked Debentures), upon or with respect to property
(including, without limitation, accounts and contract rights) owned by such
Person (excluding the Tax Indemnity Agreements), even though such Person has
not assumed or become liable for the payment of such Debt, (h) all Guarantee
Obligations of such Person, (i) Acquisition Debt, (j) Synthetic Leases, (k) all
Redeemable Capital Stock valued at the greater of its voluntary or involuntary
maximum fixed repurchase price plus accrued and unpaid dividends, (l) any other
obligation, liability or
19
instrument which is treated as indebtedness under GAAP and (m) any amendment,
supplement, modification, deferral, renewal, extension, refunding or
refinancing or any Debt of the types referred to in clauses (a) through (l)
above; provided, however, that this definition shall not apply to Debt
represented by the Southam-Linked Debentures which are secured, directly or
indirectly, by shares of Southam. For purposes hereof, the "maximum fixed
repurchase price" of any Redeemable Capital Stock which does not have a fixed
repurchase price shall be calculated in accordance with the terms of such
Redeemable Capital Stock as if such Redeemable Capital Stock were purchased on
any date on which Debt shall be required to be determined pursuant to this
Agreement, and if such price is based upon, or measured by, the fair market
value of such Redeemable Capital Stock, such fair market value to be determined
in good faith by the Board of Directors of such Person. Debt shall not include
the obligations of any Person related to deferred taxes or severance
obligations of any nature payable by such Person.
Debt/Equity Proceeds means the aggregate Net Cash Proceeds from the
issuance of any equity or Debt by ▇▇▇▇▇▇▇▇▇ International or any Subsidiary of
▇▇▇▇▇▇▇▇▇ International (other than a Restricted Subsidiary) formed on or after
the Amendment Effective Date.
Determination Date - see Section 2.13.
DHBV means Deedtask Holding BV (in liquidation), a Netherlands company.
Dollar and the sign "$" mean lawful money of the United States of
America.
Dollar Equivalent means, (i) with respect to Dollars or an amount
denominated in Dollars, such amount, and (ii) with respect to any amount
denominated in Alternate Currencies, at any time for the determination thereof,
the equivalent amount of Dollars obtained by converting such amount denominated
in Alternate Currencies involved in such computation into Dollars at the spot
rate as quoted by the Administrative Agent for the purchase of Dollars with
Alternate Currencies through the FX Trading Office at approximately 12:00 p.m.
(New York City time) two Business Days prior to the date on which such
computation is made.
Dormant Subsidiaries means Restricted Subsidiaries of the U.K.
Borrower, the Canadian Borrower or the Acquisition Borrower which are inactive
or have minimal assets as certified by such Borrower to the Administrative
Agent.
Draft - see Section 3.1(a).
DTH means DT Holdings Limited, a limited liability company incorporated
under the laws of England and Wales.
DTH Preference Shares means (a) the 2,540,000 8.086% Cumulative
Redeemable Preference Shares, Series 1 and (b) the 1,100,000 7.127% Cumulative
Redeemable Preference Shares, Series 2, each issued by DTH.
DTHBV means Daily Telegraph Holdings BV (in liquidation), a Netherlands
company.
Employee Benefit Plan means any employee benefit plan, pension plan or
welfare plan, other than a "multiemployer plan" as such term is defined in
Section 3(37) of ERISA, which is maintained or contributed to for the benefit
of the employees of the Company or any of its Subsidiaries which, under
applicable law, (a) is required to be funded through a trust or similar funding
vehicle or (b) creates or could result in a Lien on any property of the Company
or any of its Subsidiaries.
Environmental Laws means any national, federal, state or
20
local law, statute, ordinance, regulation, rule, order, consent decree, permit,
settlement agreement, judicial or administrative decision, injunction or
requirement of any governmental authority which relates to or otherwise imposes
liability or standards of conduct concerning discharges, releases or threatened
releases of noises, odors or any Hazardous Materials into ambient air, ground
or surface water or land, or otherwise relating to the manufacture, processing,
generation, distribution, use, treatment, storage, disposal, cleanup, transport
or handling of Regulated Materials, including, without limitation, the Resource
Conservation and Recovery Act, the Comprehensive Environmental Response,
Compensation and Liability Act, any so-called "Superfund" or "Superlien" law,
the Toxic Substances Control Act, the Environmental Protection Act (Canada),
the Transportation of Dangerous Goods Act (Canada), the Hazardous Products Act
(Canada), the Environmental Protection Act (Ontario), the Water Resources Act
(Ontario), the Gasoline Handling Act (Ontario), and any other applicable
federal, state, provincial, or local statute, law, ordinance, code, rule,
regulation, order, decree or other officially-promulgated and legally binding
policy regulating, relating to, or imposing liability or standards of conduct
(including, but not limited to, permit requirements and emission or effluent
restrictions) concerning any Regulated Materials, as now or at any time
hereafter in effect applicable to the Company or any of its Restricted
Subsidiaries.
ERISA means the Employee Retirement Income Security Act of 1974, as
amended, and any successor statute of similar import, together with the
regulations thereunder, in each case as in effect from time to time. References
to sections of ERISA also refer to any successor sections.
Eurocurrency Loan means any Tranche A or Tranche B Loan which bears
interest at a rate determined by reference to the Eurocurrency Rate (Reserve
Adjusted).
Eurocurrency Rate means, with respect to any Eurocurrency Loan for any
Interest Period,
(a) with respect to Eurocurrency Loans denominated in Dollars, the rate of
interest (rounded, if necessary, to the next higher 1/16 of 1%) of the rate per
annum at which Dollar deposits in immediately available funds are offered by
the Administrative Agent's Lending Office in the London interbank market at or
about 11:00 a.m. (London time), two Business Days prior to the first day of
such Interest Period, in the approximate amount of TD-Texas' relevant
Eurocurrency Loan and having a maturity approximately equal to such Interest
Period; and
(b) with respect to Eurocurrency Loans denominated in an Alternate Currency,
the rate of interest (rounded, if necessary, to the next higher 1/16 of one
percent) equal to the rate at which deposits in the relevant Alternate Currency
immediately available funds are offered by the Administrative Agent's Lending
Office in the London interbank market at or about 11:00 a.m. (London time) two
Business Days' prior to the beginning of such Interest Period in the
approximate amount of TD-Texas' relevant Eurocurrency Loan and having a
maturity approximately equal to such Interest Period.
Eurocurrency Rate (Reserve Adjusted) means, relative to any Loan to be
made, continued or maintained as, or converted into, a Eurocurrency Rate Loan,
for any Interest Period, a rate per annum (rounded upwards, if necessary, to
the nearest 1/16 of 1%) determined pursuant to the following formula:
Eurocurrency Rate = Eurocurrency Rate
(Reserve Adjusted) 1.00 - Eurocurrency Reserve
Percentage
Eurocurrency Reserve Percentage means, with respect to any
21
Eurocurrency Loan denominated in the applicable currency for any Interest
Period, a percentage (expressed as a decimal) equal to the daily average during
such Interest Period of the percentage in effect on each day of such Interest
Period, as prescribed by the Board of Governors of the Federal Reserve System
(or any successor), for determining the aggregate maximum reserve requirements
applicable to "Eurocurrency Liabilities" pursuant to Regulation D or any other
then applicable regulation of such Board of Governors which prescribes reserve
requirements applicable to "Eurocurrency Liabilities" as presently defined in
Regulation D.
Event of Default means any of the events described in Section 12.1.
Excess Cash Flow means the sum of (a) (i) Operating Cash Flow for such
Fiscal Quarter plus (ii) Management Fees, to the extent deducted in calculating
Operating Cash Flow for such Fiscal Quarter minus (b) (i) Fixed Charges for
such Fiscal Quarter plus (ii) Additional Restricted Payments, to the extent
actually made during such Fiscal Quarter minus (c) Restricted Payments made
under Section 10.9(a)(1)(A) made during such Fiscal Quarter plus (d) any
Management Fees paid by Southam to the Company during such Fiscal Quarter.
Exchange Act means the Securities Exchange Act of 1934, as amended.
Excluded Taxes - see definition of Taxes.
Exemption Agreement - see Section 7.6.
Exemption Representation - see Section 7.6.
Existing Credit Agreement - see the Recitals.
Existing Credit Extensions means the loans and letters of credit
outstanding under the Existing Credit Agreement on the Amendment Effective
Date.
Existing Letters of Credit means the letters of credit listed on
Schedule 2.6.
Extraordinary Cash Dividends means in respect of the Southam Interests:
(a) a cash dividend in respect of a particular calendar year
representing the excess, if any, of (i) the aggregate of all cash dividends
declared and paid on such securities during the calendar year over (ii) the
greatest of (x) 200% of the aggregate of all cash dividends declared and paid
on such securities during the immediately preceding calendar year, (y) 300% of
the average of the aggregate of all cash dividends declared and paid on such
securities during the immediately preceding three calendar years; and (z) 100%
of the aggregate consolidated net income of the issuer of such securities,
before extraordinary items, for its immediately preceding fiscal year; and
(b) any cash dividend declared by Southam on its common shares which
the directors of Southam by resolution determine to be extraordinary, taking
into account the amount of the dividend, the effect of the dividend on the
market value of such securities after payment thereof, the form of payment, the
financial position of Southam, economic conditions, business practices and such
other factors as the directors of Southam considered to be relevant.
FDTH means First DT Holdings Limited, a limited liability company
incorporated under the laws of England and Wales.
22
FDTH Credit Agreement means that certain Credit Agreement dated as of
May 30, 1996, as amended, among FDTH, the U.K. Borrower, Toronto-Dominion as
administrative agent and Toronto- Dominion as issuing bank.
FDTH Loan Note Deed Poll means the Deed Poll dated August 8, 1996, made
between FDTH and The Toronto-Dominion Bank, London Branch, under which the FDTH
Loan Notes were constituted.
FDTH Loan Note Guaranty means the guaranty issued by The
Toronto-Dominion Bank, London Branch on the terms of Clause 6 of the FDTH Loan
Note Deed Poll in connection with the FDTH Loan Notes.
FDTH Loan Notes has the meaning ascribed thereto in the Scheme
Documents.
FDTH Preference Shares means (a) the 200 Floating Rate Cumulative
Redeemable Retractable Preference Shares, Series A, Cdn $500,000 each (b) the
200 Floating Rate Cumulative Redeemable Retractable Preference Shares, Series B
Cdn $500,000 each, (c) the 165,000,000 Second Preference Shares, (d) the
23,801,420 Third Preference Shares, and (e) the 600 Fourth Preference Shares
issued by FDTH.
Federal Funds Rate means, for any period, a fluctuating interest rate
per annum equal for each day during such period to (a) 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 preceding Business Day) by the
Federal Reserve Bank of New York; or (b) if such rate is not so published for
any day which is a Business Day, the average of the quotations at approximately
2:00 p.m. (New York City time) for such day on such transactions received by
the Administrative Agent from three federal funds brokers of recognized
standing selected by it.
Financial Group means the Company and the Restricted Subsidiaries other
than Southam and its Subsidiaries.
Fiscal Quarter means a fiscal quarter of a Fiscal Year.
Fiscal Year means the fiscal year of the Company and its Restricted
Subsidiaries, which period shall be the 12-month period ending on December 31
of each year. References to a Fiscal Year with a number corresponding to any
calendar year (e.g., "Fiscal Year 1996") refer to the Fiscal Year ending on
December 31 of such calendar year.
Fixed Charge Coverage Ratio means, as of the last day of any
Computation Period, the ratio of (a) (i) Operating Cash Flow of the Financial
Group for such Computation Period plus (ii) Management Fees, to the extent
deducted in calculating Operating Cash Flow to (b) Fixed Charges of the
Financial Group for such Computation Period.
Fixed Charges means the sum, without duplication, of:
(a)Total Interest Expense, to the extent actually paid during such
Computation Period;
plus
(b)all scheduled principal payments on Funded Debt (other than obligations
under the Loan Documents or the AP-91 Senior Notes), including any Synthetic
Lease relating to the Sun-Times Plant, during such Computation Period,
plus
(c)all principal payments required to be made in connection with Commitment
reductions under Section
23
6.1.2(f) during such Computation Period,
plus
(d)all Federal, state, local and foreign income taxes (actually paid) of the
Company and its Restricted Subsidiaries deducted in determining Consolidated
Net Income (Loss) during such Computation Period,
plus
(e)Restricted Payments actually made pursuant to Section 10.9(a)(1)(B), (C) and
(D), Additional Restricted Payments and Permitted Payments actually made
pursuant to Sections 10.9(b)(i), 10.9(b)(ii) and 10.9(b)(v) during such
Computation Period,
plus
(f)Capital Expenditures (excluding Capital Expenditures relating to the
Sun-Times Plant to the extent such Capital Expenditures are included in Funded
Debt) during such Computation Period.
plus
(g)Additional Investments during such Computation Period.
Floating Rate Loan means any Tranche A, Tranche C or Tranche D Loan
which bears interest at or by reference to the Alternate Base Rate or the
Canadian Prime Rate.
Funded Debt means the sum of (a) all Debt of the Company and its
Restricted Subsidiaries pursuant to clauses (a), (b), (d), (e)(i), (g), (h),
(i) and (j) of the definition of Debt, minus (b) Debt of the Company to
Restricted Subsidiaries in the Financial Group and Debt of Restricted
Subsidiaries in the Financial Group to the Company or to other Restricted
Subsidiaries.
FX Trading Office means the foreign exchange trading center of the
Administrative Agent located in Houston, Texas, or whatever other office the
Administrative Agent may from time to time designate.
GAAP means generally accepted accounting principles in the United
States, as in effect from time to time.
Group - see Section 2.3.
Guarantee Obligation means any agreement, undertaking or arrangement by
which any Person guarantees or endorses (by direct or indirect agreement,
contingent or otherwise, to provide funds for payment, to supply funds to or
otherwise to invest in a debtor, or otherwise to assure a creditor against
loss) any indebtedness, obligation or other liability of any other Person
(other than by endorsements of instruments in the course of collection), or
guarantees the payment of dividends or other distributions upon the shares of
any other Person. The amount of any Person's obligation under any Guarantee
Obligation shall (subject to any limitation set forth therein) be deemed to be
the outstanding principal amount of the debt, obligation or other liability
guaranteed thereby.
Guaranteed Obligations - see Section 15.1.
Guaranties means the ▇▇▇▇▇▇▇▇▇ International Guaranty, the U.S.
Subsidiary Guaranty, the U.K. Subsidiary Guaranty and the Canadian Guaranty.
Hedging Agreement means any interest rate, currency or commodity swap
agreement, interest rate cap agreement, interest rate collar agreement, or
other agreement or arrangement designed
24
to protect a Person against fluctuations in interest rates, currency exchange
rates or commodity prices.
▇▇▇▇▇▇▇▇▇ Inc. means ▇▇▇▇▇▇▇▇▇ Inc., a corporation continued under the
laws of Canada.
▇▇▇▇▇▇▇▇▇ International means ▇▇▇▇▇▇▇▇▇ International Inc., a Delaware
corporation.
▇▇▇▇▇▇▇▇▇ International Guaranty - see Section 11.1.5.
▇▇▇▇▇▇▇▇▇ International Pledge Agreement - see Section 11.1.6.
▇▇▇▇▇▇▇▇▇ PRIDES means the shares of Series 2 non-voting Preferred
Stock of ▇▇▇▇▇▇▇▇▇ International to be issued to ▇▇▇▇▇▇▇▇▇ Inc. or its
Subsidiaries on the Canadian Acquisition Date and the mandatorily convertible
preferred stock of ▇▇▇▇▇▇▇▇▇ International similar to the PRIDES having a face
value of approximately $90 million to be issued in exchange for such Series 2
Preferred Stock.
HTHH means HTH Holdings Inc., a Delaware corporation.
HTH/FDTH Share Exchange Agreement means the share exchange agreement
dated as of July 19, 1995 between ▇▇▇▇▇▇▇▇▇ Inc. and FDTH as in effect on the
Amendment Effective Date.
Indemnified Liability - see Section 14.13.
Individual Commitment means, with respect to any Lender, the amount of
such Lender's Percentage times the Total Commitment, it being understood that
each Lender's Individual Commitment shall be the total amount such Lender is
obligated to extend to all of the Borrowers notwithstanding that the Tranche A,
Tranche B, Tranche C and Tranche D Commitments of such Lender may exceed its
Individual Commitment. The initial amount of the Individual Commitment of each
Lender is set forth in Schedule 1.1.
Individual Outstanding Amount means, with respect to any Lender, the
sum of
(a) the Dollar Equivalent of the aggregate principal amount of such
Lender's Loans outstanding on such date
plus
(b) if such Lender is a Canadian Lender, the Dollar Equivalent of the
aggregate face amount of such Lender's Acceptances outstanding on such date
plus
(c) the Dollar Equivalent of the aggregate amount of such Lender's
participation in the Stated Amount of outstanding Letters of Credit
minus
(d) if such Lender is a Canadian Lender, the Dollar Equivalent of the
aggregate of such Lender's Acceptance Collateral Amount.
Intercompany Debt means all Debt owed by the Company and/or any
Restricted Subsidiary in the Financial Group to ▇▇▇▇▇▇▇▇▇ Inc. or ▇▇▇▇▇▇▇▇▇
International, or any other Affiliate other than the Company or any Restricted
Subsidiary in the Financial Group.
Interest Coverage Ratio means, as of the last day of any Computation
Period, the ratio of (a) Operating Cash Flow for such Computation Period to (b)
Total Interest Expense for such Computation Period.
25
Interest Period - see Section 5.3.
Investment means, with respect to any Person:
(a) any loan or advance made by such Person to any other Person; and
(b) any ownership or similar interest held by such Person in any other
Person.
The amount of any Investment shall be the original principal or capital
amount thereof less all returns of principal or equity thereon (and without
adjustment by reason of the financial condition of such other Person) and
shall, if made by the transfer or exchange of property other than cash, be
deemed to have been made in an original principal or capital amount equal to
the fair market value of such property.
Israeli Subsidiary means each of JPEH, JPPL and Palestine Post, and any
Subsidiaries thereof.
Issuing Bank means Toronto-Dominion in its capacity as issuer of
Letters of Credit.
Jerusalem Post Note means the Capital Note from the Palestine Post to
the Company (as assignee of ▇▇▇▇▇▇▇▇▇ International) dated December 31, 1995 in
the original principal amount of 44,978,242 New Israeli Shekels.
JPEH means Jerusalem Post Employees Holding (1983) Ltd., an Israeli
corporation.
JPPL means Jerusalem Post Publications Limited, an Israeli corporation.
Lender - see the Preamble.
Lender Party - see Section 14.13.
Lending Office means (a) with respect to any Lender, the office or
offices of such Lender which shall be making or maintaining the Tranche A and
Tranche B Eurocurrency Loans of such Lender hereunder or such other office or
offices at which such Lender determines its Eurocurrency Rate, (b) with respect
to any Canadian Lender, the office or offices of such Canadian Lender which
shall be making or maintaining the Tranche C and Tranche D Credit Extensions of
such Canadian Lender hereunder, and (c) with respect to the Administrative
Agent, the office or offices of the Administrative Agent which shall receive
payments or disburse borrowings in Dollars and Alternate Currencies as the
Administrative Agent designates to the Lenders and the Company from time to
time. A Lending Office may be either a domestic or foreign office provided that
with respect to Tranche C and Tranche D Credit Extensions, prior to
acceleration of the Credit Extensions pursuant to Section 12.2, the Lending
Office must be located in Canada.
Letter of Credit means either (a) a standby letter of credit having
terms and provisions which are permitted by this Agreement and which otherwise
are reasonably satisfactory to the Issuing Bank or (b) the FDTH Loan Note
Guaranty.
Letter of Credit Application means a letter of credit application in
the form then used by the Issuing Bank for standby letters of credit (with
appropriate adjustments to indicate that any letter of credit issued thereunder
is to be issued pursuant to, and subject to the terms and conditions of, this
Agreement).
Lien means, when used with respect to any Person, any interest of any
other Person in any real or personal property, asset or other right owned or
being purchased or acquired by such Person which secures payment or performance
of any obligation and
26
shall include any mortgage, lien, encumbrance, charge or other security
interest of any kind, whether arising by contract, as a matter of law, by
judicial process or otherwise.
Limited means 504468 N.B. Inc., a company organized under the laws of
New Brunswick.
Limited/Eastern Pledge Agreement - see Section 11.1.6.
Loan Documents means this Agreement, the Drafts, the Acceptances, the
Guaranties, the Letter of Credit Applications, the Assumption Agreement, the
Subordination Agreements and the Collateral Documents.
Loans means each of the Tranche A Loans, the Tranche B Loans, the
Tranche C Loans, and the Tranche D Loans.
Local Time means (a) with respect to Dollar Loans, New York City time;
(b) with respect to Tranche C and Tranche D Credit Extensions and Tranche A
Loans denominated in Canadian Dollars, Toronto time; and (c) with respect to
Loans denominated in Sterling, London time.
Management Fees means any management, consulting, non- competition,
advisory or other similar fees or payments, or any interest thereon, or
corporate expense reimbursements payable by the Company or any of its
Restricted Subsidiaries to ▇▇▇▇▇▇▇▇▇ Inc., ▇▇▇▇▇▇▇▇▇ International or any other
Affiliate other than the Company or any Restricted Subsidiary.
Margin Stock means any "margin stock" as defined in any of Regulations
G, T, U and X of the Board of Governors of the Federal Reserve System.
Material Adverse Effect means a material adverse effect on (a) the
condition (financial or otherwise), operations, business, prospects, properties
or assets of (i) the Company and its Restricted Subsidiaries organized in the
United States and the Israeli Subsidiaries, taken as a whole, (ii) the U.K.
Borrower and its Restricted Subsidiaries, taken as a whole, (iii) the Canadian
Borrower and its Restricted Subsidiaries, taken as a whole, (iv) the
Acquisition Borrower and its Restricted Subsidiaries, taken as a whole, or (v)
the Company and the Restricted Subsidiaries, taken as a whole; or (b) the
ability of the Company and the Restricted Subsidiaries which are Obligors taken
as a whole to timely and fully perform any of their payment or other material
obligations under this Agreement or any other Loan Document to which they are a
party.
Media Business means the business of the broadcast of radio or
television broadcasting, cable and satellite programs (including national,
regional or local radio, television, cable and satellite programs).
Moody's means ▇▇▇▇▇'▇ Investors Service, Inc. or any successor rating
agency.
Negative Trade Differential means with respect to any Asset Swap the
amount, if any, by which the Contributed Cash Flow of the Traded Newspaper
Assets included in such Asset Swap (as determined in good faith by the Board of
Directors of the Company) as of the date of such Asset Swap exceeds the
Contributed Cash Flow of the Traded-For Newspaper Assets included in such Asset
Swap (as so determined).
Net Cash Proceeds means (a) with respect to any Asset Sale by any
Person, the proceeds thereof in the form of cash or cash equivalents including
payments of principal and interest in respect of deferred payment obligations
when received in the form of, or stock or other assets when disposed of for,
cash or cash equivalents (except to the extent that such obligations are
financed or sold with recourse to the Company or any Restricted
27
Subsidiary) net of (i) brokerage commissions and other reasonable fees and
expenses (including fees and expenses of counsel and investment bankers)
related to such Asset Sale, (ii) provisions for all taxes payable as a result
of such Asset Sale, (iii) payments made to retire indebtedness where payment of
such indebtedness is secured by the assets or properties the subject of such
Asset Sale, (iv) amounts required to be paid to any Person (other than the
Company or any Restricted Subsidiary in the Financial Group) owning a
beneficial interest in the assets subject to the Asset Sale and (v) appropriate
amounts to be provided by the Company or any Restricted Subsidiary in the
Financial Group, as the case may be, as a reserve, in accordance with GAAP,
against any liabilities associated with such Asset Sale and retained by the
Company or any such Restricted Subsidiary, as the case may be, after such Asset
Sale, including, without limitation, pension and other post-employment benefit
liabilities, liabilities related to environmental matters and liabilities under
any indemnification obligations associated with such Asset Sale, all as
reflected in an Officers' Certificate delivered to the Administrative Agent,
(b) with respect to any issuance or sale of Capital Stock or options, warrants
or rights to purchase Capital Stock, or debt securities or Capital Stock that
have been converted into or exchanged for Capital Stock, the proceeds of such
issuance or sale in the form of cash or cash equivalents, including payments in
respect of deferred payment obligations when received in the form of, or stock
or other assets when disposed of for, cash or cash equivalents (except to the
extent that such obligations are financed or sold with recourse to the Company
or any Restricted Subsidiary), net of attorneys' fees, accountants' fees and
brokerage, consultation, underwriting and other fees and expenses actually
incurred in connection with such issuance or sale and net of taxes paid or
payable as a result thereof, and (c) with respect to the issuance of Debt the
proceeds of such issuance net of attorneys' fees, accountants' fees and
brokerage, consultation, underwriting and other fees and expenses actually
incurred in connection with such issuance.
New Preference Shares has the meaning set out in the Scheme Documents.
Newspaper Business means the business of publishing and distributing
(including distributing by electronic means) newspapers, magazines and other
paid or free publications having national, regional, local or targeted markets,
including publications having limited or no news or editorial content such as
shoppers or other "total market coverage" publications and similar
publications.
1996 Senior Subordinated Indenture means that certain Indenture dated
as of February 1, 1996, as amended by First Supplemental Indenture dated
February 27, 1997, between the Company and Fleet National Bank, as Trustee,
relating to the 1996 Senior Subordinated Notes, as the same may hereafter be
amended, amended and restated, supplemented or otherwise modified in accordance
with the terms thereof and hereof and in effect.
1996 Senior Subordinated Notes means the 9 1/4% Senior Subordinated
Notes due February 1, 2006 of the Company issued under the Senior Subordinated
Indenture.
1997 Senior Indenture means that certain Senior Indenture dated as of
March 15, 1997 between the Company and Fleet National Bank, as Trustee,
relating to the 1997 Senior Notes, as the same may hereafter be amended,
amended and restated, supplemented or otherwise modified in accordance with the
terms thereof and hereof and in effect.
1997 Senior Notes means the 8 5/8% Senior Notes due March 15, 2005 of
the Company issued under the 1997 Senior Indenture.
1997 Senior Subordinated Indenture means that certain Senior
28
Subordinated Indenture dated March 15, 1997 between the Company and Fleet
National Bank, as Trustee, relating to the 1997 Senior Subordinated Notes, as
the same may hereafter be amended, amended and restated, supplemented or
otherwise modified in accordance with the terms thereof and hereof and in
effect.
1997 Senior Subordinated Notes means the 9 1/4% Senior Subordinated
Notes due March 15, 2007 of the Company issued under the 1997 Senior
Subordinated Indenture.
Non-Canadian Lender means any Lender other than a Canadian Lender.
Note Purchase Agreements has the meaning set forth under the definition
of AP-91 Senior Notes.
Obligations means all obligations of the Borrowers or any Obligors
under this Agreement and any other Loan Document.
Obligor means each Borrower, ▇▇▇▇▇▇▇▇▇ International and each other
Person (other than the Administrative Agent, any Lender or the Issuing Bank)
from time to time obligated under any Loan Document.
Occupational Safety and Health Law means the Occupational Safety and
Health Act of 1970 and any other federal, state, local or foreign statute, law,
ordinance, code, rule, regulation, order or decree regulating, relating to or
imposing liability or standards of conduct concerning employee health and/or
safety.
Operating Cash Flow means, as of the last day of any Fiscal Quarter,
the sum, without duplication, of:
(a) Consolidated Net Income (Loss) for the Computation Period,
plus
(b) the consolidated interest expense and other financing costs of the
Company and its Restricted Subsidiaries in the Financial Group deducted in
determining Consolidated Net Income (Loss) for such Computation Period,
plus
(c) all depreciation and amortization of assets (including goodwill and
other intangible assets) of the Company and its Restricted Subsidiaries in the
Financial Group deducted in determining Consolidated Net Income (Loss) for such
Computation Period,
plus
(d) all federal, state, local and foreign income taxes (whether paid or
deferred) of the Company and its Restricted Subsidiaries in the Financial Group
deducted in determining Consolidated Net Income (Loss) for such Computation
Period,
plus
(e) other non-cash expenses and all extraordinary and non-recurring
expenses (including all one-time, non- recurring transaction expenses
associated with the Senior Subordinated Notes, the Existing Credit Agreement or
the Scheme, to the extent such expenses are included in determining
Consolidated Net Income (Loss)) deducted in determining Consolidated Net Income
(Loss).
Option Tax Indemnity Agreements means (a) the Deed of Indemnity dated
May 31, 1996 between FDTH and the U.K. Borrower relating to tax indemnification
in connection with the Purchase
29
Option and (b) the letter agreement dated May 31, 1996 between FDTH and West
Ferry Printers Limited relating to tax indemnification in connection with the
options proposals made pursuant to the Scheme.
Organic Document means, relative to any Person, its certificate of
incorporation, its by-laws, its memorandum and articles of association, share
designations or similar organizational documents and all shareholder
agreements, voting trusts and similar arrangements applicable to any of its
authorized shares of capital stock.
Original Commitment means the amount of Debt permitted from time to
time with respect to the "New Bank Credit Facility" under clause (i) of the
definition of "Permitted Indebtedness" in each of the 1996 Senior Subordinated
Indenture, the 1997 Senior Subordinated Indenture and the 1997 Senior
Indenture.
Outstanding Percentage of any Lender means, as of any date, the
percentage which (a) such Lender's Individual Outstanding Amount, calculated as
of such date is of (b) the Total Outstanding Amount, calculated as of such
date.
Palestine Post means The Palestine Post Limited, an Israeli
corporation.
Participant - see Section 14.9.2.
PBGC means the Pension Benefit Guaranty Corporation and any entity
succeeding to any or all of its functions under ERISA.
Pension Plan means (a) a "pension plan", as such term is defined in
section 3(2) of ERISA, which is subject to title IV of ERISA (other than a
multiemployer plan as defined in section 4001(a)(3) of ERISA), and to which the
Company or any corporation, trade or business that is, along with the Company,
a member of a controlled group of corporations or a controlled group of trades
or businesses, as described in section 414 of the Internal Revenue Code or
section 4001 of ERISA, may have any liability, including any liability by
reason of having been a substantial employer within the meaning of section 4063
of ERISA at any time during the preceding five years or by reason of being
deemed to be a contributing sponsor under section 4069 of ERISA and (b) a
"pension plan", as such term is defined in the Pension Benefits Act (Ontario)
or under other applicable pension laws, and to which the Company or any
Subsidiary or any trade or business of any of them may have any actual,
contingent or potential liability at any time during the preceding five years.
Percentage means, relative to any Lender, the percentage which (a) the
amount of such Lender's Individual Commitment is of (b) the aggregate amount of
the Total Commitments of all Lenders. The initial Percentage for each Lender is
set forth opposite such Lender's name on Schedule 1.1.
Permitted Payments - see Section 10.9(b).
Person means any natural person, corporation, partnership, limited
liability company, trust, association, governmental authority or unit, or any
other entity, whether acting in an individual, fiduciary or other capacity.
Pledge Agreements means those pledge agreements described in Section
11.1.6 and each Canadian Pledge Agreement.
Preference Share Arrangements means the (a) agreement dated March 18,
1997 among DTH, FDTH and Tory ▇▇▇▇ ▇▇▇▇▇▇▇▇▇▇▇ & ▇▇▇▇▇▇▇▇▇▇ and the Direction
related thereto, dated March 18, 1997 executed by DTH and FDTH, (b) the
Dividend and Redemption Payment Agreement dated March 18, 1997 among Argsub,
FDTH and DTH, and (c) the Dividend and Redemption Payment Agreement dated March
18, 1997 among Argsub and FDTH.
30
Preferred Stock means, with respect to any Person, any Capital Stock of
any class or classes (however designated) which is preferred as to the payment
of dividends or distributions, or as to the distribution of assets upon any
voluntary or involuntary liquidation or dissolution of such Person, over the
Capital Stock of any other class in such Person.
Pricing Grid means the Pricing Grid set forth on Schedule 1.2.
PRIDES means the 20,700,000, 9_% preferred redeemable increased
dividend equity securities depository shares representing 9_% convertible
preferred stock issued by ▇▇▇▇▇▇▇▇▇ International on August 1, 1996.
Publishing/FDTH Exchange Agreement means the letter agreement dated
March 18, 1997, between the Company and FDTH relating to the exchange of stock
in the U.K. Borrower and the Canadian Borrower.
Purchase Agreements means (a) the Sterling Purchase Agreement, dated as
of the Canadian Acquisition Date among ▇▇▇▇▇▇▇▇▇ Inc., ▇▇▇▇▇▇▇▇▇ International
and the Canadian Borrower; (b) the Unimedia Class A Stock Purchase Agreement,
dated as of the Canadian Acquisition Date among ▇▇▇▇▇▇▇▇▇ Inc., Unimedia
Holding Company and ▇▇▇▇▇▇▇▇▇ International; and (c) the Unimedia Class B Stock
Purchase Agreement, dated as of the Canadian Acquisition Date among ▇▇▇▇▇▇▇▇▇
Inc., Unimedia Holding Company and ▇▇▇▇▇▇▇▇▇ International.
Purchase Option has the meaning set out in the Scheme Circular.
Qualified Capital Stock of any Person means any and all Capital Stock
of such Person other than Redeemable Capital Stock.
Rating Agency means S&P and ▇▇▇▇▇'▇.
Redeemable Capital Stock means any Capital Stock that, either by its
terms, by the terms of any security into which it is convertible or
exchangeable or otherwise, is, or upon the happening of an event or passage of
time would be, required to be redeemed prior to the Commitment Termination Date
or is redeemable at the option of the holder thereof at any time prior to the
Commitment Termination Date, or is convertible into or exchangeable for debt
securities at any time prior to the Commitment Termination Date at the option
of the holder thereof, provided, however, that Redeemable Capital Stock shall
not include any shares of APAC-90 Preferred Stock so long as such shares are
owned by the Company or one or more Restricted Subsidiaries and provided
further that Redeemable Capital Stock shall not include (a) any Redeemable
Capital Stock of the Company or any of its Restricted Subsidiaries so long as
such shares are owned by the Company or a Restricted Subsidiary or by ▇▇▇▇▇▇▇▇▇
International or one of its Affiliates (provided such shares are pledged to the
Administrative Agent), (b) the DTH Preference Shares and the FDTH Series A and
B Preferences Shares or (c) the Argsub Preference Shares.
Redemption Date means the date on which the FDTH Series A and B Shares
and the DTH Preference Shares have been redeemed and the Argsub Preference
Shares have been redeemed.
Regulated Materials means any toxic substance, hazardous substance,
hazardous material, hazardous chemical or hazardous waste defined or qualifying
as such in (or for the purposes of) any Environmental Law, or any pollutant or
contaminant, and shall include, but not be limited to, petroleum, including
crude oil or any fraction thereof which is liquid at standard conditions of
temperature or pressure (60 degrees fahrenheit and 14.7 pounds per square inch
absolute), any radioactive material, including, but not limited to, any source,
special nuclear or by-product
31
material as defined at 42 U.S.C. section 2011 et. seq., as amended from time to
time, polychlorinated biphenyls and asbestos in any form or condition.
Required Lenders means Lenders having an aggregate Percentage of more
than 66-2/3% but in any event not less than two Lenders.
Restricted Payments - see Section 10.9(a).
Restricted Subsidiary means, initially, each Subsidiary of the Company
existing on the date of this Agreement, other than DHBV and DTHBV, and any
other Subsidiary designated from time to time by the Board of Directors of the
Company as a "Restricted Subsidiary" in accordance with Section 10.26 of this
Agreement.
Scheduled Commitment Reduction Date - see Section 6.1.2.
Scheme means the acquisition in August, 1996 by FDTH of the publicly
held shares of the U.K. Borrower not owned by FDTH or any of its Affiliates
which was effected by way of a "Scheme of Arrangement" under Section 425 of the
Companies Act of 1985.
