EXHIBIT 4.2
EXECUTION COPY
================================================================================
AMENDED AND RESTATED
CREDIT AGREEMENT
among
WESCO DISTRIBUTION-CANADA, INC.,
AS BORROWER,
THE SEVERAL LENDERS
FROM TIME TO TIME PARTIES HERETO,
THE BANK OF NOVA SCOTIA,
as Administrative Agent
and
BARCLAYS BANK PLC,
as Collateral Agent
DATED AS OF MARCH 14, 1997
================================================================================
TABLE OF CONTENTS
=================
Page
----
SECTION 1. DEFINITIONS................................................ 2
1.1 Defined Terms.............................................. 2
1.2 Other Definitional Provisions.............................. 49
SECTION 2. AMOUNT AND TERMS OF COMMITMENTS............................ 50
2.1 Commitments................................................ 50
2.2 Revolving Credit Notes..................................... 50
2.3 Procedure for Revolving Credit Borrowing................... 51
2.4 Termination or Reduction of Commitments;
Transfers of the Commitment and the U.S.
Commitment................................................. 52
2.5 Swing Line Commitments..................................... 55
SECTION 3. AMOUNT AND TERMS OF ACCEPTANCE SUB-FACILITY................ 59
3.1 Acceptance Commitments..................................... 59
3.2 Creation of Acceptances.................................... 60
3.3 Discount of Acceptances.................................... 61
3.4 Stamping Fees.............................................. 62
3.5 Acceptance Reimbursement Obligations....................... 62
3.6 Converting Loans to Acceptances and
Acceptances to Loans....................................... 64
3.7 Acceptances to be Supplemented by Prime
Rate Loans in order to be Created Ratably.................. 65
3.8 Special Provisions Relating to Non-Chartered Banks......... 66
SECTION 4. LETTERS OF CREDIT.......................................... 67
4.1 L/C Commitment............................................. 67
4.2 Procedure for Issuance of Letters of Credit................ 68
4.3 Fees, Commissions and Other Charges........................ 68
4.4 L/C Participations......................................... 69
4.5 Reimbursement Obligation of the Borrower................... 71
4.6 Obligations Absolute....................................... 73
i
Page
----
4.7 Letter of Credit Payments.................................. 74
4.8 Application................................................ 74
SECTION 5. GENERAL PROVISIONS APPLICABLE TO LOANS AND
LETTERS OF CREDIT.......................................... 75
5.1 Interest Rates and Payment Dates........................... 75
5.2 Optional and Mandatory Prepayments......................... 76
5.3 Commitment Fees; Agency Fees; Other Fees................... 78
5.4 Computation of Interest and Fees........................... 78
5.5 Pro Rata Treatment and Payments............................ 79
5.6 Borrowing Base Compliance.................................. 81
5.7 Illegality................................................. 81
5.8 Requirements of Law........................................ 82
5.9 Taxes...................................................... 84
5.10 Certain Rules Relating to the Payment of
Additional Amounts......................................... 86
SECTION 6. REPRESENTATIONS AND WARRANTIES............................. 88
6.1 Solvent.................................................... 89
6.2 Corporate Existence........................................ 89
6.3 Corporate Power; Authorization; Enforceable
Obligations................................................ 89
6.4 No Legal Bar............................................... 90
6.5 No Default................................................. 91
6.6 Collateral................................................. 91
6.7 Subsidiaries............................................... 92
6.8 Purpose of Loans........................................... 92
6.9 Canadian Pension Plans..................................... 92
6.10 Representations and Warranties in the U.S.
Credit Agreement........................................... 93
6.11 No Default................................................. 93
SECTION 7. CONDITIONS PRECEDENT....................................... 93
7.1 Conditions to Effectiveness................................ 93
7.2 Conditions to Each Extension of Credit..................... 94
SECTION 8. AFFIRMATIVE COVENANTS...................................... 95
8.1 Financial Statements....................................... 96
ii
Page
----
8.2 Certificates; Other Information............................ 99
8.3 Collateral Audit........................................... 101
8.4 Notices.................................................... 102
8.5 Landlord Waivers........................................... 102
8.6 Loans to Cover U.S. Borrowing Base
Defaults................................................... 102
8.7 Cash Management System..................................... 103
SECTION 9. NEGATIVE COVENANTS......................................... 104
9.1 Limitation on Fundamental Changes.......................... 104
9.2 Limitation on Sale of Assets............................... 105
9.3 Limitations on Dispositions of Collateral.................. 107
9.4 Creation of Subsidiaries................................... 107
9.5 Maintenance of Bank Accounts............................... 109
9.6 Limitation on Certain Modifications and
Certain Contractual Obligations............................ 109
SECTION 10. EVENTS OF DEFAULT.......................................... 110
SECTION 11. THE AGENT.................................................. 116
11.1 Appointment................................................ 116
11.2 Delegation of Duties....................................... 117
11.3 Exculpatory Provisions..................................... 117
11.4 Reliance by Agent.......................................... 118
11.5 Notice of Default.......................................... 119
11.6 Non-Reliance on Agent and Other Lenders.................... 119
11.7 Indemnification............................................ 120
11.8 Agent in Its Individual Capacity........................... 121
11.9 Successor Agent............................................ 121
11.10 Swing Line Lender.......................................... 122
11.11 Co-Agents.................................................. 122
SECTION 12. MISCELLANEOUS.............................................. 122
12.1 Amendments and Waivers..................................... 122
12.2 Notices.................................................... 125
12.3 No Waiver; Cumulative Remedies............................. 127
12.4 Survival of Representations and
Warranties................................................. 127
iii
Page
----
12.5 Payment of Expenses and Taxes.............................. 128
12.6 Successors and Assigns; Participations and
Assignments................................................ 130
12.7 Adjustments; Set-off....................................... 135
12.8 Counterparts............................................... 136
12.9 Severability............................................... 136
12.10 Integration................................................ 137
12.11 GOVERNING LAW.............................................. 137
12.12 Submission To Jurisdiction; Waivers........................ 137
12.13 Acknowledgements........................................... 138
12.14 WAIVERS OF JURY TRIAL...................................... 139
12.15 Confidentiality............................................ 139
12.16 Amendment to Security Documents............................ 140
12.17 Amendment and Restatement.................................. 140
iv
SCHEDULES
1 Commitments; Lending Offices and Addresses
6.3 Consents Required
6.6 Filing Jurisdictions
8.7 Depositary Banks
9 Security Agreements
EXHIBITS
A-1 Form of Revolving Credit Note
A-2 Form of Swing Line Note
B Form of Banker's Acceptance
C Form of Power of Attorney
D Form of Landlord's Waiver
E Form of Monthly Borrowing Base Certificate
F Form of Assignment and Acceptance
v
AMENDED AND RESTATED CREDIT AGREEMENT, dated as of March 14, 1997,
among WESCO DISTRIBUTION-CANADA, INC., a corporation organized and existing
under the laws of the Province of Ontario (the "Borrower"), the several banks
--------
and other financial institutions from time to time parties to this Agreement
(the "Lenders"), THE BANK OF NOVA SCOTIA, a Canadian chartered bank ("Bank of
------- -------
Nova Scotia"), as administrative agent for the Lenders hereunder (in such
-----------
capacity, the "Administrative Agent") and BARCLAYS BANK PLC, a banking
--------------------
corporation organized under the laws of the United Kingdom ("Barclays"), as
--------
collateral agent (in such capacity, the "Collateral Agent").
----------------
W I T N E S S E T H :
- - - - - - - - - -
WHEREAS, the Borrower is a wholly owned Subsidiary of WESCO
Distribution, Inc., a Delaware corporation (the "U.S. Borrower"; the U.S.
-------------
Borrower and the Borrower, collectively, the "Borrowers");
---------
WHEREAS the Borrowers are companies organized by Xxxxxxx, Dubilier &
Rice, Inc. ("CD&R");
----
WHEREAS, the U.S. Borrower is a wholly owned Subsidiary of CDW Holding
Corporation, a Delaware corporation ("Holdings");
--------
WHEREAS, the Borrower is a party to the Credit Agreement, dated as of
February 24, 1995 (as amended by the First Amendment, dated as of March 29,
1996, and the Second Amendment, dated as of August 5, 1996, the "Existing Credit
---------------
Agreement"), with the banks and other financial institutions party thereto and
---------
Bank of Nova Scotia, as administrative agent, and Fleet Capital Corporation (as
successor to Shawmut Capital Corporation), as collateral agent, and the U.S.
Borrower is a party to the U.S. Credit Agreement (as such term is defined in the
Existing Credit Agreement, the "Existing U.S. Credit Agreement");
------------------------------
WHEREAS, concurrently with the execution and delivery of this
Agreement, the Existing U.S. Credit Agreement is being amended and restated (as
amended, supplemented or otherwise modified from time to time, the "U.S. Credit
-----------
Agreement"), among the U.S. Borrower and the financial institutions from time to
---------
time parties thereto (the "U.S. Lenders"), Barclays Bank PLC ("Barclays"), as
------------ --------
administrative agent for the U.S. Lenders (in such capacity, the "U.S.
----
Administrative Agent") and Barclays, as collateral agent (in such capacity, the
--------------------
"U.S. Collateral Agent");
---------------------
WHEREAS, the Company has requested that the Existing Credit Agreement
be amended and restated to extend the period during which loans may be made
thereunder and to modify the adjustments to the interest rate margin to be
charged on the loans made thereunder;
NOW, THEREFORE, in consideration of the premises and the mutual
agreements contained herein, the parties hereto agree that, effective on the
Effective Date (as hereinafter defined), the Existing Credit Agreement shall be
amended and restated to read in its entirety as follows:
SECTION 1. DEFINITIONS
1.1 Defined Terms. As used in this Agreement, the following terms
-------------
shall have the following meanings:
"Acceptances": a Draft drawn by the Borrower and accepted by a Lender
-----------
which is (i) denominated in Canadian Dollars, (ii) in an undiscounted face
amount equal to C$500,000 or a whole multiple of C$100,000 in excess
thereof, (iii) for a term of not less than 30 days nor more than 180 days
and matures prior to the Termination Date and (iv) issuable and payable
only in Canada; provided that, to the extent the context shall require,
--------
each Acceptance Note shall be deemed to be an Acceptance.
2
"Acceptance Note": as defined in subsection 3.8(b).
---------------
"Acceptance Purchase Price": in respect of an Acceptance of a
-------------------------
specified maturity, the result (rounded to the nearest whole cent, and with
one-half cent being rounded up) obtained by dividing the face amount of
such Acceptance by the sum of (i) one and (ii) the product of (A) the
Reference Discount Rate for Acceptances of the same maturity expressed as a
decimal and (B) a fraction, the numerator of which is the term to maturity
of such Acceptance and the denominator of which is equal to 365.
"Acceptance Reimbursement Obligation": the obligation of the Borrower
-----------------------------------
to each Lender pursuant to subsection 3.5.
"Account Collateral": as defined in subsection 8.7(d).
------------------
"Accounts": as defined in the Personal Property Security Act; and,
--------
with respect to the Borrower or any of its Subsidiaries, all such accounts
of the Borrower or any such Subsidiary, whether now existing or existing in
the future, including, without limitation (i) all accounts receivable of
the Borrower or any such Subsidiary (whether or not specifically listed on
schedules furnished to the Collateral Agent) including, without limitation,
all accounts created by or arising from all of the Borrower's or any such
Subsidiary's sales of goods or rendition of services made under any of its
trade names, or through any of its divisions, (ii) all rights to any goods
represented by any of the foregoing, including returned or repossessed
goods, (iii) all reserves and credit balances held by the Borrower or any
such Subsidiary with respect to any such accounts receivable or Obligors,
(iv) all letters of credit, guarantees or collateral for any of the
3
foregoing and (v) all insurance policies or rights relating to any of the
foregoing.
"Acquisition": the collective reference to (i) the acquisition by
-----------
Holdings of substantially all of the U.S.-based assets of WESCO, the
transfer of such assets (other than certain real property) on its behalf by
Westinghouse U.S. to the U.S. Borrower and the transfer of such real
property by Westinghouse U.S. on its behalf to RealCo, in each case
pursuant to the U.S. Acquisition Agreement and certain of the Collateral
Documents (as defined in the U.S. Acquisition Agreement) and (ii) the
acquisition by the Borrower of substantially all of the Canadian-based
assets of WESCO pursuant to the Acquisition Agreement and certain of the
Collateral Documents (as defined in the U.S. Acquisition Agreement).
"Acquisition Agreement": the Asset Acquisition Agreement, dated as of
---------------------
February 28, 1994, between the Canadian Borrower and Westinghouse Canada,
as amended, supplemented or otherwise modified from time to time in
accordance with subsection 8.8 of the U.S. Credit Agreement.
"Acquisition Agreements": the collective reference to the Acquisition
----------------------
Agreement and the U.S. Acquisition Agreement.
"Acquisition Documents": as defined in the U.S. Credit Agreement.
---------------------
"Additional Subsidiary": as defined in the U.S. Credit Agreement.
---------------------
"Adjustment Date": the first Business Day following receipt by the
---------------
Administrative Agent of (a) the financial statements required to be
delivered pursuant to subsection 8.1(a) and (c), as the case may be, for
the then most recently completed fiscal period
4
or (b) unaudited financial statements which (i) comply with all
requirements of subsection 8.1(a) (other than the requirement that such
financial statements be reported on by a certified public accountant) and
(ii) are certified by a Responsible Officer of the U.S. Borrower as being
fairly stated in all material respects.
"Administrative Agent": as defined in the preamble hereto.
--------------------
"Administrative Agents": the collective reference to the
---------------------
Administrative Agent and the U.S. Administrative Agent.
"Affiliate": as to any Person, any other Person (other than a
---------
Subsidiary) which, directly or indirectly, is in control of, is controlled
by, or is under common control with, such Person. For purposes of this
definition, "control" of a Person means the power, directly or indirectly,
either to (a) vote 20% or more of the securities having ordinary voting
power for the election of directors of such Person or (b) direct or cause
the direction of the management and policies of such Person, whether by
contract or otherwise.
"Aggregate Asset Sale Shortfall Amount": as of any date of
-------------------------------------
determination, with respect to all Mixed Asset Sales (or series of related
Mixed Asset Sales) consummated on or prior to such date, the difference
between (i) the sum of all Asset Sale Shortfall Amounts in respect of such
Mixed Asset Sales (or series of related Mixed Asset Sales) which are
determined to be a positive number in accordance with the definition of
Asset Sale Shortfall Amount, minus (ii) the sum of the absolute value of
-----
all Asset Sale Shortfall Amounts in respect of such Mixed Asset Sales (or
series of related Mixed Asset Sales) which are determined to be a
5
negative number in accordance with the definition of Asset Sale Shortfall
Amount.
"Aggregate Majority Lenders": as defined in the U.S. Credit
--------------------------
Agreement.
"Aggregate Outstandings": as to any Lender at any time, an amount
----------------------
equal to the sum of (a) the aggregate principal amount of all Revolving
Credit Loans made by such Lender then outstanding, (b) the aggregate
undiscounted face amount of all Acceptances then outstanding, (c) such
Lender's Commitment Percentage of the L/C Obligations then outstanding and
(d) such Lender's Commitment Percentage of the Swing Line Loans then
outstanding.
"Aggregate Supermajority Lenders": as defined in the U.S. Credit
-------------------------------
Agreement.
"Aggregate U.S. Outstandings": the meaning ascribed to the term
---------------------------
"Aggregate Outstandings" in the U.S. Credit Agreement.
"Agreement": this Credit Agreement, as amended, supplemented or
---------
otherwise modified from time to time.
"Application": an application, in such form as the Issuing Lender may
-----------
specify from time to time, requesting the Issuing Lender to open a Letter
of Credit.
"Asset Sale": any sale, issuance, conveyance, transfer, lease or
----------
other disposition (any of the foregoing, a "Disposition") by the Borrower
-----------
or any Subsidiary of the Borrower, in one or a series of related
transactions, of any real or personal, tangible or intangible property
(including, without limitation, Capital Stock) of the Borrower or any such
Subsidiary to any Person other than the Borrower or any Subsidiary of the
Borrower.
6
"Asset Sale Shortfall Amount": with respect to any Mixed Asset Sale
---------------------------
or series of related Mixed Asset Sales, the U.S. Dollar equivalent
(determined on the basis of the Current Exchange Rate in effect on the
Business Day immediately preceding the date such Mixed Asset Sale or series
of related Mixed Asset Sales is consummated) of the difference between (i)
the book value of all Inventory of the Borrower or any of its Subsidiaries
and all other Collateral sold or to be sold in connection with such Mixed
Asset Sale or series of related Mixed Asset Sales (or, at the option of the
Borrower in lieu of such book value, the purchase price allocated to such
Inventory and other Collateral by the Borrower or one of its Subsidiaries
and the purchaser thereof in good faith and set forth in the related
purchase agreement) minus (ii) the Net Cash Proceeds of such Mixed Asset
-----
Sale or series of related Mixed Asset Sales; the Asset Sale Shortfall
Amount with respect to any Mixed Asset Sale or series of related Mixed
Asset Sales may be either a positive or a negative number.
"Assignee": as defined in subsection 12.6(c).
--------
"Available Commitment": as to any Lender at any time, an amount equal
--------------------
to the excess, if any, of (a) the amount of such Lender's Commitment at
such time over (b) the sum of (i) the aggregate unpaid principal amount at
----
such time of all Revolving Credit Loans made by such Lender, (ii) the
aggregate undiscounted face amount of all the then outstanding Acceptances
of such Lender, (iii) an amount equal to such Lender's Commitment
Percentage of the aggregate unpaid principal amount at such time of all
Swing Line Loans, provided that for purposes of calculating Available
--------
Commitments pursuant to subsection 5.3(a) such amount shall be deemed to be
zero and (iv) an amount equal to such Lender's Commitment Percentage of the
outstanding L/C Obligations at such time; collectively, as to all the
Lenders, the "Available Commitments".
---------------------
7
"Available U.S. Commitment": the meaning ascribed to the term
-------------------------
"Available Commitment" in the U.S. Credit Agreement.
"Bank Act (Canada)": the Bank Act (Canada), as amended from time to
------------------
time.
"Bank Act Security": security granted by the Borrower pursuant to
-----------------
Section 427 of the Bank Act (Canada).
"Bank of Canada Rate": the Bank of Canada's rate for 30-day funds as
-------------------
established on Tuesday of each week, plus .25%.
"Bankruptcy and Insolvency Act (Canada)": the Bankruptcy and
---------------------------------------
Insolvency Act (Canada), as amended from time to time.
"Borrower": as defined in the preamble hereto.
--------
"Borrowers": as defined in the recitals hereto.
---------
"Borrowing Base": an amount, calculated on a monthly basis based upon
--------------
the most recent Monthly Borrowing Base Certificate delivered pursuant to
subsection 8.2(c), equal to the sum (without duplication) of (a) 85% of
Eligible Accounts plus (b) the lesser of (1) the Canadian Inventory
----
Sublimit Amount and (2) 60% of Eligible Inventory; provided, however, that
-------- -------
the Borrowing Base shall be deemed to be infinite in amount at all times
during any Borrowing Base Elimination Period. All determinations in
connection with the Borrowing Base shall be made by the Borrower and
certified to the Collateral Agent by a Responsible Officer of the Borrower;
provided, however, that the Collateral Agent shall have the final right to
-------- -------
review and adjust any such determination to the extent the Collateral Agent
determines, in its
8
reasonable judgment after consultation with the Borrower and the
Administrative Agent, that such determination is not in accordance with
this Agreement. The Borrower shall from time to time provide such
assistance to the Collateral Agent as the Collateral Agent reasonably may
request for the purpose of determining compliance by the Borrower with the
Borrowing Base.
"Borrowing Base Default": any Default or Event of Default which
----------------------
occurs solely because the Aggregate Outstandings of all Lenders exceed the
Borrowing Base then in effect.
"Borrowing Base Elimination Period": any period commencing on an
---------------------------------
Adjustment Date and ending on the Business Day immediately preceding the
next succeeding Adjustment Date, provided that (a) the Fixed Charge
--------
Coverage Ratio for the four consecutive fiscal quarters of the U.S.
Borrower reflected in the financial statements delivered by the Borrower
hereunder for the period ending immediately prior to the first such
Adjustment Date is greater than or equal to 4.00:1 and (b) no Borrowing
Base Elimination Period may exist so long as an Event of Default shall have
occurred and be continuing.
"Borrowing Date": any Business Day specified in a notice pursuant to
--------------
subsection 2.3 or 2.5 as a date with respect to which the Borrower has
requested the Lenders to make Loans hereunder or, with respect to a Request
for Acceptances, the date with respect to which the Borrower has requested
the Lenders to accept Drafts.
"Business Day": a day other than a Saturday, Sunday or other day on
------------
which commercial banks in Toronto, Ontario are authorized or required by
law to close.
9
"Canada-U.S. Transfer": as defined in subsection 2.4(b).
--------------------
"Canadian Cash Collateral Agreement": the Cash Collateral and
----------------------------------
Security Agreement, dated as of February 28, 1994, between the Borrower and
Westinghouse Canada, as the same may be amended, supplemented or otherwise
modified from time to time in accordance with subsection 9.6 hereof and
subsection 8.8 of the U.S. Credit Agreement.
"Canadian Dollar Increase Amount": as defined in subsection 2.4(b).
-------------------------------
"Canadian Dollar Reduction Amount": as defined in subsection 2.4(b).
--------------------------------
"Canadian Dollars" and "C$": dollars in the lawful currency of
---------------- --
Canada.
"Canadian First Mortgage Notes": the First Mortgage Note, dated as of
-----------------------------
February 28, 1994, originally issued by the Borrower to Westinghouse
Canada, and all notes issued in exchange therefor and in exchange for such
exchanged notes, in each case, as the same may be amended, supplemented or
otherwise modified from time to time in accordance with subsection 9.6
hereof and subsection 8.8 of the U.S. Credit Agreement.
"Canadian First Mortgage Note Documents": the collective reference to
--------------------------------------
the Canadian First Mortgage Notes, the Canadian Mortgages, the Holdings
Canadian First Mortgage Note Guarantees, the U.S. Borrower Canadian First
Mortgage Note Guarantees, the RealCo Canadian First Mortgage Note
Guarantees and the Canadian Cash Collateral Agreement.
10
"Canadian Inventory Sublimit Amount": at any date of determination,
----------------------------------
an amount equal to 45% of the Commitments of all Lenders then in effect.
"Canadian Mortgaged Property": each parcel of real property owned by
---------------------------
the Borrower and encumbered by a Canadian Mortgage.
"Canadian Mortgages": the collective reference to (i) each of the fee
------------------
mortgages, each dated as of February 28, 1994, each made by the Borrower in
favor of Westinghouse Canada and (ii) any other mortgage made from time to
time by the Borrower in favor of Westinghouse Canada pursuant to the
Canadian First Mortgage Notes, each of such mortgages encumbering one of
the Canadian Mortgaged Properties with a first mortgage lien securing the
Canadian First Mortgage Notes, as the same may be amended, supplemented or
otherwise modified from time to time in accordance with subsection 9.6
hereof and subsection 8.8 of the U.S. Credit Agreement.
"Canadian Pension Plan": any plan, program, arrangement or
---------------------
understanding that is a pension plan for the purposes of any applicable
pension benefits or tax laws of Canada or a province or territory thereof
(whether or not required to be registered under any such laws) which is
maintained, administered or contributed to by (or to which there is or may
be an obligation to contribute by) the Borrower or any of its Subsidiaries
in respect of any person's employment in Canada or a province or territory
thereof, all related funding agreements and all related agreements,
arrangements and understandings in respect of, or related to, any benefits
to be provided thereunder.
"Canadian Prepayment Percentage": as of any date of determination, the
------------------------------
percentage of the sum of the aggregate Commitments and the aggregate U.S.
11
Commitments which is constituted by the aggregate Commitments.
"Canadian Subsidiary Collateral Covenant Agreement": each agreement
-------------------------------------------------
executed and delivered by a Subsidiary of the Borrower pursuant to
subsection 9.4, each such agreement to be of substantially the same import,
tenor and substance as the Collateral Covenant Agreement, with such changes
thereto (as agreed between the Borrower and the Administrative Agent) as
may be required or advisable under the laws of the jurisdiction of
incorporation of such Subsidiary (and the laws of any other jurisdiction as
may apply to such Canadian Subsidiary Collateral Covenant Agreement
(including any jurisdiction where such Subsidiary owns material assets)) in
connection with all security granted by such Subsidiary pursuant to
subsection 9.4.
"Canadian Subsidiary Debenture Pledge Agreement": each agreement
----------------------------------------------
executed and delivered by a Subsidiary of the Borrower pursuant to
subsection 9.4, each such agreement to be of substantially the same import,
tenor and substance as the Debenture Pledge Agreement, with such changes
thereto (as agreed between the Borrower and the Administrative Agent) as
may be required or advisable under the laws of the jurisdiction of
incorporation of such Subsidiary (and the laws of any other jurisdiction as
may apply to such Canadian Subsidiary Debenture Pledge Agreement (including
any jurisdiction where such Subsidiary owns material assets)) in connection
with the Canadian Subsidiary Demand Debenture.
"Canadian Subsidiary Demand Debenture": each deed or instrument
------------------------------------
executed and delivered by a Subsidiary of the Borrower pursuant to
subsection 9.4, each such agreement to be of substantially the same import,
tenor and substance as the Security Agreement, with such changes thereto
(as agreed between the Borrower and the Administrative Agent) as may be
required or advisable
12
to create, under the laws of the jurisdiction of incorporation of such
Subsidiary (and the laws of any other jurisdiction as may apply to such
Canadian Subsidiary Demand Debenture (including any jurisdiction where such
Subsidiary owns material assets)), in favor of the Administrative Agent and
the Lenders, a valid, binding and enforceable mortgage, charge, assignment
and security interest in and to all of the assets of such Subsidiary, other
than real estate, motor vehicles and other assets of the type excluded from
Collateral pursuant to the Security Agreement.
"Canadian Subsidiary Guarantee": each Guarantee to be executed and
-----------------------------
delivered by each Subsidiary of the Borrower in favor of the Administrative
Agent, each agreement executed and delivered by a Subsidiary of the
Borrower pursuant to subsection 9.4, each such agreement to be of
substantially the same import, tenor and substance as the Canadian
Subsidiary Guarantee as attached to the Existing Credit Agreement as
Exhibit J, with such changes thereto (as agreed between the Borrower and
the Administrative Agent) as may be required or advisable under the laws of
the jurisdiction of incorporation of such Subsidiary (and the laws of any
other jurisdiction as may apply to such Canadian Subsidiary Guarantee
(including any jurisdiction where such Subsidiary owns material assets) in
connection with the Canadian Subsidiary Guarantee.
"Canadian Subsidiary Stock Pledge Agreement": each Stock Pledge
------------------------------------------
Agreement to be executed and delivered by the Borrower and/or any
Subsidiary of the Borrower that owns any Capital Stock of any Subsidiary of
the Borrower in favor of the Administrative Agent, each such agreement to
be of substantially the same import, tenor and substance as the form of
U.S. Borrower Canadian Stock Pledge Agreement, with such changes (as agreed
between the Borrower and the Administrative Agent) as may be required or
advisable
13
under the laws of Ontario (in the case of the Borrower) and under the laws
of its jurisdiction of incorporation (in the case of a Subsidiary of the
Borrower) (and the laws of any other jurisdiction as may apply to such
Canadian Subsidiary Stock Pledge Agreement).
"Canadian Transfer Commitment Percentage": as to any Common Lender at
---------------------------------------
any time, the percentage of the aggregate Commitments of all Lenders then
constituted by the Commitment of such Common Lender (in its capacity as a
Lender hereunder) or the Lender which is a subsidiary or an affiliate of
such Common Lender.
"Capital Call Agreement": as defined in the U.S. Credit Agreement.
----------------------
"Capital Expenditures": with respect to any Person for any period,
--------------------
the sum of the aggregate of all expenditures (whether paid in cash,
capitalized as an asset or accrued as a liability) by such Person and its
consolidated Subsidiaries during such period which, in accordance with
GAAP, are or should be included in "capital expenditures" or similar items
reflected in the consolidated statement of cash flows of such Person for
such period.
"Capital Stock": any and all shares, interests, participations or
-------------
other equivalents (however designated) of capital stock of a corporation,
any and all equivalent ownership interests in a Person (other than a
corporation) and any and all warrants or options to purchase any of the
foregoing.
"C&D Fund IV": The Xxxxxxx & Dubilier Private Equity Fund IV Limited
-----------
Partnership, a Connecticut limited partnership.
"CD&R": as defined in the recitals hereto.
----
14
"Closing Date": the date on which all the conditions precedent set
------------
forth in subsection 7.1 of the Existing Credit Agreement were satisfied or
waived.
"Closing Date Exchange Rate": $1.00 equals C$1.39310.
--------------------------
"Co-Agents": each Lender designated as such on the signature pages
---------
hereof.
"Collateral": all assets of the Loan Parties, now owned or
----------
hereinafter acquired, upon which a Lien is purported to be created by any
Security Document (other than a U.S. Security Document).
"Collateral Agent": as defined in the preamble hereto.
----------------
"Collateral Covenant Agreement": the Collateral Covenant Agreement
-----------------------------
executed and delivered by the Borrower in favor of the Administrative
Agent, substantially in the form of Exhibit M to the Existing Credit
Agreement, as the same may be amended, supplemented or otherwise modified
from time to time.
"Commercial Letter of Credit": as defined in subsection 4.1.
---------------------------
"Commitment": as to any Lender, its obligation to make Revolving
----------
Credit Loans to, and/or participate in Swing Line Loans made to, and/or
create Acceptances (or, in lieu thereof, to make loans pursuant to the
Acceptance Notes), and/or participate in Letters of Credit issued on behalf
of, the Borrower in an aggregate amount not to exceed at any one time
outstanding the amount set forth opposite such Lender's name in Schedule 1
under the heading "Commitment", as such amount may be reduced or increased
from time to time as provided in subsection 2.4 and the other
15
applicable provisions hereof; collectively, as to all the Lenders, the
"Commitments".
-----------
"Commitment Fee Rate": 0.50% per annum, less the Margin Reduction
------------------- ----
Percentage in effect from time to time.
"Commitment Percentage": as to any Lender at any time, the percentage
---------------------
of the aggregate Commitments then constituted by its Commitment (or, if the
Commitments have terminated or expired, the percentage which (i) the sum of
(a) such Lender's then outstanding Revolving Credit Loans plus (b) such
Lender's participations in the aggregate L/C Obligations and Swing Line
Loans then outstanding plus (c) such Lender's Acceptances then outstanding
constitutes of (ii) the sum of (a) the aggregate Revolving Credit Loans of
all the Lenders then outstanding plus (b) the aggregate L/C Obligations
then outstanding plus (c) the aggregate Swing Line Loans then outstanding
plus (d) the aggregate Acceptances then outstanding).
"Commitment Period": the period from and including the Closing Date
-----------------
to but not including the Termination Date, or such earlier date as the
Commitments shall terminate as provided herein.
"Common Lender": each U.S. Lender which is also a Lender or the
-------------
parent or a subsidiary or affiliate thereof.
"Consolidated Adjusted EBITDA": of any Person, for any period, the
----------------------------
difference between (i) Consolidated EBITDA of such Person for such period,
minus (ii) Capital Expenditures (excluding any expenses incurred in
connection with normal replacement and maintenance programs properly
charged to current operations and excluding the amount of any Net Cash
Proceeds of Dispositions of assets pursuant to subsection 9.2(g) which are
reinvested in the business of the Borrower or
16
a Subsidiary of the Borrower and the amount of any U.S. Net Cash Proceeds
of U.S. Dispositions of assets pursuant to subsection 8.6(g) of the U.S.
Credit Agreement which are reinvested in the business of the U.S. Borrower
or an Additional Subsidiary) paid in cash during such period.
"Consolidated EBITDA": of any Person, for any period, the
-------------------
Consolidated Net Income of such Person for such period, adjusted to exclude
the following items of income or expense to the extent that such items are
included in the calculation of Consolidated Net Income: (a) Consolidated
Interest Expense, (b) any non-cash interest expense and any other non-cash
expenses and charges, (c) total income tax expense, (d) depreciation
expense, (e) the expense associated with amortization of intangible and
other assets, (f) non-cash provisions for reserves for discontinued
operations, (g) any extraordinary, unusual or non-recurring gains or losses
or charges or credits and (h) any gain or loss associated with the sale or
write-up or write-down of assets.
"Consolidated Interest Expense": of any Person, for any period, cash
-----------------------------
interest expense of such Person for such period on its Indebtedness
determined on a consolidated basis in accordance with GAAP.
"Consolidated Net Income": of any Person, for any period, net income
-----------------------
of such Person for such period, determined on a consolidated basis in
accordance with GAAP, provided that, for purposes of determining
--------
Consolidated Net Income of the U.S. Borrower and its consolidated
Subsidiaries for any period, all Dividends for such period shall be
deducted therefrom as an expense.
"Contractual Obligation": as to any Person, any provision of any
----------------------
security issued by such Person or of any agreement, instrument or other
undertaking to which
17
such Person is a party or by which it or any of its property is bound.
"Credit Documents": the collective reference to the Loan Documents
----------------
and the U.S. Loan Documents.
"Credit Parties": the collective reference to the Loan Parties and
--------------
U.S. Loan Parties.
"Current Exchange Rate": as at any date of determination, the average
---------------------
of the bid/ask spot rates specified on the WRLD screen of Reuters
Information Services Inc. at 10:00 A.M., New York City time, on such date,
with respect to the purchase and sale of Canadian Dollars for U.S. Dollars.
"Debenture Pledge Agreement": the Debenture Pledge Agreement executed
--------------------------
and delivered by the Borrower in favor of the Administrative Agent,
substantially in the form of Exhibit D-2 to the Existing Credit Agreement,
as the same may be amended, supplemented or otherwise modified from time to
time.
"Default": any of the events specified in Section 10 prior to the
-------
satisfaction of any requirement for the giving of notice, the lapse of
time, or both, or any other condition.
"Defaulted Receivable": any Account of the Borrower or any of its
--------------------
Subsidiaries which:
(i) has been or should have been charged-off as not
creditworthy in conformity with the accounting policies of the
Borrower as in effect on the Closing Date; or
(ii) is owed by an account debtor described in clause (l) of
the definition of Eligible Accounts.
18
"Depositary Account": as defined in subsection 8.7(b).
------------------
"Depositary Bank": as defined in subsection 8.7(a).
---------------
"Disposition": as defined in the definition of the term "Asset Sale".
-----------
"Dividends": for any period, all dividends and other distributions
---------
paid by the U.S. Borrower to Holdings in cash during such period other than
(i) the payment permitted by subsection 8.7(g) of the U.S. Credit Agreement
and (ii) dividends and other distributions permitted by subsection 8.7(d)
of the U.S. Credit Agreement (but only to the extent such dividends or
distributions are made in respect of repurchases by Holdings of its common
stock or options, warrants or other rights to purchase its common stock
from Permitted Equity Purchasers referred to in clauses (i) and (ii) of the
definition thereof contained in the U.S. Credit Agreement) which are paid
by the U.S. Borrower to or on behalf of Holdings and used by Holdings for
the purposes described in the immediately preceding parenthetical.
"Draft": a draft substantially in the form of Exhibit B or in such
-----
other form as the Administrative Agent may from time to time reasonably
request (or to the extent the context shall require, an Acceptance Note,
delivered in lieu of a draft), as the same may be amended, supplemented or
otherwise modified from time to time.
"Effective Date": as defined in subsection 6.1.
--------------
"Eligible Accounts": at any time, an amount equal to the aggregate
-----------------
outstanding balance of all Accounts of the Borrower and its Subsidiaries
payable in Canadian Dollars as of such time, provided that, unless
--------
19
otherwise approved in writing by the Collateral Agent, no Account shall be
deemed to be an Eligible Account if:
(a) either (i) the Account is unpaid more than 60 days after the
original statement due date (including, without limitation, the
aggregate credit balance determined on an Account by Account basis
more than 60 days old) or (ii) the Account is unpaid more than 120
days after the date on which an invoice therefor has been sent to the
Obligor in respect of such Account;
(b) the Obligor has been obligated in respect of a Defaulted
Receivable at any time during the immediately preceding 12-month
period, unless the payment of Accounts from such Obligor is secured in
a manner satisfactory to the Collateral Agent or, if the Account from
such Obligor arises subsequent to a decree or order for relief with
respect to such Obligor under any bankruptcy or insolvency laws (or
other similar laws), as now or hereafter in effect, the Collateral
Agent shall have determined that the timely payment and collection of
such Account will not be impaired;
(c) it is payable by an Obligor (or any known Subsidiary or
Affiliate thereof) and 50% or more, in face amount, of all Accounts
payable by such Obligor (and its known Affiliates) are ineligible
pursuant to (a) above;
(d) it is payable by an Obligor (or any known Subsidiary or
Affiliate thereof) and all Accounts payable by such Obligor (and its
known Subsidiaries and Affiliates) exceed 10% of all Eligible
Accounts; provided that Accounts of such an Obligor (and its known
Subsidiaries and Affiliates) shall only be deemed ineligible
20
pursuant to this clause (d) to the extent of such excess;
(e) it arises out of a sale or an administrative charge made by
the Borrower or any of its Subsidiaries to the U.S. Borrower or any
Affiliate (other than Westinghouse or any division, Subsidiary or
Affiliate of Westinghouse) or Subsidiary of the Borrower or the U.S.