Scheme Circular means the documents despatched, inter alia, to the U.K.
Borrower's shareholders describing the Scheme and including the explanatory
statement required by Section 426 of the Companies ▇▇▇ ▇▇▇▇.
Scheme Documents means the Scheme Circular and the documents despatched
to the optionholders in connection with the options proposals contained
therein.
SEC means the Securities and Exchange Commission.
Security Agreements means those security agreements described in
Section 11.1.7 and each Canadian Security Agreement.
Senior Funded Debt means Funded Debt excluding Debt pursuant to the
Senior Subordinated Notes.
Senior Leverage Ratio means, as of the last day of any Computation
Period the ratio of (a) Senior Funded Debt as of such date to (b) Adjusted
Operating Cash Flow for such Computation Period. For purposes of calculating
Senior Funded Debt for any period or portion thereof ending on or before the
Amendment Effective Date, Senior Funded Debt shall be adjusted by subtracting
amounts outstanding under the Existing Credit Agreement and/or the FDTH Credit
Agreement and adding Credit Extensions Outstanding under this Agreement.
Series A Preferred Shares means the Series A Redeemable Convertible
Preferred Stock of ▇▇▇▇▇▇▇▇▇ International, as in effect on the date of this
Agreement.
SNCFE Limited means SNCFE Limited, a company incorporated under the
laws of Hong Kong.
Southam means Southam Inc., a corporation continued under the laws of
Canada.
Southam Dividend Amount means the lesser of (a) the aggregate amount
paid or payable by ▇▇▇▇▇▇▇▇▇ International since the Amendment Effective Date
in respect of regularly scheduled periodic dividends on the Series A Preferred
Shares and (b) the aggregate amount of the Southam Interests Dividends received
by the Company since the Amendment Effective Date on account of its ownership
interest (whether direct or indirect) in Southam.
Southam Interests means 7,395,000 Southam common shares held by the
Company or its Restricted Subsidiaries; provided, however, that if Southam
shall pay a dividend, or make a distribution, on its common shares in the form
of Capital Stock of the same or another corporation, or subdivide its
outstanding common shares
32
into a greater number of common shares, or combine its outstanding common
shares into a smaller number of common shares, or effect a reorganization or
reclassification of its Capital Stock, or amalgamate, enter into an arrangement
or consolidation or merge with or into another entity (other than an
amalgamation, arrangement, consolidation or merger which does not result in a
reclassification or change of the outstanding common shares of Southam), the
"Southam Interests" shall thereafter include any securities distributed with
respect to any such shares or into which any such shares shall be converted,
changed or reclassified or for which any such shares shall be exchanged.
Southam Interests Dividend means a dividend or other distribution paid
on or with respect to the Southam Interests on or prior to the earlier of (a)
the redemption date for the redemption of all the Series A Preferred Shares
outstanding as of such redemption date or (b) the date of final distribution to
the holders of the Series A Preferred Shares of the full preferential amount
provided under the terms thereof; provided, however, that the term "Southam
Interests Dividend" does not mean or include (x) any part of any dividend or
distribution that is payable otherwise than in cash or that constitutes an
Extraordinary Cash Dividend as applied to the Southam Interests, or (y) any
dividend or distribution on or with respect to the 7,395,000 Southam common
shares held by the Company or its Restricted Subsidiaries.
Southam-Linked Debentures means the debentures of ▇▇▇▇▇▇▇▇▇ Inc. in the
original principal amount of Cdn$125,000,000 due November 1, 1998.
Southam Market Value means the product of (a) the U.S. Dollar
Equivalent of the Closing Price of a share of Southam as the most recent
trading date on the Toronto Stock Exchange and (b) the number of shares of
Southam pledged to secure the Credit Extensions.
Southam Pledge Agreement - see Section 11.1.6.
S&P means Standard & Poor's Corporation, or any successor rating
agency.
Stated Amount means, with respect to any Letter of Credit at any date
of determination, the maximum aggregate amount available thereunder at any time
during the then ensuing term of such Letter of Credit under any and all
circumstances, plus the aggregate amount of all unreimbursed payments and
disbursements under such Letter of Credit (it being agreed that for purposes of
calculating the Stated Amount of the FDTH Loan Note Guaranty, the FDTH Loan
Notes shall be deemed to have a fixed interest rate of 6.5%).
STDS means Sun-Times Distribution Systems, Inc., a Delaware
corporation.
Sterling and # mean the lawful currency of the United Kingdom of Great
Britain and Northern Ireland.
Subordinated Debt means (a) Debt pursuant to the 1996 Senior
Subordinated Notes and the 1997 Senior Subordinated Notes and (b) any unsecured
Debt of the Company in amounts which, when added to Funded Debt, would not
cause the Company on a pro forma basis as of the date of such incurrence to
violate the provisions of Section 10.6, does not require any amortization prior
to the date which is two years after the Commitment Termination Date and has
maturities and terms, and which is subordinated to the obligations of the
Company hereunder in a manner, satisfactory to the Lenders.
Subordination Agreements means the Canadian Subordination Agreement,
the U.K. Subordination Agreement, and any other subordination agreement which
may be executed from time to time by the Company or any Restricted Subsidiary
in favor of the Administrative Agent.
33
Subsidiary means, any Person, a majority of the equity ownership of the
Voting Stock of which is at the time owned, directly or indirectly, by the
Company and/or its other Subsidiaries; provided that, notwithstanding the
foregoing, the Canadian Borrower will be a Subsidiary so long as 50% of the
Voting Stock is held, directly or indirectly, by the Company and the remainder
is held, directly or indirectly, by ▇▇▇▇▇▇▇▇▇ Inc. Unless the context otherwise
requires, each reference to Subsidiaries herein shall be a reference to
Subsidiaries of the Company, provided that none of DHBV, DTHBV, West Ferry
Printers Limited, Trafford Park Printers Limited, Telegraph Connections
Limited, The Newspaper Licensing Agency Limited, Brand Movers Limited,
Lamponions Limited and Telegraph Events Limited and its Subsidiaries shall be
deemed a Subsidiary of the Company for purposes of this Agreement.
Subsidiary Notes means, collectively, (a) any promissory note issued,
now or in the future, by any Restricted Subsidiary of the Company in favor of
the Company or another Restricted Subsidiary in the Financial Group each
substantially in form and substance satisfactory to the Administrative Agent
and (b) the Jerusalem Post Note, and any extensions, renewals or amendments of
any of the foregoing.
Subsidiary Security Agreements means, collectively, any security
agreement or other security or collateral instrument or documents in form and
substance approved by the Administrative Agent issued or given by any
Restricted Subsidiary in favor of the Company or another Restricted Subsidiary
in the Financial Group, as the case may be, to secure Debt of such Restricted
Subsidiary under a Subsidiary Note.
Sun Times means The Sun-Times Company, a Delaware corporation.
Sun Times Plant means the real estate, improvements, fixtures and
related personal property associated with a new printing plant for the Sun
Times.
Synthetic Lease means a lease transaction under which the parties
intend that (i) the lease will be treated as an "operating lease" by the lessee
pursuant to Statement of Financial Accounting Standards No. 13, as amended, and
(ii) the lessee will be entitled to various benefits ordinarily available to
owners (as opposed to lessees) of like property. Debt under a Synthetic Lease
shall be an amount equal to the sum of (a) all rental obligations of such
Person as lessee under Synthetic Leases which are attributable to principal and
(b) all payment obligations of such Person under Synthetic Leases assuming such
Person exercises the option to purchase the leased property at the end of the
lease term.
Tax Allocation Agreement - means a tax allocation agreement
substantially in the form of Exhibit I executed by the Company and its
Restricted Subsidiaries incorporated in the United States, as amended, modified
or supplemented from time to time.
Tax Indemnity Agreements means, collectively, (a) the DT Holdings
Limited Group Relief Agreement dated June 23, 1992 among DTH, FDTH and the U.K.
Borrower, (b) the Deed of Indemnity dated June 23, 1992 entered into by
▇▇▇▇▇▇▇▇▇ Inc., DTH and FDTH in favor of the U.K. Borrower, (c) the Agreement
Relating to the Surrender of Advance Corporation Tax Dated June 23, 1992 among
DTH, FDTH and the U.K. Borrower and (d) the Option Tax Indemnity Agreements.
Taxes relative to any Person means taxes, assessments or other
governmental charges or levies imposed upon such Person, its income or any of
its properties, franchises or assets (excluding, in the case of payments made
to a Lender or the Administrative Agent, the following taxes (all of the
following
34
taxes being "Excluded Taxes"): (i) taxes imposed upon the overall net income of
such Lender or the Administrative Agent, (ii) franchise taxes imposed upon such
Lender or the Administrative Agent with respect to its net income, in each
case, by the jurisdiction under the laws of which such Lender or the
Administrative Agent, as the case may be, is organized or any political
subdivision thereof or by the jurisdiction in which such Lender's or the
Administrative Agent's Lending Office is located or any political subdivision
thereof).
TD-Texas - see the Preamble.
Telegraph Pledge Agreement - see Section 11.1.6.
TelHoldco means TelHoldco Inc., a Delaware corporation.
Toronto-Dominion - see the Preamble.
Total Commitment means $900,000,000, as reduced in accordance with
Section 6 hereof.
Total Interest Expense means, for any period, the consolidated interest
expense (other than interest on Subordinated Debt paid to ▇▇▇▇▇▇▇▇▇
International) payments with respect to any guaranty of Redeemable Capital
Stock (to the extent actually made during such period), discount and fees on
Acceptances and commitment and letter of credit fees of the Company and its
Restricted Subsidiaries for such period accrued on Funded Debt. For purposes of
calculating consolidated interest expense and commitment and letter of credit
fees, Funded Debt shall include Funded Debt under the Existing Credit Agreement
and the FDTH Credit Agreement, to the extent such Funded Debt was outstanding
during such period.
Total Leverage Ratio means, as of the last day of any Computation
Period, the ratio of (a) Funded Debt as of such date to (b) Adjusted Operating
Cash Flow for such Computation Period. For purposes of calculating Funded Debt
for any period or portion thereof ending on or before the Amendment Effective
Date, Funded Debt shall be adjusted by subtracting amounts outstanding under
the Existing Credit Agreement and/or the FDTH Credit Agreement and adding
Credit Extensions Outstanding under this Agreement.
Total Outstanding Amount means, on any date, the sum of:
(a) the Dollar Equivalent of the aggregate outstanding principal
amount of all Loans;
plus
(b) the Dollar Equivalent of the aggregate face amount of all
Acceptances outstanding;
plus
(c) the Dollar Equivalent of the Stated Amount of all outstanding
Letters of Credits;
less
(d) the Dollar Equivalent of the Acceptance Collateral Amount,
as of such date.
Traded Newspaper Assets - see definition of "Asset Swap."
Traded-For Newspaper Assets - see definition of "Asset Swap."
Trademark Security Agreements - see Section 11.1.7.
Tranche A Commitment means as to any Lender the commitment
35
of such Lender to make Tranche A Loans to and to issue or participate in
Tranche A Letters of Credit for the account of the Company pursuant to Section
2.1.1. The initial amount of the Tranche A Commitment of each Lender is set
forth on Schedule 1.1.
Tranche A Credit Extension means making any Tranche A Loan or issuing
or extending the expiry date of any Tranche A Letter of Credit.
Tranche A Letters of Credit - see Section 2.1.1.
Tranche A Loans - see Section 2.1.1.
Tranche A Outstanding Amount means, on any date, the sum of:
(a) the Dollar Equivalent of the aggregate outstanding principal
amount of all Tranche A Loans;
plus
(b) the Dollar Equivalent of the Stated Amount of all outstanding
Tranche A Letters of Credits
as of such date.
Tranche B Commitment means as to any Lender the commitment of such
Lender to make Tranche B Loans to and to issue or participate in Tranche B
Letters of Credit for the account of the U.K. Borrower pursuant to Section
2.1.2. The initial amount of the Tranche B Commitment of each Lender is set
forth on Schedule 1.1.
Tranche B Credit Extension means making any Tranche B Loan or issuing
or extending the expiry date of any Tranche B Letter of Credit.
Tranche B Letters of Credit - see Section 2.1.2.
Tranche B Loans - see Section 2.1.2.
Tranche B Outstanding Amount means, on any date, the sum of:
(a) the Dollar Equivalent of the aggregate outstanding principal
amount of all Tranche B Loans;
plus
(b) the Dollar Equivalent of the Stated Amount of all outstanding
Tranche B Letters of Credits
as of such date.
Tranche C Acceptance - see Section 2.1.3.
Tranche C Commitment means as to any Canadian Lender the commitment of
such Canadian Lender to make Tranche C Loans to and create Tranche C
Acceptances for the account of the Canadian Borrower pursuant to Section 2.1.3.
The initial amount of the Tranche C Commitment of each Canadian Lender is set
forth on Schedule 1.1.
Tranche C Credit Extension means making any Tranche C Loan or creating
any Tranche C Acceptance.
Tranche C Loans - see Section 2.1.3.
Tranche C Outstanding Amount means, on any date, the sum of:
(a) the Dollar Equivalent of the aggregate outstanding principal
amount of all Tranche C Loans;
plus
36
(b) the Dollar Equivalent of the aggregate face amount of all Tranche
C Acceptances outstanding;
less
(c) the Dollar Equivalent of the Acceptance Collateral Amount relating
to Tranche C Acceptances;
as of such date.
Tranche D Acceptance - see Section 2.1.4.
Tranche D Availability Date - see Section 11.4.
Tranche D Commitment means as to any Canadian Lender the commitment of
such Canadian Lender to make Tranche D Loans to and create Acceptances for the
account of the Canadian Borrower pursuant to Section 2.1.4. The initial amount
of the Tranche D Commitment of each Canadian Lender is set forth on Schedule
1.1.
Tranche D Credit Extension means making any Tranche D Loan or creating
Tranche D Acceptance.
Tranche D Loans - see Section 2.1.4.
Tranche D Outstanding Amount means, on any date, the sum of:
(a) the Dollar Equivalent of the aggregate outstanding principal
amount of all Tranche D Loans;
plus
(b) the Dollar Equivalent of the aggregate face amount of all Tranche
D Acceptances outstanding;
less
(c) the Dollar Equivalent of the Acceptance Collateral Amount relating
to Tranche D Acceptances;
as of such date.
U.K. Borrower - see the Preamble.
U.K. Leverage Ratio means, as of any date, the ratio of (a) Funded Debt
of the U.K. Borrower and its Restricted Subsidiaries, as of such date
(calculated in the same manner as Funded Debt of the Financial Group) to (b)
Operating Cash Flow of the U.K. Borrower and its Restricted Subsidiaries for
the Computation Period (calculated in the same manner as Operating Cash Flow
for the Financial Group).
U.K. Obligor means any of DTH, FDTH, Argsub, the U.K. Borrower and
each Restricted Subsidiary of the U.K. Borrower which is an Obligor.
U.K. Pledge Agreement - see Section 11.1.6.
U.K. Security Agreement - see Section 11.1.7.
U.K. Subordination Agreement means the Subordination Agreement dated as
of the Amendment Effective Date among DTH, FDTH, the U.K. Borrower, the
Company, Telegraph Australian Holdings Limited, Deedtask Limited and the
Administrative Agent.
U.K. Subsidiary Guaranty - see Section 11.1.5.
U.K. Subsidiary Pledge Agreement - see Section 11.1.6.
Unmatured Event of Default means any event which if it continues
uncured will, with lapse of time or notice or lapse of time and notice,
constitute an Event of Default.
37
Unrestricted Subsidiary means any Subsidiary that is not a Restricted
Subsidiary; provided, however, that a Person may not be designated as an
Unrestricted Subsidiary unless (a) the creditors of such Person have no direct
or indirect recourse (including, but not limited to, recourse with respect to
the payment of principal or interest on Debt of such Unrestricted Subsidiary)
to the Company or a Restricted Subsidiary and (b) a default by such Person on
any of its Debt will not result in, or permit any holder of Debt of the Company
or a Restricted Subsidiary to declare, a default on such Debt of the Company or
a Restricted Subsidiary or cause the payment thereof to be accelerated or
payable prior to its stated maturity. Any subsidiary of an Unrestricted
Subsidiary shall be an Unrestricted Subsidiary for purposes of this Agreement.
U.S. Base Rate means the rate per annum determined by the
Administrative Agent to be the rate of interest announced by Toronto-Dominion
in New York as its reference rate for the determination of interest rates for
loans of varying maturities in Dollars to United States residents of varying
degrees of creditworthiness and being quoted at such time by Toronto- Dominion
in New York as its "prime rate" from time to time, changing when and as said
rate changes; it being understood that in neither case is such rate necessarily
the lowest rate of interest provided to borrowers by the quoting institution.
U.S. Subsidiary Guaranty - see Section 11.1.5.
Voting Stock means stock of the class or classes pursuant to which the
holders thereof have the general voting power under ordinary circumstances to
elect at least a majority of the board of directors, managers or trustees of a
corporation (irrespective of whether or not at the time stock of any other
class or classes shall have or might have voting power by reason of the
happening of any contingency).
Welfare Plan means a "welfare plan", as such term is defined in Section
3(1) of ERISA, other than a "multiemployer plan" as such term is defined in
Section 3(37) of ERISA, or any other employee benefit plan or arrangement in
respect of which or in connection with which a Lien may arise pertaining to any
contribution obligation or other obligation thereunder as a matter of statute
or by operation of law, other than a Pension Plan or a "multiemployer plan" as
such term is defined in Section 3(37) of ERISA, to which the Company or any
Subsidiary or any trade or business of any of them may have any actual,
contingent or potential liability at any time during the preceding five years.
Wholly Owned Restricted Subsidiary means a Restricted Subsidiary all
the outstanding Capital Stock (other than directors' qualifying shares) of
which are owned by the Company or another Wholly Owned Restricted Subsidiary
or, in the case of Restricted Subsidiary of Southam, all the outstanding
Capital Stock (other than directors' qualifying shares) of which are owned by
Southam or another Wholly Owned Restricted Subsidiary of Southam.
SECTION 2 COMMITMENTS OF THE LENDERS; TYPES OF LOANS; LETTERS OF CREDIT;
BORROWING PROCEDURES; LOAN ACCOUNTS.
2.1 Commitments.
2.1.1 Tranche A Commitment. On and subject to the terms and conditions
of this Agreement, (a) each of the Lenders, severally and for itself alone,
agrees to make loans to the Company on a revolving basis (the "Tranche A
Loans") from time to time before the Commitment Termination Date in such
Lender's Percentage of such aggregate amounts as the Company may from time
38
to time request from all Lenders under the Tranche A Commitment (or such other
amount that is determined in accordance with the provisions of Section 4.1),
provided that the aggregate principal amount of all Tranche A Loans which all
Lenders shall be committed to have outstanding at any one time shall not exceed
an amount equal to (i) the aggregate amount of the Tranche A Commitments minus
(ii) the stated amount of all outstanding Tranche A Letters of Credit; and (b)
the Issuing Bank agrees to issue Letters of Credit at the request of and for
the account of the Company (the "Tranche A Letters of Credit") from time to
time before the Commitment Termination Date and, as more fully set forth in
Section 2.6, each Lender agrees to purchase a participation in each such
Tranche A Letter of Credit, provided that the aggregate Stated Amount of all
Tranche A Letters of Credit shall not at any time exceed the lesser of (i)
$15,000,000 or (ii) an amount equal to (A) the aggregate amount of the Tranche
A Commitments minus (B) the aggregate amount of all outstanding Tranche A
Loans.
Commencing on the Amendment Effective Date, up to $200,000,000 of the
Tranche A Commitment shall be available to the Company for issuance of Letters
of Credit and Loans. Upon (a) the Canadian Acquisition Date, up to $450,000,000
of the Tranche A Commitment shall be available to the Company and (b) the date
on which both the Canadian Acquisition Date and the Tranche D Availability Date
have occurred, up to $900,000,000 of the Tranche A Commitment shall be
available to the Company.
2.1.2 Tranche B Commitment. On and subject to the terms and conditions
of this Agreement, (a) each of the Lenders, severally and for itself alone,
agrees to make loans to the U.K. Borrower on a revolving basis (the "Tranche B
Loans") from time to time before the Commitment Termination Date in such
Lender's Percentage of such aggregate amounts as the U.K. Borrower may from
time to time request from all Lenders under the Tranche B Commitment (or such
other amount that is determined in accordance with the provisions of Section
4.1), provided that the aggregate principal amount of all Tranche B Loans which
all Lenders shall be committed to have outstanding at any one time shall not
exceed an amount equal to (i) the lesser of (x) the aggregate amount of the
Tranche B Commitments and (y) an amount which would not cause the U.K. Leverage
Ratio to exceed 4.0:1.0 when tested on an incurrence basis minus (ii) the
Stated Amount of all outstanding Tranche B Letters of Credit; and (b) the
Issuing Bank agrees to issue Letters of Credit at the request and for the
account of the U.K. Borrower (the "Tranche B Letters of Credit") from time to
time before the Commitment Termination Date and, as more fully set forth in
Section 2.6, each Lender agrees to purchase a participation in each such
Tranche B Letter of Credit, provided that the aggregate Stated Amount of all
Tranche B Letters of Credit shall not at any time exceed the lesser of (i)
$15,000,000 or (ii) an amount equal to (A) the lesser of (x) the aggregate
amount of all Tranche B Commitments and (y) an amount which would not cause the
U.K. Leverage Ratio to exceed 4.0:1.0 when tested on an incurrence basis minus
(B) the aggregate principal amount of all outstanding Tranche B Loans.
2.1.3 Tranche C Commitment. On and subject to the terms and conditions
of this Agreement (including Section 3), each of the Canadian Lenders,
severally and for itself alone, from time to time during the period commencing
on the Canadian Acquisition Date and ending on the Commitment Termination Date
agrees to (a) make loans to the Canadian Borrower on a revolving basis (the
"Tranche C Loans") in such Canadian Lender's Canadian Percentage of such
aggregate amount as the Canadian Borrower may from time to time request from
all Canadian Lenders under the Tranche C Commitment, provided that the
aggregate principal amount of all Tranche C Loans which all Canadian Lenders
shall be committed to have outstanding at any one time shall not exceed an
amount equal to (i) the aggregate amount of the Tranche C Commitment minus (ii)
the face amount of all outstanding Tranche C Acceptances; and (b) to create
bankers acceptances for the account of the Canadian Borrower (the "Tranche C
Acceptances") in such Canadian
39
Lender's Canadian Percentage of the aggregate face amount of Tranche C
Acceptances requested by the Canadian Borrower to be created on such day,
provided that the aggregate face amount of all Tranche C Acceptances which all
Canadian Lenders shall be committed to create at any one time shall not exceed
an amount equal to (i) the aggregate amount of the Tranche C Commitment minus
(ii) the aggregate principal amount of all outstanding Tranche C Loans.
2.1.4 Tranche D Commitment. On and subject to the terms and conditions
of this Agreement (including Section 3), each of the Canadian Lenders,
severally and for itself alone, from time to time during the period commencing
on the Tranche D Availability Date and ending on the Commitment Termination
Date agrees to (a) make loans to the Acquisition Borrower on a revolving basis
(the "Tranche D Loans") in such Canadian Lender's Canadian Percentage of such
aggregate amount as the Acquisition Borrower may from time to time request from
all Canadian Lenders under the Tranche D Commitment, provided that the
aggregate principal amount of all Tranche D Loans which all Canadian Lenders
shall be committed to have outstanding at any one time shall not exceed an
amount equal to (i) the lesser of (x) the aggregate amount of the Tranche D
Commitments and (y) an amount equal to the cash portion of the purchase price
paid in connection with the Approved Acquisition plus existing Debt to be
repaid in connection therewith minus (ii) the face amount of all outstanding
Tranche D Acceptances; and (b) to create bankers acceptances for the account of
the Acquisition Borrower (the "Tranche D Acceptances") in such Canadian
Lender's Canadian Percentage of the aggregate face amount of Tranche D
Acceptances requested by the Acquisition Borrower to be created on such day,
provided that the aggregate face amount of all Tranche D Acceptances which all
Canadian Lenders shall be committed to create at any one time shall not exceed
an amount equal to (i) the lesser of (x) the aggregate amount of the Tranche D
Commitment and (y) an amount equal to the cash portion of the purchase price
paid in connection with the Approved Acquisition plus existing Debt to be
repaid in connection therewith minus (ii) the aggregate principal amount of all
outstanding Tranche D Loans.
2.2 Lenders Not Permitted or Required To Make Credit Extensions. No
Lender will be required or permitted to make any Credit Extension if,
immediately after giving effect to such Credit Extension, and the application
of the proceeds thereof to the extent applied to the repayment of Credit
Extensions,
(a) the Tranche A Outstanding Amount would exceed the Tranche A
Commitment,
(b) the Tranche B Outstanding Amount would exceed the Tranche B
Commitment,
(c) the Tranche C Outstanding Amount would exceed the Tranche C
Commitment,
(d) the Tranche D Outstanding Amount would exceed the Tranche D
Commitment,
(e) the Total Outstanding Amount would exceed the Total Commitment,
or
(f) the Lender's Individual Outstanding Amount would exceed the
Lender's Individual Commitment.
2.3 Various Types of Loans. (a) Tranche A Loans may be borrowed in
Dollars or Alternate Currencies. Each Tranche A Loan denominated in Dollars
shall be divided into types which are either a Floating Rate Loan or a
Eurocurrency Loan (each a "type" of Loan), as the Company shall specify in the
related notice of borrowing or conversion pursuant to Section 2.4 or 2.5. Each
Tranche A Loan denominated in an Alternate Currency shall be a Eurocurrency
Loan.
40
(b) Tranche B Loans may be borrowed in Sterling. Each Tranche B
Loan shall be a Eurocurrency Loan.
(c) Tranche C and Tranche D Loans may be borrowed in Canadian
Dollars. Each Tranche C and Tranche D Loan shall be a Floating Rate Loan.
(d) Floating Rate Loans and Eurocurrency Loans may be outstanding at
the same time, provided that (i) not more than four different Interest Periods
(i.e., contracts) shall be in effect at any one time under each of Tranche A or
Tranche B, (ii) the aggregate principal amount of each Eurocurrency Loan in
Dollars shall at the time of each borrowing and conversion be at least
$1,000,000 and an integral multiple of $500,000, (iii) the aggregate principal
amount of each Eurocurrency Loan in Alternate Currencies shall at all times be
at least the Dollar Equivalent of $1,000,000 and an integral multiple of
$500,000, (iv) the aggregate principal amount of each Floating Rate Loan in
Dollars shall at the time of each borrowing be at least the lesser of (A)
$1,000,000 and an integral multiple of $500,000 and (B) the remaining amount of
the applicable Commitment, and (v) the aggregate principal amount of each
Floating Rate Loan in an Alternate Currency shall at all times be at least the
lesser of (A) the Dollar Equivalent of $1,000,000 and an integral multiple of
$500,000 and (B) the remaining amount of the applicable Commitment. All
borrowings, conversions and repayments of Loans, subject to Section 4, shall be
effected so that each Lender will have a pro rata share (according to its
Percentage) of all types of Loans.
2.4 Borrowing Procedures. A Borrower shall give telephonic notice
(promptly followed by written notice which, in the case of Tranche C or Tranche
D Loans, shall be in the form of Exhibit H and sent to The Toronto-Dominion
Bank, Toronto) to the Administrative Agent of its proposed borrowing not later
than (a) in the case of a Floating Rate borrowing, 12:00 p.m. (New York City
time) at least one Business Day prior to the proposed date of such borrowing,
(b) in the case of a Eurocurrency borrowing in Dollars, 12:00 p.m. (New York
City time) at least three Business Days prior to the proposed date of such
borrowing, and (c) in the case of a Eurocurrency borrowing in Alternate
Currencies, 12:00 p.m. (New York City time) at least five Business Days prior
to the proposed date of such Borrowing. Each such notice shall be effective
upon receipt by the Administrative Agent, shall be irrevocable, and shall
specify the date, amount and type of borrowing and, in the case of a
Eurocurrency borrowing, the applicable currency and initial Interest Period
therefor. Promptly upon receipt of such notice, the Administrative Agent shall
advise each Lender thereof. Not later than 1:00 p.m. (New York City time) on
the date of a proposed borrowing, each Lender shall provide the Administrative
Agent (by fed wire in the case of Tranche A and Tranche B and in immediately
available funds in the case of Tranche C and Tranche D) at the Administrative
Agent's designated Lending Office with immediately available funds in the
applicable currency covering such Lender's Percentage of such borrowing and,
subject to the satisfaction of the conditions precedent set forth in Section 11
with respect to such borrowing, the Administrative Agent shall pay over the
requested amount to the applicable Borrower on the requested borrowing date.
Each borrowing shall be on a Business Day. Each borrowing denominated in
Dollars shall be in an aggregate amount of at least $1,000,000 and an integral
multiple of $500,000 and the aggregate principal amount of each Group of
Eurocurrency Loans in Alternate Currencies shall at all times be the Dollar
Equivalent of at least $1,000,000 and an integral multiple of $500,000. To the
extent funds are received from the Lenders, the Administrative Agent shall make
such funds available to the applicable Borrower (i) with respect to Floating
Rate Tranche A Loans at the Administrative Agent's office in New York, (ii)
with respect to all Eurocurrency Rate Loans, at the Administrative Agent's
Lending Office for such currency, in each case by wire
41
transfer to the accounts the Applicable Borrower shall have specified in its
borrowing request and (iii) Canadian Prime Rate Loans at the Administrative
Agent's Toronto office. All Credit Extensions shall be deemed to be made
pursuant to that portion of the Commitment attributable to the Additional
Commitment, until such Additional Commitment has been fully advanced, unless
the applicable Borrower otherwise specifies to the Administrative Agent in
writing at the time of such borrowing.
2.5 Procedures for Conversion of Type of Loan. Subject to the
provisions of Section 2.2, the applicable Borrower may convert all or any part
of its outstanding Tranche A Loans into a Loan of a different type by giving
telephonic notice (promptly followed by written notice) to the Administrative
Agent not later than 10:00 a.m. (New York City time) at least five Business
Days prior to the proposed date of such conversion. Each such notice shall be
effective upon receipt by the Administrative Agent, shall be irrevocable, and
shall specify the date and amount of such conversion, the Loan to be so
converted, the type of Loan to be converted into and, in the case of a
conversion into a Eurocurrency Loan, the initial Interest Period therefor.
Promptly upon receipt of such notice, the Administrative Agent shall advise
each Lender thereof. Subject to Sections 2.11 and 2.12, such Loan shall be so
converted on the requested date of conversion. Each conversion shall be on a
Business Day. Notwithstanding the foregoing, the applicable Borrower shall not
be entitled to convert (a) Loans denominated in one currency into Loans in
another currency, (b) Eurocurrency Loans denominated in an Alternate Currency
into a Floating Rate Loan or (c) Loans issued under one Tranche into Loans
issued under another Tranche.
2.6 Letter of Credit Procedures. The Company or the U.K. Borrower, as
the case may be, shall give notice to the Issuing Bank of the proposed issuance
of each Letter of Credit on a Business Day which is at least three Business
Days (or such lesser period as to which the Issuing Bank may agree) prior to
the proposed date of issuance of such Letter of Credit. Each such notice shall
be accompanied by a Letter of Credit Application, duly executed by the Company
or the U.K. Borrower, as the case may be (and if a Restricted Subsidiary in the
Financial Group is to be a co-applicant, such Restricted Subsidiary), and in
all respects satisfactory to the Issuing Bank, together with such other
documentation as the Issuing Bank may reasonably request in support thereof, it
being understood that each Letter of Credit Application shall specify, among
other things, the date on which the proposed Letter of Credit is to be issued,
the amount of the Letter of Credit, the expiration date of such Letter of
Credit (which shall not be later than the earlier of (x) one year from the date
of issuance and (y) five Business Days prior to the Commitment Termination Date
(provided that the FDTH Loan Note Guaranty expiry date may be February 1, 2002
which date may not be extended)) and whether such Letter of Credit is to be
transferable in whole or in part. Subject to the satisfaction of the conditions
precedent set forth in Section 11 with respect to the issuance of such Letter
of Credit, the Issuing Bank shall issue such Letter of Credit on the requested
issuance date. The Company shall not be entitled to request the issuance of a
Letter of Credit for the account of any Unrestricted Subsidiary, any U.K.
Obligor or any Restricted Subsidiary which is not an Obligor and shall only be
entitled to request Letters of Credit denominated in Dollars. The U.K. Borrower
shall not be entitled to request the issuance of a Letter of Credit for the
account of any Person other than itself or a U.K. Obligor and shall only be
entitled to request Letters of Credit denominated in Sterling.
2.7 Participations in Letters of Credit. (a) On and after the Amendment
Effective Date, the Existing Letters of Credit shall be deemed for all
purposes, including for purposes of the fees to be collected pursuant to
Section 5.7, and reimbursement of costs and expenses to the extent provided
herein, Letters of Credit outstanding under this Agreement and entitled to the
benefits of this Agreement and the other Loan Documents, and
42
shall be governed by the applications and agreements pertaining thereto and by
this Agreement. The Existing Letters of Credit other than the FDTH Loan Note
Guaranty shall be deemed to be Tranche A Letters of Credit and the FDTH Loan
Note Guaranty shall be deemed to be a Tranche B Letter of Credit the issuance
of which was requested by the U.K. Borrower for the account of FDTH, a U.K.
Obligor. Each Lender shall be deemed to, and hereby irrevocably and
unconditionally agrees to, purchase from the Issuing Bank on the Amendment
Effective Date, without recourse or warranty, an undivided interest and
participation in each such Existing Letter of Credit and the applicable
Borrower's reimbursement obligation with respect thereto in an amount equal to
such Lender's Percentage.
(b) Concurrently with the issuance of each Letter of Credit, the
Issuing Bank shall be deemed to have sold and transferred to each other Lender,
and each other Lender shall be deemed irrevocably and unconditionally to have
purchased and received from the Issuing Bank, without recourse or warranty, an
undivided interest and participation, to the extent of such other Lender's
Percentage, in such Letter of Credit and the applicable Borrower's
reimbursement obligations with respect thereto. For the purposes of this
Agreement, the unparticipated portion of each Letter of Credit shall be deemed
to be the Issuing Bank's "participation" therein. The Issuing Bank hereby
agrees, upon request of any Lender, to deliver to such Lender a list of all
outstanding Letters of Credit, together with such information related thereto
as such other Lender may reasonably request.
2.8 Reimbursement Obligations. The applicable Borrower hereby
unconditionally and irrevocably agrees to reimburse the Issuing Bank for each
payment or disbursement made by the Issuing Bank under any Letter of Credit
issued at its request whether or not for its account honoring any demand for
payment made by the beneficiary thereunder, in each case on the date that such
payment or disbursement is made. Any amount not reimbursed on the date of such
payment or distribution shall bear interest from and including the date of such
payment or disbursement to but not including the date that the Issuing Bank is
reimbursed by the applicable Borrower therefor, payable on demand, at a rate
per annum equal to (x) in the case of Letters of Credit denominated in Dollars,
the sum of the Alternate Base Rate plus the Applicable Margin from time to time
in effect (plus, at any time an Event of Default exists, 2%) and (y) in the
case of Letters of Credit denominated in Sterling, the higher of (1) the sum of
the Eurocurrency Rate (Reserve Adjusted) plus the Applicable Margin from time
to time in effect (plus, at any time an Event of Default exists, 2%) and (2)
the sum of the Alternate Base Rate plus the Applicable Margin from time to time
in effect (plus, at any time an Event of Default exists, 2%). The Issuing Bank
shall notify the applicable Borrower and the Administrative Agent whenever any
demand for payment is made under any Letter of Credit by the beneficiary
thereunder; provided, however, that the failure of the Issuing Bank to so
notify the Company or the Administrative Agent shall not affect the rights of
the Issuing Bank or the Lenders in any manner whatsoever.
2.9 Limitation on the Issuing Bank's Obligations. In determining
whether to pay under any Letter of Credit, the Issuing Bank shall have no
obligation to the Borrowers or any Lender other than to confirm that any
documents required to be delivered under such Letter of Credit appear to have
been delivered and appear to comply on their face with the requirements of such
Letter of Credit. Any action taken or omitted to be taken by the Issuing Bank
under or in connection with any Letter of Credit, if taken or omitted in the
absence of gross negligence and willful misconduct, shall not impose upon the
Issuing Bank any liability to the Borrowers or any Lender and shall not reduce
or impair the applicable Borrower's reimbursement obligations set forth in
Section 2.8 or the obligations of the Lenders pursuant to Section 2.10.
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2.10 Funding by Lenders to the Issuing Bank. If the Issuing Bank makes
any payment or disbursement under any Letter of Credit and the applicable
Borrower has not reimbursed the Issuing Bank in full for such payment or
disbursement by 10:00 a.m. (New York City time) on the date of such payment or
disbursement or if any reimbursement received by the Issuing Bank from the
applicable Borrower is or must be returned or rescinded upon or during any
bankruptcy, insolvency or reorganization of the applicable Borrower or
otherwise, each Lender shall be obligated to pay to the Issuing Bank, in full
or partial payment of the purchase price of its participation in such Letter of
Credit, its pro rata share (according to its Percentage) of such payment or
disbursement (but no such payment shall diminish the obligations of the
applicable Borrower under Section 2.8), and the Administrative Agent shall
promptly notify each Lender thereof. Each Lender irrevocably and
unconditionally agrees, severally and for itself alone, to so pay to the
Administrative Agent in immediately available funds for the Issuing Bank's
account the amount of such Lender's Percentage of such payment or disbursement.
If and to the extent any Lender shall not have made such amount available to
the Administrative Agent by 2:00 p.m. (New York City time) on the Business Day
on which such Lender receives notice from the Administrative Agent of such
payment or disbursement (it being understood that any such notice received
after noon, New York City time, on any Business Day shall be deemed to have
been received on the next following Business Day), such Lender agrees to pay
interest on such amount to the Administrative Agent for the Issuing Bank's
account forthwith on demand for each day from and including the date such
amount was to have been delivered to the Administrative Agent to but excluding
the date such amount is paid, at a rate per annum equal to (a) for the first
three days after demand, the Federal Funds Rate from time to time in effect and
(b) thereafter, the Alternate Base Rate from time to time in effect. Any
Lender's failure to make available to the Administrative Agent its Percentage
of any such payment or disbursement shall not relieve any other Lender of its
obligation hereunder to make available to the Administrative Agent such other
Lender's Percentage of such payment, but no Lender shall be responsible for the
failure of any other Lender to make available to the Administrative Agent such
other Lender's Percentage of any such payment or disbursement.
2.11 Warranty. Each notice of borrowing and/or of conversion pursuant
to Section 2.4 or 2.5, the delivery of each Letter of Credit Application
pursuant to Section 2.6 and each request for creation of an Acceptance pursuant
to Section 3.1 shall automatically constitute a warranty by the Borrowers to
the Administrative Agent and each Lender to the effect that on the date of such
requested borrowing or conversion or the issuance of the requested Letter of
Credit or the creation of a requested Acceptance, as the case may be, (a) the
warranties contained in Section 9 (excluding, except in the case of Credit
Extensions made on the Amendment Effective Date and the Canadian Acquisition
Date and the Tranche D Availability Date, Sections 9.4, 9.6, 9.8 and 9.15
through 9.17) of this Agreement shall be true and correct as of such requested
date as though made on the date thereof and (b) no Event of Default or
Unmatured Event of Default shall have then occurred and be continuing or will
result therefrom.
2.12 Conditions. Notwithstanding any other provision of this Agreement,
(a) no Lender shall be obligated to make any Loan or create any Acceptance, (b)
no Lender shall be obligated to convert into or permit the continuation at the
end of the applicable Interest Period of any Eurocurrency Loan, (c) no Lender
shall be obligated to roll-over any Acceptance at the maturity thereof, and (d)
the Issuing Bank shall not be obligated to issue any Letter of Credit if, in
any such case, an Event of Default or Unmatured Event of Default exists or
would result therefrom.
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2.13 Determination of Dollar Equivalents. The Administrative Agent will
determine the Dollar Equivalent with respect to any Credit Extension
denominated in an Alternate Currency (i) on the date of any requested Credit
Extension or date of any requested continuation of any Credit Extension
denominated in an Alternate Currency, and (ii) as of the last Business Day of
each month, and (iii) during the occurrence and continuation of an Event of
Default, such other dates as may be requested by the Required Lenders (but in
no event more frequently than once a week) (each such date being a
"Determination Date").
2.14 Commitments Several. The failure of any Lender to make a requested
Loan or Acceptance on any date shall not relieve any other Lender of its
obligation to make a Loan or Acceptance on such date, but no Lender shall be
responsible for the failure of any other Lender to make any Loan or Acceptance
to be made by such other Lender.
2.15 Loan Accounts. Each Lender shall record in its records the date
and amount of each Loan made by such Lender, each repayment or conversion
thereof and, in the case of each Eurocurrency Loan, the dates on which each
Interest Period for such Loan shall begin and end. The aggregate unpaid
principal amount so recorded shall be rebuttable presumptive evidence of the
principal amount owing and unpaid on such Lender's Loans. The failure to so
record any such amount or information or any error in so recording any such
amount or information shall not, however, limit or otherwise affect the
obligations of the Borrowers hereunder to repay when due the principal amount
of the Loans together with all interest accruing thereon.
SECTION 3 THE ACCEPTANCES.
3.1 Creation of Acceptances. Subject to the terms and conditions of
this Agreement, the Canadian Lenders shall be obligated to create Acceptances
for the accounts of the Canadian Borrower and the Acquisition Borrower (each
referred to in this Section 3 as an "Acceptance Borrower") on the following
terms and conditions:
(a) By giving telephone notice (promptly followed by written notice in
the form of Exhibit H) to the Administrative Agent's Toronto office on or
before 10:00 a.m. (Toronto time), on a Business Day, an Acceptance Borrower may
from time to time irrevocably request, on three Business Days' notice, that
Acceptances be created in Canadian Dollars in a minimum face amount of
C$10,000,000 and in integral multiples of the C$100,000. Each Acceptance
created hereunder shall be created by a Canadian Lender's accepting one or more
drafts drawn on the form appropriate for each respective Canadian Lender for
bankers acceptances (a "Draft"), each such Draft (i) being drawn by an
Acceptance Borrower on such Canadian Lender in accordance with the terms
hereof, (ii) being dated the date of acceptance of such Draft by such Canadian
Lender, (iii) maturing on a Business Day one, two, three or six months (or,
with the prior consent of the Canadian Lenders, nine or twelve months) after
the date of the proposed acceptance but in no event may an Acceptance Borrower
choose a maturity date after the Commitment Termination Date or which would
cause such Borrower to cash collateralize its Acceptance on a Scheduled
Commitment Reduction Date pursuant to Section 3.9(b), and (iv) having a face
amount not less than C$100,000, or in an integral multiple of C$100,000 payable
in Canadian Dollars. Promptly following receipt of a request for an Acceptance,
the Administrative Agent shall notify each Canadian Lender of such request and
of the face amount of each Acceptance to be created by such Canadian Lender
(which shall be apportioned among the Canadian Lenders as nearly as possible in
accordance with their respective Canadian Percentages, subject to the foregoing
sentence, in accordance with standard market practice), the
45
term thereof, the maturity date thereof, and the extent to which the proceeds
of such Acceptances are to be applied to the payment of maturing Acceptances or
to the repayment or prepayment of Tranche C or Tranche D Loans. Such
notification shall be an "Acceptance Request."
(b) Each Canadian Lender that creates an Acceptance shall be required
to fund or discount such Acceptance in the market or purchase the same for its
own account, such that the purchase price therefor shall be equal to the face
amount of such Acceptance less an amount calculated at a rate per annum equal
to the Applicable Margin plus the Canadian Acceptance Rate applicable to such
Acceptance, computed on a basis of a year of 365 days on the face amount of
such Acceptance for the period from the date of creation thereof to (but
excluding) the maturity date thereof. The amount of the Acceptance Proceeds
derived from an Acceptance, to the extent such Acceptance Proceeds are not
required by the provisions hereof to be applied to the payment of maturing
Acceptances, or at the request of the applicable Acceptance Borrower, to be
applied to the repayment or prepayment of Tranche C or Tranche D Loans, shall
on the date on which such Acceptance is created be remitted to the
Administrative Agent at the Administrative Agent's Canadian Office by the
relevant Canadian Lender in immediately available funds not later than 1:00
p.m. (Toronto time) on the date specified in the relevant Acceptance Request.
On each such date, and subject to the prior receipt of funds from each Canadian
Lender, the Administrative Agent shall make available to the applicable
Acceptance Borrower at its Canadian Office in immediately available funds, no
later than 3:00 p.m. (Toronto time), all of such Acceptance Proceeds.
(c) In connection with each utilization by it of the Tranche C and
Tranche D Commitments by way of Acceptances, each Acceptance Borrower hereby
agrees that it shall deliver to the Administrative Agent on or prior to the
Amendment Effective Date, Powers of Attorney substantially in the form annexed
hereto as Exhibit J (the "Acceptance Powers of Attorney") authorizing each
Canadian Lender to draw Drafts on such Canadian Lender on behalf of such
Acceptance Borrower and to complete such Drafts in accordance with the requests
for Acceptances submitted from time to time pursuant to Section 3.1(a).
(d) Not later than 12:00 Noon (Toronto time) on the borrowing date
specified in the relevant request, and upon fulfillment of the applicable
conditions set forth in Section 11.5, each Canadian Lender will, in accordance
with such request, (i) sign each Draft on behalf of the applicable Acceptance
Borrower pursuant to the Acceptance Power of Attorney, (ii) complete the date,
amount and maturity of each Draft to be accepted, (iii) accept such Drafts and
give notice to the Administrative Agent for such acceptance and (iv) upon such
acceptance, discount such Acceptances to the extent contemplated by Section
3.1(b).
3.2 Payment of Acceptances upon Maturity. Each of the Canadian Borrower
and the Acquisition Borrower is obligated, and hereby unconditionally agrees,
to pay to the Administrative Agent for the account of each Canadian Lender the
face amount of each Acceptance created by such Canadian Lender hereunder on the
maturity date of such Acceptance (the obligation of an Acceptance Borrower
under this Section with respect to any Acceptance being the "Acceptance
Obligation" with respect to such Acceptance). An Acceptance Borrower shall not
repay any Acceptance otherwise than upon the maturity thereof; provided,
however, that nothing herein contained shall preclude an Acceptance Borrower
from, in its sole discretion, purchasing any outstanding Acceptance in the
market from time to time. An Acceptance Borrower shall not claim any days of
grace for the payment at maturity of any Acceptance.
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3.3 Rollover of Acceptances. Subject to Section 11.5, when an
Acceptance Borrower pays any Acceptance on the maturity thereof, it may request
pursuant to Section 3.1 that, as of such maturity, Acceptances be created in an
aggregate principal amount not in excess of the face amount of the matured
Acceptance and the provisions of this Agreement relating to Acceptances shall
be applicable thereto, and such payment may be effected by an Acceptance
Borrower providing for the Canadian Lenders to receive for their own account
the Acceptance Proceeds from new Acceptances in replacement of maturing
Acceptances. To the extent that such Acceptance proceeds are insufficient to
satisfy maturing Acceptances, the applicable Acceptance Borrower shall be
obligated to satisfy any deficiency from other resources. If an Acceptance
Borrower fails to request that the Canadian Lenders create new Acceptances in
replacement of maturing Acceptances, and does not repay such Acceptances on the
maturity thereof, such Acceptance Borrower will be deemed to have submitted a
timely request for Canadian Prime Rate Loans, and the aggregate face amount of
such maturing Acceptances will be converted into Canadian Prime Rate Loans
pursuant to Section 2.1.3.
3.4 Changes in Distribution. Each Canadian Lender shall advise each
Acceptance Borrower and the Administrative Agent promptly if at any time it
intends to materially change the manner in which it distributes Acceptances in
the market.
3.5 Control Accounts. Each Canadian Lender shall maintain and keep its
own accounts showing the aggregate amount of all Acceptances created by it from
time to time with respect to each Acceptance Borrower's account, the dates
thereof and the other charges accrued thereon or applicable thereto from time
to time and all payments of principal and other payments made by each
Acceptance Borrower to it from time to time pursuant to this Agreement. The
Administrative Agent shall, so far as it is reasonably able to do so, maintain
and keep accounts in the same manner in relation to each Canadian Lender. The
accounts kept by each Canadian Lender shall constitute prima facie evidence of
the respective Acceptances created by such Canadian Lender, of amounts owing to
such Canadian Lender and of such payments of principal or otherwise to such
Canadian Lender.
3.6 Illegality. Notwithstanding any other provisions hereof, if any
requirement of law, regulation, order or decree or any change therein or in the
interpretation or application thereof shall make it unlawful for any Canadian
Lender to, or any Canadian Lender is unable to, create, accept, issue,
discount, purchase, fund or to continue to create, accept, issue, discount,
purchase, fund or otherwise deal with Acceptances or to perform its obligations
hereunder with respect thereto, such Canadian Lender shall so notify the
Administrative Agent (which shall in turn notify each Acceptance Borrower),
which notice shall set forth in reasonable detail the circumstances giving rise
to the notice, and upon demand in writing by the Administrative Agent to each
Acceptance Borrower (which demand shall have attached thereto the
aforementioned notice of the affected Canadian Lender to the Administrative
Agent), each Acceptance Borrower shall forthwith pay to the Administrative
Agent an amount equal to the face amount of all Acceptances then outstanding
which were created by such Canadian Lender for such Acceptance Borrower's
account and all other amounts payable to such Canadian Lender by such
Acceptance Borrower hereunder in respect thereof, and satisfy all of its other
obligations pursuant hereto to the extent of any such unlawfulness or inability
and, upon such demand or such prepayment, the obligation of such Canadian
Lender to create Acceptances shall terminate to the extent of any such
unlawfulness, impossibility or inability for so long as such conditions shall
exist. Upon such payment, as between each Acceptance Borrower and the relevant
Canadian Lender, such Canadian Lender shall thereafter be solely responsible
for the payment of the face amount of such Acceptance to the holder thereof in
accordance with the terms thereof and shall indemnify each Acceptance Borrower
and hold it harmless against any
47
liability, cost or expense incurred by it as a result of any failure of such
Canadian Lender to pay such Acceptance to the holder thereof in accordance with
the terms thereof. Each such Canadian Lender shall use reasonable efforts to
minimize any costs, losses or expenses arising from such prepayments. If, as a
result of the prepayment required to be made by an Acceptance Borrower pursuant
to this Section, the difference between the face amount of the Acceptances to
be repaid and the Acceptance Proceeds realized by such Acceptance Borrower in
respect thereof exceeds the amount which such Canadian Lender would otherwise
have received hereunder on a per diem basis in respect of such Acceptance,
having regard to the number of days that the Acceptance was outstanding before
being prepaid pursuant hereto, such Canadian Lender shall pay to such
Acceptance Borrower such amount as in the reasonable opinion of such Canadian
Lender (determined in good faith) will leave it (after such payment) in the
same position that it would have been in had no prepayment of the outstanding
Acceptances been made; provided, however, that such Canadian Lender shall
notify the applicable Acceptance Borrower of the amount of any such excess as
of the date on which it is received, which notice shall constitute prima facie
evidence of such amount. Before giving any notice to the Administrative Agent
pursuant to this Section, such Canadian Lender shall, after consultation with
such Acceptance Borrower, designate a different office for the creation of
Acceptances in lieu of its Canadian Office if such designation will avoid the
need for giving such notice and will not, in the judgment of such Canadian
Lender, be otherwise disadvantageous to such Canadian Lender.
3.7 Collateralization of Acceptances.
(a) On the Commitment Termination Date and upon the acceleration of the
obligations pursuant to Section 12.2 at a time when any Acceptance is
outstanding hereunder, the Canadian Lenders shall be entitled, without any
further authorization from either Acceptance Borrower, to be deemed to have
made loans denominated in Canadian Dollars ("Acceptance Collateral Loans") to
such Acceptance Borrower, payable upon demand, in an aggregate principal amount
equal to the aggregate face amount at maturity of all Acceptances outstanding
for the account of such Acceptance Borrower hereunder at such time.
(b) At any time when any amount is due and payable pursuant to Section
6.2 as a result of a reduction in the Tranche C or Tranche D Commitment, the
Canadian Lenders shall be entitled, without any further authorization from the
affected Acceptance Borrower, to be deemed to have made Acceptance Collateral
Loans to the affected Acceptance Borrower, payable upon demand, in an aggregate
principal amount equal to the lesser of (i) the aggregate face amount at
maturity of all Acceptances outstanding for the account of the affected
Acceptance Borrower hereunder at such time, or (ii) the Canadian Dollar
Equivalent of the amount so due and payable.
(c) On any date when any amount becomes due and payable pursuant to
Section 6.2 as a result of a recomputation of the Total Outstanding Amount or
the Tranche C Outstanding Amount or the Tranche D Outstanding Amount, the
Canadian Lenders shall be entitled, without any further authorization from the
affected Acceptance Borrower, to be deemed to have made Acceptance Collateral
Loans to the affected Acceptance Borrower, payable upon demand, in an aggregate
principal amount equal to the lesser of (i) the aggregate face amount at
maturity of all Acceptances outstanding for the account of the affected
Acceptance Borrower hereunder at such time, or (ii) the Canadian Dollar
Equivalent of the amount so due and payable.
Such Acceptance Collateral Loans will bear interest at a rate per
48
annum equal to 2% in excess of the Canadian Prime Rate as in effect from time
to time from the maturity of such Acceptance until such Acceptance Collateral
Loans are fully paid. Interest on such Acceptance Collateral Loans shall be
computed on the basis of a year of 365 days (or 366 days, as the case may be)
and shall be payable on demand. The payments of principal made by an Acceptance
Borrower with respect to Acceptance Collateral Loans shall be deemed to be
applied to the payment of such Acceptance Borrower's Acceptance Collateral
Loans and shall thereafter be held by the Administrative Agent as cash
collateral in a cash collateral account for payment of the Acceptance
Obligations of such Acceptance Borrower for the benefit of the Canadian
Lenders, and shall be applied in payment of such Acceptances as they mature,
and each Acceptance Borrower hereby grants to each Lender a continuing security
interest in such amounts with respect to each Acceptance Collateral Loan of
such Acceptance Borrower. The amount on deposit in such collateral account, net
of amounts so applied, shall be referred to as the "Acceptance Collateral
Amount".
SECTION 4 INTERLENDER AGREEMENTS.
4.1 Affiliate Lenders. The parties acknowledge and agree that (a) each
financial institution party hereto from time to time may determine that one of
its Affiliates will be the Canadian Lender who is obligated to make the Tranche
C and Tranche D Credit Extensions and that a different Affiliate will be the
Lender who will make the Tranche A and Tranche B Credit Extensions and (b)
notwithstanding the fact that different Affiliates may be lending hereunder,
for purposes of determining any Lender's Individual Commitment, Percentage or
Individual Outstanding Amount and payments made after acceleration of the
Obligations pursuant to Section 12.2, all Affiliates of such financial
institution will be treated as a single Lender. For example, Toronto-Dominion
(Texas), Inc., in its capacity as a Lender under Tranche A and Tranche B and
The Toronto-Dominion Bank, in its capacity as a Canadian Lender, will be
treated as a single Lender which on the Amendment Effective Date had an
Individual Commitment of $187,500,000 and a Percentage of 20.8333%. For all
other purposes of this Agreement, each Affiliate which is obligated to lend
under any Tranche will be a Lender entitled to the rights and indemnifications
of Lenders hereunder.
4.2 Allocation of Payments Prior to Acceleration. Prior to the
acceleration of the Loans or Collateral Loans of any Borrower following the
occurrence of an Event of Default, all payments by such Borrower of principal
of, and interest on, Credit Extensions of such Borrower shall be allocated to
the Lenders as follows, after giving effect to any Reallocation:
(a) All payments of principal of, or interest on, Tranche C Loans or
Tranche D Loans or Collateral Loans of such Borrower shall be payable to the
Canadian Lenders ratably in accordance with each Canadian Lender's respective
Canadian Percentage.
(b) All payments of principal of Acceptances of such Borrower on any
date shall be payable to the Canadian Lenders ratably in accordance with the
aggregate face amount of Acceptances of such Canadian Lender on such date
(except as required by Section 3.1(a)).
(c) All payments of principal of, or interest on, Floating Rate Loans
of such Borrower shall be payable to each Lender ratably in accordance with the
aggregate principal amount of Floating Rate Loans made by such Lender.
(d) All payments of principal of, or interest on, Eurocurrency Loans of
such Borrower in any currency and having any Interest Period shall be payable
to each Lender ratably in accordance with the aggregate principal amount of
49
such Eurocurrency Loans denominated in such currency made by such Lender and
having the same Interest Period.
(e) All payments of any other amounts with respect to any principal,
interest or any other monetary Obligations of such Borrower (other than those
under Section 8 or Section 14.13) shall be payable to each Lender ratably in
accordance with each Lender's respective Percentage.
4.3 Allocation of Payments After Acceleration.
(a) Upon acceleration of the Obligations pursuant to Section 12.2, to
the extent necessary, each Lender shall be deemed to have purchased for cash
without recourse or warranty from the other Lenders a participation interest in
the Credit Extensions owing to or participated in by each other Lender such
that, after giving effect to such purchase, each Lender shall have a
participation in each Credit Extension made to any Borrower ratably in
accordance with its respective Percentage.
(b) If under any applicable bankruptcy, insolvency or other similar
law, any Lender receives a secured claim in lieu of a setoff to which this
Section applies, such Lender shall, to the extent practicable, exercise its
rights in respect of such secured claim in a manner consistent with the rights
of the Lenders entitled under this Section to share in the benefits of any
recovery on such secured claim. Each Borrower agrees that any Lender so
purchasing a participation from another Lender pursuant to this Section may, to
the fullest extent permitted by law, exercise all its rights of payment
(including pursuant to Section 7.4) with respect to such participation as fully
as if such Lender were the direct creditor of such Borrower in the amount of
such participation.
(c) After acceleration of the Obligations pursuant to Section 12.2, all
payments of principal of, and interest on, Credit Extensions shall be allocated
to the Lenders as follows:
(i) On the date of acceleration of the Obligations pursuant to Section
12.2 (but before giving effect to the deemed purchase referred to above), the
Administrative Agent shall compute the Outstanding Percentage for each Lender.
(ii) To the extent that amounts are received by the Administrative
Agent following the declaration of acceleration of the Obligations pursuant to
Section 12.2, the Administrative Agent shall pay all payments of principal of,
or interest on, Credit Extensions, Collateral Loans, or other Obligations to
each Lender ratably in accordance with such Lender's Outstanding Percentage,
regardless of the Obligor from which such payment is received or the currency
in which such payment is received and each Lender shall determine the order of
application of such payments to the Obligations owed to such Lender.
(iii) Each Lender hereby authorizes the Administrative Agent to effect
such conversions of currencies as are necessary to effect the provisions of
this Section, at such times and at such rates as the Administrative Agent may
in a commercially reasonable manner determine.
SECTION 5 INTEREST AND FEES.
5.1 Interest Rates. Each Borrower promises to pay interest on the
unpaid principal amount of its Loan for the period commencing on the date of
such Loan until such Loan is paid in full, as follows:
(a) at all times while such Tranche A Loan is a Floating Rate Loan, at
a rate per annum equal to the sum of the Alternate Base Rate from time to time
in effect plus the Applicable Margin;
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(b) at all times while such Tranche C or Tranche D Loan is a Floating
Rate Loan, at a rate per annum equal to the sum of the Canadian Base Rate from
time to time in effect plus the Applicable Margin; and
(c) at all times while such Tranche A or Tranche B Loan is a
Eurocurrency Loan, at a rate per annum equal to the sum of the Eurocurrency
Rate (Reserve Adjusted) applicable to each Interest Period for such Loan plus
the Applicable Margin;
provided, however, that at any time an Event of Default has occurred and is
continuing, the interest rate applicable to (i) each Floating Rate Loan shall
be the sum of (x) the applicable Base Rate plus (y) the Applicable Margin plus
(z) 2% and (ii) each Eurocurrency Loan shall be the higher of (x) the sum of
(A) the Eurocurrency Rate (Reserve Adjusted) plus (B) the Applicable Margin
plus (C) 2%, and (y) the sum of (A) the Alternate Base Rate plus (B) the
Applicable Margin plus (C) 2%.
5.2 Interest Payment Dates. Accrued interest on each Floating Rate Loan
shall be payable quarterly in arrears on the last Business Day of each Fiscal
Quarter and at maturity, commencing with the first of such dates to occur after
the date of such Loan. Accrued interest on each Eurocurrency Loan shall be
payable on the last day of each Interest Period relating to such Loan and, in
the case of Eurocurrency Loans with Interest Periods in excess of three months,
on each three month anniversary of such Eurocurrency Loan and at maturity.
After maturity, accrued interest on all Loans shall be payable on demand.
5.3 Interest Periods. Each "Interest Period" for a Eurocurrency Loan
shall commence on the date such Eurocurrency Loan is made or converted from a
Floating Rate Loan, or (if such Eurocurrency Loan is a continuation of a prior
Eurocurrency Loan) on the expiration of the immediately preceding Interest
Period for such continued Eurocurrency Loan, and shall end on the date which is
one, two, three, or six months thereafter (and nine and twelve month options if
available from the Lenders), as the applicable Borrower may specify:
(a) in the case of an Interest Period which commences on the date a
Eurocurrency Loan is made or converted from a Floating Rate Loan, in the
related notice of borrowing or conversion pursuant to Section 2.3 or 2.4, or
(b) in the case of a succeeding Interest Period with respect to any
continued Eurocurrency Loan, by telephonic notice (promptly followed by written
notice) to the Administrative Agent not later than 10:00 a.m. (New York City
time) at least three Business Days prior to the first day of such succeeding
Interest Period, it being understood that (i) each such notice shall be
effective upon receipt by the Administrative Agent and (ii) if the Company
fails to give such notice, such Loan, if denominated in Dollars shall
automatically become a Floating Rate Loan at the end of its then-current
Interest Period or, if denominated in an Alternate Currency, shall be continued
as a Loan denominated in an Alternate Currency for an Interest Period of one
month at a rate per annum equal to the sum of (A) Eurocurrency Reserve (Rate
Adjusted) plus (B) the Applicable Margin plus (C) 2%.
Each Interest Period that begins on the last day of a calendar month (or on a
day for which there is no numerically corresponding day in the appropriate
subsequent calendar month) shall end on the last Business Day of the
appropriate subsequent calendar month. Each Interest Period which would
otherwise end on a day which is not a Business Day shall end on the immediately
succeeding Business Day (unless such immediately succeeding
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Business Day is the first Business Day of a calendar month, in which case such
Interest Period shall end on the immediately preceding Business Day). The
applicable Borrower may not select any Interest Period for a Loan which would
end after the Commitment Termination Date or which would cause such Borrower to
prepay such Eurocurrency Loans on a Scheduled Commitment Reduction Date.
5.4 Setting and Notice of Eurocurrency Rates. The applicable
Eurocurrency Rate for each Interest Period shall be determined by the
Administrative Agent and notice thereof shall be given by the Administrative
Agent promptly to the applicable Borrower and each Lender. Each determination
of the applicable Eurocurrency Rate by the Administrative Agent shall be
conclusive and binding upon the parties hereto, in the absence of demonstrable
error. The Administrative Agent shall, upon written request of the applicable
Borrower or any Lender, deliver to the applicable Borrower or such Lender a
statement showing the computations used by the Administrative Agent in
determining any applicable Eurocurrency Rate hereunder.
5.5 Computation of Interest. Interest shall be computed on
Eurocurrency Loans for the actual number of days elapsed on the basis of a year
of 360 days. Interest shall be computed on Floating Rate Loans for the actual
number of days elapsed on the basis of a year of 365 or 366 days, as the case
may be. The applicable interest rate for each Floating Rate Loan shall change
simultaneously with each change in the applicable Base Rate.
5.6 Commitment Fee. The Company shall pay to the Administrative Agent
for the account of each Lender a commitment fee equal to the Applicable
Commitment Fee Rate on the daily average of the unused amount of such Lender's
Individual Commitment. Such commitment fee shall accrue from the Amendment
Effective Date to but excluding the Commitment Termination Date. Such
commitment fee shall be payable in arrears on the last Business Day of each
Fiscal Quarter and on the Commitment Termination Date, in each case for the
period then ending for which such commitment fee shall not have been
theretofore paid. The commitment fee shall be computed for the actual number of
days elapsed on the basis of a year of 365 or 366 days, as the case may be.
5.7 Letter of Credit Fees. (a) The Company and the U.K. Borrower agree
to pay to the Administrative Agent for the account of the Lenders pro rata
according to their respective Percentages a letter of credit fee for each
Letter of Credit requested by such Borrower in an amount per annum of the daily
average of the aggregate Stated Amount of such Letter of Credit (excluding any
unreimbursed payment or disbursement thereunder) equal to the Applicable Margin
for Eurocurrency Loans from time to time.
(b) The Company and the U.K. Borrower agree to pay to the Issuing Bank
a fronting fee in an amount equal to 1/8 of 1% per annum of the daily average
of the aggregate Stated Amount of each Letter of Credit requested by such
Borrower (excluding any unreimbursed payment or disbursement thereunder).
(c) The fees payable pursuant to clauses (a) and (b) above shall be
computed for the actual number of days elapsed on the basis of a year of 360
days and shall be payable in arrears on the last Business Day of each Fiscal
Quarter and on the Commitment Termination Date for the period from and
including the date of the issuance of the applicable Letter of Credit to but
excluding the date such payment is due or, if earlier, the date on which such
Letter of Credit expired or was terminated.
(d) In addition, with respect to each Letter of Credit requested by
such Borrower, the Company and the U.K. Borrower agree to pay to the Issuing
Bank such fees and expenses as the Issuing Bank customarily requires in
connection with the issuance, amendment, transfer, negotiation, processing
and/or administration of letters of credit.
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5.8 Additional Fees. The Company agrees to pay to the Administrative
Agent such additional fees at such times and in such amounts as are mutually
agreed upon in writing by the Company and the Administrative Agent.
SECTION 6 REDUCTION OR TERMINATION OF THE COMMITMENTS; REPAYMENTS.
6.1 Reduction or Termination of the Commitments.
6.1.1 Voluntary Reduction or Termination. (a) The Company may from time
to time prior to the Commitment Termination Date, on at least three Business
Days' prior written notice received by the Administrative Agent (which shall
promptly advise each Lender thereof), permanently reduce the Total Commitment
to an amount not less than the Total Outstanding Amount. Any reduction in the
Total Commitment shall permanently reduce the Tranche A Commitment dollar for
dollar and shall permanently reduce Tranche B, Tranche C and Tranche D pro
rata. Any such reduction shall be in an aggregate amount of $1,000,000 or
integral multiples thereof and shall be applied pro rata against the reductions
required on each Scheduled Commitment Reduction Date.
(b) The Company may at any time on like notice prior to the Commitment
Termination Date terminate all the Commitments upon payment in full of all
Obligations of the Borrowers hereunder and the expiration, cancellation or cash
collateralization (on terms satisfactory to the Administrative Agent, the
Issuing Bank and the Canadian Lenders) of all outstanding Letters of Credit and
Acceptances. Upon any termination of the Commitments in whole all of the Loans
shall become immediately due and payable.
(c) All reductions of the Tranche A and Tranche B Commitments shall be
pro rata among the Lenders according to their Percentages and all reductions of
the Tranche C and Tranche D Commitments shall be pro rata among the Canadian
Lenders according to their Canadian Percentages.
6.1.2 Mandatory Commitment Reduction. (a) On each date that is one
Business Day after the receipt by the Company or any of its Restricted
Subsidiaries in the Financial Group of Net Cash Proceeds from permitted Asset
Sales, the Total Commitment shall, without further action, automatically and
permanently be reduced by an amount equal to such Net Cash Proceeds; provided,
however, that if at the time of such Asset Sale, the Total Leverage Ratio,
after giving effect to such Asset Sale is less than 6.0:1.0, the Total
Commitment shall be reduced on the date that is six months from the date of
such Asset Sale (the "Asset Reduction Date") unless prior to such Asset
Reduction Date, the Company shall have provided the Administrative Agent
sufficient evidence that such Net Cash Proceeds have been reinvested in similar
assets.
(b) On each date that is fourteen Business Days after the date on which
the Asset Coverage Ratio has been below 0.60:1.0 for three consecutive Business
Days, (i) the Total Commitment and the Tranche A Commitment shall be reduced by
the amount necessary to reduce the Total Leverage Ratio to the lesser of
6.0:1.0 or the then applicable ratio and (ii) the Tranche C Commitment shall be
reduced by $75,000,000. The Canadian Borrower shall be entitled to sell that
amount of Southam shares pledged to the Lenders as may be necessary to enable
the Borrowers to make any prepayment required by such Commitment reduction. The
Borrowers shall not be permitted to borrow during such fourteen Business Days.
(c) On each date that is one Business Day after the date on which the
U.K. Borrower or FDTH receives proceeds from an exercise of the Purchase
Option, the Tranche B Commitment shall, without further action, automatically
and permanently be reduced by an amount equal to such proceeds minus any cash
payment made
53
by the U.K. Borrower or FDTH in connection with such exercise.
(d) On each date that is one Business Day after the receipt of any
Debt/Equity Proceeds, the Total Commitment shall, without further action,
automatically and permanently be reduced by an amount equal to such Debt/Equity
Proceeds; provided, however, that the aggregate Commitment reductions pursuant
to this Section 6.1.2(d) shall only be required to the extent necessary to
insure that the Total Leverage Ratio, after giving effect to such reduction, is
6.0:1.0 or less.
(e) On each date that is one Business Day after the receipt of any
other Net Cash Proceeds by the Company or any Restricted Subsidiary in the
Financial Group, the Total Commitment shall, without further action,
automatically and permanently be reduced by an amount equal to such Net Cash
Proceeds.
(f) On each date set forth in Schedule 6.1.2 (each, a "Scheduled
Commitment Reduction Date"), each of the Total Commitment, the Tranche A
Commitment, the Tranche B Commitment, the Tranche C Commitment and the Tranche
D Commitment (to the extent not already reduced pursuant to this Section 6),
without any further action, shall automatically and permanently be reduced by
the percentage of the original aggregate Total Commitment or Commitment for the
respective Tranche specified in Schedule 6.1.2; provided, that on the
Commitment Termination Date all Commitments shall automatically and permanently
be reduced to zero.
(g) On August 31, 1997, if the Tranche D Availability Date has not yet
occurred, the Total Commitment and the Tranche A Commitment shall automatically
and permanently be reduced to $450,000,000 and the Tranche D Commitment shall
automatically and permanently be terminated.
6.1.3 Application of Mandatory Commitment Reductions to Tranches.
Mandatory Commitment reductions pursuant to Section 6.1.2 shall be applied
against the mandatory reductions of the Commitments required by Section
6.1.2(f) in inverse order of reduction. Mandatory Commitment reductions
resulting from Asset Sales under Section 6.1.2(a) shall be applied dollar for
dollar (w) in the case of Asset Sales by the Canadian Borrower or any of its
Restricted Subsidiaries, to the Tranche A and Tranche C Commitments, (x) in the
case of Asset Sales by the U.K. Borrower or any of its Subsidiaries, to the
Tranche A and Tranche B Commitments, (y) in the case of Asset Sales by the
Acquisition Borrower or any of its Subsidiaries, to the Tranche A and Tranche D
Commitments, and (z) in the case of Asset Sales by the Company or any other
Restricted Subsidiary, to the Tranche A Commitment and pro rata among the
Tranche B, Tranche C and Tranche D Commitments. Mandatory Commitment reductions
resulting from events described in Section 6.1.2(d) or (e) shall be applied to
the Tranche A Commitment and, to the extent that any such Commitment would
exceed the Total Commitment, the Tranche B, Tranche C and Tranche D
Commitments.