Borrower;
(f) the sale is to an Obligor located outside of Canada;
(g) the Account is the result of a charge-back or a reinvoice of
a disputed Account, the disposition of which has not been resolved, or
the Account is a Defaulted Receivable;
(h) the Account has been or should have been charged off as not
creditworthy in conformity with the accounting policies of the
Borrower as in effect on the Closing Date;
(i) it is an Account which may be set-off or charged against any
security deposit, progress payment or other similar advance or deposit
made by or for the benefit of the applicable Obligor; provided that
--------
any Account deemed ineligible pursuant to this clause (i) shall only
be ineligible to the extent of such set-off or charge against such
security deposit, progress payment or other similar advance or
deposit;
(j) the sale to the Obligor giving rise to the Account is on a
xxxx-and-hold, guarantied sale, sale-and-return, sale on approval or
consignment basis or made pursuant to any other written agreement
providing for repurchase or return, provided, however, that no Account
-------- -------
shall
21
be excluded pursuant to this clause (j) solely as a result of the
customary quality warranties or the general right to return goods
provided by the Borrower or any of its Subsidiaries to its customers;
provided, further, that, with respect to Accounts arising from sales
-------- -------
to an Obligor on a xxxx-and-hold basis, if such Obligor has requested
that the goods subject to such sales be held by the Borrower or one of
its Subsidiaries and has nonetheless agreed to make payment on such
Accounts, such Accounts shall not be considered ineligible pursuant to
this clause (j); provided, further, that in no event shall the U.S.
-------- -------
Dollar equivalent (determined from time to time on the basis of then
Current Exchange Rates) of the aggregate amount of all Accounts
included as Eligible Accounts pursuant to the immediately preceding
proviso exceed the product of (i) the Canadian Prepayment Percentage
in effect from time to time, multiplied by (ii) $2,500,000;
----------
(k) (i) the Obligor has disputed its liability on, or the Obligor
has made any claim or defense with respect to, such Account or any
other account due from such Obligor to the Borrower, the U.S. Borrower
or any of their respective Subsidiaries, which has not been resolved
or (ii) the Account otherwise is, or is reasonably expected to become,
subject to any right of set-off by the Obligor; provided that any
--------
Account deemed ineligible pursuant to this clause (k) shall only be
ineligible to the extent of the amount owed by the Borrower, the U.S.
Borrower or any of their respective Subsidiaries to the Obligor, the
amount of such dispute, claim or defense, or the maximum amount at any
time of such right of set-off, as applicable; provided, further, that
-------- -------
routine adjustments to an Account common in the industry in which the
Borrower, the U.S. Borrower or any of their respective
22
Subsidiaries conduct business and common to such businesses, such as
for volume or quantity differences or returned goods, will be deemed
not to constitute a dispute, claim, defense or setoff;
(l) a proceeding under any bankruptcy or insolvency laws (or any
similar laws) has occurred and is continuing with respect to the
Obligor, unless the payment of Accounts from such Obligor is secured
in a manner satisfactory to the Collateral Agent or, if the Account
from such Obligor arises subsequent to a decree or order for relief
with respect to such Obligor under any bankruptcy or insolvency laws
(or any similar laws), as now or hereafter in effect, the Collateral
Agent shall have determined that the timely payment and collection of
such Account will not be impaired;
(m) Accounts in respect of which the Obligor is Canada or any
province, department, agency or instrumentality thereof; provided that
--------
Accounts otherwise ineligible pursuant to this clause (m) shall only
be ineligible to the extent that the aggregate amount of all such
Accounts is in excess of C$1,000,000; and provided further that
--------
amounts in excess of C$1,000,000 in respect of such Accounts shall
nonetheless be considered eligible to the extent that the Borrower or
any applicable Subsidiary duly assigns its rights to payment of such
Accounts to the Administrative Agent pursuant to the Financial
Administration Act (Canada) or similar or equivalent provincial
legislation;
(n) (i) except to the extent set forth in the second and third
provisos to clause (j) above, the goods giving rise to such Account
have not been delivered, and are not in transit, to the Obligor, (ii)
the services giving rise to such Account have not been performed or
(iii) the
23
Account otherwise does not represent a final sale or transfer of title
to the Obligor;
(o) the Account (or the sale giving rise thereto) does not comply
in all material respects with all applicable legal requirements,
including, where applicable, any consumer protection legislation
applicable to credit transactions;
(p) the Account is subject to any material restrictions on the
transfer, assignability or sale thereof, enforceable against the
assignee, except as described in clause (m) above;
(q) the Administrative Agent does not have a valid and perfected
first priority security interest in such Account or the Account does
not otherwise conform in all material respects to the representations
and warranties contained in this Agreement or any of the Security
Agreements;
(r) any portion of an Account to the extent such portion is for
interest or finance charges accrued on past due balances of any
Accounts;
(s) to the extent the Account represents an amount of billed
receivables resulting from the shipping and invoicing of finished
product which will not be subsequently collected because payment has
already been received on account of progress payment billing (as such
progress xxxxxxxx may be reduced by adjustment thereto);
(t) to the extent an Account is to be reduced as a result of
pending price decreases relating to the agreement giving rise to such
Account, such reduction of such Account; provided that an Account
--------
otherwise ineligible pursuant to this clause (t) shall not be
considered ineligible to the extent that the pending price decrease
24
consists of a discount for early payment which is not then
determinable or a credit for volume purchases which is not then
determinable; or
(u) Accounts classified as "Legal Accounts" on the books of the
Borrower or one of its Subsidiaries in conformity with the accounting
policies of the Borrower as in effect of the Closing Date.
"Eligible Inventory": all Inventory of the Borrower and its
------------------
Subsidiaries that consists of finished goods or spare parts available for
sale to customers to the extent not excluded pursuant to clauses (a)
through (g) below. In determining the amount to be so included, the amount
of such Inventory shall be valued at the lower of average cost or market
value on a basis consistent with the Borrower's or the relevant
Subsidiary's accounting practice as in effect on the Closing Date less
----
reserves taken, if any, on account of physical inventory adjustments (in
respect of aged Inventory, excess Inventory or otherwise) as recorded in
the Borrower's or the relevant Subsidiary's accounting records and goods in
transit from third parties that are not excluded pursuant to clauses (a)
through (g) below. Unless otherwise approved in writing by the Collateral
Agent, no Inventory shall be deemed Eligible Inventory of the Borrower or
any of its Subsidiaries if:
(a) the Inventory is not owned solely by the Borrower or a
Subsidiary of the Borrower or the Borrower or any such Subsidiary does
not have good, valid and marketable title to such Inventory;
(b) the Inventory is (i) not located at property that is owned or
leased by the Borrower or any Subsidiary of the Borrower and (ii)
subject to a Lien other than Liens pursuant to the
25
Security Agreements, Liens arising by operation of law (appropriate
reserves for which have been reasonably established by the Borrower or
any such Subsidiary) and Liens for normal and customary warehousing
and transportation charges (appropriate reserves for which have been
reasonably established by the Borrower or any such Subsidiary);
(c) the Inventory is not subject to a perfected first priority
Lien in favor of the Administrative Agent except for Liens arising by
operation of law (appropriate reserves for which have been reasonably
established by the Borrower or any of its Subsidiaries) and, with
respect to Eligible Inventory located at sites described in clause (b)
above, for Liens for normal and customary warehousing and
transportation charges (appropriate reserves for which have been
reasonably established by the Borrower or any of its Subsidiaries);
(d) the Inventory is not located in Canada;
(e) the Inventory does not conform in all material respects to
the representations and warranties contained in this Agreement or any
of the Security Agreements;
(f) Specialized Inventory (other than New Inventory) of a
particular stock keeping unit to the extent that the number of such
stock keeping units held by the Borrower or any of its Subsidiaries on
any date of determination exceeds the number of such stock keeping
units sold by Westinghouse Canada, the Borrower or any of its
Subsidiaries during the 12 consecutive fiscal month period immediately
preceding such date of determination; provided that in no event shall
--------
the U.S. Dollar equivalent (determined from time to
26
time on the basis of then Current Exchange Rates) of the value of all
Specialized Inventory included as Eligible Inventory pursuant to this
clause (f) exceed at any time the product of (i) the Canadian
Prepayment Percentage in effect from time to time, multiplied by (ii)
----------
$5,000,000; or
(g) Inventory (other than Specialized Inventory and New
Inventory) of a particular stock keeping unit to the extent that the
number of stock keeping units held by the Borrower or any of its
Subsidiaries on any date of determination exceeds (i) for any
determination during the period from the Closing Date to May 31, 1995,
two times, and (ii) for any determination thereafter, one times, the
----- -----
number of such stock keeping units sold by Westinghouse Canada, the
Borrower or any of its Subsidiaries during the 12 consecutive fiscal
month period immediately preceding such date of determination;
provided that in no event shall the U.S. Dollar equivalent (determined
--------
from time to time on the basis of then Current Exchange Rates) of the
value of all Inventory included as Eligible Inventory pursuant to
subclause (i) of this clause (g) exceed in the aggregate at any time
the sum of (x) the product of (1) the Canadian Prepayment Percentage
in effect from time to time, multiplied by (2) $8,500,000 and (y) the
----------
U.S. Dollar equivalent (determined from time to time on the basis of
then Current Exchange Rates) of the value of such Inventory that would
have been included as Eligible Inventory pursuant to such subclause
(i) had the reference therein to the number "two" been a reference to
the number "one".
"Environmental Costs": any and all costs or expenses (including,
-------------------
without limitation, attorney's and consultant's fees, investigation and
laboratory fees, response costs, court costs and litigation expenses),
27
of whatever kind or nature, known or unknown, contingent or otherwise,
arising out of, or in any way relating to any violation of, noncompliance
with or liability under any Environmental Laws or any orders, requirements,
demands, or investigations of any person related to any Environmental Laws.
Environmental Costs include any and all of the foregoing, without regard to
whether they arise out of or are related to any past, pending or threatened
proceeding of any kind.
"Environmental Laws": any and all applicable foreign (including,
------------------
without limitation, laws of the United States), federal, territorial,
provincial, local or municipal laws, rules, orders, regulations, statutes,
by-laws, ordinances, codes, decrees, requirements (including, without
limitation, guidelines) of any Governmental Authority or other Requirements
of Law (including common law) regulating, relating to or imposing liability
or standards of conduct concerning protection of human health or the
environment, as now or may at any time hereafter be in effect.
"Event of Default": any of the events specified in Section 10,
----------------
provided that any requirement for the giving of notice, the lapse of time,
--------
or both, or any other condition, has been satisfied.
"Existing Credit Agreement": as defined in the recitals hereto.
-------------------------
"Existing U.S. Credit Agreement": as defined in the recitals hereto.
------------------------------
"Extension of Credit": as to any Lender, the making of a Loan by such
-------------------
Lender, the acceptance of a Draft or an Acceptance Note by such Lender or
the issuance of, or participation in, a Letter of Credit by such Lender.
28
"Financial Statement Delivery Default": any Default which occurs
------------------------------------
solely as a result of a failure by the Borrower to deliver the financial
statements required to be delivered under subsection 8.1(a), (b) or (c) (as
applicable).
"Financing Lease": any lease of property, real or personal, the
---------------
obligations of the lessee in respect of which are required in accordance
with GAAP to be capitalized on a balance sheet of the lessee.
"First Mortgage Notes": the collective reference to the Canadian
--------------------
First Mortgage Notes and the RealCo First Mortgage Notes.
"Fixed Charge Coverage Ratio": for any period, the ratio of
---------------------------
Consolidated Adjusted EBITDA of the U.S. Borrower and its consolidated
Subsidiaries for such period to Consolidated Interest Expense of the U.S.
Borrower and its consolidated Subsidiaries for such period.
"Foreign Subsidiary": any Subsidiary of the Borrower which is not
------------------
organized under the laws of the United States or any state thereof or the
District of Columbia.
"GAAP": generally accepted accounting principles in effect from time
----
to time in the United States of America or, as the context otherwise
requires, in Canada.
"General Assignment of Book Debts": the General Assignment of Book
--------------------------------
Debts executed and delivered by the Borrower, substantially in the form of
Exhibit P to the Existing Credit Agreement, as the same may be amended,
supplemented or otherwise modified from time to time.
"Governmental Authority": any nation or government, any state or
----------------------
province or other political
29
subdivision thereof and any entity exercising executive, legislative,
judicial, regulatory or administrative functions of or pertaining to
government.
"Guarantee Obligation": as to any Person (the "guaranteeing person"),
-------------------- -------------------
any obligation of (a) the guaranteeing person or (b) another Person
(including, without limitation, any bank under any letter of credit) to
induce the creation of which the guaranteeing person has issued a
reimbursement, counterindemnity or similar obligation, in either case
guaranteeing or in effect guaranteeing any Indebtedness, leases, dividends
or other obligations (the "primary obligations") of any other third Person
-------------------
(the "primary obligor") in any manner, whether directly or indirectly,
---------------
including, without limitation, any such obligation of the guaranteeing
person, whether or not contingent, (i) to purchase any such primary
obligation or any property constituting direct or indirect security
therefor, (ii) to advance or supply funds (1) for the purchase or payment
of any such primary obligation or (2) to maintain working capital or equity
capital of the primary obligor or otherwise to maintain the net worth or
solvency of the primary obligor, (iii) to purchase property, securities or
services primarily for the purpose of assuring the owner of any such
primary obligation of the ability of the primary obligor to make payment of
such primary obligation or (iv) otherwise to assure or hold harmless the
owner of any such primary obligation against loss in respect thereof;
provided, however, that the term Guarantee Obligation shall not include
-------- -------
endorsements of instruments for deposit or collection in the ordinary
course of business. The amount of any Guarantee Obligation of any
guaranteeing person shall be deemed to be the lower of (a) an amount equal
to the stated or determinable amount of the primary obligation in respect
of which such Guarantee Obligation is made and (b) the maximum amount for
which such guaranteeing
30
person may be liable pursuant to the terms of the instrument embodying such
Guarantee Obligation, unless such primary obligation and the maximum amount
for which such guaranteeing person may be liable are not stated or
determinable, in which case the amount of such Guarantee Obligation shall
be such guaranteeing person's maximum reasonably anticipated liability in
respect thereof as determined by the Borrower in good faith.
"Guarantees": the collective reference to the U.S. Borrower
----------
Guarantee, each U.S. Guarantee and each Canadian Subsidiary Guarantee.
"Guarantor": each Person party to a Guarantee.
---------
"Holdings": as defined in the recitals hereto.
--------
"Holdings Canadian First Mortgage Note Guarantees": the guarantees
------------------------------------------------
included on the Canadian First Mortgage Notes and made by Holdings in favor
of the holders of the Canadian First Mortgage Notes, as the same may be
amended, supplemented or otherwise modified from time to time in accordance
with subsection 9.6 hereof and subsection 8.8 of the U.S. Credit Agreement.
"Holdings Guarantee": as defined in the U.S. Credit Agreement.
------------------
"Indebtedness": of any Person at any date, (a) all indebtedness of
------------
such Person for borrowed money or for the deferred purchase price of
property or services (other than trade liabilities incurred in the ordinary
course of business and payable in accordance with customary practices), (b)
any other indebtedness of such Person which is evidenced by a note, bond,
debenture or similar instrument, (c) all obligations of such Person under
Financing Leases, (d) all obligations of such Person in respect of
acceptances issued or
31
created for the account of such Person, (e) all obligations of such Person
in respect of interest rate protection agreements, interest rate futures,
interest rate options, interest rate caps and any other interest rate hedge
arrangements and (f) all indebtedness or obligations of the types referred
to in the preceding clauses (a) through (e) secured by any Lien on any
property owned by such Person even though such Person has not assumed or
otherwise become liable for the payment thereof.
"Intellectual Property": the meaning ascribed to such term in the
---------------------
U.S. Credit Agreement.
"Interest Act": the Interest Act (Canada), as amended from time to
------------
time.
"Interest Payment Date": as to any Prime Rate Loan, the last day of
---------------------
each March, June, September and December to occur while such Loan is
outstanding.
"Inventory": as defined in the Personal Property Security Act; and,
---------
with respect to the Borrower or any of its Subsidiaries, all such inventory
of the Borrower or such Subsidiary, including, without limitation: (i) all
finished goods, parts, components, assemblies, supplies, labor, burden and
materials used or consumed in its business; (ii) all goods, wares and
merchandise, finished or unfinished, held for sale; and (iii) all goods
returned to or repossessed by the Borrower or such Subsidiary.
"Issuing Lender": Bank of Nova Scotia, in its capacity as issuer of
--------------
any Letter of Credit.
"Landlord's Waiver": a Landlord's Waiver, substantially in the form
-----------------
of Exhibit D.
32
"L/C Commission Rate": 1.50% per annum, less the Margin Reduction
------------------- ----
Percentage in effect from time to time.
"L/C Commitment": C$5,000,000.
--------------
"L/C Fee Payment Date": with respect to any Letter of Credit, the
--------------------
last day of each March, June, September and December occurring after the
date of issuance thereof and prior to the expiration thereof.
"L/C Obligations": at any time, an amount equal to the sum of (a) the
---------------
aggregate then undrawn and unexpired amount of the then outstanding Letters
of Credit and (b) the aggregate amount of drawings under Letters of Credit
which have not then been reimbursed pursuant to subsection 4.5(a).
"L/C Participants": the collective reference to all Lenders other
----------------
than the Issuing Lender.
"Lenders": as defined in the preamble hereto.
-------
"Lending Parties": the collective reference to the Lenders and the
---------------
U.S. Lenders; individually, a "Lending Party".
-------------
"Letters of Credit": as defined in subsection 4.1(a).
-----------------
"Lien": any mortgage, pledge, hypothecation, assignment, security
----
deposit arrangement, encumbrance, lien (statutory or other), charge or
other security interest or any preference, priority or other security
agreement or preferential arrangement of any kind or nature whatsoever
(including, without limitation, any conditional sale or other title
retention agreement and any Financing Lease having substantially the same
economic effect as any of the foregoing).
33
"Loans": the collective reference to loans (including, without
-----
limitation, Swing Line Loans) made by Lenders pursuant to this Agreement.
"Loan Documents": this Agreement, the Notes, the Applications, the
--------------
Drafts, the Acceptances, the Acceptance Notes, the Guarantees, the Security
Documents, the Collateral Covenant Agreement and the Canadian Subsidiary
Collateral Covenant Agreements.
"Loan Parties": Holdings, the Borrower, the U.S. Borrower and each
------------
Additional Subsidiary and each Subsidiary of the Borrower which is or
becomes a party to a Loan Document; individually, a "Loan Party".
----------
"Majority Lenders": at any time, Lenders which, in the aggregate,
----------------
have Commitments (or, if the Commitments have terminated or expired,
Aggregate Outstandings) aggregating at least 51% of the Commitments of all
Lenders (or, if the Commitments have terminated or expired, the Aggregate
Outstandings of all Lenders).
"Margin Adjustment Period": each period commencing on an Adjustment
------------------------
Date and ending on the Business Day immediately preceding the next
succeeding Adjustment Date.
"Margin Reduction Percentage": (a) during the period from and
---------------------------
including the Closing Date to but excluding the Adjustment Date which
occurs concurrently with the delivery by the Borrower pursuant to
subsection 8.1(b) or (c) (as applicable) of the financial statements of the
U.S. Borrower for the quarterly period ended June 30, 1995, zero and (b)
during each Margin Adjustment Period which occurs on or after the
Adjustment Date referred to in clause (a) above and in respect of which the
Fixed Charge Coverage Ratio for the four consecutive fiscal quarters of
34
the U.S. Borrower immediately preceding the commencement of such Margin
Adjustment Period (determined by reference to the certificates delivered
pursuant to subsection 8.2(b) concurrently with the financial statements
delivered under subsection 8.1(a), (b) or (c) (as applicable), or the
Annual Unaudited Financial Statements (as defined below in this
definition), as the case may be, with respect to such four consecutive
fiscal quarters) is (i) less than 3.00:1, zero, (ii) less than 3.50:1 but
greater than or equal to 3.00:1, 0.25% (when used in the definitions of
Prime Rate Margin and L/C Commission Rate and in subsection 3.4) and 0.125%
(when used in the definition of Commitment Fee Rate), (iii) less than
4.00:1 but greater than or equal to 3.50:1, 0.50% (when used in the
definitions of Prime Rate Margin and L/C Commission Rate and in subsection
3.4) and 0.125% (when used in the definition of Commitment Fee Rate), (iv)
less than 4.50:1 but greater than or equal to 4.00:1, 0.75% (when used in
the definitions of Prime Rate Margin and L/C Commission Rate and in
subsection 3.4) and 0.1875% (when used in the definition of Commitment Fee
Rate), (v) less than 5.00:1 but greater than or equal to 4.50:1, 0.90%
(when used in the definitions of Prime Rate Margin and L/C Commission Rate
and in subsection 3.4) and 0.25% (when used in the definition of Commitment
Fee Rate) and (vi) greater than or equal to 5.00:1, 1.0% (when used in the
definitions of Prime Rate Margin and L/C Commission Rate and in subsection
3.4) and 0.275% (when used in the definition of Commitment Fee Rate),
provided that:
--------
(x) notwithstanding the foregoing, during any period from and
including the date on which an Event of Default has occurred to but
excluding the date on which such Event of Default is no longer
35
continuing, the Margin Reduction Percentage shall be zero;
(y) if the Borrower delivers to the Administrative Agent any
financial statements referred to in clause (b) of the definition of
Adjustment Date (each, an "Annual Unaudited Financial Statement") and
------------------------------------
thereafter the financial statements delivered pursuant to subsection
8.1(a) in respect of the period covered by such Annual Unaudited
Financial Statement demonstrates a Fixed Charge Coverage Ratio for
such period which differs from that demonstrated by such Annual
Unaudited Financial Statement, any change in the Margin Reduction
Percentage occurring as a result of such difference shall be given
retroactive effect to the first Business Day after delivery of such
Annual Unaudited Financial Statement; and
(z) if any Financial Statement Delivery Default becomes an Event
of Default, the Margin Reduction Percentage (if greater than zero)
that was in effect for the period commencing on the date such
Financial Statement Delivery Default occurred to the date such
Financial Statement Delivery Default became an Event of Default shall
be retroactively adjusted to zero for such period and shall remain
zero until the first Business Day following receipt by the
Administrative Agent of the financial statements the failure to
deliver which gave rise to such Financial Statement Delivery Default,
which date shall constitute an Adjustment Date and upon which date the
Margin Adjustment Percentage shall be determined in accordance with
the other provisions of this definition.
If payments are made hereunder on the basis of a Margin Reduction
Percentage that is retroactively adjusted as a result of the occurrence of
any of the
36
events described in clauses (x), (y) or (z) of the proviso to the
immediately preceding sentence, the Lenders and the Borrower shall make
such payments to the Administrative Agent (which shall credit the account
of the Borrower or allocate such payments among the Lenders in accordance
with their respective interests in the payments theretofore made hereunder,
as the case may be, on the basis of the Margin Reduction Percentage that
was so retroactively adjusted) as may be necessary to give effect to such
adjustment, such payments to be calculated by the Administrative Agent
(which shall notify the Borrower and the Lenders thereof), to be made as
soon as practicable (but in any event no later than two Business Days after
such notice is given by the Administrative Agent) and to include interest
at the applicable Bank of Canada Rate for the period from the date to which
the Margin Reduction Percentage has been retroactively adjusted to the date
of the applicable payment on any amounts required to be paid as a result of
such retroactive adjustment.
"Material Adverse Effect": as defined in the U.S. Credit Agreement.
-----------------------
"Mixed Asset Sale": any Disposition constituting a "Mixed Asset Sale"
----------------
under and as defined in the Canadian First Mortgage Notes.
"Monthly Borrowing Base Certificate": as defined in subsection
----------------------------------
8.2(c).
"Net Cash Proceeds": with respect to any Asset Sale (including any
-----------------
Asset Sale that constitutes a sale and leaseback transaction permitted
under subsection 8.12 of the U.S. Credit Agreement), any sale or issuance
of equity securities of Holdings (but excluding any sale or issuance of
equity securities of Holdings to one or more Permitted Equity Purchasers to
the extent such sale or issuance is permitted by the
37
Holdings Guarantee) or any incurrence by the Borrower or any of its
Subsidiaries of any Indebtedness for borrowed money (excluding any
Indebtedness permitted by subsection 8.2 of the U.S. Credit Agreement), an
amount equal to the gross cash proceeds of such Asset Sale, issuance or
incurrence, net of the following amounts (but only to the extent such
amounts are paid or incurred by Holdings, the Borrower or any of its
Subsidiaries): (i) reasonable attorneys' fees, accountants' fees,
brokerage, consultant and other customary fees, underwriting commissions
and other reasonable fees and expenses actually incurred in connection with
such Asset Sale, issuance or incurrence, (ii) taxes paid or reasonably
estimated to be payable as a result thereof, after taking into account all
available deductions and credits in connection with such Asset Sale, (iii)
appropriate amounts to be provided by the Borrower or any of its
Subsidiaries as a reserve, in accordance with GAAP as in effect from time
to time in Canada, against any liabilities associated with such Asset Sale
and retained by the Borrower or such Subsidiary, as the case may be, after
such Asset Sale, and (iv) in the case of a sale or sale and leaseback of or
involving an asset subject to a Lien securing (a) any Indebtedness (other
than the Canadian First Mortgage Notes), payments made and installment
payments required to be made to repay such Indebtedness, including payments
in respect of principal, interest and prepayment premiums and penalties or
(b) the Canadian First Mortgage Notes, the Net Proceeds Allocable to Payee
and any Reserved Amounts (as each such term is defined in the Canadian
First Mortgage Notes) to the extent such Reserved Amounts are not paid to
the Borrower, with respect to such Asset Sale.
"New Inventory": Inventory of a particular stock keeping unit which
-------------
has been sold or offered for sale by the Borrower or any of its
Subsidiaries for a period of only fifteen months or less.
38
"Non-Excluded Taxes": as defined in subsection 5.9.
------------------
"Notes": the collective reference to the Revolving Credit Notes and
-----
the Swing Line Notes.
"Obligor": any purchaser of goods or services or other Person
-------
obligated to make payment to the Borrower or any of its Subsidiaries in
respect of a purchase of such goods or services.
"Obligations": as of any date of determination, (i) the aggregate
-----------
outstanding principal amount of the Loans, together with all accrued and
unpaid interest thereon, (ii) the outstanding Reimbursement Obligations,
together with all accrued and unpaid interest thereon, (iii) the aggregate
outstanding Acceptance Reimbursement Obligations, (iv) all accrued and
unpaid fees payable pursuant to subsections 4.3 and 5.3 and (v) all other
amounts then due and payable hereunder or under any of the other Loan
Documents.
"Operating Fund Limit": as defined in subsection 8.7(c).
--------------------
"Participants": as defined in subsection 12.6(b).
------------
"Permitted Equity Purchasers": as defined in the U.S. Credit
---------------------------
Agreement.
"Person": an individual, partnership, corporation, business trust,
------
joint stock company, trust, unincorporated association, joint venture,
Governmental Authority or other entity of whatever nature.
"Personal Property Security Act" or "PPSA": the Personal Property
------------------------------ ----
Security Act (Ontario), as amended from time to time.
39
"Prime Rate": at any date, the greater on such date of (i) the rate
----------
designated by Bank of Nova Scotia from time to time as its prime rate for
Canadian Dollar commercial loans made in Canada and (ii) 3/4 of 1% above
the Reference Discount Rate for Acceptances having a term to maturity of 30
days, as advised by the Administrative Agent to the Borrower on such date.
The Prime Rate is not intended to be the lowest rate of interest charged by
Bank of Nova Scotia in connection with extensions of credit in Canadian
Dollars to debtors.
"Prime Rate Loans": Loans denominated in Canadian Dollars which bear
----------------
interest at a rate based upon the Prime Rate.
"Prime Rate Margin": for each Prime Rate Loan, 0.75% per annum, less
----------------- ----
the Margin Reduction Percentage in effect from time to time, provided that
--------
the Prime Rate Margin shall never be less than zero.
"Principal Loan Documents": as defined in Section 12.1.
------------------------
"Properties": as defined in the U.S. Credit Agreement.
----------
"Qualifying Canadian Institutions": (a) banks incorporated under the
--------------------------------
Bank Act (Canada) and named in Schedule I or Schedule II thereof which are
resident in Canada within the meaning of the Tax Act and (b) other
financial institutions incorporated in Canada and resident in Canada within
the meaning of the Tax Act.
"Quebec Moveable Hypothec": the hypothec executed and delivered by
------------------------
the Borrower, substantially in the form of Exhibit O to the Existing Credit
Agreement, as the same may be amended, supplemented or otherwise modified
from time to time.
40
"RealCo": as defined in the recitals to the Existing Credit
------
Agreement.
"RealCo Cash Collateral Agreement": as defined in the U.S. Credit
--------------------------------
Agreement.
"RealCo First Mortgage Notes": as defined in the U.S. Credit
---------------------------
Agreement.
"RealCo First Mortgage Note Guarantees": as defined in the U.S.
-------------------------------------
Credit Agreement.
"RealCo Mortgaged Property": as defined in the U.S. Credit Agreement.
-------------------------
"RealCo Mortgages": as defined in the U.S. Credit Agreement.
----------------
"Reference Banks": Bank of Nova Scotia, Toronto-Dominion Bank and
---------------
National Bank of Canada.
"Reference Discount Rate": on any date with respect to each Draft
-----------------------
requested to be accepted by a Lender, the arithmetic average of the
discount rates (expressed as a percentage calculated on the basis of a year
of 365 days) quoted by the Toronto offices of each of the Reference Banks,
at 10:00 A.M. (Toronto time) on the Borrowing Date as the discount rate at
which each such Reference Bank would, in the normal course of its business,
purchase on such date Acceptances having an aggregate face amount equal to
C$1,000,000 and having the term to maturity as designated by the Borrower
pursuant to subsection 3.2. The Administrative Agent shall advise the
Borrower and the Lenders, either in writing or verbally, by 11:00 A.M.
(Toronto time) on the Borrowing Date as to the applicable Reference
Discount Rate and corresponding Acceptance Purchase Price in respect of
Acceptances having the maturities selected by the Borrower.
41
"Refunded Swing Line Loans": as defined in subsection 2.5(c).
-------------------------
"Register": as defined in subsection 12.6(d).
--------
"Reimbursement Obligations": the obligation of the Borrower to
-------------------------
reimburse the Issuing Lender pursuant to subsection 4.5(a) for amounts
drawn under Letters of Credit.
"Request for Acceptances": as defined in subsection 3.2(a).
-----------------------
"Requirement of Law": as to any Person, the certificate of
------------------
incorporation and by-laws or other organizational or governing documents of
such Person, and any law, treaty, rule, guideline or regulation or
determination of an arbitrator or a court or other Governmental Authority,
in each case applicable to or binding upon such Person or any of its
material property or to which such Person or any of its material property
is subject.
"Responsible Officer": as to any Person, any of the following
-------------------
officers of such Person: (i) the chief executive officer or the president
of such Person and, with respect to financial matters, the chief financial
officer, the treasurer or the controller of such Person and (ii) any vice
president of such Person or, with respect to financial matters, any
assistant treasurer or assistant controller of such Person, who has been
designated in writing to the Administrative Agent as a Responsible Officer
by such chief executive officer or president of such Person or, with
respect to financial matters, by such chief financial officer of such
Person; the Borrower shall ensure that at least one vice president is
designated to the Administrative Agent as a Responsible Officer by the
chief executive officer or president of the Borrower pursuant to the
foregoing clause (ii) from time to time.
42
"Revolving Credit Loans": as defined in subsection 2.1.
----------------------
"Revolving Credit Note": as defined in subsection 2.2.
---------------------
"Security Agreement": the Demand Debenture executed and delivered by
------------------
the Borrower in favor of the Administrative Agent, substantially in the
form of Exhibit D-1 to the Existing Credit Agreement, as the same may be
amended, supplemented or otherwise modified from time to time.
"Security Agreements": the collective reference to the Security
-------------------
Agreement, the Quebec Moveable Hypothec, the General Assignment of Book
Debts, the Debenture Pledge Agreement, the Bank Act Security, the
Subsidiary Security Agreements, and instruments, documents and agreements
described in Schedule 9.
"Security Documents": the collective reference to the Security
------------------
Agreements, the Canadian Subsidiary Stock Pledge Agreements and each U.S.
Security Document (other than the U.S. Borrower Canadian Stock Pledge
Agreement).
"Solvent" and "Solvency": with respect to any Person on a particular
------- --------
date, the condition that on such date (a) the fair value of the property of
such Person is greater than the total amount of liabilities, including,
without limitation, contingent liabilities, of such Person, (b) the present
fair salable value of the assets of such Person is not less than the amount
that will be required to pay the probable liability of such Person on its
existing debts as they become absolute and matured, (c) such Person does
not intend to, and does not believe that it will, incur debts or
liabilities beyond such Person's ability to pay as such debts and
liabilities mature, and (d) such Person is not engaged in business or a
transaction, and is not
43
about to engage in business or a transaction, for which such Person has an
unreasonably small amount of capital.
"Specialized Inventory": Inventory not customarily offered by the
---------------------
Borrower or any of its Subsidiaries for general sale to its customers and
which has been manufactured in accordance with specifications provided to
the Borrower or any such Subsidiary by or on behalf of a particular
customer which render such Inventory unsuitable for general sale to
customers.
"Standby Letter of Credit": as defined in subsection 4.1.
------------------------
"Subordinated Indebtedness": as defined in the U.S. Credit Agreement.
-------------------------
"Subsidiary": as to any Person, a corporation, partnership or other
----------
entity of which shares of stock or other ownership interests having
ordinary voting power (other than stock or such other ownership interests
having such power only by reason of the happening of a contingency) to
elect a majority of the board of directors or other managers of such
corporation, partnership or other entity are at the time owned, or the
management of which is otherwise controlled, directly or indirectly through
one or more intermediaries, or both, by such Person. Unless otherwise
qualified, all references to a "Subsidiary" or to "Subsidiaries" in this
Agreement shall refer to a Subsidiary or Subsidiaries of the Borrower.
"Subsidiary Security Agreements": the collective reference to the
------------------------------
Canadian Subsidiary Demand Debentures and the Canadian Subsidiary Debenture
Pledge Agreements.
44
"Supermajority Lenders": at any time, Lenders which, in the
---------------------
aggregate, have Commitments (or, if the Commitments have terminated or
expired, Aggregate Outstandings) aggregating at least 75% of the
Commitments of all Lenders (or, if the Commitments have terminated or
expired, the Aggregate Outstandings of all Lenders).
"Swing Line Commitment": the Swing Line Lender's obligation to make
---------------------
Swing Line Loans pursuant to subsection 2.5.
"Swing Line Lender": Bank of Nova Scotia in its capacity as provider
-----------------
of the Swing Line Loans.
"Swing Line Loans": as defined in subsection 2.5(a).
----------------
"Swing Line Note": as defined in subsection 2.5(b).
---------------
"Tax Act": the Income Tax Act (Canada), as amended from time to time.
-------
"Termination Date": February 28, 2000.
----------------
"Transferee": as defined in subsection 12.6(f).
----------
"Uniform Customs: the Uniform Customs and Practice for Documentary
---------------
Credits (1993 Revision), International Chamber of Commerce Publication No.
500, as the same may be amended from time to time.
"U.S. Acquisition Agreement": the Acquisition Agreement, dated as of
--------------------------
February 15, 1994, between Holdings and Westinghouse U.S., as amended,
supplemented or otherwise modified from time to time in accordance with
subsection 8.8.
45
"U.S. Administrative Agent": as defined in the recitals hereto.
-------------------------
"U.S. Aggregate Asset Sale Shortfall Amount": the meaning ascribed to
------------------------------------------
the term "Aggregate Asset Sale Shortfall Amount" in the U.S. Credit
Agreement.
"U.S. Borrower": as defined in the recitals hereto.