6.1.4 All Reductions. All reductions of the Total Commitment (whether
voluntary or mandatory) shall be deemed to be reductions of that portion of the
Total Commitment attributable to the Additional Commitment unless the Company
otherwise specifies to the Administrative Agent in writing at the time of such
reduction.
6.2 Prepayments.
6.2.1 Mandatory Prepayments due to Commitment Reductions. If, after
giving effect to any reduction of the Commitments pursuant to Section 6.1, (a)
the Total Outstanding Amount under any Tranche exceeds the aggregate amount of
the Commitments for such Tranche, the applicable Borrower will make an
immediate repayment of Credit Extensions in an amount equal to such excess
(rounded upward, if necessary, to an integral multiple of $250,000) or (b) the
Total Outstanding Amount exceeds the Total
54
Commitment, the Company will make an immediate repayment of Credit Extensions
in an amount equal to such excess (rounded upward, if necessary, to an integral
multiple of $250,000).
6.2.2 Mandatory Prepayments due to Currency Fluctuations. Promptly (and
in any event within three Business Days) following receipt of any notice that
the Administrative Agent shall have determined on any Determination Date that
the Dollar Equivalent of the aggregate amount of all Credit Extensions under
any Tranche exceeds the Commitments for such Tranche then in effect, the
applicable Borrower shall make a mandatory prepayment of the outstanding
principal amount of the Credit Extensions in an amount equal to such excess.
6.2.3 Voluntary Prepayments. A Borrower may from time to time prepay
its Loans in whole or in part, provided that (a) the applicable Borrower shall
give the Administrative Agent (which shall promptly advise each Lender) not
less than three Business Days' prior written notice thereof (five Business Days
in the case of Loans denominated in Alternate Currencies), specifying the Loans
to be prepaid and the date and amount of prepayment and (b) each partial
prepayment of Loans shall be in a principal amount of at least $1,000,000 and
an integral multiple of $500,000 (or, in the case of Loans denominated in
Alternate Currencies, the Dollar Equivalent of $1,000,000 to and an integral
multiple of $500,000).
6.2.4 All Prepayments. All prepayments of Loans shall be allocated pro
rata among the Lenders according to their respective pro rata shares of the
prepaid Loans, in accordance with Section 4.3 or Section 4.4, if applicable,
and any prepayment of a Loan shall include accrued interest to the date of
prepayment on the principal amount being repaid. Any prepayment of a
Eurocurrency Loan on a day other than the last day of an Interest Period
therefor shall be subject to Section 8.4. All prepayments of Credit Extensions
(whether voluntary or mandatory) shall first be applied to repayment of Credit
Extensions advanced pursuant to the Original Commitment unless the Company
otherwise specifies to the Administrative Agent in writing at the time of such
prepayment.
6.2.5 Commitment Termination Date. On the Commitment Termination Date,
(a) the Company shall repay to the Lenders all the Tranche A Loans outstanding
on such date and shall deliver to the Administrative Agent cash collateral
consisting of Cash Equivalent Investments or other cash collateral acceptable
to the Issuing Bank in an amount equal to the Dollar Equivalent of the Stated
Amount of all Tranche A Letters of Credit, (b) the U.K. Borrower shall repay to
the Lenders the aggregate principal amount of all Tranche B Loans outstanding
on such date and shall deliver to the Administrative Agent cash collateral in
Sterling consisting of Cash Equivalent Investments or other cash collateral
acceptable to the Issuing Bank in an amount equal to the Stated Amount of all
Tranche B Letters of Credit, (c) the Canadian Borrower shall repay to the
Lenders the aggregate principal amount of all Tranche C Loans outstanding on
such date and shall deliver to the Administrative Agent payments as required
under Section 3.9, and (d) the Acquisition Borrower shall repay to the Lenders
the aggregate principal amount of all Tranche D Loans outstanding on such date
and shall deliver to the Administrative Agent payments as required under
Section 3.9.
SECTION 7 MAKING AND PRORATION OF PAYMENTS; SETOFF; TAXES.
7.1 Making of Payments. (a) All payments of principal or interest on
the Credit Extensions, and of all fees, shall be made by the Borrowers in the
applicable currency to the Administrative Agent in immediately available funds
at its designated Lending Office not later than 2:00 p.m. (Local Time) on the
date due; and funds received after that hour shall be deemed to have been
received by the Administrative Agent on the next following
55
Business Day. The Administrative Agent shall promptly remit to each Lender its
share of all such payments received in collected funds by the Administrative
Agent for the account of such Lender.
(b) All payments under Sections 8.1 and 8.4 shall be made by the
Borrowers directly to the Lender or Lenders entitled thereto.
7.2 Application of Certain Payments. Except as otherwise expressly
provided herein, each payment of principal shall be applied to such Credit
Extensions as the Borrowers shall direct by notice to be received by the
Administrative Agent on or before the date of such payment or, in the absence
of such notice, as the Administrative Agent shall determine in its reasonable
discretion. Concurrently with each remittance to any Lender of its share of any
such payment, the Administrative Agent shall advise such Lender as to the
application of such payment.
7.3 Due Date Extension. If any payment of principal or interest with
respect to any of the Credit Extensions, or of any fees, falls due on a day
which is not a Business Day, then, except as provided in Section 4.3, such due
date shall be extended to the next following Business Day and, in the case of
principal, additional interest shall accrue and be payable for the period of
any such extension.
7.4 Setoff. Each Borrower agrees that the Administrative Agent and each
Lender have all rights of set-off and bankers' lien provided by applicable law,
and in addition thereto, each Borrower agrees that at any time any Event of
Default has occurred and is continuing, the Administrative Agent and each
Lender may apply to any Obligation of such Borrower hereunder or under any
other Loan Document, whether or not then due, any and all balances, credits,
deposits, accounts or moneys of such Borrower then or thereafter with the
Administrative Agent or such Lender.
7.5 Proration of Payments. If any Lender shall obtain any payment or
other recovery (whether voluntary, involuntary, by application of offset or
otherwise) on account of principal of or interest on any Credit Extension (or
on account of its participation in any Letter of Credit) in excess of its pro
rata share of payments and other recoveries obtained by all Lenders on account
of principal of and interest on Credit Extensions (or such participations) then
held by them (other than (i) any non-pro rata interest payment resulting from a
Credit Extension being an Affected Loan, (ii) any payment resulting from
replacement of a Lender pursuant to Section 8.7 or (iii) prior to an
acceleration of the Obligations pursuant to Section 12.2, non-pro rata payments
resulting from the different percentages of Canadian Lenders and Non-Canadian
Lenders in Credit Extensions), such Lender shall purchase from the other
Lenders such participation in the Credit Extensions (or sub-participations in
Letters of Credit) held by them as shall be necessary to cause such purchasing
Lender to share the excess payment or other recovery ratably with each of them;
provided, however, that if all or any portion of the excess payment or other
recovery is thereafter recovered from such purchasing Lender, the purchase
shall be rescinded and the purchase price restored to the extent of such
recovery.
7.6 Net Payments; Tax Exemptions.
(a) All payments by the Borrowers of principal, interest, fees,
indemnities and other amounts payable hereunder and under the other Loan
Documents shall be made to the recipient thereof without setoff or counterclaim
and free and clear of, and without withholding or deduction for or on account
of, any present or future Taxes (other than Excluded Taxes) now or hereafter
imposed on such recipient or its income, property, assets or franchises (such
recipient's "Recipient Taxes"), except to the extent that such withholding or
deduction (i) is required by applicable law, (ii) results from the breach by
such recipient of its Exemption
56
Agreement (as defined below) or (iii) would not be required if such recipient's
Exemption Representation (as defined below) were true. If any such withholding
or deduction is required by applicable law, the Borrowers will:
(A) pay to the relevant authorities the full amount so required to be
withheld or deducted;
(B) promptly forward to the Administrative Agent an official receipt or
other documentation satisfactory to the Administrative Agent evidencing such
payment to such authorities; and
(C) except to the extent that such withholding or deduction results
from the breach by the recipient of its Exemption Agreement or would not be
required if such recipient's Exemption Representation were true, pay to the
Administrative Agent for the account of the relevant recipient such additional
amount as is necessary to ensure that the net amount actually received by such
recipient will equal the full amount such recipient would have received had no
such withholding or deduction been required.
(b) In consideration of the Borrowers' agreements in clause (a) of this
Section 7.6, each Lender which is not organized under the laws of the United
States or a State thereof hereby agrees (such Lender's "Exemption Agreement"),
to the extent permitted by applicable law (including any applicable double
taxation treaty); to execute and deliver to the Company and the Administrative
Agent (i) on or before the first scheduled payment date after the Amendment
Effective Date, a United States Internal Revenue Service Form 1001 or Form 4224
as appropriate (or successor forms), properly completed and claiming a complete
exemption, as the case may be, from withholding or deduction for or on account
of Recipient Taxes of such Lender, and (ii) a new Form 1001 or Form 4224 (or
successor form), as appropriate, upon the expiration or obsolescence of any
previously delivered Form.
(c) Each Lender hereby represents and warrants (such Lender's
"Exemption Representation") to the Company that on the Amendment Effective Date
(or, if later, the date it becomes a party to this Agreement) it is entitled to
receive payments of principal of, and interest on, Loans made by such Lender
without withholding or deduction for or on account of such Lender's Recipient
Taxes imposed by the United States of America.
SECTION 8 INCREASED COSTS; SPECIAL PROVISIONS FOR EUROCURRENCY LOANS.
8.1 Increased Costs. (a) If, after the date hereof, the adoption of any
applicable law, rule or regulation, or any change therein, or any change 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 any Lending Office of such Lender)
with any request or directive (whether or not having the force of law) of any
such authority, central bank or comparable agency:
(i) shall subject any Lender (or any Lending Office of such Lender) to
any tax, duty or other charge with respect to its Credit Extensions or its
obligation to make Credit Extensions, or shall change the basis of taxation of
payments to any Lender of the principal of or interest on its Credit Extensions
or any other amounts due under this Agreement in respect of its Credit
Extensions or its obligation to make Credit Extensions (except for changes in
the rate of tax on the overall net income of such Lender or its Lending Office
imposed by the jurisdiction in which such Lender's principal executive office
or Lending Office is located); or
57
(ii) shall impose, modify or deem applicable any reserve (including,
without limitation, any reserve imposed by the Board of Governors of the
Federal Reserve System, but excluding any reserve included in the determination
of interest rates pursuant to Section 4), special deposit or similar
requirement against assets of, deposits with or for the account of, or credit
extended by any Lender (or any Lending Office of such Lender); or
(iii) shall impose on any Lender (or its Lending Office) any other
condition affecting its Credit Extension or its obligation to make Credit
Extension;
and the result of any of the foregoing is to increase the cost to (or in the
case of Regulation D of the Board of Governors of the Federal Reserve System,
to impose a cost on) such Lender (or any Lending Office of such Lender) of
making or maintaining any Eurocurrency Loan, or to reduce the amount of any sum
received or receivable by such Lender (or its Lending Office) under this
Agreement with respect thereto, then within 10 days after demand by such Lender
(which demand shall be accompanied by a statement setting forth in reasonable
detail the basis for and a calculation of the amount of such demand, a copy of
which shall be furnished to the Administrative Agent), the Borrowers shall pay
directly to such Lender such additional amount or amounts as will compensate
such Lender for such increased cost or such reduction.
(b) If any Lender shall reasonably determine that the adoption or phase-in of
any applicable law, rule or regulation regarding capital adequacy, or any
change therein, or any change 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 Lending Office) or any Person controlling such Lender with any request or
directive regarding capital adequacy (whether or not having the force of law)
of any such authority, central bank or comparable agency, has or would have the
effect of reducing the rate of return on such Lender's or such controlling
Person's capital as a consequence of such Lender's obligations hereunder
(including, without limitation, such Lender's obligations under the Commitment)
to a level below that which such Lender or such controlling Person could have
achieved but for such adoption, change or compliance (taking into consideration
such Lender's or such controlling Person's policies with respect to capital
adequacy) by an amount deemed by such Lender or such controlling Person to be
material, then from time to time, within 10 days after demand by such Lender
(which demand shall be accompanied by a statement setting forth in reasonable
detail the basis for and a calculation of the amount of such demand, a copy of
which shall be furnished to the Administrative Agent), the Borrowers shall pay
to such Lender such additional amount or amounts as will compensate such Lender
or such controlling Person for such reduction.
8.2 Basis for Determining Interest Rate Inadequate or Unfair. If with
respect to any Interest Period:
(a) deposits in Dollars or Alternate Currencies (in the applicable
amounts) are not being offered to the Administrative Agent in the interbank
eurocurrency market for such Interest Period, or the Administrative Agent
otherwise reasonably determines (which determination shall be binding and
conclusive on the Borrowers) that by reason of circumstances affecting the
interbank eurocurrency market adequate and reasonable means do not exist for
ascertaining the applicable Eurocurrency Rate;
(b) two or more Lenders having an aggregate Percentage of 30% or more
advise the Administrative Agent that the Eurocurrency Rate (Reserve Adjusted)
as determined by the Administrative Agent will not as determined in good faith
by
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such Lenders adequately and fairly reflect the cost to such Lenders of
maintaining or funding such Loans for such Interest Period (taking into account
any amount to which such Lenders may be entitled under Section 8.1); or
(c) Lenders having an aggregate Percentage of 30% or more advise the
Administrative Agent that the making or funding of Eurocurrency Loans has
become impracticable as a result of an event occurring after the date of this
Agreement which in the opinion of such Lenders materially affects such Loans;
then the Administrative Agent shall promptly notify the other parties hereto
and, so long as such circumstances shall continue, (i) no Lender shall be under
any obligation to make, or convert any Floating Rate Loan into, Eurocurrency
Loans in the applicable Currency and (ii) on the last day of the current
Interest Period for each Eurocurrency Loan in the applicable Currency, such
Loan shall, unless then repaid in full, automatically convert to a Floating
Rate Loan.
8.3 Changes in Law Rendering Eurocurrency Loans Unlawful. In the event
that any change in (including the adoption of any new) applicable laws or
regulations, or any change in the interpretation of applicable laws or
regulations by any governmental or other regulatory body charged with the
administration thereof, should make it (or in the good faith judgment of any
Lender cause a substantial question as to whether it is) unlawful for any
Lender to make, maintain or fund Eurocurrency Loans, then such Lender shall
promptly notify each of the other parties hereto and, so long as such
circumstances shall continue, (a) such Lender shall have no obligation to make,
or convert any Floating Rate Loan into, Eurocurrency Loans (but shall make
Floating Rate Loans concurrently with the making of, or conversion into,
Eurocurrency Loans by the Lenders which are not so affected, in each case in an
amount equal to such Lender's pro rata share of all Eurocurrency Loans which
would be made or converted at such time in the absence of such circumstances)
and (b) on the last day of the current Interest Period for each Eurocurrency
Loan of such Lender (or, in any event, on such earlier date as may be required
by the relevant law, regulation or interpretation), such Eurocurrency Loan
shall, unless then repaid in full, automatically convert to a Floating Rate
Loan provided, however, that Eurocurrency Loans denominated in Alternate
Currencies must be repaid and reborrowed as a Floating Rate Loan on such date.
Each Floating Rate Loan made by a Lender which, but for the circumstances
described in the foregoing sentence, would be a Eurocurrency Loan (an "Affected
Loan") shall remain outstanding for the same period as the Group of
Eurocurrency Loans of which such Affected Loan would be a part absent such
circumstances.
8.4 Funding Losses. Each Borrower hereby agrees that upon demand by any
Lender (which demand shall be accompanied by a statement setting forth the
basis for the calculations of the amount being claimed, a copy of which shall
be furnished to the Administrative Agent) such Borrower will indemnify such
Lender against any net loss or expense which such Lender may sustain or incur
(including, without limitation, any net loss or expense incurred by reason of
the liquidation or reemployment of deposits or other funds acquired by such
Lender to fund or maintain any Eurocurrency Loan), as reasonably determined by
such Lender, as a result of (a) any payment or prepayment or conversion of any
Eurocurrency Loan of such Lender on a date other than the last day of an
Interest Period for such Loan (including, without limitation, any conversion
pursuant to Section 8.3) or (b) any failure of such Borrower to borrow or
convert any Loans on a date specified therefor in a notice of borrowing or
conversion pursuant to this Agreement. For this purpose, all notices to the
Administrative Agent pursuant to this Agreement shall be deemed to be
irrevocable.
8.5 Right of Lenders to Fund through Other Offices. Each
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Lender may, if it so elects, fulfill its commitment as to any Eurocurrency Loan
by causing a foreign branch or Affiliate of such Lender to make such Loan,
provided that in such event for the purposes of this Agreement such Loan shall
be deemed to have been made by such Lender and the obligation of the Borrowers
to repay such Loan shall nevertheless be to such Lender and shall be deemed
held by it, to the extent of such Loan, for the account of such branch or
Affiliate.
8.6 Discretion of Lenders as to Manner of Funding. Notwithstanding any
provision of this Agreement to the contrary, each Lender shall be entitled to
fund and maintain its funding of all or any part of its Loans in any manner it
sees fit, it being understood, however, that for the purposes of this Agreement
all determinations hereunder shall be made as if such Lender had actually
funded and maintained each Eurocurrency Loan during each Interest Period for
such Loan through the purchase of deposits having a maturity corresponding to
such Interest Period and bearing an interest rate equal to the Eurocurrency
Rate for such Interest Period.
8.7 Mitigation of Circumstances; Replacement of Affected Lender. (a)
Each Lender shall promptly notify the Company and the Administrative Agent of
any event of which it has knowledge which will result in, and will use
reasonable commercial efforts available to it (and not, in such Lender's good
faith judgment, otherwise disadvantageous to such Lender) to mitigate or avoid,
(i) any obligation by the Company to pay any amount pursuant to Section 7.6 or
8.1 and (ii) the occurrence of any circumstances of the nature described in
Section 8.2 or 8.3 (and, if any Lender has given notice of any such event
described in clause (i) or (ii) above and thereafter such event ceases to
exist, such Lender shall promptly so notify the Company and the Administrative
Agent). Without limiting the foregoing, each Lender will designate a different
funding office if such designation will avoid (or reduce the cost to the
Borrowers of) any event described in clause (i) or (ii) of the preceding
sentence and such designation will not, in such Lender's sole judgment, be
otherwise disadvantageous to such Lender.
(b) At any time any Lender is an Affected Lender, the Company may
replace such Affected Lender as a party to this Agreement with one or more
other bank(s) or financial institution(s) reasonably satisfactory to the
Administrative Agent and the Issuing Bank and, upon notice from the Company,
such Affected Lender shall assign pursuant to an Assignment Agreement, and
without recourse or warranty, its Commitment, if any, its Loans, its
participation in Letters of Credit, if any, and all of its other rights and
obligations hereunder to such replacement bank(s) or other financial
institution(s) for a purchase price equal to the sum of the principal amount of
the Loans so assigned, all accrued and unpaid interest thereon, its ratable
share of all accrued and unpaid commitment fees and Letter of Credit fees, any
amounts payable under Section 8.4 as a result of such Lender receiving payment
of any Eurocurrency Loan prior to the end of an Interest Period therefor and
all other obligations owed to such Affected Lender hereunder.
8.8 Conclusiveness of Statements; Survival of Provisions.
Determinations and statements of any Lender pursuant to Section 8.1, 8.2, 8.3
or 8.4 shall be conclusive absent demonstrable error. Lenders may use
reasonable averaging and attribution methods in determining compensation under
Sections 8.1 and 8.4, and the provisions of such Sections shall survive
repayment of the Loans and Acceptances, cancellation or expiration of the
Letters of Credit and any termination of this Agreement.
SECTION 9 WARRANTIES.
To induce the Administrative Agent and the Lenders to enter into this
Agreement, the Issuing Bank to issue Letters of Credit
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and the Lenders to make Loans, create Acceptances and purchase participations
in Letters of Credit hereunder, each Borrower warrants to the Administrative
Agent, the Issuing Bank and the Lenders that:
9.1 Organization, etc. Each Borrower is a corporation duly organized,
validly existing, and in good standing under the laws of jurisdiction of
incorporation; each Restricted Subsidiary is a corporation duly organized,
validly existing and in good standing under the jurisdiction of its
incorporation; each Borrower and each Restricted Subsidiary is duly qualified
to do business in each jurisdiction where the nature of its business makes such
qualification necessary, except where the failure to be so qualified would not
have a Material Adverse Effect; and each Borrower and each Restricted
Subsidiary has full corporate power and authority to own its property and
conduct its business as presently conducted by it.
9.2 Authorization; No Conflict. The execution and delivery by each
Borrower of this Agreement and each other Loan Document to which it is a party,
the borrowings hereunder, the execution and delivery by each Obligor of each
Loan Document to which it is a party and the performance by each of the
Borrowers and each Obligor of its obligations under each Loan Document to which
it is a party are within the corporate powers of each Borrower and each
Obligor, as applicable, have been duly authorized by all necessary corporate
action on the part of each Borrower and each Obligor (including any necessary
shareholder action), have received all necessary governmental approval (if any
shall be required), and do not and will not (a) violate any provision of law or
any order, decree or judgment of any court or other government agency which is
binding on the Borrower or any Restricted Subsidiary, (b) contravene or
conflict with, or result in a breach of, any provision of the Organic Documents
of the Borrower or any Restricted Subsidiary or of any agreement, indenture,
instrument or other document, or any judgment, order or decree, which is
binding on the Company or any Restricted Subsidiary or (c) result in, or
require, the creation or imposition of any Lien on any property of the Company
or any Restricted Subsidiary (other than pursuant to the Loan Documents).
9.3 Validity and Binding Nature. This Agreement is, and upon the
execution and delivery thereof each other Loan Document to which any Borrower
is a party will be, the legal, valid and binding obligation of such Borrower,
enforceable against such Borrower in accordance with its terms, except that
enforceability may be limited by bankruptcy, insolvency, reorganization,
moratorium or other similar laws now or hereafter in effect relating to
creditors' rights generally and by general principles of equity (regardless of
whether enforcement is sought in equity or at law); and each Loan Document to
which a Obligor is a party will be, upon the execution and delivery thereof by
such Obligor, the legal, valid and binding obligation of such Obligor,
enforceable against such Obligor in accordance with its terms, except that
enforceability may be limited by bankruptcy, insolvency, fraudulent conveyance,
fraudulent transfer, reorganization, moratorium or other similar laws now or
hereafter in effect relating to creditors' rights generally and by general
principles of equity (regardless of whether enforcement is sought in equity or
at law).
9.4 Financial Information. (a) The audited consolidated financial
statements of ▇▇▇▇▇▇▇▇▇ International as at December 31, 1995 and December 31,
1996, copies of which have been delivered to the Lenders in each case (i) are
true and correct in all material respects, (ii) have been prepared in
accordance with GAAP consistently applied throughout the periods involved
(except as disclosed therein) and (iii) present fairly the consolidated
financial condition of ▇▇▇▇▇▇▇▇▇ International at such dates and the results of
their operations for the periods then ended.
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(b) Upon delivery to the Lenders, the audited consolidated financial
statements of the Company and its Restricted Subsidiaries in the Financial
Group as at December 31, 1995 and December 31, 1996, in each case (i) are true
and correct in all material respects, (ii) have been prepared in accordance
with GAAP consistently applied throughout the periods involved (except as
disclosed therein) and (iii) present fairly the consolidated financial
condition of the Company and its Restricted Subsidiaries at such dates and the
results of their operations for the periods then ended.
(c) The forecasted consolidated balance sheet, profits and loss
statement and cash flow statement of the Financial Group (after giving effect
to the issuance of the 1997 Senior Subordinated Notes and the 1997 Senior Notes
and repayment of the Existing Credit Agreement and the FDTH Credit Agreement
required hereunder), together with supporting details and statement of
underlying assumptions dated April 7, 1997, copies of which have been delivered
to each Lender, have been prepared by the Company in light of the past
operations of the business of the Company and its Restricted Subsidiaries and
represent, as of the date of this Agreement, the good faith estimate of the
Company and its senior management of the most probable course of the business
of the Company and its Subsidiaries after giving effect to such transactions.
9.5 No Material Adverse Change. Except as disclosed in Schedule 9.5,
since December 31, 1996, no event or events have occurred which, individually
or in the aggregate, has had or is reasonably likely to have a Material Adverse
Effect.
9.6 Litigation and Contingent Liabilities. No litigation (including,
without limitation, derivative actions), arbitration proceeding or governmental
proceeding is pending or, to the Company's knowledge, threatened against the
Company or any Restricted Subsidiary in the Financial Group which, if adversely
determined, might have a Material Adverse Effect, except as set forth in
Schedule 9.6. Other than any liability incident to such litigation or
proceedings, neither the Company nor any Restricted Subsidiary in the Financial
Group has any material contingent liabilities not provided for or disclosed in
the financial statements referred to in clause (a) of Section 9.4 or listed in
Schedule 9.6.
9.7 Ownership of Properties; Liens. Each of the Company and each
Restricted Subsidiary in the Financial Group owns good and marketable title to,
or a valid leasehold interest in, all of its properties and assets, real and
personal, tangible and intangible, of any nature whatsoever (including patents,
trademarks, trade names, service marks and copyrights), free and clear of all
Liens, charges and claims (including infringement claims with respect to
patents, trademarks, copyrights and the like) except as permitted pursuant to
Section 10.8.
9.8 Subsidiaries. The Company has no Subsidiaries except those listed
in Schedule 9.8 as of the Amendment Effective Date.
9.9 Pension, Welfare and Employee Benefit Plans. Except as disclosed to
the Lenders in writing prior to the date of this Agreement, during the
twelve-consecutive-month period prior to the date of the execution and delivery
of this Agreement or the making of any Credit Extension hereunder, (a) no steps
have been taken to terminate any Pension Plan or Welfare Plan which would be
reasonably likely to result in the Company or any of its Subsidiaries being
required to make a contribution to such Pension Plan or Welfare Plan, or
incurring a liability or obligation to such Pension Plan or Welfare Plan, in
excess of $2,000,000, and (b) no contribution failure has occurred with respect
to any Pension Plan or Welfare Plan sufficient to give rise to a Lien under
Section 302(f) of ERISA or any other applicable law. No condition exists or
event or transaction has occurred with respect to any Pension Plan or Welfare
Plan which
62
could result in the incurrence by the Company or any of its Subsidiaries of any
material liability, fine or penalty under ERISA, the Code or any other
applicable law. Except as set forth on Schedule 9.9, the Financial Group has no
contingent liability with respect to any post-retirement benefit under a
Welfare Plan, other than liability for continuation coverage described in Part
6 of subtitle B of title I of ERISA. Each Employee Benefit Plan is in
compliance in all material respects with all laws, regulations and rules
applicable thereto and the respective requirements of the governing documents
for such Plan, except for any non-compliance the consequences of which, in the
aggregate, would not result in a material obligation to pay money. With respect
to any Employee Benefit Plan of a Restricted Subsidiary organized outside the
United States, (a) the aggregate of the accumulated benefit obligations under
all Employee Benefit Plans does not exceed the current fair market value of the
assets held in the trusts or similar funding vehicles for such Plans, and (b)
reasonable reserves have been established in accordance with prudent business
practice or where required by ordinary accounting practices in the jurisdiction
in which such Plan is maintained. There are no material actions, suits or
claims (other than routine claims for benefits) pending or, to the knowledge of
the Company, threatened against it or any of its Subsidiaries with respect to
any Employee Benefit Plan.
9.10 Investment Company Act. Neither the Company nor any Restricted
Subsidiary is an "investment company" or a company "controlled" by an
"investment company", within the meaning of the Investment Company Act of 1940,
as amended.
9.11 Public Utility Holding Company Act. Neither the Company nor any
Restricted Subsidiary is a "holding company", or a "subsidiary company" of a
"holding company", or an "affiliate" of a "holding company" or of a "subsidiary
company" of a "holding company", within the meaning of the Public Utility
Holding Company Act of 1935, as amended.
9.12 Regulations G, T, U and X. Neither the Company nor any of its
Subsidiaries is engaged principally, or as one of its important activities, in
the business of extending credit for the purpose of purchasing or carrying
Margin Stock.
9.13 Taxes. Each of the Company and each Restricted Subsidiary has
filed all income tax and other material tax returns and reports required by law
to have been filed by it and has paid all income taxes and other material taxes
and governmental charges thereby shown to be owing, except (a) as disclosed on
Schedule 9.6 and (b) for any such taxes or charges which are being diligently
contested in good faith by appropriate proceedings and for which adequate
reserves in accordance with GAAP shall have been set aside on its books.
9.14 Solvency, etc. On the Amendment Effective Date (or, in the case of
any Person which becomes a Obligor after the Amendment Effective Date, on the
date such Person becomes a Obligor), and immediately prior to and after giving
effect to each Credit Extension and the use of the proceeds thereof, (a) the
assets of each of the Company and each Restricted Subsidiary which is a Obligor
will exceed its liabilities and (b) each of the Company and each Restricted
Subsidiary which is a Obligor will be solvent, will be able to pay its debts as
they mature, will own property with fair saleable value greater than the amount
required to pay its debts and will have capital sufficient to carry on its
business as then constituted.
9.15 Insurance. Set forth on Schedule 9.15 is a complete and accurate
summary of the property, casualty and business interruption insurance program
carried by the Company and its Restricted Subsidiaries in the Financial Group
on the date of this Agreement, including the insurer's(s') name(s), policy
number(s), expiration date(s), amount(s) of coverage, type(s) of coverage, the
annual premium(s), exclusions, deductibles and self-insured retention and a
description in reasonable detail of
63
(a) any retrospective rating plan, fronting arrangement or other self-insurance
or risk assumption agreed to by the Company or any Restricted Subsidiary in the
Financial Group or imposed upon the Company or any Restricted Subsidiary in the
Financial Group by any such insurer and (b) any self-insurance program that is
in effect.
9.16 Contracts; Labor Matters. Except as disclosed on Schedule 9.16:
(a) neither the Company nor any Restricted Subsidiary in the Financial Group is
a party to any contract or agreement, or is subject to any charge, corporate
restriction, judgment, decree or order, which has a Material Adverse Effect;
(b) no material labor contract to which the Company or any Restricted
Subsidiary in the Financial Group is a party or is otherwise subject is
scheduled to expire prior to the Commitment Termination Date; (c) neither the
Company nor any Restricted Subsidiary in the Financial Group has, within the
two-year period preceding the date of this Agreement, taken any action which
would have constituted or resulted in a "plant closing" or "mass layoff" within
the meaning of the Federal Worker Adjustment and Retraining Notification Act of
1988 or any similar applicable federal, state, local or foreign law or
redundancy on a large scale, and the Company has no reasonable expectation that
any such action is or will be required at any time prior to the Commitment
Termination Date; and (d) on the Amendment Effective Date there are no strikes
or walkouts relating to any labor contracts to which the Company or any
Restricted Subsidiary in the Financial Group is a party or is otherwise
subject.
9.17 Environmental and Safety and Health Matters. Except as disclosed
on Schedule 9.17, the Company and each of its Subsidiaries and each property,
operation and facility that the Company or any Subsidiary may own, operate or
control (i) complies in all material respects with (A) all applicable
Environmental Laws and (B) all applicable Occupational Safety and Health Laws;
(ii) is not subject to any judicial or administrative proceeding alleging the
violation of any Environmental Law or Occupational Safety and Health Law; (iii)
has not received any notice (A) that it may be in violation of any
Environmental Law or Occupational Safety and Health Law, or (B) threatening the
commencement of any proceeding relating to allegedly unlawful, unsafe or
unhealthy conditions or (C) alleging that it is or may be responsible for any
response, cleanup, or corrective action, including, but not limited to, any
remedial investigation/feasibility study, under any Environmental Law or
Occupational Safety and Health Law; (iv) has not received any notice that it is
the subject of federal or state investigation evaluating whether any
investigation, remedial action or other response is needed to respond to (A) a
spillage, disposal or release or threatened release into the environment of any
Regulated Material, or (B) any alleged violation of any Occupational Safety and
Health Law; (v) has not filed any notice under or relating to any Environmental
Law or Occupational Safety and Health Law indicating or reporting (A) any past
or present spillage, disposal or release (other than permitted releases) into
the environment of, or treatment, storage or disposal of (other than permitted
releases), any Regulated Material in excess of quantities requiring
notification under any Environmental Law, or (B) any violation of any
Occupational Safety and Health Law and (vi) to the best knowledge of the
Company has no material contingent liability in connection with (A) any actual
or potential spillage, disposal or release into the environment of, or
otherwise with respect to, any Regulated Material, whether on any premises
owned or occupied by the Company or any Subsidiary or on any other premises or
(B) any unsafe or unhealthful condition. Except as disclosed on Schedule 9.17,
there are no Regulated Materials on, in or under any property or facilities,
owned, operated or controlled by the Company or any Subsidiary (except
Regulated Materials used in the ordinary course of the business of the Company
and its Subsidiaries and used, stored, handled, treated and disposed of in all
material respects in accordance with all applicable Environmental Laws and
64
Occupational Safety and Health Laws) that, under applicable Environmental
Laws or Occupational Safety and Health Laws (A) impose or could reasonably be
expected to impose a liability for removal, remediation, or other cleanup or
damage to natural resources, in an amount equal to or greater than $500,000;
(B) could reasonably be expected to have a Material Adverse Effect; or (C)
could reasonably be expected to result in the imposition of a Lien on the
property or other assets of the Company or its Subsidiaries.
9.18 Information. All written information heretofore or
contemporaneously herewith furnished by or on behalf of the Company or any
Restricted Subsidiary to the Administrative Agent or any Lender for purposes of
or in connection with this Agreement and the transactions contemplated hereby
is, and all written information hereafter furnished by or on behalf of the
Company or any Restricted Subsidiary to the Administrative Agent or any Lender
pursuant hereto or in connection herewith will be, true and accurate in every
material respect on the date as of which such information is dated or
certified, and none of such information is or will be incomplete by omitting to
state any material fact necessary to make such information not misleading.
9.19 Senior Subordinated Indenture. The obligations of the Borrowers
under this Agreement and the other Loan Documents constitute "Senior
Indebtedness" under the terms of the 1996 Senior Subordinated Indenture and the
1997 Senior Subordinated Indenture and "Pari Passu Indebtedness" under the 1997
Senior Indenture. The obligations of the Company under this Agreement and the
other Loan Documents constitute "Indebtedness" and the obligations of the
Canadian Borrower, the U.K. Borrower and the Acquisition Borrower under this
Agreement and the other Loan Documents constitute "Foreign Subsidiary
Indebtedness" under the terms of the "New Bank Credit Facility" as such term is
defined in the 1996 Senior Subordinated Indenture, the 1997 Senior Subordinated
Indenture and the 1997 Senior Indenture.
9.20 Financial Assistance. The granting of the security interests and
the giving of the guarantees by the U.K. Borrower and its Restricted
Subsidiaries and by Canada Holdings and the Canadian Borrower and its
Restricted Subsidiaries as contemplated by the Loan Documents and the
implementation and consummation of any of the transactions contemplated herein
has not constituted or involved, and will not constitute or involve, any
arrangement amounting to unlawful financial assistance for the acquisition of
shares within the meaning of Section 151 of the Companies ▇▇▇ ▇▇▇▇ or any
similar Canadian law.
SECTION 10 COVENANTS.
Until the expiration or termination of the Commitments and thereafter
until all obligations of the Borrowers hereunder and under the other Loan
Documents are paid in full and all Letters of Credit and Acceptances have been
terminated or expired (regardless of whether such Letters of Credit and
Acceptances have been cash collateralized), the Company agrees (and each
Borrower with respect to itself and its Restricted Subsidiaries agrees) that,
unless at any time the Required Lenders shall otherwise expressly consent in
writing, it will:
10.1 Reports, Certificates and Other Information. Furnish to the
Administrative Agent and each Lender at its respective office:
10.1.1 Annual Report. Promptly when available and in any event within
90 days after the close of each Fiscal Year, (a) a copy of the annual report of
the Company and its Restricted Subsidiaries in the Financial Group for such
Fiscal Year, including therein consolidated balance sheets of the Company and
such Restricted Subsidiaries as of the end of such Fiscal Year and consolidated
statements of earnings and cash flow of the Company and such Restricted
Subsidiaries for such Fiscal Year,
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which report (i) shall be prepared in accordance with GAAP and certified by
independent auditors of recognized national standing selected by the Company
and reasonably acceptable to the Required Lenders, in an audit report which
shall be without qualification as to going concern or scope and (ii) shall be
accompanied by a written statement from such auditors to the effect that in
making the examination necessary for the signing of such audit report they have
not become aware of any Event of Default or Unmatured Event of Default that has
occurred and is continuing or, if they have become aware of any such event,
describing it in reasonable detail; and (b) a copy of the consolidating balance
sheets of the Company and its Restricted Subsidiaries in the Financial Group as
of the end of such Fiscal Year and consolidating statements of earnings for the
Company and such Restricted Subsidiaries for such Fiscal Year, together with a
certificate signed by one of the chief executive officer, the chief financial
officer, the chief operating officer or the Vice President-Finance of the
Company certifying that such financial statements fairly present the financial
condition and results of operations of the Company and such Restricted
Subsidiaries as of the dates and periods indicated.
10.1.2 Quarterly Reports. Promptly when available and in any event
within 45 days after the end of the first three Fiscal Quarters of each Fiscal
Year, consolidated balance sheets of the Company and its Restricted
Subsidiaries in the Financial Group as of the end of such Fiscal Quarter and
consolidated statements of earnings and consolidated statements of cash flow
for such Fiscal Quarter and for the period beginning with the first day of such
Fiscal Year and ending on the last day of such Fiscal Quarter, including a
comparison with the corresponding Fiscal Quarter and period of the previous
Fiscal Year and prepared in accordance with GAAP, together with a certificate
signed by one of the chief executive officer, the chief financial officer, the
chief operating officer or the Vice President-Finance of the Company to the
effect that such financial statements fairly present the financial condition
and results of operations of the Company and such Restricted Subsidiaries as of
the dates and periods indicated, subject to changes resulting from normal
year-end adjustments.
10.1.3 Certificates. Contemporaneously with the furnishing of a copy of
each annual audit report pursuant to Section 10.1.1, and commencing on June 30,
1997, each set of statements pursuant to Section 10.1.2, a duly completed
certificate in the form of Exhibit B, with appropriate insertions, dated the
date of such annual report or such quarterly statements and signed by one of
the chief executive officer, the chief financial officer, the Vice President of
Finance, the chief operating officer or the controller of the Company,
containing a computation of each of the financial ratios and restrictions set
forth in this Section 10 and to the effect that such officer has not become
aware of any Event of Default or Unmatured Event of Default that has occurred
and is continuing or, if there is any such event, describing it and the steps,
if any, being taken to cure it.
10.1.4 Southam Reports. Contemporaneously with the furnishing of each
set of financial statements pursuant to Section 10.1.1 and 10.1.2, the
corresponding annual audited report or financial statements for Southam and its
Subsidiaries.
10.1.5 Reports to SEC and to Shareholders. Promptly upon the filing or
sending thereof, a copy of (a) any annual, periodic or special report or
registration statement (inclusive of exhibits thereto) filed by the Company or
any of its Restricted Subsidiaries with the SEC or any securities exchange and
(b) any report, proxy statement or similar communication to the public
shareholders of the Company or any of its Restricted Subsidiaries, if any.
10.1.6 Notice of Default, Litigation and ERISA Matters. Promptly (and
in any event within one Business Day in the case of clause (a) and within five
days in the case of clauses (b)
66
through (e)) after any officer of the Company or any Restricted Subsidiary
learns of any of the following, written notice describing the same and the
steps being taken by the Company or the Restricted Subsidiary affected thereby
with respect thereto: (a) the occurrence of an Event of Default or an Unmatured
Event of Default; (b) any litigation, arbitration or governmental investigation
or proceeding not previously disclosed by the Company to the Lenders which has
been instituted or, to the knowledge of the Company, is threatened against the
Company or any Restricted Subsidiary or to which any of the properties of any
thereof is subject which has had or is reasonably likely to have a Material
Adverse Effect; (c) any material adverse development which occurs in any
litigation, arbitration or governmental investigation or proceeding previously
disclosed on Schedule 9.6 or pursuant to clause (b); (d) the institution of any
steps by the Company, any of its Subsidiaries or any other Person to terminate
any Pension Plan, or the failure to make a required contribution to any Pension
Plan if such failure is sufficient to give rise to a Lien under Section 302(f)
of ERISA, or the taking of any action with respect to a Pension Plan which
could result in the requirement that the Company furnish a bond or other
security to the PBGC or such Pension Plan, or the occurrence of any event with
respect to any Pension Plan which could result in the incurrence by the Company
or any Restricted Subsidiary of any material liability, fine or penalty, or any
material increase in the contingent liability of the Company or any Restricted
Subsidiary with respect to any post-retirement Welfare Plan benefit; and (e)
the occurrence of any other event or circumstance which has had or is
reasonably likely to have a Material Adverse Effect.
10.1.7 Subsidiaries. Promptly upon the occurrences thereof, a written
report of any change in the list of its Restricted Subsidiaries.
10.1.8 Management Reports. Promptly upon the request of the
Administrative Agent or any Lender, copies of all detailed financial and
management reports submitted to the Company or any of its Restricted
Subsidiaries by independent auditors in connection with any annual or interim
audit made by such auditors of the books of the Financial Group.
10.1.9 Insurance Information. Not later than 90 days after the end of
each Fiscal Year, a complete and accurate summary of the property, business
interruption and casualty insurance program of the Financial Group containing
substantially the same information with respect to such insurance program as
the information set forth on Schedule 9.15; and promptly upon the occurrence
thereof, a written report of any change in the Company's insurance program
which will materially reduce the amount or scope of coverage of any type of
insurance.
10.1.10 Annual Budget. Not later than the earlier of (a) the date the
annual report is required to be delivered pursuant to Section 10.1.1 and (b)
the date on which preparation of such budget is completed, a copy of the
Company's annual budget for the next succeeding Fiscal Year.
10.1.11 Post-Closing Forecasts. Not later than thirty days after the
Amendment Effective Date, forecasted consolidating balance sheet, profits and
loss statement and cash flow statements of the Financial Group (after giving
effect to the transactions contemplated hereby, including the Canadian
Acquisition) for each of the next seven years.
10.1.12 Other Information. Promptly from time to time, such other
information concerning the Company and its Restricted Subsidiaries as any
Lender or the Administrative Agent may reasonably request.
10.2 Books, Records and Inspections. Keep, and cause each Restricted
Subsidiary to keep, proper books and records in which
67
full and correct entries shall be made sufficient to allow the preparation of
financial statements in accordance with GAAP; permit, and cause each Restricted
Subsidiary in the Financial Group to permit, on reasonable notice and at
reasonable times and intervals any Lender, the Administrative Agent or any
representative thereof to (a) visit and inspect the properties of the Company
or any of its Restricted Subsidiaries in the Financial Group during normal
business hours, (b) inspect and make extracts from and copies of their
respective books and records, and (c) discuss with their respective principal
officers their respective businesses, operations and financial matters. The
Company and each of its Restricted Subsidiaries in the Financial Group will (i)
after the occurrence and during the continuance of any Event of Default and
(ii) otherwise with the consent of the Company, which consent shall not be
unreasonably withheld, also permit any Lender, the Administrative Agent or any
representative thereof to discuss with the Company's independent auditors their
respective businesses, operations and financial matters, provided that the
Company is given reasonable prior notice of and an opportunity to attend any
meeting between such auditors and any Lender, the Administrative Agent or any
representative thereof at which such issues will be discussed. All visits,
discussions, and examinations by the Administrative Agent shall be at the
Company's expense.
10.3 Insurance. Maintain, and cause each Restricted Subsidiary in the
Financial Group to maintain, with reputable, financially sound insurance
companies (in all cases rated at least A- by A.M. Best & Co. or the equivalent
in the applicable jurisdiction), insurance to such extent and against such
hazards and liabilities as is customarily maintained by companies similarly
situated (and, in any event, such insurance as may be required by any law or
governmental regulation or any court order or decree); and, upon request of the
Administrative Agent or any Lender, furnish to the Administrative Agent or such
Lender a certificate setting forth in reasonable detail the nature and extent
of all insurance maintained by the Company and its Subsidiaries.
10.4 Compliance with Laws; Maintenance of Property; Payment of Taxes
and Liabilities. (a) Comply, and cause each Restricted Subsidiary to comply, in
all material respects with all applicable laws, rules, regulations and orders
the noncompliance with which would be reasonably likely to have a Material
Adverse Effect; (b) maintain or cause to be maintained, and cause each
Restricted Subsidiary to maintain or cause to be maintained, in good repair,
working order and condition all material properties used in its business, and
make, and cause each Restricted Subsidiary to make, all appropriate repairs,
renewals and replacements of such properties; (c) pay, and cause each
Subsidiary to pay, prior to delinquency, all taxes and other governmental
charges against it or any of its property; provided, however, that the
foregoing shall not require the Company or any Subsidiary to pay any such tax
or charge so long as it shall contest the validity thereof in good faith by
appropriate proceedings and shall set aside on its books adequate reserves with
respect thereto; and (d) not, and not permit any Restricted Subsidiary to, file
or consent to the filing of any consolidated income tax return with any Person
other than the Company and its Subsidiaries.
10.5 Maintenance of Existence, etc. Maintain and preserve, and (subject
to Section 10.11) cause each Restricted Subsidiary in the Financial Group to
maintain and preserve, (a) its existence and good standing in the jurisdiction
of its incorporation, (b) its qualification and good standing as a foreign
corporation in each jurisdiction where the nature of its business makes such
qualification necessary (except in those instances in which the failure to be
qualified or in good standing would not be reasonably likely to result in a
Material Adverse Effect), and (c) each other corporate franchise the failure or
absence of which would have a Material Adverse Effect.
68
10.6 Financial Covenants.
10.6.1 Total Leverage Ratio. Not permit the Total Leverage Ratio to
exceed (a) 7.25:1.0 at any time prior to the Canadian Acquisition Date, nor (b)
at any time on or after the Canadian Acquisition Date, but prior to the Tranche
D Availability Date, the ratio set forth opposite such period under the column
heading "Post Canadian Acquisition" in the table below, nor (c) at any time on
or after the Tranche D Availability Date the ratio set forth opposite such
period under the column heading "Post Approved Acquisition" in the table below;
provided, however, that, prior to the Tranche D Availability Date, if the Asset
Coverage Ratio is less than 0.60:1.0, the Total Leverage Ratio shall not at any
time exceed 6.00:1.0 with such stepdowns as the Required Lenders may determine
to be appropriate.
Post Canadian
Period Acquisition
Canadian Acquisition
Date to 09/29/97 6.75:1.0
09/30/97 to 03/30/98 6.50:1.0
03/31/98 to 12/30/98 6.00:1.0
12/31/98 to 06/29/99 5.00:1.0
06/30/99 to 12/30/99 4.50:1.0
12/31/99 to 12/30/00 4.25:1.0
12/31/00 and thereafter 4.00:1.0
Post Approved
Period Acquisition
Tranche D Availability
Date to 03/30/98 6.00:1.0
03/31/98 to 12/30/98 5.50:1.0
12/31/98 to 06/29/99 5.00:1.0
06/30/99 to 12/30/99 4.75:1.0
12/31/99 to 12/30/00 4.50:1.0
12/31/00 and thereafter 4.00:1.0
10.6.2 Senior Leverage Ratio. Not permit the Senior Leverage Ratio to
exceed (a) prior to the Tranche D Availability Date, the ratio set forth
opposite such period under the heading "Pre Approved Acquisition" in the table
below, and (b) after the Tranche D Availability Date, the ratio set forth
opposite such period under the heading "Post Approved Acquisition" in the table
below.
Post Approved
Period Acquisition
Canadian Acquisition
Date to 09/29/97 4.25:1.0
09/30/97 to 12/30/98 4.00:1.0
12/31/98 to 12/30/99 3.50:1.0
12/31/99 to 12/30/00 3.25:1.0
12/31/00 and thereafter 3.00:1.0
Post Approved
Period Acquisition
Tranche D Availability
Date to 03/30/98 4.25:1.0
03/31/98 to 12/30/99 4.00:1.0
12/31/98 to 12/30/99 3.75:1.0
12/31/99 to 12/30/00 3.50:1.0
12/31/00 and thereafter 3.00:1.0
69
10.6.3 Interest Coverage Ratio. Not permit the Interest Coverage Ratio
to be less than the ratio set forth opposite the applicable period below as of
any Computation Period falling within such period.
Period Ratio
------ -----
01/01/97 to 06/29/98 1.50:1.0
06/30/98 to 03/30/99 1.75:1.0
03/31/99 and thereafter 2.00:1.0
10.6.4 Fixed Charge Coverage Ratio. Not permit the Fixed Charge Coverage
Ratio to be less than (a) prior to the Tranche D Availability Date, the ratio
set forth opposite such period under the column heading "Pre Approved
Acquisition" in the table below and (b) on or after the Tranche D Availability
Date, 1.15:1.0:
Pre Approved
Period Acquisition
Amendment Effective
Date to 06/29/98 1.05:1.0
06/30/98 and thereafter 1.10:1.0
10.6.5 Asset Coverage Ratio. Not permit the Asset Coverage Ratio to be
less than 0.60:1.0 at any time prior to the Tranche D Availability Date. After
the earlier of (a) the Tranche D Availability Date or (b) the Commitment
reduction pursuant to Section 6.1.2(b), this Section shall no longer be
applicable.
10.6.6 Computation of Financial Covenants. For purposes of calculating
any financial covenant contained in this Section 10.6, any accounting
adjustments or the reversal of any reserves established in connection therewith
shall not affect the calculation of such financial covenant. Upon the
implementation of any accounting adjustments, the financial statements
delivered hereunder and the financial covenants shall be prepared without
regard to such adjustments until a mutually satisfactory amendment to the
financial covenants has been implemented.
10.7 Limitations on Debt. Not, and not permit any Restricted Subsidiary
in the Financial Group to, create, incur, assume or suffer to exist any Debt,
except (a) obligations arising under the Loan Documents; (b) Debt of Restricted
Subsidiaries under the Subsidiary Notes, in each case which is evidenced by one
or more promissory notes (in form and substance satisfactory to the
Administrative Agent) and (other than existing intercompany notes of
subsidiaries of AP-91 subject to the Note Purchase Agreements) shall have been
delivered in pledge to the Administrative Agent; provided that to the extent
such Debt is owed by one of the Borrowers, the holder of such Debt has
previously executed and delivered to the Administrative Agent a subordination
agreement in form and substance satisfactory to the Administrative Agent;
provided, further, that the Debt of Palestine Post under the Jerusalem Post
Note shall not exceed $18,000,000 in the aggregate at any time, other than as a
result of currency fluctuation; (c) unsecured Debt of the Company to its
Restricted Subsidiaries provided such debt is subordinated to the Obligations
on terms and conditions satisfactory to the Required Lenders; (d) Hedging
Agreements entered into by the Borrowers; (e) Guarantee Obligations in respect
of any obligation of the Company or any Restricted Subsidiary permitted under
this Agreement (other than clause (m)); (f) Debt in respect of taxes,
assessments or governmental charges to the extent that payment thereof shall
not at the time be required to be made in
70
accordance with Section 10.4; (g) Debt (other than Debt of the U.K. Borrower
referred to in clause (h)) outstanding on the Amendment Effective Date and
listed on Schedule 10.7 under the heading "Continuing Debt" and other Debt
hereafter incurred by Restricted Subsidiaries in connection with Liens
permitted by Section 10.8, and extensions, renewals and refinancing of any Debt
described in this clause (g) so long as the permitted or available principal
amount thereof is not increased; (h) Debt of the U.K. Borrower outstanding on
the Amendment Effective Date not exceeding $60,000,000 and listed on Schedule
10.7 under the heading "Continuing Debt" (for purposes of calculating the
amount of Continuing Debt, the amount of the U.K. Borrower's net obligations,
if any, under each Hedging Agreement (determined on the ▇▇▇▇-to-market value
for such Hedging Agreement based upon a readily available quotation provided by
a recognized dealer in such Hedging Agreements) shall be included) and Debt of
the Canadian Borrower or its Restricted Subsidiaries to be acquired on the
Canadian Acquisition Date not exceeding $1,000,000 and listed on Schedule 10.7
under the heading "Continuing Debt"; (i) Debt under the AP-91 Senior Notes; (j)
Debt under the 1996 Senior Subordinated Notes, 1997 Senior Notes, the 1997
Senior Subordinated Notes and other Subordinated Debt under clause (b) of the
definition of Subordinated Debt; (k) Debt under the FDTH Loan Notes; (l)
Acquisition Debt (including Acquisition Debt listed on Schedule 10,.7 under the
heading "Continuing Debt") not to exceed $30,000,000 in the aggregate at any
time during this Agreement; or (m) Debt of a Restricted Subsidiary incorporated
in the United States in respect of the Sun-Times Plant not exceeding
$100,000,000.
10.8 Liens. Not, and not permit any Restricted Subsidiary in the
Financial Group to, create or permit to exist any Lien on any of its real or
personal properties, assets or rights of whatsoever nature (whether now owned
or hereafter acquired), except (a) Liens for taxes or other governmental
charges not at the time delinquent or thereafter payable without penalty or
being contested in good faith by appropriate proceedings and, in each case, for
which it maintains adequate reserves in accordance with GAAP; (b) Liens arising
in the ordinary course of business (such as (i) Liens of carriers,
warehousemen, mechanics and materialmen and other similar Liens imposed by law
and (ii) Liens incurred in connection with worker's compensation, unemployment
compensation and other types of social security (excluding Liens arising under
ERISA)) or in connection with surety and appeal bonds, bids, performance bonds
and similar obligations for sums not overdue or being contested in good faith
by appropriate proceedings and not involving any deposits or advances or
borrowed money or the deferred purchase price of property or services, and, in
each case, for which it maintains adequate reserves; (c) Liens identified on
Schedule 10.8; (d) any Lien arising in connection with the acquisition,
construction or improvement of tangible personal property by a Restricted
Subsidiary in the Financial Group and attaching only to the property being
acquired, constructed or improved, if the Lien and the Debt secured thereby
does not exceed 100% of the cost of such Acquisition, cost or improvement, as
the case may be, nor $25,000,000 in the aggregate of all such Debt of the
Company and such Restricted Subsidiaries at any one time outstanding; (e)
attachments, judgments and other similar Liens, for sums not exceeding
$5,000,000 ($3,000,000 with respect to any Restricted Subsidiary) (excluding
any portion thereof which is covered by insurance so long as the insurer is
reasonably likely to be able to pay) arising in connection with court
proceedings, provided the execution or other enforcement of such Liens is
effectively stayed and claims secured thereby are being actively contested in
good faith and by appropriate proceedings and have been bonded off or for which
adequate reserves are maintained; (f) easements, party wall agreements, rights
of way, restrictions, minor defects or irregularities in title and other
similar Liens not interfering in any material respect with the ordinary conduct
of the business of the Company and its Restricted Subsidiaries taken as a
whole; (g) leases or subleases granted by the Company or any
71
Restricted Subsidiary in the ordinary course of its business; (h) extensions,
renewals or replacements of any Lien permitted by the foregoing provisions of
this Section 10.8, but only if the principal amount of the Debt secured thereby
immediately prior to such extension, renewal or replacement is not increased
and such Lien is not extended to any other property; (i) Liens securing the
FDTH Credit Agreement (provided that such Liens shall be terminated on or
before the Amendment Effective Date); (j) Liens pursuant to the Subsidiary
Security Agreements; and (k) Liens in favor of the Administrative Agent.
10.9 Limitation on Restricted Payments. (a) Not, and not permit any
Restricted Subsidiary in the Financial Group to, directly or indirectly:
(i) declare or pay any dividend or make any other distribution or
payment on or in respect of the Company's Capital Stock, or make any payment or
other distribution to (including dividends or distributions of the Capital
Stock of any Restricted Subsidiary in the Financial Group), or make any other
payment to the direct or indirect holders (in their capacities as such) of the
Company's Capital Stock (other than dividends or distributions payable in
shares of the Company's Qualified Capital Stock or in options, warrants or
other rights to acquire such Qualified Capital Stock);
(ii) purchase, redeem or otherwise acquire or retire for value,
directly or indirectly, any Capital Stock of the Company or any Capital Stock
of any Affiliate of the Company (other than Capital Stock of any Wholly Owned
Restricted Subsidiary or Capital Stock of a Person that, immediately following
such repurchase, will become a Wholly Owned Restricted Subsidiary) or options,
warrants or other rights to acquire such Capital Stock;
(iii) make any principal payment on, or repurchase, redeem, defease,
retire or otherwise acquire for value, prior to any scheduled principal
payment, sinking fund payment or maturity, the 1997 Senior Notes or any
Subordinated Debt;
(iv) declare or pay any dividend or distribution on any Capital Stock
of any Restricted Subsidiary in the Financial Group to any Person (other than
(x) with respect to any Capital Stock held by the Company or any of its Wholly
Owned Restricted Subsidiaries or (y) with respect to Capital Stock of a
Restricted Subsidiary held by any other Person (other than an Affiliate of the
Company or an Affiliate of such Affiliate) made on a pro rata basis consistent
with the ownership interests in such Capital Stock to the owners of such
Capital Stock, except that, in the case of the Capital Stock of a Restricted
Subsidiary that is an Obligor, (i) no Unmatured Event of Default or Event of
Default shall have occurred and be continuing and (ii) no holders of any other
Debt of the Company or any Restricted Subsidiary shall have an Acceleration
Right);
(v) incur, create or assume any guarantee of Debt of any Affiliate of
the Company (other than a Restricted Subsidiary of the Company in the Financial
Group);
(vi) make any Investment in any Person (other than any Investments
permitted under Section 10.10);
(vii) pay any Management Fees; or
(viii) designate any Restricted Subsidiary as an Unrestricted
Subsidiary;
(any of the payments described in paragraphs (i) through (viii) above, other
than any such action that is a Permitted Payment (as defined below),
collectively, "Restricted Payments").
72
Notwithstanding the foregoing, the Company may make Restricted Payments (1)
pursuant to paragraph (i) above in an amount equal to the sum of: (A) the
regular quarterly dividend declared by ▇▇▇▇▇▇▇▇▇ International on its common
stock (provided that such dividend does not exceed $0.10 per share) plus (B)
the regular quarterly dividend paid by ▇▇▇▇▇▇▇▇▇ International pursuant to its
PRIDES (provided that such dividend does not exceed $0.2377 per share for each
half share represented by a PRIDES) plus (C) the regular quarterly dividends
paid by ▇▇▇▇▇▇▇▇▇ International pursuant to its ▇▇▇▇▇▇▇▇▇ PRIDES (provided that
such dividend does not exceed $0.2377 per share for each half share represented
by a ▇▇▇▇▇▇▇▇▇ PRIDES) and, prior to conversion into common stock, dividends on
the Series 1 and Series 2 Preferred Stock of ▇▇▇▇▇▇▇▇▇ International to be
issued in connection with the Canadian Acquisition in an aggregate amount
which, had such Preferred Stock been converted into ▇▇▇▇▇▇▇▇▇ International
common stock, would not exceed the amount which would have been permitted to be
paid on such common stock after conversion plus (D) prior to the Redemption
Date, the regular quarterly dividends (without duplication) on the DTH
Preference Shares and the FDTH Series A and Series B Preference Shares;
provided, that notwithstanding the foregoing, Restricted Subsidiaries (whether
direct or indirect) shall not be restricted from paying dividends or making
other distributions to the Borrowers or any shareholder of such Subsidiary that
is a Restricted Subsidiary; and provided, further, that (x) no Unmatured Event
of Default or Event of Default shall have occurred and be continuing or shall
result from the payment of such Restricted Payment, and (y) no holders
of any other Debt of the Company or any Restricted Subsidiary shall have an
Acceleration Right; and (2) pursuant to paragraphs (i), (iv) and (vii) above,
consisting of (A) Management Fees, (B) additional dividends to ▇▇▇▇▇▇▇▇▇
International, (C) dividends on stock of Restricted Subsidiaries owned by
▇▇▇▇▇▇▇▇▇ International, ▇▇▇▇▇▇▇▇▇ Inc., or FDTH, and (D) interest on any
Subordinated Debt owed by the Company or any Restricted Subsidiary to ▇▇▇▇▇▇▇▇▇
International (collectively, "Additional Restricted Payments") (w) at any time
the Total Leverage Ratio is less than 5.00:1.00, after deducting such
Additional Restricted Payments from Adjusted Operating Cash Flow and (x) at any
time when the Total Leverage Ratio is greater than or equal to 5.0:1.0 but less
than 6.0:1.0, after deducting such Additional Restricted Payments from Adjusted
Operating Cash Flow, the lesser of (i) $5,000,000 and (ii) Excess Cash Flow for
the preceding Fiscal Quarter; provided, however, no (y) Unmatured Event of
Default or Event of Default shall have occurred and be continuing or shall
result from the payment of such Restricted Payment, and (z) no holders of any
other Debt of the Company or any Restricted Subsidiary shall have an
Acceleration Right.
(b) Notwithstanding the foregoing so long as (1) no Unmatured Event of
Default or Event of Default has occurred and is continuing or would result
therefrom and (2) no holders of any other Debt of the Company or any Restricted
Subsidiary have an Acceleration Right, the foregoing provisions will not
prohibit the following actions (clauses (i) through (iii) being referred to as
"Permitted Payments"):
(i) dividends paid to ▇▇▇▇▇▇▇▇▇ International after the Amendment
Effective Date and prior to the date the Series A Preferred Shares have been
redeemed to the extent not in excess of the Southam Dividend Amount, such
amount to be reduced to the extent some or all of such Series A Preferred
Shares have been partially redeemed;
(ii) loans, advances, dividends or distributions by any Restricted
Subsidiary to the Company or any Wholly-Owned Restricted Subsidiary or to
▇▇▇▇▇▇▇▇▇ International for the purpose of redeeming shares of Series A
Preferred Shares not exceeding in the aggregate any payments made by ▇▇▇▇▇▇▇▇▇
Inc. pursuant to the provisions of the HTH/FDTH Share Exchange Agreement;
73
(iii) prior to the Redemption Date, payment by FDTH of dividends to
Argsub Limited in respect of the 600 Fourth Preference Shares issued by FDTH
and held by Argsub Limited to the extent an equal dividend amount is paid to
and received by FDTH in respect of the Argsub Preference Shares held by it;
(iv) the loans, advances, dividends or distribution by any Restricted
Subsidiary to the Company or any Restricted Subsidiary or to ▇▇▇▇▇▇▇▇▇
International for the purpose of redeeming shares of Series A Preferred Shares
(x) in an amount not exceeding in the aggregate 1/2 of the Net Cash Proceeds
which were received by DTHBV in payment of the promissory note dated January 9,
1997 from SNCFE Limited plus (y) on the Tranche D Availability Date or any date
when the Total Leverage Ratio is less than 6.0:1.0, in an amount not to exceed
the redemption price of the then outstanding Series A Preferred Shares;
(v) payments under the Tax Indemnity Agreements; and
(vi) tax payments pursuant to the Tax Allocation Agreement to the
extent that the aggregate amount of such payments do not exceed the aggregate
amount of the tax payments that the Company and its Restricted Subsidiaries
would have been required to make if they alone constituted a single
consolidated tax group.
10.10 Investments. Not, and not permit any Restricted Subsidiary in the
Financial Group to, make, incur, assume or suffer to exist any Investment in
any other Person, except:
(a) Investments existing on the Amendment Effective Date and
identified in Schedule 10.10;
(b) Cash Equivalent Investments;
(c) Investments by the Company in its Restricted Subsidiaries in the
Financial Group (subject to the limitation in Section 10.7(b)) or by any
Restricted Subsidiary in the Financial Group, in the form of contributions to
capital or loans or advances; provided that, (i) any loans are evidenced by
Subsidiary Notes which have been pledged pursuant to a Pledge Agreement, (ii)
the aggregate amount of Investments in Dormant Subsidiaries after the Amendment
Effective Date shall not exceed $10,000 and (iii) immediately before and after
giving effect to such Investment, no Unmatured Event of Default or Event of
Default shall have occurred and be continuing;
(d) Investments by the Company or any Restricted Subsidiary in any
Restricted Subsidiary in the form of capital contributions or loans and
advances existing on the date hereof;
(e) loans or advances made by any Restricted Subsidiary to the
Company;
(f) loans or advances to officers and employees of the Company or of
any Restricted Subsidiary for travel or other ordinary business expenses not in
excess of $250,000 in the aggregate at any time;
(g) extensions of credit in the nature of accounts receivable or notes
receivable arising from the sale of goods and services in the ordinary course
of business;
(h) shares of stock, obligations or other securities received in
settlement of claims arising in the ordinary course of business; and
(i) investments in any Unrestricted Subsidiary or in any joint venture
or other entity ("Additional Investments")
74
in an amount not exceeding $10,000,000 in the aggregate since the Amendment
Effective Date.
Notwithstanding any provision in this Section 10.10, (i) neither the
Company nor any of its Subsidiaries shall make any Investment in AP-91 or its
Subsidiaries, except for investments in connection with scheduled principal
payments on the AP-91 Notes in an amount not to exceed such scheduled principal
payments, unless AP-91 and its Subsidiaries shall have executed Loan Documents
as required by Section 10.28, and (ii) neither the Company nor any of its
Subsidiaries shall make any additional Investments in the Israeli Subsidiaries
or in DHBV or DTHBV, and (iii) neither the Company nor any of its Restricted
Subsidiaries in the Financial Group shall make any Investments in Southam or
its Subsidiaries.
10.11 Mergers, Consolidations, Sales, Acquisitions. Not, and not permit
any Restricted Subsidiary in the Financial Group to, be a party to any merger,
consolidation, Asset Sale, or to purchase or otherwise acquire all or
substantially all of the assets or any stock of any class of, or any
partnership or joint venture interest in, any other Person except for
(a) any such merger or consolidation, sale, transfer, conveyance, lease
or assignment of or by any Restricted Subsidiary into, with or to any other
Wholly-Owned Restricted Subsidiary, provided such Subsidiaries are incorporated
in the same country and are Obligors (or the surviving Subsidiary is an
Obligor);
(b) any such purchase or other acquisition by the Company or any Wholly
Owned Restricted Subsidiary of the assets or stock of any Wholly Owned
Restricted Subsidiary; provided that FDTH and the Company shall only be
permitted to exchange Capital Stock of the Canadian Borrower held by FDTH for
the Capital Stock of the U.K. Borrower held by the Company in accordance with
the Publishing/FDTH Exchange Agreement provided FDTH shall have made the
election referred to in Section 10.28(b) and concurrent with such exchange
shall comply with Section 10.28(b);
(c) Asset Sales and Asset Swaps provided (i) Asset Sales and Assets
Swaps are on an arms-length basis for fair market value and (ii) no Event of
Default or Unmatured Event of Default has occurred and is continuing or would
result therefrom and provided further, (A) no Asset Sale or Asset Swap shall be
permitted if (x) the sum of (1) the Negative Trade Differential plus (2) the
Contributed Cash Flow of all assets proposed to be sold, swapped or otherwise
transferred contributed more than 10% of the Operating Cash Flow of the
Financial Group for the rolling 12 month period ending on the last day of the
Fiscal Quarter preceding the date of the Asset Sale or Asset Swap or (y) on a
cumulative basis, the sum of (1) the Negative Trade Differential plus (2) the
Contributed Cash Flow of all assets proposed to be sold, swapped or otherwise
transferred and all assets sold, swapped or otherwise transferred during the
rolling five year period ending on the last day of the Fiscal Quarter preceding
the date of the Asset Sale or Asset Swap contributed more than 25% of Operating
Cash Flow of the Financial Group, as the case may be for the rolling
twelve-month period preceding the date of determination and (B) no Asset Sale
or Asset Swap of assets which do not contribute to Operating Cash Flow of the
Financial Group shall be permitted if the gross sale proceeds of such assets in
any Fiscal Year exceed $20,000,000 in the aggregate;
(d) Acquisitions (including Asset Swaps) provided (i) no Event of
Default or Unmatured Event of Default has occurred and is continuing or would
result therefrom, (ii) the applicable Borrower complies with Sections 10.18 and
10.27, (iii) the applicable Borrower pledges and assigns to the Lenders all
assets, property or business acquired promptly after the date of such
Acquisition, and (iv) five Business Days prior to any Acquisition having a
purchase price in excess of $25,000,000 or any Asset Swap having an implied
purchase price of $75,000,000 or
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more, (x) the Required Lenders shall have approved in advance in their sole and
absolute discretion, in writing, any such Acquisition or Asset Swap and the
terms thereof and (y) the Company shall have provided to the Administrative
Agent and the Lenders a certificate pursuant to a form substantially in
accordance with Exhibit B setting forth (A) a complete description of and
financial information (including financial projections) relating to such
Acquisition or Asset Swap, (B) the total purchase price of such Acquisition or
Asset Swap and the manner of payment thereof and (C) a calculation of the
covenants in Section 10.6 before and after giving effect to such Acquisition or
Asset Swap, demonstrating compliance with such covenants, and (D) certifying as
to the matters in clauses d(i) and (ii), provided, further, however, that
Acquisitions and Asset Swaps between the Amendment Effective Date and the later
of (1) the Canadian Acquisition Date and (2) Termination of the Tranche D
Commitment shall not exceed $10,000,000;
(e) the sale of New Preference Shares pursuant to the Purchase Option;
(f) the Canadian Acquisition provided the conditions of Section
11.3 have been satisfied or waived; and
(g) the Approved Acquisitions provided the conditions of Section 11.4
have been satisfied or waived.
10.12 Use of Proceeds. Not use or permit any proceeds of any Credit
Extension to be used, either directly or indirectly, for the purpose, whether
immediate, incidental or ultimate, of "purchasing or carrying" any Margin
Stock. The Borrowers will use the proceeds of Credit Extensions:
(a) to refinance the Existing Credit Extensions and the FDTH Loan Note
Guaranty;
(b) in the case of Letters of Credit, for issuing standby Letters of
Credit for working capital and general corporate purposes;
(c) to make Restricted Payments permitted under Section 10.9(a) and
Permitted Payments permitted under Section 10.9(b)(iv) and (vi);
(d) to make scheduled payments of principal and interest on the AP-91
Senior Notes and the FDTH Loan Notes;
(e) to fund capital expenditures (which may include the construction
of the Sun-Times Plant), working capital and permitted Acquisitions;
(f) to fund the Canadian Acquisition;
(g) to fund the Approved Acquisitions; and
(h) for working capital needs (including interest on Debt) and general
corporate purposes of the Company and its Restricted Subsidiaries in the
Financial Group (subject to any limitations hereunder, including with respect
to any availability to the Borrowers).
10.13 Transactions with Affiliates. Not, and not permit any Restricted
Subsidiary in the Financial Group to, enter into or cause, suffer or permit to
exist any transaction, arrangement or contract with any of its other Affiliates
which is on terms which are less favorable than are obtainable from any Person
which is not one of its Affiliates. Without limiting the foregoing, the Company
will not, and will not permit any Restricted Subsidiary in the Financial Group
to, pay any management, consulting or similar fee to any Affiliate other than
Management Fees to the extent permitted under Section 10.9(a)(2).
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10.14 Employee Benefit Plans. Maintain, and cause each Restricted
Subsidiary to maintain, each Pension Plan in compliance in all material
respects with all applicable requirements of law and regulations.