-------------
"U.S. Borrower Canadian First Mortgage Note Guarantees": the
-----------------------------------------------------
guarantees included on the Canadian First Mortgage Note and made by the
U.S. Borrower in favor of the holders of the Canadian First Mortgage Notes,
as the same may be amended, supplemented or otherwise modified from time to
time in accordance with subsection 9.6 hereof and subsection 8.8 of the
U.S. Credit Agreement.
"U.S. Borrower Canadian Stock Pledge Agreement": the meaning ascribed
---------------------------------------------
to the term "Borrower Canadian Stock Pledge Agreement" in the U.S. Credit
Agreement.
"U.S. Borrower Guarantee": the Guarantee, substantially in the form
-----------------------
of Exhibit L to the Existing Credit Agreement, made by the U.S. Borrower in
favor of the Administrative Agent, as the same may be amended, supplemented
or otherwise modified from time to time.
"U.S. Borrowing Base": the meaning ascribed to the term "Borrowing
-------------------
Base" in the U.S. Credit Agreement.
"U.S. Borrowing Base Default": the meaning ascribed to the term
---------------------------
"Borrowing Base Default" in the U.S. Credit Agreement.
"U.S.-Canada Transfer": as defined in subsection 2.4(b).
--------------------
46
"U.S. Collateral": the meaning ascribed to the term "Collateral" in
---------------
the U.S. Credit Agreement.
"U.S. Collateral Agent": Barclays in its capacity as collateral agent
---------------------
for the U.S. Administrative Agent and the Administrative Agent under each
U.S. Security Document (other than the U.S. Borrower Canadian Stock Pledge
Agreement).
"U.S. Commitment" and "U.S. Commitments": the meanings ascribed to
--------------- ----------------
the term "Commitment" and "Commitments", respectively, in the U.S. Credit
Agreement.
"U.S. Credit Agreement": as defined in the recitals hereto.
---------------------
"U.S. Default": the meaning ascribed to the term "Default" in the
------------
U.S. Credit Agreement.
"U.S. Disposition": the meaning ascribed to the term "Disposition" in
----------------
the U.S. Credit Agreement.
"U.S. Dollar Increase Amount": as defined in subsection 2.4(b).
---------------------------
"U.S. Dollar Reduction Amount": as defined in subsection 2.4(b).
----------------------------
"U.S. Dollars" and "$": dollars in lawful currency of the United
------------ -
States of America.
"U.S. Event of Default": the meaning ascribed to the term "Event of
---------------------
Default" in the U.S. Credit Agreement.
"U.S. Extensions of Credit": the meaning ascribed to the term
-------------------------
"Extensions of Credit" in the U.S. Credit Agreement.
47
"U.S. Guarantees": the meaning ascribed to the term "Guarantees" in
---------------
the U.S. Credit Agreement.
"U.S. L/C Obligations": the meaning ascribed to the term "L/C
--------------------
Obligations" in the U.S. Credit Agreement.
"U.S. Lenders": as defined in the recitals hereto.
------------
"U.S. Letters of Credit": the meaning ascribed to the term "Letters
----------------------
of Credit" in the U.S. Credit Agreement.
"U.S. Loan Documents": the meaning ascribed to the term "Loan
-------------------
Documents" in the U.S. Credit Agreement.
"U.S. Loans": the meaning ascribed to the term "Loans" in the U.S.
----------
Credit Agreement.
"U.S. Net Cash Proceeds": the meaning ascribed to the term "Net Cash
----------------------
Proceeds" in the U.S. Credit Agreement.
"U.S. Security Documents": the meaning ascribed to the term "Security
-----------------------
Documents" in the U.S. Credit Agreement.
"U.S. Transfer Commitment Percentage": as to any Common Lender or any
-----------------------------------
Lender at any time, the percentage of the aggregate U.S. Commitments of all
Common Lenders then constituted by the U.S. Commitment of (i) in the case
of a Common Lender or a Lender which is a Common Lender, such Common Lender
or (ii) in the case of a Lender which is not a Common Lender, the Common
Lender which is the parent or a subsidiary or an affiliate of such Lender.
"WESCO": an unincorporated division of Westinghouse U.S. that carried
-----
on business under the
48
names of "Westinghouse Electric Supply Company", "WESCO", and at certain
branch locations, under the names of "Caribe Industrial and Electric
Supplier", "Electra" and "Superior Electric", together with an
unincorporated division of Westinghouse Canada, that carried on business
under the name of "WESCO".
"Westinghouse": the collective reference to Westinghouse U.S. and
------------
Westinghouse Canada.
"Westinghouse Canada": Westinghouse Canada, Inc., a Canadian
-------------------
corporation and a wholly owned Subsidiary of Westinghouse U.S.
"Westinghouse U.S.": Westinghouse Electric Corporation, a
-----------------
Pennsylvania corporation.
1.2 Other Definitional Provisions. (a) Unless otherwise specified
-----------------------------
therein, all terms defined in this Agreement shall have the defined meanings
when used in the Notes or any certificate or other document made or delivered
pursuant hereto.
(b) As used herein and in the Notes and any other Loan Document, and
any certificate or other document made or delivered pursuant hereto or thereto,
accounting terms relating to the Borrower and its Subsidiaries not defined in
subsection 1.1 and accounting terms partly defined in subsection 1.1, to the
extent not defined, shall have the respective meanings given to them under GAAP.
(c) The words "hereof", "herein" and "hereunder" and words of similar
import when used in this Agreement shall refer to this Agreement as a whole and
not to any particular provision of this Agreement, and Section, subsection,
Schedule and Exhibit references are to this Agreement unless otherwise
specified.
49
(d) The meanings given to terms defined herein shall be equally
applicable to both the singular and plural forms of such terms.
SECTION 2. AMOUNT AND TERMS OF COMMITMENTS
2.1 Commitments. (a) Subject to the terms and conditions hereof,
-----------
each Lender severally agrees to make revolving credit loans ("Revolving Credit
----------------
Loans") to the Borrower from time to time during the Commitment Period in an
-----
aggregate principal amount at any one time outstanding which, when added to the
sum of the aggregate undiscounted face amount of all outstanding Acceptances of
such Lender and such Lender's Commitment Percentage of the then outstanding L/C
Obligations and the then outstanding Swing Line Loans, does not exceed the
lesser of (i) the amount of such Lender's Commitment and (ii) such Lender's
Commitment Percentage of the Borrowing Base then in effect. During the
Commitment Period the Borrower may use the Commitments by borrowing, prepaying
the Revolving Credit Loans in whole or in part, and reborrowing, all in
accordance with the terms and conditions hereof.
(b) The Revolving Credit Loans shall be Prime Rate Loans.
2.2 Revolving Credit Notes. The Revolving Credit Loans made by each
----------------------
Lender shall be evidenced by a promissory note of the Borrower, substantially in
the form of Exhibit A-1, with appropriate insertions as to payee, date and
principal amount (each, as amended, supplemented, replaced or otherwise modified
from time to time, a "Revolving Credit Note"), payable to the order of such
---------------------
Lender and representing the obligation of the Borrower to pay an amount equal to
the lesser of (a) the amount set forth opposite such Lender's name in Schedule 1
under the heading "Commitment" and (b) the aggregate unpaid principal amount of
all Revolving Credit Loans made by such Lender. Each Lender is hereby
authorized to record the date and amount of each Revolving
50
Credit Loan made by such Lender, each continuation thereof and the date and
amount of each payment or prepayment of principal thereof on its internal books
and records and/or on the schedule annexed to and constituting a part of its
Revolving Credit Note, and any such recordation on such schedule shall
constitute prima facie evidence of the accuracy of the information so recorded,
----- -----
provided that the failure by any Lender to make any such recordation or any
--------
error in any such recordation shall not affect the obligations of the Borrower
under this Agreement or the Revolving Credit Notes. Each Revolving Credit Note
shall (x) be dated the Closing Date, (y) be stated to mature on the Termination
Date and (z) provide for the payment of interest in accordance with subsection
5.1.
2.3 Procedure for Revolving Credit Borrowing. The Borrower may borrow
----------------------------------------
under the Commitments during the Commitment Period on any Business Day, provided
--------
that the Borrower shall give the Administrative Agent irrevocable notice (which
notice must be received by the Administrative Agent prior to 10:00 A.M., Toronto
time, on the requested Borrowing Date), specifying the amount to be borrowed as
a Prime Rate Loan and the requested Borrowing Date. Each borrowing under the
Commitments (other than a borrowing made pursuant to subsection 2.4(c)), except
any Prime Rate Loan to be used solely to pay a like amount of outstanding
Reimbursement Obligations or Swing Line Loans, shall be in an amount equal to
C$100,000 or a whole multiple of C$100,000 in excess thereof (or, if the then
Available Commitments are less than C$100,000, such lesser amount). Upon receipt
of any such notice from the Borrower, the Administrative Agent shall promptly
notify each Lender thereof. Each Lender will make the amount of its pro rata
--- ----
share (or, in the case of a borrowing under subsection 2.4(c), its applicable
share of such borrowing determined in accordance with subsection 2.4(c)) of each
borrowing of Revolving Credit Loans available to the Administrative Agent for
the account of the Borrower at the office of the Administrative Agent specified
in subsection 12.2 prior to 12:00 P.M., Toronto time, on the Borrowing Date
requested by
51
the Borrower in Canadian Dollars and in funds immediately available to the
Administrative Agent. Except as otherwise provided in subsections 2.4(c) and
4.5(c), such borrowing will then be made available to the Borrower by the
Administrative Agent crediting the account of the Borrower on the books of such
office with the aggregate of the amounts made available to the Administrative
Agent by the Lenders and in like funds as received by the Administrative Agent.
2.4 Termination or Reduction of Commitments; Transfers of the
---------------------------------------------------------
Commitment and the U.S. Commitment. (a) The Borrower shall have the right, upon
----------------------------------
not less than three Business Days' notice to the Administrative Agent, to
terminate the Commitments or, from time to time, to reduce the amount of the
Commitments; provided that no such termination or reduction shall be permitted
--------
if, after giving effect thereto and to any prepayments of the Revolving Credit
Loans and the Swing Line Loans made on the effective date thereof, the aggregate
principal amount of the Revolving Credit Loans then outstanding, when added to
the then outstanding L/C Obligations, the aggregate undiscounted face amount of
all then outstanding Acceptances and the then outstanding Swing Line Loans,
would exceed the Commitments then in effect. Any such reduction shall be in an
amount equal to C$5,000,000 or a whole multiple of C$500,000 in excess thereof
and shall reduce permanently the Commitments then in effect.
(b) From time to time prior to August 31, 1995, but on no more than
two (2) occasions, the Borrowers shall have the right, upon not less than five
(5) Business Days' prior written notice (a "Transfer Notice") to the
---------------
Administrative Agent and the U.S. Administrative Agent, to transfer (i) all or a
portion (which shall not exceed the aggregate Available Commitments of all
Lenders immediately before giving effect to the applicable transfer) of the
Commitments to the U.S. Commitments (a "Canada-U.S. Transfer") or (ii) a portion
--------------------
(which shall not exceed the aggregate Available U.S. Commitments of all Common
Lenders
52
immediately before giving effect to the applicable transfer) of the U.S.
Commitments to the Commitments (a "U.S.-Canada Transfer"); provided that (i)
-------------------- --------
after giving effect to any U.S.-Canada Transfer, the U.S. Dollar equivalent
(determined on the basis of the Closing Date Exchange Rate) of the aggregate
Commitments of all Lenders does not exceed U.S. $50,000,000, (ii) after giving
effect to any Canada-U.S. Transfer, the U.S. Dollar equivalent (determined on
the basis of the Closing Date Exchange Rate) of the aggregate Commitments of all
Lenders does not fall below U.S. $5,000,000 unless the entire Commitments of all
Lenders are transferred to the U.S. Commitments, in which case the rights of the
Borrower under this subsection 2.4(b) shall thereafter terminate, (iii) no
Default or Event of Default (other than a Borrowing Base Default in the case of
a U.S.-Canada Transfer or a U.S. Borrowing Base Default in the case of a Canada-
U.S. Transfer) shall have occurred and be continuing immediately before giving
effect to any such transfer, (iv) no Default or Event of Default shall have
occurred and be continuing immediately after giving effect to any such transfer
and (v) in the case of a U.S.-Canada Transfer, no Acceptances are outstanding on
(or all outstanding Acceptances mature on) the date such transfer is made. Each
Transfer Notice shall specify (i) the effective date of the proposed commitment
transfer (the "Transfer Effective Date"), (ii) in the case of a Canada-U.S.
-----------------------
Transfer, the aggregate amount in Canadian Dollars (the "Canadian Dollar
---------------
Reduction Amount") to be transferred from the Commitments to the U.S.
----------------
Commitments and the U.S. Dollar equivalent (determined on the basis of the
Closing Date Exchange Rate) of such amount (the "U.S. Dollar Increase Amount"),
---------------------------
(iii) in the case of a U.S.-Canada Transfer, the aggregate amount in U.S.
Dollars (the "U.S. Dollar Reduction Amount") to be transferred from the U.S.
----------------------------
Commitments to the Commitments and the Canadian Dollar equivalent (determined on
the basis of the Closing Date Exchange Rate) of such amount (the "Canadian
--------
Dollar Increase Amount"), and (iv) the aggregate amount to be borrowed from the
----------------------
Lenders on the Transfer Effective Date in accordance with subsection 2.4(c).
Upon receipt of any Transfer Notice, the
53
Administrative Agent shall promptly notify each Lender thereof, which notice
shall specify, with respect to each Lender, (i) any change in such Lender's
Commitment which occurs pursuant to this subsection 2.4(b) as a result of the
Canada-U.S. Transfer or U.S.-Canada Transfer specified in such Transfer Notice
and (ii) in the case of a U.S.-Canada Transfer, the aggregate principal amount
of the Revolving Credit Loan to be made by such Lender or the aggregate
principal amount (and accrued interest thereon) of the Revolving Credit Loans of
such Lender to be prepaid, as the case may be, in each case pursuant to
subsection 2.4(c) as a result of such U.S.-Canada Transfer. The Administrative
Agent shall provide a copy of such notice to the Borrower. On the Transfer
Effective Date with respect to any Canada-U.S. Transfer, (i) the Commitment of
each Lender shall be reduced by an amount equal to such Lender's Commitment
Percentage of the Canadian Dollar Reduction Amount specified in the Transfer
Notice delivered in respect of such Canada-U.S. Transfer and (ii) as provided in
the U.S. Credit Agreement, the U.S. Commitment of each Common Lender shall be
increased by an amount equal to such Common Lender's Canadian Transfer
Commitment Percentage of the U.S. Dollar Increase Amount specified in such
Transfer Notice. On the Transfer Effective Date with respect to any U.S.-Canada
Transfer, (i) as provided in the U.S. Credit Agreement, the U.S. Commitment of
each Common Lender shall be reduced by an amount equal to such Common Lender's
U.S. Transfer Commitment Percentage of the U.S. Dollar Reduction Amount
specified in the Transfer Notice delivered in respect of such U.S.-Canada
Transfer and (ii) the Commitment of each Lender shall be increased by an amount
equal to such Lender's U.S. Transfer Commitment Percentage of the Canadian
Dollar Increase Amount specified in such Transfer Notice. On each Transfer
Effective Date, each Lender shall surrender its outstanding Revolving Credit
Note to the Administrative Agent, and the Borrower shall execute and deliver to
the Administrative Agent (in exchange for the outstanding Revolving Credit Note
of each Lender) a new Revolving Credit Note to the order of such Lender
reflecting the change in such Lender's Commitment pursuant to this subsection
2.4(b)
54
on such Transfer Effective Date and otherwise conforming to the requirements of
this Agreement.
(c) On the Transfer Effective Date with respect to any U.S.-Canada
Transfer, each Lender shall make a Revolving Credit Loan to the Borrower in an
amount equal to the excess (if any) of (1) the product of (A) that percentage
which such Lender's Commitment will constitute of the aggregate Commitments of
all Lenders after giving effect to such U.S.-Canada Transfer, multiplied by (B)
-------------
the aggregate principal amount of all Revolving Credit Loans outstanding
immediately before giving effect to such transfer, over (2) the aggregate
----
principal amount of all Revolving Credit Loans made by such Lender which are
outstanding immediately before giving effect to such transfer, the proceeds of
which Revolving Credit Loans shall be made available to the Administrative Agent
by each Lender on such Transfer Effective Date in accordance with the
penultimate sentence of subsection 2.3 and applied by the Administrative Agent
on such Transfer Effective Date to the prepayment of the principal of the then
outstanding Revolving Credit Loans of each Lender that was not required to make
a Revolving Credit Loan pursuant to this sentence on such Transfer Effective
Date so that, after giving effect to such application, the outstanding principal
amount of each Lender's Revolving Credit Loans will equal the product of (1)
that percentage which such Lender's Commitment will constitute of the aggregate
Commitments of all Lenders after giving effect to such U.S.-Canada Transfer,
multiplied by (2) the aggregate principal amount of all Revolving Credit Loans
----------
outstanding immediately before such transfer.
2.5 Swing Line Commitments. (a) (i) Subject to the terms and
----------------------
conditions hereof, the Swing Line Lender agrees to make swing line loans
(individually, a "Swing Line Loan"; collectively, the "Swing Line Loans") to the
--------------- ----------------
Borrower from time to time during the Commitment Period in an aggregate
principal amount at any one time outstanding not to exceed C$5,000,000, provided
--------
that at no time may the sum of the then outstanding Swing Line Loans, Revolving
Credit
55
Loans, L/C Obligations and the aggregate undiscounted face amount of all then
outstanding Acceptances exceed the lesser of (x) the Commitments and (y) the
Borrowing Base then in effect. Amounts borrowed by the Borrower under this
subsection 2.5 may be repaid and, through but excluding the Termination Date,
reborrowed. All Swing Line Loans shall be made as Prime Rate Loans and shall not
be entitled to be converted into Acceptances. The Borrower shall give the Swing
Line Lender irrevocable notice (which notice must be received by the Swing Line
Lender prior to 12:00 P.M., Toronto time) on the requested Borrowing Date
specifying the amount of the requested Swing Line Loan. The proceeds of the
Swing Line Loan will be made available by the Swing Line Lender to the Borrower
at the office of the Swing Line Lender by crediting the account of the Borrower
at such office with such proceeds in Canadian Dollars.
(ii) Provided that the conditions precedent contained in subsection
7.2 to its obligation to make a Swing Line Loan have been satisfied and that
there is sufficient availability under the Swing Line Commitment, on each
Interest Payment Date, the Swing Line Lender shall, on behalf of the Borrower
(which hereby irrevocably authorizes and directs the Swing Line Lender to act on
its behalf), make a Swing Line Loan to the Borrower in an amount equal to the
amount of interest due and payable on such Interest Payment Date pursuant to
subsection 5.1. The proceeds of such Swing Line Loan shall be made available by
the Swing Line Lender to the Administrative Agent and applied by the
Administrative Agent to the payment of such interest on such Interest Payment
Date; the Swing Line Lender shall notify the Borrower as soon as reasonably
practicable of the amount of each such Swing Line Loan.
(b) The Swing Line Loans shall be evidenced by a promissory note of
the Borrower substantially in the form of Exhibit A-2, with appropriate
insertions (as the same may be amended, supplemented, replaced or otherwise
modified from time to time, the "Swing Line Note"), payable to the order of the
---------------
Swing Line Lender and representing the obligation of
56
the Borrower to pay the amount of the Swing Line Commitment or, if less, the
unpaid principal amount of the Swing Line Loans, with interest thereon as
prescribed in subsection 5.1. The Swing Line Lender is hereby authorized to
record the Borrowing Date, the amount of each Swing Line Loan and the date and
amount of each payment or prepayment of principal thereof, on its internal books
and records and/or on the schedule annexed to and constituting a part of the
Swing Line Note and any such recordation on such schedule shall constitute prima
-----
facie evidence of the accuracy of the information so recorded, provided that the
----- --------
failure by the Swing Line Lender to make any such recordation or any error in
any such recordation shall not affect the obligations of the Borrower under this
Agreement or the Swing Line Note. The Swing Line Note shall (a) be dated the
Closing Date, (b) be stated to mature on the Termination Date and (c) provide
for the payment of interest in accordance with subsection 5.1.
(c) The Swing Line Lender, at any time in its sole and absolute
discretion may, and, at any time when Swing Line Loans are outstanding for more
than seven Business Days, the Swing Line Lender shall, on behalf of the Borrower
(which hereby irrevocably directs and authorizes the Swing Line Lender to act on
its behalf), request each Lender to make a Revolving Credit Loan in an amount
equal to such Lender's Commitment Percentage of the principal amount of the
Swing Line Loans (the "Refunded Swing Line Loans") outstanding on the date such
-------------------------
notice is given; provided that the provisions of this subsection shall not
--------
affect the Borrower's obligations to prepay Swing Line Loans in accordance with
the provisions of subsection 5.2(d). Unless the Commitments shall have expired
or terminated (in which event the procedures of paragraph (d) of this subsection
2.5 shall apply), each Lender will make the proceeds of the Revolving Credit
Loan made by it pursuant to the immediately preceding sentence available to the
Administrative Agent for the account of the Swing Line Lender at the office of
the Administrative Agent prior to 10:00 A.M., Toronto time, in funds immediately
available on the Business Day next
57
succeeding the date such notice is given. The proceeds of such Revolving Credit
Loans shall be immediately applied to repay the Refunded Swing Line Loans.
(d) If the Commitments shall expire or terminate at any time while
Swing Line Loans are outstanding, each Lender shall, at the option of the Swing
Line Lender exercised reasonably, either (i) notwithstanding the expiration or
termination of the Commitments, make a Revolving Credit Loan or (ii) purchase an
undivided participating interest in such Swing Line Loans, in either case in an
amount equal to such Lender's Commitment Percentage determined on the date of,
and immediately prior to, expiration or termination of the Commitments of the
aggregate principal amount of such Swing Line Loans. Each Lender will make the
proceeds of any Revolving Credit Loan made by it pursuant to the immediately
preceding sentence available to the Administrative Agent for the account of the
Swing Line Lender at the office of the Administrative Agent prior to 10:00 A.M.,
Toronto time, in funds immediately available on the Business Day next succeeding
the date on which the Commitments expire or terminate. The proceeds of such
Revolving Credit Loans shall be immediately applied to repay the Swing Line
Loans outstanding on the date of termination or expiration of the Commitments.
In the event that the Lenders purchase undivided participating interests
pursuant to the first sentence of this paragraph (d), each Lender shall
immediately transfer to the Swing Line Lender, in immediately available funds,
the amount of its participation and upon receipt thereof the Swing Line Lender
will deliver to any such Lender that so requests a confirmation of such Lender's
undivided participating interest in the Swing Line Loans dated the date of
receipt of such funds and in such amount.
(e) Whenever, at any time after the Swing Line Lender has received
from any Lender such Lender's participating interest in a Swing Line Loan, the
Swing Line Lender receives any payment on account thereof, the Swing Line Lender
will distribute to such Lender its participating
58
interest in such amount (appropriately adjusted, in the case of interest
payments, to reflect the period of time during which such Lender's participating
interest was outstanding and funded); provided, however, that in the event that
-------- -------
such payment received by the Swing Line Lender is required to be returned, such
Lender will return to the Swing Line Lender any portion thereof previously
distributed by the Swing Line Lender to it.
SECTION 3. AMOUNT AND TERMS OF ACCEPTANCE
SUB-FACILITY
3.1 Acceptance Commitments. (a) Subject to the terms and conditions
----------------------
hereof, each Lender agrees to create Acceptances for the Borrower on any
Business Day during the Commitment Period by accepting Drafts drawn by the
Borrower; provided that no Lender shall be obligated to accept any Draft if,
--------
after giving effect to such acceptance, (i) the Available Commitment of such
Lender would be less than zero or (ii) the Aggregate Outstandings of all Lenders
would exceed the lesser of (A) the Borrowing Base then in effect and (B) the
aggregate Commitments of all Lenders.
(b) The Borrower may utilize the Commitments in the manner
contemplated by this Section 3 by authorizing each Lender in the manner provided
for in subsection 3.2(b) to draw Drafts on such Lender and having such Drafts
accepted pursuant to subsection 3.2, paying its obligations with respect thereto
pursuant to subsection 3.5, and again authorizing Drafts to be drawn on the
Lenders and having them presented for acceptance, all in accordance with the
terms and conditions of this Section 3.
(c) For the purposes of this Agreement, all Acceptances shall be
considered a utilization of the Commitments in an amount equal to the
undiscounted face amount of such Acceptance.
59
3.2 Creation of Acceptances. (a) The Borrower may request the
-----------------------
creation of Acceptances hereunder by submitting to the Administrative Agent at
its office specified in subsection 12.2 prior to 2:00 P.M., Toronto time, one
Business Day prior to the requested Borrowing Date, (i) a request for
acceptances ("Request for Acceptances") completed in a manner in form and
-----------------------
substance reasonably satisfactory to the Administrative Agent and specifying,
among other things, the Borrowing Date, maturity and amount of the Drafts to be
accepted and discounted, (ii) to the extent not theretofore supplied to each
Lender, a sufficient number of Drafts to be drawn on the Lenders, to be
appropriately completed in accordance with subsection 3.2(d) and (iii) such
other certificates, documents and other papers and information as the
Administrative Agent may reasonably request.
(b) In connection with each utilization by it of the Commitments by
way of Acceptances, the Borrower hereby agrees that it shall deliver to the
Administrative Agent on the Closing Date Powers of Attorney substantially in the
form annexed hereto as Exhibit C (each, a "Power of Attorney") authorizing each
-----------------
Lender to draw Drafts on such Lender on behalf of the Borrower and to complete
such Drafts in accordance with the Requests for Acceptances submitted from time
to time pursuant to Section 3.2(a) hereof.
(c) Each Draft requested by or on behalf of the Borrower for
acceptance hereunder shall be denominated in Canadian Dollars, shall have an
undiscounted face amount equal to C$500,000 or whole multiple of C$100,000 in
excess thereof, shall be dated the Borrowing Date specified in the Request for
Acceptances with respect thereto and shall be stated to mature on a Business Day
which is 30, 60, 90 or 180 days after the date thereof (and, in any event, prior
to the Termination Date).
(d) Not later than 12:00 P.M., Toronto time, on the Borrowing Date
specified in the relevant Request for Acceptances, and upon fulfillment of the
applicable
60
conditions set forth in Section 7, each Lender will, in accordance with such
Request for Acceptances, (i) sign each Draft on behalf of the Borrower pursuant
to the 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 of such acceptance and (iv) upon such acceptance, discount
such Acceptances to the extent contemplated by subsection 3.3.
3.3 Discount of Acceptances. (a) Each Lender hereby agrees, on the
-----------------------
terms and subject to the conditions set forth in this Agreement, to discount
Acceptances created by it on the Borrowing Date with respect thereto at the
applicable Reference Discount Rate by making available to the Borrower an amount
in immediately available funds equal to the Acceptance Purchase Price in respect
thereof, and to notify the Administrative Agent that such Draft has been
accepted and discounted by the accepting Lender.
(b) In the event that the Borrower has made a Request for
Acceptances, then (i) prior to 11:00 A.M., Toronto time, on the Borrowing Date
with respect thereto, Bank of Nova Scotia will notify the Borrower and the
Lenders of the Reference Discount Rate applicable to such Acceptance and (ii) if
such Reference Discount Rate is acceptable to the Borrower, the Lenders shall
make the Acceptance Purchase Price for the Acceptance discounted by it available
to the Administrative Agent, for the account of the Borrower, at the office of
the Administrative Agent specified in subsection 12.2 prior to 12:00 P.M.,
Toronto time, on the Borrowing Date, in funds immediately available to the
Administrative Agent. Such borrowing will then be made available to the
Borrower by the Administrative Agent crediting the account of the Borrower on
the books of such office with the aggregate of the amounts made available to the
Administrative Agent by the Lenders and in like funds as received by the
Administrative Agent.
(c) Acceptances discounted by any Lender may be held by it for its
own account until maturity or sold by it
61
at any time prior thereto in the relevant market therefor in Canada in such
Lender's sole discretion.
3.4 Stamping Fees. On the Borrowing Date with respect to each
-------------
Acceptance, the Borrower shall pay to the Administrative Agent, for the account
of the Lenders, a stamping fee at a rate per annum equal to 1.50% minus the
-----
Margin Reduction Percentage, computed for the period from and including the
Borrowing Date with respect to such Acceptance to the maturity of such
Acceptance, calculated on the basis of a 365-day year of the undiscounted face
amount of such Acceptance.
3.5 Acceptance Reimbursement Obligations. (a) The Borrower hereby
------------------------------------
unconditionally agrees to pay to each Lender, on the maturity date (whether at
stated maturity, by acceleration or otherwise) for each Acceptance created by
such Lender for the account of the Borrower, the aggregate undiscounted face
amount of each such then-maturing Acceptance.
(b) The obligation of the Borrower to reimburse the Lenders for
then-maturing Acceptances may be satisfied by the Borrower by:
(i) paying to the Administrative Agent, for the account of the
Lenders, the aggregate undiscounted face amount of all Acceptances created
for the account of the Borrower hereunder which are then maturing by 12:00
P.M., Toronto time, on such maturity date; provided that the Borrower
--------
shall have given one Business Day's prior notice to the Administrative
Agent (which shall promptly notify each Lender thereof) of its intent to
reimburse the Lenders in the manner contemplated by this clause (i);
(ii) having new Drafts accepted and discounted by the Lenders
in the manner contemplated by subsections 3.2 and 3.3 in substitution for
the then-maturing Acceptances; provided that (A) the Borrower shall have
--------
62
delivered to the Administrative Agent (which shall promptly provide a copy
thereof to each Lender) a duly completed Request for Acceptances not later
than 2:00 P.M., Toronto time, one Business Day prior to such maturity date,
together with the documents, instruments, certificates and other papers and
information contemplated by subsections 3.2(a)(ii) and 3.2(a)(iii), (B) if
any Default or Event of Default (other than a Default or an Event of
Default under Section 10(j) which occurs solely as result of the occurrence
of a U.S. Borrowing Base Default) has occurred and is then continuing and
the Administrative Agent or the Majority Lenders shall have given notice to
the Borrower that creation of Acceptances is not appropriate, the Request
for Acceptances shall be deemed to be a request for a Prime Rate Loan, (D)
each Lender shall retain the Acceptance Purchase Price for the Acceptance
created by it and apply such Acceptance Purchase Price to the Acceptance
Reimbursement Obligations of the Borrower in respect of the maturing
Acceptance and (E) if the Acceptance Purchase Price so retained by such
Lender is less than the undiscounted face amount of the then-maturing
Acceptance, the Borrower shall have made arrangements reasonably
satisfactory to such Lender for payment of such deficiency; or
(iii) to the extent that the Borrower has not given to the
Administrative Agent a notice contemplated by clause (i) or (ii) above,
then the Borrower shall be deemed to have requested a borrowing pursuant to
subsection 2.3 of Prime Rate Loans in the undiscounted face amount of such
Acceptance. The Borrowing Date with respect to such borrowing shall be the
maturity date (or such earlier date as the Commitment shall be terminated)
for such Acceptance. Except to the extent that any of the events
contemplated by Section 10(f)(i) or (ii) with respect to the Borrower has
occurred and is then continuing (in which case the Borrower shall be
obligated to pay to each Lender the undiscounted face
63
amount of the Acceptances created by such Lender which are then maturing),
each Lender shall be obligated to make the Prime Rate Loan contemplated by
this subsection 3.5(b)(iii) regardless of whether the conditions precedent
to borrowing set forth in this Agreement are then satisfied. The proceeds
of any Prime Rate Loans made pursuant to this subsection 3.5(b)(iii) shall
be retained by the Lenders and applied by them to the Acceptance
Reimbursement Obligations of the Borrower in respect of the then-maturing
Acceptance.
(c) The unpaid amount of any such Acceptance Reimbursement
Obligations shall be treated as a Prime Rate Loan for the purposes hereof and
interest shall accrue on the amount of any such unpaid Acceptance Reimbursement
Obligation from the date such amount becomes due until paid in full at a
fluctuating rate per annum equal to the rate which would then be payable on
Prime Rate Loans. Such interest shall be payable by the Borrower on demand by
the Administrative Agent.
(d) In no event shall the Borrower claim from any Lender any grace
period with respect to the payment at maturity of any Acceptances created by
such Lender pursuant to this Agreement.
3.6 Converting Loans to Acceptances and Acceptances to Loans. (a)
--------------------------------------------------------
Subject to subsection 3.6(b), the Borrower may at any time and from time to time
request that any then outstanding Revolving Credit Loan owing by it be converted
into an Acceptance by delivering to the Administrative Agent (which shall
promptly provide a copy thereof to each Lender) a Request for Acceptances,
together with a statement that the Acceptances so requested are to be created
pursuant to this subsection 3.6(a), such notice to be given not later than three
Business Days prior to the requested conversion date.
64
(b) In the event that the Administrative Agent receives such a
Request for Acceptances and the accompanying statement described in subsection
3.6(a), then the Borrower shall pay on the requested Borrowing Date to the
Administrative Agent, for the account of the Lenders, the principal amount of
the then outstanding Revolving Credit Loans being so converted, and each Lender
shall accept and discount the Borrower's Drafts having an aggregate face amount
at least equal to the principal amount of the Revolving Credit Loans of such
Lender which are then being repaid; provided that, following the occurrence and
--------
during the continuance of a Default or an Event of Default (other than a Default
or an Event of Default arising under Section 10(j) which occurs solely as a
result of the occurrence of a U.S. Borrowing Base Default), (i) no Acceptance
may be created when the Administrative Agent has or the Majority Lenders have
given notice to the Borrower that creation of Acceptances is not appropriate and
(iii) no Acceptance which is permitted to be created hereunder shall have a
maturity that extends beyond the Termination Date.
(c) The creation of Acceptances pursuant to this subsection 36 shall
not be subject to the satisfaction of the conditions precedent to borrowing set
forth in this Agreement.
(d) The Borrower may elect from time to time to convert outstanding
Acceptances to Revolving Credit Loans by giving the Administrative Agent at
least one Business Day's irrevocable notice of such election prior to the
maturity of such Acceptances, provided that any such conversion of Acceptances
--------
may only be made on the maturity thereof.
3.7 Acceptances to be Supplemented by Prime Rate Loans in order to be
-----------------------------------------------------------------
Created Ratably. The Borrower hereby agrees that each Request for Acceptances,
---------------
reimbursement of Acceptances and conversion of Revolving Credit Loans to
Acceptances shall be made in a manner so that any such Request for Acceptances,
reimbursement or conversion shall apply ratably to all Lenders and so that,
after giving
65
effect to such Request for Acceptances, reimbursement or conversion, as the case
may be, each Lender shall hold its ratable share of the aggregate amount of
Acceptances which mature on the same day. In the event that the aggregate amount
of Acceptances requested by the Borrower to be created by all Lenders hereunder
pursuant to any Request for Acceptances is an amount which, if divided ratably
among the Lenders, would not result in each Lender accepting a Draft which has
an undiscounted face amount equal to C$500,000 or a whole multiple of C$100,000
in excess thereof, then each Lender's ratable share of such Acceptance shall be
rounded downward to an amount which is equal to C$500,000 or a whole multiple of
C$100,000 in excess thereof, and the Borrower shall be deemed to have requested
that such Lender make a Prime Rate Loan to the Borrower (which Loan need not
satisfy the minimum borrowing requirements of subsection 2.3) on the date upon
which such Draft is to be accepted in the amount by which such Lender's ratable
share of the Acceptance requested in such Request for Acceptances was rounded
downward.
3.8 Special Provisions Relating to Non-Chartered Banks. (a) The
--------------------------------------------------
Borrower and each Lender hereby acknowledge and agree that from time to time
certain Lenders which are not Canadian chartered banks or which are Canadian
"Schedule II" chartered banks may not be authorized to or may, as a matter of
general corporate policy, elect not to accept Drafts, and the Borrower and each
Lender agrees that any such Lender may purchase Acceptance Notes of the Borrower
in accordance with the provisions of subsection 3.8(b) in lieu of creating
Acceptances for its account.
(b) In the event that any Lender described in subsection 3.8(a)
above is unable to, or elects as a matter of general corporate policy not to,
create Acceptances hereunder, such Lender shall not create Acceptances
hereunder, but rather the Borrower requesting the creation of such Acceptances
shall deliver to such Lender non-interest bearing promissory notes (the
"Acceptance Notes") of the Borrower, substantially in the form of Exhibit E to
----------------
66
the Existing Credit Agreement, having the same maturity as the Acceptances to be
created and in an aggregate principal amount equal to the undiscounted face
amount thereof. Each such Lender hereby agrees to purchase its Acceptance Note
at a purchase price equal to the Acceptance Purchase Price which would have been
applicable if a Draft had been accepted by it (less any stamping fee which would
have been paid pursuant to subsection 3.4 if such Lender had created an
Acceptance) and such Acceptance Notes shall be governed by the provisions of
this Section 3 as if they were Acceptances.
SECTION 4. LETTERS OF CREDIT
4.1 L/C Commitment. (a) Subject to the terms and conditions hereof,
--------------
the Issuing Lender, in reliance on the agreements of the other Lenders set forth
in subsection 4.4(a), agrees to issue letters of credit ("Letters of Credit")
-----------------
for the account of the Borrower on any Business Day during the Commitment Period
in such form as may be approved from time to time by the Issuing Lender;
provided that the Issuing Lender shall have no obligation to issue any Letter of
--------
Credit if, after giving effect to such issuance, (i) the L/C Obligations would
exceed the L/C Commitment or (ii) the Aggregate Outstandings of all Lenders
would exceed the lesser of (x) the aggregate Commitments and (y) the Borrowing
Base then in effect. Each Letter of Credit shall (i) be denominated in Canadian
Dollars and shall be either (x) a standby letter of credit issued to support
obligations of the Borrower or any of its Subsidiaries, contingent or otherwise,
which finance the working capital and business needs of the Borrower and its
Subsidiaries incurred in the ordinary course of business (a "Standby Letter of
-----------------
Credit"), or (y) a commercial letter of credit in respect of the purchase of
------
goods or services by the Borrower or any of its Subsidiaries in the ordinary
course of business (a "Commercial Letter of Credit"), (ii) expire no later than
---------------------------
the Termination Date, and (iii) expire no later than 365 days after its date of
issuance.
67
(b) Each Letter of Credit shall be subject to the Uniform Customs
and, to the extent not inconsistent therewith, the laws of the Province of
Ontario and the laws of Canada applicable therein.
(c) The Issuing Lender shall not at any time be obligated to issue
any Letter of Credit hereunder if such issuance would conflict with, or cause
the Issuing Lender or any L/C Participant to exceed any limits imposed by, any
applicable Requirement of Law.
4.2 Procedure for Issuance of Letters of Credit. The Borrower may
-------------------------------------------
from time to time request that the Issuing Lender issue a Letter of Credit by
delivering to the Issuing Lender, at its address for notices specified herein,
an Application therefor, completed to the reasonable satisfaction of the Issuing
Lender, and such other certificates, documents and other papers and information
as the Issuing Lender may reasonably request. Upon receipt of any Application,
the Issuing Lender will process such Application and the certificates, documents
and other papers and information delivered to it in connection therewith in
accordance with its customary procedures and shall promptly issue the Letter of
Credit requested thereby (but in no event shall the Issuing Lender be required
to issue any Letter of Credit earlier than three Business Days after its receipt
of the Application therefor and all such other certificates, documents and other
papers and information relating thereto) by issuing the original of such Letter
of Credit to the beneficiary thereof or as otherwise may be agreed by the
Issuing Lender and the Borrower. The Issuing Lender shall furnish a copy of
such Letter of Credit to the Borrower promptly following the issuance thereof.
4.3 Fees, Commissions and Other Charges. (a) The Borrower shall pay
-----------------------------------
to the Administrative Agent, for the account of the Issuing Lender and the L/C
Participants, a letter of credit commission with respect to each Letter of
Credit, for the period from and including the date of issuance of such Letter of
Credit to the expiration date of
68
such Letter of Credit, computed at the L/C Commission Rate, calculated on the
basis of a 365- (or 366-, as the case may be) day year, on the aggregate amount
available to be drawn under such Letter of Credit, payable quarterly in arrears
on each L/C Fee Payment Date to occur during such period and on the expiration
date of such Letter of Credit. Such commissions shall be payable to the Lenders
to be shared ratably among them in accordance with their respective Commitment
Percentages. In addition, the Borrower shall pay to the Administrative Agent,
for the account of the Issuing Bank, a fronting fee with respect to each Letter
of Credit, for the period from and including the date of issuance of such Letter
of Credit to the expiration date of such Letter of Credit, computed at a rate of
1/8 of 1% per annum, calculated on the basis of a 365- (or 366-, as the case may
be) day year, on the product of (i) the aggregate of the Commitment Percentages
of the L/C Participants multiplied by (ii) the aggregate amount available to be
drawn under such Letter of Credit, payable quarterly in arrears on each L/C Fee
Payment Date to occur during such period and on the expiration date of such
Letter of Credit. Such fees and commissions shall be nonrefundable.
(b) In addition to the foregoing fees and commissions, the Borrower
shall pay or reimburse the Issuing Lender for such normal and customary costs
and expenses as are incurred or charged by the Issuing Lender in issuing,
effecting payment under, amending or otherwise administering any Letter of
Credit.
(c) The Administrative Agent shall, promptly following its receipt
thereof, distribute to the Issuing Lender and the L/C Participants all fees and
commissions received by the Administrative Agent for their respective accounts
pursuant to this subsection.
4.4 L/C Participations. (a) The Issuing Lender irrevocably agrees
------------------
to grant and hereby grants to each L/C Participant, and, to induce the Issuing
Lender to issue Letters of Credit hereunder, each L/C Participant
69
irrevocably agrees to accept and purchase and hereby accepts and purchases from
the Issuing Lender, on the terms and conditions hereinafter stated, for such L/C
Participant's own account and risk an undivided interest equal to such L/C
Participant's Commitment Percentage (as in effect from time to time) in the
Issuing Lender's obligations and rights under each Letter of Credit issued
hereunder and the amount of each draft paid by the Issuing Lender thereunder.
Each L/C Participant unconditionally and irrevocably agrees with the Issuing
Lender that, if a draft is paid under any Letter of Credit for which the Issuing
Lender is not reimbursed in full by the Borrower in accordance with subsection
4.5(a), such L/C Participant shall pay to the Issuing Lender at the Issuing
Lender's address for notices specified herein an amount equal to such L/C
Participant's Commitment Percentage (in effect on the date of such demand) of
the amount of such draft, or any part thereof, which is not so reimbursed, such
payment to be made by such L/C Participant on the date (which shall be a
Business Day) a demand therefor is made by the Issuing Lender (if such demand is
made prior to 12:00 P.M. Toronto time on such date) or the next Business Day (if
such demand is made after 12:00 P.M. Toronto time on such date).
(b) If any amount required to be paid by any L/C Participant to the
Issuing Lender pursuant to subsection 4.4(a) in respect of any unreimbursed
portion of any payment made by the Issuing Lender under any Letter of Credit is
paid to the Issuing Lender within three Business Days after the date such
payment is due, such L/C Participant shall pay to the Issuing Lender on demand
an amount equal to the product of (i) such amount, times (ii) the weekly average
Bank of Canada Rate, during the period from and including the date such payment
is required to the date on which such payment is immediately available to the
Issuing Lender, times (iii) a fraction the numerator of which is the number of
days that elapse during such period and the denominator of which is 365 (or 366,
as the case may be). If any such amount required to be paid by any L/C
Participant pursuant to subsection 4.4(a) is not in fact made available to the
70
Issuing Lender by such L/C Participant within three Business Days after the date
such payment is due, the Issuing Lender shall be entitled to recover from such
L/C Participant, on demand, such amount with interest thereon calculated from
such due date at the rate per annum applicable to Prime Rate Loans hereunder. A
certificate of the Issuing Lender submitted to any L/C Participant with respect
to any amounts owing under this subsection shall be conclusive in the absence of
manifest error.
(c) Whenever, at any time after the Issuing Lender has made payment
under any Letter of Credit and has received from any L/C Participant its pro
---
rata share of such payment in accordance with subsection 4.4(a), the Issuing
----
Lender receives any payment related to such Letter of Credit (whether directly
from the Borrower or otherwise, including proceeds of Collateral applied thereto
by the Issuing Lender), or any payment of interest on account thereof, the
Issuing Lender will, if such payment is received prior to 12:00 Noon, Toronto
time, on a Business Day, distribute to such L/C Participant its pro rata share
--- ----
thereof prior to the end of such Business Day and otherwise the Issuing Lender
will distribute such payment on the next succeeding Business Day; provided,
--------
however, that in the event that any such payment received by the Issuing Lender
-------
shall be required to be returned by the Issuing Lender, such L/C Participant
shall return to the Issuing Lender the portion thereof previously distributed by
the Issuing Lender to it.
4.5 Reimbursement Obligation of the Borrower. (a) The Borrower
----------------------------------------
agrees to reimburse the Issuing Lender, upon receipt of notice from the Issuing
Lender of the date and amount of a draft presented under any Letter of Credit
and paid by the Issuing Lender, for the amount of (i) such draft so paid and
(ii) any taxes, fees, charges or other costs or expenses incurred by the Issuing
Lender in connection with such payment. Except as and to the extent otherwise
provided in subsection 4.5(c), each such payment shall be made to the Issuing
Lender, at its address for notices specified herein in Canadian Dollars and in
71
immediately available funds, on the date on which the Borrower receives such
notice, if received prior to 11:00 A.M., Toronto time, on a Business Day and
otherwise on the next succeeding Business Day.
(b) Interest shall be payable on any and all amounts payable under
subsection 4.5(a) and remaining unpaid by the Borrower (i) from the date the
draft presented under the affected Letter of Credit is paid to the earlier of
the third Business Day after the date on which the Borrower is required to pay
such amounts pursuant to subsection 4.5(a) and the date on which the Borrower
pays all such amounts at the rate which would then be payable on any outstanding
Prime Rate Loans and (ii) thereafter until payment in full at the rate which
would be payable on any outstanding Prime Rate Loans which were then overdue.
(c) By 12:00 P.M., Toronto time, on the first Business Day after each
date on which a draft is presented under any Letter of Credit and paid by the
Issuing Lender, the Administrative Agent shall, on behalf of the Borrower (which
hereby irrevocably directs and authorizes the Administrative Agent to act on its
behalf), request (in accordance with the applicable provisions of subsection
2.3) each Lender to make a Revolving Credit Loan in an amount equal to such
Lender's Commitment Percentage of the amount of such draft so paid. Each Lender
agrees to make each Revolving Credit Loan so requested available to the
Administrative Agent in accordance with subsection 2.3, provided that the
--------
conditions precedent contained in subsection 7.2 to its obligation to make such
Revolving Credit Loan have been satisfied. The proceeds of such Revolving
Credit Loans shall be made available by the Administrative Agent to the Issuing
Lender and applied to the payment (whether or not then due) of the obligations
of the Borrower under subsection 4.5(a)(i); upon such payment, the Borrower
shall be deemed to have satisfied such obligations to the extent of such
payment. The Issuing Lender shall notify the Administrative Agent and the
Borrower as soon as reasonably practicable of each drawing
72
made under a Letter of Credit and the aggregate principal amount of the
Revolving Credit Loans made under this subsection 4.5(c) in respect thereof.
4.6 Obligations Absolute. (a) The Borrower's obligations under this
--------------------
Section 4 shall be absolute and unconditional under any and all circumstances
and irrespective of any set-off, counterclaim or defense to payment which the
Borrower may have or have had against the Issuing Lender or any beneficiary of a
Letter of Credit, provided that this paragraph shall not relieve the Issuing
--------
Lender of any liability resulting from the gross negligence or willful
misconduct of the Issuing Lender, or otherwise affect any defense or other right
that the Borrower may have as a result of any such gross negligence or willful
misconduct.
(b) The Borrower also agrees with the Issuing Lender that the Issuing
Lender shall not be responsible for, and the Borrower's Reimbursement
Obligations under subsection 4.5(a) shall not be affected by, among other
things, (i) the validity or genuineness of documents or of any endorsements
thereon, even though such documents shall in fact prove to be invalid,
fraudulent or forged, or (ii) any dispute between or among the Borrower and any
beneficiary of any Letter of Credit or any other party to which such Letter of
Credit may be transferred or (iii) any claims whatsoever of the Borrower against
any beneficiary of such Letter of Credit or any such transferee, provided that
--------
this paragraph shall not relieve the Issuing Lender of any liability resulting
from the gross negligence or willful misconduct of the Issuing Lender, or
otherwise affect any defense or other right that the Borrower may have as a
result of any such gross negligence or willful misconduct.
(c) The Issuing Lender shall not be liable for any error, omission,
interruption or delay in transmission, dispatch or delivery of any message or
advice, however transmitted, in connection with any Letter of Credit, except
73
for errors or omissions caused by the Issuing Lender's gross negligence or
willful misconduct.
(d) The Borrower agrees that any action taken or omitted by the
Issuing Lender under or in connection with any Letter of Credit or the related
drafts or documents, if done in the absence of gross negligence or willful
misconduct and in accordance with the standards of care specified in the Uniform
Customs, shall be binding on the Borrower and shall not result in any liability
of the Issuing Lender to the Borrower.
4.7 Letter of Credit Payments. If any draft shall be presented for
-------------------------
payment under any Letter of Credit, the Issuing Lender shall promptly notify the
Borrower, the Swing Line Lender and the Administrative Agent of the date and
amount thereof. The responsibility of the Issuing Lender to the Borrower in
connection with any draft presented for payment under any Letter of Credit
shall, in addition to any payment obligation expressly provided for in such
Letter of Credit, be limited to determining that the documents (including each
draft) delivered under such Letter of Credit in connection with such presentment
are in conformity with such Letter of Credit, provided that this paragraph shall
--------
not relieve the Issuing Lender of any liability resulting from the gross
negligence or willful misconduct of the Issuing Lender, or otherwise affect any
defense or other right that the Borrower may have as a result of any such gross
negligence or willful misconduct.
4.8 Application. To the extent that any provision of any Application
-----------
related to any Letter of Credit is inconsistent with the provisions of this
Section 4, the provisions of this Section 4 shall apply.
74
SECTION 5. GENERAL PROVISIONS APPLICABLE TO
LOANS AND LETTERS OF CREDIT
5.1 Interest Rates and Payment Dates. (a) Each Prime Rate Loan
--------------------------------
(including each Swing Line Loan) shall bear interest for each day that it is
outstanding at a rate per annum equal to the Prime Rate for such day plus the
Prime Rate Margin in effect for such day.
(b) If all or a portion of (i) the principal amount of any Loan, (ii)
any interest payable thereon or (iii) any commitment fee or other amount payable
hereunder shall not be paid when due (whether at the stated maturity, by
acceleration or otherwise), such overdue amount shall bear interest at a rate
per annum which is (x) in the case of overdue principal, the rate that would
otherwise be applicable thereto pursuant to the foregoing provisions of this
subsection plus 2% or (y) in the case of overdue interest, commitment fee or
other amount, the rate described in paragraph (a) of this subsection plus 2%, in
each case from the date of such non-payment until such amount is paid in full
(as well after as before judgment).
(c) Interest shall be payable in arrears on each Interest Payment
Date, provided that interest accruing pursuant to paragraph (b) of this
--------
subsection shall be payable from time to time on demand.
(d) It is the intention of the parties hereto to comply strictly with
applicable usury laws; accordingly, it is stipulated and agreed that the
aggregate of all amounts which constitute interest under applicable usury laws,
whether contracted for, charged, taken, reserved, or received, in connection
with the indebtedness evidenced by this Agreement or the Notes, or any other
document relating or referring hereto or thereto, now or hereafter existing,
shall never exceed under any circumstance whatsoever the maximum amount of
interest allowed by applicable usury laws including the Criminal Code of Canada.
75
5.2 Optional and Mandatory Prepayments. (a) The Borrower may at any
----------------------------------
time and from time to time repay the Loans, in whole or in part, without premium
or penalty, upon irrevocable notice given to the Administrative Agent no later
than 12:00 P.M., Toronto time on the immediately preceding Business Day
specifying the date and amount of repayment and whether the repayment is of
Revolving Credit Loans or Swing Line Loans or a combination thereof, and, in
each case if a combination thereof, the amount allocable to each. Upon the
receipt of any such notice the Administrative Agent shall promptly notify each
affected Lender thereof. If any such notice is given, the amount specified in
such notice shall be due and payable on the date specified therein together with
accrued interest to such date on the amount prepaid. Repayments of the Loans
shall be applied first, to payment of the Swing Line Loans then outstanding and
-----
second, to payment of the Revolving Credit Loans then outstanding.
------
(b) If, at any time during the Commitment Period, the Aggregate
Outstandings of all Lenders exceed the lesser of (i) the Borrowing Base then in
effect and (ii) the aggregate Commitments then in effect (whether as result of a
reduction in the Commitments pursuant to subsection 2.4(b), subsection 5.2(c)(i)
or otherwise), the Borrower shall, without notice or demand, immediately (in the
case of clause (ii) above) or within three Business Days (in the case of clause
(i) above) repay the Loans and any then outstanding Reimbursement Obligations in
an aggregate principal amount equal to such excess, together with interest
accrued to the date of such payment. Such payments shall be applied first, to
-----
pay Swing Line Loans then outstanding, second, to pay any Reimbursement
------
Obligations then outstanding, third, to pay Revolving Credit Loans then
-----
outstanding and fourth, to cash collateralize its then outstanding Acceptances
------
upon terms reasonably satisfactory to the Administrative Agent. To the extent
that after giving effect to any repayment of the Loans or Reimbursement
Obligations or the cash collateralization of any Acceptances required by the
preceding sentence, the Aggregate Outstandings of all
76
Lenders exceed the lesser of (i) the Borrowing Base then in effect and (ii) the
aggregate Commitments then in effect, the Borrower shall, without notice or
demand, immediately cash collateralize the then outstanding L/C Obligations in
an amount equal to such excess upon terms reasonably satisfactory to the
Administrative Agent.
(c) (i) Unless otherwise agreed in writing by the Majority Lenders in
the case of clause (A) below or the Aggregate Majority Lenders in the case of
clause (B) below, if at any time (A) the Borrower or any of its Subsidiaries
shall incur Indebtedness for borrowed money (excluding any Indebtedness
permitted by subsection 8.2 of the U.S. Credit Agreement) pursuant to a public
offering or private placement or otherwise or (B) Holdings or any of its
Subsidiaries shall sell or issue shares of its Capital Stock (except for shares
of Capital Stock of Holdings or an Additional Subsidiary issued or sold to one
or more Permitted Equity Purchasers to the extent such sale or issuance is
permitted pursuant to the U.S. Credit Agreement and the Holdings Guarantee),
then the Commitments shall be permanently reduced by an amount equal to (1) 100%
of the Net Cash Proceeds thereof (in the case of clause (A) above) or (2) the
Canadian Prepayment Percentage (as in effect on the date of such sale or
issuance) of 66-2/3% of the Net Cash Proceeds thereof (in the case of clause (B)
above), with such reductions to be effective on the date of receipt of any such
Net Cash Proceeds.
(ii) Unless otherwise agreed in writing by the Majority Lenders, if
at any time the Borrower or any of its Subsidiaries shall make an Asset Sale
pursuant to subsection 9.2(g), the Borrower shall repay the Loans and any then
outstanding Reimbursement Obligations in an aggregate amount equal to 100% of
the Net Cash Proceeds thereof, together with accrued interest on such Loans and
Reimbursement Obligations to the date of such payment, such payments to be made
promptly upon receipt of such Net Cash Proceeds and to be applied to the
Extensions of Credit in the same order as that specified in subsection 5.2(b).
77
(d) The Borrower shall prepay all Swing Line Loans then outstanding
simultaneously with each borrowing of Revolving Credit Loans and may prepay
(without premium or penalty) any outstanding Swing Line Loans upon at least one
Business Day's notice to the Administrative Agent.
5.3 Commitment Fees; Agency Fees; Other Fees. (a) The Borrower
----------------------------------------
agrees to pay to the Administrative Agent for the account of each Lender, a
commitment fee for the period from and including the Closing Date to but
excluding the Termination Date (or such earlier date as the Commitments shall
terminate as provided herein), computed at the Commitment Fee Rate on the
average daily amount of the Available Commitment of such Lender during the
period for which payment is made, payable quarterly in arrears on the last day
of each March, June, September and December and on the Termination Date or such
earlier date as the Commitments shall terminate as provided herein, commencing
on the first such date to occur after the date hereof.
(b) The Borrower shall pay (without duplication of any fee payable
under subsection 5.3(a)) to the Administrative Agent and the Collateral Agent,
for their respective accounts, the other fees required to be paid pursuant to
the Agency Fee Letter, dated February 24, 1995 between the U.S. Borrower, the
U.S. Administrative Agent and the U.S. Collateral Agent, in each case in the
amounts and on the dates set forth therein.
5.4 Computation of Interest and Fees. (a) Interest based on the
--------------------------------
Prime Rate and commitment fees and interest (other than the interest component
of the Reference Discount Rate) shall be calculated on the basis of a 365-(or
366-, as the case may be) day year for the actual days elapsed. Any change in
the interest rate on a Loan resulting from a change in the Prime Rate shall
become effective as of the opening of business on the day on which such change
becomes effective. The Administrative Agent shall as soon as practicable notify
the Borrower and the
78
Lenders of the effective date and the amount of each such change in interest
rate.
(b) For purposes of the Interest Act, (i) the principle of deemed
reinvestment of interest does not apply to any interest calculation under this
Agreement; and (ii) the rates of interest stipulated in this Agreement are
intended to be nominal rates and not effective rates or yields.
(c) Each determination of an interest rate by the Administrative
Agent pursuant to any provision of this Agreement shall be conclusive and
binding on the Borrower and the Lenders in the absence of manifest error. The
Administrative Agent shall, at the request of the Borrower, deliver to the
Borrower a statement showing in reasonable detail the calculations used by the
Administrative Agent in determining any interest rate pursuant to subsection
5.1.
5.5 Pro Rata Treatment and Payments. (a) Except as provided in
-------------------------------
subsection 2.4(b) and (c), each borrowing of Loans (other than Swing Line Loans)
by the Borrower from the Lenders hereunder shall be made, each payment by the
Borrower on account of any commitment fee hereunder shall be allocated by the
Administrative Agent, and any reduction of the Commitments of the Lenders shall
be allocated by the Administrative Agent, pro rata according to the relevant
--- ----
Commitment Percentages of the Lenders. Except as provided in subsection 2.4(c),
each payment (including each prepayment) by the Borrower on account of principal
of and interest on any Revolving Credit Loans shall be allocated by the
Administrative Agent pro rata according to the respective outstanding principal
--- ----
amounts of such Revolving Credit Loans then held by the Lenders. All payments
(including prepayments) to be made by the Borrower hereunder and under any
Notes, whether on account of principal, interest, fees or otherwise, shall be
made without set-off or counterclaim and shall be made prior to 12:00 P.M.,
Toronto time, on the due date thereof to the Administrative Agent, for the
account of the Lenders holding such Notes, at the Administrative Agent's office
specified in subsection 12.2, in Canadian Dollars and in immediately available
funds. The Administrative Agent shall distribute such payments to such Lenders,
if any such payment is received prior to 12:00 Noon, Toronto time, on a Business
Day, in like funds as received prior to the end of such Business Day, and
otherwise the
79
Administrative Agent shall distribute such payment to such Lenders on the next
succeeding Business Day. If any payment hereunder (other than payments on the
Acceptances) becomes due and payable on a day other than a Business Day, the
maturity of such payment shall be extended to the next succeeding Business Day,
and, with respect to payments of principal, interest thereon shall be payable at
the then applicable rate during such extension.
(b) Unless the Administrative Agent shall have been notified in
writing by any Lender prior to a borrowing that such Lender will not make the
amount that would constitute its share of such borrowing available to the
Administrative Agent, the Administrative Agent may assume that such Lender is
making such amount available to the Administrative Agent, and the Administrative
Agent may, in reliance upon such assumption, make available to the Borrower a
corresponding amount. If such amount is not made available to the
Administrative Agent by the required time on the Borrowing Date therefor, such
Lender shall pay to the Administrative Agent, on demand, such
80
amount with interest thereon at a rate equal to the Administrative Agent's
reasonable estimate of its daily average cost of funds for the period until such
Lender makes such amount immediately available to the Administrative Agent. A
certificate of the Administrative Agent submitted to any Lender with respect to
any amounts owing under this subsection shall be conclusive in the absence of
manifest error. If such Lender's share of such borrowing is not made available
to the Administrative Agent by such Lender within three Business Days of such
Borrowing Date, (x) the Administrative Agent shall notify the Borrower of the
failure of such Lender to make such amount available to the Administrative Agent
and the Administrative Agent shall also be entitled to recover such amount with
interest thereon at the rate per annum applicable to Prime Rate Loans hereunder,
on demand, from the Borrower and (y) the Borrower may, without waiving any
rights it may have against such Lender, borrow a like amount on an unsecured
basis from any commercial bank for a period ending on the date upon which such
Lender does in fact make such borrowing available, provided that (i) at the time
--------
such borrowing is made and at all times while such amount is outstanding the
Borrower would be permitted to borrow such amount pursuant to subsection 2.1 of
this Agreement and (ii) the commercial bank from whom such borrowing is made
waives in a written agreement reasonably satisfactory to the Administrative
Agent any right of set-off it may have against the Collateral.
5.6 Borrowing Base Compliance. The Collateral Agent or another
-------------------------
financial institution satisfactory to the Collateral Agent (including any
Affiliate of the Collateral Agent) shall, from time to time during the
Commitment Period, (except during any Borrowing Base Elimination Period) review
and confirm the information set forth in each Monthly Borrowing Base Certificate
delivered by the Borrower in order to determine whether, at such time, the
Borrower is in compliance with the requirements in respect of the Borrowing Base
under this Agreement, and the Borrower shall reimburse the Collateral Agent for
its reasonable out-of-pocket expenses (excluding fees) in respect thereof. If
the Borrower is not in compliance with such requirements, the Collateral Agent
shall promptly notify the Borrower, the Administrative Agent and the Lenders of
such noncompliance, and the Borrower shall make all mandatory prepayments
required pursuant to subsection 5.2(b).
5.7 Illegality. Notwithstanding any other provision herein, if the
----------
adoption of or any change in any Requirement of Law or in the interpretation or
application thereof occurring after the date hereof shall make it unlawful for
any Lender to create or maintain Acceptances as contemplated by this Agreement,
(a) such Lender shall as soon as reasonably practicable thereafter give written
81
notice of such circumstances to the Borrower and the Administrative Agent (which
notice shall be withdrawn whenever such circumstances no longer exist), (b) the
commitment of such Lender hereunder to accept Drafts, purchase Acceptances and
convert Prime Rate Loans to Acceptances shall forthwith be cancelled, and, until
such time as it shall no longer be unlawful for such Lender to create or
maintain Acceptances, such Lender shall then have a commitment only to make a
Prime Rate Loan when an Acceptance is requested and (c) all outstanding
Acceptances, if any, shall be converted automatically to Prime Rate Loans on the
respective maturities thereof or within such earlier period as required by law.
5.8 Requirements of Law. (a) If the adoption of or any change in
-------------------
any Requirement of Law or in the interpretation or application thereof
applicable to any Lender, or compliance by any Lender with any request or
directive (whether or not having the force of law) from any central bank or
other Governmental Authority, in each case made subsequent to the date hereof
(or, if later, the date on which such Lender becomes a Lender):
(i) shall subject such Lender to any tax of any kind whatsoever
with respect to this Agreement, any Note, any Letter of Credit, any
Application or any Acceptance made by it, or change the basis of taxation
of payments to such Lender in respect thereof (except for Non-Excluded
Taxes covered by subsection 5.9 (including Non-Excluded Taxes imposed
solely by reason of any failure of such Lender to comply with its
obligations under subsection 5.9(a)) and changes in rate of tax on the
overall net income, or franchise tax (imposed in lieu of such net income
tax), of such Lender or its applicable lending office, branch, or any
affiliate thereof);
(ii) shall impose on such Lender any other condition (excluding
any tax of any kind whatsoever);
82
and the result of any of the foregoing is to increase the cost to such Lender,
by an amount which such Lender deems to be material, of creating, converting
into, continuing or maintaining Acceptances or issuing or participating in
Letters of Credit or to reduce any amount receivable hereunder in respect
thereof, then, in any such case, upon notice to the Borrower from such Lender,
through the Administrative Agent, in accordance herewith, the Borrower shall
promptly pay such Lender, upon its demand, any additional amounts necessary to
compensate such Lender for such increased cost or reduced amount receivable,
provided that, in any such case, the Borrower may elect to convert any
--------
Acceptances made available by such Lender hereunder to Prime Rate Loans by cash
collateralizing all outstanding Acceptances and by giving the Administrative
Agent at least three Business Days' notice of such election. If any Lender
becomes entitled to claim any additional amounts pursuant to this subsection, it
shall as soon as reasonably practicable thereafter provide notice thereof to the
Borrower, through the Administrative Agent, certifying (x) that one of the
events described in this paragraph (a) has occurred and describing in reasonable
detail the nature of such event, (y) as to the increased cost or reduced amount
resulting from such event and (z) as to the additional amount demanded by such
Lender and a reasonably detailed explanation of the calculation thereof. Such a
certificate as to any additional amounts payable pursuant to this subsection
submitted by such Lender, through the Administrative Agent, to the Borrower
shall be conclusive in the absence of manifest error. This covenant shall
survive the termination of this Agreement and the payment of the Notes and all
other amounts payable hereunder.
(b) If any Lender shall have determined that the adoption of or any
change in any Requirement of Law regarding capital adequacy or in the
interpretation or application thereof or compliance by such Lender or any
corporation controlling such Lender with any request or directive regarding
capital adequacy (whether or not having the force of law) from any Governmental
Authority, in each
83
case, made subsequent to the date hereof (or, if later, the date on which such
Lender becomes a Lender), does or shall have the effect of reducing the rate of
return on such Lender's or such corporation's capital as a consequence of its
obligations hereunder or under any Letter of Credit to a level below that which
such Lender or such corporation could have achieved but for such change or
compliance (taking into consideration such Lender's or such corporation's
policies with respect to capital adequacy) by an amount deemed by such Lender to
be material, then from time to time, within ten Business Days after submission
by such Lender to the Borrower (with a copy to the Administrative Agent) of a
written request therefor certifying (x) that one of the events described in this
paragraph (b) has occurred and describing in reasonable detail the nature of
such event, (y) as to the reduction of the rate of return on capital resulting
from such event and (z) as to the additional amount or amounts demanded by such
Lender and a reasonably detailed explanation of the calculation thereof, the
Borrower shall pay to such Lender such additional amount or amounts as will
compensate such Lender for such reduction.
5.9 Taxes. (a) Except as provided below in this subsection, all
-----
payments made by the Borrower under this Agreement and the Notes shall be made
free and clear of, and without deduction or withholding for or on account of,
any present or future income, stamp or other taxes, levies, imposts, duties,
charges, fees, deductions or withholdings, now or hereafter imposed, levied,
collected, withheld or assessed by any Governmental Authority, excluding in the
case of each Lender or its applicable lending office, or any branch or affiliate
thereof (i) net income taxes, doing business and franchise and similar taxes,
branch taxes or taxes on the overall capital or net worth of any Lender or its
applicable lending office, or any branch or affiliate thereof imposed by any
jurisdiction under the laws of which such Lender, applicable lending office,
branch or affiliate is organized or is located, or in which its principal
executive office is located, or any nation within which such jurisdiction is
located or any political subdivision thereof
84
and (ii) any such taxes or other tax, levy, impost, duty, charge, fee, deduction
or withholding imposed by reason of any connection between the jurisdiction
imposing such tax and such Lender, applicable lending office, branch or
affiliate other than a connection arising solely from such Lender having
executed, delivered or performed its obligations, or received payment under or
enforced, this Agreement or the Notes. If any such non-excluded taxes, levies,
imposts, duties, charges, fees, deductions or withholdings ("Non-Excluded
------------
Taxes") are required to be withheld from any amounts payable to the
------
Administrative Agent or any Lender hereunder or under the Notes, the amounts so
payable to the Administrative Agent or such Lender shall be increased by any
additional amounts to the extent necessary to yield to the Administrative Agent
or such Lender (after payment of all Non-Excluded Taxes on such additional
amounts) interest or any such other amounts payable hereunder at the rates or in
the amounts specified in this Agreement and the Notes; provided, however, that
--------
the Borrower shall be entitled to deduct and withhold any Non-Excluded Taxes and
shall not be required to pay any such additional amounts to any Lender that is
not incorporated under the laws of Canada or a province thereof or is not a
resident of Canada for purposes of the Tax Act. Whenever any Non-Excluded Taxes
are payable by the Borrower, as promptly as possible thereafter, the Borrower
shall send to the Administrative Agent for its own account or for the account of
such Lender, as the case may be, a certified copy of an original official
receipt received by the Borrower showing payment thereof. If the Borrower fails
to pay any Non-Excluded Taxes when due to the appropriate taxing authority or
fails to remit to the Administrative Agent the required receipts or other
required documentary evidence, the Borrower shall indemnify the Administrative
Agent and each Lender from any incremental taxes, interest or penalties that may
become payable by the Administrative Agent or any Lender as a result of any such
failure. The agreements in this subsection 5.9 shall survive the termination of
this Agreement and the payment of the Loans,
85
Acceptance Reimbursement Obligations, Letters of Credit and all other amounts
payable hereunder.
(b) Any Lender that is not incorporated under the laws of Canada or
a province thereof or is not a resident of Canada for purposes of the Tax Act
shall, on or before the date of any payment by the Borrower under this
Agreement, notify the Borrower and the Administrative Agent in writing of the
jurisdiction in which the Lender is resident.
5.10 Certain Rules Relating to the Payment of Additional Amounts.
-----------------------------------------------------------
(a) Upon the request, and at the expense, of the Borrower, each Lender to which
the Borrower is required to pay any additional amount pursuant to subsection 5.8
or 5.9, and any Participant in respect of whose participation such payment is
required, shall reasonably afford the Borrower the opportunity to contest, and
reasonably cooperate with the Borrower in contesting, the imposition of any Non-
Excluded Tax giving rise to such payment; provided that (i) such Lender shall
--------
not be required to afford the Borrower the opportunity to so contest unless the
Borrower shall have confirmed in writing to such Lender its obligation to pay
such amounts pursuant to this Agreement and (ii) the Borrower shall reimburse
such Lender for its reasonable attorneys' and accountants' fees and
disbursements incurred in so cooperating with the Borrower in contesting the
imposition of such Non-Excluded Tax.
(b) If a Lender changes its applicable lending office (other than
pursuant to paragraph (c) below) and the effect of the change, as of the date of
the change, would be to cause the Borrower to become obligated to pay any
additional amount under subsection 5.8 or 5.9, the Borrower shall not be
obligated to pay such additional amount.
(c) If a condition or an event occurs which would, or would upon
the passage of time or giving of notice, result in the payment of any additional
amount to any Lender by the Borrower pursuant to subsection 5.8 or 5.9, such
Lender shall as soon as reasonably practicable
86
thereafter notify the Borrower and the Administrative Agent and shall take such
steps as may reasonably be available to it and acceptable to the Borrower to
mitigate the effects of such condition or event (which shall include efforts to
rebook the Loans held by such Lender at another lending office, or through
another branch or an affiliate, of such Lender); provided that such Lender shall
--------
not be required to take any step that, in its reasonable judgment, would be
materially disadvantageous to its business or operations or would require it to
incur additional costs (unless the Borrower agrees to reimburse such Lender for
all such reasonable and actual additional costs).
(d) If (and for so long as) the Borrower shall become obligated to
pay additional amounts pursuant to subsection 5.8 or 5.9 and any affected Lender
shall not have promptly taken the steps necessary to avoid the need for payments
under subsection 5.8 or 5.9, the Borrower shall have the right, upon payment in
full of all amounts then due from it under subsections 5.8 and 5.9, (i) with the
assistance of the Administrative Agent, to seek one or more substitute Lenders
reasonably satisfactory to the Administrative Agent and the Borrower to purchase
in accordance with the provisions of subsection 12.6(c) the affected Loan, in
whole or in part, at an aggregate price no less than the principal amount of
such Loan or part thereof being purchased plus accrued and unpaid interest
thereon to the date of purchase and all fees and other amounts owing to the
affected Lender hereunder (or under the other Loan Documents) and accrued to the
date of the purchase (but without payment to the affected Lender of any premium
or penalty) and to assume the obligations of the affected Lender under this
Agreement and the other Loan Documents, or (ii) after the Borrower has made a
good faith effort to seek a substitute Lender in accordance with clause (i)
above and provided that no Default or Event of Default has occurred and is
continuing, upon at least three Business Days' irrevocable notice to the
Administrative Agent and the affected Lender, to terminate the entire Commitment
of the affected Lender and to repay the affected Loan, together
87
with accrued and unpaid interest thereon to date of repayment, and all fees and
other amounts accrued to the date of repayment and owing to the affected Lender
hereunder (or under the other Loan Documents) (but without payment to the
affected Lender of any premium or penalty). In the case of the substitution of a
Lender, the Borrower, the Administrative Agent, the affected Lender, and any
substitute Lender shall execute and deliver an appropriately completed
Assignment and Acceptance pursuant to subsection 12.6(c) to effect the
assignment of rights to, and the assumption of obligations by, the substitute
Lender.