10.15 Environmental Covenants.
10.15.1 Environmental Response Obligation. (a) Comply, and cause each
Subsidiary to comply, with any applicable federal, state or provincial judicial
or administrative order requiring the performance at any real property owned,
operated or leased by the Company or any Subsidiary (or in which such Person
has a direct or indirect interest) of activities in response to the release or
threatened release of a Regulated Material, except for the period of time that
the Company or such Subsidiary is diligently in good faith contesting such
order; (b) notify the Administrative Agent within ten days of the receipt of
any written claim, demand, proceeding, action or notice of liability by any
Person arising out of or relating to the release or threatened release of a
Regulated Material which are reasonably likely to give rise to cleanup or
remediation liabilities under Environmental Laws; and (c) notify the
Administrative Agent within ten days of any release, threat of release, or
disposal of Regulated Material reported by the Company or any Subsidiary to any
governmental or regulatory authority at any real property owned, operated, or
leased by the Company or any Subsidiary (or in which such Person has a direct
or indirect interest) which are reasonably likely to give rise to cleanup or
remediation liabilities under Environmental Laws.
10.15.2 Environmental Liabilities. (a) Comply, and cause each
Subsidiary to comply, in all material respects with all Environmental Laws the
noncompliance with which would be reasonably likely to have a Material Adverse
Effect; (b) without limiting clause (a), not commence disposal of any Regulated
Material into or onto any real property owned, operated or leased by the
Company or any Subsidiary in violation of any Environmental Law; and (c)
without limiting clause (a), not allow any Lien imposed pursuant to any law,
regulation or order relating to Regulated Materials or the disposal thereof to
remain on any real property owned, operated or leased by the Company or any
Subsidiary.
10.16 Unconditional Purchase Obligations. Not, and not permit any
Restricted Subsidiary in the Financial Group to, enter into or be a party to
any contract for the purchase of materials, supplies or other property or
services, if such contract requires that payment be made by it regardless of
whether or not delivery is ever made of such materials, supplies or other
property or services.
10.17 Inconsistent Agreements. Not, and not permit any Restricted
Subsidiary in the Financial Group to, enter into any agreement containing any
provision which would be violated or breached by any borrowing by any Borrower
hereunder or by the performance by the Company or any Restricted Subsidiary of
any of its obligations hereunder or under any other Loan Document.
10.18 Further Assurances. Take, and cause each Restricted Subsidiary in
the Financial Group to take, such actions as the Administrative Agent may
reasonably request from time to time (including, without limitation, the
execution and delivery of guaranties, security agreements, pledge agreements,
stock powers, financing statements and other documents, the filing or recording
of any of the foregoing, and the delivery of stock certificates and other
collateral with respect to which perfection is obtained by possession) to
ensure that (a) the obligations of the Borrowers hereunder and under the other
Loan Documents are secured by 65% of the issued and outstanding Capital Stock
of Palestine Post, the Canadian Borrower and (directly or indirectly) the U.K.
Borrower, 50% of the issued and outstanding Capital Stock of JPEH, all Capital
Stock of the U.K. Borrower owned directly by the Company or TelHoldco, 80% of
the issued and
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outstanding Capital Stock of STDS, and 100% of the Capital Stock of all other
Restricted Subsidiaries incorporated in the United States (except AP-91 and its
Subsidiaries and the APAC-90 8% Preferred Shares) and Canada Holdings and
guaranteed by Canada Holdings and all the Restricted Subsidiaries incorporated
in the United States (other than AP-91's Subsidiaries and STDS) (including,
promptly upon the acquisition or creation thereof, any Restricted Subsidiary
incorporated in the United States created or acquired after the date hereof),
(b) the obligations of each Restricted Subsidiary incorporated in the United
States under its Subsidiary Note (other than the Jerusalem Post Note and the
Subsidiary Notes made by APAC 95, Sun Times and APHI) are secured by
substantially all of the assets of such Restricted Subsidiary (other than real
property); (c) the obligations of the U.K. Borrower, the Canadian Borrower and
the Acquisition Borrower hereunder and under the other Loan Documents are (i)
secured by (x) 100% of the Capital Stock and Subsidiary Notes of the U.K.
Borrower and each of its Restricted Subsidiaries, 100% of the Capital Stock and
the Subsidiary Notes of the Canadian Borrower and each of its Restricted
Subsidiaries in the Financial Group, 100% of the Capital Stock and Subsidiary
Notes of the Acquisition Borrower and each of its Restricted Subsidiaries in
the Financial Group, and not less than 42.8% of the Capital Stock of Southam
outstanding on the Amendment Effective Date, and after any Approved
Acquisition, 100% of the Capital Stock and Subsidiary Notes of any corporation
acquired thereby and its Restricted Subsidiaries, and (y) substantially all the
assets (other than real property) of the U.K. Borrower, the Canadian Borrower,
the Acquisition Borrower and each of their Restricted Subsidiaries in the
Financial Group and (ii) guaranteed by each other Borrower and such Borrowers'
Restricted Subsidiaries in the Financial Group other than the Israeli
Subsidiaries and the Dormant Subsidiaries subject, in each case, to such
exceptions as the Administrative Agent or the Required Lenders from time to
time may permit.
10.19 Amendments to Certain Documents. Not, and not permit any
Restricted Subsidiary in the Financial Group to, make or agree to any amendment
to or modification of, or waive any of its rights under, any of the terms of
(a) the documents relating to the AP-91 Senior Notes, the Subordinated Debt or
the 1997 Senior Notes, (b) the Tax Allocation Agreement, (c) the Subsidiary
Notes or the Subsidiary Security Agreements, (d) the HTH/FDTH Share Exchange
Agreement, (e) the Co-Operation Agreement dated June 23, 1992 between ▇▇▇▇▇▇▇▇▇
Inc. and the U.K. Borrower, (f) the FDTH Loan Notes, or the FDTH Loan Note Deed
Poll, (g) the terms of the Purchase Option, (h) the Scheme Documents, (i) the
Tax Indemnity Agreements, (j) the Organic Documents of the Company or any
Restricted Subsidiary in the Financial Group with respect to the Capital Stock
(including, without limitation, designation of new series of shares or imposing
restrictions on the transfer of Capital Stock), (k) the Preference Share
Arrangements, (l) the Purchase Agreements once approved by the Administrative
Agent, (m) the Acquisition Documents, (n) the Argsub Preferred Shares, and (o)
the Publishing/FDTH Exchange Agreement.
10.20 Conduct of Business. Not, and not permit any Restricted
Subsidiary in the Financial Group to, engage in any business other than the
Newspaper Business.
10.21 Limitations on Sale and Leaseback Transactions. Not, and not
permit any Restricted Subsidiary in the Financial Group to, enter into any
arrangement with any Person providing for the leasing by the Company or any
Restricted Subsidiary in the Financial Group of any real or tangible personal
property, which property has been or is to be sold or transferred by the
Company or such Restricted Subsidiary to such Person in contemplation of such
leasing.
10.22 Tax Allocation Agreement. Not, and not permit any Restricted
Subsidiary in the Financial Group to, enter into any tax sharing or similar
agreement or arrangement, other than (a)
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the Tax Allocation Agreement and (b) the Tax Indemnity Agreements.
10.23 Fiscal Year. Not, and not permit any Restricted Subsidiary to,
change its Fiscal Year.
10.24 Holding Company Status. Not, and not permit Canada Holdings to,
own any material assets other than stock of Subsidiaries and not permit JPEH,
Palestine Post or AP-91 to own any Subsidiaries other than the Subsidiaries
owned by such Person on the Amendment Effective Date.
10.25 Limitation on Dividends and Other Payment Restrictions Affecting
Restricted Subsidiaries. Not, and not permit any of its Restricted Subsidiaries
in the Financial Group to, directly or indirectly, create or otherwise cause or
suffer to exist or become effective any encumbrance or restriction on the
ability of any Restricted Subsidiary in the Financial Group to (a) pay
dividends or make any other distribution on its Capital Stock to the Company or
any other Restricted Subsidiary, (b) pay any Debt owed to the Company or any
other Restricted Subsidiary, (c) make any Investment in the Company or (d)
transfer any of its properties or assets to the Company or any Restricted
Subsidiary, except (i) any encumbrance or restriction pursuant to the AP-91
Senior Notes, (ii) any encumbrance or restriction, with respect to a Restricted
Subsidiary that is not a Restricted Subsidiary of the Company on the Amendment
Effective Date, in existence at the time such Person becomes a Restricted
Subsidiary of the Company and not incurred in connection with, or in
contemplation of, such Person becoming a Restricted Subsidiary and the terms of
such restrictions are acceptable to the Required Lenders, and (iii) customary
provisions restricting subletting or assignment of any lease governing a
leasehold interest of the Company or any Restricted Subsidiary.
10.26 Designation and Ownership of Subsidiaries. Not designate any
Restricted Subsidiary as an Unrestricted Subsidiary or any Unrestricted
Subsidiary as a Restricted Subsidiary.
10.27 New Restricted Subsidiaries, Investments and Acquisitions. As
soon as available and in any event within thirty (30) days after the date of
any Acquisition or Investment or the formation of any new Restricted Subsidiary
of the Company or any of its Restricted Subsidiaries, the Company and its
Restricted Subsidiaries, as appropriate, shall, consistent with Section 10.18,
(a) if applicable, cause such Restricted Subsidiary to execute and deliver (i)
a Subsidiary Note and (ii) a counterpart of the applicable Guaranty; (b) pledge
and assign to the Administrative Agent for the benefit of the Lenders such
Subsidiary Note and all of the issued and outstanding shares of Capital Stock
or other instruments or securities evidencing ownership of such Restricted
Subsidiary beneficially owned by the Company or any of the Company's Restricted
Subsidiaries, as the case may be, as additional collateral for the Obligations,
to constitute part of the Collateral and to be held by the Administrative Agent
on behalf of the Lenders in accordance with the terms of the applicable Pledge
Agreement (together with such stock powers, transfers endorsements, allonges,
instruments, financial statements and other documentation as in the opinion of
the Administrative Agent are appropriate); and (c) provide evidence of
necessary authorizations and one or more opinions of counsel in form and
substance reasonably satisfactory to the Required Lenders which in the opinion
of the Required Lenders is appropriate with respect to such Acquisition,
Investment or new Restricted Subsidiary. Any such document or agreement
executed or issued pursuant to this Section 10.27 shall be a "Loan Document"
for purposes of this Agreement.
10.28 Additional Collateral. (a) Promptly, but in any event within
thirty (30) days after the date the AP-91 Senior Notes are paid in full, the
Company and AP-91, as appropriate, shall (i) cause AP-91 and each of its
Subsidiaries to execute and deliver a counterpart of the U.S. Subsidiary
Guaranty and either
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(x) a Subsidiary Note and Subsidiary Security Agreement or (y) the Company
Security Agreement; (ii) pledge and assign to the Administrative Agent for the
benefit of the Lenders such Subsidiary Notes and Subsidiary Security Agreements
and all of the issued and outstanding shares of Capital Stock or other
instruments or securities evidencing ownership of AP-91 and its Subsidiaries
and any APAC-90 8% Preferred Shares owned by AP-91 as additional Collateral for
the Obligations, (b) promptly, but in any event within thirty (30) days after
the date that elections are filed under Treasury Regulations Section 301.7701-
3(c) to change the entity classifications of DTH and FDTH for federal income
tax purposes, the Company shall take the necessary action such that 65% of the
outstanding voting stock and all nonvoting stock of the U.K. Borrower and any
shares of the Canadian Borrower owned by FDTH is pledged as additional
Collateral for the Obligations of the Company and (c) promptly, but in any
event within five (5) days after the date any shares of Southam are released
from the Lien in favor of Montreal Trust Company securing the Southam-Linked
Debentures, pledge and assign such shares to the Administrative Agent for the
benefit of the Lenders; in each case to constitute part of the Collateral and
to be held by the Administrative Agent on behalf of the Lenders in accordance
with the terms of the applicable Pledge Agreement (together with such stock
powers, allonges, instruments, financing statements and other documentation as
in the opinion of the Administrative Agent are appropriate) and to provide
evidence of necessary authorizations and one or more opinions of counsel in
form and substance reasonably satisfactory to the Required Lenders. Any such
document or agreement executed or issued pursuant to this Section 10.28 shall
be a "Loan Document" for purposes of this Agreement.
10.29 Operating Leases. Not, and not permit any Restricted Subsidiary
in the Financial Group to, create or suffer to exist any obligations for the
payment of rent for any property under lease or agreement to lease if the
aggregate annual rental payments for all such operating leases for the four
Fiscal Quarters immediately following such date of determination shall exceed
$10,000,000.
10.30 AP-91 Further Restricted. Not permit AP-91 to engage in any
activity other than (a) performing its obligations under documents relating to
the AP-91 Senior Notes, (b) paying dividends or making other distributions to
the Company, and (c) making certain maintenance capital expenditures as
permitted by Section 10.31.
10.31 Capital Expenditures. Not, and not permit any Restricted
Subsidiary in the Financial Group to, make or commit to make any Capital
Expenditure during any Fiscal Year, unless, after giving effect to such Capital
Expenditure, the aggregate amount of all Capital Expenditures made by the
Company and such Restricted Subsidiaries during such Fiscal Year shall not
exceed $30,000,000. In addition, the Company and its Restricted Subsidiaries
organized in the United States may make Capital Expenditures during Fiscal
Years 1997, 1998 and 1999 not exceeding $100,000,000 in the aggregate for the
Sun-Times Plant.
10.32 Post Closing Actions. Within (a) seven Business Days of the
Canadian Acquisition Date, cause the assets of UniMedia Newspapers Company to
be transferred to the Canadian Borrower in connection with a dissolution
thereof, cause the shares of UniMedia Inc. to be pledged to the Lenders, and
cause Sterling Newspapers Company and Armadale Newspapers Company to be
amalgamated; (b) 30 days of the Canadian Acquisition Date, provide Canadian
Guaranties and/or Canadian Security Agreements and appropriate opinions
satisfactory to the Administrative Agent with respect to assets located in
▇▇▇▇▇▇ ▇▇▇▇▇▇ Island; (c) if the Tranche D Availability Date has not occurred
on or before August 31, 1997, cause Sterling Newspapers Company to provide a
Canadian Guaranty and a Canadian Security Agreement; and (d) within seven
Business Days of the Canadian Acquisition Date, deliver a $7,000,000 Treasury
▇▇▇▇ to the Administrative Agent as
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Collateral, the proceeds of such Treasury ▇▇▇▇ to be used to satisfy any
Hedging Agreement obligations of ▇▇▇▇▇▇▇▇▇ International in connection with the
Redemption Date.
SECTION 11 CONDITIONS OF LENDING
11.1 Documentary Conditions to Amendment Effective Date. This Agreement
shall be and become effective on the date (the "Amendment Effective Date") on
which the Company, the U.K. Borrower, the Canadian Borrower, the Acquisition
Borrower, the Lenders and the Administrative Agent shall have executed and
delivered this Agreement and the Administrative Agent shall have received all
of the following, each duly executed and dated the Amendment Effective Date (or
such earlier date as shall be satisfactory to the Administrative Agent) in form
and substance satisfactory to the Administrative Agent and the conditions in
Section 11.2 shall be satisfied or waived by the Administrative Agent:
11.1.1 Resolutions. Certified copies of resolutions of the Board of
Directors of each Borrower authorizing or ratifying the execution, delivery and
performance by each Borrower of this Agreement and the other Loan Documents to
which each Borrower is a party; and certified copies of resolutions of the
Board of Directors of each other Obligor required to execute a Loan Document
pursuant to this Section 11.1 authorizing or ratifying the execution, delivery
and performance by such Obligor of the Loan Documents to which such Obligor is
a party.
11.1.2 Organic Documents. Certified copies of all Organic Documents
of each Borrower and Obligor who is incorporated in a jurisdiction outside the
United States and of ▇▇▇▇▇▇▇▇▇ International.
11.1.3 Incumbency and Signature Certificates. A certificate of the
Secretary or an Assistant Secretary of each Obligor certifying the names of the
officer or officers of such entity authorized to sign the Loan Documents to
which such entity is a party, together with a sample of the true signature of
each such officer (it being understood that the Administrative Agent and each
Lender may conclusively rely on each such certificate until formally advised by
a like certificate of any changes therein).
11.1.4 Consents, etc. Certified copies of all documents evidencing any
necessary corporate action, consents and governmental approvals (if any)
required for the execution, delivery and performance of the Loan Documents by
each Obligor.
11.1.5 Guaranties. (a) An amended and restated guaranty, substantially
in the form of Exhibit D-1, issued by ▇▇▇▇▇▇▇▇▇ International and Canada
Holdings (as amended, supplemented or otherwise modified from time to time, the
"▇▇▇▇▇▇▇▇▇ International Guaranty"); (b) an amended and restated guaranty,
substantially in the form of Exhibit D-2 executed by the U.S.
Restricted Subsidiaries of the Company other than the subsidiaries of AP-91,
JPEH, JPPL, Palestine Post and STDS (as amended, supplemented or otherwise
modified from time to time, the "U.S. Subsidiary Guaranty"); and (c) a
guarantee, substantially in the form of Exhibit D-3, executed by DTH, FDTH and
the Restricted Subsidiaries of the U.K. Borrower other than Dormant
Subsidiaries (as amended, supplemented or otherwise modified from time to time,
the "U.K. Subsidiary Guaranty").
11.1.6 Pledge Agreements. (a) An amended and restated pledge agreement,
substantially in the form of Exhibit E-1 issued by ▇▇▇▇▇▇▇▇▇ International (as
amended, supplemented or otherwise modified from time to time, the "▇▇▇▇▇▇▇▇▇
International Pledge Agreement"); (b) an amended and restated pledge agreement,
substantially in the form of Exhibit E-2 issued by the Company and, to the
extent applicable, each of its U.S. Restricted
81
Subsidiaries other than AP-91 and its Subsidiaries, Palestine Post, JPPL and
JPEH (such pledge agreement, as amended, supplemented or otherwise modified
from time to time, the "Company Pledge Agreement"); (c) a pledge agreement,
substantially in the form of Exhibit E-3 issued by the Company and TelHoldco
(as amended, supplemented or otherwise modified from time to time, the
"Telegraph Pledge Agreement"); (d) a pledge agreement substantially in the form
of Exhibit E-4 issued by ▇▇▇▇▇▇▇▇▇ International, HTHH and BenHoldco regarding
the stock of Canada Holdings (as amended, supplemented or otherwise modified
from time to time, the "Canada Holdings Pledge Agreement"); (e) a pledge
agreement, substantially in the form of Exhibit E-5 issued by Limited and
Canada Holdings (as amended, supplemented or otherwise modified from time to
time, the "Limited/Eastern Pledge Agreement"); (f) a pledge agreement
substantially in the form of Exhibit E-6 issued by Canada Holdings and FDTH (as
amended, supplemented or otherwise modified from time to time, the "Canada
Holdings/Eastern Pledge Agreement"); (g) a pledge agreement substantially in
the form of Exhibit E-7 issued by the Company, DTH, and FDTH (as amended,
supplemented or otherwise modified from time to time, the "U.K. Pledge
Agreement"); (h) a pledge agreement substantially in the form of Exhibit E-8
issued by the U.K. Borrower, and, to the extent applicable, each of its
Restricted Subsidiaries (as amended, supplemented or otherwise modified from
time to time, the "U.K. Subsidiary Pledge Agreement"); (i) a pledge agreement
substantially in the form of Exhibit E-9 issued by the Canadian Borrower
covering shares in Southam (as amended, supplemented or otherwise modified from
time to time, the "Southam Pledge Agreement"); together, in the case of each
pledge agreement, with the stock certificates or instruments (including,
without limitation, the Subsidiary Notes) to be pledged thereunder, and any
necessary allonges, stock powers and stock transfer forms executed in blank and
any necessary financing statements and board resolutions.
11.1.7 Security Agreements. (a) An amended and restated security
agreement, substantially in the form of Exhibit C-1 executed by the Company and
each U.S. Restricted Subsidiary (other than AP-91 and its Subsidiaries) which
has not executed a Subsidiary Note and Subsidiary Security Agreement (as
amended, supplemented or otherwise modified from time to time, the "Company
Security Agreement") and, to the extent applicable, trademark security
agreements, substantially in the form of Exhibit A to the Company Security
Agreement (as amended, supplemented or otherwise modified from time to time the
"Trademark Security Agreement"); and (b) a Debenture, substantially in the form
of Exhibit C-2 executed by the U.K. Borrower and, to the extent applicable,
each of its Restricted Subsidiaries (as amended, supplemented or otherwise
modified from time to time, the "U.K. Security Agreement"); together, in the
case of each Security Agreement, with such financing statements or other
registration forms as are necessary to perfect the Administrative Agent's Lien
on any Collateral granted under such Security Agreement.
11.1.8 AP-91 Agreement. A letter agreement substantially in the form of
Exhibit F (as amended, supplemented or otherwise modified from time to time,
the "AP-91 Agreement") executed by AP-91, relating to the APAC-90 8% preferred
stock.
11.1.9 Financial Statements. (a) Audited financial statements for the
fiscal year ending December 31, 1996 for (i) ▇▇▇▇▇▇▇▇▇ Inc., (ii) ▇▇▇▇▇▇▇▇▇
International and (iii) Southam and its Subsidiaries.
(b) Pro forma consolidated capitalization of the Financial Group giving
effect to the issuance of the 1997 Senior Subordinated Notes, the 1997 Senior
Notes and repayment of certain Debt in connection with the issuance thereof.
11.1.10 Process Agent Letter. The Administrative Agent shall have
received a letter from Prentice Hall, in form and
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substance satisfactory to the Administrative Agent, dated the Amendment
Effective Date, or a date reasonably close to the Amendment Effective Date,
whereby Prentice Hall acknowledges and accepts its appointment by each of the
Company and each of the other Obligors who have executed Loan Documents, as
agent for service of process.
11.1.11 Compliance Certificate. A duly completed compliance certificate
in the form of Exhibit B, with appropriate insertions, dated the date of the
most recently ended Fiscal Quarter and signed by one of the chief executive
officer, the chief financial officer, the chief operating officer or Vice
President-Finance of the Company, containing a computation of each of the
financial ratios and restrictions set forth in Section 10 and to the effect
that such officer has not become aware of any Event of Default or Unmatured
Event of Default that has occurred and is continuing.
11.1.12 Assignment Agreement. An assignment agreement, substantially in
the form of Exhibit A (the "Amendment Effective Date Assignment Agreement")
executed by each Original Lender who is not a Lender hereunder.
11.1.13 Other. Such other documents as the Administrative Agent or any
Lender may reasonably request.
11.2 Other Conditions to Amendment Effective Date. The Amendment
Effective Date is also, in addition to the conditions precedent specified in
Section 11.1, subject to the following conditions precedent:
11.2.1 Capital Structure. The Administrative Agent and its counsel
shall be satisfied with the existing and proposed capital structure (both debt
and equity) and corporate structure of ▇▇▇▇▇▇▇▇▇ International and the Company
and its Subsidiaries and all other matters relating to the financial and
operating condition of each of the Company and its Subsidiaries and with the
terms and provision of the Company's and its Subsidiaries' material contracts.
11.2.2 Due Diligence. The Administrative Agent and its counsel shall
have satisfactorily completed a due diligence review of (a) the assets,
liabilities, business, operations, condition and prospects of the Borrowers and
(b) the legal, accounting and tax issues (including, without limitation, with
respect to availability and enforceability) regarding the proposed guaranties
and security for the Agreement.
11.2.3 DTH and FDTH Preference Shares. The Administrative Agent shall
be satisfied with the escrow arrangements with respect to the redemption of the
DTH Preference Shares and the FDTH Series A and Series B Preference Shares and
the plans for redemption of the Argsub Preference Shares.
11.2.4 Fairfax Proceeds. The promissory note dated January 9, 1997 from
SNCFE Limited to the order of DTHBV shall have been repaid and the Net Cash
Proceeds thereof shall have been transferred to FDTH, the U.K. Borrower or one
of its Restricted Subsidiaries which is an Obligor.
11.2.5 Debt to be Repaid. The Administrative Agent shall have received
evidence, reasonably satisfactory to the Administrative Agent, that all
outstanding Debt under the FDTH Credit Agreement (except with respect to the
FDTH Loan Note Guaranty) has been, or concurrently with the issuance of the
initial Credit Extension will be, paid in full and (b) all commitments under
the agreements relating to such Debt, and all Liens securing such Debt, have
been or concurrently with the issuance of the initial Credit Extension will be
terminated.
11.2.6 No Material Adverse Effect. Except as disclosed on Schedule 9.5,
since December 31, 1996, no event or events have
83
occurred which, individually or in the aggregate, has had or is reasonably
likely to have a Material Adverse Effect.
11.2.7 Fees. The Company shall have paid all fees and expenses then due
and payable to the Administrative Agent or any Lender under this Agreement
(including, to the extent then billed, all amounts payable pursuant to Section
14.6).
11.2.8 U.K. Procedural Requirements. The Administrative Agent shall
have received evidence, satisfactory to the Administrative Agent and its
counsel, that, as of the Amendment Effective Date, each of the applicable U.K.
Obligors has implemented and consummated the provisions and procedures set out
in Sections 155-158 of the Companies ▇▇▇ ▇▇▇▇ and that the granting of the
security interests and the giving of the guarantees contemplated by the Loan
Documents do not constitute unlawful financial assistance within the meaning of
Section 151 of the Companies ▇▇▇ ▇▇▇▇.
11.2.9 Southam Market Value. The Southam Market Value on the
Amendment Effective Date shall not be less than $400,000,000.
11.3 Conditions to Canadian Acquisition. The obligation of each
Canadian Lender to make Tranche C Credit Extensions and the increase in
availability under the Tranche A Commitment is, in addition to the conditions
precedent specified in Sections 11.1, 11.2 and 11.5, subject to the prior or
concurrent satisfaction of each of the conditions set forth in this Section
11.3 (and the date on which all such conditions have been satisfied or waived
in writing by the Lenders and the Canadian Lenders make Tranche C Credit
Extensions to the Canadian Borrower is called the "Canadian Acquisition Date").
11.3.1 Documentary Conditions to Canadian Acquisition Date. The
Administrative Agent shall have received all of the following, each duly
executed and dated the Canadian Acquisition Date (or such earlier date as shall
be satisfactory to the Administrative Agent) in form and substance satisfactory
to the Administrative Agent:
(a) Canadian Guaranty. A Canadian Guaranty issued by each
Restricted Subsidiary of the Canadian Borrower other than Southam and its
Subsidiaries.
(b) Pledge Agreement. A Canadian Pledge Agreement, each in form and
substance satisfactory to the Administrative Agent, issued by the Canadian
Borrower and each of its Restricted Subsidiaries other than Southam and its
Subsidiaries, together with the stock certificates or instruments (including
without limitation any Subsidiary Notes) to be pledged thereunder and any
necessary allonges, stock powers and stock transfer forms executed in blank and
any necessary financing statements and Board resolutions.
(c) Canadian Security Agreement. A Canadian Security Agreement,
each in form and substance satisfactory to the Administrative Agent, issued by
the Canadian Borrower and each of its Restricted Subsidiaries other than
Southam and its Subsidiaries, together with such financing statements or other
registrations as are necessary to perfect the Administrative Agent's Lien on
any Collateral granted under such Canadian Security Agreements.
(d) Acceptance Power of Attorney. An Acceptance Power of Attorney
executed by the Canadian Borrower in favor of each Canadian Lender.
(e) Opinions of Counsel. The opinions of (i) ▇▇▇▇▇▇▇▇▇▇▇ and
▇▇▇▇▇▇▇▇ LLP, U.S. counsel for the Obligors, (ii) Tory ▇▇▇▇ ▇▇▇▇▇▇▇▇▇▇▇ &
Binnington, Ontario counsel for the Company, (iii) ▇▇▇▇▇▇▇ ▇▇▇▇▇▇▇▇, Stirling,
Scales, Nova Scotia and New Brunswick counsel to certain Obligors, (iv)
▇▇▇▇▇▇▇▇ ▇▇▇▇▇▇▇▇▇▇, ▇▇▇▇▇▇ counsel to certain Obligors, (v)
▇▇
▇▇▇▇▇▇ ▇▇▇▇ ▇▇▇▇▇▇, ▇▇▇▇▇▇▇ ▇▇▇▇▇▇▇▇ counsel to Obligors, (vi) ▇▇▇▇▇▇▇▇▇ Ready,
Saskatchewan counsel to certain Obligors and (vii) Smordin Pauls, Manitoba
counsel to certain Obligors.
(f) Financial Statements. Audited financial statements for the
fiscal year ending December 31, 1996 for (i) the Company and its Restricted
Subsidiaries (excluding the Canadian Borrower and its Subsidiaries but
including the U.K. Borrower and its Subsidiaries) and (ii) either FDTH and its
Subsidiaries or the U.K. Borrower and its Subsidiaries.
(g) Amendment to Schedules. The Schedules to the Credit Agreement
shall have been updated, as necessary, with respect to the Canadian Acquisition
and such Schedules and the new disclosures contained therein shall be
satisfactory to the Administrative Agent.
11.3.2 Canadian Acquisition. The Administrative Agent shall have
received evidence, reasonably satisfactory to the Administrative Agent, that
the Canadian Acquisition has been, or concurrently with the making of such
Tranche C Credit Extension will be, completed (without giving effect to the
waiver of any conditions precedent set forth in the Purchase Agreements unless
such waiver has been consented to by of all the Lenders).
11.3.3 Insurance. The Administrative Agent shall have received copies
of insurance binders or certificates of insurance as required pursuant to
Section 10.3 with respect to the assets acquired in the Canadian Acquisition
satisfactory to the Administrative Agent along with evidence that the
Administrative Agent and the Lenders are named as loss payee and additional
insured.
11.3.4 Other Legal Opinions. The Administrative Agent shall have
received the legal opinions required under the Purchase Agreements with
confirmation by the issuers thereof that the Administrative Agent and the
Lenders may rely thereon.
11.3.5 No Material Adverse Effect. Except as disclosed on Schedule 9.5,
since December 31, 1996, no event or events have occurred which, individually
or in the aggregate, has had or is reasonably likely to have a Material Adverse
Effect.
11.3.6 Capital Structure. The Administrative Agent and its counsel
shall be satisfied with the existing and proposed capital structure (both debt
and equity) and corporate structure of the Canadian Borrower and its Restricted
Subsidiaries and all other matters relating to the financial and operating
condition of each of the Canadian Borrower and its Restricted Subsidiaries and
with the terms and provisions of the Canadian Borrower's and its Restricted
Subsidiaries' material contracts.
11.3.7 No Litigation Regarding Canadian Acquisition. There shall not
exist any litigation or claims with respect to any aspect of the Canadian
Acquisition, any related transaction or any other transaction contemplated
thereby or the financing thereof which the Administrative Agent reasonably
considers to be material.
11.3.8 Debt to be Repaid. (a) All Debt to be repaid in connection with
the Canadian Acquisition has been, or concurrently with the making of the
Tranche C Credit Extensions will be, paid in full, other than Debt permitted
pursuant to Section 10.7(h); and (b) all commitments under the agreements
relating to such Debt, and all Liens securing such Debt, have been or
concurrently with the making of such Tranche C Credit Extension will be,
terminated.
11.3.9 Due Diligence. The Administrative Agent shall have
satisfactorily completed its due diligence review of (a) the assets,
liabilities, business, operations, condition and prospects of the Canadian
Borrower and the assets to be acquired
85
in connection with the Canadian Acquisition and (b) the legal, accounting and
tax issues (including, without limitation, with respect to availability and
enforceability) regarding the proposed security and guarantees to be executed
on the Canadian Acquisition Date.
11.3.10 Capital Markets. Prior to the Canadian Acquisition Date, there
shall not have been any material disruption in the capital markets generally
which could, in the reasonable good faith determination of the Administrative
Agent, have a materially adverse effect on the ability to extend, or maintain
any commitment to extend, at the time contemplated hereby, senior secured bank
financing of the type contemplated hereby.
11.3.11 Compliance Certificate. A duly completed pro forma certificate
in the form of Exhibit B, with appropriate insertions, dated the date of the
most recently ended Fiscal Quarter and signed by one of the chief executive
officer, the chief financial officer, the chief operating office or the Vice
President-Finance of the Company, containing a computation of each of the
financial ratios and restrictions set forth in Section 10 and to the effect
that such officer has not become aware of any Event of Default or Unmatured
Event of Default that has occurred and is continuing.
11.3.12 Process Agent Letter. The Administrative Agent shall have
received a letter from Prentice Hall, in form and substance satisfactory to the
Administrative Agent, dated the Canadian Acquisition Date or a date reasonably
close to the Canadian Acquisition Date, whereby Prentice Hall acknowledges and
accepts its appointment by the Company and each of the other Obligors executing
a Loan Document in connection with the Canadian Acquisition, as agent for
service of process.
11.3.13 Fees. The Company shall have paid (or shall have made
arrangements to pay with the proceeds of the initial Tranche C Credit
Extension) all fees and expenses then due and payable to the Administrative
Agent or any Lender (including, to the extent then billed, all amounts payable
pursuant to Section 14.6).
11.3.14 Southam Market Value. The Southam Market Value on the
Canadian Acquisition Date shall not be less than $400,000,000.
11.3.15 The Funding and Close. The Administrative Agent shall have
received evidence, reasonably satisfactory to the Administrative Agent, that
the ▇▇▇▇▇▇▇▇▇ PRIDES will be issued, that the Purchase Agreements have closed
on terms and conditions reasonably satisfactory to the Administrative Agent and
that sufficient cash will be available to the Canadian Borrower to consummate
the Canadian Acquisition, taking into account the Tranche C Credit Extensions
hereunder.
11.3.16 Officers Certificates. The Administrative Agent shall have
received a Certificate executed by the Canadian Borrower's chief executive or
chief financial officer certifying that:
(i) the Canadian Acquisition has been consummated in accordance with
the terms of the Purchase Agreements;
(ii) the Canadian Acquisition complied in all respects with all
applicable legal requirements, and all necessary governmental, regulatory,
shareholder and other consents and approvals required for the consummation of
the Canadian Acquisition in the United States and Canada were, part of the
consummation thereof, duly obtained, were and continue to be full force and
effect;
(iii) the Canadian Acquisition and the consummation thereof do not
violate any statute or regulations of the United States, Canada, any state,
province or other
86
applicable jurisdiction, or any order, judgment or decree of any court or
governmental body, will result in a breach of, or constitute a default under,
any agreement, indenture, order or decree affecting ▇▇▇▇▇▇▇▇▇ International,
the Company or any of its Restricted Subsidiaries;
(iv) all of the representations and warranties of the Canadian
Borrower, and to the best of the Canadian Borrower's knowledge, the other
parties to the Purchase Agreements contained in the Purchase Agreements are
true and correct in all material respects as of the date of Canadian
Acquisition Date, all necessary tax clearances were duly obtained and are in
full force and effect and the consummation of the Canadian Acquisition does
not, and will not, give rise to a material liability for income capital gains
or other tax on the Canadian Borrower or any of its Restricted Subsidiaries or
on the Company or any of its Restricted Subsidiaries.
(v) no Event of Default or Unmatured Event of Default has occurred and
is continuing or will result from the closing of the Canadian Acquisition or
the Credit Extensions requested in connection therewith;
(vi) the representations and warranties contained in Section 9 of the
Credit Agreement are true and correct as of the date hereof, with the same
effect as though made on such date;
(vii) it has been advised by its auditors, KPMG, that neither it nor
any of its Restricted Subsidiaries nor the Company or any of its Restricted
Subsidiaries nor ▇▇▇▇▇▇▇▇▇ Inc. or any of its Restricted Subsidiaries will, as
a result of a consummation of the Canadian Acquisition, incur a material gain
for tax purposes nor, on an on-going basis, will any of such entities suffer an
increased tax liability.
11.3.17 Other. Such other documents as the Administrative Agent or
any Lender may reasonably request.