(e) Notwithstanding any other provision of this Agreement, no Lender
shall be entitled to receive any additional amounts pursuant to subsection 5.8
or 5.9 unless such Lender represents to the Borrower that, at the time of any
request by such Lender that such amounts be paid, it is the policy or general
practice of such Lender to demand such compensation for comparable costs or
deductions, if any, in similar circumstances, if any, under comparable
provisions of other credit agreements for comparable customers.
(f) The obligations of the Borrower and a Lender or Participant under
this subsection 5.10 shall survive the termination of this Agreement and the
payment of the Notes and all amounts payable.
SECTION 6. REPRESENTATIONS AND WARRANTIES
To induce the Administrative Agent, the Collateral Agent and each
Lender to enter into and perform their respective obligations under this
Agreement, and to induce each Lender to make the initial Extension of Credit
requested to be made by it on the Effective Date and to accept and discount
Drafts (or discount Acceptance Notes), the Borrower hereby represents and
warrants, on the Effective Date and on each date that any Extension of Credit is
made thereafter, to the Administrative Agent, the Collateral Agent and each
Lender that:
88
6.1 Solvent. As of the Effective Date, the Borrower is Solvent.
-------
6.2 Corporate Existence. The Borrower is duly incorporated, validly
-------------------
existing and in good standing under the laws of the jurisdiction of its
incorporation.
6.3 Corporate Power; Authorization; Enforceable Obligations. (a)
-------------------------------------------------------
The Borrower has the corporate power and authority to make, deliver and perform
the Loan Documents to which it is a party and to borrow hereunder and has taken
all necessary corporate action to authorize the borrowings on the terms and
conditions of this Agreement, the Notes, the Drafts, the Acceptance Notes and
the Applications and to authorize the execution, delivery and performance of the
Loan Documents to which it is a party. No consent or authorization of, filing
with, notice to or other act by or in respect of, any Governmental Authority or
any other Person is required to be obtained or made by or on behalf of the
Borrower in connection with the borrowings hereunder or with the execution,
delivery, performance, validity or enforceability of the Loan Documents to which
the Borrower is a party, except (i) for consents, authorizations, notices and
filings described in Schedule 6.3, all of which have been obtained or made, (ii)
for filings to perfect the Liens created by the Security Agreements and (iii)
any consents pursuant to the Financial Administration Act (Canada) or equivalent
legislation in respect of Accounts of the Borrower the Obligor in respect of
which is Canada or any province, department, agency or instrumentality thereof.
This Agreement and each other Loan Document to which the Borrower is a party has
been duly executed and delivered on behalf of the Borrower. This Agreement and
each other Loan Document to which the Borrower is a party constitutes a legal,
valid and binding obligation of the Borrower enforceable against the Borrower in
accordance with its terms, except as enforceability may be limited by applicable
bankruptcy, insolvency, reorganization, moratorium or similar laws affecting the
enforcement of creditors' rights
89
generally and by general equitable principles (whether enforcement is sought by
proceedings in equity or at law).
(b) Each Loan Party (other than the Borrower) has the corporate power
and authority to make, deliver and perform the Loan Documents to which it is a
party and has taken all necessary corporate action to authorize the execution,
delivery and performance of the Loan Documents to which it is a party. No
consent or authorization of, filing with, notice to or other act by or in
respect of, any Governmental Authority or any other Person is required to be
obtained or made by or on behalf of any such Loan Party in connection with the
execution, delivery, performance, validity or enforceability of the Loan
Documents to which it is a party, except (i) for consents, authorizations,
notices and filings described in Schedules 6.3, all of which have been obtained
or made, (ii) for filings to perfect the Liens created by the Security
Agreements, and (iii) consents pursuant to the Financial Administration Act or
equivalent legislation in respect of Accounts of such Loan Party the Obligor of
which is Canada or any province, department, agency or instrumentality thereof.
Each Loan Document to which any such Loan Party is a party has been duly
executed and delivered on behalf of each such Loan Party. Each Loan Document to
which any such Loan Party is a party when executed and delivered by such Loan
Party will constitute a legal, valid and binding obligation of such Loan Party
enforceable against such Loan Party in accordance with its terms, except as
enforceability may be limited by applicable bankruptcy, insolvency,
reorganization, moratorium or similar laws affecting the enforcement of
creditors' rights generally and by general equitable principles (whether
enforcement is sought by proceedings in equity or at law).
6.4 No Legal Bar. The execution, delivery and performance of the
------------
Loan Documents to which the Borrower is a party, the borrowings hereunder and
the use of the proceeds thereof and the creation and perfection of the Liens
contemplated by the Security Agreements (a) will not violate any Requirement of
Law or Contractual Obligation of the
90
Borrower or any of its Subsidiaries in any respect that would reasonably be
expected to have a Material Adverse Effect and (b) will not result in, or
require, the creation or imposition of any Lien (other than the Liens created by
the Security Documents) on any of its properties or revenues pursuant to any
such Requirement of Law or material Contractual Obligation (as defined in the
U.S. Credit Agreement).
6.5 No Default. No Default or Event of Default has occurred and is
----------
continuing.
6.6 Collateral. Upon filing of the financing statements and other
----------
documents delivered to the Administrative Agent by the Borrower on or prior to
the Closing Date in the jurisdictions listed on Schedule 6.6 (which financing
statements and other documents are in proper form for filing in such
jurisdictions), upon the filing of a Notice of Intention (the "Notice of
---------
Intention") to give security pursuant to Section 427 of the Bank Act at the
---------
office of the Bank of Canada, upon the filing of the Security Agreement in the
Trademarks Office and upon the registration of the Security Agreements and the
making of filings in any other jurisdiction as may be necessary under any
Requirement of Law on or after the Closing Date, the Liens created pursuant to
each Security Agreement, when executed and delivered, will constitute valid
Liens on and, perfected security interests, mortgages and charges in or on the
collateral referred to in such Security Agreement in favor of the Administrative
Agent for the ratable benefit of the Lenders (and with respect to the Notice of
Intention and other Bank Act Security, in favor of those Lenders holding Bank
Act Security), prior to all other Liens of all other Persons, except, to the
extent such Liens have priority by law, Liens permitted pursuant to subsection
8.3 of the U.S. Credit Agreement, and enforceable as such as against all other
Persons, except as enforceability may be limited by applicable bankruptcy,
insolvency, reorganization, moratorium or similar laws affecting the enforcement
of creditors' rights generally and by general equitable
91
principles (whether enforcement is sought by proceedings in equity or at law).
6.7 Subsidiaries. As of the Closing Date, the Borrower had no
------------
Subsidiaries. No Person other than the Borrower or Subsidiaries of the Borrower
owns any Capital Stock of any Subsidiary of the Borrower.
6.8 Purpose of Loans. The proceeds of the Loans shall be used by the
----------------
Borrower to finance the working capital and business requirements of the
Borrower and its Subsidiaries.
6.9 Canadian Pension Plans. (a) (i) The only Canadian Pension Plans
----------------------
of the Borrower are one or more defined contribution pension plans; (ii) each
Canadian Pension Plan, when established by the Borrower, will be in compliance
in all material respects with all applicable pension benefits and tax laws;
(iii) all contributions (including employee contributions made by authorized
payroll deductions) required to be made to the appropriate funding agency in
accordance with all applicable laws and the terms of each Canadian Pension Plan,
once established, will be made in accordance with applicable laws and the terms
of each Canadian Pension Plan; and (iv) no event has occurred or will occur and
no condition exists or will exist with respect to any Canadian Pension Plan that
has resulted or could reasonably be expected to result in any Canadian Pension
Plan having its registration revoked or refused for the purposes of any
applicable pension benefits or tax laws or being placed under the administration
of any relevant pension benefits regulatory authority or being required to pay
any taxes or penalties under any applicable pension benefits or tax laws; except
in each case under clauses (i) through (iv) above, to the extent that any of the
foregoing could not, in the aggregate, reasonably be expected to have a Material
Adverse Effect.
(b) With respect to any retirement or other deferred compensation
plan maintained, administered or
92
contributed to by or to which there may be an obligation to contribute by the
Borrower or any of its Subsidiaries in respect of employees in Canada which is
not a Canadian Pension Plan, all required contributions have been made and there
are no unfunded liabilities in respect of such plans (either on a "going
concern" or on a "winding up" basis and determined in accordance with all
applicable laws and using assumptions and methods that are appropriate in the
circumstances and in accordance with generally accepted actuarial principles and
practices in Canada), except to the extent that all such unfunded liabilities
and failures to make required contributions could not, in the aggregate,
reasonably be expected to have a Material Adverse Effect.
6.10 Representations and Warranties in the U.S. Credit Agreement.
-----------------------------------------------------------
The representations and warranties made by the U.S. Borrower in the U.S. Credit
Agreement are true and correct in all material respects.
6.11 No Default. Immediately prior to the occurrence of the
----------
Effective Date, no Default or Event of Default (as defined in each of the
Existing Credit Agreement and the Existing U.S. Credit Agreement) has occurred
and is continuing.
SECTION 7. CONDITIONS PRECEDENT
7.1 Conditions to Effectiveness. This Agreement shall become
---------------------------
effective on the date (the "Effective Date") upon which each of the following
conditions shall be satisfied: (i) the execution and delivery of this Agreement
by each party hereto, (including, without limitation, the Guarantors' signature
lines which are set forth at the foot of this Agreement), (ii) the occurrence of
the "Effective Date" under and as defined in subsection 6.1 of the U.S. Credit
Agreement, and (iii) the first date upon which each of the conditions precedent
set forth in this subsection 7.1 are satisfied (the "Effective Date"):
93
(a) Legal Opinions. The Administrative Agent shall have received
--------------
(with a copy for each Lender) and the Administrative Agent and the Lenders
shall be reasonably satisfied with, the legal opinions referred to in
subsection 6.1 of the U.S. Credit Agreement, and each such legal opinion
shall state, or be accompanied by a separate letter to the effect, that the
Administrative Agent and the Lenders are entitled to rely thereon as if
such legal opinions were addressed to the Administrative Agent and the
Lenders.
(b) Corporate Proceedings of the Loan Parties. The
-----------------------------------------
Administrative Agent shall have received, with a copy for each Lender, a
copy of the resolutions, in form and substance reasonably satisfactory to
the Administrative Agent, of the Board of Directors of the Borrower
authorizing, as applicable, (i) the execution, delivery and performance of
this Agreement, the Notes and the other Loan Documents to which it is or
will be a party and (ii) the borrowings contemplated hereunder.
(c) Incumbency Certificates of the Loan Parties. The
-------------------------------------------
Administrative Agent shall have received, with a copy for each Lender, a
certificate of the Borrower dated the Closing Date, as to the incumbency
and signature of the officers of the Borrower executing any Loan Document,
reasonably satisfactory in form and substance to the Administrative Agent,
executed by the Secretary or any Assistant Secretary of the Borrower.
7.2 Conditions to Each Extension of Credit. The agreement of each
--------------------------------------
Lender to make any Extension of Credit requested to be made by it on any date
(including, without limitation, the initial Extension of Credit and each Swing
Line Loan) is subject to the satisfaction or waiver of the following conditions
precedent:
(a) Representations and Warranties. Each of the representations and
------------------------------
warranties made by any Loan Party pursuant to this Agreement or any other
Loan Document
94
(or in any amendment, modification or supplement hereto or thereto) to
which it is a party, and each of the representations and warranties
contained in any certificate furnished at any time by or on behalf of any
Loan Party pursuant to this Agreement or any other Loan Document shall,
except to the extent that they relate to a particular date, be true and
correct in all material respects on and as of such date as if made on and
as of such date.
(b) No Default. No Default or Event of Default (other than a Default
----------
or an Event of Default arising under Section 10(j) which occurs solely as a
result of the occurrence of a U.S. Borrowing Base Default) shall have
occurred and be continuing on such date or after giving effect to the
Extensions of Credit requested to be made on such date.
(c) Borrowing Base. After giving effect to the Extensions of Credit
--------------
requested to be made on such date, the Aggregate Outstandings of all the
Lenders shall not exceed the lesser of (i) the Borrowing Base then in
effect and (ii) the aggregate Commitments.
Each Extension of Credit made to (or on behalf of) the Borrower hereunder shall
constitute a representation and warranty by the Borrower as of the date of such
Extension of Credit that the conditions contained in this subsection 7.2 have
been satisfied.
SECTION 8. AFFIRMATIVE COVENANTS
The Borrower hereby agrees that, from and after the Closing Date and
so long as the Commitments remain in effect, and thereafter until payment in
full of the Notes, the Acceptance Reimbursement Obligations, all Reimbursement
Obligations and any other amount then due and owing to any Lender, the
Collateral Agent or the Administrative Agent hereunder or under any other Loan
Document and termination
95
or expiration of all Letters of Credit, the Borrower shall and (except in the
case of subsections 8.1, 8.2 and 8.6) shall cause each of its Subsidiaries to:
8.1 Financial Statements. Furnish to each Lender:
--------------------
(a) as soon as available, but in any event not later than 90 days
after the end of each fiscal year of each of the U.S. Borrower and the
Borrower, (i) a copy of the consolidated balance sheet of Holdings and its
consolidated Subsidiaries (other than Realco) and (ii) a copy of the
consolidated balance sheet of the Borrower and its consolidated
Subsidiaries (if any), in each case as at the end of each such year and
together with copies of the related consolidated statements of operations,
changes in common stockholders' equity and cash flows for each such year,
setting forth in the case of such balance sheets as at the end of the 1995
fiscal year of Holdings and the Borrower and in the case of such balance
sheets and statements of operations, changes in common stockholders' equity
and cash flows for the 1996 and subsequent fiscal years of Holdings and the
Borrower, in each case in comparative form the figures for the previous
year, and in the case of (i) above such consolidated financial statements
to be reported on without a "going concern" or like qualification or
exception, or qualification arising out of the scope of the audit, by
Coopers & Xxxxxxx or other independent certified public accountants of
nationally recognized standing and such financial statements to be
certified by a Responsible Officer of Holdings or the Borrower, as the case
may be, as being fairly stated in all material respects;
(b) as soon as available, but in any event not later than 45 days
after the end of each of the first three quarterly periods of each fiscal
year of Holdings, a copy of the unaudited consolidated and consolidating
balance sheet of Holdings and its consolidated Subsidiaries as at the end
of such quarter and the related unaudited consolidated and consolidating
statements of operations, changes in common stockholders' equity and cash
flows of Holdings and its
96
consolidated Subsidiaries for such quarter and the portion of the fiscal
year through the end of such quarter, setting forth, (x) in the case of
each such consolidated and consolidating balance sheet as of the end of the
second fiscal quarter of 1995 and thereafter, in comparative form the
budgeted figures (as adjusted consistent with past practice) for the
relevant period and the figures as at the end of the previous fiscal year
and (y) in the case of each such consolidated and consolidating statements
of operations and cash flows for the second fiscal quarter of 1995 and
thereafter, in comparative form the budgeted figures (as adjusted
consistent with past practice) for the relevant period and the figures for
the corresponding period of the previous fiscal year, certified by a
Responsible Officer of Holdings as being fairly stated in all material
respects (subject to normal year-end audit and other adjustments and except
for the absence of notes);
(c) as soon as available, but in any event not later than 30 days
after the end of each fiscal month of each fiscal year of Holdings, a copy
of the unaudited consolidated balance sheet of Holdings and its
consolidated Subsidiaries as of the end of such month and the related
unaudited consolidated statement of operations, the sales figures with
respect to which shall be broken down between Holdings and the Borrower,
setting forth with respect to months ending after March 1, 1995, in the
case of such consolidated balance sheets, in comparative form the figures
as at the end of the previous fiscal year and, in the case of such
consolidated statements of operations, in comparative form the figures for
the corresponding fiscal month of the previous year, certified by a
Responsible Officer of Holdings as being fairly stated in all material
97
respects (subject to normal year-end audit and other adjustments and except
for the absence of notes) provided that during any Borrowing Base
--------
Elimination Period the Borrower shall not be required to make any delivery
pursuant to this subsection 8.1(c); and
(d) as soon as available, a copy of the consolidated balance sheet of
Holdings and its consolidated Subsidiaries as of March 1, 1994, reported on
without a "going concern" or like qualification or exception, or
qualification arising out of the scope of the audit, by Coopers & Xxxxxxx
or other independent certified public accountants of nationally recognized
standing and certified by a Responsible Officer of the Borrower as being
fairly stated in all material respects;
all such financial statements shall be (and, in the case of financial statements
delivered pursuant to subsection 8.1(a) (but only with respect to the
consolidating financial statements referred to therein), (b), (c) and (d) above,
shall be certified by a Responsible Officer of Holdings as being) fairly stated
in all material respects in conformity with GAAP and shall be (and, in the case
of financial statements delivered pursuant to subsection 8.1(a) (but only with
respect to the consolidating financial statements referred to therein), (b), (c)
and (d) above, shall be certified by a Responsible Officer of Holdings as being)
prepared in accordance with GAAP applied consistently throughout the periods
reflected therein and with prior periods (except as approved by such accountants
or officer, as the case may be, and disclosed therein, and except, in the case
of the financial statements delivered pursuant to subsection 8.1(b) and (c), for
the absence of certain notes).
98
8.2 Certificates; Other Information. Furnish to each Lender:
-------------------------------
(a) concurrently with the delivery of the financial statements
referred to in subsection 8.1(a) a certificate of the independent certified
public accountants reporting on such financial statements stating that in
making the audit necessary therefor no knowledge was obtained of any
Default or Event of Default, except as specified in such certificate;
(b) concurrently with the delivery of the financial statements
referred to in subsections 8.1(a), (b) and (c), and in clause (b) of the
definition of Adjustment Date, a certificate of a Responsible Officer of
the U.S. Borrower or Holdings, as the case may be, (i) stating that, to the
best of such Officer's knowledge, the U.S. Borrower and the Borrower or
Holdings, as the case may be, during such period has observed or performed
all of its covenants and other agreements, and satisfied every condition,
contained in the U.S. Credit Agreement and this Agreement and in the Notes
and the other Loan Documents to which it is a party to be observed,
performed or satisfied by it, and that such Responsible Officer has
obtained no knowledge of any Default or Event of Default hereunder or under
the U.S. Credit Agreement, except, in each case, as specified in such
certificate and (ii) setting forth the calculations required to determine
(A) the Margin Reduction Percentage and compliance with the covenants set
forth in subsection 8.1 of the U.S. Credit Agreement (in the case of a
certificate furnished with the financial statements referred to in
subsections 8.1(a) and (b) hereof and in clause (b) of the definition of
Adjustment Date) and (B) compliance with the covenant set forth in
subsection 8.9 of the U.S. Credit Agreement (in the case of a certificate
furnished with the financial statements referred to in subsection 8.1(a)
hereof);
99
(c) on or prior to the first Friday that is after the 15th day of
each calendar month after the Closing Date (except during any Borrowing
Base Elimination Period), a certificate substantially in the form of
Exhibit E (a "Monthly Borrowing Base Certificate"), certified by a
----------------------------------
Responsible Officer of the Borrower as true and correct, setting forth the
amount of Accounts of the Borrower and its Subsidiaries, Eligible Accounts,
Inventory of the Borrower and its Subsidiaries and Eligible Inventory, in
each case as of the last Business Day of the immediately preceding month,
attached to which shall be reasonably detailed information including an
aging schedule of Accounts of the Borrower and its Subsidiaries;
(d) as soon as available, but in any event not later than ninety days
after the beginning of each fiscal year of the U.S. Borrower, a copy of the
projections by the U.S. Borrower of the operating budget and cash flow
budget of the U.S. Borrower and its Subsidiaries for such fiscal year, such
projections to be accompanied by a certificate of a Responsible Officer of
the U.S. Borrower to the effect that such Responsible Officer believes, as
of the date of such certificate, such projections to have been prepared on
the basis of reasonable assumptions;
(e) within five days after the same are sent, copies of all financial
statements and reports which Holdings or the U.S. Borrower sends to its
security holders, and within five days after the same are filed, copies of
all financial statements and periodic reports which Holdings or the U.S.
Borrower may file with the Securities and Exchange Commission or any
successor or analogous Governmental Authority;
(f) within two days after the same are filed, copies of all
registration statements and any amendments and exhibits thereto, which
Holdings or the U.S. Borrower may file with the Securities and Exchange
100
Commission or any successor or analogous Governmental Authority;
(g) promptly after the consummation by the Borrower or any of its
Subsidiaries of a Mixed Asset Sale, a certificate of a Responsible Officer
of the Borrower setting forth (in reasonable detail) the calculations
required to determine compliance with the requirement of clause (iii) of
the proviso to subsection 9.2(g) and stating that, to the best of such
officer's knowledge, no Default or Event of Default has occurred and is
continuing or would occur as a result of such Mixed Asset Sale;
(h) upon the reasonable request of the Administrative Agent, copies
of any certificates delivered to Westinghouse pursuant to Section 6(a)(1)
of the RealCo First Mortgage Notes;
(i) copies of all material written amendments, waivers or
modifications of the DCBU Supply Agreement (as defined in the U.S. Credit
Agreement); and
(j) promptly, such additional financial and other information as the
Administrative Agent, the Collateral Agent or any Lender may from time to
time reasonably request.
8.3 Collateral Audit. Reimburse the Collateral Agent for any
----------------
reasonable fees or expenses incurred by it in connection with one audit of any
of the Collateral during each twelve month period after the Closing Date
(without duplication of the fees and expenses with respect to a collateral audit
referred to in subsection 7.6 of the U.S. Credit Agreement) provided that, if a
--------
Default or Event of Default shall have occurred and be continuing, the Borrower
shall reimburse the Collateral Agent for any reasonable fees and expenses
incurred by it in connection with any such audit reasonably requested in writing
by the Majority Lenders.
101
8.4 Notices. (a) As soon as possible after a Responsible Officer of
-------
the Borrower knows thereof, promptly give notice to the Administrative Agent,
the Collateral Agent and each Lender of the occurrence of any Default or Event
of Default.
(b) Concurrently with the delivery thereof to the U.S. Administrative
Agent and the U.S. Lenders, promptly give to the Administrative Agent, the
Collateral Agent and each Lender copies of all notices delivered to the U.S.
Administrative Agent, the U.S. Collateral Agent and the U.S. Lenders pursuant to
subsection 7.7 of the U.S. Credit Agreement.
(c) Each notice (or copy of a notice) delivered pursuant to this
subsection shall be accompanied by a statement of a Responsible Officer of the
Borrower setting forth details of the occurrence referred to therein and stating
what action the Borrower proposes to take with respect thereto.
8.5 Landlord Waivers. At its own expense, request, and use
----------------
reasonable efforts to obtain, (i) a Landlord's Waiver from each landlord of each
of the existing facilities in which Inventory of the Borrower is located as of
the Closing Date, and (ii) prior to entering into a lease of a facility in which
Inventory of the Borrower or any of its Subsidiaries will be located on or after
the Closing Date, a Landlord's Waiver from each landlord of any such facility.
To the extent that the Borrower shall have, prior to the Closing Date, obtained
or used reasonable efforts to obtain a Landlord's Waiver in the form of Exhibit
E to the Existing Credit Agreement in respect of any such existing facility, the
Borrower shall be deemed to have satisfied the requirements of this subsection
8.5 with respect to such existing facility.
8.6 Loans to Cover U.S. Borrowing Base Defaults. If at any time Loans
-------------------------------------------
are made hereunder during the continuance of a U.S. Borrowing Base Default,
cause that
102
portion of the proceeds of such Loans which is necessary to cure such U.S.
Borrowing Base Default by repaying and/or cash collateralizing U.S. Extensions
of Credit to be promptly exchanged for U.S. Dollars, dividended, loaned or
advanced to the U.S. Borrower and used by the U.S. Borrower to repay and/or cash
collateralize the U.S. Extensions of Credit.
8.7 Cash Management System. (a) Maintain bank or trust accounts
----------------------
only with the banks or other financial institutions listed on Schedule 8.7 and
such other banks or other financial institutions of which the Administrative
Agent and the Collateral Agent may be notified in writing by the Borrower from
time to time (each, a "Depositary Bank").
---------------
(b) Cause all amounts representing Proceeds (as defined in the
Collateral Covenant Agreement) of Collateral (other than Net Proceeds Allocable
to Payee and Reserved Amounts (as such terms are defined in the Canadian First
Mortgage Notes) and Specified Loss Proceeds (as defined in the Canadian Cash
Collateral Agreement)) which are received by the Borrower or any of its
Subsidiaries from time to time to be promptly deposited into a bank or trust
account maintained with a Depositary Bank (each, a "Depositary Account").
------------------
(c) Instruct each Depositary Bank to transfer, on a daily basis, all
available funds on deposit in each Depositary Account maintained by it to the
Concentration Account established with, and in the name of, the Administrative
Agent pursuant to the Collateral Covenant Agreement; provided that amounts not
--------
in excess of C$100,000 (the "Operating Fund Limit") in the aggregate with
--------------------
respect to all Depositary Accounts may be retained by the Depositary Banks on
deposit in Depositary Accounts and withdrawn from time to time therefrom by the
Borrower or any of its Subsidiaries to pay reasonable costs and expenses
incurred by the Borrower or any of its Subsidiaries; provided that, upon the
--------
occurrence and during the continuance of an Event of Default, the Borrower shall
instruct the Depositary Banks
103
to transfer all available funds in the Depositary Accounts to the Concentration
Account on a daily basis and shall not revoke such instructions unless and until
such Event of Default has been cured or waived.
(d) The Concentration Account shall be under the sole dominion and
control of the Administrative Agent. Subject to applicable law, at any time when
an Event of Default has occurred and is continuing, the Administrative Agent may
apply all or any of the funds on deposit in the Concentration Account to the
payment of the Obligations (as defined in the Collateral Covenant Agreement) in
accordance with Section 4.9 of the Collateral Covenant Agreement. So long as no
Event of Default has occurred and is continuing, the Administrative Agent shall
promptly remit any funds on deposit in the Concentration Account to the General
Fund Account (as defined in the Collateral Covenant Agreement). The Borrower
shall have the right, at any time and from time to time, to withdraw such
amounts from the General Fund Account, and to maintain such balances in the
General Fund Account, as it shall deem to be necessary or desirable.
SECTION 9. NEGATIVE COVENANTS
The Borrower hereby agrees that, from and after the Closing Date and
so long as the Commitments remain in effect, and thereafter until payment in
full of the Notes, all Acceptance Reimbursement Obligations, all Reimbursement
Obligations and any other amount then due and owing to any Lender, the
Collateral Agent or the Administrative Agent hereunder or under any other Loan
Document and termination or expiration of all Letters of Credit, the Borrower
shall not, and shall not permit any of its Subsidiaries to, directly or
indirectly:
9.1 Limitation on Fundamental Changes. Enter into any merger,
---------------------------------
consolidation or amalgamation, or liquidate, wind up or dissolve itself (or
suffer any liquidation or dissolution), or convey, sell, lease, assign,
104
transfer or otherwise dispose of, all or substantially all of its property,
business or assets, except:
(a) any Subsidiary of the Borrower may be merged or consolidated with
or into the Borrower or with or into any one or more wholly owned
Subsidiaries of the Borrower;
(b) any wholly owned Subsidiary may sell, lease, transfer or
otherwise dispose of any or all of its assets (upon voluntary liquidation
or otherwise) to the Borrower or any other wholly owned Subsidiary of the
Borrower; and
(c) in the case of the Borrower or any of its Subsidiaries, as
permitted by subsection 9.2.
9.2 Limitation on Sale of Assets. Convey, sell, lease, assign,
----------------------------
transfer or otherwise dispose of any of its property, business or assets
(including, without limitation, receivables and leasehold interests), whether
now owned or hereafter acquired, or, in the case of any Subsidiary, issue or
sell any shares of such Subsidiary's Capital Stock, to any Person other than the
Borrower or a Subsidiary of the Borrower, except:
(a) the sale or other Disposition of (i) obsolete or worn out
property, whether now owned or hereafter acquired, in the ordinary course
of business or (ii) any Inventory not included as Eligible Inventory by
virtue of clause (f) or (g) of the definition of Eligible Inventory;
(b) the sale or other Disposition of any property (including
Inventory and Intellectual Property) in the ordinary course of business;
(c) the sale or discount without recourse of accounts receivable or
notes receivable arising in the ordinary course of business, or the
conversion or
105
exchange of accounts receivable into or for notes receivable, in connection
with the compromise or collection thereof;
(d) as permitted by subsection 9.1(b);
(e) the abandonment or other Disposition of patents, trademarks or
other Intellectual Property that are, in the reasonable judgment of the
Borrower, no longer economically practicable to maintain or useful in the
conduct of the business of the Borrower and its Subsidiaries taken as a
whole;
(f) Dispositions of any assets or property by the Borrower or any
wholly owned Subsidiary of the Borrower (i) to the Borrower or any wholly
owned Subsidiary of the Borrower or (ii) so long as no Default or Event of
Default has occurred and is continuing, to the U.S. Borrower or any of its
Subsidiaries (other than RealCo), provided that Dispositions of assets or
--------
property in the ordinary course of business to the U.S. Borrower or any of
its Subsidiaries shall not be prohibited pursuant to this clause (ii)
notwithstanding the occurrence and continuance of a Default or an Event of
Default; and
(g) Dispositions of assets in a transaction or series of related
transactions for Net Cash Proceeds not in excess of the Canadian Dollar
equivalent (determined on the basis of the Current Exchange Rate in effect
on the Business Day immediately preceding the date of such Disposition) of
$15,000,000 in any such transaction or series of related transactions,
provided that (i) no Default or Event of Default has occurred or is
--------
continuing or would occur as a result thereof, (ii) such Net Cash Proceeds
are applied to the repayment of the Extensions of Credit pursuant to
subsection 5.2(c) and (iii) notwithstanding the foregoing, no Disposition
constituting a Mixed Asset Sale shall be permitted hereunder if, after
giving effect thereto, the sum of
106
(A) the U.S. Dollar equivalent (determined on the basis of then Current
Exchange Rates from time to time) of the Aggregate Asset Sale Shortfall
Amount and (B) the U.S. Aggregate Asset Sale Shortfall Amount would exceed
U.S.$15,000,000.
9.3 Limitations on Dispositions of Collateral. Convey, sell,
-----------------------------------------
transfer, lease, or otherwise dispose of any of the Collateral, or attempt,
offer or contract to do so, except for (a) mergers, consolidations, sales,
leases, transfers or other Dispositions permitted under subsection 9.1 and (b)
sales or other Dispositions permitted under subsection 9.2, including sales of
Inventory in the ordinary course of business; and the Administrative Agent
shall, and the Lenders hereby authorize the Administrative Agent (or the U.S.
Collateral Agent, as applicable) to, execute such releases of Liens and take
such other actions as the Borrower may reasonably request in connection with the
foregoing or in connection with subsection 8.13 of the U.S. Credit Agreement, as
applicable.
9.4 Creation of Subsidiaries. (A) Create any Subsidiary unless (i)
------------------------
such Subsidiary is wholly owned by the Borrower and/or another wholly owned
Subsidiary of the Borrower and organized under the laws of one of the ten
provinces of Canada and (ii) concurrently with the creation thereof, (a) such
Subsidiary executes and delivers to the Administrative Agent a valid and
enforceable Canadian Subsidiary Guarantee as Guarantor under and as defined
therein, (b) such Subsidiary executes and delivers to the Administrative Agent a
valid and enforceable Canadian Subsidiary Demand Debenture, a Canadian
Subsidiary Demand Debenture Pledge Agreement and a Canadian Subsidiary
Collateral Covenant Agreement, (c) the Borrower and/or such other Subsidiary of
the Borrower that owns any Capital Stock of such Subsidiary executes and
delivers to the Administrative Agent a valid and enforceable Subsidiary Stock
Pledge Agreement and delivers to the Administrative Agent all certificates or
instruments evidencing such Capital Stock owned by it, along with evidence of
any
107
transfer approval required by the directors or shareholders of such Subsidiary
to enable such Capital Stock to be registered in the name of the Administrative
Agent, (d) all actions necessary to perfect the liens created by each Security
Document to which such Subsidiary is or becomes a party have been duly completed
and (e) the Administrative Agent receives a favorable opinion of counsel
(reasonably satisfactory to the Administrative Agent) to such Subsidiary as to
the due organization and valid existence of such Subsidiary, the due
authorization, execution and delivery by, and enforceability against, such
Subsidiary of each Loan Document to which it is or becomes a party and such
other customary matters (including the perfection of the liens contemplated by
the Security Documents to which such Subsidiary is a party) as the
Administrative Agent and its counsel may reasonably request; provided, however,
-------- -------
that the Borrower may acquire a Subsidiary without complying with the foregoing
requirements of this subsection 9.4 so long as the following conditions are
satisfied: (x) the assets of such Subsidiary have a book-value equal to or less
than $20,000,000, (y) at the time of the acquisition of such Subsidiary the
Borrower intends to transfer all of the assets of such Subsidiary to the
Borrower or another Subsidiary that has complied with the foregoing requirements
of this subsection 9.4, and (z) such transfer is completed within sixty days of
the acquisition of such Subsidiary.
(B) Notwithstanding the foregoing, with respect to any Person that is
or becomes a Foreign Subsidiary and that has material assets, such Foreign
Subsidiary shall be permitted hereunder so long as promptly upon the request of
the Administrative Agent, the Borrower shall, or shall cause such Foreign
Subsidiary to: (i) execute and deliver to the Administrative Agent a pledge
agreement as the Administrative Agent shall deem necessary or advisable to grant
to the Administrative Agent, for the benefit of the Lenders, a Lien on the
Capital Stock of such Subsidiary which is owned by the Borrower or any of its
Subsidiaries (provided that in no event shall more than 65% of the Capital Stock
of any such Subsidiary be required to be so
108
pledged), (ii) deliver to the Administrative Agent any certificates representing
such Capital Stock, together with undated stock powers executed and delivered in
blank by a duly authorized officer of the Borrower or such Subsidiary, as the
case may be, and take or cause to be taken all such other actions under the law
of the jurisdiction of organization of such Foreign Subsidiary as may be
necessary or advisable to perfect such Lien on such Capital Stock and (iii) if
requested by the Administrative Agent, deliver to the Administrative Agent legal
opinions relating to the matters described in clauses (i) and (ii) immediately
preceding, which opinions shall be in form and substance, and from counsel,
reasonably satisfactory to the Administrative Agent. In addition, neither the
Borrower nor any Foreign Subsidiary shall, at any time, without the express
written permission of the Administrative Agent and the Majority Lenders, pledge
the Capital Stock of any Foreign Subsidiary to any other Person (other than to
the Administrative Agent on behalf of the Lenders).
9.5 Maintenance of Bank Accounts. Maintain any material bank
----------------------------
accounts outside of Canada (including, without limitation, any such accounts
which could reasonably be deemed to be "principal operating accounts").
9.6 Limitation on Certain Modifications and Certain Contractual
-----------------------------------------------------------
Obligations. Without the prior consent of the Majority Lenders, amend, modify,
-----------
waive or change, or consent to any amendment, modification, waiver or change to,
any Canadian First Mortgage Note Document, (i) if such amendment, modification,
waiver or change would have the effect of making any of the obligations and
duties of the Borrower or any other Loan Party under any Canadian First Mortgage
Note Document materially more onerous than those to which the Borrower or such
Loan Party was subject immediately prior to such amendment, modification, waiver
or change, (ii) in the case of any Canadian First Mortgage Note, if such
amendment, modification, waiver or change would increase the amount, rate or
nature of any interest payable thereunder or require that any interest
thereunder
109
be paid in cash, or require that any principal thereof be paid prior to the
final maturity thereof or (iii) in the case of any Canadian First Mortgage Note
or the Canadian Cash Collateral Agreement, if such amendment, modification,
waiver or change would require any amounts other than Net Proceeds Allocable to
Payee and any Reserved Amounts (as each such term is defined in each of the
Canadian First Mortgages Notes), to the extent such Reserved Amounts are not
paid to the Borrower, to be paid to any holder of any Canadian First Mortgage
Note prior to the date such amounts would otherwise be due and payable
thereunder; provided that, notwithstanding the foregoing, without the prior
--------
written consent of the Majority Lenders, the Borrower shall not, and shall not
permit any Subsidiary to, amend, modify, waive or change, or consent to any
amendment, modification, waiver or change to, paragraphs 1, 3, 5, 6(3), 9(c) or
17 of, or clause (iv) of paragraph 14 of the Canadian First Mortgage Note or
Article V or Section 6.02 of Canadian Cash Collateral Agreement (including any
related defined terms used in any such paragraphs).
SECTION 10. EVENTS OF DEFAULT
If any of the following events shall occur and be continuing:
(a) (i) The Borrower shall fail to pay any principal of any Note,
any Acceptance Reimbursement Obligation or any Reimbursement Obligation
when due in accordance with the terms thereof or hereof; or (ii) the
Borrower shall fail to pay any interest on any Note, or any other amount
payable hereunder, within three Business Days after any such interest or
other amount becomes due in accordance with the terms thereof or hereof; or
(b) Any representation or warranty made or deemed made by the
Borrower or any other Loan Party in this Agreement (other than the
representation and warranty
110
contained in subsection 6.10 hereof) or in any other Loan Document that
does not also constitute a U.S. Loan Document (or in any amendment,
modification or supplement hereto or thereto) or which is contained in any
certificate furnished at any time by or on behalf of the Borrower pursuant
to this Agreement or any such other Loan Document that does not also
constitute a U.S. Loan Document shall prove to have been inaccurate in any
material respect on or as of the date made or deemed made, and, if
susceptible to being cured, such inaccuracy shall not be cured within 30
days after a Responsible Officer of the Borrower knows or should have known
thereof; or
(c) The Borrower or any other Loan Party shall default in the
observance or performance of any agreement contained in Section 9 of this
Agreement, or subsection 2.3 (other than the third and fourth sentences of
such subsection) of the Collateral Covenant Agreement; or
(d) The Borrower or any other Loan Party shall default in the
observance or performance of any other agreement contained in this
Agreement or any other Loan Document that does not also constitute a U.S.
Loan Document (other than as provided in paragraphs (a) through (c) of this
Section), and such default shall continue unremedied for a period ending on
the earlier of (i) the date which is 30 days after a Responsible Officer of
the Borrower shall have discovered or should have discovered such default
and (ii) the date which is 30 days after written notice has been given to
the Borrower by the Administrative Agent or the Majority Lenders; or
(e) The Borrower or any of its Subsidiaries shall (i) default in any
payment of principal of or interest on any Indebtedness (other than the
Notes, the Acceptance Reimbursement Obligations or the Reimbursement
Obligations) in excess of C$1,000,000 or
111
in the payment of any Guarantee Obligation in excess of C$1,000,000, beyond
the period of grace (not to exceed 30 days), if any, provided in the
instrument or agreement under which such Indebtedness or Guarantee
Obligation was created; or (ii) default in the observance or performance of
any other agreement or condition relating to any Indebtedness or Guarantee
Obligation referred to in clause (i) above or contained in any instrument
or agreement evidencing, securing or relating thereto, or any other event
shall occur or condition exist, the effect of which default or other event
or condition is to cause, or to permit the holder or holders of such
Indebtedness or beneficiary or beneficiaries of such Guarantee Obligation
(or a trustee or agent on behalf of such holder or holders or beneficiary
or beneficiaries) to cause, with the giving of notice or lapse of time if
required, such Indebtedness to become due prior to its stated maturity or
such Guarantee Obligation to become payable, and such time shall have
lapsed; or
(f) (i) the Borrower or any other Loan Party shall commence any case,
proceeding or other action (A) under any existing or future law of any
jurisdiction, domestic or foreign, relating to bankruptcy, insolvency,
reorganization or relief of debtors, seeking to have an order for relief
entered with respect to it, or seeking to adjudicate it a bankrupt or
insolvent, or seeking reorganization, arrangement, adjustment, winding-up,
liquidation, dissolution, composition or other relief with respect to it or
its debts, or (B) seeking, or with respect to, the appointment of a
receiver, trustee, custodian, conservator or other similar official for it
or for all or any substantial part of its assets, or the Borrower or any
other Loan Party shall make a general assignment for the benefit of its
creditors; or (ii) there shall be commenced against the Borrower or any
other Loan Party any case, proceeding or other action pursuant to statute,
contract or common law of a nature referred to
112
in clause (i) above which (A) results in the entry of an order for relief
or any such adjudication or appointment or (B) remains undismissed,
undischarged, unstayed or unbonded for a period of 60 days; or (iii) there
shall be commenced against the Borrower or any other Loan Party any case,
proceeding or other action seeking issuance of a warrant of attachment,
execution, distraint or similar process against all or any substantial part
of its assets which results in the entry of an order for any such relief
which shall not have been vacated, discharged, stayed or bonded pending
appeal, within 60 days from the entry thereof; or (iv) the Borrower or any
other Loan Party shall take any corporate action in furtherance of, or
indicating its consent to, approval of, or acquiescence in, any of the acts
set forth in clause (i), (ii), or (iii) above; or (v) the Borrower or any
other Loan Party shall be generally unable to, or shall admit in writing
its general inability to, pay its debts as they become due; or
(g) One or more judgments or decrees shall be entered against the
Borrower or any of its Subsidiaries involving in the aggregate at any time
a liability (net of any insurance or indemnity payments actually received
in respect thereof) of C$1,000,000 or more, and all such judgments or
decrees shall not have been satisfied, vacated, discharged, stayed or
bonded pending appeal within 60 days from the entry thereof; or
(h) (i) Any of the Security Agreements or any Subsidiary Stock
Pledge Agreements shall cease for any reason to be in full force and
effect, or the Borrower or any other Loan Party which is a party to any of
the Security Agreements or any of Subsidiary Stock Pledge Agreements shall
so assert in writing, or (ii) the Lien created by any of the Security
Agreements or any of Subsidiary Stock Pledge Agreements shall cease to be
perfected and enforceable in accordance with its terms
113
or of the same effect as to perfection and priority purported to be created
thereby with respect to any material portion of the Collateral, and the
failure of such Lien to be perfected and enforceable with such priority
shall have continued unremedied for a period of 20 days; or
(i) The U.S. Borrower Guarantee or the Subsidiary Guarantee shall
cease for any reason to be in full force and effect or any Guarantor shall
so assert in writing; or
(j) an "Event of Default" under and as defined in the U.S. Credit
Agreement shall occur and be continuing; or
(k) an "Event of Default" under and as defined in the Canadian First
Mortgage Notes shall occur and be continuing;
then, and in any such event, (A) if such event is an Event of Default specified
in clause (i) or (ii) of paragraph (f) above with respect to the Borrower,
automatically the Commitments shall immediately terminate and the Loans
hereunder (with accrued interest thereon) and all other amounts owing under this
Agreement (including, without limitation, all Acceptance Reimbursement
Obligations (regardless of whether or not such Acceptance Reimbursement
Obligations are then due and payable) and all amounts of L/C Obligations,
whether or not the beneficiaries of the then outstanding Letters of Credit shall
have presented the documents required thereunder) and the Notes shall
immediately become due and payable, and (B) if such event is any other Event of
Default, either or both of the following actions may be taken: (i) with the
consent of the Majority Lenders, the Administrative Agent may, or upon the
request of the Majority Lenders, the Administrative Agent shall, by notice to
the Borrower, declare the Commitments to be terminated forthwith, whereupon the
Commitments shall immediately terminate; and (ii) with the consent of the
114
Majority Lenders, the Administrative Agent may, or upon the request of the
Majority Lenders, the Administrative Agent shall, by notice to the Borrower,
declare the Loans hereunder (with accrued interest thereon) and all other
amounts owing under this Agreement (including, without limitation, all
Acceptance Reimbursement Obligations (regardless of whether or not such
Acceptance Reimbursement Obligations are then due and payable) and all amounts
of L/C Obligations, whether or not the beneficiaries of the then outstanding
Letters of Credit shall have presented the documents required thereunder) and
the Notes to be due and payable forthwith, whereupon the same shall immediately
become due and payable.
With respect to all Letters of Credit with respect to which
presentment for honor shall not have occurred at the time of an acceleration
pursuant to the preceding paragraph and with respect to all outstanding
Acceptance Reimbursement Obligations, the Borrower shall at such time deposit in
a cash collateral account opened by the Administrative Agent an amount equal to
the aggregate then undrawn and unexpired amount of such Letters of Credit and
the aggregate undiscounted face amount of all unmatured Acceptances. The
Borrower hereby grants to the Administrative Agent, for the benefit of the
Issuing Lender, the L/C Participants and the Lenders, a security interest in
such cash collateral to secure all obligations of the Borrower in respect of
such Letters of Credit and outstanding Acceptance Reimbursement Obligations
under this Agreement and the other Loan Documents. The Borrower shall execute
and deliver to the Administrative Agent, for the account of the Issuing Lender,
the L/C Participants and the Lenders, such further documents and instruments as
the Administrative Agent may request to evidence the creation and perfection of
such security interest in such cash collateral account. Amounts held in such
cash collateral account shall be applied by the Administrative Agent to the
payment of (i) drafts drawn under such Letters of Credit and (ii) maturing
Acceptances, and the unused portion thereof after all such Letters of Credit
shall have expired or been
115
fully drawn upon and all such Acceptances shall have matured, if any, shall be
applied to repay other obligations of the Borrower hereunder and under the
Notes. After all such Letters of Credit shall have expired or been fully drawn
upon, all Reimbursement Obligations and Acceptance Reimbursement Obligations
shall have been satisfied and all other obligations of the Borrower hereunder
and under the Notes shall have been paid in full, the balance, if any, in such
cash collateral account shall be returned to the Borrower.
Except as expressly provided above in this Section, presentment,
demand, protest and all other notices of any kind are hereby expressly waived.
SECTION 11. THE AGENT
11.1 Appointment. Each Lender hereby irrevocably designates and
-----------
appoints (i) Bank of Nova Scotia as the Administrative Agent and (ii) Barclays
as Collateral Agent of such Lender hereunder and under the other Loan Documents.
The term "Agent", when used in this Section 11, shall refer to each of (i) Bank
of Nova Scotia in its capacity as Administrative Agent and (ii) Barclays in its
capacity as Collateral Agent. Each such Lender irrevocably authorizes Bank of
Nova Scotia to act as Administrative Agent and Barclays to act as Collateral
Agent of such Lender, to take such action on its behalf under the provisions of
this Agreement and the other Loan Documents and to exercise such powers and
perform such duties as are expressly delegated to it as Agent by the terms of
this Agreement and the other Loan Documents, together with such other powers as
are reasonably incidental thereto. For greater certainty and without limiting
the powers of the Administrative Agent herein, and solely for the purposes of
constituting security on any property located in the Province of Quebec
(including, without limitation, the Quebec Moveable Hypothec), the Borrower,
each Lender and the Administrative Agent hereby acknowledge that the
Administrative Agent shall
116
be the holder of a power of attorney for the Lenders, and the Administrative
Agent accepts such appointment. The execution of an Assignment and Acceptance by
any Assignee pursuant to Section 12.6 hereof shall constitute ratification of
the power of attorney constituted hereby. Notwithstanding any provision to the
contrary elsewhere in this Agreement, neither Agent shall have any duties or
responsibilities, except those expressly set forth herein, or any fiduciary
relationship with any Lender, and no implied covenants, functions,
responsibilities, duties, obligations or liabilities shall be read into this
Agreement or any other Loan Document or otherwise exist against either Agent.
Each Lender acknowledges and consents (i) that the U.S. Administrative Agent is
an Affiliate of the Administrative Agent, (ii) the Collateral Agent is also
acting as U.S. Collateral Agent and (iii) to the appointment by the
Administrative Agent of the U.S. Collateral Agent to act on its behalf and on
behalf of the Lenders under the U.S. Security Documents (other than the U.S.
Borrower Canadian Stock Pledge Agreement).
11.2 Delegation of Duties. Each Agent may execute any or all of its
--------------------
duties under this Agreement and the other Loan Documents by or through agents
(which may include its Affiliates or attorneys-in-fact) and shall be entitled to
advice of counsel concerning all matters pertaining to such duties. For the
purposes of this Section 11 and all subsections thereof the word "Agent" shall
be deemed to include any Affiliate or attorney-in-fact thereof. Neither Agent
shall be responsible for the negligence or misconduct of any agents or
attorneys-in-fact selected by it with reasonable care.
11.3 Exculpatory Provisions. Neither Agent nor any officer,
----------------------
director, employee, agent, attorney-in-fact or Affiliate of either Agent shall
be (i) liable for any action lawfully taken or omitted to be taken by it or such
Person under or in connection with this Agreement or any other Loan Document
(except for its or such Person's gross negligence or willful misconduct) or (ii)
responsible in any manner to
117
any of the Lenders for any recitals, statements, representations or warranties
made by any Loan Party or any officer thereof contained in this Agreement or any
other Loan Document or in any certificate, report, statement or other document
referred to or provided for in, or received by either Agent under or in
connection with, this Agreement or any other Loan Document or for the value,
validity, effectiveness, genuineness, enforceability or sufficiency of this
Agreement or the Notes or any other Loan Document or for any failure of the
Borrower or any other Loan Party to perform its obligations hereunder or
thereunder. Neither Agent shall be under any obligation to any Lender to
ascertain or to inquire as to the observance or performance of any of the
agreements contained in, or conditions of, this Agreement or any other Loan
Document, or to inspect the properties, books or records of the Borrower or any
other Loan Party.
11.4 Reliance by Agent. Each Agent shall be entitled to rely, and
-----------------
shall be fully protected in relying, upon any Note, writing, resolution, notice,
consent, certificate, affidavit, letter, telecopy, telex or teletype message,
statement, order or other document or conversation believed by it to be genuine
and correct and to have been signed, sent or made by the proper Person or
Persons and upon advice and statements of legal counsel (including, without
limitation, counsel to the Borrower), independent accountants and other experts
selected by such Agent. Each Agent may deem and treat the payee of any Note as
the owner thereof for all purposes unless a written notice of assignment or
transfer thereof shall have been filed with the Administrative Agent. Each
Agent shall be fully justified as between itself and the Lenders in failing or
refusing to take any action under this Agreement or any other Loan Document
unless it shall first receive such advice or concurrence of the requisite
Lenders (and, if applicable, the requisite U.S. Lenders) as it deems appropriate
or it shall first be indemnified to its satisfaction by the Lenders against any
and all liability and expense which may be incurred by it by reason of taking
118
or continuing to take any such action. Each Agent shall in all cases be fully
protected in acting, or in refraining from acting, under this Agreement and the
Notes and the other Loan Documents in accordance with a request of the requisite
Lenders, and such request and any action taken or failure to act pursuant
thereto shall be binding upon all the Lenders and all future holders of the
Notes.
11.5 Notice of Default. Neither Agent shall be deemed to have
-----------------
knowledge or notice of the occurrence of any Default or Event of Default
hereunder or of a U.S. Default or a U.S. Event of Default under the U.S. Credit
Agreement unless such Agent has received notice from a Lender or the Borrower
referring to this Agreement, describing such Default or Event of Default or U.S.
Default or U.S. Event of Default and stating that such notice is a "notice of
default". In the event that an Agent receives such a notice, such Agent shall
give notice thereof to the Lenders. Each Agent shall take such action reasonably
promptly with respect to such Default or Event of Default or U.S. Default or
U.S. Event of Default as shall be reasonably directed by the Majority Lenders;
provided that unless and until such Agent shall have received such directions,
--------
such Agent may (but shall not be obligated to) take such action, or refrain from
taking such action, with respect to such Default or Event of Default as it shall
deem advisable in the best interests of the Lenders; and provided, further, that
in the case of any U.S. Default or U.S. Event of Default such Agent shall be
entitled to take such action provided for under the applicable U.S. Loan
Documents.
11.6 Non-Reliance on Agent and Other Lenders. Each Lender expressly
---------------------------------------
acknowledges that neither Agent nor any officer, director, employee, agent,
attorney-in-fact or Affiliate of either Agent has made any representations or
warranties to it and that no act by either Agent hereinafter taken, including
any review of the affairs of the Borrower or any other Loan Party, shall be
deemed to constitute any representation or warranty by such Agent to any Lender.
Each Lender represents to each Agent that it has,
119
independently and without reliance upon either Agent or any other Lender, and
based on such documents and information as it has deemed appropriate, made its
own appraisal of and investigation into the business, operations, property,
financial and other condition and creditworthiness of the Borrower and the other
Loan Parties and made its own decision to make its Loans hereunder and enter
into this Agreement. Each Lender also represents that it will, independently and
without reliance upon either Agent or any other Lender, and based on such
documents and information as it shall deem appropriate at the time, continue to
make its own credit analysis, appraisals and decisions in taking or not taking
action under this Agreement and the other Loan Documents, and to make such
investigation as it deems necessary to inform itself as to the business,
operations, property, financial and other condition and creditworthiness of the
Borrower and the other Loan Parties. Except for notices, reports and other
documents expressly required to be furnished to the Lenders by an Agent
hereunder, such Agent shall not have any duty or responsibility to provide any
Lender with any credit or other information concerning the business, operations,
property, condition (financial or otherwise), prospects or creditworthiness of
the Borrower or any other Loan Party which may come into the possession of such
Agent or any of its respective officers, directors, employees, agents,
attorneys-in-fact or Affiliates.
11.7 Indemnification. Each Lender agrees to indemnify each Agent in
---------------
its respective capacities as such (to the extent not reimbursed by the Borrower
and without limiting the obligation of the Borrower or any other Loan Party to
do so), ratably according to its Commitment Percentage in effect on the date on
which indemnification is sought under this subsection (or, if indemnification is
sought after the date upon which the Commitments shall have terminated and the
Loans, Reimbursement Obligations and Acceptance Reimbursement Obligations shall
have been paid in full, ratably in accordance with its Commitment Percentage
immediately prior to such date), from and against any and all liabilities,
obligations, losses, damages, penalties,
120
actions, judgments, suits, costs, expenses or disbursements of any kind
whatsoever which may at any time (including, without limitation, at any time
following the payment of the Notes) be imposed on, incurred by or asserted
against such Agent in any way relating to or arising out of this Agreement, any
of the other Loan Documents or any documents contemplated by or referred to
herein or therein or the transactions contemplated hereby or thereby or any
action taken or omitted by such Agent under or in connection with any of the
foregoing; provided that no Lender shall be liable for the payment of any
--------
portion of such liabilities, obligations, losses, damages, penalties, actions,
judgments, suits, costs, expenses or disbursements resulting solely from the
gross negligence or willful misconduct of such Agent. The agreements in this
subsection shall survive the payment of the Notes and all other amounts payable
hereunder.
11.8 Agent in Its Individual Capacity. Each Agent and its Affiliates
--------------------------------
may make loans to, accept deposits from and generally engage in any kind of
business with the Borrower and/or the other Loan Parties as though such Agent
was not an Agent hereunder and under the other Loan Documents. With respect to
the Loans made or renewed by an Agent and any Note issued to it and with respect
to any Acceptance completed and accepted by it or any Letter of Credit issued or
participated in by it, such Agent shall have the same rights and powers under
this Agreement and the other Loan Documents as any Lender and may exercise the
same as though it were not an Agent, and the terms "Lender" and "Lenders" shall
include such Agent in its individual capacity.
11.9 Successor Agent. Each of the Administrative Agent and the
---------------
Collateral Agent may resign as such upon 30 days' notice to the Lenders. If an
Agent shall resign as Administrative Agent or Collateral Agent (as applicable)
under this Agreement and the other Loan Documents, then the Majority Lenders
shall appoint from among the Lenders a successor agent for the Lenders, which
successor agent shall
121
be approved by the Borrower, whereupon such successor agent shall succeed to the
rights, powers and duties of the resigning Administrative Agent or Collateral
Agent (as applicable), and the term "Administrative Agent" or "Collateral Agent"
(as applicable) shall mean such successor agent effective upon such appointment
and approval, and the former Agent's rights, powers and duties as Administrative
Agent or Collateral Agent (as applicable) shall be terminated, without any other
or further act or deed on the part of such former Agent or any of the parties to
this Agreement or any holders of the Notes; provided that the resigning Agent
--------
shall execute all documents which the replacement Agent deems reasonably
necessary or advisable to effect such substitution. After any resigning Agent's
resignation as Administrative Agent or Collateral Agent (as applicable), the
provisions of this subsection shall inure to its benefit as to any actions taken
or omitted to be taken by it while it was Administrative Agent or Collateral
Agent (as applicable) under this Agreement and the other Loan Documents.
11.10 Swing Line Lender. The provisions of this Section 11 shall
-----------------
apply to the Swing Line Lender in its capacity as such to the same extent that
such provisions apply to the Agent.
11.11 Co-Agents. Each party hereto agrees that the Co-Agents have no
---------
rights or obligations hereunder or under the other Credit Documents in their
respective capacities as such.
SECTION 12. MISCELLANEOUS
12.1 Amendments and Waivers. Neither this Agreement, any Note or any
----------------------
other Loan Document, nor any terms hereof or thereof may be amended,
supplemented or modified except in accordance with the provisions of this
subsection 12.1. The Majority Lenders may, or, with the written consent of the
Majority Lenders, the Administrative
122
Agent may, from time to time, (a) enter into with the Borrower and the other
Loan Parties written amendments, supplements or modifications hereto and to the
Notes, the Applications, the Drafts, the Acceptances, the Acceptance Notes, the
Security Agreements, the Canadian Subsidiary Guarantees, the Collateral Covenant
Agreement, the Canadian Subsidiary Collateral Covenant Agreements and the
Canadian Subsidiary Stock Pledge Agreements (collectively, the "Principal Loan
--------------
Documents") for the purpose of adding any provisions to this Agreement, the
---------
Notes or the other Principal Loan Documents or changing in any manner the rights
or obligations of the Lenders or of the Borrower and the other Loan Parties
hereunder or thereunder or (b) waive at the Borrower's request, on such terms
and conditions as the Majority Lenders or the Administrative Agent, as the case
may be, may specify in such instrument, any of the requirements of this
Agreement, the Notes or the other Principal Loan Documents or any Default or
Event of Default and its consequences; provided, however, that no such waiver
-------- -------
and no such amendment, supplement or modification shall
(i) reduce the amount or extend the scheduled date of maturity
of any Note, Acceptance Reimbursement Obligation or any Reimbursement
Obligation or of any scheduled installment thereof, or reduce the stated
rate of any interest or fee payable hereunder or extend the scheduled date
of any payment thereof or increase the amount or extend the expiration date
of any Lender's Commitment, in each case without the consent of each Lender
affected thereby;
(ii) amend, supplement, modify or waive any provision of this
subsection 12.1 or reduce the percentage specified in the definition of
"Majority Lenders" or "Supermajority Lenders", or consent to the assignment
or transfer by the Borrower or any other Loan Party of any of its rights
and obligations under this Agreement and the other Principal Loan Documents
or increase the amount of any Lender's Commitment or increase the
percentages set forth as the advance rates
123
in the definition of "Borrowing Base", in each case without the written
consent of all the Lenders;
(iii) release all or substantially all of the Collateral without
the consent of the Supermajority Lenders;
(iv) amend, supplement, modify or waive any provision of
Section 11 or any other provision of this Agreement governing the rights or
obligations of the Administrative Agent and the Collateral Agent without
the written consent of the then Administrative Agent and the then
Collateral Agent;
(v) amend, supplement, modify or waive (a) the order of
application of prepayments specified in subsection 5.2 without the consent
of the Swing Line Lender and each Lender adversely affected thereby or (b)
any provision of any Principal Loan Document which specifies the order of
application by the Administrative Agent of proceeds of Collateral upon the
occurrence and during the continuance of an Event of Default without the
consent of the Administrative Agent, the Collateral Agent and each Lender;
(vi) amend, supplement, modify or waive any provision of the
Swing Line Note or of subsection 2.5 or any other provision of this
Agreement governing the rights and obligations of the Swing Line Lender or
the definitions used therein without the written consent of the Swing Line
Lender and, in the case of the Swing Line Note, each Lender, if any, which
holds a participation therein pursuant to subsection 2.5(d); and
(vii) amend, supplement, modify or waive any provision of the
Letters of Credit, the Applications relating thereto and the L/C
Obligations or of Section 4 or any other provision of this Agreement
governing the rights and obligations of the Issuing Lender or the
124
definitions used therein without the written consent of the Issuing Lender,
and, in the case of the Letters of Credit and the L/C Obligations, each
affected L/C Participant.
Any waiver and any amendment, supplement, modification or waiver pursuant to
this subsection 12.1 shall apply to each of the Lenders and shall be binding
upon the Borrower, the other Loan Parties, the Lenders, the Administrative
Agent, the Collateral Agent and all future holders of the Notes. In the case of
any waiver, the Borrower, the other Loan Parties, the Lenders, the Collateral
Agent and the Administrative Agent shall be restored to their former position
and rights hereunder and under the outstanding Notes and any other Loan
Documents, and any Default or Event of Default waived shall be deemed to be
cured and not continuing; but no such waiver shall extend to any subsequent or
other Default or Event of Default, or impair any right consequent thereon. Each
Loan Document (other than the Principal Loan Documents) may be amended,
supplemented, modified or waived only in accordance with the provisions of
subsection 11.1 of the U.S. Credit Agreement.
12.2 Notices. All notices, requests and demands to or upon the
-------
respective parties hereto to be effective shall be in writing (including by
telecopy), and, unless otherwise expressly provided herein, shall be deemed to
have been duly given or made when delivered by hand, or three days after being
deposited in the mail, postage prepaid, or, in the case of telecopy notice, when
received, or, in the case of delivery by a nationally recognized overnight
courier, when received, addressed as follows in the case of the Borrower, the
Collateral Agent or the Administrative Agent and as set forth in Schedule 1
hereto in the case of the other parties hereto, or to such other address as may
be hereafter notified by the respective parties hereto and any future holders of
the Notes:
125
The Borrower: 000 Xxxx Xxxx
Xxxxxxx, Xxxxxxx X0X 0X0
Xxxxxx
Attention: Xxxxxxx Xxxxxxxx
Telecopy: (000) 000-0000
with a copy to: Commerce Court
Suite 000
Xxxx Xxxxxxx Xxxxxx
Xxxxxxxxxx, Xxxxxxxxxxxx 00000
Attention: Xxxxxxx X. Xxxxxxxxxxx
Telecopy: (000) 000-0000
Osler, Xxxxxx & Harcourt
1 First Canadian Place
000 Xxxx Xxxxxx West,
66th Floor
Toronto, Ontario M5X 1B8
Canada
Attention: Xxxxxx Xxxxx
Telecopy: (000) 000-0000
Debevoise & Xxxxxxxx
000 Xxxxx Xxxxxx
Xxx Xxxx, Xxx Xxxx 00000
Attention: Xxxxxxx X. Xxxxxxx
Telecopy: (000) 000-0000
The Administrative
Agent: The Bank of Nova Scotia
Scotia Plaza Branch
00 Xxxx Xxxxxx Xxxx
Xxxxxxx, Xxxxxxx
Xxxxxx X0X 0X0
Attention: Xxxxxxx XxXxxxxx
Telecopy: (000) 000-0000
126
The Collateral
Agent: Barclays Bank PLC
000 Xxxxxxxx, 00xx Xxxxx
Xxx Xxxx, Xxx Xxxx 00000
Attention: Xxxx Xxxxxxxxxx
Telecopy: (000) 000-0000
provided that any notice, request or demand to or upon the Administrative Agent
--------
or the Lenders pursuant to subsection 2.3, 2.5, 3.6, 5.2 or 5.5 shall not be
effective until received; provided further, that any notice, request or demand
-------- -------
relating to the Borrowing Base, including, without limitation, delivery by the
Borrower of the Monthly Borrowing Base Certificate in accordance with subsection
8.2(c), shall not be effective unless a copy thereof is sent to the
Administrative Agent and the Collateral Agent.
12.3 No Waiver; Cumulative Remedies. No failure to exercise and no
------------------------------
delay in exercising, on the part of the Borrower, the Administrative Agent, the
Collateral Agent or any Lender, any right, remedy, power or privilege hereunder
or under the other Loan Documents shall operate as a waiver thereof; nor shall
any single or partial exercise of any right, remedy, power or privilege
hereunder or hereunder preclude any other or further exercise thereof or the
exercise of any other right, remedy, power or privilege. The rights, remedies,
powers and privileges provided herein and in the other Loan Documents are
cumulative and not exclusive of any rights, remedies, powers and privileges
provided by law.
12.4 Survival of Representations and Warranties. All representations
------------------------------------------
and warranties made hereunder and in the other Loan Documents (or in any
amendment, modification or supplement hereto or thereto) and in any certificate
delivered pursuant hereto or such other Loan Documents shall survive the
execution and delivery of this Agreement and the Notes and the making of the
Loans and the other Extensions of Credit hereunder.
127
12.5 Payment of Expenses and Taxes. The Borrower agrees (a) to pay
-----------------------------
or reimburse the Administrative Agent and the Collateral Agent for all their
respective reasonable out-of-pocket costs and expenses incurred in connection
with the preparation, execution and delivery of, and any amendment, supplement,
waiver or modification to, this Agreement, the Notes and the other Loan
Documents and any other documents prepared in connection herewith or therewith,
and the consummation and administration of the transactions (including the
syndication of the Commitments) contemplated hereby and thereby, including,
without limitation, the reasonable fees and disbursements of a single counsel
(and any special or local counsel retained by such counsel to assist it) to the
Administrative Agent and the Collateral Agent, (b) to pay or reimburse each
Lender, the Administrative Agent and the Collateral Agent for all their
respective reasonable costs and expenses (in the case of taxes, limited to
stamp, excise and other similar taxes) incurred in connection with the
enforcement or preservation of any rights under this Agreement, the Notes, the
other Loan Documents and any such other documents, including, without
limitation, the reasonable fees and disbursements of counsel to the
Administrative Agent, the Collateral Agent and the Lenders, and any reasonable
Environmental Costs arising out of or in way relating to any Loan Party or any
property in which any Loan Party has had any interest at any time, (c) to pay,
indemnify, and hold each Lender, the Collateral Agent and the Administrative
Agent harmless from, any and all recording and filing fees and any and all
liabilities with respect to, or resulting from any delay in paying, stamp,
excise and other similar taxes, if any, which may be payable or determined to be
payable in connection with the execution and delivery of, or consummation or
administration of any of the transactions contemplated by, or any amendment,
supplement or modification of, or any waiver or consent under or in respect of,
this Agreement, the Notes, the other Loan Documents and any such other
documents, and (d) to pay, indemnify, and hold each Lender, the Administrative
Agent and the Collateral Agent (and their respective directors, officers,
employees, agents and
128
successors harmless from and against any and all other liabilities, obligations,
losses, damages, penalties, actions, judgments, suits, costs, expenses or
disbursements of any kind or nature whatsoever (whether or not caused by any
Lender's, the Administrative Agent's, the Collateral Agent's or any of their
respective directors', officers', employees', agents', successors' or assigns'
negligence (other than gross negligence) and including, without limitation, the
reasonable fees and disbursements of counsel to the Administrative Agent, the
Collateral Agent and the Lenders) with respect to the execution, delivery,
enforcement, performance and administration of this Agreement, the Notes, the
other Loan Documents and any such other documents (regardless of whether the
Administrative Agent, the Collateral Agent or any Lender is a party to the
litigation or other proceeding giving rise thereto), including, without
limitation, any of the foregoing relating to the violation of, noncompliance
with or liability under, any Environmental Laws or any orders, requirements or
demands of Governmental Authorities related thereto applicable to the operations
of the Borrower, any of its Subsidiaries or any of the Properties (all the
foregoing in this clause (d), collectively, the "indemnified liabilities"),
----------- -----------
provided, that the Borrower shall have no obligation hereunder to
--------
the Administrative Agent or any Lender with respect to Environmental Costs or
indemnified liabilities to the extent such Environmental Costs or liabilities
arise from (i) the gross negligence or willful misconduct of the Administrative
Agent, the Collateral Agent or any such Lender (or any of their respective
directors, officers, employees, agents or successors) or (ii) legal proceedings
commenced against the Administrative Agent, the Collateral Agent or any such
Lender by any security holder or creditor thereof arising out of and based upon
rights afforded any such security holder or creditor solely in its capacity as
such. Notwithstanding the foregoing, except as provided in clauses (b) and (c)
above, the Borrower shall have no obligation under this subsection 12.5 to the
Administrative Agent, the Collateral Agent or any Lender (or any of their
respective directors, officers, employees,
129
agents or successors) with respect to any tax, levy, impost, duty, charge, fee,
deduction or withholding imposed, levied, collected, withheld or assessed by any
Governmental Authority. The agreements in this subsection shall survive
repayment of the Notes, the Reimbursement Obligations, the Acceptance
Reimbursement Obligations and the Acceptance Notes and all other amounts payable
hereunder.
12.6 Successors and Assigns; Participations and Assignments. (a)
------------------------------------------------------
This Agreement shall be binding upon and inure to the benefit of the Borrower,
the Lenders, the Administrative Agent, the Collateral Agent, all future holders
of the Notes and their respective successors and permitted assigns, except that
the Borrower may not assign or transfer any of its rights or obligations under
this Agreement without the prior written consent of each Lender.
(b) Any Lender may, in the ordinary course of its commercial banking
business and in accordance with applicable law, at any time sell to one or more
banks or other entities ("Participants") participating interests in any Loan
------------
owing to such Lender, any Note held by such Lender, any Commitment of such
Lender or any other interest of such Lender hereunder and under the other Loan
Documents, provided that such Participant shall be a Qualifying Canadian
--------
Institution. In the event of any such sale by a Lender of a participating
interest to a Participant, such Lender's obligations under this Agreement to the
other parties to this Agreement shall remain unchanged, such Lender shall remain
solely responsible for the performance thereof, such Lender shall remain the
holder of any such Note for all purposes under this Agreement and the other Loan
Documents, and the Borrower, the Collateral Agent and the Administrative Agent
shall continue to deal solely and directly with such Lender in connection with
such Lender's rights and obligations under this Agreement and the other Loan
Documents. Any agreement pursuant to which any Lender shall sell any such
participating interest shall provide that such Lender shall retain the sole
right and responsibility to exercise such Lender's rights and enforce
130
the Borrower's obligations hereunder, including the right to consent to any
amendment, supplement, modification or waiver of any provision of this Agreement
or any of the other Loan Documents, provided that such participation agreement
--------
may provide that such Lender will not agree to any amendment, supplement,
modification or waiver described in clause (i) or (ii) of the proviso to the
second sentence of subsection 12.1 without the consent of the Participant. The
Borrower agrees that if amounts outstanding under this Agreement and the Notes
are due or unpaid, or shall have been declared or shall have become due and
payable upon the occurrence of an Event of Default, each Participant shall be
deemed to have the right of setoff in respect of its participating interest in
amounts owing under this Agreement and any Note to the same extent as if the
amount of its participating interest were owing directly to it as a Lender under
this Agreement or any Note, provided that, in purchasing such participating
--------
interest, such Participant shall be deemed to have agreed to share with the
Lenders the proceeds thereof as provided in subsection 12.7(a) as fully as if it
were a Lender hereunder. The Borrower agrees that each Lender shall be entitled
to the benefits of subsections 5.7, 5.8 and 5.9 and 12.1 without regard to
whether it has granted any participating interests, and that all amounts payable
to a Lender under subsections 5.7, 5.8 and 5.9 shall be determined as if such
Lender had not granted any such participating interests.
(c) Any Lender may, in the ordinary course of its commercial banking
business and in accordance with applicable law, at any time and from time to
time assign to any Lender, or any Affiliate thereof or, with the prior written
consent of the Borrower and the Administrative Agent, to an additional bank or
financial institution (an "Assignee") all or any part of its rights and
--------
obligations under this Agreement and the Notes, including, without limitation,
its Commitments, L/C Obligations, Acceptances, Acceptance Notes and Loans,
pursuant to an Assignment and Acceptance, substantially in the form of Exhibit
F, executed by such Assignee, such assigning Lender (and, in the case of
131
an Assignee that is not then a Lender, a U.S. Lender or an Affiliate thereof, by
the Borrower and the Administrative Agent) and delivered to the Administrative
Agent for its acceptance and recording in the Register; provided that (i) the
--------
Assignee is a Qualifying Canadian Institution, (ii) in the case of any such
transfer of the full amount of such assigning Lender's Commitment to an
additional bank or financial institution, the consent of the Administrative
Agent and the Borrower shall not be unreasonably withheld, (iii) if any Lender
assigns all or any part of its rights and obligations under this Agreement to
one of its Affiliates in connection with or in contemplation of the sale of its
interest in such Affiliate, the Borrower's prior written consent (not to be
unreasonably withheld) shall be required for such assignment and (iv) if any
Lender assigns a part of its rights and obligations under this Agreement to an
Assignee, such Lender shall assign proportionate interests in its Commitment,
Revolving Credit Loans, Acceptances, Acceptance Notes, L/C Obligations,
participations in Swing Line Loans and Letters of Credit and other rights and
obligations hereunder to such Assignee; and provided, further, that no Lender
--------
shall be permitted to make an assignment of its rights and obligations hereunder
to an Assignee unless the parent, a subsidiary or an affiliate of such Lender
which is party to the U.S. Credit Agreement makes a concurrent and proportionate
assignment of its rights and obligations thereunder to the proposed Assignee or
the parent, a subsidiary or an affiliate of the proposed Assignee, such
assignment to be effected in accordance with subsection 11.6(c) of the U.S.