11.4 Tranche D Availability. The obligation of each Canadian Lender to
make a Tranche D Credit Extension and the increase in availability under the
Tranche A Commitment is, in addition to the conditions precedent specified in
Sections 11.1, 11.2, 11.3 and 11.5, subject to the prior or concurrent
satisfaction of each of the conditions set forth in this Section 11.4 (and the
date on which all such conditions have been satisfied or waived in writing by
the Lenders and the Canadian Lenders make Tranche D Credit Extensions to the
Acquisition Borrower is called the "Tranche D Availability Date").
11.4.1 Documentary Conditions to Tranche D Availability Date. The
Administrative Agent shall have received all of the following, each duly
executed and dated the Tranche D Availability Date (or such earlier date as
shall be satisfactory to the Administrative Agent) in form and substance
satisfactory to the Administrative Agent:
(a) Guaranties and Collateral Documents. The Guaranties, Collateral
Documents, opinion letters and other items required by Section 10.27 and a
Canadian Guaranty, Canadian Security Agreement and, if applicable, a Canadian
Pledge Agreement executed by Sterling Newspapers Company with respect to the
obligations of the U.K. Borrower and the Acquisition Borrower.
(b) Corporate Matters. To the extent applicable, the items referred
to in Sections 11.1.1, 11.1.2, 11.1.3 and 11.1.4.
(c) Acceptance Power of Attorney. An Acceptance Power of Attorney
executed by the Acquisition Borrower in favor of each Canadian Lender.
87
(d) Amendment to Financial Covenants. The Lenders and the Borrowers
shall have amended the financial covenants set forth in Sections 10.6, 10.31
and such other covenants as may be appropriate, as determined by the Lenders.
(e) Amendment to Schedules. The Schedules to the Credit Agreement shall
have been updated, as necessary, with respect to the Approved Acquisition and
such Schedules and the new disclosures contained therein shall be satisfactory
to the Administrative Agent.
11.4.2 Approved Acquisition. The Administrative Agent shall have
received evidence, reasonably satisfactory to the Administrative Agent, that
the Approved Acquisition has been, or concurrently with the making of such
Tranche D Credit Extension will be, completed (without giving effect to the
waiver of any conditions precedent set forth in the Acquisition Documents.)
11.4.3 Insurance. The Administrative Agent shall have received copies
of insurance binders or certificates of insurance as required pursuant to
Section 10.3 with respect to the assets acquired in the Approved Acquisition
satisfactory to the Administrative Agent along with evidence that the
Administrative Agent and the Lenders are named as loss payee and additional
insured.
11.4.4 No Material Adverse Effect. Except as disclosed on Schedule 9.5,
since December 31, 1996, no event or events have occurred which, individually
or in the aggregate, has had or is reasonably likely to have a Material Adverse
Effect.
11.4.5 Capital Structure. The Lenders and their counsel shall be
satisfied with the existing and proposed capital structure (both debt and
equity) and corporate structure of the Acquisition Borrower and its Restricted
Subsidiaries and all other matters relating to the financial and operating
condition of each of the Acquisition Borrower and its Restricted Subsidiaries
and with the terms and provisions of the Acquisition Borrower's and its
Restricted Subsidiaries' material contracts.
11.4.6 No Litigation Regarding Approved Acquisition. There shall not
exist any litigation or claims with respect to any aspect of the Approved
Acquisition, any related transaction or any other transaction contemplated
thereby or the financing thereof which the Administrative Agent reasonably
considers to be material.
11.4.7 Debt to be Repaid. (a) All Debt to be repaid in connection with
the Approved Acquisition has been, or concurrently with the making of the
Tranche D Credit Extensions will be, paid in full; and (b) all commitments
under the agreements relating to such Debt, and all Liens securing such Debt,
have been or concurrently with the making of such Tranche D Credit Extension
will be, terminated.
11.4.8 Due Diligence. The Administrative Agent shall have
satisfactorily completed its due diligence review of (a) the assets,
liabilities, business, operations, condition and prospects of the Acquisition
Borrower and the assets to be acquired in connection with the Approved
Acquisition and (b) the legal, accounting and tax issues (including, without
limitation, with respect to availability and enforceability) regarding the
proposed security and guarantees to be executed on the Tranche D Availability
Date.
11.4.9 Capital Markets. Prior to the Tranche D Availability Date, there
shall not have been any material disruption in the capital markets generally
which could, in the reasonable good faith determination of the Administrative
Agent, have a materially adverse effect on the ability to extend, or maintain
any commitment to extend, at the time contemplated
88
hereby, senior secured bank financing of the type contemplated hereby.
11.4.10 Compliance Certificate. A duly completed pro forma certificate
in the form of Exhibit B, with appropriate insertions, dated the date of the
most recently ended Fiscal Quarter and signed by one of the chief executive
officer, the chief financial officer, the chief operating office or the Vice
President-Finance of the Company, containing a computation of each of the
financial ratios and restrictions set forth in Section 10 and to the effect
that such officer has not become aware of any Event of Default or Unmatured
Event of Default that has occurred and is continuing.
11.4.11 Process Agent Letter. The Administrative Agent shall have
received a letter from Prentice Hall, in form and substance satisfactory to the
Administrative Agent, dated the Tranche D Availability Date or a date
reasonably close to the Tranche D Availability Date, whereby Prentice Hall
acknowledges and accepts its appointment by the Company and each Obligors
executing a Loan Document in connection with the Approved Acquisition, as agent
for service of process.
11.4.12 Fees. The Company shall have paid (or shall have made
arrangements to pay with the proceeds of the initial Credit Extension) all fees
and expenses then due and payable to the Administrative Agent or any Lender
(including, to the extent then billed, all amounts payable pursuant to Section
14.6).
11.4.13 The Funding and Close. The Administrative Agent shall have
received evidence, reasonably satisfactory to the Administrative Agent, that
any equity (having terms and conditions satisfactory to the Lenders in its sole
and absolute discretion) will be issued and that the Approved Acquisition has
closed on terms and conditions reasonably satisfactory to the Lenders and that
sufficient cash will be available to the Acquisition Borrower to consummate the
Approved Acquisition, taking into account the Tranche D Credit Extensions
hereunder.
11.4.14 Officers Certificates. The Administrative Agent shall have
received a Certificate executed by the Acquisition Borrower's chief executive
or chief financial officer certifying that:
(i) the Approved Acquisition has been consummated in accordance with
the terms of the Acquisition Documents;
(ii) the Approved Acquisition complied in all respects with all
applicable legal requirements, and all necessary governmental, regulatory,
shareholder and other consents and approvals required for the consummation of
the Approved Acquisition were, part of the consummation thereof, duly obtained,
were and continue to be full force and effect;
(iii) the Approved Acquisition and the consummation thereof do not
violate any statute or regulations of applicable jurisdiction, or any order,
judgment or decree of any court or governmental body, will result in a breach
of, or constitute a default under, any agreement, indenture, order or decree
affecting ▇▇▇▇▇▇▇▇▇ International, the Company or any of its Restricted
Subsidiaries;
(iv) all of the representations and warranties of the Acquisition
Borrower, and to the best of the Acquisition Borrower's knowledge, the other
parties to the Acquisition Documents contained in the Acquisition Documents are
true and correct in all material respects as of the date of closing of the
Approved Acquisition all necessary tax clearances were duly obtained and are in
full force and effect and the consummation of the Approved Acquisition does
not, and will not, give rise to a material liability for income capital gains
or other tax on the Acquisition Borrower or any of its Restricted Subsidiaries,
or on the Company or any of its Restricted Subsidiaries.
89
(v) no Event of Default or Unmatured Event of Default has occurred and
is continuing or will result from the closing of the Approved Acquisition or
the Credit Extensions requested in connection therewith;
(vi) the representations and warranties contained in Section 9 of the
Credit Agreement are true and correct as of the date hereof, with the same
effect as though made on such date;
(vii) it has been advised by its auditors, KPMG, that neither it nor
any of its Restricted Subsidiaries nor the Company or any of its Restricted
Subsidiaries nor ▇▇▇▇▇▇▇▇▇ Inc. or any of its Restricted Subsidiaries will, as
a result of a consummation of the Approved Acquisition, incur a material gain
for tax purposes nor, on an on-going basis, will any of such entities suffer an
increased tax liability.
11.4.15 Satisfaction Regarding Approved Acquisition. The Administrative
Agent and the Lenders, in their sole and absolute discretion, shall be
satisfied with the tax, accounting, securities, regulatory and other legal
issues in connection with the Approved Acquisition; the terms of the Approved
Acquisition and the Acquisition Documents are satisfactory to the
Administrative Agent and its counsel, in its sole and absolute discretion.
11.4.16 Financial Projections. The Administrative Agent and each Lender
shall have received forecasted consolidating balance sheet, profits and loss
statement and cash flow statements of the Financial Group (after giving effect
to the Canadian Acquisition and the Approved Acquisition) for each of the next
seven Fiscal Years.
11.4.17 Offering Sanction. The Administrative Agent shall have received
evidence and confirmation satisfactory to it and its counsel in its sole and
absolute discretion that (a) the Approved Acquisition has been approved, to the
extent necessary, by any stock exchange or other regulatory authorities having
approval rights thereof, (b) the Approved Acquisition has been completed
without any variation, amendment or revision to the Approved Acquisition as
described in the Acquisition Documents or that the Administrative Agent, in its
sole and absolute discretion, has consented in writing to any such variation,
amendment or revision, (c) none of the conditions to the Acquisition have been
waived or other forbearance given by the Acquisition Borrower or that the
Administrative Agent, in its sole and absolute discretion, has consented in
writing to any such waiver or forbearance.
11.4.18 Other. Such other documents as the Administrative Agent or
any Lender may reasonably request.
11.5 All Loans, Letters of Credit and Acceptances. The obligation of
each Lender to make each Loan and of the Issuing Bank to issue each Letter of
Credit and the Canadian Lenders to create Acceptances is subject to the
following further conditions precedent that:
11.5.1 No Default, etc. (a) No Event of Default or Unmatured Event of
Default has occurred and is continuing or will result from the making of such
Credit Extension, (b) the warranties of the Company contained in Section 9
(excluding, in the case of all Credit Extensions, other than Credit Extensions
made on the Amendment Effective Date and the Canadian Acquisition Date and the
Tranche D Availability Date, Sections 9.4, 9.6, 9.8 and 9.15 through 9.17) are
true and correct as of the date of such requested Credit Extension, with the
same effect as though made on such date and (c) except as disclosed in Schedule
9.5, since the date of the financial statements described in Section
90
9.4 or, if later, the date of the most recent financial statements delivered to
the Lenders pursuant to Section 10.1.1 or 10.1.2, no event (including, without
limitation, any labor controversy, litigation, arbitration, governmental
investigation or proceeding or environmental matter) has occurred which, in the
reasonable good faith judgment of the Required Lenders, may have a Material
Adverse Effect.
11.5.2 Confirmatory Certificate. If requested by the Administrative
Agent or any Lender, the Administrative Agent shall have received a certificate
dated the date of such requested Credit Extension and signed by a duly
authorized representative of the Company as to the matters set out in clauses
(a), (b) and (c) of Section 11.5.1 (it being understood that each request by a
Borrower for a Credit Extension shall be deemed to constitute a warranty by the
Borrowers that the conditions precedent set forth in Section 11.5.1 will be
satisfied at the time of the making of such Credit Extension), together with
such other documents as the Administrative Agent or any Lender may reasonably
request in support thereof.
SECTION 12 EVENTS OF DEFAULT AND THEIR EFFECT.
12.1 Events of Default. Each of the following shall constitute an
Event of Default under this Agreement:
12.1.1 Non-Payment of the Loans, etc. Default in the payment when due
of the principal of any Loan or Acceptance; or default, and continuance thereof
for five Business Days, in the payment when due of any interest on any Loan,
any reimbursement obligation with respect to any Letter of Credit or any fee or
other amount payable by any Borrower hereunder or under any other Loan
Document.
12.1.2 Default under Other Debt. (a) Default in the payment when due
(subject to any applicable grace period), whether by acceleration or otherwise,
of any other Debt of ▇▇▇▇▇▇▇▇▇ International, any intermediate Subsidiary
between ▇▇▇▇▇▇▇▇▇ International and the Company, the Company or any Restricted
Subsidiary, or (b) default in the performance or observance of any obligation
or condition (subject to any applicable grace period) with respect to any such
other Debt of ▇▇▇▇▇▇▇▇▇ International, any intermediate Subsidiary between
▇▇▇▇▇▇▇▇▇ International and the Company, the Company or any Restricted
Subsidiary, if, in the case of either clause (a) or (b) above, the effect of
such default is to permit the holder of such Debt to accelerate the maturity of
(or there is matured and unpaid) such other Debt aggregating $5,000,000
($3,000,000 with respect to any Restricted Subsidiary) or more.
12.1.3 Other Material Obligations. Default in the payment when due,
whether by acceleration or otherwise, or in the performance or observance of,
any material obligation of, or condition agreed to by, the Company or any
Restricted Subsidiary with respect to any material purchase or lease of goods
or services (except only to the extent that the existence of any such default
is being contested by the Company or such Restricted Subsidiary in good faith
and by appropriate proceedings and appropriate reserves have been made in
respect of such default) but only if the aggregate liability of the Company and
the Restricted Subsidiaries in respect of all such purchases and leases so
affected shall exceed $5,000,000 ($3,000,000 with respect to any Restricted
Subsidiary).
12.1.4 Bankruptcy, Insolvency, etc. ▇▇▇▇▇▇▇▇▇ International, any
intermediate Subsidiary between ▇▇▇▇▇▇▇▇▇ International and the Company, any
Borrower, any Restricted Subsidiary or any Obligor becomes insolvent or
generally fails to pay, or admits in writing its inability or refusal to pay,
debts as they become due; or ▇▇▇▇▇▇▇▇▇ International, any intermediate
Subsidiary between ▇▇▇▇▇▇▇▇▇ International and the Company, any Borrower, any
such Restricted Subsidiary or any Obligor applies
91
for, consents to, or acquiesces in the appointment of a trustee, receiver,
administrator, liquidator or other custodian for ▇▇▇▇▇▇▇▇▇ International, any
intermediate Subsidiary between ▇▇▇▇▇▇▇▇▇ International and the Company, any
Borrower, such Restricted Subsidiary or such Obligor or any property thereof,
or makes a general assignment for the benefit of creditors; or, in the absence
of such application, consent or acquiescence, a trustee, receiver,
administrator, liquidator or other custodian is appointed for ▇▇▇▇▇▇▇▇▇
International, any intermediate Subsidiary between ▇▇▇▇▇▇▇▇▇ International and
the Company, any Borrower, any Restricted Subsidiary or any Obligor or for a
substantial part of the property of any thereof and is not discharged within 60
days; or any bankruptcy, insolvency, reorganization, debt arrangement, or other
case or proceeding under any bankruptcy or insolvency law, or any dissolution,
liquidation proceeding or winding up (except the voluntary dissolution, not
under any bankruptcy or insolvency law, of a Restricted Subsidiary), is
commenced in respect of ▇▇▇▇▇▇▇▇▇ International, any intermediate Subsidiary
between ▇▇▇▇▇▇▇▇▇ International and the Company, any Borrower, any Restricted
Subsidiary or any Obligor and if such case or proceeding is not commenced by
▇▇▇▇▇▇▇▇▇ International, any intermediate Subsidiary between ▇▇▇▇▇▇▇▇▇
International and the Company, any Borrower, such Restricted Subsidiary or such
Obligor, it is consented to or acquiesced in by ▇▇▇▇▇▇▇▇▇ International, any
intermediate Subsidiary between ▇▇▇▇▇▇▇▇▇ International and the Company, such
Borrower, such Restricted Subsidiary or such Obligor, or remains for 60 days
undismissed; ▇▇▇▇▇▇▇▇▇ International, any intermediate Subsidiary between
▇▇▇▇▇▇▇▇▇ International and the Company, any Borrower, any Restricted
Subsidiary or any Obligor takes any corporate action to authorize, or in
furtherance of, any of the foregoing.
12.1.5 Non-Compliance with Provisions of This Agreement. Failure by the
Company or any Restricted Subsidiary to comply with or to perform any covenant
set forth in Section 10.3, 10.5, 10.6, 10.7 through 10.13, 10.19, 10.26, 10.27,
10.28, or 10.30 through 10.32; failure by the Company or any Restricted
Subsidiary to comply with or to perform any covenant set forth in Section 10.18
and continuance of such failure for five days after notice thereof to the
Company from the Administrative Agent or any Lender (or, if such failure cannot
be cured with reasonable diligence within said five day period, such longer
period up to a total of 60 days after notice thereof provided the Company
promptly commence a cure within such five day period and diligently pursues the
same); or failure by the Company to comply with or to perform any other
provision of this Agreement (and not constituting an Event of Default under any
of the other provisions of this Section 12) and continuance of such failure for
30 days after notice thereof to the Company from the Administrative Agent or
any Lender (or, if such failure cannot be cured with reasonable diligence
within said 30 day period, such longer period up to a total of 60 days after
notice thereof provided the Company promptly commence a cure within such 30 day
period and diligently pursues the same).
12.1.6 Warranties. Any warranty made by any Obligor herein is breached
or is false or misleading in any material respect, or any schedule,
certificate, financial statement, report, notice or other writing furnished by
the Company or any Obligor to the Administrative Agent or any Lender is false
or misleading in any material respect on the date as of which the facts therein
set forth are stated or certified.
12.1.7 Pension Plans. (a) Institution of any steps by the Company or
any other Person to terminate a Pension Plan if as a result of such termination
any Borrower or any Restricted Subsidiary could be required to make a
contribution to such Pension Plan, or could incur a liability or obligation to
such Pension Plan, in excess of $5,000,000 or (b) a contribution failure occurs
with respect to any Pension Plan sufficient to give rise to a Lien under
section 302(f) of ERISA or otherwise.
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12.1.8 Judgments. Final judgments which exceed an aggregate of
$5,000,000 ($3,000,000 with respect to any Restricted Subsidiary) (excluding
any portion thereof which is covered by insurance so long as the insurer is
reasonably likely to be able to pay) shall be rendered against ▇▇▇▇▇▇▇▇▇
International, any Borrower or any Restricted Subsidiary and shall not have
been discharged or vacated or had execution thereof stayed pending appeal
within 30 days after entry or filing of such judgments.
12.1.9 Invalidity of Guaranty, etc. Any Guaranty shall cease to be in
full force and effect with respect to any Obligor (other than as expressly
permitted hereunder); any Obligor shall fail (subject to any applicable grace
period) to comply with or to perform any applicable provision of such Guaranty,
or any Obligor (or any Person by, through or on behalf of such Obligor) shall
contest in any manner the validity, binding nature or enforceability of such
Guaranty with respect to such Obligor.
12.1.10 Invalidity of Collateral Documents, etc. Any Collateral
Document shall cease to be in full force and effect with respect to the Company
or any Obligor (other than as expressly permitted hereunder); or any Borrower
or any Obligor shall fail (subject to any applicable grace period) to comply
with or to perform any applicable provision of any Collateral Document, or any
Borrower or any Obligor (or any Person by, through or on behalf of any Borrower
or any Obligor) shall contest in any manner the validity, binding nature or
enforceability of any Collateral Document.
12.1.11 Change in Control. A Change in Control shall occur.
12.1.12 Material Adverse Effect. The Required Lenders shall have
reasonably determined in good faith that an event has occurred or a condition
exists that has had or will have a Material Adverse Effect.
12.1.13 Ownership of Restricted Subsidiaries. Except as expressly
permitted hereunder, the Company shall fail to own directly or indirectly, free
and clear of all Liens (except the Lien of the Administrative Agent), 100% of
the issued and outstanding Capital Stock of the Restricted Subsidiaries in the
Financial Group (other than Canada Holdings and the Canadian Borrower and,
prior to the Redemption Date, DTH and FDTH) for any reason.
12.1.14 Redemption Date. The Redemption Date shall not have occurred
on or before June 30, 1997.
12.2 Effect of Event of Default. If any Event of Default described in
Section 12.1.4 shall occur, the Commitments (if they have not theretofore
terminated) shall immediately terminate and all Obligations hereunder shall
become immediately due and payable and the Borrowers shall become immediately
obligated to deliver to the Administrative Agent cash collateral in an amount
equal to the outstanding face amount of all Letters of Credit for which it is
liable and make all payments required under Section 3.7, all without
presentment, demand, protest or notice of any kind; and, in the case of any
other Event of Default, the Administrative Agent may (and upon written request
of the Required Lenders shall) declare the Commitments (if they have not
theretofore terminated) to be terminated and/or declare all Obligations
hereunder to be due and payable, and/or demand that the Borrowers immediately
deliver to the Administrative Agent cash and Cash Equivalent Investments and
other cash collateral acceptable to the Issuing Bank in an amount equal to the
outstanding face amount of all Letters of Credit for which it is liable and
make all payments required under Section 3.7, whereupon the Commitments (if
they have not theretofore terminated) shall immediately terminate and/or all
Obligations hereunder shall become immediately due and payable and/or the
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Borrowers shall immediately become obligated to deliver to the Administrative
Agent cash collateral in an amount equal to the face amount of all Letters of
Credit for which it is liable, all without presentment, demand, protest or
notice of any kind. The Administrative Agent shall promptly advise the Company
of any such declaration, but failure to do so shall not impair the effect of
such declaration. Notwithstanding the foregoing, the effect as an Event of
Default of any event described in Sections 12.1.1, 12.1.4, 12.1.9, 12.1.10 or
12.1.14 may be waived by the written concurrence of all of the Lenders, and the
effect as an Event of Default of any other event described in this Section 12
may be waived by the written concurrence of the Required Lenders. Any cash
collateral delivered hereunder shall be held by the Administrative Agent and
applied to obligations arising in connection with any drawing under a Letter of
Credit or Acceptance as the case may be. After the expiration or termination of
all Letters of Credit and Acceptances, such cash collateral shall be applied by
the Administrative Agent to any remaining Obligations of such Borrower
hereunder and any excess shall be delivered to the applicable Borrower or as a
court of competent jurisdiction may direct.
SECTION 13 THE ADMINISTRATIVE AGENT.
13.1 Authorization. Each Lender authorizes the Administrative Agent to
act on behalf of such Lender to the extent provided herein or in any other Loan
Document or any other document or instrument delivered hereunder or in
connection herewith, and to take such other action as may be reasonably
incidental thereto.
13.2 Indemnification. Each Lender agrees to reimburse and indemnify the
Administrative Agent for, and hold the Administrative Agent harmless against, a
share (determined in accordance with its respective Percentage) of any loss,
damage, penalty, action, judgment, obligation, cost, disbursement, liability or
expense (including attorneys' fees) incurred without gross negligence or
willful misconduct on the part of the Administrative Agent arising out of or in
connection with the performance of its respective obligations or the exercise
of its respective powers hereunder or under any other Loan Document or any
other document or instrument delivered hereunder or in connection herewith, as
well as the costs and expenses of defending against any claim against the
Administrative Agent arising hereunder or thereunder.
13.3 Exculpation. The Administrative Agent shall be entitled to rely
upon advice of counsel concerning legal matters, and upon this Agreement, any
other Loan Document and any schedule, certificate, statement, report, notice or
other writing which it believes to be genuine or to have been presented by a
proper Person. Neither the Administrative Agent nor any of its directors,
officers, employees or agents shall (a) be responsible for any recitals,
representations or warranties contained in, or for the execution, validity,
genuineness, effectiveness or enforceability of, this Agreement, any other Loan
Document or any other instrument or document delivered hereunder or in
connection herewith, (b) be responsible for the validity, genuineness,
perfection, effectiveness, enforceability, existence, value or enforcement of
any collateral security, (c) be under any duty to inquire into or pass upon any
of the foregoing matters, or to make any inquiry concerning the performance by
the Borrowers or any other Obligor of its obligations, or (d) in any event, be
liable as such for any action taken or omitted by it or them, except for its or
their own gross negligence or willful misconduct. The agency hereby created
shall in no way impair or affect any of the rights and powers of, or impose any
duties or obligations upon, the Administrative Agent in its individual
capacity.
13.4 Credit Investigation. Each Lender acknowledges that it has made
such inquiries and taken such care on its own behalf
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as would have been the case had such Lender's Commitments been granted, the
Letters of Credit been issued and such Lender's Loans and Acceptances been made
directly by such Lender to the Borrowers without the intervention of the
Administrative Agent or any other Lender. Each Lender agrees and acknowledges
that the Administrative Agent makes no representations or warranties about the
creditworthiness of the Borrowers or any other party to this Agreement or any
other Loan Document or with respect to the legality, validity, sufficiency or
enforceability of this Agreement or any other Loan Document or the value of any
security therefor.
13.5 Administrative Agent and Affiliates. The Administrative Agent in
its individual capacity shall have the same rights and powers hereunder as any
other Lender and may exercise or refrain from exercising the same as though it
were not the Administrative Agent, and the Administrative Agent and its
Affiliates may accept deposits from, make loans to and generally engage in any
kind of business with the Borrowers or any Affiliate thereof as if it were not
the Administrative Agent hereunder.
13.6 Action on Instructions of the Lenders. As to any matters not
expressly provided for by this Agreement (including, without limitation,
enforcement of any Loan Document or collection of the Credit Extensions), the
Administrative Agent shall not be required to exercise any discretion or take
any action, but the Administrative Agent shall in all cases be fully protected
in acting or refraining from acting upon the written instructions from the
Lenders. In no event will the Administrative Agent be required to take any
action which exposes the Administrative Agent to personal liability or which is
contrary to this Agreement, any other Loan Document or applicable law. The
relationship between the Administrative Agent and the Lenders is and shall be
that of agent and principal only and nothing herein contained shall be
construed to constitute the Administrative Agent a trustee for any Lender or
any holder of a participation in any Credit Extension nor to impose on the
Administrative Agent duties and obligations other than those expressly provided
for herein.
13.7 Funding Reliance. (a) Unless the Administrative Agent receives
notice from a Lender by 11:00 a.m. (Local Time) on the day of a proposed
borrowing that such Lender will not make available to the Administrative Agent
the amount which would constitute its Percentage of such borrowing in
accordance with Section 2.3, the Administrative Agent may assume that such
Lender has made such amount available to the Administrative Agent and, in
reliance upon such assumption, make a corresponding amount available to the
applicable Borrower. If and to the extent such Lender has not made any such
amount available to the Administrative Agent, such Lender and the applicable
Borrower jointly and severally agree to repay such amount to the Administrative
Agent forthwith on demand, together with interest thereon at the interest rate
applicable to Credit Extensions comprising such borrowing (or, in the case of
any Lender which repays such amount within three Business Days, the Federal
Funds Rate, if such Loan is a Tranche A or Tranche B Credit Extension, or the
Canadian interbank settlement rate, if such Loan is a Tranche C or Tranche D
Credit Extension). Nothing set forth in this clause (a) shall relieve any
Lender of any obligation it may have to make any Credit Extension hereunder.
(b) Unless the Administrative Agent receives notice from the applicable
Borrower prior to the due date for any payment hereunder that the applicable
Borrower does not intend to make such payment, the Administrative Agent may
assume that the applicable Borrower has made such payment and, in reliance upon
such assumption, make available to each Lender its share of such payment. If
and to the extent that the applicable Borrower has not made any such payment to
the Administrative Agent, each Lender which received a share of such payment
shall repay such
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share (or the relevant portion thereof) to the Administrative Agent forthwith
on demand, together with interest thereon at the Federal Funds Rate, if such
Loan is a Tranche A or Tranche B Credit Extension, or the Canadian interbank
settlement rate, if such Loan is a Tranche C or Tranche D Credit Extension.
Nothing set forth in this clause (b) shall relieve the applicable Borrower of
any obligation it may have to make any payment hereunder.
13.8 Collateral Matters. The Lenders irrevocably authorize the
Administrative Agent, at its option and in its discretion, to release any Lien
granted to or held by the Administrative Agent upon any Collateral (a) upon
termination of the Commitments and any Hedging Agreements with any Lender and
payment in full of all Loans, Acceptances and all other Obligations of the
Borrowers under this Agreement and under any other Loan Document and any
Hedging Agreements with any Lender; (b) constituting property sold or to be
sold or disposed of as part of or in connection with any disposition permitted
hereunder; (c) constituting property in which the Company or any Restricted
Subsidiary owned no interest at the time the Lien was granted or at any time
thereafter; (d) constituting property leased to the Company or any Restricted
Subsidiary under a lease which has expired or been terminated in a transaction
permitted under this Agreement or is about to expire and which has not been,
and is not intended by the Company or such Restricted Subsidiary to be, renewed
or extended; or (e) subject to the third sentence of Section 14.1, if approved,
authorized or ratified in writing by the Required Lenders. Upon request by the
Administrative Agent at any time, the Lenders will confirm in writing the
Administrative Agent's authority to release particular types or items of
Collateral pursuant to this Section 13.8.
13.9 Resignation. The Administrative Agent may resign as such at any
time upon at least 30 days' prior notice to the Company and the Lenders. The
Lenders shall (with, so long as no Event of Default or Unmatured Event of
Default exists, the prior written consent of the Company, which shall not be
unreasonably withheld or delayed) as promptly as practicable appoint a
successor Administrative Agent. If no successor shall have been so appointed,
and shall have accepted such appointment, within 30 days after the giving of
notice of such resignation, then the retiring Administrative Agent may, on
behalf of the Lenders, appoint a successor Administrative Agent, which shall be
a commercial bank having an office in Chicago, Illinois or New York, New York
and having a combined capital, surplus and undivided profits of at least
$500,000,000. Upon the Acceptance of any appointment as Administrative Agent
hereunder by a successor Administrative Agent, such successor Administrative
Agent shall thereupon succeed to and become vested with all rights, powers,
privileges and duties of the retiring Administrative Agent, and the retiring
Administrative Agent shall be discharged from all further duties and
obligations under this Agreement. After any resignation pursuant to this
Section 13.9, the provisions of this Section 13 shall inure to the benefit of
the retiring Administrative Agent as to any actions taken or omitted to be
taken by it while it was Administrative Agent hereunder.
SECTION 14 GENERAL.
14.1 Waiver; Amendments. No delay on the part of the Administrative
Agent or any Lender in the exercise of any right, power or remedy shall operate
as a waiver thereof, nor shall any single or partial exercise by any of them of
any right, power or remedy preclude other or further exercise thereof, or the
exercise of any other right, power or remedy. No amendment, modification or
waiver of, or consent with respect to, any provision of this Agreement shall in
any event be effective unless the same shall be in writing and signed and
delivered by the Company and by Lenders having an aggregate Percentage of not
less than the aggregate Percentage expressly designated herein
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with respect thereto or, in the absence of such designation as to any provision
of this Agreement, by the Required Lenders, and then any such amendment,
modification, waiver or consent shall be effective only in the specific
instance and for the specific purpose for which given. No amendment,
modification, waiver or consent (a) shall amend, modify or waive any condition
precedent to any Credit Extension without the consent of Lenders holding 100%
of the Commitments or (b) shall (i) extend or increase the amount of any
Commitment, (ii) extend the date for payment of any principal of or interest on
the Credit Extensions or any fees payable hereunder, (iii) reduce the principal
amount of any Credit Extensions, the rate of interest or discount thereon or
any fees payable hereunder, (iv) release any Person from its obligations under
any Guaranty or release any substantial part of the Collateral granted under
the Collateral Documents except Collateral having a fair market value of less
than $5,000,000 in the aggregate or as otherwise permitted under this Agreement
or the Collateral Documents or (v) change the definition of Approved
Acquisition or Required Lenders or the aggregate Percentage required to effect
an amendment, modification, waiver or consent or amend this Section 14.1
without, in each case, the consent of all Lenders. No provisions of Section 13
shall be amended, modified or waived without the consent of the Administrative
Agent. No provision relating to the aggregate amount of Letters of Credit that
may be issued, Section 2.6, 2.7, 2.8, 2.9, 2.12(d), 5.7(b) or 5.7(d) shall be
amended, modified or waived without the consent of the Issuing Bank. No
provision relating to Section 3 shall be amended, modified or waived without
the consent of the Canadian Lenders.
14.2 Confirmations. Each Borrower and each Lender agree from time to
time, upon written request received by it from the other, to confirm to the
other in writing (with a copy of each such confirmation to the Administrative
Agent) the aggregate unpaid principal amount of such Lender's Loans and
Acceptances then outstanding under this Agreement.
14.3 Notices. Except as otherwise provided in Sections 2.4, 2.5, 2.6,
3.1 and 5.3, all notices hereunder shall be in writing (including, without
limitation, facsimile transmission) and shall be sent to the applicable party
at its address shown on Schedule 14.3 or at such other address as such party
may, by written notice received by the other parties hereto, have designated as
its address for such purpose. Notices sent by facsimile transmission shall be
deemed to have been given when sent; notices sent by mail shall be deemed to
have been given three Business Days after the date when sent by registered or
certified mail, postage prepaid; and notices sent by hand delivery shall be
deemed to have been given when received. For purposes of Sections 2.4, 2.5,
2.6, 3.1 and 5.3, the Administrative Agent shall be entitled to rely on
telephonic instructions from any person that the Administrative Agent in good
faith believes is an authorized officer or employee of any Borrower and the
Borrowers shall hold the Administrative Agent and each Lender harmless from any
loss, cost or expense resulting from any such reliance.
14.4 Computations. Where the character or amount of any asset or
liability or item of income or expense is required to be determined, or any
consolidation or other accounting computation is required to be made, for the
purpose of this Agreement, such determination or calculation shall, to the
extent applicable and except as otherwise specified in this Agreement, be made
in accordance with GAAP applied on a basis consistent with those used in the
preparation of the Company's audited financial statements referred to in clause
(a) of Section 9.4.
14.5 Regulations G, T, U and X. Each Lender represents that it in good
faith is not relying, either directly or indirectly, upon any Margin Stock as
collateral security for the extension or maintenance by it of any credit
provided for in this Agreement.
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14.6 Costs, Expenses and Taxes. Each Borrower agrees to pay on demand
(a) all reasonable out-of-pocket costs and expenses of the Administrative Agent
(including the fees and charges of counsel for the Administrative Agent and of
local counsel, if any, who may be retained by said counsel) in connection with
the preparation, execution, delivery and administration of this Agreement, the
other Loan Documents and all other documents provided for herein or delivered
or to be delivered hereunder or in connection herewith (including, without
limitation, any amendment, supplement or waiver to any Loan Document), and (b)
all reasonable out-of-pocket costs and expenses (including reasonable
attorneys' fees, court costs and other legal expenses) incurred by the
Administrative Agent and each Lender after an Event of Default in connection
with the enforcement of this Agreement, the other Loan Documents or any such
other documents. Each Lender agrees to reimburse the Administrative Agent for
such Lender's pro rata share (based on its respective Percentage) of any such
costs and expenses of the Administrative Agent not paid by the Borrowers. In
addition, the Borrowers agrees to pay, and to save the Administrative Agent and
the Lenders harmless from all liability for, any stamp or other taxes which may
be payable in connection with the execution and delivery of this Agreement, the
borrowings hereunder or the execution and delivery of any other Loan Document
or any other document provided for herein or delivered or to be delivered
hereunder or in connection herewith. All obligations provided for in this
Section 14.6 shall survive repayment of the Obligations and any termination of
this Agreement.
14.7 Subsidiary References. The provisions of this Agreement relating
to Subsidiaries of the Company shall apply only during such times as the
Company has one or more Subsidiaries.
14.8 Captions. Section captions used in this Agreement are for
convenience only and shall not affect the construction of this Agreement.