Credit Agreement. Upon such execution, delivery, acceptance and recording, from
and after the effective date determined pursuant to such Assignment and
Acceptance, (x) the Assignee thereunder shall be a party hereto and, to the
extent provided in such Assignment and Acceptance, have the rights and
obligations of a Lender hereunder with a Commitment as set forth therein, and
(y) the assigning Lender thereunder shall be released from its obligations under
this Agreement to the extent that such obligations shall have been expressly
assumed by the Assignee pursuant to such Assignment and
132
Acceptance (and, in the case of an Assignment and Acceptance covering all or the
remaining portion of an assigning Lender's rights and obligations under this
Agreement, such assigning Lender shall cease to be a party hereto).
Notwithstanding the foregoing, no Assignee, which as of the date of any
assignment to it pursuant to this subsection 12.6(c) would be entitled to
receive any greater payment under subsection 5.8 or 5.9, than the assigning
Lender would have been entitled to receive as of such date under such
subsections with respect to the rights assigned, shall be entitled to receive
such payments unless the Borrower has consented in writing to the assignment.
(d) The Administrative Agent shall maintain at its address referred
to in subsection 12.2 a copy of each Assignment and Acceptance delivered to it
and a register (the "Register") for the recordation of the names and addresses
--------
of the Lenders and the Commitment of, and principal amount of the Loans owing
to, each Lender from time to time. The entries in the Register shall be
conclusive, in the absence of manifest error, and the Borrower, the
Administrative Agent, the Collateral Agent and the Lenders may treat each Person
whose name is recorded in the Register as the owner of the Loan recorded therein
for all purposes of this Agreement. The Register shall be available for
inspection by the Borrower, the Collateral Agent or any Lender at any reasonable
time and from time to time upon reasonable prior notice.
(e) Upon its receipt of an Assignment and Acceptance executed by an
assigning Lender and an Assignee (and, in the case of an Assignee that is not
then a Lender, or an Affiliate thereof, executed by the Borrower and the
Administrative Agent), together with payment to the Administrative Agent of a
registration and processing fee of C$1,500 (in the case of any assignment to a
Lender, an Affiliate thereof) and C$3,500 (in the case of any other assignment),
the Administrative Agent shall (i) promptly accept such Assignment and
Acceptance and (ii) on the effective date determined pursuant thereto record the
133
information contained therein in the Register and give prompt notice of such
acceptance and recordation to the Lenders and the Borrower. On or prior to such
effective date, the assigning Lender shall surrender the outstanding Notes held
by it all or a portion of which are being assigned, and the Borrower, at its own
expense, shall execute and deliver to the Administrative Agent (in exchange for
the outstanding Notes of the assigning Lender) a new Revolving Credit Note
and/or Swing Line Note, as the case may be, to the order of such Assignee and
representing the obligation of the Borrower to pay an amount equal to (i) in the
case of a Revolving Credit Note, the lesser of (A) the amount of such Assignee's
Commitment and (B) the aggregate principal amount of all Revolving Credit Loans
made by such Assignee, and (ii) in the case of a Swing Line Note, the lesser of
(A) the Swing Line Commitment and (B) the aggregate principal amount of all
Swing Line Loans made by such Assignee, in each case with respect to the
relevant Commitment after giving effect to such Assignment and Acceptance and,
if the assigning Lender has retained a Commitment hereunder, a new Revolving
Credit Note and/or Swing Line Note, as the case may be, to the order of the
assigning Lender and representing the obligation of the Borrower to pay an
amount equal to (i) in the case of a Revolving Credit Note, the lesser of (A)
the amount of such Lender's Commitment and (B) the aggregate principal amount of
all Revolving Credit Loans made by such Lender, and (ii) in the case of a Swing
Line Note, the lesser of (A) the Swing Line Commitment and (B) the aggregate
principal amount of all Swing Line Loans made by such Lender, in each case with
respect to the relevant Commitment after giving effect to such Assignment and
Acceptance. Such new Notes shall be dated the Closing Date and shall otherwise
be in the form of the Note replaced thereby. The Notes surrendered by the
assigning Lender shall be returned by the Administrative Agent to the Borrower
marked "cancelled".
(f) The Borrower authorizes each Lender to disclose to any
Participant or Assignee (each, a "Transferee") and any prospective Transferee,
----------
subject to the
134
provisions of subsection 12.15, any and all financial information in such
Lender's possession concerning the Borrower and its Affiliates which has been
delivered to such Lender by or on behalf of the Borrower pursuant to this
Agreement or which has been delivered to such Lender by or on behalf of the
Borrower in connection with such Lender's credit evaluation of the Borrower and
its Affiliates prior to becoming a party to this Agreement. No assignment or
participation made or purported to be made to any Transferee shall be effective
without the prior written consent of the Borrower if it would require the
Borrower to make any filing with any Governmental Authority or qualify any Loan
or Note under the laws of any jurisdiction.
12.7 Adjustments; Set-off. (a) If any Lender (a "benefitted Lender")
-------------------- -----------------
shall at any time receive any payment of all or part of its Revolving Credit
Loans, Acceptance Reimbursement Obligations or the Reimbursement Obligations
owing to it, or interest thereon, or receive any collateral (including, without
limitation, any Bank Act Security) in respect thereof (whether voluntarily or
involuntarily, by set-off, pursuant to events or proceedings of the nature
referred to in Section 10(f), or otherwise), in a greater proportion than any
such payment to or collateral received by any other Lender, if any, in respect
of such other Lender's Revolving Credit Loans, Acceptance Reimbursement
Obligations or the Reimbursement Obligations, as the case may be, owing to it,
or interest thereon, such benefitted Lender shall purchase for cash from the
other Lenders a participating interest (except that, in the case of any Bank Act
Security, such benefitted Lenders shall instead so purchase an assignment) in
such portion of each such other Lender's Revolving Credit Loans, Acceptance
Reimbursement Obligations or the Reimbursement Obligations, as the case may be,
owing to it or (other than with respect to Bank Act Security provided to it
hereunder), shall provide such other Lenders with the benefits of any such
collateral, or the proceeds thereof, as shall be necessary to cause such
benefitted Lender to share the excess payment or benefits of such collateral or
proceeds ratably with each of the
135
Lenders; provided, however, that if all or any portion of such excess payment or
-------- -------
benefits is thereafter recovered from such benefitted Lender, such purchase
shall be rescinded, and the purchase price and benefits returned, to the extent
of such recovery, but without interest.
(b) In addition to any rights and remedies of the Lenders provided by
law, each Lender shall have the right, without prior notice to the Borrower, any
such notice being expressly waived by the Borrower to the extent permitted by
applicable law, upon the occurrence of an Event of Default under Section 10(a)
to set-off and appropriate and apply against any amount then due and payable by
the Borrower hereunder or under the other Loan Documents any and all deposits
(general or special, time or demand, provisional or final), in any currency, and
any other credits, indebtedness or claims, in any currency, in each case whether
direct or indirect, absolute or contingent, matured or unmatured, at any time
held or owing by such Lender or any branch or agency thereof to or for the
credit or the account of the Borrower. Each Lender agrees promptly to notify
the Borrower and the Administrative Agent after any such set-off and application
made by such Lender, provided that the failure to give such notice shall not
--------
affect the validity of such set-off and application.
12.8 Counterparts. This Agreement may be executed by one or more of
------------
the parties to this Agreement on any number of separate counterparts (including
by telecopy), and all of said counterparts taken together shall be deemed to
constitute one and the same instrument. A set of the copies of this Agreement
signed by all the parties shall be delivered to the Borrower and the
Administrative Agent.
12.9 Severability. Any provision of this Agreement which is
------------
prohibited or unenforceable in any jurisdiction shall, as to such jurisdiction,
be ineffective to the extent of such prohibition or unenforceability without
invalidating the remaining provisions hereof, and any such prohibition or
unenforceability in any jurisdiction
136
shall not invalidate or render unenforceable such provision in any other
jurisdiction.
12.10 Integration. This Agreement and the other Loan Documents
-----------
represent the agreement of the Borrower, the Administrative Agent and the
Lenders with respect to the subject matter hereof, and there are no promises,
undertakings, representations or warranties by the Borrower, the Administrative
Agent, the Collateral Agent or any Lender relative to the subject matter hereof
not expressly set forth or referred to herein or in the other Loan Documents.
12.11 GOVERNING LAW. THIS AGREEMENT AND THE NOTES AND THE RIGHTS AND
-------------
OBLIGATIONS OF THE PARTIES UNDER THIS AGREEMENT AND THE NOTES SHALL BE GOVERNED
BY, AND CONSTRUED AND INTERPRETED IN ACCORDANCE WITH, THE LAWS OF THE PROVINCE
OF ONTARIO, CANADA AND OF CANADA APPLICABLE THEREIN.
12.12 Submission To Jurisdiction; Waivers. Each party hereto hereby
-----------------------------------
irrevocably and unconditionally:
(a) submits for itself and its property in any legal action or
proceeding relating to this Agreement and the other Loan Documents to which
it is a party, or for recognition and enforcement of any judgment in
respect thereof, to the non-exclusive general jurisdiction of the Courts of
the State of New York, the courts of the United States of America for the
Southern District of New York, and appellate courts from any thereof and to
the courts of the Province of Ontario and appellate courts from any
thereof;
(b) consents that any such action or proceeding may be brought in
such courts and waives any objection that it may now or hereafter have to
the venue of any such action or proceeding in any such court or that such
action or proceeding was brought in an inconvenient court and agrees not to
plead or claim the same;
137
(c) agrees that service of process in any such action or proceeding
may be effected by mailing a copy thereof by registered or certified mail
(or any substantially similar form of mail), postage prepaid, to the
Borrower, the applicable Lender, the Collateral Agent or the Administrative
Agent, as the case may be, at the address specified in subsection 12.2 or
on Schedule 1 hereof, or at such other address of which the Administrative
Agent and the Borrower shall have been notified pursuant thereto;
(d) agrees that nothing herein shall affect the right to effect
service of process in any other manner permitted by law or shall limit the
right to xxx in any other jurisdiction; and
(e) waives, to the maximum extent not prohibited by law, any right it
may have to claim or recover in any legal action or proceeding referred to
in this subsection any punitive damages.
12.13 Acknowledgements. The Borrower hereby acknowledges that:
----------------
(a) it has been advised by counsel in the negotiation, execution and
delivery of this Agreement and the Notes and the other Loan Documents;
(b) neither the Administrative Agent, the Collateral Agent or any
Lender has any fiduciary relationship with or duty to the Borrower arising
out of or in connection with this Agreement or any of the other Loan
Documents, and the relationship between the Administrative Agent, the
Collateral Agent and the Lenders, on one hand, and the Borrower, on the
other hand, in connection herewith or therewith is solely that of debtor
and creditor; and
(c) no joint venture is created hereby or by the other Loan Documents
or otherwise exists by virtue of
138
the transactions contemplated hereby among the Lenders or among the
Borrower and the Lenders.
12.14 WAIVERS OF JURY TRIAL. THE BORROWER, THE ADMINISTRATIVE AGENT,
---------------------
THE COLLATERAL AGENT AND THE LENDERS HEREBY IRREVOCABLY AND UNCONDITIONALLY
WAIVE TRIAL BY JURY IN ANY LEGAL ACTION OR PROCEEDING RELATING TO THIS AGREEMENT
OR THE NOTES OR ANY OTHER LOAN DOCUMENT AND FOR ANY COUNTERCLAIM THEREIN.
12.15 Confidentiality. The Administrative Agent, the Collateral Agent
---------------
and each Lender agree to keep confidential any written or oral information (a)
provided to it by or on behalf of the Borrower or any of its Subsidiaries
pursuant to or in connection with this Agreement or (b) obtained by such Lender
based on a review of the books and records of the Borrower or any of its
Subsidiaries; provided that nothing herein shall prevent the Administrative
--------
Agent, the Collateral Agent or any Lender from disclosing any such information
(i) to the Administrative Agent or any other Lender, (ii) to any Transferee or
prospective Transferee which agrees to comply with the provisions of this
subsection, (iii) to its affiliates, employees, directors, agents, attorneys,
accountants and other professional advisors, provided that the Administrative
--------
Agent, the Collateral Agent or such Lender shall inform each such Person of the
agreement under this subsection 12.15 and shall be responsible for any failure
by any such Person referred to in this clause (iii) to comply with this
Agreement, (iv) upon the request or demand of any Governmental Authority having
jurisdiction over the Administrative Agent, the Collateral Agent or such Lender
or to the extent required in response to any order of any court or other
Governmental Authority or as shall otherwise be required pursuant to any
Requirement of Law, provided that the Administrative Agent, the Collateral Agent
--------
or such Lender shall notify the Borrower of any disclosure pursuant to this
clause (iv) as far in advance as is reasonably practicable under such
circumstances, (v) which has been publicly disclosed other than in breach of
this
139
Agreement, (vi) in connection with the exercise of any remedy hereunder or (vii)
in connection with periodic regulatory examinations.
12.16 Amendment to Security Documents. Each of the Security Documents
-------------------------------
and the Guarantees is hereby amended to reflect the resignation of Fleet Capital
Corporation (as successor to Shawmut Capital Corporation) as Collateral Agent
and the appointment of Barclays as successor Collateral Agent, and each of the
parties hereto consents to the execution and delivery by Barclays, Fleet Capital
Corporation ("Fleet") and the Borrower of all such instruments and documents
-----
(including, without limitation, UCC-3 assignment forms) as may be reasonably
requested by Barclays to reflect such change in Collateral Agent and the
assignment by Fleet to Barclays of Fleet's rights and obligations as Collateral
Agent.
12.17 Amendment and Restatement. This Agreement amends and restates
-------------------------
the Existing Credit Agreement and is not intended to be and shall not constitute
a novation of any indebtedness outstanding thereunder. Any loans and the
revolving commitments outstanding under the Existing Credit Agreement shall be
deemed Loans and Commitments outstanding under this Agreement.
IN WITNESS WHEREOF, the parties hereto have caused this Agreement to
be duly executed and delivered by their proper and duly authorized officers as
of the day and year first above written.
WESCO DISTRIBUTION-CANADA, INC.
By: _______________________________
Title:
000
XXX XXXX XX XXXX XXXXXX,
as Administrative Agent, Swing
Line Lender and a Lender
By:_________________________________
Title:
By:_________________________________
Title:
BARCLAYS BANK PLC,
as Collateral Agent
By:__________________________________
Title:
GENERAL ELECTRIC CAPITAL
CANADA INC.,
as a Co-Agent and a Lender
By:__________________________________
Title:
MELLON BANK CANADA, as a Co-Agent
and a Lender
By:__________________________________
Title:
000
XXXX XX XXXXXXXX, as a Lender
By:__________________________________
Title:
NATIONAL BANK OF CANADA, as a Lender
By:__________________________________
Title
By:__________________________________
Title:
THE TORONTO-DOMINION BANK, as a Lender
By:__________________________________
Title:
The undersigned Guarantors do hereby consent and agree to the
foregoing Amended and Restated Credit Agreement.
CDW HOLDING CORPORATION
By:______________________
Title:
142
WESCO DISTRIBUTION, INC.
By:_____________________________
Title:
143
SCHEDULE 1 TO
AMENDED AND RESTATED
CREDIT AGREEMENT
--------------------
COMMITMENTS; ADDRESSES
A. Commitment Amounts
================================================================================
Lender Commitment
--------------------------------------------------------------------------------
General Electric Capital Canada Inc. C$8,706,875.00
--------------------------------------------------------------------------------
Mellon Bank Canada 8,706,875.00
--------------------------------------------------------------------------------
National Bank of Canada 8,834,425.00
--------------------------------------------------------------------------------
Bank of Montreal 8,706,875.00
--------------------------------------------------------------------------------
The Bank of Nova Scotia 14,500,000.00
--------------------------------------------------------------------------------
The Toronto-Dominion Bank 13,234,450.00
--------------------------------------------------------------------------------
TOTAL C$62,689,500.00
================================================================================
B. Addresses for Notices
THE BANK OF NOVA SCOTIA
-----------------------
Funding Requests: Other Notices:
----------------- --------------
Scotia Plaza Branch
00 Xxxx Xxxxxx Xxxx 44 King Street West
Toronto, Ontario, M5H 1H1 Xxxxxxx, Xxxxxxx, X0X 0X0
Attention: Xxx X. Xxxxxxx Attn: Xxxxxxx XxXxxxxx
Telephone: (000) 000-0000 Telephone: (000) 000-0000
Telecopier: (000) 000-0000 Telecopier: (000) 000-0000
THE TORONTO-DOMINION BANK
-------------------------
Funding Requests: Other Notices:
----------------- --------------
00 Xxxx Xxxxxx, Xxxx & Xxx Xx. 00 Xxxx Xxxxxxx Xxxxxx
0xx Xxxxx, TD Bank Tower Suite 5430
Toronto, Ontario, M5K 1A2 Xxxxxxx, XX 00000-0000
Attn: Parin Kanji Attn: Xxxxxx Xx Xxxxxxx
Telephone: (000) 000-0000 Telephone: (000) 000-0000
Telecopier: (000) 000-0000 Telecopier: (000) 000-0000
GENERAL ELECTRIC CAPITAL CANADA INC.
------------------------------------
Funding Requests: Other Notices:
----------------- ---------------
000 Xxxx Xxxxx Xxxx 000 Xxxx Xxxxx Xxxx
Xxxxxxxx, XX 00000-0000 Xxxxxxxx, XX 00000-0000
Attn: Portfolio Analyst - WESCO Attn: Xxxxx Xxxxx
Telephone: (000) 000-0000 Telephone: (000) 000-0000
Telecopier: (000) 000-0000 Telecopier: (000) 000-0000
MELLON BANK CANADA
------------------
Funding Requests: Other Notices:
----------------- ---------------
Mellon Bank Center One Mellon Bank Center
0000 Xxxxxx Xxxxxx, 0xx Xxxxx Xxxx 0000
X.X. Xxx 0000 Xxxxxxxxxx, XX 00000
Attn: Xxxxxxx Xxxxxx Attn: Xxxx Xxxxxxxx
Telephone: (000) 000-0000 Telephone: (000) 000-0000
Telecopier: (000) 000-0000 Telecopier: (000) 000-0000
0
XXXXXXXX XXXX XX XXXXXX
-----------------------
Funding Requests: Other Notices:
----------------- ---------------
000 Xxxx Xxxxxx, 0xx Xxxxx 000 Xxxx Xxxxxx, 0xx Xxxxx
Xxxxxxx Xxxxxxx, X0X 0X0 Xxxxxxx, Xxxxxxx X0X 0X0
Attn: Xxxx Xxxxxx Attn: Xxxxxxx Xxxxxx
Telephone: (000) 000-0000 Telephone: (000) 000-0000
Telephone: (000) 000-0000 Telecopier: (0000) 000-0000
BANK OF MONTREAL
----------------
Funding Requests: Other Notices:
----------------- ---------------
First Xxxxxxxx Xxxxx, 00xx Xxxxx First Canadian Place, 24th Floor
Toronto, Canada M5X 1A1 Xxxxxxx, Xxxxxx X0X 0X0
Attn: Xxxx XxXxxxxx Attn: Xxxx XxXxxxxx
Telephone: (000) 000-0000 Telephone: (000) 000-0000
Telecopy: (000) 000-0000 Telecopy: (000) 000-0000
2
Schedule 6.3 to
Amended and Restated
Credit Agreement
--------------------
CONSENTS
NIL
SCHEDULE 6.6
FILING JURISDICTIONS
1. Federal
-------
Filing in the Toronto office of the Bank of Canada of Notices of Intention
with respect to all of the Bank Act Security.
2. British Columbia
----------------
Registration under the Personal Property Security Act (B.C.) of a Financing
Statement in respect of the Demand Debenture and the General Assignment of
Book Debts.
3. Alberta
-------
Registration under the Personal Property Security Act (Alberta) of a
Financing Statement in respect of the Demand Debenture and the General
Assignment of Book Debts.
4. Saskatchewan
------------
Registration under the Personal Property Security Act (Saskatchewan) of a
Financing Statement in respect of the Demand Debenture and the General
Assignment of Book Debts.
5. Manitoba
--------
Registration under the Personal Property Security Act (Manitoba) of a
Financing Statement in respect of the Demand Debenture, together with a
notarially certified copy thereof.
Registration under the Personal Property Security Act (Manitoba) of a
Financing Statement in respect of the General Assignment of Book Debts,
together with a notarially certified copy thereof.
6. Ontario
-------
Registration under the Personal Property Security Act (Ontario) of a
Financing Statement in respect of the Demand Debenture and the General
Assignment of Book Debts.
7. Quebec
------
Registration under the Civil Code of Quebec of an application for
registration form RH in respect of the Quebec Moveable Hypothec at the
register of personal and movable real rights.
8. New Brunswick
-------------
Filing of the Demand Debenture at the Office of the Registrar under the
Corporations Securities Registration Act (N.B.).
Filing of the General Assignment of Book Debts in the Assignment of Book
Debts Registry maintained at the Office of the Registrar of Deeds for the
County of York.
9. Nova Scotia
-----------
Registration of the Debenture at the Office of the Registrar of Joint Stock
Companies at Halifax under the Corporations Securities Registration Act
(N.S.).
Filing of the General Assignment of Book Debts at the Office of the
Registrar of Deeds for the County of Halifax under the Assignment of Book
Debts Act (N.S.).
2
10. Newfoundland
------------
Registration under the Registration of Deeds Act (Newfoundland) of the
Demand Debenture.
Registration under the Assignment of Book Debts Act (Newfoundland) of the
General Assignment of Book Debts.
3
SCHEDULE 9
SECURITY AGREEMENTS
-------------------
Demand Debenture
Debenture Pledge Agreement
General Assignment of Book Debts
Quebec Moveable Hypothec
Bank Act Security, comprised of
Notice of Intention to Give Security
General Assignment Under Section 427(l)(a),(b),(c) or (e) of the Bank
Act (Canada)
Application for Credit and Promise to Give Security Under Section 427
of the Bank Act (Canada)
Agreement as to Loans and Advances and Security Therefor
SCHEDULE 8.7 TO
AMENDED AND RESTATED
CREDIT AGREEMENT
--------------------
DEPOSITARY BANKS
----------------
Bank Name Bank Acct. # Location Acct. Description
--------- ------------ -------- -----------------
The Toronto-Dominion Bank 0690-0000000 Toronto, Ont. Concentration
Bank of Montreal 0000000 Toronto, Ont. Deposit
The Toronto-Dominion Bank 0690-0000000 Toronto, Ont. WESCO General Funds
Account
The Toronto-Dominion Bank 0690-0000000 Toronto, Ont. A/P Disb-Can Pay
The Toronto-Dominion Bank 0690-0000000 Toronto, Ont. A/P Disb-US Pay
EXHIBIT A-1 TO
AMENDED AND RESTATED
CREDIT AGREEMENT
--------------------
[FORM OF REVOLVING CREDIT NOTE]
C$_______________ Toronto, Ontario
March 14, 1997
FOR VALUE RECEIVED, the undersigned, WESCO DISTRIBUTION-CANADA, INC.,
a corporation organized and existing under the laws of the Province of Ontario
(the "Borrower"), hereby unconditionally promises to pay to the order of
--------
_____________ (the "Lender") at the office of THE BANK OF NOVA SCOTIA ("Bank of
------ -------
Nova Scotia"), located at Scotia Plaza Branch, 00 Xxxx Xxxxxx Xxxx, Xxxxxxx,
-----------
Xxxxxxx, Xxxxxx X0X 0X0 in lawful money of Canada and in immediately available
funds, the principal amount of the lesser of (a) ____________ CANADIAN DOLLARS
AND _________ CENTS (C$____________) and (b) the aggregate unpaid principal
amount of the Revolving Credit Loans made by the Lender to the undersigned
pursuant to subsection 2.1, 2.4(c), 2.5(c), 3.5(b)(iii), 3.6(d) or 4.5(c) of the
Credit Agreement referred to below, which sum shall be payable on the earlier of
(i) the Termination Date (as defined in the Credit Agreement referred to below)
and (ii) the date on which the Commitments (as defined in the Credit Agreement
referred to below) are terminated.
The Borrower further agrees to pay interest in like money at such
office on the unpaid principal amount hereof from time to time at the applicable
rates per annum and on the dates specified in subsections 5.1 and 5.4 of the
Credit Agreement until such principal amount is paid in full (both before and
after judgment).
The holder of this Revolving Credit Note is authorized to record the
date and amount of each Revolving Credit Loan made by it pursuant to subsection
2.1, 2.4(c), 2.5(c), 3.5(b)(iii), 3.6(d) or 4.5(c) of the Credit Agreement, each
continuation thereof, and the date and amount of each payment or prepayment of
principal thereof on its internal books and records and/or on the schedules
annexed hereto and made a part hereof, which recordation on such schedules shall
constitute prima facie
----- -----
evidence of the accuracy of the information so recorded; provided that failure
--------
by the Lender to make any such recordation (or any error in any such
recordation) shall not affect the obligations of the Borrower under this
Revolving Credit Note or the Credit Agreement.
This Revolving Credit Note is one of the Revolving Credit Notes
referred to in the Amended and Restated Credit Agreement, dated as of March 14,
1997 (as amended, supplemented or otherwise modified from time to time, the
"Credit Agreement"), among the Borrower, the several banks and other financial
-----------------
institutions from time to time parties thereto (including the Lender) (the
"Lenders"), Bank of Nova Scotia, as Administrative Agent for the Lenders and
--------
Barclays Bank PLC, as Collateral Agent, and is entitled to the benefits thereof,
is secured and guaranteed as provided therein and is subject to optional and
mandatory prepayment in whole or in part as provided therein. Terms used herein
which are defined in the Credit Agreement shall have such defined meanings
unless otherwise defined herein or unless the context otherwise requires.
Upon the occurrence of any one or more of the Events of Default
specified in the Credit Agreement, all amounts then remaining unpaid on this
Revolving Credit Note shall become, or may be declared to be, immediately due
and payable, all as provided therein.
All parties now and hereafter liable with respect to this Revolving
Credit Note, whether maker, principal, surety, guarantor, endorser or otherwise,
hereby waive presentment, demand, protest and all other notices of any kind,
except as expressly required by the terms of the Credit Agreement and the Loan
Documents.
2
THIS REVOLVING CREDIT NOTE SHALL BE GOVERNED BY, AND CONSTRUED AND
INTERPRETED IN ACCORDANCE WITH, THE LAWS OF THE PROVINCE OF ONTARIO, CANADA AND
OF CANADA APPLICABLE THEREIN.
WESCO DISTRIBUTION-CANADA, INC.
By: __________________________
Title:
3
Schedule A to
Revolving
Credit Note
-----------
LOANS AND PAYMENTS
OF PRIME RATE LOANS
-------------------
=========================================================================================================
Unpaid Principal
Amount of Prime Amount of Principal Balance of
Date Rate Loan Made Repaid Prime Rate Loans Notation Made by
---------------------------------------------------------------------------------------------------------
---------------------------------------------------------------------------------------------------------
---------------------------------------------------------------------------------------------------------
---------------------------------------------------------------------------------------------------------
---------------------------------------------------------------------------------------------------------
---------------------------------------------------------------------------------------------------------
---------------------------------------------------------------------------------------------------------
---------------------------------------------------------------------------------------------------------
---------------------------------------------------------------------------------------------------------
---------------------------------------------------------------------------------------------------------
---------------------------------------------------------------------------------------------------------
---------------------------------------------------------------------------------------------------------
---------------------------------------------------------------------------------------------------------
---------------------------------------------------------------------------------------------------------
---------------------------------------------------------------------------------------------------------
---------------------------------------------------------------------------------------------------------
---------------------------------------------------------------------------------------------------------
---------------------------------------------------------------------------------------------------------
---------------------------------------------------------------------------------------------------------
---------------------------------------------------------------------------------------------------------
---------------------------------------------------------------------------------------------------------
---------------------------------------------------------------------------------------------------------
=========================================================================================================
EXHIBIT A-2 TO
AMENDED AND RESTATED
CREDIT AGREEMENT
--------------------
[FORM OF SWING LINE NOTE]
C$5,000,000.00 Toronto, Ontario
March 14, 1997
FOR VALUE RECEIVED, the undersigned, WESCO DISTRIBUTION-CANADA, INC.,
a corporation organized and existing under the laws of the Province of Ontario
(the "Borrower"), hereby unconditionally promises to pay to the order of THE
--------
BANK OF NOVA SCOTIA ("Bank of Nova Scotia") (the "Swing Line Lender") at the
------------------- -----------------
office of the Swing Line Lender located at Scotia Plaza Branch, 00 Xxxx Xxxxxx
Xxxx, Xxxxxxx, Xxxxxxx, Xxxxxx X0X 0X0 in lawful money of Canada and in
immediately available funds, the principal amount of the lesser of (a) FIVE
MILLION CANADIAN DOLLARS (C$5,000,000) and (b) the aggregate unpaid principal
amount of all Swing Line Loans made by the Swing Line Lender to the Borrower
pursuant to subsection 2.5 of the Credit Agreement referred to below, which sum
shall be payable on the earlier of (i) the Termination Date (as defined in the
Credit Agreement referred to below) and (ii) the date on which the Swing Line
Commitment (as defined in the Credit Agreement referred to below) is terminated.
The Borrower further agrees to pay interest in like money at such
office on the unpaid principal amount hereof from time to time at the applicable
rates per annum and on the dates specified in subsections 5.1 and 5.4 of the
Credit Agreement until such principal amount is paid in full (both before and
after judgment).
The holder of this Swing Line Note is authorized to record the date
and the amount of each Swing Line Loan and the date and amount of each payment
or prepayment of principal thereof, on its internal books and records and/or on
the schedule annexed to and made a part hereof, which recordation on such
schedule shall constitute prima facie evidence of the accuracy of the
----- -----
information so recorded, provided that the failure by the
--------
Swing Line Lender to make any such recordation (or any error in such
recordation) shall not affect the obligations of the Borrower under this Swing
Line Note or the Credit Agreement.
This Swing Line Note is the Swing Line Note referred to in the Amended
and Restated Credit Agreement, dated as of March 14, 1997 (as amended,
supplemented or otherwise modified from time to time, the "Credit Agreement"),
----------------
among the Borrower, the several banks and other financial institutions from time
to time parties thereto (the "Lenders"), Bank of Nova Scotia, as Administrative
-------
Agent for the Lenders and Barclays Bank PLC, as Collateral Agent, and is
entitled to the benefits thereof, is secured and guaranteed as provided therein
and is subject to optional and mandatory prepayment in whole or in part as
provided therein. Terms used herein which are defined in the Credit Agreement
shall have such defined meanings unless otherwise defined herein or unless the
context otherwise requires.
Upon the occurrence of any one or more of the Events of Default
specified in the Credit Agreement, all amounts remaining unpaid on this Swing
Line Note shall become, or may be declared to be, immediately due and payable
all as provided therein.
All parties now and hereafter liable with respect to this Swing Line
Note, whether maker, principal, surety, guarantor, endorser or otherwise, hereby
waive presentment, demand, protest and all other notices of any kind, except as
expressly required by the terms of the Credit Agreement and the Loan Documents.
THIS SWING LINE NOTE SHALL BE GOVERNED BY, AND CONSTRUED AND
INTERPRETED IN ACCORDANCE WITH, THE LAWS OF THE PROVINCE OF ONTARIO, CANADA AND
OF CANADA APPLICABLE THEREIN.
WESCO DISTRIBUTION-CANADA, INC.
By: _________________________
Title:
2
Schedule A to
Swing Line Note
---------------
SWING LINE LOANS AND PAYMENTS OF PRINCIPAL
------------------------------------------
================================================================================
AMOUNT OF AMOUNT OF UNPAID
SWING LINE PRINCIPAL PRINCIPAL NOTATION
DATE LOANS REPAID BALANCE MADE BY
--------------------------------------------------------------------------------
--------------------------------------------------------------------------------
--------------------------------------------------------------------------------
--------------------------------------------------------------------------------
--------------------------------------------------------------------------------
--------------------------------------------------------------------------------
--------------------------------------------------------------------------------
--------------------------------------------------------------------------------
--------------------------------------------------------------------------------
--------------------------------------------------------------------------------
--------------------------------------------------------------------------------
--------------------------------------------------------------------------------
--------------------------------------------------------------------------------
--------------------------------------------------------------------------------
--------------------------------------------------------------------------------
--------------------------------------------------------------------------------
--------------------------------------------------------------------------------
--------------------------------------------------------------------------------
--------------------------------------------------------------------------------
--------------------------------------------------------------------------------
--------------------------------------------------------------------------------
--------------------------------------------------------------------------------
================================================================================
EXHIBIT B TO
AMENDED AND RESTATED
CREDIT AGREEMENT
--------------------
[NAME OF LENDER]
BANKER'S ACCEPTANCE
No._______________
Due_______________
On ______________
For value received pay to the order of
the undersigned drawer the sum of ______________DOLLARS
Drawn by
______________COMPANY
To: [NAME OF LENDER] _________________________
[ADDRESS] Authorized Signature
_________________________
Authorized Signature
ACCEPTED
Date:
Payable at
[Name of Lender]
[Address]
_________________________
Authorized Signature
_________________________
Authorized Signature
FOR VALUE RECEIVED, [Name of Lender], (the "Guarantor") hereby
unconditionally guarantees payment of the within Instrument (the "Instrument")
when, where and as the same shall become due and payable without any requirement
that the holder first proceed against [Name of Lender].
The Guarantor waives notice of acceptance of this guarantee and notice
of non-payment of the Instrument. The unconditional obligation of the Guarantor
hereunder will not be affected, impaired or released by and extension of time
for payment of the Instrument or by any other matter or thing whatsoever which
would release a guarantor.
Corporate action has been duly taken by the Guarantor to authorized
execution of this guarantee.
This guarantee shall be governed by and construed in accordance with
laws of [Jurisdiction of incorporation of Lender].
The date of this guarantee is the date of the Instrument.
IN WITNESS WHEREOF, [Name of Lender], has caused this guarantee to be
executed on its behalf by facsimile signature, by two of its authorized
officers.
[NAME OF LENDER],
By:______________________
Authorized Officer
By:______________________
Authorized Officer
2
This guarantee shall become valid only when the acceptance has been signed
manually on behalf of [Name Lender].
3
EXHIBIT C TO
AMENDED AND RESTATED
CREDIT AGREEMENT
--------------------
[NAME OF LENDER]
_____________________ BRANCH
POWER OF ATTORNEY - GENERAL
The undersigned hereby appoints [NAME OF LENDER] (hereinafter called
the "Lender"), acting by any authorized signatory of the Lender, the attorney of
------
the undersigned:
(a) to sign for and on behalf and in the name of the undersigned as
drawer, drafts drawn on the Lender payable to the order of the
undersigned or payable to the order of the Lender;
(b) to fill in the amount, date and maturity date of such drafts;
(c) in the case of such drafts payable to the order of any person other
than the Lender, to endorse such drafts in blank for and on behalf of
and in the name of the undersigned; and
(d) to discount and/or deliver such drafts which have been accepted by the
Lender;
provided that such acts in each case are to be undertaken by the Lender in
accordance with instructions given to the Lender by the undersigned as provided
in this power of attorney.
Instructions from the undersigned to the Lender relating to the
execution, completion, endorsement, discount and/or delivery by the Lender on
behalf of the undersigned of drafts which the undersigned wishes to submit to
the Lender for acceptance by the Lender shall be communicated to the Lender on
behalf of the undersigned in writing to the Lender's manager or acting manager
at the branch where the undersigned has an account with the Lender (in
accordance with the terms of the Amended and Restated Credit Agreement, dated as
of March 14, 1997, to which the undersigned and the Lender are parties (as
amended,
supplemented or otherwise modified from time to time, the "Credit Agreement"))
----------------
and shall specify the following information:
(a) reference to this power of attorney;
(b) a Canadian dollar amount, which shall be the aggregate face amount of
the drafts to be drawn in a particular transaction; and
(c) a specified period of time (not less than 30 days or in excess of 180
days) which shall be the number of days after date that the drafts are
to be payable, and the dates of issues and maturity of the drafts; and
(d) discount/payment instructions specifying the account number of the
undersigned and the financial institution at which the proceeds of
discount are to be credited.
The communication in writing by the undersigned to the Lender of the
instructions referred to above shall constitute (a) the authorization and
instruction of the undersigned to the Lender to complete and/or endorse drafts
in accordance with such information as set out above and (b) the request of the
undersigned to the Lender to accept such drafts and discount the same. The
undersigned acknowledges that the Lender shall not be obligated to accept any
such drafts.
The Lender shall be and it is hereby authorized to act on behalf of the
undersigned upon and in compliance with instructions communicated to the Lender
as provided herein if the Lender reasonably believes them to be genuine. If,
but only if, the Lender is prepared to accept drafts pursuant to any such
instructions, the Lender shall confirm particulars of such instructions and
advise the undersigned that the Lender has complied therewith by notice in
writing addressed to the undersigned and served personally or sent by prepaid
registered mail or by telex, telecopier or other form of recorded communication
to the address of the undersigned as shown on the books kept in relation to the
account of the undersigned at the branch of the Lender from which such notice is
mailed or
2
transmitted by telex, telecopier or other form of recorded communication. Any
notice so given shall be deemed to have been given and received, if mailed, on
the third business day next following the mailing thereof; if transmitted by
telex, telecopier or other form of recorded communication, on the first business
day after its transmission; and if served personally, on the date of delivery.
The Lender's actions confirmed and advised to the undersigned by such notice
shall be conclusively deemed to have been in accordance with the instructions of
the undersigned unless the undersigned notifies the Lender to the contrary in
writing not later than the business day next following such deemed receipt by
the undersigned. Notice in writing to the Lender as contemplated hereby may be
delivered by hand at the branch of the Lender from which the notice given by the
Lender was mailed or transmitted by telex, telecopier or other form of recorded
communication.
The undersigned hereby agrees and promises to pay the Lender, on the
maturity date thereof, the face amount of each draft signed, completed and
endorsed as contemplated herein and accepted by the Lender, such payment to be
made in immediately available funds in Canadian dollars at the branch of the
Lender specified above, free and clear of and without deduction by reason of any
taxes or charges whatsoever, and for purposes of effecting any such payment, the
undersigned hereby authorizes the Lender to debit any deposit account of the
undersigned maintained with the Lender, but the Lender shall not be required
hereby to effect any such debit.
The undersigned agrees to indemnify the Lender and its directors,
officers, employees and agents and to hold it and them harmless from and against
any loss, liability, expense or claim of any kind or nature whatsoever incurred
by any of them as a result of any action or inaction in any way relating to or
arising out of this power of attorney or the acts contemplated hereby.
This power of attorney may be revoked at any time upon not less than 5
business days' written notice served upon the Lender at its branch referred to
above, provided that (i) it
3
shall be replaced with another power of attorney forthwith in accordance with
the requirements of subsection 3.2(b) of the Credit Agreement; and (ii) no such
revocation shall reduce, limit or otherwise affect the obligations of the
undersigned in respect of any draft executed, completed, endorsed, discounted
and/or delivered in accordance herewith prior to the time at which such
revocation becomes effective.
This power of attorney shall be governed in all respects by the laws
of the jurisdiction in which the branch of the Lender named on page 1 hereof is
located and the federal laws of Canada applicable in such jurisdiction and each
of the undersigned and the Lender hereby irrevocably attorns to the non-
exclusive jurisdiction of the courts of such jurisdiction in respect of all
matters arising out of this power of attorney.
This power of attorney is in addition to and not in substitution of
any agreement to which the Lender and the undersigned are parties.
In the event of a conflict between the provisions of this Power of
Attorney and the Credit Agreement, the Credit Agreement shall prevail.
4
The undersigned has (have) expressly requested that this document be
drawn up in the English language. Le(s) soussigne(s) a(ont) expressement
demande que ce document soit redige en langue anglaise.
DATED at _______________ this ___ day of __________________,
19__.
SIGNED SEALED AND DELIVERED Name: ______________________________
in the presence of
____________________________ By: ______________________________
(Witness) Name:
Title:
Must be
sealed and
witnessed
if signed
by an
individual
____________________________ By: ______________________________
(Witness) Name:
Title:
Note: If the undersigned is a corporation, the corporate seal must be
affixed and this form must be accompanied by a certified copy of a
resolution of the director(s) of the corporation authorizing the
execution and delivery of this form.
Please have the undersigned initial all alterations/ deletions made to
this form.
5
EXHIBIT D TO
AMENDED AND RESTATED
CREDIT AGREEMENT
--------------------
WESCO DISTRIBUTION-CANADA, INC
March 14, 1997
[Landlord's Name
and Address]
[Address of Leased Facility]
----------------------------
Dear Landlord:
WESCO, the electrical products distribution division (the "Division")
of Westinghouse Canada, Inc., is the tenant at the above location (the
"Property"). As you know, in connection with the sale of the assets of the
Division, Westinghouse is assigning its interest in the lease of the Property to
the undersigned, WESCO Distribution-Canada, Inc.
In connection with the acquisition of the assets of the Division, we
have arranged for financing from a group of banks to which The Bank of Nova
Scotia is serving as Administrative Agent. These banks have agreed to make loans
to us secured, among other things, by a first lien on any inventory that is now
or in the future may be located at the Property and at other acquired properties
and the Administrative Agent has asked that we notify you and have you agree to
this letter and return it to us in the enclosed postage-paid envelope.
By signing this letter you agree that any lien of any kind that you
may have or obtain on our inventory shall be junior to the Administrative
Agent's lien, and that prior to taking any action to enforce any lien, you will
give the Administrative Agent at least ten (10) business days' prior notice of
your intent to take action. If we should default to the banks, you agree that in
all circumstances the Administrative Agent may have access to the Property for
the purpose of removing or selling the inventory, provided that the
Administrative Agent agrees to pay
you for any physical damage to the Property caused by the Administrative Agent
in connection with any removal or sale.
Because these loans are important for the future of our company and
because the bank group and the Administrative Agent will be relying on this
letter, we would greatly appreciate it if you would sign the enclosed copy of
this letter and return it to me in the enclosed envelope. If you have any
questions, please feel free to contact ___________________, at (____) ________.
Thank you in advance for your cooperation.
Sincerely,
WESCO DISTRIBUTION-CANADA, INC.
By: _________________________
Name:
Title:
Acknowledged and agreed as of
the date first above written:
[Name of Landlord]
By: _________________________
Name:
Title:
2
EXHIBIT E TO
AMENDED AND RESTATED
CREDIT AGREEMENT
--------------------
[FORM OF MONTHLY BORROWING
BASE CERTIFICATE]
MONTHLY BORROWING BASE CERTIFICATE
----------------------------------
Pursuant to subsection 8.2(c) of the Amended and Restated Credit
Agreement, dated as of March 14, 1997 (the "Credit Agreement"), among WESCO
Distribution-Canada, Inc. (the "Borrower"), the Lenders (as defined therein),
The Bank of Nova Scotia, as Administrative Agent, and Barclays Bank PLC, as
Collateral Agent, the Borrower hereby certifies, and represents and warrants,
that this Monthly Borrowing Base Certificate and the attached Schedules are a
true, correct and complete statement regarding the status of Accounts, Eligible
Accounts, Inventory and Eligible Inventory of the Borrower and any Subsidiaries
of the Borrower and that the amounts set forth in such Schedules are in
compliance with the provisions of the Credit Agreement. The Borrower
acknowledges that the Revolving Credit Loans and the Swing Line Loans made to
it, the Acceptances accepted on its behalf and the Letters of Credit issued on
its behalf will be based upon the Administrative Agent's, the collateral Agent's
and the Lenders' reliance on the information contained herein and therein.
The Borrower hereby certifies, and represents and warrants, that it
has been in compliance with the Borrowing Base applicable to it throughout the
period subsequent to the date of delivery of the Monthly Borrowing Base
Certificate most recently delivered prior to this one. Capitalized terms used
herein and not otherwise defined
shall have the meanings ascribed thereto in the Credit Agreement.
Date: WESCO DISTRIBUTION-CANADA, INC.
By:_______________________
Name:
Title:
2
SCHEDULE I TO
MONTHLY BORROWING BASE CERTIFICATE
----------------------------------
(All Amounts are in Thousands)
(1) The Borrowing Base as of is
computed as follows:
(A) Value of 85% of Eligible Accounts
from Schedule A
----------
(B) Value of 60% of Eligible Inventory C$______
from Schedule B
----------
(C) Canadian Inventory Sublimit Amount C$______
(D) Lesser of lines 1(B) and 1(C) C$______
(2) Sum of lines (1)(A) and (1)(D) (Gross C$______
Revolving Availability)
(3) Aggregate principal amount of Revolving C$______
Credit Loans outstanding as of the date
hereof
(4) Aggregate face amount of all C$______
Acceptances outstanding as of the date
hereof
(5) Aggregate L/C Obligations outstanding C$______
as of the date hereof
(6) Aggregate principal amount of Swing C$______
Line Loans outstanding as of the date
hereof
(7) Sum of lines (3), (4), (5) and (6) C$______
(8) Difference between lines (2) and (7) C$______
(Net Revolving Availability)
SCHEDULE A TO
MONTHLY BORROWING BASE CERTIFICATE
----------------------------------
(All Amounts are in Thousands and are
Computed as of ______________)
ELIGIBLE ACCOUNTS
-----------------
1. ACCOUNTS RECONCILIATION
===============================================================================
TOTAL
-----
-------------------------------------------------------------------------------
Previous Month's Accounts Balance (per Aged C$
Trial Balance)
--------------------------------------------------------------------------------
Add: Sales
---
--------------------------------------------------------------------------------
Debit Adjustments
--------------------------------------------------------------------------------
Less: Collections
----
--------------------------------------------------------------------------------
Credit Adjustments
--------------------------------------------------------------------------------
Miscellaneous Adjustments
--------------------------------------------------------------------------------
End of Month's Accounts Balance (per Aged C$
Trial Balance)
================================================================================
2. AGED TRIAL BALANCE
Detailed Attachment To Be Provided By the Borrower.
VALUE OF ELIGIBLE ACCOUNTS
--------------------------
(All Amounts are in Thousands and are
Computed as of )
================================================================================
TOTAL
-------
--------------------------------------------------------------------------------
Gross Accounts Receivable C$
--------------------------------------------------------------------------------
Less Ineligibles:
----------------
--------------------------------------------------------------------------------
Over 60 Days Past Due C$
--------------------------------------------------------------------------------
Legal/Notes C$
--------------------------------------------------------------------------------
Cross Age C$
--------------------------------------------------------------------------------
Aged Credits C$
--------------------------------------------------------------------------------
Contra Accounts C$
--------------------------------------------------------------------------------
Government Receivables (1) C$
--------------------------------------------------------------------------------
Foreign Accounts C$
--------------------------------------------------------------------------------
Claims & Deductions C$
--------------------------------------------------------------------------------
Related Party C$
--------------------------------------------------------------------------------
Miscellaneous Reserves C$
--------------------------------------------------------------------------------
Total Ineligibles C$
--------------------------------------------------------------------------------
Eligible Accounts C$
--------------------------------------------------------------------------------
Advance Rate 85%
--------------------------------------------------------------------------------
Availability C$
================================================================================
Notes:
-----
(1) Excess over C$ 1,000,000 unless Assignment of Claims.
SCHEDULE C TO
MONTHLY BORROWING BASE CERTIFICATE
----------------------------------
ELIGIBLE INVENTORY
------------------
(All Amounts are in Thousands and are
Computed as of )
================================================================================
TOTAL
--------
--------------------------------------------------------------------------------
Gross Book Inventory C$
--------------------------------------------------------------------------------
Less Ineligibles:
----------------
--------------------------------------------------------------------------------
Slow Moving C$
--------------------------------------------------------------------------------
Less: New Product Add Back ( )
----
--------------------------------------------------------------------------------
In Transit C$
--------------------------------------------------------------------------------
Full Absorption C$
--------------------------------------------------------------------------------
Singapore Inventory C$
--------------------------------------------------------------------------------
Specialized Inventory (1) C$
--------------------------------------------------------------------------------
Direct Ship Inventory C$
--------------------------------------------------------------------------------
Intercompany Profit C$
--------------------------------------------------------------------------------
Total Ineligibles C$
--------------------------------------------------------------------------------
Eligible Inventory C$
--------------------------------------------------------------------------------
Advance Rate 60%
--------------------------------------------------------------------------------
Availability C$
================================================================================
Notes:
-----
(1) Specialized inventory is considered eligible up to product of the Canadian
Prepayment Percentage in effect multiplied by C$5,000,000.
EXHIBIT F TO
AMENDED AND RESTATED
CREDIT AGREEMENT
--------------------
[FORM OF ASSIGNMENT AND ACCEPTANCE]
ASSIGNMENT AND ACCEPTANCE
Reference is made to the Amended and Restated Credit Agreement, dated
as of March 14, 1997 (as amended, supplemented or otherwise modified from time
to time, the "Credit Agreement"), among WESCO DISTRIBUTION-CANADA, INC., a
----------------
corporation organized and existing under the laws of the Province of Ontario
(the "Borrower"), the several banks and other financial institutions from time
--------
to time parties thereto (the "Lenders"), The Bank of Nova Scotia, as
-------
Administrative Agent for the Lenders (in such capacity, the "Administrative
--------------
Agent") and Barclays Bank PLC, as Collateral Agent. Unless otherwise defined
-----
herein, terms defined in the Credit Agreement and used herein shall have the
meanings given to them in the Credit Agreement.
____________________ (the "Assignor") and
--------
_____________ (the "Assignee") agree as follows:
--------
1. The Assignor hereby irrevocably sells and assigns to the Assignee
without recourse to the Assignor, and the Assignee hereby irrevocably
purchases and assumes from the Assignor without recourse to the Assignor,
as of the Transfer Effective Date (as defined below), a ___% interest (the
"Assigned Interest") in and to the Assignor's rights and obligations under
-----------------
the Credit Agreement with respect to those credit facilities provided for
in the Credit Agreement as are set forth on Schedule 1 (individually, an
"Assigned Facility"; collectively, the "Assigned Facilities"), in a
----------------- -------------------
commitment amount for each Assigned Facility as set forth on Schedule 1.
2. The Assignor (a) makes no representation or warranty and assumes
no responsibility with respect to any statements, warranties or
representations made in
or in connection with the Credit Agreement or the execution, legality,
validity, enforceability, genuineness, sufficiency or value of the Credit
Agreement, any other Loan Document or any other instrument or document
furnished pursuant thereto, other than that it has not created any adverse
claim upon the interest being assigned by it hereunder and that such
interest is free and clear of any such adverse claim; (b) makes no
representation or warranty and assumes no responsibility with respect to
the financial condition of the Borrower, any of its Subsidiaries or any
other obligor or guarantor or the performance or observance by the
Borrower, any of its Subsidiaries or any other obligor or guarantor of any
of their respective obligations under the Credit Agreement or any other
Loan Document or any other instrument or document furnished pursuant hereto
or thereto; and (c) attaches the Note(s) held by it evidencing the Assigned
Facilities and requests that the Administrative Agent exchange such Note(s)
for a new Note or Notes payable to the Assignee and (if the Assignor has
retained any interest in the Assigned Facility) a new Note or Notes payable
to the Assignor in the respective amounts which reflect the assignment
being made hereby (and after giving effect to any other assignments which
have become effective on the Transfer Effective Date).
3. The Assignee (a) represents and warrants that it is legally
authorized to enter into this Assignment and Acceptance; (b) confirms that
it has received a copy of the Credit Agreement and the other Credit
Documents, together with copies of the financial statements delivered
pursuant to subsection 8.1 thereof and such other documents and information
as it has deemed appropriate to make its own credit analysis and decision
to enter into this Assignment and Acceptance; (c) agrees that it will,
independently and without reliance upon the Assignor, the Administrative
Agent, the Collateral Agent or any other Lender and based on
2
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 the Credit Agreement, the other Loan Documents or any other
instrument or document furnished pursuant hereto or thereto; (d) appoints
and authorizes the Administrative Agent and the Collateral Agent to take
such action as agent on its behalf and to exercise such powers and
discretion under the Credit Agreement, the other Loan Documents or any
other instrument or document furnished pursuant hereto or thereto as are
delegated to the Administrative Agent or the Collateral Agent (as
applicable) by the terms thereof, together with such powers as are
incidental thereto; and (e) agrees that it will be bound by the provisions
of the Credit Agreement and will perform in accordance with its terms all
the obligations which by the terms of the Credit Agreement are required to
be performed by it as a Lender, including its obligations pursuant to the
subsection 12.15 of the Credit Agreement.
4. The effective date of this Assignment and Acceptance shall be
__________ ___, 19__ (the "Transfer Effective Date"). Following the
-----------------------
execution of this Assignment and Acceptance, it will be delivered to the
Administrative Agent for acceptance by it and recording by the
Administrative Agent pursuant to subsection 12.6 of the Credit Agreement,
effective as of the Transfer Effective Date (which shall not, unless
otherwise agreed to by the Administrative Agent, be earlier than five
Business Days after the date of such acceptance and recording by the
Administrative Agent).
5. Upon such acceptance and recording, from and after the Transfer
Effective Date, the Administrative Agent shall make all payments in respect
of the Assigned Interest (including payments of principal, interest, fees
and other amounts) to the Assignee whether such amounts have accrued prior
to the Transfer Effective Date or accrue subsequent to the Transfer
3
Effective Date. The Assignor and the Assignee shall make all appropriate
adjustments in payments by the Administrative Agent for periods prior to
the Transfer Effective Date or with respect to the making of this
assignment directly between themselves.
6. From and after the Transfer Effective Date, (a) the Assignee
shall be a party to the Credit Agreement and, to the extent provided in
this Assignment and Acceptance, have the rights and obligations of a Lender
thereunder and under the other Loan Documents and shall be bound by the
provisions thereof and (b) the Assignor shall, to the extent provided in
this Assignment and Acceptance, relinquish its rights and be released from
its obligations under the Credit Agreement.
7. Notwithstanding any other provision hereof, if the consent of the
Borrower hereto is required under subsection 12.6 of the Credit Agreement,
this Assignment and Acceptance shall not be effective unless such consent
shall have been obtained.
8. This Assignment and Acceptance shall be governed by and construed
in accordance with the laws of the State of New York.
IN WITNESS WHEREOF, the parties hereto have caused this Assignment and
Acceptance to be executed as of the date first above written by their respective
duly authorized officers on Schedule 1 hereto.
4
SCHEDULE 1 to the
Assignment and Acceptance
-------------------------
Re: Amended and Restated Credit Agreement, dated as of March 14, 1997,
among WESCO DISTRIBUTION-CANADA, INC., the Lenders from time to time
parties thereto, The Bank of Nova Scotia, as Administrative Agent and
Barclays Bank PLC, as Collateral Agent.
Name of Assignor:
Name of Assignee:
Transfer Effective Date of Assignment:
Credit Commitment Commitment Percentage
Facility Assigned Amount Assigned Assigned
----------------- --------------- ---------------------
$_______________ ___. ____________%
[NAME OF ASSIGNEE] [NAME OF ASSIGNOR]
By: ______________________ By:______________________
Title: Title:
Accepted: Consented To:
THE BANK OF NOVA SCOTIA, WESCO DISTRIBUTION-
as Administrative Agent CANADA, INC.
By: ______________________ By:______________________
Title: Title:
SCHEDULE 9
SECURITY AGREEMENTS
-------------------
Demand Debenture
Debenture Pledge Agreement
General Assignment of Book Debts
Quebec Moveable Hypothec
Bank Act Security, comprised of
Notice of Intention to Give Security
General Assignment Under Section 427(1)(a),(b),(c) or
(e) of the Bank Act (Canada)
Application for Credit and Promise to Give Security
Under Section 427 of the Bank Act (Canada)
Agreement as to Loans and Advances and Security Therefor
EXECUTION COPY
FIRST AMENDMENT (this "First Amendment"), dated as of February 13,
---------------
1998, to the Amended and Restated Credit Agreement, dated as of March 14, 1997
----------------
(the "Credit Agreement"), among WESCO DISTRIBUTION-CANADA, INC., a corporation
organized and existing under the laws of the Province of Ontario (the
"Borrower"), the several banks and other financial institutions from time to
--------
time parties thereto (the "Lenders"), THE BANK OF NOVA SCOTIA, a Canadian
-------
chartered bank ("Bank of Nova Scotia"), as administrative agent for the Lenders
thereunder (in such capacity, the "Administrative Agent"), and BARCLAYS BANK
--------------------
PLC, a banking corporation organized under the laws of the United Kingdom as
collateral agent for the Lenders thereunder (in such capacity, the "Collateral
----------
Agent").
-----
W I T N E S S E T H :
-------------------
WHEREAS, the Borrower has requested and the Administrative Agent, the
Collateral Agent and the Lenders have agreed, subject to the terms and
conditions hereof, to amend the Credit Agreement for the purpose of, among other
things, (i) modifying the definition of "Margin Reduction Percentage", (ii)
modifying the definitions of "Borrowing Base" and "Borrowing Base Elimination
Period", (iii) modifying the definition of "Termination Date", (iv) modifying
the definition of "Consolidated EBITDA", (v) modifying the definition of
"Consolidated Interest Expense" and (vi) releasing all of the Collateral and
releasing the Collateral Agent from its obligations under the Credit Agreement.
NOW, THEREFORE, in consideration of the mutual agreements herein
contained and other good and valuable consideration, receipt of which is hereby
acknowledged, the parties hereto hereby agree to amend the Credit Agreement as
follows:
1. Defined Terms. Capitalized terms used herein and not defined
-------------
herein shall have the meanings assigned to such terms in the Credit Agreement,
as amended by this First Amendment.
2. Amendment to Section 1 of the Credit Agreement.
----------------------------------------------
a. Section 1 of the Credit Agreement is hereby amended by adding the
following new definitions in proper alphabetical order:
"Bond Rating": the Moody's Bond Rating and the S&P Bond Rating.
-----------
"First Amendment": the First Amendment, dated as of February 13,
---------------
1998, to this Credit Agreement.
"First Amendment Effective Date": as defined in paragraph 5 of the
------------------------------
First Amendment.
"Moody's": Xxxxx'x Investors Service, Inc.
-------
"Moody's Bond Rating": for any day, the actual rating of the U.S.
-------------------
Borrower's senior long-term unsecured debt by Moody's in effect at 9:00
A.M., New York City time, on such day. If Moody's shall have changed its
system of classifications after the date of the First Amendment, the
Moody's Bond Rating shall be considered to be at or above a specified level
if it is at or above the new rating which most closely corresponds to such
specified level under the old rating system.
"S&P": Standard and Poor's Ratings Service.
---
"S&P Bond Rating": for any day, the actual rating of the U.S.
---------------
Borrower's senior long-term unsecured debt by S&P in effect at 9:00 A.M.,
New York City time, on such day. If S&P shall have changed its system of
classifications after the date of the First Amendment, the S&P Bond Rating
shall be considered to be at or above a specified level if it is at or
above the new rating which most closely corresponds to such specified level
under the old rating system.
b. Section 1 of the Credit Agreement is hereby amended by deleting
the definitions of "Borrowing Base", "Borrowing Base Elimination Period",
"Consolidated EBITDA", "Consolidated Interest Expense", "Margin Reduction
Percentage" and "Termination Date", each in its entirety and replacing each with
the following:
"Borrowing Base": an amount equal to the aggregate Commitments.
--------------
"Borrowing Base Elimination Period": the period commencing on the
---------------------------------
First Amendment Effective Date and ending on the Termination Date.
"Consolidated EBITDA": of any Person, for any period, the
-------------------
Consolidated Net Income of such Person for such period, adjusted to exclude
the following items of income or expense to the extent that such items are
included in the calculation of Consolidated Net Income: (a) Consolidated
Interest Expense, (b) any non-cash interest expense and any other non-cash
expenses and charges, (c) total income tax expense, (d) depreciation
expense, (e) the expense associated with amortization of intangible and
other assets, (f) non-cash provisions for reserves for discontinued
operations, (g) any extraordinary, unusual or non-recurring gains or losses
or charges or credits and (h) any gains or losses associated with the sale
or write-up or write-down of assets,
2
provided that in the event that such Person makes an Investment in any
--------
other Person pursuant to subsection 8.10(g) of the U.S. Credit Agreement on
any date during such period, the Consolidated EBITDA for such period shall
be computed on the assumption that such Investment and any related
financing thereof was completed on the first day of such period.
"Consolidated Interest Expense": of any Person, for any period, cash
-----------------------------
interest expense of such Person for such period on its Indebtedness
determined on a consolidated basis in accordance with GAAP, provided that
--------
in the event that the such Person makes an Investment in any other Person
pursuant to subsection 8.10(g) of the U.S. Credit Agreement on any date
during such period the Consolidated Interest Expense for such period shall
be computed on the assumption that such Investment and any related
financing thereof was completed on the first day of such period.
"Margin Reduction Percentage": (a) during the period from and
---------------------------
including the Closing Date to but excluding the Adjustment Date which
occurs concurrently with the delivery by the Borrower pursuant to
subsection 8.1(b) or 8.1(c) as applicable of financial statements of the
U.S. Borrower for the quarterly period ended June 30, 1995, zero and (b)
during each Margin Adjustment Period which commences on or after the
Adjustment Date referred to in clause (a) above, and
(i) if the Borrower's Moody's Bond Rating and/or S&P Bond Rating on
the last day of the quarter immediately proceeding the commencement of
such Margin Adjusted Period is at or above Baa3/BBB-, and if either
the Moody's Bond Rating or the S&P Bond Rating on such day is (A) at
or above A3/A-, .85% (when used in the definitions of Prime Rate
Margin and L/C Commission Rate and in subsection 3.4) and .425% (when
used in the definition of Commitment Fee Rate), (B) at or above
Baa1/BBB+, but below A3/A-, .81% (when used in the definitions of
Prime Rate Margin and L/C Commission Rate and in subsection 3.4) and
.415% (when used in the definition of Commitment Fee Rate), (C) at or
above Baa2/BBB, but below Baa1/BBB+, .775% (when used in the
definitions of Prime Rate Margin and L/C Commission Rate and in
subsection 3.4) and .40% (when used in the definition of Commitment
Fee Rate), (D) at or above Baa3/BBB-, but below Baa2/BBB, .75% (when
used in the definitions of Prime Rate Margin and L/C Commission Rate
and in subsection 3.4) and .35% (when used in the definition of
Commitment Fee Rate);
3
(ii) if the Borrower's Moody's Bond Rating and/or S&P Bond Rating on
the last day of the quarter immediately preceding the commencement of
such Margin Adjusted Period is below Baa3/BBB-, and if the Fixed
Charge Coverage Ratio for the four consecutive fiscal quarters of the
U.S. Borrower ending immediately preceding the commencement of such
Margin Adjustment Period (determined by reference to the certificates
delivered pursuant to subsection 8.2(b) concurrently with the
financial statements delivered under subsection 8.1(a), (b) or (c), or
the Annual Unaudited Financial Statements (as defined below in this
definition), as the case may be, with respect to such four consecutive
fiscal quarters) is (i) less than 3.00:1, zero, (ii) less than 3.50:1
but greater than or equal to 3.00:1, 0.125% (when used in the
definitions of Prime Rate Margin and L/C Commission Rate and
subsection 3.4) and 0.125% (when used in the definition of Commitment
Fee Rate), (iii) less than 4.00:1 but greater than or equal to 3.50:1,
0.375% (when used in the definitions of Prime Rate Margin and L/C
Commission Rate and subsection 3.4) and 0.125% (when used in the
definition of Commitment Fee Rate), (iv) less than 4.50:1 but greater
than or equal to 4.00:1, 0.5625% (when used in the definitions of
Prime Rate Margin and L/C Commission Rate and subsection 3.4) and
0.1875% (when used in the definition of Commitment Fee Rate), (v) less
than 5.00:1 greater than or equal to 4.50:1, 0.65% (when used in the
definitions of Prime Rate Margin and L/C Commission Rate and
subsection 3.4) and 0.25% (when used in the definition of Commitment
Fee Rate), (vi) greater than or equal to 5.00:1, .725% (when used in
the definitions of Prime Rate Margin and L/C Commission Rate and
subsection 3.4) and 0.275% (when used in the definition of Commitment
Fee Rate);
provided that notwithstanding the forgoing paragraph (b):
--------
(w) if at any time the a percentage determined pursuant to
paragraph (b)(i) by reference to a Bond Rating exceeds the percentage
determined by reference to the other respective Bond Rating, the
Margin Reduction Percentage shall be the higher percentage (unless the
difference between the two Bond Ratings is two or more levels, in
which case the Margin Reduction Percentage shall be determined by
reference to the Bond Rating which is one level higher than the lower
of such two Bond Ratings);
(x) during any period from and including the date on which an
Event of Default has occurred to but excluding the date on which such
Event of Default is no longer continuing, the Margin Reduction
Percentage shall be zero;
4
(y) if for any Margin Adjustment Period the rate is determined
pursuant to paragraph (b)(ii), above, and the Borrower delivers to the
Administrative Agent any financial statements referred to in clause
(b) of the definition of Adjustment Date (each, an "Annual Unaudited
----------------
Financial Statement") and thereafter the financial statements
-------------------
delivered pursuant to subsection 8.1(a) in respect of the period
covered by such Annual Unaudited Financial Statement demonstrates a
Fixed Charge Coverage Ratio for such period which differs from that
demonstrated by such Annual Unaudited Financial Statement, any change
in the Margin Reduction Percentage occurring as a result of such
difference shall be given retroactive effect to the first Business Day
after delivery of such Annual Unaudited Financial Statement; and
(z) if any Financial Statement Delivery Default becomes an Event
of Default, the Margin Reduction Percentage (if greater than zero)
that was in effect for the period commencing on the date such
Financial Statement Delivery Default occurred to the date such
Financial Statement Delivery Default became an Event of Default shall
be retroactively adjusted to zero for such period and shall remain
zero until the first Business Day following receipt by the
Administrative Agent of the financial statements the failure to
deliver which gave rise to such Financial Statement Delivery Default,
which date shall constitute an Adjustment Date and upon which date the
Margin Adjustment Percentage shall be determined in accordance with
the other provisions of this definition.
If payments are made hereunder on the basis of a Margin Reduction
Percentage that is retroactively adjusted as a result of the occurrence of
any of the events described in clauses (x), (y) or (z) of the proviso to
the immediately preceding sentence, the Lenders and the Borrower shall make
such payments to the Administrative Agent (which shall credit the account
of the Borrower or allocate such payments among the Lenders in accordance
with their respective interests in the payments theretofore made hereunder,
as the case may be, on the basis of the Margin Reduction Percentage that
was so retroactively adjusted) as may be necessary to give effect to such
adjustment, such payments to be calculated by the Administrative Agent
(which shall notify the Borrower and the Lenders thereof) and to be made as
soon as practicable (but in any event no later than two Business Days after
such notice is given by the Administrative Agent) and to include interest
at the applicable Bank of Canada Effective Rate for the period from the
date to which the Margin Reduction Percentage has been retroactively
adjusted to the date of the applicable payment on any amounts required to
be paid as a result of such retroactive adjustment.
5
"Termination Date": February 28, 2001.
----------------
3. Amendment of Section 9.3 to the Credit Agreement. Section 9.3 is
------------------------------------------------
hereby amended by deleting it in its entirety.
4. Amendment of Schedule 1 to the Credit Agreement. The table of
-----------------------------------------------
Commitment Amounts set forth in Part A of Schedule 1 of the Credit Agreement is
hereby deleted in its entirety and replaced by the table set forth in Part A of
Schedule 1 to this First Amendment.
5. Termination of Existing Security Documents. The Administrative
------------------------------------------
Agent and the Lenders hereby agree to (i) terminate all "Security Documents" (as
defined in the Credit Agreement), and (ii) release and return, without recourse,
representation or warranty, all collateral security delivered under such
Security Documents. The Collateral Agent is hereby released by the Lenders, the
Borrower and the Administrative Agent from any duties and obligations in its
capacity as Collateral Agent under the Agreement.
6. Conditions of Effectiveness. This First Amendment shall become
---------------------------
effective upon satisfaction of each of the following conditions: (i) the signing
of this First Amendment, or, as the case may be, the consent hereto provided for
below, by the Lenders (after giving effect to this First Amendment), the
Borrower, the U.S. Borrower, Holdings and each Subsidiary Guarantor, (ii) the
occurrence of the "First Amendment Effective Date" under and as defined in the
First Amendment, dated as of February 13, 1998 to the U.S. Credit Agreement and
(iii) the first date upon which each of the conditions precedent set forth below
are satisfied (the date upon which all the conditions set forth in clauses (i),
(ii) and (iii) above shall be satisfied, the " First Amendment Effective Date").
-------------------------------
a. Representations and Warranties. Each of the representations and
------------------------------
warranties made by any Loan Party (other than RealCo) pursuant to the
Credit Agreement, this First Amendment or any other Loan Document (or in
any amendment, modification or supplement hereto or thereto) to which it is
a party, and each of the representations and warranties contained in any
certificate furnished at any time by or on behalf of any such Loan Party
pursuant to this Agreement or any other Loan Document shall, except to the
extent that they relate to a particular date, be true and correct in all
material respects on and as of the First Amendment Effective Date as if
made on and as of such date.
b. No Default. No Default or Event of Default shall have occurred
----------
and be continuing on and as of the First Amendment Effective Date.
6
c. Corporate Proceedings of the Borrower. The Administrative Agent
-------------------------------------
shall have received, with a copy for each Lender, a copy of the
resolutions, in form and substance reasonably satisfactory to the
Administrative Agent, of the Board of Directors of the Borrower authorizing
the execution, delivery and performance of this First Amendment and any
other related documents to which it is or will be a party, certified by the
Secretary or an Assistant Secretary of the Borrower as of the First
Amendment Effective Date, which certificate shall be in form and substance
reasonably satisfactory to the Administrative Agent and shall state that
the resolutions thereby certified have not been amended, modified (except
as any later such resolution may modify any earlier such resolution),
revoked or rescinded.
d. Incumbency Certificates of the Borrower. The Administrative Agent
---------------------------------------
shall have received, with a copy for each Lender, a certificate of a
Responsible Officer of the Borrower, dated the First Amendment Effective
Date, as to the incumbency and signature of the officers of the Borrower
executing this First Amendment and any related document, reasonably
satisfactory in form and substance to the Administrative Agent.
7. Prepayment of Loans. On the First Amendment Effective Date, the
-------------------
Borrower agrees to prepay all of the Loans outstanding under the Credit
Agreement as well as any unpaid and accrued interest thereon and any
amounts payable pursuant to subsections 5.3 and 5.5 of the Credit Agreement
therewith.
8. APPLICABLE LAW. THIS FIRST AMENDMENT SHALL BE GOVERNED BY, AND
--------------
CONSTRUED IN ACCORDANCE WITH, THE LAWS OF THE PROVINCE OF ONTARIO, CANADA AND OF
CANADA APPLICABLE THEREIN.
9. Counterparts. This First Amendment may be executed in two or more
------------
counterparts, each of which shall constitute an original, but all of which when
taken together shall constitute but one instrument.
10. Headings. Section headings used in this First Amendment are for
--------
convenience of reference only, are not part of this First Amendment and are not
to affect the construction of, or to be taken into consideration in
interpreting, this First Amendment.
11. Credit Agreement. Except as expressly amended hereby, the Credit
----------------
Agreement shall continue in full force and effect in accordance with the
provisions thereof in effect on the date hereof. As used therein, the terms
"Agreement", "this Agreement", "herein", "hereinafter", "hereunder", "hereto"
and words of similar import shall mean, from
7
and after the First Amendment Effective Date, unless the context otherwise
specifically requires, the Credit Agreement as amended by this First Amendment.
8
IN WITNESS WHEREOF, the parties hereto have caused this First
Amendment to be duly executed and delivered by their proper and duly authorized
officers as of the day and year first above written.
WESCO DISTRIBUTION-CANADA, INC.
By: /s/
---------------------------------------
Name:
Title:
THE BANK OF NOVA SCOTIA, as Administrative
Agent Swing Line Lender and a Lender
By: /s/
---------------------------------------
Name:
Title:
BARCLAYS BANK PLC, as Collateral Agent
By: /s/
---------------------------------------
Name:
Title:
MELLON BANK CANADA, as a Co-Agent and a
Lender
By: /s/
---------------------------------------
Name:
Title:
9
FIRST CHICAGO NBD BANK CANADA, as a Lender
By: /s/
-------------------------------
Name:
Title:
THE TORONTO-DOMINION BANK, as a Lender
By: /s/
-------------------------------
Name:
Title:
Consented and Agreed to:
CDW HOLDINGS CORPORATION, as a Guarantor
under the Credit Agreement
By: /s/
-------------------------------
Name:
Title:
WESCO DISTRIBUTION, INC.,
as the Borrower under the
U.S. Credit Agreement
By: /s/
-------------------------------
Name:
Title:
10
SCHEDULE 1 TO THE
First Amendment
---------------
COMMITMENTS
A. Commitment Amounts
================================================================================
Lender Commitment
--------------------------------------------------------------------------------
Xxxxx Xxxxxxx XXX Xxxx, Xxxxxx $ 8,706,875
--------------------------------------------------------------------------------
Mellon Bank Canada 8,706,875
--------------------------------------------------------------------------------
The Bank of Nova Scotia 21,465,500
--------------------------------------------------------------------------------
The Toronto-Dominion Bank 23,810,250
--------------------------------------------------------------------------------
TOTAL $62,689,500
================================================================================