14.9 Assignments; Participations.
14.9.1 Assignments. Any Lender may, with the prior written consent of
the Company (at all times other than during the existence of an Event of
Default), the Issuing Bank and the Administrative Agent (which consents shall
not be unreasonably delayed or withheld), at any time assign and delegate to
one or more commercial banks or other Persons (any Person to whom such an
assignment and delegation is to be made being herein called an "Assignee"), all
or any fraction of such Lender's Loans, Acceptances and Commitment hereunder
(which assignment and delegation shall be of a constant, and not a varying,
percentage of all the assigning Lender's Individual Commitment, participation
in Letters of Credit, Acceptances and Loans hereunder) in a minimum aggregate
amount equal to the lesser of (a) the sum of the assigning Lender's remaining
Loans and Acceptances, participation in Letters of Credit and (to the extent
not used) Individual Commitment hereunder and (b) $10,000,000 in the aggregate;
provided, however, that (i) no assignment and delegation may be made to any
Person if, at the time of such assignment and delegation, the Borrowers would
be obligated to pay any greater amount under Section 7.6 or Section 8 to the
Assignee than the Borrowers are then obligated to pay to the assigning Lender
under such Sections and (ii) the Borrowers, the Issuing Bank and the
Administrative Agent shall be entitled to continue to deal solely and directly
with such Lender in connection with the interests so assigned and delegated to
an Assignee until the date when all of the following conditions shall have been
met:
(x) five Business Days (or such lesser period of time as the
Administrative Agent and the assigning Lender shall agree) shall have passed
after written notice of such assignment and delegation, together with payment
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instructions, addresses and related information with respect to such Assignee,
shall have been given to the Company and the Administrative Agent by such
assigning Lender and the Assignee,
(y) the assigning Lender and the Assignee shall have executed and
delivered to the Company and the Administrative Agent an assignment agreement
substantially in the form of Exhibit G (an "Assignment Agreement"), together
with any documents required to be delivered thereunder, which Assignment
Agreement shall have been accepted by the Administrative Agent, the Issuing
Bank and, if applicable, the Company, and
(z) the assigning Lender or the Assignee shall have paid the
Administrative Agent a processing fee of $3,000.
From and after the date on which the conditions described above have been met,
(A) such Assignee shall be deemed automatically to have become a party hereto
and, to the extent that rights and obligations hereunder have been assigned and
delegated to such Assignee pursuant to such Assignment Agreement, shall have
the rights and obligations of a Lender hereunder, and (B) the assigning Lender,
to the extent that rights and obligations hereunder have been assigned and
delegated by it pursuant to such Assignment Agreement, shall be released from
its obligations hereunder. The Administrative Agent shall prepare all necessary
documents, if any, in connection with assignments. Accrued interest on that
part of such Lender's Obligations being assigned shall be paid as provided in
the Assignment Agreement. Accrued interest and fees on that part of such
Lender's Obligations not being assigned shall be paid to the assigning Lender.
Accrued interest and accrued fees shall be paid at the same time or times
provided in this Agreement. Any attempted assignment and delegation not made in
accordance with this Section 14.9.1 shall be null and void.
Notwithstanding the foregoing provisions of this Section 14.9.1 or any
other provision of this Agreement, any Lender may at any time assign all or any
portion of its Loans or Acceptances to any central bank (but no such assignment
shall release any Lender from any of its obligations hereunder).
Notwithstanding the foregoing provisions of this Section 14.9.1 or any
other provision of this Agreement, after the Tranche D Availability Date each
Lender who was a Canadian Lender on the Amendment Effective Date (an "Initial
Lender") may at any time assign a portion of its Total Commitment (not to
exceed its pro rata share of $80,000,000 unless the Initial Lenders agree
otherwise) to a Lender that has no Canadian office, notwithstanding that the
Borrowers may be required to gross-up for withholding taxes and such Assignee
Lender may subsequently assign such Assignee's Lender's Commitment, provided
that such Initial Lender has used its best efforts to syndicate to financial
institutions with a Canadian office.
14.9.2 Participations. Any Lender may at any time sell to one or more
commercial banks or other Persons participating interests in any Loan or
Acceptance owing to such Lender, the Commitment of such Lender, the direct or
participation interest of such Lender in any Letter of Credit or any other
interest of such Lender hereunder (any Person purchasing any such participating
interest being herein called a "Participant") provided that such assignments
shall be of a constant and not a varying percentage of the selling Lender's
Individual Commitment, Letters of Credit, Loans and Acceptances. In the event
of a sale by a Lender of a participating interest to a Participant, (x) the
Borrowers and the Administrative Agent shall continue to deal solely and
directly with such Lender in connection with such Lender's rights and
obligations hereunder and (y) all amounts payable by the Borrowers shall be
determined as if such Lender had not sold such participation and shall be paid
directly to
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such Lender. No Participant shall have any direct or indirect voting rights
hereunder except with respect to any of the events described in the third
sentence of Section 14.1. Each Lender agrees to incorporate the requirements of
the preceding sentence into each participation agreement which such Lender
enters into with any Participant. Each Borrower agrees that if amounts
outstanding under this Agreement are due and payable (as a result of
acceleration or otherwise), each Participant shall be deemed to have the right
of setoff in respect of its participating interest in amounts owing under this
Agreement and with respect to any Letter of Credit to the same extent as if the
amount of its participating interest were owing directly to it as a Lender
under this Agreement; provided that such right of setoff shall be subject to
the obligation of each Participant to share with the Lenders, and the Lenders
agree to share with each Participant, as provided in Section 7.5. Each Borrower
also agrees that each Participant shall be entitled to the benefits of Section
8 as if it were a Lender (provided that no Participant shall receive any
greater compensation pursuant to Section 8 than would have been paid to the
participating Lender if no participation had been sold).
14.10 Governing Law. This Agreement shall be a contract made under and
governed by the internal laws of the State of New York. Whenever possible each
provision of this Agreement shall be interpreted in such manner as to be
effective and valid under applicable law, but if any provision of this
Agreement shall be prohibited by or invalid under applicable law, such
provision shall be ineffective to the extent of such prohibition or invalidity,
without invalidating the remainder of such provision or the remaining
provisions of this Agreement. All obligations of the Company and rights of the
Administrative Agent and the Lenders expressed herein or in any other Loan
Document shall be in addition to and not in limitation of those provided by
applicable law.
14.11 Counterparts. This Agreement may be executed in any number of
counterparts and by the different parties hereto on separate counterparts and
each such counterpart shall be deemed to be an original, but all such
counterparts shall together constitute but one and the same Agreement.
14.12 Successors and Assigns. This Agreement shall be binding upon the
Borrowers, the Lenders and the Administrative Agent and their respective
successors and assigns, and shall inure to the benefit of the Borrowers, the
Lenders, the Issuing Bank and the Administrative Agent and the permitted
successors and assigns of the Lenders, the Issuing Bank and the Administrative
Agent. No Borrower shall be permitted to assign its Obligations under this
Agreement or any Loan Document without the written consent of all Lenders
except as provided in Section 14.20.
14.13 Indemnification by the Borrowers.
(a) In consideration of the execution and delivery of this Agreement by
the Administrative Agent and the Lenders and the agreement to extend the
Commitments provided hereunder, each Borrower hereby agrees to indemnify,
exonerate and hold the Issuing Bank, the Administrative Agent, each Lender and
each of the officers, directors, employees and agents of the Issuing Bank, the
Administrative Agent and each Lender (collectively the "Lender Parties" and
individually each a "Lender Party") free and harmless from and against any and
all actions, causes of action, suits, losses, liabilities, damages and
expenses, including, without limitation, reasonable attorneys' fees and charges
(collectively therein called the "Indemnified Liabilities"), incurred by the
Lender Parties or any of them as a result of, or arising out of, or relating to
(i) any tender offer, merger, purchase of stock, purchase of assets or other
similar transaction financed or proposed to be financed in whole or in part,
directly or indirectly, with the proceeds of any of the Loans, Acceptances or
Letters of Credit or (ii) the execution,
100
delivery, performance or enforcement of this Agreement or any other Loan
Document by any of the Lender Parties, except for any such Indemnified
Liabilities as to any Lender Party arising on account of such Lender Party's
bad faith, gross negligence or willful misconduct. If and to the extent that
the foregoing undertaking may be unenforceable for any reason, each Borrower
hereby agrees to make the maximum contribution to the payment and satisfaction
of each of the Indemnified Liabilities which is permissible under applicable
law. Nothing set forth above shall be construed to relieve any Lender Party
from any obligation it may have under this Agreement.
(b) Without limiting the provisions of clause (a) above, each Borrower
agrees to reimburse each Lender Party for, and indemnify each Lender Party
against, any and all losses, claims, damages, penalties, judgments, liabilities
and expenses (including reasonable attorneys' and consultant's fees) which any
Lender Party may pay, incur or become subject to arising out of or relating to
the use, handling, release, emission, discharge, transportation, storage,
treatment or disposal of any Regulated Material at any real property owned or
leased by the Company or any Restricted Subsidiary or used by the Company or
any Restricted Subsidiary in its business or operations, except to the extent
caused by the acts or omissions of such Lender Party.
14.14 Survival of Indemnities. All obligations provided for in Section
14.13 and in any other indemnity provided the Issuing Bank, the Administrative
Agent or any Lender in any other Loan Document shall survive repayment of the
Obligations and any termination of this Agreement or any of the Loan Documents.
14.15 Confidentiality. The Administrative Agent, the Issuing Bank and
the Lenders shall hold all non-public information obtained pursuant to the
requirements of this Agreement which has been identified as such by the Company
in accordance with their customary procedures for handling confidential
information of this nature and in accordance with safe and sound banking
practices and, in any event, may make disclosure on the same confidential basis
as provided for herein that is reasonably required by any actual or bona fide
potential transferee or participant in connection with the contemplated
transfer of any Loan or Acceptance or participation therein or in any Letter of
Credit or as required or requested by any governmental agency or representative
thereof or pursuant to legal process; provided that, unless prohibited by
applicable law or court order, the Administrative Agent, the Issuing Bank and
each Lender shall promptly notify the Company of any request by any
governmental agency or representative thereof (other than any such request in
connection with an examination of the financial condition of the Administrative
Agent, the Issuing Bank or such Lender by such governmental agency) for
disclosure of any such non-public information prior to disclosure of such
information.
14.16 Forum Selection and Consent to Jurisdiction. ANY LITIGATION BASED
HEREON, OR ARISING OUT OF, UNDER, OR IN CONNECTION WITH THIS AGREEMENT OR ANY
OTHER LOAN DOCUMENT, SHALL BE BROUGHT AND MAINTAINED EXCLUSIVELY IN THE COURTS
OF THE STATE OF NEW YORK OR IN THE UNITED STATES DISTRICT COURT FOR THE
SOUTHERN DISTRICT OF NEW YORK; PROVIDED, HOWEVER, AT THE ADMINISTRATIVE AGENT'S
OPTION, ANY SUCH LITIGATION MAY BE BROUGHT AND MAINTAINED AND/OR ANY SUIT
SEEKING ENFORCEMENT AGAINST ANY COLLATERAL OR OTHER PROPERTY MAY BE BROUGHT, AT
THE ADMINISTRATIVE AGENT'S OPTION, IN THE COURTS OF ANY JURISDICTION WHERE SUCH
BORROWER, COLLATERAL OR OTHER PROPERTY MAY BE FOUND. EACH OF THE BORROWERS, THE
ISSUING BANK, THE ADMINISTRATIVE AGENT AND EACH LENDER HEREBY EXPRESSLY AND
IRREVOCABLY SUBMITS TO THE JURISDICTION OF THE COURTS OF THE STATE OF NEW YORK
AND OF THE UNITED STATES DISTRICT COURT FOR THE SOUTHERN DISTRICT OF NEW YORK
FOR THE PURPOSE OF ANY SUCH LITIGATION AS SET FORTH ABOVE. EACH OF THE BORROWS,
THE ISSUING BANK, THE ADMINISTRATIVE AGENT AND EACH LENDER FURTHER IRREVOCABLY
CONSENTS TO THE SERVICE OF PROCESS BY REGISTERED MAIL, POSTAGE PREPAID, OR BY
PERSONAL SERVICE WITHIN OR WITHOUT THE STATE OF NEW YORK. EACH BORROWER
101
HEREBY EXPRESSLY AND IRREVOCABLY WAIVES, TO THE FULLEST EXTENT PERMITTED BY
LAW, ANY OBJECTION WHICH IT MAY NOW OR HEREAFTER HAVE TO THE LAYING OF VENUE OF
ANY SUCH LITIGATION BROUGHT IN ANY SUCH COURT REFERRED TO ABOVE AND ANY CLAIM
THAT ANY SUCH LITIGATION HAS BEEN BROUGHT IN AN INCONVENIENT FORUM.
14.17 Waiver of Jury Trial. EACH OF THE BORROWERS, THE ISSUING BANK,
THE ADMINISTRATIVE AGENT AND EACH LENDER HEREBY WAIVES ANY RIGHT TO A TRIAL BY
JURY IN ANY ACTION OR PROCEEDING TO ENFORCE OR DEFEND ANY RIGHTS UNDER THIS
AGREEMENT, ANY OTHER LOAN DOCUMENT AND ANY AMENDMENT, INSTRUMENT, DOCUMENT OR
AGREEMENT DELIVERED OR WHICH MAY IN THE FUTURE BE DELIVERED IN CONNECTION
HEREWITH OR THEREWITH OR ARISING FROM ANY BANKING RELATIONSHIP EXISTING IN
CONNECTION WITH ANY OF THE FOREGOING, AND AGREES THAT ANY SUCH ACTION OR
PROCEEDING SHALL BE TRIED BEFORE A COURT AND NOT BEFORE A JURY.
14.18 American Legal Terms. References to any legal term or concept
(including without limitation those for any action, remedy, method of judicial
proceeding, document, statute, court official, governmental authority or
agency) shall in respect of any jurisdiction other than the United States be
construed as references to the term or concept which most nearly corresponds to
it in that jurisdiction.
14.19 Judgment Currency. The obligations of the Borrowers and each
Obligor in respect of any sum due to any Lender, the Issuing Bank or the
Administrative Agent hereunder, under or in respect of any other Loan Document
shall, notwithstanding any judgment in a currency (the "Judgment Currency")
other than the currency in which such sum was originally denominated (the
"Original Currency"), be discharged only to the extent that on the Business Day
following receipt by such Lender, such Issuing Bank, or the Administrative
Agent of any sum adjudged to be so due in the Judgment Currency, such Lender,
such Issuing Bank, or the Administrative Agent, in accordance with normal
banking procedures, purchases the Original Currency with the Judgment Currency.
If the amount of Original Currency so purchased is less than the sum originally
due to such Lender, such Issuing Bank, or the Administrative Agent, each
Borrower agrees, as a separate obligation and notwithstanding any such
judgment, to indemnify such Lender, such Issuing Bank, or the Administrative
Agent, as the case may be, against such loss, and if the amount of Original
Currency so purchased exceeds the sum originally due to such Lender, such
Issuing Bank, or the Administrative Agent, as the case may be, such Lender,
such Issuing Bank, or the Administrative Agent, as the case may be, agrees to
remit such excess to the applicable Borrower.
14.20 Tranche D Assumption. ▇▇▇▇▇▇▇▇▇ Canadian Publishing Holdings
Inc. shall have the right to substitute a Wholly Owned Restricted Subsidiary
satisfactory to the Lenders as the party entitled to borrow the Tranche D
Commitment and with respect to the other Obligations of ▇▇▇▇▇▇▇▇▇ Canadian
Publishing Holdings Inc. as Acquisition Borrower under this Agreement (the
"Assumed Obligations"), provided that such Person executes an assumption
agreement in form and substance satisfactory to the Administrative Agent (the
"Assumption Agreement") and the Guaranties and Collateral Documents continue to
guaranty and secure repayment of such Assumed Obligation on terms satisfactory
to the Lenders (collectively the "Acquisition Assumption").
SECTION 15 GUARANTY PROVISIONS.
15.1 Guaranty. Each of the Company, the U.K. Borrower, the Canadian
Borrower and the Acquisition Borrower (each referred to in this Section 15 as a
"Guarantor") guarantees certain Obligations of the other Borrowers as follows:
(a) the Company hereby absolutely, unconditionally and irrevocably, and
jointly and severally, as primary obligor and
102
not merely as surety, guarantees the full and prompt payment when due, whether
by acceleration or otherwise, and at all times thereafter, of all Obligations
(monetary or otherwise) of the U.K. Borrower, the Canadian Borrower and the
Acquisition Borrower to each of the Lenders, to the Issuing Bank and to the
Administrative Agent, howsoever created, arising or evidenced, whether direct
or indirect, absolute or contingent, now or hereafter existing, or due or to
become due, which arise out of or in connection with the Credit Agreement, any
Letter of Credit or Letter of Credit Application, any Acceptances, any Hedging
Agreement or any other Loan Document, in each case as the same may be amended,
modified, extended or renewed from time to time (all such obligations being
herein collectively called the "Company Guaranteed Obligations"),
(b) the U.K. Borrower hereby absolutely, unconditionally and
irrevocably, and jointly and severally, as primary obligor and not merely as
surety, guarantees the full and prompt payment when due, whether by
acceleration or otherwise, and at all times thereafter, of all Obligations
(monetary or otherwise) of the Canadian Borrower and the Acquisition Borrower
to each of the Lenders, the Issuing Bank and to the Administrative Agent,
howsoever created, arising or evidenced, whether direct or indirect, absolute
or contingent, now or hereafter existing, or due or to become due, which arise
out of or in connection with the Credit Agreement, any Letter of Credit or
Letter of Credit Application, any Acceptances, any Hedging Agreement or any
other Loan Document, in each case as the same may be amended, modified,
extended or renewed from time to time (all such obligations being herein
collectively called the "U.K. Borrower Guaranteed Obligations"),
(c) the Canadian Borrower hereby absolutely, unconditionally and
irrevocably, and jointly and severally, as primary obligor and not merely as
surety, guarantees the full and prompt payment when due, whether by
acceleration or otherwise, and at all times thereafter, of all Obligations
(monetary or otherwise) of the U.K. Borrower and the Acquisition Borrower to
each of the Lenders, the Issuing Bank and to the Administrative Agent,
howsoever created, arising or evidenced, whether direct or indirect, absolute
or contingent, now or hereafter existing, or due or to become due, which arise
out of or in connection with the Credit Agreement, any Letter of Credit or
Letter of Credit Application, any Acceptances, any Hedging Agreement or any
other Loan Document, in each case as the same may be amended, modified,
extended or renewed from time to time (all such obligations being herein
collectively called the "Canadian Borrower Guaranteed Obligations"), and
(d) the Acquisition Borrower hereby absolutely, unconditionally and
irrevocably, and jointly and severally, as primary obligor and not merely as
surety, guarantees the full and prompt payment when due, whether by
acceleration or otherwise, and at all times thereafter, of all Obligations
(monetary or otherwise) of the U.K. Borrower and the Canadian Borrower to each
of the Lenders, the Issuing Bank and to the Administrative Agent, howsoever
created, arising or evidenced, whether direct or indirect, absolute or
contingent, now or hereafter existing, or due or to become due, which arise out
of or in connection with the Credit Agreement, any Letter of Credit or Letter
of Credit Application, any Acceptances, any Hedging Agreement or any other Loan
Document, in each case as the same may be amended, modified, extended or
renewed from time to time (all such obligations being herein collectively
called the "Acquisition Borrower Guaranteed Obligations").
The Company Guaranteed Obligations, U.K. Borrower Guaranteed
Obligations, the Canadian Borrower Guaranteed Obligations and the Acquisition
Borrower Guaranteed Obligations are herein collectively referred to as the
"Guaranteed Obligations."
This Guaranty constitutes a guaranty by each Guarantor of payment when
due and not of collection and each Guarantor
103
specifically agrees that it shall not be necessary or required that the
Administrative Agent or any Lender exercise any right, assert any claim or
demand or enforce any remedy whatsoever against any Borrower (or any other
Person) before or as a condition to the obligations of such Guarantor
hereunder.
Any term or provision of this Guaranty or any other Loan Document to
the contrary notwithstanding, the aggregate maximum amount of the Guaranteed
Obligations for which each Guarantor shall be liable shall not exceed the
maximum amount for which such Guarantor can be liable without rendering this
Guaranty or any other Loan Document as it relates to such Guarantor, voidable
under applicable law relating to fraudulent conveyance or fraudulent transfer.
15.2 Acceleration of Guaranty. Each Guarantor agrees that, in the event
of any Event of Default under Section 12.1.4, and if such event shall occur at
a time when any of its Guaranteed Obligations are not then due and payable,
such Guarantor shall pay to the Administrative Agent for the account of the
Administrative Agent and the Lenders forthwith the full amount which would be
payable hereunder by such Guarantor if all its Guaranteed Obligations were then
due and payable.
15.3 Guaranty Absolute, etc. This Guaranty shall in all respects be a
continuing, absolute, unconditional and irrevocable guaranty of payment by each
Guarantor, and shall remain in full force and effect until all its Guaranteed
Obligations have been paid in full, finally and indefeasibly, all obligations
of such Guarantor hereunder shall have been paid in full, finally and
indefeasibly, and the Commitments, all Letters of Credit, all Acceptances, all
Hedging Agreements and any other commitments by the Lenders or the
Administrative Agent to the Borrowers shall have terminated. Each Guarantor
guarantees that its Guaranteed Obligations shall be paid strictly in accordance
with the terms of this Agreement and each other Loan Document under which they
arise, regardless of any law, regulation or order now or hereafter in effect in
any jurisdiction affecting any of such terms or the rights of the
Administrative Agent or any Lender with respect thereto. The creation or
existence from time to time of additional Guaranteed Obligations to the
Administrative Agent or the Lenders or any of them is hereby authorized,
without notice to any Guarantor, and shall in no way impair the rights of the
Administrative Agent or the Lenders or the obligations of any Guarantor under
this Guaranty, including the guaranty hereunder of such additional Guaranteed
Obligations. The liability of each Guarantor under this Guaranty shall be
absolute, unconditional and irrevocable irrespective of:
(a) any lack of validity, legality or enforceability of this
Agreement or any other Loan Document;
(b) the failure of the Administrative Agent or any Lender
(i) to assert any claim or demand or to enforce any right or remedy
against any Borrower or any other Person (including any other guarantor) under
the provisions of this Agreement or any other Loan Document or otherwise, or
(ii) to exercise any right or remedy against any other guarantor of,
or collateral securing, any Guaranteed Obligations;
(c) any change in the time, manner or place of payment of, or in any
other term of, all or any of the Guaranteed Obligations, or any other
extension, compromise or renewal of any Guaranteed Obligation;
(d) any reduction, limitation, impairment or termination of any
Guaranteed Obligations for any reason,
104
including any claim of waiver, release, surrender, alteration or compromise,
and shall not be subject to (and such Guarantor hereby waives any right to or
claim of) any defense or setoff, counterclaim, recoupment or termination
whatsoever by reason of the invalidity, illegality, nongenuineness,
irregularity, compromise, unenforceability of, or any other event or occurrence
affecting, any Guaranteed Obligations;
(e) any amendment to, rescission, waiver, or other modification of, or
any consent to departure from, any of the terms of this Agreement or any other
Loan Document;
(f) (i) any addition, exchange, release, surrender or non-perfection of
any collateral or (ii) any amendment to or waiver or release or addition of, or
consent to departure from, any other guaranty held by the Administrative Agent
or any Lender, securing or supporting any of the Guaranteed Obligations; or
(g) any other circumstance which might otherwise constitute a defense
available to, or a legal or equitable discharge of, any Guarantor, any
Borrower, any surety or any other guarantor.
15.4 Reinstatement, etc. Each Guarantor agrees that this Guaranty shall
continue to be effective or be reinstated, as the case may be, if at any time
any payment (in whole or in part) of any of its Guaranteed Obligations is
rescinded or must otherwise be restored by the Administrative Agent or any
Lender, upon the insolvency, bankruptcy or reorganization of any Borrower, any
other Person or otherwise, as though such payment had not been made.
15.5 Waiver, etc. Each Guarantor hereby waives promptness, diligence,
notice of acceptance and any other notice with respect to any of the Guaranteed
Obligations and this Guaranty and any requirement that the Administrative Agent
or any Lender protect, secure, perfect or insure any security interest or Lien,
or any property subject thereto, or exhaust any right or take any action
against any Borrower or any other Person (including any other guarantor) or
entity or any collateral securing any Guaranteed Obligations.
15.6 Waiver of Subrogation and Contribution. Until the Guaranteed
Obligations have been paid in cash indefeasibly in full, each Guarantor hereby
irrevocably waives any claim or other rights which it may now or hereafter
acquire against any Borrower or any other Person that arise from the existence,
payment, performance or enforcement of such Guarantor's obligations under this
Guaranty or any other Loan Document, including any right of subrogation,
reimbursement, contribution, exoneration, or indemnification, any right to
participate in any claim or remedy of the Administrative Agent or any Lender
against any Borrower or any other Person or any collateral which the
Administrative Agent or any Lender now has or hereafter acquires, whether or
not such claim, remedy or right arises in equity, or under contract, statute or
common law, including the right to take or receive from any Borrower or any
other Person, directly or indirectly, in cash or other property or by set-off
or in any manner, payment or security on account of such claim or other rights.
If any amount shall be paid to any Guarantor in violation of the preceding
sentence and the Guaranteed Obligations shall not have been paid in cash
indefeasibly in full and the Commitments, all Letters of Credit, all
Acceptances, all Hedging Agreements and any other commitments by the Lenders or
the Administrative Agent to any Borrower shall not have been terminated, such
amount shall be deemed to have been paid to such Guarantor for the benefit of,
and held in trust for, the Administrative Agent and the Lenders, and shall
forthwith be paid to the Administrative Agent to be credited and applied upon
the Guaranteed Obligations, whether matured or unmatured. Each Guarantor
acknowledges that it will receive direct and indirect benefits from the
financing
105
arrangements contemplated by this Agreement and that the waiver set forth in
this Section is knowingly made in contemplation of such benefits.
SECTION 16 AMENDMENT EFFECTIVE DATE ASSIGNMENT
16.1 Amendment Effective Date of Assignments. By their execution of
Exhibit A, each of the Original Lenders listed on Schedule I to Exhibit A who
is not a Lender hereunder agrees, and by their execution of this Agreement each
of the Lenders agrees that:
(a) effective as of the Amendment Effective Date,
(i) each of the Original Lenders listed on Schedule I to Exhibit A
(each, an "Assignor Lender") will sell and assign an interest in and to all of
such Assignor Lender's respective rights and obligations under the Commitment
(as defined in the Existing Credit Agreement) and participations in Letters of
Credit of the Assignor Lender (such Commitment and participations in Letters of
Credit of any Assignor Lender being the "Assigned Interests"); and
(ii) each Lender party to this Agreement after giving effect to and on
the Amendment Effective Date (each, an "Assignee Lender") will purchase and
assume the Assigned Interests set forth set forth opposite its name on Schedule
I to Exhibit A (each such assignment being made to each Assignee Lender in an
amount equal to each Assignor Lender's pro rata share of each of the respective
Assigned Interests purchased and assumed by such Assignee Lender);
(b) as of the Amendment Effective Date, prior to giving effect to any
assignment, purchase or assumption under this Section 16 as of such date, each
Assignor Lender represents and warrants as to the assignment effected by such
Assignor Lender, that as of the Amendment Effective Date:
(i) its Commitment under the Existing Credit Agreement is in the dollar
amount specified as its Commitment on Schedule I to Exhibit A and no Loans
(other than Loans to be repaid on the Amendment Effective Date) and no
reimbursement obligations with respect to the Existing Letters of Credit are
owing to such Assignor Lender; and
(ii) such Assignor Lender is the legal and beneficial owner of the
Assigned Interests being assigned by it hereunder and that such Assigned
Interests are free and clear of any adverse claim or encumbrances by the
Assignor Lender;
(c) each Assignor Lender and each Assignee Lender confirms and agrees
with each other and each other Lender as to the assignment effected by such
Assignor Lender and Assignee Lender, as the case may be, as follows:
(i) except as set forth in Section 16.2, each such Assignor Lender
makes no representation or warranty and assumes no responsibility with respect
to any statements, warranties or representations made in or in connection with
the Existing Credit Agreement or this Agreement or with respect to the
execution, legality, validity, enforceability, genuineness, sufficiency or
value of the Existing Credit Agreement, any other "Loan Document" (as defined
in the Existing Credit Agreement), this Agreement or any other Loan Document;
(ii) each such Assignor Lender makes no representation or warranty and
assumes no responsibility with respect to the financial condition of the
Company or any Obligor or the performance or observance by the Company or any
Obligor of
106
any of its obligations under the Existing Credit Agreement, any other "Loan
Document" (as defined in the Existing Credit Agreement), this Agreement or any
other Loan Document;
(iii) each Assignee Lender confirms that it has received such documents
and information as it has deemed appropriate to make its own credit analysis
and decision to execute and deliver this Agreement and agrees that it shall
have no recourse against the Administrative Agent, the Issuing Bank, any
Assignor Lender or any other Lender with respect to any matters relating to the
Existing Credit Agreement or this Agreement; and
(iv) each Assignee Lender will, independently and without reliance upon
the Administrative Agent, the Issuing Bank or any other Lender and based on
such documents and information as it shall deem appropriate at the time,
continue to make its own credit decisions in taking or not taking action under
this Agreement and the other Loan Documents;
(d) effective as of the Amendment Effective Date,
(i) each Assignee Lender shall be and be deemed a party to this
Agreement and have the rights and obligations of a Lender hereunder; and
(ii) each Assignor Lender shall, to the extent provided herein,
relinquish its rights and be released from its obligations under this Agreement
as to any assignment effected pursuant to this Section 16; and
(e) from and after the Amendment Effective Date, the Administrative
Agent shall make all payments under this Agreement in respect of the Assigned
Interests assigned hereby (including, all payments of principal, interest and
commitment fees with respect thereto) to each Assignee Lender as a Lender
hereunder.
Delivered at New York, New York, as of the day and year first above
written.
▇▇▇▇▇▇▇▇▇ INTERNATIONAL PUBLISHING INC.
By:
-------------------------------------
Title:
----------------------------------
TELEGRAPH GROUP LIMITED
By:
-------------------------------------
Title:
----------------------------------
▇▇▇▇▇▇▇▇▇ CANADIAN PUBLISHING HOLDINGS INC.
By:
-------------------------------------
Title:
----------------------------------
TORONTO DOMINION (TEXAS), INC.,
as Administrative Agent
By:
-------------------------------------
Title:
----------------------------------
THE TORONTO-DOMINION BANK,
as Issuing Bank
By:
-------------------------------------
Title:
----------------------------------
▇▇▇
▇▇▇▇▇▇▇ ▇▇▇▇▇▇▇▇ (▇▇▇▇▇), INC.,
as Lender under Tranche A and Tranche B
By:
-------------------------------------
Title:
----------------------------------
THE TORONTO-DOMINION BANK, as Canadian Lender
under Tranche C and Tranche D
By:
-------------------------------------
Title:
----------------------------------
CIBC INC., as Lender under Tranche A
By:
-------------------------------------
Title:
----------------------------------
CANADIAN IMPERIAL BANK OF COMMERCE, as Lender
under Tranche B and Canadian Lender under
Tranche C and Tranche D
By:
-------------------------------------
Title:
----------------------------------
THE BANK OF NOVA SCOTIA as Lender under Tranche
A and Tranche B
By:
-------------------------------------
Title:
----------------------------------
THE BANK OF NOVA SCOTIA as Canadian Lender
under Tranche C and Tranche D
By:
-------------------------------------
Title:
----------------------------------
THE FIRST NATIONAL BANK OF CHICAGO
as Lender under Tranche A and Tranche B
By:
-------------------------------------
Title:
----------------------------------
▇▇▇
▇▇▇▇▇ ▇▇▇▇▇▇▇ ▇▇▇ ▇▇▇▇, ▇▇▇▇▇▇ as Canadian
Lender under Tranche C and Tranche D
By:
-------------------------------------
Title:
----------------------------------
BANK OF AMERICA NATIONAL TRUST AND SAVINGS
ASSOCIATION as Lender under Tranche A and
Tranche B
By:
-------------------------------------
Title:
----------------------------------
BANK OF AMERICA CANADA as Canadian Lender under
Tranche C and Tranche D
By:
-------------------------------------
Title:
----------------------------------
109
SCHEDULE 1.1
COMMITMENTS AND PERCENTAGES
Lender
Total
Commitment
Tranche A
Commitment
Tranche B
Commitment
Tranche C
Commitment
Tranche D
Commitment
Percentage
Canadian
Percentage
Toronto
Dominion
(Texas), Inc.
-and-
The Toronto-
Dominion Bank
$187,000,000
$187,500,000
$31,250,000.01
20.8333%
$52,083,333.34
$145,833,333.33
20.8333%
Canadian
Imperial Bank
of Commerce
$187,500,000
110
$187,500,000
$31,250,000.01
20.8333%
$52,083,333.34
$145,833,333.33
20.8333%
The Bank of
Nova Scotia
$187,500,000
$187,500,000
$31,250,000.01
20.8333%
$52,083,333.34
$145,833,333.33
20.8333%
▇▇▇▇ ▇▇
▇▇▇▇▇▇▇ ▇▇&▇▇
-▇▇▇-
▇▇▇▇ ▇▇
▇▇▇▇▇▇▇
▇▇▇▇▇▇
$168,750,000
$168,750,000
$28,125,000.01
18.7500%
$46,875,000.00
$131,250,000.00
18.7500%
The First
National Bank
of Chicago
-and-
First Chicago
NBD Bank
Canada
111
$168,750,000
$168,750,000
$28,125,000.01
18.7500%
$46,875,000.00
$131,250,000.00
18.7500%
Total
$900,000,000
$900,000,000
$150,000,000
$250,000,000
$700,000,000
100.0000%
100.0000%
SCHEDULE 1.2
PRICING GRID
Applicable Margin
Total Leverage Ratio
Base Rate
Eurocurrency Rate/
Acceptance Fee
> 6.50x
1.375%
2.250%
> 6.00x < 6.50x
1.125%
2.000%
> 5.50x < 6.00x
0.875%
1.750%
> 5.00x < 5.50x
112
0.625%
1.500%
> 4.50x < 5.00x
0.250%
1.125%
> 4.00x < 4.50x
0.125%
1.000%
< 4.00x
0.000%
0.875%
Total Leverage Ratio
Commitment Fee Rate
> 5.00x
0.500%
< 5.00x
0.375%
SCHEDULE 2.6
EXISTING LETTERS OF CREDIT
L/C #
Beneficiary
Amount
Expiry Date
1175
Utica Mutual Insurance Co.
$ 251,277.00
03/29/98
1200
Home Insurance Co.
$ 796,000.00
03/23/98
1297
Zurich-American Ins. Co.
$1,290,110.00
06/30/97
1298
Zurich-American Ins. Co.
$ 24,688.00
06/30/97
1395
▇▇▇ ▇▇▇▇▇ ▇▇▇▇▇▇
Associates
$ 32,003.12
11/29/97
113
Total L/Cs
$2,394,078.12
SCHEDULE 6.1.2
SCHEDULED MANDATORY COMMITMENT REDUCTIONS
Date
Total
Commitment
Reduction
Tranche A
Commitment
Reduction
Tranche B
Commitment
Reduction
Tranche C
Commitment
Reduction
Tranche D
Commitment
Reduction
06/30/00
6.25%
6.25%
6.25%
6.25%
6.25%
09/30/00
6.25%
6.25%
6.25%
6.25%
6.25%
12/31/00
6.25%
6.25%
6.25%
6.25%
6.25%
03/31/01
6.25%
6.25%
6.25%
6.25%
6.25%
06/30/01
6.25%
6.25%
6.25%
6.25%
6.25%
09/30/01
6.25%
6.25%
6.25%
6.25%
6.25%
12/31/01
6.25%
6.25%
6.25%
6.25%
6.25%
03/31/02
6.25%
6.25%
6.25%
114
6.25%
6.25%
06/30/02
6.25%
6.25%
6.25%
6.25%
6.25%
09/30/02
6.25%
6.25%
6.25%
6.25%
6.25%
12/31/02
6.25%
6.25%
6.25%
6.25%
6.25%
03/31/03
6.25%
6.25%
6.25%
6.25%
6.25%
06/30/03
6.25%
6.25%
6.25%
6.25%
6.25%
09/30/03
6.25%
6.25%
6.25%
6.25%
6.25%
12/31/03
6.25%
6.25%
6.25%
6.25%
6.25%